WALKER CRIPS GROUP PLC — Annual Report 2011

Mar 31, 2011

ADVISORY & DISCRETIONARY INVESTMENT MANAGEMENT ASSET MANAGEMENT CORPORATE FINANCE PENSION ADMINISTRATION & MANAGEMENT STOCKBROKING STRUCTURED INVESTMENTS WEALTH MANAGEMENT

CONTENTS

Financial Highlights	1
Chairman's Statement	2
Chief Executive's Report	3
Directors' Report	5
Report by the Directors on Corporate Governance Matters	11
Statement of Directors' Responsibilities	15
Report by the Board
on Directors' Remuneration	16
Independent Auditors' Report	21
Consolidated Income Statement	23
Consolidated Statement of
Comprehensive Income	24

Consolidated Statement of Financial Position	25
Consolidated Statement of Cash Flows	26
Consolidated Statement of Changes in Equity	27
Notes to the Accounts	28
Independent Auditors' Report	56
Company Balance Sheet	58
Notes to the Company Accounts	59
Notice of Annual General Meeting	66
Shareholder Notes	72
Form of Proxy	73
Officers and Professional Advisers	ibc

FINANCIAL HIGHLIGHTS

Year ended 31 March 2011

Total revenue up 14% to £20.12 million (2010: £17.65 million)

Net revenue (gross profit) up 12.5% to £14.99 million (2010: £13.33 million)

Profit before tax up 15% to £1.75 million (2010: £1.52 million)

Basic earnings per share up 17% to 3.35 pence (2010: 2.87 pence)

Proposed final dividend up 6% to 1.8 pence per share (2010: 1.7 pence per share)

Non-Broking Revenue

CHAIRMAN'S STATEMENT

Year ended 31 March 2011

Results Overview

I am pleased to report a further improvement in the Group's performance, with a 15% increase in profit before tax over the period resulting from more buoyant market conditions, the continued growth in our major business lines and vigilant cost control.

As a consequence, basic earnings per share increased by 17% to 3.35p (2010: 2.87p).

In addition, the Group's financial position remains robust with net assets at the year end of £14.7 million (2010: £14.6 million) leaving us well placed to fund future growth and withstand any further volatility in world markets. Cash balances at the year end were £4.3 million (2010: £5.7 million) after the payment of £0.96 million (2010: £0.93 million) of dividends to shareholders during the year and the repurchase of £139,000 of ordinary shares into treasury in June 2010. Our cash balances remain subject to day-to-day variations in client settlement requirements and related swings in the components of working capital.

Business Performance Overview

The continued growth in funds under management at our asset management division, WCAM, to £787 million at the year end (31 March 2010: £630 million) resulted in increased revenues and profits in this division.

The investment management division also experienced growth in fee income. Michael Sunderland, Private Client Director, retired from the Group after 38 years of loyal service. The Board and staff of the Group wish him well in his retirement. Chris Kitchenham, who has worked alongside Michael for many years, was appointed to lead the team and continue its development plans in readiness for the changes resulting from the Retail Distribution Review.

Whilst activity levels in the corporate finance division picked up towards the end of the period, revenues underperformed the previous year by 14%. Strict cost control minimised the impact to the division's bottom line. The better conditions witnessed towards the end of the period leave the division well placed to participate in any upturn in the small cap arena.

Revenues in the financial services division increased slightly over the previous year, although additional investment in marketing and unbudgeted regulatory charges held back the bottom line as the division positioned itself for future growth.

Walker Crips' Structured Investments business continued to build on its strong reputation with professional advisers with the launch of a number of new products during the period. This increased output has helped to lift revenues and profits during the period and presents the Group with scope for further growth.

Dividend

I am pleased to announce that the Group's improved performance over the year has allowed your Board to recommend an increase in the final dividend to 1.8 pence per share (2010: 1.7 pence per share) making a total for the year of 2.74 pence per share (2010: 2.64 pence per share). The increased dividend reflects your Board's desire to continue rewarding shareholders with a growing income stream and as a demonstration of their confidence in the future strength of the Group.

The final dividend will be paid on 22 July 2011 to those shareholders on the register at the close of business on 17 June 2011.

AGM

This year's annual general meeting will be held as usual at Armourers' Hall, 81 Coleman Street, London EC2R 5BJ on the 15 July 2011, but will commence at the earlier time of 11.00 am. Coffee and biscuits will be served for a short while before and after the meeting.

Outlook

We expect the first quarter of a new financial year to be relatively subdued and the current more generally uncertain short-term view of the economy and markets has impacted upon the Group's trading in, and our expectations for, the current year.

However, in the longer term, your Board is confident that the Group's strong financial position and range of products should enable it to grow shareholder value.

D M Gelber Chairman 15 June 2011

CHIEF EXECUTIVE'S REPORT

Year ended 31 March 2011

Results overview

The relative stability of UK financial markets during the period provided the environment for further steady progress in Group revenue and profitability. The 14% increase in revenue was buoyed by a strong fourth quarter enabling the Group's reported profit before tax to increase by 15.2%, despite unexpectedly high Financial Services Compensation Scheme (FSCS) Levies of over £200,000 resulting from the failure of firms in other financial sectors.

Administrative expenses were closely monitored and the majority of the 12.1% increase over the prior year related directly to additional business generated. Investment revenues continued at levels well below recent years, due to the very low level of global interest rates.

Fund Management (WCAM)

The repeated success of our fund management division was once again demonstrated by a 25% increase in total FUM to a record £787 million at year end (2010: £630 million). Increasing institutional investor interest resulted in strong net inflows of £97.5 million during the period which combined with strong market performance to reach this milestone.

Our senior fund managers continued enhancing WCAM with another excellent investment performance in the unit trust funds which have seen considerable organic growth since 2002. During the years in which the UK growth and Equity Income funds have been under the management of WCAM, both funds have outperformed over 95% of their peer group competitors, a remarkable achievement.

Investment Management

The Private Client Portfolio Management business continued to move forward, delivering an 8% increase in revenue across the diversified retail client base. A substantial amount of this growth was fee based with low correlation to market conditions. The division's services now include more complex derivative instruments, an active Contracts for Difference dealing service as well as traditional bonds and equities. Now with offices in both York and London, funds under management increased by 13% to £181 million (2010: £160 million).

The division has done much to prepare to meet the industry-wide Retail Distribution Review (RDR) Level 4 qualification requirement for broker/portfolio managers. The majority of the team have now exceeded this minimum by achieving the Level 6 exams well before the requirements come into place. New products and service offerings specifically designed to capitalise on the opportunities arising from the RDR are expected to be launched later this year.

Our structured investments business, Walker Crips Structured Investments (WCSI), has continued to grow market share with an expanding range of innovative products. Total sales through IFA channels comfortably exceeded last year's results, raising over £50 million in equity linked products.

A strong finish to the financial year in active markets enabled our traditional advisory and execution-only business to register a small increase in commission income on better volumes.

Subscriptions into our ISA product increased by 12% year on year, justifying once again our policy of incubating products for several years until more lucrative returns can be enjoyed.

The cost of meeting the increasing burden of compliance continues to put pressure on profitability, exacerbated further in the period by events outside our control such as those leading to the exceptionally high FSCS Levy.

Wealth Management

Our innovative Financial Services and Pensions Management division continues to be driven by focused management and advisers, who provide a committed, premium service to a predominantly regional client base.

Once again, the RDR implementation process is well in hand with the vast majority of advisers already qualified to the RDR required standard.

The flagship SIPP (Self Invested Personal Pension) product showed strong growth after a targeted marketing drive. In addition, the SSAS (Small Self Administered Scheme) is being marketed to small corporate and family controlled companies in need of dedicated pension services.

SIPP plans at year end numbered 279 (2010: 250) and funds under administration at the year end were up 18% at just over £82 million (2010: £70 million). SSAS plans under administration amounted to £204 million (2010: £200 million).

The joint venture with a provincial firm of accountants providing Wealth Management services to their client base enjoyed its most profitable year since formation in 2007.

Corporate Finance

The Corporate Finance division made a small loss during another challenging year, despite the number of retained clients increasing to 13 and costs remaining strictly monitored. The division is encouraged by an active pipeline for the current year.

Staff

I would like to thank all our personnel for their efforts this year, in particular the account executives, many of whom are faced with the difficult task of studying and requalifying under the RDR. Our back and middle office staff unwaveringly demonstrated loyalty and commitment despite the austerity pressures of the past two years.

Liquidity

The current level of cash resources within the business remains more than sufficient for working capital purposes and provides adequate headroom even when faced with volatile business flows. Great emphasis is placed on the credit risk of the banking institutions with whom we place funds, with financial stability taking greater priority over rates of return.

Going Concern

The Group continues to have a robust financial position. Having conducted detailed forecasts and appropriate stress-testing on liquidity, profitability and regulatory capital, taking account of possible adverse changes in trading performance, the Board has sufficient grounds to believe the Group is well placed to manage its business risks adequately and that it will be able to operate within the level of its current financing arrangements and regulatory capital limits, which includes a £3 million overdraft facility. Accordingly, the Board continues to adopt the going concern basis for the preparation of the financial statements.

Outlook

Overall trading activity in the opening weeks of the new financial year has been quiet, reflecting current economic uncertainty.

Whilst this may impact short term performance, your Board believes that the Group is well positioned to capitalise on improvements in its markets over the longer term.

R A FitzGerald FCA Chief Executive Officer 15 June 2011

DIRECTORS' REPORT

Year ended 31 March 2011

The directors present their annual report on the affairs of the Group, together with the financial statements and auditor's report, for the year ended 31 March 2011.

Principal activities and business review

The principal activities of the Group are investment management including stockbroking, fund management, administration of Individual Savings Accounts, the provision of investment advice and managing clients' deposits in the course of conducting investment business. In recent years, these activities have expanded to include corporate finance, pension management and advice, structured investments design, corporate trustee services and personal financial services.

A review of the business can be found in both the Chairman's statement and Chief Executive's report, and below.

Long term strategy and business objectives

The objective for the Group is to build upon the historical private client business to create a broader financial services group and, by accelerating growth and profitability, to create real shareholder value. For the foreseeable future this will comprise building on the existing divisions of investment management/stockbroking, fund management, financial services and corporate finance. In each division the strategy will be to grow both organically and by acquisition in a manner that creates recurring revenue and shareholder value. There are three key elements to implementing the Group's strategy. They are:

• focused acquisitions of teams of individuals or entities which complement or widen our existing product range and which deliver measured profitability and growth;
• targeted investment in resources required to expand the product range to build on the organic growth and profitability already achieved; and
• increasing the level of recurring fee revenues derived from our investment management and financial advisory services.

Our progress on our strategic objectives is monitored by the Board by reference to several key performance indicators (KPIs) applied on a group wide basis. Performance in 2011 is set out in the table below together with prior year performance data. No changes have been made to the source of data or calculation methods used in the year.

	2011	2010
Transaction volumes	104,664	101,616
Investment Funds under management 31 March	£787 million	£630 million
Non broking income to total income	52.3%	50.0%

DIRECTORS' REPORT

Year ended 31 March 2011

Results and dividends

Results, distributions and retained profits are as follows:

	2011	2010
	£'000	£'000
Retained earnings at 1 April	5,134	5,013
Profit for the year after taxation	1,216	1,049
Dividends paid	(963)	(928)
Retained earnings at 31 March	5,387	5,134

The directors recommend a final dividend of 1.8p per ordinary share to be paid on 22 July 2011 to ordinary shareholders on the register on 17 June 2011 which, together with the interim dividend of 0.94p paid on 10 December 2010, makes a total of 2.74p for the year (2010: 2.64p)

Capital Structure

Details of the Company's share capital are shown in note 24. The Company has one class of ordinary share which carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company.

There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights.

Voting rights of shares held by the trustees of the Company's Share Incentive Plan (SIP) are not exercised unless the trustee is directed to vote by the employee SIP participant.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

With regard to the appointment and replacement of directors, the company is governed by its Articles of Association, the Combined Code, the Companies Acts and related legislation. The articles themselves may be amended by special resolution of the shareholders.

Risks and uncertainties

Risks to the business are reviewed monthly and monitored by the board-appointed Business Risk Panel; they are formally reviewed by the Board once a year. The Group's risk management policies and procedures are also discussed in the Report by the directors on Corporate Governance matters and financial risks and risk management form part of note 22 to the financial statements. The principal risks of the Group are as follows:

Risk Type	Risk	Key Mitigators
Credit Risk	Counterparty risk	Majority of clients are small. All institutional transactions are cash against delivery.
Liquidity Risk	Bank default and other systemic risk	Several banks are used to hold both clients' and firm's money; with levels being constantly reviewed.
	Settlement failure	Experienced management team monitors settlement performance. Overdraft facilities in place.
	Capital Adequacy	Capital adequacy surplus maintained well in excess of regulatory requirement. Material surplus cash balances.

Directors and their interests

The directors of the Company who served during the year, are listed below together with their beneficial interest in the shares of the Company.

