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DWF Group plc
Annual Report and Accounts 2022
Stronger together,
driving positive outcomes
Who we are
DWF is a leading global provider of integrated legal and
business services.
Our purpose
Delivering positive outcomes with our colleagues, clients
andcommunities.
What we do
We have listened to our clients, and there is a growing desire
for legal and business services to be delivered in an easier
andmore efficient way. So, we’ve built our range of services
onthis principle.
How we do it
We have three offerings – Legal Advisory, Mindcrest and
Connected Services. Our ability to seamlessly combine
any number of these services to deliver bespoke solutions
for our clients is our key differentiator. Delivered through
our global teams across eight core sectors, our Integrated
Legal Management approach delivers greater efficiency,
price certainty and transparency for our clients without
compromising on quality or service.
01 Strategic report
01 Highlights of our year
02 Our business at a glance
04 Reasons to invest in us
06 Chair’s statement
08 Group Chief Executive Officer’s review
10 Our market drivers
12 Our business model
13 Our business model, delivering
positiveoutcomes
14 Our long-term profitable
growthstrategy
16 Our purpose
17 Our purpose in action
20 Key performance indicators
22 Financial review
26 Section 172(1) statement
28 Engaging with our stakeholders
32 Environmental, Social and
Governancereport
34 Our ESG Strategy at a glance
49 Non-Financial Information Statement
50 Risk management, our approach
52 Principal risks
55 Viability statement
57 Governance
57 Chair’s governance overview
58 Board of Directors
60 Executive Board
61 Statement of compliance with the UK
Corporate Governance Code 2018
(the‘Code’)
62 Board leadership and
Companypurpose
67 Division of responsibilities
69 Composition, succession
andevaluation
72 Nomination Committee report
75 Audit, risk and internal control
75 Audit Committee report
80 Risk Committee report
83 Remuneration
83 Directors’ Remuneration report
115 Directors’ report
119 Directors’ responsibility statement
120 Financial statements
120 Independent Auditor’s report to the
members of DWF Group plc
126 Consolidated income statement
126 Consolidated statement of
comprehensive income
127 Consolidated statement of
financialposition
128 Consolidated statement of changes
inequity
129 Consolidated statement of cash flows
130 Consolidated notes to the
financialstatements
161 Company statement of
financialposition
162 Company statement of
changesinequity
163 Company notes to the
financialstatements
168 Unaudited information
174 Other information
174 Shareholder information
175 Corporate information
176 Principal offices
DWF Group plc | Annual Report and Accounts 2022
Highlights of our year
Financial highlights Non-financial highlights
Client net promoter score
+63
An increase from +49 driven by our
ability to provide an integrated solution
to our clients’ challenges, in more
markets than ever.
Launch of ESG Strategy
50%
We published our first Environmental,
Social and Governance (‘ESG’) Strategy,
with ambitious targets on climate and
stretched targets to further improve
Diversity & Inclusion. These included
our commitment to reduce emissions
by 50% by 2030, compared with 2019.
Colleague engagement survey score
76
Our engagement score remained 76,
whilst the response rate increased
by more than 10% with nearly 3,000
colleagues participating.
DWF Foundation
£317,725
awarded in grants in the past year
Revenue
£416.1m
Net revenue
£350.2m
FY22
FY21
FY20
£416.1m
£400.9m
£356.6m
FY22
FY21
FY20
£350.2m
£338.1m
£297.2m
Definition*
Profit / (loss) before tax
£22.3m
Adjusted profit before tax
£41.4m
FY22
FY21
FY20
£22.3m
£(30.6)m
£18.2m
FY22
FY21
FY20
£41.4m
£34.2
£15.2m
Definition*
Cost to income ratio
38.4%
Lock-up days
179
FY22
FY21
FY20
38.4%
39.2%
41.4%
Definition*
* See glossary to the financial statements for
definitions of all adjusted measures
FY22
FY21
FY20
179
184
206
Definition*
Global expansion
We announced a new association in Portugal
and our first Connected Services association
in Iberia and Latin America. We also opened
a regional headquarters for business
services in Riyadh and our fourth Spanish
office, in Seville.
Client wins
We were appointed to 32 legal panels
through FY2022, including to the UK central
government legal services panel.
DWF Group plc | Annual Report and Accounts 2022 01
Strategic report Governance Financial statements Other information
Legal
Advisory
Mindcrest
Connected
Services
Our business at a glance
Our vision
To be the leading global
provider of integrated legal
and business services
Our purpose
Delivering positive outcomes
with our colleagues, clients
and communities
Our offerings
Legal Advisory
Premium legal advice and excellent
client service. Our teams bring
commercial intelligence and relevant
industry experience.
Mindcrest
Outsourced and process-led
alternative legal services offering,
designed to standardise, systematise,
scale and optimise legal workflows for
areas such as contract management
and ensuring regulatory obligations
are met for our customers.
Connected Services
Our range of products and
businessservices that enhance
andcomplement ourlegal offering.
We act with purpose:
To deliver positive outcomes with our colleagues, clients and communities
We have an ambitious and sector
leading ESG Strategy with a proven
track record ofdelivery
• We have a clear commitment to halve
ourcarbon emissions and be Net Zero
by2030
• We continue to stretch ourselves to
become more diverse and inclusive
through a range of targets including 40%
female and 10% BAME across partner
andequivalent roles by 2025
• Since it launched in 2015, the DWF
Foundation has distributed c.£900,000
through more than 400 grants to charities
in our local communities
We are not just a law firm
• We are the world’s only listed global
legalbusiness
• We have a unique vision to become the
leading global provider of integrated legal
and business services, building a global
professional services business whose
DNA is rooted in law
• We achieve this through our Integrated
Legal Management approach – we are
theonly legal business to have acquired
arecognised Alternative Legal Services
Provider (Mindcrest) and to operate a
range of business products andservices
(Connected Services)
• We are a hybrid working business – our
offices are only one environment in
whichour colleagues and clients work
andcollaborate
What does that mean for our colleagues?
• Working together with a strong sense
ofpurpose, we know we can make a
difference with each other, with our
clients and with our communities
• Being part of a pioneering business which
is disrupting the legal sector
• Enjoying future career opportunities on
aglobal scale and outside of traditional
law at the cutting edge of modern legal
and business services
• Through our listed company status,
anopportunity to own shares in DWF
from an early stage in your career
• Reward and benefits which are
competitive, family friendly and help
ustodeliver on our sustainability goals
02 DWF Group plc | Annual Report and Accounts 2022
Strategic report
We continue to build our presence globally
through acquisitions, associations and
lateral hires. This year we opened in
Seville,our fourth office in Spain, and we
established anew regional headquarters
forbusiness services in the Middle East,
through the launch of our office in Riyadh.
We also established a new association in
Portugal andwe announced our first
Connected Services association.
Where we operate
DWF offices
• Australia
• Canada
• France
• Germany
• India
• Ireland
• Italy
• Poland
• Qatar
• Spain
• UAE
• United Kingdom
• United States of America
Associations
• Hong Kong
• Kingdom of Saudi Arabia
• Portugal
• Republic of Singapore
• Republic of South Africa
• Turkey
• United States of America
Our differentiator
Our Integrated Legal
Managementapproach
Our ability to seamlessly combine
anynumber of our offerings to deliver
bespoke solutions for our clients is
ourkeydifferentiator. Delivered through
ourglobal teams across eight core sectors,
our Integrated Legal Management approach
delivers greater efficiency, price certainty
and transparency for our clients without
compromising on quality or service.
For more information, see pages 12 to 13
Net revenue by division*
2022 2021
Legal
Advisory
£292.0m
(Revenue £355.1m)
£285.3m
(Revenue £345.6m)
Mindcrest
£24.4m
(Revenue £26.8m)
£24.4m
(Revenue 26.6m)
Connected
Services
£33.9m
(Revenue £34.2m)
£28.4m
(Revenue £28.8m)
* see glossary to the financial statements for the definition of net revenue
DWF Group plc | Annual Report and Accounts 2022 03
Strategic report Governance Financial statements Other information
Reasons to invest in us
We are a leading global provider of
integrated legal and business services.
The opportunity: The $750bn global legal
services market is growing at 5% annually
and it is transforming in a technology-driven
era, with the alternative legal services market
growing at 15%.
A unique, modern
andintegrated
serviceplatform
A global business
with multi-jurisdictional
expertise
Predictable, recurring and
diverse revenues sit alongside
a quality M&A track record
Talented and incentivised
experts at the heart of
everything we do
An experienced and
diverse management team
focused on growth
Building on our established
programmes to become the
market leader on ESG
DWF is the only legal and business services
provider leading with the integrated
proposition multinational clients want, and
the only one to own a top tier provider of
alternative legal services, Mindcrest. Our
integrated approach combines premium
legal advice, outsourced and process-led
legal services and associated business
services and products, helping to improve
efficiency while ensuring quality.
With offices and associations located
acrossthe globe, our presence
distinguishesus from other listed legal
services providers and enables us to
support clients on complex cross-border
mandates and secure appointment to
multi-jurisdictional legal panels.
Our growth is underpinned by our
significant recurring revenues from blue
chip clients in our largest markets of
insurance, financial services and real estate
– supported by our strategy of acquiring
complementary businesses with high
recurring revenues and strong cash
generation. Our breadth of services and
sector expertise, together with our global
presence, ensure our revenues are
diversified and we are well positioned
throughout the economic cycle.
Our business is powered by people who are
experts at what they do, and by combining
their talents with investment in technology
and innovation driven by client need, we
offer something new, compelling and highly
effective. Offering equity in our compensation
makes us unique as a global provider of
integrated legal and business services,
creates an alignment of interests between
all of our Shareholders, and enables a
long-term perspective.
Led by Sir Nigel Knowles, our Executive
Board offers years of experience across
legal and business services. They work
together to inspire a global one team
culture, which maximises new business and
growth opportunities across all our markets.
We have set a number of ambitious new
targets to drive progress across our
business, particularly in relation to climate
action and equality, diversity and inclusion.
These targets build on our established
programmes and the actions we take in
support of the UN Global Compact and
theSustainable Development Goals. We are
now going further to live our purpose and
achieve our goal of being the market leader
on ESG.
For more information, see pages 32 to 49
04 DWF Group plc | Annual Report and Accounts 2022
Strategic report
A unique, modern
andintegrated
serviceplatform
A global business
with multi-jurisdictional
expertise
Predictable, recurring and
diverse revenues sit alongside
a quality M&A track record
Talented and incentivised
experts at the heart of
everything we do
An experienced and
diverse management team
focused on growth
Building on our established
programmes to become the
market leader on ESG
DWF is the only legal and business services
provider leading with the integrated
proposition multinational clients want, and
the only one to own a top tier provider of
alternative legal services, Mindcrest. Our
integrated approach combines premium
legal advice, outsourced and process-led
legal services and associated business
services and products, helping to improve
efficiency while ensuring quality.
With offices and associations located
acrossthe globe, our presence
distinguishesus from other listed legal
services providers and enables us to
support clients on complex cross-border
mandates and secure appointment to
multi-jurisdictional legal panels.
Our growth is underpinned by our
significant recurring revenues from blue
chip clients in our largest markets of
insurance, financial services and real estate
– supported by our strategy of acquiring
complementary businesses with high
recurring revenues and strong cash
generation. Our breadth of services and
sector expertise, together with our global
presence, ensure our revenues are
diversified and we are well positioned
throughout the economic cycle.
Our business is powered by people who are
experts at what they do, and by combining
their talents with investment in technology
and innovation driven by client need, we
offer something new, compelling and highly
effective. Offering equity in our compensation
makes us unique as a global provider of
integrated legal and business services,
creates an alignment of interests between
all of our Shareholders, and enables a
long-term perspective.
Led by Sir Nigel Knowles, our Executive
Board offers years of experience across
legal and business services. They work
together to inspire a global one team
culture, which maximises new business and
growth opportunities across all our markets.
We have set a number of ambitious new
targets to drive progress across our
business, particularly in relation to climate
action and equality, diversity and inclusion.
These targets build on our established
programmes and the actions we take in
support of the UN Global Compact and
theSustainable Development Goals. We are
now going further to live our purpose and
achieve our goal of being the market leader
on ESG.
For more information, see pages 32 to 49
Strategic report Governance Financial statements Other information
DWF Group plc | Annual Report and Accounts 2022 05
Chair’s statement
Dear Shareholder,
I am delighted to welcome you to our Annual
Report and Accounts for the year ended
30 April 2022. We have experienced another
year of global volatility, with the economic
recovery from COVID-19 impacted by
inflationary pressures and the terrible
events in Ukraine. Throughout this period,
DWF has focused on living its purpose as we
seek to deliver positive outcomes with our
colleagues, clients and communities.
This focus on purpose is central to the
culture of our business and a critical reason
why we have performed well. I would like to
offer my thanks, and the thanks of the whole
Board, to all of our colleagues across the
Group for their continued commitment,
dedication and high-quality delivery
throughout the year.
Group performance
In my statement in last year’s Annual Report,
I said that our FY2020/21 performance had
provided the Group with a platform to
deliver sustainable profitable growth. That
has certainly proven the case this year, with
both revenue and statutory profit growth
and a further reduction in lock-up days,
reflecting continued progress in improving
our operational efficiency.
Our like-for-like net revenue growth rate
of7% is strong and sustainable (reported
revenue growth is 4%). We have good
momentum from the final quarter of
FY2021/22 which has continued into this
new financial year and so we look forward
with optimism.
Our new global operating structure, which
came into effect on 1 May 2021, is delivering
the benefits of greater integration and
alignment of our colleagues and services
forthe benefit of our clients. We see the
impact of this with more of our largest
clients interested in our ability to offer
aglobal, Integrated Legal Management
approach. We have secured a number of
important client wins including the UK
central government legal services panel,
NHS Resolution, Allianz and LV=. We also
saw a sharp rise in our Net Promoter Score,
which Sir Nigel talks more about in his Q&A.
Leadership
It has been a year of stability, with no
changes to the Board. I would like to thank
all of our Board members for their time
andfocus throughout this year. I would
particularly like to thank Seema Bains
andMichele Cicchetti for their invaluable
contributions and diversity of thought
andexperience as Partner Directors
ontheBoard.
Culture
Our vision is to create a culture and working
environment where all colleagues can
contribute authentically at their highest
levelto create long-term value aligned to
ourpurpose and vision. This means a
sustainablebusiness where everyone is
included, engaged, valued and equipped
with skills for today and the future.
We know from our colleague engagement
survey, which saw an increase in
respondents as compared with the last
survey, that 89% feel treated with respect
bytheir colleagues and 87% feel they can
bethemselves at work. For the first time,
weasked colleagues if they feel supported
to adopt a hybrid model of working. We were
pleased to find that 83% do feel supported,
which reflects the focus given to this topic as
more and more of our colleagues work in
this way.
Our overall colleague engagement score of 76
has remained consistent despite significant
periods of change over the past two to three
years, both in the business and in the general
global economic and working environment.
We are proud that our main colleague
recognition programme, The Rubie Awards,
saw a record number of submissions this
year. More than 800 colleagues took the
time to nominate one of their peers for an
award, whilst there were around 15,000
instant recognitions through our Achievers
platform. This focus on colleague
recognition is an important element of the
culture we wish to create, ensuring everyone
feels recognised, respected and thanked
properly for their contribution to the overall
success of the Group.
“Our new global operating
structure, which came
into effect on 1 May 2021,
is delivering the benefits
of greater integration
and alignment of our
colleagues and services for
the benefit of our clients.”
Jonathan Bloomer
Chair
06 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Culture is also at the heart of our workplace
strategy. As we prepared for COVID-19
restrictions to ease across our locations, we
consulted regularly with colleagues through
surveys and workshops to ask them how,
where and when they want to work. Their
views and preferences have been reflected
and now more of our colleagues than ever
are benefiting from our hybrid working
model, which continues to develop through
our workplace strategy.
Our role in society
ESG has been one of the core areas of focus
for the Board this year, with Kirsty Rogers,
Group Head of ESG, joining us at our Board
meetings on a regular basis to discuss
progress in the formulation and delivery of
our first global ESG Strategy. I am delighted
that this strategy was published in
December, with Shareholders provided with
an opportunity to hear about it at our
half-year presentation.
Through this strategy, we have committed
toambitious science-based targets to drive
climate action and to stretch targets to
further improve Diversity & Inclusion and
social mobility.
Early actions taken since publication of our
strategy include launching our ESG Client
Policy and establishing our Risk & Sanctions
Committee. We have also introduced D&I
objectives for all people managers, secured
approval of our climate targets from the
Science-Based Targets initiative and
achieved Bronze Standard from the Carbon
Literacy Project.
We have also developed a programme
ofactivities and resources to support
colleagues’ physical and mental health, led
by the Group’s Wellbeing Committee.
Stakeholders across the sector are holding
legal services providers to account for
theiractions on ESG. Employees, clients,
communities and regulators, expect firms
tolead with purpose and to have a clear
strategy for improving performance on ESG
matters. DWF’s own research has found that
companies risk losing clients and talent if
they have weak ESG performance.
ESG is a critical business issue, which is why
we focus on it so closely.
I talk more about our purpose, values and
culture in the Governance introduction on
page 57. You can read more detail on our
priorities and actions in our separate
Sustainability Report and on pages 32 to 49.
Dividend
The Group’s capital allocation policy
prioritises having sufficient capital to fund
ongoing operating requirements, and to
invest in the Group’s long-term growth.
Taking this into account, the Board targets a
pay-out ratio of up to 70% of adjusted profit
after tax. For FY2021/22, the Board has
proposed a final dividend of 3.25 pence per
share, representing an increase of 8% on the
final dividend paid last year and taking the
total dividend for the year to 4.75 pence,
reflecting a pay-out ratio of 44%. This
pay-out ratio reflects a progressive dividend
in absolute terms, but retains a proportion
of FY2021/22 profits to invest in near-term
growth opportunities. If approved by
Shareholders at the forthcoming Annual
General Meeting, the final dividend will be
paid on 7 October 2022 to all Shareholders
on the register on 9 September 2022.
Details of our dividend policy can be found
on pages 25 and 116.
Remuneration Policy
Our Remuneration Policy is being put
beforeShareholders for approval at our
forthcoming Annual General Meeting. The
Remuneration Policy was reviewed by the
Remuneration Committee to ensure it
continues to support delivery of our
business strategy. Following that review,
some minor amendments are proposed in
order to provide greater clarity and to add
limited additional flexibility in specific areas.
Moreinformation is available in the
Remuneration report, which can
befoundon pages 83 to 114.
Annual General Meeting 2022
The Annual General Meeting will be held on
28 September 2022. You can read more on
the arrangements for the AGM on page 174.
Looking ahead
The first two months of trading for
FY2022/23 have been strong, showing
continued momentum in line with Q4 of
FY2021/22. As we progress through
FY2022/23, we will continue to execute
effectively against our strategy to drive
profitable growth through our Integrated
Legal Management proposition. Despite the
prospect of challenging macro-economic
conditions, we remain confident in our
medium-term guidance.
Jonathan Bloomer
Chair
20 July 2022
DWF Group plc | Annual Report and Accounts 2022 07
Strategic report Governance Financial statements Other information
Chief Executive
Officer’s review
Q
How did the Group perform
thisyear?
We are pleased with the progress we
havemade this year. FY2020/21 was a
transformational year for our business
and,in FY2021/22, we have continued to
transform, not least through the successful
implementation of our new global operating
model. We have also embedded our working
capital and client programme initiatives
introduced in the prior year and are
benefiting from the impact of various office
restructures. Together, these actions have
contributed toa year of sustained profitable
growth. Adjusted profit before tax increasing
by 21% against a strong prior year is a result
we are proud of and has been achieved
thanks to margin improvement across each
of our three divisions combined with
ongoing rigour in ourcontrol of costs. This
has also led to a return to statutory profit
before tax for the year of £22.3m
(FY2020/21: loss of £30.6m).
Our performance this year is evidence of
theincreasing maturity of our business,
theappeal of our offering to clients and
ourconfidence in the medium-term targets
wehave outlined to Shareholders. With
like-for-like growth of 7%, we have
demonstrated that we are on track to
deliverthe top-line performance implied
inour guidance. Some of our transactional
practices had outstanding double-digit
growth, but we also have the bedrock of
Insurance in our business which, whilst it
tends to grow at a slower rate, helps to
protect the business from the volatility
thatcan be seen in more transactionally
focused businesses.
Q
How are your clients responding
toDWF’s Integrated Legal
Management approach?
In short, very well. We continue to see an
evolution in the legal services market,
withchanging buyer behaviours and an
increasing demand for alternative legal
services and related business services.
Ourdifferentiated proposition leaves us
really well placed in this regard and we have
seen a growing number of our key clients
taking services from more than one division.
We work with Deep-Insight, a research
company with more than 20 years’
experience with large B2B organisations,
tocarry out regular independent customer
relationship quality assessments, including
calculation of our net promoter score.
We were delighted that our ability to provide
an integrated solution to our clients’
challenges, in more markets than ever, was
afactor in the strong net promoter score of
+63 in our census of more than 500 clients.
This year we commissioned independent
research from Thomson Reuters, the
findings of which support our confidence
inour business model. Their analysis
showsthat the legal services market overall
continues to grow, but with the strongest
growth in the ALSP market. They also found
that traditional law firms are evolving but
are failing to adapt quickly enough to
respond to new competitors, or to
differentiate their services by offering
alternative approaches.
Our highly differentiated proposition and
stellar client base leaves us well placed to
compete effectively against traditional and
new legal services providers. As we talk to
our largest and fastest-growing clients about
the benefits of our proposition, we are
already beginning to capitalise on these
shifting market dynamics.
“Our performance this
year evidences the
increasing maturity of
our business, the appeal
of our offering to clients
and our confidence in the
medium-term targets
we have outlined to
Shareholders.”
Sir Nigel Knowles
Group Chief Executive Officer
08 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Q
How has the ‘The Great Resignation’
andthe ‘war for talent’ affected
DWF this year?
There is no doubt that this has been one of
the biggest issues facing the legal sector and
other professional services over the past
12 months. Similar to other professional
services firms, we have seen attrition levels
increase and it will remain a challenge for
our business in the year ahead, but we are
confident in our balanced approach, which
responds to external market factors whilst
also offering a more progressive working
environment and seeking to capitalise on
our ability to use share incentives aspart of
our reward strategy.
As I commented during this financial year,
offering more and more money to young
people is only a sticking plaster. It is not a
sincere, sustainable or healthy solution for
anyone. Of course we must ensure pay is
competitive, attractive and a fair reward,
butwe believe there must be more than
thisone-dimensional offering.
We have emphasised our purpose-led
approach, delivering positive outcomes
withcolleagues, clients and communities.
We have committed to clear and ambitious
targets on climate, diversity and inclusion
through our ESG strategy, offering all
colleagues the opportunity to get involved
and drive progress. We have delivered a
truehybrid working model through which
our offices are just one environment in
which colleagues and clients work and
collaborate. Shortly after this financial
year-end, we appointed advisors to work
with us on improving the design of our
offices to ensure they are fit for these
newways ofworking.
Furthermore, we have reviewed our reward
offering, including a comprehensive pay
review, share awards to more than 650
colleagues and reducing the vest period for
colleagues to receive such awards in future.
In the UK, we have also significantly
improved our family friendly policies,
demonstrating to existing and potential
colleagues that we put them first when
events in their lives naturally take priority
over their work commitments. Working with
our country leadership we will look to roll
out many of these policies globally
movingforward.
Q
In FY2021/22, you extended your
capabilities through new offices,
associations and M&A in Saudi
Arabia, Portugal, Spain and
Canada.Why those markets,
andwhere next?
We have a client-led approach to our global
expansion. In late FY2019/20 and early
FY2020/21 we conducted a global review
toidentify those markets where we felt we
needed a presence, either through a DWF
office or via a local association. This work
helped us to identify priority markets and
we are pleased with the progress made in
the past 12 months.
We returned to M&A early in FY2021/22
through two bolt-on acquisitions in the
UKand Canada within Connected Services.
We also have a strong pipeline of M&A
opportunities and anticipate having more
toreport in the short to medium term.
Our Saudi business is performing well and has
won a number of instructions, including with
Engineer Holding Group and its subsidiary, the
Saudi Media Company. We are also pleased
with our new association relationships,
including our affiliation with Hauzen LLP in
Hong Kong which we announced in May this
year. We now have association relationships in
eight markets, including our first Connected
Services association with RTS Group in Iberia
and Latin America.
Q
What is the outlook for the
yearahead?
The first two months of trading for
FY2022/23 have been strong, showing
continued momentum in line with Q4 of
FY2021/22. Despite the prospect of
challenging macro-economic conditions,
weremain confident in our medium-term
guidance. This confidence is supported by
the defensive nature of the Group’s revenue
being weighted towards litigation and the
recurring revenues in Insurance, which has
always protected the Group from artificial
peaks and hedges against a slowdown in
transactional activity.
Sir Nigel Knowles
Group Chief Executive Officer
20 July 2022
DWF Group plc | Annual Report and Accounts 2022 09
Strategic report Governance Financial statements Other information
Our market drivers
Market overview
Whilst the global economy remains
fragile, the past year has continued to
see growth in the legal and business
services market. The comparative health
of the sector has supported the drive
towards a consolidating market, with
more firms showing interest in growing
their offering through acquisition.
Similarly, the trend towards clients
spending an increasing proportion of
their legal spend on alternative legal
services has also continued, with that
segment of the market again outstripping
growth overall.
ESG, and especially the G of ESG, was
pushed to the very top of the boardroom
agenda this year as firms had to move
quickly to determine and then articulate
their business response to the war in
Ukraine and how they would engage clients
more broadly. This was underpinned by
acontinuing focus on all aspects of ESG.
DWF research, including a survey of more
than 480 companies, found that 59% had
lost work due to a perception they were
not getting ESG right.
In that same research, companies also
reported difficulty attracting new recruits
if they didn’t have a clear strategy on
ESG. This is just one factor in the
competition for talent within the legal
sector, a new driver we include this year
to reflect the growing challenge facing
our industry and many others.
Market driver Description What this means for our industry Our opportunity Our response
A globally growing and
consolidating market
The legal services industry continues to grow,
with Thomson Reuters tracking global growth
at around 5% each year, whilst sub-sets of
the industry, such as alternative legal
services, are growing much more quickly,
at15% or more. As anticipated in last year’s
Annual Report, we saw a resumption of M&A
activity in the latter half of 2021 and this
trend has gathered pace sofar this year.
Thewar in Ukraine and globalinflationary
pressures are among factors contributing to
market hesitancy, butwe expect further
consolidation in our sector through the
remainder of 2022 and into 2023.
COVID-19 has accelerated the pace of
change in our sector, with more law firms
responding to client demands by offering
digital-first services, improving service
availability through digital technologies or
greater use of Alternative Legal Services
Providers. Those businesses best equipped
to adapt to these changing expectations
should benefit most from a growing market.
They should also be stronger financially and
strategically more attractive, allowing them
to grow more quickly through consolidation.
Our differentiated offering and innovative
approach is helping us to respond effectively
to changing client expectations, as evidenced
by our strong net promoter score. We also
have a clear strategy of the markets in which
we must invest and in which order of priority
to support our global client base.
We have continued to expand our
presence globally through a combination
of recruitment, associations and M&A.
Inthe past year this included new
associations in Portugal and our first
Connected Services association, in Spain.
We also opened a regional headquarters
for business services in Riyadh and our
fourth Spanish office, in Seville.
Alternatives to the
traditional law firm model
Alternative Legal Services Providers (‘ALSP’)
have taken a firm hold in the legal marketplace,
with the ALSP market estimated to be worth
at least $14bn. Furthermore, law firms and
corporate legal departments anticipate
increasing the range of ALSP services they
use in the years ahead. This market, in which
the client is increasingly driving the demand,
is growing at more than 15% each year.
ALSP services will continue to grow to
become a significant market in their own
right, with an increasing number of blue chip
businesses creating ALSP panels alongside
their traditional legal services panels.
However, we are also increasingly seeing
lawfirms take a more collaborative view of
ALSPs, recognising their value and seeking
to develop relationships to enable a scaling
orexpansion of their own services.
We are the only legal and business
servicesprovider to lead with the integrated
proposition that multinational clients want,
and the only one to own a top tier provider
of alternative legal services in Mindcrest.
Whilst the market overall is growing quickly,
the fastest rate of growth isamong ALSPs
formed or owned by law firms as captive
service providers.
We have now owned Mindcrest for more
than two years and it became a division
in its own right in May 2021. We opened
our new facility in Pune with space for
upto 1,000 colleagues. In addition to
delivering services to existing new clients
and being a critical pillar in our Integrated
Legal Management approach, we also
continue to identify and transfer
appropriate work from elsewhere in
ourbusiness to our Mindcrest teams.
ESG rises up the agenda
ESG continues to gain significance in the
sector, with growing expectations from all
stakeholders, including colleagues, clients,
Shareholders, prospective employees and
regulators. DWF’s own research, published
in December 2021, found that due to a
perception of weak ESG performance, 59%
of businesses hadlost work and 40% found
it difficult to recruit. ESG has moved from
being a nice thing to do, to being the right
thing to do,tobecoming a critical focus on
every boardroom agenda.
The trend among blue chip companies of
including ESG considerations as factors
when it comes to choosing their legal and
business services providers is gathering
pace. This is particularly the case in relation
to Diversity & Inclusion performance, but we
are also seeing growing expectations for
firms to have clear targets set on climate,
among other things.
As the only Main Market listed legal and
business services provider, we see a clear
opportunity on ESG. Our levels of disclosure,
boardroom governance and third party
measurement allow us to provide an open
and transparent story of our ESG progress
to colleagues, Shareholders, recruits and
clients. This experience can also enable us
to further strengthen client relationships as
we develop our client-facing proposition and
help us to deliver positive outcomes in our
communities in line with our purpose.
We have a long-established programme of
activities taking account of a wide range of
ESG factors and taking action in support
of the 10 principles of the United Nations
Global Compact. In December 2021, we
went further with the publication of our
first global ESG Strategy, which includes
ambitious science-based targets through
which we commit to reducing carbon
emissions in line with the Paris Agreement,
along with stretched targets to further
improve Diversity & Inclusion.
Competition for talent
Over the past year, the battle to recruit and
retain the best talent has intensified. This is
true not only for the legal services industry,
but professional services more broadly and
other sectors across the economy. Growing
demand for legal services is resulting in
many firms seeking to recruit, which,
combined with factors such as ‘The Great
Resignation’, is resulting in very high levels
ofmovement by professionals within
thesector.
This driver presents a number of challenges
for the industry, including the difficulty of
recruiting and retaining sufficient levels of
talent to deliver the services expected by
clients. Many firms have responded by
sharply raising salaries, especially for
newly-qualified lawyers. This risks creating
unfair expectations on those individuals
andthere is increasing pushback from
clients unwilling to pay higher fees
tocoverthose salaries.
We believe there is an opportunity to offer
adifferentiated proposition to colleagues.
We must ensure pay is competitive,
attractive and fair, but our opportunity is
increating a total reward package that is
more appealing than this one-dimensional
offering. This includes the emphasis we
place on our purpose-led approach, our ESG
Strategy, our commitment to a true hybrid
working model and the ability to achieve a
preferred work-life balance.
We have reviewed our approach to reward
and benefits and made a number of
changes, including launching, in the UK, a
new and improved range of family friendly
benefits. We have also reduced the period
of time in which future share awards will
vest, helping more colleagues become
owners in our business, more quickly. We
have appointed a workplace consultant to
help us make the most of our physical
space within a hybrid working model. And
we have committed to ambitious targets
on climate and Diversity & Inclusion.
10 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Market driver Description What this means for our industry Our opportunity Our response
A globally growing and
consolidating market
The legal services industry continues to grow,
with Thomson Reuters tracking global growth
at around 5% each year, whilst sub-sets of
the industry, such as alternative legal
services, are growing much more quickly,
at15% or more. As anticipated in last year’s
Annual Report, we saw a resumption of M&A
activity in the latter half of 2021 and this
trend has gathered pace sofar this year.
Thewar in Ukraine and globalinflationary
pressures are among factors contributing to
market hesitancy, butwe expect further
consolidation in our sector through the
remainder of 2022 and into 2023.
COVID-19 has accelerated the pace of
change in our sector, with more law firms
responding to client demands by offering
digital-first services, improving service
availability through digital technologies or
greater use of Alternative Legal Services
Providers. Those businesses best equipped
to adapt to these changing expectations
should benefit most from a growing market.
They should also be stronger financially and
strategically more attractive, allowing them
to grow more quickly through consolidation.
Our differentiated offering and innovative
approach is helping us to respond effectively
to changing client expectations, as evidenced
by our strong net promoter score. We also
have a clear strategy of the markets in which
we must invest and in which order of priority
to support our global client base.
We have continued to expand our
presence globally through a combination
of recruitment, associations and M&A.
Inthe past year this included new
associations in Portugal and our first
Connected Services association, in Spain.
We also opened a regional headquarters
for business services in Riyadh and our
fourth Spanish office, in Seville.
Alternatives to the
traditional law firm model
Alternative Legal Services Providers (‘ALSP’)
have taken a firm hold in the legal marketplace,
with the ALSP market estimated to be worth
at least $14bn. Furthermore, law firms and
corporate legal departments anticipate
increasing the range of ALSP services they
use in the years ahead. This market, in which
the client is increasingly driving the demand,
is growing at more than 15% each year.
ALSP services will continue to grow to
become a significant market in their own
right, with an increasing number of blue chip
businesses creating ALSP panels alongside
their traditional legal services panels.
However, we are also increasingly seeing
lawfirms take a more collaborative view of
ALSPs, recognising their value and seeking
to develop relationships to enable a scaling
orexpansion of their own services.
We are the only legal and business
servicesprovider to lead with the integrated
proposition that multinational clients want,
and the only one to own a top tier provider
of alternative legal services in Mindcrest.
Whilst the market overall is growing quickly,
the fastest rate of growth isamong ALSPs
formed or owned by law firms as captive
service providers.
We have now owned Mindcrest for more
than two years and it became a division
in its own right in May 2021. We opened
our new facility in Pune with space for
upto 1,000 colleagues. In addition to
delivering services to existing new clients
and being a critical pillar in our Integrated
Legal Management approach, we also
continue to identify and transfer
appropriate work from elsewhere in
ourbusiness to our Mindcrest teams.
ESG rises up the agenda
ESG continues to gain significance in the
sector, with growing expectations from all
stakeholders, including colleagues, clients,
Shareholders, prospective employees and
regulators. DWF’s own research, published
in December 2021, found that due to a
perception of weak ESG performance, 59%
of businesses hadlost work and 40% found
it difficult to recruit. ESG has moved from
being a nice thing to do, to being the right
thing to do,tobecoming a critical focus on
every boardroom agenda.
The trend among blue chip companies of
including ESG considerations as factors
when it comes to choosing their legal and
business services providers is gathering
pace. This is particularly the case in relation
to Diversity & Inclusion performance, but we
are also seeing growing expectations for
firms to have clear targets set on climate,
among other things.
As the only Main Market listed legal and
business services provider, we see a clear
opportunity on ESG. Our levels of disclosure,
boardroom governance and third party
measurement allow us to provide an open
and transparent story of our ESG progress
to colleagues, Shareholders, recruits and
clients. This experience can also enable us
to further strengthen client relationships as
we develop our client-facing proposition and
help us to deliver positive outcomes in our
communities in line with our purpose.
We have a long-established programme of
activities taking account of a wide range of
ESG factors and taking action in support
of the 10 principles of the United Nations
Global Compact. In December 2021, we
went further with the publication of our
first global ESG Strategy, which includes
ambitious science-based targets through
which we commit to reducing carbon
emissions in line with the Paris Agreement,
along with stretched targets to further
improve Diversity & Inclusion.
Competition for talent
Over the past year, the battle to recruit and
retain the best talent has intensified. This is
true not only for the legal services industry,
but professional services more broadly and
other sectors across the economy. Growing
demand for legal services is resulting in
many firms seeking to recruit, which,
combined with factors such as ‘The Great
Resignation’, is resulting in very high levels
ofmovement by professionals within
thesector.
This driver presents a number of challenges
for the industry, including the difficulty of
recruiting and retaining sufficient levels of
talent to deliver the services expected by
clients. Many firms have responded by
sharply raising salaries, especially for
newly-qualified lawyers. This risks creating
unfair expectations on those individuals
andthere is increasing pushback from
clients unwilling to pay higher fees
tocoverthose salaries.
We believe there is an opportunity to offer
adifferentiated proposition to colleagues.
We must ensure pay is competitive,
attractive and fair, but our opportunity is
increating a total reward package that is
more appealing than this one-dimensional
offering. This includes the emphasis we
place on our purpose-led approach, our ESG
Strategy, our commitment to a true hybrid
working model and the ability to achieve a
preferred work-life balance.
We have reviewed our approach to reward
and benefits and made a number of
changes, including launching, in the UK, a
new and improved range of family friendly
benefits. We have also reduced the period
of time in which future share awards will
vest, helping more colleagues become
owners in our business, more quickly. We
have appointed a workplace consultant to
help us make the most of our physical
space within a hybrid working model. And
we have committed to ambitious targets
on climate and Diversity & Inclusion.
DWF Group plc | Annual Report and Accounts 2022 11
Strategic report Governance Financial statements Other information
Our business model
Our colleagues
Our clients
Our communities
Our values
Our knowledge
Our brand
Our systems
Our global footprint
Legal Advisory
Premium legal advice and excellent client
service. Our teams bring commercial
intelligence and relevant industry
experience.
Mindcrest
Outsourced and process-led alternative
legal service offering, designed to
standardise, systematise, scale and optimise
legal workflows for areas such as contract
management and ensuring regulatory
obligations are met for our customers.
Connected Services
Our range of products and business
services that enhance and complement our
legal offering.
Market drivers
• A globally growing and
consolidatingmarket
• Alternatives to the traditional
lawfirmmodel
• ESG rises up the agenda
• Competition for talent
Our stakeholders
• Colleagues
• Clients
• Suppliers
• Debt providers
• Shareholders
• Communities
• Regulators
• Policymakers
• Insurers
• Landlords
Our inputs Our main activities Impacted by
Our values
Always aim higher
We exceed the expectations
of our colleagues and our
clients in everything we do.
Be better together
We listen, recognise and
support each other to
protect a diverse and
inclusive culture and
sustain our business,
clients and communities.
Disrupt to progress
We embrace change and
new ways of working to
enhance our performance
and reputation.
Keep all promises
By keeping the promises we
make to our colleagues and
our clients, we build trust,
loyalty and credibility.
Attend to details
We achieve the best results
to complex problems by
focusing on simple and
effective solutions.
12 DWF Group plc | Annual Report and Accounts 2022
Strategic report
O
u
r
a
p
p
r
o
a
c
h
W
h
a
t
w
e
d
e
l
i
v
e
r
f
o
r
o
u
r
c
l
i
e
n
t
s
Our approach
helps clients achieve
so much more
Our differentiated position
Our ability to seamlessly combine any number
of our offerings to deliver bespoke solutions
for our clients is our key differentiator.
5
64
3 7
82
1 9
1. Diverse multidisciplinary teams
that think differently
We are a provider of integrated legal and
business services with colleagues drawn
from many different professions,
backgrounds and skillsets.
2. Deep market expertise and
cross-sector insight
With expertise in eight primary sectors, and
offices and associations located across the
globe, we deliver commercial insights on the
challenges that our clients face.
3. Tailored technology
We offer methodologies and solutions,
including the use of automation and artificial
intelligence (‘AI’), that complement and are
compatible with clients’ in-house technology.
4. Advisory expertise and
execution excellence
We have years of experience working
side-by-side with our blue chip clients to
help them execute their plans and deliver
ontheir strategies.
5. Transformation
We assist clients to transform how their
legal function supports their business. We
cover the full spectrum of transformation
from ways of working to a fully outsourced
managed services delivery model.
6. Risk transfer
We reduce client risk by providing services
on an outsourced basis against clear and
agreed budgets.
7. Continuous improvement
Our data-led improvement of operations
offers scalability and flexibility, future-
proofing client legal teams.
8. Cost efficiencies
Our approach creates efficiencies and offers
sustainable cost reduction.
9. Giving time back
Combined, our approach allows our clients
to focus their time and skills on the strategically
important activities within their functions.
How we create value Outcomes
Delivering positive outcomes with our
colleagues, clients and communities
Our colleagues
As a progressive, innovative global
business, our colleagues are at the
centreof everything we do. We provide
arewarding and fulfilling work
environment, with routes to develop
andthe freedom to grow.
76
Engagement score (FY2020/21: 76)
Our clients
Delivered through our global teams
across eight sectors, our Integrated
LegalManagement approach delivers
greater efficiency, price certainty and
transparency for our clients without
compromising on quality or service.
+63
Net Promoter score (FY2020/21: +49)
Our communities
We are committed to making a positive
impact in the communities in which we
operate.
£317,725
donated by DWF Foundation
(FY2020/21: £203,515)
Our Shareholders
By delivering positive outcomes with our
colleagues, clients and communities, we
ultimately drive long-term financial value
to our Shareholders through consistent
revenue earnings growth together with
the payment of dividends in accordance
with our progressive dividend policy.
4.75p*
per share paid to Shareholders through
dividends (FY2020/21: 4.5p per share)
*FY2021/22 subject to AGM approval
Our business model, delivering
positive outcomes
DWF Group plc | Annual Report and Accounts 2022 13
Strategic report Governance Financial statements Other information
Our long-term profitable
growthstrategy
Through our long-term profitable growth
strategy, we pursue sustainable organic and
profitable growth, inorganic growth through
M&A and the establishment of new services,
and margin expansion through a focus on
operational excellence and cost management.
Together, these priorities enable us to fulfil our
purpose of delivering positive outcomes with
clients, colleagues and communities.
14 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Organic growth Inorganic growth Margin expansion
Objectives
We deliver organic growth through the
continual development of our client
offerings, especially in relation to our
Integrated Legal Management approach.
Weuse our client programmes to build
relationships and seek to extend them into
more divisions and practice areas. We
develop our services through partner lateral
hires and by extending our global reach
through association agreements. We
provide engaging and rewarding careers
andincentivise colleagues to succeed in
alignment with our strategy.
Objectives
Inorganic growth is pursued primarily as
aconsequence of our strategy to deliver
theright services for our clients in the
rightlocations. We pursue M&A with the
purpose of delivering positive outcomes
forour clients.
Objectives
We seek to improve the profitability of our
business through a focus on operational
excellence and cost management
Progress
• Group reported growth of 4%, with
like-for-like growth of 7%
• 24 partner lateral hires
• New association agreements in Iberia and
Latin America, a new regional
headquarters for business services in
Riyadh and a fourth office in Spain
• Engagement survey score of 76
Progress
• Acquisitions of Zing365 and Barnescraig &
Associates, further developing our
Connected Services offering
• A strong pipeline of M&A opportunities
Progress
• Gross margin improvement in every
division
• A reduction in our cost-to-income ratio
from 39.2% to 38.4%
• Focus on pricing
• Property strategy
• Mindcrest work transition
KPIs
• Revenue growth
• Net revenue growth
• Like-for-like / organic net revenue growth
• Net revenue per partner
• Net promoter score
• Engagement survey score
KPIs
• Revenue growth
• Net revenue growth
• Net promoter score
KPIs
• Gross profit margin
• Cost to income ratio
• Reported profit before tax
• Adjusted profit before tax / adjusted
profit before tax margin %
Underpinned by our strong commitment to our sustainability strategy
We published our first global ESG Strategy, with new targets on climate and Diversity &
Inclusion. See pages 32 to 49 for more detail.
DWF Group plc | Annual Report and Accounts 2022 15
Strategic report Governance Financial statements Other information
Our purpose is
to deliver positive
outcomes with our
colleagues, clients
and communities.
Our purpose
Strategic report
16 DWF Group plc | Annual Report and Accounts 2022
Our purpose in action
Positive outcomes –
Colleagues
We strive to create a positive and inclusive culture,
through which all colleagues can be themselves
atwork and find an environment that allows them
toachieve their best performance. A key element
ofthis is recognising and being responsive to
colleaguewellbeing.
What we did
Wellbeing has long been an area of focus
within our people strategy and desired
culture. Over the past two years, this focus
has increased significantly, especially due
tothe COVID-19 pandemic, which created
physical distance between colleagues. Over
this period, we have brought wellbeing to
the fore of our people proposition and
ensured that all colleagues know that they
have support available, no matter what they
are going through. This includes, but is not
limited to the following actions:
• Creating a Wellbeing Committee in July
2020 to ensure Board level oversight of
our wellbeing activities and ensure
support is provided to colleagues across
all aspects of wellbeing, from physical to
mental and lifestyle to work environment.
• Promoting our Employee Assistance
Programme to ensure all colleagues
globally are aware of the access to
confidential support at any time and
uptosix free sessions of counselling.
• Established wellbeing champions,
colleagues who are passionate about
advocating wellbeing, are empowered
topromote our initiatives and drive
engagement across the business.
Wenowhave 15 wellbeing champions
insix locations.
• Wellbeing Wednesday provided colleagues
with resources, guides, hints and tips for
how to manage personal wellbeing and
how to support colleagues on a wide
range of subjects including anxiety, health,
money management and digital overload.
All Wellbeing Wednesday updates are
archived and available on the Group
intranet to access at all times.
• We have trained Mental Health
FirstAiders to help colleagues better
understand and more easily recognise the
signs of someone struggling with mental
health. This allows earlier interventions
and gets faster support to colleagues who
need it. We are now developing a mental
health and wellbeing course for all leaders
and line managers.
• Our A Clear Outlook campaign, which ran
throughout January, emphasised a need
for all colleagues to reduce email and
meetings with an aim of freeing
colleagues’ inboxes, diaries and minds.
• We recently launched Gympass as an
available benefit to all colleagues.
Gympass provides cost-effective access
toa range of gyms, fitness classes and
health resources – including a free
planprovided by DWF which gives all
colleagues access to wellbeing apps
andonline classes.
Why this matters
We want colleagues to feel that their
wellbeing is supported and that they
have the time needed to focus on it.
Coupled with our ongoing commitment
to the principles of the Mindful Business
Charter, itis the right thing to do because
it supports colleagues’ physical and
mental health. It is also the right thing to
do for our business because it is likely to
strengthen loyalty, increase alignment
between personal and business goals
and reduce the number of days lost
toillness.
The positive outcome
In our most recent engagement survey,
78% of colleagues reported that they
have the support needed to focus on
their personal wellbeing (+2 compared
with last survey), 89% said they are
treated with dignity and respect by their
colleagues (+1), and 87% feel they can
be themselves at work (+1).
Our Achievers platform saw around
15,000 instant recognitions made by
colleagues to recognise their peers
through FY2021/22, including nearly
200for wellbeing-relatedsupport
DWF Group plc | Annual Report and Accounts 2022 17
Strategic report Governance Financial statements Other information
Our purpose in action continued
Positive outcomes –
Clients
Through our Integrated Legal Management approach,
combined with the quality and dedication of our
colleagues we deliver positive outcomes with our
clients every day.
What we did
Whilst the positive outcomes we deliver
withour clients derive predominantly
fromthe services we provide, we also seek
opportunities to work together to develop
ideas and solutions to tackle issues and
challenges that are important to our
colleagues, clients and communities
morebroadly.
Since March 2021, DWF and Enterprise
Rent-A-Car have collaborated extensively on
a series of events and initiatives designed to
raise education and awareness within both
organisations and our respective sectors,
and to provide a platform to engage diverse
role models.
At the start of our relationship we consulted
with our diversity networks to ask them what
they wanted to hear about. Through this
process we identified a number of key themes
and developed our programme in response.
Our joint events have included celebrations
of International Women’s Day, Pride Month
and International Day of Persons with
Disabilities.
In these sessions, colleagues from across
both businesses have shared their views
and experiences in panel discussions.
We also shared educational content and
practical advice for impacted individuals
andallies.
Events are advertised across both
organisations and through our external
websites and social media channels to offer
others in our sectors the chance to joinand
contribute to the discussion.
Why this matters
Both DWF and Enterprise Rent-A-Car are
committed to creating workplace cultures
that support diversity and inclusion.
As part of DWF’s ESG strategy we have
published several stretched targets to
further improve diversity and inclusion
within our business.
One element towards achieving those
targets is to ensure colleagues at all
levels are supported, have strong
networks and have visible role models.
The positive outcome
Attendance, interaction and feedback
from these events has been very
positive. For International Women’s Day
2022, we jointly organised an interactive
session on Imposterism which attracted
nearly 200 attendees.
The event saw great contributions
including attendees choosing to make
apledge on how they will tackle imposter
syndrome in their career, or their
organisation.
The strong relationships we have built
with Enterprise Rent-A-Car through this
initiative also led to the establishment of
a Peer-to-Peer mentoring initiative for
women across both businesses.
This initiative gave participants the
opportunity to build their network
andshare career development ideas
andchallenges.
18 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Positive outcomes –
Communities
We are committed to making a positive impact in the
communities in which we operate. The DWF Foundation,
anindependent charity founded by DWF, is at the heart
ofthese efforts. It has the sole aim of providing funds,
resources and mentoring support to help individuals,
groupsand communities to achieve their full potential.
What we did
In the last financial year, the DWF
Foundation awarded more than 100 grants
worth in excess of £315,000.
These grants supported charities seeking to
create positive outcomes for people facing
challenging situations.
The Foundation has identified six themes
within which it tries to make a difference:
health and wellbeing, response to COVID-19,
education, employability, environment and
sustainability, and homelessness.
It also has flexibility to make awards
designed to support emergency responses
to global events.
Its work is global in nature and in the past
12 months it has supported charities in
locations ranging from Australia to India,
and the US to the UK.
The Foundation’s work also creates a strong
engagement opportunity for our colleagues,
with a range of fundraising events and
volunteering opportunities taking place
throughout the year.
Most notably, in the past 12 months,
colleagues across our business came together
to raise more than £100,000 in support of the
humanitarian response in Ukraine.
These funds are now being distributed by the
DWF Foundation, including to a number of
Ukrainian and Polish charities providing the
most immediate support to people affected.
This fundraising activity is supplemented
bydividend income, following a donation of
shares to the DWF Foundation at the time
ofour IPO.
In the last financial year, the DWF
Foundation received more than £65,000
through its dividend payments, which
supported its grant giving.
This source of funding has been especially
important over the past 12–24 months,
when many fundraising activities were
impacted by COVID 19.
Why this matters
As a global legal business, we must
actresponsibly: how we do business
isjust as important as what we do.
Thisincludes the impact we make and
the outcomes we deliver within the
communities in which we operate.
Through the DWF Foundation, we are
able to support those in our communities
who need the most help. The Foundation
is now more than seven years old and
has provided support to no fewer than
400 different charities globally.
The positive outcome
With so many grants awarded, we have lots
of examples of where the DWF Foundation
funding has made a difference.
Take CPotential, a charity in London that
works with babies, children and young
people who have movement disorders.
Ithas received two grants from the DWF
Foundation which have been used to
help purchase a range of equipment for
its new physiotherapy service.
Or the Jagriti School for blind girls in
Pune, India, which the Foundation and
our local Mindcrest team have supported
through regular grants to buy much
needed supplies and groceries.
DWF Group plc | Annual Report and Accounts 2022 19
Strategic report Governance Financial statements Other information
Key performance indicators
Financial KPIs
Revenue growth
+3.8%
Net revenue growth
+3.6%
FY22
FY21
FY20
+3.8%
+12.4%
+12.4%
FY22
FY21
FY20
+3.6%
+13.7%
+10.9%
Definition: The change in statutory revenue
achieved year-on-year
Definition: The change in net revenue
(revenue less recoverable expenses)
achieved year-on-year
Gross profit margin
51.7%
Cost to income ratio
38.4%
Profit/(loss) before tax
£22.3m
FY22
FY21
FY20
+51.7%
+50.8%
+47.9%
FY22
FY21
FY20
+38.4%
+39.2%
+41.4%
FY22
FY21
FY20
£22.3m
£(30.6)m
£18.2m
Definition: Gross profit divided by
netrevenue
Definition: See glossary to the
financialstatements
Diluted EPS
6.5p
Adjusted diluted EPS
10.7p
Net revenue per partner
£975k
FY22
FY21
FY20
6.5p
(11.9)p
3.7p
FY22
FY21
FY20
10.7p
7.4p
3.0p
FY22
FY21
FY20
£975k
£924k
£784k
Definition: See glossary to the
financialstatements
Definition: Net revenue divided by the
totalnumber of partners in the Group
Free cash flow
£12.9m
Net debt
£71.8m
FY22
FY21
FY20
£12.9m
£32.1m
£(6.6)m
FY22
FY21
FY20
£71.8m
£60.2m
£64.9m
Definition: See glossary to the
financialstatements
Definition: See glossary to the
financialstatements
20 DWF Group plc | Annual Report and Accounts 2022
Strategic report
R
R
Like-for-like revenue growth
+7%
Non-financial KPIs
Net promoter score
63
FY22
FY21
FY20
+7%
+8%
+2%
FY22
FY21
FY20
63
49
47
Definition: See glossary to the financial
statements
Definition: The proportion of clients
surveyed who rank as ‘promoters’
(scoringDWF a 9 or 10), minus the
proportion of clients who rank as a
‘detractors’ (scoring DWF a 1-6)
Adjusted profit before tax
£41.4m
Engagement survey score
76
% Executive Board roles held by women
36%
FY22
FY21
FY20
£41.4m
£34.2m
£15.2m
FY22
FY21
FY20
76
76
76
FY22
FY21
FY20
36%
40%
25%
Definition: See glossary to the
financialstatements
Definition: The aggregate score taken
fromthree key engagement statements in
ourinternal Pulse Survey
Lock-up days
179
% senior leadership positions
heldbywomen
29%
% BAME representation
in senior leadership positions
4%
FY22
FY21
FY20
179
184
206
FY22
FY21
FY20
29%
29%
28%
FY22
FY21
FY20
4%
4%
3%
Definition: See glossary to the
financialstatements
Definition: The proportion of roles in
careerbands 1 to 3a held by women
Definition: BAME representation
declaredin career bands 1 to 3a
R
 Linked to Directors’ remuneration
DWF Group plc | Annual Report and Accounts 2022 21
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R
R R
Financial review
In FY2021/22, the German operations have
been scaled-back as a result of the ongoing
focus on profitable growth. The Berlin office
has been closed and a small number of people
have departed the business in other locations
within Germany. This is consistent with similar
actions taken elsewhere in the past two years,
most notably in Dubai and Australia, which
have seen significantly improved performance
since restructuring. Costs associated with the
scale-back of German operations have been
offset by areversal of a provision relating to the
Australia scale-back as vacant properties have
been subsequently sublet. This has resulted in
a credit of £0.2m in the year foroffice closures
and scale-backs which hasbeen recognised as
non-underlying administrative expenses in the
incomestatement.
The Group has returned to M&A in the year
with the acquisition of Zing 356 Holdings
Limited (“Zing”) and Barnescraig & Associates
(“BCA”) which have been complementary
acquisitions for the Connected division. The
Group also hasa healthy pipeline of M&A
targets as we enter FY2022/23. As wellas
thereturnto M&A, the Group continues to
growinternationally through anexpansion
ofits associations, in particular Al-Ohaly &
Partners in the Kingdom of Saudi Arabia,
Nobre Guedes & Associados (NGA) in
Portugal and RTS Group(RTS) based in
Spain.Since the year end the Group has
alsoannounced a new association with
Hauzen LLP based in Hong Kong.
The Group has produced a statutory profit
before tax of £22m (FY2020/21: loss before tax
of £31m) with the prior year loss being driven
by significant adjusting items totalling £64.8m,
the majority of which related toexpenses which
formed part of the purchase price of the RCD
acquisition. Onanadjusted basis, the Group
achieved adjusted profit before tax of £41m
(FY2020/21: adjusted profit before tax of
£34m), an increase of 21% on the prior year.
As well as achieving strong profitable growth
inthe year, the Group has also continued to
strengthen its balance sheet withnet assets
increasing by £16m, which includes a £32m
increase in net current assets. Net debt has
increased by £12m to£72m (FY2020/21: £60m)
but this is principally down to the payment of
COVID-19 VAT deferrals and acquisition related
payments totalling £14m. The remaining
deferred liabilities on the balance sheet are just
£0.9m, compared to £28m at the end ofFY20
Lock-up days have again reduced due to
ongoing operational initiatives and stand
at179 days, a 5 day reduction from April 21.
The Board is pleased to see further progress
towards medium term targets which were
communicated in July 21. The Group continues
to focus on profitable growth, which moves
the adjusted PBT into benchmark range with
the remaining listed legal business and some
comparators in thebroader professional
services space. Working capital has also
improved with a further reduction in lock-up
days. Whilst there are widely reported upward
pressures on staff costs in the sector and
broader inflationary pressures, the Group
believes itis well placed to retain key talent
and to mitigate other cost pressures through
specific cost reduction initiatives such as the
premises strategy.
Revenue
Revenue for the year is £416m
(FY2020/21: £401m) representing growth of 4%.
However, the Group focusses revenue
measurement on net revenue as revenue
isdistorted by the level of recoverable
expenses incurred on delivery of client matters
where such expenses do not necessarily reflect
the activity levels of the projects or the business.
Net revenue for the Group was £350m
(FY2020/21: £338m) representing like for like
growth of 7% which excludes the impact of
the acquisitions of Zing and BCA as well as
the scale back of operations in Australia and
Germany. DWF’s biggest market, the UK, has
seen net revenue growth of 7%.
Divisional performance
Effective from 1 May 2021, divisional
performance has been reported to the PLC
Board under the new global operating
structure that comprises the three divisions
of Legal Advisory, Connected Services and
Mindcrest. The implementation of this new
structure has resulted in greater integration
and alignment of our people and our services
and supports the continued execution of the
Group’s strategy.
Highlights of the performance by division
are set out below:
Legal Advisory (83% of Group Net
revenue/85% of Group Gross profit)
£m
FY2021/
22
FY2020/
21
Change
(%)
Revenue 355.1 345.6 +2.8%
Net revenue 292.0 285.3 +2.3%
Direct costs (138.7) (137.5) +0.9%
Gross profit 153.2 147.8 +3.6%
Gross margin
(%)/ppts 52.5% 51.8%
+0.7
ppts
A record year of profitable growth
The Group has delivered another year of record
results with FY2021/22 being the first full year
under new leadership. These results include
reported revenue growth of 4% to £416m (PY:
£401m), net revenue growth of 4%to £350m
(PY: 338m), a 21% increase in adjusted profit
before tax to £41m (PY: £34m) and a return
tostatutory profit before tax of £22m (PY: loss
of £31m).
Diluted EPS has increased to 6.5p (PY: loss per
share of 11.9p) and Adjusted Diluted EPS has
increased to 10.7p (PY: 7.4p), a 45% increase
and a record since IPO. The Group has also
reported lock-up days of 179 (PY: 184 days),
thelowest level for six years even with revenue
growth of 88% over the same time period. The
Board has declared a final dividend of 3.25p
per share, taking the total dividend for the year
to 4.75p (PY: 4.5p). This reflects a progressive
dividend in absolute terms, but retains a
proportion of FY2021/22 profits to invest in
near-term growth opportunities.
Strong activity levels have led to like for like
1
net revenue growth of 7%, despite having
experienced high levels of COVID related
absence in Q4 as UK COVID cases peaked
dueto the spread of the Omicron variant.
Gross margin has increased by 0.9% to
51.7%despite ongoing inflationary pressures
including the continued investment into
reward through the annual salary and benefits
review. The Group’s cost-to-income ratio has
improved to 38.4% from 39.2% in FY2020/21.
This is another record for the Group since IPO
and is a result of the continued focus on cost
control and operating discipline under the
new leadership team.
1 Like for like net revenue growth excludes the
impact of acquisitions in the current and
precedingyear as well as the impact of scale-
backsand closures
22 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Newly formed in FY2021/22, the Legal
Advisory division has delivered like-for-like
net revenue growth of 7%. This growth has
been accomplished whilst holding overall
direct costs in line with prior year despite
inflationary cost pressure, resulting in a
1percentage point improvement in gross
margin to 53%.
Within Legal Advisory, the Insurance
business has delivered growth of 3%. This
has arisen from new contracts secured
(forexample with LV = Allianz and NHS
Resolution), continued expansion of our
specialist London Market practice and
international presence, and an increase
inclaim volumes following the easing of
COVID-related restrictions. This has offset
the slower post-pandemic recovery of
claimsvolumes in other isolated sectors
ofInsurance and the non-recurrence of
one-off additional COVID-related work in
FY2020/21 that arose from the FCA business
interruption litigation.
UK Corporate, Finance and Restructuring,
and Real Estate businesses have collectively
grown by 17%, with a strong rebound in
transactional areas following the easing
oflockdown and conclusion of Brexit.
The Dispute Resolution practice area has
continued to attract a healthy pipeline of work
during FY2021/22, which has resulted in like
for like growth of 8% across all geographies.
A number of international locations, across
Europe and the Middle East, have seen
particularly positive results (including
revenue growth of 41% in Italy and 9% in
Spain), with increased collaboration as a
result of the revised Group structure
enhancing the division’s performance.
A year on from establishing the new
divisional structure, the outlook for
FY2022/23 is positive, with a strong pipeline
of work in place and greater efficiencies
being delivered through innovative ways
ofworking, both between practice areas
andwith our clients. Plans are already
underway to continue the development of
key locations (in the UK and further afield)
and expand into new locations which,
alongside continued investment in our
people, will support future growth.
Connected Services (10% of Group Net
revenue/8% of Group Gross profit)
£m
FY2021/
22
FY2020/
21
Change
(%)
Revenue 34.2 28.8 +18.9%
Net revenue 33.9 28.4 +19.1%
Direct costs (18.8) (16.2) +16.0%
Gross profit 15.0 12.2 +23.2%
Gross margin
(%)/ppts 44.4% 42.9%
+1.5
ppts
The Group’s Connected Services division
continues to deliver strong profitable revenue
growth delivering net revenue growth of 19%
to £33.9m, or 10% on a like for like basis
whichexcludes the growth brought by the
acquisitions of BCA and Zing365 in May 2021.
The cultural integration of both acquisitions
has been successful and they are both
working closely with colleagues across
Connected Services and the rest of the Group
to share clients and enhance their pipeline.
We are particularly pleased that all service
lines have grown compared to the prior year.
Our Claims Management and Adjusting
business (with presence in Australia, Canada,
France, Ireland, Italy, UK and USA) has grown
by 32%, or 17% on a like-for-like basis, due to
significant new client wins in the UK and the
US, an increase in claims volumes as COVID-19
restrictions eased andthe continued receipt
of business interruption claims. This is despite
the disruption in Australia due to extended
local lockdowns.
The launch of the Global Entity Management
proposition has been a success, with seven
new clients secured and an operating
system developed in collaboration with our
software team ‘360’. Investment in a sales
and marketing team, with an initial focus on
360, has resulted in net revenue growth of
19% and the development of a strong
pipeline as we enter the new financial year.
One of our larger businesses, Ges-Start
(DWF Spain’s Connected Service which
offers Accounting, Tax and Labour
consulting), has grown net revenue by 16%
and gross profit margin by 6 percentage
points due to their recurring client base
being complemented by anumber of large
new projects and a focus on cost control.
As the division continues to mature,
profitability has improved with gross profit
margin increasing to 44%, 2 percentage
points ahead of the prior year. Although net
revenue has grown by 19%, direct costs
have only increased by 16% as the division
invests in technology solutions to deliver
work more efficiently and effectively.
Connected Services also plays an ever
increasing role in providing integrated
solutions for clients and provided record
feereferrals to Legal Advisory in excess of
£8m (PY: £7m), as the benefits of the new
operating structure start to be realised.
Management continues to look to the future
with confidence, assisted by a strong pipeline
ofactivity across all businesses and a focus on
exploring more innovative ways to provide
integrated solutions to meet our clients’ needs.
Mindcrest (7% of Group Net revenue/7%
of Group Gross profit)
£m
FY2021
/22
FY2020/
21
Change
(%)
Revenue 26.8 26.6 +0.6%
Net revenue 24.4 24.4 +0.2%
Direct costs (11.8) (12.6) -6.8%
Gross profit 12.7 11.7 +7.8%
Gross margin
(%)/ppts 51.8% 48.2%
+3.6
ppts
COVID-19 challenges combined with
Insurance Law Reform hampered US
external sales and UK Motor Volume
growthrespectively (the two largest Practice
Areas within the Division). However, this
disappointing performance was offset by
significant growth (240%) of eDiscovery and
much improved integration growth (57%)
with Group key accounts, to deliver revenue
consistent with the prior year.
COVID-19 has also impacted the speed of
transition of certain legal workflows and legal
support from the Legal Advisory division into
Mindcrest. The stabilisation of COVID-19 in
India will see a return to office working with
various Group and Divisional initiatives
underway to maximise the opportunity
oftransitioning work and optimising and
standardising certain legalworkflows.
Enhancing US presence, deleveraging
keyclient concentration, investment into
Legal Consulting and continued promotion
of Service Transformation (which will
mitigate current inflationary pressures)
arekey strategic objectives for FY2022/23.
UK macro-economic inflation also provides
growth opportunities to capitalise on
market-leading propositions in UK volume
litigation (Lender Services and Recoveries)
asclients seek to control costs.
DWF Group plc | Annual Report and Accounts 2022 23
Strategic report Governance Financial statements Other information
Financial review continued
It is with thisbackdrop that management
can look forward to an improved year for
thedivisionin FY2022/23 focussed on
unlockingsignificant benefits for both the
division and the wider Group through this
differentiating offering.
Direct costs
Direct costs, which reflect the salary costs
offee-earning partners and staff, have
increased by £3m, or 2%, to £169m. The
acquisitions of Zing and BCA accounted for
£1m of year-on-year cost increases, so the
underlying trend on direct costs was an
increase of £2m. This increase reflects a
combination of tight cost and recruitment
control combined with investment in salary
costs and selective hiring into growth areas
of the business.
Gross profit
The combination of strong net revenue
growthand strict control of costs has delivered
a gross profit of £181m, representing a £9m,
or5%, increase vs. FY2020/21. This reflects
agross margin % ofnet revenue of 51.7%
(FY2020/21: 50.8%). This improvement reflects
uplifts across all divisions which is particularly
pleasing given higher than expected absence
rates in the second half of the year driven by
COVID-19 aswell as ongoing cost pressures.
Administrative expenses
Administrative expenses (including
impairment) have decreased compared to
theprevious year, from £197m in FY2020/21
to£153m in FY2021/22. On an underlying
basis, excluding adjusting items,
administrative expenses for FY2021/22
are£134m (FY2020/21: £133m), which
isconsistent with the prior year after
considering the acquisitions of Zing and
BCAcontributed additional costs of over £1m.
This results in a cost-to-income ratio of 38.4%,
a reduction of 0.8% from FY2020/21.
Improved cost control is a key component
ofthe Group’s strategy ensuring the Group’s
resources are deployed in areas which
support sustainable profitable growth.
Thecontrol of underlying administrative
expenses is therefore pleasing given the
growth in the business in the year and
against a backdrop of inflationary pressures
on salaries and increases in energy costs.
Inaddition, fewer COVID-19 restrictions have
resulted in increases in travel and marketing
costs as our colleagues spend more time
working collaboratively with each other,
andwith our current and prospective
clients. Whilst travel and marketing costs
have increased they are still significantly
below pre-COVID-19 levels, partly due to
therestrictions that were in place during
theyear but also as we have taken the
opportunity to closely review spend in
allareas of administrative expenses.
Our cost base continues to be an area of focus
for FY23, with the ongoing execution of our
premises strategy expected to generate
savings as we right-size our office space for
our established hybrid working model. An
estimated 1/3rd of the Group’s global office
space is considered as potentially surplus to
requirements post-COVID which represents a
c£7m recurring annualised saving opportunity
in the medium term. Travel costs will be a
particular focus area given that COVID-19
restrictions have eased but also to ensure that
our colleagues are travelling with purpose in
order to meet our ambitious environmental
commitments. Other reductions in our
existing overhead base are underway, to allow
additional capital to be redeployed in areas of
the business which will contribute to greater
profitable growth.
Adjusting items have decreased significantly
to £19m in FY2021/22 from £65m in
FY2020/21. The table below provides more
details with full analysis contained in note 2
to the financial statements:
2022
£’000
2021
£’000
Office closures and
scale-backs (238) 14,898
Acquisition-related
expenses 9,564 20,743
DWF RCD modification
impact – 13,796
Change of CEO – 1,011
Impact of COVID-19 – 1,011
Other share-based
payment expenses 9,609 13,333
Refinancing costs 146 –
Adjusting items 19,081 64,792
Adjusting items in FY2021/22 can be
summarised as:
1. Office closures and scale-backs which
relates to the scale-back of operations in
Australia, which began in FY21, and the
scale-back of operations in Germany
which commenced at the end of FY22.
Theamounts reflect a charge for working
capital, impairment of assets and people
costs in Germany, offset by the reversal of
a provision in Australia as a sublease has
been entered into during the year;
2. Acquisition related expenses principally
relating to amortisation and impairment
ofintangibles recognised on acquisition
aswell as acquisition related remuneration
expense from the Mindcrest acquisition,
payments of which ceased in February 2022.
3. Share based payment expenses reflecting
grants from the Employee Benefit Trust
which is a pre-funded trust established
onIPO; and,
4. Non-recurring costs relating to the
refinancing of the Group’s RCF facility.
Net finance expense & interest payable
onleases
Net finance expenses relating to bank
charges and borrowings were £3.7m
(FY2020/21: £2.7m). Interest on bank
borrowings increased by £0.5m as a result
ofan increase in interest rates and a lower
level of debt in the prior year due to COVID
deferrals. Bank and other charges includes
aone-off charge of £0.4m for accelerated
amortisation of bank fees connected with
theprevious RCF facility that has since been
extinguished and replaced with a new facility.
Interest payable on leases of £1.7m
(FY2020/21: £2.3m) reflects the notional
interest cost relating to lease borrowings.
Profit/(loss) before tax
The Group reported a profit before tax of
£22.3m (FY2020/21: £30.6m loss before tax),
with the prior year reported loss before tax
being driven by adjusting items totalling
£64.8m referenced under the administrative
expenses section above.
Adjusted PBT is £41.4m (FY2020/21: £34.2m)
which represents a 21% increase on the prior
year. Under new leadership the Group’s
strategy continues to be implemented
operationally with a greater focus on
sustainable growth, performance
transformation and cost control. These
factors together have generated an
adjustedPBT margin (using net revenue)
forFY2021/22 of 11.8% (FY2020/21: 10.1%).
Tax
The reported tax charge for the year, excluding
prior year adjustments, is £6.1m(PY: 4.7m) on
a profit before tax of £22.3m (PY: loss of
£30.6m), representing an effective rate of tax
of 27.4%. The effective tax rate was higher
than the UK statutory tax rate primarily due
totax losses that have not been recognised
asdeferred tax assets (increasing the tax
charge by £2.1m) and the tax effect of
non-tax-deductible expenses (increasing the
tax charge by £0.7m) offset by the effect on
24 DWF Group plc | Annual Report and Accounts 2022
Strategic report
deferred tax resulting from the change in the
UK corporation tax rate from 19% to 25%
effective from 1 April 2023 (reducing the tax
charge by £0.8m).
The Group also booked prior year tax
adjustments of a net credit of £4.1m.
Thoseadjustments arise principally as a
result of (a) increased claims of the departing
Australian partners on the Group’s UK profit
pool following the restructuring of the
Group’s Australian business in FY21 reducing
the profits subject to UK corporation tax
(£5.1m), offset by (b) revaluations of the
Group’s deferred tax assets relating to tax
depreciation timing differences and expected
tax deductions forshare based payments as
at30 April 2021 (£1.4m).
This gives a net tax charge of £2.0m for the
year (FY2020/21: £4.6m).
There are no open tax audits or
investigations across the group. In line with
group’s tax strategy, it is not considered that
any aggressive or materially uncertain tax
positions have been adopted by any of the
group entities. As such, the level of tax risk
faced by the group is considered to be low.
EPS
Diluted EPS has increased to 6.5p in
FY2021/22 from a loss per share of 11.9p in
FY2020/21, thehighest Diluted EPS result
since the IPO.Adjusted Diluted EPS has
similarly increased in line with the increase
in adjusted PBT from 7.4p in FY2020/21 to
10.7p in FY2021/22, a 45% improvement,
and againarecord since the IPO.
Dividend
The Group’s capital allocation policy is to
prioritise having sufficient capital to fund
ongoing operating requirements and
strategic investment in the Group’s
long-term growth. Taking this into account
the Board targets a pay-out ratio of up
to70% of adjusted profit after tax. For
FY2021/22, the Board has declared a final
dividend of 3.25p per share, taking the total
dividend for the year to 4.75p (PY: 4.5p),
reflecting a pay-out ratio of 44% of adjusted
profit after tax (FY2020/21 61%). This
pay-out ratio reflects a progressive dividend
in absolute terms, but retains a proportion
of FY2021/22 profits to invest in near-term
growth opportunities. This final dividend
issubject to approval at the AGM on
28 September 2022 and, if approved, will be
paid on 7 October 2022 to all Shareholders
onthe register of members at the close of
business on 9 September 2022.
Working capital, cash flow & net debt
The group measures working capital efficiency
using “lock-up days”. Lock-up days are
comprised of two elements: Work-in-progress
(‘WIP days’), representing the amount of time
between performing work and invoicing clients;
and Debtor days, representing the length of
time between invoicing and cash collection.
Driving working capital efficiency has
continued to be a key focus for the Group in
FY2021/22, with a number of operational
improvements being effected in order to
achieve a permanent reduction in the lock-up
day cycle. Closing lock-up days at the end of
April were 179 (FY2020/21: 184), a five day
reduction and is the lowest level that lock-up
has been for six years, despite an 88%
increase in revenue over the same time
period. The five day reduction comprises a
one day increase in WIP days and a six day
reduction in Debtor days. The WIP day
increase is a product of a slight change in the
mix of type of fee income, which is expected
to be a timing issue only. The Debtor day
reduction reflects an increase in the Group’s
cash collection efficiency and ongoing focus
on operational discipline.
During the year, the Group has settled all
remaining COVID-19 VAT deferrals totalling
£10.7m. Under normal circumstances these
payments would have been made in
FY2020/21. In addition, the Group has had
cash outflows in the year relating to closures
and scale-backs of £3.8m. Normalising for
the impact of these would have meant a free
cash flow of £27.4m. This compares against
a reported free cash flow in FY2020/21 of
£32.1m which benefitted from a significant
working capital improvement, with lock-up
days decreasing by 20 days, driven from a
combination of operational improvements
and also a catch-up of collections after the
impact of COVID-19 led to a build-up of
trade receivables.
As well as settling remaining COVID-19 VAT
deferrals in the year the Group has also paid
£3.5m in consideration for acquisitions with
only £0.9m of consideration still to be paid as
at the balance sheet date. As a result of these
factors, net debt has increased to £71.8m
from £60.2m at April 2021. The Group’s
strategy continues to be to manage
borrowings such that the leverage ratio
(borrowings as a multiple of adjusted
EBITDA)reduces. Leverage at April 2022 has
increased from the prior year to 1.08 (PY: 1.04)
but the prior year included the benefit of
COVID-19 VAT deferrals as explained above.
The future reduction in leverage is expected
to be achieved through a combination of
profitable growth and net debt gradually
reducing over time through working
capitalefficiencies.
The Group successfully completed a
refinancing of its rolling credit facility (‘RCF’)
inDecember 2021, obtaining a £100m facility
with an additional accordion facility of up to
£20m as well as a permanent relaxation of
certain covenants. The facility is for an initial
three year term with two, one year extension
options. The Group expects to continue to
operate well within its available facilities and
for all covenants to be compliant for the
remaining tenure.
Capital expenditure (Capex)
The Group is actively reviewing office space
and will consider selective investments in
office refits in the coming years as the
premises strategy is executed, freeing up
redundant space and investing cost savings
into improving the remaining space.
Inaddition, there has been continued
investment into IT during the year as the
Group builds its IT infrastructure to support
our colleagues in delivering for our clients.
Overall capex (excluding right-of-use asset
additions under IFRS 16, and intangible assets
recognised from acquisitions) in FY2021/22
was £7.9m compared to £10.6m in FY2020/21.
The PY comparator included significant
one-off investment into the new Pune office.
Current trading and future outlook
The performance for FY2021/22 reflects
another strong year for the Group after a
transformational recovery in FY2020/21. The
results reflect record net revenue, adjusted
PBT, EPS and lock-up performance for the
Group. As well as seeing significant organic
growth opportunities from the existing client
base, buoyed by our NPS score and client
listening insights, the Group is actively
pursuing a strong pipeline of M&A
opportunities. Whilst macro-economic
conditions suggest harder times ahead, the
defensive nature of the Group’s revenue being
weighted towards litigation and the recurring
revenue base in Insurance, protects the Group
both from artificial peaks in growth but also
hedges against aslowdown in transactional
activity. The Group sees significant
opportunity to apply self-help actions to
control costs, with the premises strategy
andvarious back-office initiatives offering
protection from inflationary pressures.
Chris Stefani
Chief Financial Officer
20 July 2022
DWF Group plc | Annual Report and Accounts 2022 25
Strategic report Governance Financial statements Other information
Board process in considering section 172(1) in its decision making
Board
information
Section 172(1) matters considered in
the Board’s discussions on strategy,
including how they underpin
long-term value creation and the
implications for business resilience
Board papers include information
considering section 172(1) matters
The Chair ensures decision making
is sufficiently informed by section
172(1) matters
Outcomes of decisions assessed
and further engagement and
dialogue with stakeholders
The Group’s culture helps ensure
that there is proper consideration
of the potential impacts of decisions
Our Board continually engages
withstakeholders. Read more on
pages 28 to 31
The Board performs due diligence
in relation to the quality of the
information presented and receives
assurance where appropriate
Actions taken as a result of
Boardengagement
Board
strategic
discussion
Board
decision
Leadership and management receive training
on Directors’ duties to ensure awareness
of the Board’s responsibilities
Section 172(1) statement
Section 172(1) (a)–(f) of
the Companies Act 2006
(‘section 172(1)’) requires
a director of a company
toact in the way he or she
considers, in good faith,
would most likely promote
the success of the company
for the benefit of its
members as a whole.
The Directors have had regard to the
matters set out in section 172(1) when
performing their duties. They consider they
have acted in good faith, in the way that
would be most likely to promote the success
of the Company for the benefit of its members
as a whole, while also considering the broad
range of stakeholders who interact with and
are affected by our business.
The chart to the right demonstrates the
Board process in considering section 172(1)
in its decision making.
Details of how the Directors have had regard
to section 172(1) in carrying out their duties
in making two key decisions during the year
are set out on page 27. See pages 28 to 31
for more information on how weengage
with our stakeholders and page 65 of the
Corporate Governance report onhow the
Board’s discussions and decisions have
been informed by different stakeholder
considerations.
Read more
Stakeholder engagement pages 28 to 31
Culture pages 06, 07, 57 and 64
Values page 12
26 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Key
(a)
 Likely consequences of decisions in the long term
(b)
 The interests of the Company’s workforce
(c)
 The need to foster relationships with suppliers, customers and others
(d)
 Impact of operations on the community and environment
(e)
 High standards of business conduct
(f)
 The need to act fairly between members of the Company
Key decisions How we engaged Outcome of engagement
Launch of global
ESG Strategy
Following a comprehensive review of
business processes and increased
engagement on ESG from a variety of
stakeholders, the need for a global ESG
Strategy was identified. A global ESG
Strategy will ensure the Group can operate
in a cohesive manner to achieve the ESG
targets and progress can be clearly
monitored. The Group can focus its
resources on making progress in the areas
that its stakeholders have deemed most
important and measure the impact of the
actions taken.
Further information on our approach to ESG
can be found on pages 32 to 48.
The Board considered the feedback from all
stakeholders and approved the global ESG
Strategy, noting the increased alignment
between the concerns of stakeholders and
those of the Group.
• Appointed Business in the Community
tocarry out an independent materiality
assessment, which included an in-depth
examination of opinions on ESG from a
variety of stakeholders.
• Conducted a client survey to listen to
client opinions on ESG.
• The ESG Strategy was rolled out to
employees and partners via Virtual Town
Halls and announcements on Rubix, the
Group’s intranet.
• An update was made to the market by way
of RNS.
• Announcement of global ESG Strategy
in December 2021 focusing on the
matters that both the Group and
external stakeholders identified as
most important.
• A clear commitment to Net Zero.
• Commitment to publish a separate
ESGreport, in addition to disclosures
included in the Annual Report
andAccounts.
• Invested in Learning and Development
activities, such as our Emerging
Leaders programme.
• Enhanced Diversity & Inclusion targets
as part of our new ESG Strategy.
• Revised Employment Value Proposition
to ensure it was still fit for purpose.
Associations
The Board considered the need to enhance
our proposition in several important
markets and support our strategy of
offering integrated legal and business
services to ourclients on a global scale.
A steering group was created to ensure that
any proposed associations aligned with our
strategy. This included a review of current
arrangements and the termination of
associations that were not deemed to
bebeneficial.
The Board considered the risks and impact
of changes to associations to the Group’s
key stakeholder groups, particularly our
colleagues and ourclients.
• Engaged with clients through the client
census and meetings to understand
whatthey expect from legal and
businessservices.
• Sought input from a select group of
colleagues to assess the impact any
proposed association, or termination of
association, would have on our clients,
our risk profile and our culture.
• Announcements were made on Rubix,
theCompany’s intranet.
• Following entering into a new association,
an operating update was released to the
market via RNS.
• Successful associations in Hong Kong,
Spain and Portugal have been agreed
that complement our existing offering
to clients.
• Further strategically aligned
associations are being considered
andprioritised based on the potential
value add for our client base.
• Core policies were harmonised to
ensure the Group and associations
arealigned on key issues, in particular
on Diversity & Inclusion and ESG.
DWF Group plc | Annual Report and Accounts 2022 27
Strategic report Governance Financial statements Other information
Engaging with our stakeholders
Listening and responding
toour stakeholders
As a professional services
business, the relationships we
build and sustain are critical
to delivering our strategy
and ensuring the long-term
success of our business.
We use a range of engagement
mechanismsin order to understand and
consider stakeholder views in the Board’s
decision making and general oversight.
In the following table, we set out who our
key stakeholder groups are. By illustrating
why each stakeholder group is important to
us and through the engagement methods
we use with them, we are able to demonstrate
what is important to each stakeholder group.
This ultimately informs the decision making
of the Board and the Group as a whole.
For more information, see page 63
Stakeholder group Why we engage How we engage Key interests Outcome of engagement
Our colleagues
(employees and partners)
Our colleagues are the heart and soul of our
business and the key to its success. It is
important to properly incorporate our
people’s views in Board decision making.
We understand that it is vital that we recruit,
retain and develop the best people. By doing
this we will be able to implement our
strategy and fulfil our purpose.
• Virtual Town Halls hosted by the Group
Chief Executive Officer and supported
byNon-Executive Directors or Executive
Board members, as appropriate
• Weekly email and recorded video briefings
from the Group Chief Executive Officer to
all colleagues
• Global Pulse Surveys
• Partner representation on the Board
through our Partner Directors
• Rubix, our Company intranet, provides a
range of useful information for our people
and updates on the performance of the
Company and other business matters
• Formal and informal engagements
withthe Board appointed Designated
Non-Executive Director for the workforce
• Rubies and Achievers employee
recognition platforms
• Strategy, business plan and budget
• Recognition and fair reward
• Open communication
• Diversity & Inclusion
• Ways of working including our response
to macroeconomic factors, such as
COVID -19
• Opportunities for professional and
personal development
• Increased provision and support for
flexible working
• Improved guidance on managing mental
health and wellbeing
• Pulse Forum to consider the results
ofthePulse Survey and provide
recommendations to further improve
ourpeople proposition, comprising
representatives from across our
locations, offices and career levels
• Exploring opportunities to re-shape our
premises strategy following responses
to the global employee survey
Clients
Clients are integral to everything we do,
andso it is important we understand how
we need to evolve to provide them with the
right support.
• Key Account Programme with a
dedicatedExecutive Board sponsor
• Client Census to discover satisfaction
metrics and key themes of feedback
• Client Relationship Partners
• High-quality service delivery
• Legal and business services to be delivered
in an easier and more efficient way
• Development of new services and areas
of expertise
• Expansion of our offering globally
• Where global law firms typically score
between 25 and 40 the Group received
anabove industry average client Net
Promoter Score of 63
• Out of 500 clients surveyed 85% of our
clients rated us a 6 or 7 on ascale of 1–7
for client satisfaction
• A strong record of retaining existing
clients and winning new business such
asAllianz and the UK central
government legal services panel
Suppliers
Effective and trusted relationships are key
to our service offering. We engage to ensure
suppliers are providing value for money,
performing to our standards and conducting
business to our expectations for a mutually
beneficial relationship.
• Through a fair and consistent
evaluationprocess
• Use of competitive Request for Proposal
(‘RFP’) processes where appropriate
• Regular review meetings with key suppliers
• Ongoing feedback to maintain
opennessand to improve value
fromsupplier relationships
• RFP process
• Due diligence requirements
• Good governance expectations
• Payment processes and terms
• Strong supplier relationships
• Development and continuous
improvement of processes to improve
overall consistency such as a
standardised RFP, a supplier
categorisation and assurance framework,
and a Supplier Code of Conduct and
Ethical Sourcing Questionnaire
Debt providers
Access to working capital is the lifeblood
ofany business, especially in the current
environment as companies need to ensure
they have sufficient liquidity to navigate the
challenges presented by the macroeconomic
environment. It is essential we have strong
relationships with our banking providers and
that they are clear about our strategy.
• Representatives from each bank
attendour full-year and half-year
resultspresentations
• Management have regular discussions with
our banks about our strategic priorities
• Initiatives to improve lock-up days
• Capital allocation strategy
• Risk appetite and approach to leverage and
the provision of ancillary products over
and above the revolving credit facility to
support the Group’s growth ambitions
• Strong and supportive relationships
• Completion of a refinancing exercise
took place in December 2021, delivering
an increase in the principal banking
facility and additional headroom on
some of the covenants with no
reduction in headroom in any covenant
28 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Continued on the next page
Stakeholder group Why we engage How we engage Key interests Outcome of engagement
Our colleagues
(employees and partners)
Our colleagues are the heart and soul of our
business and the key to its success. It is
important to properly incorporate our
people’s views in Board decision making.
We understand that it is vital that we recruit,
retain and develop the best people. By doing
this we will be able to implement our
strategy and fulfil our purpose.
• Virtual Town Halls hosted by the Group
Chief Executive Officer and supported
byNon-Executive Directors or Executive
Board members, as appropriate
• Weekly email and recorded video briefings
from the Group Chief Executive Officer to
all colleagues
• Global Pulse Surveys
• Partner representation on the Board
through our Partner Directors
• Rubix, our Company intranet, provides a
range of useful information for our people
and updates on the performance of the
Company and other business matters
• Formal and informal engagements
withthe Board appointed Designated
Non-Executive Director for the workforce
• Rubies and Achievers employee
recognition platforms
• Strategy, business plan and budget
• Recognition and fair reward
• Open communication
• Diversity & Inclusion
• Ways of working including our response
to macroeconomic factors, such as
COVID -19
• Opportunities for professional and
personal development
• Increased provision and support for
flexible working
• Improved guidance on managing mental
health and wellbeing
• Pulse Forum to consider the results
ofthePulse Survey and provide
recommendations to further improve
ourpeople proposition, comprising
representatives from across our
locations, offices and career levels
• Exploring opportunities to re-shape our
premises strategy following responses
to the global employee survey
Clients
Clients are integral to everything we do,
andso it is important we understand how
we need to evolve to provide them with the
right support.
• Key Account Programme with a
dedicatedExecutive Board sponsor
• Client Census to discover satisfaction
metrics and key themes of feedback
• Client Relationship Partners
• High-quality service delivery
• Legal and business services to be delivered
in an easier and more efficient way
• Development of new services and areas
of expertise
• Expansion of our offering globally
• Where global law firms typically score
between 25 and 40 the Group received
anabove industry average client Net
Promoter Score of 63
• Out of 500 clients surveyed 85% of our
clients rated us a 6 or 7 on ascale of 1–7
for client satisfaction
• A strong record of retaining existing
clients and winning new business such
asAllianz and the UK central
government legal services panel
Suppliers
Effective and trusted relationships are key
to our service offering. We engage to ensure
suppliers are providing value for money,
performing to our standards and conducting
business to our expectations for a mutually
beneficial relationship.
• Through a fair and consistent
evaluationprocess
• Use of competitive Request for Proposal
(‘RFP’) processes where appropriate
• Regular review meetings with key suppliers
• Ongoing feedback to maintain
opennessand to improve value
fromsupplier relationships
• RFP process
• Due diligence requirements
• Good governance expectations
• Payment processes and terms
• Strong supplier relationships
• Development and continuous
improvement of processes to improve
overall consistency such as a
standardised RFP, a supplier
categorisation and assurance framework,
and a Supplier Code of Conduct and
Ethical Sourcing Questionnaire
Debt providers
Access to working capital is the lifeblood
ofany business, especially in the current
environment as companies need to ensure
they have sufficient liquidity to navigate the
challenges presented by the macroeconomic
environment. It is essential we have strong
relationships with our banking providers and
that they are clear about our strategy.
• Representatives from each bank
attendour full-year and half-year
resultspresentations
• Management have regular discussions with
our banks about our strategic priorities
• Initiatives to improve lock-up days
• Capital allocation strategy
• Risk appetite and approach to leverage and
the provision of ancillary products over
and above the revolving credit facility to
support the Group’s growth ambitions
• Strong and supportive relationships
• Completion of a refinancing exercise
took place in December 2021, delivering
an increase in the principal banking
facility and additional headroom on
some of the covenants with no
reduction in headroom in any covenant
DWF Group plc | Annual Report and Accounts 2022 29
Strategic report Governance Financial statements Other information
Engaging with our stakeholders continued
Stakeholder group Why we engage How we engage Key interests Outcome of engagement
Shareholders
Our Shareholders play an important role in
monitoring and safeguarding the governance
of our Group. Some are also employees and
partners, who have a critical role to play in
the continued success of our business.
We are also conscious of our need to act
fairly between the members of the Company.
• Financial reporting and trading updates
via RNS
• A series of events throughout the financial
year, including our AGM, and presentations
of our half-year and full-year results
• Management attend relevant conferences
and meet with investors and potential
investors throughout the year
• DWF’s strategy for growth and any
associated risks and opportunities
• Financial and operating performance
ofthe business
• Long-term sustainable and profitable
growth of the Company
• Progress in reducing debtor and WIP
daysand reducing net debt
• Environmental, Social and
Governanceissues
• Our response to macroeconomic factors,
such as COVID-19, the war in Ukraine, the
cost of living and inflation
• Transparency and good governance
• Trading updates to the market
• Engagement with larger Shareholders
andpotential investors
Our communities
We believe that we can build thriving
communities in which we live and work,
create a skilled and inclusive workforce
today and for the future, and innovate
torepair and sustain our planet.
• Volunteering in local communities
• Charitable giving by the DWF Foundation
• 5 STAR Futures, our community
educationprogramme, workshops
andawards evening
• Pro bono work
• Environmental and social issues including
climate change
• Developing skills in young people to
become more work ready
• Business ethics
• Employment
• Wider community support programmes
• Response to COVID-19
• DWF Foundation donated £317,725
through 116 grants investing in
education, employability, health and
wellbeing, homelessness, environment,
COVID-19 and emergency response
• 8,287 hours volunteered by
ourcolleagues
• 1,850 hours of pro bono support
• 1,782 hours invested in education and
employability activities
Our regulators
We engage with our regulators in each
jurisdiction in which we operate, including
the Solicitors Regulation Authority (‘SRA’)
inEngland, which is our largest market,
tomaintain and build the constructive
andtrusted relationships vital to any
regulated entity.
• Regular meetings with our regulators
• Quarterly meetings with our SRA
Regulatory Manager
• Annual reporting to the SRA on
strategy,risk management and
regulatorycompliance
• Attendance at SRA-led Compliance Forum
• Professional standards and compliance
• Training programme
• Innovation and data-driven disruption
• Constructive relationships and an
opendialogue
• Regular regulatory updates provided
tothe Board
• Regular engagement with the SRA which
has included a thematic review around
AML processes and specific engagement
around the solicitors Accounts Rules
andtypes of work including residential
plotsales
Policymakers
We work with national and local Governments,
policymakers, regulators and trade bodies
to help shape policy for the benefit of the
Company, our people, our clients and
ourcommunities.
• Participation in consultations
• Attendance and participation at
conferences and business network events
• Membership of relevant industry bodies
• Creation of thought leadership
• Regulatory change in the sector
• Innovation in the provision of legal services
• Opportunity to shape policy
development
• Positive client relationships with
governmental bodies
30 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Stakeholder group Why we engage How we engage Key interests Outcome of engagement
Shareholders
Our Shareholders play an important role in
monitoring and safeguarding the governance
of our Group. Some are also employees and
partners, who have a critical role to play in
the continued success of our business.
We are also conscious of our need to act
fairly between the members of the Company.
• Financial reporting and trading updates
via RNS
• A series of events throughout the financial
year, including our AGM, and presentations
of our half-year and full-year results
• Management attend relevant conferences
and meet with investors and potential
investors throughout the year
• DWF’s strategy for growth and any
associated risks and opportunities
• Financial and operating performance
ofthe business
• Long-term sustainable and profitable
growth of the Company
• Progress in reducing debtor and WIP
daysand reducing net debt
• Environmental, Social and
Governanceissues
• Our response to macroeconomic factors,
such as COVID-19, the war in Ukraine, the
cost of living and inflation
• Transparency and good governance
• Trading updates to the market
• Engagement with larger Shareholders
andpotential investors
Our communities
We believe that we can build thriving
communities in which we live and work,
create a skilled and inclusive workforce
today and for the future, and innovate
torepair and sustain our planet.
• Volunteering in local communities
• Charitable giving by the DWF Foundation
• 5 STAR Futures, our community
educationprogramme, workshops
andawards evening
• Pro bono work
• Environmental and social issues including
climate change
• Developing skills in young people to
become more work ready
• Business ethics
• Employment
• Wider community support programmes
• Response to COVID-19
• DWF Foundation donated £317,725
through 116 grants investing in
education, employability, health and
wellbeing, homelessness, environment,
COVID-19 and emergency response
• 8,287 hours volunteered by
ourcolleagues
• 1,850 hours of pro bono support
• 1,782 hours invested in education and
employability activities
Our regulators
We engage with our regulators in each
jurisdiction in which we operate, including
the Solicitors Regulation Authority (‘SRA’)
inEngland, which is our largest market,
tomaintain and build the constructive
andtrusted relationships vital to any
regulated entity.
• Regular meetings with our regulators
• Quarterly meetings with our SRA
Regulatory Manager
• Annual reporting to the SRA on
strategy,risk management and
regulatorycompliance
• Attendance at SRA-led Compliance Forum
• Professional standards and compliance
• Training programme
• Innovation and data-driven disruption
• Constructive relationships and an
opendialogue
• Regular regulatory updates provided
tothe Board
• Regular engagement with the SRA which
has included a thematic review around
AML processes and specific engagement
around the solicitors Accounts Rules
andtypes of work including residential
plotsales
Policymakers
We work with national and local Governments,
policymakers, regulators and trade bodies
to help shape policy for the benefit of the
Company, our people, our clients and
ourcommunities.
• Participation in consultations
• Attendance and participation at
conferences and business network events
• Membership of relevant industry bodies
• Creation of thought leadership
• Regulatory change in the sector
• Innovation in the provision of legal services
• Opportunity to shape policy
development
• Positive client relationships with
governmental bodies
DWF Group plc | Annual Report and Accounts 2022 31
Strategic report Governance Financial statements Other information
Environmental, Social and
Governance (‘ESG’) report
ESG is core to our business
model, strategy and decision
making, and starts with our
purpose of delivering positive
outcomes with our colleagues,
clients and communities.
The level of disclosure and transparency we
demonstrate due to our listed status means
that all stakeholders can be confident that
our ESG commitments will be progressed and
that our governance in enabling delivery is
effective. Additionally, in supporting our
clients and communities on ESG-related
matters, we enhance our strategy.
Our position as the only Main Market listed
legal business gives DWF a unique perspective
on ESG.
We have learned important lessons about
implementing effective ESG policies. An
operational focus is critical and means
committing to consistent high performance
around ESG. This is about how we do business
and is fundamental to our success as a global
legal business, specifically in terms of
delivering our Group strategy, realising
commercial advantage, and in retaining

