28 April 2022
JTC PLC
(the "Company" and together with its subsidiaries "JTC" or the "Group")
Annual Financial Report and Notice of AGM
Further to the release of the Company's final results announcement on 19 April 2022, JTC announces that it has published its 2021 Annual Report and Accounts and Notice of 2022 Annual General Meeting. The following documents are being distributed or made available to shareholders electronically today, Thursday 28 April 2022:
- 2021 Annual Report and Accounts
- Notice of 2022 Annual General Meeting
- Form of Proxy for the 2022 Annual General Meeting
In compliance with Listing Rule 9.6.1 copies of the above documents will be submitted to the National Storage Mechanism and will be available at its website once this process is complete: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Copies of the 2021 Annual Report and Accounts and the Notice of 2022 Annual General Meeting are available from the Registered Office of the Company (JTC House, 28 Esplanade, St. Helier, Jersey, JE2 3QA) and will shortly be available to view and download from the Company's website: www.jtcgroup.com/investor-relations/
Participation and Voting at the AGM
The Company's 2022 Annual General Meeting will be held at 9:30am on Tuesday 31 May 2022 at JTC House, 28 Esplanade, St. Helier, Jersey, JE2 3QA.
Shareholders are encouraged to appoint a proxy in order to vote on the matters being considered at 2022 Annual General Meeting. Shareholders may appoint a proxy via the CREST electronic proxy appointment service or by completing a Proxy Form to be lodged with Company's Registrar, Computershare Investor Services (Jersey) Limited, by post or electronically via the internet no later than 9.30am on 27 May 2022.
Shareholders are also encouraged to submit any questions they may have for the Board before the 2022 Annual General Meeting by emailing agm@jtcgroup.com by no later than 11 a.m. on 19 May 2022. Please include the Shareholder's name and Shareholder Reference Number (which can be found on the share certificate or proxy form) in your email. Answers to the questions on key themes will be published on the Company's website (www.jtcgroup.com/investor-relations) on 23 May 2022.
Information required under Disclosure Guidance and Transparency Rule 6.3.5
In accordance with DTR 6.3.5, additional information is set out in the appendices to this announcement. The information contained in the appendices, which is extracted from the 2021 Annual Report and Accounts, is included solely for the purposes of complying with DTR 6.3.5. The information should be read in conjunction with the Final Results Announcement, released on 19 April 2022. This announcement and the Final Results Announcement together constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text. This material is not a substitute for reading the full 2021 Annual Report and Accounts. Page numbers and notes in the following appendices refer to page numbers and notes in the 2021 Annual Report and Accounts.
For further information, please contact:
Miranda Lansdowne
JTC PLC
+44 1534 700 000
Miranda.Lansdowne@jtcgroup.com
APPENDIX A - Principal and Emerging Risks and Uncertainties
The following description of the principal and emerging risks and uncertainties that the Company faces is extracted from the 2021 Annual Report and Accounts (pages 44 - 49):
Principal risks
JTC operates a Risk Register that aims to categorise its risks across six key (Level 1) risk types and 18 (Level 2) sub-risks. In reviewing these categories of risk, we have identified what we believe are the principal risks.
A principal risk is a risk or combination of risks we have assessed as having the capacity to seriously affect the performance, future prospects or reputation of the Group. These will include risks we consider could threaten our business model, future performance, solvency or liquidity.
In addition, as part of our horizon-scanning activities we also identify risks that are not yet considered to be principal risks, but we identify as emerging risks - those that may, in time, pose a threat to the Group's business model. We have outlined these at the end of the section, and they include employee wellbeing, third-party data compromise and the emerging global threat of climate change.
