New image to be confirmed ## Business ## the right way ### Annual Report and Financial Statements ### for the year ended 30 June 2022 For visual only, text to be supplied ## Strategic Report Financial StatementsOur Governance 01 Page references to be checked throughout report as pagination is not finalised | OUR PURPOSE | Strategic Report | | Our Governance | | | --- | --- | --- | --- | --- | | | 00 Investment case | | 00 Board of Directors | | | | 00 Headlines | | 00 Corporate governance report | | | Helping our customers | 00 At a glance | | 00 Audit Committee report | | | | 00 Chair’s statement | | 00 Nomination Committee report | | | | 00 Chief Executive’s review | | 00 Directors’ remuneration report | | | todo the right business | 00 Case study – Celebrating | | 00 Directors’ report and other | | | | | ourpeople | | statutory information | | | 00 Business model | | 00 Statement of Directors’ | | responsibilities 00 Strategy ## in the right way | 00 Stakeholder engagement | | Financial Statements | | --- | --- | --- | | 00 Key performance indicators/ | | 00 Independent auditors’ report | | | operational measures | 00 Consolidated income statement | | 00 Review of operations | | 00 Consolidated statement of | Image TBC | 00 Sustainability report | | | comprehensive income | | --- | --- | --- | --- | | 00 Financial review | | 00 Balance sheets | | | 00 Risks and uncertainties | | 00 Statements of changes | | | | facingthe business | | inequity | Graphic 00 Going concern and 00 Cash flow statements tbc viabilitystatement 00 Notes to the financial statements 00 Pro forma five year financial summary (unaudited) 00 Advisors and corporatecalendar Stay up to date with our website www.wilmingtonplc.com ## Strategic Report Financial StatementsOur Governance 02 ## Investment case Strapline TBC ### Purpose driven ## [Digital first ### We empower our customers to do the right business in the right way, by ### providing them with a complementary range of information and data and training ### & education solutions via single technology platforms. Our unique offering is ## approach ### underpinned by a set of core competencies that, in combination, drive ### sustainable value creation for our stakeholders. ## aligned to ### Why invest? Diverse and resilient The resilience of our portfolio is enhanced by a diverse ### Unique GRC platform ## growing GRC customer base and low customer concentration. Powerful combination of well-recognised brands in information and data and training & education ### Single technology platforms and solutions, serving the resilient and growing ### digital innovation Governance, Risk and Compliance market. ## markets] Attractive portfolio of digital-first data & information assets and innovative digital learning solutions delivered via single technology platforms. ## 27+ years’ experience Image TBC ### High conversion of operating profit High proportion of Graphic ### into cash recurringrevenues tbc Strongly cash generative business reflectedby Consistent and sustainable revenue streams, with a focus on recurring subscription and membership revenues with high renewal rates. ## 114% conversion of operatingprofit into cash ## 37% subscription and membership revenue ### Agile and customer led Commitment to dividends Strong customer-led product management culture, reinforced by agile approach to hybrid delivery formats. ## [•]p ### Responsible business culture total dividend Commitment to customers echoed by the responsible business culture embedded across the Group. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 03 ## [Headlines] Strapline TBC ### Financial performance ### • 13% organic revenue growth driven by successful ## [Digitalisation ### digitalisation programme, new product investment 9] ### “Our resilient organic[ growth strategy is 4] ### and return to FTF[ events (organic revenue growth ### delivering, with our new operating model ### 5% excluding FTF) ### successfully embedded to enhance our position ## drives success] ### • Training and Education division delivered 18% in the large, expanding and rapidly evolving GRC ### Image TBC organic growth; Intelligence division 10% ### and Regulatory Compliance markets. ### • Excluding face-to-face events organic revenue ### Our streamlined portfolio and the restructured ### growth 5% ### operating model have underpinned a year ### • Annually recurring revenues grew 5ppts, now 37% ofsuccess. Wehave delivered our strategic ### of Group revenues objectives to grow organically, invest in our ### business and actively manage our portfolio ### • Adjusted profit before tax up 38% to £20.7m ### (2021:£15.0m) reflecting continuing efficiencies ofbrands. ### Graphic odigital-firstmodel ### The investments we have made in technology tbc | • Strategic sale of AMT for £23.4m before | | | and data are accelerating our growth ambitions | | --- | --- | --- | --- | | | completion adjustments | | as we develop single technology platforms in | | | | 5] | each division. These investments are enhancing | | • Net cash[ | | at 30 June 2022 £20.5m (2021: net | | ### our position by creating a scalable portfolio of ### debt £17.2m) reflecting strong trading performance, ### effective cash management strategies and sale assets that are strongly aligned to the dynamic ### ofsubsidiaries and property GRC market.” 6] ### • Strong cash conversion[ of 114% (2021: 104%) ### • Investments driving strategic progress, future Mark Milner Chief Executive Officer ### growth plans enhanced by development of single ### technology platforms in each division ### • Further embedded cultural ambitions, bolstered ### bycommitments to Race at Work Charter, ### Inclusiveemployers and Disability Confidence ### • Committed Net Zero carbon targets Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 04 ## [Headlines continued] 1 | Revenues for the year £’m | | | | | | Adjusted EBITA £’m | | | | | Adjusted profit before tax | £’m | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 121.3 | 122.5 | | | 121.0 | | 23.8 | | | | | | 21.8 | | | | | | | | 113.1 | 113.0 | | | | | | | | | | | | 20.7 | | | | | | | | | | 21.5 | | 21.6 | | | | 19.3 | | | | £121.0m | | | | | | £21.6m | | | | | £20.7m | | | | | | | +7% | | | | | | +30% | | | 16.6 | | +38% | | | | 15.0 | | 14.0 11.9 3 | Organic | revenue growth % | | Adjusted profit before | | Profit/(loss) before | | | --- | --- | --- | --- | --- | --- | --- | | | | | taxmargin % | | taxation £’m | | | | | 2018 2019 2020 2021 2022 | | 2018 2019 2020 2021 2022 | | 2018 2019 2020 2021 2022 | ## 13% ## 2021: up 3% 17% £36.1m ### 2021: 13% 2021: £(2.0)m 2 Adjusted earnings per share p Total dividends p Group net cash/(debt) 4 (excluding lease liabilities) | | 19.80 | | | | | | | 9.1 | 9.1 | | | | | | | | 20.5 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 18.66 | | 8.8 | | | | | | | | | | | | | | 17.44 | | | | | | | | | | £’m | | | | | | | 18.66p | | | | | | [•]p | | | | | | | | | | | | | + 37% | | | | 13.62 | | | | | | | | | | | | | | | | | | | | | | | | | 6.0 | [•] | | (39.6) | (33.9) | (27.7) | (17.2) | | | | | | 10.71 | | | | | | | | | £20.5m | | | | | | Chart to be updated/calculated 5 Basic earnings/(loss) Final dividend p Strong cash conversion at % per share p | | | 2018 2019 2020 2021 2022 | | 2018 2019 2020 2021 2022 | | 2018 2019 2020 2021 2022 | | --- | --- | --- | --- | --- | --- | --- | | | | | [•]p | | 114% | | | 36.98 | p | | | | 2021: 104% | | ### 2021: 3.9p ### 2021: (5.18)p Footnotes to be reviewed throughout AR as word doc changed but not 1 Adjusted profit before tax – see note 2 tracked. Also numbering is not right in word doc. 2 Adjusted basic earnings per share – see note 9 4 FTF - face-to-face 5 Net cash/(debt) includes cash and cash equivalents, bank loans (excluding capitalised loan arrangement fees) and bank overdrafts but excludes lease liabilities 6 Cash conversion – see note 30 9 Organic – eliminating the effects of exchange rate fluctuations and the impact of acquisitions and disposals Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 05 ## At a glance ## Effectively navigating ## the regulatory ## compliance landscape ## Training & ## Intelligence Wilmington is a scalable portfolio in the resilient and ## Education expansive Governance, Risk and Compliance (‘GRC’) market, providing solutions to enterprise customers and professionals from a broad range of industries. Our customers operate within a complex array of legal, political and regulatory frameworks, all dictated by the ever-evolving regulatory landscape. We help them to navigate this complexity and respond to emerging areas of risk by providing a complementary range of solutions via single technology platforms. Our intelligence gives customers the detailed insight they need to understand Single the regulatory landscape, and our specialist training technology equips them to navigate it successfully. platforms Our solutions are focused on real-world outcomes and are based on significant and defendable intellectual property built up over many years. Our teams of experienced industry practitioners and talented subject matter experts are central to our unique offering. We are proud to be recognised by our customers as a trusted and valued partner as we help them navigate their business challenges. Wilmington is a digital-first business with strong ## Regulation Compliance capabilities in online and hybrid learning, and in the management and provision of mission-critical information and data. The strength of our portfolio is underpinned by an operating model which allows our portfolio of brands to leverage the value of the Group’s technology platforms to deliver unique solutions to their customers. We invest in ### Empowered Customers: the core competencies that drive quality in our products doing the right business, the right way across Governance Risk and Compliance (GRC) to enable our brands to exhibit a unique set of characteristics that define our competitive advantage. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 06 ## At a glance continued ### The products Wilmington’s two division offer focus on three ## [Underpinning] ### main sub‑categories of Governance, Risk and Compliance: ## [the GRC market with ### t e l l i g e n c e ### I n ## strong growth drivers] Strapline TBC ### Governance Risk ### • Conduct • Ethics • Prudential ### The GRC market is underpinned by strong macro drivers, ### • Corporate Governance • Information Sharing ### which are closely aligned to the Group’s core offering and ### • Risk Management • Risk Management ### inform our strategy to increase brand presence in this market: ### Architecture • Operational • Reputational Risk ### • Increasing volume of regulation Resilience ### • Increasing fraud and cyber risk ## • Evolving role of Compliance GRC ### • Escalating regulatory enforcement ### • Increasing importance of responsible business practice ### Compliance ### • Increasing adoption of technology solutions ### • Financial Crime Prevention • AML & CTF ### • Complex geopolitical landscape • Sanctions • Anti-bribery & Corruption ### • Fraud • Information & Data Security ### • Market Abuse / Insider Trading • Cyber-crime ### • Conduct of Business • Healthcare Regulations ### • Diversity, Equity & Inclusion ### T ### r a ### i n o n ### i n a t i ### g & E d u c Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 07 ## At a glance continued Strapline/intro TBC Revenue analysis ### Our brands Revenue can be analysed by segment as follows: ## [One business Total Revenue % of Group revenue 2022 2021 ## two divisions] Intelligence 49% 50% Training & Education 51% 50% ### [We are operating as 1 business with 2divisions Revenue can be analysed by geography as follows: ### thateach have a single technology platform, and ### multiple brands] Total Revenue % of Group revenue 2021 2021 UK 53% 55% Europe (excluding the UK) 21% 21% North America 18% 13% Rest of the World 8% 11% Image TBC ### 1. Intelligence 2. Training & Education Graphic Wilmington’s Intelligence division consists of businesses which This division provides compliance training and technical support for tbc provide must-have, authoritative risk and compliance data to a range customers across a range of industries including financial services, of industries globally, including insurance, pensions and healthcare. accountancy and healthcare. We offer a wide product range, including The information and data solutions provided by our brands in this formal qualifications, continuing education and mandatory training, division represent the gold standard in accuracy and timeliness, and through instructor-led and self-guided formats. Our excellence in this this capability is enhanced by the expertise of our research analysts area is underpinned by world-class and engaging course content, and industry practitioners, to ensure that we provide actionable insight developed in house by our team of experienced subject matter experts, to customers. Much of our data is developed by our own teams, and and enhanced by Wilmington’s strong digital subscription management we own the associated intellectual property. and dynamic delivery platform. | | | | | Intelligence revenue | | | | Training & Education revenue | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 49% | | | | | 51% | | | | | | Group | | | | Group | | | | | | | £[•]m | | | | £[•]m | | | | | revenue | | | | revenue | | | 49+51+L | | | | | 51+49+L | | | | | | Read more on [•] | | | | | Read more on [•] | | | Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 08 ## Strategy Strapline TBC By drawing on our core competencies we have embedded a set of defining characteristics into all of our brands which, in combination, drive progress against our three integrated strategic objectives. ## [Focused ### Wilmington characteristics: what makes us unique ## on growth] 1. Digital capabilities 2. Data enabled Our digital-first model demonstrates best in class digital Our businesses are data enabled, allowing them to capabilities including: provide unique insight and innovative solutions to their ### Wilmington’s streamlined operating model is underpinned by single customers, driven by: • Delivery platform agnostic ### technology platforms across each division, and its success is driven • Unique methods of data collection, measurement, • Multi-device enabled by the synergistic potential of its unique portfolio of brands. We have integration and analysis, supported by dynamic user • Excellence in User Experience (‘UX’) and User interfaces ### effectively delivered our strategic objective to achieve organic Interface (‘UI’) solutions • Proprietary data and bespoke services ### growth, and we continue to cement our position in the large and • Digital front and back office ### growing GRC market by investing in operational efficiencies and in ### the core competencies that drive our competitive advantage. | | 3. Differentiated offering | 4. Attractive markets | | --- | --- | --- | | | Our businesses occupy strong positions in the markets | The markets in which we operate present opportunities | | | they serve, exhibited via the following credentials: | for sustained growth: | | Grow | • Market leaders – within the top three | • Macro fit with Wilmington’s core markets | Generate growth and cement our position in the GRC market • Unique products with owned IP • Micro fit with a growing end-user base in which our solutions are integrated into customer systems • Strong brands valued highly by customers | | | 5. Strong product and revenue model | 6. Strong leadership | | --- | --- | --- | --- | | | | Our product and revenue model drives value by | Our businesses are led by individuals who are best | | | | targeting the following actions: | placed to accelerate their growth, evidenced by their | | Invest | Manage | | core competencies: | • Identifying attractive economics Invest in our businesses to Manage our portfolio to ensure • Experts in their field, aligning sector specific facilitate new product that all businesses exhibit the • Prioritising repeatable revenue streams knowledge to product development and delivery development, provide innovative unique characteristics that drive • Leveraging success across the portfolio to solutions to our customers, and our competitive advantage • Innovators seeking to embrace change to deliver maximise the benefit of synergistic potential fuel growth bespoke customer solutions Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 09 ## Strategy continued Image TBC Strapline TBC Graphic tbc ## [Delivering] ## growth] The delivery of our organic growth strategy reflects Investment focus: Developing single technology our clear focus on embedding the unique combination platforms of characteristics that define our competitive In addition to our People strategy, the investments we advantage across the Group, and in doing so have made in operational excellence focused heavily on further strengthened each of the brands within our enhancing our product, technology and data portfolio. The foundation for this growth has been the capabilities, as the key mechanisms to deliver high effective investments we made in our business to quality solutions to our customers. The success of this deliver operational excellence, by developing a work has provided the stepping stone for our next common approach in the key areas that progress our phase of investment, which began this year, to embed strategy. Following the restructure of our operating single technology platforms in each division. model in June 2021, we have focused on developing Training and Education division – single Digital single technology platforms to underpin the future Learning Platform growth of each division and drive our expansion in the The Platform integrates cloud-based technologies to a GRC market. single solution, creating a personalised ecosystem in Investment focus: Operational excellence which a customer can sign up to programmes, Over the past three years we have invested heavily in consume course materials through multi-media operational excellence to accelerate our growth formats, complete assignments and tasks, and repeat ambitions by developing the best-in-class approach to visit to access additional content. managing technology and data, sales and marketing, Intelligence division – single Data Platform talent, and product development. These investments Our Data Connect Platform is a single, common data have been underpinned by our work to embed a ® platform, deploying Snowflake technology to bring responsible business culture across the Group that together all our assets allowing us to offer a greater informs our strategic progress by supporting our data set to our clients delivered through intuitive data people to make decisions in a way that delivers long dashboards. We are offering API’s as standard to our term value. Full details of the progress we have made clients to enable the use of our data as an integral part against our sustainability strategy objectives during of their business processes. the year are outlined in the Sustainability report on pages [12] to [18]. This work includes the investments Investment focus – future progress we have made across all aspects of employee Our ongoing investment in operational excellence and experience and demonstrates how we are attracting single technology platforms is at the heart of our plan and developing the diverse, talented workforce that is to ensure that Wilmington continues to demonstrate central to our ongoing success. the agility to adapt and grow, both organically and through acquisition, as customer demands evolve and new market opportunities arise. By embedding common infrastructure and processes, the Group is well placed to effectively enhance and expand its unique offering. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 10 ## Chair’s statement Strapline TBC ## [Demonstrating ## the value of our ## diversified portfolio] The Group has emerged from the Covid-19 affected period to grow demonstrating their resilience in the face of ongoing uncertainty and ### I am pleased to present the Annual Report for the year revenues by 13% organically across all product areas, led by a strong challenges at this time. I would therefore like to take this opportunity to ### ended 30 June 2022. We delivered in line with our rebound in events where we have been able to run face-to-face events in thank all of our people for their continued support as we remain focused on strategy during the year, and the business also showed both Europe and the US all year. serving our customers to the highest standards and driving long term value. ### real organic growth resilience in both revenues and This revenue growth and continued focus on cost management has ### Current trading and outlook profits. We continue to realise the benefits of our resulted in profit increases at all levels. Our cash position also improved The effective strategic execution over the past twelve months has because of the conversion to cash of these higher profits and the sale of ### digital-first model, with associated efficiencies positioned the group well to expand its presence in the GRC and AMT during the year. ### demonstrated by our improved profitability. Regulatory Compliance markets, and to drive future growth. We have increased our dividend payments this year by [•]% with a final Trading has been encouraging in the first quarter, with good demand in all dividend by[•]p, resulting in a dividend yield back above the average for areas generating revenues and profits in line with expectation. We our marketsector. continue to manage the challenges caused by inflationary pressures, and pull out quote to be confirmed/supplied In June 2021 we implemented a new group structure and operating model the proven resilience of the Group provides reassurance that it is well to increasingly focus the business on the resilient and growing GRC and placed to withstand the impact of ongoing macro-economic volatility. ### [I would like to thank all our Regulatory Compliance markets. We report here on the performance of this structure and on the success of our investment in the business and ### employeesfor their continued the technology supporting it. We sold the AMT training business and a Martin Morgan ### commitment and resilience in smaller training reseller in the year and will continue to refine our portfolio Chair ### theseunprecedented times.] where appropriate. [•] September 2022 The effective execution of our strategy and the strong financial results we are reporting reflect the hard work and dedication of our talented teams. Our people continue to deliver the best quality in all areas, whilst Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Chief Executive's review ![img-0.jpeg](img-0.jpeg) # Results I'm pleased to present my report on the year ended 30 June 2022. We have executed our strategy by growing our revenues and profits organically in the markets we focus on, investing further in our business and the technology it runs on, and by actively managing our portfolio of brands. The business has demonstrated notable resilience, reflected by the strong financial performance. We have delivered organic revenue growth of 13% by growing all parts of our business – a result enhanced by a return to face-to-face events this year. Growth excluding events was 5% and reflects increased demand for our core offering in all product areas. We have also achieved a five-percentage point growth in recurring revenue, which now represents 37% of total revenue, driven by recent investments in sales and marketing capabilities. The increased revenues and a continued focus on operational efficiency and cost management resulted in adjusted PBT growth of 37.8% to £20.7m (2021: £15.0m) and a corresponding improvement in adjusted PBT margin to 17.1% (2021: 13.3%). This resulted in adjusted basic earnings per share being up 37.0%. We also are proposing a final dividend of £5.0 total of £5.0m. The Group moved into a net cash position (excluding lease liabilities) of £20.5m (2021 net debt: £17.2m) after the sale of AMT and a strong year of converting profits to cash. 8 Recurring revenues – those contracted at least one year ahead Wilmington plc Annual Report and Financial Statements 2022 Strapline TRC # [Embedding strong digital capabilities] # Strategy Following a comprehensive review of our portfolio in 2021, our strategic focus has been centred on building upon our already strong presence in the large, growing and rapidly evolving GRC and Regulatory Compliance markets. These markets are underpinned by strong macro drivers, particularly the increasing volume and enforcement of regulation, complex geopolitical landscape, increased importance of ESG and widespread adoption of technological and data-driven compliance solutions, all of which align strongly to Wilmington's core offering. At the heart of this focus on GRC and Regulatory Compliance markets is our ambition to help our customers to do the right business in the right way, by providing a complementary range of information & data and training & education solutions. Our operating model mirrors this core purpose – our Intelligence division provides specialist data and analytics that give customers the detailed insight they need to understand the regulatory landscape, and our Training and Education division delivers specialist training that equips them to navigate it successfully. As part of our strategy to focus on core areas we sold AMT during the year and have now identified a buyer for our small Spanish insurance business. We expect this divestment to be concluded in the first half of the 2023 financial year. # Investment programme Our approach to investment in the business continues to leverage our core competencies to embed the unique characteristics that define our competitive advantage into each of our brands. Our investment focus is on developing single technology platforms in each of our divisions, providing the foundation to accelerate our growth ambitions. Our investment during this calendar year in the development of single technology platforms will further differentiate us by providing unique solutions to our customers. They will also enhance our growth potential we retain the agility to respond to their ever changing needs in the rapid evolving GRC market. The implementation of single platforms in each division will also allow us to efficiently expand our offering by creating a scalable portfolio to enhance our growth potential. 4 of our brands in the Training and Education division are already benefiting from our Digital Learning Platform, and we are on track to have all brands within the division deployed to this common platform by December 2022. Our Data Connect Platform, deploying Snowflake® technology has already been rolled out to 5 of our Intelligence division brands, and will also be used across the division by December 2022. We continue to develop new products and identify clear organic growth opportunities, with the future potential for effective roll out of these great enhanced by our single platform approach. This strategy for maximising the value of our technology and data assets, combined with our streamlined operating model, provides the strong base from which we actively considering acquisition targets which complement and/or extend our capabilities. # Responsible business As we continue to help our customers to do the right business in the right way, we are committed to investing in the initiatives that support our own responsible business culture. We have achieved progress against our targets in all four areas of our sustainability strategy and this work continues to underpin our broader strategic objectives and risk management processes. Full details of this work can be found in our Sustainability report on pages 10 to 11. We have implemented the TCFD recommendations in full, concluding that we must continue to monitor the impacts of climate change on the Group risk profile, but that the potential opportunities that may arise from the transition to a low-carbon economy are well aligned to our core offering. We have committed to Net Zero carbon targets, with an ambition of absolute zero in respect of scope 1/2 emissions by 2028, and net zero in respect of scope 3 emissions by 2045. Mark Milner Chief Executive Officer 5 September 2022 Overmather 53 words/sign off Strategic Report Our Governance Financial Statements 1 # Review of operations # Intelligence | | 2022 £m | 2021 £m | Absolute variance % | Organic/ variance % | | --- | --- | --- | --- | --- | | **Revenue** | | | | | | Healthcare^{2} | **31.1** | 28.4 | 10% | 11% | | Financial Services & Other^{3} | **23.2** | 21.3 | 9% | 10% | | MiExact | **5.0** | 5.0 | 1% | 1% | | Discontinued | **0.3** | 2.1 | (86%) | | | **Total revenue** | **59.6** | 56.8 | 5% | 10% | | **Operating profit** | **11.4** | 9.3 | 22% | 22% | | **Margin %** | **19%** | 16% | | | “ pull out spots to be confirmed/supplied Overall information is a data-revenue group of young and outpatient institutions and new business events Wilmington plc Annual Report and Financial Statements 2022 ## Business model and market Wilmington offers a wide range of products and services through its Healthcare businesses predominantly around the provision of market and customer intelligence. The core of the data supplied comes primarily from publicly available sources. The value generated by our services is based around its collation, verification, combination with other complementary data sources and then its ease of presentation and usage. In some areas we provide proprietary analysis of the data and editorial comment which constitutes our own intellectual property. Wilmington's Healthcare businesses operate mainly in the UK and France and provide deep insight information on practitioners, facilities and treatments in the UK and French health sector markets that enable suppliers into those markets, including pharmaceutical companies, to understand and connect better with their customers. Revenue is mainly earned through sales of discrete packages of data or through subscription services for the ongoing provision of information. Additionally, in the UK we publish the Health Service Journal ('HSJ'), the leading online publication in the UK for healthcare leaders, with revenue generated through providing subscriptions to NHS foundation trusts, Clinical Commissioning Groups and suppliers to the NHS. The Financial Services/Other businesses operate in the Insurance, Pensions and Compliance markets. These businesses provide a broad range of information products and services with revenues generated primarily through subscription but also sponsorship, lead generation and event attendance. Identity & Charities rebranded as MiExact in the year as part of the restructuring of its product set begun last year. The MiExact business consists of a portfolio of data products including charity fund-raising information, and marketing data suppression tools. They include services that are used by organisations to help prevent identity fraud. Revenue is predominantly subscription based. ## Trading performance Overall Intelligence revenues grew 5% in the year, 10% organically. All businesses within the division grew organically in the period. Recurring subscription revenues grew four percentage points with strong retention rates. Healthcare revenues grew 11% organically in the year helped by the return to face-to-face events in the UK. Subscription revenues grew 7% with UK revenues up 12% and French revenues up 4%. Competitive pressure continued to challenge growth of Data revenue in some areas, but overall demand for these products was good. Financial Services revenues grew 10% organically with growth in Axco, Pendragon, Compliance Week and the held-for-sale Inese. Compliance Week and Inese benefitted from the return to face-to-face events while subscriptions grew well in Axco and Pendragon where retention rates were above 99%. MiExact revenues grew 1% after a slow first half was followed by a strong final quarter. Subscription revenues had a retention rate above 95%. Intelligence divisional operating profit grew by 22% helped by its revenue growth and continuing focus on its cost base. Operating margins improved to 19% from 16%. Organic: ibc 1 Organic – eliminating the effects of exchange rate fluctuations and the impact of acquisitions and disposals 2 UK Healthcare & APM 3 Pendragon Axco, Compliance Week & NESE Strategic Report Our Governance Financial Statements # Review of operations continued # Training & Education | | 2022 £m | 2021 £m | Absolute variance % | Organic variance % | | --- | --- | --- | --- | --- | | **Revenue** | | | | | | Global^{4} | **23.2** | 22.4 | 3% | 3% | | UK & Ireland^{5} | **22.1** | 20.3 | 9% | 9% | | North America^{6} | **11.0** | 4.9 | 125% | 122% | | Discontinued | **5.1** | 8.6 | (39%) | | | **Total revenue** | **61.4** | 58.2 | 9% | 18% | | **Operating profit** | **16.0** | 12.2 | 31% | 32% | | **Margin %** | **26%** | 22% | | | ## Business model and market The Global business comprises two units that operate in compliance markets. The largest business, which was developed organically within Wilmington, is the International Compliance Association (ICA), it is an industry body and training business that we created in 2002 which offers professional development and support to compliance officers predominantly in the financial services sector. It has offices in the UK, Singapore, Malaysia and Dubai. ICA primarily serves the financial services industry. The material for ICA courses is developed by our own internal R&D team, and external specialists, and we own the associated intellectual property. Revenue earned by ICA is primarily training income complemented by subscriptions paid by the professional members for their ICA accreditations. The courses ICA run usually extend over several weeks or even months. They traditionally mix distance learning with face-to-face sessions. The distance learning element has transitioned to online and digital variants, and virtual programmes have been offered in place of face-to-face sessions. To support the move to virtual training in ICA a new digital learning platform (hub) is being built – it was launched at the start of 2021 and further developments are due for release in the coming months. The other Global business, CLTI, earns revenue from running professional development programmes for wealth managers. Wilmington has an international presence, with centres in UK, Europe, and Asia Pacific and consistent investment in technology maintains the Group's competitive positioning. The AMT training business was sold in December 2021. Wilmington plc Annual Report and Financial Statements 2022 The North America business, FRA, is predominantly events based. They serve the US healthcare/ health insurance markets and, to a lesser extent, the US financial and legal service communities. The prime brand is the RISE series of events that address the Medicare and Medicaid markets and is attended by health plans, physician groups and solution partners. The flagship event is RISE National which normally takes place in Nashville in March each year. Revenue from the US events is generated from both sponsorship and delegate sales. The UK and Ireland business predominantly provides training for accountants in practice and in business and individuals involved in the legal system, including lawyers. It runs a mix of face to face, online and blended learning for these communities. It provides training at various levels including providing continuing professional development for existing qualified accountants and, in the case of the legal profession, helping them train their clients for interaction with the legal system. Additionally, it provides technical support to accountancy firms which enables them to keep abreast of technical developments and changes to regulation, as well as supporting them to promote the services they then offer to their clients. The small Irish reseller of training services (LaTouche) was sold in April 2022. Mercia (accountancy) and Bond Solon (legal) are predominantly UK and Ireland based, reflecting the country specific laws and accounting standards that govern their profession. Revenue in the unit is earned through clients subscribing for ongoing training support and other related activities over a period of time (usually twelve months), with the rest through one-off course attendance fees. Courses are typically single or half day events, and content is a mix of owned and third-party intellectual property. Courses are delivered either by in-house experts or by a network of independent tutors who are paid per course that they deliver. The Law for Non-Lawyers market is strong, with good ongoing demand for existing products as well as successful launches of new training courses. Growth in the accountancy market remains partially suppressed due to the impact of Covid-19, which compounded the challenges caused by continued consolidation of smaller firms, some Brexit uncertainty and a relatively stable backdrop in terms of tax legislation and accounting standards. Whilst not yet reaching its pre-Covid size, the accountancy market has returned to growth and demand is expected to benefit from upcoming legislative change in the UK. ## Trading performance Training & Education revenues grew 9%, and 18% on an organic basis. A five of the businesses within the division grew organically and recurring subscription revenues grew 9%. ICA revenues were up 3% as strong growth in the UK was offset by a drop in Singapore revenues after the exceptional growth there in FY21, but FY22 Singapore revenues were still nearly double their FY20 level, CLTI grew 4% and is focussed on increasing business in new territories in FY21. Bond Solon saw double-digit growth in FY22, driven by a strong increase in demand across the year. Mercia revenues grew 8% in the year, and despite still being short of its pre-Covid position the business is on track, recover the remaining shortfall. In the US, FRA more than doubled revenues as events returned to being face-to-face. Organic growth of 122% brought the business back to large revenues than the pre-Covid period (FY19) as demand from sponsors offset slightly lower delegate attendance than FY19. Overall divisional operating profit increased strongly by 31%, mainly due to increased revenues and tight cost management. As a result, the operating profit margin rose to 26% from 22% in FY21. Graphic fax 4 ICA & CLTI 5 Mercia & Bond Solon 6 FRA ![img-1.jpeg](img-1.jpeg) ## Strategic Report Financial StatementsOur Governance 14 ## Key performance indicators/operational measures ## Measuring At a Group level, we have fivekey ### financial and operational measures ### Throughout the Annual Report there is ## performance reference to the metrics set out below, which ### serve as alternative performance measures. ### Where adjusted measures are used in the report ### they are clearly presented and specifically used ### to provide a balanced view of the Group and its ### performance. The Directors believe that these Image TBC ### measures, which are not considered to be a ### substitute for or superior to IFRS measures, Graphic ### tbc provide stakeholders with additional relevant ### information and enable an alternative ### comparison of performance over time. Organic revenue growth ## +13% Definition and purpose Calculated by adjusting the year-on-year revenue change to exclude the impact of foreign currency exchange rate fluctuation and the impact of changes in the portfolio from acquisitions and disposals. This measure is used as it gives a comparable assessment of the underlying growth of the business and of its sustainability. Monitoring organic revenue growth also allows the Board to assess whether action is needed to control other aspects of the Group’s financial performance such as managing the cost base. Result Increased 13% (2021: 3%) driven by successful digitalisation programme, new product investment and the return to face-to-face events. Growth excluding events was 5% and reflects increased demand for our core offering in all product areas. We have also delivered 5% growth in recurring revenue, which now represents 37% of total revenue, driven by recent investments in sales and marketing capabilities. Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Key performance indicators/operational measures continued Adjusted profit before tax ("adjusted PBT") £m £20.7m +38% ![img-2.jpeg](img-2.jpeg) Definition and purpose Calculated as profit before tax, amortisation of intangible assets excluding computer software, impairments, other income (when it is material or of a significant nature), and other adjusting items. This measure is considered to reflect underlying profitability of the group before adjusting items and is a key metric used to determine management incentives, including within the Directors' bonus targets as set out in the Remuneration report. The Group policy on adjusting items and the calculation of adjusted PBT are set out respectively in notes 1 and 2 of the financial statements. Amortisation of intangible assets excluding computer software are excluded from adjusted PBT as they relate to historic acquisition activity rather than the organic trading performance of the business. This approach provides management with comparable information for day-to-day decision making. Result Increased by 38% to £20.7m (2021: £15.0m) reflecting increased revenues, a focus on operational efficiency and cost management, and continuing efficiencies of the digital-first model. Adjusted basic earnings per share p 18.66p +37% ![img-3.jpeg](img-3.jpeg) Definition and purpose This key measure indicates the underlying profit attributable to individual shareholders. It measures not only trading performance, but also the impact of treasury management, capital structure and bank and interest charges, as well as the efficient structuring of the Group to appropriately manage tax. Our business and financial strategies are aligned to delivering consistent growth in adjusted earnings per share and our incentive programmes are designed to support this strategy. Result Increased by 37% to 18.66p per share (2021: 13.62p) reflecting the increase in adjusted profit as discussed above. The underlying tax rate and number of ordinary shares were essentially unchanged. Cash conversion % 114% ![img-4.jpeg](img-4.jpeg) Definition and purpose Cash conversion represents the operating cash flow for the year as a percentage of adjusted operating profit before interest and amortisation. This measure is used as an indicator of successful stewardship of cash resources and corroboration of the quality of operating profits compared to the associated cash flow. Result 114% (2021: 104%) owing to a strong year of converting profits into cash through effective operational efficiency. Subscription and membership revenue as a percentage of total revenue % 37% ![img-5.jpeg](img-5.jpeg) Definition and purpose The Group continues to focus on a portfolio of asset based in key professional markets, facilitated by excellence in technology and data and dynamic sales and marketing. The development of a dynamic product portfolio has driven the Group's ambition to secure sustainable revenue streams, with multi-year and subscription packages sold for many revenue streams, including: - data, information, intelligence and solution sales; - professional education, training, events and services; - professional accreditation and assessment; and - large, industry-leading annual events. Result Subscription and membership revenue: 37% (2021: 38%) of Group revenue with the balance a mixture of revenue from annual events and revenue from customers who have a history of repeat purchase although not necessarily supported by formal multi-year contracts. Renewal rate from subscription and membership revenue was 92% (2021: 92%), reflecting Wilmington's robust product development process and high customer satisfaction. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 16 Image TBC ## Stakeholder engagement and non-financial information statement Graphic tbc Strapline TBC ### Our people The delivery of the Group’s strategic objectives is dependent on our ability to attract, develop and retain a highly skilled and motivated workforce. We strive to ## [Stakeholder create an inclusive culture in which diversity of thought, skills and perspectives helps us thrive. We are committed to strong recognition and reward strategies that fairly reflect the contributions our people make to help us progress. ## value creation] Engagement Our employee engagement strategy focuses on providing our people with platforms to actively participate in the Group’s decision making processes, ### Section 172 Companies Act 2006 and we are also committed to transparency around the issues that matter The 2018 UK Corporate Governance Code highlights the importance of most to them: Section 172 of the Companies Act 2006, requiring Directors to act in a way • Employee engagement survey results directly inform the development that promotes the success of the Company for the benefit of shareholders of the Group People Strategy. whilst simultaneously showing regard for the interest of its other stakeholders. • Global and brand level town halls provide a forum for leaders across The Board follows a robust decision-making process, which is designed to the business to engage with all employees. ensure that any decisions made reflect Wilmington’s responsible business culture. The key reference points for decision making by the Board are: the • Our internal intranet acts as a central policy and guidance portal, and impact on the Group’s overall strategic objectives; consideration of its also a communication platform for our employees to share principal risks and uncertainties; and positive alignment with the core experiences and network across the Group. values underpinning the Group’s sustainability strategy. At the heart of all • We are developing ‘Wilmington Communities’: networks of people of these factors is consideration of the Group’s stakeholders, because it is which stretch across diversity dimensions that will actively inform our these groups who have the greatest potential to create positive outcomes work to create an inclusive workplace. for the Group as it strives to create long term value. • Our performance development review process encourages honest and open conversations about personal development. • We are an accredited Living Wage employer and are committed to a fair and transparent reward and recognition structure. Read more: p[13‑14] ### Shareholders Support from our shareholders underpins the success of our strategy. We aim to provide fair, balanced, and understandable information to shareholders to clearly demonstrate strategic progress. Engagement We maintain a strong reporting process with regular digital content updates for shareholders via our website throughout the year. Our interim and year-end reporting periods conclude with analyst briefing sessions and investor roadshows, and our Annual General Meeting. The Executive Directors maintain close contact with shareholders and maintain strong relationships to facilitate one-to-one engagements and Further details on this decision-making process can be conference calls. foundin the Corporate governance report on Read more: p[40] pages[36] to [40] Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 17 Image TBC ## Stakeholder engagement and non-financial information statement continued Graphic tbc ### Customers The environment and communities ### Our customer-driven product management culture is key to our success weoperatewithin and ensuring that we truly understands the needs of our customers is We have a responsibility to have a positive impact on the environment and the critical to the viability of our future plans. communities we operate within. This responsibility plays an important part in protecting the wellbeing of our people, and in contributing to the future health of Engagement our planet for the benefit of all our stakeholders. We strive to put our customers at the heart of our product management process, and this means working hard to find solutions to meet their Engagement needs. Our key communication channels come in the form of Customer We are committed to carbon emission reductions, demonstrated by the Advisory Groups (‘CAGs’), feedback surveys and maintaining strong reduction in absolute emissions since our baseline year, and our Net Zero relationships with key accounts contacts. Central to our ambition to targets for future progress. Our carbon neutral commitment allows us to delivering excellent customer experience is the progression of our contribute further to carbon reduction initiatives, including a certified accessibility strategy, ensuring anyone who needs our products and biodiversity protection programme that facilitates long-term carbon storage. services can access them effectively. Our community and charity policy encourages our employees to engage Read more: p[15] positively with the communities we work within and gives all our people the opportunity to take paid volunteering leave. ### Suppliers Read more: p[16‑18, 29‑31] Strong relationships with our suppliers are crucial to ensure that the services we receive support the delivery of our own products effectively. We are also committed to ensuring mutually high standards of responsible business from our suppliers. Engagement We maintain strong and accessible communication channels with suppliers, to promote good relationships and to set clear expectations of the products and services we require. Our Supplier code of conduct clearly communicates to all our suppliers the high standards of responsible business practice we expect from them. Read more: p[16] ### Non‑Financial Information Statement This index constitutes Wilmington’s Non-Financial Information Statement, produced to comply with sections 414CA and 414CB of the Companies Act 2006. Reporting requirement Policies, processes and standards which govern our approach Page(s) Environmental matters Carbon reduction plan, environmental management policy, risk management process and approach [16-18, 29-31] to TCFD People Conduct and compliance policies, diversity and inclusion statement of intent, employee engagement [13-14, 25-26, 36] strategy, risk management process Respect for human rights Modern slavery statement, risk management process [25-28, 16] Social matters Stakeholder engagement strategy, sustainability strategy [10, 12-18, 36] Anti-corruption and anti-bribery ABC policy, risk management process, supplier code of conduct [10, 16, 22-24] Business model Business model, KPIs, stakeholder engagement strategy [2-4, 10] Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 18 ## Sustainability report continued ## Responsible ## 1 Cultural positivity 2 Customer empowerment ## business Core objective Core objective • Create an inclusive workplace that supports, empowers, • Deliver products that are accessible, high value, up to date and develops and fairly rewards all our people. move with industry trends. ## culture Delivering stakeholder value Delivering stakeholder value Wilmington exists to empower its customers to do the • Fostering a positive culture will attract and retain the best • Empowering our customers ensures our products are closely right business in the right way. At the heart of this talent, accelerating delivery of our strategy. aligned to their needs. commitment to customers is our own ambition to • Investing in our people benefits the communities we operate in • Our customer driven approach to innovation helps us stay agile by delivering exceptional employee experience. in the face of change. ### embed a responsible business culture that informs ### the way we work. Our sustainability strategy is Meeting our 2022 targets Meeting our 2022 targets • Diversity data collected for 75% of employees globally. • 8 week digital accessibility awareness and upskilling campaign ### underpinned by four core values that, collectively, delivered ### reflect this ambition. • Improved employee engagement scores against baseline year in key areas of focus. • Revised digital accessibility statements published by all As we successfully drive progress against our broader strategic objectives, we brands. remain committed to making sustainable business decisions by taking an iterative approach to materiality. By continuing to listen to our key stakeholders, • Clear roadmap to WCAG 2.1 AA standard developed. via the channels outlined on page [10], we continue to refine our sustainability strategy to ensure that it drives long term value for all of them. During 2022 we have made significant progress against the targets we set in 2021 for each pillar of our Sustainability Strategy, and we have also expanded the scope of our priority initiatives. Our iterative approach has allowed us to further ## 3 Proactive assurance 4 Environmental responsibility refine the strategic objectives in each area, which is helping us to better measure progress and continue to set challenging targets for the future. Core objective Core objective Key to this progress is our governance framework, designed to combine • Uphold high standards related to digital protection, regulatory • Reduce environmental impact by minimising carbon footprint board-level oversight with operational expertise and strong workforce requirements, ethics & production. and committing to responsible procurement. engagement. Delivering stakeholder value Delivering stakeholder value Board oversight Chair • Responsible digitisation and ethical conduct echo our core • Committing to environmental responsibility protects the future purpose and underpin our digital-first approach delivering the of our people and demonstrates to customers that we strive to Executive sponsorship Executive Committee best-in-class digital products. deliver products with minimal environmental impact. Strategic lead Group Finance and Sustainability Meeting our 2022 targets Meeting our 2022 targets Director • >98% acceptance of cyber security policy. • Performed Scope 3 gap analysis and set Net zero targets in Operational taskforce Subject matter experts, dedicated line with 1.5°C ambition. • 0 phishing incidents resulting in the loss of data. working groups and internal • Transitioned to renewable energy supplies across all occupied communities • 100% of products subject to continuous pentesting. UK sites. The ongoing work to drive progress against the core objective of each • Committed to carbon neutrality through verified high-quality pillar is discussed on pages [13] to [18]. offsets. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 19 ## Sustainability report continued Graphic Image TBC tbc Disability or long term health condition ### During the year we continued to establish robust ## Cultural initiatives that are creating an inclusive workplace to ### support, empower, develop and fairly reward all our No 88% ### people. This ambition is reflected by our clear ## positivity ### commitment to developing our Diversity and Inclusion ### strategy and by our investments in resources to Yes 8% ### create a positive environment for all our people to ### reach their full potential at work. Prefer not 4% tosay ### Commitment to inclusivity At the heart of our ambition to embed a culture of inclusivity at Wilmington is the work led by our Head of Diversity and Inclusion that celebrates the 0% 100%80%60%40%20% unique characteristics of our people. At the start of the year we set a target to start collecting richer data to help us better understand what our workforce looks like, and we achieved a 75% response rate from our Ethnicity workforce globally. By harnessing this data to measure diversity at Wilmington, we are better equipped to build a workforce that reflects the diversity of the communities we serve and work within. Our data collection approach was fully compliant with the relevant regulations in each White 84 jurisdiction. Black 3 ### What makes our people unique? Asian 9 Mixed 2 Other ethnic group 1 Age profile Prefer not to say 2 300 276 246 ## 250 83++3++99++22++11++22++HH 195 200 150 Gender identity 102 No. employees 100 50 28 21 0 Female 59 <25 25-34 35-44 45-54 55-64 65+ Male 37 Other 3 Prefer not to say 1 ## 59++37++33++11++HH Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 20 ## Sustainability report continued ### How are we driving progress Investing in our people Monitoring progress Internal engagement • Our ambition to create a positive culture is also aligned to our As we continue to hold ourselves accountable to driving positive cultural • Every brand within our portfolio has a dedicated D&I champion who commitment to our customers, who trust us because we are experts in change, we highly value strong engagement from our people to help us to has worked with their team to localise the global strategy to make sure our field and help them overcome their complex business challenges in understand what more we can do to enhance their experience at work. In it is most effective for their business area. GRC. To continue to support our people to deliver excellent customer FY22 93% of our workforce globally participation in our annual employee value we are therefore committed to attracting, developing and engagement survey, providing valuable feedback on the issues that matter • We established internal networks for Race and Ethnicity and Gender, investing in talented individuals who make up our teams. We take a most to them. to create forums for discussion and drive further insight into how we holistic approach to developing our people and celebrating their talent, can better support groups across these diversity dimensions. The work we have done to improve data collection in the year is providing so we continue to invest in leaning, wellbeing, recognition and reward us with a foundation on which to develop dedicated KPIs to measure our • We started work to align our talent acquisition strategy to our diversity to deliver the best employee experience for our people. future progress. Whist we continue to develop these KPIs, we are pleased ambitions. to have met our target to maintain or improve our score against key areas ### • We introduced the hashtag #wearewilmingtonplc to encourage our Investing in… of focus since the FY20 baseline year. people to share what is important to them and what makes them FY20 FY21 FY22 unique, so we can celebrate the diversity in our workforce. Learning and development Statement of cultural ambition Area of focus score score score • Launched people leaders programme to promote internal • We reviewed our policies to ensure they align with our ambition to People from all backgrounds are Diversity & progression and strong mentorship and support for our teams. demonstrate an inclusive culture. treated fairly at Wilmington Inclusion 8.1 8.4 8.3 • Delivered bespoke sales and product academies to support our My manager or a mentor ### Community engagement Group strategy. encourages and supports my Training & We know the value of expertise and insight, so we are partnering with • Launched personal career development platform with substantial development Development 7.4 7.7 7.8 experienced communities to enhance the effectiveness of our Diversity upskilling resource portfolio. and Inclusion strategy and to hold ourselves to account: Wilmington provides enough support for my mental and Health & • We are committed members of Inclusive Employers. Wellbeing physical wellbeing Wellbeing 6.3 7.8 7.4 • We have signed the BITC Race at Work Charter. • Expanded our network of mental health first aiders Further details of our approach to employee engagement can be found in • We are Disability Confident committed, with level 1 achieved and an • Created wellbeing champions network to promote a culture of the Section 172 statement on page [10]. ambition to meet levels 2 and 3. balance, health and fulfilment. Our work in this area contributes to: SDG 3 Good health and wellbeing, • We have integrated our diversity ambitions into our supplier code of • Continued to offer extensive wellbeing orientated benefits SDG 5 Gender equality, SDG 8 Decent work and economic growth; with a conduct to ensure we work with suppliers who also demonstrate a including global employee assistance programme, digital GP and focus on the below sub-indicators: commitment to inclusivity in the way that they work. healthcare support. 3.4 By 2030, reduce by one-third premature mortality from non- • Introduced a community and charity policy including volunteer communicable diseases through prevention and treatment and promote leave allowance for all employees. mental health and wellbeing 5.5 Ensure women’s full and effective participation and equal Recognition and reward opportunities for leadership at all levels of decision-making in political, • Comprehensively reviewed our reward strategy. economic and public life • Became an accredited Real Living Wage employer. 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with • Introduced global gender pay gap reporting to inform our strategy disabilities, and equal pay for work of equal value for closing the gap. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 21 ## Sustainability report continued Area of focus Principal objectives Investment in FY22 ## Customer Innovation, Embed a dynamicproduct • Development of single technology flexibility and management approach platforms in each division ## empowerment agility that can respond rapidly • Enhanced data analytic capabilities to change whilst across the portfolio to provide high maintaining high quality quality insight to customers outputs. • Hosted team events to promote ### We are committed to embedding a collaboration and innovation in digital ### customer-led approach to product learning ### 2022 Digital Accessibility ### development and delivery. We want our • Delivered bespoke training through the ### CampaignHighlights ### customers to directly inform our Wilmington product academy ### agenda, and by creating accessible, • Embedded a philosophy of iterative ## 5 ### high value, and up to date products we product roll-outs to produce relevant updates and stay close to change Training and awareness sessions with subject matter experts ### empower them to realise maximum ### value from our offering. Customer Ensure customers directly • Customer Advisory Groups (CAGs) and ## engagement inform the new product customer feedback questionnaires 6 We are committed to embedding a customer-led development agenda, and operational for all key product groups approach to product development and delivery. We Fireside chats with industry thought leaders facilitate strong want our customers to directly inform our agenda, and • Enhanced communication channels to communication channels by creating accessible, high value, and up to date allow customers to contact the business for customer feedback. ## products we empower them to realise maximum value 80 • NPD process directly informed by from our offering. Bite sized items of created and curated content customer referencing We have continued to invest in initiatives that build a • Development of an accessibility champion network with culture in which any individual involved in the product In line with our ambition to create an inclusive culture at Wilmington, we are committed to volunteers from each brand cycle is mindful of customer needs, such that they making sure our products are accessible to all. At the heart of this ambition, and key to the reflect those needs throughout the cycle from ongoing success of our digital-first model, is a high standard of digital accessibility across our • Formation of 3 specialist working groups to take the lead on best development to delivery. The underlying principles of internal and external product portfolio. Therefore we set ourselves a target to develop a practice implementation this product cycle are accessibility, innovation and roadmap to achieve WCAG 2.1 AA standards across our digital product base. We launched • Creation of a dedicated accessibility email address and solution agility, and strong customer engagement. this ambition with a comprehensive 8-week digital accessibility campaign to raise awareness delivery workflow process and upskill our teams. • Revised digital accessibility statements published by all brands Looking forward to FY23, the next stage of our roadmap towards our longer term target of WCAG 2.1 AA compliance includes further training initiatives to develop our specialist working Our work in this area contributes to: SDG 10 Reduced inequalities; groups, performing testing across our digital portfolio to identify priority actions and equipping with focus on sub-indicator 10.2 By 2030, empower and promote the our accessibility champion network to continue to raise awareness and keep accessibility at social, economic and political inclusion of all, irrespective of age, sex, the forefront of the product development process. disability, race, ethnicity, origin, religion or economic or other status. Our accessibility agenda extends far beyond our digital assets, and is an integral part of our wider Diversity and Inclusion strategy as discussed on page [13]. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 22 ## Sustainability report continued Graphic tbc ## Proactive ## assurance ### Ethical compliance Responsible digitisation Responsible business practice is at the heart of our strategy, and therefore Our customers rely heavily on quality data and advanced analytics we aim to instil a culture of strong ethical compliance across the portfolio. provided by our Intelligence division, and on reliable and engaging delivery Our ethics policies are designed to provide clear and consistent guidance formats in our Training and Education division. This reliance comes with to our people to ensure they contribute to these high standards of ethical positive assurance from our teams that we take a proactive approach to conduct, and are outlined for all employees in our internal policies. uphold the highest standards of cyber security and data privacy. One of the key elements of our core value of cultural positivity is that Our digital assurance process is governed by skilled individuals who Wilmington reflects a safe and inclusive working environment that maintain high levels of control and compliance in this area and implement encourages strong employee engagement and participation by all. best practice across three key integrated workstreams. We are also Management encourages this by advocating universal openness and dedicated to helping our technology experts continue to stay ahead of the transparency in respect of reporting non-compliance of any form, with ever-evolving risk of cyber security, with continuous update training and clear guidelines provided in the Group’s ABC and Whistleblowing policies. dedicated resources to enhance awareness. As we advocate high standards of integrity internally, we echo this We remain committed to the highest standards of compliance in this area sentiment in respect of our external stakeholders by taking a zero- and in the year we achieved our goals to deliver: tolerance approach to any forms of unethical behaviour within our wider operations and supply chains. • >98% acceptance of cyber security, acceptable use and data protection policies* ### During the year we: Investing in security: 2022 error • 0 phishing incidents resulting in the loss of data ### • Added 5 policies to mandatory policy acceptance process management and security Hackathon • 100% of internal products undergo continuous pentesting • Full-day live team event • Achieved >98% target for policy acceptance rate * policy acceptance data includes absent employees, therefore 98% effectively equates to • Hosted by international technology industry expert | • Expanded the scope of content included in mandatory compliance | | 100% of the present workforce | | | --- | --- | --- | --- | | | training | | • Promoted collaboration between colleagues | | • Integrated the requirement to demonstrate a commitment to | | | • Innovated around new subjects | responsible behaviour more comprehensively into our supplier • Problem solving workshop to bolster internal IT security control onboarding process processes Our work in this area contributes to SDG 16 Peace, justice and strong institutions, with focus on sub-indicator 16.6 Develop effective, accountable and transparent institutions at all levels. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 23 ## Sustainability report continued layout to be reviewed - see Excel | | Our commitment to environmentally responsible | Our targets | | --- | --- | --- | | Environmental | operations is an essential part of our contribution to | Scope 1&2 emissions: | | | creating a healthy planet for our people, our partners | • Absolute zero by 2028 | | | and our local communities to prosper. Our biggest | Scope 3 emissions: | • Near term: reduce by 52% from baseline by 2030 ## responsibility direct impacts on the planet come from resource use ### and emissions from our offices, and we continue to • Long term: Net zero by 2045 focus on transitioning to sustainable materials and Our reporting on energy use and GHG emissions is in line with the Streamlined ### methodologies to reduce this impact. Energy and Carbon Reporting (‘SECR’) legislation. To reflect our commitment to monitor, report and reduce our environmental impact, we have also ### Climate change, energy and carbon reporting increased the scope of our GHG reporting to include Scope 1,2 & 3 emissions In response to the climate crisis, we also recognise the need to accelerate in line with Science Based Targets Initiative recommendations. Image TBC action to ensure that our business plays an active role in the global effort to Energy use and GHG emissions have been assessed following the ISO address the impacts of climate change and the transition to a low carbon Graphic 14064-1:2018 standard and using the 2022 emission conversion factors economy. tbc published by Department for Environment, Food and Rural Affairs (‘Defra’) and In 2022 we committed to carbon neutrality by offsetting our Scope 1,2, and the Department for Business, Energy Industrial Strategy (‘BEIS’). The controllable Scope 3 emissions, through high quality accredited carbon assessment follows the market-based approach for assessing Scope 2 offset schemes focused on biodiversity protection and innovation in emissions from electricity usage. The operational control approach has been renewable energy technologies. used. All Group entities have been included in the assessment. We have set net zero carbon targets with a 2019 baseline year, aligned to a 1.5° trajectory, and have developed a carbon reduction plan to progress against these goals. We have set ambitious reduction targets in respect of Scope 1 and 2 emissions - well in advance of 2050 - and have worked hard to set challenging targets in respect of Scope 3 emissions despite the challenge of managing emissions from sources we do not directly control. 30 June 2019 | | Baseline (Tonnes | | | | 30 June 2021 | | | 30 June 2022 | | | Change | Change | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Global carbon footprint assessment | | of CO | e) | (Tonnes of CO | | e) | (Tonnes of CO | | e) | since baseline | | in the year | | | | | 2 | | | 2 | | | 2 | | | | Emissions from: Scope 1 – Direct emissions 77.45 32.21 8.14 -89.5 -74.7 Scope 2 – Indirect emissions 422.14 168.74 28.80 -93.2 -82.9 Total scope 1 & 2 emissions 499.59 200.95 36.94 ‑92.3 ‑81.6% | CO | employee ratio scope 1&2 (tonnes of CO | per employee) 0.59 0.24 0.04 -93.2% -83.3% | | --- | --- | --- | | | 2 | 2 | | CO | turnover ratio scope 1&2 (tonnes of CO | per £m revenue) 3.89 1.7 0.31 -92.0% -81.8% | | | 2 | 2 | Scope 3 – other indirect emissions 3,400.2 983.87 1,399.51 -58.8 42.2 Total (all scopes 1, 2 & 3) 3,899.79 1,184.82 1,436.45 ‑63.2 21.2% Total global energy consumption (kWh) [•] [•] [•] [•] [•] Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 24 ## Sustainability report continued New page for extra content added to Environment section | Reducing our environmental impact | 2021 waste disposal routes | They key activities we have implemented, and continue to | | --- | --- | --- | | Our Group strategy to drive investment in our | | develop, to reduce our environmental impact since our | | technological and data capabilities has had a significant | | 2019 baseline are: | impact on our ability to work in innovative ways that Image TBC • Performed a comprehensive review of office premises reduce our environmental impact. The capabilities we to consolidate our operations and improve efficiency now have to operate remotely whilst maintaining strong personal connections and high product quality have • Secured renewable tariffs for energy use at 100% of Graphic significantly reduced the environmental footprint from our occupied UK sites tbc travel by our workforce and our customers. Whilst this • Refurbished office sites to upgrade to energy efficient progress is positive, we also recognise the need to lighting solutions, consolidated resource use and address the impact of our digital footprint on the facilitate more effective waste management environment through energy consumption. Similarly, despite the significant reduction since our base year, in • Rapid digitalization of products to reduce the need for ## 60++30++1010++HH 2022 our emissions from travel have increased compared travel and improve efficiency of delivery to 2021 during which Covid-19 related restrictions Recycling 60 • Increased the scope of employee engagement significantly reduced our mobility. We are therefore Incineration with energy recovery 30 activities to raise awareness of sustainability and working on initiatives to adapt our approach to travel in a Landfill 10 encourage positive collective action way that allows us to reap the benefits of face-to-face interaction whilst minimising the associated carbon • Updated our business travel policy to encourage the 2022 waste disposal routes footprint. use of low carbon modes of transport We are also committed to reducing waste, and to • Introduced environmental commitments into our minimising the carbon footprint associated with the supplier code of conduct disposal of waste we do produce. Along with the Further details of our response to climate change are measures set out in our waste management policy on the outlined in our TCFD reporting index on page [31]. Wilmington plc website, we are also working with our landlords to set future targets to ensure 0% of waste from Our work in this area contributes to SDG 12 Responsible our offices goes to landfill. Since 2021 we have reduced consumption and production, and SDG 13 Climate action; the proportion of our waste that goes to landfill from 10% specifically 12.2: By 2030, achieve the sustainable to 6% of our total. management and efficient use of natural resources and 12.5: By 2030, substantially reduce waste generation ## 59++37++33++11++HH through prevention, reduction, recycling and reuse. Female 59 Male 37 Other 3 Prefer not to say 1 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 25 ## Financial review Strapline TBC | | | Absolute variance Organic | | | Adjusted profit before tax (‘adjusted PBT’) | | --- | --- | --- | --- | --- | --- | | 2022 | 2021 | | variance | | As a result of increased revenue and a continued focus on operational | | £’m | £’m | | | %£’m % | | efficiency and cost management, adjusted profit before tax, which Revenue 121.0 113.0 8.0 7.1% 13.4% eliminates the impact of amortisation of intangible assets (excluding computer software), impairments, other income and other adjusting items, Adjusted profit was up 37.8% to £20.7m (2021: £15.0m). before tax 20.7 15.0 5.7 37.8% 42.5% Margin % 17.1 13.3 [•] [•] [•] Adjusted profit margin (adjusted PBT expressed as a percentage of revenue) also increased to 17.1% (2021: 13.3%). Variances described as ‘organic’ are calculated by adjusting the revenue ### change achieved year-on-year to exclude the impact of changes in foreign Amortisation excluding computer software, ### currency exchange rates and also to exclude the impact of changes in the impairment charge and other income portfolio from acquisitions and disposals. Amortisation of intangible assets (excluding computer software) was £2.4m (2021: £3.4m). The decrease reflects certain historic assets being ### Revenue fully amortised part way through the prior year. Group revenue increased 7.1% overall and 13.4% on an organic basis, the overall increase reflecting £0.4m of foreign currency downside and the The non-cash impairment charge of £0.6m relates to the impairment of impact of disposals. Full details can be found in the Review of operations assets associated with an exercise performed to consolidate the Group’s on pages [7] to [8]. office space. Other income represents the net gain of £16.3m from the disposal of AMT ### Operating expenses before amortisation of and La Touche Bond Solon Training Limited, £1.3m gain on disposal of two ### intangible assets (excluding computer software) ## [3% organic growth buildings and their associated assets recognised as a result of the ### and impairments consolidation of the Group’s office space and £0.8m one-off financing Operating expenses before amortisation of intangible assets (excluding activities associated with capital management. computer software) and impairments were £99.4m (2021: £96.4m) up ## in revenue] £3.0m or 3.1%. ### Adjusting items within operating expenses Adjusting items within operating expenses of £0.1m (2021: £3.0m) are Within operating expenses, staff costs marginally increased £0.5m to those items that are one-off in nature and which do not represent the £55.2m (2021: £54.7m). This net increase reflects discretionary staff ongoing trading performance of the business. bonuses, £1.4m higher than the prior year as a result of the stronger trading performance in FY22. The increases were partly offset by salary ### Overview Operating profit (‘EBITA’) cost savings generated from a reduction in headcount post disposal of The Group performance was resilient and strong during the year, driving Operating profit was £37.0m (2021: loss £0.4m). The large increase is businesses. Share based payment costs increased £0.6m due to an organic growth in revenue and profit and reinforcing the strength of the driven by the impact of the other income items detailed above and a increased number of schemes due to vest. balance sheet, reflected by the closing net cash position. non-cash impairment in 2021, along with strong revenue growth and Non-staff costs increased by £2.5m to £44.2m from £41.7m in the prior effective cost management during the year. Adjusting items, measures and adjusted results year, reflecting the increased revenue and the anticipated return of some In this financial review reference is made to adjusted results as well as the face-to-face delivery costs including venue hire. Net finance costs equivalent statutory measures. The Directors make use of adjusted Net finance costs were £0.9m (2021: £1.6m), primarily related to the ### Unallocated central overheads results, which are not considered to be a substitute for or superior to IFRS decrease in interest payable on bank loans and overdrafts following the Unallocated central overheads, representing board costs and head office measures, to provide stakeholders with additional relevant information repayment of the revolving credit facility. salaries as well as other centrally incurred costs not recharged to the and enable an alternative comparison of performance over time. Adjusted ### businesses, increased £0.2m year-on-year to £4.5m (2021: £4.3m). Profit before taxation results exclude amortisation of intangible assets (excluding computer software), impairments, other income (when material or of a significant Profit before taxation was £36.1m (2021: loss £2.0m). A reconciliation of nature), and other adjusting items. this to adjusted profit before tax can be found in note 2. Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Financial review continued ## Taxation The tax charge for the year was £3.3m (2021: £2.5m) reflecting an effective tax rate of 91% (2021: negative 125.0%). The substantial decrease in the effective tax rate year-on-year reflects the nature of other operating income and adjusting items, specifically the gain on disposal of businesses in 2022 which was not subject to corporation tax, and the impairment charge in 2021 which was not deductible for tax purposes. The underlying tax rate which ignores the tax effects of adjusting items remained essentially unchanged at 21.0% (2021: 20.5%). ## Earnings per share Adjusted basic earnings per share increased by 37.0% to 18.66p (2021: 13.62p), due to the increase in adjusted profit before tax, a broadly flat underlying tax rate and an essentially unchanged number of issued ordinary shares (see below). Basic earnings per share was 37.46p (2021: basic loss per share of 5.18p) in the prior year, reflecting the increase in profit after tax. ## Dividend A final dividend of **£**p per share (2021: 3.9p) will be proposed at the AGM. This will give a full year dividend up **£**% to **£**p (2021: 6.0p) and dividend cover of **£**£ times (2021: 2.3). It approved it will be paid on 28 November 2022 to shareholders on the register as at 28 October 2022 with an associated ex-dividend date of 21 October 2022. ## Balance sheet ### Non-current assets Goodwill at 30 June 2022 was £61.1m (2021: £65.8m) which was primarily due to goodwill disposed of £62m for AMT. Additionally, a strengthening US Dollar led to an increase in the Sterling value of the US Dollar portion of the Group's goodwill. Intangible assets decreased by £4.6m to £9.4m (2021: £14.0m) due to amortisation of £6.1m, partly offset by additions of £1.3m within computer software reflecting the Group's continued strategy to invest in the existing businesses to fuel organic growth. Additions reflect the continued investment in Wilmington's digital transformation. Property, plant and equipment decreased by £2.4m to £6.9m (2021: £9.3m). The decrease in purchased property, plant and equipment was attributable to depreciation £2.4m, £0.6m impairment mentioned above and assets transferred to held for sale £0.3m relating assets held by these (see disposal group held for sale below), partially offset by additions £0.9m. ## Wilmington plc Annual Report and Financial Statements 2022 ## Deferred consideration receivable The deferred consideration receivable balance of £1.7m (2021: £1.8m) relates to the disposal of ICF in July 2016 with £1.5m recognised within non-current assets and the remaining £0.2m recognised within current assets. ## Disposal group held for sale As at 30 June 2022, the disposal group classified as held for sale relates to Wilmington Innes SL. The assets of the disposal group held for sale are £1.5m, including £0.8m of cash and cash equivalents, and liabilities of the disposal group held for sale are £1.3m. ## Trade and other receivables Trade and other receivables were £27.0m (2021: £28.7m). This decrease was mainly due to the disposal of AMT and La Touche Bond Solon Training Limited, which collectively comprised £1.4m within trade receivables in the prior year. ## Current tax asset At 30 June 2022 the Group recognised an asset relating to current tax of £1.3m (2021: £0.3m). The net asset position reflects a net repayment position. ## Trade and other payables Trade and other payables decreased by £4.7m to £50.3m (2021: £55.0m). Within this, subscriptions and deferred revenue increased by £1.3m or 4.3% to £31.4m (2021: £30.1m) and trade and other payables decreased £6.0m to £18.9m (2021: £24.8m). This increase in subscriptions and deferred revenue was driven in large due to the growth of subscription services in the year and a year on year increase in June sales. The decrease in trade and other payables was primarily driven by the unwind of payroll tax payments and better payment practices for amounts owed to suppliers. ## Provisions Provisions were £1.5m (2021: £1.8m), relating wholly to future committed costs associated with the closed portion of the head office space. ## Net cash, lease liabilities and cash flow Net cash, which includes cash and cash equivalents, cash classified as held for sale, bank loans (excluding capitalised loan arrangement fees) and bank overdrafts, and lease liabilities was £13.0m (2021: net debt of £28.0m). This significant net cash position is driven by a strong trading performance delivering improved profits, effective cash management as well as a significant cash inflow associated with the other income items mentioned above. Lease liabilities decreased to £7.5m (2021: £10.7m) which represents cash payments in relation to contractual lease obligations, offset in part by £0.3m of notional interest on lease liabilities reported within net finance costs. Cash conversion remained strong at 114% (2021: 104%). ## Share capital During the year 224,838 (2021: nil) new ordinary shares of £0.05 were issued to satisfy the Company's obligations under the SAYE Plan. During the year the Wilmington Group plc Employee Share Ownership Trust ('ESOT') purchased 170,097 ordinary shares for the purpose of future settlement of employee share schemes. On 30 September 2021, 37,435 shares vested under its Performance Share Plan settled via the ESOT. In April 2022 3,552 shares were used to satisfy the Company's obligations under the SAYE Plan. At 30 June 2022, the ESOT held 403,782 shares (2021: 274,672). ## Guy Millward ### Chief Financial Officer 30 September 2022 ## Strategic Report Financial StatementsOur Governance 27 ## Risks and uncertainties facing the business ## Identifying ## and managing our risks Responsibility for the Group’s system of risk management and internal Once identified, risks are reviewed and then incorporated into formal risk controls ultimately lies with the Board. Risk identification, assessment and registers held at both a Group and entity level, which evolve to reflect any management is central to the Group’s internal control environment, and changes to identified risks and the emergence of any new risks. Where it risk management is recognised as an integral element of the Group’s is considered that a risk can be actively mitigated to the benefit of the operating activities. business, responsibilities are assigned, and action plans are agreed. The Board is also responsible for determining the Group’s appetite for As well as assessing ongoing risks the Executive Committee considers risk, and the acceptable level of risk that can be taken on by the Group how the business could be affected by any emerging risks over the long and its individual operating entities when assessing its strategic term. Emerging risks are those which may develop but have a greater objectives (‘Wilmington risk appetite’). The Board sets and clearly uncertainty attached to them. Twice per annum Managing Directors communicates its local risk appetite to the business leaders responsible (MDs) and Heads of Group Functions are asked to highlight any new or for executing their activities in various locations across the global emerging new risks, these are then reported to the Board and monitored portfolio. The guidelines set in response to the Group’s risk appetite are on an ongoing basis. complemented by the Group’s comprehensive portfolio of policies Our risk assessment process provides a clear framework for identifying governing conduct, including its Anti-Bribery and Corruption (‘ABC’) and and managing risk, both at an operational and strategic level, and has Modern Slavery guidelines, and in accordance with delegated authority been designed to be appropriate to the ever-changing environments in limits. The Group’s Risk Assessment covers a three year period, as is which we operate. consistent with the period of assessment used in its strategic planning process and viability review. The Wilmington Executive Committee coordinates and facilitates the risk assessment process on behalf of the Board. The Executive Committee reports directly to the Board using a combination of structured formal interviews, monthly operational updates, site visits, ‘bottom up’ reporting and registers (together, the ‘Risk Assessment’). The Risk Assessment covers both external and internal factors and the potential impact and likelihood of those risks occurring. Twice per annum the Audit Committee discusses the report received from the external auditors regarding their review and audit procedures; which include comments on their findings on internal control and risks. Image TBC Graphic Wilmington plc tbc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 28 ## Risks and uncertainties facing the business continued ### Risk management structure, roles and responsibilities Wilmington risk appetite The Board regularly reviews the Group’s key risks and is supported in the discharge of this responsibility by various committees, The Group’s approach is to minimise exposure to reputational, financial specifically the Audit Committee. The risk management roles and responsibilities of the Board, its Committees, and business and operational risk, whilst accepting and recognising a risk/reward management are set out below, and all these responsibilities have been met during the year. trade-off in the pursuit of its strategic and commercial objectives. The provision of solutions primarily to the Governance, Risk and Compliance ### Board Responsibilities Actions market, means that the integrity of the business and its brands is crucial and • Approve the Group’s strategy and objectives • Assess managements strategic decisions in the cannot be put at risk. Consequently, it has zero tolerance for risks relating to Ultimate responsibility for context of it’s risk appetite. non-adherence to laws and regulations (‘unacceptable risk’). The business, • Determine Group appetite for risk in achieving its riskmanagement strategic objectives • Receive regular risk updates from the businesses however, operates in a challenging and highly competitive marketplace that is constantly changing not just in regulation and legislation but also for new • Establish the Group’s systems of risk management technology and process innovation. and internal control It is therefore part of day-to-day planning to make certain financial and ### Audit Committee Responsibilities Actions operational investments in pursuit of growth objectives, accepting the risk • The Audit Committee supports the Board by • Receive regular reports on the internal and external Support to the Board that the anticipated benefits from these investments may not always be monitoring risk and reviewing the effectiveness of audit and other assurance activities fully realised. Its acceptance of risk is subject to ensuring that potential Group internal controls, including systems to identify, • Determine the nature and extent of the principal Group benefits and risks are fully understood and sensible measures to mitigate assess, manage and monitor risks. risks and assess the effectiveness of mitigations risk are established. • At least annually review the effectiveness of risk management and internal control systems ### Emerging risks • Review the adequacy of the Group’s key conduct The Group recognises that the global climate crisis is a significant driver of policies future socio-economic and environmental change, and accordingly presents potential risk to the Group’s ability to deliver its strategic objectives. Responsibilities Actions During the 2022 risk assessment and strategic planning processes, the ### Executive Committee • Strategic leadership of the Group’s operations • Review of risk management and assurance activities Group conducted a detailed review of the potential risks that may arise as Ongoing review & control and processes a result of climate change. Following the review management concluded • Ensure that the Group’s risk management and other that impacts of climate change should continue to be high on the agenda policies are implemented andembedded • Respond to notifications of changing and emerging risk within their area of business responsibility of its strategic planning and risk assessment processes, but should not be • Consider emerging risks in the context of the Group’s classified as a discrete principal risk, justified by two key outcomes. strategic objectives • Govern monthly/quarterly finance and performance reviews 1. The review demonstrated that the Group’s business model and its • Monitor the application of risk appetite and the effectiveness of risk managementprocesses. • Review key risks and mitigation plans and consolidate strategy has an inherent resilience to the impacts of climate change for Group risks the following reasons: • Monitor the discharge of their responsibilities by operating entities • Review the three year strategic plan • Lack of direct reliance on the natural resources impacted most • Review results of assurance activities heavily by climate change to deliver its products. • Escalate key risks to the Board • Proven agility and resources to facilitate relocation of operations & events or transition to digital alternatives if an extreme climate event occurs. ### Senior Leadership Responsibilities Actions • Maintain an effective system of risk management and • Regularly review operational, project, functional and ### Team • Presence across different markets in different locations and no internal control within their function/operating strategic risks significant customer concentration in the sectors at most risk of Ongoing risk assessment company • Review mitigation plans severe disruption from climate change. • Maintain strong and timely communication with the • Plan, execute and report on assurance activities as • Strong alignment of its core offering to potential transition impacts Executive Committee in respect of emerging and required by entity, region or group. specifically in relation to new policy, regulatory change, and data changing risks. and information insights and analysis. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 29 ## Risks and uncertainties facing the business continued ### Emerging risks continued 1. Market and innovation 2. The business risks associated with climate impacts identified in the Supporting sustainability pillar(s): review strongly aligned to those that already sit on the Group’s risk 9 CE PA High >80% register. The potential for climate change to significantly disrupt the Group’s operations would manifest itself either through physical Description disruption to our people, customers, suppliers and their working The specialist markets we serve are highly competitive, these markets environments or through market disruption triggered by the transition experience growth, decline, consolidation and disruption which change to a low carbon economy. The risks associated with these disruptions customer needs and preferences. are specifically addressed by our existing principal risks, and therefore 3 These factors combined mean that if we do not continually innovate and invest the Board gained comfort that the management of climate change 1 in our business we will not deliver the organic growth required to maintain 6 4 risks is well aligned to, and can be effectively integrated with, the 20–80% Medium acceptable margins and best in class returns over the long term. existing principal risk mitigation strategies. Likelihood Details of the specific impacts considered and how these align to our Mitigation existing principal risk mitigation strategies are disclosed on pages [29] Product management is a key area of focus for the progression of the Group’s strategic objectives. to[30]. 7 2 The Group has a dedicated New Product Development (NPD) framework, 10 ### Principal risks managed by an Investment Committee. The objectives of the committee are to Low <20% 8 510 actively encourage innovation whilst maintaining strong governance and rigour During the year the Directors have carried out an assessment of the around internal investment and provide detailed post-investment appraisal. principal risks facing the Group – including those that would threaten its business model, future performance, solvency or reputation. The ten key Depending on the size of the initiatives, Board or Investment Committee approval is required to ensure that the Group’s significant projects are aligned risks and uncertainties relating to the Group’s operations, along with their Financial impact to the overall strategy. potential impact and the mitigations in place, are set out below. There may Low Medium High be other risks and uncertainties besides those listed below which may <£1m £1–2m >£2m Within the product development framework, we have implemented a methodology which involves stripping back requirements to the ‘minimum also adversely affect the Group and its performance. More detail can be 1. Market and innovation 6. Technology and speed of viable product’ which serves the fundamental needs of our customers and then found in the Audit Committee report on pages [41] to [42]. change 2. Lack of changes to regulations adopting ‘customer advisory groups’ to learn what additional features would be and legislation 7. Remoteness of operations and of value to our customers. This iterative roll-out process ensures more effective As part of their assessment, the Directors reviewed the principal risks in globalisation and focused product development that continually responds to customer the context of their potential impact on the Group’s ability to achieve its 3. People needs. 8. Dependency on key data strategic objectives as set out on pages [22] to [26]. 4. Intellectual property rights sources This approach has proven highly effective in the ongoing development of our infringement The Group’s sustainability strategy defines the responsible business 9. Major incidents hybrid delivery model, and in respect of product enhancements that 5. Failure or significant interruption culture advocated by the Board that directly contributes to the effective differentiate our offering and define our competitive advantage. to IT systems causing disruption 10. Reputational risk management of the Group’s risks, helping to enhance the delivery of its to client service broader strategic objectives. Therefore the four pillars of the sustainability Change since 2021 strategy have been mapped to any principal risks for which the associated Same risk ### Change to risk activities contribute a valuable element of the mitigative action, being: Since 2019 the Group recognised a principal risk relating to IR35 Tax Cultural positivity (‘CP’), Customer empowerment (‘CE’), Environmental Reform, and the associated impact of the new legislation on the operation responsibility (‘ER’), Proactive Assurance (‘PA’). of the Group and it’s relationship with contractors providing key services. In the prior year, this risk was downgraded to be classified as low In summary, our principal risks in the context of the strategic goals and Supporting sustainability pillars likelihood, low financial impact due to the successful implementation of viability review are mapped over a three year period as follows: processes to manage the transition. Processes and controls in place to Cultural PositivityCP Customer EmpowermentCE effectively manage IR35 Tax Reform have subsequently been fully integrated into the Groups broader contractor and employee Proactive AssurancePA Environmental ResponsibilityER management structure, and therefore the Board considered it appropriate to remove the risk from the Group’s principal risks at 30 June 2022. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 30 ## Risks and uncertainties facing the business continued | 2. Lack of changes to regulations and legislation | | 3. People | | 4. Intellectual property rightsinfringement | | --- | --- | --- | --- | --- | | Supporting sustainability pillar(s): | | Supporting sustainability pillar(s): | | Supporting sustainability pillar(s): | | CE | PA | CP | ER | PA | Description Description Description Wilmington’s businesses operate in the GRC and Regulatory Compliance The implementation and execution of our strategies and business plans depend Protection of our intellectual property builds competitive advantage by markets. The product portfolio is therefore heavily centered around helping heavily on our ability to recruit, motivate and retain a diverse workforce of skilled strengthening barriers to entry. Our intangible resources include data, customers manage the operational complexity and increased risk caused by employees and management - particularly senior management, subject matter processes, technological know-how, branding and our workforce. wide-ranging laws, regulations and legislation. experts and those with technology and data analytics capabilities. Intellectual property rights are integral to the Group’s success. Changes to the regulatory landscape offer opportunities for Wilmington to An inability to recruit, motivate or retain such people could adversely affect our leverage its knowledge and expertise to assist clients and customers with the business performance. Mitigation change. Failure to recruit and develop a diverse talent base for the Group that does not We take a zero tolerance approach to any intellectual property infringement A lack of regulatory change would reduce new opportunities for growth and reflect the diversity of the customers we serve could also adversely affect our and will take all necessary action to enforce our rights and proactively identify demand for existing products and services. reputation and business performance. infringements. Wilmington’s policy is to litigate against any infringement of our intellectual Mitigation Mitigation property rights. We actively monitor Government regulatory bodies and relevant committees to We advocate positive employee experience as a core priority for all parts of our Operating businesses are actively encouraged to develop and protect the ensure that we understand the future landscape. This enables us to position business, and we have a comprehensive People strategy to support this ambition. know-how in local jurisdictions. both our existing and new products and services to help better deliver to our The work of our People team covers an extensive range of issues that clients and customers. contribute to the development of a positive culture that is vital as we attract, Change since 2021 Local plans are updated as part of the internal strategic planning process to retain and develop talent. Same risk enable us to respond quickly to market information and economic trends. The work of the People team, with the sponsorship of the Board and the Continual monitoring of market conditions and market changes against our Executive committee, delivers a wide range of services to enhance employee Group strategy, supported by the reforecasting and reporting in all of our experience. These are underpinned by dedicated strategies that drive progress businesses, is key to our ability to respond rapidly to changes in our operating across the following key areas of focus: environment. • Diversity and Inclusion The ongoing volatility of the global economy, and associated societal impacts, indicates that continued regulatory and legislative change is likely in the short • Reward and recognition to medium term. However the Group continues to innovate and diversify its • Talent acquisition and development product portfolio by offering more value-added products which are less dependent on changes in regulation. A core focus of our model, and a key • Wellbeing characteristic of our business is our ability to leverage our strengths to quickly • Engagement adapt to changing customer requirements. This agility has underpinned the agility of our business model to continue to deliver growth during periods of The Group operates a competitive remuneration package that is enhanced by share significant uncertainty and change. plans for certain senior management, and also operates a Save As You Earn scheme for UK employees to further align the interests of employees and shareholders. Change since 2021 Same risk Change since 2021 Same risk Supporting Cultural PositivityCP Customer EmpowermentCE Proactive AssurancePA Environmental ResponsibilityER sustainability pillars Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 31 ## Risks and uncertainties facing the business continued 5. Failure or significant interruption to IT systems 6. Technology and speedofchange 7. Remoteness of operations and globalisation ### causing disruption to client service Supporting sustainability pillar(s): Supporting sustainability pillar(s): Supporting sustainability pillar(s): PA PA PA Description A key operational risk emanates from the remoteness of operations away from Description Description key management personnel, and from the increasing global spread of our Major failures in our IT systems may result in client service being interrupted or data Digital and technological transformation is now moving at a fast pace across businesses. being lost/corrupted causing damage to our reputation and/or a decline in revenue. the globe, disrupting value chains and transcending the traditional ways of conducting business. There is a currency risk from operating in a large number of countries. There is a risk that a cyber attack on our infrastructure by a malicious individual or group could be successful and impact critical systems used across the Group. Digitisation continues to drive significant change in our customers’ business models, and in their appetite for products that align to these changes. Although Mitigation digital and technological transformation offers Wilmington opportunities for Control is exercised locally in accordance with the Group’s policy of Mitigation growth and value creation, it comes with its own set of challenges and risks. autonomous management. We seek to employ high quality local experts. Our IT infrastructure is supported by a UK based third-party specialist, and is consistently reviewed and improved to ensure the best quality experience for The Executive Committee ensures that overall Group strategy is fulfilled both our employees and our customers. As part of the management strategy we Mitigation through ongoing review of the businesses. The creation of centrally managed have a shared hosting facility for our internal systems, giving us Tier 3 and ISO Our NPD process described in key risk 1 enables and encourages product and divisional level oversight of finance, technology and people strategies 27001 data centres for extra security and a common disaster recovery position. innovation throughout our business. This has improved our rate of innovation to provides a central insight into local operations and allows more central control deliver ‘client centric’ products. than would be possible with geographically distributed functions. We continued to focus on recruitment, retention and training of highly skilled internal IT and data specialists to ensure we demonstrate best practice service Our technology and data teams have a significant range of valuable We manage currency risk in local operations by matching revenue and costs in management. experience, including that gained in mature digital organisations. We actively the same currency, closely monitoring our cash position and, where applicable, deliver projects in an “agile” fashion using strong product management taking a low risk approach when applying treasury policy. We continue to roll out mandatory cyber security training for all staff to increase methodologies. the awareness of this increasing threat. In addition, our outsourced IT infrastructure partner proactively monitors our network periphery for potential The rapid digitisation of our business in response to the Covid-19 pandemic Change since 2021 cyber-attacks. We also run education and simulations of cyber-attacks for staff demonstrated our ability to rapidly adapt to change in this area. The lessons Same risk to further increase awareness and reduce this risk. learnt in that period of rapid transformation continue to guide our strategies for future development and effective mitigation of the risk that we will be Specific back-up and resilience requirements are built into our systems and we challenged by rapid technological change. are increasingly becoming more cloud based. Our critical infrastructure is set up so far as is reasonably practical to prevent Change since 2021 unauthorised access and reduce the likelihood and impact of a successful attack. Same risk Business continuity and disaster recovery plans are in place and are assessed continually to ensure that they cover the residual risks that cannot be mitigated. The Group also outsources the hosting of all websites improving resilience, efficiency and scalability. Change since 2021 Same risk Supporting Cultural PositivityCP Customer EmpowermentCE Proactive AssurancePA Environmental ResponsibilityER sustainability pillars Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 32 ## Risks and uncertainties facing the business continued | 8. Dependency on keydatasources | 9. Major incidents | | 10. Reputational risk | | | --- | --- | --- | --- | --- | | Supporting sustainability pillar(s): | Supporting sustainability pillar(s): | | Supporting sustainability pillar(s): | | | PA | CP | PA | CP | PA | Description Description Description Wilmington generates a significant amount of revenue from the sale of, or the We operate internationally and are exposed to major incidents and global Description licensed access to, data. This data is often sourced from third parties who events. These can be caused by extreme weather, natural disasters, major Much of the Group’s revenue is generated by training clients in matters of provide to Wilmington either exclusive or non-exclusive licences to use the disease outbreak, military action, civil unrest or terrorism. regulatory compliance, or by hosting events that debate such topics. data. In most cases, there is relatively little businesses can do to control causes of If the Group were to suffer a compliance breach itself then prospective clients There could be a significant decrease in the Group’s revenue if Wilmington were major incidents. Major incidents have the potential to cause harm and injury to may call into question its fitness to provide such training or host such events. to lose these licences completely or in the case of exclusive arrangements if we people, venues and facilities and severely interrupt business. Our face-to-face were to lose the exclusive rights. events and training business is particularly vulnerable to this type of risk. The overseas entities in the Group are exposed to bribery and compliance breaches. Non-compliance with the territories legislation could cause reputational damage to the Group. Mitigation Mitigation We monitor key data licence contracts across the business to ensure that all The Group continues to carefully manage the proportion of its income key contracts that are close to expiring are identified as early as possible. generated from large face-to-face events to reduce exposure to this risk. It also Mitigation continues to focus on a hybrid delivery model for all of its products to allow The Board maintains a zero-tolerance approach to non-adherence with laws We have close working relationships with the third parties to these contracts adaptation in the event of a major incident. and regulations. This is clearly communicated to employees and is reinforced and aim to start negotiations to extend the contracts at an early stage to give through the Company’s internal communications. Wilmington the best possible chance of renegotiating and extending the The Group’s events function also have event-specific strategies to mitigate the contracts. risk of disruption from major incidents, including selecting well connected The Board receives regular updates on changes to applicable legislation and locations with reliable infrastructure systems and seeking flexible agreements regulation and plans, both in the UK and overseas in order to adopt them across with venues to increase the potential to transfer or postpone events if the Group. Change since 2021 disruption does occur. Same risk Individual businesses operate under specific independent brands, and this The Covid-19 pandemic demonstrated that a major incident does have the helps mitigate the potential fall-out across the Group if there was an issue in any ability to impact multiple locations over a protracted time period. However, specific business. continued innovation and investment across the Group has demonstrated that The Group also has a policy to retain emails for a limit of two years to prevent the ability to operate on a 100% digital basis provides significant mitigation to loss of key data. this risk. The Group assesses the value of insurance cover for cancellations on a case Change since 2021 by case basis, to ensure the associated cost and reliability of cover is Same risk considered economical. Change since 2021 Same risk Supporting Cultural PositivityCP Customer EmpowermentCE Proactive AssurancePA Environmental ResponsibilityER sustainability pillars Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 33 ## Climate change – impact and adaptation ## [Climate-related ## risks and opportunities] As we continue to assess the impacts of climate change on our business, and associated mitigation strategies, it has been mapped to the relevant we have further aligned our work with the recommendations of the Task principal risk. Each impact identified has also been classified in relation its Force on Climate-related Financial Disclosures (TCFD). Central to this potential to increase exposure to a risk or generate viable new market work has been the analysis performed during the year to assess opportunities. climate-related risks and opportunities, and to consider different outcomes depending on potential future scenarios. Classification Exposure: Potential: Result of Effectiveness of associated We anticipate that climate change will have a wide range of impacts on all risk mitigation opportunity of our stakeholders because of the strong interconnection between environmental conditions and societal change. Therefore whilst our Low Prevent material Unlikely to generate business model exhibits an inherent resilience to the worst physical impact on strategic financial returns impacts of climate change, our assessment highlighted that the transition progress to a lower carbon economy will have direct implications for our core Moderate Reduce extent of Could generate offering in the Governance Risk and Compliance market, and that the material impact on immaterial financial broader impacts of both physical and transition risks will affect how our strategic progress returns people, customers and suppliers operate effectively. High Failure to prevent Could generate ### Governance and responsibilities material impact on material financial Board oversight of the Group’s response to climate change sits with the strategic progress returns Audit Committee Chair, and ultimate responsibility for management sits with the Chief Financial Officer. Responsibility for day-to-day ### management sits with the Group Finance and Sustainability Director, in Quantifying the impacts collaboration with the Executive Committee and Senior Leadership Team. The focus of our assessment has been to perform a robust qualitative This approach to governance is integrated with the Group’s broader analysis that can be used to effectively inform our response to climate strategic planning process, its sustainability governance framework as change as an integral part of the Group’s strategic planning processes. outlined on page [12], and the Group’s risk assessment process as Whilst we have not quantified these impacts specifically, the nature of the described on pages [22] to [26]. most relevant issues identified aligned strongly to those assessed as part of the Group’s viability assessment. As disclosed on page [32], as part of ### Impact assessment this assessment we modelled the potential financial impacts of the Our assessment identified ten potential climate change impacts that are Group’s principal risks over a three year period. Reference to this viability relevant to Wilmington, and these include both physical impacts and those testing therefore provided scope to validate the reasonableness of our related to the transition to a low carbon economy. The strategic assumptions regarding which climate impacts could have a material implications of each impact identified have been considered in the context impact on the financial returns of the Group in the short term. Whilst the of their potential to disrupt or enhance the Group’s potential to deliver its medium and long term implications have not been quantified, the broader strategic objectives, as summarised on pages [29] to [30]. Where assessment and scenario planning analysis has demonstrated that the Image TBC a climate-related risk aligns strongly to one of the Group’s existing risks nature of the impacts would be strongly aligned over these time periods. Graphic tbc Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 34 ## Climate change – impact and adaptation continued Climate impacts Exposure / Potential Strategic implications and response summary Physical Extreme climate events disrupt office and Risk: Low Inherent resilience through agile workforce and hybrid working practice. Continue to invest in technological capabilities and review resilience home-working infrastructure of office infrastructure as part of ongoing strategic planning and capital investment processes. Maintain strong employee engagement and ### impacts Opportunity: N/A support. | | | Principal risk alignment: | 3 | – People, | 5 | – IT system disruption, | 9 | – Major incidents | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Extreme climate events disrupt face-to-face | Risk: Low | Inherent resilience due to digital-first model and hybrid delivery capabilities. Continue to follow risk mitigation plan integrated into face-to-face | | | | | | | | events or training, and business development | | events planning process. Continue to factor potential costs of transition to virtual alternatives into budgetary planning process. | | | | | | | Opportunity: N/A | opportunities | | | 5 | | 6 | | 9 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Principal risk alignment: | | – IT system disruption, | | – Technology, | | – Major incidents | | Sector specific physical impacts disrupt | Risk: Low | Relatively low customer concentration in high exposure categories. Requirement for regulatory insight and training likely to increase due to | | | | | | | | customers in high exposure categories | | climate change triggering further reliance on our services. Continue to innovate and provide mission critical information and training to | | | | | | | Opportunity: Moderate customers to protect revenue streams. Principal risk alignment: Extreme climate events cause supply chain Risk: Low Inherent resilience through low supplier concentration and limited reliance on raw materials. Continue to assess viability risk of material disruption suppliers in line with risk policy. Opportunity: N/A | | | | Principal risk alignment: | 5 | – IT system disruption | | --- | --- | --- | --- | --- | --- | | Transition | Transition to low carbon economy triggers shift in | Risk: Low | Strong alignment to GRC market focus. Maintain strong communication channels with customers and continue to innovate to meet changing | | | | | customer markets | | needs. Integrate climate-related content and solutions into core data and training products. Successful realisation of opportunities is | | | | impacts | | Opportunity: High | | | | dependent on talent, innovation and operational effectiveness. Principal risk alignment: 1 – Market and innovation, 3 – People, 6 – Technology, 8 – Data source reliance Changing attitudes to business travel Risk: Low Inherent resilience due to digital-first model. Maintain flexibility to offer hybrid delivery and focus on quality in digital alternatives to face-to-face products. Maintain strong communication with customers via virtual formats. Opportunity: N/A Principal risk alignment: 5 – IT system disruption, 6 – Technology Evolution of carbon taxes Risk: Low Limited exposure due to industry focus. Maintain strong visibility of potential future cost and compliance implications as part of budgetary planning processes. Maintain focus on updating core product offering to align to associated regulatory change. Opportunity: Moderate Principal risk alignment: 10 – Reputation Policy change regarding domestic infrastructure Risk: Low Exposure limited to workforce disruption caused by domestic infrastructure changes. Continue to provide office premises for effective operations, and maintain commitment to real living wage. Opportunity: N/A Principal risk alignment: 3 – People Increased corporate reporting requirements Risk: Low Limited exposure due to strong internal reporting processes. Maintain strong internal processes to ensure timely integration of policy change into training material and associated services. Opportunity: High | | | Principal risk alignment: | 1 | – Market and innovation, | 2 | – Regulation | | --- | --- | --- | --- | --- | --- | --- | | Stakeholder expectations of Wilmington’s | Risk: Low | Limited exposure due to strong commitment to participation in the climate agenda. Future talent attraction and retention, and good customer | | | | | | response to climate change | | engagement will be significantly enhanced by clear demonstration of our commitment to environmental responsibility. | | | | | Opportunity: High Principal risk alignment: 3 – People, 10 – Reputation Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 35 ## Climate change – impact and adaptation continued Scenario analysis The below chart provides an illustrative summary of the implications for Disclosures detailing the implementation of the 11 core recommendations As part of our climate impacts assessment we considered the potential for potential outcomes in respect of the climate change impacts most of TCFD are included throughout the Annual Report as follows: therisks and opportunities identified to vary depending on different future relevant to Wilmington’s strategy for each of the three scenarios. TCFD recommendation Disclosure scenarios. The differentiating factors most relevant to our business are the severity of physical impacts on our people and other stakeholders, and the 1.1 Governance: Board oversight of Climate change impact and speed, nature and impact of regulatory change. Therefore our approach to climate-related risks and adaptation p. [29-31] selecting illustrative scenarios was to ensure our analysis encompassed the opportunities. ### SC1 Responsible business p. [12] High most extreme cases in respect of these two variables. Accordingly, we have 12 Governance report p. [36-40] used three scenarios which reflect reference to three core SSPs used within 13 the IPCC Sixth Assessment Report in addition to qualitative analysis by the 1.2 Governance: Management of Risk management - p. [22-23]] 14 IEA to provide insight into the indicative socio-economic conditions that climate-related risks and Climate change impact and would result from different levels of warming, and the related policy outcomes. opportunities. adaptation p. [29-31] ### SC2 A summary of these scenarios and indicative socio-economic conditions Moderate 2.1 Strategy: Short, medium and long Climate change impact and is provided below. term climate-related risks and adaptation p. [29-31] from regulatory change opportunities Indicative Scenario 1 Scenario 2 Scenario 3 Potential to capitalise on opportunities assumptions 2.2 Strategy: Impact of climate Climate change impact and ### SC3 related risks and opportunities on adaptation p. [29-31] Low Related SSP 1 – 1.9 1 – 2.6 5 – 8.5 businesses, strategy, and financial | Temperature | 1.5°C <2°C 6°C | | | | | | | planning. | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | rise trajectory | | | | Low | Moderate | High | | | | | | | | | | | | 2.3 Strategy: Resilience of the | | Climate change impact and | | Policy change Significant and | | Transition | Business as | | | | | strategy, taking into consideration | adaptation p. [29-31] | Likelihood and magnitude of physical timely towards usual, reactive different climate-related scenarios, impacts disrupting operations | decarbonization | decarbonization | change only. | | including a 2°C or lower scenario. | | | --- | --- | --- | --- | --- | --- | | policy | focused policy | | | | | | | | | 3.1 Risk: Processes for identifying | | Risk management p. [22-23] | | implementation. | implementation. | | | | | and assessing climate-related | | | | | Future focus | | Climate change impact and | | --- | --- | --- | --- | --- | --- | --- | | Customer | Significant and | Transition | Significant | | risks. | | | | | | | Our assessment has demonstrated that the climate-related impacts most | | adaptation p. [29-31] | | impact | timely | towards | disruption from | | | | relevant to Wilmington align strongly to the Group’s principal risks that 3.2 Risk: Processes for identifying, Risk management p. [22-23] adaptation. adaptive physical risks consider disruption to operational effectiveness, and our ability to lead in assessing, and managing Demand for measures. diverts resource. product innovation and the delivery of excellent customer experience. The Climate change impact and climate-related risks and their GRC solutions Demand for assessment also demonstrates that the needs of our customers during adaptation p. [29-31] integration into overall risk increases. GRC solutions the transition to a lower carbon economy will strongly align to our core management. increases. offering in governance risk and compliance. This assessment also | | | | | concluded that there is no indication of material financial exposure to the | 4.1 Metrics & Targets: Metrics used | | Climate change impact and | | --- | --- | --- | --- | --- | --- | --- | --- | | Innovation & | Investment | Heavy reliance | Limited and | | | | | | | | | | climate-related risks identified. | | to assess climate related risks and | adaptation p. [29-31] | | adaptation | facilitates | on good | delayed | | | | | opportunities in line with its streamlined adaptive investment in Responsible business p. The Board therefore consider the Group to be well positioned to meet its strategy and risk management transition to low technologies to adaptive [16-18] strategic objectives by continuing to integrate its assessment of climate process. carbon facilitate technologies. change impacts into its existing risk management and strategic planning economy. transition to low 4.2 Metrics & Targets: Scope 1, 2 & 3 Responsible business p. processes, ensuring it retains the agility to respond in a way that achieves carbon greenhouse gas (‘GHG’) [16-18] the best outcomes for all its stakeholders. economy. emissions, and related risks. 4.3 Metrics & Targets: Targets used Responsible business p. 12 Shared Socio-Economic Pathway to manage climate-related risks [16-18] 13 Intergovernmental Panel on Climate Change and opportunities and 14 International Energy Agency performance against targets. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 36 ## Viability statement Assessing the future prospects of the Group is integral to the Board’s The outcome of this assessment indicated that the Group’s risk ii) Management information systems business planning process, and is also closely aligned to the risk management process, control systems, and current risk appetite are Effective planning, annual budgeting and monthly forecasting systems are management process as detailed on pages [22] to [23]. The planning sufficiently robust that a comprehensive response strategy could be in place, as well as a monthly review of actual results compared with process includes detailed financial forecasting, regular performance actioned to protect the prospects of the Group in the event of such forecast, budget and the prior year. The annual budget and monthly analysis, robust risk management assessment, and continued monitoring scenarios occurring. forecasts are reviewed by the Board. Risk assessment and evaluation of industry trends and wider economic conditions. takes place as an integral part of this process. Monthly reports on On this basis the Directors have a reasonable expectation that the Group performance are provided to the Board and the Group reports results to In the context of the challenging economic environment in which the will be able to continue in operation and meet its liabilities as they fall due shareholders twice a year. Group operates, the Board has performed a detailed assessment to over the viability assessment period. conclude on: Insurance cover for the Group, as well as individual operating companies, ### Internal control has been procured where it is considered appropriate. • the appropriateness of adopting the going concern basis in preparing The Board is responsible for the Group’s system of internal control and risk the financial statements for the year ended 30 June 2022, as disclosed iii) Acquisitions, disposals and treasury management, and for reviewing the effectiveness of these systems. These in note 1 to the financial statements; and The Board also discusses in detail the projected financial impact of systems are designed to manage, rather than eliminate, the risk of failure proposed acquisitions and disposals, including their financing. All such • the long-term viability of the Group. to achieve business objectives, and to provide reasonable, but not proposed investments are considered by all Directors. The Board is also absolute, assurance against material misstatement or loss. Full details of the Group’s financing arrangements are set out in note 19 to responsible for reviewing and approving the Group’s treasury strategy, the financial statements. In line with the Turnbull Report recommendations, the Board regularly including mitigation against changes in interest rates and foreign reviews the effectiveness of the Group’s systems of internal control. The exchange rates. ### Viability Board’s monitoring covers all controls, including financial, operational and In accordance with Provision 31 of the 2018 Corporate Governance Code, compliance controls and risk management. It is based principally on Organisations the Directors have considered the prospects of the Group over a longer reviewing reports from management to consider whether significant risks There are well-structured financial and administrative functions at both the period than the twelve months required under the going concern are identified, evaluated, managed and controlled. Group and operating company level, staffed by appropriately qualified provision. The Directors have determined that a three year period is an individuals. The key functions at Group level include: Group accounting, Further details of principal risks are given on pages [24] to [28] and details appropriate term over which to provide its viability statement, being corporate development, Group treasury, Group legal, human resources, IT of financial risks such as interest rate risk, liquidity risk and foreign consistent with that covered by the Group’s strategic planning process and data services, company secretarial and Group taxation. currency risk are given in the financial statements in note 21. which includes broader consideration of the Group’s principal risks and uncertainties over the same period. The Directors also consider the The key features of the internal financial control system that operated Other matters business to be sufficiently agile to respond to volatility over a longer time throughout the period are as follows: The Group has no known issues relating to human rights or modern frame in a way that would mitigate potential unforeseen downside. slavery matters. The welfare of all the Group’s stakeholders, including the i) Financial reporting community, is carefully considered to ensure that such parties are not The Board reviewed the Annual Report, together with the preliminary and ### Assessment process adversely affected by the Group’s actions in the course of its day-to-day interim results announcements. The Board also reviews and approves The Group’s viability assessment has taken account of its current position business. Further details of the Group’s stakeholder engagement Trading Announcements (as appropriate). and the potential impact of the principal risks documented on pages [24] processes can be found in the Section 172 Statement on pages [10] to [11]. to [28]. The review has focussed on the occurrence of severe but plausible The Board together with the Audit Committee considered the The information forming the Strategic report on pages [1] to [33] was scenarios in respect of every principal risk and considered the potential of appropriateness of the Group’s accounting policies, critical accounting approved and authorised for issue by the Board and signed on their behalf these scenarios to threaten viability. The financial impact of each scenario estimates and key judgments. It reviewed detailed accounting papers on [21] September 2022. was quantified where appropriate, and subsequently mapped to a set of prepared by management on areas of financial reporting judgment, as mitigative actions that would be taken to manage the risk. Stress testing outlined in the Audit Committee report on pages [41] to [42]. analysis was also performed, illustrating the ability of the Group to manage The Board together with the Audit Committee considered and is satisfied the impact of severe downside scenarios on its future financial position. that, taken as a whole, the Annual Report is fair, balanced and understandable, and that it provides the information necessary for Guy Millward shareholders to assess the Group’s performance, business model and Chief Financial Officer strategy. [21] September 2022 Wilmington plc Annual Report and Financial Statements 2022 For visual only, text to be supplied ## Our Governance Financial StatementsStrategic Report 36 ## Our ## Governance 41 Board of Directors 42 Corporate governance report 47 Audit Committee report 49 Nomination Committee report 50 Directors’ remuneration report 72 Directors’ report and other statutory information Image TBC 74 Statement of Directors’ responsibilities Contents TBC until all text supplied Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 37 ## Board of Directors A N RA N R A N RA N R ### Martin Morgan Mark Milner Guy Millward Helen Sachdev Paul Dollman William Macpherson Chair Chief Executive Officer Chief Financial Officer and Independent Independent Independent Company Secretary Non-ExecutiveDirector Non-ExecutiveDirector Non-Executive Director | Appointment to the Board | Appointment to the Board | Appointment to the Board | Appointment to the Board | Appointment to the Board | Appointment to the Board | | --- | --- | --- | --- | --- | --- | | May 2018 | July 2019 | November 2020 | April 2020 | September 2015 | February 2021 | | Skills and experience | Skills and experience | Skills and experience | Skills and experience | Skills and experience | Skills and experience | | Martin Morgan has over 30 years | Mark Milner joined Wilmington | Guy Millward has extensive | Helen Sachdev is a founding | Paul Dollman is a Chartered | William Macpherson brings a | | of media and B2B experience, | from the Daily Mail and General | experience in senior finance | Director of the B2B coaching | Accountant and enjoyed a | wealth of experience to | | having spent a large proportion of | Trust plc (‘DMGT’) where since | positions at several publicly listed | practice WOMBA (Work, Me and | successful career in finance as the | Wilmington following a successful | | his career at Daily Mail and | 2001 he held a number of senior | and privately held technology | the Baby). Helen brings a wealth of | Group Finance Director of John | executive career as CEO of a | | General Trust plc (‘DMGT’). Martin | roles. These included Chief | companies. His previous roles | experience to Wilmington | Menzies plc. l was also a | number of professional education | | was Chief Executive of DMG | Executive Officer of Landmark | include that of CFO at Imagination | following a successful blue-chip | Non-Executive Director of Air | and skills development | | Information and subsequently held | Information Group, its property | Technologies Group plc, | executive career in retail at | Partner plc, an aviation services | organisations. He was CEO of QA | | the position of Chief Executive of | information division, from 2013 to | Advanced Computer Software | Sainsbury’s and Tesco, in retail | business where he was the Audit | between 2008 and 2019 during | | DMGT from 2008 to 2016. He was | 2018. Prior to this, Mark was Chief | Group plc, Quixant plc, Metapack | banking with Barclays and in | Committee Chair until April 2022. | which time the company achieved | | a Non-Executive Director of | Executive Officer of the Digital | Limited and Bighand Limited, | residential property with Marsh & | Paul is the Senior Independent | very significant growth. Prior to | | Euromoney Institutional Investor | Property Group, responsible for | Group Finance Director at Alterian | Parsons. She was Non-Executive | Director (SID). | that he was CEO of Kaplan | | plc between 2008 and 2016 and | running its consumer-focussed | plc, Morse plc and Kewill plc. Guy | director of Communisis plc from | | International, The Financial | Other appointments Chair of Signal Media Limited property portals, PrimeLocation, is a Fellow of the Institute of June 2018 until its acquisition in Training Company and Wolters Paul is the Audit Committee Chair between 2017 and 2019. Findaproperty and Globrix until Chartered Accountants in England December 2018, and a Non- Kluwer Professional Training. of Verastar, a private equity owned | | their merger with Zoopla in 2012. | and Wales. | Executive Director of McKay | | William is the Director responsible | | --- | --- | --- | --- | --- | --- | | Other appointments | | | | business which provides essential | | | | Between 2001 and 2008 Mark | | Securities plc until May 2022. She | | for worker representation at | | Martin is currently Senior | | Other appointments | | business services (telecoms, | | | | held a variety of positions at | | is an accredited Ashridge coach | | Wilmington. | | Non-Executive Director at City of | | Guy is currently a Non-Executive | | water and energy and insurance) | | | | Associated Northcliffe Digital Ltd, | | and a Fellow of the Chartered | | | | London Investment Trust plc and | | Director and Chair of the Audit | | to the small business market. He is | Other appointments | | | becoming Managing Director of | | Institute of Management | | | | Advisor to MMC Ventures. | | Committee at Eckoh plc. | | also a member of the Competition | William is a Non-Executive Director | | | the Specialist Division. Whilst there | | Accountants. | | | | | | | | Appeals Tribunal. | and Chair of Learning Curve Group | he was involved in the launch of Other appointments Limited, Chair of Hatcham College Mail Online, which subsequently Helen is a Non-Executive Director Academy and a Non-Executive became the world’s most visited and Chair of the Loughborough Director of the London Film School. English language news site. Mark’s Building Society and a Non- early career was spent in Executive Director and Chair of commercial and sales roles in the PPL PRS Limited. newspaper industry. Committee key A Audit Committee N Nomination Committee R Remuneration Committee Committee Chair Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 38 ## Corporate governance report ## Demonstrating ## good governance Martin Morgan Non-Executive Chair ### Chair’s introduction Compliance with the 2018 UK Corporate Governance Code Responsibility for good governance lies with the Board. As a Board we are The Group abides by the 2018 UK Corporate Governance Code published committed to maintaining the highest standards of corporate governance by the Financial Reporting Council (‘FRC’). The Board has put in place and believe that an effective, challenging and diverse Board is essential to provisions to ensure compliance with the Code such that it believes it is in enabling the Group to deliver its strategy and achieve long term value for compliance except for the following matter: its stakeholders. Further information on our strategy and business model i) The 2018 Code removes the small company exemption that the can be found in the Strategic report on pages [3] to [4]. Company has previously taken to allow the Chair to be a member of The Board is dedicated to setting the right tone at the top by promoting an the Audit Committee. The Board, advised by the Nomination inclusive culture that fosters innovation, ambition and curiosity whilst Committee, currently believe it is appropriate that the Chair remains a demonstrating the highest standards of integrity. Our robust governance member of the Audit Committee given the size of Wilmington plc and structure combined with our commitment to responsible business his experience. This decision will be assessed annually. practice sits at the heart of our approach to management at all levels, Stakeholder engagement (Section 172 Companies Act 2006) facilitating sustainable growth that delivers positive outcomes for all of the The Board has always considered the potential impact of the Group’s Group’s stakeholders. activities on its various stakeholders. The key stakeholders of the Group By promoting a responsible business culture we continue to demand the are set out in the Strategic report on page [10] which also includes highest professional standards from all of our people all of the time. To information about how the Company engages with them and how the reinforce that we have a comprehensive portfolio of policies accessible to all Directors, supported by the wider business, show regard for the matters staff to support their day-to-day decision making. We have a zero tolerance set out under Section 172 of the Companies Act 2006. The Board believes approach to breaches of the conduct standards set out in these policies. that the Company can only be successful when the interests of these stakeholders are considered, and reflected accordingly in the Company’s Further details of the work that underpins our approach to responsible decision-making processes and strategic objectives. business are set out in the Sustainability report on page [12]. The Board regards it as important to maintain an active dialogue with our shareholders. Further details regarding engagement with shareholders are set out on pages [10] to [11]. The Board receives regular reports from the Executives, the Chair and from advisors on feedback from shareholder Image TBC meetings. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 39 ## Corporate governance report continued Composition and independence Governance framework The composition of the Board remained consistent during the year. The Board reviews Non-Executive Director independence on an annual basis and takes into account the individual’s professional experience, their behaviour at board meetings and their contribution to unbiased and Chair independent debate. All of the Non-Executive Directors are considered by the Board to be independent. The Chair was considered independent on appointment. The Board consisted of a majority of Independent Non-Executive Directors throughout the year. Biographical details of all the current Directors are set out on pages [34] to [35]. Board: Chair, two Executive Directors and three Non-Executive Directors Diversity The board believes that an inclusive culture will enhance diversity within our business, which in turn is a key factor driving the Group’s success. Our vision is for Wilmington to be a company with rich diversity, experiences, knowledge, and perspectives, which powers our innovation and creativity to help our customers to do the right business in the right way. During the year our Diversity and Inclusion working group has implemented a wide range of initiatives that are driving progress towards this vision. Nomination Chief Executive Remuneration Audit Committee At the start of the year we made a commitment to ensuring that Committee Officer Committee Wilmington has a robust data collection and analysis process in place to facilitate more comprehensive reporting on indicators of diversity within our workforce. By asking our employees to share their diversity data, we are building a rich picture of the characteristics that make our people unique, and this in turn is helping us to measure progress against our ambition to create a truly inclusive working environment. The data we have Executive Committee: Chief Executive Officer, Chief Financial Officer, collected to better understand what makes our people unique is set out Chief Operating Officer, and Chief People Officer alongside details of the progress made against our Diversity and Inclusion strategy in the Sustainability report on page [13]. Business/Divisional operating boards Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 40 ## Corporate governance report continued ### Leadership composition The Chair is primarily responsible for the effective working of the Board, Length of tenure of Directors (years) The below table outlines the gender identify of the senior leadership team, ensuring that each Director, including the Non-Executive Directors, is able Number of complete years of service as a Director at 1 July 2022: including the executive committee, compared to that of the wider workforce. to make an effective contribution and provide constructive comments on the business. The Chief Executive Officer has responsibility for all Martin Morgan operational matters which includes the implementation of Group strategy Senior leadership team Wider workforce Prefer not Prefer not and policies approved by the Board. Mark Milner Female Male Other to say Female Male Other to say Non-Executive Directors Guy Millward 2022 [•] [•] [•] [•] [•] [•] [•] [•] All the Non-Executive Directors are independent of the Company’s Helen Sachdev executive management and free from any business or other relationship ### Leadership that could materially interfere with the exercise of their independent Paul Dollman The Board judgment. The Chair was considered independent on appointment. The William Macpherson The Company is controlled through the Board of Directors which, at 30 Non-Executive Directors are responsible for bringing independent and June 2022, comprised a Chair, two Executives and three Non-Executive objective judgment and scrutiny of all matters before the Board and its Directors. Short biographies of each Director are set out on pages [34] to Committees, using their substantial and wide-ranging experience. Balance of Directors [35]. The Board focusses on the formulation of strategy, governance and The terms and conditions of appointment of Non-Executive Directors are the establishment of policies, stewardship of resources and review of available for inspection at the Company’s registered office during normal business performance. business hours and at the Annual General Meeting. 17% 17% The Board may exercise all the powers of the Company, subject to the Senior Independent Director Company’s articles of association (the ‘Articles’), the Companies Act 2006 and 50% Paul Dollman is the Senior Independent Director (‘SID’). His role as SID any directions given by the shareholders by special resolution. The Articles 33% 83% includes: may be amended by a special resolution of the Company’s shareholders. • being available to shareholders if they have concerns which contact ## 8383++1717++KK 1717++3333++5050++KK The Board meets as often as necessary to discharge its duties effectively. through the Chair, Chief Executive Officer or Chief Financial Officer In the financial year ended 30 June 2022, eight main Board meetings were Male Chair has failed to resolve (there were no requests from shareholders to scheduled and the Directors’ attendance record is set out on page [39]. Female Executive meet the SID during the year); and Independent Non-Executive The Board has three formally constituted Committees, the Audit • meeting with the other Non-Executive Directors on the Board once a Committee, the Remuneration Committee and the Nomination year to assess the Chair’s performance, taking into account the views Committee, each of which operates with defined terms of reference. The The Directors of the Executive Directors. terms of reference of the three Committees are available on the As at the date of this report the Directors of the Company are: Company’s website www.wilmingtonplc.com. The Audit Committee met Company Secretary Chair three times during the year, the Nomination Committee met once, and the Guy Millward is the Company Secretary in addition to his role as an Martin Morgan Remuneration Committee met three times. Executive Director. In his role as Company Secretary, he supports the Executive Directors Board in its operation and ensures that Board processes are followed and There is an Executive Committee that is responsible for the day-to-day Mark Milner good corporate governance standards are maintained. All Directors have management of the Company’s business within a framework of delegated Guy Millward access to the advice and services of the Company Secretary. The Board responsibilities. It is chaired by the Chief Executive Officer and includes the recognise the potential conflict in combining the roles of Chief Financial Chief Financial Officer, Chief Operating Officer and Chief People Officer. Independent Non-Executive Directors Officer and Company Secretary, but believe it is appropriate for a Group of Paul Dollman (Senior Independent Director) Chair and Chief Executive Officer Wilmington’s size given the other support available to the Directors. Helen Sachdev The roles of the Chair and the Chief Executive Officer are held by separate William Macpherson individuals and the Board has clearly defined their responsibilities. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 41 ## Corporate governance report continued ### Effectiveness Attendance table Induction and professional development Meetings Main Board The Chair is responsible for ensuring that induction and training are The Board has a formal schedule of matters specifically reserved to it for Main Board meetings eligible provided to each Director and for organising the induction process and meetings attended to attend regular updating and training of Board members. decision which it reviews periodically. This schedule includes approval of acquisitions, disposals and items of major capital expenditure. The Board Martin Morgan (Chair) 8 8 Training and updating in relation to the business of the Group and the legal also reviews the Group’s Risk Register, wider risk assessment and viability Mark Milner (Chief Executive Officer) 8 8 and regulatory responsibilities of Directors was provided throughout the review. At each Board meeting the Chief Executive Officer and Chief year by a variety of means including presentations by executives, visits to Guy Millward (Chief Financial Officer) 8 8 Financial Officer provide a review of the business and its performance, business operations, external presentations and circulation of briefing together with strategic issues arising. The Non-Executive Directors may Paul Dollman (Non-Executive) 8 8 material. Individual Directors are also expected to take responsibility for meet separately from the Executive Directors usually either before or after Helen Sachdev (Non-Executive) 8 8 identifying their training needs and to ensure they are adequately informed Board meetings, to discuss relevant matters. In the year the range of William Macpherson (Non-Executive) 8 8 about the Group and their responsibilities as a Director. The Board is subjects discussed by the Board included: confident that all its members have the knowledge, ability and experience Information flow • the Group’s financial results and key business; to perform the functions required of a Director of a listed company. The Chair, together with the Company Secretary, ensures that the • progress on the ongoing strategic reviews; Access to independent advice Directors receive clear information on all relevant matters in a timely Any Director who considers it necessary or appropriate may take manner. Board papers are circulated sufficiently in advance of meetings • the Group’s debt and capital structure including the arrangements for independent, professional advice at the Company’s expense. None of the for them to be thoroughly digested to ensure clarity of informed debate. sufficient debt facilities; Directors sought such advice in the year. The Board papers contain the Chief Executive Officer’s and the Chief • dividend policy; Financial Officer’s written reports, high level papers on each business Board evaluation and performance review area, key metrics and specific papers relating to agenda items. The Board • regulatory and governance issues; Towards the end of the financial year, the Board conducted an internal papers are accompanied by a management information pack containing annual evaluation of its own performance, of each of its sub-committees • the development of the Group’s people including a quarterly talent review; detailed financial and other supporting information. The Board receives and of each individual Director. The Board considered the need for updates throughout the year and occasional ad hoc papers on matters of • the Group’s Risk Register and its response to TCFD recommendations; and external facilitation of this process but decided it was unnecessary at this particular relevance or importance. stage in its development. • insurance policy and cover. Time commitment The Board evaluation was led by the Chair. He conducted one-to-one In addition to the eight main meetings described above, the Board has two The Board is satisfied that the Chair and each of the Non-Executive interviews with each of the Directors, and then reported to the Nomination strategy meetings each year at which the Group’s strategic direction, Directors committed sufficient time during the year to enable them to fulfil Committee where his findings were considered. The review concluded viability plan and significant projects are discussed. their duties as Directors of the Company. None of the Non-Executive that the Board, its sub-committees, and each of the Directors continued to Directors have any conflicts of interest. Where additional meetings are required between main Board meetings be effective. The Board noted that its diversity did not fully reflect the and a full complement of Directors cannot be achieved, a Committee of position across the Group and resolved to consider this when making new Directors considers the necessary formalities. appointments. Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Corporate governance report continued ## Effectiveness continued ### Nomination Committee The Nomination Committee and the Board seek to maintain an appropriate balance between the Executive and Non-Executive Directors. The Nomination Committee Chair is William Macpherson. The Committee has full responsibility for reviewing the Board structure and for interviewing and nominating candidates to serve on the Board as well as reviewing senior executive development. Suitable candidates, once nominated, meet with the Chair and the Chief Executive Officer. The candidates are then put forward for consideration and appointment by the Board as a whole. The Committee has access to external professional advice at the Company's expense as and when required. The main roles and responsibilities of the Nomination Committee are set out in written terms of reference which are available on the Company's website, www.wilmingtonplc.com/investors/corporate-governance/roles-board. Details of the Nomination Committee's activities can be found in the Nomination Committee report on page 1. ### Audit Committee The Audit Committee is composed of all the Non-Executive Directors including the Chair. The Audit Committee Chair is Paul Dollman. The Board considers that Paul has the necessary recent and relevant experience to fulfil the role. The main roles and responsibilities of the Audit Committee are set out in written terms of reference which are available on the Company's website, www.wilmingtonplc.com/investors/corporate-governance/roles-board. Details of the Audit Committee's policies and activities can be found in the Audit Committee report on pages 2 and 3. ### Remuneration Committee The Remuneration Committee is chaired by Helen Sachdev and consists of all the Non-Executive Directors including the Chair. It is responsible for recommending to the Board the framework and policy for Executive Directors' remuneration and for setting the remuneration of the Chair, Executive Directors and senior management. Given the small size of the Board, the Committee recognises the potential for conflicts of interest, and has taken appropriate measures to minimise the risk. The Committee meets at least twice a year, and takes advice from the Chief Executive Officer and external advisors as appropriate. In carrying out its work, the Board itself determines the remuneration of the Non-Executive Directors. The Committee has the power to seek external advice, and to appoint consultants as and when required in respect of the remuneration of Executive Directors. ### Wilmington plc Annual Report and Financial Statements 2022 The main roles and responsibilities of the Remuneration Committee are set out in written terms of reference which are available on the Company's website, www.wilmingtonplc.com/investors/corporate-governance/roles-board. Further details of the Group's policies on remuneration and service contracts can be found in the Directors' remuneration report on pages 4 to 5. ## Risk management and internal controls The Board maintains an ongoing process for identifying, evaluating and managing significant risks faced by the Group. The Board regularly reviews this process, which has been in operation from the start of the year to the date of approval of this report. In line with the recommendations of TCFD, Board level oversight of climate-related risks and opportunities sits with the Senior Independent Director and the Chief Financial Officer. Further details on the key features of the risk management and internal controls can be found in the section on risks and uncertainties facing the business on pages 6 to 7. ## Relations with shareholders ### Dialogue with institutional shareholders The Directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders by means of a programme of meetings with major shareholders, fund managers and analysts each year. The Company also makes presentations to analysts and fund managers following publication of its half year and full year results. Copies of the presentations are available on the Company's website, www.wilmingtonplc.com/investors/reports-and-presentations. The Board regularly receives updates on investor relations matters. The Chair is available on request to attend meetings with major shareholders. Since his appointment on 1 May 2018, the Chair attended a number of such meetings. As referred to earlier, the SID is available to shareholders if they have concerns which other contacts have failed to resolve. The Group's website includes a specific and comprehensive investor relations section containing all RNS announcements, share price information, annual documents available for download and similar materials. ### Constructive use of the Annual General Meeting The Annual General Meeting will be held on 23 November 2022 and a separate notice convening the meeting is being sent out with this report and financial statements. Details of resolutions to be proposed and an explanation of the items of special business can be found in the circular that accompanies the notice convening the meeting. Separate votes are held for each proposed resolution. All Directors attend the Annual General Meeting at which they have the opportunity to meet with shareholders. After the formal business has been concluded, the Chair welcomes questions from shareholders. ### Substantial shareholdings As at 31 August 2022, the Company is aware of the following interests amounting to 3.0% or more in the Company's issued ordinary share capital. | | Number of ordinary shares | % | | --- | --- | --- | | Aberforth Partners LLP | 14,866,652 | 16.93% | | Chelverton Asset Management | 6,700,000 | 7.63% | | Gresham House Asset Management Limited | 6,333,480 | 7.21% | | The Wellcome Trust Limited | 5,682,400 | 6.47% | | Burgundy Asset Management Ltd. | 4,542,132 | 5.17% | | Artemis Investment Management LLP | 4,496,240 | 5.12% | | FIL Limited | 4,391,533 | 5.00% | | Ameriprise Financial, Inc. | 4,135,755 | 4.71% | | Odyssean Investment Trust plc | 4,000,000 | 4.55% | | NFU Mutual Insurance Society Limited | 2,686,485 | 3.06% | By order of the Board and signed on its behalf by: **Martin Morgan** **Chair** 31 September 2022 ## Strategic Report Financial StatementsOur Governance 43 ## Audit Committee report ### The Committee held three meetings in the year ended 30 June 2022 and Key activities members’ attendance at meetings is set out below: The key activities of the Audit Committee are as follows: Committee Financial reporting Committee meetings • Monitoring the integrity of the annual and interim financial statements, meetings eligible to attended attend the accompanying reports to shareholders and corporate governance statements including any significant financial reporting judgments Paul Dollman (Chair) 3 3 contained in them. Martin Morgan 3 3 Paul Dollman Helen Sachdev 3 3 • Reporting to the Board the Company’s assessment of any new or Chair of the amended accounting standards. William Macpherson 3 3 Audit Committee • Providing advice to the Board on whether the Annual Report and ### Dear Shareholder financial statements, when taken as a whole, is fair, balanced and I am pleased to present this year’s Audit Committee report. The understandable and provides all the necessary information for Committee supports the Board in fulfilling its responsibilities in respect of shareholders to assess the Company’s performance, business model monitoring the integrity of the Group’s reporting process and adherence to and strategy. the Group’s accounting policies and procedures as well as ensuring that Risk management and internal controls risks are carefully identified and assessed; and that sound systems of risk • In conjunction with the Board reviewing and monitoring the management and internal control are implemented. effectiveness of the Group’s internal control and risk-management systems, including reviewing the process for identifying, assessing and ### Committee membership and meetings reporting all key risks. See the risks and uncertainties facing the The Audit Committee (‘the Committee’) was in place throughout the business on pages [22] to [28]. financial year and is chaired by Paul Dollman. The Board considers that ## Supporting Paul has the appropriate financial expertise, as required by Principle C3.1 • To oversee the Group’s Whistleblowing provisions, Modern Slavery of the UK Corporate Governance Code (‘UK Code’), as he is a Chartered and ABC policies to ensure that they are operating effectively. Accountant, has held executive roles in financial positions in other External audit ## integrity and companies, including being Group Finance Director of a FTSE 250 • To make recommendations to the Board in relation to the appointment company, and chairs another company’s audit committee. and removal of the external auditors and to approve their remuneration The UK Code states that the Company Chair should not be a member of and terms of engagement. ## compliance the Audit Committee. However the Committee, in conjunction with the • To review and monitor the external auditors’ independence, objectivity Board, believes that given the size of Wilmington plc and Martin Morgan’s and the effectiveness of the audit process, taking into consideration extensive, relevant experience that it is appropriate that he remain a relevant UK professional and regulatory requirements. member. This decision will be assessed annually. • To develop and implement policy on the engagement of the external The Committee meets at least twice during the year and as and when auditors to supply non-audit services, taking into account relevant required. Representatives of the external auditors attend each meeting ethical guidance regarding the provision of non-audit services by the along with the Chief Executive Officer, Chief Financial Officer, the Group external audit firm, and to report to the Board, identifying any matters in Financial Controller and the Director of Group Finance, unless there is a respect of which it considers that action or improvement is needed and conflict of interest. Other relevant people from the business are also making recommendations as to the steps to be taken. invited to attend certain meetings or parts of meetings to provide a deeper level of insight into certain key issues and developments. Once a year, the Internal audit Committee meets separately with the external auditors and with • To annually assess the internal audit requirements of the Company. management without the other being present. • To monitor and review the effectiveness of the Internal Audit function. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 44 ## Audit Committee report continued ### Activities of the Committee in relation to the year Goodwill and intangible asset impairment Non-audit services The Committee received reports from management on the carrying value The Committee considers that certain non-audit services should be ### ended 30 June 2022 of goodwill and intangible assets. The Committee reviewed management’s provided by the external auditors, because its existing knowledge of the • Assessed and reported to the Board on whether the Annual Report recommendations, which were also considered by the external auditors, business makes this the most efficient and effective way for non-audit and Accounts were fair, balanced and understandable. including evaluation of the appropriateness of the assumptions applied in services to be carried out. The Audit Committee give careful consideration • Reviewed and discussed with the external auditors the key accounting determining asset carrying values and the appropriateness of the before appointing the auditors to provide other services. The Group considerations and judgments reflected in the Group’s results for the identification of cash generating units. After review, the Committee was regularly use other providers to ensure that independence and full value six month period ended 31 December 2021. satisfied with the assumptions and judgments applied by management for money are achieved. Other services are generally limited to work that is and concluded that the carrying values were appropriate and no closely related to the annual audit or where the work is of such a nature • Reviewed and agreed the external auditors’ audit plan in advance of impairments were required. . that a detailed understanding of the business is necessary. their audit for the year ended 30 June 2022. Revenue recognition In the year the external auditors performed non-audit services totalling • Discussed the report received from the external auditors regarding The Committee considered the inherent risk of fraud in revenue £15k which represents 5% of the audit fee of £300k. These services were their audit in respect of the year ended 30 June 2022 which included recognition as defined by auditing standards and was satisfied that there in relation to the interim review. The Audit Committee approved the comments on their findings on internal control and a statement on their were no issues arising. appointment of Grant Thornton on the basis that it was best placed to independence and objectivity. provide the services and there was no conflict of interest with its role as ### • Considered key accounting matters and new accounting standards External audit external auditors. with particular focus on the significant areas below. This year Grant Thornton UK LLP completed their fourth year as the ### Group’s external auditors. Sergio Cardoso, completed his third year as the Internal audit • Reviewed the Group’s whistle blowing policy, ensuring that it met FCA external audit partner. The Audit Committee is responsible for reviewing The Group operates a limited internal audit process which performs rules and good standards of corporate governance. the independence and objectivity of the external auditors and ensuring relevant reviews as part of a programme approved by the Audit • Reviewed internal audit reports. this is safeguarded notwithstanding any provision of any other services to Committee. The Committee considers any issues or risks arising from the Group. internal audit in order that appropriate actions can be undertaken for their • Reviewed, together with the Board, the Risk Assessment and Going satisfactory resolution. concern and viability review. The Committee recognises the importance of safeguarding auditor objectivity and has taken the following steps to ensure that auditor Approved on behalf of the Audit Committee by: ### Key discussions in the year independence is not compromised. The significant areas considered by the Committee and discussed with ### the external auditors during the year were: External auditors effectiveness Paul Dollman The Audit Committee carries out each year a full evaluation of the external Key financial and IT controls Chair of the Audit Committee auditors as to its complete independence from the Group and relevant The Committee reviewed the adequacy and appropriateness of the [21] September 2022 officers of the Group in all material respects and that it is adequately Group’s system of controls and its effectiveness with relevant input from resourced and technically capable to deliver an objective audit to the Group’s external auditors. The Committee has continued to monitor shareholders. Based on this review the Audit Committee recommends to the Group’s emerging risks in relation to technology and the suitability of the Board each year the continuation, or removal and replacement, of the its technology controls in response to this. external auditors. The external auditors’ report to the Directors and the Audit Committee confirming their independence in accordance with Auditing Standards. In addition to the steps taken by the Board to safeguard auditor objectivity, the Audit Practice Board Ethical Standard 3 requires audit partner rotation every five years for listed companies. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 45 ## Nomination Committee report The Committee met once during the year to 30 June 2022 and members’ Main activities of the Committee during the year and attendance at meetings is set out below: ### subsequent to the year end Committee Committee The key matters considered at these meetings were: meetings meetings attended eligible to attend i) Board composition The Committee reviewed the composition of the Board including the William Macpherson (Chair) 1 1 range of skills, level of experience and balance between Executive and Paul Dollman 1 1 Non-Executive Directors. The Committee also reviewed the membership Helen Sachdev 1 1 of the various Board Committees. The Committee concluded that the Martin Morgan 1 1 current membership of the Board and the Board Committees was William Macpherson Chair of the Nomination appropriate for the needs of the business. ### Committee Dear Shareholder ii) Board evaluation am pleased to present the Nomination Committee report for the year Details of the Board and sub-committee evaluation process undertaken in ended 30 June 2022. this year are included in the Governance review on page [39]. As part of that process the Non-Executive Directors met without the Company Chair ### Committee membership and meetings present to evaluate his performance. The review of the Company Chair’s The Nomination Committee (the ‘Committee’) is comprised of the effectiveness was led by the SID. The review concluded that the Company Company Chair and three Independent Non-Executive Directors. Chair had been highly effective in his role. ### Key responsibilities iii) Succession planning The key responsibilities of the Committee are to: The Committee kept under review the succession plans for both the • review the size, balance and constitution of the Board including the Executive and Non-Executive Directors and the level of senior ## Maintaining diversity and balance of skills, knowledge and experience of the management immediately below Board level. Non-Executive Directors; iv) Other senior management representation a strong Board • consider succession planning for Directors and other senior The Committee maintained oversight over various senior management executives; changes that occurred across the Group over the year. Regular updates were received from the executives on the progress of the searches and • identify and nominate for the approval of the Board candidates to fill the plans for dealing with reporting line changes that resulted from certain Board vacancies; of the departures. • review annually the time commitment required of Non-Executive v) Worker representation Directors; and William Macpherson is the Director responsible for worker representation. • make recommendations for the Board, in consultation with the Approved on behalf of the Nomination Committee by: respective Committee Chair regarding membership of the Audit and Remuneration Committees. William Macpherson Chair of the Nomination Committee [21] September 2022 Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Directors' remuneration report Stratified TBC ![img-6.jpeg](img-6.jpeg) [Implementing effective policy] Wilmington plc Annual Report and Financial Statements 2022 Table TBC | | Committee meetings attended | Committee meetings eligible to attend | | --- | --- | --- | | Helen Sachdev (Committee Chair) | 4 | 4 | | Martin Morgan | 4 | 4 | | Paul Dollman | 4 | 4 | | William Macpherson | 2 | 2 | # Remuneration Committee Chair's Annual Statement # Dear Shareholder On behalf of the Committee I am pleased to share our Directors' Remuneration report for the year to 30 June 2022. Our Directors' Remuneration report, which is subject to an advisory shareholder vote at the 2022 AGM, explains the work of the Committee, how we have implemented our Remuneration Policy (the Policy) for the year to 30 June 2022 and how we intend to apply it for the 2023 financial year. For ease of reference, a summary of the key elements of the Policy is included on pages 1-5. The full Policy as approved at the 2021 AGM with 98% of all votes cast in favour, is included in the Directors' Remuneration report for the year ended 30 June 2021, which is available on the Company's website at www.wilmingtonplc.com/reports-and-presentations. # 2022 remuneration in the context of our business performance and outcomes for our key stakeholders Our aim is to always consider the wider workforce, our shareholders and other stakeholders by taking a fair, prudent and balanced approach to remuneration. In line with the Board's wider stakeholder engagement strategy as disclosed in the Section 172 statement on page 1-5 and 1-6. As detailed in our Strategic report, we continue to deliver our strategy and our strong progress is reflected by the exceptional results we have reported. This successful delivery of our strategic objectives was underpinned by the Board's decision in June 2021 to restructure the Group's operating model into two divisions - consolidating our position in the dynamic GRC market - and to invest further in digital and data capabilities by developing single technology platforms in each division. The resilience of the business in response to challenging times demonstrates the Group's ability to adapt to change and continue to deliver exceptional customer service under the guidance of the strong executive team. The Group's success also reflects the ongoing motivation of our employees who continue to deliver to the highest standards in all areas of activity. During the year we have invested in an enhanced employee experience to further embed an inclusive culture and ensure that people can progress their careers at Wilmington, whilst being recognised and rewarded for their valuable contributions. # Wider workforce We continue to engage regularly with our workforce on the issues that matter to them, particularly diversity, wellbeing and development as well as reward and recognition. Our employee engagement survey and performance review process offer the opportunity to understand how employees feel about their own reward. During the year we carried out a comprehensive independent review against the market in respect of reward for roles in the UK, USA and France. This review informed our overall pay review process, resulting in average budgeted salary increases of 5%. We have created a Wilmington grading structure and provided additional funding in the pay review budget to address market misalignment and to ensure pay equity for like-for-like roles. We have also reviewed the bonus arrangements for the wider workforce and created a structure where bonuses of all those who have a bonus pay reflect consistent principles including a Group performance underpinning a mix of divisional, business, team and personal objectives relevant to the role function. We continue to go beyond our voluntary UK gender pay gap reporting by taking a global view and are pleased to report that the global gap for median hourly pay has narrowed from 29.1% in 2021 to 18.93% in 2022. The UK gap for median hourly pay has narrowed from 32.7% to 22.6% since our last report, and has narrowed by 14% since we started reporting in 2017. For the same period, UK mean hourly pay gap has narrowed by 12.7%, demonstrating that we are closing the difference in average pay between male and female colleagues over time. Since our 2021 report, the percentage of females in the UK fourth (or top) pay quartile has increased by 8.4%. We are very pleased that globally, we have achieved an important 50/50 representation of male/female colleagues in the fourth quartile. Strategic Report Our Governance Financial Statements # Directors' remuneration report continued ## Annual bonus and PSP awards vesting in respect of the performance period to 30 June 2022 The Committee has reviewed performance against each of the previously approved measures to determine the bonus outturn and PSP vesting in respect of the period ended 30 June 2022. Based on exceptional delivery against performance measures in the year, the Committee approved a bonus outturn equal to 125% of salary for the Executive Directors. The Committee also reviewed the outturn of the performance metrics applied to the PSP award granted to Mark Milner in September 2019. The performance over the three-year period to 30 June 2022 was considered and the Committee approved an outturn of 40.7% in respect of this award. Guy Millward joined the Group in November 2020 so did not receive a 2019 PSP award. The Committee reviewed the formulaic outturn of both the bonus and the PSP award, and after careful consideration concluded that these outturns were appropriate and reflected the performance of the Group in the periods to which they relate. Details of the performance measures and achievements against them in respect of the bonus and PSP awards are set out on page 1 and 2 respectively. ## Implementation of our Policy for the year ending 30 June 2023 ### Base salary and fees Mark Milner's base salary was increased by 5% with effect from 1 July 2021 to £367,500, reflecting Mark's strong performance and contribution since he joined the business in June 2019. As set out in the Remuneration report last year, the Committee agreed that an increase of a similar amount above the average increase for the wider workforce will be made with effect from 1 July 2022. Since Mark joined the business the Group's market capitalisation has increased by over 20% from circa £178m to 30 June 2019 to circa £217m to 30 June 2022. As set out above the Group's repositioning and redirection, acceleration of our digitalisation programme and investment in new products over the last two years is also being reflected in our strong results and progress against our strategic goals. Taking into account Mark's performance in role and performance of the business, and the fact that his pension contribution has reduced from 10% of salary to 5% in line with the wider workforce, his base salary increased by 8% to £397,000 with effect from 1 July 2022. This increase is within the range of increases given to high performing talent who have demonstrated strong progression in role. Guy Millward's salary was increased by 5% to £280,000 with effect from 1 July 2022, in line with the average increase for the wider workforce in the UK. ### Wilmington plc Annual Report and Financial Statements 2022 The Committee's intention is that base salary increases for the Executive Directors will revert to being in line with the wider workforce for the rest of the three-year Policy. ### Pension As disclosed in last year's Directors' Remuneration report, Mark Milner has agreed to a reduction in his pension / cash in lieu of pension so that it will be aligned with the wider workforce in the UK by the end of 2022 (5% of salary). Accordingly, Mark will receive pension equal to 10% of salary between 1 July 2022 and 31 December 2022, reducing to 5% of salary with effect from 1 January 2023. Guy Millward receives a pension / cash in lieu of pension of 5% of salary in line with the level available to the majority of the wider workforce in the UK. ### Annual bonus Each of the Executive Directors are eligible to earn a bonus of up to 125% of salary. The performance metrics weighting has been rebalanced compared to the last financial year following the introduction of an organic growth measure. Vesting will be based on adjusted PBT (42.5% of the opportunity), organic revenue growth (42.5% of the opportunity) and key strategic and ESG measures (15% of the opportunity). Details of the performance measures and achievements against them will be set out in next year's Directors' Remuneration report. 20% of the bonus earned will be deferred into shares for two years in line with the Policy. ### PSP The maximum PSP opportunity under our Policy is equal to 150% of salary. Awards in respect of the year to 30 June 2023 will be granted at a level of 125% of salary for Mark Milner and 100% of salary for Guy Millward. The business has performed very strongly over the last year, and to reflect this Mark Milner's award opportunity has increased to 125% of salary (2022: 100%) in line with the Committee's commitment set out in last year's Directors' Remuneration report. Vesting will be subject to performance measures based on adjusted EPS and organic revenue growth as follows: | | Adjusted EPS for the year ended 30 June 2023 (85% of award) | Organic revenue growth compound annual growth rate over the three years ending 30 June 2023 (85% of award) | Vesting* (% maximum) | | --- | --- | --- | --- | | Maximum | 1.5% | 1.5% | 100% | | Threshold | 2.5% | 2.5% | 25% | * Straight line vesting between threshold and maximum Vesting will also be subject to an underpin such that average ROCE over the performance period must be at least 1.5%, and any awards that vest will be subject to a two year post-vesting holding period in line with the Policy. ### Impact of changes on overall total compensation The Committee is mindful of the impact of base salary increases on the value of the total package. However, the value of the total package continues to be modest against the market norm for a company of our share and complexity and the changes outlined above move the value of total package for our Chief Executive Officer and Chief Financial Officer towards the mid-point of the market range. The majority of the package continues to be performance related, which is aligned with the interests of our shareholders. We also recognise that increasing the level of competitiveness in salaries and the PSP will require the continued delivery of performance, coupled with appropriately stretching targets for annual variable and long-term compensation. ### Chair fees and Non-Executive Fees We have also taken the opportunity to review our Chair fee level. Martin Morgan joined the business in 2019 on a fee of £125,000. His fee reduced to £121,000 as all Non-Executive fees took a voluntary pay reduction for 3 months in 2020. Taking into account the performance of the business a Martin's contribution his base fee was increased from £128,000 to £140,000 with effect from 1 July 2022. A committee appointed by the Executive Directors and the Chairman has reviewed fees for the other Non-Executive Directors. The outcome was that the base fee of £49,000 with no additional fees for chairing committees will be increased by 5%, in line with the increase for the wider workforce with effect from 1 July 2022, to £51,450. ### Conclusion We remain committed to a responsible approach to executive remuneration, as it is that this Director's Remuneration report demonstrates. We believe that the Policy operated as intended in respect of the year to 30 June 2022 and consider that the remuneration received by the Executive Directors was appropriate, taking account of the Group's performance during the year, their personal performance and the experience of shareholders and employees. I look forward to receiving your support at our 2022 Annual General Meeting, where I will be pleased to answer any questions you may have this report or in relation to any of the Committee's activities. Helen Sachdev Chair of the Remuneration Committee 21 September 2022 Strategic Report Our Governance Financial Statements 4 # Directors' remuneration report continued # Directors' Remuneration Policy The Remuneration Policy was approved by shareholders at the 2021 AGM on 3 November 2021, and became effective from this date. The full Remuneration Policy as approved by shareholders is available in the 2021 Annual Report found on our website at www.wilmingtonplc.com/reports-and-presentations. We have set out a summary below of those parts of the Remuneration Policy which we consider shareholders will find most useful in the context of the Directors' reward for the year ended 30 June 2023. When determining the Policy, the Committee considered clarity, simplicity, risk, predictability, proportionality and alignment to culture as set out in the Corporate Governance Code. Further details are set out in the 2021 Directors' Remuneration report. | Element | Present year 2022/23 pension and opportunity summary | | --- | --- | | **Base salary** | The Committee has reviewed base salary taking into account: • performance of the Group and pay conditions elsewhere in the workforce; • performance of the individual; • changes in position or responsibility; and • market competitiveness. The Committee considered all of these factors in concluding that Mark Milner's base salary will increase by 6% and Guy Millward's base salary will increase by 5%, effective 1 July 2022. | | **Pension** | The Committee has the discretion to pay cash supplements in lieu of some or all pension contributions in appropriate circumstances. Mark Milner's pension contribution will reduce from 10% to 5% of salary effective 1 January 2023 to align to the level available to the wider workforce. There will be no change to Guy Millward's pension contribution which already aligns to that available to the wider workforce. | | **Benefits** | Executive Directors receive benefits in line with market practice. The Directors will continue to receive a car allowance, private medical insurance and income protection benefit. | | **Bonus** | The maximum bonus is 125% of base salary. The majority of the bonus opportunity will be determined by financial measures, with stretching targets set each year reflecting the business priorities which underpin Group strategy and all to key performance indicators. The measures set for 2022/23 and their relative weighting are: • Adjusted PBT - 42.5% • Organic revenue growth - 42.5% • ESG and strategic measures - 15% Vesting of the maximum opportunity will apply on a sliding scale up to 100% of maximum potential for each element of the bonus based on the satisfaction of performance conditions, with more than 50% of the potential earned for achieving a target level of performance. | | **Performance share plan ('PSP')** | Awards in respect of the Company's 2022/23 financial year will be at a level not exceeding 125% of base salary. Awards under the PSP will be based on financial metrics with respect to at least 80% of the award, and metrics chosen will be those which the Committee considers to be the most appropriate measures of longer-term performance. Metrics chosen in respect of the 2022/23 award are: Earnings per share - 65% Compound annual organic revenue growth - 35% The threshold pay-out level under the PSP is 25% of the maximum award. There will usually be straight line vesting between threshold and maximum performance. The level of vesting in respect of any metric is subject to the Committee's discretion to override formulaic outturns. | Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 49 ## Directors’ remuneration report continued ### Directors’ Remuneration Policy Illustration of the application of the remunerationpolicy The following charts set out for each of the Executive Directors an illustration of the application for the financial year 2022/23 of the Remuneration Policy Shareholding guidelines set out above. The charts show the split of remuneration between fixed pay and variable pay in the Policy for: In-service - minimum remuneration receivable — salary, fees, taxable benefits and pension; To further align the interests of Executive Directors with those of shareholders, we have adopted formal shareholding guidelines, in - the remuneration receivable if the Director was, in respect of any performance measures or targets, performing in line with the Company’s accordance with which Executive Directors must retain 50% of the after expectation; tax shares they acquire on the vesting of PSP and DBP awards until such - maximum remuneration receivable (not allowing for any share price appreciation); and time as a total personal shareholding equal to 200% of base salary has been achieved. Shares which are subject to the two year holding period - maximum remuneration receivable assuming a 50% increase in the Company’s share price for the purposes of the PSP element. under the PSP or which are subject to a DBP award will count towards the requirement, on a net of assumed tax basis where relevant. Mark Milner (£,000) Guy Millward (£,000) 1,695 Post-employment Fixed pay 1,447 Fixed pay The Committee has adopted a post-employment shareholding 44% Bonus Bonus 1,094 requirement. Shares are subject to this requirement only if they are 34% 954 | | PSP | 868 | | PSP | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | acquired from PSP and DBP awards granted after 1 July 2021. Following | | | | | | | 38% | | | | 19% | | | 592 | 29% | | | employment, an Executive Director must retain: | | | 29% | | 16% | | | 34% | | | 455 | 29% | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | 37% | 32% | | • for the first year after employment, such of their shares which are | | | | | | 324 | 30% | | | | | subject to the post-employment requirement as have a value for these | 100% | 52% | 32% | 27% | | | | | | | | | | | | 100% | 54% | 34% | 30% | purposes equal to 100% of salary; and Minimum Performance Maximum Maximum Minimum Performance Maximum Maximum • for the second year after employment, such of those shares as have a | | performance | in line with | performance | performance | performance | in line with | performance | performance | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | value for these purposes equal to 50% of salary, | | expectations | | plus share price | | expectations | | plus share price | | | | | | appreciation | | | | appreciation | • or in either case and if fewer, all of those shares. The Committee believes an appropriate proportion of the Executive Directors’ remuneration links reward to corporate and individual performance and is aligned to the Group’s strategic priorities. In illustrating the potential reward, the following assumptions have been made: Basic performance In line with expectations Maximum performance Maximum performance plus share price appreciation Fixed pay Based on salary effective as at 1 July 2022, £397,000 for Mark Milner and £280,000 for Guy Millward. A pension contribution of 10% of salary between 1 July 2022 and 31 December 2022, reducing to 5% of salary with effect from 1 January 2023 (in the case of Mark Milner) and 5% (in the case of Guy Millward) and benefits earned for the year ended 30 June 2022. Bonus No bonus 50% of the maximum bonus is 125% of salary 125% of salary earned (i.e. 62.5% of salary) | PSP No PSP vesting 33% of the PSP awards vest | | In the case of Mark Milner: | In the case of Mark Milner: 125% of salary plus an | | --- | --- | --- | --- | | | (i.e.33% of salary) | 125% of salary | assumed 50% increase in the share price. | | | | In the case of Guy Millward: | In the case of Guy Millward: 100% of salary plus an | | | | 100% of salary | assumed 50% increase in the share price. | Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 50 ## Directors’ remuneration report continued ### Directors’ Remuneration Policy continued ### Non-Executive Directors Purpose and link to strategy Operation Opportunity Performance metrics Non-Executive Director fees and Fees are set at a level that reflects market Fees are reviewed periodically and amended to reflect Fees are based on the time commitment and Not applicable. provision of relevant benefits conditions and is sufficient to attract any change in responsibilities and time commitments. responsibilities of the role. individuals with appropriate knowledge Where appropriate external advice is taken on setting Fees are subject to an overall cap as set out andexperience. market competitive fees. in the Company’s articles of association. The Non-Executive Directors do not participate in any of the Group’s share incentive plans nor do they receive any benefits or pension contributions. Non-Executive Directors may be eligible to receive benefits such as the use of secretarial support, travel costs or other benefits that may be appropriate. ### Service Contracts and letters of appointment Details of the Executive Directors’ service contracts and Non-Executive Directors’ letters of appointment are set out on below. Executive Directors Contract commencement date Notice period Mark Milner July 2019 12 months Guy Millward November 2020 12 months Non-Executive Directors Date of initial appointment Notice period Expiry of current term Martin Morgan May 2018 6 months 23 November 2022 Paul Dollman September 2015 3 months 23 November 2022 Helen Sachdev April 2020 3 months 23 November 2022 William Macpherson February 2021 3 months 23 November 2022 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 51 ## Directors’ remuneration report continued a) Total salary and fees – the amount of salary/fees received in the year. ### Annual Report on Remuneration Certain details set out on pages [51] to [55] of this report have been audited by Grant Thornton UK LLP. b) Taxable benefits – the taxable value of benefits received in the year (i.e. car allowance, private medical insurance and income protection) plus, ### Introduction (unaudited information) in the case of Mark Milner, the value of the SAYE option granted in The following section provides details of the remuneration earned by the Directors in respect of the year in line with the Directors’ Remuneration Policy November 2020. approved by shareholders at the 2021 Annual General Meeting. c) Pensions related benefits – this is the amount of the cash payments in lieu of pension contributions made in the year. ### Single total figure of remuneration for each Director (audited information) The tables below report the total remuneration receivable in respect of qualifying services by each Director during the year. d) Annual bonus — the value of the bonus earned in respect of the year, of which 20% will be deferred in shares. A description of performance Pensions Total against the objectives, which applied for the year ended 30 June 2022, Total salary Taxable related Total fixed Annual variable is provided on page [52]. | | | (a) | | (b) | | (c) | | | (d) | | (e) | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | and fees | | benefits | | benefits | remuneration | | bonus | | PSP | remuneration | | Tot al | | | 2022 | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | | £’000 | £’000 | e) PSP – the value of performance related incentives vesting in respect of | the financial year. A description of performance against the targets Executive Directors which applied for the awards vesting in respect of performance in the Mark Milner 368 32 32 432 [459] 175 634 1,066 financial year is provided on page [53]. The award will vest on 30 Guy Millward 266 32 11 309 [333] — 333 642 September 2022 and the estimated value of the award shown above is Non-Executive Directors based on the three month average share price to 30 June 2022 (£2.43) Martin Morgan 128 — — 128 — — — 128 and the value of dividends that would have accrued on vested shares Paul Dollman 49 — — 49 — — — 49 during the performance period, which will be paid to Mr Milner. Helen Sachdev 49 — — 49 — — — 49 1. Guy Millward joined the Board on 5 November 2020. His remuneration reported in the single figure table is from this date. William Macpherson 49 — — 49 — — — 49 2. William Macpherson joined as Non-Executive Director the Board on 11 February 2021. His remuneration reported in the single figure table is from this date. Pensions | | Total salary | | | Taxable | | related | | | Total fixed | | Annual | | | | Total variable | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | (a) | | (b) | | (c) | | | | | (d) | | (e) | | | | | | | and fees | | benefits | | benefits | | remuneration | | | bonus | | PSP | | remuneration | | Tota l | | 2021 | | £’000 | | £’000 | | £’000 | | | | £’000 | £’000 | | £’000 | | | £’000 | £’000 | Executive Directors Mark Milner 350 39 30 419 350 — 350 769 1 Guy Millward 170 20 7 197 170 — 170 367 Non-Executive Directors Martin Morgan 128 — — 128 — — — 128 Paul Dollman 49 — — 49 — — — 49 Helen Sachdev 49 — — 49 — — — 49 2 William Macpherson 19 — — 19 — — — 19 Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Directors' remuneration report continued ## Annual Report on Remuneration continued ### Total salary and fees Total salary and fees are based on the need to retain the skills and knowledge that the Executive and Non-Executive Directors bring to the Company. #### For the year ended 30 June 2022 (audited information) For the year ended 30 June 2022 Mark Milner's salary was increased by 5% to £367,500 and Guy Millward's salary was increased by 2% to £266,220. As disclosed in last year's Directors' Remuneration report, Mark Milner's salary increase was awarded taking into account that he had not received a salary increase since his appointment as Chief Executive Officer in June 2019 and his strong performance and contribution since his appointment. ### Pensions related benefits #### For the year ended 30 June 2022 (audited information) Neither Mark Milner nor Guy Millward participated in a pension scheme. They were paid an amount of £31,973 and £11,474 respectively in the year in lieu of pension contributions, reflective of 9% of his annual salary net of employers' national insurance contributions in the case of Mark Milner and 5% of his annual salary net of employers' national insurance contributions in the case of Guy Millward. ### Annual bonus #### For the year ended 30 June 2022 (audited information) Each Executive Director was eligible to earn a bonus of up to 125% of their salary, with the performance measures weighted as follows in respect of the maximum opportunity. | Measure | Weighting (% of base salary) | | --- | --- | | Adjusted Profit measure* | 81.25% | | Strategic and operational measures | 31.25% | | ESG measure | 12.50% | The following provides the Adjusted Profit and personal strategic objectives reference points together with the out-turns for 2021/2022. | | Minimum target set | Maximum target set | Performance out-turn | Bonus earned as a % base salary | | --- | --- | --- | --- | --- | | Adjusted Profit* | £16.7m | £26.5m | £20.7m | 81.25% | * Adjusted Profit to profit before adjusting items, impairment, and other income. ### Strategic and operational measures | Objectives | Weighting (% of base salary) | Assessment of performance | Bonus earned (% of base salary) | | --- | --- | --- | --- | | Deliver next phase of digital transformation plans in Training & Education division. | 10.41% | Next phase of digital transformation implemented in full during the period. Progress enhanced by subsequent delivery of additional initiatives rotating 2022/23 roll-out phase. | 10.41% | | Effectively implement internal strategic reviews to drive organic growth strategy | 10.41% | Internal reviews of lower margin businesses performed in H1. Detailed strategic improvement plans produced and phased one recommendations implemented effectively resulting in enhanced long-term growth plans approved by the Board. | 10.41% | | Employee engagement survey participation rate exceeds 85% and actions are taken to address challenges raised. | 10.41% | Participation in the engagement survey was 91%, exceeding target of 85% and prior year 87%, demonstrating strong communication channels between the executive directors and the wider workforce. Clear action plan developed to address priority areas of employee feedback, with investment initiatives to support learning and development, employee experience and reward delivered in Q4. | 10.41% | | Deliver reduction in absolute scope 1&2 CO_{2} emissions and establish commitment to future carbon reduction. | 12.5% | Absolute market-based scope 1&2 carbon emissions reduced by 82% driven by review of energy procurement strategy. Net zero targets set in line with 1.5°C trajectory and residual emissions offset via high quality verified schemes. | 12.5% | The Executive Directors therefore earned bonuses equal to 125% of salary (equivalent to 100% of maximum opportunity). Mark Milner: £ 10.41% Guy Millward: £ 10.41% 20% of the amount earned will be deferred into shares for two years. The Committee carefully considered the bonus outturns in the context of overall performance, including the quality of earnings and ROCE performance and the shareholder and employee experience. The Committee considered that the bonus outturns were appropriate. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 53 ## Directors’ remuneration report continued The performance measures are disclosed below: ### Annual Report on Remuneration continued 65% of award — EPS in the 2023/2024 ### PSP financial year Percentage of Award Vesting Awards vesting in respect of the year ended 30 June 2022 (audited information) PSP awards were granted to Mark Milner on 30 September 2019 that are due to vest on 30 September 2022. The awards were subject to EPS growth, Less than 18.0p 0.0% ROE and relative TSR performance against the FTSE SmallCap index over a three year period to 30 June 2022. The table below details the Company’s 18.0p 25.0% performance against these performance measures for the three year performance period and the vesting out-turn. More than 18.0p but less than 21.5p On a straight line basis between 25.0% and 100.0% Target range | | Weighting | Minimum (25% | Maximum (100% | | 21.5p or more than 21.5p | 100% | | --- | --- | --- | --- | --- | --- | --- | | Element | (% of award) | of maximum) | | of maximum) Performance Vesting | | | | Annual EPS growth in excess of RPI 33.3% 3.0% 9.0% -1% 0% | | | | | 35% of award — Organic revenue growth | | over a performance period from the 1 ROE 33.3% 25.0% 29.0% 25.9% 14.0% 2020/2021 financial year to the 2023/2024 financial year Percentage of Award Vesting Between median and Less than 7% 0.0% TSR versus FTSE SmallCap 33.3% Median Upper quartile upper quartile 26.7% 7% 25.0% Total vesting outcome 40.7% On a straight line basis between More than 7% but less than 9% 25.0% and 100.0% 1. For the purposes of the PSP, ROE is defined as three year adjusted EBITA less impairment and adjusting items included in operating expenses divided by the average equity attributable to the owners of the parent. 9% or more than 9% 100% Amount of award The Committee may reduce the extent of vesting if the Committee attributable to considers that any value of the vested award represents a windfall gain | Number of | | | Number of shares | | | | | | | | share price | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | shares | | vesting based on | | | Dividend | | | Total value of | | appreciation | caused by the impact on the share price due to the Covid-19 pandemic. In | | | | 2 | | | | | 3 | | | 4 | | | | | granted | | | performance | Equivalents | | | award on vesting | | | since grant | assessing this, the Committee will take into account a number of factors, | including share price performance over the vesting period on an absolute Mark Milner 168,269 90,865 3,774 £175,225 14% and relative basis against peer companies, underlying financial 2. A share price of £2.08 (five day average share price prior to grant) was used to determine the number of shares granted. The value of the vested shares is estimated based on a share price of £2.43. performance of the Group during the performance period, the impact of Therefore, the proportion of the total value of the award attributable to share price growth since the grant date is estimated to be 13%. The Committee did not consider that it was necessary to exercise any significant events during the vesting period on the Group’s share price discretion in respect of share price appreciation since the grant date. or the market as a whole. 3. Calculated based on the value of dividends that would have accrued on vested shares during the performance period. The Executive Directors will be required to retain all of the vested shares 4. Calculated based on the three month average share price to 30 June 2022 (£2.43). (net of taxes) for a minimum of two years post-vesting. Mark Milner is required to hold no less than 50% of the vested shares (net of tax) for a minimum of two years post-vesting. The Committee carefully considered the PSP outturn in the context of overall performance, including the quality of earnings and ROCE performance, and the shareholder and employee experience. The Committee considered that the PSP outturn was appropriate. PSP Awards granted during the year In respect of the year ended 30 June 2022 the following PSP awards were granted as detailed in the table below. % of award vesting at Type of Maximum Number of Face value at minimum Name Date of grant award opportunity shares grant threshold 1 Mark Milner 30 September 2021 PSP 100% of salary 164,946 £367,500 25% 1 Guy Millward 30 September 2021 PSP 100% of salary 119,488 £266,220 25% 1. The face value is based on a price of 223p being the average share price from the five business days immediately preceding the award being granted on 30 September 2021. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 54 ## Directors’ remuneration report continued ### Annual Report on Remuneration continued ### Shareholding guidelines and statement of Directors’ share awards (audited information) Shareholding guidelines for Executives have been adopted, linked to the outturn from the PSP. At the time awards vest under the PSP (or any other Executive plan established in the future), Executive Directors will be expected to retain no fewer than 50% of vested shares (net of taxes) until such time as a total personal shareholding equivalent to 200% of pre-tax base salary has been achieved. This retention requirement also applies to 50% of the net vested shares under deferred bonus awards. The holdings of those persons who served as Directors during the year, and of their families, are as follows: | | | | At | | | | | | At | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Beneficial/ | 30 June | | Movement | | | At | 30 June 2022 | | | non-beneficial | | | 2021 | | in year | 30 June 2022 | | Percentage | | Mark Milner Beneficial 45,000 — 45,000 0.05% Guy Millward Beneficial — — — — Martin Morgan Beneficial 90,000 — 90,000 0.10% Paul Dollman Beneficial 40,000 — 40,000 0.05% Helen Sachdev Beneficial 10,000 — 10,000 0.01% William Macpherson Beneficial 10,000 — 10,000 0.01% As at 30 June 2022 the Company’s share price was 230.00p and its highest and lowest share prices during the year ended 30 June 2022 were 205.00p and 262.00p respectively. Interests are shown as a percentage of shares in issue at 30 June 2022. 2021/22 figures to be confirmed/supplied ### Executive Directors interests under share schemes (audited information) Awards held under the PSP and SAYE scheme by each person who served as a Director during the year ended 30 June 2022 are as follows: | | Number of | Granted | | | | | | | Number of | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | shares at | during the | | Lapsed during | | Exercised during | | | | shares | Date which | | Award date Type of award | 1 July 2020 | | year | | the year | | the year | at 30 June[ 2021] | | | awards vest | 1 Mark Milner 30 Sept 2019 PSP 168,269 — — — 168,269 30 Sept 2022 2 Mark Milner 30 Sept 2020 PSP 285,714 — — — 285,714 30 Sept 2023 Mark Milner 19 Oct 2020 SAYE 18,750 — — — 18,750 1 Dec 2023 3 Mark Milner 30 Sept 2021 PSP — 164,946 — — 164,946 30 Sept 2024 2 Guy Millward 26 Feb 2021 PSP 52,791 — — — 52,791 30 Sept 2023 3 Guy Millward 30 Sept 2021 PSP — 119,488 — — 119,488 30 Sept 2024 1. Performance conditions for awards granted on 30 September 2019 are disclosed on page [53]. The awards are expected to vest at 40.7%. 2. Performance conditions for awards granted on 30 September 2020 and 26 February 2021 are disclosed in the 2020/21 financial year Annual Report and Accounts. 3. Performance conditions for awards granted on 30 September 2021 are disclosed on page [53]. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 55 ## Directors’ remuneration report continued ### Dilution (unaudited information) Awards under the Company’s discretionary schemes which may be 500 satisfied by a new issue of shares must not exceed 5.0% of the Company’s issued share capital in any rolling ten year period and the total of all awards 400 satisfied via new issue shares under all plans (both discretionary and all-employee) must not exceed 10.0% of the Company’s issued share 300 capital in any rolling ten year period. At 30 June 2022, the headroom under the Company’s 5.0% and 10.0% 200 limits was 605,158 and 4,211,647 shares respectively, out of an issued share capital of 87,828,755 shares. Value (£) (rebased) 100 Wilmington Group FTSE All Share Media FTSE SmallCap ### Payments for loss of office (audited information) 0 No payments for loss of office were made during the year. 30 June 2012 30 June 2013 30 June 2014 30 June 2015 30 June 2016 30 June 2017 30 June 2018 30 June 2019 30 June 202230 June 202130 June 2020 ### Payments to former Directors (audited information) ### Chief Executive Officer single figure (unaudited information) As disclosed in last year’s Directors’ Remuneration report, when Richard Annual bonus PSP as a % of Amos, the former Chief Financial Officer, left the Company he retained his as a % of maximum 2019 PSP award on a time pro-rated basis and subject to the achievement | | | Tota l | maximum | | number of | | | | --- | --- | --- | --- | --- | --- | --- | --- | | of the applicable performance conditions assessed over the originally | remuneration | | opportunity | | | shares | | | anticipated performance period. The 2019 PSP award will vest on the | | £’000 | | % | | | % | same basis as Mark Milner’s award (40.7% of maximum), meaning that 202[0]/2022 Mark Milner [1,066] [125]% 40.7% after the time pro-ration, Richard Amos’ award will vest in respect of 16,125 2020/2021 Mark Milner 769 100% — shares plus dividend equivalents (in respect of dividends that would have accrued on vested shares during the performance period). He will be 2019/20 Mark Milner 389 — — required to retain at least 50% of the shares that he acquires (after sales to 2018/19 Pedro Ros 398 21.8% 33.3% cover tax liabilities) until at least the second anniversary of the vestingdate. 2017/18 Pedro Ros 565 — 60.9% 2016/17 Pedro Ros 814 61.7% 84.1% ### Performance graph and table (unaudited ### information) 2015/16 Pedro Ros 677 73.1% — The following graph shows, for the year ended 30 June 2022 and for each 2014/15 Pedro Ros 671 78.5% — of the previous nine years, the total shareholder return on a holding of the 2013/14 Charles J Brady 943 88.6% 91.8% Company’s ordinary shares compared with a hypothetical holding of 2012/13 Charles J Brady 935 80.0% 55.0% shares of the same kind and number as those by reference to which the FTSE All – Share Media Index and the FTSE Small Cap Index are ### Percentage change in remuneration of Directors andemployees (unaudited information) calculated. These indices have been chosen as the appropriate The year-on-year percentage change in salary, taxable benefits and annual bonus on a rolling basis, for the Executive and Non-Executive Directors and comparators because the Committee believe they contain the most employees of the Company on a full-time equivalent basis. The average employee change has been calculated by reference to the mean of employee comparable companies against which to appraise the Company’s share pay over the same period. performance. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 56 ## Directors’ remuneration report continued ### Taxable Relative importance of spend on pay (unauditedinformation) 2 Salary /fees benefits Annual bonus The difference in actual expenditure between 2020/2021 and 2021/2022 on remuneration for all employees in comparison to distributions to shareholders by way of dividend is detailed in the table below. The significant increase in distributions to shareholders by way of a dividend is primarily Mark Milner 2021/2022 5% (20%) 31% due to the final 2020 dividend being withheld in response to ongoing uncertainty around the impacts of the Covid-19 pandemic. There were no share 2020/2021 5% 34% 100% buybacks during the year. 2019/2020 0% 0% (100%) | | 1 | | 2021/22 | 2020/21 | Change | | | --- | --- | --- | --- | --- | --- | --- | | Guy Millward | | 2021/2022 2% 4% 27% | | | | | | | | | £’000 | £’000 | | % | 2020/2021 [n/a] 0% 0% Expenditure on remuneration for all employees 47,374 47,884 -1% 2019/2020 0% 0% 0% Distributions to shareholders by way of a dividend 5,492 1,829 200% Martin Morgan 2021/2022 0% 0% 0% ### 2020/2021 6% 0% 0% CEO pay ratio The following table discloses the ratios between the single total figure of remuneration (‘STFR’) of the Chief Executive Officer for 2020/21 and 2021/22 2019/2020 (3%) 0% 0% and the lower quartile, median and upper quartile pay of Wilmington’s UK employees for those years. The STFR of employees at each quartile has been Paul Dollman 2021/2022 0% 0% 0% calculated on a full-time equivalent basis as at the final day of the relevant financial year. Wilmington is committed to ensuring competitive pay for all 2020/2021 4% 0% 0% colleagues. 2019/2020 (2%) 0% 0% | | | | 25th | | | 75th | | --- | --- | --- | --- | --- | --- | --- | | Helen Sachdev 2021/2022 0% 0% 0% | | percentile | | Median | percentile | | | | Method | pay ratio | | pay ratio | pay ratio | | 2020/2021 4% 0% 0% 2021/22 Option B 40:1 24:1 14:1 2019/2020 0% 0% 0% 2020/21 Option B 28:1 21:1 13:1 1 William Macpherson 2021/2022 0% 0% 0% 2019/20 Option B 14:1 10:1 6:1 2020/2021 [n/a] 0% 0% | | 2019/2020 0% 0% 0% | Single total figures of remuneration used to calculate the above ratio | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Average employee 2021/2022 1% 0% 21% | | | | | | CEO 25th percentile pay ratio Median pay ratio 75th percentile pay ratio | | | | | | | | | | | | | 2020/2021 0% 0% 60% | | | | Total pay | | Tota l | | Total pay | Tota l | | Total pay | Tota l | | Total pay | Tota l | | | | | | and benefits | | | salary | and benefits | | salary | and benefits | | salary | and benefits | | salary | | | 2019/2020 2% 0% (50%) | | Method | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’000 | | £’000 | £’000 | | 1. In order to provide meaningful comparison with remuneration for 2021/2022, Guy Millward and | | 2021/22 Option B 1,066 368 70 63 40 37 24 23 | | | | | | | | | | | | | | | William Macpherson’s remuneration for 2020/2021 has been annualised, to reflect the fact that both joined the Board during the year ended 30 June 2021. Reporting regulations offer three methodologies to calculate the CEO pay ratio – Options A, B and C. The above table has been calculated by adopting Option B, which was determined as the most appropriate methodology for Wilmington. It was decided that Option B would be the most appropriate 2. The decrease in taxable benefits in the year awarded to Mark Milner relates to the grant of SAYE options in 2020/2021. approach as Wilmington had already completed a comprehensive analysis of UK employees for the purpose of gender pay gap reporting. As such, the most recent gender pay gap data, due to be published in September 2022, was used to determine the employees at the 25th percentile, median and 75th The increase in average employee salary and fees in the year reflect an percentile. A single total figure of remuneration was then calculated for each of the relevant employees using a consistent approach to the calculation of average salary increase for continuing employees of 2%, offset by the the single total figure of remuneration for the Chief Executive Officer on page [51] based on remuneration as at 30 June 2022. For example, variable impact of restructuring and vacancies. The increase in Directors’ salaries bonus payments and employer pension contributions were added to the gender pay data to ensure the STFR reflected all relevant remuneration received in the year reflect a holistic view of performance and other factors as in respect of the year ended 30 June 2022. The pay data for a sample of employees at each percentile was then reviewed for accuracy and consistency outlined in the Remuneration Committee Chair’s statement on pages and as such, Wilmington believes the selected employees are reasonably representative of the 25th, median, and 75th percentiles. 44-46. See previous Directors’ Remuneration reports for explanations as regards the percentage change in salary, taxable benefits and annual It is expected that the CEO pay ratio has the potential to vary considerably vesting is the primary reason for an increase in the ratio relating to the year bonus in respect of previous years. year-on-year due to the significant variable remuneration element ended 30 June 2022. included. 40.7% of the PSP award granted to the CEO on 30 September The Company believes that the median pay ratio is consistent with the pay, 2019 will vest on 30 September 2022 in respect of three year performance reward, and progression policies for the Company’s UK employees as a to 30 June 2022. No PSP award was capable of vesting in respect of three whole. year performance ended 30 June 2021 for the CEO. This variance in PSP Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 57 ## Directors’ remuneration report continued Details of the attendance of the Committee are set out in the table below: ### Annual Report on Remuneration continued Committee ### Implementation of the policy for the year ending | | | Committee | meetings | | --- | --- | --- | --- | | 30June 2023 (unaudited information) | | meetings | eligible to | | The Committee Chair’s Statement on pages [44] to [46] describes how the | Committee member Member since | attended | attend | policy will be implemented for the year ending 30 June 2023. Helen Sachdev (Committee Chair) April 2020 3 3 Martin Morgan May 2018 3 3 ### Details of the Remuneration Committee, advisors to Paul Dollman September 2015 3 3 ### the Committee and their fees (unaudited information) Details of the Directors who were members of the Committee during the William Macpherson February 2021 3 3 year are disclosed on pages [34] and [35]. The Committee has also received assistance from the Chief Executive Officer with respect to the ### Statement of voting at general meeting (unaudited information) remuneration of the other Executive Director and on the Company’s At the Annual General Meeting held on 3 November 2021 the Annual Report on remuneration received the following votes from shareholders: remuneration policy more generally. He is not in attendance when his own remuneration is discussed. Total number Annual Report on remuneration of votes % of votes cast During the year, the Committee received independent advice from the For 72,070,678 97.89% following external consultants: Against 1,553,300 2.11% 2021/22 Total votes cast (for and against) 73,623,978 | Committees advisors | £’000 | | | --- | --- | --- | | Aon Hewitt Limited provided advice to the Committee on | | Votes withheld — | | performance analysis. 2 | | Total votes (including withheld votes) 73,623,978 | Deloitte LLP provided advice to the Committee on At the Annual General Meeting held on 3 November 2021 the Directors’ Remuneration Policy received the following votes from shareholders: executive remuneration, including annual bonus performance measures and the preparation of the Total number Directors’ remuneration report. 23 Directors’ Remuneration Policy of votes % of votes cast For 72,064,696 97.88% Deloitte LLP was appointed by the Committee in 2013; the Group also engages Deloitte LLP to provide advice in relation to the Company’s share Against 1,559,282 2.12% plans. Deloitte is a member of the Remuneration Consultants Group and, Total votes cast (for and against) 73,623,978 as such, voluntarily operates under the Code of Conduct in relation to Votes withheld — executive remuneration consulting in the UK. Aon Hewitt Limited was appointed by the Committee in previous years. The Committee took into Total votes (including withheld votes) 73,623,978 account the Remuneration Consultants Group’s Code of Conduct when reviewing the appointment of Aon Hewitt Limited and Deloitte LLP. The Committee is satisfied that all advice received was objective and independent. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 58 ## Directors’ report and other statutory information The Directors present their report together with the audited consolidated Notice concerning forward-looking statements Political donations financial statements for the year ended 30 June 2022. The Directors’ This Annual Report contains forward-looking statements. Although the No political donations were made during the year (2021: nil). report comprises pages [58] and [59] and the sections of the Annual Group believes that the expectations reflected in such forward-looking Report incorporated by reference are set out below which, taken together, statements are reasonable, these statements are not guarantees of future Directors and Directors’ interests contain the information to be included in the Annual Report, where performance and are subject to a number of risks and uncertainties and All Directors are equally accountable for the proper stewardship of the applicable, under Listing Rule 9.8.4. actual results and events could differ materially from those currently being Company’s affairs. Executive and Non-Executive Directors offer anticipated as reflected in such forward-looking statements. themselves for election or re-election at each Annual General Meeting as Board membership pg [34] a result of the Company deciding to adopt best practice guidelines and the The terms ‘expect’, ‘estimate’, ‘forecast’, ‘target’, ‘believe’, ‘should be’, ‘will Dividends pg [5] 2018 UK Corporate Governance Code, located on the FRC’s website at be’ and similar expressions are intended to identify forward-looking www.frc.org.uk/directors/corporate-governance-and-stewardship/ Directors’ long term incentives pg [47] statements. Factors which may cause future outcomes to differ from uk-corporate-governance-code. those foreseen in forward-looking statements include, but are not limited Corporate governance report pg [36] to, those identified under ‘Principal risks and uncertainties’ on pages [22] Details of the remuneration, service contracts, letters of appointment and Future developments of the business of the Group pg [3] to [28] of this Annual Report. interests in the share capital of the Company for the Directors who have served during the year are set out in the report on Directors’ remuneration Employee equality, diversity and involvement pg [13] The forward-looking statements contained in this Annual Report speak on pages [44] to [57]. only as of the date of publication of this Annual Report and the Group Events after the reporting period pg [98] therefore cautions readers not to place undue reliance on any forward- As disclosed in note 28 none of the Directors had any material interest in Subsidiaries of the Group pg [83] looking statements. Except as required by any applicable law or regulation, any contract, other than an employment contract, that was significant in the Group expressly disclaims any obligation or undertaking to release relation to the Group’s business at any time during the year. Financial risk management pg [86] publicly any updates or revisions to any forward-looking statements Sustainability and greenhouse gas emissions pg [12] contained in this document to reflect any change in the Group’s Directors’ third-party indemnity provisions expectations or any change in events, conditions or circumstances on To reduce the possibility of the Company incurring expenses which might S172 statement and stakeholder engagement pg [10] which any such statement is based. arise from the need to indemnify a Director or Officer from claims made Going concern pg [66] against them or the cost associated with their defence, the Group has in ### General information place Directors’ and Officers’ qualifying third-party liability insurance as Viability statement pg [32] The Company is public limited and is incorporated and domiciled in the permitted by the Companies Act 2006, which has been in force UK. The Company is listed on the main market of the London Stock throughout the financial year and up to the date of approval of these Exchange. The Company’s registered address is 10 Whitechapel High financial statements. Street, London E1 8QS. ### Branches outside the UK The Group does not operate any branches outside the UK. ### Research and development activities The Group invests in research and development to support the development of its businesses which can rely on technology to deliver their data, information, education and training services. Examples of investments undertaken in the year are included in the financial review on pages [19] to [21]. Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Directors' report and other statutory information continued **The Group seeks to create an environment in which every member of its workforce helps in foster a culture of equality, diversity and inclusion.** ### Inclusivity and employee engagement The Group's recruitment policy ensures that all job applications are reviewed on a fair basis free from discrimination. This policy aligns strongly to our work to embed an inclusive culture across the Group, and to our accessibility agenda as set out in the Sustainability report on page 10. The policy includes provision to ensure that any candidate or employee who has or develops a disability, long term health condition or impairment is considered fairly in our recruitment and career progression processes. The Group also has a policy to ensure that it makes reasonable adjustments for all candidates or employees to reflect their needs and allow them to participate fully, develop and thrive in our business. Please refer to Section 172 on page 10 for information regarding actions taken during the year to maintain employee engagement. ### Financial instruments An explanation of the Group's treasury policies and existing financial instruments are set out in note 21 of the financial statements. ### Purchase of own shares and sale of treasury shares The Group has, in previous years, purchased its own shares and holds such shares in treasury. At 30 June 2022, 65,970 shares were held in Treasury (2021: 34,533), which represents 0.1% (2021: 0.1%) of the share capital of the Company. During the year the Wilmington Group plc Employee Share Ownership Trust (ESOT) purchased 170,097 ordinary shares for the purpose of future settlement of employee share schemes. These shares will ultimately be used by the Trust for the settlement of awards granted under the Company's employee share schemes. The Company seeks authority from its shareholders at each Annual General Meeting to purchase its own shares. In May 2022 Wilmington issued a further 224,838 ordinary voting shares to satisfy the Company's obligations under the SAYE Plan. ### Contracts of significance with shareholders The Company and its subsidiary undertakings do not have any contracts or other arrangements with any continuing shareholders which are essential to the business of the Company. ### Takeover directive disclosures As at 30 June 2022, the Company had only one authorised class of shares namely ordinary shares of 5p each, of which there were in issue 87,828,700 (2021: 87,603,917). There are no special arrangements or restrictions relating to any of these shares, whether in terms of transfers, voting rights or relating to changes in control of the Company. The Company does not have any special rules in place regarding the appointment and replacement of Directors, or regarding amendments to the Company's articles of association. Under the terms of the Company's banking arrangements, in the event that a person or group of persons acting in concert gains control of the Company, the lending banks may require, by giving not less than 30 days notice, the repayment of any debt and the cancellation of facilities. Subject to various conditions, if the Company is taken over, all share awards and options will vest and may be exercised. Except for share awards and options, and the banking arrangements described above there are no special conditions or agreements in place which would take effect, alter or terminate in the event of a takeover. Apart from the interests of the Directors disclosed in the report on Directors' remuneration and the substantial interests listed on page 10 there are no individuals or entities with significant holdings, either direct or indirect, in the Company. ### Annual General Meeting A separate notice convening the Annual General Meeting of the Company to be held at the head office, 10 Whitechapel High Street, London E18Q on 23 November 2022 will be circulated to shareholders with this Annual Report and financial statements. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 60 ## Statement of Directors’ responsibilities The Directors are responsible for preparing the Strategic report and The Directors are responsible for the maintenance and integrity of the Annual Report, the Directors’ remuneration report and the financial corporate and financial information included on the Company’s website. statements in accordance with applicable law and regulations. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other Company law requires the Directors to prepare financial statements for jurisdictions. each financial year. Under that law the Directors have prepared the financial statements in accordance with International Financial Reporting To the best of our knowledge: Standards (‘IFRSs’) adopted pursuant to Regulation (EC) No 1606/2002 • the Group financial statements, prepared in accordance with IFRSs as as it applies in the European Union and international accounting standards adopted by the United Kingdom, give a true and fair view of the assets, in conformity with the requirements of the Companies Act 2006. Under liabilities, financial position and profit or loss of the Company and the company law the Directors must not approve the financial statements undertakings included in the consolidation taken as a whole; and unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period. In • the Strategic report and Directors’ report include a fair review of the preparing these financial statements, the Directors are required to: development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as • select suitable accounting policies and then apply them consistently; a whole, together with a description of the principal risks and • make judgments and accounting estimates that are reasonable and uncertainties that they face. prudent; and Approved on behalf of the Board by: • state whether applicable IFRSs as adopted by the United Kingdom have been followed, subject to any material departures disclosed and explained in the financial statements. Guy Millward The Directors are responsible for keeping adequate accounting records Chief Financial Officer that are sufficient to show and explain the Company’s transactions and [21] September 2022 disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors’ remuneration report comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that: • so far as each Director is aware, there is no relevant audit information of which the Company’s auditor are unaware; and • the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company’s auditor are aware of that information. The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. Having taken advice from the Audit Committee, the Directors consider the Annual Report and the financial statements, taken as a whole, provides the information necessary to assess the Company’s performance, business model and strategy and is fair, balanced and understandable. Wilmington plc Annual Report and Financial Statements 2022 For visual only, text to be supplied ## Strategic Report Our Governance Financial Statements 68 ## Financial ## Statements 76 Independent auditors’ report 82 Consolidated income statement 83 Consolidated statement of comprehensive income 84 Balance sheets 85 Statements of changes inequity 87 Cash flow statements 88 Notes to the financial statements 120 Pro forma five year financial summary (unaudited) 121 Advisors and corporate calendar Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements For vessel only, text to be supplied 6 # Independent auditors' report to the members of Wilmington plc ## Opinion Our opinion on the financial statements is unmodified. We have audited the financial statements of Wilmington plc (the 'parent company') and its subsidiaries (the 'Group') for the year ended 30 June 2021, which comprise the consolidated income statement, the consolidated statement of comprehensive income, the Group and Company balance sheets, the Group and Company statements of changes in equity, the Group and Company cash flow statements and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union and international accounting standards in conformity with the requirements of the Companies Act 2006. The financial reporting framework that has been applied in the preparation of the parent company financial statements is international accounting standards in conformity with the requirements of, and 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 30 June 2021 and of the Group's loss for the year then ended; - the Group financial statements have been properly prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union and international accounting standards in conformity with the requirements of the Companies Act 2006; - the parent company financial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of, 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 and, as regards the Group financial statements, Article 4 of the IAS Regulation. Wilmington plc Annual Report and Financial Statements 2022 ## 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 Auditors' responsibilities for the audit of the financial statements' section of our report. We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## Conclusions relating to going concern We are responsible for concluding on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditors' opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern. As part of our risk assessment, we evaluated the Group's and the parent company's cash position, assessed the Group's and the parent company's performance and headroom against bank covenants throughout the year, considered the Group's and the parent company's lack of reliance on government assistance and the parent company's ability to pay dividends, and concluded that the Group's and the parent company's ability to continue as a going concern was not a significant risk that required special audit consideration. Our evaluation of the Directors' assessment of the Group's and the parent company's ability to continue to adopt the going concern basis of accounting included reviewing management's base case cash flow forecasts covering the period to 30 September 2022 and challenging the underlying assumptions, and reviewing forecast covenant compliance throughout the going concern period. We obtained management's revenue stress test prepared to consider the scenario that would cause a breach in covenant compliance and evaluated the impact and availability of mitigating actions available to management to restrict the impact on the Group's and the parent company's performance and covenant compliance. Our assessment also included a review of the accuracy of management's past forecasting and an assessment of the adequacy of related disclosures within the Annual Report. In our evaluation of the Directors' conclusions, we considered the inherent risks associated with the Group's and the parent company's business model including effects arising from macro-economic uncertainties such as Brexit and Covid-19, we assessed and challenged the reasonableness of estimates made by the Directors and the related disclosures and analysed how those risks might affect the Group's and the parent company's financial resources or ability to continue operations over the going concern period. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. In relation to the Group's and the parent company's reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statements in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. The responsibilities of the Directors with respect to going concern are described in the 'Responsibilities of Directors for the financial statements' section of this report. For visual only, text to be supplied ## Strategic Report Financial StatementsOur Governance 70 ## Independent auditors’ report continued to the members of Wilmington plc ### Our approach to the audit Key audit matters Key Audit Matter – Group How our scope addressed the matter – Group Key audit matters are those matters that, in our professional judgement, Overview of our audit approach Impairment of goodwill In responding to the key audit matter,we were of most significance in our audit of the financial statements of the We identified impairment of performed the following audit procedures: Overall materiality: current period and include the most significant assessed risks of material goodwill as one of the most • obtaining management’s impairment Group: £719,000, which represents0.65% misstatement (whether or not due to fraud) that we identified. These significant assessed risks of review model and testing the oftheGroup’s forecast revenue. matters included those that had the greatest effect on: the overall audit material misstatement due mathematical accuracy; Parent company: £540,000, which represents strategy; the allocation of resources in the audit; and directing the efforts toerror. of the engagement team. These matters were addressed in the context of • assessing the appropriateness of 0.3% of the parent company’s total assets, In accordance with International our audit of the financial statements as a whole, and in forming our opinion management’s determination of CGUs capped at 75%of Group materiality. Accounting Standard (IAS) 36 thereon, and we do not provide a separate opinion on these matters. and changes in CGUs identified Key audit matters were identified as: ‘Impairment of Assets’, goodwill compared to the prior year; • Impairment of goodwill (same as is subject to an annual • assessing the appropriateness of the previousyear) Description Audit response impairment test. Key audit asset amounts included in the carrying Materiality | matters | • Recognition of revenue (same as | | The Group holds £65.8m of | | | --- | --- | --- | --- | --- | | | | Key audit matters | | value of each of the CGUs by agreeing | | | previousyear) | | goodwill on its balance sheet, | | to underlying accounting records; | | | Disclosures Key observations | including £11.9m relating to the | | | --- | --- | --- | --- | --- | | | Our auditors’ report for the year ended | | | • assessing the discount rate applied, | | Scoping | | | UK Healthcare cash generating | | | | 30June 2020 included two key audit | | | including an assessment by our valuation | unit (CGU), after recognising an matters that have not been reported as In the graph below, we have presented the key audit matters, significant specialists, and benchmarking the rate impairment in the year of £8.4m. keyaudit matters in our current year’s report. risks and other risks relevant to the audit. against that used by competitors; These relate to going concern and to the We consider that the carrying • assessing the appropriateness of High | application of International Financial | | | value of the goodwill intangible | | | --- | --- | --- | --- | --- | | | | 12 | | thegrowth rates applied, by reference | | Reporting Standard (IFRS) 16 ‘Leases’ | 11 | | asset associated with the UK | | to industry and market data; andare not included as they have not Healthcare CGU is a significant • performing sensitivity analysis on | beenassessed as significant risks for the | | 10 | | risk due to the low amount of | | | --- | --- | --- | --- | --- | --- | | | 9 | | | | thevalue in use calculation performed | | current year. | | | | headroom for this CGU, the | | | | | | Potential | | by management; | sensitivity to key assumptions, | We performed full scope audit procedures | | | | financial | | | | --- | --- | --- | --- | --- | --- | --- | | | | 7 | 8 | | | | | | 6 | | | | and the level of management | • testing the accuracy of management’s | | on the financial statements of Wilmington plc | | | | statement | | | | | | | | impact | judgement included in the inputs | forecasting througha comparison of | and on the financial information of Wilmington 4 5 3 into the impairment calculation, budget toactual data and historical Holdings No.1 Limited, Wilmington Shared such as the rate used to discount variance trends; Services Limited, Wilmington Publishing & 2 future cash flows, the cash flow Information Limited, Axco Information • obtaining and challenging the key 1 forecasts and the growth rates. Services Limited, Wilmington Healthcare assumptions relating to the Group’s Low Limited, Mercia Group Limited, International cash flow forecasts; and Compliance Training Limited and Bond • assessing the accuracy and sufficiency Low Extent of management judgement High Solon Training Limited. of financial statement disclosures relating Key audit matter Significant risk Other risk | Full scope or specified audit procedures | | | | | | to the impairment of goodwill in the UK | | --- | --- | --- | --- | --- | --- | --- | | were performed on the financial information | | | | | | Healthcare CGU, and the sensitivity of | | | 1. Intangible assets | | 7. Borrowings | | | | | of components representing 78% of the | | | | | | this impairment to key variables. | | | 2. Intercompany receivables | | 8. Investments | | | | | Group’s revenue and 82% of the Group’s loss | | | | | Relevant disclosures in the | Key observations | | | | (parent company only) | | (parent company only) | | | | before tax. | | | | | Annual Report and Financial | Our audit work did not identify any | | | 3. Trade receivables | | 9. Employee remuneration | | Statements 2021 | material errors in the impairment of | | | 4. Accruals | | 10. Recognition of revenue | | • Financial statements: note 12, | goodwill associated with UK Healthcare | | | | | | | Goodwill | CGU during the year. | | | 5. Share option expenses | | 11. Going concern | | | | • Audit Committee report: 6. Operating expenses 12. Impairment of goodwill Goodwill and intangible assetimpairment Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements For vessel only, text to be supplied 7 # Independent auditors' report continued to the members of Wilmington plc ## Key audit matters continued Key Audit Matter – Group How our scope addressed the matter – Group ### Recognition of revenue We identified recognition of revenue as one of the most significant assessed risks of material misstatement due to fraud. Under International Standard on Auditing (UK) 240 'The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements', there is a presumption that there are risks of fraud in revenue recognition. The Group has a number of revenue streams which include performance obligations recognised at both a point in time and over time, spanning less than one year and not involving complex arrangements. We assessed the risk of fraud to be greatest in the final quarter of the year, where there is an increased risk of manipulation of the timing or quantum of revenue. This could lead to revenue being inappropriately recognised in the year rather than being deferred. There is also an associated risk relating to the completeness of deferred revenue. ### Relevant disclosures in the Annual Report and Financial Statements 2021 - Financial statements: role 3, Revenue - Audit Committee report: Revenue recognition In responding to the key audit matter, we performed the following audit procedures: - assessing the design effectiveness of relevant controls in respect of revenue recognition; - assessing the stated accounting policies in respect of revenue recognition and whether these are consistent with IFRS 15 'Revenue from Contracts with Customers' and whether revenue has been recorded in accordance with the accounting policies; - performing substantive testing on a sample of revenue transactions during the year with a particular focus on the final quarter, across each of the significant revenue streams to assess whether revenue is recognised in accordance with the contract terms and agreeing to supporting evidence to confirm occurrence; and - performing cut off procedures to ensure that revenue was recognised in the correct period via testing of revenue through to deferred income schedules, and vice versa, prior period deferred income to revenue listing in the current period. ### Key observations Our audit work did not identify any material errors in the recognition of revenue during the year. We did not identify any key audit matters relating to the audit of the financial statements of the parent company. Wilmington plc Annual Report and Financial Statements 2022 ## Our application of materiality We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and on uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditors' report. Materiality was determined as follows: | Materiality measure | Group | Parent company | | --- | --- | --- | | **Materiality for financial statements as a whole** | We define materiality as the magnitude of misstatement in the financial statements that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of these financial statements. We use materiality in determining the nature, timing and extent of our audit work. | | | Materiality threshold | £719,000, which represents 0.65% of the Group's forecast revenue. | £540,000, which represents 0.3% of the parent company's total assets, capped at 75% of Group materiality. | | Significant judgements made by auditor in determining the materiality | This benchmark is considered the most appropriate because consistent and sustainable revenue streams is a key performance indicator for the Group. Materiality for the current year is higher than the level that we determined for the year ended 30 June 2020 as materiality was based on 0.65% of forecast revenue in both years and forecast revenue was higher this year. | This benchmark is considered the most appropriate because the parent company's purpose is to hold material investments in subsidiary companies and receivable amounts from subsidiary companies, and does not trade materiality for the current year is higher than the level that we determined for the year ended 30 June 2020 to reflect the increase in the parent company's total assets in the current year and the capping at 75% of Group materiality referred