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"value": "-2000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:EffectOfExchangeRateChangesOnCashAndCashEquivalents", "entity": "scheme:54930092XIVK28RZGM95", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-420": { "value": "1782000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:54930092XIVK28RZGM95", "period": "2023-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-421": { "value": "2064000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashAndCashEquivalents", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-7": { "value": "5000000", "decimals": -6, "dimensions": { "concept": "quilterplc:ContingentConsiderationPaymentRelatingToHistoricalAcquisition", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-8": { "value": "7000000", "decimals": -6, "dimensions": { "concept": "quilterplc:ContingentConsiderationPaymentRelatingToHistoricalAcquisition", "entity": "scheme:54930092XIVK28RZGM95", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-9": { "value": "328000000", "decimals": -6, "dimensions": { "concept": "quilterplc:CapitalReturnFromNetSurplusArisingFromSaleOfQuilterInternationalClassifiedAsFinancingActivities", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-425": { "value": "General information Quilter plc (the \u201cParent Company\u201d), a public limited company incorporated in England and Wales and domiciled in the United Kingdom (\u201cUK\u201d), together with its subsidiaries (collectively, the \u201cGroup\u201d) offers investment and wealth management services, long-term savings and financial advice through its subsidiaries and associates primarily in the UK. Quilter plc is listed on the London and Johannesburg Stock Exchanges. The address of the registered office is Senator House, 85 Queen Victoria Street, London, EC4V 4AB. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-423": { "value": "General information Quilter plc (the \u201cParent Company\u201d), a public limited company incorporated in England and Wales and domiciled in the United Kingdom (\u201cUK\u201d), together with its subsidiaries (collectively, the \u201cGroup\u201d) offers investment and wealth management services, long-term savings and financial advice through its subsidiaries and associates primarily in the UK. Quilter plc is listed on the London and Johannesburg Stock Exchanges. The address of the registered office is Senator House, 85 Queen Victoria Street, London, EC4V 4AB. 1: Basis of preparation The consolidated financial statements of Quilter plc for the year ended 31 December 2022 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. These consolidated financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments, and are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates. The separate financial statements of the Company are on pages 196 to 203. The Company financial statements are prepared in accordance with the Group\u2019s accounting policies, other than for investments in subsidiaries, which are stated at cost less impairments in accordance with IAS 27 Separate Financial Statements. Going concern The Directors have considered the resilience of the Group, its current financial position, the principal risks facing the business and the effectiveness of any mitigating strategies which are or could be applied. This included an assessment of capital and liquidity over a three-year planning period. As part of the going concern assessment, the Group took into consideration the current position of the UK economy including the impact of inflation and increases in the cost of living. The Group also took into consideration risks related to climate change. Based on the assessment, the Directors believe that both the Group and Quilter plc as the Parent Company, have sufficient financial resources to continue in business for a period of at least 12 months from the date of approval of these financial statements and continue to adopt the going concern basis in preparing the Group and Parent Company financial statements. Further information is contained in the viability statement and going concern section of the Annual Report. Basis of consolidation The Group\u2019s consolidated financial statements incorporate the assets, liabilities and the results of the Company and its subsidiaries. Subsidiaries are those entities, including investment funds, controlled by the Group. More information on how the Group assesses whether it has control over an entity is provided in accounting policy 5(a). Subsidiaries are consolidated from the date the Group obtains control and are excluded from consolidation from the date the Group loses control. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with Group policies. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between Group companies are eliminated on consolidation. Liquidity analysis of the statement of financial position The Group\u2019s statement of financial position is in order of liquidity as is permitted by IAS 1 Presentation of Financial Statements. For each asset and liability line item, those amounts expected to be recovered or settled more than 12 months after the reporting date are disclosed separately in the notes to the consolidated financial statements. Critical accounting estimates and judgements The preparation of financial statements requires management to exercise judgement in applying the Group\u2019s significant accounting policies and make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. The Board Audit Committee reviews these areas of judgement and estimates and the appropriateness of significant accounting policies adopted in the preparation of these financial statements. Critical accounting judgements The Group\u2019s critical accounting judgements are detailed below and are those that management makes when applying the significant accounting policies and that have the most effect on the net profit and net assets recognised in the Group\u2019s financial statements. Recognition of provisions following the sale of Quilter International Management exercised significant judgement in determining the accounting treatment for a number of provisions related to business activities to separate the business from the Group in respect of the sale of Quilter International. Significant judgement was required to assess whether the costs were directly attributable and incremental to the sale and whether a legal or constructive obligation existed in order to recognise the provisions. See note 28 for further details. Basis of preparation and significant accounting policies For the year ended 31 December 2022
1: Basis of preparation continued
Critical accounting judgements continued
Recognition of insurance recovery asset in respect of Lighthouse defined benefit pension advice
For Lighthouse defined benefit (\u201cDB\u201d) to defined contribution (\u201cDC\u201d) pension transfer advice provided, management has previously applied judgement
in order to determine whether an asset can be reasonably estimated, and in respect of the measurement of such an asset, in relation to an insurance
recovery under Lighthouse\u2019s professional indemnity policies (\u201cPI Policies\u201d). During 2022, the insurers confirmed coverage up to the PI Policies\u2019 limit of
indemnity of \u00a315 million for these legal liabilities. These obligations to the Group were settled in full during 2022. As a result the recognition and
measurement of an insurance asset is no longer considered a critical accounting judgement.
Critical accounting estimates
The Group\u2019s critical accounting estimates involve the most complex or subjective assessments and assumptions, which have a significant risk of
resulting in material adjustment to the net carrying amounts of assets and liabilities within the next financial year. Management uses its knowledge
of current facts and circumstances and applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting
standards and guidance to make predictions about future actions and events. Actual results may differ from those estimates.
Provision for the cost of defined benefit pension advice
An estimate was determined for unsuitable pension advice related to schemes other than those concluded as part of the skilled person review,
using a methodology which takes account of recent experience of redress payments calculated by an independent expert and applying a proportion
of transfer value to determine redress payable as an indicative provision. The calculations are based upon FCA guidelines and modelling performed,
and factors including pension transfer value, date of retirement, discount rate and inflation rate assumptions.
Measurement of deferred tax
The estimation of future taxable profits is performed as part of the annual business planning process, and is based on estimated levels of AuMA,
which are subject to a large number of factors including global stock market movements, related movements in foreign exchange rates and net client
cash flows, together with estimates of expenses and other charges. The Business Plan, adjusted for known and estimated tax sensitivities, is used to
determine the extent to which deferred tax assets are recognised. In general, the Group assesses the recoverability of shareholder assets based on
estimated taxable profits over a three-year planning horizon and assesses policyholder assets based on estimated investment growth over the
medium term. Management has reassessed the sensitivity of the recoverability of deferred tax assets based on the latest forecast cash flows.
See note 29 for further details.
Other principal estimates
The Group\u2019s assessment of goodwill and intangible assets for impairment uses the latest cash flow forecasts from the Group\u2019s three-year Business
Plan. These forecasts include estimates relating to equity market levels and growth in AuMA in future periods, together with levels of new business
growth, net client cash flow, revenue margins, and future expenses and discount rates (see note 14). These forecasts take account of the climate-related
risks and other responsible business considerations. Management does not consider that the use of these estimates has a significant risk of causing a
material adjustment to the carrying amount of the assets within the next financial year.
2: New standards, amendments to standards, and interpretations adopted by the Group
There were no new standards or interpretations which became effective from 1 January 2022.
The following amendments to accounting standards became applicable for the current reporting year, with no material impact on the Group\u2019s
consolidated results, financial position or disclosures:
Adopted by the Group from Amendments to standards
1 January 2022
Amendments to IAS 16 Property, Plant and Equipment \u2013 Proceeds before Intended Use
1 January 2022
Annual Improvements 2018-2020 Cycle
1 January 2022
Amendments to IFRS 3 References to the Conceptual Framework
1 January 2022
Amendments to IAS 37 Onerous Contracts \u2013 Cost of Fulfilling a Contract
3: Future standards, amendments to standards, and interpretations not early-adopted in these financial statements
Certain new standards, interpretations and amendments to existing standards have been published by the International Accounting Standards
Board (\u201cIASB\u201d) that are mandatory for the Group\u2019s annual accounting periods beginning on or after 1 January 2022. The Group has not early adopted
these standards, interpretations and amendments, nor does the Group expect these to have a material impact on the Group\u2019s consolidated
financial statements.
\u2013 IFRS 17 Insurance contracts
The IASB issued IFRS 17 Insurance Contracts in May 2017 and Amendments to IFRS 17 in June 2020. IFRS 17 will replace its interim predecessor, IFRS 4
Insurance Contracts. IFRS 17 is a comprehensive standard which provides a single accounting model for all insurance contracts. IFRS 17 will replace a
wide range of different accounting practices previously permitted, improving transparency and enabling investors and regulators to understand and
compare the financial position and performance of an insurer, irrespective of where they are based geographically. The standard, including the
June 2020 amendments, was endorsed by the UK Endorsement Board in May 2022. The effective date of IFRS 17 is 1 January 2023.
Following disposals of Quilter Life Assurance (\u201cQLA\u201d) and Quilter International in 2019 and 2021, the Group has assessed its remaining contracts with
policyholders. On the basis of this assessment, it was determined that there are no contracts that will be accounted for under IFRS 17.
4: Significant changes in the year
Capital return, Share Consolidation and changes to comparative amounts
On 12 May 2022, shareholder approval was received at the General Meeting, for a capital return of \u00a3328 million (20 pence per share) to shareholders
of Quilter plc by way of a B Share Scheme. The capital return represented the net surplus proceeds from the sale of Quilter International after retaining
funds for planned Business Simplification and selected revenue enhancing investments. The B shares were created out of the Company\u2019s merger
reserve, which had a balance of \u00a31,687 million prior to the share creation.
To maintain comparability of shareholder metrics before and after the capital return, the scheme was accompanied by a Share Consolidation
(see note 25(a)). The weighted average number of shares used to calculate the comparative EPS metrics has not been adjusted for the impact of the
Share Consolidation due to the associated reduction in resources as a result of the return of capital.
The capital return reduced the Group\u2019s IFRS net assets and Solvency II own funds by \u00a3328 million, comprised of \u00a3331 million cash paid upon
redemption of the B shares, offset by a foreign exchange gain of \u00a33 million on South African Rand held between the date the capital return was
announced and the redemption of the B shares for the JSE portion of the capital return.
5: Significant accounting policies
The Group\u2019s significant accounting policies are described below. There have been no changes to the Group\u2019s significant accounting policies as a result
of changes in accounting standards during the year. The accounting policies disclosed in these notes have been consistently applied throughout the
current and prior financial year.
5(a): Group accounting
Subsidiaries
Subsidiary undertakings are those entities (investees) controlled by the Group. The Group controls an investee if, and only if, the Group has all of the
following three elements of control:
\u00b7 power over the investee;
\u00b7 exposure or rights to variable returns from its involvement with the investee; and
\u00b7 the ability to affect those returns through its power over the investee.
For operating entities, this usually arises with a shareholding in the entity of 50% or more. The Group also consolidates certain of its interests in
open-ended investment companies (\u201cOEICs\u201d), unit trusts, mutual funds and similar investment vehicles (collectively \u201cinvestment funds\u201d). Where,
as is often the case with investment funds, voting or similar rights are not the dominant factor in deciding who controls the investee, other factors
are considered in the control assessment. These are described in more detail below.
The Group continually assesses any changes to facts and circumstances to determine, in the context of the three elements of control listed above,
whether it still controls the investee and is therefore required to consolidate it.
Associates
Associates are entities over which the Group has significant influence, but not control or joint control, through its participation in the entity\u2019s financial
and operating policy decisions. Significant influence is generally demonstrated by the Group holding between 20% and 50% of the voting rights. Voting
rights are not the only consideration, all other relevant factors, contractual or otherwise, are assessed in determining whether the Group has the ability
to exercise significant influence.
The results, assets and liabilities of associates, other than those that are measured at FVTPL (see below) are incorporated into these consolidated
financial statements using the equity method of accounting from the date that significant influence commences until the date it ends. Under this
method, the cost of the investment in an associate together with the Group\u2019s share of that entity\u2019s post-acquisition changes to shareholders\u2019 funds
is included as an asset in the consolidated statement of financial position. The cost includes goodwill recognised on acquisition. Subsequent to initial
recognition, the consolidated financial statements include the Group\u2019s share of the profit or loss and other comprehensive income of the associate
until the date on which significant influence ceases. Where a Group entity transacts with an associate of the Group, unrealised profits and losses are
eliminated to the extent of the Group\u2019s interest in the relevant associate. Unrealised losses are eliminated in the same way but only to the extent that
there is no evidence of impairment. Investments in associates that are held with a view to subsequent resale are accounted for as non-current assets
held for sale.
Where the Group has an investment in an associate, a portion of which is held by, or is held indirectly through a unit trust or similar entity, including
through unit-linked funds, that portion of the investment is measured at F VTPL.
The Group has classified one entity, 360 Dot Net Limited, as an associate in the current and prior year.
5: Significant accounting policies continued
5(a): Group accounting continued
Investment funds
The Group invests in a wide range of investment funds such as OEICs and unit trusts generally in respect of its unit-linked investment contracts
where investments are made to match the investment choices of its clients. For some of these funds, it also acts as fund manager. These funds invest
predominantly in equities, bonds, cash and cash equivalents. The Group holds interests in these investment funds mainly through the receipt of fund
management fees, in the case where the Group acts as fund manager, which provide a variable return based on the value of the funds under
management and other criteria, and in the case of third-party funds where fund performance has an impact on fund-based fees within unit-linked
investment contracts and other similar client investment products. Where the Group acts as fund manager, it may also hold investments in the
underlying funds, through acquiring units or shares. Where these investments are held in unit-linked funds, the Group has a secondary exposure
to variable returns through the management fees that it deducts from unit-linked policyholders\u2019 account balances. The Group\u2019s percentage ownership
can fluctuate from day-to-day according to the Group\u2019s participation in them as clients\u2019 underlying investment choices change.
When assessing the control of investment funds, the Group considers the purpose and design of the fund, the scope of its decision-making authority,
including its ability to direct relevant activities and to govern the operations of a fund so as to obtain variable returns from that fund and its ability to use
its power to affect these returns, both from the perspective of an investor and an asset manager. In addition, the Group assesses rights held by other
parties including substantive removal (\u201ckick-out\u201d) rights that may affect the Group\u2019s ability to direct relevant activities.
On consolidation, the interests of parties other than the Group are classified as a liability in the Group\u2019s statement of financial position and are
described as \u201cthird-party interests in consolidated funds\u201d. Such interests are not recorded as non-controlling interests (\u201cNCIs\u201d) as they meet the liability
classification requirement set out in IAS 32 Financial Instruments: Presentation. These liabilities are regarded as current, as they are repayable on
demand, although it is not expected that they will be settled in a short time period.
Business combinations
The Group is required to use the acquisition method of accounting for business combinations. Business combinations are accounted for at the
date that control is achieved (the acquisition date). The cost of a business combination is measured as the aggregate of the fair values (at the date
of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree.
Deferred and contingent consideration relating to acquisitions is recognised as a liability on the date of acquisition.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business Combinations
are recognised at their fair value at the acquisition date.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports
provisional amounts. Where provisional amounts are reported, these are adjusted during the measurement period which extends up to a maximum
of 12 months from the acquisition date. Additional assets or liabilities may also be recognised during this period, to reflect any new information obtained
about the facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the identifiable net assets of the acquired entity
at the date of acquisition. Other acquisition-related costs, not forming part of the cost of acquisition, are expensed as incurred.
Upon disposal, the Group derecognises a subsidiary or disposal group on the date on which control passes. The consolidated income statement
includes the results of a subsidiary or disposal group up to the date of disposal. The difference between the proceeds from the disposal of a subsidiary
undertaking and its carrying amount as at the date of disposal, including the cumulative amount of any related exchange differences that are
recognised in the foreign currency translation reserve, is recognised in the consolidated income statement as the gain or loss on disposal of the
subsidiary undertaking.
Common control combinations
Merger accounting is used by the Group for common control combinations, which are transactions between entities that are ultimately controlled by
the same party or parties. This method treats the merged entities as if they had been combined throughout the current and comparative accounting
periods. Merger accounting principles for these combinations result in the recognition of a merger reserve in the consolidated statement of financial
position, being the difference between the nominal value of any new shares issued by the Parent Company for the acquisition of the shares of the
subsidiary and the subsidiary\u2019s Net Asset Value. Such transactions attract merger relief under section 612 of the Companies Act 2006.
5(b): Fair value measurement
The Group uses fair value to measure the majority of its assets and liabilities. Fair value is a market-based measure and is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For a financial
instrument, the best evidence of fair value at initial recognition is normally the transaction price, which represents the fair value of the consideration
given or received.
Where observable market prices in an active market, such as bid or offer (ask) prices are unavailable, fair value is measured using valuation techniques
based on the assumptions that market participants would use when pricing the asset or liability. If an asset or a liability measured at fair value has a bid
or an offer price, the price within the bid-offer spread that is most representative of fair value is used as the basis of the fair value measurement.
5: Significant accounting policies continued
5(b): Fair value measurement continued
The quality of the fair value measurement for financial instruments is disclosed by way of the fair value hierarchy, whereby Level 1 represents a quoted
market price for identical financial assets and liabilities, Level 2 financial assets and liabilities are valued using inputs other than quoted prices in active
markets included in Level 1, either directly or indirectly and Level 3 whereby financial assets and liabilities are valued using valuation techniques where
one or more significant inputs are unobservable.
Classifying financial instruments into the three levels outlined above provides an indication about the reliability of inputs used in determining fair value.
More information is provided in note 20.
5(c): Product classification
The Group\u2019s life assurance contracts included in the Affluent segment are categorised as investment contracts, in accordance with the classification
criteria set out in the paragraph below.
Investment contracts
Investment contracts do not meet the IFRS definition of an insurance contract as they do not transfer significant insurance risk from the policyholder
to the insurer. Unit-linked investment contracts are separated into two components, being an investment management services component and a
financial liability. The financial liability component is designated at fair value through profit or loss (\u201cFV TPL\u201d) as it is managed on a fair value basis, and its
value is directly linked to the market value of the underlying portfolio of assets. The Group does not directly benefit economically from returns from the
assets held to match policyholder liabilities, apart from secondary exposure to future annual management fees that the Group expects to receive over
the life of the policy.
5(d): Fee income and other income from service activities
Fee income and other income from service activities represent the fair value of services provided, net of value added tax. Revenue is only recognised
to the extent that management is satisfied that it is highly probable that no significant reversal of the revenue recognised will be required when
uncertainties are resolved. In circumstances where refunds are expected on a portion of the income, including indemnity commission on policies sold,
an estimate of the reduction of revenue is made and charged to the income statement at the point of sale, based upon assumptions determined from
historical experience.
Premium-based fees
This relates to non-refundable fees taken on receipt of clients\u2019 investments and recognised on receipt over the life of the contract, in line with the
performance obligation associated with the contract in respect of the administration of the underlying client records and client benefits. Where fees
are received, either at inception or over an initial period for services not yet provided, the income is deferred and recognised as contract liabilities on
the statement of financial position and released to the income statement as services are provided over the lifetime of the contract (see note 32 for
further information).
In addition, this also includes fees in respect of advice provided to clients when the advice has been provided to the client and the financial adviser\u2019s
performance obligation has been fully delivered. Accordingly, fee income is recognised at the inception of the financial product sold.
Fund-based fees
This is periodic fee income based on the market valuation of the Group\u2019s investment contracts. It is calculated and recognised on a daily basis in line
with the provision of investment management services.
This also includes fee income within consolidated funds\u2019 income statements.
Fixed fees
This is periodic fee income which is fixed in value according to underlying contract terms and relates to the provision of services and transactional
dealing fees. It is recognised on provision of the transaction or service.
Surrender fees
Surrender fee income relates to client charges received on the surrender of a contract, which is based on the value of the policy and recognised
on surrender of the policy.
Other fee and commission income
This includes charges taken from unit-linked funds to meet future policyholder tax liabilities. Depending on the nature of the tax liability, the charges
are either recognised at the point a transaction occurs on the unit-linked fund, or annually.
5: Significant accounting policies continued
5(e): Investment return
Investment return comprises two elements (a) investment income and (b) realised and unrealised gains and losses on investments held at FVTPL.
Investment income
Investment income includes dividends on equity securities which are recorded as revenue on the ex-dividend date and interest income which is
recognised using the effective interest rate method which allocates interest and other finance costs at a constant rate over the expected life of the
financial instrument.
Realised and unrealised gains and losses
A gain or loss on a financial investment is only realised on disposal or transfer and represents the difference between the proceeds received,
net of transaction costs, and its original cost (or amortised cost). Unrealised gains or losses, arising on investments which have not been disposed
or transferred, represent the difference between carrying value at the year end and the carrying value at the previous year end or purchase value
(if this occurs during the year), less the reversal of previously recognised unrealised gains or losses in respect of disposals made during the year.
Gains and losses resulting from changes in both market value and foreign exchange rates on investments classified at FVTPL are recognised in the
income statement in the period in which they occur.
5(f): Deferred acquisition costs and contract costs
Investment contracts
Incremental costs, including fee and commission expenses, that are directly attributable to securing either unit-linked investment contracts or other
asset management services are deferred and recognised as contract costs. Contract costs are linked to the contractual right to benefit from providing
investment management services. These are therefore amortised through the income statement consistent with the transfer to the customer of the
services to which the contract relates.
5(g): Investment contract liabilities
The Group\u2019s investment contracts are unit-linked contracts. At inception, investment contract liabilities for unit-linked business are classified as financial
liabilities and measured at FVTPL. For these contracts, the fair value liability is equal to the total value of units allocated to the policyholders, based on
the bid price of the underlying assets in the fund. The FV TPL classification reflects the fact that the matching investment portfolio that backs the
unit-linked liabilities, is managed, and its performance evaluated, on a fair value basis.
Contributions received on investment contracts are treated as policyholder deposits and credited directly to investment contract liabilities on the
statement of financial position, as opposed to being reported as revenue in the income statement. Withdrawals paid out to policyholders on investment
contracts are treated as a reduction to policyholder deposits, reducing the investment contract liabilities on the statement of financial position,
as opposed to being recognised as expenses in the income statement. This practice is known as deposit accounting.
5(h): Financial instruments (other than derivatives)
Financial instruments cover a wide range of financial assets, including financial investments, trade receivables and cash and cash equivalents and
certain financial liabilities, including investment contract liabilities, trade payables, and borrowings. Derivatives, which are also financial instruments, are
covered by accounting policy 5(j). Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group
becomes party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to receive cash
flows have expired or been forfeited by the Group. A financial liability is derecognised when the liability is extinguished.
The Group assesses the objective of a business model in which an asset is held at a portfolio level because this best represents the way the business
is managed and information is reported to management. The assessment considers the stated portfolio policies and objectives. The Group determines
its strategy in holding the financial asset, particularly considering whether the Group earns contractual interest revenue, for example to match the
duration of financial assets to the duration of liabilities that are funding those assets or to realise cash flows through the sale of the assets. The
frequency, volume and timing of sales in prior periods may be reviewed, along with the reasons for such sales and expectations about future sales
activity. These factors enable management to determine which financial assets should be measured at FVTPL.
Initial measurement
A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially
measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.
5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Subsequent measurement The classification of financial assets depends on (i) the purpose for which they were acquired, (ii) the business model in which the financial asset is managed, and (iii) its contractual cash flow characteristics. Two categories are applicable to the Group\u2019s financial assets: FV TPL and amortised cost. This classification determines the subsequent measurement basis. The following accounting policies apply to the subsequent measurement of financial assets. Measurement basis Accounting policies FVTPL These financial assets are subsequently measured at fair value. Net gains and losses, including interest and dividend income, are recognised in profit or loss. Amortised cost These financial assets are subsequently measured at amortised cost using the effective interest rate method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairments are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Amortised cost A financial asset is measured at amortised cost if it meets both of the following conditions and unless recognised as FVTPL on initial recognition applying the Fair Value Option (see below): \u00b7 the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and \u00b7 the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. For the purposes of this assessment, principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. All other financial assets that are not measured at amortised cost are classified and measured at FVTPL. Financial investments Derivative financial assets (which arise as a result of the consolidation of funds, as described in note 5(a)) are classified and measured at FV TPL. In addition, on initial recognition, the Group may irrevocably designate a financial asset at F VTPL that otherwise meets the requirements to be measured at amortised cost, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise (the Fair Value Option). The Group\u2019s interests in pooled investment funds, equity securities and debt securities are mandatorily at FVTPL, as they are part of groups of financial assets which are managed and whose performance is evaluated on a fair value basis. These investments are recognised at fair value initially and subsequently, with changes in fair value recognised in investment return in the income statement. Fixed-term deposits with a maturity profile exceeding three months are categorised as financial investments and are measured at amortised cost. The Group recognises purchases and sales of financial investments on trade date, which is the date that the Group commits to purchase or sell the assets. The costs associated with investment transactions are included within expenses in the income statement. Loans and advances Loans are recognised when cash is advanced to borrowers. Loans to brokers are stated at amortised cost using the effective interest rate method, except for loans at below-market interest rates which are measured at fair value. Loans stated at amortised cost are subject to the impairment requirements outlined below. Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits, money market collective investment funds and other short-term deposits with an original maturity of three months or less. Cash and cash equivalents held within money market collective investment funds are classified as FVTPL. All other cash and cash equivalents are classified as amortised cost which means they are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method and are subject to the impairment requirements outlined below. The carrying amount of cash and cash equivalents, other than money market collective investment funds which are measured at fair value, approximates to their fair value. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. At inception, investment contract liabilities for unit-linked business are recognised as financial liabilities and measured at FVTPL. Other financial liabilities, including the Group\u2019s borrowings and trade payables, are measured at amortised cost using the effective interest method. Trade payables and receivables Trade payables and receivables are classified at amortised cost. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. 5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Investments in subsidiaries Parent Company investments in subsidiary undertakings are initially stated at cost. Subsequently, investments in subsidiary undertakings are stated at cost less any provision for impairment. An investment in a subsidiary is deemed to be impaired when its carrying amount is greater than its estimated recoverable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements. All impairments are recognised in the Parent Company income statement as they occur. Impairment of financial assets The expected loss accounting model for credit losses applies to financial assets measured at amortised cost, but not to financial assets at FVTPL. Financial assets at amortised cost include trade receivables, cash and cash equivalents (excluding money market collective investment funds which are measured at fair value), fixed-term deposits and certain loans and advances. Credit loss allowances are measured on each reporting date according to a three-stage expected credit loss (\u201cECL\u201d) impairment model: Performing financial assets: Stage 1 From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the earlier of the next 12 months or its maturity date (\u201c12-month ECL\u201d). Stage 2 Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (\u201cLifetime ECL\u201d). The assessment of whether there has been a significant increase in credit risk requires considerable judgement, based on the lifetime probability of default (\u201cPD\u201d). Stage 1 and 2 allowances are held against performing loans. The main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset. Impaired financial assets: Stage 3 When a financial asset is considered to be credit-impaired, the allowance for credit losses (\u201cACL\u201d) continues to represent lifetime expected credit losses. However, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount. Application of the impairment model The Group applies the ECL model to all financial assets that are measured at amortised cost: \u00b7 Trade receivables, to which the simplified approach prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. \u00b7 Loans, cash and cash equivalents, and fixed-term deposits at amortised cost, to which the general three-stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is monitored for significant increases in credit risk which would trigger the recognition of a Lifetime ECL allowance. ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with the contract and the cash flows that the Group expects to receive). ECLs for financial assets that are credit-impaired at the reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash flows. ECLs are discounted at the effective interest rate of the financial asset. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and economic conditions. The Group has implemented its impairment methodology for estimating the ACL, taking into account forward-looking information in determining the appropriate level of allowance. In addition, it has identified indicators and set up procedures for monitoring for significant increases in credit risk. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes events such as significant financial difficulty of the borrower or issuer, a breach of contract such as a default or past due event or the restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider. The assumption that the credit risk for balances over 30 days significantly increases has been rebutted on the basis that some balances will exceed 30 days in the normal course of the settlement cycle, and therefore, there is no increase in the credit risk. 5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Presentation of impairment Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Write-offs Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of the amount being recovered. This is generally the case when the Group concludes that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. 5(i): Contract assets Contract assets are not classified as financial assets. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. The expected loss accounting model for credit losses applies to contract assets. The Group applies the ECL model to contract assets, which are measured at amortised cost. The simplified approach prescribed by IFRS 9 is applied to contract assets. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. 5(j): Derivatives The only derivatives recognised in the Group\u2019s statement of financial position arise as a result of the consolidation of funds (described in note 5(a)). Management determines the classification of derivatives at initial recognition and classifies derivatives as mandatorily at F VTPL. All derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. 5(k): Employee benefits Pension obligations The Group operates two types of pension plans which have been established for eligible employees of the Group: \u00b7 Defined contribution schemes where the Group makes contributions to members\u2019 pension plans but has no further payment obligations once the contributions have been paid. \u00b7 Defined benefit plans which provide pension payments upon retirement to members as defined by the plan rules. The Group has funded these liabilities by ring-fencing assets in trustee-administered funds. Defined contribution pension obligations Under a defined contribution plan, the Group\u2019s legal or constructive obligation is limited to the amount it agrees to contribute to a pension fund and there is no obligation to pay further contributions if the fund does not hold sufficient assets to pay benefits. Contributions in respect of defined contribution schemes for current service are expensed in the income statement as staff costs and other employee-related costs when incurred. Defined benefit pension obligations A defined benefit pension plan typically defines the amount of pension benefit that an employee will receive on retirement. For these plans, the Group\u2019s defined benefit obligation is calculated by independent actuaries using the projected unit credit method, which measures the pension obligation as the present value of estimated future cash outflows. The discount rate used is determined based on the yields for investment grade corporate bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Plan assets are measured at their fair value at the reporting date. The net surplus or deficit of the defined benefit plan is recognised as an asset or liability in the statement of financial position and represents the present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan assets. An asset is recognised only where there is an unconditional right to future benefits. The current and past service cost curtailments and settlements are charged to other expenses in the income statement. Remeasurements which comprise gains and losses as a result of experience adjustments and changes in actuarial assumptions, the actual return on plan assets (excluding interest) and the effect of the asset ceiling are recognised immediately in other comprehensive income in the period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Administration costs (other than the costs of managing plan assets) are recognised in the income statement when the service is provided. When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in the income statement when the plan amendment or curtailment occurs.
5: Significant accounting policies continued
5(k): Employee benefits continued
Employee share-based payments
The Group operates a number of share incentive plans for its employees. These involve an award of shares or options in the Group (equity-settled
share-based payments). The Group has not granted awards under cash-settled plans in the current or prior year.
The Group\u2019s incentive plans have conditions attached before the employee becomes entitled to the award. These can be performance and/or service
conditions (vesting conditions) or conditions that are often wholly within the control of the employee, for example where the employee has to provide
funding during the vesting period, which is then used to exercise share options (non-vesting condition).
Performance conditions may be market-based or non-market-based. Market-based performance conditions are those related to an entity\u2019s equity,
such as achieving a specified share price or target based on a comparison of the entity\u2019s share price with an index of share prices. Non-market
performance conditions are those related to an entity\u2019s profit or revenue targets, an example of which would be Earnings per Share (\u201cEPS\u201d).
Market-based performance conditions and non-vesting conditions are taken into account when estimating the fair value of the share or option awards
at the measurement date. The fair value of the share awards or options is not adjusted to take into account non-market performance features. These
are taken into consideration by adjusting the number of equity instruments in the share-based payment measurement and this adjustment is made
each period until the equity instruments vest.
The fair value of share-based payment awards granted is recognised as an expense in the income statement over the vesting period which accords
with the period for which related services are provided by the employee. A corresponding increase in equity is recognised for equity-settled plans.
For equity-settled plans, the fair value is determined at grant date and not subsequently remeasured.
At each period end, the Group reassesses the number of equity instruments expected to vest and recognises any difference between the revised
and original estimate in the income statement with a corresponding adjustment to the share-based payments reserve in equity.
At the time the equity instruments vest, the amount recognised in the share-based payments reserve in respect of those equity instruments
is transferred to retained earnings.
5(l): Tax
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and
any adjustment to income tax payable in respect of previous years. In the UK, a change in tax law is substantively enacted when it has been accepted
by the House of Commons. Current tax is charged or credited to the income statement, except when it relates to items recognised directly in equity
or in other comprehensive income.
Deferred tax
Deferred tax represents the tax on profits or losses which are required by law to be taxed in a different year to the year in which they impact the Group\u2019s
financial statements.
Deferred tax is calculated according to the statement of financial position method, based on temporary differences between the tax base of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences can be utilised.
Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive
income. In certain circumstances, as permitted by accounting standards, deferred tax balances are not recognised. In particular, where the liability
relates to the initial recognition of goodwill, or transactions that are not a business combination and at the time of their occurrence affect neither
accounting nor taxable profit. Note 29 includes further detail of circumstances in which the Group does not recognise temporary differences.
Policyholder tax
Certain products are subject to tax on the policyholder investment returns. This \u2018policyholder tax\u2019 is an element of the Group\u2019s total tax expense.
To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits is shown separately.
The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years.
The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders\u2019 profits.
5: Significant accounting policies continued
5(m): Goodwill and intangible assets
The recognition of goodwill arises on the acquisition of a business and represents the premium paid over the fair value of the Group\u2019s share of the
identifiable assets and liabilities acquired at the date of acquisition. Intangible assets include intangible assets initially recognised as part of a business
combination, purchased assets and internally generated assets, such as software development costs related to amounts recognised for in-house
systems development.
Goodwill and goodwill impairment
Goodwill arising on the Group\u2019s investments in subsidiaries is shown as a separate asset, while that on associates, where it arises, is included within
the carrying value of those investments. Goodwill is recognised as an asset at cost at the date when control is achieved (the acquisition date) and
is subsequently measured at cost less any accumulated impairment losses. Goodwill is not amortised but is subject to annual impairment reviews.
Goodwill is allocated to one or more groups of cash-generating units (\u201cCGUs\u201d) expected to benefit from the synergies of the combination, where the
CGU represents the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets
or groups of assets. Goodwill is reviewed for impairment at least annually as a matter of course even if there is no indication of impairment, and
whenever an event or change in circumstances occurs which indicates a potential impairment. For impairment testing, the carrying value of goodwill
is compared to the recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs of disposal. Any impairment
loss is recognised immediately in profit or loss and is not subsequently reversed.
On disposal of an operation within a group of CGUs to which goodwill has been allocated, the goodwill associated with that operation is included in the
carrying amount of the operation when determining the gain or loss on disposal. It is measured based on the relative values of the operation disposed
of and the portion of the CGU retained.
Intangible assets acquired as part of a business combination
Intangible assets acquired as part of a business combination are recognised where they are separately identifiable and can be measured reliably.
Acquired intangible assets consist primarily of contractual relationships such as customer relationships and distribution channels. Such items are
capitalised at their fair value, represented by the estimated net present value of the future cash flows from the relevant relationships acquired at the
date of acquisition. Brands and similar items acquired as part of a business combination are capitalised at their fair value based on a \u2018relief from royalty\u2019
valuation methodology.
Subsequent to initial recognition, acquired intangible assets are measured at cost less amortisation and any recognised impairment losses.
Amortisation is recognised at rates calculated to write off the cost or valuation less estimated residual value, using a straight-line method over
their estimated useful lives as set out below:
\u00b7 Distribution channels 8 years
\u00b7 Customer relationships 7-10 years
\u00b7 Brands 5 years
The economic lives are determined by considering relevant factors such as usage of the asset, product life cycles, potential obsolescence, competitive
position and stability of the industry. The amortisation period is re-evaluated at the end of each financial year.
Internally developed software
There are a number of factors taken into account when considering whether internally developed software meets the recognition criteria in IAS 38
Intangible Assets. Where, for example, a third-party provider retains ownership of the software, this will not meet the control criterion in the standard
(i.e. the power to obtain benefits from the asset) and the costs will be expensed as incurred.
Where it is capitalised, internally developed software is held at cost less accumulated amortisation and impairment losses. Such software is recognised
in the statement of financial position if, and only if, it is probable that the relevant future economic benefits attributable to the software will flow to the
Group and its cost can be measured reliably.
Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of the relevant software, which range between
three and five years, depending on the nature and use of the software.
Research and development
Costs incurred in the research phase are expensed, whereas costs incurred in the development phase are capitalised, subject to meeting specific
criteria, as set out in the relevant accounting standards and guidance. In particular, for the costs to be capitalised, it is a requirement that future
economic benefits can be identified as resulting from the development expenditure. Amortisation is charged to profit or loss on a straight-line basis
over the estimated useful lives of the relevant software, which range from three to five years, depending on the nature and use of the software.
Subsequent expenditure
Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure is expensed as incurred.
5: Significant accounting policies continued
5(m): Goodwill and intangible assets continued
Impairment testing for intangible assets
For intangible assets with finite lives, impairment charges are recognised where evidence of impairment is observed. Indicators of impairment can
be based on external factors, such as significant adverse changes to the asset as part of the overall business environment and internal factors, such
as worse than expected performance reflected in the Group\u2019s three-year Business Plan. If an indication of impairment exists, the recoverable amount
of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is calculated as the higher of fair value
less costs to sell and value-in-use. If the recoverable amount of an intangible asset is estimated to be less than its carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense in the income statement immediately. Where an
intangible asset is not yet available for use, it is subject to an annual impairment test by comparing the carrying value with the recoverable amount.
The recoverable amount is estimated by considering the ability of the asset to generate sufficient future economic benefits to recover the carrying value.
5(n): Property, plant and equipment
Aside from right-of-use assets, property, plant and equipment consist principally of computer equipment and fixtures and fittings and are stated at cost
less accumulated depreciation and any recognised impairment losses. Cost includes the original purchase price of the asset and the costs of bringing
the asset to its working condition for its intended use. Depreciation is charged to profit or loss on a straight-line basis to write down the cost of the asset
to its residual value over its estimated useful life. The following maximum useful lives are applied:
\u00b7 Property leased by the Group \u2013 length of the lease
\u00b7 Plant and equipment \u2013 5 to 10 years
Leased plant and equipment is never depreciated over a period longer than the term of the lease.
Management determines useful lives and residual values for assets when they are acquired, based on experience of similar assets and taking into
account other relevant factors such as any expected changes in technology. The Group assesses and, where appropriate, adjusts the useful life,
residual value and depreciation method for property plant and equipment on an annual basis.
Items of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. For assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows.
Where the carrying amount of an asset is greater than its estimated recoverable amount, which represents the higher of the asset\u2019s fair value less costs
of disposal and value-in-use, it is written down immediately to its recoverable amount and an impairment loss is recognised in the income statement.
Impaired non-financial assets, except goodwill, are reviewed for possible reversal of the impairment at each reporting date. On derecognition of an
item of equipment, any gain or loss on disposal, determined as the difference between the net disposal proceeds and the carrying amount of the asset,
is included in profit or loss at the date of the disposal. Items of property and equipment that are not owned by the Group but are held under lease
arrangements are accounted for in accordance with the accounting policy on leases.
5(o): Leases
Under IFRS 16, the Group assesses whether a contract is or contains a lease at inception of the contract. A contract is or contains a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess where a contract conveys the
right to control the use of an identified asset, the Group assesses whether:
\u00b7 the contract involves the use of an identified asset which may be specified explicitly or implicitly and should be physically distinct or represent
substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
\u00b7 the Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and
\u00b7 the Group has the right to direct the use of the asset.
For lessee contracts, the right-of-use asset is initially measured at cost, which comprises the initial amount of lease liability, adjusted for any lease
payments made at or before the commencement date, and any initial direct costs incurred. Adjustments are also made, where appropriate, to
recognise provisions for property restoration costs and lease incentives received such as rent-free periods. The lease liability is initially measured at
the present value of the lease payments that are unpaid at the commencement date, discounted using the asset-specific incremental borrowing rates.
Subsequent to lease commencement, the Group measures the right-of-use asset using a cost model, whereby the asset is held at cost less
accumulated depreciation and any accumulated impairment. Depreciation is charged to the income statement on a straight-line basis to write down the
cost of the right-of-use asset to its residual value over its estimated useful life which is dependent on the length of the lease. In addition, the carrying
amount of the right-of-use asset may be adjusted for certain remeasurements of the lease liability. The lease liability is subsequently measured at
amortised cost using the effective interest method and also reflects any lease modifications or reassessments.
The Group presents its right-of-use assets within \u201cProperty, plant and equipment\u201d and lease liabilities within \u201cBorrowings and lease liabilities\u201d in the
statement of financial position.
The Group currently has material lease commitments of varying durations for the rental of a number of office buildings. The Group\u2019s future lease cash
outflows are not materially exposed to variable lease payments, low value or short-term leases, residual value guarantees or restrictions imposed by
a lease contract or sale and leaseback transactions.
5: Significant accounting policies continued 5(o): Leases continued Subleases Where the Group sublets a leased asset to a third party, it accounts for its interest in the sublease separately from the head lease. In determining whether a sublease is a finance or operating lease, the Group assesses whether the sublease has transferred substantially all the risk and rewards of the right-of-use asset arising from the head lease to the sublessee. Where the sublease does transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group derecognises the right-of-use asset and a net investment in finance leases is recognised. The net investment in finance lease is calculated as the present value of the future lease payments receivable under the sublease. Any difference between the initial value of the net investment in finance leases and the right-of-use asset derecognised is recognised immediately in the income statement. Interest is calculated on the net investment in finance lease using the discount rate and is recognised in the income statement as finance income. Where the sublease does not transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group continues to recognise the right-of-use asset. The sublease is accounted for as an operating lease with the lease payments received recognised as other income in the income statement. Lease incentives granted are recognised as part of the rental income and are spread over the lease term. The Group had no material subleases at 31 December 2022 (2021: none). 5(p): Assets and liabilities held for sale and discontinued operations Assets (and disposal groups) are classified as held for sale if their carrying amount is expected to be recovered by means of a sale rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year of the date of classification. Assets and liabilities held for sale are presented separately in the consolidated statement of financial position. Assets and liabilities (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and their fair value less costs to sell. No depreciation or amortisation is charged on a non-current asset while classified as held for sale or while part of a disposal group classified as held for sale. The Group classifies areas of the business as discontinued operations where they have been disposed of or are classified as held for sale at the year end, which either represent a separate major line of business or geographical area or are part of a plan to dispose of one or are subsidiaries acquired exclusively with a view to resale. When an asset (or disposal group) ceases to be classified as held for sale, the individual assets and liabilities cease to be shown separately in the statement of financial position at the end of the year in which the classification changes. Comparatives are not restated. If the line of business was previously presented as a discontinued operation and subsequently ceases to be classified as held for sale, profit and loss and cash flows of the comparative period are restated to show that line of business as a continuing operation. 5(q): Provisions and contingent liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more probable than not that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at management\u2019s best estimate of the expenditure required to settle the obligation at the reporting date. Where the effect of the time value of money is material, provisions are discounted and represent the present value of the expected expenditure. Provisions are not recognised for future operating costs or losses. The Group recognises specific provisions where they arise for the situations outlined below: \u00b7 Client compensation and related costs, when the Group compensates clients in the context of providing fair customer outcomes. \u00b7 Onerous contracts, when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the obligations under the contract. \u00b7 Corporate restructuring, only if the Group has approved a detailed formal plan and raised a valid expectation among those parties directly affected, that the plan will be carried out either by having commenced implementation or by publicly announcing the plan\u2019s main features. Such provisions include the direct expenditure arising from the restructuring, such as employee termination payments but not those costs associated with the ongoing activities of the Group. \u00b7 Legal uncertainties and the settlement of other claims. \u00b7 Property provisions, where the Group has an obligation to restore a property to its original condition at the end of the lease. Contingent liabilities are possible obligations of the Group of which the timing and amount are subject to significant uncertainty. Contingent liabilities are not recognised in the consolidated statement of financial position, unless they are assumed by the Group as part of a business combination. They are, however, disclosed, unless they are considered to be remote. If a contingent liability becomes probable and the amount can be reliably measured it is no longer treated as contingent and it is recognised as a liability. Contingent assets, which are possible benefits to the Group, are only disclosed if it is probable that the Group will receive the benefit. If such a benefit becomes virtually certain, it is no longer considered contingent and is recognised on the consolidated statement of financial position as an asset.
5: Significant accounting policies continued
5(r): Foreign currency translation
The Group\u2019s presentation currency is pounds sterling. The functional currency of the Group\u2019s foreign operations is the currency of the primary
economic environment in which these entities operate. The Parent Company functional currency is pounds sterling. Income statements and cash flows
of foreign entities are translated into the Group\u2019s presentation currency at average exchange rates for the year and their statements of financial position
are translated at the year-end exchange rates. Exchange rate differences arising from the translation of the net investment in foreign subsidiaries are
recognised in other comprehensive income and taken to the currency translation reserve which forms part of other reserves within equity. To the
extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also
included in that component of shareholders\u2019 equity. On disposal of a foreign entity, exchange differences are transferred out of this reserve to the
income statement as part of the gain or loss on sale.
Foreign currency transactions are converted into the relevant functional currency at the exchange rate prevailing at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at exchange rates prevailing at
the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the functional
currency at the exchange rates prevailing at the dates the fair values were determined. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at historical cost are converted into the functional currency at the rate of exchange at the time of the initial recognition of the
asset and liability and are not subsequently retranslated.
Exchange gains and losses on the translation and settlement during the year of foreign currency assets and liabilities are recognised in profit or loss.
Exchange differences for non-monetary items are recognised in the statement of other comprehensive income when the changes in the fair value
of the non-monetary item are recognised in the statement of other comprehensive income, and in profit or loss if the changes in fair value of the
non-monetary item are recognised in profit or loss.
5(s): Share capital
Equity instruments
Shares are classified as equity instruments when there is no contractual obligation to deliver cash or other assets to another entity on terms that
may be unfavourable. The value of the Company\u2019s share capital consists of the number of Ordinary Shares in issue multiplied by their nominal value.
The difference between the proceeds received on the issue of the shares and the nominal value of the shares issued is recorded in share premium.
Share issue costs
Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds of the issue
and disclosed where material.
Dividends
Dividends are distributions of profit to holders of the Group\u2019s share capital and as a result are recognised as a deduction in equity. Dividends payable
to holders of equity instruments are recognised in the period in which they are authorised or approved. Interim dividends payable to holders of the
Group\u2019s Ordinary Share capital are announced with the half-year results and authorised by the Directors of the Parent Company. The final dividend
is announced with the Annual Report and typically requires shareholder approval at the Annual General Meeting. For this reason, it is not included
as a liability in the annual financial statements for the year to which the final dividend relates.
Shares held by trusts
Shares in the Parent Company that are held by the Employee Benefit Trust (\u201cEBT\u201d) are treated as \u201cOwn shares\u201d. The EBT purchases shares in the Parent
Company for delivery to employees under employee incentive plans. Purchased shares are recognised as a deduction from equity at the price paid
for them.
5(t): Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to the Ordinary Shareholders of the Parent Company by the weighted
average number of Ordinary Shares in issue during the year, excluding Ordinary Shares held within employee benefit trusts (\u201cEBTs\u201d) and shares held
in consolidated funds (\u201cOwn shares\u201d). Own shares are deducted for the purpose of calculating both basic and diluted EPS.
Diluted earnings per share recognises the dilutive impact of shares awarded and options granted to employees under share-based payment
arrangements, to the extent they have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the
full year, and are calculated by increasing the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential
Ordinary Shares, notably those related to employee share schemes.
The Group is also required to calculate HEPS in accordance with the Johannesburg Stock Exchange (\u201cJSE\u201d) Listing Requirements, determined by
reference to the South African Institute of Chartered Accountants\u2019 circular 1/2021 Headline Earnings. Disclosure of HEPS is not a requirement of IFRS,
but it is a commonly used measure of earnings in South Africa.
6: Business combinations
6(a): Business disposals
Year ended 31 December 2022
There have been no material disposals of businesses during the year ended 31 December 2022.
Year ended 31 December 2021
On 30 November 2021, the Group completed the sale of Quilter International to Utmost Group for consideration of \u00a3481 million. The Group recognised
a profit on disposal of \u00a389 million. Provisions established in respect of this disposal are shown in note 28. Separation, migration and decommissioning
expenses of \u00a319 million incurred as a result of the disposal were included within Other operating and administrative expenses in the discontinued
operations income statement for 2021.
Profit on sale of operations
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Quilter
International and
Single Strategy
business
Quilter
International and
Single Strategy
business\u00b9
Quilter International
Consideration received \u2013 481
Less: transaction costs \u2013 (17)
Net proceeds from sale \u2013 464
Carrying value of net assets disposed of \u2013 (324)
Goodwill allocated and disposed of \u2013 (50)
Recycling of foreign currency translation reserve \u2013 (1)
Profit on sale of Quilter International \u2013 89
Change in accrued expenses in relation to the Single Strategy business (sold in 2018) \u2013 1
Profit on sale of operations before tax \u2013 90
Separation, migration and decommissioning costs \u2013 (19)
Profit on disposal after separation, migration and decommissioning costs \u2013 71
1
In 2021, the Group also sold LighthouseCarrwood Limited generating a profit of \u00a32 million which is not reflected in the table above as the former subsidiary\u2019s activities did not
represent a major line of business and therefore is regarded as being part of the Group\u2019s continuing operations.
6: Business combinations continued
6(b): Discontinued operations \u2013 income statement
In the prior year, the Group\u2019s discontinued operations principally related to Quilter International, the sale of which completed on 30 November 2021.
Notes
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Income
Gross earned premiums \u2013 1
Premiums ceded to reinsurers \u2013 (1)
Fee income and other income from service activities
9(a) \u2013 169
Investment return
9(b) \u2013 1,816
Other income \u2013 1
Total income \u2013 1,986
Expenses
Change in investment contract liabilities
27 \u2013 (1,818)
Fee and commission expenses, and other acquisition costs \u2013 (72)
Other operating and administrative expenses \u2013 (55)
Total expenses \u2013 (1,945)
Profit on sale of operations before tax
6(a) \u2013 90
Profit before tax attributable to equity holders from discontinued operations \u2013 131
Profit after tax from discontinued operations \u2013 131
Attributable to:
Equity holders of Quilter plc \u2013 131
Earnings per Ordinary Share on profit attributable to Ordinary Shareholders of Quilter plc
Basic \u2013 from discontinued operations (pence)
12(b) \u2013 8.0
Diluted \u2013 from discontinued operations (pence)
12(b) \u2013 7.8
6(c): Discontinued operations \u2013 statement of comprehensive income
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Profit after tax \u2013 131
Total comprehensive income from discontinued operations \u2013 131
6(d): Discontinued operations \u2013 net cash flows
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Total net cash flows from operating activities \u2013 276
Total net cash flows from investing activities \u2013 (411)
Total net cash flows from financing activities \u2013 (2)
Net decrease in cash and cash equivalents \u2013 (137)
6(e): Assets and liabilities held for sale
Assets classified as held for sale at 31 December 2022 relate to a leasehold interest in an office property which is vacant for which the Group is actively
seeking a buyer. There were no assets or liabilities classified as held for sale at 31 December 2021.
6: Business combinations continued
6(f): Business acquisitions
There have been no material acquisitions of businesses during the year ended 31 December 2022 or the year ended 31 December 2021.
Contingent consideration arising from historical business acquisitions:
The table below details the movements in the contingent consideration balance during the current and prior year arising from the business acquisitions
in previous years.
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Opening balance 5 16
Payments (5) (7)
Financing interest charge \u2013 1
Unused amounts reversed and other movements \u2013 (5)
Closing balance \u2013 5
Contingent consideration represents the Group\u2019s best estimate of the amount payable in relation to each acquisition discounted to net present value.
The basis used for each acquisition varies but includes payments based on a percentage of the level of assets under administration, funds under
management and levels of ongoing fee income at future dates.
7: Alternative performance measures (\u201cAPMs\u201d)
7(a): Adjusted profit before tax and reconciliation to profit after tax
Basis of preparation of adjusted profit before tax
Adjusted profit before tax is one of the Group\u2019s alternative performance measures and represents the Group\u2019s IFRS profit, adjusted for specific items
that management considers to be outside of the Group\u2019s normal operations or one-off in nature, as detailed in note 7(b). Adjusted profit before tax
does not provide a complete picture of the Group\u2019s financial performance, which is disclosed in the IFRS income statement, but is instead intended
to provide additional comparability and understanding of the financial results.
Notes
Year ended
31 December
2022
\u00a3m
Year ended 31 December 2021
Continuing
operations
\u00a3m
Discontinued
operations\u00b9
\u00a3m
Total
\u00a3m
Affluent 105 111 50 161
High Net Worth 45 56 \u2013 56
Head Office (16) (29) \u2013 (29)
Adjusted profit before tax 134 138 50 188
Reallocation of Quilter International costs \u2013 (10) 10 \u2013
Adjusted profit before tax after reallocation
8(b) 134 128 60 188
Adjusting items:
Impact of acquisition and disposal-related accounting
7(b)(i) (42) (41) \u2013 (41)
Profit on business disposals
2
6(a) \u2013 2 90 92
Business transformation costs
7(b)(ii) (30) (51) (19) (70)
Managed separation costs
7(b)(iii) \u2013 (2) \u2013 (2)
Finance costs
7(b)(iv) (10) (10) \u2013 (10)
Policyholder tax adjustments
7(b)(v) 138 (7) \u2013 (7)
Voluntary customer repayments
7(b)(vi) (6) \u2013 \u2013 \u2013
Other adjusting items
7(b)(vii) (1) \u2013 \u2013 \u2013
Exchange rate gain (ZAR/GBP)
7(b)(viii) 4 \u2013 \u2013 \u2013
Customer remediation
7(b)(ix) 12 (7) \u2013 (7)
Total adjusting items before tax 65 (116) 71 (45)
Profit before tax attributable to equity holders 199 12 131 143
Tax attributable to policyholder returns
11(a) (134) 73 \u2013 73
Income tax credit/(expense)
11(a,b) 110 (62) \u2013 (62)
Profit after tax
3
175 23 131 154
1
2021 discontinued operations include the results of Quilter International.
2
In 2021, the discontinued operations profit on business disposals of \u00a390 million resulted from the disposal of Quilter International. The \u00a32 million continuing operations profit
on business disposals resulted from the disposal of LighthouseCarrwood Limited. See note 6(a) for details.
3
IFRS profit after tax.
7: Alternative performance measures (\u201cAPMs\u201d) continued 7(b): Adjusting items In determining adjusted profit before tax, the Group\u2019s IFRS profit before tax is adjusted for specific items that management considers to be outside of the Group\u2019s normal operations or one-off in nature. These are detailed below. 7(b)(i): Impact of acquisition and disposal-related accounting Goodwill and other acquired intangibles are recognised on the acquisition of a business and represent the premium paid over the fair value of the Group\u2019s share of the identifiable assets and liabilities acquired at the date of acquisition (as recognised under IFRS 3 Business Combinations). The Group excludes any impairment of goodwill from adjusted profit as well as the amortisation and impairment of acquired intangible assets, any acquisition costs, finance costs related to the discounting of contingent consideration and incidental items relating to past disposals. The effect of these adjustments to determine adjusted profit are summarised below. All adjustments are in respect of continuing operations. Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Amortisation of other acquired intangible assets 14 42 45 Fair value gains on revaluation of contingent consideration \u2013 (5) Unwinding of discount on contingent consideration \u2013 1 Total impact of acquisition and disposal-related accounting 42 41 7(b)(ii): Business transformation costs Business transformation costs include four key items: costs associated with the UK Platform Transformation Programme, Optimisation programme costs, Business Simplification costs and business separation costs following disposal of Quilter International. For the year ended 31 December 2022, these costs totalled \u00a330 million (31 December 2021: \u00a370 million) in aggregate, the principal components of which are described below: UK Platform Transformation Programme \u2013 31 December 2022: \u00a3nil, 31 December 2021: \u00a328 million The Platform Transformation Programme concluded in 2021 with lifetime costs of \u00a3202 million. No further costs were incurred in 2022. Optimisation programme costs \u2013 31 December 2022: \u00a36 million, 31 December 2021: \u00a322 million The Optimisation programme commenced in 2018 to provide closer business integration, create central support, rationalise technology and reduce third-party spend. The programme has now achieved its target of delivering annualised run-rate cost savings of \u00a365 million with total implementation costs since inception of \u00a387 million. This programme concluded during 2022. Business Simplification costs \u2013 31 December 2022: \u00a317 million, 31 December 2021: \u00a3nil The Business Simplification programme is anticipated to reduce operating costs by \u00a345 million on a run-rate basis, with implementation costs expected to be \u00a355 million. The Group continues to simplify its structures and organisation to support the two business segments. To date, the programme has delivered \u00a323 million of annualised run-rate cost savings with an implementation cost of \u00a317 million. Restructuring costs following the disposal of Quilter Life Assurance \u2013 31 December 2022: \u00a33 million, 31 December 2021: \u00a31 million Following the sale of Quilter Life Assurance in 2019, the Group entered into a Transitional Service Agreement with the buyer, ReAssure. During the year ended 31 December 2022, the Group recognised \u00a33 million for property exit costs following the conclusion of the Transitional Service Agreement. Business separation costs following disposal of Quilter International \u2013 31 December 2022: \u00a3nil, 31 December 2021: \u00a319 million The costs of business separation arise from the process to separate Quilter International\u2019s infrastructure, which is complex and covers a wide range of areas including people, IT systems, data and contracts facilities. A programme team has been established to ensure the transformation of these areas to the acquirer. These provisions have been based on external quotations and estimations, together with estimates of the time required for incremental resource costs to achieve the separation. The costs are predominantly expected to occur over a three-year period. The Group has provided for the future restructuring costs arising due to the sale of Quilter International to Utmost Group on 30 November 2021, including the cost of migrating IT systems and data to the acquirer, as the Transitional Service Agreement with Utmost Group (the acquirer) runs off and the remaining Quilter business is restructured following the disposal. Investment in business costs \u2013 31 December 2022: \u00a34 million, 31 December 2021: \u00a3nil Investment in business costs of \u00a34 million were incurred in 2022 as the Group continues to enable and support advisers and clients and improve productivity through better utilisation of technology. 7(b)(iii): Managed separation costs For the year ended 31 December 2022, no managed separation costs were incurred (31 December 2021: \u00a32 million). In prior periods, these one-off costs related to the Group\u2019s separation from Old Mutual and were excluded from adjusted profit because they related to a fundamental restructuring of the Group and were not representative of the operating activity of the Group. No further costs associated with managed separation are anticipated.
7: Alternative performance measures (\u201cAPMs\u201d) continued
7(b)(iv): Finance costs
The nature of much of the Group\u2019s operations means that, for management\u2019s decision-making and internal performance management, the effects
of interest costs on external borrowings are removed when calculating adjusted profit. For the year ended 31 December 2022, finance costs were
\u00a310 million (31 December 2021: \u00a310 million).
7(b)(v): Policyholder tax adjustments
For the year ended 31 December 2022, the total amount of policyholder tax adjustments to adjusted profit is \u00a3138 million charge (31 December 2021:
\u00a37 million credit). Adjustments to policyholder tax are made to remove distortions arising from market volatility that can, in turn, lead to volatility in the
policyholder tax charge between periods. The recognition of the income received from policyholders (which is included within the Group\u2019s income)
to fund the policyholder tax liability can vary in timing to the recognition of the corresponding tax expense, creating volatility in the Group\u2019s IFRS profit
or loss before tax attributable to equity holders. Note 11(a) provides further information on the impact of markets on the policyholder tax charge.
Adjustments are also made to remove policyholder tax distortions from other non-operating adjusting items.
7(b)(vi): Voluntary customer repayment
For the year ended 31 December 2022, these costs were \u00a36 million (31 December 2021: \u00a3nil) and relate to a change in business policy. The voluntary
repayments represent amounts to be paid to customers relating to revenue previously recognised in respect of Final Plan Closure receipts.
7(b)(vii): Other adjusting items
For the year ended 31 December 2022, these costs were \u00a31 million (31 December 2021: \u00a3nil) and relate to the impairment of an indemnification asset.
7(b)(viii): Exchange rate gain (ZAR/GBP)
For the year ended 31 December 2022, income of \u00a34 million was received (31 December 2021: \u00a3nil) and related to a foreign exchange gain on cash held
in South African Rand in preparation for the capital return and final dividend payments in May 2022. Cash was converted to South African Rand upon
announcement of the details of the capital return and dividend payment to provide an economic hedge for the Group. The foreign exchange gain is fully
offset by an equal amount taken directly to retained earnings. See note 4 for further detail.
7(b)(ix): Customer remediation
Lighthouse pension transfer advice provision \u2013 31 December 2022: net income \u00a312 million, 31 December 2021: net expenses \u00a37 million
In 2022, insurance proceeds in relation to claims in respect of legal liabilities arising in connection with Lighthouse\u2019s DB to DC pension transfer advice
cases have been received, contributing \u00a312 million to the Group\u2019s profit before tax. These have been excluded from adjusted profit on the basis that the
advice activities to which the charge and benefit relate took place prior to the Group\u2019s acquisition of the business. The provision for the redress of British
Steel Pension Scheme cases and other DB to DC pension transfer cases, excluding the impact of payments made, has decreased by a further \u00a34 million
in the year, which has been recognised in the income statement as a reduction of expenses (31 December 2021: \u00a37 million expense). This decrease
reflects the impact of the final redress calculations performed compared with the provision estimated, as part of the ongoing skilled person review,
and an estimate for further customer redress following the skilled person\u2019s recommendation of a review of additional cases. During the year, \u00a34 million
of additional legal, consulting, and other costs were incurred. Further details of the provision are provided in note 28.
7(c): IFRS profit before tax from continuing operations (excluding amortisation, policyholder tax adjustments and other
one-off items)
For remuneration purposes, the Group uses IFRS profit before tax from continuing operations adjusted for specific items that management considers
to be outside of the Group\u2019s normal operations or one-off in nature, as shown below. For further details refer to the Remuneration Report (page 95)
and KPIs (page 14).
Notes
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
IFRS profit before tax attributable to equity holders (excluding amortisation,
policyholder tax adjustments and other one-off items) 103 68
Adjusted for the following:
Reallocation of Quilter International costs \u2013 (10)
Profit on business disposals
6(a) \u2013 2
Impact of acquisition and disposal-related accounting
7(b)(i) (42) (41)
Policyholder tax adjustments
7(b)(v) 138 (7)
Profit before tax attributable to equity holders 199 12
7: Alternative performance measures (\u201cAPMs\u201d) continued
7(d): Reconciliation of IFRS income and expenses to \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d within adjusted profit
This reconciliation shows how each line of the Group\u2019s consolidated IFRS income statement is allocated to the Group\u2019s APMs: Net management fees,
Total net fee revenue and Operating expenses, which are all defined on pages 210 and 211 and form the Group\u2019s adjusted profit before tax for
continuing operations. The IFRS income statement column in the table below, down to \u201cProfit before tax attributable to equity holders from continuing
operations\u201d, reconciles to each line of the Group\u2019s consolidated income statement. Allocations are determined by management and aim to show the
Group\u2019s sources of profit (net of relevant directly attributable expenses). These allocations remain consistent from period to period to ensure
comparability, unless otherwise stated.
Year ended 31 December 2022
Net mgmt .
fees
1
\u00a3m
Other
revenue
1
\u00a3m
Total net fee
revenue
1
\u00a3m
Operating
expenses
1
\u00a3m
Adjusted
profit
before tax
\u00a3m
Consol. of
funds
2
\u00a3m
Consolidated
income
statement
\u00a3m
Income
Fee income and other income from service activities 548 95 643 \u2013 643 (62) 581
Investment return \u2013 (4,292) (4,292) \u2013 (4,292) (357) (4,649)
Other income \u2013 5 5 21 26 2 28
Total income
548 (4,192) (3,644) 21 (3,623) (417) (4,040)
Expenses
Change in investment contract liabilities \u2013 4,318 4,318 \u2013 4,318 \u2013 4,318
Fee and commission expenses, and other acquisition costs (46) 1 (45) \u2013 (45) (9) (54)
Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 \u2013 438 438
Other operating and administrative expenses (15) \u2013 (15) (557) (572) (12) (584)
Finance costs \u2013 \u2013 \u2013 (13) (13) \u2013 (13)
Total expenses
(61) 4,319 4,258 (570) 3,688 417 4,105
Tax credit attributable to policyholder returns 134 \u2013 134 \u2013 134 \u2013 134
Profit before tax attributable to equity holders
from continuing operations 621 127 748 (549) 199 \u2013 199
Adjusting items:
Impact of acquisition and disposal-related accounting \u2013 \u2013 \u2013 42 42
Business transformation costs \u2013 \u2013 \u2013 30 30
Voluntary customer repayments \u2013 \u2013 \u2013 6 6
Other adjusting items \u2013 \u2013 \u2013 1 1
Finance costs \u2013 \u2013 \u2013 10 10
Exchange rate gain (ZAR/GBP) \u2013 (4) (4) \u2013 (4)
Customer remediation \u2013 \u2013 \u2013 (12) (12)
Policyholder tax adjustments (138) \u2013 (138) \u2013 (138)
Adjusting items (138) (4) (142) 77 (65)
Adjusted profit before tax \u2013 continuing operations 483 123 606 (472) 134
1
The APMs \u201cNet Management Fees\u201d, \u201cOther revenue\u201d, \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d are commented on within the Financial review.
2
Consolidation of funds shows the grossing up impact to the Group\u2019s consolidated income statement as a result of the consolidation of funds requirements, as described within
note 5(a). This grossing up is excluded from the Group\u2019s adjusted profit.
7: Alternative performance measures (\u201cAPMs\u201d) continued
7(d): Reconciliation of IFRS income and expenses to \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d within adjusted profit continued
Year ended 31 December 2021
Net mgmt.
fees
1
\u00a3m
Other
revenue
1
\u00a3m
Total net fee
revenue
1
\u00a3m
Operating
expenses
1
\u00a3m
Adjusted
profit
before tax
\u00a3m
Consol. of
funds
2
\u00a3m
Consolidated
income
statement
\u00a3m
Income
Fee income and other income from service activities 633 111 744 \u2013 744 (78) 666
Investment return \u2013 3,294 3,294 \u2013 3,294 708 4,002
Other income \u2013 1 1 15 16 2 18
Total income
633 3,406 4,039 15 4,054 632 4,686
Expenses
Change in investment contract liabilities \u2013 (3,293) (3,293) \u2013 (3,293) \u2013 (3,293)
Fee and commission expenses, and other acquisition costs (52) 4 (48) \u2013 (48) (13) (61)
Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 \u2013 (599) (599)
Other operating and administrative expenses (15) 1 (14) (602) (616) (20) (636)
Finance costs \u2013 \u2013 \u2013 (14) (14) \u2013 (14)
Total expenses
(67) (3,288) (3,355) (616) (3,971) (632) (4,603)
Profit on business disposal \u2013 2 2 \u2013 2 \u2013 2
Tax expense attributable to policyholder returns (73) \u2013 (73) \u2013 (73) \u2013 (73)
Profit before tax attributable to equity holders
from continuing operations 493 120 613 (601) 12 \u2013 12
Adjusting items:
Impact of acquisition and disposal-related accounting \u2013 \u2013 \u2013 41 41
Profit on business disposal \u2013 (2) (2) \u2013 (2)
Business transformation costs \u2013 \u2013 \u2013 51 51
Managed separation costs \u2013 \u2013 \u2013 2 2
Finance costs \u2013 \u2013 \u2013 10 10
Customer remediation \u2013 \u2013 \u2013 7 7
Policyholder tax adjustments 7 \u2013 7 \u2013 7
Adjusting items
7 (2) 5 111 116
Adjusted profit before tax after reallocation 500 118 618 (490) 128
Reallocation of Quilter International costs
3
\u2013 \u2013 \u2013 10 10
Adjusted profit before tax \u2013 continuing operations 500 118 618 (480) 138
1
The APMs \u201cNet Management Fees\u201d, \u201cOther revenue\u201d, \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d are commented on within the Financial review.
