![]() Annual Report and # Financial Statements 2021 #### www.pensionbee.com ![]() # Contents #### Strategic Report 1 PensionBee at a GlancePage 4 2 Chairman’s StatementPage 6 3 Chief Executive Ofcer’s ReviewPage 8 4 About UsPage 9 5 Our StrategyPage 16 6 Our Business ModelPage 20 7 Market OpportunityPage 22 8 Operating and Financial ReviewPage 24 9 Measuring our PerformancePage 30 10 StakeholdersPage 32 11 ESG ConsiderationsPage 42 12 Managing our RisksPage 52 13 Viability StatementPage 56 #### Corporate Governance Report 1 Chairman’s Introduction to GovernancePage 58 2 Board of Directors and Executive ManagementPage 60 3 Corporate Governance StatementPage 63 4 Nomination Committee ReportPage 69 5 Investment Committee ReportPage 72 6 Audit and Risk Committee ReportPage 74 7 Directors’ Remuneration ReportPage 80 8 Directors’ ReportPage 97 9 Statement of Directors’ ResponsibilitiesPage 104 #### Financial Statements 1 Independent Auditor’s ReportPage 106 2 Consolidated Income StatementPage 112 3 Consolidated Statement of Financial PositionPage 113 4 Consolidated Statement of Change in EquityPage 114 5 Consolidated Statement of Cash FlowsPage 115 6 Notes to the Consolidated Financial StatementsPage 116 7 Company Financial StatementsPage 133 8 Notes to the Company’s Financial StatementsPage 135 2 PensionBee Group plc ![]() # StrategicReport ![]() 1 PensionBee at a Glance PensionBee is a leading onlinepension provider. Ourmissionistomakepensionssimple,sothat everyonecanlookforwardtoahappyretirement. PensionBeeisaleadingonlinepensionprovider 1 intheUK,withamissiontomakepensionssimple,so thateveryonecanlookforwardtoahappyretirement.Weareadirect-to-consumernancialtechnology companywithapproximately117,000InvestedCustomersand£2.6bnofAssetsunderAdministrationas at31December2021. 2 WedeliveraleadingcustomerpropositiontopensionholdersintheUKdened contribution pensions market, catering for the manypeople who have historically struggled to understand, prepare for and manage their retirement condently. Weseektomakeourcustomers‘PensionCondent’bygivingthemcontrolandclarity,enablingthemto interactwiththeirretirementsavingsthroughauniquecombinationofsmarttechnologyanddedicated customerservice.Ourtechnologyplatformallowscustomerstocombinetheirpensionsandinvestina rangeofonlineplans,forecasthowmuchtheyareexpectedtohavesavedbythetimetheyretire,and make withdrawals fromthe age of55. Our customers rateour service highly,as evidenced byour Excellent Trustpilot score of 4.6 ★ outof 5 (based on 6,288 reviews) 3 , our App Store ratingof 4.8 ★ out of 5 (basedon 3,236 ratings) 3 and our Customer Retention Rate which is consistently in excess of 95%. 2 Fortheyearended31December2021,PensionBee’sRevenuewas£12.8m,representingagrowthrateof 103%ascomparedto£6.3mfor2020. 2 AdjustedEBITDAfor2021was£(16.4)mascomparedto£(10.4)m for2020,withanAdjustedEBITDAMarginof(129)%for2021ascomparedto(166)%for2020,reecting strongandscalableinvestmentintheCompany’sgrowth. 2 LossbeforeTaxincreasedto£25.0mfor2021 as comparedto £13.5m for2020, explained byincreased Adjusted EBITDAtogether with anincrease in the non-cash items, non-recurring and nance costs. 2 1SupportedbyPensionBee’sTrustpilotTrustScoreasat31December2021of4.6 ★ outof5(basedon6,288reviews), comparingfavourablytoother keypensionproviderswhooperateintheUKDened Contributionpensionsmarket, together with PensionBee’s industry awards as set out on page 15 of the About Us section of the Strategic Report. 2 See denitionson pages 30 and 31of the Measuring OurPerformance section of the StrategicReport. PensionBee’s KPIs includealternativeperformancemeasures(‘APMs’),includingAdjustedEBITDAandAdjustedEBITDAMargin.APMsare notdenedbyInternationalFinancialReportingStandards(‘IFRS’)andshouldbeconsideredtogetherwiththeGroup’s IFRSmeasurementsofperformance.PensionBeebelievesAPMsassistinprovidingadditionalinsightintotheunderlying performance of PensionBee and aid comparability of information between reporting periods. 3ComparestotheTrustpilotscoreof4.7 ★ outof5(based on3,784 reviews)andanAppStore ratingof 4.8 ★ out of5(based on 486 ratings) as at 31 December 2020. Excellent 4.6 out of 5 Rating PensionBee Group plc 4 ![]() £2.6bn #### 2021 Assets under Administration 2 91% on 2020 £12.8m #### 2021 Revenue 2 103% on 2020 £16.3m #### 2021 Annual Run Rate Revenue 2 85% on 2020 £(16.4)m #### 2021 Adjusted EBITDA 2 -58% on 2020 (129)% #### 2021 Adjusted EBITDA Margin 2 #### +37ppt on 2020 4 £(25.0)m #### 2021 PBT 2 85% on 2020 (11.86)p #### 2021 EPS 2 -55% on 2020 5 658k #### 2021 Registered Customers 2 63% on 2020 117k #### 2021 Invested Customers 2 70% on 2020 >95% #### 2021 Customer Retention 2 #### stable 4 Represents absolute change in Adjusted EBITDA Margin from (166)% as at 31 December 2020 to (129)% as at 31 December 2021. 5 2020 Earnings Per Share (‘EPS’) was adjusted for the impact of the IPO to give a comparable EPS of (7.67)p as set out in Note 11 of the Financial Statements.. Annual Report and Financial Statements 2021 5 ![]() Planning for the future has never been more important. Our straightforward approach to enabling individuals to take control of their pensions has continued to resonate and attract people of all ages and demographics across the country. We aredelighted toreport onanother very successfulyear forPensionBee, withthe strength ofour customerpropositioncontinuingtoresonateacrosstheUK.Reportingforourrstyearfollowing theCompany’sInitialPublicOffering(‘IPO’)inApril,ourteamdeliveredimpressivegrowthand nancialresultsrmlyon-track,underpinnedbyoursoundbusinessmodel,drivenbyleadership across product and technology and the calibre of our people. We reported strong growth across our key metrics. During 2021, we saw the number ofcustomers withretirementsavingsinvestedwithPensionBeeincreaseby70%andtheAssetsunder Administrationthatweholdontheirbehalfclimbingbymorethan90%from£1.4bnto£2.6bn. 6 Correspondingly, our Revenue more thandoubled from £6.3m in 2020 to £12.8m in2021, and our Annual Run RateRevenue increased by 85%from £8.8m to £16.3mover the same period. 6 Further data-led customeracquisition andcontinued investmentin ourtechnology andpeople shouldsee us continue to scale and progress on our path to protability. Ourmission atPensionBee isto makepensions simple,ensuring thatour customershave complete clarityover theirnancialfutures. Planningforthe futurehasnever beenmoreimportant,especially set against the backdrop of the global pandemic and given the economic outlook as interest rates and ination beginto rise. Our straightforwardapproach to enabling individualsto take control of theirpensions hascontinuedtoresonateand attractpeopleofall agesanddemographicsacross thecountry,whoarerightlyconcernedwithensuringthattheyareproperlypreparedfortheir retirement.Weappreciatethatwearetheguardiansoftheirsavingssetasidetonancetheir futures beyond work, and we take this responsibility to heart. 6 See denitions on pages 30 and 31 of the Measuring Our Performance section of the Strategic Report. 2 Chairman’s Statement We dothis through thetechnology thatwe have created.But technologyalone is notenough. Our CustomerSuccess teamis atthevery heartofour businessandtheir skills,energyand dedication arewhathasenabledustoestablishareputationforservicethatsetsthegoldstandardforthe pensions industry. As we continue to grow rapidly, we willmaintain close watch over the standard of service that we deliver to all our customers, which is of paramount importance. Despitethe unprecedentedchallenges that2021 hasbrought forsociety asa whole,dominated by thepandemic,ourpeoplehaveworkedtirelessly,showingdedicationandgreatresolvethroughout. Onbehalf ofthe Boardandour shareholders,I wouldliketo extendmysincerestthanks toeach and every one of the PensionBee team. Governance TheBoardiscommittedtoupholdingthehigheststandardsofcorporategovernanceacrossthe business and ensuring that these principles are embedded into our culture. At the time of our IPO, we stated our intention to voluntarily comply with the UK Corporate GovernanceCode, which has pavedthe wayforour expectedtransitiontothe PremiumSegmentofthe LondonStockExchange. Wearefocusedonmaintainingtherightbalanceofskills,experienceanddiversitythroughout the business,and arepleased to havemaintained gender-balanceacross the Boardand Executive Management team, which we rmly believe helps to drive the best outcomes. PensionBee Group plc 6 ![]() TheBoardcontinuestoprovidesupportandappropriatechallengetotheExecutiveManagement teamtoensurethatthestrategyissound,achievableandultimatelydelivered.Fulldetailsofthe workof theBoard andits Committeesare setout inthe CorporateGovernance Reportfrom page57. Webelievethateffectivestakeholderengagementiskeytothelong-termsustainablesuccessof our businessand as such,our goal isto proactively engagewith our keystakeholders, to understand their needsand interestsand torespond accordingly.When theBoard makesdecisions, weconsider ourcustomers,employees,shareholders,communities,suppliers,governmentandregulatorsand ourplanet.Furtherdetailissetoutonpages32to39oftheStakeholderssectionoftheStrategic Report. Environmental, Social and Governance Effectively managingour Environmental,Social andGovernance (‘ESG’) prioritieswill helppreserve ourresilienceanddrivelong-termvalueforallourstakeholders.WecontinuetopursueourESG work transparently, disclosingour targets and relevant metrics,and believe this approachsupports accountability and helps our stakeholders to be informed about our progress. Ofnote,thisyearwearepleasedtohaveintegratedESGintoourinvestmentrangetosecure sustainable value forour customers, our societyand our planet, closing two plansthat could not be screened under ourESG policy. Wecontinued to minimiseour impact onthe environment through ourremote workingpolicyandas apaperlessproviderand encouragedotherpensioncompanies to stop sending out millions of paper statements each year. AspartofourcommitmenttoincreasingourtransparencyinallthestrandsofESG,wedisclosedunder the Sustainability AccountingStandards Board, Workforce Disclosure Initiativeand the Streamlined EnergyandCarbonReporting (‘SECR’)frameworks forthersttime. Wewilldiscloseunderadditional frameworksas databecomesavailable andas itrelatesto futureincomingregulation inrespectof climate-related disclosures.Furtherdetails onour ESGactivities canbe foundon pages42to 51of the ESGConsiderations sectionof theStrategic Reportand ourSECR Reporting isset outon pages 97 to 103 of the Directors’ Report within the Corporate Governance Report. Outlook WebelievethatgrowthintheUKpensionsmarketwillcontinueatpace,beingdrivenbythe supportiveregulatoryframeworkand favourablepolicychanges,theaccelerationofthetransition to digital technology and underlying trends in the employment market that increasinglydemand a modern pension consolidation solution. Newopportunities anddevelopments intechnologyare expectedto continuetoaccelerate change inthe pensionsindustryinways thatwillultimatelybenet allconsumers.PensionBeehas already built a technology platform, a product and a team that can continueto scale quickly, capturing this evergrowing‘mass-market’opportunity,allowingindividualstomanagealltheirpensionsinone place, through an efcient and scalable platform. Withaleadingcustomerproposition,aresilientbusinessmodel,andarobustcapitalposition,we believethat weareuniquely positionedtocontinueto growatpace andwelook forwardto2022 being yet another exciting year in the PensionBee story. Mark Wood CBE Chairman 13 April 2022 Annual Report and Financial Statements 2021 7 ![]() 3 Chief Executive Ofcer’s Review Asafast-growingcompany,weareusedtoregularlybreakingourownrecordsandsettingthe standardsandbenchmarks thatwe holdourselves upto. Fromthe outstandingquality ofour innovativetechnologyplatformanduserexperiencetotherapidcustomerserviceweofferconsumers seeking to take control of their pensions, PensionBeeaims to lead the industry in everything we do. I amoften asked whether wecan continue tomeet and beatour ownexpectations evenas we grow rapidly. I reect on this questionevery year as I examine our resultsand reect on our achievements. Bymanymeasures,2021hasbeenamilestoneyearforPensionBee.OursuccessfulInitialPublicOffering (‘IPO’) enabledus to welcomenew shareholderswho, likeus, believe in ourmission to makepensions simplesoeveryonecanlookforwardtoahappyretirement.Wewereparticularlyproudtofacilitate a customer offer, giving our loyal andsupportive customer base the opportunity to participate in the IPO.The£55m ofprimaryproceedsthatwe raisedfrombothinstitutionsandcustomers enabledus to continueinvesting inour brandand technology,ultimately givingour 117,000Invested Customers the 'pension condence' toentrust us with approximately £2.6bn oftheir pension savings. 7 We delivered this growth in Assets under Administration 7 , again reecting an annual growth rate of more than90%againstabackdropofconsistentlyhighcustomersatisfaction.WemaintainedourExcellent Trustpilotratingof4.6 ★ andappstoreratingsof4.8and4.7ontheAppleStoreandGooglePlayStore respectively.Ourinternallymeasured NetPromoterScorewasan industry-leading63 8 ,reectingthe enormousimportanceweplaceonkeepingourcustomershappy.Wearedelightedtoseethepositive impactofproductinnovationsincludingour60-second‘easybanktransfer’contributionfeature, personalisedtax codesforwithdrawing customers,ahighly detailedtransfertracker andtransactional push noticationsto keepour customersinformed ofkey transactionsin theirBeeHive. 7 See denitions on pages 30 and 31 of the Measuring Our Performance section of the Strategic Report. 8 PensionBee’s externally measured NPS is 75. Source: Boring Money, 2022. We seekto leadour industryon productand serviceinnovation, butare alsocommitted toensuring that ourbusiness delivers apositive impact onour society andour planet.In 2021,we strengthened ourcommitmenttointernationalcorporatetransparencyframeworkssuchastheSustainability AccountingStandardsBoardandWorkforceDisclosureInitiative,furtherintegratedESGintoour coreinvestmentrangeandcontinuedtoworkwithourassetmanagerstoassertourcustomers’ views on Living Wages, and gender and ethnicity pay gaps. Whilstourmetricsshinealightonthehealthofthebusinessoperationsandthecompetitive advantageofourproprietarytechnology,itisourculturethatultimatelyenablesourCompany todelivertopperformance.Thepandemicandrapidchangesinworkingpatternshavetested theresilienceofeverybusinessintheworld.Ourvaluesoflove,quality,honesty,innovationand simplicity, and the ways in which we demonstrate them on a daily basis, have allowed us to thrive. Wecelebrateourdiversityregularlybecauseweknowthathonouringtheuniquenessofevery individualiswhatmakesPensionBeeaspecialplacetoadvanceone’scareer.Thecommitmentto ouremployees stemsfromthe leadershipteamand thisyearwe wereproudto learnthat92%of our employees would recommend PensionBee to a friend as a great place to work. Lookingahead to2022,wewillcontinue toimplementour ambitiousgrowthplantoacquire morecustomersandtouseouruniquetechnologyandinnovativeproductofferingtohelpthem manage their pensions throughouttheir lifetime. We are proudto serve our customerson this path of purpose to make a happy retirement possible for all. Romi Savova Chief Executive Ofcer 13 April 2022 Whilst our metrics shine a light on the health of the business operations and the competitive advantage of our proprietary technology, it is our culture that ultimately enables our Company to deliver top performance. PensionBee Group plc 8 ![]() 4 About Us #### Our History #### Since inception, we have been aconsumer champion in a highlycomplex industry, ripe for disruption PensionBee wasco-foundedin2014byRomiSavova,its currentChiefExecutiveOfcerand Jonathan ListerParsons, itscurrent ChiefTechnology Ofcer,to simplifypension savingsin theUK, following a difcult pension transfer experience for Romi using traditional platforms. Sincethen,wehavebeenchallengingthestatusquoofanindustrythathasevolvedwithout sufcient focus on consumerneeds,characterised bypoorcommunication, opaquefees and cumbersomeprocesses.PensionBeeisonamissiontomakepensionssimpleforeveryoneandto change the industry for the better. Annual Report and Financial Statements 2021 9 ![]() #### Our Vision Westrivetohelpourcustomers achieveahappyretirement intheformofnancialfreedom, goodhealthandsocialinclusion.Ourvisionactsasablueprintforallourbusinessactivities,from outstandingcustomerserviceandintuitiveproductdesign,toinvestmentsolutionswithsomeof theworld’slargestmoneymanagersandimpactfulcorporateandsocialresponsibilityinitiatives. As a pensions company with a long-term horizon for our customers, we seek to look beyond short- term gains to help our customers achieve a sustainable retirement income. PensionBee Group plc 10 ![]() Good Health Webelievethatgoodphysicalandmentalhealthcanbeamajor determinantofhappinessinlaterlife.Whilstqualitynutritionandsafe living conditionsare importantcontributorstogood health,wealso believe that nancial wellbeing can have a signicant role to play. Ourplatform hasbeendesignedina user-friendlywaysoas tolimitthestresses ofengagingwith one’s pension and to help customers exercise greater control over their nancial future. Similarly,wealsowanttogiveourcustomersgreaterpeaceofmindbyofferingmoreethically andenvironmentallyconsciousinvestmentalternatives.Notonlyistherequantitativeevidence fromindustryexpertssuggestingthatsustainableinvestmentsyieldgreaterreturns,butthereare signicant nancialrisks associatedwith investingin pollutantssuch asoil andtobacco producers. Thesenancialriskscanbeaggravatedbygovernmentaction(whetherthroughoutrightbansor taxes), civillawsuits, and adverse mediacoverage. In facilitatingsustainable investments,we seekto enhance our customers’ long-term pension wealth as well as their mental wellbeing. Financial Freedom Our customers havea large variety ofretirement goals and ambitions, whetherpurchasinghomesclosetotheirchildren,travellingaroundthe world orsimply livingwithout anynancial worries.Each customeris unique,but toachievetheir idealretirement,theyall needsufcientincome to cover theirliving expenses for the restof their lives. This, atits core, is the concept of nancial freedom. Fortoolong,consumers havestruggledtomanagetheirretirementsavings.Pensionsareoften complicatedand,combinedwiththeaddedintricaciesthatcanresultfromtheaccrualofmultiple pension plansfrom differentemployers over thecourse ofa career,present a signicantobstacle for consumerswantingtotakecontroloftheirretirementsavings.PensionBee’stechnologyplatformis designedtomake iteasy forcustomers toboth understandand consolidatetheir pensions,to investin arange ofdiversied plansand,from theageof55, tomake on-demandandappropriate withdrawals. Throughaccesstopension calculatorsandretirementforecastingtools,weseektohelpour customers understand how much theyneed to save in order toachieve their desired incomein retirement. Social Inclusion WebelievethattheCompany’sproductmustbebuilttohelppeople from all backgrounds to save for retirement. The UK’s statutory secondary schoolnationalcurriculumcontainslittleformalnancialeducation, andoverthecourseoftheirlives,individualsdonotallhavethesame exposure to nancial concepts. Asa result, many struggle to navigatethe pensions system as adults. By designing and building our product inrecognition of these realities, we seek to help our customers overcome theseeducational barriers. For example,our technology platform isdesigned tomake iteasyand intuitiveforcustomersto combinetheirpensions, weoffertoolssuch aspension calculators and retirementforecasting toolsto help customersplan ahead andmake suitable contributions, wehelp saversmake on-demandand appropriate withdrawals,and we supportall of this with excellent customer service and jargon-free communication. Inaddition, weare anadvocate forgreatergenderequalityinUK companies.There isa largebodyof researchsuggestingthatwomen havebeen heldback bya lackof equalopportunities andsystemic inequalitiesthatpreventcareerprogression.ResearchconductedbyPensionBeesuggeststhatthese inequalities are perpetuated inlater life with men having signicantlylarger pensions than women aftertheageof45,despitehavingashorterlifeexpectancy.Inrecognitionoftheseinequalities, PensionBee’s rstCharter pledgetaken in2019was tomaintain atleast 50%gender diversityin its senior management throughto 2021, which ithas achieved. For 2021we achieved morethan 50% 9 female representationacross ourentire employeebase, and50% femalerepresentation acrossour Board and Executive Management Team. 10 We are alsocommitted to encouraging otherforms of equality inUK companies. Efforts toinclude, nurtureandprogressemployeesfromallbackgrounds,includingdiverseethnicitiescantranslate intohigherengagementandlowerattritionrates.Webelievethatthereisastrongmoraland economiccasefor increaseddiversity inUK companies.Greater equalitycan translateintoimproved Company performance, which in turn supports the pension growth of our customers. OurDiversity,InclusionandEqualityPolicysetsourapproachandcommitmenttodiversityand includesourgoalsfor2022,whichincludemaintainingatleast50%womenandminoritygender balance atall levels andincreasing representation of allminority ethnicities to atleast match the UK population across all levels of the business. 9 Supported by PensionBee’s Diversity & Inclusion Survey, completed in June 2021. 10 As of 31 December 2021. Annual Report and Financial Statements 2021 11 ![]() Combine The average adult switches jobs approximately 11 times overthe course of their career. 11 In doing so, theymay accrueanumberofdisparate pensionswithdifferingprovidersandcost structureswhich, as aresult of a varietyof factors whichcould includeinfrequent reporting, limited onlinefunctionality, and cumbersomecommunications processes,can provedifcult to manageeffectively. Bysigning up with PensionBee,either via ourwebsite orby using ourapp, ourcustomers are ableto combineand transfer theirexisting pensionsinto thePensionBee PersonalPension with ease.Once theirpensions havebeen transferred,customersareable tostartmanagingtheir newpensiononline andcan monitor their live balancevia our website or app. Contribute Ourcustomerscanmakeone-offorregularcontributionstotheirPensionBeepensionviabank transferordirectdebit.Forcustomerswhomakeapersonalpensioncontributionandareeligible fortaxrelief,wewillautomaticallyclaimtheir25%taxtop-upfromHMRCandaddthistotheir pensionbalance.Customerscanalsomakeuseofourretirementcalculator,whichprovidesan estimate ofretirement income basedon anumber ofassumptions including thesize of thepension plan,chosenretirementageandongoingcontributions,toplanaheadfortheirretirement.Self- employed customers can open a new pension plan without transferring any old pensions. Withdraw Fromtheageof 55,ourcustomers canwithdrawa portionoftheir pensiononlinein justafew clicks, bypassing aprocess whichcan in somecases involvemany weekslling outpaperwork andjargon- lled forms,which areoften sentonly throughthe post.Customersmay chooseto takeup to25% of their pension free of tax, withdrawing their chosen amount either as a lump sum or in portions. 11DepartmentforWorkand Pensions(‘DWP’)-Meetingfuture workplacepensionchallenges:Improving transfers and dealing with small pension pots - December 2011. #### Our Customer Proposition We are revolutionising the pensions industry through innovative technology, product leadership and excellent customer service Pensionsareoftencomplicatedand difculttounderstand,presentinganobstacleforconsumers toengagewith theirsavings.Againstthisbackdrop,PensionBeehas developedasimpleandeasy to usemass-market proposition that providesa solution tothe consumer problemof savingfor and managing their income throughout retirement. Our customer proposition can be summarised as follows: Combine Contribute Withdraw PensionBee Group plc 12 ![]() #### Our Team Our team has the breadth and depth of experience across all disciplines to deliver the best customer outcomes, drive growth and performance LedbyourfoundersRomiSavovaandJonathanListerParsons,wehaveastrongandestablished ExecutiveManagementteam.Wehaveadeep,experiencedanddiverseboard,ledbyourChair Mark Wood (former CEO of Prudential). Ourdiverse andinclusivetotalworkforce of177individuals 12 is motivatedandempoweredto achievegreat resultsacrossall areasofthe business,includingcustomer serviceandengagement, brand and marketing, product development, technology, nance, corporate and risk. We develop and support our talent and strive to ensure that our people are actively engaged. Our strongcultureandvaluesenableustoattractandretainpeoplewhopassionatelybelieveinour vision.Allouremployeesparticipateinlong-termequityschemes,whichfurtherhelpstodrive engagement and an ownership mentality. 12 As of 31 December 2021. Includes 172 UK employees, 1 UK contractor and 4 non-UK contractors. Annual Report and Financial Statements 2021 13 ![]() #### Our Values #### We live by our core values, focused ondoing the right thing for our customers We arededicatedtoensuringthatourvecorevaluesremainasguidingprinciples behind everythingwedo,sothateveryoneintheCompanyremainsfocusedonalwaysdoingtheright thingfor ourcustomers. Aswe continueonourgrowthpath, thereis aparticularfocusonprotecting and maintainingtheculture associatedwiththese values- astrongfocus onwell-being, including regular ‘Happiness! Meetings’ between employees and managers, helps to embed this approach. We have built aprogram to focus specicallyon the development andenhancement of our values- based culture, ledby our Headof Culture, Inclusion andWellbeing. We have embeddedour values into our performancemanagement approach and throughoutrelevant policies in order toachieve ourstrategicgoals.OurSeniorIndependentDirector,MaryFrancisCBE,enjoysresponsibilityfor employeeengagement,andweregularlyreporton ourpeopleandcultureataBoardlevel,given the importance we place on our values-based culture and its success in driving the achievement of our strategy. Further detailsand specic examplesof how theBoard and Companyengage with ouremployees can be found on page 34 of the Stakeholders section of the Strategic Report. #### Love From engaging with our customers to product delivery, we go above and beyond to create an exceptional customer experience. #### Simplicity Whether we are picking up the phoneor building our product, we keep things simple, avoiding confusing jargon and complicatedprocesses. #### Quality We deliver top notch quality, on-time work, and we do what we say we’ll do. People trust us with their pension savings, and we need to show them that we deserve that trust. #### Innovation We are always seekingto ‘wow’ our customers (and employees) through new and improvedways of doing things. #### Honesty We strive for total transparency around the pensions our customers get, what service they can expect and our fees. PensionBee Group plc 14 ![]() #### Our Awards #### 2021 has been an incredibly strong year for PensionBee and the industry has #### recognised our innovation, customer service and our diverse workplace PensionBee has received a high level of recognition from its customers and third parties for its differentiated customer offering and high standard of customer service. Since inception, we havereceived a total of 34awards, including the following 17awards received in 2021: ★ Winner Best for Customer Service Boring Money’s Best Buy 2021 ★ Winner Best for Sustainable Pension Boring Money’s Best Buy 2021 ★ Winner Consumer Champion of the Year MoneyAge Awards ★ Winner Pensions Innovation Finder Investing & Saving Innovation Awards ★ Winner Employer of the Year FTAdviser Diversity in Finance Awards ★ Winner Overall Best Buy for Pensions Boring Money’s Best Buy 2021 ★ Winner Best for Beginners Boring Money’s Best Buy 2021 ★ Winner Best for Digital Boring Money’s Best Buy 2021 ★ Winner Pension Provider of the Year PensionsAge Awards ★ Winner Best IPO Communications Corporate & Financial Awards ★ Winner Consumer Champion of the Year (Company) MoneyAge Awards ★ Winner SIPP Provider of the Year MoneyAge Awards ★ Winner DC Innovation of the Year UK Pensions Awards ★ Winner ESG Champion - Innovation Financial Times & Investors Chronicle Celebration of Investment Awards ★ Highly Commended Best Use of Market Research Investment Week’sInvestment Marketing &Innovation Awards ★ Highly Commended Trailblazing Company of the Year FTAdviser Diversity in Finance Awards ★ Highly Commended Pension Provider of the Year Workplace Savings & Benets Awards ★ Highly Commended Pension Provider of the Year MoneyAge Awards Annual Report and Financial Statements 2021 15 ![]() 5 Our Strategy #### PensionBee’s strategy is to be the bestuniversal online pension provider Ourstrategy startswithputting theconsumerat theheartofeverything wedo.Consequently, we focus on furthergrowth of the customerbase, offering customers an excellent lifetimeproduct and serviceexperience,poweredbyindustry-leadingtechnologyandworld-classinvestingsolutions. We drive growth through the following combination of factors: 1 EfcientInvestmentinCustomerAcquisitionandGrowing #### Brand Awareness Continuedinvestment inmarketingwill drivefurthergrowth incustomers,AUA andrevenue.Due toPensionBee’sbroadcustomerappealfocusingonthemassmarket,wecanadoptlarge,mass marketadvertisingchannels.Weremainfocusedoncontinuingtobuildourmassmarketbrand identity and becoming a UK household brand name. Key Highlights for FY2021: • Customeracquisitionwasacorestrategiccompetencyforusin2021aswecontinuedto demonstrate our ability to efciently deploy a rapidly growing marketing budget. • Wedelivered netows of approximately£1bn ofAUA in 2021(excluding marketperformance) withimproved efciency.Each£1of marketingexpenditurein2021 generated£74 ofnetows of AUA as compared to £64 in 2020, indicating an efciency improvement of close to 20%. • Our newproprietaryin-houseDataPlatformdeliveredvaluableinsightsacrossallofourcore marketingchannels,andhelpedtodrive decision-makingthroughsuccessiveCOVID-19waves. It hasallowed usto optimisemarketing spendacross channelsto growrapidly whilekeeping our Cost per Invested Customer in line with our desired threshold 13 . • Across 2021, themajority ofthemarketing spendwas deployedon thetop threechannels as expected, being TV, Out of Home and Paid Search. • Our ‘Feels soGood’ brandcampaign wasrolled-out nationallyacross allchannels -advertised on over4,500 billboardsacross theUK and createdin excess of450m impressions.It resonated with a wide targetaudience, specically older age cohorts, which helpedto grow our over 50s customer base. • We becametheofcialpensionpartnersponsorof BrentfordFootballClub(‘BrentfordBees’), before their historic promotion into the Premier League. • Wehaveincreasedourbrandmentionsthroughourcontent-ledreports,stories,consumer advocacy and national media campaigns. • Ouractiveparticipationingovernmentworkinggroups,regulatoryandpolicydevelopment andconsultationshasenhancedanddevelopedPensionBee’spositionasaconsumer champion. 13 See denitions on pages 30 and 31 of the Measuring Our Performance section of the Strategic Report. PensionBee Group plc 16 ![]() 2 Leadership in Product Innovation Continuedproductinnovationiscentraltoourstrategy.ThePensionBeecustomerpropositionhas beenenabledby investmentincontinuousinnovationandautomation,allowing easyonboardingof customersandintuitivelifetimeself-service.Wehaveaproventrackrecordininnovatingandleadingthe pensions industryand willcontinue to developproducts and features tocater for consumer demand. Key Highlights for FY2021: • ThishasbeenanotheryearofproductinnovationsforthePensionBeeproducthelpingto increase ourcustomer base andenabling them to contributemore money into theirpensions, laying the groundwork for expansion of our product offering beyond pensions. • Productdevelopments thatreduce friction,enabling usto serveour customerswith lessand less human interventionsupport improvementsin ourefciency and operatingleverage overtime 14 . • Welaunchedthe‘Easybanktransfer’featurethatenablesa60secondsetupforbothone- offandrecurringpensioncontributions.Weexpectthistoincreasenetowsfromexisting customers. This was achievedthrough Open Banking technology and along-term integration with Plaidsoftware (facilitatingsecure connectionwith users’bank accounts),the settingup of which will support PensionBee with respect to further open banking data-led features. • Weenhanced ourin-appdrawdownfeatures,enabling usto offermore streamlinedwithdrawals to ourdrawdown customerbase (over theage of55), whichwe expectto play agreater rolein our customer acquisition activities going forwardas drawdown seeking consumers increasingly search for easy-to-use technologyto access their savings through retirement. • We added an additional feature allowing drawdown customers to use personalised tax codes, enablingthemtoaccesstheirpensionsmoretaxefcientlyfromtheoutset,enhancingthe customer experience for this expanding customer set of more mature customers. • Weopenedupourofferingtobettercaterfortheself-employed,allowingthemtosetupa pension with a contribution, circumventing the need to add a pre-existing pension. • Weupgradedtheexitfeeandspecialbenetreviewandtransferprocess,reducingtransferfriction, improving speed andconversion, and reducing involvementfrom our customerservices team. • Welaunched a new‘Transfer Tracker’,enabling customersto moreeffectively tracktheir pension transfers, and serving to reduce inbound queries. • Newpush noticationsallowedcustomers totakedirect actionsinthe app,providingreal-time transactional information to customers, reducing inbound queries. • Weimplementedtwo-factorAuthentication(2FA)acrossourwebandmobileapps,adding alayerofsecuritytogivecustomersadditionalpeaceofmind.Thiswasahighlyrequested feature by our customers, particularly those at the stage of withdrawal. • Pensionprovider-basedonboardingwasafocus,deepening proprietaryrelationships and improving communication, creating efciency improvements. 14Operatingleverageindicatesscalabilityintermsofhowrevenuegrowthtranslatesintotheimprovementof protability metrics. 3 InvestmentinandDevelopmentofitsIndustryLeading #### Technology Platform Our proprietary technology is modern, scalable and secure. Thecloud-based and API-driven platform providesthefoundationsonwhichtocontinuetobuilddynamicandinnovativeproducts,while maintainingfullcontrolovertheexperiencedeliveredtocustomersinacost-efcientmanner.The security andcompliance ofthe technologyis a priority,and wemaintain a robustinformation security assuranceframeworkthatisindependentlyauditedandcertiedunderISO27001.Wehavemade, andwillcontinuetomake,investmentsintechnologytodrivefurtherautomationandimprovethe customer experience. Key Highlights for FY2021: • We continued to invest in our technology over the year. • ConsiderableresourcesweredirectedtowardstheDataPlatform(inparticularthedevelopment ofitsmachinelearningcapabilitiesandimportingofnewdatasourcesintotheplatform),which hasbeeninstrumentalinhelpinguscalibratedecision-making,marketingbudgetallocation and to achieve our marketing objectives. • WerecruitedadedicatedDataTeam,whositwithinthetechnologydepartment,tobuild capability and support the automation of data activities in other business areas. • Ourtechnologyteamalsodevotedresourcestooptimisingourtransferprocesses,including more straight-through automation of light-touch pension transfers. • We made ongoing efciency improvements in consolidation activity to drive productivity. • As information security continuesto remain critical,we successfully completed ourISO 27001 re-certication audit. 14Operatingleverageindicatesscalabilityintermsofhowrevenuegrowthtranslatesintotheimprovementof protability metrics. Annual Report and Financial Statements 2021 17 ![]() 4 Focus on Excellent Customer Service Weare focusedon makingpensionseasytounderstand andaccessible toeveryonethroughsimple, straightforwardlanguageand engagingvisuals. Industry-leadingratings evidencethe excellent customerservicetrackrecord.Ourscalabletechnology-ledplatformissupportedbyeasilyaccessible human interactionwith ‘BeeKeepers’,providing customerswith adedicated accountmanager from the momentthey areon theplatform, assistingthem throughthe on-boardingprocess andhelping them understand the platform functionality. Key Highlights for FY2021: • Customerservicecontinuestobeadistinguishingmarkerofourofferingtoconsumers.We havebuilt andmaintained aculturethatpromotesemployee, andin turncustomer,happiness. • We have consistentlymaintaineda highCustomerRetentionRateof>95%, whichdrives recurring revenue (measured bythe Annual Run Rate Revenue). • Wehave maintainedindustry-leading responsetimes oncommunications, withstrong response times maintained on allchannels (live chat, phone, email). • We maintainedour ExcellentTrustpilotrating of4.6 ★ andapp storeratingsof 4.8and4.7 on theAppleStoreandGooglePlayStorerespectively.OurinternallymeasuredNetPromoter Score score was an industry-leading 63. 15 • Ourexcellent customer service has been reected in theplethora of Awards we have received for 2021, including winning Boring Money’s Best Buy 2021 for ‘Best for Customer Service’. 15 PensionBee’s externally measured NPS is 75. Source: Boring Money, 2022. 5 Focus on InvestmentSolutions Designed for Customers Wehavepartneredwithsomeoftheworld’slargestmoneymanagers(BlackRock,HSBC,Legal& General andState Street GlobalAdvisors) to manage ourcustomers’ pensions. We continuouslyuse thefeedback wereceive fromourcustomers totailor ourinvestmentplan offeringto ourcustomers’ preferences.Having respondedtocustomer demandtoexclude oilproducersfrom theirpensions by partnering with Legal& General to createone of the UK’srst mainstream fossil fuelfree plans in 2020, wethen simpliedour investment planoffering in2021 andpositioned ourESG credentials of our entireinvestment offeringmore prominently. Wewill continueto developinvestment solutions that meet our customers’ needs. Key Highlights for FY2021: • Wemaintainedamarket-leadinginvestmentpropositionbycontinuingourongoing engagement with our asset management partners, solving for customer needs. • Weconduct an annualvalue for moneyexercise, to comparethe price andperformance of our plan range to similar products.We do this to make surewe continue to offer the best value for money plans for our customers in a changing market. • Weareactiveinmanagingrelationshipswithexistingmanagers,toensuretheycontinueto provide the highest levels ofservice and security for our customers. Weregularly engage with new asset managers, continuously scanning the marketfor better value products on behalf of our customers. • We completedthesimplicationofourinvestmentplanofferingtofacilitateenhanced customerdecisionmaking bymakingrelevantcustomerchoicesmoreexplicit.We simplied our product range from nine to seven plans. We transitioned our Match Plan customers to our Tailored Plan(both managedby BlackRock),and ourFuture WorldPlan to ourFossil FuelFree Plan (both managed by Legal & General). • Theremovalofthese plansalso enabledustopositiontheESG credentialsof ourentire investment offeringmore prominently.We continueto further exploreimpact-oriented plans to satisfy growing demand among our customer base. PensionBee Group plc 18 ![]() 19 Annual Report and Financial Statements 2021 ![]() 6 Our Business Model Wedrivevaluebyincreasingour recurring revenuesthroughgrowingourcustomerbase, supportedbyourscalableoperationalplatform PensionBee providesan easy-to-use technology platformfor the massmarket, enabling customers tohavecontrolovertheirpensions.Weadoptasimple,transparentfeestructurebasedonthe pensionplan anindividual choosesaftertheir pensionshavebeen consolidatedon ourplatform.We do not provide nancial advice and we do not charge a fee for the initial consolidation of pensions, noranadditionalplatformfeeoranyone-offfeesforswitchinginvestments.Theongoingannual managementfeerangesfrom0.50%to0.95%ofanindividual’spensionassetsdependingonthe investment plan chosen, with no minimum pension size requirement. PensionBee’s business model is built around the following elements: Efcient Direct-to-Consumer Distribution We haveadirect-to-consumer acquisitionmodel,reecting theimportance ofmanagingthe end- to-endrelationshipwithourcustomersandhavingtotalcontroloverthequalityofexperience, which is key to customer retention. Ourdirect-to-consumerdistributionmodelencompassesscalablemarketingchannels,including search,socialmedia,television,out-of-homeadvertisingandradio.Thebrandinganddigitalproposition resonateswithamassmarketaudience,allowingustoadvertiseefcientlyacrossmostprevailingmedia. We aredisciplined and responsivein our approachto marketing, deployingspend across channels with a focus on rapid payback, on average within the rst few years of acquiring a customer. Recurring Asset-Based Revenue PensionBeeoffersalifetimecustomerproposition,designedtoenableindividualstofulltheir retirementsavingsgoalsandwithdrawalneeds.InvestedCustomersgenerategrowinglifetime value,withourstraightforwardchargingstructuredrivingpredictable,recurringrevenuegrowth that increases with Invested Customers’ wealth. We earnrevenuethrough theadministration ofour customers’retirementsavings. OurRevenue is substantiallyrecurringinnatureastheannualchargesarecalculateddailyasapercentage(basis points)ofthevalueofAssetsunderAdministration(‘AUA’)andwillcontinuetobeearnedonan ongoingbasiswhilstPensionBeeadministersthoseassets. 16 Themixofinvestmentplanshasan impact on the levels of fees charged and therefore Revenue. AUAandRevenuehavehistoricallydisplayedaveryhighdegreeofstabilityandpredictability,testament tothe strengthofthe customerpropositionandPensionBee’s leadingmarketposition. Revenue growthreectscustomers’attitudesandbehaviourswithrespecttocontributions,consolidationof pensionsandwithdrawalsovertime.AUAandthereforeRevenuegrowsthroughexistingandnew clientsaddingmoreinvestments intotheiraccountsthroughpensionconsolidationandcontributions. We aimtominimise assetoutows witha constantfocus onexcellent customerservice andproduct innovation. The directnature of the relationship betweenPensionBee and ourcustomers has resulted in theCompany achieving highlevels of Customerand AUARetention Rates (eachin excess of95% as at 31 December2021) generating predictablelifetime revenues andcash ows. 10 AUAandRevenuearealsoimportantlylinkedtogrowthintheunderlyingmarketvalueofthe investmentscustomersholdintheiraccounts.Stockmarketsgiveanindicationofinvestmentgrowth and themost relevantproxymeasure tendsto bethe movementin themajor globalstock market indices,includingintheUnitedStatesandintheUnitedKingdom.Whilstshort-termuctuations may decreasethe valueof AUA, customers’exposure tothe stockmarket has historicallyincreased their retirement savings, and therefore our AUA and Revenue, over the longer run. Scalability of Operations PensionBee onlyoffers itscustomers highly liquid,scalable investmentmanagement solutions from theworld’slargestassetmanagers.Theinvestmentsolutionstrackprominentglobalindicesand provide unrestricted capacity for inows and the highest levels of liquidity. Wecontinuallyinvestin ourtechnology,productdevelopmentandourpeople inanefcientand disciplinedmanner.PensionBee’soperationsarehighlyscalableandweexpecttobenetfrom operating leverage and increasing cost efciency as we grow. Our customer proposition is tech-enabled, allowing for easyonboarding of customers and intuitive self-servicethroughout acustomer’s lifetime.Weutilise technologyto ensurethatour serviceisas efcientand automatedaspossible, suchthatadding newcustomersand assetshasonly amarginal cost impact. Our technology is scalable and built on dynamic, world-class cloud-native platforms. Weprideourselvesonourexcellentcustomerservice,complementingourdigitalofferingwith dedicated customer account managerswho offer lifetime customer support.The customer success team benets from a single view of the customer, enabling efcient and personalised service. 16 See denitions on pages 30 and 31 of the Measuring Our Performance section of the Strategic Report. PensionBee Group plc 20 ![]() #### PensionBee’s Business Model #### Customer solutionRevenue Customer Fees: c.50-95bps (1) AUA: £2.6bn (2) #### Proven Customer AcquisitionTechnology &Product DevelopmentPeopleMoney Managers Fee BlackRock, HBSC, Legal & General, State Street Global Advisors 1. Customer fees paid based on the range of funds on offer as at 31 December 2021. 2. Assets under Administration as at 31 December 2021. #### Advertising &Marketing Expenses Annual Report and Financial Statements 2021 21 ![]() 7 Market Opportunity We operate in the vast UK private pensions market, with a focus on the rapidly growing pension consolidation opportunity Dened Contribution (‘DC’) Private Pensions Market PensionBee’sproductpropositionisfocusedonDenedContributionpensions.Unlikeemployer guaranteed(nalsalary)denedbenetpensions,denedcontributionpensionsbuild upa pension pot usingpersonal and employercontributions (if applicable)plus investment returnsand tax relief. TheDenedContributionPrivatePensionsMarketcametotheforein2012withtheadventof automatic-enrolment,aregulatoryrequirementforemployerstoenroleligibleemployeesinto workplacepensions.Automatic-enrolmenthasresultedinover10mindividualsactivelycontributing into a DenedContribution workplace pension. 17 In December 2020,the FCA estimated thatthere werea totalof26.7m pensionsaverswithin itsregulatoryperimeter. 18 Overall, theUK’sDC wealth stood at approximately £1.0tr across the average ofthe 2018-2020 period. ThegrowthintheUKDCpensionmarket,bothintermsofnumberofindividualsaversandthe aggregate wealth managed within schemes, is expected to continue owing to the broad shift from DenedBenettoDenedContributionpensionsandthesimultaneousincreaseincontributions supported by regulation. 18FinancialConductAuthority-EvaluationoftheimpactoftheRetailDistributionReviewandtheFinancial Advice Market Review, December 2020. UK Private Pensions Market For atleast the lasttwo decades, successiveUK governments havefocused on ensuringthat individualsintheUKaresavingappropriatelyforretirement,withaseriesofmajorregulatoryand policy initiatives having been introduced over thistimeframe. There is now broad consensus across thepolitical spectrumthat thestatepension alonewillnotprovide sufcientretirement incomeand there isa growingawareness ofa relatedissue, the‘savings gap’,whereby individualsare notsaving enoughtoprovidefortheretirementtheyexpect.Asaresult,theUKgovernmenthaspromotedthe growth of the private pension market. A privatepension istypically atax-efcient wayto savemoney forlater inlife, providing anincome forretirement.WhilstindividualsintheUKmayrelyonanumberofsourcesfromwhichtodraw incomeduringretirement,privatepensionassetsarethelargestcomponentofwealthintheUK, representingagreaterproportionofwealththanothertypesofassets,includingproperty.Private pensions account for approximately 42% of the £300,000 approximate median householdwealth. 17 TheUK privatepensionsmarket isvastand theOfcefor NationalStatistics (‘ONS’)estimatedthe UK’s totalprivate pensionwealthto beapproximately£6.5tr acrosstheaverage ofthe2018-2020 period. 17 17 Ofce for National Statistics - Pension Wealth: Wealth in Great Britain, April 2018 to March 2020, January2022. PensionBee Group plc 22 ![]() Pension Consolidation Market Withinthelabourmarket,individualsareincreasinglymovingjobsmorefrequently.Theaverage person nowmoves jobs 11times 19 intheir career andtherefore stands tobe auto-enrolled ina large number ofpension plans,requiring aconsolidation solution.There aremany potentialadvantages tocombiningmultiplepensionpots,includingkeepingtrackofandmanagingpensionsavings more easily, reducing charges and choosing desirable investments. PensionBeefurther segmentsthe DCPrivate PensionsMarketinto activeworkplace pensions,which benetfromactiveemployercontributionsandthereforearerarelytransferred,andtransferable pensions, including deferred workplace pensions and personal pensions(‘Transferable Pensions’ or the ‘Pension Consolidation Market’). • ActiveWorkplacePensions -approximately£302bnofwealthheldinpensionsintowhich individuals or employers are regularly or actively contributing, usually during working life; and • TransferablePensions(the PensionConsolidationMarket) -approximately £722bnof wealth heldin personalanddeferredworkplacepensions thatarenolongerreceiving employer contributions. These pensions lendthemselves more easily to pension consolidationactivities. PensionBee primarilytargets the PensionConsolidation Market,which represents themajority of the DenedContribution PensionsMarketandhas grownrapidly byapproximately65% fromtheaverage across 2014-2016 to theaverage across 2018-2020. 17 PensionBeeestimatesthatthereareapproximately35mindividualswithanaverageoftwoold pensionstoconsolidate 20 andapproximately4.1mself-employedindividualstakingresponsibility forsecuringtheirretirementincomes, manyof whommay havepreviously contributedto employer pensions,whilstothersmaybeseekingtobenetfroman easyway tomanage theirpension savings. 