WH Ireland Group plc
Annual report and accounts 2013
Our key points at a glance
Operational summary
●
In the Private Wealth Management Division, funds under management and administration
rose by 43% to £2.5 billion
●
●
●
●
Acquisition of the former Seymour Pierce client list in February 2013
Continued growth in the number of Corporate Broking clients
Corporate Broking client fund raisings of £102 million
Isle of Man investment licence granted
Financial summary
● Group turnover increased by 18.2% to £29.7m (2012: £25.1m)
●
●
●
●
Full year profit before tax £1.7m (2012: loss before tax £0.2m)
Basic earnings per share of 4.80p (2012: (0.89p) )
Recurring revenue increased by 32% to £8.9m (2012: £6.8m)
Proposed final dividend of 1.5p (2012: 0.5p)
WH Ireland Group plc annual report and accounts 2013
Contents
1
2
3
6
7
8
11
12
16
17
18
19
20
21
22
23
Chairman’s statement
Chief Executive Officer’s report
Strategic report
Board of directors
Advisers
Directors’ report
Corporate governance
Remuneration report
Statement of directors’ responsibilities
Independent auditors’ report
Consolidated statement of comprehensive income
Consolidated and Company statement of financial position
Consolidated and Company statement of cash flows
Consolidated statement of changes in equity
Company statement of changes in equity
Notes to the financial statements
WH Ireland Group plc annual report and accounts 2013
Chairman’s statement
The Board is pleased to be able to report that WH Ireland continued the progress reported at the half year which
resulted in a strong financial performance for the year as a whole. Both the Corporate Broking and Private Wealth
Management divisions have contributed to pre-tax profits of £1.7 million on revenue of £29.7 million. This
encouraging result has enabled the Board to recommend payment of a 1.5 pence dividend, subject to shareholder
approval. Our stated intention has been to pay a progressive dividend and we believe this payment represents a
prudent but fair distribution reflecting the progress made and our confidence in the Group’s future prospects.
Divisional review
The Corporate Broking division has built upon the investment made in key personnel in recent years. The strength
and depth of the team and the progress that has continued to be demonstrated during this past year has helped
cement the company as one of the leading advisers, brokers and market makers in AIM and small cap companies.
With a better domestic economic backdrop the conditions for growth within this division are the best that they have
been for some time. It is clear that for the UK economy to flourish long term, it is important that funding is available for
smaller companies with entrepreneurial flair. We will be fundraising for a third EIS fund in 2014/15, which further
supports our comprehensive service offering for any company listed on AIM. We have also strengthened our
Australian market making and broking product which we believe will position us well to grow our business with dual
listed companies.
The Private Wealth Management division has grown considerably during the past year, helped by the acquisition of
the assets of the former Seymour Pierce private client business. Over £300 million of assets were transferred which
has helped boost our assets under management and administration to nearly £2.5 billion. There remains much work
to be done in this division in regard to profitability, service development and managing regulatory change, but we are
now beginning to see the benefits of improvements initiated during the second half of last year. We remain confident
in our continued ability to grow this division both organically and via acquisitive opportunities in the future and we have
today announced the granting of our investment licence in the Isle of Man by the FSC. The investment we have made
in opening the office and the staffing with investment professionals reflects both the strategic importance we place on
having an offshore offering and also the longer term opportunities we see for the Company.
Board and Staff
There were a number of Board changes during the year. Richard Killingbeck, having joined the Group in September
2012 as Head of Private Wealth Management, and being appointed an Executive Director on 1 December 2012,
became Chief Executive on 14 January 2013. This followed the departure of Paul Compton, the previous Chief
Executive in December 2012. Richard has brought over 25 years of investment management and private banking
experience to the role and is already making a significant impact. As reported in January 2014 following the year end,
a settlement with Mr Compton was subsequently reached in regard to all of his claims against the Group. WH Ireland
wishes Paul Compton well for the future.
Also during the year, John Scott retired from the Board, but continues to be employed by the Group as an investment
manager looking after a portfolio of clients. The Board thanks John for his contribution to the Group. Thanks are also
in order to all our staff who have worked very hard to improve both the fortunes and prospects of WH Ireland.
Outlook
For the first time since the financial crisis, the Group is now operating in more benign markets. However, the
environment remains highly competitive and subject to much change, with the expectation of continuing ‘regulatory
tinkering’ and further consolidation in the sectors we operate in. The Board is also mindful that the costs of operating
a smaller regulated entity continue to increase; as a result we continue to focus our efforts to reduce our cost to
income ratio.
The current year has started well and I am pleased to report that the number of corporate clients that we now advise
has risen from the year end total of 85 to 87. This growing client base is driving a good pipeline of corporate
transactions in more supportive markets for fund raising. Our assets under management and administration have
continued to grow boosted by stronger markets. We are also seeing some interesting opportunities to expand the
reach of our Private Client business through new office openings such as in the Isle of Man and through recruitment.
We continue to seek high calibre individuals to join the Board who can help us achieve our ambition of becoming one
of the leading independent financial service companies. We hope to be in a position shortly to announce such an
appointment. Overall, we are focusing on delivering our strategic plan to develop further both the Corporate Broking
and the Private Wealth Management divisions and thereby deliver strong shareholder returns. We look forward to the
year ahead with confidence.
Rupert Lowe
Chairman
WH Ireland Group plc annual report and accounts 2013
1
Chief Executive Officer’s report
Overview
The year under review has been challenging yet rewarding, with tangible signs of progress. The financial results have
begun to demonstrate the potential that is emerging from both the Corporate Broking and Private Wealth Management
divisions. Total revenue increased by 18.2% to £29.7m and profit before tax increased from a loss of £0.2m to a
£1.7m profit. Our balance sheet has continued to strengthen and includes, following the recent freehold property
revaluation, net unencumbered property of £3.2m.
One of the key challenges during 2013 has been to build out a small but focused management structure in both
divisions. This has been achieved by primarily promoting from within, and this greater structural focus is beginning to
bring benefits in the discipline and day to day management of the business. Whilst not a direct contribution to revenue,
this new structure is part of a wider focus across the Company to mitigate risk and to improve our cost management.
Corporate Broking
The Corporate Broking division has performed well. It is ranked third for the number of AIM clients that it is either
broker or advisor (NOMAD) to, giving it critical mass and credibility in this very competitive market. Growth has been
witnessed across all key areas of the division. At year end the number of Corporate clients stood at 85 compared to
83 last year helping to boost retained income by 32% to £2.9m; success fees rose by 16% to £4.1m following fund
raisings of £102m and merger & acquisition activity totalling £138m; and trading revenue, primarily Market Making
which rose by 15% to £1.4m as a result of both an increase in volume and the number of corporate stocks that we
make markets in; secondary commissions also rose as our penetration of key institutional accounts increased.
The breadth of our offering beyond institutional broking is a key WH Ireland differentiator. Our retail focused marketing
to regional private client brokers and our WHISpy publication have been highly valued by clients and will help us to
continue to build our business in 2014.
Private Wealth Management
The Private Wealth Management division saw an increase in all key financial metrics, reflecting both greater
confidence and activity from amongst existing clients, and also a nine month contribution from the acquisition of the
private client business of Seymour Pierce which was completed in February 2013. This acquisition has proven to be
most successful, with over £300m of client assets transferring and very few client losses. Including these funds, total
funds under management and administration rose by 43% to £2.5bn at year end. The Private Wealth Management
division has witnessed considerable regulatory changes during the year as the Retail Distribution Review celebrated
its first anniversary. Further changes can be expected during the year ahead, which in turn will continue to present
both challenges and opportunities. We are actively seeking to take advantage of these opportunities as they present
themselves.
The Future
The Corporate Broking and Private Wealth Management divisions are at different stages of growth and development;
the Corporate Broking division is focused upon delivering its ambition to be recognised as the leading smaller
company corporate advisor and broker. As the third largest NOMAD by number of clients, it is well on its way to
achieving this goal. As the reputation of this division has grown we are witnessing a number of high quality potential
recruits seeking to join us and selective recruitment during 2014 is expected to be a key feature of growing this
division.
The Private Wealth Management division is beginning to establish itself as a leading full service Private Client Wealth
manager where client focus and service are recognised as key drivers of growth. A business review of non-core
activities currently being undertaken in this division will result in a more focused offering, the benefits of which should
begin to be evidenced in the second half of this year. We continue to be active in seeking to recruit or acquire
individuals or teams with books of business to help us achieve our growth goals.
In my first report last year I referenced as one of the key metrics that I was focused upon was that of recurring
revenue. In the year to November 2012 recurring revenue accounted for 27% of total Group revenue; in the year to
November 2013 the figure was 30% on a higher revenue base. This is a pleasing progression but there is still work to
be done to achieve our target of at least half of our total revenue being classified as recurring.
Richard Killingbeck
Chief Executive Officer
WH Ireland Group plc annual report and accounts 2013
2
Strategic report
Overview
The WH Ireland Group has one principal operating subsidiary, WH Ireland Limited. During the year under review this
company has consisted of two trading divisions; Private Wealth Management which provides full stockbroking services
and independent financial advisory services to retail clients, and Corporate Broking which comprises corporate finance
and broking services to small and mid-cap companies, and stockbroking and research services to Institutional clients.
Although the Group’s income is predominantly derived from activities conducted in the UK, a number of retail,
institutional and corporate clients are situated worldwide.
During the course of the year under review, WH Ireland Limited acquired the majority of the retail client bank and a
team of investment managers of Tenebris Realisations Limited (in administration) (formerly Seymour Pierce Limited
(in administration)). The integration of this business into the Group was completed in the year adding over £300m of
client assets under management into the Group’s nominee control.
At the year end, the Group had 239 staff (2012: 237) in the United Kingdom.
Strategy
The Group’s strategic focus remains on continuing to grow our business across the two divisions, and in so doing
become the broker of choice in the small and mid-cap company space and a leading wealth management service
provider to retail clients.
This strategy will enable us to increase our assets under management and our corporate retainer income levels, and
support our clients, both corporate and retail, in meeting their financial needs within an increasingly complex
marketplace. Our shareholders will also benefit from this strategy through increased returns being delivered in a
sustainable manner.
Key Performance Indicators (KPIs)
The Group uses a number of KPIs to monitor its performance against its financial objectives:
1. Ratio of profit / (loss) before tax to total revenue
30 November 2013
%
30 November 2012
%
Ratio of profit / (loss) before tax to revenue
5.57
(0.70)
This is an indication of our profit margin on all business areas and highlights an improving financial performance.
2. Funds under management and administration
30 November 2013
£m
30 November 2012
£m
Discretionary and advisory funds under
management
Assets under nominee control
Wealth Planning advisory assets
Assets under administration for third party
clients
Total
This is used as a measure of the potential for revenue generation by type of client assets held in our nominee control.
It represents a 43.11% increase for the year in respect of funds under management and administration, which
includes the client assets transferred from Tenebris Realisations into our nominee control.
1,198
891
239
886
464
262
123
1,735
155
2,483
3. Recurring income streams
30 November 2013
£m
30 November 2012
£m
Value of Group recurring income
This key indicator of business activity includes fee and other ongoing income from retail and corporate clients for the
management of their relationship with the Group. This represents an increase of 31.56%, largely influenced by an
increase in the number of clients in our Corporate Broking division and an increase in our Private Wealth Management
division of the number of clients and value of their assets who pay a fee for our services.
6.78
8.92
WH Ireland Group plc annual report and accounts 2013
3
Strategic report
Key Performance Indicators (KPIs) continued
4. Corporate Broking performance
Number of transactions
Money raised
30 November 2013
30 November 2012
21
£102m
25
£116m
Retained quoted clients
During the year, we have continued to grow the number of retained quoted clients and despite the difficult market
conditions, have finished the year extremely strongly.
83
85
Results for the financial year
A summary of the income statement for the financial year is set out below:
Revenue
Administrative expenses
Operating profit
Other income and charges
30 November 2013
£’000
29,653
(28,734)
919
733
30 November 2012
£’000
25,079
(24,989)
90
(267)
Profit/(Loss) before taxation
Taxation
Profit/(Loss) after taxation
Revenue increased by 18.2%, with increases across all divisions but notably in Corporate Broking (see note 5).
1,652
(516)
1,136
(177)
(33)
(210)
Future Outlook
The Board is pleased with the recent progress made in moving the Group towards our strategic goals. We will
continue to look to grow the Group through acquisitions and organically, in order to ensure we are well positioned to
meet the needs of our client base in the short, medium and long term.
Dividend
The Board is pleased to announce the Company’s intention to pay a final dividend of 1.5p per share at a cost of
approximately £356k. Subject to shareholder approval at the upcoming Annual General Meeting, the dividend will be
paid on or before 11 April 2014 to those shareholders on the register at the close of business on 07 March 2014. The
ex-dividend date will be 05 March 2014.
Balance Sheet and Capital Structure
Maintaining a strong and liquid balance sheet remains a key business objective for the Board, alongside its regulatory
obligations in this regard. Net assets amounted to £13.1m (2012: £12.3m) and net current assets to £7.8m (2012:
£6.1m). The balance sheet is underpinned by the holding of our administrative office building in the centre of
Manchester and by the cash balances which are used to facilitate the business growth plans.
Risks and Uncertainties
Risk to the business is consistently reviewed and monitored by the Board and senior management. The Group,
through the operation of a formal Risk Committee within WH Ireland Limited, consider risk management issues and
advise the Group Board appropriately on these matters. This enables the Group to foster a culture to highlight the
benefits of a risk-based approach to internal control and management of the Group. The Group also maintains an
Internal Audit Department that reports directly to the Group’s Audit Committee.
There are a number of potential risks to the business which the Group monitors through its risk management
framework and evaluates through its regulatory reporting assessment processes.
Financial Risk
Whilst a significant element of the Group’s income continues to be linked to transaction volumes, the Group’s focus,
as evidenced above, remains on increasing the recurring income element of the fees obtained from clients, as this
enables both our clients and the firm to more easily manage expectations. The Group also continues to seek to build
WH Ireland Group plc annual report and accounts 2013
4
Strategic report
its fee based discretionary and managed-advisory service offering to reduce the proportion of its income that is linked
to transaction volumes. The acquisition of the client bank from Tenebris Realisations Limited has further improved this
position.
Whilst the Group has a predominantly fixed cost base which potentially could require time to adjust, the Group has
continued to increase the proportion of variable cost to total costs in order to limit the impact of any further market
downturn on the profitability of the Group and to maximise the flexibility and responsiveness of the Group.
To mitigate risk in these areas during the year, the Directors have continued to ensure that the balance sheet remains
strong and suitably liquid, and that sufficient regulatory capital is retained to provide a healthy surplus over regulatory
capital requirements. The Group monitors its regulatory capital requirements on a daily basis.
