ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
COMPANY INFORMATION
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HAWKSMOOR GROUP LIMITED
CONTENTS
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HAWKSMOOR GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The principal activity of the group during the period was investment management, both for direct and indirect clients, and fund management. With our head office in Exeter and branches in London, Taunton, Dorchester and Bury St Edmunds, we have a good geographical spread which we intend to develop as the firm grows. We remain committed to our clients at all times and they are at the centre of everything that we do.
2020 has been an extraordinary year in so many ways, not just for Hawksmoor but for the whole world as we have battled with the pandemic known as Covid-19. It is remarkable that since mid March, global markets have held up so well, despite an extremely volatile period towards the end of Q1. Overall, portfolios on the investment management side of the business have had reasonable performance, and although there was some initial concern regarding the cutting of dividends which could potentially affect clients income, the overall impact was not as bad as first feared. We did increase our cash weightings up to 10% of portfolios during this period but with base rates remaining at an all time low, leaving material amounts of cash on deposit is not an option and we were able to reinvest and help our clients benefit from the recovery after the heavy falls. Performance on the funds side has been more challenging in the short term but they still had another overall record year.
The key feature of the year has been the whole firm working remotely since the beginning of the first UK lockdown and it is a testament to the culture of the firm and the ability of our staff to adapt so rapidly to their new working environment as we continue to be in the same situation almost a year later. At the time of writing the focus is how we return to the office as restrictions ease and the expectation is that we will operate on a hybrid basis in future. From a management point of view, our number one priority has been to focus on their welfare and they, in turn, have focussed on continuing to provide our clients with the very best service, albeit in a slightly different way. A variety of initiatives have been used to communicate internally with each other and externally with clients, all to great success. There is no doubt that virtual meetings have many benefits, not least in time and cost savings, as well as being a much more sustainable way to operate which is one of our key values. Both HFM and HIM have been able to host virtual events which have arguably had far more attendees than if they had been held IRL (In Real Life) but it is universally agreed that nothing can replace a face to face meeting or, indeed, the comradery of office life. Moving forward, it is highly likely that we will operate as a hybrid between a virtual and a real life, but for the moment it remains virtual. As part of our goal to grow funds under management, we have used the opportunity this year to roll out our time management and business development training programme to all client facing staff which has been a great success. In addition, presentation training has been given to some key individuals and as we focus on raising our profile and brand awareness, these skills will be increasingly important to build the business. As well as growing funds organically, I am pleased to report that we have also been very successful in recruitment in 2020 and not only did our new Head of Sales join in September, but the first investment manager for our new Bath office joined in November and since then we have recruited a further two investment managers, one business development manager and three support staff and we plan to open a physical office in June. This is the start of a number of key hires which support our growth plans as we start to expand nationally. We have also been recruiting in our central functions in order to build support for our growing offices and we were delighted to welcome Jess De Alwis as Head of Compliance and Risk in July. More recently we have expanded our Research and Investment Administration departments and we launched our internship programme. We started a project to streamline our processes and procedures to increase efficiency and cut costs and the first step was the launch of our client portal in June with the main focus on secure messaging with our clients but also recognising that this is a much more sustainable way of operating as a firm. The year has been one of considerable change from a corporate point of view, with the resignation of the Chairman, James Brent in June and Anthony Deacon, one of our long standing NEDs, kindly stepped in as Interim Chair. David Evans resigned in July and Brian Ashford-Russell resigned in December. This was followed by the announcement in early January that Hawksmoor had exchanged contracts with Hurst Point, a subsidiary of Carlyle Group, to acquire 100% of the share capital of the company. The FCA gave their approval for a change in control and the deal subsequently completed on the 1st March 2021. This is a very exciting opportunity for us as we move into the next phase of our development.
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HAWKSMOOR GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
Financially the firm held up extremely well in such a turbulent year and although we saw a slight fall in FUM, revenues increased slightly and profitability was broadly maintained.