The Group's principal risks are periodically re-examined and reported by the Chief Risk Officer to the Audit and Risk Committee with an assessment on (i) their impact if they were to occur and (ii) the likelihood of occurrence, together with a description of the controls and mitigation in place to manage those controls and any actions deemed necessary by the risk owner to further reduce the assessed residual risk.
| LEVEL 1 | | LEVEL 2 | ||
| Primary, overarching risk elements, containing SIX components | | Represents the cohorts of specific risks JTC is exposed to | | Principal risk |
| 1. STRATEGIC | | Acquisition | | ü |
| | | Competitor and client demand | | ü |
| | | Strategy | | ü |
| 2. FINANCIAL | | Performance of business | | ü |
| | | Earnings (fx) | | |
| | | Impairment | | |
| | | Financing | | |
| 3. OPERATIONAL | | Client & process | | ü |
| | | Business continuity | | |
| | | Data security | | ü |
| 4. POLITICAL / REGULATORY | | Listing rules | | |
| | | Political / regulation | | ü |
| | | Financial crime | | ü |
| 5. LEGAL | | Litigation / contractual | | |
| | | Fiduciary | | ü |
| 6. HUMAN RESOURCES | | Adequate resources | | ü |
| | | Retention | | |
| | | Key person | | |
The Group's current principal risks are the risks we are managing now that could stop us achieving our strategic objectives:
| | PRINCIPAL RISK (RISK OWNER) | | POTENTIAL CAUSES | | KEY MITIGATION MEASURES | | TIMESCALE |
| 1 | ACQUISITION RISK (Group Chief Executive Officer) The risk that acquisitions do not achieve intended objectives, give rise to ongoing or previously unidentified liabilities, disrupt operations and divert senior management time and attention. During 2021 JTC continued with its inorganic growth in line with business strategy, acquiring seven businesses of varying scope and scale. | | - Inadequate due diligence - Economic misjudgement - Lack of strategic clarity - Ineffective or delayed integration - Unpredicted changes to external environment | | - Strict due-diligence process, including JTC subject-matter experts and third-party assessments by experienced external advisors - Appropriate scrutiny and challenge from Group Development Committee, Group Holdings Board and Non-Executive Directors - Established and tested integration strategy agreed prior to acquisition with robust post-acquisition governance - Experienced management team - Shared ownership to align interests and deferred consideration - Insurance run-off cover - Vendor representations and warranties (backed by insurance where appropriate) | | This risk will diminish over time as each acquisition is integrated, but the volume of current integrations causes this risk category to remain as a principal risk. |
| 2 | COMPETITOR AND CLIENT DEMAND RISK (Group Chief Executive Officer) The risk of failing to anticipate client demand or to innovate in line with key competitors, or advancing technology or regulatory/political change may lead to significant loss of potential or existing business. JTC operates in a competitive and fast-paced global market requiring a responsive approach to client demand and behaviour, competitor activity, innovation, economic and regulatory changes and geopolitical events. | | - 'Black swan' events (e.g. pandemic) - Competitor actions - Political trends - Economic conditions - Market conditions - Regulatory changes - Technological changes | | - Chief Commercial Officer appointed to Group Holdings Board - Group Holdings Board responsibility for identifying forthcoming requirements in respect of digital and business systems investment and continually considering emerging threats due to market conditions, taking mitigating action as appropriate - Group Holdings Board responsibility for identifying and prioritising product innovation - Commercial Enterprise Forum to assess, prioritise, de-risk and commercialise opportunities | | This risk is largely influenced by external factors and is therefore likely to remain a continuous principal risk |
| 3 | STRATEGY RISK (Group Chief Executive Officer) The risk that inadequate strategic decisions or failure to execute the set strategy has a detrimental impact on Group operations, clients and market confidence. Alternatively, the Group's strategy brings excessive risks to the business or does not sufficiently align to changing market conditions or client requirements, such that sustainable growth, market share or profitability is affected. The Group continues to pursue its strategy of organic and inorganic growth with a particular focus on building our presence in the United States, Ireland, Luxembourg and the UK. | | - Operation outside of risk appetite - Product or service failure - Senior management or leadership changes - Legal or regulatory challenges - Lack of understanding of a new jurisdiction | | - Overarching strategy is set every three to five years and progress is periodically re-examined - Strategy regularly reviewed and challenged by Board and, as a listed entity, subject to investor and third-party scrutiny - Strategy drives annual business planning process and performance-based targets - Risk-taking and aversion in pursuit of strategic objectives is balanced through the setting and overseeing of the Group Risk Appetite | | Strategic risk is an ongoing risk for any business and therefore is likely to remain as a continuous principal risk. |
