Walker Crips Group Annual Report 2019

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FY2019 Annual Report · Walker Crips Group

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Rooted in tradition. Growing through innovation.

Annual Report and Accounts 2019

Walker Crips Group plc | Annual Report and Accounts 2019
Page 1 |

Rooted in tradition.
Growing through innovation.
Working towards a fair
deal for stakeholders.

Strategic report

01 Highlights from our year

04 Walker Crips at a glance

Chairman’s statement

CEO’s statement

10 Our business: the culture

12 Our business: the model

14 Our business: the people

16 Our business: the strategy

18 Our business: the principal risks

Key performance indicators

Corporate governance

Board of Directors

Chairman’s commentary on governance

Report by the Directors on corporate governance matters

31 Audit Committee report

Remuneration Committee report

43 Directors’ report

Statement of Directors’ responsibilities

Financial statements

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

58 Notes to the accounts

Company balance sheet

Company statement of changes in equity

85 Notes to the Company accounts

94 Notice of Annual General Meeting

101 Form of proxy

103 Officers and professional advisers

Walker Crips Group plc | Annual Report and Accounts 2019

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Highlights
from our year
ended 31 March 2019

Walker Crips has consolidated its position over the past year, laying the
foundation for future growth through technology-led initiatives. As a
result, our focus has expanded beyond the Group’s core business with
a new emphasis on innovating the way we do business.

£30.5m

Total income
(£30.5 million in 2018)

£3.3bn

Assets Under Management
(£3.3 billion in 2018)

29.2

30.5

26.2

23.2

3.2

3.3

2.0

2.3

Strategic
highlightss

Non-broking income as a percentage of total income has
increased to 71.6% (2018: 64.1%)

Proposed final dividend reduced to 0.33 pence per share
(2018: 1.29 pence per share), bringing total dividends for the
year to 0.91 pence per share (2018: 1.87 pence per share)

Financial
highlightss

Group annual revenues remained stable in challenging conditions
at £30.5 million (2018: £30.5 million)

Underlying operating profit, before tax and exceptional items,
decreased to £434,000 (2018: £906,000)

Reported profit before tax decreased to £489,000
(2018: £924,000)

Assets Under Management remained steady at £3.3 billion
(2018: £3.3 billion)

Walker Crips Group plc | Annual Report and Accounts 2019
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Strategic
report

04 Walker Crips at a glance

Chairman’s statement

CEO’s statement

10 Our business: the culture

12 Our business: the model

14 Our business: the people

16 Our business: the strategy

18 Our business: the principal risks

Key performance indicators

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Walker Crips
at a glance

The Walker Crips Group offers investment management and
wealth management services, pensions administration
and financial regulation software.

Key statistics
105

Years looking after
our clients

£30.5m

Total revenue 2019
£30.5 million in 2018

30,999

Clients across the UK
32,636 in 2018

£5.0bn

Assets Under Management
and Administration
£5.0 billion in 2018

Milestones
Our Investment Management arm evolved this year,
changing its name to reflect the breadth and diversity of
services it offers. Walker Crips Investment Management
restores confidence in our ability to move with
financial markets and expand with the industry.

Accolades

Our ALPHA: r2 Managed Portfolio Service (“MPS”) has been
awarded 5-star defaqto ratings for its services.

2019

The Walker Crips ALPHA: r2
team was shortlisted under the
London region for the annual
Wealth Manager Regional
Stars Awards by Citywire.

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Walker Crips Group
Strategic report

Our branches

Our Group

Walker Crips operates
thirteen offices
throughout the UK,
headed and staffed by
dedicated individuals
working towards a fair
deal for stakeholders.

London (head office)
York
Birmingham
Bristol
Inverness
Lincoln
Newbury
Northampton
Norwich
Romford
Swansea
Truro
Wymondham

Investment Management
Growing with clients to make investment rewarding

Private Client Division
Our London and York based Private Client Division (“PCD”) teams shape our investment strategy
guidelines, providing both Model Portfolio Services and Bespoke Discretionary Services to our
client base.

Investment management and fund management
Our eclectic collection of professional Investment Managers and advisers provide clients with
investment expertise and retain meaningful relationships built on Walker Crips’ 105 years
of experience. Our collectives model portfolio business continues to perform steadily for our clients.

Alternative Investments
Our Alternative Investment solutions provide innovative services and products for specific clientele.
Our (Tier 1) Investor Visa Programme serves high net worth individuals as they invest in the UK.
Our Short-Term Lending team manage large direct mandates from institutional investors lending into
the property sector, and our international equity arbitrage desk trades on arbitrage opportunities.

Structured Investments
Specialist products offered by Walker Crips Structured Investments provide carefully considered
investment opportunities to investors through professional financial intermediaries. Our Structured
Investment plans are designed to complement traditional investment strategies, offering alternative
exposure to a wide range of markets and counterparties.

Wealth Management
Preserving and nurturing client wealth
Our Wealth Management team deliver an individualised approach to financial planning. As focussed
independent financial advisers, Walker Crips Wealth Management provide guidance on an extensive
range of financial concerns such as life assurance, pre-retirement planning, at-retirement advice,
savings plans, tax efficient management of investments and estate planning.

Pensions
Serving clients to better care for their futures
Through Self-Invested Personal Pensions (“SIPP”) and Small Self-Administered Schemes (“SSAS”),
our pensions administrative team assist clients in efficiently exercising control over their SIPP
pension fund investments and also provide company directors the infrastructure using SSAS to
grow pension funds for their retirement.

EnOC Technologies
Engineering out complexities
Our newly incorporated software company, EnOC Technologies Limited, provides cloud-based
regulatory software to financial services firms. We aim to help smaller firms close the technology
gap; and for larger firms, software without the need for hardware maintenance costs. The EnOC Pro
Platform will allow for swift scalability with no expenditure on infrastructure; and its flagship service,
Accountability, is an easy-to-use solution for the Senior Managers & Certification Regime (“SM&CR”).

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Chairman’s
statement

Although reporting lower year-on-year profits and reduction in the
final dividend, the Group continues to make progress in its move to fee
based revenue, delivery of new offerings and transition to a technology
driven business.

Overview of 2018/19

The Brexit-driven economic uncertainty,
and the corresponding caution adopted
by investors explained in my Interim
Report, continued to depress the
volume-driven broking component of
our revenue during the remainder of the
year. Accordingly, it is disappointing, but
perhaps not unexpected, to be reporting
full year profit before tax down by
£435,000 or 47% on the prior year and,
as also signalled at interim, a reduced
final dividend.

At a more granular level, Walker Crips
Investment Management saw an 11.7%
increase in management fee revenues to
£19.2 million (2018: £17.2 million), offset
by the fall in commission income noted
above such that overall revenues of the
segment decreased by 0.71% year on year
to £27.9 million (2018: £28.1 million).

The York-based Wealth Management
team has seen an overall revenue increase
of 12.3% on previous year, mainly due to
revenues from the financial planning team
increasing from £1.22 million to £1.43
million. Within this, recurring revenue has
further increased by 8% compared to the
prior year, driven by new business from
existing and new clients whose number
has risen by approximately one third.

Pension administration fees have
remained stable in the year but, having
invested in the back office system,
processes and people, is now actively
looking to grow client numbers through
new internal and external introducers by
bringing all our capabilities and services
into a more efficient single SIPP and
converting both SSAS and SIPP product
offerings into a more competitive
tariff, enabling greater scalability and
providing a platform for further growth.

The increase in revenue contributed
to higher total profits for both
strands of our Wealth Management
proposition, increasing by 74.9%
from £199,000 to £348,000.

The Structured Investments team (“WCSI”)
delivered a very strong second half to the
year following disappointing volumes in
the first half. WCSI is poised to build on
this strength this year as a new product

Notwithstanding this, reported revenue
has remained stable with a significant
improvement in fee income, offsetting
the decline in broking commissions of
£2.3 million. This reflects resilience in
the level of Assets Under Management
and Administration notwithstanding
difficult markets. The improved second
half performance from our Structured
Investments team and the rollout of
new tariffs, which commenced during
the last quarter, is expected to have
a fuller and sustained impact next
year, underpinned by the continuing
loyalty and longevity of our clients.

The business continues to benefit
substantially from improved interest
margins on managed deposits which have
hitherto been depressed for several years by
the long run of record low UK Base Rates.

Also, although our reported cost base has
increased by £0.8 million (4%), this includes
£0.3 million invested in new products,
service offerings and increased automation
on our journey to being a Technology Driven
Financial Services Business, with additional
new head office premises costs of £0.2
million being incurred during the year. A cost
efficiency programme is under way which
should result in savings flowing through in
future years helping manage our cost base.

The Group continues its efforts to
help clients achieve greater returns by
transferring to our discretionary or portfolio-
managed mandates, which also generates
more stable fee-based revenue. These
efforts, and the decline in less predictable
transaction-based shared commission
income during the year, mean the ratio
of non-broking revenue to total income
has improved to 71.6% (2018: 64.1%).

The changing revenue mix and tariff
initiatives contributed to gross profit
increasing by 1.65% to £20.8 million
(2018: £20.5 million) and a higher
gross margin percentage of 68.3%
compared to 67.2% in the prior year.
Total Assets Under Management and
Administration at the year end were
£5.0 billion (31 March 2018: £5.0 billion)
and Discretionary and Advisory Assets
Under Management also unchanged
at £3.3 billion. Given the background of
global trade friction, Brexit uncertainty
and the resultant market challenges,
our clients more than ever understand
the importance of our experienced and
capable investment advisers providing a
sensible and reasoned approach as they
serve them with bespoke discretionary
and advisory management services.

The decrease in cash balances during
the year is primarily due to the payment
of a large brought forward creditor of
£2.0 million. Cash generated by operations
in the prior year benefited from several
factors, including the acceleration of cash
received by switching fee invoicing from
half-yearly to quarterly, which amounted
to an approximate additional inflow
of £2.8 million and a further cashflow
advantage was generated in the prior year
from substantial rent-free periods attached
to our new office leases amounting to
£0.4 million. Capital expenditure on the
new offices, incurred in 2017, was also
recovered in 2018 from the landlord in
the amount of £0.5 million. Taking all
these non-recurring material movements
into account, the underlying operating
cash flows for both the current and prior
year show a satisfactory positive result
in the context of lower profitability.

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Walker Crips Group
Strategic report

line in the form of structured deposits
comes to fruition. WCSI has continued to
build in its relationships with leading credit
institutions enabling investors to choose
from an increasingly wide range of product
pay-offs and to further diversify credit risk.

Since the year end a team of advisers
has decided to leave the Group on
amicable terms, which will result in the
transfer of £239 million of Assets Under
Management and Administration. The
transfer of clients and their assets will take
place later this year with the consequent
impact on future revenues and profits.

The Group’s balance sheet remains strong,
with reported net assets of £21,721,000,
down £292,000 from the prior year and
reflecting payment of last year’s final
and this year’s interim dividends, which
exceed the reported profit after tax
for the year. The robust balance sheet
provides a sound base underpinning
our technology-based strategy.

We have incorporated EnOC Technologies
Limited as our new technology arm to
deliver our future ‘Software as a Service’
business. We expect this initiative to be
contributing over the next twelve months.

Strategy
We remain committed to the strategy of
being an innovative and Technology Driven
Financial Services Business/Company.

We are constantly looking for ways to
maintain and enhance the service we
provide to clients, delivering a premium
personal service. We will also continue to
standardise, where it is appropriate to do so,
and use investment in technology to reduce
costs and generally to work more efficiently.
We are therefore investing in technology
to improve the customer experience
and efficiency. During the year we have
significantly improved the production
process of our client packs, which moved
from a half yearly to quarterly distribution.
We designed our own fee charging system
which computes fees daily and posted
quarterly, instead of the previous method
which priced and charged fees at six monthly
intervals with no recognition of intervening
price changes and the associated
fluctuations in fee revenue. These are
examples of customer-facing improvements
that we will develop further and deploy.

Notwithstanding these positive elements,
we are disappointed to be reporting reduced
profits. As experienced by many of our peers,

external national and global events outside
our control bring risks which have a material
and direct bearing on our revenue base
through economic uncertainty-led volatility
in transaction volume or market variations in
the fee-sensitive valuations of our managed
portfolios. The importance of expanding
through growth of alternative revenue
streams, which we are now heavily focused
on achieving, has never been greater.

Dividend
In the absence of an upturn in trading
volumes in the second half of the year,
and as signalled in my Interim Report, the
Board is now recommending a reduced
final dividend of 0.33 pence per share
(2018: 1.29 pence per share). Combined
with the interim dividend of 0.58 pence
per share (2018: 0.58 pence per share), the
total dividend for the year is 0.91 pence per
share (2018: 1.87 pence per share). The
final dividend will be paid on 13 September
2019 to shareholders on the register at
the close of business on 23 August 2019.

In making this decision, the Board has
carefully considered a number of factors
not least shareholders’ expectation
to receive dividends at the historically
consistent level of recent years. Given
the disappointing results for the year, a
greater emphasis has been placed on
the need for prudence, in particular the
conservation of cash for re-investment
into new more profitable initiatives and
maintaining appropriate prudential
capital headroom. We will constantly
review our ability to restore dividends to
higher levels when we have achieved an
improvement in profitability alongside
continued stability of other factors such
as liquidity, regulatory capital adequacy
and the wider market and economy.

Our people, culture and governance
By setting the right example at the top,
the Board has prioritised good culture and
conduct across all who represent the Group.
We continue to encourage professionalism
and the right behaviours in all we do. The
end result is for a unified emphasis on
achieving the right outcome for clients.
The new Senior Managers & Certification
Regime (“SM&CR”) comes into force on
9 December 2019. We have embraced
and adopted it as part of our culture of
accountability rather than treating it as
another regulatory burden. We have already
built our own SM&CR system within our
new company, EnOC Technologies Limited,
and have expanded it to include not just

the regulatory requirements but also our
internal policies, governance and controls.
This SM&CR system is also being offered
as a service to other UK regulated financial
services businesses, covered more fully
in the Chief Executive Officer’s report.
Corporate governance and stewardship
in accordance with the UK Corporate
Governance regime provides assurance
to external parties who rely on sound
management of the business and its risks.

I would like to thank all my fellow Directors,
Investment Managers and advisers and
members of staff for their continued support
and hard work during a challenging period.
The efforts of our people in embracing
change and dedication to delivering good
customer outcomes is outstanding.

I would also like to take this opportunity
to thank Mark Rushton again for his
contribution to the Group and wish
him well in his future endeavours.

Annual General Meeting
This year’s Annual General Meeting will
be held at Old Change House, 128 Queen
Victoria Street, London EC4V 4BJ on
4 September 2019, at 11.00 a.m.

Outlook
We are closely monitoring the Government’s
progress around Brexit and the impact of
the present uncertainty. Given the Group’s
predominantly UK centric customer base
and operations, the impact of Brexit
manifests in second order effects including
lower trading volumes as the uncertainty
influences investor sentiment. During
this period we continue to maintain a
material cash buffer, regulatory capital
headroom and a dividend policy that
allows continued investment in new
revenue stream initiatives, technologies to
improve customer experience and achieve
procedural and process efficiencies, and to
build our ‘Software as a Service’ offering.

We are committed to a programme
of tightly controlling non-
development expenses, pushing
through revenue initiatives and
creating new product offerings.

D. M. Gelber
Chairman
11 July 2019

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CEO’s
statement

Our three-pronged strategy continues to give direction to the Group
during times in which the increasing deluge of regulatory obligations
continue to complicate the industry.

Reflection

Last year, we embarked upon a new
vision. “Walker Crips, a Technology
Driven Financial Services Company.”
All the core objectives of shareholder
value, customer service, operational
effectiveness and efficiency, are still
there, but only by emphasising and
investing in technology as the delivery
mechanism will the core objective
be achieved. Our transformation is
underway and gathering pace as we
progress toward this objective.

Three-pronged strategy for growth

1. Core Investment

Management Business
This is our largest revenue generator,
providing clients with investment,
wealth, pensions, collectives advice
and the creation of structured
investments and structured deposits
for clients, IFAs and counterparties.

We continue to invest in our core
business, enhancing our systems and
processes to improve operational
efficiencies, and to deliver services to
our Investment Managers via our in-
house developed client management
system thereby enabling them to
provide high quality tailored service
to clients.

Our fee revenues have out-performed
the prior year, reflecting our shift to
fee earning accounts. Our transaction
commission income has declined
partially due to that shift, and also due
to lower trading activity in the market
for both local and geopolitical reasons.

The simplification and streamlining of
service offering by our York office has
concluded and we are now seeing an
improvement in revenues.

Our Collectives Investment
Management team maintained
their performance levels while facing
compression of margin pressures.

Our structured deposit offering will
now launch in 2019/20, slightly
delayed from 2018/19 as we
finalised and tested the operational
arrangements.

The increase in the cost of
regulating and operating Investment

Management Businesses is a
persistent headwind. We will
continue to make our Investment
Management arm more productive,
managing our costs and improving
our operational efficiency.

We continue to look for good quality
investment and wealth managers,
either individually or as teams.

2. Alternative Investments
This subset of our core Investment
Management business is where we
create innovative and higher margin
new business lines.

Our Tier 1 (Investor) Visa investment
business continues to perform well,
attracting ultra-high net worth
individuals from East Asia to invest
in the UK. Our assessment process
is vigorous and thorough and has
provided assurance to the UK Home
Office with 100% success rate
since 2013.

Our Short-Term Lending business
delivers in line with targets for our
institutional mandates. As part of
the expansion of this business, the
Group has invested in a planned
launch of a listed bond available to
institutional investors. This launch is
presently delayed reflecting current
political uncertainty affecting investor
sentiment and therefore provisions
totalling £134,000 have been made
for related costs.

3. Software as a Service (“SaaS”)
Systems development is our core
competency and we create much of our
own technology, allowing us to build
and integrate many of our systems into
one central platform.

We have therefore incorporated
a wholly-owned subsidiary EnOC
Technologies for the purpose of
providing technology to the industry.
Our first service on the platform
is a system that will support FCA
authorised companies operating
within the Senior Managers &
Certification Regime (“SM&CR”).
It is a scalable and multi-tenanted
SM&CR system that we have already
been using for our own group of
companies, and used also by a
number of external companies.

The objective of EnOC is to provide
enterprise level systems to companies
of all sizes, from the very large to the
very small. By levying only a per-user/
per-month charge starting from £25
and decreasing as volume increases,
it is accessible to even the smallest
of companies. We aim to close the
technology gap between those who
can afford large systems, and those
who cannot; removing the barriers
to entry.

EnOC was born in the cloud and will
remain a cloud service, for all the
benefits it brings to the service and to
our partners.

Our international equity arbitrage
business generates significant returns
on our modest principal trading book.

We must and we will Create >
Innovate > Rejuvenate > Eliminate >
Repeat.

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Walker Crips Group
Strategic report

Reconciliation of profit before tax to adjusted
profit before tax

Reconciliation of operating profit to operating
profit before tax and exceptional items

Profit before tax

Exceptional items

Adjusted profit before tax

2019
£000

489

521

2018
£000

924

Operating profit

Exceptional items

940

Adjusted operating profit

2019
£000

402

434

2018
£000

890

906

Driving forwards

We have always provided High-Touch
service to our clients, and we also couple
it with High-Tech service delivery. We
will continue to manifest our vision that
Walker Crips is a ‘Technology Driven
Financial Services Company’.

I am pleased with our achievements
thus far, but I am frustrated that we
did not achieve even more. We remain
resolute and determined to follow
through with our plans.

Honouring our past

We value and celebrate our forebears
who toiled to lay the foundations of
the Company that we have today,
affectionately known as Walker Crips Old
Maturities (“WCOM”). WCOM reminds us
of our roots, our values and our heritage.
We draw inspiration from their stories
of the City of days past, and the
consistent thread into the
present day is the value of
client service, of respect, and
of treating clients fairly.

The participants in this
photo represent nearly 450
years of cumulative service.

S. K. W. Lam
Chief Executive Officer
11 July 2019

We must keep on pursuing the principles
of Kaizen: the discipline of continuous
improvement. We must continuously
innovate, all of us, one step at a time,
ALL the time.

We have, and will always do our utmost to
serve our clients, to deliver good customer
outcomes and to make investment
rewarding for them, our shareholders
and our staff.

I am thankful for the talented and
committed people that I have the
pleasure of working with. Our Investment
Managers, Wealth and Pensions Advisors
are exemplary professionals and our
staff are skilled, loyal and dedicated.
I am truly grateful.

Sean Lam with WCOM at biannual lunch

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Our business:
the culture

Through acquisitions we can trace our roots as far back as 1914.

Upholding traditional values of honesty and integrity for over a century,

we remain committed to those values, the clients we serve and the

stakeholders that share in our success.

has remained independent
for over 100 years.

Rooted in tradition.
Growing through innovation.
Working towards a fair deal
for stakeholders.

We make investment rewarding for those whom
comprise who we are. We motivate our people,
employees and self-employed associates alike;
encouraging their individual development through
comprehensive training and endeavours of outreach.
We nurture their best intentions through encouraging
good behaviour, ensuring their motives remain aligned with
the Group’s belief in treating clients fairly.

We recognise our clients as the root of our business.
Our clients are an essential element of our own success, and we
believe that by treating them honestly and with good intentions
we can achieve a fair deal, advantageous for both the Group and
the clients’ mutual benefit.

We’re branching out through consistent innovation. We continue
to thrive as we cultivate our technology to strengthen our Group, increase
efficiency and provide value for our shareholders.

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Walker Crips Group
Strategic report

has remained independent

for over 100 years.

Rooted in tradition.

Growing through innovation.

Working towards a fair deal

for stakeholders.

We make investment rewarding for those whom

comprise who we are. We motivate our people,

employees and self-employed associates alike;

encouraging their individual development through

comprehensive training and endeavours of outreach.

We nurture their best intentions through encouraging

good behaviour, ensuring their motives remain aligned with

the Group’s belief in treating clients fairly.

We recognise our clients as the root of our business.

Our clients are an essential element of our own success, and we

believe that by treating them honestly and with good intentions

we can achieve a fair deal, advantageous for both the Group and

the clients’ mutual benefit.

We’re branching out through consistent innovation. We continue

to thrive as we cultivate our technology to strengthen our Group, increase

efficiency and provide value for our shareholders.

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Our business:
the model

The Walker Crips Group provides a range of services within and for the

financial services industry. Our core business organisation, Investment

Management, works alongside companion offerings from Wealth

Management, Pensions and Alternative Investments, utilising innovative

in-house software solutions.

We sow investments

We continue to expand our offering
of investment management and
investment management-adjacent
services; supporting our core business
and its companion companies in serving
our clients.

We provide training opportunities to
our employed and self-employed staff;
enabling them to operate with the
expertise necessary to meet and exceed
clients’ needs.

We aim to create a work environment
in which our institution’s century of
culture, integrity and accountability
permeates our every function, by
improving procedures and modernising
monitoring practices.

We grow our Group

Our core business, Investment Management, works alongside Wealth Management and Pensions to combine companion offerings,
utilising the innovation of our newly-formed software company, EnOC Technologies Limited.

Investment Management strategy

Reflection on last year
The UK’s withdrawal from the EU has been less than a congruous process; parliamentary delays and political in-fighting having resulted in
the EU’s repeatedly extended deadlines. These worries have created volatility in the FTSE 100 after initially peaking in May 2018 at 7,877,
and subsequently trading back to a low of 6,585 as the initial EU withdrawal deadlines were missed in January and March. 10-year gilts
have also shown more correlation with events than interest rates with short term base rates rising from 0.5% to 0.75% in August having
no effect. Strong global markets to September lead to gilt yields rising to a year high of 1.72%. Declines followed, as Brexit deadlines were
changed, to eventually close at the end of the period at 0.98%. With this in mind, it seems there is little value to be had in retaining gilts,
due to the negative real yields and potential of eventually normalising rates, making this asset class unattractive at present.

New opportunities in the sector
The degree of uncertainty of 2017/2018 not only continues but, if anything, increases into 2019, as EU withdrawal negotiations
have stalled and political parties in the UK have begun to fragment in their traditional forms. This is likely to give scope for further
market volatility both up and down over the year ahead. We seek to continue to manage the continuing challenges of the industry:
cost pressures, regulation, cost of technology, innovation, defending against cyber-attacks, reputational threats, market volatility, and
changing client demographics.

With these forces in play we see the pace of change in the industry quickening rather than slowing over the medium term. Nevertheless,
we are well placed to tackle the challenges and continue to focus on innovation. With MiFID II now just over a year old, the new
obligations, additional controls, oversight, GDPR (data protection) and SM&CR (Senior Managers & Certification Regime), barriers to
entry in our market are as high as ever. We expect further consolidation to result from the high technology and compliance costs in
the industry. With this in mind, Walker Crips Investment Management remains focused on building upon existing client relationships,
growing our client base and prioritising high standards of service.

Chris Kitchenham, Director, Private Client Division London

Wealth Management strategy

Reflection on last year
Walker Crips Wealth Management’s profits increased over the last year, by £100,000 to £120,000. Revenue has also increased by 17%
over the last year, while total Funds Under Management have remained consistent at approximately £180 million; £78 million of which
are held by the award winning Walker Crips Investment Management DFM service, ALPHA: r2.

Planned client fee increases were implemented and well received by our clients. In aims of expanding our ability to provide our wide
range of offerings for existing and potential clients, we have increased our quota of advisers in York by 50% since September 2017;
with a further trainee due to start in July. Over the last year, Walker Crips also absorbed and retained clients from regional competitor
JWPCreers Wealth Management Limited. We successfully secured £10 million in client assets on to the Wealth Management Service
Proposition, which was previously on a 50/50 basis via the JWPCreers Joint Ventures, with contacts signed on 1 April 2019.

New opportunities in the sector
Due to more stringent regulation the number of advisers in the sector continues to decrease; putting Walker Crips Wealth Management in
a strong position to capitalise on the ever increasing need for professional advice. An update to our back office system is planned for the
second half of the year; this is projected to increase our productivity and enhance our level of service. We are currently researching suitable
candidates for a business development manager role to further expand our client base in Yorkshire, London and wider UK.

Thoughts for the year ahead
Organic growth: We have an existing program for ‘home growing’ new advisers and para planners in order to ensure systems are
understood and stringent processes are maintained.
Accelerated growth: With our systems and infrastructure a compelling draw for skilled advisers, we actively seek to recruit Wealth
Advisers with existing client bases who will add value to our team.
Overall strategy for growth: We plan to implement promotional strategies for our offerings both internally and externally to encourage
a healthy inflow of new clients.

Dominic Martin, Managing Director, Walker Crips Wealth Management Limited

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Walker Crips Group
Strategic report

Pensions strategy

Reflection on last year
Following a year of investment in both the relocation of operations and expansion of back-office support, Ebor is back into profits.
Investment in the new office and back office has supported growth; client numbers having increased and recurring revenue improving
by 2%. Assets Under Management have remained consistent throughout the year, holding approximately £348 million. A new deed
exercise was also introduced to ensure clients operated under up to date legislation.

New opportunities in the sector
Despite the consolidation of our competitors, our products remain competitively priced and our reputation as quality pension providers
continues to encourage new business internally and externally. New relationships with introducers have been planned to increase the
client bases of both SIPP and SSAS. We have distilled our SIPP offering and refreshed its branding to align the product with the Walker
Crips name; allowing for transparency of charges and a fixed price that will not penalise clients from the success of a growing fund.

Thoughts for the year ahead
We will continue to search for quality individuals at the consultancy level to match our plans for growth; including the vigilant pursuit
for quality administrators who will advance and uphold the Group’s culture. Utilisation of Group technology will provide online
presence for client engagement. As part of this effort a new fee structure for SSAS and SIPP better suited to the drivers of costs and
risk is to be implemented.

Wendy Eastwood, Managing Director, Ebor Trustees Limited

EnOC Technologies Limited strategy

2018/2019 year in review
In the last six months our in-house development and UX (“user experience”) teams have made substantial advances in the design and
infrastructure of our flagship software offering. The Accountability expansion, which addresses the new Senior Managers & Certification
Regime (“SM&CR”) rules, available via our EnOC Pro Platform builds upon decades of industry experience resulting in a product that is
affordable, fit-for-purpose, and in the current regulatory landscape, timely. Having built our solution in the cloud, we can provide clients
with setup within minutes and additional functionality in seconds; entirely nullifying the additional costs of server space, IT Support and
positioning our product as a uniquely agile and cost-effective offering.

Opportunities in the sector
The FCA’s SM&CR regulation have resulted in various solution-providers developing tools that are meant to help firms administer the
regime. Most require hardware, software, IT administration support, licence fee, implementation consultants and long implementation
periods. Their Capital Expenditure (CapEx) model typically requires a significant five-figure sum for implementation and annual licensing.
EnOC has entered the scene with a competitive advantage, using the Operational Expenditure (“OpEx”) model, deploying our services on
the cloud, without the need for any of the CapEx requirements. EnOC’s mission is to bridge the technology gap, providing enterprise level
systems not just to large businesses, but also to the small businesses who are the backbone of our economy. Whilst competing providers
are selling tools that far exceed the budgets of the majority of regulated entities, EnOC’s service starts from only £25 per user/per month,
affordable to even the smallest of firms.

The year ahead
There are 47,000 firms that must comply with the SM&CR by 9 December 2019. A vast majority of them will be the smaller firms with only
a handful of advisors or staff. The CapEx systems with five-figure annual licensing costs will probably be uneconomical for their business, nor
will they be the target market for those providers. EnOC is already being used by Walker Crips, with 280 users, and by a number of advance
adopter businesses. We will release an early access version in August, and are gearing up for the release of the full platform in October.

Sean Lam, founder & CEO, EnOC Technologies Limited

We yield results for our stakeholders
Our investors
We create value for our investors by increasing our revenues. Our core revenue is derived from fees charged for the services our people
provide, while additional revenue is produced through transactional activity and custody charges.

We strive to improve upon our value to shareholders by retaining our traditional means of recurring revenue, as well as innovating our
systems to minimise cost and deliver new business opportunities.

Our clients
Our clients benefit from our investments in our people and culture. Our investments in our companies allow us to develop our offerings,
whilst expanding clients’ access to financial services.

Our investments in our people and culture result in our personnel gaining training in the appropriate regulation, procedures, systems and
modes of communication; all for the benefit of our clients.

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Our business:
the people

Our loyal and highly-engaged workforce recognise and embrace

the Group’s ambitions to grow with clients and innovate

through technology.

Bristol, Nick Ridley
and Dan Partridge

In Bristol, the team forges client
relationships on the basis of
reciprocal trust; an eclectic
approach that underpins their
Investment Management
strategy. Their clients consist of
experienced investors, who seek
an ongoing, personal rapport with
their advisers. The team acquires
new business through referrals
from existing clients
and intermediaries.

Swansea, Andrew Morgan
and Tom Daniels

In Swansea, the team offer clients
expertise through their award
winning ALPHA: r2 Managed Portfolio
Service (“MPS”). Their bespoke
portfolios are flexible and offer
clients control over their investments,
based on their individual objectives
and circumstances. The team aim to
continue to raise their profile, and to
grow on both a local and
national scale.

Birmingham & Northampton,
Jonathan Brown, Sue White,
Clive Duckitt and Peter Thompson

In Birmingham and
Northampton, the teams work
closely together to enhance the
service they provide to clients.
Birmingham ranks as our second
largest branch after York and
London head office. The team
receives most of its clients through
referrals; with a cross-section of
clients of all ages.

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Walker Crips Group
Strategic report

Truro, Christopher Bolshaw,
Matthew Dickinson, Rebecca
Gouldstone and Jonathan Rowland

In Truro, the team offer bespoke
discretionary management for
private clients, trusts, charities
and local companies as well as
Model Portfolio Services. Being
amongst the Group’s larger
branches, its members often
collaborate with their
Investment Management
counterparts in the London and
York offices, allowing them to
provide an extensive range of
Group-backed products.

Wymondham and Norwich,
Rob Ward and Stuart Fairhurst

In Wymondham and Norwich,
the team’s reputation is of vital
importance; their business
maintenance and growth is based
around their ties to the local
community and consistently high
standard of service across their
client base; this strategy is
complemented by their quality
Bespoke services.

York, Julie Rossington, Simon
Cowley and Katie Machin

In York, the team embraces a holistic
and personalised approach to financial
planning that aims to bring the financial
intentions of each and every client to
fruition. Wealth Management’s team of
independent advisers strive to preserve
and grow client investments. The
Investment Management team offer
Discretionary Bespoke and Portfolio
Services through their suite of services.
The Pensions team aim to assist clients
in managing their retirement.

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Our business:
the strategy

We are committed to our three-pronged strategy, designed to position

Walker Crips Group as a Technology Driven Financial Services Company.

To support our strategy in the challenging economic environment we will

promote our core area of business, strengthen our companion service

offerings and actively market our ‘Software as a Service’ business.

Objective

What we achieved in the last year

Core Business:

Nurture and promote

our core business

The Group’s rate of recurring revenue versus
transaction-based commission income
improved from 64.1% to 71.6%.

Walker Crips Investment Management
(“WCIM”) fee revenue increased 11.7%
to £19.2 million, offset by the fall in
commission income of 20.9% to £8.7 million.

Significantly improved the production
process and quality of our WCIM client packs,
which moved from half-yearly to quarterly
distribution. Distributed electronically via our
client portal or hardcopy.

Designed and developed our own WCIM
fee charging system which computes fees
daily and charges quarterly, instead of the
previous method which priced and charged
fees at six monthly intervals. Our new daily
computation method follows the natural
peaks and troughs of the market and is fairer
to both clients and Company.

Reviewed WCIM fees and implemented
minima to cover the cost of administering
advisory and discretionary accounts.

Walker Crips Wealth Management’s
(“WCWM”) revenues increased by 17%,
profits increased by £100,000 to £120,000.
Revenues from the financial planning
team increased from £1.22 million to
£1.43 million. Funds Under Management
remained consistent at £180 million;
£78 million held with the award winning
Walker Crips Investment Management
DFM service, ALPHA: r2.

WCWM acquired the remaining 50% of
JWPCreers Wealth Management Limited
that we did not already own, and absorbed
and retained the clients.

Walker Crips Pensions (“WCP”) saw an
increase in client numbers and recurring
revenue improved by 2%. AUM remains at
£348 million.

Barker Poland Asset Management (“BPAM”)
continues to provide high quality service to
clients, and the collectives model portfolios
continue to perform well. AUM&A increased
by 4.4% to £308 million.

Companion Services:

Identify higher margin

alternative investment

business

Our Tier 1 (Investor) Visa investment business
continues to attract ultra high net worth
individuals from East Asia to invest in the
UK. Our assessment process is vigorous and
thorough and has provided assurance to the UK
Home Office with 100% success rate since 2013.

Our Short-Term Lending business delivers in line
with targets for our institutional mandates.

Our international equity arbitrage business
generates significant returns on our modest
principal trading book.

Software as a Service:

Identify and close the

technology gap

EnOC Technologies Limited (“EnOC”)
was incorporated to provide cloud-based
regulatory software to financial services firms.

Decided on a OpEx pricing model, charging
only £25 per user/per month and decreasing
as volume increases.

The first service, which we have named
Accountability, helps to address the Senior
Managers & Certification Regime (“SM&CR”)
regulations that will come into effect on
9 December 2019.

Accountability is already being used to
manage the Group’s SM&CR obligations,
covering all 280 of our Investment Managers,
advisers and staff.

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Walker Crips Group
Strategic report

What our aims are going forward

Continue investing in our core business,
and designing and developing
customer-facing system improvements
to support our Investment Managers,
advisers and staff in providing quality
investment services.

Launch targeted marketing campaigns
to promote the services of the Group.

The cost of regulation, services,
systems, staffing and the general cost
of maintaining and running a business
continue to escalate. We are committed
to a programme of tightly controlling
non-development expenses, pushing
through revenue initiatives to grow
the core business and creating new
product offerings.

Maintain target growth to achieve
£10 billion AUM&A by 2026.

Aim to streamline, de-risk where
appropriate and simplify our overall
offering in pursuit of efficiency and
increase profit margins.

Continue improving our client
communication by investing in our

WCIM client web portal and our mobile
app as efficient support tools for our
Investment Managers, advisers and staff.

Continue to grow fees versus commission
related revenue.

Further develop our Model Portfolio
service offering, as a complementary
service to our Discretionary Bespoke
Portfolio service.

Maintain our flexible approach to
investment management, offering a
broad range of services that facilitates
different clients’ aims and objectives.

Continue to hire quality Investment
Managers, Wealth and Pension Advisers
who have existing client bases.

Launch our structured deposit offering,
slightly delayed from 2018/19 as we
finalised and tested the operational
arrangements.

We are working closely with businesses
in South Africa to build an introducer
network for investors who wish to gain
access into the UK market.

WCWM is in a strong position to
capitalise on the need for professional
advice, due to the decreasing number
of advisers as a result of more
stringent regulation.

An update to the WCWM back office
system is planned for the second half
of the year, and is expected to increase
our productivity.

Continue to ‘home grow’ new advisers
and para planners.

WCP will build new relationships with
introducers for both our SIPP and
SSAS offerings.

Metric
£3.3bn

Discretionary and
Advisory AUM

We will continue to promote our high
quality Tier 1 (Investor) Visa services,
and ensuring that we maintain our
100% success rate.

We will seek out new institutional
mandates, a business where we have
a proven and successful track record.

Whilst delayed, we will continue to
pursue the possibility of launching a
listed bond available to institutional
investors when the economic and
political background stabilises.

The success of our international equity
arbitrage business allows us to explore

other areas of business, deploying
our funds within our relatively small
trading book.

The importance of expanding through
growth of alternative revenue streams,
which we are now heavily focused on
achieving, has never been greater.

EnOC’s mission is to help smaller
firms close the technology gap
between those who can afford large
systems, and those who cannot;
and for larger firms, we can provide
them with systems without the need
for costly hardware, software and
maintenance expenditure.

EnOC is built on one of the largest
cloud based platforms in the world,
thereby making it extremely secure and
immeasurably scalable, enabling EnOC
to host thousands of B2B customers.

We will continually add more
Expansions to the EnOC Pro Platform,
many without additional charges, and
some for a small per user/per month
fee. We already use many of these
services within our own business, and
we will be converting them into EnOC.
For example, the HR system, holiday
bookings, document management,
authorised signatories, and so on.
All updates and new systems will be
deployed to the EnOC cloud system
without requiring engineers or
technicians being on site, customers will

not need to buy new servers nor install
new software like they would have had
to, for traditional systems.

We will vigorously pursue the low cost
per-user/per-month OpEx model, when
our competitors typically charge a
significant five-figure sum for the CapEx
model. The low cost to customers will
mean small margins to EnOC, but EnOC
will aim for volume sales.

We will release an early access version
in August, and gear up for the release of
the full platform in October.

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Our business:
the principal risks

Risks to the business are reviewed monthly and monitored by the Board-

appointed Risk Management Committee in conjunction with the internal

process for management of capital risk.

Risk

How it arises

Client risk/Counterparty risk
Client failure to settle transaction
Risk appetite
Low/Medium

The risk that a client or market counterparty will not meet its obligations to the Group in
accordance with agreed terms resulting in losses. This risk can arise when a client fails to
pay for a purchase of shares or to deliver a certificate of ownership of a stock which has been
sold. A similar exposure also arises if a market maker fails to complete the same trade through
corresponding payment or stock delivery.

Conduct risk
Customer outcomes
Risk appetite
Zero/Low

Regulatory risk
Risk appetite
Zero/Low

Liquidity risk
Risk appetite
Zero/Low

Market Risk
Market Risk
Risk appetite
Zero/Low

Capital adequacy
Capital adequacy
Risk appetite
Zero/Low

Operational risk
Business disruption
Risk appetite
Low/Medium

Cyber fraud
Risk appetite
Low/Medium

Personnel
Risk appetite
Zero/Low

The risk that clients or the wider market suffer detriment as a result of inappropriate
behaviour or actions by staff or business partners. This risk can arise when representatives of
the Group are not given sufficient training or awareness of the highest standards of behaviour
central to the services of the Group, those being honesty, integrity and fairness.

The risk of failure to comply with new or amended regulations incurring fines and causing
reputational detriment. Failure by Management to recognise the scope and impact of new or
amended regulations on the business model and resources needed to implement change.

The risk that the Group is unable to meet its payment obligations associated with its
financial liabilities as they fall due. This risk can arise in the stockbroking business, where large
amounts of trade values are being settled daily and can lead to a funding requirement due to a
delay in market delivery or late settlement by clients.

The risk of losses arising as a result of exposure to market movements in the price of
securities, foreign exchange and interest rates. This risk can arise when the Group’s proprietary
trading book positions incur losses on negative price movement, where negative interest rates
movements impact the interest margin earned for administering client money deposits and
where positive interest rate movements may reduce revenue from client broking activity.

The risk that the Group’s business strategy and plans for growth are not sustainable on the
existing regulatory capital base. This risk can arise when new acquisitions, products or initiatives
are embarked upon without sufficient reference to impact on regulatory capital adequacy.

The risk that an internal or external event causes failure of core business activities or IT
systems supporting them. This risk can arise when our companies fail to effectively control
or administer the operating systems at the root of operations, fails to manage its resource
requirements properly or maintains inadequate security arrangements.

The risk of fraudulent action by external parties maliciously breaching the Group’s internal
systems. This risk can arise from failure to implement sufficient controls over security access to
all IT systems.

The risk of losing key staff who are the drivers of significant components within the Group.
This risk can arise on the failure to reward individuals with challenging performance targets and
competitive levels of financial compensation.

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Walker Crips Group
Strategic report

Mitigation

Daily monitoring of clients’ positions and counterparty exposures and individual trade limits. Credit assessments of
counterparties and treasury policy to avoid concentration risk. Credit risk assessments of banks and custodians, active
monitoring of exposures and use of credit ratings. Using several banks to hold both clients’ and the firm’s money, with
levels being constantly reviewed.

Increased

Clear and balanced financial promotions, suitable investment advice and complaints management. Board oversight,
development of staff and training, strong corporate governance with defined roles, ensuring the tone from the top sets
a fair, positive and ethical culture.

Unchanged

Board oversight, development of staff and training, strong corporate governance with defined roles, recovery plan,
monitoring the Group’s performance relative to competitors, compliance monitoring programme, regulatory development
oversight, documented policy and procedures and regular contact with regulators. Peer comparison and communication,
increased compliance personnel and early gap analyses conducted.

Unchanged

Contingency funding plan, cash flow forecasting, experienced management team monitoring settlement performance,
maintenance of cash surplus buffer, ability to raise an overdraft facility and liquid financial trading book can be realised.
Group entities settle intercompany balances regularly and are not reliant on intragroup funding.

Unchanged

Proprietary trading book positions are tightly controlled by low trading limits and are regularly monitored. The market
expectation is that interest rates will rise. The firm continues to increase its fee-based revenues and reduce its reliance
on transactional broking commissions.

Increased

Capital adequacy surplus is maintained well in excess of regulatory requirements. Material surplus cash balances are
always carried. Ongoing review of regulatory capital through an Individual Capital Adequacy Assessment Process.
New initiatives are examined and stress tested prior to implementation.

Unchanged

Business and information system recovery plans are approved, tested and maintained. Data incident log records and
analyses all unforeseen events to prevent recurrence. Insurance cover in place for certain causations (e.g. financial crime
and consequential loss).

Unchanged

Senior Management oversight, encryption and protection software installed, prevention procedures, segregation of duties
between front and back office, system authority and payment limits and system access controls and heightened employee
awareness based on experience to match the greater risk presented by recent threats reported in the sector.

Unchanged

Succession and contingency planning, appropriate compensation levels and share incentive schemes to reward and
retain staff. Investment in staff through training, key person insurance cover and contractual restrictive covenants.

Unchanged

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Key
performance
indicators

Performance in 2019 is set out below with data from preceding

years. Year-on-year data is presented on a consistent basis providing

measurable indicators. The Board will continue to monitor these

KPIs regularly.

£30.5m

£0.43m

£20.8m

Revenue
(million)

Operating profit before exceptional
items (million)

Gross profit
(million)

29.2

30.5

1.10

0.91

20.4

20.5

20.8

0.43

Volatility in markets and political
uncertainty prevented any overall
growth in Revenue.

The decrease in Operating Profits has
been driven by an increase in costs,
which relates to development of new
products still to come on-stream.

Gross profit has increased in line with
higher fees and improved interest
margins.

£5.0bn

Total Assets (AUMA)
(billion)

Administration
Advisory
Discretionary

£3.3bn

Breakdown of total assets (AUMA)
(billion)

Assets Under Management
(billion)

5.2

5.0

5.2

2.020

5.0

1.685

1.750

3.2

3.3

1.880

1.802

1.630

1.351

1.514

1.639

Total Assets have remained steady in
line with UK markets which have been
stifled with uncertainty throughout
the year.

The ‘shift to Discretionary’ has been
forthcoming mainly from advisory
clients who prefer to let our Investment
Managers make the hard decisions.

Discretionary and Advisory AUM, taken
together, remained stable in the face
of uncertain markets.

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Walker Crips Group
Strategic report

0.91p

New revenue generators
(number)

Total dividends
(pence per share)

1.87

0.91

The reduction of total dividend reflects
the reduction in reported profits.

No new revenue generators bringing
their own clients were hired during the
year, in line with our shift in strategy to
divert resources into building our new
technology offerings.

124,603

Transaction volume
(number)

71.6%

Non-broking income proportion
(%)

136,997

134,980

124,603

61.8

64.1

For the Group’s viability
statement, see page 30.

71.6

Approval
This Strategic report has been
approved and signed on behalf
of the Board.

Political uncertainty led to a much lower
appetite to make changes to investment
portfolios during the year, resulting
in significantly lower trade volumes
in 2019.

The non-broking income percentage
increased strongly during the year
driven by a combination of higher fee
tariffs and lower commission-based
transaction volumes.

S. K. W. Lam
Chief Executive Officer
11 July 2019

D. M. Gelber
Chairman
11 July 2019

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Page 21 |

Corporate
governance

24 Board of Directors

26 Chairman’s commentary on governance

Report by the Directors on corporate governance matters

31 Audit Committee report

35 Remuneration Committee report

43 Directors’ report

45 Statement of Directors’ responsibilities

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Page 23 |

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Page 23 |

Board of
Directors

Executive
Directors

Our Board of Directors invest the expertise gathered over decades, and

the experience gained from their respective institutes, into managing the

Walker Crips Group.

Non-Executive
Directors

C M

C M R i

A N R

1 | Sean Lam FCPA (Aust.), Chartered FCSI
Group Chief Executive Officer

2 | Rodney FitzGerald FCA
Group Finance Director

3 | David Gelber
Chairman

Rodney FitzGerald serves as Group Finance
Director of Walker Crips Group plc. He is a
mathematics graduate of Leeds University
and qualified as a Chartered Accountant
in 1979 with Hays Allan & Co. After
holding senior financial positions outside
the financial services sector, he joined
independent stockbrokers T C Coombs & Co.
in 1987 and was appointed to the Board in
1989. More recently, he was Finance Director
of MeesPierson ICS Limited, now ABN AMRO
Clearing, before joining the Board of Walker
Crips Group as Finance Director in 1999. He
was appointed Chief Executive Officer in
January 2007. Rodney retired from the CEO
role in September 2017.

David Gelber has served as Non-Executive
Independent Chairman of the Board of
Walker Crips Group plc since May 2007. He
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
HSBC he held senior trading positions at
Citibank, Chemical Bank and JPMorgan. He
currently serves as a Non-Executive Director
of IPGL Ltd, an investment holding company,
DDCAP Ltd, an arranger of Islam-compliant
financial transactions, Extoix LLP, a Frontier
Market investment boutique and Amadeo
Air Four PLC, a closed-end fund investing in
aircraft leasing. His previous directorships
include Globeop Financial Services and
eSeclending LLC in Boston.

Sean is a passionate technologist and
innovator, and has made it his quest to
‘engineer out complexities’. He was appointed
Group Chief Executive Officer in September
2017. His tenure with Walker Crips began as
Development Director in 1999 with overall
responsibility for systems development and
technology, Chief Operating Officer and
Chief Technology Officer in 2004, and Group
Managing Director in 2007. He commenced
his career with Phillip Securities in Singapore
and was the Head of Internal Audit, and then
Head of Operations in 1995. Sean graduated
in 1991 with a Bachelor of Commerce from
the University of Western Australia majoring
in accounting and finance, and attained his
professional qualification as a CPA in 1995.
Sean is a Fellow of CPA Australia, was a
member of its European Council from 2010
to 2015, and President of its European Region
in 2012 and again in 2013. He is a Chartered
Fellow of the Chartered Institute for Securities
& Investment. Sean is also founder and CEO
of EnOC Technologies, Walker Crips’ new
fintech SaaS company providing regtech to
the industry, with the aim of helping smaller
companies close the technology gap.

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Key | Committees
A Audit Committee
C Compliance Committee
M Management Committee

N Nomination Committee
R Remuneration Committee
Ri Risk Management Committee

Walker Crips Group
Corporate governance

Non-Executive
Directors | continued

A N R

N R

4 | Martin Wright
Senior Independent Director, Non-Executive

5 | Clive Bouch FCA
Non-Executive Director

6 | Hua Min Lim
Non-Executive Director

Martin Wright was appointed to the Board
in July 1996 as a Non-Executive Director and
was recently appointed Chairman of the
Remuneration Committee. He is a Partner
of Charles Russell Speechlys LLP (Solicitors)
where he is a member of the Partnership
Council. Martin is a member of the Law
Society. He is also a Non-Executive Director of
a number of private companies.

Clive Bouch was appointed to the Board
in March 2017 and chairs the Audit
Committee as well as being a member of the
Nomination and Remuneration Committees.
He currently serves as an independent
Non-Executive Director of Invesco UK
Limited where he chairs the Audit and
Risk Committees, the Steamship Mutual
Insurance London and Bermuda Protection
& Indemnity Clubs where he is a member
of the Claims, Finance & Nomination
and Audit & Risk Committees, and The
Ardonagh Group where he chairs the Audit
Committee. Previously he was a partner in
Arthur Andersen and then Deloitte where
he provided audit and advisory services
to companies in the financial services
industry, latterly specialising in the asset
management, insurance and pension sectors.
He is a Fellow of the Institute of Chartered
Accountants in England and Wales, Fellow
of the Chartered Institute for Securities
& Investment and a Chartered Insurance
Practitioner.

Hua Min Lim is the Executive Chairman of
PhillipCapital Group of Companies and was
also appointed Chairman of IFS Capital
Limited on 20 May 2003. He began his
career holding senior positions in the Stock
Exchange of Singapore and the Securities
Research Institute. He has served on a
number of committees and sub-committees
of the Stock Exchange of Singapore. In
1997, he was appointed Chairman of the
Stock Exchange of Singapore (“SES”) Review
Committee, which is responsible for devising
a conceptual framework to make Singapore’s
capital markets more globalised, competitive
and robust. For this service, he was awarded
the Public Service Medal (“PBM”) in 1999
by the Singapore Government. In 2014,
he was also awarded “IBF Distinguished
Fellow” (Securities & Futures), the highest
certification mark bestowed by The Institute
of Banking and Finance on industry captains
who are the epitome of professional stature,
integrity and achievement. In 2018, he
was named Businessman of the Year 2017
at the annual Singapore Business Awards,
which is Singapore’s most prestigious
business accolade. He served as a board
member in the Inland Revenue Authority
Singapore from 2004 to 2010. Mr Lim holds
a Bachelor of Science Degree (Honours) in
Chemical Engineering from the University
of Surrey and obtained a Master’s Degree
in Operations Research and Management
Studies from Imperial College, London
University. Mr. Lim joined the Walker Crips
Group Board in March 1993.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 24

Walker Crips Group plc | Annual Report and Accounts 2019
Page 25 |

Chairman’s
commentary on governance

Dear Shareholder

As Chairman of the Group, I recognise my responsibility for,
and am committed to, leading the governance of the Group’s
companies, in which regard, I am pleased to say, I am fully and
effectively supported by my fellow Board members and the senior
Management team.

Whilst the Listing Rules, the UK Corporate Governance Code, the
FCA Principles for Business and a plethora of supporting guidance
may provide the formal framework, underlying our approach
is a determination to act with integrity and transparency in
promoting the long-term success of the Group and in generating
value for our shareholders, at the same time taking proper
account of the interests of all of our other stakeholders.

Our key to succeeding with these objectives is in ensuring a
healthy culture throughout the Group which is aligned with our
purpose, values and strategy and this is at the forefront of all we
seek to do.

The much-heralded latest revision of the UK Corporate
Governance Code was issued by the Financial Reporting
Council (“FRC”) in July 2018 (“the new Code”) and applies to all
premium listed companies, such as ours, for accounting periods
commencing on or after 1 January 2019.

Although we shall, therefore, be reporting on the Group’s
governance in accordance with the requirements of the new Code
in next year’s Annual Report, it is worth highlighting here that its
emphasis is on:
maintaining positive relationships between the Group, its
shareholders and stakeholders;
ensuring that the Group’s policies and practices, and
behaviour throughout the business, are aimed at supporting
its sustainable success;
the importance of a high-quality Board composition and a
focus on diversity; and
remuneration being proportionate to the objective of long-
term success;

all of which are intended to achieve higher standards of corporate
governance and are totally in keeping with our own aspirations.

It is reassuring to note that the new Code allows for flexibility
in the way the mandatory principles laid down are applied to
suit the Group’s particular circumstances, including its size,
complexity, history and ownership structure rather than taking
a one-size-fits all approach. The emphasis is on reporting
meaningfully in a manner that will enable you and your fellow
shareholders to evaluate our approach to governance, an
outcome we shall use our best endeavours to achieve.

In the meantime, the report on the following pages is made in
compliance with the 2016 UK Corporate Governance Code, the
principles and provisions of which applied to the Group’s year
ended 31 March 2019 (and which, along with the new Code, is
available to view at www.frc.org.uk).

Clearly, fostering the best possible relationships with our clients is
integral to the success of our Group. Our rigorous application of
the Financial Conduct Authority (“FCA”) Principles for Businesses
underpin our commitment and ensure we act with complete
integrity and exercise due skill in our dealings with clients, treating
them fairly and having their best interests at heart.

The composition of the Board and our succession planning
have featured highly in my regular dialogue with our Senior
Independent Director, Martin Wright, who is also the Chairman of
our Remuneration Committee, as well as with the Chief Executive
and all other members of the Board, individually and collectively.
This continuing process is being carried out within the context
of the relevant principles of the new Code, as is the ongoing
evaluation of the performance of the Board as a whole and of its
Committees and individual Directors.

As an essential constituent of our responsibility for the Group’s
internal control, the Board has also recently conducted a
comprehensive review and re-statement of the matters it has
reserved for itself to decide upon which, in the interests of
transparency and for public inspection, have since been placed on
the Group’s website.

A detailed report by the Directors on the Group’s governance
arrangements as they applied during the previous financial
year follows.

D. M. Gelber
Chairman
11 July 2019

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 26

Walker Crips Group plc | Annual Report and Accounts 2019

Page 27 |

Report by the Directors
on corporate governance matters
year ended 31 March 2019

Walker Crips Group
Corporate governance

The Group is committed to the Principles of Good Governance
set out in the 2016 UK Corporate Governance Code (“the
Code”). Further explanation of how the principles have been
applied is set out below and, in connection with Directors’
remuneration, in the Remuneration Committee Report.

Compliance
The Group has been in compliance with the Code’s principles
and provisions throughout the year ended 31 March 2019
except as follows:

The Chairman, David Gelber, Senior Independent Director,
Martin Wright, who is also a partner of the Group’s solicitors,
Charles Russell Speechlys LLP, and our Singapore-based
Non-Executive Director, Hua Min Lim, who is also a significant
shareholder, have all served on the Board for more than nine
years. Under Code provision B.1.1, these are circumstances
that could appear to affect a Director’s independence.
Accordingly, the Board reviews these Directors’ contribution
every year and is satisfied that they remain independent. This
is evidenced by the objectivity and critical detachment that
underpin their continued provision of constructive challenge
and support to the Executive Directors and Management.
David Gelber, Martin Wright and Hua Min Lim will, therefore,
be put forward for re-election at the Annual General Meeting
on 4 September 2019, together with our fourth Non-Executive
Director, Clive Bouch, to whom none of the Code Provision
B.1.1 circumstances apply.

As stated in last year’s Report, contrary to Code provision
D1.1, the Group did not, at the start of the year, have malus
and clawback provisions in place to allow the recovery or
withholding of variable pay from/to the Executive Directors.
However, this was addressed during the course of the year
and relevant documentation is now in place for the serving
Executive Directors (and was so in place for Mark Rushton).

Again as reported last year, contrary to Code provision
D.2.1, the Board’s Chairman, David Gelber, also chaired the
Remuneration Committee in the early part of the year as
he was considered to be independent by the Board for the
reasons stated above. However, it was subsequently decided
it would be more appropriate for our Senior Independent
Director, Martin Wright, to take over as Chairman of this
Committee, a role he continues to discharge.

Number of meetings

D. M. Gelber (Non-Executive Chairman)
R. A. FitzGerald (Group Finance Director)
S. K. W. Lam (Chief Executive)
H. M. Lim (Non-Executive Director)
M. J. Wright (Non-Executive Senior Independent Director,
Remuneration Committee Chair)
M. J. W. Rushton (resigned 30 January 2019)
C. Bouch (Non-Executive Director, Audit Committee Chairman)
G. J. B. Jackson (resigned 23 July 2018)

1 By invitation.

The Board of Directors
At the year end, the Board consisted of two Executive and four
Non-Executive Directors. The full Board meets regularly, at least
every alternate month, throughout the year.

The Board is provided with appropriate information 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
are 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 company Boards of Directors
and other Management or operational committees include at least
one Main Board Executive Director who serves as the link between
the Board and Management on operational decision making.

Certain Executive and Non-Executive Directors of the Group are
also Directors of the Boards of the main operating companies
which conduct regulated investment business, thereby playing an
active part in decision making and control at an operating level.

The roles of Chairman and Chief Executive are separated, having
been occupied by David Gelber and Sean Lam respectively
throughout the year, and the Board includes Non-Executive
Directors, all of whom, for the reasons stated earlier, are regarded
as independent, with the remaining Directors considered to provide
an objective viewpoint.

The Board has three established Committees: the Audit
Committee, the Nomination Committee and the Remuneration
Committee. In addition, the Executive Risk Management
Committee and the Executive Compliance Committee provide
operational input to Board meetings.

Each of the Non-Executive Directors due to retire is being put
forward for re-election at the Annual General Meeting.

A satisfactory evaluation of the effectiveness of the Board, its
Directors and Audit Committee has been conducted and reviewed.
This entailed an evaluation of the summarised results of a widely
used questionnaire.

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

Board

Remuneration
Committee

Audit
Committee

Nomination
Committee

9
10
11
0

10
8
11
1

3
3 1
n/a
0

3
n/a
3
n/a

8
8 1
6 1
n/a

8
n/a
9
n/a

2
n/a
n/a
0

2
n/a
2
n/a

Walker Crips Group plc | Annual Report and Accounts 2019
Page 27 |

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 26

Report by the Directors
on corporate governance matters
year ended 31 March 2019 | continued

Diversity and inclusion
The Board recognises the governance benefits that breadth of
perspective and diverse traits deliver. We remain committed
to promote talented individuals as executives on merit, both
internally and through recruitment, with our whole-hearted
encouragement supported by accessible training and regular open
communication between Directors and staff.

Nomination Committee
The Committee consists of David Gelber, Martin Wright,
Clive Bouch and Hua Min Lim. It considers and makes
recommendations to the Board for the appointment of
Directors. The Chairman, David Gelber, has no other significant
commitments which affect his ability to carry out his role
effectively. 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 its collective experience and skill set
are assessed on the appointment or departure of any Director.

The Committee takes full account of the Board’s policy on diversity
in considering any appointments within its remit, which encompass
gender, age, education, disability and ethnicity, and included the
appointment of female members of staff to senior management
roles within the Group over the course of the last two years.

The Nomination Committee met twice during the year to discuss
the appointment of Roderick Goddard as Group Secretary, to
review the composition of the Board consequent upon the
resignation of Mark Rushton on 30 January 2019 and to assess
as adequate the skills and competence of the all the remaining
members of the Board.

Audit Committee
During the year, the Audit Committee consisted of Clive Bouch,
who acted as its Chairman throughout, David Gelber and Martin
Wright. The Committee’s terms of reference include reviewing
the annual compliance plan and reports from the risk based
compliance monitoring programme, the external auditor’s
independence and objectivity and effectiveness of the audit
process, the internal audit plan and the effectiveness of the
internal audit function, as well as assessing the effectiveness of
the Group’s internal financial procedures and controls and the
reporting of results. The Chief Executive has attended meetings of
the Committee by invitation, as have the Group Finance Director
and the Heads of Group Risk and Compliance.

The Group’s internal and external auditors may also, and do,
attend Committee meetings by invitation. The Committee has
an ‘in camera’ discussion with BDO LLP, the external auditors, at
least once a year, without any Executive Directors being present,
to ensure that there are no unresolved issues of concern. The
Committee met nine times during the course of the year. The
external auditor discloses the level of fees received in respect
of the various services provided to the Group in addition to the
statutory audit and has confirmed to the Audit Committee that
the level of non-audit fees has not affected its independence.
A policy relating to the provision of non-audit services by the
external auditor has been agreed with the Audit Committee and
filed on the Group’s website. In summary, the Committee’s policy
is to use the most appropriate advisers for non-audit work, taking
account of the need to maintain independence.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 28

In August 2010, the Committee approved the outsourcing
of the Internal Audit function to 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 Martin Wright, who
acted as its Chairman throughout the year, Clive Bouch, David
Gelber and Hua Min Lim. The Committee is responsible for
agreeing the remuneration of the Executive Directors and other
key personnel of the Group. The full Board is responsible for
agreeing the remuneration of the Non-Executive Directors. The
Chief Executive and Group Finance Director attend certain parts
of Committee’s meetings by invitation. Further details of the
Group’s policies on Directors’ remuneration, service contracts and
share options are given in the Remuneration Committee report.

A staff profit share scheme which enables all employees to share
directly in the prosperity of the Group has been in operation for
several years. Profit before tax for the current year eligible for
this bonus calculation has fallen below the minimum threshold
and, accordingly, an amount of £nil (2018: £34,000) has been
allocated to the scheme for the year being reported. An employee
Share Incentive Plan incentivises employees to join in making
regular joint purchases of shares in the Parent Company to be
held in trust for a minimum of three years.

Non-Executive Directors
Re-election of Non-Executive Directors is subject to shareholders’
approval. The terms and conditions of appointment of Non-
Executive Directors, as well as the terms of reference for the Audit,
Remuneration, Nomination, Risk Management and Compliance
Committees, are available for inspection by any person at the
Group’s London head 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 Remuneration
Committee report.

Risk Management Committee
The Executive Risk Management Committee (“RMC”) was
established in 2015, in place of the Business Risk Panel, and
participants are selected based on experience and their skill set
which complements the other members of the RMC for optimal
risk management.

Underlining the Board’s commitment to maintaining sound risk
management and internal controls, we established the dedicated
and full-time role of Head of Group Risk and appointed one of
the Group’s most experienced senior managers, James Chalmers-
Smith, to the role. James also acts as the RMC’s Chairman.

The members of the Group Board and its companies’ boards are
responsible for ensuring that adequate systems and controls are
in place and that the businesses operate in accordance with all
relevant legal and regulatory requirements. The members of the

Walker Crips Group plc | Annual Report and Accounts 2019

Page 29 |

Group and its companies’ boards are responsible for the day to
day management of each entity.

The objectives of the RMC are to assist the Group and operating
companies’ boards in fulfilling their corporate governance
oversight responsibilities by evaluating, reviewing and reporting
on:
risk appetite, strategy and tolerance, including integration
with the Group’s culture, values and behaviour; and
the operation of risk management frameworks in the effective
mitigation of strategic, operational and external risks.

The RMC 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, thus
enabling strategies for the elimination, mitigation or avoidance of
risk to be formulated.

Each year the Board conducts a robust assessment of the
principal risks facing the Group, including those that threaten its
business model, future performance, solvency and liquidity.

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 Group. This process has been in operation throughout
the year and up to the date of approval of this Annual Report
and Accounts and is regularly reviewed by the Board which is
satisfied that it accords with the relevant guidance. Due to the
relatively small size of the Group there is a simple organisational
and reporting structure. Financial results and other information
are regularly reported to the Board throughout the year.

The Directors keep the Group’s internal control and risk
management systems under review by conducting an annual
assessment, involving dialogue with relevant senior managers,
of the effective design and operation of the controls to meet
key control objectives and to mitigate key risks. The Directors
consider that the controls and risk management procedures
established are appropriate for the Group. However, any
system of internal control and risk management 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;

Walker Crips Group
Corporate governance

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 Group and monitored through various
means including routine and special reviews by both the
external and internal auditors.

Compliance Committee
The Executive Compliance Committee monitors the Group’s
compliance with all regulatory and legal matters and considers
rule updates and guidance notes from the FCA, the Financial
Ombudsman Service, the Financial Services Compensation
Scheme and other UK regulatory bodies.

The Committee is also responsible for interpreting new rules,
guidance notes and regulations disseminated by the FCA and
other European regulatory bodies. In the current financial year,
the Committee remained engaged with MiFID II, and GDPR
compliance, and preparation for SM&CR.

The Committee also ensures all Compliance policies, procedures
and guidance are adequately and properly implemented.

Relations with shareholders
The Board recognises the importance of communications with
shareholders. The Chairman’s and Chief Executive’s Statements
in this Annual Report and Accounts include a detailed review of
the business and future developments.

The Chairman and Chief Executive are in frequent contact with
the major shareholders, the Lim family, with important factors
arising from these discussions communicated to the Board
immediately or by discussion at the subsequent Board meeting.

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.

Shareholders wishing to make contact directly with the Board
should email the Group Finance Director, Rodney FitzGerald.

Prospects
Although the Group has been profitable during a period of
significant growth in revenue and Assets Under Management
since 2012, the Directors consider the business is under-
performing and not delivering satisfactory risk adjusted returns
to shareholders. In the prior year, a full strategic review was
undertaken to address this following the change in leadership and
a renewed strategy has been approved.

The renewed strategy is three-pronged, building on the existing
core businesses of Investment Management and higher margin
alternatives, underpinned by both improved technology and a
focus on cost control as well as revenue growth to achieve the
desired improvement in margins and profitability. Importantly,
drawing on our CEO’s core technology competencies, the
strategy includes the new strategic imperative to develop

Walker Crips Group plc | Annual Report and Accounts 2019
Page 29 |

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 28

Report by the Directors
on corporate governance matters
year ended 31 March 2019 | continued

markets causing a reduction in commission and fee income of
20% and 15% respectively and the loss of major clients causing
a reduction in total revenue of 10%, two exposures plausible
in the financial sector. A further stress is then applied to these
scenarios, being the failure to launch the Group’s planned new
initiatives successfully.

The stress tests enable the Board to:

model a variety of external and internal events that affect
financial projections, identifying the potential impact of stress
events on income, costs, cash flow and capital; and
assess the effectiveness of Management actions that may be
taken to mitigate the impact of the stress events which include
reduction of expenditure and, if required, dividends.

Reverse stress testing is also performed which allows the Board
to assess scenarios and circumstances that would render its
business model unviable, thereby identifying potential business
vulnerabilities and ensuring the development of potential
mitigating actions and invocation of recovery plans.

During the year, the Group has continued to evaluate the
potential risks and opportunities of the UK leaving the European
Union. Although there continues to be limited clarity to the
outcome and implications of negotiations, the Directors do not
consider any potential impact on clients, our business or the wider
investment management sector will cause the Group to cease to
be viable. The Board will continue to monitor developments and
take necessary actions to manage the business risks and ensure
continuity of service to our clients.

Taking account of the current financial position, strategic plans,
principal risks and the Board’s assessment of the Group’s
prospects, the Directors have a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities
as they fall due over a period of at least three years.

Going concern
The Group continues to maintain a robust financial position.
Having conducted detailed cash flow and working capital
projections and appropriate stress-testing on liquidity, profitability
and regulatory capital, taking account of possible adverse
changes in trading performance, the Board is satisfied that the
Group is well placed to manage its business risks adequately.
The Directors have considered the Group’s ability to continue as
a going concern for a period of at least twelve months from the
date of approval of the financial statements and are satisfied
that it will be able to operate within the level of its current
financing arrangements and regulatory capital limits imposed
by the regulator, the Financial Conduct Authority (“FCA”).
Accordingly, the Board continues to adopt the going concern
basis for the preparation of the financial statements.

‘Software as a Service’ as a substantive business serving the
financial services sector. The new strategy of course is not
without risk relating to the speed to market and success of higher
margin financial and SaaS products.

As explained in the Chairman’s and CEO’s respective reports,
the experience in the last financial year has been one of
reduced trading volumes, in part reflecting market uncertainty
and investor sentiment, and delays in launching new initiatives
including the expensing of related costs. Encouragingly, client
retention remains strong, reflecting our service commitment, and
Assets Under Management comparable to the prior year, with
the positive impact of revised tariffs and fees beginning to feed
through in our results. The further increase in base rates during
the year has also complemented the results. Notwithstanding the
positives, the reduction in trading volumes means the Group’s
reported results show a significant decline in profitability year on
year and the final proposed dividend is reduced accordingly.

The Directors remain committed to the renewed strategy and
have confidence in the longer-term prospects for the Group,
with increased focus on cost control, process efficiencies and
maintaining the required investment in new initiatives. Given a
period of time is needed to develop and embed the new strategic
initiatives, current projections now anticipate their impact
emerging later in 2019/20 and the following year.

Viability statement
The Group prepares five-year projections for business planning
purposes, its ICAAP and stress testing. However, the Directors
continue to consider a three-year period remains appropriate
for the viability statement because it is aligned with that over
which the renewed strategy is expected to make an impact
and also takes into account the unpredictability inherent in the
financial sector. In particular, although on a reducing trend, and
impacted by market sentiment in the last year, volume sensitive
commissions remain a material proportion of the Group’s income.
The Directors do not plan to revise the three-year viability
statement period in future, but will keep it under review as the
renewed strategy takes effect, income sources evolve and the
related risks and rewards are assessed.

For the reasons explained above, for the purposes of the viability
statement, the Directors have assessed the outlook for the
Group over three years, a period longer than the twelve months
underpinning the ‘Going concern’ statement in accordance with
the 2016 UK Corporate Governance Code.

The assessment has relied on the latest annual budget, the
Group’s ICAAP, five-year forecasts and the prospects of the
business in the context of ensuring there is sufficient liquidity
and regulatory capital to meet the strategic growth plans of
the business; and evaluation of the Group’s principal risks and
uncertainties, including those that would threaten its business
model, future performance or solvency.

As a matter of good practice, and as part of the ICAAP, the
Group reviews a variety of risks and stress scenarios. Two
significant stress tests prepared by senior Management, after
considering the principal risks and uncertainties faced by the
Group, are the impact on revenues of a severe fall in global

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| Page 30

Walker Crips Group plc | Annual Report and Accounts 2019

Page 31 |

Walker Crips Group
Corporate governance

meetings. At the Committee’s request, other senior
Management are invited to present reports as required to
enable the Committee to discharge its duties. The internal and
external auditors are invited to and regularly attend meetings.

Committee activities
The work of the Committee during the year ended 31 March
2019, fell into three main areas:

1. Accounting and financial reporting
The Committee reviewed the:
a. annual and interim financial statements;
b. significant financial reporting policy disclosures and

judgements;
appropriateness of the preparation of the financial
statements on a going concern basis;

d. long-term viability statement prior to Board approval; and
Annual Report to consider whether, taken as a whole, it is
e.
fair, balanced and understandable and provides information
relevant to shareholders’ assessment of the Group’s
performance, business model and strategy.

2. Internal controls
The Committee:
a. monitored the integrity and effectiveness of the Group’s

internal financial controls through consideration of key risks
and mitigating controls, and reports and presentations from
internal audit, external audit, other subject matter specialists
and the Heads of Compliance and Risk;

b. assessed the scope and effectiveness of the systems

established to identify, manage, and monitor financial and
non-financial risk;
received reports on the finance team’s implementation of
a new general ledger for the Group’s principal operating
company, Walker Crips Investment Management;
d. reviewed the Group’s whistleblowing policy, and

monitored and reviewed the plans, work, resources and
effectiveness of the internal audit function together with its
recommendations and Management’s responses thereto;
and
reviewed actions taken in response to reports on internal
controls in order to address matters identified, with
particular focus on cyber security, the short term lending
business, the response to the corporate criminal offences
legislation and the implementation of a new accounting
system for Walker Crips Investment Management.

Audit
Committee report
year ended 31 March 2019

Composition and constitution
The Board, through its Nomination Committee, reviews
the composition of the Audit Committee (the Committee).
New appointments are made by the Board based upon the
recommendations of the Nomination Committee following
consultation with the Committee Chairman.

The Committee will comprise at least two independent Non-
Executive Directors with appropriate experience. During the year
the members of the Committee were Clive Bouch, David Gelber
and Martin Wright. David Gelber stepped down as a member
of the Committee at the end of the year in line with the 2018
Corporate Governance Code provisions.

The Board is satisfied that Clive Bouch, being a Chartered
Accountant, has relevant financial experience and competence
in accounting and auditing and that all members are financially
literate and have experience of corporate financial matters. The
Board is also satisfied that the experience of the members as a
whole means the Committee has competence relevant to the
sectors in which the Group operates.

The Committee’s Terms of Reference are available on the
Company’s website at www.wcgplc.co.uk.

Main responsibilities of the Committee
The Committee assists the Board in its oversight of the:
a. integrity and quality of financial reporting and disclosure;
b. selection and application of accounting policies and

practices;
adequacy and effectiveness of the risk management
systems and internal control environment;

d. Group’s compliance with legal and regulatory requirements

relevant to financial reporting and accounting;
appointment/reappointment, independence and
performance of the external auditor, including the quality
and effectiveness of the external audit;
integrity of significant financial returns to regulators;

f.
g. effectiveness of internal audit;
h. arrangements by which staff of the Group may, in

confidence, raise concerns about possible improprieties in
matters of financial reporting or other matters, and
other issues the Board may request the Committee’s
opinion on.

Meetings
There were nine formal meetings of the Audit Committee during
2018/19. The Committee members’ meeting attendances are
set out in the Report by the Directors on corporate governance
matters on page 27.

The Committee maintains a formal agenda of items that are
to be considered at each meeting and within the annual audit
cycle, to ensure that its work is in line with the requirements of
the 2016 Code and relevant guidance and all areas of its remit
are addressed. The items to be reviewed are agreed by the
Committee Chairman on behalf of his fellow members. Each
member has the right to require reports on additional matters
of interest.

The Executive Directors are invited to attend Committee

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Audit
Committee report
year ended 31 March 2019 | continued

3. External audit
The Committee:
a. reviewed BDO LLP’s (“BDO”) audit plan, audit approach, scope

Internal audit
The provision of internal audit activities continues to be
outsourced to Smith & Williamson LLP (“S&W”).

of work to be carried out and audit findings;

b. reviewed the auditor’s independence and objectivity, including

compliance with the Group’s non-audit services policy;
reviewed the effectiveness of the external audit; and

c.
d. discussed the findings of the FRC’s report on its audit quality

inspection of BDO with the engagement partner.

When reviewing the preparation, content and presentation of
the Annual Report, the Committee considers, and challenges
Management on actions to take account of, the matters raised
in the FRC’s letter to Audit Committee Chairs and Finance
Directors. There have been no interactions between the Company
and the FRC during the period.

The internal audit function reports directly to the Committee. The
internal audit plan and scope of work is reviewed and approved by
the Committee each year after being appraised by Management.
The budget is agreed between the Committee Chairman and
Group Finance Director having regard to the planned scope of
work. To support the effectiveness of assurance coverage across
the second and third lines of defence, internal audit now presents
a three year rolling plan.

The internal audit reports and recommendations are presented
to the Committee together with Management’s responses and
proposed actions for discussion and challenge.

External auditor
BDO was appointed at the AGM held in August 2016 following
a competitive tender and the audit of the 31 March 2019
financial statements is its third year as the Group’s auditor. The
Committee intends to conduct an audit tender process again
before the tenth anniversary of BDO’s appointment.

During the year, internal audit’s work included reviews of cyber
security, the short term lending business and response to the
corporate criminal offences legislation. The focus for internal
audit’s work in the coming year includes follow up on the
implementation of the new general ledger, MiFID II compliance
and operation of the Annual Management Charge system.

BDO reports to the Committee on its actions taken to comply
with professional and regulatory requirements to ensure its
independence. The Group’s non-audit services policy is published
on the website at www.wcgplc.co.uk. BDO also conducts a review
of the Group’s interim report and reports to the FCA on CASS
compliance. No other services have been provided by BDO
during the year. Details of external audit and non-audit fees are
disclosed in Note 9 to the financial statements on page 69.

The Committee monitors the effectiveness of the internal audit
service provided by S&W. The particular focus is on competence
and capabilities, subject matter expertise, timely reporting
and the quality of communication and recommendations. The
Committee also monitors any other services that S&W provides to
ensure the integrity and independence of the Group’s third line of
defence is not compromised. The Committee is satisfied with the
service provided by S&W and will continue with the arrangements.

The performance of the external auditor is monitored on an
ongoing basis and takes account BDO’s knowledge of our sector,
the quality and experience of the individuals assigned, the level
of engagement, effectiveness of communication, feedback from
Management and Committee members and published findings
of the FRC’s audit quality inspection reviews. As part of the
Committee’s deliberations on audit quality and effectiveness,
the Chair of the Committee communicates directly with the
external audit partner to discuss this important matter and share
feedback. The Committee is satisfied that BDO has performed an
effective audit.

Going concern and longer-term viability statement
Disclosures regarding the adoption of the going concern basis
of financial statement preparation and the Directors’ viability
statement are found on pages 30 and 58. In considering these
disclosures, the Committee reviewed the Group’s strategic
priorities, projections for the forthcoming year and medium term,
current business performance against those projections, the stress
scenarios set out in the Group’s ICAAP, current financial resources
and capital expenditure plans. The Committee challenged the
reasons for the period adopted for the Viability Statement and
the consideration given to key assumptions and dependencies.

The Committee reviews specific reports and good practice
suggestions presented by the external auditor. The Committee
discusses and acts upon the external auditor’s comments
relating to internal financial control and on the preparation of
the financial statements. The Committee reports any issues
directly to the Board after each meeting. The Committee also
meets with the external auditor without Management being
present at least once a year. The statutory audit has not resulted
in any significant control issues or matters that required material
adjustment to the accounts.

The Committee noted in particular:
the Group’s performance during the year and progress
regarding the renewed strategy as described in the Chairman’s
and CEO’s reports;
the projections include provisions for additional expenditure
by Management for planned initiatives to support the
renewed strategy;
the payment of an interim and proposed reduced final dividend
from the Group’s surplus cash resources and distributable
reserves;
67% of the Group’s regulatory financial resources at 31 March
2019 are held in cash or cash equivalents and there are no
material restrictions on accessing or utilising required liquidity
throughout the Group, including for the proposed final dividend
in respect of the year;

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Walker Crips Group
Corporate governance

the Group’s regulatory capital at 1 April 2019 exceeded its
regulatory capital requirement both pre and post adoption of
IFRS 16 and all regulated entities within the Group held capital
in excess of their solo regulatory requirements;
the Group has no structural debt obligations or critical
dependencies on overdraft working capital funding;
an intraday credit line is made available by our principal
bankers to enable daily net settlement of market transactions
in an orderly fashion;
ICAAP stress scenarios demonstrate Management actions to
mitigate the impact of significant sensitivities such as the loss

of key revenue producers, significant falls in markets, a large
rogue trade, an operational failure, losses from fraud or cyber
attack. In certain cases a key impact in such stress situations is
the potential elimination of dividend payments;
financial commitments and estimated future cash
consideration obligations as disclosed in Notes 30 and 34 on
pages 81 and 82 are planned for; and
Management’s assessment of the contingent liabilities
disclosed in Note 32 is that no obligation will arise.

Financial reporting and significant financial judgements
The main areas considered by the Committee are set out below and overleaf:

Matter considered

Action

Impairment of goodwill and intangible assets
The Consolidated Statement of Financial Position
includes goodwill of £4.4 million and client lists
and software licences of £7.3 million. These
principally arise on business combinations or
hiring of individuals or teams of Investment
Managers.

Management assess any impairment of goodwill by comparing the book value
of assets attributable to the CGUs to the higher of their fair value less cost to
sell or value-in-use. The Committee reviewed Management’s papers supporting
the conclusion there was no impairment, with particular challenge regarding the
assumptions used and adequacy of the disclosures (see Note 14). The Committee
also considered the procedures performed by the external auditors (see the
independent auditor’s report on page 50).

The goodwill arose on, and has been allocated to,
the acquisitions of London York Fund Managers
Limited £2.9 million and Barker Poland Asset
Management LLP £1.5 million, which continue
as identifiable cash-generating units (“CGUs”).
The year end amortised value of client lists
attributed to these CGUs are £nil and £2.6 million,
respectively, with the remaining balance being
attributable to individuals or teams of Investment
Managers hired.

The values attributed to client lists are amortised over their estimated useful lives,
being periods between three and twenty years. Management assess any further
indicators of impairment by reference to the continuing value of Assets Under
Management and Administration, peer comparisons, the loss of senior Investment
Managers, the loss rate of clients, and other causes of possible outflows. The
Committee reviewed Management’s supporting papers in respect of indicators
of impairment and amortisation periods and as there have been no impairment
triggers identified, no impairment review of these intangible assets is required. The
Committee also considered the procedures performed by the external auditors (see
the independent auditor’s report on page 49).

Provisions
The financial statements include provisions
and liabilities in respect of dilapidations (£0.54
million) and old outstanding legal cases,
customer complaints or claims (£0.48 million).
These amounts are estimated with varying
degrees of certainty.

Exceptional items
The Group classifies certain material items as
exceptional to allow a clearer understanding
of the underlying trading performance of the
business. In 2018/19, the Group has reported two
exceptional items which result in a net charge
to profit and loss of £0.032 million. In 2017/18,
exceptional items resulted in a net charge of
£0.016 million.

The Committee considered Management’s determination of the
amounts provided and concluded they were reasonable based upon the
information available.

The Committee also considered the procedures followed by the external auditors
and their findings, including those in respect of provisions for client claims (see
independent auditor’s report on page 49).

The Committee requested, received and considered explanations from
Management setting out the description of items that would fall to be exceptional
(see Note 7 on page 68), the reasons therefore and the proposed disclosures,
including the reconciliations provided in the CEO’s Statement, challenging these to
ensure clarity.

New accounting standards
New accounting standards IFRS 9 and IFRS
15 apply to the Group’s results for the year
ended 31 March 2019. IFRS 16 will apply to the
Group’s financial statements for the year ending
31 March 2020, with preliminary disclosures
included this year.

The Committee reviewed with Management the approach to determine the
impact and application of these standards including disclosures made in these
financial statements. The Committee also considered the work of the external
auditors and was satisfied with the conclusions and related disclosures. With the
introduction of IFRS 15 the Committee again challenged the appropriateness
and application of Group’s revenue recognition policies and remains satisfied
therewith.

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Audit
Committee report
year ended 31 March 2019 | continued

Performance evaluation
A formal evaluation of the Committee’s performance
was undertaken during the year based on feedback to a
questionnaire distributed to Committee members and
others who regularly attend Audit Committee meetings.
The feedback was positive overall with the Committee
considered to be operating effectively. Two areas identified
for improvement, and which are being addressed, were
prioritisation of key agenda items by rotating the order in
which finance and the second and third lines of defence
functions present at meetings, together with more timely
production of minutes.

During the year, Committee members have maintained
and developed their knowledge and awareness through a
combination of self-reading, practical experience, receiving
presentations and/or undertaking formal CISI modules. This
covered accounting and industry matters including IFRS 16,
Cyber Crime and effective Speak-Up and Whistleblowing
policies and procedures.

Approval
This report in its entirety has been approved by the
Committee and signed on its behalf by:

C. Bouch
Audit Committee Chairman
11 July 2019

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Remuneration
Committee report
year ended 31 March 2019

Walker Crips Group
Corporate governance

Remuneration report – introduction
This is the Remuneration Committee (“the Committee”) report
for the year ended 31 March 2019. It sets out the remuneration
policy and remuneration details for both the Executive and
Non-Executive Directors of the Group. It has been prepared in
accordance with Schedule 8 of The Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008
as amended in August 2013 (referred to below as Schedule 8).

Annual statement from the Chairman of the
Remuneration Committee
This has been a further year of consolidation for the Group, as
we continued to implement our technology-led strategy. Also, as
reported in the Chairman’s statement, the results for the year are
significantly down on the prior year having been impacted by, in
particular, lower trading volumes. Accordingly no bonuses have
been earned by or awarded to the Executive Directors.

The report is split into two main areas:
the statement by the Chairman of the Committee set out in
the adjacent column; and
the Annual Report

The Annual Report on remuneration provides details on
remuneration in the period. The Policy report was approved by the
shareholders at the 2017 Annual General Meeting for a period
of three years and is therefore not being put to the shareholders
at this year’s AGM. The policy was developed in conjunction
with the introduction of a new package for the incoming
Chief Executive. The policy is available for inspection on pages
40 to 44 of the Annual Report for 2017 on the Group’s website at
www.wcgplc.co.uk.

A resolution to approve the Annual Report on remuneration
will be put to this year’s Annual General Meeting to be held on
4 September 2019.

The Companies Act 2006 requires the auditor to report to the
shareholders on certain parts of the Directors’ remuneration
report and to state whether, in their opinion, those parts of the
report to be audited have been properly prepared in accordance
with Schedule 8. The parts of the Annual Report on remuneration
that are subject to audit are indicated in that report. The
statement by the Chairman of the Committee and the extract
of Policy report are not subject to audit.

During the year, all Executive Directors’ contracts, except that
for Guy Jackson who had already resigned, were amended to
include malus and clawback provisions in compliance with D1.1
of the 2016 UK Corporate Governance Code. No other significant
changes were made to the remuneration arrangements.

With Guy Jackson and Mark Rushton leaving the Board, its size
has reduced. Accordingly, Directors’ total emoluments have
reduced substantially from last year and there are no current year
bonuses eligible for payment, corresponding with the depressed
operating profit margins experienced during the year. There are
no LTIP arrangements in place at the year end.

As reported previously, our Group Finance Director, Rodney
Fitzgerald, is currently serving a period of phased retirement and
being remunerated proportionately. This arrangement is set to
conclude later this year after suitable succession arrangements,
which are at an advanced stage, are confirmed and in place.

The Committee continues to monitor the Group’s remuneration
arrangements to ensure that it maintains appropriate measures
and processes for annual and long-term incentives with an
emphasis on increasing the proportion of non-cash, share-based
bonus awards.

M. J. Wright
Remuneration Committee Chairman
11 July 2019

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Remuneration
Committee report
year ended 31 March 2019 | continued

Annual report on remuneration – subject to advisory vote by shareholders at the 2019 AGM
This part of the report has been prepared in accordance with Part 3 of Schedule 8 and Listing Rule 9.8.6. In accordance with the
regulations, the annual remuneration report will be put to an advisory shareholder vote at the 2019 AGM.

Remuneration for the year ended 31 March 2019 (audited information)
The table below sets out the remuneration received by the Directors in relation to performance in the year to 31 March 2019 together
with prior year comparisons. To aid transparency to our shareholders, a single figure for the total remuneration due, or which will
become due, to each Director is disclosed.

Taxable
benefits
£

Personal
pension
contributions
£

Share incentive
plan matching
share
contribution
£

Bonus
£

Name of Director

Executive
R. A. FitzGerald

S. K. W. Lam

G. J. B. Jackson1

M. J. W. Rushton2

Non-Executive
H. M. Lim

C. Bouch

M. J. Wright3

D. M. Gelber

R. A. Elliott4

Total

Fees/basic
salary
£

100,000
134,311

220,000
197,867

50,195
100,000

129,767
155,295

–
–

38,570
38,570

–
–

42,559
42,559

–
9,549

581,091
678,151

Year

2019
2018

3,970
3,108

1,717
1,664

1,078
2,988

1,961
2,276

10,000
13,431

22,000
19,787

3,514
49,800

9,084
10,870

–
8,000

–
15,120

–
–

–
59,852

–
–

Total
£

115,770
160,650

245,517
236,238

54,787
154,438

142,316
230,093

–
–

1,800
1,800

–
1,650

1,504
1,800

–
–

1,800
1,350

40,370
39,920

–
–

1,800
1,800

–
900

–
–

44,359
44,359

–
10,449

8,726
10,036

44,598
93,888

–
82,972

8,704
11,100

643,119
876,147

Executives can elect to sacrifice fixed or variable remuneration into a pension scheme of their choice.

1 G. J. B. Jackson resigned on 23 July 2018.
2 M. J. W. Rushton resigned on 30 January 2019 and payments in lieu of notice beyond his period of directorship from 1 February 2019 until 30 July 2019 totalled £85,596

have been expensed during the year but are not included in the table above.

3 Charles Russell Speechlys LLP received fees of £27,255 for the services of M. J. Wright who is a Partner.
4 R. A. Elliott retired on 6 September 2017.

Annual bonus for the year ended 31 March 2019
The Group operates a profit sharing pool from which the Executive Directors may receive a discretionary bonus linked to performance
which is described on page 41. The Chief Executive Officer has separate bonus arrangements which are described in the table on page
41. All bonuses have historically been paid in cash with no deferred component, however arrangements are now in place for future
bonuses payable to the Chief Executive to be awarded partly in shares deferred from sale for three years.

Based on the Group’s results and profitability, the Committee has not awarded any discretionary annual bonuses for the current year
payable in cash or equity to the Executive Directors. The minimum threshold for determining the bonus pool from which discretionary
awards may be made has not been achieved.

Outstanding share awards
There were no share options outstanding and not vested at 31 March 2019 and 31 March 2018. There are no share option schemes and
no Long Term Incentive Plans are in place for any of the Directors.

Deferred bonus
Deferred bonus arrangements were put in place for Sean Lam upon becoming CEO, as described on page 41. No awards have been
made during the year.

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Walker Crips Group
Corporate governance

Directors’ shareholding and share interests (audited information)
The interests of the Directors and their connected persons in the share capital of the Group are shown in the table below.

Director

H. M. Lim
R . A. FitzGerald
S. K. W. Lam
M. J. W. Rushton (resigned 30 January 2019)
G. J. B. Jackson (resigned 23 July 2018)
D. M. Gelber
C. Bouch
M. J. Wright

Beneficially
owned at
31 March
2018

Beneficially
owned at
31 March
2019

Beneficially
owned at
30 June
2019

10,069,163 10,629,836 10,704,836
323,829
586,390
–
–
175,097
31,360
16,129

306,491
485,319
128,913
16,961
155,935
16,733
16,129

320,367
582,928
–
–
171,635
27,898
16,129

Share Incentive Plan (“SIP”)
All employees of the Group are eligible to participate in the SIP following three months of service. Employees may contribute a
maximum of 10% of their gross salary in regular monthly payments (being not less than £10 and not greater than £150) to acquire
Ordinary Shares in the Parent Company (Partnership Shares). Partnership Shares are acquired monthly. For every Partnership Share
purchased, the employee receives one Matching Share. All shares to date awarded under this scheme have been purchased in the
market by the Trustees of the SIP and it is the intention of the Board to continue this policy in the year to 31 March 2020.

A total of 885,382 (2018: 754,838) new Ordinary Shares were issued to the 110 employees who participated in the SIP during the year.
At 31 March 2019, 3,876,390 shares were held in the SIP on their behalf, in the employee’s name. There were no forfeited shares not
allocated to any specific employee.

Matching Shares awarded to Directors and held under the SIP are as follows:

Director

R. A. FitzGerald
S. K. W. Lam
M. J. W. Rushton (resigned 30 January 2019)
G. J. B Jackson (resigned 23 July 2018)
D. M. Gelber
C. Bouch

31 March
2018

27,943
20,023
24,464
8,225
42,372
3,086

31 March
2019

22,849
20,914
–
–
47,685
8,397

Material contracts with Directors
Other related parties include Charles Russell Speechlys LLP, in which M. J. Wright, Non-Executive Director, is a Partner. Charles Russell
Speechlys LLP provides certain legal services to the Group on normal commercial terms and the amount paid and expensed during the
year (including the fees paid to the firm for Mr. Wright’s services as director) was £181,000 (2018: £195,000).

Commission of £3,354 (2018: £7,169) was earned by the Group from Phillip Securities (HK) Limited (a Phillip Brokerage Pte Limited
company, where H. M. Lim is a shareholder) having dealt on standard commercial terms. Additionally, certain overseas custody services
are provided by Phillip Securities Pte Ltd (in Singapore where H. M. Lim is a Director), again all on standard commercial terms.

Total pension entitlements
There are no defined-benefit Group pension schemes in operation. The Group contributes a percentage of the Executive Directors’
basic salaries into personal pension arrangements of their choice. Monthly employer contributions of 5-10% of base salary for Executive
Directors can be compared with a maximum of 5% paid for employees. In addition, salary sacrifice may be exercised in favour of
additional pension contributions.

Death-in-service benefits
Executive Directors are eligible for death-in-service benefit cover which is equal to four times the Director’s fixed remuneration.

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Remuneration
Committee report
year ended 31 March 2019 | continued

Loss of office payments
There were loss of office payments in lieu of notice of £85,599 relating to Mark Rushton in the year ended 31 March 2019 (2018: £nil).

Salary
Benefits
Pension contributions
Matching shares

Percentage increase in the remuneration of the Chief Executive

2018
£

2019
£

77,890
1,358
5,452
896

85,596

Change

Chief Executive
– salary of Rodney FitzGerald until 6 September 2017
– salary of Sean Lam from 6 September 2017
– bonus of Rodney FitzGerald
– bonus of Sean Lam
– benefits in kind of Sean Lam

Average per employee (£)
– salary
– bonus

1 As both years relate to different time periods, no change data has been shown.

72,992
124,767
8,000
15,120
1,664

–
220,000
–
–
1,717

n/a
n/a1
100% decrease
100% decrease
3.2% increase

36,770
8,550

37,619
7,831

2.3% increase
8.4% decrease

The table above shows the movement in salary and annual bonus for the Chief Executive between the current and previous financial
years, with both years time-apportioned to enable proper comparison, compared to that of the average employee. The Committee has
chosen this comparator as it provides a better reflection of the earnings of the average worker than the movement in the Group’s total
wage bill, since the latter is subject to distortion by movements in the number of employees. The average bonus per employee only
reflects bonuses paid to individuals working in profitable business units and is not an award to every member of staff, most of whom
would have received no bonus in a disappointing year.

Performance graph
The graph below shows a comparison between the Group’s total shareholder return (“TSR”) performance compared with the companies
in the FTSE Small Cap Index. The graph compares the value, at 31 March 2019, of £100 invested in Walker Crips Group plc on 31 March
2009 with the value of £100 invested over the same period 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.

Total shareholder return compared to FTSE Small Cap Index

450

400

350

300

250

200

150

100

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

WCG Plc TSR (£)

FTSE Small Cap Index (£)

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Walker Crips Group
Corporate governance

The table below shows the total remuneration figure for the Chief Executive during each of those financial years. The total remuneration
figure includes the annual bonus which was awarded based on performance in those years. No long-term incentive awards were made to
any of the Executive Directors during the year.

2009

2010

2011

2012

2013

2014

2015

2016

2017

Years ended 31 March
2019

2018

Total remuneration £175,420 £193,807 £199,592 £174,512 £267,934 £186,769 £187,176 £189,264 £196,119 £203,453 £245,517

Relative importance of the spend on pay
The table below shows the movement in spend on staff costs versus that in dividends.

Staff costs
Dividends paid

2018
£000

12,236
786

2019
£000

12,680
796

Increase

3.7%
1.3%

Remuneration Committee governance
The Committee is governed by formal terms of reference agreed by the Board. The terms of reference were reviewed during the year
to ensure they continued to accurately reflect the remit of the Committee. The Committee’s terms of reference can be viewed on the
Group’s website.

The members of the Committee during the last financial year and their attendance at the meetings of the Committee are shown in the
Report by the Directors on corporate governance matters. The Committee consists of three Non-Executive Directors, David Gelber, Martin
Wright (Chair of Remuneration Committee and Senior Independent Director) and Clive Bouch (Chair of Audit Committee).

None of the Committee’s members has any personal financial interests (other than as shareholders), conflicts of interest arising from cross
directorships or day-to-day involvement in running the business. The Committee determines the individual remuneration packages of each
Executive Director. The Chief Executive attends meetings by invitation and assists the Committee in its deliberations, except when issues
relating to his own remuneration are discussed. No Directors are involved in deciding their own remuneration. The Committee can call for
external reports and assistance from third party experts and independent legal advice may be sought as required.

The Committee reviews the remuneration policy for senior employees below the Board, as well as the policy on pay and conditions of
employees throughout the Group. These are considered when determining Executive Directors’ remuneration.

The Committee received advice during the year from external consultants, PricewaterhouseCoopers, who reviewed and made
recommendations on the 2018 Directors’ Remuneration Report, Pillar 3 Remuneration disclosures on our website and FCA Remuneration
Code application. During the period, the Committee met on three occasions. Matters that were considered and discussed included but were
not limited to:

The Remuneration Policy for Executive Directors, including structure and performance criteria for the annual divisional and bonus
pool arrangements.
Determination of remuneration of Executive Directors.
Determination of annual incentive payable to Executive Directors in respect of the year to 31 March 2019.
Oversight of remuneration arrangements for senior Executives.
Review of the Group’s Pillar 3 remuneration disclosures.
Review of the Committee’s terms of reference.

External directorships
None of the Executive Directors held external directorships during the current and prior year.

How the remuneration policy will be applied for the year from 1 April 2019 onwards
The base salary reviews in 2018 and 2019 resulted in the decision to award no increases to the salaries of the Executives.

S. K. W. Lam
R. A. FitzGerald1
M. J. W. Rushton (resigned 30 January 2019)
G. J. B Jackson 2 (resigned 23 July 2018)

1 Represents part-time attendance based on an annual salary of £150,000.
2 Excludes salary taken as pension.

Salary as at
31 March
2018

£220,000
£100,000
£155,295
£100,000

Salary as at
31 March
2019

£220,000
£100,000
–
–

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Remuneration
Committee report
year ended 31 March 2019 | continued

Fees for the Chairman and Non-Executive Directors
The Group’s approach to setting Non-Executive Directors’ fees is detailed in the Policy report. These fees are reviewed periodically by
the Board. A summary of current fees for Non-Executive Directors is as follows:

Chairman
Senior Independent Director
Audit Committee Chairman

Year ended
31 March
2019
£

42,559
27,255
38,570

D. M. Gelber was appointed as Non-Executive Chairman of the Group 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 Group’s Articles of Association. His remuneration is now a fee of £42,559 per annum, plus
reimbursement of expenses incurred on behalf of the Group, plus a contribution by the Group to the share incentive plan.

M. J. Wright, Senior Independent Director, 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 Group’s Articles of Association. His fees are now £27,255 per annum, plus VAT, plus expenses. His fees
are payable to Charles Russell Speechlys LLP quarterly in arrears.

H. M. Lim has no formal service agreement with and receives no remuneration from the Group.

C. Bouch was appointed as a Non-Executive Director and later as Chairman of the Audit Committee by a letter agreement dated
24 March 2017 for a term commencing on 31 March 2017 of not less than three years, save that the appointment is terminable
by either party on at least three months’ notice in writing or otherwise in accordance with the Group’s Articles of Association. His
remuneration is a fee of £38,570 per annum, plus reimbursement of other specific expenses incurred on behalf of the Group and
contribution by the Group to the share incentive plan.

Directors’ contracts are available for inspection at the Annual General Meeting or on appointment at our London head office.

LTIP for the Chief Investment Officer
There are no LTIP arrangements in place at 31 March 2019.

LTIP arrangement previously held for the Chief Investment Officer were discontinued on 30 January 2019 with no entitlements
outstanding. They are summarised briefly in the table of remuneration packages on page 41.

Statement of shareholder voting
At last year’s AGM, the Directors’ remuneration report received the following proxy votes from shareholders:

2018 AGM
Votes in favour
Votes cast against
Abstentions

Number

Percentage

14,392,574
24,000
–

99.8%
0.2%
0%

The policy is available for inspection on pages 40 to 44 of the Annual Report for 2017 on the Group’s website at www.wcgplc.co.uk.

2017 AGM
Votes in favour
Votes cast against
Abstentions

Number

Percentage

14,499,768
20,000
28,000

99.7%
0.1%
0.2%

Scope
The Committee determines the Group’s policy on the remuneration of the Executive Directors and other members of executive
Management, including employees designated as code staff under the FCA remuneration Code. The Committee’s terms of reference are
available on the Group’s website.

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Walker Crips Group
Corporate governance

Fees policy for the Board Chairman and other Non-Executive Directors
The Board as a whole will determine the remuneration of the Non-Executive Directors, with Non-Executive Directors exempting
themselves from discussions and voting.

The Committee takes into account the following objectives in determining the Directors’ remuneration policy:
this policy has been designed to support the delivery of the Group strategic business objectives and corporate values, by attracting,
retaining and motivating talented Directors and senior Management of the calibre to manage the business successfully;
to reward and motivate good and above average performance; and
to comply with the requirements of the FCA Remuneration Code after taking account of disapplication of parts of the Code
determined by proportionality guidelines set by the FCA.

Key principles
to adopt a structure of fixed and variable remuneration that will take account of Group performance and will motivate Directors and
staff to develop and expand the business responsibly;
to avoid creating incentives for excessive risk taking that exceeds tolerated risk levels of the Group or its risk appetite;
to adopt only incentive plans which align with the Group’s business strategy;
to make proportionate fixed and variable awards that are governed by this policy which should not prevent the Group from meeting
its capital requirements and consolidating its capital base;
to ensure that all types of remuneration arrangement operated by the Group outlined in this policy are regularly reviewed;
where appropriate to reward exceptional contribution with specific arrangements;
to apply consistency with the general remuneration culture prevalent throughout the Group; and
to ensure that the Group does not pay variable remuneration through vehicles that facilitate avoidance of local regulation or
tax evasion.

The following tables summarise the components and policy for Directors’ remuneration packages which was applied during the year
including performance measures for bonus entitlement:

Element

Purpose and link to strategy

Operation

Maximum opportunity

Performance conditions

Annual increases are
normally in line with those
provided to the wider
employee population
unless there is a change
in the Director’s role or
responsibility or there is
a significant divergence
from market comparatives
of similar executive
directorship roles.

Except in the case of the
Chief Executive there is
no maximum, but the
Committee will exercise
its discretion responsibly
having regard to the
interests of shareholders.

The Chief Executive’s
discretionary bonus is
capped at a maximum of
100% of basic salary.

Reviewed annually,
effective 1 July.
Agreed when results
for the previous year
have been finalised.

Determined after
results for the
financial year are
signed off with
Group profit before
tax being a primary
metric. A discretionary
bonus of an amount
up to a maximum
rate of 15% of profits
is pooled partly for
allocation to the
Executive Directors,
other than the Chief
Investment Officer
who resigned on
30 January 2019.

Salary

Reflect the value of
the individual and
their role. Reflect skills,
experience over time.
Provide an appropriate
level of basic fixed
income avoiding
excessive risk arising
from over reliance on
variable income.

Bonus

Incentivise annual
delivery of financial
and operational goals.

Relatively high
potential rewards for
achieving demanding
targets for Group profit
before tax which is
based on the Board-
approved strategy for
increasing profit and
shareholder value.

A discretionary bonus
may be awarded to
the Chief Executive
on achievement of
stretching performance
targets and fulfilment
of certain behavioural
and numeric criteria.

n/a.

Specific awards agreed on an individual
basis consistent with the key principles. A
general discretionary award taken from the
pool will be allocated based on performance
measured over the financial year, including
achievement of specific strategic-based
objectives and upon profit before tax of
the Group for the Walker Crips Group plc
Executive Board. The pool consists of 5%
of Group profit before tax in excess of
£478,107 and 15% above profit for the year
in excess of £1,195,268.

The Chief Executive must meet the following
criteria which may vary from year to year:
profitability growth, new initiatives, efficient
use of capital, achieve strategic objectives,
liquidity and growth in share price,
compliance with high standards of conduct,
risk and regulation.

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Remuneration
Committee report
year ended 31 March 2019 | continued

Element

Purpose and link to strategy

Operation

Maximum opportunity

Performance conditions

Share
Incentive
Plan

Long
Term
Incentive
Plan
(LTIP)

A tax-efficient HMRC-
approved scheme which
allows the Group to make
contributions equal to
those by employees,
including Directors, to
purchase shares in the
Company.

Aligned to main strategic
objective. Based on the
Company’s measurable
key statistics (e.g. NAV
growth).

Pension

Provide modest retirement
benefits. Opportunity for
Executive to contribute to
their own retirement plan.

Annual contributions are made through
the payroll and tax benefits accrue after
three years.

None as not considered
material.

Maximum
contribution of
£1,800 per annum
by Director and
Company.

At the year end there were no LTIPs in
place following the discontinuance of
the only arrangement for one Executive
Director, the CIO, Mark Rushton who
resigned on 30 January 2019. Further
LTIP awards will not be made to other
Executive Directors unless separately
approved by shareholders but may be
granted to new Executive Directors.

Contribution to pension scheme of
Executive’s choice. HMRC-approved
salary sacrifice arrangement.

There is no
maximum
opportunity.

Performance was
measurable over ten
years with an award
of 5% of the growth in
the value of our largest
revenue generator,
Walker Crips Investment
Management Limited.

n/a.

Monthly employer
contribution of
5-10% of base
salary compared
to a maximum of
5% for employees.
Salary sacrifice
for employee
contribution.

Other
Benefits

Provide additional fringe
benefit.

Life Assurance – four times basic salary.

Continuous upon
recruitment.

n/a.

Non-Executive Directors

Fees

Reflects the skills and
experience brought by the
Director and their role.

Medical Insurance for family to age 24.
Permanent Health Insurance.

Participation in Group Share Incentive
Scheme.

Fees consist of a base Board fee and
fees for Chairmanship of Committees.
Account is taken of practice adopted
by similar-sized companies and
time commitment.

Benefits

Provide market-related
benefits to Non-Executive
Directors.

Benefits include reimbursement of
expenditure incurred in connection with
their duties.

Approval
This report was approved by the Committee and the Board and signed on its behalf by:

n/a.

Fees are reviewed
annually but
not necessarily
increased. Increases
are normally in line
with inflation.

Reasonable costs.

n/a.

M. J. Wright
Remuneration Committee Chairman
11 July 2019

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Directors’
report
for the year ended 31 March 2019

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 31 March 2019.

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

2019
£000

11,122
333
(796)
10,659

2018
£000

11,163
745
(786)
11,122

The Directors recommend a final dividend of 0.33 pence per
Ordinary Share to be paid on 13 September 2019 to Ordinary
Shareholders on the register on 23 August 2019.

Capital structure
Details of the Group’s share capital are shown in Note 26. The
Group 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 Group.

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 Group’s shares that may result in restrictions on the
transfer of securities or on voting rights.

Where shares have been issued as consideration for new clients to
investment advisers upon commencement with the Group, these
shares are restricted from sale for periods of four to six years.

No person has any special rights of control over the Group’s share
capital and all issued shares are fully paid.

With regard to the appointment and replacement of Directors,
the Group is governed by its Articles of Association, the UK
Corporate Governance Code, the Companies Acts and related
legislation. The Articles themselves may be amended by a special
resolution of the shareholders.

Brief biographies of the Directors eligible and standing for
election at the Annual General Meeting are set out on pages 24
and 25.

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
We are committed to the principle of equality and equal
opportunities in employment. We are opposed to any form of
less favourable treatment or financial reward through direct or
indirect discrimination, harassment, victimisation to employees
or job applicants on the grounds of age, race, religion or belief,

Walker Crips Group
Corporate governance

marriage or civil partnership, pregnancy or maternity, sex, sexual
orientation, gender reassignment or disability.

We recognise our obligations under the Equality Act 2010
and The Codes of Practice published by the Equality and
Human Rights Commission and the European Commission
for the elimination of discrimination on the grounds of age,
disability, gender reassignment, race, religion or belief, sex,
sexual orientation, marriage and civil partnership, maternity
and pregnancy and for the elimination of discrimination in pay
between men and women who do the same work.

We report that at the end of 2019: No Directors of the Group’s
Parent Company were female (2018: nil); 31% of senior
managers, being individuals with responsibility for planning,
directing or controlling, were female (2018: 30%); and
45% of the Group’s employees were female (2018: 38%).

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 Group’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.

Insurance and indemnification of Directors
The Group has put in place insurance to cover its Directors and
officers which gives appropriate cover for legal action brought
against any of them. In addition, the Group’s Articles of
Association provide for the ability of the Group to grant qualifying
third-party indemnity provisions (as defined in section 234 of the
Companies Act 2006) for the benefit of the Directors in relation
to certain losses and liabilities which they may incur (or have
incurred) in connection with their duties, powers or office.

Ordinary and special business
Resolutions will be placed before the Annual General Meeting to
confer authority on the Group to allot equity securities of up to
an aggregate nominal amount of £946,162 and to authorise and
empower the Group to allot equity securities.

The Companies Act 2006 permits a public Group to purchase
its own shares in accordance with the powers contained in its
Articles of Association and with the authority of a resolution of
shareholders. The Directors believe that the Group should be
authorised to take advantage of these provisions and, therefore,
pursuant to the power contained in the Group’s Articles of
Association, it is intended to propose a special resolution at the
forthcoming Annual General Meeting to confer authority on
the Group to purchase up to a maximum in aggregate of 10%
of the Ordinary Shares of 6 2/3 pence each in the share capital
of the Group at a price or prices which will not be less than 6 2/3
pence and which will not be more than 5% above the average

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Directors’
report
for the year ended 31 March 2019 | continued

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.

Carbon emission reporting
Greenhouse Gas (GHG) emissions data for the year ended
31 March 2019:

The authority was given at the last Annual General Meeting of
the Group 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 Group
to do so. Shareholders should note that any Ordinary Shares
purchased by the Group will either be cancelled and the number
of Ordinary Shares in issue will accordingly be reduced or will be
held as treasury shares.

Financial instruments and risk management
The risk management objectives and policies of the Group are set
out in Note 24 to the financial statements.

Substantial shareholdings
As at 31 March 2019, there were no interests, excluding those
of Directors, in excess of 3% of the Ordinary Share capital of
the Group.

L . W. S. Lim
L. W. Y. Lim
L. W. J. Lim

Number

Percentage

3,023,705
3,023,705
3,023,703

7.10
7.10
7.10

As at 30 June 2019, the following interests, excluding those of
Directors, in excess of 3% of the Ordinary Share capital of the
Group were held:

L. W. S. Lim
L. W. Y. Lim
L. W. J. Lim

Number

Percentage

3,023,705
3,023,705
3,023,703

7.10
7.10
7.10

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.

Scope 1 – combustion of fuel
Scope 2 – purchased electricity

Total

2019
tCO²e

7
86

2018
tCO²e

17
198

215

Total emissions per employee

0.43

1.00

The Greenhouse Gas Protocol assessment methodology and UK
Government conversion factors for Group reporting have been
applied to calculate the emissions statistics in relation to material
sources of emissions for which the Group is responsible.

The reporting boundary used for collation of the above data
is consistent with that used for consolidation purposes in the
financial statements.

The following sources of emissions are not deemed to be material
for the purposes of preparing this disclosure:

vehicle use; and
air conditioning.

Audit Information
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 Group’s auditor is unaware;
the Director has taken all the steps that they ought to have
taken as a Director in order to make themselves aware of any
relevant audit information and to establish that the Group’s
auditor is aware of that information; and
a resolution to reappoint the auditor, BDO LLP, will be put to
the AGM on 4 September 2019.

Approval
This report has been approved by the Board and signed on its
behalf by:

R. A. FitzGerald FCA
Director
11 July 2019

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Walker Crips Group
Corporate governance

Website publication
The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on a website.
Financial statements are published on the Group’s website in
accordance with legislation in the UK governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Group’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of
the financial statements contained therein.

Directors’ responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
The Group financial statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union and Article 4 of
the IAS Regulation and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the Group.
The Annual Report includes a fair review of the development
and performance of the business and the financial position of
the Group and the Parent Company, together with a description
of the principal risks and uncertainties that they face.

Approval
This report has been approved by the Board and signed on its
behalf by:

R. A. FitzGerald FCA
Director
11 July 2019

Statement
of Directors’ responsibilities
for the year ended 31 March 2019

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 have elected
to prepare the Group 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 financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and its subsidiaries and of
the profit or loss for the Group for that period.

In preparing these financial statements, the Directors are
required to:
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether the financial statements of the Group have been
prepared in accordance with IFRSs as adopted by the European
Union, subject to any material departures disclosed and
explained in the financial statements;
state whether applicable UK Accounting Standards have been
followed in the preparation of the Group financial statements,
subject to any material departures disclosed and explained in
the financial statements;
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will
continue in business; and
prepare a Directors’ report, a Strategic report and Directors’
remuneration report which comply with the requirements of
the Companies Act 2006.

The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Group and enable them to ensure
that the financial statements comply with the Companies Act
2006 and, as regards the Group financial statements, Article 4 of
the IAS Regulation. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.

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

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Financial
statements

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

58 Notes to the accounts

Company balance sheet

Company statement of changes in equity

85 Notes to the Company accounts

94 Notice of Annual General Meeting

101 Form of proxy

103 Officers and professional advisers

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Independent
auditor’s report
to the members of Walker Crips Group plc

Opinion
We have audited the financial statements of Walker Crips Group plc (the “Parent Company”) and its subsidiaries (the “Group”) for the
year ended 31 March 2019 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, Parent Company balance sheet, the Parent Company statement of changes in equity and notes to the financial statements,
including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and
International Financial Reporting Standards (“IFRSs”) as adopted by the European Union. The financial reporting framework that
has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting
Standards including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).

In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March
2019 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006; and, as regards the
Group financial statements, Article 4 of the IAS Regulation.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the Annual Report, in relation to which the ISAs (UK) require us to
report to you whether we have anything material to add or draw attention to:
the disclosures in the Annual Report set out on pages 18 to 19 that describe the principal risks and explain how they are being
managed or mitigated;
the Directors’ confirmation set out on pages 28 to 29 in the Annual Report that they have carried out a robust assessment of the
principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity;
the Directors’ statement set out on page 30 in the financial statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting in preparing the financial statements and the Directors’ identification of any material
uncertainties to the Group and the Parent Company’s ability to continue to do so over a period of at least twelve months from the
date of approval of the financial statements;
whether the Directors’ statement relating to going concern required under the Listing Rules in accordance with Listing Rule 9.8.6R(3)
is materially inconsistent with our knowledge obtained in the audit; or
the Directors’ explanation set out on page 30 in the Annual Report as to how they have assessed the prospects of the Group, over

what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
that we identified including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Walker Crips Group
Financial statements

Matter

Audit response

Revenue recognition (Notes 2 and 4)
The Group’s revenue of £30,458,000 consists of fees
from two distinct components, broking income and
non-broking income.

Revenue recognition is considered to be a significant
audit risk as it is a key driver of return to investors and
because incomplete or inaccurate income could have a
material impact on the Group’s results.

In respect of broking income there is a risk that the IT
platform may not capture the trades correctly.

In respect of non-broking income, namely
management fees, there is a risk that the management
fee may be calculated incorrectly as a result of
incorrect tariffs being used.

We responded to this matter by performing a range of tests of detail as set out
below, covering all revenue streams.

Our audit testing included, but was not restricted to:
Broking income
Controls testing to test operating effectiveness, was undertaken on the
significant controls in place over broking revenue, including automated controls
and manual controls.
We traced a sample of transactions to supporting contract notes and to either
bank statements or deductions from client accounts.

Non-broking income
Using data analytics, we undertook a recalculation of quarterly management
fees earned during the year. This recalculation was based on the fee tariff
per client and the value of Assets Under Management (“AUM”). A sample
were traced to invoice/investor pack and we ensured that the fees have been
deducted from client accounts.
For AUMs, controls testing was undertaken on the significant controls in
place over the existence and valuation of securities, including the automated
controls and manual controls.
For a sample of AUMs these were agreed to an independent third party source,
for example Bloomberg.
In respect of fee tariffs, we agreed a sample to either client agreements or fee
tariff confirmations letters issued by the respective company.
In respect of accrued fees, testing was performed on a sample basis to ensure
that revenue was recognised in the correct period.

Recognition and impairment of client lists
intangible assets (Notes 2 and 15)
Acquired client lists of £7,234,000 (2018: £7,790,000)
are capitalised.

Our audit testing included, but was not restricted to:
We obtained and challenged Management’s technical analysis in respect of
compliance with the capitalisation criteria by benchmarking to comparable
companies and assessing the requirements of IAS38.

Judgement is exercised in determining whether the
consideration paid in respect of acquiring the client
list meets the criteria for capitalisation and if so, then
the appropriate period for the capitalised cost to be
amortised over.

Judgment is also exercised in determining the
underlying assumptions used in the impairment review.

Management have completed an assessment on
each intangible asset at the year end which involved
undertaking a review for indicators of impairment.

These risks are explained further in Note 3 Key Sources
of Estimation Uncertainty and in the disclosures in
Note 15.

Provisions for client claims (Notes 2 and 25)
Provisions made for client claims are based on
Management’s assessment of the likelihood of
outcomes of individual cases whilst taking into
consideration factors such as the level of insurance
cover and the progress of any claims referred to the
Financial Ombudsman Service.

Provisions for client claims is considered a significant
audit risk as judgment is involved in determining
whether a provision is required to be accounted for.

In respect of the impairment assessment we challenged this assessment by
undertaking the following tests:
We compared the Useful Economic Life (“UEL”) of the intangibles against the
actual client attrition rates.
We challenged Management’s assessment of indicators of impairment by
comparing to AUM and revenue generated from the intangible asset.

As part of our audit testing we obtained and challenged Management’s analysis
of claims and for a sample, have agreed this to the relevant correspondence and
to the complaints register.

We also:
Reviewed correspondence from the Group’s legal advisors where applicable, as
well as with the Financial Ombudsman Service.
Reviewed the level of insurance coverage in place and correspondence with
brokers or underwriters.
Reviewed the accuracy of the provisioning basis in prior years.
Considered the completeness of the provisions for client claims through review
of Board minutes, complaints registers and compliance reviews.

Walker Crips Group plc | Annual Report and Accounts 2019
Page 49 |

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 48

Independent
auditor’s report
to the members of Walker Crips Group plc | continued

Matter

Audit response

Impairment of goodwill (Notes 2 and 14)
Goodwill of £4,388,000 (2018: £4,388,000) relates to
the acquisition of the London York cash generating
unit and the acquisition of the Barker Poland Asset
Management LLP cash generating unit.

Impairment of goodwill is considered to be a
significant audit risk as judgment is exercised in
determining the underlying assumptions used in the
annual impairment reviews which are required to be
carried out by Directors. The assumptions include
the discount rate, operating margin and growth rate,
which gives rise to the risk of material misstatement
in the carrying value of goodwill. There is also a risk
over the completeness of the disclosures within the
financial statements.

These risks are explained further in Note 3 Key
Sources of Estimation Uncertainty and in the
disclosures in Note 14.

As part of our audit testing we challenged Management’s assessment of
goodwill and the related impairment reviews by undertaking the following
procedures:
We tested the integrity of the valuation models.
With the assistance of our valuation specialists we reviewed the assumptions
used in the calculations and evaluated these assumptions, in particular
the discount rate used to discount expected future cash flows and the
assumptions associated with the ‘fair value’ less cost of disposal basis.
We assessed Management’s sensitivity analysis showing the impact of a
reasonably possible change in impairment assumptions and we performed
sensitivity analysis using a range of acceptable discount factors. The discount
rate used is a pre-tax Weighted Average Cost of Capital (“WACC”) that reflects
current market assessments of the time value of money and the risks specific
to the cash-flows. We benchmarked individual components of the WACC to
current market rates.
We corroborated the calculations in the valuation models to forecast which we
have examined as part of the going concern review, to check for consistency.
We compared the results of the cash generating units against forecasts made
in the prior year.
We assessed the adequacy of disclosure within the financial statements.

Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of the identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Materiality measure

Purpose

Key considerations and benchmarks

Quantum (£)

Financial statement
materiality (6.5% of the
three year average, adjusted
profit before tax.

Assessing whether the financial
statement as a whole present a
true and fair view.

A principal consideration for members of the
Parent Company in assessing the financial
performance of the Group.

£63,000
(31 March 2018:
£53,000)

Normalises profit to reflect the underlying profit
of the core business, excluding items which are
considered to be one off occurrences and are
outside the normal course of business.

Financial statement materiality.
Risk and control environment.
History of prior errors.

£38,000
(31 March 2018:
£32,000)

Performance materiality
(60% of financial statement
materiality).

Lower level of materiality
applied in performance of the
audit when determining the
nature and extent of testing
applied to individual balances
and classes of transactions.

Parent Company financial
statement materiality
(80% of Group materiality).

Assessing whether the financial
statements as a whole present
a true and fair view.

A principal consideration for members of the
Parent Company in assessing the financial
performance of the Group.

£50,500
(31 March 2018:
£50,000)

We agreed with the Audit Committee that we would report to the Committee all individual audit differences in excess of £1,000 (31 March
2018: £1,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit
Our audit approach was developed by obtaining an understanding of the Group’s activities and the overall control environment. Based on
this understanding we assessed those aspects of the Group’s transactions and balances which were most likely to give rise to a material
misstatement.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the Directors made subjective judgements.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 50

Walker Crips Group plc | Annual Report and Accounts 2019

Page 51 |

Walker Crips Group
Financial statements

Audits of eighteen components were performed at a materiality level calculated by reference to a proportion of Group materiality
appropriate to the relevant scale of the business concerned. Component materiality ranged from £60,000 to £1,000. All components
are based in the UK and the Group audit team had responsibility for the audit of all components included in the consolidated financial
statements. Six of the components were subject to full scope audits under ISA600. For components where full scope audits were not
undertaken, the Group audit team undertook audit procedures on material balances.

We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates, and
considered the risk of acts by the Group which were contrary to applicable laws and regulations, including fraud. These included but were
not limited to compliance with Companies Act 2006, United Kingdom Generally Accepted Accounting Practice where applicable and IFRSs
as adopted by the European Union, the Financial Conduct Authority’s regulations and the Listing Rules.

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion.

We focused on laws and regulations that could give rise to a material misstatement in the financial statements. Our tests included, but
were not limited to:
agreement of the financial statement disclosures to underlying supporting documentation;
enquiries of Management;
review of minutes of Board meetings throughout the period; and
considering the effectiveness of the control environment in monitoring compliance with laws and regulations

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits
we also addressed the risk of Management override of internal controls, including testing journals and evaluating whether there was
evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

Other information
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report
other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to
report that fact.

We have nothing to report in this regard.

In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the
following conditions:

Fair, balanced and understandable, set out on page 45 – the statement given as to why the Annual Report does not include a
statement by the Directors that they consider the Annual Report and financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and
strategy, is materially inconsistent with our knowledge obtained in the audit; or
Audit Committee reporting, set out on page 31 – the section describing the work of the Audit Committee does not appropriately
address matters communicated by us to the Audit Committee; or
Directors’ statement of compliance with the UK Corporate Governance Code, set out on page 27 – the parts of the Directors’
statement required under the Listing Rules relating to the Parent Company’s compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure
from a relevant provision of the UK Corporate Governance Code.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 50

Walker Crips Group plc | Annual Report and Accounts 2019
Page 51 |

Independent
auditor’s report
to the members of Walker Crips Group plc | continued

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
the Parent Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with
the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 45, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed on 3 August 2016 to audit the financial statements for the
year ending 31 March 2017 and subsequent financial periods. The period of total uninterrupted engagement is three years, covering the
years ending 31 March 2017 to 31 March 2019.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain
independent of the Group and the Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.

Neil Fung-On (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
United Kingdom
11 July 2019

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 52

Walker Crips Group plc | Annual Report and Accounts 2019

Page 53 |

Consolidated
income statement
year ended 31 March 2019

Revenue
Commissions and fees paid
Share of after tax profits of joint venture

Gross profit

Administrative expenses
Exceptional items

Operating profit

Investment revenue
Finance costs

Profit before tax
Taxation

Profit for the year attributable to equity holders of the Parent Company

Earnings per share
Basic
Diluted

Walker Crips Group
Financial statements

Notes

4
6
17

9
7

8
8

13
13

2019
£000

30,458
(9,673)
14

2018
£000

30,456
(10,001)
7

20,799

20,462

(20,365)
(32)

(19,556)
(16)

402

890

90
(3)

489
(156)

333

41
(7)

924
(179)

745

0.78p
0.78p

1.77p
1.75p

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 52

Walker Crips Group plc | Annual Report and Accounts 2019
Page 53 |

Consolidated
statement of comprehensive income
year ended 31 March 2019

Profit for the year

Total comprehensive income for the year attributable to equity holders of the Parent Company

2019
£000

333

2018
£000

745

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 54

Walker Crips Group plc | Annual Report and Accounts 2019

Page 55 |

Consolidated
statement of financial position
as at 31 March 2019

Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Interest in joint ventures
Investments – available for sale
Investments – fair value through profit or loss

Current assets
Trade and other receivables
Investments – fair value through profit or loss
Investments – held for trading
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Current tax liabilities
Deferred tax liabilities
Bank overdrafts
Provisions
Shares to be issued – deferred consideration

Net current assets

Long-term liabilities
Deferred cash consideration
Dilapidation provision
Landlord contribution to leasehold improvements

Net assets

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

Equity attributable to equity holders of the Parent Company

Walker Crips Group
Financial statements

Group
2019
£000

4,388
7,262
2,520
44
–
51

Group
2018
£000

4,388
7,827
2,706
47
203
–

14,265

15,171

35,785
1,005
–
6,916

43,706

57,971

37,427
–
1,851
8,367

47,645

62,816

(34,095)
(178)
(317)
(127)
(484)
–

(38,567)
–
(341)
–
(461)
(171)

(35,201)

(39,540)

8,505

8,105

(47)
(542)
(460)

(1,049)

21,721

2,888
3,763
(312)
10,659
4,723

21,721

(197)
(543)
(523)

(1,263)

22,013

2,861
3,674
(312)
11,122
4,668

22,013

Notes

14
15
16
17
18
18

20
18
18
21

22
23
25

34
25

26
26
27
27
27

The financial statements of Walker Crips Group plc (Company registration no: 01432059) were approved by the Board of Directors and
authorised for issue on 11 July 2019.

Signed on behalf of the Board of Directors

R. A. FitzGerald fca
Director
11 July 2019

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 54

Walker Crips Group plc | Annual Report and Accounts 2019
Page 55 |

Consolidated
statement of cash flows
year ended 31 March 2019

Operating activities
Cash (used)/generated by operations
Tax received/(paid)

Net cash (used)/generated by operating activities

Investing activities
Purchase of property, plant and equipment
Sale/(purchase) of investments held for trading
Purchase of available-for-sale investments
Consideration paid on acquisition of client lists
Deferred consideration paid on acquisition of a company
Dividends received
Interest received

Net cash used by investing activities

Financing activities
Dividends paid
Interest paid

Net cash used by financing activities

Net (decrease)/increase 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

Notes

8
8

2019
£000

(631)
66

(565)

(382)
789
–
(111)
(600)
23
67

(214)

(796)
(3)

(799)

(1,578)
8,367

6,789

6,916
(127)

6,789

2018
£000

5,656
(500)

5,156

(1,642)
(710)
(135)
(644)
(600)
8
33

(3,690)

(786)
(7)

(793)

673
7,694

8,367

8,367
–

8,367

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 56

Walker Crips Group plc | Annual Report and Accounts 2019

Page 57 |

Consolidated
statement of changes in equity
year ended 31 March 2019

Walker Crips Group
Financial statements

Share
capital
£000

2,826

Share
premium
account
£000

3,502

Own
shares
held
£000

(312)

Capital
redemption
£000

Other
£000

Retained
earnings
£000

Total
equity
£000

111

4,557

11,163

21,847

Equity as at 31 March 2017

Total comprehensive income

for the year

Contributions by and
distributions to owners
Dividends paid
Issue of shares as deferred
consideration on acquisition of

–

intangibles and business combinations

172

Total contributions by and
distributions to owners

Equity as at 31 March 2018

2,861

172

3,674

–

745

(786)

–

207

(786)

(579)

(312)

111

4,557

11,122

22,013

Total comprehensive income

for the year

Contributions by and distributions
to owners
Dividends paid
Issue of shares as deferred
consideration on acquisition of

–

intangibles and business combinations

Total contributions by and
distributions to owners

–

333

(796)

–

171

(796)

(625)

Equity as at 31 March 2019

2,888

3,763

(312)

111

4,612

10,659

21,721

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 56

Walker Crips Group plc | Annual Report and Accounts 2019
Page 57 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc

1. General information
Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRSs”) as adopted by the European Union (“EU”), Article 4
of the EU IAS Regulation and Companies Act 2006. The Group
financial statements are presented on pages 53 to 57. The Group
is incorporated in the United Kingdom under the Companies
Act 2006. The nature of the Group’s operations and its principal
activities are set out on page 12. The Group is registered in
England and Wales. The address of the registered office is Old
Change House, 128 Queen Victoria Street, London EC4V 4BJ.

The consolidated financial statements have been prepared on
the historical cost basis, except for certain financial instruments
that are measured at fair value, and are presented in Pounds
Sterling. The principal accounting policies adopted are set
out below and have been applied consistently to all periods
presented in the consolidated financial statements.

Going concern
The Group’s business activities together with the factors likely
to affect its future development, performance and position has
been rigorously assessed. In addition, Note 24 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, 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
Group and its subsidiaries 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.

Standards and interpretations affecting the reported results
or the financial position
In the current year, no standards or interpretations, new or
revised, have been adopted that have had a significant impact
on the amounts reported in these financial statements.

Changes in accounting policies and disclosures
The Group and its subsidiaries have adopted IFRS 9 “Financial
instruments” and IFRS 15 “Revenue from contracts with
customers” for the first time this period. These new standards
required additional disclosures which have been provided in
Note 19 and Note 4, respectively.

No significant judgements were required to be made in the
application of these standards.

IFRS 9 changes the classification and measurement of
financial assets, new hedge accounting requirements,
enhanced disclosures in the financial statements and the
timing and extent of credit provisioning. The Group does not
use hedge accounting and this element of the new standard is
not applicable.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 58

Following a review of the capital framework of Short-Term
Lending vehicle Topaz STL, the Group’s debt investment,
previously held as a debt investment, upon application of IFRS 9
has been reclassified as amortised costs within trade and other
receivables in the period. The debt investment is now receivable
within one year, it also represents a change in use of this asset.
There is no expected credit loss resulting from the transfer
therefore no material impact on earnings per share nor on
comparatives. An expected credit loss provision is recognised if
the Group believes there has been a significant increase in credit
risk, in which case the loss allowance is revised to the lifetime of
the expected credit loss. Trade and other receivables and Cash
and cash equivalents are now reclassified from Loans and other
receivables under IAS 39 to Amortised cost with no expected
credit loss arising.

IFRS 15 changes how and when revenue is recognised from
contracts with customers and the treatment of the costs of
obtaining a contract with a customer. The standard requires
that the recognition of revenue is linked to the fulfilment of
performance obligations that are enshrined in the contract
with the customer. It also requires that the incremental cost of
obtaining a customer contract should be capitalised if that cost
is expected to be recovered.

The Group has assessed the impact of adopting the standard
on its existing revenue streams, as well as on its policy of
capitalising the cost of obtaining customer contracts.

Stockbroking commission and fees relating to portfolio
management, financial planning and pension management
Included within Revenue are initial fees charged by some of
our Group companies in relation to certain business activities.
Under IFRS 15, the Group is required to make an assessment
as to whether the work performed to earn such fees constitutes
the transfer of service and therefore fulfils any performance
obligations. If so then these fees should be recognised when
the relevant performance obligation has been satisfied, if not
then the fees can only be recognised in the period the services
are provided. Included within commission and fee income is an
amount representing initial fees, charged by a number of the
Group’s companies in relation to certain business activities.
We have not identified any instances where the recognition of
revenue will change materially from the current treatment in the
consolidated financial statements.

Contract costs/Client relationship intangibles
Under the Group’s current policy of capitalising contract
costs, incremental payments that are made to newly recruited
Investment Managers to secure Investment Management
contracts are capitalised as client relationship intangibles if they
are separable, reliably measured and expected to be recovered.
The period during which such payments are capitalised and
amortised is typically between three to twenty years as
explained in Note 15.

The Group has assessed its current policy and has concluded
that IFRS 15 reinforces the existing treatment of such
incremental costs. Therefore, the Group does not believe the
adoption of IFRS 15 will materially change the way it accounts
for client relationship intangibles.

Walker Crips Group plc | Annual Report and Accounts 2019

Page 59 |

Walker Crips Group
Financial statements

There is no impact on prior period reporting and no effect on
earnings per share of either IFRS 9 or IFRS 15.

Several other amendments and interpretations apply for the first
time in 2018, but do not have an impact on the consolidated
financial statements of the Group. The Group has not early-
adopted any standards, interpretations or amendments that
have been issued but are not yet effective.

The following new and amended Standards and Interpretations
are not currently relevant to the Group and its subsidiaries,
however, they may have a significant impact in future years:
Amendments to IFRS 2: Classification and measurement of
share-based payment transactions

Future new standards and interpretations
At the date of authorisation of these financial statements, the
following standard and interpretations which have not been
applied in these financial statements was in issue but not yet
effective (and in some cases had not yet been adopted by
the EU):

IFRS 16 “Leases”
IFRS 16 is effective for periods commencing on or after
1 January 2019. The standard was endorsed by the EU during
2017 and the Group has decided not to adopt this standard
early. The standard will be adopted by the Group on 1 April
2019, and will be initially reflected in the Group’s audited
accounts for the period ending 31 March 2020.

For lessees, IFRS 16 largely eliminates the classification of leases
as either operating leases or financial leases. The Group will be
required to recognise as a right-of-use lease asset on its balance
sheet wherever it has a lease with a term of more than twelve
months remaining, other than with respect to low value leases;
for those leases where a right-of-use asset is recognised; the
Group will also recognise a financial liability representing the
present value of its obligation to make future lease payments.

Transition
Definition of a lease
On transition to IFRS 16, the Group can choose whether to:
apply the new definition of a lease to all its contracts as if
IFRS 16 had always applied; or
apply a practical expedient approach and retain previous
assessments of contracts which contain a lease obligation.

The Group intends to apply the practical expedient and,
therefore, will not be reassessing those contracts that were
not deemed to contain a lease based on the previous relevant
account standards, i.e. IAS 17 and IFRIC 4.

Measurement approach
As a lessee, the Group can either apply the standard using a:
retrospective approach; or
modified retrospective approach with optional practical
expedients.

The Group is assessing the impact of both approaches and
intends to apply the modified retrospective approach. This will
result in the comparatives to the financial statements in which
IFRS 16 is first applied not being adjusted for the effects of
IFRS 16, but instead the differences arising being taken through
equity in retained earnings.

Potential impact
The Group has conducted an initial quantification of the impact
of adopting the standard based on its review of all leases in the
current portfolio which meet the definition of a lease. Based on
the results of this impact assessment, the Group has elected to
take the modified retrospective approach to transition.

The Group’s total assets and total liabilities will be increased by
the recognition of lease assets and liabilities. The lease assets
will be depreciated over the shorter of the expected life of the
asset and the lease term. The lease liability will be reduced by
lease payments, offset by the unwinding of the liability over the
lease term.

The most significant impact is in respect of the Group’s London,
York and Romford offices. Annual total operating lease expenses
of £779,000 which would have been recognised under the
existing leases standard, will be replaced by anticipated higher
levels of depreciation and interest expense in the early years of
each lease, falling to lower levels as each lease heads towards
expiry. The interest expense is based on the interest rate implicit
in each lease as the lease unwinds but where the implicit rate is
not readily available, an estimated incremental borrowing rate
based on external sources will be applied.

As at 31 March 2020, the expected effects of the new standard
will be to increase net assets, incur an increase in interest
costs, also an increase in depreciation costs and a reduction in
lease expenses.

On the Group’s statement of comprehensive income, the profile
of lease costs will be front-loaded, at least individually, as the
interest charge is higher in the early years of a lease term as the
discount rate unwinds. The total cost of the lease over the lease
term is expected to be unchanged.

In addition, to the above impacts, it is worth noting that
recognition of additional leased assets and adjustments to
distributable reserves will have an immaterial impact on the
Group’s regulatory capital headroom.

Based on the information currently available, the Group
estimates that £5.9 million will be recognised as right-of-use
assets, with a corresponding lease liability of £6.4 million on
the date of transition (1 April 2019). There will also be an
approximate adjustment to equity of a credit of £0.5 million,
resulting from the de-recognition of the accrued rent free
periods relating to the Group’s leases for its Romford and
London offices.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 58

Walker Crips Group plc | Annual Report and Accounts 2019
Page 59 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

2. Significant accounting policies
Basis of consolidation
The Group financial statements consolidate the financial
statements of the Group and companies controlled by the
Group (its subsidiaries) made up to 31 March each year.
The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its powers
to direct relevant activities of the entity. Subsidiaries are fully
consolidated from the date on which control is obtained and
no longer consolidated from the date that control ceases; their
results are in the consolidated financial statements up to the
date that control ceases.

Entities where the interest is 49% or less are assessed for
potential treatment as a Group company against the control
tests outlined in IFRS 10, being power over the investee,
exposure or rights to variable returns and power over the
investee to affect the amount of investors’ returns.

Intangible assets
(a) Client lists
Client lists are recognised when it is probable that future
economic benefits will flow to the Group and the cost of the
asset can be measured reliably whilst the risk and rewards have
also transferred into the Group’s ownership.

Intangible assets classified as client lists are recognised when
acquired as part of a business combination or when separate
payments are made to acquire clients’ assets by adding teams
of Investment Managers.

The cost of acquired client lists and businesses generating
revenue from clients and Investment Managers are capitalised.
These costs are amortised on a straight-line basis over their
expected useful lives of three to twenty years. The amortisation
period and amortisation method for intangible assets are
reviewed at least each financial year end. All intangible assets
have a finite useful life

All intra-Group transactions, balances, income and expenses are
eliminated on consolidation.

Amortisation of intangible fixed assets is included within
administrative expenses in the consolidated income statement.

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.

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.

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 company 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 company or
jointly controlled entity, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.

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.

(b) Software Licenses
Computer software which is not an integral part of the related
hardware is recognised as an intangible asset when the Group
is expected to benefit from future use of the software and the
costs are reliably measured and amortised using the straight
line method over a useful life of five years.

Own shares held
Own shares consist of treasury shares which are recognised at
cost as a deduction from equity shareholders’ funds. Subsequent
consideration received for the sale of treasury shares is also
recognised in equity with any difference being taken to retained
earnings. No gain or loss is recognised on sale of treasury shares.

Shares to be issued
Shares to be issued represent the Group’s best estimate of
the Ordinary Shares in the Group which are likely to be issued,
following business combinations or the acquisition of client
relationships which involve deferred payments in the Group’s
shares. Where shares are due to be issued within a year, the sum
is included in current liabilities. Shares to be issued are dependent
on the achievement of pre-defined targets and are treated
as a liability until they are allotted and issued, at which time
they are reclassified within equity. The Group had recognised
as a liability the sum which has been issued and allotted to
personnel associated with the Group in order to meet contractual
commitments given as part of the recent expansion of its
client base.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 60

Walker Crips Group plc | Annual Report and Accounts 2019

Page 61 |

Walker Crips Group
Financial statements

Revenue recognition
Revenue is measured at a fair value of the consideration 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.

Revenues recognised under IFRS 15
Revenue from contracts with customers:
Gross commissions on stockbroking activities are recognised
on those transactions whose trade date falls within the
financial year, with the execution of the trade being the
performance obligation at that point in time.
In Walker Crips Investment Management, fees earned from
managing various types of client portfolios are accrued daily
over the period to which they relate with the performance
obligation fulfilled over the same period.
Fees in respect of financial services activities of Walker Crips
Wealth Management are accrued evenly over the period to
which they relate with the performance obligation fulfilled
over the same period.
Fees earned from structured investments are recognised on
the date the underlying security of the structured investment
is traded and settled, with the execution of the trade being
the performance obligation at that point in time.

Other incomes:
Interest is recognised as it accrues in respect of the financial
year.
Dividend income is recognised when:

the Group’s right to receive payment of dividends
is established;
when it is probable that economic benefits associated
with the dividend will flow to the Group; and
the amount of the dividend can be reliably measured.
Gains or losses arising on disposal of trading book instruments
and changes in fair value of securities held for trading are
both recognised in profit and loss.

The Group does not have any long-term contract assets in
relation to customers of any fixed and/or considerable lengths
of time which require the recognition of financing costs or
incomes in relation to them.

Operating expenses
Operating expenses and other charges are provided for in full up
to the statement of financial position date on an accruals basis.

Exceptional items
To assist in understanding its underlying performance, the Group
identifies certain items of pre-tax income and expenditure
and discloses them separately in the Consolidated income
statement.

Such items would include:
1. profits or losses on disposal, closure or impairment of assets

or businesses;

2. corporate transaction and restructuring costs;
3. changes in the fair value of contingent consideration; and
4. non-recurring items considered individually for classification

as exceptional by virtue of their nature or size.

The separate disclosure of these items allows a clearer
understanding of the Group’s trading performance on
a consistent and comparable basis, together with an
understanding of the effect of non-recurring or large individual
transactions upon the overall profitability of the Group. The
exceptional items arising in 2018/19 are explained in Note 7
and all fall under category 4 above. The related tax effect is also
quantified and disclosed in Note 11 on page 70.

Deferred income
Income received from clients in respect of future periods to the
transaction or reporting date are classified as deferred income
within creditors until such time as value has been received by
the client.

Foreign currencies
The individual financial statements of each of the Group’s
companies are presented in Pounds Sterling, which is the
functional currency of the Group 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 re-
translated 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.
Where consideration is received in advance of revenue being
recognised, the date of the transaction reflects the date the
consideration is received.

Impairment of non-financial assets
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered
an impairment loss. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). If
there is an indication of possible impairment, the recoverable
amount of any affected asset (or group of related assets)
is estimated and compared with its carrying amount. If the
estimated recoverable amount is lower, the carrying amount
is reduced to its estimated recoverable amount, and an
impairment loss is recognised immediately in profit or loss.

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

33 1/3% per annum on cost
Between 20% and 33 1/3% per
annum on cost

Leasehold improvements Over the term of the lease
33 1/3% per annum on cost
Furniture and equipment

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 60

Walker Crips Group plc | Annual Report and Accounts 2019
Page 61 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

2. Significant accounting policies | continued
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.
The gain or loss on the disposal or retirement of an asset is
determined as the difference between sales proceeds and the
carrying amount of the asset and is recognised in income.
The residual values and estimated useful life of items within
property, plant and equipment are reviewed at least at each
financial year end. Any shortfalls in carrying value are impaired
immediately through profit or loss.

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. 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 in which the liability is settled or the asset
is realised. Deferred tax is charged or credited directly to the
Income Statement, except when it relates to items charged or
credited to ‘Other Comprehensive Income’ in which case the
deferred tax is also dealt with in other comprehensive income.

Financial assets and liabilities
Financial assets and liabilities are recognised in the
Consolidated statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.

At initial recognition, the Group measures a financial asset or
financial liability at its fair value plus or minus transaction costs.
Transaction costs of financial assets and financial liabilities
carried at fair value through profit or loss (“FVPL”) are expensed
in the statement of comprehensive income. Immediately after
initial recognition, an expected credit loss allowance (“ECL”)
is recognised for financial assets measured at amortised cost,
which results in an accounting loss being recognised in profit or
loss when an asset is newly originated.

The Group does not use hedge accounting.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 62

a) Financial assets
Classification and subsequent measurement
The Group classifies its financial assets in the following
measurement categories:
Fair value through profit or loss (“FVPL”); or
Amortised cost.

Financial assets are classified as current or non-current depending
on the contractual timing for recovery of the asset.

i) Debt instruments
Classification and subsequent measurement of debt instruments
depend on:
the Group’s business model for managing the asset; and
the cash flow characteristics of the asset.

Business model: The business model reflects how the Group
manages the assets in order to generate cash flows. That is,
whether the Group’s objective is solely to collect the contractual
cash flows from the assets, to collect both the contractual cash
flows and cash flows arising from the sale of assets, or solely
or mainly to collect cash flows arising from the sale of assets.
Factors considered by the Group include past experience on how
the contractual cash flows for these assets were collected, how
the assets’ performance is evaluated, and how risks are assessed
and managed.

Cash flow characteristics of the asset: Where the business model
is to hold assets to collect contractual cash flows, the Group
assesses whether the financial instruments’ contractual cash
flows represent solely payments of principal and interest (“the
SPPI test”). In making this assessment, the Group considers
whether the contractual cash flows are consistent with a basic
lending instrument.

Based on these factors, the Group classifies its debt instruments
into one of two measurement categories:

Amortised cost: Assets that are held for collection of contractual
cash flows where those cash flows represent solely payments
of principal and interest (“SPPI”), and that are not designated
at FVPL, are measured at amortised cost. Amortised cost is
the amount at which the financial asset is measured at initial
recognition minus the principal repayments, plus or minus the
cumulative amortisation, using the effective interest rate method,
of any difference between that initial amount and the maturity
amount, adjusted by any ECL recognised. The effective interest
rate is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial
asset to the gross carrying amount. Interest income from these
financial assets is included within investment revenues using the
effective interest rate method.

FVPL: Assets that do not meet the criteria for amortised cost or
fair value through other comprehensive income (“FVOCI”) are
measured at fair value through profit or loss.

Reclassification
The Group reclassifies debt instruments when and only when
its business model for managing those assets changes. The
reclassification takes place from the start of the first reporting
period following the change.

Walker Crips Group plc | Annual Report and Accounts 2019

Page 63 |

Walker Crips Group
Financial statements

Impairment
The Group assesses on a forward-looking basis the ECL
associated with its debt instruments held at amortised cost.
The Group recognises a loss allowance for such losses at each
reporting date. On initial recognition, the Group recognises a
twelve month ECL. At the reporting date, if there has been a
significant increase in credit risk, the loss allowance is revised to
the lifetime expected credit loss.

The measurement of ECL reflects:
an unbiased and probability weighted amount that is
determined by evaluating a range of possible outcomes;
the time value of money; and
reasonable and supportable information that is available
without undue cost or effort at the reporting date about past
events, current conditions and forecasts of future economic
conditions.

ii) Equity instruments
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 instrument within
the timeframe established by the market concerned, and are
initially measured at fair value.

The Group subsequently measures all equity investments at
fair value through profit and loss. Changes in the fair value of
financial assets at FVPL are recognised in revenue within the
Consolidated Income Statement.

Trade payables
Trade payables are recognised and measured initially at
fair value.

Bank overdrafts
Interest-bearing bank overdrafts are initially measured at fair
value and shown within current liabilities. 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 Group are recorded at the
proceeds received, net of direct issue costs.

Share Incentive Plan (“SIP”)
The Group has an incentive policy to encourage all members of
staff to participate in the ownership and future prosperity of
the Group. All employees can participate in the SIP following
three months of service. Employees may contribute a maximum
of 10% of their gross salary in regular monthly payments
(being not less than £10 and not greater than £150) to acquire
Ordinary Shares in the Parent Company (Partnership Shares).
Partnership Shares are acquired monthly. For every Partnership
Share purchased, the employee receives one Matching Share. All
shares awarded under this scheme have been purchased in the
market by the Trustees of the SIP. a policy which will continue to
at least 31 March 2020.

iii) Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within current liabilities in
the statement of financial position.

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.

De-recognition
Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all the
risks and rewards of ownership.

b) Financial liabilities
Classification and subsequent measurement
Financial liabilities are classified and subsequently measured
at amortised cost.

Financial liabilities are derecognised when they are
extinguished.

Long-term liabilities – deferred cash and shares consideration
Amounts payable to personnel under recruitment contracts in
respect of the client relationships, which transfer to the Group,
are treated as long-term liabilities if the due date for payment
of cash consideration is beyond the period of one year after
the year end date. The value of shares in all cases is derived
by a formula based on the value of client assets received in
conjunction with the prevailing share price at the date of issue
which in turn determines the number of shares issuable.

Share-based payments
The Group issues equity-settled share-based payments to
certain self-employed 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.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 62

Walker Crips Group plc | Annual Report and Accounts 2019
Page 63 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

capitalised when they are judged to be made for the acquisition
of client relationship intangibles. The useful lives are estimated
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 conduct a review of indicators of
impairment and also consider a life of up to twenty years to be
both appropriate and in line with peers.

Short-Term Lending Administration – judgement
The Group provides administrative services to Special Purpose
Vehicles who in turn make loans to specialist lenders in the
residential housing construction industry. Having considered
the requirements of IFRS 10, the Directors have also obtained
independent advice to support our conclusion that no additional
consolidation is required as a result of these arrangements and
the structure in which the Group provides this service.

Provision for dilapidations – judgement
The Group has made provisions for dilapidations under
three leases for its offices. Two new leases were entered into
during the prior year for which a total liability of £507,000
to restore the premises at the end of the term is crystallised.
These amounts have been provided in full based on valuations
prepared by the office fit-out companies who carried out our
office improvements and are disclosed in Note 25.

During the year, £63,000 of dilapidations provisions were
utilised and £42,000 was reversed, leaving a balance at the
year end of £542,000.

2. Significant accounting policies | continued
The Group also issues shares as part of deferred consideration
for client relationships acquired under arrangements agreed
with Investment Managers when they join the Group. Equity-
settled share-based payments are awarded if Assets Under
Management or revenue targets for incoming clients have been
achieved. The fair value is estimated at the date of transfer of
the assets and are amortised on a straight line basis over their
estimated useful lives.

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 accrual 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. These benefits include rent-free periods and landlord
contributions to leasehold improvements.

Dividends paid
Equity dividends are recognised when they become legally
payable. There is no requirement to pay dividends unless
approved by the shareholders by way of written resolution
where there is sufficient cash to meet current liabilities, and
without detriment of any financial covenants, if applicable.

3. Key sources of estimation uncertainty
and judgements
Impairment of goodwill – estimation and judgement
Determining whether goodwill is impaired requires an
estimation of the fair value less costs to sell and the value-in-
use of the cash-generating units to which goodwill has been
allocated. The fair value less costs to sell involves estimation
of values based on the application of earnings multiples and
comparison to similar transactions. The value-in-use calculation
requires the entity to estimate the future cash flows expected
to arise from the cash-generating unit and apply a discount rate
in order to calculate present value. The assumptions used and
inputs involve judgements and create estimation uncertainty.
These assumptions have been stress-tested as described in Note
14. The carrying amount of goodwill at the balance sheet date
was £4.4 million (2018: £4.4 million) as shown in Note 14.

Other intangible assets – judgement
Acquired client lists are capitalised based on current fair values.
During the year the Group acquired one Investment Manager
and the business of their clients. When the Group purchases
client relationships from other corporate entities, a judgement
is made as to whether the transaction should be accounted for
as a business combination, or a separate purchase of intangible
assets. In making this judgement, the Group assesses the
acquiree against the definition of a business combination in
IFRS 3. Payments to newly recruited Investment Managers are

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 64

Walker Crips Group plc | Annual Report and Accounts 2019

Page 65 |

Walker Crips Group
Financial statements

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

Stockbroking commission
Fees and other revenue1

Investment Management
Wealth Management, Financial Planning & Pensions

Revenue
Net investment revenue (see Note 8)

Total income

% of total income

2019
Broking
income
£000

8,667
–

8,667

28.4

2019
Non-broking
income
£000

–
19,190

19,190
2,601

21,791
87

21,878

71.6

2019
Total
£000

8,667
19,190

27,857
2,601

30,458
87

30,545

100.0

2018
Broking
income
£000

10,953
–

10,953

35.9

2018
Non-broking
income
£000

–
17,186

17,186
2,317

19,503
34

19,537

64.1

2018
Total
£000

10,953
17,186

28,139
2,317

30,456
34

30,490

100.0

1 Includes Investment Management, Structured Investments, and Alternative Investments.

Timing of revenue recognition
The following table presents operating income analysed by the timing of revenue recognition of the operating segment providing
the service:

2019

Revenue from contracts with customers
Products and services transferred at a point in time
Products and services transferred over time

Other revenue
Products and services transferred at a point in time
Products and services transferred over time

2018

Revenue from contracts with customers
Products and services transferred at a point in time
Products and services transferred over time

Other revenue
Products and services transferred at a point in time
Products and services transferred over time

Brought forward
Amounts included in contract liabilities that was recognised as revenue
during the period
Settlement of contract assets brought forward
Cash received in advance of performance and not recognised as revenue
during the period
Amounts included in contract assets that was recognised as revenue
during the period

At 31 March

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 64

Investment

Wealth
Management Management
£000

£000

Consolidated
year ended
31 March
2019
£000

10,360
15,477

459
2,082

10,819
17,559

234
1,786

60
–

294
1,786

27,857

2,601

30,458

Investment
Management
£000

Wealth
Management
£000

Consolidated
year ended
31 March
2018
£000

12,783
14,249

417
1,900

13,200
16,149

370
737

–
–

370
737

28,139

2,317

30,456

Contract
assets
2019
£000

4,005

Contract
assets
2018
£000

5,313

–
(4,005)

–
(5,313)

–

4,623

4,005

Contract
liabilities
2019
£000

Contract
liabilities
2018
£000

(3)

3
–

(4)

–

(4)

(8)

8
–

(3)

–

(3)

Walker Crips Group plc | Annual Report and Accounts 2019
Page 65 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

5. Segmental analysis
For segmental reporting purposes, the Group currently has two operating segments, Investment Management, being portfolio-based
transaction execution and investment advice, and Wealth Management, being financial planning and pension advice. Unallocated
corporate expenses, assets and liabilities are not considered to be allocable accurately, or fairly, under any known basis of allocation and
are therefore disclosed separately.

Walker Crips Investment Management’s activities focus predominantly on investment management of various types of portfolios and
asset classes.

Walker Crips Wealth Management provides advisory and administrative services to clients in relation to their financial planning,
life insurance, inheritance tax and pension arrangements. These companies are the basis on which the Group reports its primary
segment information.

2019

Revenue
Revenue from contracts with customers
Other revenue

Total revenue

Results
Segment result
Unallocated corporate expenses

Investment revenue
Finance costs

Profit before tax
Tax

Profit after tax

2019

Other information
Capital additions
Depreciation

Statement of financial positions
Assets
Segment assets
Unallocated corporate assets

Consolidated total assets

Liabilities
Segment liabilities
Unallocated corporate liabilities

Consolidated total liabilities

Investment

Wealth
Management Management
£000

£000

Consolidated
year ended
31 March
2019
£000

25,837
2,020

27,857

2,541
60

2,601

28,378
2,080

30,458

1,013

348

Investment

Wealth
Management Management
£000

£000

1,361
(959)

402
90
(3)

489
(156)

333

Consolidated
year ended
31 March
2019
£000

318
522

93
71

411
593

50,698

2,726

35,072

774

53,424
4,547

57,971

35,846
404

36,250

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 66

Walker Crips Group plc | Annual Report and Accounts 2019

Page 67 |

Walker Crips Group
Financial statements

Investment
Management
£000

Wealth
Management
£000

Consolidated
year ended
31 March
2018
£000

27,032
1,107

28,139

2,317
–

2,317

29,349
1,107

30,456

2,097

199

2,296
(1,406)

890
41
(7)

924
(179)

745

Investment
Management
£000

Wealth
Management
£000

Consolidated
year ended
31 March
2018
£000

2,182
500

213
17

2,395
517

53,878

2,407

39,475

855

56,285
6,531

62,816

40,330
473

40,803

2018

Revenue
Revenue from contracts with customers
Other revenue

Total revenue

Results
Segment result
Unallocated corporate expenses

Investment revenue
Finance costs

Profit before tax
Tax

Profit after tax

2018

Other information
Capital additions
Depreciation

Statement of financial positions
Assets
Segment assets
Unallocated corporate assets

Consolidated total assets

Liabilities
Segment liabilities
Unallocated corporate liabilities

Consolidated total liabilities

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 66

Walker Crips Group plc | Annual Report and Accounts 2019
Page 67 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

6. Commissions and fees paid
Commissions and fees paid comprises:

To authorised external agents
To approved persons

2019
£000

25
9,648

9,673

2018
£000

31
9,970

10,001

7. Exceptional items
As a result of their materiality the Directors decided to disclose certain amounts separately in order to present results which are not
distorted by significant items of income and expenditure.

Property relocation expenses
Non-recurring rebate
Change of VAT partial exemption special method
Changes in the fair value of deferred consideration
Transaction cost in relation to a launch of a public issuance

2019
£000

–
–
–
(102)
134

2018
£000

322
(63)
(243)
–
–

Cash consideration payable for acquired client relationships over a number of years is estimated at the outset based on the expected
number of clients and associated revenue which will be acquired. Each year these amounts are re-assessed based on the actual values
of these metrics and accordingly, an exceptional credit, being one-off and exceptional in nature and size, has been recorded in the year
representing the reversal of an over-estimation of £102,000 of such consideration.

As part of the expansion of its short term lending facility business, the Group has invested in a planned launch of a listed bond available
to retail investors. This launch has currently been delayed due to political uncertainty which is impacting investor sentiment and
therefore provisions totalling £134,000 have been made for related costs.

During the prior year to 31 March 2018, the Group incurred material costs of £388,000 under its existing leases related to the relocation
of the head office and the York office to new premises in December 2017 and April 2018, offset by an unusually high service charge
credit of £66,000 on the old head office. An additional one-off refund of £63,000 was received for incorrect custody charges incurred
in prior years as well as significant annual credits of £243,000 relating to the Group’s agreement with HMRC to a revised input VAT
recovery method (partial exemption special method).

8. 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 overdue liabilities

Net investment revenue (see Note 4)

2019
£000

2018
£000

67
23

(3)

33
8

(7)

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 68

Walker Crips Group plc | Annual Report and Accounts 2019

Page 69 |

9. 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 10)
Recharge of staff costs
Settlement costs
Communications
Computer expenses
Other expenses
Other employment cost – provision 1
Other employment cost – recoverable 1
Auditor’s remuneration
Lease payment

Total administrative expenses

Walker Crips Group
Financial statements

2019
£000

593
558
12,680
(521)
1,012
1,264
738
2,452
–
–
315
1,274

2018
£000

517
553
12,236
(518)
1,038
1,139
603
2,704
225
(225)
228
1,056

20,365

19,556

1 Other employment costs in the prior year included £0.225 million expensed during the year in relation to a provision established in respect of the potential income tax
and national insurance liability relating to two former fund managers of Walker Crips Asset Managers Limited, a wholly-owned company, which was sold to Liontrust Asset
Management plc (“Liontrust”) in April 2012. These amounts were fully settled in the current financial year.

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

Audit services
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts
The audit of the Group’s subsidiaries pursuant to legislation – current year
The audit of the Group’s subsidiaries pursuant to legislation – prior year

Non-audit services
FCA client assets reporting
Report under AAF 01/06
Interim review

2019
£000

51
125
125

12
–
2

315

2019
%

16
40
40

3
–
1

100

10. 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
Share incentive plan
Other employment costs

2018
£000

36
102
46

12
30
2

228

2018
%

16
45
20

5
13
1

100

2019
£000

2018
£000

10,390
1,126
209
955

12,680

10,120
1,095
134
887

12,236

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 49 self-employed account executives
who were approved persons of the Group (2018: 54). Please see page 36 for details of Directors’ remuneration.

The average number of staff employed during the year was:

Executive Directors
Approved persons
Other staff

2019
Number

2018
Number

3
58
157

218

4
59
152

215

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 68

Walker Crips Group plc | Annual Report and Accounts 2019
Page 69 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

11. Taxation
The tax charge is based on the profit for the year of continuing operations and comprises:

UK corporation tax at 19% (2018: 19%)
Prior year adjustments
Origination and reversal of timing differences during the current period
Adjustment to the estimated recoverable amount of deferred tax

Corporation tax is calculated at 19% (2018: 19%) of the estimated assessable profit for the year.

The charge for the year can be reconciled to the profit per the income statement as follows:

Profit before tax

Tax on profit on ordinary activities at the standard rate UK corporation tax rate of 19% (2018: 19%)

Effects of:
Tax rate changes for deferred tax
Expenses not deductible for tax purposes
Prior year adjustment
Fixed asset differences
Non-taxable income
Other

2019
£000

189
(6)
(35)
8

156

2019
£000

489

3
3
3
58
(4)
–

156

2018
£000

329
(3)
(121)
(26)

179

2018
£000

924

176

(23)
1
(3)
30
–
(2)

179

Finance (No. 2) Act 2015 enacted reductions in the UK corporation tax rate to 19% with effect from 1 April 2017 and 18% with effect
from 1 April 2020. Finance Act 2016 enacted a reduction in the 18% rate to 17% with effect from 1 April 2020. These reductions in the
tax rate will impact the current tax charge in future periods.

The exceptional costs of £32,000 (2018: £16,000), disclosed separately on the consolidated income statement, are tax deductible to the
value of £6,000 (2018: £3,000) of corporation tax. Classifying these costs as exceptional has no effect on the tax liability.

12. Dividends
When determining the level of proposed dividend in any year a number of factors are taken into account including levels of profitability,
future cash commitments, investment needs, shareholder expectations and prudent buffers for maintaining an adequate regulatory
capital surplus. Amounts recognised as distributions to equity holders in the period:

Final dividend for the year ended 31 March 2018 of 1.29p (2017: 1.29p) per share
Interim dividend for the year ended 31 March 2019 of 0.58p (2018: 0.58p) per share

Proposed final dividend for the year ended 31 March 2019 of 0.33p (2018: 1.29p) per share

2019
£000

549
247

796

142

2018
£000

542
244

786

549

The proposed final dividends are subject to approval by shareholders at the Annual General Meeting and have not been included as
liabilities in these financial statements.

Shareholders will be subject to income tax on dividends depending on whether they are basic, higher or additional rate taxpayers at
7.5%, 32.5% or 38.1%, respectively, on the excess of annual dividend income over £2,000 for 2018/19.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 70

Walker Crips Group plc | Annual Report and Accounts 2019

Page 71 |

Walker Crips Group
Financial statements

13. 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 £333,000
(2018: £745,000) and on 42,509,997 (2018: 42,025,970) Ordinary Shares of 6 2/3 pence, being the weighted average number of
Ordinary Shares in issue during the year.

No dilution to earnings per share in the current year. In the prior year, the calculation of diluted earnings per share was based on
42,476,107 Ordinary Shares, being the weighted average number of Ordinary Shares in issue during the period, adjusted for dilutive
potential Ordinary Shares, issued in May 2018, to the sellers of Barker Poland Asset Management LLP (“BPAM”) in order to satisfy the
Group’s obligation in connection with the payment of year three deferred consideration. A further dilution adjustment was made for the
effect of shares issued in May 2018 to other personnel associated with the Group in order to meet contractual commitments made by
the Group as part of the ongoing recruitment of investment advisers and expansion of its client base.

The calculation of the basic and diluted earnings per share is based on the following data:

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

2019
£000

333

2018
£000

745

2019
Number

2018
Number

Number of shares
Weighted average number of Ordinary Shares for the purposes of basic earnings per share
Effect of dilutive potential Ordinary Shares:
Deferred Consideration deemed issued

42,509,997 42,025,970

–

250,137

Weighted average number of Ordinary Shares for the purposes of diluted earnings per share

42,509,997 42,276,107

This produced basic earnings per share of 0.78 pence (2018: 1.77 pence) and diluted earnings per share of 0.78 pence (2018: 1.75 pence).

14. Goodwill

Cost
At 1 April 2018

At 31 March 2019

Accumulated impairment
At April 2018
Impaired during the year

At 31 March 2019

Carrying amount
At 31 March 2019

At 31 March 2018

£000

7,056

2,668
–

2,668

4,388

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 or intangible asset. The carrying amount of goodwill has been allocated as follows:

London York Fund Managers Limited CGU (London York)
Barker Poland Asset Management LLP CGU (BPAM)

2019
£000

2,901
1,487

4,388

2018
£000

2,901
1,487

4,388

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 70

Walker Crips Group plc | Annual Report and Accounts 2019
Page 71 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

14. Goodwill | continued
The recoverable amounts of the CGUs have been determined based upon value-in-use calculations for the London York CGU and fair
value less costs of disposal for the BPAM CGU.

The London York computation was based on discounted five-year cash flow projections and terminal values. The key assumptions for
these calculations are a pre-tax discount rate of 12%, terminal growth rates of 1.75% and the expected changes to revenues and costs
during the five year projection period based on discussions with senior Management, past experience, future expectations in light of
anticipated market and economic conditions, comparisons with our peers and widely available economic and market forecasts. The
pre-tax discount rate is determined by Management based on current market assessments of the time value of money and risks specific
to the York CGU. The base value-in-use cash flows were stress tested for an increase in discount rates to 16% and a 20% fall in net
inflows resulting in no impairment. The discount rate would need to increase to 32.3% for the London York CGU value in use to equal
the respective carrying values.

In the prior year, the BPAM CGU recoverable amount was assessed, in accordance with IAS 36, by adopting the higher method of the
fair value less cost of disposal to determine the recoverable amount. The recoverable amount at the year end calculated for the BPAM
CGU, determined by the fair value less cost of disposal, exceeded that produced by the value-in-use calculation. The fair value less cost
of disposal amounted to £4.9 million (2018: £6.8 million) with headroom, after selling costs, of £0.9 million after applying price earnings
multiples based on the average of the Group’s and its peers’ published results. Accordingly, this measurement is classified as fair value
hierarchy Level 2 being directly based on observable market data. A 20% decrease in BPAM’s profit after tax would result in potential
impairment of £136,000.

Based upon the above assessments, Management has concluded there is no impairment to goodwill.

15. Other intangible assets

Cost
At 1 April 2017
Additions in the year

At 1 April 2018
Disposal of fully depreciated intangible assets
Additions in the year

At 31 March 2019

Amortisation
At 1 April 2017
Charge for the year

At 1 April 2018
Eliminated on disposal of fully depreciated intangible assets
Charge for the year

At 31 March 2019

Carrying amount
At 31 March 2019

At 31 March 2018

Unit trust
management contracts
£000

Software
Licences
£000

Client lists
£000

Total
£000

240
–

240
(240)
–

–

240
–

240
(240)
–

–

–
44

44
–
–

–
7

7
–
9

10,489
42

10,531
–
(7)

10,729
86

10,815
(240)
(7)

10,524

10,568

2,195
546

2,741
–
549

3,290

7,234

7,790

2,435
553

2,988
(240)
558

3,306

7,262

7,827

The intangible assets are amortised over their estimated useful lives. ‘Unit trust management contracts’ are amortised over ten years
but are no longer in use. ‘Client lists’ are amortised over three to twenty years and ‘Software Licenses’ are amortised over five years.
There are no indications that the value attributable to client lists should be impaired.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 72

Walker Crips Group plc | Annual Report and Accounts 2019

Page 73 |

Leasehold improvements
furniture and equipment
£000

Computer
software
£000

Computer
hardware
£000

Walker Crips Group
Financial statements

1,500
(768)
2,033

2,765
(182)
151

2,734

1,291
(768)
239

762
(178)
296

880

1,854

2,003

2,117
–
238

2,355
–
213

2,568

1,752
–
130

1,882
–
160

2,042

526

473

1,208
(20)
124

1,312
–
47

1,359

946
(12)
148

1,082
–
137

1,219

140

230

2019
£000

100
–
(12)
–

90
(6)
–

84
28
23
5

28
14
–

–
–
–
–

Total
£000

4,825
(788)
2,395

6,432
(182)
411

6,661

3,989
(780)
517

3,726
(178)
593

4,141

2,520

2,706

2018
£000

108
–
(14)
–

101
13
–

72
17
14
3

14
7
–

–
–
–
–

16. Property, plant and equipment

Cost
At 1 April 2017
Disposal of fully depreciated assets
Additions

At 1 April 2018
Disposal of fully depreciated assets
Additions

At 31 March 2019

Accumulated depreciation
At 1 April 2017
Eliminated on disposal of fully depreciated assets
Charge for the year

At 1 April 2018
Disposal of fully depreciated assets
Charge for the year

At 31 March 2019

Carrying amount
At 31 March 2019

At 31 March 2018

17. Interest in joint venture
Summarised financial information in relation to the joint venture is presented below:

As at 31 March
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Included in the above amounts are:
Cash and cash equivalents
Current financial liabilities (excluding trade payables)
Non-current financial liabilities (excluding trade payables)

Net assets (100%)

Group share of net assets (50%)

Period ending 31 March
Revenue
Profit before tax
Profit after tax
Tax expense

Total consolidated income
Total consolidated income (100%)
Group share of total consolidated income (50%)
Dividends received by Group from Joint Venture
Included in the above amounts are:
Depreciation and amortisation

Interest income
Interest expense
Income tax expense (income)

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 72

Walker Crips Group plc | Annual Report and Accounts 2019
Page 73 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

17. Interest in joint venture | continued
The Group has a 50% (2018: 50%) interest in a joint venture, JWPCreers Wealth Management Limited, a regulated financial services
company. The primary activity of JWPCreers Wealth Management Limited is to provide financial advice to the clients of JWPCreers LLP
Accountants, who hold the other 50% interest in the joint venture. The risks associated with the joint venture, which have not changed
during the year, are minimal by comparison to the rest of the Group and where identified have been mitigated by controls or proposed
management actions.

The contractual arrangement provides the Group with equal rights to the net assets of the joint arrangement, with the rights to the
assets and obligation regarding the liabilities resting primarily with JWPCreers Wealth Management Limited. Under IFRS 11 this joint
arrangement is classified as a joint venture and has been included in the consolidated financial statements using the equity method.

At 31 March 2019, the Group owned 50% of JWPCreers Wealth Management Limited (20,000 ordinary ‘B’ shares). JWPCreers LLP owns
50% of JWPCreers Wealth Management Limited (20,000 ordinary ‘A’ shares). Each share carries equal rights to voting and dividends.
Both entities have joint control and joint ownership of JWPCreers Wealth Management Limited. The Board of Directors and officer is
represented by two directors from JWPCreers LLP and two Directors from Walker Crips Wealth Management Limited.

The joint arrangement of control and ownership leads to the classification of JWPCreers Wealth Management Limited as a joint
venture. The Group’s share of both JWPCreers Wealth Management Ltd contingent liabilities and capital commitments is £nil (2018:
£nil).

On 1 April 2019, the Group purchased the share capital ownership of JWPCreers Wealth Management Limited owned by JWPCreers LLP
for the sum of £47,000, giving the Group 100% ownership of both ‘A’ and ‘B’ shares. JWPCreers Wealth Management Limited changed
its name to Walker Crips Ventures Limited on 2 April 2019.

18. Investments

Non-current asset investments

At 31 March 2017
Additions in the period
Disposals in the period

At 31 March 2018

Reclassified on date of in initial application of IFRS 9
Investment transferred to trade and other receivables
Disposals in the period

At 31 March 2019

Debt
investments
£000

Investment
available
for sale
£000

Investment
at fair value
through profit
or loss
£000

Investments
at amortised
cost
£000

–
150
–

150

–
(150)
–

–

68
13
(28)

(53)
–
–

–

–
–
–

–

53
–
(2)

–
–
–

–

–
–
–

–

Total
£000

68
163
(28)

203

–
(150)
(2)

The Group’s life policies are valued based on their market prices as at 31 March 2019, which represent £11,000 of the investments above,
and are held in relation to a number of customer complaints. During the current year, these were reclassified as investments held as fair
value through profit or loss.

The Group’s unregulated collective investment scheme (“UCIS”) investments are held in relation to a number of customer complaints.
These represent £40,000 of the investments above, which is the Directors’ best estimate of the fair value of these investments. During
the current year, these were reclassified as investments held as fair value through profit or loss.

Following a review of the capital framework of Short-Term Lending vehicle Topaz STL, the Group’s debt investment previously held as
long-term debt instrument, has been transferred to trade and other receivables in the period.

Current asset investments

Trading investments
Investments – fair value through profit or loss

Financial assets held for trading
Investments – financial assets held for trading

As at

As at
31 March 2019 31 March 2018
£000

£000

1,005

–

1,851

In accordance with IFRS 9, financial assets held for trading have been reclassified as fair value through profit or loss.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 74

Walker Crips Group plc | Annual Report and Accounts 2019

Page 75 |

Walker Crips Group
Financial statements

Financial assets held for trading represent investments in equity securities and collectives 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.

At 31 March 2018
Financial assets held for trading
Financial assets held as available for sale

At 31 March 2019
Financial assets held at fair value through profit and loss

Level 1
£000

1,851
–

1,851

1,005

Level 2
£000

Level 3
£000

Total
£000

1,851
203

2,054

–
203

203

1,056

–
–

–

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 Group’s financial assets held at fair value through profit and loss under current assets 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 financial assets held at fair value through profit and loss under
non-current assets fall within this category.

Further IFRS 13 disclosures have not been presented here as the balance represents 1.822% (2018: 2.904%) of total assets. There were
no transfers of investments between any of the Levels of hierarchy during the year.

19. Classification and measurement of financial assets and financial liabilities
The basis of classification for financial assets under IFRS 9 is different from that under IAS 39. Financial assets are classified into one of
two categories: amortised cost and fair value through profit or loss (FVTPL).

The table below explains the previous measurement categories under IAS 39 and the new measurement categories under IFRS 9 for
each class of the Group’s investments as at 31 March 2019:

Investments and financial assets held at fair value
Non-current assets
Investments

Classification under IAS 39

UCIS investments
Life Policy investments

Available for sale
Available for sale

£000

40
11

Classification under IFRS 9

Fair value through profit or loss
Fair value through profit or loss

£000

40
11

Current assets
Investments

Held for trading

Other financial assets
Investments

Trade receivables
Other receivables
Cash and cash equivalents

Classification under IAS 39

£000

Classification under IFRS 9

£000

Fair value through profit or loss

1,005

Fair value through profit or loss

1,005

Classification under IAS 39

Loans and receivables
Loans and receivables
Loans and receivables

£000

27,030
3,086
6,916

37,032

Classification under IFRS 9

Amortised at cost
Amortised at cost
Amortised at cost

£000

27,030
3,086
6,916

37,032

The basis of classification for financial liabilities under IFRS 9 remains unchanged from under IAS 39.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 74

Walker Crips Group plc | Annual Report and Accounts 2019
Page 75 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

20. Trade and other receivables

Amounts falling due within one year:
Due from clients, brokers and recognised stock exchanges
Other debtors
Prepayments and accrued income

21. 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

2019
£000

2018
£000

27,030
3,063
5,692

35,785

2019
£000

3,250
3,666

6,916

27,466
5,161
4,800

37,427

2018
£000

4,500
3,867

8,367

Cash and cash equivalents do 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 2019 was £300,600,000 (2018: £307,700,000).

The credit quality of banks holding the Group’s cash at 31 March 2019 is analysed below with reference to credit ratings awarded by Fitch.

A+
A
AA–
BBB+

22. Deferred tax liability

At 1 April 2017
Use of loss brought forward
Credit to the income statement

At 1 April 2018
Use of loss brought forward
Debit to the income statement

At 31 March 2019

2019
£000

2,659
1,122
3,135
–

6,916

Capital
allowances
£000

Short-term
temporary
differences
and other
£000

(8)
–
31

23
–
(10)

(300)
(180)
116

(364)
37
(3)

(330)

2018
£000

–
1,452
4,836
2,079

8,367

Total
£000

(308)
(180)
147

(341)
37
(13)

(317)

Finance (No. 2) Act 2015 enacted reductions in the UK corporation tax rate to 19% with effect from 1 April 2017 and 18% with effect
from 1 April 2020. Finance Act 2016 enacted a reduction in the 18% rate to 17% with effect from 1 April 2020. These changes to
corporation tax rates impacted the deferred tax charge and closing deferred tax position for 2019.

23. Bank overdrafts

Bank overdrafts

2019
£000

(127)

2018
£000

–

The borrowings are repayable on demand and are all denominated in Pound Sterling. As the borrowing represents book overdrafts only,
no bank interest has been paid during the period.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 76

Walker Crips Group plc | Annual Report and Accounts 2019

Page 77 |

Walker Crips Group
Financial statements

24. 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 marketplace where financial risk is
inherent in 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) credit risk;
(ii)
(iii) market risk.

liquidity risk; and

Financial risk management is a central part of the Group’s strategic management which recognises that an effective risk management
programme can increase a business’s 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.

(i) Credit risk management practices
The Group’s credit risk is the risk of loss through default by a counterparty and, accordingly, the Group’s definition of default 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 to settle a trade in full when due. Other credit risks, such as free delivery of securities or cash,
are not deemed to be significant. 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 year end date.

All financial assets at the year end were assessed for credit impairment and no material amounts have arisen having evaluated the age
of overdue debtors, the quality of recourse to third parties and the availability of mitigation through the disposal of liquid collateral in
the form of marketable securities. The Group’s write-off policy is driven by the historic dearth of instances where material irrecoverable
losses have been incurred. Where the avenues of recourse and mitigation outlined above have not been successful, the outstanding
balance, or residual balance if sale proceeds do not fully cover an exposure, will be written off.

In making this assessment the following inputs were considered being historic credit impairment performance, materiality and
frequency of instances of overdue credit exposures and credit assessments of banking and custodian institutions carrying the Group’s
non-retail exposures. Consideration of the level of past credit losses incurred formed the basis of the twelve month and lifetime expected
credit loss estimation technique, applied under the assumption that markets would be orderly and not be operating under distressed
circumstances. The metrics of both client and market success rates of recent years provided a basis to conclude that credit risk arising
on financial assets, including significant trade receivables and payables balances, has not increased significantly since initial recognition
and no credit-impairment has arisen.

Forward-looking information such as encouraging growth rates for the UK economy of 1.75%, a low interest rate environment and the
financial markets’ collective resilience to the uncertainty surround Brexit has contributed to the assessment of negligible expected credit
losses. There have been no changes in the significant assumptions or estimation techniques during the period.

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. There is no material concentrated credit risk as the exposures are spread across a
substantial number of clients and counterparties.

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.

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 76

Walker Crips Group plc | Annual Report and Accounts 2019
Page 77 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

24. Financial instruments and risk profile | continued
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 adequacy requirements of the FCA.

Maximum exposure to credit risk:

Cash
Trade receivables
Other debtors
Accrued income

2019
£000

6,916
27,030
3,063
23

37,032

An ageing analysis of the Group’s financial assets is presented in the following table:

At 31 March 2019

Trade receivables
Cash and cash equivalents
Other debtors

Current
£000

26,734
6,916
3,086

36,736

0-1
month
£000

234
–
–

234

2-3
months
£000

Over 3
months
£000

9
–
–

53
–
–

2018
£000

8,367
27,466
5,161
50

41,044

Carrying
value
£000

27,030
6,916
3,086

37,032

Expected credit loss
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model as opposed to an incurred credit loss
model under IAS 39. The expected credit loss model requires the Group to account for expected credit losses and changes in those
expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other
words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

As noted in principal risks on page 18, the Group undertake a daily assessment of credit risk which includes monitoring of client and
counterparty exposure and credit limits. New clients are individually assessed for their credit worthiness using external ratings where
available and all institutional relationships are monitored at regular intervals.

As at 1 April 2018, the Directors of the Company reviewed and assessed the Group’s existing assets for impairment using the IFRS 9 simplified
approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets and no
additional impairments have been recognised on application and no material defaults are anticipated within the next twelve months.

Concentration of credit risk
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 Group. 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.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 78

Walker Crips Group plc | Annual Report and Accounts 2019

Page 79 |

Walker Crips Group
Financial statements

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 IFPRU 7.

During the year, the Group made contractual undiscounted cash payments of £711,000 being deferred cash consideration for
acquisition of intangible assets.

The table below analyses the Group’s cash outflow based on the remaining period to the contractual maturity date.

2019
Bank overdrafts
Trade and other payables

2018
Bank overdrafts
Trade and other payables

Less than
1 year
£000

127
34,095

34,222

–
38,567

38,567

Total
£000

127
34,095

34,222

–
38,567

38,567

Future contracted undiscounted cash flows for deferred cash consideration amounts to £272,000.

(iii) Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates or equity prices, on financial assets and liabilities will
affect the Group’s results. They relate to price risk on fair value through profit or loss trading investments and are subject to ongoing
monitoring.

Fair value of financial instruments
The fair values of the Group’s financial assets and liabilities are not materially different from their carrying values as they have been
revalued at 31 March 2019 using closing market prices.

A 10% fall in global equity markets would, in isolation, result in a pre-tax decrease to net assets of £100,500 (2018: £185,100). A 10%
rise would have an equal and opposite effect.

The impact of foreign exchange and interest rate risk is not material and is therefore not presented.

25. Trade and other payables

Amounts owed to clients, brokers and recognised stock exchanges
Other creditors
Contract liabilities
Accruals and deferred income

2019
£000

25,781
4,021
4
4,289

34,095

2018
£000

25,226
8,702
3
4,636

38,567

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 thirteen days (2018: fifteen days).

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

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 78

Walker Crips Group plc | Annual Report and Accounts 2019
Page 79 |

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

25. Trade and other payables | continued
Other creditors and long-term liabilities
Provisions included in other creditors and long-term liabilities are made up as follows:

At start of year
Additions
Utilisation of provision
Unused amounts reversed during the year

At end of year

2019
Income tax
£000

2019
Claims/
complaints
£000

2019
Dilapidations
£000

2,011
–
(2,011)
–

–

461
98
(75)
–

484

647
–
(63)
(42)

542

Total
£000

3,119
98
(2,149)
(42)

1,026

Claims/complaints
These provisions relate to outstanding claims and complaints from third parties which, in the opinion of the Board, need providing for
after taking into account the risks and uncertainties surrounding each claim or complaint. The timing of these settlements is unknown
but it is expected that they will be resolved within twelve months.

Dilapidations
The Group has not made any additional provisions for dilapidations in connection with acquired leasehold premises (2018: £507,000).
These costs are expected to arise at the end of the lease with a maximum remaining term of ten years. Provisions for dilapidations
payable on leases after more than one year amounted to £542,000, including £36,000 for the Romford office.

26 Called-up share capital

Called-up, allotted and fully paid
43,327,328 (2018: 42,917,730) Ordinary Shares of 6 2/3 p each

2019
£000

2018
£000

2,888

2,861

The Group’s Articles were amended in 2010 since when there has been no Authorised share capital. Shareholders have no restrictions
on their holdings except for certain Investment Managers who were awarded shares in the Group soon after recently joining as part of
the consideration for their client relationships. These holdings cannot be sold for a period of four to six years from commencement date.
During the year, 409,598 new Ordinary Shares were issued and allotted to various personnel associated with the Group in order to meet
contractual commitments made by the Group as part of the ongoing expansion of its client base. All shares issued to personnel under
recruitment contracts are restricted from sale for periods between four to six years.

The following movements in share capital occurred during the year:

At 1 April 2017
Issue of shares as deferred consideration on acquisition
of intangibles and business combinations

At 1 April 2018
Issue of shares as deferred consideration on acquisition
of intangibles and business combinations

At 31 March 2019

Number of
shares

Share capital Share premium
£000

£000

42,386,423

2,826

3,502

531,307

42,917,730

2,861

172

3,674

409,598

43,327,328

2,888

3,763

Total
£000

6,328

207

6,535

116

6,651

The Group’s capital is defined for accounting purposes as total equity. As at 31 March 2019 this totalled £21,721,000 (2018:
£22,013,000). The increase during the year was attributable to the Group issuing shares to personnel under recruitment contracts, the
profit for the year less dividends paid.

The Group’s objectives when managing capital are to:
safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits
for other stakeholders;
maintain a strong capital base in a cost-efficient manner to be able to support the development of the business when required;
optimise the distribution of capital across the Group’s subsidiaries, reflecting the requirements of each company;
strive to make capital freely transferable across the Group where possible; and
comply with regulatory requirements at all times.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 80

Walker Crips Group plc | Annual Report and Accounts 2019

Page 81 |

Walker Crips Group
Financial statements

Walker Crips Group plc is classified for capital purposes as an investment management group and performs an Internal Capital
Adequacy Assessment Process (“ICAAP”), which is presented to the FCA on request. Regulatory capital resources for ICAAP purposes are
calculated in accordance with published rules. These require certain adjustments to and certain deductions from accounting capital, the
latter largely in respect of intangible assets. The ICAAP compares regulatory capital resources against regulatory capital requirements
derived using the FCA’s Pillar 1 and Pillar 2 methodology. The Group has adopted the standardised approach to calculating its Pillar 1
credit risk component and the basic indicator approach to calculating its operational risk component. Capital management policy and
practices are applied at both Group and entity level.

In addition to a variety of stress tests performed as part of the ICAAP process, and daily reporting in respect of treasury activity, capital
levels are monitored and forecast to ensure that dividends and investment requirements are appropriately managed and appropriate
buffers are kept against adverse business conditions.

Regulatory capital
No breaches were reported to the FCA during the financial years ended 31 March 2018 and 2019.

The Group 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 income statement in relation to these shares.

27. Reserves
Apart from share capital and share premium, the Group holds reserves at 31 March 2019 under the following categories:

Own shares held

(£312,000) (2018: (£312,000))

– the negative balance of the Group’s own shares, which have been

Retained earnings

£10,659,000 (2018: £11,122,000)

Other reserves

£4,723,000 (2018: £4,668,000)

bought back and held in treasury.

– the net cumulative earnings of the Group not paid out as dividends
retained to be reinvested in our core, or developing, companies.
– the cumulative share premium on the issue of shares as deferred

consideration for corporate acquisitions.

28. Deferred share consideration
The Group recognised total expenses of £nil (2018: £nil) related to deferred share consideration on the purchase of intangible assets.

29. Cash (used)/generated by operations

Operating profit for the year
Adjustments for:
Amortisation of intangibles
Changes in the fair value of deferred consideration
Loss on sale of tangible fixed asset
Net change in fair value of financial instruments at fair value through profit or loss
Share of joint venture income
Depreciation
Decrease in debtors
Decrease in creditors

2019
£000

402

558
(102)
4
91
(14)
593
1,642
(3,805)

2018
£000

890

553
–
7
(55)
(7)
517
15,284
(11,533)

Net cash (outflow)/inflow from operations

(631)

5,656

30. Financial commitments
Capital commitments
At the end of the year, there were capital commitments of £nil (2018: £nil) contracted but not provided for and £nil (2018: £nil) capital
commitments authorised but not contracted for.

Lease commitments
The Group leases various offices and other assets under non-cancellable operating lease agreements.

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

Within one year
Within two to five years
More than five years

2019
£000

1,445
3,742
2,027

2018
£000

876
3,161
2,571

Walker Crips Group plc | Annual Report and Accounts 2019
Page 81 |

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 80

Notes
to the accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

31. Related parties
Directors and their close family members have dealt on standard commercial terms with the Group. The commission and fees earned by
the Group included in revenue through such dealings is as follows:

Commission and fees received from Directors and their close family members

2019
£000

2018
£000

Other related parties include Charles Russell Speechlys, of which M. J. Wright, Non-Executive Director, is a Partner. Charles Russell
Speechlys provides certain legal services to the Group on normal commercial terms and the amount paid and expensed during the
year (including the fees paid to the firm for Mr. Wright’s services as director) was £181,000 (2018: £195,000), including administrative
expenses or other receivables if the costs are reimbursable.

Revenue of £3,354 (2018: £7,330) was earned by the Group from Phillip Securities (HK) Limited (a Phillip Brokerage Pte Limited
company, where H. M. Lim is a shareholder) 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, both these
items being included in revenue. Transactions between the Group 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 in the table below.

Key Management personnel compensation:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment

2019
£000

590
45
–
86
9

730

2018
£000

771
94
–
–
11

876

32. Contingent liability
During a prior year, two Group companies, Walker Crips Group plc (“WCG”) and Walker Crips Investment Management Limited
(“WCIM”) received draft proceedings in respect of a potential claim, from a former listed corporate client of Keith Bayley Rogers
& Co (“KBR”) a former subsidiary of the Group. The corporate client alleges that its former Executive Chairman and his associates
misappropriated assets of £5.6 million from it between 2010 and 2014 and used these assets to purchase and sell shares in the client
through the brokerage of WCG, WCIM and KBR. The client asserts that WCG and WCIM acted dishonestly to assist the Chairman to
perpetrate the alleged fraud and was party to an unlawful means conspiracy to cause it loss. It is also claimed that WCG and WCIM are
vicariously liable for any wrongdoing on the part of KBR. The potential quantum of the claim is in excess of £1 million.

The claims are strenuously denied by the Directors and the Directors consider the claim to be without any merit, as supported by a legal
opinion obtained by WCG and WCIM, which advises that the claims are ‘weak’. A detailed response denying liability for the claims was
submitted to the client’s representatives in December 2016. The Directors have heard nothing further from the former KBR client since
then and as there is no date of expiry for the claim it will remain a contingent liability.

33. Subsequent events
On 1 April 2019, the Group purchased the share capital ownership of JWPCreers Wealth Management Limited owned by JWPCreers LLP
for the sum of £47,000, giving the Group 100% ownership of both ‘A’ and ‘B’ shares. JWPCreers Wealth Management Limited changed its
name to Walker Crips Ventures Limited on 2 April 2019.

Since the year end a team of advisers has decided to leave the Group on amicable terms, which will result in the transfer of £239 million of
Assets Under Management and Administration. The transfer of clients and their assets will take place later this year with the consequent
impact on future revenues and profits.

There are no further material events arising after 31 March 2019, which have an impact on these financial statements.

34. Long-term liabilities – deferred cash consideration

Amounts due to personnel under recruitment contracts/acquisition agreements

2019
£000

2018
£000

197

These amounts are based on fixed contractual terms and the fair value of the liability approximates carrying value, due to the consistency
of the prevailing market rate of interest when compared to the inception of liability.

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 82

Walker Crips Group plc | Annual Report and Accounts 2019

Page 83 |

Company
balance sheet
as at 31 March 2019

Non-current assets
Other intangible assets
Property, plant and equipment
Investments measured at cost less impairment

Current assets
Trade and other receivables
Investments – fair value through profit or loss
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Shares to be issued – deferred consideration

Net current liabilities

Long-term liabilities
Deferred cash consideration
Dilapidation provision
Landlord contribution to leasehold improvements

Net assets

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

Walker Crips Group
Financial statements

Notes

2019
£000

2018
£000

39
38
40

43
44

48
48
48

47
47
47
47
47

3,879
1,556
17,425

22,860

994
–
269

4,181
1,762
17,575

23,518

683
579
605

1,263

1,867

24,123

25,385

(2,314)
–

(2,314)

(1,051)

(47)
(450)
(460)

(957)

20,852

2,888
3,763
(312)
9,790
4,723

(4,257)
(171)

(4,428)

(2,561)

(197)
(450)
(523)

(1,170)

19,787

2,861
3,674
(312)
8,896
4,668

Equity attributable to equity holders of the Parent Company

20,852

19,787

As permitted by section 408 of the Companies Act 2006 the Parent 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 £1,690,000 (2018: loss of £573,000).

The financial statements of Walker Crips Group plc (Company registration no: 01432059) were approved by the Board of Directors and
authorised for issue on 11 July 2019.

Signed on behalf of the Board of Directors:

R. A. FitzGerald FCA
Director
11 July 2019

Walker Crips Group plc | Annual Report and Accounts 2019

| Page 82

Walker Crips Group plc | Annual Report and Accounts 2019
Page 83 |

Company statement
of changes in equity
year ended 31 March 2019

Equity as at 31 March 2017

Total comprehensive income for the year

Contributions by and distributions to owners
Dividends paid
Issue of shares on acquisition of intangibles

Total contributions by and distributions to owners

Called-up
share capital
£000

2,826

Share
premium
£000

3,502

Own
shares held
£000

Other
£000

Profit and loss
account
£000

Total
equity
£000

(312)

4,668

10,255

20,939

–

–
35

–

–
172

172

–

–
–

–

–
–

–

(573)

(786)
–

(786)

(786)
207

579

Equity as at 31 March 2018

2,861

3,674

(312)

4,668

8,896

19,787

Total comprehensive income for the year

Contributions by and distributions to owners
Dividends paid
Issue of shares on acquisition of intangibles

Total contributions by and distributions to owners

–

–
27

–

–
89

–

–
–

–

1,690

–
55

(796)
–

(796)

(796)
171

(625)

Equity as at 31 March 2019

2,888

3,763

(312)

4,723

9,790

20,852

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 84

Walker Crips Group plc | Annual Report and Accounts 2019

Page 85 |

Notes
to the Company accounts
year ended 31 March 2019 | for Walker Crips Group plc

Walker Crips Group
Financial statements

35. Significant accounting policies
The separate financial statements of Walker Crips Group plc, the Parent Company, are presented as required by the Companies Act 2006.

The financial statements have been prepared under the historical cost convention except for the modification to a fair value basis
for certain financial instruments as specified in the accounting policies below, and in accordance with Financial Reporting Standard
(FRS 102), the Financial Reporting Standard applicable in the UK and the Republic of Ireland, and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also
requires Management to exercise judgement in applying the Parent Company’s accounting policies (see Note 36).

The financial statements are presented in the currency of the primary activities of the Parent Company (its functional currency). For the
purpose of the financial statements, the results and financial position are presented in Sterling (£). The principal accounting policies
have been summarised below. They have all been applied consistently throughout the year and the preceding year.

The Parent Company has chosen to adopt the disclosure exemption in relation to the preparation of a cash flow statement under FRS 102.

Tangible fixed assets
Tangible fixed assets comprise fixtures and equipment and are recorded at the point at which payment is made at cost. Property, plant
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

33 1/3% per annum on cost
Between 20% and 33 1/3% per annum on cost
Over the term of the lease
33 1/3% per annum on cost

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.

Intangible assets
Client lists
Acquired client lists are recognised when acquired, generating revenue from clients and Investment Managers are capitalised based on
the expected future cash flows 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 twenty years.

Client lists are recognised when it is probable that future economic benefits will flow to the Parent Company and the cost of the asset
can be measured reliably whilst the risk and rewards have also transferred into the Parent Company’s ownership.

Impairment of non-financial assets
At each reporting date, the Parent Company reviews the carrying amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash flows (cash-generating units). If there is an indication of possible
impairment, the recoverable amount of any affected asset (or group of related assets) is estimated and compared with its carrying
amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an
impairment loss is recognised immediately in profit or loss.

Taxation
The tax expense represents the sum of the tax currently payable and any deferred tax.

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 comprehensive income 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 assets and liabilities are not discounted.

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Page 85 |

Notes
to the Company accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

35. Significant accounting policies | continued
Own shares held
Own shares consist of treasury shares which are recognised at cost as a deduction from equity shareholders’ funds. Subsequent
consideration received for the sale of treasury shares is also recognised in equity with any difference being taken to retained earnings.
No gain or loss is recognised on sale of treasury shares.

Financial instruments
Financial assets and financial liabilities are recognised in the balance sheet when the Parent Company becomes a party to the
contractual provisions of the instrument. Section 11 of FRS 102 has been applied in classifying financial instruments depending on the
nature of the instrument held.

Revenue
Income consists of interest received or accrued over time and dividend income recorded when received.

Investments
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.

Financial assets are derecognised when the rights to receive cash flows have expired, or the Parent Company has transferred
substantially all the risks and rewards of ownership.

Investments are classified as basic financial instruments 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.

Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment. The fair valuation of the Parent
Company’s basic financial instrument investments is based upon the underlying market price and volatility which may be subject to
fluctuation from year to year (see Note 45 for further information).

Debtors
Other debtors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors are
subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective
evidence that the Group will not be able to collect all amounts due.

Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits, together with other short-term highly liquid investments, which
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 Parent Company after deducting all of its
liabilities. Equity instruments issued by the Parent Company are recorded at the proceeds received, net of direct issue costs. Financial
liabilities are initially recognised at fair value and classified as fair value through profit or loss. No liabilities are held for trading.

Share-based payments
The Parent Company makes share based payments to certain self-employed account executives of a subsidiary within the Group, the share-
based payment is accounted for as an intangible in the respective subsidiary. The Parent Company will then record the payment as an
intangible asset and take an annual amortisation charge to its income statement in respect of the share-based payment.

Shares to be issued
Shares to be issued represent the Parent Company’s best estimate of the Ordinary Shares in the Parent Company which are likely to
be issued following business combinations or the acquisition of client relationships which involve deferred payments in the Parent
Company’s shares. Where shares are due to be issued within a year, the sum is included in current liabilities. Shares to be issued are
dependent on the achievement of predefined targets and are treated as a liability until they are allotted and issued, at which time
they are reclassified within equity. The Parent Company had recognised as a liability the sum which has been issued and allotted to
personnel associated with the Parent Company in order to meet contractual commitments given as part of the recent expansion of its
client base.

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Page 87 |

Walker Crips Group
Financial statements

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
After conducting enquiries, the Directors believe that the Parent 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 Parent
Company’s business activities, together with the factors likely to affect its future development, performance and position, has been
rigorously assessed.

36. Key sources of estimation uncertainty and judgements
The preparation of financial statements in conformity with generally accepted accounting practice requires Management to make
estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and
liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period.

Intangible and financial assets – judgement
Acquired client lists are capitalised based on current fair values. 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 twenty years to be both appropriate and in line with peers. No acquisitions were made in the period
ending 31 March 2019.

Financial assets comprise equity investments which are held for trading, with fair value determined by the market price of each
investment.

The determination of what constitutes ‘observable’ requires significant judgement by the Directors when using peer comparisons
to rationalise our assessments. The Directors consider observable data to be that market data which is readily available, regularly
distributed or updated, reliable and verifiable, not proprietary, provided by multiple, independent sources that are actively involved in
the relevant market.

37. Profit/loss for the year
Profit for the financial year of £1,690,000 (2018: loss of £573,000) is after an amount of £51,000 (2018: £36,000) related to the
auditor’s remuneration for audit services to the Parent Company.

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

2019
£000

176
15
7

198

2018
£000

268
28
14

310

In the current year, employee costs are those of the Non-Executive Directors, a proportion of Executive Directors and the cost of the
Group’s profit share scheme. The remaining Executive Director Employee costs are borne by Walker Crips Investment Management
Limited.

The monthly average number of staff employed during the year was:

Executive Directors
Non-Executive Directors

2019
Number

2018
Number

3
4

4
4

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Page 87 |

Notes
to the Company accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

38. Property, plant and equipment

Cost
At 1 April 2018
Additions

At 31 March 2019

Amortisation
At 1 April 2018
Charge for the year

At 31 March 2019

Net book value
At 31 March 2019

At 31 March 2018

39. Other intangible assets

Cost
At 1 April 2018
Additions

At 31 March 2019

Amortisation
At 1 April 2018
Charge for the year

At 31 March 2019

Net book value
At 31 March 2019

At 31 March 2018

40. Fixed asset investments

Investment in subsidiary companies
Debt instruments

Leasehold
improvements
furniture and
equipment
£000

Computer
software
£000

2,127
(2)

2,125

366
203

569

1,556

1,761

858
–

858

857
1

858

–

Total
£000

2,985
(2)

2,983

1,223
204

1,427

1,556

1,762

Client lists
£000

Total
£000

5,062
(7)

5,055

881
295

5,062
(7)

5,055

881
295

1,176

3,879

4,181

3,879

4,181

2019
£000

17,425
–

17,425

2018
£000

17,425
150

17,575

A complete list of subsidiary undertakings can be found in Note 53.

Following a review of the capital framework of Short-Term Lending vehicle Topaz STL, the Company’s debt investment, previously held
as debt instruments, has been reclassified as trade and other receivables in the period.

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Page 89 |

41. Trade and other receivables

Amounts due from subsidiary undertakings
Deferred tax asset
Prepayments and accrued income
Other debtors

42. Deferred taxation

At 1 April
Use of loss brought forward
Credit/(charge) to the income statement

At 31 March

Walker Crips Group
Financial statements

2019
£000

492
224
28
250

994

2019
£000

140
–
84

224

2018
£000

111
140
43
389

683

2018
£000

302
(156)
(6)

140

Finance (No. 2) Act 2015 enacted reductions in the UK corporation tax rate to 19% with effect from 1 April 2017 and 18% with effect
from 1 April 2020. Finance Act 2016 enacted a reduction in the 18% rate to 17% with effect from 1 April 2020. These changes to
corporation tax rates impacted the deferred tax charge and closing deferred tax position for 2019.

43. Trade and other payables

Accruals and deferred income
Amounts due to subsidiary undertakings
Other creditors
Amount due to personnel under recruitment contracts

44. Shares to be issued – deferred consideration

Amounts due as deferred consideration on acquisition of intangibles

2019
£000

117
1,950
247
–

2,314

2019
£000

–

2018
£000

473
2,986
63
735

4,257

2018
£000

171

45. Fair value disclosures
FRS 102 requires a three-level hierarchy disclosure for categorising financial assets and liabilities carried at fair value and requires
enhanced disclosures about fair value measurement. The fair value hierarchy classifies financial assets and liabilities according to the
source of inputs ranked according to availability of observable market prices used in measuring fair value as follows:

Level 1 – The unadjusted quoted price in an active market for identical assets and liabilities that the entity can access at the

measurement date. The Parent Company’s trading investments fall within this category;

Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or

liability, either directly or indirectly. The Parent Company does not hold financial instruments in this category; and
Level 3 – I nputs are unobservable (i.e. for which market data is unavailable) for the asset and liability. The Parent Company’s basic

financial instruments held at fair value (within fixed asset investments) fall within this category.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety should be determined on the
basis of the lowest level input that is significant to the fair value measurement in its entirety.

The categorisation of the Parent Company’s investments within the hierarchy is based upon the pricing transparency of the investments
and does not necessarily correspond to the Directors’ perceived risk of the investments.

The determination of what constitutes “observable” requires significant judgement by the Directors. The Directors consider observable
data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, provided
by multiple, independent sources that are actively involved in the relevant market.

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Page 89 |

Notes
to the Company accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

45. Fair value disclosures | continued
The following tables analyse within the fair value hierarchy, the Parent Company’s current asset investment measured at fair value:

At 31 March 2019
Financial assets held at fair value through profit and loss

At 31 March 2018
Financial assets held at fair value through profit and loss

–

579

–

Level 1
£000

Level 2
£000

Level 3
£000

Total
£000

–

150

729

During the year, assets previously held under Level 1 financial assets at fair value through profit and loss were sold and following
a review of the capital framework of Short-Term Lending vehicle Topaz STL, the Company’s debt investment, previously held as
investment available for sale, has been transferred to trade and other receivables in the period.

46. Risk management policies
Procedures and controls are in place to identify, assess and ultimately control the financial risks faced by the Parent Company 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 Parent Company’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 Parent Company and for the Group as a whole 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) credit risk;
(ii) liquidity risk; and
(iii) market risk.

Further information on the disclosures and policies carried out by the Parent Company and the Group are made in Note 24 of the
consolidated financial statements.

(i) Credit risk
Maximum exposure to credit risk:

Cash
Other debtors

As at 31 March

2019
£000

269
250

519

2018
£000

605
502

1,107

The credit quality of banks holding the Group’s cash at 31 March 2019 is analysed below with reference to credit ratings awarded by
Fitch.

A+
A
BBB+

As at 31 March

Analysis of other debtors due from financial institutions:

Neither past due nor impaired
Past due but not impaired

<30 days
>30 days
>3 months

Walker Crips Group plc | Annual Report and Accounts 2019
| Page 90

2019
£000

224
45
–

269

2019
£000

250
–
–
–

250

2018
£000

–
377
228

605

2018
£000

389
–
–
–

389

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Page 91 |

Walker Crips Group
Financial statements

(ii) Liquidity risk
The tables below analyse the Parent Company’s future undiscounted cash outflows based on the remaining period to the contractual
maturity date:

Creditors due within one year
Creditors due after more than one year

Within one year
Within two to five years
After more than five years

2019
£000

2,314
497

2,811

2019
£000

2,314
47
450

2,811

2018
£000

4,257
647

4,904

2018
£000

4,257
197
450

4,904

(iii) Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates or equity prices will affect the Group’s income.

These relate to price risk breached on available-for-sale and trading investments and closely monitored using limits to prevent
significant losses.

Fair value of financial instruments
The fair values of the Parent Company’s financial assets and liabilities are not materially different from their carrying values as they
have been revalued at 31 March 2019 using closing market prices.

A 10% fall in global equity markets would, in isolation, result in a pre-tax decrease to net assets of £nil (2018: £57,900). A 10% rise
would have an equal and opposite effect.

47. Called-up share capital

Called-up, allotted and fully paid
43,327,328 (2018: 42,917,730) Ordinary Shares of 6 2/3p each

2019
£000

2018
£000

2,888

2,861

During the year, 409,598 new Ordinary Shares were issued and allotted to various personnel associated with the Parent Company in
order to meet contractual commitments made by the Parent Company as part of the ongoing expansion of its client base.

The Parent Company holds 750,000 of its own shares, purchased for a total cash consideration of £312,000. In line with the principles
of FRS 102, section 11, 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 following movements in share capital occurred during the year:

At 1 April 2017
Issue of shares as deferred consideration on acquisition
of intangibles and investments

At 1 April 2018
Issue of shares as deferred consideration on acquisition
of intangibles and investments

At 31 March 2019

Number of
shares

42,386,423

531,307

42,917,730

Share
capital
£000

2,826

2,861

Share
premium
£000

3,502

172

3,674

409,598

43,327,328

2,888

3,763

Total
£000

6,328

207

6,535

116

6,651

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| Page 90

Walker Crips Group plc | Annual Report and Accounts 2019
Page 91 |

Notes
to the Company accounts
year ended 31 March 2019 | for Walker Crips Group plc | continued

47. Called-up share capital | continued
Walker Crips is classified for capital purposes as an Investment Management group and performs an Internal Capital Adequacy
Assessment Process (ICAAP), which is presented to the FCA on request. Regulatory capital resources for ICAAP purposes are calculated
in accordance with published rules. These require certain adjustments to and certain deductions from accounting capital, the latter
largely in respect of intangible assets. The ICAAP compares regulatory capital resources against regulatory capital requirements derived
using the FCA’s Pillar 1 and Pillar 2 methodology. The Group has adopted the standardised approach to calculating its Pillar 1 credit risk
component and the basic indicator approach to calculating its operational risk component. Capital management policy and practices
are applied at both Group and entity level.

Apart from share capital and share premium, the Parent Company holds reserves at 31 March 2019 under the following categories:

Own shares held

(£312,000) – t he negative balance of the Parent Company’s own shares, which have been bought back

and held in treasury.

Retained earnings

£9,790,000

– the net cumulative earnings of the Parent Company not paid out as dividends retained to

be reinvested in our core, or new, business.

Other reserves

£4,723,000

– the cumulative share premium on the issue of shares as deferred consideration for

corporate acquisitions.

48. Creditors: amounts falling due after more than one year

Dilapidation provision
Landlord contribution to leasehold improvements
Deferred cash consideration

2019
£000

450
460
47

957

2018
£000

450
523
197

1,170

Amounts due represent deferred cash consideration based on fixed contractual terms which means that there is no difference between
fair value and the carrying amounts.

49. Financial commitments
Capital commitments
At the end of the year, there were capital commitments of £nil (2018: £nil) contracted but not provided for and £nil (2018: £nil) capital
commitments authorised but not contracted for.

Lease commitments
The annual commitments under non-cancellable operating leases fall due as follows:

Within one year
Within two to five years
More than five years

2019
£000

763
2,775
1,976

2018
£000

736
2,807
2,571

50. Related party transactions
Key Management are those persons having authority and responsibility for planning, controlling and directing the activities of the
Parent Company and Group. In the opinion of the Board, the Parent Company and Group’s key Management are the Directors of
Walker Crips Group plc.

Total compensation to key Management personnel is £730,000 (2018: £876,000).

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Walker Crips Group
Financial statements

51. Contingent liability
During a prior year, two Group companies, Walker Crips Group plc (“WCG”) and Walker Crips Investment Management Limited
(“WCIM”) received draft proceedings in respect of a potential claim, from a former listed corporate client of Keith Bayley Rogers
& Co (“KBR”) a former subsidiary of the Group. The corporate client alleges that its former Executive Chairman and his associates
misappropriated assets of £5.6 million from it between 2010 and 2014 and used these assets to purchase and sell shares in the client
through the brokerage of WCG, WCIM and KBR. The client asserts that WCG and WCIM acted dishonestly to assist the Chairman to
perpetrate the alleged fraud and was party to an unlawful means conspiracy to cause it loss. It is also claimed that WCG and WCIM are
vicariously liable for any wrongdoing on the part of KBR. The potential quantum of the claim is in excess of £1 million.

The claims are strenuously denied by the Directors and the Directors consider the claim to be without any merit as supported by a legal
opinion obtained by WCG and WCIM, which advises that the claims are ‘weak’. A detailed response denying liability for the claims was
submitted to the client’s representatives in December 2016. The Directors have heard nothing further from the former KBR client since
then and as there is no date of expiry for the claim, it will remain a contingent liability.

52. Subsequent events
On 1 April 2019, the Group purchased the share capital ownership of JWPCreers Wealth Management Limited owned by JWPCreers
LLP, giving the Group 100% ownership of both ‘A’ and ‘B’ shares. JWPCreers Wealth Management Limited changed its name to Walker
Crips Ventures Limited on 2 April 2019.

There are no further material events arising after 31 March 2019, which have an impact on these financial statements.

53. Subsidiaries and jointly-owned entities

Principal place
of business

Principal activity

Class and percentage
of shares held

Group
Trading subsidiaries
Walker Crips Investment Management Limited1
London York Fund Managers Limited3
Walker Crips Wealth Management Limited3
Ebor Trustees Limited3
Barker Poland Asset Management LLP1

Non-trading subsidiaries
Walker Crips Financial Services Limited1
G & E Investment Services Limited3
Ebor Pensions Management Limited3
Investorlink Limited1
Walker Cambria Limited1
Walker Crips Trustees Limited1
W.B. Nominees Limited2
WCWB (PEP) Nominees Limited2
WCWB (ISA) Nominees Limited2
WCWB Nominees Limited2
Walker Crips Consultants Limited1
Walker Crips Property Income Limited1
TBWC No 3 Limited1
EnOC Technologies Limited1

United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom

United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom

Investment management
Management services
Financial services advice
Pensions management
Investment management

Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Membership 100%

Financial services
Holding company
Dormant company
Agency stockbroking
Dormant company
Dormant company
Nominee company
Nominee company
Nominee company
Nominee company
Dormant company
Dormant company
Dormant company
Dormant company

Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%
Ordinary Shares 100%

Group and Walker Crips Investment Management
Jointly controlled entities
JWPCreers Wealth Management Limited3

United Kingdom

Financial services advice

Ordinary Shares 50%

The registered office for companies and associated undertakings is:
1 Old Change House, 128 Queen Victoria Street, London, England, EC4V 4BJ.
2 St James House, 27-43 Eastern Road, Romford, Essex, England, RM1 3NH.
3 Apollo House, Eboracum Way, York, England, YO31 7RE.

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Notice
of Annual General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should
take, you are recommended to seek your own financial advice from your stockbroker or other independent adviser authorised under the
Financial Services and Markets Act 2000.

If you have sold or transferred all of your shares in Walker Crips Group plc, please forward this document, together with the
accompanying documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer
so they can pass these documents to the person who now holds the shares.

Notice is hereby given that the Annual General Meeting of Walker Crips Group plc (“the Company”) will be held at Old Change House,
128 Queen Victoria Street, London EC4V 4BJ on 4 September 2019 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:

To receive and adopt the Directors’ reports and audited financial statements for the year ended 31 March 2019.

To approve the Directors’ remuneration report (excluding the summary of the Directors’ remuneration policy set out on pages
40 to 42 of the Directors’ remuneration report) for the year ended 31 March 2019.

To declare a final dividend of 0.33 pence per Ordinary Share for the year ended 31 March 2019.

To re-elect as a Director Mr. David Gelber.

To re-elect as a Director Mr. Martin Wright.

To re-elect as a Director Mr. Hua Min Lim.

To re-appoint BDO LLP as auditor of the Company until the conclusion of the next meeting at which accounts are laid.

To authorise the Directors to set the auditor’s remuneration.

As special business
To consider and, if thought fit, to pass the following resolution which will be proposed as an ordinary resolution:

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 fifteen 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 £946,162 (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).

To consider, and if thought fit, to 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 fifteen 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 £283,848 (equivalent to 10% of the Company’s issued
share capital (excluding treasury shares) 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 Companies Act 2006 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 6 2/3 pence each in the capital of the Company (Ordinary Shares) provided that:

a) 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;

b) the minimum price which may be paid for any Ordinary Shares is 6 2/3 pence per Ordinary Share;
c) 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
ten business days before the purchase is made;

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Walker Crips Group
Financial statements

d) the authority hereby conferred shall expire at the earlier of the conclusion of the next Annual General Meeting of the Company

or the date falling fifteen months from the date of the passing of this resolution; and

e) 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).

12.

That the Company be authorised to call a general meeting of the shareholders, other than an Annual General Meeting, on not less
than fourteen clear days’ notice.

By order of the Board

R. Goddard
Secretary
29 July 2019

Walker Crips Group plc
Old Change House, 128 Queen Victoria Street, London, England, EC4V 4BJ
Reg No. 01432059

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Notice
of Annual General Meeting
continued

Notes on resolutions
The following paragraphs explain, in summary, the resolutions to be proposed at the Annual General Meeting (“the Meeting”). Your vote
is important to the Company and all shareholders are encouraged to vote on all shareholder matters.

The Board considers that all resolutions proposed are likely to promote the success of the Company and are in the best interests of the
Company and its shareholders as a whole. Your Board unanimously recommends that shareholders vote in favour of them.

Resolution 1: Receipt of the 2019 Annual Report and Accounts
The Directors’ and auditor’s reports and the audited financial statements of the Company (“the Annual Report and Accounts”) for the
year ended 31 March 2019 have been made available to shareholders and will be presented at the Meeting. The Annual Report and
Accounts may also be accessed on the Company’s website at www.wcgplc.co.uk. Shareholders may raise any questions on the Annual
Report and Accounts under this resolution.

Resolution 2: Approval of the 2019 Directors’ remuneration report
In accordance with section 439 of the Companies Act 2006, shareholders are requested to approve the Directors’ remuneration report
(other than the summary of the Directors’ remuneration policy set out on pages 40 to 42) which can be found on pages 35 to 42 of the
Annual Report and Accounts for the year ended 31 March 2019. The vote is advisory only and does not affect the actual remuneration
paid to an individual Director.

The Directors’ remuneration policy was approved by shareholders at the Annual General Meeting on 5 September 2018 for a period
of up to three years and is, therefore, not required to be put to shareholders for approval at this year’s Meeting. It will be put to
shareholders for approval again by no later than the Annual General Meeting in 2020. The full remuneration policy can be found on
pages 40 to 44 of the 2017 Annual Report and Accounts.

Resolution 3: Final dividend
Shareholders are being asked in Resolution 3 to approve a final dividend of 0.33 pence per Ordinary Share for the year ended 31 March
2019. If you approve the recommended final dividend, this will be paid on 13 September 2019 to all ordinary shareholders who were on
the register of members at the close of business on 23 August 2019.

Resolutions 4 to 6: Re-election of Directors
The UK Corporate Governance Code 2016 provides that Non-Executive Directors who have served longer than nine years should be
subject to annual re-election.

Mr. David Gelber, Mr. Martin Wright and Mr. Hua Min Lim are retiring because each of them have been Non-Executive Directors for
more than nine years. Mr. Gelber, Mr. Wright and Mr. Lim are seeking re-election.

The resolutions relating to the re-election of the Directors are proposed as separate resolutions numbered 4 to 6. The Board believes
that the performance of each of the Directors standing for re-election continues to be effective and each Director demonstrates
commitment to the role. As such, the Board determined that the Company would benefit by retaining the knowledge and experience
gained by these Directors over the previous years.

The biographies of the Directors eligible and standing for re-election at the Meeting are set out on pages 24 and 25 of the Annual
Report and Accounts for the year ended 31 March 2019.

Resolution 7: Appointment of auditor
The Company is required to appoint its auditor at each general meeting at which accounts are laid before the shareholders and is
usually appointed to hold office from the conclusion of an Annual General Meeting until the conclusion of the next Annual General
Meeting. BDO LLP have indicated their willingness to continue in office.

Accordingly, shareholders are being asked in resolution 7 to approve the re-appointment of BDO LLP as auditor of the Company from
the conclusion of the Meeting until the conclusion of the next meeting at which accounts are laid.

Resolution 8: Remuneration of the auditor
This resolution authorises the Directors, in accordance with standard practice, to set the remuneration of the auditor. 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 and the Group to the auditor and recommend them to the Board.

Resolution 9: Renewal of the Directors’ authority to allot shares
Resolution 9 will be proposed before the Meeting to confer authority on the Directors to allot shares, or grant rights to subscribe for or
to convert any security into shares, of up to an aggregate nominal amount of £946,162 (being one-third of the Company’s issued share

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Walker Crips Group
Financial statements

capital (excluding treasury shares) as at 26 July 2019). This resolution, which is an ordinary resolution, will replace the authority given to
the Directors at the last Annual General Meeting on 5 September 2018.

750,000 shares are held in treasury as at 26 July 2019 (representing approximately 2% of the Company’s issued share capital
(excluding treasury shares) on that date).

The Directors have no present intention to issue new Ordinary Shares other than those commitments disclosed in the Annual Report and
Accounts, if any. 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 fifteen months from the date of the
passing of the resolution, whichever is the earlier.

Resolution 10: Renewal of the Directors’ authority to disapply pre-emption rights
Resolution 10 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 £283,848 (being 10% of the Company’s issued share capital (excluding treasury shares) as at 26 July
2019) 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 5 September 2018.

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 fifteen 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 6 2/3 pence each in the share capital of the Company at a price or prices which will not be less than 6 2/3 pence 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.

Shareholders may further note that there were neither warrants nor options to subscribe for equity shares in the Company which were
outstanding as at 26 July 2019.

This authority will expire on the next Annual General Meeting of the Company or the date falling fifteen months from the date of the
passing of the resolution, whichever is the earlier.

Resolution 12: Notice period for general meeting
The notice period for general meetings of the Company is twenty-one clear days unless shareholders approve a shorter notice period
which cannot be less than fourteen clear days. Annual General Meetings will continue to be called on at least twenty-one clear days’
notice.

Resolution 12, which is a special resolution, will enable the Company to call general meetings (other than Annual General Meetings) on
fourteen clear days’ notice. The Directors believe that this is in the best interests of the shareholders and it is intended that this shorter
notice period would not be used as a matter of routine for such meetings, but only where the flexibility is merited by the business of the
meeting and is thought to be to the advantage of shareholders as a whole.

The approval will be effective until the Company’s Annual General Meeting in 2020 when it is intended that a similar resolution to
renew the authority will be proposed.

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Notice
of Annual General Meeting
continued

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 2 September 2019; 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.

Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person 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.

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, Steelpark Road, Halesowen B62 8HD; and
received by Neville Registrars Limited no later than 11.00 a.m. on 2 September 2019.

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.

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://
my.euroclear.com/euilegal). 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 or instructions 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, regardless of whether
it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must, in
order to be valid, be transmitted so as to be received by the issuer’s agent ID (7RA11) by no later than 11.00 a.m. on 2 September
2019, or, in the event of an adjournment of the meeting, 48 hours before the adjourned meeting. 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. After this time,
any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

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Walker Crips Group
Financial statements

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, Steelpark Road, Halesowen B62 8HD.
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 Limited no later than 11.00 a.m. on 2 September 2019.

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.

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 26 July 2019 (being the latest practicable day prior to the date of this notice), the Company’s issued share capital comprised
43,327,328 Ordinary Shares of 6 2/3 pence 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 26 July 2019 and, therefore, the total number of voting
rights in the Company as at such date is 42,577,328.

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.

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Notice
of Annual General Meeting
continued

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 the Company’s 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 the Company’s 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 Report and Accounts 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 auditor 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.

Nominated person
17.

If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights
(“Nominated Person”), you may have a right under an agreement between you and the member of the Company who has
nominated you to have information rights (“Relevant Member”) to be appointed or to have someone else appointed as a proxy for
the Meeting. If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right
under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of
voting rights. Your main point of contact in terms of your investment in the Company remains the Relevant Member (or, perhaps,
your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries
relating to your personal details and your interest in the Company (including any administrative matters). The only exception to
this is where the Company expressly requests a response from you.

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Form
of proxy

Walker Crips Group
Financial statements

For use at the Annual General Meeting (“the Meeting”) of Walker Crips Group plc (“the Company”) to be held at Old Change House,
128 Queen Victoria Street, London EC4V 4BJ on 4 September 2019 at 11.00 a.m. and at any adjournment thereof.

I/We (name(s) in full). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (BLOCK LETTERS PLEASE)

Of (address) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being (a) holder(s) of shares in the above-named Company HEREBY APPOINT (see Note 3):

(name(s) in full) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (BLOCK LETTERS PLEASE)

Of (address) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 (see Note 4). . . . . . . . . . .

Please also mark this box if you are appointing more than one proxy (see Note 5). . . . . . . . . . . . . . . . . . . . .

The manner in which the proxy is to vote should be indicated by inserting ‘X’ in the box provided:

For

Against

Vote withheld

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

To approve the Directors’ remuneration report

To declare a final dividend of 0.33 pence per Ordinary Share

To re-elect David Gelber as a Director

To re-elect Martin Wright as a Director

To re-elect Hua Min Lim as a Director

To re-appoint BDO LLP as auditor

To authorise the Directors to set the remuneration of the auditor

To authorise the Directors to allot shares

10) To disapply pre-emption rights 1

11) To authorise the Company to make market purchases of its own shares 1

12) To authorise the Company to call a general meeting of shareholders on not less

than fourteen clear days’ notice 1

1 Special resolution.

Signed: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dated: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(for a company see Note 8 to this form of proxy)

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Form
of proxy | notes

Notes:
1.

As a member of the Company you are entitled to appoint a proxy or proxies 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 and vote, 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, Steelpark Road, Halesowen B62 8HD; and
received by Neville Registrars Limited no later than 11.00 a.m. on 2 September 2019.

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.

10. 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, Steelpark Road, Halesowen B62 8HD, CREST ID (7RA11)
by 11.00 a.m. on 2 September 2019. See the notes to the notice of meeting for further information on proxy appointment
through CREST.

11. 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).

12. 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.

13. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting.

14. 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.

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Officers
and professional advisers

Walker Crips Group
Financial statements

Directors
Executive Directors
S. K. W. Lam FCPA (Aust.), Chartered FCSI – Chief Executive Officer
R. A. FitzGerald FCA – Group Finance Director

Non-Executive Directors
D. M. Gelber – Chairman
H. M. Lim
M. J. Wright – Senior Independent Director
C. Bouch FCA – Audit Committee Chairman

Secretary
R. Goddard

Registered office
Old Change House
128 Queen Victoria Street
London EC4V 4BJ

Bankers
HSBC Bank plc
London

Solicitors
Charles Russell Speechlys LLP
London

Auditor
BDO LLP
London

Registrars
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen B62 8HD

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Walker Crips Group plc
Old Change House,
128 Queen Victoria Street,
London
EC4V 4BJ
020 3100 8000
www.walkercrips.com
client.services@wcgplc.co.uk

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