Our goals include ambitious science-based
targets through which the Group commits to
reducing carbon emissions in line with the
Paris Agreement and the 1.5 degree pathway,
along with stretch targets to improve

Our ESG ambition sets out the future we
envision for the Group; what we want to
achieve between now and 2030.
Our ESG Strategy
To inform our strategic priorities and ESG
metrics, we conducted a detailed independent
materiality assessment in order to identify the
issues that matter most to our stakeholders,
and where we have the most potential to
create value aligned with our purpose.
The Group ESG Strategy has six priority areas:
Climate action:
We recognise our role as a responsible
business in supporting the global transition
to a sustainable low-carbon economy.
Our aim is to be Net Zero by 2030.
Diversity & Inclusion:
Accelerating progress to improve
representation and diverse talent pipelines.
Empowering colleagues and
ourcommunities:
Sustaining a skilled workforce today and
for the future, continuing to prioritise
colleague health and wellbeing, and
taking action to help and collaborate

Supporting and connecting with
ourclients:
Being clear and transparent about how
we can help clients to improve their
sustainability performance through an
ESG-centric approach.
Acting with integrity in everything
that we do:
Taking ownership and holding ourselves
accountable for the way we do business.
Building trust and increasing
transparency:
Enhancing the credibility of our own ESG
disclosure, consistent with our purpose
of delivering positive outcomes with our
colleagues, clients and communities.
Ahead of the strategy launch in December
2021, our Group CEO invited all DWF colleagues
to a briefing session – ‘Understanding ESG
– why it matters to everyone’. The session
explained what ESG is, how ESG is relevant to
the Group and why it has risen so rapidly up
the corporate agenda.
Our approach
We have already made significant progress
in embedding responsible business best
practice. Our business conduct impacts our
reputation and both are inextricably linked
to the long-term value we want to create as
a global business.
We focus our efforts on connecting our
activities to our business purpose and
values, to accelerate our ESG work and meet
the needs of all our stakeholders. In doing
so, we set the stage for long-term value
creation determined by revenue,
sustainability, impact and reputation.
As a force for good, we will continue to:
• create and sustain a skilled workforce
today and for the future;
• deliver service excellence to grow and
sustain our clients;
• build and strengthen our communities;
and
• help to repair and sustain our planet.
The Sustainable Development Goals (‘SDGs’)
While we believe in and aim to contribute

goals, aligned to our ESG agenda, where we

• Climate Action
• Gender Equality
• Decent Work and Economic Growth
• Reduced Inequalities
• Peace, Justice and Strong Institutions
Human rights and modern slavery
We are committed to respecting human
rights and upholding the UN Universal
Declaration of Human Rights and the UN
Guiding Principles on Business and Human
Rights in our business and supply chain.
32 DWF Group plc | Annual Report and Accounts 2022
Strategic report
ESG Governance Structure
Roadmap to Net Zero
2021
March
Certification to
new Standard
ISO 14001:2015
June
Commitment to
setting SBTi targets


December
Targets sent to
SBTi for Validation
2022
June
Targets validated
by the SBTi
July
Our annual
completion of
CDP and annually
thereafter
2024
March
Re-certification to
ISO 14001:2015
2025
December
25% reduction across
Scopes 1, 2 and 3
2030
March
Carbon Neutral/
Ambition to be
Net Zero
We also recognise the need to improve the
tracking and monitoring of our human rights
approach and expand the scope of human
rights training provided for our colleagues.
In 2022, we published our Human Rights
Statement, which builds on our previous
commitments and reflects the increasing
importance of integrating human rights
across our business.
You can also read our 2021 Modern Slavery
Statement here: https://dwfgroup.com/
en/notices/modern-slavery-statement.
This contains information on our
organisational structure, policies, the
management of our supply chain, training
and stakeholder engagement to prevent the
existence of modern slavery in our Group.
Within the reporting period we can confirm
that there were no reported instances of
Modern Slavery within our own business
operations and supply chains.
Our ESG governance
The ESG issues most important to all
stakeholders of the DWF Group are
contained in the ESG Strategy, which has the
engagement of and accountability from our
PLC and Executive Boards, along with all
levels of leadership across our business.
The oversight provided by the Board and

Leadership Group, ESG Operations Board
and Risk & Sanctions Committee, is guided

applies to every DWF Board member

The Group Head of ESG reports quarterly to
the Executive Board and at least bi-annually
to the PLC Board, on progress to date, ESG
risks and opportunities, and any actions
necessary to ensure we are evolving our
ESG Strategy and continually meeting the
ESG expectations of both internal and
external stakeholders. The Group COO is
part of the ESG Leadership Group and
meets fortnightly with the Group Head of
ESG, as does the Group Director of Risk.

Group Risk and Excellence function.
Climate action
2030 Net Zero pathway
DWF is responding to an urgent call-to-action
for companies to set emissions reduction
targets in line with a 1.5°C future, backed by a
global network of UN agencies, business and
industry leaders. In May 2021, we signed the
Business Ambition for 1.5°C commitment, a
campaign led by the SBTi in partnership

Disclosure Project (‘CDP’), the World
Resources Institute (‘WRI’), the World Wide
Fund for Nature (‘WWF’) and the We Mean
Business Coalition, demonstrating the highest
level of ambition on climate and paving the
way to a Net Zero future.
In December 2021, we submitted our carbon
reduction targets for validation by the SBTi.
The targets set are to reduce Scopes 1, 2
and 3 by 50% by 2030, with our overall
ambition to be Net Zero by 2030. The SBTi
began the validation process in May 2022
and in June 2022 our targets were
successfully approved.
Our key focus is on actual reductions in our
emissions by cutting energy use, transitioning
to renewables, significantly reducing the
frequency and carbon intensity of commuting

reduced our carbon emissions to the lowest
level possible, investing in solutions that
remove carbon from the atmosphere.
Executive Board
ESG
Operations
Board
ESG
Leadership
Group
Commercial
Conflicts
Committee
D&I
Leadership
Group
PLC Board
Risk
Committee
Risk &
Sanctions
Committee
DWF Group plc | Annual Report and Accounts 2022 33
Strategic report Governance Financial statements Other information
Our ESG Strategy
at a glance
Climate action Diversity & Inclusion Empowering colleagues and our communities
Link to Sustainable Development Goals
Our targets • Reduce our carbon emissions in line with the Paris Agreement.
• Reduce Scope 1, Scope 2 and Scope 3 emissions by 50% by 2030.
• Reduce business travel emissions by 50% by 2030 (against a

• 
• Increase the proportion of women on the PLC and Executive
Boards to at least 40% by 2025, with the same target applying


• In the UK, to increase the representation of Black, Asian and
Minority Ethnic colleagues across senior management to at least
10% by 2025.
• In the UK, to increase the representation of Black, Asian and
Minority Ethnic colleagues across all career bands to at least

• In the UK, to increase Black representation overall and in senior
roles to at least 3% by 2025.
• Achieve and maintain an overall global colleague engagement
score of 80+.
• 

• Raise sufficient funds for the Foundation to enable donations
made to reach £1 million in support of registered charities
globally by the end of FY2022/23.
• Continue to advance social mobility within our talent pipelines.
• Deliver 25,000 hours in volunteering hours to our communities,

years to FY2024/25.
Performance to date • Our key focus is on reducing our CO
2
emissions, and we have
committed to and submitted our roadmap to a 1.5°C pathway with
the Science-Based Targets initiative (‘SBTi’), which was approved in
June 2022, demonstrating the highest level of ambition on climate
and paving the way to a Net Zero future.
• Further details can be found in our environmental reporting on
pages 38 to 45.
• We strengthened our D&I infrastructure and built on the efforts
already made in inclusive recruiting to ensure we sustain
leadership engagement and ownership to progress and retain
diverse talent. This includes quarterly reporting of progress within
each division to our Executive Board, D&I objectives for all people
managers and tracking and modelling D&I data to inform our
strategy, plans and actions.
• In 2021, we launched our employee value proposition to position

colleagues all of the essential elements of what it means to be a
part of DWF. In September 2021, our colleague engagement index

responding) and we retain Living Wage Employer status in the UK.
Priorities for next year • Active management of carbon emissions aligned to a

• Inspire colleagues to drive meaningful impact and foster an
enlightened attitude around business travel.
• Engage in at least one project during FY2022/23 which provides


• Take action to ensure efficient use of resources, following the
‘Reduce, Reuse, Recycle’ waste hierarchy.
• Invest in technology to help drive our sustainability agenda.
• Expand the scope of our continued ISO 14001 certification.
• Collaborate to develop, apply and promote environmental best
practice to enhance our resilience to climate change.
• Evolve, through the D&I Action Plans and Board oversight, talent
pipelines and succession planning within each division to ensure


• Widen the roll out of Inclusive Leadership Training following

• Expand race and ethnicity two-way mentoring beyond the PLC
and Executive Board members.
• Increase engagement on disclosure of global workforce data
continuing to encourage voluntary self-declaration (subject to any
legal restrictions) and communicating and measuring progress on
data collection.
• Continue to review and monitor the D&I composition of teams
servicing our clients, engaging and collaborating on activity
designed to advance our shared inclusion goals.
• Increase support to and strengthen the impact derived from our
Affinity Networks.
• Ensure business infrastructure and design of operations
promotes inclusion in all aspects.
• Sustain a skilled workforce today and for the future, whilst
continuing to prioritise colleague health and wellbeing.
• 

• 
inclusive workplace.
• Continue to foster a culture of recognition and appreciation
throughout DWF.
• Empower more colleagues to use their talent, skills and insight to
strengthen our communities through volunteering and global pro
bono support.
• Engage with our supply chain to develop ways to reduce
environmental impacts.
For more information, see pages 38 to 45 For more information, see pages 45 to 48 
34 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Climate action Diversity & Inclusion Empowering colleagues and our communities
Link to Sustainable Development Goals
Our targets • Reduce our carbon emissions in line with the Paris Agreement.
• Reduce Scope 1, Scope 2 and Scope 3 emissions by 50% by 2030.
• Reduce business travel emissions by 50% by 2030 (against a

• 
• Increase the proportion of women on the PLC and Executive
Boards to at least 40% by 2025, with the same target applying


• In the UK, to increase the representation of Black, Asian and
Minority Ethnic colleagues across senior management to at least
10% by 2025.
• In the UK, to increase the representation of Black, Asian and
Minority Ethnic colleagues across all career bands to at least

• In the UK, to increase Black representation overall and in senior
roles to at least 3% by 2025.
• Achieve and maintain an overall global colleague engagement
score of 80+.
• 

• Raise sufficient funds for the Foundation to enable donations
made to reach £1 million in support of registered charities
globally by the end of FY2022/23.
• Continue to advance social mobility within our talent pipelines.
• Deliver 25,000 hours in volunteering hours to our communities,

years to FY2024/25.
Performance to date • Our key focus is on reducing our CO
2
emissions, and we have
committed to and submitted our roadmap to a 1.5°C pathway with
the Science-Based Targets initiative (‘SBTi’), which was approved in
June 2022, demonstrating the highest level of ambition on climate
and paving the way to a Net Zero future.
• Further details can be found in our environmental reporting on
pages 38 to 45.
• We strengthened our D&I infrastructure and built on the efforts
already made in inclusive recruiting to ensure we sustain
leadership engagement and ownership to progress and retain
diverse talent. This includes quarterly reporting of progress within
each division to our Executive Board, D&I objectives for all people
managers and tracking and modelling D&I data to inform our
strategy, plans and actions.
• In 2021, we launched our employee value proposition to position

colleagues all of the essential elements of what it means to be a
part of DWF. In September 2021, our colleague engagement index

responding) and we retain Living Wage Employer status in the UK.
Priorities for next year • Active management of carbon emissions aligned to a

• Inspire colleagues to drive meaningful impact and foster an
enlightened attitude around business travel.
• Engage in at least one project during FY2022/23 which provides


• Take action to ensure efficient use of resources, following the
‘Reduce, Reuse, Recycle’ waste hierarchy.
• Invest in technology to help drive our sustainability agenda.
• Expand the scope of our continued ISO 14001 certification.
• Collaborate to develop, apply and promote environmental best
practice to enhance our resilience to climate change.
• Evolve, through the D&I Action Plans and Board oversight, talent
pipelines and succession planning within each division to ensure


• Widen the roll out of Inclusive Leadership Training following

• Expand race and ethnicity two-way mentoring beyond the PLC
and Executive Board members.
• Increase engagement on disclosure of global workforce data
continuing to encourage voluntary self-declaration (subject to any
legal restrictions) and communicating and measuring progress on
data collection.
• Continue to review and monitor the D&I composition of teams
servicing our clients, engaging and collaborating on activity
designed to advance our shared inclusion goals.
• Increase support to and strengthen the impact derived from our
Affinity Networks.
• Ensure business infrastructure and design of operations
promotes inclusion in all aspects.
• Sustain a skilled workforce today and for the future, whilst
continuing to prioritise colleague health and wellbeing.
• 

• 
inclusive workplace.
• Continue to foster a culture of recognition and appreciation
throughout DWF.
• Empower more colleagues to use their talent, skills and insight to
strengthen our communities through volunteering and global pro
bono support.
• Engage with our supply chain to develop ways to reduce
environmental impacts.
For more information, see pages 38 to 45 For more information, see pages 45 to 48 
DWF Group plc | Annual Report and Accounts 2022 35
Strategic report Governance Financial statements Other information
Our ESG Strategy at a glance continued
Supporting and connecting with our clients Acting with integrity in everything we do Building trust and increasing transparency
Link to Sustainable Development Goals
Our targets • Working with colleagues and clients collaboratively to improve
both our and their sustainability performance through an
ESG-centric approach, building long-term relationships.
• Understand the ESG/sustainability strategy for all key account
clients and assess the support DWF can provide or steps DWF
should take to ensure teams deliver work and relationships
consistent with any commitments clients make and our own
values and commitments to ESG.
• Improve our net promoter score for our Key Account programme
by at least 5% and maintain current market leading score.
• 100% of new clients are assessed in line with the ESG Client Policy,
due diligence and onboarding process.
• 100% of colleagues read and confirmed understanding of our
Code of Conduct.
• Zero instances of bribery and corruption.
• Zero instances of modern slavery in our operations and

• Achieve and retain EcoVadis ‘gold’ rating standard by achieving


• Increase ESG operational resource to ensure effective
implementation of the strategy by 2023.
• We disclose annually, our approach to climate-related risks

(currently TCFD).
Performance to date • 
This evidences a loyal client base driven by high levels of
satisfaction with service delivery and quality. This demonstrates
solid foundations for long-term relationships.
• Also in 2021, we published global research to encourage clients to

and sustainable future vision can be achieved.
• No reports of bribery and corruption during the financial year.
• No reports of modern slavery in our operations and supply chain
• 
of our risk assessment and decision making, we introduced a
process designed to lead to more informed client onboarding,
agreed at a level appropriate to the sensitivity of the issue
concerned. In addition, following the establishment of our Risk &
Sanctions Committee, set up in response to the war in Ukraine,


• We achieved a silver EcoVadis medal for our commitment to
sustainability. EcoVadis is the world’s largest and most trusted
provider of business sustainability ratings.
• We were reassessed by the Business in the Community (BITC)
Responsible Business Tracker to evaluate and monitor our


• We received a “D” rating with the Carbon Disclosure Project, however
this score was prior to the formal launch of our ESG Strategy in
December 2021. We are submitting our re-assessment in July 2022.
• We conducted a detailed independent materiality assessment


with our purpose. The launch of our first ESG report is an
important milestone in increasing reporting transparency.
Priorities for next year • Embed our new ESG Client Policy, risk assessment matrix and
escalation process into our client due diligence which extends to
new and existing clients.
• Continue to work with our clients to help future-proof their
businesses by leveraging our own ESG expertise.
• 


• Increase the amount of sustainable work we undertake and have
a clear and robust way of capturing and communicating internally
and externally to be able to determine future KPIs.
• Identify opportunities to collaborate with clients on ESG or
environmental projects.
• Roll out an updated Code of Conduct globally to colleagues,
incorporating changes to internal policies and processes aligned
to our ESG Client Policy and external best practice.
• 

• Continue to embed and communicate outcomes from our

• Improve the tracking and monitoring of our human rights
approach and expand the scope of human rights training
provided for our colleagues.
• Embed our ESG communications strategy both internally

credibility of our own ESG disclosures and set an example


• Continue to hardwire sustainability into our business operations.
• Increase transparency and reporting against our ESG priorities,
using internationally recognised reporting frameworks.
• Proactively participate in ESG-related indices and publish ratings
including FSTE4Good Series, Carbon Disclosure Project, EcoVadis
and Business in the Community’s Responsible Business Tracker.
• Continually improve and monitor the content and layout of our
sustainability journey on our website to more accurately reflect
our ESG Strategy.
• Initiate global gender pay gap reporting (currently only in the UK)
and continue to voluntarily disclose our ethnicity pay gaps.
For more information, see pages 48 and 49 For more information, see pages 48 and 49 For more information, see 38 to 45
36 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Supporting and connecting with our clients Acting with integrity in everything we do Building trust and increasing transparency
Link to Sustainable Development Goals
Our targets • Working with colleagues and clients collaboratively to improve
both our and their sustainability performance through an
ESG-centric approach, building long-term relationships.
• Understand the ESG/sustainability strategy for all key account
clients and assess the support DWF can provide or steps DWF
should take to ensure teams deliver work and relationships
consistent with any commitments clients make and our own
values and commitments to ESG.
• Improve our net promoter score for our Key Account programme
by at least 5% and maintain current market leading score.
• 100% of new clients are assessed in line with the ESG Client Policy,
due diligence and onboarding process.
• 100% of colleagues read and confirmed understanding of our
Code of Conduct.
• Zero instances of bribery and corruption.
• Zero instances of modern slavery in our operations and

• Achieve and retain EcoVadis ‘gold’ rating standard by achieving


• Increase ESG operational resource to ensure effective
implementation of the strategy by 2023.
• We disclose annually, our approach to climate-related risks

(currently TCFD).
Performance to date • 
This evidences a loyal client base driven by high levels of
satisfaction with service delivery and quality. This demonstrates
solid foundations for long-term relationships.
• Also in 2021, we published global research to encourage clients to

and sustainable future vision can be achieved.
• No reports of bribery and corruption during the financial year.
• No reports of modern slavery in our operations and supply chain
• 
of our risk assessment and decision making, we introduced a
process designed to lead to more informed client onboarding,
agreed at a level appropriate to the sensitivity of the issue
concerned. In addition, following the establishment of our Risk &
Sanctions Committee, set up in response to the war in Ukraine,


• We achieved a silver EcoVadis medal for our commitment to
sustainability. EcoVadis is the world’s largest and most trusted
provider of business sustainability ratings.
• We were reassessed by the Business in the Community (BITC)
Responsible Business Tracker to evaluate and monitor our


• We received a “D” rating with the Carbon Disclosure Project, however
this score was prior to the formal launch of our ESG Strategy in
December 2021. We are submitting our re-assessment in July 2022.
• We conducted a detailed independent materiality assessment


with our purpose. The launch of our first ESG report is an
important milestone in increasing reporting transparency.
Priorities for next year • Embed our new ESG Client Policy, risk assessment matrix and
escalation process into our client due diligence which extends to
new and existing clients.
• Continue to work with our clients to help future-proof their
businesses by leveraging our own ESG expertise.
• 


• Increase the amount of sustainable work we undertake and have
a clear and robust way of capturing and communicating internally
and externally to be able to determine future KPIs.
• Identify opportunities to collaborate with clients on ESG or
environmental projects.
• Roll out an updated Code of Conduct globally to colleagues,
incorporating changes to internal policies and processes aligned
to our ESG Client Policy and external best practice.
• 

• Continue to embed and communicate outcomes from our

• Improve the tracking and monitoring of our human rights
approach and expand the scope of human rights training
provided for our colleagues.
• Embed our ESG communications strategy both internally

credibility of our own ESG disclosures and set an example


• Continue to hardwire sustainability into our business operations.
• Increase transparency and reporting against our ESG priorities,
using internationally recognised reporting frameworks.
• Proactively participate in ESG-related indices and publish ratings
including FSTE4Good Series, Carbon Disclosure Project, EcoVadis
and Business in the Community’s Responsible Business Tracker.
• Continually improve and monitor the content and layout of our
sustainability journey on our website to more accurately reflect
our ESG Strategy.
• Initiate global gender pay gap reporting (currently only in the UK)
and continue to voluntarily disclose our ethnicity pay gaps.
For more information, see pages 48 and 49 For more information, see pages 48 and 49 For more information, see 38 to 45
DWF Group plc | Annual Report and Accounts 2022 37
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
Task Force on Climate-related Financial Disclosures (TCFD)
This is the first year that the Group has disclosed climate-related disclosures under the TCFD
framework and, in doing so, we are complying with the requirements of the new Listing
Rules on climate-related disclosures. Whilst significant progress has been made during the
year to embed climate-related risks within our operations, we recognise that there is more
work to do, including in our disclosures under the TCFD framework.
The risk to the business brought about by climate change is considered an emerging risk,
with more detail available in the principal risks section of the Strategic report.
The disclosures below summarise our disclosures against each of the TCFD disclosure
recommendations.
Governance
Describe the board’s oversight
ofclimate-related risks
andopportunities.
The Board oversees and has overall responsibility for ESG, including the impact of climate-
related risks and opportunities on the business. The Board is supported by the Global Head
of ESG and the wider ESG Leadership Group, who together are responsible for ensuring that
climate risks are embedded into the Group’s overall risk management framework to identify,
assess and manage climate-related risks and opportunities over the short, medium and

On a quarterly basis, the Global Head of ESG presents on ESG matters to the Board. At least
annually, this presentation will include an update on climate-related risks and how the
business is working to mitigate the impact of such risks, as well as maximising any opportunities.
The Executive Board and PLC Board also receive annual training on sustainability issues,
including climate change. This helps to inform the Group’s strategy in responding to the risks
that are borne out of climate change.
Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Our Global Head of ESG ensures that management assess and manage climate-related risks
and opportunities across all business areas including; Health, Safety & Environment, IT,
Procurement, Risk, Finance, HR and Clients. Each area contributes to the scenarios that will
likely impact their respective areas over the short, medium and long term. From the scenarios
provided, the Global Head of ESG, along with the ESG Leadership Group, will determine
those that will have the highest impact on the business, both positively and negatively.
These are presented to the Board as outlined above.
During monthly ESG Leadership Group meetings, the latest environmental and climate-related
matters are discussed, and the Leadership Group actively monitors the latest information
and appraises updates on agreed actions to ensure we are dealing with climate-related risks
efficiently and effectively.
Newly identified risks are submitted into the Group’s existing risk management framework,
as described in more detail below. For any emerging opportunities, actions are logged and
followed up with the appropriate individual within the Group to ensure opportunities are
being maximised.
Our management teams that are heavily involved in assessing and managing our climate-related
risks and opportunities also receive training via the Carbon Literacy Project and our Global
Head of ESG has successfully completed the Oxford Sustainability Leadership Course in

opportunities. Our ESG Leadership Group is also informed by our Global Co-head of Energy,
being a legal expert in the field of emerging power, transition and supporting clients on
regulations, reporting, decarbonisation and policy.
38 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Risk management
Describe the organisation’s processes
for identifying and assessing climate-
related risks.
As we outlined previously, our ESG Leadership Team report on the climate-related risks that
they believe have the highest impact across the business. Climate-related risks that are
identified are fed into the Group’s risk register. This forms part of the first line of defence

outlined further on page 50.
Also considered within the scope of the ERM, the business determines potential emergency
situations, including those that can have an environmental impact. These risks and
opportunities are reviewed at least annually.
Describe the organisation’s processes
for managing climate-related risks.
The Board, supported by the ESG Leadership Group, will integrate new, and refresh existing,
processes into the Group’s ERM to identify, assess and manage climate-related risks and
opportunities over the short, medium and long term. This happens at least bi-annually.
By assessing climate-related risks in the manner described above, this allows us to put plans
in place to either eliminate or reduce the impacts of those risks and ensure that we continue
to invest in the right areas to help mitigate the Group’s climate-related risks.
We determine the key risk risks associated with our business by categorising these into

Additionally, we review the risks associated with infrastructure which includes our

Our ISO 14001:2015 certified Environmental Management System is also firmly embedded.
It identifies and controls the environmental impact of our business and supports our
working practices, thus allowing us to further eliminate or reduce the impacts of those risks.
Describe how processes for identifying,
assessing and managing climate-
related risks are integrated into the
organisation’s overall risk management.
In the prior year, Sustainability was included within the Group’s strategic risks and classified
as an emerging risk. Climate-related risks form a key part of this emerging risk. More detail
on how the Group manages its emerging risks are provided in the principal risks section

Strategy
Describe the climate-related risks
andopportunities the organisation
hasidentified over the short,
mediumand long term.
In the table on the following pages, we explain the key risks and opportunities that the
business faces due to the increasing impact of global climate change. Risks and opportunities
have been categorised into Infrastructure, Colleagues, Clients and Communities, although it
is noted that there is often overlap between these categories.
Time horizons have also been attributed to our risks and opportunities, being short term
(considered as one to five years), medium term (five to ten years) and long term (more than
ten years).
Describe the impact of climate-related
risk and opportunities on the
organisation’s businesses, strategy
andfinancial planning.
The impact of climate-related risks and opportunities on the Group has also been included
in the table that follows and primarily focuses on the qualitative impact on the business.
Whilst some limited quantitative impacts have been given, we expect to evolve our
assessment over time and intend to provide further detail in future reports.
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2 degree or
lowerscenario.
In identifying the climate-related risks and opportunities to the business, we have
considered two climate-related scenarios:
Scenario 1: Global warming is limited to less than 1.5 degrees above pre-industrial levels.
This naturally leads to risks and opportunities which relate to a rapid global transition to a
low-carbon economy. These have been included within the ‘transition risks’ section in the
table that follows.
Scenario 2: No mitigation of climate change, resulting in global warming of 4 degrees in the
long term. This scenario presents the greatest risks to the Group and its key stakeholders
and hence the business response is focused on limiting the impact of climate change on our
people, clients and operations.
DWF Group plc | Annual Report and Accounts 2022 39
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
Risk/Opportunity Category Time horizon Business impact Business response
Physical risks based on 4 degree warming
IT infrastructure Infrastructure Medium
and long
term
Our IT infrastructure is critical to our
ability to operate. This infrastructure is
exposed to the consequences of extreme
weather events, which could result in
business disruption via power failure,
flood or loss of cooling.
Our core ‘internal’ systems infrastructure
is operated from duplicated internal
(DC1) and external (DC2) data centres.
The external data centre is on a different
power grid and is operated by a world-
class operator, Equinix, which has a
strong climate event mitigation strategy.
Our cloud-based services, which include
email, intranet and other core services,
are hosted within Microsoft’s Azure cloud
infrastructure, for which Microsoft has
industry leading mitigation plans.
Impact of
extreme
weather and
climate-related
events on
ourcolleagues
Colleagues Short,
medium
and long
term
Our offices are also exposed to ever
increasing extreme weather and climate
events, especially those in higher-risk
geographies. This could result in disruption
to our colleagues, operations and, as a
result, on our ability to service our clients.
It is difficult to quantify the likely impact of
such a risk on the business as it depends
which geographies are impacted, the
severity of the impact and the success of
our mitigating actions.
The impact of COVID-19 has meant that
the business has adapted successfully

short-term disruption to our offices

colleagues to work from home.
Our premises strategy also considers the
resilience of new and current office space
to extreme weather events proportionate
to the level of risk in the relevant geography.
Localised weather events could disrupt
our colleagues even when they are
working remotely due to it impacting
their homes and local infrastructure, and
in the longer term the infrastructure in
certain higher-risk geographies will come
under increasing strain, increasing the
level of disruption. These risks continue
to be mitigated through the Group’s
business continuity planning.
Impact of
extreme
weather and
climate events
onour clients
Clients Medium
and long
term
The Group’s clients are also exposed to
risks of extreme weather and climate
events. Some clients will be significantly
exposed due to either their location in
higher-risk geographies, or where they have
supply chains that are at high risk of
disruption. In addition, our insurance clients
may be exposed to the consequences of
extreme weather or climate events.
Our clients are therefore facing increasing
risks and such events could result in
significant impact on their operations and,
in turn, a decrease in the level of services
they require from DWF.
The Group continues to operate in

diversification mitigates the impact of
disruption of any individual client or sector.
In addition, we are well placed to provide
support to our clients as they face the
physical risks caused by extreme weather
and climate events, for example
construction advice, planning and
development, casualty, local authority,
community development and investment,
and international energy and renewables-
related disputes.
These risks continue to be mitigated
through the Group’s business

40 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Risk/Opportunity Category Time horizon Business impact Business response
Transition risks based on 1.5 degree warming
Talent Colleagues Short,
medium
and long
term
Our colleagues are key to the future
success of the Group. We need to take
meaningful action and be a leading player
within the legal sector in our response to
the global climate emergency so as to
attract and retain talent within the
business. Failure to do so could result in


Our Code of Business Conduct applies to
every employee globally and everyone is
expected to contribute to our global
efforts to reduce, reuse and recycle
wherever possible. Therefore, it is
imperative to us as a business that
everyone understands the role they play.
Furthermore, we are educating our senior
leaders and other internal stakeholders
around environmental topics such as the

these behaviours and values, and
providing education to our colleagues will
demonstrate our response to the climate
emergency and therefore attract and
retain talent.
Reputation/
Brand
Clients,
Colleagues
Medium
and long
term
The DWF brand and reputation are
impacted by the action taken by the
Group in response to the climate
emergency. In addition, our association
with clients who may be perceived as not
positively contributing to the global
climate emergency, or damaging it, could
undermine the commitments we have
made on climate and lead to accusations
of greenwashing and damage reputation.
This is likely to lead to lost revenue from
clients who decide they will not work with
us going forward.
As part of our Client ESG Policy, we have
identified the sectors and industries that
we consider to be the highest risk in
creating a negative impact on the global
climate emergency. These sectors and
industries are continually reviewed by
our Risk and ESG Leadership teams, and
the policy is updated accordingly. The
purpose of this policy is to improve on
the quality and consistency of our risk
assessment and decision making to lead
to more informed client acceptance, on
the basis of our ESG material factors,
with decisions taken at a level appropriate
to the sensitivity of the issue concerned.
We regularly engage with our clients and
industry experts about our approach to
combating the global climate emergency,
including the disclosure of our commitment
to the SBTi and our intended roadmap.
Adapting
ourproducts
and services
Clients Medium
and long
term
There is a significant opportunity for the
Group to service existing and new clients
as they transition to a low-carbon economy.
Risks are also prevalent if we are unable
to adapt our services to adequately
service our clients’ needs.
We realise the importance and challenges
our clients face, and look to support them
wherever we can. We have reviewed how
we currently work with our clients and
structured this in a way to provide legal
advice across ‘Environment, Climate
Change and Energy Transition’ issues.
Additionally, we are looking to support
clients through training and education on
environmental topics and considering the
development of a consultancy service to
further support our clients' needs.
We consider the impact on the
environment in the decision-making
process for new products and services.
These are referred to the ESG Operations
Board and ESG Leadership Group

DWF Group plc | Annual Report and Accounts 2022 41
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
Risk/Opportunity Category Time horizon Business impact Business response
Supply chain Communities Short,
medium
and long
term
As a people-led business, whilst we are not
as reliant on our supply chain as other
sectors, it still contributes significantly to
the Group’s carbon emissions.
The Group’s pathway to Net Zero by 2030
is reliant on our ability to procure products
and services which minimise the impact

providers may be unable to provide
sustained (and renewable) power to our
workplaces, for example.
The supply chain may experience
disruption based on environmental and
geopolitical factors inhibiting supplies/
services to DWF. This could lead to
increased costs or risks to the ability of the
Group to achieve its Net Zero pathway.
Increasing emphasis on supply chain
resilience will continue to be built into

suppliers to ascertain their approach to
business continuity planning (‘BCP’) and
their corresponding ability to rapidly

contingency measures. In addition,
should potentially disruptive scenarios
arise, a supply chain impact assessment
will be undertaken with providers of high
priority goods and services to determine
any adverse impact upon their capability
and capacity to support DWF and, where
any shortfall may be identified, apply a
collaborative approach to determining
mitigation measures.
Metrics and targets
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
We are committed to our role in supporting the global transition to a sustainable low-carbon
economy and our ambition is to achieve Net Zero greenhouse gas (‘GHG’) emissions ahead
of the UK Government’s target of 2050, to achieve the goals of the Paris Agreement. This in
turn enables us to mitigate the climate-related risks noted above through contributing to
global action to lessen the impact of climate change on society.
Our key metrics are therefore the Group’s GHG emissions and, in setting targets, we have
committed to the 1.5°C pathway with the SBTi.
Disclose Scope 1, 2 and, if appropriate,
Scope 3 greenhouse gas emissions and
the related risks.
The Group measures Scope 1, 2 and 3 emissions which are summarised in our
Environmental Report on page 43.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities
andperformance against targets.
The targets that have been set in accordance with the SBTi 1.5°C pathway are a reduction of
50% of Scope 1, 2 and 3 greenhouse gas emissions by 2030 against a 2019 baseline. These
targets have been validated by the SBTi in June 2022. More detail on the action being taken
by the Group in achieving these targets can be found below and on page 44.
Environmental reporting
Our approach
In supporting the Group’s ambitious target
to reduce GHG emissions, we are certified to
the ISO 14001: 2015 Standard and have an
Environmental Management System in place
to identify and control the environmental
impact of our business and support the
enhancement of our working practices.
By understanding our impacts together with
our climate-related risks and opportunities,
this allows us to adapt and evolve our
strategy together with the targets set, which
in turn will allow us to build the requisite
resilience needed to appropriately manage
climate-related risks.
Our targets
We are required to report on our
greenhouse gas emissions under the
Streamlined Energy and Carbon Reporting
(‘SECR’) framework for the UK. We report

the Group’s financial year. We also have

been set in accordance with the SBTi. These

Greenhouse gas emissions are classified
under three different scopes:
Scope 1: All direct emissions from the
activities of the organisation or an
organisation under its control, including

fleet vehicles and air-conditioning leaks.
Scope 2: Indirect emissions from electricity
purchased and used by the organisation.
Emissions are created during the production
of the energy eventually used by the
organisation.
Scope 3: All other indirect emissions from
activities of the organisation, occurring from
sources that it does not own or control.
These are usually the greatest share of the
carbon footprint, covering emissions
associated with business travel,
procurement, waste and water.
The targets that have been set in
accordance with the SBTi 1.5°C pathway

greenhouse gas emissions by 2030 against

validated by the SBTi in June 2022.
42 DWF Group plc | Annual Report and Accounts 2022
Strategic report
GHG emissions by financial year:
Reporting Years 2021 & 2022
UK totals
FY2020/21
International
totals
FY2020/21
TOTAL
FY2020/21
UK totals
2021/22
International
totals
2021/22
TOTAL
2021/22
Year-on-year
difference
%
Energy consumption The following data does not account for any renewable energy purchased
Gas and fuel kWh  –   –  (25%)
Electricity kWh 3,034,490      (2%)
Business travel cars kWh  103,381   88,381  45.%
Total energy used in kWh 4,759,127 1,898,928 6,658,055 4,440,486 1,792,894 6,233,380 (8%)
% split across UK and
  29%  29%
Energy consumption The following data discounts renewable electricity purchased
Electricity kWh       
% split across UK and
  93.5% 11.0% 89.0%
Carbon emissions
Scope 1 emissions (TCO
2
) 315 – 315 224 – 224 (29%)
Scope 2 emissions (TCO
2
)    25  495 
Scope 3 emissions not including
procurement (TCO
2
)  293    823 44%
Scope 3 emissions breakdown (TCO
2
)
Waste 1 0 2 2 3 5 225%
Fuel and energy related activities
not included in Scope 2 193 222 415 228 251  
Gas  –  34 – 34 (25%)
Water 3 5 8 1 2 4 (53%)
Rail 10  52 9  293%
Taxi 12 8 20 10 14 24 21%
Air 9 23 32   158 395%
Car 9 25 33 39 20 58 
Total Scope 1 & 2 emissions (TCO
2
)
Location based 331  901 249   (20%)
Total Scope 1, 2 & 3 emissions (TCO
2
)
Location based without
procurement 609 863 1,471 676 866 1,542 5%
Percentage of all scopes emissions 41% 59% 44% 
Total Scope 1, 2 & 3 emissions (TCO
2
)
Market based  1,324 2,935 1,590   1%
We have taken the decision to include the rest of our Scope 3 emissions in line with the SBTi reporting we undertake
Procurement  
Commuting  5,432
Total Scope 1, 2 & 3 emissions (TCO
2
)
Location based including procurement and commuting  10,150
Total TCO
2