| 4 | PERFORMANCE OF BUSINESS RISK (Group Chief Executive Officer) The risk that the Group does not meet its financial forecasts or does not achieve the provided market guidance. JTC is listed on the London Stock Exchange and subject to market consensus expectations that can influence shareholder value. | | - Inadequate budgeting and forecasting - Unpredicted costs or losses - Lack of information provided to brokers and analysts | | - Budgets set annually and agreed with Divisional Heads, Jurisdictional Managing Directors and P&L account owners - Monthly reporting and KPIs that help monitor performance against performance assumptions and targets. Active review by Group Holdings Board together with PLC Board - CEO and CFO regular engagement with analysts to inform external market guidance - Insurance cover for losses | | Business performance risk is an ongoing risk for a business, especially for a quoted business. This risk is therefore likely to remain as a continuous principal risk. |
| 5 | CLIENT AND PROCESS RISK (Group Divisional Heads) The risk of the Group taking on the wrong type of clients, or the Group or the client's actions during the client life-cycle leads to losses, failed strategic objectives, reputational damage, poor customer service and employee frustration and potentially regulatory censure. The risk of failing to clearly define service provision or fulfil a role expertly. The risk that lack of relevant process or incorrect, inconsistent, or untimely execution of processes or internal change leads to a material operational error and the consequential adverse impact. | | - Failure to apply policies and follow procedures - Failure to follow codes of conduct - Failure of managerial oversight - Failure to adequately train and develop employees - Failure to identify and remediate identified issues promptly - Inadequate policies and procedures | | - Strict adherence to policy and procedures including business acceptance and periodic reviews, with appropriate escalation for higher-risk clients - Established Terms of Business, template customer agreements and Legal review of tailored agreements - Regular staff training and awareness initiatives - Established reporting and escalation process with review by boards and committees as appropriate - Independent client and Compliance monitoring review programme - Promoting a robust risk and compliance culture across the Group - Ensuring quality administration and compliance resource in each jurisdiction plus internal legal counsel support as appropriate - Well established Recommendation for Signing process - Three-lines model for assurance and controls including Internal Audit ("IA") - Well understood and defined Risk Escalation processes - Accessible policy and procedure framework | | Client and process risk remains a continuous principal risk for the business. |
| 6 | DATA SECURITY RISK (Group Chief Information Officer) The risk of a security breach including cyber-attacks by destructive forces from both internal and external sources, leading to loss of confidentiality and integrity of data. The sophistication of cyber threats is constantly evolving; criminals will seek to exploit changes in working environments e.g. remote-working practices. A substantial cyber event could be detrimental to JTC's clients as well as erode market and regulator confidence. | | - Unauthorised data transfer - Malware - Financial theft - Denial-of-service attacks - Cyber phishing attacks - Network service failures - Employee error - Malicious employee intent - Security breach of client data or systems | | - Defined and audited IT procedures - External security assessment conducted annually - System access controls including least privilege access model - Dedicated Senior IT Security Manager and Team - Training including compulsory online Security Awareness courses for all employees - Alignment to industry security standards - Review of data security procedures and controls as part of the annual ISAE 3402 Report - Access to group systems and data is granted on a need-to-know basis and least privileged - Industry-leading solutions for end-point management, anti-virus, data loss prevention, Privilege Access Management and secure email communications | | Data security risk remains a continuous principal risk for the business. |
