FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES General information Just Group plc (the “Company”) is a public company limited by shares, incorporated and domiciled in England andWales. 1.1 Basis of preparation
The financial statements have been prepared in accordance with the Companies Act 2006, including application of international accounting standards and other disclosure requirements, and International Financial Reporting Standards (“IFRS”) as adopted by the UK Endorsement Board. The change in basis of preparation to UK adopted IFRS is required by UK company law for the purposes of financial reporting as a result of the UK’s exit from the EU on 31 January 2020 and the cessation of the transition period on 31 December 2020. This change does not constitute a change in accounting policy but a change in framework which is required to ground the use of IFRS in company law. There is no impact on recognition, measurement or disclosure between the two frameworks in the period reported. The accounting policies followed in the Company financial statements are the same as those in the consolidated accounts with the exception that the Company applies IFRS 9 in its separate financial statements. The financial statements comply with IFRS as issued by the International Accounting Standards Board. Values are expressed to the nearest £0.1m. 1.2 Net investment income Investment income is accrued up to the balance sheet date. Investment expenses and charges are recognised on an accruals basis. 1.3 Taxation Taxation is based on profits for the year as determined in accordance with the relevant tax legislation, together with adjustments to provisions for prior periods. Deferred taxation is provided on temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be sufficient taxable profits to utilise carried forward tax losses against which the reversal of underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the temporary differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on an undiscounted basis. 1.4 Investments in Group undertakings Shares in subsidiary undertakings are stated at cost less any provision for impairment. 1.5 Loans to Group undertakings Investments in subordinated debt issued by subsidiary companies are valued at amortised cost net of impairment for expected credit losses. Expected credit losses are calculated on a 12 month forward-looking basis where the debt has low credit risk or has had no significant increase in credit risk since the debt originated. 1.6 Financial investments Financial investments are designated at fair value through profit or loss on initial recognition. 1.7 Share-based payments The Group offers share award and option plans for certain key employees and a Save As You Earn scheme for all employees. The share-based payment plans operated by the Group are all equity-settled plans. Under IFRS 2, Share-based payment, where the Company, as the Parent Company, has the obligation to settle the options or awards of its equity instruments to employees of its subsidiary undertakings, and such share-based payments are accounted for as equity-settled in the Group financial statements, the Company records an increase in the investment in subsidiary undertakings for the value of the share options and awards granted with a corresponding credit entry recognised directly in equity. The value of the share options and awards granted is based upon the fair value of the options and awards at the grant date, the vesting period and the vesting conditions.
2 INVESTMENTS IN GROUP UNDERTAKINGS
Shares in Group undertakings £m
1,024.7
At 1 January 2021
5.8
Additions
(188.0)
Provision for impairment At 31 December 2021
842.5 942.5
At 1 January 2020
Additions
95.9
Provision for impairment At 31 December 2020
(13.7)
1,024.7
Details of the Company’s investments in the ordinary shares of subsidiary undertakings are given in note 35 to the Group financial statements. Additions to shares in Group undertakings relate to shares issued by Just Retirement Group Holdings Limited and the cost of share-based payments for services provided by employees of subsidiary undertakings to be satisfied by shares issued by the Company. Investments in Group undertakings are assessed annually to assess whether there is any indication of impairment. As at 31 December 2021, the market capitalisation of the Group was less than its net assets. The shortfall between the market capitalisation and net assets of the Group was an indicator of possible impairment of Just Group plc’s investments in its life company subsidiaries, JRL and PLACL.
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