21 Our customerproposition catersforallofthese individuals,providing bothaconsolidation solution and enabling customers to start a new self-employed pension. 19DepartmentforWorkandPensions-Meetingfutureworkplacepensionchallenges:Improvingtransfersand dealing with small pension pots - December 2011. 20 Calculatedby dividing £722bnof Transferable Pensions across2018-2020, by an averageof 2 pension potsand a transferable pension pot value of £10,273, based on PensionBee data as at the end of 2021. 21 Ofce for National Statistics: Employees and self-employed by industry, February 2022. 2014-20162016-20182018-2020 The Pension Consolidation Market (£ bn) 1,024 808 633 196 437 236 572 302 722 Transferable pensions(the pensionconsolidation market)Active workplace pensions Annual Report and Financial Statements 2021 23 1,400 1,200 1,000 800 600 400 200 0 ![]() 8 Operating and Financial Review 22 Continued Growth across all Key Metrics in 2021 Trading for the nancial year 2021 has been strong and in line with expectations and guidance. We have continued to deliver signicantgrowth across all our major Key Performance Indicators, buildingon the growth achieved in 2020. During 2021, thenumber of Invested Customers (‘IC’) increased by 70% to 117k 23 and Assetsunder Administration ('AUA') increasedby 91% to£2.6bn. 24 Revenue increasedby 103% to £12.8m 25 with growthin Annual Run Rate('ARR') Revenue of85% to £16.3m 26 . Over thelast two years, we have grown our Invested Customer base by a multiple of 3.1x, our AUA by 3.5x, our Revenue by 3.6x and our ARR Revenue by 3.5x. Growth in Invested Customers (000s) Translates into Increasing AUA Base (£m) Which Drives Revenue (£m) 22 See pages 30 and 31 of the Measuring Our Performance section of the Strategic Report. 23 As at31 December 2021.Invested Customers (‘IC’)means those customerswho have transferredpension assets ormade contributions intoone of PensionBee’sinvestment plans. ActiveCustomers (‘AC’) meansall customers whohave requestedto becomeanInvested CustomerbyacceptingPensionBee’s termsofbusiness butforwhomthe transferorcontribution processisnot yetcompletedandall customerswhoare classiedasInvestedCustomers. Registered Customers (‘RC’) measures customers who have started the sign-up process and have submitted at least a name and an email address and includes those customers who are classied as Active Customers. 24As at31 December2021.Assets underAdministration (‘AUA’)isthe totalinvestedvalue ofpension assetswithinPensionBee InvestedCustomers’pensions. Itmeasures thenewinows lesstheoutows andrecords achangein the market value of the assets. AUA is a measurement of the growth of the business and is the primary driver of Revenue. 25Asat31 December2021. Revenuemeansthe incomegeneratedfrom theasset baseofPensionBee’s customers,essentiallyannual managementfees chargedonthe AUA,togetherwith aminor revenuecontributionfrom otherservices. 26 As at 31 December 2021. Annual Run Rate Revenue is calculated using the Recurring Revenue for the month of December multiplied by 12. 22 PensionBee Group plc 24 Dec-19Dec-20Dec-21 3.1x 38 69 117 Dec-19Dec-20Dec-21 3.5x 745 1,358 2,587 Dec-19Dec-20Dec-21 3.6x 4 6 13 ![]() Marketing Investment to further establishthe PensionBee Brand as a Household Name resulted in Strong Customer Growth As at Year End Dec-2021Dec-2020YoY Advertising and Marketing Expenses Advertising and Marketing Expenses (£m)(12.9)(8.2)56% Cost per Invested Customer (£)246232within threshold Customers Registered Customers (thousands) 23 65840363% Active Customers (thousands) 23 17211944% Invested Customers (thousands) 23 1176970% Same Year RC:IC Conversion (% of RC)18%17%+1ppt Inlinewithourgrowthstrategy,wecontinuedtomakeasubstantialinvestmentincustomeracquisition using our diversied marketing approach and demonstrating our ability to efciently deploy a rapidly growingmarketingbudget,whilstretainingatightfocusonreturnoninvestment.Themajorityof the£55mprimarycapitalraisedatthetimeofourIPOinApril2021wasearmarkedformarketing expenditureandAdvertisingandMarketingExpensesincreasedfrom£8.2min2020to£12.9min2021 accordingly, as wesought to capturemarket share andrapidly expand ourcustomer base. During2021andasplanned,themajorityofthemarketingspendwasdeployedacrossthreeprimary channels,beingTV,OutofHomeandPaidSearch.WeincreasedourTVadvertisementsandran extensiveOut ofHome advertisingcampaignsduringopportunemonths. Our‘Feels soGood’brand campaign wasrolled-out nationallyacross allchannels, andwe raisedour proleby becomingthe ofcial pension partner sponsor of Brentford Football Club and through various other initiatives. Our new proprietaryin-house Data Platformdelivered valuable insightsacross allof our core channels,andhelpedtodrivedecision-makingthroughsuccessiveCOVID-19waves.Itallowedus tooptimiseacrosschannelstogrowbothrapidlyandefciently,keepingourCostperInvested Customerinlinewithourdesiredthresholdof£200-250,demonstratingourabilitytocontinueto scale our marketing and distribution channels in a cost disciplined way. Overthecourseoftheyearwewerepleasedtoseetheresultsoftheseinitiativestranslateinto greatercustomerreach.OurRegisteredCustomer(‘RC’)basegrewby63%onthepreviousyear to 658kandour ActiveCustomers (‘AC’)increasedby 44%to 172k.Similarly, wegrewour Invested Customerbaseby70%to117kbytheendof2021.ThisdeliveredanimprovementinSameYear RC:IC Conversion from 17% in 2020 to 18% in 2021. Cost Disciplined Acquisition coupled with High Retention Rates delivered Strong Asset Growth As at Year End Dec-2021Dec-2020YoY Customer Retention Rate (% of IC)>95%>95%stable AUA Retention Rate (% of AUA)>95%>95%stable Opening AUA (£m)1,35874582% Net Flows from New Customers (£m)72943966% Net Flows from Existing Customers (£m)22684169% Net Flows (£m)95552383% Market Growth and Other (£m)27590n/m Closing AUA (£m)2,5871,35891% Wedelivereda91%year-on-yearincreaseinAUAfrom£1,358mto£2,587min2021.Thiswas drivenbyacombinationof thecost-disciplinednewcustomeracquisition,thehighretentionrate of existingcustomers whoincreased their savingswith PensionBee,and market growth.Most ofthe assetgrowth (78%or £955m)was generatedbyNet Flowsfrom NewCustomersandNetFlows from Existing Customers, with the balance (22% or £275m) being accounted for by market appreciation. Growthfrom newcustomers representedmostof theassetgrowth of2021with NetFlowsfrom New Customersof£729m(2020:£439m),reectingourstrategyofcost-disciplinednewcustomeracquisition. We deliverednetows withimprovedefciency. Each£1of marketingexpenditurein2021 generatedapproximately£74ofnetowsascomparedto£64in2020,indicatinganefciency improvement of close to 20%. Annual Report and Financial Statements 2021 25 ![]() Overthe periodwe acquired48,000 (2020:31,000) revenue-generatingInvested Customers.A higherproportionofthesenewInvestedCustomerswereoldercustomerswithacorresponding higheraveragepension size.As such,we haveseen anincrease intheaveragepensionpotsizefrom £19,700 in 2020 to £22,000 in 2021. Ourexistingcustomershavecontinuedtoseetheirsavingsgrow,withNetFlowsfromExisting Customersof£226min2021(2020:£84m).Sinceinception,wehaveconsistentlyenjoyedhigh Customer and AUA Retention Rates of >95% and this trend continued to remain stable in 2021. We sawexisting customersconsolidating additionalpensionsinto theirPensionBeeonlinepensionplan and customerscontributing totheir pensionswhile maintainingrelatively lowlevels ofwithdrawals. AUAgrowthalsoreectedanelementofmarketgrowthof£275min2021(2020:£90m).Asis customary inthepensions industry,our customers'pensionsare investedpredominantly inglobal equitycapitalmarkets,whichexperiencedstrongperformanceduringtheyear,andassuchour asset base beneted from this market appreciation. Resilient Revenue Margin drove an overwhelming majority of Recurring Revenue As at Year End Dec-2021Dec-2020YoY Contractual Revenue Margin (% of AUA)0.69%0.69%stable Annual Run Rate Revenue (£m)16.38.885% Revenue (£m)12.86.3103% We havetranslatedstrong year-on-yearAUA growthof91% over2021 into85% growthinAnnual Run RateRevenue from£8.8m to£16.3m, underpinnedby thestable ContractualRevenue Margin. The ContractualRevenue Marginis theheadline annualmanagement feepaid bycustomers before applying discountsfor incrementalpension savings above£100,000. TheContractualRevenue Margin remained resilient at 0.69% (2020: 0.69%). As the vastmajorityofour Revenueisderivedfromannual managementfeeschargedas a percentageofAUA,thehighretentionofcustomersandAUAmakestheoverwhelmingmajority ofourRevenuerecurringinnature.Therefore,theAnnualRunRateRevenueforDecember2021 enablesbetter measurementofourprogress andprovidesgreatervisibility andpredictabilitywith respect to future years’ Revenue. We Scaled our Business Efciently by Investing in our People, Product Offering and Technology As at Year End Dec-2021Dec-2020YoY Money Manager Costs (£m)(2.3)(0.9)145% Employee Benets Expense (excluding Share-based Payment) (£m) (7.4)(4.5)66% Other Operating Expenses (£m)(6.6)(3.0)116% Technology Platform Costs & Other Operating Expenses (£m) (14.0)(7.5)86% During2021,wemadefurtherinvestmentsinourtechnologyplatformtopositionPensionBee forfuturegrowth.Ourproprietarytechnologyismodern,scalableandsecure.Thecloud-based andAPI-drivenplatformprovidesthefoundationsonwhichtocontinuetobuilddynamicand innovative products, while maintaining fullcontrol over the experience delivered tocustomers in a cost-efcient manner. ConsiderableresourcesweredirectedtowardstheDataPlatform(inparticular,thedevelopment ofitsmachinelearningcapabilitiesandimportingofnewdatasourcesintotheplatform),which has been instrumentalin helping us calibratedecision-making around marketing budgetallocation andinachievingourmarketingobjectives.WerecruitedadedicatedDataTeam,whositwithin thetechnologydepartment,tobuildcapabilityandsupporttheautomationofdataactivitiesin other businessareas.Wededicatedresources towardsmakingongoing efciencyimprovementsin consolidationactivitytodriveproductivity,andoptimisingourtransferprocesses,includingmore straight-through automation of light-touchpension transfers. Continued product innovationis central to ourstrategy. The PensionBee customer propositionhas been enabledby investmentin continuousinnovation and automation,allowing easyonboarding ofcustomersandintuitive lifetimeself-service. During2021,continuousproductinnovations helped toincreaseourcustomerbaseandenablecustomerstocontributemoreintotheirpensions.Our productdevelopmentsreducedfrictionandenabledustoserveourcustomerswithlessandless humanintervention,supportingefciencyimprovementsandoperatingleverageovertime. For instance,welaunchedthe‘EasyBankTransfer’feature,enhancedourin-appdrawdownfeatures, addedadditionalfeaturestoallowtheuseofpersonalisedtaxcodesforcustomersindrawdown, opened up our offering to the self-employed and launched a new ‘Transfer Tracker’, to name a few. PensionBee Group plc 26 ![]() Asaresultofthetechnologyplatforminvestments,theEmployeeBenetsExpenseincreasedto £7.4m,driven bydevelopmentsto improveautomationand anexpansionof engineerheadcount. Headcountincreasedfromapproximately110averagefull-timeemployeesin2020toapproximately 155 in 2021. OtherOperatingExpensesincreasedto£6.6mreectingincreased headcount,acquisitionvolume andotherxedcosts.Thebenetfromtheinvestmentinautomationwillpositionuswellonour path to protability by the end of 2023. Money Manager Costsincreased to £2.3m in2021 at a slightly higher ratethan Revenue, which was duetoanincreaseinthenumberofcustomersselectingfundswithincrementallyhighermoney manager fees. Protability Metrics As at Year End Dec-2021Dec-2020YoY Adjusted EBITDA before Marketing (£m)(3.6)(2.2)-62% Adjusted EBITDA Margin before Marketing (% of Revenue) (28)%(35)%+7ppt Adjusted EBITDA (£m)(16.4)(10.4)-58% Adjusted EBITDA Margin (% of Revenue)(129)%(166)%+37ppt Loss before Tax (£m)(25.0)(13.5)85% Overthecourseof2021,wemadefurtherprogresstowardsprotabilityasoperatingleverage increased, in large part due to the scalability of the technology platform. OneofthekeyprotabilitymetricsthatwemeasureisAdjustedEBITDAbeforeMarketing.This measureincludesMoney ManagerCosts, TechnologyPlatform Costsand OtherOperating Expenses butexcludesAdvertisingandMarketingExpenses(whichgeneratelong-term returnsthroughlong- standing customer relationships), Share-based Payment and Transactions Costs. AchangeinAdjustedEBITDAbeforeMarketingisthereforeanindicatorofshort-termoperating leverage.AdjustedEBITDAMarginbeforeMarketingimprovedfrom(35)%in2020to(28)%for 2021, underscoringthe scalabilityofthe technologyplatform andthe effectivenessof newfeature releases that improved the efciency of customer operations. Thesecond protabilitymetricthatwe measureis AdjustedEBITDA,which capturesAdvertisingand Marketing Expenses but excludes Share-based Payment and Listing Costs. Adjusted EBITDA Margin improved from (166)% in 2020 to (129)% in 2021. Other Costs As at Year End Dec-2021Dec-2020YoY Share-based Payment (£m)(3.9)(2.2)81% Listing Costs (£m)(2.9)(0.6)363% Finance Costs (£m)(1.4)(0.0)n/m Loss before Tax (£m)(25.0)(13.5)85% Taxation (£m)0.30.2n/m Basic Earnings per Share(11.86)p(7.67)p-55% Loss before Taxincreased to £(25.0)m for2021, in line withour strategy of investingin growth. The increasecanbeexplainedbyincreasedAdjustedEBITDAlossasoutlinedabove,togetherwithan increase in the non-cash Share-based Payment, non-recurring Listing Costs and Finance Costs. TheincreaseinShare-basedPaymentcostsispartlyexplainedbytheimpactoftheaccelerated vestingand grantingof optionsat theend of2020. Anothercontributor tothe costincrease wasthe introductionofthenewPensionBeepost-IPOremunerationstructurewhichincludedaDeferred Share Bonus Plan, for which an accrual was recorded. ListingCosts primarilyconsist offeesand expensesincurredin relationto thepreparationfor ourIPO (for which preparation commenced at the end of 2020). Finance Costs arefees associated withthe now cancelled £10mRevolving Credit Facility ('RCF') that we enteredinto with NationalWestminster BankPlc on 22March 2021, aspart ofa prudentliquidity management strategy. The RCF was never drawn, but a cancellation fee was incurred. TaxationincludesenhancedtaxcreditsinrelationtoroutineResearchandDevelopmentrefunds. No deferred tax asset has been recognised for the carried forward losses. Annual Report and Financial Statements 2021 27 ![]() Basic EarningsperShare (‘EPS’)was (11.86)pfor 2021(2020: (6,138.63)p).These twoEPSgures are not directly comparabledue to a changein share capitalas part of thereorganisation ahead of the IPO,togetherwiththeissuanceofnewsharesaspartoftheIPOitselfinApril2021.Adjustingthe 2020EPSfortheimpactoftheIPOgivesacomparableEPSof(7.67)passetoutinNote11ofthe Financial Statements. Financial Position The Group’sbalance sheetremains strong.The cashand cashequivalents balancewas £44m (December2020:£6.7m).Duringtheyear,theGroupenteredintoanewofceleaseagreement which resultedin theincrease inthe rightofuse andlease liabilitybalances. Tradereceivables and payablesgrowthisattributedtorevenue andmarketing andtechnology platformcosts respectively. TheGroup hasno signicantborrowings exceptfor thelease liabilitythat arosefrom theofce lease agreement entered into during the year. On24March2021,PensionBeeGroupplcacquiredalltheissuedsharesofPensionBeeLimited through a sharefor share transaction.Every issued sharein PensionBee Limitedwas exchanged for 800sharesinPensionBeeGroupplc.Everyshareoptionwascancelledandreplacedby800share options.Through theGroupreorganisation, PensionBeeGroupplcissued180,054,400 ordinary shares of £0.001each and reduced its sharepremium to create additional distributablereserves. On 26 April2021, PensionBeeGroupplc issued33,333,333 ordinaryshares of£0.001 eachas partof its InitialPublicOffering(‘IPO’).Eachsharewasissuedat£1.65.Atthesametime,PensionBeeGroup plcissuedfurtherordinarysharesfromshareoptionsexercisedtotaling8,138,194ordinaryshares of £0.001 each. The exercise price for each exercised share option was £0.001. The change in equity and reservesis attributedto theGroup reorganisationand exercise ofshare optionsduring theyear. As of December 2021 the total net asset balance was £43.8m (2020: £6.5m). Netcashand cashequivalentsincreasedby£36.8minthe2021 nancialyeardrivenbytheIPOin April 2021 (2020: net decrease £(3.5m)). Regulatory Capital and Financial Resources PensionBeeLimited,asubsidiaryoftheCompany,isauthorisedandregulatedbytheFCAand thereforeadherestocapitalrequirementssetbytheFCA.Asof December2021,thecapitalresources stoodat £31.7m(unaudited) ascomparedto acapitalresource requirementof£0.9m (unaudited), resulting in acoverage of 33.7x. Wemanage our nancialresources prudently and havemaintained a healthy surplus over our regulatory capital requirement throughout the year. Summary Financial Highlights\* As at Year End Dec-2021Dec-2020YoY Annual Run Rate Revenue (£m)\*\*16.38.885% Revenue (£m)12.86.3 103% Money Manager Costs 27 , Technology Platform Costs & Other Operating Expenses (£m) 28 (16.3)(8.5)93% Adjusted EBITDA before Marketing (£m)\*\*(3.6)(2.2)-62% Adjusted EBITDA Margin before Marketing (% of Revenue)\*\* (28)%(35)%+7ppt Advertising and Marketing Expenses (£m)(12.9)(8.2)56% Adjusted EBITDA (£m)\*\*(16.4)(10.4)-58% Adjusted EBITDA Margin (% of Revenue)\*\*(129)%(166)%+37ppt Loss before Tax(25.0)(13.5)85% Basic Earnings per Share(11.86)p(7.67)p-55% \* See denitions onpages 30 and 31of the Measuring ourPerformance section of theStrategic Report. \*\* PensionBee’s KPIs include alternativeperformance measures (‘APMs’), which are indicatedwith a double asterisk. APMsarenotdenedbyInternationalFinancialReportingStandards(‘IFRS’)andshouldbeconsideredtogether withtheGroup’sIFRS measurementsofperformance.PensionBeebelievesAPMsassistin providingadditional insightintotheunderlyingperformanceofPensionBeeandaidcomparabilityofinformationbetweenreporting periods. A reconciliationto the nearest IFRSnumber is provided inNote 25 of theFinancial Statements, ‘Alternative Performance Measures’ on page132. 27 Money Manager Costs are variable costs paid to PensionBee’s money managers. 28 Technology Platform Costs & Other Operating Expenses comprises Employee Benets Expense (excluding Share-based Payments) and technology and operations costs, together with and Other Operating Expenses. PensionBee Group plc 28 ![]() #### Andrew PensionBee customer since 2019 All my pensions, ## now together in one pot.Utter simplicity! 29 Annual Report and Financial Statements 2021 ![]() 9 Measuring our Performance When looking at the overall performance of PensionBee, we use a range of key performance indicators (‘KPI’s) to monitor and assess our progress against our strategy. #### Financial Performance Measures Revenue 2021: £12.8m 2020: £6.3m 103% RevenuemeanstheincomegeneratedfromtheassetbaseofPensionBee’scustomers,essentially annualmanagementfeeschargedontheAUA,togetherwithaminorrevenuecontributionfrom other services. Annual Run Rate (‘ARR’) Revenue 2021: £16.3m 2020: £8.8m 85% AnnualRun RateRevenue iscalculatedusingthe RecurringRevenuefortherelevant month (December) multiplied by 12. This alternative performance measure has beenselected to provide a more up-to-date metricfor revenue given the amountof AUA in the relevantmonth. Loss before Tax (‘PBT’) 2021: £(25.0)m 2020: £(13.5)m 85% Loss before taxis a measurethat looks atPensionBee’s losses beforeit has paidcorporate income tax. Adjusted EBITDA\* 2021: £(16.4)m 2020: £(10.4)m -58% AdjustedEBITDAistheoperatingprotorlossfortheyearbeforetaxation,nancecosts,depreciation, share based compensation and listing costs. Adjusted EBITDA Margin\* 2021: (129)% 2020: (166)% +37ppt 29 Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of revenue for the relevant year. Basic Earnings per Share (‘EPS’) 2021: (11.86)p 2020: (7.67)p -55% Basic Earningsper Share is calculatedby dividing theloss attributable toordinary equity holdersof the Group by the weighted average number of ordinary shares in issue during the period. \* PensionBee’s Key Performance Indicators include alternative performance measures (‘APM’s), which are indicated with an asterisk. APMs are not dened by International Financial Reporting Standards (‘IFRS’) and should be considered together with the Group’s IFRS measurements of performance. PensionBee believes APMs assist in providing additional insight into the underlying performance of PensionBee and aid comparability of information between reporting periods. A reconciliation to the nearest IFRS number is provided in Note 25 of the Financial Statements 'Alternative Performance Measures' on page 132. 29 A ppt is a percentage point. A percentage point is the unit for the arithmetic difference of two percentages. PensionBee Group plc 30 ![]() #### Non-Financial Performance Measures Assets under Administration (‘AUA’) 2021: £2.6bn 2020: £1.4bn 91% Assets under Administration is thetotal invested value of pensionassets within PensionBee's Invested Customers’ pensions.It measures thenew inows less theoutows and recordsa change in themarket value ofthe assets.This KPI hasbeen selected becauseAUA isa measurement ofthe growth of the business and is the primary driver of Revenue. AUA Retention Rate (% of AUA) 2021: >95% 2020: >95% Stable AUARetention measuresthepercentageof retainedPensionBeeAUAfrom TransferOutsoverthe averageoftheyear.HighAUAretentionprovidesmorecertaintyoffutureRevenue.Thismeasure can also be used to monitor customer satisfaction. Registered Customers (‘RC’) 2021: 658k 2020: 403k 63% RegisteredCustomersmeasurescustomerswhohavestartedthesign-upprocessandhave submitted at least a name andan email address and includes thosecustomers who are classied as Active Customers. Active Customers (‘AC’) 2021: 172k 2020: 119k 44% ActiveCustomersmeansallcustomerswhohaverequestedtobecomeanInvestedCustomerby accepting PensionBee’sterms ofbusiness butfor whomthe transferor contributionprocess isnot yet completed and all customers who are classied as Invested Customers. Invested Customers (‘IC’) 2021: 117k 2020: 69k 70% InvestedCustomersmeansthosecustomerswhohavetransferredpensionassetsormade contributions into one of PensionBee’s investment plans. Customer Retention Rate (% of IC) 2021: >95% 2020: >95% Stable CustomerRetentionRatemeasuresthepercentageofretainedPensionBeeInvestedCustomers overtheaverageoftheyear.HighcustomerretentionprovidesmorecertaintyoffutureRevenue. This measure can also be used to monitor customer satisfaction. Cost per IC (‘CPIC’) 2021: £246 2020: £232 Within threshold Costper InvestedCustomermeansthe cumulativeadvertisingandmarketing costsincurredsince PensionBeecommencedoperationsupuntiltherelevantpointintimedividedbythecumulative numberofInvested Customersat thatpointintime. Thismeasure monitorscostdisciplineof customer acquisition. PensionBee's desired CPIC threshold is £200-£250. Same Year RC:IC Conversion 2021: 18% 2020: 17% +1ppt 30 Same YearRC:IC Conversion percentageis calculated bydividing the numberof InvestedCustomers asat theendof theperiodby thenumberof RegisteredCustomersasat theendof theperiod.This measure monitors PensionBee’s abilityto convert customers through the acquisitionfunnel. Contractual Revenue Margin (% of AUA) 2021: 0.69% 2020: 0.69% Stable Contractual Revenue Margin means the weighted average contractual fee rate across PensionBee’s investment plans (beforeapplying any size discount)calculated by referenceto the amount of AUA held in each plan across the period. 30 A ppt is a percentage point. A percentage point is the unit for the arithmetic difference of two percentages. Annual Report and Financial Statements 2021 31 ![]() 10 Stakeholders We are dedicated to listening to our stakeholders’ views to understand their interests and concerns and proactively engage with what matters to them By seeking to understand our stakeholders' interestsand concerns, we can pay due regard to them duringdiscussionsandconsiderthepossibleeffectourdecisionscould haveonrelevant stakeholder groups. Engagement takes place with all our stakeholder groups throughout the Company across all levels. SuchengagementisreportedtotheBoardtoinformdecision-makinganddiscussions.TheBoard also participates in direct engagement with certain stakeholder groups. A summary ofthe ways in which theCompany engaged with stakeholders havingregard to whatis most likely to promote the long-term sustainable success of the Company follows. 32 PensionBee Group plc ![]() #### Stakeholder Engagement 1 Our Customers How we EngagedInterests and ConcernsOur Responses Continuous high levels of customer engagement: • 42kcalls,32klivechats,109k emailscasesaddressedwithin 24 hours Extensive collection of customer feedback: • 165k emails, live chats and phone calls • c.85%ofcustomersinvitedtosurveysontheirinvestment views • >100 in-depth customer interviews conducted • 500+ customers in the UX community tested new features • Customers invited tosharefeedback withthe dedicated customer engagement team via monthly newsletters Customer ratings: • 2,821publicTrustpilotreviewsduringtheyear(with94% rated5 ★ Excellentor4 ★ Great)ending theyearwith4.6 ★ out of 5 based on 6,288 reviews • NPS score of 63 (againsta nancial services industryaverage of 56) Financial freedom: • A rangeof simple,good valuefor moneyplansto meettheir needs • Clear and transparent charging • Tools to help ensure they are saving enough • Knowing their savings are secure • Being able to easily contact our customer success team Good health: • Peace of mind about their nancial future • Knowingtheirpensiondoesnotcauseharmtosocietyor planet • Having theoption toremove fossilfuels fromtheir pension • Retiring into a safe and fair world Social inclusion: • A pension designed for everyone in society • Investing in companies that pay a Living Wage • Investing in companiesthat prioritise diversityand inclusion by publishing their genderand ethnicity pay gaps Leadership in product innovations: • Launch of new self-employed pension • Launchof‘easybanktransfer’feature,throughOpen Banking technology • Enhanced in-app drawdown features • Enabled useof personalisedtax codesfor customersin drawdown • Roll-out of 2 factor authentication on mobile and web app Investment solutions designed for customers: • Simplication of the plan range from nine to seven plans • Engagedwithassetmanagersonkeytopicsofinterestto ourcustomers-LivingWages,genderandethnicitypay gaps • ESG integration across our core plans • Conducted ourannual Valuefor Money exerciseto ensure customers continue tohave access to goodvalue plans on the market Customer service improvements: • Seasonal Saturday opening • ‘Book your own BeeKeeper’ offered to customers Driving better outcomes for our customers: • Publiccampaignstopushforbetterconsumeroutcomes andpolicyinterventionsontaxrelief,genderinequalities inpensionsaving,pensionswitchingtimesanddiversity on boards • 18customer casestudy interviewspublishedinnationalmedia • CustomerofferincludedaspartofourIPO,towelcome customers as shareholders Annual Report and Financial Statements 2021 33 ![]() 2 Our Employees How we EngagedInterests and ConcernsOur Responses Regular ways to engage in person/virtually: • Weekly Company ‘Show N Tell’ sessions with CEO and Executive Management • Bi-monthly ‘Happiness’ meetings for all employees to discuss wellbeing • Senior Independent Director with specic responsibility for employee engagement via Town Hall and Board-led events • 27 ‘PensionBee Speaks’ events, led by employees • Annual ‘Time to Talk’ event, led by employees Regular surveys/feedback: • Annual Diversity, Inclusion and Engagement survey • Annual manager feedback survey • Anonymous reporting tool for concerns and feedback Further support: • Diversity champions • Mental Health rst aiders Culture and mission: • Feeling aligned with PensionBee’s mission and values • Feeling a sense of belonging and knowing everyone can succeed as themselves Diversity and inclusion: • Diversity & inclusion celebrations and social events • Executive Management leadership on diversity & inclusion at PensionBee • Public commitments to diversity, inclusion and equality • Supporting neurodiverse employees, employees with disabilities and their managers Remuneration: • Pay structure and pay gap reporting and analysis • Blind internal hiring and promotion policy Culture and mission: • Board-led events on gender and work benets • Appointed a Head of Culture, Inclusion and Wellbeing to lead a new program focused on enhancement of values-based culture • Executive Management team-led events covering themes such as discrimination, LGBT+ rights, diversity in technology and responsibility in design • Colleague-led events on monthly themes of body positivity, gender, neurodiversity, activism and celebrating Black History Month and Pride • Employee turnover for 2021 was 10% Remuneration: • New remuneration policy designed to award all employees equity incentives, consistent with historic approach • New performance matrix for each role, aligned to Company’s values and associated culture • Engagement with diversity and inclusion initiatives specically captured within the Executive Management performance matrix Focus on diversity and inclusion: • Diversity initiatives added as a Company-wide skill on the performance matrix to further encourage participation • Internal hiring process anonymous and task-based • ‘Equality and Diversity in the Workplace’ training completed by all employees • 27 ‘PensionBee Speaks’ events held, with guest speakers from the National Autistic Society, Deafblind UK, AS Mentoring (Autism awareness training) and covering topics such as designing products with accessibility, disability and neurodiversity in mind • Working towards becoming a ‘Disability Condent’ employer • Maintained approximately 50:50 gender parity, consistent with our commitment to the Women in Finance Charter • Publicly committed to targets under the Race at Work Charter • Diversity, Inclusion and Equality Policy with public targets for 2022 published • Disclosing company and investor signatory of the Workforce Disclosure Initiative for 2021 (scoring 90% against a sector average of 69%) COVID-19: • Offered fully remote working to all employees from March 2020 • All employee engagement opportunities and events are offered online to ensure everyone can participate or attend PensionBee Group plc 34 ![]() 3 Our Shareholders How we EngagedInterests and ConcernsOur Responses • Regular virtual engagements including one- to-one shareholder meetings, roadshows and shareholder conferences • Regular communication of nancial and operational results, including quarterly trading statements and presentations to shareholders and analysts • Rapid responses provided to incoming shareholder queries • All of our employees are, or will become, shareholders in PensionBee • We welcomed many of our customers as shareholders at the time of our IPO Corporate governance: • Adhering to the highest standards of corporate governance • Compliance with public company reporting and procedures Business and performance: • Resilience in a competitive market • Business integrity • Highest standards of data and information security • Business aligned with incoming regulation and market changes • Performance against targets • An experienced and committed Board and Executive Management team • Low attrition rates • Liquidity in the shares Corporate governance: • Became a publicly listed company on the High Growth Segment of the Main Market of the London Stock Exchange • Expected subsequent transition to the Premium Segment, achieving the highest standard of corporate governance in the UK • Structured a customer offer as part of the IPO to enable customers to become shareholders • Voluntary compliance with the UK Corporate Governance Code from IPO • Voluntary disclosures made in accordance with the UK Corporate Governance Code Leadership: • Further developed the Executive Management Team, with new additions including Chief Design Ofcer and Senior Legal Counsel Shareholder Relations: • Shareholders relations managed internally by CEO, CFO and CCO • Appointed two corporate brokers to support engagement with shareholders • Appointed external PR agency to support engagement with press, the analyst community and the shareholder community Annual Report and Financial Statements 2021 35 ![]() 4 Our Communities How we EngagedInterests and ConcernsOur Responses Surveys : • Conducted 20external surveys reaching>6,000 people regarding theirviews on climatechange, savinghabits, the impacts ofthe pandemic andpension transferexperiences Focus groups and interviews: • Conducted external focus groups with customers and non-customers on ‘Help us reimagine the retirement savings system for women’ • Held interactive student workshops and careers presentations with Q&A with our partner school in Poplar Strategic partnerships: • Active participant, signatory and disclosing company under the Workforce Disclosure Initiative • Member of ShareAction’s Good Work Coalition, joining public campaigns Creating a fair and just society: • Equal pay for equal work • Transparent, shared parental leave policies • Closing the gender pensions gap • Closing the ethnicity pay gap • All companies paying wages that represent the true cost of living in the UK Businesses thatstrengthen the societies in whichthey operate: • Widening participation of under-represented groups in pensions and the nancial services industry • Supporting local communities, partnership building • Businesses that work to make society fairer Creating a fair and just society: • Published Gender Pensions Gap report in national media • Published our own Gender Pay Gap • A member of the ABI’s Transparent Parental Leave and Pay Initiative • Accredited Living Wage Employer, paying allemployees a London Living Wage regardlessof where they live in theUK Businesses that strengthenthe societies in whichthey operate: • Diversity, Inclusion and Equality Policy with public targets published • Joined the steering group of the Diversity Project • Signed the Tech Talent Charter to drive greater inclusion and diversity in the UK tech sector • Held interactive careers workshops with partner school based on needs and requirements of the students • Joined the Social Mobility Pledge • Donated IT equipment to our partner school • Better reected our diverse customer base in our marketing campaigns • Employees volunteered in schools across London with the Careers and Enterprise Company’s Give an Hour campaign • Supported numerous public campaigns led by the Good Work Coalition to get FTSE100 companies and supermarkets to start paying a Living Wage PensionBee Group plc 36 ![]() 5 Our Suppliers How we EngagedInterests and ConcernsOur Responses Supplier onboarding process: • Assessed, reviewed and selected suppliers that have adequate controls in place, particularly certications of independent auditing • Chose suppliers that ensure our customer data is not at risk of being exposed or misused with voluntary completion of Data Protection Impact Assessments in some instances Maintaining and actively monitoring the relationship: • Managed relationships with suppliers, to ensure appropriate service provision and be front of line for feature enhancements or other improvements • Monitored reporting on SLAs, transactions volume, interaction with PensionBee customers • Engaged with Stewardship teams of our asset managers Supply chain mapping: • Engaged with our biggest suppliers on their workforce issues • Gathered workforce data on our biggest suppliers Supplier onboarding process: • Extensive due diligence and suitability assessment subsequent to a detailed solution comparison for our requirements • Fair expectation in the delivery of projects Ongoing relationship: • Insight into customer trends and survey results • Product and service innovation • Value creation and expertise • Collaborative working opportunities • Effective governance and operations • Prompt payment Oversight of supply chain activities: • London Living Wages • Safe and healthy working conditions Supplier onboarding process: • PensionBee Supplier Management Policy • PensionBee Responsible Supplier Policy and Code of Conduct • PensionBee Information Security Policy Sharing best practice on workforce transparency and disclosures: • Disclosing company and investor signatory of the Workforce Disclosure Initiative for 2021 • Asked our suppliers to also disclose under the Workforce Disclosure Initiative • Asked that those working in the supply chains of our top 20 suppliers (84% of our supply chain) are also paid a Living Wage • Checked with suppliers that workers in their own supply chain are protected by effective discrimination and harassment policies in the legal jurisdiction in which they operate Multiple engagements with Stewardship teamsof our asset managers to share our customers’ views on voting around Living Wage, pay gaps and other areas of importance Annual Report and Financial Statements 2021 37 ![]() 6 Government and Regulators How we EngagedInterests and ConcernsOur Responses Direct engagement: • Regular engagement with Government Ministers, other government ofcials and regulators at meetings and events • Regularly invited to join Government working groups • Wrote directly to MPs, Government departments and policy makers on matters of crucial importance to our customers Government and regulatory consultations: • Contributed to government consultations regarding the development of regulation and policies which impact upon PensionBee, its customers and all pension savers • Regulatory matters were regularly considered by the Board Public commentary: • Frequently commentated on issues of national importance to our customers and all pension savers, including Normal Minimum PensionAge, charges, switching, fee transparency and open pensions Cross-industry working: • Member of industry bodies for pensions and ntech The Financial Conduct Authority is guided by three key objectives to: • Promote effective competition in the interests of consumers in the markets for regulated nancial services • Secure an appropriate degree of protection for consumers • Protect and enhance the integrity of the UK nancial system The Minister for Pensions and Financial Inclusion and the Department for Work and Pensions ('DWP') seeks to deliver a reliable, high-quality pensions system in which customers have condence DWP’s delivery body Money and Pensions Service, MaPS, offers impartial, free money and guidance and leads on the Pensions Dashboards workstream Direct engagement: • Steering Group member of Government’s Pensions Dashboard working group • Member of the Pension Minister’s Statement Season working group • Member of DWP’s Costs and Charges Disclosure Initiative • Member of the Pension Scams Industry Forum • Regular engagement via roundtables with DWP on Simpler Annual Benets Statements, Charge Cap, Transfer Regulations and Drawdown Tool Government consultations: • Responded to 10 consultations, including FCA’s Diversity and Inclusion in the nancial sector, DWP’s Social Risks and HM Treasury’s Normal Minimum Pension Age Public commentary: • Speaker at Treasury Connect Conference • Regularly invited to comment on changes to the UK listing regime and launch of the Kalifa Review Cross-industry working: • Member of the ABI • Member of Innovate Finance • Key contributor to COADECs Open Pensions agenda PensionBee Group plc 38 ![]() 7 Our Planet How we EngagedInterests and ConcernsOur Responses Investment offering: • Offering a core range of fully ESG screened plans • Working with managers to expand and increase screening on all plans • Offering the UK’s rst mainstream fossil fuel free pension • Asserting customer views for voting on climate issues with money managers Minimising our environmental impact: • Fully remote working offered to everyone at PensionBee • Recycling or donating used IT equipment and ofce furniture • Paperless pension provider Strategic partnerships: • Founder pledge partner of the ‘Make My Money Matter’ campaign • Supported ShareAction coordinated shareholder- led resolutions to stop fossil fuel lending Investments: • Pensions that build a safe, healthy planet for everyone • A just and fair transition to a low carbon economy • Greenwashing • Minimising the environmental impact of the biggest corporate polluters A safe, clean world to retire in: • Fair access to the world’s resources • Vaccine equity • Tacking climate poverty to protect the most vulnerable societies • Removing plastics from our ecosystem • Halting deforestation Investment offering: • Implemented screening policy and integration of ESG into investment range • Closed plans that could not be ESG screened • Published our ESG Policy • Completed SASB reporting 2021 • Hired a dedicated ESG Manager Minimising our environmental impact: • Completed Streamlined Energy and Carbon Reporting (SECR) 2021 • New ofce that uses 100% renewable REGO sustainable green electricity • Continued to be one of the UK’s only fully paperless pension providers • Cloud-hosted web services remove the needfor servers • Fully remote working offered to all employees to reduce travel • Bicycle storage and showers available for those who wish to cycle to work • Old IT equipment donated to our partner school • Old ofce equipment recycled Strategic partnerships: • Campaigned publicly for industry to reduce widespread use of paper • Publicly supported multiple shareholder resolutions ledby ShareAction to stop fossilfuel nancing by major banks Annual Report and Financial Statements 2021 39 ![]() #### Section 172 Statement Section172oftheCompaniesAct2006(‘s172’)requiresDirectorstoactinthewaytheyconsider, ingoodfaith,wouldbemostlikelytopromotethesuccessoftheCompanyforthebenetofits shareholders asa whole and,in doing so,have regard tomatters including theitems set outin the table that follows. The Board seeksto understand and carefully considerour key stakeholders' interests,concerns and perspectives. The Board recognises that each decision will have a different impact and relevance to eachstakeholder,soasoundunderstandingoftheirprioritiesiskey.TheBoardexercisesindependent judgement whenbalancing anycompeting interests inorder todetermine what itconsiders tobe the most likely outcome to promote the long-term sustainable success of the Company. Whilst the Board engages directly with some groupsof stakeholders, engagement takes place at all levelsofthe Company,acrossthebusiness.Feedbackfrom engagementbelowandatBoardlevel is reported back to the Board and the Board Committees to help inform Board decision-making. FurtherdetailonhowtheBoardoperates,includingcertainofthemattersitdiscussedduringthe year, havingregard to itss172 duties, arecontained onpages 63 to68 of theCorporate Governance Statement within the Corporate Governance Report. Furtherdetails andspecic examplesofhowtheBoard andCompany engagewithour stakeholders, and their interests and needs, can be found above on pages 32 to 39 of this Stakeholders section. Section 172 RequirementFurther Information The likely consequences of any decisions in the long term About Us, pages 9-15 Our Strategy, pages 16-18 Our Business Model, pages 20-21 Operating and Financial Review, pages 24-28 Measuring our Performance, pages 30-31 Stakeholders, pages 32-40 Managing our Risks, pages 52-55 The interests of the Company’s employees About Us, pages 9-15 Stakeholders, pages 32-40 ESG Considerations, 42-51 The need to foster the Company’s business relationships with suppliers, customers and others About Us, pages 9-15 Our Strategy, pages 16-18 Stakeholders, pages 32-40 ESG Considerations, pages 42-51 The impact of the Company’s operations on the community and environment About Us, pages 9-15 Our Strategy, pages 16-18 Stakeholders, pages 32-40 ESG Considerations, pages 42-51 The desirability of the Company maintaining a reputation for high standards of business conduct Managing our Risks, pages 52-55 Corporate Governance Statement, pages 63-68 Audit and Risk Committee Report, pages 74-79 The need to act fairly as between shareholders and the Company Stakeholders, pages 32-40 ESG Considerations, pages 42-51 Corporate Governance Statement, pages 63-68 PensionBee Group plc 40 ![]() 41 Annual Report and Financial Statements 2021 ![]() 11 ESG Considerations Introduction PensionBee’smissionistomakepensionssimple,sothateveryonecanlookforwardtoahappy retirement. We workto make this visiona reality forour customers, in the formof nancial freedom, good health and social inclusion. At PensionBeewe are guidedby vecore values, whichensure thatwe alwaysdo the rightthing by all our stakeholders. These values are Love, Honesty, Quality, Simplicity and Innovation. WebelievethateffectivelymanagingourEnvironmental,Social,andGovernance(‘ESG’)priorities willhelppreserveourresilienceanddrivelong-termvalueforallourstakeholders.Wepursueour ESG worktransparently, disclosing ourtargets and relevantmetrics. We believethis approach supports accountability and helps our stakeholders to be informed about our progress. During2021,weintegratedESGintoourinvestmentrange,closingtwoplansthatcouldnotbe screened under ourESG policy. Wecontinued to minimiseour impact onthe environment through ourremoteworkingpolicyandasapaperlessprovider,encouragedotherpensioncompaniesto stopsending outmillionsofpaper statementseachyear.We alsohiredadedicated ESGmanager, who will lead on our reporting and assist with our stakeholder engagement work. This yearwe disclosedunder the SustainabilityAccounting Standards Board(‘SASB’) framework, the WorkforceDisclosureInitiative(‘WDI’)andtheStreamlinedEnergyandCarbonReporting(‘SECR’) frameworkforthersttime.Aspartofourcommitmenttoincreasingourtransparencyinallthe strandsof ESG,wewill discloseunderadditional frameworksasdata becomesavailableandin the area of climate-related disclosures as it relates to future incoming regulation. PensionBee Group plc 42 ![]() 1 Environmental (Our Planet) As anonline pensionprovider witha total workforceof 177individuals 31 anda smallofce footprint, PensionBee has a relativelysmall direct impact in terms of theenvironment and other sustainability issues. However, withAssets under Administrationof approximately £2.6bn atthe end ofthe 2021, wehavetheopportunitytohaveagreaterinuenceandpositiveimpactthroughtheportfolios managed by our asset manager partners . Integration of ESG into our Investment Plans Asaresultofindex-basedinvesting,ourcustomersaretheownersofthousandsofcompanies aroundtheworld.AtPensionBee,webelieveinthe‘engagementwithconsequences’approach, meaningwewanttoworkwithallcompaniestohelpthembecomebettercorporatecitizens andcreate aninvestmentsystemthatrewards positiveimpactonoursociety andourplanet. Nevertheless,werecognisetherewill alwaysbesomecompaniesthatitisnotpossibletoengage with asa resultof their businessactivities andthat manyof ourcustomers wish toentirely exclude certain companies from their pensions. Through2021,weworkedwithourassetmanagerstointroduceESGscreeningforviolatorsof theUnitedNationsGlobalCompact(‘UNGC’),manufacturersofcontroversialweapons 32 andto increase screenson tobaccoandfossil fuels.Additionally, andas partof ourongoing commitment to screeningand integrationof ESGissues, weclosed twoinvestment plans (theMatch Planand the Future World Plan) that could not be sufciently screened due to legacy components. We seekto apply baselineESG exclusionary screenswhere both theasset class andthe plan investment objectives allow. Firstly, screens can be applied to equities and xed income but cannotyetaseasilybeappliedtogilts,governmentbonds,cashoralternativeinvestmentssuch as commoditiesor REITs.Secondly, otherobjectives, suchas ‘values /religion-based investing’,will take precedence over any screens. Theequityandxedincomeportionsofourcoreplanrangearefullyscreenedforviolatorsofthe UNGCandmanufacturersofcontroversialweapons.Screenedplansare:theTailoredPlan,Tracker Plan, Fossil Fuel FreePlan and Pre-Annuity Plan, which togetherrepresent over 93% ofthe asset base. Inadditiontoapplyingbaselinescreens,wearereducingouroverallexposuretotobaccoand thermalcoalovertime.TheTailoredPlan,ourlargestplanbycustomersandassets,isalso>98% screened fortobacco, thermalcoal, civilianrearms andnuclear weapons.Our assetmanagers use FTSE and MSCI denitions for their exclusions. 31 As of 31 December 2021. Includes 172 UK employees, 1 UK contractor and 4 non-UK contractors. 