  
Methodology: DWF utilises a third party system (Accuvio) in which a record of energy, travel, waste etc. are recorded on a monthly basis, which then calculates
the carbon emissions. (Please note that procurement and commuting are not currently calculated within the Accuvio System and we utilise the Quantis Scope 3
Calculator to calculate emissions.) Data records travel and energy usage globally with the exception of some international offices which are serviced offices.
The analysis uses an operational control approach which means that where there are serviced agreements for utilities, the data is not included in the report.
Commuting data is reported on an assumption basis. Whilst figures have decreased for the last financial year, this is due to COVID-19. Any fuel figures provided
in litres have been converted into kWh or TCO
2
e using Gov.UK and Defra conversion tables. Mileage provided has been converted into TCO
2
e using Defra
conversions. kWh figures for air, rail, taxi and other public transport have been omitted as not practical to convert from passenger km or passenger fares, but
CO
2
e emissions have been calculated using Defra conversion factors.
DWF Group plc | Annual Report and Accounts 2022 43
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
One of the most significant environmental
impacts is reliance on energy to run the
buildings. Our key focus is ensure our
portfolio of commercial property is using
renewable energy with the aim that all UK
offices will be 100% green energy by 2030

amount of gas (Scope 1) used across 44% of
our entire estate. The target is to reduce this
usage, if not to eliminate where possible, by
at least 50% by 2030. In terms of electricity


only). Our aim is to reduce this consumption
by 50% by 2030. Internationally, we will
ensure our estate is also transitioning to
renewable energy insofar as possible.
We have committed to work with Building
Management to encourage the procurement
of Renewable Green Energy across those
sites that do not currently have this and

methods can be introduced; including any
future property expansion whether that be
an office move or office space acquired
during M&A activity to assist with our Scope
1 and 2 Targets. Future office space will take
into consideration the EPC Rating as well as
BREEAM properties.
Whilst the pandemic brought about many
challenges, it also gave us the opportunity

at present there is no intention to re-open
such spaces. Instead, we have created a
transient workforce which in turn requires
less space. Whilst we did see a drop in energy
related emissions, these were not significant
due to the fact that we need to run HVAC/
BMS systems at full at all times to mitigate

Our energy reduction plan includes
continually assessing how we can reduce
energy consumption through heating and
cooling set points, LED/PIR lighting and
automatic computer power downs

We have created an Energy Management
Standard Operating Procedure (attached) to
sit alongside our Energy Management Policy,
which ensures that we continually monitor
energy usage and implement the actions
necessary to reduce the amount of energy
we use.
SBTi methodology
Our overall SBTi target was calculated by
following its methodology outlined in the
target setting tool.
We have calculated the reductions
necessary from a 2019 base year through

our own internal metrics/plans to reduce
our emissions. These will be reported on

material deviation from our planned target,
at which point this will be reported as
described above and remedial actions put in
place if the deviation is within our control.
Energy efficiency
COVID-19 brought about the opportunity

had a positive impact on our emissions. We
have been able to reduce some of our floor
space due to having a transient workforce
and have brought in a more stringent

Meeting our ambitious reduction targets
Energy
Our key focus is to ensure our portfolio of
commercial property is using renewable
energy with the aim that all UK offices will
use 100% green energy by 2030 at the
latest. At present, there is a small amount of
gas (Scope 1) used across 44% of our entire
estate. The target is to reduce this usage, if
not to eliminate where possible, by at least
50% by 2030. In terms of electricity (Scope

renewable energy (over 80% UK only). Our
aim is to reduce this consumption by 50%

estate is also transitioning to renewable
energy insofar as possible.
Our energy reduction plan will also ensure
that we continually assess how we can
reduce energy consumption through
heating and cooling set points, LED/PIR
lighting and automatic computer power
downs, for example.
Travel and commuting
Proactive management of both business
travel and commuting will bring about


financially beneficial.
Stationery and print
Further embed our digitalisation
programme, which in turn will reduce the

envelopes etc.
Supply chain
We are working with our supply chain to
develop ways to reduce environmental
impacts. We review the environmental
credentials of suppliers as part of the
onboarding process and then throughout
the term of the contract, undertake audits
and review the provisions in place, ensuring
their appropriateness throughout the term

Risks
Our ambition is to be Net Zero by 2030.

conditions means that we need to be
conscious of the impacts this could have


climate-related risks and opportunities

GHG emissions by calendar year (and in accordance with the SBTi):
Calendar Year 2021
Scope 1
(Gas)
Scope 2
(Electric)
SBTi Calculated Target 321 Tonnes of CO
2

2
Actual 298 Tonnes of CO
2
559 Tonnes of CO
2
Overview
Ahead of Target predominantly
due to the Pandemic.
The lack of availability of renewables
also impacted Scope 1 across some
of our sites.
Ahead of Target predominantly
due to the Pandemic.
The lack of availability of renewables
also impacted Scope 2 across some
of our sites.
44 DWF Group plc | Annual Report and Accounts 2022
Strategic report
We have identified areas we need to
continually monitor, applying the ‘Plan, Do,
Check, Act’ model, which in turn will allow us
to adapt and evolve our strategy taking into
account those risks and opportunities
identified. Associated risks that can impact
our ability to meet these targets are
described below:
• A change in the proposed 1.5 degree
pathway will mean we need to reconsider
our approach, and significant changes
may also mean that our reduction targets
will not be achievable by 2030.
• Disruption due to international conflict
may have a significant impact on global
emissions, therefore meaning our current

• Global situations may affect the
availability of renewable energy sources,
impeding our ability to move to 100%
renewable energy across our portfolio.
• Energy costs are increasing significantly
and, if this continues, landlords/building
management as well as suppliers may
steer away from renewable energy,

non-renewable option.
• A material change in the size of our
business will mean we will need to apply

the SBTi.
• Financial – Price increases as supplies
become less available.
• Supply chain may experience disruption
based on environmental and geopolitical
factors inhibiting supplies to DWF.
Engagement
We recently trialled the Pawprint app


people measure, understand and reduce
their carbon footprint. It empowers
employees to fight climate change at work,
home and beyond.
The benefits of using an app like Pawprint
are that it allows us to:
• Engage our colleagues; use our best asset

• See our impact; transform ESG from a
box-ticking exercise into measurable impact.
• Future-proof; protect the future of our
business, and our planet.
Results were positive, with significant
carbon savings; many habits formed which
mean people will continue to take action to

engagement and the sharing of ideas.
We are currently considering the results of


further across the business.
Training
During 2021, we rolled out the Carbon
Literacy Project (‘CLP’) training for our
employees. In order for us to do this, we

verified by the CLP. So far, training has taken
place with approximately 25 people – all
achieving certification. A schedule of training


people across the business. We are pleased
to report that we have achieved Bronze
Standard from the CLP.
Diversity & Inclusion
Our approach
Our vision is to create a working
environment and culture where colleagues
of all different backgrounds are able to
contribute at their highest level to deliver
positive outcomes with our colleagues,
clients and communities. This means
sustaining a workplace where everyone is
included, valued and equipped with skills for
today and the future.
In May 2021, we launched our five-year global
D&I Strategy to work towards gender balance
across all levels of management, embed
ambitious new targets on both gender and
ethnic diversity, as well as expanding the
scope of our pay gap reporting.
Our priorities:
Ownership
Employee-led networks connect like-minded
colleagues and create a space to voice their
experience.
Representation
Actions are data driven so we can build
diverse representation at all levels of our
business.
Global direction
Locations come together to celebrate and
champion Diversity & Inclusion through
global campaigns.
Driving decisions
Divisional Action Plans and D&I Leadership
oversight helps to keep D&I top of mind.
Sense of belonging
Addressing the engagement drivers that
most substantially continue to employee
and business outcomes.
Our Diversity & Inclusion performance
Gender (female representation as at March 2022)
Representation as at
 Target
PLC Board  40%
Executive Board  40%
Senior management 39% 40%
All colleagues 58%
Ethnicity
PLC Board members from a minority ethnic background 10%
Executive Board 0%
 4% 10%
 12% 13%
Black representation overall and in senior roles 1% 3%
Disability
% of colleagues who disclose that they have a disability 3%
Sexual orientation and gender identity
% of colleagues who disclose that they are lesbian, gay, bisexual or trans 4%
DWF Group plc | Annual Report and Accounts 2022 45
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
Social Mobility
DWF continue to take positive steps towards
tackling social mobility and have again

the Social Mobility Employer Index at 51. The

taking the most action to ensure they are
open to accessing and progressing talent
from all backgrounds. We also publish our
social mobility data here (England only):
https://dwfgroup.com/about-us/diversity-
and-inclusion
Our targets
Over the last three years, our D&I targets
have demonstrated to stakeholders that



Our new targets signal our intent to

• Increase the proportion of women on the
PLC & Executive Boards to 40% by 2025.
• Increase the proportion of senior
management roles held by women
globally to at least 40% by 2025.
• In the UK, increase the representation

colleagues across senior management

• In the UK, increase the representation

colleagues across all career bands to 13%.
• Increase Black representation overall and
in senior roles to at least 3% by 2025.
• The Board to initiate global gender pay
gap reporting by 2022 (In addition to
ethnicity, publish UK pay data by disability
and LGBT+ by 2023).
• The Board to review additional targets

December 2022.
Progress against targets 2019-2022
• The Board to maintain its current gender
diversity with no fewer than three women
on the board – Achieved
• Increase female representation on the
Executive Board to at least 33% by 2022
– Achieved
• Women to hold at least 30% of senior
leadership positions by 2022 – On target
• Target to achieve at least 10% Black, Asian
and Minority Ethnic representation across
senior leadership positions by 2022 – Not
on target
• The Board to initiate ethnicity pay gap
reporting by the end of 2020 – Achieved
• The launch of our latest D&I strategy in
May 2021 and subsequent ESG strategy

do better, recognising we fell short by a
considerable margin on our target to
achieve at least 10% Black, Asian and
Minority Ethnic representation across
senior leadership positions by 2022. This
target was retained and incorporated
within a suite of new stretch targets
agreed to 2025.
Our Gender and Ethnicity Pay Gap Report
In March 2022, we published our fifth
gender pay gap report and marked the
second time we voluntarily included details
of our ethnicity pay gap. The figures are
available on pages 113 and 114 of the report
and the report in full is published on

Disability statement
The Group is committed to creating

organisation where colleagues with disabilities
or long-term health conditions feel valued and

training, career development and promotion

D&I benchmarking
2021/22
Times Top 50
Employer for Women
Global Stonewall
Diversity Champion
Top 30 Employer for
Working Families



Disability

Gold Standard in the
Employer Network for
Equality & Inclusion’s
TIDE (Talent Inclusion
& Diversity Evaluation)
benchmark
UK Living Wage
Employer since 2014
46 DWF Group plc | Annual Report and Accounts 2022
Strategic report
We retain our Disability Confident
Leadership status, which recognises our
inclusive culture and the steps taken to
identify and remove barriers to disabled
talent reaching their full potential. Our use

manage the process of identifying,
implementing and tracking the adjustments
that allow colleagues to feel included and
perform at their best. The platform is not
only there to overcome barriers that a
disabled person may face in recruitment
and employment but also to overcome
barriers which having caring responsibilities,
being of a particular race or culture or being
trans, for example, may present.
Delivering positive outcomes with
ourcolleagues
Our colleagues bring our purpose to life and
so we remain committed to recruiting and
developing top talent, investing in their
development and wellbeing, advancing
social mobility and increasing engagement
through values-led behaviour to achieve
higher levels of job satisfaction. We are
listening to understand how we can do
better and working hard to foster a culture
of recognition and appreciation

Responding to colleague feedback and in
keeping with our purpose and the principles
of DWF Life, we are making significant
improvements to our family friendly policies.
From May 1, our UK colleagues will benefit
from an increase in Maternity Pay and

weeks. Paternity Leave will increase from
two to four weeks at full pay and Shared
Parental Leave from full salary for the first
two weeks to eight weeks of full salary.
As a future-focused business, we continue

working to sustain a high-performing,
inclusive workplace.
DWF Life
In 2021, we launched our employee value
proposition (‘EVP’) to position DWF as an
employer of choice in a competitive labour
market, and to make our brand accessible

empowering each other to share experiences
and ideas, and where our colleagues feel
valued, recognised and can be themselves.
DWF Life brings together all of the essential
elements of what it means to be a part of
DWF, ensuring that together all of our
colleagues continue to make DWF a great
place to work.
Colleague health and wellbeing
In delivering on our purpose, our wellbeing
strategy aims to create and sustain a healthy
working environment where everyone at
DWF feels supported and comfortable to
speak openly about their wellbeing. Our
Wellbeing Hub provides colleagues with
access to a range of interactive guides,
information and support, and our Wellbeing
Leadership Group oversees our four pillars
of activity:
Physical Mental Lifestyle Working
Environment
In 2021, we formalised the role of the Mental
Health First Aider to help spot the signs and
symptoms of common mental health issues
and to provide preliminary support and
reassurance. Workplace Options, our
Employee Assistance Programme, is one

available to everyone from the day that

colleagues 24 hours a day, seven days a week.
Learning and development
At DWF, we are committed to developing

everyone has an opportunity to contribute
more and grow their career. Our aim is to
recognise and nurture the knowledge, skills
and behaviours to achieve our global
ambitions and we aim to appoint diverse,
agile and multidisciplinary colleagues across
every demographic.
Through our DWF Academy, we offer
colleagues three programmes of training
– Foundations, Essentials and Leadership.
Each programme is designed with a target
audience in mind to equip colleagues with
the skills they need to excel in their current
role and prepare them for progression.
Mindcrest University is our divisional
training and development programme
supporting colleagues within our Alternative
Legal Services Provider division. Its
curriculum includes over 200 courses and
employs a variety of learning methods,
including mentoring, classroom training,
online coursework and eLearning modules.
Performance and career development
All of our colleagues receive an annual
performance review.
There are two routes to promotion at DWF
– our annual process, driven by an individual
business case, and vacancy driven, which is
dependent on business need and managed
through our internal resourcing route.
During 2021, the annual promotion process
positively impacted 224 colleagues.
Promotion gender split
 
 
As a leading Social Mobility Employer, we


profession. In the UK, we continue to use
contextual assessment of graduate
recruitment in a bid to attract a more diverse
talent pool and increase social mobility.
In April 2021, we launched a targeted social
mobility scheme, designed to give diverse
underrepresented candidates from Black,
Asian and Minority Ethnic backgrounds the
opportunity to gain exposure to commercial
law in practice and help progress their


apprenticeship levy allowance to future-
proof our skills pipeline, and attract a
diverse range of talent into the business.
The programmes we offer range from level 3

master’s degree apprenticeships.
Number of apprentices
180
DWF Group plc | Annual Report and Accounts 2022 47
Strategic report Governance Financial statements Other information
Environmental, Social and Governance report continued
Benefits and pensions
An important element of DWF Life is the
rewards and benefits that we offer our
colleagues, in return for their performance
within the workplace. Through our flexible
reward and benefits platform, Reward Plus,

benefits, whilst providing colleagues and their
families with a range of benefits designed to
meet the needs of our diverse workforce and
help to protect and enhance the wellbeing,
work and personal life balance, and financial
security of our colleagues and their families.
Colleague engagement
The business is kept informed of the

communications including our Weekly
Digest, CEO weekly updates by email,

supplemented by updates on our Intranet.
We carry out a bi-annual global Pulse Survey
as a key measure of engagement, to find out
directly from our colleagues how they feel
about working at DWF. Given the challenging
working environment created by COVID-19, we
are pleased to see levels of engagement have
remained relatively stable in the context of an
increasing number of respondents.
Recognition
We use a digital platform to recognise and
celebrate colleagues who live our values

performance and the contributions they
make to DWF.
On average, around 1,500 recognitions are
made monthly. Managers can ‘boost’ someone
else’s recognition and award extra points,

Our annual Rubie Awards recognise
colleagues who have not only inspired but
who have gone above and beyond, as we
collectively work toward our purpose to
deliver positive outcomes with our
colleagues, clients and communities.
Our Code of Conduct
The Board understands its role in setting the
tone of the DWF Group’s culture, ensuring it


fundamental the combination of a strong
culture and values are in guiding the Group
towards achieving its purpose. On that basis,


changes to internal policies and processes


DWF Foundation giving 2021/22
 


 
 
 

Volunteering
Despite COVID-19 continuing to restrict

hours to support their local communities and

DWF volunteering
1 May 2021–30 April 2022
 

 
 
 
 
Standing with the people of Ukraine
DWF is shocked and appalled by Russia’s
assault on Ukraine. We condemn the
invasion. We stand together in solidarity with
the people of Ukraine and hope for a swift
and peaceful resolution.
We have no offices in Russia or Ukraine, but
we are doing all we can to support any of

affected by this conflict. We are especially
proud of our colleagues in Poland who are
supporting refugees in the provision of aid,


in conjunction with the DWF Foundation and
with the help of colleagues around the world,
we raised over £100,000.00.
Delivering positive outcomes with
ourclients
Identifying and managing risk is key to our
business. We are working to deliver positive
outcomes by embedding responsible,
sustainable decision making into everything
we do. Doing so helps us deliver long-term
Shareholder value and protects our
business, our colleagues and our reputation.
Clients want to understand how we can
support them, and by integrating additional
ESG concerns into our client due diligence
and reframing the way we market our ESG
expertise to future-proof their businesses,
we will retain the ability to both retain and
grow the number of clients we work with.
We collaborate with our clients on issue-based
topics aligned to sustainability and ESG
through various ways, including: roundtables,
sponsorships, webinars and podcasts.
In 2021, we surveyed 480 senior executives
at companies located all around the world
and across each of our eight sectors. The
research asked what companies are doing
now compared with what they were doing
two years ago, and what they are planning

sustainability and build greater social and
economic equity for future generations.
The findings confirmed that ESG is not an issue
for the future, but something requiring
immediate attention, with one in five
companies explaining how perceptions of a
weak ESG performance are resulting in the loss

Delivering positive outcomes with
ourcommunities
Our colleagues continue to be the driving force
behind our community engagement efforts.

colleagues to use their talent, skills and insight
to strengthen our communities through
volunteering and global pro bono support.
DWF Foundation
The DWF Foundation is an independent
charity, founded by DWF. It has the sole aim
of providing funds, resources and mentoring
support to help individuals, groups and
communities to achieve their full potential.
Since the Foundation launched on
1 December 2015, a total amount of


Grants awarded since The DWF
Foundation since 2015

In the last financial year:
Raised £317,725
Number of grants 116
48 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Non-Financial
InformationStatement
The following table sets out where stakeholders can find relevant non-financial information within this Annual Report and Accounts, further
to the Financial Reporting Directive requirements contained in sections 414CA and 414CB of the Companies Act 2006. Where possible, it also
states where additional information can be found that support these requirements.
Reporting topic Policies and standards which govern our approach Annual Report and Accounts section reference Page number
Environmental • Environmental, Social and
GovernanceStrategy
• Supplier Code of Conduct
• Sustainable Development Goals
Environmental, Social and Governance report 32 to 48
Employees • Environmental, Social and
GovernanceStrategy
• Code of Conduct
• Ethics Statement
• Diversity & Inclusion policy
• Speak Up policy and Helpline
Environmental, Social and Governance report –
Delivering positive outcomes with our colleagues
Engaging with our stakeholders
Corporate Governance report
47 to 48
26 to 31
57 to 71
Social and
community
matters
• Environmental, Social and
GovernanceStrategy
• DWF Foundation
Environmental, Social and Governance report –
Delivering positive outcomes with our communities
Engaging with our stakeholders
48
26 to 31
Respect for
human rights
• Environmental, Social and
GovernanceStrategy
• Supplier Code of Conduct
• Modern SlaveryStatement
• Human Rights policy
Environmental, Social and Governance report
Engaging with our stakeholders
32 to 48
26 to 31
Anti-Bribery
andcorruption
• Anti-Bribery and Corruption policy Corporate Governance report 66
Business model Our business model 12 to 13
Principal risks
and uncertainties
• Risk taxonomy
• Risk register
Risk management
Principal risks
Risk Committee report
50 to 51
52 to 54
80 to 82
Non-financial
KPIs
• Environmental, Social and
GovernanceStrategy
Key performance indicators 20 to 21
DWF Group plc | Annual Report and Accounts 2022 49
Strategic report Governance Financial statements Other information
Risk management,
our approach
Risk management
The Group’s risk management framework
outlines the Group’s commitment and
approach to good risk management. The
framework is reviewed annually to ensure
that it aligns to both the internal and
external environment, as well as to the
Group’s strategy. Its purpose is to ensure
that the organisational approach to risk is
clearly understood and effectively managed
across all areas of the business.
The framework identifies the roles and
responsibilities of everyone in the Group
and the integral part that they play in the
management of risk.
All risks are assessed considering the
combination of impact and likelihood and, as
risk management is an ongoing process that
is centred on the identification of the risks
and responding to them proportionately,
assessments are reviewed quarterly. This
allows us to manage risk to a tolerable level.
Risks are assessed by using a risk matrix and
our defined risk appetite. The appetite itself,
which is set by the Board of Directors, is also
reviewed annually. Overall, DWF has an ‘open’
appetite for risk in the pursuit of its strategic
and business objectives. This means that
the business is willing to consider all potential
options when faced with risk and will
choosethe one that is most likely to result
insuccessful delivery of our strategy,
whilstensuring an acceptable level
ofriskand reward.
Since the launch of our ESG Strategy, we
haveapplied an ESG lens when assessing
ourrisks; our review for FY2022/23
recommends a designated principal risk
forESG in our risk taxonomy.
At DWF, we recognise the importance of
astrong culture of compliance, ethics and
integrity, and we have an ‘adverse’ appetite
forrisks relating to legal and regulatory
compliance, among others.
Our underpinning risk principles
The Board of Directors has overall
responsibility for ensuring the business has
robust risk management and internal control
arrangements in place. The Board sets the
tone for risk management and internal
control, defines the organisation’s risk
taxonomy and overall risk appetite, and
influences the culture of the business.
The Risk and Audit Committees are
established as committees of the Board
ofDirectors. They are responsible for
overseeing risk management and assurance
processes.
Each Executive Board (‘ExBo’) member is
responsible for setting the tone for a strong
risk management and internal control
culture across all areas of the business.
The Group Risk team is responsible
fordesigning and implementing a fit for
purpose Enterprise risk management
framework, and working with management
and ExBo to ensure key risks are properly
understood, and are being appropriately
managed/mitigated.
All colleagues with management
responsibilities are responsible for ensuring
the key risks within the areas of activity
under their management are clearly
understood, and that appropriate controls
are in place to effectively manage and
mitigate those risks.
Control activities – three lines of defence
DWF operates a three lines of defence model.
First line roles provide service excellence to
our clients, whilst managing the risks to
delivery of that service.
Our second line roles provide expertise,
support, monitoring and challenge on
risk-related matters.
The third line roles provide independent and
objective assurance and advice on all matters
related to the achievement of objectives.
In addition to our internal mechanisms,
wehave external assurance providers who
provide reviews and input to our risk
management activity.
50 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Risk appetite
The Group’s risk appetite, set by the Board and reviewed annually, sets out how we balance risk and opportunity in pursuit of
ourobjectives.
Appetite DWF risk appetite definition
Averse Avoidance of risk and uncertainty in achievement of key deliverables or initiatives is paramount. Activities
undertaken will only be those considered to carry virtually no residual risk.
Minimalist Preference to undertake activities considered to be very safe in the achievement of key deliverables or initiatives.
Activities will only be taken where they have a low degree of residual risk. The associated potential for reward/
pursuit of opportunity is not a key driver in selecting activities.
Cautious Willing to accept/tolerate a degree of risk in selecting which activities to undertake to achieve key deliverables
orinitiatives, where we have identified scope to achieve significant reward and/or realise an opportunity.
Activities undertaken may carry a high degree of inherent risk that is deemed controllable toalarge extent.
Open Undertakes activities by seeking to achieve a balance between a high likelihood of successful delivery and
ahighdegree of reward and value for money. Activities themselves may potentially carry, or contribute to,
ahighdegree of residual risk.
Hungry Eager to be innovative and choose activities that focus on maximising opportunities (additional benefits
andgoals) and offering potentially very high reward, even if these activities carry a very high residual risk.
Overall risk appetite statement
DWF overall maintains a ‘cautious’ risk appetite; this is tempered with an ‘averse’ risk appetite for criminality and non-compliance in the areas
of conduct and ethics.
As a Group, we will only behave in ways that:
• do not conflict with the Group’s values and are aligned with its risk appetite and business strategy;
• do not expose the Group’s capital position or the resilience of its services;
• do not conflict with the Group’s ESG Strategy and are aligned with the needs to reduce any negative impact we may have on our planet
and communities;
• are aligned with the needs of the Group’s clients and ensure that they are treated fairly; and
• are always in accordance with local laws and regulations.
Three lines of defence
External assurance providers
Governing body
Accountability to stakeholders for organisational oversight
Governing body roles:
Integrity, leadership and transparency
Management
Actions (including managing risk) to achieve organisational objectives
Internal Audit
Independent assurance
First line roles:
Provision of products/services
toclients, managing and
reportingrisk
Second line roles:
Expertise, support,
monitoringandchallenge
onrisk-related matters
Third line roles:
Independent and objective assurance
and advice on allmatters related to the
achievement of objectives
DWF Group plc | Annual Report and Accounts 2022 51
Strategic report Governance Financial statements Other information
Principal risks
During the financial year 2021/22, there
have been two significant events that
have created global risks:
• the changing approach to the
COVID-19 pandemic, including the
restrictions, changing expectations
regarding work patterns and their
impact on economies and people; and
• the invasion by Russia of Ukraine,
which has brought with it sanctions
against individuals and organisations
and increased overall global instability.
DWF remains alert to these situations
and actively implements actions to limit
their impact on, and ensure the
sustainability of, our business.
Business, commercial and strategy risk
Risk rating: Stable
Viability risk:
Yes
Continuing to deliver to a broad client base
across diverse sectors, through a wide-
ranging portfolio of integrated legal and
business products and services, has enabled
us to limit negative impacts and optimise
business opportunities. Having a multi-
jurisdictional reach has ensured that we are
well equipped to handle the material
macroeconomic challenges as well as more
local changes in laws, client needs and the
range of demands on our colleagues.
We continue to retain an overall ‘open’
riskappetite when managing our business
model and strategy.
Our relationships with our clients,
regulators, sector and all stakeholders are
based on our reputation, and we retain
a‘cautious’ risk appetite in that regard.
Example of risk mitigating action:
We have introduced a new policy and
process for risk assessing our clients against
our ESG Strategy. This will ensure there is no
compromise to our goals, and that clients
who require help on their journey can tap
into our knowledge and expertise in
thisarea.
Conduct and ethics risk
Risk rating: Stable
Viability risk:
No
We continue to have an ‘averse’ risk
appetitefor any risks that threaten our ability
tocomply with all relevant
lawsandregulations.
Example of risk mitigating action:
The Group maintains an active dialogue,
andstrong relationships, across all its
keyregulators. This ensures awareness
ofchanging legal and regulatory
landscapes,allowing a proactive
approachinensuring compliance.
The Group’s Risk & SanctionsCommittee
ensures we comply with changing sanctions
globally imposed as a result of the Russian
invasion of Ukraine.
People risk
Risk rating: Stable
Viability risk:
No
The expertise, commitment and
professionalism of our colleagues have
enabled the DWF of today; to protect that,
wehave a ‘cautious’ appetite for risks that
threaten our ability to recruit and retain
ourpeople.
We have an ‘averse’ risk appetite for
discrimination, bullying and unfair treatment
of our colleagues, and actively promote our
Diversity & Inclusion agenda.
With ever-increasing job market demands, we
focus on attracting and retaining the highest
calibre of individuals who are best placed to
deliver service excellence for our clients.
Example of risk mitigating action:
We have broadened the scope of, and been
more innovative in, our approach to reward
and recognition.
To achieve our purpose of delivering positive
outcomes with our colleagues, we have a
Code of Conduct and an ethos of supporting,
developing and incentivising our colleagues
through ‘DWFLife’, built on our values,
culture andexcellence.
Principal risks
52 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Operational risk
Risk rating: Stable
Viability risk:
No
At the beginning of our financial year
2021/22, we reviewed our overall appetite for
operational risk, and amended itto‘open’.
We have maintained and, in a number of
areas, strengthened appropriate operational
processes, systems and controls to support
delivery of, and enhancement to, those
systems. This closed the gap with our
‘hungry’ appetite for taking well managed
risks where opportunities to create discernible
benefits through innovation could assist in
the achievement of our objectives.
However, to operate as an effective risk-
based legal and business service provider,
wehave a heavy reliance on information
anddata, meaning we maintained our
‘minimalist’ appetite for inappropriate
disclosure of sensitive information.
Example of risk mitigating action:
Our strategic projects portfolio continues
across our business to align to the
mitigation of risks in some of our key
operational areas.
We have continued to invest in
infrastructure and security controls to
further protect us and our clients from
increasing global, and particularly legal
sector, cyber attacks.
Financial and reporting risk
Risk rating: Stable
Viability risk:
No
We have maintained our ‘minimalist’ appetite
for finance and reporting including liquidity
risk and for any risks that may threaten our
financial stability.
The Group manages its working capital with
the use of external debt facilities including
the Group’s revolving credit facility. As with
many organisations, the Group actively
manages its liquidity risk, ensuring
compliance with covenants and managing
thefuture availability of funding.
Example of risk mitigating action:
The Group Treasury function is responsible
for managing the Group’s liquidity and
ensuring compliance with financial
covenants. Forecast covenant compliance is
reviewed on a monthly basis. This exercise
reflects reported results as well as regular
updates to forecast results. Scenario
analysis, alongside these monthly reviews,
isperformed on a regular basis to ensure
reasonable worst case scenarios do not
cause an unexpected financial stability
issueand any material events can be
pre-emptively managed. Liquidity risks
brought about by unexpected and material
professional indemnity claims are mitigated,
in part, by the insurance policies we hold
across the Group.
The Treasury function manages our
relationships with the Group’s debt providers.
In the year, the Group has refinanced its
revolving credit facility, which expires in
December 2024, with two one-year extension
options. The Group aims to renew or
extendits main facilities 18 to 24 months
before expiry.
Financial crime risk
Risk rating: Stable
Viability risk:
Yes
We do not waiver on our ‘averse’ risk appetite
for internal fraud or the inadvertent facilitation
of financial crime (including anti-bribery
andcorruption).
Fraud and general financial crime have been
more prevalent across the legal sector since
the constraints of COVID-19.
We continue to maintain, and regularly review,
appropriately robust controls and sanctions
to maximise our prevention, detection and
deterrence of potential financial crime activity.
Example of risk mitigating action:
The Group has a suite of policies and
mandatory training implemented which
isregularly reviewed to ensure we are able
toidentify and mitigate the risk of any
suspicious activity. We have various risk
assessments undertaken on new clients
andnew matters. Our Anti-Bribery and
Corruption policy is an example of one of
our financial crime policies.
We also have a Speak Up policy and Speak
Up hotline should anyone have the need
toreport on suspicions, and we take these
veryseriously, with rigorous and in-depth
investigations carried out on any reports.
Subsequent actions are taken on
investigative findings and lessons learnt.
Principal risks
DWF Group plc | Annual Report and Accounts 2022 53
Strategic report Governance Financial statements Other information
Emerging risks and uncertainties
The Group defines emerging risks as
newor unforeseen risks, often external
in nature that may be difficult to quantify
but may materially affect the Group.
Where such risks merit further analysis
and consideration, they are defined
asemerging.
The Group Risk function continues to
work with first line of defence subject
matter experts to enhance the quality
and detail of emerging risk updates.
Quarterly Divisional Risk Register reviews
and those of the support functions include
discussions on emerging risks which are,
where necessary, escalated to the Group
and Strategic Risk Registers.
Our monitoring of emerging risks enables
the Groupto:
• identify and monitor a broad range
ofpotential emerging risks;
• take a proactive approach to their risk
management and reporting; and
• present and implement plans to
mitigate those emerging risks which
could impact the delivery of the
Group’s Strategy.
The Risk Committee is presented with
anannual update on emerging risks,
supplemented by deep dives into the
management and control of selected
emerging risks.
Our Executive Board continue to horizon
scan and monitor emerging risks and
uncertainties that could impact our
business, such as economic risk/inflation
and government instability, and are
always poised to take mitigating actions
to protect our business and our clients.
Our response to COVID-19
Risk rating: Stable
Viability risk:
Yes
During the financial year 2021/22, the global
management of COVID-19 moved to
implementation of vaccination programmes
and gradual lifting of lockdown restrictions.
The Group continued to follow Government
guidelines across all jurisdictions,
supporting our colleagues with the tools to
dotheir jobs remotely and providing safe
locations from which they could work
whenreduced restrictions allowed. Our
ways of working have been flexible to the
needs of our colleagues, our clients and our
communities, to ensure both physical and
mental health is protected, whilst service
excellence is not compromised.
We have embraced technology which has
afforded us enhanced connectivity across
our locations, colleagues and clients without
any negative impact on our ESG aspirations.
The Group’s Crisis Management framework
continues to support the ongoing
management of the changes in legislative
and societal requirements as the virus
continues to mutate and impact in
varyingways.
Our response to the Russian invasion
ofUkraine
Risk rating: Stable
Viability risk:
No
During the financial year 2021/22, Russia
invaded Ukraine. Whilst DWF does not have
an office presence in Ukraine, many of our
colleagues, particularly those based in our
Polish office, have family, friends and clients
across the border in Ukraine.
As details of acts of support, heroism,
generosity and humanity among our
colleagues emerged, DWF mobilised its
efforts to support financially the Ukraine
relief efforts.
DWF’s Risk & Sanctions Committee oversaw
the appropriate response, governance and
decision making in light of the changes in
sanctions legislation swiftly imposed by
Governments across the world.
Whilst DWF does not have a significant
number of Russian clients, we did see an
increase in potential new instructions which
were all reviewed by the Committee. The
majority of new enquiries considered by the
Committee were declined.
Sustainability including ESG
Risk rating: Stable
Viability risk:
No
Following the endorsement by the Board
ofour ESG Strategy, to scale our collective
ambition and impact globally, the Group
Head of ESG sits on the Executive Board
andsupports it in overseeing the
effectiveness of the strategy. Together
theseforums determine the further actions
needed toimprove our ESG performance.
The ESG Leadership Group and its
respective teams have a number of
initiatives underway through an ESG
programme reporting to the Leadership
Group. This programme aligns the initiatives
with the six pillars of our ESG Strategy:
• Climate action
• Diversity & Inclusion
• Empowering colleagues and
ourcommunities
• Supporting and connecting with
ourclients
• Acting with integrity in everything that we do
• Building trust and increasing transparency
These pillars have been developed and
expressed to engage our colleagues, echo
the concerns raised by our stakeholders and
help to prioritise our areas of focus. The key
ESG areas of concern for stakeholders
identified through the materiality
assessment are:
• Ethics, Integrity, Fraud, Bribery & Corruption;
• Governance;
• Diversity & Inclusion;
• Climate Action; and
• Trust and Transparency.
The continuation of ESG integration into
ourrisk management is designed to deliver
even more robust processes, to ensure
wecontinue to work with law-abiding
businesses that demonstrate responsible
business in practice, meeting all legal and
regulatory requirements, and support
clients to improve their ESG performance,
whilst we continue to improve ours.
Principal risks continued
54 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Viability statement
Viability
In accordance with the UK Corporate
Governance Code 2018, the Directors have
assessed the viability of the Group, taking
into account the current financial position
including financing arrangements and the
Group’s principal risks. This assessment is
designed to encourage directors to focus
onthe future prospects of the Group and
toensure that principal risks are being
managed effectively and for the longer term.
In assessing the Group’s viability, a number
of factors are considered, including the
business model (see pages 12 to 13), the
Group’s strategy (see pages 14 to 15), risk
management (see pages 50 to 51) and the
Group’s principal risks (see pages 52 to 54).
Those factors which have a material impact
on the Group’s viability are outlined below.
Assessment period
The Directors’ assessment of viability covers
a three-year period to 30 April 2025 which is
consistent with the following:
• Strategy: The Group’s three-year plan,
which is updated and approved annually
by the Board sets out the strategic vision
and priorities over that period to ensure
the Group delivers on its ambition against
the backdrop of the principal risks
outlined in the Strategic report.
• Financial strategy and funding: The
Group’s principle financing facility is a
rolling credit facility which was refinanced
in December 2021 for an initial period of
three years (with two one-year
extensionoptions).
• Employee benefits: employee share
awards typically have an average vesting
period of three years or less and LTIP
awards for executive directors are made
over a three year performance period.
The three year period is also deemed
suitable against an ever changing macro
environment in which the Group
currentlyoperates.
Risks considered within the
viabilityperiod
In the assessment of the Group’s viability
the following factors have been considered:
Group strategic aims and purpose
The Group has a number of strategic
initiatives in order to achieve future growth
as considered in the three-year planning
cycle. These focus on delivering positive
outcomes for our clients, colleagues and
communities and centre around delivering
profitable organic growth, Inorganic growth
via carefully selected acquisitions and
establishment of new services and margin
expansion. The cost impact of these
strategic priorities are considered within
thebudget base case.
Macro environmental factors
The current macroeconomic environment
remains volatile and the Directors remain
vigilant and agile to the continually changing
environment. Directors continually monitor
the actual results and reassess the forecast
outlook on a monthly basis to consider
appropriate action on the ever-changing
riskhorizon.
Financial resources
The Group closed the year with committed
Banking Facilities of £127m (of which £97m
were drawn, but with a net cash balance of
£25m), the largest of which is the £100m
rolling credit facility (RCF) which was
re-financed in December 2021 to increase
the facilities available to the Group. This RCF
has an initial maturity of three years with
two one-year extensions and is subject to
financial covenants as outlined in the going
concern assessment on pages 130 to 131.
The undrawn portion of the RCF is readily
accessible and does not require any further
approval for drawdown by the Group’s
banking syndicate. Associated with the
facility is a further £20m accordion facility
which is available on the same terms as the
original RCF but is subject to the agreement
of the banking syndicate for drawdown. The
modelled assumption is that we do not draw
on this. The facility agreement also permits
the Group to obtain a further £30m of
external funding and £15m of leasing
facilities if required. We expect to be able
torefinance external debt and renew
committed facilities as they become due,
which is the assumption made in the viability
scenario modelling. The 3 year plan also
anticipates a reducing net debt profile and
areduction in leverage.
Principal risks
All of the principal risks detailed on pages
52to 54 have been considered but three
scenarios have been identified which are
linked to the Group’s principal risks and
would likely have a material impact on the
Group’s business model. These scenarios
form the severe but plausible downside
scenario that has been assessed against the
Group’s projected cash flow position and
banking covenants over the three-year
viability period.
Although not specially highlighted, the
scenarios noted above inherently include
the Finance and Reporting Risks which are
included within the Group’s principal risks.
Assessment of viability
The viability period has been appraised
based on the Board approved base case
sensitised for the severe but plausible
downside cases noted above. None of the
modelled scenarios presented a significant
threat to the Groups liquidity position and
ability to meet covenant thresholds. Each
scenario considers available mitigations to
the Group in the event the downside
scenario would materialise and these
include but are not limited to:
• Freezing recruitment and a slowdown in
investment in recruitment and reward;
• Reducing discretionary operating spend
such as marketing and travel;
• Reducing non-committed capital
expenditure;
• Revision of the existing dividend policy;
and
• Cost cutting measures in non-fee earning
areas including an acceleration of the
execution of the Group’s real estate
strategy and a reduction in headcount.
Conclusion
Based on the severe but plausible downside
scenarios modelled above the Directors
consider the Group to have sufficient
resources to continue in operation, comply
with all covenants over the viability period
and to meets its liabilities as they fall due
across the three-year assessment period.
DWF Group plc | Annual Report and Accounts 2022 55
Strategic report Governance Financial statements Other information
Scenario Principal Risk Description
M&A activity Business, Commercial
andStrategy Risk
A scenario was modelled on a range of potential M&A activities assessing
impacts on Net Assets, Cash flows and Covenants, including the potential
short-term downside impact on the Leverage covenant.
Commercial downside that
results in Revenue downside
Business, Commercial and
Strategy Risk People Risk
That we see a reduction in demand caused by either macro environment
factors, commercial pipeline, attrition and our ability to retain or attract the
correct level of talent.
Increased inflationary
pressures
Business, Commercial
andStrategy Risk
Inflationary pressures that have been seen in the macro environment result
inincreased supplier and people cost base. The scenario modelled is that
inflation continues to rise above that set out in the base case.
Approval of the Strategic Report
By order of the Board
Jonathan Bloomer
Chair
20 July 2022
Viability statement continued
56 DWF Group plc | Annual Report and Accounts 2022
Strategic report
Chair’s governance overview
Dear Shareholder,
On behalf of the Board, I am pleased to
present the Corporate Governance report
for the year ended 30 April 2022.
At DWF, we recognise the importance of
effective corporate governance in supporting
the long-term success and sustainability of
our business. This section of the Annual
Report and Accounts sets out how we have
ensured all of the Group’s activities are
underpinned by the highest standards of
corporate governance and illustrates how
the Board has considered the Group’s
purpose and strategy throughout its
decision making.
Purpose, values and culture
The Board understands its role in setting the
tone of the Group’s culture, ensuring it aligns
with our purpose, values and strategy. This
isof particular importance when considering
the significant change the Group has
undergone in recent years, and also the
headwinds affecting all businesses globally.
Our values are at the heart of our inclusive
culture, providing a clear foundation for
our colleagues, and are integral to the
achievement of our strategy. They influence
actions and behaviours, complement
our strategic direction and support the
integration of colleagues that join our
business. As we continue our growth strategy
via acquisitions and associations, this will be
fundamental to our success.
Overall, I am pleased to report that the
Board and its committees are operating
effectively. SCT Consultants has presented
its recommendations to the Board and
anaction plan has been developed to
implement the recommendations.
Further details of the outcomes following
the Board evaluation can be found on
page71.
Environmental, Social and
Governance(‘ESG’)
The Board recognises the importance of
ESG matters and is committed to strategically
integrating and advancing our sustainability
efforts. During the course of the year, DWF
announced a new ESG Strategy, through
which we have set a number of ambitious
new targets to drive progress, particularly
inrelation to climate action and equality,
diversity and inclusion. Further detail on
ourESG Strategy can be found on pages
32to 49.
In addition, I am pleased to announce that,
for the first time, DWF will publish an ESG
Report that provides more detail of our ESG
activities during the year. The ESG Report
can be found on our website.
Focus in FY2022/23
The Board has determined that the following
areas will be governance priorities for
FY2022/23:
• Monitoring progress against the new
ESGStrategy
• Implementing the Remuneration Policy,
subject to Shareholder approval at the
September 2022 Annual General Meeting
(‘AGM’)
• Implementing the action plan that has
been developed following an external
Board evaluation
Annual General Meeting
Our AGM will be held on 28 September
2022at 2.00pm. Full details of the meeting
arrangements and the resolutions to be
proposed to Shareholders can be found
inthe Notice of AGM which will be made
available on our website dwfgroup.com/
en/investors. The outcome of the
resolutions put to the AGM, including results
of the poll, will be published on the London
Stock Exchange’s and the Company’s
websites once the AGM has concluded.
I hope you find the information contained
within the Corporate Governance report and
the rest of the Annual Report and Accounts
helpful and informative.
Jonathan Bloomer
Chair
20 July 2022
“Our values are integral
to the achievement of our
strategy. They influence
actions and behaviours,
complement our strategic
direction and support the
integration of colleagues
that join our business.”
Jonathan Bloomer
Chair
Further information about our strategy,
values and culture can be found on pages
06, 07, 12, 14, 17 and 64.
Board membership, succession planning
anddiversity
The Directors of the Company in office at
the date of this report are listed on pages 58
and 59. The Nomination Committee and the
Board have kept the composition and skills
of the Board and its committees under
review and, following a number of changes
in the previous financial year, see no reason
for any further changes at this time. There
have therefore been no changes to the
Board membership during the financial year.
Succession planning and the development
of our talent pipeline has been a focus
during the year, and this will continue into
FY2023. Diversity of gender, ethnicity, skills,
background and personal strengths are all
important drivers of Board effectiveness
and are key to ensuring we deliver our
strategy. Details on succession planning can
be found within the Nomination Committee
report on pages 72 to 74.
At DWF, it is our vision to create a working
environment and culture where people of all
different backgrounds are able to contribute
at their highest level and where their
differences have a positive impact for
ourcolleagues, clients, communities and
Shareholders. This is underpinned by our
Diversity & Inclusion and Dignity at Work
policies. An inclusive and diverse culture
across the business improves effectiveness,
encourages constructive debate and
supports good decision making. Further
information on our Diversity & Inclusion
priorities can be found on page 45.
The Company currently has three women
ontheBoard (30%) and five women on the
Executive Board (40%), both of which are
representative of the Group’s Diversity
&Inclusion targets.
For full details of the Board and Executive
Board composition, please see pages 58
to59 of this report.
Board effectiveness
As Chair of the Board, I am responsible for
providing leadership to ensure the operation
of an effective Board. In accordance with
theUK Corporate Governance Code 2018
(the ‘Code’), we conduct annual evaluations
ofthe effectiveness of the Board and its
committees, and this year we undertook
ourfirst externally facilitated evaluation as
alisted company. This was carried out by
SCT Consultants, which used a combination
ofinterviews, questionnaires and meeting
observations to formulate its report to
theBoard.
DWF Group plc | Annual Report and Accounts 2022 57
Strategic report Governance Financial statements Other information
Governance
1
43
11
6
9
8
2
5
7
10
Board of Directors
1. Jonathan Bloomer
Chair
Appointed to the Board: 1 August 2020
Committee memberships:
No
Re
Key skills and experience:
Jonathan has over 40 years of experience in
financial services and has significant board
experience both as an executive and
non-executive director. His previous
positions include Chair of the JLT Employee
Benefits Group, Senior Independent
Director of Hargreaves Lansdowne plc, and
Non-Executive Director of Railtrack plc.
Jonathan was Group Chief Executive Officer
of Prudential Group plc and has held senior
roles at Arthur Andersen. Jonathan is a
Fellow of the Institute of Chartered
Accountants in England and Wales.
Significant external appointments:
Chair of Morgan Stanley & Co International plc
and of SDL Property Services Group Limited
2. Chris Sullivan
Deputy Chair and Senior Independent
Non-Executive Director
Appointed to the Board: 1 November 2018
Committee memberships:
Au
No
Re
Ri
Key skills and experience:
Chris was appointed Deputy Chair on
1 August 2020, in addition to his role as
Senior Independent Non-Executive Director
and the Designated Non-Executive Director
for the workforce. Chris has extensive
experience of corporate, investment and
retail banking and asset financing together
with general management experience. He
was Chief Executive of the Corporate and
Investment Bank at Santander UK and has
held a number of executive roles within RBS
Group plc. In recognition of his services to
Scottish banking during his various roles at
RBS, Chris earned a Fellowship of the
Chartered Institute of Bankers Scotland.
Significant external appointments:
Senior Independent Director of Alfa Financial
Software Holdings PLC and Chair of the
Westminster Abbey Investment Committee
3. Sir Nigel Knowles
Group Chief Executive Officer
Appointed to the Board: 1 November 2018
Appointed Group Chief
Executive Officer: 29 May 2020
Committee memberships: None
Key skills and experience:
Prior to Sir Nigel’s appointment as Group
Chief Executive Officer, he was Chair of the
Board from November 2018 to 28 May 2020.
Sir Nigel spent over 38 years at DLA Piper,
aglobal law firm, where he was Global
Co-Chair and Senior Partner, and, previously,
Global Co-CEO and Managing Partner.
In2009, he received a knighthood in
recognition of his services to the legal
industry. He was admitted as a solicitor by
the Solicitors Regulation Authority in 1980
and is a registered foreign lawyer with the
Law Society of Scotland.
Significant external appointments:
Chair of Zeus Capital Limited and of
MorsesClub plc
4. Chris Stefani
Chief Financial Officer
Appointed to the Board: 10 September 2018
Committee memberships: None
Key skills and experience:
Prior to joining DWF, Chris was the Finance
Director of Ernst & Young’s EMEIA Advisory
business. Chris held a number of senior
roles within Ernst & Young including the role
of Chief Finance Officer for Ernst & Young
Republic of Ireland. Chris has 20 years of
experience in the professional services
sector and extensive experience in advising
executive boards on all aspects of financial
management, control, and performance and
profitability improvement, as well as a
record of optimising businesses to improve
profits and cost savings while supporting
revenue growth. Chris was admitted to the
Association of Chartered Certified
Accountants in 2001.
Significant external appointments:
None
5. Michele Cicchetti
Partner Director
Appointed to the Board: 22 October 2020
Committee memberships: None
Key skills and experience:
Michele is Managing Partner of DWF in Italy
andis widely regarded in Italy as a specialist
inacquisition finance, mergers & acquisitions
and finance related transactions. Before joining
DWF, he was a corporate finance partner at
Pavia e Ansaldo and has also gained significant
experience in the banking and finance sector at
White & Case LLP. Michele was admitted as a
solicitor by the Italian Bar Association in 2005.
Significant external appointments:
Non-Executive Director of the Italian
subsidiary of Enfinity Global
Key
Au
 
Audit
No
 
Nomination
Re
 
Remuneration
Ri
 
Risk
 
Chair
58 DWF Group plc | Annual Report and Accounts 2022
Governance
6. Seema Bains
Partner Director
Appointed to the Board: 22 October 2020
Committee memberships: None
Key skills and experience:
Seema is a senior partner in the Insurance
division and has led the Global Diversity and
Inclusion Leadership Group since its formation
in 2014. Before joining DWF, Seema was an
insurance partner at Weightmans. She was
admitted as a solicitor by the Solicitors
Regulation Authority in 1997 and is a
registered foreign lawyer with the Law
Society of Scotland.
Significant external appointments:
None
7. Matthew Doughty
Group Chief Operating Officer
Appointed to the Board: 1 November 2018
Committee memberships: None
Key skills and experience:
Prior to becoming an Executive Director on
22 October 2020, Matthew served on the
Board as Partner Director. Matthew has
been a partner at DWF since June 2016 and
has held corporate partner roles at Squire
Patton Boggs, Dorsey & Whitney, and
Addleshaw Goddard. He was admitted as a
solicitor by the Solicitors Regulation Authority
in 1996 and is a registered foreign lawyer
with the Law Society of Scotland.
Significant external appointments:
None
8. Teresa Colaianni
Independent Non-Executive Director
Appointed to the Board: 1 November 2018
Committee memberships:
Au
No
Re
Ri
Key skills and experience:
Teresa (Tea) has more than 30 years of
experience in human resources management.
She has previously served on numerous
boards including Bounty Brands Holdings,
Mothercare plc, and Poundland Group plc.
Tea’s previous roles include Group Human
Resources Director at Merlin Entertainments
plc and Vice President of Human Resources,
Europe, at Hilton Hotels Corporation.
Significant external appointments:
Senior Independent Non-Executive Director
of The Watches of Switzerland Group plc
9. Luke Savage
Independent Non-Executive Director
Appointed to the Board: 1 November 2018
Committee memberships:
Au
No
Re
Ri
Key skills and experience:
Luke has more than 35 years of experience
in the financial and professional services
sector, with experience in managing
regulatory, analyst, investor and banking
relationships for major institutions. He has
previously served as a Non-Executive
Director on the boards of HDFC Life
Insurance Company Ltd, Standard Life
Employee Services Ltd, Standard Life
Finance Ltd and Standard Life Oversea
Holding Ltd. He has held CFO positions at
Standard Life and Lloyd’s of London. Luke is
a member of the Institute of Chartered
Accountants of England and Wales.
Significant external appointments:
Chair of Chesnara PLC and of Numis
Securities plc
10. Samantha Tymms
(also known as Samantha Duncan)
Independent Non-Executive Director
Appointed to the Board: 1 December 2018
Committee memberships:
Au
No
Re
Ri
Key skills and experience:
Samantha (Sam) has more than 30 years of
experience in the financial services sector,
including extensive work in corporate
governance and risk management. She has
undertaken a number of roles at the Financial
Services Authority and previously served as
a Non-Executive Director on the board of IG
Group plc, and chaired its risk committee.
Significant external appointments:
Managing Director at Promontory Financial
Group (UK) Ltd
11. Darren Drabble
Group General Counsel & Company Secretary
Appointed as
Company Secretary: 20 April 2021
Darren is responsible for providing senior
management with strategic legal advice,
while overseeing legal compliance, and
corporate governance across the Group.
Darren has more than 20 years of private
practice and in-house legal experience.
Previously, Darren was Group Legal Director
and Company Secretary at Radius Payment
Solutions, and prior to that was Group
General Counsel and Company Secretary of
Moneysupermarket.com Group PLC. Darren
is a member of the Law Society of England.
Board and Committee attendance table
Board meetings Audit Nomination Remuneration Risk
Sir Nigel Knowles — — — —
Jonathan Bloomer
— —
Matt Doughty
— — — —
Chris Stefani
— — — —
Luke Savage
Tea Colaianni
Sam Tymms
Chris Sullivan
Michele Cicchetti — — — —
Seema Bains
— — — —
Attended meeting
Unable to attend meeting
— Not required to attend meeting
DWF Group plc | Annual Report and Accounts 2022 59
Strategic report Governance Financial statements Other information
Executive Board
Executive Board
Our Executive Board is fundamental in
promoting our inclusive culture and each
member is the Executive Sponsor to a strand
of our Diversity & Inclusion strategy, as
shown in the table below. They each support
the delivery of action plans that encompass
gender, race & ethnicity, LGBT+, disability and
mental health. To ensure our inclusive culture
is set from the top, our three Executive
Directors are overall sponsors of the
implementation of our Board approved
Diversity & Inclusion strategy.
The role of the Executive Board is to lead the day-to-day
operational management of the Group. The Executive Board
comprises the Executive Directors, Divisional CEOs, Regional
Managing Partners, Central Services function heads and the
Head of Clients and Markets. Full biographies of our Executive
Board can be found on our website dwfgroup/en/investors.
Sir Nigel Knowles
Group Chief
ExecutiveOfficer
Sponsor: Overall
Diversity & Inclusion
Chris Stefani
Chief Financial Officer
Sponsor: Overall
Diversity &Inclusion
Matthew Doughty
Group Chief Operating
Officer
Sponsor: Overall
Diversity &Inclusion
Paul Rimmer
Legal Advisory
Sponsor: Gender
Rob Marks
Mindcrest
Sponsor: Flexible
Working
Jason Ford
Connected Services
Sponsor: Mental
Health
Ignasi Costas*
Europe, Middle East &
Latin America and
Country Managing
Partner Spain
Sponsor: Disability
Damien van
Brunschot
Australasia
Sponsor: LGBT+
Hilary Ross
Head of Clients
&Markets
Sponsor: Gender
Kirsty Rogers
Group Head of ESG
and Office Managing
Partner Manchester
Co-Chair of Gender
Network
Daniel Pollick
Chief Information
Officer
Sponsor: Race &
Ethnicity
Zelinda Bennett
Chief Marketing Officer
Sponsor: Race &
Ethnicity
Helen Hill
Chief People Officer
Sponsor: Disability
Darren Drabble
Group General
Counsel & Company
Secretary
Sponsor: Mental
Health
Deborah Abraham
Group Director of Risk
Sponsor: Gender
Regional
Managing Partners
Divisional
CEOs
Other
Executive
Directors
Central
Services
Executive Board
* Advisor to the Executive Board.
For complete biographies, please see
dwfgroup.com/en/investors
60 DWF Group plc | Annual Report and Accounts 2022
Governance
Statement of compliance with
the UK Corporate Governance Code 2018 (the ‘Code’)
The Corporate Governance section of this
Annual Report and Accounts, which includes
the Committee reports, together with certain
disclosures contained in sections of the
Strategic Report, provide details of how the
Company applied the principles and complied
with the provisions of the Code during the
year ended 30 April 2022. This Corporate
Governance Statement fulfils the requirements
of the FCA’s Disclosure Guidance and
Transparency Rule 7.2 (‘DTR 7.2’). A copy
ofthe Code is available on the Financial
Reporting Council’s website, www.frc.org.uk.
For the year ended 30 April 2022, the
Company complied with all relevant principles
and provisions set out in the Code with the
exception of Provision 11 (at least half the
board, excluding the chair, should be
non-executive directors whom the board
considers to be independent). The Board
comprises the Chair of the Board, three
Executive Directors, four Independent
Non-Executive Directors and two
PartnerDirectors.
The position of Partner Director is designated
by the Board as a Non-Independent,
Non-Executive Director position. A Partner
Director represents thepartners of DWF
Law LLP and DWF LLP and is therefore a
partner Shareholder representative on the
Board. Partner Directors are not members
of any committees of the Board.
If these unique Partner Director roles are
excluded from theanalysis, then at least half
the Board, excluding the Chair, would be
Non-Executive Directors whom the Board
considers to be independent. Taking this
into account, and after discussing the
composition of the Board, the combination
of skills, experience and knowledge together
with the value of the input received and
diversity of thought from all members of
theBoard, the Board has concluded that
thecomposition of the Board provides the
appropriate balance ofskills, experience and
knowledge to be effective and entrepreneurial
in promoting the long-term sustainable
success of the Group, generating value for
Shareholders and contributing to wider
society. The Board do not consider this to
bea risk to the standards of governance
operating within the Group. It has not been
raised as a concern by shareholders and not
highlighted as a concern as part of our
external board evaluation. The Board
consider the representation and views the
Partner Directors add to the Board to be
vitally important. The make up of the Board
has been considered during the course of
the year and will be kept under review.
You can find further information on
compliance with the Code as per the chart
on this page.
For information on compliance with DTR
7.2.5 please see the pages referred to in
section 4 of the chart.
Section 1: Board leadership and Company purpose
A. Effective and entrepreneurial board to promote the long-term sustainable success
ofthe company, generating value for shareholders and contributing to wider society
B. Purpose, values and strategy with alignment to culture
C. Resources for the company to meet its objectives and measure performance.
Controlsframework for management and assessment of risks
D. Effective engagement with shareholders and stakeholders
E. Consistency of workforce policies and practices to support long-term sustainable success
• Chair’s statement p06 to p07
• Strategic report p02 to p56
• Board engagement with key stakeholders p28 to p31
• Shareholder engagement p30, p31 and p66
• Audit and Risk Committee reports p75 to p82
• Conflicts of interest p115
Section 2: Division of responsibilities
F. Leadership of board by chair
G. Board composition and responsibilities
H. Role of non-executive directors
I. Company secretary, policies, processes, information, time and resources
• Board composition p58 to p59
• Key roles and responsibilities p68 to p69
• General qualifications required of all Directors p70
• Information and training p70
• Board appointments and succession planning p70 and p74
Section 3: Composition, succession and evaluation
J. Board appointments and succession plans for board and senior management and
promotion of diversity
K. Skills, experience and knowledge of board and length of service of board as a whole
L. Annual evaluation of board and directors and demonstration of whether each
directorcontinues to contribute effectively
• Board composition p58 to p59
• Diversity, tenure and experience p69 and p70
• Board, committee and director performance evaluation p71
• Nomination Committee report p72 to p74
Section 4: Audit, risk and internal control – contains information required for DTR 7.2.5
M. Independence and effectiveness of internal and external audit functions and integrity
of financial and narrative statements
N. Fair, balanced and understandable assessment of the company’s position and prospects
O. Risk management and internal control framework and principal risks the company
iswilling to take to achieve its long-term objectives
• Audit and Risk Committee reports p75 to p82
• Strategic Report – Risk management, Principal risks p50 to p55
• Fair, balanced and understandable Annual Report p119
• Going concern basis of accounting p118, p119 and p131
• Viability statement p55 to p56
Section 5: Remuneration
P. Remuneration policies and practices to support strategy and promote long-term
sustainable success with executive remuneration aligned to company purpose
andvalue
Q. Procedure for executive remuneration, director and senior management remuneration
R. Authorisation of remuneration outcomes
• Directors’ Remuneration report p83 to p114
DWF Group plc | Annual Report and Accounts 2022 61
Strategic report Governance Financial statements Other information
Board leadership and Company purpose
The Board has collective responsibility to
promote the long-term sustainable success
of the Group, generate value for Shareholders
and contribute to wider society. An effective
board develops its collective vision of the
purpose, values, culture and behaviours
topromote across the Group in order to
achieve the strategic objectives it sets.
Thisis achieved through good governance
and a board with the necessary skills,
knowledge and experience to provide
effective leadership to the Group. The Board
recognises the contribution made by good
governance to the Group’s success and the
importance of the right structures to deliver
the Group’s strategy.
How the Board operates
The Board has a standing schedule to meet
at least six times a year but holds further
meetings as required. Agenda planning is
undertaken in advance of every meeting to
ensure there is an appropriate allocation
oftime to consider significant topics. The
Board and its committees held a number
ofmeetings in FY2021/22 at which senior
executives, external advisors and
independent advisors were invited to attend
and present on business developments
andgovernance matters. The Company
Secretary attended all scheduled Board
andcommittee meetings. All meetings are
structured to allow open discussion.
The table on page 59 sets out attendance
atthe scheduled Board meetings during
FY2021/22. Additional meetings were held
throughout the year to discuss operational,
strategic, governance and regulatory matters.
If a Director was unable to attend a meeting,
they still received the papers in advance of
the scheduled meeting and any input they
provided was considered fully.
Regulation in England and Wales
As a legal business we also have to comply
with the regulatory requirements of the
Solicitors Regulation Authority (‘SRA’) in
England and Wales and take account of
regulations imposed by other relevant
legalregulatory bodies in every country
wework in. In particular, that regulatory
framework has led to a specific structure
toour Executive Board and to the structure
of the Group, as well as to certain
restrictions on shareholding.
In addition to the standard requirements of
good governance, the applicable regulatory
regime imposes three major requirements
on the business:
1 The majority of executive management
responsible for the day-to-day running
ofa legal business must be lawyers. Our
business is managed by an Executive
Board (see page 60) and the majority
ofits members are lawyers.
2. A restriction on the holding of certain
interests in an SRA-licensed entity,
including holdings of 10% or more of
thevoting rights by a non-authorised
person, unless such person has the
priorapproval of the SRA. If someone
does acquire such a holding and is not
authorised to do so, then the Company’s
Articles of Association entitle the
Company to impose certain restrictions
on all of that person’s shareholding,
which may include disenfranchisement
orcompulsory disposal of such shares.
Further details are set out on pages 116
and 117 ofthe Directors’ report.
3. As set out in the Company’s Articles of
Association and certain other Group
constitutional documents the Company
and the Directors must ensure that
appropriate systems are implemented
and maintained to enable the provision
of legal services by the Group and
ourpeople, in accordance with the
professional duties of legal practitioners
in each jurisdiction in which they practise.
To the extent that there is any conflict,
orpotential conflict, between (i) the
Company’s and the Directors’ statutory
and other duties at law and under the
Articles of Association of the Company
toShareholders and (ii) the professional
duties of our people and our Group
entities, then those professional duties
will prevail.
Matters Reserved for the Board
The Board has a formal schedule of matters
specifically reserved for its decision and
approval, which includes but is not limited
tothe following:
• Strategy, including responsibility for
theoverall leadership of the Group
andsetting the Group’s vision, purpose,
valuesand standards, satisfying itself
thatthese align with the Group’s culture.
• Capital and structure, including changes
related to the Group’s capital structure,
major changes to the Group’s corporate
structure and changes to the Group’s
management and control structure.
• Board, committee and other
appointments, changes to the structure,
size and composition of the Board, and
succession planning for the Board and
senior management.
• Remuneration, including determining
theoverall remuneration policy, setting
the remuneration of the Independent
Non-Executive Directors and introduction
or amendments of the Group’s share
plans and equity incentive plans to be
putto Shareholders for approval.
• Financial and annual reporting,
including explanation of the Group’s
business model and strategy for
delivering the objectives of the Group,
approval of the Annual Report and
Accounts, and statements containing
financial information, including any
halfyear report and preliminary
announcement of financial results.
• Contracts, including approval of
transactions that are material strategically
or by size and investments and capital
projects exceeding £1m per annum and
£10m in aggregate.
• Risk management and internal
controls, including ensuring that the
Group manages risk effectively by
approving its risk appetite.
• Partner matters, including approval of
lateral hires with associated costs of more
than £1m, expulsion of any partner of the
Group and determining the leaver status
of any partners and employees who are
members of the Executive Board.
• Policies, including approval of any new
key policies for the Group, or material
amendment to existing key policies.
Matters Reserved for the Board are reviewed
annually. You can find them on the Company’s
website dwfgroup.com/en/investors.
62 DWF Group plc | Annual Report and Accounts 2022
Governance
Key activities in FY2021/22
The Board recognises the value of
maintaining close relationships with its
stakeholders, understanding their views
andthe importance of these relationships
indelivering our strategy and the Group’s
purpose. The Group’s key stakeholders and
their differing perspectives are taken into
account as part of the Board’s discussions.
Section 172(1) of the Companies Act 2006
requires the Directors to act in a way they
consider, in good faith, would be most likely
to promote the success of the Company for
the benefit of our Shareholders as a whole.
In doing so, the Directors must have
regardto various matters identified in the
legislation. You can read more in our section
172(1) statement on pages 26 and 27 which
include some principal decisions taken
bythe Board during the year.
Board meetings follow a carefully tailored
agenda that is agreed in advance by the
Chair, in conjunction with the Executive
Directors and Company Secretary. A typical
Board meeting will comprise reports on
operational and financial performance, legal
and governance updates and one or two
detailed deep dives into areas of particular
strategic importance.
Each meeting includes an update from
theChairs of our committees on the
proceedings of those meetings, including
any key decisions, any material discussions
and any recommendations tothe Board
forapproval.
The Board recognises the importance of
engaging with and considering the views
ofkey stakeholders in strategic planning,
decision making and building long-term
sustainability.
Stakeholder groups
 Colleagues (employees and partners)
 Clients
 Suppliers
 Debt providers
 Shareholders
 Communities
  Regulators
 Policymakers
Strategy and performance
                                   
