Quilter plc - 2023 Full Year Results Part 2 | Company Announcement

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Consolidated statement of comprehensive income
For the year ended 31 December 2023
			£m
	Notes	Year ended 31 December 2023	Year ended 31 December 2022
Income
Fee income and other income from service activities		542	581
Investment return		4,075	(4,649)
Other income		9	28
Total income		4,626	(4,040)
Expenses
Change in investment contract liabilities	15	(3,313)	4,318
Fee and commission expenses, and other acquisition costs		(49)	(54)
Change in third-party interests in consolidated funds		(579)	438
Other operating and administrative expenses		(575)	(584)
Finance costs		(22)	(13)
Total expenses		(4,538)	4,105
Profit before tax		88	65
Tax (expense)/credit attributable to policyholder returns	7(a)	(76)	134
Profit before tax attributable to shareholder returns		12	199
Income tax (expense)/credit	7(a)	(46)	110
Less: tax expense/(credit) attributable to policyholder returns		76	(134)
Tax credit/(expense) attributable to shareholder returns		30	(24)
Profit after tax attributable to the owners of the Company		42	175

Total comprehensive income		42	175

Earnings per Ordinary Share
Basic earnings per Ordinary Share (pence)	8	3.1	12.2
Diluted earnings per Ordinary Share (pence)	8	3.1	12.0

Consolidated statement of financial position
At 31 December 2023

			£m
	Notes	31 December 2023	31 December 2022
Assets
Goodwill and intangible assets	9	372	413
Property, plant and equipment		91	112
Investment property		10	-
Investments in associates		2	1
Contract costs		16	10
Loans and advances		38	34
Financial investments	10	50,329	43,617
Deferred tax assets		91	94
Current tax receivable		33	10
Trade, other receivables and other assets		447	303
Derivative assets		57	40
Cash and cash equivalents	13	1,859	1,782
Assets held for sale		-	1
Total assets		53,345	46,417

Equity and liabilities
Equity
Ordinary Share capital	14	115	115
Ordinary Share premium reserve	14	58	58
Capital redemption reserve		346	346
Share-based payments reserve		42	41
Other reserves		-	(1)
Retained earnings		958	989
Total equity		1,519	1,548
Liabilities
Investment contract liabilities	15	43,396	38,186
Third-party interests in consolidated funds		7,444	5,843
Provisions	16	46	69
Deferred tax liabilities		64	24
Current tax payable		2	1
Borrowings and lease liabilities		279	290
Trade, other payables and other liabilities		570	436
Derivative liabilities		25	20
Total liabilities		51,826	44,869
Total equity and liabilities		53,345	46,417

Consolidated statement of changes in equity
For the year ended 31 December 2023


										£m
Year ended 31 December 2023		Ordinary Share capital	Ordinary Share premium reserve	B shares	Capital redemption reserve	Merger reserve	Share-based payments reserve	Other reserves	Retained earnings	Total share- holders' equity
Balance at 1 January 2023		115	58	-	346	-	41	(1)	989	1,548
Profit after tax attributable to the owners of the Company		-	-	-	-	-	-	-	42	42
Total comprehensive income		-	-	-	-	-	-	-	42	42
Dividends		-	-	-	-	-	-	-	(65)	(65)
Acquisition of own shares¹		-	-	-	-	-	-	-	(14)	(14)
Movement in own shares		-	-	-	-	-	-	-	(13)	(13)
Exchange rate movement (ZAR/GBP)²		-	-	-	-	-	-	-	2	2
Equity-settled share-based payment transactions		-	-	-	-	-	-	-	18	18
Aggregate tax effects of items recognised directly in equity		-	-	-	-	-	1	-	-	1
Total transactions with the owners of the Company		-	-	-	-	-	1	-	(72)	(71)
Transfer to retained earnings		-	-	-	-	-	-	1	(1)	-
Balance at 31 December 2023		115	58	-	346	-	42	-	958	1,519