2
Consolidation of funds shows the grossing up impact to the Group\u2019s consolidated income statement as a result of the consolidation of funds requirements, as described within
note 5(a). This grossing up is excluded from the Group\u2019s adjusted profit.
3
\u00a310 million of Other operating and administrative expenses previously reported in Quilter International are presented within continuing operations, as costs of this nature did not
transfer to Utmost Group (the acquirer) on disposal.
8: Segmental information
8(a): Segmental presentation
The Group\u2019s operating segments comprise High Net Worth and Affluent, which is consistent with the manner in which the Group is structured and
managed. For all reporting periods, these segments have been classified as continuing operations in the consolidated income statement. Head Office
includes certain revenues and central costs that are not allocated to the segments. There have been no changes to the basis of segmentation for the
periods presented within these consolidated financial statements.
Adjusted profit before tax is an APM reported to the Group\u2019s management and Board. Management and the Board use additional performance
indicators to assess the performance of each of the segments, including net client cash flows, assets under management and administration,
total net fee revenue and operating margin.
Consistent with internal reporting, income and expenses that are not directly attributable to a particular segment are allocated between segments
where appropriate. The Group accounts for inter-segment income and transfers as if the transactions were with third parties at current market prices.
Intra-group recharges in respect of operating and administration expenses within businesses disclosed as discontinued operations are not adjusted
for potential future changes to the level of remaining costs following the disposal of those businesses.
The segmental information in this note reflects the adjusted and IFRS profit measures for each operating segment as provided to management
and the Board. Income is analysed in further detail for each operating segment in note 9.
Continuing operations:
High Net Worth
This segment comprises Quilter Cheviot and Quilter Private Client Advisers.
Quilter Cheviot provides discretionary investment management predominantly in the United Kingdom with bespoke investment portfolios tailored
to the individual needs of High Net Worth clients, charities, companies and institutions through a network of branches in London and the regions.
Investment management services are also provided by operations in the Channel Islands and the Republic of Ireland.
Quilter Private Client Advisers provide financial advice for protection, mortgages, savings, investments and pensions predominantly to High Net
Worth clients.
Affluent
This segment is comprised of Quilter Investment Platform, Quilter Investors and Quilter Financial Planning.
Quilter Investment Platform is a leading investment platform provider of advice-based wealth management products and services in the UK,
which serves a largely Affluent client base through advised multi-channel distribution.
Quilter Investors is a leading provider of investment solutions in the UK multi-asset market. It develops and manages investment solutions in the form
of funds for the Group and third-party clients. It has several fund ranges which vary in breadth of underlying asset class.
Quilter Financial Planning is a restricted and independent financial adviser network including Quilter Financial Advisers and Lighthouse, providing
mortgage and financial planning advice and financial solutions for both individuals and businesses through a network of intermediaries. It operates
across all markets, from wealth management and retirement planning advice through to dealing with property wealth and personal and business
protection needs.
Head Office
In addition to the Group\u2019s two operating segments, Head Office comprises the investment return on centrally held assets, central support function
expenses, central core structural borrowings and certain tax balances.
Discontinued operations
Quilter International is excluded from the segmental information for the year ended 31 December 2021 as it was sold on 30 November 2021.
See note 6 for further details.
Quilter International was Quilter\u2019s cross-border business, focusing on High Net Worth and Affluent local clients and expatriates in the UK, Asia,
the Middle East, Europe and Latin America.
8: Segmental information continued
8(b)(i): Adjusted profit statement \u2013 segmental information for the year ended 31 December 2022
The table below presents the Group\u2019s continuing operations split by operating segment, reconciling the segmented IFRS income statement (to \u201cProfit/(loss)
before tax attributable to equity holders from continuing operations\u201d) to adjusted profit before tax.
Operating segments
Notes
Affluent
\u00a3m
High
Net Worth
\u00a3m
Head
Office
\u00a3m
Consolidation
adjustments
1
\u00a3m
Consolidated
income
statement
\u00a3m
Income
Fee income and other income from service activities 441 202 \u2013 (62) 581
Investment return (4,307) 9 8 (359) (4,649)
Other income 112 3 5 (92) 28
Segmental income (3,754) 214 13 (513) (4,040)
Expenses
Change in investment contract liabilities 4,318 \u2013 \u2013 \u2013 4,318
Fee and commission expenses, and other acquisition costs (46) \u2013 \u2013 (8) (54)
Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 438 438
Other operating and administrative expenses (410) (202) (53) 81 (584)
Finance costs (3) \u2013 (12) 2 (13)
Segmental expenses 3,859 (202) (65) 513 4,105
Profit/(loss) before tax from continuing operations 105 12 (52) \u2013 65
Tax credit attributable to policyholder returns 134 \u2013 \u2013 \u2013 134
Profit/(loss) before tax attributable to equity holders
from continuing operations 239 12 (52) \u2013 199
Adjusted for non-operating items:
Impact of acquisition and disposal-related accounting
7(b)(i) 10 32 \u2013 \u2013 42
Business transformation costs
7(b)(ii) \u2013 \u2013 30 \u2013 30
Finance costs
7(b)(iv) \u2013 \u2013 10 \u2013 10
Policyholder tax adjustments
7(b)(v) (138) \u2013 \u2013 (138)
Voluntary customer repayments
7(b)(vi) 6 \u2013 \u2013 6
Other adjusting items
7(b)(vii) \u2013 1 \u2013 \u2013 1
Exchange rate gain (ZAR/GBP)
7(b)(viii) \u2013 \u2013 (4) \u2013 (4)
Customer remediation
7(b)(ix) (12) \u2013 \u2013 (12)
Adjusting items before tax (134) 33 36 \u2013 (65)
Adjusted profit/(loss) before tax \u2013 continuing operations 105 45 (16) \u2013 134
1
Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds.
8: Segmental information continued
8(b)(ii): Adjusted profit statement \u2013 segmental information for the year ended 31 December 2021
Operating segments
Notes
Affluent
\u00a3m
High
Net Worth
\u00a3m
Head
Office
\u00a3m
Reallocation
of Quilter
International
costs
1
\u00a3m
Consolidation
adjustments
2
\u00a3m
Consolidated
income
statement
\u00a3m
Income
Fee income and other income from service activities 532 213 \u2013 \u2013 (79) 666
Investment return 3,293 \u2013 1 \u2013 708 4,002
Other income 110 \u2013 \u2013 \u2013 (92) 18
Segmental income 3,935 213 1 \u2013 537 4,686
Expenses
Change in investment contract liabilities (3,293) \u2013 \u2013 \u2013 \u2013 (3,293)
Fee and commission expenses, and other acquisition costs (48) \u2013 \u2013 \u2013 (13) (61)
Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 (599) (599)
Other operating and administrative expenses (463) (187) (51) (10) 75 (636)
Finance costs (4) \u2013 (10) \u2013 \u2013 (14)
Segmental expenses (3,808) (187) (61) (10) (537) (4,603)
Profit on sale of subsidiary 2 \u2013 \u2013 \u2013 \u2013 2
Profit/(loss) before tax from continuing operations 129 26 (60) (10) \u2013 85
Tax expense attributable to policyholder returns (73) \u2013 \u2013 \u2013 \u2013 (73)
Profit/(loss) before tax attributable to equity holders
from continuing operations 56 26 (60) (10) \u2013 12
Adjusted for non-operating items:
Impact of acquisition and disposal-related accounting
7(b)(i) 11 30 \u2013 \u2013 \u2013 41
Net profit on business disposals and acquisitions (2) \u2013 \u2013 \u2013 \u2013 (2)
Business transformation costs
7(b)(ii) 32 \u2013 19 \u2013 \u2013 51
Managed separation costs
7(b)(iii) \u2013 \u2013 2 \u2013 \u2013 2
Finance costs
7(b)(iv) \u2013 \u2013 10 \u2013 \u2013 10
Policyholder tax adjustments
7(b)(v) 7 \u2013 \u2013 \u2013 \u2013 7
Customer remediation
7(b)(ix) 7 \u2013 \u2013 \u2013 \u2013 7
Adjusting items before tax 55 30 31 \u2013 \u2013 116
Adjusted profit/(loss) before tax after reallocation 111 56 (29) (10) \u2013 128
Reallocation of Quilter International costs
6(b) \u2013 \u2013 \u2013 10 \u2013 10
Adjusted profit/(loss) before tax \u2013 continuing operations 111 56 (29) \u2013 \u2013 138
1
\u00a310 million of Other operating and administrative expenses previously reported in Quilter International are presented within continuing operations, as costs of this nature did not
transfer to Utmost Group (the acquirer) on disposal.
2
Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds.
9: Details of revenue
This note gives further detail on the items appearing in the revenue section of the income statement.
9(a): Breakdown of income
This note analyses the Group\u2019s income into further detail based on the types of fees earned and split by operating segment, which is aligned
to the Group\u2019s client base.
Year ended 31 December 2022
Affluent
\u00a3m
High
Net Worth
\u00a3m
Head Office
\u00a3m
Consolidation
adjustments
\u00a3m
Total
continuing
operations
\u00a3m
Premium-based fees 75 21 \u2013 \u2013 96
Fund-based fees
1
356 181 \u2013 (62) 475
Fixed fees 2 \u2013 \u2013 \u2013 2
Other fee and commission income 8 \u2013 \u2013 \u2013 8
Fee income and other income from service activities 441 202 \u2013 (62) 581
Investment return (4,307) 9 8 (359) (4,649)
Other income 112 3 5 (92) 28
Total income (3,754) 214 13 (513) (4,040)
Year ended 31 December 2021
Affluent
\u00a3m
High
Net Worth
\u00a3m
Head O ffice
\u00a3m
Consolidation
adjustments
\u00a3m
Total
continuing
operations
\u00a3m
Discontinued
operations
\u00a3m
Premium-based fees 87 24 \u2013 \u2013 111 45
Fund-based fees
1
376 189 \u2013 (79) 486 81
Retrocessions received, intra-group \u2013 \u2013 \u2013 \u2013 \u2013 6
Fixed fees 2 \u2013 \u2013 \u2013 2 26
Exit fees \u2013 \u2013 \u2013 \u2013 \u2013 11
Other fee and commission income 67 \u2013 \u2013 \u2013 67 \u2013
Fee income and other income from service activities 532 213 \u2013 (79) 666 169
Investment return 3,293 \u2013 1 708 4,002 1,816
Other income 110 \u2013 \u2013 (92) 18 1
Total income 3,935 213 1 537 4,686 1,986
1
Income from fiduciary activities is included within fund-based fees.
9(b): Investment return
This note analyses the investment return from the Group\u2019s investing activities.
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Interest and similar income
Loans and advances \u2013 1
Investments and securities 70 69
Cash and cash equivalents 24 \u2013
Total interest and similar income 94 70
Dividend income 217 225
Foreign currency gains and losses 1 1
Total (losses)/gains on financial instruments mandatorily recognised at fair value through profit or loss (4,961) 3,706
Net investment (loss)/income \u2013 continuing operations (4,649) 4,002
Net investment income \u2013 discontinued operations \u2013 1,816
Total net investment (loss)/income (4,649) 5,818
10: Details of expenses
This note provides further details in respect of the items appearing in the expenses section of the income statement.
10(a): Fee and commission expenses, and other acquisition costs
This note analyses the fee and commission expenses and other acquisition costs.
Note
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Fee and commission expense 9 13
Renewal commission \u2013 investment contracts 29 30
Retrocessions paid 17 21
Changes in contract costs
23 (1) (3)
Fee and commission expenses, and other acquisition costs \u2013 continuing operations 54 61
Fee and commission expenses, and other acquisition costs \u2013 discontinued operations \u2013 72
Total fee and commission expenses, and other acquisition costs 54 133
10(b): Other operating and administrative expenses
This note provides further details in respect of the items included within other operating and administrative expenses section of the income statement.
Notes
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Staff costs
10(c)(i)
297 341
Depreciation charge on right-of-use assets
15 9 10
Depreciation charge on other plant and equipment
15 6 6
Impairment of right-of-use assets
15 3 \u2013
Impairment of other plant and equipment
15 4 \u2013
Amortisation of software development costs
14(a) 2 2
Amortisation of other intangible assets
14(a) 42 45
Administration and other expenses 221 232
Other operating and administrative expenses \u2013 continuing operations 584 636
Other operating and administrative expenses \u2013 discontinued operations \u2013 55
Total other operating and administrative expenses 584 691
Administration and other expenses include business transformation costs for the year ended 31 December 2022 of \u00a330 million (2021: \u00a370 million),
as detailed in note 7(b)(ii), as well as general operating expenses such as IT-related costs, premises and marketing.
10(c): Staff costs and other employee-related costs
10(c)(i): Staff costs
Note
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Salaries 171 207
Bonus and incentive remuneration 45 61
Social security costs 28 27
Retirement obligations \u2013 defined contribution plans 18 17
Share-based payments \u2013 equity-settled
26(e) 24 19
Other 11 10
Staff costs \u2013 continuing operations 297 341
Staff costs \u2013 discontinued operations \u2013 19
Total staff costs 297 360
10: Details of expenses continued
10(c)(ii): Employee numbers
Year ended
31 December
2022
Number
Year ended
31 December
2021
Number
The average number of persons employed by the Group was:
Affluent 2,071 2,207
High Net Worth 914 917
Head Office 69 80
Continuing operations 3,054 3,204
Discontinued operations \u2013 645
Total average number of employees during the year 3,054 3,849
The monthly average number of persons employed by the Group is based on permanent employees and fixed-term contractors.
10(d): Auditors\u2019 remuneration
Included in other operating and administrative expenses are fees paid to the Group\u2019s auditors. These can be categorised as follows:
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Fees payable for audit services
Group and Parent Company 1.3 1.5
Subsidiaries 2.1 2.2
Total fees for audit services 3.4 3.7
Fees for audit-related assurance services 1.2 0.8
Fees for non-audit services 0.2 0.5
Total Group auditors\u2019 remuneration \u2013 continuing operations 4.8 5.0
Total Group auditors\u2019 remuneration \u2013 discontinued operations \u2013 0.3
Total Group auditors\u2019 remuneration
1
4.8 5.3
1
All fees are presented net of VAT.
10(e): Finance costs
This note analyses the interest costs on our borrowings and similar charges, all of which are valued at amortised cost. Finance costs comprise:
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Term loans and other external debt 1 1
Subordinated debt securities (Tier 2 bond) 9 9
Interest payable on borrowed funds 10 10
Interest expense on lease liabilities 3 3
Other \u2013 1
Total finance costs 13 14
Finance costs represent the cost of interest and finance charges on the Group\u2019s borrowings from a number of relationship banks. More details
regarding borrowed funds, including the interest rates payable, are shown in note 30. These costs are excluded from adjusted profit within the
\u201cFinance costs\u201d adjusting item.
Within other finance costs above is \u00a3nil (2021: \u00a31 million) relating to the impact of unwinding the discount rate on contingent consideration payable
as a result of certain past acquisitions. These costs are excluded from adjusted profit within the \u201cImpact of acquisition and disposal-related accounting\u201d
adjusting item as shown in note 7(b)(i).
11: Tax
11(a): Tax charged to the income statement
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Current tax
United Kingdom 12 36
Overseas tax 1 1
Total current tax charge 13 37
Deferred tax
Origination and reversal of temporary differences (120) 36
Effect on deferred tax of changes in tax rates (1) (12)
Adjustments to deferred tax in respect of prior periods (2) 1
Total deferred tax (credit)/charge (123) 25
Total tax (credited)/charged to income statement \u2013 continuing operations (110) 62
Total tax (credited)/charged to income statement (110) 62
Attributable to policyholder returns \u2013 continuing operations (134) 73
Attributable to equity holders \u2013 continuing operations 24 (11)
Total tax (credited)/charged to income statement (110) 62
Policyholder tax
Certain products are subject to tax on policyholders\u2019 investment returns. This \u201cpolicyholder tax\u201d is an element of total tax expense. To make the tax
expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits are shown separately in the
income statement.
The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years.
The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders.
The Group\u2019s income tax credit on continuing operations was \u00a3110 million for the year ended 31 December 2022, compared to a charge of \u00a362 million
for the prior year. This income tax credit can vary significantly year-on-year as a result of market volatility and the impact this has on policyholder tax.
The recognition of the income received from policyholders to fund the policyholder tax liability (which is included within the Group\u2019s income) can vary
in timing to the recognition of the corresponding policyholder tax expense, creating volatility in the Group\u2019s IFRS profit before tax attributable to equity
holders. An adjustment is made to adjusted profit to remove these distortions, as explained further in note 7(b)(v).
Market movements during the year ended 31 December 2022 resulted in investment losses of \u00a3587 million on products subject to policyholder tax.
The loss is a component of the total \u201cinvestment return\u201d loss of \u00a34,649 million shown in the income statement. The impact of the \u00a3587 million
investment return loss is the primary reason for the \u00a3134 million tax credit attributable to policyholder returns in respect of the continuing operations
for the year ended 31 December 2022 (31 December 2021: \u00a373 million expense in respect of continuing operations and \u00a3nil expense in respect of
discontinued operations).
UK Corporation Tax rate
The main rate of Corporation Tax is 19% for the financial year 2022 (2021: 19%). The Corporation Tax rate will increase from 19% to 25%, effective from
1 April 2023. This change was substantively enacted in 2021 and the new rate has been used in recognising the Company\u2019s deferred tax assets and
liabilities for reversals expected to take place on or after 1 April 2023.
The Company has recognised deferred tax assets as disclosed in note 29. The Company considers that future years\u2019 profits will be sufficient to utilise
the tax asset carried forward.
11: Tax continued
11(b): Reconciliation of total income tax expense
The income tax credited or charged to profit or loss differs from the amount that would apply if all of the Group\u2019s profits from all the countries in which
the Group operates had been taxed at the UK standard Corporation Tax rate. The difference in the effective rate is explained below:
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Profit before tax from continuing operations 65 85
Tax at UK standard rate of 19% (2021: 19%) 12 16
Different tax rate or basis on overseas operations \u2013 1
Untaxed and low taxed income (6) \u2013
Expenses not deductible for tax purposes 1 \u2013
Net movements on unrecognised deferred tax assets (6) (4)
Effect on deferred tax of changes in tax rates (1) (12)
Adjustments to deferred tax in respect of prior years (2) 1
Income tax attributable to policyholder returns (net of tax relief) (108) 60
Total tax (credited)/charged to income statement \u2013 continuing operations (110) 62
Total tax (credited)/charged to income statement (110) 62
11(c): Reconciliation of income tax credit or expense in the income statement to income tax on adjusted profit
Note
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Income tax (credit)/expense on continuing operations
1
(110) 62
Tax on adjusting items
Impact of acquisition and disposal-related accounting 8 4
Business transformation costs 5 10
Finance costs 2 2
Exchange rate gain (ZAR/GBP) (1) \u2013
Customer remediation \u2013 1
Tax adjusting items
Policyholder tax adjustments
7(b)(v)
138 (7)
Other shareholder tax adjustments
2
(19) 7
Tax on adjusting items \u2013 continuing operations 133 17
Less: tax attributable to policyholder returns within adjusted profit \u2013 continuing operations
3
(4) (66)
Tax charged on adjusted profit \u2013 continuing operations 19 13
Tax charged on total adjusted profit 19 13
1
Includes both tax attributable to policyholders and equity holders, in compliance with IFRS.
2
Other shareholder tax adjustments comprise the reallocation of adjustments from policyholder tax as explained in note 7(b)(v) and shareholder tax adjustments for one-off
items in line with the Group\u2019s adjusted profit policy.
3
Adjusted profit treats policyholder tax as a pre-tax expense (this includes policyholder tax under IFRS and the policyholder tax adjustments) and is therefore removed from
the tax charge on adjusted profit.
12: Earnings per share
The Group calculates earnings per share (\u201cEPS\u201d) on a number of different bases. IFRS requires the calculation of basic and diluted EPS. Adjusted EPS
reflects earnings that are consistent with the Group\u2019s adjusted profit measure and Headline earnings per share (\u201cHEPS\u201d) is a requirement of the
Johannesburg Stock Exchange.
The bases for calculation of the Group\u2019s EPS (in aggregate, including both continuing and discontinued operations) is disclosed in note 5(t).
Framework Notes
Year ended
31 December
2022
Pence
Year ended
31 December
2021
Pence
Basic earnings per share
IFRS
12(b)
12.2 9.4
Diluted basic earnings per share IFRS
12(b) 12.0 9.2
Adjusted basic earnings per share Group policy
12(b) 8.0 10.7
Adjusted diluted earnings per share Group policy
12(b) 7.9 10.4
Headline basic earnings per share (net of tax) JSE Listing Requirements
12(c) 11.7 3.9
Headline diluted earnings per share (net of tax) JSE Listing Requirements
12(c) 11.5 3.8
12(a): Weighted average number of Ordinary Shares
The table below summarises the calculation of the weighted average number of Ordinary Shares for the purposes of calculating basic and diluted
earnings per share for each profit measure (IFRS, adjusted and headline profit). Details of the impact on the number of shares from the Quilter share
buyback scheme are detailed in note 25.
Year ended
31 December
2022
Million
Year ended
31 December
2021
Million
Weighted average number of Ordinary Shares 1,496 1,721
Own shares including those held in consolidated funds and EBTs (58) (77)
Basic weighted average number of Ordinary Shares 1,438 1,644
Adjustment for dilutive share awards and options 20 39
Diluted weighted average number of Ordinary Shares 1,458 1,683
12(b): Basic and diluted EPS (IFRS and adjusted profit)
Year ended 31 December 2022 Year ended 31 December 2021
Notes
Continuing
operations
\u00a3m
Discontinued
operations
\u00a3m
Total
\u00a3m
Continuing
operations
\u00a3m
Discontinued
operations
\u00a3m
Total
\u00a3m
Profit after tax 175 \u2013 175 23 131 154
Total adjusting items before tax
7(a) (65) \u2013 (65) 116 (71) 45
Tax on adjusting items
11(c) (133) \u2013 (133) (17) \u2013 (17)
Less: Policyholder tax adjustments
11(c) 138 \u2013 138 (7) \u2013 (7)
Adjusted profit after tax after reallocation 115 \u2013 115
115
60 175
Reversal of:
Reallocation of Quilter International costs
1
\u2013 \u2013 \u2013
10
(10) \u2013
Adjusted profit after tax
115
\u2013 115
125
50 175
1
Reallocation of Quilter International costs relate to costs that were previously reported as part of Quilter International which were presented within continuing operations in the
prior year (31 December 2021: \u00a310 million) as these did not transfer to Utmost Group (the acquirer) on disposal. There were no such costs in the year ended 31 December 2022.
12: Earnings per share continued
12(b): Basic and diluted EPS (IFRS and adjusted profit) continued
Year ended 31 December 2022 Year ended 31 December 2021
Post-tax profit
measure used
Continuing
operations
Pence
Discontinued
operations
Pence
Total
Pence
Continuing
operations
Pence
Discontinued
operations
Pence
Total
Pence
Basic EPS IFRS profit 12.2 \u2013 12.2 1.4 8.0 9.4
Diluted EPS IFRS profit 12.0 \u2013 12.0 1.4 7.8 9.2
Adjusted basic EPS Adjusted profit 8.0 \u2013 8.0 7.6 3.1 10.7
Adjusted diluted EPS Adjusted profit 7.9 \u2013 7.9 7.4 3.0 10.4
12(c): Headline earnings per share
Year ended
31 December 2022
Year ended
31 December 2021
Note
Gross
\u00a3m
Net of tax
\u00a3m
Gross
\u00a3m
Net of tax
\u00a3m
Profit attributable to equity holders 175 154
Adjusted for:
Profit on business disposals
6(a) \u2013 \u2013 (90) (90)
Impairment loss on property, plant and equipment
1
\u2013 (7) \u2013 \u2013
Headline earnings 168 64
Headline basic EPS (pence) 11.7 3.9
Headline diluted EPS (pence) 11.5 3.8
1
Of the impairment, \u00a33 million relates to right-of-use asset and \u00a34 million relates to plant and equipment.
13: Dividends
Payment date
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
2020 Final dividend paid \u2013 3.6p per Ordinary Share
17 May 2021
\u2013
61
2021 Interim dividend paid \u2013 1.7p per Ordinary Share 20 September 2021 \u2013
28
2021 Final dividend paid \u2013 3.9p per Ordinary Share 16 May 2022 62
\u2013
2022 Interim dividend paid \u2013 1.2p per Ordinary Share 20 September 2022 16 \u2013
Dividends paid to Ordinary Shareholders 78 89
Subsequent to the year ended 31 December 2022, the Directors proposed a final dividend for 2022 of 3.3 pence per Ordinary Share amounting to
\u00a345 million in total. Subject to approval by shareholders at the Annual General Meeting, the dividend will be paid on 22 May 2023. In compliance with the
rules issued by the Prudential Regulation Authority (\u201cPRA\u201d) in relation to the implementation of the Solvency II regime and other regulatory requirements
to which the Group is subject, the dividend is required to remain cancellable at any point prior to it becoming due and payable on 22 May 2023 and to
be cancelled if, prior to payment, the Group ceases to hold capital resources equal to or in excess of its solvency capital requirement, or if that would
be the case if the dividend was paid. The Directors have no intention of exercising this cancellation right, other than where required to do so by the PRA
or for regulatory capital purposes.
Final and interim dividends paid to Ordinary Shareholders are calculated using the number of shares in issue at the record date less own shares held
in employee benefit trusts.
14: Goodwill and intangible assets
14(a): Analysis of goodwill and intangible assets
The table below shows the movements in cost and amortisation of goodwill and intangible assets.
Goodwill
\u00a3m
Software
development
costs
\u00a3m
Other
intangible
assets
\u00a3m
Total
\u00a3m
Gross amount
1 January 2021
1
356 95 429 880
Disposal of interests in subsidiaries (50) \u2013 (4) (54)
Disposals
2
\u2013 (65) \u2013 (65)
31 December 2021
1
306 30 425 761
31 December 2022 306 30 425 761
Amortisation and impairment losses
1 January 2021
1
\u2013 (85) (239) (324)
Amortisation charge for the year \u2013 (2) (45) (47)
Disposal of interests in subsidiaries \u2013 \u2013 2 2
Disposals
2
\u2013 65 \u2013 65
31 December 2021
1
\u2013 (22) (282) (304)
Amortisation charge for the year \u2013 (2) (42) (44)
31 December 2022 \u2013 (24) (324) (348)
Carrying amount
31 December 2021 306 8 143 457
31 December 2022 306 6 101 413
1
Following the completion of a number of strategic projects, including IT projects, the Group reviewed the fixed asset register. Assets related to software development costs with
a cost of \u00a310 million and an accumulated amortisation of \u00a310 million (net book value: \u00a3nil) that had been fully amortised prior to January 2021 and that are no longer held by the
Group or no longer in use have been removed from the register and are not recognised in the gross amount of software development costs as at 31 December 2022. Figures for
prior periods have been restated to ensure comparability.
2
Disposals of \u00a365 million in the year ended 31 December 2021 relate to the write-off of fully amortised software in respect of the Platform Transformation Programme and
following the final migration of client assets in February 2021, with all Quilter Investment Platform assets now live on the new platform.
14(b): Analysis of other intangible assets
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Average
estimated
useful life
Average
period
remaining
Net carrying value
Distribution channels \u2013 Quilter Financial Planning 4 9 8 years 2 years
Customer relationships
Quilter Cheviot 59 86 10 years 2 years
Quilter Financial Planning 22 27 8 years 4 years
Quilter Private Client Advisers 14 18 8 years 4 years
Other 2 3 7 years 1 year
Total other intangible assets 101 143
14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing
Goodwill is monitored by management at the level of the Group\u2019s two operating segments: Affluent and High Net Worth, as disclosed in note 8(a).
Both operating segments represent a group of CGUs. The allocation of goodwill to these segments was based on their individual value-in-use calculations
relative to the combined total.
31 December
2022
\u00a3m
31 December
2021
1
\u00a3m
Goodwill (net carrying amount)
Affluent 223 223
High Net Worth 83 83
Total goodwill 306 306
1
The prior year figures have been re-presented to correct a minor classification difference between the two segments. The amount attributable to Affluent has decreased
by \u00a32 million from the amount originally presented with a corresponding increase in High Net Worth.
14: Goodwill and intangible assets continued
14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing continued
Impairment review
In accordance with the requirements of IAS 36 Impairment of Assets, goodwill in both the Affluent and High Net Worth CGU groups is tested for
impairment annually, or earlier if an indicator of impairment exists, by comparing the carrying value of the CGU group to which the goodwill relates
to the recoverable value of that CGU group, being the higher of that CGU group\u2019s value-in-use or fair value less costs to sell. If applicable, an impairment
charge is recognised when the recoverable amount is less than the carrying value. Goodwill impairment indicators include sudden stock market falls,
the absence of positive Net Client Cash Flows (\u201cNCCF\u201d), significant falls in profits and significant increases in the discount rate.
The goodwill balance has been tested for impairment at 31 December 2022 and continues to demonstrate a surplus of the recoverable amount over
the carrying value of the CGUs. As a result, no impairment is required.
The following table shows the percentage change required in each key assumption before the carrying value would exceed the recoverable amount,
assuming all other variables remain the same. This highlights that further adverse movements in the key assumptions used in the CGU value-in-use
calculation would be required before an impairment would need to be recognised.
Affluent
High Net
Worth
Reduction in forecast cash flows 17% 47%
Percentage point increase in the discount rate 5% 20%
Forecast cash flows are impacted by movements in underlying assumptions, including equity market levels, revenue margins and NCCF. The Group
considers that forecast cash flows are most sensitive to movements in equity markets because they have a direct impact on the level of the Group\u2019s
fee income.
The principal sensitivity within equity market level assumptions relates to the estimated growth in equity market indices included in the three-year
revenue forecasts. Management forecasts equity market growth for each business using estimated asset-specific growth rates that are supported
by internal research, historical performance, Bank of England forecasts and other external estimates.
Value-in-use methodology
The value-in-use calculations are determined as the sum of net tangible assets and the expected cash flows from existing and expected future new
business derived from the Business Plans. Future cash flow elements allow for the cost of capital needed to support the business.
The cash flows that have been used to determine the value-in-use of the CGUs are based on the most recent management approved three-year profit
forecasts, which are contained in the Group\u2019s Business Plan. These profit forecasts incorporate anticipated equity market growth on the Group\u2019s future
cash flows, and take into account climate-related risks and other responsible business considerations. These cash flows change at different rates
because of the different strategies of the CGUs. In cases where the CGUs have made significant acquisitions in the recent past, the cash flows are
forecast to grow faster than the more mature businesses. Post the three-year forecast period, the growth rate used to determine the terminal value
of the CGUs in the annual assessment was 2.0% (2021: 2.0%), which is lower than the UK long-term growth rate. Market share and market growth
information is also used to inform the expected volumes of future new business.
IAS 36 does not permit any cost savings linked to future restructuring activity to be included within the value-in-use calculation unless an associated
restructuring provision has also been recognised. Consequently, for the purpose of the value-in-use calculation, a number of planned cost savings
and the related implementation costs, primarily in relation to the Business Simplification programme, have been removed from the future cash flows.
The Group uses a single cost of capital of 11.4% (2021: 9.5%) to discount expected future cash flows across its two groups of CGUs because they are
considered to present a similar level of risk. Capital is provided to the Group predominantly by shareholders with a relatively small amount of debt
financing. The cost of capital is the weighted average of the cost of equity (return required by shareholders) and the cost of debt (return required by
bondholders and owners of properties leased by the Group). When assessing the systematic risk (i.e. the beta value) within the calculation of the cost
of equity, a triangulation approach is used that combines beta values obtained from historical data, a forward-looking view on the progression of beta
values and the external views of investors.
15: Property, plant and equipment
Right-of-use
assets
\u00a3m
Plant and
equipment
\u00a3m
Total
\u00a3m
Gross amount
1 January 2021
1
166 83 249
Additions
2
14 13 27
Disposal of interests in subsidiaries
(32) (16) (48)
Disposals (16) (2) (18)
31 December 2021
1
132 78 210
Additions 2 3 5
Disposals
3
(3) (5) (8)
Transfer to non-current assets held for sale
4
\u2013 (1) (1)
31 December 2022 131 75 206
Accumulated depreciation and impairment losses
1 January 2021
1
(65) (42) (107)
Depreciation charge for the year (10) (6) (16)
Disposal of interests in subsidiaries 21 16 37
Disposals 5 2 7
31 December 2021
1
(49) (30) (79)
Depreciation charge for the year (9) (6) (15)
Impairment losses
5
(3) (4) (7)
Disposals
3
2 5 7
31 December 2022 (59) (35) (94)
Carrying value
31 December 2021 83 48 131
31 December 2022 72 40 112
1
Following the completion of a number of strategic projects, the Group reviewed the fixed asset register. Assets related to plant and equipment with a cost of \u00a337 million and an
accumulated depreciation of \u00a337 million (net book value: \u00a3nil) that had been fully depreciated prior to January 2021 and that are no longer held by the Group or no longer in use
have been removed from the register and are not recognised in the gross amount of plant and equipment costs as at 31 December 2022. Figures for prior periods have been
restated to ensure comparability.
2
The majority of additions in the year ended 31 December 2021 relate to the lease for Quilter House, the Group\u2019s main Southampton property, and the recognition of revised
dilapidations provisions on properties in the lease portfolio.
3
Following a review of the fixed asset register, the Group recognised the disposal of certain fully depreciated assets related to plant and equipment with a cost of \u00a35 million and
an accumulated depreciation of \u00a35 million (net book value: \u00a3nil) in the year. There were no proceeds arising from the recognition of the disposal and therefore no gain or loss has
been recognised in the income statement. There were also several disposals in 2022 relating to right-of-use assets, which resulted in an immaterial loss being recognised in the
income statement.
4
Plant and equipment transferred to non-current assets held for sale relates to the proposed sale of a leasehold interest in an office property, following the vacation of the
building by staff and the active marketing of the property in August 2022.
5
The impairment of the right-of-use assets and plant and equipment relates to the write down of assets relating to office premises no longer occupied by the Group. Quilter staff
vacated The Point, an office property in Southampton in May 2022, and the Pinnacle, an office in Manchester, in December 2022.
In the financial statement for 2021, leasehold improvements were shown separately from other plant and equipment. These categories both of which
are mainly related to the Group\u2019s office premises have now been combined for 2022 reporting. The 2021 figures have been re-presented with the two
categories combined to ensure comparability.
The carrying value of right-of-use assets at 31 December 2022 relate to \u00a372 million of property leases (31 December 2021: \u00a383 million).
16: Loans and advances
This note analyses the loans and advances the Group has made. The carrying amounts of loans and advances were as follows:
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Loans to advisers and brokers
34 29
Total net loans and advances 34 29
To be recovered within 12 months 11 7
To be recovered after 12 months 23 22
Total net loans and advances 34 29
Loans to advisers are made on individually negotiated commercial terms. The loan agreement with the adviser details the dates on which the
repayments of the loan are to be made. Where an adviser is due commission payments from Quilter, these commission payments are offset against
the loan repayments due from the adviser. In certain circumstances, the loan agreement period may be extended where agreed by both Quilter and
the adviser. Should the adviser terminate their terms of business agreement with Quilter, the loan balance becomes immediately repayable in full.
The carrying amount of loans to advisers measured at amortised cost approximates to their fair value which is measured as the principal amount
receivable under the loan agreements. The remaining loans are stated at fair value.
17: Financial investments
The table below analyses the investments and securities that the Group invests in, either on its own proprietary behalf (shareholder funds) or on behalf
of third parties (policyholder funds).
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Government and government-guaranteed securities
225 649
Other debt securities, preference shares and debentures
1,609 1,662
Equity securities
6,225 7,251
Pooled investments
35,557 38,002
Short-term funds and securities treated as investments 1 1
Total financial investments 43,617 47,565
Recoverable within 12 months 43,617 47,565
Total financial investments 43,617 47,565
The financial investments recoverability profile is based on the intention with which the financial assets are held. These assets are held to cover the
liabilities for linked investment contracts, all of which can be withdrawn by policyholders on demand.
18: Derivative financial instruments \u2013 assets and liabilities
The Group has limited involvement with derivative instruments and does not use them for the purposes of speculation. In past periods,
derivative instruments have been used to manage well-defined foreign exchange risks arising out of the normal course of business. The Group does
not anticipate any material adverse effect on its financial position resulting from its involvement in these types of contracts, nor does it anticipate
non-performance by counterparties. The Group only deals with highly rated counterparties.
The derivatives included within the statement of financial position 31 December 2022 and 31 December 2021 relate to instruments included
as a consequence of the consolidation of investment funds.
19: Categories of financial instruments
The analysis of financial assets and liabilities into their categories as defined in IFRS 9 Financial Instruments is set out in the following tables. Assets
and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the
non-financial assets and liabilities category.
For information about the methods and assumptions used in determining fair value, refer to note 20. The Group\u2019s exposure to various risks associated
with financial instruments is discussed in note 37.
31 December 2022
Fair value
Measurement basis
Mandatorily
at FVTPL
\u00a3m
Designated
at FVTPL
\u00a3m
Amortised
cost
\u00a3m
Non-financial
assets and
liabilities
\u00a3m
Total
\u00a3m
Assets
Investments in associated undertakings
1
\u2013 \u2013 \u2013 1 1
Loans and advances \u2013 \u2013 34 \u2013 34
Financial investments 43,617 \u2013 \u2013 \u2013 43,617
Trade, other receivables and other assets \u2013 \u2013 261 42 303
Derivative assets 40 \u2013 \u2013 \u2013 40
Cash and cash equivalents 1,112 \u2013 670 \u2013 1,782
Total assets that include financial instruments 44,769 \u2013 965 43 45,777
Total other non-financial assets \u2013 \u2013 \u2013 640 640
Total assets 44,769 \u2013 965 683 46,417
Liabilities
Investment contract liabilities \u2013 38,186 \u2013 \u2013 38,186
Third-party interests in consolidated funds 5,843 \u2013 \u2013 \u2013 5,843
Borrowings and lease liabilities \u2013 \u2013 290 \u2013 290
Trade, other payables and other liabilities \u2013 \u2013 358 78 436
Derivative liabilities 20 \u2013 \u2013 \u2013 20
Total liabilities that include financial instruments 5,863 38,186 648 78 44,775
Total other non-financial liabilities \u2013 \u2013 \u2013 94 94
Total liabilities 5,863 38,186 648 172 44,869
1
Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted.
19: Categories of financial instruments continued 31 December 2021 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 2 2 Loans and advances \u2013 \u2013 29 \u2013 29 Financial investments 47,564 \u2013 \u2013 1 47,565 Trade, other receivables and other assets \u2013 \u2013 325 56 381 Derivative assets 14 \u2013 \u2013 \u2013 14 Cash and cash equivalents 1,216 \u2013 848 \u2013 2,064 Total assets that include financial instruments 48,794 \u2013 1,202 59 50,055 Total other non-financial assets \u2013 \u2013 \u2013 685 685 Total assets 48,794 \u2013 1,202 744 50,740 Liabilities Investment contract liabilities \u2013 41,071 \u2013 \u2013 41,071 Third-party interests in consolidated funds 6,898 \u2013 \u2013 \u2013 6,898 Borrowings and lease liabilities \u2013 \u2013 299 \u2013 299 Trade, other payables and other liabilities \u2013 \u2013 370 114 484 Derivative liabilities 15 \u2013 \u2013 \u2013 15 Total liabilities that include financial instruments 6,913 41,071 669 114 48,767 Total other non-financial liabilities \u2013 \u2013 \u2013 234 234 Total liabilities 6,913 41,071 669 348 49,001 1 Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. 20: Fair value methodology This section explains the judgements and estimates made in determining the fair values of financial instruments that are recognised and measured at fair value in the financial statements. Classifying financial instruments into the three levels of the fair value hierarchy (see note 20(b)), prescribed under IFRS, provides an indication about the reliability of inputs used in determining fair value. 20(a): Determination of fair value The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market exit prices for assets and offer prices for liabilities, at the close of business on the reporting date, without any deduction for transaction costs: \u00b7 for units in unit trusts and shares in open-ended investment companies, fair value is determined by reference to published quoted prices representing exit values in an active market; \u00b7 for equity and debt securities not actively traded in organised markets and where the price cannot be retrieved, the fair value is determined by reference to similar instruments for which market observable prices exist; \u00b7 for assets that have been suspended from trading on an active market, the last published price is used. Many suspended assets are still regularly priced. At the reporting date, all suspended assets are assessed for impairment; and \u00b7 where the assets are private company shares or within consolidated investment funds, the valuation is based on the latest available set of audited financial statements where available, or if more recent, financial statements for the fund or a statement of valuation provided by the management of the private company or fund. There have been no significant changes in the valuation techniques applied when valuing financial instruments. Where assets are valued by the Group, the general principles applied to those instruments measured at fair value are outlined below: Loans and advances Loans and advances include certain loans to brokers at below-market interest rates which are measured at fair value. All other loans to brokers are stated at amortised cost. Financial investments Financial investments include government and government-guaranteed securities, listed and unlisted debt securities, preference shares and debentures, listed and unlisted equity securities, listed and unlisted pooled investments (see below), short-term funds and securities treated as investments and certain other securities. 20: Fair value methodology continued 20(a): Determination of fair value continued Pooled investments represent the Group\u2019s holdings of shares/units in open-ended investment companies, unit trusts, mutual funds and similar investment vehicles. Pooled investments are recognised at fair value. The fair values of pooled investments are based on widely published prices that are regularly updated. Other financial investments that are measured at fair value use observable market prices where available. In the absence of observable market prices, these investments and securities are fair valued utilising various approaches including discounted cash flows, the application of an earnings before interest, tax, depreciation and amortisation multiple or any other relevant technique. Derivatives The fair value of derivatives is determined with reference to the exchange-traded prices of the specific instruments. The fair value of over-the-counter forward foreign exchange contracts is determined by reference to the relevant exchange rates. Investment contract liabilities The fair value of the investment contract liabilities is determined with reference to the underlying funds that are held by the Group. Third-party interests in consolidated funds Third-party interests in consolidated funds are measured at the attributable net asset value of each fund. 20(b): Fair value hierarchy Fair values are determined according to the following hierarchy: Description of hierarchy Types of instrument s classified in the respective levels Level 1 \u2013 quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets. Listed equity securities, government securities and other listed debt securities and similar instruments that are actively traded, actively traded pooled investments, certain quoted derivative assets and liabilities and investment contract liabilities directly linked to other Level 1 financial assets. Level 2 \u2013 valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable. Unlisted equity and debt securities where the valuation is based on models involving no significant unobservable data. Over-the-counter (\u201cOTC\u201d) derivatives, certain privately placed debt instruments and third-party interests in consolidated funds which meet the definition of Level 2 financial instruments. Level 3 \u2013 valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable. Unlisted equity and securities with significant unobservable inputs, securities where the market is not considered sufficiently active, including certain inactive pooled investments. The judgement as to whether a market is active may include, for example, consideration of factors such as the magnitude and frequency of trading activity, the availability of prices and the size of bid/offer spreads. In inactive markets, obtaining assurance that the transaction price provides evidence of fair value or determining the adjustments to transaction prices that are necessary to measure the fair value of the asset or liability requires additional work during the valuation process. The majority of valuation techniques employ only observable data and so the reliability of the fair value measurement is high. Certain financial assets and liabilities are valued on the basis of valuation techniques that feature one or more significant inputs that are unobservable and, for them, the derivation of fair value is more judgemental. A financial asset or liability in its entirety is classified as valued using significant unobservable inputs if a significant proportion of that asset or liability\u2019s carrying amount is driven by unobservable inputs. In this context, \u2018unobservable\u2019 means that there is little or no current market data available from which to determine the price at which an arm\u2019s length transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of fair value. Furthermore, in some cases the majority of the fair value derived from a valuation technique with significant unobservable data may be attributable to observable inputs. 20(c): Transfer between fair value hierarchies The Group deems a transfer to have occurred between Level 1 and Level 2 or Level 3 when an active, traded primary market ceases to exist for that financial instrument. A transfer between Level 2 and Level 3 occurs when the majority of the significant inputs used to determine the fair value of the instrument become unobservable. Transfers from Levels 3 or 2 to Level 1 are also possible when assets become actively priced. There were no transfers of financial investments from Level 1 to Level 2 during the year (31 December 2021: \u00a316 million). There were no transfers of financial investments from Level 2 to Level 1 during the year (31 December 2021: \u00a385 million). The movement in 2021 related to assets held by the Quilter International business and these movements were matched closely by transfers of investment contract liabilities. See note 20(e) for the reconciliation of Level 3 financial instruments.
20: Fair value methodology continued
20(d): Financial assets and liabilities measured at fair value, classified according to fair value hierarchy
The majority of the Group\u2019s financial assets are measured using quoted market prices for identical instruments in active markets (Level 1) and there
have been no significant changes during the year.
The linked assets are held to cover the liabilities for linked investment contracts (net of reinsurance). The difference between linked assets and linked
liabilities is principally due to short-term timing differences between policyholder premiums being received and invested in advance of policies being
issued, and tax liabilities within funds which are reflected within the Group\u2019s tax liabilities.
Differences between assets and liabilities within the respective levels of the fair value hierarchy also arise due to the mix of underlying assets and
liabilities within consolidated funds. In addition, third-party interests in consolidated funds are classified as Level 2.
The table below presents a summary of the Group\u2019s financial assets and liabilities that are measured at fair value in the consolidated statement
of financial position according to their IFRS 9 classification (see note 19 for further details).
31 December 2022 31 December 2021
\u00a3m % \u00a3m %
Financial assets measured at fair value
Level 1 38,452 85.9% 41,996 86.0%
Level 2 6,288 14.0% 6,771 13.9%
Level 3 29 0.1% 27 0.1%
Total 44,769 100.0% 48,794 100.0%
Financial liabilities measured at fair value
Level 1 38,161 86.6% 41,047 85.5%
Level 2 5,863 13.3% 6,913 14.4%
Level 3 25 0.1% 24 0.1%
Total 44,049 100.0% 47,984 100.0%
The tables below further analyse the Group\u2019s financial assets and liabilities measured at fair value by the fair value hierarchy described in note 20(b):
31 December 2022
Level 1
\u00a3m
Level 2
\u00a3m
Level 3
\u00a3m
Total
\u00a3m
Financial assets measured at fair value
Mandatorily (fair value through profit or loss) 38,452 6,288 29 44,769
Financial investments 37,34 0 6,248 29 43,617
Cash and cash equivalents 1,112 \u2013 \u2013 1,112
Derivative assets \u2013 40 \u2013 40
Total assets measured at fair value 38,452 6,288 29 44,769
Financial liabilities measured at fair value
Mandatorily (fair value through profit or loss) \u2013 5,863 \u2013 5,863
Third-party interests in consolidated funds \u2013 5,843 \u2013 5,843
Derivative liabilities \u2013 20 \u2013 20
Designated (fair value through profit or loss) 38,161 \u2013 25 38,186
Investment contract liabilities 38,161 \u2013 25 38,186
Total liabilities measured at fair value 38,161 5,863 25 44,049
20: Fair value methodology continued
20(d): Financial assets and liabilities measured at fair value, classified according to fair value hierarchy continued
31 December 2021
Level 1
\u00a3m
Level 2
\u00a3m
Level 3
\u00a3m
Total
\u00a3m
Financial assets measured at fair value
Mandatorily (fair value through profit or loss) 41,996 6,771 27 48,794
Financial investments 40,780 6,757 27 47,564
Cash and cash equivalents 1,216 \u2013 \u2013 1,216
Derivative assets
\u2013 14 \u2013 14
Total assets measured at fair value 41,996 6,771 27 48,794
Financial liabilities measured at fair value
Mandatorily (fair value through profit or loss) \u2013 6,913 \u2013 6,913
Third-party interests in consolidated funds \u2013 6,898 \u2013 6,898
Derivative liabilities \u2013 15 \u2013 15
Designated (fair value through profit or loss) 41,047 \u2013 24 41,071
Investment contract liabilities 41,047 \u2013 24 41,071
Total liabilities measured at fair value 41,047 6,913 24 47,98 4
20(e): Level 3 fair value hierarchy disclosure
The majority of the assets classified as Level 3 are held within linked policyholder funds. Where this is the case, all of the investment risk associated with
these assets is borne by policyholders and the value of these assets is exactly matched by a corresponding liability due to policyholders. The Group bears
no risk from a change in the market value of these assets except to the extent that it has an impact on management fees earned.
Level 3 assets also include investments within consolidated funds. The Group bears no risk from a change in the market value of these assets except
to the extent that it has an impact on fund management fee income. Any changes in market value are matched by a corresponding Level 2 liability within
third-party interests in consolidated funds.
The table below reconciles the opening balance of Level 3 financial assets to the closing balance at each year end:
2022
\u00a3m
2021
\u00a3m
At beginning of the year
27 1,822
Fair value losses charged to the income statement (5) (3)
Purchases \u2013 \u2013
Sales (2) \u2013
Transfers in 125 8
Transfers out (116) (393)
Disposal of subsidiaries
1
\u2013 (1,406)
Foreign exchange and other movements \u2013 (1)
Total Level 3 financial assets at the end of the year 29 27
Unrealised fair value losses charged to the income statement relating to assets held at the year end (9) (4)
1
During the year to 31 December 2021, Level 3 assets decreased by \u00a31,406 million following the sale of Quilter International to Utmost Group.
20: Fair value methodology continued
20(e): Level 3 fair value hierarchy disclosure continued
Amounts shown as sales arise principally from the sale of private company shares, unlisted pooled investments and from distributions received
in respect of holdings in property funds.
Transfers into Level 3 assets in the current year total \u00a3125 million (31 December 2021: \u00a38 million). This is mainly due to suspended funds previously
shown within Level 1. Suspended funds are valued based on external valuation reports received from fund managers. Transfers out of Level 3 assets
in the current year of \u00a3116 million (31 December 2021: \u00a3393 million) result from a transfer to Level 1 assets relating to assets that are now being actively
repriced (that were previously stale) and where fund suspensions have been lifted.
The table below analyses the type of Level 3 financial assets held:
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Pooled investments
29 26
Unlisted and stale price pooled investments \u2013 1
Suspended funds 29 25
Private equity investments \u2013 1
Total Level 3 financial assets 29 27
As at 31 December 2022, the Group did not hold any private equity investments. As at 31 December 2021, Level 3 assets included \u00a31 million of private
equity investments, all within consolidated funds.
The table below reconciles the opening balance of Level 3 financial liabilities to the closing balance at each year end:
2022
\u00a3m
2021
\u00a3m
At beginning of the year
24 1,820
Fair value losses charged to the income statement (2) (3)
Transfers in 119 5
Transfers out (116) (391)
Disposal of subsidiaries
1
\u2013 (1,406)
Foreign exchange and other movements \u2013 (1)
Total Level 3 financial liabilities at the end of the year 25 24
Unrealised fair value losses charged to the income statement relating to liabilities held at the year end (5) (4)
1
During the year to 31 December 2021, Level 3 liabilities decreased by \u00a31,406 million following the sale of Quilter International to Utmost Group.
All of the liabilities that are classified as Level 3 are investment contract liabilities which exactly match against the Level 3 assets held in linked
policyholder funds.
20: Fair value methodology continued
20(f): Effect of changes in significant unobservable assumptions to reasonable alternatives
Details of the valuation techniques applied to the different categories of financial instruments can be found in note 20(a) above, including the valuation
techniques applied when significant unobservable assumptions are used to value Level 3 assets.
Private equity investments are valued at the value disclosed in the latest available set of audited financial statements or, if more recent information
is available from investment managers or professional valuation experts at the value of the underlying assets of the private equity investment.
For Level 3 assets and liabilities, no reasonable alternative assumptions are applicable and the Group therefore performs a sensitivity test of an
aggregate 10% change in the value of the financial asset or liability (31 December 2021: 10%), representing a reasonable alternative judgement in the
context of the current macroeconomic environment in which the Group operates. It is therefore considered that the impact of this sensitivity will be
in the range of \u00a33 million to the reported fair value of Level 3 assets, both favourable and unfavourable (31 December 2021: \u00a32 million).
As described in note 20(e), changes in the value of Level 3 assets held within linked policyholder funds are exactly matched by corresponding changes
in the value of liabilities due to policyholders and therefore have no impact on the Group\u2019s net asset value or profit or loss, except to the extent that it
has an impact on management fees earned.
20(g): Fair value hierarchy for assets and liabilities not measured at fair value
Certain financial instruments of the Group are not carried at fair value. The carrying values of these are considered reasonable approximations of their
respective fair values, as they are either short term in nature or are repriced to current market rates at frequent intervals. Their classification within the
fair value hierarchy would be as follows:
Financial assets within Trade, other receivables, and other assets Level 3
Financial liabilities within Trade, other payables, and other liabilities Level 3
Cash and cash equivalents (excluding money market funds) are held at amortised cost and therefore not carried at fair value. The cash and cash
equivalents that are held at amortised cost would be classified as Level 1 in the fair value hierarchy.
The loans and advances not carried at fair value would be classified as Level 3 in the fair value hierarchy.
Borrowed funds are financial liabilities held at amortised cost and therefore not carried at fair value. Borrowed funds relate to subordinated liabilities
and would be classified as Level 1 in the fair value hierarchy.
Lease liabilities valued under IFRS 16 are held at amortised cost and therefore not carried at fair value. They would be classified as Level 3 in the fair
value hierarchy.
21: Structured entities
Structured entities are defined as entities that have been designed so that voting or similar rights are not the dominant factor in deciding who controls
the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual
arrangements. The Group has interests in both consolidated and unconsolidated structured entities.
21(a): Group\u2019s involvement in structured entities
The Group invests in collective investment vehicles, including open-ended investment companies (\u201cOEICs\u201d) and unit trusts, in order to match unit-linked
investment contract liabilities. This means that all of the investment risk associated with these assets is borne by policyholders and any change in the
value of these assets is closely matched by a corresponding change in liability due to policyholders. As the Group earns management fees based on the
market value of unit-linked assets, any change in asset values will increase or decrease the Group\u2019s revenues. The Group has not provided any
non-contractual support to any consolidated or unconsolidated structured entities during 2021 or 2022.
As at 31 December 2021 and 31 December 2022, the Group has no obligation or intention to provide financial support to structured entities that could
expose the Group to a loss.
In addition, shareholder funds are also invested in collective investment vehicles, principally in respect of money market funds as an alternative
to bank deposits.
The Group\u2019s holdings in collective investment vehicles are subject to the terms and conditions of the respective investment vehicles\u2019 offering
documentation and are susceptible to market price risk arising from uncertainties about the future values of those investment vehicles. All of the
investment vehicles in the investment portfolios are managed by portfolio managers who are compensated by the respective investment vehicles
for their services. Such compensation generally consists of an asset-based fee and a performance-based incentive fee and is reflected in the valuation
of the investment vehicles.
These structured entities are not consolidated where the Group determines that it does not have control.
21(b): Interests in unconsolidated structured entities
The Group invests in unconsolidated structured entities as part of its normal investment and trading activities. The Group\u2019s total interest in
unconsolidated structured entities is classified as financial investments held mandatorily at fair value through profit or loss. The table below provides
a summary of the carrying value of the Group\u2019s interests in unconsolidated structured entities:
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Financial investments
1
31,300 33,712
Cash and cash equivalents 1,112 1,216
Total Group interest in unconsolidated structured entities 32,412 34,928
1
In this disclosure note, financial investments held by unconsolidated structured entities for 2021 have been re-presented to exclude cash and cash equivalents.
The Group\u2019s maximum exposure to loss with regard to the Group\u2019s interests in unconsolidated structured entities presented above, before
consideration of the reduction in unit-linked liabilities, is the carrying amount of the Group\u2019s investments (31 December 2022: \u00a332,412 million;
31 December 2021: \u00a334,928 million). The majority of the exposure relates to unit-linked products and therefore any movement in the Group\u2019s investment
will be offset by a corresponding movement in investment contract liabilities. Once the Group has disposed of its shares or units in a fund, it ceases to
be exposed to any risk from that fund. The Group\u2019s holdings in the above unconsolidated structured entities are less than 50% and as such the net
asset value of these structured entities is significantly higher than the carrying value of the Group\u2019s interest.
21(c): Consolidation considerations for structured entities managed by the Group
The Group acts as the fund manager for a number of investment funds. Determining whether the Group controls such an investment fund usually
focuses on the assessment of decision-making rights as fund manager, the investor\u2019s rights to remove the fund manager and the aggregate economic
interests of the Group in the fund in the form of the interest held and exposure to variable returns.
In most instances, the Group\u2019s decision-making authority, in its capacity as fund manager, with regard to these funds is regarded to be well-defined.
Discretion is exercised when decisions regarding the relevant activities of these funds are being made. For funds managed by the Group, where the
investors have the right to remove the Group as fund manager without cause, the fees earned by the Group are considered to be market related.
These agreements include only terms, conditions or amounts that are customarily present in arrangements for similar services and levels of skill
negotiated on an arm\u2019s length basis. The Group has concluded that it acts as agent on behalf of the investors in such cases.
The Group is considered to be acting as principal where the Group is the fund manager and is able to make the investment decisions on behalf
of the unit holders and earn a variable fee, and there are no kick out rights that would remove the Group as fund manager.
There have been no changes in facts or circumstances which have changed the Group\u2019s conclusion on its approach to the consolidation of funds.
21(d): Other interests in unconsolidated structured entities
At the current and prior reporting date, the Group held units in each of the investment funds it managed.
22: Trade, other receivables and other assets
This note analyses total trade, other receivables and other assets.
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Outstanding settlements 141 181
Other receivables 65 103
Accrued interest 4 1
Accrued income 46 40
Other accruals and prepayments 29 36
Contract assets 11 11
Management fees 7 9
Total trade, other receivables and other assets 303 381
To be settled within 12 months 302 381
To be settled after 12 months 1 \u2013
Total trade, other receivables and other assets 303 381
Other receivables mainly relate to trade debtors, tax debtors and other debtors.
There have been no non-performing receivables or material impairments in the year that require disclosure. Information about the Group\u2019s expected
credit losses on trade receivables is included in note 37(b). None of the receivables reflected above have been subject to the renegotiation of terms.
23: Contract costs
Contract costs (on investment contracts and asset management contracts) relate to costs that the Group incurs to obtain new business. These
acquisition costs are capitalised in the statement of financial position and are amortised through the income statement over the life of the contracts.
The table below analyses the movements in these balances relating to investment and asset management contracts.
Investment
contracts
\u00a3m
Asset
management
\u00a3m
Total
\u00a3m
1 January 2021
411 2 413
New business 2 1 3
Amortisation
\u2013 \u2013 \u2013
Continuing operations movement 2 1 3
New business 24 \u2013 24
Amortisation (45) \u2013 (45)
Discontinued operations movement (21) \u2013 (21)
Disposal of subsidiaries (383) \u2013 (383)
Foreign exchange (3) \u2013 (3)
31 December 2021
6 3 9
New business 2 1 3
Amortisation
(1) (1) (2)
Continuing operations movement 1 \u2013 1
31 December 2022 7 3 10
24: Cash and cash equivalents
24(a): Analysis of cash and cash equivalents
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Cash at bank 406 559
Money market funds 1,112 1,216
Cash and cash equivalents in consolidated funds 264 289
Total cash and cash equivalents per statement of cash flows 1,782 2,064
The Group\u2019s management does not consider that the cash and cash equivalents balance arising due to consolidation of funds of \u00a3264 million
(2021: \u00a3289 million) is available for use in the Group\u2019s day-to-day operations. The remainder of the Group\u2019s cash and cash equivalents balance of
\u00a31,518 million (2021: \u00a31,775 million) is considered to be available for general use by the Group for the purposes of the disclosures required under
IAS 7 Statement of Cash Flows. This balance includes policyholder cash as well as cash and cash equivalents held by regulated subsidiaries to meet
their capital and liquidity requirements.
24(b): Analysis of net cash flows from operating activities:
Notes
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Cash flows from operating activities
Profit before tax from continuing operations 65 85
Profit before tax from discontinued operations
6(b) \u2013 131
65 216
Adjustments for
Depreciation and impairment of property, plant and equipment
15 22 16
Movement on contract costs
23 (1) 18
Movement on contract liabilities and fee income receivable \u2013 10
Amortisation and impairment of intangibles
14 44 47
Fair value and other movements in financial assets 4,410 (5,102)
Fair value movements in investment contract liabilities
27 (4,878) 4,467
Other changes in investment contract liabilities 1,993 3,454
Profit on sale of subsidiaries
6(a) \u2013 (91)
Other movements
32 32
1,622 2,851
Net changes in working capital
(Increase)/decrease in net derivatives position (21) 24
(Increase)/decrease in loans and advances
16 (5) 15
(Decrease)/increase in provisions
28 (24) 17
Movement in other assets/liabilities
1
61 (20)
11 36
Taxation paid (22) (10)
Net cash flows from operating activities 1,676 3,093
1
Working capital changes in respect of other assets and liabilities primarily relate to consolidated funds.
24: Cash and cash equivalents continued
24(c): Cash flows from financing activities is further analysed below:
Liabilities Equity
1
31 December 2022
Borrowings and
lease liabilities
\u00a3m
Changes in equity
\u00a3m
Total
\u00a3m
Note 30
Opening balance at 1 January 2022 299 1,739 2,038
Cash flows from financing activities
Liability related:
Finance costs on external borrowings (9) \u2013 (9)
Equity related:
Dividends paid to equity holders of the Company \u2013 (78) (78)
Redemption of B shares \u2013 (328) (328)
Exchange rate movements paid to shareholders \u2013 (4) (4)
Repurchase and cancellation of Ordinary Shares \u2013 (28) (28)
Payment of lease liabilities (14) \u2013 (14)
Cash flows from financing activities (23) (438) (461)
Other changes
External debt interest accrual 9 \u2013 9
Changes in lease liabilities 5 \u2013 5
Liability related 14 \u2013 14
Equity related \u2013 247 247
31 December 2022 290 1,548 1,838
Liabilities Equity
1
31 December 2021
Borrowings and
lease liabilities
\u00a3m
Changes in equity
\u00a3m
Total
\u00a3m
Note 30
Opening balance at 1 January 2021 319 1,878 2,197
Cash flows from financing activities
Liability related:
Finance costs on external borrowings (9) \u2013 (9)
Equity related:
Dividends paid to equity holders of the Company \u2013 (89) (89)
Repurchase and cancellation of Ordinary Shares \u2013 (197) (197)
Payment of lease liabilities (12) \u2013 (12)
Cash flows from financing activities (21) (286) (307)
Other changes
External debt interest accrual 9 \u2013 9
Changes in lease liabilities (8) \u2013 (8)
Liability related 1 \u2013 1
Equity related \u2013 147 147
31 December 2021 299 1,739 2,038
1
Full details of changes in equity are shown in the statement of changes in equity.
25: Share capital, capital redemption reserve and merger reserve
Financial instruments issued are classified as equity when there is no contractual obligation to transfer cash, other financial assets or issue a variable
number of own equity instruments. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from
the proceeds, net of tax. At 31 December 2022, the Company\u2019s equity capital comprises 1,404,105,498 Ordinary Shares of 8 1/6 pence each with an
aggregated nominal value of \u00a3114,668,616 (31 December 2021: 1,655,827,217 Ordinary Shares of 7 pence each with an aggregated nominal value
of \u00a3115,907,905). All Ordinary Shares have been called up and fully paid.
This note gives details of the Company\u2019s share capital, shows the movements during the year and also gives details of the merger reserve release
of \u00a3124 million in the prior year and \u00a325 million in the current year:
Number of
Ordinary Shares
Nominal value of
Ordinary Shares
\u00a3m
Ordinary Share
premium
\u00a3m
At 1 January 2021
1,783,969,051 125 58
Shares cancelled through share buyback programme (128,141,834) (9) \u2013
At 31 December 2021 1,655, 827, 217 116 58
Shares cancelled through share buyback programme (17,704,132) (1) \u2013
Share Consolidation (including shares cancelled)
1
(234,017,587) \u2013 \u2013
At 31 December 2022 1,404,105,498 115 58
1
To effect the Share Consolidation, four Ordinary Shares were cancelled so that the total Ordinary Shares were exactly divisible by seven.
25(a): Share capital
On 11 March 2020, the Company announced a share buyback programme to purchase shares up to a maximum value of \u00a3375 million, in order to return
the net surplus proceeds to shareholders arising from the sale of Quilter Life Assurance which had the impact of reducing the share capital of the
Company. The programme completed in January 2022.
On 9 March 2022, the Company announced a capital return of \u00a3328 million, equivalent to 20 pence per share, from the net surplus proceeds arising
from the sale of Quilter International by way of a B Share Scheme. Following the return of capital, a Share Consolidation was completed so that
comparability between the market price for Quilter plc\u2019s Ordinary Shares before and after the implementation of the B Share Scheme was maintained.
New Ordinary Shares were issued for existing Ordinary Shares in a ratio of six new shares of 8 1/6 pence each for seven existing shares of 7 pence each
resulting in a reduction in the numbers of shares by 234,017,587.
At 31 December 2022, there is one class of share capital being the Ordinary Shares of 8 1/6 pence each. All shares issued carry equal voting rights.
The holders of the Company\u2019s Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholder
meetings of the Company.
25(b): Capital redemption reserve
Following the issue and redemption of the B preference shares as part of the B Share Scheme, the Company transferred \u00a3328 million from retained
earnings to the capital redemption reserve, as required under the provisions of sections 688 and 733 of the Companies Act 2006, being an amount
equal to the nominal value of the B shares redeemed in the year. The increase in the capital redemption reserve results from the UK company law
requirement to maintain the company\u2019s capital when shares are redeemed out of the company\u2019s distributable profits.
25(c): Merger reserve
During the year ended 31 December 2021, a dividend was paid by Quilter Perimeter Holdings Limited up to its parent Quilter plc. The resulting decrease
in Quilter Perimeter Holdings Limited\u2019s net asset value gave rise to a \u00a3124 million impairment of Quilter plc\u2019s investment in Quilter Perimeter Holdings
Limited and an associated release of the merger reserve reducing it to \u00a325 million.
In 2022, the remaining balance of the merger reserve recognised in the Group\u2019s statement of financial position was released in the creation of the
B preference shares (the remainder of the B shares were created from retained earnings).
26: Share-based payments
During the year ended 31 December 2022, the Group participated in a number of share-based payment arrangements. This note describes the nature
of the plans and how the share options and awards are valued.