Approved the Group’s strategy. Continued
to monitor progress against the strategic
objectives through regular updates from
theGroup Chief Executive Officer and
Group Chief Operating Officer.
Deep dived into new acquisitions and
associations, and how theywere performing
within the Group, reviewed next steps and
how they aligned with the Group strategy.
Approved various trading updates to the
market regarding performance against
budget and the implementation of the
Group’s strategy.
Financial
                                   
Approved the annual budget and key
performance indicators, and monitored
theGroup’s achievement against them.
Recommended a final dividend for
FY2020/21 of 3.0 pence per share and
approved an interim dividend for payment
for FY2021/22 of 1.50 pence per share in
line with the Company’s dividend policy.
Approved the Company entering into a new
revolving facility agreement to assist with its
working capital requirements.
Legal and risk management
                                   
Reviewed and approved the Group Risk
appetite. Received regular updates on
litigation and insurance claims across
theGroup.
Reviewed and considered the effectiveness
ofthe Group’s systems of internal controls
and Risk Management Framework.
Reviewed risk areas across the business
including cyber security, IT systems and data
infrastructure, and risks faced by each of the
Group’s divisions.
Board and Executive Board leadership
       
Reviewed and considered the composition
and diversity of the Board and its
committees.
Continued to monitor the skills, experience
and knowledge of the Board as a whole.
Monitored the implementation of the
newoperating structure andapproved
appointments and resignations to/from
theExecutive Board.
ESG
                                   
Approved the Group ESGStrategy and the
introduction of ESG targets and measures.
Reviewed and approved corporate
statements including the Modern Slavery
Statement.
Received reports on people issues including
Diversity & Inclusion, employee wellbeing
initiatives, and gender and ethnicity pay
gapreporting.
Governance
                                   