	Ordinary shares		Share options
	31 March 2011	31 March 2010	31 March 2011	31 March 2010
D M Gelber (non-executive chairman)	44,876	41,777	-	-
R A FitzGerald (chief executive)*	194,962	191,864	-	-
S J Bailey	404,232	401,134	300,000	300,000
D Hetherton*	629,637	626,437	-	-
S K W Lam*	123,558	120,347	75,000	75,000
M J Sunderland (resigned 28 Feb 2011)	n/a	2,359,764	-	-
H M Lim (non-executive)	-	-	-	-
M J Wright (non-executive)*	4,500	4,500	-	-
R A Elliott (non-executive)*	357,188	354,091	-	-

The shareholdings above include Partnership shares held within the Group's Share Incentive Plan. *Brief biographies of the directors eligible and standing for election at the Annual General Meeting are set out below

Rodney FitzGerald, FCA, Chief Executive

Rodney is a graduate of Leeds University and qualified as a Chartered Accountant in 1979 with Hays Allan & Co. After holding senior positions outside the financial services sector, he joined independent stockbrokers T C Coombs & Co. in 1987 and was appointed to the board in 1989. More recently, he was Finance Director of Meespierson ICS Limited, now Fortis Bank Global Clearing, before joining WCG as Finance Director in 1999. He was appointed Chief Executive Officer in January 2007.

Sean Lam, FCPA, Chartered FCSI, Group Managing Director

Sean graduated in 1991 with a Bachelor of Commerce degree from the University of Western Australia majoring in Accounting and Finance. He commenced his career as an internal auditor with Phillip Securities in Singapore and progressed to become the Head of Internal Audit. In 1995, he was appointed Head of Operations and in the same year he attained his professional qualification as a CPA. In 1999, WCG appointed Sean to the board as Development Director, with overall responsibility for systems development and information technology. In 2004, he was made Chief Operating Officer, and in 2007, Group Managing Director. Sean is a Fellow of CPA Australia and Deputy President of its European Region, and he is also a Chartered Fellow of the Chartered Institute for Securities & Investment.

David Hetherton, Financial Services Director

David Hetherton began his Financial Services career in 1982 as a Consultant with Denison Investments Ltd. Upon this Company's takeover by Minet Consultancy Services in 1990 David was appointed a Divisional Director and was instrumental in developing the business from loss-making into a highly profitable entity. In January 1998 he took up the post of Group Managing Director of the London York Group, which was subsequently acquired by Walker Crips Group plc in 2005. Since then he has integrated the wealth management and pension product divisions bringing diversity of revenue to the Group including the launch of our in-house SIPP.

Martin Wright, Senior Independent Director, Non Executive

Martin Wright was appointed to the board in July 1996 as a non-executive director. He is a partner of Speechly Bircham LLP (Solicitors) and is a member of the Law Society. He is also a non-executive director of a number of private companies.

Robert Alan Elliott, FCA, Cert PFS, Non Executive Director

Robert Elliott is a retired Chartered Accountant, having joined Garbutt & Elliott in 1957, qualifying in 1963. After being appointed as Partner in 1964, he developed specialist skills in negotiating corporate finance acquisitions, disposals and mergers. He co-founded both G&E Investment Services Ltd and the London York group of companies. Formerly Chairman of the Finance Committee of the Dean & Chapter in York, he continues to serve on their Investment Committee. In May 2008 he was appointed Chairman of the Audit Committee.

Supplier payment policy

The Company's policy, which is also applied by the Group, is to establish terms of payment with suppliers prior to transacting and to abide by the terms of payment. The aggregate amount owed to suppliers of the Company at 31 March 2011 represented 32 days (2010: 29 days) of purchases (based on the aggregate amount invoiced by suppliers during the financial year).

Corporate, social, environment and community

The Social Responsibility & Safety Committee consists of two directors and other senior managers, and makes recommendations to the Board on social, environmental and community issues.

Whilst recognising that the Group is a financial services organisation whose primary responsibility is to maximise investment returns to clients in accordance with their contractual relationship and stated risk profile and investment objectives, there are non-financial considerations which may affect the long-term value of the subsidiary companies and close attention is paid to minimising their environmental impact.

General policies to improve the environment and staff welfare

• Staff are encouraged to travel on public transport through the availability of interest-free season ticket loans
• Secure parking spaces are provided for bicycles
• Taxis ordered for company personnel for business purposes are from a fleet comprised solely of hybrid, energy efficient vehicles
• Provision of company cars for senior management ceased in 2003
• Video and telephone conferencing facilities are now available to reduce the necessity of travelling to attend internal meetings
• Increasing electronic storage of documents rather than retention of paper versions
• Electronic distribution of reports, contract notes, etc., to reduce paper consumption
• Recycling of waste wherever possible, including printer toner cartridges
• All portable electronic appliances are safety tested every two years
• Old fluorescent light tubes are disposed of in the appropriate manner, as is all computer and other electrical equipment
• Measures to increase security and staff safety have been implemented; including biometric entry system, concealed panic button and CCTV
• WCG has adopted a 'corporate' Charity, currently "Room to Read", and staff are involved in fundraising activities to support this
• Our WCAM division has been involved in local youth sports as Sponsors to London Community Rugby League and has also established links with the Croydon Hurricanes with a donation of players' shirts.
• Environmental and social commitment is demonstrated at Board level the Chairman drives an electric vehicle, the Managing Director and other Directors cycle to work, one Director is actively involved in coaching youth rugby in the South London area.
• Various members of staff are involved in a local 6-a-side football competition; a running team has been set up to compete in a charity race; individuals have taken part not only in the London Marathon for various charities but also the Edinburgh Marathon.

Ethical responsibility

Our clients specify any ethical preferences that they have when we construct their investment portfolios or make individual recommendations. We actively support the professional institutes and trade associations of which we are members to promote a strong ethical code of conduct. We have also responded actively to our regulator's drive to increase ethical standards across the industry through the themed TCF Project (Treating Customers Fairly).

Employment policy

It is the Group's policy to give appropriate consideration to applications for employment from disabled persons, having proper regard to their particular aptitudes. For the purposes of training, career development and promotion, disabled staff, including any who become disabled in the course of their employment, are treated on equal terms with other employees.

Health and safety policy

The Board has a policy of adopting procedures, appropriate to its activities, to monitor, maintain and, where relevant, improve health and safety standards to safeguard the Group's staff.

None of the Company's activities involve any significant health and safety risks. During the year there were no injuries, illnesses or dangerous occurrences which needed to be reported under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995.

Political and charitable donations

The Group made a charitable donation of £400 to 'Room to Read' during the year (2010: £nil). No political donations were made during the year (2010: £nil).

Ordinary and special business

Resolutions will be placed before the Annual General Meeting to confer authority on the Company to allot equity securities of up to an aggregate nominal amount of £823,360 and to authorise and empower the Company to allot equity securities.

The Companies Act 2006 permits a public company to purchase its own shares in accordance with powers contained in its Articles of Association and with the authority of a resolution of shareholders. The directors believe that the Company should be authorised to take advantage of these provisions and therefore, pursuant to the power contained in the Company's Articles of Association, it is intended to propose a special resolution at the forthcoming Annual General Meeting to confer authority on the Company to purchase up to a maximum in aggregate of 10% of the ordinary shares of 6 2/3p each in the share capital of the Company at a price or prices which will not be less than 6 2/3p and not be more than 5% above the average of the middle market quotation derived from the London Stock Exchange Daily Official List for the ten business days before the relevant purchase is made.

The authority was given at the last Annual General Meeting of the Company for a period expiring at the conclusion of the next Annual General Meeting. It is the directors' intention that a resolution for its renewal will be proposed at each succeeding Annual General Meeting. The directors will only make use of the authority when satisfied that it is in the interest of the Company to do so. Shareholders should note that any ordinary shares purchased by the Company will either be cancelled and the number of ordinary shares in issue will accordingly be reduced or will be held as Treasury Shares.

They may further note that the total number of warrants and options to subscribe for equity shares in the Company that are outstanding as at 31 March 2011 is 1,322,436 share options (for further information refer to note 24 of the financial statements). The proportion of issued share capital of the Company that this represents as at 31 March 2011 is 3.6%. If the Company used the full authority to buy back the shares under resolution 12 they would then represent 4.0% of the issued share capital of the Company.

Year ended 31 March 2011

Substantial shareholdings

As at 31 March 2011, the following interests, excluding those of directors, in excess of 3% of the ordinary share capital of the Company were held:

	Number	Percentage Held
L.W.S. Lim	2,512,176	6.8
M-T.L. Lim	2,512,176	6.8
W.J.L. Lim	2,512,173	6.8
M. J. Sunderland	2,352,900	6.3
Liontrust Intellectual Capital Trust	1,658,604	4.5
W. H. Saunders	1,181,366	3.2

Pillar 3 disclosures

The Basel Capital Accord, issued by the Basel Committee on Banking Supervision, aims to improve the flexibility and risk sensitivity of the existing Accord. The Accord consists of three mutually reinforcing pillars. Pillar 3 recommends requirements aimed at enhancing market discipline through effective disclosure of information to market participants.

The disclosures can be found on the following website: www.wcgplc.co.uk

Auditor

Each of the persons who is a director at the date of approval of this annual report confirms that:

• so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware; and
• the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. Deloitte LLP have expressed their willingness to continue in office as auditor of the Company and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.

By order of the board

R A FitzGerald FCA Director 15 June 2011

REPORT BY THE DIRECTORS ON CORPORATE GOVERNANCE MATTERS

Year ended 31 March 2011

The Company is committed to the Principles of Good Governance set out in Section 1 of the June 2006 FRC Combined Code on Corporate Governance by complying with the Code of Best Practice. Further explanation of how the principles have been applied is also set out below and, in connection with directors' remuneration, in the report by the board on directors' remuneration.

Compliance

With one exception, the Company has been in compliance with the code provisions set out in the Combined Code on Corporate Governance issued by the Financial Services Authority. The exception is in regard to the period of appointment within non-executive directors' service contracts which are not for fixed periods as stated in code A7.2 (see below).

The Board of directors

The Board of directors currently consists of four executive and four non-executive directors. The full Board meets regularly throughout the year, usually every alternate month.

The Board is provided with appropriate information on a timely basis to enable it to discharge its duties. It has a formal schedule of matters reserved to it for decision making, including, inter alia, developing the future direction of the Group's business, agreeing policies and procedures, approving material transactions, business risk reviews, budgets and borrowings and monitoring the Group's progress. Decisions delegated to management are not specifically listed but limited to £50,000 in value where financial commitments are necessary in the daily course of business and £100,000 in value for investment and capital projects. All subsidiary boards of directors include at least one main Board executive director which serves as the link between operational decision making by both the board directors and management.

The roles of Chairman and Chief Executive, occupied by D. M. Gelber and R. A. FitzGerald FCA respectively, are separated and the Board includes non-executive directors, of whom D.M. Gelber, R.A. Elliott FCA and M.J. Wright are regarded as independent and the remaining directors believe they provide an objective viewpoint.

The Board has three established committees: the Audit Committee, the Nomination Committee and the Remuneration Committee, all comprised entirely of non-executive directors.

Non-executive directors of the plc company are also directors of the boards of the five main operating subsidiary companies which conduct regulated investment business.

During the year, the directors, in their capacity as members of the board / appropriate committee, attended the following number of meetings:

	Board	Remuneration Committee	Audit Committee	Nomination Committee
Number of meetings	5	2	3	1
D.M. Gelber (non-executive chairman)	5	2	3	1
M.J. Sunderland (resigned 28 Feb 2011)	5	n/a	n/a	n/a
S.J. Bailey	5	n/a	n/a	n/a
R.A. FitzGerald (chief executive)	5	n/a	n/a	n/a
S.K.W. Lam	5	n/a	n/a	n/a
H.M. Lim	-	2	n/a	1
M.J. Wright	5	2	3	1
R.A. Elliott	5	n/a	3	1
D. Hetherton	5	n/a	n/a	n/a

The non-executive directors also serve and attend board meetings as directors of the five main regulated subsidiary companies, thereby playing an active part in decision-making and control at an operating level.

The Company's procedures for 'whistleblowing', whereby colleagues may confidentially raise concerns about possible improprieties in matters of financial reporting or other issues, has been reviewed by the Board and made available to approved persons and staff.

A satisfactory evaluation of the effectiveness of the Board, its directors and committees has been conducted and reviewed. This entailed an evaluation of the summarised results of a widely-used questionnaire being benchmarked against the published results of a cross-section of quoted companies.

M. J. Wright, the senior independent director, has served on the Board for fifteen years since the Company's full listing on the London Stock Exchange. The firm of solicitors, Speechly Bircham LLP, of which he is a partner, provided legal services to the group during the year totalling £65,000 (2010: £43,000). The Board values his continuing contribution, particularly on legal matters, and has also determined that he is independent and would like him to continue. He will, therefore, be put forward for re-election to the Board at each Annual General Meeting henceforth, in accordance with the recommendations of the Higgs Report.

Nomination Committee

The committee consists of D.M. Gelber, M.J. Wright, R.A. Elliott and H.M. Lim. It considers and makes recommendations to the Board for the appointment of directors. When considering possible candidates, the committee evaluates their skill, knowledge, experience and in the case of non-executives, their independence and other commitments.

A Nomination Committee meeting was held during the year to discuss succession planning for the main board and key senior positions at operating subsidiary level.