32 Controversial weapons are weapons that have an indiscriminate and disproportional impact on civilian populations. A number of international conventions and treaties prohibit or limit the use of these weapons, which are dened as anti-personnel landmines, cluster munitions, and chemical and biological weapons. Annual Report and Financial Statements 2021 43 ![]() Our sustainableoption,the FossilFuel FreePlan,was createdand introducedindirect responseto customerdemandin2020,andwastherstmainstreamplanofitstype.TheFossilFuelFreePlan screensoutcompanieswithprovenorprobablefossilfuelreservesandcompaniesthatprovide servicesto thefossil fuelindustry alongwith tobaccocompanies, controversialweapons companies andUNGCviolators.TheindexittrackstiltstowardsParis-alignedcompaniesusingaTransition PathwayInitiativemethodology.Weintroducedthisinvestmentplantocaterforthe growing number of customers who want a pension that tackles climate change. Customer Surveys In2021weinvitedapproximately85%ofourcustomerbasetoparticipateinasurveyontheir investment views.We regularlysurvey ourcustomers toensure thatthe investment planswe offer continue tomeettheir evolvingneeds andviews. Wealso usethissurvey datato engagewith our moneymanagers onthe environmentalissues ofmost importanceto ourcustomers andto publicly supportotherinstitutionalinvestorsintheirshareholder-ledresolutions.In2021weusedsurvey datafromcustomersinourTailoredPlantoencourageourmanagersforchangethroughvoting. Asaresultofthosesurveyswearenowprogressingtowardsobtainingourownvotes,whichwill meanthatinthefuturewecanvotedirectlyonthemostimportantissuesforourcustomers,and not through the money manager. CustomersinourFossilFuelFreePlanalsoexpressedadesiretoexpandtheexclusioncriteriaof theplanbyremovingcompaniesthatprovideservicestothefossilfuelindustry.Weapproached Legal&General,themanageroftheplan, whomadeacommitment tobothremovingthese companiesbut alsocontinuingtoevolve theplaninthefuture, inlinewiththe viewsofinvestors. Thissurveyalsorevealedagrowingnumberofcustomerswhowantapensionthatdirectlyplays apartin solvingtheworld’sbiggestenvironmental challenges,somethingthatwehavebegun to look at.We will continueto take acustomer-led approachto our investmentsin 2022 andbeyond. Minimising our Impact on the Environment Weofferfullyremoteworkingtoallemployees,whichgreatlyreducescommutingemissionsfor thosewhowishtoworkpermanentlyfromhome,aswellasallowingustorecruitfromfurther aeld.Wealsohavelowbusinesstravelemissionsasmostofourmeetingsareheldvirtuallyorin centralLondon,where wearebased.Ourofceiscentrallylocated andeasilyaccessiblebypublic transport. We also offer bike storageand showers for those who wish torun, walk or cycle. Our new ofce premises on BlackfriarsRoad use 100% renewable REGO sustainablegreen electricity and are committed to reducing carbon emissions each year. PensionBeeisapaperlesspensionprovider.Ourcommunicationsaredigital,withannual statementsavailabletodownloadintheBeeHive.Weestimatethepensionsindustrystillsends out40mpaperpackseachyearbypostandwehavelongcampaignedforotherprovidersto reduce their use ofpaper. We donateold workinglaptops to ourpartner school,Langdon Park School,which areused bytheir careers service to increase employabilityprospects through online training and skills development. Other ofce equipment is recycled or given away to employees. Environmental Awards During2021,wewereproudtohaveachievedrecognitionforourfocusonandachievements relating to our environmental impact, including: • Winner:FinancialTimes&InvestorsChronicleCelebrationofInvestmentAwards- ‘ESGChampion - Innovation’. (Fossil Fuel Free Plan) • HighlyCommended: (InvestmentWeek) InvestmentMarketing &Innovation Awards- ‘BestUse of Market Research’. (Fossil Fuel Free Plan) • Shortlisted:BusinessGreen Awards-‘Marketing CampaignoftheYear’ and‘ESGInvestor ofthe Year’. • Shortlisted: Growth Investor Awards - ‘Industry Game Changer’ and ‘ESG Champion of the Year’. • Shortlisted: Financial Times & Investors ChronicleCelebration of Investment Awards -‘ESG Company of the Year’, ‘Community’ and ‘Innovation’. Disclosures ThisyearwedisclosedundertheSustainabilityAccountingStandardsBoard(‘SASB’),Workforce Disclosure Initiative('WDI') andStreamlined Energy& Carbon (‘SECR’)reporting frameworksfor the rsttime.As partof ourcommitment toincreasing ourtransparency inall thestrands ofESG, wewill discloseunder additionalframeworks asdatabecomes availableandin thearea ofclimate-related disclosures as it relates to future incoming regulation. Webegan toreportunderthe SustainabilityAccountingStandardsBoard (SASB),(under ourprimary SICS industry Financials- Asset Management & CustodyActivities) and began work onour own ESG materiality assessment. WehavealsobegunreportingunderthenewStreamlinedEnergy&Carbon(‘SECR’)Reporting requirements.We havereported onallof theemissionsources requiredunderthe CompaniesAct 2006 (Strategic Report and Directors’ Reports) Regulations 2018. The SECR disclosure can be found onpages 97 to 103 of the Director’s Report within the Corporate Governance Report. PensionBee Group plc 44 ![]() 2 Social (our Employees, our Customers and our Communities) Diversity & Inclusion Wehaveawellestablishedhistoryoffosteringdiversityandinclusion.Diversityandinclusionare alignedwith ourvision ofliving inaworldwhereeveryonecan lookforward toa happyretirement.We believe that oneaspect of achievinga happy retirementis social inclusion. In2021,wepublishedour Diversity,InclusionandEqualityPolicy,whichoutlinesourapproach todiversityandpubliccommitments.Ouraimisforourteamtoberepresentativeofallareasof society,acrossalllevelsofthebusiness,tobetterreectandrepresentourdiversecustomerbase. We welcomeeveryone regardless ofgender, race, origin,religion, size,age, sexuality ordisability and will not tolerate any conduct which harms others. We are committed to: • Providing equality, fairness and dignity for everyone in our team. • Opposing and preventing all forms of unlawful discrimination. • Creatingaworkingenvironmentfreeofbullying,harassment,victimisationandunlawful discrimination,whereeveryperson’sindividualdifferencesandcontributionsarevaluedand respected. We are working towards the following goals: • Maintaining at least 50% women and minority gender balance at all levels. • Increasingrepresentation of allminority ethnicitiesto matchthe UKpopulation acrossall levels of the business (as dened by the 2011 census). • In2021,wemaintainedourtargetof50%femalerepresentationontheBoardandExecutive Management Team and achieved gender parity across all levelsof the business, with more than 40% of employees being from minority ethnic groups across the Company. • In theworkplace, our ambitionis tocreate the kindof workplaceall PensionBee employeeswant towork at,andas suchweare focusedonpromoting equality,diversityand inclusion,preventing unlawfuldiscrimination,respectingandprotectinghumanrightsandensuringthateveryone feels respected and safe at work. Annual Report and Financial Statements 2021 45 ![]() Composition of PensionBee’s Workforce in Leadership Positions by Race or Ethnicity 36 Race or Ethnicity CategoryBoard LevelExecutive Management Level Asian or Asian British0%13% Black, African, Caribbean or Black British 0%13% Mixed or Multiple ethnic groups0%0% Latinix/Hispanic0%0% Other ethnic groups0%0% White100%74% Diversity Awards In2021,we wereproudtohaveachievedrecognition forourfocusandachievementsin diversity, including: ★ Winner: FTAdviser Diversity in Finance Awards - ‘Employer of the Year’. ★ Highly Commended: FTAdviser Diversity in Finance Awards - ‘Trailblazing Company of the Year’. ★ Shortlisted: PensionsAge Awards - ‘Diversity’. ★ Shortlisted: FTAdviserDiversity inFinanceAwards -‘Employer ofthe Year’and ‘Trailblazing Company of the Year’. ★ Shortlisted: AltFiAwards -‘Fintech Of TheYear’ and‘Diversity andInclusion Initiative OfThe Year’. Workforce Disclosure Initiative In 2021, PensionBeedisclosed for therst time under theWDI. The WDI aimsto improve corporate transparencyandaccountabilityonworkforceissues,providecompaniesandinvestorswith comprehensive and comparable data and help increase the provision of good jobs worldwide. Workforce Composition Asof31December2021,PensionBeehadatotalworkforceof177individuals. 33 Weachievedan approximate50:50gendersplit,with51%ofemployeesidentifyingasfemale,49%identifyingas male and 1% identifying as non-binary. 34 WeconductanannualDiversity,InclusionandEngagementsurveyinJuneeachyear,whichallemployees are invitedto participate inon avoluntary basis,the results of whichare shown belowfor 2021. Composition of PensionBee’s Workforce by Race or Ethnicity 35 Racial or Ethnic Background Percentage of Employees UK as per 2011 Census London as per 2011 Census Asian or Asian British10%8%19% Black, African, Caribbean or Black British 17%3%13% Mixed or Multiple Ethnic Groups10%2%5% Latinix/Hispanic3%1%3% Other Ethnic Groups1%1%3% White58%86%60% Composition of PensionBee’s Workforce in Leadership Positions by Gender 36 Seniority Level Percentage of Workforce Percentage FemalePercentage Male Board3%60%40% Executive Management5%50%50% 33 Includes 172 UK employees, 1 UK contractor and 4 non-UK contractors. 34 Data excludes 9 individuals who did not self identify. 35 Data as of June 2021. PensionBee’s Workforce includes all permanent employees but excludes the Board. 36 Data as of June 2021. PensionBee’s Workforce includes Board and Executive Management. PensionBee Group plc 46 ![]() Our rst year disclosure score under the WDI was 90%, as compared to a nancial sector average of 69% and an average all company disclosure score of 68%. PensionBeeisalsoaninvestorsignatoryoftheWDI,partofaninvestorcoalitionof53institutions, with $7.5tr in assets undermanagement, that comes together toset the global standard for workforcedisclosuresandtocampaignfortheimprovementofconditionsofworkersaroundthe world. Paying a Living Wage PensionBeeisanaccreditedLivingWageEmployer,furtheringitsmissiontochampiondiversity andrepresentation inthepensions industry.Wepay allouremployees aLondonLiving Wageata minimum, regardless of where they are located across the UK. PensionBeeisalsoamemberofShareAction’sGoodWorkCoalition,whereweregularlysupport public campaigns to addressincome inequality,tackle in-workpoverty andlobby FTSE-listed companies to pay their employees a fair wage. Gender Pay Gap AsamemberoftheWomeninFinanceCharter,whichseekstoseegenderbalanceatalllevels across nancialservices rms,we regularly reportpublicly onfemale representation. Wehave achieved 50% female representation across our employee base, across all levels of our business. 37 As at31December 2020,PensionBee measureda medianhourly paygap ofjust4% anda median bonuspaygapof0%amongouremployees.ThisgapwasinlinewithPensionBee’stargetof0% withavarianceof5%aboveorbelowowingtotheoverallsizeoftheemployeebaseto1.6%as measured in December 2021 . Pay Gap Number of Employees Median Hourly Pay Gap1.6% 138 Median Bonus Pay Gap0% 138 There is increasing evidence that gender-equality interventions deliver benets, both in terms of worker satisfaction and business performance. We intend to continue to: 37 Data as of September 2021. • Recruit women who have the potential to reach senior management. • Support the career development and progression of women at mid-tier level to senior roles. • Recruit females into roles thattraditionally do not have gender diversity, suchas developers and other technology roles. PensionBee’s Shared Parental Leave Policy Becomingaparentisalifechangingmomentandprovidingsupportforallnewparentsasthey navigatethisstageintheirlifejourneyiskey.OurSharedParentalLeavePolicyaimstoaddress someofthechallengesthatfaceparents, andsupporttheminmaintaininganengaging,and fullling careeralongside their newresponsibilities and appliesto anyonetaking on parentalduties, regardless of their biological relationship to the new arrival and regardless of gender. Employee Engagement Aligningwithour valuesofHonestyandLove, wetakeactivestepsto involveandconsultemployees where we can, tomake sure everyone is listened to andwell represented. We have a numberof on- going initiatives in place to make sure our employees are listened to and well represented: • Weekly all-Company Show & Tell meetings with CEO and Executive Management team. • ‘Happiness!’ meetingsfor employees todiscuss theirwellbeing withtheir manager bi-monthly. • Annual Diversity, Inclusion and Engagement survey. • Annual manager feedback survey. • Workforce engagement events with the Board. • Anonymous channels for employees to submit any requests, concerns, issues they may have. • ‘DiversityChampions’ appointedwiththe aimofhelping representemployeesandto promote diversity and inclusion within the Company. • Qualied Mental Health First Aiders, trainedto provide mental health supportto our employees. In2021,wewerepleasedtohaveinitiated‘TownHall’meetingsforallemployeestohavetheopportunity tomeetandengagewiththeBoard,addressingemployees’queriesandconcerns.OurSenior IndependentDirector,MaryFrancisCBE,theDirectorresponsibleforemployeeengagement,hosted our2021employee engagementevent,facilitating discussiononthemessuggestedby andvotedforby employees,including themesfrom thediversity surveythisyear.All ourevents andmeetings arehosted online in order to maximise participation and inclusion. We also appointed a Head ofCulture, Inclusion and Wellbeingto lead a newprogram focused onthe enhancementof ourvalues-based culture. Annual Report and Financial Statements 2021 47 ![]() Anotherinitiativethatweareproudofisour‘PensionBeeSpeaks’series,whichprovidestheopportunity for employees, or friends of PensionBee, to lead talks on issues that they are passionate about, raising awarenessand empoweringour employeestospeak up.Examples included:anti-racistand anti-sexist hiring, trans inclusion, travellerrights, the body positivity movement andabortion rights. Measuring our progressandseekingfeedback fromouremployeesonhow wearefaringis important.OurannualDiversity,InclusionandEngagementsurveyofallouremployeesexplores themesrelatedtowell-being,longevityandremuneration.Thedatasuggeststhatpeoplelargely feelalignedwiththecompany’s mission,visionandvaluesandthattheirjobhelpsthemstay connected to PensionBee’s goals. Customer Engagement Ourmission istomakepensions simple,sothateveryonecan lookforwardtoa happyretirement. Wework tomakethisvision arealityfor ourcustomers, inthe formof nancialfreedom, goodhealth andsocialinclusion.Wehelpourcustomerstakecontroloftheirnancesandhelpghtfortheir rights as savers. We act to prevent ourcustomers’ investments from damaging their health, so they canenjoybiggerpensionsforlonger.Wesupportsaversfromallsocialbackgroundsandaimto address nancial inequality wherever it exists. Thereareanumberofwaysinwhichweengagewithourcustomers.Theyregularlyreceivethe opportunitytosharetheirfeedbackviaourdedicatedEngagementteam,customercasestudy interviews, by email, or through one of the many surveys we run on a variety of topics. Duringthecourseof2021,PensionBeecustomersshared165,000piecesoffeedback(throughemail, livechatorphonecall),whichwastaggedandrecorded,andwhichhelpedtodriveourproduct road map, making sure that we prioritised features that resonated with our customers’ needs. Customerinterviewsformedanotherintegralpartofourengagementwork.Weconductedover 100in-depthcasestudyinterviewsin2021,ledbyourproductdesignandengagementteams.In 2021,our customers’voicesandstories werefeaturedwidelyacross nationalmedia,amplifyingour customers’ voices and serving to change perceptions of pensions and deepen the understanding of theexperiences ofordinary pensionsavers.We dothis inorderto improvethepensions systemfor all savers in the UK. Closing the Gender Pensions Gap Currently,anobstacletoachievingnancialfreedomforeveryoneisthegenderpensionsgap, whichisonaverage38%andalmost60%insomepartsoftheUK. 38 Webelievethatboldaction is requiredto challengethis gap,so thatwomen canenjoy similarlevels ofwealth inretirement as men.Thisisparticularlyimportantas womentendtolive longerandoftenbear theirowncarecosts. 38 Source: PensionBee research: ‘2021 gender pensions gap analysis by region’. Would you recommend working at PensionBee to a friend? 4% Unfavourable 4% Rather not say 92% Favourable Do you feel a sense of belonging at PensionBee? 4% Unfavourable 3% Rather not say 93% Favourable 2% Unfavourable 2% Rather not say 96% Favourable Do you feel aligned with PensionBee’s mission, vision and values? Do you feel listened to by PensionBee? 12% Unfavourable 2% Rather not say 86% Favourable PensionBee Group plc 48 ![]() In2021,PensionBeepublishedareportontheeconomiccaseforgender-inclusive,paidparental leaveentitled‘Whatwouldwomen’spensionslooklikeiftherewasn’tagenderpaygap'. 39 Inthe report, which was widely covered in national media, we modelled policy interventions that would closethegenderpensionsgap. Tofurtherourunderstandinginthisareawestartedworkingwith MoreDiverseVoices,onco-designedworkshopstoexplorewomen’sexperiencesofbarriersto savingforretirement,throughfocusgroups,individualinterviewsandsurveys.Weinvitedfemale customersandnon-customerstohelpusre-imaginethepensionsystemforwomen.Theproject has inuenced some of our product and campaign work that we are planning for 2022. Charters, Pledges and Social Impact Initiatives Tosupportour visionoflivingina worldwhereeveryonecanlook forwardtoahappyretirement, we are proud to have publicly committed to the following initiatives in 2021: • ABI Transparent Parental Leave and Pay Initiative 40 • Accredited Living Wage Employer 41 • Careers & Enterprise Company 42 • Make My Money Matter 43 • Race at Work Charter 44 • Social Mobility Pledge 45 • Tech Talent Charter 46 • The Diversity Project 47 • The Workforce Disclosure Initiative Investor Coalition 48 • Time to Talk (Time to Change) 49 • Women in Finance Charter 50 39 https://www.pensionbee.com/resources/pensionbee-report-womens-pensions-if-no-gender-pay-gap.pdf 40 https://www.pensionbee.com/press/abi-transparent-parental-leave-and-pay-initiative 41 https://www.pensionbee.com/press/pensionbee-becomes-accredited-living-wage-employer 42 https://www.careersandenterprise.co.uk 43 https://makemymoneymatter.co.uk 44 https://www.pensionbee.com/press/pensionbee-signs-the-race-at-work-charter 45 https://www.pensionbee.com/press/pensionbee-joins-social-mobility-pledge 46 https://www.techtalentcharter.co.uk/home 47 https://diversityproject.com 48 https://shareaction.org/investor-initiatives/workforce-disclosure-initiative 49 https://www.time-to-change.org.uk 50 https://www.pensionbee.com/women-in-nance Working with Local Schools Weworked withdifferent localstateschools viathe Careers&EnterpriseCompany andGive anHour throughout2021.WehavealongtermpartnershipwithalocalstatesecondaryschoolinTower Hamlets,Langdon ParkSchool,havinghelda roleasanEnterpriseAdvisor forthemsince2020.At LangdonPark School,approximately 50%of thestudentsareon freeschool mealsand Englishisnot a rst language for more than 80%% of the student population. During2021,membersofourExecutiveManagementandSeniorManagementteamsdelivered multiplepresentationsandworkshops,coveringtopicssuchascareersinnance,personal budgetingandinterviewpreparation.Weco-designeda PensionBeeworkexperienceprogramto bedeliveredduring2022,toincreaseparticipationinpensionsandnancialservices.Lastly,we donated laptops to the school’s career service. Annual Report and Financial Statements 2021 49 ![]() 3 Governance (our Regulator, our Shareholders, our Suppliers) Engagement with the Industry and Regulators Wehavealwaysbeenanactiveparticipantinindustrygroupsandforums.Regularlyinvitedto participateinGovernmentworkinggroups,in2021wewerepartoftheDepartmentofWorkand Pensions’(‘DWP’)StatementSeasonGroupandtheCostsandChargesDisclosureInitiative.Romi Savova also sits on the Steering Group for the Government’s Pensions Dashboard Working Group. We were invited to speak on a number of panels and tech roundtables on topics ranging from the SmartDataRight,openpensions,responsibleinvesting,nancialwellbeing,theKalifaReview’s proposed changes to the UK listing regimeand at HM Treasury’s Connect Conference. 2021wasabusyyearforGovernmentconsultationsandweactivelyengagedandrespondedto consultationsthatimpactedourcustomersandourbusiness.Ourvisionisforourcustomersto achievenancialfreedomandacorepartofthatisensuringwehaveapolicyenvironmentthat allows all savers to take control of their nances and ght for their rights as savers. In order to helpour customers achieve nancial freedom,we publicly spoke outabout a number of policy interventions in 2021. We warnedof the dangers of a two-tier retirement system 51 , following HerMajesty’sTreasury(HMT)proposalontheNormalMinimumPensionAge,andonthebenets of introducing a at pensions taxrelief rate 52 . We used our own datato warn that DWP’s Statement Seasoncould put10.6mpension saversatrisk ofscams 53 and thatthedrawdown comparatortool was not t for purpose. 54 WewerepleasedtorespondtotwoFinancialConductAuthorityconsultationsondiversityinthe nancialsector anddiversityon boards.Inboth consultationswerespondedthat thereshouldbe an explicitrequirement forall regulatednancialservices rmstodisclose theirworkforcedata under the WDIand to publishtheir responseson their websitein orderto demonstrateprogress over time and enable stakeholders to hold rms accountable. We aremembers of theABI and Innovate Financeand a key contributorto COADEC’s work onopen pensions. 51https://citywire.com/new-model-adviser/news/govt-pension-age-reform-will-create-two-tier-retirement-system/a1481055 52https://www.pensionsage.com/pa/Govt-urged-to-consider-to-universal-tax-relief-as-millions-of-high-earners- miss-out.php 53 https://www.ftadviser.com/pensions/2021/11/26/statement-season-could-put-10-6m-pension-savers-at-risk 54 https://www.ftadviser.com/pensions/2021/03/18/government-s-investment-pathway-tool-not-t-for-purpose 50 PensionBee Group plc ![]() Transfers Out / Scams Wecontinued tobe anactive memberof thePension ScamsIndustry Forum(‘PSIF’) in2021, attendingmonthlymeetingswithrepresentativesfromacrossthe‘scamscommunity’.Wefollow the principlesof thePSIF Code ofGood Practicein all suspicioustransfer outrequests and alsoshare scams intelligence with other members of the community. In 2021, PensionBee became a memberand signatory of The Pensions Regulator’sPledge to CombatPensionScams.Wewelcomedthenewtransferregulationsandpowersforprovidersto blockpensions scamsin 2021.Wecontinue toworkcollaboratively withthe restofthe industryto warn members about the risks of scams and campaign for additional protections for savers. Inviting Customers to Participate in our IPO PensionBee customersare at theheart of everything wedo, so when itcame toour IPO, wewanted tomakesuretheyhadtheopportunitytoinvestandbecomeshareholders,somethingthatisnot alwaysmade possiblefor retailinvestors.In 2021,wepartnered withPrimaryBid,the retailinvestor platform, to offer allour Invested Customers at thetime the opportunity to invest, alongside raising new institutional funds.We were delightedthat so many customerstook up the chance to become shareholdersandwelookforwardtocontinuingtoengagewiththemthroughquarterlyupdates given to the market and at our rst Annual General Meeting. Supply Chain Mapping We act ethically inall business dealings and weexpect our suppliers to upholdthese principles too, urgingthemtoadoptsimilarpolicieswithintheirownbusinesses.Asallourlargestsuppliersare largecompaniesbasedineithertheUKorIreland,theyaresubjecttoModernSlaverylegislation, GenderPayGapreportingrequirements,FCAregulationandothercomparableEUlegislation(in Ireland) as applicable. Asthe bulk of our suppliers provide technologyor online advertising services andarebasedinlow-riskcountries,wehaveassessedthethreatofhumanrightsissuesintheir businesses and supply chain to be low risk. In2021,weengagedwithoursuppliersontheirworkforceissues,includingtopicssuchasuseof contractors,Living Wages,upholdinghumanrights (includingintheir ownsupplychains),right of associationand policiesondiscriminationand harrasment.Wehavealso askedourmainsuppliers to disclose under the WDI. Privacy & Data Security We takethe securityof ourcustomers’ personalinformation veryseriously. Wetakeadministrative, legal,technicalandphysicalprecautionstoensurethesecurityofpersonalinformationinaccordance withtheUKGeneralDataProtectionRegulation.Weusepersonalinformationinaccordancewith our Privacy Policy. Allcommunicationsbetweenourcustomers’browsersandourwebsitearesecuredusing128-bit TLS encryption, to ensure that only peopleauthorised to view their personal information cando so. Informationisstoredinsecuredatabasesanddatacentresaccreditedtomultipleinternationally recognisedstandards.Oursecuritycontrolsare testedonanannualbasisbyindependentexperts and PensionBee maintains certication to the ISO/IEC 27001:2013 standard for information security managementsystems.PensionBee systemsundergoanannualvulnerabilityassessment aspartof certifying to the Cyber Essentials Plus scheme. Customersare additionallyprotectedfromidentity fraudandaccount compromiseusingavariety oftechniquesincludingdigitalcustomeridentityverication,whichincorporatesacutting-edge facial similarity check, bank account verication and multi-factor authentication. Corporate Governance Furtherdetails ontheCompany’sapproachto governancecanbefoundon pages63to68of the Corporate Governance Statement within the Corporate Governance Report. We have setout in the CorporateGovernance Statement how wehave applied thePrinciples of the Code and have included cross references throughout it as towhere further supporting information may becontained. TheBoard and the Committeesbelieve that they haveupheld the Codethrough theirworkandareabletoreportnoinstancesofnon-complianceagainstthe Codefrom the Company’s listing to 31 December 2021. Annual Report and Financial Statements 2021 51 ![]() 12 Managing our Risks #### The Risk Management Framework TheBoardisultimatelyresponsibleforestablishingtheriskappetiteandtheriskmanagement framework atPensionBee. The Boardhas appointed theAudit andRisk Committeeto assist withthe oversight of risk management activities. Wemaintain acomprehensive riskmanagement frameworkandrisk managementis acknowledged asthecollectiveresponsibilityofeveryemployee.Theriskmanagementframeworkencompasses procedures and processes designed to identify, monitorand mitigate risks that arise from its businessactivities,therebyhelpingtoensuretheCompanymeetsitsobligationstokeystakeholders, including customers, employees, shareholders, regulators and broader society. Therisk managementframeworkatPensionBeeadopts thestandardrst,secondand thirdlineof defencemodelinsegregatingriskmanagementactivitiesandreportinglines.TheBoardoversees theriskmanagement frameworkand process,whichis setout below.‘External assurance’highlights theexternalpartiesPensionBeeengagestoassisttheBoardofDirectorsinexercisingitsultimate oversight. For the avoidance of doubt, the external auditor’s duty is to shareholders. First Line of Defence Therstlineofdefenceisdirectlyembeddedinthebusinessactivitiesandismanagedbydepartment heads orother sufcientlysenior employeesat PensionBee.Risks arebroughtto theattention ofthe rstlinebythesecondlineandviceversa.Therstlineofdefenceisrequiredtoimplementthe Company’s risk management policies. Second Line of Defence ThesecondlineofdefenceisdeliveredbytheCompany’sriskmanagementteam,whichdocuments, monitorsandmaintainstheCompany’sappetiteandperceivedexposuretoriskthrougharisk register.TheCompany’sriskappetiteisgenerallylowtomedium.PensionBeehasputinplace mitigationstoachievearesidualriskexposurethatisinlinewithitsriskappetite.Aspartofits mitigatingactivities,theCompanymaintainsasetofpoliciesthatdocumentthestepsittakesto helpreduce thelikelihood (andinsome cases,theimpact) ofa riskoccurring.Each policyisreviewed at least once annually. External Assurance TheCompany employsexternal partiestoprovide assuranceasitdoesnot currentlyhaveaninternal auditfunction.Thesepartiesareappointedbasedontheirsectorexpertise,includinginvestment management,nance,compliance,regulationandinformationsecurity.TheAuditandRisk Committee is kept up to date with the work of these parties. Identifying Emerging Risks The PensionBeeExecutive Managementteam hasdocumented theCompany’s perceivedexposure to risk through thecollation of a risk register, whichis managed by theRisk Management team. The risk registerlays out theCompany’s risks,assesses the Company’sexposure andits risk appetite. The documentedresultsofriskassessmentsarereviewedtounderstandthelevelofriskandcontrols implemented as appropriate to address any unacceptable risks that have been identied. Employeesareencouraged toreportanypotentialnewriskstotheRiskManagementteam.If anyone prefers to report any potential risk in a more condential way, they are welcome to contact a member of the Risk Management team directly. The Risk Management team meets on a monthly basis with the Legal Team and potential new risks arediscussed duringthesemeetings. Inaddition,the RiskManagementteam meetsmonthlywith key senior leadersin the company, includingthe Executive Management team, theVP of Technical Solutions, andthe Head ofCompliance. Together,this leadership groupand theRisk Management teamformtheRiskStakeholderGroup(‘RSG’).Bothpotentialnewrisksandexistingrisksarediscussed during these meetings and actions to mitigate those risks are decided upon and followed up on. Board of Directors Ultimate oversight Investment Committee Audit and Risk Committee Nomination committee Remuneration committee External assurance Governance Advisory Arrangement (PLT) Financial Auditor (Deloitte) ISO 27001 Auditor (BSI) Pension Technical (Enhance) First Line Embedded in the business (Operations, Technology, Marketing, Product, Finance, etc.) Second Line Risk Management Team + Senior Leadership at PensionBee - together the Risk Stakeholder Group (RSG) - meet monthly to discuss risk-related matters. The Information Security Committee (ISC) is a Co-Committee of the RSG. ResponsibilityFunction PensionBee Group plc 52 ![]() Stakeholders and Activities Therisk registerlists thestakeholdersof theCompany,theactivities thatthe Companyperformsand theriskstothestakeholdersthattheseactivitiesmaygenerate.Eachriskhasbeencategorisedby type and then rated based on the impact and likelihood of occurrence. Eachriskisallocatedtoariskowner,whoisamemberoftheExecutiveManagementteamandis usuallythe headofthe departmentperformingtheactivity. Incaseswherethe riskisassociatedwith veryspecicknowledge(e.g.informationsecurity)theownermaybeanothermemberofsenior management who possesses that knowledge. #### Principal Risks and Uncertainties Overview of Risks We haveidentied seventypes of potentialrisks whichcould havea material impacton the Company’slong-term performance.Thesearise frominternalor externalevents,acts oromissions. The riskfactors mentionedbelowdo notpurport tobe exhaustiveas theremay beadditional risks thattheCompanyhas notyet identied,orhas deemedto beimmaterial,that couldhavea material adverse effect on the business. Regulatory Risk PensionBee’s business issubject to risks relating tochanges in UKgovernment policy and applicable regulations.Whilstwehavehistoricallybeenbeneciariesoffavourableregulatorychanges,including throughtheintroductionofAutomaticEnrolmentandPensionFreedoms,anyregulatorychanges which are negative for PensionBee’s business couldhave a material adverse effect on ourprospects. PensionBee’soperationsaresubjecttoauthorisationandsupervisionfromtheFinancialConduct Authority, andsupervision from HMRCand the InformationCommissioner’s Ofce. PensionBeemay fail,orbeheld tohavefailed,tocomplywithregulationsandsuch regulationsandapprovalsmay change,makingcompliancemoreonerousandcostly.TheFinancialConductAuthority,orother regulators,could concludethat PensionBeehas breachedapplicable regulations,which couldresult ina publicreprimand,nes,customer redressorotherregulatory sanctions.PensionBeemustalso comply with relevant regulatory capital and liquidity requirements. PensionBee may be subject to complaints or claims from customersand third parties in the normal course of business. If a large number of complaints,or complaints resulting in substantial customer andthirdpartylosses,wereupheldagainstPensionBee,itcouldhaveamaterialadverseeffecton PensionBee’s business and nancial condition. Information Security Risk PensionBeeissubjecttostrictdataprotectionandprivacylawsintheUKincludingtheGeneral DataProtectionRegulation (‘GDPR’).Ifourinformationsecurityprocesses,policies andprocedures relatingtopersonaldataarenotfullyimplementedandfollowedbyemployees,orifanyofourthird partyserviceprovidershashistoricallyfailedtomanagedatainacompliantmannerorfailsinthe future, we could face nancial sanctions and reputational damage. Furthermore,ouroperationsaresusceptibletocybercrimeandlossormisuseofdata.Failureto preventsuchactions,orcircumventionofourinformationsecurityprocesses,policiesandprocedures could result in nancial losses, business interruption and unauthorised access to personal data. Operational Risk PensionBeeisdependentonthird-partytechnologyandnancialservicesprovidersfortheprovision ofinvestmentmanagement,bankingandtechnologyservices.Anytermination,interruptionor reducedperformanceintheservicesprovidedbythesethirdpartiescouldnegativelyimpactthe provision of our services and have a material adverse effect on our reputation and protability. Ouroperationalinfrastructureandbusinesscontinuitymaybeaffectedbyotherfailuresor interruptionfromevents,someofwhicharebeyondourcontrol.Oursystemsandthesystemsof our third-partyproviders maybevulnerable tore, oodand othernatural disasters;power lossor telecommunicationsordatanetworkfailures;improperornegligentoperationbyemployeesor serviceproviders,orunauthorisedphysicalorelectronicaccess;andinterruptionstonetworkor widersystemintegritygenerally.Therecanbenoguaranteethatourpreventativemeasureswill protect us from all potential damage arising from any of the events described above. Market Risk PensionBee’sbusinessmaybeadverselyaffectedbynegativesuddenorprolongeductuations inthecapitalmarkets.Wegeneratethevast majorityofRevenueintheformoffeeschargedona recurringbasiscalculatedbyreferencetothevalueofourAUA.OurRevenueandprotabilityare thereforedirectly inuencedby globalstockmarkets. Ageneral deteriorationintheglobal economy andaresultingcapital marketdeclinemayhaveanegativeimpactonthe valueofourcustomers’ pensions and their overall condence to make new contributions to their PensionBee pensions. Credit Risk PensionBee is dependent on third-party nancialservices providers for the provision of investment managementandbankingservices.Wearereliantuponthesethirdpartiesforthesafekeepingof our own and our customers’ assets.Any default by one of these third parties would havea material adverse effect on our reputation and nancial position. Annual Report and Financial Statements 2021 53 ![]() Reputational Risk PensionBee couldbesubjecttoadverse publicity,includingifweorourcustomersbecome targetsfor actualandattempted nancialcrimeandfraud arisingfromtheactions ofthirdparties, customers andstaff. Criminalsmay attempt touse PensionBee’s service tofacilitate nancial crimes. If wedo notcontinue todevelop andimplement preventativenancial crime andfraud measures, practices andstrategies, ourability tocombat nancial crimeand fraud couldbe adversely affected. There is no guarantee that our proactive measures will be successful in the prevention or detection ofnancialcrimeandfraudandanyfailuretocombatthesematterseffectivelycouldadversely affect our protability. Strategic Risk Thepensionsmarketiscompetitiveandthereisnoguaranteethatwewillbeabletocontinueto achieve the growth levels we have enjoyed todate or that we will be able to maintain our nancial performanceeitherathistoricaloranticipatedfuturelevels.Ourcompetitorsincludeavarietyof nancial servicesrms and ourmarket is characterisedby ongoingtechnological progression, includingoftheunderlyinginfrastructureanduserexperience.Thereisnoguaranteethatwewill continuetooutpaceourcompetitors.Inaddition,thepensionmarketremainscost-sensitiveand competitors couldmaterially undercut ourfees, thereby generatingpressure on ourrevenues. Any failureto maintainour competitivepositioncould leadtoa reductioninrevenues andprotability as well as lower future growth. We aredependent upon theexperience, skills andknowledge of ourDirectors and seniormanagers toimplementourstrategy.ThelossofasignicantnumberofDirectors,seniormanagersand/or otherkeyemployees,ortheinabilitytorecruitsuitablyexperienced,qualiedandtrainedstaff,as needed, may cause signicant disruption to our business and ability to grow. PensionBee Group plc 54 ![]() #### Summary of Risks and Mitigations Through the risk management process described above, we have taken the appropriate steps to reduce risk in accordance with our risk appetite. The summary of these steps are presented below. Risk TypeRisksMitigations Regulatory We may be materially adversely affected as a result of new or revised legislation and regulations. We may breach regulatory capital or liquidity requirements. • Strong culture of fair treatment of customers and purposeful business model. • Maintain a robust risk management framework. • Regular interactions with industry bodies to monitor trends. • Regulatory capital and liquidity planning and monitoring through the nance function. Information Security Serious or prolonged breaches, errors or breakdowns of our technology systems or exposure to an external attack could materially breach data protection laws, which could render us liable to governmental or regulatory disciplinary action, as well as to claims by customers. • ISO 27001 certication. • Maintain a robust policy set and physical controls to keep information secure. • Rely on global partners for data storage and encryption. • Regular training for employees. Operational Serious or recurrent breaches and errors in manual processes and systems, including those provided by third parties, could render us liable to governmental or regulatory disciplinary action, as well as claims by customers. • Extensive automation program in place to reduce manual procedures. • Maintain a robust policy set of document procedures. • Regular training for employees. • Robustexternalsupplierselectionprocessandongoingstrategicmonitoringoflargest suppliers. Market Fluctuations in capital markets may adversely affect trading activity and/or the value of the Company’s Assets under Administration, from which we derive Revenue. • Rely on recurring Revenue from long-duration assets. • Maintain asset diversication through appropriate fund range. Credit Default by a key nancial partner could materially damage the capital position and our ability to generate Revenue. • Only contract with the world’s largest and most reputable asset managers. • Only bank with large and reputable institutions. Reputational There is a risk of reputational damage including as a result of employee misconduct, failure to manage our risks, fraud or improper practice. • Strong culture of fair treatment of customers and purposeful business model. • Maintain a robust risk management framework. Strategic We operate in a competitive environment and our continued growth depends on our ability to respond to external changes. • Embedded processes to gather and absorb customer feedback. • Rapid implementation and product development cycles. Internal Audit TheCompany doesnotcurrentlyhave anInternalAuditfunction, butdoesemploy externalpartiestoprovide assurance.Thepartiesare appointedbasedontheir sectorexpertise,forexample, investment management,nance,compliance,regulationandinformationsecurity.TheAuditandRiskCommitteeiskeptuptodatewiththeworkoftheseparties.Wewillcontinuetoevaluateonanongoingbasis whether an internal audit function with a direct reporting line to the Audit and Risk Committee should be established. Annual Report and Financial Statements 2021 55 ![]() 13 Viability Statement Inaccordancewithprovision31oftheUKCorporateGovernanceCode,theBoardhasassessed theviabilityoftheGroupforthefour-yearperiodtoDecember2025,consideringthistobean appropriateperiodoverwhichtoassesstheGroup’sstrategyanditscapitalrequirements, consideringtheinvestmentneedsofthebusinessandthepotentialrisksanduncertaintiesthat could impactthe Group’s abilityto meet itsstrategic objectives. Afour-year period hasbeen consideredappropriatebecauseitwouldlikelycapturethefulldownturnofapotentialdownside businesscycleandfurthermore,itwouldprovidesufcienttimetoidentifyandexecutefurther mitigatingactionstoaddressthestresstestscenarioasoutlinedbelow,suchasafurthercapital raise,the identicationandimplementationofproductsuite expansionandtheidenticationand implementation of further cost savings. Thisassessmenthasbeenmadegivingconsiderationtothenancialposition,regulatorycapital and liquidityrequirements ofthe Group(as setout on pages24 to28 ofthe Operatingand Financial Review withinthe StrategicReport), in thecontext ofthe Company’sstrategy, businessmodel and medium-term business plan,together with an assessment ofthe principal risksand uncertainties as set out on pages 52 to 55 of the Managing our Risks section of the Strategic Report. Such risks have been categorised into regulatory, information security,operational, market, credit, reputational and strategic risks in accordance with our risk management framework. TheBoardapprovedmediumtermplan assumesthebusinesscontinuestogrowcustomernumbers andAUAthroughcontinuedinvestmentinourcustomerproposition,throughmarketing,people andtechnology.Itisassumedthattherearenosignicantorprolongedmarketmovementsin underlying asset values from the time the plan was approved by the Board. TheBoardhas consideredthe potentialimpact ofthe followingstress testscenarios,whichtogether represent a severe and unlikely but possible scenario: • Market Risk -Prolongedequity marketvolatility. Amaterial reductioninthe equitymarket as aresultofglobaleconomicuncertainty(suchasCOVID-19andgeopoliticaldisruptions)has been assumedover theforecast periodwhereby theequity marketfalls by20% duringyear 1 and remains at that level throughout the forecast period. • ReputationalRisk -Causedbyacombinationofoperationalrisk,informationsecurityand third party services andsolution risk. A material reduction in thecustomer conversion rate and averagepot sizeofnewlyacquired customershasbeenassumed overtheforecastingperiod whereby it decreases by 10%. Intheeventthatsuchmodelledscenariosweretomanifest,theBoardwouldconsiderreducing discretionarymarketingexpenditureasamanagementmitigatingactiontobetaken.TheBoard considers this approach to be reasonable in light of theGroup’s protability and positioning within the UK competitive landscape. The results haveconrmed that the Group wouldbe able to withstand theadverse nancial impact ofthesescenarios occurringtogether overthe four-yearassessment periodand thatit would continue to be able to meet its liabilities and capital requirements. TheGroup’smediumtermplanwasreviewedbytheBoardinDecember2021andsubsequently approved in February 2022. The Directors conrm that they have a reasonable expectation that the Groupwillbeabletocontinuetooperateandmeetitsliabilitiesandcapitalrequirementsasthey fall due over the four-year period to December 2025. The Strategic Report was approved by the Board on 13 April 2022 and signed on its behalf by: Romi Savova Chief Executive Ofcer 13 April 2022 PensionBee Group plc 56 ![]() # CorporateGovernance Report ![]() The culture ofour people, thestrength of our leadershipand our strong corporate governancestructure have servedus well on our journey of becominga public company...We aim to continueto deliver value to allour stakeholders andto meet and exceedtheir expectations. Dear Shareholder, On behalf ofthe Board, I ampleased to introduce ourrst Corporate Governance Reportas a listed company, which sets out an overview of the governancestructure and the oversight that has been provided by the Board for the year ended 31 December 2021. Throughout thisyear,theBoardhasremainedfullycommittedtoimplementingthehighest standards of corporate governance and has applied the principles of the 2018 UK Corporate Governance Code (the ‘Code’) since the Company’s IPO in April 2021. Theculture ofourpeople, thestrengthof ourleadershipand ourstrongcorporate governance structurehaveserved uswellonourjourneyofbecoming apubliccompanywithourlistingon the Main Market of theLondon Stock Exchange and ourexpected transfer to the Premium Segment.We aim to continue todeliver value to all our stakeholdersand to meet andexceed their expectations. Board Evaluation and Effectiveness WedevelopedaformalandrigorousinternalperformanceevaluationprocessfortheCompany’s rstboardevaluationpostitslisting,inrespectoftheBoardandeachofitsCommittees,covering processesthatunderpinBoardandCommitteeeffectiveness,BoardandCommitteeconstitution and commitment, Board dynamics, culture, values and strategy and stakeholder oversight. The results indicated strong performance andeffectiveness of the Board and Committees, with the Board dynamicsbeing identied asa realarea of strengthfor ourBoard. Themes thatsurfaced and resultingactionsthathavebeenidentiedwillformadevelopmentplanforthefollowingyear. WewillalsolooktoadoptanexternallyfacilitatedBoardevaluationinduecourse.Furtherdetails relating tothe Board evaluationare set out onpages 69 to 71of theNomination Committee Report within the Corporate Governance Report. Board Composition and Succession Planning FollowingourannualreviewofBoardandCommitteecomposition,theindependenceofNon- ExecutiveDirectorsandtheirtimecommitment,theBoardremainedsatisedthatthebalance ofskills,experience,independenceandknowledgeontheBoardandCommittees remained appropriate.Inconnection with,aheadoftheCompany’sexpected transfertothePremium Segment,weagreedtoconsidertheadditionofafurtherNon-ExecutiveDirectortotheboard, together with an additional Executive Director during the course of 2022. Inrelationtosuccessionplanning,wehaveputinplaceaplanforthemembersoftheBoard, Executives and Non-Executives, and haveagreed appropriate contingency plans and process steps as regardseach, should therebe an unforeseenprolonged period ofabsence. Indeed theadditional appointment of anotherNon-Executive Director willfurther enhance theBoard’s ability tocontinue functioningeffectivelyshouldanexistingNon-ExecutiveDirectorbecomeunexpectedlyunavailable. Going forward, as the business continues to grow, we will look to broaden the succession planning exercise to consider the Executive Management team more broadly. Furtherdetailsofourleadershipteamcanbefoundonpages60to62oftheBoardofDirectors and Executive Managementsection of the Corporate GovernanceReport. Further details relatingto succession planning are set out on pages 69 to 71 of the Nomination Committee Report within the Corporate Governance Report. 1 Chairman’s Introduction to Governance PensionBee Group plc 58 ![]() Diversity & Inclusion The Boardbelieves thatthe make-upof PensionBee’semployees shouldreect thediversity ofthe Company’scustomer base,andwe remaincommittedto promotingdiversityand inclusionacross the business at all levels, through a variety of new and long-standing measures and initiatives. We have publiclycommitted to publictargets for genderand race andare working towards becoming a‘Disability Condent’ employer.The Company has publishedits Diversity, Inclusion and EqualityPolicywithpublictargetsfor2022,andcontinuallymeasuresitsprogressagainstthese objectives. Appointments to the Board areskills, knowledge, experience and merit based,but there is a clear focus on promoting diversity to ensure appropriate balance. This year,PensionBee achieved morethan 50% 55 femalerepresentation across itsentire employeebase, and 50%across its Boardand ExecutiveManagement levels. 56 Furtherdetailissetoutonpages32to40oftheStakeholderssectionandpages42to51oftheESG Considerations sectionof the StrategicReport. Environmental, Social and Governance WebelievethateffectivelymanagingourESGprioritieswillhelppreserveourresilienceanddrive long-termvalueforallourstakeholders.WepursueourESGworktransparently,disclosingour targetsandrelevantmetrics,and believethis approachsupports accountabilityand helpsour stakeholders to be informed about our progress. Ofnote,thisyearwearepleasedtohaveintegratedESGintoourinvestmentrangetosecure sustainable value forour customers, our societyand our planet, closing two plansthat could not be screened under ourESG policy. Wecontinued to minimiseour impact onthe environment through ourremote workingpolicyandas apaperlessproviderand encouragedotherpensioncompanies to stop sending out millions of paper statements each year. AspartofourcommitmenttoincreasingourtransparencyinallthestrandsofESG,wedisclosed undertheSASB,WDIandSECRreportingframeworksforthersttime.Wewilldiscloseunder additional frameworksasdata becomesavailableand asit relatestofuture incomingregulation in respect of climate-related disclosures. FurtherdetailsonourESGactivitiescanbefoundonpages42to51oftheESGConsiderations sectionof theStrategic Reportand ourSECRReportingis setout onpages 97to103ofthe Directors’ Report within the Corporate Governance Report. 55 Supported by PensionBee’s Diversity & Inclusion Survey, completed in June 2021. 