Walker Crips Group Annual Report 2013

← All annual reports

FY2013 Annual Report · Walker Crips Group

Loading PDF…

REPORT & ACCOUNTS 2013

CONTENTS

Financial Highlights

Chairman’s Statement

Chief Executive’s Report

Directors’ Report

Report by the Directors on
Corporate Governance Matters

Statement of Directors’ Responsibilities

Report by the Board
on Directors’ Remuneration

Independent Auditor’s Report

Consolidated Income Statement

Consolidated Statement of
Comprehensive Income

Consolidated Statement of
Financial Position

Consolidated Statement of Cash Flows

Consolidated Statement of
Changes in Equity

Notes to the Accounts

Independent Auditor’s Report

Company Balance Sheet

Notes to the Company Accounts

Notice of Annual General Meeting

Shareholder Notes

Form of Proxy

Officers and Professional Advisers

ibc

INVESTMENT MANAGEMENT

STOCKBROKERS

WEALTH MANAGEMENT

STRUCTURED INVESTMENTS

FINANCIAL HIGHLIGHTS
Year ended 31 March 2013

Disposal of fund management subsidiary (WCAM) realised a one-off gain
in excess of £11.7m which helped deliver record pre-tax profits of £9.1m
(2012: £0.6m) and earnings per share of 25.21p (2012: 0.77p)

Discretionary and advisory assets under management increased by 64%

Improving profitability in second half of the year helped limit the full year
operating loss (before exceptional items) to £1.0m (2012: profit of £0.8m), after
operating loss (before exceptional items) of £0.7m in the first half of the year

Record dividends of 8.87p per share (2012: 1.84p per share) including 7.5p per
share special interim dividends (2012: nil) paid from WCAM disposal profits

Non-broking income as a proportion of total income increased to 62.1%
(2012: 60.3%)

Non-Broking Revenue

)

m
£
(
e
u
n
e
v
e
R

48.9

51.3

50.0

52.3

46.2

40.1

29.1

29.4

32.8

60.3

62.1

e
u
n
e
v
e
R
g
n
i
k
o
r
B
-
n
o
N
%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Revenue (£m)

% Non-Broking Revenue

Report & Accounts 2013 | Walker Crips Group plc | 1

CHAIRMAN’S STATEMENT
Year ended 31 March 2013

Business Performance Overview
Operating losses (before exceptional items) for the year
of £1.0m (2012: operating profit of £0.8m) reflect weak
trading conditions and lower volumes, especially in the first
half and which persisted until the fourth quarter, materially
impacting private client commission income and an
increase in the proportion of shared revenues and therefore
commission paid away to £8.6m (2012: £5.7m).
Revenues in the last quarter of the year have shown, and
continue to show, an encouragingly improving trend above
the Board’s expectations.
Exceptional administrative expenses of £1.3m (2012:
£0.3m) were incurred during the year, predominantly in
restructuring and redeveloping the continuing businesses
and focussed on future cost savings or potential revenue
generation. As part of this process we relocated our
settlement and administration functions out of the
City of London to Romford. This, together with the re-
configuration of our London office, is already resulting
in significant cost savings, with no loss of efficiency or
service levels, and will provide immediate improvements
to the Group’s profitability.

Corporate Events/Strategy
In the year under review we made significant progress
in implementing our strategy of focussing on and
redeveloping our core businesses. Such progress was aided
considerably by Chief Investment Officer, Mark Rushton,
who was recruited to the Group in February 2012.
In April 2012 we completed the disposal of WCAM
to Liontrust Asset Management plc (Liontrust) for a
consideration of £12.7m in a combination of cash,
Liontrust shares and convertible unsecured loan stock
(CULS). This resulted in a one-off gain in excess of £11.7m
and substantially increased the resources available to re-
invest in the core businesses. The Liontrust shares and some
of the CULS have since been disposed of, further adding to
the liquid resources available to the Group.
The focus of our re-investment has been on the
recruitment of additional investment managers and
their clients, assets and associated revenue streams. This
has continued steadily throughout the year and is well
ahead of expectations.
In November 2012, we agreed the sale of Keith Bayley
Rogers and Co., our corporate finance subsidiary, for a
consideration of £0.3m. This disposal of the last of our
non-core businesses, completed after the year end, on
31 May 2013.

D M Gelber
Chairman

Summary
The results for the year ended 31 March 2013 are
dominated by the actions we have taken to implement
the Board’s strategy of focussing on the Group’s core
investment management, stockbroking and wealth
management businesses. Most notably the one-off gain
arising from the successful disposal of Walker Crips Asset
Managers Ltd (WCAM) has enabled us to report record
pre-tax profits of £9.1m and to return a substantial amount
of capital to shareholders through two special dividend
payments during the year.
The Group also acquired 20 new investment managers,
moved its back-office operations into a new more cost-
effective location and completed the disposal after year
end of its corporate finance subsidiary.
As a result of these actions, the Group is well on track to
return its core business to significant profitability.

2 | Walker Crips Group plc | Report & Accounts 2013

Balance Sheet
As at 31 March 2013, the Group had net assets of £19.5m,
including net cash of £7.8m, the strongest balance sheet
in its history, providing a solid platform on which to build
future growth.
Our remaining holding of CULS has been re-valued at
31 March 2013. The significant increase in the share
price underlying this instrument has resulted in a total
revaluation gain of £883,000 (see Note 21), most of which
is reflected in this year's income statement.

Dividends
In recognition of the gain made by the Group on the
disposal of WCAM, the Board declared two special interim
dividends during the year, returning an aggregate of 7.5
pence per ordinary share to shareholders.
The Board also rebased the ongoing annual dividend
payments to a level which is more consistent with
the continuing business. The Board anticipates that
these dividends can be increased over time as the
implementation of its strategy enables the Group to
improve its underlying profitability.
The Board is pleased to announce a final dividend for the
year of 0.9 pence per ordinary share (2012: 0.9 pence per
ordinary share) which, when combined with the interim
dividends of 7.97 pence per ordinary share (0.47 pence
per ordinary share excluding the special interim dividends;
2012: 0.94 pence per ordinary share) makes a total
dividend for the year of 8.87 pence per ordinary share (1.37
pence per ordinary share excluding the special interim
dividends; 2012: 1.84 pence per ordinary share). The final
dividend will be paid on 26 July 2013 to those shareholders
on the register at the close of business on 28 June 2013.

AGM
This year’s Annual General Meeting will be held at the
South Place Hotel, 3 South Place, London, EC2M 2AF on 19
July 2013 at 11.00 am. Coffee and biscuits will be served
for a short time before and after the meeting.

Outlook
As a result of the strategic initiatives and changes
implemented during the year, we have seen a consistent
run rate of profitability in the months immediately before
and since the year end. This gives us considerable optimism
for the current year.
Many worldwide financial issues remain unresolved, the
continuing uncertainty from international monetary easing
and ongoing Eurozone issues to name just two. However,
global equity markets have shown some resilience and this
has assisted in an encouraging start to the current year for
the Group.
The combination of our continued focus on the
development of the Group’s investment and wealth
management businesses, our new product pipeline, the
cost savings derived from our restructuring and our balance
sheet strength leaves the Group in prime position to grow
and to benefit all stakeholders in the business in the future.

David Gelber
Chairman
20 June 2013

Report & Accounts 2013 | Walker Crips Group plc | 3

CHIEF EXECUTIVE’S REPORT
Year ended 31 March 2013

Administrative expenses were closely monitored and
were contained without any increase over the prior
year. However, specific front end development costs
were incurred in executing the Board’s growth strategy,
thereby increasing overheads linked to the expected and
materialising increase in attributable revenues and the full
realisation of much larger related cost savings.
The Group's underlying operating loss (before the
exceptional costs incurred in the restructuring and
refocusing of the Group) for the year was £1.0m (2012:
restated underlying operating profit of £0.8m), of which
£0.7m was incurred in the first half of the year, clearly
demonstrating the improvements in trading as the year
progressed.
Exceptional administrative costs of £1.3m (2012: £0.3m)
were incurred during the year.
The profit before tax for the year of £9.1m (2012: £0.6m
restated) reflects, in particular, the significant gain on the
disposal of WCAM. Other non-operating items include:
a goodwill write down of £1.2m reflecting the
Board’s view of the negative impact of generally
weak global markets on the trading performance
of some of the Group’s business units in the
first half of the year, in particular the reduction
in the cash generation of the stockbroking and
corporate finance businesses; and
the conversion and disposal of part of the £4m
holding of CULS yielding a profit of £0.4m;and
the disposal of our holding of 1,851,967 Liontrust
ordinary shares, which yielded a loss of £0.6m; and
the revaluation of remaining CULS at the year
end generating a revaluation gain of £0.8m.
Earnings per share for the year of 25.21 pence (2012:
0.77 pence restated) reflect the impact of the above non-
operating items.

▪

R A FitzGerald FCA
Chief Executive Officer

Results overview
The overriding theme for the year has been one of
change, the catalyst for which was the significant gain
made upon the disposal of WCAM. I am delighted to
report that the implementation of new initiatives to
generate material increases in revenue and earnings in
our core businesses have had an increasingly positive
impact on our trading as the year progressed. The Group
is now very well placed for further advances in the current
year, especially with the benefit of almost a full year of
the substantial savings obtained from our recent office
relocations.
Gross revenue for the year to 31 March 2013 was £20.3m,
a level consistent with the prior year (2012: £20.3m)
despite the loss of the WCAM income of nearly £4m
included in 2012. On a like-for-like basis, gross revenue
increased by 22% to £19.9m (2012: £16.3m) although,
as an expected consequence, the proportion of income
subject to commission sharing arrangements also
increased significantly. This resulted in higher payments to
our burgeoning team of internal and external investment
managers and, correspondingly, lower net income
(gross profits) of £11.8m (2012: £14.6m). The executive
management team, bolstered by the addition of Mark
Rushton in the new role of Chief Investment Officer, is
confident that it has the focus and resources to continue
to drive the Group’s investment management and wealth
management businesses forward.

4 | Walker Crips Group plc | Report & Accounts 2013

Investment Management
The Board’s strategic vision of ‘Making Investment
Rewarding’ is revitalising both our Private Client Portfolio
Investment Management and Stockbroking revenue
streams. We have utilised our robust balance sheet to
acquire new investment managers and can boast a total
of 20 new client-facing recruits since March 2012. Nearly
all brought strong client relationships which have had
an immediate impact on group revenue and which we
anticipate will more than replace the lost WCAM revenues.
Discretionary and advisory assets under management
(AUM) at the year end were £1,030m (31 March 2012:
£628m excluding WCAM), a 64% increase reflecting the
greater emphasis we now place on growing our fee-based
revenue streams. Total assets under management and
administration also increased by 43% to £2.0 billion over
the comparable amount for the prior year.
We have also upgraded our systems and developed
new products and services which have been successfully
launched to the market, including our discretionary
investment portfolio models which are aimed at building
IFA client access channels, and extending the traditional
private client base.
We have embraced industry-wide rule changes to deliver
more transparent fee structures, which we will continue to
streamline. We are also looking to continue growing our
fee based income and look forward to reporting progress
on this in future results.
As well as traditional bonds and equities and alternative
asset classes, and in line with clients’ demand, the
internally managed Private Client division’s services have
increased activity in covered options where suitable for
individual clients.
Our traditional advisory and execution-only business bore
the brunt of the turbulent markets in the first half of the
year. However, in the second half year it generated £4.7m
of commission income, an encouraging 47% increase
compared to the first half.
The Structured Investments team produced a record
year largely unaffected by the changes resulting from
the FCA's Retail Distribution Review which took effect
on 31 December 2012. The product range has achieved
impressive returns and continues to be popular amongst
professional advisers.
With low interest rates making Cash ISAs unattractive,
subscriptions into our Stocks and Shares ISA product
increased by 32% year on year, justifying once again our
policy of incubating products for several years until more
lucrative future returns can be enjoyed.

Fund Management
The Group retained the management of the CF Corporate
Bond Fund follow the disposal of WCAM. This fund
totalled £22.7m at the time of the WCAM disposal and,
at the year end, stood at £24.7m reflecting a successful
strategy of income generation with lower risk than most
of its peers. The fund management team have a clear
strategy to continue to grow funds under management
and to increase profitability.
The decision was taken to wind up the Global Growth
and Select Income Funds which were felt to have become
less attractive propositions for investors and clients. This
process concluded after the year end with almost all of the
funds being reinvested via the investment management
and wealth management services of Walker Crips.

Wealth Management (previously referred to as
Financial Services)
Our innovative Wealth Management division, based in York,
continues to be driven by focused management and a very
competent team of advisers, who provide a committed,
premium service to its predominantly regional base.
In the year to 31 March 2013, the York operation
delivered a record operating profit and, post the advent of
RDR, activity remains strong. Income related to assisting
small and medium sized corporates to meet the new
rules for auto enrolment of employee pension schemes,
boosted the year’s revenues and continues to support
revenues in the current year.
Overall assets under management in the pensions
subdivision at the year end were £301m (2012: £291m).
The SIPP (Self Invested Personal Pension) product
enjoyed a strong year with 10% growth in new SIPP
plans to 330 at the year end (31 March 2012: 300).
Assets under administration at the period end also were
up 10% at just over £95m (2012: £87m). In addition,
the SSAS (Small Self Administered Scheme) product
experienced acceptable growth and is now being more
overtly marketed to small corporate and family controlled
companies in need of dedicated pension services. SSAS
plans under administration at the year end amounted to
£206m (2012: £204m).

Report & Accounts 2013 | Walker Crips Group plc | 5

Outlook
We are encouraged by the growing number of quality
revenue generators who are attracted to the Walker Crips
platform, with its compelling offering in this exciting phase
of expansion, and who bring their own capabilities and
client bases. Since the year end we have added six more
investment managers and their clients and assets under
management to the team.
Overall trading activity in the opening weeks of the new
financial year has been strong, with the current global
optimism reflected in investor sentiment. Your Board
believes that the Group is well positioned to capitalise on
improvements in its markets over the longer term and that
the right strategy for delivering underlying growth in the
next phase of the Group’s development is in place.

R A FitzGerald FCA
Chief Executive Officer
20 June 2013

CHIEF EXECUTIVE’S REPORT
Year ended 31 March 2013

Liquidity
The current level of cash resources within the Group
remains more than sufficient for working capital purposes
and provides adequate headroom even when faced
with volatile business flows. Cash at the yearend stood
at £7.8m with no borrowings in place. Great emphasis
is placed on the credit risk of the banking institutions
with whom we place funds, with financial stability taking
priority over high rates of return which are rare in current
economic conditions.

Going Concern
The Group continues to maintain a robust financial
position. Having conducted detailed cash flow and
working capital forecasts and appropriate stress-
testing on liquidity, profitability and regulatory capital,
taking account of possible adverse changes in trading
performance, the Board has sufficient grounds to believe
the Group is well placed to manage its business risks
adequately; and that it will be able to operate within the
level of its current financing arrangements and regulatory
capital limits. Accordingly, the Board continues to
adopt the going concern basis for the preparation of the
financial statements.

Staff
It is the collegiate atmosphere at Walker Crips which
makes it the special company it is and I would like to thank
all members of the team, both staff and associates, for
their efforts during the year, in particular for their positive
reaction to our decision to relocate to new office space and
in accommodating the ongoing stream of new investment
managers, advisers and clients joining our ranks.
Special thanks goes to the individuals in our IT
department, who unwaveringly demonstrated great
support and flexibility in ensuring the office moves
were smooth and efficient and enabled us to continue
to serve our clients seamlessly. I thank them all for
their outstanding fortitude in maintaining the highest
standards of service under immense pressure.

6 | Walker Crips Group plc | Report & Accounts 2013

DIRECTORS’ REPORT
Year ended 31 March 2013

The directors present their annual report on the affairs of the Group, together with the financial statements and
auditor’s report, for the year ended 2013.

Principal activities and business review
The principal activities of the Group are investment management, fund management, administration of Individual
Savings Accounts, the provision of investment advice and managing clients' deposits in the course of conducting
investment business. In recent years, these activities have expanded to include pension management and advice,
structured investments design and distribution, corporate trustee services and personal financial planning and wealth
management.
A review of the business can be found in both the Chairman’s statement and Chief Executive’s report, and below.

Long-term strategy and business objectives
The objective for the Group is to build upon the historical private client business to create a broader financial services
group and, by accelerating growth and profitability, to create real shareholder value. For the foreseeable future this will
comprise building on the core divisions of investment management and wealth management. The strategy will be to
grow these divisions both organically and by acquisition in a manner that creates recurring revenue and shareholder
value. There are three key elements to implementing the Group’s strategy while we strive to provide quality advice to
our clients. They are:

▪

focused acquisitions of teams of individuals or entities which complement or widen our existing product range and
which deliver measured profitability and growth;
targeted investment in resources required to expand the product range to build on the organic growth and
profitability already achieved; and
increasing the level of recurring fee revenues derived from our investment and wealth management offerings.
Our progress on our strategic objectives is monitored by the Board by reference to several key performance indicators
(KPIs) applied on a group wide basis. Performance in 2013 is set out in the table below together with prior year
performance data which has not been adjusted for and excludes the data for WCAM, a subsidiary which was sold early
in the year in April 2012. No changes have been made to the source of data or calculation methods used in the year.

▪

Transaction volumes

Investment Funds under management 31 March

Non broking income to total income

2013

100,278

2012

90,711

£1,030 million

£628 million

62.1%

60.3%

These key performance indicators are reviewed and amended occasionally to correspond with the changing mix of the
group’s main business activities.

Report & Accounts 2013 | Walker Crips Group plc | 7

DIRECTORS’ REPORT
Year ended 31 March 2013

Results and dividends
Results, distributions and retained profits are as follows:

Retained earnings at 1 April

Profit for the year after taxation

Dividends paid

Retained earnings at 31 March

2013

£’000

4,498*

9,153

(3,221)

10,430

2012

£’000

5,212*

281*

(995)

4,498*

The directors recommend a final dividend of 0.9p per ordinary share to be paid on 26 July 2013 to ordinary
shareholders on the register on 28 June 2013.
*Amounts have been restated explained further in Note 35

Capital Structure
Details of the Company’s share capital are shown in note 28. The Company has one class of ordinary share which
carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by
the general provisions of the Articles of Association and prevailing legislation. The directors are not aware of any
agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on
voting rights.
Voting rights of shares held by the trustees of the Company’s Share Incentive Plan (SIP) are not exercised unless the
trustee is directed to vote by the employee SIP participant.
No person has any special rights of control over the Company’s share capital and all issued shares are fully paid.
With regard to the appointment and replacement of directors, the company is governed by its Articles of Association,
the Combined Code, the Companies Acts and related legislation. The articles themselves may be amended by special
resolution of the shareholders.

Risks and uncertainties
Risks to the business are reviewed monthly and monitored by the Board-appointed Business Risk Panel; they are
formally reviewed by the Board once a year. The Group’s risk management policies and procedures are also discussed in
the Report by the directors on Corporate Governance matters with financial risks and their risk management explained
further note 26 to the financial statements. The principal risks of the Group are as follows:

Risk Type

Risk

Key Mitigators

Credit Risk

Counterparty risk

Majority of clients are small. All institutional transactions
are cash against delivery.

Conduct Risk

Loss arising from any breach of FCA
rules

Strong compliance culture and large training budget is
augmented by sound control framework and experienced
well resourced compliance team.

Liquidity Risk

Bank default and other systemic risk

Settlement failure

Capital Adequacy

8 | Walker Crips Group plc | Report & Accounts 2013

Several banks are used to hold both clients’ and firm’s
money; with levels being constantly reviewed. Credit risk
assessments are carried out in conjunction with credit
ratings set by external agencies.

Experienced management team monitors settlement
performance.

Capital adequacy surplus maintained well in excess of
regulatory requirements. Material surplus cash balances
are always carried.

DIRECTORS’ REPORT
Year ended 31 March 2013

Directors and their interests
The directors of the Company who served during the year, are listed below together with their beneficial interest in the
shares of the Company.

Ordinary shares

Share options

31 March 2013

31 March 2012

31 March 2013 31 March 2012

D.M. Gelber
(non-executive chairman)*

78,478

69,156

R.A. FitzGerald (chief executive)

230,870

221,470

S.J. Bailey (resigned 12 April 2012)

175,475

399,591

300,000

D. Hetherton

S.K.W. Lam

664,221

656,556

157,399

149,762

75,000

H.M. Lim (non-executive)*

M.J. Wright (non-executive)*

4,500

R.A. Elliott (non-executive)*

M J W Rushton
(appointed 13 April 2012)

388,702

379,459

33,778

n/a

The figures above include share holdings within the Group’s Share Incentive Plan.

*Brief biographies of the directors eligible and standing for election at the Annual General Meeting are set out below

David Gelber, Non Executive Chairman
David Gelber served as Group Chief Operating Officer of ICAP plc from 1994 to 2005 and previously held the position of
Chief Operating Officer of HSBC Global Markets. Prior to joining the Intercapital group, he held senior trading positions with
Citibank and Chemical Bank. His other directorships include IPGL (Intercapital Private Group Limited), Krupaco Finance (UK)
Limited, DDCAP Limited, Exotix Limited, Altus Resource Capital LLC, Castellain Capital LLP and eSeclinding Inc. He joined
Walker Crips Group plc as a non-executive director in January 2007 and was appointed Chairman in May 2007.

Hua Min Lim, Bsc(Hons), DIC, MSc, Non-Executive (Singapore)
Hua Min Lim was appointed as a non-executive director following the Phillip Group’s acquisition of a significant
shareholding in the Company. He is Chairman of Phillip Securities Pte Limited, a major stockbroker in Singapore, and
he is the principal shareholder of Phillip Group. He joined Phillip Securities Pte Limited in 1975 having previously held
senior positions in the Stock Exchange of Singapore and the Securities Research Institute. In 1997 he was appointed as
Chairman of the Stock Exchange of Singapore (SES) Review Committee on Capital Markets. Phillip Group has operations
in ten countries.

Martin Wright, Senior Independent Director, Non Executive
Martin Wright was appointed to the Board in July 1996 as a non-executive director. He is a partner of Speechly Bircham
LLP (Solicitors) and is a member of the Law Society. He is also a non-executive director of a number of private companies.

Robert Alan Elliott, FCA, Cert PFS, Non Executive Director
Robert Elliott is a retired Chartered Accountant, having joined Garbutt & Elliott in 1957, qualifying in 1963. After being
appointed as Partner in 1964, he developed specialist skills in negotiating corporate finance acquisitions, disposals and
mergers. He co-founded both G&E Investment Services Ltd and the London York group of companies. In May 2008 he
was appointed Chairman of the Audit Committee.

Report & Accounts 2013 | Walker Crips Group plc | 9

▪

tar

DIRECTORS’ REPORT
Year ended 31 March 2013

Supplier payment policy
The Company’s policy, which is also applied by the Group, is to establish terms of payment with suppliers prior to
transacting and to abide by the terms of payment. The aggregate amount owed to suppliers of the Company at 31
March 2013 represented 23 days (2012: 32 days) of purchases (based on the aggregate amount invoiced by suppliers
during the financial year).

Corporate, social, environment and community
The Social Responsibility and Safety Committee consists of two subsidiary company directors and other senior
managers, making recommendations to the Board on social, environmental and community issues.
Whilst recognising that the Group is a financial services organisation whose primary responsibility is to maximise
investment returns to clients in accordance with their contractual relationship and stated risk profile and investment
objectives, there are non-financial considerations which may affect the long-term value of the subsidiary companies
and close attention is paid to minimising their environmental impact.

General policies to improve the environment and staff welfare

▪
▪
▪
▪

▪
▪
▪
▪
▪

▪
▪

General policies to improve the environment and staff welfare
Staff are encouraged to travel on public transport through the availability of interest-free season ticket loans;
Secure parking spaces are provided to employees for bicycles;
Video and telephone conferencing facilities are now available to reduce the necessity of travelling to attend
internal meetings;
Increasing electronic storage of documents rather than retention of paper versions;
Electronic distribution of reports, contract notes, etc., to reduce paper consumption;
Recycling of waste wherever possible, including printer toner cartridges ;
All portable electronic appliances are safety tested every two years;
Old fluorescent light tubes are disposed of in the appropriate manner, as is all computer and other electrical
equipment;
Measures to increase security and staff safety have been implemented; and
WCG has adopted a ‘corporate’ Charity, currently “Room to Read”, and staff are involved in fundraising
activities to support this.

10 | Walker Crips Group plc | Report & Accounts 2013

DIRECTORS’ REPORT
Year ended 31 March 2013

Ethical responsibility
Our clients specify any ethical preferences that they have when we construct their investment portfolios or make
individual recommendations. We actively support the professional institutes and trade associations of which we are
members to promote a strong ethical code of conduct.

Employment policy
It is the Group’s policy to give appropriate consideration to applications for employment from disabled persons, having
proper regard to their particular aptitudes. For the purposes of training, career development and promotion, disabled staff,
including any who become disabled in the course of their employment, are treated on equal terms with other employees.

Health and safety policy
The Board has a policy of adopting procedures, appropriate to its activities, to monitor, maintain and, where relevant,
improve health and safety standards to safeguard the Group's staff.
None of the Company’s activities involve any significant health and safety risks. During the year there were no
injuries, illnesses or dangerous occurrences which needed to be reported under the Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations 1995.
Eligible employees can benefit from the Group’s Permanent Health Insurance Scheme in the event of long-term illness
preventing them from carrying out their function.

Political and charitable donations
The Group made no charitable donations during the year (2012: £50). No political donations were made during the
year (2012: £nil).

Ordinary and special business
Resolutions will be placed before the Annual General Meeting to confer authority on the Company to allot equity
securities of up to an aggregate nominal amount of £821,804 and to authorise and empower the Company to allot
equity securities.
The Companies Act 2006 permits a public company to purchase its own shares in accordance with powers contained in
its Articles of Association and with the authority of a resolution of shareholders. The directors believe that the Company
should be authorised to take advantage of these provisions and therefore, pursuant to the power contained in the
Company’s Articles of Association, it is intended to propose a special resolution at the forthcoming Annual General
Meeting to confer authority on the Company to purchase up to a maximum in aggregate of 10% of the ordinary shares
of 62/3p each in the share capital of the Company at a price or prices which will not be less than 62/3p and not be more
than 5% above the average of the middle market quotation derived from the London Stock Exchange Daily Official List
for the ten business days before the relevant purchase is made.
The authority was given at the last Annual General Meeting of the Company for a period expiring at the conclusion
of the next Annual General Meeting. It is the directors’ intention that a resolution for its renewal will be proposed
at each succeeding Annual General Meeting. The directors will only make use of the authority when satisfied that
it is in the interest of the Company to do so. Shareholders should note that any ordinary shares purchased by the
Company will either be cancelled and the number of ordinary shares in issue will accordingly be reduced or will be
held as Treasury Shares.
They may further note that the total number of warrants and options to subscribe for equity shares in the Company
that are outstanding as at 31 March 2013 is 1,215,750 share options (for further information refer to note 29 of the
financial statements). The proportion of issued share capital of the Company that this represents as at 31 March 2013
is 3.3%. If the Company used the full authority to buy back the shares under resolution 11 they would then represent
3.7% of the issued share capital of the Company.

Report & Accounts 2013 | Walker Crips Group plc | 11

DIRECTORS’ REPORT
Year ended 31 March 2013

Substantial shareholdings
As at 31 March 2013, the following interests, excluding those of directors, in excess of 3% of the ordinary share capital
of the Company were held:

Liontrust Investment Partners Limited

L.W.S. Lim

L.W.Y. Lim

L.W.J. Lim

M. J. Sunderland

W. H. Saunders

Number

Percentage Held

2,873,221

2,512,176

2,512,173

2,255,100

1,156,366

7.8

6.9

6.2

3.2

Pillar 3 disclosures
The Basel Capital Accord, issued by the Basel Committee on Banking Supervision, aims to improve the flexibility and
risk sensitivity of the existing Accord. The Accord consists of three mutually reinforcing pillars. Pillar 3 recommends
requirements aimed at enhancing market discipline through effective disclosure of information to market participants.
The disclosures can be found on the following website: www.wcgplc.co.uk

Auditor
Each of the persons who is 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/she ought to have taken as a director in order to make himself/herself
aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Deloitte LLP have expressed their willingness to continue in office as auditor of the Company and a resolution to
reappoint them will be proposed at the forthcoming Annual General Meeting.

By order of the Board.

R A FitzGerald FCA
Director
20 June 2013

12 | Walker Crips Group plc | Report & Accounts 2013

REPORT BY THE
DIRECTORS ON CORPORATE
GOVERNANCE MATTERS
Year ended 31 March 2013

The Company is committed to the Principles of Good Governance set out in Section 1 of the June 2006 FRC Combined
Code on Corporate Governance by complying with the Code of Best Practice. Further explanation of how the principles
have been applied is also set out below and, in connection with directors’ remuneration, in the report by the Board on
directors’ remuneration.

Compliance
With one exception, the Company has been in compliance with the code provisions set out in the Combined Code on
Corporate Governance issued by the Financial Conduct Authority. The exception is in regard to the period of appointment
within non-executive directors’ service contracts which are not for fixed periods as stated in code A7.2 (see below).

The Board of directors
The Board of directors currently consists of four executive and four non-executive directors. The full Board meets
regularly throughout the year, usually every alternate month and a minimum of five times a year.
The Board is provided with appropriate information on a timely basis to enable it to discharge its duties. It has a formal
schedule of matters reserved to it for decision making, including, inter alia, developing the future direction of the
Group's business, agreeing policies and procedures, approving material transactions, business risk reviews, budgets and
borrowings and monitoring the Group's progress. Decisions delegated to management are not specifically listed but
limited to £50,000 in value where financial commitments are necessary in the daily course of business and £100,000
in value for investment and capital projects. All subsidiary boards of directors include at least one main Board executive
director which serves as the link between operational decision making by both the board directors and management.
The roles of Chairman and Chief Executive, occupied by D. M. Gelber and R. A. FitzGerald FCA respectively, are
separated and the Board includes non-executive directors, of whom D.M. Gelber, R.A. Elliott FCA and M.J. Wright are
regarded as independent and the remaining directors believe they provide an objective viewpoint.
The Board has three established committees: the Audit Committee, the Nomination Committee and the Remuneration
Committee, all comprised entirely of non-executive directors.
Non-executive directors of the plc company are also directors of the boards of the four main operating subsidiary
companies which conduct regulated investment business.

Report & Accounts 2013 | Walker Crips Group plc | 13

REPORT BY THE DIRECTORS ON CORPORATE GOVERNANCE MATTERS
Year ended 31 March 2013

During the year, the directors, in their capacity as members of the Board / appropriate committee, attended the
following number of meetings:

Number of meetings

D. M. Gelber (non executive chairman)

R.A.FitzGerald (chief executive)

S.J. Bailey

S.K.W. Lam

H.M. Lim

M.J. Wright

R.A. Elliott

D. Hetherton

M.J.W.Rushton

Board

Remuneration
Committee
2

Audit
Committee
3

Nomination
Committee
1

n/a

The non-executive directors also serve and attend board meetings as directors of the main regulated subsidiary
companies, thereby playing an active part in decision-making and control at an operating level.
The Company’s procedures for ‘whistleblowing’, whereby colleagues may confidentially raise concerns about possible
improprieties in matters of financial reporting or other issues, has been reviewed by the Board and made available to
approved persons and staff.
A satisfactory evaluation of the effectiveness of the Board, its directors and committees has been conducted and
reviewed. This entailed an evaluation of the summarised results of a widely-used questionnaire being benchmarked
against the published results of a cross-section of quoted companies.
M. J. Wright, the senior independent director, has served on the Board for fifteen years since the Company’s full
listing on the London Stock Exchange. The firm of solicitors, Speechly Bircham LLP, of which he is a partner, provided
legal services to the group during the year totalling £284,000 (2012: £262,000). The Board values his continuing
contribution, particularly on legal matters, and has also determined that he is independent and would like him to
continue. He will, therefore, be put forward for re-election to the Board at each Annual General Meeting henceforth, in
accordance with the recommendations of the Higgs Report.

Nomination Committee
The committee consists of D.M. Gelber, M.J. Wright, R.A. Elliott and H.M. Lim. It considers and makes recommendations
to the Board for the appointment of directors. When considering possible candidates, the committee evaluates their skill,
knowledge, experience and in the case of non-executives, their independence and other commitments. The structure of
the Board and their collective experience and skill set are assessed on the appointment or departure of any director.
A Nomination Committee meeting was held during the year to discuss succession planning for the main board and key
senior positions at operating subsidiary level.

14 | Walker Crips Group plc | Report & Accounts 2013

REPORT BY THE DIRECTORS ON CORPORATE GOVERNANCE MATTERS
Year ended 31 March 2013

Audit Committee
During the year, the Audit Committee consisted of M.J. Wright, D.M. Gelber and R.A. Elliott FCA who is the Committee
Chairman. The Committee’s terms of reference include reviewing the scope and findings of the external audit, reviewing
the plan and findings of the internal audit function, assessing the effectiveness of the Company’s internal control
procedures and the reporting of results. The Company’s internal and external auditors and the executive directors
may and do attend committee meetings by invitation. The Committee has a discussion with the external auditor at
least once a year without executive directors being present, to ensure that there are no unresolved issues of concern.
The Audit Committee met three times during the course of the year and was fully attended. During the year, the Audit
Committee reviewed the cost effectiveness, objectivity and independence of the auditor. The auditor disclosed the
level of fees received in respect of the various services provided by their firm in addition to the audit during the year.
They confirmed to the Audit Committee that they did not believe that the level of non-audit fees had affected their
independence. The Audit Committee’s policy is to use the most appropriate advisers for non-audit work, taking account
of the need to maintain independence.
In August 2010, the Audit Committee approved the outsourcing of the internal audit function to a leading firm of
auditors, Smith & Williamson, whose experience in the financial services sector provides the Board with additional
assurance that an adequate control framework is in place.

Remuneration Committee
The Remuneration Committee consists of D. M. Gelber, H. M. Lim and its Chairman, M. J. Wright. The Committee is
responsible for agreeing the remuneration of the executive directors and other key personnel of the Company. The full
Board is responsible for agreeing the remuneration of the non-executive directors. The Chief Executive attends certain
parts of meetings of the Remuneration Committee by invitation. Further details of the Company’s policies on directors’
remuneration, service contracts and share options are given in the report by the Board on directors’ remuneration.
A staff profit share scheme which enables all employees to share directly in the future prosperity of the Group has been
in operation for several years. Accordingly, an amount of £nil (2012: £40,431) has been allocated to the scheme for
the operating loss making year being reported. However, in recognition of their efforts in helping to create and support
the asset management subsidiary (WCAM), which was sold realising a profit of £11.7 million so enabling shareholders
to receive two special dividends in 2012, a special bonus of £200,000 in total was awarded during the year to those
personnel who played a part in helping to create that asset.
An employee Share Incentive Plan incentivises employees to join with the Company in making regular joint purchases
of shares in the Company to be held in trust for a minimum of three years. The Share Incentive Plan replaces the
employee share option schemes previously in operation. Existing share options will remain exercisable over their life, up
to ten years from the date of grant.

Non-executive directors
Contrary to the recommendations of the Combined Code, non-executive directors’ contracts do not cover their
appointment for a specified period, because under the Articles of Association all directors are required to retire by
rotation and one third of the Board is required to seek re-election each year. Re-election is subject to shareholders’
approval. The terms and conditions of appointment of non-executive directors, as well as the Audit, Remuneration and
Nomination Committees, are available for inspection by any person at the Company’s registered office during normal
business hours and at the Annual General Meeting.

Executive directors
Executive directors have service contracts of varying lengths, but maximum compensation for loss of office is limited to
twelve months’ salary in all instances.
Directors’ emoluments are disclosed in the report by the Board on directors’ remuneration.

Report & Accounts 2013 | Walker Crips Group plc | 15

REPORT BY THE DIRECTORS ON CORPORATE GOVERNANCE MATTERS
Year ended 31 March 2013

The Management Committee and Business Risk Panel
The Board has appointed a Management Committee to assist in the day-to-day management of the Group. The
committee is, inter-alia, responsible for developing plans for implementing the strategy of the Group, advising on the
allocation of personnel and capital resources. The Business Risk Panel ensures that all new initiatives, projects and
products are formally assessed and evaluated for the degree of risk exposure and regulatory capital impact to the
Group so enabling risk strategies of elimination, mitigation or avoidance to be formulated.

Relations with shareholders
The Board recognises the importance of communications with shareholders. The Chairman's statement and Chief
Executive’s report in this report and accounts include a detailed review of the business and future developments.
The Board uses the Annual General Meeting to communicate with private and institutional investors and welcomes their
participation. The Chairman aims to ensure that all of the directors are available at Annual General Meetings to answer
questions. The proxy votes cast on each resolution proposed at general meetings are disclosed at those meetings.

Internal control
The Board acknowledges its responsibility for the Group’s system of internal control and has formalised the process
for its review of internal control (including financial, operational and compliance controls as well as risk management)
and defining the scope and frequency of reports to be received, both by the Board and the Audit Committee. There is
an ongoing process for identifying, evaluating and managing the significant risks faced by the Company and Group.
This process has been in operation throughout the year ended 31 March 2013 and up to the date of approval of the
annual report and accounts and is regularly reviewed by the Board and the Board is satisfied it accords with the Turnbull
guidance. Due to the size of the Company and Group there is a simple organisational and reporting structure. Financial
results and other information are regularly reported to the Board throughout the year. Operations are monitored closely.
The directors have reviewed the effectiveness of the Company’s system of internal control and consider that the
controls and procedures established are appropriate for the Company and Group. However, any system of internal
control can only provide reasonable, not absolute, assurance against material misstatement or loss.
The Group operates under a system of internal financial controls which have been developed and refined to meet its
current and future needs. These include but are not limited to:

▪
▪
▪
▪
▪

▪

the organisational structure and the delegation of authorities to operational management;
procedures for the review and authorisation of capital investments;
budgets and forecasts which are reviewed by the Board;
the reporting and review of financial results and other operating information;
accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Group’s
accounting records; and
financial and operating controls and procedures which are in place throughout the organisation and
monitored through various means including routine and special reviews by internal auditors.

Going concern
Having conducted detailed forecasts and appropriate stress-testing, taking account of possible adverse changes in
trading performance, the Board has sufficient grounds to believe the Group is well placed to manage its business risks
adequately and that it will be able to operate within the level of its current financing arrangements. Accordingly, the
Board continues to adopt the going concern basis for the preparation of the financial statements.

16 | Walker Crips Group plc | Report & Accounts 2013

STATEMENT OF
DIRECTORS’ RESPONSIBILITIES
Year ended 31 March 2013

The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
are required to prepare the group financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the parent
company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the accounts
unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or
loss of the company for that period.
In preparing the parent company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
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
company will continue in business.

▪
▪
▪

▪

In preparing the group financial statements, International Accounting Standard 1 requires that directors:

▪
▪

▪

properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable
and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to
enable users to understand the impact of particular transactions, other events and conditions on the entity's
financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company
and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and
detection of 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 United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.

Responsibility statement
We confirm that to the best of our knowledge:

▪

the financial statements, prepared in accordance with the relevant financial reporting framework, give a true
and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole; and
the management report, which is incorporated into the directors' report, includes a fair review of the
development and performance of the business and the position of the company and the undertakings
included in the consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face.

By order of the Board.

R A FitzGerald FCA, Director
20 June 2013

Report & Accounts 2013 | Walker Crips Group plc | 17

REPORT BY THE BOARD
ON DIRECTORS’ REMUNERATION
Year ended 31 March 2013

Introduction
This report has been prepared in accordance with Schedule 8 to the Accounting Regulations under the Companies
Act 2006. The report also meets the relevant requirements of the Listing Rules of the Financial Conduct Authority and
describes how the Board has applied the Principles of Good Governance relating to directors’ remuneration. As required
by the regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company
at which the financial statements will be received.
The regulations require the auditor to report to the Company’s members on certain parts of the directors’ remuneration
report and to state whether in their opinion that part of the report has been properly prepared in accordance with the
Companies Act 2006 (as amended by the Regulations). The report has therefore been divided into separate sections for
audited and unaudited information.

Unaudited information

Directors’ remuneration policy

▪

The Group has a policy of rewarding the executive board with a basic salary close to industry market rates
but taking account of the Group’s size in relation to its competitors. An integral element of the package of
emoluments will continue to be incentives, whether these be from a bonus linked to corporate or divisional
profitability or performance-related share options which will enable the directors to join with shareholders in
the share price performance of the Group. The policy supports effective risk management within the Group
through the management of activities and consideration of risks taken when assessing performance where
possible. In the Remuneration Committee’s view the policy does not encourage excessive risk taking that
exceeds tolerated risk levels of the Group or its risk appetite.

Where appropriate, long-term incentive plans have been introduced to ensure key personnel are properly incentivised
and motivated to add value to the group.
Non-executive directors receive fixed remuneration.

Remuneration Committee
The members of the Remuneration Committee are D. M. Gelber, H.M. Lim, and M.J. Wright. The Committee is
responsible for setting the remuneration and benefits of each executive director in accordance with the policy above.

Basic salary
During the year, two meetings were held by the Remuneration Committee which the Chief Executive was invited to
attend. The primary purpose of these meetings was to review annual salaries for the executive directors, the division of
the directors’ bonus pool and the approval of the Remuneration Policy of the group. No salary increases were awarded
in the year.

Share options
The Group’s policy to grant options to executive directors under Share Option Schemes established in 1996 has been
discontinued now that the schemes have expired. Existing share options will remain exercisable over their life up to ten
years from the date of grant.
On 1 September 2003 the Board decided that share options awarded to directors would be exercisable only if certain
performance criteria tailored to the individual were met. At that time S.J. Bailey, investment director, was awarded
300,000 share options which are exercisable only if unit trusts funds under management by his division have grown
to exceed between £20 and £30 million at the date of exercise depending on the year of exercise. S.K.W. Lam, Group
Managing Director, was awarded 75,000 share options in March 2004 which are exercisable if group overheads remain
below 65% to 75% of total revenue depending on the year of exercise.
.

18 | Walker Crips Group plc | Report & Accounts 2013

REPORT BY THE BOARD ON DIRECTORS’ REMUNERATION
Year ended 31 March 2013

Long Term Incentive Plan
Under the terms agreed with him as part of his recruitment, the Group’s Chief Investment Officer Mark Rushton (MR)
was given the right to participate in a long term incentive plan (LTIP). The terms of the LTIP are framed to entitle MR
to receive five percent of the growth in the value of the core businesses carried on in the Company’s subsidiary Walker
Crips Stockbrokers Limited (WCSB), calculated from 1 April 2012.
The LTIP operates through a new class of share in WCSB, designated as growth shares. The growth shares carry the
entitlement to growth in the value of the core businesses of WCSB from a base value of £2,000,000, calculated from 1
April 2012. MR is entitled to 5% of these shares. He will be the only holder of such shares apart from the Company.
If there is a sale of WCSB or a takeover of the Company, MR will be entitled and obliged to sell his shares. In the
absence of any such transaction, on 1 April 2018 (and on 1 April in each subsequent year up to and including 1
April 2022), MR will be entitled to require the Company to purchase one percent of the growth shares at fair value in
exchange for either cash or shares in the Company.
In the event that MR leaves the Group as good leaver (or in the event of his death) the shares would be offered for sale
at fair value. If he leaves as a bad leaver, his shares will be offered for sale at cost.
MR will be the sole participant in the LTIP and he first became eligible to participate in the LTIP on the date his
employment commenced with the Company being 1 February 2012.

Performance graph
The graph below shows a comparison between the Company’s Total Shareholder Return (TSR) performance as
compared with the companies in the FTSE Small Cap Index. The graph compares the value, by 31 March 2013, of £100
invested in Walker Crips Group plc on 31 March 2008 with the value of £100 invested in the FTSE Small Cap Index.
This Index has been chosen to give a comparison with the average returns that shareholders could have received by
investing in a range of other small UK public companies.

Walker Crips Group plc Total Shareholder Return Compared with FTSE Small Cap Index

%
R
S
T

d
e
t
s
e
v
n

0
0
1
£
f
o
e
u
a
v
e
v
i
t
a
u
m
u
C

140

120

100

2008

2009

2010

2011

2012

2013

Walker Crips Group plc

FTSE Small Cap

Pensions
There are no defined benefit Company pension schemes in operation. The Company contributes a percentage of the
executive directors’ basic salaries into personal pension arrangements of their choice. In addition, salary sacrifice may
be exercised in favour of additional pension contributions.

Report & Accounts 2013 | Walker Crips Group plc | 19

REPORT BY THE BOARD ON DIRECTORS’ REMUNERATION
Year ended 31 March 2013

Service contracts

Executive directors
The executive directors have entered into service agreements with the Company taking account of previous continuous
periods of service. The agreements are terminable on not less than six months’ notice in writing at any time (12
months in the case of notice given by the Company to R.A. FitzGerald) and provide private health care for the executive
director, his spouse and children under 24 under a scheme approved by the directors. All executive directors are now
included under ‘keyman’ insurance cover arranged by the Company.

Non-executive directors
D. M. Gelber was appointed as non-executive Chairman of the Company by a letter agreement dated 11 May 2007 for
a term commencing on 11 May 2007 of not less than two years and thereafter terminable by either party on at least
six months’ notice in writing or otherwise in accordance with the Company’s Articles of Association. His remuneration
is now a fee of £36,772 per annum plus reimbursement of other specific expenses incurred on behalf of the Company.
M.J. Wright has a letter of appointment dated 9 July 2000 and accepted on 10 July 2000 for a term of not less than
two years commencing on 9 July 2000 and terminable by either party on not less than three months’ notice in writing
or otherwise in accordance with the Company’s Articles of Association. His fees are now £21,000 plus VAT per annum
plus expenses payable to Speechly Bircham LLP quarterly in arrears.
H.M. Lim has no formal service agreement with and receives no remuneration from the Company.
R.A. Elliott was appointed as a non-executive director on 11 April 2005 by a letter agreement with a right for him to
resign immediately in accordance with the Company’s Articles of Association. The agreement also provides for Mr
Elliott’s re-election each year at the Company’s Annual General Meeting. His remuneration is now £21,013 per annum
plus expenses.

Audited information

Directors’ emoluments
The total amounts for directors’ remuneration and other benefits are shown below:

Emoluments

Company contributions to personal pension schemes

2013
£

2012
£

993,930

1,034,333

79,535

71,495

1,073,465

1,105,828

20 | Walker Crips Group plc | Report & Accounts 2013

REPORT BY THE BOARD ON DIRECTORS’ REMUNERATION
Year ended 31 March 2013

Directors’ emoluments (continued)

Fees/basic
salary

Taxable
benefits

Name of director

Bonus

65,000

63,680

81,000

65,000

162,872

2,943

5,253

162,872

120,384

1,971

1,800

150,000

3,370

50,000

36,772

21,013

Bonus taken
as Pension
Contribution

Personal
Pension
Contribution

Year ended
31 March
2013
Total

Year ended
31 March
2012
Total

18,208

17,411

266,434

368

11,401

21,647

69,301

257,244

208,831

10,500

213,870

173,012

554,041

167,137

154,206

36,772

21,013

36,548

20,884

659,166

10,084

324,680

18,208

61,327

1,073,465

1,105,828

21,000

20,500

Executive

R A FitzGerald

S J Bailey*

S K W Lam

D Hetherton

M J W Rushton
(appointed 13 April
2012)

Non-executive

H M Lim

M J Wright

D M Gelber

R A Elliott

Aggregate
emoluments

Fees paid to
third parties

Fees to third parties comprise amounts paid to Speechly Bircham LLP under an agreement to provide the Group with
the services of M.J. Wright as a non-executive director.
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares
in the Company granted to, or held by, the directors and their connected parties. Details of the options are as follows:

Name of
director

Exercise period
of option

Exercise
Price
£

1 April

2012 Granted Exercised Lapsed

S J Bailey*

Sep 2006 to Apr 2013

0.422

300,000

S K W Lam Mar 2007 to Mar 2014

0.492

75,000

375,000

Gains on
exercise
of share
options
£

31 March
2013

300,000

75,000

375,000

*S J Bailey resigned 12 April 2012

Report & Accounts 2013 | Walker Crips Group plc | 21

REPORT BY THE BOARD ON DIRECTORS' REMUNERATION
Year ended 31 March 2013

Directors’ emoluments (continued)
No options were granted to directors during the year. Exercise of certain options granted in prior years is subject to
attainment of appropriate performance related criteria. The market price of the ordinary shares at 31 March 2013 was
£0.34 (2012: £0.45) and the range during the year was £0.455 to £0.255 (2012: £0.515 to £0.40).

By order of the Board,

R A FitzGerald FCA
Director
20 June 2013

22 | Walker Crips Group plc | Report & Accounts 2013

INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WALKER CRIPS
GROUP PLC

We have audited the group financial statements of Walker Crips Group Plc for the year ended 31 March 2013 which
comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes
in Equity and the related notes 1 to 35. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
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, the directors are responsible for the preparation
of the group 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 group 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
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are appropriate to the group’s circumstances
and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates
made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial
and non-financial information in the annual report to identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material misstatements or inconsistencies we consider the
implications for our report.

Opinion on financial statements
In our opinion the group financial statements:

▪

▪
▪

give a true and fair view of the state of the group’s affairs as at 31 March 2013 and of its profit for the year
then ended;
have been properly prepared in accordance with IFRSs as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS
Regulation.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the group financial
statements are prepared is consistent with the group 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:

▪
▪

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.

Report & Accounts 2013 | Walker Crips Group plc | 23

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALKER CRIPS GROUP PLC
Year ended 31 March 2013

Other matter
We have reported separately on the parent company financial statements of Walker Crips Group plc for the year ended
31 March 2013 and on the information in the Directors’ Remuneration Report that is described as having been audited.

Oliver Grundy (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
20 June 2013

24 | Walker Crips Group plc | Report & Accounts 2013

CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2013

Continuing operations

Revenue

Commission payable

Gross Profit

Share of after tax profits of joint ventures

Administrative expenses - other

Administrative expenses - exceptional item

Total Administrative expenses

Operating (loss)/profit

Analysed as:
(Loss)/Profit before tax and exceptional item
Administrative expenses – exceptional item

Operating (loss)/profit

Gains and losses on disposal of investments

Gain on disposal of subsidiary undertaking

Unrealised gain on revaluation of investments

Goodwill impairment charges

Investment revenues

Finance costs

Profit before tax

Taxation

Profit for the year attributable to equity holders of the company

Earnings per share

Basic

Diluted

* Amounts have been restated explained further in Note 35

2013
£’000

20,372

(8,562)

Restated
2012
£’000

20,306

(5,735)

11,810

14,571

(12,841)

(13,779)*

(1,299)

(286)

(14,140)

(14,065)*

(2,323)

518*

(1,024)
(1,299)

(2,323)

(189)

11,700

828

(1,221)

313

(5)

9,103

9,153

25.21

24.39

804*
(286)

518*

(5)

559*

(278)*

281*

0.77p*

0.76p*

Notes

Report & Accounts 2013 | Walker Crips Group plc | 25

CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Year ended 31 March 2013

Profit/(loss) on revaluation of available-for-sale investments taken to equity

Deferred tax on (profit)/loss on available-for-sale investments

Notes

Deferred tax on share options

Net profit/(loss) recognised directly in equity

Profit for the year

2013
£’000

180

(35)

(2)

143

9,153

2012
£’000

(484)

138

(4)

(350)

281*

Total comprehensive income/(loss) for the year attributable to
equity holders of the company

9,296

(69)*

* Amounts have been restated explained further in Note 35

26 | Walker Crips Group plc | Report & Accounts 2013

CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
31 March 2013

Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investment in joint ventures
Available-for-sale investments

Current assets
Trade and other receivables
Trading investments
Deferred tax asset
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Current tax liabilities
Bank overdrafts
Shares to be issued

Net current assets

Net assets

Equity
Share capital
Share premium account
Own shares
Retained earnings
Revaluation reserve
Other reserves

Equity attributable to equity holders of the company

Notes

17
18
19
20
21

22
21
24
23

Group
2013
£’000

2,901
1,249
636
31
5,792

10,609

36,409
634
182
7,848

45,073

55,682

(35,776)
(175)
-
(226)
(36,177)

8,896

19,505

2,470
1,630
(312)
10,430
619
4,668

19,505

Restated
Group
2012
£’000

Restated
Group
1 April 2011
£’000

5,121
346
660
35
699

6,861

57,316
384
360*
1,335

59,395*

66,256*

(52,032)*
(391)
(407)
-
(52,830)*

6,565*

13,426*

2,470
1,626
(312)
4,498*
474
4,670

5,121
461
767
34
1,183

7,566

35,847
720
26
4,281

40,874

48,440

(33,438)*
(512)
-
-
(33,950)*

6,924*

14,490

2,470
1,626
(312)
5,212*
820
4,674

13,426*

14,490

The financial statements of Walker Crips Group plc (Company Registration No : 01432059) were approved by the board
of directors and authorised for issue on 20 June 2013.

Signed on behalf of the board of directors

R A FitzGerald FCA, Director
20 June 2013

* Amounts have been restated explained further in Note 35

Report & Accounts 2013 | Walker Crips Group plc | 27

CONSOLIDATED STATEMENT OF
CASH FLOWS
Year ended 31 March 2013

Notes

2013
£’000

2,413

231

(5)

(23)

2,616

(490)

(250)

3,236

5,451

(453)

7,521

(3,221)

(3,217)

6,920
928

7,848

7,848
-

7,848

2012
£’000

(1,959)

(5)

(592)

(2,530)

(195)

336

172

(995)

(3,353)
4,281

928

1,335
(407)

928

Operating activities
Cash generated by/(used) by operations

Interest received

Interest paid

Tax paid

Net cash generated/(used) by operating activities

Investing activities

Purchase of property, plant and equipment

Net (purchase)/sale of investments held for trading

Net sale of available for sale investments

Net proceeds on sale of subsidiary

Acquisition of businesses

Dividends received

Net cash generated by investing activities

Financing activities

Issue of new shares

Dividends paid

Net cash used in financing activities

Net increase/(decrease) in cash and cash equivalents
Net cash and cash equivalents at beginning of year

Net cash and cash equivalents at end of year

Cash and cash equivalents
Bank overdrafts

28 | Walker Crips Group plc | Report & Accounts 2013

CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
Year ended 31 March 2013

Called
up share
capital
£'000

Share
premium
£'000

Own
shares
held
£'000

Capital
Redemption
£'000

Other Revaluation
£'000
£'000

Retained
earnings
£'000

Total
Equity
£'000

Equity as at 31
March 2011

2,470

1,626

(312)

111

4,563

820

5,387*

14,665*

Restatement (Note 35)

(175)

Restated Equity
as at 31 March 2011

Revaluation of
investment at fair value

Deferred tax credit
to equity

Movement on deferred
tax on share options

Profit for the year

Restatement (Note 35)

Restated profit for the
year 2012

Dividends paid

Equity as at
31 March 2012

Revaluation of
investment at fair value

Deferred tax credit
to equity

Movement on deferred
tax on share options

Profit for the year

Dividends paid

Issue of shares on
exercise of options

Equity as at
31 March 2013

2,470

1,626

(312)

111

4,563

820

5,212

14,490*

(4)

(484)

138

440

(159)

281

(995)

(484)

138

(4)

440

(159)

281

(995)

2,470

1,626

(312)

111

4,559

474

4,498*

13,426*

(2)

180

(35)

180

(35)

(2)

9,153

(3,221)

2,470

1,630

(312)

111

4,557

619

10,430

19,505

* Amounts have been restated explained further in Note 35

Report & Accounts 2013 | Walker Crips Group plc | 29

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

1. General information
Walker Crips Group plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address
of the registered office is given on the inside back cover. The nature of the Group’s operations and its principal activities
are set out in note 4 and in the directors’ report on pages 7 to 12.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).
The financial statements have also been prepared in accordance with IFRSs adopted for use in the European Union and
therefore comply with Article 4 of the EU IAS Regulation. The financial statements are prepared on the historical cost
basis, except for the revaluation of certain financial instruments.
These financial statements are presented in pounds sterling because that is the currency of the primary economic
environment in which the Group operates.

Adoption of new and revised Standards
At the date of authorisation of these financial statements, the following relevant Standards and Interpretations which
have not been applied in these financial statements were in issue but not yet effective:
IFRS 9, ‘Financial instruments’ (effective from 1 January 2013). The standard contains two primary measurement
categories for financial assets: amortised costs and fair value. The standard eliminates the existing IAS 39 categories of
‘held to maturity’, ’available-for-sale’ and ‘loans and receivables’. The potential effect of this standard is currently being
evaluated but it is expected to have some impact not least on how assets and liabilities are presented in the financial
statements.
IFRS 12, ‘Disclosure of Interests in Other Entities’. The standard will impact the disclosure of interests the Group has
in other entities. The standard should allow users of financial statements to evaluate the nature of, and the risks
associated with the interests in other entities. This standard is being evaluated but it is not expected that it will have an
impact on the presentation of these financial statements.

30 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2. Significant accounting policies

Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 31 March 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.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured
at 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, plus any costs directly attributable to the
business combination.

Interests in joint ventures
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that
is subject to joint control; that is when the strategic financial and operating policy decisions relating to the activities
require the unanimous consent of the parties sharing control.
The Group’s share of the assets, liabilities, income and expenses of jointly controlled entities are accounted for in the
consolidated financial statements under the equity method.
Income from the sale or use of the Group’s share of output of jointly controlled assets, and its share of joint venture
expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/
from the Group and their amount can be measured accurately.

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 a subsidiary or jointly controlled entity at the date of acquisition.
Goodwill is initially recognised as an asset at cost and reviewed for impairment at least annually. Any impairment is
recognised immediately in profit or loss and is not subsequently reversed in future periods.
For the purpose of impairment testing, goodwill is allocated to each of the group’s cash-generating units expected to
benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested
for impairment annually, or more frequently when there is an indication that the unit may be impaired. On disposal of a
subsidiary or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP
amounts subject to being tested for impairment at that date.

Unit Trust Management Contracts

Intangible assets
(a)
Client Lists
Acquired client lists and businesses generating revenue from clients and investment managers are capitalised based on
the expected future cashflows to be generated over the lives of the assets, discounted at an appropriate discount rate.
These costs are amortised on a straight line basis over their expected useful lives of three to ten years.
(b)
Acquired Unit Trust Management Contracts are capitalised as intangible assets based on an estimate of the expected
future cashflows that those contracts will generate over their useful lives of ten years. These costs are amortised on a
straight line basis over their expected useful lives.
At each statement of financial position date, the Group reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if
any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.

Shares to be issued
The Company includes the sum which has been issued and allotted just after the period end to personnel associated
with the Company in order to meet contractual commitments given as part of the recent expansion of its client base.

Report & Accounts 2013 | Walker Crips Group plc | 31

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2. Significant accounting policies (continued)

Revenue recognition
Revenue is measured at fair value of the consideration received or receivable and represents gross commissions, interest
receivable and fees in the course of ordinary investment business, net of discounts, VAT and sales-related taxes. Gross
commissions on stockbroking activities are recognised on those transactions whose bargain date falls within the
financial year. Interest is recognised as it accrues in respect of the financial year. Fees earned from managing client
deposits and administering ISAs are accrued evenly over the period to which they relate. Fees in respect of financial
services activities and corporate finance activities are accrued evenly over the period to which they relate, unless fees are
contingent on a particular event, in which case they are recognised to the extent that they are earned. Dividend income
from investments is recognised when the shareholders’ rights to receive payment have been established.
Operating expenses and other charges are provided for in full up to the statement of financial position date on an
accruals basis.

Foreign currencies
The individual financial statements of each group company are presented in pounds sterling, which is the functional
currency of the company and the presentation currency of the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the
transactions. At each statement of financial position date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Exchange differences arising on the settlement of monetary items, and on the re-translation of monetary items, are
included in the consolidated income statement for the period.

Property, plant and equipment
Fixtures and equipment are stated at historical cost less accumulated depreciation and provision for any impairment.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the
straight-line method on the following bases:
Computer hardware
Computer software
Leasehold improvements
Furniture and equipment
The gain or loss 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 income.

331/3% per annum on cost
between 20% and 331/3% per annum on cost
Over the term of the lease
331/3% per annum on cost

Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit,
and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period that the liability is settled or the asset
is realised. Deferred tax is charged or credited directly to equity in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends
to settle its current tax assets and liabilities on a net basis.

32 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

Financial Assets and Liabilities
Financial assets and liabilities are recognised on the consolidated statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
Trade receivables
Trade receivables are predominantly settled within normal market cycles. Trade receivables are recognised initially at fair
value and subsequently at amortised cost using the effective interest method, less any impairment.
Investments
Investments are recognised and de-recognised on a trade date basis where a purchase or sale of an investment is
under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at cost, including transaction costs, or at fair value, depending on the nature of
the instrument held.
Investments are classified as either held-for-trading or available-for-sale, and are measured at subsequent reporting
dates at fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value
are included in net profit or loss for the period. Depending on the nature of the instrument held, gains and losses
arising from changes in fair value of available-for -sale investments are recognised either in net profit or loss or directly
in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss
previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit
or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
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 of the group after
deducting all of its liabilities.
Trade payables
Trade payables are recognised at fair value.
Bank overdrafts
Interest-bearing bank overdrafts are recorded at an amount equal to the proceeds received. Finance charges are
accounted for on an accrual basis in profit or loss using the effective interest rate method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Provisions
Provisions are recognised when the group has a present obligation 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
expenditure required to settle the obligation at the statement of financial position date, and are discounted to present
value where the effect is material.

Share-based payments
The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with the transitional provisions,
IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January
2008. The Group has also early adopted IFRIC 11 from 7 November 2002.
The Group issues equity-settled share-based payments to certain employees and other personnel. Equity-settled
share-based payments 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 Group’s estimate of shares that will eventually vest and
adjusted for the effects of non market-based vesting conditions.
Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Report & Accounts 2013 | Walker Crips Group plc | 33

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2. Significant accounting policies (continued)

Pension costs
The Group contributes to defined contribution personal pension schemes for selected employees. The contribution rate
is based on annual salary and the amount is charged to the income statement on an accruals basis.

Leases
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not
made on such a basis. Benefits received as an incentive to enter into an operating lease are also spread on a straight
line basis over the lease term.

Going Concern
The Group’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Chairman’s Statement and Chief Executive’s report on page 2 to 4.
In addition, note 26 to the financial statements includes details of risk management objectives, policies and processes
for managing its capital.
The Group has healthy financial resources together with a long established, well proven and tested business model. As
a consequence, the directors believe that the Group is well placed to manage its business risks successfully despite the
current difficult climate.
After conducting enquiries, the directors believe that the Company and the Group have adequate resources to continue
in existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.

3. Key sources of estimation uncertainty

Impairment of goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to
which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows
expected to arise from the cash-generating unit and a discount rate of 12% has been adopted in order to calculate
present value. The carrying amount of goodwill at the balance sheet date was £2.9 million (2012: £5.1 million).

Other intangible assets
Acquired client lists are capitalised on the basis of net discounted expected future cashflow over the life of the client
list. On acquisition of the London York group on 11 April 2005, the directors estimated such a useful life to be 10 years,
based on historical rates of client retention and revenue generation of the acquired group in relation to the client base.
Additionally, unit trust management contracts were acquired at the same time, valued at £240,000 being 2% of the net
asset value of the unit trust funds under management for which a useful life of up to 10 years has also been estimated.
During the year the group acquired several investment managers and the business of their clients previously managed
by a competitor stockbroking firm. By assessing the historic rates of client retention, the ages and succession plans of
the investment managers who manage the clients and the contractual incentives of the investment managers, the
Directors consider a life of up to 10 years to be both appropriate and in line with peers.

Valuation of Investments in Available for Sale Assets
The fair valuation of the Company’s investment in Euroclear plc is based upon the Company’s share of net assets
(discounted for market factors) and the directors’ assessment of marketability. The fair valuation of the Company’s
investment in Liontrust Asset Management plc, by way of a holding of Convertible Unsecured 6% Loan Stock, is based
upon a combination of the value of the option component as well as the host instrument.

Recoverability of funds under the Special Administration Regime
The Group has receivables due from a company currently subject to the Special Administration Regime which governs
the resolution arrangements to ensure minimum disruption to financial markets as a result of a firm’s failure.
Based on interim payments and other information received to date, the Board has, since the year end, contracted to
sell the remaining balances outstanding, without a material impact on the financial or trading position of the Group.
To be prudent, an appropriate provision of £77,000 remained in place at the year end, to cover the cost of debt
assignment, which has largely been offset by favourable foreign exchange movements since October 2011 on the
total original debt of $2.1m.

34 | Walker Crips Group plc | Report & Accounts 2013

4. Revenue
An analysis of the Group’s revenue is as follows:

Investment Management

Corporate finance

Wealth Management

Fund Management

Revenue

Net investment revenue (Note 11)

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2013
£’000

2012
£’000

16,957

14,005

309

2,590

516

20,372

308

274

2,062

3,965

20,306

Total Income

20,680

20,347

Report & Accounts 2013 | Walker Crips Group plc | 35

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

5. Segmental analysis
For management purposes the Group is currently organised into four operating divisions – Investment Management,
Corporate Finance, Wealth Management (previously referred to as Financial Services) and Fund Management. These
divisions, all of which conduct business in the United Kingdom only, are the basis on which the Group reports its primary
segment information.

2013

Revenue

External sales

Result
Segment result

Unallocated corporate expenses

Operating loss

Gains and losses on disposal of
investments
Gain on disposal of subsidiary
undertaking
Unrealised gain on revaluation of
investments
Goodwill impairment charges
Investment revenues
Finance costs

Profit before tax
Tax

Profit after tax

Other information

Capital additions
Depreciation

Statement of Financial Position
Assets
Segment assets

Unallocated corporate assets

Consolidated total assets

Liabilities
Segment liabilities

Unallocated corporate liabilities

Consolidated total liabilities

Investment
Management
£’000

Corporate
Finance
£’000

Wealth
Management
£’000

Fund
Management
£’000

Consolidated
Year ended
31 March 2013
£’000

16,957

309

2,590

516

20,372

(1,223)

(48)

444

(787)

(1,536)

(2,323)

(189)

11,700

828

(1,221)
313
(5)

9,103
50

9,153

470
509

15
16

27
9

6
6

517
541

39,310

417

1,591

197

41,515

14,167

55,682

34,302

517

157

35,010

1,167

36,177

36 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

Investment
Management
£’000

Corporate
Finance
£’000

Financial
services
£’000

Fund
Management
£’000

Consolidated
Year ended
31 March 2012
£’000

14,005

274

2,062

3,965

20,306

(721)*

(94)

213

2,359

1,757*

(1,239)

518*

46
(5)

559*
(278)*

281*

172
272

8
12

10
10

5
8

195
302

56,929

355

1,168

1,154

59,606

6,544

66,150

51,372*

402

549

52,378*

346

52,724*

5. Segmental analysis (continued)

2012

Revenue

External sales

Result

Segment result

Unallocated corporate expenses

Operating profit

Investment revenues
Finance costs

Profit before tax
Tax

Profit after tax

Other information

Capital additions
Depreciation

Statement of Financial Position
Assets
Segment assets

Unallocated corporate assets

Consolidated total assets

Liabilities
Segment liabilities

Unallocated corporate liabilities

Consolidated total liabilities

* Amounts have been restated explained further in Note 35

Report & Accounts 2013 | Walker Crips Group plc | 37

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

6. Commission payable
Commission payable comprises:

To authorised external agents

To approved persons

2013
£’000

8,500

8,562

2012
£’000

5,672

5,735

7. Administrative expenses – exceptional item
As a result of its materiality the directors decided to disclose certain amounts separately in order to present results which
are not distorted by significant non- recurring events.

Leasehold improvements written off

Discretionary bonuses

Legal and professional costs on one-off transactions

2013
£’000

228

486

585

1,299

2012
£’000

286

The Group has re-located a large part of its operations to more cost effective premises. Leasehold improvement costs
incurred for the old lease premises have therefore been written down during the period to a level more accurately
reflecting their value in use. These costs amounted to £228,000 during the period.
Also, in recognition of their efforts in helping to create and support the asset management subsidiary (WCAM), which
was sold realising a profit of £11.7 million, a special bonus of £486,000 in total was awarded for the year to specific
staff members and executive directors who played a part in helping to create the value of that asset.
Significant legal and professional fees were incurred in the transfer of a number of investment managers and their
clients as well as receiving advice on several other potential corporate transactions. These amounted to £585,000 in the
period and due to their size and one-off nature, the Board has decided to disclose them separately.
In the prior period, up to the 31 March 2012, the Company had incurred substantial non-success based legal &
professional fees and other costs relating to the disposal of WCAM.

8. Gains and Losses on disposal of investments
Net gains and Losses comprise:

(Loss) on sale of investment in Liontrust shares

Gain on partial disposal of investment in Liontrust CULS

2013
£’000

(579)

390

(189)

2012
£’000

During the period the Group disposed of its entire holding of 1,851,967 Liontrust ordinary shares (received as part
consideration on the disposal of WCAM), incurring a loss on disposal of £579,000. In addition, conversion and disposal
of a part of the holding of Liontrust Convertible Unsecured Loan Stock yielded a profit of £390,000. Due to its level of
materiality and one-off nature, the Board has decided to disclose these items separately.

38 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

9. Gain on disposal of subsidiary undertaking
On 12 April 2012, the Group completed the disposal of its subsidiary WCAM to Liontrust Asset Management plc (follow-
ing FSA and shareholder approval).

10. Goodwill impairment charges
Given the difficulties experienced generally in global markets, and the continuing negative impact on the trading per-
formance of some of the Group’s business units, the Board has decided to write down the Goodwill associated with the
reduction in the cash generative performance of the stockbroking and corporate finance businesses, the latter having
been sold after year end on 31 May 2013.

11. Investment revenues and finance costs
Net investment revenue comprises:

Investment Revenue

Interest on bank deposits / fixed income securities

Dividends from equity investment

Finance costs

Interest on bank overdrafts

Net investment revenue (Note 4)

2013
£’000

2012
£’000

286

313

(5)

308

(5)

Report & Accounts 2013 | Walker Crips Group plc | 39

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

12. Profit for the year
Profit for the year on continuing operations has been arrived at after charging:

Depreciation of property plant and equipment (see note 16)

Amortisation of intangibles (see note 15)

Staff costs (see note 13)

Auditor’s remuneration

Lease payment

A more detailed analysis of auditor's remuneration is provided below:

Audit services
Fees payable to the Company’s auditor for the audit of the
Company’s annual accounts
The audit of the Company’s subsidiaries pursuant to legislation

Non Audit services
Reported under AAF 01/06
Fees payable for interim profits review in April 2012 pursuant
to regulatory requirements
FCA Client assets reporting

2013
£’000

541

197

7,673

164

1,215

2013
£’000

119

164

100

2012
£’000

122

146

2012
£’000

302

115

8,434

146

854

100

A description of the work of the Audit Committee is set out in the Report by the directors on corporate governance
matters on page 13 and includes an explanation on how the auditor’s objectivity and independence is safeguarded
when non-audit services are provided by the auditor.

13. Staff costs
Particulars of employee costs (including directors) are as shown below:

Employee costs during the year amounted to:

Wages and salaries

Social security costs

Other costs

2013
£’000

6,263

752

658

7,673

2012
£’000

7,068

809

557

8,434

40 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

13. Staff costs (continued)
Staff costs do not include commissions payable mainly to self employed account executives, as these costs are included
in total commissions payable to approved persons disclosed in note 6. At the end of the year there were 57 self-employed
account executives who were approved persons of the Group (2012 : 49).
The monthly average number of staff employed during the year was:

2013
Number

2012
Number

Executive directors

Approved persons

Other staff

142

14. Tax
The tax (credit)/charge is based on the profit for the year of continuing operations and comprises:

UK Corporation tax at 24% (2012: 26%)

Deferred tax

Overseas tax

Adjustment in respect of prior years

2013
£’000

176

(229)

(1)

(50)

133

2012
£’000

691

(412)*

(4)

278*

Corporation tax is calculated at 24% (2012: 26%) of the estimated assessable profit for the year.

Report & Accounts 2013 | Walker Crips Group plc | 41

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

14. Tax (continued)
The credit for the year can be reconciled to the profit per the income statement as follows:

Profit on ordinary activities before tax

Tax on profit on ordinary activities at standard UK corporation tax rate of 24%
(2012: 26%)

Effects of:

Small company rate differences

Expenses not deductible for tax purposes

Exempt chargeable gains

Prior year adjustment

Amortisation of intangible assets

Overseas tax

Other

* Amounts have been restated explained further in Note 35.

15. Dividends
Amounts recognised as distributions to equity holders in the period:

Final dividend for the year ended 31 March 2012 of 0.9p
(2011: 1.8p) per share

Interim dividend for the year ended 31 March 2013 of 0.47p
(2012: 0.94p) per share

Special interim dividend for the year ended 31 March 2013 of 4.5p
(2012: nil) per share

Further special interim dividend for the year ended 31 March 2013 of 3p
(2012: nil) per share

Proposed final dividend for the year ended 31 March 2013 of 0.9p
(2012: 0.9p) per share

2013
£’000

9,103

2,185

(1)

207

(2,757)

(2)

321

(7)

(50)

Restated
2012
£’000

559

145*

(8)

111

(2)

(1)*

278*

2013
£’000

2012
£’000

327

171

1,634

1,089

3,221

333

654

341

995

334

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements.

42 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

16. Earnings per share
The calculation of basic earnings per share for continuing operations is based on the post-tax profit for the financial
year of £9,153,000 (2012: £281,000) and on 36,305,572 (2012: 36,301,187) ordinary shares of 62/3p, being the
weighted average number of ordinary shares in issue during the year.
The effect of options granted would be to reduce the reported earnings per share. The calculation of diluted earnings
per share is based on 37,525,275 (2012: 37,101,553) ordinary shares, being the weighted average number of ordinary
shares in issue during the period adjusted for the dilutive effect of potential ordinary shares.
The calculation of the basic and diluted earnings per share is based on the following data:

Earnings

Earnings for the purpose of basic earnings per share being net profit
attributable to equity holders of the parent

Earnings for the purposes of diluted earnings per share

2013
£’000

9,153

2012
£’000

281*

Number of shares

2013

2012

Weighted average number of ordinary shares for the purposes of basic
earnings per share

36,305,572

36,301,187

Effect of dilutive potential ordinary shares:
Share option schemes

Weighted average number of ordinary shares for the purposes of diluted
earnings per share

1,219,703

800,366

37,525,275

37,101,553

This produced unadjusted basic earnings per share of 25.21p (2012: 0.77p*) and diluted unadjusted earnings per share
of 24.39p (2012: 0.76p*).

* Amounts have been restated explained further in Note 35.

Report & Accounts 2013 | Walker Crips Group plc | 43

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

17. Goodwill

Cost

At 1 April 2011

At 1 April 2012

At 31 March 2013

Accumulated impairment losses

At 1 April 2011

At 1 April 2012

At 31 March 2013

Carrying amount

At 31 March 2013

At 31 March 2012

£’000

5,569

448

999

1,221

2,668

2,901

5,121

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are
expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of
goodwill has been allocated as follows:

Unit trust funds (a single CGU)

Southard Gilbey McNish & Co. (a single CGU)

Keith Bayley Rogers & Co. (comprising several CGUs)

London York (comprising several CGUs)

2013
£’000

2,901

2012
£’000

2,526

2,901

5,569

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might
be impaired.
The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the
value in use calculations are those regarding the discount rates of 12%, growth rates of 3% and expected changes
to revenues and costs during the period. Management estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to the CGUs.
In addition, valuations of comparable businesses listed on public markets are also a useful guide in forming a judge-
ment on the carrying value of investments and related goodwill. Underlying tangible net worth is also considered when
assessing the carrying value of investments. Under both methods of evaluation there is material headroom below the
level needed to make an impairment charge.

44 | Walker Crips Group plc | Report & Accounts 2013

18. Other intangible assets

Cost

At 1 April 2011

At 1 April 2012

Additions in the year

At 31 March 2013

Amortisation

At 1 April 2011

Charge for the year

At 1 April 2012

Charge for the year

At 31 March 2013

Carrying amount

At 31 March 2013

At 31 March 2012

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

Unit Trust
Management
Contracts
£’000

Client lists
£’000

Total
£’000

240

144

168

192

911

1,100

2,011

546

637

173

810

1,201

274

1,151

1,100

2,251

690

115

805

197

1,002

1,249

346

The intangible assets are both amortised over their estimated useful lives. ‘Unit trust management contracts’ are
amortised over 10 years and ‘Client lists’ are amortised over 3-10 years.

Report & Accounts 2013 | Walker Crips Group plc | 45

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

19. Property, plant and equipment

Leasehold
improvements,
furniture and
equipment
£’000

Computer
software
£’000

Computer
hardware
£’000

Total
£’000

1,732

1,746

(56)

368

2,058

1,253

131

1,384

(56)

379

1,707

351

362

1,955

119

2,074

2,166

1,732

119

1,851

103

1,954

212

223

1,609

1,671

1,728

1,544

1,596

1,655

5,296

195

5,491

(56)

517

5,952

4,529

302

4,831

(56)

541

5,316

636

660

Cost

At 1 April 2011

Additions

At 1 April 2012

Write down

Additions

At 31 March 2013

Accumulated depreciation

At 1 April 2011

Charge for the year

At 1 April 2012

Eliminated on write down of assets

Charge for the year

At 31 March 2013

Carrying amount

At 31 March 2013

At 31 March 2012

46 | Walker Crips Group plc | Report & Accounts 2013

20. Interest in joint ventures

Aggregated amounts relating to joint ventures

Total assets

Total liabilities

Net assets

Group’s share of joint venture’s net assets

Group’s share of:

Revenue

Profit for the period

21. Investments

Available-for-sale investments

Fair value

At 1 April 2011

Movement on revaluation

At 1 April 2012

Additions in the year

Disposals in the year

Movement on revaluation:

Recognised in comprehensive income

Recognised in the income statement

At 31 March 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2013
£’000

2012
£’000

(4)

2013
£’000

Equity
investments
£’000

Convertible
Unsecured
Loan Stock
£’000

1,183

(484)

699

125

824

5,270

(1,185)

828

4,968

(7)

2012
£’000

Total
£’000

1,183

(484)

699

5,270

(1,185)

180

828

5,792

Equity investments comprise the Company’s investment in Euroclear plc. The fair value is based upon the Company’s
share of net assets (discounted for market factors) and the directors’ assessment of marketability. The gain on
revaluation of £125,416 is recognised in equity.

Report & Accounts 2013 | Walker Crips Group plc | 47

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

21. Investments (continued)
Convertible unsecured loan stock comprises the Company’s investment in Liontrust Asset Management plc, by way
of a holding of Convertible Unsecured 6% Loan Stock. The Company acquired 4,000,000 £1 Convertible Unsecured
6% Loan Stock and disposed of 900,000 £1 Convertible Unsecured 6% Loan Stock during the year. The fair value is
based upon a combination of the value of the option component and the host instrument. The fair value of the option
component has been calculated using a binomial option model and the fair value of the debt host instrument has been
calculated using a discounted cashflow model, applying a discount rate of 9%.
The following inputs have been applied in calculating the fair value of the equity conversion option:
Volatility
Risk free rate
Dividend yield
Placing discount
£827,850 of the gain on revaluation is attributable to the option component and is recognised in the income
statement. £54,900 of the gain is attributable to the debt host instrument and is recognised in equity.
The total gain on revaluation recognised in equity amounts to £180,316 (2012: £484,000)

36%
1.01%
0%
3%

Trading investments

Fair value

2013
£’000

634

2012
£’000

384

Trading investments represent investments in equity securities and bonds that present the group with opportunity for
return through dividend income, interest and trading gains. The fair values of these securities are based on quoted
market prices.
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

▪

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities. The trading investments fall within this category;
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The Group does not hold financial instruments in this category; and
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs). The Group’s Available-for-sale
investments fall within this category.

The opening fair value of Available-for-sale investments which are Level 3 financial assets is reconciled to its closing
balance by a fair value adjustment of £180,316 (2012: £484,000) recognised in comprehensive income.

22. Other financial assets

Trade and other receivables

Amounts falling due within one year:

2013
£’000

2012
£’000

Due from clients, brokers and recognised stock exchanges

32,353

54,911

Other debtors

Prepayments and accrued income

1,661

2,395

759

1,646

36,409

57,316

48 | Walker Crips Group plc | Report & Accounts 2013

23. Cash and cash equivalents

Short term cash deposits held at bank, repayable on demand with penalty

Cash deposits held at bank, repayable on demand without penalty

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2013
£’000

6,175

1,673

7,848

2012
£’000

683

652

1,335

Cash and cash equivalents does not include deposits of client monies placed by the Group with banks and building
societies in segregated client bank accounts (free money and settlement accounts). All such deposits are designated
by the banks and building societies as clients' funds and are not available to satisfy any liabilities of the Group. The
amount of such net deposits which are not included in the consolidated statement of financial position at 31 March
2013 was £157,000,000 (2012: £119,000,000).

24. Deferred tax asset/(liability)

At 1 April 2012

Use of loss brought forward

Credit to the income statement

Charge to the Statement of
Comprehensive Income

At 31 March 2013

Short term
timing
differences &
other
£’000

Capital
Allowances
£’000

488*

(370)

190

(2)

306

Revaluation
£’000

(150)

(35)

(185)

Total
£’000

360*

(370)

229

(37)

182

In accordance with IAS 12, at the year end date, deferred tax on share options of £nil (2012: £3,000) has been recognised
and included in ‘short term timing differences and other’ above.

25. Bank overdrafts

Bank overdrafts

2013
£’000

2012
£’000

407

The borrowings of the prior year were repayable on demand and were all denominated in sterling. Letters of set-off are
in place allowing the bank to utilise the Group’s funds in credit to satisfy overdraft repayment.

Report & Accounts 2013 | Walker Crips Group plc | 49

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

26. Financial Instruments and Risk Profile

Financial Risk Management
Procedures and controls are in place to identify, assess and ultimately control the financial risks faced by the Group
arising from its use of financial instruments. Steps are taken to mitigate identified risks with established and effective
procedures and controls, efficient systems and the adequate training of staff.
The Group’s risk appetite, along with the procedures and controls mentioned above, are laid out in the Group’s Internal
Capital Adequacy Assessment Process document, prepared in accordance with the requirements of the Financial
Conduct Authority (FCA).
The overall risk appetite for the Group is considered by management to be low, despite operating in a market place
where financial risk is inherent in the core businesses of investment management and financial services.
The Group considers its financial risks arising from its use of financial instruments to fall into three main categories:
(i)
(ii)
(iii)
Financial Risk management is a central part of the organisation’s strategic management which recognises that an
effective risk management programme can increase a business’ chances of success and reduce the possibility of failure.
Continual assessment, monitoring and updating of procedures and benchmarks are all essential parts of the Group’s
risk management strategy.

credit risk;
liquidity risk; and
market risk

(i) Credit risk
The Group’s credit risk is primarily attributable to its trade receivables or pledged collateral which is the risk that a client,
market counterparty or recognised stock exchange will be unable to pay amounts in full when due. Significant changes
in the economy or a particular sector could result in losses that are different from those that the Group has provided for
at the yearend date. The amounts presented in the statement of financial position are net of allowances for doubtful
receivables.
The Board is responsible for oversight of the Group’s credit risk. The Group accepts a limited exposure to credit risk, but
aims to mitigate and minimise the risk through various methods.

50 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

26. Financial Instruments and Risk Profile (continued)

Trade receivables (includes settlement balances)
Settlement risk arises in any situation where a payment of cash or transfer of a security is made in the expectation of a
corresponding delivery of a security or receipt of cash. Settlement balances arise with clients, market counterparties and
recognised stock exchanges.
In the vast majority of cases, control of the stock purchased will remain with the Group until client monetary balances
are fully settled. Free deliveries, in the limited circumstances where they arise, are carefully monitored.
Where there is an absence of securities collateral, clients are usually required to hold sufficient funds in their managed
deposit account prior to the trade being conducted. Holding significant amounts of client money helps the Group to
manage credit risks arising with clients. Many of our clients also hold significant amounts of stock and other securities
in our Nominee subsidiary company, providing additional security should a specific transaction fail to be settled and the
proceeds of such securities disposed of can be used to settle all outstanding obligations.
In addition, the client side of settlement balances are normally fully guaranteed by our commission-sharing approved
persons who conduct transactions and manage the relationships with our mutual clients.
Exposures to market counterparties also arise in the settlement of trades or when collateral is placed with them to cover
open trading positions. Market counterparties are usually other FCA regulated firms and are considered creditworthy,
some reliance being placed on the fact that other regulated firms would be required to meet the stringent capital ad-
equacy requirements of the FCA.

Maximum Exposure to Credit Risk:

Cash

Trade receivables

Analysis of trade receivables:

Neither past due nor impaired

Past due but not impaired

2013
£’000

7,848

32,353

40,201

2013
£’000

28,805

2,886

376

286

2012
£’000

1,335

54,911

56,246

2012
£’000

52,236

2,217

240

218

32,353

54,911

< 30 Days

> 30 Days

> 3 Months

The tables above represents a worst case scenario of credit risk exposure to the Group at 31 March 2013 and 2012
without taking account of any collateral held which acts as a credit mitigant. The exposures set out above are based on
net carrying amounts as reported in the statement of financial position.

Report & Accounts 2013 | Walker Crips Group plc | 51

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

26. Financial Instruments and Risk Profile (continued)

Concentration of credit risk
The Group has a material portion of credit risk exposure to Liontrust Asset Management plc by way of the holding of
£3,100,000 million Convertible Loan Stock currently valued at £4,968,000 on the balance sheet. Otherwise the Group
has no other concentration of credit risk, with exposure spread over a large number of market counterparties and
clients. Large exposures are monitored daily in line with FCA requirements.
In addition, daily risk management procedures to actively monitor disproportionately large trades by a customer or
market counterparty are in place. The financial standing, pattern of trading, type and size of security or instrument
traded are amongst the factors taken into consideration.

(ii) Liquidity Risk
Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities
when they fall due.
Historically, sufficient underlying cash has been prevalent in the business for many years as the Group is normally cash-
generative. The risk of unexpected large cash outflows could arise where large amounts are being settled daily of which
only a fraction forms the commission earned by the company. This could be due to clients settling late or bad deliveries
to the market or CREST, also resulting in a payment delay from the market side.
The Group’s policy with regard to liquidity risk is to carefully monitor balance sheet structure and borrowing limits, including:

▪
▪
▪

monitoring of cash positions on a daily basis;
exercising strict control over the timely settlement of trade debtors; and
exercising strict control over the timely settlement of market debtors and creditors.

The Group holds its cash and cash equivalents spread across a number of highly rated financial institutions. All cash and cash
equivalents are short term highly liquid investments that are readily convertible to known amounts of cash without penalty.
All the regulated Group subsidiaries are subject to the provisions of FCA Liquidity standards if they are within the scope
of the rules in the FCA Handbook chapter BIPRU 12.
The tables below analyse the Group’s future cash outflows based on the remaining period to the contractual maturity date.

2013

Bank overdrafts

Trade and Other Payables

2012

Bank overdrafts

Trade and Other Payables

52 | Walker Crips Group plc | Report & Accounts 2013

Less than 1 year
£’000

35,776

Less than 1 year
£’000

407

52,032

52,439

Total
£’000

35,776

Total
£’000

407

52,032

52,439

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

26. Financial Instruments and Risk Profile (continued)

(iii) Market Risk

Interest Rate Risk
Interest rate risk is the risk that future cash flows from a financial instrument will fluctuate because of market interest
rates. The group is exposed to some interest rate risk as it holds excess funds in cash and short term deposits.
If market interest rates had been 100 basis points lower throughout the year, with all other variables held constant, pre-
tax profit for the year would have been £51,000 (2012: £26,000) lower.

Foreign Exchange Risk
The Group is primarily focused on conducting business in the UK markets and does not hold significant positions other
than in sterling.
Foreign exchange transactions are occasionally conducted on an agency basis to aid the settlement of clients’ overseas
transactions.
The Group does not consider itself to have any material exposure to foreign currency risk and, therefore, no sensitivity
analysis is presented.

Equity Risk
Available-for-sale investments
The Group holds investments in Euroclear plc shares and Liontrust Asset Management plc Convertible Unsecured Loan
Stock as available-for-sale investments in non-current assets. The valuation of these investments is based on either
the discounted net assets of the underlying entity or the underlying share price and volatility, which may be subject to
some fluctuation from year to year. At 31 March 2013, a 5% fall in the net assets or share price and volatility of the
underlying entities would result in a post-tax impact on equity of £31,744 (2012: £26,562) in relation to Euroclear plc
and £248,350 in relation to Liontrust Asset Management plc.
Trading Investments
The Group manages a relatively small principal book under the overall direction of the Private Clients Director, the
total permitted maximum value of open positions being set by the Business Risk Panel (BRP). The portfolio is actively
managed on a daily basis.
The Group designs and distributes structured investments issued by major credit institutions, through intermediary
clients to sophisticated investors via the Walker Crips Structured Investments (WCSI) team. To secure advantageous
pricing for clients and mitigate risk on group profit margin, WCSI commits to buy various structured investments, as
principal, at the time of product launches and periodically within the launch period which typically lasts six weeks.
The maximum value of these exposures is determined by the BRP and is monitored on a daily basis. These exposures
are in most cases fully mitigated by the sale of WCSI plan units to clients, prior to the plan launch date. The group, on
occasion, holds a small residual principal position in relation to these instruments, where the securities were unsold as
plan units during the marketing period. These exposures are subsequently reduced usually within one or two business
days or as soon as is expedient.
Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. The Group is exposed to price risk through its holdings of investment securities, as outlined above, which
are reported at their fair value.
At 31 March 2013, the fair value of securities recognised on the statement of financial position was £634,000
(2012: £384,000).
A 10% fall in global markets would, in isolation, result in a post-tax reduction in the income statement of £48,184
(2012: £29,184).

Report & Accounts 2013 | Walker Crips Group plc | 53

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

26. Financial Instruments and Risk Profile (continued)

Capital Risk Management
The Group has an Internal Capital Adequacy Assessment Process (commonly known as the ICAAP), which it uses to
manage regulatory capital. The risk profile of the business is assessed and stress-tested in order to determine whether
any additional capital is needed.
The Group adheres to the Capital Requirement Directive (CRD) which requires the daily monitoring of the excess of
Capital Resources over the Capital Resources Requirement. The Group’s Capital Resources surplus is reported to the
Board on a monthly basis.
The Finance department also provides details of Pillar 1 and 2 requirements in its reports to the Chief Executive Officer,
any major variations being highlighted. Significant business initiatives, for instance an acquisition, can then be modelled
through the ICAAP process to determine the impact on the level of regulatory capital.
The Group uses the basic indicator approach for operational risk to calculate its Pillar 1 requirements.
Compliance with FCA regulatory requirements was maintained throughout the year.
As at 31 March 2013, the Group had total equity capital of £19,505,000 (2012 Restated: £13,426,000*), available for
use within its operations and to meet its regulatory capital requirements as laid down by the FCA.
Fair value of financial instruments
The fair values of the Group’s financial assets and liabilities are not materially different from their carrying values.

27. Other financial liabilities

Trade and other payables

Amounts owed to clients, brokers and recognised stock exchanges

Other creditors

Accruals and deferred income

2013
£’000

30,153

2,766

2,857

Restated
2012
£’000

48,248

2,542*

1,242

35,776

52,032*

Trade creditors and accruals comprise amounts outstanding for investment-related transactions, to customers or
counterparties, and ongoing costs. The average credit period taken for purchases in relation to costs is 23 days
(2012: 32 days).

The directors consider that the carrying amount of trade payables approximates to their fair value.

* Amounts have been restated explained further in Note 35.

54 | Walker Crips Group plc | Report & Accounts 2013

28. Called up share capital

Called up, allotted and fully paid

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

2013
£’000

2012
£’000

37,063,187 (2012: 37,051,187) ordinary shares of 62/3p each

2,470

During the year the Company allotted 12,000 ordinary shares (2012: nil) in connection with the exercise of share options.
The Company received £5,060 consideration during the year in respect of the exercise of share options (2012: £nil).
The company holds 750,000 of its own shares, purchased for total cash consideration of £312,000. In line with the
principles of IAS 32 these treasury shares have been deducted from equity. No gain or loss has been recognised in the
profit and loss account in relation to these shares.
The Company has granted options to certain directors, employees and account executives in respect of the following shares:

Number of
shares subject to
option

Exercisable period of option

Ordinary shares of 62/3p each

510,000

September 2006 to September 2013

75,000 March 2007 to March 2014

Ordinary shares of 62/3p each

630,750

June 2008 to June 2015

Exercise price
£

0.422

0.492

0.780

1,215,750

Report & Accounts 2013 | Walker Crips Group plc | 55

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

29. Share-based payments

Share options
The company has granted market-priced share options to directors, employees and other approved persons. The
vesting period is generally three years subject to the satisfaction of performance conditions relating to real EPS growth.
Further details of the options and performance conditions are set out in the Report by the Board on Directors’
Remuneration on pages 18 to 22. The options expire if they remain unexercised after the exercise period has expired.
Furthermore, options are forfeited if the option holder leaves the company before the options vest. The options are
equity settled.

Outstanding at beginning of year

Forfeited/lapsed during the year

Exercised during the year

Outstanding at the end of the year

Exercisable at the end of the year

2013

Options

1,254,750

(27,000)

(12,000)

1,215,750

Weighted
average
exercise price
(in £)

0.61

0.78

0.42

0.61

Options

1,322,436

(67,686)

1,254,750

2012

Weighted
average
exercise price
(in £)

0.61

0.47

0.61

12,000 share options were exercised during the year. The options outstanding at 31 March 2013 had a weighted
average remaining contractual life of 1.0 years (2012: 2.0 years).
The Company recognised total expenses of £nil and £nil related to equity-settled share-based payment transactions
in 2013 and 2012 respectively. A complete listing of all options series outstanding as at 31 March 2013 is included in
Note 28.

30. Cash generated from operations

Operating (loss)/profit for the year

Adjustments for:

Amortisation of intangibles

Share of joint venture income

Depreciation

Decrease/(Increase) in debtors

(Decrease)/Increase in creditors

Net cash inflow/(outflow)

* Amounts have been restated explained further in Note 35.

56 | Walker Crips Group plc | Report & Accounts 2013

2013
£’000

(2,323)

197

(7)

541

2012
£’000

518*

115

(12)

302

20,907

(21,476)

(16,902)

2,413

18,594*

(1,959)

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

31. Financial commitments

Capital commitments
At the end of the year, there were capital commitments of £249,000 (2012: £78,000) contracted but not provided for
and £nil (2012: £78,000) capital commitments authorised but not contracted for.

Lease commitments
The minimum lease payments under non-cancellable operating leases fall due as follows:

Within 1 year

Within 2 - 5 years

2013
£’000

508

1,357

2012
£’000

639

32. Related parties
Directors, employees, related parties and their spouses have dealt on standard commercial terms with the Group. The
commission earned by the Group through such dealings is as follows:

Commissions received from directors, employees, approved persons and
their spouses.

2013
£’000

122

2012
£’000

159

Other related parties include Speechly Bircham LLP, of which M.J. Wright, non-executive director, is a partner. Speechly
Bircham LLP provides certain legal services to the Group on normal commercial terms and the amount paid and
expensed during the year was £284,000 (2012: £262,000).
In addition, commission of £5,000 (2012: £19,000) was earned by the Group from Phillip Securities (HK) Limited
(a Phillip Brokerage Pte Limited company, where H M Lim is a director) having dealt on standard commercial terms.
Additionally, some custody services are provided by Phillip Securities Pte Ltd (in Singapore where H M Lim is a director)
again all on standard commercial terms.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are accordingly not disclosed.
Remuneration of the directors who are the key management personnel of the Group are disclosed fully in the Report by
the Board on Directors’ Remuneration.

Report & Accounts 2013 | Walker Crips Group plc | 57

NOTES TO THE ACCOUNTS
Year ended 31 March 2013

33. Subsidiaries and associates

Group

Trading subsidiaries

Country of
incorporation

Principal activity

Class and percentage
of shares held

Keith Bayley Rogers & Co. Limited

United Kingdom

Corporate Finance

Ordinary shares 100%

Walker Crips Stockbrokers Limited

United Kingdom

Investment Management

Ordinary shares 100%

London York Fund Managers Limited

United Kingdom

Management services
company

Ordinary shares 100%

Walker Crips Wealth Management Limited

United Kingdom

Financial Services advice

Ordinary shares 100%

Ebor Trustees Limited

United Kingdom

Pensions Management

Ordinary shares 100%

Non-trading subsidiaries

Walker Crips Financial Services Limited

United Kingdom

Financial Services

Ordinary shares 100%

G & E Investment Services Limited

United Kingdom

Holding company

Ordinary shares 100%

Ebor Pensions Management Limited

United Kingdom

Dormant Company

Ordinary shares 100%

Monkgate Nominees Limited

United Kingdom

Dormant Company

Ordinary shares 100%

Investorlink Limited

United Kingdom

Agency Stockbroking

Ordinary shares 100%

Southard Gilbey, McNish & Co Limited

United Kingdom

Agency Stockbroking

Ordinary shares 100%

W.B. Nominees Limited

United Kingdom

Nominee Company

Ordinary shares 100%

WCWB (PEP) Nominees Limited

United Kingdom

Nominee Company

Ordinary shares 100%

WCWB (ISA) Nominees Limited

United Kingdom

Nominee Company

Ordinary shares 100%

WCWB Nominees Limited

United Kingdom

Nominee Company

Ordinary shares 100%

Walker Crips Investment Management
Limited (formerly Walker Crips Asset
Management Limited)

Jointly controlled entities

United Kingdom

Dormant Company

Ordinary shares 100%

JWPCreers Wealth Management Limited

United Kingdom

Financial Services advice

Ordinary shares 50%

34. Subsequent event
On 31 May 2013 all of the conditions relating to the completion of the disposal of the entire issued share capital of
our wholly-owned subsidiary, Keith Bayley Rogers & Co. Limited (KBR), including the approval of the Financial Conduct
Authority of the change in control of KBR, have been satisfied.
In view of the regulatory approval after the balance sheet date, the subsidiary was not classified as ‘held for sale’ at the
balance sheet date, and hence was included in ‘continuing operations’.

35. Restatement
Due to a misinterpretation of guidance regarding the basis of its calculation of tariff data submitted to the Financial
Conduct Authority used to determine the Financial Services Compensation Scheme levy for the company's regulated
subsidiary, Walker Crips Stockbrokers Limited, for the years to 31 March 2011 and 31 March 2012, the Company has
made adjustments for these material underpayments of £441,000 in these financial statements as follows:

Year ended
31 March 2011
31 March 2012

£231,000
£210,000

The net impact after tax on equity reserves of these adjustments is £334,000.

58 | Walker Crips Group plc | Report & Accounts 2013

INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WALKER CRIPS
GROUP PLC

We have audited the parent company financial statements of Walker Crips Group plc for the year ended 31 March 2013
which comprise the Parent Company Balance Sheet and the related notes 36 to 48. The financial reporting framework
that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United
Kingdom 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, the directors are responsible for the preparation of
the parent company 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 parent company 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
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud
or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we
read all the financial and non-financial information in the annual report to identify material inconsistencies with the
audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we
consider the implications for our report.
Opinion on financial statements
In our opinion the parent company financial statements:

▪
▪
▪

give a true and fair view of the state of the parent company’s affairs as at 31 March 2013;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
▪

the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006; and
the information given in the Directors’ Report for the financial year for which the financial statements are
prepared is consistent with the parent company financial statements.

▪

Report & Accounts 2013 | Walker Crips Group plc | 59

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALKER CRIPS GROUP PLC
Year ended 31 March 2013

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 and the part of the Report by the Board on Directors’ Remuneration
to be audited are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Other matter
We have reported separately on the group financial statements of Walker Crips Group plc for the year ended 31 March 2013.

Oliver Grundy (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
20 June 2013

60 | Walker Crips Group plc | Report & Accounts 2013

COMPANY BALANCE SHEET
31 March 2013

Fixed assets

Tangible

Intangible

Investments

Current assets

Debtors

Cash at bank and in hand

Creditors: amounts falling due within one year

Other Creditors

Shares to be issued

Net current assets/(liabilities)

Total assets less current liabilities

Net assets

Capital and reserves

Called up share capital

Share premium account

Own shares held

Profit and loss account

Revaluation reserve

Other reserves

Equity shareholders’ funds

Notes

2013
£’000

2012
£’000

266

921

19,313

20,500

4,011

4,099

(1,570)

(226)

(1,796)

2,303

22,803

2,470

1,630

(312)

13,728

619

4,668

338

14,218

14,556

115

116

(346)

(230)

14,326

2,470

1,626

(312)

5,400

474

4,668

22,803

14,326

The financial statements of Walker Crips Group plc (Company Registration No: 01432059) were approved by the board
of directors and authorised for issue on 20 June 2013.
Signed on behalf of the board of directors.

R A FitzGerald FCA, Director
20 June 2013

Report & Accounts 2013 | Walker Crips Group plc | 61

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

36. Significant accounting policies
The separate financial statements of the Company are presented as required by the Companies Act 2006. They
have been prepared under the historical cost convention modified for the revaluation of certain investments and in
accordance with applicable United Kingdom Accounting Standards and laws.
The principal accounting policies have been summarised below. They have all been applied consistently throughout the
year and the preceding year.

Tangible fixed assets
Fixtures and equipment are stated at historical cost less accumulated depreciation and provision for any impairment.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the
straight-line method on the following bases:
Computer hardware
Computer software
Leasehold improvements
Furniture and equipment
The gain or loss 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 income.

331/3% per annum on cost
between 20% and 331/3% per annum on cost
over the term of the lease
331/3% per annum on cost

Client Lists

Unit Trust Management Contracts

Intangibles
(a)
Acquired client lists and businesses generating revenue from clients and investment managers are capitalised based on
the expected future cashflows to be generated over the lives of the assets, discounted at an appropriate discount rate.
These costs are amortised on a straight line basis over their expected useful lives of ten years.
(b)
Acquired Unit Trust Management Contracts are capitalised as intangible assets based on an estimate of the expected
future cashflows that those contracts will generate over their useful lives of ten years. These costs are amortised on a
straight line basis over their expected useful lives.
At each statement of financial position date, the Company reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the Company estimates the
recoverable amount of the cash-generating unit to which the asset belongs.

62 | Walker Crips Group plc | Report & Accounts 2013

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

36. Significant accounting policies (continued)

Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid or recovered
using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Current tax
charges arising on the realisation of revaluation gains, recognised in the statement of total recognised gains and losses,
are also recorded in this statement.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet
date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in
the future have occurred at the balance sheet date.
A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available
evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted. Deferred tax is not recognised when fixed assets are
revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss
expected to arise on sale has been recognised in the financial statements. Deferred tax assets and liabilities are not
discounted.

Investments – available-for-sale
Investments are recognised and derecognised on a trade date basis where a purchase or sale of an investment is
under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at cost, including transaction costs, or at fair value, depending on the nature of
the instrument held.
Investments are classified as available-for-sale, and are measured at subsequent reporting dates at fair value. Where
securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or
loss for the period. Depending on the nature of the instrument held, gains and losses arising from changes in fair value
of available-for-sale investments are recognised either in net profit and loss or directly in equity, until the security is
disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity
is included in the net profit or loss for the period. Impairment losses recognised in profit or loss for equity investments
classified as available-for-sale are not subsequently reversed through profit or loss.

Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

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 of the group after
deducting all of its liabilities.

Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Share-based payments
The company issues equity-settled share-based payments to certain Group employees and other personnel. Equity-
settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions)
at the date of grant.
Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
For employees and account executives of a subsidiary of the Company, the share-based payment is accounted for as
a capital contribution in the respective subsidiary. The subsidiary will then take a charge to its income statement in
respect of the share based payment.

Report & Accounts 2013 | Walker Crips Group plc | 63

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

36. Significant accounting policies (continued)

Valuation of Available for Sale Investments
The fair valuation of the Company’s investment in Euroclear plc is based upon the Company’s share of net assets
(discounted for market factors) and the directors’ assessment of marketability. The fair valuation of the Company’s
investment in Liontrust Asset Management plc, by way of a holding of Convertible Unsecured 6% Loan Stock, is based
upon a combination of the value of the option component as well as the host instrument.

Shares to be issued
The Company has recognised as a liability the sum which has been issued and allotted just after the period end
to personnel associated with the Company in order to meet contractual commitments given as part of the recent
expansion of its client base.

Financial Instruments
The Company has adopted FRS25: Financial Instruments: Presentation and FRS26: Financial Instruments: Recognition
and Measurement. Disclosures equivalent to that required under FRS 29 are given in the consolidated Group accounts,
which are publicly available, the Company is exempt from the disclosures required by FRS 29 in its own accounts.

Going Concern
After conducting enquiries, the directors believe that the Company has adequate resources to continue in existence
for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial
statements. The Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Chairman’s Statement and Chief Executive’s report on pages 2 to 6.

37. Profit for the year
As permitted by section 230 of the Companies Act 2006 the company has elected not to present its own profit and loss
account for the year. Walker Crips Group plc reported a profit for the financial year of £9,153,000 (2012: restated profit
of £281,000*).
An amount of £11,000 (2012: £10,000) related to the auditor’s remuneration for audit services to the Company.

38. Tangible fixed assets

Cost
At 1 April 2012

Additions

At 31 March 2013

Depreciation
At 1 April 2012

Charge for the year

At 31 March 2013

Net book value
At 31 March 2013

At 31 March 2012

Leasehold
improvements,
furniture and
equipment
£’000

Computer
software
£’000

Computer
hardware
£’000

1,388

275

1,663

1,050

347

1,397

266

338

1,218

1,097

Total
£’000

3,703

275

3,778

3,365

347

3,712

266

338

64 | Walker Crips Group plc | Report & Accounts 2013

39. Fixed Asset Investments

Subsidiary Undertakings

Available for sale investments, at fair value

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

2013
£’000

13,521

5,792

19,313

2012
£’000

13,519

699

14,218

Available-for-sale investments consist of two investments. The first is one of 1,809 Euroclear plc shares. In previous
years the directors estimated the value of this holding based largely on the Group’s share of net assets. Given that a
number of similar financial institutions are currently valued by the stock market below their net asset value, the Direc-
tors feel it prudent and appropriate to more accurately estimate the value of this holding by additional reference to the
discounts to book value prevailing amongst comparable financial institutions.
Secondly, the Company also has an investment in Liontrust Asset Management plc, by way of a holding of Convertible
Unsecured 6% Loan Stock. The Company acquired 4,000,000 £1 Convertible Unsecured 6% Loan Stock and disposed of
900,000 £1 Convertible Unsecured 6% Loan Stock during the year.
A complete list of subsidiary undertakings can be found in note 33 to the Group accounts.

40. Debtors

Amounts due from subsidiary undertakings

Deferred tax asset (see note 41)

Prepayments and accrued income

Other debtors

41. Deferred tax (liability)/asset

At 1 April

Tax losses utilised as group relief

Deferred tax credit to equity

Credit to the income statement

At 31 March

2013
£’000

2012
£’000

2013
£’000

(170)

(35)

(150)

115

2012
£’000

(43)

(249)

138

172

Report & Accounts 2013 | Walker Crips Group plc | 65

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

42. Creditors

Accruals and deferred income

Amounts due to subsidiary undertakings

Amount due to personnel under recruitment contracts

Deferred tax liability (see note 41)

Current tax liability

43. Shares to be issued

Amount due to personnel under recruitment contracts

2013
£’000

623

478

205

150

114

2012
£’000

346

1,570

346

2013
£’000

226

2012
£’000

44. Fair value disclosures
The fair value of the Company’s financial assets and liabilities is not materially different to their carrying value in the
balance sheet.
The fair value of available-for-sale investments, which comprise 1,809 shares in unlisted Euroclear plc was determined
with reference to the issuing entity’s net asset value per share discounted appropriately (see note 39).
The fair value of the second investment, £3.1m of Convertible Unsecured Loan Stock in Liontrust Asset Management
plc, is based upon a combination of the value of the option component and the host instrument. The fair value of the
option component has been calculated using a binomial option model and the fair value of the debt host instrument
has been calculated using a discounted cashflow model, applying a discount rate of 9%.
The following inputs have been applied in calculating the fair value of the equity conversion option:
Volatility
Risk free rate
Dividend yield
Placing discount

36%
1.01%
0%
3%

45. Financial commitments

Capital commitments
At the end of the year, there were capital commitments of £234,000 (2012: £nil) contracted but not provided for and
£nil (2012: £nil) capital commitments authorised but not contracted for.
Lease commitments
The annual commitments under non-cancellable operating leases fall due as follows:

within 1 year

within 2 - 5 years

66 | Walker Crips Group plc | Report & Accounts 2013

2013
£’000

492

1,357

2012
£’000

536

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

46. Related party transactions
The Company has taken advantage of the exemption given by paragraph 3 of FRS 8 not to disclose transactions and
balances with its subsidiaries or investees of the group qualifying as related parties.

47 . Called up share capital

Called up, allotted and fully paid

2013
£’000

2012
£’000

37,063,187 (2012: 37,051,187) ordinary shares of 62/3p each

2,470

During the year the Company allotted 12,000 ordinary shares (2012: nil) in connection with the exercise of share options.
The Company received £5,060 cash consideration during the year in respect of the exercise of share options (2012: £nil).
The company holds 750,000 of its own shares, purchased for total cash consideration of £312,000. In line with the
principles of IAS 32 these treasury shares have been deducted from equity. No gain or loss has been recognised in the
profit and loss account in relation to these shares.
The Company has granted options to certain directors, employees and account executives in respect of the following shares:

Ordinary shares of 62/3p each

Ordinary shares of 62/3p each
Ordinary shares of 62/3p each

Number of
shares subject
to option

Exercisable period of option

510,000

September 2006 to September 2013

75,000 March 2007 to March 2014

630,750

June 2008 to June 2015

Exercise price
£

0.422

0.492

0.780

1,215,750

Report & Accounts 2013 | Walker Crips Group plc | 67

NOTES TO THE COMPANY ACCOUNTS
Year ended 31 March 2013

48. Reconciliation of movements in shareholders’ funds

Called
up share
capital
£'000

Share
premium
£'000

Own
shares
held
£'000

Other Revaluation
£'000
£'000

Profit
and loss
account
£'000

Total
Equity
£'000

As at 31 March 2011

2,470

1,626

(312)

4,668

820

5,407

14,679

Revaluation of investment at
fair value

Deferred tax credit to equity

Profit for the year

Dividends paid

(484)

138

988

(995)

(484)

138

988

(995)

As at 31 March 2012

2,470

1,626

(312)

4,668

474

5,400

14,326

Revaluation of investment at
fair value

Deferred tax credit to equity

Profit for the year

Share options exercised in year

Dividends paid

180

(35)

180

(35)

11,549

(3,221)

4
(3,221)

As at 31 March 2013

2,470

1,630

(312)

4,668

619

13,728

22,803

68 | Walker Crips Group plc | Report & Accounts 2013

NOTICE OF ANNUAL
GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Walker Crips Group plc (“WCG” or the “Company”) will be held at
the South Place Hotel, 3 South Place, London, EC2M 2AF on 19 July 2013 at 11.00 a.m. for the following purposes:
As Ordinary Business
To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions:

1.
2.
3.
4.
5.
6.
7.
8.

To receive and adopt the Directors’ report and audited financial statements for the year ended 31 March 2013.
To approve the Directors’ remuneration report for the year ended 31 March 2013.
To declare a final dividend of 0.9p per ordinary share for the year ended 31 March 2013.
To re-appoint as a director Mr. Martin Wright.
To re-appoint as a director Mr. Robert Elliott.
To re-appoint as a director Mr. David Gelber.
To re-appoint as a director Mr. Hua Min Lim.
To re-appoint Deloitte LLP as auditors and to authorise the Directors to fix their remuneration.

As Special Business
To consider and, if thought fit, to pass the following resolution which will be proposed as an ordinary resolution:
9.

That the authority and power conferred upon the Directors to allot shares or to grant rights to subscribe for
or to convert any security into shares in accordance with Article 12 of the Company’s Articles of Association
shall apply until the earlier of the conclusion of the next Annual General Meeting of the Company or the date
falling 15 months from the date of the passing of this resolution and for that period the Section 551 Amount
(as defined in Article 12(B)) shall be £821,804 (equivalent to one third of the Company’s issued share capital
(excluding treasury shares) as at the date of this notice). All previous authorities pursuant to Article 12(B) are
revoked, subject to Article 12(D).

Report & Accounts 2013 | Walker Crips Group plc | 69

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

To consider, and if thought fit, pass the following resolutions which will be proposed as special resolutions:
10.

That, subject to the passing of Resolution 9, the authority and power conferred upon the Directors to allot
equity securities for cash in accordance with Article 12 of the Company’s Articles of Association shall apply
until the earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15
months from the date of the passing of this resolution and for that period the Section 561 Amount (as defined
in Article 12(C)) shall be £251,541 (equivalent to 10% of the issued ordinary share capital of the Company
as at the date of this notice). All previous authorities pursuant to Article 12(C) are revoked, subject to Article
12(D).

11.

That the Company be and is hereby granted pursuant to section 701 of the Act general and unconditional
authority to make market purchases (within the meaning of section 693 of the Companies Act 2006) on the
London Stock Exchange of ordinary shares of 62/3p each in the capital of the Company (“Ordinary Shares”)
provided that:

b)
c)

the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is limited to
10% of the Company’s issued share capital then in issue;
the minimum price which may be paid for any Ordinary Shares is 62/3p per Ordinary Share;
the maximum price (exclusive of expenses) which may be paid for any Ordinary Shares is not more
than 5% above the average of the middle market quotations for the Ordinary Shares (as derived from
the London Stock Exchange Daily Official List) for the 10 business days before the purchase is made;
the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of
the Company or the date falling 15 months from the date of the passing of this resolution; and
the Company may make a contract or contracts to purchase Ordinary Shares under the authority hereby
conferred prior to the expiry of such authority which will or may be executed wholly or partly after the
expiry of such authority, and may make a purchase of Ordinary Shares pursuant to any such contract
or contracts. This resolution shall confer on the Directors all rights for the Company to make any such
market purchase of the Company’s own shares as are required under the terms of Article 11(B).

By order of the Board.

David J Hall DipPFS FMAAT ACOI ASI
Secretary
20 June 2013

70 | Walker Crips Group plc | Report & Accounts 2013

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

NOTES ON RESOLUTIONS

The following paragraphs explain, in summary, the Resolutions to be proposed at the Meeting.

Resolution 1: Receipt of the 2013 Report and Accounts
The Directors of the Company must present their report and the annual accounts to the Meeting and shareholders may
raise any questions on the report and accounts under this resolution.

Resolution 2: Approval of the 2013 Remuneration Report
The Remuneration Report for the year ended 31 March 2013 has been prepared and is laid before the Meeting for
approval by shareholders in accordance with section 439 of the Companies Act 2006. The vote is advisory and does not
affect the actual remuneration paid to any individual Director. You can find the full Remuneration Report in the Annual
Report 2013.

Resolution 3: Final dividend
Shareholders are being asked in Resolution 3 to approve a final dividend of 0.9p per ordinary share for the year ended
31 March 2013. If you approve the recommended final dividend, this will be paid on 26 July 2013 to all ordinary
shareholders who were on the register of members at the close of business on 28 June 2013.

Resolutions 4 to 7: Reappointment of Directors
The Company’s Articles of Association require that at each annual general meeting, directors who were in office at the
time of the previous two annual general meetings and who have not been elected or re-elected in that period must
retire by rotation. A retiring Director is eligible for re-appointment. This year, the only Director retiring in this manner
is Mr David Gelber, who is seeking re-appointment. In addition, Mr Martin Wright and Mr Hua Min Lim are retiring
because each of them have been Non-executive Directors for more than nine years and Mr Robert Elliott is retiring as it
is a condition of his letter of appointment as a Non-executive Director that he retires at each annual general meeting.
Mr Wright, Mr Lim and Mr Elliott are seeking re-appointment. The biographies of the Directors eligible and standing for
re-appointment at the Meeting are set out on in the Annual Report.

Resolution 8: Reappointment of auditors and authority for the Directors to agree the Auditors’ remuneration
The Company is required to appoint auditors at each general meeting at which accounts are laid before the Company,
to hold office until the conclusion of the next annual general meeting. This resolution on the Audit Committee’s
recommendation, proposes the reappointment of Deloitte LLP as auditors of the Company.
The resolution also authorises the Directors, in accordance with standard practice, to set the remuneration of the
auditors. In accordance with its terms of reference, the Audit Committee will approve the terms of engagement and the
level of audit fees payable by the Company to the auditors and recommend them to the Board.

Resolution 9: Renewal of the Directors’ authority to allot shares
Resolution will be proposed before the Meeting to confer authority on the Directors to allot equity securities of up to
an aggregate nominal amount of £821,804 (being one third of the Company’s issued share capital, excluding treasury
shares, as at 20 June 2013). This resolution, which is an ordinary resolution, will replace the authority given to the
Directors at the last annual general meeting on 20 July 2012.
750,000 shares are held in treasury as at 20 June 2013 (representing approximately 2.03% of the Company’s issued
share capital (excluding treasury shares) on that date).
The Directors have no present intention to issue new ordinary shares. However, the Directors consider it prudent to
maintain the flexibility to take advantage of business opportunities that this authority provides.
This authority will expire on the next annual general meeting of the Company or the date falling 15 months from the
date of the passing of the resolution, whichever is the earlier.

Report & Accounts 2013 | Walker Crips Group plc | 71

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

Resolution 10: Renewal of the Directors’ authority to disapply pre-emption rights
Resolution will be proposed before the Meeting to confer authority on the Directors to allot equity securities for cash up
to an aggregate nominal amount of £251,541 (being 10% of the Company’s issued share capital, including treasury
shares, as at 20 June 2013) as if section 561(1) of the Companies Act 2006 did not apply. This resolution, which is a
special resolution, will replace the authority given to the Directors at the last annual general meeting on 20 July 2012.
The Directors have no present intention to make use of this authority and will only do so when satisfied that it is in the
interest of the Company.
This authority will expire on the next annual general meeting of the Company or the date falling 15 months from the
date of the passing of the resolution, whichever is the earlier.

Resolution 11: Authority for the Company to purchase its own shares
The Companies Act 2006 permits a public company to purchase its own shares in accordance with powers contained in
its Articles of Association and with the authority of a resolution of shareholders. The Directors believe that the Company
should be authorised to take advantage of these provisions and therefore, pursuant to the power contained in the
Company’s Articles of Association, it is intended to propose a special resolution at the Meeting to confer authority on
the Company to purchase up to a maximum in aggregate of 10% of the ordinary shares of 62/3p each in the share
capital of the Company at a price or prices which will not be less than 62/3p and not be more than 5% above the
average of the middle market quotation derived from the London Stock Exchange Daily Official List for the ten business
days before the relevant purchase is made.
The authority was given at the last annual general meeting of the Company for a period expiring at the conclusion of
the next annual general meeting. It is the Directors’ intention that a resolution for its renewal will be proposed at each
succeeding annual general meeting. The Directors will only make use of the authority when satisfied that it is in the
interest of the Company to do so. Shareholders should note that any ordinary shares purchased by the Company will
either be cancelled and the number of ordinary shares in issue will accordingly be reduced or will be held as Treasury
Shares.
They may further note that the total number of warrants and options to subscribe for equity shares in the Company
that are outstanding as at 20 June 2013 is 1,215,750 share options. The proportion of issued share capital of the
Company (excluding treasury shares) that this represents as at that date is 3.3%. If the Company used the full authority
(both existing and being sought) to buy back the shares under Resolution 11 and all such shares were cancelled, they
would then represent 4.1% of the issued share capital of the Company.
This authority will expire on the next annual general meeting of the Company or the date falling 15 months from the
date of the passing of the resolution, whichever is the earlier.

72 | Walker Crips Group plc | Report & Accounts 2013

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

SHAREHOLDER NOTES

The following pages provide more detailed information about your voting rights and how you may exercise them.

Entitlement to attend and vote
1.

Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only
those members registered on the Company’s register of members at:

▪ 6.00 p.m. on 17 July 2013; or
▪

if this Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting,

shall be entitled to attend and vote at the Meeting.

Appointment of proxies
2.

If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy
to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a
proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these
notes and the notes to the proxy form.
A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details
of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set
out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need
to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To
appoint more than one proxy you may photocopy your proxy card or contact Neville Registrars to obtain an
extra proxy card on 0121 585 1131.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes
for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his
or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the Meeting.

Appointment of proxy using hard copy proxy form
6.

The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:

▪
▪

▪

completed and signed;
sent or delivered to Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands,
B63 3DA; and
received by Neville Registrars no later than 11.00 a.m. on 17 July 2013.

In the case of a member which is a company, the proxy form must be executed under its common seal or
signed on its behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of
such power or authority) must be included in with the proxy form.

Report & Accounts 2013 | Walker Crips Group plc | 73

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

Appointment of proxies through CREST
7.

CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment
service may do so for the Meeting and any adjournment(s) of it by using the procedures described in the
CREST Manual (available from https://www.euroclear.com/site/public/EUI). CREST Personal Members or other
CREST sponsored members, and those CREST members who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action
on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message
(a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland
Limited's (EUI) specifications and must contain the information required for such instructions, as described
in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID) by
11.00 a.m. on 17 July 2013. For this purpose, the time of receipt will be taken to be the time (as determined
by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent
is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. CREST members
and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has
appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s))
such action as shall be necessary to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or
voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)
(a) of the Uncertificated Securities Regulations 2001.

Appointment of proxy by joint members
8.

In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company’s register of members in respect of the joint
holding (the first-name being the most senior).

Changing proxy instructions
9.

To change your proxy instructions simply submit a new proxy appointment using the methods set out above.
Note that the cut off time for receipt of proxy appointments (see above) also apply in relation to amended
instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions
using another hard-copy proxy form, please contact Neville Registrars Limited on 0121 585 1131.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for
the receipt of the proxies will take precedence.

Termination of proxy appointments
10.

In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy
notice clearly stating your intention to revoke your proxy appointment to Neville Registrars Limited, Neville
House, Laurel Lane, Halesowen, West Midlands, B63 3DA. In the case of a member which is a company, the
revocation notice must be executed under its common seal or signed on its behalf by an officer of the company
or an attorney for the company. Any power of attorney or any other authority under which the revocation
notice is signed (or a duly certified copy of such power or authority) must be included with the revocation
notice. The revocation notice must be received by Neville Registrars no later than 11.00 a.m. on 17 July 2013.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then,
subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you
have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be
terminated.

74 | Walker Crips Group plc | Report & Accounts 2013

NOTICE OF ANNUAL GENERAL MEETING
Year ended 31 March 2013

Corporate representatives
11.

A corporation which is a member can appoint one or more corporate representatives who may exercise, on its
behalf, all its powers as a member provided that no more than one corporate representative exercises powers
over the same share.

Issued shares and total voting rights
12.

As at 6.00 p.m. on 20 June 2013, the Company’s issued share capital comprised 37,731,187 ordinary shares
of 62/3p each. Each ordinary share carries the right to one vote at a general meeting of the Company. The
Company held 750,000 ordinary shares in treasury on 20 June 2013 and, therefore, the total number of voting
rights in the Company as at 6 p.m. on 20 June 2013 is 36,981,187.

Communication
13.

You may not use any electronic address provided either in this notice of meeting or any related documents
(including the letter with which this notice of meeting was enclosed and proxy form) to communicate with the
Company for any purposes other than those expressly stated.

Website giving information regarding the Meeting
14.

Information regarding the Meeting, including the information required by section 311A of the Companies Act
2006, is available from www.wcgplc.co.uk.

Questions at the Meeting
15.

Under section 319A of the Companies Act 2006, the Company must answer any question you ask relating to
the business being dealt with at the Meeting unless (i) answering the question would interfere unduly with the
preparation for the Meeting or involve the disclosure of confidential information; (ii) the answer has already
been given on a website in the form of an answer to a question; or (iii) it is undesirable in the interests of the
Company or the good order of the Meeting that the question be answered.

Website publication of audit concerns
16.

Pursuant to section 527 of the Companies Act 2006, where requested by members meeting the qualification
criteria set out in that section, the Company must publish on its website, a statement setting out any matter
that such members propose to raise at the Meeting relating to either (i) the audit of the Company's accounts
(including the auditor's report and the conduct of the audit) that are to be laid before the Meeting or (ii) the
circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at
which the annual account and reports were laid in accordance with section 437 of the Companies Act 2006.

Where the Company is required to publish such a statement on its website:

▪

it may not require the members making the request to pay any expenses incurred by the Company in
complying with the request;
it must forward the statement to the Company's auditors no later than the time the statement is
made available on the Company's website; and
the statement may be dealt with as part of the business of the Meeting.

Report & Accounts 2013 | Walker Crips Group plc | 75

SHAREHOLDER NOTES

76 | Walker Crips Group plc | Report & Accounts 2013

FORM OF PROXY

For use at the Annual General Meeting of Walker Crips Group plc to be held at the
South Place Hotel, 3 South Place, London, EC2M 2AF on 19 July 2013 at 11.00 a.m
and at any adjournment thereof.

Please complete this form using BLOCK CAPITALS

I/We
(name(s) in full)

Of
(address)

(name(s) in full)

Of
(address)

Being (a) holder(s) of shares in the above named Company HEREBY APPOINT

or failing him (or in the event that no person is named) the Chairman of the meeting to act as my/our
proxy and to vote for me/us on my/our behalf at the above mentioned meeting and any adjournment
thereof, and I/we desire this proxy to be used as directed below or, failing any direction(s) as regards the
Resolution(s), the proxy will abstain or vote at his discretion.

Enter the number of shares in relation to which your proxy is authorised
to vote or leave blank to authorise your proxy to act in relation to your
full entitlement.

Please also mark this box if you are appointing more than one proxy.

The manner in which the proxy is to vote should be
indicated by inserting “X” in the box provided

For

Against

Vote
Witheld

1) To receive and adopt the Directors’ report and audited financial statements

2) To approve the Directors’ remuneration report

3) To declare a final dividend of 0.9p per ordinary share

4) To re-appoint Martin Wright as a director

5) To re-appoint Robert Elliott as a director

6) To re-appoint David Gelber as a director

7) To re-appoint Hua Min Lim as a director

To re-appoint Deloitte LLP as auditors and to authorise the Directors to fix
their remuneration

9) To authorise and empower the Directors to allot equity securities

10)

To authorise and empower the Directors to allot equity securities for cash
as if section 561(1) of the Companies Act 2006 did not apply

11) To authorise the Company to make market purchases of the Company’s

Signature

Dated

/ 2 0 1 3

For a company see note 8 to this
form of proxy

Second fold

BUSINESS REPLY SERVICE
Licence No. BM 3865

d
o
f

t
s
r
i
F

Neville Registrars Limited
Neville House
18 Laurel Lane
HALESOWEN
West Midlands
B63 3BR

Third fold
and tuck in flap opposite

Form of Proxy
Notes
1.

10.

11.

12.

13.

14.

As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend,
speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set
out in these notes.
Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have
appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
A proxy does not need to be a member of the Company but must attend the meeting to represent you. To
appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the space
above. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting
will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you
are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish
your proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman
and give them the relevant instructions directly.
If the proxy is being appointed in relation to less than your full voting entitlement, please indicate the number
of shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed
to be authorised in respect of your full voting entitlement (or, if this proxy form has been issued in respect of a
designated account for a shareholder, the full voting entitlement for that designated account).
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To
appoint more than one proxy you may photocopy your proxy card or contact Neville Registrars Limited on
0121 585 1131 to obtain an extra proxy card. Please indicate the number of shares in relation to which they
are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you).
To direct your proxy how to vote on the resolutions mark the appropriate box with an ‘X’. To abstain from
voting on a resolution, select the relevant “Vote withheld” box. A vote withheld is not a vote in law, which
means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting
indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or
abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.
To appoint a proxy using this form, the form must be:

▪
▪

▪

completed and signed;
sent or delivered to Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West
Midlands, B63 3DA; and
received by Neville Registrars no later than 11.00 a.m. on 17 July 2013.

In the case of a member which is a company, this proxy form must be executed under its common seal or
signed on its behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which this proxy form is signed (or a duly certified copy of
such power or authority) must be included with the proxy form.
CREST members who wish to appoint a proxy or proxies by using the CREST electronic appointment service may
do so by using the procedures described in the CREST Manual. To be valid, the appropriate CREST message,
regardless of whether it constitutes the appointment of a proxy or an amendment to the instructions given to
a previously appointed proxy, must be transmitted so as to be received by our agent Neville Registrars Limited,
Neville House, Laurel Lane, Halesowen, West Midlands, B63 3DA, CREST ID (7RA11) by 11.00 a.m. on 17 July
2013. See the notes to the notice of meeting for further information on proxy appointment through CREST.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company’s register of members in respect of the joint
holding (the first-named being the most senior).
If you submit more than one valid proxy appointment, the appointment received last before the latest time for
the receipt of proxies will take precedence.
For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the
notice of meeting.
You may not use any electronic address provided in this proxy form to communicate with the Company for any
purposes other than those expressly stated.

Report & Accounts 2013 | Walker Crips Group plc | 79

SHAREHOLDER NOTES

80 | Walker Crips Group plc | Report & Accounts 2013

OFFICERS AND
PROFESSIONAL ADVISERS

EXECUTIVE DIRECTORS

RA FitzGerald
FCA
Chief Executive Officer

SKW Lam
FCPA Chartered FCSI
Group Managing Director

MJW Rushton
Chief Investment Officer

D Hetherton
Wealth Management
Director

NON-EXECUTIVE DIRECTORS

DM Gelber
Chairman

MJ Wright
Senior Independent Director

RA Elliott
FCA Cert PFS
Audit Committee Chairman

HM Lim

SECRETARY
DJ Hall
DipPFS FMAAT MCSI

AUDITORS
Deloitte LLP
London

SOLICITORS
Speechly Bircham LLP
London

BANKERS
HSBC Bank plc
London

REGISTERED OFFICE
Finsbury Tower
103-105 Bunhill Row
London EC1Y 8LZ

Registered in England
Reg No. 01432059

REGISTRARS
Neville Registrars Limited
18 Laurel Lane
Halesowen
West Midlands
BG6 3DA

Walker Crips Group plc
Finsbury Tower
103-105 Bunhill Row
London EC1Y 8LZ

020 3100 8000
www.wcgplc.co.uk
client.services@wcgplc.co.uk