RNS Number : 9963T


23 March 2023


23 March 2023

M&G plc

Annual Report and Accounts 2022

Following the release by M&G plc (the "Company") on 9 March 2023 of the Company's 2022 Full Year Results Announcement for the year ended 31 December 2022, the Company announces that it has today issued the 2022 Annual Report and Accounts ("Annual Financial Report").

The document is available to view on the Company's website and, in accordance with Listing Rule 9.6.1, a copy has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

Printed copies of the Annual Financial Report are expected to be mailed to shareholders on or around 13 April 2023, together with the Company's Notice of Annual General Meeting, in line with shareholder communication preferences.


 Alan Porter, Group General Counsel and 
  Company Secretary                                  +44 (0)20 8162 4064 
 George Bayer, Deputy Company Secretary              +44 (0)20 8162 2655 
 Jonathan Miller, Head of External Communications    +44 (0)20 8162 1699 

Information required under the Disclosure & Transparency Rules ("DTR")

The following information is extracted from the M&G plc Annual Report 2022 (page references are to pages in the Annual Report) and should be read in conjunction with M&G plc's Full Year Results announcement issued on 9 March 2023. Together they constitute the material required by DTR 6.3.5(1) to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the M&G plc Annual Report 2022 in full.


Classification: 1.1 Annual Financial Report

Principal risks and uncertainties


Strategic Priorities

1. Maintain our financial strength

2. Simplify our business

3. Deliver profitable growth

1 Business environment and market forces 
                                                                                           ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
Changing client               Our annual strategic          Macroeconomic headwinds        1, 2,           Increased 
preferences, together         planning process               are expected to continue       3 
with economic and             is overseen by the             during 2023 including 
political conditions,         Risk function and              inflationary pressures, 
could adversely impact        the Board, and results         rising interest rates, 
our performance against       in our approved strategy.      UK political instability, 
our strategy.                                                heightened recessionary 
                              The process of strategy        fears in Europe and 
We operate in highly          approval considers             US and geopolitical 
competitive markets,          the potential impact           instability. These 
while our client              of the wider business          headwinds may have 
needs and expectations        environment and economy.       an impact on investment 
are changing rapidly.         Throughout the year,           performance and strategy. 
Economic factors,             we monitor and report 
including heightened          on the delivery of             The market continues 
levels of inflation,          this plan.                     to evolve with a 
may impact product                                           convergence of asset 
demand and our ability        The new M&G plc Group          management and wealth, 
to generate an appropriate    Chief Executive Officer        and changes to the 
return.                       commenced in role              value chain. There 
                              during 2022, with              continues to be competitive 
Increased geopolitical        changes to M&G plc             pressure on fees 
risks and conflicts,          Executive Committee            and an acceleration 
and policy uncertainty,       and the organisational         of pension de-risking. 
may impact our products,      structure made shortly 
investments and operating     thereafter. This               Prioritisation of 
model.                        included decentralisation      investment and the 
                              and increased accountability   successful delivery 
Our key savings               for delivery of the            of initiatives is 
proposition, PruFund,         Business Plan for              required to achieve 
accounts for a significant    the CEOs of the Retail         our Business Plan. 
proportion of our             and Savings and Asset 
inflows. We are also          Management business 
reliant on our intermediated  units. 
channel for savings 
solutions sales. 
This heightens our 
exposure to changing 
economic conditions 
and client preferences. 
Our success depends 
upon our capacity 
to anticipate and 
respond to these 
external influences. 
============================  ============================  =============================  ==============  =========== 
2 Sustainability and ESG 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities(1)   last year 
============================  ============================  =============================  ==============  =========== 
A failure to address          Recognising the complex       The importance of              1, 2,           Neutral 
 and embed sustainability      range of risks that          robust ESG risk management      3 
 considerations within         sit under ESG, we            and controls will 
 our strategy, products,       have developed a             continue to grow 
 operating model,              specific ESG risk            as the industry further 
 communication approach        management framework         develops its approach 
 and our internal/             to further enhance           to ESG, addressing 
 external changing             our approach to the          issues such as the 
 landscape could adversely     identification, assessment   quality of ESG data, 
 impact on our financial       and management of            greenwashing, enhancement 
 performance, reputation       ESG risks, based             of climate change 
 and future growth.            on the three lines           methodologies and 
 Consequently we recognise     of defence model.            implementation of 
 the risk and opportunity      The framework is             regulatory requirements. 
 of sustainability             supported by the 
 in our business and           ESG Risk Policy,             We anticipate the 
 the companies we              which articulates            external ESG risk 