56 As of 31 December 2021. Stakeholder Engagement WhentheBoardmakesdecisions,itconsiderstheinterestsofalloftheCompany’sstakeholders intheverybroadestsense,contemplatingcustomers,employees,shareholders,ourcommunities, governmentandregulators andourplanet.TheBoard engagesdirectlywithkeystakeholder groups, withthe ExecutiveManagementteamdrivingmuch oftheengagement,butthroughout theyear this importantly takes place across all levels of the Company. The Board was delighted toengage with the wider workforceduring the course of the year throughexistingchannelsandnewinitiatives,andthroughconstantfeedbackfromtheExecutive Managementteam.Ourgoalistoensurethatouremployeesarewellrepresented,listenedto andheard. Aparticularhighlightthis yearwasthe‘town hall’employeeengagementevent ledby ourSeniorIndependentDirector,MaryFrancisCBE,whoisthedirectorresponsibleforemployee engagement,whichfacilitatedcross-Companydiscussiononthemessuggestedbyandvotedfor by employees and provided the Board with particularly valuabledirect insight into what matters to our people. We want to hear from them. TheBoardiscommittedtoproactiveandconstructiveengagementwiththeCompany’sshareholders, which includes many of our customersand our employees alike. We have set a calendarfor regular and detailed engagement around quarterly results updates, to ensure that shareholders can clearly follow the Company’sinvestment case, strategy andperformance, and enable usto hear the views of our shareholders. We will continue to make ourselves available. Further information relating to how we engage with our employees, shareholders and all our other stakeholders is set out on pages 32 to 40 of the Stakeholders section of the Strategic Report. Conclusion Furtherdetails settingout howtheBoard hasdischargedits corporategovernance responsibilities during the year are set out elsewhere in this report. TheBoard looksforwardto welcomingshareholdersto theCompany’srst AnnualGeneralMeeting, which willbe heldon 18May 2022.The Noticeof theAGM willbe distributedto Shareholdersand made available on the Company’s website. In the meantime,the Board isgrateful for thecontinued support of ourShareholders and theNon- Executive Directors and I are available to engage with our stakeholders at any time. Mark Wood CBE Chairman 13 April 2022 Annual Report and Financial Statements 2021 59 ![]() #### Michelle Cracknell CBE Independent Non-Executive Director Committee Membership: Audit and Risk Committee (Chair), Investment Committee, Nomination Committee, Remuneration Committee Date of Appointment: November 2019 58 External Appointments: Non-Executive Director, Just Group plc Non-Executive Director, Fidelity International Holdings Chair, Fidelity Retirement Services Director, Singing Gorilla Projects Charity Career and Experience: MichelleCracknell CBEhas aportfolio careeras aPension Trustee andNon-ExecutiveDirector.Shehasover30years’experience inpensionsandretirementplanning, includingmostrecently astheChiefExecutiveofthePensionsAdvisoryService.During hertimethereshesignicantlygrewthenumberofcustomers andincreasedthechannelsoffered,transformingtheserviceto providegreater supporton pensionfreedom legislation,pension scamsandtransfersfrompensionschemes.Michellewas awarded a CBE in2019 for her services tothe pensions industry. Michelle startedher careerat anancial advicebusiness where she became a shareholdingDirector prior to selling it toAegon, and subsequently worked asa Strategy Director at Skandia/Old Mutual. Michelle is a qualied Pensions Actuary. 2 Board of Directors and Executive Management #### Mark Wood CBE Independent Non-Executive Chairman Committee Membership: Investment Committee (Chair), Nomination Committee (Chair), Remuneration Committee Date of Appointment: January 2016 57 External Appointments: Chairman, Digitalis Reputation Limited Senior Independent Director and Chairman of the Audit, Risk & Compliance Committee, RAC Motoring Services Chairman, Utility Bidder Limited Chairman, Acquis Insurance Management Limited Chairman, Ondo InsurTech Plc Chairman, Multiple Sclerosis Society Research Appeal Board Trustee, Brooklands Museum Trust Limited Career and Experience: MarkWoodCBEhashadalonganddistinguishedcareer, serving asChief Executiveofsome ofthe country’slargest nancialservicecompanies,includingPrudentialUK&Europe, Axa UKand JardineLloyd Thompson EmployeeBenets. Markis a regular commentator in the press on pensions and insurance. Mark hasbeen atthe helmof several nancialservices and technologystart-ups,includingPaternoster,aregulated insurancecompanywhichhefoundedin2005,andDigitalis ReputationLimited,theonlinereputationmanagement company, wherehe currently servesas Chairman. Mark isa qualied Chartered Accountant. #### Mary Francis CBE Senior Independent Director Director responsible for Employee Engagement Committee Membership: Audit and Risk Committee, Investment Committee, Nomination Committee, Remuneration Committee (Chair) Date of Appointment: November 2020 58 External Appointments: Non-Executive Director, Barclays plc Chair of the Remuneration Committee, Barclays Bank plc Member of the UK Takeover Appeal Board Member of the Advisory Panel, Institute of Business Ethics Senior Adviser, Chatham House Career and Experience: MaryFrancisCBEhasextensiveanddiverseboard-level experienceacrossarangeofindustries,includingprevious Non-ExecutiveDirectorshipsattheBankof England,Alliance& Leicester, Aviva, Centrica and Swiss Re Group. Throughherformer seniorexecutivepositionswithHM Treasury, thePrimeMinister’sOfce,andasDirectorGeneralofthe associationofBritishInsurers,Marybringsstronggovernance valuestotheBoard,astrongunderstandingoftheinteraction betweenpublicandprivatesectors,andskillsinstrategic decision-making and reputation management. 58 Denotes the date of appointment to the Board of PensionBee Limited for Mark Wood CBE, Mary Francis CBE, Michelle Cracknell CBE, Romi Savova and Jonathan Lister Parsons, all of whom were subsequently appointed to the Board of PensionBee Group plc on 2 February 2021, with only Romi Savova and Jonathan Lister Parsons remaining Directors of PensionBee Limited. PensionBee Group plc 60 ![]() #### Jonathan Lister Parsons Chief Technology Ofcer (Executive Director) Committee Membership: - Date of Appointment: January 2016 58 External Appointments: Director, PensionBee Trustees Limited Career and Experience: JonathanListerParsonsco-foundedPensionBeewithRomiin 2014.In hisroleasthe ChiefTechnology Ofcer,heis passionate aboutbringingcustomers’ pensionexperience intothe 21st century,andusingtechnologytotransformpensiontransfer processesthattypicallytakemonthstoave-minuteprocess on a smartphone. Jonathanchampionsatech-forwardculturewithinthe business, aiming toraise the level oftechnology literacy among employees,andcreatingopportunitiesforpeopletodevelop technical skillsas theymove throughdifferent rolesintheir career at PensionBee. Priortoco-foundingPensionBee,Jonathanfoundedadigital consultancy, Penrose,andworked atBritish Telecom.Jonathan holds an MSci in Experimental and Theoretical Physics fromthe University of Cambridge. #### Romi Savova Chief Executive Ofcer (Executive Director) Committee Membership: Investment Committee, Nomination Committee Date of Appointment: December 2014 58 External Appointments: Director, PensionBee Trustees Limited Director, Seen on Screen Career and Experience: RomiSavovafoundedPensionBeein2014tosimplifypension savingsintheUK,followingadifcultpensiontransferexperience of herown. As theChief ExecutiveOfcer, she hasplayed a pivotalroleinadvancingconsumerstandardsinthepensions industry,from reducingtransfer timestocampaigningforthe full abolition ofexit fees. Romiis also amember ofthe government’s PensionsDashboards ProgrammeSteering Group,whichwas set up to advise onthe delivery of pensions dashboards. PriortofoundingPensionBee,RomiworkedatGoldman Sachs,MorganStanleyandCreditBenchmark,holdingvaried roles in risk management,investment banking and nancial technology.RomireceivedanMBAfromHarvardBusiness School as a George F.Baker scholar and graduated summacum laude from Emory University. Christoph J. Martin Chief Financial Ofcer Date Joined PensionBee: July 2019 Career and Experience: ChristophJ.MartinistheChiefFinancialOfcerofPensionBee, havingjoinedtheCompanyin2019.He isResponsiblefor nancial reporting and business planning at PensionBee. Christophpreviouslyworkedinprivateequityinvestment atProvidenceEquityPartners,focusingoninvestmentsin technology,media, telecommunicationsandeducation. Priorto thatheworkedinmergersandacquisitions,coveringnancial institutionsat MorganStanley.Christoph holdsaBScin Business Administration from WU Vienna. ![]() #### Lisa Picardo Chief Corporate Ofcer Date Joined PensionBee: March 2020 Career and Experience: Lisa Picardo is theChief CorporateOfcer ofPensionBee, having joinedthecompanyin2020.Sheleadsthecorporatedevelopment of PensionBee, which included leading on the IPO and nancing, and playsabroadermanagementroleacrossmanyaspectsofthebusiness. LisapreviouslyworkedatMorganStanleyforthirteenyears, with therstsevenyearsspentintheEuropean Mergers and Acquisitionsdepartment,whereshegainedextensiveexperience workingonmanylargeandcomplexUKpublictransactions, andalsoplayedaroleinrmmanagement.Lisathenjoinedthe MorganStanleyPrivateEquityFund,focusedoninvestinginmid- market opportunitiesacross sectors,with aninterest inconsumer- facingbusinesses.In2015LisafoundedLITTLECIRCLE,anonline retail platformfor children’sfashion. Lisa holdsa BScin Economics from Bristol University. #### Clare Reilly Chief Engagement Ofcer Date Joined PensionBee: January 2017 Career and Experience: ClareReillyistheChief EngagementOfcer ofPensionBee and joined thecompany in2017. Clare focuseson helpingPensionBee transformthepensionsindustrytobetterserveconsumerneeds, playingapivotalroleinlaunchingtheUK’srstOpenBanking- pensionintegrations andone ofthe UK’srstmainstreamfossil fuel free pensions. Clare previously workedinthenot-for-prot sector,inCorporate RelationsatCitizensAdviceandFellowshipattheRoyalSocietyofArts. ClareholdsaBAHonsfromUniversityCollegeLondonandanMSc from theUniversity of Oxford inRussian and EastEuropean Studies. #### Tess Nicholson Chief Operating Ofcer Date Joined PensionBee: August 2015 Career and Experience: TessNicholsonistheChiefOperatingOfcerofPensionBee, having joinedthe companyin2015. Sheis responsiblefor arange ofoperationalactivitiesacrossthebusiness,includingcustomer success, compliance and banking operations. TesswaspreviouslyOperationsManagerandUKCommercial Manager at GOMarketsUKTradingLimited (formerlyVantage FXUKTradingLimited).TessholdsaBAHonsdegreeinFashion Design with Communication from Birmingham City University and iscurrentlystudyingforamastersinSocial&PoliticalTheoryat Birkbeck, University of London. #### Matt Loft Chief Design Ofcer Date Joined PensionBee: September 2015 Career and Experience: MattLoftisChiefDesignOfceratPensionBee,havingjoinedthe companyin2015.Heisresponsibleforthedesignandcustomer experience of PensionBee’s products and the company’s visual brand,bringingovereighteenyearsexperienceindesigning customer-centric products. PriortojoiningPensionBee,Mattworkedatdesignagenciesand in-houseforsomeoftheUK’s largestcompanies andorganisations, including The MoneyAdvice Service, Legal & General,The Ministry of Justice, Oxford University and the V&A. #### Jasper Martens Chief Marketing Ofcer Date Joined PensionBee: September 2015 Career and Experience: JasperMartens isthe ChiefMarketing Ofcerof PensionBee,having joinedthecompanyin2015.Heisresponsibleforproductand marketingacrossthebusinessandbringsextensivemultichannel marketingexperiencetoPensionBee,gatheredoverfteenyears working in nancial services and digital agencies. PriortojoiningPensionBee,JasperwasHeadofMarketing and Communicationsatsmallbusinessinsuranceprovider,Simply Business. Before moving to London, Jasperran his own online marketing agency which he founded in the Netherlands. #### Adebola Haffner Senior Legal Counsel Date Joined PensionBee: April 2021 Career and Experience: AdebolaHaffneristheSeniorLegalCounselofPensionBee,having joinedthe companyinApril2021. Heisresponsiblefor helpingthe companymeetitslegalandregulatoryobligations,managingrisk andofferingstrategiclegaladvicetotheExecutiveManagement team and Board. PriortojoiningPensionBee,AdebolawasaLegalCounselandmember of thelegal teamat Transactfor almostve years,dealing witha wide range of matters including product development, trusts, pension death benetprocessesanddecisionmaking, riskmanagement, compliance,regulatorymatters,corporateandcommerciallegal issues.Adebolahasalsoworkedforanumberoftrustcompaniesinthe past including Capita TrustCompany Ltd and ATUGeneral Trust (BVI) Limited. Adebolaholds a LawDegree, Mastersin Law (LLM)and also holds theSociety ofTrust andEstate Practitionersdesignation. ![]() 3 Corporate Governance Statement UK Corporate Governance Code Compliance Statement The Company hasapplied all of the principlesof the UKCorporate Governance Code (the ‘Code’)as they apply to it and has complied withall relevant provisions of the Code since its IPO in April2021 up and to the end of the year. FulldetailsoftheCodeareavailableatwww.frc.org.uk.DetailsexplaininghowtheCompanyhas applied the principles of the Code can be found throughout the Annual Report. Role of the Board In accordance with the Code, the role of theBoard is to promote the long-term sustainable success oftheCompany,generatingvalueforshareholdersandcontributingtowidersociety.TheBoard ofPensionBeeconsidershowtopromotethesuccessoftheCompanygivingdueregardtoall itsstakeholders,includingshareholdersandemployees.Assuch,theBoardparticipatesindirect engagementwithcertain stakeholdergroupsandengagementisreportedtothe Boardtoinform the decision making and business outcomes. TheBoardprovidesoverallleadership,settingtheCompany’spurpose,valuesandstrategy, supportingtheExecutiveDirectorsandthebroaderExecutiveManagementteaminthedelivery ofthatstrategy.TheBoardensuresthattheCompanyhasnecessaryresourcesinplacetomeet itsobjectives,measuringperformanceagainstthem,andthatitoperatesaframeworkofeffective controls, enabling risk to be appropriately managed. FurtherinformationontheCompany’svision,values,strategy,riskmanagementframeworkand engagementwithstakeholderscanbefoundintheAboutUs,Strategy,ManagingourRisksand Stakeholders sections of the Strategic Report. Matters Reserved for the Board TheBoardoperatesapolicyofmattersreservedforitscollectivedecision,whichincludesitems thatarematerialtodeliveringontheCompany’sstrategyandpurpose,includingstrategicissues, structureandcapital,nancialreporting&controls,materialagreements,communicationswith shareholders,boardappointmentsandremuneration,riskassessmentandinternalcontrolsand corporate governance. These matters include, but are not limited to: • Responsibilityfor leadership, purpose,values and standards,monitoring progress againsteach • Approving annually a strategic plan and objectives • Approving operating and capital expenditure budgets and any material changes to them • Approving changes relating to capital and corporate structure • Approving the nancial results including the annual accounts, interim and preliminary results • Approving the Group’s risk management and treasury policies • Approvingmajor capital projects, investments or contracts in excess of the delegated amount • Approving changes to the structure, size and composition of the Board • Ensuring a satisfactory dialogue with shareholders • Ensuring the maintenance of a sound system of internal control and risk management • Maintaining oversight of whistleblowing arrangements A copy of the‘Schedule of Matters Reserved forthe Board’ can be found on the Company’swebsite on the ‘Corporate governance’ tab at: https://www.pensionbee.com/investor-relations/esg. Board Committees TheBoardhasdelegatedanumberofitsresponsibilitiestotheAuditandRIskCommittee,the NominationCommittee,theInvestmentCommitteeandtheRemunerationCommittee.Eachof these Committeeshas a termsof referencedocument, whichis reviewed annuallyby theBoard and Committeesrespectivelytoensurethattheyremainappropriatetosupporteffectivegovernance. Details of therole, composition and activities ofeach Committee duringthe year are set outin their respective reports on the following pages within this Corporate Governance Report. Acopy ofthe Termsof Referencefor eachof theBoard Committeescan befound onthe Company’s websiteonthe‘Corporategovernance’tabat:https://www.pensionbee.com/investor-relations/esg. The Operation of Board & Committee Meetings TheBoardgenerallyaimstomeetuptotwentytimesperyearacrosstheBoardandCommittees, witheachmeeting’sactivitybeingplannedaheadoftime,andsetoutinaformalAnnualBoard Activity Calendar,which isapproved bythe Board. TheBoard andCommittee meetingsare generally plannedaroundkeyeventsinthecorporatecalendar,whichensuresthattheBoardthenreceives appropriate information at the appropriate time,and that all key operational, nancialreporting and governance matters are discussed during the year. Annual Report and Financial Statements 2021 63 ![]() WithrespecttoBoardandCommitteemeetings,theChair,theChiefExecutiveOfcer(‘CEO’),the relevant Executive Management sponsorand the Company Secretaryset the Board’s agenda, ensuring thatthere issufcient focus onstrategy, performance,value creation, culture,stakeholders andaccountability.Adetailedpackispreparedandcirculatedinadvanceofeachmeetingwhich includes updatesfrom the CEO,the ChiefFinancial Ofcer (‘CFO’) andother Executive Management teammembers.TheCompanySecretaryalsopreparesareporteveryquarterforBoardmeetings, covering matters including the latest governance and company law updates. Roles and Responsibilities The Code requiresthere to bea clear divisionof responsibilities betweenthe Chair andthe CEO, set outinwritingand agreedby theBoard. TheBoard feelsthatitis importanttohighlightthat although theyagreewith theapproach setoutintheCode,they recognisethat overlyprescribingthe responsibilities oftheChair andthe CEOmay reduceexibility toactin unforeseencircumstances. Accordingly,the documentsetsouta cleardivisionof responsibilities,butdoesnot intendto provide a denitive list of the individual responsibilities of the Chair or the CEO. Acopyofthe‘DivisionofMattersbetween Chairand ChiefExecutive’ canbe foundon the Company’swebsiteonthe‘Corporategovernance’tabat:https://www.pensionbee.com/ investor-relations/esg. Role of the Chair TheChair(MarkWoodCBE)isindependentandisresponsibleforleadershipoftheBoardandfor ensuringitsoveralleffectivenessindirectingtheCompanyandinallaspectsofitsrole,including thesatisfactionof itslegal,regulatoryandshareholder responsibilities,andpromotingthehighest standardsofintegrity,probityand corporategovernance.TheChairhasresponsibilitiesrelatingto Board meetings,Board composition,induction andperformance evaluationprocesses andrelations with shareholdersandother stakeholders.At appropriateintervals duringthe year,theChair holds meetingswiththeNon-ExecutiveDirectorswithouttheExecutiveDirectorspresentinorderto facilitate a full and frank discussion. Role of the Chief Executive Ofcer TheChief ExecutiveOfcer(Romi Savova)leadstheteam withexecutiveresponsibilityfor running thebusinessesoftheGroup.TheCEOreportstotheBoard,andisresponsibleforallexecutive management matters of the Group. Role of the Non-Executive Directors TheNon-Executive Directors(MaryFrancis CBEandMichelle CracknellCBE)are bothindependent, provideconstructivechallenge,strategicguidance,offeringspecialistadviceandholding managementtoaccount,giventheirexperienceinbothexecutiveandnon-executiveroles throughout their careers.TheNon-ExecutiveDirectorsalsocontributetotheidenticationof principalbusinessrisksandthe determinationofriskappetite andmonitoringofthe internalcontrol framework. Theyprovide independentjudgement tothe Boardand alsomonitor compliancewith the regulatory principles and requirements. MichelleCracknellCBEisaqualiedactuarywith30years’experienceinnancialservicesand morethan13years’experienceasaBoardDirector,includingveyears’experienceasanAudit Committee Chair.Mary Francis CBEhas extensive anddiverse board-levelexperience across arange of industries and hasalso held senior executive positions.Further details are provided inthe ‘Board of Directors and Executive Management’ section of this Corporate Governance Report. Role of the Senior Independent Director The Coderequires thatthe Board shouldappoint oneof the independentNon-Executive Directors tobetheSenior IndependentDirector, providinga soundingboard forthe Chairandserving asanintermediaryfortheotherDirectorsandshareholdersiftheyhaveconcernsthathavenot beenresolvedthroughthenormalchannels oftheChairortheChiefExecutive.LedbytheSenior IndependentDirector, theNon-Executivesmeetwithoutthe Chairpresentatleast annuallyto appraise theChair’sperformance, andon otheroccasions asnecessary.Mary FrancisCBE hasbeen appointed as Senior Independent Director. A copy of the‘Role of the Senior IndependentDirector’ can be found onthe Company’s website on the ‘Corporate governance’ tab at: https://www.pensionbee.com/investor-relations/esg. Company Secretary PrismCosec wasappointedasthe CompanySecretaryon19March 2021.TheCompanySecretary supports the Board andeach of the four Board committeesand is in attendance atall meetings. All DirectorshaveaccesstotheservicesoftheCompanySecretary,whoisavailabletoadviseonmatters includingcompanylaw,governanceandbestpractice,whilstassistingtheBoardinensuringthatthe correctpolicies,processesand informationaretabledfordiscussion,notingorrecordingapproval atthecorrectpointintimethroughouttheyear.TheCompanySecretaryworkswithmembersof the Executive Managementteam and the respectiveChairs of the Board and Committeesto ensure thatBoardmeetingpacksarecirculatedtoDirectorsinatimelymannerandthattheinformation contained in them is clear and accurate. PensionBee Group plc 64 ![]() Composition, Independence and Attendance in 2021 During the year, from thetime of the IPO onwards, the Board comprisedve directors (including the Chairman).HavingconsideredcircumstanceswhicharelikelytoimpairaNon-ExecutiveDirector's independence,itwasdeterminedthatalloftheNon-ExecutiveDirectorscontinuedtobeindependent. The Companyhas thereforecomplied with Provision11 ofthe Codesince IPO,with atleast half ofthe Board (excluding the Chairman)being composed of independent Non-ExecutiveDirectors. During thecourse of2021, the Boardhas hadtwelve formallyscheduled meetings,with additional ad hocmeetings or callsconvened to deal withvarious matters in between.Meetings were held via video conference to ensure attendance andinclusivity. The Executive Management team were also frequently present at Boardand Committee meetings, together withother advisors as appropriate. ThetablebelowshowstheattendanceofeachDirectorattheformalscheduledmeetingsofthe Board and Committees of which they are a member: Director Board Meetings Eligible/ Attended Audit and Risk Committees Eligible/ Attended Remuneration Committee Eligible/ Attended Nomination Committee Eligible/ Attended Investment Committee Eligible/ Attended Mark Wood CBE12/12-3/32/23/4 Mary Francis CBE12/126/63/32/24/4 Michelle Cracknell CBE12/126/63/32/24/4 Romi Savova12/12--2/23/4 Jonathan Lister Parsons12/12---- TheNon-Executive Directorsarecommittedto devotingadequate timetothe businesstodischarge their responsibilities effectively.As set out intheir appointment letters the Non-ExecutiveDirectors arerequiredtoattendscheduledBoardandCommitteemeetings,andtobecomemoreinvolved forperiodicspecialactivitiesifrequired.TheymustadvisetheBoardofanychangestoexisting commitmentsor newcommitments thatmay haveimplications ontheir abilityto commitsufcient time to their duties. Where Directors are unable to attend ameeting, they are encouraged to submit any comments on papersormatterstobediscussedtotheChairinadvancetoensurethattheirviewsarerecorded and taken into account during the meeting. Key Activities During The Year Theannual BoardActivity Calendarsetting outagenda itemsforeachscheduledBoard and CommitteemeetingisapprovedbytheBoardeachyear.Thecalendartakesintoaccountkey pointsintheregulatoryandnancialcycle,andincludesregularbusiness,corporate,investor andemployeeupdatesfromtheCEOandChiefCorporateOfcer(‘CCO’),regularupdateson thenancial performanceandbusiness planningfromthe CFOandupdates ongovernanceand companylawmattersfromtheCompanySecretary.Inaddition,theBoardhasreceivedupdates from othermembers ofthe ExecutiveManagement teamand fromexternal advisorswhere appropriate. Duringtheyearandintheearlypartsof2022,theBoardhas,aspartofitsannualgovernance programme: • Reviewed and approved the budget and nancial strategy for FY2022. • Reviewed its Schedule of Matters Reserved for the Board and the Termsof Reference for each of the Board Committees. • Reviewedvariousothergovernancedocuments,includingtheDivisionofResponsibilities between the Chair and Chief Executive. • Reviewedandapproved thehalf-yearand full-yearnancialstatements andthequarterlytrading updates. • Received updates on the workforce and workforce engagement. Information and Support Agendas andaccompanying papersare distributed tothe BoardandCommittee membersin advanceofeachBoardorCommitteemeeting.Wherenecessary,separatepapersareprepared tosupportspecicmattersrequiringBoarddecisionorapprovalandtheNon-Executivesprovide ongoingfeedback tothe CEO,CCO andCompany Secretaryon thecontentofpaperstoensurethey continue to support effective debate and decision-making by the Board. Minutesof allBoardand Committeemeetingsare takenbythe CompanySecretaryand circulated totheBoardforapprovalassoonaspracticablefollowingthemeetings.Specicactionsarising for meetingsare recordedboth inthe minutes andon aseparate tracker,thereby facilitating theeffectivecommunicationofactionstothoseresponsibleandallowingtheBoardtomonitor progress. AnyDirectormayinstigateanagreedprocedurewherebyindependentprofessionaladvice reasonablynecessarytoenablethemtocarryouttheirdutiesmaybesoughtattheCompany’s expense. No such advice was sought by any Director during the year. Annual Report and Financial Statements 2021 65 ![]() Training and Development Directorsare enrolledin mandatorytraining includingcompliance training,annual SeniorManagers andCerticationRegimetraininganddiversity&inclusiontraining.ThisyearDirectorshavealso undertakensessionsprovidedbyexternalprovidersinrespectofDirectors’Responsibilitiesand Obligations, Listing Rules and Disclosure & Transparency Rules. Afull,formalandtailoredBoardinductionprogramme, whichincludestraining,has alsobeen developedtoprovideforanynewDirectorsjoiningtheBoard,asfurtherdescribedintheNomination Committee Report. The CompanySecretary alsoprovides regular updatesto theBoard andCommittees on regulatory and corporate governance and company law matters. Board Evaluation and Effectiveness Attheendoftheyear,aformalandrigorousinternalperformanceevaluationwasconductedin respectof theBoardandeachofits Committees,coveringprocessesthatunderpin theBoardand Committeeeffectiveness,BoardandCommitteeconstitutionandcommitment,Boarddynamics, culture,valuesandstrategyandstakeholderoversight.Theevaluationswereconductedbyway ofquestionnairesforeachDirectortocomplete,withresponsesprovidedtotheChairandthe CompanySecretary, followedby furthercalls withthe individualDirectors andthe Chair.A summary of the responses was provided and discussed at the Board’s meeting in November 2021. The results ofthe Board evaluation indicatedstrong performance and effectivenessof the Board and Committees.TherewereanumberofareaswheretherewasstrongagreementacrossthewholeBoard andin particular,theBoarddynamicswas identiedasareal areaofstrength.Themesthat surfaced and resulting actions thathave been identied will form adevelopment plan for thefollowing year. The Chair’s performance wasalso discussed by the other Non-ExecutiveDirectors, led by theSenior Independent Director, and feedback was subsequently relayed to the Chair. Appointment and Election FollowingtheBoardandCommitteeperformanceevaluationconductedattheendof2021,the BoardhasconrmedthatitconsidersallDirectorstobeeffective,committedtotheirrolesandto have sufcient time to perform their duties. InaccordancewiththeCompany’sArticlesofAssociation,alltheDirectorswillbestanding forappointmentbyShareholdersatthe Company’srstAnnualGeneral Meetingsince their appointment as Directors, to give shareholders the opportunity to conrm this. Current Service Contracts and Terms of Engagement AlloftheDirectorshave serviceagreements orletters ofappointment, detailsof whichare setoutbelow. Executive Directors Name (Position) Date of Service Agreement Notice Period by Company (months) Notice period by Director (months) Romi Savova (CEO)16 March 20216 months6 months Jonathan Lister Parsons (CTO)16 March 20216 months6 months Non-Executive Directors Name Date of Appointment Notice Period by Company (months) Notice Period by Director (months) Mark Wood CBE2 February 20213 months3 months Mary Francis CBE2 February 20213 months3 months Michelle Cracknell CBE2 February 20213 months3 months TheNon-Executive Directors(includingthe Chairman)donot haveservicecontracts, butareinstead appointed by lettersofappointment. Eachappointment is fora xed termending on theCompany’s thirdannualgeneralmeetingfollowingtheCompany’slisting,buteachIndependentNon- Executive Directormay beinvited bythe Companyto serve fora furtherperiod. Inany event,each appointment is subject to annual re-electionby the Company at each annualgeneral meeting, and eachNon-ExecutiveDirector’sappointmentmaybeterminatedatanytimewiththreemonths’ written notice. Conicts of Interest Rulesconcerning Directors’conicts ofinterests areset outin theCompany’s Articlesof Association. All other signicant commitments andpotential conicts of interest which aDirector may have are requiredtobedisclosedbothbeforeappointmentandonanongoingbasis,andarrangements would be put in place, asand when it is considered appropriate, tomanage conicts, including any whichresult fromsignicant shareholdings.All Directorsare generallyasked toconrm thatthey do not have any conicts of interest at the beginning of each Board and Committee meeting. PensionBee Group plc 66 ![]() Whistleblowing TheCompany’sWhistleblowingPolicyoutlinestheCompany’sapproachtowhistleblowing.The policyrecognisesthatwhistleblowingisanimportantactivitythathelpsrmstolearnaboutand resolveproblemsbeforethey escalatefurther.Whistleblowingalso helpstheFCAregulatethe nancial servicessector andinformation provided bywhistleblowers hascontributed tones, permissionschangesandother interventions.Theaimofthepolicyisto ensuretheCompanyhas a t-for-purposewhistleblowing procedurethat encouragesemployees tocome forwardwith disclosures withoutfearof reprisal.TheCompany’s whistleblowingchampion isMichelleCracknell CBE, Chair of the Audit and Risk Committee. Stakeholder Engagement The Directorsrecognise theirduty under Section172 ofthe CompaniesAct toconsider the interests ofstakeholders,andthenatureofourbusinessmeansthattheinterestsofourstakeholders(including customers,employees,suppliers,shareholders,ourcommunities,governmentandregulatorsand ourplanet)arefrontofmindintheBoard’sdecision-makingprocess.Furtherinformationrelating to howweengage withour stakeholders,together withthe Section172 Statement,are setouton pages 32 to 40 of the Stakeholders section of the Strategic Report. Manyof thestakeholder relationshipsaremanagedby theCEO andothermembersof theExecutive Managementteam,withregularupdatesprovidedtotheBoardandCommitteesasappropriate throughouttheyear.TheChairoftheBoardorCommitteeswilloffersupportonanysignicant matters relating to their areas and direct engagement where appropriate. Employee Engagement TheBoardengagedwiththewiderworkforceduringtheyearviaexistingchannelsandinitiatives that arein placeacross the Companyto ensurethat our employeesare listenedto andwell represented, including: • Weekly all-Company Show & Tell meetings with CEO and Executive Management team. • ‘Happiness!’ meetings for employees to discuss their wellbeing with their manager bi-monthly. • Annual Diversity,Inclusion andEngagement surveyof allemployees to seekfeedback and measure progress. • Annual manager feedback survey. • Anonymous channels for colleagues to submit any requests, concerns, issues they may have. • ‘DiversityChampions’ appointedwiththe aimofhelping representemployeesandto promote diversity and inclusion within the company. • Qualied Mental Health First Aiders, trained to provide mental health support to our colleagues. • Workforce engagement events with the Board. During the course oflastyear, wewere pleasedtohave initiated‘Town Hall’meetings forall employeestohavetheopportunitytomeetandengagewiththeBoard,addressingemployees’ queriesand concerns.Mary FrancisCBE, ourSenior IndependentDirector andthe directorresponsible for employee engagement,hosted our 2021 employeeengagement event, facilitating discussionon themes suggestedby andvoted forby employees.All our eventsand meetingsare hostedonline in ordertomaximiseparticipationandinclusion.WealsoappointedaHeadofCulture,Inclusionand Wellbeing to lead anew program focused on the enhancementof our values-based culture. TheBoardwaskeptapprised ofemployee mattersand engagementthrough regularupdates provided by the SID,the CEO and other members ofthe Executive Management teamat Board and Committee meetings. Further information relatingto how we engage withour employees is setout on pages 32 to40 of the Stakeholders section of the Strategic Report. Relations with Shareholders TheBoardiscommittedtoproactiveandconstructiveengagementwiththeCompany’sshareholders andiskeentoensurethatshareholderviewsarewell-understood.TheCompany’sshareholders include many of our customers who became shareholders at the time of the IPO,together with our employees who are, or will become, shareholders in PensionBee. InvestorrelationsismanagedbytheCEO, CFOand theCCO, whoregularly driveshareholder and analyst engagement. Virtual one-to-one investor meetings and roadshows are structured around theregularcommunication ofnancial andoperationalresults, includingquarterly trading statementsandpresentationstoinvestorsandanalysts,withrecordingsbeingmadeavailableon theCompany’swebsite.Regularengagementaimstoensurethatbothshareholdersandsell-side analysts understand the Company’s investment case, strategy and performance. RegularupdatesareprovidedtotheBoardsothattheyarewell-informedofviewsonavarietyof topics,such asnancialperformanceandgovernance, thatareexpressed.Feedback fromexternal advisors to the Company, including its corporate brokers andpress agency, who are actively engagedwiththeinvestorandanalystcommunitiesisalsogivenregularly.Furtherinformation relatingto howweengagewith ourshareholdersis setoutonpages 32to40of theStakeholders section of the Strategic Report. Going Concern and Viability Statement TheDirectorshaveassessedtheviabilityoftheGroupoveraperiodthatexceedsthe12months requiredbythegoingconcernprovision.Detailsofthatassessmentaresetoutinthe‘Viability Statement’ on page 56 of the Strategic Report. Annual Report and Financial Statements 2021 67 ![]() Annual General Meeting The Board looks forward to welcoming shareholders to the Company’s rst Annual General Meeting, whichwill beheldon 18May 2022.TheNotice ofthe AGMwill bedistributed to Shareholders and madeavailable on theCompany’s website, andwhere appropriate, byan announcementviaaRegulatoryInformationService,ifanychangesarerequiredtobemadeto the AGM arrangements. ThehybridformatofourAGMwillgiveshareholderstheopportunitytoparticipatevirtuallyinan inclusiveway, providingtheBoard withanopportunityto communicatedirectlywith,and answer questionsfrom, bothretail andinstitutionalshareholders.Shareholders willbe abletoview theAGM proceedingsandaskquestions onlineviaa chatfunction.Furtherdetails willbeset outinthe Notice of the AGM. Mark Wood CBE Chairman 13 April 2022 PensionBee Group plc 68 ![]() 4 Nomination Committee Report #### Mark Wood CBE Chair, PensionBee Nomination Committee Duties of the Nomination Committee Regularly reviewing the structure, size and composition of the Board and recommending changes Putting in place and reviewing Board and senior management succession plans and appointments Takinganactiveroleinsettingandmeetingdiversityobjectivesandstrategiesandmonitoring the impact OverseeingthehiringandevaluationprocessfornewDirectorsandensuringtheyreceiveafull, formal and tailored induction Reviewing the leadershipneeds of the organisation witha view to ensuring thecontinued ability of the organisation to compete effectively in the marketplace ReviewingtheresultsoftheBoardevaluationprocessthatrelatetothecompositionoftheBoard and succession planning Reviewing annually the time required from Non-Executive Directors Committee Members and Attendance Committee MemberPositionEligible MeetingsAttended Meetings Mark Wood CBEChair of the Committee22 Mary Francis CBESenior Independent Director22 Michelle Cracknell CBE Independent Non-Executive Director 22 Romi SavovaChief Executive Ofcer22 TheNomination Committeemustcomprisenot lessthanthreeDirectors, withthemajorityof members being Non-Executive Directors who are independent. MarkWoodCBE,Michelle CracknellCBE,MaryFrancisCBEandRomiSavovaweremembers ofthe NominationCommittee fromthetime oftheCompany’s listingandas at31 December2021.Further biographicaldetails areset outonpages 60to 62ofthe Boardof Directors&Executive Management section of the Corporate Governance Report. Dear Shareholder, On behalfof the Board,as Chairof the NominationCommittee, I am pleasedto present the NominationCommitteeReportfortheyearended31December2021.Thisreportisintendedto provide shareholderswith aninsight into theareas consideredby the NominationCommittee and nature of the work undertaken. IthasbeenaparticularlybusyyearfortheCompany,withitslistingontheMainMarketofthe LondonStockExchangeinApril2021.FollowingchangestotheBoardmadeintherunuptoour listing,theCommittee’sfocusthisyearhasbeenonthecompositionoftheBoard,theBoard’s Committees andthe ExecutiveManagement team,together with successionplanning andbuilding out our Board and Committee evaluation process. Roles and Responsibilities The roleof the NominationCommittee is setout in itsterms of reference,which is available onthe Company’swebsite.ThedutiesoftheNominationCommitteeinclude,butarenotlimitedtothe following: Annual Report and Financial Statements 2021 69 ![]() Wealsocommencedwork onagreeingtheformal recruitmentprocessforanadditionalNon- ExecutiveDirector,giving considerationto whattheappropriateskillsset andconsiderations around diversityattheBoardlevelshouldbe.Weinitiatedworkontheinitialelementsoftheselection process, which more generally includes: • The Committee agreeing the skill prole, knowledge and experience that are required. • Creating and approving the role specication. • Advertising the role externally on Workable, NED on Board and Dynamic Boards. • In-house Talent team collatingthe potential candidates for reviewand the CEO and CCOreviewing the candidateproles to createa shortlistof diversecandidates for the two-stepinterview process. • First stage interviews with the CEO and the CCO. • Second stage interviews with the Non-Executive members of the Committee. • Selectingapreferredcandidate andundertakingthecompliancerequirements oftheFinancial Conduct Authority’s Senior Managers and Certication Regime. • The Committee undertaking anal review of the preferred candidate (before makinga decision to recommend one candidate to the Board for appointment). In March 2022, we concluded our process and made a recommendation forthe appointment of an additionalNon-Executive Directortothe boardinconnectionwith theCompany'sexpected transfer tothePremiumSegment,atthesametimeasrecommendingtheappointmnetofanadditional Executive Director to the board in 2022. Succession Planning Inrelationtosuccessionplanning,theNominationCommitteecreatedasuccessionplanforthe membersoftheBoard,whichprimarilyconsideredwhatwouldoccurintheeventofunexpected incapacity, given that there were no planned departures or retirements. Contingencyplansandprocessstepswereagreedwithregardstotheincapacityofeitherofthe Executive Directors, with the approach dependant on the anticipated period of absence. ItwasagreedthatiftheChairmanoftheBoardwasincapacitated,theSeniorIndependentDirector would ll hisposition on an interim basis,and that if one ofthe Independent Non-Executive Directors was tobecome incapacitated, theother Non-ExecutiveDirector would coverthe positionof Chair of the Committees as required.If a Non-Executive became unable toperform their duties, theCompany wouldneedtoensurethattheIndependentDirectormajoritywasmaintained,andassuch,the Companywouldseektoappointarecruitmentspecialisttoassistwithcompletingtherecruitment processexpediently.TheCompanyconsideredthattheadditionalappointmentofanotherNon- ExecutiveDirectoras anticipatedin 2022would furtherenhance theBoard’s abilitytocontinue functioning effectively should anexisting Non-Executive Director become unexpectedly unavailable. TheNomination Committeewassatisedthatthe appropriatecontingencyarrangementswere in placein linewith theCompany’srisk appetiteand agreedthatit wouldlookto furtherexpand the succession plan in the coming year. Meetings are heldatleast twiceayearat appropriatetimesandotherwise asrequired.The Committee met twice from the timeof the IPO until 31 December 2021, withboth meetings being heldbyvideo conference.In additionto theCommittee members,other regularattendees included the CTO, the CCO and the COO. AftereachmeetingtheChairoftheCommitteereportstotheBoardontheCommittee’sproceedings in respect of all matters within its duties and responsibilities. Committee Key Activities 2021 Key Activities Reviewing Board and management team updates Reviewing Committee Terms of Reference Reviewing Committee Work Plan for 2021 and approving Committee Program for 2022 Reviewing membership of Board and Committees Reviewing time commitment from Non-Executive Directors Establishing the Board succession plan Establishing the Board Evaluation process and completion of Committee evaluation process Considering the Board Induction Programme Board Composition and Recruitment Followingitsannual reviewof BoardandCommitteecomposition,the independenceof Non- ExecutiveDirectorsand theirtime commitment,the NominationCommitteeconrmedtothe Board thatit remainedsatised that thebalance ofskills, experience,independence andknowledge on the Board and Committees was appropriate. This year the NominationCommittee considered the addition of afurther Executive Director to the Board during the course of 2022. PensionBee Group plc 70 ![]() Board Evaluation Aspartofthe workofthe NominationCommittee,aprocessfortheCompany’srstboardevaluation postitslistingwasdevelopedandagreed.Aformalandrigorousinternalperformanceevaluation was designedandconductedinrespect of theBoard andeachofitsCommittees,covering processesthatunderpintheBoardandCommitteeeffectiveness,BoardandCommitteeconstitution andcommitment,Board dynamics,culture,valuesandstrategyandstakeholderoversight.The evaluationswere conductedbyway ofquestionnaires,with responsesprovidedto theChairandthe CompanySecretary, followedby furthercalls withthe individualDirectors andthe Chair.A summary of the responses was provided and discussed at the Board’s meeting in November 2021. TheresultsoftheBoardevaluationindicatedstrongperformanceandeffectivenessoftheBoard andCommittees.Therewereanumberofareaswheretherewasstrongagreementacrossthe whole Board and in particular, the Board dynamics was identied as a real area of strength. Themes thatsurfaced andresultingactions thathavebeen identiedwillforma developmentplanfor the following year including: • Views on the skills or knowledge an additional Non-Executive Director could bring to the Board. • Ensuring a focus on diversity at a Board level to reect the customer base. • A desire to strengthen knowledge in the area of ESG. • HorizonscanningaspartoftheBoardmaterials,alongsidedeepdivesessionsonparticular aspects of the business. • Investor perceptions around the business. • Continuing to receive concise Board papers plus other papers outside the Board cycle. The Nomination Committee willconsider adopting an externallyfacilitated Board evaluation indue course,aligningwiththeUKCorporate GovernanceCoderequirementforFTSE350companiesto carry out an externally facilitated evaluation of the Board at least every three years. Committee Evaluation As part of the processset out above in ‘BoardEvaluation’, in early 2022, theNomination Committee undertook an assessment of its own effectiveness and was satised that it is operating effectively. Diversity & Inclusion TheBoardbelievesthatthemake-upofPensionBee’semployeesshouldreectthediversityof theCompany’scustomerbase.TheCompanyiscommittedtopromotingdiversityandinclusion acrossthebusiness,throughmeasuressuchastraining,anonymisedhiringandpromotioncycles andinclusionintheCompany’sperformancematrices,butalsoinformallythroughits‘diversity champions’, external and internal speaker events and a host of other initiatives. TheCompany haspublicly committedto publictargets forgenderandrace andis working towardsbecominga‘DisabilityCondent’employer.TheCompanyhaspublisheditsDiversity, InclusionandEqualityPolicywithpublictargetsfor2022,andcontinuallymeasuresitsprogress against these objectives. AppointmentstotheBoardandCommitteestakeintoconsiderationtheindividualsskills, knowledgeand experience,andmerit, butthereis alsoafocus onpromotingdiversity amongthe Board& Committeesso astoensure thecompositionisappropriately balanced.We arealsoworking towards increasing ethnic diversity at Board and Committee level. Thisyear,PensionBee achievedmorethan50% 58 femalerepresentation acrossitsentireemployee base,and50%acrossitsBoardandExecutiveManagement levels,satisfyingtheHampton-Alexander Review requirement for at least 33% female representation. 59 Further detail is setout on pages 32 to40 of the Stakeholders sectionand on pages 42 to51 of the ESG Considerations section of the Strategic Report. Nomination Committee Priorities for 2022 For2022,theCommitteewillfocusitsworkaroundtherecruitmentandappointmentofanadditional Non-ExecutiveDirectorandtheadditionofafurtherExecutiveDirectortotheBoardduringthe courseof2022.ThecommitteewillalsoreviewtheBoardSuccessionplan,broadeningittocover theExecutiveManagementteamandotherkeypositions withintheCompanyas appropriate, consideringanyactionsthatneedto betakenwithrespecttoincreasingdiversityandsupporting the growing business. Appointment of Directors The Committeeis satisedwiththe Board'seffectiveness andhas recommendedthat allmembers of the Board be put forward for appointment at the 2022 Annual General Meeting. Mark Wood CBE Chair of the Nomination Committee 13 April 2022 58 Supported by PensionBee’s Diversity & Inclusion Survey, completed in June 2021. 59 As of 31 December 2021. Annual Report and Financial Statements 2021 71 ![]() Duties of the Investment Committee Reviewingtheavailablerangeofproductoptionsforcustomers,includinginaccumulationand decumulation Reviewing the selection or change of plans and asset managers Reviewing the choice architecture available to customers Reviewing the pricing of each plan relative to peers Reviewing the performance of each plan relative to peers Reviewing the risk prole of each plan Reviewing the processes around customer communication and support Reviewing the administration, service, and core nancial transactions Reviewing the environmental, social and governance considerations Reviewing the retirement offering Reviewingfundmanagertermsandperformance,includingservicelevels,breachesandchanges to terms and conditions Overseeing the selection process for the appointment of, and ongoing relationship with, the Governance Advisory Arrangement TheInvestmentCommitteeassists theBoard indischarging itsoversightofPensionBee’sinvestment proposition.TheInvestmentCommitteeisresponsibleforreviewingtheCompany’sproduct offering. This includesthe range of options availableto customers, the selectionor change of asset managers,the pricingofthe plans,aswellas theperformanceand theriskproleof eachplan.It also reviews the performance of fund managers. TheInvestmentCommitteealsoassiststheBoardbyoverseeingtherelationshipwiththeGovernance AdvisoryArrangement(whichPensionBeeappointedtoassessthedesignandimplementationof itsinvestment pathwayssolution), includingmaking recommendationstotheBoardregarding their appointment and removal, coordinating the tender process and approving their remuneration and terms of engagement. 