										£m
Year ended 31 December 2022	Notes	Ordinary Share capital	Ordinary Share premium reserve	B shares	Capital redemption reserve	Merger reserve	Share-based payments reserve	Other reserves	Retained earnings	Total share- holders' equity
Balance at 1 January 2022		116	58	-	17	25	42	(1)	1,482	1,739
Profit after tax attributable to the owners of the Company		-	-	-	-	-	-	-	175	175
Total comprehensive income		-	-	-	-	-	-	-	175	175
Dividends		-	-	-	-	-	-	-	(78)	(78)
Ordinary Shares repurchased in the buyback programme³	14	(1)	-	-	1	-	-	-	-	-
Issue of B shares⁴	14	-	-	328	-	(25)	-	-	(303)	-
Redemption of B shares⁴	14	-	-	(328)	328	-	-	-	(328)	(328)
Exchange rate movement (ZAR/GBP)²		-	-	-	-	-	-	-	(4)	(4)
Movement in own shares		-	-	-	-	-	-	-	22	22
Equity-settled share-based payment transactions		-	-	-	-	-	1	-	23	24
Aggregate tax effects of items recognised directly in equity		-	-	-	-	-	(2)	-	-	(2)
Total transactions with the owners of the Company		(1)	-	-	329	(25)	(1)	-	(668)	(366)
Balance at 31 December 2022		115	58	-	346	-	41	(1)	989	1,548

			£m
	Notes	Year ended 31 December 2023	Year ended 31 December 2022
Cash flows from operating activities
Cash flows from operating activities		2,137	1,698
Taxation paid		(26)	(22)
Total net cash flows from operating activities	13(b)	2,111	1,676
Cash flows from investing activities
Net purchases and sales of financial investments		(1,908)	(1,494)
Purchase of property, plant and equipment		(1)	(3)
Proceeds from sale of property, plant and equipment held for sale		1	-
Acquisition of interests in subsidiaries¹		-	(5)
Increase in investment in associate		(1)	-
Total net cash flows from investing activities		(1,909)	(1,502)
Cash flows from financing activities
Dividends paid to the owners of the Company		(65)	(78)
Finance costs on borrowings		(18)	(9)
Payment of interest on lease liabilities		(3)	(3)
Payment of principal of lease liabilities		(9)	(11)
Quilter plc shares acquired under the Odd-lot Offer²		(14)	-
Quilter plc shares acquired for use within the Group's employee share scheme		(15)	-
Redemption of B shares³		-	(328)
Repurchase and cancellation of Ordinary Shares⁴		-	(28)
Exchange rate movements passed to shareholders⁵		2	(4)
Proceeds from the issue of subordinated debt		199	-
Subordinated debt repaid		(200)	-
Total net cash flows from financing activities		(123)	(461)
Net increase/(decrease) in cash and cash equivalents		79	(287)
Cash and cash equivalents at the beginning of the year		1,782	2,064
Effect of exchange rate changes on cash and cash equivalents		(2)	5
Cash and cash equivalents at the end of the year	13(a)	1,859	1,782

Adopted by the Group from	Amendments to standards
1 January 2023	Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates
1 January 2023	Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements - Disclosure of Accounting Policies
1 January 2023	Amendments to IAS 12 Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
1 January 2023	Amendments to IAS 12 Income Taxes - International Tax Reform - Pillar Two Model Rules

Quilter plc - 2023 Full Year Results Part 2

Statement of Directors' responsibilities

5(b)(iii): Finance costs

5(b)(iv): Customer remediation

5(b)(v): Voluntary customer repayments

5(b)(vi): Exchange rate movements (ZAR/GBP)

5(b)(vii): Policyholder tax adjustments

5(b)(viii): Other adjusting items

8: Earnings per share

8(a): Weighted average number of Ordinary Shares

8(b): Basic and diluted EPS (IFRS and adjusted profit)

12(d): Financial assets and liabilities measured at fair value, classified according to the fair value hierarchy

12(e): Level 3 fair value hierarchy disclosure

15: Investment contract liabilities

Tax

Complaints, disputes and regulations

18(a): Capital management

18(a)(i): Regulatory capital (unaudited)