 invest in.                    our ESG risk appetite        environment to continue 
                               and sets out key             to develop, with 
 We consider and               business requirements.       climate physical 
 act upon a broad                                           and transition risks 
 range of issues including     The ESG risk management      accelerating, biodiversity 
 those concerning              framework consists           emerging and social 
 greenwashing, climate         of five core components:     issues continuing 
 impact, diversity             ESG risk culture;            to be important. 
 and inclusion, and            identifying and assessing 
 corporate governance.         ESG risk; managing           As ESG approaches 
                               and reporting effectively    continue to mature, 
 ESG Risk is considered        on ESG risk; embedding       we expect enhanced 
 in three broad dimensions:    risk governance;             scrutiny from various 
 Inside out - how              and protecting reputation.   stakeholder groups, 
 our business impacts                                       including clients, 
 on the planet and             Consideration of             investors and regulators. 
 society, as we seek           ESG Risk is built            Associated with increased 
 to create and drive           into the decision-making     scrutiny is the ability 
 value for our clients;        processes and a requirement  to manage greenwashing 
 Outside in - the              of key strategic             risk. 
 impact of ESG factors         board risk assessment 
 on our organisation,          papers and regular           Greenwashing has 
 ensuring that any             reporting.                   the potential for 
 "real time" response                                       long-term impact 
 aligns to our positioning     Climate change risk          upon reputational 
 on ESG; Reputation            is integrated into           risk if expectations 
 - Our ability to              our scenario analysis        and deliverables 
 meet a range of key           process with both            are not met. 
 stakeholder expectations      top down and bottom 
 on sustainability             up consideration             Sustainability disclosures, 
 and ESG issues, whilst        over a range of time         driven by regulatory 
 reinforcing our brand         horizons.                    reporting requirements, 
 values of care and                                         will continue to 
 integrity.                                                 improve transparency, 
                                                            consistency and 
                                                            We will implement 
                                                            enhancements to our 
                                                            reporting capabilities 
                                                            to meet developing 
                                                            reporting requirements. 
============================  ============================  =============================  ==============  =========== 
3 Investment risk 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We agree investment           Our fund managers             Strong investment              1, 3            Increased 
 objectives and risk           are accountable for           performance underpins 
 profiles of our funds         the performance of            the success of our 
 and segregated mandates       the funds they manage,        business. Absolute 
 with our clients.             and management of             performance was impacted 
                               the risks to the              by headwinds of rising 
 A failure to deliver          funds.                        interest rates, inflation 
 against these objectives                                    and recessionary 
 (including sustained          Independent Investment        fears during 2022 
 underperformance              Risk and Performance          with these set to 
 of funds), to maintain        teams monitor and             continue in 2023. 
 risk profiles that            oversee fund performance,     Sustainable strategies 
 are consistent with           liquidity and risks,          have also faced headwinds 
 our clients' expectations,    reporting to the              as they are underweight 
 or to ensure that             Chief Risk and Compliance     in energy and materials 
 fund liquidity profiles       Officer.                      sectors which have 
 are appropriate for                                         performed well recently. 
 expected redemptions          Such activities feed 
 may all lead to poor          into established              Underperformance 
 client outcomes and           oversight and escalation      is expected to be 
 result in                     forums to identify,           recovered over the 
 fund outflows.                measure and oversee           longer term as these 
                               investment performance,       trends are expected 
 If these risks materialise    investment risk and           to be cyclical in 
 for our larger funds          fund liquidity risks.         nature. 
 or a range of funds, 
 it may impact our 
 profitability, reputation 
 and growth plans. 
============================  ============================  =============================  ==============  =========== 
4 Credit 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We are exposed to             Our Credit Risk Policy        Our credit risk exposure       1, 3            Increased 
 the risk that a party        sets standards for             is expected to reduce 
 to a financial instrument,   assessing,                     over time as our 
 banking transaction          measuring and managing         annuity business 
 or reinsurance contract      credit risk, monitored         runs off. 
 causes a financial           by a dedicated, independent 
 loss to us by failing        team.                          In the near term, 
 to discharge an obligation.                                 threats to credit 
                              We set and regularly           sectors arise from 
 For invested assets,         review limits for              the deteriorating 