5 Investment Committee Report #### Mark Wood CBE Chair, PensionBee Investment Committee Dear Shareholder, On behalf of the Board, as Chair of the Investment Committee, I am pleased to present the Investment Committee Report for the nancial year ending 31 December 2021. Thereportisintendedtoprovideshareholderswithaninsightintotheareasconsideredbythe Investment Committee and nature of the work undertaken. Theglobal pandemichasbroughtgreateconomic uncertaintyandmorethan everourcustomers rely onourplanstosecuregoodretirementoutcomes.TheInvestment Committee takesits responsibilitiesveryseriouslyandhasspent2021fastidiouslymonitoringtheperformanceand riskprolesofallourplans,toensuretheycontinuetoofferourcustomersvalueformoneyina changingmarket. Wherea planno longeroffers valuefor moneywe act,like wedid withthe closure of the Match and Future World Plans in 2021. As a Committee we have continued to hold our asset managers toaccount, to ensure they provide the highest levels of service and security for our customers. Finally,wearepleasedtohaveoverseenESGintegrationintoourinvestmentrange,tosecure sustainable value for our customers, our society and our planet. Roles and Responsibilities Therole ofthe InvestmentCommitteeis setoutin itstermsof reference,whichis availableon the Company’swebsite.ThedutiesoftheInvestmentCommitteeinclude,butarenotlimitedtothe following: PensionBee Group plc 72 ![]() Committee Members and Attendance Committee Members 60 Position Eligible Meetings Attended Meetings Mark Wood CBEChair of the Committee43 Michelle Cracknell CBEIndependent Non-Executive Director44 Mary Francis CBESenior Independent Director44 Romi SavovaChief Executive Ofcer43 The Investment Committeemust comprise notless than three Directors, of whichat least two must be Non-Executive Directors who are independent. MarkWoodCBE,Michelle CracknellCBE,MaryFrancisCBEandRomiSavovaweremembers ofthe Investment Committeefrom thetime of theCompany’s listingand as at31 December2021. Further biographicaldetails areset outonpages 60to 62ofthe Boardof Directors&Executive Management section of the Corporate Governance Report. Meetingsareheldatleastthreetimesayearatappropriatetimesandotherwiseasrequired.The Committeemet fourtimesduringtheyear to31December2021,with allmeetingsbeingheld by videoconference.InadditiontotheCommitteemembers,otherregularattendeesincludedthe Chief Engagement Ofcer and other members of the Executive Management team. AftereachmeetingtheChairoftheCommitteereportstotheBoardontheCommittee’sproceedings in respect of all matters within its duties and responsibilities. Committee Key Activities 2021 Key Activities Ensuring our plans and plan range offer value for money 2020 Value for Money Report Implementation of FCA’s Investment Pathways Reviewing of Investment Pathway products Comparing value across plans using AgeWage Closing plans that no longer offer value for money 60JosephSuddabyresignedasaDirectorandtheChairoftheInvestmentCommitteeinMarch2021aheadof theCompany’slisting. Hewaseligibletoattend 1meetingin2021and wasinattendance.MarkWoodCBE was appointed as Chair of the Investment Committee subsequently. Monitoring fund manager performance Assessing asset manager performance against the terms of our contract Annual review of duties and responsibilities to report back to the Board SSGA / FTSE index error impacting Tracker Plan customers Reinstating all impacted customers whilst issue was investigated and resolved Reminding all our managers of their legal obligations and liability with regard to customer funds ESG integration Expanding exclusionary screens on core plan range Surveying customers to ensure our plans match their ESG views Ensuring that all our plans can be screened Committee Evaluation In November 2021 our Board evaluation process included the work of the Investment Committee. MembersstronglyagreedthattheInvestmentCommitteehasadequateoversightoftheGroup’s investmentpropositionandeffectivelyreviewsthefundmanagers’performance.TheCommittee conrmed to theBoard that it remainssatised that thebalance of skills, experience, independence and knowledge on the Board and Committees is appropriate. Investment Committee Priorities for 2022 For2022,theCommitteewillfocusitsworkaroundthe2021ValueforMoneyreport,theGovernance AdvisoryArrangementreport,monitoringfundmanagerperformance,furtherexplorationofthe launch of a new impact plan, and ESG integration for 2023. Mark Wood CBE Chair, Investment Committee 13 April 2022 Annual Report and Financial Statements 2021 73 ![]() 6 Audit and Risk Committee Report #### Michelle Cracknell CBE Chair, PensionBee Audit and Risk Committee Role and Responsibilities TheroleoftheAuditandRiskCommitteeissetoutinitstermsofreference,whichisavailableon the Company’s website. The duties of the Audit and Risk Committee include, but are not limited to: Duties of the Audit and Risk Committee MonitoringtheintegrityofthenancialstatementsoftheGroupandreportingtotheBoardon signicant nancial reporting policies and judgements Reviewingthecontentofthe annualreportandaccountsandadvisingtheBoardonwhetheritis fair, balanced and understandable OverseeingtherelationshipwiththeexternalauditorandmakingrecommendationstotheBoard regarding the re-appointment of the external auditor Reviewing and approving the annual audit plan Assessing the external auditor’s independence and objectivity AssistingtheBoardwiththedenitionandexecutionofariskmanagementstrategy,riskpolicies and current risk exposure Reviewing the adequacyand effectivenessof theGroup’s risk managementand internal controlsystem Reviewingtheadequacyand secuirty of theCompany's whistleblowingarrangementsand procedures relating to fraud, briberyand money laundering. ReportingtotheBoardaftereachmeetingonallmatterswithintheCommittee’sdutiesandresponsibilities Committee Members and Attendance Committee MemberPositionEligible MeetingsAttended Meetings Michelle Cracknell CBEChair of the Committee66 Mary Francis CBESenior Independent Director66 TheAuditand RiskCommitteemust comprisenot lessthantwo Directorswhile theGroupis considered a'smallercompany'pertheUKCorporateGovernanceCodeandsubsequentlythreeDirectors,allof whommust beNon-Executive Directorswho areindependent. Wherepossible itshould includeat least one memberof the RemunerationCommittee and/orone Non-ExecutiveDirector responsible for risk. Dear Shareholder, On behalf of the Board, as Chair ofthe Audit and Risk Committee, I am pleasedto present the Audit and Risk Committee Report for the year ended 31 December 2021. Thereporthighlightstheworkthathasbeen performedovertheyear,andoutlineshowwehave discharged the responsibilities delegated to the Committee by the Board. Duringthe yearthe AuditandRisk Committeeworkedwith professionaladvisors aheadofthe listing on the LondonStock Exchange toensure the Groupmet the listingrequirements and maintaineda robust control environment for the future effectiveness of the business. Over the year, the Committeefocused on itskey responsibilitieswith assisting theBoard by overseeingtheGroup’snancialreporting,effectivenessofthenancialcontrolenvironmentand providingoversight oftheexternal auditorrelationshipand processes.TheCommittee alsoassessed the independence and objectivity of the external auditor. TheCommitteealsoassiststheBoardinitsoversightofriskwithintheGroup.Ithasaparticular focus onmonitoring the effectivenessof, andimprovements being madeto, theGroup’s risk managementframework.Thisincludesthedocumentation andcommunicationofthe Group’s policies,theactivitiesoftherstandsecondlineofdefenceinmanagingrisksinaccordancewiththe Group’s risk appetite and the external auditing activities with respectto regulatory and information security compliance. Asis customary, the Boardas a whole remains responsiblefor the Group’s risk management and strategy, and for determining an appropriate risk appetite. Further information on the Committee’s activities is provided as follows. PensionBee Group plc 74 ![]() MichelleCracknellCBEandMaryFrancisCBEweremembersoftheAudit&RiskCommitteeforthe yearto31December2021.MichelleCracknellCBEisaqualiedactuarywith30years’experience innancialservicesandmorethan13years’experienceasaBoardDirector,includingveyears’ experience asan Audit andRisk CommitteeChair. Furtherbiographical details areset outon pages60 to 62of theBoard of Directors& ExecutiveManagement section ofthe CorporateGovernance Report. Meetings are held at least four timesa year at appropriate times in the nancialreporting and audit cycle,andotherwiseasrequired.TheCommitteemetsixtimesduring2021withthemeetings beingheldbyvideoconference.InadditiontotheCommitteemembersotherregularattendees included theChairman, CEO,CTO, CFO, CCOand theFinance Director. Theexternal auditor,Deloitte LLP, also attended on most occasions. AftereachmeetingtheChairoftheCommitteereportstotheBoardontheCommittee’sproceedings in respect of all matters within its duties and responsibilities. Committee Key Activities 2021 Key Activities Financial Statements Reviewing the half-year reporting timeline Reviewing the interim report Reviewing the year-end nancials Reviewing going concern and liquidity risk External Audit Reviewing the management representation letter Reviewing the half-year audit programme and auditor report Reviewing the full year audit programme and audit report Reviewing external audit effectiveness and recommending for re-appointment Governance Reviewing Audit and Risk Committee 2022 meeting calendar Reviewing Financial Prospects and Procedures post-IPO recommendations Reviewing non-audit services policy Undertaking the Committee evaluation Reviewing Committee terms of reference Considering UK Corporate Governance Code requirements Risk Management and Internal Controls Reviewing principal risks and uncertainties Reviewing overall internal controls and risk management systems Reviewing whistleblowing and anti-bribery and corruption policy Reviewingmonthly riskupdatesthatcoverpolicy changes,second-linecontrol activityand reported incidents Overseeing onboarding of new policy management software Overseeing external regulatory audit Overseeing external information security audit and ISO 27001 certication Approving the 2022 Risk Plan Financial Reporting Group Financial Statement Reporting OneofthecoreresponsibilitiesoftheAuditandRiskCommitteeistoensuretheintegrityofthe nancial statements of the Group. For the nancial year, the Audit and Risk Committee: • Reviewed the Interim Report and Annual Report and recommended approval to the Board. • Reviewed the completeness of the nancial reporting disclosures. • Reviewed the application and appropriateness of accounting policies. • Reviewed the going concern assumption and viability statement. Signicant Issues Considered by the Committee in Relation to the Financial Statements Signicant accounting policies and accounting judgements areidentied by management and the externalauditorandarereviewedandchallengedbytheCommittee.Thesignicantaccounting policies and judgements considered by the Committee, anddetails of how they were addressed, in respect of the year ended 31 December 2021 are set out below: Areas for Consideration Committee Review and Conclusion Revenue RecognitionTheCommittee consideredthe relevance,revenue streamsandrecognition criteriastipulatedintheaccountingstandard.TheCommittee recommended the policy to the Board for approval. Share-based PaymentThe Committeeconsidered the grantdate fairvalue, vesting conditions, initial recognitionand subsequent measurementof share optionsas set out in the accounting standard. The Committee recommendedthe policy to the Board for approval. Research and Development The Committee reviewed the current accounting treatment of Research and Development,therelevance, andwhether anintangible assetshouldbe recognised. The Committeereviewed the policy andrecommended it to the Board for approval. Annual Report and Financial Statements 2021 75 ![]() Income TaxesThe Committeeconsidered theGroup’s taxposition andtheaccounting standardrequirementson recognitionofadeferredtax asset.TheCommittee reviewed the policy and recommended it to the Board for approval. LeasesThe Committeereviewed thebasis ofaccounting foralltypes ofleases; shorttermandlongterm,lowvalueandhighvalueleases.TheCommittee recommended the policy to the Board for approval. FRS 102 for PensionBee Group plc standalone nancial statements Duetopracticalreportingconsiderations,theCommitteereviewedthe recommendationforreportingunderdifferentaccountingframeworks withinthegroup.TheCommitteerecommendedtheapprovalofadoption of FRS 102 by PensionBee Group plc standalone accounts to the Board. Going Concern and Viability Statement In addition to considering signicant accounting policies and judgements, the Committee plays an importantroleintheproductionof theAnnualReportand FinancialStatementsandInterimResults. Thisincludesreviewing andchallenging theassumptions thatsupport theuse ofthe goingconcern basis for the preparationof the nancial statements and the statementgiven by the Directors as to the Group’s longer-term viability. TheCommitteerevieweddetailedmanagementanalysiselaboratingonthegoingconcern assumptionsandtheviabilitystatement.Thisincluded theKPIs,protandloss,cashow,balance sheetandcapitalforecastsonamonthlybasis.TheCommitteeconsideredadditionalstresstests, includingasharpdeclineinequitymarkets,theworseningofconversionandlowertransferred-in pensionpotsizes,allofwhichcouldpotentiallybecausedbytheCoronaviruspandemic,Brexit, theRussianinvasionofUkraineand/orinterestraterises.Furthermore,theCommitteeconsidered management mitigating actionsthat could be taken inthe stress scenarios and thestrength of the Group’s capital position. After due consideration, the Committee recommended to the Board that it was appropriate for the Group to adopt the goingconcern basis of accounting inthe preparation of the AnnualReport and FinancialStatementsfortheyearandthatbasedonthecurrentinformation,theDirectorscould make the Viability Statement as shown on page 56 of the Strategic Report. Fair, Balanced and Understandable TheAuditandRiskCommitteesupportstheBoardinensuringthattheAnnualReport,takenasa whole, is fair, balanced and understandable. TheCommittee considerstheprocedurearoundthe preparationandreviewofthe AnnualReport andFinancialStatements.ItconsidersthenarrativesectionoftheAnnualReportandFinancial Statementstoensureitsconsistencywiththeinformationreportedandthatappropriateweight has been given to both positive and negative aspects of the performance of the Group. Followingitsreview,theCommitteeissatisedthattheAnnualReportandFinancialStatements are fair, balancedand understandable and establish thecontext necessary to give shareholdersand other stakeholders a balanced view between successes, opportunities, challenges and risks. The Directors’statement on afair, balancedand understandable AnnualReport andFinancial StatementsissetoutintheStatementofDirectors’Responsibilitiesonpage104oftheCorporate Governance Report. Risk Management Framework TheAuditandRiskCommitteeisresponsibleformonitoringandreviewingtheeffectivenessofthe Group’s internalcontrol andrisk managementsystems. TheGroup’s systemsof internalcontrol andrisk managementaredesignedtoidentify,evaluateandmanagerisks.Throughmonitoringtheeffectiveness of its internalcontrols and riskmanagement, the Committeeis able to maintain a goodunderstanding of principalrisks, key emergingareas of risk andthe Executive Team’s decisionmaking process. In2021,AdebolaHaffnerjoinedas SeniorLegal Counselfollowing morethan adecade ofexperience in nancialservices and carried outa general reviewof theCompany’s Risk Management Policyand the risk framework and regularly engages with the Committee. Principal Risks TheBoardhasidentiedandsetoutthekeyrisksthat,iftheyweretomaterialise,couldhavean impactontheGroup’sabilitytomeetitsstrategicobjectives.Theserisksincluderegulatoryrisk, informationsecurityrisk,operationalrisk,marketriskandcreditriskandarefurtherdetailedon pages 52 to 55 of the Managing our Risks section of the Strategic Report. Risk Appetite The Board is responsible for establishing the risk strategy and setting out the risk appetite. Basedonanassessmentoftheimpactoftherisk,theCompanyhasoutlineditsriskappetitefor theoccurrenceoftherisk.Withrespecttomostrisks,theCompany’sriskappetiteislow.Therisk appetiteisdetermined bytheCompany’sdesiretokeepnancial lossesandreputationaldamage arisingfromitsprincipalrisksaslowaspossibleowingtotheimportanceofallocatingcapitalto growthand theCompany’s desiretobuildtrustin itsservices. TheCompanygenerally hasa medium risk appetitewherethe riskarises asafunction ofthe businessmodel, forexamplethe risksarising from uctuations in investment markets. PensionBee Group plc 76 ![]() managementinformation,reportingobligations,identicationofrisk,riskoversight,business planning,productsandinternalgovernance.TheCommitteewasinformedoftheprogressand satisfactorycompletionoftheinitialaudit,whichwasconductedbyanexternalparty.Regular auditing activities will continue into 2022 and beyond. Information Security and ISO 27001 Certication Inearly2021,PensionBeewassubject toan auditby athirdpartyof itsinformationsecuritypractices, resulting in the Companyreceiving ISO 27001 certication. PensionBee had previouslyreceived the GoldStandardintheIASMEGovernanceFramework.PensionBeeintendstocontinuecompleting the annual ISO 27001 recertication process. External Audit Deloitte is PensionBee’s external auditor, with 2021 being the fourth nancial year to be audited by them. Kieren Cooperhas fullled the roleas lead auditpartner for the 2021year, having taken over from David Rozier who led the 2020 year audit. TheCommitteeoverseestheauditrelationshipwithDeloitte. TheCommittee’sresponsibilitiesare appointing,reappointingandremovingtheexternalauditorandoverseeingtheireffectiveness, independence and objectivity. During 2021, theCommittee approved the reappointment ofthe auditor, the proposedaudit fee andtermsofengagement.TheCommitteealsoreviewedtheauditplanpresentedbyDeloitte. Following the initial appointment of Deloitte in 2020, and in consideration of PensionBee’s listing in2021andtherequirementforpubliccompaniestore-tendertheirauditeverytenyears,itis expected the Company’s auditmandate will be re-tendered atthe latest in 2031. External Auditor Effectiveness, Independence and Objectivity TheCommitteeconsideredtheeffectivenessof theaudit processand inearly 2022,reviewed the FRC’s Audit Quality Inspection report and challenged Deloitte on the findings. Furthermore, the Committeeconductedaperformancereviewforthe2021financialyear,byseekingfeedback fromCommitteemembersandtheExecutiveManagementteamonthequalityoftheaudit teamand theaudit deliveryaswell asthechallenges demonstratedby Deloitteinits workand interactionswith management.TheCommitteewassatisfiedthat theservicesprovidedbythe external auditormet the requiredquality standards. TheChairoftheCommitteehasregularinteractionswiththeexternalauditpartneroutsideof Committeemeetings andwithoutattendanceof themanagement team.Furthermore,a meetingof the Committeemembers wasalso heldwith theauditors without theExecutive Managementteam. TheCommitteeconsideredtheindependenceandobjectivityoftheexternalauditor.This consideration wasdone forboththe auditrm andthe auditteam. Thiswasbased onthe Monthly Risk Reviews TheBoardreceivesmonthlyupdates includingreportsonanybusinessareaswhichare,orshould be,subjecttofurthercontrolsoradditionalmeasurestomitigateanyneworchangingrisksthat havealreadybeenidentied.Thereport alsoprovidesanoverview ofpolicyupdates,incident reporting for the month and the nature of risks the Company is witnessing operationally. TheMonthly RiskReviews detailthemonitoring activitiesthe secondlineof defencehas undertaken during the month.Theseincludemonthly checkingofkeynancial processesrelatedtothe Company’snancialreportingactivities,suchasdeclarationsoftaxirregularities,capitaladequacy calculations, related party transactions and incoming supplier due diligence. Overall,themonthlyriskreviews,combined withtopicsraisedatthe Committeemeetings, enabletheAuditandRiskCommitteetoeffectivelyoverseetheCompany’sapproachtorisk management. Policy Management Software In2021, PensionBeeimplementedClausematch,a policymanagement,regulatory changeand compliance platform,as its mainpolicy management software.Clausematch facilitatesan auditable process for the review and dissemination of all of the Company’s policies. Internal Audit TheCompanyperformsinternalauditingactivitiesaccordingtoacalendaroverseenbytheAudit andRiskCommittee.TheCompanyemploysexternalpartiestoprovidethirdlineassuranceand these parties are appointed based on their sectorexpertise, for example, investment management, nance,compliance, regulationand informationsecurity expertise.The Auditand RiskCommittee is kept up to date with the work of these parties. Therequirementforfurther auditswillremain underconsiderationas partofthewiderconsideration ofinternalcontrolsandriskmanagement.TheCompanywillconductadditionalinternalauditing activitieswhenappropriate,whereadditional assuranceisrequiredorwherethereareconsidered to be risks. TheinternalauditingactivitiesarecurrentlycoordinatedbytheRiskManagementteamandthe Company is satised that the Auditand Risk Committee can oversee the implementation of third line assurance and gain therequired assurance over internal controls throughthe use of externalparties. External Regulatory Audit TheGroup begantheregular auditingofthe dischargeofitsregulatoryobligations, including theSenior Managersand CerticationRegime, requiredtraining, administrationstandards and Annual Report and Financial Statements 2021 77 ![]() signicance of the audit fees from PensionBee on the total revenue generated by Deloitte, otherengagementswithPensionBeeonwhichtheauditteammembersareinvolvedandthe relationshipbetween theauditteam membersand management.TheCommittee alsoconsidered theRevisedEthical Standardcompliance inlight ofnon-audit servicesprovided in2021.Lastly,the Committee approvedthe Non-Audit ServicesPolicy toensure auditor independence,in particular requiring Committee approval forany potential non-audit services soughtby management. Non-Audit Services Policy TheCommitteereviewedandapprovedthenon-auditservices(‘NAS’)policyin2021.Thepolicy isreviewedannuallybytheCommitteetosafeguardtheongoingindependenceoftheexternal auditor and to ensure compliance with the FRC’s Ethical Standard. The Committeeacknowledged thebenets thatcan beleveraged inusing theexternal auditorfor non-auditservices duetotheirunderstanding ofthebusiness.In thecircumstancewhereDeloitte isengagedtoprovidenon-auditservices,thepolicygovernstheprovisionoftheseservicesand ensures they do not impair the external auditor’s independence and objectivity. Before proceeding with a non-audit service, the fee comparative to the audit, types of services, and externalauditorindependence areconsidered. TheCommittee’sapprovalhasto beachieved before the externalauditor is engagedto providenon-audit services.For permitted non-auditservices that are deemed tonot be material, theCommittee has pre-approvedthe use of theexternal auditor for cumulative amountstotalling less than£50,000. The thresholdup to £20,000requires the approval ofthe CFOand/orthe CEO.Non-auditfees withinthethresholdof£20,001 to£50,000require the approval of the CFO and CEO. Non-auditfeespaidtotheexternalauditorshouldnotexceed70%ormoreoftheaverageaudit fees forthree consecutivenancial yearsstarting fromthe IPO.The capwill become effectivefrom April 2024,after thethree yeargrace periodas apublic interestentity (‘PIE’)from thetime ofthe IPO. The externalauditor undertook non-auditwork in relationto the IPOReporting Accountant andTax Structuring processes and waspaid a total fee of £801kduring the 2021 nancialyear which can be found in the table that follows. The Committee issatised that the external auditor’sindependence has notbeen impaired bytheir provision of non-audit services. External Auditor Fee An overview of the total fees paid to Deloitte are shown in the table that follows. ItemAmount (£ 000) Other Assurance Services633 Tax Structuring Services167 Audit Related Services42 Financial Statements Audit Services128 Non-audit fees paidto the external auditorduring the year exceededaudit fees by 558%.The non- audit feescap willbecome effectivefrom April 2024after thethree yeargrace periodas aPIE from the timeof the IPO.Non-audit fees paid tothe external auditorwill not exceed70% or moreof the average audit fees for three consecutive nancial years starting from the IPO. Details of the fees paid to Deloitte during the year are shown in Note 9 of the Financial Statements. Compliance, Whistleblowing, Anti-Bribery and Corruption andFinancial Crime The Groupmaintains arobust set ofcompliance policiesthat are documentedand managedon the Clausematch platform. Whistleblowing TheCompany’sWhistleblowingPolicyoutlinestheCompany’sapproachtowhistleblowing.The policyrecognisesthatwhistleblowingisanimportantactivitythathelpsrmstolearnaboutand resolveproblems beforetheyescalate further.Theaim ofthepolicy istoensurethe Companyhas a t-for-purposewhistleblowing procedurethat encouragesemployees tocome forwardwith disclosures withoutfearof reprisal.TheCompany’s whistleblowingchampion isMichelleCracknell CBE, Chair of the Audit and Risk Committee. Anti-Bribery and Corruption TheCompanyhasazero-toleranceforbriberyandcorruptactivities,asoutlinedinitsAnti-Bribery andCorruptionPolicy.The aimofthepolicy istohelpPensionBeeupholdalllaws relatingto anti-briberyand corruption.Theanti-briberypolicyappliestoall Directors,ofcers,employees, consultants,contractors,interns, orany otherperson orpersons associatedwith theCompany (including third parties), no matter where they are located (within or outside of the UK). PensionBee Group plc 78 ![]() Financial Crime PensionBeehasaregulatory andlegalresponsibilitytoassisttheauthoritiesincountering the perpetrationof nancialcrimes.Financialcrimesincludebut arenotlimitedtomoney laundering, terroristnancing andfraud.Financial crimeis perpetratedbyindividuals andthereforethis policy is closelylinked tothe Company’sKnow YourCustomer Policy.Fraud canlead tohighly damaging outcomesforcustomersandisparticularly relevantwhentransactionsarebeingprocessedoutof thePensionBeePersonalPension.FraudrisksarethereforealsocloselylinkedtotheTransferOut Policy and the Banking Policy, which covers the risks of making inaccurate payments. Audit and Risk Committee Priorities for 2022 For2022,thekeyfocusesfortheAuditandRiskCommitteeareexpectedtoincludeoversightof theexternalinformationsecurityauditandtheISO27001re-certicationprocess,areviewofthe FinancialProspectsandProcedureswithconsiderationtotherecommendationsmadepostthe Company’s listing, anda review of the documentationand reports as required inanticipation of the Company’s expected transfer to the Premium Segment. Committee Evaluation During2021aninternalevaluationoftheBoardandCommitteeswascarriedout,thedetailsof which canbe foundon pages 69to 71of the NominationCommittee Reportwithin the Corporate GovernanceReport.TheCommitteeconductedaneffectivenessreviewaspartoftheevaluation processandwassatisedthattheCommitteecompositionisappropriate,thereisanadequate balance ofskills andexperience, andthe Non-Executive Directorsremained independent.The effectiveness review conrmed that the Committee is operating effectively. Michelle Cracknell CBE Chair of the Audit and Risk Committee 13 April 2022 79 Annual Report and Financial Statements 2021 ![]() 7 Directors’ Remuneration Report #### Annual Statement by the Chair of the Remuneration Committee 62The Directors’RemunerationReport thatfollowshasbeen preparedinaccordance withtheListing Rules,the Large andMedium-sized Companies andGroups (Accounts andReports) (Amendment) Regulations2013 and the Companies Act 2006. Dear Shareholder, IampleasedtopresentourrstDirectors’RemunerationReportfortheyearended31December 2021, which has been prepared by the Remuneration Committee and approved by the Board. The Directors’ Remuneration Report comprises three sections: • This statement,being myannual report onthe activities ofthe Remuneration Committeeduring the year. • TheDirectors’RemunerationPolicy(the‘Policy’)whichwillbesubjecttoabindingvoteatthe 2022 Annual General Meeting ('AGM'). • TheAnnual Reporton Remuneration,which explainshow theDirectors havebeen rewardedin theperiodfromIPOtoendofthenancialyearandwillbesubjecttoanadvisoryvoteatthe AGM. Roles and Responsibilities TheroleoftheRemunerationCommitteeissetoutinitstermsofreference,whichisavailableon the Company’s website.The duties of the RemunerationCommittee include, but arenot limited to the following: Duties of the Remuneration Committee Determining the Company’s framework and policy for executive remuneration SettingremunerationforallExecutiveDirectorsandreviewingremunerationforseniormanagement Reviewing workforceremuneration andrelatedpolicies andthe alignmentofincentives and rewards with culture Considering remuneration arrangements withrespectto theUK CorporateGovernanceCode requirements for clarity, simplicity, risk mitigation, predictability and proportionality Committee Members and Attendance Committee MembersPosition Eligible Meetings Attended Meetings Mary Francis CBEChair of the Committee33 Michelle Cracknell CBEIndependent Non-Executive Director33 Mark Wood CBEIndependent Non-Executive Chairman33 TheRemunerationCommitteemustcomprisenotlessthanthreeDirectors,allofwhomareNon- Executive Directorswhoare independent.The Chairofthe RemunerationCommittee mustnotbe theChairoftheCompany,andshouldhaveservedonaremunerationcommitteeforatleast12 months prior to being appointed. Mary Francis CBE,Michelle Cracknell CBEand Mark WoodCBE were membersof the Remuneration CommitteefromthetimeoftheCompany’slistingandasat31December2021.Furtherbiographical details aresetout onpages 60to62 ofthe Boardof Directors&Executive Managementsection of the Corporate Governance Report. #### Mary Francis CBE Chair,PensionBee RemunerationCommittee 62 PensionBee Group plc 80 ![]() Meetings are heldatleast twiceayearat appropriatetimesandotherwise asrequired.The CommitteemetthreetimesfromthetimeoftheIPOuntil31December2021,withallmeetings being held by video conference. TheCEO, COOand CCOandothermembersof theExecutive Managementteamattendedmeetings byinvitationtoprovidevaluableinput.However,nomemberofmanagementplaysanypartin determining his or her remuneration. AftereachmeetingtheChairoftheCommitteereportstotheBoardontheCommittee’sproceedings in respect of all matters within its duties and responsibilities. Context of Remuneration 2021 wasa pivotalyearforPensionBeeaswetransitionedfromprivatetolistedstatus.The RemunerationCommitteehasworkedhardtoensurethatwehaveremunerationarrangements thatunderpinour Company’sstrategyandpeopleneeds,whicharedetermined throughrigorous governance, and which are transparent to our shareholders and stakeholders. PensionBeehasachievedthisdevelopmentatthesametimeasnavigatingthechallengespresented by theCOVID-19pandemic. Iampleased tosay thattheCompany hasnot takenanyGovernment nancialassistanceduringthistimeandhascontinuedtosupportits employeesastheyadjustto new ways of working. As Remuneration Committee Chair,I am glad to talk withinvestors and their representatives at any time. Iamalso responsiblefor theBoard’s engagementwith employees,and theCommitteetakes careful accountof remunerationdevelopments acrossthe Companyas awhole. Furtherdetails on employeeengagementandhowwesupportouremployees’healthandwellbeingaresetouton pages 45 to 49 of the ESG Considerations section in the Strategic Report. Company Policy Review BeforetheIPO,weconductedathoroughreviewoftheremunerationpolicyacrosstheCompany asawhole.Thearrangementsinplaceprovidedaconservativeandsoundstartingpoint,with remunerationlevels inlinewith, orinsome casesbelow,equivalent marketlevels,and performance- linked elementsmainly in optionawards. TheCompany’s needto conserve cashfor investment and growthwas thusverymuch respected.Weconcluded thatthepolicy goingforwardshould beto ensurethatrewardsarefairwithrespecttobothmarketandinternalrelativities,sothatourCompany can continueto recruitand retainhigh qualityemployees. Thisled usto approveincreases inbase salariesfor2021atanumberoflevelsacrosstheCompany;tointroduceanannualperformance- basedbonusscheme inline withmarket practice;and toformalise annualgrantsof restrictedshares toincentiviselong-termperformance.Therstsuchgrants,withaperformanceunderpin,willbe madeduring2022.Intotal,performance-relatedremunerationforExecutiveDirectorsandtheir direct reportswill continueto begeared towardequity, whichwe considerto beappropriate fora Company that is investing for growth. TheCompany’sRemunerationPolicyisunderpinnedbyaphilosophythatdeliversontheCompany’s duty of fairness to its: • Customers - Remunerationshould maintainthe appropriate culturethat enablesthe Company todowhatisbestforitscustomers.Itisimportantthatremunerationisalwaysconsidered fairbytheCompany’scustomersandthatemployeesaremotivatedrstandforemostbythe Company’svisiontoliveinaworldwhereeveryonecanlookforwardtoahappyretirement. • Employees -Remunerationshouldrecognisethatthetimecommitmentandlevelof responsibilitytendtoincreasewithseniority,whichshouldbereectedintheremuneration structure. Pay should not encourage any undue risk taking. Directors’ Remuneration Policy Followingthereviewofremunerationacrossthebusiness,wereviewedthemorespecicapplication for ExecutiveDirectors which forms theDirectors’ Remuneration Policy(the ‘Policy'). We areseeking shareholders’approvalforourDirectors’RemunerationPolicyatthe2022AGM,forathree-year period.Wewillkeepoverallremunerationlevelsundercarefulreviewduringthistimewithinthe parametersofthePolicy,andwearecondentthatourapproachwillsupportthedeliveryofthe Company’s key objectives during its initial years as a public company. The Policy is set out in detail on pages 83 to 93 but the main features include: • Below-marketsalaries, xedfor 2021and2022,notingthatthebonusandrestricted shareawards are also set by reference to these salaries. • Pension alignment with the wider workforce. • Annual performance-related bonusof up to100% ofsalary, withat least75% of the bonusbeing deferred into shares. • Arestricted shareaward ofupto 125%ofsalary subjectto performanceunderpin,vesting over 3-5 years and with a post-vesting holding period until the fth anniversary of grant. • Shareholdingguidelinesof200%ofsalarywhichcontinuetoapplyinfullforaperiodoftwo years post the cessation of employment. • Comprehensive malus and clawback provisions. Annual Report and Financial Statements 2021 81 ![]() Performance-Related Bonus Reward for 2021 Theannualbonusplanincludesamixofnancialandnon-nancialperformancemeasures.Financial measuresaccountfor atleast 50%of totalpayout,together withpersonal, strategic,operational and risk control measures.Similar factors provide anunderpin to the annualawards under therestricted share plan. The Company is committed to delivering the best possible outcomes for our customers and theCommittee considers theCompany’s approachto risk managementand other ESGfactors whenassessingtheappropriatenessoftheout-turnbothintermsoftheassessmentofpersonal performanceandalsothegatewaystothebonusplan(andwillalsoconsiderthesefactorsunder the Restricted Share Plan underpin). As detailedon pages 24to 28 ofthe Operatingand Financial Reviewsection ofthe Strategic Report, theCompanydeliveredstrongtoplinegrowthacrossitscoreperformanceindicators,including AssetsunderAdministration(£2.6bn),Revenue(£12.8m)andInvestedCustomers(117,000). Simultaneously, through appropriate cost discipline and technologicalinvestments in productivity, theCompanydemonstratedincreasingoperatingleveragethroughtheimprovementofthe EBITDA margin, reafrming its expectation of protability bythe end of 2023. Overall, the Company metorexceeded theguidancegiventothemarketatthe timeoftheInitialPublicOffering('IPO'). Thesenancialoutcomeswereachievedagainstabackdropofstrongcustomersatisfactionrates, asdemonstratedbyPensionBee’sTrustpilotscore(Excellent),itsappratings(4.7onaverage)and its Net Promoter Score (63 based on internal measurement) 62 , as well as effective risk management. WhilethenumberofInvestedCustomersgrewby70%andinlinewiththeCompany’snancial guidanceprovidedatthetimeoftheIPO,thisoutturnwasmarginallyoutoflinewiththreshold internal forecasts, so that component of the bonus did not pay out. Overall, this led to a bonus out- turn for the Executive Directors at 75% of maximum. Havingconsideredallthesefactors,theCommitteeconrmedtheformulaicout-turnwithoutthe exercise of discretion. Implementing the Policy for FY2022 As setout inthe Prospectus, basesalary foreach of theExecutive Directorswill remain unchanged for 2022 (with a planned increase to £200,000 in 2023). Therstrestrictedshare awardundertheOmnibusPlanwasgrantedinMarch 2022followingthe announcement of the results. Theannualbonus structurewillremainbroadly unchanged,withacombination ofnancial performancemeasures accountingfor50% ofthe totalandincluding RevenueandAdjusted EBITDA Margin,togetherwithpersonalperformance(accountingfor25%ofthetotal)andaCustomer LoveCompositemetric(alsoaccountingfor25%ofthetotalandincludingtheequallyweighted subcomponentsofthe Company’sInvestedCustomers,Trustpilotscore,AppReviews,Complaints Ratio andNet PromoterScore). Thesemetrics are consideredto providea balanced scorecardof the Executive Directors’ responsibilities to key stakeholders. 62 PensionBee’s externally measured NPS is 75. Source: Boring Money, 2022. Advisors TheCommitteeappointedFITRemunerationConsultantsLLPastheirindependentadvisor duringthe yearfollowing acompetitivetender process.FIT advisedonall aspectsofour Directors’ RemunerationPolicyandpracticeandreviewedremunerationstructuresagainstcorporate governancerequirements. FITisa memberofthe RemunerationConsultants’Group andcomplies with itsCode ofConduct whichsets outguidelines toensure that itsadvice isindependent and free ofundueinuence.FITcarriesoutnootherworkforPensionBeeoritssubsidiaries.TheRemuneration Committee issatised that theadvice is objective andindependent taking into accountthat during the year FIT was paid time-based fees of approximately £59,000 plus VAT. Committee Evaluation During2021,aninternalevaluationoftheBoardandCommitteeswascarriedout,thedetailsof which canbe foundon pages 69to 71of the NominationCommittee Reportwithin the Corporate Governance Report. In early2022, the RemunerationCommittee undertookan assessment ofits owneffectiveness and was satised that it is operating effectively. Conclusion IamgratefultomyfellowDirectorsontheCommittee,MarkWoodCBEandMichelleCracknell CBE,for theirhardwork throughout2021,and tothewhole ExecutiveManagementteamand our professional advisors for their support and input. Welook forwardto engagingwithour shareholdersandother stakeholdersonan ongoingbasis. I would welcomeany feedback orcomments on theDirectors’ Remuneration Reportmore generally. IwillbeavailableattheAnnualGeneralMeetingtoansweranyquestionsabouttheworkofthe Remuneration Committee for the year. Mary Francis CBE Chair of the Remuneration Committee 13 April 2022 63 PensionBee’s externally measured NPS is 75. Source: Boring Money, 2022. PensionBee Group plc 82 ![]() #### Directors’ Remuneration Policy The Directors’ Remuneration Policy(the 'Policy') is submitted for approvalat the 2022 Annual General Meeting(‘AGM’), and subject to shareholder approvalwill take binding effect from theclose of that meeting. The Remuneration Committee intends that the new Policy will operate for three years. In drafting the Policy, the Committee was advised that each element of pay should include a cap. The included numbers are set to complywith this requirementand do notform an aspiration. The Policy wasreviewed and approvedby the RemunerationCommittee. As partof the processinput was collectedfrom management andour external advisors. Objectives of the Policy The proposed Directors’ Remuneration Policy, effective post shareholder approval from the date of the 2022 AGM, has been designed to meet the following objectives: ClaritySimplicityRisk • ThePolicyis designedtobesimpleand support long-term, sustainable performance. • ThePolicyisinlinewithstandardUKlisted companypracticeandiswellunderstoodby participants and shareholders alike. • ThePolicyclearlysetsoutthelimitsintermsof quantum,theperformance measureswhichcan be used and discretion which couldbe applied if appropriate. • Ourarrangementsincludeamarketstandard annual bonusand asingle long-term incentive plan. • Thedetailsof eachareclearly setoutin our Policy. • Therearenocomplexorarticial structures required to deliver the Policy. • Appropriate limits are set out in the Policy and within the respective plan rules. • The Committee retains discretions to override formulaic outturns. • When considering performancemeasures andtarget ranges, theCommittee willtake accountof the associated risks andliaise with the Audit and RiskCommittee as necessary. • Thelong-termnatureof alargeproportionofpay(throughsignicant annualbonusdeferral, post-vestingholdingperiodsandpost-cessationshareholdingrequirements)encouragesa long-term, sustainablemindset. Theuse of restrictedshares ratherthan moregeared forms of long-term incentives also mitigates the risk of undue focus on those targets. • Clawback and malus provisions are in place across all incentive plans. PredictabilityProportionalityAlignment to Culture • The Policycontains appropriate capsin place for each component of pay. • Thepotentialrewardoutcomesareeasily quantiableandaresetoutintheillustrations provided in the Policy. • Performancecanbereviewedatregular intervals toensuretherearenosurprisesinoutcomesat the end of theperformance period. • Incentiveoutcomesarecontingenton successfullymeetingstretchingperformance targets which arealigned to thedelivery of the Company’s strategy. • Performancewillbeassessedonabroad basis,includingacombinationofnancial andoperational metrics.The useof different measures ensures there is no unduefocus on a singlemetricwhichcouldbeatthedetriment of other stakeholders. • TheCommitteeretainsdiscretionstooverride formulaic outturns. • ThePolicyencourageshighperformancedeliverywhichisalignedtotheculturewithinthe business.However,thisperformancefocusisalwaysconsideredwithinanacceptablerisk prole. • Overallpaylevelsaremodestwithbasesalariesbelow-marketreectingthepre-protstate of the Company’s evolution. • The measures used in the variable incentive plans reect the KPIs of the business. Annual Report and Financial Statements 2021 83 ![]() Remuneration Policy for Executive Directors The following table summarises each element of the remuneration policy for the Executive Directors, explaining how each element operates and links to the corporate strategy. Base Salary Purpose • To recruit and retain high-calibre Executive Directors. • Recognise knowledge, skills and experience as well as reect the scope and size of the role. Operation • Normally reviewed annuallyin February (withany changes usually effectivefrom May). Anout of cycle reviewmay be conductedif the Committee determines it is appropriate. • When setting basesalaries, the Committeetakes into account anumber of factorsincluding (but not limitedto) skills andexperience of the individual,the size and scope of the role, salary increases across the Group as well as salary levels for comparable roles in other similarly sized companies. • Currentlysalarylevels areconsiderablybelowmarket levelsreectingthepre-prot stateofthe Company.TheCompanyset outintheProspectus aplanto increase the CEO and CTO's salaries to £200,000 from 2023 and then to review against benchmarksfrom 2024. This may lead to a higher level of increase than would normally be the case. Maximum Potential Value • The maximum salary level is £500,000. • Salary increases are normallyconsidered in relation tothe wider salary increases across theGroup, albeit recognisingthe unusually low startingposition in the current remuneration policy. • Above workforceincreases may benecessary incertain circumstancessuch as whenthere hasbeen a changein roleor responsibilityor where, aswas thecase at IPO, an Executive Director has been appointed on an initial salary which is lower than the desired market positioning. • The current base salaries for the Executive Directors are set out on page 92. Performance Metrics • Individual performance, as well as the performance of the Group, is taken into consideration as part of the annual review process. Pension Purpose • To provide cost-effective retirement benets. Operation • The Executive Directors may participate in the Company’s pension scheme or receive a cash allowance in lieu if HMRC caps apply. • Pension contributions and allowances are normally paid monthly and are not bonusable. Maximum Potential Value • TheCompanypensioncontributionstodenedcontributionretirementarrangementsorcashallowancesarecappedatthoseofthewiderworkforce(currently 5% of qualifying salary). • This applies to current and any future Executive Directors. Performance Metrics • Not applicable. PensionBee Group plc 84 ![]() Benets Purpose • To provide competitive, cost-effective benets which help to recruit and retain Executive Directors. Operation • Benets may include various insurances such as life, disability, medical and other benets provided more widely across the Group from time to time. • Other benets, such as relocation expenses or expatriate arrangements may be provided as necessary. • Reasonable business-related expenses (including any tax thereon) will be reimbursed. Maximum Potential Value • The value of benets will vary based on the cost to the Company of providing the benets. Performance Metrics • Not applicable. Annual Bonus Purpose • To incentivise and reward for the delivery of suitably stretching annual corporate targets to align with shareholders’ and wider stakeholders’ interests. Operation • The Annual Bonus is subject to performance measures and objectives set by the Committee for the nancial year. • AttheendoftheperformanceperiodtheCommitteeassessestheextenttowhichtheperformancetargetshavebeenachievedandapprovesthenal outcome. • Atleast75%ofanybonusearnedwillbedeferredinshares,normallyforatotalofthreeyears,withathirdvestingandbecomingexercisableintherst, second and third year respectively. • Dividend equivalents may apply to the extent such deferred awards vest. • Malus and clawback provisions apply as set out on page 88. • Bonus awards are non-pensionable and are payable at the Committee’s discretion. Maximum Potential Value • The annual bonus policy maximum is 100% of base salary. • The target annual bonus opportunity is normally set at 50% of the maximum. • The threshold annual bonus opportunity is up to 25% of the maximum. Performance Metrics • The Committee will determine the relevant measures and targets each year taking into account the key strategic objectives at that time. • Performance measures may include nancial, strategic, operational, ESG, and/or personal objectives. • At least 50% of the bonus will be linked to nancial measures. • TheCommitteesets targetsthatarechallenging,yetrealistic inthecontextofthe businessenvironmentatthetime andbyreferencetointernal business plansandexternalconsensus.Targetsaresettoensurethereisanappropriatelevelofambitionassociatedwithachievingthetopendoftherangebut without encouraging inappropriate risk taking. • The performance measures for FY22 are set out on page 92. Annual Report and Financial Statements 2021 85 ![]() Long-Term Incentives Purpose • To incentivise and reward for the delivery of long-term performance and shareholder value creation. • To align with shareholders’ interests and to foster a long-term mindset. Operation • Anannualawardofrestrictedsharesunderthe2021PensionBeeGroupPLCOmnibusPlanwhichnormallyvestafteraperiodofnotlessthanthreeyears (expectedtobeone-thirdoneachofthethird,fourthandfthanniversariesofgrantforExecutiveDirectors)subjecttocontinuedemploymentandthe achievement of a performance underpin. • Vested awards aresubject to a further holdingperiod applying at leastuntil the fth anniversaryof grant duringwhich they may notordinarily be sold(other than to pay relevant tax liabilities due). • Dividend equivalents may accrue over the period from grant until the later of vesting and the expiry of any holding period. • Malus and clawback provisions apply as set out on page 88. Maximum Potential Value • The maximum annual award is 125% of salary and the Committee expects to normally grant awards at this level to the Executive Directors. Performance Metrics • Thenatureofrestrictedsharesisthattheyarenotbasedprimarilyonperformanceconditions,althoughtheCommitteewillapplyanunderpinandmay reducevesting levelsif overallperformance isnot consideredto warrantthe fullvesting levelhaving regardto nancialperformance, thedevelopment ofthe strategy and the management of risk and other ESG factors. All-Employee Share Plans Purpose • To encourage wider share ownership across all employees, including the Executive Directors. • To align with shareholders’ interests and to foster a long-term mindset. • TheCompanydoesnotcurrentlyintendtodeploytheall-employeeshareplans.Disclosurearoundtheplanshasbeenincludedforfutureexibilityas required. Operation • Executive Directors may participate in all employee schemes on the same basis as other eligible employees. • This includes the Share Incentive Plan (‘SIP’) and the Save As You Earn (‘SAYE’) which have been adopted but are not currently in operation. • Bothplanshavestandardterms,whichareHMRCapprovedandallowparticipantstoeitherpurchaseorbegrantedshares(SIP)orenterintoasavings contract (SAYE) in a tax-efcient manner. Maximum Potential Value • Limits are in line with those set by HMRC (or at a lower level if so determined by the