Annual Report for the year ended 31 December 2008
Annual Report for the year ended 31 December 2008 Annual Report for the year ended 31 December 2008
2. FinanCial instRUments and RisK manaGement (CONTINuED) (e) Capital Risk Management consistent with others in the industry the Group manages capital on the basis of regulatory capital in accordance with pillar 1 and pillar 2. capital adequacy and the use of regulatory capital are monitored daily by the Group’s management, employing techniques based on the guidelines developed by the Basel committee and the european community Directives, as implemented by the Financial services Authority, for supervisory purposes. compliance with FsA regulatory requirements was maintained throughout the year. The Group has an internal capital Adequacy Assessment process (commonly known as the icAAp), which it uses to manage regulatory capital. This Assessment takes into account the risk profile and future plans of the business. under this process the Group is satisfied that there is either sufficient capital to absorb potential losses or that there are mitigating controls in place to prevent the risks occurring. The risk Department includes commentary on required and available capital in its monthly risk report to the Group and in the risk committee pack. The commentary highlights any changes to pillar 1 or 2 numbers and also any expected impact from the anticipated business initiatives. Where significant business initiatives are planned, the effects on the risk profile of the Group and therefore its capital requirement are considered as part of the business plan. Further details regarding the Group’s capital adequacy can be found in its pillar 3 disclosures at www.evgplc.com/otherinformation.aspx. Fair value of financial instruments The carrying values of assets and liabilities not held at fair value (cash and cash equivalents, trade receivables, counterparty receivables, other receivables, and trade and other payables) are not significantly different from fair value. 3. seGment RePoRtinG By business segment The Board monitors and reviews the operating performance of the Group by subsidiary. The parent is a holding company for its subsidiaries and the Board reviews the performance of its subsidiaries separately from the business segment categories disclosed below. The chief executive’s report and Financial review on pages 4 to 15 highlight the detailed breakdown of these business segments by entity. investment banking and markets in the current year refers to the business carried out in evolution securities limited, evolution securities china limited, evolution Watterson Asia securities limited and evolution securities (us) inc. private client investment management refers to private client investment management under the Williams de Broë brand and includes WDB capital uK equity Fund limited. other activities refer to the central administrative, shared services and holding company functions, combined with the profits on, the legacy fixed asset investment portfolio. 2008 2008 Continuing Discontinued 2008 2007 operations operations Total Total £'000 £'000 £'000 £'000 TOTAL ASSETS investment banking and markets 79,448 4,771 84,219 157,684 private client and asset management 58,078 – 58,078 38,073 other 84,993 – 84,993 64,725 222,519 4,771 227,290 260,482 2008 2008 Continuing Discontinued 2008 2007 operations operations Total Total £'000 £'000 £'000 £'000 TOTAL LIABILITIES investment banking and markets (47,766) (595) (48,361) (86,916) private client and asset management (27,425) – (27,425) (13,474) other (4,290) – (4,290) (4,820) (79,481) (595) (80,076) (105,210) notes to tHe FinanCial statements CONTINuED FOR THE YEAR ENDED 31 DECEMBER 2008 54 The evoluTion Group plc AnnuAl reporT & AccounTs 2008