26(a): Description of share-based payment arrangements
The Group operates the following share-based payment schemes with awards over Quilter plc shares: the Quilter plc Performance Share Plan,
the Quilter plc Share Reward Plan, the Quilter plc Share Incentive Plan, the Quilter plc Sharesave Plan, and the Charles Derby Group Performance
Share Plan.
26: Share-based payments continued
26(a): Description of share-based payment arrangements continued
Description of award Vesting conditions
Scheme
Restricted
shares
Conditional
shares Options Other
Dividend
entitlement
1
Contractual
life
(years)
Typical
service
(years)
Performance
(measure)
Quilter plc Performance Share Plan \u2013 \u2013
\u2013
Up to 10 3 AP EPS CAGR
2
and Relative
Total
Shareholder
Return
Quilter plc Performance Share Plan \u2013
\u2013 \u2013
Not less
than 3
3 Conduct, Risk
& Compliance
Underpins
Quilter plc Share Reward Plan \u2013
\u2013 \u2013
Typically, 3 3 \u2013
Quilter plc Share Incentive Plan
\u2013 \u2013 \u2013
Not less
than 3
2 \u2013
Quilter plc Sharesave Plan
3
\u2013 \u2013
\u2013 3\u00bd - 5\u00bd 3 & 5 \u2013
Charles Derby Group Performance Share
Plan
\u2013 \u2013
\u2013
Up to 10 5 AP EPS CAGR
1
Participants are entitled to actual dividends for the Share Incentive Plan. For all other schemes, participants are entitled to dividend equivalents.
2
Adjusted profit compound annual growth rate (\u201cCAGR\u201d).
3
The Quilter plc Sharesave Plan is linked to a savings plan.
26(b): Reconciliation of movements in options
The movement in options outstanding under the Performance Share Plans and Sharesave Plan arrangements during the year is detailed below:
Year ended
31 December 2022
Year ended
31 December 2021
Options over Ordinary Shares
(London Stock Exchange)
Number of
options
Weighted average
exercise price
Number of
options
Weighted average
exercise price
Outstanding at beginning of the year 27,188,566 \u00a30.62 24,898,095 \u00a30.54
Granted during the year 8,639,650 \u00a30.83 6 ,315,110 \u00a30.86
Forfeited during the year (7,803,514) \u00a30.13 (1,544,730) \u00a30.38
Exercised during the year (8,094,488) \u00a30.92 (1,609,808) \u00a30.27
Expired during the year (441,038) \u00a31.27 (220,391) \u00a31.25
Cancelled during the year (3,090,346) \u00a31.26 (649,710) \u00a31.27
Outstanding at end of the year 16,398,830 \u00a30.67 27,188,566 \u00a30.62
Exercisable at end of the year \u2013 \u2013 \u2013 \u2013
The weighted average fair value of options at the measurement date for options granted during the year ended 31 December 2022 is \u00a30.59,
(2021: \u00a30.68). The weighted average share price at the dates of exercise for options exercised during the year was \u00a31.14 (2021: \u00a31.62).
The options outstanding at 31 December 2022 have exercise prices of \u00a3nil for the Quilter plc Performance Share Plan, and between \u00a31.17 and \u00a31.31 for
the Quilter plc Sharesave Plan, with a weighted average remaining contractual life of 1.8 years. At 31 December 2021, the exercise price was \u00a3nil for both
the Quilter plc Performance Share Plan and Charles Derby Group Performance Share Plan, and between \u00a31.25 and \u00a31.31 for the Quilter plc Sharesave
Plan, with a weighted average remaining contractual life of 1.3 years.
See note 4 for details of the capital return, Share Consolidation and impact on shareholder metrics.
26(c): Measurements and assumptions
In determining the fair value of equity-settled share-based awards and the related charge to the income statement, the Group makes assumptions
about future events and market conditions. Specifically, management makes estimates of the likely number of shares that will vest and the fair value
of each award granted which is valued and \u2018locked in\u2019 at the grant date.
The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted. The estimate
of fair value of share options granted is measured using either a Black-Scholes option pricing model or a Monte Carlo simulation.
26: Share-based payments continued
26(c): Measurements and assumptions continued
The inputs used in the measurement of fair values at the grant date for awards granted during 2022 were as follows:
Scheme
Weighted
average
share
price
\u00a3
Weighted
average
exercise
price
\u00a3
Weighted
average
expected
volatility
Weighted
average
expected
life
(years)
Weighted
average
risk-free
interest
rate
Weighted
average
expected
dividend
yield
Expected
forfeitures
per annum
Quilter plc Performance Share Plan
\u2013 Share Options (Nil cost options) 1.38 0.00 29% 3.0 1.5% 0.0% 0%
Quilter plc Performance Share Plan
\u2013 Conditional Shares 1.36 0.00 30% 3.0 1.5% 0.0% 4%
Quilter plc Share Reward Plan
\u2013 Conditional Shares 1.37 0.00 30% 2.0 1.4% 0.0% 4%
Quilter plc Sharesave Plan 1.43 1.17 30% 3.4 1.4% 3.1% 5%
The expected volatility used was based on the historical volatility of the share price over the period for which trading history is available. The risk-free
interest rate was based on the yields available on UK Government bonds as at the date of grant. The bonds chosen were those with a similar remaining
term to the expected life of the share awards.
26(d): Share grants
The following table summarises the fair value of Conditional Shares granted by the Group during the year:
Year ended
31 December 2022
Year ended
31 December 2021
Instruments granted during the year
Number
granted
Weighted
average
fair value
Number
granted
Weighted
average
fair value
Quilter plc Performance Share Plan \u2013 Conditional Shares 4,258,062 \u00a31.38 3,854,809 \u00a31.64
Quilter plc Share Reward Plan \u2013 Conditional Shares 11,204,853 \u00a31.37 4,243,273 \u00a31.64
26(e): Financial impact
The share-based payment reserve of \u00a341 million (31 December 2021: \u00a342 million) represents the cumulative expense of the Group for the unsettled
portion of equity awarded schemes.
The total expense recognised in the year arising from equity compensation plans was as follows:
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Expense arising from equity-settled share and share option plans \u2013 continuing operations 24 19
Expense arising from equity-settled share and share option plans \u2013 discontinued operations \u2013 1
Total expense arising from share and share option plans 24 20
27: Investment contract liabilities
The following table provides a summary of the Group\u2019s investment contract liabilities:
2022
\u00a3m
2021
\u00a3m
Carrying amount at 1 January 41,071 57,4 07
From continuing operations
Fair value movements (4,878) 2,821
Investment income 560 472
Movements arising from investment return
(4,318) 3,293
From discontinued operations
Fair value movements \u2013 1,646
Investment income
\u2013 172
Movements arising from investment return \u2013 1,818
Contributions received 4,408 6,837
Withdrawals and surrenders
1
(2,759) (3,866)
Claims and benefits (219) (162)
Other movements
3 1
Change in liability (2,885) 7,921
Currency translation gain \u2013 (199)
Disposal of subsidiaries \u2013 (24,058)
Investment contract liabilities at end of the year 38,186 41,071
1
Includes amounts previously presented as maturities of \u00a3406 million for the year to 31 December 2021.
For unit-linked investment contracts, movements in asset values are offset by corresponding changes in liabilities, limiting the net impact on profit.
The benefits offered under the unit-linked investment contracts are based on the risk appetite of policyholders and the return on their selected
investments and collective fund investments, whose underlying investments include equities, debt securities, property and derivatives.
This investment mix is unique to individual policyholders.
For unit-linked business, the unit liabilities are determined as the value of units credited to policyholders. Since these liabilities are determined on
a retrospective basis, no assumptions for future experience are required. Assumptions for future experience are required for unit-linked business in
assessing whether the total of the contract costs asset and contract liability is greater than the present value of future profits expected to arise on the
relevant blocks of business (the \u201crecoverability test\u201d). If this is the case, then the contract costs asset is restricted to the recoverable amount. For linked
contracts, the assumptions are on a best estimate basis.
28: Provisions
31 December 2022
Compensation
provisions
\u00a3m
Sale of
subsidiaries
\u00a3m
Property
provisions
\u00a3m
Clawback
and other
provisions
\u00a3m
Total
\u00a3m
Balance at beginning of the year 41 22 9 21 93
Charge to income statement 22 \u2013 4 3 29
Utilised during the year (28) (7) (1) (2) (38)
Unused amounts reversed (12) \u2013 \u2013 (4) (16)
Reclassification within the statement of financial position
3
\u2013 \u2013 \u2013 1 1
Balance at 31 December 2022 23 15 12 19 69
31 December 2021
Compensation
provisions
\u00a3m
Sale of
subsidiaries
\u00a3m
Property
provisions
\u00a3m
Clawback
and other
provisions
\u00a3m
Total
\u00a3m
Balance at beginning of the year 42 10 \u2013 25 77
Charge to income statement
1
23 17 7 2 49
Utilised during the year (12) (4) \u2013 (4) (20)
Unused amounts reversed (10) (1) \u2013 (5) (16)
Disposals
2
(2) \u2013 \u2013 \u2013 (2)
Reclassification within the statement of financial position
4
\u2013 \u2013 2 3 5
Balance at 31 December 2021 41 22 9 21 93
1
Part of the charge to the income statement in 2021 was included within the discontinued operations income statement.
2
The balance within \u201cDisposals\u201d relates to the provision balance within Quilter International at completion of the sale of the business on 30 November 2021.
3
Clawback and other provisions related to the balancing premium payable for the bulk annuity purchased for the Quilter Cheviot Limited Retirement Benefits scheme were
reclassified during the year to 31 December 2022 from accruals reflecting the uncertainty of the amounts to be settled.
4
During the year to 31 December 2021, property provisions related to dilapidations and other provisions related to historical licence agreements were reclassified from lease
liabilities and accruals respectively reflecting the uncertainty of the amounts to be settled.
Compensation provisions
Compensation provisions total \u00a323 million (31 December 2021: \u00a341 million) and the net reduction of \u00a318 million during the year is due to additional
charges to the income statement of \u00a322 million, compensation payments made during the period of \u00a328 million and the \u00a312 million release of unused
amounts during 2022 following further review work completed during the year. Compensation provisions are comprised of the following:
Lighthouse pension transfer advice provision of \u00a35 million (31 December 2021: \u00a329 million)
Lighthouse pension transfer advice provided to British Steel members of \u00a34 million (31 December 2021: \u00a321 million)
A total provision of \u00a34 million (31 December 2021: \u00a321 million) remains for the redress of British Steel Pension Scheme cases, including anticipated
costs associated with the redress activity. This is comprised of two parts:
(a)\u2002Client redress provision of \u00a33 million (31 December 2021: \u00a319 million), comprised of \u00a323 million (31 December 2021: \u00a323 million) redress payable,
less payments made to customers of \u00a320 million, of which \u00a316 million was paid in 2022 (31 December 2021: \u00a34 million).
(b)\u2002Anticipated costs associated with redress activity of \u00a31 million (31 December 2021: \u00a32 million), comprised of \u00a37 million costs payable
(31 December 2021: \u00a34 million), less payments made of \u00a34 million during 2022 and \u00a32 million during 2021. This provision is recognised in respect
of the anticipated costs of legal and professional fees related to the cases and redress process, which includes the expected costs to review advice.
During the year to 31 December 2022, the skilled person completed their review of all British Steel Pension Scheme cases within the initial scope
of the review, reflecting the outcome on suitability of the DB to DC pension transfer advice review for each case, and all remaining offers were made
to customers who received unsuitable DB to DC pension transfer advice which caused them to sustain a loss.
Certain customers who have been included in the skilled person review work already undertaken have referred their case to the Financial Ombudsman
Service, relating to cases where: (i) relevant DB to DC pension transfer advice was found to be suitable by the skilled person; or (ii) where relevant DB to
DC pension transfer advice was found to be unsuitable by the skilled person, but the customer disagrees with the way in which their redress offer has
been calculated by the skilled person. The Financial Ombudsman Service may uphold some or all of the challenges made.
In November 2022, the FCA published a policy statement containing the final rules for a redress scheme for former members of the British Steel
Pension Scheme who received unsuitable advice (the \u201cBSPS Redress Scheme\u201d). The BSPS Redress Scheme will cover those persons who received
advice between 26 May 2016 and 29 March 2018 to transfer out of the British Steel Pension Scheme. The final rules for the BSPS Redress Scheme set
out how advisers must determine whether they gave unsuitable advice and whether they must pay redress. The Group may therefore face further
costs of redress as a result of the BSPS Redress Scheme. The BSPS Redress Scheme will not cover individuals that have accepted redress for that advice,
referred the matter to the Financial Ombudsman Service or received a final outcome following a suitability assessment of their case conducted through
a skilled person review. Therefore, based on the final rules of the BSPS Redress Scheme, this process will not include Lighthouse cases that have already
been reviewed by the skilled person where the customer received a final outcome. The Group is currently considering whether, based on the final rules
for the BSPS Redress Scheme, there are any Lighthouse cases relating to British Steel Pension Scheme members that were subject to the skilled person
review that may fall within the scope of the BSPS Redress Scheme.
28: Provisions continued
An asset of \u00a33 million representing an insurance recoverable in respect of British Steel pension transfer advice was included in the fair value of the
acquired net assets of Lighthouse and presented on the statement of financial position as at 31 December 2021. During 2022, the insurers confirmed
coverage and the Group received \u00a315 million cash.
Lighthouse pension transfer advice provided to members of other schemes of \u00a31 million (31 December 2021: \u00a38 million)
During 2021, the skilled person review identified unsuitable DB to DC pension advice provided by Lighthouse advisers for pension schemes other
than the British Steel Pension Scheme. The initial scope of the review concluded in 2022, with \u00a33 million paid to customers and the remaining provision
released to the income statement. Subject to FCA confirmation, we anticipate that the skilled person review will conclude during 2023.
In the second half of 2022, the skilled person recommended a potential review of a further sample of Lighthouse DB to DC pension transfer advice
cases not relating to the British Steel Pension Scheme. In December 2022, the FCA confirmed to the Group that it agreed with the skilled person\u2019s
recommendation. The FCA also confirmed that, given the cooperation of the Group in relation to the skilled person review and established past
business review methodology and consistent with the recommendation made by the skilled person, this further sample should be reviewed under
a Group managed past business review process with the current skilled person acting as expert. The FCA also agreed with the skilled person that the
further sample should be selected on a risk-based approach and has set out to the Group the key risk factors to be used in determining the sample.
The review of this sample may uncover some additional cases where customer redress is required. Until the relevant sample has been reviewed,
uncertainty exists as to the number of cases where this will be required and the value of total redress which may be payable. A provision for redress
relating to the review of this further sample of cases of \u00a31 million has been established at 31 December 2022.
Compensation provisions (other) of \u00a318 million (31 December 2021: \u00a312 million)
Other compensation provisions of \u00a318 million include amounts relating to the cost of correcting deficiencies in policy administration systems, including
restatements, any associated litigation costs and the related costs to compensate previous or existing policyholders and customers. This provision
represents management\u2019s best estimate of expected outcomes based upon previous experience, and a review of the details of each case. Due to the
nature of the provision, the timing of the expected cash outflows is uncertain. The best estimate of the timing of outflows is that the majority of the
balance is expected to be settled within 12 months.
A provision of \u00a37 million, included within the balance, has been recognised at 31 December 2022 (31 December 2021: \u00a36 million) relating to potentially
unsuitable DB to DC pension transfer advice provided by advisers, including advice provided prior to Quilter\u2019s acquisition of the relevant advice
businesses. Of this balance, \u00a32 million (31 December 2021: \u00a32 million) has been recognised for potentially unsuitable DB to DC pension transfer advice
provided to British Steel Pension Scheme members by Quilter Financial Planning firms other than Lighthouse. This provision was recognised following
the receipt of a \u201cDear CEO\u201d letter from the FCA in December 2021, and subsequent establishment of the BSPS Redress Scheme. These British Steel
Pension Scheme cases have yet to be reviewed for suitability and an estimate of the provision has been made based upon the Group\u2019s experience
of the Lighthouse skilled person review.
A provision of \u00a34 million, included within the balance, related to Final Plan Closure (\u201cFPC\u201d) receipts previously recognised as revenue since 2013 for
distributions the Group received from investments for clients who had previously closed their accounts. FPC receipts represent distributions, including
tax gross ups where relevant, and rebates received after a customer has left the Quilter platform, which the Terms and Conditions of the pension and
insured bonds legally entitled the Group to retain. A review this year has led to a change in business policy, and Quilter have made the decision to
voluntarily return these amounts to those impacted clients backdated to inception, with an appropriate interest rate applied to the balances owed.
A provision of \u00a36 million was initially recognised, and payments of \u00a32 million have been made to clients during the year. The remaining provision
outstanding of \u00a34 million is expected to be payable within one year.
The Group estimates a reasonably possible change of +/- \u00a34 million from the \u00a318 million balance, based upon a review of the cases and the range
of potential outcomes for the customer redress payments.
Sale of subsidiaries
Sale of subsidiaries provisions total \u00a315 million at 31 December 2022 (31 December 2021: \u00a322 million), and include the following:
Provisions arising on the disposal of Quilter International of \u00a311 million (31 December 2021: \u00a316 million)
Quilter International was sold on 30 November 2021, resulting in provisions totalling \u00a317 million being established in respect of costs related to the
disposal including the costs of business separation and data migration activities.
The costs of business separation arise from the process required to separate Quilter International\u2019s infrastructure, which is complex and covers
a wide range of areas including people, IT systems, data, and contracts facilities. A programme team has been established to ensure the transition of
these areas to the acquirer. These provisions have been based on external quotations and estimations, together with estimates of the incremental time
and resource costs required to achieve the separation, which is expected to occur over a two-year period.
The most significant element of the provision is the cost of migration of IT systems and data to the acquirer. Calculation of the provision is based on
management\u2019s best estimate of the work required, the time it is expected to take, the number and skills of the staff required and their cost, and the
cost of related external IT services to support the work. In reaching these judgements and estimates, management has made use of its past experience
of previous IT migrations following business disposals, including the migration of QLA. The Group estimates a provision sensitivity of +/-25% (\u00a33 million),
based upon a review of the range of time periods expected to complete the work required. The provision is expected to be fully utilised over three years
from the sale, with \u00a38 million forecast to be paid within one year.
During the year, \u00a36 million (2021: \u00a31 million) of the provision has been utilised.
28: Provisions continued
Sale of Single Strategy Asset Management business provision of \u00a34 million (31 December 2021: \u00a34 million)
In 2018, a restructuring provision was recognised as a result of the sale of the Single Strategy Asset Management business (now known as Jupiter
Investment Management (\u201cJupiter\u201d)) to enable the remaining Quilter Investors business to function as a standalone operation going forward.
The remaining provision relates to various sale-related future commitments, the outcome of which was uncertain at the time of the sale and the
most significant of which is in relation to the guarantee of revenues for the seller in future years arising from funds invested by customers of Quilter.
In 2021, \u00a32 million was settled relating to the 2020 measurement year. The balance has been adjusted for the latest estimate for the 2022
measurement year, which is the final measurement year required in the sale agreement.
The expected range of payments based upon the latest information received from Jupiter and the Group\u2019s reasonable expectations of AUM invested
within Jupiter funds during the 2022 assessment period is between \u00a34 million and \u00a35 million.
The provision outstanding is estimated to be payable within one year, with expected final settlement due in the first half of 2023. Once finalised
and settled, this will be the final amount payable under this arrangement with Jupiter.
Provisions arising on the disposal of Quilter Life Assurance of \u00a3nil (31 December 2021: \u00a31 million)
Quilter Life Assurance was sold in 2019, resulting in provisions totalling \u00a36 million being established in respect of the costs of disposing the business
and the related costs of business separation.
During the year, \u00a31 million of the provision has been utilised. These were the final costs incurred to complete and close the project.
Property provisions
Property provisions represent the discounted value of expected future costs of reinstating leased property to its original condition at the end of the
lease term, and any onerous commitments which may arise in cases where a leased property is no longer being fully utilised by the Group. The estimate
is based upon property location, size of property and an estimate of the charge per square foot. Property provisions are utilised or released when the
reinstatement obligations have been fulfilled. The associated asset for the property provisions relating to the cost of reinstating property is included
within \u201cProperty, plant and equipment\u201d.
Of the \u00a312 million provision outstanding, \u00a33 million (2021: \u00a31 million) is estimated to be payable within one year. The majority of the balance relates
to leased property which has a lease term maturity of more than five years.
Clawback and other provisions
Other provisions include amounts for the resolution of legal uncertainties and the settlement of other claims raised by contracting parties and
indemnity commission provisions and now includes the balancing premium payable for the bulk annuity purchased for the Quilter Cheviot Limited
Retirement Benefits scheme. Where material, provisions are discounted at discount rates specific to the risks inherent in the liability. The timing and
final amounts of payments, particularly those in respect of litigation claims and similar actions against the Group, are uncertain and could result in
adjustments to the amounts recorded.
Included within the balance at 31 December 2022 is \u00a314 million (31 December 2021: \u00a316 million) of clawback provisions in respect of potential refunds
due to product providers on indemnity commission within the Quilter Financial Planning business. This provision, which is estimated and charged as a
reduction of revenue on the income statement at the point of sale of each policy, is based upon assumptions determined from historical experience of
the proportion of policyholders cancelling their policies, which requires Quilter to refund a portion of commission previously received. Reductions to
the provision result from the payment of cash to product providers as refunds or the recognition of revenue where a portion is assessed as no longer
payable. The provision has been assessed at the reporting date and adjusted for the latest cancellation information available. At 31 December 2022,
an associated balance of \u00a38 million recoverable from brokers is included within \u201cTrade, other receivables and other assets\u201d (31 December 2021:
\u00a39 million).
The Group estimates a reasonably possible change of +/- \u00a33 million, based upon the potential range of outcomes for the proportion of cancelled
policies within the clawback provision, and a detailed review of the other provisions.
Of the total \u00a319 million provision outstanding, \u00a38 million is estimated to be payable within one year (31 December 2021: \u00a313 million).
29: Tax assets and liabilities
Deferred tax is calculated on all temporary differences at the tax rate applicable in the country in which the differences arise.
Deferred tax summary
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Deferred tax assets 94 88
Less: deferred tax liabilities (24) (139)
Net deferred tax asset/(liability) 70 (51)
The main rate of Corporation Tax is 19% for the financial year 2022 (2021: 19%). The Corporation Tax rate will increase from 19% to 25%, effective from
1 April 2023. This change was substantively enacted in 2021 and the new rate has been used in recognising the Company\u2019s deferred tax assets and
liabilities for reversals expected to take place on or after 1 April 2023.
29(a): Deferred tax assets
Deferred tax assets are recognised for tax losses carried forward only to the extent that the realisation of the related tax benefit is probable. Realisation
of the tax benefit is considered to be probable where on the basis of all available evidence, it is more likely than not that there will be suitable taxable
profits against which the loss can be relieved.
The movements on recognised deferred tax assets are explained below:
31 December 2022
At beginning
of the year
\u00a3m
Income
statement
(charge)/
credit
\u00a3m
Charged
to equity
\u00a3m
At end of
the year
\u00a3m
Tax losses carried forward 24 (8) \u2013 16
Accelerated depreciation 20 1 \u2013 21
Accrued interest expense and other temporary differences 41 (10) \u2013 31
Share-based payments 9 \u2013 (2) 7
Deferred expenses and excess expenses
1
6 44 \u2013 50
Netted against deferred tax liabilities (12) (19) \u2013 (31)
Deferred tax assets 88 8 (2) 94
31 December 2021
At beginning
of the year
\u00a3m
Income
statement
(charge)/
credit
\u00a3m
Charged
to equity
\u00a3m
At end of
the year
\u00a3m
Tax losses carried forward 15 9 \u2013 24
Accelerated depreciation 19 1 \u2013 20
Accrued interest expense and other temporary differences 41 \u2013 \u2013 41
Share-based payments 9 \u2013 \u2013 9
Deferred expenses and excess expenses
1
6 \u2013 \u2013 6
Provisions 1 (1) \u2013 \u2013
Netted against deferred tax liabilities (13) 1 \u2013 (12)
Deferred tax assets 78 10 \u2013 88
1
For the year ended 31 December 2022, the \u00a350 million includes deferred expenses of \u00a35 million (2021: \u00a36 million) and excess expenses of \u00a345 million (2021: \u00a3nil).
The recognition of deferred tax assets is subject to the estimation of future taxable profits based on the Group\u2019s Business Plan. The Business Plan takes
into account estimated levels of assets under management and administration, which are subject to a large number of factors including global stock
market movements and related movements in foreign exchange rates, together with estimates of net client cash flow, expenses and other charges.
The Business Plan also takes into account climate-related risks.
The Business Plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised.
In general, the Group assesses recoverability of deferred tax assets based on estimated taxable profits over a three-year planning horizon.
Deferred tax assets have been recognised to the extent they are supported by the Group\u2019s Business Plan. The sensitivity of these deferred tax assets
is such that any decrease in profitability over the three-year planning period would result in a reduction in the value of these assets.
29: Tax assets and liabilities continued
29(a): Deferred tax assets continued
Unrecognised deferred tax assets
The amounts for which no deferred tax asset has been recognised consist of:
31 December 2022
\u00a3m
31 December 2021
\u00a3m
Gross amount Tax Gross amount Tax
Pre-April 2017 UK tax losses 244 61 252 63
Post-April 2017 UK tax losses 91 23 106 26
Capital losses 347 87 347 87
Total unrelieved tax losses 682 171 705 176
Other timing differences \u2013 \u2013 3 1
Total unrecognised deferred tax assets
1
682 171 708 177
1
None of the unrecognised deferred tax assets have a set expiry date in tax law.
Movements in unrecognised deferred tax assets
Under UK tax law, UK brought forward non-capital tax losses that arose after 1 April 2017 (\u201cPost-April 2017 UK tax losses\u201d) may be offset against current
year UK taxable profits arising in any company within Group, subject to a restriction of 50% of profits each year. Consequently, as described above and
in note 11, the recognition of deferred tax assets on Post-April 2017 UK tax losses is assessed by reference to the Group\u2019s Business Plan.
The Group may in the future recognise additional deferred tax assets in respect of the unrecognised portion of the Post-April 2017 UK tax losses, as the
Group progresses through the Business Plan period. The recognition of deferred tax assets on these losses is expected to remain a critical accounting
estimate as described in these financial statements for the foreseeable future.
All other non-capital UK tax losses within the Group (\u201cPre-April 2017 UK tax losses\u201d) can only be used against taxable profits arising in the same
company as the loss. It is therefore less likely that a deferred tax asset will be recognised in the foreseeable future in respect of the currently
unrecognised portion of these tax losses.
Capital losses are in Quilter Life & Pensions Limited. There is currently insufficient evidence to forecast future chargeable gains in that company
on which to justify recognition of a deferred tax asset for any of these losses.
29(b): Deferred tax liabilities
The movement on deferred tax liabilities is as follows:
31 December 2022
At beginning
of the year
\u00a3m
Income
statement
(credit)/
charge
\u00a3m
Acquisition/
disposal of
subsidiaries
\u00a3m
At end of
the year
\u00a3m
Other acquired intangibles 32 (8) \u2013 24
Other temporary differences \u2013 1 \u2013 1
Investment gains 120 (90) \u2013 30
Netted against deferred tax assets (13) (18) \u2013 (31)
Deferred tax liabilities 139 (115) \u2013 24
31 December 2021
At beginning
of the year
\u00a3m
Income
statement
(credit)/
charge
\u00a3m
Acquisition/
disposal of
subsidiaries
\u00a3m
At end of
the year
\u00a3m
Other acquired intangibles 36 (4) \u2013 32
Other temporary differences 2 \u2013 (2) \u2013
Investment gains 81 39 \u2013 120
Netted against deferred tax assets (13) \u2013 \u2013 (13)
Deferred tax liabilities 106 35 (2) 139
Movements in deferred tax liabilities
Deferred tax liabilities in relation to investment gains and losses have decreased by \u00a390 million (2021: \u00a339 million increase) due to market movements
in the year, as disclosed in note 11.
29(c): Current tax receivables and payables
Current tax receivables and current tax payables at 31 December 2022 were \u00a310 million (2021: \u00a3nil) and \u00a31 million (2021: \u00a32 million), respectively.
30: Borrowings and lease liabilities
The following table analyses the Group\u2019s borrowings and lease liabilities:
Notes
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Subordinated debt: fixed rate loan at 4.478% 30(a) 200 199
Lease liabilities
30(b) 90 100
Total borrowings and lease liabilities 290 299
30(a): Borrowings
Borrowed funds are repayable on demand and categorised in terms of IFRS 9 Financial Instruments as \u201cFinancial liabilities at amortised cost\u201d.
The carrying value of the Group\u2019s borrowings is considered to be materially in line with the fair value. All amounts outstanding at 31 December 2022
are payable to a number of relationship banks.
On 28 February 2018, the Group issued a \u00a3200 million subordinated debt security in the form of a 10-year Tier 2 bond with a one-time issuer call option
after five years to J.P. Morgan Securities plc, paying a semi-annual coupon of 4.478% (the \u201cTier 2 Bond\u201d). The Tier 2 bond was remarketed and sold to
the secondary market in full on 13 April 2018. At 31 December 2022, the Tier 2 bond was listed and regulated under the terms of the London Stock
Exchange. At the reporting date, the Tier 2 bond was due to mature in 2028 with the option to redeem in 2023.
Refer to note 40 for details of the \u00a3200,000,000 8.625% Fixed Rate Reset Subordinated Notes issued in January 2023.
In addition, the Group has entered into a \u00a3125 million revolving credit facility which remains undrawn and is being held for contingent funding purposes.
30(b): Lease liabilities
The Group has entered into commercial non-cancellable leases on certain property, plant and equipment where it is not in the best interest of the Group
to purchase these assets. Such leases have varying terms, escalation clauses and renewal rights.
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\u2019s operations. The majority of termination options held are exercisable only by the Group and not by the
respective lessor.
As at 31 December 2022, future undiscounted cash outflows of \u00a3nil (2021: \u00a3nil) have been included in the lease liability which will occur beyond
termination option dates on none (2021: none) of the Group\u2019s principal property leases. The lease term is reassessed if an option is exercised (or not
exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event
or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
During the year, certain lease terms were reassessed to reflect the expectation that termination options will now be exercised. The financial effect of
this reassessment was a change of \u00a3nil in recognised lease liabilities and right-of-use assets, for the year (2021: \u00a311 million decrease). These are the only
significant property leases where the term is modelled up to a termination option date.
Lease liabilities represent the obligation to pay lease rentals as required by IFRS 16 and are categorised as financial liabilities at amortised cost.
2022
\u00a3m
2021
\u00a3m
Opening balance at 1 January 100 120
Additions 1 13
Disposals and adjustments to lease liabilities \u2013 (12)
Interest charge for the year 3 4
Reclassification to provisions \u2013 (2)
Payment for the interest portion of lease liabilities (3) (2)
Payment for the principal portion of lease liabilities (11) (10)
Disposal of interests in subsidiary \u2013 (11)
Closing balance at 31 December 90 100
To be settled within 12 months 9 10
To be settled after 12 months 81 90
Total lease liabilities 90 100
Maturity analysis \u2013 undiscounted
Within one year 11 13
One to five years 37 40
More than five years 60 67
Total lease liabilities \u2013 undiscounted 108 120
31: Trade, other payables and other liabilities
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Amounts payable to policyholders 51 46
Outstanding settlements 201 185
Accruals and deferred income 83 123
Trade creditors 32 33
Deferred consideration \u2013 5
Other liabilities 69 92
Total trade, other payables and other liabilities 436 484
To be settled within 12 months 436 484
To be settled after 12 months \u2013 \u2013
Total trade, other payables and other liabilities 436 484
32: Contract liabilities
Contract liabilities relate to non-refundable front-end fee income, comprising fees received at inception or receivable over an initial period for services
not yet provided. The income is deferred through the creation of a contract liability on the statement of financial position and released to income as
the services are provided. Equal service provision is assumed over the lifetime of the contract and, as such, the contract liability is amortised on a linear
basis over the expected life of the contract, adjusted for expected persistency. The contract liability principally comprises fee income already received
in cash. The table below analyses the movements in contract liabilities. All contract liabilities for the year ended 2021 relate to discontinued operations.
Total
\u00a3m
1 January 2021
379
Fees and commission income deferred 41
Amortisation (40)
Foreign exchange
(4)
Discontinued operations movements (3)
Disposal of subsidiaries \u2013 sale of Quilter International (376)
31 December 2021 \u2013
31 December 2022 \u2013
33: Post-employment benefits
The Group operates a number of defined contribution and defined benefit pension schemes in the UK, the Channel Islands and Ireland.
Defined contribution pension schemes
The Group\u2019s defined contribution schemes require contributions to be made to funds held in trust, separate from the assets of the Group. Participants
receive either a monthly pension supplement to their salaries or contributions to personal pension plans. For the defined contribution schemes, the
Group pays contributions to separately administered pension schemes. The Group has no further payment obligations once the contributions have
been paid. The contributions are recognised in current service cost in the income statement as staff costs and other employee-related costs when
they are due.
Defined benefit schemes
The Group operates two defined benefit schemes: The Quilter Cheviot Limited Retirement Benefits Scheme and the Quilter Cheviot Channel Islands
Retirement Benefits Scheme which are both closed to new members. The assets of these schemes are held in separate trustee administered funds.
Pension costs and contributions relating to defined benefit schemes are assessed in accordance with the advice of qualified actuaries. Actuarial advice
confirms that the current level of contributions payable to each pension scheme, together with existing assets, are adequate to secure members\u2019
benefits over the remaining service lives of participating employees. The Group\u2019s policy is to fund at least the amounts sufficient to meet minimum
funding requirements under applicable employee benefit and tax regulations. The schemes are reviewed at least on a triennial basis or in accordance
with local practice and regulations. In the intervening years, the actuary reviews the continuing appropriateness of the assumptions applied.
In 2019, the Trustees of the Quilter Cheviot Limited Retirement Benefits scheme purchased a bulk annuity from Aviva to de-risk the defined benefit
pension scheme obligation. This investment strategy was intended to equally match the assets and liabilities of the scheme. This covers all remaining
insured scheme benefits following previous bulk annuity transactions in 2013, 2014 and 2015.
IAS 19 Employee Benefits disclosures
This note gives full IAS 19 Employee Benefits disclosures for the above schemes.
33: Post-employment benefits continued
33(a): Liability for defined benefit obligations
The IAS 19 value of the assets and the scheme obligations are as follows:
2022
\u00a3m
2021
\u00a3m
Changes in retirement benefit obligations
Total IAS 19 retirement benefit obligation at 1 January (41) (41)
Interest cost on benefit obligation (1) (1)
Effect of changes in actuarial assumptions 15 \u2013
Benefits paid 2 1
Total IAS 19 retirement benefit obligations at 31 December (25) (41)
Change in plan assets
Total IAS 19 fair value of scheme assets at 1 January 42 42
Actual return on plan assets (14) 1
Benefits paid (2) (1)
Total IAS 19 fair value of scheme assets at 31 December 26 42
Net IAS 19 asset recognised in statement of financial position
Funded status of plan 1 1
Unrecognised assets (1) (1)
Net IAS 19 amount recognised in statement of financial position as at 31 December \u2013 \u2013
Contributions for the year to the defined benefit schemes totalled \u00a3nil (2021: \u00a3nil), and \u00a31 million was accrued at 31 December 2022 (2021: \u00a31 million).
The Group expects to contribute \u00a3nil million in the next financial year (the year to 31 December 2023), based upon the current funded status and the
expected return assumption for the next financial year.
2022
\u00a3m
2021
\u00a3m
Changes in the asset ceiling
Opening unrecognised asset due to asset ceiling at 1 January 1 1
Closing unrecognised asset due to the asset ceiling at 31 December 1 1
33(b): Income and expenses recognised in the income statement
The total pension charge to staff costs for all of the Group\u2019s defined benefit schemes for 2022 was \u00a3nil (2021: \u00a3nil).
Actuarial gains and losses and the effect of the limit to the pension asset under IAS 19 Employee Benefits have been reported in other comprehensive
income.
The cumulative amount of actuarial losses recognised in other comprehensive income is \u00a333 million (2021: \u00a333 million).
Assumptions used in the defined benefit schemes
The expected long-term rate of return on assets represents the Group\u2019s best estimate of the long-term return on the scheme assets and is generally
estimated by computing a weighted average return of the underlying long-term expected returns on the different asset classes, based on the target
asset allocations. The expected long-term return on assets is a long-term assumption that is generally expected to remain the same from one year
to the next unless there is a significant change in the target asset allocation, the fees and expenses paid by the plan or market conditions.
The Group, in consultation with its independent investment consultants and actuaries, determines the asset allocation targets based on its assessment
of business and financial conditions, demographic and actuarial data, funding characteristics and related risk factors. Other relevant factors, including
industry practices, long-term historical and prospective capital market returns, were also considered.
The scheme return objectives provide long-term measures for monitoring the investment performance against growth in the pension obligations.
The overall allocation is expected to help protect the plan\u2019s funded status while generating sufficiently stable real returns (net of inflation) to help cover
current and future benefit payments.
33: Post-employment benefits continued
33(b): Income and expenses recognised in the income statement continued
Both the equity and fixed income portions of the asset allocation use a combination of active and passive investment strategies and different
investment styles. The fixed income asset allocation consists of longer duration fixed income securities in order to help reduce plan exposure to
interest rate variation and to better correlate assets with obligations. The longer duration fixed income allocation is expected to help stabilise plan
contributions over the long run.
The weighted average duration of the defined benefit obligation is 13 years, based upon actual cash flows.
The following table presents the principal actuarial assumptions at the end of the reporting year:
31 December
2022
%
31 December
2021
%
Discount rate 5.0 1.8
Rate of increase in defined benefit funds 3.6 3.7
Inflation 3.1 3.3
The mortality assumptions used give the following life expectancy at 65:
Life expectancy at 65 for male
member currently
Life expectancy at 65 for female
member currently
Mortality table Aged 65 Aged 40 Aged 65 Aged 40
31 December 2022 S3PA Light 23.60 25.60 25.10 27.20
31 December 2021 S3PA Light 23.60 25.50 25.10 27.10
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, inflation rate and rate of mortality.
The sensitivities regarding the principal assumptions used to measure the defined benefit obligations are described below. Reasonably possible
changes at the reporting date to one of the principal actuarial assumptions, holding other assumptions constant, would have affected the defined
benefit obligation as follows:
31 December 2022 31 December 2021
Increase
\u00a3m
Decrease
\u00a3m
Increase
\u00a3m
Decrease
\u00a3m
Discount rate (0.1% movement) (0.3) 0.3 (0.7) 0.8
Inflation rate (0.1% movement) 0.2 (0.2) 0.3 (0.3)
Rate of mortality (increase by one year) 0.7 N/A 1.6 N/A
33(c): Scheme assets allocation
Scheme assets are stated at their fair values. Information on the composition of scheme assets is provided below:
31 December
2022
%
31 December
2021
%
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Equity securities 4 7 1 3
Debt securities 96 93 25 39
Total IAS 19 fair value of scheme assets 100 100 26 42
Equity securities have a quoted market price. Debt securities, which comprise the value of the bulk annuity policy, do not have a quoted market price.
The bulk annuity policy, where assets are matched to the value of liabilities, is included at values provided by the actuary in accordance with
relevant guidelines.
34: Master netting and similar agreements
The Group offsets financial assets and liabilities in the statement of financial position when it has a legally enforceable right to do so and intends to settle
on a net basis simultaneously. Currently, the only such offsetting within the Group relates to bank accounts, where in some circumstances a bank
account that is overdrawn is offset against a bank account that is not.
The following tables present information on the potential effect of offsetting arrangements after taking into consideration these types of agreements.
31 December 2022
Gross amounts
\u00a3m
Amounts
off set in the
statement of
financial
position
\u00a3m
Net amounts
reported in
the statement
of financial
position
\u00a3m
Financial assets
Cash and cash equivalents 1,84 4 (62) 1,782
Financial liabilities
Trade, other payables and other liabilities \u2013 amounts owed to banks 62 (62) \u2013
31 December 2021
Gross amounts
\u00a3m
Amounts
offset in the
statement of
financial
position
\u00a3m
Net amounts
reported in
the statement
of financial
position
\u00a3m
Financial assets
Cash and cash equivalents 2,146 (82) 2,064
Financial liabilities
Trade, other payables and other liabilities \u2013 amounts owed to banks 82 (82) \u2013
35: Contingent liabilities
The Group, in the ordinary course of business, enters into transactions that expose it to tax, legal, regulatory and business risks. The Group recognises
a provision when it has a present obligation as a result of past events, it is probable that a transfer of economic benefits will be required to settle the
obligation and a reliable estimate of the amount can be made (see note 28). Possible obligations and known liabilities where no reliable estimate can be
made or it is considered improbable that an outflow would result are reported as contingent liabilities in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets.
The Group routinely monitors and assesses contingent liabilities arising from matters such as business reviews, litigation, warranties and indemnities
relating to past acquisitions and disposals.
Contingent liabilities \u2013 pension transfer advice redress
The skilled person review covered British Steel Pension Scheme DB to DC pension transfer advice activity undertaken by Lighthouse advisers,
and a representative sample of other Lighthouse DB to DC pension transfer advice activity in the relevant period.
The skilled person review is largely complete, and the skilled person has recommended a potential review of a further sample of Lighthouse DB to DC
pension transfer cases not relating to the British Steel Pension Scheme, and this further sample will be reviewed under a Group-managed past business
review process with the skilled person acting as reviewer, as agreed with the FCA. Details of provisions for redress payable and payments made are
included within Provisions as set out in note 28. Until the review has finalised, uncertainty exists as to the number of cases where this will be required
and the value of total redress which will be payable. Subject to FCA confirmation, we anticipate that the skilled person review will conclude during 2023.
Customers have the legal right to challenge the result of the skilled person review in respect of their case via a complaint to the Financial Ombudsman
Service. Certain customers have made such complaints. The skilled person is independent from the Group and has run a robust process, which has
been overseen by the FCA. The Group does not consider any of the complaints to have merit and so the provision does not include any amounts in
relation to such complaints. In particular, there is no provision for obligations that may arise in the event that any complaints to the Financial
Ombudsman Service over the outcome of the skilled person review in respect of particular customers are upheld.
During 2020, the Group was also informed by the FCA that it is conducting an enforcement investigation into Lighthouse in respect of whether
Lighthouse has breached certain FCA requirements in connection with advising on and arranging DB to DC pension transfers in the period from
1 April 2015 to 30 April 2019. This investigation is now at an advanced stage and the Group\u2019s current view is that it is likely to conclude before the end
of the first half of the Group\u2019s current financial year on 30 June 2023. However, as the outcome of the enforcement investigation remains unknown,
the provision does not include any potential regulatory fines or penalties that could be imposed on Lighthouse in connection with DB to DC pension
transfers prior to the Group\u2019s acquisition of Lighthouse.
It is possible that further material costs of redress, regulatory fines or penalties may be incurred in relation to the skilled person review, additional past
business review and the BSPS Redress Scheme. Further customer redress costs may also be incurred for other potential unsuitable pension transfer
advice provided across the Group.
Any further redress costs, and any differences between the provision and final payment to be made for any unsuitable DB to DC pension transfer cases,
will be recognised as an expense or credit in the income statement.
35: Contingent liabilities continued
Tax
The tax authorities in the countries in which the Group operates routinely review historical transactions undertaken and tax law interpretations
made by the Group. The Group is committed to conducting its tax affairs in accordance with the tax legislation of the countries in which it operates.
All interpretations made by the Group are made with reference to the specific facts and circumstances of the transaction and the relevant legislation.
There are occasions where the Group\u2019s interpretation of tax law may be challenged by the tax authorities. The financial statements include provisions
that reflect the Group\u2019s assessment of liabilities which might reasonably be expected to materialise as part of their review. The Group is satisfied that
adequate provisions have been made to cater for the resolution of tax uncertainties and that the resources available to fund such potential settlements
are sufficient.
Due to the level of estimation required in determining tax provisions, amounts eventually payable may differ from the provision recognised.
Complaints, disputes and regulations
The Group is committed to treating customers fairly and supporting its customers in meeting their lifetime goals. During the normal course of business,
from time to time, the Group receives complaints and claims from customers including, but not limited to, complaints to the Financial Ombudsman
Service and legal proceedings related thereto, enters into commercial disputes with service providers, and is subject to discussions and reviews with
regulators. The costs, including legal costs, of these issues as they arise can be significant and, where appropriate, provisions have been established
in accordance with IAS 37.
36: Commitments
The Group has contractual commitments in respect of funding arrangements which will be payable in future periods. These commitments are not
recognised in the Group\u2019s statement of financial position.
37: Capital and financial risk management
37(a): Capital management
The Group manages its capital with a focus on capital efficiency and effective risk management. The capital management objectives are to maintain
the Group\u2019s ability to continue as a going concern while supporting the optimisation of return relative to the risks. The Group ensures that it can meet
its expected capital and financing needs at all times having regard to the Group\u2019s Business Plans, forecasts, strategic initiatives and the regulatory
requirements applicable to Group entities.
The Group\u2019s overall capital risk appetite is set with reference to the requirements of the relevant stakeholders and seeks to:
\u00b7 maintain sufficient, but not excessive, financial strength to support stakeholder requirements;
\u00b7 optimise debt to equity structure to enhance shareholder returns; and
\u00b7 retain financial flexibility by maintaining liquidity including unutilised committed credit lines.
The primary sources of capital used by the Group are equity shareholders\u2019 funds of \u00a31,548 million (31 December 2021: \u00a31,739 million) and subordinated
debt which was issued at \u00a3200 million in February 2018. Alternative resources are utilised where appropriate. Risk appetite has been defined for the
level of capital, liquidity and debt within the Group. The risk appetite includes long-term targets, early warning thresholds and risk appetite limits.
The dividend policy sets out the target dividend level in relation to profits.
The regulatory capital for the Group is assessed under Solvency II requirements.
37(a)(i): Regulatory capital (unaudited)
The Group is subject to Solvency II group supervision by the Prudential Regulation Authority. The Group is required to measure and monitor its capital
resources under the Solvency II regulatory regime.
The Group\u2019s UK life insurance undertaking is included in the Group solvency calculation on a Solvency II basis. Other regulated entities are included
in the Group solvency calculation according to the relevant sectoral rules. The Group\u2019s Solvency II surplus is the amount by which the Group\u2019s capital
on a Solvency II basis (own funds) exceeds the Solvency II capital requirement (solvency capital requirement or \u201cSCR\u201d).
The Group\u2019s Solvency II surplus is \u00a3820 million at 31 December 2022 (31 December 2021: \u00a31,030 million), representing a Solvency II ratio of 230%
(31 December 2021: 275%) calculated under the standard formula. The Solvency II regulatory position for the year ended 31 December 2022 allows
for the impact of the recommended final dividend payment of \u00a345 million (31 December 2021: \u00a362 million).
37: Capital and financial risk management continued
37(a): Capital management continued
The Solvency II results for the year ended 31 December 2022 (unaudited estimate) and 31 December 2021 were as follows:
31 December
2022
1
\u00a3m
31 December
2021
2
\u00a3m
Own funds 1,451 1,617
Solvency capital requirement 631 587
Solvency II surplus 820 1,030
Solvency II coverage ratio 230% 275%
1
Filing of annual regulatory reporting forms due by 19 May 2023.
2
As reported in the Group Solvency and Financial Condition Report for the year ended 31 December 2021.
The Group\u2019s own funds include the Quilter plc issued subordinated debt security which qualifies as capital under Solvency II. The composition of own
funds by tier is presented in the table below.
Group own funds
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Tier 1
1
1,249 1,412
Tier 2
2
202 205
Total Group Solvency II own funds 1,451 1,617
1
All Tier 1 capital is unrestricted for tiering purposes.
2
Comprises a Solvency II compliant subordinated debt security in the form of a Tier 2 bond, which was issued at \u00a3200 million in February 2018.
The Group\u2019s UK life insurance undertaking is also subject to Solvency II at entity level. Other regulated entities in the Group are subject to the locally
applicable entity-level capital requirements in the countries in which they operate. In addition, the Group\u2019s asset management and advice businesses
are subject to group supervision by the FCA under the UK Investment Firms Prudential Regime (\u201cIFPR\u201d).
The capital requirements for the Group and its regulated subsidiaries are reported and monitored through regular Capital Management Forum
meetings. Throughout 2022, the Group has complied with the regulatory requirements that apply at a consolidated level and Quilter\u2019s insurance
undertakings and investment firms have complied with the regulatory capital requirements that apply at entity level.
37(a)(ii): Loan covenants
Under the terms of the revolving credit facility agreement, the Group is required to comply with the following financial covenant: the ratio of total net
borrowings to consolidated equity shareholders\u2019 funds shall not exceed 0.5.
Note
31 December
2022
\u00a3m
31 December
2021
\u00a3m
Total external borrowings of the Company 30 200 199
Less: cash and cash equivalents of the Company (126) (503)
Total net external borrowings of the Company 74 (304)
Total shareholders\u2019 equity of the Group 1,548 1,739
Tier 2 bond
30 200 199
Total Group equity (including Tier 2 bond) 1,748 1,938
Ratio of Company net external borrowings to Group equity 0.042 - 0.157
The Group has complied with the covenant since the facility was created in 2018.
37: Capital and financial risk management continued 37(a): Capital management continued 37(a)(iii): Own Risk and Solvency Assessment (\u201cORSA\u201d) and Internal Capital Adequacy and Risk Assessment (\u201cICARA\u201d) The Group ORSA process is an ongoing cycle of risk and capital management processes which provides an overall assessment of the current and future risk profile of the Group and demonstrates the relationship between business strategy, risk appetite, risk profile and solvency needs. These assessments support strategic planning and risk-based decision making. The underlying ORSA processes cover the Group and consider how risks and solvency needs may evolve over the planning period. The ORSA includes stress and scenario tests, which are performed to assess the financial and operational resilience of the Group. The Group ORSA report is produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the Group. The ORSA report is submitted to the PRA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in the risk profile of the Group outside the usual reporting cycle. In addition to the Group ORSA process, an entity-level ORSA process is performed for Quilter Life & Pensions Limited. The ICARA process is similar to the ORSA process and is performed at entity level for certain UK investment firms within the Group. A Group ICARA report is also produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the IFPR prudential consolidation Group. The ICARA reports are submitted to the FCA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in risk profile outside the usual reporting cycle. The conclusions of the ORSA and ICARA processes are reviewed by management and the Board throughout the year. 37(b): Credit risk Overall exposure to credit risk Credit risk is the risk of adverse movements in credit spreads (relative to the reference yield curve), credit ratings or default rates leading to a deterioration in the level or volatility of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. This includes counterparty default risk, counterparty concentration risk and spread risk. The Group has established a Credit Risk Framework that includes a Credit Risk Policy and Credit Risk Appetite Statement. This framework applies to all activities where the shareholder is exposed to credit risk, either directly or indirectly, ensuring appropriate identification, measurement, management, monitoring and reporting of the Group\u2019s credit risk exposures. The credit risk arising from all exposures is mitigated by ensuring that the Group only enters into relationships with appropriately robust counterparties, adhering to the Group Credit Risk Policy. For each asset, consideration is given as to: \u00b7 the credit rating of the counterparty, which is used to derive the probability of default; \u00b7 the loss given default; \u00b7 the potential recovery which may be made in the event of default; \u00b7 the extent of any collateral that the Group has in respect of the exposures; and \u00b7 any second order risks that may arise where the Group has collateral against the credit risk exposure. The credit risk exposures of the Group are monitored regularly to ensure that counterparties remain creditworthy, that there is appropriate diversification of counterparties and that exposures are within approved limits. At 31 December 2022, the Group\u2019s material credit exposures were to financial institutions (primarily through the investment of shareholder funds), corporate entities (including external fund managers) and individuals (primarily through fund management trade settlement activities). There is no direct exposure to non-UK sovereign debt within the shareholder investments. The Group has no significant concentrations of credit risk exposure. Other credit risks The Group is exposed to financial adviser counterparty risk through a number of loans that it makes to its advisers and the payment of upfront commission on the sale of certain types of business. The risk of default by financial advisers is managed through monthly monitoring of loan and commission debt balances. The Group is also exposed to the risk of default by fund management groups in respect of settlements and rebates of fund management charges on collective investments held for the benefit of policyholders. This risk is managed through the due diligence process which is completed before entering into any relationship with a fund group. Amounts due to and from fund groups are monitored for prompt settlement and appropriate action is taken where settlement is not timely. Legal contracts are maintained where the Group enters into credit transactions with a counterparty.
37: Capital and financial risk management continued
37(b): Credit risk continued
Impact of credit risk on fair value
Due to the limited exposure that the Group has to credit risk, credit risk does not have a material impact on the fair value movement of financial
instruments for the year under review. The fair value movements on these instruments are mainly due to changes in market conditions.
Maximum exposure to credit risk
The Group\u2019s maximum exposure to credit risk does not differ from the carrying value disclosed in the relevant notes to the consolidated
financial statements.
Loans and advances subject to 12-month expected credit losses are \u00a334 million (31 December 2021: \u00a329 million) and other receivables subject to
lifetime expected credit losses are \u00a3204 million (31 December 2021: \u00a3252 million). Those balances represent the pool of counterparties that do not
require a rating. These counterparties individually generate no material credit exposure and this pool is highly diversified, monitored and subject
to limits.
Exposure arising from financial instruments not recognised on the statement of financial position is measured as the maximum amount that the Group
would have to pay, which may be significantly greater than the amount that would be recognised as a liability. The Group does not have any significant
exposure arising from items not recognised on the statement of financial position.
The table below represents the Group\u2019s exposure to credit risk from cash and cash equivalents.
Credit rating relating to cash and cash equivalents that are neither past due nor impaired
\u00a3m
31 December 2022 AAA AA A B <BBB Not rated
1
Carrying
value
Cash at amortised cost, subject to 12-month ECL \u2013 13 388 5 \u2013 264 670
Money market funds at FVTPL 1,112 \u2013 \u2013 \u2013 \u2013 \u2013 1,112
Total cash and cash equivalents 1,112 13 388 5 \u2013 264 1,782
Credit rating relating to cash and cash equivalents that are neither past due nor impaired
\u00a3m
31 December 2021 AAA AA A B <BBB Not rated
1
Carrying
value
Cash at amortised cost, subject to 12-month ECL \u2013 105 451 \u2013 3 289 848
Money market funds at FVTPL 1,216 \u2013 \u2013 \u2013 \u2013 \u2013 1,216
Total cash and cash equivalents 1,216 105 451 \u2013 3 289 2,064
1
Cash included in the consolidation of funds is not rated (see note 24(a)).
Impairment allowance
Assets that are measured and classified at amortised cost are monitored for any expected credit losses (\u201cECL\u201d) on either a 12-month or lifetime ECL
model. The majority of such assets within the Group are measured on the lifetime ECL model, with the exception of some specific loans that are on the
12-month ECL model.
Impairment allowance \u00a3m
Balance at 1 January 2021 (0.8)
Change due to change in counterparty balance (0.4)
31 December 2021 (1.2)
Change due to change in counterparty balance 0.1
31 December 2022 (1.1)
37: Capital and financial risk management continued 37(c): Market risk Market risk is the risk of an adverse change in the level or volatility of market prices of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. Market risk arises from changes in equity, bond and property prices, interest rates and foreign exchange rates. Market risk arises differently across the Group\u2019s businesses depending on the types of financial assets and liabilities held. The Group recognises that climate change can contribute to market risk. The Group has a market risk policy which sets out the risk management framework, permitted and prohibited market risk exposures, maximum limits on market risk exposures, management information and stress testing requirements which are used to monitor and manage market risk. The policy is cascaded to the businesses across the Group, and Group-level governance and monitoring processes provide oversight of the management of market risk by the individual businesses. The Group does not undertake any principal trading for its own account. The Group\u2019s revenue is however affected by the value of assets under management and consequently it has exposure to equity market levels and economic conditions. Scenario testing is undertaken to test the resilience of the business to severe but plausible events, including assessment of the potential implications of climate-related risks and opportunities, and to assist in the identification of management actions. 37(c)(i): Equity and property price risk In accordance with the market risk policy, the Group does not generally invest shareholder assets in equity or property, or related collective investments, except where the exposure arises due to: \u00b7 mismatches between unitised fund assets and liabilities. These mismatches are permitted, subject to maximum limits, to avoid excessive dealing costs; and \u00b7 seed capital investments. Seed capital is invested within new unitised or other funds within the Group at the time when these funds are launched. The seed capital is then withdrawn from the funds as policyholders and customers invest in the funds. The above exposures are not material to the Group. The Group derives fees (e.g. annual management charges) and incurs costs (e.g. outsourced service provider and adviser fund-based renewal commissions) which are linked to the performance of the underlying assets. Therefore, future earnings will be affected by equity and property market performance. Equity and property price sensitivity testing A movement in equity and property prices would impact the fee income that is based on the market value of the investments held by or on behalf of customers. The sensitivity is applied as an instantaneous shock to equity and property prices at the start of the year. The sensitivity analysis is not limited to the unit-linked business and therefore reflects the sensitivity of the Group as a whole. Impac t on profit after tax and shareholders \u2019 equit y 31 December 2022 \u00a3m 31 December 2021 \u00a3m Impact of 10% increase in equity and property prices 30 34 Impact of 10% decrease in equity and property prices (30) (34) 37(c)(ii): Interest rate risk Interest rate risk arises primarily from bank balances held with financial institutions. A small amount of the Group\u2019s assets is held in fixed interest UK Government bonds, which are exposed to fluctuations in interest rates. Fixed interest UK Government bonds are mainly held to match liabilities by duration and so the exposure to interest rate risk is not material. A rise in interest rates would also cause an immediate fall in the value of investments in fixed income securities within clients\u2019 investment funds, resulting in a fall in fund-based revenues. Conversely, a reduction in interest rates would cause a rise in the value of investments in fixed income securities within clients\u2019 investment funds. It would also reduce the interest rate earned on bank balances and could potentially result in the Group incurring interest charges on these balances, if interest rates become negative. Exposure of the income statement and statement of financial position to interest rates are summarised below.
37: Capital and financial risk management continued
37(c): Market risk continued
Interest rate sensitivity testing
The impact of an increase and decrease in market interest rates of 1% is tested (e.g. if the current interest rate is 5%, the test allows for the effects of an
instantaneous change to 4% and 6% from the start of the year). The test allows consistently for similar changes in investment returns and movements
in the market value of any fixed interest assets backing the liabilities. The sensitivity of profit to changes in interest rates is provided.
Impac t on profit after tax and shareholders \u2019 equit y
Year ended
31 December
2022
\u00a3m
Year ended
31 December
2021
\u00a3m
Impact of 1% increase in interest rates 7 11
Impact of 1% decrease in interest rates (7) \u2013
37(c)(iii): Currency translation risk
Currency translation risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange
rates. The Group\u2019s functional currency is pounds sterling, which accounts for the majority of the Group\u2019s transactions. The Group has minor exposure
to Euros, through the Group\u2019s Irish subsidiary and to the South African Rand, due to the listing on the Johannesburg Stock Exchange and the payment
of a proportion of shareholder dividends in Rand. During 2022, the Group had limited exposure to foreign exchange risk in respect of other currencies
due its non-UK operations and foreign currency transactions.
37(d): Liquidity risk
Liquidity risk is the risk that there are insufficient assets or that assets cannot be realised in order to settle financial obligations as they fall due or
that market conditions preclude the ability of the Group to trade in illiquid assets in order to maintain its asset and liability matching (\u201cALM\u201d) profile.
The Group manages liquidity on a daily basis through:
\u00b7 maintaining adequate high-quality liquid assets and banking facilities, the level of which is informed through appropriate liquidity stress testing;
\u00b7 continuously monitoring forecast and actual cash flows; and
\u00b7 monitoring a number of key risk indicators to help in the identification of a liquidity stress.
Individual businesses maintain and manage their local liquidity requirements according to their business needs within the overall Group Liquidity Risk
Framework that includes a Group Liquidity Risk Policy and Group Liquidity Risk Appetite Statement. The Group framework is applied consistently across
all businesses in the Group to identify, manage, measure, monitor and report on all liquidity risks that have a material impact on liquidity levels. This
framework considers both short-term liquidity and cash management considerations and longer-term funding risk considerations.
Liquidity is monitored centrally by Group Treasury, with management actions taken at a business level to ensure each business has sufficient liquidity
to cover its minimum liquidity requirement, with an appropriate buffer set in line with the Group Risk Appetite Statement.
Throughout the ongoing Ukraine crisis and market volatility during 2022, Quilter plc and its subsidiaries have operated above their individual liquidity
targets and there were no material liquidity stresses identified over this period. Daily liquidity monitoring continues across the Group to enable timely
identification of any emerging issues.
The Group maintains contingency funding arrangements to provide liquidity support to businesses in the event of liquidity stresses that are greater
than their risk appetite. Contingency Funding Plans are in place for each individual business in order to set out the approach and management actions
that would be taken should liquidity levels fall below minimum liquidity requirements. The plans undergo an annual review and testing cycle to ensure
they are fit for purpose and can be relied upon during a liquidity stress.
Information on the nature of the investments and securities held is given in note 17.
The Group has a \u00a3125 million five-year Revolving Credit Facility with a five-bank club that provides a form of contingency liquidity for the Group.
No drawdown on this facility has been made since inception. The Group has exercised the option to extend the facility for a further two-year period,
to February 2025, and has continued to meet all the covenants attached to its financing arrangements.
The financing arrangements are considered sufficient to maintain the target liquidity levels of the Group and offer coverage for appropriate stress
scenarios identified within the liquidity stress testing undertaken across the Group.
Further details, together with information on the Group\u2019s borrowed funds, are given in note 30.
The Group does not have material liquidity exposure to special purpose entities or investment funds.
37: Capital and financial risk management continued
37(e): Insurance risk
37(e)(i): Overview
The definition of insurance risk set out in the policy covers risks arising under Quilter\u2019s unit-linked investment contracts which do not meet the IFRS
definition of insurance contracts.
The Group\u2019s Enterprise Risk Management Framework defines insurance risk as the risk of a reduction in Solvency II own funds from adverse experience
or change in assumptions relating to claims, policyholder behaviour, mortality, longevity or expenses, resulting in an adverse impact to earnings or
reduced solvency.
The Group has implemented an insurance risk policy which sets out the Group\u2019s requirements for the management, measurement, monitoring
and reporting of insurance risks. The Group has implemented the Technical Provisions Standard to support the insurance risk policy.
The sensitivity of the Group\u2019s earnings and capital position to insurance risks is monitored through the Group\u2019s capital management processes.
The Group manages its insurance risks through the following mechanisms:
\u00b7 Management of expense levels relative to approved budgets.
\u00b7 Analysis and monitoring of experience relative to the assumptions used to determine technical provisions.
Persistency
Persistency risk is the risk that the level of surrenders or withdrawals on products offered by Quilter Life & Pensions Limited occur at levels that are
different to the levels assumed in the determination of technical provisions. Persistency statistics are monitored monthly and a detailed persistency
analysis at a product group level is carried out on an annual basis. Management actions may be triggered if persistency statistics indicate significant
adverse movement or emerging trends in experience.
Expenses
Expense risk is the risk that actual expenses and expense inflation differ from the levels assumed in the determination of technical provisions.
Expense levels are monitored on a quarterly basis against budgets and forecasts. Expense drivers are used to allocate expenses to entities and
products. Some product structures include maintenance charges. These charges are reviewed annually in light of changes in maintenance expense
levels and the market rate of inflation. This review may result in changes in charge levels.
Mortality
Mortality risk is not material as the Group does not provide material mortality insurance on its products and mortality benefits are reinsured.
37(e)(ii): Sensitivity analysis
Sensitivity analysis has been performed by applying the following parameters to the statement of financial position and income statement for 2021
and 2022. Interest rate and equity and property price sensitivities are included within the Group market sensitivities above.
Expenses
The increase in expenses is assumed to apply to the costs associated with the maintenance and acquisition of contracts within the unit-linked business.
It is assumed that these expenses are increased by 10% from the start of the year, so is applied as an expense shock rather than a gradual increase.
The only administrative expenses that are deferrable are sales bonuses but as new business volumes are unchanged in this sensitivity, sales bonuses
and the associated deferrals have not been increased. Administrative expenses have been allocated equally between life and pensions.
An increase in expenses of 10% would have decreased profit by \u00a36 million after tax (2021: \u00a36 million).
37(f): Operational risk
Operational risk is the risk of loss arising from inadequate or failed internal processes, or from personnel and systems, or from external events,
resulting in an adverse impact to earnings or reduced solvency. Operational risk includes all risks resulting from operational activities, excluding
the risks already described above and excluding strategic risks and risks resulting from being part of a wider group of companies.
Operational risk includes the effects of failure of administration processes, IT and Information Security maintenance and development processes,
investment processes (including settlements with fund managers, fund pricing and matching and dealing), people and HR processes, product
development and management processes, legal risks (e.g. risk of inadequate legal contracts with third parties), change delivery risks (including poorly
managed responses to regulatory change), physical and certain transitional financial risks arising from climate change, risks relating to the relationship
with third-party suppliers and outsourcers, and the consequences of financial crime and business interruption events.
In accordance with Group policies, management has primary responsibility for the identification, measurement, assessment, management
and monitoring of risks, and the escalation and reporting on issues to Executive Management.
The Group\u2019s Executive Management has responsibility for implementing the Group Operational Risk Framework and for the development
and implementation of action plans designed to manage risk levels within acceptable tolerances and to resolve issues identified.