 this relates to the          individual counterparties,     economic environment. 
 risk of an issuer            issuers and ratings,           We continue to monitor 
 being unable to meet         and monitor exposures          and review our credit 
 their obligations,           against these limits.          risk exposures, including 
 while for trading                                           assessments of the 
 or banking activities        Our policy is to               impact (including 
 this relates to the          undertake transactions         any indirect/second 
 risk that the counterparty   with counterparties            order impacts) for 
 to any contract the          and invest in instruments      the shareholder annuity 
 business enters into         of high quality.               fund of a potential 
 is unable to meet            We have collateral             downgrade of the 
 their obligations.           arrangements for               UK government credit 
                              derivatives, secured           rating. However, 
 Our solvency is              lending, reverse               trading over the 
 also exposed to changes      repurchase agreements          last decade has led 
 in the value of invested     and reinsurance                to a significant 
 credit assets arising        transactions.                  increase in the proportion 
 from credit spread                                          of secured assets 
 widening, or credit                                         and a defensive and 
 rating downgrades.                                          diversified credit 
============================  ============================  =============================  ==============  =========== 
5 Market 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
Our profitability             Market risk appetite          Our market risk exposure       1, 3            Neutral 
 and solvency are              is set and monitored          is expected to remain 
 sensitive to market           to limit our exposure         broadly level over 
 fluctuations.                 to key market risks,          the Business Plan 
                               and we have prescribed        period, primarily 
 Significant changes           limits on the seed            driven by PruFund 
 in the level or volatility    capital provided              new business sales 
 of prices in equity,          for new funds.                offset by the runoff 
 property or bond                                            of existing in-force 
 markets could have            Where appropriate,            business. 2022 was 
 material adverse              and subject to risk           a challenging year 
 effects on our revenues       limits and procedures,        for most global equity 
 and returns.                  we use derivatives            and fixed income 
                               for risk reduction            markets. 
 Exchange rate movements       - to hedge equities, 
 could impact fee              interest rates and            Persistent inflationary 
 and investment income         currency risks, for           pressures, recessionary 
 denominated in foreign        example.                      fears across Europe, 
 currencies.                                                 central bank tightening 
                               We review regularly           (through increase 
 Material falls in             our hedging and investment    in interest rates 
 interest rates may            strategies, including         and unwinding of 
 increase the amount           asset-liability matching,     quantitative easing) 
 we need to set aside          informed by stress            and rising geopolitical 
 to meet our future            testing.                      risk continue to 
 obligations.                                                drive negative market 
                               We have procedures            sentiment. 
                               to respond to significant 
                               market events and             Surging energy prices 
                               disruptions, bringing         and supply chain 
                               together colleagues           disruptions driven 
                               across M&G to provide         by China's zero Covid 
                               an enhanced monitoring        policy continue to 
                               and decision-making           adversely impact 
                               capability.                   markets, posing a 
                                                             longer-term risk 
                                                             to market stability, 
                                                             although gas prices 
                                                             have started to reduce 
                                                             in late 2022/ early 
                                                             2023 and China has 
                                                             relaxed some Covid 
============================  ============================  =============================  ==============  =========== 
6 Corporate liquidity 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We must carefully             Risk appetite is              We expect the nature           1               Neutral 
 manage the risk that          set such that we              of our exposure to 
 we have insufficient          maintain adequate             liquidity risk to 
 cash resources to             liquid resources              remain materially 
 meet our obligations          and our liquidity             unchanged in the 
 to policyholders              position is regularly         short term. We maintain 
 and creditors as              monitored and stressed.       strong liquidity 
 they fall due.                We have detailed              buffers and continue 
                               liquidity contingency         to investigate options 
 This includes ensuring        funding plans in              and management actions 
 each part of our              place to manage a             to further strengthen 
 business and M&G              liquidity crisis.             the liquidity position. 
 plc as a whole has 
 sufficient resources          Liquidity, cash and 
 to cover outgoing             collateral is managed 