to above, which was higher this year. | | **Performance materiality used to drive the extent of our testing** | We set performance materiality at an amount less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. | | | Performance materiality threshold | £540,000, which is 75% of financial statement materiality | £404,000, which is 75% of financial statement materiality | | Significant judgements made by auditor in determining the performance materiality | In determining performance materiality, we made the following significant judgements: - Our experience with auditing the financial statements of the Group in previous years – based on the number and quantum of identified misstatements in the prior year audit and management's attitude to correcting misstatements identified; - Our assessment of the strength and effectiveness of the control environment; and - The number of components within the Group and the extent of audit procedures planned and performed at these components. | In determining performance materiality, we made the following significant judgements: - Our experience with auditing the financial statements of the parent company in previous years – based on the number and quantum of identified misstatements in the prior year audit and management's attitude to correcting misstatements identified; and - Our assessment of the strength and effectiveness of the control environment. | | **Specific materiality** | We determine specific materiality for one or more particular classes of transactions, account balances or disclosures for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. | | | Specific materiality | We determined a lower level of specific materiality for the following areas: - Related party transactions; and - Directors' remuneration. | We determined a lower level of specific materiality for the following areas: - Related party transactions; and - Directors' remuneration. | Strategic Report Our Governance Financial Statements For visual only, text to be supplied 7 # Independent auditors' report continued to the members of Wilmington plc # Our application of materiality continued | Materiality measure | Group | Parent company | | --- | --- | --- | | **Communication of misstatements to the Audit Committee** | We determine a threshold for reporting unadjusted differences to the Audit Committee. | | | Threshold for communication | £35,950 and misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. | £26,960 and misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. | The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential uncorrected misstatements. # Overall materiality – Group ![img-7.jpeg](img-7.jpeg) # Overall materiality – parent company # An overview of the scope of our audit We performed a risk-based audit that requires an understanding of the Group's and the parent company's business and in particular matters related to: # Understanding the Group, its components, and their environments, including Group-wide controls - obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level; - evaluation by the Group audit team of identified components to assess the significance of each component and to determine the planned audit response based on a measure of materiality. # Identifying significant components - in setting our audit scope we determined any individual component which contributed more than 10% to consolidated revenues or consolidated underlying profit or loss before taxation to be financially significant to the Group; - financially significant components were identified as Wilmington Publishing & Information Limited and Wilmington Healthcare Limited, Wilmington plc and Wilmington Shared Services Limited were also identified as significant components due to qualitative factors. These four components were subject to full scope audit procedures and represent 23% of the Group's revenue and 22% of the Group's loss before tax. All work in relation to these components was performed by the Group audit team; - five further components were identified as not being financially significant but still requiring full scope audit procedures, being Wilmington Holdings No 1 Limited, Axco Information Services Limited, Mercia Group Limited, International Compliance Training Limited and Bond Solon Training Limited. All work in relation to these components was performed by the Group audit team; - five further components were identified for specified audit procedures on specific balances. The work on these components was targeted according to the nature of the balances within these components. All work in relation to these components was performed by the Group audit team; - the remaining 42 components were subject to analytical procedures commensurate with their significance to the Group's results and financial position. Wilmington plc Annual Report and Financial Statements 2022 # Type of work to be performed on financial information of parent and other components - for the parent company and other financially significant components requiring a full-scope approach, we evaluated the design and implementation of controls over the financial reporting systems identified as part of our risk assessment and addressed critical accounting matters. We then undertook substantive testing on significant transactions and material account balances; - for components identified as not being financially significant but still requiring a full-scope approach, the financial information of each component was subjected to audit procedures to component material; - for components identified for specified audit procedures, audit procedures were performed on revenue balances to provide us with assurance for the significant risk and key audit matter of the recognition of revenue. # Performance of our audit - work performed over full scope components and specified procedure components covered 78% of the Group's revenue and 82% of the Group's loss before tax; and - the remaining components of the Group were subject to analytical procedures commensurate with their significance to the Group's results and financial position. # Changes in approach from prior year - the subsidiary Bond Solon Training Limited has been identified as not being financially significant but still requiring a full-scope audit this year whereas it was identified as requiring specified audit procedures in the prior year. | Audit approach | No. of components | % coverage Revenue | % coverage Loss before tax | | --- | --- | --- | --- | | Significant, requiring full-scope audit | 4 | 23% | 22% | | Not significant, requiring full-scope audit | 5 | 37% | 56% | | Specified audit procedures | 5 | 18% | 4% | | Analytical procedures | 42 | 22% | 18% | For visual only, text to be supplied ## Strategic Report Financial StatementsOur Governance 73 ## Independent auditors’ report continued to the members of Wilmington plc Other information • the parent company financial statements and the part of the Directors’ • the section of the Annual Report that describes the review of the The Directors are responsible for the other information. The other remuneration report to be audited are not in agreement with the effectiveness of the Group’s and the parent company’s risk information comprises the information included in the Annual Report and accounting records and returns; or management and internal control systems, covering all material financial statements, other than the financial statements and our Auditors’ controls, including financial, operational and compliance controls; and • certain disclosures of Directors’ remuneration specified by law are not report thereon. Our opinion on the financial statements does not cover the made; or • the section of the Annual Report describing the work of the Audit other information and, except to the extent otherwise explicitly stated in Committee, including significant issues that the Audit Committee our report, we do not express any form of assurance conclusion thereon. • we have not received all the information and explanations we require considered relating to the financial statements and how these issues for our audit. In connection with our audit of the financial statements, our responsibility were addressed. is to read the other information and, in doing so, consider whether the Corporate governance statement Responsibilities of Directors for the financial statements other information is materially inconsistent with the financial statements or The Listing Rules require us to review the Directors’ statement in relation As explained more fully in the Statement of Directors’ responsibilities set our knowledge obtained in the audit or otherwise appears to be materially to going concern, longer term viability and that part of the Corporate out on page 74 the Directors are responsible for the preparation of the misstated. If we identify such material inconsistencies or apparent material Governance Statement relating to the Group’s and the parent company’s financial statements and for being satisfied that they give a true and fair misstatements, we are required to determine whether there is a material compliance with the provisions of the UK Corporate Governance view, and for such internal control as the Directors determine is necessary misstatement in the financial statements or a material misstatement of the Statement specified for our review. to enable the preparation of financial statements that are free from other information. If, based on the work we have performed, we conclude Based on the work undertaken as part of our audit, we have concluded material misstatement, whether due to fraud or error. that there is a material misstatement of this other information, we are that each of the following elements of the Corporate Governance required to report that fact. In preparing the financial statements, the Directors are responsible for Statement is materially consistent with the financial statements or our assessing the Group’s and the parent company’s ability to continue as a We have nothing to report in this regard. knowledge obtained during the audit: going concern, disclosing, as applicable, matters related to going concern Our opinions on other matters prescribed by the Companies Act • the Directors’ statement in the financial statements about whether the and using the going concern basis of accounting unless the Directors 2006 are unmodified Directors considered it appropriate to adopt the going concern basis either intend to liquidate the Group or the parent company or to cease In our opinion, the part of the Directors’ remuneration report to be audited of accounting in preparing the financial statements and the Directors’ operations, or have no realistic alternative but to do so. has been properly prepared in accordance with the Companies Act 2006. identification of any material uncertainties to the Group’s and the Auditors’ responsibilities for the audit of the financial statements parent company’s ability to continue to do so over a period of at least In our opinion, based on the work undertaken in the course of the audit: Our objectives are to obtain reasonable assurance about whether the twelve months from the date of approval of the financial statements; financial statements as a whole are free from material misstatement, • the information given in the Strategic report and the Directors’ report • the Directors’ explanation in the Annual Report as to how they have whether due to fraud or error, and to issue an Auditors’ report that includes for the financial year for which the financial statements are prepared is assessed the prospects of the Group and the parent company, over our opinion. Reasonable assurance is a high level of assurance but is not a consistent with the financial statements; and what period they have done so and why they consider that period to be guarantee that an audit conducted in accordance with ISAs (UK) will • the Strategic report and the Directors’ report have been prepared in appropriate, and their statement as to whether they have a reasonable always detect a material misstatement when it exists. Misstatements can accordance with applicable legal requirements. expectation that the Group and the parent company will be able to arise from fraud or error and are considered material if, individually or in the continue in operation and meet their liabilities as they fall due over the aggregate, they could reasonably be expected to influence the economic Matter on which we are required to report under the Companies period of their assessment, including any related disclosures drawing decisions of users taken on the basis of these financial statements. Act 2006 attention to any necessary qualifications or assumptions; In the light of the knowledge and understanding of the Group and the A further description of our responsibilities for the audit of the financial parent company and its environment obtained in the course of the audit, • the Directors’ statement that they consider the Annual Report and statements is located on the Financial Reporting Council’s website at: we have not identified material misstatements in the Strategic report or the financial statements taken as a whole is fair, balanced and www.frc.org.uk/auditorsresponsibilities. This description forms part of our Directors’ report. understandable and provides the information necessary for Auditors’ report. shareholders to assess the Group’s and the parent company’s Matters on which we are required to report by exception Explanation as to what extent the audit was considered capable performance, business model and strategy; We have nothing to report in respect of the following matters in relation to of detecting irregularities, including fraud which the Companies Act 2006 requires us to report to you if, in our opinion: • the Directors’ confirmation in the Annual Report that they have carried Irregularities, including fraud, are instances of non-compliance with laws out a robust assessment of the principal and emerging risks facing the and regulations. We design procedures in line with our responsibilities, • adequate accounting records have not been kept by the parent Group and the parent company including the impact of Brexit and outlined above, to detect material misstatements in respect of company, or returns adequate for our audit have not been received Covid-19 and the disclosures in the Annual Report that describe the irregularities, including fraud. Owing to the inherent limitations of an audit, from branches not visited by us; or principal risks, procedures to identify emerging risks and an there is an unavoidable risk that material misstatements in the financial explanation of how they are being managed or mitigated; statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements For visual only, text to be supplied 7 # Independent auditors' report continued to the members of Wilmington plc # Other information continued # Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud continued The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: - We obtained an understanding of the legal and regulatory frameworks applicable to the Group and the parent company and the sector in which they operate. We determined that the following laws and regulations were most significant: international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union and international accounting standards in conformity with the requirements of the Companies Act 2006 for the Group, and international accounting standards in conformity with the requirements of, and as applied in accordance with the provisions of, the Companies Act 2006 for the parent company, the Companies Act 2006, the Listing Rules, the UK Corporate Governance Code and UK corporate taxation laws. - We obtained an understanding of how the Group and the parent company are complying with those legal and regulatory frameworks by making inquiries of management and of the Group's head of legal department. We corroborated our inquiries through our review of board minutes and papers provided to the Audit Committee. - We evaluated the design and implementation of controls over the financial reporting systems and the effectiveness of the control environment as part of our risk assessment. - We assessed the susceptibility of the Group's and the parent company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the Group engagement team included: - identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; - obtaining an understanding of how those charged with governance considered and addressed the potential for override of controls or applied other inappropriate influence over the financial reporting process. - challenging assumptions and judgments made by management in its significant accounting estimates; - identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and - assessing the extent of compliance with the relevant laws and regulations. - The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify and recognise non-compliance with laws and regulations through an assessment of the engagement team's: - understanding of, and practical experience with, audit engagements of a similar nature and complexity, through appropriate training and participation; and - knowledge of the industry in which the Group and parent company operate. - Team communications in respect of potential non-compliance with laws and regulations and fraud included the potential for fraud in revenue recognition through manipulation of deferred income. This is also reported as a key audit matter in the key audit matters section of our report, where the matter and specific procedures performed in response to this matter are described in more detail. # Other matters which we are required to address Following the recommendation of the Audit Committee, we were appointed by the Board on 28 January 2019 to audit the financial statements for the year ending 30 June 2019 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 3 years, covering the periods ended 30 June 2019 to 30 June 2021. The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Group or the parent company and we remain independent of the Group and the parent company in conducting our audit. Our audit opinion is consistent with the additional report to the Audit Committee. # Use of our report This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report or for the opinions we have formed. Sergio Cardoso Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditors, Chartered Accountants London 17 September 2021 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 75 ## Consolidated income statement for the year ended 30 June 2022 | | Year ended | | Year ended | | | --- | --- | --- | --- | --- | | | 30 June 2022 | | 30 June 2021 | | | Notes | | £’000 | | £’000 | Continuing operations Revenue 3 121,028 113,027 Operating expenses before amortisation of intangibles excluding computer software, impairment and adjusting items (99,40 7) (96,37 8) Impairment of goodwill, intangible assets and property, plant and equipment 4b (597) (14,834) Amortisation of intangible assets excluding computer software 4b (2,368) (3, 400) Adjusting items 4b (66) (2,970) Operating expenses 5 (102,438) (117 ,582) Other income – gain on disposal of subsidiaries 11 16,329 7 70 Other income – gain on disposal of business operations — 3,394 Other income – gain on disposal of property, plant and equipment 4a 1,289 — Other income – net gain on financing activities 840 — Operating profit/(loss) 37,048 (391) Net finance costs 6 (928) (1, 634) Profit/(loss) before tax 36,120 (2,025) Taxation 7 (3,295) (2,522) Profit/(loss) for the year attributable to owners of the parent 32,825 (4,54 7) Earnings/(loss) per share: Basic (p) 9 3 7. 4 6 (5. 18) Diluted (p) 9 36.98 (5. 18) The notes on pages [67] to [99] are an integral part of these consolidated financial statements. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 76 ## Consolidated statement of comprehensive income for the year ended 30 June 2022 | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | | | 30 June | | | 30 June | | | | | 2022 | | | 2021 | | | | £’000 | | | £’000 | Profit/(loss) for the year 32,825 (4,547) Other comprehensive income/(expense): Items that may be reclassified subsequently to the income statement Fair value movements on interest rate swaps, net of tax — 93 Currency translation differences 2,353 (1,732) Fair value movements of net investment hedges, net of tax (193) 762 Other comprehensive income/(expense) for the year, net of tax 2, 160 (87 7) Total comprehensive income/(expense) for the year attributable to owners of the parent 34, 985 (5,42 4) Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in note 7. The notes on pages [67] to [99] are an integral part of these financial statements. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 77 ## Balance sheets as at 30 June 2022 | | | Group Company | | | | Wilmington plc, the parent company, recorded a profit of £14,959,000 | | --- | --- | --- | --- | --- | --- | --- | | | 2022 | | 2021 | 2022 | 2021 | (2021: £37,865,000) during the year. | | Notes | £’000 | | £’000 | £’000 | £’000 | | The notes on pages [67] to [99] are an integral part of these consolidated Non-current assets financial statements. The financial statements on pages [62] to [99] were Goodwill 12 61, 128 65,833 — — approved and authorised for issue by the Board and signed on their behalf Intangible assets 13 9,42 7 14,000 — — on [21] September 2022. Property, plant and equipment 14 6, 876 9,2 77 4,108 4,833 Investment in subsidiaries 15 — — 49,420 49,420 Deferred consideration receivable 1,448 1,585 — — Derivative financial instruments 17 — 57 — 57 Mark Milner Guy Millward Deferred tax assets 22 1,041 1,364 504 439 Chief Executive Officer Chief Financial Officer 79,920 9 2 ,1 1 6 54,032 54,749 Current assets Registered number: 03015847 Trade and other receivables 16 27,097 28, 698 118,741 106,964 Deferred consideration receivable 250 250 — — Current tax assets 1,262 312 — — Cash and cash equivalents 19,785 7, 3 74 15,734 2,702 Assets of disposal group held for sale 20 1,450 1,588 — — 49,844 38, 222 134,475 109,666 Total assets 129,764 130,338 188,507 164,415 Current liabilities Trade and other payables 18 (50,258) (54,959) (53,314) (37,167) Current tax liabilities — — (170) (170) Borrowings 19 — (3,644) — — Lease liabilities 25 (64 8) (2,356) (118) (1,606) Provisions 26 (307) (461) — — Liabilities of disposal group held for sale 20 (1,332) — — — (52,545) (61,420) (53,602) (38,943) Non-current liabilities Borrowings 19 — (20, 430) — — Lease liabilities 25 (6,862) (8,386) (6,107) (7,357) Deferred tax liabilities 22 (2,040) (2,054) — — Provisions 26 (1,228) (1,381) — — (10, 130) (32,251) (6,107) (7,357) Total liabilities (62,6 75) (93,671) (59,709) (46,300) Net assets 67 ,089 36, 667 128,798 118,115 Equity Share capital 23 4,391 4,380 4,391 4,380 Share premium 23 45,553 45,225 45,553 45,225 Treasury and ESOT reserves 23 (1,093) (701) (183) (78) Share based payments reserve 2, 141 1,390 2,141 1,390 Translation reserve 4,422 2 ,069 — — Retained earnings/(accumulated losses) 1 1,6 75 (15, 696) 76,896 67,198 Total equity 67 ,089 36, 667 128,798 118,115 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 78 ## Statements of changes in equity for the year ended 30 June 2022 Share capital, share premium, | ESOT shares | | Share based | | | | Retained earnings/ | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | and treasury | | | payments | Translation | | | (accumulated | | | | | shares (note 23) | | | reserve | | reserve | | | losses) | Total equity | | | | £’000 | | £’000 | | £’000 | | | £’000 | | £’000 | Group At 30 June 2020 49,0 15 1, 195 3,801 (10 ,605) 43, 406 Loss for the year — — — (4,547) (4,547) Other comprehensive (expense)/income for the year — — (1,7 32) 855 (87 7) 49,0 15 1, 195 2 ,0 69 (14,29 7) 3 7, 9 8 2 Transactions with owners: Dividends paid — — — (1,829) (1,829) Performance share plan awards vesting settled via ESOT 137 (241) — 104 — ESOT share purchases (263) — — — (263) Sale of treasury shares 15 — — — 15 Share based payments — 436 — — 436 Tax on share based payments — — — 326 326 At 30 June 2021 48,904 1,390 2 ,069 (15, 696) 36, 667 Profit for the year — — — 32,825 32,825 Other comprehensive income/(expense) for the year — — 2,353 (193) 2, 160 48,904 1,390 4, 422 16,936 71, 652 Transactions with owners: Dividends paid — — — (5,492) (5,492) Performance share plan awards vesting settled via ESOT 84 (105) — 21 — ESOT share purchases (371) — — — (371) Sale of treasury shares 49 — — — 49 Purchase of treasury shares (154) — — — (154) Issue of share capital 11 — — — 11 Issue of share premium 328 — — — 328 Save as you earn options settlement — (1 80) — 152 (28) Share based payments — 1,036 — — 1,036 Tax on share based payments — — — 58 58 At 30 June 2022 48,851 2, 141 4 ,422 1 1,6 75 67 ,089 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 79 ## Statements of changes in equity continued for the year ended 30 June 2022 Share capital, | share premium | | Share based | | | | | | --- | --- | --- | --- | --- | --- | --- | | and treasury | | | payments | | Retained | | | shares (note 23) | | | | reserve | earnings | Tota l | | | £’000 | | | £’000 | £’000 | £’000 | Company At 30 June 2020 49,512 1,195 30,638 81,345 Profit for the year — — 37,865 37,865 Other comprehensive income for the year — — 94 94 49,512 1,195 68,597 119,304 Dividends paid — — (1,829) (1,829) Performance share plan awards vesting settled via ESOT — (241) 104 (137) Sale of treasury shares 15 — — 15 Share based payments — 436 — 436 Tax on share based payments — — 326 326 At 30 June 2021 49,527 1,390 67,198 118,115 Profit for the year — — 14,959 14,959 49,527 1,390 82,157 133,074 Dividends paid — — (5,492) (5,492) Performance share plan awards vesting settled via ESOT — (105) 21 (84) Sale of treasury shares 49 — — 49 Purchase of treasury shares (154) — — (154) Issue of share capital 11 — — 11 Issue of share premium 328 — — 328 Save as you earn options settlement — (180) 152 (28) Share based payments — 1,036 — 1,036 Tax on share based payments — — 58 58 At 30 June 2022 49,761 2,141 76,896 128,798 The notes on pages [67] to [99] are an integral part of these consolidated financial statements. Wilmington plc Annual Report and Financial Statements 2022 Table spacing reduced to fit all on 1 page ## Strategic Report Financial StatementsOur Governance 80 ## Cash flow statements for the year ended 30 June 2022 Group Company | | Year ended | | Year ended | | Year ended | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 30 June 2022 | | 30 June 2021 | | 30 June 2022 | | 30 June 2021 | | | Notes | | £’000 | | £’000 | | £’000 | | £’000 | Cash flows from operating activities Cash generated from/(used in) operations before adjusting items 30 24,570 17 ,290 (6,715) 20,384 Cash flows for adjusting items – operating activities (342) (339) (342) — Cash flows from tax on share based payments (4) 9 (4) 9 Cash generated from/(used in) operations 24,2 24 16,960 (7,061) 20,393 Interest paid (479) (1, 196) (318) (246) Tax paid (3,39 7) (2,6 97) (2,393) (2,097) Net cash generated from/(used in) operating activities 20,348 13,067 (9,772) 18,050 Cash flows from investing activities Disposal of subsidiaries net of cash 11 2 2,79 2 400 23,345 — Disposal of business operations — 4, 144 — — Deferred consideration received 250 250 — — Cash flows for adjusting items – investing activities (43) (151) (43) (151) Purchase of property, plant and equipment (44 0) (1,047) — — Proceeds from disposal of property, plant and equipment 3,493 103 3,439 — Purchase of intangible assets (1,292) (1,96 9) — — Net cash generated from/(used in) investing activities 24,760 1,730 26,741 (151) Cash flows from financing activities Dividends paid to owners of the parent (5,492) (1,829) (5,492) (1,829) Issue of new shares 340 — 340 — Share issuance costs (28) — (28) — Purchase of shares by ESOT (371) (263) — — Payment of lease liabilities (3, 752) (2,530) — — Cash flows for adjusting items - financing activities 1,243 — 1,243 — Fees relating to new and extended loan facility — (191) — (191) Increase in bank loans — 2,000 — 16,000 Decrease in bank loans (21, 198) (29, 181) — (36,181) Net cash used in financing activities (29,258) (31,994) (3,937) (22,201) Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 15,850 (17 , 197) 13,032 (4,302) Cash and cash equivalents, net of bank overdrafts at beginning of the year 3,730 21,426 2,702 7,004 Exchange gain/(loss) on cash and cash equivalents 205 (499) — — Cash classified as held for sale 758 — — — Cash and cash equivalents, net of bank overdrafts at end of the year 20,543 3, 730 15,734 2,702 Reconciliation of net cash/(debt) Cash and cash equivalents at beginning of the year 7, 3 74 21, 426 2,702 7,004 Bank overdrafts at beginning of the year (3,644) — — — Bank loans at beginning of the year 19 (20, 960) (49,082) — (20,181) Lease liabilities at beginning of the year (1 0,742) (13, 121) (8,963) (10,079) Net debt at beginning of the year (27 ,97 2) (4 0, 777) (6,261) (23,256) Net increase/(decrease) in cash and cash equivalents, net of bank overdrafts 16,8 13 (17 ,696) 13,032 (4,302) Net repayment in bank loans 21, 198 2 7,1 8 1 — 20,181 Exchange (loss)/gain on bank loans (238) 941 — — Movement in lease liabilities 3,232 2 ,379 2,738 1,116 Cash and cash equivalents at end of the year 19,785 7, 3 74 15,734 2,702 Cash classified as held for sale at end of the year 20 758 — — — Bank overdrafts at end of the year — (3,644) — — Bank loans at end of the year 19 — (20,960) — — Lease liabilities at end of the year (7 ,510) (10,7 42) (6,225) (8,963) Net cash/(debt) at end of the year 13,033 (27 ,972) 9,509 (6,261) The notes on pages [67] to [99] are an integral part of these consolidated financial statements. Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements # Notes to the financial statements # General information The Company is a public company limited by shares, incorporated and domiciled in the UK. The address of its registered office is 10 Whitechapel High Street, London E1 8QS. The Company is listed on the Main Market on the London Stock Exchange. The Company is a provider of data, information, education and training in the global Governance, Risk and Compliance (GRC) markets. # 1. Statement of accounting policies The significant accounting policies applied in preparing the financial statements are outlined below. These policies have been consistently applied for all the years presented, unless otherwise stated. # a) Basis of preparation The consolidated and Company financial statements have been prepared in accordance with UK adopted international accounting standards (UK adopted IAS) and IFRS as issued by the IASB in conformity with the requirements of the Companies Act 2006. The consolidated financial statements have been prepared under the historical cost convention, except in respect of certain financial instruments that have been measured at fair value. The consolidated financial statements are presented in Sterling, the functional currency of Wilmington plc, the parent company. All values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated. Pursuant to Section 408 of the Companies Act 2006 the Company's own income statement and statement of other comprehensive income are not presented separately in the Company financial statements, but they have been approved by the Board. # Going concern The Directors have performed a detailed viability assessment to consider the future prospects of the Group, taking into account a range of severe but plausible scenarios that could cause disruption and impact viability. As disclosed in the Strategic report, this assessment concludes that the Group has adequate resources to continue in operational existence and meet its liabilities as they fall due over the viability assessment period. The Group has also performed a detailed analysis to support the use of the going concern basis in preparing its consolidated financial statements for the year ended 30 June 2022, covering an assessment period ended 30 September 2023. # Going concern assessment process Management prepared forecasts for the assessment period to provide a 'base case' scenario, considered to reflect the most likely outcome based on detailed analysis of current trading, expected future trends, and potential impact of known risks. The results of this base case scenario modelling demonstrate adequate resources to continue in operational existence and meet liabilities as they fall due at all relevant testing dates. The subsequent analysis focussed on applying 'reverse stress testing' to the base case to demonstrate the conditions under which a threat to business continuity could materialise. All scenarios modelled in the stress testing exercise demonstrated that the Group remains in a net cash position throughout the going concern forecast period, and it is therefore not considered plausible for the Group to be in a scenario where it was unable to meet its liquidity needs. The review therefore focussed on other potential scenarios that would create a going concern risk, being scenarios in which banking covenants were breached. The reverse stress testing exercise demonstrated that there would need to be a significant and sustained drop in the Group's profitability in combination with an associated demand for cash requiring the use of the revolving credit facility to trigger a covenant breach. To determine the likelihood of this scenario occurring, extreme downside assumptions were applied to the base case as follows: - cancellation of flagship events; - significant customer disruption causing material revenue loss; and - significant inflationary pressures and supply disruption with associated material cost impact. The application of these downside assumptions did not trigger a net debt scenario or the associated cash requirement need to make use of the revolving credit facility at any relevant testing date. The Board therefore does not consider it plausible for a covenant breach to occur within the assessment period. To gain further assurance over this conclusion, it has however considered a range of mitigative actions that could be applied to protect the Group's position as follows: - reduce controllable costs for example, discretionary reward, recruitment freezes and travel restrictions; - optimise working capital by negotiating longer payment terms whilst continuing to pay suppliers in full; - limit capital expenditure on new product development; and - implement strategic action in respect of the Group's asset base. Based on the assessment performed, together with the performance of the Group to date in the financial year ended 30 June 2022, the Directors consider that the Group has adequate resources to continue in operational existence and meet its liabilities as they fall due over the going concern assessment period. Accordingly the Directors have concluded that it was appropriate to adopt the going concern basis in preparing the financial statements. # b) New standards and interpretations There was no material impact from the adoption of any new standards or interpretations in the year ended 30 June 2021, including: | International Financial Reporting Standards (IFRS/IAS) | Description | Effective for accounting periods starting at end of year | | --- | --- | --- | | Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 | Interest Rate Benchmark Reform – Phase 2 | 1 January 2022 | | Amendment to IFRS 16 | COVID-19-Related Rent Concessions beyond 30 June 2021 | 1 April 2022 | Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 82 ## Notes to the financial statements continued 1. Statement of accounting policies continued Where a business combination agreement provides for an adjustment to the cost of a business acquired b) New standards and interpretations continued contingent on future events, the Group accrues the fair value of the additional consideration payable as a liability New standards and interpretations not yet effective at acquisition date. This amount is reassessed at each subsequent reporting date with any adjustments Amended standards and interpretations not yet effective are not expected to have a material impact on the recognised in the income statement. Group’s consolidated financial statements for the year ended 30 June 2023. f) Impairment of non-financial assets c) Critical accounting judgments, estimates and assumptions Intangible assets with finite useful lives and property, plant and equipment are tested for impairment if events or The preparation of financial statements requires management to make judgments, estimates and assumptions changes in circumstances indicate that the carrying amount may not be recoverable. When an impairment test is that affect the amounts reported for income and expenses during the year and that affect the amounts reported performed, the recoverable amount of the asset is assessed and its carrying amount is reduced to that amount if for assets and liabilities at the reporting date. At the 2022 annual reporting date there are no significant judgments, lower, and any impairment losses are recognised in the income statement. The recoverable amount is the higher however the estimates and assumptions are outlined below. of the value in use and of the fair value less costs to sell, where the value in use is the present value of the future cash flows expected to be derived from the asset. Goodwill and intangible assets Management makes estimates and assumptions in measuring the carrying amount of goodwill and intangible If, in a subsequent period, the amount of the impairment loss decreases due to a change in the estimates used to assets. In considering whether goodwill and intangible assets have been impaired, the recoverable amount of determine the asset’s recoverable amount since the last impairment loss was recognised, the previously recognised cash generating units has been determined based on value in use calculations. These calculations require impairment loss is reversed to the extent that the carrying amount of the asset does not exceed the carrying amount management to estimate future cash flows, a long term growth rate and an appropriate discount rate. The that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for sensitivity of the carrying amount of goodwill to these variables is considered in note 12. the asset in prior years. The reversal of an impairment loss is recognised in the income statement. Provisions Goodwill is not amortised, but it is reviewed for impairment at least annually. Goodwill is allocated to cash Management makes estimates and assumptions in measuring the carrying value of provisions. The measurement generating units (‘CGUs’) for the purpose of impairment testing, so that the value in use is determined by reference of provisions is subject to estimates given the extended time-period and variables which are not all within the to the discounted cash flows of the CGU. The cash flows considered are the expected pre-tax cash flows of the Group’s control. For further details please refer to note 26. CGU, for projections over a three year period extrapolated using estimated long term growth rates. The recoverable amount of the CGU, as for any asset, is the higher of the value in use and the fair value less costs to d) Basis of consolidation sell. If a CGU is impaired, the impairment losses are allocated firstly against goodwill, and then on a pro-rata basis The Group’s consolidated financial statements incorporate the results and net assets of Wilmington plc and all its against intangible and other assets. An impairment of goodwill cannot be reversed. subsidiary undertakings made up to 30 June each year. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its g) Foreign currencies involvement with the entity and has the ability to affect those returns through its power over the entity. Items included in the financial statements of each of the Group’s entities are measured using the currency of the Subsidiaries are fully consolidated from the date on which control is transferred to the Group. primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in Sterling, which is the Company’s functional and the Group’s presentation currency. They are deconsolidated from the date that control ceases. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at All inter-group transactions, balances, income and expenses are eliminated on consolidation; however, for the the date of the transaction. Foreign exchange gains and losses resulting from the settlement of transactions and purposes of segmental reporting, internal arm’s length recharges are included within the appropriate segments. the translation of monetary assets and liabilities denominated in foreign currencies at period end exchange rates are recognised in the income statement. e) Business combinations The acquisition method of accounting is applied in accounting for the acquisition of subsidiaries. The acquiree’s On consolidation, assets and liabilities of foreign undertakings are translated into Sterling at year end exchange rates. identifiable assets and liabilities are recognised at their fair value at the acquisition date. Goodwill arising on acquisition The results of foreign undertakings are translated into Sterling at average rates of exchange for the year (unless this is recognised as an asset and measured at cost, representing the excess of the aggregate of the consideration, the average is not a reasonable approximation of the cumulative effects of the rates prevailing on the transaction dates, in amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity which case income and expenses are translated at the dates of the transactions). Foreign exchange differences interest in the acquiree (if any) over the net of the fair values of the identifiable assets and liabilities at the date of arising on retranslation are recognised directly in a separate component of equity, the translation reserve. acquisition. The consideration is measured at fair value, which is the aggregate of the fair values of the assets In the event of the disposal of an undertaking with assets and liabilities denominated in a foreign currency, the transferred, liabilities incurred or assumed and the equity instruments issued in exchange for control of the acquiree. cumulative translation difference in the translation reserve that is associated with the undertaking is charged or Acquisition related costs are expensed as incurred within adjusted items – investing activities. credited to the gain or loss on disposal recognised in the income statement. Further information is provided in the financial instruments accounting policy in relation to loans and borrowings in foreign currencies that are designated as a hedge of a net investment in a foreign operation. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 83 ## Notes to the financial statements continued 1. Statement of accounting policies continued • Revenue from training courses where the training is delivered as an ongoing process, is recognised on a h) Revenue straight line basis over the period that the training is provided to the customer. When payment is received in Revenue is measured at the fair value of consideration received or receivable and represents amounts advance it is recorded on the balance sheet as deferred revenue and revenue is then recognised over time as receivablefor goods and services provided in the normal course of business, net of discounts, VAT and the performance obligations are satisfied over the term of the contract. This revenue stream relates to one othersales related taxes. performance obligation that is settled over time using the outputs method on a straight line basis as the customer simultaneously receives and consumes the benefit from the service. The Group’s revenue comprises different types of product and services across the two divisions as follows: • Revenue from training courses where the Group provides in-house training to corporate customers is • Subscription income for online services, information and journals is normally received in advance and is recognised on completion of the training course. This revenue stream relates to one performance obligation therefore recorded as deferred revenue on the balance sheet. Revenue is then recognised evenly over time as that is settled at a point in time as Wilmington has a right to payment once the service has been delivered to the performance obligations are satisfied over the term of the subscription. These revenue streams relate to thecustomer. one performance obligation that is settled over time using the outputs method on a straight line basis as the customer simultaneously receives and consumes the benefit from the service. • Revenue from the memberships of professional organisations is recognised on a straight line basis over the period of membership. When payment is received in advance it is recorded on the balance sheet as deferred • Revenue is recognised on the sale of training material, research projects and similar publications once the revenue and revenue is then recognised over time as the performance obligations are satisfied over the term product has been delivered to the customer. These revenue streams relate to one performance obligation of the contract. This revenue stream relates to one performance obligation that is settled over time using the thatis settled at a point in time as Wilmington has a right to payment once control of the asset is transferred outputs method on a straight line basis as the customer simultaneously receives and consumes the benefit tothe customer. from the service. • Advertising in hard copy publications is recognised on the issue of the related publication. This revenue stream • Event revenue (including revenue from conferences), typically includes attendee fees, event sponsorship and relates to one performance obligation that is settled at a point in time as Wilmington has a right to payment advertising which is recognised when the event is held. Customers and sponsors are often required to pay in once the advertising is published in the hard copy publication. advance before commencement of the event, and these advance receipts are recognised as deferred revenue • Marketing and advertising services revenues are recognised over the period of the advertising subscription or on the balance sheet from the point at which they become due. This revenue stream relates to one over the period when the marketing service is provided. When payment is received in advance it is recorded on performance obligation that is settled at a point in time as Wilmington has a right to payment once the service the balance sheet as deferred revenue and revenue is then recognised over time as the performance has been delivered to the customer. obligations are satisfied over the term of the contract. These revenue streams relate to one performance i) Operating expenses obligation that is settled over time using the outputs method on a straight line basis as the customer In accordance with IAS 1 paragraph 102, expenses are presented in the accounts based on their nature. Operating simultaneously receives and consumes the benefit from the service. expenses comprise of cost of sales and administrative costs. Distribution costs are not separately identified due • Revenue from the licence of static data reports is recognised once the data has been delivered to the to the digital nature of our products as they are considered immaterial. Costs of sales are all direct costs, including customer. This revenue stream relates to one performance obligation that is settled at a point in time as third-party costs and staff costs, associated directly with the production of a product, event or service and are Wilmington has a right to payment once control of the asset is transferred to the customer. charged to the income statement as incurred. At each reporting date a prepayment is recognised for any third-party costs which are paid for, in advance of the relevant event being run except in relation to marketing • Revenue from the licence of static data reports where the customer has access to the data for a finite period of costs. Administrative costs are additional operational costs that are not directly associated with the production of time and the reports have significant updates during that period is recognised over the period of the contract. a product, event or service. This includes expenses relating central administrative and management functions and When payment is received in advance it is recorded on the balance sheet as deferred revenue and revenue is are expensed to the income statement as incurred. then recognised over time as the performance obligations are satisfied over the term of the contract. This revenue stream relates to one performance obligation that is settled over time using the outputs method on a j) Segmental reporting straight line basis as the customer simultaneously receives and consumes the benefit from the service. Operating segments are reported in a manner consistent with the internal reporting provided to the Company’s Board of Directors (the ‘Board’) which is considered as the Group’s chief operating decision maker and is • Revenue from licences to dynamic data that is updated on an ongoing basis is recognised over the period of responsible for allocating resources and assessing performance of the operating segments. The Board considers the contract. When payment is received in advance it is recorded on the balance sheet as deferred revenue the business from both a geographic and product perspective. Geographically, management considers the and revenue is then recognised over time as the performance obligations are satisfied over the term of the performance of the Group between the UK, Europe (excluding the UK), North America and the Rest of the World. contract. This revenue stream relates to one performance obligation that is settled over time using the outputs method on a straight line basis as the customer simultaneously receives and consumes the benefit from theservice. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 84 ## Notes to the financial statements continued ### 1. Statement of accounting policies continued m) Dividends k) Adjusting items Dividend distributions are recognised in the consolidated financial statements when the shareholders’ right to The Group’s income statement separately identifies adjusting items. Such items are those that in the Directors’ receive payment is established. Final dividend distributions are recognised in the period in which they are judgment are one-off in nature and need to be disclosed separately by virtue of their size and incidence. In approved by the shareholders, whilst interim dividend distributions are recognised in the period in which they are determining whether an item or transaction should be classified as an adjusting item, the Directors consider declared and paid. quantitative as well as qualitative factors such as the frequency, predictability of occurrence and significance. n) Intangible assets This focus on quantitative and qualitative factors may result in the classification of an item as adjusting, where one Intangible assets are stated at historical cost less accumulated amortisation. of apparently similar nature is not. The Group distinguishes between restructuring costs that are recurring and Intangible assets are recorded at cost and are amortised through the income statement on a straight line basis those that relate to one-off or transformational Group programmes that impact many operations. Recurring over their estimated useful lives. Their estimated useful lives depend on the classification of the assets as follows: restructuring costs that are incurred in the normal course of business are recorded as part of the Group’s underlying trading results within profit before tax. Restructuring costs that are one-off and individually material or Computer software 20–33% per annum relate to programmes linked to the Group’s wider transformation and require approval at executive level are Databases 8–20% per annum disclosed separately in the Consolidated income statement. When these adjusting items relate to a transformational programme to the business, the cost may apply to multiple years. Customer relationships 8–33% per annum This is consistent with the way that financial performance is measured by management and reported to the Brands 5–20% per annum Board. Adjusting items may not be comparable to similarly titled measures used by other companies. Disclosing Publishing rights and titles 5–10% per annum adjusted items separately provides additional understanding of the performance of the Group. Computer software that is integral to a related item of hardware is classified as computer equipment within l) Current and deferred tax property, plant and equipment. Other computer software and internally developed software and databases are Current and deferred tax is recognised as income or an expense and included in the income statement for the classified as intangible assets if they meet the definition and recognition criteria set out in IAS 38. Costs period, except to the extent that it relates to items recognised directly in other comprehensive income or directly associated with the production of internally developed software are capitalised once it is probable that they will in equity, in which case it is recognised in other comprehensive income or equity, respectively. generate future economic benefits and satisfy the other criteria set out in IAS 38. Computer software intangible The tax effect of adjusting items is calculated by applying the relevant prevailing rate of taxation to the adjusting assets (including the cost of internally developed software and databases) are initially recognised at cost. They expense or income to the extent it is taxable or tax deductible. are subsequently amortised through the income statement on a straight line basis over their estimated useful lives up to five years. Assets that are not in use at the reporting date (assets under construction) are recognised at cost The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance and amortisation commences when those assets begin to generate economic benefit. sheet date in the countries where the Company’s subsidiaries operate and generate taxable income. Management periodically evaluate positions taken in tax returns with respect to situations in which applicable tax o) Property, plant and equipment regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts Property, plant and equipment is stated at historical cost less accumulated depreciation. Cost includes the original expected to be paid to the tax authorities. purchase price of the asset plus any costs of bringing the asset to its working condition for its intended use. Depreciation is not provided on freehold land. On other assets it is provided at the following annual rates, on a Deferred tax is recognised, using the liability method, on temporary differences arising between the tax bases of straight line basis, in order to write down each asset to its residual value over its estimated useful life. The assets’ assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Land, freehold and leasehold buildings (excluding freehold land) 2–10% per annum Deferred tax is determined using tax rates (and law) that have been enacted or substantially enacted by the Fixtures and fittings 10–33% per annum balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Computer equipment 25–33% per annum Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available Motor vehicles 25% per annum against which the temporary differences can be utilised. Leasehold improvements are included in land, freehold and leasehold buildings. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets Gains and losses arising on disposal are determined by comparing the proceeds with the carrying amount and against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes levied by the are recognised within the income statement. When the gain or loss arising on disposal is significant or material, it same taxation authority on either the same taxable entity or different taxable entities where there is an intention to is disclosed separately on the income statement within other income or expenses. settle the balances on a net basis. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 85 ## Notes to the financial statements continued ### 1. Statement of accounting policies continued Financial liabilities p) Investments in subsidiaries Trade and other payables Investments in subsidiaries are stated at cost less provision for any impairment in value. Trade and other payables are initially recognised at fair value, which is usually the invoiced amount. They are subsequently carried at amortised cost using the effective interest method (if the time value of money is significant). q) Financial instruments Financial assets If due within twelve months or less, the trade or other payable is classified as a current liability. It is otherwise The Group classifies its non-derivative financial assets as ‘amortised cost’ for the purposes of IFRS 9. classified as a non-current liability. Management determines the classification at initial recognition and re-evaluates this designation at each The Group measures trade and other payables at amortised cost for the purposes of IFRS 9. reporting date. Loans and other borrowings Loans and other receivables Loans and other borrowings are initially recognised at the fair value of the amounts received net of transaction Loans and other receivables are measured based on the Group’s business model for managing the financial asset costs. They are subsequently carried at amortised cost using the effective interest method, with changes in and its contractual cash flow characteristics. Loans and other receivables are initially recognised at fair value plus carrying value recognised in the income statement. transaction costs. They are subsequently carried at amortised cost using the effective interest method less any expected credit losses, with changes in carrying value recognised in the income statement. Further information is provided below in relation to loans and borrowings in foreign currencies that are designated as a hedge of a net investment in a foreign operation. Loans and other receivables are classified as current assets if they mature within twelve months of the reporting date, but are otherwise classified as non-current assets. Loans and other borrowings are classified as current liabilities if they mature within twelve months of the balance sheet date, but are otherwise classified as non-current liabilities. Trade receivables Trade receivables are initially recognised at the transaction price, which is usually the invoiced amount. They are The Group measures loans and other borrowings at amortised cost for the purposes of IFRS 9. subsequently carried at amortised cost using the effective interest method (if the time value of money is Financial instruments and hedge accounting significant), less provisions made for doubtful receivables. Provisions are made specifically, where there is The Group manages its capital and makes adjustments to it in light of changes in economic conditions and the evidence of a risk of non-payment taking into account ageing, previous losses experienced and general economic risk characteristics of the underlying assets. The Group makes use of derivative financial instruments if doing so conditions. reduces exposure to interest rate risk and foreign currency risk. The Group assesses for impairment using the expected credit losses model as required by IFRS 9. For trade To qualify for hedge accounting under IFRS 9, a financial instrument must be designated as a hedging instrument receivables, the Group applies the simplified approach which requires expected lifetime losses to be recognised at inception, hedge documentation must be prepared and the hedge must be expected to be effective using the from the initial recognition of the receivables. hedge ratio. The effectiveness of the hedge is then tested at each reporting date prospectively, and hedge The Group measures its trade receivables at amortised cost for the purposes of IFRS 9. accounting is continued if the hedge remains effective. Hedge accounting is discontinued when the hedging instrument expires, or is sold, terminated or no longer qualifies for hedge accounting, or if the Group chooses to Cash and cash equivalents end the hedge relationship. Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and other short term highly liquid investments which are subject to insignificant risk of changes in value and have original To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging maturities of three months or less. Cash and cash equivalents are offset against bank overdrafts and the net instruments in cash flow hedges and net investment hedges are recognised in other comprehensive income and amount is reported in the balance sheet when there is a legally enforceable right to offset the recognised included within the hedge reserve in equity. Any ineffectiveness in the hedge relationship is recognised amounts. Bank overdrafts are otherwise shown as borrowings within current liabilities on the balance sheet. immediately in the income statement. The Group measures cash and cash equivalents at amortised cost for the purposes of IFRS 9. At the time the hedged item affects profit or loss, any gain or loss previously recognised in equity is reclassified to the income statement. If a forecast transaction is no longer expected to occur, any related gain or loss recognised Impairment of financial assets in other comprehensive income and equity is transferred immediately to the income statement. If the hedging The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets relationship ceases to meet the effectiveness conditions, hedge accounting is discontinued. carried at amortised cost and debt instruments at fair value through other comprehensive income. Expected credit losses are updated at each reporting date to reflect changes in credit risk. r) Provisions Provisions are recognised in the balance sheet when the Group has a present legal or constructive obligation as a The expected credit loss is based on the Group’s historical credit loss experience, adjusted for factors that are result of a past event, and it is probable that an outflow of economic benefits will be required to settle it. If the effect is specific to the financial assets, general economic conditions and an assessment of the current and forecast material, provisions are determined by discounting the expected future cash flows at an appropriate discount rate. conditions at the reporting date. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 86 ## Notes to the financial statements continued 1. Statement of accounting policies continued The right-of-use asset is measured at cost, based on the value of the initial measurement of the associated lease s) Retirement benefits liability, adjusted for any lease payments already made less any lease incentives received, initial direct costs The Group does not operate a defined benefit pension scheme. incurred, and any dilapidation or restoration costs required by the terms and conditions of the lease. The right-of-use asset is depreciated over the term of the lease on a straight line basis, or if shorter, over the leased The Group contributes to defined contribution pension schemes for a number of employees. Contributions to asset’s useful economic life. these arrangements are charged in the income statement in the period in which they are incurred. The Group has no further payment obligation once the contributions have been paid. When an adjustment to lease payments based on an index or rate takes effect, the liability is re-measured with a corresponding adjustment to the associated right-of-use asset. t) Share based payments The Group operates an equity-settled, share based compensation plan, under which the entity receives services The Group recognises an expense in the consolidated income statement in respect of short term leases (being from employees as consideration for equity instruments (share awards and options) of the Group. The fair value of those with an initial term of twelve months or less) and leases of low-value items on a straight line basis over the the employee services received in exchange for the grant of share awards and options is recognised as an life of the lease. expense. The total amount to be expensed is determined by reference to the fair value of the share awards and v) Share capital options granted, excluding the impact of any non-market service and performance vesting conditions (for Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or example, profitability and remaining as an employee of the entity over a specified time period). Non-market options are shown in equity as a deduction, net of tax, from the proceeds. The share premium reserve represents vesting conditions are included in assumptions about the number of share awards and options that are expected the amount paid to the Company by shareholders above the nominal value of shares issued. to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified existing conditions are to be satisfied. At each balance sheet date, the entity revises its estimates of the Where any Group company purchases the Company’s equity share capital (‘Treasury shares’), the consideration number of share awards and options that are expected to vest based on the non-market vesting conditions. It paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding attributable to the Company’s equity holders until the shares are cancelled or reissued. adjustment to the share based payments reserve within equity. ### 2. Measures of profit The payment in lieu of dividend payable in connection with the grant of the share awards is considered an integral Reconciliation to profit on continuing activities before tax part of the grant itself, and the charge will be treated as an equity-settled transaction. The cumulative share based To provide shareholders with additional understanding of the trading performance of the Group, adjusted EBITA payment charge held in reserves is recycled into retained earnings when the share awards or options lapse or are has been calculated as profit before tax after adding back: exercised. The social security contributions payable in connection with the grant of the share awards will be treated as a cash-settled transaction. • impairment of goodwill, intangible assets and property, plant and equipment; u) Leases • amortisation of intangible assets excluding computer software; The Group recognises a right-of-use asset and corresponding liability at the date the leased asset is made • adjusting items (included in operating expenses); available for use by the Group. • other income – gain on disposal of subsidiaries; The liability is measured at the present value of future lease payments over the lease term including fixed payments, in-substance fixed payments, and variable lease payments that are based on an index or a rate, less • other income – gain on disposal of business operations; any lease incentives receivable. The liability includes any payments to be made under extension options which are • other income – gain on disposal of property, plant and equipment; reasonably certain to be exercised. The lease payments are discounted using the interest rate implicit in the lease, where this rate cannot be determined an incremental borrowing rate is used. The incremental borrowing rate is • other income – net gain on financing activities; and determined with reference to the rate that the lessee would pay to borrow the funds necessary to obtain an asset • net finance costs. of similar value, in a similar economic environment, with similar terms and conditions, adjusted for the country- specific risk of the lessee. The Group records an interest charge in respect of the lease liability over the lease term. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 87 ## Notes to the financial statements continued ### 2. Measures of profit continued 3. Segmental information Reconciliation to profit on continuing activities before tax continued In accordance with IFRS 8 the Group’s operating segments are based on the operating results reviewed by the Adjusted profit before tax, adjusted EBITA and adjusted EBITDA reconcile to profit on continuing activities before Board, which represents the chief operating decision maker. tax as follows: The Group’s dynamic portfolio provides customers with a range of information, data, training and education Year ended Year ended solutions. During the year the Information & Data division was renamed to Intelligence. The two divisions (Training & 30 June 30 June Education and Intelligence) are the Group’s segments and generate all of the Group’s revenue. The Board considers 2022 2021 the business from both a geographic and product perspective. Geographically, management considers the £’000 £’000 performance of the Group between the UK, Europe (excluding the UK), North America and the Rest of the World. Profit/(loss) before tax 36,120 (2,025) a) Business segments Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834 | | | Revenue | | | Profit | | Revenue | | Profit | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Amortisation of intangible assets excluding computer software 2,368 3,400 | | Year ended | | Year ended | | Year ended | | Year ended | | | | 30 June 2022 | | 30 June 2022 | | | 30 June 2021 | | 30 June 2021 | | Adjusting items (included in operating expenses) 66 2,970 £’000 £’000 £’000 £’000 Other income – gain on disposal of subsidiaries (16,329) (770) Training & Education 61,464 15,998 56,211 12,197 Other income – gain on disposal of business operations — (3,394) Intelligence 59,564 11,359 56,816 9,320 Other income – gain on disposal of property, plant and equipment (1,289) — Group total 121,028 27,357 113,027 21,517 Other income – net gain on financing activities (840) — Unallocated central overheads — (4,506) — (4,302) Adjusted profit before tax 20,693 15,015 Share based payments — (1,230) — (566) Net finance costs 928 1,634 121,028 21,621 113,027 16,649 Adjusted operating profit (‘adjusted EBITA’) 21,621 16,649 Impairment of goodwill, intangible assets and Depreciation of property, plant and equipment included in operating expenses 2,412 3,399 property, plant and equipment (597) (14,834) Amortisation of intangible assets – computer software 3,721 2,416 Amortisation of intangible assets excluding computer software (2,368) (3,400) Adjusted EBITA before depreciation (‘adjusted EBITDA’) 27,754 22,464 Adjusting items (included in operating expenses) (66) (2,970) Other income – gain on disposal of subsidiaries 16,329 770 Other income – gain on disposal of business operations — 3,394 Other income – gain on disposal of property, plant and equipment 1,289 — Other income – net gain on financing activities 840 — Net finance costs (928) (1,634) Profit/(loss) before tax 36,120 (2,025) Taxation (3,295) (2,522) Profit/(loss) for the financial year 32,825 (4,547) There are no intra-segmental revenues which are material for disclosure. Unallocated central overheads represent central costs that are not specifically allocated to segments. Total assets and liabilities for each reportable segment are not presented; as such, information is not provided to the Board. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 88 ## Notes to the financial statements continued | 3. Segmental information continued | | | 4. Profit/(loss) from continuing operations | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | b) Segmental information by geography | | | a) Profit/(loss) for the year from continuing operations is stated after charging/(crediting): | | | | | | | The UK is the Group’s country of domicile and the Group generates the majority of its revenue from external | | | | Year ended | | | Year ended | | | customers in the UK. The geographical analysis of revenue is on the basis of the country of origin in which the | | | | | 30 June | | 30 June | | | customer is invoiced: | | | | | | 2022 | | 2021 | | | | | | | | £’000 | | £’000 | | | Year ended | Year ended | | | | | | | Depreciation of property, plant and equipment – included in operating expenses 2,412 3,399 | 30 June | | 30 June | | | | --- | --- | --- | --- | --- | | | 2022 | | 2021 | Short term and low-value leases 114 486 | | | £’000 | | £’000 | | Amortisation of intangible assets – computer software 3,721 2,416 UK 64,320 61,999 Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2 Europe (excluding the UK) 25,809 23,304 Share based payments (including social security costs) 1,230 566 North America 21,727 15,042 Amortisation of intangible assets excluding computer software 2,368 3,400 Rest of the World 9,172 12,682 Adjusting items (included in operating expenses) 66 2,970 Total revenue 121,028 113,027 Adjusting item - gain on disposal of subsidiaries (16,329) (770) c) Timing of revenue recognition Adjusting item - gain on disposal of business operations — (3,394) The timing of the Group’s revenue recognition is as follows: Adjusting item - gain on sale of property, plant and equipment (1,289) — Year ended Year ended Adjusting item - net gain on financing activities (840) — 30 June 30 June Research and development expenditure credit (183) (290) 2022 2021 £’000 £’000 Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834 Revenue from products and services transferred at a point in time 39,725 41,583 Foreign exchange loss/(gain) 446 (24) Revenue from products and services transferred over time 81,303 71,444 Fees payable to the auditors for the audit of the Company and consolidated financial statements 107 95 Total revenue 121,028 113,027 Fees payable to the auditors and their associates for other services: During the year the Group recognised £30,124,000 of revenue that was held in deferred income at 30 June 2021 – The audit of the Company’s subsidiaries pursuant to legislation 193 182 (2021: £31,465,000 related to amounts held at 30 June 2020). – Audit related other services 15 15 The gain on sale of property, plant and equipment included in adjusting items relate to the gain on disposal of two buildings and their associated assets on 31 August 2021. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 89 ## Notes to the financial statements continued ### 4. Profit/(loss) from continuing operations continued 5. Operating expenses b) Adjusting items Year ended 30 June 2022 Year ended 30 June 2021 The following items have been charged to the income statement during the year but are considered to be Cost of sales Administration Tot al Cost of sales Administration Tota l adjusting so are shown separately: | | | | | | | | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Year ended | | | Year ended | | | Operating expenses before | | | | | | | | | 30 June | | | 30 June | | depreciation and amortisation 88,746 4,528 93,274 86,167 4,396 90,563 | | | | | | | | | | 2022 | | | 2021 | | | | | | | | | | | £’000 | | | £’000 | Depreciation of property, plant | | | | | | | and equipment 2,412 — 2,412 3,399 — 3,399 Costs relating to strategic activities 66 1,128 Amortisation of intangible Costs relating to the consolidation of office space — 1,842 assets – computer software 3,721 — 3,721 2,416 — 2,416 Other adjusting items (included in operating expenses) 66 2,970 Operating expenses before Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834 amortisation of intangibles Amortisation of intangible assets excluding computer software 2,368 3,400 excluding computer software, impairment and Total adjusting items (classified in profit before tax) 3,031 21,204 adjusting items 94,879 4,528 99,407 91,982 4,396 96,378 The impairment of goodwill, intangible assets and property, plant and equipment relates to: Amortisation of intangible assets – databases 187 — 187 826 — 826 | Year ended | | | Year ended | | | | | --- | --- | --- | --- | --- | --- | --- | | | 30 June | | | 30 June | | Amortisation of intangible | | | | 2022 | | | 2021 | | assets – customer relationships 1,016 — 1,016 1,052 — 1,052 £’000 £’000 Amortisation of intangible Goodwill — 9,873 assets – brands 660 — 660 1,016 — 1,016 Intangible assets — 1,516 Amortisation of intangible Property, plant and equipment 597 3,445 assets – publishing rights and Total adjusting items (classified in profit before tax) 597 14,834 titles 505 — 505 506 — 506 Impairment of goodwill, The impairment during the year relates to the impairment of assets associated with an office property, recognised intangible assets and property, as a result of an exercise performed to consolidate the Group’s office space. plant and equipment (note 4b) — 597 597 — 14,834 14,834 Other adjusting items (note 4b) — 66 66 — 2,970 2,970 Operating expenses 97,247 5,191 102,438 95,382 22,200 117,582 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 90 ## Notes to the financial statements continued | 6. Net finance costs | | | | | Factors affecting the tax charge for the year: | | --- | --- | --- | --- | --- | --- | | | Year ended | | Year ended | | The effective tax rate is lower (2021: higher) than the average rate of corporation tax in the UK of 19.0% (2021: | | | | 30 June | | 30 June | | 19.0%). The differences are explained below: | | 2022 | 2021 | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | £’000 | £’000 | | | | | | | | | | Year ended | | | Year ended | | | Net finance costs comprise: | | | | 30 June | | | 30 June | | | | | | | 2022 | | 2021 | Interest payable on bank loans and overdrafts 748 1,437 £’000 £’000 Unwinding of the discount on royalty payments receivable (113) (139) Profit/(loss) before tax 36,120 (2,025) Notional interest on lease liabilities 293 336 Profit/(loss) before tax multiplied by the average rate of corporation tax in the 928 1,634 year of 19.0% (2021: 19.0%) 6,863 (385) Tax effects of: ### 7. Taxation Impairment of goodwill, intangible assets and property, plant and equipment 113 2,818 Year ended Year ended Foreign tax rate differences 201 177 30 June 30 June 2022 2021 Adjustment in respect of previous years (870) 9 £’000 £’000 Other items not subject to tax (3,012) (230) Current tax Effect on deferred tax of change of corporation tax rate — 133 UK corporation tax at current rates on UK profits for the year 2,817 2,327 Taxation 3,295 2,522 Adjustments in respect of previous years (870) 30 Deferred tax assets and liabilities are measured at the rates that are expected to apply in the periods of the reversal. 1,947 2,357 Foreign tax 969 993 The Company’s profits for this accounting year are taxed at an effective rate of 9.1% (2021: -125.0%). Adjustments in respect of previous years — (21) Included in other comprehensive income are a tax charge of £nil (2021: £22,000) and a tax credit of £45,000 (2021: Total current tax 2,916 3,329 charge of £179,000) relating to the interest rate swaps and net investment hedges respectively. Total deferred tax 379 (807) The tax effect of adjusting items as disclosed in note 9 is a credit of £1,050,000 (2021: £558,000). Taxation 3,295 2,522 ### 8. Dividends Amounts recognised as distributions to owners of the parent in the year: | Year ended | | | Year ended | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 30 June | | | 30 June | | Year ended | | | Year ended | | | | | 2022 | | | 2021 | | 30 June | | | 30 June | | | | Pence | | | Pence | | | 2022 | | 2021 | | | per share | | | per share | | | | £’000 | | £’000 | Final dividends recognised as distributions in the year 3.9 — 3,399 — Interim dividends recognised as distributions in the year 2.4 2.1 2,093 1,829 Total dividends paid 5,492 1,829 Final dividend proposed [•]p 3.9 [•] 3,415 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 91 ## Notes to the financial statements continued ### 9. Earnings/(loss) per share Number Number Adjusted earnings per share has been calculated using adjusted earnings calculated as profit after taxation Weighted average number of ordinary shares for the purposes of basic and attributable to owners of the parent but before: adjusted earnings per share 87,632,022 87,603,917 • impairment of goodwill, intangible assets and property, plant and equipment; Effect of dilutive potential ordinary shares: • amortisation of intangible assets excluding computer software; Future exercise of share awards and options 1,126,918 410,301 • adjusting items (included in operating expenses); Weighted average number of ordinary shares for the purposes of diluted and adjusted diluted earnings per share 88,758,940 88,014,218 • other income – gain on disposal of subsidiaries; Basic earnings/(loss) per share 37.46p (5.18p) • other income – gain on disposal of business operations; Diluted earnings/(loss) per share 36.98p (5.18p) • other income – gain on disposal of property, plant and equipment; and Adjusted basic earnings per share (‘adjusted earnings per share’) 18.66p 13.62p • other income – net gain on financing activities. Adjusted diluted earnings per share 18.42p 13.56p The calculation of the basic and diluted earnings per share is based on the following data: For the year ended 30 June 2021, potentially dilutive share options were only considered in relation to adjusted earnings per share as the Group made a basic loss per share. | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | | | 30 June | | | 30 June | | | | | 2022 | | | 2021 | | | | £’000 | | | £’000 | Earnings/(loss) from continuing operations for the purpose of basic earnings per share 32,825 (4,547) Add/(remove): Impairment of goodwill, intangible assets and property, plant and equipment 597 14,834 Amortisation of intangible assets excluding computer software 2,368 3,400 Adjusting items (included in operating expenses) 66 2,970 Other income – gain on disposal of subsidiaries (16,329) (770) Other income – gain on disposal of business operations — (3,394) Other income – gain on disposal of property, plant and equipment (1,289) — Other income – net gain on financing activities (840) — Tax effect of adjustments above (1,050) (558) Adjusted earnings for the purposes of adjusted earnings per share 16,348 11,935 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 92 ## Notes to the financial statements continued ### 10. Results of Wilmington plc b) Disposal of subsidiary company - La Touche Bond Solon Training Limited Wilmington plc, the parent company, recorded a profit of £14,959,000 (2021: £37,865,000) during the year. On 22 April 2022 Wilmington plc disposed of La Touche Bond Solon Training Limited for a net cash consideration of £161,000 and recognised a gain on disposal of £105,000. The disposal was executed by way of the sale of 11. Disposals 100% of the equity shares. As at the disposal date, the net assets of La Touche Bond Solon Training Limited were In the year ended 30 June 2022 the Group disposed of the following subsidiary companies: as follows: | | Country Date of disposal Share/asset deal | | £’000 | | --- | --- | --- | --- | | Adkins & Matchett (UK) Limited UK December 2021 Share deal | | Goodwill 34 | | | Adkins, Matchett & Toy Limited USA December 2021 Share deal | | Property, plant and equipment 9 | | | Adkins, Matchett & Toy (Hong Kong) Limited Hong Kong December 2021 Share deal | | Trade and other receivables 106 | | | La Touche Bond Solon Training Limited Ireland April 2022 Share deal | | Cash and cash equivalents 78 | | Trade and other payables (138) The disposals were executed in line with the Group’s strategy to simplify its structure and to focus attention on businesses that operate in the GRC and Regulatory Compliance markets. The subsidiary businesses were Net assets disposed 89 classified as continuing operations until their respective disposal dates. In total the Group recognised a gain on Directly attributable costs of disposal 22 disposal of £16,329,000 presented within adjusting items. Recycling of deferred foreign exchange losses 23 a) Disposal of subsidiary companies - Adkins & Matchett (UK) Limited, Adkins, Matchett & Toy Gain on disposal 105 Limited and Adkins, Matchett & Toy (Hong Kong) Limited. Together referred to as ‘AMT’ Fair value of consideration 239 On 24 December 2021 Wilmington plc disposed of AMT for a net cash consideration of £22,631,000 and recognised a gain on disposal of £16,224,000. The disposal was executed by way of the sale of 100% of the equity Satisfied by: shares and as at the disposal date, the net assets of AMT were as follows: Cash and cash equivalents (net of working capital adjustment) 239 £’000 239 Goodwill 6,203 Property, plant and equipment 41 Trade and other receivables 898 Cash and cash equivalents 475 Trade and other payables (1,112) Net assets disposed 6,505 Directly attributable costs of disposal 342 Recycling of deferred foreign exchange losses 35 Gain on disposal 16,224 Fair value of consideration 23,106 Satisfied by: Cash and cash equivalents 23,106 23,106 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 93 ## Notes to the financial statements continued ### 12. Goodwill Discount rates Management has applied pre-tax discount rates as follows: £’000 Cost Year ended Year ended 30 June 2022 30 June 2021 At 1 July 2020 110,597 Territory (%) (%) Disposals (1,192) United Kingdom 15.2 11.8 Exchange translation differences (1,309) United States 15.7 12.9 At 30 June 2021 108,096 Spain 15.4 12.4 Disposals (8,935) France 15.8 12.6 Exchange translation differences 1,532 Pre-tax discounts rates are calculated on a company specific participant basis, movements in the pre-tax discount At 30 June 2022 100,693 rates for CGUs since the prior year are driven by changes in Company specific market-based inputs. Management Accumulated impairment considers the pre-tax discount rates to be calculated using appropriate methodology. The rates are in in line with its peers, and the Board views the rates as accurately reflecting the return expected by a market participant. At 1 July 2020 32,721 Disposals (331) Sensitivity to changes in assumptions The Group has performed sensitivity testing to assess the impact of changes in assumptions on the value in use of Impairment 9,873 each CGUs. The sensitivity analysis performed assessed the impact of pessimistic but reasonably possible changes At 30 June 2021 42,263 to future cash flows, long term growth rates and pre-tax discount rates. All CGUs retained significant headroom in Disposals (2,698) these sensitised calculations, leading to the conclusion that there is no realistic change of assumption that would result in carrying value to exceed its recoverable amount. At 30 June 2022 39,565 Net book amount Cash generating units The following table details the net book value of each CGU: At 30 June 2022 61,128 | At 30 June 2021 65,833 | | 30 June | | 30 June | | --- | --- | --- | --- | --- | | | | | 2022 | 2021 | | At 30 June 2020 77,876 | CGU | | £’000 | £’000 | | Goodwill arising on business combinations is not amortised but reviewed for impairment on an annual basis, or | UK Healthcare 11,885 11,877 | | | | | more frequently if there are indications that goodwill may be impaired. Determining whether the carrying value of | Axco and Pendragon 11,150 11,150 | | | | acquired goodwill is recoverable is a significant judgment given the material nature of the goodwill balance and Accountancy 8,307 8,307 the significant assumptions underpinning management’s impairment assessment of the Group’s cash generating Legal 6,796 6,830 units (‘CGUs’). The Group identifies its CGUs on a business operation and geographic level. This is consistent with the way the chief operating decision maker reviews performance. AMT — 6,203 Disposal Compliance 7,972 7,972 During the year AMT and La Touche Bond Solon Training Limited was disposed of, which resulted in the disposal Compliance Week 4,941 4,342 of the carrying value of goodwill associated with both entities. At the date of disposal the carrying value of this FRA 7,686 6,773 goodwill was £6,237,000. Business Intelligence 2,391 2,379 Annual impairment review 61,128 65,833 The recoverable amount for each CGU has been determined using value in use calculations. These calculations use the pre-tax future cash flow forecasts covering a three year period based on Board approved budgets. Pre-tax cash flows beyond the three year period are then extrapolated using an estimated long term growth rate of 2.0% (2021: 2.0%), providing a ‘base case’ scenario for the purpose of the impairment review. Key assumptions for the value in use calculations are those regarding discount rates, three year cash flow forecasts and long term growth rates. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 94 ## Notes to the financial statements continued ### 13. Intangible assets | | Computer | | | | Customer | | | | Publishing | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | software | | Databases | | relationships | | Brands | rights and titles | | | Tota l | | Group | | £’000 | | £’000 | | £’000 | £’000 | | | £’000 | £’000 | Cost At 1 July 2020 15,438 16,795 25,104 13,857 30,493 101,687 Additions 1,969 — — — — 1,969 Disposals (2,130) — — — — (2,130) Write-off of fully amortised intangible assets — (2,940) (15,549) (3,672) (20,808) (42,969) Exchange translation differences (139) (90) (399) (237) — (865) At 30 June 2021 15,138 13,765 9,156 9,948 9,685 57,692 Additions 1,292 — — — — 1,292 Assets transferred to held for sale (note 20) (245) — — — — (245) Write-off of fully amortised intangible assets (9,986) — — — — (9,986) Disposals (51) — — — — (51) Exchange translation differences 103 105 466 275 — 949 At 30 June 2022 6,251 13,870 9,622 10,223 9,685 49,651 Accumulated amortisation At 1 July 2020 10,003 15,496 20,102 8,111 28,263 81,975 Charge for the year 2,416 826 1,052 1,016 506 5,816 Impairment — — — 1,516 — 1,516 Disposals (2,010) — — — — (2,010) Write-off of fully amortised intangible assets — (2,940) (15,549) (3,672) (20,808) (42,969) Exchange translation differences (80) (70) (276) (210) — (636) At 30 June 2021 10,329 13,312 5,329 6,761 7,961 43,692 Charge for the year 3,721 187 1,016 660 505 6,089 Assets transferred to held for sale (note 20) (210) — — — — (210) Write-off of fully amortised intangible assets (9,986) — — — — (9,986) Disposals (26) — — — — (26) Exchange translation differences 48 82 334 201 — 665 At 30 June 2022 3,876 13,581 6,679 7,622 8,466 40,224 Net book amount At 30 June 2022 2,375 289 2,943 2,601 1,219 9,427 At 30 June 2021 4,809 453 3,827 3,187 1,724 14,000 At 30 June 2020 5,435 1,299 5,002 5,746 2,230 19,712 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 95 ## Notes to the financial statements continued ### 14. Property, plant and equipment Land, freehold | | and leasehold | | Fixtures and | | Computer | | Motor | Right-of-use assets | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | buildings | | fittings | equipment | | vehicles | Land and buildings | | Tota l | | Group | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’000 | Cost At 1 July 2020 5,260 3,705 4,017 377 13,854 27,213 Additions 468 253 326 — 449 1,496 Disposals — (774) (258) (60) (109) (1,201) Lease modifications — — — — (725) (725) Assets transferred to held for sale (2,243) (17) — — — (2,260) Exchange translation differences (3) (45) (35) — (191) (274) At 30 June 2021 3,482 3,122 4,050 317 13,278 24,249 Additions — 169 271 — 464 904 Disposals — (280) (127) (206) (64) (677) Assets transferred to held for sale (note 20) (67) (101) (88) — (205) (461) Assets transferred from held for sale 162 — — — — 162 Exchange translation differences — 22 47 — 50 119 At 30 June 2022 3,577 2,932 4,153 111 13,523 24,296 Accumulated depreciation At 30 June 2020 1,566 3,054 3,414 191 2,094 10,319 Charge for the year 436 254 421 63 2,225 3,399 Disposals — (774) (159) (51) (41) (1,025) Lease modifications — — — — (337) (337) Impairment 523 103 33 — 2,786 3,445 Assets transferred to held for sale (660) (12) — — — (672) Exchange translation differences (9) (84) (64) — — (157) At 30 June 2021 1,856 2,541 3,645 203 6,727 14,972 Charge for the year 353 236 342 38 1,443 2,412 Disposals — (279) (123) (156) (60) (618) Impairment 597 — — — — 597 Assets transferred to held for sale (note 20) (34) (64) (54) — (38) (190) Assets transferred from held for sale 142 — — — — 142 Exchange translation differences — 16 37 — 52 105 At 30 June 2022 2,914 2,450 3,847 85 8,124 17,420 Net book amount At 30 June 2022 663 482 306 26 5,399 6,876 At 30 June 2021 1,626 581 405 114 6,551 9,277 At 30 June 2020 3,694 651 603 186 11,760 16,894 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 96 ## Notes to the financial statements continued ### 14. Property, plant and equipment continued 15. Investments in subsidiaries Included in land, freehold and leasehold buildings is £nil (2021: £570,000) of non-depreciated land. Shares in subsidiary Depreciation of property, plant and equipment is charged to operating expenses within the income statement. undertakings Company £’000 The impairment during the year relates to the impairment of assets associated with an office property, recognised as a result of an exercise performed to consolidate the Group’s office space. Cost less provision at 1 July 2021 and 30 June 2022 49,420 As at 30 June 2022, assets classified as transferred from held for sale relate to property, plant and equipment with The following table gives brief details of the entities controlled and included in the consolidated financial a carrying value £19,000 which were classified as held for sale in the prior year but were subsequently not sold. statements of the Group at 30 June 2022. Except where indicated, all of the entities are incorporated in and principally operated in the UK. Subsidiaries marked * are directly owned by Wilmington plc; all other subsidiaries Right-of-use assets are indirectly owned. Subsidiaries marked ** are companies limited by guarantee, have no ordinary shares and are Land and buildings controlled indirectly by Wilmington plc. Subsidiaries marked + have claimed audit exemptions for the year to 30 Company £’000 June 2022 under Section 479A of the Companies Act 2006. The subsidiary marked as ++ have claimed audit Cost exemptions for the year to 30 June 2022 under Section 360 of the Companies Act 2014. Subsidiaries marked 30 June 2020, 30 June 2021 and 30 June 2022 9,889 with # were liquidated on [•] September 2022. Accumulated depreciation | | | UK company | Registered | | Percentage | | | --- | --- | --- | --- | --- | --- | --- | | At 30 June 2020 1,055 | Name of company | number | address Business | | | owned | | Charge for the year 1,215 | APM International SAS (incorporated | n/a AVE News information services to the | | | | 100 | | | and operates in France) | | | healthcare industry | | | Impairment 2,786 APM Media SARL (incorporated and n/a AVE News information services to the 100 At 30 June 2021 5,056 operates in France) healthcare industry Charge for the year 725 Axco Insurance Information Services 3073807 WCH Provision of international 100 At 30 June 2022 5,781 Limited+ compliance and regulatory Net book amount information for the global insurance industry At 30 June 2022 4,108 Bond Solon Training Limited+ 2271977 WCH Witness training and conferences 100 At 30 June 2021 4,833 CLT International Hong Kong Limited n/a PRU Certified professional training 100 At 30 June 2020 8,834 (formerly International Compliance Training Hong Kong Limited) CLT International Limited+ 6309789 WCH Certified professional training 100 ICA Commercial Services Limited+ 4363296 WCH Training courses in international 100 compliance and money laundering | ICA Risk Management Limited (formerly | 4519229 WCH Facilitation of ISO certification for | | 100 | | --- | --- | --- | --- | | ICA Audit Limited)+ | | businesses | | | Interactive Medica AB (incorporated and | n/a ALF Pan-European provider of cloud | | 100 | | operates in Sweden) | | based insight, CRM and KAM | | offerings to the pharmaceutical industry Interactive Medica Limited+ 5947851 WCH Pan-European provider of cloud 100 based insight, CRM and KAM offerings to the pharmaceutical industry Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 97 ## Notes to the financial statements continued ### 15. Investments in subsidiaries continued | | UK company | Registered | | Percentage | | | UK company | Registered | | Percentage | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Name of company | number | address Business | | | owned | Name of company | number | address Business | | | owned | | Interactive Medica SL (incorporated and | n/a CRE Pan-European provider of cloud | | | | 100 | Wilmington Inese SL (incorporated and | n/a CMA Provision of Spanish language | | | | 100 | | operates in Spain) | | | based insight, CRM and KAM | | | operates in Spain) | | | subscription based publications | | | offerings to the pharmaceutical Wilmington Insight Limited+ 2691102 WCH Holding company 100 industry Wilmington Legal Limited+ 2522603 WCH Holding company 100 | International Compliance Association | 4429302 WCH Professional association; a not for | | 100 | | | | --- | --- | --- | --- | --- | --- | | | | | | Wilmington plc Employee Share | n/a WCH Trust n/a | | Limited**+ | | profit organisation | | | | Ownership Trust+ | International Compliance Training | n/a SHE Training courses in international | | 100 | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Wilmington Publishing & Information | 3368442 WCH Provision of information and | | 100 | | Academy PTE Limited (incorporated and | | compliance and money | | | | | | | | | | | Limited | | events for professional markets | | | operates in Singapore) | | laundering | | | | | | Wilmington Shared Services Limited 8314442 WCH Provision of shared services 100 International Compliance Training n/a GAT Training courses in international 100 (Middle East) Ltd (incorporated and compliance and money The registered company addresses for each subsidiary undertaking are abbreviated as shown below. operates in the UAE) laundering Registered address Abbreviation | International Compliance Training SDN. | n/a VER Training courses in international | | 100 | | | --- | --- | --- | --- | --- | | BHD (incorporated and operates in | | compliance and money | | Att.Lena Frazen, Nytorget 7, Box 577, 611 10, Nyköping, Sweden ALF | | Malaysia) | | laundering | | | 33 Avenue de la Republique, 75011 Paris AVE Mercia Group Limited+ 1464141 WCH Training and support services to 100 13 Baggot Street Upper, Dublin 4, Ireland BAG the accountancy profession Cloughoge Business Park, Newry, Countydown, Northern Ireland CLO Mercia Ireland Limited (incorporated and n/a BAG Training and support services to 100 C/Recoletos, 3 – 1º, 28001 Madrid CRE operates in Ireland) [++] the accountancy profession C/Maudes, 51 - 2ª Planta - 28003 Madrid CMA Mercia NI Limited+ NI038498 CLO Training and support services to 100 the accountancy profession Level 3, Gate Village, Building 2, Dubai International Financial Centre, PO Box 506745, Dubai GAT | MiExact Limited (formerly Smee and | 1964639 WCH Provision of legacy information 100 | | | 1209 Orange Street, Delaware 19801 ORA | | --- | --- | --- | --- | --- | | Ford Limited)+ | | | | Suite 2111, 21/F., Prudential Tower, The Gateway, Harbour City, 21 Canton Road, Tsimshatsui, | | SWAT UK Limited+ 3041771 WCH Training and support services to | | | 100 | Kowloon, Hong Kong PRU | | | | the accountancy profession | | 6 Shenton Way, #17-08 OUE Downtown 2, Singapore 068809 SHE | | Wilmington Compliance Week Inc. | n/a ORA Provision of international | | 100 | Unit 30-01, Vertical Business Suite, Bangsar South, No.8, Jalan Kerinchi, 59200, Kuala Lumpur VER | | (incorporated and operates in the US) | | compliance and regulatory | | | 10 Whitechapel High Street, London E1 8QS WCH information in the US Wilmington FRA Inc. (incorporated and n/a ORA Conference and networking 100 operates in the US) provider of specialist events in healthcare and finance Wilmington Healthcare Limited+ 2530185 WCH Provision of reference information 100 to the healthcare industry Wilmington Holdings No.1 Limited* 8313253 WCH Holding company 100 Wilmington Holdings US Inc. n/a ORA Holding company 100 (incorporated and operates in the US) Wilmington IBT Limited (formerly The 1221570 WCH Dormant 100 Matchett Group Limited)+ Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 98 ## Notes to the financial statements continued ### 16. Trade and other receivables 19. Borrowings Group Group Company | | | | | | | | | 30 June | 30 June | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 30 June | | 30 June | | 30 June | | 30 June | | | | | | | | | | | | | | 2022 | | 2021 | | | 2022 | | 2021 | | 2022 | | 2021 | | | | | | | | | | | | | £’000 | | £’000 | | | £’000 | | £’000 | | £’000 | | £’000 | | | | Current liability Current Bank overdrafts — 3,644 Trade receivables 22,290 23,202 — — — 3,644 Prepayments and other receivables 4,807 5,496 71 570 Non-current liability Amounts due from subsidiaries — — 118,670 106,394 Bank loans — 20,960 27,097 28,698 118,741 106,964 Capitalised loan arrangement fees — (530) Amounts due from all subsidiaries are interest free, unsecured and repayable on demand. Expected credit losses Bank loans net of loan arrangement fees — 20,430 on amounts due from subsidiaries are not material. At 30 June 2022 the Group was in an overall net cash (2021: net debt) position. The Group has not used its 17. Derivative financial investments revolving credit facility since January 2022 when the debt was fully repaid. As a result of its net cash position, and considering the Group’s ongoing liquidity requirements, the Board approved the reduction of the facility from Group and Company £65m to £20m as disclosed in note 21. 