In terms of our three stated KPIs • Total FUM ended 2020 at £1,372 bn, a decrease of 4.6% on the previous year • Revenues grew by 3.1% to £10,016m • Underlying profitability (when excluding new business award costs) was down 2% on previous year to £1.417m with a profit margin of 14.1% Following such a strong previous year, and bearing in mind all the events of 2020, this is a very satisfactory result, particularly when one takes into account the extreme turbulence of markets in Q1 2020. The year has been one of consolidation and preparation for the next phase of growth and it is a credit to all the staff for achieving these results in such challenging conditions. Whilst our corporate structure will change , our commitment to our clients will not, and we will continue to provide the high quality service that they have received to date through Hawksmoor Fund Management, Hawksmoor Investment Management, Direct and Indirect (through our intermediary relationships). Discretionary Portfolio Management remains our core service, whilst also offering Model Portfolio Service (MPS), AIM Portfolio Service and Sustainable World MPS. We are developing our investment process to overall have a more global and sustainable approach, reflecting our core values whilst looking to achieve the best outcomes for our clients. We remain committed to our regulatory requirements at all times and are continually striving to enhance our processes and procedures to achieve the best possible standards. Our core values reflect the strong culture within the firm and the longevity of service of many staff, together with a number of high quality new individuals joining the firm, is a good indicator of these values.
Hawksmoor faces a number of risks in the conduct of its business. Like all FCA regulated entities, Hawksmoor must compile and maintain a Risk Register and an Internal Capital Adequacy Assessment Process document (‘ICAAP’, which contains a thorough and detailed assessment of the risks facing the business and how those risks are mitigated. Extracts from our ICAAP can be seen on the Hawksmoor website www.hawksmoorim.co.uk as part of our “Pillar 3 disclosure”, together with other information on the risks facing Hawksmoor and how the Group addresses them.
The Group considers these to be:
Funds under Management in our various mandates: These are monitored and reported to the Executive Committee on a monthly basis via the monthly Management Accounts and to the quarterly meetings of the Board Revenues: These are monitored and reported to the Executive Committee on a monthly basis via the monthly Management Accounts and to the quarterly meetings of the Board. They are dependent on our Funds under Management. Net Profit: This is monitored and reported to the Executive Committee on a monthly basis via the monthly Management Accounts and to the quarterly meetings of the Board.
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HAWKSMOOR GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The Group considers these to be:
Regulatory Factors (complaints, breaches, errors): These are recorded and monitored in the relevant registers maintained by the Compliance team; none have been attributed to any “systemic” issues. Of the small handful of matters that we have treated as a complaint since Hawksmoor’s inception, all have been dealt with satisfactorily and reported at the monthly meetings of the Executive Committee and to the quarterly meetings of the Board. In practice, they are very few; any breaches or errors are thoroughly reviewed and none have been referred to the Financial Ombudsman Service. Employee turnover: This is constantly monitored by the Chief Executive and the Executive Committee. However, Hawksmoor is still a relatively young and small group; turnover among senior staff has been nil and turnover among junior staff very low. Employee satisfaction: This is monitored by the annual appraisal process and informally throughout the year. Also, staff are asked from time to time to complete a questionnaire on working conditions and invited to make suggestions for improving them. The results of the staff survey at the end of the year suggested “a strong level of employee engagement”. Environmental footprint: The Group’s environmental impact is small; we strive to be as paperless as possible, with all surplus paper recycled; individuals are encouraged to make journeys by train wherever possible. Also we have introduced a Sustainability Policy covering all aspects of our activities.
The directors act in good faith to continually balance the success of the group and the rewards to its shareholders against many other factors, including ensuring that:
• We seek to foster strong and mutually beneficial Client and supplier relationships and in all matters to comply with the vision and values policies that we hold. • Business is conducted morally and ethically, in line with the businesses’ vision and values • Short-term gains do not have an adverse consequence on the Hawksmoor’s long-term strategy, success and benefits • Employee welfare, training and interests are taken care of with support for professional development and mental health. • Any community and environmental impacts as a result of the group’s operations are considered. Specific measures implemented by the group during the financial year reflecting these matters include: - introducing a new staff training programme for mental awareness - acting on feedback from its staff survey - continuing to support a number of charitable activities both through financial donations and encouraging staff to give of their company time.
This report was approved by the board on 20 April 2021 and signed on its behalf.