Operational Risk
Operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people and
systems, or from external events.
Business continuity risk is the risk that serious damage or disruption may be caused to the business as a result of a
breakdown, from either internal or external sources, in the infrastructure of the Group. This risk is mitigated by the
number of branches across the UK from which the Group operates, and the Group having its own business continuity
and disaster recovery arrangements, which includes business interruption insurance cover.
The Group seeks to ensure that its risk management and control environment is continuously challenging the status
quo in order to seek to maintain and develop its systems and controls which are designed to minimise the Group’s
exposure to operational risk, including acts of fraud and computer crime. Operational risks are additionally mitigated
by the existence of appropriate insurance cover.
Credit Risk
The Board takes active steps to minimise the possibility of credit losses. This includes formal credit management
procedures and the close supervision of credit limits and exposures. Formal credit procedures include the approval of
significant client limits, approval of material trades, collateral requirements for trading clients and proactive
management of overdue accounts. There are formal rules around traded option business including management of
margin. Additionally, risk assessments are performed on an ongoing basis during the year on all banks and
custodians.
Regulatory Risk
The Group operates in a regulated environment. The Group has independent and well resourced Compliance and
Internal Audit departments. The Directors monitor changes and developments in the regulatory environment and
ensure that sufficient resources are made available for the Group to implement any required changes. The impact of
the regulatory environment on the Group’s management of its capital is discussed in note 26 of the financial
statements.
Resources and Relationships
The Group’s most vital resource remains its staff and the Group remains committed to retaining and recruiting quality
staff that share our culture and vision. Staff at all levels of the business are heavily focused on delivering a quality
service to our clients. The Board continues to strive to deliver a service throughout the Group which is in compliance
with both the letter and the spirit of the principles of the Financial Conduct Authority.
The Board collates management information to assist in monitoring its non-financial objectives, which include items
such as risk appetite monitoring, staff turnover and client complaint data.
Alan Kershaw
Finance & Operations Director
WH Ireland Group plc annual report and accounts 2013
5
Board of directors
Rupert Lowe
Non-executive Chairman
Rupert worked for Phillips and Drew between 1981
and 1988, serving on the LIFFE Board between 1985
and 1988. He was a member of the Committee which
created the FTSE 100 Index before joining Baring
Securities in 1988, where he worked in Japanese
derivatives. He worked for Morgan Grenfell from 1990
to 1996, and was Chairman of Southampton Leisure
Holdings Plc between 1996 and 2006. He was
previously Chairman of the Prince’s Trust (South East)
and is currently a director of Appleclaim Insurance
Holdings Limited (Lloyds Insurance) following the sale
of Jubilee Group Holdings Limited to Ryan Specialty
Group. He is also a director of a number of family
related construction businesses specialising
in
Mechanical, Electrical and Data installation, and also
Non Executive Chairman of Torus UK and Non
Executive Director of Torus Managing Agency Limited.
joined
the Group
Alan Kershaw
Finance and Operations Director
Alan
from JP Morgan Asset
Management in January 2010 as Operations Director
and took over the Finance Directorate later that year.
He qualified as a Chartered Accountant with PwC, and
has spent the last 20 years working in a variety of
executive management roles across the financial
services industry.
Richard Killingbeck
Chief Executive Officer
Richard joined the Group in September 2012 bringing
with him over 25 years of investment management and
private banking experience. Richard was appointed to
the Board in December 2012, and was appointed to
the role of Chief Executive Officer in January 2013.
During the past 25 years he has held senior fund
management positions in the management of both
institutional and private client accounts. In 2001, whilst
at Singer and Friedlander Investment Management, he
was appointed the CEO of the business, a position he
held until 2005. He then undertook a number of senior
management
roles at Close Brothers Asset
Management and then more recently at Credit Suisse
Private Bank.
Richard is also Chairman of Bankers Investment Trust
PLC and sits on a number of charity investment
committees.
Roger Lane-Smith
Non-Executive Director
Roger was Senior Partner and Chairman of DLA Piper
UK from 1998 to 2005 and was appointed a Senior
Consultant to the practice in May 2005. He is a Non-
executive Director of MS International, Dolphin Capital
Investors, Timpsons and a number of other
non-quoted companies.
Richard Lee
Non-Executive Director
Richard is a strategy consultant with wide business
experience. In his early career he worked in two
stockbroking firms in the research and corporate
finance departments. He has been Chairman or Non
Executive Director of eleven quoted companies and a
number of private companies in Banking, Finance,
Invoice Factoring, Recruitment Packaging, Healthcare
and a broad range of industrial areas. He was
previously a member of the Investment committee of
the Lazard North West Unit Trust. Prior to becoming a
Non-Executive Director he was Chairman of WH
Ireland Limited.
WH Ireland Group plc annual report and accounts 2013
6
Advisers
Nominated Adviser and broker
Panmure Gordon
One New Change
London, EC4M 9AF
Auditors
BDO LLP
55 Baker Street
London, W1U 7EU
Company Secretary
Dan Bate
Registered Office
24 Martin Lane
London, EC4R 0DR
Birmingham Office
37A Waterloo Street
Birmingham, B2 5TJ
Cardiff Office
St Andrew's House
24 St. Andrews Crescent
Cardiff, CF10 3DD
Poole Office
11 Ravine Road
Canford Cliffs
Poole, BH13 7HS
Bankers
Bank of Scotland
2nd Floor,1 Lochrin Square
92-98 Fountainbridge
Edinburgh, EH3 9QA
Solicitors
DWF LLP
1 Scott Place, 2 Hardman Street
Manchester, M3 3AA
Company number
3870190
Administrative Office
11 St James’s Square
Manchester, M2 6WH
Bristol Office
4 Colston Avenue
Bristol, BS1 4ST
Leeds Office
Royal House
28 Sovereign Street
Leeds, LS1 4BJ
WH Ireland Group plc annual report and accounts 2013
7
Directors’ report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Independent Auditors’ Report, for the year ended 30 November 2013.
Principal activities
The principal activity of the Company during the year was that of a holding company.
The principal activities of the Group during the year were the provision of stockbroking, wealth management and
corporate finance advice, research, products and services to the private client and smaller company market.
Strategic report
A review of the strategy of the Group can be found in the Strategic Report on pages 3 to 5.
Going concern
The financial statements of the Group have been prepared on a going concern basis. In making this assessment, the
Directors have prepared detailed financial forecasts for the period to November 2016 which consider the funding and
capital position of the Group. Those forecasts make assumptions in respect of future trading conditions, notably the
economic environment and its impact on the Group’s revenues and costs. In addition to this, the nature of the Group’s
business is such that there can be considerable variation in the timing of cash inflows. The forecasts take into
account foreseeable downside risks, based on the information that is available to the Directors at the time of the
approval of these financial statements.
Certain activities of the Group are regulated by the Financial Conduct Authority (FCA) which is the statutory regulator
for financial services business in the UK and has responsibility for policy, monitoring and discipline for the financial
services industry. The FCA requires the Group’s capital resources to be adequate; that is sufficient in terms of
quantity, quality and availability, in relation to its regulated activities. The Directors monitor the Group’s regulatory
capital resources on a daily basis and they have developed appropriate scenario tests and corrective management
plans which they are prepared to implement to address any potential deficit as required. These actions may include
cost reductions, regulatory capital optimisation programmes or further capital raising. The Directors consider that,
taking account of foreseeable downside risks, regulatory capital requirements will continue to be met.
The Directors have renewed the Group’s banking facilities, confirming that these will be available until 28 February
2015.
Financial instruments and risk management
Details of risks and risk management arising from the Group’s financial instruments are set out in note 25 of the
financial statements.
Dividends
A dividend of 0.5p per share was paid in the year, and the Directors have proposed a final dividend of 1.5p per share
for 2013 (note 10).
Directors
The Directors who held office during the year and their interest in the shares of the Company were as follows:
RJG Lowe*
RW Killingbeck (Appointed 1 December 2012)
(Resigned 16 December 2012)
CP Compton
JM Scott
(Resigned 22 May 2013)
AM Kershaw
R Lane-Smith*
REM Lee
At
30 November
2013
1,064,856
870,000
-
-
40,000
26,038
20,267
At
30 November
2012
1,064,856
725,000
1,190,348
124,575
20,000
26,038
20,267
Richard Killingbeck was appointed to the Board on 1 December 2012 and John Scott retired from the Board on 22
May 2013. Paul Compton left the Group with effect from 16 December 2012.
Further details of Directors’ service contracts, remuneration and share interests and Directors’ interests in options over
the Company’s shares can be found in the Remuneration Report on pages 12 to 15.
None of the Directors who held office at the end of the financial year had any disclosable interest in the shares of
other Group companies.
WH Ireland Group plc annual report and accounts 2013
8
Directors’ report
Major shareholdings
At 17 February 2014, the last practicable date prior to the publication of this report, the Company had been notified of
the following shareholdings (other than those of the Directors) of 3% or more of the share capital:
Oceanwood Capital Management LLP
Lord J Marland*
Barclayshare Nominees Limited
JP Morgan Securities**
D Ross*
T Agnew*
Apollo Nominees Limited**
H Ansell
Ordinary shares
2,261,079
1,934,359
1,151,155
1,124,031
1,000,000
891,142
822,343
715,000
%
9.54
8.16
4.86
4.74
4.22
3.76
3.47
3.02
* Denotes members of a group of shareholders who are deemed to be a concert party under the Takeover Code and whose total combined
shareholding in the Company is 5,786,395. This represents 24.41% of the voting rights in the Company.
** These 1,946,374 shares are believed to be subject to a contract for difference arrangement giving Polygon Global Partners LLP an interest in
these shares.
In addition, the Company's Employee Share Ownership Trust which is operated by Sanne Trust Company Limited
holds 2,128,000 shares as trustees. All rights to vote in respect of these shares have been waived
Policy and practice on payment of creditors
During the year no specific standard or code was followed with respect to the payment of suppliers but the Company
and Group’s policy for the payment of suppliers was as follows:
• payment terms were agreed at the start of the relationship with the supplier and were only changed by
•
agreement;
standard payment terms to suppliers of goods and services were within 30 days from receipt of a correct
invoice for satisfactory goods or services which had been ordered and received unless other terms were
agreed in a contract;
• payments were made in accordance with the agreed terms or in accordance with the law if no agreement had
•
been made; and
suppliers were advised when an invoice was contested without delay and any disputes were settled as quickly
as possible.
This will also be the policy for the forthcoming year.
The Company does not have significant trade creditors in the conventional sense, however at the year end for the
Group there were 26.06 days’ purchases (2012: 35.27 days) in creditors relating to operational expenses.
Environmental matters
The Group recognises its impact on the environment and takes steps to reduce it. Although the Group’s activities
have only a comparatively small impact, the Directors are aware that environmental risks and uncertainties impact to
some extent on all companies and affect investment decisions made.
Political and charitable contributions
The Company did not make any political or charitable donations or incur any political expenditure during the year.
Within the rest of the Group, WH Ireland Limited made charitable donations of £1,190 (2012: £250), but made no
political donations or incurred any political expenditure.
WH Ireland Group plc annual report and accounts 2013
9
Directors’ report
Employees
Our employees are vital to the continued success of the Group. The Group and our employees are committed to
delivering a quality service which meets our own expectations, those of the FCA and those of our clients wherever
possible.
Employees are kept informed of and consulted regularly on key issues affecting them and the Group by the intranet
and through regular communication between management and staff.
The Company policy is to give full and fair consideration to all disabled people who apply for employment, seeks to
develop the skills and potential of disabled people, affords them access to training and promotion opportunities and
makes every effort to retain in suitable employment those staff who have the misfortune of becoming disabled whilst in
the employment of the Group.
Employees are encouraged to be involved in the Group’s performance through participation in a Save as You Earn
(SAYE) Scheme and by invitation to either the Unapproved Executive Share Option Plan (ESOP) or the Approved
Company Share Option Plan (CSOP). In addition, the WH Ireland Group plc Employee Share Ownership Trust
(ESOT), which is an Employee Benefit Trust, exists to facilitate the acquisition of shares by employees.
Purchase of own Shares
At 30 November 2013 2,128,000 shares were held in trust by the ESOT under Joint Ownership Arrangements.
Further details are in note 29 of the Financial Statements.
Share Capital Reduction
During the previous financial year, the Company was granted a Court Order approving a Capital Reduction, which
became effective on 29 November 2012. This reduction created distributable reserves by cancelling the amount
standing to the credit of the Company’s share premium account.
Annual General Meeting (AGM)
The resolutions being proposed at the AGM include usual resolutions dealing with the ordinary business of the AGM
together with certain additional special business. A description of the resolutions relating to the special business is set
out at the end of the Notice of AGM.
Auditors
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the Company’s auditors are unaware; and each Director has
taken all the steps that he ought to have taken as a Director to make himself aware of any relevant audit information
and to establish that the Company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the
Companies Act 2006.
In accordance with the Companies Act 2006, a resolution for the re-appointment of BDO LLP as auditors of the
Company is to be proposed at the forthcoming AGM.
By order of the Board
Dan Bate
Company Secretary
24 Martin Lane
London EC4R 0DR
25 February 2014
WH Ireland Group plc annual report and accounts 2013
10
Corporate governance
The Board has given consideration to the UK Corporate Governance Code (the Code) issued from time to time by the
Financial Reporting Council (FRC).
Although companies traded on AIM are not required to provide corporate governance disclosure, or follow guidelines
in its Code, the Directors have chosen to provide certain information on how the Company has adopted various
principles of the Code.
The Board and its committees
At the date of this report the Group Board consists of two Executive and three Non-executive Directors. The Board is
responsible for the overall direction and strategy of the Group and meets regularly throughout the year. Under the
Company’s Articles of Association at every AGM, any directors:
• who have been appointed by the directors since the last AGM; or
• who were not appointed or reappointed at one of the preceding two AGMs,
must retire from office and may offer themselves for reappointment by the members.
The Board has formally established a number of committees and agreed their terms of reference, these committees
are as follows:
Remuneration Committee
The principal function of this committee is to determine the policy on Executive appointments and remuneration. The
committee consists of the three Non-executive Directors with Rupert Lowe as Chairman. It is the aim of the
committee to attract, retain and motivate high calibre individuals with a competitive remuneration package.
Remuneration for Executives normally comprises basic salary, bonus, benefits in kind and options. Details of the
current Directors’ remuneration are given in the Remuneration Report.
Other Executive Directors may be invited to attend the meetings.
Audit Committee
The committee is made up of the three Non-executive Directors with Richard Lee as Chairman. It is responsible for
reviewing the Company’s arrangements with its external and internal auditors, including the cost effectiveness of the
audit and the independence and objectivity of the auditors. It also reviews the application and appropriateness of the
Company’s accounting policies, including any changes to financial reporting requirements brought about by both
external and internal requirements and it gives consideration to all major financial announcements made by the
Company including its interim and preliminary announcements and annual report and accounts.
The external auditors, internal auditors and other Executive Directors may be invited to attend the meetings.
Internal control
The Board has overall responsibility for the framework of internal control established by the Group and places
considerable importance on maintaining a strong control environment. This framework of internal control is designed
to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and
not absolute assurance against material misstatement or loss.
Detailed internal control procedures exist throughout the Group’s operations and compliance is monitored by
management and through the Group’s Compliance Department, Internal Audit Department, Risk Management
functions and the Risk Committee of WH Ireland Limited.
WH Ireland Group plc annual report and accounts 2013
11
Remuneration report
The Directors present the Directors’ Remuneration Report (the “Remuneration Report”) for the financial year ended
30 November 2013.
Composition and role of the Remuneration Committee
As detailed within the Corporate Governance report, the Board has established a Remuneration Committee which
currently consists of the three Non-executive Directors, chaired by Rupert Lowe.
The committee determines and agrees with the Board the framework and policy of Executive remuneration and the
associated costs to the Group and is responsible for the implementation of that policy. The committee determines the
specific remuneration packages for each of the Executive Directors and no Director or Senior Executive is involved in
any decisions as to his own remuneration. The committee has access to information and advice provided by the Chief
Executive Officer and the Finance & Operations Director and has access to independent advice where it considers
it appropriate.
This report explains how the Group has applied its policy on remuneration paid to Executive Directors.
Framework and policy on Executive Directors’ remuneration
The Group’s remuneration policy is designed to provide competitive rewards for its Executive Directors and other
Senior Executives, taking into account the performance of the Group and the individual Executives, together with
comparisons to pay conditions throughout the markets in which the Group operates. It is the aim of the committee to
attract, retain and motivate high calibre individuals with a competitive remuneration package. It is common practice in
the industry for total remuneration to be significantly influenced by bonuses.
The remuneration packages are constructed to provide a balance between fixed and variable rewards. Therefore
remuneration packages for Executive Directors and Senior Executives normally include basic salary, discretionary
bonuses, benefits in kind and options. In agreeing the level of basic salaries and annual bonuses the committee takes
into consideration the total remuneration that Executives could receive.
Basic salary
Basic salaries are reviewed on an annual basis or following a significant change in responsibilities. The committee
seeks to establish a basic salary for each Executive determined by individual responsibilities and performance, taking
into account comparable salaries for similar positions in companies of a similar size in the same market.
Incentive arrangements
1) Discretionary bonuses
These are designed to reflect the Group’s performance, taking into account the performance of its peers, the market in
which the Group operates and the Executive’s contribution to that performance.
2) Performance related contractual incentive scheme
These are designed to reward performance by employees across the Group.
3) Share options
As referred to in the Directors’ Report, the Group now has four different share ownership plans; the ESOT, ESOP,
CSOP and SAYE scheme.
ESOT
The WH Ireland Group plc Employee Share Ownership Trust (ESOT) was established on 19 October 2011, for the
purpose of holding and distributing shares in the Company for the benefit of the employees. All costs of the ESOT are
borne by the Company or its subsidiary WH Ireland Limited. 2,128,000 shares have been issued by the Company to
the ESOT. Joint ownership arrangements have been put in place in relation to certain of these shares between the
trustees of the ESOT and a number of employees including some directors. The shares carry dividend and voting
rights, although these are normally waived by all parties to such arrangements. The joint ownership arrangements
create options for the employees to acquire the interest that the trustees of the ESOT has in the jointly owned shares,
which lapses when an employee is deemed to be a Bad Leaver. If an employee ceases to be an employee of the
Group, otherwise than in the event of critical illness or death, the employee is deemed to be a Bad Leaver.
ESOP
Under the terms of the ESOP, options over the Company’s shares may be issued on a discretionary basis to
Executives within the Group at not less than the prevailing market price. The maximum aggregate subscription price
of all options issued to an Executive in any ten year period may not exceed four times the annual remuneration of that
Executive. In addition options may not be granted in total in excess of 20% of the share capital of the Company (of all
classes) in issue at that time and no individual may have options representing more than 5% of the share capital of the
Company (of all classes) in issue at the time. These rules can be overridden by the Remuneration Committee if
considered appropriate.
WH Ireland Group plc annual report and accounts 2013
12
Remuneration report
3) Share options continued
CSOP
Under the terms of the CSOP, options over the Company’s shares may be granted on a discretionary basis to
employees of the Group (including directors who are required to devote at least 25 hours per week to their duties, but
excluding any employee who has more than a 25% interest in the Company’s ordinary share capital or assets at the
time of grant or has done so in the twelve months prior to grant) at a price which is not less than the market value of
the shares at the date of grant. Performance conditions may be imposed in respect of options at the discretion of the
Board. The maximum aggregate exercise price for all unexercised CSOP options (granted under the CSOP or any
other CSOP operated by the Group) held by an individual at any one time must not exceed £30,000. In addition,
options may not be granted if such grant would result in the total number of shares which have been issued or
transferred out of treasury in satisfaction of options granted under any share plan operated by the Group in the ten
year period ending with the proposed grant date, plus the number of shares which remain capable of issue or transfer
out of treasury under existing options granted, to exceed 10% of the Company’s issued share capital. Any options
granted to or held under the ESOT are not taken into consideration for the purposes of this limit.
In the event of an option holder ceasing to be an employee of the Group, options granted under the CSOP shall lapse
(a) on the first anniversary of an option holder’s death, (b) on the expiry of 6 months from the date on which an option
holder ceases to be an employee of the Group due to injury, disability, retirement or redundancy or (c) immediately on
an option holder ceasing to be an employee of the Group for any reason other than those referred to in (a) and (b),
unless, and to the extent, the Board exercises its discretion to allow the options to be exercised for a period after the
option holder ceases to be an employee of the Group.
SAYE
Under the terms of the SAYE, employees of the Group (including directors who are required to devote at least 25
hours per week to their duties but excluding any employee who has more than a 25% interest in the Company’s
ordinary share capital or assets at the time of grant or has done so in the twelve months prior to grant) may be invited
to apply for an option to be granted to them at a price which is not less than 80% of the market value of the shares at
the date of grant. Invitations issued must be extended to all eligible employees. Employees enter into a savings
contract under which they agree to save a certain amount of salary each month for a specified period with a view to
using those savings to buy shares under the terms of the option. Options may not be granted if such grant would
result in the total number of shares which have been issued or transferred out of treasury in satisfaction of options
granted under any share plan operated by the Group in the ten year period ending with the proposed grant date, plus
the number of shares which remain capable of issue or transfer out of treasury under existing options granted, to
exceed 10% of the Company’s issued share capital. Any options granted to or held under the ESOT are not taken
into consideration for the purposes of this limit.
In the event of an employee leaving before the end of the 3 years contract because of redundancy, injury, disability or
retirement, the employee will be able to continue saving privately and buy a reduced number of shares (in line with the
amount saved) within 6 months of leaving using the savings accrued. If the employee leaves before the end of the 3
years due to resignation, dismissal on grounds of misconduct or not returning after maternity leave, they would not be
able to buy any shares and would have their funds returned to them. In the event of death prior to the scheme
maturing, the deceased’s personal representative(s) would be able to buy a reduced number of shares within 12
months of the death.
Other employee benefits
Depending on the terms of their contract certain Executive Directors and Senior Executives are entitled to a range of
benefits, including contributions to individual personal pension plans, private medical insurance and life assurance.
Service contracts and notice periods
All Executive Directors are employed on rolling contracts subject to between six and twelve months’ notice from either
the Executive or the Group, given at any time. The service contracts of the current Executive Directors are available
for inspection by any person from the Human Resources department at the Group’s administrative office during
normal office hours on any day except weekends and bank holidays and at the AGM from 9am on the day of the
Meeting until the conclusion of the Meeting. Contracts of employment for Senior Executives are all on a rolling basis
subject to notice periods ranging from three to twelve months.
Service contracts do not provide explicitly for termination payments or damages but the Group may make payments in
lieu of notice. For this purpose pay in lieu of notice would consist of basic salary and other relevant emoluments for
the relevant notice period excluding any bonus.
WH Ireland Group plc annual report and accounts 2013
13
Remuneration report
External appointments undertaken by Executive Directors
In the committee’s opinion, experience of other companies’ practices and challenges is valuable for the personal
development of the Group’s Executive Directors and for the Company. It is therefore the Group’s policy to allow
Executive Directors to accept non-executive directorships at other companies, provided the time commitment does not
interfere with the Executive Directors’ responsibilities within the Group. Fees are retained by the individual Director.
Non-executive Directors
All Non-executive Directors have a remuneration agreement for an initial period of twelve months and thereafter on a
rolling basis subject to three months’ notice by either the Non-executive Director or the Group, given at any time.
In the event of termination of their appointment they are not entitled to any compensation. The terms and conditions
of appointment of Non-executive Directors are available for inspection by any person from the Human Resources
department at the Group’s administrative office during normal working hours on any day except weekends or bank
holidays and at the AGM from 9am on the day of the Meeting until the conclusion of the Meeting.
Non-executive Directors’ fees are determined by the Executive Directors having regard to the need to attract high
calibre individuals with the right experience, the time and responsibilities entailed and comparative fees paid in the
market in which the Group operates. They are not eligible for pensions.
Directors’ emoluments
The remuneration of each Director, excluding share options and awards, during the year ended 30 November 2013 is
detailed in the table below:
Executive
CP Compton
JM Scott
AM Kershaw
RW Killingbeck
Non-executive
RJG Lowe
R Lane-Smith
REM Lee
Salary
£
Benefits
£
Bonus
£
6,058
57,840
110,000
174,107
100,000
30,000
30,000
508,005
71
—
2,808 31,798
2,205
—
2,551
—
300 12,500
—
—
7,935 44,298
—
—
Compensation
Total
for year
ended
Pension
contribution
for year
for year
ended
ended
for loss 30 November 30 November 30 November 30 November
2012
2012
of office
£
£
£
Pension
Total contribution
for year
ended
2013
£
2013
£
180,500
—
—
—
—
—
—
180,500
186,629
92,446
112,205
176,658
112,800
30,000
30,000
740,738
167,515
220,894
107,467
—
100,300
28,333
29,168
653,677
—
14,000
29,000
18,333
—
—
—
61,333
—
28,000
14,167
—
—
—
—
42,167
The highest paid Directors for 2013 and 2012 were RW Killingbeck and JM Scott who received total emoluments of
£194,991 and £248,894 respectively.
WH Ireland Group plc annual report and accounts 2013
14
Remuneration report
Directors’ interests in share options
Full details of options over ordinary shares in the Company held by Executive and Non-Executive Directors at
30 November 2013 are shown below:
RW Killingbeck1
RW Killingbeck2
AM Kershaw
AM Kershaw
AM Kershaw2
REM Lee
REM Lee
Notes:
Number of
options over
ordinary
shares
1,000,000
18,292
45,000
5,147
19,565
20,000
30,000
Date of
grant of
share
option
28.10.13
31.05.13
02.11.11
23.05.12
24.11.11
17.03.04
25.05.04
Exercise
price per
ordinary
share
74.50p
49.20p
57.00p
84.50p
46.00p
75.00p
70.00p
Exercise period
28.10.16 to 27.10.23
01.06.16 to 30.11.16
02.11.14 to 02.11.21
23.05.15 to 23.05.22
01.01.15 to 30.06.15
17.03.07 to 17.03.14
25.05.07 to 25.05.14
1. These ordinary shares are held by the ESOT under a Joint Ownership Arrangement between RW Killingbeck and the Trust, under which RW
Killingbeck has the ability to exercise an option during the exercise period stated (note 28).
2. These numbers relate to the maximum number of ordinary shares over which the holders are entitled to exercise options under the Group’s
SAYE scheme, if the individuals continue to contribute at the amount defined in their savings contract.
No options were exercised by directors during the year.
During the year options over 2,128,000 ordinary shares which were held by the ESOT under a Joint Ownership
Arrangement between CP Compton and the Trust were surrendered by CP Compton. In addition, RW Killingbeck
surrendered a contractual right to be granted options over 473,787 ordinary shares.
At 29 November 2013 the market price of the Company’s shares was 85.00p. The highest daily closing price during
the year was 105.00p and the lowest daily closing price was 52.00p.
WH Ireland Group plc annual report and accounts 2013
15
Statement of directors’ responsibilities
In respect of the directors’ report and the financial statements
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 have elected to prepare the Group and Company financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union. 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 Company and of the profit or loss of the Group for that period. The Directors are also required to
prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading
securities on the Alternative Investment Market.
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 they have been prepared in accordance with IFRS as adopted by the European Union, subject
to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
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 Company's website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The
Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
WH Ireland Group plc annual report and accounts 2013
16
Independent auditors’ report
To the members of WH Ireland Group plc
We have audited the financial statements of WH Ireland Group plc for the year ended 30 November 2013 which
comprise the consolidated statement of comprehensive income, the consolidated and company statement of financial
position, the consolidated and company statement of cash flows, the consolidated and company statement of changes
in equity and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union and, as
regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act
2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the financial statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical
Standards for Auditors.
Scope of the audit of the financial statements
A description of
www.frc.org.uk/auditscopeukprivate.
the scope of an audit of
Opinion on financial statements
In our opinion:
financial statements
is provided on
the FRC’s website at
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and the Parent Company’s (the
Company) affairs as at 30 November 2013 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union;
the Company financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not
been received from branches not visited by us; or
•
•
the Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Neil Fung-On
(senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London United Kingdom
25 February 2014
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
WH Ireland Group plc annual report and accounts 2013
17
Consolidated statement of comprehensive income
For the year ended 30 November 2013
Revenue
Administrative expenses
Operating profit
Other income
Investment gains
Fair value gains/(losses) on investments
Finance income
Finance expense
Profit/(loss) before tax
Tax expense
Profit/(loss) for the year
Other comprehensive income:
Valuation gains on available for sale investments
Transferred to profit or loss on sale of investments
Tax relating to components of other
comprehensive income
Total other comprehensive income
Total comprehensive income
Profit/(loss) for the year attributable to:
Owners of the parent
Total comprehensive income attributable to:
Owners of the parent
Earnings per share for profit to the ordinary
equity holders of the parent during the period
Basic
Diluted
Note
3 & 5
6
8
8
9
11
Year ended
30 November
2013
£’000
29,653
(28,734)
919
25
458
238
64
(52)
1,652
(516)
1,136
370
(581)
48
(163)
973
1,136
973
4.80p
4.47p
Year ended
30 November
2012
£’000
25,079
(24,989)
90
16
47
(287)
13
(56)
(177)
(33)
(210)
—
(1)
6
5
(205)
(210)
(205)
(0.89)p
(0.89)p
peri od
The notes on pages 23 to 49 form part of these financial statements.
All results for the current and prior year relate to continuing operations
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the
Company Income Statement. The loss after taxation of the Company for the year was £168k (2012: Loss £530k).
WH Ireland Group plc annual report and accounts 2013
18
Consolidated and Company statement of financial position
As at 30 November 2013
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Subsidiaries
Investments
Loan receivable
Deferred tax asset
Current assets
Trade and other receivables
Other investments
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Corporation tax payable
Finance Leases < 1 Year
Borrowings
Provisions
Non-current liabilities
Borrowings
Finance Leases >1 Year
Deferred tax liability
Accruals and deferred income
Provisions
Total liabilities
Total net assets
EQUITY
Share capital
Share premium
Available-for-sale reserve
Other reserves
Retained earnings
Treasury shares
Total equity
Group
Company
As at
30 November
2013
£’000
As at
30 November
2012
£’000
As at
30 November
2013
£’000
As at
30 November
2012
£’000
Note
12
13
14
15
16
28
18
19
20
21
22
30
23
24
23
30
18
24
27
5,640
400
489
—
447
—
378
7,354
36,692
847
6,046
43,585
50,939
(34,980)
(131)
(119)
(181)
(344)
(35,755)
(1,348)
(228)
(393)
(128)
(21)
(2,118)
(37,873)
13,066
1,185
6
7
982
11,668
(782)
13,066
5,412
542
604
—
1,251
—
625
8,434
34,266
313
9,340
43,919
52,353
(37,238)
(30)
(119)
(168)
(299)
(37,854)
(1,519)
(347)
(320)
(41)
(21)
(2,248)
(40,102)
12,251
1,184
—
170
982
10,697
(782)
12,251
31
—
—
1,828
—
782
24
2,665
5,065
—
—
5,065
7,730
(191)
—
—
(179)
—
(370)
(1,348)
—
—
—
—
(1,348)
(1,718)
6,012
1,185
6
—
229
4,592
—
6,012
—
—
—
1,970
—
782
71
2,823
4,984
—
301
5,285
8,108
(83)
—
—
(168)
—
(251)
(1,519)
—
—
—
—
(1,519)
(1,770)
6,338
1,184
—
—
229
4,925
—
6,338
The notes on pages 23 to 49 are an integral part of these financial statements.
These financial statements were approved by the Board of Directors on 25 February 2014 and were signed on its
behalf by:
Rupert Lowe
Director
Richard Killingbeck
Director
WH Ireland Group plc annual report and accounts 2013
19
Consolidated and Company statement of cash flows
For the year ended 30 November 2013
Group
Company
Year ended
Year ended
Year ended
30 November 30 November 30 November 30 November
2012
£’000
2013
£’000
2013
£’000
2012
£’000
Year ended
Operating activities:
Profit/(Loss) for the year
Adjustments for:
Depreciation, amortisation and impairment
Property Revaluation
Finance income
Finance expense
Taxation
(Gains)/losses in investments
Non-cash adjustment for share option charge
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in provisions
(Increase)/decrease in current asset investments
Net cash generated from/(used in) operations
Income taxes paid
Net cash (out)/in flows from operating activities
Investing activities:
Proceeds from sale of investments
Interest received
Interest Paid: Finance Leases
Acquisition of property, plant and equipment
Acquisition of investments
Acquisition of Intangibles
Dividends paid
Redemption of loan notes
Net cash generated from/(used in) investing
activities
Financing activities:
Proceeds from issue of share capital
(Decrease)/Increase in borrowings
Decrease in finance leases
Interest paid
Net cash (used in)/generated from financing
activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Clients’ settlement cash
Group cash
Cash and cash equivalents at end of year
1,136
(210)
(168)
(530)
12,13 & 14
12
8
8
9
7
20
8
12
16
14
17
23
30
8
21
394
(48)
(64)
52
516
(398)
(57)
(1,435)
(2,170)
45
(534)
(2,563)
(47)
(2,610)
523
64
(17)
(402)
(523)
84
(108)
—
(379)
7
(158)
(102)
(52)
(305)
(3,294)
9,340
6,046
2,188
3,858
6,046
372
—
(13)
56
33
130
325
(7,610)
9,940
234
105
3,362
—
3,362
664
13
(18)
(686)
(1,103)
(604)
—
25
(1,709)
133
244
—
(56)
321
1,974
7,366
9,340
4,189
5,151
9,340
142
—
—
26
47
—
(57)
(189)
108
—
—
(91)
—
(91)
—
—
—
(31)
—
—
—
—
(31)
7
(170)
—
(26)
(189)
(311)
301
(10)
—
(10)
(10)
573
—
—
—
(18)
—
326
259
(258)
—
—
352
—
352
—
—
—
—
—
—
—
25
25
133
(240)
—
—
(107)
270
31
301
—
301
301
The notes on pages 23 to 49 are an integral part of these financial statements.
WH Ireland Group plc annual report and accounts 2013
20
Consolidated statement of changes in equity
For the year ended 30 November 2013
Group
Balance at 1 December 2011
Losses arising on available-for-sale
investments
Deferred taxation
Other comprehensive income
Loss after taxation
Total comprehensive income
Shares options exercised
Employee share option scheme
Share capital reduction
Reserve transfer
Treasury shares issued to employees
Balance at 30 November 2012
Losses arising on available-for-sale
investments
Deferred taxation
Other comprehensive income
Profit after taxation
Total comprehensive income
Shares options exercised
Employee share option scheme
Dividends
Balance at 30 November 2013
Share
capital
£’000
1,171
—
—
—
—
—
13
—
—
—
—
1,184
—
—
—
—
—
1
—
—
1,185
Share
premium
£’000
6,406
—
Available-
for-sale
reserve
£’000
165
(1)
Other
reserves
£’000
1,472
—
Retained
earnings
£’000
3,853
—
—
—
—
—
120
—
(6,526)
—
—
—
—
—
—
—
—
6
—
—
6
6
5
—
—
—
—
—
—
—
170
(211)
48
(163)
—
—
—
—
—
7
—
—
—
—
—
—
—
(490)
—
982
—
—
—
—
—
—
—
—
982
—
—
(210)
(210)
—
325
6,526
490
(287)
10,697
—
—
—
1,136
1,136
—
(57)
(108)
11,668
Treasury
shares
£’000
Total
equity
£’000
(1,069) 11,998
(1)
—
—
—
—
—
—
—
—
—
287
6
5
(210)
(210)
133
325
—
—
—
(782) 12,251
(211)
—
—
—
—
—
—
—
—
48
(163)
1,136
1,136
7
(57)
(108)
(782) 13,066
The total number of authorised ordinary shares is 34.5 million shares of 5p each (2012: 34.5 million shares of 5p
each). The total number of issued ordinary shares is 23.7 million shares of 5p each (2012: 23.6 million shares of 5p
each). 14,930 shares were issued during the year (2012: 264,785), of which none (2012: nil) are held as Treasury
(note 27).
WH Ireland Group plc annual report and accounts 2013
21
Company statement of changes in equity
For the year ended 30 November 2013
Company
Balance at 1 December 2011
Loss arising on available-for-sale
investments
Other comprehensive income
Loss after taxation
Total comprehensive income
Share options exercised
Employee share option scheme
Share capital reduction
Reserve transfer
Treasury shares issued to employees
Balance at 30 November 2012
Loss after taxation
Total comprehensive income
Shares options exercised
Employee share option scheme
Dividends
Balance at 30 November 2013
Share
capital
£’000
1,171
—
—
—
—
13
—
—
—
—
1,184
—
—
1
—
—
1,185
Share
premium
£’000
6,406
—
Available-
for-sale
reserve
£’000
—
—
Other
reserves
£’000
719
—
Retained
earnings
£’000
(1,599)
—
Treasury
shares
£’000
(287)
—
—
—
—
120
—
(6,526)
—
—
—
—
—
6
—
—
6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(490)
—
229
—
—
—
—
—
229
—
(530)
(530)
—
325
6,526
490
(287)
4,925
(168)
(168)
—
(57)
(108)
4,592
—
—
—
—
—
—
—
287
—
—
—
—
—
—
—
Total
equity
£’000
6,410
—
—
(530)
(530)
133
325
—
—
—
6,338
(168)
(168)
7
(57)
(108)
6,012
The nature and purpose of each reserve, whether Consolidated or Company only, is summarised below:
Share premium
The share premium is the amount raised on the issue of shares that is in excess of the nominal value of those shares
and is recorded less any direct costs of issue.
Available-for-sale reserve
The available-for-sale reserve reflects gains or losses arising from the change in fair value of available-for-sale
financial assets except for impairment losses which are recognised in the income statement. When an available-for-
sale asset is impaired or derecognised, the cumulative gain or loss previously recognised in the available-for-sale
reserve is transferred to the income statement.
Other reserves
Other reserves comprise a (consolidated) merger reserve of £754k (2012: £754k) and a (consolidated) capital
redemption reserve of £228k (2012: £228k).
Retained earnings
Retained earnings reflect; accumulated income, expenses, gains and losses, recognised in the income statement and
the statement of recognised income and expense and is net of dividends paid to shareholders. The cumulative effect
of changes in accounting policy is also reflected as an adjustment in retained earnings.
During the previous financial year, the Company was granted a Court Order approving a Capital Reduction, which
became effective on 29 November 2012. This reduction created distributable reserves by cancelling the amount
standing to the credit of the Company’s share premium account.
Treasury shares
Purchases of the Company’s own shares in the market are presented as a deduction from equity, at the amount paid,
including transaction costs. That is, treasury shares are shown as a separate class of shareholders’ equity with a
debit balance.
WH Ireland Group plc annual report and accounts 2013
22
Notes to the financial statements
For the year ended 30 November 2013
1. General information
WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are listed
on the Alternative Investment Market of the London Stock Exchange. The address of its registered office is 24 Martin
Lane, London EC4R 0DR. The Group’s principal activities are described in the Strategic Report on pages 3 to 5 and
in note 5.
2. Adoption of new and revised standards
No new standards, interpretations and amendments effective for the first time from 1 December 2012, have had a
material effect on the Group’s financial statements.
New standards, interpretations and amendments not yet effective
The following new standards, not having been applied in these financial statements, will or may have an effect on the
Group’s future financial statements:
•
•
IFRS 9 Financial Instruments: IFRS 9 will eventually replace IAS 39 in its entirety. However, the process has
been divided into three main components (classification and measurement, impairment and hedge accounting).
This standard becomes effective for accounting periods beginning on or after 1 January 2015. Its adoption may
result in changes to the classification and measurement of the Group’s financial instruments, including any
impairment thereof.
IFRS 12 Disclosure of Interests in Other Entities: IFRS 12 includes the disclosure requirements for all forms of
interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured
entities.
The standard will require the Group and Company to disclose information that helps users to assess the nature
and financial effects of its relationship with other entities. Specifically, the disclosures are intended to help users:
• understand the judgements and assumptions made when deciding how to classify its involvement with
another entity;
• understand the interest that non-controlling interests have in consolidated entities; and
• assess the nature of the risks associated with interests in other entities.
This standard becomes effective for accounting periods beginning on or after 1 January 2013.
The following new standards have not been applied in these financial statements, and are not expected to have
material effect on the Group’s or Company’s future financial statements:
•
IFRS 10 Consolidated Financial Statements: IFRS 10 replaces the portion of IAS 27 Consolidated and Separate
Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the
issues raised in SIC-12 Consolidation — Special Purpose Entities.
IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The
changes introduced by IFRS 10 will require management to exercise significant judgement to determine
which entities are controlled and therefore are required to be consolidated by a parent, compared with the
requirements that were in IAS 27. Based on the preliminary analyses performed, IFRS 10 is not expected to have
any impact on the currently held investments of the Group. This standard becomes effective for annual periods
beginning on or after 1 January 2013.
IFRS 13 Fair Value Measurement: IFRS 13 establishes a single source of guidance under IFRS for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides
guidance on how to measure fair value under IFRS when fair value is required or permitted. The Group is
currently assessing the impact that this standard will have on the financial position and performance, but based on
the preliminary analyses, no material impact is expected. This standard becomes effective for annual periods
beginning on or after 1 January 2013.
3. Significant accounting policies
Basis of preparation
The financial statements of the Group and the Company have been prepared in accordance with IFRS as adopted in
the European Union, and their interpretations adopted by the IASB or the IFRIC or their predecessors, which had
been approved by the European Commission at 30 November 2013.
The Group and the Company’s functional and presentational currency is sterling.
The accounts have been prepared on a Going Concern basis as in the opinion of the Directors, at the time of
approving the financial statements there is a reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. Further details can be found within the Directors’ Report
on pages 8 to 10.
WH Ireland Group plc annual report and accounts 2013
23
Notes to the financial statements
For the year ended 30 November 2013
3. Significant accounting policies continued
Basis of consolidation
The consolidated financial statements incorporate the financial statements of WH Ireland Group plc and all its
subsidiary undertakings. Subsidiaries are all entities in which the Group has a controlling interest, generally
accompanying a shareholding of more than one half of the voting rights. Subsidiaries are consolidated from the date
on which control is transferred to the Group and are deconsolidated from the date control ceases. Intragroup
balances and any unrealised gains or income and expenses arising from intragroup transactions are eliminated on
consolidation. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there
is no evidence of impairment. For the purposes of the consolidated financial statements, uniform accounting policies
have been followed by the Group.
In the Company’s accounts, investments in subsidiary undertakings and associates are stated at cost less any
provision for impairment.
Business combinations
All business combinations are accounted for by applying the purchase method. The purchase method involves
recognition, at fair value, of all identifiable assets and liabilities, including contingent liabilities, of the subsidiary at the
acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to
acquisition. The cost of business combinations is measured based on the fair value of the equity or debt instruments
issued and cash or other consideration paid, plus any directly attributable costs. On 1 December 2009, the Group
adopted IFRS3 (Revised) and therefore any directly attributable costs relating to business combinations after this date
are charged to the income statement in the period in which they are incurred.
Goodwill arising on a business combination represents the excess of cost over the fair value of the Group’s share of
the identifiable net assets acquired and is stated at cost less any accumulated impairment losses. Goodwill is tested
annually for impairment. Any impairment is recognised immediately in the income statement and is not subsequently
reversed. Negative goodwill arising on an acquisition is recognised immediately in the income statement. On
disposal of a subsidiary the attributable amount of goodwill that has not been subject to impairment is included in the
determination of the profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP
amounts subject to being tested for impairment at that date.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will
flow into the Group.
Revenue comprises brokerage commission, investment management fees, corporate finance fees, commission and
fees earned from the provision of independent financial advice and interest receivable in the course of ordinary
investment management business and is stated net of VAT and foreign sales tax.
• Brokerage commission is recognised when receivable in accordance with the date of the underlying
transaction.
Investment management fees are recognised in the period in which the related service is provided.
•
• Corporate finance fees comprise the value of services supplied by the Group.
• Advisory fees are recognised when the relevant transaction is completed and retainer fees are recognised
over the length of time of the agreement.
• Commission and fees earned from the provision of independent financial advice comprises commission and
fees relating to new business written and trail commission earned on existing client business managed by the
Group. New business commission and fees are recognised when the relevant transaction is completed and
trail commission is recognised over the length of time of the customer policy.
Interest income is accrued on a time basis by reference to the principal outstanding and at the effective
interest rate applicable.
•
• Fees contingent upon the outcome of a project are recognised on an accruals basis, when it is reasonably
certain that it will be received.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker, who is responsible for allocating resources and assessing performance of the operating segments,
and who has been identified as the Board of Directors, comprising both Executive and Non-executive Directors.
WH Ireland Group plc annual report and accounts 2013
24
Notes to the financial statements
For the year ended 30 November 2013
3. Significant accounting policies continued
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are translated using the exchange rate ruling at the balance
sheet date. Exchange differences arising are included in the income statement.
Employee benefits
The Group contributes to employees’ individual money purchase personal pension schemes. The assets of the
schemes are held separately from those of the Group in independently administered funds. The amount charged to
the income statement represents the contributions payable to the schemes in respect of the period to which they
relate.
Short-term employee benefits are those that fall due for payment within twelve months of the end of the period in
which employees render the related service. The cost of short-term benefits is not discounted and is recognised in the
period in which the related service is rendered. Short-term employee benefits include cash-based incentive schemes
and annual bonuses.
Share-based payments
The share option programmes allows Group employees to receive remuneration in the form of equity-settled share-
based payments granted by the Company.
The Group and Company have taken advantage of the transitional provisions of IFRS 2 ‘Share-based Payment’ in
respect of equity-settled awards and have applied IFRS 2 only to awards granted after 7 November 2002 that had not
vested before 1 December 2006.
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value of the options granted is measured using an option valuation model. The cost of
equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance or service conditions are fulfilled (the vesting period), ending on the date on which the relevant
employees become fully entitled to the award (the vesting date). The cumulative expense recognised for
equity-settled transactions, at each reporting date until the vesting date, reflects the extent to which the vesting period
has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The income
statement charge or credit for a period represents the movement in cumulative expense recognised at the beginning
and end of that period.
Where the terms of an equity-settled award are modified, an incremental value is calculated as the difference between
the fair value of the re-priced option and the fair value of the original option at the date of re-pricing. This incremental
value is then recognised as an expense over the remaining vesting period in addition to the amount recognised in
respect of the original option grant.
Where an equity-settled award is cancelled or settled (that is, cancelled with some form of compensation) it is treated
as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for the cancelled award and is designated as a replacement
award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph. Any compensation paid up to the fair value of the award is
accounted for as a deduction from equity. Where an award is cancelled by forfeiture, when the vesting conditions are
not satisfied, any costs already recognised are reversed (subject to exceptions for market conditions).
In all instances, the charge/credit is taken to the income statement of the Group company by which the individual
concerned is employed.
Employee Benefit Trust (EBT)
The cost of purchasing own shares held by the EBT are shown as a deduction against equity. The proceeds
from the sale of own shares held increase equity. Neither the purchase nor sale of own shares leads to a gain or loss
being recognised in the consolidated income statement.
Employee Share Ownership Trust (ESOT)
The Company has established an ESOT. The assets and liabilities of this trust comprise shares in the Company and
loan balances due to the Company. The Group includes the ESOT within these consolidated Financial Statements
and therefore recognises a Treasury shares reserve in respect of the amounts loaned to the ESOT and used to
purchase shares in the Company. Any cash received by the ESOT on disposal of the shares it holds, will be used to
repay the loan to the Company.
WH Ireland Group plc annual report and accounts 2013
25
Notes to the financial statements
For the year ended 30 November 2013
3. Significant accounting policies continued
Treasury shares
The costs of purchasing Treasury shares are shown as a deduction against equity. The proceeds from the sale of
own shares held increase equity. Neither the purchase nor sale of own shares leads to a gain or loss being
recognised in the consolidated income statement.
Income taxes
Income tax on the profit or loss for the periods presented, comprising current tax and deferred tax, is recognised in the
income statement except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantively
enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided for temporary differences, at the balance sheet date, between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. The following temporary differences are not
provided for:
• goodwill which is not deductible for tax purposes;
•
•
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and
temporary differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised for all deductible temporary differences and unused tax losses only to the extent
that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax
assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Leases
Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the
assets are treated as if they had been purchased outright. The amount capitalised is the present value of the
minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as
amounts payable to the lessor. Depreciation on the relevant assets is charged to the profit and loss account over the
shorter of estimated useful economic life and the period of the lease.
Lease payments are analysed between capital and interest components so that the interest element of the payment is
charged to the profit and loss account over the period of the lease and is calculated so that it represents a constant
proportion of the balance of the capital payments outstanding. The capital part reduces the amounts payable to the
lessor.
Property, plant and equipment
Property, plant and equipment is stated at the lower of cost less accumulated depreciation, or valuation.
Depreciation is calculated, using the straight line method, to write down the cost or revalued amount of property, plant
and equipment over the assets’ expected useful lives, to their residual values, as follows:
Buildings
– 50 years
Computers, fixtures and fittings
– 4 to 7 years
The Group’s freehold land is considered to have a residual value equal to or greater than its carrying amounts and
therefore the current depreciation charge in respect of freehold land is zero.
Intangible assets
Intangible assets acquired separately are measured, on initial recognition, at cost. Following initial recognition,
intangible assets acquired separately are carried at cost less accumulated amortisation and any accumulated
impairment. The cost of intangible assets acquired in a business combination is their fair value at the date of
acquisition.
Intangible assets are amortised over their useful economic lives estimated to be 20 years. The amortisation period
and method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by
changing the amortisation period or method and treated as changes in accounting estimates. Amortisation
is calculated on a straight line basis to write down the cost of intangible assets to their residual values over this
assessed period.
WH Ireland Group plc annual report and accounts 2013
26
Notes to the financial statements
For the year ended 30 November 2013
3. Significant accounting policies continued
Impairment of non-financial assets
The carrying amounts of the Group’s non-financial assets are reviewed at each reporting date when events or
circumstances indicate that the assets may be impaired. If any such indication exists or as in the case of goodwill,
when annual impairment testing is required, the asset’s recoverable amount is estimated.
The recoverable amount is the higher of the asset’s fair value less costs to sell (or net selling price) and its value-in-
use. Value-in-use is the discounted present value of estimated future cash inflows expected to arise from the
continuing use of the asset and from its disposal at the end of its useful life.
Impairment is identified at the individual asset level where possible. Where the recoverable amount of an individual
asset cannot be identified, it is calculated for the smallest cash-generating unit (CGU) to which the asset belongs. A
CGU is the smallest identifiable group of assets that generates cash inflows independently.
When the carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered to
be impaired and is written down to its recoverable amount. An impairment loss is immediately recognised as an
expense.
Financial assets
Initial recognition
The classification of financial assets at initial recognition depends upon the purpose for which they are acquired and
their characteristics. Financial assets are measured initially at their fair value. Financial assets not at fair value
through profit or loss include any directly attributable incremental costs of acquisition or issue.
Financial assets classified as available-for-sale
Available-for-sale financial assets are financial assets designated as such on initial recognition or those that do not
qualify to be classified in another category. They include equity investments, other than those in subsidiary
undertakings and may be in quoted or unquoted entities.
After initial measurement, available-for-sale financial assets are subsequently measured at fair value. In the case of
listed investments, the fair value represents the quoted bid price of the investment at the balance sheet date. The fair
value of unlisted investments is estimated by reference to recent arm’s length transactions.
Unrealised gains and losses are recognised directly in equity in the available-for-sale reserve. When an available-for-
sale financial asset is disposed of, the cumulative gain or loss previously recognised in equity is recognised in the
income statement in profit on disposal of available-for-sale investments. Losses arising from impairment are
recognised in the income.
The fair value of unquoted investments is determined based on recent arm’s length transactions. Any profit or loss on
sale is credited or charged to the income statement.
Other investments
Other investments comprise financial assets designated as fair value through profit and loss and include warrants and
quoted investments obtained as a result of a corporate finance transaction. Warrants are valued by taking the mean
of the results from three different methods; Black Scholes with short-term volatility, Black Scholes with longer-term
volatility and an Empirical model. Quoted investments are valued at the quoted bid price at the balance sheet date.
Changes in the value of these other investments are recognised directly in the income statement.
Impairment of financial assets
The Group assesses, at each balance sheet date, whether there is objective evidence that a financial asset or a group
of financial assets is impaired. In the case of financial assets classified as available-for-sale, a significant or
prolonged decline in the fair value of the asset is considered in determining whether the assets are impaired. If any
such evidence exists for available-for-sale financial assets, the cumulative loss, less any impairment loss previously
recognised is removed from equity and recognised in the income statement.
If, in a subsequent period, the fair value of an asset classified as available-for-sale increases, the loss may not be
reversed through the income statement. Any increase after an impairment loss has been recognised is treated as a
revaluation and is recognised directly in equity.
Loan notes receivable
Loan notes are initially recognised as a financial asset at the fair value of the amount paid. Subsequent to initial
recognition, loan notes are measured at amortised cost using the effective interest.
Trade receivables
Trade receivables are measured on initial recognition at fair value. Appropriate allowances for estimated irrecoverable
amounts are recognised in the income statement when there is objective evidence that the asset is impaired.
WH Ireland Group plc annual report and accounts 2013
27
Notes to the financial statements
For the year ended 30 November 2013
3. Significant accounting policies continued
Other investments
Other investments, which relate to short-term principal positions taken on behalf of clients, are recognised and
derecognised on trade date. Other investments are measured at fair value which is determined directly by reference
to published prices in an active market where available. Gains or losses arising from changes in fair value or disposal
of other investments are recognised through the income statement.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash and bank balances and short-
term highly liquid investments with an original maturity of three months or less. Client settlement balances are
included in cash but are separately disclosed in the notes to the financial statements.
Financial liabilities
Bank loans and loan notes are initially recognised as financial liabilities at the fair value of the consideration received.
Subsequent to initial recognition, bank loans and loan notes are measured at amortised cost using the effective
interest method.
Trade payables
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors
consider that the carrying amount of trade payables approximates to their fair value.
Provisions
A provision is recognised when a present legal or constructive obligation has arisen as a result of a past event and it is
probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.
Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred.
4. Critical accounting judgements and key sources of estimation and uncertainty
The preparation of financial statements in accordance with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including reasonable expectations of future events. The estimates and judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below:
Investments
The fair values of investments that are not traded in an active market are determined by using valuation techniques.
The Group uses its judgement to select a variety of methods that are mainly based on market conditions existing at
the balance sheet date. In the case of warrants, the fair value is estimated using established valuation models.
Share-based payments
The calculation of the fair value of equity-settled share-based awards and the resulting charge to the income
statement require assumptions to be made regarding future events and market conditions. These assumptions
include the future volatility of the Company’s share price, future dividend yield and the rate at which awards will lapse
or be forfeited. These assumptions are then applied to a recognised valuation model in order to calculate the fair
value of the awards. The assumptions made are based on relevant historical data, where available, and take into
account any knowledge of future market expectations. The fair value attributed to the awards and hence the charge
made to the income statement could be materially affected should different assumptions be made to those applied by
the Group. Details of these assumptions are set out in note 29.
Impairment of non financial assets
The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget
for the next three years and do not include restructuring activities that the Group is not yet committed to or significant
future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is
most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-
inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable
amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in Note 13.
WH Ireland Group plc annual report and accounts 2013
28
Notes to the financial statements
For the year ended 30 November 2013
5. Segment information
The Group has two operating segments, Private Wealth Management and Corporate Broking.
The Private Wealth Management division offers investment management and stockbroking advice and services to
individuals and contains our Independent Financial Advisory (“IFA”) business, giving advice on and acting as
intermediary for a range of financial products. The Corporate Broking division provides corporate finance and
corporate broking advice and services to companies and acts as Nominated Adviser to clients listed on the Alternative
Investment Market (“AIM”) and contains our Institutional Sales and Research business, which carries out stockbroking
activities on behalf of companies as well as conducting research into markets of interest to its clients.
All divisions are located in the UK. Each reportable segment has a segment manager who is directly accountable to
and maintains regular contact with the CODM. The Head Office segment comprises centrally incurred costs and
revenues.
No customer represents more than ten percent of the Group’s revenue.
The following tables represent revenue and profit information for the Group’s business segments
Year ended 30 November 2013
Revenue
Segment result
Other Income
Investment (losses)/gains
Fair value (losses)/gains on investments
Finance income
Finance expense
Profit/(loss) before taxation
Taxation
Profit/(loss) on continuing operations after taxation
Year ended 30 November 2012
Revenue
Segment result
Other Income
Investment gains
Fair value (losses)/gains on investments
Finance income
Finance expense
Profit/(loss) before taxation
Taxation
Profit/(loss) on continuing operations after taxation
Private Wealth
Management
£’000
17,991
4,491
-
-
(63)
-
-
4,428
-
4,428
Private Wealth
Management
£’000
14,395
3,109
-
-
(219)
-
-
2,890
Corporate
Broking
£’000
8,488
2,017
(19)
45
45
-
2,088
-
2,088
Corporate
Broking
£’000
7,031
1,246
-
47
25
-
-
1,318
2,890
1,318
Head
Office
£’000
3,174
(5,589)
25
477
256
19
(52)
(4,864)
(516)
(5,380)
Head
Office
£’000
3,653
(4,265)
16
-
(93)
13
(56)
(4,385)
(33)
(4,418)
Group
£’000
29,653
919
25
458
238
64
(52)
1,652
(516)
1,136
Group
£’000
25,079
90
16
47
(287)
13
(56)
(177)
(33)
(210)
Segment assets and segment liabilities are reviewed by the CODM in a consolidated statement of financial position.
Accordingly this information is replicated in the Group Consolidated Statement of Financial Position on page 19. As
no measure of assets or liabilities for individual segments is reviewed regularly by the CODM, no disclosure of total
assets or liabilities has been made.
The accounting policies of the operating segments are the same as those described in the summary of significant
accounting policies.
WH Ireland Group plc annual report and accounts 2013
29
Notes to the financial statements
For the year ended 30 November 2013
6. Operating profit
Group
Operating profit is stated after charging/(crediting):
Depreciation of property, plant and equipment
Revaluation of property, plant and equipment
Impairment of goodwill
Amortisation of intangibles
Operating lease rentals – property
Operating lease rentals – vehicles and equipment
Employee benefit expense (note 7)
Auditors’ remuneration:
Audit of these financial statements
Amounts payable to the principal auditors and their associates in respect of:
– audit of financial statements of subsidiaries pursuant to legislation
– audit related assurance services
7. Employee benefit expense
Group
Wages and salaries
Bonuses
Social security costs
Other pension costs
Shared commission attachés
Share options granted to employees (note 29)
The average number of persons (including Directors) employed during the year was:
Corporate, dealing and sales
Settlement
Administration
Salaried staff
Shared commission attachés
Total
Year ended
30 November
2013
£’000
Year ended
30 November
2012
£’000
222
(48)
142
31
237
8
17,360
17
38
23
Year ended
30 November
2013
£’000
9,275
2,825
1,447
390
13,937
3,480
17,417
(57)
17,360
Year ended
30 November
2013
95
29
69
193
36
229
231
—
141
—
241
8
15,569
17
40
23
Year ended
30 November
2012
£’000
8,342
2,159
1,314
338
12,153
3,090
15,243
326
15,569
Year ended
30 November
2012
90
28
65
183
34
217
Shared commission attachés are commission-only brokers and therefore do not receive a salary.
The total amount paid to Directors in the year, including social security costs was £0.9m (2012: £0.8m). Full details of
Directors’ remuneration, including that of the highest paid Director, are disclosed in the Remuneration Report on
pages 12 to 15 of these financial statements.
WH Ireland Group plc annual report and accounts 2013
30
Notes to the financial statements
For the year ended 30 November 2013
8. Finance income and expense
Group
Bank interest receivable
Other interest
Finance income
Interest payable on bank loans
Interest payable on finance leases
Finance expense
9. Taxation
Group
Current tax expense:
United Kingdom corporation tax at 23.33% (2012: 24.67%)
Adjustment in respect of prior years
Deferred tax expense (note 18):
Current year
Origination and reversal of temporary differences
Effect of change in tax rate
Adjustments in respect of prior years
Total tax expense in the income statement
Year ended
30 November
2013
£’000
17
47
64
Year ended
30 November
2012
£’000
12
1
13
36
16
52
37
19
56
Year ended
30 November
2013
£’000
Year ended
30 November
2012
£’000
99
50
149
315
—
23
29
367
516
66
—
66
—
(84)
32
19
(33)
33
The tax expense for the year and the amount calculated by applying the standard United Kingdom corporation tax rate
of 23.33% (2012: 24.67%) to profit /(loss) before taxation can be reconciled as follows:
Group
Profit/(loss) before taxation
Tax expense using the United Kingdom corporation tax rate of 23.33% (2012: 24.67%)
Other expenses not tax deductible
Income not chargeable to tax
Impact of share options
Schedule 23
Tax effect of chargeable gains
Adjustments in respect of prior years
Effect of other tax rates/credits
Effect of marginal relief
Effect of change in tax rate
Total tax expense in the income statement
Year ended
30 November
2013
£’000
1,652
386
101
(113)
44
—
—
79
(3)
—
22
516
Year ended
30 November
2012
£’000
(177)
(44)
173
(53)
(96)
(25)
33
19
(6)
—
32
33
10. Dividends
A final dividend of 0.5p per share was paid in 2012, and a final dividend of 1.5p per share is proposed for 2013.
WH Ireland Group plc annual report and accounts 2013
31
Notes to the financial statements
For the year ended 30 November 2013
11. Earnings per share (EPS)
Basic EPS is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as
treasury shares (note 27).
Diluted EPS is the basic EPS, adjusted for the effect of the conversion into fully paid shares of the weighted average
number of all employee share options outstanding during the year. Options over 89,801 (2012: 7,164) shares are
excluded from the EPS calculation as they are antidilutive. Antidilutive options represent options issued where the
exercise price is greater than the average market price for the period.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below:
Group
Weighted average number of shares in issue during the period
Effect of dilutive share options
Earnings attributable to ordinary shareholders
Basic EPS
Continuing operations
Diluted EPS
Continuing operations
Year ended
30 November
2013
000’s
Year ended
30 November
2012
000’s
23,698
1,716
25,414
£’000
1,136
23,547
1,651
25,198
£’000
(210)
4.80p
(0.89)p
4.47p
(0.89)p
WH Ireland Group plc annual report and accounts 2013
32
Notes to the financial statements
For the year ended 30 November 2013
12. Property plant and equipment
Group
Cost or valuation
At 1 December 2011
Additions
At 30 November 2012
Additions
Revaluation
At 30 November 2013
Depreciation
At 1 December 2011
Charge for the year
At 30 November 2012
Charge for the year
At 30 November 2013
Net book values
At 30 November 2013
At 30 November 2012
At 30 November 2011
Freehold
Property
£’000
Computers,
fixtures
and fittings
£’000
6,344
—
6,344
2
48
6,394
1,644
—
1,644
—
1,644
4,750
4,700
4,700
2,042
686
2,728
400
—
3,128
1,785
231
2,016
222
2,238
890
712
257
Total
£’000
8,386
686
9,072
402
48
9,522
3,429
231
3,660
222
3,882
5,640
5,412
4,957
Bank borrowings are secured on freehold property for the value of £1,514,471 (2012: £1,686,957) (note 23).
The freehold property at 11 St James’s Square, Manchester was valued by Lambert Smith Hampton as at 30
November 2013. They reported that its Market Value, as defined in the Valuation Standards of the Royal Institute of
Chartered Surveyors, was £4.75m.
At 30 November 2013, the carrying value of property, plant and equipment held under finance leases amounted to
£377,249 (2012: £496,380).
At 30 November 2013, the historical cost carrying value of the freehold property amounted to £5,826,237 (2012:
£5,776,237).
Company
Cost or valuation
At 1 December 2011
At 30 November 2012
Additions
At 30 November 2013
Depreciation
At 1 December 2011
At 30 November 2012
At 30 November 2013
Net book values
At 30 November 2013
At 30 November 2012
At 30 November 2011
Computers,
fixtures and
fittings
£’000
1
1
31
32
1
1
1
31
—
—
Total
£’000
1
1
31
32
1
1
1
31
—
—
WH Ireland Group plc annual report and accounts 2013
33
Notes to the financial statements
For the year ended 30 November 2013
13. Goodwill
Group
Beginning of year
Impairment
End of year
Impairment tests for goodwill
Goodwill of the Group is allocated to the following CGUs:
At 1 December 2011
Impairment
At 30 November 2012
Impairment
At 30 November 2013
Year ended
30 November
2013
£’000
542
(142)
400
Year ended
30 November
2012
£’000
683
(141)
542
Stockholm
Investments Ltd
£’000
683
(141)
542
(142)
400
Total
£’000
683
(141)
542
(142)
400
The Group tests at least annually for goodwill impairment. The recoverable amount of a CGU is determined based on
value-in-use calculations. These calculations use pre-tax cash flows based on financial budgets prepared by
management covering a three year period and then extrapolated for the remaining useful economic life based on
relevant estimated growth rates of 2% for revenue (2012: 3%) and 0% for costs (2012:0%). This is then adjusted for
the anticipated wind-down in the client books acquired at 5% per annum. This net cash flow is then discounted by an
appropriate cost of capital of 10% (2012: 10%) in order to estimate their present value.
The key assumptions for the value-in-use calculations are those regarding the discount rate, growth rates and
expected changes to revenues and costs in the period. Management has made these assumptions based on past
experience and future expectations in the light of anticipated market conditions, combined with the actions taken
during this and last year to streamline the Group’s operations whilst maximising revenue potential.
Where the value-in-use exceeds the carrying value of the goodwill asset, it has been concluded that no impairment is
necessary. However, where this is not the case, goodwill is written down to the net present value of cash flows at the
balance sheet date.
Sensitivity analysis shows that the client wind-down variable is now the key component of the outcome of the
recoverable amount of Stockholm Investments Limited, the remaining CGU. This has been set at 5% per annum
based on the historic movement in the client bank. However, if this were to grow to a wind-down of 14% per annum,
the recoverable amount after five years would be £nil.
WH Ireland Group plc annual report and accounts 2013
34
Notes to the financial statements
For the year ended 30 November 2013
14. Intangible assets
Cost
At 1 December 2011
Additions*
At 30 November 2012
Additions*
Other*
At 30 November 2013
Amortisation
At 1 December 2011
At 30 November 2012
Charge for the year
At 30 November 2013
Net book values
At 30 November 2013
At 30 November 2012
At 30 November 2011
Client
relationships
£’000
641
604
1,245
36
(120)
1,161
641
641
31
672
489
604
—
* The addition for the year ended 30 November 2012 relates to the acquisition of a client bank from Pritchard
Stockbrokers Limited. Following further dialogue with the administrators of Pritchard, a refund of £120k was agreed in
October 2013 which is included in the ‘Other’ line in the year ended 30 November 2013. The addition in the year
ended 30 November 2013 relates to the acquisition of the client bank from Tenebris Realisations Limited (In
Administration), formerly Seymour Pierce Limited.
15. Subsidiaries
Company
Beginning of year
Impairment
End of year
Year ended
30 November
2013
£’000
1,970
(142)
1,828
Year ended
30 November
2012
£’000
2,544
(574)
1,970
Investments in subsidiaries are stated at cost less impairment.
The Company’s subsidiaries, all of which are included in the consolidated financial statements, are presented below:
Subsidiary
WH Ireland Limited
Country of incorporation
England & Wales
England & Wales
England & Wales
WHI Leasing Limited
WH Ireland (Financial Services)
Limited
England & Wales
Readycount Limited
Stockholm Investments Limited
England & Wales
WH Ireland (Stockbrokers) Limited England & Wales
England & Wales
ARE Business and Professional
Limited
SRS Business and Professional
Limited
WH Ireland Nominees Limited
WH Ireland Trustee Limited
Fitel Nominees Limited
England & Wales
England & Wales
England & Wales
England & Wales
Class of
shares
Ordinary
Proportion Proportion
held by
held by
Group Company
100%
100%
Principal activity
Stockbroking, corporate
finance and wealth
management
Dormant Ordinary
Dormant Ordinary
100%
100%
Property Ordinary
Investment consultancy Ordinary
Dormant Ordinary
Dormant Ordinary
100%
100%
100%
100%
Dormant Ordinary
100%
Nominee Ordinary
Trustee Ordinary
Nominee Ordinary
100%
100%
100%
100%
—
100%
100%
100%
—
—
—
—
—
WH Ireland Group plc annual report and accounts 2013
35
Notes to the financial statements
For the year ended 30 November 2013
16. Investments
Group
Available-for-sale investments
At 1 December 2011
Additions
Fair value gain
At 30 November 2012
Additions
Fair value (loss)/gain
Reversal of impairment
Disposals
At 30 November 2013
Other investments
At 1 December 2011
Additions
Fair value gain/(loss)
Disposals
At 30 November 2012
Additions
Fair value loss
Disposals
At 30 November 2013
Total investments 30 November 2013
Total investments 30 November 2012
Quoted
£’000
12
—
3
15
6
(14)
—
(7)
—
Quoted
£’000
350
440
23
(408)
405
458
(124)
(663)
76
Unquoted
£’000
309
437
—
746
59
287
370
(1,115)
347
Warrants
£’000
271
226
(156)
(256)
85
—
(36)
(25)
24
Total
£’000
321
437
3
761
65
273
370
(1,122)
347
Total
£’000
621
666
(133)
(664)
490
458
(160)
(688)
100
447
1,251
Available-for-sale investments include equity investments and investments in subsidiaries. Available-for-sale
investments are measured at fair value with fair value gains and losses recognised directly in equity in the available-
for-sale reserve.
Other investments, in the main, comprise financial assets designated as fair value through profit or loss and include
equity investments. Financial assets designated as ‘fair value through profit or loss’ are measured at fair value with
fair value gains and losses recognised directly in the income statement.
Warrants may be received during the ordinary course of business and are designated as fair value through profit or
loss. There is no cash consideration associated with the acquisition.
Fair value, in the case of quoted investments, represents the bid price at the balance sheet date. In the case of
unquoted investments, the fair value is estimated by reference to recent arm’s length transactions. The fair value of
warrants is estimated using established valuation models.
17. Loan notes receivable
There were no loan notes receivable during the current year. Loan notes receivable representing £25,000 Unsecured
Nil Rate Loan Notes 2020 issued on 19 March 2010 by Acceleris plc were repaid in full on 31 July 2012.
WH Ireland Group plc annual report and accounts 2013
36
Notes to the financial statements
For the year ended 30 November 2013
18. Deferred tax assets and liabilities
Deferred tax is provided for temporary differences, at the balance sheet date, between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes using a tax rate of 23.33% (2012: 24.67%). A
deferred tax asset is recognised for all deductible temporary differences and unused tax losses only to the extent that
it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets
are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are attributable to the following:
Group
Property, plant and equipment
Intangible assets
Share options
Available-for-sale investments
Provisions, trade and other payables
Losses
Company
Share options
Movements in deferred tax are shown below:
Deferred tax assets
Deferred tax liabilities
2013
£’000
107
243
24
—
4
—
378
2012
£’000
164
299
71
—
9
82
625
2013
£’000
(86)
—
—
(186)
(121)
—
(393)
2012
£’000
(85)
—
—
(49)
(186)
—
(320)
Deferred tax assets
Deferred tax liabilities
2013
£’000
24
24
2012
£’000
71
71
2013
£’000
—
—
2012
£’000
—
—
Group
Property, plant and
equipment
Intangible assets
Gains on investments
Share options
Available-for-sale
investments
Provisions, trade and
other payables
Losses
Company
Share options
Trade and other payables
Losses
At
1 December
2011
£’000
Recognised
in income
statement
£’000
Recognised
in equity
£’000
At
30 November
2012
£’000
Recognised
in income
statement
£’000
Recognised
in equity
£’000
At
30 November
2013
£’000
46
370
(52)
—
(55)
(239)
198
268
33
(71)
52
71
—
62
(116)
31
—
—
—
—
6
—
—
6
79
299
—
71
(58)
(55)
—
(47)
(49)
(185)
(177)
82
305
59
(82)
(368)
—
—
—
—
48
—
—
48
21
244
—
24
(186)
(118)
—
(15)
At
1 December
2011
£’000
—
—
53
53
Recognised
in income
statement
£’000
71
—
(53)
18
At
30 November
2012
£’000
71
—
—
71
Recognised
in income
statement
£’000
(47)
—
—
(47)
At
30 November
2013
£’000
24
—
—
24
WH Ireland Group plc annual report and accounts 2013
37
Notes to the financial statements
For the year ended 30 November 2013
19. Trade and other receivables
Trade receivables
Amounts due from Group companies
Other receivables
Prepayments and accrued income
Group
Company
30 November
2013
£’000
33,473
—
1,344
1,875
36,692
30 November
2012
£’000
32,232
—
710
1,324
34,266
30 November
2013
£’000
—
5,056
7
2
5,065
30 November
2012
£’000
—
4,960
—
24
4,984
Trade receivables that relate to market transactions are considered to be past due once the date for settlement has
passed. Fees and charges owed by clients are generally considered to be past due where they remain unpaid five
working days after the relevant billing date. At 30 November 2013, trade receivables (net of provisions for bad and
doubtful debts) comprised the following:
Not past due
Up to 5 days past due
From 6 to 15 days past due
From 16 to 30 days past due
From 31 to 45 days past due
More than 45 days past due
Group
Company
30 November
2013
£’000
30,938
1,011
655
106
147
616
33,473
30 November
2012
£’000
28,610
999
672
632
136
1,183
32,232
30 November
2013
£’000
—
—
—
—
—
—
—
30 November
2012
£’000
—
—
—
—
—
—
—
Trade receivables that are not past due, or are past due but not impaired, principally relate to market transactions.
The date of settlement of market transactions is set at the time that the relevant sale or purchase order is placed with
the market. It is expected that, in the normal course of business, certain transactions may not have completed by the
settlement date. For example, a shortage of stock in the market may result in an extended settlement period, in which
case the order remains outstanding until the required quantity of stock has become available. Such balances that
remain outstanding after the settlement date are classified as past due, as appropriate, in the table above, but the
extended settlement period does not have an adverse effect on the credit quality of the balances, particularly as the
related cash or stock to which the balances relate are retained by the Group and/or the Company until settlement
occurs.
The Group has recognised an allowance for doubtful debts of 100% against all receivables over 365 days because
historical experience has been that receivables beyond 365 days are not recoverable. Allowances against doubtful
debts are recognised against trade receivables between 30 days and 365 days based on estimated irrecoverable
amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s
current financial position. At 30 November 2013, £964k of the Group’s trade receivable balances were impaired and
provided for (2012: £705k).
The maximum exposure to credit risk, before any collateral held as security, is the carrying value of each class of
receivable set out above. Collateral held against trade receivables comprises cash or marketable securities to which
the Group has an unconditional right to realise for the purposes of clients’ obligations. All such marketable securities
must be held in the Group’s nominee, Fitel Nominees Limited, and must be marked to market daily. The fair value of
collateral held at the balance sheet date was £50.5m.
The Group did not need to exercise its right to realise any collateral during the year under review.
The Directors consider that the carrying amounts of trade and other receivables approximate their fair value.
Movements in impairment provisions were as follows:
At 1 December
Amount released from provision due to recovery
Amounts written off, previously fully provided
Amount charged to the income statement
At 30 November
Group
Company
30 November
2013
£’000
705
(544)
(84)
887
964
30 November
2012
£’000
355
(91)
(179)
620
705
30 November
2013
£’000
—
—
—
—
—
30 November
2012
£’000
—
—
—
—
—
WH Ireland Group plc annual report and accounts 2013
38
Notes to the financial statements
For the year ended 30 November 2013
19. Trade and other receivables continued
The carrying value of trade and other receivable balances are denominated in the following currencies:
Sterling
Australian dollar
Other
20. Other investments
Current asset investment
Group
30 November
2013
£’000
28,427
7,272
993
36,692
30 November
2012
£’000
26,545
7,335
386
34,266
Company
30 November
2013
£’000
5,065
—
—
5,065
30 November
2012
£’000
4,984
—
—
4,984
Group
30 November
2013
£’000
847
30 November
2012
£’000
313
Company
30 November
2013
£’000
—
30 November
2012
£’000
—
These represent short-term principal positions taken on behalf of clients as at 30 November 2013 and are held at
market value. No tax was payable at that value.
21. Cash and cash equivalents
Cash and cash equivalents
Group
30 November 30 November
2012
2013
£’000
6,046
£’000
9,340
Company
30 November
2013
30 November
2012
£’000
—
£’000
301
For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand and deposits with
banks and financial institutions with a maturity of up to three months.
Cash and cash equivalents represent the Group’s and the Company’s money and money held for settlement of
outstanding transactions.
Free money held on behalf of clients is not included in the balance sheet. Free money at 30 November 2013 for the
Group was £90,611k (2012: £76,356k). There is no free money held in the Company (2012: £nil).
22. Trade and other payables
Trade payables
Amounts due to Group companies
Other payables
Taxation and social security
Accruals and deferred income
Group
Company
30 November
2013
£’000
30,470
—
1,085
702
2,723
34,980
30 November
2012
£’000
33,330
—
1,073
556
2,279
37,238
30 November
2013
£’000
—
141
27
—
23
191
30 November
2012
£’000
—
17
1
—
65
83
The Directors consider that the carrying amounts of trade and other payables approximate their fair value.
WH Ireland Group plc annual report and accounts 2013
39
Notes to the financial statements
For the year ended 30 November 2013
23. Borrowings
Bank loans
Group
30
November
2013
£’000
1,529
30
November
2012
£’000
1,687
Company
30
November
2013
£’000
1,527
30
November
2012
£’000
1,687
The Company has a £3m property loan with the Bank of Scotland, repayable over twenty years at 1.25% above base
rate. The loan was drawn down on 4 February 2002. The Bank has a floating charge over the assets of the other
trading subsidiaries of the Group.
This bank loan, at floating interest rates, exposes the Group to interest rate risk which is the risk that future cash flows
may be adversely affected as a result of changes in interest rates. The management of interest rate risk is discussed
at note 25.
Bank loans are repayable as follows:
Within one year
Within two to five years
After five years
Group
30 November 30 November
2012
£’000
168
594
925
1,687
2013
£’000
181
790
558
1,529
Company
30 November
2013
£’000
179
790
558
1,527
30 November
2012
£’000
168
594
925
1,687
The Directors consider that the carrying amounts of bank loans approximate their fair value.
24. Provisions
Group
At 1 December 2012
Provided during the year
Utilised during the year
At 30 November 2013
Provisions included in current liabilities
Provisions included in non-current liabilities
IFA clawback
provision
£’000
21
—
—
21
Complaints
provision
£’000
299
377
(332)
344
30
November
2013
£’000
344
21
365
Total
£’000
320
377
(332)
365
30
November
2012
£’000
299
21
320
The IFA clawback provision relates to any policy cancellations and the resultant potential repayment of past
independent financial advisory commission earned, relating mainly to products such as pensions and insurance.
The complaints provision relates to any complaints which may result in cash outflows falling below the relevant
insurance excess. The expected period of settlement of the outstanding complaints provision is six months from the
year end.
WH Ireland Group plc annual report and accounts 2013
40
Notes to the financial statements
For the year ended 30 November 2013
25. Financial instruments
The fair value of all of the Group’s and the Company’s financial assets and liabilities approximated its carrying value at
the balance sheet date.
The significant methods and assumptions used in estimating fair values of financial instruments are summarised
below:
Available-for-sale financial assets
Available-for-sale financial assets include equity investments, other than those in subsidiary undertakings. In the case
of listed investments, the fair value represents the quoted bid price at the balance sheet date. The fair value of
unlisted investments is estimated by reference to recent arm’s length transactions.
Other investments
Other investments include warrants and equity investments categorised as fair value through profit or loss. In the
case of listed investments, the fair value represents the quoted bid price at the balance sheet date. The fair value of
unlisted investments is estimated by reference to recent arm’s length transactions. In the case of warrants, the fair
value is estimated using established valuation models.
Loan notes receivable
Loan notes receivable are measured at amortised cost using the effective interest method. Their fair value is not
materially different to their carrying value.
Trade receivables and payables
The carrying value less impairment provision off trade receivables and payables is assumed to approximate their fair
values due to their short-term nature. Trade and other receivables exclude prepayments and accrued income and
accruals and deferred income represent liabilities due for settlement after more than one year.
Borrowings
Borrowings are measured at amortised cost using the effective interest method.
The tables below summarise the Group’s main financial instruments by financial asset type:
Group
Financial assets
Available-for-sale investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Finance leases
Borrowings
Accruals and deferred income
Provisions
30 November 2013
Held at
fair value as
available-for-sale
assets
£’000
Fair value
through
profit or loss
£’000
347
—
—
—
—
—
—
—
—
—
100
—
—
—
—
—
—
—
Amortised
cost
£’000
—
—
36,692
6,046
34,278
347
1,529
128
365
Total
£’000
347
100
36,692
6,046
34,278
347
1,529
128
365
WH Ireland Group plc annual report and accounts 2013
41
Notes to the financial statements
For the year ended 30 November 2013
25. Financial instruments continued
Group
Financial assets
Available-for-sale investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Finance leases
Borrowings
Accruals and deferred income
Provisions
Company
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings
Company
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings
Amortised
cost
£’000
—
—
34,266
9,340
36,682
466
1,687
41
320
Amortised
cost
£’000
5,065
—
191
1,527
Amortised
cost
£’000
4,984
301
83
1,687
30 November 2012
Held at
fair value as
available-for-sale
assets
£’000
Fair value
through
profit or loss
£’000
761
—
—
—
—
—
—
—
—
—
490
—
—
—
—
—
—
—
30 November 2013
Held at
fair value as
available-for-sale
assets
£’000
Fair value
through
profit or loss
£’000
—
—
—
—
—
—
—
—
30 November 2012
Held at
fair value as
available-for-sale
assets
£’000
Fair value
through
profit or loss
£’000
Total
£’000
761
490
34,266
9,340
36,682
466
1,687
41
320
Total
£’000
5,065
—
191
1,527
Total
£’000
4,984
301
—
—
—
—
—
—
— 83
— 1,687
WH Ireland Group plc annual report and accounts 2013
42
Notes to the financial statements
For the year ended 30 November 2013
25. Financial instruments continued
Risks
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and market risk. Market risk
comprises currency risk, interest rate risk and other price risk. The Directors review and agree policies for managing
each of these risks which are summarised below:
Credit risk
Credit risk is the risk that clients or other counterparties to a financial instrument will cause a financial loss by failing to
meet their obligations. Credit risk relates, in the main, to the Group’s trading and investment activities and is the risk
that third parties fail to pay amounts as they fall due. Formal credit procedures include approval of client limits,
approval of material trades, collateral in place for trading clients and chasing of overdue accounts. There are formal
rules around traded option business including management of margin. Additionally, risk assessments are performed
on banks and custodians.
The maximum exposure to credit risk at the end of the reporting period is equal to the balance sheet figure.
Financial assets that are neither past due nor impaired in respect of trade receivables relate mainly to bonds, equity
and gilt trades quoted on a recognised exchange, are matched in the market, and are either traded on a cash against
documents basis or against a client’s portfolio.
The credit risk on liquid funds, cash and cash equivalents is limited due to deposits being held at the Group’s main
bank with a credit rating of “A”, assigned by Standard and Poor’s.
There has been no change to the Group’s exposure to credit risk or the manner in which it manages and measures
the risk during the period.
Liquidity risk
Liquidity risk is the risk that obligations associated with financial liabilities will not be met. The Group monitors its risk
to a shortage of funds by considering the maturity of both its financial investments and financial assets (for example,
trade receivables) and projected cash flows from operations.
The Group’s objective is to maintain the continuity of funding through the use of bank facilities where necessary, which
are reviewed annually with the Group’s Banker, the Bank of Scotland. Items considered are limits in place with
counterparties which the bank are required to guarantee, payment facility limits, as well as the need for any additional
borrowings. The Directors have received a renewed facility letter from the bank, confirming sufficient facilities will be
available to the Group until 28 February 2015.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates
primarily to the Group’s long-term debt obligations with floating interest rates and amounts receivable on cash
deposits. The Group views such exposure to interest rate fluctuations as immaterial. At 30 November 2013 if bank
base rates had been 100 basis points higher, profit for the year would have been approximately £16k (2012: £18k)
lower. If bank base rates had been 100 basis points lower, profit for the year would have been higher by the same
amount.
Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from interest rate risk or currency risk) whether those changes are
caused by factors specific to the individual financial instrument or its issuer or factors affecting all similar financial
instruments traded in the market. The Group manages market price risk by monitoring the value of its financial
instruments on a monthly basis and reporting these to the Directors and Senior Management. The Group has
disposed of a number of its investments during the course of the year, which has helped mitigate risk. However, the
risk of deterioration in prices remains high whilst the market continues to be volatile. The risk of future losses is
limited to the fair value of investments as at the year end of £447k (2012: £1,251k).
WH Ireland Group plc annual report and accounts 2013
43
Notes to the financial statements
For the year ended 30 November 2013
25. Financial instruments continued
The table below summarises the maturity profile of the Group’s financial liabilities at 30 November 2013 based on
contractual undiscounted payments:
Group
Trade and other payables
Borrowings
Finance leases
Other financial liabilities
Group
Trade and other payables
Borrowings
Finance leases
Other financial liabilities
Company
Trade and other payables
Borrowings
Company
Trade and other payables
Borrowings
Payable
within
1 year
£’000
34,278
181
119
344
35,922
Payable
within
1 year
£’000
36,682
168
119
299
37,268
Payable
within
1 year
£’000
191
179
370
Payable
within
1 year
£’000
83
168
251
At 30 November 2013
Payable in
2 to 5 years
£’000
—
790
228
149
1,167
Payable
after more
than 5 years
£’000
—
558
—
—
558
At 30 November 2012
Payable in
2 to 5 years
£’000
—
594
347
62
1,003
Payable
after more
than 5 years
£’000
—
925
—
—
925
Total
contractual
payments
£’000
34,278
1,529
347
493
36,647
Total
contractual
payments
£’000
36,682
1,687
466
361
39,196
At 30 November 2013
Payable in
2 to 5 years
£’000
—
790
790
Payable
after more
than 5 years
£’000
—
558
558
Total
contractual
payments
£’000
191
1,527
1,718
At 30 November 2012
Payable in
2 to 5 years
£’000
—
594
594
Payable
after more
than 5 years
£’000
—
925
925
Total
contractual
payments
£’000
83
1,687
1,770
WH Ireland Group plc annual report and accounts 2013
44
Notes to the financial statements
For the year ended 30 November 2013
25. Financial instruments continued
Fair value measurement recognised in the statement of financial position
The following table 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 at fair value measurement are those derived from quoted prices (unadjusted) in active markets for
identical assets and liabilities;
• Level 2 fair value measurements are those derived from inputs other than the quoted price included within Level 1
that are observable for the asset or a liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
• Level 3 fair values measurements are those derived from formal valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
Financial investments available for sale
Unquoted equities
Financial instruments designated at fair value through profit and loss
Quoted equities
Other investments
Total
Financial investments available for sale
Quoted equities
Unquoted equities
Financial instruments designated at fair value through profit and loss
Quoted equities
Other investments
Total
There were no transfers between Levels 1, 2 and 3 during the year
Balance at 1 December 2011
Total gains or losses:
- In profit or loss
- In other comprehensive income
Purchases
Settlements
Balance at 30 November 2012
Total gains or losses:
- In profit or loss
- In other comprehensive income
Purchases
Settlements
Balance at 30 November 2013
At 30 November 2013
Level 1
£’000
Level 2
£’000
Level 3
£’000
—
76
—
76
—
—
—
—
347
—
24
371
At 30 November 2012
Level 1
£’000
Level 2
£’000
Level 3
£’000
15
—
405
—
420
—
—
—
—
—
—
746
—
85
831
Total
£’000
347
76
24
447
Total
£’000
15
747
404
85
1,251
Unquoted equities
£’000
309
Other investments
£’000
271
—
—
437
—
746
287
370
59
(1,115)
347
(156)
—
226
(255)
85
(36)
—
—
(25)
24
Of the total gains or losses for the period included in profit or loss, £290k (2012:£293k) relates to asset-backed
securities held at the balance sheet date. Fair value gains or losses on asset backed securities are included in ‘Fair
value gains/(losses) on investments’.
All gains and losses included in other comprehensive income relate to asset-based securities and unquoted equities
held at the balance sheet date, and are reported as ‘Valuation gains/(losses) on available for sale investments’.
WH Ireland Group plc annual report and accounts 2013
45
Notes to the financial statements
For the year ended 30 November 2013
26. Capital management
The capital of the Group comprises share capital, share premium, retained earnings and other reserves. The total
capital at 30 November 2013 amounted to £13.2m for the Group (2012: £12.3m) and £6.2m for the Company (2012:
£6.3m). The primary objective of the Group’s capital management is to ensure that it maintains a strong capital
structure in order to support the development of its business, to maximise shareholder value and to provide benefits
for its other stakeholders.
These objectives are met by managing the level of debt and setting dividends paid to shareholders at a level
appropriate to the performance of the business.
Certain activities of the Group are regulated by the FCA which is the statutory regulator for financial services business
and has responsibility for policy, monitoring and discipline for the financial services industry. The FCA requires the
Group’s resources to be adequate, that is, sufficient in terms of quantity, quality and availability, in relation to its
regulated activities.
The Group monitors capital on a daily basis by measuring movements in the Group regulatory capital requirement and
through its Internal Capital Adequacy Assessment Process (ICAAP). Compliance with FCA regulatory requirements
was maintained during the year and the Group is satisfied that there is and will be sufficient capital to meet these
regulatory requirements for the foreseeable future.
27. Treasury shares
Group
At 1 December
(Disposals)/additions (note 28)
At 30 November
Year ended
30 November
2013
£’000
782
—
782
Year ended
30 November
2012
£’000
1,069
(287)
782
At 30 November 2013 no shares in the Company were held in Treasury (2012: nil shares). At 30 November 2013 no
shares in the Company were held in the EBT (2012: nil shares) and the ESOT held 2,128,000 shares (2012:
2,128,000). This represents 9% of the called up share capital (2012: 9%).
28. Employee Benefit Trusts
The WH Ireland EBT was established in October 1998 and the WH Ireland Group plc Employee Share Ownership
Trust (ESOT) was established on 19 October 2011, both for the purpose of holding and distributing shares in the
Company for the benefit of the employees. All costs of the EBT and ESOT are borne by the Company or its
subsidiary WH Ireland Limited.
During 2011, the Company made a loan of £782k to the ESOT. 2,128,000 shares were then issued by the Company
and purchased by the ESOT for £782k. These shares were then held in trust by the ESOT under a Joint Ownership
Arrangement (the “JOE Agreement”) between the trustees of the ESOT and a former employee (the “Former
Employee”). During the year, the JOE Agreement with the Former Employee has been terminated.
During the year further Joint Ownership Arrangements (the “New JOE Agreements”) were put in place in relation to
1,500,000 shares between the trustees and a number of employees including RW Killingbeck (the “Employees”). A
further 628,000 shares remain held by the ESOT. The shares carry dividend and voting rights, although these have
been waived by all parties to the New JOE Agreements. Due to the consolidation of the ESOT into the Group
accounts, these shares are shown in Treasury (note 27). Due to the nature of these arrangements, the options
contained in the New JOE Agreements are accounted for as share based payments (note 29).
Under the New JOE Agreements, the options for the Employees to acquire the interest that the trustees of the ESOT
has in the jointly owned shares, lapses when an employee is deemed to be a Bad Leaver. If an Employee ceases to
be an employee of the Group, otherwise than in the event of critical illness or death, the Employee is deemed to be a
Bad Leaver.
WH Ireland Group plc annual report and accounts 2013
46
Notes to the financial statements
For the year ended 30 November 2013
29. Share-based payments
The Group now has three schemes for the granting of non-transferable options to employees; the unapproved
executive share option scheme (ESOP), the approved Company Share Ownership Plan (CSOP) and two Save as You
Earn Schemes (SAYE and SAYE 2). In addition, options are held in the ESOT (note 28). Details of these schemes
can be found in the Remuneration Report on pages 12 to 15.
Movements in the number of share options outstanding that were issued post 7 November 2002 and their related
weighted average exercise prices (WAEP) are as follows:
ESOP
Options WAEP
CSOP
Options WAEP
SAYE
Options WAEP
ESOT
SAYE 2
Options
WAEP Options WAEP
137,500
74.55p 986,781
52.72p 941,066
46.00p
2,128,000 36.75p
—
—
30 November 2013
—
(12,500)
—
—
74.55p (200,796)
—
—
65.33p (189,873)
—
46.00p
1,500,000 74.50p* 522,190
(40,973)
(2,128,000) 36.75p
—
125,000
—
—
71.20p 785,985
—
(14,930)
66.22p 736,263
46.00p
46.00p
—
—
1,500,000 74.50p* 481,217
—
49.20p
49.20p
—
49.20p
125,000
71.20p
—
—
—
—
—
—
—
—
ESOP
CSOP
SAYE
ESOT
Options
WAEP
Options
WAEP
Options
WAEP
137,500
74.55p
662,500
57.00p
995,846
46.00p
Options
2,128,000
WAEP
36.75p
30 November 2012
—
—
137,500
—
—
74.55p
—
324,281
986,781
—
84.50p
52.72p
(54,780)
—
941,066
46.00p
—
46.00p
—
—
2,128,000
—
—
36.75p
137,500
74.55p
—
—
—
—
—
—
Outstanding at
beginning of year
Granted
Lapsed/surrendered
Exercised
Outstanding at end
of year
Exercisable at end of
year
Outstanding at
beginning of year
Lapsed/surrendered
Granted
Outstanding at end
of year
Exercisable at end of
year
*The weighted average exercise price for the 1,500,000 share options may vary if certain performance conditions are met.
The pricing models used to value these options and their inputs are as follows:
30 November 2013
SAYE
CSOP
ESOP
Binomial
17/03/04-16/04/08 02/11/11-24/05/12
56.5-83.0
57.0-84.5
32.6332-33.2130
5
1.2993-0.7999
0.00
70.5-102.5
70.0-108.0
35.9234-38.6057
5
4.166-5.135
3.31-4.41
SAYE 2
Black Scholes Black Scholes Black Scholes Monte Carlo Black Scholes
01/05/13
60.0
49.2
41.6919
3
0.3106
0.83
06/09/10
37.0
36.8
34.2086
5
1.8875
0.00
24/11/11
49.5
46.0
35.1465
3
1.2121
0.00
28/10/13
74.5
Variable
40.0000
5
1.1900
0.67
ESOT
ESOT
Pricing model
Date of grant
Share price at grant(p)
Exercise price (p)
Expected volatility (%)
Expected life (years)
Risk-free rate (%)
Expected dividend yield
(%)
Pricing model
Date of grant
Share price at grant (p)
Exercise price (p)
Expected volatility (%)
Expected life (years)
Risk-free rate (%)
Expected dividend yield (%)
ESOP
Binomial
17/03/04-16/04/08
70.5-102.5
70.0-108.0
35.9234-38.6057
5
4.166-5.135
3.31-4.41
30 November 2012
CSOP
Black Scholes
02/11/11-24/05/12
56.5-83.0
57.0-84.5
32.6332-33.2130
5
1.2993-0.7999
0.00
SAYE
Black Scholes
24/11/11
49.5
46.0
35.1465
3
1.2121
0.00
ESOT
Black Scholes
06/09/10
37.0
36.8
34.2086
5
1.8875
0.00
A contractual right for RW Killingbeck to be granted options over 473,787 ordinary shares in the Company was
modified to create a joint ownership arrangement between RW Killingbeck and the trustees of the ESOT under which
he has the ability to exercise an option over 1,000,000 ordinary shares in the Company. The incremental fair value of
this modification was accounted for under the Monte Carlo model referenced above, which amounted to £215,000
over the vesting period and £6,000 for the year.
WH Ireland Group plc annual report and accounts 2013
47
Notes to the financial statements
For the year ended 30 November 2013
29. Share-based payments continued
The weighted average share price at the date of exercise, of the options exercised during 2013 was 46.00p.
The volatility of the Company’s share price was estimated as the standard deviations of daily historical continuously
compounded returns over a period commensurate with the expected life of the option, back from the date of grant and
annualised by the factor of the square root of 252, assuming 252 trading days per year (2012: 252 trading days). For
options granted in 2004, volatilities were calculated back to the date of the Group’s flotation in July 2000.
The risk-free rate is the yield to maturity on the date of grant of a UK Gilt Strip, with term to maturity equal to the life of
the option.
The Group recognised during the year, a total net credit of £57k (2012: charge of £325k) relating to share-based
payment transactions.
30. Leasing commitments
Finance Leases
The net carrying value of these assets at 30 November 2013 was £377,249 (2012: £498,171).
Group
The present value of future lease payments are analysed as:
Within 1 Year
Greater than 1 year but less than 5 years
Total Minimum lease payments
less Finance Charge
Present Value of Minimum Lease Payments
Group
Disclosed as:
Current Finance Lease Payable
Non - Current Finance Lease Payable
Total Finance Lease Payable
Capital
£’000
119
228
347
Interest
£’000
17
33
50
Minimum Lease payments
Capital &
Interest
£’000
136
261
397
(50)
347
2012
£’000
136
398
534
(68)
466
30 November
2013
£’000
30 November
2012
£’000
119
228
347
119
347
466
Operating Lease Commitments
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Not later than one year
Later than one year and not later than five years
Group
30 November
2013
£’000
272
216
488
30 November
2012
£’000
286
401
687
Company
30 November 30 November
2012
£’000
—
—
—
2013
£’000
—
—
—
Operating lease payments represent rentals payable for office premises and equipment. Leases are negotiated for an
average of seven years. The leases do not contain provisions for contingent rental payments, purchase options or
escalation charges and do not impose restrictions beyond the property or equipment to which they relate.
WH Ireland Group plc annual report and accounts 2013
48
Notes to the financial statements
For the year ended 30 November 2013
31. Capital commitments
Capital commitments of the Group at 30 November 2013 were £71k (2012:£nil) in relation to the refurbishment and
expansion of our office accommodation. Capital commitments of the Company at 30 November 2013 were £nil
(2012:£nil)
32. Related party transactions
Group
Transactions between the Company and its subsidiaries, which are related parties, are eliminated on consolidation
and are therefore not disclosed here.
Services rendered to related parties were on the Group’s normal trading terms in an arms’ length transaction.
Amounts outstanding are unsecured and will be settled in accordance with normal credit terms. No guarantees have
been given or received. No provision (2012: £nil) has been made for doubtful receivables in respect of the amounts
owed by related parties.
Key management personnel include Executive and Non-executive Directors of WH Ireland Group plc and all its
subsidiaries. They are able to undertake transactions in stocks and shares in the ordinary course of the Group’s
business, for their own account and are charged for this service, as with any other client. The transactions are not
material to the Group in the context of its operations, but may result in cash balances on the Directors’ client accounts
owing to or from the Group at any one point in time. The charges made to these individuals and the cash balances
owing from/due to them are disclosed in the table below. There are no other material contracts between the Group
and the Directors.
The following table sets out the transactions which have been entered into during the year together with any amounts
outstanding:
Associates
Key management personnel
Other related parties
Services
rendered to
related parties
£’000
—
—
1
18
—
—
Purchases/
services from
related parties
£’000
—
—
—
—
—
—
Amounts
owed by
related parties
£’000
—
—
—
—
—
—
Amounts
owed to
related parties
£’000
—
—
3
431
—
—
2013
2012
2013
2012
2013
2012
The total compensation of key management personnel is shown below:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payment
Year ended
30 November
2013
£’000
868
74
—
12
954
Year ended
30 November
2012
£’000
1,013
55
—
100
1,168
Company
The Parent Company receives interest from subsidiaries in the normal course of business. Total interest received
during the year was £26k (2012: £31k). In addition, the Parent Company received a management charge of £613k
(2012: £607k) from its subsidiary WH Ireland Limited. Amounts outstanding at 30 November 2013 and at 30
November 2012 between the Parent Company and subsidiaries are provided in notes 19 and 22.
33. Contingent liabilities
The Group has contingent liabilities in respect of indemnities (principally in respect of certified stock transfers and
share certificates) given in the ordinary course of business. No material loss is considered likely to arise in respect of
these contingent liabilities.
34. Events after the balance sheet date
A final dividend of 1.5p (2012: 0.5p) was proposed by the Board, payable on or before 11 April 2014 to shareholders
on the Company’s register at the close of business on 07 March 2014.
WH Ireland Group plc annual report and accounts 2013
49