18(b): Credit risk

Overall exposure to credit risk

Maximum exposure to credit risk

19: Related party transactions

20: Events after the reporting date

Companies

UK 100

Latest directors dealings

		£m
	Year ended 31 December 2023	Year ended 31 December 2022
Amortisation of acquired intangible assets	38	42
Impairment of acquired intangible assets¹	1	-
Total impact of acquisition and disposal-related accounting	39	42

								£m
Year ended 31 December 2023	Net mgmt. fees¹	Other revenue¹	Investment revenue¹	Total net revenue¹	Operating expenses¹	Adjusted profit before tax	Consol. of funds²	Total
Income
Fee income and other income from service activities	527	86	-	613	-	613	(71)	542
Investment return³	48	3,285	68	3,401	-	3,401	674	4,075
Other income	-	-	-	-	9	9	-	9
Total income	575	3,371	68	4,014	9	4,023	603	4,626
Expenses
Change in investment contract liabilities³	(25)	(3,282)	(6)	(3,313)	-	(3,313)	-	(3,313)
Fee and commission expenses, and other acquisition costs	(46)	-	-	(46)	-	(46)	(3)	(49)
Change in third-party interests in consolidated funds	-	-	-	-	-	-	(579)	(579)
Other operating and administrative expenses	(13)	(5)	-	(18)	(536)	(554)	(21)	(575)
Finance costs	-	-	-	-	(22)	(22)	-	(22)
Total expenses	(84)	(3,287)	(6)	(3,377)	(558)	(3,935)	(603)	(4,538)
Tax expense attributable to policyholder returns	(76)	-	-	(76)	-	(76)	-	(76)
Profit before tax attributable to shareholder returns	415	84	62	561	(549)	12	-	12
Adjusting items:
Impact of acquisition and disposal-related accounting	-	-	-	-	39	39
Business transformation costs	-	-	-	-	28	28
Finance costs	-	-	-	-	19	19
Customer remediation	-	-	-	-	6	6
Exchange rate movements (ZAR/GBP)	-	2	-	2	-	2
Policyholder tax adjustments	62	-	-	62	-	62
Other adjusting items	-	-	-	-	(1)	(1)
Adjusting items	62	2	-	64	91	155
Adjusted profit before tax	477	86	62	625	(458)	167

						£m
		Operating segments
	Notes	Affluent	High Net Worth	Head Office	Consolidation adjustments¹	Total
Income
Premium-based fees		66	20	-	-	86
Fund-based fees		336	172	-	(71)	437
Fixed fees		1	-	-	-	1
Other fee and commission income		18	-	-	-	18
Fee income and other income from service activities		421	192	-	(71)	542
Investment return²		3,361	19	28	667	4,075
Other income		88	1	-	(80)	9
Segment income		3,870	212	28	516	4,626
Expenses
Change in investment contract liabilities²		(3,313)	-	-	-	(3,313)
Fee and commission expenses, and other acquisition costs		(47)	-	-	(2)	(49)
Change in third-party interests in consolidated funds		-	-	-	(579)	(579)
Other operating and administrative expenses		(387)	(205)	(41)	58	(575)
Finance costs		(3)	-	(26)	7	(22)
Segment expenses		(3,750)	(205)	(67)	(516)	(4,538)
Profit/(loss) before tax		120	7	(39)	-	88
Tax expense attributable to policyholder returns		(76)	-	-	-	(76)
Profit/(loss) before tax attributable to shareholder returns		44	7	(39)	-	12
Adjusting items:
Impact of acquisition and disposal-related accounting	5(b)(i)	7	32	-	-	39
Business transformation costs	5(b)(ii)	5	3	20	-	28
Finance costs	5(b)(iii)	-	-	19	-	19
Customer remediation	5(b)(iv)	6	-	-	-	6
Exchange rate movements (ZAR/GBP)	5(b)(vi)	-	-	2	-	2
Policyholder tax adjustments	5(b)(vii)	62	-	-	-	62
Other adjusting items	5(b)(viii)	-	(1)	-	-	(1)
Adjusting items before tax		80	34	41	-	155
Adjusted profit before tax		124	41	2	-	167