By business segment (continued) The acquisition of property, plant and equipment and intangible assets is disclosed below: notes to tHe FinanCial statements CONTINuED FOR THE YEAR ENDED 31 DECEMBER 2008 2008 2008 Continuing Discontinued 2008 2007 operations operations Total Total £'000 £'000 £'000 £'000 investment banking and markets 1,062 447 1,509 1,377 private client and asset management 7,132 – 7,132 412 other – – – 15 8,194 447 8,641 1,804 segmental information provided to the Board of Directors for the reportable segments for the year ended 31 December 2008 is as follows: Yearended 31 December 2008 Restated Year ended 31 December 2007 Investment Private client Investment Private client banking and and investment Other banking and and investment Other markets management activities Total markets management activities Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fee and commission income 28,994 33,072 – 62,066 38,572 32,131 (53) 70,650 Fee and commission expenses (37) (1,220) – (1,257) (1,151) (856) – (2,007) net fee and commission income 28,957 31,852 – 60,809 37,421 31,275 (53) 68,643 Trading income 72 1,820 86 1,978 15,806 497 292 16,595 other income 708 835 (426) 1,117 272 (22) (20) 230 TOTAL INCOME profit on disposal of available-for-sale 29,737 34,507 (340) 63,904 53,499 31,750 219 85,468 financial assets – – 20 20 68 – 231 299 share of post tax results of associate – – – – – – 29 29 Depreciation of ppe (1,097) (517) (7) (1,621) (1,182) (417) (12) (1,611) Amortisation of intangibles (750) (460) (5) (1,215) (425) (215) (48) (688) operating expenses (43,628) (33,366) (1,371) (78,365) (48,934) (25,600) (937) (75,471) exceptional operating expenses OPERATING (LOSS)/PROFIT FROM – – – – (814) (1,572) (5,242) (7,628) CONTINuING OPERATIONS (15,738) 164 (1,703) (17,277) 2,212 3,946 (5,760) 398 Finance income 877 1,561 3,138 5,576 961 692 1,441 3,094 Finance expense (1,372) (422) 797 (997) (2,293) (367) 2,350 (310) (LOSS)/PROFIT BEFORE INCOME TAX FROM CONTINuING OPERATIONS (16,233) 1,303 2,232 (12,698) 880 4,271 (1,969) 3,182 income tax credit/(expense) 1,958 18 (315) 1,661 1,036 (878) (586) (428) (loss)/profit for the year from discontinued operations (2,459) – – (2,459) 448 – – 448 55
- Page 5 and 6: Balance Sheet strength and cash bal
- Page 7 and 8: evolution securities Evolution secu
- Page 9 and 10: Corporate Finance Evolution securit
- Page 11 and 12: Wdb capital The Group’s investmen
- Page 13 and 14: EARNINGS PER SHARE ON TOTAL OPERATI
- Page 15 and 16: evolution securities’ income anal
- Page 17 and 18: other activities The Group’s othe
- Page 19 and 20: Lord macLaurin of Knebworth, dL (72
- Page 21 and 22: principal risks and uncertainties T
- Page 23 and 24: share capital Details of the change
- Page 25 and 26: The Directors consider that in prep
- Page 27 and 28: The Chief Executive, Alex snow, is
- Page 29 and 30: The Committee observed that during
- Page 31 and 32: appropriate and comprehensive proce
- Page 33 and 34: The Board has delegated to the Remu
- Page 35 and 36: The concept of a bonus ceiling does
- Page 37 and 38: non-executive directors Non-executi
- Page 39 and 40: On 8 April 2009, Alex snow was awar
- Page 41 and 42: We have audited the Consolidated Fi
- Page 43 and 44: ASSETS 2008 2007 Note £’000 £
- Page 45 and 46: 2008 2007 £’000 £’000 (loss)/
- Page 47 and 48: shareholding of more than one half
- Page 49 and 50: ) Distribution channels and custome
- Page 51 and 52: (b) Share-based plans The Group’s
- Page 53 and 54: Risk Reporting The Group Board rece
- Page 55: Neither past Past due but not impai
- Page 59 and 60: 6. otHeR inCome Restated 2008 2007
- Page 61 and 62: 11. aUditoRs’ RemUneRation During
- Page 63 and 64: 14. inCome taX eXPense (CONTINuED)
- Page 65 and 66: 18. intanGiBle assets notes to tHe
- Page 67 and 68: 20. deFeRRed inCome taX (CONTINuED)
- Page 69 and 70: 24. tRadinG PoRtFolio assets notes
- Page 71 and 72: 31. Consolidated moVement in sHaReH
- Page 73 and 74: 33. CasH FloW FRom oPeRatinG aCtiVi
- Page 75 and 76: 38. emPloYee sHaRe sCHemes Movement