Received reports from the committees and
considered recommendations for approval
including leaver status determination, UK
tax strategy, a new remuneration policy and
changes to the ExecutiveBoard.
Updated the Matters Reserved for
theBoard and the committees’ Terms
ofReference to ensure they were
appropriately scoped and in accordance
with the requirements of the UK Corporate
Governance Code 2018 (the ‘Code’).
Conducted an annual review of Board and
committee effectiveness, facilitated by an
external provider, reviewing the outcomes
and implementing actions to address the
areas for improvement.
DWF Group plc | Annual Report and Accounts 2022 63
Strategic report Governance Financial statements Other information
Board leadership and Company purpose continued
The Board’s continued response
toCOVID-19
The Board has continued to monitor the
impact of and challenges presented by
COVID-19. Whilst the immediate uncertainty
presented by COVID-19 has to some extent
subsided, the Board acknowledges itsrole in
supporting colleagues as we navigate our
hybrid working processes.
TheBoard and Executive Board continued
to prioritise regular communication with
colleagues, alongside good governance to
facilitate quick and responsive decision
making, with our stakeholders at the
forefront of these decisions.
The effects of COVID-19 required us to adapt
our ways of working. Our priority continues
to be ensuring we are doing all we can to
protect the health of everyone in the
Groupand their families. Agile working
arrangements have continued for everyone
in the business as office capacity continues
to be limited in line with the Group’s global
COVID-19 policy. As wenavigate the ‘new
normal’, the senior leadership teams have
been encouraged toincrease their presence
in the office andto encourage their teams
toattend the office on a regular basis, to
facilitate collaborative working and support
more junior colleagues. This long-term
flexibility continues to be supported by the
business’ updated policies and procedures,
with ongoing monitoring key to its
sustainability as well as continued
investment in initiativesto support effective
resilience, linemanagement, effective
working, and additional guidance for our
people onphysical and mental wellbeing.
Regular risk assessments continue to be
carried out across our offices to monitor the
effectiveness of safety measures to betaken
when working from the office, including
items such as working from an office,
travelling to work, entry/exit from office
buildings, dealing with visitors and
theprovision of facilities.
How our Board monitors culture
The Board establishes the Group’s purpose,
values and strategy, and satisfies itself that
these and its culture are aligned. Details
canbe found on pages 06, 07 and 57. The
following table demonstrates how the Board
considered culture through various actions
taken during the financial year. Thetable
also shows the linkage of culture to purpose.
Board action Links to culture Links to purpose
Non-Executive Directors as well as
Executive Directors participated in
virtualGlobal Town Halls.
Provided a top-down approach to corporate culture and enabled
oversight of the culture through interaction with employees
andpartners.
Chair of the Board attended the
Leadership Conference.
Allowed the Board to assess the culture of the leadership
withintheGroup to ensure it is representative of the corporate
culture.
The Group Chief Executive Officer and
Group Chief Operating Officer and Group
Chief People Officer provided updates at
Boardmeetings on peoplematters,
including people surveys.
Provided information tohelp understand the culture, through data
on recruitment and retention of partners and employees. Feedback
from surveys allowed the Board to gauge the culture.
Reviewed and approved all key workforce
related policies including the Speak Up
policy.
Assisted assessment andoversight to ensure thatpolicies
reflectthe desired values and behaviours to help embed the
corporate culture.
Reviewed and approved Modern Slavery
Statement.
Enabled assessment ofthebroader culture oftheGroup and its
relationships with suppliers and customers.
Reviewed health andsafety matters,
forexample health andwellbeing.
Enabled feedback on the wellbeing of employees and partners
which assisted with monitoring of corporate culture.
Considered the views of Partner Directors
who attend allBoard meetings.
Provided an insight into the culture amongst partners and the
extent towhich thevalues and behaviours are embedded within
theGroup.
Key
Colleagues Clients Communities
64 DWF Group plc | Annual Report and Accounts 2022
Governance
“The increased
transparency... continues
to facilitate building
trust in the business and
improve performance.”
Workforce engagement
inaction
As part of Group’s commitment to
compliance with the Code, Chris Sullivan
has been Designated Non-Executive
Director for the workforce since the
Company’s IPO. Chris was chosen due to
his senior position on the Board as Senior
Independent Director.
Sir Nigel Knowles held virtual Town Halls
during the year, to ensure top-down
visibility and to keep colleagues updated
on our strategy and performance, whilst
providing opportunities for meaningful
dialogue between the Board and
colleagues.
Results of engagement with the workforce,
including leadership meetings, are fed
back to the Board through reports
presented by the Group Chief Executive
Officer, Group Chief Operating Officer and
Group Chief People Officer, and verbal
updates by the Designated Non-Executive
Director for the workforce. These were
taken into account during Board discussions
and in particular have influenced our
ongoing response to colleague
engagement and mental health and
wellbeing initiatives. The Board continues
to view this as an effective workforce
engagement mechanism, which has
worked well to ensure workforce matters
are considered by the Board.
Further information on our people initiatives
can be found in the ESG report on pages
47 and 48.
In addition, the two Partner Directors
continue to have a unique role in providing
constructive challenge to executive
decisions from the partner perspective
within the business and provide
representation for the partners across
theGroup.
Q
How do you consider the role of
Partner Director has evolved since
you were appointed?
Seema: The increased transparency provided
by this role continues to facilitate building
trust in the business and improving
performance. I have been invited as a
regular attendee at meetings of the Risk
Committee, which provides greater
oversight and involvement.
Michele: I continue to provide a voice in
particular for partners based outside the UK
and to ensure Boarddiscussions reflect the
interests of the entire Group. My interest in
Board discussions around strategy and
budget have been further developed by my
standing invitation to meetings of the Audit
Committee, giving me further opportunity to
voice my own perspective, as well as those
of our colleagues.
Q
How do you bring the voice of the
workforce into the boardroom?
Seema: We bring an understanding of the
organisation that is different from the rest
ofthe Board, and our perspective can
stimulate discussions and provide ideas
andconstructive insight into the views of
partners. We can consider and articulate
how the partners may be impacted by Board
decisions. Our presence raises the profile of
our colleagues and other stakeholders in
decision making, particularly as the majority
of the partners are Shareholders in the
Company, too.
Michele: We are the people who have
direct experience of working in accordance
with the Group’s values and behaviours,
and we see the culture across the Group
below an executive level. This enables usto
providefeedback on partner perspectives
around the implementation of policies
andhow collaboratively we are working
towards the ‘one team, no borders’ culture.
We are able to provide insight into what’s
important for multiple stakeholders.
Q
What actions have you taken
toincrease the Board’s
understanding and consideration of
diversity within the workforce and
whatimpact has this had?
Seema: As Head of the Global Diversity
and Inclusion Leadership Group, I was
particularly drawn to the opportunity the
position of Partner Director would provide
to increase the Board’s understanding
ofDiversity & Inclusion within the
workforce. I have the opportunity to
present to the Board and the Nomination
Committee biannually on Diversity &
Inclusion matters, providing them with an
update on progress against our targets
and our policy, as well as answering any
questions they may have. As a result,
Diversity & Inclusion has a greater
presence in decision making by the Board.
DWF Group plc | Annual Report and Accounts 2022 65
Strategic report Governance Financial statements Other information
Workforce policies
The Board reviews and approves all
keypolicies that impact our workforce to
ensure that policies and practices support
the Group’s purpose and reflect our values.
Our Global Code of Conduct sets out how
we put our values into practice. It also
provides practical advice on the individual
responsibilities of our colleagues and
guidance for certain scenarios, and
highlights the specific areas on which the
Group has a zero tolerance approach. This
helps embed the values, behaviour and
principles as part of ourculture.
The Group takes a zero tolerance approach
to bribery and corruption, and the Anti-
Bribery and Corruption policy continues to
be reviewed on an annual basis. This policy
aims to protect the integrity, independence
and objectivity of the Group, and to clarify
the position of partners and employees
ingiving or receiving such gifts, invitations
or hospitality, and thereby to ensure
compliance with all applicable laws and
regulations. Where appropriate, the policy
isalso communicated to third parties,
associated persons, clients and contacts.
Itmay also be incorporated into contracts
for the supply of goods and services.
Mandatory training is undertaken by all our
people on key policies, with self-disclosure
of completion now required at half- and
full-year check-ins, to ensure that they are
understood and embedded.
Information on how the Company invests in
and rewards its workforce can be found on
pages 46 to 48 and 110.
Speak Up policy and helpline
We are committed to maintaining an
openculture with the highest standards
ofhonesty and accountability, a culture
wherecolleagues can report any legitimate
concerns in confidence. Our Speak Up policy
outlines the process to raise a concern
about wrongdoing, safe in the knowledge
that it will be investigated promptly and
effectively. The Speak-Up policy was
reviewed and updated during the year.
Reports made under the Speak Up policy
are reviewed by the Audit Committee and
theAudit Committee in turn reports to the
Board on an annual basis.
Shareholder engagement
The Board is committed to open and
transparent dialogue with Shareholders.
TheChair, Senior Independent Non-
Executive Director and other Non-Executive
Directors are available to meet with major
Shareholders on request. The Group
ensures that it communicates the
information that its investors require through
Regulatory News Announcements, press
releases and the Annual Report and Accounts.
Our AGM, to be held on 28 September 2022,
will provide an opportunity for further
Shareholder engagement, for the Chair
toexplain the Company’s progress and,
alongside other members of the Board, to
answer any questions.
Shareholder activities during the year
• Committee Chairs engaged with
Shareholders on significant matters
relating to their areas of responsibility,
including in respect of the global
ESGStrategy.
• Investor and analyst presentations were
held following the announcement of our
full-year and half-year results.
• After those presentations, investor
roadshows were held with key Shareholders
and prospective investors.
• The Executive Directors continued to be
active participants in market events.
Shareholders by type
 Retail 34.57%
 Asset Manager 19.63%
 Other (<3%) 10.54%
 Employees 9.30%
 Private Equity/Venture Capital 6.22%
 Private Investor 6.12%
 Wealth Management 3.75%
 Company related 3.50%
 Corporate 3.24%
 Pension Fund Manager 3.14%
Board leadership and Company purpose continued
66 DWF Group plc | Annual Report and Accounts 2022
Governance
Division of responsibilities
The Board has established four committees
and one standing committee. In addition to
the schedule of Matters Reserved for the
Board, each committee has written Terms of
Reference defining its role and responsibilities.
These are reviewed annually and the current
versions can be found on the Company’s
website dwfgroup.com/en/investors.
Membership of the Audit Committee and
the Risk Committee is limited to Independent
Non-Executive Directors, in accordance
withthe UK Corporate Governance Code
2018 (the ‘Code’). The Chair of the Board
chairsthe Nomination Committee and is
amember of the Remuneration Committee.
All Independent Non-Executive Directors
sitonall four committees.
Governance framework
Disclosure Committee
The Disclosure Committee is responsible for ensuring the accurate and timely disclosure of information to the market,
to meet the Company’s obligations under the Market Abuse Regulation, andtomonitor compliance with the Company’s
disclosure controlsand procedures.
Audit Committee
The Audit Committee assists
the Board in discharging its
responsibilities including
assessing the integrity of
financial reporting, ensuring
the independence and
effectiveness of external
and Internal Audit functions
and controls, reviewing the
Company’s annual and
half-yearly financial
statements, making
recommendations on the
appointment, reappointment
and removal of the Auditor,
monitoring the independence
of the Auditor, reviewing the
objectivity and effectiveness
of the audit process and
reviewing the scope of the
audit and non-audit work
undertaken by the Auditor.
Risk Committee
The Risk Committee’s duties
include oversight of the
Group Risk Management
Framework and risk
appetite, providing advice to
the Board in relation to the
assessment of the principal
risks facing the Group, the
management and mitigation
of those risks, and considering
the effectiveness of the
Group’s compliance function,
as well as providing oversight
and advice to the Board in
relation to future risk strategy.
Nomination Committee
The Nomination Committee
assists the Board in
reviewing the structure,
composition and diversity
ofthe Board and its
committees, succession
planning, evaluating the
balance ofskills, experience,
independence and
knowledge on the Board,
leading the process for
Board appointments, and
making recommendations to
the Board on such matters.
It is also responsible for
assisting with any evaluation
process, bothinternal and
external, to assess the
overall and individual
performance of the Board
and its committees, and
reviewing the policies on
Diversity & Inclusion, as
wellas progress against
achieving objectives under
those policies.
Remuneration Committee
The Remuneration
Committee assists the Board
in fulfilling its responsibilities
in relation to remuneration,
including making
recommendations to the
Board on the Company’s
policy on remuneration,
determining the individual
remuneration packages,
including pension rights
andany compensation
payments, of each of the
Company’s Executive
Directors and senior
management.
The Remuneration
Committee is also responsible
for considering and making
recommendations to the
Board on the design and
targets of share plans and
equity incentive plans and
reviewing the ongoing
appropriateness and
relevance of the remuneration
arrangements across
theGroup.
The Board
Committees
Standing committee
DWF Group PLC Board
The Board provides leadership within a framework of prudent
and effective controls. There is a clear division of responsibility
amongst the Board with the overarching goal to promote the
Group’s long-term sustainable success.
DWF Group plc | Annual Report and Accounts 2022 67
Strategic report Governance Financial statements Other information
Division of responsibilities continued
There is a clear division of responsibility between the running of the Board by Jonathan Bloomer and the responsibility for the running of
the Group’s business by Sir Nigel Knowles. The following table sets out the policy on the division of responsibilities of the Board during
the year ended 30 April 2022.
Role Responsibilities
Chair of the Board (a) Leadership of the Board and ensuring its effectiveness on all aspects of its role
(b) To chair and set the agenda of all meetings of the Board
(c) To promote a culture of openness and debate, by facilitating the effective contribution
of Non-Executive Directors and Partner Directors
(d) To communicate with Shareholders and other stakeholders
Deputy Chair of the Board and Senior
Independent Non-Executive Director
(a) To step into the role of the Chair, in the Chair’s absence
(b) To act as a sounding board for the Chair and to serve as an intermediary for the other
Directors
(c) To ensure that the Chair and Group Chief Executive Officer comply with the policy on
division of responsibilities
(d) To be available to Shareholders if they have concerns that cannot be or have not been
addressed, or are inappropriate to be addressed through the usual channels of the
Chair, the Group Chief Executive Officer or the Chief Financial Officer
Group Chief ExecutiveOfficer (a) Responsible for the day-to-day management of the businesses of the Group in
accordance with such policies and directions as the Board of the Company may
determine from time to time
(b) To manage the Group’s operations, including the development of strategic plans
(c) To develop and maintain good, open and transparent regulatory relationships
(d) To provide effective leadership of senior management of the Group in the day-to-day
running of the Group’s business and oversight of executive meetings
Chief Financial Officer (a) To manage all aspects of the Group’s financial affairs and to contribute to the
management of the Group’s operations
Group Chief OperatingOfficer (a) To collaborate with and support the Group Chief Executive Officer to effectively design,
implement andexecute the Company’s strategy in accordance with such policies and
directions as the Board ofthe Company may determine from time to time
Independent
Non-Executive Directors
(a) To constructively challenge and contribute to the development of strategy
(b) To scrutinise management performance against agreed goals and objectives, and the
on-going appropriateness of those objectives
(c) To contribute to open and honest debate in Board meetings, providing constructive
challenge toExecutive Directors and senior management
(d) To ensure financial controls and risk management systems are strong and secure
(e) To take into account the views of Shareholders and other key stakeholders
whereappropriate
Partner Directors (a) To constructively challenge and contribute to the development of strategy
(b) To scrutinise management performance against agreed goals and objectives
(c) To provide constructive challenge to executive decisions made by the Executive
Directors and the senior management
(d) To take into account the views of Shareholders and other stakeholders
whereappropriate
(e) To devise and recommend proposals for the Board to have meaningful and regular
dialogue with allofthe Group’s partners and employees
68 DWF Group plc | Annual Report and Accounts 2022
Governance
Composition, succession and evaluation
Board changes during the year
There were no changes to the Board during
the financial year to 30 April 2022.
As at 30 April 2022, the Board comprised
10Directors, made up of the Chair, who
wasindependent on appointment, three
Executive Directors, four Independent
Non-Executive Directors including the
Senior Independent Non-Executive
Directorand two Partner Directors.
Our unique structure means we also have
two Board positions for Partner Directors,
each of whom serves for an initial term of up
to three years. The Partner Directors have a
specific role which, while similar to that of a
Non-Independent Non-Executive Director,
includes providing constructive challenge
toexecutive decisions from a standpoint
within the business. They are notentitled
toreceive a fee for undertaking their role
asPartner Directors but are remunerated
asother partners are from their membership
of our Group entities. Forthepurpose of the
Directors’ Remuneration report, they are
treatedasNon-Independent
Non-ExecutiveDirectors.
The Independent Non-Executive Directors
bring a broad perspective to the
deliberations of the Board, having been
selected for their diverse commercial
andsector expertise rather than a legal
background. The combination of skills
andexperience of the Board is
illustratedopposite.
Length of tenure
Number of Directors
0-2 years
3–5 years
5+ years
0 1 2 3 4 5 6 7 8 9
10
Board skills and experience
2021/22
Environmental, Social & Governance
International Business Experience
PLC Experience/Corporate Governance
Professional Services
Risk Management and Risk Mitigation
Strategy
Finance Capital Markets
Human Resources
Mergers & Acquisitions
Regulatory
Transformation/Growth
Finance/Accounting/Audit
Information Technology
0% 45%
90%
DWF Group plc | Annual Report and Accounts 2022 69
Strategic report Governance Financial statements Other information
Composition, succession and evaluation continued
Regulation
To comply with certain local regulatory
requirements, the majority of our Executive
Board must be lawyers. Our Executive Board
meets this requirement with 8 of the
14 members being lawyers.
Board succession
The Nomination Committee continues
toreview succession plans for the Board
andExecutive Board each year. Further
information on our approach to succession
planning, our Diversity & Inclusion policy
and Board appointments can be found in
the Nomination Committee report on
pages72 to 74.
Board induction and training
Induction programmes are provided for all
new Directors, which are tailored to each
new appointee. Each programme includes: a
comprehensive induction pack of background
information relating to the Company and the
Group, alongside material on governance
matters; introductory meetings with their
Board colleagues, the Group General Counsel
and Company Secretary, senior management,
other key people within the Group, and,
when relevant, the Company’s advisors.
Theinduction programme is designed to
ensure that all new Directors develop
sufficient knowledge and understanding of
the Group and our businesses, people and
processes, as well as of their duties as
Directors of theCompany, to oversee the
operations ofthe Group and contribute
effectively tostrategic discussions.
Ongoing and tailored training is provided
forall Directors, as necessary, to provide
oversight and broaden knowledge of the
Group and the matters affecting it. The
General Counsel and Company Secretary is
responsible for supporting the Chair of the
Board in defining the training programme
and maintaining the training agenda for the
Board and its committees during the year.
Training comprised a mixture of formal and
informal training sessions, as well as deep
dives into the Group’s businesses.
Non-Executive Directors’ independence
and time commitment
Non-Executive Directors are required
tobeindependent in character and
judgement. Any relationships that may
interfere materially with this judgement are
disclosed under the Conflicts of Interest
policy, see page 115. On behalf of the Board,
the Nomination Committee assesses the
Non-Executive Directors’ independence,
skills, knowledge, experience and time
commitment annually. Additional external
appointments will not be undertaken without
approval from the Nomination Committee.
The Nomination Committee concluded
thatevery current Non-Executive Director,
with exception of the Partner Directors,
isindependent. Each Non-Executive
Director continues to contribute effectively,
and demonstrates they were committed
tothe role. Each current Director will
submitthemselves for election or
re-election at the 2022 AGM, in line with
therecommendations of the UK Corporate
Governance Code 2018 (the ‘Code’).
Board and committee support
The Company has systems in place to ensure
the Board is supplied with appropriate
andtimely information that helps Board
members discharge their duties. We utilise
afully encrypted electronic Board portal
todistribute Board and committee papers,
which also enables the efficient distribution
of business updates and other resources
tothe Board. Board members may request
additional information or variations to
regular reporting as required.
The Group General Counsel andCompany
Secretary is responsible tothe Chair for
advising the Board on all governance
matters. The Group General Counsel and
Company Secretary has been appointed
secretary to all the committees ofthe Board
and meets regularly with the respective
Chairs to brief them on areas of governance
and committee requirements. All Directors
also have access to the advice and services
of the Group General Counsel and Company
Secretary. They are also able to take
independent legal and professional advice
when they believe it is necessary to do so.
Diversity & Inclusion
The Board recognises the value diversity
brings to the boardroom, and believes
theBoard will perform better, and gain
wider support for its overall objectives
andstrategy, if it includes the best people
available, who also represent a wide range
ofbackgrounds, skills, experience and
views.The Company has aimed to appoint a
diverse Board of highly talented individuals,
from a mixture of gender, ethnicity and
social backgrounds, with a view to the Board
meeting the recommendations of both the
Hampton-Alexander and Parker Reviews.
TheNomination Committee recognises the
need for development of a diverse pipeline
for succession to senior management within
the business itself.
The Board and the Executive Board are
committed to building a diverse and inclusive
environment where our people can bring
their whole self to work and enable our
diversity to truly flourish. We encourage
andsupport our people to take ownership
and responsibility for our inclusion agenda.
The Board is committed in maintaining its
current gender diversity, with no fewer than
three women on the Board at the end of
FY2021/22. We have achieved and exceeded
our target of at least 33% female
representation on the Executive Board
by2022, following the commencement
ofthe new Executive Board which took
effect on 1 May 2021.
The Board appreciates that diversity
includes, but is not limited to, gender and
seeks to encourage diversity of gender,
social and ethnic backgrounds, cognitive
and personal strengths at Board level and
throughout the Group. More information
onDWF’s Diversity & Inclusion strategy,
benchmarking and targets can be found
within the ESG report on pages 45 and 46.
The following charts provide a summary
ofthe Board, Executive Board, senior
management and all employees’ gender
diversity as at 30 April 2022.
Board gender
No. of
Directors Percentage
 Male 7 70%
 Female 3 30%
Executive Board gender
1
No. of
members Percentage
 Male 9 64%
 Female 5 36%
1 The Executive Board gender split is as at 30 April
2022. The current composition of the Executive
Board is 64% male and 36% female excluding the
one individual listed as Advisor to the Executive
Board on page 60.
2 Senior management is defined as the Executive
Board and direct reports (excluding administrative
and support staff) as at 30 April 2022. This includes
directors of subsidiaries.
70 DWF Group plc | Annual Report and Accounts 2022
Governance
Senior management gender
2
No. of
people Percentage
 Male 85 61%
 Female 55 39%
All employee gender
No. of
people Percentage
 Male 1,735 42%
 Female 2,361 58%
Board and committee evaluation
The Board has previously undertaken two
internal Board evaluations and progress
hasbeen made against findings, including
areview of processes to improve the
qualityand timeliness of Board and
committee papers.
In line with best practice and the
provisionsof the Code, for FY2021/22,
itwasagreed to undertake an externally
facilitated evaluation of the Board.
Afteratendering process, the Board
appointed SCT Consultants to carry
outtheBoard evaluation. As this was the
first external evaluation the Group have
conducted, SCT Consultants have not
evaluated the Group Board previously, nor
did they have any prior business relationship
with the company.
This evaluation considered the Board as
awhole, the operation of each committee,
the performance of individual Directors,
aswell as the Chair. All Board members
participated in the evaluation which was
undertaken confidentially using anonymous
questionnaires to be completed by each
Director, review of Group publications and
Board papers, one-to-one interviews with
each Director and Board and committee
meeting observation. SCT Consultants
presented its findings at a meeting of the
Board. The Board discussed these and an
action plan was subsequently developed
and agreed with the Chair. Progress
againstthis plan will be monitored
onaregular basis.
The main findings of the Board and
committee evaluation process, together
withrelated actions for the year ended
30 April 2022, are as follows:
Evaluation finding Action for FY2022/23
Board • When looking at refreshing the Board, consider developing the Board’s membership to include more commercial
and professional services know-how.
• Ensure consistently simple, clear information flows to the Board and that in future, when major investment
decisions are made, post-investment appraisals are carried out at an appropriate time.
• Look for opportunities to spend more informal time together as a Board, to stand back and review how the
Group is doing and identify possible topics for future discussions.
Stakeholders • Regular systematic stakeholder feedback should be built into the forward agenda, particularly from clients and
employees. This should include updates on how the organisation’s culture is being developed and reinforced.
• Keep under review the Group’s overall talent strategy to ensure it is underpinning and driving its business
strategy, including its means of attracting, retaining, motivating, rewarding and performance managing, in order
to continue to be competitive in the way it manages and rewards its people.
Strategy • Ensure there is a detailed strategy implementation plan with timescales, milestones and measures, and that
from time to time the Board schedules an in-depth review of each of the various aspects of its strategy.
• The Board should ensure the risk management information it receives is not over-complicated and that it
focuses sufficiently on mitigating actions and their follow-through.
DWF Group plc | Annual Report and Accounts 2022 71
Strategic report Governance Financial statements Other information
Composition, succession and evaluation continued
Nomination Committee report
Dear Shareholder,
Since 1 May 2021, the Group has operated
through its new structure of three global
divisions of Legal Advisory, Mindcrest and
Connected Services. The transition went
smoothly, with the implementation of a
training programme for the new global
matrix leaders being delivered promptly and
received positively. Equally, relevant changes
to the finance and HR systems finished
ahead of schedule. You will recall that, as
part of its role in keeping the leadership
needs of the Group under review, the
Nomination Committee (the ‘Committee’)
recommended to the Board a number of
senior management changes to support our
new operating structure, which came into
effect from 1 May 2021. Since then, the
Committee has monitored the effectiveness
of these changes and is pleased to see the
positive contribution these appointments
are making to the success of the Group.
During FY2021/22, the Committee continued
to focus its attention on ensuring orderly
succession for the Board and Executive
Board, to ensure that the right people are
inthe right place to deliver the Group’s
strategy and that there is continuous talent
management to ensure a diverse pipeline of
individuals fully able to deliver the strategy in
the future. In accordance with our policy
commitment, all appointments tothe Board
are made on merit, taking into consideration
the requirements of the UK Corporate
Governance Code 2018 (the ‘Code’) and
ensuring that the business continues to have
the appropriate mix of skills, experience,
independence and knowledge for its
continued effectiveness. The Committee has
considered succession plans for the Board
and Executive Board atregular intervals.
The Group maintains a strong focus on
Diversity & Inclusion and, throughout the
year, the Committee continued its focus on
the Diversity & Inclusion policy and the
Group’s diversity targets, on which further
information can be found on pages 45 and
46. We are pleased to report that female
representation on the Executive Board is
now at over 33% and there are three women
on the Board.
Jonathan Bloomer
Chair, Nomination Committee
Members
Jonathan Bloomer (Chair)
Luke Savage
Tea Colaianni
Sam Tymms
Chris Sullivan
Each member’s expertise and experience
is set out in their biography on pages 58
and 59, alongside their attendance at
Committee meetings.
Focus in FY2021/22
• Monitored the Group’s adoption of its new operating structure
• Further developed succession planning arrangements for Directors and
seniormanagement
• Continued to monitor progress in line with the Group’s Diversity & Inclusion policy
• Reviewed the structure, size and composition of the Board and its committees
• Consider the skills, experience, independence and knowledge required to ensure the
business continues to be effective
Focus in FY2022/23
• Continue to monitor progress against the Group’s Diversity & Inclusion targets
inlinewith the Group’s Diversity & Inclusion policy
• Continue to consider succession planning arrangements for seniormanagement
totheBoard and Executive Board
• Continue to renew the structure, size and composition of the Board and itscommittees
• Continue to consider the skills, experience, independence and knowledge required
toensure the business continues to be effective
72 DWF Group plc | Annual Report and Accounts 2022
Governance
Our Partner Directors have continued in
their roles and the Committee has taken
care to monitor the effectiveness of these
unique positions. During the year, the
Committee requested Board approval for
the two Partner Directors to extend their
remit and start to attend meetings of the
Risk Committee and Audit Committee. The
Board approved this request on the basis
that this would enhance the Directors’ skills,
experience and knowledge of the Company
and also bring the views of the partners to
these meetings.
Further information on the considerations
taken by the Board regarding composition
ofthe Board can be found on page 69.
Jonathan Bloomer
Chair, Nomination Committee
Responsibilities
The Committee’s main responsibilities include:
• regularly reviewing the structure, size and
composition of the Board and making
recommendations to the Board with
regard to any changes;
• giving full consideration to succession
planning for Directors and senior
management and overseeing a diverse
pipeline for succession;
• keeping the leadership needs of the Group
under review with a view to ensuring the
continued ability of the Group to compete
effectively in the market;
• identifying and nominating, for the
approval of the Board, candidates to fill
Board and senior management vacancies
when they arise; and
• keeping under review the Group’s policy
on diversity, including gender, age,
educational and professional background
and any measurable objectives that it has
set in implementing the policy, and
progress on achieving the objectives.
The Committee’s duties and responsibilities
are set out in its Terms of Reference,
whichare reviewed annually. These are
available on the Group’s website at
dwfgroup.com/en/investors.
Membership
The Committee is made up of a minimum
ofthree members, a majority of whom are
Independent Non-Executive Directors. The
Chair of the Board chairs the Committee
except when the Committee is dealing with
the appointment of a successor to the Chair
of the Board.
Meetings
The Committee holds a minimum of two
meetings each year and meets at such other
times as the Chair of the Committee shall
require. To enable it to carry out its
responsibilities, the Committee has an
annual rolling agenda maintained by the
Company Secretary, and regularly reviewed
in conjunction with the Chair of the
Committee. The Company Secretary also
maintains a tracker of actions arising from
meetings. At the next scheduled Board
meeting, the Chair of the Committee reports
formally to the Board on the Committee’s
proceedings, including how it has discharged
its responsibilities.
The Committee held three scheduled
meetings during FY2021/22 and the table
onpage 59 provides details of members’
attendance at those meetings. At the
invitation of the Chair of the Committee,
other regular attendees, who can withdraw
as necessary, were in attendance at some
orall of the meetings. These included
theGroup Chief Executive Officer, Group
Chief Financial Officer, Group Chief
Operating Officer, Group General Counsel
&Company Secretary, the Chief People
Officer and the Deputy Company Secretary.
DWF Group plc | Annual Report and Accounts 2022 73
Strategic report Governance Financial statements Other information
Composition, succession and evaluation continued
Nomination Committee report continued
The table below summarises the key activities and considerations of the Committee during the year.
Board
composition
• Regularly reviewed the structure, size and composition of the Board, taking into consideration the skills,
experience, independence and knowledge required to ensure the business continued to be effective
• Approved and oversaw policies and procedures by which applicable partners of the Group were able
tonominate themselves to the Committee for the position of Partner Director
• Reviewed the time required from an Independent Non-Executive Director and assessed whether he or she
contributed effectively and demonstrated commitment to the role
Additional detail can also be found on pages 69 to 71 of the Corporate Governance report
Succession
planning
• Gave full consideration to succession planning and oversaw the development of a diverse pipeline for succession
for Directors and senior management
• Kept the senior management arrangements of the Group under review to ensure the continued ability of the
Group to compete effectively in the market and was informed about the issues affecting the Group and the
market in which it operates
• Identified and nominated, for the approval of the Board, candidates to fill senior management vacancies as they
arose or a new need emerged taking into account the challenges and opportunities facing the Group and the
skills and expertise needed in the future
Diversity
&Inclusion
• Kept under review the Group’s policy on Diversity & Inclusion and progress against achieving the measurable
objectives that it has set in implementing the policy
• Considered diversity in all appointments and succession planning discussions and processes to promote new
and innovative thinking, maximise the use of talent, and support better business decisions and governance
• Actively supported the drive towards our diversity goals throughout the year to make a significant contribution
to our Diversity & Inclusion agenda, maintain competitive advantage, and enable our people to operate in a way
that maximises their contribution to our business
Additional detail can also be found on pages 70 and 71 of the Corporate Governance report
Governance • Reviewed the Committee’s performance to ensure it is operating at maximum effectiveness
• Produced a report describing the roles and responsibilities of the Committee and the actions taken by the
Committee to discharge those responsibilities for inclusion in the Annual Report and Accounts
• Considered the Board and Committee evaluation process and the skills assessment of the Board to inform the
Committee’s reviews of Board composition and its processes for appointments to the Board
74 DWF Group plc | Annual Report and Accounts 2022
Governance
Audit, risk and internal control
Audit Committee report
Dear Shareholder,
I am pleased to present the report on
theactivities of the Audit Committee (the
‘Committee’) for the period ended 30 April
2022. During the period, the Committee
hascontinued to monitor the integrity of
theGroup’s financial reporting, assess the
effectiveness of internal control processes,
oversee the work and quality of the Group’s
Internal Audit function, and monitor the
quality of audit provided by the External
Auditor, PricewaterhouseCoopers LLP
(‘PwC’), with particular regard to its
effectiveness, objectivity and independence.
The principal matters on which the
Committee focused in FY2021/22 are set
outin this report. These included regularly
reviewing significant issues, accounting
policies and areas of management
judgement, monitoring the Half-Year and
Full-Year results timetables and all applicable
documentation, maintaining a good
relationship with both the internal and
External Auditors, and monitoring their
performance, and management of any
impact on the Group’s systems of risk
management and internal control. Following
last year’s tender for audit services, the
Audit Committee oversaw the appointment
and onboarding of our new External Auditor
PwC for the year ended 30 April 2022.
During the year, an external evaluation
oftheeffectiveness of the Committee was
conducted, as part of the Board evaluation
process, further detail of which can be found
on pages 57 and 71. The Committee
considered the outcomes of the external
evaluation as it pertained to its own
performance and effectiveness. I am pleased
to report that the Committee considered
itself to be performing effectively.
As Chair of the Committee, I am pleased
topresent this report for the year ended
30 April 2022. If you would like to ask any
questions about our work during the year
atthe AGM, please see the notes to the
Notice of AGM which sets out the
arrangements for this year.
Luke Savage
Chair, Audit Committee
Luke Savage
Chair, Audit Committee
Members
Luke Savage
1
(Chair)
Tea Colaianni
Sam Tymms
Chris Sullivan
Each member’s expertise and experience
is set out in their biography on pages 58
and 59, alongside their attendance at
Committee meetings.
1 Luke Savage qualifies as a person with recent
andrelevant financial experience.
Focus in FY2021/22
• Oversaw the transition to a new External Auditor and monitored its quality of audit
• Monitored the Group’s adoption of its new operating structure
• Continued attention on managing the impacts of COVID-19
• Monitored the integrity of the Group’s financial reporting
• Assessed the effectiveness of internal control process
Focus in FY2022/23
• Continue to monitor the quality of audit provided by the External Auditor
• Continue to monitor the integrity of the Group’s financial reporting
• Continue to access the effectiveness of internal control processes
DWF Group plc | Annual Report and Accounts 2022 75
Strategic report Governance Financial statements Other information
Audit, risk and internal control
Audit Committee report continued
Meetings
The Committee meets at least three times a
year, to coincide with key dates in the financial
reporting and audit cycle, and otherwise as
the Chair requires. To enable it to carry out
its responsibilities, the Committee has an
annual rolling agenda maintained by the
Company Secretary, and regularly reviewed
in conjunction with the Chair of the
Committee. The Company Secretary also
maintains a tracker of actions arising from
meetings. This ensures that the agenda for
each meeting aligns with both the financial
reporting and audit cycle, as well as
particular matters arising throughout the
year considered appropriate by the
Committee for its scrutiny. At the next
scheduled Board meeting, the Chair of the
Committee reports formally tothe Board on
the proceedings of the Committee, including
how it has discharged its responsibilities.
The Committee held five scheduled meetings
during FY2021/22 and the table on page 59
provides details of members’ attendance at
those meetings. At the invitation of the Chair
of the Committee, other regular attendees,
who can withdraw as necessary, included at
some or all of the meetings: the External
Auditor, the Chair of the Board, the Group
Chief Executive Officer, the Chief Financial
Officer, the Group Chief Operating Officer,
the Group General Counsel & Company
Secretary, the Deputy Chief Financial Officer,
the Group Director of Risk, the Head of
Internal Audit, Deputy Company Secretary
and the Senior Assistant Company
Secretary. The Committee also met privately
with the External Auditor and the Head of
Internal Audit during the year.
Responsibilities
The Committee’s main responsibilities include:
• monitoring the Group’s financial reporting
process and the integrity of the financial
statements and any significant financial
reporting judgements;
• reviewing and challenging the adequacy
and effectiveness of the Group’s internal
financial controls (that is, the systems
established to identify, assess, manage
and monitor financial risks) and the
Group’s internal control and risk
management systems;
• reviewing the objectivity and effectiveness
of the audit process and reviewing the
scope of the audit and non-audit work
undertaken by the External Auditor;
• annually approving the Group’s Internal
Audit Plan and Charter, and receiving
regular reports on internal audits;
• monitoring the work of the Internal
Auditfunction;
• evaluating and challenging the External
Auditor’s role, work and effectiveness; and
• overseeing compliance with applicable
legal and regulatory requirements,
including monitoring ethics and
compliance risks.
The Committee’s duties and responsibilities
are set out in its Terms of Reference,
whichare reviewed annually. These are
available on the Group’s website at
dwfgroup.com/en/investors.
Membership
The Committee is made up of a minimum
ofthree members, each an Independent
Non-Executive Director. The Chair of the
Board is not a member of the Committee
but may attend its meetings by invitation.
Forthe purposes of the UK Corporate
Governance Code 2018 (the ‘Code’), the
Chair of the Committee, Luke Savage,
qualifies as a person with recent and relevant
financial experience. The Committee as a
whole has competence relevant to the legal
and business services sectors in which the
Group operates. The Committee received
training during theperiod on matters
including the PrincipalRisks and Viability
Statement, andthe Task Force on Climate-
related Financial Disclosures.
76 DWF Group plc | Annual Report and Accounts 2022
Governance
The table below summarises thekey activities of the Committee duringthe year.
Financial
reporting
• Monitored the effectiveness of the financial reporting process, including review of the Company’s annual
andhalf-yearly reports, preliminary announcements and any other formal announcements relating to the
Company’s financial performance, alongside reports from management and the External Auditor
• Considered and reported to the Board on significant financial reporting issues and judgements contained in
them, and submitted recommendations and proposals to ensure the integrity of the financial reporting process.
The key areas of judgement or assumption considered by the Committee and discussed with management and
the External Auditor are set out on page 78
• Reviewed the clarity and completeness of disclosures in the financial reports and statements and considered
whether the disclosures made were set properly in context
• Reviewed all material information presented with the financial statements, such as the Strategic report,
Directors’ report and the Corporate Governance statement (in so far as it relates to the audit)
• Reviewed the assessment of going concern and the viability statement in respect of these financial statements
• Concluded that these Annual Reports and Accounts when taken as a whole were fair, balanced and
understandable and provided sufficient information to enable the reader to assess the Group’s position
andperformance, business model and strategy
Internal controls
and risk
management
• Kept under review the adequacy and effectiveness of the Group’s internal financial controls (that is, the systems
established to identify, assess, manage and monitor financial risk and risk management systems
• Received regular reports on any control deficiencies identified and considered the adequacy of management’s
response to identified deficiencies including mitigation actions taken and the implementation of longer-term
control improvements
• Considered reports from the External Auditor on progress and the results of the External Auditor’s testing of
controls as part ofthe External Auditor’s work
• Reviewed the adequacy and security of the Group’s Speak Up policy arrangements whereby staff and contractors
of the Group may, in confidence, raise concerns about possible improprieties in financial reporting or other
matters, and monitored any incidences of reports made under the policy
• Reviewed and approved the Group’s tax strategy and tax policy
Internal Audit • Reviewed and approved the annual schedule of work of the Internal Audit function
• Approved the Internal Audit Charter
• Received reports on the results of the Internal Auditor’s work on a periodic basis and received reports
addressed to the Committee from the Internal Auditor
• Monitored and reviewed the effectiveness of the work of the Internal Audit function including the capacity
within the function
External Audit • Following the appointment of PwC, monitored the onboarding of the External Auditor and the transition from
the previous incumbent
• Oversaw the relationship with the External Auditor, including agreeing remuneration, terms of engagement and
scope of, and plan for, annual and interim audits
• Monitored the audit of the Company and consolidated financial statements ensuring an effective and high-quality
audit was conducted
• Assessed the External Auditor’s independence and objectivity and the effectiveness of the external audit process
• Ensured co-ordination with the activities of the Internal Audit function and evaluated the risks to the quality and
effectiveness of the financial reporting process in light of the Auditor’s communications with the Committee
• Reviewed, and oversaw the application of, the Group’s formal policy on the provision of non-audit services by
the External Auditor as described further on page 79
Governance • Conducted an annual review of its Terms of Reference
• Reviewed the outcomes of an external evaluation of the Committee’s performance to ensure it is operating
atmaximum effectiveness
• Compiled a report describing the roles and responsibilities of the Committee and the actions taken by the
Committee to discharge those responsibilities for inclusion in the Annual Report and Accounts
DWF Group plc | Annual Report and Accounts 2022 77
Strategic report Governance Financial statements Other information
Audit, risk and internal control
Audit Committee report continued
Key areas of judgement
In relation to the period under review, the Committee assessed the appropriateness of the accounting policies adopted and the reasonableness
of any judgements and estimates. The Committee considered management papers and reports, in conjunction with reports from the
External Auditor, in considering the following key areas of judgement and how to address them.
Key judgement Detail of key judgement How addressed by the Committee
Unbilled revenue There are significant estimates involved invaluing
the Group’s unbilled revenue andthe amount that is
expected to be recoverable from clients on unbilled
matters. Key assumptions include historical recoverability
rates, contractual arrangements, the outcomes of
previous matters and agreements with clients.
The Committee has reviewed and challenged management’s
estimate of unbilled revenue. The Committee focused on the
key assumptions within the estimate including the historic
recoverability rates and management’s methodology in
deriving anappropriate estimate. The Committee discussed
and challenged PWC on the audit work performed by them
and their conclusions reached. Considering all of the above,
as well as both management and PWC responses to
challenge, the Committee was satisfied that the assumptions
used were reasonable.
See note 13 to the consolidated financialstatements.
Adjusting items
used in
Alternative
Performance
Measures(‘APMs’)
The reporting, classification and consistency of
adjusting items is an area of focus for the Committee,
in particular, the adherence to the guidance on
APMs provided by the European Securities and
Markets Authority (‘ESMA’).
The Committee considers this a key consideration
when reviewing the financial statements to ensure
that they are fair, balanced and understandable.
The Committee has considered the nature, classification
and consistency of adjusting items, and the adherence
tothe guidance provided by ESMA. The Committee also
reviewed the disclosures of the Group’s APMs to ensure
that they are clear, transparent and assist Shareholders
and wider stakeholders in measuring the performance
ofthe Group. The Committee discussed the use of APMs
with PWC, including the disclosures of the Group’s APMs
with respect to the applicable guidelines. The Committee
determined that disclosures are clear and transparent and
assist shareholders and other stakeholders in measuring
the operating performance of the Group. The Committee
therefore concluded that adjusting items were
appropriately captured and disclosed
APMs are discussed in the Financial review and also
detailed in note 2 and the glossary to the financial
statements.
Control over the
Alternative
Business Structure
(‘ABS’) and
non-ABS groups
Regulations in certain jurisdictions in which the
Group is represented allow ABSs where legal firms
can be owned by non-lawyers. This is not the case in
other jurisdictions (‘non-ABS’). As a result, DWF LLP,
the head of the non-ABS Group, is not directly
owned by any entity within the ABS Group (which
includes the ultimate parent DWF Group plc).
Consolidation of DWF LLP and the other non-ABS
entities depends on the assessment of whether a
member of the ABS group is exposed, or has rights,
to variable returns from its involvement with such
entity and has the ability to affect those returns
through its power over such entity.
The Committee has reviewed the judgement that the
Group continues to consolidate the non-ABS entities,
andhas had due consideration of the Group’s exposure,
or rights, to variable returns from non-ABS entities and
itsability to affect those returns. The Committee also
assessed the work performed by PWC. The Committee
was satisfied with the ongoing consolidation of the
non-ABS entities.
78 DWF Group plc | Annual Report and Accounts 2022
Governance
Internal Audit
The Group’s Internal Audit function, which
provides independent assurance to the Board
on the Group’s risk management and internal
control framework, has regularly provided
input into Committee meetings. The Head of
Internal Audit has direct access to, and regular
meetings with, the Chair of the Committee,
and attends all meetings ofthe Committee.
Aprivate meeting of the Committee and the
Head of Internal Audit was held during the
year to provide an opportunity for feedback
without the Executive Directors present.
Inaddition, theInternal Audit function has
unrestricted access to employees and
documentation across the Group to enable
itto perform its duties. There are also
arrangements in place to enable the function
to commission the support of technical
experts and other additional support as
required. During the year, the Committee
monitored progress ofthe Internal Audit
function against the Internal Audit Plan and
ensured that the function had sufficient
resource to carry outits duties effectively.
The Committee approved the Internal Audit
Charter and the Internal Audit Annual Plan,
which was formulated via a comprehensive
riskassessment involving senior management.
During the year, the Committee received
reports on the outcomes of the Internal Audit
function’s work at each scheduled meeting,
andthe Committee closely monitored
management’s response to actions identified
inthe reports. A focus for the Committee in
FY2022/23 will be to monitor the number of
days Internal Audit actions remain open and
continue to support management with
progress to reduce these.
Effectiveness
The Committee reviewed the effectiveness
ofthe Group’s systems of risk management
and internal control using the Committee
ofSponsoring Organizations Internal
ControlFramework. The Committee noted
improvements in the controls environment
during the year. The Committee considered
that the review of the effectiveness of risk
management and internal control systems
was robust and concluded that the existing
risk management and internal control systems
were effective, noting the ongoing work to be
carried out in strengthening these further.
The Committee received a report in its
September 2021 Committee meeting pack
from the Head of Internal Audit containing
aself-assessment against the Institute
ofInternal Auditors’ Internal Audit Code
ofPractice (the ‘IIA Code of Practice’).
Thepaper provided an overview of the
Internal Audit function’s performance
duringthe year against key performance
indicators, reviewed resources available
tothe Internal Audit function, considered
management’s implementation of required
actions, and highlighted certain areas for
improvement which the Internal Audit
function is addressing.
External Auditor
Appointment
The Audit Committee carried out
competitive tender process and as a result,
the Audit Committee recommended to the
Board that PwC be appointed as External
Auditor to the Company. The recommendation
was made free from third party influence
and no restrictive contractual clause has
been imposed on the Company.
Following the passing of an ordinary
resolution by Shareholders at the 2021
Annual General Meeting of the Company,
PwC was appointed to act as External Auditor
for the financial year ended 30 April2022.
Theaudit partner is Jonathan Studholme.
Deloitte LLP (‘Deloitte’) therefore stood
down as External Auditor at that time and an
audit transition plan was enacted to ensure
an effective transition to PwC.
The Company has complied with the
provisions of the Statutory Audit Services
forLarge Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014.
Independence, objectivity
andeffectiveness
During the year, the Committee assessed
the quality and effectiveness of the Auditor,
having particular regard to:
• the External Auditor’s understanding and
insights into the Group’s business;
• the External Auditor’s approach to key
areas of judgement, the extent of
challenge and the quality of reporting;
• the quality controls in place to deliver
theaudit and how the agreed audit plan
was delivered;
• the External Auditor’s independence and
objectivity;
• the safeguards put in place by the
Committee and the External Auditor
toavoid any compromise of the
independence and objectivity of the
External Auditor;
• management’s feedback on the External
Auditor; and
• private sessions with the External Auditor
without management present.
The assessment took the format of a
questionnaire which was completed by
members of the Audit Committee and
otherkey internal contacts who interact
withthe External Auditors. The feedback
and scoring was collated and reviewed by
the Audit Committee.
The Committee is satisfied that the audit, as
carried out by the External Auditor, is effective
anddemonstrates appropriate, independent
and objective professional scepticism and
challenge to management’s assumptions.
Non-audit services
The Committee reviewed the Company’s
policy on the engagement of the External
Auditor forthe provision of non-audit
services, and recommended some minor
changes for approval by the Board. The
non-audit services policy sets out rigorous
controls intended to ensure the independence
of the Auditor is not impaired, and takes into
account the changes required by the EU
Audit Regulation and Directive (the ‘Audit
Regulation’) and FRC’s Ethical Standard.
Theamended policy stipulates:
1. the nature of non-audit services the
Auditor is permitted to perform;
2. levels of authority for the Executive
toengage the Auditor for approved
non-audit services; and
3. that any non-audit services to be provided
by the Auditor must be approved in
advance by the Committee. For a single
permitted project where the fee is no
more than £50,000, the non-audit
services are considered trivial for the
purposes of the Audit Regulation, and
can instead be approved by the Chief
Financial Officer (or Group Chief Executive
Officer in his absence) (whose authority
to approve such projects will be capped
at a cumulative value of £300,000 in any
one financial year).
As a result of this policy, and to avoid conflict
with its role, the External Auditor does not
act as Remuneration Advisor to the Company.
The Committee also approved the Company’s
policy in relation to the recruitment of
former employees of the External Auditor,
again to manage any potential conflicts
ofinterest.
The audit fees payable to the Auditor
fortheyear ended 30 April 2022 were
£635,000 and non-audit service fees
incurred totalled £105,000 which solely
related to assurance services relating to the
Solicitors’ Accounts Rules accountant report
required by regulation.
This equates to a non-audit to audit fee
ratioof 14%. We continue to ensure the
levelof non-audit fees is compliant with
theCompany’s 50% non-audit fee cap rule
(noting that this cap excludes fees payable
for non-audit work required to be carried
out by the External Auditor by law or
regulation or arising from any assessment
ofthe Group’s compliance with the Solicitors
Accounts Rules). The Committee has
concluded that the provision of non-audit
services has not compromised the External
Auditor’s independence and objectivity.
DWF Group plc | Annual Report and Accounts 2022 79
Strategic report Governance Financial statements Other information
Audit, risk and internal control continued
Risk Committee report
Dear Shareholder,
I am pleased to present this report, which
provides insight into the Risk Committee’s
(the ‘Committee’) activities during the
periodended 30 April 2022. The Committee
supports the Board in fulfilling its obligations
to ensure a framework of prudent and
effective controls, which enable it to assess
and manage risks, including those to the
long-term success of the Group. The
Committee considers an integrated
approach to the risk taxonomy, risk register
and risk assurance activity to be paramount.
The Committee’s activities throughout the
period included: overseeing the continuing
development of the Group Risk Appetite and
supporting framework; determining the
nature and extent of the Group’s principal
risks; conducting deep dives into divisional
risks; and monitoring assurance mapping.
During the year, an external evaluation of
theeffectiveness of the Committee was
conducted, as part of the Board evaluation
process, further detail of which can be
foundon pages 57 and 71. The Committee
considered the outcomes of the external
evaluation and specifically its own
performance and effectiveness. I am pleased
to report that the Committee considered
itself to be performing effectively.
Alongside all my Independent Non-Executive
Director colleagues, I sit on each of the
committees of the Board. I particularly value
the close and effective monitoring of risk
management achieved by my membership
of the Audit Committee, as well as the Chair
of the Audit Committee’s membership of
this Committee.
I shall be available at the Company’s AGM
toanswer any questions you may have.
Sam Tymms
Chair, Risk Committee
Sam Tymms
Chair, Risk Committee
Members
Sam Tymms (Chair)
Luke Savage
Tea Colaianni
Chris Sullivan
Each member’s expertise and experience
is set out in their biography on pages 58
and 59, alongside their attendance at
Committee meetings.
Focus in FY2021/22
• Continuing attention on managing risks relating to the impact of COVID-19
• Monitoring the Group’s adoption of its new operating structure
• Monitoring the impact of risks associated with our increasing focus on ESG
• Increased attention on assurance activities in connection with operational risk,
particularly in the area of cyber attacks
Focus in FY2022/23
• Continue to monitor the impact of risk associated with our new ESG Strategy.
• Continue to focus on particular areas of risk the organisation may face, such as the
external environment, people and cyber risks.
80 DWF Group plc | Annual Report and Accounts 2022
Governance
Meetings
The Committee meets at least three times
ayear and otherwise as the Chair or
members require. To enable it to carry out
itsresponsibilities, the Committee has an
annual rolling agenda maintained by the
Company Secretary, which is regularly
reviewed in conjunction with the Chair of
theCommittee. The Company Secretary
alsomaintains a tracker of actions arising
from meetings. At the next scheduled Board
meeting, the Chair ofthe Committee reports
formally to the Board on the Committee’s
proceedings, including how it has discharged
its responsibilities.
The Committee held four scheduled meetings
during FY2021/22 and the table on page 59
provides details of members’ attendance at
those meetings. At the invitation of the Chair
of the Committee, other regular attendees,
who can withdraw as necessary, included at
some or all of the meetings: the Chair of the
Board, the Group Chief Executive Officer,
the Chief Financial Officer, the Group Chief
Operating Officer, the Group General
Counsel & Company Secretary, the Group
Director of Risk, the Head of Internal Audit,
Deputy Company Secretary and the Senior
Assistant Company Secretary.
Risk management governance structure
Board
The Board establishes the risk appetite for
the Group, so management can manage,
measure and report on risk appropriately
across the Group. The Board delegates
oversight of risk management activities to
the Risk Committee. You can find more detail
about the Board’s activities on page 63.
Responsibilities
The Committee’s main responsibilities include:
• advising the Board on the Group’s overall
Risk Appetite, tolerance and strategy;
• overseeing and advising the Board on the
Group’s current risk exposures and future
risk strategy;
• keeping under regular review the Group’s
overall risk assessment processes;
• providing advice to the Board on the
assessment of principal risks facing
theGroup;
• approving the remit of the Risk Management
and Compliance functions;
• considering the major findings of internal
investigations and management’s
response; and
• ensuring it obtains suitable assurance on
the risk management and internal controls
embedded within the organisation.
The Committee’s duties and responsibilities
are set out in its Terms of Reference,
whichare reviewed annually. These are
available on the Group’s website at
dwfgroup.com/en/investors.
Membership
The Committee is made up of a minimum
ofthree members, each an Independent
Non-Executive Director. The Chair of the
Board is not a member but may attend
itsmeetings by invitation. Members of
theCommittee have experience of risk
management matters and practices. The
Committee received training during the
yearon matters including risk appetite
andthe application of competition law to
thebusiness.
Audit Committee
The Audit Committee oversees the
development and implementation of the
Group’s Internal Audit assurance framework
and as part of this, regularly reviews the
effectiveness of the Group’s Risk Management
Framework and internal control systems.
Youcan find more detail about the Audit
Committee’s activities on pages 75 to 79.
Risk Committee
The Risk Committee classifies the Group’s
principal areas of risk through the Group
Risk Taxonomy. This ensures oversight of
theGroup’s approach to risk management
and the development of management and
mitigation approaches, to ensure risks
remain, or are quickly brought within,
theGroup’s risk appetite.
The Risk Committee also monitors and
reviews the effectiveness of the Group’s
compliance function, as well as providing
oversight and advice to the Board in relation
to future risk strategy.
Executive Risk Committee (‘ERC’)
The Executive Risk Committee is a
management committee chaired by the
Group Chief Executive Officer. It comprises
senior management including members of
the Executive Board. The Committee
oversees the operational management of
the Group’s risks by identifying, assessing,
mitigating, and reporting risk.
DWF Group plc | Annual Report and Accounts 2022 81
Strategic report Governance Financial statements Other information
The table below summarises the key activities of the Committee during the year.
Risk • Advised the Board on the Group’s overall Risk Appetite, tolerance and strategy, and the principal and
emergingrisks
• Kept under review the Group’s overall risk assessment processes, including the use of both qualitative
andquantitative metrics
• Reviewed the capability of the Group to identify and manage new and emerging risks
• Conducted deep dives into divisional key risks
• Monitored progress against key milestones in the risk management roadmap
• Obtained assurance on the Company’s ability to reduce the likelihood of principal risks materialising
andtheimpact on the business of risks that do materialise
Regulatory • Reviewed compliance against SRA standards
• Conducted a review of the adequacy of current health and safety compliance
• Considered the impact of TCFD on risk management systems and reporting
Systems
andcontrols
• Reviewed reports on the adequacy and effectiveness of the Group’s risk management systems and controls
and any non-compliance thereto, including in relation to detecting fraud and financial crime, the prevention
ofbribery, corruption and money laundering, and compliance with the Market Abuse Regulations
• Approved the Group’s Anti-Bribery and Corruption policy
• Received regular reports from the Group Director of Risk
• Considered any major findings of internal investigations and management’s response
• Considered the adequacy and effectiveness of the Group’s Risk Management function including receiving
aself-assessment report on the implementation of the risk management process which highlighted that
acomprehensive Risk Management Framework had been established and identified areas of focus going forwards
Governance • Conducted an annual review of its Terms of Reference
• With the assistance of an external evaluation, reviewed the Committee’s performance to ensure it is operating
at maximum effectiveness
• Compiled a report describing the roles and responsibilities of the Committee and the actions taken by the
Committee to discharge those responsibilities for inclusion in the Annual Report and Accounts
Audit, risk and internal control continued
Risk Committee report continued
82 DWF Group plc | Annual Report and Accounts 2022
Governance
Remuneration
Directors’ Remuneration report
Dear Shareholder,
I am pleased to present the Directors’
Remuneration report for the year ended
30 April 2022.
Our current Remuneration Policy was
approved by 98.99% of Shareholders at the
2019 AGM. In line with the normal three-year
renewal cycle, we will be seeking Shareholder
approval for a revised Policy, set out on pages
88 to 101, at the AGM in 2022. In advance of
this, the Remuneration Committee undertook
a review of our current Policy and engaged
with our major Shareholders as well as key
representative bodies on the proposed
changes.
Pages 108 to 109 of this report constitute
the Annual Report on Remuneration,
summarising the outcomes for FY2021/22
and how we intend to operate the policy
during FY2022/23.
This Directors’ Remuneration report sets
out the context of, and insight into, our
Director pay arrangements, how our
remuneration framework is aligned with
therest of the workforce, and the decisions
the Committee made as a result of business
performance for this year. Where the
Committee has exercised its judgement
ordiscretion, it is documented clearly.
Directors’ Remuneration Policy –
2022review
Our reward philosophy remains unchanged.
We believe in a simple and transparent
framework which rewards our Executives
based on the financial and strategic
performance of the business, the value
created for our Shareholders, and their
individual performance. We also recognise
that investor expectations around executive
pay continue to evolve.
In determining the new Policy, the
Committee followed a robust process which
included a thorough review of the current
Policy at Committee meetings in 2021 and
early 2022 to ensure that it continues to
support delivery of our business strategy.
The Committee considered input from our
Executives and our independent advisors
aswell as considering best practice,
Shareholder guidance and any specific
feedback from our major Shareholders.
Following the conclusion of that process, the
Remuneration Committee has determined
that the remuneration framework in our
Policy remains consistent with our core
strategic objective of delivering long-term
sustainable and profitable growth and
supports our performance-orientated
culture. In particular, the Committee agreed
that an incentive model comprising an
annual bonus and performance shares
currently remains appropriately aligned with
these goals. Accordingly, the Committee
concluded that no substantial changes are
required to the Policy at this time.
Tea Colaianni
Chair, Remuneration Committee
Members
Tea Colaianni (Chair)
Luke Savage
Sam Tymms
Chris Sullivan
Jonathan Bloomer
Each member’s expertise and experience
is set out in their biography on pages 58
and 59, alongside their attendance at
Committee meetings.
Focus in FY2021/22
• Determined remuneration arrangements resulting from the Group’s adoption of its
new operating structure.
• Reviewed the executive remuneration framework.
• Reviewed the appropriateness and relevance of the Remuneration Policy.
• Continued to monitor the impact of COVID-19 on remuneration arrangements.
• Reviewed pay fairness and transparency by considering wider workforce
policies,toensure alignment with Executive Director and senior management
remunerationarrangements.
• Developed further the communication with prospective members of the wider.
workforce on the benefits of the equity element of the remuneration package offered
by the Group.
Focus in FY2022/23
• Recommend a revised Remuneration Policy to Shareholders for approval
atthe2022AGM.
• Engage with Shareholders on the proposed revised Remuneration Policy.
• Determine the incentive arrangements and outcomes for the Executive Directors and
senior management.
• Develop further the communication with prospective members of the wider
workforceon the benefits of the equity element of the remuneration package
offeredby the Group.
• Continue to consider wider workforce policies to ensure alignment with Executive
Directors and senior management remuneration arrangements.
DWF Group plc | Annual Report and Accounts 2022 83
Strategic report Governance Financial statements Other information
Remuneration continued
Some minor amendments only are
proposed in the new Policy in order to
provide greater clarity in specific areas as
outlined on page 88.
Approach to remuneration in 2022/23
Alongside the review of the Policy, the
Remuneration Committee also assessed the
performance measures used in the incentive
plans to ensure they remained appropriately
aligned with strategic priorities. Following
this assessment, we have made some
modest changes to the weighting of
performance measures in our incentive
structure for 2022/23, in particular
introducing a specific element of the
annualbonus linked to ESG performance,
whilst maintaining our focus on key
financialmetrics. The changes were made
asthe three performance measures are
considered equally important in contributing
to the success of the Group
The resulting structure of performance
measures that we currently intend to apply
in 2022/23 is summarised in the table below.
How the Policy was implemented in the
2021/22 financial year
Bonus
The Committee considered the financial
performance of the Company when
determining the bonus outcomes for the
Executive Directors. The performance
conditions were:
• 70% adjusted PBT;
• 20% strategic and operational objectives;
and
• 10% lock-up days target.
The adjusted PBT performance condition
was achieved between threshold and target.
The strategic and operational objectives
were fully achieved, however the gross
lock-up days target was not achieved. This
meant that eachExecutive Director was
eligible toreceive abonus of 47% of their
maximum opportunity.
Having carefully considered this formulaic
outcome, the Committee was satisfied that
the bonuses earned were appropriate and
that no exercise of discretion was required.
The resultant bonuses were 70.4% of salary
(£373k) for the Group Chief Executive Officer,
47% of salary (£150k) for the Chief Financial
Officer and 47% of salary (£141k) for the
Group Chief Operating Officer. You can find
details on the strategic and operational
objectives on page 106 of this report.
The resulting total bonus award for the
three Executive Directors was in aggregate
£665k (rounded down to the nearest £1k
asillustrated on page 105). Following
determination that the above bonuses had
been earned and should be awarded, the
Group Chief Executive Officer advised the
Committee that it was his view that each
Executive Director had contributed equally
as “one team” to deliver excellent, robust
results and requested that the Committee
consider taking the available bonus total
andawarding this equally. The Committee
considered the Group Chief Executive
Officer’s request and concluded that the
approach was consistent with the
Remuneration Policy, would not result in
anyExecutive Director receiving more than
their maximum bonus opportunity and that
Shareholders would not be disadvantaged
as the total aggregate bonus remained
unchanged at £665k (rounded down to the
nearest £1K as illustrated on page 105).
TheCommittee further discussed the
individual contributions made by the
Executive Directors, and in particular the
Chief Financial Officer and Group Chief
Operating Officer, and therefore considered
the approach to be appropriate in respect
ofthe FY2021/22 bonus and approved that
the aggregate total bonus of £665k be
distributed equally between the three
Executive Directors. As set out on page 105,
the actual bonuses paid were 41.8% of
salary (£221k) for the Group Chief Executive
Officer, 69.3% of salary (£221k) for the
KPI 2021/22 2022/23 Strategic rationale
Annual bonus:
one-year performance
Adjusted PBT (Financial) 70% 50% Consistent with our strategic aim of
sustainable, profitable growth. Maintains
the primary focus on a profit measure in
short-term incentivisation
Lock-up days (Financial) 10% 20% Consistent with our strategic aim of
improving operational efficiency to deliver
sustainable, profitable growth
ESG – 10% Consistent with our strategic aim of
developing amarket leading position
onESGmatters
Strategic and operational
objectives
20% 20% Enables a focus on specific personal
strategic and operational deliverables
Equity Incentive Plan:
three-year performance
EPS 40% 33.3% Consistent with our strategic aim of
sustainable, profitable growth
ROCE 40% 33.3% Consistent with our strategic aim of
generating sustainable profitability
andcreating Shareholdervalue
Cash conversion 20% 33.3% Consistent with our strategic aim of
improving operational efficiency
Group performance for the 2021/22
financial year
The implementation of our strategy
(asoutlined on page 103) has been
measured against the KPIs set out below:
Financial KPIs
• Net revenue growth 3.6%
(FY2020/21:+10.9%)
• Underlying organic net revenue growth
+7% (FY2021/22: +8.0%)
• Gross profit margin 51.7%
(FY2020/21: 50.8%)
• Cost to income ratio 38.4%
(FY2020/21: 39.2%)
• Adjusted EBITDA £66.7m
(FY2020/21: £58.1m)
• Adjusted profit before tax £41.4m
(FY2020/21: £34.2m)
• Profit / (Loss) before tax £22.3m
(FY2020/21: £(30.6)m)
• Adjusted diluted EPS 10.7p
(FY2020/21: 7.4p)
• Net revenue per partner: £975k
(FY2020/21: £924k)
• Lock-up days 179 days
(FY2020/21: 186days)
• Free cash flow £12.9m
(FY2020/21: £32.1m)
• Net debt £71.8m (FY2020/21: £60.2m)
Non-financial KPIs
• Net promoter score 63 (FY2020/21: 49)
• Engagement survey score 76
(FY2020/21: 76)
• % Executive Board roles held by women
36% (FY2020/21: 40%)
• % senior leadership positions held by
women 29% (FY2020/21: 28.9%)
• % Ethnic Minority representation in
seniorleadership positions 4%
(FY2020/21: 4.2%)
84 DWF Group plc | Annual Report and Accounts 2022
Governance
ChiefFinancial Officer and 73.9% of salary
(£221k) for theGroup Chief Operating
Officer, with 50%being awarded in cash
andthe remaining 50% being deferred in
shares. TheCommittee noted that the
circumstances were such that the
approachshould be supported.
The Committee further noted that the
approach does not override the formulaic
outcome in respect of bonus costs.
2019 LTIP award
The performance period for the 2019 LTIP
award, made under the Equity Incentive Plan
(‘EIP’) ended on 30 April 2022. The formulaic
outcome of the award was 41% vesting.
Thiscomprised full vesting of the cash
conversion measure following a substantial
improvement in lock-up days over the
period, partial vesting of the ROCE measure
and zero vesting of the EPS measure. Full
details of targets and performance are on
page 107. The Remuneration Committee
considered the outcome in the context of
business performance and the broader
environment over the performance period
and was satisfied that the vesting outcome
was appropriate and that no exercise of
discretion was required. The vested shares
will be subject to a two year holding period.
LTIP awards granted during FY2021/22
The Company granted an LTIP award in
August 2021, which will vest following the
expiry of the three-year performance
periodand is subject to the satisfaction of
performance conditions. The vested shares
are thereafter subject to a two-year holding
period. The awards were made with the
following performance conditions to Sir
Nigel Knowles at 175% of salary and to each
of Chris Stefani and Matthew Doughty at
125% of salary:
• EPS (40% weighting);
• ROCE growth (40% weighting); and
• cash conversion (20% weighting).
The level of awards and percentage
weighting were unchanged from the
prioryear.
You can find further details of the LTIP
metrics, including targets and rationale,
onpage 107 of this report.
Executive Directors’ Pay Review
The Remuneration Committee undertook
itsregular annual review of the Executive
Directors’ base salaries and agreed an
increase of 4% effective from 1 May 2022.
Incoming to this determination, the
Committee took into account various
relevant internal and external factors
including the average employee and
partnersalary increase in January 2022 of
5.65%. This is the first pay rise, excluding
promotions, in the Executive Directors’
salaries since IPO in 2019.
Shareholder considerations
Similar to previous years, we have continued
to maintain transparent and open dialogue
and engagement with our Shareholders.
As part of the Directors’ Remuneration
Policy Review, major Shareholders and proxy
agencies were contacted to notify them of
the limited proposed changes and to give
them an opportunity to feedback any views.
Feedback received by the Committee was
reviewed and any suggestions made were
implemented. Of the responses received,
allwere supportive of the changes.
Wider workforce considerations
When considering executive pay, the
Committee takes into account the wider
workforce remuneration and conditions.
We believe allowing all our employees to
share in the success of the Company is a key
performance driver. We continue to issue
share awards to our people for promotions
and exceptional contributions to the
business. Following the approval of the
scheme last year, ‘Emerging Talent’ awards
were made during the course of the year to
retain and motivate talent and support
succession planning. During FY2021/22, we
continued to offer a Buy As You Earn (‘BAYE’)
matched-share scheme in the UK, US and
Spain. Matching shares are received on a
onefor two basis, so for every two shares
purchased over the 12-month investment
period, participants receive one matching
share three years from the start of the
relevant 12-month investment period subject
to certain conditions. In total, 11%of our
eligible people are currently participating in
aBAYE matched-sharescheme. There are
currently no plans to expand number of
jurisdictions the BAYE operates in however,
this is kept under review.
On pages 110 to 114 of this report, there are
details of the pay conditions of our wider
workforce, our CEO-to-worker pay ratio, our
incentives throughout the business, and our
gender and ethnicity pay gap statistics.
You can find further detail on the key
matters covered by the Committee during
the year on pages 86 and 87.
Effectiveness
During the year, an external evaluation of
the effectiveness of the Committee was
conducted, as part of the Board evaluation
process, further detail of which can be
found on page 71.
The Committee considered the outcomes
ofthe external evaluation as it related to
theCommittee’s own performance and
effectiveness. I am pleased to report
thatthe Committee recommended to
theBoard that it considered itself to be
performing effectively.
Further detail of how our remuneration
forExecutive Directors aligns with our
strategic priorities is set out on page 102
ofthis report.
If you would like to discuss any aspect of this
Directors’ Remuneration report, I would be
happy to hear from you. You can contact
methrough the Company Secretary,
DarrenDrabble. If you would like to ask any
questions in respect of this report at the
AGM, please see the notes to the Notice of
AGM which sets out the arrangements for
this year. I look forward to your support on
the Directors’ Remuneration Policy and the
Annual Report on Remuneration at the
upcoming AGM.
Tea Colaianni
Chair, Remuneration Committee
Included in this report Pages
The Remuneration
Committee and its
activitiesduring the year
86 and 87
Directors’ Remuneration
Policy
91 to 101
Remuneration –
At a glance including:
Business context and how
ourincentive performance
measures align to our strategy
102
Remuneration outcomes for
FY2021/22 – At a glance
103 and
104
Annual report
onremuneration
108 to
109
Wider workforce
remuneration including:
Remuneration principles and
wider workforce remuneration
across the Group
110
Communication and
engagement with employees
and partners
111
CEO-to-worker pay ratio 111 and
112
UK gender and ethnicity
paygap reporting
113 and
114
DWF Group plc | Annual Report and Accounts 2022 85
Strategic report Governance Financial statements Other information
Remuneration continued
The Remuneration
Committee and its
activitiesduring the year
Responsibilities
The Committee’s main responsibilities include:
• making recommendations to the Board
regarding the Group’s framework or
broad policy for the remuneration of
theChair of the Board, the Executive
Directors and senior management;
• determining the entire individual
remuneration packages for those
individuals, including:
• approving any severance compensation
arrangements in accordance with the
Remuneration Policy, which are fair, do
not reward failure and fully recognise
the individual’s duty to mitigate any
loss; and
• considering how the pay and work
conditions of the Group’s wider
workforce should be taken into account
when determining remuneration;
• consistent with the approach applicable
to the wider workforce, determining and
administering the Group’s share plans
andequity incentive plans in respect
ofthe Chair of the Board, the Executive
Directors and senior management; and
approving awards and performance
conditions, including satisfaction of
performance conditions and the exercise
of any discretion by the Committee;
• regularly reviewing the ongoing
appropriateness and relevance of the
Remuneration Policy; and
• reviewing remuneration and related
policies applicable to the Group’s
widerworkforce.
The Committee’s duties and responsibilities
are set out in its Terms of Reference, which
are reviewed annually. These are available
on the Group’s website at dwfgroup.com/
en/ investors/shareholder-hub/governance.
Membership
The Committee is made up of a minimum
ofthree members, and each is an
Independent Non-Executive Director.
TheChair of the Board is a member of
theCommittee andwas considered
independent on appointment as Chair of
theBoard. Members of the Committee
collectively haveappropriate knowledge,
expertise andprofessional experience
concerning remuneration policies and
practices. TheCommittee received training
during theperiod on matters including
remuneration corporate governance,
aswellas regular updates on best
practiceand remuneration trends.
Meetings
The Committee meets at least four times a
year and otherwise as the Chair or members
require. To enable the Committee to carry
out its responsibilities, the Committee has
an annual rolling agenda maintained by the
Company Secretary, and regularly reviewed
in conjunction with management. The
Company Secretary also maintains a tracker
of actions arising from meetings. This
ensures the agenda for each Committee
meeting aligns with the remuneration
strategy, as well as particular matters arising
throughout the year considered appropriate
by the Committee for its scrutiny. At the next
scheduled Board meeting, the Chair of the
Committee reports formally to the Board on
the Committee’s proceedings, including how
it has discharged its responsibilities.
The Committee held five scheduled meetings
during FY2021/22, and the table on page 59
provides details of members’ attendance at
those meetings. At the invitation of the Chair
of the Committee, other regular attendees,
who can withdraw as necessary, included at
some or all of the meetings were: the Group
Chief Executive Officer (‘CEO’), the Chief
Financial Officer (‘CFO’), the Group Chief
Operating Officer (‘COO’), the Chief People
Officer, the Company Secretary and the
Deputy Company Secretary. No Director or
member of senior management was present
for any discussions that related directly to
their own remuneration.
None of the Committee members has any
personal financial interest (other than as
Shareholders) in the decisions made by the
Committee, conflicts of interest arising
fromcross-directorships or day-to-day
involvement in running the business.
Following its appointment as remuneration
consultant, Deloitte LLP advised the
Remuneration Committee during the
financial year on all aspects of the
Remuneration Policy for Executive Directors
and senior management. As the outgoing
External Auditor, Deloitte provided audited
services during the financial year; however,
audit services were ceased before Deloitte
provided any advice to the Remuneration
Committee. The Remuneration Committee
was satisfied that no conflict of interest
exists or existed in the provision of these
services. Deloitte was appointed by the
Committee, and the Committee is satisfied
that the advice provided is independent.
Deloitte is a member of the Remuneration
Consultants Group and the Voluntary Code
of Conduct of that body is designed to
ensure objective and independent advice is
given to remuneration committees. Fees of
£29,505, chargeable on a time and materials
basis, were paid to Deloitte during the year
in respect of remuneration advice received.
Deloitte attends meetings of the Committee
by invitation. Deloitte does not have any
other connection to the Company or
itsDirectors.
Deloitte were appointed as remuneration
advisors by the Remuneration Committee
following a tender process.
86 DWF Group plc | Annual Report and Accounts 2022
Governance
The table below summarises the key activities of the Committee during the year.
Remuneration
andrisk
• In conjunction with the Risk Committee, considered the compatibility of the Group’s remuneration strategy with
the Group’s risk management policies
Entire individual
remuneration
• Made recommendations to the Board regarding the application of the Remuneration Policy for the Chair of the
Board, the Executive Directors, the Partner Directors and senior management. This included pension rights,
any compensation payments, and the level and structure of their remuneration, giving full consideration to the
matters set out in the UK Corporate Governance Code 2018 (the ‘Code’), including Provision 40, and any other
relevant laws and regulations in the jurisdictions where the Group operates
Remuneration
Policy
• Regularly reviewed the ongoing appropriateness and relevance of the Remuneration Policy to ensure that
reward policies worked to promote the long-term success of the Company and its long-term strategic goals
• Ensured that a significant proportion of the remuneration of the Executive Directors is linked to Company
andindividual performance and that any performance-related elements of remuneration are transparent,
stretching and rigorously applied
• Monitored the Executive Directors’ progress against objectives and determined Executive Director bonus outcomes
Wider workforce
remuneration
• Reviewed remuneration and related policies applicable to the wider workforce (partners and employees),
including receiving the Company’s Gender and Ethnicity Pay Gap Report and reports on the Group’s partner
and employee engagement mechanisms
• Supported the Board’s monitoring of whether Group remuneration policies and practices support its culture
and strategy
• Considered how pay and work conditions across the Group should be taken into account when determining
remuneration of the Chair of the Board, the Executive Directors, the Partner Directors and senior management
• Oversaw arrangements for the wider workforce bonus plan
Share plans
andequity
incentive plans
• Determined and administered policies for the grant of awards/options to the Executive Directors, the Partner
Directors and senior management ensuring that they are provided with appropriate incentives consistent with
the Remuneration Policy
• Approved awards, and associated performance targets, for Executive Directors, Partner Directors and
seniormanagement
• Determined whether performance targets had been met for awards held by Executive Directors, Partner
Directors and senior management
• Oversaw the administration of the wider workforce share plans and equity incentive plans, including reviewing
policies and their application to ensure fair and consistent administration across the wider workforce
Shareholders • Receiving reports on engagement with proxy advisors and major Shareholders from the Chair of the Committee
and the Company Secretary
Governance • Received presentations from the Committee’s remuneration advisors on developments in corporate
governance and market trends, to inform the Committee’s regular review of the Remuneration Policy
• Conducted an annual review of its Terms of Reference
• Received feedback on the Committee’s performance from an external evaluator to ensure it is operating effectively
• Prepared this Annual Report, setting out the Company’s remuneration policies and practices and its duties and
activities during the year
DWF Group plc | Annual Report and Accounts 2022 87
Strategic report Governance Financial statements Other information
Remuneration continued
Directors’ Remuneration
Policy
The current Directors’ Remuneration Policy
(the ‘Remuneration Policy’) was approved by
our Shareholders at the 2019 AGM and can
be found in full in the 2019 Annual Report.
We are required by law to seek renewed
Shareholder approval for a Remuneration
Policy at the 28 September 2022 AGM that
will govern and guide the Company’s future
remuneration payments. The Remuneration
Policy described in this section will be
applicable for up to three years from
the2022 AGM, subject to approval
byShareholders.
The Remuneration Committee has established
the Remuneration Policy for the remuneration
of the Chair and Executive Directors, and the
Board has established the Remuneration
Policy for the remuneration of the
Non-Executive Directors.
Committee process to determine new
Remuneration Policy
The Committee undertook a thorough
process to determine the Remuneration
Policy, as follows:
• The Committee reviewed how the existing
Policy has worked in practice over the
period it has been in force including pay
and performance outcomes.
• The Committee considered the
Group’sstrategy and the best way
toalignthe remuneration.
• The Committee received advice from its
independent remuneration consultant,
Deloitte, onthe impact of the Code,
Regulations and currentinvestor opinion.
• Pay policies and conditions throughout the
Group, including considerations around
fairness and equality, were reviewed.
• The Committee considered previous
feedback received from Shareholders
andemployees.
• The Committee also consulted with the
CEO, CFO and COO on the proposed
Remuneration Policy.
The Committee was mindful in its
deliberations on the new Remuneration
Policy on where there were potential
conflicts of interest and sought to minimise
them through an open and transparent
process internally and by seeking
independent advice from Deloitte.
Following its review, the Committee
concluded that no substantial changes were
required to the Remuneration Policy at this
time. It also agreed that a number of minor
amendments should be made in the new
Remuneration Policy to provide greater
clarity and flexibility in specific areas in
linewith standard market practice, including
the following:
• The new Remuneration Policy clarifies
that the level of pension provision for
Executive Directors is capped in line with