 cash flows, under             for the Group by 
 a range of severe             Prudential Capital, 
 but plausible scenarios.      which holds liquid, 
                               high grade assets 
                               and has access to 
                               external funding. 
============================  ============================  =============================  ==============  =========== 
7 Insurance 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We are exposed to             We conduct annual             Our exposure to insurance      1, 3            Neutral 
the risk of loss               reviews of longevity          risk is expected 
or of adverse change           assumptions, supported        to reduce over the 
in the financial               by detailed assessments       near term mainly 
situation of our               of actual mortality           driven by a projected 
business, or that              experience and have           reduction in longevity 
of our clients, resulting      a team of specialists         risk, as the closed 
from changes in the            undertaking longevity         non-profit annuity 
level, trend, or               research.                     book runs-off. 
volatility of mortality; 
longevity; morbidity;          We perform regular            Expense risk is also 
persistency; expense           stress and scenario           projected to reduce, 
and margin pricing             testing to understand         driven by the run-off 
experience.                    the size of insurance         of the non-profit 
                               risk exposures.               annuity business 
We make assumptions                                          partially offset 
regarding the life             We have undertaken            by increases in PruFund 
expectancy (longevity)         longevity risk transfer       new business. 
of our clients when            transactions, where 
determining the amount         attractive financial 
that should be set             terms are available 
aside to pay future            from suitable market 
benefits and expenses.         participants. 
Unexpected changes 
in the life expectancy 
of our clients could 
have a material adverse 
impact on both profitability 
and solvency. This 
risk mainly arises 
from our large annuity 
book and, although 
we currently do not 
write new annuity 
business in the open 
market, the size 
of the back-book 
remains significant. 
============================  ============================  =============================  ==============  =========== 
8 Operational 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
A material failure            Our Operational Risk          Positive progress              1, 2            Neutral 
 or operational disruption     Policy defines our            was made across the 
 in the processes              approach to identifying,      business during 2022 
 and controls supporting       assessing, managing           in building on the 
 our activities, that          and reporting operational     risk and control 
 of our third-party            risks and associated          framework foundations 
 suppliers or of our           controls across the           previously put in 
 technology could              business - including          place. We are focused 
 result in poor client         IT, data and outsourcing      on fully embedding 
 outcomes, reputational        arrangements.                 the framework and 
 damage, increased                                           reaching operational 
 costs and regulatory          We apply business             maturity. 
 censure.                      continuity and crisis 
                               management requirements       The increased cyber-security 
 We are highly dependent       across M&G. Our key           threat arising from 
 on technology and             business services             geopolitical tensions 
 the loss or sustained         and the critical              and the continually 
 unavailability of             shared services on            evolving external 
 key hardware or software,     which they rely need          cyber-threat landscape, 
 inadequate information        an enhanced approach          technological disruption 
 security arrangements         to avoid causing              and data loss remains 
 and ineffective use           intolerable harm.             a significant threat 
 of digital solutions          We achieve this through       both to our business 
 could impact our              our risk-based approach,      and that of our third 
 ability to operate            which considers the           party suppliers. 
 effectively.                  harm a service could          Our sustainable secure 
                               cause if disrupted.           programme continues 
 Additionally, serious                                       to improve the control 
 failings in the delivery,     We created our Technology     environment by delivering 
 or persistent under           Key Control framework         additional security 
 performance of third-party    in line with recognised       capabilities. 
 supplier arrangements,        best practice, including 
 could impact the              the Information Security 
 delivery of services          Forums Standard of 
 to our clients.               Good Practice and 
                               Control Objectives 
                               for Information and 
                               Related Technologies 
                               Governance and Management 
                               We have enhanced 
                               oversight and risk 
                               management of third 
                               parties across M&G, 
                               including our approach 
                               to selection, contracting 
                               and onboarding, management 
                               and monitoring, and 
                               termination and exiting. 
============================  ============================  =============================  ==============  =========== 
9 Change 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We have a number              Project governance            Our strategy and               1, 2,           Neutral 