| 7 | POLITICAL / REGULATION RISK (Group Chief Executive Officer) The risk that the JTC business operating model is adversely affected by political or regulatory changes which affect the markets or services we offer together with our client base. Risk of exposure to regulatory sanction and subsequent reputational damage given a failure to follow regulatory laws, orders and codes of practice requirements. As the regulatory environment continues to develop, we expect a continuing global trend of increased regulatory scrutiny and intervention for all regulated businesses including trustee, fund and corporate service providers. The Group is well positioned to comply with relevant requirements and to be able to operate in this changing regulatory environment. | | - Geopolitical uncertainty - Regional or global standards or requirements with disproportionate impact - Political reaction to wide-scale data leaks and associated negative press coverage - Balancing increased transparency requirements with increased data protection legislation - Challenge and cost of measuring, monitoring and demonstrating good conduct as well as meeting new requirements - Keeping pace with rapid regulatory change and reporting requirements | | - Specialist risk and compliance staff with the skills needed to monitor and report on strategic outlook and the impact of change - Review by appropriate boards and committees, and scanning of horizon for potential changes - Comprehensive policies, procedures and processes in operation within the Group that align to the appropriate regulatory regimes. - Embed (and continue to promote) a robust risk and compliance culture across the Group from PLC Board down through the organisation. - Ensuring appropriate compliance resource in each jurisdiction - Compliance monitoring programme in place - Training employees to be aware of changing regulations - Involvement with trade associations and government bodies to understand direction and influence outcome | | Political and regulation risk is expected to remain a continuous principal risk for the business. |
| 8 | FINANCIAL CRIME RISK (Group Divisional Heads) The risk of the Group operating inadequate systems, procedures and controls that fail to prevent the administration of client structures that are exposed to financial crime. (NOTE: Financial Crime Risk includes money laundering, terrorist financing, sanctions, fraud, bribery and corruption, and tax evasion risks). This is an area where there is intense regulatory attention and scrutiny. The Group is committed to the highest standards of ethical behaviour and operates in a manner designed to deter and prevent financial crime risk. There is focused oversight and monitoring of financial crime risks, and adherence to both internal financial crime policies and regulatory obligations. | | - Poor culture - Inadequate awareness training - Poor Know Your Client processes - Inadequate record keeping - Deficient screening processes - Lack of a risk-based approach - AML/CFT arrangements not tailored to business profile/characteristics - Procedural failures - Failure to report suspicious activity on a timely basis | | - Comprehensive policies, procedures and processes in operation within the Group that are specifically drafted for AML/CFT purposes - The hiring of capable employees in each jurisdiction that undertake the key person roles (e.g. Compliance Officer and Money Laundering Reporting Officer) - Frequent mandatory staff training and awareness initiatives and CPD requirements - Compliance monitoring testing programme in place - Access to external consultants and databases to enable daily ongoing monitoring and in depth enquiries on clients as appropriate - Established Business Risk Assessment (BRA) process which is subject to periodic Board review | | Financial crime risk is expected to remain a continuous principal risk for the business. |
| 9 | FIDUCIARY RISK (Group Divisional Heads) The risk of breaching fiduciary duties, including failing to safeguard client assets, can be harmful to the Group's reputation and could become subject to high-value litigation. There is also the risk in failing to clearly define the Group's role in providing services to a client structure or service vehicle or a failure to fulfil the role expertly. JTC operates a comprehensive set of controls to prevent risk materialising in relation to its fiduciary duties. A change in the market conditions causing lower valuations of higher-risk investments, could change risk exposures and fiduciaries may begin to experience increased regulatory scrutiny and litigation with regard to responsibilities. During the recent pandemic period, JTC has not experienced any material increases in litigation. | | - Breach of duty - Failure to act in accordance with constitutional documents or service agreement - Failing to exercise reasonable care, skill and diligence - Failure to declare interests of manage conflicts - Making partial judgements | | - Strict policies, procedures and processes in operation within the Group (particularly risk escalation and recommendation for signing policy) - Qualified and experienced staff operating within '4-eyes' control parameter - Continuous training programme and CPD requirement - JTC does not provide legal or tax advice to its clients - Significant insurance cover | | Fiduciary risk is an endemic feature of JTC business operations and is expected to remain a continuous principal risk. |