		£m
	Year ended 31 December 2023	Year ended 31 December 2022
Current tax
United Kingdom	2	12
Overseas tax	-	1
Total current tax charge	2	13
Deferred tax
Origination and reversal of temporary differences	52	(120)
Effect on deferred tax of changes in tax rates	(3)	(1)
Adjustments to deferred tax in respect of prior years	(5)	(2)
Total deferred tax charge/(credit)	44	(123)
Total tax charged/(credited)	46	(110)

Attributable to policyholder returns	76	(134)
Attributable to shareholder returns	(30)	24
Total tax charged/(credited)	46	(110)

			£m
	Note	Year ended 31 December 2023	Year ended 31 December 2022
Income tax expense/(credit)¹		46	(110)
Tax on adjusting items
Impact of acquisition and disposal-related accounting		9	8
Business transformation costs		8	5
Finance costs		4	2
Exchange rate movements (ZAR/GBP)		1	(1)
Tax adjusting items
Policyholder tax adjustments	5(b)(vii)	(62)	138
Other shareholder tax adjustments²		46	(19)
Tax on adjusting items		6	133
Less: tax attributable to policyholder returns within adjusted profit³		(14)	(4)
Tax charged on total adjusted profit		38	19

				Pence
	Framework	Notes	Year ended 31 December 2023	Year ended 31 December 2022
Basic earnings per share	IFRS	8(b)	3.1	12.2
Diluted basic earnings per share	IFRS	8(b)	3.1	12.0
Adjusted basic earnings per share	Group policy	8(b)	9.6	8.0
Adjusted diluted earnings per share	Group policy	8(b)	9.4	7.9
Headline basic earnings per share (net of tax)	JSE Listing Requirements	8(c)	3.2	12.6
Headline diluted earnings per share (net of tax)	JSE Listing Requirements	8(c)	3.1	12.4

		Million
	Year ended 31 December 2023	Year ended 31 December 2022
Weighted average number of Ordinary Shares	1,404	1,496
Own shares including those held in consolidated funds and employee benefit trusts	(54)	(58)
Basic weighted average number of Ordinary Shares	1,350	1,438
Adjustment for dilutive share awards and options¹	24	26
Diluted weighted average number of Ordinary Shares	1,374	1,464

			£m
	Notes	Year ended 31 December 2023	Year ended 31 December 2022
Profit after tax		42	175
Total adjusting items before tax	5(a)	155	(65)
Tax on adjusting items	7(c)	(6)	(133)
Less: Policyholder tax adjustments	7(c)	(62)	138
Adjusted profit after tax		129	115

			Pence
	Post-tax profit measure used	Year ended 31 December 2023	Year ended 31 December 2022
Basic EPS	IFRS profit	3.1	12.2
Diluted EPS	IFRS profit	3.1	12.0
Adjusted basic EPS	Adjusted profit	9.6	8.0
Adjusted diluted EPS	Adjusted profit	9.4	7.9

	+	+		£m
	Year ended 31 December 2023		Year ended 31 December 2022
	Gross	Net of tax	Gross¹	Net of tax¹
Profit		42		175
Adjusted for:
- add back of impairment loss on property, plant and equipment	-	-	7	6
- add back of impairment loss on intangible assets	1	1	-	-
Headline earnings		43		181
Headline basic EPS (pence)		3.2		12.6
Headline diluted EPS (pence)		3.1		12.4

	Affluent	High Net Worth
Reduction in forecast cash flows	27%	61%
Percentage point increase in the discount rate	9%	25%

Description of hierarchy	Types of instruments classified in the respective levels
Level 1 - 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 - 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 derivatives, certain privately placed debt instruments and third-party interests in consolidated funds which meet the definition of Level 2 financial instruments.
Level 3 - 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.