the pension contribution applicable to the
wider UK workforce.
• The post-employment shareholding
guideline has been updated to align to
Investment Association guidance, namely
100% of the Directors’ ‘in-employment’
guideline for two years after stepping
down as a Director. The Committee’s
discretion to amend, waive or interpret
shareholding guidelines in appropriate
circumstances has been clarified.
• The new Remuneration Policy contains
flexibility for the Committee to set and
measure bonus targets other than on an
annual basis. It is expected that use of this
flexibility will be reserved for exceptional
circumstances (e.g. a pandemic), for
example, where there islimited visibility
toset robust 12-month targets. Flexibility
will also exist in the Annual Bonus Plan for
the Committee toalter the weighting of
financial and non-financial performance
measures in exceptional circumstances or
to amend any performance condition if a
material event occurs which causes the
Committee to determine that the original
condition isno longer appropriate.
• Minor amendments have been made to
the recruitment remuneration policy to
clarify the scope of potential costs and
replacement awards that could be made
to a newly appointed Director and also to
set out the Committee’s flexibility to use
adifferent performance condition for
theindividual’s initial EIP award. Minor
amendments have also been made in
thepayments for loss of office section
toreflect the Committee’s flexibility to
determine the form and calculation of a
departing Director’s annual bonus.
• In recognition of the required time
commitment, the new Policy will permit
the payment of supplementary fees
where a NED takes on additional
responsibilities. It will also permit the
provision of additional travel allowance
payments to NEDs for time spent
travelling internationally on Company
business – it is currently envisaged that
any use of this provision would be
restricted to non-UK-based NEDs.
Remuneration strategy
DWF’s Remuneration Policy is designed
toprovide a framework to:
• promote the long-term success of
theCompany;
• support DWF’s strategy, linked to key
KPIssuch as driving incremental revenue
and improvement in profit margin over
time, as well as enabling DWF to deliver
dividends to Shareholders in line with
theGroup’s dividend policy;
• recruit, retain and develop high-quality
people who are experts in their field and
to focus the Executive Directors and
Executive Board on the delivery of the
Group’s strategy;
• encourage widespread equity ownership
across the Executive Directors, Executive
Board as well as the broader partner and
fee earner population in order to create
acompensation model which is distinct
from those offered by the Group’s law
firm peers and to ensure a long-term
focusand alignment of interest with
Shareholders;
• provide an appropriate balance between
fixed and performance-related pay to
support a high-performance culture and
aplatform for delivering high-quality,
complex legal services to clients, taking
into account local factors;
• take into account the interests of
allstakeholders;
• promote DWF’s cultural values; and
• adhere to principles of good
corporategovernance and appropriate
risk management.
88 DWF Group plc | Annual Report and Accounts 2022
Governance
In determining the new Remuneration Policy, the Committee paid particular attention to Provision 40 of the Code.The following table
summarises theCommittee’s views:
Factor How our new Remuneration Policy aligns
Clarity The proposed Remuneration Policy sets out clearly the basis for any payments and the terms of the incentive
arrangements operated.
The performance conditions used for the Bonus Plan and Equity Incentive Plan are based on a number of
theCompany’s KPI’s ensuring direct alignment between the successful implementation of the strategy and
thereward provided to the Executive Directors.
Simplicity The Incentive Plans are in line with standard UK market practice and designed to be easy to understand,
andtobesimple and transparent to all stakeholders.
Risk The Remuneration Policy includes:
• setting defined limits on the maximum awards which can be earned under the Bonus Plan and the Equity
Incentive Plan;
• requiring the deferral of a substantial proportion of the incentives in shares for a material period of time;
• aligning the performance conditions with the strategy of the Group;
• ensuring a focus on sustainable performance through the Equity Incentive Plan;
• ensuring there is sufficient flexibility to adjust payments through malus and clawback; and
• an overriding discretion to depart from formulaic outcomes under the Incentive Plans.
These elements mitigate against the risk of target-based incentives by:
• limiting the maximum value that can be earned;
• deferring a significant proportion of the value earned in shares for the long-term which helps ensure that the
performance earning the award was sustainable and thereby discouraging short-term behaviours;
• aligning any reward to the agreed strategy of the Group;
• focusing on the sustainability of the performance over the longer term under the Equity Incentive Plan;
• reducing the awards or cancelling them if the behaviours giving rise to the awards are inappropriate; and
• reducing the awards or cancelling them, if it appears that the criteria on which the award was based do not
reflect the underlying performance of the Company.
Predictability The Remuneration Policy sets out clearly the potential rewards available to the Executive Directors depending on
the performance achieved. In addition, all the checks and balances set out above under Risk are disclosed as part
of the Remuneration Policy.
Proportionality The Group’s Incentive Plans clearly reward the successful implementation of the strategy and, through deferral
and measurement of performance over a number of years, ensure that the Executive Directors have a strong
drive to ensure that the performance is sustainable over the long term. Poor performance cannot be rewarded
due to the Committee’s overriding discretion to depart from the formulaic outcomes under the Incentive Plans
ifthey do not reflect underlying business performance.
Alignment
toculture
A key tenet of the DWF culture is a focus on ensuring long-term sustainable performance. This is reflected directly
in the type of performance conditions used in the Incentive Plans which assess sustainable performance using
avariety of non-financial and financial measures, as appropriate.
The focus on share ownership (and the partnership ethos encapsulated in shared ownership) and long-term
sustainable performance is also a key part of the Group’s culture.
DWF Group plc | Annual Report and Accounts 2022 89
Strategic report Governance Financial statements Other information
Remuneration continued
In addition, the Remuneration Policy reflects key remuneration elements of the Code:
Key Remuneration Element of the Code Alignment with our Remuneration Policy
Five-year period between the
date of grant and realisation
for equity incentives
The Equity Incentive Plan meets this requirement.
Phased release of equity awards The Equity Incentive Plan ensures the phased release of equity awards through annual
rolling vesting.
Discretion to override
formulaic outcomes
The Remuneration Policy contains the ability to override formulaic outcomes and apply
discretion where deemed necessary.
Post-cessation shareholding requirement We have a two-year post-cessation shareholding requirement. This will be held in such a
mechanism as the Committee deems appropriate
Pension alignment The pension entitlement for Executive Directors is in line with eligibility for the wider
UKworkforce.
Malus and clawback The current malus and clawback provisions comply with the Code.
Remuneration Policy discretion
The Remuneration Committee has the
abilityto exercise independent judgement
and discretion when approving any of the
outcomes of the Remuneration Policy,
including the ability to override formulaic
outcomes which may involve upward or
downward adjustments. Any discretion
applied would take into account individual
performance as well as Group performance,
and the wider environment. The
Remuneration Committee may also exercise
some administrative and/or operational
discretion under relevant plan rules approved
by Shareholders. The Remuneration
Committee also has the discretion to amend
the Remuneration Policy with regard to
minor or administrative matters where it
would, in the opinion of the Remuneration
Committee, be disproportionate to seek or
await Shareholder approval.
The Remuneration Committee reserves the
right to make any remuneration payments
and payments for loss of office (including
exercising any discretions available to it
inconnection with such payments)
notwithstanding that they are not in line
with this Remuneration Policy, where the
terms of the payment were agreed (i) before
this Remuneration Policy came into effect,
provided that the terms of the payment
were consistent with the Shareholder-
approved Remuneration Policy in force at
the time they were agreed; or (ii) at a time
when the relevant individual was not a
Director of the Company and, in the opinion
of the Remuneration Committee, the
payment was not in consideration for the
individual becoming a Director of the
Company. For these purposes, ‘payments’
includes the Remuneration Committee
satisfying awards of variable remuneration
and, in relation to an award over shares, the
terms of the payment are ‘agreed’ at the
time the award is granted.
Where discretion is applied, this would be
clearly stated, along with clear rationale,
inthe following Remuneration report.
Operation of the Policy
The Committee’s policy is to target a
remuneration package that is at around
median, for median performance, and in the
upper quartile for exceptional performance,
and which is closely linked with the Group’s
strategic objectives. In setting all elements
of remuneration the Committee is advised
by independent consultants and periodically
uses data from external research into the
salaries and benefits paidby companies
ofacomparable size andcomplexity to
theCompany.
The aim of the Policy is to attract, retain
andcontinue to motivate talented Executive
Directors while aligning remuneration
withShareholder interests and with the
achievement of strategic performance
objectives. This is achieved by balancing
abasic fixed package, which is periodically
benchmarked against a comparator group,
with the opportunity to achieve upper
quartile remuneration from a combination
of stretching but achievable incentives.
The terms of reference for the Committee
also include the responsibility for setting
thepolicy on incentive reward for senior
employees, in particular those who could
have a material impact on the risk profile of
the Group. The Committee has, in the design
and application of the Company’s variable
performance-related incentive plans,
incorporated risk adjustment mechanisms
to encourage consistent and sustainable
levels of Company performance and to
ensure, when selecting performance
conditions and the level of challenge within
those conditions, that they support the
long-term future of the Company. In
reviewing its policy and determining
remuneration the Committee also considers
the wider economic conditions and pay and
reward packages elsewhere in its sector and
within the business.
90 DWF Group plc | Annual Report and Accounts 2022
Governance
Policy – Executive Directors
The table below sets out the key elements of the Remuneration Policy for Executive Directors:
Objective and link
tostrategy Operation Maximum opportunity
Performance conditions
andassessment
Base salary
To recruit and retain
Executive Directors
of the appropriate
calibre and
expertise in their
field to achieve
theCompany’s
business strategy.
Executive Directors’ base salaries are
reviewed annually, usually effective
from 1 January each year, or when
there is a change in position or
responsibility.
Base salaries will be set at competitive
levels. When determining an
appropriate level of salary, the
Remuneration Committee considers:
• the Executive Director’s experience
and responsibilities;
• the performance of the individual
Executive Director and the Group;
• pay and conditions throughout
theGroup;
• salary increases provided to the
workforce as a whole;
• the economic environment; and
• salaries of peers, taking into
account the size and complexity of
the Group and its growth strategy.
Individuals who are recruited or
promoted to the Board may, on
occasion, have their salaries set below
the targeted policy level until they
become established in their role. In
such cases subsequent increases in
salary may be higher than the general
rises for employees until the target
positioning is achieved.
Typically, the base salaries of
Executive Directors in post at the start
of the Policy Period and who remain in
the same role throughout the Policy
Period will be increased by a similar
percentage to the average annual
percentage increase in salaries of all
other employees in the Group.
Exceptions to this rule are at the
Committee’s discretion and may
include where:
• an individual’s package is below
market level and a decision is taken
to increase base pay to reflect
proven competence in the role; or
• there is a material increase in scope
or responsibility in the individual’s
role.
The Committee ensures that
maximum salary levels are positioned
in line with companies of a similar size
and validated against industry/sector
peers, so that they are competitive.
The Committee intends to review the
comparators periodically and may add
or remove companies from the Group
as it considers appropriate. Any
changes to the comparator groups
willbe explained in the report on the
implementation of Remuneration
Policy in the following financial year.
No performance conditions,
although the salary reflects
the performance and calibre
of the Executive.
No recovery provisions apply.
Benefits
To provide
competitive levels
ofemployment
benefits, supporting
the wellbeing of
Executive Directors.
Benefits include:
• private medical insurance for the
Executive and their spouse or
civilpartner as well as any
dependent children;
• private health insurance;
• life insurance up to four times
salary (up to £1 million);
• annual car parking ticket;
• reasonable business expenses;
• participation in the Group’s
employee-wide flexible
benefitsscheme.
The Committee recognises the need
to maintain suitable flexibility in the
benefits provided to ensure it is able
to support the objective of attracting
and retaining personnel in order to
deliver the Group strategy. Where
appropriate, additional benefits
maytherefore be offered, such as
relocation allowances on recruitment
with associated benefits not
extending beyond two years.
The maximum level of benefit is the
cost of providing the relevant benefits,
as determined by market rates.
No performance orrecovery
provisions apply.
DWF Group plc | Annual Report and Accounts 2022 91
Strategic report Governance Financial statements Other information
Remuneration continued
Objective and link
tostrategy Operation Maximum opportunity Performance conditions and assessment
Pension
To enable Executive
Directors to make
appropriate
provision for
retirement.
Executive Directors are
entitled to join the defined
contribution scheme
operated by the Group.
TheCompany contributes
at anagreed percentage of
basic salary.
Executive Directors may
take a pensions allowance
in place of the Company’s
contribution to the scheme.
Pension allowances are
excluded for the purposes
of calculating any other
element of remuneration
based on a percentage
ofsalary.
The maximum Company
contribution or pension
allowance is capped for
Executive Directors in line
with the pension
contribution applicable to
the wider UK workforce. In
2022/23, this will be 7% of
salary.
No performance orrecovery provisionsapply.
Annual Bonus Plan
The Annual Bonus
Plan provides a
significant incentive
to the Executive
Directors linked to
achievement in
delivering goals that
are closely aligned
with the Group’s
strategy and the
creation of value
forShareholders.
In particular, the
Annual Bonus Plan
supports the
Group’s objectives
allowing the setting
of annual targets
other than on an
annual basis based
on the business’s
strategic objectives
at that time,
meaning that
awider range
ofperformance
metrics can be used
that are relevant
and achievable.
The Remuneration
Committee will determine
the maximum annual
participation in the Annual
Bonus Planforeach year,
which will not exceed150%
of salary.
The performance period is
usually one financial year
with pay-out determined
bythe Committee following
the year end, based on
achievement against a
range of financial and
non-financial targets.
Half of any bonus earned
will normally be deferred
into shares for three years.
There are no further
performance targets on
the deferred amount.
Maximum opportunity
150% of salary.
Threshold performance
forfinancial measures:
20%of maximum.
On-target performance
forfinancial measures:
50%of maximum.
Straight-line vesting
between these points.
The specific performance measures, targets and
weightings will be reviewed annually and so may vary
from year to year in order to align with the Group’s
strategy over each year. The measures may include
financial and non-financial measures. However, other
than in exceptional circumstances, circa 70% of the
awards will be linked to financial measures.
The measures will be dependent on the Group’s
goals over the year under review and directly link
to the key measurable strategic milestones to
incentivise Executive Directors to focus on the
execution of the strategy. The performance
targets are calibrated each year to align with the
Group’s strategic plan.
The Remuneration Committee retains discretion in
exceptional circumstances to change performance
measures and targets and the weightings attached
to performance measures part-way through a
performance period if there is a significant and
material event which causes the Remuneration
Committee to believe the original measures,
weightings and targets are no longer appropriate.
Discretion may also be exercised in cases where
the Remuneration Committee believes that the
bonus outcome is not a fair and accurate
reflection of business performance, individual
performance, or the broader environment.
Any adjustments or discretion applied by the
Remuneration Committee will be fully disclosed
inthe following year’s Remuneration report.
The actual performance targets set will not
bedisclosed at the start of the financial year,
astheyare considered to be commercially
sensitive.These will be reported and disclosed
retrospectively at the end of the year in order
forShareholders to assess the basis for any
bonus outcomes.
The Annual Bonus Plan contains malus and
clawback provisions.
92 DWF Group plc | Annual Report and Accounts 2022
Governance
Objective and link
tostrategy Operation Maximum opportunity Performance conditions and assessment
EIP
Awards are designed
to incentivise the
Executive Directors
over the longer-term
to successfully
implement the
Group’s strategy.
Under the EIP, Executive
Directors will be granted
awards in the form of
nil-cost options or
performance shares.
Vesting of EIP awards is
usually based on
performance achieved in
athree-year performance
period. Vested awards are
usually subject to a further
two-year holding period.
Participants may be
entitled to dividends or
dividend equivalents onthe
EIP shares representing the
dividends paid during the
vesting and holding period.
Maximum value of 200% of
salary per annum based on the
market value at the date of
grant set in accordance with
the rules of the EIP.
Up to 20% of the award will vest
for Threshold performance.
100% of the award will vest for
Maximum performance.
Straight-line vesting between
these points.
The Remuneration Committee
has the ability to award grants
up to 400% of salary in
exceptional circumstances.
Itisthe Committee’s intention
to usually only use this
discretion on recruitment of
anExecutive Director hire
where there is arequirement
to replace their previous
compensation (for example,
their equity share from their
previous law firm) with an
equity stake in the Group.
Remuneration in the traditional
law firm model is based around
an equity entitlement giving
rise to a profit share. In these
cases, it is highly unlikely that
there will be historic incentive
awards to buy out. Therefore,
to provide an equivalent equity
interest in the Group a higher
than normal award under the
EIP would likely be required.
In such cases, the
Remuneration Committee will
carefully evaluate the value
ofthe interest being given
upat the previous business
toensure as far as possible
anequivalent fair value is
provided under the EIP award.
It would be the Committee’s
intention to revert back
totheusual level of EIP
awardfollowing the year
ofrecruitment.
Awards vest based on performance against
stretching targets, usually measured over
athree-year performance period. The
Remuneration Committee will review and
setweightings and targets before each grant
to ensure they remain appropriate.
The Remuneration Committee may change
the balance of the measures, or use different
measures or targets for subsequent awards,
as appropriate. No material change will be
made to the type of performance conditions
without prior Shareholder consultation.
The Remuneration Committee retains
discretion in exceptional circumstances to
change performance measures and targets
and the weightings attached to performance
measures part-way through a performance
period if there is a significant and material
event which causes the Remuneration
Committee to believe the original
measures,weightings and targets are
nolonger appropriate.
Discretion may also be exercised in cases
where the Remuneration Committee believes
that the outcome is not a fair and accurate
reflection ofbusiness performance
orindividual performance, or the
broaderenvironment.
Any adjustments or discretion applied by
theRemuneration Committee will be
fullydisclosed in the following year’s
Remunerationreport.
Details of the performance conditions for
grants made in the year will be set out in
theAnnual Report on Remuneration and
forfuture grants in the section headed
Implementation of Remuneration Policy,
inthefuture financial year.
The EIP contains clawback and
malusprovisions.
DWF Group plc | Annual Report and Accounts 2022 93
Strategic report Governance Financial statements Other information
Remuneration continued
Objective and link
tostrategy Operation Maximum opportunity Performance conditions and assessment
Minimum
shareholding
requirement and
post-cessation
shareholding
requirement
To encourage
Executive Director
equity ownership
and to ensure a
long-term focus and
alignment of interest
with Shareholders.
Whilst in employment,
Executive Directors are
expected within five years
from the date of their
appointment to build their
shareholding requirement.
If a person to whom the
requirement applies does
not meet the requirement,
they will be expected to
retain shares vesting under
the Company’s incentive
plans until the requirement
is met, although they may
dispose of shares to satisfy
any tax or social security
liability to which they are
liable on the exercise or
vesting of the award.
The Remuneration
Committee will review
progress towards the
guideline on an annual
basis and has the
discretion to adjust the
guideline in what it feels
are appropriate
circumstances.
Shares qualifying for
theshareholding
requirement include:
• shares held
onAdmission;
• shares acquired following
Admission;
• deferred bonus shares
(on an assumed net of
tax basis);
• shares subject to an EIP
award during the holding
period (on an assumed
net of tax basis); and
• vested and unexercised
awards under the
Company’s share plans
(onan assumed net of
taxbasis) not extending
beyond two years.
• CEO: 250% salary
• Other Executive Directors:
200% salary
The Remuneration Committee
retains the discretion to increase
shareholding requirements.
For two years following
cessation of employment,
Executive Directors are
expected to hold shares to
100% of the value of the
shareholding guideline that
applied at the cessation of
theiremployment; or, in cases
where the individual has not
yet met this level, the level of
shareholding at cessation.
The Committee retains
discretion to waive or amend
this guideline if it is not
considered appropriate in the
specific circumstances. It also
retains discretion to exempt
shares acquired by an Executive
Director in their personal
capacity from this guideline.
No performance or recovery provisions apply.
94 DWF Group plc | Annual Report and Accounts 2022
Governance
Malus and clawback
Element Application of malus/clawback
Annual bonus – cash awards Malus will apply up to the date of bonus determination and clawback will apply for aperiod
of two years post-bonus payment.
Annual bonus – deferred share awards Malus will apply during the share deferral period.
EIP awards Malus will apply during the vesting period and clawback will apply for a period of two years
post-vesting.
The circumstances in which malus and
clawback could apply are as follows:
• discovery of a material misstatement
resulting in an adjustment in the audited
accounts of the Group or Company;
• the assessment that any performance
condition or condition in respect of
theannual bonus or EIP award was
basedonerror, or inaccurate or
misleading information;
• the discovery that any information used to
determine the Group annual bonus orEIP
award was based on error, or inaccurate
or misleading information;
• action or conduct of a participant which
amounts to fraud or gross misconduct;
• events or the behaviour of a participant
have led to the censure of the Company
orGroup by a regulatory authority or have
had a significant detrimental impact on
thereputation of the Group or Company
provided that the Board is satisfied that
the relevant participant was responsible
for the censure or reputational damage
and that the censure or reputational
damage is attributable to the participant;
• failure of risk management; or
• corporate failure.
Differences in Remuneration Policy
forallemployees
Fixed pay
The Group seeks to establish remuneration
packages that will attract, retain and
motivate high-quality employees. Salary
andbenefit packages for all employees
arelinked to both individual and business
performance. Executive pension levels
arealigned with the majority pension
contribution level applicable to the wider
UKworkforce.
Bonus
The Group operates an Annual Bonus Plan
for employees that is aligned to the
Executive Directors’ Annual Bonus Plan and
based upon the Group achieving key targets
in that financial year.
Equity Incentive Plan
The Group operates an Equity Incentive Plan
which is utilised, where appropriate, to grant
awards to employees under a variety of
circumstances including promotions,
emerging talent awards, exceptional
contributor awards, and for lateral and
senior hires. LTIPs are also granted under
this plan to the Executive Directors, the
Executive Board and selected senior
managers. Further detail can be found on
page 103.
Share awards
The listing has given the Group the
opportunity tooffer shares to the wider
employee group,thus further aligning an
element of remuneration with Company
performance, executive remuneration,
andthe Shareholder experience.
The Group operates a BAYE plan on an
annual basis. All qualifying staff are invited
to participate in the BAYE by acquiring
ordinary shares out of deductions from
salary; and awarded matching shares in
respect of ordinary shares acquired. It is
intended that each year all qualifying staff
will be invited to sign up to buy shares over
a12-month investment period. Matching
shares will be received on a one for two
basis, so for every two shares purchased
over the 12-month investment period,
participants will receive one matching share
three years from the start of the relevant
12-month investment period subject to
certain conditions.
Illustrations of application of
Remuneration Policy
The graphs on this page seek to
demonstrate how pay outcomes may look
for the Executive Directors under various
performance scenarios, based on the
proposed Remuneration Policy for the
2022/23 financial year.
Minimum Target Maximum Maximum
+50% share
price growth
Actual
FY22
£’000s
3,500
3,000
2,500
2,000
1,500
1,000
500
0
CEO
Minimum Target Maximum Maximum
+50% share
price growth
Actual
FY22
£’000s
1,600
1,400
1,200
1,000
800
600
400
200
0
CFO
Minimum Target Maximum Maximum
+50% share
price growth
Actual
FY22
£’000s
1,400
1,200
1,000
800
600
400
200
0
COO
 Base salary
 Pension
 Benefits
 Bonus
 LTIP
DWF Group plc | Annual Report and Accounts 2022 95
Strategic report Governance Financial statements Other information
Remuneration continued
Assumptions for the scenario charts
Element Minimum On-target Maximum
Maximum (plus 50% share
price growth)
Fixed pay • Base salary of £551,200 for CEO, £312,000 for COO and £332,800 for CFO.
• Pension of 7% of salary.
Annual bonus
1
None 50% of maximum award 100% of maximum award 100% of maximum award
EIP
2
None 50% of maximum award 100% of maximum award 100% of maximum award
1 Maximum annual bonus for the CEO is 150% of salary, CFO and COO 100% of salary.
2 Maximum EIP award for the CEO is 175% of salary, CFO and COO 125% of salary.
Policy – Chair and Non-Executive Directors
The table below sets out the key elements of the Remuneration Policy for the Chair and Non-Executive Directors:
Objective and link
tostrategy Operation Maximum limits
Performance conditions
andassessment
Chair
To attract a Chair of
the Board with the
requisite skills and
experience to
contribute to the
strategy of the
Group and toreview
its implementation.
The Chair has specific terms of
engagement and his or her
remuneration is determined by the
Committee within the limits set by the
Articles of Association.
The Chair receives no additional fees
for the membership of Board
committees or for chairing them.
The Committee reviews the fees of the
Chair annually taking into account the
following factors:
• the workload and level of
responsibility of the Chair under the
changing corporate governance
expectations of Shareholders and
their representative bodies; and
• the current market rate for fees for
Chairs based on the comparators
used for the Executive Directors.
The Chair does not participate in any
variable remuneration or benefits/
pension arrangements.
In general, fee rises will be limited to
the level provided to employees of the
Group as a whole.
In setting fees, the Committee looks at
the fee levels of companies of broadly
similar size and complexity.
On an annual basis, the Committee
will review the comparator groups to
ensure they appropriately reflect the
Group’s size, operations and business
complexities.
The Company will pay reasonable
expenses incurred by the Chair and
may settle any tax incurred in relation
to these.
The Articles of Association impose a
limit on the aggregate annual sum
that can be paid to the Chair and
Non-executive Directors by way of
fees (excluding amounts payable
under any other Articles) of
£2,000,000 or such larger amount
asthe Company may by ordinary
resolution determine.
No performance or recovery
provisions apply.
96 DWF Group plc | Annual Report and Accounts 2022
Governance
Objective and link
tostrategy Operation Maximum limits
Performance conditions
andassessment
NED fees
To attract Non-
Executive Directors
with the requisite
skills and experience
to contribute to the
strategy of the
Group and toreview
its implementation.
All Non-Executive Directors have
specific terms of engagement and
their remuneration is determined by
the Board within the limits set by the
Articles of Association.
Each Non-Executive Director receives
a fee which relates to membership of
the Board and additional fees are paid
for chairing committees. The Company
reserves the flexibility to provide
additional fees for committee
membership and other responsibilities.
In exceptional circumstances, fees
may also be paid for additional time
spent on the Company’s business
outside of the normal duties. Additional
payments may also be made to
Non-Executive Directors for time
spent travelling on Company business.
The Board reviews the fees of the
Non-Executive Directors annually taking
into account the following factors:
• the workload and level of
responsibility of the Non-Executive
Directors under the changing
corporate governance expectations
of Shareholders and their
representative bodies; and
• the current market rate for fees
forNon-Executive Directors based
on the comparators used for the
Executive Directors.
Non-Executive Directors do not
participate in any variable remuneration
or benefits/pension arrangements.
In general, fee rises will be limited to
the level provided to employees of the
Group as a whole.
In setting fees, the Board looks at the
fee levels of companies of broadly
similar size and complexity.
On an annual basis, the Board will
review the comparator groups to
ensure they appropriately reflect the
Group’s size, operations and business
complexities.
The Company will pay reasonable
expenses incurred by the Non-
Executive Directors and may settle
any tax incurred in relation to these.
As stated above, the total fee limit to
be paid to the Chair and Non-Executive
Directors by way of fees is £2,000,000.
No performance or recovery
provisions apply.
Partner Director It should be noted that the role of Partner Director is viewed by the Board for the purposes of remuneration
asa Non-Independent Non-Executive Director. This approach was discussed and agreed by the majority
ofindependent Shareholders consulted at listing. A Partner Director represents the Partners of DWF, many of
whom are Shareholders, and is therefore a Shareholder representative on the Board. Partner Directors do not
currently receive any fees for their role on the Board as they are partners of DWF. The Committee retains the
discretion to pay fees to Partner Directors in line with the Policy for the other Non-Executive Directors set
outabove.
DWF Group plc | Annual Report and Accounts 2022 97
Strategic report Governance Financial statements Other information
Remuneration continued
Approach to recruitment remuneration
In making decisions about the remuneration arrangements for newly appointed Executives, the Committee is mindful of keeping grants
within moderate limits. Appointing high-calibre executives to the Board and to different roles on the Board is necessary to ensure the Group
is well positioned to develop and implement its strategy and deliver long-term value. The remuneration package for any new Executive
Director would be assessed following the same principles as for the current Executive Directors.
Where an existing employee is promoted to the Board, the Remuneration Policy would apply from the date of promotion but there would
beno retrospective application of the Remuneration Policy in relation to subsisting incentive awards or remuneration arrangements.
Thisseparation is deemed appropriate given the partnership-style remuneration structure below Board. Accordingly, prevailing elements
ofthe remuneration package for an existing employee would be honoured and form part of the ongoing remuneration of the employee.
These would be disclosed to Shareholders in the following year’s Annual Report on Remuneration.
The Company’s detailed Remuneration Policy when setting remuneration for the appointment of new Executive Directors is summarised
inthe table below:
Remuneration element Recruitment policy
Base salary
andbenefits
The salary level will be set taking into account the responsibilities of the individual, experience and the salaries
paid to similar roles in comparable companies. The Committee will apply the Remuneration Policy set out on
salaries for the current Executive Directors in the Remuneration Policy table.
The Executive Director shall be eligible to receive benefits in line with DWF’s benefits policy as set out in the
Remuneration Policy table. Where necessary, the Remuneration Committee may approve the payment of legal
fees and other costs incurred by the individual in relation to their appointment.
Pension For any new Executive Director appointments, the pension contribution or allowance will be in line with the
majority pension contribution applicable to the wider UK workforce.
Bonus The new Executive Director will be eligible to participate in the Annual Bonus Plan, with performance targets and
weightings aligned to the Policy, and set at the discretion of the Remuneration Committee. Award levels may be
pro-rated according to the portion of the performance period which the Executive Director is in post for.
The maximum bonus opportunity is 150% of salary.
Long-term
incentives
The new Executive Director will be eligible to participate in the EIP and granted an award at the next available
grant date. The maximum normal EIP award is 200% of salary. In exceptional circumstances this may increase to
400% of salary for the first year of appointment. See page 95 for full details of when the Committee may exercise
its discretion to make an exceptional award. In the first year, the Remuneration Committee may set different
performance measures and targets for the EIP to those of the other Executive Directors, depending on the timing
and scope of any appointment.
Maximum variable
remuneration
In the normal operation of the Policy this will be 350% of salary. In exceptional circumstances in respect of the
year of appointment this may increase to 550% of salary (if an exceptional EIP award is granted).
‘Buy Out’ of
incentives
forfeited on
cessation of
employment
The Remuneration Committee’s policy is not to provide replacement awards as a matter of course. However,
should the Remuneration Committee determine that the individual circumstances of recruitment justified the
provision of a replacement award, the value of any incentives or compensation arrangements that will be forfeited
on cessation of an Executive Director’s previous employment will be calculated taking into account the following:
• the proportion of the performance period completed on the date of the Director’s cessation of employment;
• the performance conditions attached to the vesting of these incentives and the likelihood of them being
satisfied; and
• any other terms and conditions having a material effect on their value (‘lapsed value’).
The Remuneration Committee may then grant up to the same value as the lapsed value, where possible, under
the Company’s incentive plans. To the extent that it was not possible or practical to provide the buyout within
theterms of the Group’s existing incentive plans, a bespoke arrangement would be used.
Relocation policies If a new Executive Director is required to relocate in order to carry out their role, the Company may provide
one-off/ongoing benefits, for up to two years, to reflect the cost of relocation for the new Executive Director
incases where they are expected to spend significant time away from their country of domicile.
The level of the relocation package will be assessed on a case by case basis but will take into consideration
anycost of living differences/housing allowance and schooling for dependent children.
The Company’s policy when setting fees for the appointment of a new Chair or Non-Executive Directors is to apply the policy which applies
to the current Chair or Non-Executive Directors.
98 DWF Group plc | Annual Report and Accounts 2022
Governance
Payments for loss of office
When determining any loss of office payment for a departing Director, the Committee will always seek to minimise the cost to the Company
whilst complying with the contractual terms and seeking to reflect the circumstances in place at the time. The Committee reserves the right
to make additional payments where such payments are made in good faith in discharge of an existing legal obligation (or by way of damages
for breach of such an obligation); or by way of settlement or compromise of any claim arising in connection with the termination of an
Executive Director’s office or employment.
The table below sets out the Company’s termination policy for each element of total remuneration. For each element the table also sets out
the boundaries of Committee discretion.
Remuneration element Approach
General The Remuneration Committee will honour Executive Directors’ contractual entitlements. Service contracts do not
contain liquidated damages clauses. If a contract is to be terminated, the Remuneration Committee will determine
such mitigation as it considers fair and reasonable in each case. There are no contractual arrangements that
would guarantee a pension with limited or no abatement on severance or early retirement. There is no agreement
between the Company and its Directors or employees, providing for compensation for loss of office or employment
that occurs because of a takeover bid. The Remuneration Committee reserves the right to make additional
payments where such payments are made in good faith in discharge of an existing legal obligation (orby way of
damages for breach of such an obligation); or by way of settlement or compromise of any claim arising regarding
the termination of an Executive Director’s office or employment.
Base salary
andbenefits
In the event of termination by the Company, there will be no compensation for loss of office due to misconduct
ornormal resignation.
Base salary and benefits will be paid over the notice period and may be provided as a lump sum payment in lieu
ofnotice.
Pension Pension contributions or payments in lieu of pension contribution will be made during the notice period and may
be provided as a lump sum payment in lieu of notice.
Annual bonus Good leaver reason
Performance conditions will usually be measured at the bonus measurement date. Bonus will normally be
pro-rated for the period worked during the financial year.
Other reason
No bonus will be payable for year of cessation.
Discretion
The Remuneration Committee has the following elements of discretion:
• To determine that an Executive Director is a good leaver. It is the Remuneration Committee’s intention to only
use this discretion in circumstances where there is an appropriate business case which will be explained in full
to Shareholders.
• To determine whether to pro-rate the bonus for time. The Remuneration Committee’s normal policy is that
itwill pro-rate for time. It is the Remuneration Committee’s intention to use discretion to not pro-rate in
circumstances where there is an appropriate business case which will be explained in full to Shareholders.
• To pay the bonus to a good leaver wholly in cash.
• In determining the level of bonus to be paid, the Remuneration Committee may, at its discretion, take into
account performance up to the date of cessation or over the financial year as a whole based on appropriate
performance measures as determined by the Remuneration Committee.
Deferred
shareawards
Good leaver reason
All subsisting deferred share awards will vest.
Other reason
Lapse of any unvested deferred share awards.
Discretion
The Remuneration Committee has the following elements of discretion:
• To determine that an Executive Director is a good leaver. It is the Remuneration Committee’s intention to only
use this discretion in circumstances where there is an appropriate business case which will be explained in full
to Shareholders.
• To vest deferred shares at the end of the original deferral period or at the date of cessation. The Remuneration
Committee will make this determination depending on the type of good leaver reason resulting in the cessation.
• To determine whether to pro-rate the maximum number of shares to the time from the date of grant to the date
of cessation. The Remuneration Committee’s normal policy is that it will not pro-rate awards for time. The
Remuneration Committee will determine whether or not to pro-rate based on the circumstances of the
Executive Director’s departure.
Remuneration element Approach
EIP – LTIP awards Good leaver reason
Pro-rated for time and performance in respect of each subsisting LTIP award.
Other reason
Lapse of any unvested LTIP awards.
Discretion
The Committee has the following elements of discretion:
• To determine that an executive is a good leaver. It is the Remuneration Committee’s intention to only use
thisdiscretion in circumstances where there is an appropriate business case which will be explained in full
toShareholders.
• To measure performance over the original performance period or at the date of cessation. The Remuneration
Committee will make this determination depending on the type of good leaver reason resulting in the cessation.
• To determine to vest the LTIP award at the end of the original performance period or at the date of cessation.
The Remuneration Committee will make this determination depending on the type of good leaver reason
resulting in the cessation.
• To determine whether the holding period will apply including whether in full or in part.
• To determine whether to pro-rate the maximum number of shares to the time from the date of grant to the
dateof cessation. The Remuneration Committee’s normal policy is that it will pro-rate awards for time. It is the
Remuneration Committee’s intention to use discretion to not pro-rate in circumstances where there is an
appropriate business case which will be explained in full to Shareholders.
DWF Group plc | Annual Report and Accounts 2022 99
Strategic report Governance Financial statements Other information
Remuneration continued
Definition of ‘good leaver’ under the Group’s incentive plans
A good leaver reason is defined as cessation in the following circumstances:
• death;
• ill health;
• termination of a participant’s membership in DWF Law LLP or DWF LLP in breach of the relevant constitutional deed;
• any reason, permitted by the Committee in its absolute discretion in any particular case (except where termination is for dishonesty,
fraud, misconduct or other circumstances justifying summary dismissal) which may include:
• injury or disability;
• redundancy;
• retirement (in agreement with the Company);
• employing company ceasing to be a Group company; and
• transfer of employment to a company which is not a Group company.
Cessation of employment in circumstances other than those set out above is cessation for other reasons.
Change of control
Element Treatment on change of control
Annual bonus Pro-rated for time and performance to the date of the change of control.
The Remuneration Committee has discretion regarding whether to pro-rate the bonus for time. The Committee’s
normal policy is that it will pro-rate the bonus for time. It is the Committee’s intention to use its discretion to not
pro-rate in circumstances only where there is an appropriate business case which will be explained in full
toShareholders.
Deferred
shareawards
Subsisting deferred share awards will vest on a change of control.
The Remuneration Committee has discretion regarding whether to pro-rate the awards for time. The Remuneration
Committee’s normal policy is that it will not pro-rate awards for time. The Remuneration Committee will make this
determination depending on the circumstances of the change of control.
EIP –
LTIP awards
The number of shares subject to subsisting LTIP awards will vest on a change of control, pro-rated to time
andperformance.
The Remuneration Committee has discretion regarding whether to pro-rate the LTIP awards for time. The
Committee’s normal policy is that it will pro-rate the LTIP awards for time. It is the Committee’s intention to use
itsdiscretion to not pro-rate in circumstances only where there is an appropriate business case which will be
explained in full to Shareholders.
100 DWF Group plc | Annual Report and Accounts 2022
Governance
Consideration of employment conditions elsewhere in the Group
The Remuneration Committee also gives consideration to pay and employment conditions in the rest of the Group, including any base salary
increases awarded. The Committee is provided with data on the remuneration structure for management level tiers below the Executive
Directors, and uses this information to ensure consistency of approach throughout the Group.
Whilst the Remuneration Committee takes into account the pay and conditions of the wider workforce, the Company did not consult with
employees when developing the Remuneration Policy and undertook no specific engagement with the wider workforce to explain how
executive remuneration aligns with wider Group pay policy. This was not considered necessary due to the minor nature of the changes to
the Remuneration Policy.
Consideration of Shareholders views
The Remuneration Committee carefully considers the views of the Shareholders and carried out extensive consultation with key
Shareholders when it proposed its first Remuneration Policy to Shareholders in 2019. Shareholders views are considered when evaluating
and setting remuneration strategy and the Remuneration Committee commits to consulting with key Shareholders prior to any significant
changes tothe Remuneration Policy.
Given no substantive changes are proposed to the Policy this year, the Committee wrote to key Shareholders prior to the finalisation of the
Policy to notify them of the limited proposed changes and to give them an opportunity to feed back any views. The Committee also regularly
reviews the policy in the content of published Shareholder guidelines.
Service contracts
Details of the service contracts or letters of appointment for the Directors are included in a table on page 109.
When setting notice periods for Executive Directors, the Committee has regard to market practice and corporate governance best practice.
Notice periods will not be greater than 12 months.
The Company’s practice is to appoint the Chair and Non-Executive Directors under letters of appointment. The current appointment is
foraterm of three years. However, the appointment of the Chair can be terminated early by either party on three months’ notice in writing.
The appointment of each of the Non-Executive Directors can be terminated early by either party on one month’s notice in writing.
All service contracts and letters of appointment are available for viewing at the Company’s registered office. In line with best practice,
allDirectors are subject to annual re-election at the Company’s Annual General Meeting.
DWF Group plc | Annual Report and Accounts 2022 101
Strategic report Governance Financial statements Other information
Remuneration continued
Remuneration – At a glance
This section of the Directors’ Remuneration report provides an overview of:
• the business context and how our incentive performance measures align to our strategy;
• remuneration outcomes for FY2021/22; and
• Remuneration Policy operation in FY2021/22 and intended implementation in FY2022/23.
Business context and how our incentive performance measures align to our strategy
Business context
We delivered a year of record results in FY2021/22 with net revenue growth of 4% and L4L net revenue growth of 7% and a return to a statutory
profit before tax of £22m. Adjusted profit before tax of £41m was in line with market expectations and has grown 21% compared to the prior year.
It was particularly pleasing to see each division delivering both net revenue and gross profit margin growth in FY2021/22 compared with the prior
year. The Group continued to reduce its cost to income ratio to 38% compared with 39% in the prior year as we continue to execute the strategy of
sustainable growth. The Group sees opportunity to execute further actions to control costs, with the premises strategy and various back-office
initiatives offering protection from future inflationary pressures and macro-economic headwinds. Lock-up days have reduced by five days to 179
days, as we continue to implement operational improvements. Net debt has increased to £72m in the year as a result of settling remaining
COVID-19 VAT deferrals and deferred consideration from acquisitions.
How our incentive performance measures align to our strategy
The implementation of our strategy (as outlined on pages 14 and 15) for FY2021/22 was measured against certain KPIs (set out in the table below).
The Committee continually considers the performance measures we use for our incentives, to ensure they support the delivery of ourstrategy.
Our strategic priorities
How we compete
Doing things differently:
We continue to talk to our clients about
ourstrategic differentiator – our delivery
ofintegrated legal and business services
throughany combination of Legal
Advisory, Mindcrest and Connected
Services – whilstalso leveraging our
ability to identifynew innovative products
and services based around current and
emerging client needs. We are beginning
topivot the right work to Mindcrest
toprovide an enhanced clientservice.
Where we compete
Understanding our clients: Through
a‘one team’ approach we aim to grow
thenumber and contribution of our
institutional client relationships,
extending those relationships into new
jurisdictions and practice areas. Wewill
do this through our enhanced customer
valueproposition.
Geography: We will strengthen in priority
locations through M&A, associations and
recruitment. We create channels for
greater collaboration to bring all of the
strengths within our business to help
support our clients.
Services: We continue to invest
inourLegal Advisory capabilities,
but we will also scale our Mindcrest
platformandseek new ways of
introducing our clientstoMindcrest
andConnected Services globally.
Our enablers
Engaging our people: We are embedding a culture of open,
transparent and honest communication to further increase
engagement across the business. By doing the right work, in
theright place through the right people, we will drive greater
profitability and therefore deliver greater reward and incentivisation
for our strong performers. Werecruit, retain and develop people
aligned to our values, improving diversity and agility.
Governance, risk and compliance: The legal market is changing
and we need to adapt and evolve as the world continues to emerge
from COVID-19. We have defined our culture and values, our
partner and employee value proposition, including our commitment
to Diversity & Inclusion, and our global ways of working. We have
also developed our Group Risk Taxonomy and focused on
excellence through our Behaviours Framework, CodeofConduct
and DWF Academy.
Infrastructure: We ensure that we remain operationally efficient
through our business, with the right infrastructure and services that
are robust and scalable for future growth. We actively manage our
cost base and lock-up days and have introduced better controls on
pricing and cost.
Our key performance indicators:
Financial
Net
revenue
growth
Underlying
organic net
revenue
growth
Gross
profit
margin
Cost
to income
ratio
Adjusted
EBITDA
Adjusted
profit
before tax
(Loss)/
profit
before tax
Adjusted
diluted EPS
Net
revenue
per
partner
Lock-up
days
Free
cash
flow
Net debt
Non-financial
Net promoter score Engagement survey score
% Executive Board
roles held by women
% senior leadership
positions held by women
% Black, Asian and Minority
Ethnic (‘BAME’) representation
in senior leadership positions
Annual bonus Long-term incentives
Adjusted PBT: Ensures focus on profitable growth. Is a key measure of
organic growth andislinked to Shareholder value
Lock up: Ensures focus and effective management of working capital and
efficient billing processes
ESG objectives: Ensures focus on the delivery of stakeholder value and
encourages sustainable business practices
Strategic and operational objectives: Ensures focus on key strategic and
operational objectives to deliver Shareholder value. Designed to ensure the
Executive Directors focus on operational efficiencies,manage risk effectively,
remain client-focused, and are requiredto drive employee engagement
EPS: Links reward to ‘in-year’ underlying equity returns to Shareholders
ROCE: Promotes disciplined capital allocation by linking reward to
investmentreturn. Supports the strategy of growth, both organic and
through acquisitions. Ensures focus on the efficiency by which earnings
aregenerated
Cash conversion: Supports focus on cash collection
102 DWF Group plc | Annual Report and Accounts 2022
Governance
Remuneration arrangements for FY2022/23 – At a glance
Element Operation in FY2021/22 Intended operation in FY2022/23
Fixed pay
Base salary CEO £530,000
CFO £320,000
COO £300,000
Average employee (includes partners) rise 5.65%
1
CEO £551,200
CFO £332,800
COO £312,000
The Executive Directors received a 4% pay rise
with effect from 1 May 2022.
Benefits In line with policy No change
Pension In line with policy:
CEO 7% of salary
CFO 7% of salary
COO 7% of salary
No change
Variable pay
Annual bonus In line with policy
Maximum opportunity:
CEO: 150% of salary
CFO: 100% of salary
COO: 100% of salary
Performance conditions and weightings:
70% adjusted PBT
30% strategic and operational objectives
Weightings and targets of performance conditions are reviewed annually, as well
as any bonus outcomes and strategic and operational objectives.
See page 105 for details of the performance targets, their level of achievement
and the corresponding bonus earned by the Executive Directors.
The Annual Bonus Plan contains malus and clawback provisions. Full details are
set out on page 95.
Following discussions by the Remuneration
Committee on the most appropriate weighting
for targets this year, performance conditions
will be weighted as follows:
70% financial metrics including adjusted PBT
and lock-up days, with adjusted PBT
accounting for 50% and lock-up days 20%
20% strategic and operational objectives
10% ESG objectives
The actual performance targets set are not
disclosed at the start of the financial year, as
they are considered commercially sensitive.
These will be reported and disclosed
retrospectively at the end of the year in order
for Shareholders to assess the basis for any
bonus paid.
LTIPs (made
through the EIP)
Maximum opportunity:
CEO: 175% of salary
CFO: 125% of salary
COO: 125% of salary
Measures and weightings:
Cumulative three-year EPS (40% weighting): EPS was considered to be an
appropriate performance condition to use for the LTIP given the investment case
made at IPO on earnings growth, and is simple and well understood by investors.
Average annual ROCE (40% weighting): ROCE was considered to be an
appropriate performance condition to use to support the strategy of growth,
both organic and through acquisitions, and to focus on the efficiency by which
earnings are generated.
Average cash conversion (20% weighting): Cash conversion was considered to be
an appropriate performance condition as improving cash conversion was a key
focus of the strategy set out in the prospectus.
See table on page 107 for details of the performance conditions and targets.
The EIP contains clawback and malus provisions. Full details are set out
onpage95.
Following discussions by the Remuneration
Committee on the most appropriate weighting
for targets this year, performance conditions
will be weighted as follows:
Cumulative three-year EPS (33% weighting)
Average annual ROCE (33% weighting)
Average cash conversion (33% weighting)
The Committee is presently reviewing the
targets to ensure they are sufficiently
stretching and will finalise these prior to the
grant being made. The targets will be disclosed
by way of RNS when the awards have
beengranted.
No change has been made to the maximum
opportunity for the Executive Directors.
Shareholding
requirements
Executive Directors are required to hold 100% of their pre-cessation
shareholding requirement (or actual shareholding, if lower) for two years
following their cessation of employment.
No change
Chair and
Non-Executive
Director fees
2
• Chair of the Board: £170,000 per annum
• Non-Executive Director: £65,000 per annum
• Deputy Chair of the Board (additional): £20,000 per annum
• Senior Independent Non-Executive Director (additional): £10,000 per annum
• Committee Chair (additional): £7,500 per annum
• Partner Director
3
: £0 per annum
No change
Notes
1 The average employee rise of 5.65% is the Group average figure for eligible employees excluding Mindcrest employees in the US and India, and RCD employees in Spain.
2 In accordance with the Articles of Association of the Company, fees paid to Directors shall not exceed in aggregate £2,000,000 per annum.
3 The position of Partner Director is designated by the Board as a Non-Independent, Non-Executive Director position. A Partner Director represents the partners of DWF
Law LLP and DWF LLP and is therefore a partner Shareholder representative on the Board. Partner Directors do not receive any fees for the position on the Board
because their remuneration is as a member of DWF Law LLP or DWF LLP (determined by his or her ‘home office’), and in some circumstances also by way of a limited
salary as an employee of DWF Connected Services Holdings Limited.
DWF Group plc | Annual Report and Accounts 2022 103
Strategic report Governance Financial statements Other information
Remuneration continued
Remuneration outcomes for FY2021/22 – At a glance
Directors’ Remuneration for the year ended 30 April 2022
Certain details set out on pages 106 to 111 of this Directors’ Remuneration report have been audited by the Auditor. Thesedetails
have been identified as ‘audited’ where appropriate.
Single total figure of remuneration (audited)
The table below sets out the single total figure of remuneration paid to each Director of the Company. Figures provided have been
calculated in accordance with the UK disclosure requirements: the Large and Medium-Sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 (Schedule 8 to the Regulations).
It is the Committee’s view that it is important, when considering the remuneration paid in the year under the single figure, to take a holistic
view of the Executive Directors’ total remuneration linked to the performance of the Company. In the Committee’s opinion, the impact on
the total remuneration of the Executive Director is more important than the single figure in any one year. This approach encourages
Executive Directors to take a long-term view of the sustainable performance of the Company. The ability for the Executive Directors to gain
and lose, in alignment with Shareholders, dependent on the share price performance of the Company at a level which is material to their
total remuneration, is a key facet of the Remuneration Policy.
FY
Salary/
fees
£
Taxable
benefits
1
£
Bonus
2
£
LTIP
3
£
Pensions
6
£
Other
£
Total
£
Total
fixed
£
Total
variable
£
21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21 21/22 20/21
Executive Directors
Sir Nigel
Knowles
4
530,000 487,896 3,754 4,214 221,680 295,000 N/A N/A 37,100 34,151 N/A N/A 792,534 821,261
570,854 526,261 221,680
2
295,000
Chris
Stefani 320,000 320,000 4,693 4,584 221,680 295,000 124,034
5
N/A 21,801
6
21,851 N/A N/A 692,208641,435 346,494 346,435 345,714
2
295,000
Matthew
Doughty
7
300,000 157,955 5,208 2,380 221,680 158,000 N/A N/A 21,000
6
11,520 N/A N/A 547,888 329,855 326,208 171,855 221,680
2
158,000
Andrew
Leitherland
8
N/A 44,167 N/A 264 N/A N/A N/A N/A N/A 3,092 N/A N/A N/A 47,523 N/A 47,523 N/A N/A
Non-Executive Directors
Sir Nigel
Knowles
4
N/A 15,873 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 15,873 N/A 15,873 N/A N/A
Jonathan
Bloomer
9
170,000 127,500 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 170,000 127,500 170,000 127,500 N/A N/A
Chris
Sullivan
10
95,000 90,000 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 95,000 90,000 95,000 90,000 N/A N/A
Luke
Savage
11
72,500 72,500 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 72,500 72,500 72,500 72,500 N/A N/A
Tea
Colaianni
11
72,500 72,500 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 72,500 72,500 72,500 72,500 N/A N/A
Sam
Tymms
11
72,500 72,500 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 72,500 72,500 72,500 72,500 N/A N/A
Vin Murria
12
N/A 42,493 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 42,493 N/A 42,493 N/A N/A
Notes
1. Taxable benefits for the CEO, CFO and COO comprise private medical insurance for the Executive Director and their spouse or civil partner as well as any dependent
children, permanent health insurance, and life assurance up to four times salary (up to £1m).
2. Bonus is paid 50% in cash and 50% in shares. The aggregate total bonus outcome of £665k was distributed equally between the three Executive Directors as described
on page 105.
3. LTIPs are made through the Equity Incentive Plan (‘EIP’). Further details can be found on page 93.
4. Sir Nigel Knowles stepped down as Chair of the Board on 29 May 2020 on his appointment as CEO and the respective remuneration for each role is separated out in
the table accordingly.
5. Chris Stefani’s LTIP consisting of 336,134 shares is due to vest on 27 August 2022, with 41% performance conditions achieved. A £0.90 share price at vest has
beenassumed.
6. The pension paid to the CFO was partly paid directly into the Company provided pension scheme with an additional amount paid as a cash allowance. Together these
payments were equivalent to 7%of the CFO’s salary. There was a slight underpayment made to the CFO in FY2020/21 of £549 due to a change in the HMRC rules
around tapered allowance and this was rectified inFY2021/22. The pension paid to the CEO and COO is paid as a cash allowance due to life time allowance limits and
annual allowance limits.
7. Matthew Doughty was appointed as COO on 22 October 2020 and the table shows his remuneration from that date.
8. Andrew Leitherland stepped down as CEO on 29 May 2020 and the table shows his remuneration up to that date.
9. Jonathan Bloomer was appointed Chair of the Board on 1 August 2020 and the table shows his fees from that date.
10. Fees paid to Chris Sullivan include Non-Executive Director fees and Senior Independent Non-Executive Director fees from the beginning of the period. On 1 August
2020, Chris was appointed Deputy Chair of the Board and the table includes his additional remuneration for that role from that date. Further details can be found on
page 97.
11. Fees include Non-Executive Director fees and fees for the chairing of committees. Further details can be found on page 97.
12. Vin Murria stepped down as a Non-Executive Director on 30 December 2020 and the tables show her fees up to that date. She therefore did not receive any fees during
the FY2021/22.
13. The position of Partner Director is designated by the Board as a Non-Independent, Non-Executive Director position. A Partner Director represents the partners of DWF
Law LLP and DWF LLP and is therefore a partner Shareholder representative on the Board. Partner Directors do not receive any fees for the position on the Board
because their remuneration is as a member of DWF Law LLP or DWF LLP (determined by his or her ‘home office’), and in some circumstances also by way of a limited
salary as an employee of DWF Connected Services Holdings Limited. Michele Cicchetti provides qualifying services to the Group through his position as country
managing partner of Italy, Michele’s remuneration in respect of these qualifying services was £418,417 (2020/21: £82,760). His remuneration for FY20/21 is pro-rated
from commencement of his appointment to the Board. Seema Bains does not provide qualifying services to the Group including to the subsidiaries as she does not
hold any management roles as a member of DWF Law LLP and hence no remuneration is disclosed.
104 DWF Group plc | Annual Report and Accounts 2022
Governance
Bonus for the financial year ended 30 April 2022 (audited)
Performance
condition
Threshold
performance
required
(20% of max)
Target
performance
required
(50% of max)
Maximum
performance
required
(100% of max)
Actual
performance
Weighting
(based on
100%
maximum)
Bonus outcome for each Director
Sir Nigel
Knowles
Chris
Stefani
Matthew
Doughty
Adjusted PBT £39.7 m £41.8m £43.9m £41.3m 70% 27% 27% 27%
Lock-up days 173 days 179 days 10% 0% 0% 0%
Strategic and operationalobjectives See details on page 106 100%
objectives
met
20% 20% 20% 20%
Percentage of maximum
performanceachieved
47% 47% 47%
Actual annual bonus achieved
2
Calculated total bonus outcome
1
comprising:
£374k £150k £141k
– Cash
1
£187k £75k £71k
– Deferred shares
1
£187k £75k £71k
Total bonus outcome as a percentage of salary 70.6% 46.9% 47.0%
Actual annual bonus paid
3
Aggregate total bonus outcome
1
£665k
Individual share of aggregate total bonusoutcome
1
comprising:
£221k £221k £221k
– Cash £111k £111k £111k
– Deferred shares £111k £111k £111k
Individual share of aggregate total bonus outcome asa
percentage of salary
41.7% 69.1% 73.7%
Notes
1 Rounded to the nearest £1k.
2 Maximum bonus opportunity for the CEO was 150% of salary and for each of the CFO and COO was 100% of salary.
3 The aggregate total bonus outcome of £665,000 was distributed equally between the three Executive Directors as described on page 84.
4 Payment of all elements of the bonus was subject to achievement of the threshold adjusted PBT target.
5 Payment of the deferred element of the bonus is subject to employment conditions and deferred for three years.
DWF Group plc | Annual Report and Accounts 2022 105
Strategic report Governance Financial statements Other information
Remuneration continued
Details of strategic and operational objectives for FY2021/22
The strategic and operational objectives are made up of a number of personal weighted objectives for specific matters to be achieved
during the financial year to safeguard the business and contribute to, or form, the essential financial and strategic priorities and outcomes.
The Executive Directors performed strongly across their personal weighted objectives, which were fully achieved, as described below:
Executive Director
Sir Nigel Knowles
(CEO)
Clients (33%weighting) ESG (33% weighting) Growth (33% weighting)
Objective Embed and deliver our vision
through our Integrated Legal
Management (ILM) approach
witha focus on Mindcrest
Finalise and communicate our
Global ESG strategy to 2030
Identify growth opportunities
including M&A and new
associations
Outcome • ILM revenue increased from
£116.5m in FY21 to £139.9m in
FY22 which was a growth rate
of 20%, being more than the
budgeted rate of growth of 7%.
• Achieved, as at the end of FY22
we have 50 clients billing £1m+.
• Achieved, GAT clients continue
to outperform the average
client. As at end of FY22, YOY
growth for this client set
was20.4%.
• ESG has been a key area of
communication since the
launch of the new ESG
Strategy in December 2021
and messaging has been
embedded into key policies
and procedures, HR strategy
and our website.
• We entered into an exclusive
association in Saudi Arabia
andestablished a Regional
headquarters there also.
• An exclusive association with
NGA in Portugal has been
signed, and we have
strengthened our Iberian
CMAoffering through an
association with RTS in Spain.
• We have hired an insurance
litigation partner on a cost
share basis with Hauzhen in
Hong Kong and finalised terms
for an association agreement
which was signed in May 2022.
Attainment 33% 33% 33%
Chris Stefani
(CFO)
Debt Funding (33%weighting) ESG (33%weighting) Cost Reduction (33%weighting)
Objective Achieve a successful re-financing
of the Group’s revolving credit
facility
Agree science based targets that
align with our strategy
Identify and enact operational
efficiencies in the Finance
function
Outcome • Executed new RCF agreement
on improved commercial terms
as compared to the current RCF
• Cost to income ratio is
delivered in line with budget,
reflecting appropriate
(positive) ESG strategy impact
on overheads.
• An action plan was developed
• Discovery was undertaken
andexternal providers were
consulted where required
• Implementation has
commenced
Attainment 33% 33% 33%
Matthew Doughty
(COO)
ESG – D&I
(33% weighting)
ESG – Governance, Risk and
Compliance (33% weighting)
Operating Model (33%weighting)
Objective Build a diverse and inclusive
organisation by driving the D&I
targets in relation to female and
ethnic minorities represented
Embed a stronger understanding
of our values, risk appetite and
ESG agenda with an increased
focus on risk management
across the business
Continue to scale up the
Mindcrest division and develop
plans for the pivot of more work
from Legal Advisory
Outcome • D&I targets have since been
replaced by our new D&I
targets to be achieved by 2025.
• At 30 April 2022 we had
achieved the following results:
• Senior female leadership
at28.9%.
• Senior ethnic minority at 4.3%.
• Risk registers embedded
across the Group
• Improvements to client
onboarding in the process
ofroll out
• Training delivered to address
particular risk issues identified
• The project is currently in the
process of being implemented
• This will include ongoing
consultation with clients
• The benefits of this project
willbe seen in FY23, increasing
in FY24
Attainment 33% 33% 33%
106 DWF Group plc | Annual Report and Accounts 2022
Governance
Vesting of 2019 long-term incentive award
The three-year performance period for the EIP award granted on 27 August 2019 ended on 30 April 2022. The formulaic outcome of
theperformance conditions was 41% vesting (as detailed below). The Remuneration Committee assessed this outcome and deemed it
appropriate in the context of overall business performance over the performance period.
Performance condition
Threshold
(20% vesting)
Target
(50% vesting)
Maximum
(100% vesting) Actual Performance Total % Vesting
Cumulative Three-Year EPS (40% weighting) 38.1 pence 42.2 pence 46.4 pence 21.4 pence 0%
Average Annual ROCE (40% weighting) 29.5% 32.8% 36.1% 33.0%
1
21%
Average Cash Conversion (20% weighting) 78% 87% 96% 131% 20%
Notes
1 The Committee used a pre-IFRS 16 basis for ROCE when assessing the achievement of the ROCE target for the 2019 LTIP. This basis has been adopted to ensure
performance against the ROCE target was measured consistently over the entire LTIP performance period as the ROCE target was initially set on a pre-IFRS 16 basis.
This approach therefore provides a ‘like for like’ comparison
Long-term incentive awards made in the financial year ended 30 April 2022
LTIP awards, which are conditional share awards made through the EIP, were granted to the Executive Directors on 17 August 2021.
Executive Director Award date % of salary Shares granted Face value
1
Sir Nigel Knowles (CEO) 17 August 2021 175% 819,346 £927,500
Chris Stefani (CFO) 17 August 2021 125% 353,356 £400,000
Matthew Doughty (COO) 17 August 2021 125% 331,272 £375,000
Notes
1 Based on the five-day Volume weighted average price share price of the Company of £1.132 as at 17 August 2021.
These LTIP awards have a three-year performance period to the end of the 2024/25 financial year and following vesting are subject to a
two-year holding period.
The following table sets out the performance conditions and targets:
Performance condition and percentage of award opportunity
Threshold
(20% vesting)
Target
(50% vesting)
Maximum
(100% vesting)
Cumulative Three-Year EPS (40% weighting) 33.8 pence 37.6 pence 41.3 pence
Average Annual ROCE (40% weighting) 26% 29% 32%
Average Cash Conversion (20% weighting) 82% 91% 101%
* Straight-line vesting applies between these points.
No other awards were made to Executive Directors during the year.
Achievement of shareholding guidelines as at 30 April 2022
The following chart illustrates the achievement of the shareholding guidelines by the Executive Directors as at 30 April 2022, against the
minimum shareholding requirement under the Remuneration Policy (see page 94 for a detailed breakdown). The chart is designed to
illustrate the value of their shareholding as a percentage of base salary. Their shareholding for these purposes does not include unvested
LTIP awards. For full information on all Directors’ interests in shares, see the table on page 108.
Executive Director Base salary
Achievement of shareholding
guidelinesbeginning of FY2021/22
Achievement of shareholding
guidelinesend of FY2021/22
Number Value
1
Number Value
2
Sir Nigel Knowles (CEO) £530,000 2,667,211 £2,219,120 2,677,211 £2,944,932
Chris Stefani (CFO) £320,000 1,032,814 £859,301 928,097
3
£1,020,907
Matthew Doughty (COO) £300,000 2,669,421 £2,220,958 2,669,421 £2,936,363
Notes
1 Based on share price of the Company as at 30 April 2021 of £0.832.
2 Based on share price of the Company of £1.10 as at 29 April 2022.
3 On 21 July 2021, restricted shares from Chris Stefani’s IPO award vested and he sold 104,717 shares to cover tax liabilities.
DWF Group plc | Annual Report and Accounts 2022 107
Strategic report Governance Financial statements Other information
Remuneration continued
Annual Report on Remuneration
The following table sets out where in the Remuneration report the information can be found or where it is not relevant a statement to
thateffect:
Information Page
Single figure of remuneration for each Executive Director 104
Share interests awarded during FY2021/22 107
Payment to past Directors 109
Statement of Directors’ shareholding and share interests 108
Percentage change in remuneration of Directors and all employees (including partners) 113
Pay ratio information in relation to the total remuneration of the Director undertaking the role of the CEO 111
Statement of the Implementation of the Remuneration Policy in FY2022/23 103
Consideration of matters relating to Directors’ remuneration 88 and 89
Statement of voting at General Meeting 109
Relative importance of spend on pay
The table below shows the percentage change in total salary costs and Shareholder distributions (i.e. dividends) from the financial year ended
30 April 2021 to the financial year ended 30 April 2022. There have been no changes between 30 April 2022 and the date of this report.
FY2020/21
£m
FY2021/22
£m Change %
Shareholder distributions paid in the year
1
6.5 13.5 107.6
Total remuneration cost
2
210.8 218.2 3.5
Notes
1 Dividends paid per year is defined in note 7 of the financial statements.
2 Total remuneration cost is defined in note 25 of the financial statements.
Directors’ share interests (audited)
The Directors’ interests in shares as at 30 April 2022 are provided below. There have been no changes between 30 April 2022 and the date
of this report.
Number of
shares
beneficially
owned
Value of shares
beneficially
owned as a %
salary/fees
1
Shareholding
guidelines
Deferred Bonus
Plan Shares
2
Shares
subject to
performance
conditions
Shares not
subject to
performance
conditions
Total interest
in shares
Executive Directors
Sir Nigel Knowles 2,677,211 556% 250% 130,300 2,122,380 0 4,929,891
Chris Stefani 928,097
3
319%
3
200% 130,300 1,251,445 0 2,309,842
Matthew Doughty 2,669,421 979% 200% 130,229 858,105 0 3,657,825
Non-Executive Directors
Jonathan Bloomer 40,000 N/A N/A N/A N/A N/A 40,000
Chris Sullivan 409,836 N/A N/A N/A N/A N/A 409,836
Luke Savage 32,693 N/A N/A N/A N/A N/A 32,693
Tea Colaianni 49,180 N/A N/A N/A N/A N/A 49,180
Sam Tymms 0 N/A N/A N/A N/A N/A 0
Seema Bains 1,400,000 N/A N/A N/A N/A N/A 1,400,000
Michele Cicchetti 1,531,379 N/A N/A 56,349 33,000
4
125,517
5
1,746,245
Notes
1 Calculated using the share price of £1.10 on 30 April 2022.
2 These Deferred Bonus Plan Share awards represent 50% of the bonus awarded for the period up to 30 April 2021. For the purposes of this award, the volume weighted
average price for the 5 days immediately preceding the date of grant of £1.132 was used.
3 On 21 July 2021, the second tranche of Chris Stefani’s IPO award vested and he sold 104,717 shares to cover tax liabilities.
4 This relates to an award granted to Michele Cicchetti before he was appointed as Partner Director. The award vests over five years in ten equal tranches, five tranches
onemployment and five on performance. The second two tranches vested on 27 August 2021.
5 This is a conditional award over 156,897 ordinary shares granted to Michele Cicchetti on 14 January 2021, which will vest over five years in equal tranches and are
notsubject to performance conditions. This award is unrelated to his role as Partner Director for which he receives no remuneration as described on page 104.
Thefirsttranche of 31,380 ordinary shares vested on 9 December 2021.
108 DWF Group plc | Annual Report and Accounts 2022
Governance
Service contracts or letters of appointment
The following table provides details of the service contracts or letters of appointment for the Directors. All service contracts and letters
ofappointment are available for viewing at the Company’s registered office. In line with best practice, all Directors are subject to annual
re-election at the Company’s AGM. The Chair of the Board and the Independent Non-Executive Directors are appointed subject to
re-appointment at the AGM for an initial term of three years commencing on the admission of the shares to trading on the London Stock
Exchange. The initial period of three years is renewable by one additional period of three years and renewable thereafter at the discretion
ofthe Company. Partner Director letters of appointment provide that their duties as a Director are subject to their professional duties as
solicitors authorised by the SRA or equivalent regulatory authority.
Date appointed Expiry date
Notice period by
Company or Director
Executive Directors
Sir Nigel Knowles 29 May 2020 Rolling service contract with no fixed expiry date. 12 months
Chris Stefani 10 September 2018 Rolling service contract with no fixed expiry date. 12 months
Matthew Doughty 22 October 2020 Rolling service contract with no fixed expiry date. 12 months
Non-Executive Directors
Jonathan Bloomer 1 August 2020 Rolling letter of appointment for an initial term of three years with
no fixed expiry date.
3 months
Chris Sullivan 1 November 2018 Rolling letter of appointment for an initial term of three years with
no fixed expiry date.
1 month
Luke Savage 1 November 2018 Rolling letter of appointment for an initial term of three years with
no fixed expiry date.
1 month
Tea Colaianni 1 November 2018 Rolling letter of appointment for an initial term of three years with
no fixed expiry date.
1 month
Sam Tymms 1 December 2018 Rolling letter of appointment for an initial term of three years with
no fixed expiry date.
1 month
Seema Bains 22 October 2020 Rolling letter of appointment for an initial term of up to three years
with no fixed expiry date. The Partner Director is not entitled to
receive a fee for undertaking the role.
1 month
Michele Cicchetti 22 October 2020 Rolling letter of appointment for an initial term of up to three years
with no fixed expiry date. The Partner Director is not entitled to
receive a fee for undertaking the role.
1 month
Payments to past Directors/payments for loss of office (audited)
During FY21/22 Andrew Leitherland was paid a total of £47,815. This payment was the final monthly tranche of his payment in lieu of notice, as
disclosed on page 106 of last year’s Remuneration report, and was paid after he had stepped down from his role as an Executive Director.
Shareholder voting at the 2021 AGM
Votes for % for Votes against % against
Total votes
validly cast
Votes
withheld
To approve the Directors’ Remuneration report 156,947,973 98.95 1,665,397 1.05 158,613,370 1,325,148
Shareholder voting at the 2019 AGM
Votes for % for Votes against % against
Total votes
validly cast
Votes
withheld
To approve the Directors’ Remuneration Policy 106,935,200 98.99 1,091,112 1.01 108,026,312 0
DWF Group plc | Annual Report and Accounts 2022 109
Strategic report Governance Financial statements Other information
Remuneration continued
Wider workforce remuneration
This section of the Directors’ Remuneration report provides an overview of remuneration principles and wider workforce remuneration
across the Group including:
• CEO-to-worker pay ratio; and
• UK gender and ethnicity pay gap reporting.
Remuneration principles and wider workforce remuneration across the Group
The Committee considers remuneration principles and wider workforce remuneration across the Group to enable it to take into account
wider workforce pay and practices, and the alignment of incentives and reward with culture, when setting Executive Director remuneration.
As set out below, key areas considered by the Committee include: Group remuneration principles; grading structure; basic pay; bonus; share
plans; pension; benefits; and termination policies.
The Committee is satisfied that the approach to remuneration across the Company is consistent with the Group’s principles of
remuneration. Inthe Committee’s opinion, the approach to Executive Director remuneration aligns with the wider Group remuneration
principles, and there are no anomalies specific to the Executive Directors.
Group remuneration principles
The table below sets out the Group’s remuneration principles:
Principle Detail
Competitive and fair Salaries set around marketmedian
Benefits reflect best practice and workforce needs
Flexibility in share plans to attract and retain key talent
Rewarding (theright) high performance We are a high-performing business and when we conduct our end of year reviews,
we recognise highperformers
We operate an annual performance-review process to ensure we have good
performancediscussions
We can recognise those who make outstanding contributions through share awards
Simple to understand We try to avoid unnecessary complexity
We provide accessible and relevant information
Supports DWFvalues
and culture
Incentives, performance-management and recognition approaches support DWF values
andculture
Benefits support our inclusive culture
Grading structure
DWF has a centralised approach to grading, with a new grading methodology introduced on 1 March 2021 to reflect the complexity of the
Group and to allow for future growth, with colleagues (Executive Directors, partners and employees) graded from band 1 to 4.
Overview of findings
The Group’s workforce has a unique structure, comprising both employees and members of partnerships. The partners, who represent the
principal generators of income for the Group, remain subject to partnership remuneration and benefit arrangements.
Salary
Average salary increases for employees and partners across the Group are being applied on an equitable and objective basis. Salary
increases are based on external benchmarking and position in pay range compared with market medians. It is our policy to increase the
salaries of the Executive Directors using the same approach and withwider workforce remuneration arrangements in mind.
Bonus
The majority of our employees and partners can share in the success of the Company through incentive compensation. In line with market
practice, the level of incentive compensation and whether it is paid solely in cash or in a mixture of cash and deferred shares, depends on
the level of seniority of employee and partners.
Share plans
Equity participation is offered to all UK, US and Spanish employees of the Group through the BAYE scheme, and to senior management and
Executive Directors through the LTIP and Deferred Bonus Plans, each of which involves the award of shares. It is the Group’s policy to allow
employees and partners to share in success by means of equity participation.
The BAYE continues to operate on an annual basis. All qualifying colleagues are invited to participate in the BAYE scheme by acquiring
ordinary shares out of deductions from salary, and awarded matching shares in respect of ordinary shares acquired. Each year, all qualifying
colleagues will be invited to sign up to buy shares over a 12-month investment period. Matching shares are received on a one-for-two basis,
so for every two shares purchased over the 12-month investment period, participants receive one matching share three years from the start
of the relevant 12-month investment period subject to certain conditions.
The IPO gave DWF the opportunity to offer shares to the wider employee group, thus further aligning an element of remuneration with
Company performance, Executive Director remuneration, and the Shareholderexperience.
110 DWF Group plc | Annual Report and Accounts 2022
Governance
The EIP is in operation for partners and employees and offers a number of awards such as promotion awards, lateral hire awards and
exceptional contributor awards. These plans are designed to enable the business to attract and retain the right talent for the future
sustainability of the Group.
The Group’s Deferred Bonus Plan will be used for the Executive Directors’ deferred bonus shares for the period. The plan rulesenable it to
be used for other senior employees and partners.
Pensions
All UK employees are eligible for enrolment in a Company defined-contribution pension arrangement. The current employee contribution
is3–5% of salary and employer contribution is 5–7% of salary. The contribution for Executive Directors is 7% of salary, in line with the
majority pensioncontributions applicable to the wider UK workforce. Outside of the UK, pension arrangements for employees are in line
with locallegal requirements.
Benefits
UK employees and partners are offered arange of benefits including life assurance and health insurance, and flexible benefits by way
ofsalary sacrifice. Elsewhere in theGroup, benefits are in line with local market practice.
Termination
An employee or partner must be in employment and not serving notice to be eligible for any bonus payment. The treatment of leavers
isgoverned by the respective share plan rules, agreed leaver status delegated authorities and operating guidelines.
Communication and engagement with employees and partners
The Board is committed to ensuring there is an open dialogue with our employees and partners over various decisions. The business is kept
informed of the Group’s activities and performance through communications and the circulation of corporate announcements. This is
supplemented by updates on Rubix, our intranet, to which all Non-Executive Directors have access.
To encourage opportunities for continuing dialogue, feedback and recognition, we continued with our Pulse Forum, established to ensure
that we listen to colleague voices within all of our jurisdictions and embed changes to enhance both our working environment and
engagement with our Group strategy. The Forum assesses the outcomes from future Pulse Surveys and share our actions and the progress
we are making as well as helping to shape initiatives to improve everyone’s experience within the Group. During the course of the financial
year, plans were put in place to change our family friendly policies as a result of the feedback we had received.
Chris Sullivan, as the designated Non-Executive Director for the workforce, engages with the workforce with regard to Executive Director
remuneration arrangements. Further details on how we have engaged with employees and responded to their feedback is continued within
our section 172 report on page 26.
For more information, please see pages 63 and 64 of the Corporate Governance report and 45 to 48 of the Environmental, Social and
Governance report.
CEO-to-worker pay ratio as at 30 April 2022
DWF is committed to fairness and equality across the Group, and takes the CEO pay ratio, alongside a number of other factors, into
consideration when reviewing pay levels across the Group.
To calculate the CEO pay ratio, the Group used prescribed methodology A to calculate the pay and benefits of all UK employees (including
partners) on a full-time equivalent (‘FTE’) basis for the financial year, to identify the quartiles. The pay and benefits for all UK employees and
partners for the relevant financial year is calculated and ranked from lowest to highest, to identify the employees and partners at P25, P50
and P75. We chose methodology A as we felt it comprehensively reflects the pay levels of our employees (including partners).
The salary and total remuneration of UK FTE employees (including partners) at the 25th, 50th and 75th percentile, and the ratios between
the CEO and these employees (including partners) are shown in the table below. The information in the table below was collated using
available data as at 30 April 2022.
Year Methodology
Salary Total remuneration
P25 P50 P75 P25 P50 P75
Amount FY2021/22 A £23,795 £37,811 £63,067 £27,232 £43,928 £72,215
FY2020/21 A £25,000 £40,000 £65,000 £26,109 £42,134 £69,587
FY2019/20 A £23,000 £36,445 £59,400 £24,383 £39,088 £64,487
Ratio FY2021/22 A 22:1 14.1 8.1 29.1 18.1 11.1
FY2020/21 A 21:1 13:1 8:1 35:1 22:1 13:1
FY2019/20 A 23:1 15:1 9:1 24:1 15:1 9:1
The Company believes the median pay ratio for FY2021/22 is consistent with the pay, reward and progression policies for the Group’s UK
employees (and partners). We complete a rigorous pay and benchmarking exercise annually on all roles, and adjust appropriately based on
performance and affordability, to ensure employees (and partners) are remunerated fairly and in line with the Group’s pay philosophy.
In assessing our pay ratio versus likely ratios from industry peers, we believe we are towards the lower end of the range but note that annual
and long-term incentive payments have varied considerably amongst this group. In our case, the CEO single figure comprises fixed pay,
bonus, taxable benefits, and pension benefits, given that no long-term incentive vested in respect of performance in FY2021/22. We also
recognise that ratios will be influenced by levels of employee (and partner) pay, which may vary from other sectors.
Over time, we expect there may be significant volatility in this ratio, and believe this will be caused by the following:
DWF Group plc | Annual Report and Accounts 2022 111
Strategic report Governance Financial statements Other information
Remuneration continued
• Our CEO pay is made up of a higher proportion of incentive pay than that of our employees (and partners), in line with the expectations
ofour Shareholders. This introduces a higher degree of variability in CEO pay each year, which affects the ratio.
• We recognise that the ratio is affected by the different structure of the pay of our CEO to that of our employees (and partners), as well as the
make-up of our workforce. This ratio varies between businesses even in the same sector. What is important from our perspective is that this
ratio is influenced only by the differences in structure, and not by divergence in fixed pay between the CEO and wider workforce. Where the
structure of remuneration is similar, as for the Executive Board and the CEO, the ratio is likely to be much more stable over time.
Performance against Total Shareholder Return (‘TSR’)
The following chart illustrates the Company’s TSR performance (share price growth plus dividends paid) from the date of Admission against the
performance of the FTSE All Share Support Services, a broad-based index the Company has been a constituent member of since Admission.
Feb AJan F
2020
2019
M
180
160
140
120
100
80
60
40
20
0
M A S O N DJJAM M A S O N DJJ AJan F
2021
M M A S O N DJJ AJan F
2022
M
DWF Group FTSE All-Share Support Services Index
Historic CEO remuneration
Element FY2018/19 FY2019/20 FY2020/21 FY2021/22
Total remuneration £70,949 £530,000 £868,784
1
£792,533
Annual bonus as a percentage of opportunity 0% 0% 37.1%
2
28.0%
LTIP as a percentage of opportunity N/A N/A N/A N/A
Notes
1 Figures for FY2020/21 are based on total remuneration paid to Andrew Leaitherland up to 28 May 2020 and Sir Nigel Knowles from 29 May 2020.
2 The aggregate total bonus outcome of £748,000 for FY2020/21 was distributed equally, on a pro-rata basis for length in role, between the three Executive Directors as
described on page 93 of the Annual Report and Financial Statements 2021. The maximum bonus opportunity for the CEO was 150% of base salary.
3 The aggregate total bonus outcome of £665k for FY2021/22 was distributed equally between the three Executive Directors as described on page 105. The maximum
bonus opportunity for the CEO was 150% of base salary.
112 DWF Group plc | Annual Report and Accounts 2022
Governance
Percentage change in remuneration of the Directors and all employees and partners
The position of Partner Director is designated by the Board as a Non-Independent, Non-Executive Director position. A Partner Director
represents the partners of DWF Law LLP and DWF LLP and is therefore a partner Shareholder representative on the Board. Partner Directors
do not receive any fees for the position on the Board because their remuneration is as a member of DWF Law LLP or DWF LLP (determined
byhis or her ‘home office’), and in some circumstances also by way of a limited salary as an employee of DWF Connected Services Holdings
Limited. Therefore, Partner Directors are not included in the table below.
FY
Salary/fees % change Taxable benefits % change Bonus % change
2021/22 2020/21 2021/22 2020/21 2021/22 2020/21
Executive Directors
Sir Nigel Knowles 9% 0% -11 0 -25% 0
Chris Stefani 0% 0% 2.4 -15% -25% 0
Matthew Doughty 90% 0% 119 0 40% 0
Non-Executive Director
Sir Nigel Knowles N/A 0 N/A N/A N/A N/A
Jonathan Bloomer 34% 0 N/A N/A N/A N/A
Chris Sullivan 6% 20% N/A N/A N/A N/A
Luke Savage 0 0 N/A N/A N/A N/A
Tea Colaianni 0 0 N/A N/A N/A N/A
Sam Tymms 0 0 N/A N/A N/A N/A
Vin Murria N/A -35% N/A N/A N/A N/A
Average employee (includespartners) 9% -0.2% -28% 31% -42% 522%
Notes
1 Sir Nigel Knowles stepped down as Chair of the Board on 29 May 2020 and his appointment as CEO and the respective remuneration for each role is captured
inthetable.
2 Matthew Doughty was appointed as COO on 22 October 2020 and the table shows his remuneration from that date.
3 Jonathan Bloomer was appointed Chair of the Board on 1 August 2020 and the table shows his remuneration from that date.
4 Fees paid to Chris Sullivan include Non-Executive Director fees and Senior Independent Non-Executive Director fees from the beginning of the period.
On1 August2020, Chris was appointed Deputy Chair of the Board and the table includes his additional fees for that role from that date.
5 Vin Murria stepped down as a Non-Executive Director on 30 December 2020 and the table shows her fees up to that date.