37: Capital and financial risk management continued 37(g): Contractual maturity analysis Investment contract policyholders have the option to terminate or transfer their contracts at any time and to receive the surrender or transfer value of their policies, and these liabilities are therefore classified as having a maturity of less than three months. Although these liabilities are payable on demand, the Group does not expect that all liabilities will be settled within a short time period. 38: Fiduciary activities The Group provides custody, trustee, corporate administration and investment management and advisory services to external parties that involve the Group making allocation, purchase and sales decisions in relation to a wide range of financial instruments. Those assets that are held in a fiduciary capacity are not included in these financial statements. Some of these arrangements involve the Group accepting targets for benchmark levels of returns for the assets under the Group\u2019s care. These services give rise to the risk that the Group may be accused of misadministration or underperformance. Certain Quilter investment firms hold client money and other assets on behalf of clients and related activities are subject to the rules set out in the FCA\u2019s Client Assets Sourcebook (\u201cCASS\u201d). The Group is not beneficially entitled to those assets and therefore neither the assets nor the related amounts due to clients are recognised on the Group balance sheet. 39: Related party transactions In the normal course of business, the Group enters into transactions with related parties. Loans to related parties are conducted on an arm\u2019s length basis and are not material to the Group\u2019s results. There were no transactions with related parties during the current year or the prior year which had a material effect on the results or financial position of the Group. 39(a): Transactions with key management personnel, remuneration and other compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group. Details of the compensation paid to the Board of Directors as well as their shareholdings in the Company are disclosed in the Directors\u2019 Remuneration Report. 39(a)(i): Key management personnel compensation 31 December 2022 \u00a3\u2019000 31 December 2021 \u00a3\u2019000 Salaries and other short-term employee benefits 5,739 7,627 Post-employment benefits 25 43 Share-based payments 3,372 2,987 Total compensation of key management personnel 9,136 10,657 39(a)(ii): Key management personnel transactions Key management personnel and members of their close family have undertaken transactions with the Group in the normal course of business. The Group\u2019s products are available to all employees of the Group on preferential staff terms, the impact of which is immaterial to the Group\u2019s financial statements. During the year ended 31 December 2022, key management personnel and their close family members contributed \u00a32 million (2021: \u00a31 million) to Group pensions and investments (in both internal and external funds). The total value of investments in Group pensions and investment products by key management personnel serving at any point during the year and their close family members was \u00a312 million at the end of the year (2021: \u00a312 million). Qualifying third-party indemnity provisions (as defined by section 234 of the Companies Act 2006) were in force during the course of the year ended 31 December 2022 for the benefit of the then Directors and, at the date of this report, are in force for the benefit of the Directors in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers and office. In addition, the Company maintains Directors\u2019 and Officers\u2019 Liability Insurance which provides appropriate cover for legal action that may be brought against its Directors and Officers. 39(b): Associates In the current and prior year, IT services were provided by 360 Dot Net Limited, an associate of the Group. The relevant transactions had no material impact on the Group\u2019s financial statements. 39(c): Other related parties Details of the Group\u2019s staff pension schemes are provided in note 33. Transactions made between the Group and the Group\u2019s staff pension schemes are made in the normal course of business. 40: Events after the reporting date Note 13 provides information on the Group\u2019s final dividend in respect of 2022. In January 2023, the Company issued the \u00a3200,000,000 8.625% Fixed Rate Reset Subordinated Notes (due April 2033) and received net cash proceeds of \u00a3197 million. The Notes are now listed and regulated under the terms of the London Stock Exchange. On 28 February 2023, the Company repaid the existing \u00a3200,000,000 4.478% Fixed Rate Reset Subordinated Notes (due February 2028).", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-422": { "value": "Quilter plc (the \u201cParent Company\u201d), a public limited company incorporated in England and Wales and domiciled in the United Kingdom (\u201cUK\u201d), together ", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-10": { "value": "Quilter plc", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-11": { "value": "public limited company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-12": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-13": { "value": "United Kingdom", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-14": { "value": "offers investment and wealth management services, long-term savings and financial advice through its subsidiaries and associates primarily in the UK.", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-15": { "value": "Senator House, 85 Queen Victoria Street, London, EC4V 4AB", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-426": { "value": "1: Basis of preparation The consolidated financial statements of Quilter plc for the year ended 31 December 2022 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. These consolidated financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments, and are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates. The separate financial statements of the Company are on pages 196 to 203. The Company financial statements are prepared in accordance with the Group\u2019s accounting policies, other than for investments in subsidiaries, which are stated at cost less impairments in accordance with IAS 27 Separate Financial Statements. Going concern The Directors have considered the resilience of the Group, its current financial position, the principal risks facing the business and the effectiveness of any mitigating strategies which are or could be applied. This included an assessment of capital and liquidity over a three-year planning period. As part of the going concern assessment, the Group took into consideration the current position of the UK economy including the impact of inflation and increases in the cost of living. The Group also took into consideration risks related to climate change. Based on the assessment, the Directors believe that both the Group and Quilter plc as the Parent Company, have sufficient financial resources to continue in business for a period of at least 12 months from the date of approval of these financial statements and continue to adopt the going concern basis in preparing the Group and Parent Company financial statements. Further information is contained in the viability statement and going concern section of the Annual Report. Basis of consolidation The Group\u2019s consolidated financial statements incorporate the assets, liabilities and the results of the Company and its subsidiaries. Subsidiaries are those entities, including investment funds, controlled by the Group. More information on how the Group assesses whether it has control over an entity is provided in accounting policy 5(a). Subsidiaries are consolidated from the date the Group obtains control and are excluded from consolidation from the date the Group loses control. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with Group policies. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between Group companies are eliminated on consolidation. Liquidity analysis of the statement of financial position The Group\u2019s statement of financial position is in order of liquidity as is permitted by IAS 1 Presentation of Financial Statements. For each asset and liability line item, those amounts expected to be recovered or settled more than 12 months after the reporting date are disclosed separately in the notes to the consolidated financial statements. Critical accounting estimates and judgements The preparation of financial statements requires management to exercise judgement in applying the Group\u2019s significant accounting policies and make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. The Board Audit Committee reviews these areas of judgement and estimates and the appropriateness of significant accounting policies adopted in the preparation of these financial statements. Critical accounting judgements The Group\u2019s critical accounting judgements are detailed below and are those that management makes when applying the significant accounting policies and that have the most effect on the net profit and net assets recognised in the Group\u2019s financial statements. Recognition of provisions following the sale of Quilter International Management exercised significant judgement in determining the accounting treatment for a number of provisions related to business activities to separate the business from the Group in respect of the sale of Quilter International. Significant judgement was required to assess whether the costs were directly attributable and incremental to the sale and whether a legal or constructive obligation existed in order to recognise the provisions. See note 28 for further details. 1: Basis of preparation continued Critical accounting judgements continued Recognition of insurance recovery asset in respect of Lighthouse defined benefit pension advice For Lighthouse defined benefit (\u201cDB\u201d) to defined contribution (\u201cDC\u201d) pension transfer advice provided, management has previously applied judgement in order to determine whether an asset can be reasonably estimated, and in respect of the measurement of such an asset, in relation to an insurance recovery under Lighthouse\u2019s professional indemnity policies (\u201cPI Policies\u201d). During 2022, the insurers confirmed coverage up to the PI Policies\u2019 limit of indemnity of \u00a315 million for these legal liabilities. These obligations to the Group were settled in full during 2022. As a result the recognition and measurement of an insurance asset is no longer considered a critical accounting judgement. Critical accounting estimates The Group\u2019s critical accounting estimates involve the most complex or subjective assessments and assumptions, which have a significant risk of resulting in material adjustment to the net carrying amounts of assets and liabilities within the next financial year. Management uses its knowledge of current facts and circumstances and applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting standards and guidance to make predictions about future actions and events. Actual results may differ from those estimates. Provision for the cost of defined benefit pension advice An estimate was determined for unsuitable pension advice related to schemes other than those concluded as part of the skilled person review, using a methodology which takes account of recent experience of redress payments calculated by an independent expert and applying a proportion of transfer value to determine redress payable as an indicative provision. The calculations are based upon FCA guidelines and modelling performed, and factors including pension transfer value, date of retirement, discount rate and inflation rate assumptions. Measurement of deferred tax The estimation of future taxable profits is performed as part of the annual business planning process, and is based on estimated levels of AuMA, which are subject to a large number of factors including global stock market movements, related movements in foreign exchange rates and net client cash flows, together with estimates of expenses and other charges. The Business Plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised. In general, the Group assesses the recoverability of shareholder assets based on estimated taxable profits over a three-year planning horizon and assesses policyholder assets based on estimated investment growth over the medium term. Management has reassessed the sensitivity of the recoverability of deferred tax assets based on the latest forecast cash flows. See note 29 for further details. Other principal estimates The Group\u2019s assessment of goodwill and intangible assets for impairment uses the latest cash flow forecasts from the Group\u2019s three-year Business Plan. These forecasts include estimates relating to equity market levels and growth in AuMA in future periods, together with levels of new business growth, net client cash flow, revenue margins, and future expenses and discount rates (see note 14). These forecasts take account of the climate-related risks and other responsible business considerations. Management does not consider that the use of these estimates has a significant risk of causing a material adjustment to the carrying amount of the assets within the next financial year. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-483": { "value": "Going concern The Directors have considered the resilience of the Group, its current financial position, the principal risks facing the business and the effectiveness of any mitigating strategies which are or could be applied. This included an assessment of capital and liquidity over a three-year planning period. As part of the going concern assessment, the Group took into consideration the current position of the UK economy including the impact of inflation and increases in the cost of living. The Group also took into consideration risks related to climate change. Based on the assessment, the Directors believe that both the Group and Quilter plc as the Parent Company, have sufficient financial resources to continue in business for a period of at least 12 months from the date of approval of these financial statements and continue to adopt the going concern basis in preparing the Group and Parent Company financial statements. Further information is contained in the viability statement and going concern section of the Annual Report. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-484": { "value": "Basis of consolidation The Group\u2019s consolidated financial statements incorporate the assets, liabilities and the results of the Company and its subsidiaries. Subsidiaries are those entities, including investment funds, controlled by the Group. More information on how the Group assesses whether it has control over an entity is provided in accounting policy 5(a). Subsidiaries are consolidated from the date the Group obtains control and are excluded from consolidation from the date the Group loses control. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with Group policies. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between Group companies are eliminated on consolidation. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-485": { "value": "Liquidity analysis of the statement of financial position The Group\u2019s statement of financial position is in order of liquidity as is permitted by IAS 1 Presentation of Financial Statements. For each asset and liability line item, those amounts expected to be recovered or settled more than 12 months after the reporting date are disclosed separately in the notes to the consolidated financial statements. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForLiquidityAnalysisOfTheStatementOfFinancialPosition", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-486": { "value": "Critical accounting estimates and judgements The preparation of financial statements requires management to exercise judgement in applying the Group\u2019s significant accounting policies and make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. The Board Audit Committee reviews these areas of judgement and estimates and the appropriateness of significant accounting policies adopted in the preparation of these financial statements. Critical accounting judgements The Group\u2019s critical accounting judgements are detailed below and are those that management makes when applying the significant accounting policies and that have the most effect on the net profit and net assets recognised in the Group\u2019s financial statements. Recognition of provisions following the sale of Quilter International Management exercised significant judgement in determining the accounting treatment for a number of provisions related to business activities to separate the business from the Group in respect of the sale of Quilter International. Significant judgement was required to assess whether the costs were directly attributable and incremental to the sale and whether a legal or constructive obligation existed in order to recognise the provisions. See note 28 for further details. Critical accounting judgements continued Recognition of insurance recovery asset in respect of Lighthouse defined benefit pension advice For Lighthouse defined benefit (\u201cDB\u201d) to defined contribution (\u201cDC\u201d) pension transfer advice provided, management has previously applied judgement in order to determine whether an asset can be reasonably estimated, and in respect of the measurement of such an asset, in relation to an insurance recovery under Lighthouse\u2019s professional indemnity policies (\u201cPI Policies\u201d). During 2022, the insurers confirmed coverage up to the PI Policies\u2019 limit of indemnity of \u00a315 million for these legal liabilities. These obligations to the Group were settled in full during 2022. As a result the recognition and measurement of an insurance asset is no longer considered a critical accounting judgement. Critical accounting estimates The Group\u2019s critical accounting estimates involve the most complex or subjective assessments and assumptions, which have a significant risk of resulting in material adjustment to the net carrying amounts of assets and liabilities within the next financial year. Management uses its knowledge of current facts and circumstances and applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting standards and guidance to make predictions about future actions and events. Actual results may differ from those estimates. Provision for the cost of defined benefit pension advice An estimate was determined for unsuitable pension advice related to schemes other than those concluded as part of the skilled person review, using a methodology which takes account of recent experience of redress payments calculated by an independent expert and applying a proportion of transfer value to determine redress payable as an indicative provision. The calculations are based upon FCA guidelines and modelling performed, and factors including pension transfer value, date of retirement, discount rate and inflation rate assumptions. Measurement of deferred tax The estimation of future taxable profits is performed as part of the annual business planning process, and is based on estimated levels of AuMA, which are subject to a large number of factors including global stock market movements, related movements in foreign exchange rates and net client cash flows, together with estimates of expenses and other charges. The Business Plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised. In general, the Group assesses the recoverability of shareholder assets based on estimated taxable profits over a three-year planning horizon and assesses policyholder assets based on estimated investment growth over the medium term. Management has reassessed the sensitivity of the recoverability of deferred tax assets based on the latest forecast cash flows. See note 29 for further details. Other principal estimates The Group\u2019s assessment of goodwill and intangible assets for impairment uses the latest cash flow forecasts from the Group\u2019s three-year Business Plan. These forecasts include estimates relating to equity market levels and growth in AuMA in future periods, together with levels of new business growth, net client cash flow, revenue margins, and future expenses and discount rates (see note 14). These forecasts take account of the climate-related risks and other responsible business considerations. Management does not consider that the use of these estimates has a significant risk of causing a material adjustment to the carrying amount of the assets within the next financial year. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-427": { "value": "2: New standards, amendments to standards, and interpretations adopted by the Group There were no new standards or interpretations which became effective from 1 January 2022. The following amendments to accounting standards became applicable for the current reporting year, with no material impact on the Group\u2019s consolidated results, financial position or disclosures: Adopted by the Group from Amendments to standards 1 January 2022 Amendments to IAS 16 Property, Plant and Equipment \u2013 Proceeds before Intended Use 1 January 2022 Annual Improvements 2018-2020 Cycle 1 January 2022 Amendments to IFRS 3 References to the Conceptual Framework 1 January 2022 Amendments to IAS 37 Onerous Contracts \u2013 Cost of Fulfilling a Contract ", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-428": { "value": "3: Future standards, amendments to standards, and interpretations not early-adopted in these financial statements Certain new standards, interpretations and amendments to existing standards have been published by the International Accounting Standards Board (\u201cIASB\u201d) that are mandatory for the Group\u2019s annual accounting periods beginning on or after 1 January 2022. The Group has not early adopted these standards, interpretations and amendments, nor does the Group expect these to have a material impact on the Group\u2019s consolidated financial statements. \u2013 IFRS 17 Insurance contracts The IASB issued IFRS 17 Insurance Contracts in May 2017 and Amendments to IFRS 17 in June 2020. IFRS 17 will replace its interim predecessor, IFRS 4 Insurance Contracts. IFRS 17 is a comprehensive standard which provides a single accounting model for all insurance contracts. IFRS 17 will replace a wide range of different accounting practices previously permitted, improving transparency and enabling investors and regulators to understand and compare the financial position and performance of an insurer, irrespective of where they are based geographically. The standard, including the June 2020 amendments, was endorsed by the UK Endorsement Board in May 2022. The effective date of IFRS 17 is 1 January 2023. Following disposals of Quilter Life Assurance (\u201cQLA\u201d) and Quilter International in 2019 and 2021, the Group has assessed its remaining contracts with policyholders. On the basis of this assessment, it was determined that there are no contracts that will be accounted for under IFRS 17. ", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-429": { "value": "4: Significant changes in the year Capital return, Share Consolidation and changes to comparative amounts On 12 May 2022, shareholder approval was received at the General Meeting, for a capital return of \u00a3328 million (20 pence per share) to shareholders of Quilter plc by way of a B Share Scheme. The capital return represented the net surplus proceeds from the sale of Quilter International after retaining funds for planned Business Simplification and selected revenue enhancing investments. The B shares were created out of the Company\u2019s merger reserve, which had a balance of \u00a31,687 million prior to the share creation. To maintain comparability of shareholder metrics before and after the capital return, the scheme was accompanied by a Share Consolidation (see note 25(a)). The weighted average number of shares used to calculate the comparative EPS metrics has not been adjusted for the impact of the Share Consolidation due to the associated reduction in resources as a result of the return of capital. The capital return reduced the Group\u2019s IFRS net assets and Solvency II own funds by \u00a3328 million, comprised of \u00a3331 million cash paid upon redemption of the B shares, offset by a foreign exchange gain of \u00a33 million on South African Rand held between the date the capital return was announced and the redemption of the B shares for the JSE portion of the capital return. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-424": { "value": "5: Significant accounting policies The Group\u2019s significant accounting policies are described below. There have been no changes to the Group\u2019s significant accounting policies as a result of changes in accounting standards during the year. The accounting policies disclosed in these notes have been consistently applied throughout the current and prior financial year. 5(a): Group accounting Subsidiaries Subsidiary undertakings are those entities (investees) controlled by the Group. The Group controls an investee if, and only if, the Group has all of the following three elements of control: \u00b7 power over the investee; \u00b7 exposure or rights to variable returns from its involvement with the investee; and \u00b7 the ability to affect those returns through its power over the investee. For operating entities, this usually arises with a shareholding in the entity of 50% or more. The Group also consolidates certain of its interests in open-ended investment companies (\u201cOEICs\u201d), unit trusts, mutual funds and similar investment vehicles (collectively \u201cinvestment funds\u201d). Where, as is often the case with investment funds, voting or similar rights are not the dominant factor in deciding who controls the investee, other factors are considered in the control assessment. These are described in more detail below. The Group continually assesses any changes to facts and circumstances to determine, in the context of the three elements of control listed above, whether it still controls the investee and is therefore required to consolidate it. Associates Associates are entities over which the Group has significant influence, but not control or joint control, through its participation in the entity\u2019s financial and operating policy decisions. Significant influence is generally demonstrated by the Group holding between 20% and 50% of the voting rights. Voting rights are not the only consideration, all other relevant factors, contractual or otherwise, are assessed in determining whether the Group has the ability to exercise significant influence. The results, assets and liabilities of associates, other than those that are measured at FVTPL (see below) are incorporated into these consolidated financial statements using the equity method of accounting from the date that significant influence commences until the date it ends. Under this method, the cost of the investment in an associate together with the Group\u2019s share of that entity\u2019s post-acquisition changes to shareholders\u2019 funds is included as an asset in the consolidated statement of financial position. The cost includes goodwill recognised on acquisition. Subsequent to initial recognition, the consolidated financial statements include the Group\u2019s share of the profit or loss and other comprehensive income of the associate until the date on which significant influence ceases. Where a Group entity transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate. Unrealised losses are eliminated in the same way but only to the extent that there is no evidence of impairment. Investments in associates that are held with a view to subsequent resale are accounted for as non-current assets held for sale. Where the Group has an investment in an associate, a portion of which is held by, or is held indirectly through a unit trust or similar entity, including through unit-linked funds, that portion of the investment is measured at F VTPL. The Group has classified one entity, 360 Dot Net Limited, as an associate in the current and prior year. 5: Significant accounting policies continued 5(a): Group accounting continued Investment funds The Group invests in a wide range of investment funds such as OEICs and unit trusts generally in respect of its unit-linked investment contracts where investments are made to match the investment choices of its clients. For some of these funds, it also acts as fund manager. These funds invest predominantly in equities, bonds, cash and cash equivalents. The Group holds interests in these investment funds mainly through the receipt of fund management fees, in the case where the Group acts as fund manager, which provide a variable return based on the value of the funds under management and other criteria, and in the case of third-party funds where fund performance has an impact on fund-based fees within unit-linked investment contracts and other similar client investment products. Where the Group acts as fund manager, it may also hold investments in the underlying funds, through acquiring units or shares. Where these investments are held in unit-linked funds, the Group has a secondary exposure to variable returns through the management fees that it deducts from unit-linked policyholders\u2019 account balances. The Group\u2019s percentage ownership can fluctuate from day-to-day according to the Group\u2019s participation in them as clients\u2019 underlying investment choices change. When assessing the control of investment funds, the Group considers the purpose and design of the fund, the scope of its decision-making authority, including its ability to direct relevant activities and to govern the operations of a fund so as to obtain variable returns from that fund and its ability to use its power to affect these returns, both from the perspective of an investor and an asset manager. In addition, the Group assesses rights held by other parties including substantive removal (\u201ckick-out\u201d) rights that may affect the Group\u2019s ability to direct relevant activities. On consolidation, the interests of parties other than the Group are classified as a liability in the Group\u2019s statement of financial position and are described as \u201cthird-party interests in consolidated funds\u201d. Such interests are not recorded as non-controlling interests (\u201cNCIs\u201d) as they meet the liability classification requirement set out in IAS 32 Financial Instruments: Presentation. These liabilities are regarded as current, as they are repayable on demand, although it is not expected that they will be settled in a short time period. Business combinations The Group is required to use the acquisition method of accounting for business combinations. Business combinations are accounted for at the date that control is achieved (the acquisition date). The cost of a business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Deferred and contingent consideration relating to acquisitions is recognised as a liability on the date of acquisition. The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts. Where provisional amounts are reported, these are adjusted during the measurement period which extends up to a maximum of 12 months from the acquisition date. Additional assets or liabilities may also be recognised during this period, to reflect any new information obtained about the facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the identifiable net assets of the acquired entity at the date of acquisition. Other acquisition-related costs, not forming part of the cost of acquisition, are expensed as incurred. Upon disposal, the Group derecognises a subsidiary or disposal group on the date on which control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal. The difference between the proceeds from the disposal of a subsidiary undertaking and its carrying amount as at the date of disposal, including the cumulative amount of any related exchange differences that are recognised in the foreign currency translation reserve, is recognised in the consolidated income statement as the gain or loss on disposal of the subsidiary undertaking. Common control combinations Merger accounting is used by the Group for common control combinations, which are transactions between entities that are ultimately controlled by the same party or parties. This method treats the merged entities as if they had been combined throughout the current and comparative accounting periods. Merger accounting principles for these combinations result in the recognition of a merger reserve in the consolidated statement of financial position, being the difference between the nominal value of any new shares issued by the Parent Company for the acquisition of the shares of the subsidiary and the subsidiary\u2019s Net Asset Value. Such transactions attract merger relief under section 612 of the Companies Act 2006. 5(b): Fair value measurement The Group uses fair value to measure the majority of its assets and liabilities. Fair value is a market-based measure and is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For a financial instrument, the best evidence of fair value at initial recognition is normally the transaction price, which represents the fair value of the consideration given or received. Where observable market prices in an active market, such as bid or offer (ask) prices are unavailable, fair value is measured using valuation techniques based on the assumptions that market participants would use when pricing the asset or liability. If an asset or a liability measured at fair value has a bid or an offer price, the price within the bid-offer spread that is most representative of fair value is used as the basis of the fair value measurement. 5: Significant accounting policies continued 5(b): Fair value measurement continued The quality of the fair value measurement for financial instruments is disclosed by way of the fair value hierarchy, whereby Level 1 represents a quoted market price for identical financial assets and liabilities, Level 2 financial assets and liabilities are valued using inputs other than quoted prices in active markets included in Level 1, either directly or indirectly and Level 3 whereby financial assets and liabilities are valued using valuation techniques where one or more significant inputs are unobservable. Classifying financial instruments into the three levels outlined above provides an indication about the reliability of inputs used in determining fair value. More information is provided in note 20. 5(c): Product classification The Group\u2019s life assurance contracts included in the Affluent segment are categorised as investment contracts, in accordance with the classification criteria set out in the paragraph below. Investment contracts Investment contracts do not meet the IFRS definition of an insurance contract as they do not transfer significant insurance risk from the policyholder to the insurer. Unit-linked investment contracts are separated into two components, being an investment management services component and a financial liability. The financial liability component is designated at fair value through profit or loss (\u201cFV TPL\u201d) as it is managed on a fair value basis, and its value is directly linked to the market value of the underlying portfolio of assets. The Group does not directly benefit economically from returns from the assets held to match policyholder liabilities, apart from secondary exposure to future annual management fees that the Group expects to receive over the life of the policy. 5(d): Fee income and other income from service activities Fee income and other income from service activities represent the fair value of services provided, net of value added tax. Revenue is only recognised to the extent that management is satisfied that it is highly probable that no significant reversal of the revenue recognised will be required when uncertainties are resolved. In circumstances where refunds are expected on a portion of the income, including indemnity commission on policies sold, an estimate of the reduction of revenue is made and charged to the income statement at the point of sale, based upon assumptions determined from historical experience. Premium-based fees This relates to non-refundable fees taken on receipt of clients\u2019 investments and recognised on receipt over the life of the contract, in line with the performance obligation associated with the contract in respect of the administration of the underlying client records and client benefits. Where fees are received, either at inception or over an initial period for services not yet provided, the income is deferred and recognised as contract liabilities on the statement of financial position and released to the income statement as services are provided over the lifetime of the contract (see note 32 for further information). In addition, this also includes fees in respect of advice provided to clients when the advice has been provided to the client and the financial adviser\u2019s performance obligation has been fully delivered. Accordingly, fee income is recognised at the inception of the financial product sold. Fund-based fees This is periodic fee income based on the market valuation of the Group\u2019s investment contracts. It is calculated and recognised on a daily basis in line with the provision of investment management services. This also includes fee income within consolidated funds\u2019 income statements. Fixed fees This is periodic fee income which is fixed in value according to underlying contract terms and relates to the provision of services and transactional dealing fees. It is recognised on provision of the transaction or service. Surrender fees Surrender fee income relates to client charges received on the surrender of a contract, which is based on the value of the policy and recognised on surrender of the policy. Other fee and commission income This includes charges taken from unit-linked funds to meet future policyholder tax liabilities. Depending on the nature of the tax liability, the charges are either recognised at the point a transaction occurs on the unit-linked fund, or annually. 5: Significant accounting policies continued 5(e): Investment return Investment return comprises two elements (a) investment income and (b) realised and unrealised gains and losses on investments held at FVTPL. Investment income Investment income includes dividends on equity securities which are recorded as revenue on the ex-dividend date and interest income which is recognised using the effective interest rate method which allocates interest and other finance costs at a constant rate over the expected life of the financial instrument. Realised and unrealised gains and losses A gain or loss on a financial investment is only realised on disposal or transfer and represents the difference between the proceeds received, net of transaction costs, and its original cost (or amortised cost). Unrealised gains or losses, arising on investments which have not been disposed or transferred, represent the difference between carrying value at the year end and the carrying value at the previous year end or purchase value (if this occurs during the year), less the reversal of previously recognised unrealised gains or losses in respect of disposals made during the year. Gains and losses resulting from changes in both market value and foreign exchange rates on investments classified at FVTPL are recognised in the income statement in the period in which they occur. 5(f): Deferred acquisition costs and contract costs Investment contracts Incremental costs, including fee and commission expenses, that are directly attributable to securing either unit-linked investment contracts or other asset management services are deferred and recognised as contract costs. Contract costs are linked to the contractual right to benefit from providing investment management services. These are therefore amortised through the income statement consistent with the transfer to the customer of the services to which the contract relates. 5(g): Investment contract liabilities The Group\u2019s investment contracts are unit-linked contracts. At inception, investment contract liabilities for unit-linked business are classified as financial liabilities and measured at FVTPL. For these contracts, the fair value liability is equal to the total value of units allocated to the policyholders, based on the bid price of the underlying assets in the fund. The FV TPL classification reflects the fact that the matching investment portfolio that backs the unit-linked liabilities, is managed, and its performance evaluated, on a fair value basis. Contributions received on investment contracts are treated as policyholder deposits and credited directly to investment contract liabilities on the statement of financial position, as opposed to being reported as revenue in the income statement. Withdrawals paid out to policyholders on investment contracts are treated as a reduction to policyholder deposits, reducing the investment contract liabilities on the statement of financial position, as opposed to being recognised as expenses in the income statement. This practice is known as deposit accounting. 5(h): Financial instruments (other than derivatives) Financial instruments cover a wide range of financial assets, including financial investments, trade receivables and cash and cash equivalents and certain financial liabilities, including investment contract liabilities, trade payables, and borrowings. Derivatives, which are also financial instruments, are covered by accounting policy 5(j). Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to receive cash flows have expired or been forfeited by the Group. A financial liability is derecognised when the liability is extinguished. The Group assesses the objective of a business model in which an asset is held at a portfolio level because this best represents the way the business is managed and information is reported to management. The assessment considers the stated portfolio policies and objectives. The Group determines its strategy in holding the financial asset, particularly considering whether the Group earns contractual interest revenue, for example to match the duration of financial assets to the duration of liabilities that are funding those assets or to realise cash flows through the sale of the assets. The frequency, volume and timing of sales in prior periods may be reviewed, along with the reasons for such sales and expectations about future sales activity. These factors enable management to determine which financial assets should be measured at FVTPL. Initial measurement A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. 5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Subsequent measurement The classification of financial assets depends on (i) the purpose for which they were acquired, (ii) the business model in which the financial asset is managed, and (iii) its contractual cash flow characteristics. Two categories are applicable to the Group\u2019s financial assets: FV TPL and amortised cost. This classification determines the subsequent measurement basis. The following accounting policies apply to the subsequent measurement of financial assets. Measurement basis Accounting policies FVTPL These financial assets are subsequently measured at fair value. Net gains and losses, including interest and dividend income, are recognised in profit or loss. Amortised cost These financial assets are subsequently measured at amortised cost using the effective interest rate method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairments are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Amortised cost A financial asset is measured at amortised cost if it meets both of the following conditions and unless recognised as FVTPL on initial recognition applying the Fair Value Option (see below): \u00b7 the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and \u00b7 the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. For the purposes of this assessment, principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. All other financial assets that are not measured at amortised cost are classified and measured at FVTPL. Financial investments Derivative financial assets (which arise as a result of the consolidation of funds, as described in note 5(a)) are classified and measured at FV TPL. In addition, on initial recognition, the Group may irrevocably designate a financial asset at F VTPL that otherwise meets the requirements to be measured at amortised cost, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise (the Fair Value Option). The Group\u2019s interests in pooled investment funds, equity securities and debt securities are mandatorily at FVTPL, as they are part of groups of financial assets which are managed and whose performance is evaluated on a fair value basis. These investments are recognised at fair value initially and subsequently, with changes in fair value recognised in investment return in the income statement. Fixed-term deposits with a maturity profile exceeding three months are categorised as financial investments and are measured at amortised cost. The Group recognises purchases and sales of financial investments on trade date, which is the date that the Group commits to purchase or sell the assets. The costs associated with investment transactions are included within expenses in the income statement. Loans and advances Loans are recognised when cash is advanced to borrowers. Loans to brokers are stated at amortised cost using the effective interest rate method, except for loans at below-market interest rates which are measured at fair value. Loans stated at amortised cost are subject to the impairment requirements outlined below. Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits, money market collective investment funds and other short-term deposits with an original maturity of three months or less. Cash and cash equivalents held within money market collective investment funds are classified as FVTPL. All other cash and cash equivalents are classified as amortised cost which means they are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method and are subject to the impairment requirements outlined below. The carrying amount of cash and cash equivalents, other than money market collective investment funds which are measured at fair value, approximates to their fair value. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. At inception, investment contract liabilities for unit-linked business are recognised as financial liabilities and measured at FVTPL. Other financial liabilities, including the Group\u2019s borrowings and trade payables, are measured at amortised cost using the effective interest method. Trade payables and receivables Trade payables and receivables are classified at amortised cost. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. 5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Investments in subsidiaries Parent Company investments in subsidiary undertakings are initially stated at cost. Subsequently, investments in subsidiary undertakings are stated at cost less any provision for impairment. An investment in a subsidiary is deemed to be impaired when its carrying amount is greater than its estimated recoverable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements. All impairments are recognised in the Parent Company income statement as they occur. Impairment of financial assets The expected loss accounting model for credit losses applies to financial assets measured at amortised cost, but not to financial assets at FVTPL. Financial assets at amortised cost include trade receivables, cash and cash equivalents (excluding money market collective investment funds which are measured at fair value), fixed-term deposits and certain loans and advances. Credit loss allowances are measured on each reporting date according to a three-stage expected credit loss (\u201cECL\u201d) impairment model: Performing financial assets: Stage 1 From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the earlier of the next 12 months or its maturity date (\u201c12-month ECL\u201d). Stage 2 Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (\u201cLifetime ECL\u201d). The assessment of whether there has been a significant increase in credit risk requires considerable judgement, based on the lifetime probability of default (\u201cPD\u201d). Stage 1 and 2 allowances are held against performing loans. The main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset. Impaired financial assets: Stage 3 When a financial asset is considered to be credit-impaired, the allowance for credit losses (\u201cACL\u201d) continues to represent lifetime expected credit losses. However, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount. Application of the impairment model The Group applies the ECL model to all financial assets that are measured at amortised cost: \u00b7 Trade receivables, to which the simplified approach prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. \u00b7 Loans, cash and cash equivalents, and fixed-term deposits at amortised cost, to which the general three-stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is monitored for significant increases in credit risk which would trigger the recognition of a Lifetime ECL allowance. ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with the contract and the cash flows that the Group expects to receive). ECLs for financial assets that are credit-impaired at the reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash flows. ECLs are discounted at the effective interest rate of the financial asset. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and economic conditions. The Group has implemented its impairment methodology for estimating the ACL, taking into account forward-looking information in determining the appropriate level of allowance. In addition, it has identified indicators and set up procedures for monitoring for significant increases in credit risk. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes events such as significant financial difficulty of the borrower or issuer, a breach of contract such as a default or past due event or the restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider. The assumption that the credit risk for balances over 30 days significantly increases has been rebutted on the basis that some balances will exceed 30 days in the normal course of the settlement cycle, and therefore, there is no increase in the credit risk. 5: Significant accounting policies continued 5(h): Financial instruments (other than derivatives) continued Presentation of impairment Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Write-offs Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of the amount being recovered. This is generally the case when the Group concludes that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. 5(i): Contract assets Contract assets are not classified as financial assets. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. The expected loss accounting model for credit losses applies to contract assets. The Group applies the ECL model to contract assets, which are measured at amortised cost. The simplified approach prescribed by IFRS 9 is applied to contract assets. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. 5(j): Derivatives The only derivatives recognised in the Group\u2019s statement of financial position arise as a result of the consolidation of funds (described in note 5(a)). Management determines the classification of derivatives at initial recognition and classifies derivatives as mandatorily at F VTPL. All derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. 5(k): Employee benefits Pension obligations The Group operates two types of pension plans which have been established for eligible employees of the Group: \u00b7 Defined contribution schemes where the Group makes contributions to members\u2019 pension plans but has no further payment obligations once the contributions have been paid. \u00b7 Defined benefit plans which provide pension payments upon retirement to members as defined by the plan rules. The Group has funded these liabilities by ring-fencing assets in trustee-administered funds. Defined contribution pension obligations Under a defined contribution plan, the Group\u2019s legal or constructive obligation is limited to the amount it agrees to contribute to a pension fund and there is no obligation to pay further contributions if the fund does not hold sufficient assets to pay benefits. Contributions in respect of defined contribution schemes for current service are expensed in the income statement as staff costs and other employee-related costs when incurred. Defined benefit pension obligations A defined benefit pension plan typically defines the amount of pension benefit that an employee will receive on retirement. For these plans, the Group\u2019s defined benefit obligation is calculated by independent actuaries using the projected unit credit method, which measures the pension obligation as the present value of estimated future cash outflows. The discount rate used is determined based on the yields for investment grade corporate bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Plan assets are measured at their fair value at the reporting date. The net surplus or deficit of the defined benefit plan is recognised as an asset or liability in the statement of financial position and represents the present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan assets. An asset is recognised only where there is an unconditional right to future benefits. The current and past service cost curtailments and settlements are charged to other expenses in the income statement. Remeasurements which comprise gains and losses as a result of experience adjustments and changes in actuarial assumptions, the actual return on plan assets (excluding interest) and the effect of the asset ceiling are recognised immediately in other comprehensive income in the period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Administration costs (other than the costs of managing plan assets) are recognised in the income statement when the service is provided. When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in the income statement when the plan amendment or curtailment occurs. 5: Significant accounting policies continued 5(k): Employee benefits continued Employee share-based payments The Group operates a number of share incentive plans for its employees. These involve an award of shares or options in the Group (equity-settled share-based payments). The Group has not granted awards under cash-settled plans in the current or prior year. The Group\u2019s incentive plans have conditions attached before the employee becomes entitled to the award. These can be performance and/or service conditions (vesting conditions) or conditions that are often wholly within the control of the employee, for example where the employee has to provide funding during the vesting period, which is then used to exercise share options (non-vesting condition). Performance conditions may be market-based or non-market-based. Market-based performance conditions are those related to an entity\u2019s equity, such as achieving a specified share price or target based on a comparison of the entity\u2019s share price with an index of share prices. Non-market performance conditions are those related to an entity\u2019s profit or revenue targets, an example of which would be Earnings per Share (\u201cEPS\u201d). Market-based performance conditions and non-vesting conditions are taken into account when estimating the fair value of the share or option awards at the measurement date. The fair value of the share awards or options is not adjusted to take into account non-market performance features. These are taken into consideration by adjusting the number of equity instruments in the share-based payment measurement and this adjustment is made each period until the equity instruments vest. The fair value of share-based payment awards granted is recognised as an expense in the income statement over the vesting period which accords with the period for which related services are provided by the employee. A corresponding increase in equity is recognised for equity-settled plans. For equity-settled plans, the fair value is determined at grant date and not subsequently remeasured. At each period end, the Group reassesses the number of equity instruments expected to vest and recognises any difference between the revised and original estimate in the income statement with a corresponding adjustment to the share-based payments reserve in equity. At the time the equity instruments vest, the amount recognised in the share-based payments reserve in respect of those equity instruments is transferred to retained earnings. 5(l): Tax Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to income tax payable in respect of previous years. In the UK, a change in tax law is substantively enacted when it has been accepted by the House of Commons. Current tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. Deferred tax Deferred tax represents the tax on profits or losses which are required by law to be taxed in a different year to the year in which they impact the Group\u2019s financial statements. Deferred tax is calculated according to the statement of financial position method, based on temporary differences between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. In certain circumstances, as permitted by accounting standards, deferred tax balances are not recognised. In particular, where the liability relates to the initial recognition of goodwill, or transactions that are not a business combination and at the time of their occurrence affect neither accounting nor taxable profit. Note 29 includes further detail of circumstances in which the Group does not recognise temporary differences. Policyholder tax Certain products are subject to tax on the policyholder investment returns. This \u2018policyholder tax\u2019 is an element of the Group\u2019s total tax expense. To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits is shown separately. The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years. The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders\u2019 profits. 5: Significant accounting policies continued 5(m): Goodwill and intangible assets The recognition of goodwill arises on the acquisition of a business and represents the premium paid over the fair value of the Group\u2019s share of the identifiable assets and liabilities acquired at the date of acquisition. Intangible assets include intangible assets initially recognised as part of a business combination, purchased assets and internally generated assets, such as software development costs related to amounts recognised for in-house systems development. Goodwill and goodwill impairment Goodwill arising on the Group\u2019s investments in subsidiaries is shown as a separate asset, while that on associates, where it arises, is included within the carrying value of those investments. Goodwill is recognised as an asset at cost at the date when control is achieved (the acquisition date) and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not amortised but is subject to annual impairment reviews. Goodwill is allocated to one or more groups of cash-generating units (\u201cCGUs\u201d) expected to benefit from the synergies of the combination, where the CGU represents the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill is reviewed for impairment at least annually as a matter of course even if there is no indication of impairment, and whenever an event or change in circumstances occurs which indicates a potential impairment. For impairment testing, the carrying value of goodwill is compared to the recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs of disposal. Any impairment loss is recognised immediately in profit or loss and is not subsequently reversed. On disposal of an operation within a group of CGUs to which goodwill has been allocated, the goodwill associated with that operation is included in the carrying amount of the operation when determining the gain or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Intangible assets acquired as part of a business combination Intangible assets acquired as part of a business combination are recognised where they are separately identifiable and can be measured reliably. Acquired intangible assets consist primarily of contractual relationships such as customer relationships and distribution channels. Such items are capitalised at their fair value, represented by the estimated net present value of the future cash flows from the relevant relationships acquired at the date of acquisition. Brands and similar items acquired as part of a business combination are capitalised at their fair value based on a \u2018relief from royalty\u2019 valuation methodology. Subsequent to initial recognition, acquired intangible assets are measured at cost less amortisation and any recognised impairment losses. Amortisation is recognised at rates calculated to write off the cost or valuation less estimated residual value, using a straight-line method over their estimated useful lives as set out below: \u00b7 Distribution channels 8 years \u00b7 Customer relationships 7-10 years \u00b7 Brands 5 years The economic lives are determined by considering relevant factors such as usage of the asset, product life cycles, potential obsolescence, competitive position and stability of the industry. The amortisation period is re-evaluated at the end of each financial year. Internally developed software There are a number of factors taken into account when considering whether internally developed software meets the recognition criteria in IAS 38 Intangible Assets. Where, for example, a third-party provider retains ownership of the software, this will not meet the control criterion in the standard (i.e. the power to obtain benefits from the asset) and the costs will be expensed as incurred. Where it is capitalised, internally developed software is held at cost less accumulated amortisation and impairment losses. Such software is recognised in the statement of financial position if, and only if, it is probable that the relevant future economic benefits attributable to the software will flow to the Group and its cost can be measured reliably. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of the relevant software, which range between three and five years, depending on the nature and use of the software. Research and development Costs incurred in the research phase are expensed, whereas costs incurred in the development phase are capitalised, subject to meeting specific criteria, as set out in the relevant accounting standards and guidance. In particular, for the costs to be capitalised, it is a requirement that future economic benefits can be identified as resulting from the development expenditure. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the relevant software, which range from three to five years, depending on the nature and use of the software. Subsequent expenditure Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. 5: Significant accounting policies continued 5(m): Goodwill and intangible assets continued Impairment testing for intangible assets For intangible assets with finite lives, impairment charges are recognised where evidence of impairment is observed. Indicators of impairment can be based on external factors, such as significant adverse changes to the asset as part of the overall business environment and internal factors, such as worse than expected performance reflected in the Group\u2019s three-year Business Plan. If an indication of impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is calculated as the higher of fair value less costs to sell and value-in-use. If the recoverable amount of an intangible asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense in the income statement immediately. Where an intangible asset is not yet available for use, it is subject to an annual impairment test by comparing the carrying value with the recoverable amount. The recoverable amount is estimated by considering the ability of the asset to generate sufficient future economic benefits to recover the carrying value. 5(n): Property, plant and equipment Aside from right-of-use assets, property, plant and equipment consist principally of computer equipment and fixtures and fittings and are stated at cost less accumulated depreciation and any recognised impairment losses. Cost includes the original purchase price of the asset and the costs of bringing the asset to its working condition for its intended use. Depreciation is charged to profit or loss on a straight-line basis to write down the cost of the asset to its residual value over its estimated useful life. The following maximum useful lives are applied: \u00b7 Property leased by the Group \u2013 length of the lease \u00b7 Plant and equipment \u2013 5 to 10 years Leased plant and equipment is never depreciated over a period longer than the term of the lease. Management determines useful lives and residual values for assets when they are acquired, based on experience of similar assets and taking into account other relevant factors such as any expected changes in technology. The Group assesses and, where appropriate, adjusts the useful life, residual value and depreciation method for property plant and equipment on an annual basis. Items of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Where the carrying amount of an asset is greater than its estimated recoverable amount, which represents the higher of the asset\u2019s fair value less costs of disposal and value-in-use, it is written down immediately to its recoverable amount and an impairment loss is recognised in the income statement. Impaired non-financial assets, except goodwill, are reviewed for possible reversal of the impairment at each reporting date. On derecognition of an item of equipment, any gain or loss on disposal, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is included in profit or loss at the date of the disposal. Items of property and equipment that are not owned by the Group but are held under lease arrangements are accounted for in accordance with the accounting policy on leases. 5(o): Leases Under IFRS 16, the Group assesses whether a contract is or contains a lease at inception of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess where a contract conveys the right to control the use of an identified asset, the Group assesses whether: \u00b7 the contract involves the use of an identified asset which may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; \u00b7 the Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and \u00b7 the Group has the right to direct the use of the asset. For lessee contracts, the right-of-use asset is initially measured at cost, which comprises the initial amount of lease liability, adjusted for any lease payments made at or before the commencement date, and any initial direct costs incurred. Adjustments are also made, where appropriate, to recognise provisions for property restoration costs and lease incentives received such as rent-free periods. The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the asset-specific incremental borrowing rates. Subsequent to lease commencement, the Group measures the right-of-use asset using a cost model, whereby the asset is held at cost less accumulated depreciation and any accumulated impairment. Depreciation is charged to the income statement on a straight-line basis to write down the cost of the right-of-use asset to its residual value over its estimated useful life which is dependent on the length of the lease. In addition, the carrying amount of the right-of-use asset may be adjusted for certain remeasurements of the lease liability. The lease liability is subsequently measured at amortised cost using the effective interest method and also reflects any lease modifications or reassessments. The Group presents its right-of-use assets within \u201cProperty, plant and equipment\u201d and lease liabilities within \u201cBorrowings and lease liabilities\u201d in the statement of financial position. The Group currently has material lease commitments of varying durations for the rental of a number of office buildings. The Group\u2019s future lease cash outflows are not materially exposed to variable lease payments, low value or short-term leases, residual value guarantees or restrictions imposed by a lease contract or sale and leaseback transactions. 5: Significant accounting policies continued 5(o): Leases continued Subleases Where the Group sublets a leased asset to a third party, it accounts for its interest in the sublease separately from the head lease. In determining whether a sublease is a finance or operating lease, the Group assesses whether the sublease has transferred substantially all the risk and rewards of the right-of-use asset arising from the head lease to the sublessee. Where the sublease does transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group derecognises the right-of-use asset and a net investment in finance leases is recognised. The net investment in finance lease is calculated as the present value of the future lease payments receivable under the sublease. Any difference between the initial value of the net investment in finance leases and the right-of-use asset derecognised is recognised immediately in the income statement. Interest is calculated on the net investment in finance lease using the discount rate and is recognised in the income statement as finance income. Where the sublease does not transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group continues to recognise the right-of-use asset. The sublease is accounted for as an operating lease with the lease payments received recognised as other income in the income statement. Lease incentives granted are recognised as part of the rental income and are spread over the lease term. The Group had no material subleases at 31 December 2022 (2021: none). 5(p): Assets and liabilities held for sale and discontinued operations Assets (and disposal groups) are classified as held for sale if their carrying amount is expected to be recovered by means of a sale rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year of the date of classification. Assets and liabilities held for sale are presented separately in the consolidated statement of financial position. Assets and liabilities (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and their fair value less costs to sell. No depreciation or amortisation is charged on a non-current asset while classified as held for sale or while part of a disposal group classified as held for sale. The Group classifies areas of the business as discontinued operations where they have been disposed of or are classified as held for sale at the year end, which either represent a separate major line of business or geographical area or are part of a plan to dispose of one or are subsidiaries acquired exclusively with a view to resale. When an asset (or disposal group) ceases to be classified as held for sale, the individual assets and liabilities cease to be shown separately in the statement of financial position at the end of the year in which the classification changes. Comparatives are not restated. If the line of business was previously presented as a discontinued operation and subsequently ceases to be classified as held for sale, profit and loss and cash flows of the comparative period are restated to show that line of business as a continuing operation. 5(q): Provisions and contingent liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more probable than not that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at management\u2019s best estimate of the expenditure required to settle the obligation at the reporting date. Where the effect of the time value of money is material, provisions are discounted and represent the present value of the expected expenditure. Provisions are not recognised for future operating costs or losses. The Group recognises specific provisions where they arise for the situations outlined below: \u00b7 Client compensation and related costs, when the Group compensates clients in the context of providing fair customer outcomes. \u00b7 Onerous contracts, when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the obligations under the contract. \u00b7 Corporate restructuring, only if the Group has approved a detailed formal plan and raised a valid expectation among those parties directly affected, that the plan will be carried out either by having commenced implementation or by publicly announcing the plan\u2019s main features. Such provisions include the direct expenditure arising from the restructuring, such as employee termination payments but not those costs associated with the ongoing activities of the Group. \u00b7 Legal uncertainties and the settlement of other claims. \u00b7 Property provisions, where the Group has an obligation to restore a property to its original condition at the end of the lease. Contingent liabilities are possible obligations of the Group of which the timing and amount are subject to significant uncertainty. Contingent liabilities are not recognised in the consolidated statement of financial position, unless they are assumed by the Group as part of a business combination. They are, however, disclosed, unless they are considered to be remote. If a contingent liability becomes probable and the amount can be reliably measured it is no longer treated as contingent and it is recognised as a liability. Contingent assets, which are possible benefits to the Group, are only disclosed if it is probable that the Group will receive the benefit. If such a benefit becomes virtually certain, it is no longer considered contingent and is recognised on the consolidated statement of financial position as an asset. 5: Significant accounting policies continued 5(r): Foreign currency translation The Group\u2019s presentation currency is pounds sterling. The functional currency of the Group\u2019s foreign operations is the currency of the primary economic environment in which these entities operate. The Parent Company functional currency is pounds sterling. Income statements and cash flows of foreign entities are translated into the Group\u2019s presentation currency at average exchange rates for the year and their statements of financial position are translated at the year-end exchange rates. Exchange rate differences arising from the translation of the net investment in foreign subsidiaries are recognised in other comprehensive income and taken to the currency translation reserve which forms part of other reserves within equity. To the extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders\u2019 equity. On disposal of a foreign entity, exchange differences are transferred out of this reserve to the income statement as part of the gain or loss on sale. Foreign currency transactions are converted into the relevant functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at exchange rates prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the functional currency at the exchange rates prevailing at the dates the fair values were determined. Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost are converted into the functional currency at the rate of exchange at the time of the initial recognition of the asset and liability and are not subsequently retranslated. Exchange gains and losses on the translation and settlement during the year of foreign currency assets and liabilities are recognised in profit or loss. Exchange differences for non-monetary items are recognised in the statement of other comprehensive income when the changes in the fair value of the non-monetary item are recognised in the statement of other comprehensive income, and in profit or loss if the changes in fair value of the non-monetary item are recognised in profit or loss. 5(s): Share capital Equity instruments Shares are classified as equity instruments when there is no contractual obligation to deliver cash or other assets to another entity on terms that may be unfavourable. The value of the Company\u2019s share capital consists of the number of Ordinary Shares in issue multiplied by their nominal value. The difference between the proceeds received on the issue of the shares and the nominal value of the shares issued is recorded in share premium. Share issue costs Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds of the issue and disclosed where material. Dividends Dividends are distributions of profit to holders of the Group\u2019s share capital and as a result are recognised as a deduction in equity. Dividends payable to holders of equity instruments are recognised in the period in which they are authorised or approved. Interim dividends payable to holders of the Group\u2019s Ordinary Share capital are announced with the half-year results and authorised by the Directors of the Parent Company. The final dividend is announced with the Annual Report and typically requires shareholder approval at the Annual General Meeting. For this reason, it is not included as a liability in the annual financial statements for the year to which the final dividend relates. Shares held by trusts Shares in the Parent Company that are held by the Employee Benefit Trust (\u201cEBT\u201d) are treated as \u201cOwn shares\u201d. The EBT purchases shares in the Parent Company for delivery to employees under employee incentive plans. Purchased shares are recognised as a deduction from equity at the price paid for them. 5(t): Earnings per share Basic earnings per share are calculated by dividing the profit attributable to the Ordinary Shareholders of the Parent Company by the weighted average number of Ordinary Shares in issue during the year, excluding Ordinary Shares held within employee benefit trusts (\u201cEBTs\u201d) and shares held in consolidated funds (\u201cOwn shares\u201d). Own shares are deducted for the purpose of calculating both basic and diluted EPS. Diluted earnings per share recognises the dilutive impact of shares awarded and options granted to employees under share-based payment arrangements, to the extent they have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full year, and are calculated by increasing the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential Ordinary Shares, notably those related to employee share schemes. The Group is also required to calculate HEPS in accordance with the Johannesburg Stock Exchange (\u201cJSE\u201d) Listing Requirements, determined by reference to the South African Institute of Chartered Accountants\u2019 circular 1/2021 Headline Earnings. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used measure of earnings in South Africa. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-430": { "value": "5(a): Group accounting Subsidiaries Subsidiary undertakings are those entities (investees) controlled by the Group. The Group controls an investee if, and only if, the Group has all of the following three elements of control: \u00b7 power over the investee; \u00b7 exposure or rights to variable returns from its involvement with the investee; and \u00b7 the ability to affect those returns through its power over the investee. For operating entities, this usually arises with a shareholding in the entity of 50% or more. The Group also consolidates certain of its interests in open-ended investment companies (\u201cOEICs\u201d), unit trusts, mutual funds and similar investment vehicles (collectively \u201cinvestment funds\u201d). Where, as is often the case with investment funds, voting or similar rights are not the dominant factor in deciding who controls the investee, other factors are considered in the control assessment. These are described in more detail below. The Group continually assesses any changes to facts and circumstances to determine, in the context of the three elements of control listed above, whether it still controls the investee and is therefore required to consolidate it. Associates Associates are entities over which the Group has significant influence, but not control or joint control, through its participation in the entity\u2019s financial and operating policy decisions. Significant influence is generally demonstrated by the Group holding between 20% and 50% of the voting rights. Voting rights are not the only consideration, all other relevant factors, contractual or otherwise, are assessed in determining whether the Group has the ability to exercise significant influence. The results, assets and liabilities of associates, other than those that are measured at FVTPL (see below) are incorporated into these consolidated financial statements using the equity method of accounting from the date that significant influence commences until the date it ends. Under this method, the cost of the investment in an associate together with the Group\u2019s share of that entity\u2019s post-acquisition changes to shareholders\u2019 funds is included as an asset in the consolidated statement of financial position. The cost includes goodwill recognised on acquisition. Subsequent to initial recognition, the consolidated financial statements include the Group\u2019s share of the profit or loss and other comprehensive income of the associate until the date on which significant influence ceases. Where a Group entity transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate. Unrealised losses are eliminated in the same way but only to the extent that there is no evidence of impairment. Investments in associates that are held with a view to subsequent resale are accounted for as non-current assets held for sale. Where the Group has an investment in an associate, a portion of which is held by, or is held indirectly through a unit trust or similar entity, including through unit-linked funds, that portion of the investment is measured at F VTPL. The Group has classified one entity, 360 Dot Net Limited, as an associate in the current and prior year. 5(a): Group accounting continued Investment funds The Group invests in a wide range of investment funds such as OEICs and unit trusts generally in respect of its unit-linked investment contracts where investments are made to match the investment choices of its clients. For some of these funds, it also acts as fund manager. These funds invest predominantly in equities, bonds, cash and cash equivalents. The Group holds interests in these investment funds mainly through the receipt of fund management fees, in the case where the Group acts as fund manager, which provide a variable return based on the value of the funds under management and other criteria, and in the case of third-party funds where fund performance has an impact on fund-based fees within unit-linked investment contracts and other similar client investment products. Where the Group acts as fund manager, it may also hold investments in the underlying funds, through acquiring units or shares. Where these investments are held in unit-linked funds, the Group has a secondary exposure to variable returns through the management fees that it deducts from unit-linked policyholders\u2019 account balances. The Group\u2019s percentage ownership can fluctuate from day-to-day according to the Group\u2019s participation in them as clients\u2019 underlying investment choices change. When assessing the control of investment funds, the Group considers the purpose and design of the fund, the scope of its decision-making authority, including its ability to direct relevant activities and to govern the operations of a fund so as to obtain variable returns from that fund and its ability to use its power to affect these returns, both from the perspective of an investor and an asset manager. In addition, the Group assesses rights held by other parties including substantive removal (\u201ckick-out\u201d) rights that may affect the Group\u2019s ability to direct relevant activities. On consolidation, the interests of parties other than the Group are classified as a liability in the Group\u2019s statement of financial position and are described as \u201cthird-party interests in consolidated funds\u201d. Such interests are not recorded as non-controlling interests (\u201cNCIs\u201d) as they meet the liability classification requirement set out in IAS 32 Financial Instruments: Presentation. These liabilities are regarded as current, as they are repayable on demand, although it is not expected that they will be settled in a short time period. Business combinations The Group is required to use the acquisition method of accounting for business combinations. Business combinations are accounted for at the date that control is achieved (the acquisition date). The cost of a business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Deferred and contingent consideration relating to acquisitions is recognised as a liability on the date of acquisition. The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts. Where provisional amounts are reported, these are adjusted during the measurement period which extends up to a maximum of 12 months from the acquisition date. Additional assets or liabilities may also be recognised during this period, to reflect any new information obtained about the facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the identifiable net assets of the acquired entity at the date of acquisition. Other acquisition-related costs, not forming part of the cost of acquisition, are expensed as incurred. Upon disposal, the Group derecognises a subsidiary or disposal group on the date on which control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal. The difference between the proceeds from the disposal of a subsidiary undertaking and its carrying amount as at the date of disposal, including the cumulative amount of any related exchange differences that are recognised in the foreign currency translation reserve, is recognised in the consolidated income statement as the gain or loss on disposal of the subsidiary undertaking. Common control combinations Merger accounting is used by the Group for common control combinations, which are transactions between entities that are ultimately controlled by the same party or parties. This method treats the merged entities as if they had been combined throughout the current and comparative accounting periods. Merger accounting principles for these combinations result in the recognition of a merger reserve in the consolidated statement of financial position, being the difference between the nominal value of any new shares issued by the Parent Company for the acquisition of the shares of the subsidiary and the subsidiary\u2019s Net Asset Value. Such transactions attract merger relief under section 612 of the Companies Act 2006. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForGroupAccounting", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-487": { "value": "Subsidiaries Subsidiary undertakings are those entities (investees) controlled by the Group. The Group controls an investee if, and only if, the Group has all of the following three elements of control: \u00b7 power over the investee; \u00b7 exposure or rights to variable returns from its involvement with the investee; and \u00b7 the ability to affect those returns through its power over the investee. For operating entities, this usually arises with a shareholding in the entity of 50% or more. The Group also consolidates certain of its interests in open-ended investment companies (\u201cOEICs\u201d), unit trusts, mutual funds and similar investment vehicles (collectively \u201cinvestment funds\u201d). Where, as is often the case with investment funds, voting or similar rights are not the dominant factor in deciding who controls the investee, other factors are considered in the control assessment. These are described in more detail below. The Group continually assesses any changes to facts and circumstances to determine, in the context of the three elements of control listed above, whether it still controls the investee and is therefore required to consolidate it. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-488": { "value": "Associates Associates are entities over which the Group has significant influence, but not control or joint control, through its participation in the entity\u2019s financial and operating policy decisions. Significant influence is generally demonstrated by the Group holding between 20% and 50% of the voting rights. Voting rights are not the only consideration, all other relevant factors, contractual or otherwise, are assessed in determining whether the Group has the ability to exercise significant influence. The results, assets and liabilities of associates, other than those that are measured at FVTPL (see below) are incorporated into these consolidated financial statements using the equity method of accounting from the date that significant influence commences until the date it ends. Under this method, the cost of the investment in an associate together with the Group\u2019s share of that entity\u2019s post-acquisition changes to shareholders\u2019 funds is included as an asset in the consolidated statement of financial position. The cost includes goodwill recognised on acquisition. Subsequent to initial recognition, the consolidated financial statements include the Group\u2019s share of the profit or loss and other comprehensive income of the associate until the date on which significant influence ceases. Where a Group entity transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group\u2019s interest in the relevant associate. Unrealised losses are eliminated in the same way but only to the extent that there is no evidence of impairment. Investments in associates that are held with a view to subsequent resale are accounted for as non-current assets held for sale. Where the Group has an investment in an associate, a portion of which is held by, or is held indirectly through a unit trust or similar entity, including through unit-linked funds, that portion of the investment is measured at F VTPL. The Group has classified one entity, 360 Dot Net Limited, as an associate in the current and prior year. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-489": { "value": "Investment funds The Group invests in a wide range of investment funds such as OEICs and unit trusts generally in respect of its unit-linked investment contracts where investments are made to match the investment choices of its clients. For some of these funds, it also acts as fund manager. These funds invest predominantly in equities, bonds, cash and cash equivalents. The Group holds interests in these investment funds mainly through the receipt of fund management fees, in the case where the Group acts as fund manager, which provide a variable return based on the value of the funds under management and other criteria, and in the case of third-party funds where fund performance has an impact on fund-based fees within unit-linked investment contracts and other similar client investment products. Where the Group acts as fund manager, it may also hold investments in the underlying funds, through acquiring units or shares. Where these investments are held in unit-linked funds, the Group has a secondary exposure to variable returns through the management fees that it deducts from unit-linked policyholders\u2019 account balances. The Group\u2019s percentage ownership can fluctuate from day-to-day according to the Group\u2019s participation in them as clients\u2019 underlying investment choices change. When assessing the control of investment funds, the Group considers the purpose and design of the fund, the scope of its decision-making authority, including its ability to direct relevant activities and to govern the operations of a fund so as to obtain variable returns from that fund and its ability to use its power to affect these returns, both from the perspective of an investor and an asset manager. In addition, the Group assesses rights held by other parties including substantive removal (\u201ckick-out\u201d) rights that may affect the Group\u2019s ability to direct relevant activities. On consolidation, the interests of parties other than the Group are classified as a liability in the Group\u2019s statement of financial position and are described as \u201cthird-party interests in consolidated funds\u201d. Such interests are not recorded as non-controlling interests (\u201cNCIs\u201d) as they meet the liability classification requirement set out in IAS 32 Financial Instruments: Presentation. These liabilities are regarded as current, as they are repayable on demand, although it is not expected that they will be settled in a short time period. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForInvestmentFunds", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-490": { "value": "Business combinations The Group is required to use the acquisition method of accounting for business combinations. Business combinations are accounted for at the date that control is achieved (the acquisition date). The cost of a business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Deferred and contingent consideration relating to acquisitions is recognised as a liability on the date of acquisition. The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 Business Combinations are recognised at their fair value at the acquisition date. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts. Where provisional amounts are reported, these are adjusted during the measurement period which extends up to a maximum of 12 months from the acquisition date. Additional assets or liabilities may also be recognised during this period, to reflect any new information obtained about the facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. Goodwill represents the excess of the cost of an acquisition over the fair value of the Group\u2019s share of the identifiable net assets of the acquired entity at the date of acquisition. Other acquisition-related costs, not forming part of the cost of acquisition, are expensed as incurred. Upon disposal, the Group derecognises a subsidiary or disposal group on the date on which control passes. The consolidated income statement includes the results of a subsidiary or disposal group up to the date of disposal. The difference between the proceeds from the disposal of a subsidiary undertaking and its carrying amount as at the date of disposal, including the cumulative amount of any related exchange differences that are recognised in the foreign currency translation reserve, is recognised in the consolidated income statement as the gain or loss on disposal of the subsidiary undertaking. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-491": { "value": "Common control combinations Merger accounting is used by the Group for common control combinations, which are transactions between entities that are ultimately controlled by the same party or parties. This method treats the merged entities as if they had been combined throughout the current and comparative accounting periods. Merger accounting principles for these combinations result in the recognition of a merger reserve in the consolidated statement of financial position, being the difference between the nominal value of any new shares issued by the Parent Company for the acquisition of the shares of the subsidiary and the subsidiary\u2019s Net Asset Value. Such transactions attract merger relief under section 612 of the Companies Act 2006. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForCommonControlCombinations", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-431": { "value": "5(b): Fair value measurement The Group uses fair value to measure the majority of its assets and liabilities. Fair value is a market-based measure and is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For a financial instrument, the best evidence of fair value at initial recognition is normally the transaction price, which represents the fair value of the consideration given or received. Where observable market prices in an active market, such as bid or offer (ask) prices are unavailable, fair value is measured using valuation techniques based on the assumptions that market participants would use when pricing the asset or liability. If an asset or a liability measured at fair value has a bid or an offer price, the price within the bid-offer spread that is most representative of fair value is used as the basis of the fair value measurement. 5(b): Fair value measurement continued The quality of the fair value measurement for financial instruments is disclosed by way of the fair value hierarchy, whereby Level 1 represents a quoted market price for identical financial assets and liabilities, Level 2 financial assets and liabilities are valued using inputs other than quoted prices in active markets included in Level 1, either directly or indirectly and Level 3 whereby financial assets and liabilities are valued using valuation techniques where one or more significant inputs are unobservable. Classifying financial instruments into the three levels outlined above provides an indication about the reliability of inputs used in determining fair value. More information is provided in note 20. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-432": { "value": "5(c): Product classification The Group\u2019s life assurance contracts included in the Affluent segment are categorised as investment contracts, in accordance with the classification criteria set out in the paragraph below. Investment contracts Investment contracts do not meet the IFRS definition of an insurance contract as they do not transfer significant insurance risk from the policyholder to the insurer. Unit-linked investment contracts are separated into two components, being an investment management services component and a financial liability. The financial liability component is designated at fair value through profit or loss (\u201cFV TPL\u201d) as it is managed on a fair value basis, and its value is directly linked to the market value of the underlying portfolio of assets. The Group does not directly benefit economically from returns from the assets held to match policyholder liabilities, apart from secondary exposure to future annual management fees that the Group expects to receive over the life of the policy. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForProductClassification", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-433": { "value": "5(d): Fee income and other income from service activities Fee income and other income from service activities represent the fair value of services provided, net of value added tax. Revenue is only recognised to the extent that management is satisfied that it is highly probable that no significant reversal of the revenue recognised will be required when uncertainties are resolved. In circumstances where refunds are expected on a portion of the income, including indemnity commission on policies sold, an estimate of the reduction of revenue is made and charged to the income statement at the point of sale, based upon assumptions determined from historical experience. Premium-based fees This relates to non-refundable fees taken on receipt of clients\u2019 investments and recognised on receipt over the life of the contract, in line with the performance obligation associated with the contract in respect of the administration of the underlying client records and client benefits. Where fees are received, either at inception or over an initial period for services not yet provided, the income is deferred and recognised as contract liabilities on the statement of financial position and released to the income statement as services are provided over the lifetime of the contract (see note 32 for further information). In addition, this also includes fees in respect of advice provided to clients when the advice has been provided to the client and the financial adviser\u2019s performance obligation has been fully delivered. Accordingly, fee income is recognised at the inception of the financial product sold. Fund-based fees This is periodic fee income based on the market valuation of the Group\u2019s investment contracts. It is calculated and recognised on a daily basis in line with the provision of investment management services. This also includes fee income within consolidated funds\u2019 income statements. Fixed fees This is periodic fee income which is fixed in value according to underlying contract terms and relates to the provision of services and transactional dealing fees. It is recognised on provision of the transaction or service. Surrender fees Surrender fee income relates to client charges received on the surrender of a contract, which is based on the value of the policy and recognised on surrender of the policy. Other fee and commission income This includes charges taken from unit-linked funds to meet future policyholder tax liabilities. Depending on the nature of the tax liability, the charges are either recognised at the point a transaction occurs on the unit-linked fund, or annually. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForFeeAndOtherIncomeFromServiceActivities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-434": { "value": "5(e): Investment return Investment return comprises two elements (a) investment income and (b) realised and unrealised gains and losses on investments held at FVTPL. Investment income Investment income includes dividends on equity securities which are recorded as revenue on the ex-dividend date and interest income which is recognised using the effective interest rate method which allocates interest and other finance costs at a constant rate over the expected life of the financial instrument. Realised and unrealised gains and losses A gain or loss on a financial investment is only realised on disposal or transfer and represents the difference between the proceeds received, net of transaction costs, and its original cost (or amortised cost). Unrealised gains or losses, arising on investments which have not been disposed or transferred, represent the difference between carrying value at the year end and the carrying value at the previous year end or purchase value (if this occurs during the year), less the reversal of previously recognised unrealised gains or losses in respect of disposals made during the year. Gains and losses resulting from changes in both market value and foreign exchange rates on investments classified at FVTPL are recognised in the income statement in the period in which they occur. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForInvestmentReturn", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-435": { "value": "5(f): Deferred acquisition costs and contract costs Investment contracts Incremental costs, including fee and commission expenses, that are directly attributable to securing either unit-linked investment contracts or other asset management services are deferred and recognised as contract costs. Contract costs are linked to the contractual right to benefit from providing investment management services. These are therefore amortised through the income statement consistent with the transfer to the customer of the services to which the contract relates. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredAcquisitionCostsArisingFromInsuranceContractsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-436": { "value": "5(g): Investment contract liabilities The Group\u2019s investment contracts are unit-linked contracts. At inception, investment contract liabilities for unit-linked business are classified as financial liabilities and measured at FVTPL. For these contracts, the fair value liability is equal to the total value of units allocated to the policyholders, based on the bid price of the underlying assets in the fund. The FV TPL classification reflects the fact that the matching investment portfolio that backs the unit-linked liabilities, is managed, and its performance evaluated, on a fair value basis. Contributions received on investment contracts are treated as policyholder deposits and credited directly to investment contract liabilities on the statement of financial position, as opposed to being reported as revenue in the income statement. Withdrawals paid out to policyholders on investment contracts are treated as a reduction to policyholder deposits, reducing the investment contract liabilities on the statement of financial position, as opposed to being recognised as expenses in the income statement. This practice is known as deposit accounting. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForInvestmentContractLiabilities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-437": { "value": "5(h): Financial instruments (other than derivatives) Financial instruments cover a wide range of financial assets, including financial investments, trade receivables and cash and cash equivalents and certain financial liabilities, including investment contract liabilities, trade payables, and borrowings. Derivatives, which are also financial instruments, are covered by accounting policy 5(j). Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to receive cash flows have expired or been forfeited by the Group. A financial liability is derecognised when the liability is extinguished. The Group assesses the objective of a business model in which an asset is held at a portfolio level because this best represents the way the business is managed and information is reported to management. The assessment considers the stated portfolio policies and objectives. The Group determines its strategy in holding the financial asset, particularly considering whether the Group earns contractual interest revenue, for example to match the duration of financial assets to the duration of liabilities that are funding those assets or to realise cash flows through the sale of the assets. The frequency, volume and timing of sales in prior periods may be reviewed, along with the reasons for such sales and expectations about future sales activity. These factors enable management to determine which financial assets should be measured at FVTPL. Initial measurement A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition. 5(h): Financial instruments (other than derivatives) continued Subsequent measurement The classification of financial assets depends on (i) the purpose for which they were acquired, (ii) the business model in which the financial asset is managed, and (iii) its contractual cash flow characteristics. Two categories are applicable to the Group\u2019s financial assets: FV TPL and amortised cost. This classification determines the subsequent measurement basis. The following accounting policies apply to the subsequent measurement of financial assets. Measurement basis Accounting policies FVTPL These financial assets are subsequently measured at fair value. Net gains and losses, including interest and dividend income, are recognised in profit or loss. Amortised cost These financial assets are subsequently measured at amortised cost using the effective interest rate method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairments are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss. Amortised cost A financial asset is measured at amortised cost if it meets both of the following conditions and unless recognised as FVTPL on initial recognition applying the Fair Value Option (see below): \u00b7 the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and \u00b7 the contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. For the purposes of this assessment, principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin. All other financial assets that are not measured at amortised cost are classified and measured at FVTPL. Financial investments Derivative financial assets (which arise as a result of the consolidation of funds, as described in note 5(a)) are classified and measured at FV TPL. In addition, on initial recognition, the Group may irrevocably designate a financial asset at F VTPL that otherwise meets the requirements to be measured at amortised cost, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise (the Fair Value Option). The Group\u2019s interests in pooled investment funds, equity securities and debt securities are mandatorily at FVTPL, as they are part of groups of financial assets which are managed and whose performance is evaluated on a fair value basis. These investments are recognised at fair value initially and subsequently, with changes in fair value recognised in investment return in the income statement. Fixed-term deposits with a maturity profile exceeding three months are categorised as financial investments and are measured at amortised cost. The Group recognises purchases and sales of financial investments on trade date, which is the date that the Group commits to purchase or sell the assets. The costs associated with investment transactions are included within expenses in the income statement. Loans and advances Loans are recognised when cash is advanced to borrowers. Loans to brokers are stated at amortised cost using the effective interest rate method, except for loans at below-market interest rates which are measured at fair value. Loans stated at amortised cost are subject to the impairment requirements outlined below. Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits, money market collective investment funds and other short-term deposits with an original maturity of three months or less. Cash and cash equivalents held within money market collective investment funds are classified as FVTPL. All other cash and cash equivalents are classified as amortised cost which means they are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method and are subject to the impairment requirements outlined below. The carrying amount of cash and cash equivalents, other than money market collective investment funds which are measured at fair value, approximates to their fair value. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. At inception, investment contract liabilities for unit-linked business are recognised as financial liabilities and measured at FVTPL. Other financial liabilities, including the Group\u2019s borrowings and trade payables, are measured at amortised cost using the effective interest method. Trade payables and receivables Trade payables and receivables are classified at amortised cost. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. 5(h): Financial instruments (other than derivatives) continued Investments in subsidiaries Parent Company investments in subsidiary undertakings are initially stated at cost. Subsequently, investments in subsidiary undertakings are stated at cost less any provision for impairment. An investment in a subsidiary is deemed to be impaired when its carrying amount is greater than its estimated recoverable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements. All impairments are recognised in the Parent Company income statement as they occur. Impairment of financial assets The expected loss accounting model for credit losses applies to financial assets measured at amortised cost, but not to financial assets at FVTPL. Financial assets at amortised cost include trade receivables, cash and cash equivalents (excluding money market collective investment funds which are measured at fair value), fixed-term deposits and certain loans and advances. Credit loss allowances are measured on each reporting date according to a three-stage expected credit loss (\u201cECL\u201d) impairment model: Performing financial assets: Stage 1 From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the earlier of the next 12 months or its maturity date (\u201c12-month ECL\u201d). Stage 2 Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (\u201cLifetime ECL\u201d). The assessment of whether there has been a significant increase in credit risk requires considerable judgement, based on the lifetime probability of default (\u201cPD\u201d). Stage 1 and 2 allowances are held against performing loans. The main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset. Impaired financial assets: Stage 3 When a financial asset is considered to be credit-impaired, the allowance for credit losses (\u201cACL\u201d) continues to represent lifetime expected credit losses. However, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount. Application of the impairment model The Group applies the ECL model to all financial assets that are measured at amortised cost: \u00b7 Trade receivables, to which the simplified approach prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. \u00b7 Loans, cash and cash equivalents, and fixed-term deposits at amortised cost, to which the general three-stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is monitored for significant increases in credit risk which would trigger the recognition of a Lifetime ECL allowance. ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with the contract and the cash flows that the Group expects to receive). ECLs for financial assets that are credit-impaired at the reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash flows. ECLs are discounted at the effective interest rate of the financial asset. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and economic conditions. The Group has implemented its impairment methodology for estimating the ACL, taking into account forward-looking information in determining the appropriate level of allowance. In addition, it has identified indicators and set up procedures for monitoring for significant increases in credit risk. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes events such as significant financial difficulty of the borrower or issuer, a breach of contract such as a default or past due event or the restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider. The assumption that the credit risk for balances over 30 days significantly increases has been rebutted on the basis that some balances will exceed 30 days in the normal course of the settlement cycle, and therefore, there is no increase in the credit risk. 5(h): Financial instruments (other than derivatives) continued Presentation of impairment Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Write-offs Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of the amount being recovered. This is generally the case when the Group concludes that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-492": { "value": "Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits, money market collective investment funds and other short-term deposits with an original maturity of three months or less. Cash and cash equivalents held within money market collective investment funds are classified as FVTPL. All other cash and cash equivalents are classified as amortised cost which means they are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method and are subject to the impairment requirements outlined below. The carrying amount of cash and cash equivalents, other than money market collective investment funds which are measured at fair value, approximates to their fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-493": { "value": "Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. At inception, investment contract liabilities for unit-linked business are recognised as financial liabilities and measured at FVTPL. Other financial liabilities, including the Group\u2019s borrowings and trade payables, are measured at amortised cost using the effective interest method. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForFinancialLiabilitiesAndEquity", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-494": { "value": "Trade payables and receivables Trade payables and receivables are classified at amortised cost. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-540": { "value": "Trade payables and receivables Trade payables and receivables are classified at amortised cost. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-495": { "value": "Investments in subsidiaries Parent Company investments in subsidiary undertakings are initially stated at cost. Subsequently, investments in subsidiary undertakings are stated at cost less any provision for impairment. An investment in a subsidiary is deemed to be impaired when its carrying amount is greater than its estimated recoverable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements. All impairments are recognised in the Parent Company income statement as they occur. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForInvestmentsInSubsidiaries", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-496": { "value": "Impairment of financial assets The expected loss accounting model for credit losses applies to financial assets measured at amortised cost, but not to financial assets at FVTPL. Financial assets at amortised cost include trade receivables, cash and cash equivalents (excluding money market collective investment funds which are measured at fair value), fixed-term deposits and certain loans and advances. Credit loss allowances are measured on each reporting date according to a three-stage expected credit loss (\u201cECL\u201d) impairment model: Performing financial assets: Stage 1 From initial recognition of a financial asset to the date on which an asset has experienced a significant increase in credit risk relative to its initial recognition, a stage 1 loss allowance is recognised equal to the credit losses expected to result from its default occurring over the earlier of the next 12 months or its maturity date (\u201c12-month ECL\u201d). Stage 2 Following a significant increase in credit risk relative to the initial recognition of the financial asset, a stage 2 loss allowance is recognised equal to the credit losses expected from all possible default events over the remaining lifetime of the asset (\u201cLifetime ECL\u201d). The assessment of whether there has been a significant increase in credit risk requires considerable judgement, based on the lifetime probability of default (\u201cPD\u201d). Stage 1 and 2 allowances are held against performing loans. The main difference between stage 1 and stage 2 allowances is the time horizon. Stage 1 allowances are estimated using the PD with a maximum period of 12 months, while stage 2 allowances are estimated using the PD over the remaining lifetime of the asset. Impaired financial assets: Stage 3 When a financial asset is considered to be credit-impaired, the allowance for credit losses (\u201cACL\u201d) continues to represent lifetime expected credit losses. However, interest income is calculated based on the amortised cost of the asset, net of the loss allowance, rather than its gross carrying amount. Application of the impairment model The Group applies the ECL model to all financial assets that are measured at amortised cost: \u00b7 Trade receivables, to which the simplified approach prescribed by IFRS 9 is applied. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. \u00b7 Loans, cash and cash equivalents, and fixed-term deposits at amortised cost, to which the general three-stage model (described above) is applied, whereby a 12-month ECL is recognised initially and the balance is monitored for significant increases in credit risk which would trigger the recognition of a Lifetime ECL allowance. ECLs are a probability-weighted estimate of credit losses. ECLs for financial assets that are not credit-impaired at the reporting date are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due in accordance with the contract and the cash flows that the Group expects to receive). ECLs for financial assets that are credit-impaired at the reporting date are measured as the difference between the gross carrying amount and the present value of estimated future cash flows. ECLs are discounted at the effective interest rate of the financial asset. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. The measurement of ECLs considers information about past events and current conditions, as well as supportable information about future events and economic conditions. The Group has implemented its impairment methodology for estimating the ACL, taking into account forward-looking information in determining the appropriate level of allowance. In addition, it has identified indicators and set up procedures for monitoring for significant increases in credit risk. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes events such as significant financial difficulty of the borrower or issuer, a breach of contract such as a default or past due event or the restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider. The assumption that the credit risk for balances over 30 days significantly increases has been rebutted on the basis that some balances will exceed 30 days in the normal course of the settlement cycle, and therefore, there is no increase in the credit risk. Presentation of impairment Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-541": { "value": "Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes events such as significant financial difficulty of the borrower or issuer, a breach of contract such as a default or past due event or the restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider. The assumption that the credit risk for balances over 30 days significantly increases has been rebutted on the basis that some balances will exceed 30 days in the normal course of the settlement cycle, and therefore, there is no increase in the credit risk. 5(h): Financial instruments (other than derivatives) continued Presentation of impairment Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-497": { "value": "Write-offs Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of the amount being recovered. This is generally the case when the Group concludes that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForWriteOffs", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-438": { "value": "5(i): Contract assets Contract assets are not classified as financial assets. Due to their short-term nature, their carrying amount is considered to be the same as their fair value. The expected loss accounting model for credit losses applies to contract assets. The Group applies the ECL model to contract assets, which are measured at amortised cost. The simplified approach prescribed by IFRS 9 is applied to contract assets. This approach requires the recognition of a Lifetime ECL allowance on day one and thereafter. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForContractAssets", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-439": { "value": "5(j): Derivatives The only derivatives recognised in the Group\u2019s statement of financial position arise as a result of the consolidation of funds (described in note 5(a)). Management determines the classification of derivatives at initial recognition and classifies derivatives as mandatorily at F VTPL. All derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-440": { "value": "5(k): Employee benefits Pension obligations The Group operates two types of pension plans which have been established for eligible employees of the Group: \u00b7 Defined contribution schemes where the Group makes contributions to members\u2019 pension plans but has no further payment obligations once the contributions have been paid. \u00b7 Defined benefit plans which provide pension payments upon retirement to members as defined by the plan rules. The Group has funded these liabilities by ring-fencing assets in trustee-administered funds. Defined contribution pension obligations Under a defined contribution plan, the Group\u2019s legal or constructive obligation is limited to the amount it agrees to contribute to a pension fund and there is no obligation to pay further contributions if the fund does not hold sufficient assets to pay benefits. Contributions in respect of defined contribution schemes for current service are expensed in the income statement as staff costs and other employee-related costs when incurred. Defined benefit pension obligations A defined benefit pension plan typically defines the amount of pension benefit that an employee will receive on retirement. For these plans, the Group\u2019s defined benefit obligation is calculated by independent actuaries using the projected unit credit method, which measures the pension obligation as the present value of estimated future cash outflows. The discount rate used is determined based on the yields for investment grade corporate bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Plan assets are measured at their fair value at the reporting date. The net surplus or deficit of the defined benefit plan is recognised as an asset or liability in the statement of financial position and represents the present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan assets. An asset is recognised only where there is an unconditional right to future benefits. The current and past service cost curtailments and settlements are charged to other expenses in the income statement. Remeasurements which comprise gains and losses as a result of experience adjustments and changes in actuarial assumptions, the actual return on plan assets (excluding interest) and the effect of the asset ceiling are recognised immediately in other comprehensive income in the period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Administration costs (other than the costs of managing plan assets) are recognised in the income statement when the service is provided. When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in the income statement when the plan amendment or curtailment occurs. 5(k): Employee benefits continued Employee share-based payments The Group operates a number of share incentive plans for its employees. These involve an award of shares or options in the Group (equity-settled share-based payments). The Group has not granted awards under cash-settled plans in the current or prior year. The Group\u2019s incentive plans have conditions attached before the employee becomes entitled to the award. These can be performance and/or service conditions (vesting conditions) or conditions that are often wholly within the control of the employee, for example where the employee has to provide funding during the vesting period, which is then used to exercise share options (non-vesting condition). Performance conditions may be market-based or non-market-based. Market-based performance conditions are those related to an entity\u2019s equity, such as achieving a specified share price or target based on a comparison of the entity\u2019s share price with an index of share prices. Non-market performance conditions are those related to an entity\u2019s profit or revenue targets, an example of which would be Earnings per Share (\u201cEPS\u201d). Market-based performance conditions and non-vesting conditions are taken into account when estimating the fair value of the share or option awards at the measurement date. The fair value of the share awards or options is not adjusted to take into account non-market performance features. These are taken into consideration by adjusting the number of equity instruments in the share-based payment measurement and this adjustment is made each period until the equity instruments vest. The fair value of share-based payment awards granted is recognised as an expense in the income statement over the vesting period which accords with the period for which related services are provided by the employee. A corresponding increase in equity is recognised for equity-settled plans. For equity-settled plans, the fair value is determined at grant date and not subsequently remeasured. At each period end, the Group reassesses the number of equity instruments expected to vest and recognises any difference between the revised and original estimate in the income statement with a corresponding adjustment to the share-based payments reserve in equity. At the time the equity instruments vest, the amount recognised in the share-based payments reserve in respect of those equity instruments is transferred to retained earnings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-498": { "value": "Pension obligations The Group operates two types of pension plans which have been established for eligible employees of the Group: \u00b7 Defined contribution schemes where the Group makes contributions to members\u2019 pension plans but has no further payment obligations once the contributions have been paid. \u00b7 Defined benefit plans which provide pension payments upon retirement to members as defined by the plan rules. The Group has funded these liabilities by ring-fencing assets in trustee-administered funds. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForPensionObligation", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-499": { "value": "Defined contribution pension obligations Under a defined contribution plan, the Group\u2019s legal or constructive obligation is limited to the amount it agrees to contribute to a pension fund and there is no obligation to pay further contributions if the fund does not hold sufficient assets to pay benefits. Contributions in respect of defined contribution schemes for current service are expensed in the income statement as staff costs and other employee-related costs when incurred. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForDefinedContributionPensionOobligation", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-500": { "value": "Defined benefit pension obligations A defined benefit pension plan typically defines the amount of pension benefit that an employee will receive on retirement. For these plans, the Group\u2019s defined benefit obligation is calculated by independent actuaries using the projected unit credit method, which measures the pension obligation as the present value of estimated future cash outflows. The discount rate used is determined based on the yields for investment grade corporate bonds that have maturity dates approximating to the terms of the Group\u2019s obligations. Plan assets are measured at their fair value at the reporting date. The net surplus or deficit of the defined benefit plan is recognised as an asset or liability in the statement of financial position and represents the present value of the defined benefit obligation at the end of the reporting period less the fair value of the plan assets. An asset is recognised only where there is an unconditional right to future benefits. The current and past service cost curtailments and settlements are charged to other expenses in the income statement. Remeasurements which comprise gains and losses as a result of experience adjustments and changes in actuarial assumptions, the actual return on plan assets (excluding interest) and the effect of the asset ceiling are recognised immediately in other comprehensive income in the period in which they occur. Remeasurements are not reclassified to the income statement in subsequent periods. Administration costs (other than the costs of managing plan assets) are recognised in the income statement when the service is provided. When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees, or the gain or loss on curtailment, is recognised immediately in the income statement when the plan amendment or curtailment occurs. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForDefinedBenefitPensionObligation", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-504": { "value": "Employee share-based payments The Group operates a number of share incentive plans for its employees. These involve an award of shares or options in the Group (equity-settled share-based payments). The Group has not granted awards under cash-settled plans in the current or prior year. The Group\u2019s incentive plans have conditions attached before the employee becomes entitled to the award. These can be performance and/or service conditions (vesting conditions) or conditions that are often wholly within the control of the employee, for example where the employee has to provide funding during the vesting period, which is then used to exercise share options (non-vesting condition). Performance conditions may be market-based or non-market-based. Market-based performance conditions are those related to an entity\u2019s equity, such as achieving a specified share price or target based on a comparison of the entity\u2019s share price with an index of share prices. Non-market performance conditions are those related to an entity\u2019s profit or revenue targets, an example of which would be Earnings per Share (\u201cEPS\u201d). Market-based performance conditions and non-vesting conditions are taken into account when estimating the fair value of the share or option awards at the measurement date. The fair value of the share awards or options is not adjusted to take into account non-market performance features. These are taken into consideration by adjusting the number of equity instruments in the share-based payment measurement and this adjustment is made each period until the equity instruments vest. The fair value of share-based payment awards granted is recognised as an expense in the income statement over the vesting period which accords with the period for which related services are provided by the employee. A corresponding increase in equity is recognised for equity-settled plans. For equity-settled plans, the fair value is determined at grant date and not subsequently remeasured. At each period end, the Group reassesses the number of equity instruments expected to vest and recognises any difference between the revised and original estimate in the income statement with a corresponding adjustment to the share-based payments reserve in equity. At the time the equity instruments vest, the amount recognised in the share-based payments reserve in respect of those equity instruments is transferred to retained earnings. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-441": { "value": "5(l): Tax Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to income tax payable in respect of previous years. In the UK, a change in tax law is substantively enacted when it has been accepted by the House of Commons. Current tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. Deferred tax Deferred tax represents the tax on profits or losses which are required by law to be taxed in a different year to the year in which they impact the Group\u2019s financial statements. Deferred tax is calculated according to the statement of financial position method, based on temporary differences between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. In certain circumstances, as permitted by accounting standards, deferred tax balances are not recognised. In particular, where the liability relates to the initial recognition of goodwill, or transactions that are not a business combination and at the time of their occurrence affect neither accounting nor taxable profit. Note 29 includes further detail of circumstances in which the Group does not recognise temporary differences. Policyholder tax Certain products are subject to tax on the policyholder investment returns. This \u2018policyholder tax\u2019 is an element of the Group\u2019s total tax expense. To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits is shown separately. The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years. The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders\u2019 profits. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-501": { "value": "Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to income tax payable in respect of previous years. In the UK, a change in tax law is substantively enacted when it has been accepted by the House of Commons. Current tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForCurrentTax", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-502": { "value": "Deferred tax Deferred tax represents the tax on profits or losses which are required by law to be taxed in a different year to the year in which they impact the Group\u2019s financial statements. Deferred tax is calculated according to the statement of financial position method, based on temporary differences between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly in equity or in other comprehensive income. In certain circumstances, as permitted by accounting standards, deferred tax balances are not recognised. In particular, where the liability relates to the initial recognition of goodwill, or transactions that are not a business combination and at the time of their occurrence affect neither accounting nor taxable profit. Note 29 includes further detail of circumstances in which the Group does not recognise temporary differences. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-503": { "value": "Policyholder tax Certain products are subject to tax on the policyholder investment returns. This \u2018policyholder tax\u2019 is an element of the Group\u2019s total tax expense. To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits is shown separately. The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years. The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders\u2019 profits. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForPolicyholderTax", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00" } }, "fact-442": { "value": "5(m): Goodwill and intangible assets The recognition of goodwill arises on the acquisition of a business and represents the premium paid over the fair value of the Group\u2019s share of the identifiable assets and liabilities acquired at the date of acquisition. Intangible assets include intangible assets initially recognised as part of a business combination, purchased assets and internally generated assets, such as software development costs related to amounts recognised for in-house systems development. Goodwill and goodwill impairment Goodwill arising on the Group\u2019s investments in subsidiaries is shown as a separate asset, while that on associates, where it arises, is included within the carrying value of those investments. Goodwill is recognised as an asset at cost at the date when control is achieved (the acquisition date) and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not amortised but is subject to annual impairment reviews. Goodwill is allocated to one or more groups of cash-generating units (\u201cCGUs\u201d) expected to benefit from the synergies of the combination, where the CGU represents the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill is reviewed for impairment at least annually as a matter of course even if there is no indication of impairment, and whenever an event or change in circumstances occurs which indicates a potential impairment. For impairment testing, the carrying value of goodwill is compared to the recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs of disposal. Any impairment loss is recognised immediately in profit or loss and is not subsequently reversed. On disposal of an operation within a group of CGUs to which goodwill has been allocated, the goodwill associated with that operation is included in the carrying amount of the operation when determining the gain or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained. Intangible assets acquired as part of a business combination Intangible assets acquired as part of a business combination are recognised where they are separately identifiable and can be measured reliably. Acquired intangible assets consist primarily of contractual relationships such as customer relationships and distribution channels. Such items are capitalised at their fair value, represented by the estimated net present value of the future cash flows from the relevant relationships acquired at the date of acquisition. Brands and similar items acquired as part of a business combination are capitalised at their fair value based on a \u2018relief from royalty\u2019 valuation methodology. Subsequent to initial recognition, acquired intangible assets are measured at cost less amortisation and any recognised impairment losses. Amortisation is recognised at rates calculated to write off the cost or valuation less estimated residual value, using a straight-line method over their estimated useful lives as set out below: \u00b7 Distribution channels 8 years \u00b7 Customer relationships 7-10 years \u00b7 Brands 5 years The economic lives are determined by considering relevant factors such as usage of the asset, product life cycles, potential obsolescence, competitive position and stability of the industry. The amortisation period is re-evaluated at the end of each financial year. Internally developed software There are a number of factors taken into account when considering whether internally developed software meets the recognition criteria in IAS 38 Intangible Assets. Where, for example, a third-party provider retains ownership of the software, this will not meet the control criterion in the standard (i.e. the power to obtain benefits from the asset) and the costs will be expensed as incurred. Where it is capitalised, internally developed software is held at cost less accumulated amortisation and impairment losses. Such software is recognised in the statement of financial position if, and only if, it is probable that the relevant future economic benefits attributable to the software will flow to the Group and its cost can be measured reliably. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of the relevant software, which range between three and five years, depending on the nature and use of the software. Research and development Costs incurred in the research phase are expensed, whereas costs incurred in the development phase are capitalised, subject to meeting specific criteria, as set out in the relevant accounting standards and guidance. In particular, for the costs to be capitalised, it is a requirement that future economic benefits can be identified as resulting from the development expenditure. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the relevant software, which range from three to five years, depending on the nature and use of the software. Subsequent expenditure Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. 5(m): Goodwill and intangible assets continued Impairment testing for intangible assets For intangible assets with finite lives, impairment charges are recognised where evidence of impairment is observed. Indicators of impairment can be based on external factors, such as significant adverse changes to the asset as part of the overall business environment and internal factors, such as worse than expected performance reflected in the Group\u2019s three-year Business Plan. If an indication of impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is calculated as the higher of fair value less costs to sell and value-in-use. If the recoverable amount of an intangible asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense in the income statement immediately. Where an intangible asset is not yet available for use, it is subject to an annual impairment test by comparing the carrying value with the recoverable amount. The recoverable amount is estimated by considering the ability of the asset to generate sufficient future economic benefits to recover the carrying value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-505": { "value": "Goodwill and goodwill impairment Goodwill arising on the Group\u2019s investments in subsidiaries is shown as a separate asset, while that on associates, where it arises, is included within the carrying value of those investments. Goodwill is recognised as an asset at cost at the date when control is achieved (the acquisition date) and is subsequently measured at cost less any accumulated impairment losses. Goodwill is not amortised but is subject to annual impairment reviews. Goodwill is allocated to one or more groups of cash-generating units (\u201cCGUs\u201d) expected to benefit from the synergies of the combination, where the CGU represents the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill is reviewed for impairment at least annually as a matter of course even if there is no indication of impairment, and whenever an event or change in circumstances occurs which indicates a potential impairment. For impairment testing, the carrying value of goodwill is compared to the recoverable amount. The recoverable amount is the higher of value-in-use and the fair value less costs of disposal. Any impairment loss is recognised immediately in profit or loss and is not subsequently reversed. On disposal of an operation within a group of CGUs to which goodwill has been allocated, the goodwill associated with that operation is included in the carrying amount of the operation when determining the gain or loss on disposal. It is measured based on the relative values of the operation disposed of and the portion of the CGU retained. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-506": { "value": "Intangible assets acquired as part of a business combination Intangible assets acquired as part of a business combination are recognised where they are separately identifiable and can be measured reliably. Acquired intangible assets consist primarily of contractual relationships such as customer relationships and distribution channels. Such items are capitalised at their fair value, represented by the estimated net present value of the future cash flows from the relevant relationships acquired at the date of acquisition. Brands and similar items acquired as part of a business combination are capitalised at their fair value based on a \u2018relief from royalty\u2019 valuation methodology. Subsequent to initial recognition, acquired intangible assets are measured at cost less amortisation and any recognised impairment losses. Amortisation is recognised at rates calculated to write off the cost or valuation less estimated residual value, using a straight-line method over their estimated useful lives as set out below: \u00b7 Distribution channels 8 years \u00b7 Customer relationships 7-10 years \u00b7 Brands 5 years The economic lives are determined by considering relevant factors such as usage of the asset, product life cycles, potential obsolescence, competitive position and stability of the industry. The amortisation period is re-evaluated at the end of each financial year. Internally developed software There are a number of factors taken into account when considering whether internally developed software meets the recognition criteria in IAS 38 Intangible Assets. Where, for example, a third-party provider retains ownership of the software, this will not meet the control criterion in the standard (i.e. the power to obtain benefits from the asset) and the costs will be expensed as incurred. Where it is capitalised, internally developed software is held at cost less accumulated amortisation and impairment losses. Such software is recognised in the statement of financial position if, and only if, it is probable that the relevant future economic benefits attributable to the software will flow to the Group and its cost can be measured reliably. Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of the relevant software, which range between three and five years, depending on the nature and use of the software. Research and development Costs incurred in the research phase are expensed, whereas costs incurred in the development phase are capitalised, subject to meeting specific criteria, as set out in the relevant accounting standards and guidance. In particular, for the costs to be capitalised, it is a requirement that future economic benefits can be identified as resulting from the development expenditure. Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the relevant software, which range from three to five years, depending on the nature and use of the software. Subsequent expenditure Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. 5(m): Goodwill and intangible assets continued Impairment testing for intangible assets For intangible assets with finite lives, impairment charges are recognised where evidence of impairment is observed. Indicators of impairment can be based on external factors, such as significant adverse changes to the asset as part of the overall business environment and internal factors, such as worse than expected performance reflected in the Group\u2019s three-year Business Plan. If an indication of impairment exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The recoverable amount is calculated as the higher of fair value less costs to sell and value-in-use. If the recoverable amount of an intangible asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense in the income statement immediately. Where an intangible asset is not yet available for use, it is subject to an annual impairment test by comparing the carrying value with the recoverable amount. The recoverable amount is estimated by considering the ability of the asset to generate sufficient future economic benefits to recover the carrying value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-443": { "value": "5(n): Property, plant and equipment Aside from right-of-use assets, property, plant and equipment consist principally of computer equipment and fixtures and fittings and are stated at cost less accumulated depreciation and any recognised impairment losses. Cost includes the original purchase price of the asset and the costs of bringing the asset to its working condition for its intended use. Depreciation is charged to profit or loss on a straight-line basis to write down the cost of the asset to its residual value over its estimated useful life. The following maximum useful lives are applied: \u00b7 Property leased by the Group \u2013 length of the lease \u00b7 Plant and equipment \u2013 5 to 10 years Leased plant and equipment is never depreciated over a period longer than the term of the lease. Management determines useful lives and residual values for assets when they are acquired, based on experience of similar assets and taking into account other relevant factors such as any expected changes in technology. The Group assesses and, where appropriate, adjusts the useful life, residual value and depreciation method for property plant and equipment on an annual basis. Items of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. Where the carrying amount of an asset is greater than its estimated recoverable amount, which represents the higher of the asset\u2019s fair value less costs of disposal and value-in-use, it is written down immediately to its recoverable amount and an impairment loss is recognised in the income statement. Impaired non-financial assets, except goodwill, are reviewed for possible reversal of the impairment at each reporting date. On derecognition of an item of equipment, any gain or loss on disposal, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is included in profit or loss at the date of the disposal. Items of property and equipment that are not owned by the Group but are held under lease arrangements are accounted for in accordance with the accounting policy on leases. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-444": { "value": "5(o): Leases Under IFRS 16, the Group assesses whether a contract is or contains a lease at inception of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess where a contract conveys the right to control the use of an identified asset, the Group assesses whether: \u00b7 the contract involves the use of an identified asset which may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; \u00b7 the Group has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and \u00b7 the Group has the right to direct the use of the asset. For lessee contracts, the right-of-use asset is initially measured at cost, which comprises the initial amount of lease liability, adjusted for any lease payments made at or before the commencement date, and any initial direct costs incurred. Adjustments are also made, where appropriate, to recognise provisions for property restoration costs and lease incentives received such as rent-free periods. The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the asset-specific incremental borrowing rates. Subsequent to lease commencement, the Group measures the right-of-use asset using a cost model, whereby the asset is held at cost less accumulated depreciation and any accumulated impairment. Depreciation is charged to the income statement on a straight-line basis to write down the cost of the right-of-use asset to its residual value over its estimated useful life which is dependent on the length of the lease. In addition, the carrying amount of the right-of-use asset may be adjusted for certain remeasurements of the lease liability. The lease liability is subsequently measured at amortised cost using the effective interest method and also reflects any lease modifications or reassessments. The Group presents its right-of-use assets within \u201cProperty, plant and equipment\u201d and lease liabilities within \u201cBorrowings and lease liabilities\u201d in the statement of financial position. The Group currently has material lease commitments of varying durations for the rental of a number of office buildings. The Group\u2019s future lease cash outflows are not materially exposed to variable lease payments, low value or short-term leases, residual value guarantees or restrictions imposed by a lease contract or sale and leaseback transactions. 5(o): Leases continued Subleases Where the Group sublets a leased asset to a third party, it accounts for its interest in the sublease separately from the head lease. In determining whether a sublease is a finance or operating lease, the Group assesses whether the sublease has transferred substantially all the risk and rewards of the right-of-use asset arising from the head lease to the sublessee. Where the sublease does transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group derecognises the right-of-use asset and a net investment in finance leases is recognised. The net investment in finance lease is calculated as the present value of the future lease payments receivable under the sublease. Any difference between the initial value of the net investment in finance leases and the right-of-use asset derecognised is recognised immediately in the income statement. Interest is calculated on the net investment in finance lease using the discount rate and is recognised in the income statement as finance income. Where the sublease does not transfer substantially all the risk and rewards of the right-of-use asset to the sublessee, the Group continues to recognise the right-of-use asset. The sublease is accounted for as an operating lease with the lease payments received recognised as other income in the income statement. Lease incentives granted are recognised as part of the rental income and are spread over the lease term. The Group had no material subleases at 31 December 2022 (2021: none). ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-445": { "value": "5(p): Assets and liabilities held for sale and discontinued operations Assets (and disposal groups) are classified as held for sale if their carrying amount is expected to be recovered by means of a sale rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year of the date of classification. Assets and liabilities held for sale are presented separately in the consolidated statement of financial position. Assets and liabilities (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and their fair value less costs to sell. No depreciation or amortisation is charged on a non-current asset while classified as held for sale or while part of a disposal group classified as held for sale. The Group classifies areas of the business as discontinued operations where they have been disposed of or are classified as held for sale at the year end, which either represent a separate major line of business or geographical area or are part of a plan to dispose of one or are subsidiaries acquired exclusively with a view to resale. When an asset (or disposal group) ceases to be classified as held for sale, the individual assets and liabilities cease to be shown separately in the statement of financial position at the end of the year in which the classification changes. Comparatives are not restated. If the line of business was previously presented as a discontinued operation and subsequently ceases to be classified as held for sale, profit and loss and cash flows of the comparative period are restated to show that line of business as a continuing operation. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-507": { "value": "5(p): Assets and liabilities held for sale and discontinued operations Assets (and disposal groups) are classified as held for sale if their carrying amount is expected to be recovered by means of a sale rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year of the date of classification. Assets and liabilities held for sale are presented separately in the consolidated statement of financial position. Assets and liabilities (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and their fair value less costs to sell. No depreciation or amortisation is charged on a non-current asset while classified as held for sale or while part of a disposal group classified as held for sale. The Group classifies areas of the business as discontinued operations where they have been disposed of or are classified as held for sale at the year end, which either represent a separate major line of business or geographical area or are part of a plan to dispose of one or are subsidiaries acquired exclusively with a view to resale. When an asset (or disposal group) ceases to be classified as held for sale, the individual assets and liabilities cease to be shown separately in the statement of financial position at the end of the year in which the classification changes. Comparatives are not restated. If the line of business was previously presented as a discontinued operation and subsequently ceases to be classified as held for sale, profit and loss and cash flows of the comparative period are restated to show that line of business as a continuing operation. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-446": { "value": "5(q): Provisions and contingent liabilities Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more probable than not that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are measured at management\u2019s best estimate of the expenditure required to settle the obligation at the reporting date. Where the effect of the time value of money is material, provisions are discounted and represent the present value of the expected expenditure. Provisions are not recognised for future operating costs or losses. The Group recognises specific provisions where they arise for the situations outlined below: \u00b7 Client compensation and related costs, when the Group compensates clients in the context of providing fair customer outcomes. \u00b7 Onerous contracts, when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the obligations under the contract. \u00b7 Corporate restructuring, only if the Group has approved a detailed formal plan and raised a valid expectation among those parties directly affected, that the plan will be carried out either by having commenced implementation or by publicly announcing the plan\u2019s main features. Such provisions include the direct expenditure arising from the restructuring, such as employee termination payments but not those costs associated with the ongoing activities of the Group. \u00b7 Legal uncertainties and the settlement of other claims. \u00b7 Property provisions, where the Group has an obligation to restore a property to its original condition at the end of the lease. Contingent liabilities are possible obligations of the Group of which the timing and amount are subject to significant uncertainty. Contingent liabilities are not recognised in the consolidated statement of financial position, unless they are assumed by the Group as part of a business combination. They are, however, disclosed, unless they are considered to be remote. If a contingent liability becomes probable and the amount can be reliably measured it is no longer treated as contingent and it is recognised as a liability. Contingent assets, which are possible benefits to the Group, are only disclosed if it is probable that the Group will receive the benefit. If such a benefit becomes virtually certain, it is no longer considered contingent and is recognised on the consolidated statement of financial position as an asset. ", "dimensions": { "concept": "quilterplc:DescriptionOfAccountingPolicyForProvisionsAndContingentLiabilities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-508": { "value": "5(r): Foreign currency translation The Group\u2019s presentation currency is pounds sterling. The functional currency of the Group\u2019s foreign operations is the currency of the primary economic environment in which these entities operate. The Parent Company functional currency is pounds sterling. Income statements and cash flows of foreign entities are translated into the Group\u2019s presentation currency at average exchange rates for the year and their statements of financial position are translated at the year-end exchange rates. Exchange rate differences arising from the translation of the net investment in foreign subsidiaries are recognised in other comprehensive income and taken to the currency translation reserve which forms part of other reserves within equity. To the extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders\u2019 equity. On disposal of a foreign entity, exchange differences are transferred out of this reserve to the income statement as part of the gain or loss on sale. Foreign currency transactions are converted into the relevant functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at exchange rates prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the functional currency at the exchange rates prevailing at the dates the fair values were determined. Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost are converted into the functional currency at the rate of exchange at the time of the initial recognition of the asset and liability and are not subsequently retranslated. Exchange gains and losses on the translation and settlement during the year of foreign currency assets and liabilities are recognised in profit or loss. Exchange differences for non-monetary items are recognised in the statement of other comprehensive income when the changes in the fair value of the non-monetary item are recognised in the statement of other comprehensive income, and in profit or loss if the changes in fair value of the non-monetary item are recognised in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-447": { "value": "5(r): Foreign currency translation The Group\u2019s presentation currency is pounds sterling. The functional currency of the Group\u2019s foreign operations is the currency of the primary economic environment in which these entities operate. The Parent Company functional currency is pounds sterling. Income statements and cash flows of foreign entities are translated into the Group\u2019s presentation currency at average exchange rates for the year and their statements of financial position are translated at the year-end exchange rates. Exchange rate differences arising from the translation of the net investment in foreign subsidiaries are recognised in other comprehensive income and taken to the currency translation reserve which forms part of other reserves within equity. To the extent that these gains and losses are effectively hedged, the cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders\u2019 equity. On disposal of a foreign entity, exchange differences are transferred out of this reserve to the income statement as part of the gain or loss on sale. Foreign currency transactions are converted into the relevant functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the relevant functional currency at exchange rates prevailing at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into the functional currency at the exchange rates prevailing at the dates the fair values were determined. Non-monetary assets and liabilities denominated in foreign currencies that are stated at historical cost are converted into the functional currency at the rate of exchange at the time of the initial recognition of the asset and liability and are not subsequently retranslated. Exchange gains and losses on the translation and settlement during the year of foreign currency assets and liabilities are recognised in profit or loss. Exchange differences for non-monetary items are recognised in the statement of other comprehensive income when the changes in the fair value of the non-monetary item are recognised in the statement of other comprehensive income, and in profit or loss if the changes in fair value of the non-monetary item are recognised in profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-448": { "value": "5(s): Share capital Equity instruments Shares are classified as equity instruments when there is no contractual obligation to deliver cash or other assets to another entity on terms that may be unfavourable. The value of the Company\u2019s share capital consists of the number of Ordinary Shares in issue multiplied by their nominal value. The difference between the proceeds received on the issue of the shares and the nominal value of the shares issued is recorded in share premium. Share issue costs Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds of the issue and disclosed where material. Dividends Dividends are distributions of profit to holders of the Group\u2019s share capital and as a result are recognised as a deduction in equity. Dividends payable to holders of equity instruments are recognised in the period in which they are authorised or approved. Interim dividends payable to holders of the Group\u2019s Ordinary Share capital are announced with the half-year results and authorised by the Directors of the Parent Company. The final dividend is announced with the Annual Report and typically requires shareholder approval at the Annual General Meeting. For this reason, it is not included as a liability in the annual financial statements for the year to which the final dividend relates. Shares held by trusts Shares in the Parent Company that are held by the Employee Benefit Trust (\u201cEBT\u201d) are treated as \u201cOwn shares\u201d. The EBT purchases shares in the Parent Company for delivery to employees under employee incentive plans. Purchased shares are recognised as a deduction from equity at the price paid for them. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-509": { "value": "Dividends Dividends are distributions of profit to holders of the Group\u2019s share capital and as a result are recognised as a deduction in equity. Dividends payable to holders of equity instruments are recognised in the period in which they are authorised or approved. Interim dividends payable to holders of the Group\u2019s Ordinary Share capital are announced with the half-year results and authorised by the Directors of the Parent Company. The final dividend is announced with the Annual Report and typically requires shareholder approval at the Annual General Meeting. For this reason, it is not included as a liability in the annual financial statements for the year to which the final dividend relates. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-449": { "value": "5(t): Earnings per share Basic earnings per share are calculated by dividing the profit attributable to the Ordinary Shareholders of the Parent Company by the weighted average number of Ordinary Shares in issue during the year, excluding Ordinary Shares held within employee benefit trusts (\u201cEBTs\u201d) and shares held in consolidated funds (\u201cOwn shares\u201d). Own shares are deducted for the purpose of calculating both basic and diluted EPS. Diluted earnings per share recognises the dilutive impact of shares awarded and options granted to employees under share-based payment arrangements, to the extent they have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full year, and are calculated by increasing the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential Ordinary Shares, notably those related to employee share schemes. The Group is also required to calculate HEPS in accordance with the Johannesburg Stock Exchange (\u201cJSE\u201d) Listing Requirements, determined by reference to the South African Institute of Chartered Accountants\u2019 circular 1/2021 Headline Earnings. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used measure of earnings in South Africa. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-450": { "value": "6: Business combinations 6(a): Business disposals Year ended 31 December 2022 There have been no material disposals of businesses during the year ended 31 December 2022. Year ended 31 December 2021 On 30 November 2021, the Group completed the sale of Quilter International to Utmost Group for consideration of \u00a3481 million. The Group recognised a profit on disposal of \u00a389 million. Provisions established in respect of this disposal are shown in note 28. Separation, migration and decommissioning expenses of \u00a319 million incurred as a result of the disposal were included within Other operating and administrative expenses in the discontinued operations income statement for 2021. Profit on sale of operations Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Quilter International and Single Strategy business Quilter International and Single Strategy business\u00b9 Quilter International Consideration received \u2013 481 Less: transaction costs \u2013 (17) Net proceeds from sale \u2013 464 Carrying value of net assets disposed of \u2013 (324) Goodwill allocated and disposed of \u2013 (50) Recycling of foreign currency translation reserve \u2013 (1) Profit on sale of Quilter International \u2013 89 Change in accrued expenses in relation to the Single Strategy business (sold in 2018) \u2013 1 Profit on sale of operations before tax \u2013 90 Separation, migration and decommissioning costs \u2013 (19) Profit on disposal after separation, migration and decommissioning costs \u2013 71 1 In 2021, the Group also sold LighthouseCarrwood Limited generating a profit of \u00a32 million which is not reflected in the table above as the former subsidiary\u2019s activities did not represent a major line of business and therefore is regarded as being part of the Group\u2019s continuing operations. 6: Business combinations continued 6(b): Discontinued operations \u2013 income statement In the prior year, the Group\u2019s discontinued operations principally related to Quilter International, the sale of which completed on 30 November 2021. Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Income Gross earned premiums \u2013 1 Premiums ceded to reinsurers \u2013 (1) Fee income and other income from service activities 9(a) \u2013 169 Investment return 9(b) \u2013 1,816 Other income \u2013 1 Total income \u2013 1,986 Expenses Change in investment contract liabilities 27 \u2013 (1,818) Fee and commission expenses, and other acquisition costs \u2013 (72) Other operating and administrative expenses \u2013 (55) Total expenses \u2013 (1,945) Profit on sale of operations before tax 6(a) \u2013 90 Profit before tax attributable to equity holders from discontinued operations \u2013 131 Profit after tax from discontinued operations \u2013 131 Attributable to: Equity holders of Quilter plc \u2013 131 Earnings per Ordinary Share on profit attributable to Ordinary Shareholders of Quilter plc Basic \u2013 from discontinued operations (pence) 12(b) \u2013 8.0 Diluted \u2013 from discontinued operations (pence) 12(b) \u2013 7.8 6(c): Discontinued operations \u2013 statement of comprehensive income Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Profit after tax \u2013 131 Total comprehensive income from discontinued operations \u2013 131 6(d): Discontinued operations \u2013 net cash flows Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Total net cash flows from operating activities \u2013 276 Total net cash flows from investing activities \u2013 (411) Total net cash flows from financing activities \u2013 (2) Net decrease in cash and cash equivalents \u2013 (137) 6(e): Assets and liabilities held for sale Assets classified as held for sale at 31 December 2022 relate to a leasehold interest in an office property which is vacant for which the Group is actively seeking a buyer. There were no assets or liabilities classified as held for sale at 31 December 2021. 6: Business combinations continued 6(f): Business acquisitions There have been no material acquisitions of businesses during the year ended 31 December 2022 or the year ended 31 December 2021. Contingent consideration arising from historical business acquisitions: The table below details the movements in the contingent consideration balance during the current and prior year arising from the business acquisitions in previous years. Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Opening balance 5 16 Payments (5) (7) Financing interest charge \u2013 1 Unused amounts reversed and other movements \u2013 (5) Closing balance \u2013 5 Contingent consideration represents the Group\u2019s best estimate of the amount payable in relation to each acquisition discounted to net present value. The basis used for each acquisition varies but includes payments based on a percentage of the level of assets under administration, funds under management and levels of ongoing fee income at future dates. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-510": { "value": "6(b): Discontinued operations \u2013 income statement In the prior year, the Group\u2019s discontinued operations principally related to Quilter International, the sale of which completed on 30 November 2021. Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Income Gross earned premiums \u2013 1 Premiums ceded to reinsurers \u2013 (1) Fee income and other income from service activities 9(a) \u2013 169 Investment return 9(b) \u2013 1,816 Other income \u2013 1 Total income \u2013 1,986 Expenses Change in investment contract liabilities 27 \u2013 (1,818) Fee and commission expenses, and other acquisition costs \u2013 (72) Other operating and administrative expenses \u2013 (55) Total expenses \u2013 (1,945) Profit on sale of operations before tax 6(a) \u2013 90 Profit before tax attributable to equity holders from discontinued operations \u2013 131 Profit after tax from discontinued operations \u2013 131 Attributable to: Equity holders of Quilter plc \u2013 131 Earnings per Ordinary Share on profit attributable to Ordinary Shareholders of Quilter plc Basic \u2013 from discontinued operations (pence) 12(b) \u2013 8.0 Diluted \u2013 from discontinued operations (pence) 12(b) \u2013 7.8 6(c): Discontinued operations \u2013 statement of comprehensive income Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Profit after tax \u2013 131 Total comprehensive income from discontinued operations \u2013 131 6(d): Discontinued operations \u2013 net cash flows Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Total net cash flows from operating activities \u2013 276 Total net cash flows from investing activities \u2013 (411) Total net cash flows from financing activities \u2013 (2) Net decrease in cash and cash equivalents \u2013 (137) 6(e): Assets and liabilities held for sale Assets classified as held for sale at 31 December 2022 relate to a leasehold interest in an office property which is vacant for which the Group is actively seeking a buyer. There were no assets or liabilities classified as held for sale at 31 December 2021. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-542": { "value": "6(e): Assets and liabilities held for sale Assets classified as held for sale at 31 December 2022 relate to a leasehold interest in an office property which is vacant for which the Group is actively seeking a buyer. There were no assets or liabilities classified as held for sale at 31 December 2021. ", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-451": { "value": "7: Alternative performance measures (\u201cAPMs\u201d) 7(a): Adjusted profit before tax and reconciliation to profit after tax Basis of preparation of adjusted profit before tax Adjusted profit before tax is one of the Group\u2019s alternative performance measures and represents the Group\u2019s IFRS profit, adjusted for specific items that management considers to be outside of the Group\u2019s normal operations or one-off in nature, as detailed in note 7(b). Adjusted profit before tax does not provide a complete picture of the Group\u2019s financial performance, which is disclosed in the IFRS income statement, but is instead intended to provide additional comparability and understanding of the financial results. Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 Continuing operations \u00a3m Discontinued operations\u00b9 \u00a3m Total \u00a3m Affluent 105 111 50 161 High Net Worth 45 56 \u2013 56 Head Office (16) (29) \u2013 (29) Adjusted profit before tax 134 138 50 188 Reallocation of Quilter International costs \u2013 (10) 10 \u2013 Adjusted profit before tax after reallocation 8(b) 134 128 60 188 Adjusting items: Impact of acquisition and disposal-related accounting 7(b)(i) (42) (41) \u2013 (41) Profit on business disposals 2 6(a) \u2013 2 90 92 Business transformation costs 7(b)(ii) (30) (51) (19) (70) Managed separation costs 7(b)(iii) \u2013 (2) \u2013 (2) Finance costs 7(b)(iv) (10) (10) \u2013 (10) Policyholder tax adjustments 7(b)(v) 138 (7) \u2013 (7) Voluntary customer repayments 7(b)(vi) (6) \u2013 \u2013 \u2013 Other adjusting items 7(b)(vii) (1) \u2013 \u2013 \u2013 Exchange rate gain (ZAR/GBP) 7(b)(viii) 4 \u2013 \u2013 \u2013 Customer remediation 7(b)(ix) 12 (7) \u2013 (7) Total adjusting items before tax 65 (116) 71 (45) Profit before tax attributable to equity holders 199 12 131 143 Tax attributable to policyholder returns 11(a) (134) 73 \u2013 73 Income tax credit/(expense) 11(a,b) 110 (62) \u2013 (62) Profit after tax 3 175 23 131 154 1 2021 discontinued operations include the results of Quilter International. 2 In 2021, the discontinued operations profit on business disposals of \u00a390 million resulted from the disposal of Quilter International. The \u00a32 million continuing operations profit on business disposals resulted from the disposal of LighthouseCarrwood Limited. See note 6(a) for details. 3 IFRS profit after tax. 7: Alternative performance measures (\u201cAPMs\u201d) continued 7(b): Adjusting items In determining adjusted profit before tax, the Group\u2019s IFRS profit before tax is adjusted for specific items that management considers to be outside of the Group\u2019s normal operations or one-off in nature. These are detailed below. 