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HAWKSMOOR GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' reports may differ from legislation in other jurisdictions.
The profit for the year, after taxation, amounted to £1,066,403 (2019: £881,429).
No dividend was issued during the period.
The directors who served during the year were:
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HAWKSMOOR GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
We continue to see current industry developments offering excellent opportunities for a business like Hawksmoor. In the next few years we aim to continue developing our investment process to overall have a more global and sustainable approach, reflecting our core values whilst looking to achieve the best outcomes for our clients.
MATTERS COVERED IN THE STRATEGIC REPORT
The following matters have been covered in the strategic report: - Business review - Principal risks and uncertainties - Key performance indicators
On 1 March 2021, the shares of Hawkmoor Group Limited were sold to Hurst Point Group.
This report was approved by the board and signed on its behalf.
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HAWKSMOOR GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HAWKSMOOR GROUP LIMITED
We have audited the financial statements of Hawksmoor Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Group Statement of comprehensive income, the Group and Company Statements of financial position, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard 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.
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.
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 or 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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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HAWKSMOOR GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HAWKSMOOR GROUP LIMITED (CONTINUED)
The directors are responsible for the other information. The other information comprises the information included in the Annual Report and financial statements, other than the financial statements and our Auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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HAWKSMOOR GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HAWKSMOOR GROUP LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • the nature of the industry and sector, control environment, and business performance including the design of remuneration policies; • results of enquiries with management, the directors in relation to their own identification and assessment of the risks of irregularities within the entity and group; • management’s incentives and opportunities for fraudulent manipulation of the Financial Statements (including the risk of override of controls); and • any matters we identified having obtained and reviewed the group and parent company’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the highest area of risk to be in relation to revenue recognition, with a particular risk in relation to year-end cut-off. In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override. We have also obtained an understanding of the legal and regulatory frameworks that the Group and Parent Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, FRS 102 and UK tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group and Parent Company’s ability to operate or avoid a material penalty. We identified that the principal risks of non-compliance with laws and regulations for the Group related to breaches of UK regulatory principles, specifically those established by the Financial Conduct Authority. Other areas that we considered included data protection legislation and employment law. Our procedures to respond to the risks identified included the following: • Enquiring of management in relation to actual and potential claims or litigation; • Performing analytical procedures to identify unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • Assessing whether the judgements made in making accounting estimates are indicative of a potential bias; • Reviewing board meeting minutes and those of the audit and risk committee; • Reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue; • In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgments made in accounting estimates
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HAWKSMOOR GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HAWKSMOOR GROUP LIMITED (CONTINUED)
are indicative of potential bias; and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business; and
• Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements. With regard to the risks of non-compliance with laws and regulations and breaches of UK regulatory principles, specifically those established by the Financial Conduct Authority, we considered the extent to which non-compliance might have a material effect on the Financial Statements of the Group. Our work included: • Gaining an understanding current activities, the scope of authorisation and the effectiveness of control environment; • reading any relevant correspondence with the Financial Conduct Authority; • reviewing registers maintained regarding any complaints, errors and breaches; and • discussions with management and the compliance team. We also communicated identified laws and regulations and potential fraud risks to all members of the engagement team and remained alert to possible indicators of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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's 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.
for and on behalf of
Chartered Accountants
Statutory Auditors
2nd Floor Stratus House
Emperor Way
Exeter Business Park
EX1 3QS
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HAWKSMOOR GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
REGISTERED NUMBER:06865092
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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HAWKSMOOR GROUP LIMITED
REGISTERED NUMBER:06865092
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
A income statement for Hawksmoor Group Limited has not been included in these financial statements.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 34 form part of these financial statements.
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HAWKSMOOR GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Hawksmoor Group Limited is a limited liability company incorporated in England. The registered office is 2nd Floor Stratus House, Emperor Way, Exeter, Devon, EX1 3QS. The trading address is listed on the company information page.
The principal activity for the company during the year was that of a holding company.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2014.
The directors consider that the accounts should be prepared on a going concern basis.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
- the amount of revenue can be measured reliably; and - it is probable that the Group will receive the consideration due under the contract.