- Page 77 and 78: 38. emPloYee sHaRe sCHemes (CONTINu
- Page 79 and 80: THE EVOLuTION GROuP PLC PARENT COMP
- Page 81 and 82: ASSETS ComPanY BalanCe sHeet AS AT
- Page 83 and 84: statement oF ReCoGnised inCome and
- Page 85 and 86: 1. aCCoUntinG PoliCies (CONTINuED)
- Page 87 and 88: 2. FinanCial instRUments and RisK m
- Page 89 and 90: 2. FinanCial instRUments and RisK m
- Page 91 and 92: 5. inVestment in sUBsidiaRies notes
- Page 93 and 94: 10. CasH and CasH eQUiValents 2008
- Page 95 and 96: 17. Post BalanCe sHeet eVents There
- Page 97 and 98: 19. emPloYee sHaRe sCHemes (CONTINu
- Page 99 and 100: 19. emPloYee sHaRe sCHemes (CONTINu
- Page 101 and 102: FoR YoUR notes 99
- Page 103 and 104: DesiGneD AnD proDuceD BY BesT&co. l
By business segment (continued)<br />
The acquisition of property, plant and equipment and intangible assets is disclosed below:<br />
notes to tHe FinanCial statements CONTINuED<br />
FOR THE YEAR ENDED <strong>31</strong> DECEMBER <strong>2008</strong><br />
<strong>2008</strong> <strong>2008</strong><br />
Continuing Discontinued <strong>2008</strong> 2007<br />
operations operations Total Total<br />
£'000 £'000 £'000 £'000<br />
investment banking and markets 1,062 447 1,509 1,377<br />
private client and asset management 7,132 – 7,132 412<br />
o<strong>the</strong>r – – – 15<br />
8,194 447 8,641 1,804<br />
segmental in<strong>for</strong>mation provided to <strong>the</strong> Board of Directors <strong>for</strong> <strong>the</strong> reportable segments <strong>for</strong> <strong>the</strong> <strong>year</strong> <strong>ended</strong> <strong>31</strong> <strong>December</strong> <strong>2008</strong> is as follows:<br />
Year<strong>ended</strong> <strong>31</strong> <strong>December</strong> <strong>2008</strong><br />
Restated<br />
Year <strong>ended</strong> <strong>31</strong> <strong>December</strong> 2007<br />
Investment Private client Investment Private client<br />
banking and and investment O<strong>the</strong>r banking and and investment O<strong>the</strong>r<br />
markets management activities Total markets management activities Total<br />
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000<br />
Fee and commission income 28,994 33,072 – 62,066 38,572 32,1<strong>31</strong> (53) 70,650<br />
Fee and commission expenses (37) (1,220) – (1,257) (1,151) (856) – (2,007)<br />
net fee and commission income 28,957 <strong>31</strong>,852 – 60,809 37,421 <strong>31</strong>,275 (53) 68,643<br />
Trading income 72 1,820 86 1,978 15,806 497 292 16,595<br />
o<strong>the</strong>r income 708 835 (426) 1,117 272 (22) (20) 230<br />
TOTAL INCOME<br />
profit on disposal of available-<strong>for</strong>-sale<br />
29,737 34,507 (340) 63,904 53,499 <strong>31</strong>,750 219 85,468<br />
financial assets – – 20 20 68 – 2<strong>31</strong> 299<br />
share of post tax results of associate – – – – – – 29 29<br />
Depreciation of ppe (1,097) (517) (7) (1,621) (1,182) (417) (12) (1,611)<br />
Amortisation of intangibles (750) (460) (5) (1,215) (425) (215) (48) (688)<br />
operating expenses (43,628) (33,366) (1,371) (78,365) (48,934) (25,600) (937) (75,471)<br />
exceptional operating expenses<br />
OPERATING (LOSS)/PROFIT FROM<br />
– – – – (814) (1,572) (5,242) (7,628)<br />
CONTINuING OPERATIONS (15,738) 164 (1,703) (17,277) 2,212 3,946 (5,760) 398<br />
Finance income 877 1,561 3,138 5,576 961 692 1,441 3,094<br />
Finance expense (1,372) (422) 797 (997) (2,293) (367) 2,350 (<strong>31</strong>0)<br />
(LOSS)/PROFIT BEFORE INCOME TAX FROM<br />
CONTINuING OPERATIONS (16,233) 1,303 2,232 (12,698) 880 4,271 (1,969) 3,182<br />
income tax credit/(expense) 1,958 18 (<strong>31</strong>5) 1,661 1,036 (878) (586) (428)<br />
(loss)/profit <strong>for</strong> <strong>the</strong> <strong>year</strong> from<br />
discontinued operations (2,459) – – (2,459) 448 – – 448<br />
55
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