Audit Committee

During the year, the Audit Committee consisted of M.J. Wright, D.M. Gelber and R.A. Elliott FCA who is the Committee Chairman. The Committee's terms of reference include reviewing the scope and findings of the external audit, reviewing the plan and findings of the internal audit function, assessing the effectiveness of the Company's internal control procedures and the reporting of results. The Company's auditor and the executive directors may attend committee meetings by invitation. The committee has a discussion with the external auditor at least once a year without executive directors being present, to ensure that there are no unresolved issues of concern. The Audit Committee met three times during the course of the year and was fully attended. During the year, the Audit Committee reviewed the cost effectiveness, objectivity and independence of the auditor. The auditor disclosed the level of fees received in respect of the various services provided by their firm in addition to the audit during the year. They confirmed to the Audit Committee that they did not believe that the level of non-audit fees had affected their independence. The Audit Committee's policy is to use the most appropriate advisers for non-audit work, taking account of the need to maintain independence.

In August 2010, the Audit Committee approved the outsourcing of the internal audit function to a leading firm of auditors, Smith & Williamson, whose experience in the financial services sector provides the Board with additional assurance that an adequate control framework is in place.

Remuneration Committee

The Remuneration Committee consists of D. M. Gelber, H. M. Lim and its Chairman, M. J. Wright. The Committee is responsible for agreeing the remuneration of the executive directors and other key personnel of the Company. The full Board is responsible for agreeing the remuneration of the non-executive directors. The Chief Executive attends certain parts of meetings of the Remuneration Committee by invitation. Further details of the Company's policies on directors' remuneration, service contracts and share options are given in the report by the Board on directors' remuneration.

A staff profit share scheme which enables all employees to share directly in the future prosperity of the Group has been in operation for several years. Accordingly, an amount of £190,000 (2010: £145,000) has been allocated to the scheme for the year being reported.

An employee Share Incentive Plan incentivises employees to join with the Company in making regular joint purchases of shares in the Company to be held in trust for a minimum of three years. The Share Incentive Plan replaces the employee share option schemes previously in operation. Existing share options will remain exercisable over their life, up to ten years from the date of grant.

Non-executive directors

Contrary to the recommendations of the Combined Code, non-executive directors' contracts do not cover their appointment for a specified period, because under the Articles of Association all directors are required to retire by rotation and one third of the Board is required to seek re-election each year. Re-election is subject to shareholders' approval. The terms and conditions of appointment of non-executive directors, as well as the Audit, Remuneration and Nomination Committees, are available for inspection by any person at the Company's registered office during normal business hours and at the Annual General Meeting.

Executive directors

Executive directors have service contracts of varying lengths, but maximum compensation for loss of office is limited to twelve months' salary in all instances.

Directors' emoluments are disclosed in the report by the Board on directors' remuneration.

The Management Committee / Business Risk Panel

The Board has appointed a Management Committee to assist in the day-to-day management of the Group. The committee is, inter-alia, responsible for developing plans for implementing the strategy of the Group, advising on the allocation of personnel and capital resources. The Business Risk Panel ensures that all new initiatives, projects and products are formally assessed and evaluated for the degree of risk exposure to the Group so enabling risk strategies of elimination, mitigation or avoidance to be formulated.

Relations with shareholders

The Board recognises the importance of communications with shareholders. The Chairman's statement and Chief Executive's report in this report and accounts include a detailed review of the business and future developments. There is regular dialogue with institutional investors, fund managers and analysts around the time of the Company's preliminary announcement of results for the year and also at the three interim reporting periods or on request.

The Board uses the Annual General Meeting to communicate with private and institutional investors and welcomes their participation. The Chairman aims to ensure that all of the directors are available at Annual General Meetings to answer questions. The proxy votes cast on each resolution proposed at general meetings are disclosed at those meetings.

Internal control

The Board acknowledges its responsibility for the Group's system of internal control and has formalised the process for its review of internal control (including financial, operational and compliance controls as well as risk management) and defining the scope and frequency of reports to be received, both by the Board and the Audit Committee. There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company and Group. This process has been in operation throughout the year ended 31 March 2011 and up to the date of approval of the annual report and accounts and is regularly reviewed by the Board and the Board is satisfied it accords with the Turnbull guidance. Due to the size of the Company and Group there is a simple organisational and reporting structure. Financial results and other information are regularly reported to the Board throughout the year. Operations are monitored closely.

The directors have reviewed the effectiveness of the Company's system of internal control and consider that the controls and procedures established are appropriate for the Company and Group. However, any system of internal control can only provide reasonable, not absolute, assurance against material misstatement or loss.

The Group operates under a system of internal financial controls which have been developed and refined to meet its current and future needs. These include but are not limited to:

• the organisational structure and the delegation of authorities to operational management;
• procedures for the review and authorisation of capital investments;
• budgets and forecasts which are reviewed by the board;
• the reporting and review of financial results and other operating information;
• accounting and financial reporting policies to ensure the consistency, integrity and accuracy of the Group's accounting records; and
• financial and operating controls and procedures which are in place throughout the organisation and monitored through various means including routine and special reviews by internal audit staff.

Going concern

Having conducted detailed forecasts and appropriate stress-testing, taking account of possible adverse changes in trading performance, the Board has sufficient grounds to believe the Group is well placed to manage its business risks adequately and that it will be able to operate within the level of its current financing arrangements, which includes a £3m overdraft facility. Accordingly, the Board continues to adopt the going concern basis for the preparation of the financial statements.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

Year ended 31 March 2011

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing the parent company financial statements, the directors are required to:

• select suitable accounting policies 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; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

In preparing the group financial statements, International Accounting Standard 1 requires that directors:

• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
• make an assessment of the company's ability to continue as a going concern.

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 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 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 company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
• the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

R A FitzGerald FCA, Director 15 June 2011

REPORT BY THE BOARD ON DIRECTORS' REMUNERATION

Year ended 31 March 2011

Introduction

This report has been prepared in accordance with Schedule 8 to the Accounting Regulations under the Companies Act 2006. The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board has applied the Principles of Good Governance relating to directors' remuneration. As required by the regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be received.

The regulations require the auditor to report to the Company's members on certain parts of the directors' remuneration report and to state whether in their opinion that part of the report has been properly prepared in accordance with the Companies Act 2006 (as amended by the Regulations). The report has therefore been divided into separate sections for audited and unaudited information.

Unaudited information

Directors' remuneration policy

The Group has a policy of rewarding the executive board with a basic salary close to industry market rates but taking account of the Group's size in relation to its competitors. An integral element of the package of emoluments will continue to be incentives, whether these be from a bonus linked to corporate or divisional profitability or performance-related share options which will enable the directors to join with shareholders in the share price performance of the Group.

Non-executive directors receive fixed remuneration.

Remuneration Committee

The members of the Remuneration Committee are D. M. Gelber, H.M. Lim, and M.J. Wright. The Committee is responsible for setting the remuneration and benefits of each executive director in accordance with the policy above.

Basic salary

During the year, two meetings were held by the Remuneration Committee which the Chief Executive was invited to attend. The primary purpose of these meetings was to review annual salaries for the executive directors and the division of the bonus pool. In July 2010, salary increases of 2.5% were awarded to all directors.

Bonus scheme

All Executive directors, and certain subsidiary directors are each eligible to receive a bonus, dependent on Group profits, paid at the discretion of the Board. The bonus is payable annually out of a pool (divisible amongst all of the executive directors and others) calculated at the rate of 5% of the net profits of the Group (defined in the service contracts as audited Group profits before tax) where profits are between the index linked bands of £451,674 and £1,129,186 and 15% of profits to the extent that profits exceed £1,129,186. In respect of the year ended 31 March 2011, £146,649 (2010: £110,000) has been allocated to the executive directors' bonus pool.

Share options

The Group's policy to grant options to executive directors under Share Option Schemes established in 1996 has been discontinued now that the schemes have expired. Existing share options will remain exercisable over their life up to ten years from the date of grant.

On 1 September 2003 the board decided that share options awarded to directors would be exercisable only if certain performance criteria tailored to the individual were met. At that time S.J. Bailey, investment director, was awarded 300,000 share options which are exercisable only if unit trusts funds under management by his division have grown to exceed between £20 and £30 million at the date of exercise depending on the year of exercise. S.K.W. Lam, Group Managing Director, was awarded 75,000 share options in March 2004 which are exercisable if group overheads remain below 65% to 75% of total revenue depending on the year of exercise.

Unit trust fund incentive scheme

In light of the successful growth in the unit trust investment management division, the remuneration committee has approved incentive scheme payments which reward the appropriate department members, including S.J. Bailey, with a bonus payable quarterly based on 10% of the net profits of the unit trust division, as defined in the scheme, enhanced further to a maximum of 20% if performance exceeds certain market recognised benchmarks.

Long Term Incentive Plan

Shareholders approved a plan put forward by the Board and its external advisers to further compensate senior executives of the Group's unit trust fund management division in the event of a sale of the division or of the whole Group. Initially the two executives nominated to participate are Stephen Bailey and Jan Luthman, who will be entitled to cash payments of up to 20% of any cash consideration received by the Company in respect of such disposal.

Performance graph

The graph below shows a comparison between the Company's total shareholder return performance as compared with the companies in the FTSE Small Cap Index. The graph compares the value, by 31 March 2011, of £100 invested in Walker Crips Group Plc on 31 March 2006 with the value of £100 invested in the FTSE Small Cap Index. This Index has been chosen to give a comparison with the average returns that shareholders could have received by investing in a range of other small UK public companies.

Walker Crips Group plc Total Shareholder Return Compared with FT-SE Small Cap Index

Pensions

There are no defined benefit Company pension schemes in operation. The Company contributes a percentage of the executive directors' basic salaries into personal pension arrangements of their choice. In addition, salary sacrifice may be exercised in favour of additional pension contributions.

Service contracts

Executive directors

The executive directors have entered into service agreements with the Company taking account of previous continuous periods of service. The agreements are terminable on not less than six months' notice in writing at any time (12 months in the case of notice given by the Company to R.A. FitzGerald) and provide private health care for the executive director, his spouse and children under 24 under a scheme approved by the directors. All executive directors are now included under 'keyman' insurance cover arranged by the Company.

Non-executive directors

D. M. Gelber was appointed as non-executive Chairman of the Company by a letter agreement dated 11 May 2007 for a term commencing on 11 May 2007 of not less than two years and thereafter terminable by either party on at least six months' notice in writing or otherwise in accordance with the Company's Articles of Association. His remuneration is now a fee of £35,875 per annum plus reimbursement of other specific expenses incurred on behalf of the Company.

M.J. Wright has a letter of appointment dated 9 July 2000 and accepted on 10 July 2000 for a term of not less than two years commencing on 9 July 2000 and terminable by either party on not less than three months' notice in writing or otherwise in accordance with the Company's Articles of Association. His fees are now £20,000 plus VAT per annum plus expenses payable to Speechly Bircham LLP quarterly in arrears.

H.M. Lim has no formal service agreement with and receives no remuneration from the Company.

R.A. Elliott was appointed as a non-executive director on 11 April 2005 by a letter agreement with a right for him to resign immediately in accordance with the Company's Articles of Association. The agreement also provides for Mr Elliott's re-election each year at the Company's Annual General Meeting. His remuneration is now £20,500 per annum plus expenses.

Audited information

Directors' emoluments

The total amounts for directors' remuneration and other benefits are shown below:

	2011 £	2010 £
Emouluments	1,102,360	1,006,623
Company contributions to personal pension schemes	179,344	201,715
	1,281,704	1,208,338
Gains on exercise of options	-	9,878
	1,281,704	1,218,216

Directors' emoluments (continued)

	Fees/basic salary	Taxable benefits	Bonus	Bonus taken as Pension Contribution	Personal Pension Contribution	Year ended 31 March 2011 Total	Year ended 31 March 2010 Total
Name of director	£	£	£	£	£	£	£
Executive
R A Fitzgerald FCA	157,925	2,842	23,032	-	15,793	199,592	193,807
S J Bailey	142,625	1,905	383,490	-	9,983	538,003	481,573
S K W Lam FCPA	157,925	1,905	23,032	-	11,055	193,917	188,547
D Hetherton	63,802	1,584	-	24,333	75,146	164,865	164,369
MJ Sunderland (resigned 28 Febru ary 2011)	82,500	3,762	-	21,034	22,000	129,296	134,417
Non-executive
H M Lim	-	-	-	-	-	-	-
M J Wright	-	-	-	-	-	-	-
D. M. Gelber	35,656	-	-	-	-	35,656	31,250
R A Elliott FCA	20,375	-	-	-	-	20,375	14,375
Aggregate emoluments	660,808	11,998	429,554	45,367	133,977	1,281,704	1,208,338
Fees paid to third parties						20,000	15,000

Fees to third parties comprise amounts paid to Speechly Bircham LLP under an agreement to provide the Group with the services of M.J. Wright as a non-executive director.

Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company granted to, or held by, the directors and their connected parties. Details of the options are as follows:

Name of director	Exercise period of option	Exercise Price £	1 April 2010	Granted	Exercised	Lapsed	31 March 2011	Gains on exercise of share options £
S J Bailey	Sep 2006 to Sep 2013	0.422	300,000	-	-	-	300,000	-
S K W Lam	Mar 2007 to Mar 2014	0.492	75,000	-	-	-	75,000	-
			375,000	-	-	-	375,000	-

REPORT BY THE BOARD ON DIRECTORS' REMUNERATION

Year ended 31 March 2011

Directors' emoluments (continued)

No options were granted to directors during the year. Exercise of certain options granted in prior years is subject to attainment of appropriate performance related criteria. The market price of the ordinary shares at 31 March 2011 was £0.48 (2010: £0.505) and the range during the year was £0.425 to £0.505 (2010: £0.545 to £0.43).