 of significant change        is in place (including         the business plan              3 
 programmes underway          oversight) with reporting      is underpinned by 
 to deliver our strategy      and escalation of              a number of change 
 for growth, key financial    risks to management            activities which 
 and non-financial            and the Board.                 are expected to drive 
 benefits (including                                         fund flows and efficiencies. 
 cost savings, improved       Our Efficiency Board           As we simplify the 
 client experiences,          is responsible for             way we operate, our 
 greater resilience           prioritisation decisions,      change activities 
 and strengthening            ensuring that the              will strengthen critical 
 our control environment)     activities that maximise       capabilities to streamline 
 and regulatory change.       our ability to achieve         how we serve our 
 Failure to deliver           the Business Plan,             clients. Careful 
 these programmes             key regulatory items           prioritisation of 
 within timelines,            and growth activity            investment spend 
 scope and cost with          are delivered and              and delivery within 
 our available people         funded appropriately.          expected timescales 
 and skill-set capacity                                      is required to achieve 
 may impact our business      We employ a suite              our Business Plan 
 model and ability            of metrics to monitor          outcomes. 
 to deliver against           and report on the 
 our Business Plan            delivery, costs and 
 and strategy.                benefits of our 
                              programmes. We conduct 
                              regular deep-dive 
                              assessments of 
                              programmes, individually 
                              and collectively. 
============================  ============================  =============================  ==============  =========== 
10 People 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
The success of our            Our HR framework              We remain focused              2, 3            Neutral 
 operations is highly          is designed to align          on culture and work 
 dependent on our              colleague objectives          on our culture programme 
 ability to attract,           and remuneration              continues with our 
 retain and develop            to our business strategy      core foundations 
 highly qualified              and culture.                  of having a safe 
 professional people                                         and respectful organisation. 
 with the right mix            It includes policies 
 of skills and behaviours,     and standards for             Colleague responses 
 to support our positive       diversity and inclusion,      to our regular surveys 
 culture and growth.           employee relations,           reflected their belief 
                               remuneration, talent,         that people are treated 
 As a large and listed         resourcing, performance       with respect and 
 public company, and           and learning.                 dignity in our organisation, 
 as we continue to                                           and that they feel 
 re-focus our strategy,        Our management and            it is safe to speak 
 our people risk and           Board receive regular         their mind. 
 associated reputational       reporting on colleague 
 impact is heightened          issues and developments,      Our surveys have 
 in areas including            for example: succession       also highlighted 
 our pay practices,            plans for critical            some uncertainty 
 workloads and morale,         talent; management            amongst colleagues, 
 the conduct of colleagues     of industrial relations;      this being predominantly 
 or groups of colleagues,      pay; culture and              driven by the cost 
 and industrial relations      diversity.                    of living crisis. 
 (our own and that                                           Our 2023 annual salary 
 of key third-party            We conduct regular            review focused on 
 providers).                   surveys to better             giving a greater 
                               understand our colleagues'    percentage increase 
                               views on our business         to staff at the lower 
                               and culture. Findings         end of the salary 
                               from these surveys            scale and a cost 
                               drive actions that            of living support 
                               improve our colleagues'       payment was also 
                               experience.                   made to UK Colleagues 
                                                             during 2022 with 
                                                             a commitment for 
                                                             a further payment 
                                                             to be made in 2023. 
============================  ============================  =============================  ==============  =========== 
11 Regulatory compliance 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
We operate in highly          Accountability for            In December 2022,              1, 2,           Neutral 
regulated markets              compliance with regulatory    the Chancellor of              3 
and interact with              and legal requirements        the Exchequer announced 
regulators across              sits with our senior          a set of reforms 
the globe, in an               management. Our Compliance    to drive growth and 
environment where              function supports             competitiveness in 
the nature and focus           our businesses by             the financial services 
of regulation and              providing guidance            sector. These 'Edinburgh 
laws remain fluid.             to, and oversight             Reforms' will increase 
                               of, the business              the volume and pace 
There are a large              in relation to regulatory     of regulatory change 
