Securing trust

Annual Report

2024

Securing trust: Why it matters

Strong economies and thriving

societies require trust. Counterfeits

and illicit trade represent a multi-

trillion dollar issue, with the potential

to undermine that trust.

Our digital authentication solutions

provide transparency, engagement

and control across supply chains.

Physical banknotes include everyone

financially, while contributing towards a

more resilient payments landscape

and protecting the fundamental right

to privacy.

Tax stamps, brand protection physical

tokens and passports provide

standalone off-line surety and enable

quick visual authentication.

However, consumers must have

absolute trust in these products for

them to be of value.

Our purpose is

secure trust

between people,

businesses and

governments

Who we are

Securing trust: Why it matters

FY24 revenue

£103.2m

+12.5%

FY24 revenue

£207.1m

-18.7%

Authentication Currency

De La Rue provides governments and commercial organisations

with secure physical and digital tools that underpin the integrity of

trade, personal identity and the movement of goods. With a rich

history dating back over 200 years, we have built strong

relationships with governments, international brands and central

banks in 140 countries around the world, developing leading-edge

traceability software while staying at the forefront of material

science and design.

We use our expertise to design and manufacture secure solutions

which are reliable and resilient to the onslaught of counterfeiters.

Protecting goods, supply chains

and identities

– Government Revenue Solutions

Trusted and easy-to-implement

digital and physical tax excise

schemes

– ID security solutions

State-of-the-art polycarbonate

data pages, ID cards and features

– Brand protection

Helping major household

names protect their revenues

and reputations

Creating secure, durable and

sustainable banknotes that enable

financial inclusion

– Banknotes

Provide finished banknotes to half of

all central banks and issuing

authorities

– Polymer banknote substrate

More durable and easier to recycle

than traditional cotton paper

– Banknote security features

Experts in precise optical

engineering and design to create

advanced feature effects

About us IFC

Strategic report

Chairman’s statement 4

CEO review 6

Our markets 11

Our business model 16

Our strategy 18

Stakeholder engagement and

Section 172 statement 21

Responsible business report 24

Key performance indicators 46

Financial review 50

Risk and risk management 56

Viability statement and

going concern assessment 64

Governance report

Board leadership and company

purpose 70

Board of Directors 72

Governance at a glance 74

Division of responsibilities 78

Nomination Committee report 80

Audit Committee report 84

Risk Committee report 91

Ethics Committee report 92

Remuneration 94

Directors’ report 113

Directors’ responsibility statement 117

Financial statements

Independent Auditor’s report 119

Consolidated income statement 128

Consolidated statement of

comprehensive income 129

Consolidated balance sheet 130

Consolidated statement

of changes in equity 131

Consolidated cash flow statement 133

Accounting policies 134

Notes to the accounts 148

Company balance sheet 192

Company statement of

changes in equity 193

Accounting policies – Company 194

Notes to the accounts – Company 196

Non-IFRS measures 197

Five year record 201

Shareholder information 202

Contents

1 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Chairman’s statement 4

CEO review 6

Our markets 11

Our business model 16

Our strategy 18

Shareholder engagement and

Section 172 statement 21

Responsible business report 24

Key performance indicators 46

Financial review 50

Risk and risk management 56

Viability statement and

going concern assessment 64

Strategic report

Securing trust

Strong economies and thriving societies

require trust. Counterfeits and illicit trade

represent a multi-trillion dollar issue with

the potential to undermine that trust.

Our advanced solutions

help to secure trust.

Both our physical and digital

solutions play an important

role in this.

Advanced

2 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Securing trust:

Strategic report continued

Through Authentication Through Currency

Bahrain launched a digital

tax stamp scheme covering

tobacco products in 2022.

On 5 June

2024 sterling

banknotes

featuring a

portrait of King

Charles III were

issued for the

first time.

Bahrain launched a digital tax stamp

scheme covering tobacco products in

2022. A team from De La Rue worked

closely with the National Bureau for

Revenue (NBR) in the Kingdom of Bahrain

during the period ahead of implementation

and continues to support on an

operational basis to maximise the

beneficial impact of their scheme.

Ahead of implementation, as well as

preparation of the underpinning legislation

and design of the markers, the teams

worked on how to recognise and register

bona fide manufacturers, importers and

retailers and effective publicity for the new

scheme.

Since implementation the NBR, working

closely with De La Rue and relevant

government stakeholders, has used its

social media channels to educate both the

public and distributors and to give regular

updates on enforcement actions. NBR

invested in educational campaigns that

included direct communication,

workshops and supportive educational

materials and FAQs published on NBR

website as well as onboarding the NBR call

centre to target excise payers prior to

each phase and implementation

milestone. In addition, a dedicated

Relationship Manager was assigned to

each importer throughout their journey

and linked with their related manufacturers

by De La Rue.

The NBR continues to monitor the local

market through regular inspection visits.

The success of the scheme in eliminating

counterfeit tobacco products has given

the authorities sufficient confidence to

allow local manufacture of tobacco

products for the first time, providing

additional impetus to the local economy.

De La Rue has been the sole manufacturer

of sterling banknotes for over 20 years.

This is the first time in UK history that four

different banknotes have been launched at

the same time and the first time the Bank of

England has introduced a change of

monarch on their banknotes.

We worked closely with the Bank of

England’s design team, building on our

longstanding close relationship, to introduce

the King’s image into the existing polymer

series, both as a portrait on the front of the

banknotes and in the see-through security

window. In so doing we ensured that the

revised notes were balanced and printable.

The banknotes will co-circulate with the

notes featuring Her Late Majesty Queen

Elizabeth II. The new banknotes will be used

to replace those that are worn and to meet

any overall increase in demand, in line with

guidance from the Royal Household.

3 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Chairman’s statement

In the year since my appointment

as Chairman, De La Rue has

achieved much to harmonise

stakeholder objectives. Throughout,

I have sought to increase the

cadence of communication with

shareholders, lenders and the

pension fund trustee, alongside

providing ‘air cover’ for the

executive management team to

focus upon achieving the optimum

performance for the business

during a challenging time.

Securing trust:

delivering security

“Our values drive what we do.

By remaining transparent, innovative,

and collaborative, with a focus on

the customer, we are securing trust

with stakeholders.”

Clive Whiley, Chairman

4 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Chairman’s statement continued

Progress in 2024

As detailed in the CEO Review, the

financial results for FY24 met the

guidance provided in April 2023,

achieving adjusted operating profit

of £21.0m (FY23: £27.8m) and limiting

net debt to £89.4m (FY23: £82.4m),

ahead of the mid-£90m guidance

given in December 2023. In addition,

the Authentication division

increased revenue by 12.5% to of

£103.2m (FY23: £91.7m), breaking the

£100m barrier for the first time.

At the same time, we made

significant strides in stabilising the

financial position of the Group. In

June 2023, we agreed a revised set

of banking covenants together with a

15-month moratorium on pension

deficit repair contributions. This was

followed in December 2023 by an

extension to the banking facilities to

1 July 2025 and a £28m reduction in

pension deficit repair contributions

for the next three years, the period

to the next actuarial valuation.

Further details of this can be found

in the Financial Review on pages 50

to 55.

Strategic update

On 30 May 2024 we explained that,

a Board review of the core strategic

strengths of the Group and how best

to optimise the underlying intrinsic

value of the business for the benefit

of all stakeholders had included:

– recognising the improved order

intake and the future prospects

for the Group’s operating

divisions and the Group as a

whole;

– the accretive value creation that

may be achieved with increased

scale and capabilities in both of

our operating divisions; and

– our commitment to reduce

leverage and create greater

financial flexibility in the funding

structure of the Group as a whole.

In addition we noted that the Board

was in discussions with a number of

parties who have made proposals in

relation to either of the Group’s

divisions. Since then, additional

parties have expressed strategic

interest in both divisions, and

negotiations and due diligence are

ongoing. We anticipate announcing

further details ahead of our annual

general meeting on 25 September

2024.

Current trading environment

In the Currency division, market

activity is returning to more normal

levels after a protracted downturn

and our order book has been

maintained at the enhanced levels

witnessed at the year end. The

Authentication division has

underpinned over £150m of its

future expected revenue by

successfully renegotiating all four

significant existing contracts that

were up for renewal during the last

year and now holds multi-year

contracts with anticipated future

revenues of over £350m. All this

points to a more favourable

background in which to trade in

FY25 and beyond.

Responsible business

Operating in a responsible way is

embedded in De La Rue’s purpose:

securing trust between people,

businesses and governments. Our

strategy encompasses clear

commitments to lead our industry in

sustainability and to maintain the

highest ethical standards in the

conduct of our business.

De La Rue has taken steps to lead

our industry on environmental

sustainability for many years. Under

our commitment to the Science

Based Targets Initiative, we are

working towards reducing all our

emissions (Scope 1, 2 and 3) by 45%

by 2030. In addition, we remain

committed to achieve carbon

neutrality for our own operations by

2030.

Conclusion

We are fortunate to have a

committed, hard-working

workforce which is key to the

success of the Group. There has

been and there continues to be

significant change throughout the

organisation and I would like to

thank every individual for their

dedication during this time.

Despite the challenging trading

environment over the last two

years, De La Rue remains a trusted

leader in providing authentication

and currency solutions and the

business is well placed to benefit

from a normalisation of our markets.

As highlighted, the Board has made

demonstrable progress in

establishing a route to realising the

underlying intrinsic value of the

business for the benefit of all

stakeholders and we look forward

to completing this process during

the current financial year.

Clive Whiley,

Chairman

24 July 2024

Securing trust:

Through Governance

We have a robust and

resilient corporate

governance framework

which is well-suited to

address De La Rue’s

strategic priorities.

Read more on page 21

5 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

CEO review

Increasing resilience

and positioned for

future growth

“Through a time of adversity we kept

to our goal of managing the business

to build resilience. We have delivered

on expectations, and are emerging

well-placed for future growth.”

Clive Vacher, Chief Executive Officer

De La Rue’s performance in FY24

was robust, meeting the targets and

guidance set. It was a year in which

we had to navigate a challenging

trading environment, largely driven

by the lengthy downcycle in

currency demand. This environment

has now improved significantly,

highlighting the resilience and

long-term nature of the worldwide

currency industry. The significant

transformation of De La Rue over

the last four years has allowed the

Company to transition through this

industry downturn, and to emerge

strongly to take advantage of the

numerous opportunities coming to

market in both divisions. At the

same time, we have now grown the

Authentication division to over

£100m in revenue, with good

prospects for further growth.

For FY24 De La Rue achieved an

adjusted operating profit of £21.0m

(FY23: £27.8m), in line with the

guidance that we set out at the

beginning of the year. IFRS

operating profit of £5.8m (FY23: loss

of £20.3m) was substantially better

than last year, with lower

exceptional costs.

6 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

CEO review continued

We worked hard to minimise the

business impact of the challenges

we faced, particularly the industry

wide downturn in Currency in the

wake of the Covid pandemic, further

refining the efficiency of our

operations, though we still saw a

18.7% fall in revenue to £207.1m

(FY23: £254.6m). We right-sized our

manufacturing capacity to reflect

the volume of orders that we were

processing, planned our production

schedule carefully, reviewed our cost

base in detail and prioritised cash

generation through efficient working

capital management.

The business is now emerging from

that challenging trading environment

more efficient, more streamlined and

stronger than it was previously. The

increase in activity within the

Currency division that we noted in

December 2023 has continued into

the 2024 calendar year and we

started FY25 with a total Currency

order book of £239m (25 March

2023: £137m). By the end of June

2024 this had increased to £241m

with a further substantial contract

signed in early July.

The Authentication division achieved

record sales of £103.2m in FY24, an

increase of 12.5% over the FY23 total

of £91.7m and surpassing its target

for the year of £100m. Importantly

the division also secured multi-year

renewals on all four of the significant

contracts that were due for renewal

in the year. With these contracts in

place, Authentication has sight of

expected future revenue from

contracts in excess of £350m,

equivalent to around 3.5 years

revenue at current run rates.

At the same time we made significant

strides in stabilising the financial

position of the Group. In June 2023

we agreed a revised set of banking

covenants together with a 15-month

moratorium on pension deficit repair

contributions. This was followed by

an extension to the banking facilities

and a £28m reduction in pension

deficit repair contributions for the

next three years, both agreed in

December 2023. Further details are

in the Financial Review on pages 54

and 55.

Our expanded facility in Malta is

progressing well, with the

Authentication and Currency

facilities on track for completion

during FY25. We are also working on

relocating the remaining non-

manufacturing activities that occur

in Gateshead. This builds on the

progress that we have already made

in streamlining our operations

through ceasing production in Kenya

and flexing our operating model

Read more on page 24

7 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

CEO review continued

Authentication

As mentioned above, the

Authentication division achieved

record sales of £103.2m in FY24

(FY23: £91.7m), surpassing its target

for the year of £100m. Increased

sales of data pages for the

Australian passport, as expected,

were the stand out driver of this

sales increase, with Microsoft

related sales lower than FY23 given

the subdued state of the PC

market. Government Revenue

Solutions (GRS) delivered a stable

performance.

The higher revenue led to adjusted

controllable operating profit rising

to £25.4m (FY23: £23.0m).

Adjusted operating profit was

£14.6m for the period (FY23:

£14.3m), with the division bearing

a greater proportion of enabling

function costs given its higher

revenue in both absolute and

percentage of total terms. IFRS

operating profit at £12.9m (FY23:

£5.4m) also benefitted from lower

exceptional charges.

At the beginning of FY24,

Authentication was facing the

renewal of four important contracts

across all areas of the authentication

operation. All four of these were

successfully renewed with

extensions of between three

and five years’ duration.

Within Brand the Microsoft

contract was renewed to 2029,

extending that relationship to over

25 years. Within GRS, we have

achieved renewals of our contracts

for the provision of digital tax

stamp solutions in two existing

customer territories for three and

five years respectively and within ID

Security Features, as announced at

the half year, we renegotiated a

three-year deal with a key

customer on improved terms.

These contracts bring total

expected revenue of over £150m

and, as noted above, with these in

place, the division now has sight of

expected future revenue from

contracts in excess of £350m,

underpinning its potential to build

further on the near-40% top line

growth we have seen over the past

five years. These contracts run for

up to 11 years but the bulk of this

revenue will accrue over the next

three years.

Our production of data pages for

the award-winning Australian

passport progressed well in FY24.

The ‘Explorer’ polycarbonate data

page, formally launched back in

June 2023, has been well-received

by the industry and we are

currently pursuing further business

opportunities in this area.

In GRS, we continue to see good

opportunities to expand the range

of products authenticated within

the existing territories which we

cover, including soft drinks within

the GCC region. We are looking to

expand the number of territories

covered as well as increasingly

move to direct-to-product printing.

In addition, we expect growth in

Brand sales, including some

modest growth in Microsoft

volumes as the PC market recovers,

as predicted by market intelligence

firm IDC.

For more information:

delarue.com/authentication

Our systems track billions of

products with sub-second

response times through supply

chain from manufacturer to end user.

8 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

CEO review continued

Currency

During FY24, the Currency division

maintained its high proportion of

banknote tender wins and, because

of the increased efficiency of the

division, it remained profitable. This

was despite being adversely

impacted by the industry-wide

slowdown in currency orders in the

wake of the Covid pandemic for

much of the year. The division

achieved an adjusted operating

profit of £6.4m (FY23: £13.6m) on

revenue of £207.1m (FY23:

£254.6m).

On an IFRS basis, operating loss

narrowed materially to just £1.0m

(FY23: loss of £24.8m), benefitting

from the substantially smaller

exceptional costs incurred in FY24.

In FY23 exceptional divisional costs

totalled £38.4m and included costs

associated with the termination of

the supply agreement with Portals

and provisions against Portals loan

notes held by De La Rue. In FY24

exceptional divisional costs

amounted to £7.4m.

Careful management helped to

ensure that the fall in revenue

across all areas of the division was

less in percentage terms than the

equivalent fall in volume in each area.

In turn, our efforts in right-sizing the

business, together with meticulous

control of costs, allowed us to

achieve gross and operating margin

in percentage terms at almost the

same level as last year.

The period 2020 to 2023 saw a

decrease in the number of new

banknote designs, which limited

the opportunities for polymer

conversions versus our initial

expectations.

We retain confidence in the

long-term prospects in this area,

with a range of significant countries

continuing to evaluate conversion.

Our most recent analysis indicates

current potential interest in

polymer banknotes of 54bn notes

per annum, compared with actual

current industry annual production

of around 8bn notes.

We currently have the capacity to

triple our production of polymer

substrate without the need for

further investment. We believe

the continued move to the use of

polymer substrate, with its improved

durability and recyclability, will

generate significant value over

the next three to five years.

Our launch of ASSURE™ represents

the first offer of a level 3 security

in a proven polymer substrate

and allows De La Rue to provide

polymer notes with an full suite

of security features.

We said at the time of the interim

results that we had begun to see an

up-tick in tender activity within

Currency. This has continued

through the last quarter of FY24

and into FY25. At the end of March

2024 the order book stood at

£239.2m (25 March 2023: £136.8m).

At the end of June 2024, the order

book had increased to £241.4m,

with a further substantial contract

closed in early July.

Maximising efficiency and flexibility

throughout transformation.

For more information:

delarue.com/currency

9 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

CEO review continued

Going concern

The Group’s Revolving Credit Facility

(RCF) expires on 1 July 2025. The

cash flow forecasts for the Group

indicate that it would not have

sufficient liquidity to meet the

obligation to repay the RCF on or

before 1 July 2025. As detailed in the

Chairman’s Statement on pages 4

and 5, various strategic options are

being pursued which would allow the

Group to repay the RCF on or before

1 July 2025. The most progressed of

those is the sale of the

Authentication division. The Board

notes that the probability of

completion, timing and terms of the

sale of the division are subject to

factors outside of the Board’s

control, which may in turn impact

the cash proceeds, the costs

associated with the transaction and

the amounts required to address

any pension scheme risk, along with

the day one liquidity of the retained

operations of the Group. These

matters represent a material

uncertainty which may cast

significant doubt upon the Group’s

ability and the Company’s ability to

continue as a going concern for a

period up to 28 September 2025.

Notwithstanding the above, the

Board is confident that the range of

strategic options and the progress

being made with them will ultimately

allow the Group to repay the RCF in

full before its expiration, satisfy

future bonding requirements,

mitigate any risks to the De La Rue

UK defined benefit pension scheme

and continue to operate the retained

business as a going concern, though

management acknowledge that the

probability, timing and final agreed

terms of any such transaction are

subject to factors outside of the

Board’s control.

Our modelling also shows that the

Group should meet all its liquidity

and covenant requirements in the

going concern assessment period,

excluding the need to repay the RCF

by 1 July 2025.

Current trading and outlook

In the first quarter of 2025, the

Authentication division traded in line

with expectations, having successfully

renewed the four significant multi-

year contracts referred to above.

As well as continuing revenue from

current contracts there is potential

upside from the considerable number

of new business opportunities that the

Authentication division is currently

actively pursuing.

The recovery in the Currency

division noted in the interim results

continues, as reflected in the order

book figures at March and June

2024 set out above. This deeper

order book has translated into higher

revenues as well as improved gross

and operating profit performance in

the first quarter compared with the

same period last year. The

profitability of Currency has been

further aided by an improved

payback on the Portals termination.

At the time of signing in 2022 we

assumed this would take four years,

but which we now estimate will be

achieved in two years.

I would like to thank all the

employees at De La Rue for their

perseverance and determination in

reaching this point and look forward

to taking full advantage of the new

opportunities we now see across

both divisions to create growth.

Clive Vacher,

Chief Executive Officer

The precise outturn for the Group in

FY25 will depend on the exact nature

and timing of any business disposal.

We will provide further details once

these become clearer.

Conclusion

We move into FY25 with Currency

now enjoying a prolonged and

substantial growth in activity and

with Authentication pursuing several

potential new business

opportunities, having already

secured substantial revenue with its

renewal of four significant multi-year

contracts. As a result of the

transformation of the company over

the past four years, De La Rue’s

divisions occupy leadership

positions in their respective

industries and are well positioned to

take advantage of the growth that is

evident in their market segments.

Our overall progress in the realm of

sustainability was reflected in a

Silver medal in Ecovadis’ 2023

appraisal, ranking De La Rue in the

top 15% of the thousands of

companies assessed by this

leading holistic sustainability ratings

service and FT Statista has listed

the company as a Climate Change

Leader for a fourth successive year.

Further information on De La Rue’s

approach to responsible business

can be found on pages 24 to 45.

Employees

We continue to keep the health,

safety and welfare of our

employees centre stage. Overall, we

have had an excellent year for

health and safety compliance

exceeding our targeted lost time

injury frequency rate (LTIFR),

through the active continuation of

our ‘Safe, Secure and Sustainable’

hearts and minds campaign.

We also completed the year with

no governmental reportable

accidents across all sites, even with

the backdrop of extensive

construction work at our Malta site.

Elsewhere we have supported

employee welfare by further

developing site employee

engagement teams. These teams

organise events and activities for

their sites including community

support and fundraising.

Read more about financial

performance on page 50

The polymer ECCB $2, designed and manufactured by De La Rue, won the International

Bank Note Society’s ‘Bank Note of the Year’ for 2023, as well as awards from High

Security Printing Latin America and the International Association of Currency Affairs.

10 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our markets

Group revenue split per region

We are ideally

placed to benefit

from growth in

our markets

De La Rue has customers spread across

the world, in every continent other than

Antarctica. Both Authentication and

Currency divisions are therefore subject

to a range of global trends.

issuing authorities with

SAFEGUARD® polymer

substrate banknotes

$47bn

tax revenue lost annually

through illicit tobacco trade

according to WHO FCTC

The Americas

17%

Rest of

Europe

44%

Middle East

and Africa

13%

Asia

11%

Australasia

11 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our markets continued

Increasing sophistication

of counterfeiters

Why this is important

Counterfeiters are becoming ever more

sophisticated over time and take advantage of

the developments in commercially available

equipment and materials to produce realistic

fake products. Counterfeit goods undermine

trust, expose consumers to greater risk and

undermine economies.

Our response

De La Rue products and solutions are all

designed to deter counterfeiters. Whether it

is the use of laminated polycarbonate in the

production of ID documents or the effective

use of banknote design and features, our

solutions are easy to authenticate yet extremely

challenging for counterfeiters to simulate.

Estimated size of counterfeit market

up to $4.5trn

* Source: US Patent and Trademark Office

Move to digital from physical

solutions

Why this is important

There is a trend towards providing digital

solutions, as they are more convenient and

sustainable. Our products must evolve to keep

pace with technological advances and our

physical solutions must interact seamlessly

with the digital world.

Our response

Within Authentication our solutions are digital

enabled or digital based. DLR Certify™, our

Government Revenue Solution system, and

Traceology®, our Brand system, offer digitally

enabled end-to-end track and trace systems

as well as customer digital verification. Our

solutions are built on the best technological

solution to deliver the required performance.

They are easy to implement and fast to use.

Tax stamps issued by De La Rue in FY24

over 11bn

Rise in digital payments

Why this is important

The rise in digital payments is driven by

technological advances which have resulted in

changing consumer behaviour. This increase is

expected to continue but has slowed

dramatically since Covid. The UK saw a slight

increase in cash transactions in 2022 as

consumers turned to the inherently strong

budgeting characteristics of cash.

Our response

Many of the significant countries in which

De La Rue operates have infrastructure, cultural

habits and financial literacy levels that inhibit

the natural adoption of digital payments by

large sections of the population.

For central banks that recognise that cash will

have a significant role to play even in a lower

cash society, SAFEGUARD® polymer banknotes

are a cost-effective solution to maintaining a

functioning cash cycle.

De La Rue is monitoring the rise of digital

currencies and is pro-active in influencing

discussions about access to cash and central

bank digital currencies.

People without access to a bank account

1.4bn

* Source: World Bank

Industry stabilisation post-Covid

Why this is important

Many central banks have now worked through

the stocks of currency which they accumulated

at the start of the Covid pandemic. Within

Authentication we are seeing government

agencies around the world return to normal

operations having suspended making major

decisions during and just after the pandemic.

Our response

Activity levels are now returning to pre-

pandemic patterns.

We monitor closely which territories may need

new currency stocks, may be considering

refreshing their ID documents or are yet to

implement an FCTC compliant tax excise

scheme for tobacco.

Our sales teams and TPPs in both divisions

have maintained strong relationships with key

staff at the relevant government agencies

throughout the last four years.

Increase in Currency order book during FY24

+74%

Global macro trends

12 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our markets continued

Population growth in developing

countries

Why this is important

Populations are still growing in developing

countries. This leads to a greater need for

goods, services and identification documents

and helps sustain the use of cash over time.

Our response

De La Rue is well-placed with longstanding

customer relationships to provide banknotes

for countries where cash will remain a

significant payment tool. We are also well-

placed to deliver solutions for the growing

markets for excisable goods that population

growth brings.

Revenue from Middle East, Asia and Africa

57%

Rise in online purchases

Why this is important

Online purchases are rising generally. Without

the ability to inspect goods physically at the

point of sale, this offers more potential for

counterfeiters. The rise in online shopping is

linked to increases in counterfeit and illicit

trade, creating significant issues for brand

owners and governments hoping to reduce

this activity.

Our response

De La Rue’s brand protection solutions and tax

excise schemes provide ways of verifying

genuine products, combating the spread of

counterfeit goods. Online payments are also

encouraging payment transactions, with cash

payments still contributing towards online

purchases in many countries.

Global e-commerce annual transaction value

$3.1trn

* Source: Worldpay

Governments and companies wish

to act sustainably

Why this is important

Our customers’ desire to act sustainably to

safeguard the planet’s resources leads them to

seek goods and services which are sustainable

in nature.

Our response

We are looking to achieve carbon neutrality

from our own operations by 2030. Our

near-term plans for carbon reduction have

been approved by SBTi as sufficient to meet

the targets of COP21.

Our SAFEGUARD® polymer substrate lasts

longer, stays cleaner and is better able to be

recycled than the cotton paper equivalent.

By moving towards digital solutions, our

authentication offering requires less

consumables.

Scope 1+2 emissions/tonne produced in FY24

-10%

Rising interest rates

Why this is important

The rise in interest rates over the last 18 months

has had a direct impact on the interest paid by

De La Rue on our banking facilities. Separately

inflation in some countries sees banknotes

wear out more quickly (as central banks

typically do not introduce new high value notes

in a timely fashion, meaning multiple notes are

required for transactions).

Our response

We have redoubled our effort to maximise cash

inflow to the business, including carefully

monitoring working capital, matching capital

expenditure to grants received, using cash

balances against loans outstanding and

renegotiating our pension deficit repair

contributions on our historic defined benefit

pension scheme.

EBIT/net interest ratio at 30 March 2024

1.55 (FY23: 3.03)

Global macro trends continued

13 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our markets continued

Authentication

The sale of counterfeit and pirated

goods equates to somewhere

between $1.7trn and $4.5trn per

annum according to the US Patent

and Trademark Office.

Illicit economic activity can include

smuggling, counterfeiting and tax

evasion. It undermines excise

revenues, damages businesses,

benefits criminals, including

funding terrorism, bypasses the

reward for innovation and may

expose consumers to harm as

goods are supplied without

needing to meet the health, safety,

legal or environmental

requirements of a legitimate

supplier.

Illicit trade can bring material risk.

1 in 10 medical products in low

and middle income countries

are substandard or counterfeit

according to the WHO, Africa loses

up to 70% of food production

because of low-quality or

counterfeit seeds and non-genuine

pesticides account for around 30%

of the domestic agrochemical

market in India. Illicit trade may

finance organised crime and

terrorism and may destabilise

legitimate industries.

Governments need to minimise the

impact of illicit trade and protect

tax revenue and identities in order

to fulfil a financial and moral duty,

meet legal obligations, such as the

WHO Framework Convention on

Tobacco Control, decrease tax

leakage and so generate revenue

and provide security for jobs, trade

and the health and wellbeing of

their citizens.

All industries are impacted and the

rise of e-commerce, social media

platforms and cryptocurrencies

provide fertile grounds for the sale

of counterfeit goods. Weak and

disrupted supply chains also

provide avenues for counterfeits to

enter legitimate channels.

There are a number of ways in

which governments and

manufacturers can tackle the

menace of illicit trade. Physical

tokens, increasingly in combination

with digital solutions, help

distinguish real products from fake

ones. Digital traceability is essential

to combat smuggling. Volume

verification of production, through

the use of tax markings and data

analytics, ensures that excise

revenues are correctly aligned with

the actual volume of goods

manufactured.

Secure travel documents protect

countries from ‘bad actors’ and aid

law enforcement.

De La Rue provides digital and

physical end-to-end

authentication solutions that are

reliable, adaptable, and rapid to

implement to protect revenue and

reputations. We offer comprehensive

traceability software which,

together with physical security

token and documents, make our

expertise in preventing illicit and

counterfeit trade world class. Our

ID solutions provide secure ways to

verify the identity of individuals.

Our Authentication division

provides solutions to combat

counterfeits and illicit trade

and verify identity around

the world.

For more information:

delarue.com/authentication

14 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our markets continued

Currency

At a time when concerns about

electronic monitoring are growing,

cash provides a private way of

transacting, for example without

the risk of hacking that electronic

transactions invariably have. In less

developed parts of the world, the

technology-free nature of a cash

transaction, with no need for

internet access, knowledge or

electricity is a real advantage. The

World Bank estimates that 5bn

people did not have good internet

access in 2021, with the IMF

estimating that it would take

investment of over $400bn to

rectify this.

In difficult economic times, cash

acts both as a store of value and a

budgeting tool. UK Finance surmise

that this is why the number of cash

payments made in the UK in 2022

rose by 6.7% when compared with

the previous year.

In addition, use of cash allows

businesses to avoid transaction

fees which can be a significant cost

particularly for smaller traders. It is

also sustainable, using only 17.5% of

the energy consumed by the global

payments industry, according to

the IMF.

From our country-by-country

studies, we estimate that globally

cash in circulation is growing by 5%

per year, with the rate of growth in

many countries, including some

De La Rue customers, being

substantially in excess of this.

Demand for banknotes is driven by

increasing the value of cash in

circulation, replacing banknotes

that have reached the end of their

useful life and the periodic

transition to a new series of

banknotes.

De La Rue has built up strong

relationships working with central

banks and state printers around

the world over many years.

Banknotes are both a key part of

any country’s economy and a key

national symbol: our customers

need to have absolute trust in us to

be a partner in their banknote

manufacture.

As a manufacturer, inventor,

designer, and printer of banknotes,

security features, and polymer

substrate, we are unique. No other

supplier is as deeply and

effectively integrated into the

banknote design process as

De La Rue. Working collaboratively,

our design teams combine their

respective disciplines and decades

of experience and creativity to

deliver exceptional banknote

designs, integrating security

features seamlessly into them.

We offer the flexibility of using one

or more elements of our suite of

banknote products or an end-to-

end design and manufacture

process. We can provide

SAFEGUARD® and our range of

increasingly advanced security

features for a state printworks or

other manufacturer to assemble

and complete. For other customers

we work directly in partnership with

the central bank to create and

manufacture a complete banknote

or banknote series, often

incorporating our own substrate

and security features.

Banknotes remain highly

relevant in the 21st century.

For more information:

delarue.com/currency

15 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our business model

Our unique strengths

Core expertise in secure printing

Our 1,600 dedicated employees work closely with our customers to produce secure

printed products of the highest quality.

Design expertise

Our in-house design studio leads the industry, with a team that has over 350 years of

experience, collaborating with customers throughout the development process.

Manufacturing and development capability

We have invested in world class facilities for banknote and authentication product

manufacture, along with targeted investment in our authentication software. We are able

to scale up to meet future demand without further investment.

Longstanding relationships

Trust is paramount in the secure print industry. Sales cycles are long and customers seek

to build partnerships over time. Many of our customers have dealt with De La Rue for many

years and we have built relationships with them up to the highest level over the years.

Research and development

Our research and development activities provide focused innovation, leveraging our deep

knowledge of our customer needs.

Trusted brand

De La Rue is a trusted British brand with longstanding relationships with many government

agencies around the world and printing expertise stretching back over 200 years.

Suppliers and partners

We build enduring relationships with our suppliers and partners all over the world to

ensure ethical, sustainable and reliable delivery to our customers.

How we

create value

World leaders in our field, De La Rue

has expertise in secure product design,

global manufacturing and software

solutions for supply chain traceability to

governments and businesses worldwide.

16 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our business model continued

How we create value Securing trust:

Creating value for our stakeholders

Understanding customer needs

– Our customers are largely national tax authorities, banknote

issuing authorities, state printing works and international

brand owners. We are relied upon as a trusted partner.

We understand the national significance of the introduction

of a new banknote series, ID document or a new tax stamp

scheme and work closely with our customers on design

and implementation.

Design and technical expertise

– We layer traditional design techniques such as engraving

with the latest security features to produce attractive and

robust banknotes and authentication products. These

combine national symbols, logos, colour, features and

substrate to create an attractive, sustainable, cost effective,

resilient completed product.

– The integration skills of De La Rue’s designers ensure that

these products are easy to authenticate, but also resistant

to counterfeiting.

Precision manufacturing

– We produce goods of the highest quality at volume.

– Each of our products must be different at the end of the

manufacturing process in order to be traceable, but each

must also be verifiable, so designed for recognition and

authentication.

Operations

– Our physical products are produced and shipped to meet

customer timetables. We plan our production timetables

carefully to meet customer needs and maximise operational

efficiency across our sites.

– Our digital solutions are secure, robust and reliable, designed

for speed of operation and ease of implementation.

– We maintain a range of ISO certifications across our sites to

provide independent reassurance to our customers that we

act ethically, manufacture safely and with high quality

standards, with due regard to the environment and according

to the standards set up by the secure printing industry.

Our products in use

– Enable secure participation in the economy.

– Help to deliver confidence.

– Support social and financial inclusion.

– Protect tax revenues.

– Tackle counterfeit goods and illicit trade.

Customers

– Acquire authentication solutions that provide

security and traceability.

– Gain durable, high quality banknotes, exemplifying

the country they represent, embedding a

combination of features that combat

counterfeiting.

Suppliers

– Gain a long-term working relationship with an

ethical partner.

– Receive repeat orders from a customer that treats

them with respect.

Employees

– We promote an inclusive culture which values

diversity, the health and wellbeing of our

employees and whether they can achieve their

potential.

Communities

– We are conscious of our responsibilities to the

communities in which we work and are committed

to minimising the impact of our operations on the

environment.

Shareholders

– Our strategy (see page 18) is designed to achieve

sustainable profitability and cash generation to

create long-term shareholder value.

17 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our strategy

Our strategic pillars

Our day-to-day

divisional strategic

focus has three

broad pillars: grow

repeatable business,

drive efficient

operations and

invest for the future

What our strategic pillars cover

Grow repeatable business

Expand the GRS offering:

– covering other excisable goods,

– expanding in targeted territories focusing on the GCC and beyond, and

– renewing existing contracts on favourable terms.

Within Brand Protection to grow sales of our highly secure labels and digital end-to-end

traceability

Build on the success of our world-leading polycarbonate data page

Target the large market of state printworks for sales of:

– polymer,

– security features, and

– overspill services.

Continue to supply secure innovative banknotes of the highest quality to our customers

Operate in accordance with the highest ethical standards

Drive efficient operations

Stabilise the funding position of the Group

Balance Currency operations to anticipated demand – continue to print banknotes profitably

Resolve remaining legacy issues affecting shareholder value

Deliver further areas of operational efficiency improvement, with strong focus on cash generation

Deliver seamlessly for our customers

Continue to invest in our GRS software capability and infrastructure

Invest for the future

Commercialise the next generation of effects, security features and product formats using our

expertise in design, surface-relief micro-structures and volume holography

Continue to implement international best practice to enhance our digital offering in Authentication

Evolve SAFEGUARD® to enable the next generation of security features and maintain ‘best for

printers’ focus

Improve our energy efficiency, working towards carbon neutrality from our own operations by 2030

Find out more about how we measure progress against our strategic aims in KPIs

on pages 46 to 49.

Grow

repeatable

business

Increasing our

revenue through

relationships providing

ongoing income.

Drive

efficient

operations

Streamlining our

business to minimise

cost while retaining

flexibility.

Invest

for the

future

Focusing our

technical expertise

to develop the

solutions of the future.

18 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our strategy in action

In June 2023, the Central Bank of Egypt

launched the new polymer 20 pound

banknote. This followed the successful

conversion of the 10 pound banknote in

2022 and, as with the LE10, circulates on

De La Rue’s SAFEGUARD® polymer

substrate.

The launch of the LE20 represents a

continuation of the conversion of Egyptian

banknotes to cleaner, more durable and

more cost-effective banknotes, as well as

a further expansion of SAFEGUARD®

supplied to state printworks by De La Rue.

Our strategy continued

Authentication Currency

Explorer

passport

bio-data page

Conversion of

Egyptian LE20

banknote to

polymer

In June 2023, De La Rue launched its

‘Explorer’ passport bio-data page. The

Explorer represents the next generation

of polycarbonate passport data page,

containing a range of innovative design

details and security features (some of

which appear on the R-Series Australian

passport). New features include a

tamper-proof fringe hinge, a woven

thread that is intricately woven into the

polycarbonate layers, metallisation and

detailed edge cut technologies, which

combine to create a highly secure data

page with outstanding design.

19 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Our strategy in action

Our strategy continued

Currency

ASSURE™

Embedded covert security

for polymer banknotes

Sometimes countries need a higher level

of security for their banknotes than usual.

Our ASSURE™ machine-readable security

that can be embedded in polymer notes

is only identifiable by issuing authorities,

keeping banknote integrity secret and

secure from counterfeiters. The feature is

durable as it is embedded within the

banknote, meaning it is there as a feature

of last resort, no matter how damaged or

worn the banknote is.

Polymer banknotes now have the

equivalent security options to paper

substrates, with the added benefits of

greater durability and sustainability.

Authentication

Mason Pearson

countering

diversion in the

luxury beauty

market

Mason Pearson is a prestigious British

company renowned for its luxury

handcrafted hairbrushes.

Mason Pearson brushes began appearing

via unauthorised online distribution

channels, posing a potential threat to the

company’s traditional distribution model,

and disruption to their much sought after

customer experience. This deterioration in

customer service had a detrimental effect

on Mason Pearson’s overall business.

In order to fix these brand protection

challenges, Mason Pearson turned to a

De La Rue solution. They used a

combination of an offline IZON® hologram

label which blends with their existing

packaging, together with the online

Traceology® software system which

equipped the company with comprehensive

tracking data. Each labelled box could be

scanned and traced through the supply

system, enabling the company to see

where each product was sold.

So far, the De La Rue system has flushed

out a number of unauthorised sales

channels providing an attractive, effective

and easy to implement brand protection

system.

20 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Stakeholder engagement and Section 172 statement

Our Directors

recognise the

importance of

communication

and engagement

with all

stakeholders

In their discussions and decision making

during the year to 30 March 2024, the

Directors confirm that they have acted in

the way that they consider, in good faith,

would be most likely to promote the

success of the Company for the benefit

of its members as a whole.

In doing so, they have had regard to

stakeholders’ interests and

specifically each of the matters set

out in section 172(1) (a)-(f) of the

Companies Act 2006. Whilst it is not

always possible to meet the

preferences of all stakeholders, the

Board aims to ensure that all relevant

matters are considered when

making a decision.

Methods used by the Board

The Executive Directors and other

members of the Executive

Leadership Team, supported by

senior managers, undertake the key

engagement with stakeholders. All of

our internal and external

relationships are built on trust and

we recognise that while this is

earned over a long period, it can be

lost in an instant. We know that

communication is key to our

success and there are clear

accountabilities for relationship

management across the business, to

ensure that we protect and develop

our reputation with all our partners

and counterparties.

The Board is kept up to date with

shareholder and other stakeholder

views through reports from

Executive Directors, members of the

Executive Leadership Team, brokers

and advisors, directly from meeting

stakeholders, and from employees

through our Non-executive Director

responsible for employee

engagement during Employee Voice

Forum meetings. All of our Board

members are encouraged to spend

time in the business and to meet

De La Rue’s workforce.

Section 172 factor Relevant disclosures Page

a) the likely

consequences of any

decision in the long

term

– Chairman’s statement

– CEO review

– Our business model

– Our strategy

– Sustainability goals

– Key performance

indicators

4 to 5

6 to 10

16 to 17

18 to 20

46 to 49

b) the interests of our

employees and wider

workforce

– People

– Business standards

– Key matters considered by

the Board

– Ethics Committee

– Remuneration Report

36 to 40

42 to 45

92 to 93

94 to 112

c) the need to foster

business relationships

with our suppliers,

customers and other

key stakeholders

– Securing trust through

Authentication and

Currency

– How we create value

– Third party partner sales

consultants (TPPs) and

suppliers

– Our markets

16 to 17

11 to 15

d) the impact of our

operations on the

community and

environment

– Environment & TCFD

– Charitable and community

activities

27 to 35

e) the desirability of

maintaining a

reputation for high

standards of business

conduct

– People

– Responsible business

– Raising concerns

– Accreditations and

certifications

– Ethics Committee

36 to 41

24 to 45

92 to 93

f) the need to act fairly

as between our

shareholders

– Responsible business

– Chairman’s introduction

to governance

24 to 45

70 to 71

21 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Stakeholder engagement and Section 172 statement continued

Our strategic objectives

Grow repeatable business

Drive efficient operations

Invest for the future

Whilst the Directors’ primary focus

is to deliver a return to shareholders

that is sustainable over the long

term, the Directors are aware of

their wider obligations to all

stakeholders.

Investors Lenders Pension Trustee Employees

Strategic objectives:

Strategic objectives: Strategic objectives: Strategic objectives:

Our engagement

The views of all our investors are an

important consideration and are

regularly summarised and presented

to the Board. Every share carries equal

rights, whether held by an institutional

investor or retail shareholder.

We engage proactively with

shareholders and institutional fund

managers and discuss a range of

strategic, financial and operational

issues. Throughout the year Clive

Vacher has met with investors covering

over 65% of our share capital, and Clive

Whiley has held frequent meetings

with institutional investors, in some

cases monthly.

For our employees and other

shareholders with smaller holdings, our

full and half yearly results presentations

are webcast and available for all. In

addition, shareholders are entitled to

attend the AGM and we provide a Q&A

facility on our website in advance of

general meetings. At our September

2023 AGM, all resolutions passed in

excess of 88.90% with the exception

of one resolution relating to the

disapplication of pre-emption rights.

Our engagement

Our lenders are a key stakeholder

for the Group and we meet regularly

with them.

During FY24, we entered into an

amended facility agreement with our

lenders with a revised package of

covenants more suited to the

environment in which the Company

operates. In December 2023, we

secured an extension to our banking

facilities to July 2025, as well as

cancelling £15m of the facility to reflect

the reality of current bank base rates.

See pages 54 and 55 for more

information.

Our engagement

This year has seen a high level of

engagement with the Trustee of the

De La Rue Pension Fund, overseen by

the Pensions Regulator, resulting in the

deferral of £18.75m of deficit repair

contributions from March 2023 to

July 2024.

See page 55 for more information.

Our engagement

We rely on our highly skilled workforce

of 1,600 employees to deliver our

business results. The Directors and

the Board understand the strategic

importance of the workforce to our

future and always have due regard to

the interests of our employees,

contractors and other members of

the workforce.

The training and development of our

workforce is critical for the Group, and

as such this year we have invested in

management fundamentals training for

all people managers and a leadership

pathway training for key individuals.

Clive Whiley is the designated

independent Non-executive Director

for workforce engagement and chairs

the Employee Voice Forum which

met twice in the year. During the year,

these were held on site in Logan, USA

and Sri Lanka with site workers

attending these, with the findings and

recommendations being shared

with the Board.

See pages 38 and 77 for more

information.

22 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Stakeholder engagement and Section 172 statement continued

Customers, third party sales

consultants (TPPs) and other

suppliers

Other stakeholders: Trade

bodies, regulators, partners

in sustainability

Strategic objectives:

Our engagement

We are proud of the strong

relationships that we have built with

our customers over many years.

Our relationship with our customers

and suppliers is based on mutual

understanding, respect and trust. While

most of the engagement is led by

executive management, the Board kept

the status of our supply chain under

review during the year as well as

approving contracts of significant

value. We are also a signatory to the

Prompt Payment Code.

This year, we have enhanced our due

diligence systems and procedures,

building a much deeper and broader

understanding of the suppliers,

customers and partners that we

trade with.

We complete legal compliance audits

on all operational sites annually, looking

at local legislation and corporate EHS

standards. We work closely with

suppliers and customers making sure

that our supply chain process is

compliant to local and international

legislation. We are fully committed to

meeting the EHS requirements of our

customer base, and actively work with

them with regards to requests for data

and technical support.

See page 40 for more information.

Our engagement

The Board has regard to the interests

of a range of other stakeholders,

including industry bodies, regulators

and a range of partners in

sustainability.

We are heavily involved in leading the

industry through our involvement with

trade bodies. We are one of the

founder members of the Bank Note

Ethics Initiative, and Ruth Euling,

Executive Director, is the Vice Chair on

the International Currency Association.

The ICA works to drive industry

conferences, consumer marketing

and a focus on sustainability.

In addition, we are an active member

of the International Tax Association,

helping to set the standards and best

practice in tax stamps schemes.

We are a member of the Expert

Working Committee for Intergraf,

therefore working with other security

specialists from the industry consulting

with Intergraf on improvements to

additional security and inclusion

of technology.

The Directors continue to pursue

longer-term sustainability goals,

including carbon targets for 2030 and

2050, in each case supported by

action plans. In recognition of these

efforts, in FY24 the Group was awarded

A- for Climate Change by CDP, giving

De La Rue leadership status in this

area. In addition we were again listed as

a FT Statista Climate Change leader.

Since joining the Board as Chairman

in May 2023, Clive Whiley has

completed an in-depth strategic

review of the business, while

largely leaving the executive

management team free to develop

the business. This review enabled

the Board to gauge the core

strategic strengths of the Group

during the challenging financial

environment. In the course of his

work, the Chairman has

substantially increased the

cadence of communication with

our investors, lenders and the

pension fund trustee.

Since May 2023, he has held

frequent, and in some instances

monthly meetings with our top

institutional investors, covering the

majority of the issued share

capital. This engagement with

investors has covered future

opportunities for the Company

and has established the strengths

and viability of each division, both

separately and together.

In support of this process, in June

2023 the Company entered into an

amended and restated revolving

credit facility agreement which was

later extended in December 2023

to July 2025. The entering into of

this facility agreement has enabled

the business to continue to

operate and grow during this

challenging environment.

Alongside the engagement with

investors, the Chairman also

engaged heavily with the pension

trustee and pension regulator in

regard to a moratorium on

payments to July 2024 (thereby

improving cash flow) and a

revaluation of the pension scheme,

(agreed in December 2023), with

deficit repair contributions

becoming payable from July 2024,

at a lower level than previously

agreed. This revised deficit repair

contribution schedule provided

De La Rue with a significantly

improved cash flow profile, and will

reduce cash outflows by £28m

over the period to the end of FY27.

This enhanced communication

with investors, lenders and the

pension trustee has continued

while the Company continues to

a more stable financial position.

Grow repeatable

business

Drive efficient

operations

Invest for

the future

Strategic objectives:

How we factor our stakeholders into our decision making

23 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report

Securing trust

through our focus on

responsible business

Our Authentication and Currency

divisions enable our customers to deliver

sustainable services underpinning the

integrity of economies and trade. To

achieve our overarching purpose of

securing trust between people, businesses

and governments, it is crucial that we

uphold the highest environmental, social,

human rights, ethical and governance

standards in the way we conduct

our business.

This responsible business report outlines

some of the ways we are fulfilling these

commitments, upholding the principles of the

UN Global Compact, and contributing to the

UN Sustainable Development Goals. Further

information demonstrating how Environmental,

Social and Governance (ESG) considerations

are embedded in our performance and

strategy to support the long-term interests

of the business and its stakeholders can be

found throughout the Annual Report and on

our website www.delarue.com.

“De La Rue has been a participant

in the UN Global Compact

(UNGC) since 2016 and remains

committed to the initiative.“

Clive Vacher,

CEO

Our commitments

Environment

– We are committed to leading the industry on

environmental sustainability and achieving

carbon neutrality for our own operations by

2030.

– We set clear goals to minimise the impact of

our operations on the environment.

Find out about our commitments to

Environment on pages 27 to 35

People

– We treat everyone in an ethical and respectful

way, promoting an inclusive culture that values

diversity, and protecting human rights both

within our business and in our wider supply

chain.

– We prioritise the health, safety and wellbeing

of our people.

– We work hard to maintain regular engagement

with our stakeholders including employees,

investors, customers, suppliers, and the

communities in which we work.

Find out about our commitments to People on

pages 36 to 41

Business standards

– Our Code of Business Principles sets out core

principles which define the way we behave

and work daily.

– Our governance system helps us deliver on our

responsibilities to stakeholders through the

operation of robust policies, processes and

monitoring systems.

Find out about our commitments to Business

standards on pages 42 to 45

24 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

De La Rue has been a participant in the UN

Global Compact (UNGC), the world’s largest

corporate sustainability initiative, since 2016

and we remain aligned with the universal

principles on human rights, labour,

environment and anti-corruption that are

championed by the UNGC.

De La Rue has been independently assessed

and has satisfied the requirements to remain a

constituent of the FTSE4Good Index Series.

This Index is designed to measure the

performance of companies demonstrating

strong Environmental, Social and Governance

(ESG) practices. The FTSE4Good indices are

used by a wide variety of market participants

to create and assess responsible investment

funds and other products.

De La Rue has been awarded a Silver EcoVadis

Medal for the second year running. This result

places us among the top 15% of companies

assessed by EcoVadis. This recognises our

strong management system addressing

sustainability criteria across the four pillars of

Environment, Labour & Human Rights, Ethics

and Sustainable Procurement.

De La Rue has, for the fourth consecutive year,

been recognised as one of “Europe’s Climate

Leaders” in the Financial Times and Statista

report. This report lists businesses leading the

way in delivering significant reductions in their

Scope 1 and 2 carbon emission and factors in

transparency around Scope 3 emissions

(supply chain emissions).

Governance and management

The Board has oversight of all our ESG

initiatives through regular reporting, both on a

standalone basis and as part of wider strategic

initiatives. Clive Vacher is the nominated

Director with overall responsibility for our

sustainability strategy. Governance of ESG-

related matters is embedded within our

existing Board and committee structure. See

page 75 for an overview of this structure. The

Executive Leadership Team (ELT) plays a key

role, with responsibility for strategy

implementation, setting targets, ensuring

ongoing monitoring of performance and that

ESG issues are an integral part of day-to-day

business decision making.

For further information about

environmental governance, see page 33

Responsible business report continued

25 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

United Nations Sustainable

Development Goals

We believe that, in delivering our purpose

of securing trust between people,

businesses and governments, and

adopting internal polices and processes

which have a positive impact on our

stakeholders, we make a significant

contribution to the following of the

17 UN SDGs:

We also make a positive contribution

to the following SDGs

Our highly secure physical and digital

solutions underpin the integrity of

economies and trade. Our Currency

products and services promote

financial inclusion, enabling all citizens,

including those with little or no access

to the banking system, to participate

in the global economy. Protecting

government revenues supports the

provision of health, education and

infrastructure to alleviate poverty.

See pages 14 and 15 for further

information about our impact.

We are proud of our diversity, equity

and inclusion programme and have a

gender target for our management

population which is a KPI. We

participated in the UN Global

Compact Target Gender Equality

initiative and report and publish

information in line with our obligations

under the UK Equality Act (Gender Pay

Gap Information) Regulations.

See pages 37 and 81 for further

information about our impact.

We are committed to leading our

industry in sustainability, working on

the sustainability credentials of our

products through their lifecycle and

investing in recycling and waste

management initiatives and carbon

footprint models. We participate

annually in the CDP (formerly known

as the Carbon Disclosure Project),

have approved SBTi targets, and

support the recommendations of

the Task Force on Climate-related

Financial Disclosures (TCFD).

See pages 27 to 35 for further

information about our impact.

Our Authentication products help to

tackle illicit trade, protecting

populations from counterfeit goods,

including medicines, food and drink

which may be harmful to health.

Through our track and trace solutions

we directly contribute to

strengthening the implementation of

the World Health Organization

Framework Convention on Tobacco

Control, a key target of SDG3.

See pages 12 and 14 for further

information about our impact.

We work with governments to secure

trust and build strong economies by

providing solutions which underpin the

integrity of economies and trade. We

protect labour rights and promote safe

and secure working environments for

our workers and expect our suppliers

to do the same.

See pages 36, 38, 39 and 44 for

further information about our

impact.

Our GRS and brand protection

solutions prevent counterfeiting and

illicit trade, contributing to combatting

organised crime. The provision of

secure components for identity

documents, including holograms and

polycarbonate datapages, supports

the target under this SDG to provide

legal identity for all.

See pages 12 and 14 for further

information about our impact.

By delivering on our purpose and

working closely with governments,

central banks and commercial

organisations, we provide products

which improve economies, particularly

amongst developing countries.

See pages 13, 14 and 15 for further

information about our impact.

How De La Rue contributes to UN SDGs

Our additional UN SDG contributions

26 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

De La Rue has been driving an ambitious and

comprehensive environmental programme since 2020.

During that time, we have sought to continuously improve

our management of environmental sustainability, focusing

on assessing the potential risks and opportunities for the

business and reducing the impact of our operations and

products on the environment.

Environment

Responsible business report continued

Environmental sustainability is core

to our business, with Sustainability

and Climate Change being one of

De La Rue’s principal risks (see

pages 56 – 63).

We continue to be confident in

our approach and believe that our

efforts will have greatest impact in

the following key areas; carbon,

energy and energy efficiency,

sustainable consumption and

nature solutions.

We will continue to focus on

accelerating our progress in these

areas and have set short and

medium-term targets to ensure we

remain on track to achieve our

sustainability ambitions, aligned

with the UK Government’s goal of

achieving net zero by 2050. We

intend to publish longer-term goals

in 2025 and 2026 to outline our

strategy for net zero, following a

deep dive assessment of our

sustainability strategy during 2024.

Carbon

including:

– Supply chain

– Impact of

products

Energy

and energy

efficiency

Sustainable

consumption

– Waste

– Water

– Single use

plastics

Our material issues

27 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Carbon

Credible low carbon strategies

require science-based emission

reduction pathways. We have set

ambitious near-term carbon

reduction targets approved by the

Science Based Targets Initiative

(SBTi). In line with the target level of

the Paris Agreement of keeping

global temperature increases below

1.5°C, De La Rue commits to reduce

our absolute Scope 1 and 2 GHG

emissions by 46.2% by FY30 from

a FY20 base year. We also commit

to reducing our absolute Scope 3

GHG emissions by 46.2% within the

same timeframe. We will take a

consistent and transparent

approach to reviewing our targets

on a periodic basis with the next

review due in FY25. If necessary, we

will recalculate and revalidate the

targets in line with SBTi policy.

Details and annual progress against

our carbon reduction targets can

be found on pages 29 and 35.

Supply chain management

Around 65% of our total emissions

come from our supply chain,

underlining the necessity of

measuring progress and setting

targets for our supply base. In 2023,

De La Rue partnered with EcoVadis,

a global sustainability rating

company, to ensure we were

effectively managing risk and

compliance in our supply chain and,

of most relevance, driving Scope 3

decarbonisation. Through our

EcoVadis partnership and other

related activities, we have been able

to engage proactively with our

suppliers and incorporate their input

to improve our calculation of Scope

3. For example, we are able to

identify suppliers who have set

carbon reduction targets through

EcoVadis. Details on our progress in

this area can be found on page 35.

Key supplier spend on EcoVadis

50%

Impact of products

Reducing the impact of our products

throughout their lifecycle is a key

priority for De La Rue. In FY24, we

updated our Lifecycle Assessment

(LCA) model for our banknotes to

capture recent machinery upgrades

and our latest security features to

ensure we are providing our

customers an accurate product

carbon footprint. In addition, as a

manufacturer of polymer substrate,

we remain committed to recycling all

our polymer manufacturing waste

across the Group and furthermore

help our customers identify the right

solutions for their worn banknotes.

Energy and energy efficiency

The best type of clean energy is to

consume less energy, which is why

we continuously look to identify

opportunities to reduce energy

usage across our operations.

Concurrently, it is vital to our

sustainability ambitions to increase

the proportion of renewables in our

overall energy consumption.

Purchased electricity for all our UK

sites is from renewable sources and

we have additionally installed solar

panels in our site at Westhoughton.

For FY25 and FY26 we are striving to

increase our onsite renewable

generation through new solar energy

projects in the UK, Malta and Sri

Lanka. These projects will be

reviewed in FY25. For more

information on energy efficiency

measures in FY24, please see page

35.

Electricity from renewable

sources*

60%

* From purchased renewable electricity and solar

panels in Westhoughton

Environment continued

28 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

FY24 FY23 FY22

UK and

offshore Global*

% of total

UK and

offshore Global*

% of total

UK and

offshore Global*

% of totalType of emissions tCO

e tCO

Direct (Scope 1) 3,455 396 3.1 6,713 461 2.9 6,122 537 3.9

Indirect (Scope 2 – market-based) – 4,411 3.6 – 4,341 1.7 – 6,110 3.6

Indirect (Scope 2 – location-based) 2,280 6,920 3,191 8,128 4,036 8,633

Scope 1 & 2 (market-based) 3,455 4,807 6.7 6,713 4,802 4.6 6,122 6,648 7.4

Indirect other (Scope 3)** 115,261 93.3 238,186 95.3 159,206 92.6

1. Purchased goods and services 79,014 64.0 158,900 63.6 106,573 61.9

2. Capital goods 8,714 7.1 10,160 4.0 4,537 2.6

3. Fuel and energy related activities 2,800 2.3 4,486 1.8 6,337 3.7

4. Upstream transportation and distribution 12,338 10.0 41,409 16.6 28,676 16.7

5. Waste generated in operations 373 0.3 478 0.2 668 0.4

6. Business travel 1,154 0.9 942 0.4 774 0.5

7. Employee commuting 1,322 1.1 1,959 0.8 2,030 1.2

8. Upstream leased assets 81 0.1 91 – 28 –

9. Downstream transportation and distribution 3,674 2.9 13,928 5.6 1 –

12. End-of-life treatment of sold products 5,791 4.6 5,833 2.3 9,582 5.6

Total gross emissions (market-based) 123,523 100.0 249,701 100.0 171,976 100.0

Intensity ratio UK and Global: Tonnes of gross

e (Scope 1 and 2 market-based) per million

GB £ turnover 26.6 32.9 34.0

Energy consumption used to calculate

Scope 1 and 2 emissions/kWh 22,543,553 19,333,108 34,507,797 22,673,342 31,055,320 25,173,111

Notes:

* Global includes all sites outside of the UK.

** Scope 3 emission categories 10, 11, 13, 14 and 15, associated with the processing of sold products, use of sold products, downstream leased assets, franchises and investments are not applicable to De La Rue.

Greenhouse Gas Emissions

De La Rue reports on all of the

mandatory non-financial disclosures

required by the UK Companies Act

2006 including our greenhouse gas

(GHG) emissions, as required by the

Streamlined Emissions and Carbon

Reporting (SECR) regulation. The

Greenhouse Gas Protocol Corporate

Standard methodology has been

applied to calculate the GHG

emissions associated with

De La Rue’s operational activities,

along with the UK Government GHG

Conversion Factors for Company

Reporting 2023, IEA Emissions

Factors and AIB6 Residual Mix

Emissions Factors.

Streamlined Emissions and

Carbon Reporting (SECR)

As a large, listed company, De La Rue

is required to report its energy use

and carbon emissions in accordance

with the Companies (Directors’

Report) and Limited Liability

Partnerships (Energy and Carbon

Report) Regulations 2018. The data

detailed here represents emissions

and energy use for which De La Rue

is responsible, including electricity,

gas use, process, and fugitive

emissions in offices.

The emissions from previous years

have been adjusted within this year’s

report. This was due to availability of

updated figures for March 2023, for

which only estimates were shown in

2023 report. The methodology to

account for this adjustment is

aligned to the latest reporting

requirements. De La Rue has also

commissioned an independent

third-party limited assurance

verification of our direct (Scope 1)

and market-based indirect (Scope

2) greenhouse gas emissions for

FY23 aligned with the ISO 14064-

3:2019 standard. The FY23

verification took into account the

adjustment made in this year’s

report and we will be commissioning

a limited assurance verification

of our FY24 emissions in the

upcoming year.

Subsequent to the verification, we

purchased carbon offset credits

accounting for 35% of our

greenhouse gas emissions in FY23,

through PAS2060 aligned carbon

offsetting projects. This is a part of

our phased offsetting programme to

achieve carbon neutrality by FY30 in

our operations.

We continued to purchase

renewable electricity for all our UK

sites in addition with Guarantees of

Origins (GoOs) for Malta and I-RECs

that ensured the Sri Lanka facility

ran on 100% renewable electricity

for FY24.

Our site in Logan, USA, achieved a

greater than 10% reduction in

energy consumption as the site

continued to transition from argon

lasers to more energy efficient

solid-state lasers. In addition, all

sites across the Group have

pursued more energy efficient

replacements for our existing

infrastructure that has reached its

end of life.

29 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Environment continued

Carbon neutral by 2030 for

our operations

We have set a target to be carbon

neutral by 2030 for our own

operations across Scope 1 and 2

(market-based) emissions through

a phased offsetting programme.

This will allow us to offset any

residual emissions that we cannot

reduce. This is in alignment with our

ambition for net zero by 2050 or

sooner. The graph above illustrates

our plan, with future planned offsets

calculated as a proportion of the

targeted emissions.

In FY24, we saw a 27% reduction in

our total energy consumption

against our FY20 base year. This

reduction was primarily due to a

drop in production activity in

Currency as well as energy efficiency

measures throughout the Group. In

FY24 we also achieved a 55%

reduction in Scope 1 and Scope 2

(market-based) carbon emissions

against our FY20 baseline year.

Overall, we have achieved the target

emissions for our science-based

target.

As the drop in Currency production

in FY24 was a significant contributing

factor towards this reduction, we

expect our emissions to increase for

the upcoming year as we anticipate

our Currency production volumes

will increase in FY25. We will

continue to review our science-

based targets in FY25 as part of a

periodic review process.

We have also seen a sustained

reduction in the total Scope 1 and 2

(market-based) gross normalised

emissions, which have seen a

decrease of 19% from 32.93 to 26.65

tCO

e per £m revenue in FY24

compared to FY23. This provides

reassurance that even accounting

for the drop in Currency production

volumes, we have still seen a

sustained reduction in our

greenhouse gas emissions.

We saw a significant decrease in our

total Scope 3 emissions, which fell

by 52% overall in FY24 compared to

the prior year. This was primarily

driven by a 50% reduction in

Category 1, Purchased Goods and

Services, as a result of a 28%

reduction in spend corresponding to

observed drop in Currency

production in FY24.

Scope 3 Categories 3 (fuel and

energy related activities) and 12

(end of life of sold products) also fell

largely driven by volumes. Due to

new evidence, the methodology

used for calculating Categories 4

and 9 (upstream and downstream

distribution and transportation)

emissions were updated, and there

was an overall 70% reduction in

emissions for these categories due

to a decrease in overall freight

correlating with Currency

production.

Overall in FY24, Scope 3 emissions

have reduced by 44% against our

FY20 base year, bringing us within

reach of our Scope 3 science-based

target. However, similar to Scope 1

and 2 emissions, we expect our

Scope 3 emissions to increase in the

upcoming year due to the

anticipated increase in production

volumes. We continue to focus on

our Scope 3 emissions, working

closely with our suppliers, partners

and customers to reduce our impact

on the environment. Our

engagement with our targeted

suppliers in the EcoVadis

programme remains key to our work

to better understand and improve

our Scope 3 emissions.

Carbon neutral by 2030

(tCO

20262025 2027 2028 2029 2030202420232022

Carbon

Emissions tCO

-10,000

-5,000

5,000

10,000

15,000

20,000

Scope 1 and 2 Target Emissions tCO

e Actual Emissions tCO

e Offset % tCO

Scope 1 & 2 emission/floor area

(kgCO

e/m

)

20242023

2022

0.0

0.08

0.10

0.06

0.04

0.02

0.12

Floor area is inclusive of our Westhoughton and

Malta expansions. In FY24, we have made a 28%

reduction against FY23. This is primarily due to

dynamic changes within the business in addition

with implemented energy efficiency measures.

Scope 1 & 2 emission/output

(kgCO

e/tonne)

20242023

2022

0.00

0.60

0.40

0.20

0.80

In FY24, we saw a 10% reduction in this metric,

following the correction of an operating

inefficiency in Westhoughton.

30 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

CDP Climate Change

De La Rue has achieved a score

of A- on our 2023 CDP Climate

Change Questionnaire, reaching

leadership status (A and A-

scores). De La Rue is committed

to being transparent in terms of

climate disclosures and we will

continue to demonstrate our

leadership in addressing climate

risks and our contribution towards

a low carbon future through

the CDP.

Our higher energy efficiency Regenerative

Thermal Oxidiser in the Westhoughton

site, which will reduce gas usage by an

additional 30%.

Sustainable consumption

Sustainability is the ability to exist

and to develop solutions that

conserve resources for the future.

We recognise the importance of

sustainable consumption to improve

resource efficiency and to work with

nature. From small scale actions,

such as the installation of bird

feeders at our Westhoughton site, to

larger scale initiatives to reduce

waste to landfill across all our sites,

De La Rue’s targets are aligned with

our ambitions to reduce our impact

on nature. This is underpinned by our

environmental management system,

certified by ISO 14001:2015 and our

strong track record on environmental

compliance, evidenced by De La Rue

achieving zero major environmental

incidents in the past five years.

Waste management

We have responsible waste

management practices throughout

the Group and will always look for

the most sustainable end of life

treatment for our waste. We have set

a target of zero waste to landfill by

2030. For FY25, we intend to map

our various waste streams and

evaluate the current end-of-life

treatment options to identify

improvements. This evaluation will

help De La Rue to develop long-term

targets for waste management and

to identify potential waste efficiency

measures in our operations. For

further detail on De La Rue’s

progress against our short-term and

medium-term waste targets please

see page 35.

Solid Waste per Good Tonne of

output against FY23

-13%

Water

De La Rue has monitored and

reduced water consumption

throughout the past six years.

Water-related risks and

opportunities are assessed under

the Sustainability and Climate

Change principal risk, and water

scarcity has been identified as the

key climate-related risk for

De La Rue (see page 34). We

consider effective water

management a priority and have

achieved our short-term targets on

water reduction. We are also looking

to improve our score of C on the

CDP Water Security questionnaire.

For more information on water-

related targets and progress please

see page 35.

Single use plastics

We are ensuring the packaging used

for our products is sustainable and

aligned with our responsible

consumption practices. Polymer

banknotes are inherently reusable,

and as described on pages 28 & 35,

De La Rue is committed to reducing

the plastic waste generated in our

operations.

31 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Taskforce on Climate-related Financial Disclosures (TCFD)

De La Rue supports the recommendations of the TCFD, which was established by the Financial Stability Board with the aim of improving the reporting of climate-related risks and opportunities.

De La Rue has publicly declared support for the TCFD recommendations and has joined the TCFD Supporters Group to work with like-minded organisations, acknowledging that climate change

represents a financial risk.

In meeting the requirements of Listing Rule 9.8.6.R, we have concluded that we are aligned with recommended TCFD disclosures regarding governance, strategy, risk management and metrics

and targets. We acknowledge that there is an ongoing action for De La Rue to improve our alignment with the TCFD recommendations as we refine our approach on Climate Scenario Analysis

(CSA), with a focus on delivering insight for our internal and external stakeholders. We aim to improve the integration of the financial impacts of climate-related risks and opportunities into future

strategic reports.

Pillar

Recommended

Disclosures Compliance Status Alignment Reference

Governance a) Describe the Board’s oversight of climate-related risks and opportunities. Full Included in this report Page 33

b) Describe management’s role in assessing and managing climate-related risks

and opportunities.

Full Included in this report Pages 33 – 35

Strategy a) Describe the climate-related risks and opportunities the organisation has

identified over the short, medium, and long term.

Full Included in this report Pages 34 – 35

b) Describe the impact of climate-related risks and opportunities on the

organisation’s businesses, strategy, and financial planning.

Full Included in this report Pages 34 – 35

c) Describe the resilience of the organisation’s strategy, taking into consideration

different climate-related scenarios, including a 2°C or lower scenario.

Full Included in this report Pages 33 – 35

Risk management a) Describe the organisation’s processes for identifying and assessing climate-

related risks.

Full In this report we outline the process and framework

for identifying and assessing climate-related risks,

also linking out to our wider risk management

framework.

Pages 33 – 35

and 56 – 57

b) Describe the organisation’s processes for managing climate-related risks. Full The Risk Committee reviews the mitigations and

controls relating to climate risks.

Pages 56 – 57

and 60

c) Describe how processes for identifying, assessing, and managing climate-related

risks are integrated into the organisation’s overall risk management.

Full Climate risks are managed through De La Rue’s

enterprise risk management framework. Risks are

monitored and reported to the Audit & Risk

Committees.

Pages 56 – 57

and 60

Metrics and targets a) Disclose the metrics used by the organisation to assess climate-related risks

and opportunities in line with its strategy and risk management process.

Full Included in this report Page 35

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)

emissions, and the related risks.

Full Included in this report Page 29

c) Describe the targets used by the organisation to manage climate-related risks

and opportunities and performance against targets.

Full Included in this report Page 35

Environment continued

32 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Governance

The Board has overall accountability

for the management of all risks and

opportunities, including climate

change. Further detail on our ESG

and Risk Management governance

structure can be found on pages 25

and 57. While the Board has overall

accountability for climate change-

related matters, the Chief Executive

Officer, Clive Vacher, was the

Director responsible for our climate

change agenda during the year

under review.

The Board delegates specific climate

change matters to the following

Board committees:

– Audit Committee: oversees the

monitoring and reviewing of our

internal control and risk

management systems including a

synopsis of material risks

including climate change related

risks from the Risk Committee

Chair. This includes reviewing the

scope and results of any internal

and external assurance activities

obtained over the disclosures

(see page 84).

– Risk Committee: oversees the

identification, evaluation and

monitoring of climate-related

risks. This includes reviewing the

mitigations and controls relating

to those risks (see page 91).

– Remuneration Committee:

oversees the remuneration policy

and supports the alignment of De

La Rue’s incentive plan with our

climate-related metrics and

targets (see page 94).

Scenario Temperature Rise Equivalent Scenario Descriptions

Intergovernmental Panel on Climate

Change (IPCC) Representative

Concentration Pathways (RCP) 8.5

3.5˚C – 4.5˚C High emissions and disorderly transition

Emissions continue to rise without intervention

from current rates.

International Energy Association

(IEA) Net Zero by 2050

Well-below 2˚C Low emissions and orderly transition

Rapid and persistent transition to a zero-carbon

future.

The Board is supported by the

Executive Leadership Team (ELT)

and the Group Health, Safety and

Sustainability Committee (GHSSC).

In FY24, the ELT discussed key

strategic sustainability matters in its

monthly meetings with climate

subject matter experts invited to

discuss progress against our climate

targets and agenda. The GHSSC

oversees progress against key

sustainability obligations and targets

including compliance.

Executive remuneration for the

Executive Directors and senior

managers is set by the Remuneration

Committee. Changes to the Annual

Bonus Plan (ABP) in FY24 resulted in

ESG metrics accounting for 10% of

the weighting attached to the ABP.

Further details can be found on

pages 95 – 97.

Strategy

We have ambitious and clear

near-term carbon reduction targets

aligned with achieving net zero by

2050. Our three key areas of focus,

carbon, energy and energy

efficiency and sustainable

consumption and nature solutions

will ultimately support our journey to

net zero. In addition, they reflect

climate-related risks and

opportunities identified for the

business.

Climate scenario Analysis

De La Rue’s risk management

framework helps us to assess

manage, monitor and act on risks,

including Sustainability and Climate

Change which is one of our

principal risks. We review our

climate-related risks and

opportunities over medium, and

long-term time horizons. We do

that in line with our risk

management framework and

financial planning process

referenced in our viability

statement (pages 64 – 68). In line

with our financial planning process

and due to the nature of climate

risks, we have considered the

following time periods for our

analyses – short term (within 3

years), medium term (between 3 to

10 years) and long term (greater

than 10 years).

In alignment with the TCFD

recommendations, we have

conducted qualitative scenario

analyses using two scenarios,

including a well-below 2°C. In

developing the scenario analysis, we

considered a well-below 2°C

scenario by 2100 and a 4°C by 2100

scenario to map the potential

financial impacts of climate change

on our business. In developing our

scenario analysis, we took the two

pathways and considered a range of

risk and opportunity types using the

TCFD framework. We used these two

scenarios to model a simple and

discrete narrative where a well-

below 2°C would primarily model

transition risks and a 4°C scenario

physical risks, with no significant

transition risks assumed. For FY25,

we will develop more robust scenario

analyses to better evaluate and

quantify our risks and opportunities.

Risks were evaluated as transition

(market, technology, policy and

legal, reputation) and physical

(acute and chronic). Opportunity

types considered include resource

efficiency, resilience and

innovation. The scope of our

assessment included our

operations, our supply chain, our

products, and investment in

research and development. Below

we have summarised our key

climate-related risks and

opportunities relevant to

De La Rue’s business and activities

for both scenarios. All the risks

noted below are applicable to

both our divisions unless stated

otherwise. These risks and

opportunities were identified

through group forums and

discussions with De La Rue

internal stakeholders and subject

matter specialists. The impacts

are not listed in order of

significance, nor are they meant to

be exhaustive. In disclosing the

financial impact of risks and

opportunities, any assessment is

scenario based and thus should

not be considered as a financial

forecast.

33 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Risk

Risk Type of Risk Time Horizon Financial Impact Mitigation and Adaptation

Embedding climate

action and

progress into

strategy

Transition

– Reputation

Short term As a listed company, De La Rue could face reputational risks related to

climate change from a variety of stakeholders. As ESG and, in particular,

climate action become embedded within financial disclosures, a

perceived lack of action could lead to divestment from De La Rue.

Certain customers may choose to limit or stop work with the Group if

they perceive us as not adequately addressing climate change. This

may impact revenue and brand perception. In addition, our ability to

source external finance may be impacted.

With Sustainability and Climate Change as one of our principal risks, we have

implemented several actions to build resilience including science-based targets.

Opportunities arising from demonstrating our climate commitments include the ability

to improve our brand image, attract a wider talent pool, and retain current employees.

Increased scrutiny

on plastic

(Currency)

Transition

– Market

Medium

term

There has been increased global focus on plastic and more specifically

single-use plastics.

A potential risk is the crossover of lobbying action against plastic into

adverse comment in relation to polymer banknotes which is a core

aspect of our business. This may result in a loss of orders and limited

market interest which is likely to impact our revenue figures.

Polymer banknotes have been proven to have a lower carbon footprint compared to

conventional paper banknotes and are also increasingly secure, making them a desirable

option for our customers. Furthermore, it is rare for banknotes to be discarded

extensively and as a polymer product, these banknotes have multiple recycling options.

With each polymer banknote launch, De La Rue has worked with central banks and

issuing authorities to develop public education programmes on the benefits of polymer

banknotes. In a recent survey conducted by De La Rue, 82% of the world’s polymer

banknotes are recycled.

Less visibility on

future trends

Transition

– Market

Medium

term

A rapidly changing market which responds to new climate legislation

and changes in consumer behaviour may lead a move to shorter-term

contracts or more stringent contractual provisions.

As a result, De La Rue may find medium-term planning becomes harder

as change requests may come more frequently. Decreased visibility of

demand may also reduce our ability to reflect any changes in the

production schedule which may lead to increased costs.

A significant proportion of our contracts or relationships are long term, enabling us to

predict cost models and reduce the impact of any short-term contracts. In addition, we

actively engage with our suppliers to ensure fair pricing in our contracts.

Cotton shortage

driven by water

scarcity (Currency)

Physical

– Acute/

Chronic

Short term De La Rue continues to promote the growth of polymer banknotes.

However, conventional paper banknotes are still a significant part of the

business. Cotton is the principal raw material used for paper banknotes.

Extreme weather and extended droughts resulting in water scarcity are

likely to have a significant effect on cotton production resulting in crop

output decreases. This will increase the costs associated with

purchasing cotton which is likely to affect De La Rue given the likely

knock-on impact on the price of paper.

De La Rue has built relationships and engaged with multiple paper suppliers that are

geographically diverse. This will help De La Rue to mitigate the impacts of any future

cotton shortages.

Customer

expectations for

lower carbon

intensive products

Transition

– Market

Short term As the world transitions to net zero, there will be increasing demand to

lower the carbon intensity of products. This may lead to revenue loss as

inaction could make De La Rue’s products undesirable. In addition, slow

action would require rapid investment which would lead to higher costs

for De La Rue.

De La Rue considers the impact of our products as one of our key areas of focus. We

have multiple projects aiming to reduce our product carbon footprint.

In addition, our SBTi targets have increased focus on decarbonising the business and we

are defining our strategy to transition into a low carbon future.

Environment continued

34 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Opportunities

Opportunity Type Time Horizon Description

Products and

services

Medium term Reducing the carbon footprint of our

products and activities will help

De La Rue transition into the zero-carbon

economy. For example, the switch to

polymer from paper banknotes allowed

De La Rue to offer a more environmentally

friendly option. Polymer banknotes have

been proven to have a longer lifecycle

and are able to be recycled at end-of-life.

By developing our product Life Cycle

Assessments we are investing in an

opportunity to understand the carbon

impact of our products and subsequently

to lower our footprint.

Resilience Short/Medium

Term

Building resilience as we transition to the

low carbon economy is vital. This is why

De La Rue has submitted science-based

targets to reduce our carbon footprint

and lower our impact. We expect this will

come with an associated cost and as

such we are reviewing our trajectory and

aligning it with our financial planning for

FY25 and beyond.

Metrics and Targets

Our short- and medium-term climate metrics and targets are as follows:

Themes Target Performance to date

Carbon SBTi near-term targets, Scope 1, 2 & 3

-46.1% against FY20 base year by FY30

See page 29 for details of our performance in FY24.

Reduce Scope 1 & Scope 2 by 23%

against FY20 base year by FY26

See page 29 for details of our performance in FY24.

Suppliers accounting for 80% of total

procurement spend to be invited to

complete/share an EcoVadis scorecard

In FY24, we have engaged with 75% of our targeted suppliers on

EcoVadis and we currently have 50% of our key supplier spend

accounted for on the platform. This is the first year of reporting on

this target.

Energy and

energy

efficiency

Reduce absolute energy use by 20%

FY26 vs FY20 base year

We achieved a 27% reduction in FY24 against our FY20 base year.

This was a result of dynamic changes within the business which has

affected our overall energy consumption. We believe this target is still

fit for purpose as operations continue to stabilise. This is the first year

of reporting on this target.

10% Group power use from onsite

renewable sources by FY27

Solar panels at our Westhoughton site currently generate roughly

100,000 kWh per year. We are looking to increase our use of solar both

in the UK and overseas. This is the first year of reporting on this target.

Sustainable

consumption

Reduce waste to landfill by 45% by

FY26 against FY23 baseline. (Zero waste

to landfill by 2030)

We saw a 7% decrease in waste to landfill in FY24 against our baseline

FY23 baseline year. This is our first year reporting on this target.

Solid waste tonnes per tonne of

good output -3% by FY24 against

FY23 performance

We have hit our SWKPI target and will continue to monitor our waste

intensity target in FY25. SWKPI is our intensity target for waste. Our

performance to date is as follows: FY22: 0.24, FY23: 0.24, FY24: 0.23.

Reduce water consumption by 4%

by FY24 against FY22 baseline

We achieved this target in FY24. De La Rue first started reporting on

this metric in FY23. We reported a 16% decrease in FY23 and in FY24

we has a 19% decrease in total water consumption. In FY25, we will be

carrying out water audits for all our manufacturing sites and will be

looking to establish a new water consumption baseline in FY25.

In FY23, De La Rue conducted a review

of all our reporting performance

indicators and targets to assess their

suitability for the business. The targets

for FY24 detailed in the table above

align with our key areas of focus:

carbon, energy and energy efficiency

and sustainable consumption and

nature. These targets are aligned

with the climate-related

opportunities outlined on this page,

and specifically, our carbon

reduction targets have been

designed to build resilience as we

transition to a low-carbon economy.

Our progress against our medium-

term targets will be monitored in

FY25, and we will also be setting new

short-term targets in the upcoming

financial year. Our GHG emissions

including Scope 1, 2 and 3 emissions

for FY23 can be found on page 29.

In FY24, De La Rue has used an

internal carbon price of $50 per

tonne of carbon which is primarily

used to evaluate internal projects

from a carbon perspective. Changes

within the business and our carbon

reduction targets warrant this review

to inform future Group strategy.

We believe the targets we have set

are correct for the Group and have

captured the key strategic goals

including reducing the carbon and

environmental impact of our

products. Regarding our long-term

carbon reduction target, we are

aligning ourselves with achieving

net zero by 2050, or before, in line

with the UK Government’s target.

We continue to develop our

pathways to achieve these goals.

Next steps

For the year under review, De La Rue

has evaluated our climate-related

risks and opportunities and has

determined that our strategy is

aligned with the above. We are

currently unable to determine the

full financial impact on the business

of our sustainability strategy.

However for FY25, we will look to

understand further our exposure to

climate-related risks and

opportunities.

Risk Management

The Risk and Risk Management section

on pages 56 to 63 describes our risk

framework and how we identify,

assess and manage all principal risks.

This includes sustainability and

climate-related risk as mentioned

previously.

Methodology

– Greenhouse Gas (GHG)

Emissions: see page 29

– Energy: total energy consumption

from manufacturing sites

including Gateshead and Head

Office.

– Waste to landfill: tonnes of waste

sent to landfill.

– Water consumption: total water

consumption from manufacturing

sites including Gateshead and

Head Office.

35 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Our Supplier Code of Conduct,

which was re-issued in FY24 to align

it more closely to our Code of

Business Principles, also defines the

human rights standards that we

require our suppliers to uphold

within our supply chain. See page 40

for further information.

The business has remedial

processes in place should there be

any human rights infringements.

These include claims procedures,

trade union engagement procedures,

and rights to immediately exit

supplier relationships if human rights

infringements are found within our

supply chain.

Further information outlining our

approach to specific human rights

matters is detailed below.

Modern slavery

De La Rue directly employs around

1,600 people and provides

livelihoods to thousands more

indirectly. We are committed to

preventing slavery and human

trafficking in our operations and in

our supply chain. Our modern

slavery statement, available on our

website, details the preventative

steps we take and how we comply

with the UK Modern Slavery Act

2015. Modern slavery training is

mandated for relevant employees.

Suppliers are obliged to abide by the

United Nations Convention on the

Rights of the Child and International

Labour Conventions 138 and 182.

Our supplier onboarding process

considers modern slavery risk.

Human rights

De La Rue fully supports the

principles set out in the UN

Declaration of Human Rights and we

have effective management systems

in place to protect human rights.

De La Rue has been a participant in

the UN Global Compact (UNGC)

since 2016 and is committed to its

principles which include human

rights and labour issues.

De La Rue’s Human Rights Policy

Statement, which is published on our

website, confirms our commitment

to fair pay and working conditions,

freedom of association and

collective bargaining, the elimination

of forced, compulsory and child

labour, health, safety and wellbeing,

our expectations of our suppliers

and ways to raise concerns.

Our Code of Business Principles covers

human rights issues including fairness

and respect, modern slavery,

employment principles, health and

safety, anti-bribery and corruption and

the protection of personal information.

The Code also highlights that we seek

to provide an environment where

employees can raise any concerns via

a variety of mechanisms, including a

whistleblowing hotline, known as

CodeLine, which is managed by an

external third party, and a network of

Ethics Champions across the Group

so issues can be raised in confidence.

We are committed to creating a culture of respect and

inclusivity for every individual who works within our

business, prioritising their health, safety, wellbeing and fair

treatment. Meaningful engagement with our employees,

customers, suppliers and investors – as well as the

communities in which we operate – enables us to react

and respond to their needs and feedback.

People

36 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Diversity, equity and inclusion

Our principle of Be Heard. Be Valued.

Be You provides the framework of our

DEI activities across the Group. Our

Values and People Managers’

Charter outline our expectations of

all employees and managers and

these behaviours are measured

through our performance

management and recognition

processes. We continue to promote

diversity in all respects through

proactive initiatives including training,

awareness and continued robust

recruitment, succession and

development practices. For example,

we use a calibration process to

ensure that talent and performance

are carried out and reviewed fairly

and transparently. In addition, all

recruitment is managed through a

central recruitment system and

interview panels must always be

made up of at least two people to

remove discrimination from the

recruitment process. We are

confident that the measures we

have in place will help us to continue

to make De La Rue a place where

differences are embraced and allow

us to explore additional ways of

improving our working practices.

We regularly review our policies to

ensure they are written in an

accessible way and we maintain

global Inclusivity and Fairness and

Respect policies. Our family-friendly

policies will continue to be reviewed

and updated and we have taken

steps to ensure that we offer health

and wellbeing services that support

us in promoting diversity in all its

forms. External benchmarking such

as that done by EcoVadis helps us

identify our strengths and areas for

improvement.

While legislation in many countries

prevents us from asking candidates

for diversity data, the UK data that

we collect tells us we attract a broad

range of people across different

diversity types including age,

ethnicity and beliefs and we

continue to look for opportunities to

improve our recruitment and

retention practices. We have also

started to ask UK employees to

provide us with their diversity data

and pronouns on a voluntary basis.

We receive positive feedback about

our internal communications

activities focused on wellbeing and

inclusivity. We recognise the benefits

to employee wellbeing that inclusive

practices can have – a place they

can bring their whole self to work.

We celebrate a wide range of cultural

events throughout the year with the

input and support of our colleagues.

For example, our sites marked both

International Men’s Day in November

2023 and International Women’s Day

in March 2024 by sharing stories of

men and women they are proud of.

As at 30 March 2024, the male/

female gender split across the

organisation was 70/30 (versus a

target of an average male/female

ratio of 70/30 or better by FY23) and

in management the split was 67/33

(against a target of 60/40). We

continue to work on initiatives to

support the achievement of our

gender targets.

Our employees are treated fairly and

equally, irrespective of any factor

including gender, transgender status,

sexual orientation, religion or belief,

marital status, civil partnership

status, age, colour, nationality,

national origin, disability or trade

union affiliation.

UK gender pay gap

We publish information in line with

our obligations under UK Equality

Act 2010 (Gender Pay Gap

Information) Regulations 2017.

Since 2017, any UK organisation that

has 250 or more employees must

publish and report specific figures

about their gender pay gap on an

annual basis.

The gender pay gap is the difference

between the average earnings of

men and women relative to men’s

earnings.

Since we began reporting our

Gender Pay Gap in 2018, we have

seen a general improvement,

attributed primarily to a healthy

increase in the number of female

appointments to our more senior

roles and a continued focus on

increasing the number of women in

managerial positions. However, since

our last Gender Pay Gap report

published in 2023, De La Rue has

undergone organisational changes

and headcount reductions within our

UK operations, and this has had the

effect of a marginal widening of the

gap versus last year.

In 2023, our Gender Pay Gap (based

on a snapshot of data taken at 5

April 2023) sat at 7.3% (mean) and

11.7% (median). We are confident that

the reasons behind this increase in

the gap versus 2022 are not a

worsening of the absolute position

of pay between women and men

and we continue to see lower gaps

than those reported in the wider

Manufacturing industry, 11.2%

(mean) and 15.9% (median) (ONS,

2023). The full Gender Pay Gap

report can be found on our website,

www.delarue.com

A full breakdown of our workforce

by gender can be found below:

Gender diversity statistics at 30 March 2024

Female % Male % Total

All employees 497 30% 1,133 70% 1,630

Management¹ 84 33% 168 67% 252

Senior Managers² 23 48% 25 52% 48

Executive 2 33% 4 67% 6

Board 1 14% 6 86% 7

All employees

70%

1,133

30%

497

Management¹

67%

168

33%

Senior Managers²

52%

48%

Executive

67%

33%

Board

86%

14%

Female

Male

Notes:

1. All managerial employees including senior managers but excluding executives.

2. Includes executive management.

37 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Securing trust:

Employee engagement

and culture

We continue to focus on regular

engagement with our employees.

We share regular business updates

at Group, divisional and site level

and provide many opportunities

for two-way communications with

our employees.

Many of our sites run local

employee groups to talk about what

matters to them and to organise

internal events. Examples of this

include our Forum in our head

office in Basingstoke; our Employee

Involvement Group in our Debden,

UK site; the ACE (Activities, Culture

and Engagement) teams in Logan,

USA and Dubai, UAE and the Malta

site Sports & Social club.

These groups organise a variety of

events often centred around health

and wellbeing and social events

ranging from fitness challenges to

billiards tournaments and on-site

gardening time to create outdoor

spaces in which employees can

relax.

Activities often support and

benefit the local community. See

Charitable and community

activities section on pages 40 to 41

for more information.

During the year, Clive Whiley took

over from Catherine Ashton as our

Non-executive Director

responsible for workforce

engagement and attended an

‘Employee Voice’ meeting with our

Sri Lanka site workforce.

Our UK National Employee Forum

and European Employee Forum

meet regularly with senior leaders

to discuss company matters.

These forums represent the views

of all employees, whether covered

by a collective bargaining

agreement or not. All available

executives and relevant subject

matter experts attended the

Forums’ joint annual meeting in

July 2023 and the UK Forum in

December 2023. Information from

these meetings is then cascaded

through the organisation. At our

December meeting,

representatives received Mental

Health Awareness training to help

support the wellbeing of their

colleagues and themselves.

We are extremely grateful to all our

employees and in particular our

representatives who give up their

time alongside their day jobs to

show their commitment to

constructive engagement.

Health, safety and wellbeing

Occupational health and safety

Throughout FY24, we continued to

prioritise the health and safety of our

workforce. Our main manufacturing

sites are certified to ISO 45001:2018,

the international standard for

occupational health and safety

management systems, and all sites

are audited by our accredited

provider annually. We ensure all our

health and safety processes are

robust and meet our responsibility

to keep our employees and everyone

visiting our sites safe and secure.

This is done through clearly defining

responsibilities, good

communication and training, risk

assessment and the implementation

of appropriate controls. We continue

to track several key metrics

regarding health and safety, including

governmental reportable accidents,

lost time accidents, near miss

reporting and corrective actions.

This takes place alongside proactive

measures such as HSE training,

compliance to our Safe, Secure, and

Sustainable inspection programme

and by providing specific health and

safety training for managers and

supervisors and performance

against FY24 health and safety

objectives.

All significant incidents are reported

monthly to the Executive Leadership

Team to support and agree any

corrective actions required. During

the year we have continued to

undergo major development and

changes at our Malta site, and we

have had no significant incidents

resulting in harm (injury or ill-health)

to our employees.

People continued

Performance against FY24 health and safety objectives

Objective Outcome

Zero lost time to accidental injuries

and a lost time injury frequency rate

(LTIFR) per 200,000 worked hours of

≤0.40 over 12 months.

Achieved. Our end of year LTIFR rate

outcome is 0.19; globally we had three

lost time accidents. Severity of these

lost time accidents was reduced

compared to the previous year.

Ensure that ≥80% of all operational line

managers and process leaders are

trained to IOSH Managing Safely level,

or an equivalent or higher qualification

within 12 weeks of starting a new role.

Not achieved. Due to many operational

changes the percentage of managers

and process leaders trained or holding

certified qualifications (within 12

weeks) has averaged 72% within the

last 12 months.

Increase the number of reported near

miss/my safety concerns and achieve

a five-day closure rate of ≥85% at all

facilities.

Achieved. The near-miss closure rate

has exceeded the set target, 86% on

average over the full year.

Achieve a ≥90% compliance to our

area Safe, Secure and Sustainable

inspection programmes.

Not achieved. Compliance to this

programme has again run at an average

of 85% over the year due to a

significant number of operational

changes and various headcount

reductions on some sites.

Achieve good HSE training delivery

performance of over ≥1,370 8hr person

days per year.

Achieved. We have achieved this HSE

training target (1,402 days) without

factoring in employee headcount

reductions.

FY25 health and safety objectives

Objective

Zero lost time accidental injuries and to achieve a lost time injury frequency rate

(LTIFR) per 200,000 worked hours >= 40% below the UK Labour Force Survey

average calculated LTIFR rate.

Maintain our operational manager and supervisor IOSH Managing Safely (or

equivalent or higher qualification) training at over 80% within 12 weeks of starting

a new role.

Improve our near miss/my safety concern reporting to an average of at least 1.5

near misses per employee, with a five-day closure rate of ≥85% at all facilities.

Conduct a review of our Safe, Secure, and Sustainable inspection programmes

with a view to achieving 90% compliance at all sites.

Ensure that at least 90% of our employees have completed HSE training, and

continue to develop and roll out environmental awareness training.

38 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Wellbeing

Wellbeing support is widely available

in all our sites and we monitor and

compare what we offer between

sites to ensure levels of support are

comparable.

In the past year, across different

countries, we have provided

information and support on a broad

range of topics including men’s and

women’s health, musculoskeletal

health, neurodiversity and financial

wellbeing.

We offer free services such as flu

vaccines, health check-ups and

access to GP and occupational

health services as well as

comprehensive Employee

Assistance Programmes.

Where possible, we offer hybrid

working to give employees flexibility

to their working hours and location

and accommodate requests for

different working patterns as much

as we are able to whilst meeting

business requirements. Our family-

friendly policies offer different types

of leave for those with caring

responsibilities.

In parallel, we encourage our

employees to come together

regularly to collaborate, support

each other and spend time socially.

All our sites have accredited Mental

Health First Aiders (or equivalent,

where this exists) and we ensure

they receive regular training and

support.

Training and development

We provide all employees with

access to our Learning Management

System (LMS) covering an array of

both mandatory and optional

learning and development materials.

This gives employees the

opportunity to access content that

aligns with their learning styles and

preferences.

Employees and managers hold

development conversations as part

of our performance management

process. We encourage all

employees and their managers to

create personal development plans

which are recorded in our HR system

to agree and capture what training is

required and our in-house learning

and development team can then

support these requests.

We continue to deliver virtual

classroom and face-to-face

workshops such as storytelling and

Insights.

We encourage the use of the

apprenticeship levy for both

continuous professional

development and for building skills

and capability across all sites in the

UK, covering areas such as

professional coaching, software

development, finance, project

management and IT.

We have recently launched a

comprehensive training programme

to support our people managers and

leaders.

– Constructive negotiations with

UNITE in relation to our

Westhoughton site which

concluded with an agreed

two-year Pay Deal for our

collectively bargained

employees in Westhoughton.

– Attendance from UNITE UK and

General Workers Union external

officials at our annual UK

National and European Employee

Forum meeting in July 2023.

Raising concerns

We encourage our employees to

speak up about any concerns

regarding behaviours or business

practices. Internal reporting via line

managers, senior management,

Ethics Champions or our Human

Resources teams are encouraged,

and our CodeLine whistleblowing

service, operated by an

independent third party, is available

for all employees to use, and giving

them the opportunity to report

anonymously. Regular

communications are issued

regarding the importance of

speaking up about ethical issues

and how to do so, as well as

ensuring posters are on display at

sites to ensure awareness of the

service is maintained. Further

information about the service can

be found in the Ethics Committee

report on pages 92 – 93.

Working with our unions

We maintain strong and productive

relationships with the unions in the

countries where we have

manufacturing operations and in

FY24 we recognised the following

unions: UNITE (UK), General Workers

Union (Malta), and De La Rue Branch

– Internal Company Employees

Union (Sri Lanka).

Overall, around 56% of our

employees globally are part of a

Collective Bargaining Agreement.

During the year, some of the key

areas where we worked closely with

our unions were:

– Consultation in our Debden and

Westhoughton sites to reduce

headcount and align shift

patterns to meet changing

business requirements reflecting

external market demand.

– Successful negotiations in relation

to a revised Collective Bargaining

Agreement in Sri Lanka and Malta,

resulting in a two-year deal for

both sites.

– Successful negotiations with

UNITE securing a Pay Award for

our Debden collectively

bargained employees, updated

Collective Bargained Agreement

and Terms of Employment.

A summary of the key training courses that we offer to employees is

shown below:

Topic Training delivered to

Code of Business Principles all employees

Anti-Bribery & Corruption employees in relevant roles

Gifts & Hospitality employees in relevant roles

Sanctions employees in relevant roles

Modern Slavery employees in relevant roles

Fair Competition employees in relevant roles

Information Security Awareness employees in relevant roles

Security Awareness site dependent

Corporate Travel and Travel Risk

Management

employees in relevant roles

Business Continuity Awareness employees in relevant roles

Storytelling open to all

Insights discovery open to all

Management Fundamentals all people managers

39 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

External stakeholder

engagement

Engagement with our customers,

suppliers and investors, as well as

the communities in which we

operate, is crucial to the success of

our business. Some of the ways we

interact with them are summarised

below.

Investors

The Board values the importance of

building strong relationships with

shareholders and other investors.

We have held roadshows with our

investors following full and half year

results where the Chairman, CEO and

CFO meet significant shareholders

alongside other engagement on a

case by case basis. We have also

held regular review meetings with

members of our banking syndicate

through the year.

Further detail can be found in the

Section 172 statement on pages 21

– 23 and in the Corporate

Governance report on pages 76 –

77.

Customers

De La Rue maintains close contacts

with many of our business,

government and central bank

customers, frequently updating

them on our latest news,

developments and initiatives. Our

relationships frequently go back over

decades and in-person interactions

are supported by digital marketing

activities, such as social media,

webinars, newsletters and the

delarue.com website.

A multi-tiered approach is taken

towards customer needs. Our

advanced cash cycle analytics

platform contains comprehensive

data and models to help inform the

strategies of currency issuing

authorities. Our design workshops

involve deep immersion in the

cultural and functional needs of an

individual cash cycle. Our scientists

and designers co-collaborate with

customers on specific projects.

Structured surveys, such as net

promoter score, and voice-of-the-

customer interviews are carried out,

feeding into Market Requirements

Documents and product portfolio

considerations. Account

management and support team

feedback is also regularly captured

and used across the business.

This year, we have incorporated

additional analysis from third party

market research experts, helping to

optimise further our customer

service and approach to our

markets.

The various interactions happen

virtually, via territory visits, via visits

to De La Rue sites and at a range of

conferences. These include our own

events, for instance webinars

featuring customers sharing the

impact of their brand protection

solutions, and the launch of new

products such as the ASSURE™ level

3 taggant for the core of

SAFEGUARD® polymer substrate,

along with the ‘Explorer’

polycarbonate biodata page with

world-leading security features. In

Authentication the inside sales team

engages with our loyal, existing

customer base on a weekly/monthly/

quarterly basis as appropriate to

ensure they are receiving the right

support, they know who to speak to

and they are aware of De La Rue’s

solutions. This year, we have also

enhanced our due diligence systems

and procedures, building a much

deeper and broader understanding

of our customers and supporting our

relationship building with strong data.

Suppliers

We have been working in close

partnership with our key suppliers,

including continuing to build our

portfolio of banknote paper

suppliers, to mitigate and manage

the impact of global supply chain

challenges and inflationary

headwinds associated with the

global costs of labour, raw materials

and freight, and supply disruptions

associated with geo-political events

such as disruption to global shipping

routes.

We have continued with our Scope 3

analysis work, recognising this

significant carbon impact, and are

currently engaging with a range of

our key suppliers who collectively

account for 80% of our total

procurement spend across the

business. We have continued to

progress the Ecovadis ESG rating

programme; three quarters of our

identified suppliers have so far been

invited to participate in the

assessment programme. This is

enabling us to drive both improved

understanding and visibility of our

suppliers’ ESG impacts and

sustainability improvements across

our supply chain.

This year, we have also enhanced our

due diligence systems and

procedures, building a much deeper

and broader understanding of our

suppliers and any exposure we may

encounter doing business with them,

supporting our relationship building

with strong data.

People continued

“We share values and

conduct with De La Rue

regarding good

environmental, safety and

governance practices; the

partnership with De La Rue

has contributed to making

our company more

resilient and diversified.“

Renaud Chauffert-Yvart,

Blendpaper (banknote paper

supplier)

40 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Charitable and community

activities

We aim to have a positive impact on

the communities in which our

operations are based, often focusing

on supporting charities of importance

to, and chosen by our employees.

In addition to ongoing support for

several educational initiatives,

examples of charitable activities

around our sites during the year

included:

– Colleagues in our Westhoughton,

UK site held fundraising activities

for cancer charities including

bake sales and a pool tournament

whilst raising awareness of men’s

and women’s cancers.

– The Authentication Commercial

Team from our head office in

Basingstoke, UK volunteered their

time with the Countryside

Regeneration Trust (CRT) in the

South East of England, creating

outdoor activity areas for young

children and a bug hotel to

promote wildlife.

– In our site in Debden, UK

employees collected Easter eggs

which were donated to a food

bank and local charity Kids

Inspire.

– Our Malta site employees

supported a number of local

charities including raising

awareness and collecting

donations for breast cancer.

– In Basingstoke, a group of

employees took part in a running

event to raise money for

Basingstoke Neighbourcare, a

charity which provides support

for older people in the local area.

Several of our employees give their

time voluntarily by serving as

trustees of the De La Rue Charitable

Trust, which is an independent,

UK-registered charity established in

1977 to provide donations to assist in

education development, skills-based

learning, self-sufficiency promotion

and relief from suffering in the UK

and across the world. The Trust

provides donations to charities by

supporting employees who raise

funds through a fundraising

matching scheme, and by making

direct donations to a range of

charities, with a focus on those

supporting causes in developing

nations, educational charities

promoting relevant skills and

international understanding, disaster

funds, and local charities or

community projects.

See to the right images of some of

the charitable activities undertaken

by colleagues during the year:

1 Westhoughton event

promoting men’s health

2 Authentication

Commercial Team

volunteering day

3 Malta breast cancer

awareness event

4 Viables running team

supporting one of our

chosen charities

3 4

41 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Securing trust:

Code of Business Principles

This year, we have completed

the roll-out of the new Code of

Business Principles that was

launched in January 2023. The

Code is available in English,

Maltese and Sinhala to ensure

accessibility for all colleagues.

The new Code is divided into three

sections: Our People, Our Business

Standards and Our Information.

Further details about the subject

areas covered in each section are

shown in the Ethical Framework

graphic on page 43. The Code

includes an ethical decision guide,

scenarios based on each subject

covered, and details on how to

raise ethical concerns.

Every employee has either

attended a training session in

person or completed an online

training module to confirm that

they understand and will adhere to

the Code and will speak up if they

become aware of any breaches.

Our people managers have been

asked to complete a version of the

online training which highlights

their enhanced responsibilities

under the Code.

If an employee is found to have

acted in breach of the Code, the

Group takes appropriate action to

address that breach, including

disciplinary action and ultimately

terminating employment in the

most serious cases. Contractors

and all those acting on our behalf

are also expected to adhere to

these standards.

The Board encourages a culture

of strong governance across the

business. Our ethical credentials

are monitored by the Ethics

Committee, via formal internal and

external audits, and by senior

management review forums.

In addition to the governance

activities described earlier in this

Responsible business report,

further details about the activities

of the Board and its Committees

can be found in the Corporate

Governance section of this Annual

Report on pages 75.

It is vital that we conduct our business with integrity,

honesty and transparency. The risks of unethical conduct

are recognised and managed through a robust governance

and compliance structure, underpinned by our Code of

Business Principles, and comprising internal policies,

process and oversight and compliance assurance

standards.

Business

standards

42 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

De La Rue’s ethical framework

Our people

Health, safety and wellbeing

Fairness and respect

Human rights and modern slavery

Code of Business Principles

Our business standards

Environmental sustainability

Bribery and corruption

Gifts and hospitality

Fair competition

Conflicts of interest

Fraud, tax evasion and money laundering

Sanctions

Our information

Records and reports

Protecting personal information

Confidential information and information

security

Market abuse and insider trading

Inclusivity

Fairness and respect

Modern slavery and human trafficking

Stress management

Human rights policy statement

Group HSE sustainability policy

Occupational health and safety manual

Supporting policies

Anti-bribery and corruption

Competition and anti-trust

Conflicts of interest

Recruitment of Politically Exposed

Persons

Prevention of tax evasion

Gifts and hospitality

Supplier Code of Conduct

Fraud

Group HSE Sustainability policy and EMS

manual

Sanctions

Expenses

Charitable giving

Whistleblowing

Acceptable use of information systems

Data protection

Document retention

Group baseline security manual

Confidential information and dealing

Operational delegation of authority

Securities dealing code

Social media

Global health and safety standards and

monthly reporting

ISO management systems

Safe and Secure audits

Grievance and disciplinary processes

Gifts register

Expenses vetting

Due diligence and third party screening

Third party onboarding processes

Legal department guidelines

Environmental reporting

Global environmental standards

ISO management systems

Compliance declarations

Separation of duties

External monitoring

Procedures for managing confidential &

inside information

Controls over share dealing

Data protection annual returns

Processes Oversight, control and

communication

Training & induction

Benchmarking

CodeLine

ISO certifications

Specialist audits

BnEI accreditation

Internal audit

External audit

Risk reviews

UN Global Compact

SharePoint intranet

Employee surveys

Ethics Committee

Sanctions Board

Responsible business report continued

43 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Ethics champions

The Group’s network of Ethics

Champions ensures that each site

has local support and

representation for Code of Business

Principles matters and continues to

play an integral part in ensuring that

strong ethical values are embedded

across the business. All new Ethics

Champions receive one-to-one

training. Ethics Champions are the

local points of contact for

employees to discuss ethical

matters in confidence. They also

ensure that our Code of Business

Principles and CodeLine service

remain high profile in all our

locations. We seek the views of our

Ethics Champions when

considering any changes and,

where possible, they are involved

with employee inductions to ensure

new starters know who they can

approach with questions around

ethical practices.

Anti-bribery and corruption

We have a zero-tolerance policy on

bribery and corruption and have a

robust framework of polices and

processes to prevent our employees,

contractors, third party partners,

consultants and other representatives

from engaging in bribery or other

corrupt practices. All employees are

made aware of our stance through

their acknowledgement of our Code

of Business Principles and those in

roles which may have a higher

potential exposure to bribery and

corruption risk are required to

complete detailed mandatory online

training every two years.

We have continued to operate an

anti-bribery management system

review board, a forum which is

attended by senior managers from

enabling functions and the divisions.

The role of the forum is to monitor

the continuing suitability, adequacy

and effectiveness of the management

system in light of our changing

internal and external environment as

it relates to bribery and corruption

risk. The activities of this forum are

reported to the Ethics Committee.

Our external ISO37001 (Anti-Bribery

& Corruption) audit conducted in

March 2024 found that the Anti-

Bribery Management System was

greatly improved and our

accreditation was reconfirmed with

no non-conformances.

We have a clear approval process for

gifts, entertainment and hospitality

offered by or given to our

employees. All employees are

required to comply with the gifts

and hospitality policy which requires

all gifts, entertainment and

hospitality above a nominal value

which are given or received to be

recorded on a central gift register.

This register is regularly reviewed by

executive management. Colleagues

who have regular contact with

customers and suppliers are asked

to acknowledge annually their

understanding of and adherence to

our gifts and hospitality policy.

Third party partner sales

consultants (TPPs) and suppliers

We recognise that, as well as our

employees, TPPs who represent us

or act on our behalf around the

world could be exposed to ethical

risks. There is a continuing

requirement for TPPs to undergo our

mandatory anti-bribery and

corruption training programme and

to conduct business in compliance

with our expected ethical standards.

Due diligence is undertaken on all

our TPPs before they are engaged

and this process is refreshed on a

regular basis. TPPs are given regular

training to ensure they remain alert

to potential risks, and we encourage

them to raise any ethical concerns

to us either directly or via our

Codeline whistleblowing service.

We have robust risk management

measures and controls in place,

which have been enhanced this year,

including controls in relation to

remuneration of TPPs, structured

levels of approval required to

onboard or renew agreements

based on their size and risk, and fees

which are based on time and effort

and milestone deliverables to ensure

accountability and transparency.

Activities are monitored through

regular reporting and we ensure that

the remuneration structure does not

incentivise unethical behaviour.

Our Supplier Code of Conduct

clearly sets out the ethical standards

to which we expect our suppliers to

adhere, including in relation to

bribery and corruption and human

rights. We have updated our Supplier

Code of Conduct this year, ensuring

that it is closely aligned to our Code

of Business Principles, and are in the

process of rolling out the updated

Code to all of our suppliers to ensure

that they have a clear understanding

of the ethical standards that we

require them to uphold.

We have continued to monitor our

supplier ethical risk assessment

through the year. Our supplier ethics

management forum which

comprises representatives from the

procurement and ethics leadership

teams meets bi-monthly to discuss

any ongoing or emerging issues, and

to ensure that any risks or issues,

once flagged, are escalated and

resolved to our satisfaction.

Business standards continued

44 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Responsible business report continued

Cyber security and data privacy

De La Rue takes the protection and

security of its internal and customer

information very seriously; the

information security and assurance

team who perform the internal

governance and audit function are

managed independently to the IT

and Service teams to ensure there is

no conflict of interest and clear

segregation of duties. Further

information can be found in the Risk

and Risk Management report on

page 60.

Following continual improvement

activities, which are reviewed by

external experts, De La Rue’s data

protection policies, procedures and

documents have been enhanced to

bring them in line with best practice.

Accreditations and certifications

De La Rue is an accredited member

of the Banknote Ethics Initiative

(BnEI), which was established to

promote ethical business practice in

the banknote industry. The initiative

sets out a robust framework for

promoting high ethical standards

with a focus on the prevention of

corruption and on compliance with

anti-trust law. Members are required

to commit to the Code of Ethical

Business Practice developed in

partnership with the Institute of

Business Ethics. Compliance with

the code is subject to an external

independent audit every three years

which rigorously tests anti-bribery

and anti-trust processes,

procedures and controls against an

audit framework. De La Rue is

accredited at Level 1, the highest

level.

In addition to BnEI accreditation,

De La Rue maintains ISO

management system standards for

anti-bribery (ISO 37001),

occupational health and safety (ISO

45001), environmental management

systems (ISO 14001), information

security (ISO 27001), security

printing (ISO 14298), quality

management (ISO 9001) and

business continuity management

systems (ISO 22301). Our ISO

standards are all certified by a UKAS,

INTERGRAF or international

equivalent certified auditing body.

Further information on the auditing

and scope of each standard can be

found on our website.

Training

Regular, relevant and focused

training is important to support high

standards of business behaviours.

During the period, in addition to

training on our new Code of Business

Principles mentioned above, we

continued our mandatory training

programme, allocating anti bribery

and corruption, competition law,

modern slavery, sanctions, and gifts

and hospitality training to new

joiners in relevant roles. Please see

page 39 for further information on

our training programme. The Ethics

Committee reviews compliance

training completion information.

Tax transparency

It is important that the Group pays

the right amount of tax at the right

time, complying with all relevant tax

laws and regulations in the

jurisdictions in which we do business

while both respecting existing

arrangements or seeking to reach

agreements with tax authorities.

De La Rue’s tax strategy is reviewed

annually by the Board and published

on our website.

Non-financial and

sustainability

information

statement

This section (pages 24 to

45) provides information

as required by regulation in

relation to:

– Environmental matters

including TCFD 27 – 35

– Our employees 37 – 39

– Social matters 36, 44,

– Human rights 36

– Bribery & corruption 44

Other related information

can be found as follows:

– Our business model: 16 to

– Key performance

indicators: 46 to 49

– Non-financial key

performance indicators:

– Risk & risk management:

56 to 63

– Corporate governance: 74

to 79

– Ethics Committee: 92 to

– Directors’ report: 113 to 116

45 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Key performance indicators

We use a

balance of

financial and

non-financial

key performance

indicators to

measure our

performance

Revenue Adjusted operating profit

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Definition

We measure IFRS revenue from each division, less, in

FY21 and before, ‘pass through’ revenue relating to

non-novated contracts following the sales of certain

historic businesses.

IFRS operating profit, less exceptional items and

amortisation on acquired businesses.

Why it is

important

Increasing revenue is the bedrock upon which the

business is able to grow.

This key performance measure of profitability is

followed closely both within the business and

externally.

Performance

Currency revenue fell in FY24, impacted by the

industry downturn during the period. An increase in

Authentication revenue was not sufficient to make up

this shortfall at Group level.

The fall in Currency revenue in FY24 flowed through

into a reduction in operating profit, both at a divisional

and Group level.

Historic

performance

2024202320222021

2020

100

200

300

400

500

Authentication

Currency

Discontinued

2024202320222021

2020

-10

Authentication

Currency

Discontinued

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

Find out more in Remuneration

on pages 92 to 113.

A reconciliation between IFRS and

non-IFRS measures can be found on

pages 197 to 200.

(£m) (£m)

46 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Key performance indicators continued

Adjusted EBITDA and free cash flow Net debt and facilities drawn Net debt/EBITDA covenant ratio

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Definition

Adjusted EBITDA is operating profit less exceptional

items, depreciation and amortisation. Free cash flow is

as now defined in our LTIP: operating cash flow before

pension contributions and tax, plus capital expenditure,

interest paid, lease payments and dividends paid to

minorities. The 2023 Annual Report used a different

definition of free cash flow.

Net debt is the net of borrowings and cash and cash

equivalents, excluding net losses on debt modification.

RCF drawn shows the gross amount outstanding on

the revolving credit facility at each period end.

This is the ratio between year end net debt and

adjusted EBITDA, both adjusted in accordance with

the definition of the covenant within our banking

agreements.

Why it is

important

Adjusted EBITDA gives an indication of how much

cash the Group is generating from operations. Free

cash flow shows how much cash is being generated

for shareholders and is a metric used in assessment

of our LTIP.

Net debt is a key measure of our indebtedness,

monitored both internally and externally. RCF gives a

focused view of the balance on which interest is paid.

Maintenance of this ratio below a certain level, for

FY24 less than 4.0, is a key covenant within our

banking agreements.

Performance

Adjusted EBITDA fell by 16.0% in FY24 as the

improvement in Authentication performance did not

fully offset the lower Currency performance. Free cash

flow was neutral over FY24 with lower EBITDA

counterbalanced by focus on cash management.

Although net cash flows led to an increase in net debt

in FY24, RCF drawn stabilised as we focused on

applying cash balances within the Group to reducing

the RCF drawn.

This ratio was maintained below covenant limits at

each testing point during the year. The fall in EBITDA

in FY24 was the principal driver behind the rise in this

ratio at the end of FY24 compared with the prior year.

Historic

performance

2024202320222021

2020

-50

-25

Authentication

Currency

Discontinued

Free cash ﬂow

2024202320222021

2020

-140

-120

-80

-100

-60

-40

-20

Net debt

RCF

2024202320222021

2020

2.21

1.46

0.99

2.24

2.78

0.0

0.5

1.0

1.5

2.0

4.0

3.5

3.0

2.5

Limit

(£m) (£m) (Ratio)

47 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Key performance indicators continued

EBIT/net interest covenant ratio Total shareholder return Basic earnings per share

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Definition

This is the ratio between adjusted EBIT and net

interest payable, both adjusted in accordance with

the definition of the covenant within our banking

agreements.

Total shareholder return of De La Rue shares

compared with that of the FTSE 250 index (excluding

investment trusts). On the graph below these have

been rebased to 100 on the day before the

Turnaround Plan was launched in February 2020.

Adjusted basic earnings per share is calculated as the

earnings attributable to equity shareholders excluding

amortisation and exceptional items, divided by the

average number of ordinary shares outstanding during

the year.

Why it is

important

Maintenance of this ratio above a certain level, for

FY24 more than 1.0, is a key covenant within our

banking agreements.

This is a performance measure under both the

historic Performance Share Plan and the new Investor

Return Plan.

This is a performance measure under the Performance

Share Plan.

Performance

This ratio was maintained above covenant limits at

each testing point during the year. The fall in EBIT in

FY24 was compounded by the increase in interest

payable due to higher average interest rates borne

to reduce the ratio.

The De La Rue share price rose following publication of

both full year FY23 and H1 FY24 results which detailed

progress in securing lower future cash outflows to

repair the pension deficit and a revised set of banking

covenants with a longer facility life.

IFRS loss per share improved in FY24 as IFRS losses

were not so large as in prior year. However, adjusted

earnings were adversely impacted by the results of

the Currency division in FY24.

Historic

performance

2024202320222021

2020

1.55

7.40

6.30

5.20

3.03

0.0

4.0

2.0

6.0

8.0

Limit

02/20 02/21 02/22 02/23 02/24

200

160

140

180

100

120

De La Rue

FTSE 250 (excluding investment trusts)

2020 2021 2022 2023 2024

-15

-30

IFRS

Adjusted

(Ratio) (Ratio) (p)

48 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Key performance indicators continued

Gender diversity in management Energy used per tonne of good output

Link to our

strategic pillars

Link to

remuneration

Link to our

strategic pillars

Link to

remuneration

Definition

We monitor our gender diversity among our

management team, looking to reach 60/40 male/

female split.

We measure our energy efficiency in terms of the

energy used per tonne of good output.

Why it is

important

This is a key target that we set to encourage gender

diversity at a senior level within the business.

We believe this is a representative indicator of the

energy efficiency of our operations. We did not set a

direct target for this ratio in FY24 due to the

unpredictability of the volume of output.

Performance

While we have not yet reached our target, the

proportion of women in management roles remains

higher than that of the overall population. We continue

to focus on the progression of women across the

organisation into management positions.

Energy use per tonne good output fell in FY24 by 9.1%

because of energy efficiency measures, including

resolving an operating inefficiency at our Westhoughton

site, more than offsetting an overall lower level of

activity.

Historic

performance

Female 33%

Male 67%

2024202320222021

2020

3,656

3,322

2,903

3,139

3,633

0.0

1,000

500

1,500

2,000

3,000

2,500

4,000

3,500

(%) (kWh/tonne)

49 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Financial review

To provide increased clarity on the

underlying performance of our

business, we have reported gross

profit and operating profit on an

IFRS and adjusted basis, together

with adjusted EBITDA and adjusted

controllable operating profit

(adjusted operating profit before

enabling function cost allocation),

for both operating divisions. Further

details on non-IFRS financial

measures can be found on pages

197 to 200.

100% of Group revenue for FY24 of

£310.3m (FY23: £349.7m) originated

from our ongoing operating divisions

of Currency and Authentication.

Together, Currency and

Authentication delivered adjusted

operating profit of £21.0m (FY23:

profit £27.8m), a fall of £6.8m (24.5%)

period-on-period. This largely

reflects lower revenue from the

Currency division and a slight

increase in operating expenses. The

legacy Identity Solutions business

generated an adjusted operating

result of £nil in FY24 with no

remaining activity (FY23: £0.1m loss).

Building the

bus iness

“We met our guidance for FY24 in

challenging markets, put the balance

sheet on a firmer footing and

managed our cash flows carefully

to limit the increase in net debt.”

Dean Moore, Interim Chief Financial Officer

50 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

The Group saw IFRS operating profit of £5.8m, as compared with a loss of £20.3m in FY23, which

saw much higher exceptional costs, including the termination of the agreement with Portals

Paper, a credit loss provision on Portals loan notes and substantial restructuring expenses.

Authentication

The Authentication division leverages advanced digital software solutions and security labels to

protect revenues and reputations from the impacts of illicit trade, counterfeiting, and identity theft.

FY24

£m

FY23

£m Change

Revenue 103.2 91.7 +12.5%

Gross profit 39.3 34.0 +15.6%

Adjusted controllable operating profit* 25.4 23.0 +10.4%

Adjusted operating profit* 14.6 14.3 +2.1%

Operating profit 12.9 5.4 +138.9%

% %

Gross profit margin 38.1 37.1 +100 bps

Adjusted controllable operating profit margin* 24.6 25.1 -50 bps

Adjusted operating profit margin* 14.1 15.6 -150 bps

* Non-IFRS measure

When compared with the prior period, the most substantial increase in FY24 Authentication

revenue was due to the increase in ID sales, notably the expected increase in production of data

pages for the Australian passport. Within Brand, Microsoft related sales were lower than in FY23.

As noted at the half year, the monthly run rate has stabilised, reflecting the continued restrained

state of PC sales globally. The loss of revenue in Kenya and from HMRC in FY23, together with a

stable overall performance in GRS, moderated overall sales growth.

Gross profit margin rose 100 basis points, when compared with the prior period, reflecting the

mix in sales and efficient manufacturing processes. Adjusted controllable operating profits, at

£25.4m (FY23: £23.0m) were up on last year in absolute terms but saw a slight fall in margin as

depreciation and amortisation rose, due to further investment in software, together with staff

incentives. Adjusted operating profits were marginally up on last year at £14.6m (FY23: £14.3m)

with the division allocated a higher proportion of enabling function costs, as both divisional

revenue was higher and Group revenue was lower than last year.

In FY23, the division was impacted by substantial exceptional costs in relation to the wind down

of Kenya and the impairment of certain software development costs.

This has not repeated this year and in FY24 exceptional costs relating to Authentication

amounted to just £0.7m in relation to restructuring initiatives. As a result IFRS operating profit

rose 138.9% to £12.9m (FY23: £5.4m).

Currency

The Currency division designs and manufactures highly secure banknotes and banknote

components that are optimised for security, manufacturability, cash cycle efficacy and

public engagement.

FY24

£m

FY23

£m Change

Revenue 207.1 254.6 -18.7%

Gross profit 46.6 58.2 -19.9%

Adjusted controllable operating profit* 29.5 37.6 -21.5%

Adjusted operating profit* 6.4 13.6 -52.9%

Operating loss (1.0) (24.8) +96.0%

% %

Gross profit margin 22.5 22.9 -40 bps

Adjusted controllable operating profit margin* 14.2 14.8 -60 bps

Adjusted operating profit margin* 3.1 5.3 -220 bps

* Non-IFRS measure

Revenue for the year in the Currency division was adversely impacted by the industry

downturn, falling 18.7% compared with last year to £207.1m (FY23: £254.6m). Volumes were

substantially down in all areas of the business. However by right-sizing our operations and by

careful management of our tenders, we were able to minimise the fall in margins at a gross

profit level. In monetary value, gross profit fell 19.9% to £46.6m (FY23: £58.2m).

Careful cost control and the reallocation of the ongoing remaining costs of the Gateshead and

Kenya facilities to enabling function costs at the start of FY24 resulted in adjusted controllable

operating profit falling nearly proportionally to £29.5m (FY23: £37.6m).

The allocation of enabling function costs to the division fell slightly in absolute terms, given the

smaller proportional contribution of divisional revenue to the Group in FY24 but, because of

the lower adjusted controllable operating profit, adjusted operating profit fell 52.9% to £6.4m

(FY23: £13.6m).

£7.4m (FY23: £38.4m) of exceptional costs of right-sizing the business for future operations led

the division into a marginal loss of £1.0m (FY23: loss of £24.8m) on an IFRS basis. This included

restructuring in the UK, together with some further costs in relation to the wind down in Kenya.

In the equivalent period last year, a much larger divisional IFRS operating loss was recorded,

including the termination of the agreement with Portals Paper, a credit loss provision on Portals

loan notes and substantial restructuring expenses.

Identity solutions

As noted above, the legacy Identity Solutions business saw no activity in FY24 with an

operating result of £nil (FY23: operating loss of £0.1m).

Financial review continued

51 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Enabling function costs

In FY24, enabling function costs of £33.9m (FY23: £32.7m) rose by 3.7% and represented 10.9%

of Group revenue (FY23: 9.4%).

The rise in enabling function costs is mostly due to the reallocation of the remaining ongoing

costs of the Gateshead and Kenya facilities into enabling functions from the beginning of FY24.

This allows for greater focus in the central management of these projects. Most activity at

Gateshead has now ceased and we are working to relocate the remaining functions as soon as

practicable. Excluding this reallocation, enabling function costs fell compared with FY23.

Exceptional items

Exceptional items during the period constituted a net charge of £14.2m (FY23: £47.1m) before tax.

Exceptional charges before tax included:

FY24

£m

Cash

£m

Non-cash

£m

FY23

£m

Site relocation and restructuring costs 9.0 4.3 4.7 21.1

Costs in relation to pension payment deferment and

banking refinancing 5.4 5.1 0.3 –

Credit loss provision/write back on Portals loan notes (0.5) (0.3) (0.2) 8.5

Pension underpin costs 0.3 0.3 – 0.5

Termination costs related to the Portals Paper

agreement – – – 17.0

14.2 9.4 4.8 47.1

£9.4m (FY23: £17.4m) of the exceptional items reported in FY24 were settled in cash in the year.

An additional £9.2m was settled in cash in relation to prior year exceptional items, being £7.5m

related to the termination of the Relationship Agreement with Portals Paper Limited and £1.7m

related to restructuring costs. Therefore, a total of £18.6m was settled in cash in FY24 relating to

exceptional items.

£9.0m (FY23: £21.1m) exceptional site relocation and restructuring costs comprised:

– £4.1m (FY23: £2.5m) charge for redundancy and legal fees, namely £2.8m within Currency,

£0.8m in Authentication and £0.5m in Central enabling functions, was made in relation to

restructuring initiatives to right-size the divisions for future operations.

– £4.5m (FY23: nil) of impairment charges relating to the impairment of certain assets and

machinery in the Currency division, together with £0.2m of costs preparing these assets for

removal.

– £0.2m (FY23: £1.1m) of restructuring charges related to the cessation of banknote

production at our Gateshead facility primarily relating to the costs, net of grant income

received of £0.1m, of relocating assets to different Group manufacturing locations.

– A net nil (FY23: £12.6m) in relation to the wind down of our operations in Kenya announced in

January 2023. This included redundancy charges of £0.1m, offset by £0.1m of proceeds from

the sale of previously impaired inventory.

– In addition, FY23 included £4.3m of asset impairments and £0.6m of charges relating to other

cost out initiatives, including the initial Turnaround Plan restructuring.

Costs associated with pension payment deferment and the banking refinancing amounted to

£5.4m (FY23: £nil) in the period. This included the following legal and professional advisor costs:

– £2.6m relating to amendments to the schedule of deficit repair contributions as explained in

‘Pension scheme’ below.

– £1.7m relating to the amendment and restatement of the terms of the revolving facility

agreement on 29 June 2023, as detailed in ‘Banking facilities’ below.

– £1.1m relating to the extension of the revolving facility agreement on 18 December 2023,

as detailed in ‘Banking facilities’ below.

Pension underpin costs of £0.3m (FY23: £0.5m) relate to legal fees, net of amounts recovered,

incurred in the rectification of certain discrepancies identified in the Scheme’s rules. The

Directors do not consider this to have an impact on the UK defined benefit pension liability at

the current time, but they continue to assess this.

During FY24, a net credit loss provision release of £0.5m (FY23: £8.5m charge) was reported on

the loan notes held in Portals International Limited where an unexpected cash repayment of

£0.3m was received during the period and a further unexpected payment of £0.2m was

received after the period end.

In FY23, the Group reached a settlement to terminate a long-term supply agreement with

Portals Paper Limited, incurring an exceptional cost of £17.0m, representing the agreed

settlement together with associated legal costs. The final payment under the Relationship

Agreement of £7.5m was made in April 2023.

Of the pre-tax net exceptional charge of £14.2m (FY23: £47.1m), £4.8m (FY23: £29.7m)relates to

non-cash items, principally asset impairments, and £9.4m (FY23: £17.4m) relates to cash items.

Tax related to exceptional items amounted to a £5.2m tax credit (FY23: tax charge of £5.1m).

Included within exceptional tax items are:

– £2.7m credit representing the tax relief impact of the exceptional costs detailed above, which

is net of a £0.5m charge relating to the UK corporate interest restriction;

– £2.3m credit relating to the release of a provision following the expiry of an indemnity period,

following the Cash Processing Solutions Limited business sale in May 2016; and

– £0.2m credit for the release of other tax provisions no longer considered necessary

Finance costs

The Group’s net interest charge was £21.2m (FY23: £9.3m). This included interest income of

£0.5m (FY23: £1.2m), interest expense of £19.2m (FY23: £11.6m) and retirement benefit finance

expense of £2.5m (FY23: income of £1.1m).

Financial review continued

52 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

In FY24, no interest income has been recognised on the loan notes and preference shares held

in Portals Paper Limited (FY23: £1.1m) as the original principal received and accrued interest was

fully set off by the expected credit loss provision in the balance sheet as at 30 March 2024.

Interest expense comprised:

FY24

£m

FY23

£m

Bank loan interest 12.3 7.2

Other, including amortisation of finance arrangement fees 3.7 3.2

Net loss on debt modification 2.7 0.7

Interest on lease liabilities 0.5 0.5

19.2 11.6

The increase in bank loan interest paid in FY24 was largely attributable to the rises in Bank of

England base rates. In FY24, these were between 4.25% and 5.25%. By comparison in FY23 these

moved from 0.75% to 4.25%, with most of the increase taking place in the second half of the year.

The net loss on debt modification of £2.7m (FY23: £0.7m) relates to the changes in existing

banking facilities, treated as a non-substantial modification under IFRS 9 ‘Financial Instruments’.

The modification loss and its subsequent amortisation are non-cash items. See note 6 of the

Financial Statements for further information.

The IAS 19 related finance cost, which represents the difference between the interest on

pension liabilities and assets, was an expense of £2.5m (FY23: £1.1m income). The charge in the

period was due to the opening IAS 19 pension valuation in being a deficit of £54.7m.

Taxation

The total tax charge in the Consolidated Income Statement for the year was £3.7m (FY23:

£27.6m). This includes the impact of derecognised deferred tax asset balances totalling £12.2m

(FY23: £11.9m). It also includes a £3.8m credit relating to a reduction in uncertain tax positions

(FY23: £8.5m tax charge).

Included within the total tax charge was a net tax credit relating to exceptional items in the

period of £5.2m (FY23: tax charge £5.1m) and a tax credit of £0.3m (FY23: tax credit £0.3m)

recorded in respect of the amortisation of acquired intangibles.

The Group paid corporate income tax of £2.3m in FY24 (FY23: £1.0m).

The underlying effective tax rate for FY25 on continuing operations before exceptional items

and amortisation of acquired intangibles is expected to be between 60-80%. This appears

disproportionately high due to the impact of expected corporate interest restrictions in the UK

and assumes no business disposals or significant changes to the net debt position.

Earnings per share

The basic weighted average number of shares for earnings per share (‘EPS’) purposes was

195.7m (FY23: 195.4m).

Adjusted basic loss per share was 5.3p (FY23: loss per share of 1.5p), reflecting adjusted basic

loss falling from £3.0m in FY23 to a loss of £10.3m in FY24.

IFRS basic loss per share from continuing operations was 10.2p (FY23: 28.6p), given the lower

net exceptional charges recorded in FY24 and reflecting a basic loss of £20.0m (FY23: loss

of £55.9m).

Cash flow

The conservation and generation of cash within the business has been an area of stringent

focus during the period. Net working capital improved by £5.9m (FY23: £18.3m) as we

concentrated on reducing inventory levels, on careful structuring of advance payments from

customers where possible and on receipt of prompt payment. We reduced our net capital

expenditure outflow in Malta by seeking timely receipt of associated grant income and kept

careful control over software development spend.

More detail on the movements within our cash flows for the period are set out below.

Cash flow from operating activities was a net cash inflow of £26.2m (FY23: £23.8m inflow),

generated after adjusting the £15.4m loss before tax (FY23: £29.6m loss) for:

– £21.2m of net finance expense (FY23: £9.3m).

– £19.3m of depreciation and amortisation (FY23: £20.0m).

– £4.5m of asset impairment (FY23: £9.7m).

– £4.2m decrease in provisions (FY23: £0.1m increase).

– £ 1.5m of pension fund contributions related to the administrative costs of running the

Scheme. In FY23 a total of £16.5m cash contributions were paid to the Scheme, which

included pension deficit repair contributions. De La Rue secured a moratorium on such

payments in FY24.

– £5.9m net working capital inflow (FY23: £18.3m inflow) including:

– £7.6m decrease in inventory (FY23: £0.5m decrease);

– £2.3m decrease in trade and other receivable and contract assets (FY23: £6.0m

decrease); and

– £4.0m decrease in trade and other payables and contract liabilities (FY23: £11.8m

increase), due to the timing of supplier payments and the final payment in relation to the

Portals termination agreement, paid just after the FY23 period end.

– tax payments of £2.3m (FY23: £1.0m).

Financial review continued

53 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

The cash outflow from investing activities of £7.8m (FY23: £20.8m outflow) included:

– capital expenditure on property, plant and equipment, after cash receipts from grants, of

£4.1m (FY23: £11.0m), largely relating to the construction of our expanded facility in Malta.

– capital expenditure on software intangibles and development assets of £4.6m (FY23: £10.4m).

– £0.6m (FY23: £0.2m) of interest received.

– £0.3m repayment of other financial assets.

The cash outflow from financing activities was £29.0m (FY23: inflow £12.6m), included:

– £4.0m net repayment of borrowings (FY23: draw down of £27.0m),

– £14.1m (FY23: £10.3m) of interest payments,

– £5.5m (FY23: £0.9m) of payments for debt issue costs,

– £2.5m (FY23: £2.4m) of IFRS 16 lease liability payments, and

– £3.2m (FY23: £0.8m) of dividends paid to non-controlling interests, mostly due to a

repatriation of cash from Sri Lanka.

The net decrease in cash and cash equivalents in the period was £10.6m (FY23: £15.6m increase).

As a result of the cash flow items referred to, Group net debt increased from £82.4m at

25 March 2023 to £89.4m at 30 March 2024.

Net debt

The analysis below provides a reconciliation between the opening and closing positions for

liabilities arising from financing activities together with movements in cash and cash equivalents:

At 25

March

2023

£m

Cash

flow

£m

Foreign

exchange

and other

£m

At 30

March

2024

£m

Gross borrowings (122.7) 4.0 – (118.7)

Cash and cash equivalents 40.3 (10.6) (0.4) 29.3

Net debt (82.4) (6.6) (0.4) (89.4)

Net debt is presented excluding unamortised pre-paid borrowing fees of £5.0m (FY23: £5.0m),

loss on debt modification of £3.5m (FY23: £0.7m) and £11.6m (FY23: £13.3m) of lease liabilities.

Banking facilities

On 29 June 2023, the Company signed a range of documents which had the effect of

amending the terms of the revolving facility agreement with its lending banks and their agents.

As a result of these changes, the facilities are now secured against material assets and shares

within the Group.

Under this amended agreement, the banking facilities’ expiration on 1 January 2025 remained

unchanged, but there were changes to:

– margins: with new interest rates introduced for net debt to EBITDA ratios over 2.5.

– changes in daily interest rates: to SONIA daily rates.

The following changes were made to the Group financial covenant limits and spread levels

from 1 July 2023:

– EBIT/net interest payable more than or equal to 1.0 times, (3.0 times previously).

– Net debt/EBITDA less than or equal to 4.0 times up to and including the Q4 2024 testing

point, reducing to less than or equal to 3.6 times from Q1 FY25 through to the end of the

agreement (3.0 times previously).

– Minimum liquidity testing monthly, testing at each weekend point on a 4-week historical

basis and 13-week forward-looking basis. The minimum liquidity was defined as “available

cash and undrawn RCF greater than or equal to £25m”, although this reduced to £20m if

£5m or more of cash collateral was in place to fulfil guarantee or bonding requirements (new

test). This was further amended in December 2023 (see below).

– additional spread rates on the leverage ratio to cover the extra levels envisaged by the

relaxation of covenant limits:

Leverage (consolidated net debt to EBITDA)

Margin (% per

annum)

Greater than 3.5:1 4.35

Greater than 3.0:1 and less than or equal to 3.5:1 4.15

Greater than 2.5:1 and less than or equal to 3.0:1 3.95

On 18 December 2023, the Group entered into a new agreement with its banking syndicate to

extend its banking facilities to July 2025. From December 2023, the Group has bank facilities of

£235m including an RCF cash drawn component of up to £160m (a reduction of £15m from the

previous agreement) and bond and guarantee facilities of a maximum of £75m. The covenant

tests described above continue to apply to the facilities, other than the liquidity covenant

where the minimum headroom is now defined as “available cash and undrawn RCF greater than

or equal to £10m”, to reflect the £15m reduction in RCF. In addition, an arrangement fee is due,

equal to 1% of the facility, which will reduce to 0.5% if the facility is refinanced before 30 June 2024.

Covenant test results at 30 March 2024 are as follows:

Test Requirement

Actual at

30 March

2024

EBIT to net interest payable More than or equal to 1.0 1.55

Net debt to EBITDA Less than or equal to 4.0 2.78

Minimum liquidity at 30 March 2024 was in excess of the £10m limit required under the

covenant tests.

Financial review continued

54 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

The Group also met its covenant and liquidity requirements at the end of June 2024.

The covenant tests use earlier accounting standards, excluding adjustments for IFRS 16. Net

debt for covenants excludes unamortised pre-paid borrowing fees and the net loss on debt

modification.

At 30 March 2024, the Group had Bank facilities of £235.0m (FY23: £275.0m) including an RCF

cash drawn component of up to £160.0m (FY23: £175.0m) and bond and guarantee facilities of

a maximum of £75.0m (FY23: £100.0m), due to mature on 1 January 2025.

The drawdowns on the RCF facility are typically rolled over on terms of between one and three

months. However, as the Group has the intention and ability to continue to roll forward the

drawdowns under the facility, the amount borrowed has been presented as long-term.

At 30 March 2024, the Group had a total of undrawn RCF committed borrowing facilities, all

maturing in more than one year, of £42.0m (FY23: £53.0m). The amount of loans drawn on the

RCF cash component was £118.0m at 30 March 2024 (FY23: £122.0m). The accrued interest in

relation to cash drawdowns outstanding as at 30 March 2024 was £0.3m (FY23: £0.3m).

Guarantees of £41.8m (FY23: £52.1m) were drawn at 30 March 2024 under the guarantee facility.

The bond and guarantee facilities provide guarantees or bonds to participate in tenders and

function as back up to contracts where customers require a guarantee as part of their

procurement process. In addition, the facilities underpin some advance payments from

customers. The Group considers the provision of such bonds to be in its ordinary course of

business.

Pension scheme

The Company did not pay any deficit repair contributions to the Scheme during the period to

30 March 2024. On 3 April 2023, the Company and the Trustee agreed to defer the deficit

repair contribution due, payable on 5 April 2023, to 26 May 2023. Subsequently, on 25 May

2023 the Company and the Trustee agreed to defer the deficit contribution due on 26 May

2023 to 5 July 2023. In June 2023, the Company and the Trustee agreed to defer all the deficit

repair contributions due to recommence from 5 July 2023 and a new Recovery Plan was then

agreed between the Company and the Trustee which deferred all deficit repair contributions

until July 2024. Under the Recovery Plan, the amount deferred, totalling £18.75m, would be paid

to the Scheme, from FY26 to FY29.

An actuarial valuation of the Scheme was then undertaken as at 30 September 2023. This

showed a Scheme deficit of £78m. As a result of this valuation, on 18 December 2023, the

Company and the Scheme Trustee agreed a new schedule to fund the deficit. The funding

moratorium until July 2024 as previously agreed was retained, with the only payment being

£1.25m due under the June 2023 Recovery Plan. This will be followed by deficit repair

contributions from the Company of £8m per annum to the end of FY27, followed by higher

contributions that at no time exceed £16m per annum and which run until December 2030 or

until the Scheme becomes fully funded.

The next periodic actuarial valuation will be as at the end of September 2026, with the Scheme

Trustee undertaking to provide the results of this valuation by January 2027, ahead of any

increase in contribution from £8m per annum.

The valuation of defined benefit pension schemes of the Group on an IAS 19 basis at 30 March

2024 is a net liability of £51.6m (FY23: net liability of £54.7m).

The charge to the adjusted operating profit in respect of the administration of the Scheme in

FY24 was £1.3m (FY23: £1.6m). Under IAS 19 there was a finance charge of £2.5m (FY23: finance

credit of £1.1m) arising from the difference between the interest cost on liabilities and the

interest income on scheme assets.

Capital structure

At 30 March 2024, the Group had net assets of £2.6m (FY23: £22.6m restated).

In the prior period (FY23), deferred tax assets were incorrectly reported, being overstated by

£12.4m. This has no impact on earlier reported periods. Neither does it have any cash impact

on the Group. The prior year revision corrects the impact of incorrectly including forecast

corporate interest restrictions within the forecast taxable profits used to support deferred tax

asset recognition purposes. The corporate interest restrictions are considered temporary

differences that are expected to originate in future periods and therefore excluded from the

assessment of future taxable profits. Further information can be found in the Basis of

Preparation on page 134.

The movement during the period included:

£m

Opening net assets – 25 March 2023 – as reported 35.0

Prior period revision (12.4)

Opening net assets – 25 March 2023 – restated 22.6

Loss for the period (19.1)

Remeasurement loss on retirement benefit obligations 5.4

Tax related to remeasurement of net defined benefit liability (1.3)

Foreign exchange movements (2.2)

Movement in cash flow hedges (1.3)

Employee share scheme charges 1.4

Share capital issued 0.3

Dividends paid to Non-Controlling interests (3.2)

Closing net assets – 30 March 2024 2.6

Financial review continued

55 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management

How we manage

our principal risks

and uncertainties

Due to the nature of risk, the mitigating factors

stated cannot be viewed as assurance that the

actions taken or planned will be wholly effective.

Risk appetite

The Board has reviewed our principal risks and

considered whether they reflect an acceptable

level of risk. Where this is not the case, the

Board has also considered what further

investment is being made to reduce the

likelihood and potential impact of the risk.

The Board either approves the level of risk

being taken or requires management to

reduce the risk exposure.

For core areas of the business, the Board uses

several methods to ensure that management

operates within an accepted risk appetite.

These include delegated authority levels, the

approval of specific policies and procedures

and the approval of the annual insurance

programme. The Board receives regular

feedback on the degree to which management

is operating within acceptable risk tolerances.

This feedback includes regular operational and

financial management reports, internal audit

reports, external audit reporting and any

reports to the whistleblowing hotline. All

members of the ELT have individual or joint

ownership of one or more of the principal risks.

Management of those risks’ forms part of their

personal objectives.

The Risk Committee meets four times a year

to review risk management and monitor the

status of key risks as well as the actions we

have taken to address these at both Group

and functional level. It also examines possible

emerging risks by considering both internal

and external indicators and challenges,

together with whether it has identified the

principal risks that could impact the business

in the context of the environment in which

we operate.

The Board receives regular updates on risk

management and material changes to risk,

while the Audit Committee also reviews the

Group’s risk report.

Management is responsible for implementing

and maintaining controls, which have been

designed to manage rather than eliminate risk.

These controls can only provide reasonable,

but not absolute, assurance against material

misstatement or loss. See page 90 for further

information regarding internal controls.

Principal risks and uncertainties

The following pages set out the principal risks

and uncertainties that we believe could

crystallise over the next three years. The Board

has undertaken a robust risk assessment to

identify these risks, which are referred to as

principal risks to the business. There may be

other risks that we currently believe to be less

material. These could become material, either

individually or simultaneously, and significantly

affect our business and financial results. Our

ongoing risk review mechanisms will seek to

identify and escalate any such risks. We have

modelled potential scenarios of these risks

crystallising to support the disclosures in the

Viability Statement and assess the Group’s

risk capacity. See page 68 for further details.

How we manage risk

Risk management is the responsibility of the

Board, supported by the Risk Committee,

which comprises members of our Executive

Leadership Team (ELT) and is attended by the

Group Director of Security, HSE and Risk. The

Risk Committee is accountable for identifying,

mitigating, and managing risk. Further details

about the Committee can be found on page

91. Our formal risk identification process

evaluates and manages our significant risks in

accordance with the requirements of the UK

Corporate Governance Code. Our divisional

risk registers feed into a group risk structure

that identifies the risks, their potential impact

and likelihood of occurrence, the key controls

and management processes. We then

establish how to mitigate these risks, and the

investment and timescales required to reduce

the risk to an acceptable level within the

Board’s risk appetite.

56 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

De La Rue’s risk management framework

Group Health, Safety and Sustainability

(Global HSS) Committee

– Sets Health, Safety and Sustainability

standards

– Agrees and monitors implementation of

HSE strategy

– Monitors Health, Safety and Sustainability

performance

Executive Leadership Team (ELT)

– Accountable for the design and

implementation of the risk management

process and the operation of the control

environment

Group policies

– Policies for highlighting and managing

risks

– Procedures and internal controls

Functional management

– Ensures that risk management is

embedded into business culture,

practice, and operations

Sanctions Board

– Responsible for ensuring internal control

procedures are in place to mitigate the

risk of breaching applicable trade

sanctions and embargoes

Board of Directors and Company Secretary

Ethics Committee

– Reviews the effectiveness of internal controls

– Approves the annual internal and external audit plans

– Reviews findings from selected assurance providers

– Reviews ethical risks, policies

and standards

Risk Committee

– Reviews and proposes the business risk

profile

– Monitors the management of key risks

– Tracks implementation of actions to

mitigate risks

– Examines and considers emerging risks

that could impact the business

Audit Committee

57 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

How we manage principal risks

Risk Internal controls External assurance Oversight forum Change

Bribery and corruption

The pressure to meet sales targets, on either a

third party or an employee, could increase the risk

of the payment of a bribe on behalf of De La Rue or

anti-competitive behaviour, leading to damage to

our reputation from a successful prosecution,

financial loss and disbarment from tenders and

substantial fines.

Link to our strategic pillars

– Whistleblowing policy and associated procedures are

integral aspects of the compliance framework, which is

complemented by a whistleblowing hotline.

– Mandatory training on anti-bribery and corruption, and

competition law.

– Our rigorous process for the appointment,

management, and remuneration of third party partners

(TPPs), operating independently from the sales

function, which was enhanced in FY24.

– We have a focus on raising awareness through local

Ethics Champions.

– We have Level 1 accreditation to the Banknote

Ethics Initiative (BnEI), which provides

governments and central banks assurance

regarding our ethical standards and business

practices.

– We maintain certification to ISO 37001, the

anti-bribery management system, which

assists the organisation to prevent, detect

and address bribery attempts.

– External scrutiny of TPP fee structure.

Audit Committee

Risk Committee

Ethics

Committee

Quality management and delivery failure

A failure in our Quality Management System,

including specification, controls, and enforcement

issues, could lead to a major customer quality

incident, resulting in late delivery penalty clauses

and increased costs.

Link to our strategic pillars

– Implementing a product quality strategy to reduce

instances and costs of quality incidents.

– Operational management boards monitoring KPIs.

– Design approval process.

– Regular reviews and audits of critical suppliers to

ensure standardisation.

– Central quality team inspect and test regime for all

processes and features.

– Service monitoring tools in place to manage

performance and response times to remain within

service level agreements.

– 24/7 support and IT coverage to minimise downtimes.

– In process inspection systems validating key areas.

– All sites are certified to ISO 9001, quality

management system.

– Inclusion within regular customer audits.

Divisional

business reviews

Business Process

Review (BPR)

updates

Risk Committee

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

58 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

How we manage principal risks continued

Risk Internal controls External assurance Oversight forum Change

Macroeconomic and geo-political environment

As a manufacturing business operating worldwide,

the Group is exposed to the challenges of the

prevailing macroeconomic environment,

inflationary pressures, supply chain headwinds and

stress to sales pipelines which could impact its

operations and ability to financially forecast

accurately. The Group also maintains both

Authentication and Currency operations in

territories that are exposed to economic and/or

political instability. This type of instability, which

includes the uncertainties of regime change,

creates risks both for our manufacturing footprint

and locally based direct sales operations.

Link to our strategic pillars

– A robust prioritisation process with regular reviews of

programmes and projects.

– A robust incident management framework, including

annual exercising.

– Procurement conducting single and sole source

supplier reviews as well as risk assessments on

financial and operational risks from suppliers.

– Regular reviews of the anticipated impacts of pricing

pressures in the supply chain fed into the established

Business Process Review (BPR) and budget review

processes.

– Maintain strong employee relations in all locations.

– A comprehensive travel management programme.

– A comprehensive insurance programme.

– Consideration of contracts being designated in GBP or

hard currency, if possible, subject to local regulations.

– Regular monitoring of financing and fiscal matters,

seeking early advice, diversification, longer-term

funding, and hedging, if facilities are available.

– ELT functional review meetings.

– Third party risk management alerting

(hotspots/regions of concern) and risk

reporting.

– External auditing of risk and resilience.

Divisional

business reviews

Business Process

Review updates

Risk Committee

Loss of key site or process

The loss of a key site or process, due to external

threats or internal system failures, could lead to

reduced operational capacity and result in

disruption to customer service delivery, brand

damage and increased costs.

Link to our strategic pillars

– We invest in capacity, equipment and facilities,

multiple sources of supply to drive down single points

of failure.

– We hold business continuity planning (BCP) stock for

critical activities.

– Monthly KPIs monitor BCP preparedness.

– Internal audit of all manufacturing sites, including BCP

preparedness.

– Supplier strategy and sourcing reviews.

– Business continuity coordinators at all sites, supported

by a central coordinator.

– Under a central certification we are certified

at Head Office and all production and storage

sites to ISO 22301:2019 standards, ensuring a

robust business continuity management

system throughout the Group.

– Inclusion within regular customer audits.

– The appropriate levels of business

interruption insurance are in place to satisfy

the needs of the business.

Group integrated

security and

business

continuity

steering

committee

Risk Committee

Audit Committee

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

59 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

Risk Internal controls External assurance Oversight forum Change

Sustainability and climate change

Climate change is recognised as a significant global

and business risk.

Governments, the financial community, and

businesses (including our own and our customers)

see the current decade 2020-2030 as a call to

action, with major new commitments to achieving

net zero emissions by 2050.

Link to our strategic pillars

– De La Rue is committed to be carbon neutral for our

own operations by 2030 via utilising a phased carbon

offset programme for Scope 1 and Scope 2 emissions

within our control.

– Our own internal audit programme verifies the Group

environmental management system and assures good

practices.

– We are tracking our annual progress against our

approved Science Based Targets (SBTi). We have

subscribed to EcoVadis, a global sustainability rating

system for suppliers and are targeting our key

suppliers accounting for 80% of procurement spend.

– We concluded our Transform Sustainability

Programme in 2023 and will launch our Climate

Change Programme in 2024 for oversight of our

progress.

– We have mandated environment and sustainability

awareness training at all sites.

– All our manufacturing sites are certified to ISO

14001 standard which helps the organisation

reduce its environmental impact.

– We participate in the CDP and have

submitted data for the past 11 years, enabling

us to review and reduce our carbon impact.

– Our alignment with the recommendations of

the Task Force on Climate-related Financial

Disclosures (TCFD) including climate scenario

analysis is described within the Responsible

Business section, pages 24 to 25.

– We have structured Science Based Targets

(SBTi) in support of keeping global

temperature increases below the 1.5°C limit.

Global Health,

Safety and

Sustainability

Committee

(GHSS)

Monthly ELT

updates

Risk Committee

Breach of information security

A breakdown in the control environment:

– Including collusion or non-compliance

(excluding external attack) could lead to a

breach of data.

– Resulting in an external attack (including

malware, ransomware and/or hacking).

Either of which could lead to a cyber security

breach/incident impacting the confidentiality,

integrity and/or availability of customer and/or

other critical data.

Link to our strategic pillars

– We have implemented control measures around

customer, company, and employee data,

demonstrating a clear approach to identify and

mitigate information security risks.

– On an annual basis we conduct internal audits of our

customer and ISO standards to an agreed plan. Any

findings are risk assessed and remediation activities

agreed and tracked.

– Data classification policy and handling process with

monitoring of classification changes and email traffic.

– We have cyber awareness training at all levels of the

business.

– Group policies support and enable our integrated

security management system.

– IT technical controls include security incident and

event management software (SIEM), event logging and

management, managed by an in-house security

operations centre (SOC). Ensuring information security

is designed in from the ground up for all deployed

hardware and software, including the use of multi-

factor authentication (MFA) where appropriate.

– Due diligence performed on software and suppliers.

– Contractually bound data protection provisions with

third parties handling personal data.

– Under a central certification we are certified

across the Group to ISO 27001 standards,

ensuring we manage information security

under a robust framework.

– The appropriate levels of professional

indemnity and cyber insurance are in place to

satisfy contractual and business

requirements, including internal and external

incident response support.

– External compliance audits are conducted on

a regular basis, including benchmarking to

international standards.

– We have instigated a programme of both

internal and external penetration and

vulnerability testing on corporate and

customer facing systems.

– Regular customer compliance and

governance audits.

Group integrated

security and

business

continuity

steering

committee

Monthly ELT

updates

Risk Committee

Audit Committee

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

How we manage principal risks continued

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

60 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

Risk Internal controls External assurance Oversight forum Change

Supply chain failure

The failure of a key supplier to deliver the products

or services that we need on time or to

specification, through either a supply failure or a

business failure, could lead to disruption to our

operations and associated costs, an inability to

fulfil customer contractual requirements, resulting

in penalties and forfeit of performance bonds, loss

of customer contracts and reputational damage.

The ethical failure of a key supplier, such as a failure

to adhere to our requirements on Modern Slavery

or Bribery and Corruption in our supply chain,

could lead to major reputational and financial

damage and potentially prosecution, and a failure

to control and limit price inflation in our supply

chain could lead to significant erosion of our

profitability.

Link to our strategic pillars

– Key supplier risk assessments reviewing the risk of

supply failure, credit risk, price increases and ethical

failure.

– Prioritised, supplier-specific action plans for key risks

with monthly reporting on progress to ELT.

– Supplier vetting platform to risk assess all key and new

suppliers, engaging SMEs to review standards across

ethics, quality, information and product security and

environmental management.

– Regular reviews of the risk assessment to ensure that it

remains up to date with latest available data.

– Ensure that all key strategic supplier contracts are fit

for purpose.

– Deepened Supplier Relationship Management

programme, with direct and regular engagement at

executive level with all key suppliers, to provide early

warning of issues and ensure that De La Rue’s needs

are prioritised by our key suppliers.

– Utilise and fully deploy spend analytics tool to increase

visibility of the full supply base and drive integrated

data-driven action planning.

– We are externally audited for ISO 14298

(Security Print), ISO 22301 (Business

Continuity) and PwC on procurement and

supply chain controls.

– Supplier Quality Audit programme.

Monthly

divisional and ELT

updates

Breach of security – product security

A breakdown in the control environment, including

collusion, non-compliance, or an external attack,

could lead to a security breach resulting in the loss

of client-sensitive product and significant damage

to De La Rue’s reputation.

Link to our strategic pillars

– Monthly security KPIs monitor and maintain the

holistic security environment.

– We ensure that all shipment routes and transit plans

are appropriately risk assessed and have appropriate

mitigations in place, by air, sea, or road.

– Dedicated security professionals at all sites, supported

by a central function.

– Layered auditing at all sites, enhancing security

behaviours and culture.

– Materials control to ensure product security

verification and reconciliation.

– All manufacturing sites certified to ISO 14298

and INTERGRAF 14298 and/or 15374, which

ensures an aligned security print

management system across the Group.

– We are subject to regular regulatory and

customer compliance audits.

Group integrated

security and

business

continuity

steering

committee

Risk Committee

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

How we manage principal risks continued

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

61 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

Risk Internal controls External assurance Oversight forum Change

Sanctions

Entering a contract or other commitment with a

customer, supplier or partner which is subject to a

sanction or trade embargo could lead De La Rue to

be in breach of sanctions. Breach could result in

imprisonment and substantial fines for individuals,

the leadership team (including the Board) and

De La Rue. In addition, it may lead to a withdrawal

of our banking facilities, as well as disbarment from

future tenders.

De La Rue may be unable to effect payments or to

be paid by customers due to compliance matters

when operating in higher risk and sanctioned

territories.

Additionally banking partners may not be willing to

support bonds or guarantees for some countries.

Link to our strategic pillars

– A robust request for approval (RFA) process ensures

commercial bid teams to consider risk.

– As a responsible business, we actively and continuously

monitor and conduct due diligence on all of our

customers, suppliers, and partners.

– We conduct regular Internal audits of our sanctions

compliance programme.

– We mandate sanctions training to raise awareness of

risks and to clarify escalation routes for concerns.

– Sanctions impact reviewed on a case-by-case basis

against a known list of sanctioned territories and

potential customers.

– We ensure both internal and external audit of

sanctions compliance programme.

Sanctions Board

Audit Committee

Board briefings

Loss of key talent

Due to historic negative media coverage, there is a

risk that there may be a reduced ability to attract

and retain key talent with skills and knowledge

required for the business going forward. This is

likely to impact the organisational ability to deal

with the current level of change, and our

employees’ bandwidth to manage the workload.

Link to our strategic pillars

– Remuneration structure designed to support retention.

– Organisational talent process and succession planning

to provide early identification of single points of failure

and capability gaps.

– Set clear objectives for the coming financial year that

people can align around.

– Train Senior Leaders and Managers on expectations

and how to deliver against these.

– Benchmarking to known best practice.

– External auditing of people risk.

HR Leadership

Team reviews

Talent Board

reviews annually

Risk Committee

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

How we manage principal risks continued

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

62 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Risk and risk management continued

Risk Internal controls External assurance Oversight forum Change

Banking facilities

The Group maintains banking facilities that provide

liquidity to ensure the Group has sufficient funding

for all its needs, bonding to support existing

contracts and new contracts where bonding is

required and ancillary lines for financial risk

management.

The funding and bonding facilities will mature on

1 July 2025. The Group will be seeking to extend or

replace these facilities with longer maturities;

however the credit markets remain challenging

with a difficult competitive landscape and global

economic environment. The ability to access

bonding services is increasingly complex given the

regions we operate in. The Group seeks to hedge

foreign exchange exposures and there is a risk that

without adequate facilities then the Group may

need to either operate with less hedging or

consider unrated counterparties for foreign

exchange contracts.

Link to our strategic pillars

– Manage and develop relationships with existing and

new banks to continue to support the business in its

liquidity, bonding, and ancillary needs.

– Regular dialogue with ELT, banking partners and other

stakeholders.

– Active monitoring of the available limits and proactive

management for both cash and borrowings as well as

guarantees to make best use of capacity.

– Continue to seek additional counterparties for foreign

exchange (two new counterparties and hedging

facilities put in place).

– Compliance with financial covenants.

– External auditing by EY. Functional risk

reviews

ELT reviews

Risk Committee

Audit Committee

Board briefings

Currency sales pipeline

Currency sales globally have seen a recent historic

low, post-pandemic. There remains a concern that

unless the lost revenue and profit from the division

can be recovered by sales or other business

development in the short to medium term, then

long-term financial forecasts for the Group will be

inaccurate and significantly under market

expectations. This includes banknote production,

security features and polymer sales opportunities.

Link to our strategic pillars

– Enhanced governance and monitoring of sales

pipeline.

– Enhanced focus on Sales activity – time in territory,

customer engagement, number of visits, etc.

– Executive Sales & Operational Planning (S&OP)

framework provides overview of must wins and critical

close dates.

– Business Process Review (BPR) held weekly to discuss

tactical progress on pipeline targets.

– Enhanced account close plans in place and monitored

monthly by senior team including detailed reviews with

CEO/ELT.

N/A Business Process

Review (BPR)

Currency and

Executive

Leadership Team

reviews

Change in risk levels in FY24 (last 12 months)

Increased

Static

Decreased

New risk

How we manage principal risks continued

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

63 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Viability statement and going concern assessment

Viability

statement and

going concern

assessment

may in turn impact the cash proceeds, the

costs associated with the transaction and the

amounts required to address any pension

scheme risk, along with the day one liquidity of

the retained operations of the Group. These

matters represent a material uncertainty

which may cast significant doubt upon the

Group’s ability and the Company’s ability to

continue as a going concern for a period up to

28 September 2025.

Strategic review

As detailed in the trading update released on

30 May 2024, the Directors have been

undertaking a review of the core strategic

strengths of the Group and how best to

optimise the underlying intrinsic value of the

business for the benefit of all stakeholders.

This review and analysis has included:

– recognising the improved order intake over

the last year, and the future prospects for

the Group’s operating divisions and the

Group as a whole;

– the accretive value creation that may be

achieved with increased scale and

capabilities in both of the operating

divisions; and

– the Director’s commitment to reduce

leverage and create greater financial

flexibility in the funding structure of the

Group as a whole.

This review, and associated learnings, has

guided the Board in its process to evaluate

strategic options for the group and each

division. As a result, the Board is in discussions

with a number of parties who have made

proposals in relation to, or expressed interest

in, the acquisition of each of the Group’s

divisions.

Going concern

Overview

In line with IAS 1 “Presentation of financial

statements”, and the FRC guidance on “risk

management, internal control and related

financial and business reporting”, when

assessing the Group’s ability and the

Company’s ability to continue as a going

concern, the Directors have taken into account

all available information for a period up to 28

September 2025, being the going concern

period.

The Group’s business activities, together with

the factors likely to affect its future

development, performance and position are

set out on pages 1 to 10 of the Strategic

Report. In addition, pages 56 to 63 include the

Group’s objectives, policies and processes for

financial risk management, details of its

financial instruments and hedging activities

and its exposure to credit risk, liquidity risk

and commodity pricing risk. The financial

position of the Group, its cash flows, liquidity

position and borrowing facilities are described

on page 53 of the Strategic Report.

As explained further below, the Board has

determined that the going concern basis of

accounting in the preparation of the

consolidated financial statements is

appropriate.

The Group’s Revolving Credit Facility (RCF)

expires on 1 July 2025. The cash flow forecasts

for the Group indicate that it would not have

sufficient liquidity to meet the obligation to

repay the RCF in full on or before 1 July 2025.

Management has been pursuing various

strategic options, which would allow the Group

to repay the RCF on or before 1 July 2025. The

most progressed of those is the sale of the

Authentication division. The Board notes that

the probability of completion, timing and

terms of the sale of the division are subject to

factors outside of the Board’s control, which

64 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Viability statement and going concern assessment continued

Since the release of the trading update on 30 May 2024, the discussions with the interested

parties have progressed in line with the Board’s expectations. The Board is satisfied that, if the

discussions relating to the Group’s Authentication division conclude in a sale of that division on

the terms currently under discussion, (and notwithstanding the material uncertainty as detailed

above), there would be adequate proceeds from the transaction to fully repay the RCF, satisfy

future bonding requirements, mitigate any risks to the De La Rue UK defined benefits pension

scheme, and continue to operate the retained business as a going concern.

Expiration of the RCF

Under the amended facility agreement, signed on 18 December 2023, the Group has access to

a RCF of £235m that expires on 1 July 2025, which is within the going concern period.

Over the last year, the Board has been in ongoing dialogue with the banking syndicate providing

the RCF. This dialogue has been constructive and the lenders are supportive of the Board

pursuing the strategic options summarised above.

The Directors are confident that further progression of the sale of Authentication will ultimately

allow for the full repayment of the RCF prior to its expiration in July 2025. As a result, both the

Group and its banking syndicate have agreed not to further extend the RCF beyond its current

expiry date at this point in time.

Covenants testing

The RCF allows the drawing down of cash up to the level of £160m and the use of bonds and

guarantees up to the level of £75m.

The continued access to these borrowing facilities is subject to quarterly covenant tests which

look back over a rolling 12-month period. In addition, there is minimum liquidity testing at each

week-end point on a four-week historical basis and 13-week forward looking basis. The Group

was in full compliance with its covenants throughout FY24.

During FY24 the covenant terms were:

– EBIT/net interest payable more than or equal to 1.0 times

– Net debt/EBITDA less than or equal to 4.0 times until the Q4 2024 testing point, reducing to

less than or equal to 3.6 times from Q1 FY25 through to the end of the going concern period.

– Minimum liquidity testing at each week-end point on a four-week historical basis and

13-week forward looking basis. Minimum liquidity is defined as ‘available cash and undrawn

RCF greater than or equal to £10m’.

– The spread rates on the leverage ratio remain at the following levels:

Leverage

(consolidated net debt to EBITDA)

Margin (%

per annum)

Greater than 3.5:1 4.35

Greater than 3.0:1 and less than or equal to 3.5:1 4.15

Greater than 2.5:1 and less than or equal to 3.0:1 3.95

In order to determine the appropriate basis of preparation for the financial statements for the

period ended 30 March 2024, the Directors must consider whether the Group can continue in

operational existence for the going concern review period to 28 September 2025, taking into

account the above liquidity headroom and covenant tests.

The terms of the facility agreement also include consideration of future options for the Group

and provision of non-financial deliverables. These requirements have been monitored

throughout the year and have continued to be achieved to the satisfaction of all parties.

Testing assumptions

The Group has prepared profit and cash flow forecasts which cover a period up to 28

September 2025 (Q2 FY26), being the going concern period. This includes the following

quarters: Q2, Q3 and Q4 FY25 and Q1, Q2 FY26 as well as monthly liquidity testing points over

the period.

The Directors consider that a period of at least 14 months to 28 September 2025 is an

appropriate going concern period given this is the first quarterly covenant test which is greater

than 12 months from the opinion date. While the current RCF is due to expire before this date,

the Directors are confident that the further progression of the sale of Authentication will provide

sufficient liquidity within the going concern period (notwithstanding the material uncertainty as

described above).

65 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Viability statement and going concern assessment continued

Base case assumptions

The base case forecasts over the going concern period have been developed taking into

consideration the timing of the Currency recovery that has been materialising in the

marketplace with order book growth and bid activity showing positive signs of a market

rebound. In addition, renewals of key Authentication contracts, combined with the annualization

of contracts already won and starting to produce in the current financial year, aid confidence in

the strategic growth forecasted for that division through the going concern period up to 28

September 2025.

The already enacted and largely completed footprint and restructuring projects have right-sized

the business for current demand levels. Any ramp up required over the going concern period

will be carefully managed in line with pipeline capacity requirements and orders to avoid

significant negative fluctuations against base plans.

FY25 results to date indicate the Group is substantially on-track to deliver the FY25 budget

from an EBIT and EBITDA perspective, with key order book wins secured to deliver the in-year

plan.

In Currency, the Group is seeing clear evidence of the expected market recovery. While the

overall market remains unpredictable, our conversion rate of bids to orders since the beginning

of this financial year supports the base strategic plan numbers. At March 2024, the total order

book stood at £239m (25 March 2023: £137m).

The timing of tenders has been such that several significant orders have been closed recently,

which further supports the base case modelling within the going concern period.

The Group’s base case modelling (excluding the repayment of the RCF on or before 1 July 2025)

shows headroom on all covenant thresholds across the going concern period.

Non-financial milestones

Over the going concern period, there are a number of non-financial milestones such as the

provision of monthly short-term cash flow (STCF) submissions and monthly progress updates.

Management have proactively implemented a bi-monthly 13-week cash flow process with the

outturn of this and monthly monitoring reports shared with the relevant stakeholders in line with

the amended terms from June 2023. The Directors are confident that all of the non-financial

conditions and monthly monitoring will continue to be met over the going concern period.

Downside modelling

Our downside modelling has incorporated the Directors’ assessment of events that could occur

in a ‘severe yet plausible downside’ scenario. The risks modelled are directly linked to the Risk

Committee ‘principal risks’ described on page 56 of this Annual Report and the Directors note

there are no new matters which present additional principal risks. The most significant material

risks modelled were as follows:

Risk 3 Macroeconomic and geo-political risk

– Authentication new wins and implementations are not achieved in the timescales modelled

in the base case.

– Cost inflation in the base case is assumed to be 4.5% in the UK, 1.5% in Malta and 10% in Sri

Lanka, with no corresponding revenue inflation assumption. Inflationary impacts have already

been considered in the FY25 budget, with the Group having sufficient sight of selling prices

and costs that no additional inflationary downside is necessary for FY25 and no element of

recovery on selling prices has been incorporated into any modelling in FY26.

– Supply chain risks are monitored regularly by the Group. Fixed price contracts are in place for

utilities until September 2024 (i.e. the end of Q2 FY25) and latest utility estimates had also

been reviewed from external brokers which confirmed base utility costs are reducing. No

reduction was factored into the base case and with overall inflation pressures already

considered above, the downside risk modelled is appropriate.

Risk 10 Banking facilities

– The Group will be paying an interest rate on its facilities of approximately 9% based on the

current SONIA rate of 5.25% and the applicable margin. The base case modelling is aligned

with the latest forward interest rate curves that indicate a significant reduction in interest

rates over the going concern period. The bonding pipeline was also considered and a £5m

cash collateral expectation has been factored into the base case from July 2024 to support

the strong bid activity around the Group. Under the base case, interest would need to

increase by circa £9.7m at the lowest point for a breach to occur in Q2 FY26. Given the

forward interest rate curves are suggesting a reduction in interest rates, management have

assessed this risk as remote.

Risk 11 Kenya taxation and exit strategy

– Cash outflow assumed over and above the base case, which includes acceleration of

amounts to finalise in-country settlements.

66 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Viability statement and going concern assessment continued

Risk 13 Currency pipeline

– Volumes and budget margins are not achieved as forecasted in the going concern period,

including revenue contracts not landing and volume reductions against base plan. For FY25,

this represents a margin reduction of £6.7m (34%) of our unsecured order book margin as of

June 2024. For currency pipeline downside risks modelled, margins have been determined

using the average margin and/or known unsecured jobs targeted.

As a result of the liquidity testing requirement, the Directors also considered historical monthly

working capital swings over the last three years. This analysis also included assessing periods

where management’s conclusion was that “material uncertainty” existed, specifically between

November 2022 and June 2023. Management also analysed weekly cash outflow averages to

ensure that adequate considerations have been made to capture ‘in quarter’ working capital

swings that the Group can see given the volatility of working capital in the Currency business in

particular. A £15m working capital outflow, excluding non-recurring items, was incorporated on

top of the modelled plausible severe downside to apply monthly to liquidity testing. Sufficient

liquidity headroom remained.

The Directors noted that working capital and cash management have improved in the business

over the course of FY24, resulting in a circa £10m improvement in net debt achieved vs initial

FY24 budgeted expectations. The base case and working capital stress modelling have not been

updated to reflect these improvements, which means there are additional mitigations with

regards to net debt and liquidity that the Company has at its disposal for quarterly testing

dates should they be required.

If all of these modelled downside risks were to materialise in the going concern period, the

Group would still meet its required covenant ratios and maintain sufficient liquidity, after taking

into account mitigating actions, such as identified cost saving opportunities which the Directors

consider to be within the Group’s control, for example the deferral of uncommitted operating

expenditure and a reduction in capital expenditure.

The Group’s ‘severe yet plausible’ downside modelling (excluding the repayment of the RCF on

or before 1 July 2025) shows headroom on all covenant and liquidity thresholds across the

going concern period.

Stress-testing

Under the severe yet plausible downside modelling, EBIT and EBITDA would need to drop in

excess of the Group’s historic forecasting inaccuracy over the last few years for any breach to

occur. On liquidity this would need to drop in excess of what the Group has experienced over

the last three years on recurring cash flow swings. This is taking into account mitigating actions

within the Board’s control, including the timing of supplier payments and capital expenditure.

The Directors have concluded that a breach is remote on the financial covenants given:

– FY25 results to date indicate the Group is materially on-track to deliver the FY25 budget

from an EBIT and EBITDA perspective.

– Management considers that, given the longer-term and consistent nature and renewals of its

Authentication contracts, the key revenue and the corresponding EBIT/EBITDA risk is mainly

in regard to the Currency division whereby the timing of contract wins and delivery of the

current order book in line with the strategy has historically impacted performance against

forecasts in previous periods. The Currency order book is showing encouraging signs of

recovery, with an order book increase supported by a continued trend in win rates and the

multi-year nature of the order book. For FY25, 68% of budgeted revenue had already been

secured by June 2024.

– Severe stress testing of liquidity excluded mitigating actions, as noted above, that

management could employ and still showed headroom under stress. The Directors consider

the liquidity risk to be low given the current trading performance and order book profile.

– Additionally, the Group is currently paying an interest rate on its facilities of approximately

9% based on the current SONIA rate of over 5% and the applicable margin. As previously

noted, the increase in underlying SONIA rate required to breach covenants is deemed to be

remote by the Directors.

– The Directors are comfortable that any non-financial conditions and reporting requirements

have been achieved and will be throughout the going concern period.

Additional modelling

In addition to the above, management have performed modelling that assumes the theoretical

sale of the Authentication division. This modelling took into account the expected use of funds,

which includes full repayment of the RCF, mitigation of any risk to the De La Rue UK defined

benefit pension scheme and expected transaction costs. This modelling indicated sufficient

cash liquidity, including the expected use of funds, between the theoretical completion date

and the end of the going concern period, taking into account the required liquidity of the

remaining Group through to 28 September 2025, with the Group benefitting from reduced

interest costs in particular.

67 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Viability statement and going concern assessment continued

However, management acknowledge that the probability and timing of completion and final

agreed terms of any such transaction are subject to factors outside of the Board’s control,

which could lead to a scenario whereby the Group and Company would have to seek alternative

financing to repay the RCF on or before 1 July 2025, or obtain an extension to the RCF from the

lenders. Both of these options are outside of the Board’s control.

Furthermore, even in the event that the transaction is completed prior to 1 July 2025 and the

RCF is repaid, the amount that will be retained by Group is subject to factors outside of the

Board’s control, having taken into account the Group’s cash position on disposal, the final sale

price, transaction costs and any cash outflows addressing the pension risk.

Conclusion

Based on the above, the Board has concluded the following:

1. Both the base case modelling and the severe yet plausible modelling indicate that the Group

would generate sufficient positive cashflows to continue operating as a going concern over

the 14-month period ending 28 September 2025, excluding the need to repay the RCF on or

before 1 July 2025. Similarly, there would be no expected breaches of financial and non-

financial covenants (assuming no changes to the existing covenants).

2. Given recent discussions, the Board is confident that further progression of the sale of

Authentication will ultimately allow the Group to repay in full the RCF before its expiration on

1 July 2025, satisfy future bonding requirements, mitigate any risks to the De La Rue UK

defined benefits pension scheme, and continue to operate the remaining business as a

going concern.

3. Management’s base case modelling indicates that the Group would not have sufficient funds

or the ability to repay the RCF on or before 1 July 2025 when it becomes due, given that the

timing, probability of completion and terms of the sale of the Authentication division are

subject to factors outside of the Board’s control. The circumstances which would follow

non-repayment of the RCF on or before 1 July 2025, including the manner in which the

Group’s lenders would seek to recover funds, would not be within the control of the Directors.

Furthermore, even in the event of a transaction completing, the proceeds that will be

retained (and immediately available) in the Group to address its ongoing liquidity

requirements following the repayment of the RCF, are subject to factors outside of the

Board’s control. These include the Group’s cash position on disposal, the final sale price,

transaction costs and any cash outflows addressing the pension risk. These matters

represent a material uncertainty which may cast significant doubt upon the Group’s ability

and the Company’s ability to continue as a going concern for a period up to 28 September

2025.

The financial statements do not contain the adjustments that would result if the Group and

Company were unable to continue as a going concern

Viability statement

The Directors have considered the longer-term viability of De La Rue Plc in line with the

recommendations under the UK Corporate Governance code. Consistent with the prior year,

the Directors believe that an appropriate period to consider the Group’s viability is over a

two-year period from the balance sheet date (FY25 and FY26) or 20 months from the date of

approval of these financial statements, to 28 March 2026. This includes the period to the end of

the existing RCF and an assumption that this facility would be fully repaid with the conclusion of

the strategic options as detailed above.

In assessing the viability of the Group, the Directors have reviewed the principal risks as set out

in pages 56 to 63 and considered foreseeable scenarios of one or more of the principal risks

crystallising in the same time period in the context of its strategic plan. The main risks modelled

to have an impact on the viability of the Group are set out below, with the quantitative impacts

modelled being consistent with those adopted for the Going Concern period as set out in

pages 66 to 67:

– Risk 3 Macroeconomic and geo-political

– Risk 10 Banking facilities

– Risk 11 Kenya taxation and exit strategy

– Risk 13 Currency pipeline

There are certain scenarios that the Directors have not individually modelled (e.g. a terrorist

attack or an event of nature) as either sufficient insurance coverage exists or the risk is covered

by the modelling performed on certain scenarios for other principal risks.

The Directors are satisfied that, if the discussions relating to the Group’s Authentication division

conclude in a sale of that division on the terms currently under discussion (notwithstanding the

material uncertainty as detailed within the Conclusion section of the Going Concern disclosure

on this page), there would be adequate proceeds from the transaction to fully repay the RCF,

satisfy future bonding requirements, mitigate any risks to the De La Rue UK defined benefits

pension scheme, and continue to operate the retained business as a viable business until at

least 28 March 2026, being the end of the viability assessment period. However, the Directors

consider that the material uncertainty referred to in respect of going concern may cast significant

doubt over the future viability of the Group and company should these events not complete.

Strategic report

This Strategic report, comprising pages 2 to 68 inclusive, was approved by the Board

on 24 July 2024.

By order of the Board

Jon Messent

Company Secretary

24 July 2024

68 De La Rue plc Annual Report 2024 Governance report Financial statementsStrategic report

Board leadership and company

purpose 70

Board of Directors 72

Governance at a glance 74

Division of responsibilities 78

Nomination Committee report 80

Audit Committee report 84

Risk Committee report 91

Ethics Committee report 92

Remuneration 94

Directors’ report 113

Directors’ responsibility statement 117

Governance report

Securing trust

Delivering our purpose requires clear

and visible leadership, the right culture

and robust corporate governance.

This enables us to earn and repay

our stakeholders’ trust.

The Company’s

governance structure is

intended to ensure that

we are able to focus on

the right issues, at the

right time.

Trusted

Strategic report Governance report Financial statements69 De La Rue plc Annual Report 2024

De La Rue’s purpose is to secure trust between

people, businesses and governments.

We operate in markets where security, integrity

and accountability are paramount.

Delivering our purpose requires clear

leadership, an open and honest culture

together with robust corporate governance.

This enables us to earn the trust of our

stakeholders.

Dear Shareholder,

I am pleased to present the

Governance Report for FY24, my

first year as your Chairman. We

believe that high standards of

corporate governance are vital in

helping to create and protect value.

We set out on the following pages

how the Board has worked to

promote good governance and is

conducting our business

responsibly, taking our

stakeholders’ interests into

account.

Strong governance

We are committed at De La Rue to

do business in the right way. We

have a robust governance

framework, which helps to create

the checks and balances for us to

deliver the business outcomes and

financial results that we and our

stakeholders wish to see.

Board changes

As you will read further in the

Nomination Committee report on

page 80, this year has seen

substantial changes to the

composition of the Board. The

previous Chairman, Kevin

Loosemore, and Non-executive

Directors Catherine Ashton and

Margaret Rice-Jones retired from

the Board during 2023. In addition

Rob Harding resigned as Chief

Financial Officer to pursue another

opportunity. I would like to take this

opportunity to thank them all for

their significant contributions to

De La Rue over their tenures. During

the year we welcomed Dean Moore

initially as independent Non-

executive Director, but subsequently

as Interim Chief Financial Officer, and

Brian Small to the Board as an

independent Non-executive

Director. You can read more on their

inductions to the De La Rue Board

on page 82.

In terms of Board diversity, our levels

are not where we want them to be

for the longer term, and we will

continue to keep this under review

when appointment opportunities to

the Board become available. I am

confident that we have the right

combination of skills, expertise and

knowledge for the Board for

De La Rue’s current stakeholder

needs, with members who are

passionate about the business.

We have the right Board for the

Company, and we were able to staff

this quickly and effectively to meet

the Company’s immediate and

ongoing challenges. Further, we

continue to keep succession

planning and talent development

under review. You can see our

diversity levels across the business

and more information on the

opportunities available to our

employees on pages 37 and 81.

Owing to the number of changes to

the Board, our internally led Board

evaluation focused on looking

ahead and how we can work

together to deliver sustainable

shareholder value. I am pleased to

report that the results from the

evaluation were positive, and as

such all Directors are proposed for

re-election at the 2024 AGM. You

can read more on this on pages 82

to 83.

Board leadership and company purpose

Read more on Board

inductions on page 82

See the key activities

of the Board on page 76

70 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Our workforce

We have a committed and

hardworking workforce at De La Rue,

and we recognise that our people

are key to the success of the Group.

There continues to be significant

change throughout the organisation

and we are immensely grateful for

the efforts of every single individual

during this time.

Since joining the Group, I have been

able to attend our Employee Voice

Forum, to listen first hand to what

our employees are proud of about

working for De La Rue, and to hear

any matters they wished to share

with the Board. You can read more

on this on page 77.

Annual General Meeting

Our forthcoming AGM will be hosted

at our head office in Basingstoke on

25 September 2024. Alongside my

fellow Directors, I hope that you are

able to join us.

Clive Whiley,

Chairman

Compliance statement

The Board encourages a culture of

strong governance across the

business and continues to apply the

principles of good governance set

out in the Financial Reporting

Council’s (FRC) July 2018 edition of

the UK Corporate Governance Code

(the Code), which can be found at

www.frc.org.uk. The Board considers

that it and the Company have,

throughout the period to 30 March

2024, complied with all of the

provisions of the Code.

The FRC has recently published an

updated Code whose provisions will

largely apply for financial years

starting on or after 1 January 2025.

We will continue to review our

practices and procedures as

appropriate to ensure the Board

complies with the new Code.

This Governance section has been

organised to follow the structure and

principles of the Code to illustrate

how we have applied the Code

throughout the year.

UK Corporate Governance Code 2018

Board leadership and company purpose continued

Chairman’s

introduction

– Chairman’s introduction

– Board of Directors

– Governance framework

– Key matters considered

by the Board

– Employee relations

– Shareholder relations

– Our behaviours

Division of

responsibilities

– Division of responsibilities

– Independence and

Time commitments

Composition,

succession and

evaluation

– Nomination Committee report

– Board composition

– Board induction

– Succession planning

– Board evaluation

Audit, risk and

internal control

– Audit Committee report

– Key accounting matters

– Financial reporting

– External auditors

– Internal audit

– Internal control and

risk management

– Risk Committee report

– Ethics Committee report

Remuneration

– Remuneration

Committee report

– Directors’ Remuneration report

– Annual report on remuneration

100

71 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Appointed to the Board on

18 May 2023

Current directorships and

business interests

– Mothercare plc, Chairman

– Sportech plc, Non-executive Director

– Griffin Mining Limited, Non-executive

Director

Career, skills and experience

Clive has 40 years’ experience, both as

an Executive and Non-executive

Director, across a wide range of

industries and geographies in regulated

and listed company governance

positions. He was previously Chairman

of Dignity plc and a Non-executive

Director of Grand Harbour Marina plc

(listed in Malta), Camper & Nicholsons

Marina Investments Limited and Stanley

Gibbons Group plc.

Clive was responsible for successfully

guiding Mothercare’s emergence as an

internationally-focused brand business

alongside, at Dignity, leading 12% of the

UK funeral market in the eye of the

Covid-19 pandemic.

Contribution to long-term

sustainable success

Clive’s track record demonstrates that

he is capable of operating in all

operational, financial or regulatory

circumstances and the Board believes

his depth of experience and skills are

what is required to pilot the business.

Appointed to the Board in

October 2019

Career, skills and experience

Clive has extensive experience in

running complex P&Ls for global

industrial companies in both the

commercial and government/defence

sectors. He has a track record of

turnarounds, international business

transformation and strategic

development, including leading divisions

of international corporations and

standalone listed companies.

Clive was a Director, President and Chief

Executive Officer of Canadian-listed

Dynex Power, leading its privatisation

sale to the Chinese Rail and Rolling Stock

Company in March 2019. Previously, he

held senior leadership positions with

Pratt and Whitney, Rolls-Royce, General

Dynamics Corporation and B/E

Aerospace.

Clive is an alumnus of MIT, Stanford,

Columbia and the LSE and currently sits

on the advisory board of the Lincoln

International Business School at the

University of Lincoln, UK.

Contribution to long-term

sustainable success

Clive has a strong track record of

delivering successful turnaround

strategies in a range of industries.

Appointed to the Board as an

Independent Non-executive Director

on 26 June 2023 and as Interim Chief

Financial Officer on 4 August 2023

Current directorships and

business interests

– Griffin Mining Limited, Non-executive

Director

– THG plc, Non-executive Director

Career, skills and experience

Dean is a chartered accountant with

over 35 years of public company

experience in companies operating in

many different sectors and

environments. He is a highly respected

finance professional and non-executive

director with a proven track record.

He was previously Chief Financial Officer

at Dignity plc, Cineworld plc (on an

interim basis), N Brown Group plc, T&S

Stores plc and Graham Group plc, and

formerly Non-Executive Chair at Tuxedo

Money Solutions Limited and

Independent Non-executive Director at

Dignity plc, Cineworld plc and Volex Plc.

Contribution to long-term

sustainable success

Dean’s significant experience of the

strategic development of listed

companies, in both senior executive

roles and in non-executive

appointments is ideally suited to

supporting the Board and the executive

team in delivering future growth.

Appointed to the Board in April 2021

Career, skills and experience

Ruth joined De La Rue in 1988 as a

graduate trainee and has spent over

30 years working in the international

government sector, living and working in

the UK, Mexico, Colombia, Spain and

Malaysia.

During her career at De La Rue, she has

held a number of executive

management positions within the

Currency, Identity and Brand businesses

in Sales, Marketing, Manufacturing and

General Management. Ruth was

appointed Managing Director of the

Currency Division in 2019. Prior to that

she was Sales Director for the Currency

businesses from 2012 until 2019.

In 2018, Ruth joined the advisory board

of the International Currency

Association, helping lead the currency

industry in creating a single, cohesive

voice. She was elected its Vice-Chair in

2022. She is also a member of the

advisory council for Commonwealth

Enterprise and Investment Council.

Contribution to long-term

sustainable success

Ruth has an unrivalled knowledge of the

international currency market, and

extensive contacts in finance ministries,

central banks and state print works

around the world.

Clive Vacher,

Chief Executive Officer

Clive Whiley,

Chairman

Our Board is composed

of highly skilled, highly

entrepreneurial individuals

who bring a range of skills,

perspectives and corporate

experiences from multi-billion

pound revenue companies to

our boardroom discussions.

Key for committees

Nomination Committee

Audit Committee

Risk Committee

Ethics Committee

Remuneration Committee

Committee Chair

Ruth Euling,

Executive Director and MD,

Currency

Dean Moore,

Interim Chief Financial Officer

Board of Directors

72 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Appointed to the Board in July 2016

Current directorships and

business interests

– Travelport Worldwide Ltd, CFO and

EVP

Career, skills and experience

Nick has extensive international

experience in the technology and

information security industries. In 2019,

he was appointed as Chief Financial

Officer of travel technology company,

Travelport. Before joining Travelport, he

served as Chief Financial Officer of

security software firm, Sophos Group

plc, for over nine years. Nick was also

Chief Financial Officer at Micro Focus

International plc, having previously held

CFO roles at Fibernet Group plc and

Gentia Software plc. Prior to that, he

held various senior financial positions at

Comshare Inc. and Lotus Software.

Contribution to long-term

sustainable success

Nick is a chartered accountant and

highly experienced CFO, with strong

strategic management skills.

Appointment to the Board in

September 2022

Current directorships and

business interests

– TT Electronics plc, CFO and

Executive Director

Career, skills and experience

Mark is a chartered accountant with a

deep understanding of finance and

operational activities, acquired during a

career spent in senior finance/

management roles with FTSE listed

companies. He has been a Director of TT

Electronics plc and its Chief Financial

Officer since January 2015 and

previously held equivalent roles with

BBA Aviation plc. His other previous

experience includes several years

working in a variety of management

roles in Continental Europe and Australia,

as well as a strong focus on driving

business transformation in the US.

Mark has spent the last 25 years working

in global industrial businesses and has

extensive experience of driving business

and functional re-structuring and

transformation, M&A, and equity and

debt capital markets.

Contribution to long-term

sustainable success

Mark is a strategically-minded chartered

accountant, with extensive financial

management experience in complex

global manufacturing businesses and

strong experience in listed companies

and public markets.

Appointment to the Board on

8 September 2023

Current directorships and

business interests

– Pendragon plc, Non-executive

Director

– Mothercare plc, Non-executive

Director

Career, skills and experience

Brian is a chartered accountant and an

experienced FTSE 250 CFO with broad

general management experience in

retail, wholesale and consumer-branded

manufacturing. Brian was the CFO for

JD Sports Fashion plc from 2004 to

2018 before retiring to focus on

non-executive roles. He was also a

Non-executive Director of Boohoo.com

from 2019 to 2023.

Contribution to long-term

sustainable success

Brian’s tenure as a FTSE250 CFO which

provides valuable knowledge and

experience to the Board.

Appointed as General Counsel on

3 April 2023 and as Company

Secretary on 11 April 2023

Career, skills and experience

Jon brings to De La Rue a wealth of

experience in Company Secretarial,

Legal and Governance, having held

numerous executive roles in both listed

and private companies operating in

industrial, manufacturing, property,

security and the defence sectors. His

most recent role was as Group General

Counsel and Company Secretary with

QinetiQ Group plc, a multi-national FTSE

250 operating primarily in the defence,

security and critical national

infrastructure markets.

Brian Small,

Independent Non-executive

Director

Jon Messent,

General Counsel and

Company Secretary

Mark Hoad,

Independent Non-executive

Director

Board of Directors continued

Nick Bray,

Senior Independent Non-executive

Director

Securing trust:

…with a broad agenda

The Board regularly

discusses strategy, financial

and operational matters,

people, culture and

governance. The key

matters discussed by the

Board can be found on

page 76.

…with the right skills

Having the right skills and

knowledge on the Board is

essential for decision

making and driving the

evolution of our business.

To see the results from our

internal board effectiveness

review go to pages 82 to 83.

…with strong controls

Ensuring we consider the

Group’s risks and

monitoring our financial and

narrative reporting is vital

alongside our external and

internal auditors. To read

about our relationship with

them, go to pages 88 to 90.

73 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Governance at a glance

Corporate

governance is the

system by which

companies are

directed and

controlled, being a

combination of

people, structures

and processes

matter expertise to devote time and

attention to the areas where they

can make a difference.

Reports from the Nomination, Audit,

Risk, Ethics and Remuneration

Committees are included later in this

Governance report.

Attendance at scheduled

Board meetings

The Board met on eight scheduled

occasions during the year, with

additional meetings held as required

to provide approvals or discuss

matters at short notice, which did

not always require attendance from

all Board members. Attendance at

the scheduled Board meetings is

shown below.

Where a Director is unable to

participate in a Board meeting, they

review the meeting materials and

communicate their opinions and

comments on the matters to be

considered to the Chairman of the

Board.

Clive Whiley 8/8

Clive Vacher 8/8

Dean Moore

6/6

Ruth Euling

7/8

Nick Bray 8/8

Mark Hoad 8/8

Brian Small

5/5

Rob Harding

3/3

Catherine Ashton

1/1

Margaret Rice-Jones

3/3

Notes:

1 Appointed to the Board on 26 June 2023

2 Ruth Euling was unable to make one Board

meeting due to a conflicting prior appointment

3 Appointed to the Board on 8 September 2023

4 Resigned from the Board on 28 July 2023

5 Resigned from the Board on 12 June 2023

6 Resigned from the Board on 7 September 2023

Governance in support of the

corporate purpose

Our corporate purpose is to secure

trust between people, businesses

and governments.

To enable us to fulfil our purpose and

support our customers and our

stakeholders, De La Rue needs

robust internal structures and

processes. These are designed to

ensure, as far as possible, that we are

trusted by our stakeholders.

Those structures and processes

combine to make up our corporate

governance framework. By training

our people in what is expected of

them and how we expect things to

be done, we create the conditions

under which we can fulfil our

corporate purpose.

Corporate governance

The Company’s governance

structure is intended to ensure that

the right people are able to focus on

the right issues, at the right time. The

goal is to create and preserve value

for all our stakeholders, including our

shareholders.

As well as the Board Committees

recommended by the Code, we have

created a mix of Board and

management committees that

consider the key issues and risks

facing the Company. This enables

groups with the required subject

Board attendance

98%

Board independence

excluding the independent

Chairman

50%

74 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

* The Board also operates a Disclosure Committee, chaired by the Chairman, which oversees the governance and control of the disclosure of inside information in accordance with market abuse regulations.

Our governance

framework

Certain Board

responsibilities are

delegated to formal

Board committees

which play an important

governance role.

Governance at a glance continued

Board Committees*

Certain matters are delegated to Committees of the Board. The terms of reference for these Committees can be found on the De La Rue website at www.delarue.com.

Board

Board committees

Management committees

The Board sets the Group’s purpose, strategy and goals and monitors the delivery of these. In addition, the Board has duties to stakeholders and to deliver returns to shareholders

sustainably over the longer term. A key responsibility of the Board is overseeing and monitoring (with the support of the Audit Committee, Risk Committee and Ethics Committee)

our risk management programme and internal control environment.

Strategy: see pages 18 to 20 S.172 Statement: see pages 21 to 23Risk Management: see pages 56 to 63 Finance review: see pages 50 to 55

Management Committees

These Management Committees support the Board and provide governance oversight on certain matters.

Executive Leadership Team

– Operates under the direction and authority of the Chief Executive Officer.

– Manages the day-to-day running of the Group and its business.

– Develops and implements strategy, monitoring the operating and financial performance and the prioritisation and allocation of resources.

CEO review: see pages 6 to 10 KPIs: see pages 46 to 49

The Board

75 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Sanctions Board

– Responsible for ensuring internal control procedures are in place to mitigate the risk

of breaching applicable trade sanctions and embargos.

– Reports into the Ethics Committee.

For more information: see page 43

Group Health, Safety and Sustainability Committee

- Makes recommendations on health & safety and sustainability strategy.

- Monitors compliance with H&S and sustainability obligations.

- Tracks key H&S and sustainability KPIs.

- Recommends appropriate training and actions to maintain H&S and sustainability

improvements and performance.

For more information: see page 38

Nomination Committee

Reviews the structure, size and

composition of the Board and its

Committees, managing

succession planning to ensure a

balance of skills, knowledge and

experience and having regard to

diversity.

See pages 80 to 83

Audit Committee

Reviews and monitors the

integrity of the Company’s

financial reporting, risk

management systems and

internal controls and the

effectiveness of the internal audit

function and external auditors.

See pages 84 to 90

Risk Committee

Oversees the Group’s risk

management framework.

Identifies, evaluates and monitors

the principal risks facing the

Group and reviews mitigation

activities.

See page 91

Ethics Committee

Makes recommendations to the

Board on ethical matters and

reinforces the Group’s

commitment to ensuring

business ethics are a fundamental

and enduring part of the Group’s

culture.

See pages 92 to 93

Remuneration Committee

Implements the approved

Directors’ remuneration policy,

sets pay for the Chairman and

Executive Directors, and monitors

the policies and practices applied

to senior management

remuneration.

See page 94 to 112

Governance at a glance continued

Key matters considered by the Board in FY24

There is regular dialogue between the Chairman, Chief Executive Officer, and Company Secretary to ensure that the Board agendas contain the

appropriate mix of strategy, financial and operational, people, culture and governance matters to ensure the Board is able to discharge its duties

effectively. Key matters considered during FY24 include:

– Ongoing updates from the

Executive Directors on the

amendment and extension to

bank facilities

– Ongoing updates from the

Chairman on discussions with

the pension trustee and

pension regulator

– Approval of and, where

appropriate, ratification of large

bids, and of appointments of

high-level third party partners

– Updates from the Managing

Directors of both Currency and

Authentication divisions

– Review and approval of strategy

for FY24 to FY27

– Approval of the budget for FY25

– Updates from the Risk

Committee on principal risks

and uncertainties across the

Group

– Confirmed the Group’s risk

appetite and which risks should

be insured

– Health, Safety, Security and

Environmental updates

– Cyber security updates

– Ongoing updates on the

engagement with large and

institutional shareholders

throughout the year in relation

to Board composition

– Received and considered

feedback from institutional

investors and regular investor

relations reports

– Agreed that the Chairman

would be the Workforce

Engagement Director and

engage with employees via the

Employee Engagement Forum

– Held the Annual General

Meeting with all Directors

standing for reappointment

being reappointed

– Approved the half and full year

financial statements and the

Annual Report and Accounts

– Approved the Going Concern

and Viability statements

– Reviewed trading performance

– Reviewed and approved the

April 2023, September 2023

and October 2023 trading

statements and considered

media reaction and institutional

investor feedback

– Approved the updated Tax

strategy

– Appointment of Clive Whiley as

Chairman

– Appointment of Dean Moore as

Non-executive Director and

later as Interim Chief Financial

Officer

– Appointment of Brian Small as

Non-executive Director and

Chair of the Remuneration

Committee

– Appointment of Mark Hoad as

Chair of the Audit Committee

– Appointment of Nick Bray as

Senior Independent Director

– Undertook a 2024 Board

effectiveness review

– Approved the updated Modern

Slavery Statement

Strategy and financing Stakeholder engagementMonitoring and managing risk Reporting and accountability Ensuring good governance

Key activity timeline

– Half year results – Appointment of interim CFO

– Trading Update

– Resignation of Kevin Loosemore

as Chairman

– Appointment of Clive Whiley as

Chairman

– Trading Statement – Appointment of joint broker

– Dean Moore appointed as

Interim CFO

– Brian Small appointed as

Non-executive Director

– Results of AGM

– Trading Update

– Resignation of Catherine Ashton

and Margaret Rice-Jones

– Appointment of Dean Moore as

Non-executive Director

– Full year results

February MarchDecember JanuaryApril May October NovemberAugust SeptemberJune July

– Publication of Annual Report

and Notice of AGM

Our strategic pillars

Grow repeatable business

Drive efficient operations

Invest for the future

76 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Governance at a glance continued

Employee relations

The Board understands that having

the right corporate culture comes

from the top and is a critical enabler

for both the delivery of the

Company’s strategy and the

maintenance of effective risk

management and internal controls.

The Directors recognise that they

must lead by example, promoting

ethics and integrity in line with our

standards. We continue to build a

high-performance culture across the

business to support the delivery of

our strategy.

As employees are one of the Group’s

key stakeholders, the Board has

monitored employee engagement

throughout the year including:

– Receiving updates from the

Executive Leadership Team (ELT)

– Receiving reports from Group

Director of HR

– Reviewing and approving

succession and talent frameworks

– Attendance by the Chairman at

the Employee Voice Forum,

having an open conversation with

employees focused on what has

gone well, any challenges faced

by employees, and whether there

was anything employees felt the

Board should be made aware of.

– The Executive Directors attending

site visits throughout the year to

meet employees in person. In

particular this year, Clive Vacher

visited sites in Westhoughton,

Malta, Gateshead and Dubai and

Ruth Euling visited our Debden

and Westhoughton sites.

As set out in the Responsible

business report on pages 24 to 45

we also launched management

fundamentals training and a range of

wellbeing sessions on a variety of

topics including neurodiversity,

mental health and the importance of

staying healthy.

Shareholder relations

The Board considers the views of the

Company’s current and potential

shareholders to be important and

looks to engage with shareholders

whenever possible. We run an active

investor relations programme with

our major shareholders, led by the

Chairman, and in which the CEO,

CFO and Senior Independent

Director are involved who all provide

feedback to the Board. During the

year, the Board worked on an

accelerated appointment plan for a

new Chairman, and the engagement

with shareholders in respect of Clive

Whiley’s appointment was led by

Nick Bray as Interim Chair at the time.

During the year, Clive Whiley

engaged with the Company’s

principal institutional investors via

one-to-one meetings and group

meetings. These meetings were

attended by various senior

executives including the Chief

Executive Officer, who met with

holders of the majority of the issued

share capital during the year.

The key focus of shareholder

engagement throughout the year

was Board composition and the

appointment of Clive Whiley as

Chairman, banking facilities and the

strength of the Company’s balance

sheet – see page 23 for more

information.

Our principal engagement with our

retail shareholder base is at the

AGM, at which all Directors attended

in person, and our Committee Chairs

were available to answer questions.

We also webcast our results

presentations, allowing any

shareholder to listen in, and these

are also available subsequently on

our website.

At the 2023 AGM, the resolution

relating to the authority to allot

additional shares on a non-pre-

emptive basis received votes against

in excess of 20%, which is seen as

significant by the Investment

Association.

The Board was disappointed in this

outcome, given that the resolution

followed the provisions of the

Pre-Emption Group’s Statement of

Principles. Further, the authority

sought would have been limited to

issuance of equity for cash in

connection with an acquisition or

specified capital investment.

Subsequent to the AGM, we have

engaged with our largest

shareholders to understand their

views on this resolution, which

included that this authority could

result in inappropriate levels of

dilution. The Board will continue to

propose resolutions to shareholders

which it considers to be in the best

interests of the long-term success

of the Company.

Our behaviours

All businesses depend on a skilled,

dedicated and motivated workforce

in order to deliver their strategy. It is

therefore critical that the way in

which we manage our workforce

supports the long-term sustainable

success of the Group. We aspire to

the highest standards of business

conduct based on integrity,

transparency and collaboration.

We have a Code of Business

Principles which sets out our

corporate values and how we expect

our employees to conduct business.

This is supplemented by the People

Managers’ Charter, which sets out

our expectations for all levels of

leadership.

Our culture is inclusive, and we seek

to improve it continuously. Therefore,

we encourage our workforce to

speak up to raise any concerns

about ethical breaches or

malpractice. As part of this, we have

a dedicated whistleblowing hotline

to allow matters to be raised

confidentially or anonymously by

all employees.

For more information see the

Responsible Business section on

pages 42 to 45.

77 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Division of responsibilities

As at 30 March 2024 the Board had

seven members, being the Chairman,

three Executive Directors (the Chief

Executive Officer, the Interim Chief

Financial Officer and the Managing

Director, Currency) and three

Non-executive Directors. Biographies

setting out the skills and experience

of the Directors are set out on pages

72 and 73. There is a clear division

between Executive and Non-

executive responsibilities which

ensures appropriate accountability

and oversight.

The Directors are, individually and

collectively as a Board, accountable

to shareholders for their performance

and for governance throughout the

Company, supported by the

Company Secretary.

The Chairman and the Non-

executive Directors meet regularly

without the Executive Directors

present and, at least on an annual

basis, the Non-executive Directors

meet without the Chairman.

The Board meets regularly

throughout the year, follows a formal

work programme and has adopted

a schedule of matters which are

required to be brought to it for

decision on a timely basis. The key

areas for the Board’s sole decision

include Group strategy, long-term

objectives and budgets, the Group’s

values and culture, approval of

annual and interim results,

acquisitions, disposals and material

business changes, internal control

and risk management systems, any

changes to the Group’s capital

structure, and the dividend policy.

The Board delegates some of its

responsibilities to the Nomination,

Audit, Risk, Ethics and Remuneration

Committees. The work of these

Committees can be found on pages

80, 84, 91, 92 and 94. Each of these

Committees has its own terms of

reference which can be found on our

website.

The Board also delegates certain

operational matters to the Executive

Leadership Team, who meet regularly

to communicate, review and agree

on issues and actions of Group-wide

significance. The ELT develops,

implements and monitors strategic

and operational plans, and considers

the continuing applicability,

appropriateness and impact of risk.

It leads the development and

implementation of the Group’s

culture and aids the decision making

of the Executive Directors in managing

the business.

There is a clear division of

responsibilities between the roles

of the Chairman, Chief Executive

and Senior Independent Director.

This is set out in writing and

agreed by the Board, and is

available on the Company’s

website, www.delarue.com. This is

summarised in the following table.

As Chairman, Clive Whiley is

responsible for:

– Providing leadership of the

Board, setting its agenda, style

and tone, promoting

constructive challenge, debate

and sufficient time for

discussion.

– Ensuring information flows from

the Executive Directors to the

Board and from the Board to

key stakeholders, therefore

facilitating constructive Board

relations and the effective

contribution of all Directors.

– Having oversight and

responsibility for the

composition and capability of

the Board, its Committees and

senior management, including

acting as Chair of the

Nomination Committee and the

Ethics Committee.

– Ensuring high standards of

corporate governance and

probity throughout the Group

are established and maintained.

– Developing and maintaining

constructive relationships

with the Company’s investors

and lenders.

In his role as Chief Executive

Officer, Clive Vacher is

responsible for:

– Maintaining and motivating a

senior management team with

the appropriate knowledge,

experience, skills and attitude

to manage the Group’s

day-to-day activities.

– Demonstrating personal

leadership and a management

style which encourages open

working relationships at all

levels within the Group.

– Ensuring, alongside the Chief

Financial Officer, the control

and coordination of the Group’s

financial and funding policies as

approved by the Board.

– Ensuring that the Company has

in place appropriate and robust

risk management and internal

control mechanisms including

health, safety and

environmental policies and

wellbeing of its workforce.

– Leading on the Group’s

sustainability strategy and

climate change related

commitments.

– Setting the operating plans and

budgets required to deliver the

strategy.

– Engaging with shareholders and

key stakeholders and briefing

the Board in any material views

and issues.

As Interim Chief Financial Officer,

Dean is responsible for:

– Supporting the Chief Executive

Officer.

– Managing the Group’s finance

strategy, financial reporting, risk

management and internal

controls.

– Managing the programme of

meetings with investors.

– Providing leadership to the

finance function.

Chairman

Clive Whiley

Chief Executive Officer

Clive Vacher

Interim Chief Financial Officer

Dean Moore

78 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Division of responsibilities continued

Independence and

time commitments

All the Non-executive Directors are

considered to be independent, both

in thought and relative to the criteria

set out in the Code.

The Chairman and each of the

Non-executive Directors have a

breadth of strategic, management

and financial experience gained in

their specialist areas in a range of

multinational businesses. No one

individual or small group of

individuals dominates the Board’s

decision making.

The Board has established a process

to review at least annually any actual

or potential conflict of interest, the

most recent review being March

2024. Any transactional conflicts are

required to be notified, and would be

reviewed, as they arise.

As part of a Non-executive Director’s

selection process, candidates are

asked to confirm that they will have

sufficient time to meet their

responsibilities as Directors and to

undertake not to accept any further

appointment without first clearing

the proposed role with the Chairman.

In his role as Senior Independent

Director, Nick:

– Is available to shareholders if

they have concerns which

contact through the normal

channels of Chairman, Chief

Executive Officer or Chief

Financial Officer has failed to

resolve, or for which such

contact is inappropriate.

– Is available to other Directors

should they have any concerns

which are not appropriate to

raise with the Chairman or

which have not been

satisfactorily resolved by the

Chairman.

– Leads on any recruitment of a

new Chairman, other than when

being considered for the

position.

In her role as Executive Director,

Ruth is responsible for:

– Supporting the Chief Executive

Officer.

– Delivery of the Currency

division’s operational and

financial performance.

As members of the ELT, all

Executive Directors have a wider

responsibility for monitoring the

delivery of intended goals across

the entire business, and for

implementing and maintaining

appropriate risk management

processes and internal controls.

In their roles as Non-executive

Directors, Nick Bray, Mark Hoad

and Brian Small:

– Provide constructive challenge

and contribute to the

development of strategy.

– Review the performance of

management in meeting agreed

goals and objectives and

delivering against business

plans and budgets or forecasts.

– Monitor the accuracy and

completeness of financial and

narrative information provided

to the market.

– Assist in the establishment of a

framework of prudent and

effective controls, which enable

risk to be assessed and ensure

that the systems of risk

management and internal

control are robust and

defensible.

– Monitor succession planning

and management development.

– Ensure that the voice of the

workforce and other

stakeholders is considered by

the Board.

– Are members of the

Nomination, Audit, Ethics and

Remuneration Committees.

In addition to their roles, Mark

Hoad is responsible for chairing

the Audit Committee and Brian

Small for chairing the

Remuneration Committee.

As Company Secretary, Jon:

– Supports the Chairman in

ensuring a timely flow of high

quality information to the

Directors.

– Advises the Board on regulatory

compliance and corporate

governance matters.

– Acts as point of contact for

investors on matters of

corporate governance.

– Ensures probity and good

governance practices at Board

level and throughout the Group.

– Is responsible for chairing the

Risk Committee.

Senior Independent Director

Nick Bray

Other Executive Director

Ruth Euling

Independent Non-executive

Directors

Nick Bray

Mark Hoad

Brian Small

General Counsel & Company

Secretary

Jon Messent

79 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Nomination Committee report

Dear Shareholder,

I am pleased to present to you my

first Nomination Committee report

as Chairman for the period ended

30 March 2024. This year, the

Committee has been involved with a

significant number of Board changes,

and ensuring that the Board is

comprised of the appropriate skills

and experience.

Board and Committee changes

Firstly, Kevin Loosemore stepped

down as Chairman on 1 May 2023,

and following an accelerated and

comprehensive selection process

led by Nick Bray as Senior

Independent Director, I was

appointed as Chair on 18 May 2023.

Dean Moore was appointed in June

2023 as Non-executive Director, and

subsequently Interim Chief Financial

Officer in August 2023, following the

departure of Rob Harding as Chief

Financial Officer in July 2023 at the

end of his notice period.

Both Catherine Ashton and Margaret

Rice-Jones retired from the Board

in June and September 2023

respectively and we appointed Brian

Small as Non-executive Director and

Chair of the Remuneration

Committee in September 2023.

Brian, as a chartered accountant and

an experienced FTSE 250 CFO,

provides valuable experience and

knowledge to the Board.

My appointment as Chairman was

conducted through Russell Reynolds,

an external search consultancy,

which had no other connection to

the Company or its directors.

Board diversity

Diversity, equality and inclusion

continue to be areas of focus for the

Committee and the Board, with the

Board’s diversity policy being aligned

to that of the wider Group, which is

to strive to have a workforce

representative of the communities in

which we operate.

The Board acknowledges that its

diversity is not in line with the

recommendations set out in the

Parker Review and the FTSE 350

Women Leaders Review or the

targets within the UK Listing Rules.

However, the individuals on the

Board have a depth of financial

experience, strategic knowledge and

availability to guide the Group during

this challenging period. Nick Bray will

remain on the Board until the 2025

AGM, at which point he will retire

having served for nine years. During

FY25 the Committee will be

considering further appointments to

the Board, having full regard to the

benefits of diversity in all its forms

and compliance with relevant

guidance and rules.

Clive Whiley

Chair, Nomination Committee

Current members:

Clive Whiley (Chair)

Nick Bray

Brian Small

Mark Hoad

Clive Vacher

Former members:

Dean Moore

Catherine Ashton

Kevin Loosemore

Margaret Rice-Jones

– 5 scheduled meetings

– 100% attendance from all members during their membership

Having the right skills and knowledge on the

Board and the leadership team will help drive

the evolution of the Group’s business.

Committee members and attendance

Principal responsibilities

Board composition:

– Review the structure, size and

composition of the Board and

its Committees, to ensure that

they remain appropriate,

aiming to maintain a balance of

skills, experience, knowledge

and diversity

– Ensure that all Board

appointments are made on

a formal, rigorous and

transparent basis

Succession:

– Consider succession plans for

the Board and senior

management, anticipating the

challenges and opportunities

facing the Company and the

need for a diverse pipeline

of talent

– Oversee the Board’s diversity

policy and its implementation

Effectiveness:

– Review the independence and

time commitment of the

Non-executive Directors

– Act on the results of the

effectiveness reviews in

relation to individual Directors

80 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Nomination Committee report continued

The Listing Rules now set out

diversity requirements that 40% of

the Board should be women, at least

one of the Chairman, CFO, CEO or

SID positions should be a woman

and that at least one member of the

Board should be from an ethnic

minority background. The current

Board composition does not meet

these requirements. However,

diversity is a key focus for the

Committee, and it will be taken into

consideration for future Board

composition and succession

planning. The Committee is aware of

the lack of diversity, but believes

that the financial and operational

experience on the Board is

particularly suitable for the current

stage of the Group’s evolution.

Diversity as at 30 March 2024

Board

Female 1

Male 6

Direct reports into the Executive

Leadership Team

Female 16

Male 15

Executive Leadership Team

Female 2

Male 4

Independence

Executive

Independent Non-executive

Chairman

Tenure to 30 March 2024

Clive Whiley 10 months

Clive Vacher 4 years, 5 months

Dean Moore 9 months

Ruth Euling 2 years, 11 months

Nick Bray 7 years, 8 months

Mark Hoad 1 year, 6 months

Brian Small 6 months

Gender balance of the Board and Executive Leadership Team (ELT)

As at 30 March 2024

Number of

Board

members

Percentage of

the Board

Number of

senior

positions on

the Board

(CEO, CFO,

SID and

Chairman)

Number in

executive

management

(ELT)

Percentage of

executive

management

(ELT)

Men 6 85% 4 4 67%

Women 1 15% 0 2 33%

Not specified/

prefer not to say n/a n/a n/a n/a n/a

Composition and diversity

The diagrams on the right show the

Board’s composition, tenure and

diversity characteristics. The

biographical details of the Directors

can be found on pages 72 and 73

showing their experience and skills

for which they were appointed.

Whilst the primary objective and

responsibility when making new

appointments to the Board is to

ensure the strength of the Board,

we are committed to promoting a

culture of respect and inclusivity for

every individual across our business.

We continue to promote a culture

that values and thrives on diversity

in all areas, including an inclusive and

diverse culture in terms of ideas,

skills, knowledge, experience,

education, gender, social and ethnic

backgrounds and cognitive and

personal strengths.

Operation of the Committee

The Committee is comprised

of the Company’s independent

Non-executive Directors and

the Chief Executive Officer.

Kevin Loosemore retired from

the Board and the Committee

on 1 May 2023 and Clive Whiley

joined the Board as Chairman

and Chair of this Committee on

18 May 2023.

Catherine Ashton and Margaret

Rice-Jones retired from the

Board and the Committee on

12 June 2023 and 7 September

2023 respectively. Brian Small

joined the Committee on

8 September 2023. Dean Moore

was appointed to the Committee

on 27 June 2023, relinquishing

his role on 4 August 2023 upon

his appointment as Interim

Chief Financial Officer.

During the year, at the

Nomination Committee Chair’s

request, the Group HR Director

was invited to meetings as

appropriate.

The Committee’s effectiveness

was reviewed as part of the

overall Board Effectiveness

review. For further information

on this, please see pages 82

to 83.

81 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Nomination Committee report continued

Board appointments and

induction

The Committee oversaw the process

of the appointment of three new

Directors during the year, who could

all make a positive contribution to

the Board and its discussions on the

Group’s strategic development. A

detailed brief was prepared and

shared with Russell Reynolds (which

has no other connection with the

Company or any of its Directors),

who was tasked with finding suitable

chairperson candidates. The process

culminated with the appointment of

Clive Whiley. Dean Moore and Brian

Small were appointed further to

introduction by the Chairman,

followed by interviews with and

agreement by each member of

the Board.

All new Directors receive a tailored

induction on joining the Board. They

also receive a detailed briefing which

includes details of their duties and

responsibilities as a Director and

other governance-related matters.

The induction process also covers

finance and governance matters that

provides new Directors with an

opportunity to glean insights from

and build relationships with key

individuals. Feedback on the

induction was fed back to the

Company Secretary to inform future

induction processes.

Clive Whiley’s induction

Clive Whiley’s induction to his role as

Chairman has included meeting with

the Non-executive and Executive

Directors including the Chairs of the

Audit and Remuneration

Committees and the Company

Secretary, the members of the

Executive Leadership Team and

senior management across Currency

and Authentication. He also visited

our key sites in Debden and Malta to

gain an understanding of our teams,

products and processes.

He was also appointed to the role of

Workforce Engagement Director and

through this has met the Group HR

Director and employees to

understand the current sentiment

across the Group. In addition, his

introduction has involved

comprehensive engagement with

the Company’s principal

shareholders, pension trustee, its

lending syndicate, and its corporate

advisors.

Dean Moore’s induction

Dean Moore’s planned induction as

Non-executive Director was changed

following his amended appointment

as Interim Chief Financial Officer in

August 2023. Dean met senior

management across the finance

team, and both the external and

internal auditors to understand their

procedures and views of the

business. Dean’s induction has been

aimed principally at developing his

understanding of the Company’s

financial position and prospects in

order that the benefit of his

extensive listed company chief

financial officer experience can be

brought to bear in dealing with the

Company’s immediate and ongoing

challenges.

Brian Small’s induction

Brian Small’s induction was tailored

to his role as Non-executive Director

and Chair of the Remuneration

Committee. Brian met senior

leadership, including in Currency,

Authentication, and Finance.

During Brian’s induction meetings, he

was able to gain insight into the

business of the different divisions

and their key priorities and

challenges. He also met the Group

HR Director to gain an understanding

of the remuneration frameworks and

policies across the business. As with

the other inductions noted, an

important objective has been to

ensure a high level of understanding

of the Company’s finances in order

that his substantial listed company

chief financial officer experience can

be engaged for the Company’s

benefit.

Succession planning

The Committee recognises that

having the right Directors and senior

management is crucial for the

Group’s success. A key task for the

Committee is to ensure that there is

a robust and rigorous succession

process to ensure the right mix of

skills and experience throughout

the Group as the business evolves.

The Committee’s approach to

succession planning is linked to the

Company’s overall strategy, values

and mission and includes diversity

considerations. Our policy is to

appoint the best people available for

each role and to ensure that the

Board members are collectively able

to provide the range of perspectives,

insights and constructive challenge

required to make decisions

effectively. Appointments are

therefore based on merit by

assessing candidates on objective

criteria. It is the Board’s view that it is

presently ideally configured for

meeting the financial and structural

challenges the Company faces.

This year, talent development and

succession planning has been

reviewed by the Executive

Leadership Team and shared with

the Nomination Committee for their

awareness.

The Board meets the Executive

Leadership Team members and

other key managers both formally

and informally to exchange views

and ideas. During the period, there

was a focus on succession planning

within the Finance team following a

period of change within the

leadership.

Board evaluation

The Chairman is responsible, with

the support of the Nomination

Committee, for ensuring that the

Company has an effective Board

with a suitable range of skills,

knowledge, experience and diversity.

In accordance with the Corporate

Governance Code, the Company

conducts a formal annual

performance evaluation process for

the Board, its Committees and

individual Directors, including the

Chairman. The Chairman routinely

holds one-to-one meetings with all

Directors to review their contribution

to the Board.

This year’s review of the

effectiveness of the Board and

Committees was carried out

internally through questionnaires,

using an online system managed by

Lintstock, completed by each

member of the Board to gather

comments on a range of matters

including the composition and

dynamics of the Board, the Board

support and focus of meetings, the

Chairman and Committees and

oversight on strategy, risk and

people and performance priorities.

82 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Nomination Committee report continued

Lintstock produced a report

summarising the results of the

survey, with both quantitative and

qualitative data. The report was

shared with the Board and its

Committees, who discussed the

findings and agreed appropriate

actions.

Feedback received on the Chairman

was positive, stating the

comprehensive engagement with

the debt and equity investors had

improved trust and credibility of the

Group and that the Chairman was

supportive and challenging towards

management to perform in line with

expectations.

Conclusions from the FY24 Board

evaluation

Some of the key strengths identified

included:

– The Board’s oversight of risk.

– The range of skills and experience

on the Board needed to deal with

the specific challenges the Group

faces.

– The dynamics of the Board, which

were seen to be highly supportive,

with the Non-executive Directors

providing high quality challenge

and support.

– The management of Board

meetings, with the board papers

being of high quality with a

substantial improvement in the

timeliness of availability of the

papers in the last year.

The Board’s focus throughout the

year has been managing through a

period of change and uncertainty,

however, the continuing priorities for

the Board were:

– To continue to provide support

and guidance to management to

help them tackle the short-to-

medium-term challenges faced

by the business.

– To stabilise the business to

ensure its future and to consider

the Group’s Executive succession

planning and the effectiveness of

talent management processes.

– To address the lack of diversity

on the Board as and when

appropriate.

As set out in last year’s annual

report, an internal performance

evaluation was undertaken of the

Directors, the Board and its

Committees. The progress made

against the FY23 evaluation is set out

in the following table.

Progress against FY23 evaluation

Agreed change Progress

Each Board meeting should commence

with a private session for the Chairman

and other Non-executive Directors, and

be followed by a joint session with the

Chief Executive Officer.

– This meeting structure has been

used on occasion. However, there

has been very considerable

engagement, and cross-

engagement of these groupings over

the course of the year on an ad hoc

basis.

During a period of significant uncertainty

in the Company’s markets and the

challenging business context that this

creates, to re-introduce a Directors’ call

in those months with no scheduled Board

meeting, following publication of the

management accounts.

– These calls have taken place in every

month of FY24, sometimes on more

than one occasion within a month.

Re-election of Directors at the

2024 AGM

All Directors serving at the date of

this report will stand for re-election

at the 2024 AGM. Following the

Board performance evaluation (set

out above), the Committee

considers each of the Directors to

be effective in their respective roles.

It judges that they demonstrate

commitment and is of the opinion

that all Directors continue to provide

valuable contributions to the

long-term success of the Company.

The Board strongly supports their

election and re-election to the Board

and recommends that shareholders

vote in favour of the relevant

resolutions at the 2024 AGM.

83 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Audit Committee report

Dear Shareholder,

On behalf of the Audit Committee,

I am pleased to present my first

Audit Committee report for the

period ending 30 March 2024.

The Group’s key accounting matters,

together with how the Committee

has addressed them, can be found

on pages 85 to 87. During the year,

and subsequent to it, a key area of

focus for the Committee has been

the going concern assumption and

the ability of the Group to continue

to comply with its banking facility

covenants. As part of this,

consideration was given to the

Group’s liquidity and forecast cash

flows under many potential

scenarios, and the extension to the

Group’s banking facilities. The Going

Concern statement can be found on

pages 64 to 68.

A further key focus for the

Committee this year was post-

retirement benefits, and in particular,

the impact the Group’s pension

obligations have on the financial

statements. In June 2023, the Board

agreed with the pension trustee to a

15 month moratorium on pension

deficit repair contributions until July

2024. From this date, the repair

contributions would amount to £8m

per annum until FY27, with further

payments, not exceeding £16m until

December 2030, or until the pension

scheme is fully funded. This has

significantly improved the Group’s

cash flow profile whilst improving the

safeguards to the pension scheme

and its members. You can read

further on this on page 55.

In addition, the Committee was

pleased to hear that the Financial

Reporting Council’s Corporate

Reporting Review team undertook a

desk top review, and whilst they do

not benefit from detailed knowledge

of the business or underlying

transactions and provide no

assurance, they did not find any

significant areas of improvement

during their review of the Group’s

audited FY23 annual report and

accounts.

Mark Hoad,

Chair, Audit Committee

Current members:

Mark Hoad (Chair)

Nick Bray

Brian Small

Former members:

Dean Moore

Catherine Ashton

Margaret Rice-Jones

– 6 scheduled meetings

– 100% attendance from all members during their membership

Committee members and attendance

We provide comfort to the Board ensuring that

we have oversight of the financial statements

and the Group’s system of internal controls and

risk management.

Principal responsibilities

Financial reporting:

– Monitor the integrity of the

Group’s financial reporting

– Review significant financial

reporting issues and

accounting judgements

– Review the adoption of new

accounting standards

External audit:

– Responsible for the relationship

with the external auditors,

including the scope and extent

of the external audit, their

performance and fees

– Review and monitor the

external auditors effectiveness,

independence, objectivity

including the level of provision

of non-audit services

Internal audit:

– Oversee the relationship with

the internal auditors, including

the internal charter, annual

work programme, fees and

their independence and

effectiveness

– Monitor and challenge

management’s response to

internal audit findings and

whether these are being

implemented in a manner that

supports the work of the

internal auditors

Risk management and

internal control:

– Review and monitor the

effectiveness of the systems

of internal control and risk

management, including

financial, operational and

compliance controls

84 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Key accounting matters in relation to FY24

The Committee reviews whether suitable accounting policies have been adopted and applied consistently and assesses if management has made appropriate estimates and judgements in the

preparation of the financial statements. In addition, the Committee has reviewed and considered and challenged a number of key accounting areas and judgements in preparing the financial

statements, as set out below.

Topic What is the risk? What did the Committee do? What conclusion did it reach?

Revenue recognition Revenue (and therefore profit) is not

recorded in the correct financial year,

resulting in an incorrect statement of

performance

The Committee considered the Group’s revenue recognition policies and

procedures to ensure that they remained appropriate and that the Group’s internal

controls were operating effectively in this area.

Feedback was also sought from the external auditors over the application of the

revenue recognition policy including ongoing compliance with IFRS15. Specific focus

was given to revenue recognised on a “bill and hold” basis and where revenue on

new contracts entered into in the year was being accounted for on an “over time

basis”.

Following a review of the varied

sources of information received, the

Committee concluded that the

accounting treatments and

judgements were reasonable and

appropriate.

Classification of

exceptional items

Costs or income are incorrectly

categorised as, or omitted from,

exceptional items, resulting in a

misstatement of profits for the year.

As part of the Committee’s deliberations over whether the annual report and

accounts, taken as a whole, is fair, balances and understandable, the Committee

also considered the amounts disclosed as exceptional items. The nature of the

items classified as operating exceptional items during the period is described in

note 5.

The Committee considered the accounting treatment and disclosure of these

items in the financial statements including seeking the views of the external

auditors.

On the basis of its review, the

Committee concluded that the

accounting treatment and

disclosures in relation to these items

were appropriate.

Accounting for the

extension of the factory

in Malta

The timing of the accounting for the

new lease on the Malta site extension

was not recorded appropriately.

The Committee reviewed Management’s judgement as to whether the Company

has control of the Malta site during the construction period. If the Group has the

right to control the use of the identified asset for only a portion of the term of the

contract, the contract contains a lease for that portion of the term. In order to

control the asset, the lessee must have the right to obtain substantially all of the

economic benefits from the use of the asset and the right to direct the use of the

asset. It was determined that control exists only after the build is completed and

the site becomes available for use. Management considers that given the building

was under construction at year end date and therefore there were no economic

benefits as the asset was not ready for use at that time.

Therefore, management have concluded that no lease should be recognised in

FY24. The lease will be recognised when the building becomes available for use.

The Committee concluded that

Management’s assessment that the

lease will be recognised when the

building becomes available for use is

appropriate.

Audit Committee report continued

85 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Topic What is the risk? What did the Committee do? What conclusion did it reach?

Changes to the terms of

the Group’s banking

facilities

Banking facility amendments in June

2023 and December 2023 may not be

accounted for correctly as non-

substantial modifications under IFRS 9

“Financial Instruments”.

The Committee reviewed Management’s judgement as to whether the

amendments to the banking facilities made in June 2023 and December 2023 had

been correctly accounted for as a non-substantial modifications under IFRS 9. The

changing in the banking facilities did not result in an extinguishment of debt. The

difference between the amortised cost carrying amount of the previous terms of

the facility and the present value of the updated terms of the facility, discounted

using the effective interest rate, resulting in a modification loss.

The net loss on debt modification was £5.6m, including a loss on the debt

modification in June 2023 of £4.8m and a loss on the debt modification in

December 2023 of £0.8m.

The Committee has concluded that

it supports the accounting of the

June 2023 and December 2023

banking facility amendments as

non-substantial modifications under

IFRS 9.

Recoverability of other

financial assets

The carrying value of investments

made by the Group in entities within

the Portals Group is recognised as an

incorrect or inappropriate value in the

balance sheet, resulting in an under or

over-statement of assets.

The Committee notes that management has carefully assessed the recoverability

of the other financial assets on the balance sheet as at 30 March 2024 based on

information available to them and determined that an expected credit loss

provision reported in FY23 was still appropriate.

During FY24, £0.3m was received to settle some of these other financial assets. This

was unexpected and no further amounts were expected as at 30 March 2024.

However, a further £0.2m was received, again unexpectedly, in June 2024 in

settlement of some of these other financial assets. The £0.5m credit has been

reflected in exceptional items in FY24 (note 5). After a further review, management

has concluded that there has been no change in this assessment of the remaining

other financial assets in FY24.

The amount presented on the balance sheet within other financial assets as at 30

March 2024 of £nil (25 March 2023: £nil) included the original principal received

and accrued interest amounts, fully offset by the expected credit loss provision.

The Committee has concluded that

it supports retaining the expected

credit loss that was recorded in prior

years.

The Committee noted that if factors

change again in the future, this may

alter the judgements made resulting

in a revision to the value of expected

credit loss provision to be

recognised.

UK post-retirement

benefit obligations

The valuation of the pension scheme

assets and/or liabilities is incorrectly or

inappropriately valued. This would

result in the balance sheet being

misstated.

The Committee received and considered reports from management based on

analysis prepared by independent actuaries and the external auditors in relation to

the valuation of the UK defined benefit pension scheme and challenged the key

actuarial assumptions used in calculating the scheme liabilities, especially in

relation to discount rates, RPI and CPI inflation rates and mortality.

The Committee discussed the reasons for the movements on the IAS 19 valuation

deficit. The Committee was satisfied that the assumptions used were appropriate

and were supported by independent actuarial specialists. Details of the key

assumptions used are set out in note 23 to the consolidated financial statements.

The UK pension scheme assets valuations aligned with the year end of 30 March

2024 and therefore there were no estimation adjustments made to the valuation of

assets between this date and the valuation dates of the 31 March 2024.

The Committee considered the

difference in valuation caused by the

year end of 30 March 2024 and

reporting dates of 31 March 2024 to

not be significant when compared to

total UK defined benefit pension

scheme assets The Committee

decided that a critical accounting

judgement was not required for

FY24.

Audit Committee report continued

86 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Topic What is the risk? What did the Committee do? What conclusion did it reach?

Recoverability

assessment and

impairment charges

related to plant and

machinery and

capitalised product

development costs

The impairment assessments carried

out by the Group have not identified all

applicable impairments.

The Committee reviewed Management’s assessment of impairments made in the

year. Impairment charges of £3.4m were made in relation to plant and machinery

and £1.1m in relation to assets in the course of construction. A review was carried

out of assets held in the Currency division and as a result £4.5m of assets were

identified for impairment, mostly relating to assets that were originally to be utilised

in another location where there is no longer the demand.

The Committee concluded that the

impairments made in the year were

appropriate.

Estimation of provisions The value of provisions at the balance

sheet are incorrectly or inappropriately

calculated, resulting in a misstatement

of profits for the year end of the closing

balance sheet position.

The Group holds a number of provisions relating to warranties for defective

products and contract penalties. The Committee reviewed and discussed reports

from management and the external auditors concerning the significant provisions

held for such matters including any provisions with notable movements and

challenged management over the judgements applied in determining the value of

provisions required.

The Committee enquired of management and the external auditors as to the

existence of other matters potentially requiring a provision to be made. The

Committee concluded that it was satisfied with the value of provisions held.

The Committee has considered the

latest available information provided

by management including the latest

view of external advisers and is

confident with the judgements

made in preparing the financial

statement in the current period.

Carrying amount of

investment in the

subsidiary and amounts

owed to Group

undertakings in the

Company (only) financial

statements

The carrying value of the investment in

subsidiary and amounts owed by

Group undertakings in the Plc

Company financial statements is

misstated.

The Committee considered management’s assessment of the recoverable amount

of the Company’s “Investment in Subsidiary” and previously impaired “Amounts

owed to Group undertakings”, management has identified a number of indicators of

an impairment reversal. These include improved trading in the Company’s

subsidiaries, expressions of interest in the divisions of the Group and an increase in

the market capitalisation of the Group.

This assessment concluded that both the Investment in Subsidiary (£72.9m) and

the gross value of the Amounts owed by group undertakings were recoverable. As a

such, no impairment charge has been recorded in relation to “Investments in

Subsidiaries” in FY24 (FY23: £85.6m) and a reversal of the previous impairment

charge of £113.9m is recognised in FY24 relating to “Amounts owed by Group

undertakings”.

The Committee concluded that

Management’s assessment of the

carrying value of the investment in

subsidiary and recoverability of

amounts owed by Group

undertakings in the Plc Company

financial statements is appropriate,

including the reversal of the

previously recognised impairment.

Going Concern The use of an inappropriate basis of

accounting, should the Group prove

not to have access to sufficient

liquidity to pay is debts as they fall due

in the near term.

The Committee gave careful consideration to the going concern statements made

in the half and full year financial statements. The Committee conducted rigorous

reviews of the Group’s financial forecasts, challenging key assumptions and giving

careful consideration to plausible downside scenarios modelled, when assessing

the impact these would have on the going concern status of the Group. A material

uncertainty has been identified, refer to pages 64 to 68 in the Strategic Report.

The Committee concluded that was

appropriate for the Directors to use

the going concern basis of

accounting, taking into account the

material uncertainty identified.

Audit Committee report continued

87 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Audit Committee report continued

Financial Reporting

Fair, balanced and

understandable

The integrity of the Group’s financial

reporting is of critical importance

and it is a core responsibility of the

Committee to review this reporting

and the key accounting judgements

contained in the financial statements.

The Committee reviewed, at the

Board’s request, the content of this

FY24 Annual Report and advised

that, in its view, when taken as a

whole, the document is fair, balanced

and understandable and provides

the information necessary for

shareholders to assess the Group’s

position, performance, business

model and strategy.

For the FY24 Annual Report, in

making its recommendation to the

Board, the Committee drew on its

experience supplemented by:

– Reviews of the monthly

management accounts, enabling

trends and key business

dynamics to be monitored

throughout the year

– Review of reports from the Group

Financial Controller and internal

auditors

– Clear guidance provided on the

requirement to draft in a fair,

balanced and understandable way

– Reviews of the Annual Report

undertaken at different levels of

the Group including by the

Executive Leadership Team, with

an opinion that the reporting

meets the required standards

and consistent reporting

confirmed to the Committee

– The review of the narrative

reporting conducted by the

external auditors as part of

their review

– Reviews of the narrative reporting

by the Audit Committee Chair and

other Directors prior to formal

consideration of the draft Annual

Report by the Board.

The Committee advised the Board,

and in turn the Board confirmed, that

the FY24 Annual Report, when taken

as a whole, is fair, balanced and

understandable and provides the

information necessary for

shareholders to assess the Group’s

performance, business model

and strategy.

External auditors

Following a competitive tender

process that was led by the

Committee, the Board appointed

Ernst & Young LLP (EY) as the

Company’s auditors in 2017. At the

2023 AGM, EY were reappointed by

shareholders as the external auditor

for the year ended 30 March 2024

and the Board was authorised to

determine the external auditor’s

remuneration. This year is San

Gunapala’s second audit as

engagement partner following the

mandatory five year partner rotation

last year.

The EY audit partner attends each

Committee meeting to ensure

two-way communication of matters

between the external auditors and

Committee members. The EY audit

partner also maintains regular

contact with both the Committee

Chair and the Chief Financial Officer.

The scope and key focus of the

forthcoming year’s audit is

discussed with and approved by the

Committee, who also review and

approve the fees for that audit and

the review of the half year financial

statements.

At the end of each meeting, the

Committee has discussions with

the auditors, without management

present, covering a range of financial

reporting, accounting, internal

control and risk matters and

receives and reviews the auditors’

reports and management letters,

which are one of the main outputs

from the external audit.

Structure and operation of the Committee

The Committee is comprised of

our independent Non-executive

Directors. Nick Bray retired as

Committee Chair at the conclusion

of the 2023 AGM, at which point

Mark Hoad became Chair.

Catherine Ashton and Margaret

Rice-Jones retired from the Board

and the Committee on 12 June

2023 and 7 September 2023

respectively. Dean Moore was

appointed to the Committee on

27 June 2023, relinquishing his

role on 4 August 2023 upon his

appointment as Interim Chief

Financial Officer. Brian Small

joined the Committee on

8 September 2023.

Biographical details of the

Committee members are set out

on page 72 to 73 detailing the

depth of experience of the

Committee members. All members

are regarded by the Board as

having relevant and recent financial

experience. They are all chartered

accountants with long careers as

senior finance professionals, Nick

Bray currently working as Chief

Financial Officer of Travelport,

Mark Hoad being the Chief

Financial Officer of TT Electronics

plc and Brian Small previously

being the Chief Financial Officer

of JD Sports Fashion plc.

During the year, at the Audit

Committee Chair’s request, all or

parts of the meeting are attended

by the Chairman of the Board,

Chief Executive Officer, Chief

Financial Officer, Group Finance

Director, General Counsel &

Company Secretary and the

Group Financial Controller, as well

as the internal and external

auditors. In addition, the Group

Director of Security, HSE & Risk

and the Group Director of Tax and

Treasury also attend Committee

meetings as required.

Throughout the year, the

Committee members met with

the internal and external auditors

without Executive Directors

being present.

The Committee’s effectiveness

was reviewed as part of the overall

Board effectiveness review. For

further information on this, please

see pages 82 to 83.

88 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Audit Committee report continued

There is a cap on the fees for

permitted services, which must not

exceed 70% of the average of the

fees paid for such services in the last

three consecutive financial years.

EY was engaged during the year to

provide non-audit services to the

Group relating to the half year

interim statement review.

For FY24, non-audit fees were 21% of

audit fees (FY23: 20%) and were 28%

(FY23: 14%) of the average audit fees

for the preceding three years. None

of the non-audit services provided

by the external auditors was

regarded as a significant engagement

by the Committee.

The fees paid to the external auditor

for both audit and non-audit

services are set out in note 4 to the

financial statements on page 147.

Effectiveness of the external

auditors and proposal for re-

election at the AGM

The Committee is satisfied that the

external auditors remain fully

independent, objective and effective

and has recommended to the Board

that a resolution of the

reappointment of Ernst & Young LLP

should be put to the shareholders at

the 2024 AGM.

Independence and objectivity

The Committee is responsible for

monitoring and reviewing the

objectivity and independence of

the external auditor. The Committee

places great emphasis on audit

quality – encompassing the skills

and knowledge of the audit team,

their mindset and culture and the

quality of the judgements reached

by the senior members of the

audit team.

In its dealings with the external

auditors, the Committee looks for

evidence that their work is being

completed from a position of

independence, with objectivity and

professional scepticism. In addition,

the Committee considers the views

of senior members of the finance

team and how they have dealt with

the external auditors. The

Committee also considered that the

non-audit services provided in the

year were permissible under the UK

Ethical Standard.

Further, EY have their own

safeguards in place to avoid

compromising their objectivity and

independence. EY provide a written

report to the Committee on how

they have operated in accordance

with the ethical standards required

of audit firms, and how they have

complied with professional and

regulatory requirements and best

practice to ensure their

independence.

Internal Audit

Internal auditors

The internal audit function provides

an important assurance role and is

complementary to the work of the

external auditors.

PricewaterhouseCoopers LLP (PwC)

have provided internal audit services

to the Group since FY14. The

personnel involved in the internal

audit team have changed over their

tenure, and the Committee is

satisfied that they have maintained

independence.

The Committee oversees the

appointment of the internal auditors,

and also reviews and approves the

internal audit charter, the annual

programme of audit assignments, as

well as the fees payable. The annual

internal audit plan is aligned with the

Company’s risk register and forms

part of a medium-term rolling

programme of audit assignments,

predicted on a risk-led approach.

The Committee meets regularly

with the internal auditors, without

management, to discuss their findings,

the implementation of remedial

actions and the Group’s internal

control environment more generally.

The Committee considered its

discussions with the external

auditors and believes that EY has

sufficiently challenged the Group

throughout the year, and that it was

satisfied with EY’s performance.

Non-audit services

A policy is in place that governs the

provision of non-audit services

provided by the external auditor to

the Company, in order to safeguard

EY’s objectivity and independence.

This is only used in certain limited

circumstances where it may be cost

effective or otherwise advantageous

for EY to provide certain non-audit

services, for example where their

skills, experience and familiarity with

the Group make that firm the most

suitable supplier.

The Committee monitors

compliance with this policy, and the

procedures for approval of proposed

fees which is as follows:

Chief Financial

Officer Up to £25,000

Chief Financial

Officer and

Committee Chair

Between £25,000

and £50,000

Chief Financial

Officer, Committee

Chair and the Board Over £50,000

The FY24 internal audit plan was

approved by the Committee in

March 2023 and kept under review

during the year. All of the internal

audit assignments were completed

during the year, other than one

review which was completed shortly

after the year end focusing on data

maturity, which management would

look to fully incorporate the

recommended actions into ongoing

work streams for improvement.

Following its review by the Executive

Leadership Team, the Committee in

March 2024 considered and

approved the internal audit charter

and plan for FY25.

A review of the effectiveness of the

internal auditors was completed and

presented to the Committee in July

2024. This was undertaken by means

of a questionnaire circulated to

those audited in the year, senior

members of the Finance function

and the Committee, and

supplemented the Committee’s

ongoing monitoring of PwC’s work.

The Committee concluded that the

internal auditors quality of work,

experience and expertise was

appropriate for the size of the

business and that PwC performed

effectively and constructively with

management. The Committee were

also satisfied that the actions

management had taken to

implement agreed improvement

actions supported the effective

working of the internal audit function.

89 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Audit Committee report continued

Risk management

The key elements of the Group’s risk

management framework and

procedures are set out on pages 56

and 63. The Committee reviewed

the principal risks facing the Group

at each meeting, and reviewed

emerging risks throughout the year,

on receipt of reports from the Risk

Committee. In addition, each of the

principal risks is discussed by the

Board during the year.

Combined assurance model

The Group’s internal control

environment operates a ‘three lines’

model, which the Committee

monitors throughout the year:

– First line of defence: work

undertaken by operational and

line management, supported by

local operating procedures and

systems.

– Second line of defence: central

function checks against Group

policies and standards, and senior

management assurance,

reporting and monitoring. This

work is enhanced by the

independent audits that take

place across a range of areas as

part of our programme of BnEi

and ISO accreditations and

certifications.

– Third line of defence: the internal

audit function focusing on the

processes and procedures

followed locally and Group-wide.

Internal control and risk

management

Internal control

The Committee oversees the

implementation and maintenance of

the Group’s internal controls, with a

particular focus on internal financial

controls. It does so through reports

received from the internal auditors

and any reports from the external

auditors on internal control matters

noted as part of their audit work.

In addition, the Group operates a

system of annual self-assessment of

internal policy and control

declarations. These are made at

various levels of management and

detail and certify that the control

environment in their business area is

appropriate and functioning. Any

non-conformances are notified as

part of this process and, where

remedial actions are appropriate,

these are followed up by senior

management to ensure that a

satisfactory internal control

environment is maintained.

These controls and procedures are

designed to manage, but not

eliminate, the risk of failure of the

Group to meet its business

objectives and, as such, provide

reasonable but not absolute

assurance against material

misstatement or loss.

By reviewing the collective outputs

from these sources of assurance, the

Committee and the Board gain

ongoing assurance over the design

and operation of internal controls

across the Group.

Effectiveness review: internal

control environment

On behalf of the Board, the

Committee is responsible for

reviewing the effectiveness of the

Group’s internal control systems,

which covers all material controls,

including financial, operational and

compliance controls and which

operates within the corporate

culture and values set by the Board.

A formal effectiveness review was

performed during the year and

considered by the Committee, which

concluded that none of the areas

identified for enhancement

constituted a significant failing or

weakness for the Group.

Mark Hoad

Chair of the Audit Committee

24 July 2024

Internal controls over financial

reporting

Management is responsible for

establishing and maintaining

adequate internal controls over

financial reporting, including over the

Group’s consolidation process.

Internal controls over financial

reporting are designed to provide

reasonable assurance regarding the

reliability of financial reporting and

the preparation of financial

statements for external reporting

purposes.

A comprehensive strategic planning,

budgeting and forecasting system is

in place which includes:

– Senior management review of

monthly financial information

including trading results and cash

flow statements, which is

reported to the Board

– The ELT undertakes a monthly

review performance against the

budget and forecast

– Senior financial managers

regularly carry out Group

consolidation reviews and

analysis of material variances.

90 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Risk Committee report

Activities during the period

The Directors have overall

responsibility for the Group’s

systems of internal control and risk

management, which includes the

identification of the Group’s principal

and emerging risks. Details of how the

Directors fulfil this responsibility and

the principal risks the Group faces

can be found on pages 56 to 63.

Routine items considered by the

Committee at every meeting:

– The Group’s principal risks and

uncertainties (see pages 58 to 63

for further detail and the status of

the mitigating actions and

controls relating to those risks)

– Reviews of emerging risks not

included in the Group risk register,

including ‘horizon scanning’

sessions.

In addition, the following matters were

also considered during the period:

– Review of the risk disclosures and

the Committee’s report within the

2023 Annual Report

– Review of the risk disclosures

within the FY24 Interim Report

– ‘Deep dive’ sessions with

operational or functional risk

owners:

– Loss of key sites or process

– A failure in the supply chain with

a specific focus into the current

cylinder strategy and non-

contracted key supplier spend

– Bribery & Corruption with a

specific focus on new

customer due diligence

processes

– Performance of, and

communications between, our

divisional and central enabling

functions’ risk committees

– Insurance market conditions,

particularly in relation to cyber

risks insurance and directors’ and

officers’ liability insurance

– Business continuity planning

– Review of our risk management

policy and framework

– Review of the Committee’s

effectiveness.

The Committee’s work interfaces

with that of a number of other Board

Committees, most notably the Audit

Committee. The Committee Chair

reports on the material matters

discussed at each Committee

meeting to the next meeting of the

Audit Committee. The minutes of

meetings of the Risk Committee are

shared with the Directors. Feedback

from the Board or Audit Committee

is shared at the next Committee

meeting. The Committee is

supported in its work by other

management meetings and

committees, including divisional and

central enabling functions’ risk

committees and other meetings and

bodies dealing with specific risk

areas such as sanctions, HSE and

security and the Ethics Committee.

Jon Messent

Chair of the Risk Committee

24 July 2024

Current members:

Jon Messent (Chair)

Clive Vacher

Natasha Bishop

Ruth Euling

Dean Moore

Dave Sharratt

Former members:

Rob Harding

– 3 scheduled meetings

– 100% attendance from all members during their membership,

with the exception of Dave Sharratt who was unable to attend

one meeting due to a prior commitment.

Committee members and attendance

Our role is to support the Board by leading

oversight of the identification and evaluation of

the risks facing the Group and monitoring how

these are managed.

Principal responsibilities

– Monitor and develop the

Group’s risk management

policy and oversee the

implementation of its risk

management framework for

identifying and managing risks

– Promote a risk management

culture and control

environment

– Identify and keep under review

the principal risks faced by the

Group, and review the related

mitigations and controls

– Identify and assess any

emerging or developing risks

– Review the effectiveness of the

Group’s risk management

system

– Provide reports on the status

of risk management to the

Audit Committee and Board,

and externally through the

Annual Report.

Operation of the Committee

The Committee comprises the

Executive Directors and ELT

members and is chaired by the

Company Secretary. Jon

Messent became Chair of the

Committee on 18 May 2023, and

Dean Moore became a member

on 4 August 2023 upon his

appointment as Interim Chief

Financial Officer. Rob Harding

left on 28 July 2023.

At the request of the Committee

Chair, the Group Director

of Security, HSE and Risk and

other managers with operational

or functional ownership of risks

are invited to meetings as

appropriate.

91 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Ethics Committee report

Activities during the period

During the period to 30 March 2024,

the Committee focused on the

following activities:

Code of Business Principles (CBP)-

related initiatives, including:

– The roll-out of the new CBP

following its launch in January

2023

– Monitoring the completion of

compliance training courses

including anti-bribery and

corruption, gifts & hospitality, tax

evasion, competition law, modern

slavery and sanctions awareness

– Ongoing and planned awareness-

raising initiatives and training to

ensure expected ethical

standards are maintained and

further embedded throughout

the organisation

The management of the third party

sales partners (TPP) programme

including:

– The TPP remuneration model

– Enhanced TPP compliance and

risk mitigation mechanisms

– Reviewing the ongoing activities

and management of TPPs

Oversight of other business ethics

matters:

– Update on activities related to the

ISO 37001 anti-bribery

management system and the

Banknotes Ethics Initiative (BnEI)

accreditations

– Review of sanctions risks and

actions undertaken or planned to

manage those risks, including the

implementation of an enhanced

due diligence and sanctions

monitoring system

– Review of the gift register for

Executive Directors

– Review of reports on issues raised

through the whistleblowing

hotline – CodeLine – and other

channels and review of results of

any investigations into ethical or

compliance breaches or

allegations of misconduct

Ethical risks

It is vital that we uphold the highest

ethical standards in the way we

conduct our business in order to

maintain the trust and confidence of

customers and everyone we deal

with. We recognise that our business

is exposed to risks of unethical

conduct because of the nature and

value of many of our contracts, and

because standards of integrity may

not be consistent across all the

countries in which we operate. We

have a robust compliance

programme in place to manage

these risks. Further information,

including a description of our ethical

framework can be found in the

Responsible business report on

pages 42 to 45.

Current members:

Clive Whiley (Chair)

Nick Bray

Mark Hoad

Brian Small

Former members:

Kevin Loosemore

Catherine Ashton

Margaret Rice-Jones

Dean Moore

– 2 scheduled meetings

– 100% attendance from all members during their membership

Committee members and attendance

Doing business in the right way is crucial for us

to be successful on a sustainable basis over

the long term.

Principal responsibilities

– Oversee, on the Board’s behalf,

the Group’s compliance with

ethical business practices,

including the appointment and

remuneration of our Third Party

sales Partners (TPPs)

– Assist the Board to fulfil its

oversight responsibilities in

respect of ethical matters, with

the aim that the Group

conducts is business with

integrity and honesty

– Advise the Board on the

identification of ethical risk and

the development of strategy

and policy on ethical matters

– Monitor compliance with the

Company’s policies and

procedures on ethical matters,

including the operation of its

whistleblowing hotline

– Oversee the investigation of

any material irregularities

identified or reported and

review any subsequent

findings and

recommendations, and report

this to the Board.

92 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Ethics Committee report continued

Operation of the Committee

The Committee is comprised of

our independent Non-executive

Directors. Kevin Loosemore

retired from the Board and the

Committee on 1 May 2023 and

Clive Whiley joined the Board

and became Chair of this

Committee on 18 May 2023,

with Brian Small joining the

Committee on 8 September

2023. Catherine Ashton and

Margaret Rice-Jones retired

from the Board and the

Committee on 12 June 2023 and

7 September 2023 respectively.

The Chief Executive Officer,

Interim Chief Financial Officer

and other senior management

may attend meetings at the

invitation of the Committee

Chair. Members of the Executive

Leadership Team and other

employees, including senior

members of divisional

leadership teams and the Ethics

Director may be asked to attend

from time-to-time to address

specific matters.

Whistleblowing

We encourage all employees and

people acting on our behalf to speak

up if they have any concerns. Ethical

questions or concerns can be raised

through an externally operated

confidential reporting service. All

reports are taken seriously and

investigated as appropriate and all

findings and remedial actions are

reported in detail to, and reviewed

by, the Ethics Committee.

Clive Whiley

Chair of the Ethics Committee

24 July 2024

Training

Regular, relevant and focused

training on ethics-related subjects is

important and the Committee

receives regular reports about our

ethics and compliance training

programme. Training during the

period included:

– E-learning and face-to-face

training relating to the roll-out of

the new Code of Business

Principles, including

acknowledgement by colleagues

that they understand and will

comply with it

– Anti-bribery and competition law

training where relevant for new

starters and those changing roles

and bi-annual refresher anti-

bribery training

– E-learning and face-to-face

sanctions awareness training

– Online training modules for TPPs

– One-to-one training for new site

Ethics Champions

– Modern slavery awareness

training

– Confirmation of understanding of

and adherence to gifts and

hospitality policy

93 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration

Chair’s introduction

to Remuneration

This report is presented in three

main sections: an annual statement

from the Chair of the Committee;

the Directors’ remuneration

policy; and the annual report on

remuneration for FY24. The Directors’

remuneration policy was approved

by shareholders at the AGM on

7 September 2023 and had a

binding effect from that date. This

policy is not subject to a vote at the

2024 AGM.

Dear Shareholder,

As Chair of the Remuneration

Committee, I am pleased to present

the Directors’ remuneration report

for the period ended 30 March

2024, my first as Chair, which has

been prepared by the Committee

and approved by the Board. I would

like to extend my thanks to Margaret

Rice-Jones for her contribution and

commitment to developing the new

remuneration policy.

This is the first year of operation of

our new remuneration policy which

was overwhelmingly approved by

shareholders at the AGM on

7 September 2023.

This year, I would like to focus on two

themes: the performance of the

Group in the financial year that

ended on 30 March 2024 and the

application of the remuneration

policy for FY25 with reference to the

remuneration principles to the wider

workforce.

Our guidance for full year adjusted

operating profit for FY24 reflected a

downturn across the currency

industry seen during FY23. The

target performance for the business

took into consideration the

challenging competitive and global

economic environment in which we

continue to operate.

Following approval of our remuneration policy

last year, as a Committee we will continue to

ensure that our Directors and workforce are

incentivised and rewarded for the delivery of

sustainable shareholder value and reliable

business performance.

Principal responsibilities

Remuneration

– Setting and reviewing the

remuneration of the Chairman,

Executive Directors and senior

managers who report to the

Chief Executive Officer

– Ensuring that all remuneration

paid to Directors is in

accordance with the

Company’s previously

approved remuneration policy

– Ensuring that all contractual

terms on termination, and any

payments made, are fair to the

individual and the Company

– Monitoring the reward policies

and practices throughout the

business

Incentive plans

– Determination of the design,

conditions and coverage of

annual and long-term incentive

plans for Directors and senior

executives and approval of

total and individual awards

under the plans

– Determination of targets for

any performance-related pay

plans

Governance and compliance

– Ensuring that provisions

relating to disclosure of

remuneration as set out in the

relevant legislation, the UK

Listing Rules and the UK

Corporate Governance Code

are fulfilled

Current members:

Brian Small (Chair)

Nick Bray

Mark Hoad

Former members:

Catherine Ashton

Margaret Rice-Jones

Dean Moore

– 4 scheduled meetings

– 100% attendance from all members during their membership

Committee members and attendance

94 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Chair’s introduction to Remuneration continued

Investment and expansion in our

Malta site continue for both our

Currency and Authentication

businesses. Management has

focused not only on building

business success but on strong

organisational foundations, including

health and safety, diversity,

employee engagement and

wellbeing, recognising the enormous

contribution all our employees have

made to securing the future of the

business.

Despite continued challenges in

speed of market recovery affecting

the top line growth the business has

reported an operating profit in line

with expectations and a net debt

position slightly better than

expectations.

Under the FY24 Annual Bonus Plan

(ABP) there has been limited bonus

award payable to Executive

Directors, in line with formulaic

outcomes.

The Committee is confident that the

level of award is representative of

the performance of the Group and

recognises the significant

contribution of the executives in

achieving the reported results while

reflecting some of the ongoing

challenges we continue to address.

We believe that it is vital that

executive remuneration is fair and

competitive so that the Group

continues to attract, motivate and

retain the highly talented people

required to deliver the challenging

targets to which we have committed.

While we continue to experience

market challenges and the impact of

volatility in the macro environment,

we are finding success in our

markets allowing us to stabilise our

position. This is resulting in a more

consistent performance in line with

market expectations.

Above all, the Committee’s objective

is to ensure that our Directors’

remuneration policy incentivises and

rewards the delivery of sustainable

shareholder value and consistent

and reliable performance in the

business.

Activities of the Committee in

the period

– Approval of the Executive

Leadership Team (ELT) Group and

strategic individual objectives for

the year

– Implementation and evaluation of

the new Directors’ remuneration

policy performance

– Review of performance targets for

short and long-term incentive

plans

– Approval of pay awards for the

Chairman, Executive Directors

and other ELT members

FY24 has seen us achieve the

guidance set, reflecting the actions

we have continued to take since

2020 to improve our resilience to

changing market conditions and the

markets we operate in now show

signs of recovery.

We have continued to see a high

tender win rate in Currency and have

built a strong order book for FY25 as

the market conditions continue to

improve.

Authentication has reported

improved revenue and profitability

versus the prior year underpinned by

strong ID sales.

We were able to extend our banking

facilities to July 2025 and agree an

amended schedule of contributions

towards our pension deficit.

We have continued with our ongoing

plans to right-size our banknote

facilities to match market demand

with a focus on operational

efficiency, flexibility, cost and

capability. During the year we also

completed the wind-down of

operations in our Kenya facility.

– Review and approval of the

Directors’ remuneration report for

FY24

– Review of market trends and

latest developments in

governance

– Review of inclusion principles for

ESG in incentives

– Awards under the UK Sharesave

scheme

– Review of broader workforce

remuneration in consideration of

executive remuneration

– Review of the report on gender

pay gap and action plan

Structure of Directors’

remuneration report

This report is presented in two main

sections: a summary of the

remuneration policy and the annual

report on remuneration for FY24.

A copy of the full remuneration

policy approved in 2023 can be

found in the 2023 Annual Report on

the Company’s website:

www.delarue.com.

We were extremely pleased that the

remuneration policy received a

96.8% positive vote by shareholders

in favour of the changes to the

policy.

Operation of the Committee

The Committee is comprised of

the Company’s independent

Non-executive Directors.

Catherine Ashton and Margaret

Rice-Jones retired from the

Board and the Committee on 18

May 2023 and 7 September

2023 respectively. Brian Small

joined the Committee as its

Chairman on 8 September 2023.

Dean Moore was appointed to

the Committee on 26 June

2023, relinquishing his role on

4 August 2023 upon his

appointment as Interim Chief

Financial Officer.

During the year, at the

Remuneration Committee

Chair’s request, the Group HR

Director and external advisors

are invited to all or part of the

meetings as appropriate.

The Committee’s effectiveness

was reviewed as part of the

overall Board effectiveness

review. For more information on

this, see page 71.

No Executive Director or

employee is present for or takes

part in discussions in respect of

matters relating directly to their

own remuneration.

95 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Chair’s introduction to Remuneration continued

No Executive Directors received a

salary increase during the year.

No bonus payments were made

under the Annual Bonus Plan during

the year in relation to FY23.

We have continued to provide

significant wellbeing benefits and

support in all locations, including

financial, physical and mental

wellbeing. We continue to review the

provisions in place in order to best

support our employees.

We maintained both formal and

informal communications channels

at site, divisional and Group levels to

ensure employees had a choice of

mechanisms to share their feedback

and ask questions, as well as

providing access to regular updates

about business performance using

online and offline platforms.

Activities of the business in

the period

The primary areas of focus for the

business during FY24 have been:

– Increased focus on driving

efficiency and greater cost

competitiveness

– Proactive procurement strategies

to take advantage of the change

in paper supply

– Targeted profitable growth and

conversion of customers, in key

product segments of Polymer,

Security Features and both Brand

and Government Revenue

Solutions (“GRS”)

– Ongoing footprint and capacity

review adding production

capability and flexibility with

Malta

– Positive cash management

– Delivering in line with ESG

strategy in all areas

– Supporting high levels of

employee engagement and

communication

– Creating certainty on potential

future cost pressures by securing

structured pay awards while

maintaining focus on balanced

rewards and wellbeing support for

all employees

– Continuing to align executive and

shareholder interests

Shareholder experience

As reported elsewhere in this annual

report, during FY24 the business

performance was in line with

expectations. The Currency business

continued to demonstrate a high

tender win rate, providing a strong

order book into FY25. Our

Authentication business benefited

from key contract renewals in GRS,

Brand and ID.

The work carried out during the

period to stabilise the financial

performance of the business has

reassured shareholders and resulted

in an increase in the share price.

The Board does not expect to pay

dividends unless and until the

Company is generating sustainable

positive free cash flow.

Remuneration outcomes FY24

As discussed elsewhere in this

report, following a challenging FY23

and re-setting of expectations into

FY24, the business has continued to

prioritise profitable sales growth,

taking advantage of market

improvements while relentlessly

continuing to focus on cost and

efficiency gains, resulting in

reporting an adjusted operating

profit of £21.0m in line with market

expectations and a net debt ahead

of expectations.

Employee experience

During FY24, our operating sites in

the UK, Malta, Sri Lanka and the USA

remained operational.

In order to reflect market demand,

we continued to reduce costs,

improve efficiencies and right-size

our manufacturing footprint. We

made the difficult decision to

reduce headcount and make

changes to shift patterns in our UK

manufacturing sites as well as

winding down operations in Kenya.

Employees who were subject to

redundancy received outplacement

and wellbeing support and were

awarded enhanced redundancy

payments above the national

statutory requirements.

We conducted a pay review for all

eligible employees in July 2023 and

negotiated further multi-year pay

deals for our collectively bargained

employees in Malta, Sri Lanka and

Westhoughton as well as securing

agreement on the July 2023 award

for those colleagues in our Debden

site.

Our Currency business delivered a

divisional adjusted operating profit

of £6.4m thanks to the focus on

operational efficiencies in recent

years. Our Authentication division

achieved positive revenue growth of

12.5% largely due to an increase in ID

sales.

Annual Bonus Plan (ABP) scorecard

financial measures account for 80%

of maximum ABP with the remaining

20% based on achievement against

strategic personal objectives

including a specific ESG metric.

While delivering in line with market

expectations and exceeding the

operating profit underpin set under

the ABP, performance did not trigger

the entry point targets. The ABP

financial metrics were set at a

stretching level higher than market

expectations. However, payment for

delivery against strategic personal

objectives was determined under

the Plan rules.

Further details on our performance

against bonus measures is set out

on page 101.

96 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Chair’s introduction to Remuneration continued

I trust you will find this report clear

and informative, and that the

Committee can continue to receive

your support at this year’s AGM.

Current ABP structure and

weighting %

Revenue 20%

Profit 30%

Net debt 30%

Strategic ESG objective 10%

Strategic personal objectives 10%

Brian Small

Chair of the Remuneration

Committee

24 July 2024

We still believe that measures for

ABP are the right ones and believe

that the balance of remuneration

between both short- and long-term

incentives is appropriate for the

business.

The performance period for the PSP

awards granted in 2021 concluded

during the year. Performance did not

meet threshold levels and therefore

none of these awards have vested.

The Committee reviewed all

remuneration outcomes in the

context of the business outcomes

and the experience of the

shareholders and the wider

workforce. In all cases it decided not

to adjust the formulaic outcomes.

We are pleased that our previous

remuneration report was supported

by shareholders at the AGM on

7 September 2023, with 99.52% of

votes cast in favour.

We welcome and are grateful for the

constructive feedback our

shareholders have provided in the

last year, which has informed our

deliberations and helped shape our

approach to remuneration.

Executive Director changes

As announced previously, Rob

Harding resigned as Chief Financial

Officer and left the business on 28

July 2023. Dean Moore joined the

Board on 26 June 2023 as Non-

executive Director, and subsequently

relinquished this role to be

appointed as Interim Chief Financial

Officer on 4 August 2023.

Priorities for FY25

The work of the Committee in FY25

will continue to focus on ensuring

that executives are fairly rewarded

for their contribution to the Group

and incentivised to deliver returns

for shareholders, while driving a

strong culture aligned to its

Environment, Social and Governance

(ESG) strategy. The Committee is

supportive of the continued

inclusion of a specific ESG metric in

the ABP. Key metrics on health and

safety, diversity and specific steps

to support the environmental

sustainability journey will also

continue to form part of personal

strategic objectives for Executive

Directors and the wider

management population.

Compliance statement

This report has been prepared

on behalf of, and has been

approved by, the Board. It

complies with the Large and

Medium-sized Companies and

Groups (Accounts and Reports)

Regulations 2008 (SI 2008/410)

as amended, the UK Corporate

Governance Code and the FCA’s

Listing Rules and takes into

account the policies of

shareholder representative

bodies.

The Companies Act 2006 and

the Listing Rules require the

Company’s auditor to report on

the audited information in their

report, and to state that this

section has been properly

prepared in accordance with

these regulations.

97 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Directors’ remuneration policy continued

Annual Bonus Plan Long Term Incentive Plan

80% Group

financial performance

10% strategic

personal

objectives and 10% ESG

Performance Share Plan Investor Return Plan

50% EPS

50% free

cash flow

TSR underpin*

60% cash

40% deferred shares

Performance-tested vesting after three years

two year post-vesting holding period

Malus and clawback and shareholding requirements

Note:

* Median performance vs FTSE 250 three year performance

Illustration of the application of remuneration policy

The following charts illustrate the potential value of the Executive Directors’ remuneration package in various

scenarios in a typical year. Salary levels are as at 30 March 2024.

Chief Executive Officer

Minimum

Target

Maximum

Maximum with

50% growth

100%

55.1%

32.6%

26.7%

19.6% 13.1% 12.1%

23.2% 15.5%

19.0% 19.0%

28.7%

35.3%

£545,617

£989,510

£1,673,347

£2,042,858

Managing Director, Currency

Minimum

Target

Maximum

Maximum with

50% growth

100%

58.5%

35.1%

28.7%

17.4%11.6% 12.6%

20.8% 13.9%

17.1% 17.1%

30.2%

37.1%

£184,460

£315,473

£525,889

£641,815

Fixed remuneration

Annual Incentive Plan (Cash)

Annual Incentive Plan (Deferred Shares)

Long Term Incentive Plan

Dean Moore as an Interim Chief Financial Officer does not receive any variable pay.

Directors’

remuneration policy

Summary of remuneration policy

The overriding objective of the

remuneration policy is to encourage,

reinforce and reward the delivery of

sustainable shareholder value while

providing an effective mechanism to

attract, retain and motivate

executives and senior management

to deliver long-term growth and

value.

The Remuneration Committee

believes executives should be

rewarded through performance-

related pay scales that are

commensurate with the delivery of

value for the business and with

annual increases comparable to

awards across the majority of the

workforce.

Incentives and particularly long-term

incentives should account for a

significant proportion of the overall

remuneration package of Executive

Directors so that their reward is

aligned with shareholder interests

and the Group’s performance,

without encouraging excessive

risk-taking.

Performance-related elements of

remuneration therefore form a

significant proportion of the total

remuneration packages. This is

illustrated on this page.

The Committee continues to take

into account performance on

Environmental, Social and

Governance (ESG) matters with

annual bonus having a direct link to

both delivery against strategic

personal objectives and a specific

measurable ESG target.

98 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Directors’ remuneration policy continued

Illustrative scenario charts

Performance scenarios for the ABP and LTIP assume the following:

Minimum Target Maximum Maximum with share growth of 50%

There is no cash bonus or deferred share

award under the ABP or vesting under the

Long Term Incentive Plan

Target cash bonus and deferred shares under

the ABP, target vesting under the Long Term

Incentive Plan

Maximum cash bonus, maximum deferred

shares under the ABP, maximum vesting under

the Long Term Incentive Plan

Maximum cash bonus, maximum deferred

shares under ABP, maximum vesting under the

Long Term Incentive Plan with share price

growth of 50%

Assumption for scenario charts:

Minimum Target Maximum Maximum with share growth of 50%

Fixed pay (base salary, benefits and pension) Fixed pay (base salary, benefits and pension) Fixed pay (base salary, benefits and pension) Fixed pay (base salary, benefits and pension)

No bonus payout 50% of maximum bonus opportunity (67.5% of

salary for CEO, 57.5% of salary for CFO and

other Executive Directors)

100% of maximum bonus opportunity (135% of

salary for CEO, 115% of salary for CFO and

other Executive Directors)

100% of maximum bonus opportunity (135%

of salary for CEO, 115% of salary for CFO and

other Executive Directors)

No vesting under ABP or the Long Term

Incentive Plan

60% will be payable immediately in cash and

40% will be deferred in shares

60% will be payable immediately in cash and

40% will be deferred in shares

60% will be payable immediately in cash and

40% will be deferred in shares. 40% of ABP

deferred shares vesting valued at 60%

25% of shares vesting (25% of salary for CEO

and CFO and other Executive Directors)

100% of shares vesting (100% of salary for

CEO, CFO and other Executive Directors)

100% of shares vesting valued at 150%

Executive Director remuneration mix FY25

Based on the above performance scenarios the table below illustrates that a significant proportion of Executive Directors’ remuneration is biased towards variable pay at maximum:

% of pay at

minimum

achieved

% of pay at

target

achieved

% of pay at

maximum

achieved

CEO Fixed 100 55 33

Variable – 45 67

MD, Currency Fixed 100 58 35

Variable – 42 65

CFO Fixed 100 100 100

Variable – – –

The remuneration mix above is based on the remuneration policy as it is intended to be operated for FY25. For further information on the Directors’ remuneration policy please see

www.delarue.com. Dean Moore as an Interim Chief Financial Officer does not receive any variable pay.

99 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Annual Report on remuneration

This section of the Directors’ remuneration report shows how the Remuneration Committee implemented the policy on Directors’ remuneration in the year ended 30 March 2024 including all

elements of remuneration received by Executive Directors and the incentive outturns for FY24.

Single figure of remuneration for each Director (audited)

The table below shows how we have applied the current remuneration policy during FY24. It discloses all the elements of remuneration received by the Directors during the period.

Fixed Variable

Salary and fees

Benefits (excluding

pensions)

Pensions

Total

Fixed Bonus

Long term incentive

(vested)

Total

Variable Total

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2024

£’000

2023

£’000

Executive Directors

Clive Vacher 480 477 28 28 48 48 556 66 – – – – 622 553

Ruth Euling

154 265 9 37 16 – 179 21 – – – – 200 302

Dean Moore

235 – – – – – 235 – – – – – 235 –

Rob Harding

(Resigned 28 July 2023) 98 291 24 14 6 17 128 – – – – – 128 322

967 1,033 61 79 70 65 1,098 87 – – – – 1,185 1,177

Chairman

Clive Whiley

158 – 38 – – – 196 – – – – – 196 –

Kevin Loosemore (Resigned 1 May 2023) 17 206 – – – – 17 – – – – – 17 206

Non-executive Directors

Nick Bray 60 60 – – – – 60 – – – – – 60 60

Brian Small 34 – – – – – 34 – – – – – 34 –

Mark Hoad 56 26 – – – – 56 – – – – – 56 26

Margaret Rice-Jones (Retired 7 September 2023) 30 65 – – – – 30 – – – – – 30 65

Catherine Ashton (Resigned 12 June 2023) 10 52 – – – – 10 – – – – – 10 52

Aggregate emoluments 1,332 1,442 99 79 70 65 1,501 87 – – – – 1,588 1,586

Notes:

The figures in the single figure table above are derived from the following:

a Salary and fees: the actual salary and fees received during the period.

b Benefits (excluding pensions): the gross value of all taxable benefits received in the period, including for example car allowance and private medical and permanent health insurance.

c Bonus: A description of the performance measures that applied for the year FY24 is provided on page 101.

d Long term incentive: no awards have vested for current Executive Directors since appointment.

e Pension: See page 101 for further details of pension arrangements.

f Ruth Euling’s 2024 salary is as a result of a change in working hours with effect from April 2023. The value includes a reduction of £4,607 relating to additional holiday entitlement purchased through salary sacrifice.

g The benefits figure for Clive Whiley reflects taxable business expenses.

h For FY24, Dean Moore received £5,857 fees as a Non-executive Director from the period of 27 June 2023 to 4 August 2023 and from 4 August 2023 onwards he received a salary of £229,529 as interim Chief Financial Officer.

i Rob Harding’s benefits value includes a payment of £19,739 for outstanding holidays on leaving the business.

100 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Annual Report on remuneration continued

Changes in Executive Directors during the year

Chief Financial Officer, Rob Harding, resigned on 31 January 2023 and left employment and the

Board on 28 July 2023.

Dean Moore relinquished his role as Non-executive Director and became Interim Chief Financial

Officer with effect from 4 August 2023. He is not subject to inclusion in any ABP or LTIP Awards

nor does he receive any pension contributions.

Individual elements of remuneration

Base salary and fees (audited)

Base salaries for Executive Directors are normally reviewed annually by the Remuneration

Committee and are set with reference to individual performance, experience and

responsibilities, Group performance, affordability and market competitiveness.

The Directors’ remuneration policy approved by shareholders at the 2023 AGM sets out an

expectation that increases in salary for Executive Directors will not normally exceed the range of

increases awarded to other employees in the Group except in the specific circumstances listed

in the remuneration policy.

The Committee determined that Executive Directors would not receive a pay award during

FY24. The change in Ruth Euling’s salary figure below is as a result of a change in working hours

with effect from April 2023.

Base

salary level

July 2023

£’000

Base

salary level

July 2022

£’000

Increase

Clive Vacher 480 480 –

Dean Moore 350 – –

Ruth Euling 159 267 –

The remuneration policy for Non-executive Directors, other than the Chairman, is determined

by the Board. The Remuneration Committee determines the Chairman’s fee. Fees reflect the

responsibilities and duties of Non-executive Directors while also having regard to the

marketplace. The Non-executive Directors do not participate in any of the Group’s share

incentive plans, nor do they receive any benefits or pension contributions. It is the intention that

consistent with the policy for Executive Directors, increases for Non-executive Directors would

not normally exceed the range of increases awarded to the wider workforce.

The fees for the Non-executive Directors and the Chairman did not increase in FY24. The

Committee has determined that no further increase will be made in FY25.

The fees for 2023 are as follows:

Non-executive Director fees

July 2023

£’000

July 2022

£’000

Basic fee 51.7 51.7

Additional fee for chairmanship of Audit and Remuneration Committees

and Senior Independent Director 8 8

External directorships of Executive Directors

The Board considers whether it is appropriate for an Executive Director to serve as a non-

executive director of another company. Clive Vacher and Ruth Euling hold no remunerated

external directorship appointments. Dean Moore is currently independent Non-executive

Director at both Griffin Mining Ltd and THG plc.

Pension contributions (audited)

During FY24 Clive Vacher’s pension contributions remained in line with those available to the

workforce; he received a pension contribution of 10% on the basis of a 6% individual

contribution. All other Executive Directors also received a pension contribution in line with levels

available to the workforce, no greater than 10% employer contribution.

None of the Executive Directors in the period were a member of the legacy defined benefit

schemes. Clive Vacher and Ruth Euling received a pension contribution of 10% of salary on the

basis of a 6% individual contribution, in line with levels available to other UK-based employees.

Rob Harding received a pension contribution of 9% of salary on the basis of 6% individual

contribution. Any new Executive Director would likewise receive pension contributions in line

with levels available to the workforce.

Variable remuneration (audited)

Annual bonus for FY24

The Annual Bonus Plan for FY24 was issued with the following financial structure and targets:

Measure Threshold Target Maximum Actual

% of

maximum

achieved

Group revenue £325.5m £333m £385.0m £310.3m 0%

Group adjusted operating profit £22.3m £26.5m £30.0m £21.0m 0%

Average net debt £95.6m £88m £83.0m £99.3m 0%

101 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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Annual Report on remuneration continued

All financial metrics, Group revenue, adjusted operating profit and average net debt were based

on an entry point set at the upper end of consensus expectation and maximum award being

achieved at a stretch target significantly above market expectations. While the Group adjusted

operating profit underpin was met, and the Committee was therefore satisfied that it was

appropriate for the non-financial elements to pay out. The specific financial targets under the

ABP for FY24 outlined above were not met and as such no award will be made under the plan in

relation to the financial metrics.

Eighty per cent of award is linked to the achievement of the financial metrics, 10% of the

Executive Directors’ bonus is based on achievement of strategic personal objectives and a

further 10% is linked to achievement of a specific ESG metric. Personal strategic objectives were

aligned to the delivery of the strategic plan and comprised of both tactical and transformational

targets focused on the achievement of core strategic priorities. ESG metrics are based on

formulaic outcomes. The detail of the objectives, for all Executive Directors, which were

consistently aligned, are outlined below:

Summary of personal strategic objectives Summary of performance

Grow repeatable and profitable

business

– Deliver an improved order book beyond

FY24 budget expectations

– Win key and critical contracts and

extensions in both Currency and

Authentication

– Secure refinancing by end December

2023

Achieved

– Improved order book into FY25 was

achieved

– All key and critical contracts and

contract extensions won

– Refinancing extension agreed

Drive efficient operations and

continued removal of legacy issues

– Ensure the business is positioned to be

cash generative by FY25

– Develop organisational structure and

footprint to deliver further cost

reduction and efficiency in FY24

Partially achieved

– Net debt was £89.4m at 30 March 2024,

which is an improved performance

against budget and external expectation.

– Continued cost saving and efficiency

projects ran during FY24 delivering

further in year savings

ESG

– Ensure suppliers accounting for 80% of

total procurement spend are on

EcoVadis

Partially achieved

– 50% of total spend suppliers have

engaged in an EcoVadis assessment

Component 20% of maximum award Award partially achieved

In reaching its decision on ABP outcome, the Committee considered the formulaic outcome of

the targets as well as the Company’s underlying financial, operational and strategic progress

during the year, and the Executive Directors’ personal contribution to the delivery of the

strategic objectives. The Committee also took into account wider stakeholder perspectives. The

Committee considered that the formulaic outcomes for Executive Directors were reflective of

the underlying business performance. As a result, it was determined that Clive Vacher will

receive an award of 13.5% and Ruth Euling will receive 13.2% of salary.

Long-term incentive – Performance Share Plan (PSP) and Investor Return Plan (IRP)

During FY24, the long-term incentives were implemented under the new policy approved at the

AGM in 2023. The LTIP awards were issued as a combination of Performance Share Plan (PSP)

and Market Value Share Options. Awards under the existing Performance Share Plan are subject

to two performance conditions (free cash flow and EPS) both equally weighted and measured

over three year periods. The market value options granted under the new Investor Return Plan

will be subject to an underpin that our Total Shareholder Return at least equals the return of the

FTSE Mid-250 (excluding Investment Trusts) Index measured over a three-year performance

period.

This is a share settled long-term incentive aligned closely with business strategy and the

interests of shareholders through the performance measures chosen and the link to share price

growth. The plans are designed to provide Executive Directors and selected senior managers

with a long-term incentive that promotes sustainable and long-term performance and

reinforces alignment between participants and shareholders.

Performance measures applying to long-term incentives

In 2020, the PSP measures were revised and RTSR (Total Shareholder Return relative to FTSE

250 companies, measured over three years) was used instead of ROCE alongside the previous

EPS metric.

From 2023, PSP awards were subject to performance conditions based on average growth in

adjusted basic EPS and average free cash flow measured over three financial years.

IRP awards are subject to an RTSR underpin linked to median performance vs the FTSE 250

measure over a three-year period.

102 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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IRP awards would give participants the right, but not obligation, to buy shares at a set price after

a three-year vesting period and an opportunity to hold for a further seven years prior to

exercise. Value of options under the IRP would be commensurate with a portion of the total

award for executives applying a fair value same date grant.

In addition, the Remuneration Committee must be satisfied that the vesting reflects the

underlying performance of the Group and retains the flexibility to adjust the vesting amount to

ensure it remains appropriate.

Any adjustments will depend on the nature, timing and materiality of any contributory factors.

PSP award vesting in FY24

PSP grants made in 2021 outlined below have not met performance criteria and therefore no

awards vested under the PSP in FY24 for any Executive Director.

LTIP awards made in 12 October 2023 (audited)

The Committee granted awards under the PSP and IRP on 12 October 2023 to participants

including the Executive Directors who were eligible.

The Remuneration Committee took into consideration recent shareholder experience when

granting the LTIP award in 2023. Following the shareholder experience of a fall in the share price

and the relatively low share price at point of grant, the Committee determined that for the 2023

award the IRP plan would be subject to a premium price of 80p, ensuring that executives are

awarded for share price growth reflecting appropriate shareholder return.

The measures and targets were confirmed at the time of grant via a Regulatory News Service

announcement.

Executive Directors received IRP awards during FY24 as follows:

Executive Director

Number of

shares awarded Date of award

of salary

Face value

£’000

Exercise

price

Performance period

end date

Clive Vacher 640,878 12 October 2023 60 397 £0.80 October 2026

Ruth Euling 212,079 12 October 2023 60 131 £0.80 October 2026

Notes:

1 The number of shares awarded was calculated by reference to a price of 62 pence, being the average of the closing middle market

price of the share for the five consecutive dealing days including and ending on 11 October 2023.

2 In addition to the 80p premium exercise price, in order for IRP option awards to be exercisable, a performance underpin of three year

TSR greater than the median of the FTSE 250 index must be achieved.

Executive Directors received PSP awards during FY24:

Executive Director

Number of

shares awarded

Date of

award

of salary

Face value

£’000

Vesting at

threshold

(as a % of

maximum)

Performance period

end date

Clive Vacher 309,602 12 October 2023 40 192 25 October 2026

Ruth Euling 102,454 12 October 2023 40 64 25 October 2026

All PSP options were granted as nil-cost options, with the number of shares based on a

percentage of salary and the average share price over a five-day period prior to the date of

grant, being 62p. The Remuneration Committee may add dividend shares that would have

accrued during the performance period and extended vesting period on that part of the award

that may ultimately vest.

The IRP and PSP awards were made to the Executive Directors at a level equivalent to a face

value of 100% made in PSP shares, having calculated a theoretical fair value of an IRP option

(taking into account the 80p exercise price) in order to determine an exchange ratio between

PSP shares and IRP options.

A summary of the performance levels and award vesting levels that apply to awards under the

2021-2023 LTIP awards are shown in the table below:

Year of award Measure

Vesting % of

element at

threshold

Vesting % of

element at

maximum

Performance

target at

threshold

Performance

target at

maximum

2023 (PSP) EPS¹ 25 100 3p 5p

Free cash flow

25 100 £10m £15m

2023 (IRP) RTSR underpin

100 100

2022 EPS¹ 25 100 13.9% 21.9%

RTSR 25 100 Median

Upper

Quartile

2021 EPS¹ 25 100 8.5% 16.7%

RTSR 25 100 Median

Upper

Quartile

2020 EPS¹ 25 100 11% 19.2%

RTSR 25 100 Median

Upper

Quartile

Notes:

1 Underlying earnings per share. Based on average annual cumulative growth during the performance period.

2 Free cash flow is net cash flow from operating activities (operating cash flow including tax, interest and dividends from JVs) less capex.

3 RTSR underpin: median TSR performance vs FTSE 250 3 year TSR performance.

103 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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Implementation of the remuneration policy in FY25

The remuneration arrangements in FY25 will operate in line with our remuneration policy.

To better align with strategic outcomes, we will measure closing net debt in place of average net

debt in FY25.

Salary and benefits

The Committee has determined Clive Vacher will be awarded a salary increase of 3% in line with

the wider workforce. Ruth Euling will be awarded 5% increase reflective of her contribution and

current pay positioning. Both will be effective from 1 July 2024.

The Committee remains aware of the need for salary levels to continue to be competitive and

commensurate with performance.

Annual Bonus Plan FY25

The Remuneration Committee has carefully considered bonus performance measures for FY25

and concluded that the current measures set out in the table on page 97 remain highly relevant.

Revenue, adjusted operating profit and closing net debt targets ensure focus remains on

maintaining profitable growth and strong cash management. Cost competitiveness and

improved efficiency also remain a key priority, alongside a targeted increase in order intake,

supporting growth in both Currency and Authentication. Financial targets will remain in line with

the adjusted market expectations to ensure that executives remain incentivised and rewarded

for delivering in line or better than the plans as set out. As outlined in the policy and applied in

prior years a 20% weighting on non-financial strategic targets inclusive of a specific ESG metric

has been applied ensuring that Executive Directors are incentivised on both the delivery of clear

financial metrics and good management of the underlying business.

The current maximum entitlement of the Chief Executive Officer under the ABP remains 135% of

salary and other Executive Directors remains at 115% of salary.

Structure & weighting Weighting

Revenue 20%

Adjusted operating profit 30%

Closing net debt 30%

Group strategic ESG 10%

Group strategic personal objectives 10%

No payment will be made on any element of bonus (including the personal element) if a

minimum adjusted operating profit is not achieved.

Personal strategic objectives for the Chief Executive Officer and other Executive Directors

are focused again on targeted strategic objectives aligned to the business strategy and plan

aimed at:

– growing repeatable and profitable business in all market sectors

– driving efficient operations with continued targeted removal of legacy issues and strong

focus on ESG and values

– investing for the future, developing differentiation in all market sectors, exploring adjacent

market opportunities and delivering next generation product development

The Committee will assess the achievement of the detailed objectives that underpin these

goals on a quantifiable and objective basis and to have clear retrospective disclosure in the

Directors’ remuneration report.

The Committee will rigorously review incentive outturns and will consider the overall

performance of the business, not just the outcome of each measure.

The specific performance targets are not disclosed while still commercially sensitive but will be

disclosed the following year.

Performance measures applying to LTIP Awards to be made in 2025

Awards to be made in FY25 as outlined below, in accordance with the Remuneration Policy.

Performance measure Weighting

Entry

pay-out

Target

pay-out

Stretch

pay-out

PSP EPS 20% 0% 50% 100%

Free cash flow 20% 0% 50% 100%

IRP RTSR underpin

Median performance

vs FTSE 250 (three-year

performance).

Equivalent to 60% of

award on a relative fair

value calculation

100% awarded if underpin met

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Further work is underway to calibrate performance targets. Full details of these will be disclosed

via an RNS announcement at the time of award.

The award will vest on the third anniversary of the grant of the award, subject to meeting

performance criteria, but any shares which vest will be subject to a further two year holding

period and only become capable of exercise on the fifth anniversary of the grant of the award.

Shareholding requirements

Executive Directors are required to build up a shareholding equivalent to 200% of salary over a

five year period. It is intended that this is met by Executive Directors retaining 100% of vested

post-tax Deferred Bonus shares, restricted shares and performance shares until the

requirement is met in full.

The policy has a post-employment shareholding requirement of 200% of salary (or the actual

shareholding if lower) for the first year following exit and 50% of this guideline level for the

second year following exit.

Executive Directors’ service contracts

The table below summarises the notice periods contained in the service contracts for Executive

Directors in office as at 30 March 2024.

Year of award Date of contract Date of appointment

Notice from

Company

Notice from

Director

Clive Vacher 6 October 2019 7 October 2019 6 months 6 months

Ruth Euling 1 April 2021 1 April 2021 6 months 6 months

Dean Moore 4 August 2023 4 August 2023 3 months 3 months

Non-executive Directors’ letters of appointment

The Chairman and Non-executive Directors have letters of appointment rather than service

contracts.

Non-executive Director Date of appointment

Current letter of

appointment end date

Catherine Ashton 22 September 2020 n/a

Nick Bray 21 July 2016 AGM 2025

Kevin Loosemore 2 September 2019 n/a

Margaret Rice-Jones 22 September 2020 n/a

Clive Whiley 18 May 2023 18 May 2026

Dean Moore 26 June 2023 n/a

Brian Small 8 September 2023 8 September 2026

Mark Hoad 13 September 2022 29 September 2025

Kevin Loosemore, Catherine Ashton and Margaret Rice-Jones resigned from the Board on 1 May

2023, 18 May 2023 and 7 September 2023 respectively. Dean Moore relinquished his role as

Non-executive Director to become Interim Chief Financial Officer on 4 August 2023.

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Payments for loss of office (audited)

There were no payments for loss of office during the period.

Directors’ interests in shares (audited)

The Directors and their connected persons had the following interests in the ordinary shares of the Company at 30 March 2024:

Variable

Subject to

performance conditions

Not subject to

performance conditions Vested shares

Current

shareholding

ordinary

shares (held

outright)

Current

shareholding

as % of salary

Performance

Share Plan

Investor

Returns Plan

Performance

Share Plan

Deferred

Bonus Plan SAYE

Vested

unexercised

during the

period

Vested

exercised

during the

period

Executive Directors

Clive Vacher

303,123 51 1,033,022 640,878 – 67,315 29,925 – –

Dean Moore¹ – 0 – – – – – – –

Ruth Euling

85,402 45 500,329 212,079 – 31,844 – 10,131 11,023

Rob Harding (Resigned 28 July 2023) 36,487 n/a – – – – – – –

Non-executive Chairman

Clive Whiley

200,000 n/a – – – – – – –

Kevin Loosemore (Resigned 1 May 2023) 947,840 n/a – – – – – – –

Non-executive Directors

Nick Bray – n/a – – – – – – –

Mark Hoad 50,000 n/a – – – – – – –

Brian Small

– n/a – – – – – – –

Margaret Rice-Jones (Retired 7 September 2023) – n/a – – – – – – –

Catherine Ashton (Resigned 12 June 2023) – n/a – – – – – – –

Notes:

1 Appointed to the Board as an Independent Non-executive Director on 26 June 2023 and as Interim CFO on 4 August 2023.

2 Appointed on 18 May 2023.

3 Appointed on 8 September 2023.

4 On 8 July 2024, awards made to Clive Vacher and Ruth Euling under the Deferred Bonus Plan (“DBP”) automatically vested and were released. In line with the rules of the DBP, the Company withheld a proportion of each award and sold sufficient ordinary shares of the Company

(“Shares”) to fund income tax and national insurance withholdings and the associated dealing costs. The number of Shares then retained by Clive Vacher and Ruth Euling were 35,564 and 16,823 respectively. Following these transactions, Clive Vacher’s and Ruth Euling’s interests

in the Shares of the Company were 338,687 and 102,225 respectively.

Other than as set out in footnote 4 above, there have been no changes in Directors’ interests in ordinary shares in the period from 31 March 2024 to 24 July 2024.

All interests of the Directors and their families are beneficial.

The current shareholdings as a percentage of salary during the period are calculated using the closing De La Rue plc share price of 81.5p on 29 March 2024, being the last working day before the

end of FY24.

106 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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Directors’ interests in vested and unvested share awards (unaudited)

The awards over De La Rue plc shares held by Executive Directors under the DBP, PSP, IRP and Sharesave scheme during the period are detailed below:

Date of

award

Total

award as at

25 March

2023

Awarded

during the

year

Exercised

during the

year

Lapsed/

cancelled

during the

year

Awards

held at

30 March

2024

Awards

vested

(unexercised)

during the

year

Strike

price

(pence)

Market price

per share at

exercise

date

(pence)

Date of

vesting

Expiry

date

Clive Vacher

Deferred Bonus Plan

Jul 21 63,700 – 63,700 – – – 186.16

– Jul 23 Jul 23

Jul 22 67,315 – 67,315 – – – 78.87

– Jul 23 Jul 23

Jul 22 67,315 – – – 67,315 – 78.87

– Jul 24 Jul 24

Performance Share Plan

Jul 20 340,187 – – 340,187 – – 132.28

– Jul 23

Jul 30

Jun 21 239,361 – – – 239,361 – 191.76

– Jun 24

Jun 31

Aug 22 454,059 – – – 454,059 – 84.55

– Aug 25

Aug 32

Oct 23 – 309,602 – – 309,602 – 62.00

– Oct 26

Oct 33

Investor Returns Plan Oct 23 – 640,878 – – 640,878 80.00

– Oct 26

Oct 33

Total 1,231,937 950,480 131,015 340,187 1,711,215

Sharesave options

Feb 23 29,925 – – – 29,925 – 60.15

– Apr 26 Sep 26

Dean Moore

Deferred Bonus Plan

– – – – – – – – – – –

Performance Share Plan – – – – – – – – – – –

Investor Returns Plan – – – – – – – – – – –

Total – – – – – – – – – – –

Sharesave options

– – – – – – – – – – –

107 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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Date of

award

Total

award as at

25 March

2023

Awarded

during the

year

Exercised

during the

year

Lapsed/

cancelled

during the

year

Awards

held at

30 March

2024

Awards

vested

(unexercised)

during the

year

Strike

price

(pence)

Market price

per share at

exercise

date

(pence)

Date of

vesting

Expiry

date

Ruth Euling

Deferred Bonus Plan

Jul 21 25,668 – 25,668 – – – 186.16

– Jul 23 Jul 23

Jul 22 31,845 – 31,845 – – – 78.87

– Jul 23 Jul 23

Jul 22 31,844 – – – 31,844 – 78.87

– Jul 24 Jul 24

Performance Share Plan Dec 13

11,023 – 11,023 – – – 892.90

– Dec 16 Dec 23

Jun 15 2,531 – – – 2,531 2,531 541.00

– Jun 18 Jun 25

Jun 15 1,799 – – – 1,799 1,799 541.00

– Jun 19 Jun 25

Jun 16 2,655 – – – 2,655 2,655 520.85

– Jun 19 Jun 26

Jun 16 1,858 – – – 1,858 1,858 520.85

– Jun 20 Jun 26

Jun 17 773 – – – 773 773 680.10

– Jun 20 Jun 27

Jun 17 515 – – – 515 515 680.10

– Jun 21 Jun 27

Jul 20 181,433 – – 181,433 – – 132.28

– Jul 23

Jul 30

Jun 21 135,586 – – – 135,586 – 191.76

– Jun 24

Jun 31

Aug 22 252,158 – – – 252,158 – 84.55

– Aug 25

Aug 32

Oct 23 – 102,454 – – 102,454 – 62.00

– Oct 26

Oct 33

Investor Returns Plan Oct 23 – 212,079 – – 212,079 – 80.00

– Oct 26

Oct 33

Total 679,688 314,533 68,536 181,433 744,252 10,131

Sharesave options – – – – – – – – – – –

Rob Harding (Resigned 28 July 2023)

Deferred Bonus Plan

Jul 21 17,217 – 17,217 – – – 186.16

– Jul 23 Jul 23

Jul 22 35,042 – 35,042 – – – 78.87

– Jul 23 Jul 23

Jul 22 35,043 – – 35,043 – – 78.87

– Jul 24 Jul 24

Performance Share Plan Jul 20 207,892 – – 207,892 – – 132.28

– Jul 23

Jul 30

Jun 21 146,276 – – 146,276 – – 191.76

– Jun 24

Jun 31

Aug 22 277,480 – – 277,480 – – 84.55

– Aug 25

Aug 32

Investor Returns Plan – – – – – – – – – – –

Total 718,950 – 52,259 666,691 –

Sharesave options

Jan 21 8,704 – – 8,704 – – 131.10

Mar 24 Aug 24

Jan 22 2,689 – – 2,689 – – 112.43

– Mar 25 Aug 25

Notes:

1 These awards do not have any performance conditions attached. No award was made under the Deferred Bonus Plan during 2023.

2 Mid-market share value of a De La Rue plc ordinary share averaged over the five dealing days immediately preceding award date.

3 For Sharesave options, the share price shown is the exercise price which was 80% of mid-market value of an ordinary share averaged over the three dealing days immediately preceding award date.

4 For Sharesave options, the share price shown is the exercise price which was 90% of mid-market value of an ordinary share averaged over the three dealing days immediately preceding award date.

5 For the Investor Returns Plan, the share price shown is the exercise price which has been set at 80p, a premium of 29% to the share price of 62p at the time of grant.

6 Three-year vesting period post award date plus a further two-year holding period subject to the award vesting.

7 Appointed to the Board as an Independent Non-executive Director on 26 June 2023 and as Interim CFO on 4 August 2023.

8 Sharesave options do not have any performance conditions attached.

108 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

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Chief Executive Officer pay, Total Shareholder Return (TSR) and all employee pay

This section of the report enables our remuneration arrangements to be seen in context by providing:

– A history of De La Rue’s Chief Executive Officer’s remuneration for the current and previous nine years

– De La Rue’s TSR performance for the 10 years to 30 March 2024

– A comparison of the year on year change in De La Rue’s Chief Executive Officer’s remuneration with the change in the average remuneration across the Group

– A year on year comparison of the total amount spent on pay across the Group with profit before tax and dividends paid

Chief Executive Officer’s pay

Period ended March 2014 2015 2016 2017 2018 2019 2020 2020 2021 2022 2023 2024

Chief Executive Officer

Tim

Cobbold

Martin

Sutherland

Martin

Sutherland

Martin

Sutherland

Martin

Sutherland

Martin

Sutherland

Martin

Sutherland

Clive

Vacher

Clive

Vacher

Clive

Vacher

Clive

Vacher

Clive

Vacher

Single figure of total remuneration £’000 1,071 1,071 998 899 783 954 340 249 1,106 792 542 622

Annual bonus payout as a % of maximum opportunity Nil 14 57 40 Nil 29 Nil Nil 98 42 Nil 10

LTIP vesting against maximum opportunity (%) 60 Nil Nil Nil 25 25 Nil Nil Nil Nil Nil Nil

Notes:

1 Appointed Chief Executive Officer on 1 January 2011 and resigned on 29 March 2014. Includes award to the value of £450,000 at the date of award under the Recruitment Share Award (which vested on 31 January 2014).

2 Appointed 13 October 2014, resigned on 7 October 2019.

3 Appointed 7 October 2019.

TSR performance

The graph below shows the value, by 30 March 2024, of £100 invested in De La Rue plc on 25 March 2014, compared with the value of £100 invested in the FTSE 250 Index (excluding Investment

Trusts) on the same date, assuming that all dividends paid are reinvested and on the other normal principles for assessing Total Shareholder Return (TSR). The other points plotted are the values

at intervening trading days.

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Total shareholder return

Source: FactSet

2014 20232015 201820172016 2019 2020 2022 20242021

TSR

De La Rue plc FTSE 250 (excluding Investment Trusts)

100

150

200

250

Chief Executive Officer pay ratio

The table below sets out the CEO pay ratios from FY20 comparing the single total figure of the remuneration with the equivalent figures for lower quartile, median and upper quartile UK

employees. UK employees were chosen as a comparator group to avoid the impact of exchange rate movements over the year. UK employees make up approximately 40% of the total employee

population.

As the quartile individuals are representative of the Company’s pay distribution the ratios presented are consistent with the pay, reward and progression policies for the UK employees.

A significant portion of the CEO remuneration is delivered through variable incentives where awards are linked to business performance over a longer term. This means that ratios may fluctuate

year to year.

Year Method

25th percentile

pay ratio

Median pay

ratio

75th percentile

pay ratio

2023/2024 Option A 16:1 12:1 9:1

2022/2023 Option A 14:1 12:1 9:1

2021/2022 Option A 21:1 16:1 13:1

2020/2021 Option A 30:1 24:1 18:1

2019/2020 Option B 19:1 14:1 9:1

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Annual Report on remuneration continued

Total pay and benefits amounts used to calculate ratio.

25th percentile ratio 50th percentile ratio 75th percentile ratio

Year Method

Total pay and

benefits Total salary

Total pay and

benefits Total salary

Total pay and

benefits Total salary

2023/2024 Option A £40,057 £33,884 £50,414 £44,844 £72,435 £58,952

2022/2023 Option A £37,556 £33,905 £46,886 £42,660 £61,407 £56,377

2021/2022 Option A £36,997 £28,376 £49,614 £44,233 £62,554 £54,285

2020/2021 Option A £37,017 £32,585 £45,423 £41,795 £62,771 £53,919

2019/2020 Option B £32,001 £24,511 £44,450 £39,316 £65,908 £54,000

Percentage change in Directors’ remuneration

The table below compares the percentage change in the Directors’ salary, bonus and benefits to the average change in salary, bonus and benefits for all UK employees between FY19 and FY24.

ABP and Sales Incentive Plans were not paid in FY23. The table shows the UK employee average percentage salary change which is comprised of collective and individual awards throughout the

financial year.

2023/24 2022/23 2021/22 2020/21

Salary/fees Benefits Annual bonus Salary/fees Benefits Annual bonus Salary/fees Benefits Annual bonus Salary/fees Benefits Annual bonus

Executive Directors

Clive Vacher 0.6% 0.0% – 2.5% 0% 2.0% 0.0% -55.0% 3.6% 26.0% –

Ruth Euling -42% -76.0% – 2.5% 2.4% – – – – – –

Dean Moore –

Former Executive Directors:

Rob Harding -66.7% 74% – 2.5% 0 2.0% 148.6% -14.0% – – –

Non-executive Directors:

Clive Whiley (Chairman) – – – – –

Mark Hoad 116.4% – – – – – –

Brian Small – – – – – –

Nick Bray 0.0% – 1.0% 2.0% – 0.0% – –

Former Non-executive Directors:

Kevin Loosemoore (Chairman) -91.7% – 1.5% – 2.0% – -0.5% – –

Margaret Rice-Jones

-54% – 14.6% 18.3% – – – –

Catherine Ashton -80.3% – 1.5% 2.0% – – – –

UK employee average 2.6% 0% 4.8% 0% 1.5% 0.0% -146.0% 3.8% 0.0% –

111 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Remuneration continued

Annual Report on remuneration continued

Relative spend on pay

The following table sets out the percentage change in payments to shareholders and the overall

expenditure on pay across the Group.

2023/24

£m

2022/23

£m

Change

Dividends (note 10 to the financial statements) – – N/A

Overall expenditure on pay (note 4 to the financial statements) 76.4 95.0 -20

Statement of shareholder voting

The Directors’ remuneration report was approved by shareholders at our AGM on 7 September

2023. Details of the poll voting result on the relevant resolutions are shown below:

Total votes cast For

(%) Against (%)

Votes

withheld

Approval of

remuneration report 111,962,175 111,422,255 99.52 539,920 0.48 37,238,224

Notes:

1 The votes ‘For’ include votes given at the Chairman’s discretion.

2 A vote withheld is not legally a vote cast and, as such, is not counted in the calculation of the proportion of votes ‘For’ and ‘Against’.

De La Rue carefully monitors shareholder voting on the remuneration policy and implementation

and the Company recognises the importance of ensuring that shareholders continue to support

the remuneration arrangements. All voting at the AGM is undertaken by poll.

Remuneration advice

The Remuneration Committee consults with the Chief Executive Officer on the remuneration of

executives directly reporting to him and other senior executives and seeks to ensure a

consistent approach across the Group taking account of seniority and market practice and the

key remuneration policies outlined in this report. During FY24, the Committee also received

advice from Willis Towers Watson who has no other connection with the Company or individual

Directors. Willis Towers Watson has been formally appointed by the Remuneration Committee

and advised on the structure, measures and target setting for incentive plans, executive

remuneration levels and trends, corporate governance developments and Directors’

remuneration report preparation. The Remuneration Committee requests Willis Towers Watson

to attend meetings periodically during the year.

Willis Towers Watson is a member of the Remuneration Consultants’ Group and has signed up

to the code of conduct relating to the provision of executive remuneration advice in the UK. In

light of this, and the level and nature of the service received, the Committee remains satisfied

that the advice has been objective and independent.

Total fees for advice provided to the Remuneration Committee during the year by Willis Towers

Watson were £24,311.

Dilution limits

The share incentives operated by the Company comply with the institutional investors’ share

dilution guidelines. The Directors’ remuneration report was approved by the Board on 24 July

2024 and signed on its behalf.

Brian Small

Chair of the Remuneration Committee

24 July 2024

112 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Directors’ report

The Directors present their annual

report on the affairs of the Group for

the period ended 30 March 2024.

Introduction

De La Rue plc is a public limited

company, registered in England and

Wales as company number 3834125

and has its registered office at

De La Rue House, Jays Close, Viables,

Basingstoke, Hampshire RG22 4BS.

As such, it is subject to the reporting

requirements set out in the

Companies Act 2006. In addition,

the Company is listed in the UK and

is therefore subject to the additional

reporting requirements of the

Financial Conduct Authority’s Listing

Rules (LR) and Disclosure Guidance

and Transparency Rules (DTR).

Our reporting to shareholders

The Strategic report (pages 1 to 68

the Governance report (pages 69 to

112 and this Directors’ report, when

read together with the rest of this

Annual Report, taken as a whole form

the management report required for

the purposes of DTR 4.1.5 R.

The Strategic report provides an

overview of the development and

performance of the Group’s

business for the period ended

30 March 2024 and likely future

developments in the Group. The

various sections of that report, from

page 1 to 68 of this Annual Report,

together provide information which

the Directors consider to be of

strategic importance to the Group.

The following disclosures are hereby

incorporated by reference into, and

form part of, this Directors’ report:

– The reporting on corporate

governance on pages 69 to 112

and page 117;

– Data on greenhouse gas

emissions and other climate

change-related disclosures on

page 29. This information was

included in the Strategic report as

the Directors consider those

matters to be of strategic

importance to the Group;

– Details of Directors’ interests in

the shares of the Company, within

the Directors’ remuneration

report on pages 106 to 108;

– Information relating to financial

instruments and financial risk

management, as provided in note

13 to the financial statements; and

– Related party transactions as set

out in note 27 to the financial

statements.

Dividends

In November 2019, the Board

decided to suspend future dividend

payments. In the Turnaround Plan,

first announced in February 2020

and subsequently expanded upon in

the prospectus published in June

2020, the Board explained that the

resumption of dividends would only

occur when restrictions agreed with

our lending banks fell away and the

Company was generating

sustainable positive free cash flow.

No interim dividend was paid or final

dividend recommended in respect

of FY23. The Directors did not

declare an interim dividend and do

not recommend a final dividend to

be paid in respect of FY24.

Directors

The names and biographical details

of the Directors of the Company at

the date of this report, and the

names and dates of service of

others who served as Directors

during the period, are provided on

pages 72 and 73.

Subject to the Company’s articles

of association, the Companies Act

2006 and any directions given by

the Company in general meeting by

a special resolution, the business of

the Company is managed by the

Board who may exercise all the

powers of the Company, whether

relating to the management of the

business of the Company or not. The

powers of the Board are described in

the corporate governance statement

on pages 69 to 112.

The Directors recognise their duty

to have regard to the Company’s

business relationships with suppliers,

customers and others and to

consider the long-term

environmental and reputational

impacts of their decisions. Details

of how these considerations were

factored into the principal decisions

taken during the period can be

found in the section 172 statement

on pages 21 and 23.

The rules governing the appointment

and removal of Directors are set out in

the Company’s articles of association.

Each of the Directors in office at the

date of this report will, being eligible,

offers himself or herself for re-election.

Details of the Company’s contracts

of service with its Executive

Directors can be found on page 105

and details of the Company’s letters

of appointment for the Non-

executive Directors are on page 105.

Details of Directors’ remuneration

are provided in the Directors’

remuneration report on pages 94 to

112. The interests of the Directors and

their families in the share capital of

the Company are shown in the

Directors’ remuneration report on

page 106.

At the date of this report, the

Company has agreed, to the extent

permitted by the law and the

Company’s articles of association, to

indemnify its Directors and officers

in respect of all costs, charges,

losses, damages and expenses

arising out of claims made against

them in the course of the execution

of their duties as a Director or officer

of the Company or any associated

company. The Company may

advance defence costs in civil or

regulatory proceedings on such

terms as the Board may reasonably

determine, but any advance must be

refunded if the Director or officer is

subsequently convicted or found

against. The indemnity will not

provide cover where the Director

or officer has acted fraudulently

or dishonestly.

The Group also maintains Directors’

and officers’ liability insurance

cover for the Directors and officers

of the Company and of all Group

subsidiary companies.

Shares and major shareholdings

Structure of the Company’s

share capital

As at 30 March 2024, the share

capital of the Company comprised

195,889,223 ordinary shares of

152

⁄

175

p each and 111,673,300

deferred shares of 1p nominal value,

all of which are credited as fully paid.

The ordinary shares therefore

comprise approximately 99%, and

the deferred shares approximately

1%, of the issued share capital.

The ordinary shares are listed in the

UK and admitted to trading on the

London Stock Exchange. The rights

attaching to these shares are

described in the next section of

this report.

The deferred shares carry no voting

or other participation rights and

extremely limited economic rights.

They are not listed or admitted to

trading on any market and are not

transferable except in accordance

with the articles of association. Any

or all of the deferred shares can be

repurchased at any time by the

Company without notice for a total

consideration of one penny, following

which they may be cancelled.

Rights of holders of ordinary

shares and restrictions on transfer

The rights and obligations attaching

to the Company’s ordinary shares, in

addition to those conferred on their

holders by law, are set out in the

Company’s articles of association,

a copy of which is available on the

Company’s website

www.delarue.com.

113 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Directors’ report continued

The key rights are summarised

below:

– Voting – on a show of hands at a

general meeting of the Company,

each holder of ordinary shares

present in person or by proxy and

entitled to vote shall have one

vote and, on a poll, shall have one

vote for every ordinary share held.

Electronic and paper proxy

appointments and voting

instructions must be received by

the Company’s registrar no later

than 48 hours before a general

meeting.

– Dividends and distributions to

shareholders on winding up –

holders of ordinary shares may

receive interim dividends

approved by Directors and

dividends declared in general

meetings. On a liquidation and

subject to a special resolution of

the Company the liquidator may

divide among members in specie

the whole or any part of the

assets of the Company and may,

for such purpose, value any

assets and may determine how

such division shall be carried out.

Transfer of shares – the

Company’s articles of association

place no restrictions on the

transfer of ordinary shares or on

the exercise of voting rights

attached to them except in very

limited circumstances. Certain

restrictions, however, may from

time to time be imposed by law

or regulation.

The articles of association may only

be amended by special resolution of

the holders of the Company’s

ordinary shares.

Special rights attaching to shares

There are no shares issued by the

Company which confer any special

voting or other rights regarding the

control of the Company.

Shareholder agreements and

consent requirements

There are no known arrangements

under which financial rights

conferred by any of the shares in the

Company are held by a person other

than the holders of those shares.

The Company is not aware of any

agreements between shareholders

that may result in any restriction on

the transfer of shares or exercise of

voting rights.

Rights attaching to shares under

employee share schemes

Options and awards held by relevant

participants under the Company’s

various share plans carry no voting

rights until the shares are issued. The

trustee of the De La Rue Employee

Share Ownership Trust does not

seek to exercise voting rights on

existing shares held in the employee

trust. No shares are currently held

in trust.

Major shareholdings

As at 30 March 2024, the Company

had received formal notification of

the following holdings in its shares

under DTR 5. It should be noted that

these holdings, or the percentage of

the issued share capital they

represent, may have changed since

the Company was notified, but

notification of any change is not

required until the next notifiable

threshold is crossed:

Persons notifying

Date of last

notification

Nature of

interest

% of issued

ordinary

share capital

held at

notification

date

Crystal Amber Fund Limited 21/07/2023 Direct 16.48

Schroders plc 20/07/2023 Indirect 14.81

Aberforth Partners LLP 30/06/2023 Indirect 10.79

Richard Griffiths 18/01/2024 Indirect 10.19

Spreadex Ltd 29/01/2024 Direct 8.04

The Wellcome Trust Limited 21/11/2022 Direct 5.22

Royal London Asset Management Limited 22/08/2019 Direct 4.98

Note:

The following changes have been notified between the end of FY24 and 24 July 2024:

On 16/04/2024 Richard Griffiths holding increased to 11.44%. On 16/04/2024 Spreadex Ltd increased their

holding to 9.03% and reduced their holding on 02/05/2024 to 8.94%. On 27/06/2024, the Wellcome Trust Ltd

increased their holding to 6.06%

Directors’ authorities in relation

to share capital

Power to issue and allot

At the AGM held on 7 September

2023 the Directors were generally

and unconditionally authorised to

allot shares in the Company up to

an aggregate nominal value of

£29,292,671 (being approximately

one third of the Company’s then

issued share capital) or up to an

aggregate nominal value of

£58,585,342 (being approximately

two thirds of the Company’s then

issued share capital) in respect of

a strictly pro-rata rights issue.

Following the updated Pre-emption

Group’s Statement of Principles in

November 2022, companies are now

permitted to seek a general

disapplication of pre-emption rights

to issue, for cash, equity securities

representing no more than 10% of

the issued ordinary share capital

plus an additional 10% in connection

with an acquisition or specified

capital investment. At the 2023

AGM, we sought authority in line with

the revised Principles, however did

not receive sufficient levels of

shareholder support. We did not

seek the additional authority

permitted under the Principles for

the additional 2% pre-emption

disapplication permitted in case

for a ‘follow-on’ offer.

At the 2023 AGM the Directors were

granted additional powers to allot

ordinary shares for cash (i) up to a

nominal value of £8,787,801 (being

approximately 10% of the Company’s

then issued share capital). This

authority is valid until the conclusion

of the next following AGM.

The Directors propose to seek

similar authorities at the 2024 AGM.

The Directors have no current

intention of exercising these

authorities, if granted, other than to

satisfy the exercise of options or

vesting of awards under the

Company’s employee share

schemes.

451,996 shares were issued for cash

during the period to satisfy the

vesting of awards or the exercise of

options under the Company’s

employee share schemes. Details of

shares issued during the year and

outstanding options and awards are

given in notes 19 and 20 to the

financial statements, and those

notes are incorporated by reference

into this report. Details of the

share-settled long-term incentive

schemes are provided in the

Directors’ remuneration report on

pages 94 to 112.

114 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Directors’ report continued

Authority to purchase own shares

At the 2023 AGM, shareholders gave

the Company authority to make

market purchases of up to

19,585,649 of its own ordinary shares

(being approximately 10% of the

Company’s then issued ordinary

share capital). Any shares purchased

in this way could either be cancelled

or held in treasury (or a combination

of these). No purchases have been

made under this authority.

The Directors propose to seek an

equivalent authority at the 2024

AGM, but have no current intention

of using this authority, if granted.

Change of control

Contracts

There are a number of contracts

which allow the counterparties to

alter or terminate those

arrangements in the event of a

change of control of the Company.

These arrangements are

commercially sensitive and

confidential and their disclosure

could be seriously prejudicial to the

Group.

Banking facilities

The credit facility between the

Company and its key relationship

banks contains a provision such that,

in the event of a change of control,

unless agreement is reached to the

contrary, the facility will be

immediately cancelled and shall

cease to be available for any further

utilisation and all outstanding loans,

together with accrued interest and

certain other charges, will become

immediately due and payable.

Employees

In the event of a change of control,

vesting of awards would occur in

accordance with the relevant

scheme or plan rules. There are no

agreements in force that would

provide any Directors or employees

with compensation for any loss of

office or employment that occurs

because of a change of control.

Our employees and workforce

generally

Employment of disabled persons

The Group gives full and fair

consideration to applications for

employment from disabled persons,

where the requirements of the job

can be adequately fulfilled by that

person. Where existing employees

become disabled it is the Group’s

policy, wherever practicable, to

provide continuing employment

under normal terms and conditions

and to provide training, career

development and promotion to

disabled employees wherever

appropriate.

Employee communications

and engagement

The Group provides its entire

workforce (including employees)

with information on matters that

could be of concern to them as our

workforce. This includes building

common awareness of the financial

and economic factors affecting the

Group’s performance through

newsletters, all-employee emails

and conference calls with the CEO

on the day that our results are

announced to the market or there

is a material development in the

Group’s business.

Where appropriate, we consult

members of our workforce or their

representatives on a regular basis so

that their views can be taken into

account in making decisions which

are likely to affect their interests.

We encourage involvement in the

Company’s performance by our

employees and workforce and offer

awards under our discretionary

share schemes to those more senior

employees who are best placed to

influence that performance, and

through options granted under our

Sharesave scheme to all eligible

employees in the UK.

The views of our employees and

contractors are important. To make

sure that these views are heard and

are taken into account, the Board

has designated an independent

Non-executive Director to oversee

its engagement with the workforce.

For further details of how that duty

was fulfilled and how it informed the

Board’s discussions during the year,

please see pages 38 and 77.

Other statutory disclosures

Branches

De La Rue is a global business and

our activities and interests are

operated through subsidiaries,

branches of subsidiaries and

associates which are subject to the

laws and regulations of many

different jurisdictions. Our

subsidiaries and associates are

listed in note 28 to the financial

statements. There were no branches

of the Company in existence during

the period ended 30 March 2024.

Essential contracts or other

arrangements

The Group has a number of suppliers

of key goods and services, the loss

of any of which could disrupt the

Group’s ability to deliver on time, in

full or at all. For further details, please

refer to the discussion of this risk on

page 61.

Financial risk management

Please refer to the disclosures in

note 13 to the financial statements.

Political donations

The Group’s policy is not to make

any political donations and none

were made during the period.

However, the definitions of political

donations and expenditure in the

Companies Act 2006 are very

widely drawn, and it is possible that

certain routine activities may

unintentionally fall within the scope

of the law. The Company is therefore

seeking shareholders’ renewal of the

authority to make political donations

at the 2024 AGM, in line with that

sought and granted in all recent years.

Research and development

The Group’s business is underpinned

by a significant amount of

intellectual property. The Group

holds over 130 families of patents

which support its business. There

are around 1,100 patents and patent

applications, of which over 850 have

been granted and circa 250

applications are pending. During the

year the Group had 28 patents

granted in Europe, UK and the US.

The Group’s key activity in the field

of research and development is

discussed in the strategy discussion

on pages 16 to 18.

115 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Directors’ report continued

Listing Rules compliance

In relation to the disclosures required by LR 9.8.4 R:

(1) Interest capitalised and any related tax relief Not applicable

(2) Publication of unaudited financial information or a profit forecast or estimate Not applicable

(4) Details of any long-term incentive schemes See pages 98 to 112

(5) Details of any waiver of emoluments by a Director Not applicable

(6) Any waiver of future emoluments by a Director Not applicable

(7) Non pre-emptive issues of equity securities for cash Not applicable

(8) Non pre-emptive issues of equity securities for cash by major subsidiary undertakings Not applicable

(9) Parent company participation in a placing Not applicable

(10) Any contract of significance in which a Director or controlling shareholder is interested Not applicable

(11) Any contract for the provision of services by a controlling shareholder Not applicable

(12) Any waiver of dividends Not applicable

(13) Any waiver of future dividends and details of current dividends waived Not applicable

(14) Agreements with controlling shareholders Not applicable

As required by LR 9.8.6(8) R, this Annual Report includes climate-related financial disclosures consistent with the

TCFD Recommendations and Recommended Disclosures, which can be found on page 32.

Annual General Meeting

The AGM will be held at 12:00pm on

Wednesday 25 September 2024 at

the Company’s offices, De La Rue

House, Jays Close, Viables,

Basingstoke, Hampshire, RG22 4BS.

We value our engagement with all

our shareholders and shareholders

will once again be able to ask

questions relating to the business

of the meeting via our website,

www.delarue.com, in advance of

the AGM. Full details of how to use

the Q&A facility are set out in the

AGM Circular issued with this

Annual Report.

Auditor

Ernst & Young LLP have expressed

their willingness to be re-appointed

as auditor of the Company. A

resolution to re-appoint Ernst &

Young LLP as the Company’s

auditor will be proposed at the

forthcoming AGM.

This confirmation is given, and

should be interpreted, in accordance

with the provisions of section 418 of

the Companies Act 2006.

Disclosure of information to the

external auditor

Each of the persons who is a

Director at the date of approval of

this report confirms that:

– So far as the Director is aware,

there is no relevant audit

information of which the

Company’s auditor is unaware;

and

– The Director has taken all the

steps that he or she ought to

have taken as a Director in order

to make himself or herself aware

of any relevant audit information

and to establish that the

Company’s auditor is aware of

that information.

Going concern

The Group’s Revolving Credit Facility

(RCF) expires on 1 July 2025. The

cash flow forecasts for the Group

indicate that it would not have

sufficient liquidity to meet the

obligation to repay the RCF on or

before 1 July 2025. Management

have been pursuing various strategic

options which would allow the Group

to repay the RCF on or before 1 July

2025. The most progressed of those

is the sale of the Authentication

division. The Board notes that the

probability of completion, timing and

terms of the sale of the division are

subject to factors outside of the

Board’s control, which may in turn

impact the cash proceeds, the costs

associated with the transaction and

the amounts required to address

any pension scheme risk, along with

the day one liquidity of the retained

operations of the Group. These

matters represent a material

uncertainty which may cast

significant doubt upon the Group’s

ability and the Company’s ability to

continue as a going concern for a

period up to 28 September 2025.

Notwithstanding the above, the

Board is confident that the

bandwidth of strategic options

apparent will ultimately allow the

Group to fully repay the RCF before

its expiration, satisfy future bonding

requirements, mitigate any risks to

the De La Rue UK defined benefit

pension scheme and continue to

operate the retained business as a

going concern, though management

acknowledge that the probability,

timing and final agreed terms of any

such transaction are subject to

factors outside the Board’s control.

Further information can be found on

pages 64 to 68.

Post-balance sheet events

As announced to the market on 30

May 2024, the Group is currently

exploring certain strategic options in

relation to the sale of the whole

group or each of its divisions. As a

result, a number of parties have

made proposals in relation to both

the Group’s divisions, the furthest

advanced being for the

Authentication division. These

workstreams continue, but at the

date of the approval of the financial

statements, no formal agreement

has been entered into.

This Directors’ report was approved

by the Board on 24 July 2024.

By order of the Board

Jon Messent

Company Secretary

24 July 2024

116 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Directors’ responsibility statement

Directors’ responsibilities in

respect of the annual report and

the financial statements

The Directors are responsible for

preparing the annual report and the

Group and Parent Company financial

statements in accordance with

applicable UK law and regulations.

Company law requires the Directors

to prepare financial statements for

each financial year. Under that law

the Directors have elected to

prepare the Group financial

statements in accordance with

UK-adopted international accounting

standards (IFRSs) and have elected

to prepare the Parent Company

financial statements in accordance

with UK Generally Accepted

Accounting Practice (UK Accounting

Standards, including FRS 102 The

Financial Reporting Standard

applicable in the UK and Republic of

Ireland (“FRS 102”)), and applicable

law.

Under company law the Directors

must not approve the financial

statements unless they are satisfied

that they give a true and fair view of

the state of affairs of the Group and

the Company and of their profit or

loss for the period.

In preparing each of the Group and

Parent Company financial

statements, the Directors are

required to:

– Select suitable accounting

policies in accordance with IAS 8

Accounting Policies, Changes in

Accounting Estimates and Errors

(and, in respect of the Parent

Company financial statements,

Section 10 of FRS 102) and then

apply them consistently;

– Make judgements and estimates

that are reasonable and prudent;

– Present information, including

accounting policies, in a manner

that provides relevant, reliable,

comparable and understandable

information;

– Provide additional disclosures

when compliance with the

specific requirements in IFRSs

(and, in respect of the Parent

Company financial statements,

FRS 102) is insufficient to enable

users to understand the impact

of particular transactions, other

events and conditions on the

Group and Company financial

position and financial

performance;

– In respect of the Group financial

statements, state whether

UK-adopted international

accounting standards have been

followed, subject to any material

departures disclosed and

explained in the financial

statements;

– In respect of the Parent Company

financial statements, state

whether FRS 102 has been

followed, subject to any material

departures disclosed and

explained in those financial

statements; and

– Prepare the financial statements

on the going concern basis unless

it is inappropriate to presume

that the Group and the Parent

Company will continue in

business.

The Directors are responsible for

keeping adequate accounting

records that are sufficient to show

and explain the Company and

Group’s transactions and disclose

with reasonable accuracy at any

time the financial position of the

Company and the Group and enable

them to ensure that those financial

statements comply with the

Companies Act 2006. They are also

responsible for safeguarding the

assets of the Group and Parent

Company and Group and hence for

taking reasonable steps for the

prevention and detection of fraud

and other irregularities.

Under applicable law and regulations,

the Directors are also responsible for

preparing a Strategic report,

Directors’ report, Directors’

remuneration report and Corporate

Governance statement that comply

with that law and those regulations.

The Directors are responsible for the

maintenance and integrity of the

corporate and financial information

included on the Group’s website.

Legislation in the UK governing the

preparation and dissemination of

financial statements may differ from

legislation in other jurisdictions.

Fair, balanced and

understandable

The Directors believe that the annual

report and accounts, taken as a

whole, is fair, balanced and

understandable and provides the

information necessary for

shareholders to assess the Group’s

financial position, performance,

business model and strategy.

For details of the process that was

followed to enable the Board to

make this statement, please refer to

the Audit Committee report on

pages 84 to 90.

Responsibility statement

Each of the Directors at the date of

approval of this statement confirms

that, to the best of his or her

knowledge:

– The Group financial statements,

prepared in accordance with

UK-adopted international

accounting standards, give a true

and fair view of the assets,

liabilities, financial position and

profit of the Company and the

undertakings included in the

consolidation taken as a whole;

and

– The annual report, including the

Strategic report on pages 1 to 68

and the Directors’ report on

pages 113 to 116, includes a fair

review of the development and

performance of the business and

the position of the Company and

the undertakings included in the

consolidation taken as a whole,

together with a description of the

principal risks and uncertainties

that they face.

By order of the Board

Jon Messent

Company Secretary

24 July 2024

117 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Financial statements

Secure

Independent Auditor’s Report 119

Consolidated income statement 128

Consolidated statement of

comprehensive income 129

Consolidated balance sheet 130

Consolidated statement of

changes in equity 131

Consolidated cash flow statement 133

Accounting policies 134

Notes to the accounts 148

Company balance sheet 192

Company statement of

changes in equity 193

Accounting policies – Company 194

Notes to the accounts – Company 196

Non-IFRS measures 197

Five year record 201

Shareholder information 202

Securing trust

Strong economies and thriving societies

require trust. Counterfeits and illicit

trade represent a multi-trillion dollar

issue with the potential to undermine

that trust.

Our advanced solutions

help to secure trust.

Both our physical and

digital solutions play an

important role in this.

Strategic report Financial statements118 De La Rue plc Annual Report 2024 Governance report

Independent Auditor’s Report

Opinion

In our opinion:

– De La Rue plc’s group financial

statements and parent company

financial statements (the

“financial statements”) give a true

and fair view of the state of the

group’s and of the parent

company’s affairs as at 30 March

2024 and of the Group’s loss for

the period then ended;

– the group financial statements

have been properly prepared in

accordance with UK adopted

international accounting

standards;

– the parent company financial

statements have been properly

prepared in accordance with

United Kingdom Generally

Accepted Accounting Practice;

and

– the financial statements have

been prepared in accordance

with the requirements of the

Companies Act 2006.

The financial reporting framework

that has been applied in the

preparation of the Group financial

statements is applicable law and UK

adopted international accounting

standards. The financial reporting

framework that has been applied in

the preparation of the parent

company financial statements is

applicable law and United Kingdom

Accounting Standards, including FRS

102 “The Financial Reporting

Standard applicable in the UK and

Republic of Ireland” (United Kingdom

Generally Accepted Accounting

Practice).

Basis for opinion

We conducted our audit in

accordance with International

Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our

responsibilities under those

standards are further described in

the Auditor’s responsibilities for the

audit of the financial statements

section of our report. We believe that

the audit evidence we have obtained

is sufficient and appropriate to

provide a basis for our opinion.

Independence

We are independent of the Group

and parent company in accordance

with the ethical requirements that

are relevant to our audit of the

financial statements in the UK,

including the FRC’s Ethical Standard

as applied to listed public interest

entities, and we have fulfilled our

other ethical responsibilities in

accordance with these requirements.

The non-audit services prohibited by

the FRC’s Ethical Standard were not

provided to the Group or the parent

company and we remain independent

of the Group and the parent

company in conducting the audit.

Conclusions relating to going

concern

Material Uncertainty related to

going concern

We draw attention to Accounting

Policies (page 134) in the financial

statements which indicates that the

ability of the Group and Company to

continue as a going concern is

subject to a material uncertainty

which could cast significant doubt

on the Group and Company’s ability

to continue as a going concern.

Independent

Auditor’s Report

to the members of

De La Rue plc

We have audited the financial statements of De La Rue plc (the ‘parent

company’) and its subsidiaries (the ‘Group’) for the period ended 30 March

2024 which comprise:

Group Parent company

Consolidated balance sheet as at

30 March 2024

Company balance sheet as at

30 March 2024

Consolidated income statement for the

period then ended

Company statement of changes in

equity for the period then ended

Consolidated statement of

comprehensive income for the period

then ended

Related notes 1a to 8a to the financial

statements including a summary of

significant accounting policies

Consolidated statement of changes in

equity for the period then ended

Consolidated statement of cash flows

for the period then ended

Related notes 1 to 30 to the financial

statements, including material

accounting policy information

119 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

Management’s base case modelling

indicates that the Group would not

have sufficient funds or the ability to

repay the RCF on or before 1 July

2025, when it becomes due, given

that the timing, probability of

completion and terms of a sale of

the Authentication division are

subject to factors outside of the

Board’s control. The circumstances

which would follow non-repayment

of the RCF on or before 1 July 2025,

including the manner in which the

Group’s lenders would seek to

recover funds, would not be within

the control of the Directors.

Furthermore, even in the event of a

transaction completing, the

proceeds that will be retained (and

immediately available) in the Group,

to address its ongoing liquidity

requirements following the

repayment of the RCF are subject to

factors outside of the Board’s

control. These include the Group’s

cash position on disposal, the final

sale price, transaction costs and any

cash outflows addressing the

pension risk. As stated in note 1,

these events or conditions, along

with the other matters as set forth in

note 1, indicate that a material

uncertainty exists that may cast

significant doubt on the group and

parent company’s ability to continue

as a going concern. Our opinion is

not modified in respect of this

matter.

We draw attention to the viability

statement in the Annual Report on

page 69, which indicates that an

assumption to the statement of

viability is the successful completion

of a sale of the Authentication

division so as to generate sufficient

period to 28 September 2025

(“the going concern period”) and

considered the existence of any

significant events or conditions

beyond this period based on our

enquiries and knowledge arising

from other areas of the audit.

– We obtained the cash flow,

covenant forecasts and

sensitivities for the going concern

period prepared by management

and tested for arithmetical

accuracy of the models as well as

checking the net debt position at

the period-end date.

– We reviewed actual post period-

end trading to the end of June

2024 against the forecast. We

performed procedures to validate

that we were aware of all relevant

factors from the period-end date

to the approval date of the

financial statements, including

trading performance, liquidity

movements and other material

events since the period-end date,

where applicable.

– We also challenged the

reasonableness of the forecasts

with reference to the level of

secured orders and the

unsecured pipeline by

corroborating to supporting

evidence including signed orders

and offer letters. Further, we

validated other assumptions

including both fixed and variable

costs by obtaining relevant

agreements as well as performing

analytical procedures. We

assessed whether all key factors

have been considered by

management, through inquiry

with management and

assessment against other risks

addressed in the audit

liquidity to allow the Group to repay

the RCF on or before 1 July 2025,

meet transactions costs, address

the risk to the pension scheme and

fund the retained operations of the

Group. The Directors consider that

the material uncertainty referred to

in respect of going concern may

cast significant doubt over the future

viability of the Group and company

should these events not complete.

Our opinion is not modified in

respect of this matter.

In auditing the financial statements,

we have concluded that the

director’s use of the going concern

basis of accounting in the

preparation of the financial

statements is appropriate. Our

evaluation of the directors’

assessment of the Group and parent

company’s ability to continue to

adopt the going concern basis of

accounting included:

– We confirmed our understanding

of management’s going concern

assessment process as well as

the review controls in place over

the preparation of the group’s

going concern model and the

memoranda on going concern

presented to the board of

directors. We performed

procedures in conjunction with EY

modelling specialists to test the

appropriateness of management’s

underlying modelling, including

validating that formulae logic

applied was appropriate and

confirming that other inputs (for

example interest rates) had been

accurately modelled.

– We challenged the

appropriateness of the duration

of the going concern assessment

– We evaluated the key assumptions

underpinning the Group’s

assessment by challenging the

measurement and completeness

of downside scenarios modelled

by management, including an

analysis of historical forecasting

accuracy and the work performed

on the orderbook as detailed

above. We compared these key

assumptions with the principal

risks and uncertainties of the

Group.

– We analysed management’s

severe but plausible scenarios

which quantified the downside

required to breach the covenants

(by modelling both decreased

earnings and increased net debt)

or exhaust liquidity and evaluated

whether the downside in cash

flows, earnings and net debt

required for such a scenario to

materialise was plausible during

the going concern period

considering the analysis of fixed

versus variable costs, the

proportion of revenue secured

through orderbook coverage, and

recent forecast accuracy.

– We challenged each of the

available mitigating actions (e.g.,

reduced capital expenditure and

reductions in discretionary

spend) and obtained analysis to

determine if these were in the

control of management and

evaluated the expected impact of

the mitigation in the light of our

understanding of the business

and its cost structures.

– We note that management are in

the process of evaluating various

strategic options, including a sale

of the Authentication division.

We corroborated management’s

base case assumptions related to

a sale, including agreeing to

available supporting documents.

We challenged management’s

cash flow forecasts for the

remaining group, including

performing a reverse stress test

on the day one cash position,

taking into account amounts to

be paid to the pension scheme

and other costs associated to the

transaction.

– We have evaluated the potential

impact of this transaction,

including related costs, on the

ability of the Group and Company

to repay the RCF on or before 1

July 2025.

– We challenged the extent to

which emerging climate-related

risks may affect the Group’s

assessment and the assumptions

around the costs anticipated in

meeting the Group’s target to

become carbon neutral for its

own operations by 2030. This

includes the capital expenditure

required to enable the group to

reduce its carbon footprint,

energy usage, waste, and reliance

on plastics. Additionally, we

considered other macroeconomic

factors such as the rising cost of

materials, energy and labour

which are critical parts of the

Group’s operations.

– We corroborated whether the

Group’s forecasts in the going

concern assessment were

consistent with other forecasts

used by the group in its

accounting estimates, including

non-current asset impairment and

deferred tax asset recognition.

120 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

– We held discussions with the

Audit Committee and full board

of directors to corroborate the

forecasts and their basis as

prepared by management.

– We discussed the

appropriateness of

management’s disclosures in the

financial statements, specifically

whether the description of the

material uncertainty, sufficiently

and appropriately reflect the

going concern assessment, key

judgements made and outcomes.

The audit procedures performed in

evaluating management’s

assessment were performed by the

primary audit team, however we also

considered the financial and

non-financial information

communicated to us from our

component teams of overseas

locations as sources of potential

contrary indicators which may cast

doubt over the going concern

assessment. We determined going

concern to be a key audit matter.

components of the Group, we

selected 6 components as full or

specific scope covering entities

within United Kingdom, Malta, Sri

Lanka, United States and group

consolidation adjustments, which

represent the principal business

units within the group. We selected a

further eight components as

specified procedures components,

for which we performed certain

audit procedures on specific

accounts within that component

which we considered had the

potential for the greatest impact on

the significant accounts in the

financial statements, either because

of the size of the accounts or their

risk profile.

The table below sets out the

coverage obtained from the work

performed by our audit teams.

In relation to the Group and parent

company’s reporting on how they

have applied the UK Corporate

Governance Code, we have nothing

material to add or draw attention to

in relation to:

– the directors’ statement in the

financial statements about

whether the directors considered

it appropriate to adopt the going

concern basis of accounting; and

– the directors’ identification in the

financial statements of the

material uncertainty related to

the entity’s ability to continue as

a going concern over a period up

to 28 September 2025

Our responsibilities and the

responsibilities of the directors with

respect to going concern are

described in the relevant sections of

this report. However, because not all

future events or conditions can be

predicted, this statement is not a

guarantee as to the Group’s ability to

continue as a going concern.

Of the 14 components selected,

we performed an audit of the

complete financial information

of 3 components (“full scope

components”) which were selected

based on their size or risk

characteristics. For 3 components

(“specific scope components”), we

performed audit procedures on

specific accounts within that

component that we considered had

the potential for the greatest impact

on the significant accounts in the

financial statements either because

of the size of these accounts or their

risk profile.

For the remaining 8 components

(representing 24% of adjusted EBITDA)

we performed specified procedures

performed through centralised

testing by the Group team. These

locations typically represent other

small revenue generating entities,

overseas cost centres, or holding

companies and not the principal

business units of the group.

An overview of the scope of the

parent company and group audits

Tailoring the scope

Our assessment of audit risk, our

evaluation of materiality and our

allocation of performance materiality

determine our audit scope for each

company within the Group. Taken

together, this enables us to form an

opinion on the consolidated financial

statements. We take into account

size, risk profile, the organisation of

the Group and effectiveness of

group-wide controls, changes in the

business environment, the potential

impact of climate change and other

factors such as recent Internal audit

results when assessing the level of

work to be performed at each entity.

In assessing the risk of material

misstatement to the Group financial

statements, and to ensure we had

adequate quantitative coverage of

significant accounts in the financial

statements, of the 51 reporting

Overview of our audit approach

Audit scope – We performed an audit of the complete financial information of 3 components, an audit of

specific balances of 3 components and performed specified procedures for a further 8

components.

– The components where we performed full audit procedures accounted for 56% of adjusted

EBITDA (being adjusted for exceptional items), 90% of Revenue and 60% of Total assets. The

components where we performed full, specific or specified audit procedures in relation to

revenue accounted for 100% of Revenue and 98% of Total assets.

Key audit

matters

– Going Concern

– Revenue recognition

– Post-retirement benefit obligations – liabilities & assets

Materiality – Overall group materiality of £0.78m which represents 2% of adjusted EBITDA. Adjusted EBITDA

represent earnings from continuing operations before the deduction of interest, tax, depreciation,

amortisation and exceptional items.

Number of

locations

Adjusted

EBITDA*

(%)

Revenue

(%)

Total

Assets

(%)

Full Scope 3 56 90 60

Specific Scope 3 16 7 27

Specified Procedures 8 24 3 11

Full and specified procedures

coverage 14 96 100 98

Remaining components 37 4 – 2

Total reporting components 51 100 100 100

* Based on absolute EBITDA values

121 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

We extend our scope to these

entities in order to add an element

of unpredictability into our audit

procedures. Specifically, we

performed specified procedures on

certain aspects of revenue, other

operating expenses, interest income

and expense, provisions, intangible

assets and amortisation, in response

to our risk assessment for these

individual financial statement line

items. No single component was

larger than 10%. The audit scope of

these components may not have

included testing of all significant

accounts of the component but will

have contributed to the coverage

of significant accounts tested for

the Group.

Of the remaining 37 components

that together represent 4% of the

group’s adjusted EBITDA, we

performed other procedures,

including cash and borrowings

verification testing on all material

balances, analytical review, testing of

consolidation journals and

intercompany eliminations and

foreign currency translation

recalculations to respond to any

potential risks of material

misstatement to the Group financial

statements.

Changes from the prior period

There have been no significant

changes in the scoping of our Group

audit.

Involvement with component

teams

In establishing our overall approach

to the Group audit, we determined

the type of work that needed to be

undertaken at each of the components

of how climate change has been

reflected in the financial statements.

Our audit effort in considering the

impact of climate change on the

financial statements was focused on

evaluating management’s

assessment of the impact of climate

risk, physical and transition, their

climate commitments, the effects of

material climate risks disclosed on

pages 34 and 35 and whether these

have been appropriately reflected in

the going concern and viability

considerations of the group, and

other key assessments where values

are determined through modelling

future cash flows including

assumptions around the costs

anticipated in meeting the group’s

target to become carbon neutral for

its own operations by 2030. Where

required by the relevant accounting

standard, this includes the capital

expenditure required to enable the

group to reduce its carbon footprint,

energy usage, waste and reliance on

plastics. As part of this evaluation,

we performed our own risk

assessment supported by our

climate change internal specialists,

to determine the risks of material

misstatement in the financial

statements from climate change

which needed to be considered in

our audit.

Whilst the group have stated their

sustainability commitments in

becoming carbon natural from its

own operations by 2030 and to align

with the aspirations of the Paris

Agreement to achieve net zero

emissions by 2050, the Group are

currently unable to determine the

full future economic impact on their

by us, as the primary audit

engagement team, or by component

auditors from other EY global network

firms operating under our instruction.

The audit procedures on the 3 full

scope components (all of which

comprise parts of the UK operating

business), were performed directly

by the primary audit team. For the 3

specific scope components, where

the work was performed by

component auditors, we determined

the appropriate level of involvement

to enable us to determine that

sufficient audit evidence had been

obtained as a basis for our opinion

on the Group as a whole.

During the current period’s audit

cycle, a visit was undertaken by the

Senior Statutory Auditor to the

component team in Sri Lanka.

Regular detailed meetings were held

with all component teams. These

meetings involved discussing the

audit approach with the component

team and inputs into planning their

work. Detailed instructions were sent

to all specific scope overseas

locations which covered the

significant areas that should be

addressed by the component team

auditors and the information which

should be reported to the primary

audit team. The primary team

interacted regularly with the

component teams where

appropriate during various stages of

the audit, reviewed relevant working

papers and were responsible for the

scope and direction of the audit

process. This, together with the

additional procedures performed at

group level, gave us appropriate

evidence for our opinion on the

group financial statements.

business model, operational plans

and customers to achieve this and

therefore the potential impacts are

not fully incorporated in these

financial statements.

Based on our work, whilst we have

not identified the impact of climate

change on the financial statements

to be a standalone key audit matter,

we have considered the impact in

the Going Concern key audit matter.

Details of the impact, our

procedures and findings are

included in our explanation of key

audit matter in the conclusions

relating to Going Concern above.

Key audit matters

Key audit matters are those matters

that, in our professional judgement,

were of most significance in our

audit of the financial statements of

the current period and include the

most significant assessed risks of

material misstatement (whether or

not due to fraud) that we identified.

These matters included those which

had the greatest effect on: the

overall audit strategy, the allocation

of resources in the audit; and

directing the efforts of the

engagement team. These matters

were addressed in the context of our

audit of the financial statements as a

whole, and in our opinion thereon,

and we do not provide a separate

opinion on these matters. In addition

to the matter described in the

material uncertainty related to going

concern section, we have

determined the matters described

below to be the key audit matters to

be communicated in our report.

Climate change

Stakeholders are increasingly

interested in how climate change will

impact the group. The group has

determined that the most significant

future impacts from climate change

on its operations will be from

emerging regulatory changes and

physical risks and the group’s ability

to react to such changes, for

example, the risk of flooding of key

sites as a result of rising water levels

and precipitations patterns; and the

risk of being unable to execute the

transition of operations required to

effectively reduce its footprint,

energy usage, waste and reliance on

plastics in its operations. These are

explained on page 32 of the Task

Force On Climate Related Financial

Disclosures and on pages 56 – 63 in

the principal risks and uncertainties.

They have also explained their

climate commitments on page 35.

All of these disclosures form part of

the “Other information,” rather than

the audited financial statements.

Our procedures on these unaudited

disclosures therefore consisted

solely of considering whether they

are materially inconsistent with the

financial statements or our

knowledge obtained in the course of

the audit or otherwise appear to be

materially misstated, in line with our

responsibilities on “Other

information”.

In planning and performing our audit

we assessed the potential impacts

of climate change on the group’s

business and any consequential

material impact on its financial

statements. The group has explained

in their strategic report articulation

122 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

Risk Our response to the risk Key observations communicated to the Audit Committee

Revenue recognition – £310.3m (FY23 – £349.7m)

Refer to the Audit Committee Report (page 84); Accounting

policies (page 134); and Note 2 of the Consolidated Financial

Statements (page 150)

Risk on revenue cut-off

We have identified that there is a risk that revenue is

manipulated at or near to the period end to meet income

statement targets through management override of controls.

This cut-off risk manifests itself in different ways based on

the terms of the contract and the associated accounting

policy under IFRS 15. The risk applies to both revenue

recognised over time or at a point in time. Revenue earned

over time totals £37.4m (12.1%) (FY23 – £50.4m, 14.4%) with

point in time revenue of £272.9m (87.9%) (FY23 – £299.3m,

85.6%)

Risk on bill & hold arrangements

We have identified a risk that revenue is manipulated through

bill and hold arrangements (which refers to revenue

recognised at the period-end date for which the goods have

not been shipped by period-end in accordance with the

terms of the contract) to meet income statement targets

through management override of controls. From previous

years, we understand that a large proportion of the orders

completed and revenue recognised relates to those under

contracts with bill and hold terms.

Due to the unique criteria required to be met to recognise

this revenue it is deemed an area for possible manipulation.

We have performed testing using the lowest end of the performance materiality range

applicable for addressing the occurrence assertion impacted by a significant risk. At each full,

and specific scope component with significant revenue streams (6 components) including

(where relevant) consolidation adjustments, we performed audit procedures which covered

96% of the group’s Revenue. We also performed specified procedures on material revenue

amounts earned in the remainder of the group. The primary audit team and specific scope

component teams performed the audit procedures over the group’s revenue. Our procedures

included, among others, obtaining an understanding of the revenue recognition process and

evaluating the design of internal controls over revenue recognised. We also evaluated the

appropriateness of the Group’s revenue recognition policy.

Risk on revenue cut-off

For point in time revenue contracts we selected a sample of revenue transactions around the

period-end date and for our sample selected, we tested to corroborate that there was

appropriate evidence to support that control has passed to the customer and that revenue

was recognised in the appropriate period. This included checking to third party evidence of

delivery, where applicable.

For over time revenue contracts, we performed a review of all new material underlying

agreements to determine judgements made by management in concluding that the company

has an enforceable right to payment, enquiring with external legal counsel where relevant. The

group uses the input method to record revenue over time. For all material contracts, we have

tested actual costs incurred to underlying supporting documents and challenged the

appropriateness of the estimated cost to complete the performance obligation. We have also

tested the appropriateness of the margin applied by agreeing the calculations through to

contractual terms (e.g. unit prices and total contract value). We have also checked that the

correct percentage of completion (POC) has been applied in determining the amount of

revenue to be recognised.

Risk on bill & hold arrangements

For bill and hold arrangements we have reviewed all underlying contracts with customers to

validate contractual terms allowed for bill and hold recognition under IFRS 15. We performed

full inventory counts at the balance sheet date and we have agreed amounts to the underlying

supporting documents such as payments and invoices.

Based on our audit procedures we have

concluded that revenue is appropriately

recognised in the period and appropriately

accrued or deferred at 30 March 2024.

123 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

Risk Our response to the risk Key observations communicated to the Audit Committee

Post-retirement benefit obligations – £51.6m

(FY23 – £54.7m)

Refer to the Audit Committee Report (page 84); Accounting

policies (page 134); and Note 23 of the Consolidated Financial

Statements (page 183)

Post-retirement benefit Liabilities – £695.7m

(FY23 – £731.3m)

The valuation of the pension liabilities requires significant

levels of judgement and technical expertise in choosing

appropriate assumptions. A number of the key assumptions

(inflation, discount rates and mortality) can have a material

impact on the calculation of the liability.

Post-retirement benefit Assets – £644.1m

(FY23 – £678.2m)

The pension assets include significant pension asset

investments, the fair value measurement of which includes

significant judgement. There is a risk in this valuation process

as a number of the pension assets are “hard to value”, which

do not have a readily observable market price. Misstatements

that occur in relation to this risk would affect the retirement

benefit obligations account in the balance sheet.

Response to the risk on post-retirement benefit liabilities

We utilised EY pension specialists to assist us in testing the valuation of post-retirement

benefit liabilities. We gained an understanding of the valuation process through discussion

with the pension scheme actuaries. This included challenging the basis and methodology for

setting key assumptions, including salary increases and mortality rates by comparing them to

national and industry averages.

We independently checked the discount and inflation rates used in the valuation of the

pension liability against our internally developed benchmarks. We assessed the competency

of management’s expert used in determining the actuarial valuation.

Response to the risk on post-retirement benefit assets:

We assessed the competency of management’s expert used in determining the asset

valuation.

We stratified the assets into the various IFRS 13 categories from level 1 to level 3. Level 3 was

classified as complex and hard to value assets as having no publicly available information to

determine the valuation of the asset.

We have confirmed the existence of scheme assets with the schemes’ investment managers

and independently confirmed the valuation of scheme assets by performing detailed testing

on a sample of assets, taking into account the relative complexity of the underlying asset

class.

For all hard to value assets, we have obtained a confirmation directly from the investment

managers on the number of units and period-end price by investment product. We have also

involved our EY valuation specialists in determining the valuation of certain hard to value

assets.

We assessed the appropriateness of Management’s retirement benefit obligation disclosure

by reference to the requirements of applicable accounting standards.

Based on our audit procedures, we have

concluded that the actuarial assumptions applied

within the valuation of post-retirement benefit

liabilities at period-end are appropriate.

We have also concluded that the pension scheme

assets are stated at fair market value.

124 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

Our application of materiality

We apply the concept of materiality

in planning and performing the audit,

in evaluating the effect of identified

misstatements on the audit and in

forming our audit opinion.

Materiality

The magnitude of an omission or

misstatement that, individually or in

the aggregate, could reasonably be

expected to influence the economic

decisions of the users of the

financial statements. Materiality

provides a basis for determining the

nature and extent of our audit

procedures.

We determined materiality for the

group to be £0.78 million (2023: £0.9

million), which is 2% (2023: 2%) of

adjusted EBITDA. Given the focus on

the group’s ability to continue

operating as a going concern in

recent periods, we believe that there

remains a focus on the banking

covenants applicable to the

company which are based on

adjusted EBITDA. As such, we believe

that adjusted EBITDA provides us

with a reasonable basis for

determining materiality and is the

most relevant performance measure

to the stakeholders of the entity.

We determined materiality for the

parent company to be £1.45 million

(2023: £1.5 million), which is 2%

(2023: 2%) of equity. This is higher

than group materiality given this is

only a holding company and we do

not expect significant changes in

terms of business environment.

Other information

The other information comprises the

information included in the annual

report set out on pages 1 – 117, other

than the financial statements and

our auditor’s report thereon. The

directors are responsible for the

other information contained within

the annual report.

Our opinion on the financial

statements does not cover the other

information and, except to the extent

otherwise explicitly stated in this

report, we do not express any form

of assurance conclusion thereon.

Our responsibility is to read the

other information and, in doing so,

consider whether the other

information is materially inconsistent

with the financial statements or our

knowledge obtained in the course of

the audit or otherwise appears to be

materially misstated. If we identify

such material inconsistencies or

apparent material misstatements,

we are required to determine

whether this gives rise to a material

misstatement in the financial

statements themselves. If, based on

the work we have performed, we

conclude that there is a material

misstatement of the other

information, we are required to

report that fact.

We have nothing to report in this

regard.

Our materiality is based on the

group’s EBITDA adjusted for

exceptional items in order to exclude

items which are non-recurring in

nature. We have determined the final

materiality amount applied in our

audit procedures below:

Starting

basis

– Group EBITDA £25.1m

Adjustments – Add back net

exceptional items of

£14.2m as disclosed

in the Group Income

statement

Materiality – Totals £39.3m

– Materiality of £0.78m

(2% of adjusted

EBITDA)

Performance materiality

The application of materiality at the

individual account or balance level. It

is set at an amount to reduce to an

appropriately low level the

probability that the aggregate of

uncorrected and undetected

misstatements exceeds materiality.

On the basis of our risk assessments,

together with our assessment of the

group’s overall control environment,

our judgement was that

performance materiality was 50%

(2023: 50%) of our planning

materiality, namely £0.39m (2023:

£0.45m). We have set performance

materiality at this percentage due to

an expectation of possible audit

misstatements in the current period

driven by the volume and quantum

of audit misstatements identified in

the prior period.

Opinions on other matters

prescribed by the Companies Act

2006

In our opinion, the part of the

directors’ remuneration report to be

audited has been properly prepared

in accordance with the Companies

Act 2006.

In our opinion, based on the work

undertaken in the course of the

audit:

– the information given in the

strategic report and the directors’

report for the financial period for

which the financial statements

are prepared is consistent with

the financial statements; and

– the strategic report and the

directors’ report have been

prepared in accordance with

applicable legal requirements.

Matters on which we are required

to report by exception

In the light of the knowledge and

understanding of the Group and the

parent company and its

environment obtained in the course

of the audit, we have not identified

material misstatements in the

strategic report or the directors’

report.

Audit work at component locations

for the purpose of obtaining audit

coverage over significant financial

statement accounts is undertaken

based on a percentage of total

performance materiality. The

performance materiality set for each

component is based on the relative

scale and risk of the component to

the Group as a whole and our

assessment of the risk of

misstatement at that component. In

the current period, the range of

performance materiality allocated to

components was £0.06m to £0.3m

(2023: £0.1m to £0.4m).

Reporting threshold

An amount below which identified

misstatements are considered as

being clearly trivial.

We agreed with the Audit

Committee that we would report to

them all uncorrected audit

differences in excess of £39,000

(2023: £45,000), which is set at 5%

of planning materiality, as well as

differences below that threshold

that, in our view, warranted reporting

on qualitative grounds.

We evaluate any uncorrected

misstatements against both the

quantitative measures of materiality

discussed above and in light of other

relevant qualitative considerations in

forming our opinion.

125 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

We have nothing to report in respect

of the following matters in relation to

which the Companies Act 2006

requires us to report to you if, in our

opinion:

– adequate accounting records

have not been kept by the parent

company, or returns adequate for

our audit have not been received

from branches not visited by us;

– the parent company financial

statements and the part of the

Directors’ Remuneration Report to

be audited are not in agreement

with the accounting records and

returns; or

– certain disclosures of directors’

remuneration specified by law are

not made; or

– we have not received all the

information and explanations we

require for our audit.

Corporate Governance Statement

We have reviewed the directors’

statement in relation to going

concern, longer-term viability and

that part of the Corporate

Governance Statement relating to

the Group and company’s

compliance with the provisions of

the UK Corporate Governance Code

specified for our review by the

Listing Rules.

Auditor’s responsibilities for the

audit of the financial statements

Our objectives are to obtain

reasonable assurance about whether

the financial statements as a whole

are free from material misstatement,

whether due to fraud or error, and to

issue an auditor’s report that

includes our opinion. Reasonable

assurance is a high level of

assurance, but is not a guarantee

that an audit conducted in

accordance with ISAs (UK) will

always detect a material

misstatement when it exists.

Misstatements can arise from fraud

or error and are considered material

if, individually or in the aggregate,

they could reasonably be expected

to influence the economic decisions

of users taken on the basis of these

financial statements.

Explanation as to what extent the

audit was considered capable of

detecting irregularities, including

fraud

Irregularities, including fraud, are

instances of non-compliance with

laws and regulations. We design

procedures in line with our

responsibilities, outlined above, to

detect irregularities, including fraud.

The risk of not detecting a material

misstatement due to fraud is higher

than the risk of not detecting one

resulting from error, as fraud may

involve deliberate concealment by,

for example, forgery or intentional

misrepresentations, or through

collusion. The extent to which our

procedures are capable of detecting

irregularities, including fraud is

detailed below.

Based on the work undertaken as

part of our audit, we have concluded

that each of the following elements

of the Corporate Governance

Statement is materially consistent

with the financial statements or our

knowledge obtained during the

audit:

– Directors’ statement with regards

to the appropriateness of

adopting the going concern basis

of accounting and any material

uncertainties identified set out on

pages 64 – 68;

– Directors’ explanation as to its

assessment of the company’s

prospects, the period this

assessment covers and why the

period is appropriate set out on

pages 64 – 68;

– Director’s statement on whether

it has a reasonable expectation

that the group will be able to

continue in operation and meets

its liabilities set out on pages 64

– 68;

– Directors’ statement on fair,

balanced and understandable set

out on page 117;

– Board’s confirmation that it has

carried out a robust assessment

of the emerging and principal

risks set out on page 117;

– The section of the annual report

that describes the review of

effectiveness of risk management

and internal control systems set

out on page 56; and;

– The section describing the work

of the audit committee set out on

page 84.

However, the primary responsibility

for the prevention and detection of

fraud rests with both those charged

with governance of the company

and management.

– We understood how De La Rue

plc is complying with those

frameworks by making enquiries

of management including internal

legal counsel to understand how

the company maintains and

communicates its policies and

procedures in these areas and

corroborated this by reviewing

supporting documentation.

Specifically, we inspected the

code of conduct and employee

handbook issued to each

employee, we also verified that

specific training on the above

frameworks were offered to

employees throughout the period;

obtaining and inspecting the

training compliance report held

by the company. Where relevant

we liaised with external legal

counsel to understand the

potential impact of claims

brought against the company. We

also reviewed correspondence

with relevant authorities, including

HMRC (2018 Code).

– We assessed the susceptibility of

the group’s financial statements

to material misstatement,

including how fraud might occur

by considering the risk of

management override and

through assessing revenue as a

fraud risk through recognising

revenue in the incorrect period.

Our procedures to address this

involved.

Responsibilities of directors

As explained more fully in the

directors’ responsibilities statement

set out on page 117, the directors are

responsible for the preparation of

the financial statements and for

being satisfied that they give a true

and fair view, and for such internal

control as the directors determine is

necessary to enable the preparation

of financial statements that are free

from material misstatement, whether

due to fraud or error.

In preparing the financial statements,

the directors are responsible for

assessing the group and parent

company’s ability to continue as a

going concern, disclosing, as

applicable, matters related to going

concern and using the going

concern basis of accounting unless

the directors either intend to

liquidate the group or the parent

company or to cease operations, or

have no realistic alternative but to do

so.

126 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Independent Auditor’s Report continued

– We assessed the susceptibility of

the group’s financial statements

to material misstatement,

including how fraud might occur

by considering the risk of

management override and

through assessing revenue as a

fraud risk through recognising

revenue in the incorrect period.

Our procedures to address this

involved:

– Understanding the revenue

recognition process, policy

and how it is applied, including

relevant controls.

– Selecting a sample of key

contracts to test based on

various risk criteria. For the

same contracts we performed

detailed contract reviews,

including challenging

management assumptions on

the revenue recognition

process.

– For those contracts where

revenue has been recognised

over time or at a point-in-time,

our procedures and

conclusions are documented

in the key audit matters’ table

above.

– We incorporated data

analytics into our testing of

manual journals, including

segregation of duties, and in

respect of our testing of

revenue recognition,

investigated journals posted to

revenue, with focus on manual

transactions recorded at or

close to the period-end date.

Use of our report

This report is made solely to the

company’s members, as a body, in

accordance with Chapter 3 of Part 16

of the Companies Act 2006. Our

audit work has been undertaken so

that we might state to the

company’s members those matters

we are required to state to them in

an auditor’s report and for no other

purpose. To the fullest extent

permitted by law, we do not accept

or assume responsibility to anyone

other than the company and the

company’s members as a body, for

our audit work, for this report, or for

the opinions we have formed.

San Gunapala (Senior statutory

auditor)

for and on behalf of Ernst & Young

LLP, Statutory Auditor

Reading

24 July 2024

– Based on this understanding we

designed our audit procedures to

identify non-compliance with

such laws and regulations.

– Where we identified potential

non-compliance with laws and

regulations, we developed an

appropriate audit response and

communicated directly with

components impacted. Our

procedures involved:

understanding the process and

controls to identify non-

compliance, reading the

correspondence between the

group and their regulators, review

of whistleblowing logs and

understanding management’s

response, inquiring of internal and

external legal counsel and reading

their reports, understanding the

fact patterns in each case and

documenting the positions taken

by management, and using EY

specialists (including Forensics)

to support us in concluding on

the matters identified.

– If any instance of non-compliance

with laws and regulations were

identified, these were

communicated to the relevant

local EY teams who performed

sufficient and appropriate audit

procedures supplemented by

audit procedures performed at

the group level.

Other matters we are required

to address

– Following the recommendation

from the Audit Committee we

were appointed by the company

on 21 September 2017 to audit the

financial statements for the

period ending 31 March 2018 and

subsequent financial periods. We

signed an updated engagement

letter on 08 December 2023.

– The period of total uninterrupted

engagement including previous

renewals and reappointments is

7 years, covering the periods

ending 31 March 2018 to 30 March

2024.

– The audit opinion is consistent

with the additional report to the

audit committee.

127 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

		2024	2023
	Notes	£m	£m
Revenue from customer contracts	2	310 .3	3 4 9.7
Cost of sales	4	(22 4.4)	(2 5 7.6)
Gross Profit		85.9	9 2.1
Adjusted operating expenses	4	(65 .6)	(64.3)
Other operating income	3	0.7	–
Adjusted operating profit		21. 0	2 7. 8
Adjusted Items 1 :
– Amortisation of acquired intangibles	10	(1.0)	(1.0)
– Net exceptional items – expected credit loss	5	0. 5	(8.5)
– Net exceptional items – other	5	(14.7)	(38. 6)
– Net exceptional items – Total	5	(14.2)	(47 .1)
Operating profit/(loss)		5.8	(20.3)
Interest income	6	0. 5	1.2
Interest expense	6	(19.2)	(11.6)
Net retirement benefit obligation finance (expense)/income	6, 23	(2.5)	1.1
Net finance expense		(21.2)	(9 .3)
Loss before taxation from continuing operations		(15.4)	(2 9.6)
Taxation	7	(3.7)	(27.6)
Loss for the year		(19. 1)	(57 .2)
Attributable to:
– Owners of the parent		(2 0.0)	(55. 9)
– Non-controlling interests		0.9	(1.3)
Loss for the year		(19. 1)	(57 .2)

		2024	2023
	Notes	£m	£m
Earnings per ordinary share
Basic EPS	8	(10 .2)p	(28. 6)p
Diluted EPS	8	(10 .2)p	(28. 6)p

Note:

1. For adjusting items, the cash flow impact of exceptional items can be found in note 5 and there was no cash flow impact for the

amortisation of acquired intangible assets.

Consolidated income statement

for the period ended 30 March 2024

128 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

			2023
		2024	restated*
	Notes	£m	£m
Loss for the year		(19. 1)	(57 .2)
Other comprehensive income
Items that are not reclassified subsequently to profit or loss:
Remeasurement gain/(loss) on retirement benefit obligations	23	5.4	(100 .3)
Tax related to remeasurement of net defined benefit liability	7	(1.3)	11.8
Tax related to components of other comprehensive income	7	–	(0. 1)
		4.1	(8 8 .6)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations		(2.8)	5 .0
Foreign currency translation differences for foreign operations –
non-controlling interests		0.6	–
Change in fair value of cash flow hedges	13(a)	(1.9)	(1. 0)
Change in fair value of cash flow hedges transferred to profit or loss	13(a)	0.6	1.7
Tax related to cash flow hedge movements	7	–	(0. 1)
		(1.3)	0. 6
		(3.5)	5 .6
Other comprehensive income/(loss) for the year, net of tax		0.6	(83.0)
Total comprehensive loss for the year		(18.5)	(140 .2)
Comprehensive income for the year attributable to:
Equity shareholders of the Company		(2 0.0)	(138.9)
Non-controlling interests		1.5	(1.3)
		(18.5)	(140 .2)

Note:

* The Group Consolidated Statement of Comprehensive Income for FY23 has been restated as described in the Basis of preparation

(note I).

Consolidated statement of comprehensive income

for the period ended 30 March 2024

129 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Consolidated balance sheet

at 30 March 2024

			2023
		2024	restated*
	Notes	£m	£m
EQUITY
Share capital	19	8 9.0	88.8
Share premium account		42.3	42.2
Capital redemption reserve		5.9	5 .9
Hedge reserve		(1.2)	0.1
Cumulative translation adjustment		6. 4	9. 2
Other reserve		(83.8)	(83.8)
Retained earnings		(70.2)	(55.7)
Total (deficit)/equity attributable to shareholders of the Company		(11.6)	6.7
Non-controlling interests		14.2	15.9
Total equity		2.6	22.6

Note:

* The Group Consolidated Balance Sheet for FY23 has been restated as described in the Basis of preparation (note I).

Approved by the Board on 24 July 2024.

Clive Vacher Dean Moore

Chief Executive Officer Interim Chief Financial Officer

Registered number: 3834125

			2023
		2024	restated*
	Notes	£m	£m
ASSETS
Non-current assets
Property, plant and equipment	9	85.4	9 7. 1
Intangible assets	10	3 7. 2	39. 3
Right-of-use assets	22	10.2	12.1
Deferred tax assets	15	0.1	5 .9
		132.9	154.4
Current assets
Inventories	11	41.7	49.3
Trade and other receivables	12	72.8	7 0. 7
Contract assets	2	1 6.7	18.9
Current tax assets		0. 2	0. 2
Derivative financial assets	13a	0. 7	2.4
Cash and cash equivalents	14	2 9. 3	40 .3
		161.4	181.8
Total assets		294.3	336 .2
LIABILITIES
Current liabilities
Trade and other payables	16	(82 . 8)	(9 2.1)
Current tax liabilities		(20 .4)	(23.2)
Derivative financial liabilities	13a	(3.3)	(1.9)
Lease liabilities	22	(2.5)	(3.0)
Provisions for liabilities and charges	18	(1.8)	(6.0)
		(110 .8)	(126 .2)
Non-current liabilities
Borrowings	17	(117 .2)	(118.4)
Retirement benefit obligations	23	(51.6)	(54.7)
Deferred tax liabilities	15	(1.9)	(2.8)
Lease liabilities	22	(9.1)	(10 .3)
Other non-current liabilities		(1. 1)	(1.2)
		(180 . 9)	(187 .4)
Total liabilities		(291. 7)	(313. 6)
Net assets		2.6	22.6

130 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Consolidated statement of changes in equity

for the period ended 30 March 2024

					Attributable to equity shareholders
		Share	Capital		Cumulative			Non-
	Share	premium	redemption	Hedge	translation	Other	Retained	controlling	Total
	capital	account	reserve	reserve	adjustment	reserve	earnings	interests	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 26 March 2022	88.8	42.2	5.9	(0 .5)	4.2	(31.9)	35.1	18.0	161.8
Loss for the year	–	–	–	–	–	–	(55. 9)	(1.3)	(57 .2)
Other comprehensive income for the year, net of tax – as reported	–	–	–	0.6	5 .0	–	(76 .2)	–	(7 0.6)
Prior year revision	–	–	–	–	–	–	(12.4)	–	(12.4)
Other comprehensive income for the year, net of tax – restated	–	–	–	0. 6	5 .0	–	(8 8 .6)	–	(83. 0)
Total comprehensive income for the year	–	–	–	0.6	5 .0	–	(144.5)	(1.3)	(140.2)
Reclassification between reserves	–	–	–	–	–	(51.9)	51.9	–	–
Transactions with owners of the Company recognised directly in equity:
Employee share scheme:
– value of services provided	–	–	–	–	–	–	1.9	–	1 .9
Tax on income and expenses recognised directly in equity	–	–	–	–	–	–	(0 .5)	–	(0 .5)
Dividends paid	–	–	–	–	–	–	–	(0. 8)	(0. 8)
Other – unclaimed dividends	–	–	–	–	–	–	0. 4	–	0. 4
Balance at 25 March 2023	88.8	42.2	5.9	0.1	9. 2	(83.8)	(55.7)	15. 9	22.6

131 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

					Attributable to equity shareholders
		Share	Capital		Cumulative			Non-
	Share	premium	redemption	Hedge	translation	Other	Retained	controlling	Total
	capital	account	reserve	reserve	adjustment	reserve	earnings	interests	equity
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance at 25 March 2023	88.8	42.2	5.9	0.1	9. 2	(83.8)	(55.7)	15.9	22.6
Loss for the year	–	–	–	–	–	–	(2 0.0)	0.9	(19 .1)
Other comprehensive income for the year, net of tax	–	–	–	(1.3)	(2.8)	–	4 .1	0.6	0.6
Total comprehensive income for the year	–	–	–	(1.3)	(2.8)	–	(15.9)	1.5	(18.5)
Transactions with Owners of the Company recognised directly in equity:
Share Capital issued	0. 2	0.1	–	–	–	–	–	–	0. 3
Employee share scheme:
– value of service provided	–	–	–	–	–	–	1.4	–	1.4
Dividends paid	–	–	–	–	–	–	–	(3.2)	(3.2)
Balance at 30 March 2024	89.0	42.3	5 .9	(1.2)	6. 4	(83.8)	(70 .2)	14.2	2 .6

Notes:

Share premium account

This reserve arises from the issuance of shares for consideration in excess of their nominal value.

Capital redemption reserve

This reserve represents the nominal value of shares redeemed by the Company.

Hedge reserve

This reserve records the portion of any gain or loss on hedging instruments that are determined to be effective cash flow hedges. When the hedged transaction occurs, the gain or loss on the hedging instrument is transferred out of equity to the income statement. If a forecast

transaction is no longer expected to occur, the gain or loss on the related hedging instrument previously recognised in equity is transferred to the income statement.

Cumulative translation adjustment (CTA)

This reserve records cumulative exchange differences arising from the translation of the financial statements of foreign entities since transition to IFRS. Upon disposal of foreign operations, the related accumulated exchange differences are recycled to the income statement.

This reserve also records the effect of hedging net investments in foreign operations.

Other reserves

On 1 February 2000, the Company issued and credited as fully paid 191,646,873 ordinary shares of 25p each and paid cash of £103.7m to acquire the issued share capital of De La Rue plc (now De La Rue Holdings Limited), following the approval of a High Court Scheme of Arrangement.

In exchange for every 20 ordinary shares in De La Rue plc, shareholders received 17 ordinary shares plus 920p in cash. The other reserve of £83.8m arose as a result of this transaction and is a permanent adjustment to the consolidated financial statements.

On 17 June 2020, the Group announced that it would issue new ordinary shares via a “cash box” structure to raise gross proceeds of £100m, in order to provide the Company and its management with operational and financial flexibility to implement De La Rue’s turnaround plan, which

was first announced by the Company earlier in the year. The cash box completed on 7 July 2020 and consisted of a firm placing, placing and open offer. The Group issued 90.9m new ordinary shares each with a nominal value of 44 152/175p, at a price of 110p per share (giving gross

proceeds of £100m). A “cash box” structure was used in such a way that merger relief was available under Companies Act 2006, section 612 and thus no share premium needed to be recorded and instead an ‘other reserve’ of £51.9m was recorded, increasing other reserves from a

deficit of £83.8m to a deficit of £31.9m. This section applies to shares which are issued to acquire non-equity shares (such as the Preference Shares) issued as part of the same arrangement.

The Group recorded share capital equal to the aggregate nominal value of the ordinary shares issued (£40.8m) and merger reserve equal to the difference between the total proceeds net of costs and share capital. As the cash proceeds received by De La Rue plc where loaned via

intercompany account to a subsidiary company to enable a substantial repayment of the RCF, the increase to other reserves of £51.9m was treated as an unrealised profit. In the year ended 25 March 2023, the Group recorded an impairment of the intercompany loan. As a matter of

generally accepted accounting practice, a profit previously regarded as unrealised becomes realised when there is a loss recognised on the write-down for depreciation, amortisation, diminution in value or impairment of the related asset. In the year ended 25 March 2023, the £51.9m

previously treated as unrealised within Other Reserves was treated as a realised amount which could be considered distributable and was reclassified from “Other Reserves” to “Retained earnings”.

Given the reversal of the impairment recorded in relation to intercompany during the year ended 30 March 2024, the £51.9m is now considered to be unrealised.

Consolidated statement of changes in equity

for the period ended 30 March 2024 continued

132 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Consolidated cash flow statement

for the period ended 30 March 2024

		2024	2023
	Notes	£m	£m
Cash flows from operating activities
Loss before tax		(15.4)	(2 9.6)
Adjustments for:
Finance income and expense	6	21.2	9. 3
Depreciation of property, plant and equipment	9	1 0.9	12.5
Depreciation of right-of-use assets	22	2.5	2.2
Amortisation of intangible assets	10	5 .9	5.3
Gain on sale of property plant and equipment	9	–	(0. 1)
Impairment of property, plant and equipment included within
exceptional items	9	4.5	5.4
Impairment of intangible assets included within exceptional items	10	–	4.3
Share based payment expense	20	1.4	1 .9
Pension Recovery Plan and administration cost payments		(1.5)	(16.5)
(Decrease)/increase in provisions	18	(4.2)	0. 1
Non-cash credit loss provision – other financial assets	5	(0 .2)	8.5
Non-cash credit loss provision – other	12	(0.1)	(0.3)
Other non-cash movements		(2.4)	3.5
Cash generated from operations before working capital		22. 6	6. 5
Changes in working capital:
Decrease in inventory		7.6	0. 5
Decrease in trade and other receivables and contract assets		2.3	6.0
(Decrease)/increase in trade and other payables and contract
liabilities		(4 .0)	11.8
		5.9	18.3
Cash generated from operating activities		28.5	24.8

Note:

1. The £1.5m (FY23: £16 .5m) of pension payments includes £nil (FY23: £15.0m) payable under the Recovery Plan, agreed in May 2020, and

a further £1.5m (FY23: £1.5m) relating to payments made by the Group towards the administration costs of running the scheme.

		2024	2023
	Notes	£m	£m
Cash generated from operating activities		28.5	24.8
Net tax paid		(2.3)	(1. 0)
Net cash flows from operating activities		26 .2	23.8
Cash flows from investing activities:
Purchases of property, plant and equipment – gross		(12.6)	(15.2)
Purchases of property, plant and equipment – grants received		8.5	4.2
Purchases of property, plant and equipment – net		(4.1)	(11.0)
Proceeds from repayment of other financial assets	5	0. 3	–
Purchase of software intangibles and development assets capitalised	10	(4.6)	(10.4)
Proceeds from sale of property, plant and equipment		–	0. 4
Interest received		0.6	0. 2
Net cash flows from investing activities		(7 .8)	(20 .8)
Net cash flows before financing activities		18.4	3 .0
Cash flows from financing activities:
Proceeds from issue of ordinary share capital		0. 3	–
Net (repayment)/draw down of borrowings	13(f)	(4 .0)	27. 0
Payment of debt issue costs	13(f)	(5.5)	(0.9)
Lease liability principal payments	22	(2.5)	(2.4)
Interest paid		(14.1)	(10.3)
Dividends paid to non-controlling interests	29	(3.2)	(0. 8)
Net cash flows from financing activities		(2 9.0)	12.6
Net (decrease)/increase in cash and cash equivalents in the year		(10.6)	15.6
Cash and cash equivalents at the beginning of the year		40 .3	24.3
Exchange rate effects		(0 .4)	0. 4
Cash and cash equivalents at the end of the year		29. 3	40.3
Cash and cash equivalents consist of:
Cash at bank and in hand	14	21.8	26 .5
Short term deposits	14	7. 5	13.8
	14,21	2 9. 3	40 .3

Note:

1. The net purchases of property, plant and equipment of £4. 1m (FY23: £11.0m) includes additions to property, plant and equipment in the

year of £4. 1m (FY23: £11.2m) (note 9), down payments and capex creditors cash outflow of £0 .5m (FY23: £0.5m) and excludes £0.5m

(FY23: £0. 7m) of grants not yet received.

133 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

General information

De La Rue plc (the Company) is a public limited company incorporated and domiciled in the

United Kingdom, whose shares are publicly traded on the London Stock Exchange. The

registered office is located at De La Rue House, Jays Close, Viables, Basingstoke, Hampshire,

RG22 4BS.

De La Rue plc and its subsidiaries (together “Group”) has two principal segments, Currency and

Authentication;

– In Currency, we design, manufacture and deliver bank notes, polymer substrate and security

features around the world.

– In Authentication, we supply products and services to governments and Brands to assure tax

revenues and authenticate goods as genuine.

The financial statements for FY24 have been prepared as at 30 March 2024, being the last

Saturday in March. The comparatives for the FY23 financial period are for the period ended 25

March 2023.

The consolidated financial statements of the Company for the period ended 30 March 2024

were authorised for issuance by the Board of Directors on 24 July 2024.

Company financial statements

The Company has elected to prepare its entity only financial statements in accordance with

FRS 102 Financial Reporting Standard applicable in the UK and Republic of Ireland. These are set

out on pages 192 to 196 and the accounting policies in respect of the Company financial

statements are set out on pages 194 and 195.

Material accounting policy information

I Basis of preparation

The consolidated financial statements of the Company for the period ended 30 March 2024

have been prepared in accordance with UK-adopted International Financial Reporting Standards

(“IFRS”) in accordance with the requirements of the Companies Act 2006. IFRS includes

standards issued by the International Accounting Standards Board (“IASB”) that are endorsed

for use in the UK.

The consolidated financial statements are prepared on a going concern basis under the

historical cost convention with the exception of certain items which are measured at fair value

as disclosed in the accounting policies below.

The preparation of financial statements in accordance with IFRS requires the use of certain

critical accounting estimates. It also requires management to exercise its judgement in the

process of applying the Group’s accounting policies. The areas involving a higher degree of

judgement or complexity, or key areas of estimation uncertainty in preparing the consolidated

financial statements, are disclosed below in V ‘Critical accounting estimates, assumptions and

judgements’.

The Group has not experienced any specific impact from the war in Ukraine or the Israel-Hamas

war, other than the global economic conditions.

Consolidated Statement of Financial Position – Prior Year Revision

In the prior period (FY23), deferred tax assets of £18.3m were incorrectly reported. This had an

impact on FY23 only and has no impact on the opening comparatives as at 27 March 2022 or

on earlier reported periods.

Deferred tax assets were overstated by £12.4m which relates to the UK Group entities. This was

due to an error in the forecast taxable profits used for the purposes of calculating the UK

deferred tax assets that could be recognised in accordance with IAS 12 “Income Taxes”.

Specifically, forecast corporate interest restrictions were incorrectly included within the forecast

taxable profits used for deferred tax asset recognition purposes. Under IAS 12, when assessing

tax forecasts, taxable amounts that arise from deductible temporary differences that are

expected to originate in future periods should be ignored. Even though the corporate interest

restrictions are not expected to reverse for the foreseeable future, they are strictly a temporary

difference for tax purposes, so they should not have been included in the taxable profits used

for the purposes of deferred tax asset recognition.

The adjustment has been disclosed as a restatement to the tax related to remeasurement of

net defined benefit pension liability within Other Comprehensive Income as it relates to

deferred tax assets arising from the pension deficit balance and tax losses arising from pension

deficit contribution payments.

This adjustment concerns the recognition of deferred tax assets and liabilities for accounting

purposes only and has no impact on the underlying tax attributes of the Group.

Impact on the Group Consolidated Balance Sheet

	FY23	Prior year	FY23
	As reported	revision	restated
	£m	£m	£m
Deferred tax asset	18.3	(12.4)	5.9
Deferred tax liabilities	(2.8)	–	(2.8)
Net assets	35.0	(12.4)	22.6
Retained earnings	(43.3)	(12.4)	(55.7)

Accounting policies

134 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

Impact on the Group Consolidated Statement of Comprehensive Income/(Loss) in FY23:

	FY23	Prior year	FY23
	As reported	revision	restated
	£m	£m	£m
Other comprehensive (expense)/income:
Tax related to remeasurement of net defined benefit liability	24.2	(12.4)	11.8
Total comprehensive loss for the period	(127.8)	(12.4)	(140.2)

Impact on the Group Consolidated Statement of Changes in Equity in FY23:

	Total equity
	£m
Balance at 26 March 2022	161.8
Loss for the year	(57.2)
Other comprehensive loss for the year – as reported	(70.6)
Prior year revision	(12.4)
Other comprehensive loss for the year – restated	(83.0)
Total comprehensive loss for the year	(140.2)
Transactions with Owners of the Company recognised directly in equity
Employee share scheme – value of service provided	1.9
Tax on income and expenses recognised directly in equity	(0.5)
Dividends paid	(0.8)
Other – unclaimed dividends	0.4
Balance at 25 March 2023	22.6

The principal accounting policies adopted in the preparation of these consolidated financial

statements are set out below or have been incorporated with the relevant notes to the

accounts where appropriate. These policies have been consistently applied to all the periods

presented, unless otherwise stated.

Climate change

In preparing the Consolidated Financial Statements management has considered the impact of

climate change and the actions that the Group will take in order to fulfil its sustainability

strategy and satisfy its commitment to become carbon neutral from its own operations by

2030. This includes the estimates around future cash flows used in impairment assessments of

the carrying value of goodwill and intangible assets in De La Rue Authentication Inc,

recoverability of deferred tax assets and the useful economic life of plant and equipment,

especially assets which are power-intensive and expected to be replaced.

This is within the context of the disclosures included in Strategic report, including those made

in accordance with the recommendation of the Taskforce on Climate-related Financial

Disclosures and the Companies (Strategic report) Climate-related Financial Disclosure

Regulations 2022 this year. These considerations did not have a material impact on the financial

reporting judgements and estimates.

Going concern

Overview

In line with IAS 1 “Presentation of financial statements”, and the FRC guidance on “risk

management, internal control and related financial and business reporting”, when assessing the

Group’s ability and the Company’s ability to continue as a going concern, the Directors have

taken into account all available information for a period up to 28 September 2025, being the

going concern period.

The Group’s business activities, together with the factors likely to affect its future development,

performance and position are set out on pages 1 to 10 of the Strategic Report. In addition, pages

56 to 63 include the Group’s objectives, policies and processes for financial risk management,

details of its financial instruments and hedging activities and its exposure to credit risk, liquidity

risk and commodity pricing risk. The financial position of the Group, its cash flows, liquidity

position and borrowing facilities are described on page 53 of the Strategic Report.

As explained further below, the Board has determined that the going concern basis of

accounting in the preparation of the consolidated financial statements is appropriate.

Accounting policies continued

135 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

The Group’s Revolving Credit Facility (RCF) expires on 1 July 2025. The cash flow forecasts for the

Group indicate that it would not have sufficient liquidity to meet the obligation to repay the RCF

in full on or before 1 July 2025. Management has been pursuing various strategic options, which

would allow the Group to repay the RCF on or before 1 July 2025. The most progressed of those

is the sale of the Authentication division. The Board notes that the probability of completion,

timing and terms of the sale of the division are subject to factors outside of the Board’s control,

which may in turn impact the cash proceeds, the costs associated with the transaction and the

amounts required to address any pension scheme risk, along with the day one liquidity of the

retained operations of the Group. These matters represent a material uncertainty which may

cast significant doubt upon the Group’s ability and the Company’s ability to continue as a going

concern for a period up to 28 September 2025.

Strategic review

As detailed in the trading update released on 30 May 2024, the Directors have been

undertaking a review of the core strategic strengths of the Group and how best to optimise the

underlying intrinsic value of the business for the benefit of all stakeholders.

This review and analysis has included:

– recognising the improved order intake over the last year, and the future prospects for the

Group’s operating divisions and the Group as a whole;

– the accretive value creation that may be achieved with increased scale and capabilities in

both of the operating divisions; and

– the Director’s commitment to reduce leverage and create greater financial flexibility in the

funding structure of the Group as a whole.

This review, and associated learnings, has guided the Board in its process to evaluate strategic

options for the group and each division. As a result, the Board is in discussions with a number of

parties who have made proposals in relation to, or expressed interest in, the acquisition of each

of the Group’s divisions.

Since the release of the trading update on 30 May 2024, the discussions with the interested

parties have progressed in line with the Board’s expectations. The Board is satisfied that, if the

discussions relating to the Group’s Authentication division conclude in a sale of that division on

the terms currently under discussion (and notwithstanding the material uncertainty as detailed

above), there would be adequate proceeds from the transaction to fully repay the RCF, satisfy

future bonding requirements, mitigate any risks to the De La Rue UK defined benefits pension

scheme, and continue to operate the retained business as a going concern.

Expiration of the RCF

Under the amended facility agreement, signed on 18 December 2023, the Group has access to

a RCF of £235m that expires on 1 July 2025, which is within the going concern period.

Over the last year, the Board has been in ongoing dialogue with the banking syndicate providing

the RCF. This dialogue has been constructive and the lenders are supportive of the Board

pursuing the strategic options summarised above.

The Directors are confident that further progression of the sale of Authentication will ultimately

allow for the full repayment of the RCF prior to its expiration in July 2025. As a result, both the

Group and its banking syndicate have agreed not to further extend the RCF beyond its current

expiry date at this point in time.

Covenants testing

The RCF allows the drawing down of cash up to the level of £160m and the use of bonds and

guarantees up to the level of £75m.

The continued access to these borrowing facilities is subject to quarterly covenant tests which

look back over a rolling 12-month period. In addition, there is minimum liquidity testing at each

week-end point on a four-week historical basis and 13-week forward looking basis. The Group

was in full compliance with its covenants throughout FY24.

During FY24 the covenant terms were:

– EBIT/net interest payable more than or equal to 1.0 times

– Net debt/EBITDA less than or equal to 4.0 times until the Q4 2024 testing point, reducing to

less than or equal to 3.6 times from Q1 FY25 through to the end of the going concern period.

– Minimum liquidity testing at each week-end point on a four-week historical basis and

13-week forward looking basis. Minimum liquidity is defined as ‘available cash and undrawn

RCF greater than or equal to £10m’.

– The spread rates on the leverage ratio remain at the following levels:

Leverage	Margin (%
(consolidated net debt to EBITDA)	per annum)
Greater than 3.5:1	4.35
Greater than 3.0:1 and less than or equal to 3.5:1	4.15
Greater than 2.5:1 and less than or equal to 3.0:1	3.95

Accounting policies continued

136 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements

In order to determine the appropriate basis of preparation for the financial statements for the

period ended 30 March 2024, the Directors must consider whether the Group can continue in

operational existence for the going concern review period to 28 September 2025, taking into

account the above liquidity headroom and covenant tests.

The terms of the facility agreement also include consideration of future options for the Group

and provision of non-financial deliverables. These requirements have been monitored

throughout the year and have continued to be achieved to the satisfaction of all parties.

Testing assumptions

The Group has prepared profit and cash flow forecasts which cover a period up to 28

September 2025 (Q2 FY26), being the going concern period. This includes the following

quarters: Q2, Q3 and Q4 FY25 and Q1, Q2 FY26 as well as monthly liquidity testing points over

the period.

The Directors consider that a period of at least 14 months to 28 September 2025 is an

appropriate going concern period given this is the first quarterly covenant test which is greater

than 12 months from the opinion date. While the current RCF is due to expire before this date,

the Directors are confident that the further progression of the sale of Authentication will provide

sufficient liquidity within the going concern period (notwithstanding the material uncertainty as

described above).

Base case assumptions

The base case forecasts over the going concern period have been developed taking into

consideration the timing of the Currency recovery that has been materialising in the

marketplace with order book growth and bid activity showing positive signs of a market

rebound. In addition, renewals of key Authentication contracts, combined with the annualization

of contracts already won and starting to produce in the current financial year, aid confidence in

the strategic growth forecasted for that division through the going concern period up to 28

September 2025.

The already enacted and largely completed footprint and restructuring projects have right-sized

the business for current demand levels. Any ramp up required over the going concern period

will be carefully managed in line with pipeline capacity requirements and orders to avoid

significant negative fluctuations against base plans.

FY25 results to date indicate the Group is substantially on-track to deliver the FY25 budget

from an EBIT and EBITDA perspective, with key order book wins secured to deliver the in-year

plan.

In Currency, the Group is seeing clear evidence of the expected market recovery. While the

overall market remains unpredictable, our conversion rate of bids to orders since the beginning

of this financial year supports the base strategic plan numbers. At March 2024, the total order

book stood at £239.2m (25 March 2023: £136.8m).

The timing of tenders has been such that several significant orders have been closed recently,

which further supports the base case modelling within the going concern period.

The Group’s base case modelling (excluding the repayment of the RCF on or before 1 July 2025)

shows headroom on all covenant thresholds across the going concern period.

Non-financial milestones

Over the going concern period, there are a number of non-financial milestones such as the

provision of monthly short-term cash flow (STCF) submissions and monthly progress updates.

Management have proactively implemented a bi-monthly 13-week cash flow process with the

outturn of this and monthly monitoring reports shared with the relevant stakeholders in line with

the amended terms from June 2023. The Directors are confident that all of the non-financial

conditions and monthly monitoring will continue to be met over the going concern period.

Downside modelling

Our downside modelling has incorporated the Directors’ assessment of events that could occur

in a ‘severe yet plausible downside’ scenario. The risks modelled are directly linked to the Risk

Committee ‘principal risks’ described on page 56 of this Annual Report and the Directors note

there are no new matters which present additional principal risks. The most significant material

risks modelled were as follows:

Accounting policies continued

137 De La Rue plc Annual Report 2024 Strategic report Governance report Financial statements