W.H. Ireland Group PLC
Annual Report and Financial Statements
31 March 2019
Registered Number 03870190
Contents
1 Company information
2 Chairman’s statement
3 Chief executive statement
5 Strategic report
10 Director’s report
14 Corporate governance
22 Remuneration report
25 Statement of Director’s responsibilities
26
Independent Auditor’s report
31 Consolidated statement of comprehensive income
32 Consolidated and Company statement of financial position
34 Consolidated and Company statement of cash flow
36 Consolidated and Company changes in equity
38 Notes to the financial statements
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
Company information
Directors
P A Wale (appointed 17 October 2018)
P Tansey (appointed 21 June 2019)
T M Steel
V G Raffé
R E M Lee
J H D Carey (resigned 13 May 2019)
H R Percy (resigned 20 July 2018)
D J Cowland (resigned 20 December 2018)
R W Killingbeck (resigned 27 September 2018)
Nominated Adviser
Spark Advisory Partners Limited
5 St. John’s Lane
London
EC1M 4BH
Broker
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
Bankers
Bank of Scotland plc
2nd Floor, 1 Lochrin Square
92-98 Fountainbridge
Edinburgh
EH3 9QA
Company Secretary
K L Mitchell
Registered Office
24 Martin Lane
London
EC4R 0DR
Company Number
03870190
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
1
Chairman’s statement
For the year ended 31 March 2019
This year’s Annual Report returns to the traditional 12 month period to 31 March 2019, following last year’s 16 month
extended period.
REVIEW AND OUTLOOK
The past trading period has been extremely challenging and accordingly, the Board has implemented a significant change
of senior executive management, with the appointments of a new Chief Executive Officer, new Finance Director, new
Head of Private Wealth Management and new Head of Compliance and Risk. The total loss for the period is £7.2m before
non-cash impairments and one-off charges of £4.1m. These one off costs reflect the actions which we have taken to
address an excessively high head count, since addressed in the new year, and the cost of replacing senior executives with
the newly recruited personnel identified above to drive change. In addition, the migration of private clients to the new
SEI platform has experienced many teething problems which have led to duplicated costs as the project has been
integrated. The carrying value of intangible assets created by the acquisitions in earlier years of two teams of investment
managers has also been written down, creating a non-cash loss. Finally, the uncertain economic and political climate in
the UK as a result of Brexit has led to a reduction of new equity issues in the London stockmarket, which has affected our
profitable corporate broking business.
Following a difficult period, I am pleased to report that a number of initiatives taken by the new senior management have
led to a sharp reduction in operating losses in the first quarter of the current year end to March 2020, and we look forward
to further improvements in operating performance as the year progresses.
NEW LEADERSHIP
The Board is delighted with the progress that Phillip Wale has achieved since his appointment as CEO in late 2018: he has
moved quickly to reinvigorate the business by building a new executive team with extensive sector experience and a
strong track record in change management. In addition, he has secured the support of our strong shareholder base and
raised £4.95m of additional equity capital, and introduced a clear focus on cost control. As a result, these initiatives have
improved morale across all departments of the firm.
I am grateful for the support of our existing and new shareholders, which I believe has placed the Group in a far stronger
capital position than before, which should help the CEO and his management team to achieve the Board’s aim to restore
the Group to profitability.
BOARD
I am delighted to welcome to the Board of Directors Philip Tansey as our new CFO, as well as Simon Lough and Philip
Shelley, whom are appointed as Non-Executive Directors, subject to FCA approval.
Simon Lough was Chief Executive of the Heartwood Wealth Management business from 2008 to 2014, having previously
headed both the client and investment teams, and was responsible for building up its London office.
Philip Shelley was previously Vice Chairman at Barclays Investment Bank. Before Barclays, he ran broking and ECM in the
UK for Goldman Sachs and was Head of Corporate Broking at UBS. During his career of 24 years, Philip advised and raised
equity for a wide of range of UK public and private companies.
I offer thanks to Jonathan Carey for his tenure as Non-Executive Director for three years and we wish him well for the
future.
Finally, I would like to acknowledge on behalf of the Board the continued hard work of all our employees during what has
been a challenging year but one that has, I believe, laid the foundations for a recovery in operating performance.
Tim Steel
July 2019
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
2
Chief executive statement
For the year ended 31 March 2019
OVERVIEW
This is my first annual report as Chief Executive Officer and with the benefit of 8 months from joining to the year ended
of 31 March 2019 I have had time to conduct a full review of the business.
Financially, the performance of WH Ireland has been challenging with a significant loss for the year ended 31 March 2019
of £11.3m (2018: £2.9m), after exceptional costs, including one off costs of £1.5m and impairment charges of £2.6m that
do not impact cash or regulatory capital. This loss comes despite a profitable Corporate and Institutional Broking
performance. Furthermore, the control environment across the Group required remedial action, under the direction of
our new Head of Compliance and Risk, Yen Chang, and that has generated further cost implications, which are discussed
below.
THE YEAR 2018/2019
Comparatives with the extended prior reporting period of 16 months to 31 March 2018 are difficult. However,
discretionary managed assets continue to increase as a proportion of the total funds under management (2019: 47%,
2018: 42.1%). But at the same time there has been a marked decline in the commission paying elements of the wealth
management business in line with the wider experience of the market, struggling as it is with low volumes and worries
concerning EU withdrawal. This, combined with a decline in new issuance activity for the CIB division, has driven revenue
down by more than explained simply by a shorter accounting period alone. Exceptional items of £4.1m (2018: £2.5m)
incurred by the Group have increased significantly, details of which are set out in the Chairman’s Statement. Overall,
whilst the Corporate and Institutional business remains profitable, the Wealth Management division has been loss-
making.
LEADERSHIP
I have made key appointments:
Philip Tansey joined late in the year as CFO/COO and comes with thirty years’ experience in financial services
across a number of regulatory authorities. He has particular experience in clean-up and turnaround challenges;
Stephen Ford is our new Head of Wealth Management with thirty years’ experience of managing and growing
wealth management businesses;
Yen Chang, our new Head of Compliance and Risk. She brings the correct balance of experience and dedication
to maintain a serious control framework and build excellent relationships with our regulators and other
authorities.
Adam Pollock remains Head of our Corporate and Institutional Broking business, and intends to build on the success of
the last year by continuing to grow our client base and completing both private and public market transactions.
BOARD
I believe it is critical for the success of WH Ireland to have a Board that comprises people with appropriate skills and
experience across a number of relevant business and control areas, and which provides effective challenge and support
in equal measure. I echo my Chairman’s sentiments in thanking Jonathan Carey and look forward to welcoming both
Simon Lough and Philip Shelley to the board as Non-Executive Directors (both appointments are still subject to FCA
approval).
CLIENTS
Our clients are at the heart of everything that we do, and providing excellent service to our corporate, institutional and
private clients remains our priority.
STAFF
There are excellent people within the Group; I have made changes to the head count to reflect the new, simplified
business model and believe that we are now at a good size for growth. I thank all the members of staff for their
commitment and hard work in the past and for the years ahead.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
3
Chief executive statement
For the year ended 31 March 2019
SHAREHOLDERS
I am delighted with the support, both in terms of capital investment and guidance, received from our major shareholders
and thank the new investors who joined in our most recent placing in March 2019 for their backing.
CAPITAL
The raising of £4.95m in March 2019 has replenished regulatory and working capital. Cash at the year-end date of 31
March 2019 was £7.7m (2018: £7.3m). The group has no debt. Against the forecasts set out and agreed with the business
and approved by the Board, the Directors believe that these levels are sufficient to take WH Ireland to the next phase of
success.
BUSINESS REVIEWS
Wealth Management (WM)
We are progressing with a number of significant changes to the WM division. The first stage of change to WM, under
Stephen Ford’s direction, has three key strands. First, to reduce the cost base which we believe has historically been too
high. Second, to energise the project of retiring our legacy platform systems and custodians. Finally, to simplify and
enforce our standard charging structure in order to improve the quality of earnings. All these initiatives are in progress
and further updates will be provided in due course.
Corporate and Institutional Broking (CIB)
CIB continues to enjoy a low fixed cost model with a solid recurring-revenue client base. We continue to build our
reputation for raising growth capital for public and private companies.
Against a highly uncertain market backdrop, the division is well positioned to take full advantage of the structural changes
being experienced, including its approach post MiFID II. We are actively looking to recruit further high quality people into
the division in order to build CIB over the coming years.
LOOKING FORWARD
I believe that we have made significant changes and the focus for the new management team is to build what we believe
is a good business with good clients and revenue streams; to manage our costs effectively; enhance the revenue
generated by the existing business; evidence the effectiveness of our control framework across everything we do; and
engage proactively with all stakeholders.
The first quarter of our new financial year has started well on all fronts. Our costs are down as is our total Group
headcount (at June 2019: 159, down from 178 at 31 March 2019 and 192 at 31 March 2018) and revenue initiatives are
well advanced, as are the now re-energised projects to eliminate inherited legacy systems, processes and associated
costs.
I look forward with cautious optimism to the coming year.
P Wale
July 2019
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
4
Strategic report
For the year ended 31 March 2019
OVERVIEW
The WH Ireland Group has two principal operating subsidiaries, WH Ireland Limited and WH Ireland (IOM) Limited. WH
Ireland Limited consists of two business divisions: Wealth Management, which provides bespoke wealth management
solutions and independent financial advisory services to retail clients; and Corporate and Institutional Broking which
provides corporate finance, advisory and broking services to small and mid-cap corporate clients, and stockbroking and
research services to its institutional client base. WH Ireland (IOM) Limited provides wealth management services.
The Group’s income is predominantly derived from activities conducted in the UK and the Isle of Man with a number of
retail, institutional and corporate clients, which are situated worldwide.
At the year end, the Group had 171 staff (2018: 184) in the UK and 7 (2018: 8) in the Isle of Man.
STRATEGY SUMMARY
The Group’s strategic focus remains on becoming the corporate broker of choice in the small and mid-cap company
segment and a leading advice-driven wealth management service provider to retail clients.
The strategy is focused on strengthening our corporate client list and increasing the discretionary assets under
management in order to maximise the Group’s recurring revenue through the generation of corporate retainer income
and wealth management fees.
FINANCIAL OVERVIEW
A SUMMARY OF THE STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR IS SET OUT BELOW:
Revenue
Administrative expenses
Expected credit loss
Operating loss
Operating loss before exceptional items
Exceptional items
Operating loss after exceptional items
Other income and charges
Loss before tax
Tax
Loss after tax
Year to
31 March 2019
£’000
23,680
(33,419)
(641)
(10,380)
(6,267)
(4,113)
(10,380)
230
(10,150)
(1,176)
(11,326)
16 months to
31 March 2018
£’000
36,416
(40,389)
(128)
(4,101)
(1,595)
(2,506)
(4,101)
387
(3,714)
769
(2,945)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
5
Strategic report
For the year ended 31 March 2019
A RECONCILIATION OF THE ADJUSTED OPERATING LOSS IS SET OUT BELOW:
Operating loss
Add back of one off charges:
Project Discovery *
Restructuring **
Compliance & regulatory projects***
MiFID II****
Goodwill and intangible assets*****
Adjusted operating loss
Notes:
Year to
31 March 2019
£’000
(10,380)
442
835
230
-
2,606
(6,267)
16 months to
31 March 2018
£’000
(4,101)
1,527
718
-
261
-
(1,595)
**As announced on 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its Private Wealth
Management back office operations and move to a “Model B” arrangement. On account of a number of unforeseen obstacles, significant cost has been incurred
in both internal and external resources dedicated to this project (“Project Discovery”) as the project moves to conclude the transfer of clients and assets from
the prior legacy platforms over to SEI.
**During the period ended 31 March 2018 and 2019 there were a number of changes within the senior management team and several external hires were
made. The costs of these changes, in respect of both short term consultancy costs and fixed employment related costs, are considered by the Board to be non-
trading and exceptional in nature.
*** During the year ending 31 March 2019, the Group incurred various costs in relation to one off regulatory reports.
****During the period to 31 March 2018 the Group incurred various costs in preparation for compliance with MiFID II.
*****See notes 13 &14
FINANCIAL ANALYSIS
The total operating loss, after exceptional items, has increased in the year-ended 31 March 2019 by £6.3m to £10.4m.
(2018: £4.1m).
Identification and analysis of the component parts of that increase of £6.3m is difficult due to the differing lengths of
accounting period. Annualising the results of the prior-period ended 31 March 2018 (i.e. by applying a factor of 12/16th),
whilst not theoretically perfect on account of, amongst other factors, seasonality, does however assist in that analysis.
An annualised restatement would result thus:
Line Item
Revenue
Administration expenses
(before Exceptional items)
Revised annualised
Operating loss before
exceptional items
Exceptional items
Total Operating loss
after Exceptional items
Actual year
ended 31 March 2019
£’000
Theoretically annualised
‘year’ ended 31 March 2018
£’000
23,680
29,947
(6,267)
(4,113)
(10,380)
27,312
28,508
(1,196)
(2,506)
(3,702)
Differences
£’000
(3,632)
(1,439)
(5,071)
(1,607)
(6,678)
The changes in the year to 31 March 2019 compared to the ‘annualised’ results of 2018 were as follows:
Revenue: The CIB division, despite remaining profitable and improving retainer fee revenue in the year, suffered lower
transactional success fees of approximately £1.0m. Commissions generated by the WM division were lower by £2.6m.
Both resulted directly from the impact of increasingly poor market conditions as witnessed by the declines in volume
traded across the London stock exchanges in both trading and in corporate transactions.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
6
Strategic report
For the year ended 31 March 2019
Expenses: Additional operational costs were incurred as the Group struggled with an excessive cost-base worsened by
the additional on-going costs of addressing legacy systems with contract staff and other related expenses.
Exceptional Items: The costs associated with the retirement of legacy systems and the MiFID II project declined but there
were increases in costs that were neither affected cash nor regulatory capital; these costs included the determination
that the carrying value of goodwill and intangible assets should be reduced by £2.6m.
Balance Sheet: Operational losses incurred in the year of £6.0m, Exceptional items, including the decision to impair the
carrying value of goodwill and intangible assets, of a total of £4.0m and, the elimination of deferred tax credits recognised
in prior periods of £1.1m totalled £11.1m. This was offset by the proceeds of raising fresh equity of £7.0m resulting in
the net decline of £4.1m in Total Equity at 31 March 2019 to £8.8m (2018: £12.9m).
WEALTH MANAGEMENT
The Wealth Management division incorporates both investment management services and advice on Wealth Planning.
These services are offered from offices across the UK including London, Manchester, Cardiff, Poole and Milton Keynes.
International clients are serviced from the Isle of Man office.
As the complexity of financial markets and advice increases, we are able to offer specific Wealth Planning expertise in
areas such as pensions and inheritance planning. We also work closely with third party advisors in helping our mutual
clients achieve their financial goals.
The strategy for the ongoing growth in this division is to focus our efforts on discretionary portfolios. This will be achieved
by continued personal referrals, selective recruitment of individuals and teams with existing client relationships and, in
time, corporate acquisitions of Wealth Management businesses.
CORPORATE & INSTITUTIONAL BROKING
WH Ireland specialises in providing corporate finance and broking services to smaller companies across a wide range of
industry sectors and geographies. It is the fourth largest Nominated Adviser (NOMAD) for AIM quoted companies and
currently represents 77 corporate companies. It has a highly experienced team drawn from a range of professional
backgrounds and that provides strategic, technical and regulatory advice. Areas of specialism for this division include pre-
IPO fundraising, IPOs and secondary issues, mergers and acquisitions, disposals, restructuring and tender offers. It has
also established a track record for raising capital for private companies.
As an integrated Institutional Stock Broker, WH Ireland also provides award winning research, Institutional Sales and
Investor Relations and market making.
The division’s focus remains upon providing market leading advice to all of our corporate and institutional clients and
enhancing our retained client list.
In response to the inevitable regulatory change, the Corporate and Institutional Broking division has received many
plaudits from our clients for their clear and concise interpretation of the research distribution rules under MiFID II. We
have been alert to the opportunities that have presented themselves as a result of this change and this has led to an
encouraging number of corporate client enquiries to understand how the division can benefit their reach in the market.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
7
Strategic report
For the year ended 31 March 2019
KEY PERFORMANCE INDICATORS (KPI’s)
1. RATIO OF ADJUSTED OPERATING LOSS BEFORE TAX TO TOTAL REVENUE
31 March 2019
%
31 March 2018
%
Ratio of adjusted operating loss before tax to revenue
(26.47)
(3.30)
2.
FUNDS UNDER MANAGEMENT AND ADVICE
Discretionary assets
Advisory assets
Execution only assets
Total
3. RECURRING INCOME STREAMS
31 March 2019
£m
31 March 2018
£m
1,175
556
777
2,508
1,081
639
844
2,564
12 months to 31 March
2019
£m
16 months to 31
March 2018
£m
Value of recurring income
14.0
18.0
4. CORPORATE BROKING PERFORMANCE
Number of transactions
Money raised
Retained corporate clients
12 months to 31 March
2019
16 months to 31
March 2018
37
£51m
77
37
£61m
84
DIVIDEND
The Board does not propose to pay a dividend in respect of the financial year (2018: £nil).
STATEMENT OF FINANCIAL POSITION AND CAPITAL STRUCTURE
Maintaining a strong and liquid statement of financial position remains a key objective for the Board, alongside its
regulatory capital requirements. Total net assets were £8.8m (2018: £12.9m) and net current assets £6.9m (2018: £8.1m).
Cash balances at year-end were £7.7m (2018: £7.3m).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
8
Strategic report
For the year ended 31 March 2019
RISKS AND UNCERTAINTIES
Risk appetite is established, reviewed and monitored by the Board. The Group, through the operation of its Committee
structure, considers all relevant risks and advises the Board as necessary. The Group maintains a comprehensive risk
register as part of its risk management framework encouraging a risk-based approach to the internal controls and
management of the Group. The Group operates an Internal Audit coordinated by the Finance department. Internal Audit
reports directly to the Audit Committee.
Liquidity and capital risk
As noted in the Chief Executive’s Report, the Group’s focus is on stabilising the business, managing its costs and returning
it to profitability whilst increasing the proportion of recurring revenue including the building of its discretionary fee paying
client base to better fit the regulatory environment in which it operates.
The Group has a predominantly fixed cost base which in recent years has been allowed to increase leading to the recorded
losses. Action has been taken to achieve operational efficiencies and to aid the return to profitability.
To mitigate risk, the Board continues to focus on ensuring that the financial position remains robust and suitably liquid
with sufficient regulatory capital being maintained over the minimum common equity tier 1 capital requirements.
Regulatory capital and liquid assets are monitored 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 as a result of a breakdown or
interruption, from either internal or external sources, of the business of the Group. This risk is mitigated in part by the
number of branches across the UK and the Group having business continuity and disaster recovery arrangements
including business interruption insurance.
The Group seeks to ensure that its risk management framework and control environment is continuously evolving which
Compliance and Risk monitor on an ongoing basis.
Credit risk
The Board takes active steps to minimise credit losses including formal new business approval, and the close supervision
of credit limits and exposures and the proactive management of any overdue accounts. Additionally, risk assessments
are performed on an ongoing basis on all deposit taking banks and custodians and our outsourced relationships.
Regulatory risk
The Company operates in a highly regulated environment both in the UK and in the Isle of Man. The Group has Internal
Audit and Compliance and Risk functions resourced with appropriately qualified and experienced individuals. 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 25 of the financial statements.
By Order of the Board
P Tansey
Finance Director
31 July 2019
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
9
Directors’ report
For the year ended 31 March 2019
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Independent Auditors’ Report, for the year ended 31 March 2019.
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 March 2021 which considers 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 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, the company can continue to meet its regulatory capital common equity tier 1 requirements.
The Directors most recently renewed the Group’s banking facilities in February 2015. As an evergreen facility there is no
requirement to update the agreement annually, although a formal review of facilities is undertaken at least annually.
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
The Directors do not propose to pay a dividend for 2019 (2018: £nil) (note 10).
Directors
The Directors who held office during the year and their interest in the shares of the Company were as follows:
RW Killingbeck (resigned 27 September 2018)
DJ Cowland (resigned 20 December 2018)
TM Steel
REM Lee
JHD Carey (resigned 13 May 2019)
HR Percy* (resigned 20 July 2018)
VG Raffé
P A Wale (appointed 17 October 2018)
Year ended
31 March 2019
16 months ended
31 March 2018
-
10,000
25,000
30,267
-
-
-
32,500
910,000
10,000
-
30,267
-
6,525,079
-
-
* HR Percy was the nominated Director of KEH Group who previously held 6,525,079 ordinary shares in the Company. KEH Group disposed of their
total shareholding on 20 July 2018, on which date HR Percy resigned.
Further details of Directors’ service contracts, remuneration, share interests and interests in options over the Company’s
shares can be found in the Remuneration Report on page 24.
No Directors holding office at the end of the financial year had any disclosable interest in the shares of other Group
companies.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
10
Directors’ report
For the year ended 31 March 2019
MAJOR SHAREHOLDINGS
At the date of 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:
Polygon Global Partners LLP
Oceanwood Capital Management LLP
M & G Investments Limited
Ordinary shares
12,793,156
7,709,094
6,415,444
%
29.84
17.98 *
14.96
* In addition, Oceanwood have disclosed an additional investment discretion (but do not exercise voting rights) over a further 1.19%.
In addition, the Company’s Employee Share Ownership Trust, which is operated by Sanne Trust Company Limited, holds
2,139,500 shares as trustees. All rights to receive dividends in respect of these shares have been waived. Further details
are in notes 28 and 29 of the Financial Statements.
POLITICAL CONTRIBUTIONS
The Group and Company did not make any political donations or incur any political expenditure during the year (2018:
nil).
QUALIFYING THIRD PARTY INDEMNITY PROVISIONS
The Company has arranged qualifying third party indemnity for all of its directors.
EMPLOYEES
Our employees are vital to the success of the Group. The Group and its 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.
EVENTS AFTER THE REPORTING PERIOD
There are no significant events after the reporting period.
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 all the resolutions 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.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
11
Directors’ report
For the year ended 31 March 2019
DIRECTOR’S BIOGRAPHIES
Phillip Wale, Chief Executive Officer
Phillip began his career in UK Gilt Edged & convertible bonds, spending ten years at Goldman Sachs in New York and then
London, as co-head of pan-European equities. He managed the equity businesses at Commerzbank and then at Knight
Securities, where he was appointed European CEO. In 2004 he moved into fund management as CIO of a multi-strategy
hedge fund, returning to the sell-side in 2007 with Collins Stewart working closely with the expansion of the wealth
management product. Phillip joined Seymour Pierce, the corporate & institutional broker and wealth manager, in 2010
and was appointed its Chief Executive Officer in 2011. Between 2012 and 2016 he was Chief Executive Officer of Panmure
Gordon & Co. Prior to joining WHIreland in August 2018, Phillip was Head of Fixed Income (Europe) at Cantor Fitzgerald
Europe.
Philip Tansey, Chief Finance Officer
Between 2011 and 2017, Philip, a Chartered Accountant, was Chief Financial Officer of Panmure Gordon and before that,
from 2008, was Managing Director of the NASDAQ quoted US inter-dealer Broker, BGC Partners Inc. During his career he
has also worked at Deutsche Bank, CSFB, CIBC Wood Grundy, Salomon Brothers and BDO Stoy Hayward.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
12
Directors’ report
For the year ended 31 March 2019
Tim Steel, Non-Executive Director, Chairman
Tim worked for Robert Fleming & Co between 1974-1979, firstly as an Investment Research Analyst before becoming an
Investment Manager. In 1980, he moved to Cazenove & Co where he worked in a variety of roles including Head of UK
Institutional Sales and latterly as vice- Chairman of Cazenove Capital Management, before retiring in 2009. In 2008 he
became non-Executive Chairman of Castle Alternative Invest, a fund of hedge funds, listed on the Swiss Stock Exchange.
Since 2013, he has been Chairman of a private equity boutique, Committed Capital, financing small UK private companies.
Tim was appointed to the Board of WHIreland in March 2014.
Richard E. M. 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 WHIreland Limited.
Victoria Raffé, Non-Executive Director
Victoria Raffé has had an extensive City career, latterly as a Regulator with positions as Director of the Authorisations
Division for the Financial Conduct Authority (“FCA”), membership of both the eight strong Executive Committee of the
FCA and the Executive Regulatory Issues Committee. In addition Victoria Chaired the Regulatory Transaction Committee.
Previously she held various senior level roles with the Financial Services Authority (“FSA”). She currently holds two
banking non-executive directorships – one with Growth Street Exchange Limited P2P Lender, and the other with Starling
Bank. Victoria was appointed to the Board of WHIreland in January 2017.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
13
Corporate governance
The Directors of the Company have always endeavoured to apply the highest level of Corporate Governance, and has
done so by seeking to comply with the QCA Corporate Governance Code for Smaller Companies. On 8 March 2018, the
London Stock Exchange issued revised rules for AIM-quoted companies, within which there is a requirement for AIM
quoted companies to apply a recognised corporate governance code from September 2018 and incorporate details of
how it complies with that Code in both its Annual Report and on its website.
The Company has chosen to apply the QCA Corporate Governance Code published in April 2018 (the “QCA Code”) and
this Corporate Governance report is based upon the QCA Code.
The principal means of communicating the Company’s application of the QCA Code are this Annual Report (pages 14 –
19) and the Corporate Governance section on the Company’s website (www.whirelandplc.com).
This statement has been collectively prepared by the Board of Directors of the Company (the “Board”). The Board
welcomes the new QCA Corporate Governance Code as a useful guide to assist in articulating how the Company
approaches and applies good corporate governance.
This report sets out the Company’s application of the Code, by the Board, and where appropriate, cross references other
sections of the Annual Report. Where the Company’s practices depart from the expectations of the Code, the Board has
given an explanation as to why.
The QCA Code is constructed around ten broad principles and a set of disclosures which notes appropriate arrangements
for growing companies and requires companies who have adopted the QCA Code to provide an explanation about how
they are meeting those principles through the prescribed disclosures. In the table below, the Board explains how it has
applied them.
QCA Code Principle:
How it should be applied:
How the Company applies it:
1
Establish a strategy
and business model
which promote long-
term
for
shareholders
value
The board must be able to express a shared
view of the company’s purpose, business
model and strategy. It should go beyond the
simple description of products and
corporate structures and set out how the
company intends to deliver shareholder
value in the medium to long-term. It should
demonstrate that the delivery of long-term
growth is underpinned by a clear set of
values aimed at protecting the company
from unnecessary risk and securing its long-
term future.
is to
Page (5) of the Company’s Annual Report for
the period ended 31 March 2019 sets out its
principal strategy, which
focus on
continuing to grow the business across the two
business divisions of Wealth Management and
Corporate and Institutional Broking, with the
ultimate objective of becoming the corporate
broker of choice in the small and mid-cap
company segment and a leading advice-driven
wealth management service provider to retail
clients.
2
Seek to understand
meet
and
shareholder needs
and expectations
Directors must
of
understanding
expectations of all elements of
company’s shareholder base.
develop
the
a
needs
The risks that attach to this strategy and how
such risks are mitigated are set out at pages (64
to 69) of WHI’s annual report for the period
ended 31 March 2019.
good
and
the
The Board is committed to regular shareholder
dialogue with both its institutional and retail
shareholders.
The board must manage shareholders’
to
expectations
understand
behind
shareholder voting decisions
the motivations
should
seek
and
The principal opportunity for the Board to meet
shareholders is at the Company’s AGM, to
which shareholders are encouraged to attend.
The Company also has a dedicated email
address which investors can use to contact the
Company. The CEO is responsible for reviewing
all communications received from shareholders
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
14
Corporate governance
3.
into account
Take
stakeholder
wider
and
social
responsibilities and
their implications for
long-term success
both
groups
and
relies upon good
Long-term
success
range of different
relations with a
internal
stakeholder
(workforce)
(suppliers,
customers, regulators and others). The
board needs to identify the company’s
stakeholders and understand their needs,
interests and expectations.
external
Where matters that relate to the company’s
impact on society, the communities within
which it operates or the environment have
the potential to affect the company’s ability
to deliver shareholder value over the
medium to long-term, then those matters
must be integrated into the company’s
strategy and business model.
Feedback is an essential part of all control
mechanisms. Systems need to be in place to
solicit, consider and act on feedback from
all stakeholder groups
4.
Embed effective risk
management,
both
considering
opportunities
and
threats, throughout
the organisation
The board needs to ensure that the
company’s risk management framework
identifies and addresses all relevant risks in
order to execute and deliver strategy;
companies need to consider their extended
business, including the company’s supply
chain, from key suppliers to end-customer.
Setting strategy includes determining the
extent of exposure to the identified risks
that the company is able to bear and willing
to take (risk tolerance and risk appetite).
and determining
response.
the most appropriate
To date, all responses from shareholders as to
the procedures in place for dialogue have been
positive.
The Company’s assessment of its key resources
and relationships is set out on page (11) of
WHI’s annual report for the period ended 31
March 2019.
The Directors believe that, in addition to its
shareholders, the main stakeholders of the
Company are its clients, its employees, the
communities in which it operates and its three
regulatory bodies (the London Stock Exchange,
the FCA and the Isle of Man’s FSA).
The Company dedicates significant time to
understanding and acting on the needs and
requirements of each of these Groups by way of
meetings dedicated to obtained feedback. The
Company
is also a member of certain
organisations, such as the Quoted Companies
Alliance, which encourages and facilitates active
dialogue with some of the Company’s key
stakeholders.
relationship with
Linked to this, the Company strives to have a
strong
local
communities in which it operates and some of
those initiatives it invests in are set out in the
Company’s CSR section of its website.
those
Pages (64 to 69) of the Company’s Annual
Report for the period ended 31 March 2019 set
out the risks to the Company’s business and
outlook, and how such risks are minimised.
Given the areas
operates, risk is a particular focus.
in which the Company
The Company employs a Head of Compliance
and Risk, which is a full time position within the
Company and who is tasked with assessing,
ranking and addressing all risk in and threats to,
the business. These risks are recorded within
the Company’s risk register and cover all
clients,
categories
competition, finance, technical and legal. Each
risk is ranked on impact and likelihood and
mitigating strategies are identified.
personnel,
including
In addition, the Executive Committee which is
formed of the Executive Directors, the Heads of
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
15
Corporate governance
5. Maintain the board
well-
a
as
functioning,
balanced team
by the chair
led
legal obligation
The board members have a collective
responsibility and
to
promote the interests of the company, and
are collectively responsible for defining
arrangements.
corporate
Ultimate responsibility for the quality of,
and approach to, corporate governance lies
with the chair of the board.
governance
The board (and any committees) should be
provided with high quality information in a
timely manner
facilitate proper
to
assessment of the matters requiring a
decision or insight.
The board should have an appropriate
balance between executive and non-
executive directors and should have at least
two independent non- executive directors.
Independence is a board judgement.
(e.g. audit,
The board should be supported by
committees
remuneration,
nomination) that have the necessary skills
and knowledge to discharge their duties
and responsibilities effectively.
Directors must commit the time necessary
to fulfill their roles.
the business divisions, a representative from HR
and the Head of Compliance and Risk meet
monthly to assess and test these risks; and
discuss any new risks arising in the day to day
business.
The risk register and minutes
from the
Executive Committee are reviewed in Board
meetings on a bi-monthly basis. The Directors
receive progress reports from the Head of
Compliance and Risk directly, to enable them to
assess the effectiveness of the systems in place.
These risks and systems are also tested by the
Company’s external auditors on an annual
basis.
is responsible for running the
The Board
Company, maintaining all
internal control
systems and considering all major business and
financial risks.
All strategic decisions are
decided by the Board acting collectively.
The Board consists of three Non-Executive
Directors and two Executive Directors. It is
considered that Victoria Raffé and Tim Steel are
independent Non-Executive Directors.
It is acknowledged that Richard Lee has been a
Director for more than 15 years and therefore
he is no longer deemed to be an independent
Director for reason of
length of service.
However, the Company recognises the value
that Richard Lee adds to the Board from his
depth of experience and believes this
is
appropriately balanced by the two other Non-
Executive Directors who have been appointed
within the last few years.
All Executive Directors are full time Directors of
the Company and the Non-Executive Directors
are expected to commit at least one day a
month to the Company in addition to their
attendance at board meetings.
The Board meets 6 times a year. The attendance
record of each director is set out on the
Company’s website.
Board minutes and
related papers are
circulated to Directors in good time ahead of
the relevant Board meeting(s).
The Board has established audit, remuneration,
risk, nomination and executive committees
which meet regularly in accordance with their
terms of reference. The details of these
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
16
Corporate governance
6
Ensure that between
them the directors
have the necessary
up-to-date
experience,
and capabilities
skills
The board must have an appropriate
balance of sector, financial and public
markets skills and experience, as well as an
appropriate balance of personal qualities
should
and
understand and challenge its own diversity,
including gender balance, as part of its
composition.
capabilities. The board
The board should not be dominated by one
person or a group of people. Strong
personal bonds can be important but can
also divide a board.
As companies evolve, the mix of skills and
experience required on the board will
change, and board composition will need to
evolve to reflect this change
committees, including their terms of reference
and composition, are set out below, in this
Corporate Governance Report.
The Company has five Directors being Tim
Steel, Phillip Wale, Philip Tansey, Richard Lee
and Victoria Raffé. Details of these Directors
and their relevant experience, skills and
personal qualities are set out at pages (12) to
(13) of the Company’s Annual Report for the
period ended 31 March 2019.
The Company periodically holds briefings for
the Directors covering regulations that are
relevant to their role as Directors of an AIM-
quoted company.
and
and
Compliance
The Company also has a dedicated Human
Resources
Risk
departments and also uses the services of a
number of external training providers. The
Directors therefore have access to a suite of
training products including online training, in-
house seminars and external training courses to
ensure the Directors skills are kept up to date.
7.
Evaluate
board
performance based
on clear and relevant
objectives,
seeking
continuous
improvement
The board should regularly review the
effectiveness of its performance as a unit,
as well as that of its committees and the
individual directors.
The board performance review may be
carried out internally or, ideally, externally
facilitated from time to time.
The review should identify development or
mentoring needs of individual directors or
the wider senior management team.
It is healthy for membership of the board to
be periodically
refreshed. Succession
planning is a vital task for boards. No
member of the board should become
indispensable
The Board is supported by Katy Mitchell as
Company Secretary and Head of Legal. Katy is a
qualified corporate lawyer, a member of ICSA
and a senior Qualified Executive within the
Corporate Broking department of the Group.
The Board also engages external legal advisers
them, where appropriate and
to advise
necessary on the legal aspects of any ongoing
regulatory queries.
the performance of
Evaluation of
the
Company’s Board has historically been
implemented in an informal manner, with the
exception of the Executive Directors who are
assessed annually on performance by the
Chairman.
In the coming year however, the Board will
formally review and consider the performance
of each Director at or around the time of the
Company’s Annual General Meeting in 2020
using a process which
is currently under
development. The process and its results and
recommendations will be published at a future
date.
The Nomination Committee is required to give
recommendations to the Directors where there
are vacancies or where it is felt that additional
directors should be appointed. For new
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
17
Corporate governance
8.
Promote a corporate
culture that is based
on ethical values and
behaviours
The board should embody and promote a
corporate culture that is based on sound
ethical values and behaviours and use it as
an asset and a source of competitive
advantage.
The policy set by the board should be visible
in the actions and decisions of the chief
executive and the rest of the management
team. Corporate values should guide the
objectives and strategy of the company.
The culture should be visible in every aspect
of the business,
including recruitment,
nominations, training and engagement. The
performance and reward system should
endorse the desired ethical behaviours
across all levels of the company.
culture
corporate
The
be
recognisable throughout the disclosures in
the annual report, website and any other
statements issued by the company
should
9. Maintain
governance
structures
and
processes that are fit
and
for purpose
support
good
decision-making by
the board
The company should maintain governance
structures and processes in line with its
corporate culture and appropriate to its:
• size and complexity; and
• capacity, appetite and tolerance for risk.
The governance structures should evolve
over time in parallel with its objectives,
strategy and business model to reflect the
development of the company.
appointments the search for candidates is
conducted, and appointments are made, on
merit, against objective criteria and with due
regard for the benefits of diversity on the
Board.
The Company’s website sets out the Company’s
approach to corporate responsibility and the
Company’s values relating to corporate culture.
The Company’s CSR section of the website sets
out the Company’s approach to corporate
responsibility, the Group’s people, its social
impact and the impact upon the environment in
which it operates.
The Board seeks to ensure that all of its
employees are aware of the Company’s ethical
values which embodies seven core values.
These are covered in the mandatory induction
process for new employees and each employee
is also assessed on their adherence to these
values
their annual appraisal which
influences promotion and reward.
in
regularly
The Board has
an established Audit,
Remuneration, Risk, Nomination and Executive
Committees which meet
in
accordance with their terms of reference. The
details of these committees, including their
terms of reference and composition, are set out
in this Corporate Governance section. This
detail also includes the roles and responsibilities
of each of the Directors, with all of the Non-
Executive Directors sitting on each of the sub-
committees of the Board.
The matters reserved for the Board, are set out
in the Board Terms of Reference, and can be
summarised as follows:
Reviewing, approving and guiding corporate
strategy, major plans of action, risk appetite and
policies, annual budgets and business plans;
setting performance objectives; monitoring,
implementation and corporate performance;
and overseeing major capital expenditures,
acquisitions and disposals;
Monitoring the effectiveness of the Company’s
governance arrangements and practices,
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
18
Corporate governance
making changes as needed to ensure the
alignment of
the Company’s governance
framework with current best practices;
Ensuring that appointments to the Board or its
Committees are effected in accordance with the
appropriate governance process;
Monitoring and managing potential conflicts of
interest of management, Board members,
shareholders, external advisors and other
service providers, including misuse of corporate
assets and abuse in related party transactions;
and overseeing the process of disclosure and
communications. The Board is also responsible
for all other matters of such importance as to be
of significance to the Group as a whole because
of their strategic, financial or reputational
implications or consequences.
Monitoring the process of external disclosure
and communications.
At this stage the Board believes that the
governance framework is appropriate for a
Company of its size but it continues to keep this
under review.
A healthy dialogue should exist between
its stakeholders,
the board and all of
including shareholders,
to enable all
interested parties to come to informed
decisions about the company.
The Company is committed to open dialogue
with both institutional and retail shareholders.
The CEO liaises with the Company’s principal
shareholders and relays their views to the wider
Board.
In particular, appropriate communication
and reporting structures should exist
between the board and all constituent parts
of its shareholder base. This will assist:
• the communication of shareholders’
views to the board; and
• the shareholders’ understanding of the
unique circumstances and constraints faced
by the company.
It
these
be
should
communication practices are described
(annual report or website).
clear where
On the Company’s website shareholders can
find all historical regulatory announcements,
Interim Reports and Annual Reports. Annual
Reports and Annual General Meeting Circulars
registered
are posted directly
shareholders or nominees and results of Annual
General Meeting votes are also published on
the Company’s website. As described earlier,
the Company also maintains email and phone
contacts which shareholders can use to make
enquiries or requests.
all
to
company
and
10. Communicate how
is
is
by
a
with
and
relevant
the
governed
performing
maintaining
dialogue
shareholders
other
stakeholders
the Company’s AGM on 12
Following
September 2019 the results of all votes will be
made available on the website.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
19
Corporate governance
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, as follows:
Remuneration Committee
The principal function is to determine the policy on Executive appointments and remuneration. The committee consists
of the three Non-Executive Directors with Victoria Raffé as Chair. 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 and Risk Committee members may be invited to attend the meetings.
Audit Committee
The committee is made up of the three Non-Executive Directors with Richard Lee as Chair, since 1 July 2019. 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.
Risk Committee
The committee is made up of the three Non-Executive Directors with Victoria Raffé as Chair. It is responsible for advising
the Board on risk appetite, tolerance and strategy, taking into account the current and prospective regulatory and market
environment.
The Committee maintains a constant review of both the Group’s overall risk assessment processes and the effectiveness
of the Group’s internal controls and risk management systems. It advises the Board on proposed strategic transactions
that may impact the risk profile of the Group.
The Head of Compliance and Risk and the Executive Directors may be invited to attend the meetings.
Nomination Committee
The committee consists of the three Non-Executive Directors with Tim Steel as Chair. It is the aim of the committee to
identify and nominate potential candidates to fill Board vacancies; to consider succession planning and to consider
appropriate training for the Board.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
20
Corporate governance
Executive Committee
The committee is made up of the senior management of the Group and is chaired by the CEO. The committee is
responsible for oversight of all delegated functions by the Board and the day to day operational business. In addition, it
is responsible for ensuring the strategy of the Board is implemented and any issues that need to be communicated to the
Board are recorded as such. The committee is also responsible for ensuring timely identification and resolution of
regulatory and compliance issues, ensuring senior management are aware of significant regulatory matters and to act as
a forum to update the Head of Compliance and Risk about organisational change and new business. The Corporate and
Institutional Broking Executive Committee and the Wealth Management Executive Committee escalates issues and
actions to the committee as appropriate.
Internal control
The Board has overall responsibility for the framework of internal control established by the Group and places critical
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 and the Executive Committees of both
business divisions.
By order of the Board.
Katy Mitchell
Company Secretary
31 July 2019
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
21
Remuneration report
The Directors present the Directors’ Remuneration Report (the “Remuneration Report”) for the financial year ended 31
March 2019.
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 Victoria Raffé.
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 their own remuneration. The committee has access to information and advice provided by the CEO and
the CFO 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, 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
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.
Performance related contractual incentive scheme
These are designed to reward performance by employees across the Group.
Share options
As referred to in the Directors’ Report, the Group has four different share ownership plans for employees; 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 employees. All costs of the ESOT are borne by Group
Companies. Currently 2,139,500 shares are held by 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.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
22
Remuneration report
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.
CSOP
Under the terms of the Company Share Option plan, options over the Company’s shares may be granted on a
discretionary basis to employees of the Group (including Directors) at a price which is not less than the market value of
the shares at the date of grant. Performance conditions may be imposed at the discretion of the Board.
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 Save As You Earn scheme, employees of the Group (including Directors) 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. Employees enter into a savings contract under which they agree to save a certain amount of salary each month for
a specified period, typically 3 years, with a view to using those savings to buy shares under the terms of the option.
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.
As at the date of this report there were no SAYE schemes open.
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
The Executive Directors are employed on rolling contracts subject to six 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.
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 executive Director.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
23
Remuneration report
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 (AUDITED)
The remuneration of each Director as listed on page 1 Company Information, excluding share options and awards, during
the year ended 31 March 2019 is detailed in the table below:
Compensation
for loss of
office
Total
year
ended
31 Mar
2019
Total 16
months
ended
31 Mar
2018
Pension
contribution
year
ended
Pension
contribution
16 months
ended
31 Mar 2019 31 Mar 2018
Salary
Benefits
Bonus
£
£
£
£
£
£
£
£
163,750
115,000
168,590
66,667
11,394
19,191
296
692
15,000
15,000
47,200
-
94,659
227,692
-
-
284,803
376,883
216,086
67,359
276,654
398,304
-
-
30,000
60,000
30,000
-
30,000
664,007
-
-
-
-
-
31,573
-
-
-
-
-
77,200
-
-
-
-
-
322,351
30,000
60,000
30,000
-
30,000
1,095,131
40,000
80,000
40,000
40,000
35,000
909,958
11,367
-
16,667
2,000
-
-
-
-
-
30,034
25,177
-
-
-
-
-
-
-
-
25,117
Executive
DJ Cowland*
RW Killingbeck**
PA Wale***
P Tansey****
Non-Executive
REM Lee
TM Steel
JHD Carey*****
HR Percy******
VG Raffé
Notes:
* Resigned 20 December 2018
** Resigned 27 September 2018
*** Appointed 17 October 2018
**** Appointed 1 December 2018. FCA approved 21 June 2019
***** Resigned 13 May 2019
******Resigned 20 July 2018
The highest paid Director for 2019 and 2018 was RW Killingbeck receiving emoluments of £376,883 and £398,304,
respectively.
No pension contributions were paid in respect of RW Killingbeck in either year.
DIRECTORS’ INTERESTS IN SHARE OPTIONS (AUDITED)
There were no unexercised options over ordinary shares in the Company held by Executive and Non-Executive Directors
at 31 March 2019.
At 31 March 2019 the market price of the Company’s shares was 39.5p.
The highest daily closing price during the year was 136.0p and the lowest daily closing price was 36.5p.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
24
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 (IFRSs) 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 IFRSs 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.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
25
Independent Auditor’s report to the members of WH Ireland Group PLC
OPINION
We have audited the financial statements of WH Ireland Group plc (the ‘parent company’) and its subsidiaries (the
‘Group’) for the year ended 31 March 2019 which comprise the consolidated statement of comprehensive income,
consolidated and company statement of financial position, consolidated and company statement of cash flows,
consolidated and company statement of changes in equity and notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law
and International Financial Reporting Standards (IFRSs) 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.
In our opinion:
the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs
as at 31 March 2019 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union ;
the parent company financial statements have been properly prepared in accordance with IFRSs 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and the parent company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to
you where:
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the Group’s or the parent company’s ability to continue to adopt the going concern basis
of accounting for a period of at least twelve months from the date when the financial statements are authorised
for issue.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
26
Independent Auditor’s report to the members of WH Ireland Group PLC
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter
these
Acquisition, amortization rate and impairment of intangible
assets
As described in note 13 & 14 to the financial statements, the
Group has recognised intangible assets in past financial years.
The Group recognised intangibles on the acquisition of client
lists through the hiring of certain employees or teams based
on management’s experience of
investment
management contracts and were initially assessed to have an
estimated useful life of 20 years with a cost of £4.5m. The
Group also recognized goodwill on the acquisition of the
Stockholm entity to the value of £258k in the beginning of the
year. In accordance with the accounting policies management
is obligated to assess impairment of the goodwill on an annual
basis due to it being an indefinite life intangible asset and
other intangibles when there is an indicator of impairment.
Given the estimates and judgements involved identifying
impairment
impairment
reviews, there is a risk that any necessary impairment has not
been appropriately recognised given the Group has a history
of losses.
in carrying out
indicators and
The result of the impairment review was a full impairment of
£258k of goodwill in Stockholm as well as an impairment of
client lists totalling £2.3 million and a reassessment of
economic useful life to 10 years, leaving a net book value of
£880k that will be amortised over the remaining useful life of
the asset.
How we addressed the Key Audit Matter in the Audit
Our audit procedures focused on whether there was
any impairment necessary to the carrying value of
intangibles.
We identified the indicator of impairment
being the Group’s historical and current year
loss, which necessitated an
impairment
assessment of the intangible assets and we
requested management
to perform an
assessment as well as reassess the economic
useful life of these assets.
We assessed management’s assessment of
goodwill that was based on key management
and clients remaining to establish whether any
goodwill should still be
recognised, by
comparing the key management and clients at
the initial recognition of the asset versus the
year-end
We considered and challenged management’s
assessment of impairment by reviewing the
current client list against the acquired client list
considering attrition rates and projections of
associated assets under management and fee
arrangements.
We assessed the Group’s estimation of the
term of the assets useful life, by assessing
current levels of assets under management
and growth in client revenue on the intangibles
remaining
Key observation
the
impairment
charges made by
Following
management as a result of our request to carry out full
impairment reviews, we did not identify any further
provisions from the procedures above.
OUR APPLICATION OF MATERIALITY
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
27
Independent Auditor’s report to the members of WH Ireland Group PLC
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. For planning, we consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
Importantly, misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on
the financial statements.
Based on our professional judgement, we determined materiality for the Group financial statements as a whole to be
£360k (2018: £552k – 16 month period), which represents 1.5% of the Group revenue for the year. We used revenue as
the most important benchmark as the Group is loss-making and given the importance of revenue as a measure for
shareholders in assessing the performance of the Group. The parent company’s materiality was determined at £324k
(2018: £302k) which represents 2% of total assets as it is a holding company and earns minimal revenues
Our audit work on each component of the Group was executed at levels of materiality applicable to the individual entity,
all of which were lower than Group materiality, ranging from £339k to £324k for the two significant components.
Performance materiality is the application of materiality at the individual account or balance level set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality. On the basis of our risk assessment together with our assessment of the Group’s overall control
environment, our judgment was that overall performance materiality for the Group should be 75% (2018: 75%) of
materiality, namely £270k (2016: £414k – 16 month period. The parent company’s performance materiality was set at
75% (2018: 75%) which totalled £243k (2018: £227k).
We agreed with the Audit Committee that we would report to them all audit differences in excess of £18k (2016: £27k)
and £16k (2018:£15k) for the parent company, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
We tailored our audit to ensure we have performed sufficient work to be able to give an onion on the financial statements
as a whole taking into account the structure of the Group and its accounting processes and controls.
The Group manages its operations through subsidiaries of the Parent Company, the main trading entity, WH Ireland
Limited, as well as other components. The Group audit engagement team carried out full scope audits for the Parent
Company and the other significant component based in the UK. Other transactions and balances within the financial
statements, arising in insignificant components, were audited directly by the Group audit engagement team.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
28
Independent Auditor’s report to the members of WH Ireland Group PLC
OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information included in the
annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in
the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on page 18, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
29
Independent Auditor’s report to the members of WH Ireland Group PLC
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Daniel Taylor
(Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
31 July 2019
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
30
Consolidated statement of comprehensive income
For the year ended 31 March 2019
Revenue
Administrative expenses
Expected credit loss
Operating loss
Operating loss before exceptional item
Exceptional items
Operating loss after exceptional items
Gain on sale of property, plant and equipment
Realised gains
Finance income
Finance expense
Loss before tax
Tax
Loss and total comprehensive income for the year
Earnings per share
Basic
Diluted
Note
3&5
6
6
6
8
8
9
11
Year ended
31 March 2019
£’000
23,680
(33,419)
(641)
(10,380)
16 months ended
31 March 2018
£’000
36,416
(40,389)
(128)
(4,101)
(6,267)
(4,113)
(10,380)
-
234
13
(17)
(10,150)
(1,176)
(11,326)
(1,595)
(2,506)
(4,101)
343
47
21
(24)
(3,714)
769
(2,945)
(35.44)p
(35.44)p
(10.57)p
(10.57)p
The notes on pages 38 to 76 are an integral part of these financial statements.
There were no items of other comprehensive income for the current year or prior period.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
31
Consolidated and Company statement of financial position
For the year ended 31 March 2019
ASSETS
Non-current assets
Goodwill
Intangible assets
Investment in subsidiaries
Property, plant and equipment
Investments
Loan receivable
Subordinated loan
Deferred tax asset
Current assets
Trade and other receivables
Other investments
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Finance leases
Deferred consideration
Provisions
Non-current liabilities
Accruals and deferred income
Deferred consideration
Provisions
Note
13
14
15
12
16
27
17
18
19&33
20
21
22&33
30
24
23
24
23
Total liabilities
Total net assets
EQUITY
Share capital
Share premium
Other reserves
Retained earnings
Treasury shares
Total equity
Group
Company
31 March
2019
£’000
Restated
31 March
2018
£’000
31 March
2019
£’000
31 March
2018
£’000
-
880
-
1,162
229
-
-
-
2,271
5,698
1,168
7,702
14,568
16,839
(6,468)
-
-
(1,194)
-
(7,662)
(412)
-
-
(412)
(8,074)
8,765
2,044
11,908
981
(5,524)
(644)
8,765
258
3,425
-
1,274
245
-
-
1,197
6,399
7,198
692
7,277
15,167
21,566
(5,603)
-
(282)
(1,179)
(33)
(7,097)
(439)
(1,123)
(35)
(1,597)
(8,694)
12,872
1,493
5,503
982
5,640
(746)
12,872
-
-
16,501
-
-
644
985
-
18,130
2,461
-
3
2,464
20,594
(95)
-
-
-
-
(95)
-
-
-
-
(95)
20,499
2,044
11,908
228
6,319
-
20,499
-
-
9,550
2
-
746
985
81
11,364
2,358
-
-
2,358
13,722
(194)
(5)
-
-
-
(199)
-
-
-
-
(199)
13,523
1,493
5,503
229
6,298
-
13,523
The notes on pages 38 to 76 are an integral part of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
32
Consolidated and Company statement of financial position
For the year ended 31 March 2019
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the
Company statement of comprehensive income. The loss after tax of the Company for the year was £113k (2018: profit
£735k).
These financial statements were approved by the Board of Directors on 31 July 2019 and were signed on its behalf by:
P Tansey
Director
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
33
Consolidated and Company statement of cash flows
For the year ended 31 March 2019
Group
Company
12 months to
31 March
2019
Restated
16 months to
31 March
2018
12 months to
31 March
2019
16 months to
31 March
2018
Operating activities:
(Loss) / profit for the year
Adjustments for:
Notes
£’000
£’000
(11,326)
(2,945)
Depreciation, amortisation and impairment
12, 13, 14
8
8
9
7
19
22
23
24
20
8
15
24
14
12
16
24
30
8
Finance income
Finance expense
Tax
Gain on sale of property
Losses / (gains) in investments
Non-cash adjustment for share option charge
Decrease / (increase) in trade and other receivables
(Decrease) / increase in trade and other payables
Decrease / (increase) in loan receivable
(Decrease) / increase in provisions
(Decrease) / increase in deferred consideration
Decrease / (increase) in current asset investments
Net cash (used in) / generated from operations
Taxes received / (paid)
Net cash (outflows) / inflows from operation
activities
Investing activities:
Proceeds from sale of property
Proceeds from sale of investments
Interest received
Investment in subsidiary
Payment of deferred consideration
Increase in intangible fixed asset
Acquisition of property, plant and equipment
Acquisition of investments
Net cash (used in) / generated from investing
activities
Financing activities
Proceeds from issue of share capital
Repayment of borrowings
Increase in deferred consideration
Capital element of finance leases repaid
Issue of subordinated loan
Interest paid
Dividends paid
Net cash 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
3,295
(13)
17
1,176
-
(234)
153
1,253
852
-
(68)
108
(476)
(5,263)
247
(5,016)
-
642
13
-
785
(21)
24
(766)
(343)
(47)
55
11,397
(13,996)
-
19
-
(162)
(6,000)
(52)
(6,052)
5,093
596
21
-
(1,216)
(1,216)
-
(380)
(275)
(1,216)
6,956
-
-
(282)
-
(17)
6,657
425
7,277
7,702
(106)
(589)
(752)
3,047
4,066
(994)
929
(352)
-
(24)
-
3,625
620
6,657
7,277
The notes on pages 38 to 76 are an integral part of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
£’000
(113)
2
-
-
60
-
-
153
(103)
(98)
102
-
-
-
3
-
3
-
-
-
£’000
735
8
-
-
-
-
-
55
2,422
(1,742)
(15)
-
-
-
1,463
-
1,463
-
-
-
(6,951)
(4,515)
-
-
-
-
-
-
-
-
(6,951)
(4,515)
6,956
-
-
-
-
-
-
6,956
8
(5)
3
4,066
(994)
-
-
(25)
-
-
3,047
(5)
-
(5)
34
Consolidated and Company statement of cash flows
For the year ended 31 March 2019
Notes to the Statement of Cash Flows (Direct Method and Indirect Method)
Reconciliation of Group and Company liabilities arising from financing activities
Group
Long-term borrowings
Deferred consideration
Lease liabilities
As at
1 April 2018
£'000
-
2,302
282
2,584
Cash flows
£'000
-
(1,216)
(282)
(1,498)
Non-cash
changes
£'000
-
108
-
108
As at
31 March 2019
£'000
-
1,194
-
1,194
There are no Company liabilities arising from financing activities.
The notes on pages 38 to 76 are an integral part of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
35
Consolidated and Company changes in equity
For the year ended 31 March 2019
Share
premium
£’000
1,621
-
Available
for-sale
reserve
£’000
7
-
Other
Reserves
£’000
982
-
Group
Balance at 1 December 2016
Loss and total comprehensive
income for the period
Employee share option scheme
Deferred tax on employee
share options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2018
Profit and total comprehensive
income for the year
Employee share option scheme
Deferred tax on employee
share options
New share capital issued
Transfer of available-for-sale
reserves transferred to retained
earnings
Other movements
Share options exercised
Dividends
Balance at 31 March 2019
Share
capital
£’000
1,309
-
-
-
184
-
-
-
1,493
-
-
-
551
-
-
-
-
2,044
-
-
3,882
-
-
-
5,503
-
-
-
6,405
-
-
-
-
11,908
-
-
-
-
-
-
7
-
-
-
-
(7)
-
-
-
-
Retained
earnings
£’000
8,524
(2,945)
-
(36)
-
90
-
-
5,633
(11,326)
153
(21)
-
7
-
-
-
-
-
-
982
-
-
-
-
Treasury
Shares
£’000
(731)
-
Total
equity
£’000
11,712
(2,945)
-
-
-
(36)
(15)
-
-
-
(746)
-
4,051
90
-
-
12,872
(11,326)
-
-
-
-
153
(21)
6,956
-
131
-
-
8,765
(1)
-
-
981
30
-
-
(5,524)
102
-
-
(644)
The notes on pages 38 to 76 are an integral part of these financial statements.
Retained earnings include £10k ESOT reserve.
At 31 March 2019 the total number of issued ordinary shares is 42,871,276 million shares of 5p each (2018: 29.9 million
shares of 5p each). 13,000,000 shares were issued during the period (2018: 3,684,943).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
36
Consolidated and Company changes in equity
For the year ended 31 March 2019
Company
Balance at 1 December 2016
Profit and total comprehensive income for the
period
Employee share option scheme
Deferred tax on employee share options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2018
Profit and total comprehensive income for the year
Employee share option scheme
Deferred tax on employee share options
New share capital issued
Other movements
Share options exercised
Dividends
Balance at 31 March 2019
Share
capital
£’000
1,309
-
-
-
184
-
-
-
1,493
-
-
-
551
-
-
-
2,044
Share
premium
£’000
1,621
-
Other
Reserves
£’000
229
-
Retained
earnings
£’000
5,508
735
Treasury
Shares
£’000
-
-
-
-
3,882
-
-
-
5,503
-
-
-
6,405
-
-
-
11,908
-
-
-
-
-
-
229
-
-
-
(1)
-
-
228
-
(36)
-
91
-
-
6,298
(113)
153
(21)
-
2
-
-
6,319
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
equity
£’000
8,667
735
-
(36)
4,066
91
-
-
13,523
(113)
153
(21)
6,956
1
-
-
20,499
The notes on pages 38 to 76 are an integral part of these financial statements.
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.
Other reserves
Other reserves comprise a (consolidated) merger reserve of £753k (2018: £753k) and a (consolidated) capital redemption
reserve of £228k (2018: £229k).
Retained earnings
Retained earnings reflect accumulated income, expenses, gains and losses, recognised in the statement of comprehensive
income and the statement of recognised income and expense and is net of dividends paid to shareholders. It includes
£10k of ESOT reserve.
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, shares are shown as a separate class of shareholders’ equity with a debit balance.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
37
Notes to the financial statements
For the year ended 31 March 2019
1. GENERAL INFORMATION
WH Ireland Group plc is a public company incorporated in the United Kingdom. The shares of the Company are traded
on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange Group plc. The address
of its registered office is 24 Martin Lane, London, EC4R 0DR.
BASIS OF PREPARATION
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out in note
3. The policies have been consistently applied to all the years presented, unless otherwise stated. The group has identified
that the adoption of IFRS 9 & 15 has not materially impacted these consolidated financial statements.
The consolidated financial statements are presented in GBP, which is also the Group’s functional currency. Amounts are
rounded to the nearest thousand, unless otherwise stated. These financial statements have been prepared in accordance
with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively
IFRSs).
2. ADOPTION OF NEW AND REVISED STANDARDS
New standards, amendments and interpretations adopted
There are a number of standards and interpretations which have been issued by the International Accounting Standards
Board that are effective in future accounting periods that the Group has decided not to adopt early. The most significant
of these are:
This is the first set of the Group’s annual financial statements in which IFRS 9 Financial Instruments and IFRS 15 Revenue
from Contracts with Customers have been applied, the impact of which is described below.
IFRS 9 Financial Instruments
The Group has identified that the adoption of IFRS 9, which replaces IAS 39 Financial Instruments: Recognition and
Measurement from 1 April 2018, has not materially impacted its consolidated financial statements.
Transitions
The standard has been adopted from 1 April 2018 and applied retrospectively by adjusting where necessary, the
statement of financial position at the date of initial application, with no requirement to restate comparative periods.
Classification and measurement of financial assets
The Group’s financial assets consist of trading assets from its Corporate and Institutional Broking division are currently
measured at fair value through profit and loss either held for trading or designated at fair value. This treatment will
therefore not change under IFRS 9. However, at year end the Group held £1,168k in current asset investments and £229k
of investments as available-for-sale and other investments, which will be classified as being at fair value through profit
or loss under IFRS 9. This will mean that all changes in the fair value up to the point of disposal will be recorded in the
consolidated statement of comprehensive income.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
38
Notes to the financial statements
For the year ended 31 March 2019
2. ADOPTION OF NEW AND REVISED STANDARDS (CONTINUED)
IFRS 9 Financial Instruments (continued)
As at 1 April 2018
Old classification
under IAS39
New classification
under IFRS 9
Financial assets
Cash and cash equivalents
Trading assets – listed holdings
Trade receivables
Financial investments
Financial investments
Other assets
Total financial assets
Financial liabilities
Trade payables
Other liabilities
Total financial liabilities
Amortised cost
Held for trading
Amortised cost
Designated at fair
value
Available-for-sale
Amortised cost
Amortised cost
Fair value through
profit or loss
Amortised cost
Fair value through
profit or loss
Fair value through
profit or loss
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Old carrying
amount under
IAS 39
£’000
7,277
692
New carrying
amount under
IFRS 9
£’000
7,277
692
2,850
197
48
3,077
14,141
1,474
4,129
5,603
2,850
197
48
3,077
14,141
1,474
4,129
5,603
Impairment
The Group applies an expected credit loss model when calculating impairment losses on its trade and other receivables
(both current and non-current). In applying IFRS 9 the Group must consider the probability of a default occurring over
the contractual life of its trade receivables and contract asset balances on initial recognition of those assets. The Group
does not consider that this will result in a material increase in impairment provisions.
IFRS 15 Revenue from Contracts with Customers
This standard has been adopted on its mandatorily effective date of 1 April 2018 and applied on a retrospective basis.
There was no impact of applying the standard on this basis and therefore no cumulative effect to adjust in the opening
balance of retained earnings. The Group will continue to assess individual customer contracts for separate performance
obligations to allocate the correct transaction price as they occur. The impact of the new revenue standard has not had
a significant effect on the consolidated results.
For additional information on the Group’s accounting policies relating to revenue recognition see further down in note
3.
IFRS 16 Leases
Adoption of IFRS 16 will result in the group recognising right of use assets and lease liabilities for all contracts that are, or
contain, a lease. For leases currently classified as operating leases, under current accounting requirements the Group
does not recognise related assets or liabilities, and instead spreads the lease payments on a straight-line basis over the
lease term, disclosing in its annual financial statements the total commitment.
At 31 March 2019 operating lease commitments amounted to £4.2 million (2018: £3.9 million) [see note 30].
Transition:
The standard will be adopted from 1 April 2019 using the modified retrospective approach. This recognises the cumulative
effect of initially applying the standard as an adjustment to equity at the date of the initial application.
The Group anticipates recording a right of use asset of £3.5m and corresponding lease liability of approximately £3.5m,
with the right of use asset to be depreciated over the life of the lease and the lease liability subsequently measured at
amortised cost using the effective interest rate per IFRS 9.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
39
Notes to the financial statements
For the year ended 31 March 2019
2. ADOPTION OF NEW AND REVISED STANDARDS (CONTINUED)
IFRS 16 Leases (continued)
The actual impacts of adopting the standard on 1 April 2019 may change because the new accounting policies are subject
to change until the Group presents its next interim financial statements that include the date of initial application.
Disclosure Initiative: Amendments to IAS 7: Statement of Cash Flows: The amendments to IAS 7 are intended to improve
information provided to users of financial statement about changes in liabilities arising from an entity’s financing
activities. These amendment have not yet been endorsed.
Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2): The amendments,
provide clarification on the accounting for:
The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments;
Share-based payment transactions with a net settlement feature for withholding tax obligations;
A modification to the terms and conditions of a share-based payment that changes the classification of the
transaction from cash-settled to equity-settled.
These amendments have not yet been endorsed.
The Group did not apply early adoption to any of these changes and, due to the number of unknowns because of the
length of time before potential compulsory adoption, has not yet ascertained their impact.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
40
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all
three of the following elements are present: power over the investee, exposure to variable returns from the investee and
the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the company and its subsidiaries (“the Group”) as if they
formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in
full. The consolidated financial statements incorporate the results of business combinations using the acquisition method.
In the statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained until the date on which control ceased.
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. Any directly attributable costs relating
to business combinations after this date are charged to the statement of comprehensive income 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 statement of comprehensive income and is not
subsequently reversed. 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.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will
flow into the Group. It is measured based on the consideration specified in a contract with a customer. The application
of IFRS 15 Revenue from contracts with customers has not resulted in any significant changes to the way the following
revenue streams have been recognised.
Revenue comprises: brokerage commission, investment management fees, corporate finance fees, commission and fees
earned from the provision of independent financial advice, interest receivable in the course of ordinary investment
management business and rental income 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.
It is variable fee based on a percentage of the transaction and therefore performance obligation is satisfied at
the date of the underlying transaction to which the brokerage relates.
Investment management fees are recognised in the period in which the related service is provided. It is a variable
fee based on the average daily market value of assets under management and is invoiced on a calendar quarter
basis in arrears. The performance obligation is satisfied over time as the contractual obligations are on ongoing
throughout the period under contract. The revenue accrued but not yet invoiced is recognised as a contract
asset.
Corporate finance advisory fees are fixed fees agreed on a deal by deal basis and might include non-cash
consideration received in the form of shares, loan notes, warrants or other financial instruments recognised at
the fair value on the date of receipt and therefore the performance obligation is satisfied at a point in time when
the Group has fully completed the performance obligations per the contract.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
41
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue (continued)
Retainer fees are recognised over the length of time of the agreement. Fees are fixed and invoiced quarterly in
advance based on the agreed engagement letter. The performance obligation is satisfied over time as the
contractual obligations are on ongoing throughout the period under contract. The deferred revenue is
recognised as a contract liability.
Corporate placing commissions are variable fees agreed on a deal by deal basis based on a percentage of the
funds raised as part of a transaction. This includes non-cash consideration received in the form of shares, loan
notes, warrants or other financial instruments recognised at the fair value on the date of receipt. Given that fees
related to this work are success based, there is a significant risk of reversal of the variable revenue and therefore
the performance obligation is satisfied at a point in time when the transaction is completed.
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 statement
of comprehensive income 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 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 statement of comprehensive income
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 repriced 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 statement of comprehensive income of the Group or Company by which
the individual concerned is employed.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
42
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 statement of comprehensive income.
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.
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 statement of comprehensive income.
Income taxes
Income tax on the profit or loss for the periods presented, comprising current tax and deferred tax, is recognised in the
statement of comprehensive income 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 reporting period end date and any adjustment to tax payable in respect of previous years.
•
Deferred tax is provided for temporary differences, at the reporting period end 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 reporting period end date (note 18).
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.
Prior period adjustments
Where material errors in the financial statements are detected resulting adjustments are made and explanations
provided in relevant disclosure notes. If such errors are in a prior period and it is determined that they are material then
adjustments are made and restatements made to the prior years within the current financial report in accordance with
International Accounting Standard IAS8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’. See note 33.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
43
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 statement of comprehensive income over the shorter
of estimated useful economic life and the period of the lease.
Lease payments are analysed between principal and interest components so that the interest element of the payment is
charged to the statement of comprehensive income over the period of the lease and is calculated so that it represents a
constant proportion of the balance of the principal payments outstanding. The principal part reduces the amounts
payable to the lessor. Rentals paid under leases which do not result in the transfer to the Company of substantially all
the risks and rewards of ownership (operating leases) are charged against income on a straight line basis over the lease
term.
Freehold land and buildings
Freehold land and buildings are carried at the lower of cost or periodic valuation by a professionally qualified surveyor.
Freehold land is not depreciated.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment. Depreciation is calculated, using
the straight line method, to write down the cost or revalued amount of plant and equipment over the assets’ expected
useful lives, to their residual values, as follows:
Computers, fixtures and fittings
–
4 to 7 years
Intangible assets
Measurement
Intangible assets with finite useful lives that are acquired separately are measured, on initial recognition at cost. Following
initial recognition, they 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 other than goodwill are amortised over the expected pattern of their consumption of future economic
benefits, to write down the cost of the intangible assets to their residual values as follows:
Client relationships
–
10 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 or its
residual value are accounted for by changing the amortisation period or method and treated as changes in accounting. It
was determined following the annual review that an appropriate period to amortise was 10 years (previously 20). See
note 13.
Impairment
The carrying amounts of the Group’s intangible assets are reviewed when there is an indicator of impairment and 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. 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.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
44
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Intangible assets (continued)
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.
Any subsequent reversal of impairment credited to the statement of comprehensive income shall not cause the carrying
amount of the intangible asset to exceed the carrying amount that would have been determined had no impairment
been recognised.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to
the contractual provisions of the instrument.
Financial assets and liabilities
Investments are recognised and derecognised on the trade date where the purchase or sale of an investment is under a
contract whose terms require delivery of the investment within the timeframe established by the market concerned, and
are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value
through profit or loss, which are initially measured at fair value.
Assets and liabilities are presented net where there is a legal right to offset and an intention to settle in that way.
Policy applicable from 1 April 2018 under IFRS 9:
The three principal classification categories for financial assets are: measured at amortised cost, fair value through other
comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under
IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model
for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first
reporting period following the change in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at
FVTPL:
-
-
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Assets held at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss.
Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
45
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (continued)
Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective
interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and
losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at OCI are subsequently measured at fair value. Dividends are recognised as income in profit or loss
unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are
recognised in OCI and are never reclassified to profit or loss.
Policy applicable before 1 April 2018 under IAS 39:
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 reporting period end date. The fair
value of unlisted investments is estimated by reference to similar 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 statement
of comprehensive income in profit on disposal of available-for-sale investments. Losses arising from impairment are
recognised in the statement of comprehensive income. Any profit or loss on sale is credited or charged to the statement
of comprehensive income.
Other investments
Other investments comprise financial assets designated as fair value through profit or 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.
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 statement of comprehensive income.
Quoted investments are valued at the quoted bid price at the reporting period end date. Changes in the value of these
other investments are recognised directly in the statement of comprehensive income.
Impairment of financial assets
The Group assesses, at each reporting period end 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 statement of comprehensive income.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
46
Notes to the financial statements
For the year ended 31 March 2019
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial instruments (continued)
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 statement of comprehensive income. Any increase after an impairment loss has been recognised is treated
as a revaluation and is recognised directly in equity.
Loan receivables
Loan receivables are initially recognised at fair value. Subsequent to initial recognition, loan notes are measured at
amortised cost using the effective interest rate method.
Trade receivables
Trade receivables are measured on initial recognition at fair value. Appropriate allowances for estimated irrecoverable
amounts are recognised in the statement of comprehensive income when there is objective evidence that the asset is
impaired.
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.
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
rate 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.
Deferred consideration
Deferred consideration is recognised at the discounted present value of amounts payable. Subsequent to initial
recognition, it is rebased over the period in which the consideration is payable, with the unwinding of the discount being
taken to the statement of comprehensive income.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
47
Notes to the financial statements
For the year ended 31 March 2019
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.
There are no significant accounting judgements relevant to the application of these policies.
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:
Amortisation and impairment of non-financial assets
As noted above, the Group estimates the useful economic lives of intangible assets, in order to calculate the appropriate
amortisation charge. This is done by the Directors using their knowledge of the markets and business conditions that
generated the asset, together with their judgement of how these will change in the foreseeable future.
Where an indicator of impairment exists, value in use calculations are performed to determine the appropriate carrying
value of the asset. The value in use calculation requires the Directors to estimate the future cash flows expected to arise
for the CGU and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less
than expected, a material impairment loss may arise (see note 13 and 14).
Investments in subsidiaries
Where an indicator of impairment exists, management assess the carrying value of the asset by determining the fair value
by independent assessment of the carrying value of the business units and by comparative analysis against other similar
businesses in the peer group.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
48
Notes to the financial statements
For the year ended 31 March 2019
5. SEGMENT INFORMATION
The Group has two principal operating segments, Wealth Management (WM) and CIB and a number of minor operating
segments that have been aggregated into one operating segment.
The Wealth Management division offers investment management advice and services to individuals and contains our
Wealth Planning 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 (Nomad) 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 or the Isle of Man. Each reportable segment has a segment manager who is directly
accountable to, and maintains regular contact with, the Chief Executive Officer.
No customer represents more than ten percent of the Group’s revenue.
The majority of the Group’s revenue originates within the UK with a non-material element originating overseas in the Isle
of Man which has been included in “Other Group companies”.
The following tables represent revenue and cost information for the Group’s business segments:
WM
CIB
Head office
Year to 31 March 2019
Revenue
Direct costs
Contribution
Indirect costs
Segment result
Executive board costs
Investment gains
Finance income
Finance expense
(Loss)/ profit before tax
Tax
(Loss)/ profit for the year
£’000
14,988
(16,594)
(1,606)
-
(1,606)
71
-
-
-
(1,535)
-
(1,535)
£’000
7,639
(7,457)
182
-
182
71
234
-
-
487
-
487
£’000
-
(146)
(146)
(7,200)
(7,346)
(1,087)
-
12
(17)
(8,438)
(1,176)
(9,614)
Other Group
companies*
£’000
1,052
(1,459)
(407)
(258)
(665)
-
-
1
-
(664)
-
(664)
Group
£’000
23,679
(25,656)
(1,977)
(7,458)
(9,435)
(945)
234
13
(17)
(10,150)
(1,176)
(11,326)
* Other Group companies include WH Ireland (IOM) Limited, WH Ireland Plc and Stockholm Investments Ltd.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
49
Notes to the financial statements
For the year ended 31 March 2019
5. SEGMENT INFORMATION (CONTINUED)
16 months to 31 March 2018
Revenue
Direct costs
Contribution
Indirect costs
Segment result
Executive board costs
Investment gains
Finance income
Finance expense
(Loss)/ profit before tax
Tax
(Loss)/ profit for the period
WM
CIB
Head office
£’000
23,529
(19,650)
3,879
-
3,879
328
-
-
-
4,207
-
4,207
£’000
11,779
(8,554)
3,225
-
3,225
328
47
-
-
3,600
-
3,600
£’000
-
(370)
(370)
(11,268)
(11,638)
(656)
-
2
(23)
(12,315)
939
(11,376)
Other Group
companies*
£’000
1,108
(675)
433
-
433
-
343
19
(1)
794
(170)
624
Group
£’000
36,416
(29,249)
7,167
(11,268)
(4,101)
-
390
21
(24)
(3,714)
769
(2,945)
*Other Group companies include WH Ireland (IOM) Limited, WH Ireland Plc and Stockholm Investments Ltd.
Segment assets and segment liabilities are reviewed by the Chief Executive Officer in a consolidated statement of financial
position. Accordingly this information is replicated in the Group Consolidated statement of financial position on page 32.
As no measure of assets or liabilities for individual segments is reviewed regularly by the Chief Executive Officer, 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.
The impact of applying IFRS 15 on the Group’s revenue from contracts with customers is described is note 3.
Revenue disaggregated by division and timing of recognition below:
Year ended 31 March 2019
Point in time
Over time
Total
16 months to 31 March 2018
Point in time
Over time
Total
WM
5,675
9,313
14,988
WM
10,916
12,613
23,529
CIB
4,340
3,299
7,639
Head Office
-
-
-
CIB
7,904
3,875
11,779
Head Office
-
-
-
Other Group
Companies
131
921
1,052
Other Group
Companies
110
998
1,108
Group
10,146
13,533
23,679
Group
18,930
17,486
36,416
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
50
Notes to the financial statements
For the year ended 31 March 2019
6. OPERATING (LOSS)/PROFIT
Group
Operating (loss)/profit is stated after charging/(crediting):
Depreciation of property, plant and equipment
Amortisation of intangibles
Operating lease rentals – property (note 11)
Impairment of intangibles and goodwill (note 12 & 13)*
Employee benefit expense (note 7)
Restructuring and one-off legal and regulatory costs*
Other administrative expenses
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
Expected credit loss
Total
Year ended
31 Mar 2019
£’000
16 months ended
31 Mar 2018
£’000
492
197
543
2,606
18,022
1,507
9,941
218
263
851
-
23,741
2,506
12,670
25
25
54
32
33,419
641
34,060
70
45
40,389
128
40,517
Other administrative expenses are incurred in the ordinary course of the business and do not include any non-recurring
items.
* Exceptional items totalling £4,113,000 (2018: 2,506,000) is shown below:
Project Discovery *
Restructuring **
Compliance & regulatory projects***
MiFID II****
Goodwill and intangible assets*****
Total
Notes:
Year to
31 March 2019
£’000
442
835
230
-
2,606
4,113
16 months to
31 March 2018
£’000
1,527
718
-
261
-
2,506
*As announced on 2 June 2016, the Group entered into a seven year agreement with SEI Investments (Europe) Ltd, to outsource its Private Wealth Management
back office operations and move to a “Model B” arrangement. On account of a number of unforeseen obstacles, significant cost has been incurred in both
internal and external resources dedicated to this project (“Project Discovery”) as the project moves to conclude the transfer of clients and assets from the prior
legacy platforms over to SEI.
**During the period ended 31 March 2018 and 2019 there were a number of changes within the senior management team and several external hires were
made. The costs of these changes, in respect of both short term consultancy costs and fixed employment related costs, are considered by the Board to be non-
trading and exceptional in nature.
*** During the year ending 31 March 2019, the Group incurred various costs in relation to one off regulatory reports.
****During the period to 31 March 2018 the Group incurred various costs in preparation for compliance with MiFID II.
*****See notes 13 &14
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
51
Notes to the financial statements
For the year ended 31 March 2019
7. EMPLOYEE BENEFIT EXPENSE
Group
Wages and salaries
Bonuses
Social security costs
Other pension costs
Non-salaried staff
Charge for share options granted to employees (note 29)*
Less amounts included within Restructuring and non-recurring costs
Year ended
31 Mar 2019
£’000
11,938
2,663
1,908
506
17,015
1,728
18,743
214
(835)
18,122
16 months ended
31 Mar 2018
£’000
13,961
4,161
2,520
552
21,194
2,492
23,686
55
-
23,741
*Approximately £60k of charges in the current year relate to the prior period.
Non-salaried staff are commission-only brokers and therefore do not receive a salary.
Company
Wages and salaries
Social security costs
Year ended
31 Mar 2019
£’000
138
15
153
16 months ended
31 Mar 2018
£’000
195
21
216
The average number of persons (including Directors) employed during the year was:
Group
Executive and senior management
Corporate Broking
Wealth Management
Support staff
Salaried staff
Non-salaried staff
Company
Executive and senior management
Year ended
31 Mar 2019
7
33
72
62
174
10
184
16 months ended
31 Mar 2018
12
28
76
74
190
11
201
Year ended
31 Mar 2019
4
4
16 months ended
31 Mar 2018
5
5
The total amount paid to Directors in the period, including social security costs was £1.2m (2018: £1.0m). Full details of
Directors’ remuneration, including that of the highest paid Director, are disclosed in the Remuneration Report on pages
22-24 of these financial statements.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
52
Notes to the financial statements
For the year ended 31 March 2019
8. FINANCE INCOME AND EXPENSE
Group
Bank interest receivable
Finance income
Interest payable on finance leases
Other interest
Finance expense
9. TAX EXPENSE
Group
Current tax expense:
United Kingdom corporation tax at 19.00% (2018: 19.25%)
Adjustment in respect of prior years
Total current tax
Deferred tax expense (note 18):
Current year
Effect of change in tax rate
Adjustments in respect of prior years
Total deferred tax
Total tax in the statement of comprehensive income
Equity items:
Deferred tax current year charge/ (credit)
Total tax in the statement of equity
Year ended
31 Mar 2019
£’000
13
13
16 months ended
31 Mar 2018
£’000
21
21
17
-
17
22
2
24
Year ended
31 Mar 2019
£’000
16 months ended
31 Mar 2018
£’000
-
-
-
1,304
(137)
9
1,176
1,176
21
21
-
-
-
(27)
3
-
(24)
(24)
36
36
The tax expense for the year and the amount calculated by applying the standard United Kingdom corporation tax rate
of 19.00% (2018: 19.25%) to profit before tax can be reconciled as follows:
Group
Loss before tax
Tax expense: United Kingdom corporation tax rate of 19.00% (2018:
19.25%)
Other expenses not tax deductible
Income not chargeable to tax
Impact of share options
Movement in unrecognised deferred tax
Adjustments in respect of prior years
Difference in overseas tax rates
Effect of other tax rates/credits
Total tax charge/(credit) in the statement of comprehensive income
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
Year ended
31 Mar 2019
£’000
(10,150)
(1,929)
16 months ended
31 Mar 2018
£’000
(2,946)
(567)
105
(45)
67
3,130
9
(24)
(137)
1,176
97
(324)
26
-
(73)
(20)
92
(769)
53
Notes to the financial statements
For the year ended 31 March 2019
10. DIVIDEND
No dividend is proposed in respect of 2019 (2018: none).
11. EARNINGS PER SHARE (EPS)
Basic EPS is calculated by dividing the profit or loss 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. In a year when the Company presents positive
earnings attributable to ordinary shareholders, anti-dilutive 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:
Weighted average number of shares in issue during the period
(thousands)
Year ended
31 Mar 2019
16 months ended
31 Mar 2018
31,955
31,955
27,874
27,874
Loss for the year attributable to ordinary shareholders (£’000)
(11,326)
(2,945)
Basic EPS
Diluted EPS
(35.44)p
(10.57)p
(35.44)p
(10.57)p
Share options are anti-dilutive as they reduce the stated loss per share.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
54
Notes to the financial statements
For the year ended 31 March 2019
12. PROPERTY, PLANT AND EQUIPMENT
Company
Computers,
fixtures
and fittings
£’000
33
-
-
33
-
-
33
23
8
-
31
2
-
33
-
2
10
Freehold
property
£’000
6,394
-
(6,394)
-
-
-
-
1,644
-
(1,644)
-
-
-
-
-
-
4,750
Group
Computers,
fixtures
and fittings
£’000
4,341
589
-
4,930
380
-
5,310
3,134
522
-
3,656
492
-
4,148
1,162
1,274
1,207
Total
£’000
10,735
589
(6,394)
4,930
380
-
5,310
4,778
522
(1,644)
3,656
492
-
4,148
1,162
1,274
5,957
Cost
At 30 November 2016
Additions
Disposals
At 31 March 2018
Additions
Disposals
At 31 March 2019
Depreciation and impairment
At 30 November 2016
Charge for the year
Adjustment on disposal
At 31 March 2018
Charge for the year
Adjustment on disposal
At 31 March 2019
Net book values
At 31 March 2019
At 31 March 2018
At 30 November 2016
The freehold property was sold on 23 January 2017 for £5.27m. Accordingly, at 30 November 2016, it had been
reclassified to current assets, as held for sale.
13. GOODWILL
Group
Beginning of year
Impairment
End of year
Year ended
31 Mar 2019
£’000
258
(258)
-
16 months ended
31 Mar 2018
£’000
258
-
258
The value of goodwill related wholly to Stockholm Investments Ltd, a subsidiary set up in 2001 to house the clients and
wealth management business of a then, newly acquired team. That team left the business in 2017 and the group was
unable to retain the business formerly undertaken by them. As a result, the goodwill associated with these cash
generating units has been fully impaired.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
55
Notes to the financial statements
For the year ended 31 March 2019
14. INTANGIBLE ASSETS
Group
Cost
At 30 November 2016
Additions
At 31 March 2018
Additions
At 31 March 2019
Amortisation
At 30 November 2016
Charge for the year
At 31 March 2018
Charge for the year
Impairment losses
At 31 March 2019
Net book values
At 31 March 2019
At 31 March 2018
At 30 November 2016
Client
relationships
£’000
4,475
106
4,581
-
4,581
893
263
1,156
197
2,348
3,701
880
3,425
3,582
Client relationships arise when the group acquires a broker business with an existing client base. These individual broker
businesses each represent a cash generating unit. During the year, a number of brokers left the business and the group
was unable to retain the business formerly undertaken by them. As a result, the client relationships associated with these
cash generating units has been fully impaired.
Furthermore, the group has reassessed the amortisation rate that applies to continuing client relationships. Taking into
account the attrition rate of the acquired customers, it has been determined that the remaining useful economic life of
the one remaining acquired client relationship should be shortened from a remaining useful life of 7 years (2018: 17
years). This revised useful economic life has been applied prospectively from 1 April 2018.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
56
Notes to the financial statements
For the year ended 31 March 2019
15. SUBSIDIARIES
Company
Beginning of year/ period
Additions
End of year/ period
Year ended
31 Mar 2019
£’000
9,550
6,951
16,501
16 months ended
31 Mar 2018
£’000
5,035
4,515
9,550
Investments in subsidiaries are stated at cost less impairment.
The Group raised £4.95m on 5 March 2019 and £2.00m on 20 September 2018, a total of £6.95m by way of placings to
existing and new shareholders, for general corporate purposes. The additions in the year relate to additional
subscriptions for shares in WH Ireland Limited, a wholly owned subsidiary, in September 2018 and March 2019.
The Company’s subsidiaries, all of which are included in the consolidated financial statements, are presented below:
Subsidiary
WH Ireland Limited
WH Ireland (IOM)
Limited
WH Ireland (Financial
Services) Limited
Readycount Limited
Stockholm Investments
Limited
ARE Business and
Professional Limited
SRS Business and
Professional Limited
WH Ireland Nominees
Limited
WH Ireland Trustee
Limited
Fitel Nominees Limited
Country of
incorporation
England & Wales WM and CIB
Principal
activity
Class of
shares
Ordinary
Proportion
held by Group
100%
Isle of Man
WM
Ordinary
100%
England & Wales
England & Wales
Dormant
Dormant
Ordinary
Ordinary
100%
100%
England & Wales
Dormant
Ordinary
100%
England & Wales
Dormant
Ordinary
100%
England & Wales
Dormant
Ordinary
100%
England & Wales
Nominee
Ordinary
100%
England & Wales
England & Wales
Trustee
Nominee
Ordinary
Ordinary
100%
100%
Proportion held
by Company
100%
100%
-
100%
100%
-
-
-
-
-
The registered office of WH Ireland (IOM) Limited is St George’s Tower, Hope Street, Douglas, Isle of Man, IM1 1HR.
The registered office of all other companies listed above is 24 Martin Lane, London, EC4R 0DR.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
57
Notes to the financial statements
For the year ended 31 March 2019
16. INVESTMENTS
Group
Financial assets at fair value through profit or loss
At 30 November 2016
Fair value gain
At 31 March 2018
At 31 March 2019
Other financial assets at fair value through profit or loss
At 30 November 2016
Additions
Fair value loss
Disposals
At 31 March 2018
Additions
Fair value gain
Disposals
At 31 March 2019
Total investments at 31 March 2019
Total investments at 31 March 2018
Quoted
£’000
-
-
-
-
Quoted
£’000
4
-
(2)
(1)
1
-
-
-
1
1
1
Unquoted
£’000
40
8
48
48
Warrants
£’000
74
171
(14)
(35)
196
-
289
(305)
180
228
244
Total
£’000
40
8
48
48
Total
£’000
78
171
(16)
(36)
197
-
289
(305)
181
229
245
Financial assets at fair value through profit or loss include equity investments other than those in subsidiary undertakings.
These are measured at fair value with fair value gains and losses recognised through profit and loss.
Other investments, in the main, comprise financial assets designated as fair value through profit or loss and include
warrants and 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 statement of comprehensive income.
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 reporting period end 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.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
58
Notes to the financial statements
For the year ended 31 March 2019
17. SUBORDINATED LOAN
Company
Beginning of year
Additions
End of year
Year ended
31 Mar 2019
£’000
985
-
985
16 months ended
31 Mar 2018
£’000
960
25
985
This interest-free, subordinated loan was originally issued to WH Ireland (IOM) Limited on 31 March 2014 and has been
increased in line with the needs of the subsidiary. Whilst payment can be requested giving six months’ notice, there is
no intention to do this within the next twelve months; accordingly the loan has been classified as non-current. The
impact of applying IFRS 9 has been considered and probability of default was assessed and consequently, it was
determined that the expected credit loss is not material.
18. DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax is provided for temporary differences, at the reporting period end date, between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes using a tax rate of 19.00% (2018: 19.25%). A
deferred tax asset is recognised for all deductible temporary differences and unutilised 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
Losses
Provisions
End of year
Company
Share Options
Deferred tax assets
Deferred tax liabilities
2019
£’000
-
-
-
-
-
-
2018
£’000
110
147
81
824
35
1,197
2019
£’000
-
-
-
-
-
-
Deferred tax assets
Deferred tax liabilities
2019
£’000
-
-
2018
£’000
81
81
2019
£’000
-
-
2018
£’000
-
-
-
-
-
-
2018
£’000
-
-
The unrecognised tax losses amount to £16.5m (2018: £6.2m)
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
59
Notes to the financial statements
For the year ended 31 March 2019
18. DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
Movement in deferred tax is shown below:
Group
Property, plant
and equipment
Intangible assets
Share options
Provisions
Tax losses
At 30 Nov
2016
£’000
(17)
165
141
16
411
716
Recognised
income
statement
£’000
127
(18)
(24)
19
413
517
Recognised
in equity
At 31 Mar
2018
£’000
-
-
(36)
-
-
(36)
£’000
110
147
81
35
824
1,197
Company
Share options
At 30 Nov
2016
£’000
141
141
Recognised
income
statement
£’000
(24)
(24)
Recognised
in equity
At 31 Mar
2018
£’000
(36)
(36)
£’000
81
81
19. TRADE AND OTHER RECEIVABLES
Recognised
income
statement
£’000
(110)
(147)
(60)
(35)
(824)
(1,176)
Recognised
income
statement
£’000
(60)
(60)
Recognised
in equity
At 31 Mar
2019
£’000
-
-
(21)
-
-
(21)
£’000
-
-
-
-
-
-
Recognised
in equity
At 31 Mar
2019
£’000
(21)
(21)
£’000
-
-
Trade receivables
Amounts due from Group companies
Other receivables
Accrued income
Prepayments
Group
Company
31 March 2019
£’000
2,082
-
637
2,547
432
5,698
Restated
31 March 2018
£’000
2,850
-
3,077
857
414
7,198
31 March 2019
£’000
-
2,383
75
(1)
4
2,461
31 March 2018
£’000
-
2,298
53
-
7
2,358
The carrying value of trade and other receivable balances are denominated fully in British pounds (2018: 100%).
In preparing these financial statements errors of an offsetting nature in trade receivables and trade payables were
detected in the prior period of a material nature. Whilst there was no impact on the income statement for the period the
errors were sufficiently material to warrant correcting adjustments to be made to the prior period statements. A full
explanation is set out in note 33.
Accrued income relates to management fee accrual. Management fees are accrued on a monthly basis and reconciled
to fees collected quarterly. Consideration to IFRS 9 has been made and it has been determined that there is a low
probability of default and therefore the expected credit loss is not material.
The impact of applying IFRS 9 to intercompany balances for the Company has been considered and probability of
default was assessed and consequently, it was determined that the expected credit loss is not material.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
60
Notes to the financial statements
For the year ended 31 March 2019
19. TRADE AND OTHER RECEIVABLES (CONTINUED)
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 31 March 2019, trade receivables (net of provisions for impairment 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
31 March 2019
£’000
471
241
27
196
190
957
2,082
Restated
31 March 2018
£’000
1,531
-
-
259
53
1,007
2,850
31 March 2019
£’000
-
-
-
-
-
-
-
31 March 2018
£’000
-
-
-
-
-
-
-
Trade receivables are largely amounts due from retainer clients, who are invoiced on a quarterly basis in advance. The
Group’s policy is to allow 30 days for payment. Consequently, these receivables have no significant financing component
and the Group have applied the simplified approach in line with IFRS 9. Calculation of loss allowances are measured at
an amount equal to lifetime expected credit losses (ECLs). The approach taken by the Group in arriving at the expected
credit loss is as follows:
Step 1: The Group have determined the appropriate brackets by grouping each trade receivables based on the ageing
structure.
Step 2: Having determined the appropriate groupings, a historical loss rate was calculated for each age bracket by
reviewing the pattern of payment of trade receivables over the past 12 months.
Step 3: This historical loss rate has been applied to each ageing bracket of trade receivables as at the balance sheet date
to arrive at an expected credit loss for each grouping. All trade receivables over 365 days have a 100% historical loss rate
loss applied to them.
Based on the above, the group recognised an expected credit loss of £641k (2018: £128k).
The maximum exposure to credit risk, before any collateral held as security, is the carrying value of each class of
receivable set out above.
The Directors consider that the carrying amounts of trade and other receivables approximate their fair value.
Movements in impairment provisions were as follows:
Opening balance
Amounts released from provision
due to recovery
Amounts written off, previously fully
provided
Amounts charged to the statement
of comprehensive income
Closing balance
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
Group
31 March 2019
£’000
436
(51)
31 March 2018
£’000
309
(72)
Company
31 March 2019
£’000
-
-
31 March 2018
£’000
-
-
(474)
692
603
-
199
436
-
-
-
-
-
-
61
Notes to the financial statements
For the year ended 31 March 2019
20. OTHER INVESTMENTS
Current asset investment
Group
31 March
2019
£’000
1,168
31 March
2018
£’000
692
Company
31 March
2019
£’000
-
31 March
2018
£’000
-
These represent short-term principal positions in the form of listed investments which are held at market value. No tax
was payable at that value.
21. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Group
31 March
2019
£’000
7,702
31 March
2018
£’000
7,277
Company
31 March
2019
£’000
3
31 March
2018
£’000
-
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.
Money held on behalf of clients is not included in cash and cash equivalents on the statement of financial position. Client
money at 31 March 2019 for the Group was £469k (2018: £1,505k). There is no client money held in the Company (2018:
£nil).
22. TRADE AND OTHER PAYABLES
Company
Trade payables
Amounts due to Group companies
Other payables
Tax and social security
Deferred income
Accruals
Group
Company
31 March 2019
£’000
1,553
-
1,149
373
311
3,082
6,468
Restated
31 March 2018
£’000
1,474
-
339
771
346
2,673
5,603
31 March 2019
£’000
41
-
(12)
(1)
-
67
95
31 March 2018
£’000
155
-
-
-
-
39
194
The Directors consider that the carrying amounts of trade and other payables approximate their fair value.
During the process of preparing these financial statements errors were detected in the prior period of a material nature.
Whilst there was no impact on the income statement for the period the errors were sufficiently material to warrant
correcting adjustments to be made to the prior period statements. A full explanation and the resulting changes made is
set out in note 33.
Deferred income relates to retainer fees invoiced in advance and spread over the length of the period, typically
quarterly. There was no impact of applying IFRS 15 to this revenue stream.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
62
Notes to the financial statements
For the year ended 31 March 2019
23. PROVISIONS
Group
At 1 April 2018
Provided during the year
Utilised during the year
Total investments at 31 March 2019
Provisions included in current liabilities
Provisions included in non-current liabilities
IFA clawback
provision
£’000
35
(35)
-
-
Complaints
provision
£’000
33
(10)
(23)
-
Total
£’000
68
(45)
(23)
-
31 March 2019
£’000
-
-
-
31 March 2018
£’000
33
35
68
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.
24. DEFERRED CONSIDERATION
Deferred consideration represents the amounts payable over a three year period from September 2016 to October 2019,
for certain client relationships (note 14).
Group
At 31 March 2018
Additions during the year:
Charged to Statement of Comprehensive income
Paid during the year
At 31 March 2019
Included in current liabilities
Included in non-current liabilities
Client relationships
£’000
2,302
108
(1,216)
1,194
31 March 2019
£’000
1,194
-
1,194
31 March 2018
£’000
1,179
1,123
2,302
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
63
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT
The fair value of all of the Group’s and the Company’s financial assets and liabilities approximated its carrying value at
the reporting period end date. The carrying amount of non-current financial instruments, including floating interest rate
borrowing, is not significantly different from the fair value of these instruments based on discounted cash flows. The
significant methods and assumptions used in estimating fair values of financial instruments are summarised below:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss 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 reporting period end
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 reporting period end 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.
Trade receivables and payables
The carrying value less impairment provision of trade receivables and payables is assumed to approximate their fair values
due to their short-term nature.
Borrowings
Borrowings are measured at amortised cost using the effective interest rate method. The tables below summarise the
Group’s main financial instruments by financial asset type:
Group
Financial assets
Investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Deferred consideration
Amortised cost
£’000
-
-
5,698
7,702
6,468
1,194
31 March 2019
Fair value through profit
or loss
£’000
48
1,349
-
-
-
-
Total
£’000
48
1,349
5,698
7,702
6,468
1,194
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
64
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Group
Financial assets
Investments
Other investments
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Finance leases
Deferred consideration
Loans and
other
receivables
£’000
-
-
7,198
-
-
-
Amortised
cost
£’000
-
-
-
7,277
5,603
282
2,302
31 March 2018
Held at fair value
as available for
sale assets
£’000
Fair value
through profit
or loss
£’000
48
692
-
-
-
-
-
-
198
-
-
-
-
-
The tables below summarise the Company’s main financial instruments by financial asset type:
Company
Financial assets
Subordinated loan (note 17)
Group balances
Financial liabilities
Trade and other payables
Company
Financial assets
Subordinated loan (note 17)
Group balances
Financial liabilities
Trade and other payables
Amortised cost
£’000
985
2,383
41
Amortised cost
£’000
985
2,298
155
31 March 2019
Fair value through
profit or loss
£’000
-
-
-
31 March 2018
Fair value through
profit or loss
£’000
-
-
-
Total
£’000
48
890
7,198
7,277
5,603
282
2,302
Total
£’000
985
2,383
41
Total
£’000
985
2,2983
155
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
65
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
Risks
The main risks arising from the Group’s financial instruments are credit risk, liquidity risk and market risk. Market risk
comprises, 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. 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 statement of financial position
figure. Impairment policy and information on collateral held against trade receivables can be found in note 19. There
were no other past due, impaired or unsecured debtors.
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 most recently renewed the Group’s main banking facilities in February 2015. As an evergreen facility there
is no requirement to update the agreement annually, although a formal review of facilities is undertaken at least annually.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
66
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted
payments:
Group
Trade and other payables
Accruals
Deferred consideration
Other financial liabilities
Group
Trade and other payables
(restated)
Finance leases
Accruals
Deferred consideration
Other financial liabilities
Payable
within 1 year
£’000
3,661
2,807
1,194
-
7,662
31 March 2019
Payable in
2 to 5 years
£’000
-
412
-
-
412
Payables after
more than 5 years
£’000
-
-
-
-
-
31 March 2018
Total contractual
payments
£’000
3,661
3,219
1,194
-
8,074
Payable
within 1 year
£’000
2,584
Payable in
2 to 5 years
£’000
-
Payables after
more than 5 years
£’000
-
Total contractual
payments
£’000
2,584
282
3,019
1,179
33
7,097
-
439
1,123
35
1,597
-
-
-
-
-
282
3,458
2,302
68
8,694
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
67
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT (CONTINUED)
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted
payments:
Company
Trade and other payables
Accruals
Company
Trade and other payables
Accruals
31 March 2019
Payable within
1 year
£’000
41
67
108
Payable in
2 to 5 years
£’000
-
-
-
Payables after
more than 5 years
£’000
-
-
-
Total contractual
payments
£’000
41
67
108
31 March 2018
Payable within
1 year
£’000
155
39
194
Payable in
2 to 5 years
£’000
-
-
-
Payables after
more than 5 years
£’000
-
-
-
Total contractual
payments
£’000
155
39
194
Market Risk
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates to the Group’s amount of interest receivable
on cash deposits. The maximum exposure for interest is not significant.
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) 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. Other investments are recognised at fair value and subject to changes in market prices.
The Group manages other 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 £229k (2018: £245k). See note 16.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
68
Notes to the financial statements
For the year ended 31 March 2019
25. FINANCIAL RISK MANAGEMENT (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 measurements 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 value 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 assets at fair value through profit or
loss
Unquoted equities
Financial instruments designated at fair value
through profit or loss
Quoted equities
Other investments
Total
Financial assets at fair value through profit or
loss
Unquoted equities
Financial instruments designated at fair value
through profit or loss
Quoted equities
Other investments
Total
Level 1
£’000
31 March 2019
Level 2
£’000
Level 3
£’000
-
-
-
-
-
-
-
-
48
-
181
229
Level 1
£’000
31 March 2018
Level 2
£’000
Level 3
£’000
-
1
-
1
-
-
-
-
48
-
196
244
Total
£’000
48
-
181
229
Total
£’000
48
1
196
245
There were no transfers between levels in either financial year.
Balance at 30 November 2016
Total gains or losses in statement of comprehensive income
Purchases
Transfer out
Balance at 31 March 2018
Total gains or losses in statement of comprehensive income
Balance at 31 March 2019
Unquoted equities Other investments
£’000
74
(14)
172
(34)
198
(17)
181
£’000
40
8
-
-
48
-
48
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
69
Notes to the financial statements
For the year ended 31 March 2019
26. CAPITAL MANAGEMENT
The capital of the Group comprises share capital, share premium, retained earnings and other reserves. The total capital
at 31 March 2019 amounted to £10.0m for the Group (2018: £12.9m) and £20.6m for the Company (2018: £13.5m). 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 minimum common equity tier 1
regulatory capital 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 31 March
Additions
Disposals
At 31 March
Year ended
31 March 2019
£’000
746
-
(102)
644
Period ended
31 March 2018
£’000
731
15
-
746
At 31 March 2019 no shares in the Company were held in Treasury (2018: nil shares). At 31 March 2019 no shares in the
Company were held in the EBT (2018: nil shares) and the ESOT held 2,139,500 shares (2018: 2,289,500), at a nominal
value of 5p per share. This represents 4.64% of the called up share capital (2018: 6.66%).
28. EMPLOYEE BENEFIT TRUSTS (EBT)
The WH Ireland EBT was established in October 1998 and the WH Ireland Group plc Employee Share Ownership Trust
(ESOT) was established in 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.
Joint Ownership Arrangements (the ‘JOE Agreements’) are in place in relation to 2,139,500 shares between the trustees
of the ESOT and a number of employees (the ‘Employees’). Under the JOE Agreements, the option 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, other than in the event of critical illness or
death, the Employee is deemed to be a Bad Leaver.
The shares carry dividend and voting rights, although these have been waived by all parties to the 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 JOE Agreements are accounted for as share based payments (note
29).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
70
Notes to the financial statements
For the year ended 31 March 2019
29. SHARE-BASED PAYMENTS
The Group had two schemes for the granting of non-transferable options to employees during the reporting period; the
approved Company Share Ownership Plan (CSOP) and a Save as You Earn Schemes (SAYE 3). In addition, options are held
in the ESOT (note 29). Details of these schemes can be found in the Remuneration Report on pages 22 to 24. SAYE 3
matured following the end of the period in May 2019.
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:
Outstanding at beginning of
year
Granted
Expired/ forfeited
Exercised
Outstanding at end of year
Exercisable at end of year
31 March 2019
CSOP
Options WAEP
163,589 66.23p
ESOT
Options WAEP
78.14p
1,650,000
SAYE 3
Options WAEP
82.00p
794,564
ESOT
Options WAEP
92.50p
629,500
5,000 66.23p
(40,000) 66.23p
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(179,500)
-
-
92.50p
-
128,589 66.23p
1,650,000
78.14p
794,564
82.00p
450,000
92.50p
128,589 66.23p
1,500,000
78.14p
-
-
-
-
Outstanding at beginning of
year
Granted
Expired/ forfeited
Exercised
Outstanding at end of year
Exercisable at end of year
31 March 2018
CSOP
ESOT
SAYE 3
ESOT
Options
235,522
WAEP
66.23p
Options
1,650,000
WAEP
78.14p
Options
827,490
WAEP Options
329,500
82.00p
WAEP
92.50p
-
-
(71,933)
-
-
105.00p
-
-
-
-
-
-
-
(32,926)
-
-
82.00p
-
300,000
-
-
92.50p
-
-
163,589
66.23p
1,650,000
78.14p
794,564
82.00p
629,500
92.50p
163,589
66.23p
1,500,000
78.14p
-
-
-
-
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
71
Notes to the financial statements
For the year ended 31 March 2019
29. SHARE-BASED PAYMENTS (CONTINUED)
The pricing models used to value these options and their inputs are as follows:
Pricing Models
Pricing model
Date of grant
Share price at grant(p)
Exercise price (p)
Expected volatility (%)
Expected life (years )
Risk-free rate (%)
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
ESOT
Monte Carlo
28/10/13-
13/04/16
74.5-114.5
0.0-114.5
43.0000-37.0000
5
0.8000-1.9300
Expected dividend yield (%)
0.00
0.67-2.19
SAYE 3
Black Scholes
18/05/16
ESOT
N/A
30/05/17
92.0
82.00
28.0000
3
0.5400
2.00
125.0
0.00
N/A
3
N/A
N/A
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 (2018: 252 trading days). For
options granted in 2004, volatilities were calculated back to the date of the Group’s flotation in July 2000.
Awards granted on 30 May 2017 are economically equivalent to shares with dividend rights. Therefore the fair value has
been taken as the closing share price on the date of grant of £1.25.
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 a total net debit of £214k during the year (2018: £55k), relating to share-based payment
transactions.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
72
Notes to the financial statements
For the year ended 31 March 2019
30. LEASING COMMITMENTS
Finance leases
The net carrying value of these assets at 31 March 2019 was £nil (2018: £563,040).
Group
The present value of future lease payments are analysed
as:
Within one year
Greater than one year but less than five
Total minimum lease payments
Less finance charge
Present value of minimum lease payment
Minimum Lease
payments
Capital
£’000
Interest
£’000
-
-
-
-
-
-
-
-
-
-
2019
£’000
-
-
-
-
-
2018
£’000
299
-
299
(17)
282
Group
Disclosed as:
Current finance lease payable
Non-current finance lease payable
Total finance lease payable
31 March 2019
£’000
31 March 2018
£’000
-
-
-
282
-
282
Operating lease commitments
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
No later than one year
Later than one year and not later than
five years
After five years
Group
Company
31 March 2019
£’000
770
2,686
31 March 2018
£’000
611
2,253
31 March 2019
£’000
-
-
31 March 2018
£’000
-
-
736
4,192
993
3,857
-
-
-
-
Operating lease payments represent rentals payable for office premises and equipment. Leases are negotiated for an
average of six 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.
31. CAPITAL COMMITMENTS
There were no capital commitments for the Group or the Company as at 31 March 2019 (2018: £nil).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
73
Notes to the financial statements
For the year ended 31 March 2019
32. RELATED PARTY TRANSACTIONS
Group
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 (2018: £nil) has been made for impaired 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:
Key management personnel
Other related parties
Services rendered
to related parties
£’000
-
7
-
-
Purchases/ services
from related parties
£’000
-
-
-
27
Amounts owed to
related parties
£’000
-
-
-
5
2019
2018
2019
2018
The total compensation of key management personnel is shown below:
Short term employment benefits
Post-employment benefits
Termination benefits
Share-based payment
Year ended
31 March 2019
£’000
1,564
170
322
-
16 months ended
31 March 2018
£’000
1,946
82
41
19
2,056
2,088
The highest paid Director for 2019 and 2018 was RW Killingbeck receiving emoluments of £376,883 and £398,304,
respectively.
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
74
Notes to the financial statements
For the year ended 31 March 2019
32. RELATED PARTY TRANSACTIONS (CONTINUED)
Company
The Parent Company receives interest from subsidiaries in the normal course of business. Total interest received during
the year was £nil (2018: £2k). In addition, the Parent Company received a management charge of £481k (2018: £575k)
from its subsidiary WH Ireland Limited. WH Ireland Limited also charged the Parent Company £25k (2018: £25k) for broker
services.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation. The captions in the primary statements of the Parent Company include amounts attributable to
subsidiaries. These amounts have been disclosed in aggregate in the notes 19 and 22 and in detail in the following table:
Readycount Limited
WH Ireland (IOM) Limited
Stockholm Investments Limited
WH Ireland Limited
WH Ireland Trustees Limited
Amounts owed by related parties
2018
£’000
4,157
106
410
-
-
4,673
2019
£’000
4,157
108
410
-
-
4,675
Amounts owed to related parties
2019
£’000
-
-
-
2,275
17
2,292
2018
£’000
-
-
-
2,473
17
2,490
The net amount owed by related parties is £2,383k (2018: £2,183k) (see note 19).
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
75
Notes to the financial statements
For the year ended 31 March 2019
33. PRIOR PERIOD ADJUSTMENT
The Group migrated to a new operating system over 2 years ago and with the old platform system in the process of being
retired, the validation of the financial records was initiated by management. It was established that Trade Receivables
(see note 19) and Trade Payables (see note 22) each included an erroneous entry amounting to £10.1m. Whilst the
elimination of these erroneous entries has no effect on the income statement for the periods under consideration, the
materiality of the correction and guidance provided by International Accounting Standard IAS 8 'Accounting Policies,
Changes in Accounting Estimates and Errors' necessitates the restatement of the prior period balances of the following
sections within these financial statements:
Relevant section of these financial statements
Consolidated statement of financial position
Current assets
Trade and other receivable
Total current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Consolidated statement of cash flow
Decrease / (increase) in trade and other
receivables
(Decrease) / increase in trade and other
payables
Notes to the financial statements
Note 19 trade and other receivables
Trade receivables
Total trade and other receivables
Note 22 trade and other payables
Trade payables
Total trade and other payables
Balance as stated in
the prior period’s
financial statements
Adjustment
Restated prior period
balance within these
financial statements
£’000
£’000
£’000
17,339
25,308
31,707
(10,141)
(10,141)
(10,141)
(15,744)
(17,238)
(18,835)
10,141
10,141
10,141
1,256
10,141
(3,855)
(10,141)
12,991
17,339
(10,141)
(10,141)
11,615
15,744
(10,141)
(10,141)
7,198
15,167
21,566
(5,603)
(7,096)
(8,694)
11,397
(13,996)
2,850
7,198
1,474
5,603
W.H. Ireland Group PLC
Registered number 03870190 / 31 March 2019
76