| 10 | ADEQUATE RESOURCES RISK (Group Chief Operating Officer) The risk of failure to attract or retain the best people with the right capabilities across all levels and jurisdictions. The repercussions of the global pandemic have significantly altered the workplace and the employment market in many jurisdictions. Remote-working practices initiated during early lockdown measures have been embraced into business-as-usual flexible working arrangements utilising the Group's existing strong technology capabilities. While the safety and wellbeing of staff remained a priority during 2021, ongoing activities continued to support attracting and retaining talent within the Group. An enhanced and more sophisticated HR system was deployed during the year allowing employees to self-serve and access a broad range of training materials. The Group also granted phased share awards worth £20m to its global workforce as part of its long-established Shared Ownership programme. The Group made several key appointments during the year, using technology and remote-interviewing as required. JTC continues to focus on succession planning and personal development, including supporting professional qualifications. | | - Uncompetitive remuneration - Unappealing working environment and inadequate support - Lack of adequate succession planning - Failure to invest in appropriate and timely talent development - Failure to identify roles most essential to achieving strategic aims - Failure to identify the required skills for key roles - Insufficient focus on attitude and motivation and alignment with JTC's vision and values | | - Dedicated in-house human-resource recruitment capability with detailed understanding of business needs and local market environment - Recruitment strategy to enhance and bolster teams, succession planning and employee value proposition - JTC ensures that the remuneration package is competitive in the marketplace and benchmarks with peer group - Management monitoring of capacity and work loads - Shared ownership scheme embedded across the business - JTC encourages a strong management culture where talent management and people development is a core focus - Pre-employment screening - Internal and PLC Remuneration committee - Staff access to Academy (Training), Gateway (International Transfers) and wellbeing programs - Flexible working arrangements | | Adequate resourcing risk is expected to be a continuous principal risk. |
APPENDIX B - Directors' responsibility statement
The following directors' responsibility statement is extracted from the 2021 Annual Report and Accounts (page 96):
We confirm that to the best of our knowledge:
- The Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;
- The Strategic Report (contained on pages 1 to 50) includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
- The Directors consider the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position, performance, business model and strategy.
Approved by the Board on 14 April 2022 and signed on its behalf by:
MIRANDA LANSDOWNE
JOINT COMPANY SECRETARY
JTC (JERSEY) LIMITED, COMPANY SECRETARY
APPENDIX C - Dividend Declaration
The financial statements set out the results of the Group for the financial year ended 31 December 2021 and are shown on pages 97 to 140 of the 2021 Annual Report and Accounts. A final dividend of 5.07 pence per ordinary share is recommended by the Directors. Subject to approval at the 2022 Annual General Meeting, the dividend will be paid on 8 July 2022 to Shareholders who are on the Register of Members at the close on business on 17 June 2022. The shares will become ex-dividend on 16 June 2022. An interim dividend of 2.6 pence per ordinary share was paid on 29 October 2021.
Enquiries
JTC PLC +44 (0)1534 700 000
Miranda Lansdowne
Camarco +44 (0)20 3757 4985
Geoffrey Pelham-Lane
Monique Perks
Emily Shea-Simonds
About JTC
JTC is a publicly listed, global professional services business with deep expertise in fund, corporate and private client services. Every JTC person is an owner of the business and this fundamental part of our culture aligns us with the best interests of all our stakeholders. Our purpose is to maximize potential and our success is built on service excellence, long-term relationships and technology capabilities that drive efficiency and add value.
Forward Looking Statements
This announcement may contain forward looking statements. No forward looking statement is a guarantee of future performance and actual results or performance or other financial condition could differ materially from those contained in the forward looking statements. These forward looking statements can be identified by the fact they do not relate only to historical or current facts. They may contain words such as "may", "will", "seek", "continue", "aim", "anticipate", "target", "projected", "expect", "estimate", "intend", "plan", "goal", "believe", "achieve" or other words with similar meaning. By their nature forward looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of these influences and factors are outside of the Company's control. As a result, actual results may differ materially from the plans, goals and expectations contained in this announcement. Any forward looking statements made in this announcement speak only as of the date they are made. Except as required by the FCA or any applicable law or regulation, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statements contained in this announcement.
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