By order of the board,

R A FitzGerald FCA Director 15 June 2011

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WALKER CRIPS GROUP PLC

We have audited the group financial statements of Walker Crips Group plc for the year ended 31 March 2011 which comprise the Group Income Statement, the Group Statement of Comprehensive Income, the Group Statement of Financial Position, the Group Statement of Cash Flows, the Group Statement of Changes in Equity and the related notes 1 to 29. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the group financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the group financial statements:

• give a true and fair view of the state of the group's affairs as at 31 March 2011 and of its profit for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WALKER CRIPS GROUP PLC Year ended 31 March 2011

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the group financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit

Under the Listing Rules we are required to review:

• the directors' statement contained within the Directors' Report in relation to going concern; and
• the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Other matter

We have reported separately on the parent company financial statements of Walker Crips Group plc for the year ended 31 March 2011.

Simon Hardy (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor London, United Kingdom 15 June 2011

CONSOLIDATED INCOME STATEMENT

Year ended 31 March 2011

	Notes	2011 £'000	2010 £'000
Continuing operations
Revenue	4	20,122	17,648
Commission payable	6	(5,132)	(4,320)
Gross Profit		14,990	13,328
Share of after tax profits of joint ventures	16	11	-
Administrative expenses		(13,295)	(11,862)
Operating profit		1,706	1,466
Investment revenues	7	50	60
Finance costs	7	(1)	(3)
Profit before tax		1,755	1,523
Taxation	10	(539)	(474)
Profit for the year attributable to equity holders of the company	8	1,216	1,049
Earnings per share
Basic	12	3.35p	2.87p
Diluted	12	3.27p	2.80p

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 March 2011

	Notes	2011 £'000	2010 £'000
Loss on revaluation of available-for-sale investments taken to equity	17	(137)	(98)
Deferred tax on loss on available-for-sale investments		61	27
Deferred tax on share options		(4)	3
Net loss recognised directly in equity		(80)	(68)
Profit for the year		1,216	1,049
Total comprehensive income for the year attributable to equity holders of the company		1,136	981

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 March 2011

	Notes	Group 2011 £'000	Group 2010 £'000
Non-current assets
Goodwill	13	5,121	5,121
Other intangible assets	14	461	576
Property, plant and equipment	15	767	868
Investment in joint ventures	16	34	23
Available-for-sale investments	17	1,183	1,320
		7,566	7,908
Current assets
Trade and other receivables	18	35,847	30,245
Trading investments	17	720	451
Deferred tax asset	20	26	-
Cash and cash equivalents	19	4,281	5,655
		40,874	36,351
Total assets		48,440	44,259
Current liabilities
Trade and other payables	23	(33,207)	(28,963)
Current tax liabilities		(568)	(494)
Bank overdrafts	21	-	(72)
Deferred tax liability	20	-	(99)
		(33,775)	(29,628)
Net current assets		7,099	6,723
Net assets		14,665	14,631
Equity
Share capital	24	2,470	2,470
Share premium account		1,626	1,626
Own shares	24	(312)	(173)
Retained earnings		5,387	5,134
Revaluation reserve		820	896
Other reserves		4,674	4,678
Equity attributable to equity holders of the company		14,665	14,631

The financial statements of Walker Crips Group plc (Company Registration No : 01432059) were approved by the board of directors and authorised for issue on 15 June 2011.

Signed on behalf of the board of directors

R A FitzGerald FCA, Director 15 June 2011

CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended 31 March 2011

	Notes	2011 £'000	2010 £'000
Operating activities
Cash generated by operations	26	777	3,733
Interest received		33	28
Interest paid		(1)	(3)
Tax paid		(539)	(277)
Net cash generated by operating activities		270	3,481
Investing activities
Deferred consideration payment under acquisition agreements		-	(150)
Purchase of property, plant and equipment		(218)	(83)
Net purchase of investments held for trading		(269)	(135)
Dividends received		17	37
Net cash used in investing activities		(470)	(331)
Financing activities
Proceeds on issue of shares		-	27
Purchase of treasury shares		(139)	-
Dividends paid		(963)	(928)
Net cash used in financing activities		(1,102)	(901)
Net (decrease)/increase in cash and cash equivalents		(1,302)	2,249
Net cash and cash equivalents at beginning of year		5,583	3,334
Net cash and cash equivalents at end of year		4,281	5,583
Cash and cash equivalents		4,281	5,655
Bank overdrafts		-	(72)
		4,281	5,583

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2011

	Called up share capital £'000	Share premium £'000	Own shares held £'000	Capital Redemption £'000	Other £'000	Revaluation £'000	Retained earnings £'000	Total Equity £'000
Equity as at 31 March 2009	2,464	1,605	(173)	111	4,564	967	5,013	14,551
Revaluation of investment at fair value	-	-	-	-	-	(98)	-	(98)
Deferred tax credit to equity	-	-	-	-	-	27	-	27
Movement on deferred tax on share options	-	-	-	-	3	-	-	3
Profit for the year	-	-	-	-	-	-	1,049	1,049
Dividends paid	-	-	-	-	-	-	(928)	(928)
Issue of shares on exercise of options	6	21	-	-	-	-	-	27
Equity as at 31 March 2010	2,470	1,626	(173)	111	4,567	896	5,134	14,631
Revaluation of investment at fair value	-	-	-	-	-	(137)	-	(137)
Deferred tax credit to equity	-	-	-	-	-	61	-	61
Movement on deferred tax on share options	-	-	-	-	(4)	-	-	(4)
Profit for the year	-	-	-	-	-	-	1,216	1,216
Dividends paid	-	-	-	-	-	-	(963)	(963)
Purchase of treasury shares	-	-	(139)	-	-	-	-	(139)
Equity as at 31 March 2011	2,470	1,626	(312)	111	4,563	820	5,387	14,665

NOTES TO THE ACCOUNTS

Year ended 31 March 2011

1. General information

Walker Crips Group plc is a company incorporated in Great Britain under the Companies Act 2006. The address of the registered office is given on the inside back cover. The nature of the Group's operations and its principal activities are set out in note 4 and in the directors' report on pages 5 to 10.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have also been prepared in accordance with IFRSs adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation. The financial statements are prepared on the historical cost basis, except for the revaluation of certain financial instruments.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group operates.

Adoption of new and revised Standards

In the current year, the following new and revised Standards have been adopted:

The Group has adopted IFRS 3: 'Business Combinations'. The revised standard continues to apply the acquisition method to business combinations, however, all payments to purchase a business are to be recorded at fair value at the acquisition date. All acquisition-related costs should be expensed.

As no acquisition has taken place during the period the standard does not have an impact on the Group's results or net assets this year.

The Group has adopted IAS 27: 'Consolidated and Separate Financial Statements'. The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. Any remaining interest in an investee is re-measured to fair value in determining the gain or loss recognised in profit or loss where control over the investee is lost. This standard has had no significant impact on the Group's financial position.

The Group has adopted IAS 24 (Revised), 'Related Party disclosures '. The revised standard includes an exemption from the disclosure requirements for related party transactions between 'state controlled' entities and includes a revised definition for related parties. This standard has had no significant impact on the Group's disclosure of related party transactions.

At the date of authorisation of these financial statements, the following relevant Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

IFRS 7 (Revised), 'Disclosures – Transfers of Financial Assets' (effective from 1 July 2011). The revised standard requires additional disclosures for transfers of financial assets and where there are a disproportionate amount of transactions undertaken around the period end. The directors anticipate that the adoption of this Standard will have no material impact on the financial statements of the Group.

IFRS 9, 'Financial instruments' (effective from 1 January 2013). The standard contains two primary measurement categories for financial assets: amortised costs and fair value. The standard eliminates the existing IAS 19 categories of 'held to maturity', 'available for sale' and 'loans and receivables'. The potential effect of this standard is currently being evaluated but it is expected to have some impact not least on how assets and liabilities are presented in the financial statements.

2. Significant accounting policies

Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved where the company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations

The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.

Any deferred consideration, in the form of equity instruments to be issued in future periods (which forms part of the cost of acquisition) is recognised as a liability measured at fair value at the date of acquisition and re-valued at each statement of financial position date to reflect management's best estimate of the consideration to be issued, which is based on the actual and expected future performance of the acquisition.

Interests in joint ventures

A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control; that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

The Group's share of the assets, liabilities, income and expenses of jointly controlled entities are accounted for in the consolidated financial statements under the equity method.

Income from the sale or use of the Group's share of output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/ from the Group and their amount can be measured accurately.

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary or jointly controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed in future periods.

For the purpose of impairment testing, goodwill is allocated to each of the group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. On disposal of a subsidiary or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

Intangible assets

(a) Client Lists

Acquired client lists are capitalised based on the expected future cashflows to be generated over the lives of the assets, discounted at an appropriate discount rate. These costs are amortised on a straight line basis over their expected useful lives of ten years.

(b) Unit Trust Management Contracts

Acquired Unit Trust Management Contracts are capitalised as intangible assets based on an estimate of the expected future cashflows that those contracts will generate over their useful lives of ten years. These costs are amortised on a straight line basis over their expected useful lives.

At each statement of financial position date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

2. Significant accounting policies (continued)

Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents gross commissions, interest receivable and fees in the course of ordinary investment business, net of discounts, VAT and sales-related taxes. Gross commissions on stockbroking activities are recognised on those transactions whose bargain date falls within the financial year. Interest is recognised as it accrues in respect of the financial year. Fees earned from managing client deposits and administering ISAs are accrued evenly over the period to which they relate. Fees in respect of financial services activities and corporate finance activities are accrued evenly over the period to which they relate, unless fees are contingent on a particular event, in which case they are recognised to the extent that they are earned. Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.

Operating expenses and other charges are provided for in full up to the statement of financial position date on an accruals basis.

Foreign currencies

The individual financial statements of each group company are presented in pounds sterling, which is the functional currency of the company and the presentation currency of the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each statement of financial position date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.

Exchange differences arising on the settlement of monetary items, and on the re-translation of monetary items, are included in the consolidated income statement for the period.

Property, plant and equipment

Fixtures and equipment are stated at historical cost less accumulated depreciation and provision for any impairment. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the straight-line method on the following bases:

Computer hardware	33¹/3% per annum on cost
Computer software	between 20% and 33¹/3% per annum on cost
Leasehold improvements	Over the term of the lease
Furniture and equipment	33¹/3% per annum on cost

The gain or loss on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period that the liability is settled or the asset is realised. Deferred tax is charged or credited directly to equity in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

Financial Assets and Liabilities

Financial assets and liabilities are recognised on the consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Trade receivables

Trade receivables are predominantly settled within normal market cycles. Trade receivables are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less any impairment.

Investments

Investments are recognised and de-recognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including transaction costs.

Investments are classified as either held-for-trading or available-for-sale, and are measured at subsequent reporting dates at fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or loss for the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Trade payables

Trade payables are recognised at fair value.

Bank overdrafts

Interest-bearing bank overdrafts are recorded at an amount equal to the proceeds received. Finance charges are accounted for on an accrual basis in profit or loss using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Provisions

Provisions are recognised when the group has a present obligation as a result of a past event, and it is probable that the group will be required to settle that obligation. Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the statement of financial position date, and are discounted to present value where the effect is material.

Share-based payments

The Group has applied the requirements of IFRS 2 Share-based Payment. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January 2008. The Group has also early adopted IFRIC 11 from 7 November 2002.

The Group issues equity-settled share-based payments to certain employees and other personnel. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effects of non market-based vesting conditions.

Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

2. Significant accounting policies (continued)

Shares to be issued

Shares to be issued represent the Group's best estimate of the ordinary shares in Walker Crips Group Plc which are likely to be issued on successful completion of acquisitions which involve deferred payments in the Company's shares. The sum is reviewed annually and revised if appropriate.

Pension costs

The Group contributes to defined contribution personal pension schemes for selected employees. The contribution rate is based on annual salary and the amount is charged to the income statement on an accruals basis.

Leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

Going Concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and Chief Executive's report on page 2 to 4.

In addition, note 22 to the financial statements includes details of risk management objectives, policies and processes for managing its capital.

The Group has healthy financial resources together with a long established, well proven and tested business model. As a consequence, the directors believe that the Group is well placed to manage its business risks successfully despite the current difficult climate.

After conducting enquiries, the directors believe that the Company and the Group have adequate resources to continue in existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

3. Key sources of estimation uncertainty

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill at the balance sheet date was £5.1 million (2010:£5.1m).

Other intangible assets

Acquired client lists are capitalised on the basis of net discounted expected future cashflows over the life of the client list. On acquisition of the London York group on 11 April 2005, the directors estimated such a useful life to be 10 years, based on historical rates of client retention and revenue generation of the acquired group in relation to the client base. Additionally, unit trust management contracts were acquired at the same time, valued at £240,000 being 2% of the net asset value of the unit trust funds under management for which a useful life of 10 years has also been estimated.

Valuation of Investment in Euroclear plc

The fair valuation of the Group's investment in Euroclear plc is based upon the Group's share of net assets and the directors' assessment of marketability.