7(b)(i): Impact of acquisition and disposal-related accounting Goodwill and other acquired intangibles are recognised on the acquisition of a business and represent the premium paid over the fair value of the Group\u2019s share of the identifiable assets and liabilities acquired at the date of acquisition (as recognised under IFRS 3 Business Combinations). The Group excludes any impairment of goodwill from adjusted profit as well as the amortisation and impairment of acquired intangible assets, any acquisition costs, finance costs related to the discounting of contingent consideration and incidental items relating to past disposals. The effect of these adjustments to determine adjusted profit are summarised below. All adjustments are in respect of continuing operations. Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Amortisation of other acquired intangible assets 14 42 45 Fair value gains on revaluation of contingent consideration \u2013 (5) Unwinding of discount on contingent consideration \u2013 1 Total impact of acquisition and disposal-related accounting 42 41 7(b)(ii): Business transformation costs Business transformation costs include four key items: costs associated with the UK Platform Transformation Programme, Optimisation programme costs, Business Simplification costs and business separation costs following disposal of Quilter International. For the year ended 31 December 2022, these costs totalled \u00a330 million (31 December 2021: \u00a370 million) in aggregate, the principal components of which are described below: UK Platform Transformation Programme \u2013 31 December 2022: \u00a3nil, 31 December 2021: \u00a328 million The Platform Transformation Programme concluded in 2021 with lifetime costs of \u00a3202 million. No further costs were incurred in 2022. Optimisation programme costs \u2013 31 December 2022: \u00a36 million, 31 December 2021: \u00a322 million The Optimisation programme commenced in 2018 to provide closer business integration, create central support, rationalise technology and reduce third-party spend. The programme has now achieved its target of delivering annualised run-rate cost savings of \u00a365 million with total implementation costs since inception of \u00a387 million. This programme concluded during 2022. Business Simplification costs \u2013 31 December 2022: \u00a317 million, 31 December 2021: \u00a3nil The Business Simplification programme is anticipated to reduce operating costs by \u00a345 million on a run-rate basis, with implementation costs expected to be \u00a355 million. The Group continues to simplify its structures and organisation to support the two business segments. To date, the programme has delivered \u00a323 million of annualised run-rate cost savings with an implementation cost of \u00a317 million. Restructuring costs following the disposal of Quilter Life Assurance \u2013 31 December 2022: \u00a33 million, 31 December 2021: \u00a31 million Following the sale of Quilter Life Assurance in 2019, the Group entered into a Transitional Service Agreement with the buyer, ReAssure. During the year ended 31 December 2022, the Group recognised \u00a33 million for property exit costs following the conclusion of the Transitional Service Agreement. Business separation costs following disposal of Quilter International \u2013 31 December 2022: \u00a3nil, 31 December 2021: \u00a319 million The costs of business separation arise from the process to separate Quilter International\u2019s infrastructure, which is complex and covers a wide range of areas including people, IT systems, data and contracts facilities. A programme team has been established to ensure the transformation of these areas to the acquirer. These provisions have been based on external quotations and estimations, together with estimates of the time required for incremental resource costs to achieve the separation. The costs are predominantly expected to occur over a three-year period. The Group has provided for the future restructuring costs arising due to the sale of Quilter International to Utmost Group on 30 November 2021, including the cost of migrating IT systems and data to the acquirer, as the Transitional Service Agreement with Utmost Group (the acquirer) runs off and the remaining Quilter business is restructured following the disposal. Investment in business costs \u2013 31 December 2022: \u00a34 million, 31 December 2021: \u00a3nil Investment in business costs of \u00a34 million were incurred in 2022 as the Group continues to enable and support advisers and clients and improve productivity through better utilisation of technology. 7(b)(iii): Managed separation costs For the year ended 31 December 2022, no managed separation costs were incurred (31 December 2021: \u00a32 million). In prior periods, these one-off costs related to the Group\u2019s separation from Old Mutual and were excluded from adjusted profit because they related to a fundamental restructuring of the Group and were not representative of the operating activity of the Group. No further costs associated with managed separation are anticipated. 7: Alternative performance measures (\u201cAPMs\u201d) continued 7(b)(iv): Finance costs The nature of much of the Group\u2019s operations means that, for management\u2019s decision-making and internal performance management, the effects of interest costs on external borrowings are removed when calculating adjusted profit. For the year ended 31 December 2022, finance costs were \u00a310 million (31 December 2021: \u00a310 million). 7(b)(v): Policyholder tax adjustments For the year ended 31 December 2022, the total amount of policyholder tax adjustments to adjusted profit is \u00a3138 million charge (31 December 2021: \u00a37 million credit). Adjustments to policyholder tax are made to remove distortions arising from market volatility that can, in turn, lead to volatility in the policyholder tax charge between periods. The recognition of the income received from policyholders (which is included within the Group\u2019s income) to fund the policyholder tax liability can vary in timing to the recognition of the corresponding tax expense, creating volatility in the Group\u2019s IFRS profit or loss before tax attributable to equity holders. Note 11(a) provides further information on the impact of markets on the policyholder tax charge. Adjustments are also made to remove policyholder tax distortions from other non-operating adjusting items. 7(b)(vi): Voluntary customer repayment For the year ended 31 December 2022, these costs were \u00a36 million (31 December 2021: \u00a3nil) and relate to a change in business policy. The voluntary repayments represent amounts to be paid to customers relating to revenue previously recognised in respect of Final Plan Closure receipts. 7(b)(vii): Other adjusting items For the year ended 31 December 2022, these costs were \u00a31 million (31 December 2021: \u00a3nil) and relate to the impairment of an indemnification asset. 7(b)(viii): Exchange rate gain (ZAR/GBP) For the year ended 31 December 2022, income of \u00a34 million was received (31 December 2021: \u00a3nil) and related to a foreign exchange gain on cash held in South African Rand in preparation for the capital return and final dividend payments in May 2022. Cash was converted to South African Rand upon announcement of the details of the capital return and dividend payment to provide an economic hedge for the Group. The foreign exchange gain is fully offset by an equal amount taken directly to retained earnings. See note 4 for further detail. 7(b)(ix): Customer remediation Lighthouse pension transfer advice provision \u2013 31 December 2022: net income \u00a312 million, 31 December 2021: net expenses \u00a37 million In 2022, insurance proceeds in relation to claims in respect of legal liabilities arising in connection with Lighthouse\u2019s DB to DC pension transfer advice cases have been received, contributing \u00a312 million to the Group\u2019s profit before tax. These have been excluded from adjusted profit on the basis that the advice activities to which the charge and benefit relate took place prior to the Group\u2019s acquisition of the business. The provision for the redress of British Steel Pension Scheme cases and other DB to DC pension transfer cases, excluding the impact of payments made, has decreased by a further \u00a34 million in the year, which has been recognised in the income statement as a reduction of expenses (31 December 2021: \u00a37 million expense). This decrease reflects the impact of the final redress calculations performed compared with the provision estimated, as part of the ongoing skilled person review, and an estimate for further customer redress following the skilled person\u2019s recommendation of a review of additional cases. During the year, \u00a34 million of additional legal, consulting, and other costs were incurred. Further details of the provision are provided in note 28. 7(c): IFRS profit before tax from continuing operations (excluding amortisation, policyholder tax adjustments and other one-off items) For remuneration purposes, the Group uses IFRS profit before tax from continuing operations adjusted for specific items that management considers to be outside of the Group\u2019s normal operations or one-off in nature, as shown below. For further details refer to the Remuneration Report (page 95) and KPIs (page 14). Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m IFRS profit before tax attributable to equity holders (excluding amortisation, policyholder tax adjustments and other one-off items) 103 68 Adjusted for the following: Reallocation of Quilter International costs \u2013 (10) Profit on business disposals 6(a) \u2013 2 Impact of acquisition and disposal-related accounting 7(b)(i) (42) (41) Policyholder tax adjustments 7(b)(v) 138 (7) Profit before tax attributable to equity holders 199 12 7: Alternative performance measures (\u201cAPMs\u201d) continued 7(d): Reconciliation of IFRS income and expenses to \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d within adjusted profit This reconciliation shows how each line of the Group\u2019s consolidated IFRS income statement is allocated to the Group\u2019s APMs: Net management fees, Total net fee revenue and Operating expenses, which are all defined on pages 210 and 211 and form the Group\u2019s adjusted profit before tax for continuing operations. The IFRS income statement column in the table below, down to \u201cProfit before tax attributable to equity holders from continuing operations\u201d, reconciles to each line of the Group\u2019s consolidated income statement. Allocations are determined by management and aim to show the Group\u2019s sources of profit (net of relevant directly attributable expenses). These allocations remain consistent from period to period to ensure comparability, unless otherwise stated. Year ended 31 December 2022 Net mgmt . fees 1 \u00a3m Other revenue1 \u00a3m Total net fee revenue1 \u00a3m Operating expenses1 \u00a3m Adjusted profit before tax \u00a3m Consol. of funds2 \u00a3m Consolidated income statement \u00a3m Income Fee income and other income from service activities 548 95 643 \u2013 643 (62) 581 Investment return \u2013 (4,292) (4,292) \u2013 (4,292) (357) (4,649) Other income \u2013 5 5 21 26 2 28 Total income 548 (4,192) (3,644) 21 (3,623) (417) (4,040) Expenses Change in investment contract liabilities \u2013 4,318 4,318 \u2013 4,318 \u2013 4,318 Fee and commission expenses, and other acquisition costs (46) 1 (45) \u2013 (45) (9) (54) Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 \u2013 438 438 Other operating and administrative expenses (15) \u2013 (15) (557) (572) (12) (584) Finance costs \u2013 \u2013 \u2013 (13) (13) \u2013 (13) Total expenses (61) 4,319 4,258 (570) 3,688 417 4,105 Tax credit attributable to policyholder returns 134 \u2013 134 \u2013 134 \u2013 134 Profit before tax attributable to equity holders from continuing operations 621 127 748 (549) 199 \u2013 199 Adjusting items: Impact of acquisition and disposal-related accounting \u2013 \u2013 \u2013 42 42 Business transformation costs \u2013 \u2013 \u2013 30 30 Voluntary customer repayments \u2013 \u2013 \u2013 6 6 Other adjusting items \u2013 \u2013 \u2013 1 1 Finance costs \u2013 \u2013 \u2013 10 10 Exchange rate gain (ZAR/GBP) \u2013 (4) (4) \u2013 (4) Customer remediation \u2013 \u2013 \u2013 (12) (12) Policyholder tax adjustments (138) \u2013 (138) \u2013 (138) Adjusting items (138) (4) (142) 77 (65) Adjusted profit before tax \u2013 continuing operations 483 123 606 (472) 134 1The APMs \u201cNet Management Fees\u201d, \u201cOther revenue\u201d, \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d are commented on within the Financial review. 2Consolidation of funds shows the grossing up impact to the Group\u2019s consolidated income statement as a result of the consolidation of funds requirements, as described within note 5(a). This grossing up is excluded from the Group\u2019s adjusted profit. 7: Alternative performance measures (\u201cAPMs\u201d) continued 7(d): Reconciliation of IFRS income and expenses to \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d within adjusted profit continued Year ended 31 December 2021 Net mgmt. fees 1 \u00a3m Other revenue 1 \u00a3m Total net fee revenue 1 \u00a3m Operating expenses1 \u00a3m Adjusted profit before tax \u00a3m Consol. of funds 2 \u00a3m Consolidated income statement \u00a3m Income Fee income and other income from service activities 633 111 744 \u2013 744 (78) 666 Investment return \u2013 3,294 3,294 \u2013 3,294 708 4,002 Other income \u2013 1 1 15 16 2 18 Total income 633 3,406 4,039 15 4,054 632 4,686 Expenses Change in investment contract liabilities \u2013 (3,293) (3,293) \u2013 (3,293) \u2013 (3,293) Fee and commission expenses, and other acquisition costs (52) 4 (48) \u2013 (48) (13) (61) Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 \u2013 (599) (599) Other operating and administrative expenses (15) 1 (14) (602) (616) (20) (636) Finance costs \u2013 \u2013 \u2013 (14) (14) \u2013 (14) Total expenses (67) (3,288) (3,355) (616) (3,971) (632) (4,603) Profit on business disposal \u2013 2 2 \u2013 2 \u2013 2 Tax expense attributable to policyholder returns (73) \u2013 (73) \u2013 (73) \u2013 (73) Profit before tax attributable to equity holders from continuing operations 493 120 613 (601) 12 \u2013 12 Adjusting items: Impact of acquisition and disposal-related accounting \u2013 \u2013 \u2013 41 41 Profit on business disposal \u2013 (2) (2) \u2013 (2) Business transformation costs \u2013 \u2013 \u2013 51 51 Managed separation costs \u2013 \u2013 \u2013 2 2 Finance costs \u2013 \u2013 \u2013 10 10 Customer remediation \u2013 \u2013 \u2013 7 7 Policyholder tax adjustments 7 \u2013 7 \u2013 7 Adjusting items 7 (2) 5 111 116 Adjusted profit before tax after reallocation 500 118 618 (490) 128 Reallocation of Quilter International costs3 \u2013 \u2013 \u2013 10 10 Adjusted profit before tax \u2013 continuing operations 500 118 618 (480) 138 1 The APMs \u201cNet Management Fees\u201d, \u201cOther revenue\u201d, \u201cTotal net fee revenue\u201d and \u201cOperating expenses\u201d are commented on within the Financial review. 2 Consolidation of funds shows the grossing up impact to the Group\u2019s consolidated income statement as a result of the consolidation of funds requirements, as described within note 5(a). This grossing up is excluded from the Group\u2019s adjusted profit. 3 \u00a310 million of Other operating and administrative expenses previously reported in Quilter International are presented within continuing operations, as costs of this nature did not transfer to Utmost Group (the acquirer) on disposal. ", "dimensions": { "concept": "quilterplc:DisclosureOfAlternativePerformanceMeasures", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-452": { "value": "8: Segmental information 8(a): Segmental presentation The Group\u2019s operating segments comprise High Net Worth and Affluent, which is consistent with the manner in which the Group is structured and managed. For all reporting periods, these segments have been classified as continuing operations in the consolidated income statement. Head Office includes certain revenues and central costs that are not allocated to the segments. There have been no changes to the basis of segmentation for the periods presented within these consolidated financial statements. Adjusted profit before tax is an APM reported to the Group\u2019s management and Board. Management and the Board use additional performance indicators to assess the performance of each of the segments, including net client cash flows, assets under management and administration, total net fee revenue and operating margin. Consistent with internal reporting, income and expenses that are not directly attributable to a particular segment are allocated between segments where appropriate. The Group accounts for inter-segment income and transfers as if the transactions were with third parties at current market prices. Intra-group recharges in respect of operating and administration expenses within businesses disclosed as discontinued operations are not adjusted for potential future changes to the level of remaining costs following the disposal of those businesses. The segmental information in this note reflects the adjusted and IFRS profit measures for each operating segment as provided to management and the Board. Income is analysed in further detail for each operating segment in note 9. Continuing operations: High Net Worth This segment comprises Quilter Cheviot and Quilter Private Client Advisers. Quilter Cheviot provides discretionary investment management predominantly in the United Kingdom with bespoke investment portfolios tailored to the individual needs of High Net Worth clients, charities, companies and institutions through a network of branches in London and the regions. Investment management services are also provided by operations in the Channel Islands and the Republic of Ireland. Quilter Private Client Advisers provide financial advice for protection, mortgages, savings, investments and pensions predominantly to High Net Worth clients. Affluent This segment is comprised of Quilter Investment Platform, Quilter Investors and Quilter Financial Planning. Quilter Investment Platform is a leading investment platform provider of advice-based wealth management products and services in the UK, which serves a largely Affluent client base through advised multi-channel distribution. Quilter Investors is a leading provider of investment solutions in the UK multi-asset market. It develops and manages investment solutions in the form of funds for the Group and third-party clients. It has several fund ranges which vary in breadth of underlying asset class. Quilter Financial Planning is a restricted and independent financial adviser network including Quilter Financial Advisers and Lighthouse, providing mortgage and financial planning advice and financial solutions for both individuals and businesses through a network of intermediaries. It operates across all markets, from wealth management and retirement planning advice through to dealing with property wealth and personal and business protection needs. Head Office In addition to the Group\u2019s two operating segments, Head Office comprises the investment return on centrally held assets, central support function expenses, central core structural borrowings and certain tax balances. Discontinued operations Quilter International is excluded from the segmental information for the year ended 31 December 2021 as it was sold on 30 November 2021. See note 6 for further details. Quilter International was Quilter\u2019s cross-border business, focusing on High Net Worth and Affluent local clients and expatriates in the UK, Asia, the Middle East, Europe and Latin America. 8: Segmental information continued 8(b)(i): Adjusted profit statement \u2013 segmental information for the year ended 31 December 2022 The table below presents the Group\u2019s continuing operations split by operating segment, reconciling the segmented IFRS income statement (to \u201cProfit/(loss) before tax attributable to equity holders from continuing operations\u201d) to adjusted profit before tax. Operating segments Notes Affluent \u00a3m High Net Worth \u00a3m Head Office \u00a3m Consolidation adjustments 1 \u00a3m Consolidated income statement \u00a3m Income Fee income and other income from service activities 441 202 \u2013 (62) 581 Investment return (4,307) 9 8 (359) (4,649) Other income 112 3 5 (92) 28 Segmental income (3,754) 214 13 (513) (4,040) Expenses Change in investment contract liabilities 4,318 \u2013 \u2013 \u2013 4,318 Fee and commission expenses, and other acquisition costs (46) \u2013 \u2013 (8) (54) Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 438 438 Other operating and administrative expenses (410) (202) (53) 81 (584) Finance costs (3) \u2013 (12) 2 (13) Segmental expenses 3,859 (202) (65) 513 4,105 Profit/(loss) before tax from continuing operations 105 12 (52) \u2013 65 Tax credit attributable to policyholder returns 134 \u2013 \u2013 \u2013 134 Profit/(loss) before tax attributable to equity holders from continuing operations 239 12 (52) \u2013 199 Adjusted for non-operating items: Impact of acquisition and disposal-related accounting 7(b)(i) 10 32 \u2013 \u2013 42 Business transformation costs 7(b)(ii) \u2013 \u2013 30 \u2013 30 Finance costs 7(b)(iv) \u2013 \u2013 10 \u2013 10 Policyholder tax adjustments 7(b)(v) (138) \u2013 \u2013 (138) Voluntary customer repayments 7(b)(vi) 6 \u2013 \u2013 6 Other adjusting items 7(b)(vii) \u2013 1 \u2013 \u2013 1 Exchange rate gain (ZAR/GBP) 7(b)(viii) \u2013 \u2013 (4) \u2013 (4) Customer remediation 7(b)(ix) (12) \u2013 \u2013 (12) Adjusting items before tax (134) 33 36 \u2013 (65) Adjusted profit/(loss) before tax \u2013 continuing operations 105 45 (16) \u2013 134 1 Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds. 8: Segmental information continued 8(b)(ii): Adjusted profit statement \u2013 segmental information for the year ended 31 December 2021 Operating segments Notes Affluent \u00a3m High Net Worth \u00a3m Head Office \u00a3m Reallocation of Quilter International costs1 \u00a3m Consolidation adjustments2 \u00a3m Consolidated income statement \u00a3m Income Fee income and other income from service activities 532 213 \u2013 \u2013 (79) 666 Investment return 3,293 \u2013 1 \u2013 708 4,002 Other income 110 \u2013 \u2013 \u2013 (92) 18 Segmental income 3,935 213 1 \u2013 537 4,686 Expenses Change in investment contract liabilities (3,293) \u2013 \u2013 \u2013 \u2013 (3,293) Fee and commission expenses, and other acquisition costs (48) \u2013 \u2013 \u2013 (13) (61) Change in third-party interests in consolidated funds \u2013 \u2013 \u2013 \u2013 (599) (599) Other operating and administrative expenses (463) (187) (51) (10) 75 (636) Finance costs (4) \u2013 (10) \u2013 \u2013 (14) Segmental expenses (3,808) (187) (61) (10) (537) (4,603) Profit on sale of subsidiary 2 \u2013 \u2013 \u2013 \u2013 2 Profit/(loss) before tax from continuing operations 129 26 (60) (10) \u2013 85 Tax expense attributable to policyholder returns (73) \u2013 \u2013 \u2013 \u2013 (73) Profit/(loss) before tax attributable to equity holders from continuing operations 56 26 (60) (10) \u2013 12 Adjusted for non-operating items: Impact of acquisition and disposal-related accounting 7(b)(i) 11 30 \u2013 \u2013 \u2013 41 Net profit on business disposals and acquisitions (2) \u2013 \u2013 \u2013 \u2013 (2) Business transformation costs 7(b)(ii) 32 \u2013 19 \u2013 \u2013 51 Managed separation costs 7(b)(iii) \u2013 \u2013 2 \u2013 \u2013 2 Finance costs 7(b)(iv) \u2013 \u2013 10 \u2013 \u2013 10 Policyholder tax adjustments 7(b)(v) 7 \u2013 \u2013 \u2013 \u2013 7 Customer remediation 7(b)(ix) 7 \u2013 \u2013 \u2013 \u2013 7 Adjusting items before tax 55 30 31 \u2013 \u2013 116 Adjusted profit/(loss) before tax after reallocation 111 56 (29) (10) \u2013 128 Reallocation of Quilter International costs 6(b) \u2013 \u2013 \u2013 10 \u2013 10 Adjusted profit/(loss) before tax \u2013 continuing operations 111 56 (29) \u2013 \u2013 138 1\u00a310 million of Other operating and administrative expenses previously reported in Quilter International are presented within continuing operations, as costs of this nature did not transfer to Utmost Group (the acquirer) on disposal. 2Consolidation adjustments comprise the elimination of inter-segment transactions and the consolidation of investment funds. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-453": { "value": "9: Details of revenue This note gives further detail on the items appearing in the revenue section of the income statement. 9(a): Breakdown of income This note analyses the Group\u2019s income into further detail based on the types of fees earned and split by operating segment, which is aligned to the Group\u2019s client base. Year ended 31 December 2022 Affluent \u00a3m High Net Worth \u00a3m Head Office \u00a3m Consolidation adjustments \u00a3m Total continuing operations \u00a3m Premium-based fees 75 21 \u2013 \u2013 96 Fund-based fees1 356 181 \u2013 (62) 475 Fixed fees 2 \u2013 \u2013 \u2013 2 Other fee and commission income 8 \u2013 \u2013 \u2013 8 Fee income and other income from service activities 441 202 \u2013 (62) 581 Investment return (4,307) 9 8 (359) (4,649) Other income 112 3 5 (92) 28 Total income (3,754) 214 13 (513) (4,040) Year ended 31 December 2021 Affluent \u00a3m High Net Worth \u00a3m Head O ffice \u00a3m Consolidation adjustments \u00a3m Total continuing operations \u00a3m Discontinued operations \u00a3m Premium-based fees 87 24 \u2013 \u2013 111 45 Fund-based fees1 376 189 \u2013 (79) 486 81 Retrocessions received, intra-group \u2013 \u2013 \u2013 \u2013 \u2013 6 Fixed fees 2 \u2013 \u2013 \u2013 2 26 Exit fees \u2013 \u2013 \u2013 \u2013 \u2013 11 Other fee and commission income 67 \u2013 \u2013 \u2013 67 \u2013 Fee income and other income from service activities 532 213 \u2013 (79) 666 169 Investment return 3,293 \u2013 1 708 4,002 1,816 Other income 110 \u2013 \u2013 (92) 18 1 Total income 3,935 213 1 537 4,686 1,986 1 Income from fiduciary activities is included within fund-based fees. 9(b): Investment return This note analyses the investment return from the Group\u2019s investing activities. Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Interest and similar income Loans and advances \u2013 1 Investments and securities 70 69 Cash and cash equivalents 24 \u2013 Total interest and similar income 94 70 Dividend income 217 225 Foreign currency gains and losses 1 1 Total (losses)/gains on financial instruments mandatorily recognised at fair value through profit or loss (4,961) 3,706 Net investment (loss)/income \u2013 continuing operations (4,649) 4,002 Net investment income \u2013 discontinued operations \u2013 1,816 Total net investment (loss)/income (4,649) 5,818 ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-454": { "value": "10: Details of expenses This note provides further details in respect of the items appearing in the expenses section of the income statement. 10(a): Fee and commission expenses, and other acquisition costs This note analyses the fee and commission expenses and other acquisition costs. Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Fee and commission expense 9 13 Renewal commission \u2013 investment contracts 29 30 Retrocessions paid 17 21 Changes in contract costs 23 (1) (3) Fee and commission expenses, and other acquisition costs \u2013 continuing operations 54 61 Fee and commission expenses, and other acquisition costs \u2013 discontinued operations \u2013 72 Total fee and commission expenses, and other acquisition costs 54 133 10(b): Other operating and administrative expenses This note provides further details in respect of the items included within other operating and administrative expenses section of the income statement. Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Staff costs 10(c)(i) 297 341 Depreciation charge on right-of-use assets 15 9 10 Depreciation charge on other plant and equipment 15 6 6 Impairment of right-of-use assets 15 3 \u2013 Impairment of other plant and equipment 15 4 \u2013 Amortisation of software development costs 14(a) 2 2 Amortisation of other intangible assets 14(a) 42 45 Administration and other expenses 221 232 Other operating and administrative expenses \u2013 continuing operations 584 636 Other operating and administrative expenses \u2013 discontinued operations \u2013 55 Total other operating and administrative expenses 584 691 Administration and other expenses include business transformation costs for the year ended 31 December 2022 of \u00a330 million (2021: \u00a370 million), as detailed in note 7(b)(ii), as well as general operating expenses such as IT-related costs, premises and marketing. 10(c): Staff costs and other employee-related costs 10(c)(i): Staff costs Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Salaries 171 207 Bonus and incentive remuneration 45 61 Social security costs 28 27 Retirement obligations \u2013 defined contribution plans 18 17 Share-based payments \u2013 equity-settled 26(e) 24 19 Other 11 10 Staff costs \u2013 continuing operations 297 341 Staff costs \u2013 discontinued operations \u2013 19 Total staff costs 297 360 10: Details of expenses continued 10(c)(ii): Employee numbers Year ended 31 December 2022 Number Year ended 31 December 2021 Number The average number of persons employed by the Group was: Affluent 2,071 2,207 High Net Worth 914 917 Head Office 69 80 Continuing operations 3,054 3,204 Discontinued operations \u2013 645 Total average number of employees during the year 3,054 3,849 The monthly average number of persons employed by the Group is based on permanent employees and fixed-term contractors. 10(d): Auditors\u2019 remuneration Included in other operating and administrative expenses are fees paid to the Group\u2019s auditors. These can be categorised as follows: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Fees payable for audit services Group and Parent Company 1.3 1.5 Subsidiaries 2.1 2.2 Total fees for audit services 3.4 3.7 Fees for audit-related assurance services 1.2 0.8 Fees for non-audit services 0.2 0.5 Total Group auditors\u2019 remuneration \u2013 continuing operations 4.8 5.0 Total Group auditors\u2019 remuneration \u2013 discontinued operations \u2013 0.3 Total Group auditors\u2019 remuneration 1 4.8 5.3 1 All fees are presented net of VAT. 10(e): Finance costs This note analyses the interest costs on our borrowings and similar charges, all of which are valued at amortised cost. Finance costs comprise: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Term loans and other external debt 1 1 Subordinated debt securities (Tier 2 bond) 9 9 Interest payable on borrowed funds 10 10 Interest expense on lease liabilities 3 3 Other \u2013 1 Total finance costs 13 14 Finance costs represent the cost of interest and finance charges on the Group\u2019s borrowings from a number of relationship banks. More details regarding borrowed funds, including the interest rates payable, are shown in note 30. These costs are excluded from adjusted profit within the \u201cFinance costs\u201d adjusting item. Within other finance costs above is \u00a3nil (2021: \u00a31 million) relating to the impact of unwinding the discount rate on contingent consideration payable as a result of certain past acquisitions. These costs are excluded from adjusted profit within the \u201cImpact of acquisition and disposal-related accounting\u201d adjusting item as shown in note 7(b)(i). ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-511": { "value": "10(a): Fee and commission expenses, and other acquisition costs This note analyses the fee and commission expenses and other acquisition costs. Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Fee and commission expense 9 13 Renewal commission \u2013 investment contracts 29 30 Retrocessions paid 17 21 Changes in contract costs 23 (1) (3) Fee and commission expenses, and other acquisition costs \u2013 continuing operations 54 61 Fee and commission expenses, and other acquisition costs \u2013 discontinued operations \u2013 72 Total fee and commission expenses, and other acquisition costs 54 133 ", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-512": { "value": "10(b): Other operating and administrative expenses This note provides further details in respect of the items included within other operating and administrative expenses section of the income statement. Notes Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Staff costs 10(c)(i) 297 341 Depreciation charge on right-of-use assets 15 9 10 Depreciation charge on other plant and equipment 15 6 6 Impairment of right-of-use assets 15 3 \u2013 Impairment of other plant and equipment 15 4 \u2013 Amortisation of software development costs 14(a) 2 2 Amortisation of other intangible assets 14(a) 42 45 Administration and other expenses 221 232 Other operating and administrative expenses \u2013 continuing operations 584 636 Other operating and administrative expenses \u2013 discontinued operations \u2013 55 Total other operating and administrative expenses 584 691 Administration and other expenses include business transformation costs for the year ended 31 December 2022 of \u00a330 million (2021: \u00a370 million), as detailed in note 7(b)(ii), as well as general operating expenses such as IT-related costs, premises and marketing. ", "dimensions": { "concept": "quilterplc:DisclosureOfOtherOperatingAndAdministrativeExpenses", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-513": { "value": "10(c): Staff costs and other employee-related costs 10(c)(i): Staff costs Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Salaries 171 207 Bonus and incentive remuneration 45 61 Social security costs 28 27 Retirement obligations \u2013 defined contribution plans 18 17 Share-based payments \u2013 equity-settled 26(e) 24 19 Other 11 10 Staff costs \u2013 continuing operations 297 341 Staff costs \u2013 discontinued operations \u2013 19 Total staff costs 297 360 10(c)(ii): Employee numbers Year ended 31 December 2022 Number Year ended 31 December 2021 Number The average number of persons employed by the Group was: Affluent 2,071 2,207 High Net Worth 914 917 Head Office 69 80 Continuing operations 3,054 3,204 Discontinued operations \u2013 645 Total average number of employees during the year 3,054 3,849 The monthly average number of persons employed by the Group is based on permanent employees and fixed-term contractors. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-514": { "value": "10(d): Auditors\u2019 remuneration Included in other operating and administrative expenses are fees paid to the Group\u2019s auditors. These can be categorised as follows: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Fees payable for audit services Group and Parent Company 1.3 1.5 Subsidiaries 2.1 2.2 Total fees for audit services 3.4 3.7 Fees for audit-related assurance services 1.2 0.8 Fees for non-audit services 0.2 0.5 Total Group auditors\u2019 remuneration \u2013 continuing operations 4.8 5.0 Total Group auditors\u2019 remuneration \u2013 discontinued operations \u2013 0.3 Total Group auditors\u2019 remuneration 1 4.8 5.3 1 All fees are presented net of VAT. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-515": { "value": "10(e): Finance costs This note analyses the interest costs on our borrowings and similar charges, all of which are valued at amortised cost. Finance costs comprise: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Term loans and other external debt 1 1 Subordinated debt securities (Tier 2 bond) 9 9 Interest payable on borrowed funds 10 10 Interest expense on lease liabilities 3 3 Other \u2013 1 Total finance costs 13 14 Finance costs represent the cost of interest and finance charges on the Group\u2019s borrowings from a number of relationship banks. More details regarding borrowed funds, including the interest rates payable, are shown in note 30. These costs are excluded from adjusted profit within the \u201cFinance costs\u201d adjusting item. Within other finance costs above is \u00a3nil (2021: \u00a31 million) relating to the impact of unwinding the discount rate on contingent consideration payable as a result of certain past acquisitions. These costs are excluded from adjusted profit within the \u201cImpact of acquisition and disposal-related accounting\u201d adjusting item as shown in note 7(b)(i). ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-455": { "value": "11: Tax 11(a): Tax charged to the income statement Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Current tax United Kingdom 12 36 Overseas tax 1 1 Total current tax charge 13 37 Deferred tax Origination and reversal of temporary differences (120) 36 Effect on deferred tax of changes in tax rates (1) (12) Adjustments to deferred tax in respect of prior periods (2) 1 Total deferred tax (credit)/charge (123) 25 Total tax (credited)/charged to income statement \u2013 continuing operations (110) 62 Total tax (credited)/charged to income statement (110) 62 Attributable to policyholder returns \u2013 continuing operations (134) 73 Attributable to equity holders \u2013 continuing operations 24 (11) Total tax (credited)/charged to income statement (110) 62 Policyholder tax Certain products are subject to tax on policyholders\u2019 investment returns. This \u201cpolicyholder tax\u201d is an element of total tax expense. To make the tax expense more meaningful, tax attributable to policyholder returns and tax attributable to equity holders\u2019 profits are shown separately in the income statement. The tax attributable to policyholder returns is the amount payable in the year plus the movement of amounts expected to be payable in future years. The remainder of the tax expense is attributed to shareholders as tax attributable to equity holders. The Group\u2019s income tax credit on continuing operations was \u00a3110 million for the year ended 31 December 2022, compared to a charge of \u00a362 million for the prior year. This income tax credit can vary significantly year-on-year as a result of market volatility and the impact this has on policyholder tax. The recognition of the income received from policyholders to fund the policyholder tax liability (which is included within the Group\u2019s income) can vary in timing to the recognition of the corresponding policyholder tax expense, creating volatility in the Group\u2019s IFRS profit before tax attributable to equity holders. An adjustment is made to adjusted profit to remove these distortions, as explained further in note 7(b)(v). Market movements during the year ended 31 December 2022 resulted in investment losses of \u00a3587 million on products subject to policyholder tax. The loss is a component of the total \u201cinvestment return\u201d loss of \u00a34,649 million shown in the income statement. The impact of the \u00a3587 million investment return loss is the primary reason for the \u00a3134 million tax credit attributable to policyholder returns in respect of the continuing operations for the year ended 31 December 2022 (31 December 2021: \u00a373 million expense in respect of continuing operations and \u00a3nil expense in respect of discontinued operations). UK Corporation Tax rate The main rate of Corporation Tax is 19% for the financial year 2022 (2021: 19%). The Corporation Tax rate will increase from 19% to 25%, effective from 1 April 2023. This change was substantively enacted in 2021 and the new rate has been used in recognising the Company\u2019s deferred tax assets and liabilities for reversals expected to take place on or after 1 April 2023. The Company has recognised deferred tax assets as disclosed in note 29. The Company considers that future years\u2019 profits will be sufficient to utilise the tax asset carried forward. 11: Tax continued 11(b): Reconciliation of total income tax expense The income tax credited or charged to profit or loss differs from the amount that would apply if all of the Group\u2019s profits from all the countries in which the Group operates had been taxed at the UK standard Corporation Tax rate. The difference in the effective rate is explained below: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Profit before tax from continuing operations 65 85 Tax at UK standard rate of 19% (2021: 19%) 12 16 Different tax rate or basis on overseas operations \u2013 1 Untaxed and low taxed income (6) \u2013 Expenses not deductible for tax purposes 1 \u2013 Net movements on unrecognised deferred tax assets (6) (4) Effect on deferred tax of changes in tax rates (1) (12) Adjustments to deferred tax in respect of prior years (2) 1 Income tax attributable to policyholder returns (net of tax relief) (108) 60 Total tax (credited)/charged to income statement \u2013 continuing operations (110) 62 Total tax (credited)/charged to income statement (110) 62 11(c): Reconciliation of income tax credit or expense in the income statement to income tax on adjusted profit Note Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Income tax (credit)/expense on continuing operations1 (110) 62 Tax on adjusting items Impact of acquisition and disposal-related accounting 8 4 Business transformation costs 5 10 Finance costs 2 2 Exchange rate gain (ZAR/GBP) (1) \u2013 Customer remediation \u2013 1 Tax adjusting items Policyholder tax adjustments 7(b)(v) 138 (7) Other shareholder tax adjustments 2 (19) 7 Tax on adjusting items \u2013 continuing operations 133 17 Less: tax attributable to policyholder returns within adjusted profit \u2013 continuing operations 3 (4) (66) Tax charged on adjusted profit \u2013 continuing operations 19 13 Tax charged on total adjusted profit 19 13 1 Includes both tax attributable to policyholders and equity holders, in compliance with IFRS. 2 Other shareholder tax adjustments comprise the reallocation of adjustments from policyholder tax as explained in note 7(b)(v) and shareholder tax adjustments for one-off items in line with the Group\u2019s adjusted profit policy. 3 Adjusted profit treats policyholder tax as a pre-tax expense (this includes policyholder tax under IFRS and the policyholder tax adjustments) and is therefore removed from the tax charge on adjusted profit. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-456": { "value": "12: Earnings per share The Group calculates earnings per share (\u201cEPS\u201d) on a number of different bases. IFRS requires the calculation of basic and diluted EPS. Adjusted EPS reflects earnings that are consistent with the Group\u2019s adjusted profit measure and Headline earnings per share (\u201cHEPS\u201d) is a requirement of the Johannesburg Stock Exchange. The bases for calculation of the Group\u2019s EPS (in aggregate, including both continuing and discontinued operations) is disclosed in note 5(t). Framework Notes Year ended 31 December 2022 Pence Year ended 31 December 2021 Pence Basic earnings per share IFRS 12(b) 12.2 9.4 Diluted basic earnings per share IFRS 12(b) 12.0 9.2 Adjusted basic earnings per share Group policy 12(b) 8.0 10.7 Adjusted diluted earnings per share Group policy 12(b) 7.9 10.4 Headline basic earnings per share (net of tax) JSE Listing Requirements 12(c) 11.7 3.9 Headline diluted earnings per share (net of tax) JSE Listing Requirements 12(c) 11.5 3.8 12(a): Weighted average number of Ordinary Shares The table below summarises the calculation of the weighted average number of Ordinary Shares for the purposes of calculating basic and diluted earnings per share for each profit measure (IFRS, adjusted and headline profit). Details of the impact on the number of shares from the Quilter share buyback scheme are detailed in note 25. Year ended 31 December 2022 Million Year ended 31 December 2021 Million Weighted average number of Ordinary Shares 1,496 1,721 Own shares including those held in consolidated funds and EBTs (58) (77) Basic weighted average number of Ordinary Shares 1,438 1,644 Adjustment for dilutive share awards and options 20 39 Diluted weighted average number of Ordinary Shares 1,458 1,683 12(b): Basic and diluted EPS (IFRS and adjusted profit) Year ended 31 December 2022 Year ended 31 December 2021 Notes Continuing operations \u00a3m Discontinued operations \u00a3m Total \u00a3m Continuing operations \u00a3m Discontinued operations \u00a3m Total \u00a3m Profit after tax 175 \u2013 175 23 131 154 Total adjusting items before tax 7(a) (65) \u2013 (65) 116 (71) 45 Tax on adjusting items 11(c) (133) \u2013 (133) (17) \u2013 (17) Less: Policyholder tax adjustments 11(c) 138 \u2013 138 (7) \u2013 (7) Adjusted profit after tax after reallocation 115 \u2013 115 115 60 175 Reversal of: Reallocation of Quilter International costs1 \u2013 \u2013 \u2013 10 (10) \u2013 Adjusted profit after tax 115 \u2013 115 125 50 175 1Reallocation of Quilter International costs relate to costs that were previously reported as part of Quilter International which were presented within continuing operations in the prior year (31 December 2021: \u00a310 million) as these did not transfer to Utmost Group (the acquirer) on disposal. There were no such costs in the year ended 31 December 2022. 12: Earnings per share continued 12(b): Basic and diluted EPS (IFRS and adjusted profit) continued Year ended 31 December 2022 Year ended 31 December 2021 Post-tax profit measure used Continuing operations Pence Discontinued operations Pence Total Pence Continuing operations Pence Discontinued operations Pence Total Pence Basic EPS IFRS profit 12.2 \u2013 12.2 1.4 8.0 9.4 Diluted EPS IFRS profit 12.0 \u2013 12.0 1.4 7.8 9.2 Adjusted basic EPS Adjusted profit 8.0 \u2013 8.0 7.6 3.1 10.7 Adjusted diluted EPS Adjusted profit 7.9 \u2013 7.9 7.4 3.0 10.4 12(c): Headline earnings per share Year ended 31 December 2022 Year ended 31 December 2021 Note Gross \u00a3m Net of tax \u00a3m Gross \u00a3m Net of tax \u00a3m Profit attributable to equity holders 175 154 Adjusted for: Profit on business disposals 6(a) \u2013 \u2013 (90) (90) Impairment loss on property, plant and equipment1 \u2013 (7) \u2013 \u2013 Headline earnings 168 64 Headline basic EPS (pence) 11.7 3.9 Headline diluted EPS (pence) 11.5 3.8 1 Of the impairment, \u00a33 million relates to right-of-use asset and \u00a34 million relates to plant and equipment. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-457": { "value": "13: Dividends Payment date Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m 2020 Final dividend paid \u2013 3.6p per Ordinary Share 17 May 2021 \u2013 61 2021 Interim dividend paid \u2013 1.7p per Ordinary Share 20 September 2021 \u2013 28 2021 Final dividend paid \u2013 3.9p per Ordinary Share 16 May 2022 62 \u2013 2022 Interim dividend paid \u2013 1.2p per Ordinary Share 20 September 2022 16 \u2013 Dividends paid to Ordinary Shareholders 78 89 Subsequent to the year ended 31 December 2022, the Directors proposed a final dividend for 2022 of 3.3 pence per Ordinary Share amounting to \u00a345 million in total. Subject to approval by shareholders at the Annual General Meeting, the dividend will be paid on 22 May 2023. In compliance with the rules issued by the Prudential Regulation Authority (\u201cPRA\u201d) in relation to the implementation of the Solvency II regime and other regulatory requirements to which the Group is subject, the dividend is required to remain cancellable at any point prior to it becoming due and payable on 22 May 2023 and to be cancelled if, prior to payment, the Group ceases to hold capital resources equal to or in excess of its solvency capital requirement, or if that would be the case if the dividend was paid. The Directors have no intention of exercising this cancellation right, other than where required to do so by the PRA or for regulatory capital purposes. Final and interim dividends paid to Ordinary Shareholders are calculated using the number of shares in issue at the record date less own shares held in employee benefit trusts. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-543": { "value": "14: Goodwill and intangible assets 14(a): Analysis of goodwill and intangible assets The table below shows the movements in cost and amortisation of goodwill and intangible assets. Goodwill \u00a3m Software development costs \u00a3m Other intangible assets \u00a3m Total \u00a3m Gross amount 1 January 20211 356 95 429 880 Disposal of interests in subsidiaries (50) \u2013 (4) (54) Disposals 2 \u2013 (65) \u2013 (65) 31 December 20211 306 30 425 761 31 December 2022 306 30 425 761 Amortisation and impairment losses 1 January 20211 \u2013 (85) (239) (324) Amortisation charge for the year \u2013 (2) (45) (47) Disposal of interests in subsidiaries \u2013 \u2013 2 2 Disposals 2 \u2013 65 \u2013 65 31 December 20211 \u2013 (22) (282) (304) Amortisation charge for the year \u2013 (2) (42) (44) 31 December 2022 \u2013 (24) (324) (348) Carrying amount 31 December 2021 306 8 143 457 31 December 2022 306 6 101 413 1Following the completion of a number of strategic projects, including IT projects, the Group reviewed the fixed asset register. Assets related to software development costs with a cost of \u00a310 million and an accumulated amortisation of \u00a310 million (net book value: \u00a3nil) that had been fully amortised prior to January 2021 and that are no longer held by the Group or no longer in use have been removed from the register and are not recognised in the gross amount of software development costs as at 31 December 2022. Figures for prior periods have been restated to ensure comparability. 2Disposals of \u00a365 million in the year ended 31 December 2021 relate to the write-off of fully amortised software in respect of the Platform Transformation Programme and following the final migration of client assets in February 2021, with all Quilter Investment Platform assets now live on the new platform. 14(b): Analysis of other intangible assets 31 December 2022 \u00a3m 31 December 2021 \u00a3m Average estimated useful life Average period remaining Net carrying value Distribution channels \u2013 Quilter Financial Planning 4 9 8 years 2 years Customer relationships Quilter Cheviot 59 86 10 years 2 years Quilter Financial Planning 22 27 8 years 4 years Quilter Private Client Advisers 14 18 8 years 4 years Other 2 3 7 years 1 year Total other intangible assets 101 143 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing Goodwill is monitored by management at the level of the Group\u2019s two operating segments: Affluent and High Net Worth, as disclosed in note 8(a). Both operating segments represent a group of CGUs. The allocation of goodwill to these segments was based on their individual value-in-use calculations relative to the combined total. 31 December 2022 \u00a3m 31 December 2021 1 \u00a3m Goodwill (net carrying amount) Affluent 223 223 High Net Worth 83 83 Total goodwill 306 306 1The prior year figures have been re-presented to correct a minor classification difference between the two segments. The amount attributable to Affluent has decreased by \u00a32 million from the amount originally presented with a corresponding increase in High Net Worth. 14: Goodwill and intangible assets continued 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing continued Impairment review In accordance with the requirements of IAS 36 Impairment of Assets, goodwill in both the Affluent and High Net Worth CGU groups is tested for impairment annually, or earlier if an indicator of impairment exists, by comparing the carrying value of the CGU group to which the goodwill relates to the recoverable value of that CGU group, being the higher of that CGU group\u2019s value-in-use or fair value less costs to sell. If applicable, an impairment charge is recognised when the recoverable amount is less than the carrying value. Goodwill impairment indicators include sudden stock market falls, the absence of positive Net Client Cash Flows (\u201cNCCF\u201d), significant falls in profits and significant increases in the discount rate. The goodwill balance has been tested for impairment at 31 December 2022 and continues to demonstrate a surplus of the recoverable amount over the carrying value of the CGUs. As a result, no impairment is required. The following table shows the percentage change required in each key assumption before the carrying value would exceed the recoverable amount, assuming all other variables remain the same. This highlights that further adverse movements in the key assumptions used in the CGU value-in-use calculation would be required before an impairment would need to be recognised. Affluent High Net Worth Reduction in forecast cash flows 17% 47% Percentage point increase in the discount rate 5% 20% Forecast cash flows are impacted by movements in underlying assumptions, including equity market levels, revenue margins and NCCF. The Group considers that forecast cash flows are most sensitive to movements in equity markets because they have a direct impact on the level of the Group\u2019s fee income. The principal sensitivity within equity market level assumptions relates to the estimated growth in equity market indices included in the three-year revenue forecasts. Management forecasts equity market growth for each business using estimated asset-specific growth rates that are supported by internal research, historical performance, Bank of England forecasts and other external estimates. Value-in-use methodology The value-in-use calculations are determined as the sum of net tangible assets and the expected cash flows from existing and expected future new business derived from the Business Plans. Future cash flow elements allow for the cost of capital needed to support the business. The cash flows that have been used to determine the value-in-use of the CGUs are based on the most recent management approved three-year profit forecasts, which are contained in the Group\u2019s Business Plan. These profit forecasts incorporate anticipated equity market growth on the Group\u2019s future cash flows, and take into account climate-related risks and other responsible business considerations. These cash flows change at different rates because of the different strategies of the CGUs. In cases where the CGUs have made significant acquisitions in the recent past, the cash flows are forecast to grow faster than the more mature businesses. Post the three-year forecast period, the growth rate used to determine the terminal value of the CGUs in the annual assessment was 2.0% (2021: 2.0%), which is lower than the UK long-term growth rate. Market share and market growth information is also used to inform the expected volumes of future new business. IAS 36 does not permit any cost savings linked to future restructuring activity to be included within the value-in-use calculation unless an associated restructuring provision has also been recognised. Consequently, for the purpose of the value-in-use calculation, a number of planned cost savings and the related implementation costs, primarily in relation to the Business Simplification programme, have been removed from the future cash flows. The Group uses a single cost of capital of 11.4% (2021: 9.5%) to discount expected future cash flows across its two groups of CGUs because they are considered to present a similar level of risk. Capital is provided to the Group predominantly by shareholders with a relatively small amount of debt financing. The cost of capital is the weighted average of the cost of equity (return required by shareholders) and the cost of debt (return required by bondholders and owners of properties leased by the Group). When assessing the systematic risk (i.e. the beta value) within the calculation of the cost of equity, a triangulation approach is used that combines beta values obtained from historical data, a forward-looking view on the progression of beta values and the external views of investors. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-516": { "value": "14: Goodwill and intangible assets 14(a): Analysis of goodwill and intangible assets The table below shows the movements in cost and amortisation of goodwill and intangible assets. Goodwill \u00a3m Software development costs \u00a3m Other intangible assets \u00a3m Total \u00a3m Gross amount 1 January 20211 356 95 429 880 Disposal of interests in subsidiaries (50) \u2013 (4) (54) Disposals 2 \u2013 (65) \u2013 (65) 31 December 20211 306 30 425 761 31 December 2022 306 30 425 761 Amortisation and impairment losses 1 January 20211 \u2013 (85) (239) (324) Amortisation charge for the year \u2013 (2) (45) (47) Disposal of interests in subsidiaries \u2013 \u2013 2 2 Disposals 2 \u2013 65 \u2013 65 31 December 20211 \u2013 (22) (282) (304) Amortisation charge for the year \u2013 (2) (42) (44) 31 December 2022 \u2013 (24) (324) (348) Carrying amount 31 December 2021 306 8 143 457 31 December 2022 306 6 101 413 1Following the completion of a number of strategic projects, including IT projects, the Group reviewed the fixed asset register. Assets related to software development costs with a cost of \u00a310 million and an accumulated amortisation of \u00a310 million (net book value: \u00a3nil) that had been fully amortised prior to January 2021 and that are no longer held by the Group or no longer in use have been removed from the register and are not recognised in the gross amount of software development costs as at 31 December 2022. Figures for prior periods have been restated to ensure comparability. 2Disposals of \u00a365 million in the year ended 31 December 2021 relate to the write-off of fully amortised software in respect of the Platform Transformation Programme and following the final migration of client assets in February 2021, with all Quilter Investment Platform assets now live on the new platform. 14(b): Analysis of other intangible assets 31 December 2022 \u00a3m 31 December 2021 \u00a3m Average estimated useful life Average period remaining Net carrying value Distribution channels \u2013 Quilter Financial Planning 4 9 8 years 2 years Customer relationships Quilter Cheviot 59 86 10 years 2 years Quilter Financial Planning 22 27 8 years 4 years Quilter Private Client Advisers 14 18 8 years 4 years Other 2 3 7 years 1 year Total other intangible assets 101 143 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing Goodwill is monitored by management at the level of the Group\u2019s two operating segments: Affluent and High Net Worth, as disclosed in note 8(a). Both operating segments represent a group of CGUs. The allocation of goodwill to these segments was based on their individual value-in-use calculations relative to the combined total. 31 December 2022 \u00a3m 31 December 2021 1 \u00a3m Goodwill (net carrying amount) Affluent 223 223 High Net Worth 83 83 Total goodwill 306 306 1The prior year figures have been re-presented to correct a minor classification difference between the two segments. The amount attributable to Affluent has decreased by \u00a32 million from the amount originally presented with a corresponding increase in High Net Worth. 14: Goodwill and intangible assets continued 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing continued Impairment review In accordance with the requirements of IAS 36 Impairment of Assets, goodwill in both the Affluent and High Net Worth CGU groups is tested for impairment annually, or earlier if an indicator of impairment exists, by comparing the carrying value of the CGU group to which the goodwill relates to the recoverable value of that CGU group, being the higher of that CGU group\u2019s value-in-use or fair value less costs to sell. If applicable, an impairment charge is recognised when the recoverable amount is less than the carrying value. Goodwill impairment indicators include sudden stock market falls, the absence of positive Net Client Cash Flows (\u201cNCCF\u201d), significant falls in profits and significant increases in the discount rate. The goodwill balance has been tested for impairment at 31 December 2022 and continues to demonstrate a surplus of the recoverable amount over the carrying value of the CGUs. As a result, no impairment is required. The following table shows the percentage change required in each key assumption before the carrying value would exceed the recoverable amount, assuming all other variables remain the same. This highlights that further adverse movements in the key assumptions used in the CGU value-in-use calculation would be required before an impairment would need to be recognised. Affluent High Net Worth Reduction in forecast cash flows 17% 47% Percentage point increase in the discount rate 5% 20% Forecast cash flows are impacted by movements in underlying assumptions, including equity market levels, revenue margins and NCCF. The Group considers that forecast cash flows are most sensitive to movements in equity markets because they have a direct impact on the level of the Group\u2019s fee income. The principal sensitivity within equity market level assumptions relates to the estimated growth in equity market indices included in the three-year revenue forecasts. Management forecasts equity market growth for each business using estimated asset-specific growth rates that are supported by internal research, historical performance, Bank of England forecasts and other external estimates. Value-in-use methodology The value-in-use calculations are determined as the sum of net tangible assets and the expected cash flows from existing and expected future new business derived from the Business Plans. Future cash flow elements allow for the cost of capital needed to support the business. The cash flows that have been used to determine the value-in-use of the CGUs are based on the most recent management approved three-year profit forecasts, which are contained in the Group\u2019s Business Plan. These profit forecasts incorporate anticipated equity market growth on the Group\u2019s future cash flows, and take into account climate-related risks and other responsible business considerations. These cash flows change at different rates because of the different strategies of the CGUs. In cases where the CGUs have made significant acquisitions in the recent past, the cash flows are forecast to grow faster than the more mature businesses. Post the three-year forecast period, the growth rate used to determine the terminal value of the CGUs in the annual assessment was 2.0% (2021: 2.0%), which is lower than the UK long-term growth rate. Market share and market growth information is also used to inform the expected volumes of future new business. IAS 36 does not permit any cost savings linked to future restructuring activity to be included within the value-in-use calculation unless an associated restructuring provision has also been recognised. Consequently, for the purpose of the value-in-use calculation, a number of planned cost savings and the related implementation costs, primarily in relation to the Business Simplification programme, have been removed from the future cash flows. The Group uses a single cost of capital of 11.4% (2021: 9.5%) to discount expected future cash flows across its two groups of CGUs because they are considered to present a similar level of risk. Capital is provided to the Group predominantly by shareholders with a relatively small amount of debt financing. The cost of capital is the weighted average of the cost of equity (return required by shareholders) and the cost of debt (return required by bondholders and owners of properties leased by the Group). When assessing the systematic risk (i.e. the beta value) within the calculation of the cost of equity, a triangulation approach is used that combines beta values obtained from historical data, a forward-looking view on the progression of beta values and the external views of investors. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-458": { "value": "14: Goodwill and intangible assets 14(a): Analysis of goodwill and intangible assets The table below shows the movements in cost and amortisation of goodwill and intangible assets. Goodwill \u00a3m Software development costs \u00a3m Other intangible assets \u00a3m Total \u00a3m Gross amount 1 January 20211 356 95 429 880 Disposal of interests in subsidiaries (50) \u2013 (4) (54) Disposals 2 \u2013 (65) \u2013 (65) 31 December 20211 306 30 425 761 31 December 2022 306 30 425 761 Amortisation and impairment losses 1 January 20211 \u2013 (85) (239) (324) Amortisation charge for the year \u2013 (2) (45) (47) Disposal of interests in subsidiaries \u2013 \u2013 2 2 Disposals 2 \u2013 65 \u2013 65 31 December 20211 \u2013 (22) (282) (304) Amortisation charge for the year \u2013 (2) (42) (44) 31 December 2022 \u2013 (24) (324) (348) Carrying amount 31 December 2021 306 8 143 457 31 December 2022 306 6 101 413 1Following the completion of a number of strategic projects, including IT projects, the Group reviewed the fixed asset register. Assets related to software development costs with a cost of \u00a310 million and an accumulated amortisation of \u00a310 million (net book value: \u00a3nil) that had been fully amortised prior to January 2021 and that are no longer held by the Group or no longer in use have been removed from the register and are not recognised in the gross amount of software development costs as at 31 December 2022. Figures for prior periods have been restated to ensure comparability. 2Disposals of \u00a365 million in the year ended 31 December 2021 relate to the write-off of fully amortised software in respect of the Platform Transformation Programme and following the final migration of client assets in February 2021, with all Quilter Investment Platform assets now live on the new platform. 14(b): Analysis of other intangible assets 31 December 2022 \u00a3m 31 December 2021 \u00a3m Average estimated useful life Average period remaining Net carrying value Distribution channels \u2013 Quilter Financial Planning 4 9 8 years 2 years Customer relationships Quilter Cheviot 59 86 10 years 2 years Quilter Financial Planning 22 27 8 years 4 years Quilter Private Client Advisers 14 18 8 years 4 years Other 2 3 7 years 1 year Total other intangible assets 101 143 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing Goodwill is monitored by management at the level of the Group\u2019s two operating segments: Affluent and High Net Worth, as disclosed in note 8(a). Both operating segments represent a group of CGUs. The allocation of goodwill to these segments was based on their individual value-in-use calculations relative to the combined total. 31 December 2022 \u00a3m 31 December 2021 1 \u00a3m Goodwill (net carrying amount) Affluent 223 223 High Net Worth 83 83 Total goodwill 306 306 1The prior year figures have been re-presented to correct a minor classification difference between the two segments. The amount attributable to Affluent has decreased by \u00a32 million from the amount originally presented with a corresponding increase in High Net Worth. 14: Goodwill and intangible assets continued 14(c): Allocation of goodwill to cash-generating units (\u201cCGUs\u201d) and impairment testing continued Impairment review In accordance with the requirements of IAS 36 Impairment of Assets, goodwill in both the Affluent and High Net Worth CGU groups is tested for impairment annually, or earlier if an indicator of impairment exists, by comparing the carrying value of the CGU group to which the goodwill relates to the recoverable value of that CGU group, being the higher of that CGU group\u2019s value-in-use or fair value less costs to sell. If applicable, an impairment charge is recognised when the recoverable amount is less than the carrying value. Goodwill impairment indicators include sudden stock market falls, the absence of positive Net Client Cash Flows (\u201cNCCF\u201d), significant falls in profits and significant increases in the discount rate. The goodwill balance has been tested for impairment at 31 December 2022 and continues to demonstrate a surplus of the recoverable amount over the carrying value of the CGUs. As a result, no impairment is required. The following table shows the percentage change required in each key assumption before the carrying value would exceed the recoverable amount, assuming all other variables remain the same. This highlights that further adverse movements in the key assumptions used in the CGU value-in-use calculation would be required before an impairment would need to be recognised. Affluent High Net Worth Reduction in forecast cash flows 17% 47% Percentage point increase in the discount rate 5% 20% Forecast cash flows are impacted by movements in underlying assumptions, including equity market levels, revenue margins and NCCF. The Group considers that forecast cash flows are most sensitive to movements in equity markets because they have a direct impact on the level of the Group\u2019s fee income. The principal sensitivity within equity market level assumptions relates to the estimated growth in equity market indices included in the three-year revenue forecasts. Management forecasts equity market growth for each business using estimated asset-specific growth rates that are supported by internal research, historical performance, Bank of England forecasts and other external estimates. Value-in-use methodology The value-in-use calculations are determined as the sum of net tangible assets and the expected cash flows from existing and expected future new business derived from the Business Plans. Future cash flow elements allow for the cost of capital needed to support the business. The cash flows that have been used to determine the value-in-use of the CGUs are based on the most recent management approved three-year profit forecasts, which are contained in the Group\u2019s Business Plan. These profit forecasts incorporate anticipated equity market growth on the Group\u2019s future cash flows, and take into account climate-related risks and other responsible business considerations. These cash flows change at different rates because of the different strategies of the CGUs. In cases where the CGUs have made significant acquisitions in the recent past, the cash flows are forecast to grow faster than the more mature businesses. Post the three-year forecast period, the growth rate used to determine the terminal value of the CGUs in the annual assessment was 2.0% (2021: 2.0%), which is lower than the UK long-term growth rate. Market share and market growth information is also used to inform the expected volumes of future new business. IAS 36 does not permit any cost savings linked to future restructuring activity to be included within the value-in-use calculation unless an associated restructuring provision has also been recognised. Consequently, for the purpose of the value-in-use calculation, a number of planned cost savings and the related implementation costs, primarily in relation to the Business Simplification programme, have been removed from the future cash flows. The Group uses a single cost of capital of 11.4% (2021: 9.5%) to discount expected future cash flows across its two groups of CGUs because they are considered to present a similar level of risk. Capital is provided to the Group predominantly by shareholders with a relatively small amount of debt financing. The cost of capital is the weighted average of the cost of equity (return required by shareholders) and the cost of debt (return required by bondholders and owners of properties leased by the Group). When assessing the systematic risk (i.e. the beta value) within the calculation of the cost of equity, a triangulation approach is used that combines beta values obtained from historical data, a forward-looking view on the progression of beta values and the external views of investors. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-459": { "value": "15: Property, plant and equipment Right-of-use assets \u00a3m Plant and equipment \u00a3m Total \u00a3m Gross amount 1 January 20211 166 83 249 Additions2 14 13 27 Disposal of interests in subsidiaries (32) (16) (48) Disposals (16) (2) (18) 31 December 20211 132 78 210 Additions 2 3 5 Disposals 3 (3) (5) (8) Transfer to non-current assets held for sale 4 \u2013 (1) (1) 31 December 2022 131 75 206 Accumulated depreciation and impairment losses 1 January 20211 (65) (42) (107) Depreciation charge for the year (10) (6) (16) Disposal of interests in subsidiaries 21 16 37 Disposals 5 2 7 31 December 20211 (49) (30) (79) Depreciation charge for the year (9) (6) (15) Impairment losses5 (3) (4) (7) Disposals 3 2 5 7 31 December 2022 (59) (35) (94) Carrying value 31 December 2021 83 48 131 31 December 2022 72 40 112 1Following the completion of a number of strategic projects, the Group reviewed the fixed asset register. Assets related to plant and equipment with a cost of \u00a337 million and an accumulated depreciation of \u00a337 million (net book value: \u00a3nil) that had been fully depreciated prior to January 2021 and that are no longer held by the Group or no longer in use have been removed from the register and are not recognised in the gross amount of plant and equipment costs as at 31 December 2022. Figures for prior periods have been restated to ensure comparability. 2The majority of additions in the year ended 31 December 2021 relate to the lease for Quilter House, the Group\u2019s main Southampton property, and the recognition of revised dilapidations provisions on properties in the lease portfolio. 3Following a review of the fixed asset register, the Group recognised the disposal of certain fully depreciated assets related to plant and equipment with a cost of \u00a35 million and an accumulated depreciation of \u00a35 million (net book value: \u00a3nil) in the year. There were no proceeds arising from the recognition of the disposal and therefore no gain or loss has been recognised in the income statement. There were also several disposals in 2022 relating to right-of-use assets, which resulted in an immaterial loss being recognised in the income statement. 4Plant and equipment transferred to non-current assets held for sale relates to the proposed sale of a leasehold interest in an office property, following the vacation of the building by staff and the active marketing of the property in August 2022. 5The impairment of the right-of-use assets and plant and equipment relates to the write down of assets relating to office premises no longer occupied by the Group. Quilter staff vacated The Point, an office property in Southampton in May 2022, and the Pinnacle, an office in Manchester, in December 2022. In the financial statement for 2021, leasehold improvements were shown separately from other plant and equipment. These categories both of which are mainly related to the Group\u2019s office premises have now been combined for 2022 reporting. The 2021 figures have been re-presented with the two categories combined to ensure comparability. The carrying value of right-of-use assets at 31 December 2022 relate to \u00a372 million of property leases (31 December 2021: \u00a383 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-460": { "value": "16: Loans and advances This note analyses the loans and advances the Group has made. The carrying amounts of loans and advances were as follows: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Loans to advisers and brokers 34 29 Total net loans and advances 34 29 To be recovered within 12 months 11 7 To be recovered after 12 months 23 22 Total net loans and advances 34 29 Loans to advisers are made on individually negotiated commercial terms. The loan agreement with the adviser details the dates on which the repayments of the loan are to be made. Where an adviser is due commission payments from Quilter, these commission payments are offset against the loan repayments due from the adviser. In certain circumstances, the loan agreement period may be extended where agreed by both Quilter and the adviser. Should the adviser terminate their terms of business agreement with Quilter, the loan balance becomes immediately repayable in full. The carrying amount of loans to advisers measured at amortised cost approximates to their fair value which is measured as the principal amount receivable under the loan agreements. The remaining loans are stated at fair value. ", "dimensions": { "concept": "quilterplc:DisclosureOfLoansAndAdvances", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-461": { "value": "17: Financial investments The table below analyses the investments and securities that the Group invests in, either on its own proprietary behalf (shareholder funds) or on behalf of third parties (policyholder funds). 31 December 2022 \u00a3m 31 December 2021 \u00a3m Government and government-guaranteed securities 225 649 Other debt securities, preference shares and debentures 1,609 1,662 Equity securities 6,225 7,251 Pooled investments 35,557 38,002 Short-term funds and securities treated as investments 1 1 Total financial investments 43,617 47,565 Recoverable within 12 months 43,617 47,565 Total financial investments 43,617 47,565 The financial investments recoverability profile is based on the intention with which the financial assets are held. These assets are held to cover the liabilities for linked investment contracts, all of which can be withdrawn by policyholders on demand. 18: Derivative financial instruments \u2013 assets and liabilities The Group has limited involvement with derivative instruments and does not use them for the purposes of speculation. In past periods, derivative instruments have been used to manage well-defined foreign exchange risks arising out of the normal course of business. The Group does not anticipate any material adverse effect on its financial position resulting from its involvement in these types of contracts, nor does it anticipate non-performance by counterparties. The Group only deals with highly rated counterparties. The derivatives included within the statement of financial position 31 December 2022 and 31 December 2021 relate to instruments included as a consequence of the consolidation of investment funds. 19: Categories of financial instruments The analysis of financial assets and liabilities into their categories as defined in IFRS 9 Financial Instruments is set out in the following tables. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the non-financial assets and liabilities category. For information about the methods and assumptions used in determining fair value, refer to note 20. The Group\u2019s exposure to various risks associated with financial instruments is discussed in note 37. 31 December 2022 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 1 1 Loans and advances \u2013 \u2013 34 \u2013 34 Financial investments 43,617 \u2013 \u2013 \u2013 43,617 Trade, other receivables and other assets \u2013 \u2013 261 42 303 Derivative assets 40 \u2013 \u2013 \u2013 40 Cash and cash equivalents 1,112 \u2013 670 \u2013 1,782 Total assets that include financial instruments 44,769 \u2013 965 43 45,777 Total other non-financial assets \u2013 \u2013 \u2013 640 640 Total assets 44,769 \u2013 965 683 46,417 Liabilities Investment contract liabilities \u2013 38,186 \u2013 \u2013 38,186 Third-party interests in consolidated funds 5,843 \u2013 \u2013 \u2013 5,843 Borrowings and lease liabilities \u2013 \u2013 290 \u2013 290 Trade, other payables and other liabilities \u2013 \u2013 358 78 436 Derivative liabilities 20 \u2013 \u2013 \u2013 20 Total liabilities that include financial instruments 5,863 38,186 648 78 44,775 Total other non-financial liabilities \u2013 \u2013 \u2013 94 94 Total liabilities 5,863 38,186 648 172 44,869 1Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. 19: Categories of financial instruments continued 31 December 2021 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 2 2 Loans and advances \u2013 \u2013 29 \u2013 29 Financial investments 47,564 \u2013 \u2013 1 47,565 Trade, other receivables and other assets \u2013 \u2013 325 56 381 Derivative assets 14 \u2013 \u2013 \u2013 14 Cash and cash equivalents 1,216 \u2013 848 \u2013 2,064 Total assets that include financial instruments 48,794 \u2013 1,202 59 50,055 Total other non-financial assets \u2013 \u2013 \u2013 685 685 Total assets 48,794 \u2013 1,202 744 50,740 Liabilities Investment contract liabilities \u2013 41,071 \u2013 \u2013 41,071 Third-party interests in consolidated funds 6,898 \u2013 \u2013 \u2013 6,898 Borrowings and lease liabilities \u2013 \u2013 299 \u2013 299 Trade, other payables and other liabilities \u2013 \u2013 370 114 484 Derivative liabilities 15 \u2013 \u2013 \u2013 15 Total liabilities that include financial instruments 6,913 41,071 669 114 48,767 Total other non-financial liabilities \u2013 \u2013 \u2013 234 234 Total liabilities 6,913 41,071 669 348 49,001 1 Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-518": { "value": "18: Derivative financial instruments \u2013 assets and liabilities The Group has limited involvement with derivative instruments and does not use them for the purposes of speculation. In past periods, derivative instruments have been used to manage well-defined foreign exchange risks arising out of the normal course of business. The Group does not anticipate any material adverse effect on its financial position resulting from its involvement in these types of contracts, nor does it anticipate non-performance by counterparties. The Group only deals with highly rated counterparties. The derivatives included within the statement of financial position 31 December 2022 and 31 December 2021 relate to instruments included as a consequence of the consolidation of investment funds.", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-544": { "value": "19: Categories of financial instruments The analysis of financial assets and liabilities into their categories as defined in IFRS 9 Financial Instruments is set out in the following tables. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the non-financial assets and liabilities category. For information about the methods and assumptions used in determining fair value, refer to note 20. The Group\u2019s exposure to various risks associated with financial instruments is discussed in note 37. 31 December 2022 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 1 1 Loans and advances \u2013 \u2013 34 \u2013 34 Financial investments 43,617 \u2013 \u2013 \u2013 43,617 Trade, other receivables and other assets \u2013 \u2013 261 42 303 Derivative assets 40 \u2013 \u2013 \u2013 40 Cash and cash equivalents 1,112 \u2013 670 \u2013 1,782 Total assets that include financial instruments 44,769 \u2013 965 43 45,777 Total other non-financial assets \u2013 \u2013 \u2013 640 640 Total assets 44,769 \u2013 965 683 46,417 Liabilities Investment contract liabilities \u2013 38,186 \u2013 \u2013 38,186 Third-party interests in consolidated funds 5,843 \u2013 \u2013 \u2013 5,843 Borrowings and lease liabilities \u2013 \u2013 290 \u2013 290 Trade, other payables and other liabilities \u2013 \u2013 358 78 436 Derivative liabilities 20 \u2013 \u2013 \u2013 20 Total liabilities that include financial instruments 5,863 38,186 648 78 44,775 Total other non-financial liabilities \u2013 \u2013 \u2013 94 94 Total liabilities 5,863 38,186 648 172 44,869 1Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. 19: Categories of financial instruments continued 31 December 2021 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 2 2 Loans and advances \u2013 \u2013 29 \u2013 29 Financial investments 47,564 \u2013 \u2013 1 47,565 Trade, other receivables and other assets \u2013 \u2013 325 56 381 Derivative assets 14 \u2013 \u2013 \u2013 14 Cash and cash equivalents 1,216 \u2013 848 \u2013 2,064 Total assets that include financial instruments 48,794 \u2013 1,202 59 50,055 Total other non-financial assets \u2013 \u2013 \u2013 685 685 Total assets 48,794 \u2013 1,202 744 50,740 Liabilities Investment contract liabilities \u2013 41,071 \u2013 \u2013 41,071 Third-party interests in consolidated funds 6,898 \u2013 \u2013 \u2013 6,898 Borrowings and lease liabilities \u2013 \u2013 299 \u2013 299 Trade, other payables and other liabilities \u2013 \u2013 370 114 484 Derivative liabilities 15 \u2013 \u2013 \u2013 15 Total liabilities that include financial instruments 6,913 41,071 669 114 48,767 Total other non-financial liabilities \u2013 \u2013 \u2013 234 234 Total liabilities 6,913 41,071 669 348 49,001 1 Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-517": { "value": "19: Categories of financial instruments The analysis of financial assets and liabilities into their categories as defined in IFRS 9 Financial Instruments is set out in the following tables. Assets and liabilities of a non-financial nature, or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the non-financial assets and liabilities category. For information about the methods and assumptions used in determining fair value, refer to note 20. The Group\u2019s exposure to various risks associated with financial instruments is discussed in note 37. 31 December 2022 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 1 1 Loans and advances \u2013 \u2013 34 \u2013 34 Financial investments 43,617 \u2013 \u2013 \u2013 43,617 Trade, other receivables and other assets \u2013 \u2013 261 42 303 Derivative assets 40 \u2013 \u2013 \u2013 40 Cash and cash equivalents 1,112 \u2013 670 \u2013 1,782 Total assets that include financial instruments 44,769 \u2013 965 43 45,777 Total other non-financial assets \u2013 \u2013 \u2013 640 640 Total assets 44,769 \u2013 965 683 46,417 Liabilities Investment contract liabilities \u2013 38,186 \u2013 \u2013 38,186 Third-party interests in consolidated funds 5,843 \u2013 \u2013 \u2013 5,843 Borrowings and lease liabilities \u2013 \u2013 290 \u2013 290 Trade, other payables and other liabilities \u2013 \u2013 358 78 436 Derivative liabilities 20 \u2013 \u2013 \u2013 20 Total liabilities that include financial instruments 5,863 38,186 648 78 44,775 Total other non-financial liabilities \u2013 \u2013 \u2013 94 94 Total liabilities 5,863 38,186 648 172 44,869 1Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. 19: Categories of financial instruments continued 31 December 2021 Fair value Measurement basis Mandatorily at FVTPL \u00a3m Designated at FVTPL \u00a3m Amortised cost \u00a3m Non-financial assets and liabilities \u00a3m Total \u00a3m Assets Investments in associated undertakings 1 \u2013 \u2013 \u2013 2 2 Loans and advances \u2013 \u2013 29 \u2013 29 Financial investments 47,564 \u2013 \u2013 1 47,565 Trade, other receivables and other assets \u2013 \u2013 325 56 381 Derivative assets 14 \u2013 \u2013 \u2013 14 Cash and cash equivalents 1,216 \u2013 848 \u2013 2,064 Total assets that include financial instruments 48,794 \u2013 1,202 59 50,055 Total other non-financial assets \u2013 \u2013 \u2013 685 685 Total assets 48,794 \u2013 1,202 744 50,740 Liabilities Investment contract liabilities \u2013 41,071 \u2013 \u2013 41,071 Third-party interests in consolidated funds 6,898 \u2013 \u2013 \u2013 6,898 Borrowings and lease liabilities \u2013 \u2013 299 \u2013 299 Trade, other payables and other liabilities \u2013 \u2013 370 114 484 Derivative liabilities 15 \u2013 \u2013 \u2013 15 Total liabilities that include financial instruments 6,913 41,071 669 114 48,767 Total other non-financial liabilities \u2013 \u2013 \u2013 234 234 Total liabilities 6,913 41,071 669 348 49,001 1 Investments in associated undertakings classified as non-financial assets and liabilities are equity accounted. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-462": { "value": "20: Fair value methodology This section explains the judgements and estimates made in determining the fair values of financial instruments that are recognised and measured at fair value in the financial statements. Classifying financial instruments into the three levels of the fair value hierarchy (see note 20(b)), prescribed under IFRS, provides an indication about the reliability of inputs used in determining fair value. 20(a): Determination of fair value The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market exit prices for assets and offer prices for liabilities, at the close of business on the reporting date, without any deduction for transaction costs: \u00b7 for units in unit trusts and shares in open-ended investment companies, fair value is determined by reference to published quoted prices representing exit values in an active market; \u00b7 for equity and debt securities not actively traded in organised markets and where the price cannot be retrieved, the fair value is determined by reference to similar instruments for which market observable prices exist; \u00b7 for assets that have been suspended from trading on an active market, the last published price is used. Many suspended assets are still regularly priced. At the reporting date, all suspended assets are assessed for impairment; and \u00b7 where the assets are private company shares or within consolidated investment funds, the valuation is based on the latest available set of audited financial statements where available, or if more recent, financial statements for the fund or a statement of valuation provided by the management of the private company or fund. There have been no significant changes in the valuation techniques applied when valuing financial instruments. Where assets are valued by the Group, the general principles applied to those instruments measured at fair value are outlined below: Loans and advances Loans and advances include certain loans to brokers at below-market interest rates which are measured at fair value. All other loans to brokers are stated at amortised cost. Financial investments Financial investments include government and government-guaranteed securities, listed and unlisted debt securities, preference shares and debentures, listed and unlisted equity securities, listed and unlisted pooled investments (see below), short-term funds and securities treated as investments and certain other securities. 