6 The aggregate total bonus outcome of £748,000 for FY2020/21 was distributed equally, on a pro-rata basis for length in role, between the three Executive Directors as
described onpage 93 of the Annual Report and Financial Statements 2021. The aggregate total outcome of £665k for FY2021/22 was distributed equally between the
three Executive Directors as described on page 105.
The Committee uses this information to satisfy itself that there is not an increasing gap between the level of fixed pay for the Director and
for employees (including partners). Based on the above analysis, the Committee is satisfied that this is the case.
UK gender and ethnicity pay gap reporting
We reported on our UK gender and ethnicity pay gap for 2021 in March 2022. The full 2021 Gender and Ethnicity Pay Gap Report is available
on our website at dwfgroup.com.
The Group’s UK gender pay gap
Pay gap
1
2017 2018 2019 2020 2021
Mean hourly pay gap 50% 48% 39% 37% 35%
Median hourly pay gap 36% 32% 33% 33% 28%
Mean bonus pay gap 51% 45% 37% 38% 24%
Median bonus pay gap 32% 23% 35% 38% 8%
Note
1 The figures above are combined figures for both employees and self-employed partners. For both hourly pay rates have been used.
While we are working hard to speed up the pace of change in our business, there is a gender pay gap due to the fact that we have more
menat senior levels in higher-paid roles. We are taking targeted and sustained action where there is currently under-representation,
andwearemaking positive progress. We know that changing decades of imbalance in our business and sector is going to take time,
butwearecommitted to addressing it. This sustained focus on meaningful actions will result in a more diverse workforce, supported
andempoweredthrough our inclusive culture and values.
DWF Group plc | Annual Report and Accounts 2022 113
Strategic report Governance Financial statements Other information
Remuneration continued
Ethnicity pay gap reporting
As part of our wider inclusion approach, we have worked hard over the past year to build a more accurate picture of our black and minority
ethnic (‘BAME’) population.
The Group’s UK ethnicity pay gap
Pay gap
1
2020 2021
Mean hourly pay gap 23% 24%
Median hourly pay gap 22% 23%
Note
1 The figures above are combined figures for both employees and self-employed partners. For both, hourly pay rates have been used.
We are committed to increasing the representation of minority ethnic employees across all career bands and, when compared with 2020,
wehave seen an increase across all pay quartiles. However, we continue to see the largest representation of minority ethnic employees
inthelower pay quartile and fell short of achieving our target of at least 10% BAME representation across senior leadership positions
(currently 4%). In addition, we have to rely on our colleagues to disclose their diversity data to help determine our ethnicity pay gap. Since
our last pay gap report, we have continued to promote the importance of volunteering this information and the levelof self-disclosure has
increased by 25%. We do understand that some colleagues may not feel comfortable sharing this information, soeither decide not to
disclose or use our ‘prefer not to say’ category. We will continue to encourage our colleagues to disclose their diversity data to improve the
accuracy of our reporting, whilst the launch of our latest representation targets, to 2025, will drive action andhold ourselves accountable
tochange.
The recent launch of our ESG Strategy also included publication of new stretch targets to increase the gender and ethnic diversity of our
workforce and unlock the potential of women and BAME colleagues. More details on these targets can be found on pages 46 and 47.
Tea Colaianni
Chair, Remuneration Committee
114 DWF Group plc | Annual Report and Accounts 2022
Governance
Directors’ report
Directors’ report
The Board of Directors present their report for the financial year
ended 30 April 2022 as required by the Companies Act 2006.
TheDirectors’ report, together with the Strategic report on
pages1to57, form the Management Report for the purposes
oftheFCA’s Disclosure, Guidance and Transparency Rule (‘DTR’)
4.1.5R (2) and DTR 4.18R.
Statutory or regulatory information contained elsewhere
intheAnnual Report and Accounts
The Board considers that some of the matters required to be
disclosed in the Directors’ report are of strategic importance and
these are therefore included in more detail in the sections of the
report as indicated inthe table below.
Information Section Page
Likely future developments
inthe business
Strategic report 07
Risk factors and principal
risks;going concern and
viabilitystatements
Strategic report 50 to 55
Financial instruments:
information on the Group’s
financial instruments and risk
management objectives and
policies, including our policy
onhedging
Note 19 to the
Consolidated
financialstatements
152 to
153
Governance arrangements;
human rights and
anti-corruption and
briberymatters
Environmental, Social
and Governance report
Corporate
Governancereport
32 to 33
66
Environmental matters
including annual greenhouse
gas emissions and SECR
Environmental, Social
and Governance report
38 to 45
Social and community matters Environmental, Social
and Governance report
49
Financial risk management Consolidated financial
statements
152 to
154
Section 172(1) statement Section 172(1)
andstakeholders
26 to 31
Disclosure of information required by DTR 7.2.1R
The corporate governance statement as required by DTR 7.2.1R
issetout on page 61.
Disclosure table pursuant to Listing Rule (‘LR’) 9.4.8C
The following table provides references to where the information
required by LR 9.4.8C is disclosed:
Listing Rule Listing Rule requirement Page
9.8.4(4) Long-term incentive schemes Directors’
Remuneration
report, 83 to 114
9.8.4 (12) Waiver of dividends by
aShareholder
Directors’
report 116
9.8.4(13) Waiver of future dividend by
aShareholder
Directors’
report 116
Board of Directors
You can find the names of all current Directors and their biographies
on pages 58 and 59. All Directors intend to seek election or re-election
at the 2022 AGM in accordance with the Articles of Association of the
Company (the ‘Articles of Association’) and the recommendations of
the UK Corporate Governance Code 2018 (the ‘Code’).
Appointment, reappointment and removal of Directors
Directors are appointed and may be removed in accordance with
the Articles of Association and the provisions of the Companies
Act2006.
A Director may be appointed to the Board by ordinary resolution
ofthe Shareholders in a general meeting, either to fill a vacancy or
as an additional director. No person other than a Director retiring
inaccordance with the Articles of Association shall be elected or
re-elected at any general meeting unless:
i. recommended by the Board; or
ii. not less than 14 nor more than 42 days before the date appointed
for the meeting there has been given to the Company, by amember
(other than the person to be proposed) entitled to voteat the
meeting, notice of the intention to propose a resolution for the
election of that person, stating the particulars which would, if they
were so elected, be required to be included inthe Company’s
register of Directors and a notice executed bythat person of their
willingness to be elected.
A Director may be removed by the Company in certain
circumstances set out in the Articles of Association or by special
resolution or by ordinary resolution of which special notice had
been given in accordance with the Companies Act 2006.
Powers of Directors
The business of the Company is managed by the Directors who are
subject to the Articles of Association, provisions of the Companies
Act 2006 and any directions given by special resolution. Specific powers
relating to the allotment and issuance of ordinary shares and the
ability of the Company to purchase its own securities are also included
within the Articles of Association, and such authorities may be
submitted for approval by the Shareholders at the AGM each year.
Directors’ indemnities and insurance
As permitted by the Articles of Association and to the extent
permitted by the law, the Company has indemnified each Director
inrespect of any liability arising out of, or in connection with, the
execution of their powers, duties and responsibilities, as Directors
ofthe Company or any of its subsidiaries. These indemnities in force
during the year and that continue to remain in force are qualifying
third party indemnities as defined by section 234 of the Companies
Act 2006.
The Company also maintains directors’ and officers’ liability insurance
as provided for in the Articles of Association. The Directors may also
obtain, at the Company’s expense, external legal or professional
advice necessary to enable them to carry out their duties.
Directors’ interests
Directors’ interests in the share capital of the Company as
at30 April2022 are set out on page 108 in the Directors’
Remuneration report.
Conflicts of interest
The Articles of Association give the Board power to authorise
matters that give rise to actual or potential conflicts. The Company
has a policy and procedures in place for identifying, disclosing,
evaluating and managing conflicts of interest so that Board
decisions are not compromised by a conflicted director. Directors
have a continuing duty to ensure the Board is updated on any
changes to these conflicts. The Company Secretary maintains a
register of conflicts and any conflicts that have been authorised
bythe Board. The register of conflicts is reviewed annually and
approved by theBoard.
Articles of Association
The Company’s Articles of Association may only be amended by
passing a special resolution of the Company at a general meeting.
The Articles of Association are available on our website at
dwfgroup.com/en/investors.
DWF Group plc | Annual Report and Accounts 2022 115
Strategic report Governance Financial statements Other information
Directors’ report continued
Dividends
The Board recommends a final dividend of 3.25 pence per ordinary
share to Shareholders. Subject to Shareholder approval at the
Company’s 2022 AGM, this will become payable on 7 October 2022
to all Shareholders on the register of members at the close of
business on 9 September 2022. During the year, the Board declared
an interim dividend of 1.50 pence per ordinary share which was
paidto Shareholders on 4 March 2022. There are no guarantees
thatthe Company will pay dividends, orthelevel of any such
dividends in the future.
Share capital structure and share rights
As at 30 April 2022, the Company’s share capital comprised
325,352,865 ordinary shares of 1 pence each, fully paid up and
quoted on the London Stock Exchange.
Rights attributable to the Company’s ordinary shares are as set
outin the Articles of Association (which are available on our website
at dwfgroup.com/en/investors) and in applicable company law.
Holders of the Company’s ordinary shares have the right to attend,
speak and vote (either in person or by proxy) at a general meeting
ofthe Company, and the right to benefit in any distribution of
theCompany, which includes, but is not limited to, dividends.
NoShareholder owns shares with special rights as to control.
The Company operates a number of employee share plans, which
aredetailed both in the Directors’ Remuneration report on pages 83
to 114 and in note 23 to the consolidated financial statements. The
voting rights of shares held in trust for the share plan participants,
asbeneficial holders, are exercised at the direction of the participant.
In respect to any voting rights of shares held in trust that are not
allocated to share plan participants, Ocorian Limited (the ‘Trustee’)
will abstain from voting these shares, unless directed otherwise by
the Company, and then only in accordance with the Trustee’s
discretion. The Trustee of the Employee Benefit Trust and the Reward
Share Trust has waived its right to dividends on all unallocated shares
within the Trusts.
Substantial shareholdings
The table below shows the direct and indirect holdings of major
Shareholders in the Company’s ordinary issued share capital,
asat30 April 2022. The Company had been notified in accordance
with the provisions of Chapter 5 of the DTR orwas otherwise aware,
of the following interests in the Company’s voting rights:
Holder
Number of
ordinary
shares as at
30 April 2022
% of issued
capital as at
30 April 2022
1
DWF Group Plc Employee BenefitTrust 30,242,231 9.30
Premier Miton Investors 18,990,212 5.84
Cartesian CapitalGroup 17,814,338 5.48
Aberdeen Standard Investments 16,258,652 5.00
Border to Coast Pensions Partnership 8,711,709 2.68
1 Issued share capital as at 30 April 2022 was 325,352,865.
At 20 July 2022, no further notifications had been received under the
DTRs in relation to interests in the Company’s shares.
Authority to allot and purchase own shares
At the Company’s 2021 AGM, the Directors were authorised to:
i. allot ordinary shares (or grant rights to subscribe for, or convert
any securities into, ordinary shares) up to an aggregate nominal
amount equal to £1,084,509 (representing 108,450,900 ordinary
shares of 1p each) and to allot further shares up to an aggregate
nominal amount equal to £1,084,509 (representing 108,450,900
ordinary shares of 1 pence each) for the purpose of a rights issue;
ii. allot ordinary shares having an aggregate nominal amount of
£162,277 (representing 16,227,700 ordinary shares of 1 pence
each) for cash, without offering them to existing Shareholders
inproportion to their holdings;
iii. allot additional shares having an aggregate nominal amount of
£162,277 (representing 16,227,700 ordinary shares of 1 pence
each) for the purposes of financing a transaction which the
Boardof the Company determines to be an acquisition or other
capital investment, without offering the shares first to existing
Shareholders in proportion to their holdings; and
iv. make market purchases of up to 32,455,465 shares in the
Company, representing 10% of the Company’s issued share
capitalat the time.
To date the Directors have used none of these authorities. The
Directors confirm their intention to renew these authorities at
theforthcoming AGM. Further details are set out in the Notice
ofAnnualGeneral Meeting, which can be found on our website
atdwfgroup.com/en/investors.
Restrictions on transfer
As part of the Group, DWF Law LLP, is regulated by the SRA,
andtheCompany and Shareholders aresubject to statutory
ownership restrictions pursuant to the LegalServices Act 2007.
It is a cardinal principle of the Company that a ‘Non-authorised
Person’ shall not hold, nor take steps to acquire, any ‘Restricted
Interest’ in the Company other than in compliance with the Legal
Services Act 2007 and the arrangements, rules and regulations
ofany ‘Relevant Licensing Authority’, which includes the SRA and,
where applicable, other designated regulators of the legal
professions in England and Wales.
A Non-authorised Person includes any person who is not
approvedto carry on legal activities by the SRA or another
RelevantLicensing Authority.
A Restricted Interest in the Company exists where a person (aloneor
with their associates):
a) holds at least 10% of the shares in the Company;
b) is able to exercise significant influence over the management of
the Company by virtue of their shareholding in the Company;
c) is entitled to exercise, or control the exercise, voting power in the
Company which, if it consists of voting rights, constitutes at least
10% of the voting rights in the Company; and
d) is able to exercise significant influence over the management of
the Company by virtue of the person’s entitlement to exercise,
orcontrol the exercise of, voting rights in the Company.
116 DWF Group plc | Annual Report and Accounts 2022
Governance
If a member (or prospective member) who is a Non-authorised
Person proposes to acquire a Restricted Interest in the Company,
that member (or prospective member) shall not take any steps to
acquire such Restricted Interest until after it has:
a) notified the Company and the Relevant Licensing Authority in
advance of its proposal to acquire such Restricted Interest; and
b) received the necessary approvals from the Relevant Licensing
Authority, as may be required under the Legal Services Act 2007
and Regulatory Arrangements.
It is a criminal offence under the Legal Services Act 2007 for a
Non-authorised Person to fail to comply with these obligations.
If the Company believes the Divestiture Condition may be satisfied
in relation to a Non-authorised Person (a ‘Defaulting Person’), the
Company may give notice to the Defaulting Person that all of the
restrictions referred to below shall apply to all of that Non-authorised
Person’s shares in the Company (the ‘Relevant Shares’):
a) subject to a compulsory disposal provision set out below,
atransfer of or agreement to transfer the Relevant Shares,
orinthe case of unissued shares, the transfer of (or agreement
totransfer) the right to be issued with them, is void;
b) no voting rights are to be exercisable in respect of the
RelevantShares;
c) no further shares are to be issued in right of the Relevant Shares
or in pursuance of any offer made to their holder;
d) except in liquidation, no payment is to be made of any sums due
from the Company on the Relevant Shares whether in respect of
capital or otherwise; and
e) any restriction the SRA or Relevant Licensing Authority may
impose in respect of the Relevant Shares in accordance with
theLegal Services Act 2007.
A Divestiture Condition includes where a Non-authorised Person
holds a Restricted Interest in the Company by virtue of holding
shares in the Company in any of the following circumstances:
a) as a result of the person taking a step in circumstances that
constitutes an offence under paragraph 24(1) of Schedule 13
tothe Legal Services Act 2007 (whether or not the person is
charged with, or convicted of, an offence under that paragraph);
b) in breach of conditions imposed under paragraph 17, 28, or 33
ofSchedule 13 to the Legal Services Act 2007; or
c) in contravention of an objection by the Relevant Licensing
Authority under paragraph 31 or 36 of Schedule 13 to the
LegalServices Act 2007.
For so long as the restrictions set out above apply to a Defaulting
Person, the Company may (in its absolute discretion), notify the
Defaulting Person that, within seven days of the date of service
ofthe notice, they must dispose of such number of their shares
representing the Relevant Shares in the Company that will result in
the Defaulting Person no longer holding a Restricted Interest in the
Company (the ‘Disposal Shares’).
If the Defaulting Person does not dispose of the Disposal Shares,
theCompany shall arrange to sell the Disposal Shares as soon as
isreasonably practicable. The Company shall not be liable to the
Defaulting Person for any alleged deficiency in the amount of sale
proceeds in respect of, or any other matter relating to, the Disposal
Shares. The Company may make any arrangements it deems necessary
or desirable to sell the Disposal Shares. The Defaulting Person will
receive the net proceeds from the sale of the Disposal Shares.
Other than as set out above, where imposed by law or regulation,
orwhere the Listing Rules require certain persons to obtain
clearance before dealing, there are no restrictions regarding the
transfer of shares in the Company. The Company is not aware of
anyagreement which would result in a restriction on the transfer
ofshares or votingrights.
Change of control – significant agreements
There are a number of agreements that take effect, alter or
terminate upon a change of control of the Company, including
following a takeover bid, such as supplier and service provider
agreements and property lease arrangements. The legal risk arising
out of such change of control is closely managed by the Company
aspart of its contractual governance processes.
The Company has an unsecured £100.0m multicurrency revolving
loan facility agreement with HSBC UK Bank plc, National Westminster
Bank plc Citigroup Inc. and Santander UK plc for general corporate and
working capital purposes. If there is a change of control of the
Company, any lender, by not less than 30 days’ notice to the Company,
may cancel its commitment under the facility and declare the
outstanding utilisation of that lender’s commitment (together with
accrued interest) immediately due and payable.
The Company’s subsidiary Rousaud Costas Duran SLP and two of its
subsidiaries have unsecured multicurrency revolving loan facilities
agreements with several local banks for general corporate and
working capital purposes. The total value of all such facilities is
€15.95m. If there is a change of control of the Company, any lender
may cancel its commitment under the facility and declare the
outstanding utilisation of that lender’s commitment (together with
accrued interest) immediately due and payable.
In the event of a change of control, the facilities referred to above
would either require repayment or renegotiation. Further details on
banking facilities are set out in note 17 to the consolidated financial
statements on page 150.
The Directors are not aware of any agreements between the Company
and its Directors or employees which would pay compensation in
the event of a change of control. The rules of the Company’s share
plans generally provide for accelerated vesting or release of the
share awards in the event of a change of control of the Company.
Transactions with related parties
Please refer to note 24 on page 157 of the consolidated financial
statements for details of related party transactions in the year.
Political donations
The Group did not make any political donations or incur any political
expenditure during the year (2020/21: nil).
At the Annual General Meeting to be held on 28 September 2022,
and to avoid an inadvertent breach of the Companies Act 2006,
theCompany will seek authority for itself and its subsidiaries and
subsidiary undertakings to make political donations not exceeding
£100,000 in total.
Information required by Sch 7.11B(1) Companies (Miscellaneous
Reporting) Regulations 2018 – Business relationships
The Group has chosen to provide information in relation to
theengagement with suppliers, customers and other business
relationships elsewhere in this report. These are cross-referenced
inthe table overleaf:
Directors’ Responsibility Statement
The Directors’ Responsibility Statement can be found on page 119.
DWF Group plc | Annual Report and Accounts 2022 117
Strategic report Governance Financial statements Other information
Directors’ report continued
Information Section of the report Page
How the Directors have had
regard to the need to foster
theCompany’s business
relationships with suppliers,
customers and others
Section 172(1)
statement
Engaging with
ourstakeholders
28 to 31
The effect of that regard,
including on the principal
decisions taken by the
Companyduring the
financialyear
Section 172(1)
statement
Engaging with our
stakeholders
28 to 31
Information required by Sch 7.11(1)(b) Companies
(Miscellaneous Reporting) Regulations 2018 – Statement
ofEngagement with Employees
The Group has chosen to provide information in relation to the
statement of engagement with employees which are covered
elsewhere in this report. These are cross-referenced in the
tablebelow:
Information Section of the report Page
How the Directors engage
withemployees
Section 172(1)
statement
Engaging with
ourstakeholders
Corporate
Governancereport
28 and 29
28 to 31
65 and 66
How the Group provides
employees with information
onmatters of concern to
themas employees
Section 172(1)
statement
Engaging with
ourstakeholders
Corporate
Governancereport
26 and 27
28 and 31
65 and 66
How the Group consults
withand considers
employeefeedback
Section 172(1)
statement
Engaging with
ourstakeholders
Corporate
Governancereport
26 and 27
28 to 31
65 to 66
How the Directors have had
regard to employee interests
Non-Financial
Information Statement
Engaging with
ourstakeholders
Corporate
Governancereport
49
28 to 31
65 and 66
How the Group informs
employees of the financial
andeconomic factors
affectingits performance
Section 172(1)
statement
Engaging with
ourstakeholders
26 and 27
28 to 31
Employees with disabilities
Throughout the Group, the principles of equal opportunities are
recognised in the formulation and development of employment
policies. We retain our Disability Confident Leadership status for
removing barriers to disabled talent in the workplace. It is the
Company’s policy to give full and fair consideration to applications
from people with disabilities, having regard to their particular
aptitudes and abilities. If an employee becomes disabled, the
Company’s objective is to continue to provide suitable employment
in the same or an alternative position, with appropriate adjustments
made if necessary. Employees with disabilities share equally in the
opportunities for training, career development and promotion.
Further information on supporting disability can be found
onpage46.
Research and development
DWF Ventures (‘Ventures’) is DWF’s research and development arm,
serving as a vehicle to invest in and nurture new service lines that
donot easily fit into the conventional and regulated practice
group-based business model. Ventures was launched in October
2017 as an arms-length limited company within Connected Services,
and provides services to internal teams as well as clients, with a
focus on generating ideas, delivering research and development
requirements and nurturing early-growth services.
Branches outside of the UK
The Company has no overseas branches. The Company’s
subsidiaries are detailed in note 2 to the financial statements.
Annual General Meeting
The 2022 Annual General Meeting of the Company will be held at
and be broadcast from 20 Fenchurch Street, London, EC3M 3AG on
28 September 2022 at 2.00 pm. The Notice of Annual General
Meeting together with explanatory notes accompanies the Annual
Report and Accounts which is sent to Shareholders. It is also
available on our website at dwfgroup.com/en/investors.
Important events affecting the Group since 30 April 2022
There are no events since 30 April 2022 that require adjustment to
the Financial Statements or are important in the understanding of
the Company’s current position.
Disclosure of information to the Auditor
Having made the requisite enquiries, so far as each of the Directors
is aware, there is no relevant audit information (as defined by
section 418(3) of the Companies Act 2006) of which the Company’s
Auditor is unaware, and the Directors have taken all the steps they
ought to have taken as Directors to make themselves aware of any
relevant audit information, and to ensure the Company’s Auditor is
aware of that information.
Going concern
Having assessed the financial forecasts of the business, the principal
risks and other matters discussed in connection with the viability
statement on pages 55 and 56, the Directors consider it appropriate
to adopt the going concern basis of accounting in preparing the
financial statements, as the Company will generate sufficient cash
tomeet its ongoing obligations for at least 12 months from the date
of signing the financial statements.
The Directors’ report was approved by the Board and has
beensigned on its behalf by the Group General Counsel and
CompanySecretary.
By order of the Board
Darren Drabble
Group General Counsel and Company Secretary
20 July 2022
118 DWF Group plc | Annual Report and Accounts 2022
Governance
Directors’ responsibility statement
The directors are responsible for preparing the Annual Report and
Accounts and the financial statements in accordance with applicable
law and regulation.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have prepared
the group financial statements in accordance with UK-adopted
international accounting standards and the company financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and
applicable law).
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and company and of the
profit or loss of the group for that period. In preparing the financial
statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international accounting
standards have been followed for the group financial statements
and United Kingdom Accounting Standards, comprising FRS 101
have been followed for the company financial statements, subject
to any material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and company
will continue in business.
The directors are responsible for safeguarding the assets of the
group and company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the group’s and
company’s transactions and disclose with reasonable accuracy at
any time the financial position of the group and company and enable
them to ensure that the financial statements and the Directors’
Remuneration report comply with the Companies Act 2006.
The directors are responsible for the maintenance and integrity of
the company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Directors’ Confirmations
Each of the directors, whose names and functions are listed in
the‘Governance: Board of Directors’ on pages 58 and 59 of
theAnnual Report and Accounts confirm that, to the best of
theirknowledge:
• the group financial statements, which have been prepared in
accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position
and profit of the group;
• the company financial statements, which have been prepared
inaccordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities and financial position of the company; and
• the strategic report includes a fair review of the development and
performance of the business and the position of the group and
company, together with a description of the principal risks and
uncertainties that it faces.
In the case of each director in office at the date the directors’ report
is approved:
• so far as the director is aware, there is no relevant audit
information of which the group’s and company’s auditors are
unaware; and
• they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the group’s and company’s
auditors are aware of that information.
This responsibility statement was approved by the Board of
Directors on 20 July 2022 and is signed on its behalf by:
Sir Nigel Knowles Chris Stefani
Group Chief Executive Officer Chief Financial Officer
20 July 2022 20 July 2022
DWF Group plc | Annual Report and Accounts 2022 119
Strategic report Governance Financial statements Other information
Report on the audit of the financial statements
Opinion
In our opinion, DWF Group plc’s group financial statements and company financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s and of the company’s affairs as at 30April2022 and of the group’s profit, the
company’s loss and the group’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the
Annual Report, which comprise: the Consolidated Statement of
Financial Position and Company Statement of Financial Position as
at30 April 2022; the Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated Statement of
Changes in Equity, Consolidated Statement of Cash Flows and
Company Statement of Changes in Equity for the year then ended;
and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit Committee
of DWF Group plc.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as
applicable to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit
services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 4, we have provided no non-
audit services to the company or its controlled undertakings in the
period under audit.
Our audit approach
Context
DWF Group is a listed law firm, predominantly operating in the UK.
The Group focuses on the provision of legal and alternative legal
services. The Group’s consolidated financial statements are
primarily an aggregation of the two UK Business Units, representing
the regional UK law partnerships, DWF Law LLP and DWF LLP,
withother overseas entities. For the purposes of our audit, we
considered DWF Law LLP and DWF LLP to be separate components.
The context of our audit is underpinned by 2022 being our first year
as external auditors of the Group. As part of our audit transition, we
performed specific procedures over opening balances by reviewing
the predecessor auditors’ working papers and risk assessment and
re-evaluating the predecessor auditors’ conclusions in respect of
keysources of estimation uncertainty and critical judgements in
theopening balance sheet at 1 May 2021. We performed process
walkthroughs to understand and evaluate the key financial
processes and controls across the Group. We performed a
significant amount of early audit procedures in advance of the
year-end, covering each of the in-scope Business Units and the
Group functions.
The objective of this audit work was:
Independent Auditor’s report to the members
of DWF Group plc
• to ensure that we had a clear plan as to what work needed to be
done when and where at year-end;
• to perform initial substantive testing, particularly where larger
samples were required; and
• to enable early consideration of the key sources of estimation
uncertainty andcritical judgements before the year-end. The
audit transition and pre year-end audit work were important in
determining our 2022 Group audit scope, areas of focus and
detailed testing approach.
As we undertook each phase of this first year audit, we regularly
reconsidered our risk assessment to reflect audit findings, including
our assessment of the Group’s control environment and the impact
on our planned audit approach. In terms of risk assessment:
• given the nature of the Group’s operations and the methodology
for revenue recognition, we considered revenue recognition and
valuation of unbilled revenue to be the most significant area
andtherefore have included this as a key audit matter; and
• we considered the recoverability of trade receivables given the
level andaging of receivables, and hence also included a key audit
matter in relation to this.
Overview
Audit scope
• Our audit focused on those entities with the most significant
contribution to the Group’s net revenue. Of the Group’s 68
reporting units, we identified two, which in our view, required an
audit of theircomplete financial information for Group reporting
purposes. These were DWF Law LLP and DWF LLP. We also
audited material consolidation journals;
• Another three reporting units were subject to audit procedures
overspecific balances and transactions, due to their contribution
towards specific financial statement line items. Revenue and trade
and other receivables were in scope for Rousaud Costas Duran
S.L.P., Cash and cash equivalents was in scope for DWF Poland
Jamka and Property, plant and equipment was in scope for
Mindcrest (India) Private Ltd;
• We have considered the out-of-scope entities and performed
analytical procedures over key balances as part of our procedures;
• All audits were performed by the Group engagement team with
the exception of Rousaud Costas Duran S.L.P, which was audited
by a PwC component audit team; and
• The components within the scope of our work, and work
performed centrally by the Group engagement team, accounted
for 73% of Group revenue, 69% of Group net revenue and 74% of
Group profit before tax.
Key audit matters
• Revenue recognition and valuation of unbilled revenue (group)
• Recoverability of trade receivables (group)
• Carrying value of investments (parent)
120 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Materiality
• Overall group materiality: £3.5m based on 1% of net revenue.
• Overall company materiality: £3.2m based on 1% of total assets
capped at 90% of overall group materiality.
• Performance materiality: £1.8m (group) and £1.6m (company).
The scope of our audit
As part of designing our audit, we determined materiality
andassessed the risks of material misstatement in the
financialstatements.
Key audit matter How our audit addressed the key audit matter
Revenue recognition and valuation of unbilled revenue (group)
Refer to page 80 (Audit Committee Report), note 1.14, note 1.20 and
note 13 to the Financial Statements for the Directors’ disclosures of
the related accounting policies, judgements andestimates.
At 30 April 2022, total unbilled receivables balances included in
note 13 were £79,940k (2021: £76,108k).
The fair value of unbilled revenue is calculated using a per-hour
recovery rate based on historic billing of hours and applying this
tothe number of hours which are not yet billed as at the year end.
Specific adjustments are then applied based on specific client
agreements, historical performance and forward-looking factors.
The valuation of the unbilled revenue balances is considered to be
akey risk due to the significance of these balances to the Financial
Statements and the estimates required in assessing the fair value of
the unbilled revenue.
In order to test the revenue recognition and valuation of unbilled
revenue, we performed the following procedures:
(i) We evaluated the Group’s control procedures and assessed and
validated the ageing profile of unbilled revenue;
(ii) We have understood and tested the application of the Group’s
policy for recognition of unbilled revenue;
(iii) We have understood and evaluated the significant assumptions
used by management and performed sensitivity analysis to
understand the susceptibility of the valuation to changes in the key
assumptions;
(iv) We have performed look-back procedures on the valuation at
the prior year-end and compared the level of unbilled revenue
write-offs during the current period in order to assess the
reasonableness of the estimated recovery rates applied by
management;
(v) We have understood and evaluated the appropriateness of the
adjustments made by management to specific matters within
unbilled revenue and revenue recognition; and
(vi) We have tested the calculation of team recovery rates, tracing
billed hours back to timesheets, and historic billings to source
documentation. We have verified the number of year end unbilled
hours as at the year end back to support.
Based on our audit work, we found estimates made in the revenue
recognition and valuation of unbilled revenue to be acceptable. We
also consider the disclosures made in the financial statements to
be appropriate.
Recoverability of trade receivables (group)
Refer to note 1.6 and note 13 to the Financial Statements for
theDirectors’ disclosures of the related accounting policies,
judgements and estimates.
At 30 April 2022, total trade receivables balances included in note
13 were £88,949k (2021: £91,185k), net of provisions of £11,729k
(2021: £13,031k). The recoverability of trade receivables and the
level of provisions for expected credit losses are considered to
beakey risk due to the significance of these balances to the
FinancialStatements and the judgements required in making
appropriate provisions.
In order to test the recoverability of trade receivables, we
performed the following procedures:
(i) We evaluated the Group’s credit control procedures and
assessed and validated the ageing profile of trade receivables;
(ii) We assessed recoverability on a sample basis by reference to
cash received subsequent to year-end, agreement to the terms of
the contract in place and issue of credit notes post year-end as
necessary;
(iii) We considered the appropriateness of estimates regarding the
level of expected credit loss for trade receivables and assessed
whether the associated provisions were calculated in accordance
with the Group’s provisioning policies and/or whether there was
evidence of management bias in provisioning, obtaining supporting
evidence as necessary; and
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit of
thefinancial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of
our procedures thereon, were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
DWF Group plc | Annual Report and Accounts 2022 121
Strategic report Governance Financial statements Other information
Key audit matter How our audit addressed the key audit matter
(iv) We also challenged management as to whether the
methodology applied in determining the appropriate expected
credit loss provisions appropriately reflected the level of risk in the
total receivables balance with consideration given to individual
counterparty credit risk and the general economic conditions in
each jurisdiction, taking into account in particular the impact of
macroeconomic conditions and inflationary pressures on
corporatesolvency.
Based on our audit work, we found estimates made in the
recoverability of trade receivables to be acceptable. We also
consider the disclosures made in the financial statements to be
appropriate.
Carrying value of investments (parent)
Refer to note 1.1 and note 2 of the Company Financial Statements.
The Company holds investments in its subsidiaries of £255,955k
(2021: £247,281k).
We focused on this area due to the size of the investment balances.
Management has performed an assessment of the recoverable
amount of the investments and compared this to the carrying value
using the same cash flow methodology applied in the impairment
test for goodwill.
The results showed that no impairment was required against
theseinvestments.
We obtained Management’s assessment of the carrying value of the
investments and we challenged:
(i) the key assumptions for short and long term growth rates
intheforecast cash flows for those businesses underpinning
theinvestees’ recoverable amounts, comparing them with
historicalresults;
(ii) the discount rate used in the calculations by assessing the cost
of capital for the Group and comparable organisations; and
(iii) the recoverability of investment in subsidiaries by comparing
the net asset values of these subsidiaries against the carrying
valueof the investment including consideration of the market
capitalisation of the Group. There were no indications of
impairment identified.
(iv) We performed sensitivity analysis on the key assumptions within
the cash flow forecasts. This included sensitising the discount rate
applied to the future cash flows, and the short and longer term
growth rates and operating profit forecast.
Following the conclusion of our procedures above, we are satisfied
that no impairment is required.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls, and
the industry in which they operate.
The Group is organised into 68 reporting components and the
Group financial statements are a consolidation of these reporting
components. The reporting units vary in size. We identified two
units that required a full scope audit of their financial information
due to either their size or risk characteristics. These were DWF LLP
and DWF Law LLP. We also audited material consolidation journals.
Three reporting components were subject to audit procedures over
specific balances and transactions due to their contribution to the
Group’s results: Revenue and trade and other receivables were in
scope for Rousaud Costas Duran S.L.P. Cash and cash equivalents
was in scope for DWF Poland Jamka and Property, plant and
equipment was in scope for Mindcrest (India) Private Ltd. Our audit
scope was determined by considering the significance of each
component’s contribution to net revenue and profit before tax, and
individual financial statement line items, with consideration to
obtaining sufficient coverage over identified risks.
Independent Auditor’s report to the members
of DWF Group plc continued
All audit work was performed by the Group engagement team, with
the exception of one component which was performed by a PwC
component audit team. The Group engagement team supervised
the direction and execution of the audit procedures performed
bythe component team. Our involvement in their audit process
included the review of their reporting and supporting working
papers. The Group engagement team also attended planning
andclearance meetings during the audit cycle. Together with the
additional procedures performed at Group level, this gave us the
evidence required for our opinion on the financial statements as
awhole.
The Group engagement team also performed the audit of
theCompany.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to
determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line
items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements
asawhole.
122 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group Financial statements – company
Overall materiality £3.5m £3.2m
How we
determinedit
1% of net revenue 1% of total assets capped at 90% of overall
groupmateriality
Rationale for
benchmark applied
Based on the benchmarks used in the Annual Report,
net revenue is in our view the primary measure used by
the shareholders in assessing the performance and
growth of the Group, and is a generally accepted
auditing benchmark.
We believe that total assets is the primary measure used
by the shareholders in assessing the performance of the
entity, and is a generally accepted auditing benchmark
for non trading companies.
For each component in the scope of our group audit, we allocated a
materiality that is less than our overall group materiality. The range
of materiality allocated across components was between £1.5m and
£3.2m. Certain components were audited to a local statutory audit
materiality that was also less than our overall groupmateriality.
We use performance materiality to reduce to an appropriately
lowlevel the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances,
classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 50% of overall
materiality, amounting to £1.8m for the group financial statements
and £1.6m for the company financial statements.
In determining the performance materiality, we considered a
number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and
concluded that an amount in the middle of our normal range
wasappropriate.
We agreed with the Audit Committee of DWF Group plc that we
would report to them misstatements identified during our audit
above £175k (group audit) and £158k (company audit) as well as
misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the
company’s ability to continue to adopt the going concern basis of
accounting included:
• We obtained from management their latest assessments that
support the board’s conclusions with respect to the going concern
basis of preparation for the financial statements;
• We evaluated management’s forecast and downside scenarios
and challenged the adequacy and appropriateness of the
underlying assumptions in comparison to headroom on debt
covenants andfacilities;
• We reviewed management accounts for the financial period to
date and checked that these were consistent with the starting
point of management’s scenarios and supported the key
assumptions included in the assessments;
• We evaluated the historical accuracy of the budgeting process to
assess the reliability of the data;
• We have tested the mathematical integrity of management’s going
concern forecast models; and
• We have reviewed the disclosures made in respect of going
concern included in the financial statements
Based on the work we have performed, we have not identified
anymaterial uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s
and the company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements
are authorised for issue.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s
andthe company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the
UK Corporate Governance Code, we have nothing material to add
ordraw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the Annual
Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information,
which includes reporting based on the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Our opinion on the
financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the
extent otherwise explicitly stated in this report, any form of
assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement, we
are required to perform procedures to conclude whether there is
amaterial misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
andmatters as described below.
DWF Group plc | Annual Report and Accounts 2022 123
Strategic report Governance Financial statements Other information
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
Report for the year ended 30 April 2022 is consistent with the
financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit,we did not identify any material misstatements in the
Strategicreport and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration report to
beaudited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in
relation to going concern, longer-term viability and that part of
thecorporate governance statement relating to the company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with
respect to the corporate governance statement as other information
are described in the Reporting on other information section of
thisreport.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit, and we
have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust
assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal
risks, what procedures are in place to identify emerging risks and
an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about
whether they considered it appropriate to adopt the going
concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and
company’s ability to continue to do so over a period of at least
twelve months from the date of approval of the financial
statements;
• The directors’ explanation as to their assessment of the group’s
and company’s prospects, the period this assessment covers and
why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable
expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period
ofits assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term
viability of the group was substantially less in scope than an audit
and only consisted of making inquiries and considering the directors’
process supporting their statement; checking that the statement
isin alignment with the relevant provisions of the UK Corporate
Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and
understanding of the group and company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report,
taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess
the group’s and company’s position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems;
and
• The section of the Annual Report describing the work of the Audit
Committee of DWF Group plc.
We have nothing to report in respect of our responsibility to report
when the directors’ statement relating to the company’s compliance
with the Code does not properly disclose a departure from a
relevant provision of the Code specified under the Listing Rules for
review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ Responsibility Statement,
the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for
being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the group’s and the company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
isa high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
withlaws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
inrespect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud,
isdetailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws
andregulations related to Solicitors Regulation Authority (“SRA”)
Regulation, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also
considered those laws and regulations that have a direct impact
onthe financial statements such as the Companies Act 2006.
Weevaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the
risk of override of controls), and determined that the principal risks
were related to posting inappropriate journal entries to manipulate
reported results focusing on journals impacting revenue and profit
before tax and management bias in significant accounting estimates.
The group engagement team shared this risk assessment with the
component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures
performed by the group engagement team and/or component
auditors included:
Independent Auditor’s report to the members
of DWF Group plc continued
124 DWF Group plc | Annual Report and Accounts 2022
Financial statements
• challenging assumptions and judgements made by management
in their significant accounting estimates, in particular around
thevaluation of unbilled revenue and the valuation of the
tradereceivables;
• identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations;
• discussions with the Audit Committee, management and internal
audit, including consideration of known or suspected instances of
non-compliance with laws and regulation or fraud;
• performing unpredictable procedures as part of our audit; and
• reviewing minutes of meetings of those charged with governance.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to
events and transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery
orintentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number
of items for testing, rather than testing complete populations. We
will often seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit sampling
to enable us to draw a conclusion about the population from which
the sample is selected.
A further description of our responsibilities for the audit of
thefinancial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
partof our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only
for the company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
• we have not obtained all the information and explanations we
require for our audit; or
• adequate accounting records have not been kept by the company,
or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are
not made; or
• the company financial statements and the part of the Directors’
Remuneration report to be audited are not in agreement with the
accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee of DWF
Group plc, we were appointed by the members on 28 September
2021 to audit the financial statements for the year ended 30 April
2022 and subsequent financial periods. This is therefore our first
year of uninterrupted engagement.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance
and Transparency Rule 4.1.14R, these financial statements form part
of the ESEF-prepared annual financial report filed on the National
Storage Mechanism of the Financial Conduct Authority in accordance
with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This
auditors’ report provides no assurance over whether theannual
financial report has been prepared using the single electronic
format specified in the ESEF RTS.
Jonathan Studholme (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
21 July 2022
DWF Group plc | Annual Report and Accounts 2022 125
Strategic report Governance Financial statements Other information
Consolidated income statement
Year ended 30 April 2022
Notes
2022
£’000
2021
£’000
Revenue 3 416,052 400,948
Recoverable expenses 3 (65,810) (62,818)
Net revenue 3 350,242 338,130
Direct costs 3 (169,332) (166,349)
Gross profit 3 180,910 171,781
Administrative expenses (146,691) (187,471)
Trade receivables impairment 13 (2,973) (5,349)
Other impairment 4 (3,593) (4,595)
Operating profit/(loss) 4 27,653 (25,634)
Net finance expense 5 (3,664) (2,682)
Net interest expense on leases 5 (1,673) (2,284)
Profit/(loss) before tax 22,316 (30,600)
Total of adjusting items as defined under the Group’s alternative performance measures 2 (19,081) (64,792)
Adjusted profit before tax 2 41,397 34,192
Taxation 6 (2,029) (4,567)
Profit/(loss) for the year 20,287 (35,167)
Earnings/(losses) per share attributable to the owners of the parent:
Basic (p) 8 6.8 (11.9)
Diluted (p) 8 6.5 (11.9)
The results are from continuing operations.
Notes 1 to 27 are an integral part of these consolidated financial statements.
Consolidated statement of comprehensive income
Year ended 30 April 2022
2022
£’000
2021
£’000
Profit/(loss) for the year 20,287 (35,167)
Items that are or may be subsequently reclassified to the income statement:
Foreign currency translation differences – foreign operations 83 (2,855)
Total other comprehensive income/(expense) for the year 83 (2,855)
Total comprehensive income/(expense) for the year 20,370 (38,022)
There is no taxation on items within other comprehensive income.
Notes 1 to 27 are an integral part of these consolidated financial statements.
126 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Notes
2022
£’000
Re-presented
(note 1.21)
2021
£’000
Non-current assets
Intangible assets 10 45,604 49,173
Property, plant and equipment 11 11,239 12,615
Right-of-use assets 12 65,234 69,166
Investments – 227
Trade and other receivables 13 1,464 –
Deferred tax assets 20 3,938 4,649
Total non-current assets 127,479 135,830
Current assets
Trade and other receivables 13 190,174 183,506
Cash and cash equivalents (excluding bank overdrafts) 14 28,310 34,711
Total current assets 218,484 218,217
Total assets 345,963 354,047
Current liabilities
Trade and other payables 15 63,325 85,381
Corporation tax liabilities 6,190 6,030
Deferred consideration 890 1,699
Lease liabilities 16 14,576 13,104
Interest-bearing loans and borrowings 17 9,786 19,434
Provisions 18 6,315 3,764
Amounts due to members of partnerships in the Group 27 28,243 31,492
Total current liabilities 129,325 160,904
Non-current liabilities
Deferred tax liabilities 20 5,869 7,584
Lease liabilities 16 63,163 70,898
Interest-bearing loans and borrowings 17 90,344 75,444
Provisions 18 4,147 1,837
Total non-current liabilities 163,523 155,763
Total liabilities 292,848 316,667
Net assets 53,115 37,380
Equity
Share capital 21 3,254 3,246
Share premium 21 89,365 88,610
Treasury shares 21 (129) (129)
Other reserves 22 4,929 6,219
Accumulated losses 22 (44,304) (60,566)
Total equity 53,115 37,380
Notes 1 to 27 are an integral part of these consolidated financial statements.
The consolidated financial statements of DWF Group plc (company number: 11561594) were approved by the Board on 20 July 2022 and
signed on its behalf by:
Sir N Knowles
Group Chief Executive Officer
C J Stefani
Group Chief Financial Officer
Consolidated statement of financial position
As at 30 April 2022
DWF Group plc | Annual Report and Accounts 2022 127
Strategic report Governance Financial statements Other information
Share capital
(note 21)
£’000
Share premium
(note 21)
£’000
Treasury shares
(note 21)
£’000
Other reserves
Accumulated
losses
(note 22)
£’000
Total equity
£’000
Merger reserve
(note 22)
£’000
Share-based
payments
reserve
(note 22)
£’000
Translation
reserve
(note 22)
£’000
At 1 May 2021 3,246 88,610 (129) (2,385) 12,885 (4,281) (60,566) 37,380
Profit for
theyear – – – – – – 20,287 20,287
Other
comprehensive
income – – – – – 83 – 83
Total
comprehensive
income – – – – – 83 20,287 20,370
Shares issued 8 755 – – – – – 763
Dividends paid – – – – – – (13,537) (13,537)
Share-based
payments
(note23) – – – – 7,701 – – 7,701
Recycling of
share-based
payments
(note23) – – – – (9,074) – 9,074 –
Tax on share-
based payments – – – – – – 438 438
At 30 April 2022 3,254 89,365 (129) (2,385) 11,512 (4,198) (44,304) 53,115
Year ended 30 April 2021
Share capital
(note 21)
£’000
Share premium
(note 21)
£’000
Treasury shares
(note 21)
£’000
Other reserves
Accumulated
losses
(note 22)
£’000
Total equity
£’000
Merger reserve
(note 22)
£’000
Share-based
payments
reserve
(note 22)
£’000
Translation
reserve
(note 22)
£’000
At 1 May 2020 3,246 88,610 (20) (2,385) 9,672 (1,426) (28,500) 69,197
Loss for the year – – – – – – (35,167) (35,167)
Other
comprehensive
expense – – – – – (2,855) – (2,855)
Total
comprehensive
expense – – – – – (2,855) (35,167) (38,022)
Purchase of
treasury shares – – (109) – – – – (109)
Dividends paid – – – – – – (6,521) (6,521)
Share-based
payments
(note23)* – – – – 12,642 – – 12,642
Recycling of
share-based
payments
(note23)* – – – – (9,429) – 9,429 –
Tax on share-
based payments – – – – – – 193 193
At 30 April 2021 3,246 88,610 (129) (2,385) 12,885 (4,281) (60,566) 37,380
* These movements have been re-presented to separately identify the recycling of share-based payments.
Notes 1 to 27 are an integral part of these consolidated financial statements.
Consolidated statement of changes in equity
Year ended 30 April 2022
128 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Consolidated statement of cash flows
Year ended 30 April 2022
Note
2022
£’000
2021
£’000
Cash flows from operating activities
Cash generated from operations before adjusting items 26 41,623 65,161
Cash used to settle non-underlying items (8,464) (13,167)
Cash generated from operations 33,159 51,994
Interest paid (4,596) (5,064)
Tax paid (2,854) (3,155)
Net cash generated from operating activities 25,709 43,775
Cash flows from investing activities
Proceeds from sale of investment 227 –
Acquisition of subsidiary, net of cash acquired (3,540) (7,412)
Purchase of property, plant and equipment (3,581) (4,001)
Purchase of other intangible assets (4,300) (6,635)
Net cash flows used in investing activities (11,194) (18,048)
Cash flows from financing activities
Purchase of treasury shares – (109)
Dividends paid (13,537) (6,521)
Loan arrangement fee (626) (551)
Proceeds from borrowings 109,727 19,173
Repayment of borrowings (104,861) (17,553)
Repayment of principal of lease liabilities (13,396) (14,191)
Interest received 101 98
Capital contributions by members 2,132 4,276
Repayments to former members (1,072) (4,113)
Net cash flows from financing activities (21,532) (19,491)
Net (decrease)/increase in cash and cash equivalents (7,017) 6,236
Cash and cash equivalents at the beginning of year 34,580 28,727
Effects of foreign exchange rate changes on cash and cash equivalents 141 (383)
Cash and cash equivalents at the end of year 14 27,704 34,580
Notes 1 to 27 are an integral part of these consolidated financial statements.
DWF Group plc | Annual Report and Accounts 2022 129
Strategic report Governance Financial statements Other information
Consolidated notes to the financial statements
Year ended 30 April 2022
1 Accounting policies
1.1 General information
DWF Group plc (the ‘Company’), is a public limited company
domiciled in the United Kingdom under the Companies Act 2006,
and registered in England. The registered office is 20 Fenchurch
Street, London, EC3M 3AG.
The principal activities of the Company and its subsidiary
undertakings (together referred to as the ‘Group’) and the nature
ofthof the Group’s operations are set out in the Strategic report.
The presentational currency of the Group financial statements is
British Pounds Sterling, which is the functional currency of the
Parent Company. Foreign operations are included in accordance
with the policies set out below.
For the year ending 30 April 2022 the following subsidiary
undertakings of the Company were entitled to exemption from
auditunder s479A of the Companies Act 2006 relating to subsidiary
undertakings:
Subsidiary name
Registration
number
DWF Holdings Limited 11552868
DWF Connected Services Group Limited 10826005
DWF Connected Services Holdings Limited 10745072
DWF Connected Services Investments Limited 13396833
DWF Costs Limited 10754856
DWF Advocacy Limited 10780559
DWF Resource Limited 11271111
DWF Claims Limited 10586109
DWF Adjusting Limited 10586114
DWF Forensic Limited 10749670
DWF Ventures Limited 10749685
DWF Company Secretarial Services Limited 04176234
MOAT Pensions Limited SC134776
Greyfern Law Limited 06666404
DWF (Northern Ireland) LLP NC001393
Mindcrest UK Limited 10685700
DWF (TG) Limited 10568838
DWF 360 Limited 03556829
NewCo 4736 Limited 12130043
Zing 365 Holdings Limited 11920125
Zing Associates Limited 09322425
Zing 365 Limited 10423788
Try Solutions Limited 07424707
Marlborough Training and Consultancy Limited 04349133
1.2 Basis of accounting
The Group financial statements consolidate those of the Company
and its subsidiary undertakings and partnership undertakings.
On 31 December 2020, IFRS as adopted by the European Union
atthat date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted International Accounting Standards in its
consolidated financial statements on 1 January 2021. This change
constitutes a change in accounting framework. However, there is no
impact on recognition, measurement or disclosure in the period
reported as a result of the change in framework. The consolidated
financial statement of the Group have been prepared in accordance
with UK-adopted International Accounting Standards and with
therequirements of the Companies Act 2006 as applicable to
companies reporting under those standards.
The accounting policies set out below have, unless otherwise stated,
been applied consistently to all periods presented in the Group
financial statements.
The financial statements have been prepared on the historical cost
basis except where IFRS requires an alternative treatment.
Subsidiary and partnership undertakings
Subsidiary and partnership undertakings are entities which are
consolidated because they are controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. In assessing
control, the Group takes into consideration potential voting rights.
The financial information of subsidiary undertakings is included in
the consolidated financial statements from the date that control
commences until the date that control ceases.
Transactions eliminated on consolidation
All intra-Group assets, liabilities, equity, income, expenses and cash
flows relating to transactions between the entities within the Group
are eliminated on consolidation.
Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which control
is transferred to the Group.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the fair value of any existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed.
When the excess is negative, a gain on bargain purchase is
recognised in the income statement.
Costs related to the acquisition, other than those associated with
the issue of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at
the acquisition date. If the contingent consideration is classified as
equity, it is not re-measured and settlement is accounted for within
equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in the income statement.
1.3 Going concern
The Directors have assessed the going concern basis adopted by the
Group in the preparation of the consolidated financial statements,
taking into account the current financial position including its
available financing facilities, the business model and future outlook,
as well as the principal risks as listed in the Strategic Report. The
Directors conclude that the Group has adequate resources to
continue as a going concern across the period of assessment.
Assessment of going concern
The going concern assessment has been considered for the period
to 31 July 2023 and is carried out as follows:
• The Group’s Board-approved budget base case is used to
calculate the net debt position, liquidity and covenant compliance
and available headroom over the going concern period.
• The assessment of going concern is carried out with reference to
available financing facilities, the ability to pay debts as they fall
due and the covenants associated with the financing facilities.
• Plausible downside scenarios are modelled to quantify the impact
of an individual risk materialising over the going concern period.
130 DWF Group plc | Annual Report and Accounts 2022
Financial statements
• Mitigating actions which could be taken are identified, quantified
and included in the assessment.
• The reasonable worst case scenario, along with mitigating actions,
is then used to test that the Group would continue to have
headroom in its available financing facilities, settle liabilities as
they fall due and comply with the associated financial covenants
over the going concern period.
Financing facilities
The Group closed the year with committed banking facilities of
£127m (of which £97m were drawn). The largest of these is the
£100m revolving credit facility (‘RCF’) which was re-financed in
December 2021 to increase the facilities available to the Group.
ThisRCF has an initial maturity of three years, with two one-year
extensions. The undrawn portion of the RCF is readily accessible and
does not require any further approval for drawdown by the Group’s
banking syndicate. Associated with the facility is a further £20m
accordion facility which is available on the same terms as the original
RCF but is subject to the agreement of the banking syndicate for
drawdown. The modelled assumption is that we do not draw on this.
The facility agreement also permits the Group to obtain a further
£30m of external funding and £15m of leasing facilities, if required.
The covenant thresholds across the assessment period are set
outbelow:
Covenant Jul-22 Oct-22 Jan-23 Apr-23 Jul-23
Net Asset Value
to Consolidated
Net Borrowings 1.6x 1.6x 1.6x 1.6x 1.6x
Interest Cover 4x 4x 4x 4x 4x
Leverage 1.75x 1.75x 1.75x 1.75x 1.75x
Each of the covenants noted above is measured on a pre-IFRS 16
basis in accordance with the banking facility agreement. Interest
cover is defined as the ratio of EBITDA to interest expense, and
leverage is defined as the ratio of net debt to EBITDA. The Group’s
budget anticipates a cash inflow during the going concern period,
whereas 2021/22 reported a cash outflow although this was
because of the repayment of all remaining COVID-19 VAT deferrals
of£10.7m in the year as well as the payment of acquisition related
consideration.
Future outlook, risks and uncertainties
The going concern and viability assessments are closely linked
andtherefore the conclusions of the going concern assessment
aredirectly relevant to and should be read in conjunction with the
viability statement. The Board-approved base case combined with
the annual three-year plan have been used to measure the going
concern and future viability of the Group. This includes monitoring
net debt positions and cash management activities of the Group
andtheir effect on covenant testing. The going concern and viability
of the Group have been assessed taking into account the potential
impact of certain scenarios arising from the principal risks
anduncertainties.
In particular, the Board has considered the impact of a range of
potential M&A activities including impacts on net assets, cash flows
and covenants. In addition the assessment considers the reduction
in demand caused by either macro environmental factors,
commercial pipeline, our ability to retain or attract the correct level
of talent as well as inflationary pressures over and above the
basecase.
Mitigating actions
If faced with the reasonable worst-case scenario, the Board also
considers possible mitigating actions available to the Group to
maintain liquidity and covenant compliance. These can be swiftly
implemented should the worst-case scenario arise and include
(butare not limited to):
• freezing recruitment and a slowdown in investment in recruitment
and reward;
• reducing discretionary operating spend such as marketing
andtravel;
• reducing non-committed capital expenditure;
• revision of the existing dividend policy; and
• cost cutting measures in non-fee earning areas including an
acceleration of the execution of the Group’s real estate strategy
and a reduction in headcount.
Reverse stress test
In addition to the modelling of the above scenarios, a reverse
stresstest was conducted by the Group to assess the quantum
ofincreased inflationary pressures and downside on trading
performance that would materially impact our ability to comply
withfinancial covenants. Such a material impact is not considered
areasonable scenario to adversely impact the going concern
assessment.
Conclusion
Based on this assessment, the Directors have a reasonable
expectation that the Group has sufficient resources to continue its
operations for the period of assessment. In particular the Directors
have a reasonable expectation that it will operate under its existing
financing facilities, will comply with all covenants with adequate
headroom and settle all other liabilities as they fall due. The
Directors therefore consider it appropriate for the Group to adopt
the going concern basis in preparing these financial statements.
1.4 Foreign currency
Transactions in foreign currencies are translated to the respective
functional currencies of Group entities at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the statement of financial
position date are retranslated to the functional currency at the
foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the consolidated
income statement within administrative expenses. Non-monetary
assets and liabilities that are measured in terms of historical cost in
a foreign currency are translated using the exchange rate at the date
of the transaction.
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on consolidation, are translated
tothe Group’s presentational currency, at foreign exchange rates
ruling at the statement of financial position date. The revenues and
expenses of foreign operations are translated at an average rate for
the year where this rate approximates to the foreign exchange rates
ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve.
1.5 Alternative performance measures (‘APMs’)
In accordance with the Guidelines on APMs issued by the European
Securities and Markets Authority (‘ESMA’), additional information is
provided on the APMs used by the Group below. In the reporting of
financial information, the Group uses certain measures that are not
required under IFRS.
These additional measures provide the Group’s stakeholders
withadditional information on the performance of the business.
Themeasures are consistent with those used internally, and are
considered insightful in understanding the financial performance
ofthe Group. The Group’s APMs provide an important measure
ofhow the Group is performing by providing insight in to how the
business is managed and measured on a day-to-day basis and
achieves consistency and comparability between reporting periods.
The APMs are primarily utilised in the following ways:
DWF Group plc | Annual Report and Accounts 2022 131
Strategic report Governance Financial statements Other information
Consolidated notes to the financial statements continued
Year ended 30 April 2022
1 Accounting policies continued
• Non-statutory measures; These are often sector specific KPIs
such as lock-up days, net revenue and cost to income ratio. These
allow greater comparability of the Group’s performance within the
legal sector. EBITDA and net debt are also widely utilised within
the Group and are both regularly used among the listed legal
sector and other listed businesses.
• Adjusting items; These are adjustments to statutory profit metrics
such as profit before tax (‘PBT’) and operating profit. These are
items (both recurring and non-recurring) that are material in
nature and include, but are not limited to, costs relating to
acquisitions, disposals and significant events or programmes,
some of which span multiple years. These items are excluded
from adjusted PBT as management believe their inclusion distorts
the underlying trading performance.
• Non-underlying items; Non-underlying items, a subset of
adjusting items, are non-trading, non-cash or one-off items where
management consider the quantum or nature of such items would
distort the view of the underlying performance of the Group.
Byremoving these items the reader is better able to compare
like-for-like performance that would otherwise be hard to
determine.
The following are included by the Group in its assessment of
non-underlying items:
• Transaction expenses associated with acquisitions
• Purchase price relating to acquisitions not treated
asconsideration
• Expenses directly associated with COVID-19
• Expenses and impairment charges associated with office closures
or scale-back of operations
• Costs associated with the change of CEO; and
• Costs associated with re-financing.
A complete list of APMs is included and fully defined in the glossary
to the financial statements.
1.6 Financial instruments
Non-derivative financial instruments comprise investments, trade
and other receivables, cash and cash equivalents, trade and other
payables and interest bearing borrowings. Amounts due to
members of partnerships in the Group are also non-derivative
financial instruments and are covered in note 1.18.
Trade and other receivables
Under the Group’s business model, trade and other receivables are
held for collection of contractual cash flows and represent solely
payments of principal and interest. Trade receivables and other
receivables are recognised initially at fair value. Subsequent to initial
recognition, they are measured at amortised cost using the effective
interest method less any allowance for expected credit losses.
TheGroup applies the simplified approach in measuring expected
creditlosses.
Trade and other receivables expected to be realised in the course
ofthe Group’s operating cycle and those assets receivable within
one year from the reporting date are classified as current assets.
Allother trade and other receivables are classified as non-
currentassets.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and cash
deposits, and also include bank overdrafts. Bank overdrafts that
arerepayable on demand and form an integral part of the Group’s
cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows only.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method. Due to their short-term
nature they are not discounted.
Interest-bearing loans and borrowings
Interest-bearing borrowings are recognised initially at fair value less
incremental transaction costs. Subsequent to initial recognition,
interest-bearing loans and borrowings are stated at amortised cost
using the effective interest method.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on
financial assets.
The Group recognises lifetime expected credit losses (‘ECL’) for
tradereceivables and contract assets. The contract assets relate
tounbilled work in progress and have substantially the same risk
characteristics as the trade receivables for the same types of
contracts. The expected credit losses on these financial assets are
estimated using a provision matrix based on the Group’s historical
credit loss experience, general economic conditions and an
assessment of both the current as well as the forecast direction of
conditions at the reporting date, including the time value of money
where appropriate.
For other financial instruments, the Group recognises lifetime ECL
when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument
has not increased significantly since initial recognition, the Group
measures the loss allowance for that financial instrument at an
amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result
from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of
lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the
reporting date.
The Group writes off a financial asset when there is information
indicating that the debtor is in severe financial difficulty and there
isno realistic prospect of recovery, e.g. when the debtor has
beenplaced under liquidation or has entered into bankruptcy
proceedings. Financial assets written-off may still be subject to
enforcement activities under the Group’s recovery procedures,
taking into account legal advice where appropriate. Any recoveries
made are recognised in the income statement.
1.7 Leases
At the inception of a contract, the Group assesses whether a
contract is, or contains, a lease, which conveys the right to control
the use of an identified asset for a period of time in exchange for
consideration.
As a lessee
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
re-measurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct
costsincurred and lease payments made on or before the
commencement date, plus an estimate of the costs to dismantle
andremove the underlying asset or to restore the underlying asset
or the site on which it is located, less any lease incentives received.
Right-of-use assets are depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis.
Lease liabilities are initially measured at the present value of lease
payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less
any lease incentives receivable, variable lease payments that depend
on an index or a rate, and amounts expected to be paid under
132 DWF Group plc | Annual Report and Accounts 2022
Financial statements
residual value guarantees. The lease payments also include the
exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating
alease, if the lease term reflects the Group exercising the option
toterminate.
The Group re-measures the lease liability (and makes a corresponding
adjustment to the related right-of-use asset, or to the income
statement if the right-of-use asset carrying value has been reduced
to nil) whenever:
• the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is re-measured by discounting the revised lease
payments using a revised discount rate.
• the lease payments change due to changes in an index or rate or
achange in expected payment under a guaranteed residual value,
in which cases the lease liability is re-measured by discounting the
revised lease payments using the initial discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
• a lease contract is modified and the lease modification is not
accounted for as a separate lease, in which case the lease liability
is re-measured by discounting the revised lease payments using a
revised discount rate.
In calculating the initial present value of lease payments, the Group
uses the incremental borrowing rate specific to each lease at the
lease commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the lease
liability is measured at amortised cost using the effective interest
method. The amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments made.
Inaddition, the carrying amount of lease liabilities is re-measured if
there is a modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Extension and termination options are included in several leases
across the Group. The Group determines the lease term as the
non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be
exercised, or any period covered by an option to terminate the lease
if it is reasonably certain not to be exercised. The Group applies
judgement in evaluating whether it is reasonably certain to exercise
an option to renew or terminate a lease. Management considers
allfacts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option.
After the commencement date, the Group reassesses the lease term
if there is a significant event or change in circumstances that is
within its control and affects its ability to exercise, or not to exercise,
the option to renew or terminate the contract.
Payments associated with short-term leases, leases of intangible
assets and leases of low-value assets (with a value of less than
£5,000) are recognised on a straight-line basis as an expense in
theincome statement. Short-term leases have a term of 12 months
or less.
As a lessor
Where the Group acts as an intermediate lessor, it accounts for its
interests in the head lease and the sublease separately.
It determines at the inception of a sublease whether each sublease
is a finance or operating lease. To classify each lease, the Group
makes an overall assessment of whether the sublease transfers
substantially all of the risks and rewards of ownership of the right-of-
use asset arising from the head lease. Where this is the case, it is
classified as a finance lease. As part of this assessment, the Group
considers indicators such as whether the sublease term constitutes
a major part of the economic life of the right-of-use asset.
Amounts due from lessees under finance leases are recognised as
lease receivables at the amount of the Group’s net investment in
theleases. The Group applies the de-recognition and impairment
requirements in IFRS 9 to the net investment in the lease.
Where sublease payments are received under operating leases,
these are recognised as income on a straight-line basis over the
sublease term as part of other income.
1.8 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation and accumulated impairment losses.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to the income statement on a straight-line
basis over the estimated useful life of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
• Leasehold improvements The shorter of remaining
lease term or 10 years
• Computer equipment 4 years
• Office equipment and fixtures
andfittings
5 to 10 years
Depreciation methods, useful lives and residual values are reviewed
at each statement of financial position date.
1.9 Intangible assets
Goodwill
Goodwill is stated at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units and is not amortised
but is tested annually for impairment (note 10).
Customer relationships
The Group recognises acquired customer relationships at their fair
value at the date of acquisition less any accumulated impairment
losses. Customer relationships are amortised on a straight-line basis
over their estimated useful life.
Brand
The Group recognises acquired brands at their fair value at the date
of acquisition less any accumulated impairment losses. Brands are
amortised on a straight-line basis over their estimated useful life.
Software
Costs associated with maintaining software programmes are
recognised as an expense as incurred. Development costs that are
directly attributable to the design and testing of identifiable and
unique software products controlled by the Group are recognised
as intangible assets where the following criteria are met:
• it is technically feasible to complete the software so that it will be
available for use;
• management intends to complete and software and use or sell it;
• there is an ability to use or sell the software;
• it can be demonstrated how the software will generate probable
future economic benefits;
• adequate technical, financial and other resources to complete the
development and to use or sell the software are available; and
• the expenditure attributable to the software during its
development can be reliably measured.
Directly attributable costs that are capitalised as part of the
software include employee costs.
Capitalised development costs are recorded as intangible assets
and amortised from the point at which the asset is ready for use.
DWF Group plc | Annual Report and Accounts 2022 133
Strategic report Governance Financial statements Other information
1 Accounting policies continued
Amortisation
Intangible assets with finite lives are amortised to the income
statement, through administrative expenses, on a straight-line
basisover their estimated useful lives. The estimated useful lives
areas follows:
• Customer relationships 2 to 10 years
• Brand 2 to 9 years
• Software costs 4 years
• Capitalised development costs 3 to 4 years
1.10 Impairment
Non-financial assets
The carrying amounts of the Group’s non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. For goodwill and intangible
assets that have indefinite useful lives or that are not yet available
for use, the recoverable amount is estimated each year at the
sametime.
Cash-generating units (‘CGU’) have been determined on the basis
ofservice offering, dependencies and locations of members of the
Group. The recoverable amount of an asset or CGU is the greater of
its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing, assets
that cannot be tested individually are grouped together into the
smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows of other assets
or groups of assets (the ‘cash-generating unit’ or ‘CGU’). The goodwill
acquired in a business combination, for the purpose of impairment
testing, is allocated to CGUs that are expected to benefit from
thesynergies of the combination. For the purposes of goodwill
impairment testing, CGUs to which goodwill has been allocated
areaggregated so that the level at which impairment is tested
reflects the lowest level at which goodwill is monitored for internal
reporting purposes but not at a level higher than the Group’s
operating segment.
An impairment loss in respect of goodwill is not reversed. In respect
of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if
therehas been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
1.11 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the Group pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
pension plans are recognised as an expense in the income
statement in the periods during which services are rendered
byemployees.
Short-term benefits
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be
paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and
theobligation can be estimated reliably.
1.12 Share-based payments
The Group operates equity-settled, share-based compensation
plans, under which the business receives services from members
ofpartnerships within the Group (‘members’) and employees as
consideration for equity instruments (share awards and options) of
the Group. The fair value of the services received in exchange for the
grant of share awards is recognised as an expense. The total amount
to be expensed is determined by reference to the fair value of the
share awards and options granted, excluding the impact of any
non-market service and performance vesting conditions (for
example, remaining engaged by the entity over a specified time
period). Non-market vesting conditions are included in assumptions
about the number of share awards and options that are expected
tovest. The total amount expensed is recognised over the vesting
period, which is the period over which all of the specified existing
conditions are to be satisfied. At each statement of financial position
date, the Group revises its estimates of the number of share awards
and options that are expected to vest based on the non-market
vesting conditions. It recognises the impact of the revision to original
estimates, if any, in the income statement, with a corresponding
adjustment to the share-based payments reserve within equity.
The social security contributions in connection with the grant of the
share awards are considered separate to the grant, and the charge
will be treated as a cash-settled transaction.
The cumulative share-based payment charge held in reserves is
recycled into retained earnings when the share awards or options
lapse or are exercised.
1.13 Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds. See note 22 for
more information.
Where any Group company purchases the Company’s equity share
capital (‘treasury shares’), the consideration paid, including any
directly attributable incremental costs (net of income taxes), is
deducted from equity attributable to the Company’s equity holders
until the shares are cancelled or reissued.
1.14 Revenue recognition
Revenue
The Group generates revenue primarily by delivering professional
services to clients, with the types of services offered being similar
within each of its divisions. These services, when delivered to
individual clients, are almost always bespoke in nature. However, the
performance obligations tend to be consistent from client to client
and the two that the Group most commonly satisfies are:
• legal advice and services; and
• non-legal advice and services that are complementary to
legalservices.
As a provider of professional services, the Group generally does not
have obligations for returns, refunds or other similar obligations, nor
does it have warranties or other related obligations.
The amount of consideration the Group receives varies from both
service to service and from client to client, reflecting the bespoke
nature of the services provided. The consideration typically reflects
the skills and experience of the individuals who provide the services
as well as the availability of similar skills and experience in the wider
professional services market. These factors tend to vary from
business to business.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
134 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Consideration includes recoverable expenses. Recoverable
expenses (often referred to as disbursements) are necessarily
incurred to deliver on the Group’s contractual promises to its clients
that make the Group principal in the transaction.
The consideration the Group receives is primarily based on one of
three types of fee arrangements:
• time and materials;
• fixed fee; and
• contingent fee.
The Group adjusts its estimate of revenue throughout the
contractual period of providing services as circumstances change
and are reflected in the income statement in the period in which
thecircumstances that give rise to the revision become known.
TheGroup’s contractual arrangements comprise a single
performance obligation. Fee arrangements are constrained to
theamounts expected to be recovered in accordance with the
requirements of IFRS 15. In virtually all fee arrangements the Group
has an enforceable right to payment for services rendered and,
given the bespoke nature of the services provided, recognises
revenue over time as such services are rendered.
The Group measures progress in satisfying the performance
obligations as follows:
• For time and materials arrangements, revenue is recognised as
the work is performed as captured daily by fee earners recording
time against specific matters at contracted rates. The contracted
rates are constrained to a true recovery rate. The revenue
constraint is determined with reference to historical recovery
rates, specific agreements with clients and amounts considered
irrecoverable by fee earners.
• For contingent fee arrangements, revenue is recognised in the
same method as the time and materials arrangements above.
However, there is a further constraint based on projected
successrate.
• For fixed fee arrangements, the appropriate proportion of
revenue to be recognised is measured by assessing time incurred
to date, at an hourly rate that reflects the seniority and expertise
of each individual, as a proportion of the total expected time at
these rates for the arrangement.
The Group typically invoices its customers monthly or quarterly
inarrears, or for certain projects at the end of the engagement,
butpayment terms do vary depending on the types of services
being offered or for individual contractual agreements. As the
performance obligation is satisfied, revenue is recognised and
amounts recoverable from clients in respect of unbilled revenue
(contract assets) are simultaneously created. Deferred income
represents amounts invoiced for performance obligations which
arenot yet satisfied.
The Group has determined that no significant financing component
exists in respect of its professional services, as the period between
when the Group transfers a promised service to a client and when
the client pays for that service will be one year or less.
The majority of services performed by the Group are in respect of
contracts with an expected duration of one year or less either
because the goods or services are expected to be provided within a
12-month period or because the client and/or the Group has the
right to terminate the contract without substantive penalty upon the
delivery of written notice.
1.15 Financing income and expenses
Financing expenses comprises interest payable, unwinding of the
discount on provisions, and net foreign exchange losses that are
recognised in the income statement (see foreign currency
accounting policy – note 1.4).
Financing income comprises interest receivable on funds invested,
interest income on lease receivables and dividend income. Interest
income and interest payable is recognised in the income statement
as it accrues, using the effective interest method. Dividend income
isrecognised in the income statement on the date the entity’s right
to receive payments is established. Interest income and interest
payable is recognised in the income statement as it accrues, using
the effective interest method. Dividend income is recognised in the
income statement on the date the entity’s right to receive payments
is established.
Foreign currency gains and losses are reported on a net basis.
1.16 Taxation
Current tax
The tax expense represents the current tax relating to the Company
and other Group entities. The current tax expense is based on
taxable profits of these entities 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 current tax liability is calculated using tax rates that
have been enacted or substantively enacted by the statement of
financial position date.
Current tax assets and liabilities are offset only when there is a
legally enforceable right to set off the amounts and the Group
intends to either settle on a net basis or realise the asset and settle
the liability simultaneously.
Deferred tax
Deferred tax is provided using the balance sheet liability method
onany temporary differences between the carrying amounts for
financial reporting purposes and those for taxation purposes.
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. Such assets
and liabilities are not recognised if the temporary differences arise
from the initial recognition of goodwill.
Deferred tax liabilities are not recognised for temporary differences
arising on investments in subsidiaries where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future. Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the asset is
realised. Deferred tax assets and liabilities are offset 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.
Current tax and deferred tax for the year
Current and deferred tax are recognised in the income statement,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case,
thecurrent and deferred tax are also recognised in other
comprehensive income or directly in equity respectively. Where
current tax or deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the accounting
for the business combination.
DWF Group plc | Annual Report and Accounts 2022 135
Strategic report Governance Financial statements Other information
1 Accounting policies continued
A share of the Group’s profits is earned by the limited liability