4. Revenue

An analysis of the Group's revenue is as follows:

	2011 £'000	2010* £'000
Investment Management	13,959	12,391
Corporate finance	308	358
Financial services	2,021	1,990
Fund Management	3,834	2,909
Revenue	20,122	17,648
Net investment revenue (Note 7)	49	57
Total Income	20,171	17,705

* Prior year revenue has been re-classified between operating divisions as determined by clients' principal activity, whereas previously these income streams were split across several segments.

5. Segmental analysis

For management purposes the Group is currently organised into four operating divisions – Investment Management, Corporate Finance, Financial Services and Fund Management. These divisions, all of which conduct business in the United Kingdom only, are the basis on which the Group reports its primary segment information.

2011

	Investment Management £'000	Corporate Finance £'000	Financial services £'000	Fund Management £'000	Consolidated Year ended 31 March 2011 £'000
Revenue
External sales	13,959	308	2,021	3,834	20,122
Result
Segment result	606	(64)	197	2,148	2,887
Unallocated corporate expenses					(1,181)
Operating profit					1,706
Investment revenues Finance costs					50 (1)
Profit before tax Tax					1,755 (539)
Profit after tax					1,216
Other information
Capital additions	195	9	1	13	218
Depreciation	270	12	19	18	319
Statement of Financial Position
Assets Segment assets	38,556	358	886	1,378	41,178
Unallocated corporate assets					7,262
Consolidated total assets					48,440
Liabilities
Segment liabilities	32,385	37	295	742	33,459
Unallocated corporate liabilities					316
Consolidated total liabilities					33,775

NOTES TO THE ACCOUNTS Year ended 31 March 2011

2010 (As restated)*

	Investment Management £'000	Corporate Finance £'000	Financial services £'000	Fund Management £'000	Consolidated Year ended 31 March 2010 £'000
Revenue
External sales	12,391	358	1,990	2,909	17,648
Result
Segment result	644	(44)	301	1,423	2,324
Unallocated corporate expenses					(858)
Operating profit					1,466
Investment revenues Finance costs					60 (3)
Profit before tax Tax					1,523 (474)
Profit after tax					1,049
Other information
Capital additions	72	4	2	5	83
Depreciation	337	18	38	25	418
Statement of Financial Position
Assets Segment assets	33,454	465	1,201	1,369	36,489
Unallocated corporate assets					7,770
Consolidated total assets					44,259
Liabilities
Segment liabilities	28,031	38	310	557	28,936
Unallocated corporate liabilities					692
Consolidated total liabilities					29,628

* Please refer to note 4 for full details of revenue re-classification

NOTES TO THE ACCOUNTS

Year ended 31 March 2011

6. Commission payable

Commission payable comprises:

	2011 £'000	2010 £'000
To authorised external agents	58	67
To approved persons	5,074	4,253
	5,132	4,320

7. Investment revenues and finance costs

Net investment revenue comprises:

	2011 £'000	2010 £'000
Investment Revenue
Interest on bank deposits	33	28
Dividends from equity investment	17	32
	50	60
Finance costs
Interest on bank overdrafts	(1)	(3)
Net investment revenue (Note 4)	49	57

8. Profit for the year

Profit for the year on continuing operations has been arrived at after charging:

	2011 £'000	2010 £'000
Depreciation of property plant and equipment (see note 15)	319	418
Amortisation of intangibles (see note 14)	115	115
Staff costs (see note 9)	8,640	7,675
Auditors' remuneration	151	135

A more detailed analysis of auditors' remuneration is provided below:

	2011 £'000	%	2010 £'000	%
Audit services
Fees payable to the Company's auditor for the audit of the
Company's annual accounts	10	7	10	7
The audit of the Company's subsidiaries pursuant to legislation)	129	85	125	93
Non Audit services
Reported under AAF 01/06	12	8	-	-
	151	100	135	100

A description of the work of the Audit Committee is set out in the Report by the directors on corporate governance matters on page 13 and includes an explanation on how the auditor's objectivity and independence is safeguarded when non-audit services are provided by the auditor.

9. Staff costs

Particulars of employee costs (including directors) are as shown below:

	2011 £'000	2010 £'000
Employee costs during the year amounted to:
Wages and salaries	7,536	6,826
Social security costs	709	622
Other costs	395	227
	8,640	7,675

9. Staff costs (continued)

Staff costs do not include commissions payable mainly to self employed account executives, as these costs are included in total commissions payable to approved persons disclosed in note 6. At the end of the year there were 52 self-employed account executives who were approved persons of the Group (2010 : 58).

The monthly average number of staff employed during the year was:

	2011 Number	2010 Number
Executive directors	5	5
Approved persons	48	46
Other staff	84	79
	137	130

10. Tax

The tax charge is based on the profit for the year of continuing operations and comprises:

	2011 £'000	2010 £'000
UK Corporation tax at 28% (2010: 28%)	814	716
Deferred tax	(270)	(243)
Overseas tax	2	5
Adjustment in respect of prior years	(7)	(4)
	539	474

Corporation tax is calculated at 28% (2010: 28%) of the estimated assessable profit for the year.

10. Tax (continued)

The charge for the year can be reconciled to the profit per the income statement as follows:

	2011 £'000	2010 £'000
Profit on ordinary activities before tax	1,755	1,523
Tax on profit on ordinary activities at standard UK corporation tax rate of 28% (2010: 28%)	491	426
Effects of:
Small company rate differences	(4)	(4)
Part 12 CTA 2009 share scheme deductions	-	(3)
Expenses not deductible for tax purposes	27	23
Prior year adjustment	(5)	(4)
Amortisation of intangible assets	32	32
Overseas tax	2	5
Other	(4)	(1)
	539	474

11. Dividends

Amounts recognised as distributions to equity holders in the period:

	2011 £'000	2010 £'000
- final dividend for the year ended 31 March 2010 of 1.7p (2009: 1.6p) per share	622	584
- interim dividend for the year ended 31 March 2011 of 0.94p (2010: 0.94p) per share	341	344
	963	928
Proposed final dividend for the year ended 31 March 2011 of 1.8p (2010: 1.7p)
per share	667	630

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

12. Earnings per share

The calculation of basic earnings per share for continuing operations is based on the post-tax profit for the financial year of £1,216,000 (2010: £1,049,000) and on 36,301,187 (2010: 36,573,308) ordinary shares of 6 2/3p, being the weighted average number of ordinary shares in issue during the year.

The effect of options granted would be to reduce the reported earnings per share. The calculation of diluted earnings per share is based on 37,147,771 (2010: 37,470,621) ordinary shares, being the weighted average number of ordinary shares in issue during the period adjusted for the dilutive effect of potential ordinary shares.

The calculation of the basic and diluted earnings per share is based on the following data:

Earnings	2011 £'000	2010 £'000
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent	1,216	1,049
Earnings for the purposes of diluted earnings per share	1,216	1,049

Number of shares	2011	2010
Weighted average number of ordinary shares for the purposes of basic earnings per share	36,301,187	36,573,308
Effect of dilutive potential ordinary shares: Share option schemes	846,584	897,313
Weighted average number of ordinary shares for the purposes of diluted earnings per share	37,147,771	37,470,621

This produced unadjusted basic earnings per share of 3.35p (2010: 2.87p) and diluted unadjusted earnings per share of 3.27p (2010 – 2.80p).

13. Goodwill

	£'000
Cost
At 1 April 2009	5,569
At 1 April 2010	5,569
At 31 March 2011	5,569
Accumulated impairment losses
At 1 April 2009	448
At 1 April 2010	448
At 31 March 2011	448
Carrying amount
At 31 March 2011	5,121
At 31 March 2010	5,121

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:

	2011 £'000	2010 £'000
Unit trust funds (a single CGU)	63	63
Southard Gilbey McNish & Co. (a single CGU)	79	79
Keith, Bayley, Rogers & Co. (comprising several CGUs)	2,526	2,526
London York (comprising several CGUs)	2,901	2,901
	5,569	5,569

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to revenues and costs during the period. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs.

NOTES TO THE ACCOUNTS

Year ended 31 March 2011

14. Other intangible assets

	Unit Trust Management Contracts £'000	Client lists £'000	Total £'000
Cost
At 1 April 2009	240	911	1,151
At 1 April 2010	240	911	1,151
At 31 March 2011	240	911	1,151
Amortisation
At 1 April 2009	96	364	460
Charge for the year	24	91	115
At 1 April 2010	120	455	575
Charge for the year	24	91	115
At 31 March 2011	144	546	690
Carrying amount
At 31 March 2011	96	365	461
At 31 March 2010	120	456	576

The intangible assets 'Unit trust management contracts' and 'Client lists' are both amortised over their estimated useful lives, 10 years.

15. Property, plant and equipment

	Leasehold improvements, furniture and equipment £'000	Computer software £'000	Computer hardware £'000	Total £'000
Cost
At 1 April 2009	1,708	1,774	1,536	5,018
Disposals	(1)	-	-	(1)
Additions	38	41	4	83
At 1 April 2010	1,745	1,815	1,540	5,100
Disposals	(22)	-	-	(22)
Additions	9	140	69	218
At 31 March 2011	1,732	1,955	1,609	5,296
Accumulated depreciation
At 1 April 2009	857	1,516	1,442	3,815
Disposals	(1)	-	-	(1)
Charge for the year	241	113	64	418
At 1 April 2010	1,097	1,629	1,506	4,232
Disposals	(22)	-	-	(22)
Charge for the year	178	103	38	319
At 31 March 2011	1,253	1,732	1,544	4,529
Carrying amount
At 31 March 2011	479	223	65	767
At 31 March 2010	648	186	34	868

NOTES TO THE ACCOUNTS

Year ended 31 March 2011

16. Interest in joint ventures

	2011 £'000	2010 £'000
Aggregated amounts relating to joint ventures
Total assets	76	59
Total liabilities	(8)	(14)
Net assets	68	45
Group's share of joint ventures' net assets	34	23

	2011 £'000	2010 £'000
Revenue	61	26
Profit for the period	11	-

17. Investments

Available for sale investments	2011 £'000	2010 £'000
Fair value	1,183	1,320

The Group has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.

Available-for-sale investments consists of an investment of 1,809 Euroclear plc shares, and are included at the directors' estimate of fair value, based on the net asset value per share of Euroclear plc.

Trading investments	2011 £'000	2010 £'000
Fair value	720	451

Trading investments represent investments in equity securities and bonds that present the group with opportunity for return through dividend income, interest and trading gains. The fair values of these securities are based on quoted market prices.

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. The trading investments fall within this category;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). The Group does not hold financial instruments in this category; and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group's Available for sale investments fall within this category.

The opening fair value of Available-for-sale investments which are Level 3 financial assets is reconciled to its closing balance by a fair value loss of £137,000 (2010: £98,000) recognised in comprehensive income.

18. Other financial assets

Trade and other receivables	2011 £'000	2010 £'000
Amounts falling due within one year:
Due from clients, brokers and recognised stock exchanges	33,513	27,545
Other debtors	704	1,238
Prepayments and accrued income	1,630	1,462
	35,847	30,245

NOTES TO THE ACCOUNTS Year ended 31 March 2011

19. Cash and cash equivalents

	2011 £'000	2010 £'000
Short term cash deposits held at bank, repayable on demand with penalty	3,019	4,453
Cash deposits held at bank, repayable on demand without penalty	1,262	1,202
	4,281	5,655

Cash and cash equivalents does not include deposits of client monies placed by the Group with banks and building societies in segregated client bank accounts (free money and settlement accounts). All such deposits are designated by the banks and building societies as clients' funds and are not available to satisfy any liabilities of the Group. The amount of such net deposits which are not included in the consolidated statement of financial position at 31 March 2011 was £120,000,000 (2010: £128,000,000).

20. Deferred tax asset/(liability)

	Revaluation £'000	Capital Allowances £'000	Short term timing differences & other £'000	Total £'000
At 1 April 2010	(349)	21	229	(99)
Use of loss brought forward	-	-	(202)	(202)
Credit to the income statement	-	1	269	270
Credit to the Statement of Comprehen sive Income	61	-	(4)	57
At 31 March 2011	(288)	22	292	26

In accordance with IAS 12, at the year end date, deferred tax on share options of £6,000 (2010: £10,000) has been recognised and included in 'short term timing differences and other' above.

21. Bank overdrafts

	2011 £'000	2010 £'000
Bank overdrafts	-	72

The borrowings are repayable on demand and are all denominated in sterling. Overdrafts are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. Letters of set-off are in place allowing the bank to utilise the Group's funds in credit to satisfy overdraft repayment.

At 31 March 2011, the Group had available £3 million (2010: £3 million) of committed borrowing facilities in respect of which all conditions precedent had been met.

22. Financial Instruments and Risk Profile

Financial Risk Management

Procedures and controls are in place to identify, assess and ultimately control the financial risks faced by the Group arising from its use of financial instruments. Steps are taken to mitigate identified risks with established and effective procedures and controls, efficient systems and the adequate training of staff.

The Group's risk appetite, along with the procedures and controls mentioned above, are laid out in the Group's Internal Capital Adequacy Assessment Process document, prepared in accordance with the requirements of the Financial Services Authority (FSA).