Remuneration Committee). Performance Metrics • Not applicable as per market standard. Shareholding Requirements Purpose • To align with shareholders’ interests and to foster a long-term mindset. Operation • Executive Directors will normally be expected to retain shares, net of sales to settle tax, until they have met the required shareholding. • Progress towards the guideline will be reviewed by the Committee on an annual basis. • In addition, Executive Directorsare expected to hold shares after cessation of employmentto the full value of the shareholding requirement(or the existing shareholding if lower at the time) for a period of two years. Maximum Potential Value • The shareholding requirement for Executive Directors is 200% of base salary. Performance Metrics • Not relevant. PensionBee Group plc 86 ![]() Fees Policy for Chairman and Non-Executive Directors (the ‘NEDs’) The following table summarises the fees policy for the Chairman and the NEDs. Fees Purpose • To provide a competitive fee to attract NEDs who have the requisite skills and experience to oversee the implementation of the Company’s strategy. Operation • Fees for the Chairman are set by the Committee (with the Chairman himself absent from such discussion). • Fees for the other NEDs are set by the Board excluding the NEDs. • Fees are reviewed, but not necessarily increased, annually. Fee increases are normally effective from May. • Fee levelsare determinedbased onan estimateof theexpected timecommitmentsof eachrole andby referenceto comparablefee levelsin othercompanies of a similar size and complexity. • Additionalfeesare payabletothe SeniorIndependentDirectorandChairsoftheAuditandRemunerationCommitteestoreect theiradditionalresponsibilities. The Employee Engagement Lead will also be eligible for an additional fee. • Higher fees may be paid to a NED should they be required to assume executive duties on a temporary basis. • TheNEDsandtheChairmanarenoteligibletoreceivebenetsorincentiveplans.Businessexpensesincurredinrespectoftheirduties(includinganytax thereon) are reimbursed. Maximum Potential Value • Determined within the overall aggregate annual limit of £1m. Performance Metrics • Not eligible to participate in any performance-related elements of remuneration. Pension Purpose • To provide cost-effective retirement benets. Operation • The NEDs may participate in the Company’s pension scheme given its central role in the activities of the Company. • Pension contributions and allowances are normally paid monthly. Maximum Potential Value • The Companypension contributionsto denedcontribution retirementarrangements orcash allowancesare cappedat that ofthe widerworkforce (currently 5% of qualifying fees). • This applies to current and any future NEDs. Performance Metrics • Not applicable. Annual Report and Financial Statements 2021 87 ![]() Discretions Retained by the Committee in Operating the Incentive Plans TheCommitteeadministerstheOmnibusPlaninlinewithitsrulesandinaccordancewithHMRC andListingruleswhererelevant.Toensuretheefcientoperationoftheseplans,theCommittee may apply certain discretions which include (but are not limited to) the following: • The participants in the plan. • The timing of grants and/or payments under the plan. • Thesizeofgrantsand/orpayments(albeitwithinthelimitssetoutinthepolicytableforExecutive Directors). • Any performance measures and targets for the incentive plans for each year. • Any use of discretion to amend the outcome, as appropriate. • Determining leaver status and the appropriate treatment under the incentive plan. • Determining the treatment of awards in the event of a change of control. • Determininganynecessarytechnicaladjustmentsincertaincircumstances(e.g.corporate restructuring events, variation of capital and special dividends). TheCommitteehasthediscretiontovarytheperformanceconditionsapplyingtooutstanding awardsinexceptionalcircumstancesifaneventoccurs(e.g.amaterialacquisitionordivestment) whichcausestheCommitteetobelievethattheoriginalconditionisnolongerappropriate.Any changein performanceconditions willnot bemateriallylesschallenging thanthe originalcondition would have been but for the event in question. Legacy Arrangements TheCommitteewillhonouranycommitmentsenteredintowithcurrentdirectorsprior tothe Company'sIPOortointernallypromotedfutureExecutiveDirectorspriortotheirappointmentto theBoard.Thisincludesanyoutstandingawardsunderhistoricshareoptionplans.Detailsofthe historic share option plans are available in the Company’s Prospectus on its website. Recoupment (Malus and Clawback) Malusandclawbackmaybeappliedatanytimebeforeanawardvests(orwouldhavevested but for the operationof any holdingperiod) orfor 3years aftervesting inthe following circumstances: • Material misstatement of the results of the Company. • Errors orinaccuracies or misleadinginformation leadingto incorrectgrant or vesting ofthe award. • Gross misconduct. • Material failure of risk management by the Company. • Corporate failure (e.g. administration or liquidation). • AnyothercircumstancewhichintheopinionoftheRemunerationCommitteecouldhavea signicantly adverse impact on the Company’s reputation. MaluspermitstheCompanytoreducetheamountofanyunvestedaward,includingawardsin holding periods. Clawback permits the Company to reduce the amount of anyvested award or any future salary or bonus and also require the employee to pay back amounts. Selection of Performance Measures and Targets TheRemunerationCommitteeselectstheperformancemeasuresapplyingtotheAnnualBonus basedon thestrategicprioritiesof theGroupatthe time.Themeasures andtheirweightingsmay change from year to year to reect the needs of the business. Measuresusedmayincludenancial(suchasRevenueandAdjustedEBITDAmargin),operational, strategic,ESG, personalor shareholdervalue creationoutcomes.The useof suchmeasuresisintended toensure performanceis assessedonaroundedbasis andis appropriatelyalignedtotheGroup’s KPIs. The targetsfor the AnnualBonus are setafter considering theannual businessplan, external analyst consensus, relevanteconomic indicators andany regulatory changes.The targetrange isset so that itisappropriatelychallenging,yetrealisticanddoesnotincentiviseunduerisktaking.Theannual bonus plan for FY22 is set out on page 92. TheRSP awardwillbe subjecttoaperformance underpin.TheRemuneration Committeewillassess whethervestingisappropriate,takingintoconsiderationtheCompany’scurrentshareprice,itsnancial performance overthe vesting periodand theparticipant’s adherenceto the Company’svalues and its standards onrisk and environmental, socialand governance considerations.On thebasis thatthe RSP awards are intended toprovide greater certainty of vestingin return for a lower quantum, the default will be for vestingto occur, unless the Remuneration Committeedecides otherwise. Statement of Consideration of Shareholder Views Priorto theCompany's IPO, theviews ofthe majorshareholderswereconsideredwhen determining the Policy. The Committee will consider shareholder feedback received in relation to the AGM each year and guidance from shareholder representative bodies more generally. IftheCommitteeconsidereditappropriatetomakematerialchangestothePolicy,itwouldbe subject to prior consultation with major shareholders as necessary. DifferencesinRemunerationPolicyforExecutiveDirectorsandEmployees in General All employees participate in the Annual Bonus scheme, which is operated on similar terms to those for the Executive Directors albeit withperformance measures which are appropriate to theirarea of responsibility.Bonus deferralofthe corporateachievementelementis operatedforallemployees. PensionBee Group plc 88 ![]() RSPawardsaregrantedtoapproximately28%oftheworkforceonsimilartermstothoseforthe ExecutiveDirectors.AllemployeesareabletoparticipateinPensionBee’sequityownershipschemes, which further helps to drive engagement and an ownership mentality. Statement ofConsideration ofEmployment ConditionsElsewhere inthe Group TheCommitteeiskeptinformedofpayandemploymentconditionsthroughouttheCompany. Thiswillincludeinformationonbasesalarybandingandincreases,annualbonusoutcomesand shareusageacrossthe workforce.TheCompany’sTalentteamconductsanannualbenchmarking exercisethatinformstheoverallremunerationpackageateachlevelofemployeeseniority.The annual benchmarkingexercisepays dueregardtojob rolesandseniority.The remuneration packagefor eachlevel ofemployee seniorityisdocumentedin theCompany’s RemunerationPolicy, which istransparently sharedwith all employees.The Company’sRemuneration Policy documents theCompany’sdesiretotakeanindustry-leadingapproachtoreducingandeliminatinggender andethnicitypaygaps,aswellasexcessivedifferencesinremunerationbetweenthehighestand lowest paid employees. Theinputfromthe directorresponsibleforemployeeengagementwillalsobeconsideredas part of the Committee’sdeliberations. Findings fromregular employee engagement surveyswill also be provided to the Committee. TheCommittee hasnot,todate,formally consultedwithemployeesonmatters oftheCompany’s Remuneration Policy. However, theChair of the Remuneration Committee held aTown Hall session tounderstandemployees’ attitudestobenetsinNovember2021and willholdfurtherTownHall sessions in due course, during whichthere will be the opportunity to discussremuneration matters as appropriate. Executive Directors’ External Appointments Executive Directors may acceptan external appointment asa Non-Executive Director with the prior approval of theBoard. Any feespayable for suchan appointment can beretained by theExecutive Director. Recruitment of Executive Directors - Approach to Remuneration The ongoingremuneration package forany new ExecutiveDirector willbe set inaccordance withthe termsofthePolicy inplaceatthetimeofappointment.Theprincipleswhich willbeappliedareset out as follows. Element of PayRecruitment Policy Base Salary • Setonappointmentatalevelwhichtakesintoaccounttheskillsand experience of the individual and the nature of the role. • The initial base salary may be set at a level below the desired market position toreectexperience.Thereafter,increasesmaybeabovethoseofthewider workforcetoalignthesalarywiththemarketlevelinaccordancewiththe individual’s development in the role. Benets • WillbeinlinewiththoseofferedtocurrentExecutiveDirectors.The Committeewill havethediscretionto paycertainrelocationexpenses as deemed necessary. Pension • Will be in line with the pension provision offered to the wider workforce. Annual Bonus • Willbe operatedinline withthe termsofthe Policytable.Any bonusfor the yearofappointmentwillbepro-ratedbasedonservicerendered.Itmaybe necessarytousealternativeperformancemeasures fortheremainderofthe initialperformanceperiod,dependingonthetimingandcircumstancesof the appointment. Restricted Share Plan • Anawardmaybemadeshortlyafterappointment,inlinewiththePolicy table. Buy-out Awards • Additionalawardsmaybeofferedintheformofcashand/orsharebased elementstocompensateanindividualforremunerationforfeitonleavingtheir previousemployment.Tobeclear,thevalueofanybuy-outarrangements willbelimitedtoanassessmentofthevalueforfeit.Thestructureofawards willnormallybedeliveredonalike-for-likebasiswherepossible,replicating theform,timehorizonsandanyperformancerequirementsattachedtothe awards forfeited. Legacy Arrangements • For an internal appointment, any existing pay or contractual arrangements agreed prior to the Executive Director being appointed to the Board may be allowed to continue on its original terms, adjusted as relevant to take into account the new appointment. Annual Report and Financial Statements 2021 89 ![]() Recruitment ofDirectors-Approach toRemunerationof Non-Executive Directors OnappointmentofanewChairmanoftheBoardorNon-ExecutiveDirector,thefeeswillbeset takingintoaccounttheexperienceandcalibreoftheindividualandtheprevailingratesofother Non-Executive Directors at the time. Service Contracts and Letters of Appointment EachExecutive Director’sservice agreementwill beterminablebyeither theCompany orthe Executive Directoron notlessthan 6months’ writtennotice. EachExecutive Directorwill continue to be eligibleto participate in theCompany’s discretionary year-end bonus plan andwill be eligible to participatein suchlong-term incentiveplans as the Companymay establish inthe future. AnyincentivesorremunerationpayabletotheExecutiveDirectorswillbesubjecttolimitation ormodicationtotheextentreasonably deemednecessary bythe RemunerationCommittee, includingtoremainconsistent withtheCompany’sshareholder-approvedremuneration policy from timeto time. EachExecutive Director is entitledto 25 days’ paidholiday per annum (excluding publicholidays).EachExecutiveDirectorisentitledtocontributionsbytheCompanyof5%of qualifying salary totheCompanypensionscheme. Thecontractsareavailableforinspection (alongside NED lettersof appointment) atthe Company’s registered ofce.The date of each service contract is noted in the table below: Date of Service Contract Romi Savova16 March 2021 Jonathan Lister Parsons16 March 2021 Theservicecontractofanynewappointmentisexpectedtobeconsistentwiththatofcurrent Executive Directors. TheNon-ExecutiveDirectorsdonothaveservicecontractswiththeCompanybutinsteadhave lettersofappointment.Thedateofappointmentandthemostrecentre-appointmentandthe length of service for each Non-Executive Director are shown in the table below: Date of Appointment Mark Wood CBE2 February 2021 Mary Francis CBE2 February 2021 Michelle Cracknell CBE2 February 2021 Eachappointment isfora xedtermendingon theCompany’sthird annualgeneralmeeting followingtheCompany’slisting,buteachIndependentNon-ExecutiveDirectormaybeinvitedby theCompanytoserveforafurtherperiod.Inanyevent,eachappointmentissubjecttoannual re-electionbytheCompanyateachannualgeneralmeeting,andeachNon-ExecutiveDirector’s appointment may be terminated at any time with three months’ written notice. Policy on Payment for Departure from Ofce TheCompanywillbeentitledtoterminateanExecutiveDirector’sserviceagreementwithimmediate effectbypaymentinlieuofnoticeequaltothebasicannualsalarytheExecutiveDirectorwould have beenentitled toreceive during thenotice period,payable in equalmonthly instalmentswhich arereduced iftheExecutive Directorsecuresalternative employment/engagementwithinthat period(theExecutiveiscontractuallyobligedto usehis/herbestendeavourstosecurealternative employment/ engagement). The Committee will take into account the contractual entitlements, rules of the incentive plans, the speciccircumstancesforthedepartureandtheinterestsofshareholderswhendeterminingthe termination treatment: Component of Pay Voluntary Resignation or Termination for Cause ‘Good Leaver’ (e.g. Death, Ill Health, Disability) Annual Bonus Leaving employment part way through the bonus year will normally result in no bonus being paid Leavingemploymentpartwaythrough bonus year oraftertheyearendbut priortothenormalbonus paymentdate willresult incash anddeferredbonus being paidon atime pro-ratedbasis for theportionoftheyearworked.Bonus outcomeswillcontinuetobebasedon the performance achieved. DSBP Awards Unvested DSBP awards will lapseAwards willnormally continueto vest ontheir originalvesting dateunlessthe Committeedeterminestheyshouldvest earlier. RSP Awards Unvested RSP awards will lapseRSPwillnormallyberetainedbythe individualfortheremainderofthe vestingperiodand remainsubjectto therelevantperformanceunderpin, withtheawardtimepro-rated.The Committeewillretaindiscretionto assesstheperformanceunderpin andallow awardstovestatan earlier dateifconsideredappropriate(andto disapply timepro-ratingifconsidered appropriate). Any outstanding SIP and/or SAYE awards will be treated in line with HMRC regulations. PensionBee Group plc 90 ![]() The Committeewill have the authorityto settle anylegal claims against theCompany, if considered tobeinthebestinterestsofshareholders.TheCommitteemayalsoreimburselegalcostsand provide a contribution towards outplacement support if felt appropriate. Ifthereisachangeofcontrolorsimilarevent,outstandingawardsmayvestearly(subjecttoany performance criteriaassessment) subjectto time pro-rating(unless the Committee believesit is not appropriate). Ontermination,at anytime, aNon-ExecutiveDirectorisentitled toany accruedbutunpaiddirector’s fees but not to any other remuneration. Illustration of Remuneration Policy ThechartsthatfollowssetsoutthepotentialvaluesoftheremunerationpackageforFY22under various performance scenarios for the Executive Directors. Notes: • Salary represents annual salary for 2022. Benets have been included based on 2021 gures. • Pension represents the value of the annual pension allowance for Executive Directors of 5% of salary. • Minimumperformancecomprisessalary, benetsandpensiononlywithno bonusawardedandnoRSP vesting (i.e. assumes the RSP performance underpin is not met). • Thresholdperformancecomprisesannualbonus payoutsatthresholdlevel(25%ofmaximum)with theRSP awards vested in full (no share price appreciation). • Targetperformancecomprisesannualbonuspayoutsattargetlevel(50%ofmaximum)andwiththeRSP awards vested in full (no share price appreciation). • Maximum performancecomprisesannualbonusawardedatmaximumlevel(100%ofmaximum)andwiththe RSP awards vested in full (no share price appreciation). • Maximum + share price growth comprises the above plus an assumedincrease of 50% in the value of the RSP award to take account of potential share price appreciation. Minimum 177 99% 800 700 600 500 400 300 200 100 0 (000's) Executive Director's Remuneration 1.2% Threshold 440 40% 0.5% On-target 483 36% 0.5% Maximum 571 31% 0.4% Maximum with growth 680 26% 0.3% 10% 50% 18% 45% 31% 38% 26% 48% PensionAnnual BonusBase salaryLong-term incentives Annual Report and Financial Statements 2021 91 ![]() #### Annual Report on Remuneration Implementation of Policy for FY22 Component of PayImplementation for FY22 Base Salaries As set out in the Prospectus at IPO, salaries unchanged: • CEO £175,000 • CTO £175,000 It remains the intention, as set out in the Prospectus, to increase these salaries to £200,000 in 2023 and then to review against market levels after that. Benets and Pension No changes to benets. Pension provision remains at 5% of qualifying salary. Annual Bonus Maximumbonus of100%of salarywithat least75%deferredinto shareswhichwill vestinequal instalmentsacrossthe rst,secondandthird anniversaryofgrant, whichis aligned to the treatment throughout the organisation. Inrespectof2021bonuses,theExecutiveDirectors’deferredbonuswillbedeferredforthreeyears.For2022onwards,itisexpectedtobereleasedinthreeequalannual tranches to align with colleagues generally. The performance measures are: • Financial measures, weighted at 50% and consisting of two sub-metrics each accounting for 25% of the total bonus: Revenue (£), Adjusted EBITDA Margin (%) • Customer composite metric,weighted at 25% andconsisting of ve sub-metricseach accounting for5% of the totalbonus: Invested Customers, Trustpilotscore, App store ratings, NPS and complaints ratio • Personal performance, weighted at 25% of the total bonus Consistent with market practice, the Committee considers the targets themselves to be condential and will disclose them in next year’s report. Restricted Share Plan Award A restricted share award of 125% of salary which vests in equal instalments on the third, fourth and fth anniversary of grant and released following the fth anniversary. The awardsare subject to aperformance underpin wherebythe RemunerationCommittee willassess whethervesting isappropriate, taking into considerationthe Company’s currentshareprice,itsnancialperformanceoverthevestingperiodandtheparticipant’sadherencetotheCompany’svaluesanditsstandardsonriskandenvironmental, socialandgovernance factors.On thebasis thatthe RSPawards areintendedtoprovidegreatercertaintyofvesting inreturn fora lowerquantum, thedefault willbeforvesting to occur, unless the Remuneration Committee decides otherwise. NED Fees Remain unchanged: • Chairman fee £125,000 • NED base fee £45,000 • Senior Independent Director fee £25,000 • Board Committee Chair fee £10,000 • Employee engagement lead fee £10,000 NEDs are eligible to participate in the Company’s automatic enrolment pension plan. PensionBee Group plc 92 ![]() Single Total Figure of Remuneration (Audited) The gures included in the table represent the remuneration in the period from Admission to 31 December 2021. Romi SavovaJonathan Lister ParsonsMark Wood CBEMary Francis CBEMichelle Cracknell CBE Fixed Pay Base Salary/Fees £116,667£116,758£83,333£60,000£36,667 Benets n/an/an/an/an/a Pension £1,468£1,468n/an/a£1,468 Variable Pay Annual Bonus £131,250£131,250n/an/an/a Long-Term Incentives £264,000£264,000n/an/an/a Total£513,384£513,476£83,333£60,000£38,134 Total Fixed Remuneration£382,135£382,226£83,333£60,000£38,134 Total Variable Remuneration£131,250£131,250n/an/an/a Notes to the Table Base Salary At IPO the annual base salaries for the CEO and CTO were set at £175,000 per annum. The table reects the pro rata base salary for the relevant period. Benets The Executive Directors did not receive benets from the Company, but are eligible to participate in company-wide schemes from time to time. Pension The Executive Directors received pension benets equivalent to 5% of qualifying earnings. Annual Report and Financial Statements 2021 93 ![]() Annual Bonus ThebonusforFY21wassubjecttoperformancemeasureswhichconsistedoftheequally weighted measures of: Revenue (25%), AdjustedEBITDA (25%), Invested Customers (25%), Personal performance (25%). ThepersonalperformanceisbasedonacompetencymatrixthatrewardseachExecutiveDirector fortheirachievementsoverthecourseoftheyearinlinewiththeiraccomplishmentsand embodimentoftheCompany’svaluesofLove,Quality,Honesty,InnovationandSimplicity.The competencymatrixreferstotheExecutiveDirector’sachievementswithrespecttofurtheringthe Company’s culture, the Company’sapproach to diversity and inclusion, theCompany’s operational performance,strategicinitiativesandriskmanagementcontrols,includingthetimelysubmission ofpoliciesandriskassessments,theminimisationandeffectiveresolutionofriskincidentsand adherence to budgetary cost controls. Inparticular,theCEO’spersonalobjectivesincludeddeliveringonthecontinuedgrowthofthe Companyinthecontextofexcellentcustomerservicewithaspecicrequirementtodeliverindustry- leadingresponsetimesto customers.Specic measurablegoalswere set,includingmaintaining the Cost Per Invested Customer within the budgetary objectives (£246 outcome), excellentApp review scores(4.7 averagescore), excellentTrustpilot reviews(score of4.6/4.7 throughouttheyear)andthe percentage of employees recommending the Company as a place to work (92%). Inparticular,theCTO’spersonal objectivesincludedleadershipinproductinnovation,development of an industry leadingtechnology platform with increased velocity andquality, and the development ofmechanismstoanalyserealtimemarketingdataandcustomerexperience,eachofwhichwere fullymet. Hewasalso subjecttoa numberofsimilar measurabletargetsto thoseforthe CEOabove includingtheAppreviewscoresand alsoinformationsecuritycerticationoutcomes underISO27001. The table below summarises the performance outcomes: ThresholdTargetMaxActualOutturn Revenue£11.3m£11.7m£12.2m£12.8m100% Adjusted EBITDA£(18.6)m£(18.2)m£(17.8)m£(16.4)m100% Invested Customers126k127k128k117k0% Personal Performance25%50%100%100%100% TheCommitteeconsideredthattheoverallperformanceandtheexperienceofstakeholderswas appropriatelyreectedintheoverallbonusoutcomeandthereforenodiscretionwasrequiredto amend the result. For FY21,100% ofany bonuslinked to Company-wideperformance and40% of anybonus linked to individual performanceis deferred,resulting in90% deferralfor ExecutiveDirectors. Forthis yearthe deferred bonus vests on the third anniversary of grant. Consistentwiththeapproachadoptedforallequityawards,participantsarerequiredtobearany employers’NICs onthoseawards whichmeansthat theheadlinelevel ofdeferredbonus and RSPawardsoverstatestheircommercialvaluebyapproximately14%comparedwithotherlisted companieswherethecompanyitselfbearsthischarge.Thisreectsthepre-protstatusofthe Company and this will be kept under review for subsequent grants. Cash Bonus (£)Deferred Bonus (£)Total Bonus (£) Total Bonus (% Max) CEO£17,500£113,750£131,25075% CTO£17,500£113,750£131,25075% Awards Vesting in the Year PriortotheIPO,boththeExecutive Directorsreceivedshareawardswhichweresubjectto performanceconditionsthatweremetontheIPO.Whilethesewillonlyvestandbecomeexercisable overtime,theregulationsrequirethesetobeincludedintheyearanyperformanceconditionis met, sothereported £264,000reects theaggregateof 160,000shares multipliedbythe IPOprice of 165p. Awards Granted in the Year Therewere noshare awardsmadetoExecutive DirectorsfromAdmissiontothe endofthe nancial year. PensionBee Group plc 94 ![]() Other Statutory Requirements 63 Shares Interests and Incentives Shares Owned Outright Awards Unvested and Subject to Performance Conditions Options Unvested and Not Subject to Performance Conditions Options Vested and Not Subject to Performance Conditions Shareholding Requirement Met Romi Savova80,000,0000120,00040,000Yes Jonathan Lister Parsons13,232,8000120,00040,000Yes Mark Wood CBE2,827,200000n/a Mary Francis CBE31,200000n/a Michelle Cracknell CBE0000n/a Our middle market share price at the close of business on 31 December 2021 was 133.7p and the range of the middle market price during the year since IPO was 127.2p to 185p. Since the year-end there have been no other changes in the shareholdings. 63 All numbers are unaudited unless otherwise stated. 115 110 105 100 95 90 85 80 75 Total Shareholder's Return\* TSR - Value of a 100 unit investment made at Admission 23 Apr 2021 31 Dec 2021 FTSE All Share Index PensionBee Change in CEO Total Remuneration The chart belowshows the value of£100 invested in the Company onAdmission at the IPO price, comparedwith the value of £100 investedin the FTSE All Share Indexat the same date and themovement in value until 31 December 2021. We have chosen the FTSE All Share Index as it provides the most appropriate and widely recognised index for benchmarking the Company’s corporate performance since IPO. \*Source: Datastream (a Renitiv product) Annual Report and Financial Statements 2021 95 ![]() CEO Single Figure HistoryFY21, for the period since Admission Total Remuneration 64 £513,384 Annual Bonus as % of Max75% Long-term Incentive Shares Vesting as % of Max100% CEO Pay Ratio 65 ThetablebelowshowsthemultipleofourCEO’spayratiotomedian,lowerquartileandupper quartilepayattheCompanyintheUK.ThecalculationsarebasedonmethodologyOptionAas denedby theregulationsand calculatingthepay andbenetsofall UKemployeeson afull-time equivalentbasis.TheCEOpayratioisbasedoncomparingtheCEO'spaytothatofPensionBee's UK-basedemployeepopulation.FortheCEOtheFY21gureisbasedonthesingleguretotalof £513,384. Methodology25th Percentile50th Percentile75th Percentile Option A18:19:17:1 Total Pay£27,925£57,376£75,771 Salary Component£17,017£20,108£24,091 The Committee will continue to monitor trends in the CEO pay ratio over the longer term. Relative Importance of Spend on Pay Sincethe Companyonly listedinApril2021,there isno comparableyear-on-yearchange todisclose. Full disclosure will be presented in the Annual Report on Remuneration for FY22. 2021 Total Employee Costs (Note 5 of the Financial Statements)£7.4m Distributions to Shareholders£0 64ThetableSingleTotalFigureofRemunerationoutlines detailedcomponents of theCEO’s TotalRemuneration 65 All numbers are unaudited unless otherwise stated. Percentage Change in Director Pay Sincethe Companyonly listedinApril2021,there isno comparableyear-on-yearchange todisclose. Full disclosure will be presented in the Annual Report on Remuneration for FY22. Payments for Loss of Ofce and/or Payments to Former Directors Nopayments forloss ofofce,norpaymentsto formerDirectors weremadeduringtheyear underreview. This report was approved by the Board of Directors and signed on its behalf by: Mary Francis CBE Chair of the Remuneration Committee 13 April 2022 PensionBee Group plc 96 ![]() 8 Directors’ Report The Directorspresent theirannual reporton theaffairs of theGroup, togetherwith theconsolidated nancial statements and Auditor’s report for the nancial year ended 31 December 2021. Additional Disclosures InformationrequiredtobeincludedwithintheDirectors’Reporteitherbystatute,byListingRule 9.8.4Ror bythe DTRs,can befound eitherin thissection orelsewhere inthis document,as indicated inthetablebelow.Allinformationlocatedelsewhereinthisdocumentisincorporatedintothis Directors’ Report by reference: DisclosureLocation Future Business Developments Our Strategy, pages 16-18 Research and Development Note 2 of the Financial Statements, pages 116-121 Financial Instruments Note 22 of the Financial Statements, pages 129-131 Financial Risk Management Objectives and Policies Note 22 of the Financial Statements, pages 129-131 Exposure toPrice, Credit and LiquidityRisk Managing our Risks, pages 52-55 Note 22 of the Financial Statements, page 129-131 Environmental Impact Stakeholders, pages 32-40 ESG Considerations, pages 42-51 People, Values and Culture and Employee Engagement About Us, page 9-15 Stakeholders, pages 32-40 ESG Considerations, pages 42-51 Section 172 Statement Stakeholders, pages 32-40 Stakeholder Engagement Stakeholders, pages 32-40 ESG Considerations, pages 42-51 Statement of Directors’ Responsibility Statement of Directors’ Responsibility, page 104 Directors’ Interests Directors’ Remuneration Report, pages 80-96 Details of Long-Term Incentive Schemes Directors’ Remuneration Report, pages 80-96 Principal Activity PensionBeeisaleadingonlinepensionproviderintheUK,adirect-to-consumernancialtechnology companywithamissiontomakepensionssimple,sothateveryonecanlookforwardtoahappy retirement. The Company is registered as a public limited company under the Companies Act 2006 and is listed on the Main Market of the London Stock Exchange. Review of Business A reviewof theGroup’s results andactivities iscovered on pages4 to56 within theStrategic Report. This includesthe Chairman’sStatement andthe ChiefExecutive Ofcer’sReview, whichinclude an indication of likely future developments. Key Performance Indicators Keyperformanceindicators inrelationtotheGroup’s activitiesarecontinuallyreviewedby Executive Management and are presented on pages 31 to 32 of the Strategic Report. Results and Dividends TheresultsfortheyeararesetoutintheconsolidatedIncomeStatementonpage112oftheFinancial Statements. The Directorsare not proposing anal dividend for the year ended31 December 2021. Corporate Governance Duringtheyearto31December2021,sincetheCompany’slistingontheMainMarketofthe LondonStockExchangeinApril 2021,wehaveapplied theprinciplescontainedin theUKCorporate Governance Code 2018 (the ‘Code’), a copy of which can be found at www.frc.org.uk. TheCorporateGovernanceStatementissetoutonpages63to68oftheCorporateGovernance Report.The informationinthatsectionincorporated intothisDirectors'Reportby referenceis deemedtoformpartofthisreportandsofullstherequirementsoftheCorporateGovernance Statement for the purposes of DTR 7.2.1. We have setout in the CorporateGovernance Statement how wehave applied thePrinciples of the Code and have included cross references throughout it as towhere further supporting information may becontained. TheBoard and the Committeesbelieve that they haveupheld the Codethrough theirworkandareabletoreportnoinstancesofnon-complianceagainstthe Codefrom the Company’s listing to 31 December 2021. Annual Report and Financial Statements 2021 97 ![]() Directors In OfcePosition Mark Wood CBEIndependent Non-Executive Chairman Mary Francis CBESenior Independent Director Michelle Cracknell CBEIndependent Non-Executive Director Romi SavovaChief Executive Ofcer Jonathan Lister ParsonsChief Technology Ofcer ThebiographiesoftheDirectorswhowereinofceposttheCompany’slistingandasat31December 2021aresetoutonpagespages60to62oftheBoardofDirectorsandExecutiveManagement section of the the Corporate Governance Report. Directors’ Powers Thepowersof theDirectorsaresetoutintheArticles ofAssociationandtheCompaniesAct2006 (the‘Act’)and aresubject toany directionsgiven byspecial resolution.The Directorsare responsible forthemanagementoftheCompany’s business,for whichpurpose theymayexerciseall thepowers ofthe Companywhetherrelating tothe managementofthe businessornot. TheDirectorsmay also, subject to the Articles, delegate any of their powers, authorities and discretions as they see t. TheArticles givethe Directorspowertoappointand replaceDirectors. Unlessotherwisedetermined bytheCompanybyordinaryresolution,thenumberofdirectors(otherthanalternatedirectors) must not be less than two and must not be more than thirteen. Appointment and Replacement of Directors TherulesgoverningtheappointmentandreplacementofDirectorsaresetoutintheCompany’s Articles and are governedby the Code, the Actand related legislation. Directors maybe appointed by ordinaryresolution ata general meeting,by adecision ofthe Directorsor by thesole Directorif the Company has only one Director. AttheCompany’srstAnnualGeneralMeeting,alltheDirectorswhohaveheldofcesincethe Company’s IPO will offer themselves for appointment by the members to the Company’s Board. Articles of Association TheArticlesmaybeamendedbyaspecialresolutionoftheCompany’sshareholders.Theywere last reviewedand updated atthe time of theCompany’s IPO in April2021. As well assetting out the rulesgoverningtheappointmentandreplacementofDirectors,theArticlesalsosetout,amongst other matters, the Directors’ general authority, rules on decision-making by the Directors, as well as in full the powers of the Directors in relation to issuingshares and buying back the Company’s own shares. A copy of the Company’s Articles can be found on the Company’s website. Directors’ Interests Directors’ interestsin theOrdinary sharesof PensionBeeGroup plc asat 31December 2021are set out on page 92 of the Directors’ Remuneration Report within the Corporate Governance Report. Duringtheperiodcoveredbythisreport,noDirectorhadanymaterialinterestinacontractto which theCompany or anyof itssubsidiary undertakings wasa party(other than theirown service contract) that requires disclosure under the requirements of the Companies Act 2006. Directors’ Insurance and Indemnities The Company’s Articles provide, subjectto theprovisions of UKlegislation, anindemnity for Directorsand OfcersoftheCompany andtheGroupin respectofliabilitiesthey mayincurinthe discharge of their duties or in the exercise of their powers. Directors’andOfcers’liabilityinsurancecoverismaintainedbytheCompanyandisinplacein respect ofall theCompany’s Directorsat thedate ofthis AnnualReport. TheCompany willreview its level of cover on an annual basis. Compensation for Loss of Ofce The Companydoes not haveany agreementswith any ExecutiveDirector or employeethat would providecompensation forloss ofofce oremployment resultingfrom atakeover exceptthat provisionsoftheCompany’shistoricEMIOptionSchemeandNontax-qualifyingOptionScheme may cause options and awards outstanding under such schemes to vest on a takeover. RSPawardswillvest subjectto themeasurementoftheunderpin atthe timeof theeventand,unless the Remuneration Committee determines otherwise, time pro-rated DSBP awards will vest in full. Further informationis providedon page92 ofthe Directors’Remuneration Reportwithin the Corporate Governance Report. PensionBee Group plc 98 ![]() Share Capital Details of the Company’sauthorised and issued share capital, together withmovements during the year,aresetoutinNote15oftheFinancialStatements.Asat31December2021,theCompany’s issuedshare capitalconsistedof 221,564,716Ordinaryshareswith anominalvalueof £0.001each. Sincethe nancialperiod endthe Company’sissuedshare capitalhas increasedto 221,646,089 due totheexerciseofvestedoptionsgrantedunderthehistoricpre-IPOEMIOptionSchemeandNon tax-qualifying Option Scheme. TheCompanyhasoneclassofOrdinaryShare.Therearenospecicrestrictionsonthesizeofthe holdingnoronthetransferofshares,whicharebothgovernedbythegeneralprovisionsofthe Articles and prevailing legislation. Lock-Up Arrangements As part of the Company’s IPO, lock-up arrangements were put in place in respect of the Company’s shares held by the pre-IPO investors. Specically, they included: • Theshareholdings 66 of theExecutiveDirectors atthetime ofadmissionwere,and remain,subject to lock-up arrangements expiring on 26 April 2023. • Theshareholdings 67 ofalltheExecutiveManagementteam,theIndependentNon-Executive Directorsand pre-IPOshareholders 67 owning morethan3%ofthe Company’sissuedshare capital atthetime ofadmission were,and remain,subject tolock-up arrangementsexpiring90 daysfollowingthedateofpublicationoftheCompany’stradingupdateforthethree-month periodending30September2022.ThisQ3tradingupdateisexpectedtobepublishedonor around 20 October 2022, meaning an expiry date of 20 January 2023. • Theshareholdings 67 ofallotherpre-IPOshareholdersowninglessthan3%oftheCompany’s issuedsharecapitalatthetimeofadmissionandallotherpre-IPOoptionholders,were,and remain, subjectto lock-up arrangementsending 90 daysfollowing the dateof publication ofthe Company’stradingupdateannouncementforthethree-monthperiodending31March2022. ThisQ1tradingupdateisexpectedtobepublishedonoraround21April2022,meaningan expiry date of 21 July 2022. Furtherdetailsofthelock-uparrangementsaresetoutintheCompany’sProspectus,acopyof whichisavailableontheCompany’swebsiteathttps://www.pensionbee.com/investor-relations/ ipo-centre. 66 Includesthe shareholding atthe point ofthe admission tothe High GrowthSegment, together withany shares receivedsubsequentlyforthedurationoftherelevantlock-upperiodasaresultoftheexerciseofanyoptions granted pre-IPO. 67 IncludesState StreetGlobal Advisors,Inc, together withMr. JosephSuddaby’s aggregateholding ofshares held directly by him and indirectly through his self-invested personal pension. Ordinaryshareholdersareentitledtoreceivenoticeof,andtoattendandspeakat,anygeneral meeting ofthe Company.On ashow ofhands everyshareholder presentin personor byproxy (or beingacorporationrepresentedbyadulyauthorisedrepresentative)shallhaveonevote,andon apolleveryshareholderwhoispresentinpersonorbyproxyshallhaveonevoteforeveryshare ofwhichhe istheholder.TheNoticeof AnnualGeneralMeetingspeciesdeadlinesfor exercising voting rights and appointing a proxy or proxies. Authority to Purchase Its Own Shares TheCompanyis permittedpursuanttothetermsof itsArticlestopurchaseitsownshares subject to shareholderapproval. TheCompany was grantedauthority ata general meetingof theCompany in April2021, ahead of itslisting, to makepurchases of up to10% of itsshare capital. No shareswere purchased underthis authorityin theyear from listingto 31December 2021and up tothe dateof this report. Signicant Interests TheinterestsinsharesnotiedtotheCompanyinaccordancewiththeDisclosureGuidanceand Transparency Rules as at31 December 2021 are set outbelow. Name of shareholder Number of Ordinary Shares of £0.001 each Held Percentage of Total Shares Outstanding/ Total Voting Rights Romina Savova80,000,00036.11% Jonathan Lister Parsons13,232,8005.97% State Street Global Advisors, Inc.8,757,6003.95% Between31December2021and13April2021(thelatestpracticabledateforinclusioninthis report), therewere no changesto the interestsabove. During thistimeframe, Norges Banknotied the Companyof its interest,being 7,457,930 OrdinaryShares, representingapproximately 3.37% of the current Total Shares Outstanding/Total Voting Rights. Romi Savova andJonathan Lister Parsons are deemedto be acting in concert,together with certain othershareholderswhorepresent,inaggregate,approximately1,022,600sharesor0.5%ofthe Company’s Total Shares Outstanding/Total Voting Rights. Annual Report and Financial Statements 2021 99 ![]() Capital Management PensionBee Limited, a subsidiary of PensionBee Group plc, is a FCA regulated business and subject toholdingaLiquidCapitalrequirementunderIPRU(INV)5.9.AsofDecember2021,thecapital resourcesstoodat£31.7m(unaudited)ascomparedtoacapitalresourcerequirementof£0.9m (unaudited), resulting in a coverage of 33.7x. Research and Development The Company’s research and development is contained in Note 2 of the Financial Statements. Political and Charitable Contributions Duringthenancialyearending31December2021,theCompanydidnotmakeanycharitable donations, nor any political contributions. Change of Control - Signicant Agreements Thereareanumber ofagreements thatmaytake effectafter,or terminateupon,a changeof control of theCompany, such ascommercial contracts and propertylease arrangements. None ofthese are considered to be signicant in terms of their likely impact on the business as a whole. Diversity and Inclusion TheDirectors believethatthe make-upofPensionBee’s employeesshouldreect thediversityof the Company’s customer base. The Company iscommitted to promoting diversity and inclusionacross thebusiness,throughmeasuressuchasformaltraining,anonymisedhiringandpromotioncycles andinclusionintheCompany’sperformancematrices,butalsoinformallythroughits‘diversity champions’, external and internal speaker events and a host of other initiatives. TheCompany haspublicly committedto publictargets forgenderandrace andis working towardsbecominga‘DisabilityCondent’employer.TheCompanyhaspublisheditsDiversity, InclusionandEqualityPolicywithpublictargets,andcontinuallymeasuresitsprogressagainst these objectives. Further detail is setout on pages 32 to40 of the Stakeholders sectionand on pages 42 to51 of the ESG Considerations section of the Strategic Report. Employee Engagement The Directorsplace greatimportance and valueon employeeengagement. TheBoard hasengaged withthewiderworkforce duringtheyear viaexisting channelsandinitiatives thatarein placeacross the Company to ensure thatemployees are listened to and wellrepresented. Mary Francis CBE, the Senior Independent Directorwith responsibility for employee engagement,hosted the Company’s 2021employeeengagementevent,facilitatingdiscussiononthemessuggestedbyandvotedfor by employees. TheBoardiskeptapprisedofemployeemattersandengagementthroughregularupdates provided by the SID,the CEO and other members ofthe Executive Management teamat Board and Committee meetings. Further information relatingto how we engage withour employees is setout on pages 32 to40 of the Stakeholders section of the Strategic Report. Engagement with Other Stakeholders DetailsofhowtheCompanyengageswithitskeystakeholders,includingitsshareholders,areset on pages32 to 40of the Stakeholderssection ofthe Strategic Reportand on pages63 to68 of the Corporate Governance Statement within the Corporate Governance Report. Streamlined Energy & Carbon Reporting Thesection belowincludesourrstyear ofreportingunderthenew StreamlinedEnergyand CarbonReporting(‘SECR’)requirements.ThereportingperiodisthesameastheGroup’snancial year, 1 January2021 to 31 December 2021.The Group was listedon the Stock Exchangefrom April 2021 and therefore qualies for SECR as a quoted company. Organisation Boundary and Scope of Emissions We have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report andDirectors’ Reports) Regulations2018. Thesesources fall withinthe Group’s consolidated nancial statements. An operationalcontrol approachhas beenused inorder todene ourorganisational boundary.This is the basis for determining the Scope 1 and Scope 2 emissions for which the Group is responsible. PensionBee Group plc 100 ![]() Methodology For theGroup’s SECRreporting, theGroup has employedthe servicesof aspecialist advisor,Verco, to quantifyand calculate theGreenhouse Gas(‘GHG’) emissionsand energy useassociated withthe Group’s operations. The totalenergy useis thetotal electricity consumptionfor the reportingyear. Electricity wasthe only emissionssource reportedfortheGroup’s SECR.The totalelectricityconsumption hasbeencalculated from the monthly metrereadings and consumptions in kWh providedby Great PortlandEstates. The following methodology was applied by Verco in the preparation and presentation of this data: • TheGreenhouseGasProtocolpublishedbytheWorldBusinessCouncilforSustainable Development and the World Resources Institute (the ‘WBCSD/WRI GHG Protocol’). • Application of appropriate emission factors to the Group’s activities to calculate GHG emissions. • Scope2reportingmethods-applicationoflocation-basedandmarket-basedemissionfactors for electricity supplies. • Inclusion of all the applicable Kyoto gases, expressed in carbon dioxide equivalents, or CO2e. • Presentation of gross emissions as the Group does not purchase carbon credits (or equivalents). • Wheredatawasmissingorovertheperiodrequired,valueswereestimatedusinganextrapolation of available data. Absolute Emissions ThetotalScope 1and 2GHG emissionsfrom theGroup’soperationsintheyearending31December 2021 were: • 8.4tonnes ofCO2equivalent (tCO2e)usinga‘location-based’ emissionfactormethodology for Scope 2 emissions; and • 0.0tonnesofCO2equivalent(tCO2e)usinga‘market-based’emissionfactormethodologyfor Scope 2 emissions. Scope1 -TheGroupdoesnotuseanyonsitecombustionofnaturalgas,fuels,fuelsusedineet/ company-owned vehicles and refrigerant gas losses. Therefore, emissions are reported as zero. Scope 2 - Emissionsfrom purchasedelectricity usingthe location-basedand market-basedmethod. Intensity Ratio As well asreporting the absolute emissions, theGroup's GHG emissionsare reported below in tonnes of CO2 equivalent per£m revenue. This was decided asthe most appropriate metricfor the Group. The intensity ratio has been calculated as follows: • 0.003 tCO2e per £m revenue using the location-based method. • 0.0 tCO2e per £m revenue using the market-based method. Target and Baselines The Group'sobjective is tomaintain or reduce itsGHG emissions per £mrevenue each year andwill report each year whether it has been successful in this regard. Key Figures GHG emissions 2021 Tonnes CO2etCO2e/£m Revenue 4 Scope 1 1 -- Scope 2 2 8.40.64 Scope 3 3 -- Total GHG emissions (Location-based)8.40.64 Total GHG emissions (Market-based)-- PensionBee Group plc - Breakdown of Emissions by Scope 0.0 2021 (market-based) 2021 (location-based) 0%20%40%60%80%100% 8.4 1 Scope 1 being emissions from the Group’s combustion of fuel and operation of facilities. 