number of national             compliance, Financial         that will be introduced 
and international              Crime Compliance              in the coming years 
regulatory initiatives         and conflicts of              and are also likely 
in progress, with              interest, and carries         to accelerate the 
a focus on solvency            out routine monitoring        UK's regulatory divergence 
and capital standards,         and deep-dive activities      from the EU. 
financial crime,               to assess compliance 
conduct of business            with regulations              Aligned to our strategic 
and systemic risks.            and legislation.              objectives, ESG and 
                                                             international expansion 
There are wide-ranging         National and global           will also be key 
consequences of                regulatory developments       areas of focus. We 
non-compliance                 are monitored and             have activities underway 
or failing to adequately       form part of our              addressing these 
consider regulatory            engagement with government    priorities and are 
expectations, standards        policy teams and              engaged with our 
or principles, including       regulators, which             regulators on delivery 
client detriment,              includes updates              in line with their 
reputational damage,           on our responses              expectations. 
fines and restrictions         to the changes. 
on operations or 
============================  ============================  =============================  ==============  =========== 
12 Reputational 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
Our reputation is             Our Reputational              We have a relatively           1, 2,           Neutral 
the sum of our stakeholders'   Risk Management framework    new corporate identity,         3 
perceptions, which             and dedicated Reputational   with a newly appointed 
are shaped by the              Risk team monitor            Group Chief Executive 
nature of their expectations   and report on reputational   Officer and so we 
and our ability to             risks, using a suite         are subject to significant 
meet them. There               of metrics to monitor        scrutiny from different 
is a risk that through         stakeholder groups.          stakeholders. 
our activities, behaviours 
or communications,             We have embedded             Key to managing evolving 
we fail to meet stakeholder    Reputational Risk            stakeholder expectations 
expectations and               Champions throughout         is the need to address 
adversely impact               our business. They           the material aspects 
trust and reputation           perform an active            of sustainability 
in M&G or our brands.          role in identifying          risk, in addition 
                               and monitoring key           to our current sustainability 
Failure to effectively         reputational risks           priorities - climate 
manage reputational            and drivers.                 change and diversity 
risk could impact                                           and inclusion. 
our revenues and               They also support 
cost base, our ability         our businesses by 
to attract and retain          creating processes 
the best staff and             that include full 
potential regulatory           consideration of 
intervention or action.        reputational risks 
                               in key decisions. 
============================  ============================  =============================  ==============  =========== 
13 Conduct 
=========================================================================================  ==============  =========== 
Principal risk                Management and mitigation     Outlook                        Strategic       Change from 
                                                                                            Priorities      last year 
============================  ============================  =============================  ==============  =========== 
There is a risk               Observing the proper          The FCA Consumer               1, 2,           Neutral 
 that through the              standards of conduct          Duty regime which              3 
 acts or omissions             in all its forms              will come into effect 
 of the firm, or individuals   is essential at M&G.          on 31 July 2023 (for 
 within the firm,              Due to the broad              new and existing 
 we deliver poor or            nature of conduct             products and services) 
 unfair outcomes for           risk, management              requires firms to 
 clients, colleagues,          is pervasive and              deliver good client 
 or other stakeholders,        reflected in policy           outcomes with focus 
 or that we affect             and processes including       on four areas (products 
 market integrity.             our Code of Conduct           and services, price 
                               and our Conflict              and value, consumer 
                               of Interest, Market           understanding and 
                               Abuse and Investment          consumer support) 
                               Communications Recording      and to consider the 
                               policies.                     needs, characteristics 
                                                             and objectives of 
                               Our Asset Management          clients at every 
                               business has launched         stage of the customer 
                               a Conduct Management          journey. 
                               Framework to provide 
                               a consistent process 
                               for conduct management 
                               in relation to these 
                               policies and our 
                               Retail and Savings 
                               business is undertaking 
                               a Consumer Duty programme. 
============================  ============================  =============================  ==============  =========== 