The overall risk appetite for the Walker Crips Group is considered by management to be low, despite operating in a market place where financial risk is inherent in the core businesses of investment management and financial services. The Group considers its financial risks arising from its use of financial instruments to fall into three main categories:

• (i) credit risk;
• (ii) liquidity risk; and
• (iii) market risk

Financial Risk management is a central part of the organisation's strategic management which recognises that an effective risk management programme can increase a business' chances of success and reduce the possibility of failure. Continual assessment, monitoring and updating of procedures and benchmarks are all essential parts of the Group's risk management strategy.

(i) Credit risk

The Group's credit risk is primarily attributable to its trade receivables which is the risk that a client, market counterparty or recognised stock exchange will be unable to pay amounts in full when due. Significant changes in the economy or a particular sector could result in losses that are different from those that the Group has provided for at the year end date. The amounts presented in the statement of financial position are net of allowances for doubtful receivables.

The Board is responsible for oversight of the Group's credit risk. The Group accepts a limited exposure to credit risk, but aims to mitigate and minimise the risk through various methods.

Trade receivables (includes settlement balances)

Settlement risk arises in any situation where a payment of cash or transfer of a security is made in the expectation of a corresponding delivery of a security or receipt of cash. Settlement balances arise with clients, market counterparties and recognised stock exchanges.

In the vast majority of cases, control of the stock purchased will remain with the Group until client monetary balances are fully settled. Free deliveries, in the limited circumstances where they arise, are carefully monitored.

Where there is an absence of securities collateral, clients are usually required to hold sufficient funds in their managed deposit account prior to the trade being conducted. Holding significant amounts of client money helps the Group to manage credit risks arising with clients. Many of our clients also hold significant amounts of stock and other securities in our Nominee subsidiary company, providing additional security should a specific transaction fail to be settled and the proceeds of such securities disposed of can be used to settle all outstanding obligations.

In addition, the client side of settlement balances are normally fully guaranteed by our commission-sharing approved persons who conduct transactions and manage the relationships with our mutual clients.

Exposures to market counterparties also arise in the settlement of trades. Market counterparties are usually other FSA regulated firms and are considered creditworthy, some reliance being placed on the fact that other regulated firms would be required to meet the stringent capital adequacy requirements of the FSA.

Maximum Exposure to Credit Risk:

	2011 £'000	2010 £'000
Cash	4,281	5,655
Trade receivables	33,513	27,545
	37,794	33,200

Analysis of trade receivables:

		2011 £'000	2010 £'000
Neither past due nor impaired		31,496	24,353
Past due but not impaired	< 30 Days	1,647	2,544
	> 30 Days	206	249
	> 3 Months	164	399
Impaired		-	-
		33,513	27,545

The tables above represents a worst case scenario of credit risk exposure to the Group at 31 March 2011 and 2010 without taking account of any collateral held. The exposures set out above are based on net carrying amounts as reported in the statement of financial position.

Concentration of credit risk

The Group has no significant concentration of credit risk, with exposure spread over a large number of market counterparties and clients. Large exposures are monitored daily in line with FSA requirements.

In addition, daily risk management procedures to actively monitor disproportionately large trades by a customer or market counterparty are in place. The financial standing, pattern of trading, type and size of security or instrument traded are amongst the factors taken into consideration.

(ii) Liquidity Risk

Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities when they fall due.

Historically, sufficient underlying cash has been prevalent in the business for many years as the Group is highly cash-generative. The risk of unexpected large cash outflows could arise where large amounts are being settled daily of which only a fraction forms the commission earned by the company. This could be due to clients settling late or bad deliveries to the market or CREST, also resulting in a payment delay from the market side.

As a means of mitigation we have agreed an overdraft facility with our main bankers of £3m to smooth out any unexpected or uncontrollable imbalances described above.

The Group's policy with regard to liquidity risk is to carefully monitor balance sheet structure and borrowing limits, including:

• monitoring of cash positions on a daily basis;
• exercising strict control over the timely settlement of trade debtors; and
• exercising strict control over the timely settlement of market debtors and creditors.

The Group holds its cash and cash equivalents spread across a number of highly rated financial institutions. All cash and cash equivalents are short term highly liquid investments that are readily convertible to known amounts of cash without penalty.

All the regulated Group subsidiaries are subject to certain provisions of the new FSA Liquidity standards under FSA Handbook chapter BIPRU 12 that applied to regulated investment firms with effect from 1 December 2009.

The tables below analyse the Group's future cash outflows based on the remaining period to the contractual maturity date.

2011	Less than 1 year £'000	1-2 years £'000	2-5 years £'000	Total £'000
Bank overdrafts	-	-	-	-
Trade & Other Payables	32,705	-	-	32,705
	32,705	-	-	32,705

2010	Less than 1 year £'000	1-2 years £'000	2-5 years £'000	Total £'000
Bank overdrafts	72	-	-	72
Trade & Other Payables	28,715	-	-	28,715
	28,787	-	-	28,787

(iii) Market Risk

Interest Rate Risk

Interest rate risk is the risk that future cash flows from a financial instrument will fluctuate because of market interest rates. The group is exposed to some interest rate risk as it holds excess funds in cash and short term deposits.

If market interest rates had been 100 basis points lower throughout the year, with all other variables held constant, pre-tax profit for the year would have been £33,000 (2010: £28,000) lower.

Foreign Exchange Risk

The Group is primarily focused on conducting business in the UK markets and does not hold significant positions other than in sterling.

Foreign exchange transactions are occasionally conducted on an agency basis to aid the settlement of clients' overseas transactions.

The Group does not consider itself to have any material exposure to foreign currency risk and, therefore, no sensitivity analysis is presented.

Equity Risk

Available-for-sale investments

The Group holds an investment in Euroclear plc shares, as an available-for-sale investment in non-current assets. The valuation of the investment is based on the net assets of the underlying entity, which may be subject to some fluctuation from year to year. At 31 March 2011, a 5% fall in the net assets of the underlying entity would result in a post-tax impact on equity of £43,771 (2010: £47,520).

Trading Investments

The Group manages a relatively small principal book under the overall direction of the Private Clients Director, the total permitted maximum value of open positions being set by the Business Risk Panel. The portfolio is actively managed on a daily basis.

The Group designs and distributes structured investments issued by major credit institutions, to sophisticated clients via the Walker Crips Structured Investments (WCSI) team. To secure advantageous pricing for clients and mitigate risk on group profit margin, WCSI commits to buy various structured investments, as principal, at the time of product launches and periodically within the launch period which typically lasts six weeks.

The maximum value of these exposures is determined by the BRP and is monitored on a daily basis. These exposures are in most cases fully mitigated by the sale of WCSI plan units to clients, prior to the plan launch date. The group, on occasion, holds a small residual principal position in relation to these instruments, where the securities were unsold as plan units during the marketing period. These exposures are subsequently reduced usually within one or two business days or as soon as is expedient.

Price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group is exposed to price risk through its holdings of investment securities, as outlined above, which are reported at their fair value.

At 31 March 2011, the fair value of securities recognised on the statement of financial position was £720,000 (2010: £451,000).

A 10% fall in global markets would, in isolation, result in a post-tax reduction in the income statement of £53,280 (2010: £32,472).

Capital Risk Management

The Group has an Internal Capital Adequacy Assessment Process (commonly known as the ICAAP), which it uses to manage regulatory capital. The risk profile of the business is assessed and stress-tested in order to determine whether any additional capital is needed.

The Group adheres to the Capital Requirement Directive (CRD) which requires the daily monitoring of the excess of Capital Resources over the Capital Resources Requirement. The Group's Capital Resources surplus is reported to the Board on a monthly basis.

The Finance department also provides details of Pillar 1 and 2 requirements in its reports to the Chief Executive Officer, any major variations being highlighted. Significant business initiatives, for instance an acquisition, can then be modelled through the ICAAP process to determine the impact on the level of regulatory capital.

The Group uses the basic indicator approach for operational risk to calculate its Pillar 1 requirements.

Compliance with FSA regulatory requirements was maintained throughout the year.

As at 31 March 2011, the Group had total equity capital of £14,665,000 (2010: £14,631,000), available for use within its operations and to meet its regulatory capital requirements as laid down by the FSA.

Fair value of financial instruments

The fair values of the Group's financial assets and liabilities are not materially different from their carrying values.

23. Other financial liabilities

Trade and other payables

	2011 £'000	2010 £'000
Amounts owed to clients, brokers and recognised stock exchanges	29,891	25,752
Other creditors	2,515	2,050
Accruals and deferred income	801	1,161
	33,207	28,963

Trade creditors and accruals comprise amounts outstanding for investment-related transactions, to customers or counterparties, and ongoing costs. The average credit period taken for purchases in relation to costs is 32 days (2010: 29 days).

The directors consider that the carrying amount of trade payables approximates to their fair value.

24. Called up share capital

	2011 £'000	2010 £'000
Called up, allotted and fully paid
37,051,187 (2010: 37,051,187) ordinary shares of 6 2/3p each	2,470	2,470

During the year the Company allotted no ordinary shares (2010: 84,000 ordinary shares with a nominal value of £6,000) in connection with the exercise of share options. The Company received no cash consideration during the year in respect of the exercise of share options (2010: £27,000).

During the period the Company spent £139,000 to purchase an additional 300,000 ordinary shares of Walker Crips Group plc to be held as Treasury shares.

The company now holds 750,000 of its own shares, purchased for total cash consideration of £312,000. In line with the principles of IAS 32 these treasury shares have been deducted from equity. No gain or loss has been recognised in the profit and loss account in relation to these shares.

The Company has granted options to certain directors, employees and account executives in respect of the following shares:

	Number of shares subject to option	Exercisable period of option	Exercise price £
Ordinary shares of 6 2/3p each	18,936	November 2004 to November 2011	0.500
Ordinary shares of 6 2/3p each	538,500	September 2006 to September 2013	0.422
Ordinary shares of 6 2/3p each	75,000	March 2007 to March 2014	0.492
Ordinary shares of 6 2/3p each	690,000	June 2008 to June 2015	0.780
	1,322,436

25. Share-based payments

Share options

The company has granted market-priced share options to directors, employees and other approved persons. The vesting period is generally three years subject to the satisfaction of performance conditions relating to real EPS growth. Further details of the options and performance conditions are set out in the Report by the board on Directors' Remuneration on pages 16 to 20. The options expire if they remain unexercised after the exercise period has expired. Furthermore, options are forfeited if the option holder leaves the company before the options vest. The options are equity settled.

		2011	2010
		Weighted		Weighted
		average		average
		exercise price		exercise price
	Options	(in £)	Options	(in £)
Outstanding at beginning of year	1,343,436	0.61	1,482,936	0.59
Forfeited/lapsed during the year	(21,000)	0.47	(55,500)	0.58
Exercised during the year	-	-	(84,000)	0.31
Outstanding at the end of the year	1,322,436	0.61	1,343,436	0.61
Exercisable at the end of the year	1,322,436	0.61	1,343,436	0.61

No share options were exercised during the year. The weighted average share price at the date of exercise for share options exercised during the previous year was £0.44. The options outstanding at 31 March 2011 had a weighted average remaining contractual life of 3.0 years (2010: 4.0 years).

The Company recognised total expenses of £nil and £nil related to equity-settled share-based payment transactions in 2011 and 2010 respectively. A complete listing of all options series outstanding as at 31 March 2011 is included in Note 24.

26. Cash generated from operations

	2011 £'000	2010 £'000
Operating profit for the year	1,706	1,466
Adjustments for:
Amortisation of intangibles	115	115
Share of joint venture income	(11)	-
Depreciation	319	418
(Increase)/decrease in debtors	(5,596)	1,662
Increase in creditors	4,244	72
Net cash inflow	777	3,733

27. Financial commitments

Capital commitments

At the end of the year, there were capital commitments of £38,000 (2010: £79,000) contracted but not provided for and £111,000 (2010: £43,000) capital commitments authorised but not contracted for.

Lease commitments

The minimum lease payments under non-cancellable operating leases fall due as follows:

	2011 £'000	2010 £'000
Within 1 year	846	835
Within 2 - 5 years	668	554

28. Related parties

Directors, employees, related parties and their spouses have dealt on standard commercial terms with the Group. The commission earned by the Group through such dealings is as follows:

	2011 £'000	2010 £'000
Commissions received from directors, employees, approved persons and
their spouses.	222	193

Other related parties include Speechly Bircham LLP, of which M.J. Wright, non-executive director, is a partner. Speechly Bircham LLP provides certain legal services to the Group on normal commercial terms and the amount paid and expensed during the year was £65,000 (2010: £43,000).

In addition, commission of £26,000 (2010: £15,000) was earned by the Group from Phillip Securities (HK) Limited (a Phillip Brokerage Pte Limited company, where H M Lim is a director) having dealt on standard commercial terms. Additionally, some custody services are provided by Phillip Securities Pte Ltd (in Singapore where H M Lim is a director) and payments of £4,000 (2010: £3,000) were made in respect of these and related services provided, again all on standard commercial terms.

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are accordingly not disclosed.

Remuneration of the directors who are the key management personnel of the Group are disclosed fully in the Report by the board on Directors' Remuneration.