2 Scope 2 being electricity(from location-based calculations), heat, steam and coolingpurchased for the Group’s own use. 3Scope 2beingelectricity (frommarket-basedcalculations), heat,steamandcooling purchasedforthe Group’s own use. 4 Intensity Ratio: Revenue £13m (FY2021). Scope 1 Scope 2 Annual Report and Financial Statements 2021 101 0.0 0.0 ![]() Total Energy Use The total energy use for the Group for FY2021 was 39,361 kWh. Energy Efciency Actions TheGroup movedout ofits premiseson7 January2022. Thepremises aretobedemolished in2022. Due to this, there was no business case for energy efciency measures in 2021. The Group movedto its newpremises in Blackfriarson 14 February2022. The newpremises has the following in place: • Thebuildinguses100%REGOsustainablegreenelectricityanditsenergyintensityismuch lowerthanrelevantindustrybenchmarkssuchastheBetterBuildingPartnership’sRealEstate Environment Benchmarks (REEB). • The propertymanagementteam isPlanet Markcertied, meaningtheycommitto reducingtheir carbon emissions every year. The buildinghasa numberof privaterooms tobe usedforvirtual meetingsallowing theGroup to continue its hybrid working policy and limit the need for business travel. Internal Control and Risk Management TheBoardisultimatelyresponsibleforestablishingtheriskappetiteandtheriskmanagement frameworkatPensionBee.TheAuditandRiskCommitteeisresponsibleformonitoringand reviewing the effectiveness of the Group’s internal control and risk management systems. The Group’ssystems ofinternal control andrisk managementare designedto identify,evaluate and managerisks.Throughmonitoringtheeffectivenessofitsinternalcontrolsandriskmanagement, theCommitteeisabletomaintainagoodunderstandingofprincipalrisks,keyemergingareasof riskandtheExecutiveTeam’sdecisionmakingprocess.In2021,theSeniorLegalCounselcarried outageneralreviewoftheCompany’sRiskManagementPolicyandframeworkandheengages regularly with the Audit and Risk Committee. Furtherdetail issetout onpages52to 55ofthe ManagingOurRiskssection oftheStrategic Report andonpages74to79oftheAuditandRiskCommitteeReportwithintheCorporateGovernance Report. Market Abuse Regulation The Companyhas in placeits own internal dealingpolicies which apply toall employees and which encompass the requirements of the Market Abuse Regime. Going Concern and Viability Statement The ConsolidatedFinancial Statementshave beenprepared on a goingconcern basis. After making enquiriesandconsideringtheGroup’snancialposition,itsbusinessmodel,strategy,nancial forecastsand regulatorycapital togetherwith itsprincipal risksand uncertainties,the Directorshave a reasonableexpectation that theGroup will beable to continuein operation andmeet its liabilities as they falldue for at least 12months from the date ofsigning this report. The goingconcern basis of preparation is discussed within Note 22 of the Financial Statements. In accordancewith provision 31of the UKCorporate GovernanceCode, the Directorshave assessed the prospectsof theGroup overa longerperiod thanthe 12months requiredby thegoing concern provision. Details of the assessment can be found on page 56. Post Balance Sheet Events OtherthanasdisclosedintheStrategicReport,therehavebeennomaterialpostbalancesheet eventsinvolvingtheCompanyoranyoftheCompany’ssubsidiariesasatthedateofthisreport. DetailsofsignicanteventssincethereportingdatearecontainedinNote24oftheFinancial Statements. Disclosure of Information to Auditor Each of the Directors at the date of the approval of this Annual Report conrms that: • So faras theDirectoris aware,thereis norelevantaudit informationofwhich theCompany’s auditor is unaware; and • The Directorhas takenall thereasonablesteps thattheyought tohavetaken asa Directorto makethemselfawareofanyrelevantauditinformationandtoestablishthattheCompany’s auditor is aware of the information. Theconrmationisgivenandshouldbeinterpretedinaccordancewiththeprovisionsofsection 418 of the Companies Act 2006. Auditor Deloitte LLP hasindicated their willingness to continuein ofce and resolutions toreappoint them as auditor and toauthorise the Audit and RiskCommittee to determine the auditor’sremuneration will be proposed at the forthcoming Annual General Meeting to be held on 18 May 2022. PensionBee Group plc 102 ![]() Annual General Meeting TheCompany’sAnnualGeneralMeetingwillbeheldon18May2022andwillbe heldasahybrid meetingasdetailedonpage68oftheCorporateGovernanceStatement.TheNoticeoftheAGM willbedistributedtoShareholdersand madeavailableonthe Company’swebsite,andwhere appropriate, by an announcement via aRegulatory Information Service, if any changesare required to be made to the AGM arrangements. Approved by the Board on 13 April 2022 and signed on its behalf by: Romi Savova Chief Executive Ofcer 13 April 2022 103 Annual Report and Financial Statements 2021 ![]() 9 StatementofDirectors’Responsibilities Underapplicablelawandregulations,theDirectorsarealsoresponsibleforpreparingaStrategic Report,Directors’Report,Directors’RemunerationReportandCorporateGovernancereportthat complieswiththat lawand thoseregulations.TheDirectorsare responsiblefor themaintenance and integrity ofthe corporateand nancial information includedon the Company’s website.Legislation intheUKgoverningthepreparationanddisseminationofFinancialStatementsmaydifferfrom legislation in other jurisdictions. We conrm that to the best of our knowledge: • The Financial Statements, prepared in accordance with the applicable set of accounting standards, giveatrue andfair viewof theassets,liabilities, nancialposition andprot orloss of the Company and the undertakings included in the consolidation taken as a whole; and • TheStrategicReportincludesafairreviewofthedevelopmentandperformanceofthebusiness andthepositionoftheissuerandtheundertakingsincludedintheconsolidationtakenasa whole, together with a description of the principal risks and uncertainties that they face. WeconsiderthattheAnnualReportandAccounts,takenasawhole,isfair,balancedand understandableandprovidestheinformation necessaryforshareholderstoassesstheCompany’s position and performance, business model and strategy. Approved by the Board of Directors on 13 April 2022 and signed on its behalf by: Romi Savova Chief Executive Ofcer 13 April 2022 TheDirectorsareresponsibleforpreparingtheAnnualReportandFinancialStatementsin accordance with applicable law and regulations. CompanylawrequirestheDirectorstoprepareFinancialStatementsforeachnancialyear. Underthatlaw,theyarerequiredtopreparetheGroupFinancialStatementsinaccordancewith InternationalFinancialReportingStandards(‘IFRS’)asadoptedbytheUKinconformitywiththe requirements oftheCompaniesAct2006andhaveelectedtopreparetheParentCompany Financial Statements inaccordance with UK Accounting Standards,including FRS 102, theFinancial Reporting Standard applicable inthe UK and Republic ofIreland. Under company law,the Directors mustnotapprovetheFinancialStatementsunlesstheyaresatisedthattheygiveatrueandfair view of the state of affairs of the Company and of their prot or loss for that period. In preparing each of the Group and Parent Company Financial Statements,the Directors are required to: • Select suitable accounting policies and then apply them consistently; • Make judgements and estimates that are reasonable, relevant, reliable and prudent; • For the Group Financial Statements, state whether they have been prepared in accordance with IFRS as adopted by the UK; • For the Parent Company Financial Statements, state whether Financial Reporting Standard 102 has been followed, subject to any material departures disclosed and explained in the Parent Company Financial Statements; • Assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and • Use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. TheDirectors areresponsibleforkeeping adequateaccountingrecordsthatare sufcienttoshow andexplainthe Company’soperations anddisclose withreasonableaccuracyatany timethe nancialpositionoftheCompanyandthatenablethemtoensurethatitsFinancialStatements comply with the Companies Act 2006.They are responsible for such internalcontrol as they determine isnecessary toenable thepreparation ofFinancial Statementsthat arefree frommaterial misstatement,whether dueto fraudor error,andhave generalresponsibility fortaking suchstepsas are reasonably open tothem to safeguard the assetsof the Group and toprevent and detect fraud and other irregularities. PensionBee Group plc 104 ![]() # FinancialStatements ![]() 1 Independent Auditor's Report to the ### Members of PensionBee Group plc nancialstatementsisapplicablelawandtheUnitedKingdomAccountingStandards,including FRS102'TheFinancialReportingStandardapplicableintheUKandRepublicofIreland'('United Kingdom Generally Accepted Accounting Practice'). 2 Basis for opinion WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UK)('ISAs(UK)') and applicable law. Our responsibilities under thosestandards are further described in the auditor’s responsibilities for the audit of the nancial statements section of our report. We areindependentofthe Groupand theParentCompanyinaccordancewiththeethical requirementsthatarerelevanttoourauditofthenancialstatementsintheUK,includingthe FinancialReporting Council’s(the ‘FRC’s’)EthicalStandard asappliedto listedpublic interestentities, andwe havefullledourother ethicalresponsibilitiesin accordancewiththeserequirements. The non-auditservicesprovided tothe Groupand ParentCompany forthe yearare disclosedin Note9 of the nancialstatements.We conrmthat wehave notprovided anynon-auditservices prohibited by the FRC’s Ethical Standard to the Group or the Parent Company. Webelievethatthe auditevidence wehaveobtained issufcient andappropriateto providea basis for our opinion. 3 Summary of our audit approach Key audit matters The key audit matter that we identied in the current year was: Revenue Recognition Materiality ThematerialitythatweusedfortheGroupnancialstatementswas£255k which was determined on the basis of 2% of Group revenue. Scoping Weidentiedtwosignicantcomponentswhichweresubjecttofullscope audits. These components accountfor 100% of theGroup’s prot before tax, 100% of the Group’s revenue and 100% of the Group’s net assets. #### Report on the Audit of the Financial Statements 1 Opinion In our opinion: • the nancialstatementsofPensionBeeGroupplc(the‘ParentCompany’)anditssubsidiaries (the ‘Group’) givea true andfair view ofthe state ofthe Group’s andof the ParentCompany’s affairs as at 31 December 2021 and of the Group’s loss for the period then ended; • theGroupnancialstatementshavebeenproperlypreparedinaccordancewithUnitedKingdom adopted international accounting standards. • The ParentCompanynancial statementshave beenproperly preparedin accordancewithUnited Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and • the nancialstatements havebeenprepared inaccordancewiththe requirementsofthe Companies Act 2006. We have audited the nancial statements which comprise: • the Consolidated Statement of Comprehensive Income; • the Consolidated and Parent Company Statements of Financial Position; • the Consolidated and Parent Company Statements of Changes in Equity; • the Consolidated Statement of Cash Flows; • the related Notes 1 to 25 to the Consolidated Financial Statements; and • the related Notes 1 to 9 of the Parent Company Financial Statements. ThenancialreportingframeworkthathasbeenappliedinthepreparationoftheGroupnancial statements is applicable law and the United Kingdom adopted international accounting standards. The nancial reporting framework that has been applied in the preparation of the Parent Company PensionBee Group plc 106 ![]() 4 Conclusions relating to going concern Inauditingthe nancialstatements, wehave concludedthat thedirectors’ useof thegoing concern basis of accounting in the preparation of the nancial statements is appropriate. Our evaluationof thedirectors’ assessmentof theGroup’s andParent Company’sability tocontinue to adopt the going concern basis of accounting included the following: • Weevaluatedmanagement’s goingconcernassessment inlightof COVID-19;thisincluded obtaining evidencesuch asunderlying businessplans andforecasts tosupport keyassumptions. • WeobtainedandinspectedcorrespondencebetweentheGroupanditsregulator,theFCA,to identifyany itemsof interestwhich couldpotentiallyindicatenon-compliancewithlegislation or potential litigation or regulatory action held against the Group. • We assessedmanagement’sreverse stresstesting andthe likelihoodofthevariousscenarios that could adversely impact upon the Group’s liquidity. • We have assessed the appropriateness of the disclosures made in relation to going concern. Based onthe work wehave performed, wehave not identiedany materialuncertainties relatingto events or conditions that, individuallyor collectively, may cast signicantdoubt on the Group's and Parent Company’sability to continueas a goingconcern fora periodof at leasttwelve months from when the nancial statements are authorised for issue. Ourresponsibilities andtheresponsibilitiesof thedirectorswithrespect togoingconcernare described in the relevant sections of this report. 5 Key audit matters Key auditmatters arethosematters that,in ourprofessional judgement,were ofmost signicance inourauditofthenancial statementsofthecurrentperiod andincludethemostsignicant assessedrisksofmaterialmisstatement(whetherornotduetofraud)thatweidentied.These matters includedthose which hadthe greatest effect on:the overall audit strategy;the allocation of resources in the audit; and directing the efforts of the engagement team. Thesematterswereaddressedinthecontextofourauditofthenancialstatementsasawhole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 5.1 Revenue Recognition Key audit matter description • ThesolematerialrevenuestreamfortheGroupisfeesfrom fundadministration.Thesefeesareearnedforadministering thecustomerpensionschemesandarechargedbased onaxedpercentageofthevalueofacustomer’spension scheme.Therevenuerecognitionkeyauditmatteridentied relates to thefee percentages applied bymanagement when calculating theadministration feesas asmall change inthese feesmayhaveamaterial impactontheoverallyear-end resultreported.Revenuerecognisedintheperiodended31 December 2021 was £12,753k; further details are included within Note 2 and 4 to the nancial statements. How the scope of our audit responded to the key audit matter • Weobtainedanunderstandingandtestedtherelevant controls relating to the percentages used in calculation of the administration fees. • Wetested theappropriateness ofthefee percentageapplied by management oncustomer pension schemes in theperiod byperforminga100%recalculation ofthe2021administration fee revenue based on customer transactional data. • Wehavetestedthecompletenessandaccuracyofthe underlying transactional data usedwithin recalculation of the administration fee. Key observations • Basedontheworkperformedwehavedeterminedthe revenue recognised is appropriate. 6 Our application of materiality 6.1 Materiality Wedenematerialityasthemagnitudeofmisstatementinthenancialstatementsthatmakesit probable thatthe economic decisionsof areasonably knowledgeableperson would be changedor inuenced.We usematerialitybothinplanning thescopeofouraudit workandinevaluatingthe results of our work. Annual Report and Financial Statements 2021 107 ![]() Basedonourprofessionaljudgement,wedeterminedmaterialityforthenancialstatementsasa whole as follows: Group nancial statements Parent Company nancial statements Materiality £255k£242k Basis for determining materiality 2% of Revenue1% of net assets capped at 95%of Group materiality Rationale for the benchmark applied Revenue has been determined as the most appropriate benchmark due to the fact that that it is a key balance used for determining future protability and stability of the Group. TheParentCompanyprimarilyexistsastheholding companywhichcarriesinvestmentsinGroup subsidiariesandistheissueroflistedsecurities.We considernetassetstobethecriticalbenchmarkfor this company. 6.2 Performance materiality Wesetperformancematerialityatalevellowerthanmaterialitytoreducetheprobabilitythat,in aggregate,uncorrected andundetectedmisstatementsexceedthe materialityforthenancial statements as a whole. Group nancial statements Parent Company nancial statements Performance materiality 65% of Group materiality65% of Parent Company materiality Basis and rationale for determining performance materiality In determiningperformance materiality, weconsidered factors including: • ThefactthatPensionBeeGroupplcisapubliclylistedentity where there is exposure to signicant media coverage. • The quality of the control environment. 6.3 Error reporting threshold WeagreedwiththeAuditandRiskCommitteethatwewouldreporttotheCommitteeallaudit differencesinexcessof£12.8k,aswellasdifferencesbelowthatthresholdthat,inourview,warranted reportingonqualitativegrounds.WealsoreporttotheAuditandRiskCommitteeondisclosure matters that we identied when assessing the overall presentation of the nancial statements. 7 An overview of the scope of our audit 7.1 Identication and scoping of components OurGroupauditwasscopedbyobtaininganunderstandingoftheGroupanditsenvironment, including controlsover revenue,and assessingthe risksof materialmisstatement atthe Grouplevel. ThetwonanciallysignicantcomponentsoftheGroupwhichwereidentiedarePensionBee Limited and the PensionBee Group plc parent entity. Bothofthesesignicantcomponentsweresubjecttoafull-scopeaudit,auditedtocomponent materiality level set at £157k. The componentswithin full scopeaudits account for 100%of the Group’s protbefore tax, 100% of the Group’s revenue and 100% of the Group’s net assets. AuditworktorespondtotherisksofmaterialmisstatementwasperformeddirectlybytheGroup audit engagement team. Group materialityRevenue Revenue £12, 753k Group materiality £255k Component materiality £242k Audit and Risk Committee reporting threshold £12.8k PensionBee Group plc 108 ![]() 7.2 Our consideration of climate-related risks Inplanningouraudit,wehaveconsideredthepotentialimpactofclimatechangeontheGroup’s business and its nancial statements. TheGroupcontinuestodevelopitsassessmentofthepotentialimpactsofenvironmental,social andgovernance('ESG')relatedrisks,includingclimatechange,asoutlinedinESGConsiderations on pages 42-51. Asapartofouraudit,wehaveobtainedmanagement’sclimate-relatedriskassessmentandheld discussionstounderstandtheprocessofidentifyingclimate-relatedrisks,thedeterminationof mitigating actions and the impact on the Group’s nancial statements. We performedour ownqualitative riskassessment ofthe potentialimpact ofclimate changeon the Group’s account balances and classes of transactions. 8 Other information Theotherinformationcomprisestheinformationincludedintheannualreport,otherthanthe nancialstatementsandourauditor’sreportthereon.Thedirectorsareresponsiblefortheother information contained within the annual report. Our opinionon thenancial statementsdoes notcover the otherinformation and, exceptto theextent otherwise explicitlystated in ourreport, wedo notexpress any form ofassurance conclusion thereon. Ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheother informationismateriallyinconsistentwiththenancialstatementsorourknowledgeobtainedin the course of the audit, or otherwise appears to be materially misstated. If weidentify such materialinconsistencies or apparentmaterial misstatements, weare required to determinewhether thisgivesriseto amaterial misstatementinthe nancialstatementsthemselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9 Responsibilities of directors As explained morefully in the directors’responsibilities statement, the directorsare responsible for the preparationof thenancial statementsand forbeing satisedthat theygive atrue and fairview, andforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationof nancial statements that are free from material misstatement, whether due to fraud or error. Inpreparingthenancialstatements,thedirectorsareresponsibleforassessingtheGroup’sand the ParentCompany’sabilitytocontinueasagoingconcern, disclosingasapplicable,mattersrelatedto goingconcern andusing thegoingconcern basisofaccounting unlessthedirectors eitherintend to liquidatethe Groupor the ParentCompany orto cease operations,or haveno realistic alternative but to do so. 10 Auditor’sresponsibilitiesfortheauditofthenancial #### statements Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthenancialstatementsasawhole, are freefrom material misstatement,whether due tofraud or error,and to issuean auditor’s report that includes ouropinion. Reasonable assurance isa high levelof assurance, but isnot a guarantee thatanauditconductedinaccordancewithISAs(UK)willalwaysdetectamaterialmisstatement whenit exists.Misstatementscan arisefromfraudor errorandare consideredmaterialif,individually orintheaggregate,theycouldreasonablybeexpectedtoinuencetheeconomicdecisionsof users taken on the basis of these nancial statements. A furtherdescriptionof ourresponsibilitiesfor theaudit ofthenancial statementsis locatedon theFRC’swebsiteat:www.frc.org.uk/auditorsresponsibilities.Thisdescriptionformspartofour auditor’s report. 11 Extenttowhichtheauditwas consideredcapableof #### detecting irregularities, including fraud Irregularities,including fraud,areinstances ofnon-compliancewith lawsand regulations.Wedesign proceduresinlinewithourresponsibilities,outlinedabove,todetectmaterialmisstatementsin respectofirregularities,includingfraud.Theextenttowhichourproceduresarecapableofdetecting irregularities, including fraud is detailed. 11.1 Identifying and assessing potential risks related to irregularities Inidentifying andassessing risksofmaterialmisstatement inrespect ofirregularities,includingfraud and non-compliance with laws and regulations, we considered the following: • the nature of the industryand sector, control environment and business performance including thedesignoftheGroup’sremunerationpolicies,keydriversfordirectors’remuneration,bonus levels and performance targets; Annual Report and Financial Statements 2021 109 ![]() • resultsofourenquiriesofmanagementandtheAuditandRiskCommitteeabouttheirown identication and assessment of the risks of irregularities; • anymattersweidentiedhavingobtainedandreviewedtheGroup’sdocumentationoftheir policies and procedures relating to: • identifying, evaluating andcomplying with laws and regulationsand whether they were aware of any instances of non-compliance; • detecting and respondingto the risks of fraud and whetherthey have knowledge of any actual, suspected or alleged fraud; • theinternalcontrolsestablishedtomitigaterisksoffraudornon-compliancewithlaws and regulations; and • themattersdiscussed amongtheauditengagement teamandrelevantinternal specialists, including IT and industryspecialists regarding how and where fraud mightoccur in the nancial statements and any potential indicators of fraud. Asaresultoftheseprocedures,weconsideredtheopportunitiesandincentivesthatmayexistwithin theorganisationforfraudandidentiedthegreatestpotentialforfraudiswithintherecognition ofrevenue.IncommonwithallauditsunderISAs(UK),wearealsorequiredtoperformspecic procedures to respond to the risk of management override. Wealso obtainedan understandingof thelegal andregulatory frameworksthat theGroup operates in,focusing onprovisions ofthose lawsandregulations thathad adirecteffectonthe determination ofmaterialamountsanddisclosuresinthenancialstatements.Thekeylawsandregulationswe considered inthis contextincluded the UKCompanies Act,Listing Rules andrelevant taxlegislation. In addition, we consideredprovisions of other lawsand regulations that do nothave a direct effect on thenancial statementsbut compliance withwhich maybe fundamentalto theGroup’s ability to operateor toavoid amaterialpenalty. Theseincluded theGroup’s operatinglicence, regulatory solvency requirements and the regulations imposed by the Financial Conduct Authority. 11.2 Audit response to risks identied As a result ofperforming the above, we identied revenuerecognition as a keyaudit matter related to thepotential risk of fraud.The key auditmatters section ofour reportexplains thematter in more detailand alsodescribes thespecic procedureswe performedin responsetothat keyaudit matter. In addition to the above, our procedures to respond to risks identied included the following: • reviewingthenancialstatementdisclosuresandtestingthesupportingdocumentationto assesscompliance withprovisionsof relevantlawsand regulationsdescribedas havingadirect effect on the nancial statements; • enquiringofmanagement,theAuditandRiskCommitteeandin-houselegalcounsel concerning actual and potential litigation and claims; • performinganalyticalprocedurestoidentifyanyunusualorunexpectedrelationshipsthatmay indicate risks of material misstatement due to fraud; • readingminutesofmeetings ofthose chargedwithgovernance,reviewinginternal audit reports and reviewing correspondence with HMRC and the Financial Conduct Authority; and • inaddressingtheriskoffraudthroughmanagementoverrideofcontrols,testingthe appropriatenessof journalentriesand otheradjustments;assessing whetherthejudgements madeinmakingaccountingestimatesareindicativeofapotentialbias;andevaluatingthe business rationaleof any signicanttransactions thatare unusualor outside thenormal course of business. Wealsocommunicatedrelevantidentiedlawsandregulationsandpotentialfraudriskstoall engagement team members includinginternal specialists, and remained alertto any indications of fraud or non-compliance with laws and regulations throughout the audit. #### Report on other Legal andRegulatory Requirements 12 Opinions on other matters prescribed #### by the Companies Act 2006 InouropinionthepartoftheDirectors'RemunerationReporttobeauditedhasbeenproperly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • theinformationgiveninthestrategicreportandthedirectors’reportforthenancialyearfor which the nancial statements are prepared is consistent with the nancial statements; and • the strategic report andthe directors’ report have been prepared inaccordance with applicable legal requirements. Inthe lightoftheknowledgeand understandingoftheGroup andtheParentCompanyand their environmentobtainedin thecourse ofthe audit,we havenot identiedanymaterialmisstatements in the strategic report or the directors’ report. PensionBee Group plc 110 ![]() 15 Use of our report Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithChapter3ofPart 16of theCompaniesAct 2006.Ouraudit workhasbeen undertakensothat wemightstate tothe company’smembers thosematterswearerequired tostatetothem inanauditor’sreportand for no other purpose.To the fullest extent permittedby law, we do notaccept or assume responsibility to anyoneotherthan thecompany andthe company’smembers asabody, forour auditwork, for this report, or for the opinions we have formed. As required bythe Financial Conduct Authority (‘FCA’)Disclosure Guidanceand Transparency Rule(‘DTR’)4.1.14R, thesenancialstatementsformpartoftheEuropean SingleElectronicFormat (‘ESEF’) preparedAnnual Financial Reportled on the NationalStorage Mechanism of theUK FCA in accordance with the ESEFRegulatory Technical Standard (‘ESEF RTS’). Thisauditor’s report provides noassuranceoverwhether theannual nancialreporthasbeenprepared usingthe singleelectronic format specied in the ESEF RTS. Kieren Cooper FCA (Senior statutory auditor) For and on behalf of Deloitte LLP Statutory Auditor Birmingham, United Kingdom 13 April 2020 13 Mattersonwhichwearerequiredtoreportbyexception 13.1 Adequacy of explanations received and accounting records Under the Companies Act 2006 we are required to report to you if, in our opinion: • we have not received all the information and explanations we require for our audit; or • adequateaccounting recordshave notbeenkept bythe ParentCompany,or returnsadequate for our audit have not been received from branches not visited by us; or • the ParentCompany nancial statementsare not inagreement with theaccounting records and returns We have nothing to report in respect of these matters. 13.2 Directors’ remuneration Under the CompaniesAct 2006, we are alsorequired to report if,in our opinion, certaindisclosures ofdirectors’ remunerationhavenot beenmade,orthe partofthe Directors'RemunerationReport to be audited is not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 14 Other matters which we are required to address 14.1 Auditor tenure Following the recommendation of the Auditand Risk Committee, we were appointed bythe Board ofDirectorsonthe23June2021toauditthenancialstatementsfortheGroupfortheperiod ending31December2021andsubsequentnancialperiods.Theperiodoftotaluninterrupted engagementincludingpreviousrenewalsandreappointmentsofthermis1year,coveringthe period ending 31 December 2021. 14.2 Consistencyof the auditreport with theadditional report tothe Audit and Risk Committee Ouraudit opinionisconsistentwith theadditionalreportto theAuditandRisk Committeeweare required to provide in accordance with ISAs (UK). Annual Report and Financial Statements 2021 111 ![]() Note 2021 £ 000 2020 £ 000 Revenue412,7536,268 Employee BenetsExpense(excluding Share-based Payment)5(7,447)(4,475) Share-based Payment5, 21(3,939)(2,174) Depreciation Expense12, 13(256)(240) Advertising andMarketin g(12,865)(8,223) Other Expenses7(8,862)(3,991) ListingCosts25(2,947)(637) OperatingLoss(23,563)(13,472) FinanceCosts8(1,416)(11) Loss before Tax(24,979)(13,483) Taxation10348220 Loss for the year(24,631)(13,263) Total ComprehensiveLoss for theyear wholly attributable to Equity Holders of the Parent Company(24,631)(13,263) Loss per Share(pence per Share) Basic and Diluted11(11.86)(7.67) Theaboveresultswerederivedfrom continuingoperations. The notes on pages 116 to 132 form an integral part of these nancial statements. 2 ConsolidatedStatementofComprehensiveIncome For the year ended 31 December 2021 PensionBee Group plc 112 ![]() 3 Consolidated Statement of Financial Position As at 31 December 2021 Note 2021 £ 000 2020 £ 000 Assets Non-current Assets Property, Plant and Equipment12127195 Right of Use Assets13692118 819313 Current Assets Trade and Other Receivables143,1711,506 Cash and Cash Equivalents43,5186,736 46,6898,242 Total Assets47,5088,555 Equity and Liabilities Equity Share Capital15 221- Share Premium1653,21830,322 Share-based Payment Reserve16, 218,3174,378 Retained Earnings16(17,976)(28,245) Total Equity43,7806,455 Non-current Liabilities Lease Liability17560- Provisions1843- 603 - Current Liabilities Lease Liability1797109 Trade and Other Payables193,0281,991 3,1252,100 Total Liabilities3,7282,100 Total Equity and Liabilities47,5088,555 The notes on pages 116 to 132 form an integral part of these nancial statements. Approved by the Board on 13 April 2022 and signed on its behalf by: Romi Savova Chief Executive Ofcer Annual Report and Financial Statements 2021 113 ![]() Note Share Capital £ 000 Share Premium £ 000 Share-based Payment Reserve £ 000 Retained Earnings £ 000 Total £ 000 At 1 January 2020-23,1112,204(14,982)10,333 Loss for the Year---(13,263)(13,263) Total Comprehensive Loss---(13,263)(13,263) Issue of Shares-7,211--7,211 Share-based Payment Transactions--2,174-2,174 At 31 December 2020-30,3224,378(28,245)6,455 Share Capital £ 000 Share Premium £ 000 Share-based Payment Reserve £ 000 Retained Earnings £ 000 Total £ 000 At 1 January 2021-30,3224,378(28,245)6,455 Income/(Loss) for the Year---(24,631)(24,631) Total Comprehensive Loss--(24,631)(24,631) Share-based Payment Transactions--3,939-3,939 Issue of Share Capital in PensionBee Limited -4,765--4,765 Group Reorganisation15180(35,088)-34,908- Issue of Share Capital in PensionBeeGroup plc153354,967--55,000 Transaction Costs on Issue of Shares15-(1,748)--(1,748) Exercise of Share Options158--(8)- At 31 December 202122153,2188,317(17,976)43,780 The notes on pages 116 to 132 form an integral part of these consolidated nancial statements. 4 Consolidated Statement of Changes in Equity For the year ended 31 December 2021 PensionBee Group plc 114 ![]() Note 2021 £ 000 2020 £ 000 Cash Flows used inOperating Activities Loss fortheYear(24,631)(13,263) Adjustments to Cash Flows from Non-cash Items Depreciation256240 Loss on Disposal of Equipment7107 FinanceCosts81,41611 Share-basedPayment Transactions3,9392,174 Taxation10 (348) (220) Operating Cash Flows before movements in Working Capital(19,358)(11,051) Working Capital Adjustments Increasein Trade andOther Receivables14(1,277)(627) Increase in Trade and Other Payables19997831 Cash used in Operations(19,638)(10,847) IncomeTaxes Received10-406 Net Cash Flow used in Operating Activities(19,638)(10,441) Cash Flows used inInvesting Activities Acquisition of Equipment12(69)(75) Direct cost for acquiring Right of Use Asset(6)- Net Cash Flow used in Investing Activities(75)(75) Cash Flows from FinancingActivities Revolving Credit Facility Fees(1,409)- Proceeds from Issue ofOrdinaryShares59,7657,211 Transaction Costs on Issue of Shares(1,748)- Payment of Principal and Interest of Lease Liabilities17(113)(150) Net Cash Flowsfrom Financing Activities56,4957,061 Net Increase/(Decrease) in Cash and Cash Equivalents36,782(3,455) Cash and Cash Equivalents at 1 January6,73610,191 Cash and Cash Equivalents at 31 December43,5186,736 Changes in the Group’s liabilities arising from nancing activities, including both cash and non-cash changes have been disclosed in Note 17 to the nancial statements. The notes on pages 116 to 132 form an integral part of these consolidated nancial statements. 5 Consolidated Statement of Cash Flows For the year ended 31 December 2021 Annual Report and Financial Statements 2021 115 ![]() 1. General Information PensionBeeGroupplc(the‘Company’)istheparentcompanyofPensionBeeLimited(the “Subsidiary”)(together the‘Group’).TheCompany isapubliccompany, whosesharesweretraded on the High GrowthSegment of theLondon Stock Exchange (‘LSE’)and is incorporatedand domiciled in England and Wales. The address of its registered ofce is: 209 Blackfriars Road London SE1 8NL United Kingdom Principal Activity TheprincipalactivityoftheGroupisthatofadirect-to-consumeronlinepensionprovider.The GroupseekstomakeitsUKcustomers‘PensionConfident’bygivingthemcompletecontroland clarity overtheir retirementsavings. TheGroup helpsits customers tocombine theirpensions into onenew onlineplan wherethey cancontribute, forecastoutcomes,invest effectively,and withdraw their pensions (from the age of 55), all from the palm of their hand. 2. Accounting Policies Basis of Preparation TheconsolidatednancialstatementshavebeenpreparedinaccordancewithInternational Financial Reporting Standards(‘IFRS’) as adopted bythe UK in conformitywith the requirements of the CompaniesAct2006. Thenancial statementsare preparedon thehistorical costbasisand on a going concern basis. ThepreparationofnancialstatementsinconformitywithIFRSrequirestheuseofcertaincritical accountingestimates.Italsorequiresmanagementtoexerciseitsjudgementintheprocessof applying the Group's accounting policies. 6 Notes to the Financial Statements For the year ended 31 December 2021 Thenancialstatements arepresentedinGBPandall valuesareroundedtothenearest thousand (£’000), exceptwhen otherwiseindicated. Thefunctional currencyof the Companyis GBPbecause it is the primary currency in the economic environment in which the Company operates. Basis of Consolidation The consolidated nancial statements consolidatethe nancial statements of the Company andits subsidiary undertakings drawn up to 31 December 2021. On24March2021,PensionBeeGroupplcacquiredalltheissuedsharesofPensionBeeLimited through a share for share transaction (‘Group reorganisation’). For every issued share in PensionBee Limited,800shares ofPensionBee Groupplcwere issued.PensionBeeGroup plcissued180,054,400 ordinary sharesof £0.001 each.The newlyissued ordinaryshares were accountedfor attheir nominalvalue.AspartoftheGroupreorganisation,theCompanyreduceditssharepremiumto createadditionaldistributablereserves.Fromtheacquisitiondate,PensionBeeLimitedbecamea subsidiary of PensionBee Groupplc. On the samedate, all the shareoptions granted by PensionBee LimitedtoitsemployeeswerecancelledandreplacedbyshareoptionsgrantedbyPensionBee Group plc.The cancellation and replacementof share optionswas accounted foras a modication with no impact on the vesting conditions and the share options valuation. Thecomparativeamountsfortheyearended31December2020andthestatementofnancial position asat 31 December 2020represent PensionBee Limitedprior tothe formationof theGroup. The amounts for theyear ended 31 December 2021and the statement of nancial position as at31 December 2021 represent the Group. AsubsidiaryisanentitycontrolledbytheCompany.ControlisachievedwheretheCompanyhas thepowertogovern thenancial andoperating policiesof anentity soas toobtainbenetsfromits activities. TheCompany reassesses whetherit controlsan entity iffacts and circumstancesindicate there are changes to one or more elements of control. Inter-company transactions,balances andunrealisedgains ontransactions betweenthe Company and its subsidiary, which are related parties, are eliminated in full. Intra-group lossesarealso eliminatedbut mayindicate animpairment thatrequires recognitionin the consolidated nancial statements. PensionBee Group plc 116 ![]() Summary of Signicant Accounting Policies Theprincipalaccountingpoliciesappliedinthepreparationofthesenancialstatementsaresetout below. Thesepolicies havebeen consistently appliedto allthe years presented,unless otherwisestated. Going Concern TheDirectorshaveareasonableexpectationthattheGrouphasadequatenancialresourcesto continueinoperationalexistencefortheforeseeablefutureandaresatisedthattheGroupcan continuetopayitsliabilitiesastheyfalldueforaperiodofatleast12monthsfromthedateof approvalofthesenancialstatements.TheGrouphasstrongcashreservesandforecastsgrowth that should see the nancial results improve in the future years. The COVID-19 pandemichas been considered inthe Directors’ assessmentof goingconcern. TheGrouphasbeenoperationallyresilientasprovenbyconsistentoperationalefcienciesthat havebeenmaintainedduringremoteworkingtimes.TheDirectorsconcludedthattheCOVID-19 pandemic will not impact theGroup’s ability to continue as agoing concern . The impact ofRussia's invasionofUkraineonthemarketsandontheworldmoregenerallyhasalsobeenconsideredin theDirectors'assessmentofgoingconcern.WhiletheGroup'sownexposuretoRussiainterms ofinvestmentsisminimal,roundingto0%,broadermarketvolatilitycouldimpactAssetsunder Administration and the Directors will continue to monitor the rapidly developing situation. Stresstestingwasdonebyconsideringsevereandunlikelybutpossiblescenarios.TheGrouphas adequateresourcestosurvivemacroeconomicdownturnsandtheDirectorsconcludedthatthe Grouphassufcientnancialresourcestoremaininoperationalexistence.Forthesereasons,the Directors adopt the going concern basis of preparation for these nancial statements. Changes in Accounting Policy None ofthestandards, interpretations,and amendmentseffective fortherst timefrom 1January 2021 have had a material effect on the nancial statements. New Standards, Interpretations and Amendments not yet Effective Thenewstandardswhicharenotyeteffectivewillnothaveamaterialimpactonthenancialstatements. Standard Effective Date, Annual Period beginning on or after Amendments to IAS 16 - Proceeds before intended use1 January 2022 Annual improvements 2018 - 2020 Cycle1 January 2022 Amendments toIAS 37 -Costs of FulllingContract (Onerous Lease Assessments) 1 January 2022 Amendments to IAS 1 - Classication1 January 2023 AmendmentstoIAS 1and IFRSPractice Statement2-Deciding which Accounting Policies to Disclose 1 January 2023 Amendments toIAS 8 -Distinguishing betweenAccounting Policies and Accounting Estimates 1 January 2023 Amendments toIAS 12 -Income Taxes: DeferredTax related toAssets 1 January 2023 Revenue Recognition RevenuerepresentsamountsreceivableforservicesnetofVAT.Revenueisderivedfrom administration ofour customers’retirement savingsand the provisionof one-off ancillaryservices to customers. The Group operatesa service to combine and transfercustomers' old pensions into newonlineplans, whicharesubsequentlymanagedbythird partymoneymanagers.TheGroup has applied the 5-step model outlined in IFRS 15 Revenue from contracts with customers as is set out below: Identicationofthecontractwithacustomer -Duringaccountopening,thecustomerismade awareof thepromisestheGroup ismaking.Rightsand obligationsofeachpartyare outlined.The pointatwhichthecustomeragreestothetermsandconditionsisthepointatwhichboththe Group and the customer have approved the contract. Identicationoftheperformanceobligationsinthecontract -TheGroupmakesonepromise toitscustomers,theadministrationofthecustomers’retirementsavingsthroughitsthird-party moneymanagers.TheGroupperformsadministrativetasksduringtheprocessofonboardingits customerstoitstechnologyplatformwhicharenecessaryforthefullmentofadministrationof the customers’retirementsavings. TheGroupdoes notconsider theseadministrativetasks tobe a separateperformanceobligation.Asaresult,itisconsideredthattheGrouphasasingleperformance obligation, which is the administration of the customers’ retirement savings. Determinationofthetransaction price –The moneymanagersinv? ≥ st customers’retirement savings infunds (“GroupPlans”) thatmatch eachcustomer’s selection.The Groupcharges an annual managementfee thatis charged dailyagainst theunits heldby each customer.The annual Annual Report and Financial Statements 2021 117 ![]() managementfeeis basedonaxedpercentage(%)which variesforeachoftheGroupPlans; the fees rangefrom 0.50%to 0.95%.There is afurther xeddiscount of50% provided tocustomers who haveover£100,000 intheirpensionpots.Thediscount isappliedtotheincrementalamount over and above £100,000. Allocation ofthe transaction price - As thereis only oneperformance obligation,the whole transaction price is allocated to this performance obligation. Recognitionofrevenuewhenaperformanceobligationissatisfied -Theadministrationof customers’retirement savingsis continuousuntilthe customerdraws downtheirpension potor transfers itto another UK registeredprovider. Revenue isrecognised over timeas the customer simultaneouslyreceivesandconsumesthebenefitsprovidedbytheGroup’sperformanceas the Groupperforms them. Revenueis calculateddaily asa percentage (basispoints) of thevalue of Assetsunder Administration (‘AUA’)as agreedby the customer. Consideration Payable to Customers TheGrouprunsanumberofincentive-linkedmarketingcampaigns.Underthesecampaigns,a customer becomes entitled to either apension contribution or cash backonce they make their rst livepensiontransfer.Thisconsiderationpayabletothecustomerisnotinexchangeforadistinct good or service that the customertransfers to the Group. Therefore, it isaccounted for as reduction to the transaction price. Thefull consideration is accounted for as revenue reductionin the year it is payable because thedifference between spreading itover the contract life and recognisingit in full in the year it is incurred is not material. Materiality assessment is done annually. Recurring Revenue TheGroup's revenueisrecurring innatureas theannualcharges arecalculateddailyas apercentage (basispoints)ofthevalueofAUAandwillcontinuetobeearnedonanongoingbasiswhilsttheGroup administersthoseassets.Recurringrevenueisderivedfrommanagementfeesandisrecognised basedondailyaccrualsofcustomers'pensionbalancesastheperformanceobligation,beingthe provision of pension scheme administration services to customers, is met. These management fees are charged daily and collected by the Group on a monthly basis. Other Revenue Other Revenue relates to one-off ancillary and ad-hocservices including pension splitting on divorce,earlywithdrawalsowingtoill-health,andfulldraw-downwithinoneyearofbecoming an InvestedCustomer. Forthis revenuestream,the performanceobligation isthe executionof the requested task. There arefee structures in place whichare used to determine the transactionprice. Revenueis recognisedat apointin timewhenthe requestedtask isexecuted(when theserviceis provided to the customer). Foreign Currency Transactions and Balances Inpreparing thenancialstatements oftheGroup entities,transactionsin currenciesotherthan the entity’sfunctionalcurrency(foreigncurrencies)arerecognisedattheratesofexchangeprevailing onthedatesofthetransactions.Ateachreportingdate,monetaryassetsandliabilities thatare denominated in foreigncurrencies are retranslated at therates prevailing atthat date. Non-monetary itemscarriedat fairvaluethataredenominatedinforeigncurrenciesaretranslatedattherates prevailing at thedate when thefair value was determined. Non-monetary itemsthat are measured in terms ofhistorical costin aforeign currency arenot retranslated.Exchange differencesare recognised in the statement ofcomprehensive income in theperiod in which theyarise. Forthepurposeofpresentingconsolidatednancialstatements,transactionsinforeigncurrencies are translated to the Group’s presentationcurrency at the foreign exchange rate ruling atthe date of thetransaction. Monetaryassetsand liabilitiesdenominatedinforeign currenciesatthebalance sheet dateareretranslatedtothepresentationcurrencyattheforeignexchangeraterulingatthatdate. Foreignexchangedifferencesarisingontranslationarerecognisedinthestatementofcomprehensive income. There are nomaterial foreign exchange transactionsin the nancial statements. Tax Taxonthelossfortheyearcomprisesresearchanddevelopmentcredit.Therewasnocurrentor deferredtaxchargefortheyear(2020£nil).Taxisrecognisedinthestatementofcomprehensive incomeexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequityorothercomprehensive income, in which case it isrecognised directly in equity or othercomprehensive income. Currentincome taxassets andliabilitiesaremeasured atthe amountexpectedtoberecovered from orpaid tothe taxationauthorities. Thetax ratesand taxlaws usedto computethe amountare those thatareenactedorsubstantivelyenactedatthereportingdateintheUnitedKingdomwherethe Group operates and generates taxable income. Managementperiodicallyevaluatespositionstakeninthetaxreturnswithrespecttosituations inwhichapplicabletaxregulationsaresubjecttointerpretationandestablishesliabilitieswhere appropriate. Deferred taxis providedusing theliability methodon temporarydifferences betweenthe taxbases of assets and liabilitiesand their carrying amountsfor nancial reporting purposes at thereporting date. Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,thecarryforwardof unusedtax creditsand anyunused taxlosses. Deferredtax assetsare recognisedto theextent thatit is probable that taxable prot will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. PensionBee Group plc 118 ![]() Property, Plant and Equipment Tangiblexed assetsare statedat costless accumulateddepreciation andaccumulated impairment losses.TheGroupassessesateachreportingdatewhetherthereareimpairmentindicatorsfor tangible xed assets. Depreciation Depreciation ischarged tothe statementof comprehensiveincome on astraight-line basisover the estimated useful lives ofeach part of an itemof tangible xed assets. The estimateduseful lives are as follows: Asset ClassDepreciation Method and Rate Computer Equipmentthree years straight line Furniture and Fittingsfour years straight line Leasehold Improvementsstraight line over life of the lease Right of Use Assetsstraight line over life of the lease Anitemofproperty,plantandequipmentandanysignicantpartinitiallyrecognisedisderecognised upondisposal(i.e.,atthedatetherecipientobtainscontrol)orwhennofutureeconomicbenetsare expectedfromits useordisposal.Anygainorloss arisingonderecognitionofthe asset(calculated as the difference betweenthe net disposal proceeds andthe carrying amount ofthe asset) isincluded in the statement of comprehensive income when the asset is derecognised. The residual values, useful lives, and methods of depreciation of property, plant and equipment are reviewed at each nancial year end and adjusted prospectively, if appropriate. Impairment of non-Financial Assets TheGroupassessesateachreportingdate,whetherthereisanindicationthatanassetmaybe impaired.