Strategic Report Governance
Financial Statements
143
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. MATERIAL ACCOUNTING POLICIES General information Just Group plc (the “Company”) is a public company limited by shares, incorporated and domiciled in England and Wales. The Company’s registered office is Enterprise House, Bancroft Road, Reigate, Surrey, RH2 7RP. 1.1. Basis of preparation The consolidated financial statements have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and the disclosure guidance and transparency rules sourcebook of the United Kingdom’s Financial Conduct Authority. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, certain financial assets and financial liabilities (including derivative instruments and investment contract liabilities) and investment properties at fair value and the accounting for the remeasurement of insurance and reinsurance contracts as required by IFRS 17. Unless otherwise stated, values are expressed to the nearest £1m. Going concern A detailed going concern assessment has been undertaken and having completed this assessment, the Directors are satisfied that the Group has adequate resources to continue to operate as a going concern for a period of not less than 12 months from the date of signing of this report and that there is no material uncertainty in relation to going concern. Accordingly, the going concern basis continues to be applied in preparing these financial statements and it remains appropriate to value assets and liabilities on the assumption that there are adequate resources to continue in business and meet obligations as they fall due. The Directors considered the findings of the work performed to support the long-term viability statement of the Group in the Risk management section of the Annual Report and Accounts, which is undertaken together with the going concern assessment. This assessment includes the consideration of the Group’s business plan approved by the Board; the projected solvency and liquidity positions of the Company and the Group, impacts of economic stresses, the current financing arrangements and contingent liabilities, and a range of forecast scenarios with differing levels of new business and associated additional capital requirements to write anticipated levels of new business. Over the time periods assessed, the Group does not consider there to be any material uncertainty arising from climate-related risk. Further information regarding the Group’s exposure to physical and transition risks of climate change is included in the Strategic report disclosures on the TCFD disclosure framework. The Group has a robust liquidity framework designed to withstand a range of “worst case” 1-in-200 year historic liquidity events. The Group liquid resources includes the Parent Company’s undrawn revolving credit facility of up to £400m for general corporate and working capital purposes. The borrowing facility is subject to financial covenants that are measured biannually as at the end of June and December, being the ratio of consolidated net debt to the sum of net assets and consolidated net debt not being greater than 45%. The ratio on 31 December 2024 was 19% (31 December 2023: 24%). The Group’s business plan indicates that liquidity headroom will be maintained above the Group’s borrowing facilities and financial covenants will be met throughout the going concern period. As explained in note 30, the Group complies with the requirements of Solvency II, which includes the requirement to maintain eligible capital in excess of the value of the Solvency Capital Requirement (“SCR”) which is determined based on capital required to absorb 1-in-200 year stress tests for longevity risk, property risk, credit risk and interest rate risk over the next years’ time horizon. The resilience of the solvency capital position has been tested under a range of adverse scenarios, before and after management actions within the Group’s control, which consider the possible impacts on the Group’s business, including stresses to UK residential property prices, house price inflation, the credit quality of assets including residential ground rent portfolios, mortality, and risk-free interest rates. Eligible own funds exceeded the minimum capital requirement in all stressed scenarios described above. Furthermore, the Directors note that in a scenario where the Group ceases to write new business, the going concern basis would continue to be applicable while the Group continued to service in-force policies. 1.2. New accounting standards and new material accounting policies Adoption of new and amended accounting standards The following amendments to existing standards have been adopted by the Group and do not have a significant impact on the financial statements: • IAS 1 “Presentation of financial statements” – Amendments in respect of the classification of liabilities as current or non-current. • IAS 1 “Presentation of financial statements” – Amendments in respect of non-current liabilities with covenants. The following new accounting standards are in issue but not endorsed yet. These have not yet been adopted by the Group and are not expected to have a significant impact on the results within the financial statements: • IFRS 18 “Presentation and Disclosure in Financial Statements” (effective 1 January 2027 with restatement for comparatives). IFRS 18 introduces new requirements on presentation and disclosures in the financial statements, with a focus on the income statement and reporting of financial performance. Items in the statement of profit or loss will be classified into different categories such as operating, investing and financing. As a presentation and disclosure standard, the implementation of IFRS 18 will not affect the Group’s results. The Group is considering the impact on the presentation of the Group’s financial statements.
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