		£m
	31 December 2023¹	31 December 2022²
Own funds	1,540	1,451
Solvency capital requirement	568	631
Solvency II surplus	972	820
Solvency II coverage ratio	271%	230%

														£m
		Credit rating relating to cash and cash equivalents
31 December 2023		AAA		AA		A		B		<BBB		Not rated¹		Carrying value
Cash at amortised cost, subject to 12-month ECL		-		63		381		-		-		324		768
Money market funds at FVTPL		1,091		-		-		-		-		-		1,091
Total cash and cash equivalents		1,091		63		381		-		-		324		1,859

													£m
	Credit rating relating to cash and cash equivalents
31 December 2022	AAA		AA		A		B		<BBB		Not rated¹		Carrying value
Cash at amortised cost, subject to 12-month ECL	-		13		388		5		-		264		670
Money market funds at FVTPL	1,112		-		-		-		-		-		1,112
Total cash and cash equivalents	1,112		13		388		5		-		264		1,782

				£m
	Goodwill	Software development costs	Other intangible assets	Total
Gross amount
1 January 2022	306	30	425	761
31 December 2022	306	30	425	761
Disposals¹	-	(21)	-	(21)
31 December 2023	306	9	425	740

Accumulated amortisation and impairment losses
1 January 2022	-	(22)	(282)	(304)
Amortisation charge for the year	-	(2)	(42)	(44)
31 December 2022	-	(24)	(324)	(348)
Amortisation charge for the year	-	(2)	(38)	(40)
Disposals¹	-	21	-	21
Impairment of other intangibles	-	-	(1)	(1)
31 December 2023	-	(5)	(363)	(368)

Carrying amount
31 December 2022	306	6	101	413
31 December 2023	306	4	62	372

	31 December 2023	31 December 2022	Average estimated useful life	Average Period remaining
	£m	£m
Net carrying value
Distribution channels - Quilter Financial Planning	2	4	8 years	1 year
Customer relationships
Quilter Cheviot	32	59	10 years	1 year
Quilter Financial Planning	17	22	8 years	3 years
Quilter Cheviot Financial Planning¹	10	14	8 years	3 years
Other	1	2	7 years	< 1 year
Total other intangible assets	62	101

		£m
	31 December 2023	31 December 2022
Goodwill (net carrying amount)
Affluent	223	223
High Net Worth	83	83
Total goodwill	306	306

		£m
	31 December 2023	31 December 2022
Government and government-guaranteed securities	202	225
Other debt securities, preference shares and debentures	2,175	1,609
Equity securities	8,488	6,225
Pooled investments	39,462	35,557
Short-term funds and securities treated as investments	1	1
Other	1	-
Total financial investments	50,329	43,617

Recoverable within 12 months	50,329	43,617
Total financial investments	50,329	43,617

31 December 2023
					£m
Measurement basis	Fair value
	Mandatorily at FVTPL	Designated at FVTPL	Amortised cost	Non-financial assets and liabilities	Total
Assets
Loans and advances	-	-	38	-	38
Financial investments	50,329	-	-	-	50,329
Trade, other receivables and other assets	-	-	404	43	447
Derivative assets	57	-	-	-	57
Cash and cash equivalents	1,091	-	768	-	1,859
Total assets that include financial instruments	51,477	-	1,210	43	52,730
Total other non-financial assets	-	-	-	615	615
Total assets	51,477	-	1,210	658	53,345

Liabilities
Investment contract liabilities	-	43,396	-	-	43,396
Third-party interests in consolidated funds	7,444	-	-	-	7,444
Borrowings and lease liabilities	-	-	279	-	279
Trade, other payables and other liabilities	1	-	484	85	570
Derivative liabilities	25	-	-	-	25
Total liabilities that include financial instruments	7,470	43,396	763	85	51,714
Total other non-financial liabilities	-	-	-	112	112
Total liabilities	7,470	43,396	763	197	51,826

				£m
31 December 2023	Level 1	Level 2	Level 3	Total
Financial investments	41,691	8,605	33	50,329
Cash and cash equivalents	1,091	-	-	1,091
Derivative assets	-	57	-	57
Total financial assets measured at fair value through profit or loss	42,782	8,662	33	51,477

Third-party interests in consolidated funds	-	7,444	-	7,444
Other liabilities	-	1	-	1
Derivative liabilities	-	25	-	25
Investment contract liabilities	43,372	-	24	43,396
Total financial liabilities measured at fair value through profit or loss	43,372	7,470	24	50,866