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedbasedon futurecashowswithasuitablerangeofdiscountratesandtheexpectations offuture performance. An impairmentloss isrecognised for theamount bywhich the asset’scarrying amountexceeds its recoverable amount. Impairment loss is recognised in the statement of comprehensive income. Cash and Cash Equivalents Cashandcashequivalentscomprisecashonhandandshorttermhighlyliquiddepositswitha maturity of less than 3 months. Trade Receivables Tradeandotherreceivablesarerecognisedinitiallyatthetransactionpricelessattributable transactioncosts. Subsequenttoinitialrecognition theyaremeasuredat amortisedcostusingthe effectiveinterestmethod,lessanyimpairmentlossesinthecaseoftradereceivablesandother receivables. Trade Payables Tradeandotherpayablesarerecognisedinitiallyattransactionpriceplusattributabletransaction costs. Subsequentlythey aremeasured atamortised costusing theeffective interestmethod. Tradeandotherpayablesareobligationstopayforgoodsorservicesthathavebeenacquiredin theordinarycourseofbusinessfromsuppliers.Tradepayablesareclassiedascurrentliabilitiesif payment is due within one year orless (or in the normal operating cycleof the business if longer). If not, they are presented as non-current liabilities. Thecarryingamountofdeferredtax assetsisreviewedateachreportingdateandreducedtothe extent thatit is nolonger probablethat sufcienttaxable prot willbe availableto allow allor part ofthedeferredtaxassettobeutilised.Unrecogniseddeferredtaxassetsarere-assessedateach reportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxable prots will allow the deferred tax asset to be recovered. Deferred taxassets andliabilities aremeasured atthe taxrates that areexpected toapply inthe year when theasset is realised orthe liability issettled, based ontax rates (andtax laws) thathave been enacted or substantively enacted at the reporting date. The Groupoffsets deferredtax assets anddeferred taxliabilities ifand onlyif it has alegally enforceablerighttosetoffcurrenttaxassetsandcurrenttaxliabilitiesandthedeferredtaxassets and deferredtax liabilities relateto income taxeslevied bythe same taxationauthority on eitherthe sametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrenttaxliabilities andassetsonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously,ineach futureperiodinwhichsignicantamountsofdeferredtaxliabilitiesorassetsareexpectedtobe settled or recovered. Annual Report and Financial Statements 2021 119 ![]() Theright-of-useassetisinitiallymeasuredattheamountoftheleaseliability,adjustedforlease prepayments,leaseincentivesreceived,thegroup’sinitialdirectcosts(e.g.,commissions)andan estimate of restoration, removal, and dismantling costs. Subsequent Measurement After the commencement date, the Group measures the lease liability by: a. Increasing the carrying amount to reect interest on the lease liability. b. Reducing the carrying amount to reect the lease payments made; and c. Re-measuringthecarryingamounttoreectanyreassessmentorleasemodicationsorto reect revised insubstance xed lease payments oron the occurrence of otherspecic events. Interestontheleaseliabilityineachperiodduringtheleasetermistheamountthatproducesa constant periodic rateof interest on the remainingbalance of the lease liability.Interest charges are includedinnance costin thestatement ofcomprehensive income,unless thecostsare includedin the carrying amount of another asset applying other applicable standards. Variable lease payments notincludedinthemeasurementoftheleaseliability,areincludedinoperatingexpensesinthe periodin whichtheeventor conditionthat triggersthemarises. Repaymentoflease liabilitieswithin nancing activities in the cashow statement include both the principal and interest. Provisions Provisions arerecognised whenthe Grouphas apresent obligation (legalor constructive)as aresult of a pastevent, it is probablethat the Group willbe required to settle thatobligation and a reliable estimate can be made of the amount of the obligation. ProvisionsaremeasuredattheDirectors’bestestimateoftheexpenditurerequiredtosettlethe obligation at the reporting date and are discounted to present value where the effect is material. Leases Initial Recognition and Measurement The Groupinitially recognises alease liability for theobligation to make leasepayments and a right- of-use asset for the right to use the underlying asset for the lease term. Theleaseliabilityismeasuredatthepresentvalueoftheleasepaymentstobemadeoverthe leaseterm. Theleasepaymentsinclude xedpayments,purchase optionsatexerciseprice (where payment isreasonably certain),expectedamount ofresidual valueguarantees, terminationoption penalties (where payment is considered reasonablycertain) and variable lease payments that depend on an index or rate. Short Term and Low Value Leases TheGrouphasmadeanaccountingpolicyelection,byclassofunderlyingasset,nottorecognise leaseassetsandleaseliabilitiesforleaseswithaleasetermof12monthsorless(i.e.,short-term leases). The Group has madean accounting policy election on alease-by-lease basis, not torecognise lease assets on leases for which the underlying asset is worth £5,000 or less (i.e., low value leases). Leasepaymentsonshorttermandlowvalueleasesareaccountedforonastraight-linebasesover thetermoftheleaseorothersystematicbasisifconsideredmoreappropriate.Shorttermandlow value leasepayments areincluded in operatingexpenses inthe statement ofcomprehensive income. Share Capital Ordinary sharesare classiedas equity.Equity instrumentsare measuredat thefair valueof thecash or other resources received or receivable, netof the direct costs of issuing the equityinstruments. If paymentis deferredand thetime valueof moneyismaterial, theinitial measurementis ona present value basis. Dened Contribution Pension Obligation TheGroupoperatesadenedcontributionplanforitsemployees,underwhichtheGrouppays xedcontributionsintothePensionBeePersonalPension.Oncethecontributionshavebeenpaid the Group has no further payment obligations. Thecontributions arerecognised asanexpense inthestatement ofcomprehensive incomewhen theyfalldue.Amountsnotpaidareshownincreditorsasaliabilityinthestatementofnancial position. The assets of the plan are held separately from the Group. Share-based Payment Thecostofequity-settledtransactionswithemployeesismeasuredbyreferencetothefairvalue oftheequityinstrumentsgrantedatthedateatwhichtheyaregrantedandisrecognisedasan expense overthe vestingperiod, whichends onthe dateon which therelevant employeesbecome fullyentitledtotheaward.Fairvalueisdeterminedbyusingthemarketpriceofthesharesata pointin timeadjacentto theissue oftheaward. Invaluingequity-settled transactions,noaccount istakenofanyvestingconditions,otherthanconditionslinkedtothepriceofthesharesofthe Group(marketconditions)andnon-vestingconditions.Noexpenseisrecognisedforawardsthat donot ultimatelyvest,exceptforawards wherevestingisconditionalupon amarketornon- vestingcondition,whicharetreatedasvestingirrespectiveofwhetherthemarketornon-vesting PensionBee Group plc 120 ![]() condition issatised, provided thatall other vestingconditions aresatised. At eachbalance sheet datebeforevesting,thecumulativeexpenseiscalculated,representingtheextenttowhichthe vestingperiod hasexpiredandmanagement'sbest estimateofthe achievementorotherwise ofnon-marketconditionsandofthenumberofequityinstrumentsthatwillultimatelyvestorin thecase ofaninstrument subjecttoa marketcondition,be treatedasvesting asdescribedabove. Themovementincumulativeexpensesincethepreviousbalancesheetdateisrecognisedinthe statementof comprehensiveincome, withacorresponding entryinequity underthe Share-based Payment reserve. Where theterms of anequity-settled award aremodied, ora newaward is designatedas replacing a cancelledor settledaward, thecost basedon theoriginal awardterms continues tobe recognised overthe originalvestingperiod. Inaddition,an expenseisrecognised overthe remainderofthe new vesting periodfor theincremental fairvalue ofany modication,based onthe differencebetween thefair valueof theoriginal awardandthe fairvalue ofthe modiedaward,both asmeasured onthe date ofthe modication. No reductionis recognised ifthis difference isnegative. Where anequity- settledaward iscancelled,itis treatedasifit hadvestedonthe dateof cancellation,andany costnot yet recognised inthe statement of comprehensive incomefor the award isexpensed immediately. Anycompensationpaiduptothefairvalueoftheawardatthecancellationorsettlementdateis deductedfromequity(Share-basedPayment reserve),withanyexcessoverfairvalueexpensedin the statement of comprehensive income. TheCompanyhas establishedaShare-basedPaymentReservebut doesnottransferanyamounts fromthisreserveontheexerciseorlapseofoptions.Onexercise,sharesissuedarerecognisedin share capital at their nominal value. Share premium is recognised tothe extent the exercise price is abovethe nominalvalue.Where theCompanyissettling partoftheexercise price,atransferis made from retained earnings to share capital. Research and Development Research anddevelopmentexpenditure isrecognisedasan expenseasincurred,except that developmentexpenditure incurredon anindividualproject iscapitalisedasan intangibleasset when the Group can demonstratethe technical feasibility of completingthe intangible asset so thatit will beavailable foruseor sale,howthe assetwillgenerate futureeconomicbenets,the availabilityof resources to complete development of the assetand the ability to measure reliably the expenditure duringdevelopment. Capitaliseddevelopment costsarerecordedasintangible assetsand amortised from thepoint atwhich theasset isready for use.No development expenditurehas been capitalised during theyears 2020and 2021, onthe basisthat thespecied criteriafor capitalisationhas notbeen met, as costs spent onthe development phase of projects cannot be reliablyestimated. All research and development costs are therefore recognised asan expense as incurred. Impairment of Financial Assets Measurement of Expected Credit Losses Expected creditlosses (‘ECLs’) arebased onthe difference betweenthe contractualcash ows due inaccordancewith thecontract andall thecash owsthat theGroupexpectstoreceive,discounted at an approximation of the original effective interest rate. Fortradeandotherreceivables,theGroupappliesasimpliedapproachincalculatingtheECLs. Therefore, the Group recognises a loss allowance based on lifetime ECLs at each reporting date. 3. Critical Accounting Judgements and KeySources of Estimation Uncertainty IntheapplicationoftheGroup'saccountingpolicies,theDirectorsarerequiredtomakejudgements, estimatesandassumptionsaboutthecarryingamountofassetsandliabilitiesthatarenotreadily apparentfromothersources.Theestimatesandassociatedassumptionsarebasedonhistorical experience andother factors thatare consideredto be relevant.Actual resultsmay differ fromthese estimates. Theestimates andunderlying assumptionsare reviewedon anongoing basis.Revisions toaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisedwherethe revisionaffectsonlythatperiod,orintheperiodoftherevisionandfutureperiodswherethe revision affects both current and future periods. The Group does not have any critical accounting judgements or key estimation uncertainties. 4. Revenue The analysis of the Group’s Revenue for the year from continuing operations is as follows: 2021 £ 000 2020 £ 000 Recurring Revenue12,5926,155 Other Revenue161113 12,7536,268 Annual Report and Financial Statements 2021 121 ![]() Recurring Revenuerelates to revenuefrom the annual managementfee charged to customers.There are no individual revenuesfrom customers which exceed 10% ofPBL 's total Revenuefor the year. Segment Information Operating segmentsandreporting segmentsarereported ina mannerconsistentwith theinternal reportingprovidedtotheChiefOperatingDecisionMaker('CODM').TheGroupconsidersthattherole of CODM is performed by the Boardof Directors. The CODM regularly reviews theGroup's operating resultstoassessperformanceandtoallocateresources.Allearnings,balancesheetandcashow information received and reviewed by the Boardof Directors is prepared at a companylevel. The CODMconsiders that ithas a singlebusiness unit comprisingthe provision ofdirect-to-consumer onlinepension consolidationand,therefore, recognisesoneoperatingand reportingsegmentwith all revenue,lossesbeforetaxandnetassetsbeingattributabletothissinglereportablebusinesssegment. Further, the Group operates in a single geographical location only, being the United Kingdom. 5. Employee Benets Expense The aggregate payroll costs (including Directors’ remuneration) were as follows: 2021 £ 000 2020 £ 000 Wages and Salaries6,4773,957 Social Security Costs767385 Pension Costs, Dened Contribution Scheme203133 7,4474,475 Share-based Payment Expense3,9392,174 11,3866,649 2021 No. 2020 No. Executive Management95 Technology and Product3023 Marketing96 Customer Service8560 Legal, Compliance and Risk75 Administration and Other1511 155110 6. Directors’ Remuneration The Directors' remuneration for the year was as follows: 2021 £ 000 2020 £ 000 Remuneration569288 Group Contributions paid to Dened Contribution Pension Schemes65 575293 DuringtheyearthenumberofDirectorswhowerereceivingbenetsandshareincentiveswas as follows: 2021 No. 2020 No. Members of Dened Contribution Pension Schemes33 TheaveragenumberofpersonsemployedbytheGroup(includingDirectors)duringtheyear, analysed by category was as follows: PensionBee Group plc 122 ![]() In respect of thehighest paid Director: 2021 £ 000 2020 £ 000 Remuneration16898 Group Contributions to Dened Contribution Pension Schemes22 Exercise of Share Options: 2021 £ 000 2020 £ 000 Amount of Gains made on the Exercise of Share Options198- 7. Other Expenses Arrived at after charging: 2021 £ 000 2020 £ 000 Loss on Disposal of Equipment107 Auditor’s Remuneration18770 Money Manager Costs2,300940 Other Expenses6,3652,974 8,8623,991 IncludedinOtherExpensesistechnologyandplatformcosts,professionalservicesfees, irrecoverable VAT, and generaland administrative costs. 8. Finance costs 2021 £ 000 2020 £ 000 Interest Expense on Lease Liabilities711 Revolving Credit Facility Fees1,409- Total Finance Costs 1,41611 Annual Report and Financial Statements 2021 123 ![]() 9. Auditor’s Remuneration 2021 £ 0000 2020 £ 0000 Audit of the Company’s Financial Statements33- Audit of the Company’s Subsidiary Financial Statements9570 Total Audit Fees 12870 Tax Advisory Services16738 Audit Related Assurance Services42- Other Assurance Services633315 Total Non-Audit Fees 842353 Auditor’s remuneration has been shown net of VAT. Except for £28,000(2020: £Nil) relating to the halfyearreviewoftheGroup’snancialstatementsandcontainedinAuditRelatedAssurance Services,allnon-auditfeesareattributedtoservicesreceivedinpreparationforadmissionto theLondonStockExchangeandhavebeenrecordedinlistingcosts.Noserviceswereprovided pursuant to contingent feearrangements. 10. Tax Tax charged/(credited) in the statement of comprehensive income: 2021 £ 000 2020 £ 000 Current Taxation UK Corporation Tax(348)(194) Deferred Taxation Arising from Origination and Reversal of Temporary Differences-(29) Arising from Tax Rate Changes-3 Total Deferred Taxation-(26) Tax Credit in the Statement of Comprehensive Income(348)(220) Thetax onlossfor theyear wascomputedat thestandardrate ofcorporationtax intheUK (2020– at the standard rate of corporation tax in the UK) of 19% (2020 19%). The differences are reconciled below: 2021 £ 000 2020 £ 000 Loss before Tax(24,979)(13,483) Corporation Tax at Standard Rate(4,746)(2,562) Increase from effect of different UK Tax Rates on some Earnings-3 Increasefromeffectofexpensesnotdeductableindetermining Taxable Prot (Tax Loss) 1,464636 Deferred tax expense (credit) from unrecognised Tax Loss or Credit3,2821,897 DecreasefromeffectofadjustmentsinResearchDevelopmentTax Credit (348)(194) Total Tax Credit (348)(220) 2021 £ 000 2020 £ 000 Fixed Assets(13)(24) Temporary Difference Trading-6 Total Deferred Tax Liability(13)(18) Losses available for offsetting against Future Taxable Income1318 Total Deferred Tax Asset1318 Net deferred tax-- TheGrouphas£38,629,000ofnon-expiringcarriedforwardtaxlossesat31December2021 (2020: £21,419,000) againstwhich no deferred tax hasbeen recognised. A deferred taxasset has notbeenrecognisedonthebasisthatthereisinsufficientcertaintyovertherecoveryofthese tax lossesin the nearfuture. PensionBee Group plc 124 ![]() 11. Earnings per Share Basic earningsper shareis calculated bydividing theloss attributableto ordinary equityholders of the Group by the weighted average number of ordinary shares in issue during the period. Diluted earningsper share arecalculated by dividingthe loss attributableto ordinary equityholders oftheGroupadjustedfortheeffectthat wouldresultfromtheweightedaveragenumber ofordinary sharesplustheweightedaveragenumberofsharesthatwouldbeissuedontheconversionof allthedilutivepotential sharesunderoption.Ateachbalancesheetdatereported below,the followingpotential ordinarysharesunderoption areanti-dilutiveandare thereforeexcludedfrom the weighted average number of ordinary shares for the purpose of diluted earnings per share. 20212020 Number of Potential Ordinary Shares3,911,23515,293 Loss Attributable to Equity Holders of PensionBee Group plc (£)(24,631,000)(13,263,000) Weighted Average Number of Shares Outstanding during the Year207,743,435216,058 Basic and Diluted Earnings/(Loss) per Share (pence per Share)(11.86)(6,138.63) BasicEarningsperSharewas(11.86)pfor2021(2020:(6,138.63)p).ThesetwoEPSguresarenot directly comparable due to a change in share capital as part of the reorganisation ahead of the IPO, togetherwith theissuanceofnewsharesas partoftheIPOitself inApril2021.Adjustingthe 2020 EPS for the impact of the IPO gives a comparable EPS of (7.67)p. Determination of the Comparable EPS 20212020 Number of Potential Ordinary Shares\*3,911,23512,234,400 Loss Attributable to Equity Holders of PensionBee Group plc (£)(24,631,000)(13,263,000) Weighted Average Number of Shares Outstanding during the year\*207,743,435172,846,400 Basic and Diluted Earnings/(Loss) per Share (pence per Share)(11.86)(7.67) \*ThroughGroupreorganisation,everyissuedshareinPensionBeeLimitedwasexchangedfor800 sharesinPensionBeeGroupplc.Everyshareoptionwascancelledandreplacedby800shareoptions. 12. Property, Plant and Equipment Fixtures and Fittings £ 000 Leasehold Improvements £ 000 Computer Equipment £ 000 Total £ 000 Cost At 1 January 202069128133330 Additions-86775 Disposals-(8)(2)(10) Transfers2(2)-- At 31 December 202071126198395 At 1 January 202171126198395 Additions--6969 Disposals(6)-(7)(13) Transfers(5)-5- At 31 December 202160126265451 Depreciation At 1 January 202028104381 Charge for year156344122 Eliminated on Disposal-(2)(1)(3) At 31 December 2020437186200 At 1 January 2021437186200 Charge for the year125560127 Eliminated on Disposal--(3)(3) Transfers(4)-4- At 31 December 202151126147324 Carrying amount At 31 December 2021 9-118127 At 31 December 2020 2855112195 At 1 January 2020 4111890249 Annual Report and Financial Statements 2021 125 ![]() 13. Right of Use Asset £ 000 At 1 January 2020 295 At 31 December 2020295 At 1 January 2021295 Additions703 Disposals (295) At 31 December 2021703 Depreciation At 1 January 202059 Charge for year 118 At 31 December 2020177 At 1 January 2021177 Charge for the year129 Eliminated on Disposal (295) At 31 December 202111 Carrying Amount At 31 December 2021 692 At 31 December 2020 118 At 1 January 2020 236 14. Trade and Other Receivables 2021 £ 000 2020 £ 000 Trade Receivables1,335708 Prepayments887360 Accrued Income-11 Other Receivables949427 3,171 1,506 Trade and other receivables are measured at amortised cost and management assessed that the carrying value is approximately their fair value due to the short-term maturities of these balances. 15. Share Capital Allotted, Called Up and Fully Paid Shares 20212020 No. 000£ 000No. 000£ 000 Ordinary of £0.001 each221,565221221- 221,565221221- Sharesat31December2020representthoseofPensionBeeLimited,sharesat31December2021 represent those of PensionBee Group plc. On24March2021,PensionBeeGroupplcacquiredalltheissuedsharesofPensionBeeLimited through a share for share transaction. Every issued share in PensionBee Limited was exchanged for 800sharesinPensionBeeGroupplc.Everyshareoptionwascancelledandreplacedby800share options.Through theGroupreorganisation, PensionBeeGroupplcissued180,054,400 ordinary sharesof£0.001eachandreduceditssharepremiumtocreateadditionaldistributablereserves. On26April2021,PensionBeeGroupplcissued33,333,333ordinarysharesof£0.001eachaspart ofitsInitialPublicOffering(‘IPO’).Eachsharewasissuedat£1.65.Transactioncostsincurredand directly attributable to theissuance of shares forthe IPO amounted to £1,748,000.These costs were recognisedasareductiontothesharepremium.Duringtheyear,PensionBeeGroupplcissued furtherordinarysharesfromshareoptionsexercisedtotaling8,138,194ordinarysharesof£0.001 each. The exercise price for each exercised share options was £0.001. PensionBee Group plc 126 ![]() Eachordinary sharecarries onevotepershareand rankspari passuwithrespect todividends andcapital. 16. Reserves Share Premium Thesharepremiumaccountrepresentstheexcessoftheissuepriceovertheparvalueonshares issued, less transaction costs arising on the issue. Share-based Payment Reserve The Share-based PaymentReserve is usedto recognise thevalue of equity-settledshare-based paymentsprovidedtoemployees,includingkeymanagementpersonnel,aspartoftheirremuneration. Retained Earnings The balance in the retained earnings account represents the distributable reserves of the Group. 17. Leases At31December2020,theGrouphadasinglepropertyleasewhichwasexitedduring2021on exercise ofthebreak option.On inception,the leaseliabilitywas determinedusing adiscount rate linked to London ofce rental yields,adjusted for risk premium for certain companyspecic factors. The discount rate was 6%. InDecember2021,theGroupenteredintoanewpropertyleasewitha5-yearleasetermending in December2026 withan optionto terminatethe lease afterthree years.The Groupis reasonably certainthatthisoptionwillnotbeexercisedthereforetheleasetermwasdeterminedtobeve years. On inception, the lease liability was determined using a discount rate linked toLondon ofce rentalyields,adjustedforriskpremiumforcertaincompanyspecicfactorsaswellastakinginto considerationtheinterestrateassociatedwiththerevolvingcreditfacilityenteredinMarch2021 and cancelled in September 2021. The discount rate was 7%. Thecarryingamountsofright-of-useassetsrecognisedandthemovementsduringeachyearare setoutinNote13.Setoutbelowarethecarryingamountsofleaseliabilitiesandthemovements during the year 20212020 £ 000£ 000 As at 1 January109248 Additions654- Accretion of interest711 Payments(113)(150) As at 31 December 657109 Lease Liabilities included in the Statement of Financial Position: 20212020 £ 000£ 000 Non-current560- Current97109 657109 The following are the amounts recognised in the Statement of Comprehensive Income: 20212020 £ 000£ 000 Depreciation on Right of Use Asset129118 Interest on Lease Liability711 Low Value Leases-6 Payments 136135 Annual Report and Financial Statements 2021 127 ![]() 18. Provisions DilapidationsTotal £ 000£ 000 At 1 January 2021-- Additional Provisions4343 At 31 December 20214343 Non-current Liabilities 4343 TheGroupis requiredtorestoretheleasedpremises ofitsofcestotheiroriginalcondition atthe endof thelease term.Thelease termendson 2December2026. Aprovision hasbeenrecognised at thepresent valueof theestimated expenditurerequired toremove anyleasehold improvements. Thesecostshave beencapitalised aspart ofthe Rightof UseAsset andare amortisedover theuseful life of the asset. 19. Trade and Other Payables 20212020 £ 000£ 000 Trade Payables356749 Accrued Expenses1,8731,200 Social Security and Other Taxes83- Other Payables71642 3,0281,991 Tradeandotherpayablesaremeasuredatamortisedcostandmanagementassessedthatthe carrying value is approximately their fair value due to the short-term maturities of these balances. 20. Pension and Other Schemes TheGroupoperatesadefinedcontributionpensionscheme.Thepensioncostchargeforthe yearrepresents contributionspayablebythe Grouptothe schemeandamountedto £203,000 (2020 £133,000). Contributionstotaling£Nil(2020 £34,000)werepayabletotheschemeattheendof theyearand are included in trade payables. 21. Share-based Payment PensionBee 2015 EMI Share Option Scheme Scheme Details and Movements UnderthePensionBee2015EMIShareOptionSchemeshareoptionsweregrantedtothesenior management of the Group. Theexercise price of the share optionswas £0.001 on the dateof grant. The share options vested as follows: a. 33% of the shares on the rst anniversary of the vesting commencement date; and b. the remaining 67% of the shares monthly in equal instalments over the following two years, so the options were fully vested on the third anniversary of the vesting commencement date. At31December2020alloptionshadbeenfullyexercisedandthereisnointentiontoissueany further options under this scheme. PensionBee EMI and Non-EMI Share Option Scheme Scheme Details and Movements UnderthePensionBeeEMIandNon-EMIShareOptionSchemeshareoptionsweregrantedto eligibleemployeeswhohavepassedtheirprobationperiodattheGroup.Theexercisepriceofall share options is £0.001 per share. Theshareoptionsvestintranches,25%ofthesharesvestontherstanniversaryofthevesting commencementdate withthe remaining75%of thesharesvesting quarterlyinequal instalments over the following three years. Thefairvalueofequity-settledshareoptionsgrantedis estimatedasat thedateofgrant,considering the terms and conditions upon which the options were granted. PensionBee Group plc 128 ![]() Thefairvalueoftheshareoptionsgrantedisestimatedonthedateofgrantbyreferencetothe prevailing shareprice. Beforethe Companywas listed,the fairvalue wasdetermined byreference to the price paid by external part of periodic funding rounds. Theweightedaveragefairvalueofshareoptionsduringtheyearofgrantwas£1.65in2021 (2020 £1,081). These two values are not directly comparable due toa change in share capital as partofthereorganisationaheadof theIPO.Adjustingthe2020fairvaluefortheimpactofthe IPO givesa comparable fairvalue of£1.35. PriortotheCompanybeinglisted,shareoptionscouldonlybeexercisedupontheoccurrenceof an exitevent, a takeover,reconstruction, liquidation and saleof the business, tothe extent they had vested.In theevent thattherewas noexitevent beforethe tenthanniversaryof thedateof grant, the Directors could determine that an option holder may exercise their option in the 30-day period before such anniversary. The exercise period is up to ten years from the grant date. FollowingthelistingoftheCompany duringtheyear, shareoptionscanbeexercised uponsatisfying the service condition. The movements in the number of share options during the year were as follows: 20212020 NumberNumber Outstanding, start of the year15,29311,059 Outstanding after Reorganisation\*12,234,400- Granted during the year312,0004,394 Exercised during the year(8,463,383)- Expired during the year(171,782)(160) Outstanding, end of the year 3,911,23515,293 Theweighted averageshare priceondate ofexercise ofshareoptions exercisedduring theyearwas £1.64 (2020: £Nil)and the weighted averageremaining contractual life istwo years andve months (2020 one year and nine months). \*FollowingthereorganisationaheadofIPO,eachshareoptionwassplitintoeighthundredshare options. Deferred Share Bonus Plan Scheme Details and Movements Under thePensionBee Deferred ShareBonus Plan('DSBP') awardsare granted toeligible employees whoare orwerean employee(includinganExecutive Director)oftheGroup andhavebeen granted abonus.DSBPawardsare grantedattheendofthenancialyearoncetheannualbonusoutturn has been determined. The exercise price of all DSBP awards is £nil per award. ForthetwoExecutiveDirectorsthatwereinofceatyearendtheirDSBPawardscliffvestonthe third anniversary of the date of grant. Forthe rest of the employees their DSBP awards vest in three equalinstallmentsoveraserviceperiodofthreeyearsfromgrantdate.DSBPawardsvestupon satisfying the service condition. The fair value of the DSBP awards is the share price on grant date. DSBP awards can be exercised to the extent they have vested. No DSBP awards were granted during the year (2020: Nil). Charge/Credit arising from Share-based Payment The totalcharge forthe yearfor theShare-based Paymentwas £3,939,000(2020: £2,174,000),all of which related to equity-settled share-based payment transactions 22. Financial Risks Review ThisnotepresentsinformationabouttheGroup’sexposuretonancialrisksandtheGroup’s management ofcapital. Financialrisk exposureresults fromtheoperations ofthe subsidiary.The Companyisnottradingandthereforeisstructuredtoavoid,insofaraspossible,allformsof nancial risk. Financial risk management objectives The Grouphas identiedthe nancial risksarising fromits activities andhas establishedpolicies and procedurestomanage theserisksinaccordancewith itsriskappetite.Theserisksincluded market risk, creditrisk andliquidity risk.The Groupdoes not enteror tradenancial instruments,including derivativenancialinstruments.AssistedbytheAuditandRiskCommittee,theBoardofDirectors hasoverall responsibilityforestablishing andoverseeingthe Group’sriskmanagement framework and risk appetite. Annual Report and Financial Statements 2021 129 ![]() TheGroup’snancialriskmanagementpoliciesareintendedtoensurethatrisks,includingemerging risks areidentied, evaluated andsubject to ongoing closemonitoring and mitigationwhere appropriate.The Boardof Directorsregularlyreviews nancialriskmanagementpolicies,procedures and systems to reectchanges in the business,risk horizon, markets andnancial instruments used bytheGroup.TheGroup'sseniormanagementisresponsiblefortheday-to-daymanagementof these risks in accordance with the Group’s risk management framework. Market Risk Marketriskistheriskthatthefairvalueorfuturecashowsofnancialinstrumentswilluctuate becauseofchangesinmarketprices.Marketriskcomprisesthreetypesofrisk:interestraterisk, currency risk and price risk. Interest Rate Risk Interestrateriskistheriskthatthefairvalueorfuturecashowsofanancialinstrumentwill uctuatebecauseofchangesinmarketinterestrates.TheGroupconsidersinterestraterisktobe insignicant due to low debt and no interest-bearing assets. On22March2021,theGroupenteredintoarevolvingcreditfacilityforupto£10millionwith NationalWestminsterBankplcaspartofprudentcapitalmanagementtoprovideitwithfurther liquidity resources going forward. On 20 September 2021, management decided to close the facility on thebasis thatthe additional liquidityresources wereno longer required.No amountswere drawn from thefacility duringthe periodin which thecredit wasavailable. Amounts chargedto the income statementinrespectofthecostofthisfacilitytotaled£1,409,000fortheyear.However,impacton interest rate in future years is notexpected to be signicant due to thecancellation of the facility. Price Risk Asthemainsourceofrevenueisbasedonthevalueofassetsunderadministration(Assetsunder Administration('AUA')isameasureofthetotalassetsforwhichanancialinstitutionprovides administrativeservices).TheGrouphasanindirectexposuretopriceriskoninvestmentsheldon behalfof clients.Theseassets arenot ontheGroup's statementofnancial position.Therisk oflower revenues ispartiallymitigated byasset classdiversication.The Groupdoes nothedge itsrevenue exposure to movementsin the value ofclient assets arising fromthese risks, and sothe interests of the Group are aligned to those of its clients. A10%changeinequitymarketswouldhaveanapproximate7.5%impactonrevenue.The10% change in equity markets is a reasonable approximation of possible change. Credit Risk Creditrisk isthe riskthat acounterparty willbe unableto payamounts infullwhen due.The Group’s exposureto creditrisk arisesprincipallyfrom itscash balancesheldwith banksand tradereceivables. TheGroup’s tradereceivablesare thecontractualcashow obligationsthatthe payorsmustmeet. The payors are BlackRock, Legal & General, and State StreetCorporation which are high credit rated nancial institutions whose assets they hold behalf of the Group are a small percentage of their net assetsandonthisbasiscreditriskisconsideredtobelow.UtilisingtheSimpliedApproachthe Grouphasshownthereisnoexpectedcreditlossduetonohistoric creditlosses,andnomaterial need for a lifetime loss allowance. Attheendofthereportingperiodnoassetsweredeterminedtobeimpairedandtherewasno balance past due. Incertaincases,theGroupmayalsoconsideranancialassettobeindefaultwheninternalor externalinformationindicatesthattheGroupisunlikelytoreceivetheoutstandingcontractual amountsinfull.Anancialassetiswrittenoff whenthere isno reasonableexpectation ofrecovering the contractual cash ows. Due tothe Group's nancialassets primarily beingtrade receivables whichall have anexpected lifetime of lessthan 12 months,the Grouphas electedto measure the expectedcredit losses at12 months only. Set out below is the information about the credit risk exposure on the Group's trade receivables: Days Past Due Current< 30 days30-60 days61-90 days>91 daysTotal 31-Dec-21 £ 000£ 000£ 000£ 000£ 000£ 000 Gross Trade Receivables 1,335----1,335 Other Receivables 348---601949 Days Current< 30 days30-60 days61-90 days>91 daysTotal 31-Dec-20 £ 000£ 000£ 000£ 000£ 000£ 000 Gross Trade Receivables 708----708 Other Receivables 382---45427 PensionBee Group plc 130 ![]() The Group’s trade receivables are concentrated in the three money managers: 20212020 %% BlackRock71%68% State Street Corporation16%21% Legal & General13%11% Total 100%100% OtherreceivablescompriseR&DtaxcreditduefromHMRC,ofcerentaldepositandfundsdue fromadirector(Mark Wood).Theprobabilityofdefaultbytheseparties isdeemedlow.Thecredit risk onliquid fundsnancial instruments islimited becausethe counterpartiesare banks withhigh credit-ratingsassigned byinternationalcredit-ratingagencies. Theprincipal bankscurrentlyused by the Groupare Barclays plcand Silicon Valley Bank,both currently have long-termcredit ratingsof at least BBB (Standard & Poor’s). The Group’s liquidfunds are concentrated in Barclays plc which holds 93% of the total balance as at year end (2020: 93%). Liquidity Risk LiquidityriskistheriskthattheGroupwillencounterdifcultyinmeetingobligationstosettleits liabilities. This is managed through cash ow forecasting. Maturity Analysis Thefollowing tablesetsouttheremaining contractualmaturitiesofthegroup’s nancialliabilities by type. Within 1 year Between 1 and 5 years After more than 5 years Total 2021£ 000£ 000£ 000£ 000 Trade and Other Payables 3,028--3,028 Lease Liabilities140636-776 3,168636-3,804 Within 1 year Between 1 and 5 years After more than 5 years Total 2020£ 000£ 000£ 000£ 000 Trade and Other Payables 1,991--1,991 Lease Liabilities109--109 2,100--2,100 Capital Risk Management For the purpose of the Group's capital management,capital includes issued capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group's capital management is to maximise the shareholder value. The Group manages its capitalstructure and makes adjustments considering changesin economic conditions. Tomaintain or adjustthe capitalstructure, the Groupmay returncapital to shareholders or issue new shares. Externally Imposed Capital Requirements Thecapitaladequacyofthebusinessis monitoredonaquarterlybasisaspartofgeneralbusiness planningbythenanceteam.TheGroupconductsacapitaladequacyassessmentprocess,as required by the Financial Conduct Authority (‘FCA’) to assess and maintain the appropriate levels. 23. Related Party Transactions Key Management Compensation 20212020 £ 000£ 000 Salaries and Other Short-term Employee Benets1,428643 Other Long-term Benets2116 Share-based Payment2,489863 3,9381,522 Annual Report and Financial Statements 2021 131 ![]() Related Party - PensionBee Trustees ThefollowingrelatedpartytransactionsoccurbetweentheCompanyandPensionBeeTrustees Limited: (i)Paymentofthe PensionBeeTrusteesLimitedbank feesonaquarterly basis.Duringtheyearbankfees amounted to £15,000(2020: £20,000). There was nooutstanding balance at yearend (2020: £nil). (ii)Compensation paymentsasagesture ofgoodwillto customersthatpreferto becompensated via apension contributionor thepurchasing additional units.During theyear, thesecosts amounted to£16,000 (2020:£45,000). Therewas nooutstanding balanceat yearend (2020:£nil). (iii)Other paymentsto customers(e.g.,referral rewards).Paymentsaremade fromthe Companyand investedintothecustomer’sfundfromthePensionBeeTrusteesaccount.Thesepaymentscan befound in'OtherExpenses'and'Advertising andMarketing'.Duringthesecosts amountedto £314,000 (2020: £141,000). There was no outstanding balance at year end (2020: £nil). Transactions with Directors During the year ended 31Dec 2021, the Group made a paymentto HMRC on behalf of Mark Wood for £105,279. Mark will reimburse the subsidiary. 24. Events After The Reporting Period Therewerenoeventsofmaterialimpacttothenancialstatementsthatoccurredafterthe reporting date. 25. Alternative Performance Measures The Company uses a variety of alternative performance measures (‘APMs’) which are not dened or speciedbyIFRS,inparticularAdjustedEarningsBeforeInterest,Taxes,DepreciationandAmortisation ("AdjustedEBITDA"). TheDirectorsuseacombination ofAPMsandIFRS measureswhenreviewing theperformanceandpositionoftheCompanyandbelievethateachofthesemeasuresprovides usefulinformation withrespecttotheCompany’sbusiness andoperations.TheDirectorsconsider thattheseAPMsillustratetheunderlyingperformanceofthebusinessbyexcludingitemsconsidered by management not to be reective of the underlying trading operations of the Company. TheAPMsusedbytheCompanyaredenedbelowandreconciledtotherelatedIFRSnancialmeasures: Adjusted EBITDA AdjustedEBITDArepresentslossfortheyearbeforetaxation,nancecosts,depreciation,share- based compensation and listing costs. Adjusted EBITDAM AdjustedEBITDAMrepresentslossfortheyearbeforetaxation,nancecosts,depreciation, advertising and marketing, share based compensation and listing costs. 20212020 £ 000£ 000 Operating Loss(23,563)(13,472) Depreciation Expense256240 Share-based Payment (1) 3,9392,174 Listing Costs (2) 2,947637 Adjusted EBITDA(16,421)(10,421) Marketing Costs12,8658,223 Adjusted EBITDA before Marketing(3,556)(2,198) (1) Relates to total annual charge in relation to Share-based Payment expense as detailed in Note 21. (2) Relates to expenses incurred in relation to preparation for admission to the London Stock Exchange. PensionBee Group plc 132 ![]() 7 Company Financial Statements #### Parent Company Statement of Financial Position As at 31 December 2021 2021 N o t e £ 000 Assets Non-current Assets Investment in Subsidiaries3348,089 Current Assets Prepayments464 Cash and Cash Equivalents12,139 12,203 Total Assets360,292 Equity and Liabilities Equity Share Capital8221 Share Premium953,218 Share-basedPaymentReserve 3,324 Retained Earnings9303,302 Total Equity360,065 Current Liabilities Trade and Other Payables5227 Total Equity and Liabilities360,292 TheCompanyLossfortheperiodis£1,275,000 The notes on pages 116 to 132 form an integral part of these nancial statements. Approved by the Board on 13 April 2022 and signed on its behalf by: Romi Savova Chief Executive Ofcer Annual Report and Financial Statements 2021 133 ![]() #### Parent Company Statement of Changes in Equity For the year ended 31 December 2021 Share CapitalShare Premium Share-based Payment Reserve Retained EarningsTotal Note£ 000£ 000£ 000£ 000£ 000 Loss for the year---(1,275)(1,275) Total Comprehensive Loss---(1,275)(1,275) Share-based Payment Transactions--3,324-3,324 Issue of Share Capital83354,967--55,000 Group Reorganisation8180--304,585304,765 Transaction Costs on Issue of Shares8-(1,749)--(1,749) Exercise of Share Options88--(8)- At 31 December 202122153,2183,324303,302360,065 PensionBee Group plc 134 ![]() 8 Notes to the Company Financial Statements for the year ended 31 December 2021 • the requirements of Section 33 Related Party Disclosures paragraph 33.7; • therequirementsofSection11FinancialInstrumentsparagraphs11.41(b),11.41(c),11.41(e), 11.41(f), 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); • therequirements ofSection 12Other FinancialInstruments paragraphs12.26 to12.27, 12.29(a), 12.29(b) and 12.29A. Going Concern TheDirectorshaveareasonableexpectationthattheCompanyhasadequatenancialresources tocontinue inoperationalexistencefor theforeseeablefutureand aresatisedthatthe Company can continueto pay itsliabilities as theyfall duefor a periodof at least12 monthsfrom the dateof approval ofthese nancialstatements. TheCompany hasstrong cash reservesand forecastsgrowth inthesubsidiarythatshouldseethenancialresultsimproveinthefutureyears.TheCompany’s onlyinvestmentisin thesubsidiary.Therefore,thesubsidiary’sabilitytoremaininoperational existence was considered. The COVID-19 pandemichas been considered inthe Directors' assessmentof goingconcern. COVID-19 impact on thesubsidiary operation was considered asthe Company’s only investment is in thesubsidiary. Thesubsidiary hasbeen operationallyresilient asproven byconsistent operational efciencies that have been maintained during remote working times. The Directors concluded that the COVID-19 pandemic will not impactthe Company’s ability to continue asa going concern. The impactof Russia’sinvasionof Ukraineonthemarkets andonthe worldmoregenerallyhas alsobeen consideredintheDirectors’assessmentofgoingconcern.Whilethesubsidiary’sownexposureto Russiaintermsofinvestmentsisminimal,roundingto0%,broadermarketvolatilitycouldimpact AssetsunderAdministrationandtheDirectorswillcontinuetomonitortherapidlydeveloping situation. Stress testingwas done on thesubsidiary by consideringsevere and unlikely butpossible scenarios. ThesubsidiaryhasadequateresourcestosurvivemacroeconomicdownturnsandtheDirectors concludedthatthe subsidiaryhassufcientnancialresourcestoremainin operationalexistence. Forthesereasons,theDirectorsadoptthegoingconcernbasisofpreparationforthesenancial statements. 1. Accounting Policies Statement of Compliance Thesenancial statementswere preparedinaccordance withFinancialReportingStandard 102'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Summary of Signicant Accounting Policies and Key Accounting Estimates Theprincipalaccountingpoliciesappliedinthepreparationofthesenancialstatementsare setoutbelow.Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unless otherwise stated. Basis of Preparation These nancial statements have been prepared using the historical cost convention. Thenancialstatements arepresentedinGBPandall valuesareroundedtothenearest thousand (£’000), exceptwhen otherwiseindicated. Thefunctional currencyof the Companyis GBPbecause it is the primary currency in the economic environment in which the Company operates. Judgements and Key Sources of Estimation Uncertainty IntheprocessofapplyingtheCompany’saccountingpolicies,theDirectorshaveconsideredthat thefollowing keysourcesof estimationuncertaintyat thestatement ofnancialposition datewhich have asignicant effecton theamounts recognisedin thenancial statements.TheCompany does not have any critical accounting judgements or key estimation uncertainties. Summary of Disclosure Exemptions TheCompany hastakenadvantage ofthefollowing disclosureexemptionsin preparingthese nancial statements, as permitted by FRS 102: • the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv). • the requirements of Section 7 Statement of Cash Flows; • the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); Annual Report and Financial Statements 2021 135 ![]() Tax Taxonthelossfortheyearcomprisesresearchanddevelopmentcredit.Therewasnocurrentor deferredtaxchargefortheyear(2020:£nil).Taxisrecognisedinthestatementofcomprehensive incomeexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequityorother comprehensiveincome,inwhichcaseitisrecogniseddirectlyinequityorothercomprehensive income. Currentincome taxassets andliabilitiesaremeasured atthe amountexpectedtoberecovered from orpaid tothe taxationauthorities. Thetax ratesand taxlaws usedto computethe amountare those thatareenactedorsubstantivelyenactedatthereportingdateintheUnitedKingdomwherethe Company operates and generates taxable income. Managementperiodicallyevaluatespositionstakeninthetaxreturnswithrespecttosituations inwhichapplicabletaxregulationsaresubjecttointerpretationandestablishesliabilitieswhere appropriate. Deferred taxis providedusing theliability methodon temporarydifferences betweenthe taxbases of assets and liabilitiesand their carrying amountsfor nancial reporting purposes at thereporting date. Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,thecarryforwardof unusedtax creditsand anyunused taxlosses. Deferredtax assetsare recognisedto theextent thatit is probable that taxable prot will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. Thecarryingamountofdeferredtax assetsisreviewedateachreportingdateandreducedtothe extent thatit is nolonger probablethat sufcienttaxable prot willbe availableto allow allor part ofthedeferredtaxassettobeutilised.Unrecogniseddeferredtaxassetsarere-assessedateach reportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxable prots will allow the deferred tax asset to be recovered. Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyinthe yearwhen theassetisrealised ortheliabilityis settled,basedontax rates(andtax laws)thathave been enactedor substantively enactedat thereporting date. TheGroup offsets deferredtax assets and deferredtax liabilities ifand onlyif it hasa legally enforceableright toset off currenttax assets andcurrenttaxliabilitiesandthedeferredtaxassetsanddeferredtaxliabilitiesrelatetoincome taxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxable entities which intend eitherto settle current tax liabilities and assetson a net basis, or torealise the assets and settle theliabilities simultaneously, in each future period inwhich signicant amounts of deferred tax liabilities or assets are expected to be settled or recovered. Investments Investment in subsidiary is recognised at cost and an annual impairment review is undertaken. Cash and Cash Equivalents Cashandcashequivalentscomprisecashonhandandshorttermhighlyliquiddepositswitha maturity of less than 3 months. Trade Receivables Tradeandotherreceivablesarerecognisedinitiallyatthetransactionpricelessattributable transactioncosts. Subsequenttoinitialrecognition theyaremeasuredat amortisedcostusingthe effective interest method, less any impairment losses in the case of trade receivables. Trade Payables Tradeandotherpayablesarerecognisedinitiallyattransactionpriceplusattributabletransaction costs. Subsequently they are measured at amortised cost using the effective interest method. Tradeandotherpayablesareobligationstopayforgoodsorservicesthathavebeenacquiredin theordinarycourseofbusinessfromsuppliers.Tradepayablesareclassiedascurrentliabilitiesif payment is due within one year orless (or in the normal operating cycleof the business if longer). If not, they are presented as non-current liabilities. Impairment of Non-Financial Assets TheGroupassessesateachreportingdate,whetherthereisanindicationthatanassetmaybe impaired.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedbasedon futurecashowswithasuitablerangeofdiscountratesandtheexpectations offuture performance. An impairmentloss isrecognised for theamount bywhich the asset’scarrying amountexceeds its recoverable amount. Impairment loss is recognised in the statement of comprehensive income. Share Capital Ordinary sharesare classiedas equity.Equity instrumentsare measuredat thefair valueof thecash orotherresourcesreceivedorreceivable, netofthedirectcostsofissuingtheequityinstruments. RefertoNote8forthebasisofaccountingfortheshareforsharetransactionthatwasrecordedduring the year.If payment isdeferred andthe time valueof moneyis material, theinitial measurementis on a present value basis. PensionBee Group plc 136 ![]() Share-based Payment The nancialeffect ofawards by theparent companyof equity-settledawards (principally,options over its equity shares) to theemployees of the subsidiary undertaking arerecognised by the parent companyin itsindividual nancialstatements.Inparticular,the parentcompany recordsanincrease initsinvestmentinsubsidiarieswithacredittoequityequivalenttotheexpensefortheequity- settledawardrecognisedinthegroupforsuchawards.Therearenorechargestothesubsidiary undertaking for such awards. 2. Staff Numbers The Company does not have employees. 3. Investments Summary of the Company Investments 2021 £ 000 Inv es tmenti ns ub sidia ri es 348,089 Cost Additions348,089 At 31 December 2021348,089 Carrying Amount At 31 December 2021 348,089 Subsidiary undertakings Name of SubsidiaryPrinciple activityRegistered ofce Proportion of ownership interest and voting rights held (2021) PensionBee LimitedPension provider 209 Blackfriars Road SE1 8NL 100% PensionBee Limited has been included in the Group consolidated nancial statements. Impairment of investment in subsidiary At each reporting period, the investmentis subsidiary is assessed for impairment. Managementhas determined therecoverable amount ofthe investment insubsidiary by referenceto the subsidiary’s discounted forecastcash ows. Keyassumptions included inthis assessment include consideration of growthrates which driverevenue and costs,expected changesto future costsand the discount rate.Theperiodconsideredwasveyears.TheWeightedAverageCostofCapital(‘WACC’)used fordiscountingtheforecastcashows was12%whichwasbenchmarked againstcomparable companies.Therecoverableamountishigherthanthecarryingamountthereforenoimpairment was identied. 4. Prepayments 2021 £ 000 Prepayments 64 5. Trade and Other Payables 2021 £ 000 Trade Payables62 Accrued Expenses32 Amounts due to Subsidiary133 227 6. Deferred Taxation Deferredtax assetshave notbeenrecognised inrespectoftax lossesas thereisinsufcient evidence ofrecoverabilityinthenearfuture.TheCompanyhastaxlossesof£409,000thatareindenitely availableagainst futuretaxableprots oftheCompany forwhichno deferredtaxhas beenprovided. Annual Report and Financial Statements 2021 137 ![]() 7. Share-based Payment Fulldisclosure ofPensionBee'sshare optionschemeis giveninNote21of theAnnualReport and consolidatednancial statements2021. Thedisclosures requiredin relationto Directors’ emolumentsandshareoptionplansaregiveninNote6oftheAnnualReportandconsolidated nancial statements 2021. 8. Share capital 2021 No. 000£ 000 Ordinary of £0.001 each221,565221 221,565221 On24March2021,PensionBeeGroupplcacquiredalltheissuedsharesofPensionBeeLimited through a share for share transaction. Every issued share in PensionBee Limited was exchanged for 800sharesinPensionBeeGroupplc.Everyshareoptionwascancelledandreplacedby800share options.Through theGroupreorganisation, PensionBeeGroupplcissued180,054,400 ordinary sharesof£0.001eachandreduceditssharepremiumtocreateadditionaldistributablereserves. The issued ordinaryshares were accountedfor at theirnominal value. On26 April 2021,PensionBee Group plc issued33,333,333 ordinary sharesof £0.001 each aspart f its InitialPublic Offering (‘IPO’). Eachshare wasissued at£1.65.Transaction costsincurredand directlyattributable totheissuance of shares forthe IPOamounted to£1,748,000. These costs wererecognised as a reductionto the share premium. During the year,PensionBee Group plc issued furtherordinary shares from share options exercisedtotaling8,138,194ordinarysharesof£0.001each.Theexercisepriceforeachexercised share options was £0.001. Eachordinarysharecarriesonevotepershareandranksparipassuwithrespecttodividends and capital. 9. Reserves Share Premium Thesharepremiumaccountrepresentstheexcessoftheissuepriceovertheparvalueonshares issued, less transaction costs arising on the issue. Share-based Payment Reserve TheShare-basedPaymentReserverepresentsthecumulativeexpenseinrelationtoshareoptions granted to subsidiary employees. Retained Earnings Thebalance inthe retainedearningsaccount representsthe distributablereservesofthestandalone company, PensionBee Group plc. PensionBee Group plc 138 ![]() ![]() PensionBee Executive Directors: Romi Savova (Chief Executive Ofcer), Jonathan Lister Parsons (Chief Technology Ofcer) PensionBee Non-Executive Directors: Mark Wood CBE (Independent Chairman), Mary Francis CBE (Senior Independent Director), Michelle Cracknell CBE (Independent Non-Executive Director) Company Secretary: Prism Cosec Limited, Highdown House, Yeoman Way, Worthing, West Sussex, BN99 3HH, United Kingdom Registered Number: 13172844 Registered Ofce: 209 Blackfriars Road, London, SE1 8NL, United Kingdom Auditor: Deloitte LLP, 4 Brindley Place, Birmingham, B1 2HZ, United Kingdom Copyright 2022. PensionBee Ltd. Company registration: 9354862. FCA Reference Number: 744931. Information Commissioner's Ofce registration: ZA131262