Statement of Directors' Responsibilities and Financial information

The Directors are responsible for preparing the Annual Report and Accounts and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards and the Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law).

Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.

In preparing the financial statements, the Directors are required to:

 -   select suitable accounting policies and then apply them consistently; 
 -   state whether applicable UK-adopted international accounting standards 
      have been followed for the Group financial statements and United Kingdom 
      Accounting Standards, comprising FRS 101 have been followed for the 
      Company financial statements, subject to any material departures disclosed 
      and explained in the financial statements; 
 -   make judgements and accounting estimates that are reasonable and prudent; 
 -   prepare the financial statements on the going concern basis unless 
      it is inappropriate to presume that the Group and Company will continue 
      in business. 

The Directors are responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's and Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in Directors' Report confirm that, to the best of their knowledge:

 -   the Group financial statements, which have been prepared in accordance 
      with UK-adopted international accounting standards, give a true and 
      fair view of the assets, liabilities, financial position and profit 
      of the Group; 
 -   the Company financial statements, which have been prepared in accordance 
      with United Kingdom Accounting Standards, comprising FRS 101, give 
      a true and fair view of the assets, liabilities and financial position 
      of the Company; and 
 -   the Strategic Report includes a fair review of the development and 
      performance of the business and the position of the Group and Company, 
      together with a description of the principal risks and uncertainties 
      that it faces. 

Signed on behalf of the Board of Directors

Andrea Rossi

Group Chief Executive Officer

9 March 2023

36 Related party transactions

The Group and its related parties comprise members of the M&G plc Group, as well as the Group's joint ventures and associates, and any entity controlled by those parties.

36.1 Transactions with the Group's joint ventures and associates

The Group received dividends and interest of GBP91m for the year ended 31 December 2022 (2021: GBP21m) from joint ventures or associates accounted for using the equity method. In addition, the Group had balances due from joint ventures or associates accounted for using the equity method of GBP88m as at 31 December 2022 (2021: GBP105m) and balances due to joint ventures or associates accounted for using the equity method of GBPnil as at 31 December 2022 (2021: GBPnil).

Furthermore, in the normal course of business a number of investments into and divestments from investment vehicles managed by the Group were made. This includes investment vehicles which are classified as investments in associates and joint ventures measured at FVTPL. The Group entities paid amounts for the issue of shares or units and received amounts for the cancellation of shares or units. These transactions are not considered to be material to the Group.

36.2 Compensation of key management personnel

The members of the Board and the Group Executive Committee are deemed to have power to influence the direction, planning and control the activities of the Group, and hence are also considered to be key management personnel.

Key management personnel of the Company may from time to time purchase insurance, asset management or annuity products marketed by the Group companies in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with other persons.

Other transactions with key management personnel are not deemed to be significant either by virtue of their size or in the context of the key management personnel's respective financial positions. All of these transactions are on terms broadly equivalent to those that prevail in arm's length transactions.

The summary of compensation of key management personnel is as follows:

                                 2022  2021 
For the year ended 31 December   GBPm  GBPm 
Salaries and short-term 
 benefits                        11.4  12.2 
Post-employment benefits          0.5   0.6 
Share-based payments              4.8   7.2 
Total                            16.7  20.0 
===============================  ====  ==== 

Information concerning individual Directors' emoluments, interests and transactions are provided in the single figure tables in the Annual Report on Remuneration on pages 141 and 145.


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March 23, 2023 05:00 ET (09:00 GMT)

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