29. Subsidiaries and associates

Group	Country of incorporation	Principal activity	Class and percentage of shares held
Trading subsidiaries
Keith Bayley Rogers & Co. Limited	Great Britain	Corporate Finance	Ordinary shares 100%
Walker Crips Stockbrokers Limited	Great Britain	Investment Management	Ordinary shares 100%
Walker Crips Asset Managers Limited	Great Britain	Asset Management	Ordinary shares 100%
London York Fund Managers Limited	Great Britain	Management services company	Ordinary shares 100%
Walker Crips Wealth Management Limited	Great Britain	Financial Services advice	Ordinary shares 100%
Ebor Trustees Limited	Great Britain	Pensions Management	Ordinary shares 100%
Non-trading subsidiaries
Walker Crips Financial Services Limited	Great Britain	Financial Services	Ordinary shares 100%
G & E Investment Services Limited	Great Britain	Holding company	Ordinary shares 100%
Ebor Pensions Management Limited	Great Britain	Dormant Company	Ordinary shares 100%
Monkgate Nominees Limited	Great Britain	Dormant Company	Ordinary shares 100%
Investorlink Limited	Great Britain	Agency Stockbroking	Ordinary shares 100%
Southard Gilbey, McNish & Co Limited	Great Britain	Agency Stockbroking	Ordinary shares 100%
W.B. Nominees Limited	Great Britain	Nominee Company	Ordinary shares 100%
WCWB (PEP) Nominees Limited	Great Britain	Nominee Company	Ordinary shares 100%
WCWB (ISA) Nominees Limited	Great Britain	Nominee Company	Ordinary shares 100%
WCWB Nominees Limited	Great Britain	Nominee Company	Ordinary shares 100%
Walker Crips Asset Management Limited	Great Britain	Dormant Company	Ordinary shares 100%
Jointly controlled entities
JWPCreers Wealth Management Limited	Great Britain	Financial Services advice	Ordinary shares 50%

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WALKER CRIPS GROUP PLC

We have audited the parent company financial statements of Walker Crips Group plc for the year ended 31 March 2011 which comprise the Parent Company Balance Sheet and the related notes 30 to 41. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the parent company financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the parent company financial statements:

• give a true and fair view of the state of the parent company's affairs as at 31 March 2011;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

• the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
• the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the parent company financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent company financial statements and the part of the Report by the Board on Directors' Remuneration to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Other matter

We have reported separately on the group financial statements of Walker Crips Group plc for the year ended 31 March 2011.

Simon Hardy (Senior Statutory Auditor) for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor London, United Kingdom 15 June 2011

COMPANY BALANCE SHEET

31 March 2011

	Notes	2011 £'000	2010 £'000
Fixed assets
Tangible	32	448	574
Investments	33	14,702	14,839
		15,150	15,413
Current assets
Debtors	34	272	179
Cash at bank and in hand		53	-
		325	179
Creditors: amounts falling due within one year	36	(508)	(691)
Net current (liabilities)		(183)	(512)
Total assets less current liabilities		14,967	14,901
Net assets		14,967	14,901
Capital and reserves
Called up share capital	40	2,470	2,470
Share premium account	41	1,626	1,626
Own shares held	40	(312)	(173)
Profit and loss account	41	5,407	5,065
Revaluation reserve	41	1,108	1,245
Other reserves	41	4,668	4,668
Equity shareholders' funds	41	14,967	14,901

The financial statements of Walker Crips Group plc (Company Registration No: 01432059) were approved by the board of directors and authorised for issue on 15 June 2011.

Signed on behalf of the board of directors

R A FitzGerald FCA, Director 15 June 2011

NOTES TO THE COMPANY ACCOUNTS

Year ended 31 March 2011

30. Significant accounting policies

The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared under the historical cost convention modified for the revaluation of certain investments and in accordance with applicable United Kingdom Accounting Standards and laws.

The principal accounting policies have been summarised below. They have all been applied consistently throughout the year and the preceding year.

Tangible fixed assets

Fixtures and equipment are stated at historical cost less accumulated depreciation and provision for any impairment. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the straight-line method on the following bases:

Computer hardware	33 1/3% per annum on cost
Computer software	between 20% and 33 1/3% per annum on cost
Leasehold improvements	over the term of the lease
Furniture and equipment	33 1/3% per annum on cost

The gain or loss on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

Taxation

Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Current tax charges arising on the realisation of revaluation gains, recognised in the statement of total recognised gains and losses, are also recorded in this statement.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date.

A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on sale has been recognised in the financial statements. Deferred tax assets and liabilities are not discounted.

30. Significant accounting policies (continued)

Investments - available for sale

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including transaction costs.

Investments are classified as available-for-sale, and are measured at subsequent reporting dates at fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or loss for the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-sale are not subsequently reversed through profit or loss.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Share-based payments

The company issues equity-settled share-based payments to certain Group employees and other personnel. Equitysettled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant.

Fair value is measured by use of a binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

For employees and account executives of a subsidiary of the Company, the share-based payment is accounted for as a capital contribution in the respective subsidiary. The subsidiary will then take a charge to its income statement in respect of the share based payment.

Leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term to the first available break clause.

Valuation of Investment in Euroclear plc

The fair valuation of the Company's investment in Euroclear plc is based upon the Company's share of net assets and the directors' assessment of marketability.

30. Significant accounting policies (continued)

Shares to be issued

The Company includes its best estimate of the ultimate sum which will be paid for an acquisition under deferred purchase agreements. Inevitably, there is a degree of subjectivity in this calculation depending on acquisition and share price performance.

Financial Instruments

The Company has adopted FRS25: Financial Instruments: Presentation and FRS26: Financial Instruments: Recognition and Measurement. Disclosures equivalent to that required under FRS 29 are given in the consolidated Group accounts, which are publicly available, the Company is exempt from the disclosures required by FRS 29 in its own accounts.

Going Concern

After conducting enquiries, the directors believe that the Company has adequate resources to continue in existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and Chief Executive's report on pages 2 to 4.

31. Profit for the year

As permitted by section 230 of the Companies Act 2006 the company has elected not to present its own profit and loss account for the year. Walker Crips Group plc reported a profit for the financial year of £1,305,000 (2010: Profit of £305,000).

An amount of £10,000 (2010: £10,000) related to the auditor's remuneration for audit services to the Company.

32. Tangible fixed assets

	Leasehold improvements, furniture and equipment £'000	Computer software £'000	Computer hardware £'000	Total £'000
Cost
At 1 April 2010	1,387	1,218	1,097	3,702
Additions	1	-	-	1
At 31 March 2011	1,388	1,218	1,097	3,703
Depreciation
At 1 April 2010	813	1,218	1,097	3,128
Charge for the year	127	-	-	127
At 31 March 2011	940	1,218	1,097	3,255
Net book value
At 31 March 2011	448	-	-	448
At 31 March 2010	574	-	-	574

NOTES TO THE COMPANY ACCOUNTS Year ended 31 March 2011

33. Fixed Asset Investments

Subsidiary Undertakings	£'000
At 31 March 2010	13,519
At 31 March 2011	13,519

Available for sale investments	2011 £'000	2010 £'000
Fair value	1,183	1,320

An investment of 1,809 Euroclear plc shares, has been revalued and included at the directors' estimate of fair value, based on the net asset value per share of Euroclear plc.

A complete list of subsidiary undertakings can be found in note 29 to the Group accounts.

34. Debtors

	2011 £'000	2010 £'000
Deferred tax asset (see note 35)	245	179
Prepayments	27	-
	272	179

35. Deferred tax asset

	2011 £'000	2010 £'000
At 1 April	179	69
Tax losses utilised as group relief	(191)	(94)
Credit to the income statement	257	204
At 31 March	245	179

36. Creditors

	2011 £'000	2010 £'000
Bank overdraft	-	1
Accruals and deferred income	317	462
Amounts due to subsidiary undertakings	191	228
	508	691

37. Fair value disclosures

The fair value of the Company's financial assets and liabilities is not materially different to their carrying value in the balance sheet.

The fair value of available-for-sale investments, which comprise unlisted equity securities, was determined with reference to the issuing entity's net asset value per share.

38. Financial commitments

Capital commitments

At the end of the year, there were capital commitments of £nil (2010: £nil) contracted but not provided for and £nil (2010: £nil) capital commitments authorised but not contracted for.

Lease commitments

The annual commitments under non-cancellable operating leases fall due as follows:

	2011 £'000	2010 £'000
within 2 - 5 years	695	705

39. Related party transactions

The Company has taken advantage of the exemption given by paragraph 3 of FRS 8 not to disclose transactions and balances with its subsidiaries or investees of the group qualifying as related parties.

NOTES TO THE COMPANY ACCOUNTS Year ended 31 March 2011

40 . Called up share capital

	2011 £'000	2010 £'000
Called up, allotted and fully paid
37,051,187 (2010: 37,051,187) ordinary shares of 6 2/3p each	2,470	2,470

During the year the Company allotted no ordinary shares (2010: 84,000 ordinary shares with a nominal value of £6,000) in connection with the exercise of share options. The Company received no cash consideration during the year in respect of the exercise of share options (2010: £27,000).

During the period the Company spent £139,000 to purchase an additional 300,000 ordinary shares of Walker Crips Group plc to be held as Treasury shares.

The company now holds 750,000 of its own shares, purchased for total cash consideration of £312,000. In line with the principles of IAS 32 these treasury shares have been deducted from equity. No gain or loss has been recognised in the profit and loss account in relation to these shares.

The Company has granted options to certain directors, employees and account executives in respect of the following shares:

	Number of shares subject to option	Exercisable period of option	Exercise price £
Ordinary shares of 6 2/3p each	18,936	November 2004 to November 2011	0.500
Ordinary shares of 6 2/3p each	538,500	September 2006 to September 2013	0.422
Ordinary shares of 6 2/3p each	75,000	March 2007 to March 2014	0.492
Ordinary shares of 6 2/3p each	690,000	June 2008 to June 2015	0.780
	1,322,436

41. Reconciliation of movements in shareholders' funds

	Called up share capital £'000	Share premium £'000	Own shares held £'000	Other £'000	Revaluation £'000	Profit and loss account £'000	Total Equity £'000
As at 31 March 2009 Revaluation of investment at	2,464	1,605	(173)	4,668	1,343	5,688	15,595
fair value	-	-	-	-	(98)	-	(98)
Profit for the year	-	-	-	-	-	305	305
Dividends paid Issue of shares on exercise of	-	-	-	-	-	(928)	(928)
options	6	21	-	-	-	-	27
As at 31 March 2010	2,470	1,626	(173)	4,668	1,245	5,065	14,901
Revaluation of investment at
fair value	-	-	-	-	(137)	-	(137)
Profit for the year	-	-	-	-	-	1,305	1,305
Dividends paid	-	-	-	-	-	(963)	(963)
Purchase of treasury shares	-	-	(139)	-	-	-	(139)
As at 31 March 2011	2,470	1,626	(312)	4,668	1,108	5,407	14,967

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Walker Crips Group Plc ("WCG" or the "Company") will be held at the Armourers' Hall, 81 Coleman Street, London EC2R 5BJ on 15th July 2011 at 11.00 a.m. for the following purposes:

Ordinary Business

To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions.

• 1. To receive and adopt the directors' report and audited financial statements for the year ended 31 March 2011.
• 1. To approve the directors' remuneration report for the year ended 31 March 2011.
• 1. To declare a final dividend of 1.8p per ordinary share.
• 1. To re-appoint as a director Mr. Rodney FitzGerald, who is retiring by rotation.
• 1. To re-appoint as a director Mr. Sean Lam, who is retiring by rotation.
• 1. To re-appoint as a director Mr. David Hetherton, who is retiring by rotation.
• 1. To re-appoint as a director Mr. Martin Wright, who is retiring by rotation.
• 1. To re-appoint as a director Mr. Robert Elliott, who is retiring by rotation.
• 1. To re-appoint Deloitte LLP as auditors and to authorise the directors to fix their remuneration.

Special Business

To consider and, if thought fit, to pass the following resolution which will be proposed as an ordinary resolution.

• 1. That the directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 ("the Act") to exercise all powers of the Company to allot shares in the Company and to grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal amount of £823,360 (equivalent to one third of the Company's issued share capital as at the date of this notice) provided that the authority hereby conferred shall:
• a) operate in substitution for and to the exclusion of any previous authority given to the directors pursuant to section 551 of the Act; and
• b) expire on whichever is earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15 months from the date of the passing of this resolution unless such authority is renewed, varied, or revoked by the Company in general meeting, save that the Company may at any time before such expiry make an offer or agreement which might require shares in the Company to be allotted, or rights to subscribe for or to convert any security into shares in the Company to granted, after such expiry and the directors may allot shares in the Company or grant rights to subscribe for, or convert any security into, shares in the Company in pursuance of such offer or agreement as if the authority hereby conferred had not expired.

To consider, and if thought fit, pass the following resolutions which will be proposed as special resolutions.

• 1. That, subject to the passing of Resolution 10, the directors be and they are hereby empowered pursuant to sections 570 and 573 of the Act to allot equity securities (as defined in section 560 of the Act) for cash as if section 561(1) of the Act did not apply to any such allotment pursuant to the general authority conferred on them by Resolution 10 above (as varied from time to time by the Company in general meeting) and/or by way of a sale of treasury shares PROVIDED THAT such power shall be limited to:
• a) the allotment of equity securities in connection with an issue of shares to holders of the ordinary shares of 6 2/3p each where the equity securities respectively attributable to the interest of such holders are proportionate (as nearly as may be) to the respective numbers of ordinary shares of 6 2/3p each held by them but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with any fractional entitlement or any legal or practical problems under the law of any territory or regulatory authority;
• b) the allotment of equity securities (as defined in section 560 of the Act) pursuant to the WCG 1996 share option schemes; and
• c) the allotment (otherwise than pursuant to sub paragraphs a) or b) above) or equity securities up to an aggregate nominal amount not exceeding 10% of the issued ordinary share capital of the Company as at the date of this Resolution,

and the power hereby conferred shall operate in substitution for and to the exclusion of any previous power given to the directors pursuant to sections 570 or 573 of the Act and shall expire on whichever is the earlier of the conclusion of the next Annual General Meeting of the Company or the date falling 15 months from the date of the passing of this resolution unless such power is renewed or extended prior to or at such meeting, except that the Company may before the expiry of any power contained in this resolution make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.

• 1. That the Directors be and are hereby granted pursuant to section 701 of the Act a general and unconditional authority to make market purchases (within the meaning of section 693 of the Act) of ordinary shares of 6 2/3p each in the capital of the Company ("Ordinary Shares") provided that:
• a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is limited to 10% then in issue;
• b) the minimum price which may be paid for any Ordinary Shares is 6 2/3p per Ordinary Share;
• c) the maximum price (exclusive of expenses) which may be paid for any Ordinary Shares is not more than 5% above the average of the middle market quotations for the Ordinary Shares (as derived from The London Stock Exchange Daily Official List) for the 10 business days before the purchase is made;
• d) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this Resolution; and
• e) the Company may make a contract or contracts to purchase Ordinary Shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority, and may make a purchase of Ordinary Shares pursuant of any such contract or contracts. This resolution shall confer on the directors all rights for the Company to make any such market purchase of the Company's own shares as are required under the terms of Article 8.2

By order of the Board

David J Hall DipPFS FMAAT MCSI Secretary 15 June 2011

NOTES ON RESOLUTIONS

The following paragraphs explain, in summary, the Resolutions to be proposed at the Meeting.

Resolution 1: Receipt of the 2011 Report and Accounts

The Directors of the Company must present their report and the annual accounts to the Meeting and shareholders may raise any questions on the report and accounts under this Resolution.

Resolution 2: Approval of the 2011 Remuneration Report

The Remuneration Report for the year ended 31 March 2011 has been prepared and is laid before the Meeting for approval by shareholders in accordance with section 439 of the Companies Act 2006. The vote is advisory and does not affect the actual remuneration paid to any individual Director. You can find the full Remuneration Report in the Annual Report 2011.

Resolution 3: Final dividend

Shareholders are being asked in resolution 3 to approve a final dividend of 1.8p per ordinary share for the year ended 31 March 2011. If you approve the recommended final dividend, this will be paid on 22nd July 2011 to all ordinary shareholders who were on the register of members on 17th June 2011.

Resolutions 4 to 8: Reappointment of Directors retiring by rotation

The Company's articles of association require that at each AGM one third of the Directors shall be subject to retirement by rotation. The Directors to retire by rotation shall include any Director who wishes to retire and not to offer himself for re-appointment. Any further Directors so required to retire shall be the Directors who have been longest in office since their appointment or last re-appointment, as between Directors of equal seniority the Directors to retire shall in the absence of agreement be determined by lot. A retiring Director shall be eligible for re-appointment. This year the retiring Directors are Mr Rodney FitzGerald, Mr Sean Lam, Mr David Hetherton, Mr Martin Wright and Mr Robert Elliott, all of whom seek re-appointment.

Resolution 9: Reappointment of auditors and authority for the Directors to agree the Auditors' remuneration

The Company is required to appoint Auditors at each general meeting at which accounts are laid before the Company, to hold office until the conclusion of the next such meeting. This resolution on the Audit Committee's recommendation, proposes the reappointment of Deloitte LLP as Auditors of the Company.

The Resolution also authorises the Directors, in accordance with standard practice, to set the remuneration of the Auditors. In accordance with its terms of reference, the Audit Committee will approve the terms of engagement and the level of audit fees payable by the Company to the Auditors and recommend them to the Board.

Resolution 10: Renewal of the Directors' authority to allot shares and Resolution 11: Renewal of the Directors' authority to disapply pre-emption rights

Resolutions will be placed before the Annual General Meeting to confer authority on the Company to allot equity securities of up to an aggregate nominal amount of £823,360 and to authorise the Company to allot equity securities as if section 561(1) of the Companies Act 2006 did not apply.

The directors will only make use of these authorities when satisfied that it is in the interest of the Company to do so.

The authorities will expire on the earlier of the date of the next AGM of the Company and the date falling 15 months from the date of the passing of the resolutions.

Resolution 12: Authority for the Company to purchase its own shares

The Companies Act 2006 permits a public company to purchase its own shares in accordance with powers contained in its Articles of Association and with the authority of a resolution of shareholders. The directors believe that the Company should be authorised to take advantage of these provisions and therefore, pursuant to the power contained in the Company's Articles of Association, it is intended to propose a special resolution at the forthcoming Annual General Meeting to confer authority on the Company to purchase up to a maximum in aggregate of 10% of the ordinary shares of 6 2/3p each in the share capital of the Company at a price or prices which will not be less than 6 2/3p and not be more than 5% above the average of the middle market quotation derived from the London Stock Exchange Daily Official List for the ten business days before the relevant purchase is made.

The authority was given at the last Annual General Meeting of the Company for a period expiring at the conclusion of the next Annual General Meeting. It is the directors' intention that a resolution for its renewal will be proposed at each succeeding Annual General Meeting. The directors will only make use of the authority when satisfied that it is in the interest of the Company to do so. Shareholders should note that any ordinary shares purchased by the Company will either be cancelled and the number of ordinary shares in issue will accordingly be reduced or will be held as Treasury Shares.

Shareholders should further note that the total number of warrants and options to subscribe for equity shares in the Company that are outstanding as at 31 March 2011 is 1,322,436 share options (for further information refer to note 24 of the financial statements). The proportion of issued share capital of the Company that this represents as at 31 March 2011 is 3.6%. If the Company used the full authority to buy back the shares under resolution 12 they would then represent 4.0% of the issued share capital of the Company.

SHAREHOLDER NOTES

The following pages provide more detailed information about your voting rights and how you may exercise them.

Entitlement to attend and vote

• 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at:
• 11.00 a.m. on 13 July 2011; or
• if this Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting, shall be entitled to attend and vote at the Meeting.

Appointment of proxies

• 1. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form.
• 1. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
• 1. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy your proxy card or contact Neville Registrars to obtain an extra proxy card on 0121 585 1131.
• 1. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.

Appointment of proxy using hard copy proxy form

1. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.

To appoint a proxy using the proxy form, the form must be:

• completed and signed;
• sent or delivered to Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands, B63 3DA; and
• received by Neville Registrars no later than 11.00 a.m. on 13 July 2011.

In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.

Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included in with the proxy form.

Appointment of proxies through CREST

1. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Meeting and any adjournment(s) of it by using the procedures described in the CREST Manual (available from https://www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (7RA11) by 11.00 a.m. on 13 July 2011. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001.

Appointment of proxy by joint members

1. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-name being the most senior).

Changing proxy instructions

1. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.

Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Neville Registrars Limited on 0121 585 1131.

If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of the proxies will take precedence.

Termination of proxy appointments

1. In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands, B63 3DA. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The revocation notice must be received by Neville Registrars no later than 11.00 a.m. on 13 July 2011.

If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid.

Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.

Corporate representatives

1. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share.

Issued shares and total voting rights

1. As at 6.00 p.m. on 15 June 2011, the Company's issued share capital comprised 37,051,187 ordinary shares of 6 2/3p each. Each ordinary share carries the right to one vote at a general meeting of the Company. The Company holds 750,000 ordinary shares in treasury on 15 June 2011. Therefore, the total number of voting rights in the Company as at 6 p.m. on 15 June 2011 is 36,301,187 .

Communication

1. You may not use any electronic address provided either in this notice of meeting or any related documents (including the letter with which this notice of meeting was enclosed and proxy form) to communicate with the Company for any purposes other than those expressly stated.

Website

1. Information regarding the meeting, including the information required by section 311A of the Companies Act 2006, is available from www.wcgplc.co.uk

SHAREHOLDER NOTES

FORM OF PROXY

For use at the Annual General Meeting of Walker Crips Group Plc to be held at the Armourers' Hall, 81 Coleman Street, London EC2R 5BJ on 15 July 2011 at 11.00 a.m and at any adjournment thereof.

Please complete this form using BLOCK CAPITALS

I/We	(name(s) in full)
Of (address)
	Being (a) holder(s) of shares in the above named Company HEREBY APPOINT
	(name(s) in full)
Of (address)
	or failing him (or in the event that no person is named) the Chairman of the meeting to act as my/our proxy and to vote for me/us on my/our behalf at the above mentioned meeting and any adjournment thereof, and I/we desire this proxy to be used as directed below or, failing any direction(s) as regards the Resolution(s), the proxy will abstain or vote at his discretion.
	Enter the number of shares in relation to which your proxy is authorised to vote or leave blank to authorise your proxy to act in relation to your full entitlement.
	Please also mark this box if you are appointing more than one proxy.
	The manner in which the proxy is to vote should be indicated by inserting "X" in the box provided	For	Against	Vote Witheld
1)	To receive and adopt the directors' report and audited financial statements
2)	To approve the directors' remuneration report
3)	To declare a final dividend of 1.8p per ordinary share
4)	To re-appoint Rodney FitzGerald as a director
5)	To re-appoint Sean Lam as a director
6)	To re-appoint David Hetherton as a director
7)	To re-appoint Martin Wright as a director
8)	To re-appoint Robert Elliott as a director
9)	To re-appoint Deloitte LLP as auditors and to authorise the directors to fix their remuneration
10)	To confer authority on the Company to allot equity securities of up to an aggregate nominal amount of £823,360
11)	To authorise and empower the Company to allot equity securities as if Section 561(1) of the Companies Act 2006 did not apply
12)	To authorise the Company to make market purchases of the Company's shares in accordance with the conditions in resolution 12 on the Notice of Annual General Meeting

Signature Dated / / 2 0 1 1 for a Company see Note 8

Form of Proxy

Notes

• 1. As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. You can only appoint a proxy using the procedures set out in these notes.
• 1. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the meeting in person, your proxy appointment will automatically be terminated.
• 1. A proxy does not need to be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a person other than the Chairman of the meeting, insert their full name in the space above. If you sign and return this proxy form with no name inserted in the box, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your voting intentions. If you wish your proxy to make any comments on your behalf, you will need to appoint someone other than the Chairman and give them the relevant instructions directly.
• 1. If the proxy is being appointed in relation to less than your full voting entitlement, please indicate the number of shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or, if this proxy form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account).
• 1. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy you may photocopy your proxy card or contact Neville Registrars Limited on 0121 585 1131 to obtain an extra proxy card. Please indicate the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you).
• 1. To direct your proxy how to vote on the resolutions mark the appropriate box with an 'X'. To abstain from voting on a resolution, select the relevant "Vote withheld" box. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.
• 1. To appoint a proxy using this form, the form must be:
• completed and signed;
• sent or delivered to Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands, B63 3DA; and
• received by Neville Registrars not less than 48 hours before the time appointed for holding the meeting or adjourned meeting.
• 1. In the case of a member which is a company, this proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.
• 1. Any power of attorney or any other authority under which this proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form.
• 1. CREST members who wish to appoint a proxy or proxies by using the CREST electronic appointment service may do so by using the procedures described in the CREST Manual. To be valid, the appropriate CREST message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instructions given to a previously appointed proxy, must be transmitted so as to be received by our agent Neville Registrars Limited, Neville House, Laurel Lane, Halesowen, West Midlands, B63 3DA, CREST ID (7RA11) by 11.00 a.m. on the 13 July 2011. See the notes to the notice of meeting for further information on proxy appointment through CREST.
• 1. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior).
• 1. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
• 1. For details of how to change your proxy instructions or revoke your proxy appointment see the notes to the notice of meeting.
• 1. You may not use any electronic address provided in this proxy form to communicate with the Company for any purposes other than those expressly stated.

SHAREHOLDER NOTES

OFFICERS AND PROFESSIONAL ADVISERS

EXECUTIVE DIRECTORS

RA FitzGerald FCA Chief Executive Officer

SKW Lam FCPA Chartered FCSI Group Managing Director

SJ Bailey

D Hetherton

DM Gelber Chairman

MJ Wright HM Lim Senior Independent Director

RA Elliott FCA Cert PFS

SECRETARY DJ Hall DipPFS FMAAT MCSI

AUDITORS Deloitte LLP London

SOLICITORS Speechly Bircham LLP London

REGISTERED OFFICE

Finsbury Tower 103-105 Bunhill Row London EC1Y 8LZ

Registered in England Reg No. 01432059

REGISTRARS Neville Registrars Limited

Halesowen West Midlands BG6 3DA

BANKERS HSBC Bank plc Walker Crips Group plc Finsbury Tower 103-105 Bunhill Row London EC1Y 8LZ

020 3100 8000 www.wcgplc.co.uk client.services@wcgplc.co.uk