				£m
31 December 2022	Level 1	Level 2	Level 3	Total
Financial investments	37,340	6,248	29	43,617
Cash and cash equivalents	1,112	-	-	1,112
Derivative assets	-	40	-	40
Total financial assets measured at fair value through profit or loss	38,452	6,288	29	44,769

Third-party interests in consolidated funds	-	5,843	-	5,843
Derivative liabilities	-	20	-	20
Investment contract liabilities	38,161	-	25	38,186
Total financial liabilities measured at fair value through profit or loss	38,161	5,863	25	44,049

		£m
	31 December 2023	31 December 2022
At beginning of the year	29	27
Fair value losses charged to profit or loss¹	(1)	(5)
Sales	(1)	(2)
Transfers in	27	125
Transfers out	(21)	(116)
Total Level 3 financial assets at the end of the year	33	29
Unrealised fair value gains/(losses) recognised in profit or loss relating to assets held at the year end	2	(9)

		£m
	31 December 2023	31 December 2022
Cash at bank	444	406
Money market funds	1,091	1,112
Cash and cash equivalents in consolidated funds	324	264
Total cash and cash equivalents per statement of cash flows	1,859	1,782

		£m	£m
	Number of Ordinary Shares	Nominal value of Ordinary Shares	Ordinary Share premium
At 1 January 2022	1,655,827,217	116	58
Shares cancelled through share buyback programme	(17,704,132)	(1)	-
Share Consolidation (including shares cancelled)	(234,017,587)	-	-
At 31 December 2022	1,404,105,498	115	58
At 31 December 2023	1,404,105,498	115	58

		£m
	2023	2022
Carrying amount at 1 January	38,186	41,071
Fair value movements	2,528	(4,878)
Investment income	785	560
Movements arising from investment return	3,313	(4,318)
Contributions received	5,358	4,408
Withdrawals and surrenders	(3,212)	(2,759)
Claims and benefits	(245)	(219)
Other movements	(4)	3
Change in liability	5,210	(2,885)
Investment contract liabilities at end of the year	43,396	38,186

					£m
Year ended 31 December 2023	Compensation provisions	Sale of subsidiaries provision	Property provisions	Clawback and other provisions	Total
Balance at beginning of the year	23	15	12	19	69
Charge to profit or loss	17	-	-	6	23
Used during the year	(14)	(12)	(2)	(8)	(36)
Unused amounts reversed	(9)	-	-	(1)	(10)
Balance at 31 December 2023	17	3	10	16	46

					£m
31 December 2022	Compensation provisions	Sale of subsidiaries provision	Property provisions	Clawback and other provisions	Total
Balance at beginning of the year	41	22	9	21	93
Charge to profit or loss	22	-	4	3	29
Used during the year	(28)	(7)	(1)	(2)	(38)
Unused amounts reversed	(12)	-	-	(4)	(16)
Reclassification within the statement of financial position¹	-	-	-	1	1
Balance at 31 December 2022	23	15	12	19	69

		£m
Group own funds	31 December 2023	31 December 2022
Tier 1¹	1,336	1,249
Tier 2²	204	202
Total Group Solvency II own funds	1,540	1,451

		£m
	31 December 2023	31 December 2022
Total external borrowings of the Company	198	200
Less: cash and cash equivalents of the Company	(110)	(126)
Total net external borrowings of the Company	88	74
Total shareholders' equity of the Group	1,519	1,548
Tier 2 bond	198	200
Total Group equity (including Tier 2 bond)	1,717	1,748
Ratio of Company net external borrowings to Group equity	0.051	0.042

Impairment allowance	£m
Balance at 1 January 2022	(1.2)
Change due to change in counterparty balance	0.1
31 December 2022	(1.1)
Change due to change in counterparty balance	(0.4)
Additional impairment in the year	(1.5)
31 December 2023	(3.0)

		£m
Impact on profit after tax and net assets	31 December 2023	31 December 2022
Impact of 10% increase in equity	26	30
Impact of 10% decrease in equity	(26)	(30)

		£m
Impact on profit after tax and net assets	31 December 2023	31 December 2022 (Restated)¹
Impact of 1% increase in interest rates	9	10
Impact of 1% decrease in interest rates	(9)	(10)