Intangible fixed assets, other than goodwill on consolidation, relate to 'funds under management' that have been purchased rather than internally generated. They are initially capitalised at cost. All intangible assets are amortised to the statement of comprehensive income over their estimated economic life.
The estimated useful lives range as follows:
The period has been chosen as it is considered to represent the current useful life of the asset that has been acquired.
The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
Functional and presentation currency
Transactions and balances
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party or factors which are within the control of one or other of the parties. Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to Income statement over the remaining vesting period. Where equity instruments are granted to persons other than employees, the Income statement is charged with fair value of goods and services received.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of financial position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of financial position.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.ACCOUNTING POLICIES (continued)
Valuation of share options The Group has issued share options (note 23) the valuation of which is subject to estimation. The estimation of the value takes into account the market value of the shares at the date of grant. New Business Awards The Group awarded New Business Awards to incentivise new Investment Managers to bring their business with them. Up to 25% of the award value can be taken in cash, payable by way of bonus in 3 equal instalments one, two and three years after the start of the Investment Manager's employment. The remainder of the award value can be taken as EMI share options (see above). The accounting of these awards is subject to judgment & the valuation of the share options is subject to estimation.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Analysis of turnover by country of destination:
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 28
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 29
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 30
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Page 31
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
17.DEFERRED TAXATION (CONTINUED)
The holders of Ordinary & A Ordinary shares shall rank pan passu with regard to entitlement to dividend but the holders of B & C Ordinary shares shall not be entitled to any dividend.
The holders of Ordinary & A Ordinary shares shall each be equally entitled to received notice of, attend and vote at any general meeting of the Company. The holders of the B & C Ordinary shares shall not be entitled to receive notice of, attend or vote at any general meeting of the Company. All shares are presented as equity share capital. Share options were exercised in the period, with 267,940 £0.10 A ordinary shares being issued and 10,000 £0.10 C Oridinary shares issued. All shares are presented as equity share capital.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Share premium account
costs.
Profit and loss account
The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund.
No contributions were outstanding at 31 December 2020 or 31 December 2019.
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HAWKSMOOR GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
In 2020 the company's parent company (Hawksmoor Group Limited) granted share options under an Enterprise Management Incentive (EMI) scheme as follows:
£ Employees of Hawksmoor Investment Management Limited 679,386 Options Exercised (277,940) Options Lapsed (20,000) Options granted in previous financial years 7,017,676 CUMULATIVE TOTAL 7,399,122 Comprising: Options over Ordinary A shares - Options over Ordinary B shares 675,904 Options over Ordinary C shares 6,723,218 7,399,122 All options granted during the year were in respect of Ordinary C shares. The options are exercisable at the discretion of the individuals. The vesting date varies between vesting immediately and 3 years after the grant of the options (or an earlier date subject to conditions set out in share option agreements). The options lapse on variable dates. The weighted average exercise price of the total brought forward is £0.13 and carried forward is £0.16. The weighted average exercise price of options yet to be exercised is £0.46 and the weighted average exercise price of options that lapsed during the year is £0.87. The options exercised during the year related to 10,000 Ordinary C shares with an exercise price of 19.6p and 267,940 Ordinary A shares with an exercise price of 10p. The benefits accruing are in the form of options to acquire equity capital in Hawksmoor Group Limited in the form of ordinary shares of 10p each of varying categories as set out above. The exercise price of the options is between 0p and £1.04 per share for Ordinary C share options granted in the current year and between 0p and £1.20 per share Ordinary share options granted in prior years. The share options have been valued by the directors having regard to the underlying value of the equity instruments over which the options have been granted and utilising a recognised option pricing model (Black-Scholes). The directors have also had regard to the conditions attaching to the underlying equity instruments and the fact that all companies within the group are unlisted. In some recent years, but not 2020, as the Board considered that the exercise price was materially different from the market value of the shares at the date of grant (or entitlement if earlier) a charge was recognised through the statement of comprehensive income (with a corresponding credit to equity). The charge, which is based on the valuation principles as set out above, is spread over the period from the date of grant (or entitlement if earlier) to the end of the vesting period. The resulting charge that has been recognised through the statement of comprehensive income (and credited to equity) is £Nil (2019: £57,026).
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