30 June 30 June 2022 2021 ### 20. Disposal group held for sale £’000 £’000 As at 30 June 2022, the disposal group classified as held for sale relates to Wilmington Inese SL, a business held Non-current assets within the Intelligence division. Interest rate swaps — 57 The major classes of assets and liabilities comprising the disposal group held for sale are as follows: ### 18. Trade and other payables 30 June 2022 | | Group Company | | | | | | | | £’000 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 30 June | | 30 June | | 30 June | | 30 June | | Intangible assets – computer software 35 | | | 2022 | | | 2021 | | 2022 | | 2021 | | | Property, plant and equipment 271 £’000 £’000 £’000 £’000 Trade and other receivables 386 Trade and other payables 18,853 24,835 3,321 3,142 Cash and cash equivalents 758 Subscriptions and deferred revenue 31,405 30,124 — — Assets of disposal group held for sale 1,450 Amounts due to subsidiaries — — 49,993 34,025 Trade and other payables (1,163) 50,258 54,959 53,314 37,167 Lease liabilities (169) Wilmington plc has loans to the value of £3,098,640 (2021: £2,231,760) due to APM International SAS which incur Liabilities of disposal group held for sale (1,332) interest at 2% per annum; these loans are unsecured and repayable on demand. All other amounts due to subsidiaries are interest free, unsecured and repayable on demand. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 99 ## Notes to the financial statements continued 21. Financial instruments and risk management Amounts related to items designated as hedging instruments during the year were as follows: The Group’s financial instruments arise from its operations (for example, trade receivables and trade payables), Change in value Line item from the financing of its operations (for example, loans and borrowings and equity) and from its risk management | | | | of hedging | | | Line item in | | affected in | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | activities (for example, interest rate swaps and forward currency contracts). The risks to which the Group is | | | instrument | | profit or loss that | | | profit or loss | | exposed include liquidity and capital risk, foreign currency risk, and credit risk. | During the year ended | recognised in OCI | | | includes hedge | | because of the | | | | 30 June 2022 | | | £’000 | ineffectiveness | | reclassification | | Interest rate risk — n/a 1,186 Risk The Group has access to a £20m revolving credit facility, however it is not currently in use due to the Group’s net Change in value Line item cash position. The Group would only be exposed to cash flow volatility arising from fluctuations in market interest of hedging Line item in affected in rates if the facility was in use and in this case interest would be charged on the amount drawn down at a rate of | | | | instrument | | profit or loss that | | profit or loss | | --- | --- | --- | --- | --- | --- | --- | --- | | SONIA plus a margin of between 1.50 and 2.25% depending upon leverage. The Group incurs a commitment fee | During the year ended | recognised in OCI | | | includes hedge | because of the | | | for access to the facility at a rate of 40% of the applicable margin. | 30 June 2021 | | | £’000 | ineffectiveness | reclassification | | (93) n/a n/a Group policy for interest rate risk management The Group policy for interest rate risk management is to enter into interest rate swap contracts if beneficial to do | so. This decision is based on whether the contract would maintain the ratio of fixed to variable rate debt at a level | | | | | Carrying amount | | | | --- | --- | --- | --- | --- | --- | --- | --- | | that achieves a reasonable cost of debt whilst reducing the exposure to cash flow volatility arising from | | Nominal amount | | Asset | Liability | | Line item in the financial statements | | fluctuations in market interest rates. | At 30 June 2021 | | £’000 | £’000 | £’000 | where the hedging instrument is included | | Interest rate swaps 5,427 22 — Derivative financial instruments In line with the Group policy for interest rate risk management, the Board made the decision during the year to dispose of the interest rate swaps that were held. This is a result of the overall net cash position arising from the Interest rate swaps 20,000 35 — Derivative financial instruments disposal of AMT during the year. The gain on the revaluation of interest rate swaps is recognised in the income 25,427 57 — statement within net gain on financing activities within adjusting items, the gain was recycled to the income statement when hedge accounting was discontinued because the hedging instrument was liquidated. Liquidity and capital risk Risk The cancelled swaps were as follows: The Group’s activities give rise to working capital obligations and other operational cash outflows, as well as • a $7.5m interest rate swap commencing on 1 July 2020 and ending on 1 October 2024, whereby the Group financing cash outflows if the Group is using the revolving credit facility. The Group is consequently exposed to received interest on $7.5m based on the USD SONIA rate and paid interest on $7.5m at a fixed rate of 0.495%; and the risk that it cannot meet its obligations as they fall due or can only meet them at an uneconomic price. • a £20.0m interest rate swap commencing on 1 July 2020 and ending on 1 October 2024, whereby the Group Group policy received interest on £20m based on the SONIA rate and paid interest on £20m at a fixed rate of 0.395%. The Group policy is to preserve a strong capital base in order to maintain investor, creditor and market confidence and to safeguard the future development of the business and to balance these objectives with the efficient use of The interest rate profile of the Group’s interest-bearing financial instruments as reported to the management of capital. the Group is as follows: Risk management arrangements | | Nominal amount | | | The Group determines its liquidity requirements by the use of short and long term cash forecasts. The Group | | --- | --- | --- | --- | --- | | 30 June | | 30 June | | enters into short, medium and long term financial instruments when deemed necessary to support operational | | | 2022 | | 2021 | and other funding requirements. | | | £’000 | | £’000 | | Financial liabilities — 20,960 Effects of interest rate swaps — (25,427) — (4,467) There were no financial instruments in place at 30 June 2022. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 100 ## Notes to the financial statements continued | 21. Financial instruments and risk management continued | Company | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Liquidity and capital risk continued | | Within | | | | | More than | | | | The terms of the facility are included below: | | 1 year | 1–2 years | | 2–5 years | | | 5 years | Tot al | | | At 30 June 2022 | £’000 | | £’000 | | £’000 | | £’000 | £’000 | Revolving credit facility secured until 3 July 2024 Bank overdrafts — — — — — The Group has a £20m revolving credit facility with Barclays Bank plc, The Governor and Company of the Bank of Bank loans including interest 120 120 — — 240 Ireland and The Royal Bank of Scotland plc. The facility comprises of a revolving credit facility of £20m and an overdraft facility across the Group of £5m. Lease liabilities — 1,606 4,242 554 6,402 During the year as a result of its net cash position, and considering the Group’s ongoing liquidity requirements, the Trade payables, accruals and Board approved the reduction of the facility from £65m to £20m. Interest is charged on the amount drawn down at amounts due to subsidiary between 1.50% and 2.25% above SONIA depending upon leverage, and drawdowns are made for periods of up to undertakings 53,314 — — — 53,314 six months in duration. The Group pays a fee of 40% of the applicable Margin on the undrawn element of the credit 53,434 1,726 4,242 554 59,956 facility and the undrawn overdraft. Within More than The Group has available an undrawn revolving credit facility as follows: | | | | | | 1 year | 1–2 years | | 2–5 years | | 5 years | Tota l | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | At 30 June 2021 | £’000 | | £’000 | | £’000 | £’000 | £’000 | | 30 June | | 30 June | | | | | | | | | | | | 2022 | | 2021 | Bank overdrafts 32 32 64 — 128 | | | | | | | | | | £’000 | | £’000 | | | | | | | | | Bank loans including interest 384 384 768 — 1,536 Expiring after more than one year 20,000 44,040 Lease liabilities 1,606 1,606 4,769 1,634 9,615 The following tables provide a maturity analysis of the remaining contractually agreed cash flows for the Group’s Trade payables, accruals and non-derivative financial liabilities on an undiscounted basis, which therefore differ from the carrying value and amounts due to subsidiary fairvalue: undertakings 37,167 — — — 37,167 Group 39,189 2,022 5,601 1,634 48,446 Within More than The Company has entered into an unlimited cross guarantee with the Group’s credit facility providers. 1 year 1–2 years 2–5 years 5 years Tot al At 30 June 2022 £’000 £’000 £’000 £’000 £’000 Foreign currency risk Bank overdrafts — — — — — Risk Bank loans including interest 120 120 — — 240 The currency of the primary economic environment in which the Group operates is Sterling, and this is also the currency in which the Group presents its financial statements. However, the Group has significant US Dollar linked Lease liabilities 507 1,972 4,777 662 7,918 cash flows arising from international trading and overseas operations. The Group is consequently exposed to Trade payables and accruals 18,853 — — — 18,853 cash flow volatility arising from fluctuations in the applicable exchange rates for converting US Dollars to Sterling. 19,480 2,092 4,777 662 27,011 Group policy The Group policy is to manage foreign currency risk, and to fix the exchange rate as appropriate in relation to a Within More than periodically reassessed set percentage of expected US Dollar net cash inflows arising from international trading, 1 year 1–2 years 2–5 years 5 years Tota l by entering into foreign currency contracts as appropriate to sell a specified amount of US Dollars on a specified At 30 June 2021 £’000 £’000 £’000 £’000 £’000 future date at a specified exchange rate. This set percentage is approved by the Board as part of the budgeting Bank overdrafts 32 32 64 — 128 process and upon the acquisition of foreign operations. Bank loans including interest 384 384 22,278 — 23,046 Where borrowings are required, the Group policy is to finance investment in overseas operations from borrowings Lease liabilities 2,333 2,064 5,240 1,841 11,478 in the local currency of the relevant operation, so as to achieve a natural hedge of the foreign currency translation Trade payables and accruals 24,835 — — — 24,835 risk. This natural hedge is designated as a net investment hedge for accounting purposes. Debt of $11m (2021: $11.0m) designated as a net investment hedge relating to the Group’s interest in Compliance Week and FRA was 27,584 2,480 27,582 1,841 59,487 repaid during the year, and the net investment hedge de-recognised in line with the Group’s policy to hedge the net investment only to the extent of the debt principal. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 101 ## Notes to the financial statements continued ### 21. Financial instruments and risk management continued Market risk A foreign currency exposure can arise from the Group’s net investment in two of its US subsidiaries (Wilmington Foreign currency risk continued Compliance Week Inc. and Wilmington FRA Inc.) that have a US Dollar functional currency. The risk arises from Risk management arrangements the fluctuation in spot exchange rates between Sterling and the US Dollar, which causes the value of the net The following forward contracts were entered into in order to provide certainty in Sterling terms of 80% of the investment to vary. The hedged risk in the net investment hedge is the risk of a weakening of the US Dollar against Group’s expected net US Dollar income: Sterling that will result in a reduction in the carrying amount of the Group’s net investment in the US subsidiaries. Foreign To assess hedge effectiveness, the Group determines the economic relationship between the hedging instrument Currency Amount (£m) Maturity date exchange rate and the hedged item by comparing changes in the carrying amount of the debt that is attributable to a change in US Dollar 1.0 29 October 2021 1.3792 the spot rate with changes in the investment in the foreign operation due to movements in the spot rate (the offset method). The Group’s policy is to hedge the net investment only to the extent of the debt principal. In line with the US Dollar 1.0 30 November 2021 1.3793 Group’s market risk policy, a decision was made during the year to dispose of the net investment UD dollar hedge US Dollar 1.0 31 December 2021 1.3795 of $11m. This is a result of the overall net cash position arising from the disposal of AMT during the year. US Dollar 1.0 31 January 2022 1.3801 The amounts related to items designated as hedging instruments during the year were as follows: US Dollar 1.0 28 February 2022 1.3802 Change in value Line item US Dollar 2.0 31 March 2022 1.3803 | | | | of hedging | | | Line item in | | affected in | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | US Dollar 1.5 29 April 2022 1.3805 | | | instrument | | profit or loss that | | | profit or loss | | | | recognised in OCI | | | includes hedge | | because of the | | | The above derivatives are re-measured at fair value at each reporting date. This gives rise to a gain or loss, the | During the year ended 30 June 2022 | | | £’000 | ineffectiveness | | reclassification | | | entire amount of which is recognised in the income statement. | 193 n/a n/a | | | | | | | | The Group has performed a sensitivity analysis that measures the estimated credit/(charge) to the income Change in value Line item statement and other comprehensive income arising from a 10% difference in the US Dollar to Sterling and Euro to of hedging Line item in affected in Sterling exchange rates applicable at 30 June 2022, with all other variables remaining constant. The sensitivity | | | | instrument | | profit or loss that | profit or loss | | --- | --- | --- | --- | --- | --- | --- | | analysis makes the assumption that changes in foreign currency rates only affect income, expense, assets and | | recognised in OCI | | | includes hedge | because of the | | liabilities that are denominated in the relevant currencies. | During the year ended 30 June 2021 | | | £’000 | ineffectiveness | reclassification | (762) n/a n/a Income statement OCI +10% * -10% * +10% * -10% * There were no US Dollar loans at 30 June 2022. £’000 £’000 £’000 £’000 Carrying amount Cash and cash equivalents (63) 77 — — Line item in the financial Trade receivables (including the effect of statements where forward currency contracts) (27) 33 — — the hedging Currency translation differences — — 362 (442) Nominal amount Liability instrument At 30 June 2021 £’000 £’000 is included Net investment hedges — — 212 (173) US Dollar loans 7,960 7,960 Borrowings Profit before tax arising overseas (455) 556 — — 7,960 7,960 * +10% represents Sterling value appreciating compared with other currencies. -10% represents Sterling value depreciating compared with othercurrencies. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 102 ## Notes to the financial statements continued 21. Financial instruments and risk management continued The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets Market risk continued carried at amortised cost and debt instruments at fair value through other comprehensive income. Expected credit losses are updated at each reporting date to reflect changes in credit risk. Balances remaining in the The expected credit loss on trade receivables is estimated using a provision matrix by reference to past default foreign currency experience and credit rating, taking into account forward looking factors including general economic conditions translation and an assessment of the current and forecast conditions at the reporting date. reserve from hedging The following table details the risk profile of trade receivables based on the Group’s provision matrix. relationships | | Foreign currency | | | for which hedge | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Not due | 0–30 days | | 30–60 days | | 61–90 days | | 91–120 days | | 120+ days | | Tot al | | | | translation | | accounting is no | | | | | | | | | | | | | | | | | | | | | | At 30 June 2022 | £’000 | | £’000 | | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | | | | reserve | longer applied | | | | | | | | | | | | | | | | During the year ended 30 June 2022 | | | £’000 | | £’000 | | | | | | | | | | | | | | Gross carrying amount 14,733 3,280 1,940 1,197 936 1,079 23,165 (1,552) — Expected credit loss rate 0.29% 0.03% 0.12 % 0.10% 4.27% 72.98% 3.78% Balances Expected credit loss 43 1 2 1 40 788 875 remaining in the Net carrying amount 14,690 3,279 1,938 1,196 896 291 22,290 foreign currency translation Set out below is the movement for the year in the expected credit loss relating to trade receivables. reserve from hedging | | | | relationships | 30 June | | 30 June | | | --- | --- | --- | --- | --- | --- | --- | --- | | Foreign currency | | for which hedge | | | 2022 | | 2021 | | | translation | accounting is no | | | £’000 | | £’000 | | | reserve | | longer applied | | | | | Allowances at 1 July 811 1,132 During the year ended 30 June 2021 £’000 £’000 Additions charged to income statement [•] 176 (1,359) (742) Allowances used [•] (429) Credit risk Allowances reversed [•] (68) Risk Allowances at 30 June 875 811 The Group’s principal financial assets are receivables and bank balances. The Group is consequently exposed to the risk that its customers or the banks cannot meet their obligations as they fall due. Fair value of financial assets and financial liabilities The table below sets out the accounting classification and the carrying and fair values of all of the Group’s financial Group policy assets and financial liabilities. The carrying value and fair value are equal in all cases. None of the financial The Group policy is to assess the creditworthiness and financial strength of customers at inception and on an instruments have been reclassified during the year. All items classified as fair value through profit and loss are held ongoing basis. The Group also reviews the credit rating of its banks. Cash is held in banks with a credit rating for trading. between AA and BBB+ per Fitch at 19 September 2022, with the exception of £0.1m which is held in Allied Irish and Ulster Bank both with a rating of BBB+. Risk management arrangements The Group’s credit risk is primarily attributable to its trade receivables. However, the Group has no significant exposure to credit risk because its trading is spread over a large number of customers. The payment terms offered to customers take into account the assessment of their creditworthiness and financial strength, and they are set in accordance with industry standards. The creditworthiness of customers is considered before trading commences. Most of the Group’s customers are large and well-established institutions that pay on time and in accordance with the Group’s standard terms of business. The amounts presented in the balance sheet are net of the expected credit loss allowance. The Group applies a simplified approach to measure the expected credit loss allowance for trade receivables classified at amortised cost, using the lifetime expected loss provision. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 103 ## Notes to the financial statements continued | 21. Financial instruments and risk management continued | Company | | | | --- | --- | --- | --- | | Credit risk continued | | Amortised | | | Fair value of financial assets and financial liabilities continued | | | cost | | | At 30 June 2022 | | £’000 | Group Financial assets Amortised cost Cash and cash equivalents 15,734 At 30 June 2022 £’000 Trade and other receivables 118,670 Financial assets 134,404 Cash and cash equivalents 19,785 Financial liabilities Trade and other receivables 22,729 Trade and other payables (49,993) Financial assets included within disposal group held for sale 1,106 Lease liabilities (6,225) 43,620 (56,218) Financial liabilities Trade and other payables 18,853 Fair value – hedging Amortised Lease liabilities 7,510 | | | instrument | | cost | Tota l | | --- | --- | --- | --- | --- | --- | | Financial liabilities included within disposal group held for sale 518 | At 30 June 2021 | | £’000 | £’000 | £’000 | | 26,881 | Financial assets | | | | | Cash and cash equivalents — 2,702 2,702 Fair value – Interest rate swaps 57 — 57 hedging Amortised instrument cost Tota l Trade and other receivables — 106,394 106,394 At 30 June 2021 £’000 £’000 £’000 57 109,096 109,153 Financial assets Financial liabilities Cash and cash equivalents — 7,374 7,374 Trade and other payables — (34,548) (34,548) Interest rate swaps 57 — 57 Lease liabilities — (8,963) (8,963) Trade and other receivables — 24,077 24,077 — (43,511) (43,511) 57 31,451 31,508 Financial liabilities Fair value measurement The methods and assumptions used to estimate the fair values of financial assets and liabilities are as follows: Trade and other payables — (24,835) (24,835) • the carrying amount of trade receivables and payables approximates to fair value due to the short maturity of Lease liabilities — (10,742) (10,742) the amounts receivable and payable; Bank overdrafts — (3,644) (3,644) • the fair value of the Group’s borrowings are estimated on the basis of the discounted value of future cash flows Bank loans — (20,960) (20,960) using approximate discount rates in effect at the balance sheet date; and — (60,181) (60,181) • the fair value of the Group’s outstanding interest rate swaps, foreign exchange contracts and put options for non-controlling interest are estimated using discounted cash flow models and market rates of interest and foreign exchange at the balance sheet date. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 104 ## Notes to the financial statements continued | 22. Deferred tax | | Share based | | Fair value interest | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Movements on deferred tax assets are as follows: | | payments | | | rate swap | | Tota l | | | Company | | £’000 | | | £’000 | £’000 | Fair value Asset at 30 June 2020 106 11 117 | | Share based | | interest | US deferred | | Ta x | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | payments | | rate swap | consideration | | losses | Other | Tota l | Deferred tax charge in the income statement for the year (14) — (14) | | Group | | £’000 | £’000 | | £’000 | £’000 | £’000 | £’000 | | Deferred tax charge in other comprehensive income for the year — (22) (22) Asset at 1 July 2020 106 11 243 795 34 1,189 Deferred tax credit included directly in equity for the year 358 — 358 Tax relating to initial application Asset at 30 June 2021 450 (11) 439 of IFRS 16 — — — — (34) (34) Deferred tax charge in the income statement for the year (16) 11 (5) Deferred tax (charge)/credit inthe income statement for Deferred tax credit included directly in equity for the year 70 — 70 theyear (14) — (22) 432 — 396 Asset at 30 June 2022 504 — 504 Deferred tax charge in other Movements on deferred tax liabilities are as follows: comprehensive income for theyear — (22) — — — (22) Group £’000 Deferred tax credit included directly in equity for the year 358 — — — — 358 Non-current liabilities Utilisation of deferred tax asset — — — (498) — (498) Liability at 30 June 2020 2,524 Exchange translation difference — — (25) — — (25) Deferred tax credit in the income statement for the year (530) Asset at 30 June 2021 450 (11) 196 729 — 1,364 Effect on deferred tax of a change in the corporation tax rate 132 Deferred tax (charge)/credit Exchange translation difference (72) inthe income statement for Liability at 30 June 2021 2,054 theyear (16) 11 (23) 191 — 163 Deferred tax credit in the income statement for the year (51) Deferred tax credit included Effect on deferred tax of a change in the corporation tax rate 2 directly in equity for the year 70 — — — — 70 Exchange translation difference 35 Utilisation of deferred tax asset — — — (631) — (631) Liability at 30 June 2022 2,040 Exchange translation difference — — 75 — — 75 Asset at 30 June 2022 504 — 248 289 — 1,041 The deferred tax liability arises as a result of accelerated tax on amortisation of intangible assets excluding computer software and on the depreciation of property, plant and equipment. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 105 ## Notes to the financial statements continued 23. Share capital In May 2022 Wilmington issued 224,838 ordinary voting shares of £0.05 to satisfy the Company’s obligations under the SAYE Plan. Number of Treasury ordinary Share premium shares and During the year the Wilmington Group plc Employee Share Ownership Trust (‘ESOT’) purchased 170,097 ordinary shares of Ordinary shares account ESOT reserves Tota l shares for the purpose of future settlement of employee share schemes. On 30 September 2021, 37,435 shares Group 5p each £’000 £’000 £’000 £’000 vested under its Performance Share Plan settled via the ESOT. In April 2022 3,552 shares were used to satisfy the Issued and fully paid Company’s obligations under the SAYE Plan. At 30 June 2022, the ESOT held 403,782 shares (2021: 274,672) in ordinary shares the Company, which represents 0.5% (2021: 0.4%) of the called up share capital. At 30 June 2020 87,603,917 4,380 45,225 (590) 49,015 At 30 June 2022, 65,970 shares (2021: 34,533) were held in treasury, which represents 0.1% (2021: 0.1%) of the Performance share plan share capital of the Company. awards vesting settled viaESOT — — — 137 137 ### 24. Share based payments ESOT share purchases — — — (263) (263) The Group’s share based payment arrangements are as follows: Sale of treasury shares — — — 15 15 a) Performance Share Plan (‘PSP’) Awards, applying to Executives. At 30 June 2021 87,603,917 4,380 45,225 (701) 48,904 b) Performance Share Plan (‘PSP’) Awards, applying to the Senior Leadership Team. Performance share plan c) Share Option Plan (‘Options’), applying to the Senior Leadership Team. awards vesting settled viaESOT — — — 84 84 d) An employee Save As You Earn (‘SAYE’) scheme, for UK based employees. ESOT share purchases — — — (371) (371) An expense of £1,230,000 (2021: £566,000) was recognised in the income statement of the Group for share Issue of shares 224,838 11 328 — 339 based payments. Of this expense £1,230,000 (2021: £566,000) was recognised in the parent company income statement. Purchase of treasury shares — — — (154) (154) Sale of treasury shares — — — 49 49 During the year ended 30 June 2022, the following events have occurred in respect of each scheme. At 30 June 2022 87,828,755 4,391 45,553 (1,093) 48,851 a) PSP awards, applying to Executives Details of Directors’ share awards are set out in the Directors’ remuneration report. Number of Under the Wilmington plc 2017 Performance Share Plan: | | ordinary | | | Share premium | | Treasury | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | shares of | Ordinary shares | | | account | | shares | Tota l | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of | | | | | | | | Number of | | Company | 5p each | | £’000 | | £’000 | | £’000 | £’000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | shares for | | | | | | | | shares for | | Issued and fully paid | | | | | | | | | | Exercise | | which awards | | | Awards | | Awards | | Awards | which awards | | | ordinary shares | | | | | | | | | | price per | Date of | outstanding at | | | granted | | vested | | lapsed | outstanding at | | | | | | | | | | | | Date of grant | award | vesting | | 1 July 2020 | during year | | during year | | during year | | 30 June 2022 | | At 30 June 2020 87,603,917 4,380 45,225 (93) 49,512 September Shares issued September 2018 Nil 2021 79,486 — (37,435) (42,051) — Sale of treasury shares — — — 15 15 September | At 30 June 2021 87,603,917 4,380 45,225 (78) 49,527 | September 2019 Nil | 2022 285,673 — — [(170,923)] 114,750 | | --- | --- | --- | | Issue of shares 224,838 11 328 — 339 | | September | | | September 2020 Nil | 2023 546,939 — — (91,837) 455,102 | Purchase of treasury shares — — — (154) (154) September Sale of treasury shares — — — 49 49 February 2021 Nil 2023 52,971 — — — 52,971 At 30 June 2022 87,828,755 4,391 45,553 (183) 49,761 September September 2021 Nil 2024 — 383,177 — — 383,177 September February 2022 Nil 2024 — 27,307 — — 27,307 Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 106 ## Notes to the financial statements continued ### 24. Share based payments continued b) PSP awards, applying to the Senior Leadership Team a) PSP awards, applying to Executives continued Under the Wilmington plc 2017 Performance Share Plan: 37,435 awards vested on 28 September 2021 at a share price of £2.26. 383,177 awards were granted to Number of Number of Executives in September 2021 with a fair value of £1.90 per award. 27,307 awards were granted to the Chief | | | | | shares for | | | | | shares for | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | People Officer on 22 February 2022 with a fair value of £2.08 per award. | Exercise | | which awards | | Awards | Awards | Awards | which awards | | | | price per | Date of | outstanding at | | granted | vested | lapsed | outstanding at | | The performance conditions of the awards granted between 2018 and 2019 are based on the Date of grant award vesting 1 July 2020 during year during year during year 30 June 2022 proportions shown below: September 2018 Nil September 2021 178,917 — — (178,917) — • 33.3% total shareholder return (‘TSR’); September 2019 Nil September 2022 145,776 — — (1,599) 144,177 • 33.3% earnings per share (‘EPS’); and September 2020 Nil September 2023 223,295 — — (7,584) 215,711 • 33.3% return on equity (‘ROE’). September 2021 Nil September 2024 — 151,870 — — 151,870 The performance conditions of the awards granted in September 2020 and February 2021 are based February 2022 Nil September 2024 — 7,270 — — 7,270 on the proportions below: • 40.0% total shareholder return (‘TSR’); The fair value of the awards granted on 28 September 2021 was £2.06 and the fair value of the awards granted on 22 February 2022 was £2.24 per award. • 40.0% earnings per share (‘EPS’); and The performance conditions of the awards granted in September 2021 and February 2022 are based on the • 20.0% organic growth (‘ORG’). proportions shown below. The performance conditions of the awards granted in September 2021 and February 2022 are based • 65.0% earnings per share (‘EPS’); and on the proportions below: • 65.0% earnings per share (‘EPS’); and • 35.0% organic growth (‘ORG’). • 35.0% organic growth (‘ORG’). The awards granted in September 2021 were valued using the Black Scholes method with the following assumptions: The awards granted to Executives in September 2021 were valued using the Black Scholes and Stochastic methods with the following assumptions: • expected life (years): 3.0; and • expected volatility (%): 46.86 • expected dividends (%): 2.69. • expected life (years): 3.0; and The awards granted in February 2022 were valued using the Black Scholes method with the following • expected dividends (%): Nil. assumptions: The awards granted to the Chief People Officer in February 2022 were valued using the Black • expected life (years): 3.0; and Scholes and Stochastic methods with the following assumptions: • expected dividends (%): 2.60. • expected volatility (%): 45.58 c) Options • expected life (years): 3.0; and On 30 September 2021 and 22 February 2022, the Company awarded share options to selected key • expected dividends (%): Nil. management. This is a discretionary scheme which enables a company to grant share options to selected employees. The exercise price of the granted options is equal to the market price of the shares on the date of the Expected volatility was determined by reference to the historical volatility of the Group’s share price. The grant. Options are conditional on the employee completing three years’ service (the vesting period) so act as a expected life used in the model is the mid-point of the exercise period. lock-in incentive; the options have a contractual option term of ten years. The options are exercisable starting three years from the grant date, subject to the Group achieving growth in earnings per share in line with the targets set out in the deed of grant. The Group has no legal or constructive obligation to repurchase or settle the options in cash. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 107 ## Notes to the financial statements continued 24. Share based payments continued The options granted in February 2022 were valued using the Black Scholes method with the following c) Options continued assumptions: Movements in the number of share options outstanding and their related weighted average exercise price are • expected volatility (%): 32.34; asfollows: • expected life (years): 6.50; Number Number of of shares • expected dividends (%): 2.69; and Average shares for for which • expected volatility was determined by reference to the historical volatility of the Group’s share price. The | | exercise price | | | which options | | | Options | | Options | Options | | options | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | per option | | outstanding at | | | granted | exercised | | lapsed | outstanding | | expected life used in the model is the mid-point of the exercise period. | | Date of grant | | | £ Date of vesting | | 1 July 2020 | during year | | during year | | during year | at June 2022 | | | d) Save As You Earn Options September 2015 2.625 September 2018 160,726 — — — 160,726 On 29 March 2019, Save As You Earn Options with a per share exercise price of £1.52 over 688,612 ordinary September 2016 2.455 September 2019 — — — — — shares in Wilmington plc (the ‘Company’) were granted under the Wilmington SAYE Plan 2018 to employees of the Company and its subsidiaries. In May 2022 the SAYE Options vested, and can be exercised within six months September 2017 2.150 September 2020 — — — — — following vesting, 279,815 shares vested during the year. At 30 June 2022 there were 47,127 (2021: 326,942) September 2018 1.848 September 2021 281,313 — — (281,313) — shares for which options were outstanding. September 2019 2.080 September 2022 220,007 — — (3,859) 216,148 On 19 October 2020, Save As You Earn Options with a per share exercise price of £0.96 over 984,973 ordinary September 2020 1.225 September 2023 328,772 — — (18,201) 310,571 shares in the Company were granted under the Wilmington SAYE Plan 2018 to employees of the Company and its September 2021 2.228 September 2024 — 216,323 — — 216,323 subsidiaries. At 30 June 2022 there were 784,949 (2021: 930,261) shares for which options were outstanding. February 2022 2.420 September 2024 — 10,905 — — 10,905 The exercise prices of £1.52 and £0.96 relating to the 2019 SAYE Options and the 2020 SAYE Options respectively were calculated in accordance with the rules as set out in the SAYE Scheme. The SAYE Options will The fair value of the options granted on 28 September 2021 was £0.52 and the fair value of the options granted on normally vest and become exercisable over a three year vesting period from the date of grant and can be 22 February 2022 was £0.61 per option. exercised within six months following vesting. The options granted in September 2021 were valued using the Black Scholes method with the following ### assumptions: 25. Lease liabilities The Group enters into leases of buildings in relation to offices & business premises in the geographical locations in • expected volatility (%): 32.74; which they operate. • expected life (years): 6.50; The following table shows the discounted lease liabilities included in the Group and Company balance sheets: • expected dividends (%): 2.60; and Group Company • expected volatility was determined by reference to the historical volatility of the Group’s share price. The 30 June 30 June 30 June 30 June expected life used in the model is the mid-point of the exercise period. 2022 2021 2022 2021 £’000 £’000 £’000 £’000 Current 648 2,356 118 1,606 Non-current 6,862 8,386 6,107 7,357 7,510 10,742 6,225 8,963 A reconciliation of the movement in the right-of-use assets is included in note 14. The maturity analysis of lease liabilities on a contractual undiscounted cash flow basis is included in note 21. The interest expense in relation to lease liabilities is included in note 6. Amounts recognised through the consolidated income statement in respect of short-term leases and low-value leases are included in note 4. The total cash outflow for leases was £4,166,000 (2021: £3,352,000) with the year-on-year increase relating to a difference in the timing of payments. Contracts entered into by the Group have a wide range of terms and conditions but generally do not impose any additional covenants. Extension and terminations options provide the Group with additional operational flexibility. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 108 ## Notes to the financial statements continued ### 25. Lease liabilities continued 29. Staff and their pay and benefits These options are included in the lease term if the Group considers it reasonably certain that the lease will be a) Employee costs (including Directors) were as follows:: extended or terminated. | | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | | Included in liabilities of disposal group classified as held for sale is £169,000 relating to lease liabilities for | | 30 June | | | 30 June | | | Wilmington Inese SL. | | | 2022 | | | 2021 | | | | | £’000 | | | £’000 | The Group is committed to one lease agreement not yet commenced as at 30 June 2022. The future cash outflow Wages and salaries* 47,374 47,884 to which the Group is potentially exposed for this agreement is approximately £550,000. Social security costs 5,164 4,814 | 26. Provisions | Other pension costs 1,384 1,409 | | --- | --- | | Property and other £’000 | Share based payments (including social security costs) 1,230 566 | | At 1 July 2020 — | 55,152 54,673 | Additional provision in the year 1,842 * Excluded from wages and salaries are redundancy costs in the year of £1,072,371 (2021: £1,969,131). At 30 June 2021 1,842 b) Remuneration of key management personnel that held office for part or all of the year (2022: 9 people; 2021: 14 Utilised in the year (307) people), which includes the Directors and other key management personnel, is shown in the table below: At 30 June 2022 1,535 | | | | | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 30 June | | | 30 June | | | 30 June | | 30 June | | | | 2022 | | | 2021 | | | 2022 | | 2021 | | | £’000 | | | £’000 | | | £’000 | | £’000 | | | | | | | Short term employee benefits 2,226 3,385 Included in current liabilities 307 461 Compensation for loss of office — 164 Included in non-current liabilities 1,228 1,381 Post-employment benefits 72 89 1,535 1,842 Share based payments 302 394 The provision is based on assumptions and estimates where the ultimate outcome may be different from the amount 2,600 4,032 provided. The provision reflects the Group’s best estimate of the probable exposure as at 30 June 2022. This assessment has been made having considered the sensitivity of the provision for possible changes in key assumptions. More detailed information concerning Directors’ remuneration, shareholdings, pension entitlement, share options and other Long Term Incentive Plans (‘LTIPs’) is shown in the audited part of the Directors’ remuneration report on ### 27. Commitments pages [64] to [72], which forms part of the consolidated financial statements. The Group had no (2021: none) capital commitments contracted but not provided for in relation to property, plant c) The average monthly number of employees (including Directors) employed by the Group was as follows: and equipment at 30 June 2022. | | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | | 28. Related party transactions | | 30 June | | | 30 June | | | The Company and its wholly owned subsidiary undertakings offer certain Group-wide purchasing facilities to the | | | 2022 | | | 2021 | | | | Number | | | Number | | Company’s other subsidiary undertakings whereby the actual costs are recharged. Cost of sales 520 549 The Company has made recharges totalling £503,896 (2021: £2,386,709) to its fellow Group undertakings in Administration 381 403 respect of management services. 901 952 Amounts due from and to subsidiary undertakings by the Company are set out in notes 16 and 18 respectively. Total full time equivalents at 30 June 2022 were 779 (2021: 835). During the year, the Company received dividends of £15,416,584 from subsidiaries (2021: £42,998,819). d) Retirement benefits There were no (2021: £nil) transactions with related parties of key management personnel in the year. The Group contributes to defined contribution pension schemes. Total contributions to the schemes during the year were £1,384,000 (2021: £1,409,000). Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 109 ## Notes to the financial statements continued | 30. Cash generated from operations | | | | | | | | | | | | | | Cash conversion is calculated as a percentage of cash generated by operations to adjusted EBITA as follows: | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Group Company | | | | | | | | | | | Year ended | | | Year ended | | | | | Year ended | | | | Year ended | | | Year ended | | | Year ended | | | | | 30 June | | | 30 June | | | | | 30 June | | | | 30 June | | | 30 June | | | 30 June | | | | | 2022 | | | 2021 | | | | | 2022 | | | | 2021 | | | 2022 | | | 2021 | | | | £’000 | | | £’000 | | | | | £’000 | | | | £’000 | | | £’000 | | | £’000 | | | | | | | | Funds from operations before adjusting items: Profit/(loss) from continuing operations Adjusted EBITA (note 2) 21,621 16,649 before tax 36,120 (2,025) 14,964 37,879 Share based payments (including social security costs) 1,230 566 Adjusting item- gain on disposal of Amortisation of intangible assets – computer software 3,721 2,416 subsidiaries (16,329) (770) — — Depreciation of property, plant and equipment included in operating expenses 2,412 3,399 Adjusting item- gain on disposal of business operations — (3,394) — — Non-adjusting (profit)/loss on disposal of property, plant and equipment (71) 2 Adjusting item - gain on sale of property, Operating cash flows before movement in working capital 28,913 23,032 plant and equipment (1,289) — — — Net working capital movement (4,343) (5,742) Adjusting item- net gain on financing Funds from operations before adjusting items 24,570 17,290 activities (840) — (840) — Cash conversion 114% 104% Adjusting items 66 2,970 (6,061) 151 | Depreciation of property, plant and | | Year ended | | | Year ended | | | | --- | --- | --- | --- | --- | --- | --- | --- | | equipment included in operating expenses 2,412 3,399 — — | | | 30 June | | | 30 June | | | | | | | 2022 | | | 2021 | | Amortisation of intangible assets 6,089 5,816 — — | | | | £’000 | | | £’000 | | Impairment of goodwill, intangible assets | Free cash flow: | | | | | | | and property, plant and equipment 597 14,834 — 2,786 Operating cash flows before movement in working capital 28,913 23,032 Non-adjusting (profit)/loss on disposal of Proceeds on disposal of property, plant and equipment 3,493 103 property, plant and equipment (71) 2 — — Net working capital movement (4,343) (5,742) Share based payments (including social Interest paid (479) (1,196) security costs) 1,230 566 1,230 566 Payment of lease liabilities (3,752) (2,530) Net finance costs 928 1,634 663 855 Tax paid (3,397) (2,697) Operating cash flows before movements in working capital 28,913 23,032 9,956 42,237 Purchase of property, plant and equipment (440) (1,047) Decrease/(increase) in trade and other Purchase of intangible assets (1,292) (1,969) receivables 1,621 (3,619) (9,396) (24,923) Free cash flow 18,703 7,954 (Decrease)/increase in trade and other ### payables (5,657) (2,123) (7,275) 3,070 31. Events after the reporting period Decrease in provisions (307) — — — There were no events after the Balance Sheet date that require disclosure. Cash generated from/(used in) operations before adjusting items 24,570 17,290 (6,715) 20,384 Wilmington plc Annual Report and Financial Statements 2022 Strategic Report Our Governance Financial Statements 11 # Pro forma five year financial summary (unaudited) # Pro forma five year financial summary (unaudited) | | 2018 £m | 2019 £m | 2020 £m | 2021 £m | 2022 £m | | --- | --- | --- | --- | --- | --- | | Revenue | 121.3 | 122.5 | 113.1 | 113.0 | **121.0** | | Operating expenses (before adjusting items) | (97.5) | (101.0) | (99.1) | (96.4) | **(99.4)** | | Adjusted EBITA | 23.8 | 21.5 | 14.0 | 16.6 | **21.6** | | Other adjusting items | (4.6) | (1.4) | (0.6) | (3.0) | **0.1** | | Gain on disposal of property, plant and equipment | — | — | — | — | **1.3** | | Gain on disposal of business operations | — | — | — | 3.4 | **—** | | Gain on disposal of subsidiaries | — | 1.9 | — | 0.8 | **16.3** | | Net gain on financing activities | — | — | — | — | **0.8** | | Amortisation of intangible assets excluding computer software | (6.4) | (5.1) | (4.8) | (3.4) | **(2.5)** | | Impairment of goodwill, intangible assets and property, plant and equipment | (8.6) | — | — | (14.8) | **(0.6)** | | Operating profit/(loss) | 4.2 | 16.9 | 8.6 | (0.4) | **37.0** | | Net finance costs | (1.9) | (2.1) | (2.2) | (1.6) | **(0.9)** | | Share of loss of equity accounted investment | — | (0.1) | — | — | **—** | | Profit/(loss) on ordinary activities before tax | 2.3 | 14.7 | 6.4 | (2.0) | **36.1** | | Taxation | (2.6) | (3.5) | (1.8) | (2.5) | **(3.3)** | | Profit/(loss) on ordinary activities after tax | (0.3) | 11.2 | 4.6 | (4.5) | **32.8** | | Adjusted profit before tax | 21.8 | 19.3 | 11.9 | 15.0 | **20.7** | | Cash generated from operations before adjusting items | 25.7 | 26.4 | 26.5 | 17.3 | **24.6** | | Basic earnings per ordinary share from continuing operations (pence) | (0.45) | 12.74 | 5.33 | (5.18) | **37.46** | | Diluted earnings per ordinary share from continuing operations (pence) | (0.45) | 12.64 | 5.26 | (5.18) | **36.98** | | Adjusted earnings per ordinary share from continuing operations (pence) | 19.80 | 17.44 | 10.71 | 13.62 | **18.66** | | Interim and proposed final dividend per share (pence) | 8.8 | 9.1 | — | 6.0 | **(4)** | | Dividend cover (times)^{1} | 2.3 | 1.9 | — | 2.3 | **(2)** | | Return on sales (%)^{2} | 19.6 | 17.5 | 12.4 | 14.7 | **17.9** | The results for the financial years to 2018 and 2019 have not been adjusted for IFRS 16. 1 Dividend cover – adjusted earnings per ordinary share from continuing operations divided by the interim and proposed final dividend per share. 2 Return on sales – adjusted EBITA divided by revenue. Wilmington plc Annual Report and Financial Statements 2022 ## Strategic Report Financial StatementsOur Governance 111 ## Advisors and corporate calendar | Financial advisors | Principal bankers | Corporate calendar | | --- | --- | --- | | Evercore Partners | Barclays Bank plc | Announcement of final results | | 15 Stanhope Gate | 1 Churchill Place | 20 September 2022 | | London | Canary Wharf | | Annual General Meeting W1K 1LN London 23 November 2022 E14 5HP | Stockbrokers | | Announcement of interim results | | --- | --- | --- | | Numis Securities Limited | Registrars | February 2023 | | 10 Paternoster Square | Equiniti Limited | | | London | Aspect House | Registered and business address | | EC4M 7LT | Spencer Road | Wilmington plc | | | Lancing | 10 Whitechapel High Street | | Independent auditors | BN99 6DA | London | | Grant Thornton UK LLP | | E1 8QS | | 30 Finsbury Square | Shareholder helpline | Tel: +44 (0)20 7490 0049 | | London | +44 (0) 371 384 2855 (UK) | www.wilmingtonplc.com | | EC2A 1AG | +44 121 415 7047 (overseas) | | ### Solicitors Osborne Clarke One London Wall London EC2Y 5EB Wilmington plc Annual Report and Financial Statements 2022 ### Wilmington plc [10 Whitechapel High Street London E1 8QS] [Tel: +44 (0)20 7490 0049 www.wilmingtonplc.com]