20: Fair value methodology continued 20(a): Determination of fair value continued Pooled investments represent the Group\u2019s holdings of shares/units in open-ended investment companies, unit trusts, mutual funds and similar investment vehicles. Pooled investments are recognised at fair value. The fair values of pooled investments are based on widely published prices that are regularly updated. Other financial investments that are measured at fair value use observable market prices where available. In the absence of observable market prices, these investments and securities are fair valued utilising various approaches including discounted cash flows, the application of an earnings before interest, tax, depreciation and amortisation multiple or any other relevant technique. Derivatives The fair value of derivatives is determined with reference to the exchange-traded prices of the specific instruments. The fair value of over-the-counter forward foreign exchange contracts is determined by reference to the relevant exchange rates. Investment contract liabilities The fair value of the investment contract liabilities is determined with reference to the underlying funds that are held by the Group. Third-party interests in consolidated funds Third-party interests in consolidated funds are measured at the attributable net asset value of each fund. 20(b): Fair value hierarchy Fair values are determined according to the following hierarchy: Description of hierarchy Types of instrument s classified in the respective levels Level 1 \u2013 quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets. Listed equity securities, government securities and other listed debt securities and similar instruments that are actively traded, actively traded pooled investments, certain quoted derivative assets and liabilities and investment contract liabilities directly linked to other Level 1 financial assets. Level 2 \u2013 valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial assets and liabilities valued using models where all significant inputs are observable. Unlisted equity and debt securities where the valuation is based on models involving no significant unobservable data. Over-the-counter (\u201cOTC\u201d) derivatives, certain privately placed debt instruments and third-party interests in consolidated funds which meet the definition of Level 2 financial instruments. Level 3 \u2013 valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more significant inputs are unobservable. Unlisted equity and securities with significant unobservable inputs, securities where the market is not considered sufficiently active, including certain inactive pooled investments. The judgement as to whether a market is active may include, for example, consideration of factors such as the magnitude and frequency of trading activity, the availability of prices and the size of bid/offer spreads. In inactive markets, obtaining assurance that the transaction price provides evidence of fair value or determining the adjustments to transaction prices that are necessary to measure the fair value of the asset or liability requires additional work during the valuation process. The majority of valuation techniques employ only observable data and so the reliability of the fair value measurement is high. Certain financial assets and liabilities are valued on the basis of valuation techniques that feature one or more significant inputs that are unobservable and, for them, the derivation of fair value is more judgemental. A financial asset or liability in its entirety is classified as valued using significant unobservable inputs if a significant proportion of that asset or liability\u2019s carrying amount is driven by unobservable inputs. In this context, \u2018unobservable\u2019 means that there is little or no current market data available from which to determine the price at which an arm\u2019s length transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of fair value. Furthermore, in some cases the majority of the fair value derived from a valuation technique with significant unobservable data may be attributable to observable inputs. 20(c): Transfer between fair value hierarchies The Group deems a transfer to have occurred between Level 1 and Level 2 or Level 3 when an active, traded primary market ceases to exist for that financial instrument. A transfer between Level 2 and Level 3 occurs when the majority of the significant inputs used to determine the fair value of the instrument become unobservable. Transfers from Levels 3 or 2 to Level 1 are also possible when assets become actively priced. There were no transfers of financial investments from Level 1 to Level 2 during the year (31 December 2021: \u00a316 million). There were no transfers of financial investments from Level 2 to Level 1 during the year (31 December 2021: \u00a385 million). The movement in 2021 related to assets held by the Quilter International business and these movements were matched closely by transfers of investment contract liabilities. See note 20(e) for the reconciliation of Level 3 financial instruments. 20: Fair value methodology continued 20(d): Financial assets and liabilities measured at fair value, classified according to fair value hierarchy The majority of the Group\u2019s financial assets are measured using quoted market prices for identical instruments in active markets (Level 1) and there have been no significant changes during the year. The linked assets are held to cover the liabilities for linked investment contracts (net of reinsurance). The difference between linked assets and linked liabilities is principally due to short-term timing differences between policyholder premiums being received and invested in advance of policies being issued, and tax liabilities within funds which are reflected within the Group\u2019s tax liabilities. Differences between assets and liabilities within the respective levels of the fair value hierarchy also arise due to the mix of underlying assets and liabilities within consolidated funds. In addition, third-party interests in consolidated funds are classified as Level 2. The table below presents a summary of the Group\u2019s financial assets and liabilities that are measured at fair value in the consolidated statement of financial position according to their IFRS 9 classification (see note 19 for further details). 31 December 2022 31 December 2021 \u00a3m % \u00a3m % Financial assets measured at fair value Level 1 38,452 85.9% 41,996 86.0% Level 2 6,288 14.0% 6,771 13.9% Level 3 29 0.1% 27 0.1% Total 44,769 100.0% 48,794 100.0% Financial liabilities measured at fair value Level 1 38,161 86.6% 41,047 85.5% Level 2 5,863 13.3% 6,913 14.4% Level 3 25 0.1% 24 0.1% Total 44,049 100.0% 47,984 100.0% The tables below further analyse the Group\u2019s financial assets and liabilities measured at fair value by the fair value hierarchy described in note 20(b): 31 December 2022 Level 1 \u00a3m Level 2 \u00a3m Level 3 \u00a3m Total \u00a3m Financial assets measured at fair value Mandatorily (fair value through profit or loss) 38,452 6,288 29 44,769 Financial investments 37,34 0 6,248 29 43,617 Cash and cash equivalents 1,112 \u2013 \u2013 1,112 Derivative assets \u2013 40 \u2013 40 Total assets measured at fair value 38,452 6,288 29 44,769 Financial liabilities measured at fair value Mandatorily (fair value through profit or loss) \u2013 5,863 \u2013 5,863 Third-party interests in consolidated funds \u2013 5,843 \u2013 5,843 Derivative liabilities \u2013 20 \u2013 20 Designated (fair value through profit or loss) 38,161 \u2013 25 38,186 Investment contract liabilities 38,161 \u2013 25 38,186 Total liabilities measured at fair value 38,161 5,863 25 44,049 20: Fair value methodology continued 20(d): Financial assets and liabilities measured at fair value, classified according to fair value hierarchy continued 31 December 2021 Level 1 \u00a3m Level 2 \u00a3m Level 3 \u00a3m Total \u00a3m Financial assets measured at fair value Mandatorily (fair value through profit or loss) 41,996 6,771 27 48,794 Financial investments 40,780 6,757 27 47,564 Cash and cash equivalents 1,216 \u2013 \u2013 1,216 Derivative assets \u2013 14 \u2013 14 Total assets measured at fair value 41,996 6,771 27 48,794 Financial liabilities measured at fair value Mandatorily (fair value through profit or loss) \u2013 6,913 \u2013 6,913 Third-party interests in consolidated funds \u2013 6,898 \u2013 6,898 Derivative liabilities \u2013 15 \u2013 15 Designated (fair value through profit or loss) 41,047 \u2013 24 41,071 Investment contract liabilities 41,047 \u2013 24 41,071 Total liabilities measured at fair value 41,047 6,913 24 47,98 4 20(e): Level 3 fair value hierarchy disclosure The majority of the assets classified as Level 3 are held within linked policyholder funds. Where this is the case, all of the investment risk associated with these assets is borne by policyholders and the value of these assets is exactly matched by a corresponding liability due to policyholders. The Group bears no risk from a change in the market value of these assets except to the extent that it has an impact on management fees earned. Level 3 assets also include investments within consolidated funds. The Group bears no risk from a change in the market value of these assets except to the extent that it has an impact on fund management fee income. Any changes in market value are matched by a corresponding Level 2 liability within third-party interests in consolidated funds. The table below reconciles the opening balance of Level 3 financial assets to the closing balance at each year end: 2022 \u00a3m 2021 \u00a3m At beginning of the year 27 1,822 Fair value losses charged to the income statement (5) (3) Purchases \u2013 \u2013 Sales (2) \u2013 Transfers in 125 8 Transfers out (116) (393) Disposal of subsidiaries 1 \u2013 (1,406) Foreign exchange and other movements \u2013 (1) Total Level 3 financial assets at the end of the year 29 27 Unrealised fair value losses charged to the income statement relating to assets held at the year end (9) (4) 1During the year to 31 December 2021, Level 3 assets decreased by \u00a31,406 million following the sale of Quilter International to Utmost Group. 20: Fair value methodology continued 20(e): Level 3 fair value hierarchy disclosure continued Amounts shown as sales arise principally from the sale of private company shares, unlisted pooled investments and from distributions received in respect of holdings in property funds. Transfers into Level 3 assets in the current year total \u00a3125 million (31 December 2021: \u00a38 million). This is mainly due to suspended funds previously shown within Level 1. Suspended funds are valued based on external valuation reports received from fund managers. Transfers out of Level 3 assets in the current year of \u00a3116 million (31 December 2021: \u00a3393 million) result from a transfer to Level 1 assets relating to assets that are now being actively repriced (that were previously stale) and where fund suspensions have been lifted. The table below analyses the type of Level 3 financial assets held: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Pooled investments 29 26 Unlisted and stale price pooled investments \u2013 1 Suspended funds 29 25 Private equity investments \u2013 1 Total Level 3 financial assets 29 27 As at 31 December 2022, the Group did not hold any private equity investments. As at 31 December 2021, Level 3 assets included \u00a31 million of private equity investments, all within consolidated funds. The table below reconciles the opening balance of Level 3 financial liabilities to the closing balance at each year end: 2022 \u00a3m 2021 \u00a3m At beginning of the year 24 1,820 Fair value losses charged to the income statement (2) (3) Transfers in 119 5 Transfers out (116) (391) Disposal of subsidiaries1 \u2013 (1,406) Foreign exchange and other movements \u2013 (1) Total Level 3 financial liabilities at the end of the year 25 24 Unrealised fair value losses charged to the income statement relating to liabilities held at the year end (5) (4) 1 During the year to 31 December 2021, Level 3 liabilities decreased by \u00a31,406 million following the sale of Quilter International to Utmost Group. All of the liabilities that are classified as Level 3 are investment contract liabilities which exactly match against the Level 3 assets held in linked policyholder funds. 20: Fair value methodology continued 20(f): Effect of changes in significant unobservable assumptions to reasonable alternatives Details of the valuation techniques applied to the different categories of financial instruments can be found in note 20(a) above, including the valuation techniques applied when significant unobservable assumptions are used to value Level 3 assets. Private equity investments are valued at the value disclosed in the latest available set of audited financial statements or, if more recent information is available from investment managers or professional valuation experts at the value of the underlying assets of the private equity investment. For Level 3 assets and liabilities, no reasonable alternative assumptions are applicable and the Group therefore performs a sensitivity test of an aggregate 10% change in the value of the financial asset or liability (31 December 2021: 10%), representing a reasonable alternative judgement in the context of the current macroeconomic environment in which the Group operates. It is therefore considered that the impact of this sensitivity will be in the range of \u00a33 million to the reported fair value of Level 3 assets, both favourable and unfavourable (31 December 2021: \u00a32 million). As described in note 20(e), changes in the value of Level 3 assets held within linked policyholder funds are exactly matched by corresponding changes in the value of liabilities due to policyholders and therefore have no impact on the Group\u2019s net asset value or profit or loss, except to the extent that it has an impact on management fees earned. 20(g): Fair value hierarchy for assets and liabilities not measured at fair value Certain financial instruments of the Group are not carried at fair value. The carrying values of these are considered reasonable approximations of their respective fair values, as they are either short term in nature or are repriced to current market rates at frequent intervals. Their classification within the fair value hierarchy would be as follows: Financial assets within Trade, other receivables, and other assets Level 3 Financial liabilities within Trade, other payables, and other liabilities Level 3 Cash and cash equivalents (excluding money market funds) are held at amortised cost and therefore not carried at fair value. The cash and cash equivalents that are held at amortised cost would be classified as Level 1 in the fair value hierarchy. The loans and advances not carried at fair value would be classified as Level 3 in the fair value hierarchy. Borrowed funds are financial liabilities held at amortised cost and therefore not carried at fair value. Borrowed funds relate to subordinated liabilities and would be classified as Level 1 in the fair value hierarchy. Lease liabilities valued under IFRS 16 are held at amortised cost and therefore not carried at fair value. They would be classified as Level 3 in the fair value hierarchy. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-463": { "value": "21: Structured entities Structured entities are defined as entities that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. The Group has interests in both consolidated and unconsolidated structured entities. 21(a): Group\u2019s involvement in structured entities The Group invests in collective investment vehicles, including open-ended investment companies (\u201cOEICs\u201d) and unit trusts, in order to match unit-linked investment contract liabilities. This means that all of the investment risk associated with these assets is borne by policyholders and any change in the value of these assets is closely matched by a corresponding change in liability due to policyholders. As the Group earns management fees based on the market value of unit-linked assets, any change in asset values will increase or decrease the Group\u2019s revenues. The Group has not provided any non-contractual support to any consolidated or unconsolidated structured entities during 2021 or 2022. As at 31 December 2021 and 31 December 2022, the Group has no obligation or intention to provide financial support to structured entities that could expose the Group to a loss. In addition, shareholder funds are also invested in collective investment vehicles, principally in respect of money market funds as an alternative to bank deposits. The Group\u2019s holdings in collective investment vehicles are subject to the terms and conditions of the respective investment vehicles\u2019 offering documentation and are susceptible to market price risk arising from uncertainties about the future values of those investment vehicles. All of the investment vehicles in the investment portfolios are managed by portfolio managers who are compensated by the respective investment vehicles for their services. Such compensation generally consists of an asset-based fee and a performance-based incentive fee and is reflected in the valuation of the investment vehicles. These structured entities are not consolidated where the Group determines that it does not have control. 21(b): Interests in unconsolidated structured entities The Group invests in unconsolidated structured entities as part of its normal investment and trading activities. The Group\u2019s total interest in unconsolidated structured entities is classified as financial investments held mandatorily at fair value through profit or loss. The table below provides a summary of the carrying value of the Group\u2019s interests in unconsolidated structured entities: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Financial investments1 31,300 33,712 Cash and cash equivalents 1,112 1,216 Total Group interest in unconsolidated structured entities 32,412 34,928 1 In this disclosure note, financial investments held by unconsolidated structured entities for 2021 have been re-presented to exclude cash and cash equivalents. The Group\u2019s maximum exposure to loss with regard to the Group\u2019s interests in unconsolidated structured entities presented above, before consideration of the reduction in unit-linked liabilities, is the carrying amount of the Group\u2019s investments (31 December 2022: \u00a332,412 million; 31 December 2021: \u00a334,928 million). The majority of the exposure relates to unit-linked products and therefore any movement in the Group\u2019s investment will be offset by a corresponding movement in investment contract liabilities. Once the Group has disposed of its shares or units in a fund, it ceases to be exposed to any risk from that fund. The Group\u2019s holdings in the above unconsolidated structured entities are less than 50% and as such the net asset value of these structured entities is significantly higher than the carrying value of the Group\u2019s interest. 21(c): Consolidation considerations for structured entities managed by the Group The Group acts as the fund manager for a number of investment funds. Determining whether the Group controls such an investment fund usually focuses on the assessment of decision-making rights as fund manager, the investor\u2019s rights to remove the fund manager and the aggregate economic interests of the Group in the fund in the form of the interest held and exposure to variable returns. In most instances, the Group\u2019s decision-making authority, in its capacity as fund manager, with regard to these funds is regarded to be well-defined. Discretion is exercised when decisions regarding the relevant activities of these funds are being made. For funds managed by the Group, where the investors have the right to remove the Group as fund manager without cause, the fees earned by the Group are considered to be market related. These agreements include only terms, conditions or amounts that are customarily present in arrangements for similar services and levels of skill negotiated on an arm\u2019s length basis. The Group has concluded that it acts as agent on behalf of the investors in such cases. The Group is considered to be acting as principal where the Group is the fund manager and is able to make the investment decisions on behalf of the unit holders and earn a variable fee, and there are no kick out rights that would remove the Group as fund manager. There have been no changes in facts or circumstances which have changed the Group\u2019s conclusion on its approach to the consolidation of funds. 21(d): Other interests in unconsolidated structured entities At the current and prior reporting date, the Group held units in each of the investment funds it managed.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutInterestsInStructuredEntityExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-519": { "value": "21(b): Interests in unconsolidated structured entities The Group invests in unconsolidated structured entities as part of its normal investment and trading activities. The Group\u2019s total interest in unconsolidated structured entities is classified as financial investments held mandatorily at fair value through profit or loss. The table below provides a summary of the carrying value of the Group\u2019s interests in unconsolidated structured entities: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Financial investments1 31,300 33,712 Cash and cash equivalents 1,112 1,216 Total Group interest in unconsolidated structured entities 32,412 34,928 1 In this disclosure note, financial investments held by unconsolidated structured entities for 2021 have been re-presented to exclude cash and cash equivalents. The Group\u2019s maximum exposure to loss with regard to the Group\u2019s interests in unconsolidated structured entities presented above, before consideration of the reduction in unit-linked liabilities, is the carrying amount of the Group\u2019s investments (31 December 2022: \u00a332,412 million; 31 December 2021: \u00a334,928 million). The majority of the exposure relates to unit-linked products and therefore any movement in the Group\u2019s investment will be offset by a corresponding movement in investment contract liabilities. Once the Group has disposed of its shares or units in a fund, it ceases to be exposed to any risk from that fund. The Group\u2019s holdings in the above unconsolidated structured entities are less than 50% and as such the net asset value of these structured entities is significantly higher than the carrying value of the Group\u2019s interest. 21(d): Other interests in unconsolidated structured entities At the current and prior reporting date, the Group held units in each of the investment funds it managed.", "dimensions": { "concept": "ifrs-full:DisclosureOfUnconsolidatedStructuredEntitiesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-520": { "value": "21(c): Consolidation considerations for structured entities managed by the Group The Group acts as the fund manager for a number of investment funds. Determining whether the Group controls such an investment fund usually focuses on the assessment of decision-making rights as fund manager, the investor\u2019s rights to remove the fund manager and the aggregate economic interests of the Group in the fund in the form of the interest held and exposure to variable returns. In most instances, the Group\u2019s decision-making authority, in its capacity as fund manager, with regard to these funds is regarded to be well-defined. Discretion is exercised when decisions regarding the relevant activities of these funds are being made. For funds managed by the Group, where the investors have the right to remove the Group as fund manager without cause, the fees earned by the Group are considered to be market related. These agreements include only terms, conditions or amounts that are customarily present in arrangements for similar services and levels of skill negotiated on an arm\u2019s length basis. The Group has concluded that it acts as agent on behalf of the investors in such cases. The Group is considered to be acting as principal where the Group is the fund manager and is able to make the investment decisions on behalf of the unit holders and earn a variable fee, and there are no kick out rights that would remove the Group as fund manager. There have been no changes in facts or circumstances which have changed the Group\u2019s conclusion on its approach to the consolidation of funds. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutConsolidatedStructuredEntitiesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-464": { "value": "22: Trade, other receivables and other assets This note analyses total trade, other receivables and other assets. 31 December 2022 \u00a3m 31 December 2021 \u00a3m Outstanding settlements 141 181 Other receivables 65 103 Accrued interest 4 1 Accrued income 46 40 Other accruals and prepayments 29 36 Contract assets 11 11 Management fees 7 9 Total trade, other receivables and other assets 303 381 To be settled within 12 months 302 381 To be settled after 12 months 1 \u2013 Total trade, other receivables and other assets 303 381 Other receivables mainly relate to trade debtors, tax debtors and other debtors. There have been no non-performing receivables or material impairments in the year that require disclosure. Information about the Group\u2019s expected credit losses on trade receivables is included in note 37(b). None of the receivables reflected above have been subject to the renegotiation of terms. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-465": { "value": "23: Contract costs Contract costs (on investment contracts and asset management contracts) relate to costs that the Group incurs to obtain new business. These acquisition costs are capitalised in the statement of financial position and are amortised through the income statement over the life of the contracts. The table below analyses the movements in these balances relating to investment and asset management contracts. Investment contracts \u00a3m Asset management \u00a3m Total \u00a3m 1 January 2021 411 2 413 New business 2 1 3 Amortisation \u2013 \u2013 \u2013 Continuing operations movement 2 1 3 New business 24 \u2013 24 Amortisation (45) \u2013 (45) Discontinued operations movement (21) \u2013 (21) Disposal of subsidiaries (383) \u2013 (383) Foreign exchange (3) \u2013 (3) 31 December 2021 6 3 9 New business 2 1 3 Amortisation (1) (1) (2) Continuing operations movement 1 \u2013 1 31 December 2022 7 3 10 ", "dimensions": { "concept": "quilterplc:DisclosureOfContractAssets", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-466": { "value": "24: Cash and cash equivalents 24(a): Analysis of cash and cash equivalents 31 December 2022 \u00a3m 31 December 2021 \u00a3m Cash at bank 406 559 Money market funds 1,112 1,216 Cash and cash equivalents in consolidated funds 264 289 Total cash and cash equivalents per statement of cash flows 1,782 2,064 The Group\u2019s management does not consider that the cash and cash equivalents balance arising due to consolidation of funds of \u00a3264 million (2021: \u00a3289 million) is available for use in the Group\u2019s day-to-day operations. The remainder of the Group\u2019s cash and cash equivalents balance of \u00a31,518 million (2021: \u00a31,775 million) is considered to be available for general use by the Group for the purposes of the disclosures required under IAS 7 Statement of Cash Flows. This balance includes policyholder cash as well as cash and cash equivalents held by regulated subsidiaries to meet their capital and liquidity requirements. 24(b): Analysis of net cash flows from operating activities: Notes 31 December 2022 \u00a3m 31 December 2021 \u00a3m Cash flows from operating activities Profit before tax from continuing operations 65 85 Profit before tax from discontinued operations 6(b) \u2013 131 65 216 Adjustments for Depreciation and impairment of property, plant and equipment 15 22 16 Movement on contract costs 23 (1) 18 Movement on contract liabilities and fee income receivable \u2013 10 Amortisation and impairment of intangibles 14 44 47 Fair value and other movements in financial assets 4,410 (5,102) Fair value movements in investment contract liabilities 27 (4,878) 4,467 Other changes in investment contract liabilities 1,993 3,454 Profit on sale of subsidiaries 6(a) \u2013 (91) Other movements 32 32 1,622 2,851 Net changes in working capital (Increase)/decrease in net derivatives position (21) 24 (Increase)/decrease in loans and advances 16 (5) 15 (Decrease)/increase in provisions 28 (24) 17 Movement in other assets/liabilities 1 61 (20) 11 36 Taxation paid (22) (10) Net cash flows from operating activities 1,676 3,093 1 Working capital changes in respect of other assets and liabilities primarily relate to consolidated funds. 24: Cash and cash equivalents continued 24(c): Cash flows from financing activities is further analysed below: Liabilities Equity1 31 December 2022 Borrowings and lease liabilities \u00a3m Changes in equity \u00a3m Total \u00a3m Note 30 Opening balance at 1 January 2022 299 1,739 2,038 Cash flows from financing activities Liability related: Finance costs on external borrowings (9) \u2013 (9) Equity related: Dividends paid to equity holders of the Company \u2013 (78) (78) Redemption of B shares \u2013 (328) (328) Exchange rate movements paid to shareholders \u2013 (4) (4) Repurchase and cancellation of Ordinary Shares \u2013 (28) (28) Payment of lease liabilities (14) \u2013 (14) Cash flows from financing activities (23) (438) (461) Other changes External debt interest accrual 9 \u2013 9 Changes in lease liabilities 5 \u2013 5 Liability related 14 \u2013 14 Equity related \u2013 247 247 31 December 2022 290 1,548 1,838 Liabilities Equity 1 31 December 2021 Borrowings and lease liabilities \u00a3m Changes in equity \u00a3m Total \u00a3m Note 30 Opening balance at 1 January 2021 319 1,878 2,197 Cash flows from financing activities Liability related: Finance costs on external borrowings (9) \u2013 (9) Equity related: Dividends paid to equity holders of the Company \u2013 (89) (89) Repurchase and cancellation of Ordinary Shares \u2013 (197) (197) Payment of lease liabilities (12) \u2013 (12) Cash flows from financing activities (21) (286) (307) Other changes External debt interest accrual 9 \u2013 9 Changes in lease liabilities (8) \u2013 (8) Liability related 1 \u2013 1 Equity related \u2013 147 147 31 December 2021 299 1,739 2,038 1Full details of changes in equity are shown in the statement of changes in equity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-521": { "value": "24(b): Analysis of net cash flows from operating activities: Notes 31 December 2022 \u00a3m 31 December 2021 \u00a3m Cash flows from operating activities Profit before tax from continuing operations 65 85 Profit before tax from discontinued operations 6(b) \u2013 131 65 216 Adjustments for Depreciation and impairment of property, plant and equipment 15 22 16 Movement on contract costs 23 (1) 18 Movement on contract liabilities and fee income receivable \u2013 10 Amortisation and impairment of intangibles 14 44 47 Fair value and other movements in financial assets 4,410 (5,102) Fair value movements in investment contract liabilities 27 (4,878) 4,467 Other changes in investment contract liabilities 1,993 3,454 Profit on sale of subsidiaries 6(a) \u2013 (91) Other movements 32 32 1,622 2,851 Net changes in working capital (Increase)/decrease in net derivatives position (21) 24 (Increase)/decrease in loans and advances 16 (5) 15 (Decrease)/increase in provisions 28 (24) 17 Movement in other assets/liabilities 1 61 (20) 11 36 Taxation paid (22) (10) Net cash flows from operating activities 1,676 3,093 1 Working capital changes in respect of other assets and liabilities primarily relate to consolidated funds. 24(c): Cash flows from financing activities is further analysed below: Liabilities Equity1 31 December 2022 Borrowings and lease liabilities \u00a3m Changes in equity \u00a3m Total \u00a3m Note 30 Opening balance at 1 January 2022 299 1,739 2,038 Cash flows from financing activities Liability related: Finance costs on external borrowings (9) \u2013 (9) Equity related: Dividends paid to equity holders of the Company \u2013 (78) (78) Redemption of B shares \u2013 (328) (328) Exchange rate movements paid to shareholders \u2013 (4) (4) Repurchase and cancellation of Ordinary Shares \u2013 (28) (28) Payment of lease liabilities (14) \u2013 (14) Cash flows from financing activities (23) (438) (461) Other changes External debt interest accrual 9 \u2013 9 Changes in lease liabilities 5 \u2013 5 Liability related 14 \u2013 14 Equity related \u2013 247 247 31 December 2022 290 1,548 1,838 Liabilities Equity 1 31 December 2021 Borrowings and lease liabilities \u00a3m Changes in equity \u00a3m Total \u00a3m Note 30 Opening balance at 1 January 2021 319 1,878 2,197 Cash flows from financing activities Liability related: Finance costs on external borrowings (9) \u2013 (9) Equity related: Dividends paid to equity holders of the Company \u2013 (89) (89) Repurchase and cancellation of Ordinary Shares \u2013 (197) (197) Payment of lease liabilities (12) \u2013 (12) Cash flows from financing activities (21) (286) (307) Other changes External debt interest accrual 9 \u2013 9 Changes in lease liabilities (8) \u2013 (8) Liability related 1 \u2013 1 Equity related \u2013 147 147 31 December 2021 299 1,739 2,038 1Full details of changes in equity are shown in the statement of changes in equity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-523": { "value": "25: Share capital, capital redemption reserve and merger reserve Financial instruments issued are classified as equity when there is no contractual obligation to transfer cash, other financial assets or issue a variable number of own equity instruments. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax. At 31 December 2022, the Company\u2019s equity capital comprises 1,404,105,498 Ordinary Shares of 8 1/6 pence each with an aggregated nominal value of \u00a3114,668,616 (31 December 2021: 1,655,827,217 Ordinary Shares of 7 pence each with an aggregated nominal value of \u00a3115,907,905). All Ordinary Shares have been called up and fully paid. This note gives details of the Company\u2019s share capital, shows the movements during the year and also gives details of the merger reserve release of \u00a3124 million in the prior year and \u00a325 million in the current year: Number of Ordinary Shares Nominal value of Ordinary Shares \u00a3m Ordinary Share premium \u00a3m At 1 January 2021 1,783,969,051 125 58 Shares cancelled through share buyback programme (128,141,834) (9) \u2013 At 31 December 2021 1,655, 827, 217 116 58 Shares cancelled through share buyback programme (17,704,132) (1) \u2013 Share Consolidation (including shares cancelled)1 (234,017,587) \u2013 \u2013 At 31 December 2022 1,404,105,498 115 58 1 To effect the Share Consolidation, four Ordinary Shares were cancelled so that the total Ordinary Shares were exactly divisible by seven. 25(a): Share capital On 11 March 2020, the Company announced a share buyback programme to purchase shares up to a maximum value of \u00a3375 million, in order to return the net surplus proceeds to shareholders arising from the sale of Quilter Life Assurance which had the impact of reducing the share capital of the Company. The programme completed in January 2022. On 9 March 2022, the Company announced a capital return of \u00a3328 million, equivalent to 20 pence per share, from the net surplus proceeds arising from the sale of Quilter International by way of a B Share Scheme. Following the return of capital, a Share Consolidation was completed so that comparability between the market price for Quilter plc\u2019s Ordinary Shares before and after the implementation of the B Share Scheme was maintained. New Ordinary Shares were issued for existing Ordinary Shares in a ratio of six new shares of 8 1/6 pence each for seven existing shares of 7 pence each resulting in a reduction in the numbers of shares by 234,017,587. At 31 December 2022, there is one class of share capital being the Ordinary Shares of 8 1/6 pence each. All shares issued carry equal voting rights. The holders of the Company\u2019s Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholder meetings of the Company. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-467": { "value": "25(a): Share capital On 11 March 2020, the Company announced a share buyback programme to purchase shares up to a maximum value of \u00a3375 million, in order to return the net surplus proceeds to shareholders arising from the sale of Quilter Life Assurance which had the impact of reducing the share capital of the Company. The programme completed in January 2022. On 9 March 2022, the Company announced a capital return of \u00a3328 million, equivalent to 20 pence per share, from the net surplus proceeds arising from the sale of Quilter International by way of a B Share Scheme. Following the return of capital, a Share Consolidation was completed so that comparability between the market price for Quilter plc\u2019s Ordinary Shares before and after the implementation of the B Share Scheme was maintained. New Ordinary Shares were issued for existing Ordinary Shares in a ratio of six new shares of 8 1/6 pence each for seven existing shares of 7 pence each resulting in a reduction in the numbers of shares by 234,017,587. At 31 December 2022, there is one class of share capital being the Ordinary Shares of 8 1/6 pence each. All shares issued carry equal voting rights. The holders of the Company\u2019s Ordinary Shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholder meetings of the Company. 25(b): Capital redemption reserve Following the issue and redemption of the B preference shares as part of the B Share Scheme, the Company transferred \u00a3328 million from retained earnings to the capital redemption reserve, as required under the provisions of sections 688 and 733 of the Companies Act 2006, being an amount equal to the nominal value of the B shares redeemed in the year. The increase in the capital redemption reserve results from the UK company law requirement to maintain the company\u2019s capital when shares are redeemed out of the company\u2019s distributable profits. 25(c): Merger reserve During the year ended 31 December 2021, a dividend was paid by Quilter Perimeter Holdings Limited up to its parent Quilter plc. The resulting decrease in Quilter Perimeter Holdings Limited\u2019s net asset value gave rise to a \u00a3124 million impairment of Quilter plc\u2019s investment in Quilter Perimeter Holdings Limited and an associated release of the merger reserve reducing it to \u00a325 million. In 2022, the remaining balance of the merger reserve recognised in the Group\u2019s statement of financial position was released in the creation of the B preference shares (the remainder of the B shares were created from retained earnings). ", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-522": { "value": "25(c): Merger reserve During the year ended 31 December 2021, a dividend was paid by Quilter Perimeter Holdings Limited up to its parent Quilter plc. The resulting decrease in Quilter Perimeter Holdings Limited\u2019s net asset value gave rise to a \u00a3124 million impairment of Quilter plc\u2019s investment in Quilter Perimeter Holdings Limited and an associated release of the merger reserve reducing it to \u00a325 million. In 2022, the remaining balance of the merger reserve recognised in the Group\u2019s statement of financial position was released in the creation of the B preference shares (the remainder of the B shares were created from retained earnings). ", "dimensions": { "concept": "quilterplc:DisclsoureOfMergerReserve", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-468": { "value": "26: Share-based payments During the year ended 31 December 2022, the Group participated in a number of share-based payment arrangements. This note describes the nature of the plans and how the share options and awards are valued. 26(a): Description of share-based payment arrangements The Group operates the following share-based payment schemes with awards over Quilter plc shares: the Quilter plc Performance Share Plan, the Quilter plc Share Reward Plan, the Quilter plc Share Incentive Plan, the Quilter plc Sharesave Plan, and the Charles Derby Group Performance Share Plan. 26: Share-based payments continued 26(a): Description of share-based payment arrangements continued Description of award Vesting conditions Scheme Restricted shares Conditional shares Options Other Dividend entitlement 1 Contractual life (years) Typical service (years) Performance (measure) Quilter plc Performance Share Plan \u2013 \u2013 \u2013 Up to 10 3 AP EPS CAGR2 and Relative Total Shareholder Return Quilter plc Performance Share Plan \u2013 \u2013 \u2013 Not less than 3 3 Conduct, Risk & Compliance Underpins Quilter plc Share Reward Plan \u2013 \u2013 \u2013 Typically, 3 3 \u2013 Quilter plc Share Incentive Plan \u2013 \u2013 \u2013 Not less than 3 2 \u2013 Quilter plc Sharesave Plan 3 \u2013 \u2013 \u2013 3\u00bd - 5\u00bd 3 & 5 \u2013 Charles Derby Group Performance Share Plan \u2013 \u2013 \u2013 Up to 10 5 AP EPS CAGR 1Participants are entitled to actual dividends for the Share Incentive Plan. For all other schemes, participants are entitled to dividend equivalents. 2Adjusted profit compound annual growth rate (\u201cCAGR\u201d). 3The Quilter plc Sharesave Plan is linked to a savings plan. 26(b): Reconciliation of movements in options The movement in options outstanding under the Performance Share Plans and Sharesave Plan arrangements during the year is detailed below: Year ended 31 December 2022 Year ended 31 December 2021 Options over Ordinary Shares (London Stock Exchange) Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at beginning of the year 27,188,566 \u00a30.62 24,898,095 \u00a30.54 Granted during the year 8,639,650 \u00a30.83 6 ,315,110 \u00a30.86 Forfeited during the year (7,803,514) \u00a30.13 (1,544,730) \u00a30.38 Exercised during the year (8,094,488) \u00a30.92 (1,609,808) \u00a30.27 Expired during the year (441,038) \u00a31.27 (220,391) \u00a31.25 Cancelled during the year (3,090,346) \u00a31.26 (649,710) \u00a31.27 Outstanding at end of the year 16,398,830 \u00a30.67 27,188,566 \u00a30.62 Exercisable at end of the year \u2013 \u2013 \u2013 \u2013 The weighted average fair value of options at the measurement date for options granted during the year ended 31 December 2022 is \u00a30.59, (2021: \u00a30.68). The weighted average share price at the dates of exercise for options exercised during the year was \u00a31.14 (2021: \u00a31.62). The options outstanding at 31 December 2022 have exercise prices of \u00a3nil for the Quilter plc Performance Share Plan, and between \u00a31.17 and \u00a31.31 for the Quilter plc Sharesave Plan, with a weighted average remaining contractual life of 1.8 years. At 31 December 2021, the exercise price was \u00a3nil for both the Quilter plc Performance Share Plan and Charles Derby Group Performance Share Plan, and between \u00a31.25 and \u00a31.31 for the Quilter plc Sharesave Plan, with a weighted average remaining contractual life of 1.3 years. See note 4 for details of the capital return, Share Consolidation and impact on shareholder metrics. 26(c): Measurements and assumptions In determining the fair value of equity-settled share-based awards and the related charge to the income statement, the Group makes assumptions about future events and market conditions. Specifically, management makes estimates of the likely number of shares that will vest and the fair value of each award granted which is valued and \u2018locked in\u2019 at the grant date. The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted. The estimate of fair value of share options granted is measured using either a Black-Scholes option pricing model or a Monte Carlo simulation. 26: Share-based payments continued 26(c): Measurements and assumptions continued The inputs used in the measurement of fair values at the grant date for awards granted during 2022 were as follows: Scheme Weighted average share price \u00a3 Weighted average exercise price \u00a3 Weighted average expected volatility Weighted average expected life (years) Weighted average risk-free interest rate Weighted average expected dividend yield Expected forfeitures per annum Quilter plc Performance Share Plan \u2013 Share Options (Nil cost options) 1.38 0.00 29% 3.0 1.5% 0.0% 0% Quilter plc Performance Share Plan \u2013 Conditional Shares 1.36 0.00 30% 3.0 1.5% 0.0% 4% Quilter plc Share Reward Plan \u2013 Conditional Shares 1.37 0.00 30% 2.0 1.4% 0.0% 4% Quilter plc Sharesave Plan 1.43 1.17 30% 3.4 1.4% 3.1% 5% The expected volatility used was based on the historical volatility of the share price over the period for which trading history is available. The risk-free interest rate was based on the yields available on UK Government bonds as at the date of grant. The bonds chosen were those with a similar remaining term to the expected life of the share awards. 26(d): Share grants The following table summarises the fair value of Conditional Shares granted by the Group during the year: Year ended 31 December 2022 Year ended 31 December 2021 Instruments granted during the year Number granted Weighted average fair value Number granted Weighted average fair value Quilter plc Performance Share Plan \u2013 Conditional Shares 4,258,062 \u00a31.38 3,854,809 \u00a31.64 Quilter plc Share Reward Plan \u2013 Conditional Shares 11,204,853 \u00a31.37 4,243,273 \u00a31.64 26(e): Financial impact The share-based payment reserve of \u00a341 million (31 December 2021: \u00a342 million) represents the cumulative expense of the Group for the unsettled portion of equity awarded schemes. The total expense recognised in the year arising from equity compensation plans was as follows: Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Expense arising from equity-settled share and share option plans \u2013 continuing operations 24 19 Expense arising from equity-settled share and share option plans \u2013 discontinued operations \u2013 1 Total expense arising from share and share option plans 24 20 ", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-469": { "value": "27: Investment contract liabilities The following table provides a summary of the Group\u2019s investment contract liabilities: 2022 \u00a3m 2021 \u00a3m Carrying amount at 1 January 41,071 57,4 07 From continuing operations Fair value movements (4,878) 2,821 Investment income 560 472 Movements arising from investment return (4,318) 3,293 From discontinued operations Fair value movements \u2013 1,646 Investment income \u2013 172 Movements arising from investment return \u2013 1,818 Contributions received 4,408 6,837 Withdrawals and surrenders 1 (2,759) (3,866) Claims and benefits (219) (162) Other movements 3 1 Change in liability (2,885) 7,921 Currency translation gain \u2013 (199) Disposal of subsidiaries \u2013 (24,058) Investment contract liabilities at end of the year 38,186 41,071 1Includes amounts previously presented as maturities of \u00a3406 million for the year to 31 December 2021. For unit-linked investment contracts, movements in asset values are offset by corresponding changes in liabilities, limiting the net impact on profit. The benefits offered under the unit-linked investment contracts are based on the risk appetite of policyholders and the return on their selected investments and collective fund investments, whose underlying investments include equities, debt securities, property and derivatives. This investment mix is unique to individual policyholders. For unit-linked business, the unit liabilities are determined as the value of units credited to policyholders. Since these liabilities are determined on a retrospective basis, no assumptions for future experience are required. Assumptions for future experience are required for unit-linked business in assessing whether the total of the contract costs asset and contract liability is greater than the present value of future profits expected to arise on the relevant blocks of business (the \u201crecoverability test\u201d). If this is the case, then the contract costs asset is restricted to the recoverable amount. For linked contracts, the assumptions are on a best estimate basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentContractsLiabilitiesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-470": { "value": "28: Provisions 31 December 2022 Compensation provisions \u00a3m Sale of subsidiaries \u00a3m Property provisions \u00a3m Clawback and other provisions \u00a3m Total \u00a3m Balance at beginning of the year 41 22 9 21 93 Charge to income statement 22 \u2013 4 3 29 Utilised during the year (28) (7) (1) (2) (38) Unused amounts reversed (12) \u2013 \u2013 (4) (16) Reclassification within the statement of financial position 3 \u2013 \u2013 \u2013 1 1 Balance at 31 December 2022 23 15 12 19 69 31 December 2021 Compensation provisions \u00a3m Sale of subsidiaries \u00a3m Property provisions \u00a3m Clawback and other provisions \u00a3m Total \u00a3m Balance at beginning of the year 42 10 \u2013 25 77 Charge to income statement 1 23 17 7 2 49 Utilised during the year (12) (4) \u2013 (4) (20) Unused amounts reversed (10) (1) \u2013 (5) (16) Disposals 2 (2) \u2013 \u2013 \u2013 (2) Reclassification within the statement of financial position 4 \u2013 \u2013 2 3 5 Balance at 31 December 2021 41 22 9 21 93 1 Part of the charge to the income statement in 2021 was included within the discontinued operations income statement. 2 The balance within \u201cDisposals\u201d relates to the provision balance within Quilter International at completion of the sale of the business on 30 November 2021. 3 Clawback and other provisions related to the balancing premium payable for the bulk annuity purchased for the Quilter Cheviot Limited Retirement Benefits scheme were reclassified during the year to 31 December 2022 from accruals reflecting the uncertainty of the amounts to be settled. 4 During the year to 31 December 2021, property provisions related to dilapidations and other provisions related to historical licence agreements were reclassified from lease liabilities and accruals respectively reflecting the uncertainty of the amounts to be settled. Compensation provisions Compensation provisions total \u00a323 million (31 December 2021: \u00a341 million) and the net reduction of \u00a318 million during the year is due to additional charges to the income statement of \u00a322 million, compensation payments made during the period of \u00a328 million and the \u00a312 million release of unused amounts during 2022 following further review work completed during the year. Compensation provisions are comprised of the following: Lighthouse pension transfer advice provision of \u00a35 million (31 December 2021: \u00a329 million) Lighthouse pension transfer advice provided to British Steel members of \u00a34 million (31 December 2021: \u00a321 million) A total provision of \u00a34 million (31 December 2021: \u00a321 million) remains for the redress of British Steel Pension Scheme cases, including anticipated costs associated with the redress activity. This is comprised of two parts: (a)\u2002Client redress provision of \u00a33 million (31 December 2021: \u00a319 million), comprised of \u00a323 million (31 December 2021: \u00a323 million) redress payable, less payments made to customers of \u00a320 million, of which \u00a316 million was paid in 2022 (31 December 2021: \u00a34 million). (b)\u2002Anticipated costs associated with redress activity of \u00a31 million (31 December 2021: \u00a32 million), comprised of \u00a37 million costs payable (31 December 2021: \u00a34 million), less payments made of \u00a34 million during 2022 and \u00a32 million during 2021. This provision is recognised in respect of the anticipated costs of legal and professional fees related to the cases and redress process, which includes the expected costs to review advice. During the year to 31 December 2022, the skilled person completed their review of all British Steel Pension Scheme cases within the initial scope of the review, reflecting the outcome on suitability of the DB to DC pension transfer advice review for each case, and all remaining offers were made to customers who received unsuitable DB to DC pension transfer advice which caused them to sustain a loss. Certain customers who have been included in the skilled person review work already undertaken have referred their case to the Financial Ombudsman Service, relating to cases where: (i) relevant DB to DC pension transfer advice was found to be suitable by the skilled person; or (ii) where relevant DB to DC pension transfer advice was found to be unsuitable by the skilled person, but the customer disagrees with the way in which their redress offer has been calculated by the skilled person. The Financial Ombudsman Service may uphold some or all of the challenges made. In November 2022, the FCA published a policy statement containing the final rules for a redress scheme for former members of the British Steel Pension Scheme who received unsuitable advice (the \u201cBSPS Redress Scheme\u201d). The BSPS Redress Scheme will cover those persons who received advice between 26 May 2016 and 29 March 2018 to transfer out of the British Steel Pension Scheme. The final rules for the BSPS Redress Scheme set out how advisers must determine whether they gave unsuitable advice and whether they must pay redress. The Group may therefore face further costs of redress as a result of the BSPS Redress Scheme. The BSPS Redress Scheme will not cover individuals that have accepted redress for that advice, referred the matter to the Financial Ombudsman Service or received a final outcome following a suitability assessment of their case conducted through a skilled person review. Therefore, based on the final rules of the BSPS Redress Scheme, this process will not include Lighthouse cases that have already been reviewed by the skilled person where the customer received a final outcome. The Group is currently considering whether, based on the final rules for the BSPS Redress Scheme, there are any Lighthouse cases relating to British Steel Pension Scheme members that were subject to the skilled person review that may fall within the scope of the BSPS Redress Scheme. 28: Provisions continued An asset of \u00a33 million representing an insurance recoverable in respect of British Steel pension transfer advice was included in the fair value of the acquired net assets of Lighthouse and presented on the statement of financial position as at 31 December 2021. During 2022, the insurers confirmed coverage and the Group received \u00a315 million cash. Lighthouse pension transfer advice provided to members of other schemes of \u00a31 million (31 December 2021: \u00a38 million) During 2021, the skilled person review identified unsuitable DB to DC pension advice provided by Lighthouse advisers for pension schemes other than the British Steel Pension Scheme. The initial scope of the review concluded in 2022, with \u00a33 million paid to customers and the remaining provision released to the income statement. Subject to FCA confirmation, we anticipate that the skilled person review will conclude during 2023. In the second half of 2022, the skilled person recommended a potential review of a further sample of Lighthouse DB to DC pension transfer advice cases not relating to the British Steel Pension Scheme. In December 2022, the FCA confirmed to the Group that it agreed with the skilled person\u2019s recommendation. The FCA also confirmed that, given the cooperation of the Group in relation to the skilled person review and established past business review methodology and consistent with the recommendation made by the skilled person, this further sample should be reviewed under a Group managed past business review process with the current skilled person acting as expert. The FCA also agreed with the skilled person that the further sample should be selected on a risk-based approach and has set out to the Group the key risk factors to be used in determining the sample. The review of this sample may uncover some additional cases where customer redress is required. Until the relevant sample has been reviewed, uncertainty exists as to the number of cases where this will be required and the value of total redress which may be payable. A provision for redress relating to the review of this further sample of cases of \u00a31 million has been established at 31 December 2022. Compensation provisions (other) of \u00a318 million (31 December 2021: \u00a312 million) Other compensation provisions of \u00a318 million include amounts relating to the cost of correcting deficiencies in policy administration systems, including restatements, any associated litigation costs and the related costs to compensate previous or existing policyholders and customers. This provision represents management\u2019s best estimate of expected outcomes based upon previous experience, and a review of the details of each case. Due to the nature of the provision, the timing of the expected cash outflows is uncertain. The best estimate of the timing of outflows is that the majority of the balance is expected to be settled within 12 months. A provision of \u00a37 million, included within the balance, has been recognised at 31 December 2022 (31 December 2021: \u00a36 million) relating to potentially unsuitable DB to DC pension transfer advice provided by advisers, including advice provided prior to Quilter\u2019s acquisition of the relevant advice businesses. Of this balance, \u00a32 million (31 December 2021: \u00a32 million) has been recognised for potentially unsuitable DB to DC pension transfer advice provided to British Steel Pension Scheme members by Quilter Financial Planning firms other than Lighthouse. This provision was recognised following the receipt of a \u201cDear CEO\u201d letter from the FCA in December 2021, and subsequent establishment of the BSPS Redress Scheme. These British Steel Pension Scheme cases have yet to be reviewed for suitability and an estimate of the provision has been made based upon the Group\u2019s experience of the Lighthouse skilled person review. A provision of \u00a34 million, included within the balance, related to Final Plan Closure (\u201cFPC\u201d) receipts previously recognised as revenue since 2013 for distributions the Group received from investments for clients who had previously closed their accounts. FPC receipts represent distributions, including tax gross ups where relevant, and rebates received after a customer has left the Quilter platform, which the Terms and Conditions of the pension and insured bonds legally entitled the Group to retain. A review this year has led to a change in business policy, and Quilter have made the decision to voluntarily return these amounts to those impacted clients backdated to inception, with an appropriate interest rate applied to the balances owed. A provision of \u00a36 million was initially recognised, and payments of \u00a32 million have been made to clients during the year. The remaining provision outstanding of \u00a34 million is expected to be payable within one year. The Group estimates a reasonably possible change of +/- \u00a34 million from the \u00a318 million balance, based upon a review of the cases and the range of potential outcomes for the customer redress payments. Sale of subsidiaries Sale of subsidiaries provisions total \u00a315 million at 31 December 2022 (31 December 2021: \u00a322 million), and include the following: Provisions arising on the disposal of Quilter International of \u00a311 million (31 December 2021: \u00a316 million) Quilter International was sold on 30 November 2021, resulting in provisions totalling \u00a317 million being established in respect of costs related to the disposal including the costs of business separation and data migration activities. The costs of business separation arise from the process required to separate Quilter International\u2019s infrastructure, which is complex and covers a wide range of areas including people, IT systems, data, and contracts facilities. A programme team has been established to ensure the transition of these areas to the acquirer. These provisions have been based on external quotations and estimations, together with estimates of the incremental time and resource costs required to achieve the separation, which is expected to occur over a two-year period. The most significant element of the provision is the cost of migration of IT systems and data to the acquirer. Calculation of the provision is based on management\u2019s best estimate of the work required, the time it is expected to take, the number and skills of the staff required and their cost, and the cost of related external IT services to support the work. In reaching these judgements and estimates, management has made use of its past experience of previous IT migrations following business disposals, including the migration of QLA. The Group estimates a provision sensitivity of +/-25% (\u00a33 million), based upon a review of the range of time periods expected to complete the work required. The provision is expected to be fully utilised over three years from the sale, with \u00a38 million forecast to be paid within one year. During the year, \u00a36 million (2021: \u00a31 million) of the provision has been utilised. 28: Provisions continued Sale of Single Strategy Asset Management business provision of \u00a34 million (31 December 2021: \u00a34 million) In 2018, a restructuring provision was recognised as a result of the sale of the Single Strategy Asset Management business (now known as Jupiter Investment Management (\u201cJupiter\u201d)) to enable the remaining Quilter Investors business to function as a standalone operation going forward. The remaining provision relates to various sale-related future commitments, the outcome of which was uncertain at the time of the sale and the most significant of which is in relation to the guarantee of revenues for the seller in future years arising from funds invested by customers of Quilter. In 2021, \u00a32 million was settled relating to the 2020 measurement year. The balance has been adjusted for the latest estimate for the 2022 measurement year, which is the final measurement year required in the sale agreement. The expected range of payments based upon the latest information received from Jupiter and the Group\u2019s reasonable expectations of AUM invested within Jupiter funds during the 2022 assessment period is between \u00a34 million and \u00a35 million. The provision outstanding is estimated to be payable within one year, with expected final settlement due in the first half of 2023. Once finalised and settled, this will be the final amount payable under this arrangement with Jupiter. Provisions arising on the disposal of Quilter Life Assurance of \u00a3nil (31 December 2021: \u00a31 million) Quilter Life Assurance was sold in 2019, resulting in provisions totalling \u00a36 million being established in respect of the costs of disposing the business and the related costs of business separation. During the year, \u00a31 million of the provision has been utilised. These were the final costs incurred to complete and close the project. Property provisions Property provisions represent the discounted value of expected future costs of reinstating leased property to its original condition at the end of the lease term, and any onerous commitments which may arise in cases where a leased property is no longer being fully utilised by the Group. The estimate is based upon property location, size of property and an estimate of the charge per square foot. Property provisions are utilised or released when the reinstatement obligations have been fulfilled. The associated asset for the property provisions relating to the cost of reinstating property is included within \u201cProperty, plant and equipment\u201d. Of the \u00a312 million provision outstanding, \u00a33 million (2021: \u00a31 million) is estimated to be payable within one year. The majority of the balance relates to leased property which has a lease term maturity of more than five years. Clawback and other provisions Other provisions include amounts for the resolution of legal uncertainties and the settlement of other claims raised by contracting parties and indemnity commission provisions and now includes the balancing premium payable for the bulk annuity purchased for the Quilter Cheviot Limited Retirement Benefits scheme. Where material, provisions are discounted at discount rates specific to the risks inherent in the liability. The timing and final amounts of payments, particularly those in respect of litigation claims and similar actions against the Group, are uncertain and could result in adjustments to the amounts recorded. Included within the balance at 31 December 2022 is \u00a314 million (31 December 2021: \u00a316 million) of clawback provisions in respect of potential refunds due to product providers on indemnity commission within the Quilter Financial Planning business. This provision, which is estimated and charged as a reduction of revenue on the income statement at the point of sale of each policy, is based upon assumptions determined from historical experience of the proportion of policyholders cancelling their policies, which requires Quilter to refund a portion of commission previously received. Reductions to the provision result from the payment of cash to product providers as refunds or the recognition of revenue where a portion is assessed as no longer payable. The provision has been assessed at the reporting date and adjusted for the latest cancellation information available. At 31 December 2022, an associated balance of \u00a38 million recoverable from brokers is included within \u201cTrade, other receivables and other assets\u201d (31 December 2021: \u00a39 million). The Group estimates a reasonably possible change of +/- \u00a33 million, based upon the potential range of outcomes for the proportion of cancelled policies within the clawback provision, and a detailed review of the other provisions. Of the total \u00a319 million provision outstanding, \u00a38 million is estimated to be payable within one year (31 December 2021: \u00a313 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-471": { "value": "29: Tax assets and liabilities Deferred tax is calculated on all temporary differences at the tax rate applicable in the country in which the differences arise. Deferred tax summary 31 December 2022 \u00a3m 31 December 2021 \u00a3m Deferred tax assets 94 88 Less: deferred tax liabilities (24) (139) Net deferred tax asset/(liability) 70 (51) The main rate of Corporation Tax is 19% for the financial year 2022 (2021: 19%). The Corporation Tax rate will increase from 19% to 25%, effective from 1 April 2023. This change was substantively enacted in 2021 and the new rate has been used in recognising the Company\u2019s deferred tax assets and liabilities for reversals expected to take place on or after 1 April 2023. 29(a): Deferred tax assets Deferred tax assets are recognised for tax losses carried forward only to the extent that the realisation of the related tax benefit is probable. Realisation of the tax benefit is considered to be probable where on the basis of all available evidence, it is more likely than not that there will be suitable taxable profits against which the loss can be relieved. The movements on recognised deferred tax assets are explained below: 31 December 2022 At beginning of the year \u00a3m Income statement (charge)/ credit \u00a3m Charged to equity \u00a3m At end of the year \u00a3m Tax losses carried forward 24 (8) \u2013 16 Accelerated depreciation 20 1 \u2013 21 Accrued interest expense and other temporary differences 41 (10) \u2013 31 Share-based payments 9 \u2013 (2) 7 Deferred expenses and excess expenses1 6 44 \u2013 50 Netted against deferred tax liabilities (12) (19) \u2013 (31) Deferred tax assets 88 8 (2) 94 31 December 2021 At beginning of the year \u00a3m Income statement (charge)/ credit \u00a3m Charged to equity \u00a3m At end of the year \u00a3m Tax losses carried forward 15 9 \u2013 24 Accelerated depreciation 19 1 \u2013 20 Accrued interest expense and other temporary differences 41 \u2013 \u2013 41 Share-based payments 9 \u2013 \u2013 9 Deferred expenses and excess expenses1 6 \u2013 \u2013 6 Provisions 1 (1) \u2013 \u2013 Netted against deferred tax liabilities (13) 1 \u2013 (12) Deferred tax assets 78 10 \u2013 88 1For the year ended 31 December 2022, the \u00a350 million includes deferred expenses of \u00a35 million (2021: \u00a36 million) and excess expenses of \u00a345 million (2021: \u00a3nil). The recognition of deferred tax assets is subject to the estimation of future taxable profits based on the Group\u2019s Business Plan. The Business Plan takes into account estimated levels of assets under management and administration, which are subject to a large number of factors including global stock market movements and related movements in foreign exchange rates, together with estimates of net client cash flow, expenses and other charges. The Business Plan also takes into account climate-related risks. The Business Plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised. In general, the Group assesses recoverability of deferred tax assets based on estimated taxable profits over a three-year planning horizon. Deferred tax assets have been recognised to the extent they are supported by the Group\u2019s Business Plan. The sensitivity of these deferred tax assets is such that any decrease in profitability over the three-year planning period would result in a reduction in the value of these assets. 29: Tax assets and liabilities continued 29(a): Deferred tax assets continued Unrecognised deferred tax assets The amounts for which no deferred tax asset has been recognised consist of: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Gross amount Tax Gross amount Tax Pre-April 2017 UK tax losses 244 61 252 63 Post-April 2017 UK tax losses 91 23 106 26 Capital losses 347 87 347 87 Total unrelieved tax losses 682 171 705 176 Other timing differences \u2013 \u2013 3 1 Total unrecognised deferred tax assets 1 682 171 708 177 1 None of the unrecognised deferred tax assets have a set expiry date in tax law. Movements in unrecognised deferred tax assets Under UK tax law, UK brought forward non-capital tax losses that arose after 1 April 2017 (\u201cPost-April 2017 UK tax losses\u201d) may be offset against current year UK taxable profits arising in any company within Group, subject to a restriction of 50% of profits each year. Consequently, as described above and in note 11, the recognition of deferred tax assets on Post-April 2017 UK tax losses is assessed by reference to the Group\u2019s Business Plan. The Group may in the future recognise additional deferred tax assets in respect of the unrecognised portion of the Post-April 2017 UK tax losses, as the Group progresses through the Business Plan period. The recognition of deferred tax assets on these losses is expected to remain a critical accounting estimate as described in these financial statements for the foreseeable future. All other non-capital UK tax losses within the Group (\u201cPre-April 2017 UK tax losses\u201d) can only be used against taxable profits arising in the same company as the loss. It is therefore less likely that a deferred tax asset will be recognised in the foreseeable future in respect of the currently unrecognised portion of these tax losses. Capital losses are in Quilter Life & Pensions Limited. There is currently insufficient evidence to forecast future chargeable gains in that company on which to justify recognition of a deferred tax asset for any of these losses. 29(b): Deferred tax liabilities The movement on deferred tax liabilities is as follows: 31 December 2022 At beginning of the year \u00a3m Income statement (credit)/ charge \u00a3m Acquisition/ disposal of subsidiaries \u00a3m At end of the year \u00a3m Other acquired intangibles 32 (8) \u2013 24 Other temporary differences \u2013 1 \u2013 1 Investment gains 120 (90) \u2013 30 Netted against deferred tax assets (13) (18) \u2013 (31) Deferred tax liabilities 139 (115) \u2013 24 31 December 2021 At beginning of the year \u00a3m Income statement (credit)/ charge \u00a3m Acquisition/ disposal of subsidiaries \u00a3m At end of the year \u00a3m Other acquired intangibles 36 (4) \u2013 32 Other temporary differences 2 \u2013 (2) \u2013 Investment gains 81 39 \u2013 120 Netted against deferred tax assets (13) \u2013 \u2013 (13) Deferred tax liabilities 106 35 (2) 139 Movements in deferred tax liabilities Deferred tax liabilities in relation to investment gains and losses have decreased by \u00a390 million (2021: \u00a339 million increase) due to market movements in the year, as disclosed in note 11. 29(c): Current tax receivables and payables Current tax receivables and current tax payables at 31 December 2022 were \u00a310 million (2021: \u00a3nil) and \u00a31 million (2021: \u00a32 million), respectively. ", "dimensions": { "concept": "quilterplc:DisclosureOfTaxAssetsAndLiabilities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-524": { "value": "29(a): Deferred tax assets Deferred tax assets are recognised for tax losses carried forward only to the extent that the realisation of the related tax benefit is probable. Realisation of the tax benefit is considered to be probable where on the basis of all available evidence, it is more likely than not that there will be suitable taxable profits against which the loss can be relieved. The movements on recognised deferred tax assets are explained below: 31 December 2022 At beginning of the year \u00a3m Income statement (charge)/ credit \u00a3m Charged to equity \u00a3m At end of the year \u00a3m Tax losses carried forward 24 (8) \u2013 16 Accelerated depreciation 20 1 \u2013 21 Accrued interest expense and other temporary differences 41 (10) \u2013 31 Share-based payments 9 \u2013 (2) 7 Deferred expenses and excess expenses1 6 44 \u2013 50 Netted against deferred tax liabilities (12) (19) \u2013 (31) Deferred tax assets 88 8 (2) 94 31 December 2021 At beginning of the year \u00a3m Income statement (charge)/ credit \u00a3m Charged to equity \u00a3m At end of the year \u00a3m Tax losses carried forward 15 9 \u2013 24 Accelerated depreciation 19 1 \u2013 20 Accrued interest expense and other temporary differences 41 \u2013 \u2013 41 Share-based payments 9 \u2013 \u2013 9 Deferred expenses and excess expenses1 6 \u2013 \u2013 6 Provisions 1 (1) \u2013 \u2013 Netted against deferred tax liabilities (13) 1 \u2013 (12) Deferred tax assets 78 10 \u2013 88 1For the year ended 31 December 2022, the \u00a350 million includes deferred expenses of \u00a35 million (2021: \u00a36 million) and excess expenses of \u00a345 million (2021: \u00a3nil). The recognition of deferred tax assets is subject to the estimation of future taxable profits based on the Group\u2019s Business Plan. The Business Plan takes into account estimated levels of assets under management and administration, which are subject to a large number of factors including global stock market movements and related movements in foreign exchange rates, together with estimates of net client cash flow, expenses and other charges. The Business Plan also takes into account climate-related risks. The Business Plan, adjusted for known and estimated tax sensitivities, is used to determine the extent to which deferred tax assets are recognised. In general, the Group assesses recoverability of deferred tax assets based on estimated taxable profits over a three-year planning horizon. Deferred tax assets have been recognised to the extent they are supported by the Group\u2019s Business Plan. The sensitivity of these deferred tax assets is such that any decrease in profitability over the three-year planning period would result in a reduction in the value of these assets. 29(a): Deferred tax assets continued Unrecognised deferred tax assets The amounts for which no deferred tax asset has been recognised consist of: 31 December 2022 \u00a3m 31 December 2021 \u00a3m Gross amount Tax Gross amount Tax Pre-April 2017 UK tax losses 244 61 252 63 Post-April 2017 UK tax losses 91 23 106 26 Capital losses 347 87 347 87 Total unrelieved tax losses 682 171 705 176 Other timing differences \u2013 \u2013 3 1 Total unrecognised deferred tax assets 1 682 171 708 177 1 None of the unrecognised deferred tax assets have a set expiry date in tax law. Movements in unrecognised deferred tax assets Under UK tax law, UK brought forward non-capital tax losses that arose after 1 April 2017 (\u201cPost-April 2017 UK tax losses\u201d) may be offset against current year UK taxable profits arising in any company within Group, subject to a restriction of 50% of profits each year. Consequently, as described above and in note 11, the recognition of deferred tax assets on Post-April 2017 UK tax losses is assessed by reference to the Group\u2019s Business Plan. The Group may in the future recognise additional deferred tax assets in respect of the unrecognised portion of the Post-April 2017 UK tax losses, as the Group progresses through the Business Plan period. The recognition of deferred tax assets on these losses is expected to remain a critical accounting estimate as described in these financial statements for the foreseeable future. All other non-capital UK tax losses within the Group (\u201cPre-April 2017 UK tax losses\u201d) can only be used against taxable profits arising in the same company as the loss. It is therefore less likely that a deferred tax asset will be recognised in the foreseeable future in respect of the currently unrecognised portion of these tax losses. Capital losses are in Quilter Life & Pensions Limited. There is currently insufficient evidence to forecast future chargeable gains in that company on which to justify recognition of a deferred tax asset for any of these losses. 29(b): Deferred tax liabilities The movement on deferred tax liabilities is as follows: 31 December 2022 At beginning of the year \u00a3m Income statement (credit)/ charge \u00a3m Acquisition/ disposal of subsidiaries \u00a3m At end of the year \u00a3m Other acquired intangibles 32 (8) \u2013 24 Other temporary differences \u2013 1 \u2013 1 Investment gains 120 (90) \u2013 30 Netted against deferred tax assets (13) (18) \u2013 (31) Deferred tax liabilities 139 (115) \u2013 24 31 December 2021 At beginning of the year \u00a3m Income statement (credit)/ charge \u00a3m Acquisition/ disposal of subsidiaries \u00a3m At end of the year \u00a3m Other acquired intangibles 36 (4) \u2013 32 Other temporary differences 2 \u2013 (2) \u2013 Investment gains 81 39 \u2013 120 Netted against deferred tax assets (13) \u2013 \u2013 (13) Deferred tax liabilities 106 35 (2) 139 Movements in deferred tax liabilities Deferred tax liabilities in relation to investment gains and losses have decreased by \u00a390 million (2021: \u00a339 million increase) due to market movements in the year, as disclosed in note 11. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-472": { "value": "30: Borrowings and lease liabilities The following table analyses the Group\u2019s borrowings and lease liabilities: Notes 31 December 2022 \u00a3m 31 December 2021 \u00a3m Subordinated debt: fixed rate loan at 4.478% 30(a) 200 199 Lease liabilities 30(b) 90 100 Total borrowings and lease liabilities 290 299 30(a): Borrowings Borrowed funds are repayable on demand and categorised in terms of IFRS 9 Financial Instruments as \u201cFinancial liabilities at amortised cost\u201d. The carrying value of the Group\u2019s borrowings is considered to be materially in line with the fair value. All amounts outstanding at 31 December 2022 are payable to a number of relationship banks. On 28 February 2018, the Group issued a \u00a3200 million subordinated debt security in the form of a 10-year Tier 2 bond with a one-time issuer call option after five years to J.P. Morgan Securities plc, paying a semi-annual coupon of 4.478% (the \u201cTier 2 Bond\u201d). The Tier 2 bond was remarketed and sold to the secondary market in full on 13 April 2018. At 31 December 2022, the Tier 2 bond was listed and regulated under the terms of the London Stock Exchange. At the reporting date, the Tier 2 bond was due to mature in 2028 with the option to redeem in 2023. Refer to note 40 for details of the \u00a3200,000,000 8.625% Fixed Rate Reset Subordinated Notes issued in January 2023. In addition, the Group has entered into a \u00a3125 million revolving credit facility which remains undrawn and is being held for contingent funding purposes. 30(b): Lease liabilities The Group has entered into commercial non-cancellable leases on certain property, plant and equipment where it is not in the best interest of the Group to purchase these assets. Such leases have varying terms, escalation clauses and renewal rights. 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\u2019s operations. The majority of termination options held are exercisable only by the Group and not by the respective lessor. As at 31 December 2022, future undiscounted cash outflows of \u00a3nil (2021: \u00a3nil) have been included in the lease liability which will occur beyond termination option dates on none (2021: none) of the Group\u2019s principal property leases. The lease term is reassessed if an option is exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. During the year, certain lease terms were reassessed to reflect the expectation that termination options will now be exercised. The financial effect of this reassessment was a change of \u00a3nil in recognised lease liabilities and right-of-use assets, for the year (2021: \u00a311 million decrease). These are the only significant property leases where the term is modelled up to a termination option date. Lease liabilities represent the obligation to pay lease rentals as required by IFRS 16 and are categorised as financial liabilities at amortised cost. 2022 \u00a3m 2021 \u00a3m Opening balance at 1 January 100 120 Additions 1 13 Disposals and adjustments to lease liabilities \u2013 (12) Interest charge for the year 3 4 Reclassification to provisions \u2013 (2) Payment for the interest portion of lease liabilities (3) (2) Payment for the principal portion of lease liabilities (11) (10) Disposal of interests in subsidiary \u2013 (11) Closing balance at 31 December 90 100 To be settled within 12 months 9 10 To be settled after 12 months 81 90 Total lease liabilities 90 100 Maturity analysis \u2013 undiscounted Within one year 11 13 One to five years 37 40 More than five years 60 67 Total lease liabilities \u2013 undiscounted 108 120 ", "dimensions": { "concept": "quilterplc:DisclosureOfBorrowingsAndLeaseLiabilities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-525": { "value": "30(a): Borrowings Borrowed funds are repayable on demand and categorised in terms of IFRS 9 Financial Instruments as \u201cFinancial liabilities at amortised cost\u201d. The carrying value of the Group\u2019s borrowings is considered to be materially in line with the fair value. All amounts outstanding at 31 December 2022 are payable to a number of relationship banks. On 28 February 2018, the Group issued a \u00a3200 million subordinated debt security in the form of a 10-year Tier 2 bond with a one-time issuer call option after five years to J.P. Morgan Securities plc, paying a semi-annual coupon of 4.478% (the \u201cTier 2 Bond\u201d). The Tier 2 bond was remarketed and sold to the secondary market in full on 13 April 2018. At 31 December 2022, the Tier 2 bond was listed and regulated under the terms of the London Stock Exchange. At the reporting date, the Tier 2 bond was due to mature in 2028 with the option to redeem in 2023. Refer to note 40 for details of the \u00a3200,000,000 8.625% Fixed Rate Reset Subordinated Notes issued in January 2023. In addition, the Group has entered into a \u00a3125 million revolving credit facility which remains undrawn and is being held for contingent funding purposes. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-526": { "value": "30(b): Lease liabilities The Group has entered into commercial non-cancellable leases on certain property, plant and equipment where it is not in the best interest of the Group to purchase these assets. Such leases have varying terms, escalation clauses and renewal rights. 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\u2019s operations. The majority of termination options held are exercisable only by the Group and not by the respective lessor. As at 31 December 2022, future undiscounted cash outflows of \u00a3nil (2021: \u00a3nil) have been included in the lease liability which will occur beyond termination option dates on none (2021: none) of the Group\u2019s principal property leases. The lease term is reassessed if an option is exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. During the year, certain lease terms were reassessed to reflect the expectation that termination options will now be exercised. The financial effect of this reassessment was a change of \u00a3nil in recognised lease liabilities and right-of-use assets, for the year (2021: \u00a311 million decrease). These are the only significant property leases where the term is modelled up to a termination option date. Lease liabilities represent the obligation to pay lease rentals as required by IFRS 16 and are categorised as financial liabilities at amortised cost. 2022 \u00a3m 2021 \u00a3m Opening balance at 1 January 100 120 Additions 1 13 Disposals and adjustments to lease liabilities \u2013 (12) Interest charge for the year 3 4 Reclassification to provisions \u2013 (2) Payment for the interest portion of lease liabilities (3) (2) Payment for the principal portion of lease liabilities (11) (10) Disposal of interests in subsidiary \u2013 (11) Closing balance at 31 December 90 100 To be settled within 12 months 9 10 To be settled after 12 months 81 90 Total lease liabilities 90 100 Maturity analysis \u2013 undiscounted Within one year 11 13 One to five years 37 40 More than five years 60 67 Total lease liabilities \u2013 undiscounted 108 120 ", "dimensions": { "concept": "ifrs-full:DisclosureOfAdditionalInformationAboutLeasingActivitiesForLesseeExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-473": { "value": "31: Trade, other payables and other liabilities 31 December 2022 \u00a3m 31 December 2021 \u00a3m Amounts payable to policyholders 51 46 Outstanding settlements 201 185 Accruals and deferred income 83 123 Trade creditors 32 33 Deferred consideration \u2013 5 Other liabilities 69 92 Total trade, other payables and other liabilities 436 484 To be settled within 12 months 436 484 To be settled after 12 months \u2013 \u2013 Total trade, other payables and other liabilities 436 484 ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-474": { "value": "32: Contract liabilities Contract liabilities relate to non-refundable front-end fee income, comprising fees received at inception or receivable over an initial period for services not yet provided. The income is deferred through the creation of a contract liability on the statement of financial position and released to income as the services are provided. Equal service provision is assumed over the lifetime of the contract and, as such, the contract liability is amortised on a linear basis over the expected life of the contract, adjusted for expected persistency. The contract liability principally comprises fee income already received in cash. The table below analyses the movements in contract liabilities. All contract liabilities for the year ended 2021 relate to discontinued operations. Total \u00a3m 1 January 2021 379 Fees and commission income deferred 41 Amortisation (40) Foreign exchange (4) Discontinued operations movements (3) Disposal of subsidiaries \u2013 sale of Quilter International (376) 31 December 2021 \u2013 31 December 2022 \u2013 ", "dimensions": { "concept": "quilterplc:DisclosureOfContractLiabilities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-475": { "value": "33: Post-employment benefits The Group operates a number of defined contribution and defined benefit pension schemes in the UK, the Channel Islands and Ireland. Defined contribution pension schemes The Group\u2019s defined contribution schemes require contributions to be made to funds held in trust, separate from the assets of the Group. Participants receive either a monthly pension supplement to their salaries or contributions to personal pension plans. For the defined contribution schemes, the Group pays contributions to separately administered pension schemes. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised in current service cost in the income statement as staff costs and other employee-related costs when they are due. Defined benefit schemes The Group operates two defined benefit schemes: The Quilter Cheviot Limited Retirement Benefits Scheme and the Quilter Cheviot Channel Islands Retirement Benefits Scheme which are both closed to new members. The assets of these schemes are held in separate trustee administered funds. Pension costs and contributions relating to defined benefit schemes are assessed in accordance with the advice of qualified actuaries. Actuarial advice confirms that the current level of contributions payable to each pension scheme, together with existing assets, are adequate to secure members\u2019 benefits over the remaining service lives of participating employees. The Group\u2019s policy is to fund at least the amounts sufficient to meet minimum funding requirements under applicable employee benefit and tax regulations. The schemes are reviewed at least on a triennial basis or in accordance with local practice and regulations. In the intervening years, the actuary reviews the continuing appropriateness of the assumptions applied. In 2019, the Trustees of the Quilter Cheviot Limited Retirement Benefits scheme purchased a bulk annuity from Aviva to de-risk the defined benefit pension scheme obligation. This investment strategy was intended to equally match the assets and liabilities of the scheme. This covers all remaining insured scheme benefits following previous bulk annuity transactions in 2013, 2014 and 2015. IAS 19 Employee Benefits disclosures This note gives full IAS 19 Employee Benefits disclosures for the above schemes. 33: Post-employment benefits continued 33(a): Liability for defined benefit obligations The IAS 19 value of the assets and the scheme obligations are as follows: 2022 \u00a3m 2021 \u00a3m Changes in retirement benefit obligations Total IAS 19 retirement benefit obligation at 1 January (41) (41) Interest cost on benefit obligation (1) (1) Effect of changes in actuarial assumptions 15 \u2013 Benefits paid 2 1 Total IAS 19 retirement benefit obligations at 31 December (25) (41) Change in plan assets Total IAS 19 fair value of scheme assets at 1 January 42 42 Actual return on plan assets (14) 1 Benefits paid (2) (1) Total IAS 19 fair value of scheme assets at 31 December 26 42 Net IAS 19 asset recognised in statement of financial position Funded status of plan 1 1 Unrecognised assets (1) (1) Net IAS 19 amount recognised in statement of financial position as at 31 December \u2013 \u2013 Contributions for the year to the defined benefit schemes totalled \u00a3nil (2021: \u00a3nil), and \u00a31 million was accrued at 31 December 2022 (2021: \u00a31 million). The Group expects to contribute \u00a3nil million in the next financial year (the year to 31 December 2023), based upon the current funded status and the expected return assumption for the next financial year. 2022 \u00a3m 2021 \u00a3m Changes in the asset ceiling Opening unrecognised asset due to asset ceiling at 1 January 1 1 Closing unrecognised asset due to the asset ceiling at 31 December 1 1 33(b): Income and expenses recognised in the income statement The total pension charge to staff costs for all of the Group\u2019s defined benefit schemes for 2022 was \u00a3nil (2021: \u00a3nil). Actuarial gains and losses and the effect of the limit to the pension asset under IAS 19 Employee Benefits have been reported in other comprehensive income. The cumulative amount of actuarial losses recognised in other comprehensive income is \u00a333 million (2021: \u00a333 million). Assumptions used in the defined benefit schemes The expected long-term rate of return on assets represents the Group\u2019s best estimate of the long-term return on the scheme assets and is generally estimated by computing a weighted average return of the underlying long-term expected returns on the different asset classes, based on the target asset allocations. The expected long-term return on assets is a long-term assumption that is generally expected to remain the same from one year to the next unless there is a significant change in the target asset allocation, the fees and expenses paid by the plan or market conditions. The Group, in consultation with its independent investment consultants and actuaries, determines the asset allocation targets based on its assessment of business and financial conditions, demographic and actuarial data, funding characteristics and related risk factors. Other relevant factors, including industry practices, long-term historical and prospective capital market returns, were also considered. The scheme return objectives provide long-term measures for monitoring the investment performance against growth in the pension obligations. The overall allocation is expected to help protect the plan\u2019s funded status while generating sufficiently stable real returns (net of inflation) to help cover current and future benefit payments. 33: Post-employment benefits continued 33(b): Income and expenses recognised in the income statement continued Both the equity and fixed income portions of the asset allocation use a combination of active and passive investment strategies and different investment styles. The fixed income asset allocation consists of longer duration fixed income securities in order to help reduce plan exposure to interest rate variation and to better correlate assets with obligations. The longer duration fixed income allocation is expected to help stabilise plan contributions over the long run. The weighted average duration of the defined benefit obligation is 13 years, based upon actual cash flows. The following table presents the principal actuarial assumptions at the end of the reporting year: 31 December 2022 % 31 December 2021 % Discount rate 5.0 1.8 Rate of increase in defined benefit funds 3.6 3.7 Inflation 3.1 3.3 The mortality assumptions used give the following life expectancy at 65: Life expectancy at 65 for male member currently Life expectancy at 65 for female member currently Mortality table Aged 65 Aged 40 Aged 65 Aged 40 31 December 2022 S3PA Light 23.60 25.60 25.10 27.20 31 December 2021 S3PA Light 23.60 25.50 25.10 27.10 Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, inflation rate and rate of mortality. The sensitivities regarding the principal assumptions used to measure the defined benefit obligations are described below. Reasonably possible changes at the reporting date to one of the principal actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation as follows: 31 December 2022 31 December 2021 Increase \u00a3m Decrease \u00a3m Increase \u00a3m Decrease \u00a3m Discount rate (0.1% movement) (0.3) 0.3 (0.7) 0.8 Inflation rate (0.1% movement) 0.2 (0.2) 0.3 (0.3) Rate of mortality (increase by one year) 0.7 N/A 1.6 N/A 33(c): Scheme assets allocation Scheme assets are stated at their fair values. Information on the composition of scheme assets is provided below: 31 December 2022 % 31 December 2021 % 31 December 2022 \u00a3m 31 December 2021 \u00a3m Equity securities 4 7 1 3 Debt securities 96 93 25 39 Total IAS 19 fair value of scheme assets 100 100 26 42 Equity securities have a quoted market price. Debt securities, which comprise the value of the bulk annuity policy, do not have a quoted market price. The bulk annuity policy, where assets are matched to the value of liabilities, is included at values provided by the actuary in accordance with relevant guidelines. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-527": { "value": "Defined contribution pension schemes The Group\u2019s defined contribution schemes require contributions to be made to funds held in trust, separate from the assets of the Group. Participants receive either a monthly pension supplement to their salaries or contributions to personal pension plans. For the defined contribution schemes, the Group pays contributions to separately administered pension schemes. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised in current service cost in the income statement as staff costs and other employee-related costs when they are due. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDefinedContributionPlansExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-528": { "value": "33(a): Liability for defined benefit obligations The IAS 19 value of the assets and the scheme obligations are as follows: 2022 \u00a3m 2021 \u00a3m Changes in retirement benefit obligations Total IAS 19 retirement benefit obligation at 1 January (41) (41) Interest cost on benefit obligation (1) (1) Effect of changes in actuarial assumptions 15 \u2013 Benefits paid 2 1 Total IAS 19 retirement benefit obligations at 31 December (25) (41) Change in plan assets Total IAS 19 fair value of scheme assets at 1 January 42 42 Actual return on plan assets (14) 1 Benefits paid (2) (1) Total IAS 19 fair value of scheme assets at 31 December 26 42 Net IAS 19 asset recognised in statement of financial position Funded status of plan 1 1 Unrecognised assets (1) (1) Net IAS 19 amount recognised in statement of financial position as at 31 December \u2013 \u2013 Contributions for the year to the defined benefit schemes totalled \u00a3nil (2021: \u00a3nil), and \u00a31 million was accrued at 31 December 2022 (2021: \u00a31 million). The Group expects to contribute \u00a3nil million in the next financial year (the year to 31 December 2023), based upon the current funded status and the expected return assumption for the next financial year. 2022 \u00a3m 2021 \u00a3m Changes in the asset ceiling Opening unrecognised asset due to asset ceiling at 1 January 1 1 Closing unrecognised asset due to the asset ceiling at 31 December 1 1 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDefinedBenefitPlansExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-529": { "value": "33(b): Income and expenses recognised in the income statement The total pension charge to staff costs for all of the Group\u2019s defined benefit schemes for 2022 was \u00a3nil (2021: \u00a3nil). Actuarial gains and losses and the effect of the limit to the pension asset under IAS 19 Employee Benefits have been reported in other comprehensive income. The cumulative amount of actuarial losses recognised in other comprehensive income is \u00a333 million (2021: \u00a333 million). Assumptions used in the defined benefit schemes The expected long-term rate of return on assets represents the Group\u2019s best estimate of the long-term return on the scheme assets and is generally estimated by computing a weighted average return of the underlying long-term expected returns on the different asset classes, based on the target asset allocations. The expected long-term return on assets is a long-term assumption that is generally expected to remain the same from one year to the next unless there is a significant change in the target asset allocation, the fees and expenses paid by the plan or market conditions. The Group, in consultation with its independent investment consultants and actuaries, determines the asset allocation targets based on its assessment of business and financial conditions, demographic and actuarial data, funding characteristics and related risk factors. Other relevant factors, including industry practices, long-term historical and prospective capital market returns, were also considered. The scheme return objectives provide long-term measures for monitoring the investment performance against growth in the pension obligations. The overall allocation is expected to help protect the plan\u2019s funded status while generating sufficiently stable real returns (net of inflation) to help cover current and future benefit payments. 33(b): Income and expenses recognised in the income statement continued Both the equity and fixed income portions of the asset allocation use a combination of active and passive investment strategies and different investment styles. The fixed income asset allocation consists of longer duration fixed income securities in order to help reduce plan exposure to interest rate variation and to better correlate assets with obligations. The longer duration fixed income allocation is expected to help stabilise plan contributions over the long run. The weighted average duration of the defined benefit obligation is 13 years, based upon actual cash flows. The following table presents the principal actuarial assumptions at the end of the reporting year: 31 December 2022 % 31 December 2021 % Discount rate 5.0 1.8 Rate of increase in defined benefit funds 3.6 3.7 Inflation 3.1 3.3 The mortality assumptions used give the following life expectancy at 65: Life expectancy at 65 for male member currently Life expectancy at 65 for female member currently Mortality table Aged 65 Aged 40 Aged 65 Aged 40 31 December 2022 S3PA Light 23.60 25.60 25.10 27.20 31 December 2021 S3PA Light 23.60 25.50 25.10 27.10 Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, inflation rate and rate of mortality. The sensitivities regarding the principal assumptions used to measure the defined benefit obligations are described below. Reasonably possible changes at the reporting date to one of the principal actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation as follows: 31 December 2022 31 December 2021 Increase \u00a3m Decrease \u00a3m Increase \u00a3m Decrease \u00a3m Discount rate (0.1% movement) (0.3) 0.3 (0.7) 0.8 Inflation rate (0.1% movement) 0.2 (0.2) 0.3 (0.3) Rate of mortality (increase by one year) 0.7 N/A 1.6 N/A ", "dimensions": { "concept": "quilterplc:DisclosureOfIncomeExpenseRecognisedInTheIncomeStatement", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-530": { "value": "33(c): Scheme assets allocation Scheme assets are stated at their fair values. Information on the composition of scheme assets is provided below: 31 December 2022 % 31 December 2021 % 31 December 2022 \u00a3m 31 December 2021 \u00a3m Equity securities 4 7 1 3 Debt securities 96 93 25 39 Total IAS 19 fair value of scheme assets 100 100 26 42 Equity securities have a quoted market price. Debt securities, which comprise the value of the bulk annuity policy, do not have a quoted market price. The bulk annuity policy, where assets are matched to the value of liabilities, is included at values provided by the actuary in accordance with relevant guidelines. ", "dimensions": { "concept": "quilterplc:DisclosureOfSchemeAssetsAllocation", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-545": { "value": "34: Master netting and similar agreements The Group offsets financial assets and liabilities in the statement of financial position when it has a legally enforceable right to do so and intends to settle on a net basis simultaneously. Currently, the only such offsetting within the Group relates to bank accounts, where in some circumstances a bank account that is overdrawn is offset against a bank account that is not. The following tables present information on the potential effect of offsetting arrangements after taking into consideration these types of agreements. 31 December 2022 Gross amounts \u00a3m Amounts off set in the statement of financial position \u00a3m Net amounts reported in the statement of financial position \u00a3m Financial assets Cash and cash equivalents 1,84 4 (62) 1,782 Financial liabilities Trade, other payables and other liabilities \u2013 amounts owed to banks 62 (62) \u2013 31 December 2021 Gross amounts \u00a3m Amounts offset in the statement of financial position \u00a3m Net amounts reported in the statement of financial position \u00a3m Financial assets Cash and cash equivalents 2,146 (82) 2,064 Financial liabilities Trade, other payables and other liabilities \u2013 amounts owed to banks 82 (82) \u2013 ", "dimensions": { "concept": "ifrs-full:DisclosureOfReconciliationOfFinancialLiabilitiesSubjectToOffsettingEnforceableMasterNettingArrangementsOrSimilarAgreementsToIndividualLineItemsInStatementOfFinancialPositionExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-476": { "value": "34: Master netting and similar agreements The Group offsets financial assets and liabilities in the statement of financial position when it has a legally enforceable right to do so and intends to settle on a net basis simultaneously. Currently, the only such offsetting within the Group relates to bank accounts, where in some circumstances a bank account that is overdrawn is offset against a bank account that is not. The following tables present information on the potential effect of offsetting arrangements after taking into consideration these types of agreements. 31 December 2022 Gross amounts \u00a3m Amounts off set in the statement of financial position \u00a3m Net amounts reported in the statement of financial position \u00a3m Financial assets Cash and cash equivalents 1,84 4 (62) 1,782 Financial liabilities Trade, other payables and other liabilities \u2013 amounts owed to banks 62 (62) \u2013 31 December 2021 Gross amounts \u00a3m Amounts offset in the statement of financial position \u00a3m Net amounts reported in the statement of financial position \u00a3m Financial assets Cash and cash equivalents 2,146 (82) 2,064 Financial liabilities Trade, other payables and other liabilities \u2013 amounts owed to banks 82 (82) \u2013", "dimensions": { "concept": "quilterplc:DisclosureOfMasterNettingAndSimilarAgreements", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-477": { "value": "35: Contingent liabilities The Group, in the ordinary course of business, enters into transactions that expose it to tax, legal, regulatory and business risks. The Group recognises a provision when it has a present obligation as a result of past events, it is probable that a transfer of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made (see note 28). Possible obligations and known liabilities where no reliable estimate can be made or it is considered improbable that an outflow would result are reported as contingent liabilities in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The Group routinely monitors and assesses contingent liabilities arising from matters such as business reviews, litigation, warranties and indemnities relating to past acquisitions and disposals. Contingent liabilities \u2013 pension transfer advice redress The skilled person review covered British Steel Pension Scheme DB to DC pension transfer advice activity undertaken by Lighthouse advisers, and a representative sample of other Lighthouse DB to DC pension transfer advice activity in the relevant period. The skilled person review is largely complete, and the skilled person has recommended a potential review of a further sample of Lighthouse DB to DC pension transfer cases not relating to the British Steel Pension Scheme, and this further sample will be reviewed under a Group-managed past business review process with the skilled person acting as reviewer, as agreed with the FCA. Details of provisions for redress payable and payments made are included within Provisions as set out in note 28. Until the review has finalised, uncertainty exists as to the number of cases where this will be required and the value of total redress which will be payable. Subject to FCA confirmation, we anticipate that the skilled person review will conclude during 2023. Customers have the legal right to challenge the result of the skilled person review in respect of their case via a complaint to the Financial Ombudsman Service. Certain customers have made such complaints. The skilled person is independent from the Group and has run a robust process, which has been overseen by the FCA. The Group does not consider any of the complaints to have merit and so the provision does not include any amounts in relation to such complaints. In particular, there is no provision for obligations that may arise in the event that any complaints to the Financial Ombudsman Service over the outcome of the skilled person review in respect of particular customers are upheld. During 2020, the Group was also informed by the FCA that it is conducting an enforcement investigation into Lighthouse in respect of whether Lighthouse has breached certain FCA requirements in connection with advising on and arranging DB to DC pension transfers in the period from 1 April 2015 to 30 April 2019. This investigation is now at an advanced stage and the Group\u2019s current view is that it is likely to conclude before the end of the first half of the Group\u2019s current financial year on 30 June 2023. However, as the outcome of the enforcement investigation remains unknown, the provision does not include any potential regulatory fines or penalties that could be imposed on Lighthouse in connection with DB to DC pension transfers prior to the Group\u2019s acquisition of Lighthouse. It is possible that further material costs of redress, regulatory fines or penalties may be incurred in relation to the skilled person review, additional past business review and the BSPS Redress Scheme. Further customer redress costs may also be incurred for other potential unsuitable pension transfer advice provided across the Group. Any further redress costs, and any differences between the provision and final payment to be made for any unsuitable DB to DC pension transfer cases, will be recognised as an expense or credit in the income statement. 35: Contingent liabilities continued Tax The tax authorities in the countries in which the Group operates routinely review historical transactions undertaken and tax law interpretations made by the Group. The Group is committed to conducting its tax affairs in accordance with the tax legislation of the countries in which it operates. All interpretations made by the Group are made with reference to the specific facts and circumstances of the transaction and the relevant legislation. There are occasions where the Group\u2019s interpretation of tax law may be challenged by the tax authorities. The financial statements include provisions that reflect the Group\u2019s assessment of liabilities which might reasonably be expected to materialise as part of their review. The Group is satisfied that adequate provisions have been made to cater for the resolution of tax uncertainties and that the resources available to fund such potential settlements are sufficient. Due to the level of estimation required in determining tax provisions, amounts eventually payable may differ from the provision recognised. Complaints, disputes and regulations The Group is committed to treating customers fairly and supporting its customers in meeting their lifetime goals. During the normal course of business, from time to time, the Group receives complaints and claims from customers including, but not limited to, complaints to the Financial Ombudsman Service and legal proceedings related thereto, enters into commercial disputes with service providers, and is subject to discussions and reviews with regulators. The costs, including legal costs, of these issues as they arise can be significant and, where appropriate, provisions have been established in accordance with IAS 37.", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-478": { "value": "36: Commitments The Group has contractual commitments in respect of funding arrangements which will be payable in future periods. These commitments are not recognised in the Group\u2019s statement of financial position. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-479": { "value": "37: Capital and financial risk management 37(a): Capital management The Group manages its capital with a focus on capital efficiency and effective risk management. The capital management objectives are to maintain the Group\u2019s ability to continue as a going concern while supporting the optimisation of return relative to the risks. The Group ensures that it can meet its expected capital and financing needs at all times having regard to the Group\u2019s Business Plans, forecasts, strategic initiatives and the regulatory requirements applicable to Group entities. The Group\u2019s overall capital risk appetite is set with reference to the requirements of the relevant stakeholders and seeks to: \u00b7 maintain sufficient, but not excessive, financial strength to support stakeholder requirements; \u00b7 optimise debt to equity structure to enhance shareholder returns; and \u00b7 retain financial flexibility by maintaining liquidity including unutilised committed credit lines. The primary sources of capital used by the Group are equity shareholders\u2019 funds of \u00a31,548 million (31 December 2021: \u00a31,739 million) and subordinated debt which was issued at \u00a3200 million in February 2018. Alternative resources are utilised where appropriate. Risk appetite has been defined for the level of capital, liquidity and debt within the Group. The risk appetite includes long-term targets, early warning thresholds and risk appetite limits. The dividend policy sets out the target dividend level in relation to profits. The regulatory capital for the Group is assessed under Solvency II requirements. 37(a)(i): Regulatory capital (unaudited) The Group is subject to Solvency II group supervision by the Prudential Regulation Authority. The Group is required to measure and monitor its capital resources under the Solvency II regulatory regime. The Group\u2019s UK life insurance undertaking is included in the Group solvency calculation on a Solvency II basis. Other regulated entities are included in the Group solvency calculation according to the relevant sectoral rules. The Group\u2019s Solvency II surplus is the amount by which the Group\u2019s capital on a Solvency II basis (own funds) exceeds the Solvency II capital requirement (solvency capital requirement or \u201cSCR\u201d). The Group\u2019s Solvency II surplus is \u00a3820 million at 31 December 2022 (31 December 2021: \u00a31,030 million), representing a Solvency II ratio of 230% (31 December 2021: 275%) calculated under the standard formula. The Solvency II regulatory position for the year ended 31 December 2022 allows for the impact of the recommended final dividend payment of \u00a345 million (31 December 2021: \u00a362 million). 37: Capital and financial risk management continued 37(a): Capital management continued The Solvency II results for the year ended 31 December 2022 (unaudited estimate) and 31 December 2021 were as follows: 31 December 2022 1 \u00a3m 31 December 2021 2 \u00a3m Own funds 1,451 1,617 Solvency capital requirement 631 587 Solvency II surplus 820 1,030 Solvency II coverage ratio 230% 275% 1Filing of annual regulatory reporting forms due by 19 May 2023. 2As reported in the Group Solvency and Financial Condition Report for the year ended 31 December 2021. The Group\u2019s own funds include the Quilter plc issued subordinated debt security which qualifies as capital under Solvency II. The composition of own funds by tier is presented in the table below. Group own funds 31 December 2022 \u00a3m 31 December 2021 \u00a3m Tier 11 1,249 1,412 Tier 2 2 202 205 Total Group Solvency II own funds 1,451 1,617 1All Tier 1 capital is unrestricted for tiering purposes. 2Comprises a Solvency II compliant subordinated debt security in the form of a Tier 2 bond, which was issued at \u00a3200 million in February 2018. The Group\u2019s UK life insurance undertaking is also subject to Solvency II at entity level. Other regulated entities in the Group are subject to the locally applicable entity-level capital requirements in the countries in which they operate. In addition, the Group\u2019s asset management and advice businesses are subject to group supervision by the FCA under the UK Investment Firms Prudential Regime (\u201cIFPR\u201d). The capital requirements for the Group and its regulated subsidiaries are reported and monitored through regular Capital Management Forum meetings. Throughout 2022, the Group has complied with the regulatory requirements that apply at a consolidated level and Quilter\u2019s insurance undertakings and investment firms have complied with the regulatory capital requirements that apply at entity level. 37(a)(ii): Loan covenants Under the terms of the revolving credit facility agreement, the Group is required to comply with the following financial covenant: the ratio of total net borrowings to consolidated equity shareholders\u2019 funds shall not exceed 0.5. Note 31 December 2022 \u00a3m 31 December 2021 \u00a3m Total external borrowings of the Company 30 200 199 Less: cash and cash equivalents of the Company (126) (503) Total net external borrowings of the Company 74 (304) Total shareholders\u2019 equity of the Group 1,548 1,739 Tier 2 bond 30 200 199 Total Group equity (including Tier 2 bond) 1,748 1,938 Ratio of Company net external borrowings to Group equity 0.042 - 0.157 The Group has complied with the covenant since the facility was created in 2018. 37: Capital and financial risk management continued 37(a): Capital management continued 37(a)(iii): Own Risk and Solvency Assessment (\u201cORSA\u201d) and Internal Capital Adequacy and Risk Assessment (\u201cICARA\u201d) The Group ORSA process is an ongoing cycle of risk and capital management processes which provides an overall assessment of the current and future risk profile of the Group and demonstrates the relationship between business strategy, risk appetite, risk profile and solvency needs. These assessments support strategic planning and risk-based decision making. The underlying ORSA processes cover the Group and consider how risks and solvency needs may evolve over the planning period. The ORSA includes stress and scenario tests, which are performed to assess the financial and operational resilience of the Group. The Group ORSA report is produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the Group. The ORSA report is submitted to the PRA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in the risk profile of the Group outside the usual reporting cycle. In addition to the Group ORSA process, an entity-level ORSA process is performed for Quilter Life & Pensions Limited. The ICARA process is similar to the ORSA process and is performed at entity level for certain UK investment firms within the Group. A Group ICARA report is also produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the IFPR prudential consolidation Group. The ICARA reports are submitted to the FCA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in risk profile outside the usual reporting cycle. The conclusions of the ORSA and ICARA processes are reviewed by management and the Board throughout the year. 37(b): Credit risk Overall exposure to credit risk Credit risk is the risk of adverse movements in credit spreads (relative to the reference yield curve), credit ratings or default rates leading to a deterioration in the level or volatility of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. This includes counterparty default risk, counterparty concentration risk and spread risk. The Group has established a Credit Risk Framework that includes a Credit Risk Policy and Credit Risk Appetite Statement. This framework applies to all activities where the shareholder is exposed to credit risk, either directly or indirectly, ensuring appropriate identification, measurement, management, monitoring and reporting of the Group\u2019s credit risk exposures. The credit risk arising from all exposures is mitigated by ensuring that the Group only enters into relationships with appropriately robust counterparties, adhering to the Group Credit Risk Policy. For each asset, consideration is given as to: \u00b7 the credit rating of the counterparty, which is used to derive the probability of default; \u00b7 the loss given default; \u00b7 the potential recovery which may be made in the event of default; \u00b7 the extent of any collateral that the Group has in respect of the exposures; and \u00b7 any second order risks that may arise where the Group has collateral against the credit risk exposure. The credit risk exposures of the Group are monitored regularly to ensure that counterparties remain creditworthy, that there is appropriate diversification of counterparties and that exposures are within approved limits. At 31 December 2022, the Group\u2019s material credit exposures were to financial institutions (primarily through the investment of shareholder funds), corporate entities (including external fund managers) and individuals (primarily through fund management trade settlement activities). There is no direct exposure to non-UK sovereign debt within the shareholder investments. The Group has no significant concentrations of credit risk exposure. Other credit risks The Group is exposed to financial adviser counterparty risk through a number of loans that it makes to its advisers and the payment of upfront commission on the sale of certain types of business. The risk of default by financial advisers is managed through monthly monitoring of loan and commission debt balances. The Group is also exposed to the risk of default by fund management groups in respect of settlements and rebates of fund management charges on collective investments held for the benefit of policyholders. This risk is managed through the due diligence process which is completed before entering into any relationship with a fund group. Amounts due to and from fund groups are monitored for prompt settlement and appropriate action is taken where settlement is not timely. Legal contracts are maintained where the Group enters into credit transactions with a counterparty. 37: Capital and financial risk management continued 37(b): Credit risk continued Impact of credit risk on fair value Due to the limited exposure that the Group has to credit risk, credit risk does not have a material impact on the fair value movement of financial instruments for the year under review. The fair value movements on these instruments are mainly due to changes in market conditions. Maximum exposure to credit risk The Group\u2019s maximum exposure to credit risk does not differ from the carrying value disclosed in the relevant notes to the consolidated financial statements. Loans and advances subject to 12-month expected credit losses are \u00a334 million (31 December 2021: \u00a329 million) and other receivables subject to lifetime expected credit losses are \u00a3204 million (31 December 2021: \u00a3252 million). Those balances represent the pool of counterparties that do not require a rating. These counterparties individually generate no material credit exposure and this pool is highly diversified, monitored and subject to limits. Exposure arising from financial instruments not recognised on the statement of financial position is measured as the maximum amount that the Group would have to pay, which may be significantly greater than the amount that would be recognised as a liability. The Group does not have any significant exposure arising from items not recognised on the statement of financial position. The table below represents the Group\u2019s exposure to credit risk from cash and cash equivalents. Credit rating relating to cash and cash equivalents that are neither past due nor impaired \u00a3m 31 December 2022 AAA AA A B <BBB Not rated1 Carrying value Cash at amortised cost, subject to 12-month ECL \u2013 13 388 5 \u2013 264 670 Money market funds at FVTPL 1,112 \u2013 \u2013 \u2013 \u2013 \u2013 1,112 Total cash and cash equivalents 1,112 13 388 5 \u2013 264 1,782 Credit rating relating to cash and cash equivalents that are neither past due nor impaired \u00a3m 31 December 2021 AAA AA A B <BBB Not rated1 Carrying value Cash at amortised cost, subject to 12-month ECL \u2013 105 451 \u2013 3 289 848 Money market funds at FVTPL 1,216 \u2013 \u2013 \u2013 \u2013 \u2013 1,216 Total cash and cash equivalents 1,216 105 451 \u2013 3 289 2,064 1Cash included in the consolidation of funds is not rated (see note 24(a)). Impairment allowance Assets that are measured and classified at amortised cost are monitored for any expected credit losses (\u201cECL\u201d) on either a 12-month or lifetime ECL model. The majority of such assets within the Group are measured on the lifetime ECL model, with the exception of some specific loans that are on the 12-month ECL model. Impairment allowance \u00a3m Balance at 1 January 2021 (0.8) Change due to change in counterparty balance (0.4) 31 December 2021 (1.2) Change due to change in counterparty balance 0.1 31 December 2022 (1.1) 37: Capital and financial risk management continued 37(c): Market risk Market risk is the risk of an adverse change in the level or volatility of market prices of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. Market risk arises from changes in equity, bond and property prices, interest rates and foreign exchange rates. Market risk arises differently across the Group\u2019s businesses depending on the types of financial assets and liabilities held. The Group recognises that climate change can contribute to market risk. The Group has a market risk policy which sets out the risk management framework, permitted and prohibited market risk exposures, maximum limits on market risk exposures, management information and stress testing requirements which are used to monitor and manage market risk. The policy is cascaded to the businesses across the Group, and Group-level governance and monitoring processes provide oversight of the management of market risk by the individual businesses. The Group does not undertake any principal trading for its own account. The Group\u2019s revenue is however affected by the value of assets under management and consequently it has exposure to equity market levels and economic conditions. Scenario testing is undertaken to test the resilience of the business to severe but plausible events, including assessment of the potential implications of climate-related risks and opportunities, and to assist in the identification of management actions. 37(c)(i): Equity and property price risk In accordance with the market risk policy, the Group does not generally invest shareholder assets in equity or property, or related collective investments, except where the exposure arises due to: \u00b7 mismatches between unitised fund assets and liabilities. These mismatches are permitted, subject to maximum limits, to avoid excessive dealing costs; and \u00b7 seed capital investments. Seed capital is invested within new unitised or other funds within the Group at the time when these funds are launched. The seed capital is then withdrawn from the funds as policyholders and customers invest in the funds. The above exposures are not material to the Group. The Group derives fees (e.g. annual management charges) and incurs costs (e.g. outsourced service provider and adviser fund-based renewal commissions) which are linked to the performance of the underlying assets. Therefore, future earnings will be affected by equity and property market performance. Equity and property price sensitivity testing A movement in equity and property prices would impact the fee income that is based on the market value of the investments held by or on behalf of customers. The sensitivity is applied as an instantaneous shock to equity and property prices at the start of the year. The sensitivity analysis is not limited to the unit-linked business and therefore reflects the sensitivity of the Group as a whole. Impac t on profit after tax and shareholders \u2019 equit y 31 December 2022 \u00a3m 31 December 2021 \u00a3m Impact of 10% increase in equity and property prices 30 34 Impact of 10% decrease in equity and property prices (30) (34) 37(c)(ii): Interest rate risk Interest rate risk arises primarily from bank balances held with financial institutions. A small amount of the Group\u2019s assets is held in fixed interest UK Government bonds, which are exposed to fluctuations in interest rates. Fixed interest UK Government bonds are mainly held to match liabilities by duration and so the exposure to interest rate risk is not material. A rise in interest rates would also cause an immediate fall in the value of investments in fixed income securities within clients\u2019 investment funds, resulting in a fall in fund-based revenues. Conversely, a reduction in interest rates would cause a rise in the value of investments in fixed income securities within clients\u2019 investment funds. It would also reduce the interest rate earned on bank balances and could potentially result in the Group incurring interest charges on these balances, if interest rates become negative. Exposure of the income statement and statement of financial position to interest rates are summarised below. 37: Capital and financial risk management continued 37(c): Market risk continued Interest rate sensitivity testing The impact of an increase and decrease in market interest rates of 1% is tested (e.g. if the current interest rate is 5%, the test allows for the effects of an instantaneous change to 4% and 6% from the start of the year). The test allows consistently for similar changes in investment returns and movements in the market value of any fixed interest assets backing the liabilities. The sensitivity of profit to changes in interest rates is provided. Impac t on profit after tax and shareholders \u2019 equit y Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Impact of 1% increase in interest rates 7 11 Impact of 1% decrease in interest rates (7) \u2013 37(c)(iii): Currency translation risk Currency translation risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group\u2019s functional currency is pounds sterling, which accounts for the majority of the Group\u2019s transactions. The Group has minor exposure to Euros, through the Group\u2019s Irish subsidiary and to the South African Rand, due to the listing on the Johannesburg Stock Exchange and the payment of a proportion of shareholder dividends in Rand. During 2022, the Group had limited exposure to foreign exchange risk in respect of other currencies due its non-UK operations and foreign currency transactions. 37(d): Liquidity risk Liquidity risk is the risk that there are insufficient assets or that assets cannot be realised in order to settle financial obligations as they fall due or that market conditions preclude the ability of the Group to trade in illiquid assets in order to maintain its asset and liability matching (\u201cALM\u201d) profile. The Group manages liquidity on a daily basis through: \u00b7 maintaining adequate high-quality liquid assets and banking facilities, the level of which is informed through appropriate liquidity stress testing; \u00b7 continuously monitoring forecast and actual cash flows; and \u00b7 monitoring a number of key risk indicators to help in the identification of a liquidity stress. Individual businesses maintain and manage their local liquidity requirements according to their business needs within the overall Group Liquidity Risk Framework that includes a Group Liquidity Risk Policy and Group Liquidity Risk Appetite Statement. The Group framework is applied consistently across all businesses in the Group to identify, manage, measure, monitor and report on all liquidity risks that have a material impact on liquidity levels. This framework considers both short-term liquidity and cash management considerations and longer-term funding risk considerations. Liquidity is monitored centrally by Group Treasury, with management actions taken at a business level to ensure each business has sufficient liquidity to cover its minimum liquidity requirement, with an appropriate buffer set in line with the Group Risk Appetite Statement. Throughout the ongoing Ukraine crisis and market volatility during 2022, Quilter plc and its subsidiaries have operated above their individual liquidity targets and there were no material liquidity stresses identified over this period. Daily liquidity monitoring continues across the Group to enable timely identification of any emerging issues. The Group maintains contingency funding arrangements to provide liquidity support to businesses in the event of liquidity stresses that are greater than their risk appetite. Contingency Funding Plans are in place for each individual business in order to set out the approach and management actions that would be taken should liquidity levels fall below minimum liquidity requirements. The plans undergo an annual review and testing cycle to ensure they are fit for purpose and can be relied upon during a liquidity stress. Information on the nature of the investments and securities held is given in note 17. The Group has a \u00a3125 million five-year Revolving Credit Facility with a five-bank club that provides a form of contingency liquidity for the Group. No drawdown on this facility has been made since inception. The Group has exercised the option to extend the facility for a further two-year period, to February 2025, and has continued to meet all the covenants attached to its financing arrangements. The financing arrangements are considered sufficient to maintain the target liquidity levels of the Group and offer coverage for appropriate stress scenarios identified within the liquidity stress testing undertaken across the Group. Further details, together with information on the Group\u2019s borrowed funds, are given in note 30. The Group does not have material liquidity exposure to special purpose entities or investment funds. 37: Capital and financial risk management continued 37(e): Insurance risk 37(e)(i): Overview The definition of insurance risk set out in the policy covers risks arising under Quilter\u2019s unit-linked investment contracts which do not meet the IFRS definition of insurance contracts. The Group\u2019s Enterprise Risk Management Framework defines insurance risk as the risk of a reduction in Solvency II own funds from adverse experience or change in assumptions relating to claims, policyholder behaviour, mortality, longevity or expenses, resulting in an adverse impact to earnings or reduced solvency. The Group has implemented an insurance risk policy which sets out the Group\u2019s requirements for the management, measurement, monitoring and reporting of insurance risks. The Group has implemented the Technical Provisions Standard to support the insurance risk policy. The sensitivity of the Group\u2019s earnings and capital position to insurance risks is monitored through the Group\u2019s capital management processes. The Group manages its insurance risks through the following mechanisms: \u00b7 Management of expense levels relative to approved budgets. \u00b7 Analysis and monitoring of experience relative to the assumptions used to determine technical provisions. Persistency Persistency risk is the risk that the level of surrenders or withdrawals on products offered by Quilter Life & Pensions Limited occur at levels that are different to the levels assumed in the determination of technical provisions. Persistency statistics are monitored monthly and a detailed persistency analysis at a product group level is carried out on an annual basis. Management actions may be triggered if persistency statistics indicate significant adverse movement or emerging trends in experience. Expenses Expense risk is the risk that actual expenses and expense inflation differ from the levels assumed in the determination of technical provisions. Expense levels are monitored on a quarterly basis against budgets and forecasts. Expense drivers are used to allocate expenses to entities and products. Some product structures include maintenance charges. These charges are reviewed annually in light of changes in maintenance expense levels and the market rate of inflation. This review may result in changes in charge levels. Mortality Mortality risk is not material as the Group does not provide material mortality insurance on its products and mortality benefits are reinsured. 37(e)(ii): Sensitivity analysis Sensitivity analysis has been performed by applying the following parameters to the statement of financial position and income statement for 2021 and 2022. Interest rate and equity and property price sensitivities are included within the Group market sensitivities above. Expenses The increase in expenses is assumed to apply to the costs associated with the maintenance and acquisition of contracts within the unit-linked business. It is assumed that these expenses are increased by 10% from the start of the year, so is applied as an expense shock rather than a gradual increase. The only administrative expenses that are deferrable are sales bonuses but as new business volumes are unchanged in this sensitivity, sales bonuses and the associated deferrals have not been increased. Administrative expenses have been allocated equally between life and pensions. An increase in expenses of 10% would have decreased profit by \u00a36 million after tax (2021: \u00a36 million). 37(f): Operational risk Operational risk is the risk of loss arising from inadequate or failed internal processes, or from personnel and systems, or from external events, resulting in an adverse impact to earnings or reduced solvency. Operational risk includes all risks resulting from operational activities, excluding the risks already described above and excluding strategic risks and risks resulting from being part of a wider group of companies. Operational risk includes the effects of failure of administration processes, IT and Information Security maintenance and development processes, investment processes (including settlements with fund managers, fund pricing and matching and dealing), people and HR processes, product development and management processes, legal risks (e.g. risk of inadequate legal contracts with third parties), change delivery risks (including poorly managed responses to regulatory change), physical and certain transitional financial risks arising from climate change, risks relating to the relationship with third-party suppliers and outsourcers, and the consequences of financial crime and business interruption events. In accordance with Group policies, management has primary responsibility for the identification, measurement, assessment, management and monitoring of risks, and the escalation and reporting on issues to Executive Management. The Group\u2019s Executive Management has responsibility for implementing the Group Operational Risk Framework and for the development and implementation of action plans designed to manage risk levels within acceptable tolerances and to resolve issues identified.
37: Capital and financial risk management continued
37(g): Contractual maturity analysis
Investment contract policyholders have the option to terminate or transfer their contracts at any time and to receive the surrender or transfer value
of their policies, and these liabilities are therefore classified as having a maturity of less than three months. Although these liabilities are payable on
demand, the Group does not expect that all liabilities will be settled within a short time period.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-531": { "value": "37(a): Capital management The Group manages its capital with a focus on capital efficiency and effective risk management. The capital management objectives are to maintain the Group\u2019s ability to continue as a going concern while supporting the optimisation of return relative to the risks. The Group ensures that it can meet its expected capital and financing needs at all times having regard to the Group\u2019s Business Plans, forecasts, strategic initiatives and the regulatory requirements applicable to Group entities. The Group\u2019s overall capital risk appetite is set with reference to the requirements of the relevant stakeholders and seeks to: \u00b7 maintain sufficient, but not excessive, financial strength to support stakeholder requirements; \u00b7 optimise debt to equity structure to enhance shareholder returns; and \u00b7 retain financial flexibility by maintaining liquidity including unutilised committed credit lines. The primary sources of capital used by the Group are equity shareholders\u2019 funds of \u00a31,548 million (31 December 2021: \u00a31,739 million) and subordinated debt which was issued at \u00a3200 million in February 2018. Alternative resources are utilised where appropriate. Risk appetite has been defined for the level of capital, liquidity and debt within the Group. The risk appetite includes long-term targets, early warning thresholds and risk appetite limits. The dividend policy sets out the target dividend level in relation to profits. The regulatory capital for the Group is assessed under Solvency II requirements. 37(a)(i): Regulatory capital (unaudited) The Group is subject to Solvency II group supervision by the Prudential Regulation Authority. The Group is required to measure and monitor its capital resources under the Solvency II regulatory regime. The Group\u2019s UK life insurance undertaking is included in the Group solvency calculation on a Solvency II basis. Other regulated entities are included in the Group solvency calculation according to the relevant sectoral rules. The Group\u2019s Solvency II surplus is the amount by which the Group\u2019s capital on a Solvency II basis (own funds) exceeds the Solvency II capital requirement (solvency capital requirement or \u201cSCR\u201d). The Group\u2019s Solvency II surplus is \u00a3820 million at 31 December 2022 (31 December 2021: \u00a31,030 million), representing a Solvency II ratio of 230% (31 December 2021: 275%) calculated under the standard formula. The Solvency II regulatory position for the year ended 31 December 2022 allows for the impact of the recommended final dividend payment of \u00a345 million (31 December 2021: \u00a362 million). 37(a): Capital management continued The Solvency II results for the year ended 31 December 2022 (unaudited estimate) and 31 December 2021 were as follows: 31 December 2022 1 \u00a3m 31 December 2021 2 \u00a3m Own funds 1,451 1,617 Solvency capital requirement 631 587 Solvency II surplus 820 1,030 Solvency II coverage ratio 230% 275% 1Filing of annual regulatory reporting forms due by 19 May 2023. 2As reported in the Group Solvency and Financial Condition Report for the year ended 31 December 2021. The Group\u2019s own funds include the Quilter plc issued subordinated debt security which qualifies as capital under Solvency II. The composition of own funds by tier is presented in the table below. Group own funds 31 December 2022 \u00a3m 31 December 2021 \u00a3m Tier 11 1,249 1,412 Tier 2 2 202 205 Total Group Solvency II own funds 1,451 1,617 1All Tier 1 capital is unrestricted for tiering purposes. 2Comprises a Solvency II compliant subordinated debt security in the form of a Tier 2 bond, which was issued at \u00a3200 million in February 2018. The Group\u2019s UK life insurance undertaking is also subject to Solvency II at entity level. Other regulated entities in the Group are subject to the locally applicable entity-level capital requirements in the countries in which they operate. In addition, the Group\u2019s asset management and advice businesses are subject to group supervision by the FCA under the UK Investment Firms Prudential Regime (\u201cIFPR\u201d). The capital requirements for the Group and its regulated subsidiaries are reported and monitored through regular Capital Management Forum meetings. Throughout 2022, the Group has complied with the regulatory requirements that apply at a consolidated level and Quilter\u2019s insurance undertakings and investment firms have complied with the regulatory capital requirements that apply at entity level. 37(a)(ii): Loan covenants Under the terms of the revolving credit facility agreement, the Group is required to comply with the following financial covenant: the ratio of total net borrowings to consolidated equity shareholders\u2019 funds shall not exceed 0.5. Note 31 December 2022 \u00a3m 31 December 2021 \u00a3m Total external borrowings of the Company 30 200 199 Less: cash and cash equivalents of the Company (126) (503) Total net external borrowings of the Company 74 (304) Total shareholders\u2019 equity of the Group 1,548 1,739 Tier 2 bond 30 200 199 Total Group equity (including Tier 2 bond) 1,748 1,938 Ratio of Company net external borrowings to Group equity 0.042 - 0.157 The Group has complied with the covenant since the facility was created in 2018. 37(a): Capital management continued 37(a)(iii): Own Risk and Solvency Assessment (\u201cORSA\u201d) and Internal Capital Adequacy and Risk Assessment (\u201cICARA\u201d) The Group ORSA process is an ongoing cycle of risk and capital management processes which provides an overall assessment of the current and future risk profile of the Group and demonstrates the relationship between business strategy, risk appetite, risk profile and solvency needs. These assessments support strategic planning and risk-based decision making. The underlying ORSA processes cover the Group and consider how risks and solvency needs may evolve over the planning period. The ORSA includes stress and scenario tests, which are performed to assess the financial and operational resilience of the Group. The Group ORSA report is produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the Group. The ORSA report is submitted to the PRA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in the risk profile of the Group outside the usual reporting cycle. In addition to the Group ORSA process, an entity-level ORSA process is performed for Quilter Life & Pensions Limited. The ICARA process is similar to the ORSA process and is performed at entity level for certain UK investment firms within the Group. A Group ICARA report is also produced annually and summarises the analysis, insights and conclusions from the underlying risk and capital management processes in respect of the IFPR prudential consolidation Group. The ICARA reports are submitted to the FCA as part of the normal supervisory process and may be supplemented by ad hoc assessments where there is a material change in risk profile outside the usual reporting cycle. The conclusions of the ORSA and ICARA processes are reviewed by management and the Board throughout the year. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-532": { "value": "37(b): Credit risk Overall exposure to credit risk Credit risk is the risk of adverse movements in credit spreads (relative to the reference yield curve), credit ratings or default rates leading to a deterioration in the level or volatility of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. This includes counterparty default risk, counterparty concentration risk and spread risk. The Group has established a Credit Risk Framework that includes a Credit Risk Policy and Credit Risk Appetite Statement. This framework applies to all activities where the shareholder is exposed to credit risk, either directly or indirectly, ensuring appropriate identification, measurement, management, monitoring and reporting of the Group\u2019s credit risk exposures. The credit risk arising from all exposures is mitigated by ensuring that the Group only enters into relationships with appropriately robust counterparties, adhering to the Group Credit Risk Policy. For each asset, consideration is given as to: \u00b7 the credit rating of the counterparty, which is used to derive the probability of default; \u00b7 the loss given default; \u00b7 the potential recovery which may be made in the event of default; \u00b7 the extent of any collateral that the Group has in respect of the exposures; and \u00b7 any second order risks that may arise where the Group has collateral against the credit risk exposure. The credit risk exposures of the Group are monitored regularly to ensure that counterparties remain creditworthy, that there is appropriate diversification of counterparties and that exposures are within approved limits. At 31 December 2022, the Group\u2019s material credit exposures were to financial institutions (primarily through the investment of shareholder funds), corporate entities (including external fund managers) and individuals (primarily through fund management trade settlement activities). There is no direct exposure to non-UK sovereign debt within the shareholder investments. The Group has no significant concentrations of credit risk exposure. Other credit risks The Group is exposed to financial adviser counterparty risk through a number of loans that it makes to its advisers and the payment of upfront commission on the sale of certain types of business. The risk of default by financial advisers is managed through monthly monitoring of loan and commission debt balances. The Group is also exposed to the risk of default by fund management groups in respect of settlements and rebates of fund management charges on collective investments held for the benefit of policyholders. This risk is managed through the due diligence process which is completed before entering into any relationship with a fund group. Amounts due to and from fund groups are monitored for prompt settlement and appropriate action is taken where settlement is not timely. Legal contracts are maintained where the Group enters into credit transactions with a counterparty. 37(b): Credit risk continued Impact of credit risk on fair value Due to the limited exposure that the Group has to credit risk, credit risk does not have a material impact on the fair value movement of financial instruments for the year under review. The fair value movements on these instruments are mainly due to changes in market conditions. Maximum exposure to credit risk The Group\u2019s maximum exposure to credit risk does not differ from the carrying value disclosed in the relevant notes to the consolidated financial statements. Loans and advances subject to 12-month expected credit losses are \u00a334 million (31 December 2021: \u00a329 million) and other receivables subject to lifetime expected credit losses are \u00a3204 million (31 December 2021: \u00a3252 million). Those balances represent the pool of counterparties that do not require a rating. These counterparties individually generate no material credit exposure and this pool is highly diversified, monitored and subject to limits. Exposure arising from financial instruments not recognised on the statement of financial position is measured as the maximum amount that the Group would have to pay, which may be significantly greater than the amount that would be recognised as a liability. The Group does not have any significant exposure arising from items not recognised on the statement of financial position. The table below represents the Group\u2019s exposure to credit risk from cash and cash equivalents. Credit rating relating to cash and cash equivalents that are neither past due nor impaired \u00a3m 31 December 2022 AAA AA A B <BBB Not rated1 Carrying value Cash at amortised cost, subject to 12-month ECL \u2013 13 388 5 \u2013 264 670 Money market funds at FVTPL 1,112 \u2013 \u2013 \u2013 \u2013 \u2013 1,112 Total cash and cash equivalents 1,112 13 388 5 \u2013 264 1,782 Credit rating relating to cash and cash equivalents that are neither past due nor impaired \u00a3m 31 December 2021 AAA AA A B <BBB Not rated1 Carrying value Cash at amortised cost, subject to 12-month ECL \u2013 105 451 \u2013 3 289 848 Money market funds at FVTPL 1,216 \u2013 \u2013 \u2013 \u2013 \u2013 1,216 Total cash and cash equivalents 1,216 105 451 \u2013 3 289 2,064 1Cash included in the consolidation of funds is not rated (see note 24(a)). Impairment allowance Assets that are measured and classified at amortised cost are monitored for any expected credit losses (\u201cECL\u201d) on either a 12-month or lifetime ECL model. The majority of such assets within the Group are measured on the lifetime ECL model, with the exception of some specific loans that are on the 12-month ECL model. Impairment allowance \u00a3m Balance at 1 January 2021 (0.8) Change due to change in counterparty balance (0.4) 31 December 2021 (1.2) Change due to change in counterparty balance 0.1 31 December 2022 (1.1) ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-533": { "value": "37(c): Market risk Market risk is the risk of an adverse change in the level or volatility of market prices of assets, liabilities or financial instruments resulting in loss of earnings or reduced solvency. Market risk arises from changes in equity, bond and property prices, interest rates and foreign exchange rates. Market risk arises differently across the Group\u2019s businesses depending on the types of financial assets and liabilities held. The Group recognises that climate change can contribute to market risk. The Group has a market risk policy which sets out the risk management framework, permitted and prohibited market risk exposures, maximum limits on market risk exposures, management information and stress testing requirements which are used to monitor and manage market risk. The policy is cascaded to the businesses across the Group, and Group-level governance and monitoring processes provide oversight of the management of market risk by the individual businesses. The Group does not undertake any principal trading for its own account. The Group\u2019s revenue is however affected by the value of assets under management and consequently it has exposure to equity market levels and economic conditions. Scenario testing is undertaken to test the resilience of the business to severe but plausible events, including assessment of the potential implications of climate-related risks and opportunities, and to assist in the identification of management actions. 37(c)(i): Equity and property price risk In accordance with the market risk policy, the Group does not generally invest shareholder assets in equity or property, or related collective investments, except where the exposure arises due to: \u00b7 mismatches between unitised fund assets and liabilities. These mismatches are permitted, subject to maximum limits, to avoid excessive dealing costs; and \u00b7 seed capital investments. Seed capital is invested within new unitised or other funds within the Group at the time when these funds are launched. The seed capital is then withdrawn from the funds as policyholders and customers invest in the funds. The above exposures are not material to the Group. The Group derives fees (e.g. annual management charges) and incurs costs (e.g. outsourced service provider and adviser fund-based renewal commissions) which are linked to the performance of the underlying assets. Therefore, future earnings will be affected by equity and property market performance. Equity and property price sensitivity testing A movement in equity and property prices would impact the fee income that is based on the market value of the investments held by or on behalf of customers. The sensitivity is applied as an instantaneous shock to equity and property prices at the start of the year. The sensitivity analysis is not limited to the unit-linked business and therefore reflects the sensitivity of the Group as a whole. Impac t on profit after tax and shareholders \u2019 equit y 31 December 2022 \u00a3m 31 December 2021 \u00a3m Impact of 10% increase in equity and property prices 30 34 Impact of 10% decrease in equity and property prices (30) (34) 37(c)(ii): Interest rate risk Interest rate risk arises primarily from bank balances held with financial institutions. A small amount of the Group\u2019s assets is held in fixed interest UK Government bonds, which are exposed to fluctuations in interest rates. Fixed interest UK Government bonds are mainly held to match liabilities by duration and so the exposure to interest rate risk is not material. A rise in interest rates would also cause an immediate fall in the value of investments in fixed income securities within clients\u2019 investment funds, resulting in a fall in fund-based revenues. Conversely, a reduction in interest rates would cause a rise in the value of investments in fixed income securities within clients\u2019 investment funds. It would also reduce the interest rate earned on bank balances and could potentially result in the Group incurring interest charges on these balances, if interest rates become negative. Exposure of the income statement and statement of financial position to interest rates are summarised below. 37(c): Market risk continued Interest rate sensitivity testing The impact of an increase and decrease in market interest rates of 1% is tested (e.g. if the current interest rate is 5%, the test allows for the effects of an instantaneous change to 4% and 6% from the start of the year). The test allows consistently for similar changes in investment returns and movements in the market value of any fixed interest assets backing the liabilities. The sensitivity of profit to changes in interest rates is provided. Impac t on profit after tax and shareholders \u2019 equit y Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Impact of 1% increase in interest rates 7 11 Impact of 1% decrease in interest rates (7) \u2013 37(c)(iii): Currency translation risk Currency translation risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group\u2019s functional currency is pounds sterling, which accounts for the majority of the Group\u2019s transactions. The Group has minor exposure to Euros, through the Group\u2019s Irish subsidiary and to the South African Rand, due to the listing on the Johannesburg Stock Exchange and the payment of a proportion of shareholder dividends in Rand. During 2022, the Group had limited exposure to foreign exchange risk in respect of other currencies due its non-UK operations and foreign currency transactions. ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-546": { "value": "37(c)(i): Equity and property price risk In accordance with the market risk policy, the Group does not generally invest shareholder assets in equity or property, or related collective investments, except where the exposure arises due to: \u00b7 mismatches between unitised fund assets and liabilities. These mismatches are permitted, subject to maximum limits, to avoid excessive dealing costs; and \u00b7 seed capital investments. Seed capital is invested within new unitised or other funds within the Group at the time when these funds are launched. The seed capital is then withdrawn from the funds as policyholders and customers invest in the funds. The above exposures are not material to the Group. The Group derives fees (e.g. annual management charges) and incurs costs (e.g. outsourced service provider and adviser fund-based renewal commissions) which are linked to the performance of the underlying assets. Therefore, future earnings will be affected by equity and property market performance. Equity and property price sensitivity testing A movement in equity and property prices would impact the fee income that is based on the market value of the investments held by or on behalf of customers. The sensitivity is applied as an instantaneous shock to equity and property prices at the start of the year. The sensitivity analysis is not limited to the unit-linked business and therefore reflects the sensitivity of the Group as a whole. Impac t on profit after tax and shareholders \u2019 equit y 31 December 2022 \u00a3m 31 December 2021 \u00a3m Impact of 10% increase in equity and property prices 30 34 Impact of 10% decrease in equity and property prices (30) (34) ", "dimensions": { "concept": "quilterplc:DisclosureOfEquityAndPropertyPriceRisk", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-547": { "value": "37(c)(ii): Interest rate risk Interest rate risk arises primarily from bank balances held with financial institutions. A small amount of the Group\u2019s assets is held in fixed interest UK Government bonds, which are exposed to fluctuations in interest rates. Fixed interest UK Government bonds are mainly held to match liabilities by duration and so the exposure to interest rate risk is not material. A rise in interest rates would also cause an immediate fall in the value of investments in fixed income securities within clients\u2019 investment funds, resulting in a fall in fund-based revenues. Conversely, a reduction in interest rates would cause a rise in the value of investments in fixed income securities within clients\u2019 investment funds. It would also reduce the interest rate earned on bank balances and could potentially result in the Group incurring interest charges on these balances, if interest rates become negative. Exposure of the income statement and statement of financial position to interest rates are summarised below. 37(c): Market risk continued Interest rate sensitivity testing The impact of an increase and decrease in market interest rates of 1% is tested (e.g. if the current interest rate is 5%, the test allows for the effects of an instantaneous change to 4% and 6% from the start of the year). The test allows consistently for similar changes in investment returns and movements in the market value of any fixed interest assets backing the liabilities. The sensitivity of profit to changes in interest rates is provided. Impac t on profit after tax and shareholders \u2019 equit y Year ended 31 December 2022 \u00a3m Year ended 31 December 2021 \u00a3m Impact of 1% increase in interest rates 7 11 Impact of 1% decrease in interest rates (7) \u2013 ", "dimensions": { "concept": "quilterplc:DisclosureOfInterestRateRisk", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-548": { "value": "37(c)(iii): Currency translation risk Currency translation risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group\u2019s functional currency is pounds sterling, which accounts for the majority of the Group\u2019s transactions. The Group has minor exposure to Euros, through the Group\u2019s Irish subsidiary and to the South African Rand, due to the listing on the Johannesburg Stock Exchange and the payment of a proportion of shareholder dividends in Rand. During 2022, the Group had limited exposure to foreign exchange risk in respect of other currencies due its non-UK operations and foreign currency transactions. ", "dimensions": { "concept": "quilterplc:DisclosureOfCurrencyTranslationRisk", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2021-01-01T00:00:00/2022-01-01T00:00:00" } }, "fact-534": { "value": "37(d): Liquidity risk Liquidity risk is the risk that there are insufficient assets or that assets cannot be realised in order to settle financial obligations as they fall due or that market conditions preclude the ability of the Group to trade in illiquid assets in order to maintain its asset and liability matching (\u201cALM\u201d) profile. The Group manages liquidity on a daily basis through: \u00b7 maintaining adequate high-quality liquid assets and banking facilities, the level of which is informed through appropriate liquidity stress testing; \u00b7 continuously monitoring forecast and actual cash flows; and \u00b7 monitoring a number of key risk indicators to help in the identification of a liquidity stress. Individual businesses maintain and manage their local liquidity requirements according to their business needs within the overall Group Liquidity Risk Framework that includes a Group Liquidity Risk Policy and Group Liquidity Risk Appetite Statement. The Group framework is applied consistently across all businesses in the Group to identify, manage, measure, monitor and report on all liquidity risks that have a material impact on liquidity levels. This framework considers both short-term liquidity and cash management considerations and longer-term funding risk considerations. Liquidity is monitored centrally by Group Treasury, with management actions taken at a business level to ensure each business has sufficient liquidity to cover its minimum liquidity requirement, with an appropriate buffer set in line with the Group Risk Appetite Statement. Throughout the ongoing Ukraine crisis and market volatility during 2022, Quilter plc and its subsidiaries have operated above their individual liquidity targets and there were no material liquidity stresses identified over this period. Daily liquidity monitoring continues across the Group to enable timely identification of any emerging issues. The Group maintains contingency funding arrangements to provide liquidity support to businesses in the event of liquidity stresses that are greater than their risk appetite. Contingency Funding Plans are in place for each individual business in order to set out the approach and management actions that would be taken should liquidity levels fall below minimum liquidity requirements. The plans undergo an annual review and testing cycle to ensure they are fit for purpose and can be relied upon during a liquidity stress. Information on the nature of the investments and securities held is given in note 17. The Group has a \u00a3125 million five-year Revolving Credit Facility with a five-bank club that provides a form of contingency liquidity for the Group. No drawdown on this facility has been made since inception. The Group has exercised the option to extend the facility for a further two-year period, to February 2025, and has continued to meet all the covenants attached to its financing arrangements. The financing arrangements are considered sufficient to maintain the target liquidity levels of the Group and offer coverage for appropriate stress scenarios identified within the liquidity stress testing undertaken across the Group. Further details, together with information on the Group\u2019s borrowed funds, are given in note 30. The Group does not have material liquidity exposure to special purpose entities or investment funds. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-535": { "value": "37(e): Insurance risk 37(e)(i): Overview The definition of insurance risk set out in the policy covers risks arising under Quilter\u2019s unit-linked investment contracts which do not meet the IFRS definition of insurance contracts. The Group\u2019s Enterprise Risk Management Framework defines insurance risk as the risk of a reduction in Solvency II own funds from adverse experience or change in assumptions relating to claims, policyholder behaviour, mortality, longevity or expenses, resulting in an adverse impact to earnings or reduced solvency. The Group has implemented an insurance risk policy which sets out the Group\u2019s requirements for the management, measurement, monitoring and reporting of insurance risks. The Group has implemented the Technical Provisions Standard to support the insurance risk policy. The sensitivity of the Group\u2019s earnings and capital position to insurance risks is monitored through the Group\u2019s capital management processes. The Group manages its insurance risks through the following mechanisms: \u00b7 Management of expense levels relative to approved budgets. \u00b7 Analysis and monitoring of experience relative to the assumptions used to determine technical provisions. Persistency Persistency risk is the risk that the level of surrenders or withdrawals on products offered by Quilter Life & Pensions Limited occur at levels that are different to the levels assumed in the determination of technical provisions. Persistency statistics are monitored monthly and a detailed persistency analysis at a product group level is carried out on an annual basis. Management actions may be triggered if persistency statistics indicate significant adverse movement or emerging trends in experience. Expenses Expense risk is the risk that actual expenses and expense inflation differ from the levels assumed in the determination of technical provisions. Expense levels are monitored on a quarterly basis against budgets and forecasts. Expense drivers are used to allocate expenses to entities and products. Some product structures include maintenance charges. These charges are reviewed annually in light of changes in maintenance expense levels and the market rate of inflation. This review may result in changes in charge levels. Mortality Mortality risk is not material as the Group does not provide material mortality insurance on its products and mortality benefits are reinsured. 37(e)(ii): Sensitivity analysis Sensitivity analysis has been performed by applying the following parameters to the statement of financial position and income statement for 2021 and 2022. Interest rate and equity and property price sensitivities are included within the Group market sensitivities above. Expenses The increase in expenses is assumed to apply to the costs associated with the maintenance and acquisition of contracts within the unit-linked business. It is assumed that these expenses are increased by 10% from the start of the year, so is applied as an expense shock rather than a gradual increase. The only administrative expenses that are deferrable are sales bonuses but as new business volumes are unchanged in this sensitivity, sales bonuses and the associated deferrals have not been increased. Administrative expenses have been allocated equally between life and pensions. An increase in expenses of 10% would have decreased profit by \u00a36 million after tax (2021: \u00a36 million). ", "dimensions": { "concept": "quilterplc:DisclosureOfInsuranceRisk", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-536": { "value": "37(f): Operational risk Operational risk is the risk of loss arising from inadequate or failed internal processes, or from personnel and systems, or from external events, resulting in an adverse impact to earnings or reduced solvency. Operational risk includes all risks resulting from operational activities, excluding the risks already described above and excluding strategic risks and risks resulting from being part of a wider group of companies. Operational risk includes the effects of failure of administration processes, IT and Information Security maintenance and development processes, investment processes (including settlements with fund managers, fund pricing and matching and dealing), people and HR processes, product development and management processes, legal risks (e.g. risk of inadequate legal contracts with third parties), change delivery risks (including poorly managed responses to regulatory change), physical and certain transitional financial risks arising from climate change, risks relating to the relationship with third-party suppliers and outsourcers, and the consequences of financial crime and business interruption events. In accordance with Group policies, management has primary responsibility for the identification, measurement, assessment, management and monitoring of risks, and the escalation and reporting on issues to Executive Management. The Group\u2019s Executive Management has responsibility for implementing the Group Operational Risk Framework and for the development and implementation of action plans designed to manage risk levels within acceptable tolerances and to resolve issues identified. ", "dimensions": { "concept": "quilterplc:DisclosureOfOperationalRisk", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-537": { "value": "37(g): Contractual maturity analysis Investment contract policyholders have the option to terminate or transfer their contracts at any time and to receive the surrender or transfer value of their policies, and these liabilities are therefore classified as having a maturity of less than three months. Although these liabilities are payable on demand, the Group does not expect that all liabilities will be settled within a short time period. ", "dimensions": { "concept": "quilterplc:DisclosureOfContractualMaturityAnalysis", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-480": { "value": "38: Fiduciary activities The Group provides custody, trustee, corporate administration and investment management and advisory services to external parties that involve the Group making allocation, purchase and sales decisions in relation to a wide range of financial instruments. Those assets that are held in a fiduciary capacity are not included in these financial statements. Some of these arrangements involve the Group accepting targets for benchmark levels of returns for the assets under the Group\u2019s care. These services give rise to the risk that the Group may be accused of misadministration or underperformance. Certain Quilter investment firms hold client money and other assets on behalf of clients and related activities are subject to the rules set out in the FCA\u2019s Client Assets Sourcebook (\u201cCASS\u201d). The Group is not beneficially entitled to those assets and therefore neither the assets nor the related amounts due to clients are recognised on the Group balance sheet. ", "dimensions": { "concept": "quilterplc:DisclosureOfFiduciaryActivities", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-481": { "value": "39: Related party transactions In the normal course of business, the Group enters into transactions with related parties. Loans to related parties are conducted on an arm\u2019s length basis and are not material to the Group\u2019s results. There were no transactions with related parties during the current year or the prior year which had a material effect on the results or financial position of the Group. 39(a): Transactions with key management personnel, remuneration and other compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group. Details of the compensation paid to the Board of Directors as well as their shareholdings in the Company are disclosed in the Directors\u2019 Remuneration Report. 39(a)(i): Key management personnel compensation 31 December 2022 \u00a3\u2019000 31 December 2021 \u00a3\u2019000 Salaries and other short-term employee benefits 5,739 7,627 Post-employment benefits 25 43 Share-based payments 3,372 2,987 Total compensation of key management personnel 9,136 10,657 39(a)(ii): Key management personnel transactions Key management personnel and members of their close family have undertaken transactions with the Group in the normal course of business. The Group\u2019s products are available to all employees of the Group on preferential staff terms, the impact of which is immaterial to the Group\u2019s financial statements. During the year ended 31 December 2022, key management personnel and their close family members contributed \u00a32 million (2021: \u00a31 million) to Group pensions and investments (in both internal and external funds). The total value of investments in Group pensions and investment products by key management personnel serving at any point during the year and their close family members was \u00a312 million at the end of the year (2021: \u00a312 million). Qualifying third-party indemnity provisions (as defined by section 234 of the Companies Act 2006) were in force during the course of the year ended 31 December 2022 for the benefit of the then Directors and, at the date of this report, are in force for the benefit of the Directors in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers and office. In addition, the Company maintains Directors\u2019 and Officers\u2019 Liability Insurance which provides appropriate cover for legal action that may be brought against its Directors and Officers. 39(b): Associates In the current and prior year, IT services were provided by 360 Dot Net Limited, an associate of the Group. The relevant transactions had no material impact on the Group\u2019s financial statements. 39(c): Other related parties Details of the Group\u2019s staff pension schemes are provided in note 33. Transactions made between the Group and the Group\u2019s staff pension schemes are made in the normal course of business. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-538": { "value": "39(a): Transactions with key management personnel, remuneration and other compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group. Details of the compensation paid to the Board of Directors as well as their shareholdings in the Company are disclosed in the Directors\u2019 Remuneration Report. 39(a)(i): Key management personnel compensation 31 December 2022 \u00a3\u2019000 31 December 2021 \u00a3\u2019000 Salaries and other short-term employee benefits 5,739 7,627 Post-employment benefits 25 43 Share-based payments 3,372 2,987 Total compensation of key management personnel 9,136 10,657 39(a)(ii): Key management personnel transactions Key management personnel and members of their close family have undertaken transactions with the Group in the normal course of business. The Group\u2019s products are available to all employees of the Group on preferential staff terms, the impact of which is immaterial to the Group\u2019s financial statements. During the year ended 31 December 2022, key management personnel and their close family members contributed \u00a32 million (2021: \u00a31 million) to Group pensions and investments (in both internal and external funds). The total value of investments in Group pensions and investment products by key management personnel serving at any point during the year and their close family members was \u00a312 million at the end of the year (2021: \u00a312 million). Qualifying third-party indemnity provisions (as defined by section 234 of the Companies Act 2006) were in force during the course of the year ended 31 December 2022 for the benefit of the then Directors and, at the date of this report, are in force for the benefit of the Directors in relation to certain losses and liabilities which they may incur (or have incurred) in connection with their duties, powers and office. In addition, the Company maintains Directors\u2019 and Officers\u2019 Liability Insurance which provides appropriate cover for legal action that may be brought against its Directors and Officers. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-539": { "value": "39(b): Associates In the current and prior year, IT services were provided by 360 Dot Net Limited, an associate of the Group. The relevant transactions had no material impact on the Group\u2019s financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-482": { "value": "40: Events after the reporting date Note 13 provides information on the Group\u2019s final dividend in respect of 2022. In January 2023, the Company issued the \u00a3200,000,000 8.625% Fixed Rate Reset Subordinated Notes (due April 2033) and received net cash proceeds of \u00a3197 million. The Notes are now listed and regulated under the terms of the London Stock Exchange. On 28 February 2023, the Company repaid the existing \u00a3200,000,000 4.478% Fixed Rate Reset Subordinated Notes (due February 2028). ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:54930092XIVK28RZGM95", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } } } }