Holdings Limited
Helping our customers to invest
Annual Report and Financial Statements 2015
AJ Bell London Triathlon 2015
Contents
Introduction
20 years of AJ Bell
Strategic report
Highlights
Joint statement from the Chairman and Chief Executive
The AJ Bell Way
Our products
Easiest platform to use
First class service
Brand awareness
Our people
Principal risks and uncertainties
Corporate social responsibility
Governance
Board of Directors
Executive Management Board
Directors’ report
Statement of directors’ responsibilities in respect of the Strategic report,
Directors’ report and the financial statements
Independent auditor’s report to the members of AJ Bell Holdings Limited
Financial statements
Consolidated income statement
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Company balance sheet
Notes to the Company financial statements
Unaudited five-year summary
Other information
Definitions
Company information
4
7
8
12
14
16
18
21
22
23
26
30
31
32
36
37
40
41
42
43
44
76
77
81
84
85
• Andy Bell and Nicholas
Littlefair set up AJ Bell
with £10,000 of personal
loans
• AJ Bell launches
Sippdeal – the UK’s
first online SIPP for
execution-only investors
• Midas Capital Partners
is the first institutional
investor to acquire
shares in AJ Bell on
behalf of its retail funds
• Our 100th employee
joins the team
1995
1997
2000
2002
2005
2006
• The first-ever AJ Bell
SIPP is established
• AJ Bell launches
Sippcentre – an award-
winning, low-cost SIPP
for financial advisers
• Growth and new staff
necessitate a move to
larger offices in Trafford
House, Manchester
• AJ Bell reaches the
20,000 customer mark
and our 150th employee
joins the team
• A-Day pensions reform
changes are introduced
Introduction20 years of AJ Bell
20 years of AJ Bell
It is now 20 years since AJ Bell was founded. In that
time we have continually worked to refine and add to
our services, creating investment platforms to suit a
wide variety of customers’ requirements. This process
of evolution is ongoing, and the next generation of
enhancements are already in the pipeline.
Here are some of the key milestones we passed on our
journey to the present day:
• Invesco Perpetual
acquires shares in
AJ Bell on behalf of its
retail funds
• AJ Bell acquires
Lawshare Limited, and
rebrands it as AJ Bell
Securities Limited
• Assets under
administration break
through £5 billion
• An ISA and Dealing
Account are added to
Sippdeal and Sippcentre
• AJ Bell reaches the
60,000 customer mark
• Assets under
administration break
through £15 billion
• Assets under
administration break
through £26 billion
• AJ Bell reaches the
120,000 customer mark
• AJ Bell attracts £21
million Woodford
investment
• AJ Bell Youinvest
(formerly Sippdeal)
launches its low-cost,
easy-to-use guided
investment service
2007
2009
2011
2012
2015
• The AJ Bell SIPP and
SSAS come together to
form AJ Bell Platinum
• Assets under
administration break
through £10 billion
• AJ Bell welcomes its
40,000th customer and
300th employee
• AJ Bell launches a
Junior ISA on the
Sippdeal and Sippcentre
platforms
• AJ Bell acquires MSM
Media Limited and
its trading subsidiary,
MoneyAM Limited
Highlights
Key performance indicators
Assets under
administration
£26.1 bn
10%
Total number of
retail customers
120,550
16%
n
b
5
.
5
1
£
n
b
2
.
8
£
2014
£23.7bn
Platform
Non-platform
n
b
0
.
8
1
£
n
b
1
.
8
£
2015
£26.1bn
5
9
7
,
1
8
7
4
3
,
2
2
2014
104,142
Platform
Non-platform
5
2
5
,
8
9
5
2
0
,
2
2
2015
120,550
Key financial information
Revenue
£57.0m
7%
Total ordinary
dividend
25.50p
1%
Profit before tax
£15.5m
4%
2013
£57.0m
2014
£53.5m
2015
£57.0m
2013
£23.9m
2014
£16.1m
2015
£15.5m
Diluted earnings
per share
30.17p
2%
2013
25.00p
2014
25.25p
2015
25.50p
2013
44.82p
2014
30.76p
2015
30.17p
7
Other informationFinancial statementsGovernanceStrategic reportStrategic report Joint statement from the Chairman and Chief Executive
Les Platts
Chairman
Andy Bell
Chief Executive Officer
In September 2015, we celebrated 20 years in business. This milestone
presents an ideal opportunity for us to reflect on the significant growth
and success of the business during that period and in particular the most
recent financial year.
Since 1995, AJ Bell has grown from a small actuarial and
pension administration company to one of the largest
investment platforms in the UK. This has been achieved
by continually striving for improvement and ensuring that
our core principle of making investing easier for all our
customers is at the heart of everything we do.
The strong foundations we built the early business upon
have enabled us to grow steadily and develop into the wider
investment platform market.
Since the business was established by Andy Bell and
Nicholas Littlefair in a 149 square foot office, we have
experienced exceptional growth in customers, AUA, revenue
and profit. The year ended 30 September 2015 was another
positive year for the business on this journey of growth, with
our key performance measures growing at a healthy rate.
Growth
Total retail customers increased by 16% to 120,550 at the
year end, up from 104,142 in the previous year. AUA grew
from £23.7bn to £26.1bn, a year-on-year increase of 10%
which was largely due to new inflows. The strong overall
growth in AUA compares favourably to the FTSE All-Share
index which fell 6% in the year.
The platform propositions are the key driver of growth in the
business with platform customers increasing by 21% during
the period. More detailed information about the performance
of the platform and non-platform propositions can be found
on pages 14 & 15.
Financial performance
Revenue increased by 7%, from £53.5m last year to £57.0m
this year and was achieved despite a continued low interest
rate environment which has again reduced the return on
cash deposits. However, our revenues are well diversified
ensuring the Group’s financial performance is not reliant
on one particular income stream. With the exception of trail
commission from funds, which continues to decline as the
migration to clean share classes draws to a close, all other
revenue lines grew during the year.
Despite the increase in revenue, PBT fell 4% to £15.5m for
the year ended 30 September 2015, compared to £16.1m in
the prior year. This reduction in profitability was due to the
year-on-year fall in interest income. Falling interest income
has continued for a few years now and whilst the effect on
revenue has been minimised due to our balanced revenue
model, the impact on overall profitability persists. We also
increased discretionary expenditure this year, with additional
investment in our digital strategy and on marketing our
platform products.
Financial position
The Group’s financial position remains very healthy. Net
assets grew from £49.4m at 30 September 2014 to £52.2m
at 30 September 2015, an increase of 6%. The business
continues to be debt-free and corporate cash balances
also increased strongly in the year, up 9% from £33.2m to
£36.3m. This financial strength ensures we are well placed
to continue investing in our business. It also gives our
8
Other informationFinancial statementsGovernanceStrategic report Joint statement from the Chairman and Chief Executive
stakeholders the confidence that we have sufficient capital to
withstand any headwinds or to capitalise on any acquisition
opportunities.
During the year, the Board was formally notified by the
FCA that the Group would become subject to consolidated
supervision. The Board had anticipated this requirement
and has therefore been monitoring the capital position of the
Group as if it were subject to consolidated requirements for
a number of years. The Group holds a significant surplus of
regulatory capital and details can be found under our Pillar
III disclosures (see page 33 on the Directors’ report for more
information).
Shareholder returns
Diluted earnings per share (DEPS) fell by 0.59p per share,
from 30.76p per share last year to 30.17p per share in the
current year. This fall in DEPS was proportionately lower
than the fall in profit due to a reduction in the effective rate
of UK Corporation Tax. Despite the reduction in DEPS, the
Board has declared a final dividend of 16.00p per share,
taking the total dividend for the year to 25.50p per share.
This reflects the financial strength of the Group, the Board’s
commitment to a progressive dividend policy and its positive
outlook for the long-term prospects of the business.
Governance
There were no changes to the composition of the Board
during the year. As expected, the additions of Simon Turner
and John Tomlins to the Board in the previous year have
brought valuable skills and experience to the table and they
have complemented the existing skill sets of the other Board
members extremely well throughout the year. The Board
continues to provide strong support, encouragement and
appropriate challenge to the executive team to ensure its
strategy is developed, understood and ultimately delivered.
The Board has met ten times during the year and
is supported by four sub-committees: Audit, Risk &
Compliance, Remuneration and Nominations. The Audit and
Risk & Compliance Committees both met four times, the
Remuneration Committee three times and the Nominations
Committee once. The Board and its committees achieved
100% attendance for all meetings.
Responsibility for the day-to-day management of the
business remains with the EMB. The only change to the
EMB during the year was the formal appointment of Bruce
Robinson as a member. Bruce is our Group Legal Services
Director and Company Secretary and he brings a vast
wealth of experience to the executive team.
Easiest platform to use
We continually strive to improve the service we provide to
our customers and they remain at the heart of everything
we do. Our aim is to become the easiest platform to use
and technology will be pivotal in delivering this ambition.
The first phase of our digital strategy project has been
successfully completed during the year and this is already
delivering significant improvements to our customer journey.
Technology continues to be a key differentiator in the
platform market and we will respond as customers change
their behaviour.
An investment guidance service was recently launched for
our AJ Bell Youinvest customers enabling them to invest
in a range of extremely low-cost ready-made portfolios. It
provides our customers with one of the lowest-cost options
in the market for obtaining a balanced portfolio through a
range of global funds, with the annual costs of the portfolio
ranging from 20 – 22 bps charged on the value of the
investment. Three different risk profiles are available to
choose from but customers can also design their own
portfolios using the service, which has been developed
primarily for DIY investors who are looking for help with
investing their money. This enhancement supplements
the investment content we have been providing to our
customers since the acquisition of AJ Bell Media in 2012 and
the early feedback from users has been extremely positive.
Market developments
Whilst the changes announced in the 2015 budget were
relatively minor in comparison to the previous year, we have
continued to allocate significant resources to ensuring that
we comply with the latest rules and regulations.
The introduction of the pension freedoms legislation was
the most significant change to the pensions industry for
a number of years. We were one of the few companies
who were ready for pension freedoms ahead of the 6 April
2015 implementation date and we believe that they were
generally positive for the industry. Whilst it is still early days,
only a very small number of customers have withdrawn
their whole fund. These have typically been customers with
smaller pension funds. We have not seen any noticeable
change in the behaviour of customers with larger funds. The
favourable changes to the taxation of pensions following
death introduced at the same time as the pension freedoms
have given many of our customers reason to leave money in
their pension. These changes reduce the tax payable, and in
many cases remove the tax burden altogether, following the
death of the pension holder.
We continue to campaign on behalf of our customers and
actively engage with policy makers. We have recently
responded to the Government’s pensions tax relief
consultation and in our view, further wholesale changes
to the pensions legislative framework will only serve to
undermine pension savers’ confidence.
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Other informationFinancial statementsGovernanceStrategic report
Joint statement from the Chairman and Chief Executive
A key focus for the forthcoming year will be to develop
investment solutions for both advisers and our customers.
We will also continue with the development of our customer
interfaces and back office systems to ensure that we
progress with our objective of being the easiest investment
platform to use. This will be supported by an increase in our
brand awareness, marketing and PR activity as we aim to
meet our ambitious growth targets.
Conclusion
The last financial year was once again a very good one for
the business. Customer numbers, AUA and revenue all grew
strongly. The quality of our earnings continues to improve
which bodes well for the future of our business. Our proven
track record of providing a first class service, coupled with
our strong financial position and profitable business model
ensures that we have a strong offering for customers looking
to choose an investment platform.
We have come a long way in 20 years and the key to our
success has always been our people. Since the business
was formed back in 1995, we have developed and nurtured
a great team whose hard work and dedication has helped
us get to where we are today. We would like to take
this opportunity to thank all of our colleagues who have
continued to contribute to our success not just this year but
throughout our history.
Les Platts
Chairman
Andy Bell
Chief Executive Officer
On the regulatory front, there have been a number of
consultation papers and policy statements issued by the
FCA in recent years which have had, or will have, an impact
on our business. The ban on platform rebates following the
Retail Distribution Review (RDR) came into effect for new
business from 6 April 2014. The two-year grace period for
rebates on legacy business ends on 6 April 2016. After that
date all platform rebates will be banned. We have been
proactive on this front by converting the majority of our
customers’ legacy funds to their clean fund equivalent well
ahead of this deadline date. The final actions required to
comply with the rules will be completed ahead of 6 April
2016.
The rules detailed in the FCA’s Policy Statement PS14/9:
“Review of the Client Assets Regime for Investment
Business” came fully into effect on 1 June 2015. This has
significantly increased the demands on resources across our
sector but has also resulted in increased levels of customer
asset protection and accordingly the Group has focussed
intensively to ensure the changes have been successfully
embedded and implemented in accordance with the FCA’s
deadlines.
Outlook
The outlook for the platform market remains positive,
although the challenging economic environment and ever
increasing regulatory pressures are likely to cause difficulty
for smaller investment platforms. We believe that platforms
will need scale and a strong capital base to succeed in the
long term and this is likely to lead to further consolidation
in the market following some of the corporate activity that
has taken place in recent times. Loss-making platforms are
looking to exit the market and we hope to capitalise on this
as potential customers see the value in using sustainable,
profitable platforms to help them invest.
There are further changes on the horizon including the
introduction of a tapered annual allowance, a revamp of
the taxation of dividends and increased ISA flexibility. All
of these changes take effect on 6 April 2016 and we are
confident that we will have amended our systems and
processes ahead of the new tax year.
The low interest rate environment has persisted for a
number of years, with the Bank of England base rate
having been at a record low of 0.5% for over six years. We
have maintained a strong, profitable business throughout
that period and may now be experiencing the tail end
of this headwind as LIBOR rates begin to recover and
interest margins paid on cash deposits by our banking
counterparties follow. We expect there to be a re-coupling of
growth in profits and AUA when interest margins return to a
more normalised position.
10
Other informationFinancial statementsGovernanceStrategic report The AJ Bell Way
AJ Bell has never provided financial or personal investment advice.
It operates exclusively on an execution-only basis – whether directed
by the customer, their adviser or by its institutional customers. Our
aim is to be a market-leading provider of investment products and
administration services in the adviser and execution-only platform
markets. This includes providing white labelling, dealing, custody and
investment administration services for other financial services firms.
We help people to invest
Our primary objective is to help people invest and we aim to do this by thinking like our customers, making investing easier
and leading our markets. Informed by our guiding principles, the AJ Bell Way is a framework we have developed to ensure
our strategy is driven by our passion to help people invest.
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Other informationFinancial statementsGovernanceStrategic report
The AJ Bell Way
Guiding principles
Everyone who works at AJ Bell follows a set of guiding principles that define the company. These principles inform
everything we do, and help to ensure we never stray from our objectives of thinking like our customers, making investing
easier and leading our markets.
Guiding principles
What this says
about us
How this helps
our customers
Intelligent
We are experienced, knowledgeable,
thoughtful and aware.
Principled
We don’t sell, we help. We are open
and honest. We care and speak up
for our customers.
Our customers can be confident that
the products and services we offer are
among the best available and that we
can answer their questions accurately
and with authority.
Our customers know that they can
rely on us to help them and keep them
informed, without constantly selling
to them. They know, too, that we will
always behave ethically and be vocal
in defending their interests.
Personal
We treat people as people and
put customers at the heart of our
business. We talk, listen and take
notice, respect other people and each
other.
Our customers appreciate that we
respect and understand them as
individual human beings, that we are
pleased to talk to them, listen to what
they have to say and respond to them
quickly and efficiently.
Focussed
We offer great service and value. We
are specialists and good at what we
do. We pay attention to detail and aim
to get it right, first time.
Straightforward
We are down-to-earth, speak plain
English and simplify the complex.
Energetic
We have a can-do attitude. We turn
ideas into reality. We are restless,
enthusiastic and always looking for
ways of doing things better.
Our customers recognise that we
give them the tools they need, that the
level of service we offer is tough to
beat and that we are rarely beaten on
price. We offer exceptional expertise
together with outstanding value.
Our customers understand that
we are practical people, offering an
effective and highly functional service,
with no unnecessary complications or
additions. We try to avoid jargon and
we keep it simple.
Our customers realise that we are
successful and ambitious. We aim
to create a brighter future for our
business by providing the products
and services that will help them invest
in a brighter future for themselves.
13
Other informationFinancial statementsGovernanceStrategic report Our products
Platform business
Assets under administration grew at an impressive rate and were just over £18bn at 30 September 2015, increasing by
£2.5bn, this representing 16% year-on-year growth. This increase was largely due to a record level of transfers totalling
£2.6bn during the year, with contributions remaining broadly static at £0.9bn. This was offset by a fall in asset values during
the year following the downturn in the Chinese economy coupled with a small amount of transfer-out activity.
Assets under
administration
16.1%
n
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2014
2015
Customers
20.5%
5
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2015
AJ Bell Investcentre
AJ Bell Youinvest
AJ Bell Investcentre is an online investment platform
distributed by financial advisers, offering award-winning
SIPPs, ISAs, and GIAs. It offers a market-leading range of
investments combined with a highly competitive charging
structure.
Advised platforms administer over £325bn of assets and
the AJ Bell Investcentre platform is one of the largest and
fastest-growing in this segment of the market with AUA of
£13.5bn at 30 September 2015.
AJ Bell Youinvest is a platform designed to provide an easy
and cost-effective way for DIY investors to take control of
their investments. This award-winning platform provides
SIPPs, ISAs, Junior ISAs and Dealing Accounts. It has
a guided investment facility, a wide range of different
investment types and a comprehensive research centre.
Execution-only platforms administer over £144.7bn of
assets. The AJ Bell Youinvest platform is one of the largest
and fastest-growing in this segment of the market, doubling
its customer base in just over two years. It had AUA of
£3.3bn at 30 September 2015.
IMAS
IMAS is a fully integrated investment custody administration
solution that allows wealth managers to focus on delivering
a high quality service without the distraction of administering
the assets.
14
Other informationFinancial statementsGovernanceStrategic report
Our products
Non-platform business
The non-platform business remained stable with AUA of £8.1bn at 30 September 2015, this being £0.1bn lower than
the prior year. This was particularly pleasing given the downturn in the stock markets during the year coupled with the
transfer out of 1,500 customers following the closure of the Sippdealxtra book where Selftrade was used as an investment
partner. However, almost all of these customers transferred to AJ Bell Youinvest with only a small number being lost to our
competitors, minimising the overall loss of customers to the Group.
Assets under
administration
1.2%
n
b
2
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n
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2014
2015
Customers
1.4%
7
4
3
,
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2
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2014
2015
AJ Bell Platinum
Institutional
AJ Bell Platinum is a bespoke service that provides
expert technical support, backed by a dedicated team of
administrators. Distributed by UK financial advisers but also
available on a DIY basis, Platinum offers SIPPs and SSASs.
AJ Bell’s Institutional service provides dealing, settlement
and custody services and research facilities to institutional
investment businesses.
A project to migrate our Platinum SIPP customers onto our
core pension administration system was started during the
year. The migration will be completed gradually over the
course of next year, with other non-platform products to
follow.
Third party administration
AJ Bell’s Third party administration provides white label
SIPP administration services to a number of leading financial
services companies.
AJ Bell Media
An award-winning specialist financial publishing company
that supports the platform business by providing high
quality investment content via a variety of media channels.
It also publishes a weekly investment magazine, hosts
investment conferences and events and provides stock
market data and independent news content to a wide range
of corporate and retail customers.
15
Other informationFinancial statementsGovernanceStrategic report S
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Easiest platform to use
Our aim is to become the easiest platform to use and we have made
significant progress this year with a number of key initiatives and
projects delivered.
Digital strategy
The first phase of our digital strategy project was completed
during the year with a number of developments now
completed for AJ Bell Youinvest. The product administration,
dealing, and investment content areas of our websites have
all been integrated. This work has also enabled all future
development of customer-facing screens, tools and services
to be completed in-house.
Our mobile technology has also been enhanced with the
introduction of an internally developed Android application
and additional support provided for Apple Watch users. We
are the first UK investment platform to offer Apple Watch
support and we will continue to invest in new innovative
technologies as part of our digital strategy to ensure we
cater for our customers’ ever changing needs.
The digital strategy focus will move towards AJ Bell
Investcentre in the coming year as we look to leverage
off the successful changes we have implemented for
AJ Bell Youinvest. We are looking to deliver a number of
enhancements for our advisers and their clients, including
a new integrated funds and shares dealing service on both
desktop and mobile devices.
We will continue to invest in
new innovative technologies
as part of our digital strategy
to ensure we cater for our
customers’ ever changing needs.
Easiest platform to use
Guided investments
Investment management
The provision of an investment management service for our
customers is a natural evolution from our current business
model. It is planned to launch this service next year and it
will create an additional income stream for the Group.
The provision of investment management services will
help to lower the costs of investing for our customers whilst
providing a focus on outcome-based investing with an “it
does exactly what it says on the tin” approach. The service
will complement the recently launched guided investment
service for AJ Bell Youinvest customers and build on the
current model portfolio functionality available for AJ Bell
Investcentre advisers and their clients.
Alex Dymock joined us as Head of Investments earlier in
the year to develop this new part of the business. He has
a strong background in investment management, having
worked at a number of large investment banks including
Credit Suisse and Goldman Sachs and will be responsible
for the delivery of the AJ Bell investment management
solution.
Off shore bonds capability
We endeavour to provide our customers with the choice and
flexibility they need when investing and our regular customer
research allows us to determine the priority of any future
developments or enhancements. This research identified
a strong demand for an offshore bonds service for AJ Bell
Investcentre. A solution was found to meet this requirement
and an offshore bonds service was successfully developed
and launched earlier in the year. The service allows our
AJ Bell Investcentre customers to invest in award-winning
offshore products through Canada Life International Limited,
whilst retaining all the features and functionality of the
existing platform.
The AJ Bell Youinvest guided investment service was
launched successfully during the last year, enabling
customers to invest in a range of portfolios consisting of low-
cost global tracker funds. This service has been developed
to bridge the advice gap created by the RDR and is targeted
primarily at the increasing number of DIY customers that
welcome some help and guidance.
The guided investment service provides ready-made
portfolios that cater for three different risk profiles; Cautious,
Balanced and Adventurous. All three are designed with a
medium-to-long-term planning horizon. Our simple portfolio
builder tool also allows customers to create their own unique
portfolios based on their risk appetite.
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Cautious portfolio
This portfolio aims to give
a steady total return
over time.
Balanced portfolio
This portfolio aims for growth
and income through taking
some risk without extreme
volatility.
Adventurous portfolio
This portfolio aims for higher
growth by accepting higher
volatility.
Build your own portfolio
This tool lets you create
your own portfolio from
our top tracker list.
17
Other informationFinancial statementsGovernanceStrategic report
First class service
We aim to provide a first class service by responding to our customers
quickly and accurately, and by giving them the educational content
they need to make informed investment decisions.
Responsiveness
Challenging response targets are set for all of our
communication channels to ensure we respond to our
customers promptly. These response targets are not
only met, but often exceeded and our excellent service
in this area was recently highlighted in the October 2015
edition of the Platforum guide. This reported the average
AJ Bell Youinvest telephone response time at 11 seconds
compared to an average in the direct-to-consumer market
of 51 seconds.
A web chat facility was also successfully introduced this
year, opening another communication channel with our
customers which has proven to be very popular. More
resource will be deployed in this area to ensure we
continue to evolve as our customers’ behaviour changes.
In peak periods such as the lead-up to the pension
freedoms launch and the tax year end, the level of
telephone and written correspondence can increase by
up to 200%. We always plan ahead for these periods and
extend our opening hours to ensure that our customers
can reach us when they need us.
…74 minute turnaround from
acknowledgment of receipt!
Superb service! Thanks very
much for all of your help…
…How nice to have a company
that replies quickly to e-mails! I
wish they were all as efficient as
you. Thanks once again for your
excellent service…
Accuracy
The last year has seen a significant number of legislative
changes within our market and it is crucial during such
periods that our customers can speak to the right person
at the right time. Our functional operating structure
ensures that our customers’ queries can be directed to the
appropriate team and answered by staff with the required
technical expertise swiftly. All of our customer services staff
undertake rigorous training when they join the business and
the majority study for professional qualifications. Annual
refresher courses are also undertaken by all staff and the
QA team regularly listens to phone calls and reviews written
correspondence to ensure that our high standards are
maintained.
…Thank you for all of your
help. I have advised a few
people who wish to use your
services and I have told them
of your excellent service and
professional approach…
18
Other informationFinancial statementsGovernanceStrategic report First class service
Investment content
The provision of quality investment content to our customers
has been a key area of development in recent years,
following the acquisition of AJ Bell Media in December 2012.
We have continued to host investment conferences and
seminars during the year on the latest popular investment
topics. The 2016 World Investment Outlook will also be
provided free of charge again to AJ Bell Youinvest customers
and to advisers supporting AJ BeIl Investcentre this year.
The ‘Investival’ event hosted annually by AJ Bell
Investcentre continues to increase in popularity each year
and this year it was held at the Royal Institute of British
Architects. The event was again a big success with over 400
advisers from all over the UK attending on the day.
In the run-up to the introduction of the pension freedoms
rules, we also held a number of technical seminars and sent
out additional literature to help answer the key questions
posed by the changes. The need for this type of technical
guidance will continue to increase as we operate in a
constantly evolving industry. With significant and sometimes
complex changes being made each year, it is important that
we continue to provide this support to our customers.
UK I AFRICA I MIDDLE EAST I THE AMERICAS I ASIA I AUSTRALIA I EUROPE I JAPAN
WORLD
INVESTMENT
OUTLOOK
201 6
UK I AFRICA I MIDDLE EAST I THE AMERICAS I ASIA I AUSTRALIA I EUROPE I JAPAN
Your comprehensive guide to the coming financial year
WORLD
INVESTMENT
OUTLOOK
2016
Your comprehensive guide to the coming financial year
UK I AFRICA I MIDDLE EAST I THE AMERICAS I ASIA I AUSTRALIA I EUROPE I JAPAN
WORLD
INVESTMENT
OUTLOOK
2016
Your comprehensive guide to the coming financial year
19
Other informationFinancial statementsGovernanceStrategic report AJ Bell’s ambition is to become one of the best-known names in its markets. In 2015 we
sought to further this aim by increasing both our PR and sponsorship activities.
20
Other informationFinancial statementsGovernanceStrategic report AJ Bell’s ambition is to become one of the best-known names in its markets. In 2015 we
sought to further this aim by increasing both our PR and sponsorship activities.
Brand awareness
AJ Bell’s ambition is to become one of the best-known names in its
markets. In 2015 we sought to further this aim by increasing both our
PR and sponsorship activities.
Charlie Musson was appointed as Head of PR during the
year with the responsibility for the execution of our PR
strategy. He has had an immediate impact by securing a
number of high profile appearances on BBC TV and radio
and Sky TV for our Investment Director, Russ Mould, who
is becoming increasingly well known in the investment
community as a trusted expert on the markets.
On the sponsorship side, we have targeted partnerships
with sports that are popular among the users of our products
and services. Many of the sporting events we sponsor
are televised, enabling us to reach a national audience,
thereby helping to raise the profile of the AJ Bell brand.
Our sponsorship activities also align the brand with positive
sporting values – dedication, commitment and a belief in
striving for success – and our connection to these healthy
activities helps to reinforce the point that people must invest
in both their health and their wealth in order to enjoy long,
prosperous lives.
AJ Bell Stadium
The home of the Sale Sharks and Salford Red Devils
was renamed the AJ Bell Stadium in 2013. This year,
we arranged for our logo to be painted on the roof of the
North Stand in order to capitalise on the AJ Bell Stadium’s
prominent location next to the M60 motorway. The AJ Bell
branding will be seen by thousands of motorists each year
and will help to anchor the stadium’s name in the minds of
the public.
AJ Bell British Squash Grand Prix
AJ Bell British Squash Grand
Prix became the first squash
tournament ever to be broadcast
in ultra-clear 4K by BT Sport.
AJ Bell London Triathlon
World’s largest triathlon
13,000 triathletes
30,000 spectators
This year we put our name to the AJ Bell London Triathlon
– the largest competition of its kind anywhere in the world.
Held over two days in August, the event attracted more
than 13,000 triathletes and 30,000 spectators who lined the
streets of London to show their support. Many thousands
more tuned in around the world to watch the action on
Channel 4, Eurosport (UK) and Sky Sports. The AJ Bell
London Triathlon also saw the first public appearance of
Stocky Pigglesworth – our giant, inflatable, AJ Bell-branded
piggybank.
The AJ Bell British Squash Grand Prix is one of the UK’s
leading squash tournaments, and has become a firm
favourite among players and fans alike. We took the decision
to sponsor the event for a second time, and were pleased to
be associated with another highly successful tournament. As
an added bonus, the 2015 AJ Bell British Squash Grand Prix
became the first squash tournament ever to be broadcast in
ultra-clear 4K by BT Sport.
Nick Matthew
Nick Matthew remains one of the most respected and
exciting players in international squash. As well as enjoying
another successful year on the court, he was also awarded
an OBE for his services to the sport. We have been
delighted to continue our association with this outstanding
athlete and role model throughout the year.
21
Other informationFinancial statementsGovernanceStrategic report Our people
Our people strategy focusses on two key areas; staff engagement and
talent management. This ensures that our staff are truly engaged within
the business and have opportunities to develop and progress. This is a
pre-requisite for the provision of a first class service to our customers.
Staff engagement
We have fully embedded our Management Development
Programme this year, following its launch last year and we
are already beginning to realise some of the benefits. This
has been complemented by our Opportunities to Progress
Framework that has been established to provide staff with a
clear career path and increased development opportunities.
One of the main ways we measure our staff engagement
is through the annual Best Companies Survey, the largest
employee survey of its kind in the UK. This year AJ Bell
recorded its highest ever engagement score. This is a
fantastic achievement and is testament to the focus of the
management teams on staff engagement.
This year AJ Bell recorded its
highest ever engagement score.
74 internal promotions were
made in this year alone.
Talent management
We recruit the best people with the right skills and
behaviours for AJ Bell, ensuring they have a can-do attitude
and the drive to succeed as our business grows and further
opportunities arise. This is supported by our succession
planning, in-house training and study support packages to
ensure we nurture and develop our employees. We aim to
give our employees the best possible chance of progressing
their careers within AJ Bell and the success of our approach
to talent management is evidenced by the 74 internal
promotions that were made in this year alone.
Opportunities
to progress
framework
Treating
Customers
Fairly training
93% of our
staff are
proud to be
employees
95% of our
staff are
optimistic
about AJ Bell’s
future
Talent
Management
framework
Management
Development
Programme
22
Other informationFinancial statementsGovernanceStrategic report Principal risks and uncertainties
The Board is committed to a continual process of
improvement and embedment of the risk management
framework within the Group. This is to ensure that the
business identifies both existing and emerging risks and
develops appropriate mitigation strategies.
The directors believe that there are a number of potential
risks to the Group that could hinder the successful
implementation of their strategy. These risks may arise
from internal and external events, acts and omissions.
The directors are proactive in identifying, assessing and
managing all risks facing the business.
The Internal Audit function carries out a rolling programme,
reviewing key business areas throughout the Group. These
reviews have been focussed on areas where the directors
believe they require further assurance on controls and risk
mitigation. This, along with the Risk and Compliance and
Quality Assurance functions, comprises the ‘Assurance
Framework’. The appropriateness and effectiveness of the
Assurance Framework is assessed and documented within
the Group’s Combined Assurance Model and reviewed by
the Executive Management Assurance Committee and the
Audit Committee.
The directors present below the principal risks and
uncertainties facing the Group that could pose a threat to the
delivery of their strategy.
Industry risks
Regulatory risk
The Group operates within an increasingly regulated
environment such that new or revised legislation or
regulation may have a materially adverse effect on it. It
monitors all regulatory developments, including FCA-driven
developments such as the new capital framework for SIPP
operators and those driven by the European regulators such
as MiFID II. This enables an assessment to be made of their
impact on the Group’s businesses and for steps to be taken
to mitigate any regulatory risks. Furthermore, it enables
the Group to ensure it continues to operate in line with
regulatory best practice.
In August 2014, the FCA published PS14/12 setting out
the new capital framework for SIPP operators which will
apply from September 2016. This will generally increase the
amount of regulatory capital required to be held by SIPP
operators. The Group has assessed the likely financial
impact on its capital requirement at a regulated entity level,
and does not expect it to be material. A substantial cash
surplus is also held by the Group to provide additional
regulatory capital to its regulated subsidiaries if the need
arises.
The Group works to ensure FCA best practice and,
in particular, Treating Customers Fairly principles are
embedded across the business and followed consistently.
The Group has considered the FCA’s 2015 Business Plan
and the forward-looking areas of focus identified by the FCA,
and these have been taken into account in our assessment
of the Group’s material risks, the controls in place to mitigate
these risks and our risk and compliance plans for 2016.
The Group contributes to the debate on regulatory issues
affecting its markets. It does this, for example, through its
membership of the Association of Member-directed Pension
Schemes and the Wealth Management Association, as
well as through direct responses to Government and FCA
consultation.
Taxation law change risk
Changes to tax legislation may reduce the attractiveness
of tax-advantaged saving wrappers offered by the Group
as a means of saving for retirement. The directors are not
expecting any change in legislation over the coming year
that would make the Group’s products significantly less
attractive. With respect to pensions, the directors believe
that the pension freedoms changes will, in general, have
a positive impact on the pensions market and consumers’
willingness to save more for their retirement. The changes
to the ISA rules, introduced in 2015 and the further changes
announced for 2016, including the flexibility in subscription
limits for tax years in which withdrawals have been made,
also have the potential to increase the appeal of ISAs.
Overall, the directors are optimistic about the prospects for
continued growth in saving into tax-advantaged wrappers.
Competitor and market risks
The Group operates in a highly competitive and dynamic
industry which constantly aims to improve the services
and products available to customers. This may impact
the Group such that its products become either obsolete
or uncompetitive when compared to other offerings in the
marketplace. The Group regularly reviews its products
against competitors, in relation to pricing, functionality and
service, and actively seeks to make enhancements where
necessary to maintain or improve its competitive position in
line with the Group’s strategic objectives.
Evolving technology risk
The reliance on evolving technology remains crucial to the
Group’s effort to develop its services and enhance products.
The risk exists that either the Group’s technology fails to
operate correctly in some way or that the Group fails to take
advantage of any emerging technologies.
23
Other informationFinancial statementsGovernanceStrategic report Principal risks and uncertainties
During the year a review of the Group’s technology strategy
was completed, which led to the Board agreeing a revised
strategy covering the next 3-5 years, together with priorities
for the next 12-18 months. The strategy takes into account
the increasing risk posed by the activities of ‘cyber’ criminals
and sets out the steps to be taken to ensure our controls
continue to mitigate this ever evolving risk and to protect our
customers’ data.
The Group will continue to invest in its IT infrastructure, to
ensure that it is capable of supporting the planned growth in
the business and to protect customers’ personal data.
Credit risk
There is a risk that unexpected losses may arise as a
result of our institutional customers, market counterparties
or banks used by the Group failing to meet their financial
obligations. The Group carries out initial and ongoing due
diligence on the market counterparties and banks that it
uses and regularly monitors the level of exposure. The
Group holds an amount of capital against the materialisation
of this risk.
Operational risks
The strategy takes into
account the increasing risk
posed by the activities of ‘cyber’
criminals and sets out the
steps to be taken to ensure our
controls continue to mitigate this
ever evolving risk and to protect
our customers’ data.
Economic risk
In the event that the economy falls back into a prolonged
recession, this may impact contribution levels and confidence
generally in the savings and investment markets. The
directors believe that the Group’s overall income levels and
in particular the balance between the different types of assets
and transactions from which that income is derived, provide a
robust defensive position against any economic downturn.
Capital market fluctuations risk
Capital market fluctuations can have an effect on customer
transactional activity and the value of assets under
administration. The Group has a variety of transactional and
recurring revenue streams, some of which are monetary
amounts while others are ad valorem. This mix of revenue
types helps to limit the Group’s exposure to capital market
fluctuations.
Financial control environment risk
This includes the risk of loss to the business, or its
customers, and damage to the reputation of the Group, or
one of its leading brands, because of either the actions of an
unassociated third party or the misconduct of an employee.
The financial control and fraud prevention policies and
procedures within the Group have been reviewed and action
taken to ensure any risk of fraudulent access to customer,
or corporate, accounts is minimised. Thorough controls and
checks are in place to ensure the appropriate calibre of
individual is recruited into the Group and training is ongoing
to ensure employees maintain technical competency in
fulfilling their role within the Group along with an awareness
of risks.
Conduct risk
Conduct risk is the risk that detriment is caused to the
Group’s customers as a result of inappropriate execution
of the Group’s business activities. During the year the
Group has continued to focus on enhancements to its risk
management framework, in relation to the identification,
monitoring and mitigation of risks of poor customer
outcomes, and to its product management process to reduce
the potential for customer detriment.
Third party reliance risk
The Group undertakes its dealing, custody, settlement and
administrative activities in-house and is therefore exposed to
risk as a consequence of its reliance on third party software
suppliers.
To mitigate the risk posed by third party software suppliers,
the Group maintains a strong partnership relationship with
the key suppliers and monitors their performance to ensure
their continued commitment to service, financial stability and
viability. Where possible, the Group has had, or will have,
software code from these suppliers placed into escrow so
that access can be gained to that code in the event of the
supplier’s failure.
24
Other informationFinancial statementsGovernanceStrategic report Principal risks and uncertainties
Operational processing risk
There is a risk that the Group’s operational processes are
subject to error, causing both a reduction in earnings and
damage to the Group’s reputation. The Group focusses on
increasing the effectiveness of all its operational procedures
and aims to achieve straight-through processing wherever
practical. Certain operational processes are still subject to
manual intervention. The Group has expanded its business
improvement function and a key focus of this team will be
to improve and automate more of the processes and, by
doing so, reduce the need for manual intervention and the
potential for errors.
There is a risk that the volume of business activity in some
areas significantly exceeds planned levels resulting in
difficulties in maintaining the service standards expected by
the Group’s customers and advisers. The Group takes into
account any regulatory or other events that are expected to
lead to an increase in activity within its business planning
processes and monitors activity and service levels on an
ongoing basis for any indication of unexpected variations so
that appropriate action can be taken.
The Group has incorporated a high level of operational
resilience within its day-to-day operations. It has
documented procedures with pre-set, specified management
authorisation limits for all relevant operational processes.
In addition to regular performance targets, the Group
sets tolerance limits for operational errors which are
monitored from Board level down to the relevant operational
department.
In addition to regular
performance targets, the
Group sets tolerance limits
for operational errors which
are monitored from Board
level down to the relevant
operational department.
Litigation risk
There is a risk of liability related to litigation from customers
or third parties. The Group has robust systems and controls
and maintains an appropriate level of professional indemnity
insurance cover against these potential liabilities.
Business continuity management risk
There is a risk of disruption to the Group’s business in the
event of a loss of access to any of the Group’s properties
or in the event of a catastrophic systems failure. The
Group has agreements in place with specialist suppliers for
geographically remote disaster recovery facilities for all of its
operations, including separate offsite IT recovery facilities.
There is a rolling programme of testing of all business
continuity plans.
Project overload risk
Key people risks
There is a risk of failing to deliver on a major strategic
project, or trying to complete too many projects too quickly,
leading to a failure to deliver the anticipated benefits. The
Group has an established programme portfolio management
process, with members of the Executive Management Board
meeting on a regular basis to review, approve and prioritise
new project proposals, monitor progress of individual
projects and re-prioritise projects, or approve additional
resource, as necessary to ensure delivery of the Group’s
strategic objectives.
The loss of key personnel within the Group, an increase in
staff turnover or an inability to find appropriately qualified
new or replacement employees, particularly in periods of
sustained growth, may have a materially adverse impact
on the Group’s performance. The Group maintains a
succession plan for key members of management across
the whole business and has also sought to mitigate this
risk by facilitating equity ownership for employees within
the organisation through various share schemes and the
development of a staff engagement strategy. The level
of staff engagement has improved significantly over the
last year, following the implementation of this strategy, as
evidenced by the results from the Best Companies survey.
25
Other informationFinancial statementsGovernanceStrategic report
Corporate social responsibility
Fund raising
AJ Bell Stadium - North Stand
Our employees raise money for charitable causes every
year, and 2015 was no exception. In the last 12 months
our employees have run, rowed and ridden to raise cash
for a number of good causes, including the Mark Pollock
Trust, the AHOY Centre, the Hospice in the Weald and
the National Eczema Society. As ever, the AJ Bell Trust
also made significant donations throughout the year, to the
benefit of charities as diverse as the Brain Research Trust,
LCCC Foundation, The Prince’s Trust, North Wales Search
and Rescue Team and the Clatterbridge Cancer Charity.
This year the cancer charity Maggie’s reached the end
of its two-year agreement as the naming partner for the
AJ Bell Stadium’s North Stand. Following a public vote
via social media, the naming rights for the next two years
were awarded to a charity called ‘Wooden Spoon’, which
uses the power of rugby to fund life-changing projects for
disadvantaged and disabled children across the UK and
Ireland. As ever, these naming rights were awarded free
of charge in order to help the charity raise its profile and
hopefully gain additional funds over the period of the deal.
In the last 12 months our
employees have run, rowed
and ridden to raise cash for a
number of good causes...
AJ Bell London Triathlon
With its stunning backdrop and unique atmosphere, the
2015 AJ Bell London Triathlon inspired countless people
to improve their fitness and take part in this demanding but
growing sport. This event also helped to raise over £1 million
for good causes.
Volunteering
We actively encourage our employees to get involved with
volunteering work, and a number of good causes have
benefited from their hard work this year. In May 2015,
several members of staff worked to improve access and
clear vegetation at the Leonard Cheshire Disability Centre
in Sevenoaks, and in June 2015 another team helped
young people at the Factory Youth Zone to write CVs
and undertake mock interviews. We also helped out at
Manchester Dog’s Home, taking on everything from walking
the dogs to clearing out kennels.
...the 2015 AJ Bell London
Triathlon inspired countless
people to improve their
fitness and take part in this
demanding but growing sport...
By order of the Board
Christopher Bruce Robinson (Company Secretary)
for and on behalf of AJ Bell Holdings Limited
Trafford House, Chester Road, Manchester, M32 0RS
10 December 2015
26
Other informationFinancial statementsGovernanceStrategic report Fund raising
Raising awareness
Sponsorship
Donations
Volunteering
By order of the Board
Christopher Bruce Robinson (Company Secretary)
for and on behalf of AJ Bell Holdings Limited
Trafford House, Chester Road, Manchester, M32 0RS
10 December 2015
Governance
Board of Directors
30
Les Platts
Chairman
Les joined AJ Bell in September 2008 having retired as an Audit Partner and
practice Senior Partner for the north-east with international professional services
firm Deloitte. Over a period of 33 years with Deloitte, Les gained extensive UK and
international experience across all industry sectors, including FTSE 100, FTSE
250, smaller listed PLCs, large private companies and private equity investments.
He has advised at Board level on a wide range of financial, commercial and
governance issues, and is also Vice Chairman of Leeds Building Society.
Andy Bell
Chief Executive Officer
Andy co-founded AJ Bell in 1995, having spent a number of years working within
the financial services sector. Graduating from Nottingham University in 1987 with
a first class degree in Mathematics, he qualified as a Fellow of the Institute of
Actuaries in 1993 and has built AJ Bell into one of the largest providers of low-
cost, online investment platforms and stockbroker services in the UK. Andy is the
principal driving force behind the business, and his focus is increasingly on future
strategy and growth opportunities.
Michael Summersgill
Chief Financial Officer
Michael joined AJ Bell in July 2007 and became Chief Financial Officer in June
2011. He is responsible for a range of operational and support functions in the
business, overseeing Finance, HR, the Group’s stockbroking operation and key
control functions within the SIPP administration business. Michael graduated from
the University of Sheffield with a degree in Economics and began his career as an
accountant in public practice, gaining experience with a broad portfolio of clients.
John Tomlins
Non-executive Director
John joined AJ Bell with a wealth of experience, having spent his entire full time
career working in the IT and financial services sectors. Career highlights include
pioneering work on new client investment solutions, and helping to develop a
customer proposition that grew one start-up platform’s assets under administration
from zero to £40 billion. John also co-founded the Institute of Customer Services,
and is presently the Non-executive Chairman of a major technology and software
supplier to investment platforms.
Simon Turner
Non-executive Director
Simon joins the Board with strong experience in the retail, consumer electronics
and IT industries, thanks to his time as Group Managing Director at a leading
UK electrical retailer, and his appointment to the boards of several large Internet
businesses. No stranger to the financial services industry, he has also enjoyed
an eight-year spell on the board at one of Britain’s biggest building societies, and
currently sits on the board of a major bank.
Other informationFinancial statementsGovernanceStrategic report
Executive Management Board
The EMB is the decision-making body that is responsible for the execution of the strategy
agreed with the Board of Directors. It is charged with the day-to-day management of the
Group, this within the confines of the matters reserved to the Board of Directors. The EMB
meets regularly to review the performance of the Group and to agree corrective action
where issues arise.
The EMB consists of the Chief Executive Officer, the Chief Financial Officer and the following
members of senior management:
Fergus Lyons
Managing Director, AJ Bell Investcentre
Fergus joined AJ Bell in August 2000, having previously been employed at a major bank
for over 20 years. Over the years Fergus has worked in virtually all areas of the business.
In addition to his current role as Managing Director of AJ Bell Investcentre, Fergus has
overall responsibility for Customer Services, Technology Services and our Platinum SIPP/
SSAS products.
Richard Taylor
Chief Risk Officer
Richard joined AJ Bell in October 2005 with over 25 years’ experience in the financial
services industry. He is responsible for the risk, compliance, legal and technical resources
functions within AJ Bell. Before joining AJ Bell, Richard held senior legal, marketing and
strategy roles with a number of leading insurance companies. For many years he worked
for a company specialising in the SSAS and SIPP market, leading its Legal, Pensions
Technical and Compliance teams.
Charles Galbraith
Managing Director, AJ Bell Youinvest
Charles joined AJ Bell Securities in 2006 as Managing Director. He has worked in a
number of stockbroking firms over the past 20 years, concentrating on both private and
institutional clients. Previously he was Managing Director of Lloyds TSB Stockbrokers
Limited, and was also responsible for Lloyds TSB’s Stocks and Shares ISA business.
Charles has overall responsibility for our institutional stockbroking business, our AJ Bell
Youinvest platform and media business.
Roger Stott
Group Finance Director
Roger qualified as a Chartered Accountant in 1990 with KPMG, and has worked in retail
stockbroking since 1999. He spent seven years as Finance Director at a well-known
stockbroker, joining the company at start-up and seeing it through an MBO and sale. With
AJ Bell since 2008, Roger is responsible for overseeing the Group’s finance function, the
commercial management of supplier relationships and our third party products.
Christopher Bruce Robinson
Group Legal Services Director and Company Secretary
Bruce joined AJ Bell in October 2012, having previously acted as one of the company’s
external legal advisers. Before joining AJ Bell, Bruce spent 20 years in private practice as
a corporate and commercial lawyer, initially at Mace & Jones and then, following the 2011
merger, with Weightmans.
31
Other informationFinancial statementsGovernanceStrategic report
Directors’ report
The directors present their annual report on the affairs of the Group, together with the
consolidated financial statements and auditor’s report, for the year ended 30 September 2015.
Directors
The directors, who served throughout the year, are disclosed on page 30.
Directors’ interests
The directors who held office at 30 September 2015 had the following interests in the share capital of the Company:
Ordinary
A non-voting
B non-voting
X non-voting
30 Sept
2015
30 Sept
2014
30 Sept
2015
30 Sept
2014
30 Sept
2015
30 Sept
2014
30 Sept
2015
30 Sept
2014
Les Platts
Andy Bell
50,305
50,305
-
-
-
11,459,783 12,764,019
104,093
104,093
44,541
Michael Summersgill
-
-
John Tomlins
31,578
31,578
Simon Turner
20,000
20,000
-
-
-
60,176
13,281
-
-
-
-
Total
11,561,666 12,865,902
104,093
164,269
57,822
-
-
-
-
-
-
-
-
66,330
-
-
66,330
-
-
-
-
-
-
No director held Ordinary non-voting shares at 30 September 2015, 30 September 2014 or at any time during the period
between these dates.
Directors’ share options
At 30 September 2015, the directors who held office held the following share options:
Director
M Summersgill
M Summersgill
M Summersgill
Number
Exercise price £
Date of grant
of option
Earliest date
of exercise
10,000
2,500
1,000
1.90
3.00
3.50
1 Aug 09
1 Oct 10
19 Dec 11
1 Jul 16
1 Jul 16
1 Jul 16
There are no performance criteria attaching to any of the three tranches of share options.
No options were exercised by the directors during the year, or during the previous year.
FCA Remuneration Code
The Group is subject to CRD IV requirements and therefore the FCA Remuneration Code.
We maintain remuneration policies and practices in accordance with the applicable principles of the Remuneration Code,
which are overseen by the Remuneration Committee, comprised of the Non-executive Directors of the Board. Material
decisions in relation to the remuneration of staff whose actions have a material impact on the risk profile of the firm and in
relation to individuals in control functions are overseen by the Remuneration Committee. Our remuneration policies provide
for variable remuneration to be linked to performance.
32
Other informationFinancial statementsGovernanceStrategic report
Directors’ report
Key performance indicators
Key performance indicators in relation to the Group’s activities, as reviewed continually by senior management, are
presented on the highlights page, given at page 7.
Dividends
The Company has declared a final dividend of 16.00p (2014: 15.75p) per share, to be paid on 11 December 2015. This,
together with the interim dividend of 9.50p (2014: 9.50p) paid on 22 May 2015, makes a total dividend in respect of the
financial year ended 30 September 2015 of 25.50p per share (2014: 25.25p).
Capital management
The Group is subject to CRD IV requirements and therefore has a consolidated regulatory capital requirement. The capital
comprises share capital, share premium and retained earnings. The directors ensure that the level of capital held in the
Group:
• meets the regulatory capital requirements;
•
•
provides a strong base for ongoing trading activities;
is sufficient to support the Group’s long-term strategy.
Under the requirements of Pillar III (Disclosure), the Group is required to disclose regulatory capital information, this can be
found on the Group’s website at www.ajbell.co.uk. The Pillar III disclosure will be available from 15 January 2016.
Country by Country Reporting
AJ Bell Securities Limited is regulated under CRD IV and CRR. New regulation requires disclosure of certain financial
information on a country by country basis. The following table demonstrates how we comply with the Country by Country
Reporting requirements of CRD IV, by referencing to where in these financial statements the required information can be
found. The Company has taken the exemption permitted under CRD IV to provide this information on a consolidated basis.
Jurisdiction
Number of
employees
Turnover
Profit (or loss)
before tax
Cash tax paid on
profit or loss (£’000)
Public subsidies
received
UK
Note 6
Income statement
Income statement
3,501
None received
33
Other informationFinancial statementsGovernanceStrategic report Directors’ report
Financial risks
Interest rate risk
As at the year end, the Group had no borrowings and therefore was not exposed to interest rate risk related to debt.
The Group’s income levels are affected by prevailing interest rates. In a low interest rate environment, cash balances tend to
decline and the revenue the Group earns on cash deposits reduces. The Group maintains good relationships with its banking
partners and is able to access competitive rates due to the large value of deposits it places. This, along with the ability to
control the interest rate on customer balances, enables the Group to mitigate this risk as far as it is practicable to do so.
Liquidity risk
This is the risk that the Group may be unable to meet its liabilities as and when they fall due. These liabilities arise from the
day-to-day activities of the Group and from its obligations to customers. The Group is a highly cash generative business and
maintains sufficient cash balances and standby banking facilities to fund its ongoing trading requirements.
Credit and bank default risk
The Group’s credit risk extends to its principal financial assets. These are cash balances held with banks and trade and
other receivables.
The directors continually monitor the strength of the banks used by the Group. The banks currently used by the Group are
Bank of Scotland plc, HSBC Bank plc, The Royal Bank of Scotland plc, Santander UK plc, BNP Paribas Securities Services
and Brown Brothers Harriman & Co. Bank of Scotland plc, the Group’s principal banker, is a major UK high street bank and
is 100% owned by Lloyds Banking Group in which the UK Government is a shareholder. All of the banks currently used by
the Group have long-term credit ratings of at least A (Fitch), apart from The Royal Bank of Scotland plc which has a rating
of BBB+ (Fitch), or A3 (Moody’s). Where the services of other banks are used, the Group performs a rigorous due diligence
prior to selection as well as subsequent monitoring on an ongoing basis. This ensures that the Group retains the ability to
further mitigate the counterparty risk on its own behalf and that of its customers.
With regards to trade receivables, the Group has implemented procedures that require appropriate credit or alternative
checks on potential customers before business is undertaken. This minimises credit risk in this area.
Political contributions
There were no political contributions in the current year or prior year.
Disabled employees
Applications for employment by disabled persons are considered bearing in mind the aptitude of the applicant concerned.
In the event of employees becoming disabled every effort is made to ensure that their employment with the Group continues
and that appropriate facilities and training are arranged. It is the policy of the Group that the training, career development
and promotion of disabled persons must, as far as possible, be identical to that of other employees.
34
Other informationFinancial statementsGovernanceStrategic report Directors’ report
Employee consultation
The Group places considerable value on the involvement of its employees. It has continued to keep them informed on
matters affecting them as employees and arising from the various factors affecting the performance of the Group. This is
achieved through formal and informal meetings and internal publications. Employee representatives are consulted regularly
on a wide range of matters affecting their current and future interests. Employee share schemes have operated since June
2005. These schemes have promoted wider employee involvement in the Group.
The directors believe that the incentivisation of senior management and key employees by equity participation is an
important factor in the continuing success of the Group. This policy aligns the interests of management with those of the
wider shareholder base.
Internal control
The Board has overall responsibility for the maintenance of the internal control system established by the Group and places
considerable reliance on a strong control environment. However, such a system is designed to manage rather than eliminate
the risk of failure to achieve business objectives. It can only provide reasonable and not absolute assurance against
material misstatement or loss. Compliance with internal control procedures is monitored by the directors through the Risk
and Compliance Committee and the Audit Committee, which are responsible for overseeing the Group’s Risk Management,
Compliance and Internal Audit functions.
Going concern
The consolidated financial statements have been prepared on a going concern basis. After making enquiries, the directors
believe that they have a reasonable expectation that the Group has adequate resources to continue in operational existence
for the foreseeable future. The going concern basis of preparation is discussed in note 2.1 of the consolidated financial
statements.
Auditor
Each of the persons who are a director at the date of approval of this annual 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 ought to have taken as a director in order to make himself aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will
therefore continue in office.
By order of the Board
Christopher Bruce Robinson (Company Secretary)
for and on behalf of AJ Bell Holdings Limited
Trafford House, Chester Road, Manchester, M32 0RS
10 December 2015
35
Other informationFinancial statementsGovernanceStrategic report Statement of directors’ responsibilities in respect of the Strategic
report, Directors’ 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 law and regulations.
Company law requires the directors to prepare Group and parent company financial statements for each financial year.
Under that law they have elected to prepare the Group financial statements in accordance with IFRSs as adopted by the EU
and applicable law and have elected to prepare the parent company financial statements in accordance with UK Accounting
Standards and applicable law (UK Generally Accepted Accounting Practice).
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 parent company and of their profit or loss for that period. In preparing
each of the Group and parent company financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
•
•
for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the
EU;
for the parent company financial statements, state whether applicable UK Accounting Standards have been followed,
subject to any material departures disclosed and explained in the 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 parent
company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and
enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility
for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud
and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
36
Other informationFinancial statementsGovernanceStrategic report Independent auditor’s report to the members of
AJ Bell Holdings Limited
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Strategic report
and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following matters
where 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; or
the parent company financial statements 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.
Richard Gabbertas (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
1 St Peter’s Square
Manchester
M2 3AE
10 December 2015
We have audited the financial statements of AJ Bell Holdings
Limited for the year ended 30 September 2015 set out
on pages 40 to 80. The financial reporting framework that
has been applied in the preparation of the Group financial
statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the EU. The
financial reporting framework that has been applied in the
preparation of the parent company financial statements is
applicable law and UK Accounting Standards (UK Generally
Accepted Accounting Practice).
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.
Respective responsibilities of directors and
auditor
As explained more fully in the Directors’ Responsibilities
Statement set out on page 36, the directors are responsible
for the preparation of the financial statements and for
being satisfied that they give a true and fair view. Our
responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
•
•
•
•
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 September 2015 and of the Group’s profit for
the year then ended;
the Group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
EU;
the parent company financial statements have been
properly prepared in accordance with UK Generally
Accepted Accounting Practice;
the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
37
Other informationFinancial statementsGovernanceStrategic report Financial statements
Consolidated income statement
For the year ended 30 September 2015
Revenue
Administrative expenses
Operating profit
Investment revenue
Finance costs
Profit before tax
Taxation
Profit for the financial year attributable to equity holders
of the parent company
Earnings per ordinary share:
Basic (pence)
Diluted (pence)
Notes
4
7
8
10
10
2015
£’000
57,038
(41,651)
15,387
120
(38)
15,469
(3,140)
12,329
30.23
30.17
2014
£’000
53,493
(37,579)
15,914
234
(31)
16,117
(3,594)
12,523
30.87
30.76
The notes and information on pages 44 to 73 form part of these consolidated financial statements. All income, profit and
earnings are in respect of continuing operations.
There were no other components of recognised income or expense in either year and consequently no Statement of Other
Comprehensive Income has been presented.
40
Other informationFinancial statementsGovernanceStrategic report Consolidated statement of financial position
As at 30 September 2015
Notes
2015
£’000
2014
£’000
Assets
Non-current assets:
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax asset
Current assets:
Trade and other receivables
Client and market receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities:
Trade and other payables
Client and market payables
Current tax liabilities
Obligations under finance leases
Provisions
Non-current liabilities:
Obligations under finance leases
Provisions
Other payables
Deferred tax liability
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings
11
12
13
16
15
15
15
18
18
17
19
17
19
18
16
20
Total equity attributable to equity holders of the parent company
The notes and information on pages 44 to 73 form part of the consolidated financial statements.
1,957
6,796
1,204
54
10,011
12,723
41,788
36,318
90,829
100,840
(7,370)
(38,598)
(1,843)
(106)
(53)
1,957
8,281
1,249
-
11,487
11,484
43,328
33,222
88,034
99,521
(5,479)
(41,692)
(1,970)
(100)
(68)
(47,970)
(49,309)
(109)
(398)
(90)
-
(597)
(203)
(398)
(57)
(168)
(826)
(48,567)
(50,135)
52,273
49,386
40
1,913
50,320
52,273
40
1,085
48,261
49,386
The financial statements were approved by the Board of Directors on 10 December 2015 and were signed on its behalf by:
Michael Summersgill (Director)
for and on behalf of AJ Bell Holdings Limited
Trafford House, Chester Road, Manchester, M32 0RS
10 December 2015
41
Other informationFinancial statementsGovernanceStrategic report Notes
Share
capital
£’000
40
Share
premium
£’000
Retained
earnings
£’000
Total
£’000
639
45,999
46,678
Consolidated statement of changes in equity
For the year ended 30 September 2015
Balance at 1 October 2013
Total comprehensive income
for the year:
Profit for the financial year
Transactions with owners,
recorded directly in equity:
Issue of share capital
Repurchase of own shares
Dividends
Credit to equity in respect of
share-based payments
Deferred tax effect of share-based
payments
Tax relief on exercise of share options
Total transactions with owners
-
-
-
-
-
-
-
-
9
23
8
8
Balance at 30 September 2014
40
The notes and information on pages 44 to 73 form part of the consolidated financial statements.
-
12,523
12,523
446
-
-
-
-
-
-
(99)
446
(99)
(10,154)
(10,154)
2
(16)
6
2
(16)
6
446
1,085
(10,261)
(9,815)
48,261
49,386
40
1,085
48,261
49,386
-
-
-
-
-
-
-
-
-
12,329
12,329
828
-
-
-
-
-
-
-
828
-
(10,297)
(10,297)
39
(19)
7
39
(19)
7
828
1,913
(10,270)
(9,442)
50,320
52,273
Balance at 1 October 2014
Total comprehensive income
for the year:
Profit for the financial year
Transactions with owners, recorded
directly in equity:
Issue of share capital
Repurchase of own shares
Dividends
Credit to equity in respect of share-based
payments
Deferred tax effect of share-based
payments
Tax relief on exercise of share options
Total transactions with owners
9
23
8
8
Balance at 30 September 2015
40
The notes and information on pages 44 to 73 form part of the consolidated financial statements.
42
Other informationFinancial statementsGovernanceStrategic report Consolidated statement of cash flows
For the year ended 30 September 2015
Net cash from operating activities
21
13,052
11,949
Notes
2015
£’000
2014
£’000
Investing activities
Purchase of other intangible assets
Purchase of property, plant and equipment
Interest received
Net cash used in investing activities
Financing activities
Payment of obligations under finance leases
Proceeds from issue of share capital
Proceeds from settlement of part-paid shares
Repurchase of own shares
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Total cash and cash equivalents at end of year
(163)
(343)
120
(386)
(101)
176
652
-
(10,297)
(9,570)
3,096
33,222
36,318
(945)
(650)
234
(1,361)
(65)
441
5
(99)
(10,154)
(9,872)
716
32,506
33,222
20
20
9
The notes and information on pages 44 to 73 form part of the consolidated financial statements.
43
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
1. General information
The Company is incorporated and registered in England and Wales. The address of the registered office is given on page 85.
The nature of the Group’s operations are set out in the Strategic report on pages 7 to 27 and the Directors’ report on pages
32 to 35.
The consolidated financial statements for the Company and its subsidiaries were approved by the Board on 10 December 2015.
2. Significant accounting policies
Basis of accounting
The consolidated financial statements are prepared on a going concern basis as noted on page 45 and are presented
in sterling, rounded to the nearest thousand. They are prepared on the historical cost basis and the principal accounting
policies applied in the preparation of these financial statements are set out on pages 44 to 51.
The consolidated financial statements of AJ Bell Holdings Limited have been prepared in accordance with International
Financial Reporting Standards (‘IFRS’) as adopted by the EU. The directors have elected to prepare the parent company’s
financial statements in accordance with UK GAAP and as permitted by Section 408 of the Companies Act 2006, no profit and
loss account is presented for the Company; the notes and information for the Company are presented on pages 76 to 80.
Change in accounting policy
At the date of issue of these financial statements there were a number of standards and interpretations which were relevant
in issue but not yet effective for the Group. The directors do not believe that any of these will have a significant impact on the
Group.
Accounting policies as shown below have been consistently applied throughout the current and prior financial year.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 30 September each year. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. They cease to be
consolidated from the date that the Group no longer has control.
All intercompany transactions, balances, income and expenses are eliminated on consolidation.
A list of the significant investments in subsidiaries, including the name, country of incorporation, principal activities and
proportion of ownership interest is given in note 4 to the Company’s separate financial statements.
44
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.1 Going concern
The Group’s business activities, together with its financial position and the factors likely to affect its future development
and performance are set out in the Strategic report on pages 7 to 27 and the Directors’ report on pages 32 to 35. Within
the Directors’ report, the financial risks section on page 34 includes the Group’s policies and processes for managing
exposure to credit and liquidity risk. The Group’s forecasts and objectives, taking into account a number of potential changes
in trading performance show that the Group should be able to operate at adequate levels of both liquidity and capital for
the foreseeable future. The directors have performed a number of stress tests on capital and liquidity and these provide
assurance that the Group has sufficient capital to operate under stressed liquidity conditions.
Consequently, after making reasonable enquiries, the directors are satisfied that the Group has sufficient resources to
continue in business for the foreseeable future and therefore have continued to adopt the going concern basis in preparing
the financial statements.
2.2 Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of acquisition is measured as the
aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss
as incurred. The acquiree’s identifiable tangible and intangible assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
2.3 Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of
the identifiable assets and liabilities of the subsidiary, associate or jointly-controlled entity at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment
losses. Goodwill that is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised
immediately and is not subsequently reversed.
For the purpose of impairment testing, goodwill is allocated to one or more of the Group’s CGUs expecting to benefit from
the synergies of the combination. CGUs to which goodwill has been allocated are reviewed annually or more frequently
when there is an indication that the goodwill relating to that CGU may have been impaired. If the recoverable amount from
the CGU is less than the carrying amount of the assets present on the consolidated statement of financial position forming
that CGU, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the assets forming
that CGU and then to the assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
On disposal of a subsidiary, associate or jointly-controlled entity, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
45
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.4 Revenue recognition
In recognising revenue, the directors follow the principles contained in IAS 18 ‘Revenue’ to determine appropriate revenue
recognition policies. Revenue is recognised to the extent that it is probable that the economic benefits associated with the
transaction will flow into the Group.
Revenue is measured at the fair value of the consideration received or receivable net of discounts, VAT and other sales-
related taxes, for goods sold and services provided in the year.
Administration and custodian fees are recognised in the period in which the service is rendered using the percentage
completion method. The extent to which a service is complete is determined by the different work activity profiles of the
associated individual services.
Services rendered at the inception of a fixed-term contract are recognised over the life of that contract.
Asset-based commissions are accrued on a time basis by reference either to the principal and effective interest rate or the
due date for payment.
Transaction-based commissions are recognised when receivable in accordance with the date of the underlying transaction.
Investment revenue comprises interest income receivable on the Group’s bank deposits. Interest income is recognised in the
income statement as it accrues, using the effective interest rate method.
2.5 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value
of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is
included in the consolidated statement of financial position as a finance lease obligation. Lease payments are apportioned
between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability.
Rental payments under operating leases are charged to the income statement on a straight-line basis over the term of
the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a
straight-line basis over the lease term.
2.6 Finance costs
Finance costs comprise interest payable and finance charges on finance leases. Finance costs are recognised in the income
statement using the effective interest rate method.
2.7 Retirement benefit costs
The Group makes payments into the personal pension schemes of certain employees as part of their overall remuneration
package. Contributions are recognised in the income statement as they are payable.
The Group also contributes to employees’ stakeholder pension schemes. The assets of the scheme are held separately
from those of the Group in independently administered funds. Any amount charged to the income statement represents the
contribution payable to the scheme in respect of the period to which it relates.
Alternatively, the Group will pay contributions to an employee’s AJ Bell Youinvest SIPP, if they wish, instead of the
stakeholder pension.
46
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.8 Taxation
The tax expense represents the sum of the current tax payable and deferred tax. Tax is recognised in the income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax
payable or receivable in respect of previous years, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax liabilities are generally recognised on all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will
be available in the future, against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises (other than in a business combination) from:
• The initial recognition of goodwill; or
•
•
investment in subsidiaries to the extent that they will probably not reverse in the foreseeable future; or
the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting
profit.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
2.9 VAT
Revenues, expenses and assets are recognised net of the amount of sales tax except where the sales tax incurred on a
purchase of assets or services is not recoverable in whole or in part from the taxation authority.
Where the sales tax is not recoverable in whole or in part from the taxation authority, it is expensed through the income
statement, except in the case of a capital asset where the irrecoverable proportion is capitalised as part of the capital cost of
that asset.
2.10 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment losses.
Depreciation is provided, where material, on all property, plant and equipment at rates calculated to write off the cost, less
estimated residual value, of each asset evenly using a straight-line method over its estimated useful economic life as follows:
Leasehold improvements
Over the life of the lease
Office equipment
Computer equipment
4 years
4 years
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or,
where shorter, over the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the income statement immediately.
Where an asset is under construction at the end of a reporting period, the costs involved that meet the relevant recognition
criteria are disclosed as a separate class of asset. As these assets are not available for use by the business they are not
depreciated, instead they are reviewed for impairment.
47
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.11 Intangible assets (excluding goodwill)
Intangible assets comprise computer software, customer contracts and non-contractual customer relationships, website
development costs and the Group’s key operating system (KOS). These are stated at cost or fair value less amortisation and
any recognised impairment loss. Amortisation is provided, where material, on all intangible fixed assets excluding goodwill
at rates calculated to write off the cost or valuation, less estimated residual value, of each asset evenly using a straight-line
method over its estimated useful economic life as follows:
Computer software
KOS
4 years
10 years
KOS enhancements
Over the remaining life of the KOS
Customer contracts and non-contractual
customer relationships
5-10 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the income statement immediately.
Where an asset is under construction at the end of a reporting period, the costs involved that meet the relevant recognition
criteria are disclosed as a separate class of asset. As these assets are not available for use by the business they are not
amortised, instead they are reviewed for impairment.
2.12 Internally-generated intangible assets
An internally-generated asset arising from work performed by the Group is recognised only if all the following conditions are
met:
• An asset is created that can be identified (such as software);
•
•
it is probable that the asset created will generate future economic benefits; and
the development costs of the asset can be measured reliably.
Where such an asset is under construction at the end of a reporting period, the costs involved that meet the relevant
recognition criteria are disclosed as a separate class of asset. As these assets are not available for use by the business they
are not depreciated or amortised, instead they are reviewed for impairment. Typically, such projects consist of a mixture of
tangible and intangible components and these are disclosed separately in the financial statements.
48
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.13 Impairment of tangible and intangible assets (excluding goodwill)
At each reporting date of the consolidated statement of financial position the directors review the carrying amount of
the Group’s tangible and intangible assets to determine whether there is any indication that those assets have suffered
impairment. If such an indication exists then the recoverable amount of that particular asset is estimated.
An impairment test is performed for an individual asset unless it belongs to a CGU, in which case the present value of the
net future cash flows generated by the CGU is tested. A CGU is the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or of groups of other assets. An
intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the
asset may be impaired.
Recoverable amount
The recoverable amount of a tangible or intangible asset is the higher of its fair value less costs to sell and its value-in-
use. In assessing its value-in-use, the estimated net future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or CGU in which the asset sits is estimated to be lower than the carrying value, then
the carrying amount is reduced to the recoverable amount. An impairment loss is recognised immediately in the income
statement as an expense.
Reversals of impairment
An impairment loss is reversed on tangible and intangible assets only if subsequent external events reverse the effect of
the original event which caused the recognition of the impairment. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised. An impairment reversal is recognised in the income statement
immediately.
2.14 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks and other short-term highly liquid
investments with original maturities of three months or less. Where appropriate, bank overdrafts are shown within borrowings
in current liabilities in the consolidated statement of financial position. For the purposes of the consolidated cash flow
statement, cash and cash equivalents are defined as above, net of outstanding bank overdrafts if the Group has the right of
set off.
49
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
2.15 Financial instruments
Financial assets and liabilities are recognised in the consolidated statement of financial position when a member of the
Group becomes a party to the contractual provisions of the instrument.
Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under
a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned.
All financial assets are classified as loans and receivables.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active
market are classified as loans and receivables. Loans and receivables are measured at fair value, less any impairment. In
accordance with market practice, certain balances with clients, Stock Exchange member firms and other counterparties are
included as receivables. Client and market receivables are presented net where there is a legal right of offset and the ability
and intention to settle on the net basis. Clients’ settlement cash balances represent a right to receive cash from clients to
settle an obligation incurred on their behalf. No interest income is recognised as all loans and receivables are short-term
receivables and the recognition of interest would be immaterial.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each date of the consolidated statement of financial position.
These assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
For financial assets objective evidence of impairment could include:
• Default or delinquency in interest or principal payments; or
•
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually
are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables
could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in
the portfolio past the average credit period of 30 days, as well as the observable changes in national or local economic
conditions that correlate with default on receivables.
The carrying amount of the financial assets is reduced by the use of a provision. When a trade receivable is considered
uncollectable, it is written off against the provision. Subsequent recoveries of amounts previously written off are credited
against the provision. Changes in the carrying amount of the provision are recognised in the income statement.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered
into.
An equity instrument is any contract that evidences a residual interest in the assets in which the investment is made after
deducting all of its liabilities.
Financial liabilities
All financial liabilities are classified as other financial liabilities.
Other financial liabilities, including any borrowings, are initially measured at fair value, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest rate method. In accordance with market practice,
certain balances with clients, Stock Exchange member firms and other counterparties are included as payables. Client and
market payables are presented net where there is a legal right of offset and the ability and intention to settle on the net basis.
50
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
Effective interest rate method
The effective interest rate method is a method of calculating the amortised cost of a debt instrument and of allocating the
interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash flows
through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial
recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they
expire.
2.16 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it
is probable that the Group will be required to settle that obligation. Provisions are measured at the directors’ best estimate
of the consideration required to settle that obligation at the date of the consolidated statement of financial position and are
discounted to present value where the effect is material.
2.17 Share-based payments
The Group applies the requirements of IFRS 2 ‘Share-based Payment’. For the purposes of this financial information, IFRS 2
has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January 2006.
The Group issues equity-settled share-based payments to certain employees. These are measured at fair value (excluding
the effect of non-market based vesting conditions) at the date of grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the directors’
estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. Where a grant
of equity-settled share-based payments is not subject to vesting conditions, the fair value determined at the grant date is
expensed immediately.
Fair value is measured by use of the Black-Scholes model. The expected life applied in the model has been adjusted based
on the directors’ best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations. As
the Company’s shares are not listed on a recognised stock exchange and therefore no readily available market price exists
for the shares, the share price has been estimated using a generally accepted business valuation method. Share price
volatility has been estimated as the average of the volatility applying to a comparable group of listed companies.
2.18 Dividends
Dividend distributions to the Company’s shareholders are recognised in the period in which the dividends are paid. Final
dividends declared after the reporting period are not included as a liability in the financial statements but are disclosed in the
notes to the financial statements.
2.19 Levies
The Group applies the guidance provided in IFRIC 21 to levies issued under the Financial Services Compensation Scheme.
The interpretation clarifies when an entity recognises a liability for a levy imposed by government in accordance with
legislation (other than taxes and fines or other penalties).
51
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 2, the directors are required to make
judgements, estimates and assumptions to determine the carrying amounts of certain assets and liabilities. The estimates
and associated assumptions are based on the Group’s historical experience and other relevant factors. Actual results may
differ from the estimates applied.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future
periods if the revision affects both current and future periods.
Critical judgements in applying the Group’s accounting policies
The following critical judgements have been made by the directors in applying the Group’s accounting policies.
Impairment reviews of non-current assets
At each reporting date, the Group’s non-current assets are reviewed for impairment where there are indicators of impairment
or a review is specifically required by IAS 36. As it is not possible to test the Group’s assets for impairment on an individual
basis, impairment reviews are carried out on a CGU basis. In order to determine an asset’s recoverable amount, the
directors review the expected future cash flows of the CGU to which the asset is allocated.
There are a number of estimations that the directors have used to forecast the expected future cash flows of the CGUs that
have been reviewed. Key judgements in arriving at these estimations include:
• The revenue generated by the future demand for the Group’s products and services;
•
•
the anticipated future costs attributable to the supply of the Group’s products and services; and
the level of ongoing maintenance expenditure required on the Group’s assets in order to generate the expected level of
cash flows.
Capitalisation of internally-generated intangible assets
The Group’s accounting policy in relation to internally-generated intangible assets is given at section 2.12 in the notes to the
consolidated financial statements.
Management judges whether incremental cash flows attributable to each project can be reliably measured. For projects
where it is deemed probable that the asset will generate future economic benefits that can be measured, expenditure is
capitalised. Examples of this are the delivery of a new product or service and the development of a new operating system.
For projects that do not meet this expenditure criteria, such as the maintenance of an asset or new functionality for an
existing product, the cost is expensed to the income statement as incurred.
52
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
4. Revenue
An analysis of the consolidated revenue is as follows:
Investment administration services
Dealing and custody services
Media services
Total
5. Profit for the financial year
2015
£’000
2014
£’000
33,862
19,586
3,590
57,038
33,783
16,348
3,362
53,493
Profit for the financial year has been arrived at after charging:
Amortisation of intangible assets
Depreciation of tangible assets
Loss on disposal of intangible assets
Loss on disposal of tangible assets
Operating lease rentals:
Other assets
Staff costs
Fees payable to the company’s auditor for the audit of the
company’s annual accounts
Fees payable to the company’s auditor and its associates for other services:
Audit of the accounts of subsidiaries
Audit-related assurance services
Other assurance services
Notes
2015
£’000
2014
£’000
12
13
22
6
1,648
393
-
8
1,753
436
-
2
999
22,945
857
21,265
11
57
54
4
19
43
38
13
53
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
6. Employee benefit costs and employee numbers
The average number of employees (including Executive Directors) in the continuing
operations of the Group during the year ended 30 September 2015 were:
Administrative functions
570
548
The aggregate employee costs for the continuing operations of the Group were as follows:
2015
No.
2014
No.
Short-term employee benefits
Social security costs
Retirement benefit costs
Termination benefits
Total
Remuneration of key management personnel
Key management personnel are represented by the Board of Directors as shown on
page 30 and the EMB as shown on page 31:
Short-term employee benefits
Retirement benefit costs
Share-based payments
Total
Remuneration of directors
The following costs relate to the Board of Directors as shown on page 30:
Short-term employee benefits
Retirement benefit costs
Total
2015
£’000
19,941
2,112
819
73
2014
£’000
18,563
2,093
530
79
22,945
21,265
2015
£’000
2014
£’000
2,303
1,675
62
-
22
8
2,365
1,705
2015
£’000
2014
£’000
1,085
1
1,086
785
-
785
54
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
Remuneration of highest paid director
Short-term employee benefits
Total
7. Finance costs
Obligations under finance leases
Other
Total
2015
£’000
711
711
2014
£’000
520
520
2015
£’000
2014
£’000
24
14
38
26
5
31
55
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
8. Taxation
An analysis of the charge recognised in the consolidated income statement is presented below:
Current tax
Adjustment to current tax in respect of prior period
Deferred tax
Origination and reversal of temporary differences
Change in recognised deductible temporary differences
Reduction in tax rate
2015
£’000
3,494
(113)
(268)
22
5
2014
£’000
3,669
(2)
(90)
23
(6)
Tax charge per the consolidated income statement
3,140
3,594
The main rate of corporation tax has been calculated at 20.5% (2014: 22%) and the deferred tax rate of 20% has been
applied on the basis this was substantively enacted on 2 July 2013 and the corresponding deferred tax liabilities and assets
are anticipated to unwind in full before 1 April 2017. Further reductions to 19% (effective from 1 April 2017) and to 18%
(effective from 1 April 2020) were substantively enacted on 26 October 2015 after the balance sheet date. This will reduce
the company’s future corporation tax charge and accordingly, reduce the deferred tax assets / liabilities at 30 September
2015 which has been calculated based on the rate of 20%.
In addition to the amount charged to the income statement, certain tax amounts have been charged/(credited) directly to
equity as follows:
Deferred tax relating to share-based payments (see note 16)
Current tax relief on exercise of share options
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit before tax
Profit before tax multiplied by a pro-rata rate of Corporation Tax in the UK
of 20.5% (2014: 22%)
Effects of:
Expenses not deductible
Adjustments to current tax in respect of prior period
Change in recognised deductible temporary differences
Reduction in tax rate
Total tax expense in consolidated income statement
Effective tax rate
56
2015
£’000
19
(7)
12
2014
£’000
16
(6)
10
2015
£’000
2014
£’000
15,469
16,117
3,171
3,546
55
(91)
5
-
3,140
20.3%
31
21
(4)
-
3,594
22.3%
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
9. Dividends
Amounts recognised as distributions to equity holders during the year:
Final dividend for the year ended 30 September 2014 of 15.75p (2013: 15.50p)
per share
Interim dividend for the year ended 30 September 2015 of 9.50p (2014: 9.50p)
per share
Ordinary dividends paid on equity shares
Proposed final dividend for the year ended 30 September 2015 of 16.00p
(2014: 15.75p) per share
2015
£’000
2014
£’000
6,423
6,297
3,874
3,857
10,297
10,154
6,513
6,411
Dividends are payable on all classes of issued and fully or partially paid up ordinary shares, except B Non-voting shares as
disclosed in note 20.
10. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the parent company by the
weighted average number of ordinary, non-voting ordinary and A and X non-voting ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of shares in all classes outstanding to
assume exercise of all potentially dilutive share options.
Earnings for the purposes of basic and diluted earnings per share being profit
attributable to equity holders of the parent company
Number of Shares
Weighted average number of ordinary shares (for the purpose of basic earnings
per share) in issue during the year
Effect of potentially dilutive share options
2015
£’000
2014
£’000
12,329
12,523
Number of shares
2015
Number of shares
2014
40,788,579
40,568,194
73,993
144,002
Weighted average number of ordinary shares for the purposes of fully
diluted earnings per share
40,862,572
40,712,196
57
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
11. Goodwill
Cost
At 1 October 2014
Additions
At 30 September 2015
Accumulated impairment losses
At 1 October 2014
Charge for the financial year
At 30 September 2015
2015
£’000
2,069
-
2,069
112
-
112
2014
£’000
2,069
-
2,069
112
-
112
Carrying value at 30 September 2015
1,957
1,957
The directors test goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.
Goodwill arising on acquisition of AJ Bell Securities Limited
Goodwill of £532,000 recognised in the statement of financial position arose on the acquisition of AJ Bell Securities Limited
during the year ended 30 September 2008.
For the purposes of impairment testing, goodwill arising on the acquisition of AJ Bell Securities Limited is allocated to the
dealing and custody CGU.
Goodwill arising on acquisition of AJ Bell Media Limited
Goodwill of £1,537,000 recognised in the statement of financial position arose on the acquisition of AJ Bell Media Limited
during the year ended 30 September 2013.
For the purposes of impairment testing, £380,000 of goodwill arising on the acquisition of AJ Bell Media Limited is allocated
to the investment administration CGU, with the remaining £1,157,000 being allocated to the dealing and custody CGU.
Calculation of value-in-use of CGUs
Dealing and custody CGU
The recoverable amount of the assets contained within the dealing and custody CGU is determined by estimating its
value-in-use; the discounted future cash flows attributable to the CGU are projected over the remaining two-year life of the
customer list, which is the most prominent asset in the CGU, based on the most recent forecasts approved by the Board.
Investment administration CGU
The recoverable amount of the assets contained within the investment administration CGU is determined by estimating its
value-in-use; the discounted future cash flows attributable to the CGU are projected over the remaining six-year life of the
key operating system, which was deemed to have a useful life of ten years when it was brought into use four years ago, and
was deemed the most prominent asset in the CGU, based on the most recent forecasts approved by the Board.
58
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
The directors have exercised the following key judgements in estimating the future cash flows:
Revenue
A moderate rate of growth has been used to extrapolate cash flow projections beyond the most recent 3 year forecast
approved by the Board for the investment administration and dealing and custody CGUs.
Administrative expenses
Economies of scale are expected to be gained in the medium to long-term, although there are not expected to be any
significant changes to the nature of administrative expenses.
Asset maintenance
Modest ongoing maintenance expenditure is required on the assets in the CGUs in order to generate the expected level of
cash flows.
Discount rate
A pre-tax discount rate of 5% has been applied to the forecast cash flows in order to estimate the value-in-use of the CGUs.
Based on these key judgements, the estimated value-in-use of the CGUs comfortably supports the carrying values of the
assets held within them.
In addition to the impairment review carried out as described above, the directors have performed sensitivity analysis on
their calculations, with key assumptions being revised adversely to reflect the potential for future performance being below
expected levels. Changes to revenue are the most sensitive as they would have the greatest impact on future cash flows but
under the tests performed they continued to support the carrying value of the assets under the CGUs.
Following their review of both the dealing and custody CGU and investment administration CGU, the directors are satisfied
that goodwill is not impaired.
59
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
12. Other intangible assets
Computer
software
£’000
Assets under
construction
£’000
Customer
contracts and
non-contractual
customer
relationships
£’000
Key operating
system
£’000
Total
£’000
16,278
944
-
17,222
163
2,135
-
-
2,135
-
6,449
-
2,208
8,657
-
2,135
8,657
17,385
966
275
1,241
275
1,516
894
619
898
965
1,863
1,056
2,919
7,188
1,753
8,941
1,648
10,589
6,794
8,281
5,738
6,796
6,123
190
117
6,430
163
6,593
5,324
513
5,837
317
6,154
593
439
1,571
754
(2,325)
-
-
-
-
-
-
-
-
-
-
6 months
n/a
2 years
3 months
5 years
6 months
Cost
At 1 October 2013
Additions
Transfer
At 30 September 2014
Additions
At 30 September 2015
Amortisation
At 1 October 2013
Charge for the financial year
At 30 September 2014
Charge for the financial year
At 30 September 2015
Carrying value at
30 September 2014
Carrying value at
30 September 2015
Average remaining
amortisation period
60
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
13. Property, plant and equipment
Cost
At 1 October 2013
Additions
Disposals
At 30 September 2014
Additions
Disposals
At 30 September 2015
Depreciation
At 1 October 2013
Charge for the financial year
Disposals
At 30 September 2014
Charge for the financial year
Disposals
At 30 September 2015
Carrying value at 30 September 2014
Carrying value at 30 September 2015
Leasehold
improvements
£’000
Computer
equipment
£’000
Office
equipment
£’000
Total
£’000
3,522
871
(83)
4,310
356
(8)
1,986
382
(80)
2,288
296
(8)
988
361
(3)
1,346
59
-
2,576
1,405
4,658
1,470
276
(78)
1,668
208
-
760
117
(3)
874
168
-
1,876
1,042
620
700
472
363
2,706
436
(81)
3,061
393
-
3,454
1,249
1,204
548
128
-
676
1
-
677
476
43
-
519
17
-
536
157
141
During the year, additions of property, plant and equipment under finance leases totalled £13,000 (2014: £221,000).
The carrying amount of the Group’s office equipment includes an amount of £197,000 (2014: £285,000) in respect of assets
held under finance leases.
At the year-end, the Group had no commitments (2014: £Nil) to purchase any tangible fixed assets.
14. Subsidiaries
A list of the significant investments in subsidiaries, including the name, country of incorporation, and proportion of ownership
interest is given in note 4 to the Company’s separate financial statements.
The financial statements for the year ended 30 September 2015 of AJ Bell EBT Limited have been exempted from audit
under s479A of the Companies Act 2006 by way of parent guarantee from AJ Bell Holdings Limited.
61
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
15. Other financial assets
Trade and other receivables
Trade receivables
Prepayments and accrued income
Total trade and other receivables
2015
£’000
6,243
6,480
2014
£’000
5,139
6,345
12,723
11,484
The directors consider that the carrying value of trade and other receivables approximates to their fair value.
The maturity profile of the Group’s trade receivables was as follows:
Neither past due nor impaired
31 to 60 days
61 to 90 days
91 days and over
Less provision for doubtful debts
Trade receivables per consolidated statement of financial position
The movement in the provision for doubtful debts is as follows:
At 1 October 2014
Amounts charged to the income statement as irrecoverable
Amounts recovered during the year
At 30 September 2015
2015
£’000
4,904
114
147
1,286
6,451
(208)
6,243
2015
£’000
169
153
(114)
208
2014
£’000
3,977
84
163
1,084
5,308
(169)
5,139
2014
£’000
109
102
(42)
169
The directors have reviewed the collectability of all receivables and are satisfied that those balances not otherwise provided
against are recoverable.
Client and market receivables
Client and market receivables
Clients’ settlement cash balances
Client and market receivables arise as a result of the provision of stockbroking services.
62
2015
£’000
23,560
18,228
41,788
2014
£’000
23,304
20,024
43,328
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
Cash and cash equivalents
Cash and cash equivalents
Total
2015
£’000
36,318
36,318
2014
£’000
33,222
33,222
Cash and cash equivalents comprise cash held by the Company and any of its operating subsidiaries. It also includes short-
term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates to
their fair value. Any client bank accounts in foreign currency have been translated into sterling at the prevailing exchange
rate at the statement of financial position date.
Financial assets
Financial assets consist of cash and cash equivalents, trade receivables and client and market receivables and total
£84,349,000 (2014: £81,689,000).
Risks arising from financial assets
Credit and bank default risk
The Group’s credit risk extends to its principal financial assets. These are cash balances held with banks and trade and
other receivables.
As regards trade receivables, the Group has implemented procedures that require appropriate credit or alternative checks
on potential customers before business is undertaken. This minimises credit risk in this area.
The directors continue to monitor the strength of the banks used by the Group. The banks currently used by the Group are
Bank of Scotland plc, HSBC Bank plc, The Royal Bank of Scotland plc, Santander UK plc, BNP Paribas Securities Services
and Brown Brothers Harriman & Co.
Bank of Scotland plc, the Group’s principal banker, is substantial and is 100% owned by Lloyds Banking Group in which the
UK Government still has a stake. The degree of state ownership is closely monitored by the Group. All of the banks currently
used by the Group have long-term credit ratings of at least A (Fitch), apart from The Royal Bank of Scotland plc which has
a rating of BBB+ (Fitch), or A3 (Moody’s). Where the services of other banks are used, the Group follows a rigorous due
diligence process prior to selection. This results in the Group retaining the ability to further mitigate the counterparty risk on
its own behalf and that of its customers.
Embedded derivatives
In accordance with IAS39, ‘Financial Instruments: Recognition and Measurement’, the Group has reviewed all contracts for
embedded derivatives that are required to be separately accounted for if they do not meet certain requirements set out in the
standard. The directors are satisfied that there are no material embedded derivatives held by the Group.
63
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
16. Deferred tax
The following are the major deferred tax assets/(liabilities) recognised by the Group and movements thereon during the
current and prior reporting period.
Accelerated
capital
allowances
£’000
Share-based
payments
£’000
Short-term
timing
difference
£’000
Unused tax
losses
£’000
(178)
20
-
(158)
154
-
(4)
164
(11)
(16)
137
(22)
(19)
96
(220)
73
-
(147)
109
-
(38)
9
(9)
-
-
-
-
-
Total
£’000
(225)
73
(16)
(168)
241
(19)
54
At 1 October 2013
Credit/(charge) to the
income statement
Credit to equity
At 1 October 2014
Credit/(charge) to the
income statement
(Charge) to equity
At 30 September 2015
The current year deferred tax adjustment relating to share-based payments reflects the estimated total future tax relief
associated with the cumulative share-based payment benefit arising in respect of share options granted but unexercised as
at 30 September 2015.
As at 30 September 2015 the Group had unused tax losses of £92,000 (2014: £87,000) which have not been recognised as
a deferred tax asset.
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances (after
offset) for financial reporting purposes:
Deferred tax asset
Deferred tax liability
Net deferred tax asset/(liability)
2015
£’000
96
(42)
54
2014
£’000
137
(305)
(168)
64
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
17. Obligations under finance leases
Minimum lease payments
Amounts payable under finance leases:
Within one year
In the second to fifth years inclusive
Less: future finance charges
Present value of lease obligations
Present value of minimum lease payments
Amounts payable under finance leases:
Within one year
In the second to fifth years inclusive
Present value of lease obligations
2015
£’000
2014
£’000
119
113
232
(17)
215
123
219
342
(39)
303
2015
£’000
2014
£’000
106
109
215
100
203
303
It is the Group’s policy to lease certain items of office equipment under finance leases. The average lease term is between
three and five years. All lease obligations are denominated in sterling. The fair value of the Group’s lease obligations
approximates to their carrying amount.
65
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
18. Other financial liabilities
Trade and other payables
Trade payables
Social security and other taxes
Accruals and deferred income
2015
£’000
2014
£’000
1,075
1,320
4,975
7,370
552
1,312
3,615
5,479
Trade payables, accruals and deferred income principally comprise amounts outstanding for trade purchases and ongoing
costs. The directors consider that the carrying amount of trade payables approximates to their fair value.
Client and market payables
Client and market payables arise as a result of the provision of stockbroking services.
Non-current payables
Other payables
Financial liabilities
2015
£’000
2014
£’000
38,598
41,692
2015
£’000
2014
£’000
90
57
Financial liabilities consist of trade payables, client and market payables and obligations under finance leases.
The following details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
2015
2014
Less than
1 month
£’000
39,503
42,240
1 to 3
months
£’000
-
(14)
3 to 12
months
£’000
276
117
1 to 5
years
£’000
109
203
Total
£’000
39,888
42,546
Risks arising from financial liabilities
Liquidity risk
This is the risk that the Group may be unable to meet its liabilities as and when they fall due. These liabilities arise from the
day-to-day activities of the Group and from its obligations to customers. The Group is a highly cash generative business and
maintains sufficient cash and standby banking facilities to fund its foreseeable trading requirements.
66
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
19. Provisions
At 1 October 2014
Utilised in the year
Charged in the year
At 30 September 2015
Included in current liabilities
Included in non-current liabilities
FSCS
levy
£’000
Office
dilapidations
£’000
68
(15)
-
53
53
-
398
-
-
398
-
398
Total
£’000
466
(15)
-
451
53
398
The FSCS levy provision represents an estimate of a potential interim levy for the year ended 31 March 2015.
The Group is contractually obliged to reinstate its three leased properties to their original state and layout at the end of the
lease terms. The office dilapidations provision represents the directors’ best estimate of the present value of costs which will
ultimately be incurred in settling these obligations.
67
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
20. Share Capital
Issued, fully-called and paid:
38,592,492 (2014: 38,035,865) ordinary shares of 0.1p each
75,000 (2014: 75,000) ordinary non-voting shares of 0.1p each
781,471 (2014: 1,858,436) A non-voting ordinary shares of 0.1p each
767,465 (2014: Nil) X non-voting ordinary shares of 0.1p each
2015
£
2014
£
38,593
75
781
767
38,036
75
1,858
-
40,216
39,969
Issued, partly-called and paid:
167,102 (2014: Nil) B non-voting ordinary shares of 0.1p each
167
Nil (2014: 77,910) A non-voting ordinary shares of 0.1p each
– 10% partly-called and paid
64,000 (2014: 174,242) A non-voting ordinary shares of 0.1p each
– 0.2% partly-called and paid
221,104 (2014: 484,205) A non-voting ordinary shares of 0.1p each
– 0.3% partly-called and paid
57,597 (2014: Nil) X non-voting ordinary shares of 0.1p each
– 10% partly-called and paid
120,683 (2014: Nil) X non-voting ordinary shares of 0.1p each
– 0.2% partly-called and paid
151,665 (2014: Nil) A non-voting ordinary shares of 0.1p each
– 0.3% partly-called and paid
-
-
1
6
-
-
-
8
1
1
-
-
-
Total value of fully or partly-paid shares
The following share transactions that have had an impact on share premium during the year:
Transaction type
Share class
Full payment
Full payment
Full payment
A non-voting ordinary shares of 0.1p each
X non-voting ordinary shares of 0.1p each
Y non-voting ordinary shares of 0.1p each
Exercise of CSOP options
Ordinary shares of 0.1p each
New issue under OTB
A non-voting ordinary shares of 0.1p each,
0.2% partly-paid
New issue
Ordinary shares of 0.1p each
New issue under OTB
B non-voting ordinary shares of 0.1p each
174
10
40,390
39,979
Number of
shares
Premium
£’000
n/a
n/a
n/a
40,919
69,400
15,500
167,102
352
18
282
111
1
30
34
828
The ordinary non-voting shares A non-voting ordinary shares and X non-voting ordinary shares have the same rights as to
dividend and on winding-up as the ordinary shares except that they cannot vote at meetings of shareholders.
68
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
21. Notes to the statement of cash flows
Profit for the financial year
Adjustments for:
Investment revenue
Finance costs
Income Tax expense
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share-based payment expense
Increase in provisions and other payables
Loss on disposal of fixed assets
Operating cash flows before movements in working capital
Decrease/(increase) in receivables
(Decrease)/increase in payables
Cash generated from operations
Income Taxes paid
Interest paid
Net cash from operating activities
2015
£’000
2014
£’000
12,329
12,523
(120)
38
3,140
393
1,648
39
18
8
(234)
31
3,594
436
1,753
2
111
2
17,493
18,218
301
(1,203)
(3,410)
1,601
16,591
16,409
(3,501)
(38)
(4,429)
(31)
13,052
11,949
69
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
22. Operating leases
The Group as lessee:
Minimum lease payments under operating leases recognised
as an expense in the year
2015
£’000
2014
£’000
999
857
At the date of the consolidated statement of financial position, the Group had outstanding commitments for future minimum
lease payments under non-cancellable operating leases as shown in the table presented below. The calculations represent
the minimum payments up to the next available break point in each of the Group’s leases.
Within one year
In the second to fifth years inclusive
After five years
2015
£’000
1,046
1,833
201
3,080
2014
£’000
984
2,408
303
3,695
Presented below are the minimum lease payments to which the Group would be contractually obligated if all break options
were removed:
Within one year
In the second to fifth years inclusive
After five years
2015
£’000
1,046
3,818
5,278
2014
£’000
984
4,003
6,201
10,142
11,188
Operating lease payments represent rentals payable by the Group for its office properties. At original inception, office
property leases are negotiated for an average term of ten to fifteen years and rentals are fixed for an average of five years.
70
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
23. Share-based payments
Equity-settled share option schemes
During the year there have been two HMRC-approved share option schemes in operation, an EMI scheme and CSOP.
Following amendments to the EMI thresholds, the Group ceased to qualify as an eligible participant and the EMI scheme
was closed to new entrants in July 2008. The CSOP was created in July 2009 to replace the EMI scheme, and to ensure that
equity ownership for all levels of employees within the organisation continued to be facilitated.
All unexercised options granted under the EMI scheme prior to July 2008 are fully vested and remain exercisable. Options
granted under the EMI scheme are usually forfeited if the employee leaves the Group before the option expires. There
were no unvested EMI scheme options in existence during the current or prior year. Therefore, there was no share-based
payment expense in respect of the EMI scheme in either the prior year or current year, nor will there be any expense in
future accounting periods.
Options granted under the CSOP vest between three and ten years after the date of grant and are usually forfeited if
the employee leaves the Group before the option expires. The expense for share-based payments under the CSOP is
recognised over the respective vesting period of these options. The expense recognised in the year to 30 September 2015
was £27,764 (2014: £2,111).
The fair value of equity-settled share options granted is estimated as at the date of grant using the Black-Scholes method,
taking into account the terms and conditions upon which the options were granted.
During the period, a total of 130,254 options were granted under the CSOP. The fair value of these options has been
estimated using the Black-Scholes method.
The inputs to that model for this new issue of options are listed below:
Fair value of share from generally accepted business model (£)
Exercise price of an option (£)
Expected volatility
Expected dividend yield
Risk-free interest rate
Expected option life to exercise (months)
3.50
3.50
25%
7.21%
0.83%
36
Options are exercisable at a price equal to the market value of the Company’s shares on the date of grant. As the Company
is unlisted, it has no readily available share price and so its share value is calculated using dividend and earnings-
based models to determine a range of valuations. The average price indicated by these valuations is assumed to be the
approximate market value at the date of grant. This is discounted to represent the minority value of one share and is agreed
with HMRC prior to the granting of options. The expected life of the options is based on the minimum period between the
grant of the option, the earliest possible exercise date and an analysis of the historical exercise data and is not necessarily
indicative of exercise patterns that may occur. The expected volatility reflects the assumption that historical volatility is
indicative of future trends, which may also not necessarily be the case.
The B non-voting ordinary shares (Growth shares) are a new share class offered to management which will effectively
replace the A non-voting ordinary share class during the current financial year. Growth shares entitle the holder to participate
in any growth in value of the Group above a certain threshold level, which is set in excess of the market value at the time
that the shares are acquired. Growth shares carry no dividend entitlement.
We have estimated the value of Growth shares using the Black-Scholes method, taking into account the terms and
conditions upon which the options were granted. The expense recognised in the period was the fair value of the growth
shares less the 20 pence issue price. This resulted in a charge to the income statement of £10,883 (2014: £Nil), relating to
the issue of 167,102 Growth shares in December 2014.
71
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
The inputs to that model for this new issue of options are listed below:
Fair value of share from generally accepted business model (£)
Expected volatility
Expected dividend yield
Risk-free interest rate
Time expected to reach growth target (months)
4.10
25%
6.16%
0.83%
22
The fair value of the shares has been based on a whole company basis and has been provided independently by our tax
advisers. The dividend yield, volatility and risk-free interest rates are consistent with those used for CSOPs. The expected
time period has been based on the assumed date that the growth target threshold will be met using a 3 year forecast
approved by the Board.
Details of the aggregate share options (EMI and CSOP) outstanding during the year are as follows:
Reconciliation of the movement in the number of share options:
Outstanding at beginning of period
Granted during the period
Exercised during the period
Forfeitures
Outstanding at the end of the period
Exercisable at the end of the period
2015
2014
Weighted
average
exercise price
(£)
2.69
3.50
2.71
2.72
2.89
1.90
Number of
options
460,819
130,254
(40,919)
(20,252)
529,902
259,972
Weighted
average
exercise price
(£)
2.72
3.80
2.82
3.16
2.69
1.65
Number of
options
537,644
20,715
(27,604)
(69,936)
460,819
251,653
The Company is unlisted; therefore no quoted price is available for its stock.
The lowest exercise price for share options outstanding at the end of the period was 22p (2014: 22p) and the highest
exercise price was 420p (2014: 420p). The weighted average remaining contractual life of share options outstanding at the
end of the period was 6 years (2014: 6 years).
72
Other informationFinancial statementsGovernanceStrategic report Notes to the consolidated financial statements
For the year ended 30 September 2015
24. Related party transactions
Subsidiaries
The Company has a related party relationship with its subsidiaries. Transactions between the Company and its subsidiaries
and between subsidiaries have been eliminated on consolidation.
Key management personnel
The Group has a related party relationship with its directors and members of the senior management team (the ‘key
management personnel’). Remuneration of key management personnel is disclosed in note 6. During the year there were no
material transactions or balances between the Group and its key management personnel or members of their close family,
other than noted below.
Directors
Remuneration of the directors is disclosed in note 6.
Charitable donations
During the year, the Group made donations totalling £76,500 (2014: £76,000) to the AJ Bell Trust, a registered charity of
which Mr A J Bell is a trustee.
25. Events after the date of the consolidated statement of financial position
At the date of the approval of these consolidated finanical statements, the directors are not aware of any material events
after the date of the consolidated statement of financial position.
73
Other informationFinancial statementsGovernanceStrategic report Company balance sheet
As at 30 September 2015
Notes
£’000
£’000
£’000
£’000
2015
2014
Fixed assets
Investments
Current assets
Debtors:
- due within one year
- due after one year
Cash at bank and in hand
Current liabilities
Creditors: Amounts falling due
within one year
Net assets
Capital and reserves
Called-up share capital
Share premium account
Profit and loss account
Shareholders’ funds
4
5
5
6
7
8
8
9
18,010
18,010
907
6,480
7,387
8,932
1,816
7,450
9,266
8,327
16,319
(1,565)
32,764
40
1,912
30,812
32,764
17,593
(725)
34,878
40
1,085
33,753
34,878
The financial statements of AJ Bell Holdings Limited (registered number 04503206) were approved by the Board of Directors
and authorised for issue on 10 December 2015. They were signed on its behalf by:
Michael Summersgill (Director)
for and on behalf of AJ Bell Holdings Limited
Trafford House, Chester Road, Manchester, M32 0RS
10 December 2015
76
Other informationFinancial statementsGovernanceStrategic report Notes to the Company financial statements
For the year ended 30 September 2015
1. Significant accounting policies
Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been
prepared under the historic cost convention and in accordance with applicable United Kingdom Accounting Standards and
law.
The accounting policies that are different to those used in the preparation of the consolidated financial statements are
summarised below. They have all been applied consistently throughout the year and the preceding year.
The separate statements have been prepared on a going concern basis. The directors believe that they have a reasonable
expectation that the Company has adequate resources to continue in operational existence for 12 months from the date the
financial statements are approved.
Investments
Investments in subsidiary undertakings are shown at cost less provision for impairment.
Taxation
The charge or credit for taxation is based on the profit or loss for the year and takes into account taxation deferred because
of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised
without discounting in respect of all timing differences between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.
2. Profit for the financial year
As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own profit and
loss account for the year. The Company reported a profit for the year ended 30 September 2015 of £7,317,000 (2014:
£7,819,000). This profit was generated from the Company’s principal activity which is that of a holding company.
The auditor’s remuneration for the audit and other services is disclosed in note 5 to the consolidated financial statements.
3. Charitable donations
During the year, the Company made charitable donations of £76,500 (2014: £76,000).
77
Other informationFinancial statementsGovernanceStrategic report Notes to the Company financial statements
For the year ended 30 September 2015
4.
Investments
Cost
At 1 October 2014
Additions
At 30 September 2015
Accumulated impairment losses
At 1 October 2014
Charge for the financial year
At 30 September 2015
2015
£’000
2014
£’000
18,412
-
18,412
402
-
402
8,412
10,000
18,412
402
-
402
Carrying value at 30 September 2015
18,010
18,010
The Company has investments in the ordinary share capital of the following subsidiaries:
Name of Company
Country of incorporation
Principal activity
Holding %
AJ Bell Limited*
AJ Bell Trustees Limited
England and Wales
England and Wales
Ashby London Trustees Limited
England and Wales
AJ Bell Platinum Limited*
England and Wales
Ashby London Actuarial Services Limited*
England and Wales
Investment / Group
administration
Dormant
Dormant
Dormant
Dormant
AJ Bell Management Limited*
England and Wales
Investment administration
Sippdeal Trustees Limited
England and Wales
AJ Bell (PP) Trustees Limited
England and Wales
Whitehead Trustees Limited
England and Wales
Ashby London (PP) Trustees Limited
England and Wales
Sippdeal Limited
MSM Media Limited*
England and Wales
England and Wales
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
AJ Bell Securities Limited*
England and Wales
Dealing and custody
Lawshare Nominees Limited
AJ Bell EBT Limited*†
AJ Bell Media Limited*
MoneyAM Limited
England and Wales
England and Wales
England and Wales
England and Wales
Dormant
Dormant
Media
Media
* Held directly by AJ Bell Holdings Limited.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
† The financial statements for the year ended 30 September 2015 of AJ Bell EBT Limited have been exempted from audit
under s479A of the Companies Act 2006 by way of parent guarantee from AJ Bell Holdings Limited.
78
Other informationFinancial statementsGovernanceStrategic report Notes to the Company financial statements
For the year ended 30 September 2015
5. Debtors
Due within one year:
Trade debtors
Amounts owed by Group undertakings
Prepayments and accrued income
Due after one year:
Deferred tax asset relating to share-based payments
Amounts owed by Group undertakings
2015
£’000
335
7
565
907
2015
£’000
30
6,450
6,480
2014
£’000
1,052
747
17
1,816
2014
£’000
-
7,450
7,450
Amounts owed by Group undertakings falling due after one year relate to loans issued to AJ Bell Limited by the Company
in relation to costs incurred by AJ Bell Limited in renewing IT infrastructure and administration systems in order to enhance
products and services for the Group.
6. Creditors – Amounts falling due within one year
Trade Creditors
Amounts owed to Group undertakings
Other taxation and social security
Corporation Tax
Accruals and deferred income
7. Called-up share capital
The Company’s share capital is disclosed in note 20 to the consolidated financial statements.
2015
£’000
276
381
56
815
37
1,565
2014
£’000
-
205
-
501
19
725
79
Other informationFinancial statementsGovernanceStrategic report Notes to the Company financial statements
For the year ended 30 September 2015
8. Reserves
At 1 October 2014
Retained profit for the financial year
Issue of new shares
Pay up of part-paid shares
Dividends paid
Credit to equity for equity-settled share-based payments
Share premium
£’000
Profit & loss
£’000
1,085
-
175
652
-
-
33,753
7,317
-
-
(10,297)
39
At 30 September 2015
1,912
30,812
9. Reconciliation of movement in equity shareholders’ funds
Retained profit for the financial year
Credit to equity for equity-settled share-based payments
Dividends
Proceeds from issue of new shares
Proceeds from pay-up of part-paid shares
Repurchase of own shares
Net addition to shareholders’ funds
Opening shareholders’ funds at 1 October 2014
2015
£’000
7,317
39
2014
£’000
7,819
2
(10,297)
(10,154)
(2,941)
(2,333)
175
652
-
(2,114)
34,878
355
91
(99)
(1,986)
36,864
Closing shareholders’ funds at 30 September 2015
32,764
34,878
80
Other informationFinancial statementsGovernanceStrategic report Unaudited five-year summary
For the year ended 30 September 2015
Results
Revenue
Profit from operations
Profit before tax
Profits attributable to equity
holders of AJ Bell Holdings
Limited
Assets employed
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Long-term provisions
Net assets
Financed by
Equity
Key statistics
Earnings per share (pence)
Fully diluted earnings per share
(pence)
Dividends paid in year
(pence per share)
Dividend declared with respect to
profits generated in year
(pence per share)
2015
£’000
2014
£’000
IFRS
2013
£’000
2012
£’000
2011
£’000
57,038
15,387
15,469
53,493
15,914
16,117
57,043
23,725
23,902
51,765
26,360
26,501
41,570
18,940
19,046
12,329
12,523
18,164
19,799
13,882
10,011
90,829
11,487
88,034
11,863
83,908
9,778
64,907
7,710
58,193
(47,970)
(49,309)
(48,420)
(35,711)
(38,134)
(199)
(398)
(428)
(398)
(358)
(315)
(287)
(280)
(79)
(136)
52,273
49,386
46,678
38,407
27,554
52,273
49,386
46,678
38,407
27,554
30.23
30.17
25.25
30.87
30.76
25.00
45.08
44.82
24.75
49.39
49.14
22.50
34.82
34.66
18.50
25.50
25.25
25.00
24.75
21.00
81
Other informationFinancial statementsGovernanceStrategic report Other information
Definitions
The following definitions are used throughout the annual report and financial statements:
AUA
Assets under administration
Board, Directors
The Board of Directors of AJ Bell Holdings Limited
bps
Clean fund
Basis points
A unit of a fund on which a platform does not receive any payment from the fund
management group
Company
AJ Bell Holdings Limited
CGU
CRD IV
CRR
CSOP
DEPS
DIY
EMB
EMI
FCA
FTSE
FSCS
Fund
GIA
Group
HMRC
ISA
KOS
LIBOR
Cash Generating Unit
Capital Requirements Directive IV
Capital Requirements Regulations
Company Share Option Plan
Diluted Earnings Per Share
Do It Yourself
Executive Management Board
Enterprise Management Incentive
Financial Conduct Authority
Financial Times Stock Exchange
Financial Services Compensation Scheme
The generic term used to describe unit trusts and Open-Ended Investment Companies
General Investment Account
AJ Bell Holdings Limited and its wholly-owned subsidiaries
HM Revenue and Customs
Individual Savings Account
Key Operating System
London Interbank Offer Rate
Non-platform business
Includes our SIPP only and institutional stockbroking services
OBE
OTB
PBT
Order of the British Empire
Option to Buy Shares Scheme
Profit Before Tax
Platform business
Includes our AJ Bell Investcentre (formerly Sippcentre), AJ Bell Youinvest
(formerly Sippdeal) and IMAS propositions
PR
QA
RDR
SIPP
SSAS
84
Public Relations
Quality and Audit
Retail Distribution Review
Self-Invested Personal Pension
Small Self-Administered Scheme
Other informationFinancial statementsGovernanceStrategic report Company information
Company number
04503206
Company Secretary
Christopher Bruce Robinson
Registered office
Auditor
Trafford House
Chester Road
Manchester
M32 0RS
KPMG LLP
1 St Peter’s Square
Manchester
M2 3AE
Principal banker
Bank of Scotland plc
1 Lochrin Square
92 – 98 Fountainbridge
Edinburgh
EH3 9QA
85
Other informationFinancial statementsGovernanceStrategic report AJ Bell Holdings Limited, Trafford House, Chester Road, Manchester M32 0RS
0845 40 89 100
www.ajbell.co.uk
Company registration number 04503206