partnerships (‘LLPs’) within the Group. The taxation on profits
earned by the LLPs is, generally, recognised as a liability borne
bythe members. The members include a corporate entity and
individual persons. The corporate member is subject to taxation
onits share of the LLPs’ profits as set out above. Taxation on the
individual persons’ share of the LLPs’ profits remains their personal
liability so neither taxation nor related deferred taxation is
accounted for in the financial information of the Group, although
payment of such liabilities is administered by the Group on behalf
ofthose members.
1.17 Dividends
Dividend distributions are recognised in the consolidated financial
statements when the shareholders’ right to receive payment is
established.
Final dividend distributions are recognised in the period in which
they are approved by the shareholders, whilst interim dividend
distributions are recognised in the period in which they are declared
and paid.
1.18 Transactions with and amounts due to members of
partnerships in the Group
Divisible profits and payments to members of partnerships in
theGroup
Members of partnerships within the Group (‘members’), under
theterms of the relevant members’ agreement, draw monthly on
account. Drawings are based on a fixed share. Any unallocated
profitafter distribution to members is included in retained earnings/
accumulated losses.
All members have a fixed share that forms part of a wider
remuneration package. This amount is reviewed on an annual basis
and is recognised within the income statement within direct costs.
The amounts that are due to the members are recognised as
amounts due to members of partnerships in the Group. See note 27.
Members’ remuneration charged as an expense
Members’ remuneration charged as an expense is recognised
withindirect costs totalling £43.7m (2021: £41.4m). This has been
calculated based on the Total Fixed Annual Compensation Amount,
which is the members’ annual fixed profit share plus, for some
members, a nominal salary. Any dividend income received as
Shareholders and amounts from participation in share incentive
plans are excluded from members’ remuneration charged as
anexpense.
1.19 Changes in accounting policies and disclosures
New and amended standards adopted by the Group
There are no new IFRS or IFRIC Interpretations that are effective for
the first time this financial year which have a material impact on
theGroup.
New standards, amendments and interpretations issued but not
effective for the financial year beginning 1 May 2021 and not
adopted early
There are no other IFRS or IFRIC Interpretations that are not yet
effective that would be expected to have a material impact on
theGroup.
1.20 Accounting estimates and judgement
The preparation of the financial statements under IFRS requires
management to make judgements, estimates and assumptions
which affect the financial information. The estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant and are reviewed on an ongoing
basis. The critical judgements and key estimates applicable to these
financial statements are set out below.
Critical judgement in applying the Group’s accounting policies
Control over the ABS and non-ABS groups
Regulations in certain jurisdictions in which the Group is
represented allow Alternative Business Structures (‘ABS’) where
legalfirms can be owned by non-lawyers. This is not the case in
other jurisdictions (‘non-ABS’). As a result, DWF LLP, the head of the
non-ABS group, is not directly owned by any entity within the ABS
group (which includes the ultimate parent, DWF Group plc).
Consolidation of DWF LLP and the other non-ABS entities depends
on the assessment of whether a member of the ABS group is
exposed, or has rights, to variable returns from its involvement with
such entity and has the ability to affect those returns through its
power over such entity. Therefore, judgement is required in this
assessment to determine if the non-ABS entities should be
consolidated in the Group accounts.
A Governance Deed exists between DWF Law LLP (as representative
of the ABS group) and DWF LLP. This Governance Deed mandates
that the executive Board of both DWF Law LLP and DWF LLP be the
same, bestowing DWF Law LLP the ability to affect returns of DWF
LLP and meaning that DWF Law LLP’s members have rights to
variable returns from DWF LLP. On this basis, DWF LLP and the other
non-ABS entities are consolidated in these financial statements.
Key sources of estimation uncertainty
The key assumption concerning the future, and other key source
ofestimation uncertainty at the reporting period that may have
asignificant risk of causing material adjustment of the carrying
amounts of assets and liabilities within the next financial year,
isdiscussed below.
Revenue recognition and valuation of unbilled revenue
The amount of variable consideration to be constrained in a time
and material contract and the stage of completion of fixed fee
contracts are key sources of estimation uncertainty. When services
are invoiced, the uncertainty is removed so this applies to the
unbilled revenue only, recorded as amounts recoverable from
clients in respect of unbilled revenue in the statement of financial
position (the contract asset). Respective amounts are provided in
note 13.
For the estimates of revenue constraint and stage of completion,
theGroup estimates the value of the services provided to date as
aproportion of the expected revenue under the contract. The
expected revenue under the contract is either the anticipated level
of price concession or the fixed fee. These estimates are based on
specific client agreements, historical performance and forward-
looking factors including improving efficiencies.
In valuing the Group’s unbilled revenue a per-hour recovery rate is
used. A 5% increase in the per-hour recovery rate would lead to a
£3,665,564 increase in the carrying value of amounts recoverable
from clients in respect of unbilled revenue and a £3,665,564
increase in revenue, profit before tax and equity. A 5% decrease
inthe per-hour recovery rate would lead to an equal and opposite
impact on the carrying value of amounts recoverable from clients
inrespect of unbilled revenue and revenue.
1.21 Re-presentation of comparative period
The consolidated statement of financial position has been re-
presented for the comparative period to present the IFRS 16
right-of-use assets as a standalone financial statement line item in
order to provide users with clearer information on the leased assets.
Note 11 now comprises solely the property, plant and equipment
information, and Note 12 comprises solely IFRS 16 right-of-use
assetinformation.
This note is intended to disclose material re-presentations within
the primary financial statements. For other re-presentations within
note disclosures, explanations have been provided within the note
that has been changed.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
136 DWF Group plc | Annual Report and Accounts 2022
Financial statements
2 Alternative performance measures
APMs are not intended to supplant IFRS measures but are included in response to investor feedback or to provide readers of the financial
statements with additional understanding of the underlying trading performance of the Group.
APMs are fully defined and information as to why they are useful is provided in the glossary to the financial statements on pages 169 to 173.
Adjusted profit before tax reconciles to profit/(loss) before tax as follows:
2022
£’000
2021
£’000
Profit/(loss) before tax 22,316 (30,600)
Adjusting items:
Amortisation of intangible assets – acquired 4,655 4,609
Impairment of intangible assets 2,966 1,411
Impairment of tangible and right of use assets 627 3,134
Impairment of investments – 50
Non-underlying items 1,224 27,101
Share-based payments expense 9,609 28,510
Gain on investment – (23)
Total of adjusting items 19,081 64,792
Adjusted PBT 41,397 34,192
Adjusted PBT reconciles to profit/(loss) before tax with reconciling items by nature as follows:
2022
£’000
2021
£’000
Profit/(loss) before tax 22,316 (30,600)
Office closures and scale-backs (238) 14,898
Acquisition-related expenses 9,564 20,743
DWF RCD modification impact – 13,796
Change of CEO – 1,011
Impact of COVID-19 – 1,011
Other share-based payment expenses 9,609 13,333
Refinancing costs 146 –
Adjusted PBT 41,397 34,192
Cash used to settle non-underlying items includes £3.8m (FY2021: £2.3m) relating to closures and £4.6m (FY2021: £6.9m) relating to the
remuneration element of purchase price payments for acquisitions.
Non-underlying items are set out in the table below:
2022
£’000
2021
£’000
Acquisition-related advisory fees – successful a 336 31
Acquisition-related advisory fees – aborted b – (544)
Acquisition-related expense c 1,104 15,222
COVID-19-related costs d – 1,011
Closure and scale-back of operations e (362) 10,370
Costs associated with the change of CEO f – 1,011
Non-underlying items within operating profit 1,078 27,101
Non-underlying finance expense g 146 –
Total non-underlying items 1,224 27,101
a. The Group periodically considers and analyses potential acquisition targets and recognises there is inherent complexity and risk
associated with acquisitions. The Group manages this by employing external professional advisors to perform legal, financial, commercial
and tax due diligence on targets. These costs relate to opportunities the Group identifies and pursues, of which a portion result in
successful acquisitions. Acquisition fees in the current period relate to the acquisitions of Zing and BCA.
b. No fees have been incurred in the current period for aborted acquisitions. Prior year aborted acquisition-related advisory fees are
releases of accruals for work done in FY2020 that were credited following the decision to abort the transaction.
DWF Group plc | Annual Report and Accounts 2022 137
Strategic report Governance Financial statements Other information
2 Alternative performance measures continued
c. Acquisition-related expense relates to the remuneration expense from the acquisition of Mindcrest in FY2020. Payments to the sellers
ofMindcrest were deemed to be remuneration (and not consideration) under IFRS 3, and therefore expensed over the deemed service
period rather than included in goodwill. As these costs are not considered recurring and ceased in February 2022, they have been
included within adjusting items in order to give greater clarity of underlying trading performance. The prior year comparator is of the
same nature but relates to both the Mindcrest and RCD acquisitions, including the costs relating to the modification of the RCD
acquisition agreement (see note 9).
d. COVID-19 related costs were incurred between March 2020 and October 2020 and relate to one-off additional expenses for IT support
and sanitisation of offices that covers the period of the first UK national lockdown. As the Group was not making use of its UK offices
during this period and was already supporting agile working across its workforce, these costs are one-off and specifically as a result of
COVID -19.
e. Closure and scale-back of operations in the current year relate to the scale-back of the operations in Australia, which began in FY2021,
and Germany. The credit in the current year principally reflects working capital provisions made for Germany, offset by the reversal of
aprovision made for Australia in FY2021. The prior year costs relate to the Board decision to close the Singapore and Brussels offices
andto scale back the operations in Dubai and Australia. These costs comprise people and supplier exit expenses as a result of the
decision taken.
f. Costs of the prior year relate to the one-off costs for the change in CEO.
g. These costs are associated with the re-financing and include professional fees incurred that are significant in value and by their nature
are not recurring annually. More detail around the refinancing can be found in note 17.
The cost to income ratio is used to assess the levels of operational gearing in the Group. The cost to income ratio is defined as
administrative expenses less adjusting items and divided by net revenue and is calculated as follows:
2022
£’000
2021
£’000
Net revenue 350,242 338,130
Administrative expenses and impairment 153,257 197,415
Total of adjusting items (19,081) (64,792)
Less: re-financing costs included in adjusting items 146 –
Adjusted administrative expenses 134,322 132,623
Cost to income ratio 38.4% 39.2%
3 Operating segments
Reporting segments
In accordance with IFRS 8: Operating Segments (‘IFRS 8’), the Group’s operating segments are based on the operating results reviewed
bythe executive directors of the Board, who represent the chief operating decision maker (‘CODM’). The Group has the following three
strategic divisions, which are its reportable segments. These divisions offer different services and are reported separately because of
different specialisms within teams in the business group.
The following summary describes the operations of each reportable segment:
Reportable segment Operations
Legal Advisory Services Premium legal advice, commercial intelligence and relevant industry experience.
Connected Services Collection of products and business services that enhance and complement our legal offerings.
Mindcrest Outsourced and process-led legal services, designed to standardise, systemise, scale and optimise
legal workflows.
The revenue, net revenue and gross profit are attributable to the principal activities of the Group.
Effective from 1 May 2021, the Group changed from five strategic divisions to three more streamlined, consistent and efficient global
divisions that match the Group’s strategy.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
138 DWF Group plc | Annual Report and Accounts 2022
Financial statements
The comparative period table below has been re-presented to reflect the current divisional structure.
For year ended 30 April 2022
Legal
Advisory
£’000
Connected
Services
£’000
Mindcrest
£’000
Total
£’000
Revenue 355,063 34,181 26,808 416,052
Recoverable expenses (63,110) (324) (2,376) (65,810)
Net revenue 291,953 33,857 24,432 350,242
Direct costs (138,729) (18,828) (11,775) (169,332)
Gross profit 153,224 15,029 12,657 180,910
Gross margin % 52.5% 44.4% 51.8% 51.7%
Administrative expenses (146,691)
Trade receivables impairment (2,973)
Other impairment (3,593)
Operating profit 27,653
Net finance expense (3,664)
Net interest expense on leases (1,673)
Profit before tax 22,316
Taxation (2,029)
Profit for the year 20,287
For year ended 30 April 2021 – Re-presented
Legal
Advisory
£’000
Connected
Services
£’000
Mindcrest
£’000
Total
£’000
Revenue 345,559 28,752 26,637 400,948
Recoverable expenses (60,233) (329) (2,256) (62,818)
Net revenue 285,326 28,423 24,381 338,130
Direct costs (137,487) (16,225) (12,637) (166,349)
Gross profit 147,839 12,198 11,744 171,781
Gross margin % 51.8% 42.9% 48.2% 50.8%
Administrative expenses (187,471)
Trade receivables impairment (5,349)
Other impairment (4,595)
Operating loss (25,634)
Net finance expense (2,682)
Net interest expense on leases (2,284)
Loss before tax (30,600)
Taxation (4,567)
Loss for the year (35,167)
There are no inter-segmental revenues which are material for disclosure. Administrative expenses represent indirect costs that are not
specifically allocated to segments.
Non-current assets, revenue and net revenue by region
The UK is the Group’s country of domicile and the Group generates the majority of its revenue from external clients in the UK.
Thegeographical analysis of revenue and net revenue is on the basis of the country of origin in which the client is invoiced.
DWF Group plc | Annual Report and Accounts 2022 139
Strategic report Governance Financial statements Other information
3 Operating segments continued
The Group’s non-current assets, net revenue and revenue by geographical region are as follows:
Non-current assets Revenue Net revenue
2022
£’000
2021
£’000
2022
£’000
Re-presented*
2021
£’000
2022
£’000
Re-presented*
2021
£’000
UK 57,141 71,758 310,381 290,966 250,584 234,824
Spain 23,935 26,087 36,515 33,530 36,515 33,530
Asia 14,063 15,701 11,107 9,260 8,838 7,976
Rest of World 26,938 17,408 58,049 67,192 54,305 61,800
Total allocated to geographical regions 122,077 130,954 416,052 400,948 350,242 338,130
Deferred tax assets 3,938 4,649
Non-current other trade receivables 1,464 –
Investments – 227
Total 127,479 135,830
* The revenue and net revenue for 2021 have been re-presented for consistent comparison with 2022 to reflect a change in the allocation of which countries were
included in Asia and Rest of World.
Total assets and liabilities for each reportable segment are not provided to the CODM and therefore not presented.
4 Operating profit and auditor’s remuneration
2022
£’000
2021
£’000
Recognised in the income statement
Impairment of intangible assets 2,966 1,411
Amortisation of intangible assets – acquired 4,655 4,609
Impairment of property, plant and equipment and right-of-use assets 627 3,134
Impairment of investment – 50
Gain on sale of investment – (23)
Non-underlying items (less: non-underlying finance expense) 1,078 27,101
Share-based payments expense (note 23) 9,609 28,510
Total of adjusting items within operating profit 18,935 64,792
Members’ remuneration charged as an expense 43,670 41,361
Net foreign exchange gain (1,856) (55)
Amortisation of intangible assets – software and capitalised development costs 4,251 2,244
Depreciation of tangible assets 2,960 4,745
Depreciation of right-of-use assets 12,737 11,977
Gain on disposal of leases – (775)
Auditor’s remuneration
Audit of the Group financial statements 510 369
Audit fees in respect of prior periods – 99
Total audit fees 510 468
Amounts payable to the Company’s auditor and its associates in respect of:
Audit of financial information of subsidiaries, subsidiary undertakings and partnerships of the
DWFGroupplc 125 158
Other assurance services – 44
Other services pursuant to legislation or regulation 105 107
Total fees 740 777
Consolidated notes to the financial statements continued
Year ended 30 April 2022
140 DWF Group plc | Annual Report and Accounts 2022
Financial statements
5 Net finance expense
2022
£’000
2021
£’000
Finance income
Interest receivable 101 98
101 98
Finance expense
Interest payable on bank borrowings 2,300 1,767
Other interest payable 54 47
Bank and other charges 1,265 966
Non-underlying finance expense 146 –
3,765 2,780
Net finance expense 3,664 2,682
Net interest expense on leases
Interest expense on lease liabilities 1,673 2,284
1,673 2,284
6 Taxation
2022
£’000
2021
£’000
UK corporation tax on profit/loss 5,639 5,582
Foreign tax on profit 2,822 1,576
Adjustments in respect of prior periods (5,443) (129)
Current tax expense 3,018 7,029
Deferred tax credit (2,354) (2,468)
Adjustments in respect of prior periods 1,365 6
Total deferred tax credit (989) (2,462)
Total tax charge for the year 2,029 4,567
The effective tax rate is lower (2021: higher) than the average rate of corporate tax in the UK of 19% (2021: 19%), and excluding prior year
adjustments the effective tax rate is higher than the average rate of corporate tax in the UK. The difference is explained below:
2022
£’000
2021
£’000
Profit/(loss) before taxation 22,316 (30,600)
Tax on Group profit/(loss) at standard UK corporation tax rate of 19% (2021: 19%) 4,240 (5,814)
Foreign tax rate differences (4) (128)
Non-deductible expenses 706 7,620
Temporary differences on intangible assets – –
Adjustments in respect of prior periods (4,079) (123)
Brought forward tax losses utilised (263) (84)
Tax losses not recognised as assets 2,060 2,622
Impact of share price on expected tax deduction 203 474
Effect on deferred tax of change in corporation tax rate (834) –
Group total tax charge for the year 2,029 4,567
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase to 25%. The proposal to
increase the rate to 25% was substantively enacted on 24 May 2021, therefore the relevant deferred tax balances have been remeasured.
The impact of the change in tax rate has been recognised in tax expense in the income statement, except to the extent that it relates to
items previously recognised outside the income statement.
The reported tax charge for the year, excluding prior year adjustments, is £6.1m on a profit before tax of £22.3m, representing an effective
rate of tax of 27.4%. The effective tax rate was higher than the UK statutory tax rate primarily due to tax losses that have not been
recognised as deferred tax assets (increasing the tax charge by £2.1m) and the tax effect of non-tax deductible expenses (increasing the tax
charge by £0.7m) offset by the effect on deferred tax resulting from the change in the UK corporation tax rate from 19% to 25% effective
from 1 April 2023 (reducing the tax charge by £0.8m).
DWF Group plc | Annual Report and Accounts 2022 141
Strategic report Governance Financial statements Other information
6 Taxation continued
The Group also booked prior year tax adjustments of a net credit of £4.1m. Those adjustments arise principally as a result of (a) increased
claims of the departing Australian partners on the Group’s UK profit pool following the restructuring of the Group’s Australian business in
FY2021 reducing the profits subject to UK corporation tax (£5.1m), offset by (b) revaluations of the Group’s deferred tax assets relating to
taxdepreciation timing differences and expected tax deductions for share based payments as at 30 April 2021 (£1.4m).
7 Dividends
Distributions to owners of the parent in the year:
2022
pence per share
2021
pence per share
Final dividend recognised as distributions in the year 3.00 0.75
Interim dividend recognised as distributions in the year 1.50 1.50
Total dividend paid in the year 4.50 2.25
Final dividend proposed 3.25 3.00
2022
£’000
2021
£’000
Final dividend recognised as distributions in the year 9,008 2,162
Interim dividend recognised as distributions in the year 4,529 4,359
Total dividend paid in the year 13,537 6,521
Final dividend proposed 10,574 9,737
The Board recommended a final dividend for the year ended 30 April 2022 of 3.25 pence per share on 20 July 2022 which is subject to
Shareholder approval at the Annual General Meeting on 28 September 2022. If approved by the Shareholders, the dividend will be paid
on7 October 2022 to all shareholders on the Register of Members on 9 September 2022.
8 Earnings per share
2022
£’000
2021
£’000
Profit/(loss) for the year for the purpose of basic earnings per share 20,287 (35,167)
Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share 298,898,991 294,392,422
Effect of dilutive potential ordinary shares:
Future exercise of share awards and options 13,639,188 17,067,508
Weighted average number of ordinary shares for the purposes of diluted earnings per share 312,538,179 311,459,930
Earnings/(loss) per share attributable to the owners of the parent:
Basic earnings per share (p) 6.8 (11.9)
Diluted earnings per share (p) 6.5 *(11.9)
* For the year ended 30 April 2021, potential ordinary shares of 17,067,508 are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the
loss per share, and hence have been excluded.
Adjusted basic and adjusted diluted earnings per share are APMs (as defined in the glossary on pages 169 to 173) and have been calculated
using profit/(loss) for the purpose of basic earnings share adjusted for total adjusting items and the tax effect of those items.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
142 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Adjusted basic and adjusted diluted earnings per share may be reconciled to basic earnings per share as follows:
2022
£’000
2021
£’000
Profit/(loss) for the year 20,287 (35,167)
Add/(remove):
Total of adjusting items (note 2) 19,081 64,792
Tax effect of adjustments above (4,651) (5,503)
Adjusted profit for the purpose of adjusted earnings per share 34,717 24,121
Number Number
Weighted average number of ordinary shares for the purposes of adjusted basic earnings per share 298,898,991 294,392,422
Ordinary shares for the purposes of adjusted diluted earnings per share 325,352,865 324,554,653
Adjusted basic earnings per share (p) 11.6 8.2
Adjusted diluted earnings per share (p) 10.7 7.4
Shares held in trust are issued shares that are owned by the Group’s employee benefit trusts for future issue to employees as part of share
incentive schemes. These are recognised on consolidation as treasury shares. The future exercise of share awards and options is the dilutive
effect of share awards granted to employees that have not yet vested.
Share held in trust are deducted from the weighted average number of ordinary shares for basic earnings per share. For its adjusted basic
measure, the Group uses the weighted average number of ordinary shares.
The definitions of adjusted basic earnings per share and adjusted diluted earnings per share can be found in the glossary to these
financialstatements.
9 Acquisitions of subsidiaries and transactions related to previous acquisitions
Acquisitions in the year to 30 April 2022
Two acquisitions were made in the year; Zing 365 Holdings Limited (‘Zing’) and BCA Claims and Consulting Limited (‘BCA’). Details of the
acquisitions are as follows:
Country of incorporation Nature of activity Date of acquisition
Consideration
£’000
Percentage
ownership
Zing UK Training and compliance 24 May 2021 1,157 100%
BCA Canada Claims and adjusting 25 May 2021 2,297 100%
Zing is a compliance training business based in Bristol, and was purchased to support growth in the Connected Services division through
offering additional services to the Group’s clients. BCA is a market-leading claims handling business based in Vancouver, acquired to
increase the Group’s presence in the local market.
The fair values of the assets and liabilities and the associated goodwill arising from the acquisitions are as follows:
Zing
£’000
BCA
£’000
Intangible assets 659 1,064
Trade and other receivables 123 524
Cash and cash equivalents 69 148
Trade and other payables (276) (158)
Loans and borrowings (331) –
Deferred consideration (341) –
Deferred tax liability (149) (282)
Net (liabilities)/assets acquired (246) 1,296
Purchase consideration 1,157 2,297
Purchase consideration satisfied by:
Initial cash consideration 394 884
Deferred cash consideration – 1,413
Shares issued to Zing/BCA Shareholders 763 –
Goodwill 1,403 1,001
Of the £2.3m consideration for BCA, £1.4m is deferred and payable over two years post-acquisition. This is not contingent on future
performance targets. During the period £0.61m of deferred consideration has been paid.
DWF Group plc | Annual Report and Accounts 2022 143
Strategic report Governance Financial statements Other information
9 Acquisitions of subsidiaries and transactions related to previous acquisitions continued
The goodwill is attributable to the benefits of operating two already well-established businesses in the relevant sector and the synergies
that are expected to be achieved from incorporating the businesses into the Group’s operations. As the purchases were not made with any
qualifying intellectual property, all goodwill acquired is non-tax deductible.
The following intangible assets were recognised at acquisition. These have been measured at their fair value through the multi-period
excess earnings method (customer relationships) and royalty relief method (brand).
Zing
£’000
BCA
£’000
Intangible assets – brands – 248
Intangible assets – customer relationships 659 816
Deferred tax (149) (282)
Total fair value on acquisition 510 782
Cash flows arising from the acquisition were as follows:
Zing
£’000
BCA
£’000
Purchase consideration (394) (884)
Cash and cash equivalents acquired 69 148
Total fair value on acquisition (325) (736)
Deferred consideration paid in the year – (612)
Net cash outflow (325) (1,348)
The table below outlines the revenue and PBT of the acquirees since the acquisition date, which is included in the consolidated statement of
comprehensive income for the year, and the annualised revenue and PBT of the acquirees had the acquisition dates for the business
combinations been at the beginning of the year:
Revenue
contributed
post-acquisition
£’000
PBT contributed
post-acquisition
£’000
Revenue in year
of acquisition
£’000
PBT in year of
acquisition
£’000
Zing 750 38 819 41
BCA 1,779 43 1,939 47
Transaction costs comprised mainly advisor fees, including financial, tax and legal due diligence. These are all included within administrative
expenses (non-underlying items) within note 2.
Acquisitions in the year to 30 April 2021
There were no acquisitions during the year.
On 22 January 2021 DWF Group plc and the original sellers of Rousaud Costas Duran S.L.P. (‘RCD’), a Spanish subsidiary, mutually agreed
tomodify the acquisition agreement and related documents (‘RCD Documents’) entered into on 20 December 2019 to help facilitate the
integration of DWF-RCD into the wider Group as part of moving to the new operating model effective from 1 May 2021.
Full details of the modification can be found in the Annual Report and Accounts 2021 at www.dwfgroup.com.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
144 DWF Group plc | Annual Report and Accounts 2022
Financial statements
10 Intangible assets
Goodwill
£’000
Acquired
External
software
costs
£’000
Capitalised
development
costs
£’000
Total
£’000
Customer
relationships
£’000
Brand
£’000
Cost
At 1 May 2021 11,141 35,608 1,633 4,322 11,311 64,015
Additions – internally developed – – – – 2,854 2,854
Additions – externally purchased 2,403 1,475 248 1,446 – 5,572
Disposals – – – (354) – (354)
Asset transfers – – – 1,347 – 1,347
Effect of movements in foreign exchange 490 (271) 52 1 – 272
At 30 April 2022 14,034 36,812 1,933 6,762 14,165 73,706
Amortisation and impairment
At 1 May 2021 1,357 6,128 1,041 1,587 4,729 14,842
Amortisation for the year – 3,945 711 1,593 2,658 8,907
Disposals – – – (94) – (94)
Impairment – 2,955 – 11 – 2,966
Asset transfers – – – 1,347 – 1,347
Effect of movements in foreign exchange – 104 30 – 134
At 30 April 2022 1,357 13,132 1,782 4,444 7,387 28,102
Net book value
At 30 April 2022 12,677 23,680 151 2,318 6,778 45,604
At 1 May 2021 9,784 29,480 592 2,735 6,582 49,173
Goodwill
£’000
Acquired
External
software
costs
£’000
Capitalised
development
costs
£’000
Total
£’000
Customer
relationships
£’000
Brand
£’000
Cost
At 1 May 2020 11,691 35,211 1,685 1,923 7,083 57,593
Additions – internally developed – – – – 4,228 4,228
Additions – externally purchased – – – 2,407 – 2,407
Disposals – – – (10) – (10)
Effect of movements in foreign exchange (550) 397 (52) 2 – (203)
At 30 April 2021 11,141 35,608 1,633 4,322 11,311 64,015
Amortisation and impairment
At 1 May 2020 1,356 1,351 159 1,007 3,066 6,939
Amortisation for the year – 3,695 914 581 1,663 6,853
Disposals – – – (10) – (10)
Impairment – 1,409 – 2 – 1,411
Effect of movements in foreign exchange 1 (327) (32) 7 – (351)
At 30 April 2021 1,357 6,128 1,041 1,587 4,729 14,842
Net book value
At 30 April 2021 9,784 29,480 592 2,735 6,582 49,173
At 1 May 2020 10,335 33,860 1,526 916 4,017 50,654
Individual intangible assets that are material to the financial statements are set out below:
• Customer relationships – Spain: Net book value at 30 April 2022 £19.5m (2021: £23.0m) – remaining amortisation period is 8 years
• Customer relationships – Mindcrest: Net book value at 30 April 2022 £0.8m (2021: £4.1m) – remaining amortisation period is 8 years
• Customer relationships – Poland: Net book value at 30 April 2022 £2.2m (2021: £2.3m) – remaining amortisation period is 7 years
DWF Group plc | Annual Report and Accounts 2022 145
Strategic report Governance Financial statements Other information
10 Intangible assets continued
Goodwill
Goodwill considered significant in comparison to the Group’s total carrying amount of such assets has been allocated to CGUs or groups of
CGUs as follows:
2022
£’000
2021
£’000
Mindcrest (note 3) 9,127 8,569
Other individually immaterial CGUs 3,550 1,215
12,677 9,784
The recoverable amounts of the CGUs are determined from value in use calculations. The calculations have been based on a discounted
cash flow model covering a period of five years using forecast revenues and costs, extended to perpetuity. The inputs into the model
appropriately consider the relevant market maturity and local factors. The first year of the forecast is established from the budget for
FY2023 which is underpinned by the business plan that has been signed off by the Board. Cash flows for FY2023 through to FY2026 have
been included on a consistent basis with the Board approved strategy. In each case, the calculations use a long term growth rate of 2%
(2021: 2%) consistent with the sector average and a pre-tax discount rate of 10-12% (2021: 10-11%). These pre-tax discount rates reflect
current market assessments for the time value of money and the specific risks associated with each CGU. The long-term growth rates used
are based on management’s expectations of future changes in the markets for each CGU.
Goodwill that has been allocated to other individually immaterial CGUs in the table above is monitored at a lower level than operating
segment. Significant headroom exists for each CGU. No reasonable worst-case scenario gives rise to a material impairment risk.
Customer relationships
The impairment charge of £3.0m includes £3.0m relating to the impairment of customer relationship assets which were recognised on
acquisition of Mindcrest in FY2020. The impairment trigger, and subsequent reduction in value of the associated intangible asset, is due to
Mindcrest delivering services under certain contracts in an increasingly efficient manner and passing those savings on to the customers
whilst maintaining a consistent gross margin percentage. The scale of the efficiencies gained and the resulting decrease in absolute
marginwas not anticipated as part of the valuation methodology at the point of the acquisition. The recoverable amount for the customer
relationship asset has been determined based on fair value less cost of disposal as at 30 April 2022. The fair value calculation was based
oncash flow projections from financial budgets covering a one year period, with a degradation rate applied for the following six years (the
remaining useful economic life). The post-tax discount rate applied to cash flow projections is 9%, and cash flows have assumed degradation
at 2% per annum. It was concluded that the value in use did not exceed the fair value less cost of disposal. The remaining carrying amount as
at 30 April 2022 was £0.8m. The impairment charge is recorded within other impairment in the income statement.
11 Property, plant and equipment
Leasehold
improvements
£’000
Office equipment
and fixtures and
fittings
£’000
Computer
equipment
£’000
Total
£’000
Cost
At 1 May 2021 16,179 15,366 38,499 70,044
Additions 508 1,169 1,903 3,580
Disposals (669) (448) (1,584) (2,701)
Asset transfers 2,130 (2,130) (1,347) (1,347)
Effect of movements in foreign exchange 22 (19) 20 23
At 30 April 2022 18,170 13,938 37,491 69,599
Accumulated depreciation
At 1 May 2021 13,287 8,235 35,907 57,429
Charge for the year 778 1,029 1,153 2,960
Disposals (463) (129) (608) (1,200)
Impairment 402 84 17 503
Asset transfers 46 (46) (1,347) (1,347)
Effect of movements in foreign exchange 16 (10) 9 15
At 30 April 2022 14,066 9,163 35,131 58,360
Net book value
At 30 April 2022 4,104 4,775 2,360 11,239
At 1 May 2021 2,892 7,131 2,592 12,615
The impairment expense includes £0.5m relating to asset write-offs following the scale-back of operations in Australia and Germany
(seenote 2).
Consolidated notes to the financial statements continued
Year ended 30 April 2022
146 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Leasehold
improvements
£’000
Office equipment
and fixtures and
fittings
£’000
Computer
equipment
£’000
Re-presented
(note 1.21)
Total
£’000
Cost
At 1 May 2020 16,782 12,282 39,838 68,902
Additions 59 3,310 632 4,001
Disposals (666) (232) (1,964) (2,862)
Effect of movements in foreign exchange 4 6 (7) 3
At 30 April 2021 16,179 15,366 38,499 70,044
Accumulated depreciation
At 1 May 2020 12,736 7,188 34,860 54,784
Charge for the year 935 919 2,891 4,745
Disposals (392) (232) (1,964) (2,588)
Impairment – 370 128 498
Effect of movements in foreign exchange 8 (10) (8) (10)
At 30 April 2021 13,287 8,235 35,907 57,429
Net book value
At 30 April 2021 2,892 7,131 2,592 12,615
At 1 May 2020 4,046 5,094 4,978 14,118
12 Right-of-use assets
Leases as a lessee
Property
£’000
Equipment
£’000
Re-presented
(note 1.21)
Total
£’000
Right-of-use assets
At 1 May 2020 69,615 42 69,657
Additions 14,258 2,315 16,573
Depreciation (11,712) (265) (11,977)
Impairment (2,832) – (2,832)
Disposals (4,061) – (4,061)
Remeasurement adjustment 2,367 – 2,367
Effect of movements in foreign exchange (562) 1 (561)
At 30 April 2021 67,073 2,093 69,166
Additions 10,467 – 10,467
Depreciation (12,264) (473) (12,737)
Impairment (124) – (124)
Disposals (1,110) – (1,110)
Remeasurement adjustment (1,156) – (1,156)
Effect of movements in foreign exchange 729 (1) 728
At 30 April 2022 63,615 1,619 65,234
The impairment expense during the year includes £1.2m relating to the scale-backs of operations in Australia and Germany (see note 2).
Theremeasurement adjustment relates to the impact of term and rent changes on property leases during the year.
Leases as a lessor
During FY2022, the Group has sub-leased property in Australia. In the recognition of the lease receivables pertaining to the sub-leased
property, the Group has reversed impairment of £1.0m (2021: £nil) which was previously recorded against the right-of-use assets.
DWF Group plc | Annual Report and Accounts 2022 147
Strategic report Governance Financial statements Other information
13 Trade and other receivables
2022
£’000
*Re-presented
2021
£’000
Current
Trade receivables 88,949 91,185
Amounts recoverable from clients in respect of unbilled revenue 71,958 66,671
Unbilled disbursements 7,982 9,437
Contract assets 79,940 76,108
Trade receivables and contract assets 168,889 167,293
Other receivables 2,216 2,890
Amounts due from Members of partnerships 2,238 2,008
Lease receivables 432 –
Reimbursement asset 4,040 852
Prepayments 12,359 10,463
190,174 183,506
Non-current
Other receivables 938 –
Lease receivables 526 –
1,464 –
The comparative year has been re-presented so as to split out the Amounts due from Members of partnerships from other receivables,
inorder to provide clearer information as to the nature of the balance.
The reimbursement asset is attributable to the FOIL provision and the professional indemnity provision (see note 18).
Prepayments include £nil (2021: £1.1m) relating to acquisition-related remuneration expense.
Ageing of trade receivables, amounts recoverable from clients in respect of unbilled revenue and unbilled disbursements
2022
£’000
2021
£’000
Trade receivables not past due 14,794 22,235
Trade receivables past due
0 – 90 days 59,876 53,271
91 – 180 days 8,846 9,417
181 – 270 days 3,337 4,597
271 – 365 days 2,366 3,603
More than 365 days 11,459 11,093
Gross trade receivables 100,678 104,216
Amounts recoverable from clients in respect of unbilled revenue 71,958 66,671
Unbilled disbursements 7,982 9,437
Expected credit losses (8,588) (11,192)
Other impairment provisions (3,141) (1,839)
Total trade receivables and contract assets 168,889 167,293
Lifetime expected credit losses are used to measure the loss allowance. These balances are held against trade receivables, amounts
recoverable from clients in respect of unbilled revenue and unbilled disbursements. Other impairment provisions are applied against the
trade receivables which are not based on the average expected credit loss rates presented below. The other categories of trade and other
receivables do not contain impaired assets.
Expected credit loss rates
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics
and the days past due. The contract assets relate to unbilled revenue and have substantially the same risk characteristics as the trade
receivables for the same types of contracts.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
148 DWF Group plc | Annual Report and Accounts 2022
Financial statements
The average expected credit loss rates for trade receivables and contract assets are presented below.
Group rates Spain rates
2022 2021 2022 2021
0 – 90 days 0.5% 1.7% 0.9% 0.9%
91 – 180 days 3.4% 6.6% 4.2% 4.2%
181 – 270 days 10.5% 14.3% 13.1% 13.1%
271 – 365 days 19.9% 25.5% 20.7% 20.7%
More than 365 days 50.6% 62.4% 45.0% 45.0%
Movement in provision for impairment
2022
£’000
2021
£’000
At 1 May 13,031 11,871
Provision utilised and other movements (4,275) (4,189)
Charges to income statement 2,973 5,349
At 30 April 11,729 13,031
Other movements include expected credit loss provisions acquired from business combinations in the year of £61,500.
Trade receivables, unbilled disbursements and contracts assets are written off where there is no reasonable expectation of recovery. For
trade receivables and unbilled disbursements, impairment losses are presented as net impairment losses within operating profit whereas
contract asset impairment losses are presented as a reduction in revenue. Subsequent recoveries of amounts previously written off are
credited against the same line item.
14 Cash and cash equivalents
2022
£’000
2021
£’000
Cash at bank and in hand 28,310 34,711
Bank overdrafts (606) (131)
Cash and cash equivalents 27,704 34,580
15 Trade and other payables
2022
£’000
*Re-presented
2021
£’000
Trade payables 27,896 28,236
Other payables 3,748 10,337
Other taxation and social security 15,284 27,375
Deferred income 2,014 757
Accruals 14,383 18,676
Trade and other payables 63,325 85,381
Deferred income has been re-presented for the prior year to split it out as a separate line from accruals.
Other payables relates principally to payroll-related creditors but has largely reduced due to the utilisation of amounts recognised relating
to the closure and scale-back of operations (note 2) which were included in the balance in the prior year.
Accruals include £nil (2021: £4.9m) relating to acquisition-related remuneration expense (see note 2).
In 2020, the Group participated in the UK Government’s VAT deferral scheme, which was launched to assist businesses in their response to
COVID-19. Within other taxation and social security in FY2021 was £10.7m of VAT payable, which was deferred from March 2020. This has
been fully repaid in FY2022.
In FY2021 the Group’s Polish and US businesses benefited from local COVID-19 assistance programs totalling £984,000. Of the assistance,
£307,000 was recognised in the P&L (within administrative expenses) in FY2021 as the conditions attached to the assistance had been
satisfied. The remaining £677,000 was held in other payables as at 30 April 2021. In FY2022, a further £515,000 was recognised in the P&L
asthe relevant conditions for those elements of Government assistance had been met. The remaining £161,000 is included within other
payables as at 30 April 2022, which is due to be repaid to the Polish Government as remaining conditions will not be met.
DWF Group plc | Annual Report and Accounts 2022 149
Strategic report Governance Financial statements Other information
16 Lease liabilities
2022
£’000
2021
£’000
At 1 May 84,002 84,678
Additions 7,683 16,573
Interest expense related to lease liabilities 1,673 2,284
Net foreign currency translation loss/(gain) 763 (589)
Disposals – (4,836)
Remeasurement adjustment (1,313) 2,367
Repayment of lease liabilities (including interest) (15,069) (16,475)
At 30 April 77,739 84,002
Current lease liabilities 14,576 13,104
Non-current lease liabilities 63,163 70,898
77,739 84,002
The maturity of lease liabilities can be found in note 19.
The undiscounted contractual cash flows relating to lease liabilities accounted for in accordance with IFRS 16 is £82.9m (2021: £91.4m).
Operating costs, included within administrative expenses, relating to short-term and low value leases during the year were £1.6m
(2021: £1.6m).
17 Interest-bearing loans and borrowings
This note provides information about the Group’s interest-bearing loans and borrowings, which are measured at amortised cost. For more
information about the contractual terms and the Group’s exposure to interest rate and foreign currency risk, refer to note 19.
Obligations under interest-bearing loans and borrowings
2022
£’000
2021
£’000
Current liabilities
Bank loans 9,093 19,099
Supplier payment facility 87 204
Bank overdrafts 606 131
9,786 19,434
Non-current liabilities
Bank loans 90,907 76,085
Unamortised finance costs (563) (641)
90,344 75,444
100,130 94,878
On 22 December 2021, the Group completed a refinancing of its principal RCF. The new facility was increased to £100m and matures in fiscal
year ending 2025 with two 12-month extension options and additional headroom on some covenants (with no reduction in headroom in any
covenant) that better aligns to the current business structure and operations. The refinancing also moves the facility from a fixed LIBOR
benchmark rate to a variable SONIA rate (see note 19). The non-current borrowings relating primarily to the principal RCF.
The Group operates a supplier payment facility with HSBC, which has a limit of £11m. This facility is utilised in paying certain suppliers from
time to time and repaid in the short term.
Analysis of cash and cash equivalents and other interest-bearing loans and borrowings:
1 May 2021
£’000
Cash flow
£’000
Exchange
movement
£’000
Non-cash
movement
£’000
30 April 2022
£’000
Cash and cash equivalents 34,580 (7,017) 141 – 27,704
Bank loans (94,544) (4,240) 227 (880) (99,437)
Supplier payments facility (204) 15,683 – (15,566) (87)
Total net debt (excluding IFRS 16) (60,168) 4,426 368 (16,446) (71,820)
Consolidated notes to the financial statements continued
Year ended 30 April 2022
150 DWF Group plc | Annual Report and Accounts 2022
Financial statements
1 May 2021
£’000
Cash flow
£’000
Exchange
movement
£’000
Non-cash
movement
£’000
30 April 2022
£’000
Cash and cash equivalents 28,727 6,236 (383) – 34,580
Bank loans (93,279) 1,069 (205) (2,129) (94,544)
Supplier payments facility (310) 23,144 – (23,038) (204)
Total net debt (excluding IFRS 16) (64,862) 30,449 (588) (25,167) (60,168)
Non-cash movements within bank loans relate to the amortisation of fees incurred on arrangement of the facility, over the expected life of
the facility. Non-cash movements within the supplier payments facility relate to the utilisation of the facility to settle liabilities with suppliers,
with the supplier payments facility being settled with cash when the liability becomes due.
Net debt including lease liabilities is £149.6m (2021: £144.2m).
Net debt is an APM and is defined in the glossary to the financial statements on pages 169 to 173.
18 Provisions
Dilapidation
provision
£’000
FOIL provision
£’000
Professional
indemnity
provision
£’000
Total
£’000
At 1 May 2021 1,837 1,252 2,512 5,601
Utilised in the year – – (3,472) (3,472)
Released in the year (100) (552) (507) (1,159)
Provisions made in the year 2,725 – 7,717 10,442
Reclassified to other payables – (700) (250) (950)
At 30 April 2022 4,462 – 6,000 10,462
Current 315 – 6,000 6,315
Non-current 4,147 – – 4,147
4,462 – 6,000 10,462
Professional indemnity provision
The provision for professional indemnity reflects the Group’s expected outflow for legal claims brought against the Group relating to historic
professional services rendered. A provision is only recognised where an outflow is probable. The probability is established by reference
towhether a claim is more likely than not to be successful. A professional indemnity liability for a claim that is agreed (i.e. the timing and
amount of payments are well understood) is recognised in accruals (see Note 15). Claims are assessed as being settled in full within the next
5 years.
Separately, the Group recognises expected reimbursements from professional indemnity insurance when it is virtually certain that the
reimbursement will be received (note 13). No separate disclosure is made of the detail of such claims or proceedings, or the costs recovered
by insurance, as such detail would be seriously prejudicial to the position of the Group. Note that in the prior year the professional indemnity
provision and the reimbursement asset is presented net within provisions within the financial statements. This prior year presentation has
not been restated to match the current year presentation.
There are circumstances of which the Group is aware but there is insufficient information available to either estimate whether a claim will
develop or, where a claim appears possible, make an assessment of the outflow. Such circumstances are contingent liabilities of the Group.
Dilapidation provision
Dilapidation provisions are established for restoration and reinstatement costs for property leases, held at the date of the statement of
financial position. Such provisions are estimated at the start of the lease and updated annually. The Group’s current lease portfolio
terminates over the course of the next 10 years.
The Group has engaged external valuators to perform a review of the Group’s property portfolio and they have provided updated estimates
of required dilapidations at the end of the lease terms. The increase in the dilapidations provision for the various properties has been
reflected in the corresponding right-of-use assets and is depreciated over the remaining lease term.
FOIL provision
The Forum of Insurance Lawyers (FOIL) provision represents the total VAT (partial exemption) exposure on historic claims handling
engagements. During FY2022, a settlement amount has been agreed with HMRC, and therefore the settlement amount has been
reclassified as other payables.
DWF Group plc | Annual Report and Accounts 2022 151
Strategic report Governance Financial statements Other information
19 Financial instruments
The Directors have overall responsibility for the oversight of the Group’s risk management framework. Further explanation on management
of risk factors is provided in the risk section of the Strategic report.
The Group’s trading and financing activities expose it to various financial risks that if left unmanaged could adversely impact on current or
future earnings. These risks can be categorised as credit risk, liquidity risk, market risk (interest rate risk and foreign currency risk) and
capital risk.
Credit risk
Credit risk is the risk of financial loss to the Group if a client or counterparty to a financial instrument fails to meet its contractual obligations,
and arises principally from the Group’s trade receivables. Credit checks are performed for new clients and ongoing monitoring takes place
for existing clients. A provision is carried for expected credit losses, see note 13.
In connection with the Group’s financial instruments there is not believed to be a material concentration risk based on the nature of
theinstruments.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group maintains sufficient cash
or working capital facilities to meet the cash requirements of the Group in order to mitigate this risk.
The Group is financed through a combination of members’ capital (repayable on retirement of the member), undistributed profits, cash and
bank borrowing facilities.
The Group’s principal facility is a £100m (2021: £95m) ‘RCF. Details of amounts drawn can be found in note 17. Management maintain a rolling
12-month cash flow and covenant forecasts to ensure visibility of short-term liquidity and manage facility usage, in addition to annual
budgets and longer-term planning. The RCF matures in 2024, with two 12-month extension options and there are no contracted repayments
until that date. The Group anticipates continued utilisation of the facility to fund working capital.
Note 1.3 sets out the financial covenants attached to the RCF held with the Group’s banking syndicate, and more information on how the
Group manages liquidity risk.
The Group has bank guarantees of £0.7m denominated in Euros (2021: £nil). The Group has issued rental guarantees of £2.1m denominated
in Euros and Australian dollars (2021: total of £1.7m).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s income.
TheGroup’s exposure to market risk predominantly relates to interest and currency risk.
Interest rate risk
The Group’s bank borrowings incur both fixed and variable interest charges. The variable rates on its principal borrowing facilities are linked
to SONIA or EURIBOR plus a margin.
When the Group’s principal RCF was re-financed in December 2021, the base interest rate changed from being a fixed LIBOR rate at the
point of drawdown to a variable SONIA rate (note 17), which has exposed the Group to interest rate risk in both the cash flows and the
impact on the income statement. It is not expected that the impact of this will be material to the accounts.
The Group has no other financial instruments that are impacted by the LIBOR benchmark reform.
Foreign currency risk
The Group has overseas operations in Europe, the Middle East, Asia, Australia, and North America and is therefore exposed to changes in
the respective currencies in these territories. The Group maintains bank balances in local currency. Cash positions are monitored and any
imbalances are dealt with by purchasing currency at the spot rate.
Capital risk
The capital structure of the Group consists of net debt, as disclosed in note 17, and equity. The Group’s objectives when managing capital
are to safeguard the Group’s ability to continue as a going concern and to provide optimal returns for Shareholders. The Group manages
itscapital structure and makes adjustments to it, in light of changes to economic conditions and the strategic objectives of the Group.
Fair value measurement
Financial assets and liabilities are measured in accordance with the fair value hierarchy and assessed as Level 1, 2 or 3 based on the
following criteria:
• Level 1: fair value measurement based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: fair value measurements derived from inputs other than quoted prices that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3: fair value measurements derived from valuation techniques that include inputs for the asset or liability that are not based on
observable market data.
Investments, held at fair value through profit or loss, are a Level 3 financial asset. The remaining financial instruments are measured at
amortised cost. The carrying values of the Group’s financial assets and liabilities approximate their fair values.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
152 DWF Group plc | Annual Report and Accounts 2022
Financial statements
The table below sets out the Group’s accounting classification of each category of financial assets and liabilities and their carrying values at
the end of the financial year.
Notes
2022
£’000
2021
£’000
Cash and cash equivalents 14 27,704 34,580
Measured at amortised cost:
Trade and other receivables 13 179,279 173,043
Fair value through profit or loss:
Investments – 227
Total financial assets 206,983 207,850
Measured at amortised cost:
Trade and other payables 15 61,311 67,647
Lease liabilities 16 77,739 84,002
Borrowings 17 100,087 94,747
Amounts due to members of partnerships in the Group 27 28,243 31,492
Total financial liabilities 267,380 277,888
Maturity analysis
The table below presents the outstanding contractual maturity profile by fiscal year for the Group’s interest-bearing loans and borrowings
and lease liabilities. Trade and other payables are excluded from this profile as they fall due within a year.
The majority of the Group’s borrowings comprise the drawn-down balance on the RCF, as discussed above. The payments shown below
reflect the contractual repayments upon expiry of the facility, excluding the extension options, so if the facility is extended these
repayments will be deferred.
Payments
Borrowings Lease liabilities
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Year to 2022 – 19,303 – 14,978
Year to 2023 9,180 76,085 16,030 14,501
Year to 2024 – – 14,639 13,270
Year to 2025 90,907 – 13,056 11,827
Year to 2026 – – 11,850 –
Later years – – 27,326 36,775
100,087 95,388 82,901 91,351
Effect of discounting cash flows – – (5,162) (7,349)
Carrying value 100,087 95,388 77,739 84,002
Financial instruments sensitivity analysis
The Group has exposure to interest rate and foreign exchange rate movements given the nature of its borrowings and operations. At the
end of the year, the effect of hypothetical changes in interest and currency rates are as follows.
Interest rate sensitivity
At 30 April 2022, based upon the amount of variable rate debt outstanding, the Group’s pre-tax profits would change by approximately
£0.9m for each one percentage point change in interest rates applicable to the variable rate debt and, after tax effect, equity would change
by approximately £0.7m.
Foreign exchange rate sensitivity
The Group transacts in a range of currencies, but is primarily exposed to changes in the Euro and US Dollar exchange rates.
A 20% (2021: 10%) strengthening and weakening of the above currencies against Pound Sterling would have the following impacts on net
assets and profit shown below.
This calculation assumes that the change occurred at the statement of financial position date and had been applied to risk exposures
existing at that date. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed
onthe same basis for comparative periods.
DWF Group plc | Annual Report and Accounts 2022 153
Strategic report Governance Financial statements Other information
19 Financial instruments continued
Strengthening Year
Effect of change
in EUR rate
Effect of change
in USD rate
Impact on equity 2022 1,796 203
Impact on equity 2021 (453) (143)
Impact on profit or loss 2022 (647) (207)
Impact on profit or loss 2021 3,295 265
Weakening Year
Effect of change
in EUR rate
Effect of change
in USD rate
Impact on equity 2022 (1,198) (135)
Impact on equity 2021 370 117
Impact on profit or loss 2022 431 138
Impact on profit or loss 2021 (2,696) (217)
20 Deferred taxation
The deferred tax asset is as follows:
2022
£’000
2021
£’000
Assets
At 1 May 4,649 3,522
Deferred tax debit recognised directly in equity 438 193
Deferred tax (charge)/credit in the income statement for the year (1,173) 1,092
Exchange rate translation 24 (158)
At 30 April 3,938 4,649
Deferred tax assets of £3.9m have been recognised in respect of tax depreciation timing differences (£1.3m), expected tax deductions for
share-based payments (£2.3m) and other temporary differences (£0.3m). It is anticipated that the Group and certain related subsidiary
undertakings will make sufficient taxable profit to allow the benefit of the deferred tax asset to be utilised. A potential deferred tax asset of
£11.7m (2021: £5.2m) has not been recognised relating to tax losses in subsidiary undertakings that are not anticipated to make sufficient
taxable profit to allow the benefit of the deferred tax asset to be utilised.
The deferred tax liability as at 30 April 2022 is as follows:
2022
£’000
2021
£’000
Non-current liabilities
At 1 May 7,584 8,884
Arising on acquisition intangibles 503 –
Deferred tax credit in the income statement for the year (2,163) (1,427)
Exchange rate translation (55) 127
At 30 April 5,869 7,584
The Group deferred tax liability relates to the recognition of acquired intangible assets arising on consolidation.
21 Share capital
Number
of 1p each
Share capital
£’000
Share premium
£’000
Treasury shares
£’000
Total
£’000
At 1 May 2020 324,554,653 3,246 88,610 (20) 91,836
Purchase of treasury shares – – – (109) (109)
At 30 April 2021 324,554,653 3,246 88,610 (129) 91,727
Shares issued on acquisition of Zing 365 Holdings Ltd 798,212 8 755 – 763
At 30 April 2022 325,352,865 3,254 89,365 (129) 92,490
On 24 May 2021 798,212 ordinary shares were issued as a result of the acquisition of Zing.
The Group has 24,322,488 (2021: 30,162,231) shares held in treasury.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
154 DWF Group plc | Annual Report and Accounts 2022
Financial statements
22 Reserves
The following describes the nature and purpose of each reserve within equity:
Share premium The amount subscribed for share capital in excess of the nominal value.
Treasury shares
The treasury shares reserve represents shares in DWF Group plc held by the Group’s share trusts. The trusts
are consolidated in the Group’s financial statements.
Merger reserve
The difference between the nominal value of shares acquired by the Company in the share-for-share exchange
with the former DWF LLP members and the nominal value of shares issued to acquire them.
Share-based payments
reserve The cumulative share-based payment expense net of release of amounts in respect of option exercised.
Translation reserve Gains/losses in translating the net assets of overseas operations into GBP.
Accumulated losses All other net gains and losses and transactions with owners not recognised elsewhere.
23 Share-based payments
Share-based payment arrangements
The Group operates three share-based payment plans (2021: two plans), all of which are equity settled and consist only of share awards.
• The equity incentive plan (‘EIP’): This is used to incentivise and reward performance from primarily Directors, upper-level management
and members. Within the EIP are the following schemes: The EIP-IPO award, the career level 1-3 award, the long-term incentive plan (‘LTIP’)
and the promotion award.
• The buy-as-you-earn (‘BAYE’) plan: All employees, excluding members, are eligible for the BAYE plan which is used to incentivise retention
and reward contribution. Within the BAYE are the following schemes: The BAYE-IPO award, the free-share award and the share incentive
plan matching award (‘SIP matching award’).
• The deferred bonus plan: This comprises the deferred bonus award scheme. This plan is used as an alternative to cash bonuses for
eligible employees and awards may be made following year-end results announcements.
The social security expenses in relation to share-based payment arrangements are based on the rates and treatment prevailing in each
jurisdiction. This is accounted for as a cash-settled award.
Details of Directors’ share awards are set out in the Directors’ Remuneration report on pages 83 to 114.
Charge to the income statement
The charge to the income statement is set out below:
2022
£’000
2021
£’000
Share plans:
Equity incentive plan 6,721 24,098
Buy-as-you-earn plan 871 3,720
Deferred bonus plan 109 –
7,701 27,818
Social security expenses 1,908 692
Total expense 9,609 28,510
Impact of SBP movement in 2022:
SBP expense
£’000
SBP reserve
£’000
Accumulated
losses
£’000
Prepayments
£’000
Other taxation
and social
security
£’000
Share-based payment schemes 7,701 (7,701) – – –
Recycling of vested shares – 9,074 (9,074) – –
Social security expenses 1,908 – – – (1,908)
Total movement 9,609 1,373 (9,074) – (1,908)
DWF Group plc | Annual Report and Accounts 2022 155
Strategic report Governance Financial statements Other information
23 Share-based payments continued
Impact of share-based payments (‘SBP’) movement in 2021:
SBP expense
£’000
SBP reserve
£’000
Accumulated
losses
£’000
Prepayments
£’000
Other taxation
and social
security
£’000
DWF-RCD acquisition* 15,176 – – (15,176) –
Share-based payment schemes 12,642 (12,642) – – –
Recycling of vested shares – 9,429 (9,429) – –
Social security expenses 692 – – – (692)
Total movement 28,510 (3,213) (9,429) (15,176) (692)
* The charge for 2021 includes the accelerated expense, post-modification of the acquisition agreement, for shares awarded as part of the purchase price for the
acquisition of DWF-RCD. This was charged against the related prepayment, which was released in full.
Summary of share awards
The following table shows the movements in share awards across all plans for the year:
2022
Number of
shares
’000
2021
Number of
shares
’000
Number of shares awards outstanding 1 May 33,046 24,286
Awards granted during the year 12,331 19,149
Awards vested during the year (8,598) (7,186)
Awards lapsed during the year (2,706) (3,203)
Number of shares awards outstanding 30 April 34,073 33,046
The weighted average remaining contractual life at the end of the period is 1.8 years (2021: 1.9 years).
The exercise price of all share awards is nil. The weighted average share price at the vesting date for all awards vested during the year was
£1.07 (2021: £0.63).
Details of the Group’s share awards are as follows:
Share awards under the DWF Group plc 2019 EIP – IPO award
At IPO, conditional and restricted share awards were granted to a limited number of the senior management team.
The awards are subject to a service condition and have an entitlement to receive dividend equivalents. A portion of the awards were
previously subject to performance targets, but these have subsequently been removed.
Share awards under the DWF Group PLC EIP – Career level 1-3 award
This scheme is to incentivise senior employees for performance and exceptional contributions to the Group, on promotion or as a lateral or
senior hire to the Group. Additionally, as part of the RCD acquisition, shares are ring-fenced for future grant to employees of the acquired
business which fall under this award.
All of the awards under this scheme are subject to service conditions and a portion of the awards are also subject to performance targets.
There is an entitlement to receive dividend equivalents on the awards.
Share awards under the DWF Group PLC EIP–Long-Term Incentive Plan
The Group incentivises its Executive Board with long-term rewards based on challenging performance targets.
The awards under this scheme are also subject to service conditions. There is no dividend or dividend equivalent entitlement until such time
as they vest and after a holding period.
Share awards under the DWF Group PLC EIP – Promotion award
The Group may incentivise its employees on promotion with a share award from this scheme.
All of the awards under this scheme are subject to service conditions. A portion of the awards were previously subject to performance
targets, but these have subsequently been removed. There is an entitlement to receive dividend equivalents on the awards.
Share awards under the DWF Group plc BAYE – IPO award
At IPO, awards were granted to eligible employees.
The awards under this scheme were subject to service conditions. There was no entitlement to receive dividends or dividend equivalents on
the awards until such time as they vested.
Share awards under the DWF Group plc BAYE – Free-share award
The Group incentivises its employees for exceptional contributions from this scheme.
The awards under this scheme are subject to service conditions. There is no entitlement to receive dividends or dividend equivalents until
such time as they vest.
Consolidated notes to the financial statements continued
Year ended 30 April 2022
156 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Share awards under the DWF Group plc BAYE – Plan matching award (‘BAYE matching shares award’)
The Group offers its employees in the UK, Spain and the US the opportunity to actively buy shares in DWF Group plc and become an
investor in the business. The Group will match a certain number of awards, subject to service conditions.
There is no entitlement to receive dividends or dividend equivalents until such time as they vest.
Share awards under the DWF Group plc–Deferred bonus plan
The Group may make awards under this scheme to eligible employees as part of the bonus plan.
The awards under this scheme are subject to service conditions. There is no entitlement to receive dividends or dividend equivalents until
such time as they vest.
Share awards granted
The Black Scholes method was used to value all share awards granted during the year. The following table outlines the inputs and
assumptions used:
2022 2021
EIP BAYE Deferred bonus EIP BAYE
Weighted average fair value at measurement date 1.14 1.10 0.95 0.70 0.68
Weighted average share price at grant date 1.19 1.20 1.17 0.74 0.72
Expected volatility 42.96% 43.46% 43.52% 45.05% 50.23%
Expected life (years) 2.87 1.37 2.87 2.96 1.30
Expected dividend yield 1.33% 5.72% 6.57% 5.00% 5.00%
Risk free interest rate 0.50% 0.51% 0.18% 0.07% 0.03%
Estimate of attrition 21.60% 9.42% 20.46% 25.0% 25.0%
Estimate of performance conditions being met 85.70% N/A N/A 94.15% N/A
The expectations and estimates used represent the average across the tranches granted. Expected volatility was determined by reference
to the period for which the share price history is available. The expected life used is the vested date of the award.
24 Key management personnel
Compensation paid to key management personnel
2022
£’000
2021
£’000
Remuneration of the PLC Board
Short-term employee benefits 2,717 2,263
Post-employment benefits 92 71
Loss of office – 526
Share-based payments 640 1,078
3,449 3,937
Key management personnel comprise the PLC Board of Directors. The amount paid to the highest paid member of key management was
£0.8m (2021: £0.8m). Further information can be found in the Directors’ Remuneration report on pages 83 to 114.
25 Employee information and their pay and benefits
The average number of persons employed by the Group (including Executive Directors) during the year, analysed by category, and the
aggregate payroll costs of these persons were as follows:
2022
No.
2021
No.
Legal advisors 2,426 2,405
Support staff 1,222 1,265
3,648 3,670
£’000 £’000
Wages and salaries 199,828 192,493
Social security costs 11,694 11,528
Contributions to defined contribution plans 6,698 6,822
218,220 210,843
The Group operates defined contribution pension plans. The total annual pension cost for the defined contribution plan was £6.7m
(FY2021: £6.8m) and the outstanding balance at 30 April 2022 was £0.9m (30 April 2021: £0.9m).
DWF Group plc | Annual Report and Accounts 2022 157
Strategic report Governance Financial statements Other information
26 Cash generated from operations
a) Cash generated from operations before adjusting items
2022
£’000
2021
£’000
Cash flows from operating activities
Profit/(loss) before tax 22,316 (30,600)
Adjustments for:
Other impairment 3,593 4,595
Amortisation of acquired intangible assets 4,655 4,609
Depreciation of right-of-use asset 12,737 11,977
Other depreciation and amortisation 7,211 6,989
Gain on disposal of leases and investments – (798)
Non-underlying items 1,224 27,101
Share-based payments expense 9,609 27,818
Interest expense on lease liabilities 1,673 2,284
Net finance expense 3,518 2,682
Operating cash flows before movements in working capital 66,536 56,657
(Increase)/decrease in trade and other receivables (8,031) 13,120
Decrease in trade and other payables (17,641) (176)
Decrease in provisions 4,798 (296)
Decrease in amounts due to members of partnerships in the Group (4,039) (4,144)
Cash generated in operations before adjusting items 41,623 65,161
b) Free cash flows
Free cash flows is an APM and is defined in the glossary to the financial statements on pages 169 to 173.
2022
£’000
2021
£’000
Free cash flows
Operating cash flows before movements in working capital 66,536 56,657
Net working capital movement (20,874) 12,648
Amounts due to members of partnerships in the Group (4,039) (4,144)
Cash generated from operations before adjusting items 41,623 65,161
Net interest paid (4,596) (5,064)
Tax paid (2,854) (3,155)
Repayment of lease liabilities (13,396) (14,191)
Purchase of property, plant and equipment (3,581) (4,001)
Purchase of other intangible assets (4,300) (6,635)
Free cash flows 12,896 32,115
Consolidated notes to the financial statements continued
Year ended 30 April 2022
158 DWF Group plc | Annual Report and Accounts 2022
Financial statements
c) Working capital measures
2022
£’000
2021
£’000
WIP days
Amounts recoverable from clients in respect of unbilled revenue 71,958 66,671
Unbilled disbursements 7,982 9,437
Total WIP 79,940 76,108
Annualised net revenue 350,490 338,130
WIP days 83 82
Debtor days
Trade receivables (net of allowance for doubtful receivables) 88,949 91,185
Other receivables* 3,154 2,890
Total debtors 92,103 94,075
Annualised net revenue 350,490 338,130
Debtor days 96 102
Total lock-up days
Total WIP 79,940 76,108
Total debtors 92,103 94,075
Total lock-up 172,043 170,183
Annualised net revenue 350,490 338,130
Total lock-up days 179 184
* In a change to the calculation of lock-up days from the prior year, other receivables is shown excluding amounts due from members of partnerships as it does not
represent part of the Group’s normal working capital. The comparator has been restated for consistency. This has the impact of reducing the current and prior year
lock-up days by two days each. Under both methods of calculation, lock-up days have reduced by five days and therefore the change in calculation has had no impact
on the reduction of lock-up days for the year.
Annualised net revenue, an APM as defined in the glossary, reflects the total net revenue for the previous 12-month period inclusive of
pro-forma adjustments for acquisitions and scale-backs.
Lock-up days is an APM and is defined in the glossary to the financial statements on pages 169 to 173.
The Group also measures lock-up as above but excluding other receivables as this more closely aligns with lock-up measurement of other
businesses in the legal sector and also as other receivables do not represent sales outstanding. Excluding other receivables, lock-up days
are176 days (2021: 180 days).
DWF Group plc | Annual Report and Accounts 2022 159
Strategic report Governance Financial statements Other information
27 Amounts due to members of partnerships in the Group
Amounts due to members of partnerships in the Group comprise members’ capital and other amounts due to members classified as
liabilities as follows:
Members’
capital
£’000
Other amounts
due to
members
£’000
Total amounts
due to
members of
partnerships in
the Group
£’000
At 1 May 2021 13,348 18,144 31,492
Members’ remuneration charged as an expense – 43,670 43,670
Unrealised foreign exchange translation differences (38) (80) (118)
Capital introduced by members 2,132 – 2,132
Repayments of capital (1,072) – (1,072)
Drawings – (47,861) (47,861)
At 30 April 2022 14,370 13,873 28,243
Members’
capital
£’000
Other amounts
due to members
£’000
Total amounts
due to members
of partnerships
in the Group
£’000
At 1 May 2020 13,231 22,621 35,852
Members’ remuneration charged as an expense – 41,361 41,361
Unrealised foreign exchange translation differences (46) (333) (379)
Capital introduced by members 4,276 – 4,276
Repayments of capital (4,113) – (4,113)
Drawings – (45,505) (45,505)
At 30 April 2021 13,348 18,144 31,492
The average number of members during the year was as follows:
2022 2021
Average number of members of partnerships held by the Group during the year 366 373
Consolidated notes to the financial statements continued
Year ended 30 April 2022
160 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Company statement of financial position
As at 30 April 2022
Notes
2022
£’000
2021
£’000
Non-current assets
Investments 2 255,955 247,281
Total non-current assets 255,955 247,281
Current assets
Trade and other receivables 3 163,515 170,096
Cash at bank and in hand 445 113
Total current assets 163,960 170,209
Total assets 419,915 417,490
Current liabilities
Trade and other payables 4 17,461 7,390
Deferred consideration – –
Total current liabilities 17,461 7,390
Non-current liabilities
Interest-bearing loans and borrowings 5 90,344 90,445
Total non-current liabilities 90,344 90,445
Total liabilities 107,805 97,835
Net assets 312,110 319,655
Equity
Share capital 6 3,254 3,246
Share premium 6 89,365 88,610
Share-based payments reserve 11,512 12,885
Retained earnings 207,979 214,914
Total equity 312,110 319,655
Under section s408 of the Companies Act 2006 the Company is exempt from the requirement to present its own income statement.
Theloss for the year to 30 April 2022 was £2.5m (2021: profit of £10.3m).
These financial statements of DWF Group plc (registered number: 11561594) were approved by the Board on 20 July 2022.
Notes 1 to 7 are an integral part of these financial statements.
Sir N Knowles
Group Chief Executive Officer
C J Stefani
Group Chief Financial Officer
DWF Group plc | Annual Report and Accounts 2022 161
Strategic report Governance Financial statements Other information
Company statement of changes in equity
Year ended 30 April 2022
Share capital
£’000
Share premium
£’000
Share-based
payments
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
1 May 2021 3,246 88,610 12,885 214,914 319,655
Loss for the year – – – (2,472) (2,472)
Total comprehensive income – – – (2,472) (2,472)
Shares issued 8 755 – – 763
Dividends paid – – – (13,537) (13,537)
Share-based payments – – (1,373) 9,074 7,701
At 30 April 2022 3,254 89,365 11,512 207,979 312,110
Share capital
£’000
Share premium
£’000
Share-based
payments
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
1 May 2020 3,246 88,610 9,672 201,729 303,257
Profit for the year – – – 10,277 10,277
Total comprehensive income – – – 10,277 10,277
Dividends paid – – – (6,521) (6,521)
Share-based payments – – 3,213 9,429 12,642
At 30 April 2021 3,246 88,610 12,885 214,914 319,655
Further information on dividends paid is included in note 7 of the Group financial statements.
Notes 1 to 7 are an integral part of these financial statements.
162 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Company notes to the financial statements
Year ended 30 April 2022
1 Accounting policies
General information and basis of accounting
DWF Group plc (the ‘Company’), is a public limited company, domiciled in the United Kingdom under the Companies Act 2006, and registered
in England. The registered office is 20 Fenchurch Street, London, EC3M 3AG.
The Company meets the definition of a qualifying entity under FRS 100 ‘Application of Financial Reporting Requirements’ issued by the FRC.
Accordingly, these financial statements were prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’
(‘FRS 101’). In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of
International Financial Reporting Standards as adopted by the UK (‘IFRS’), but makes amendments where necessary in order to comply with
the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The functional currency of the Company is British Pounds Sterling because that is the currency of the primary economic environment in
which the Company operates. The Company financial statements are presented in Pounds Sterling.
In the preparation of these financial statements, DWF Group plc has applied the following exemptions from the requirements of IFRS
available under FRS 101:
• Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based Payment’ (details of the number and weighted average exercise prices of share
options, and how the fair value of goods or services received was determined);
• IFRS 7, ‘Financial Instruments: Disclosures’;
• Paragraphs 91 to 99 of IFRS 13, ‘Fair Value Measurement’ (disclosure of valuation techniques and inputs used for fair value measurement
of assets and liabilities);
• Paragraph 38 of IAS 1, ‘Presentation of Financial Statements’ – comparative information requirements in respect of paragraph 79(a)(iv) of
IAS 1;
• The following paragraphs of IAS 1, ‘Presentation of Financial Statements’:
− 10(d) (statement of cash flows)
− 16 (statement of compliance with all IFRS)
− 38A (requirement for minimum of two primary statements, including cash flow statements)
− 38B-D (additional comparative information)
− 111 (statement of cash flows information)
− 134-136 (capital management disclosures)
• IAS 7, ‘Statement of Cash Flows’;
• Paragraphs 30 and 31 of IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’ (requirement for the disclosure of
information when an entity has not applied a new IFRS that has been issued but is not yet effective);
• Paragraph 17 of IAS 24, ‘Related Party Disclosures’ (key management compensation);
• The requirements in IAS 24, ‘Related Party Disclosures’, to disclose related party transactions entered into between two or more members
of a group provided that any subsidiary which is a party to the transaction is wholly owned by such member;
• The requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(p), B64(q)(ii), B66 and B67
ofIFRS 3 ‘Business Combinations’, given that equivalent disclosures are included in the consolidated financial statements of the group in
which the entity is consolidated;
• Paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36, ‘Impairment of Assets’.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in the Company
financial statements. The accounting policies in note 1 of the consolidated notes to the financial statements of DWF Group plc also apply
tothe Parent Company.
1.1 Investments in subsidiaries
Investments in subsidiaries are stated at cost less provision for any impairment in value.
1.2 Amounts due from/to subsidiary undertakings
Amounts due from subsidiary undertakings are non-derivative financial assets and are recognised initially at fair value. Subsequent to initial
recognition they are measured at amortised cost using the effective interest method less any allowance for expected credit losses.
Amounts due to subsidiary undertakings are non-derivative financial liabilities and are recognised initially at fair value. Subsequent to initial
recognition they are measured at amortised cost using the effective interest method and due to their short-term nature, they are not
discounted.
1.3 Accounting estimates and judgements
The preparation of the financial statements under IFRS requires management to make judgements, estimates and assumptions which
affectthe financial information. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant and are reviewed on an ongoing basis. There are not considered to be any critical judgements or key estimates
applicable to these financial statements.
DWF Group plc | Annual Report and Accounts 2022 163
Strategic report Governance Financial statements Other information
2 Investments
2022
£’000
2021
£’000
Investments
At 1 May 247,281 235,605
Additions 8,674 11,676
At 30 April 255,955 247,281
Additions in the year ended 30 April 2022 relate to, inter alia, the Zing acquisition and the push down of the share-based payment expense
to entities that the employees provide services to. Further details of the Group’s share-based payment schemes are included in note 23 of
the Group financial statements.
The Group has investments in the following undertakings, which are all held as ordinary shares:
Registered address
Principal place
ofbusiness Nature of business
Proportion
ofownership
Subsidiaries
Direct
DWF Holdings Limited
c
i UK Investment holding 100%
DWF Group (US) LLC xxvii USA Investment holding 100%
DWF Connected Services Investments Limited
c,d
xxx UK Connected services 100%
Zing 365 Holdings Limited
c,d
i UK Connected services 100%
Indirect
DWF (TG) Limited
c
i UK Investment holding Note 1
DWF LLP i UK Legal services Note 2
DWF Law LLP i UK Legal services Note 1
DWF (Northern Ireland) LLP
c
ii UK Legal services Note 2
Vueity Limited i UK Dormant Note 1
DWF Costs Limited
c
i UK Connected services Note 1
DWF Claims Limited
c
i UK Connected services Note 1
DWF Advocacy Limited
c
i UK Connected services Note 1
DWF Forensic Limited
c
i UK Connected services Note 1
DWF Ventures Limited
c
i UK Connected services Note 1
DWF Adjusting Limited
c
i UK Connected services Note 1
DWF Resource Limited
c
i UK Connected services Note 1
DWF Connected Services Holdings Limited
c
i UK Connected services Note 1
DWF Company Secretarial Services Limited
c
i UK Connected services Note 2
Greyfern Law Limited
c
i UK Connected services Note 2
Davies Wallis Foyster Limited i UK Non-trading Note 2
Davies Wallis (unlimited)
a
i UK Dormant Note 2
DWF Solicitors Limited
a
i UK Dormant Note 2
DWF (Trustee) Limited
a
i UK Dormant Note 2
DWF Nominees Limited
a
i UK Dormant Note 2
Resolution Law Limited
a
i UK Dormant Note 1
DWF Middle East Group LLP
a
i UK Dormant Note 1
DWF (Nominees) 2013 Limited
a
i UK Dormant Note 2
Harborne Road Nominees Limited
a
i UK Dormant Note 2
DWF Connected Services Limited
c
i UK Dormant Note 2
DWF Connected Services Group Limited
c
i UK Non-trading Note 1
NewCo 4736 Limited
c
i UK Non-trading Note 1
Bailford Trustees Limited
a
iii UK Dormant Note 2
Company notes to the financial statements continued
Year ended 30 April 2022
164 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Registered address
Principal place
ofbusiness Nature of business
Proportion
ofownership
DWF Trustees (Scotland) Limited
a
iii UK Dormant Note 2
DWF Directors (Scotland) Limited
a
iii UK Dormant Note 2
DWF Secretarial Services (Scotland) Limited
a
iii UK Dormant Note 2
DWF Pension Trustees Limited iv UK Dormant Note 2
DWF 360 Limited i UK Software provider Note 1
EBT v UK Trustees Note 6
RST v UK Trustees Note 6
DWF (France) AARPI
b
vi France Law services Note 2
DWF Claims (France) SAS vi France Connected services Note 1
DWF Holding GbR vii Germany Investment holding Note 2
DWF Germany RmbH vii Germany Law services Note 2
DWF LLP Studio Legale Associato ix Italy Law services Note 2
DWF Claims (Italy) S.r.L.
b
ix Italy Connected services Note 1
DWF (Ireland) LLP x ROI Law services Note 2
DWF Claims (Ireland) Limited viii ROI Connected services Note 1
DWF Dublin Secretarial Limited
a
x ROI Dormant Note 2
DWF Poland Holdings Sp. z o.o. xxi Poland Investment holding Note 1
DWF Poland Jamka sp.k
b
xxi Poland Law services Note 1
DWF Spain S.L.P. xxv Spain Investment holding Note 1
Rousaud Costas Duran S.L.P.U. xxv Spain Law services Note 1
Rousaud Costas Duran Abogados S.L.P.U. xxiv Spain Law services Note 1
Rousaud Costas Duran Concursal S.L.P. xxv Spain Law services Note 1
Rousaud Costas Duran Valencia S.L.P.U. xxvi Spain Law services Note 1
RCD Tax & Legal Advisors S.L.P.U. xxv Spain Law services Note 1
Gestart Assessors S.L.U. xxv Spain Law services Note 1
Gestart Asesoramiento Empresarial S.L.U. xxiv Spain Law services Note 1
DWF Law Australia Pty Limited xi Australia Law services Note 1
DWF Australia Holdings Pty Limited xi Australia Law services Note 1
DWF Claims (Australia) Pty Limited xii Australia Connected services Note 1
DWF Adjusting (Australia) Pty Limited xii Australia Connected services Note 1
DWF Connected Services Australia Pty Limited xi Australia Dormant Note 1
DWF Claims (Canada) Limited xiii Canada Connected services Note 1
DWF Adjusting (Canada) Limited xiii Canada Connected services Note 1
DWF Compliance (Singapore) Pte Limited xiv Singapore Connected services Note 1
Triton Global Claims (Asia) Pte Limited xv Singapore Dormant Note 1
Triton Global Claims (HK) Pty Limited xvi Hong Kong Dormant Note 1
DWF (Middle East) LLP xvii UAE Law services Note 1
Mindcrest Inc. xxii USA Law services Note 5
Mindcrest (India) Private Limited xxiii India Law services Note 5
Mindcrest UK Limited
c
i UK Law services Note 5
DWF Claims (USA) LLC xviii USA Connected services Note 1
Moat Pensions Limited
c
iii UK Connected services Note 2
DWF MGA (USA) LLC USA Connected services Note 1
Zing Associates Limited
c,d
i UK Connected services Note 3
Zing 365 Limited
c,d
i UK Connected services Note 3
DWF Group plc | Annual Report and Accounts 2022 165
Strategic report Governance Financial statements Other information
Company notes to the financial statements continued
Year ended 30 April 2022
Registered address
Principal place
ofbusiness Nature of business
Proportion
ofownership
Marlborough Training and Consultancy Limited
c,d
i UK Connected services Note 3
Try Solutions Limited
c,d
i UK Connected services Note 3
BCA Claims & Consulting Limited
d
xxix Canada Connected services Note 4
DWF (Hong Kong) LLP i UK Dormant Note 2
a Subsidiary undertakings have been excluded from the consolidation on the basis of immateriality.
b The statutory year end in the period being reported is 31 December.
c Entities have claimed audit exemption for the year to 30 April 2022 under section 479A of the Companies Act 2006.
d Investments have been made during the year to 30 April 2022.
Note 1 DWF Group plc indirectly controls these entities through its subsidiary, DWF Holdings Limited.
Note 2 DWF Group plc indirectly controls these entities by virtue of Governance Agreements and Intra-Group Agreements between the
Company, DWF Law LLP, DWF LLP and other related subsidiary undertakings.
Note 3 DWF Group plc indirectly controls these entities through its subsidiary, Zing 365 Holdings Limited.
Note 4 DWF Group plc indirectly controls these entities through its subsidiary, DWF Connected Services Investments Limited.
Note 5 DWF Group plc indirectly controls these entities through its subsidiary, DWF Group (US) LLC.
Note 6 These trusts are consolidated as if they were subsidiaries of the Group.
(i) 1 Scott Place, 2 Hardman Street, Manchester, United Kingdom, M3 3AA
(ii) 42 Queen Street, Belfast, BT1 6HL
(iii) 103 Waterloo Street, Glasgow G2 7BW
(iv) 5 St. Paul’s Square, Old Hall Street, Liverpool, L3 9AE
(v) 26 New Street, St. Helier, JE2 3RA, Jersey
(vi) 137-139 rue de l’Université, 75007 Paris, France
(vii) Habsburgerring 2, Westgate, 50674 Cologne, Germany
(viii) 2 Dublin Landings, North wall Quay, Dublin 1, V4A3, Ireland
(ix) Via dei Bossi 6, Milano, Italy
(x) 5 George’s Dock, IFSC, Dublin
(xi) Level 36, 123 Eagle Street, Brisbane, QLD 4000, Australia
(xii) Suite 204, Level 2, 165-167 Philip Street, Sydney NSW 2000, Australia
(xiii) 111 Queen Street East, Suite 450, Toronto, Ontario, M5C 1S2, Canada
(xiv) 9 Raffles Place, #58-0 Republic Plaza, Singapore, 048619
(xv) 8 Cross Street, #24-03/04 PWC Building, Singapore, 048424
(xvi) Room 1901, 19/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay, Hong Kong
(xvii) P.O. Box 507104, Office 901 & 904, Tower 2, Al Fattan Currency House, DIFC, Dubai
(xviii) 740 Waukegan Road, Deerfield, Chicago, Illinois, 60015, USA
(xix) Harrow House, 23 West Street, Haslemere, Surrey, GU27 2AB
(xx) Martello Court, Admiral Park, St Peter Port, Guernsey, GY1 3HB
(xxi) plac Stanisława Małachowskiego 2, 00-066 Warsaw
(xxii) 425 S. Financial Place, Suite 1100, Chicago, IL 60605
(xxiii) 603/604 Block D, Weikfield IT-Citi Info Park, Nagar Rd, Vadgaon Sheri, Pune, 411014, India
(xxiv) Calle Serrano, 116, 28006 Madrid, Spain
(xxv) Calle Escoles Pies, 102, 08017 Barcelonam, Spain
(xxvi) Gran Via Marquez del Turia n 55 Puerta 8, 46005, Valencia, Spain
(xxvii) 251 Little Falls Drive, Wilmington, Delaware 19808, US
(xxviii) Colthouse Grange Farm, Ramsgill, Harrogate, North Yorkshire, United Kingdom, HG3 5AE
(xxix) 400-725 Granville Street, PO Box 10325, Vancouver BC V7Y 1G5, Canada
(xxx) 20 Fenchurch Street, London, England, England, EC3M 3AG
3 Trade and other receivables
2022
£’000
2021
£’000
Amounts due from subsidiary undertakings 163,154 170,090
Prepayments 361 6
163,515 170,096
Amounts due from all subsidiaries are interest free, unsecured and repayable on demand.
166 DWF Group plc | Annual Report and Accounts 2022
Financial statements
4 Trade and other payables
2022
£’000
2021
£’000
Trade payables 111 55
Other taxation and social security 2,025 646
Accruals 1,578 1,345
Amounts due to subsidiary undertakings 13,747 5,344
17,461 7,390
Amounts due to subsidiary undertakings are interest free and repayable on demand.
5 Interest-bearing loans and borrowings
This note provides information about the Company’s interest-bearing loans and borrowings, which are measured at amortised cost.
Furtherdetails on the Company’s revolving credit facility (‘RCF’) can be found in the consolidated financial statements note 17.
Obligations under interest-bearing loans and borrowings
2022
£’000
2021
£’000
Current liabilities
Bank loans – 15,000
– 15,000
Non-current liabilities
Bank loans 90,907 76,086
Unamortised finance costs (563) (641)
90,344 75,445
90,344 90,445
6 Share capital
Number
of 1p each
Ordinary shares
£’000
Share premium
£’000
Total
£’000
At 1 May 2020 324,554,653 3,246 88,610 91,856
At 30 April 2021 324,554,653 3,246 88,610 91,856
Shares issued on acquisition of Zing 365 Holdings Ltd 798,212 8 755 763
At 30 April 2022 325,352,865 3,254 89,365 92,619
On 24 May 2021 798,212 ordinary shares were issued as a result of the acquisition of Zing.
7 Employee information and Directors’ remuneration
The Company had no employees (other than Directors) employed during the year. No Directors received remuneration in respect to services
to the Company in the year (2021: £nil).
DWF Group plc | Annual Report and Accounts 2022 167
Strategic report Governance Financial statements Other information
Unaudited information
Appendix
Reconciliation to new global operating structure – re-presented year ended 30 April 2021
The following reconciliation shows how the prior year’s revenue and gross profit has been re-presented from the old operating structure to
the new global operating structure:
As reported for
the year ended
30 April 2021
£’000
Impact of
restructure
£’000
As reported
under new global
operating
structure
effective
1 May 2021
£’000
Segment net revenue
Legal Advisory – 285,326 285,326
Commercial Services 110,667 (110,667) –
Insurance Services 103,884 (103,884) –
International 85,255 (85,255) –
Connected Services 25,338 3,085 28,423
Mindcrest (FY2021: Managed Services) 12,986 11,395 24,381
Net revenue 338,130 – 338,130
Segment direct cost
Legal Advisory – (137,487) (137,487)
Commercial Services (46,245) 46,245 –
Insurance Services (51,560) 51,560 –
International (49,012) 49,012 –
Connected Services (14,406) (1,819) (16,225)
Mindcrest (FY2021: Managed Services) (5,126) (7,511) (12,637)
Direct cost (166,349) – (166,349)
Segment gross profit
Legal Advisory – 147,839 147,839
Commercial Services 64,422 (64,422) –
Insurance Services 52,324 (52,324) –
International 36,243 (36,243) –
Connected Services 10,932 1,266 12,198
Mindcrest (FY2021: Managed Services) 7,860 3,884 11,744
Gross profit 171,781 – 171,781
168 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Glossary
Alternative Performance Measures (‘APMs’)
In accordance with the Guidelines on APMs issued by the European Securities and Markets Authority (‘ESMA’), additional information is
provided on the APMs used by the Group below. In the reporting of financial information, the Group uses certain measures that are not
required under IFRS.
These additional measures (commonly referred to as APMs) provide the Group’s stakeholders with additional information on the
performance of the business. These measures are consistent with those used internally, and are considered insightful for understanding
thefinancial performance of the Group. The Group’s APMs provide an important measure of how the Group is performing by providing a
meaningful comparison of how the business is managed and measured on a day-to-day basis and achieves consistency and comparability
between reporting periods.
These APMs may not be directly comparable with similar measures reported by other companies and they are not intended to be
asubstitute for, or superior to, IFRS measures. All Income Statement measures are provided for continuing operations unless
otherwisestated.
Changes to APMs
The Directors and management have redefined adjusted diluted earnings per share (‘adjusted DEPS’) to aid comparability and simplicity.
Thedenominator reflects the aggregate of shares in issue and those shares held in trust, to represent a fully diluted EPS. In addition, the
denominator for the adjusted earnings per share (‘adjusted EPS’) has been made consistent to the basic EPS measure to provide further
consistency to the statutory measure. The definitions of adjusted DEPS and adjusted EPS are fully defined below.
APM
Net revenue
Closest equivalent statutory measure
Revenue
Definition and purpose
Revenue less recoverable expenses
Recoverable expenses do not attract a profit margin and can vary significantly month-to-month such that they may distort the link between
revenue and the performance of the Group. Net revenue is widely reported in the legal sector as the key measure reflecting underlying
trading, and allows greater comparability with other legal businesses.
Reconciliation
2022
£’000
2021
£’000
Revenue 416,052 400,948
Recoverable expenses (65,810) (62,818)
Net revenue 350,242 338,130
APM
Adjusting items
Closest equivalent statutory measure
None
Definition and purpose
Those items which the Group excludes from its statutory metrics to arrive at adjusted profit or cash flow metrics in order to present further
measures of the Group’s performance.
These include items which are significant in size or by nature are non-trading or non-recurring. This provides a comparison of how the
business is managed and measured on a day-to-day basis and provides consistency and comparability between reporting periods, as well
as allows our results to be compared more fairly with other similar businesses.
Share-based payment charges within adjusting items relate to shares allocated from the pre-funded employee benefit trust, which are not
dilutive to shareholders.
Reconciliation
See note 2
APM
Adjusted earnings before interest, tax, depreciation and amortisation (‘adjusted EBITDA’)
Closest equivalent statutory measure
Operating profit/(loss)
Definition and purpose
Operating profit adjusted for adjusting items, as detailed in note 2, and adding back depreciation and amortisation.
Adjusted EBITDA is useful as a measure of comparative operating performance between both previous periods, and other companies as it
is reflective of adjustments for adjusting items and other factors that affect operating performance. Adjusted EBITDA removes the effect
ofdepreciation and amortisation, and adjusting items as described above, as well as items relating to capital structure (finance costs and
income) and items outside the control of management.
DWF Group plc | Annual Report and Accounts 2022 169
Strategic report Governance Financial statements Other information
Reconciliation
2022
£’000
2021
£’000
Operating profit/(loss) 27,653 (25,634)
Depreciation of right-of-use asset 12,737 11,977
Other depreciation and amortisation 7,211 6,989
Total of adjusting items 19,081 64,792
Adjusted EBITDA 66,682 58,124
APM
Adjusted profit before tax (‘adjusted PBT’)
Closest equivalent statutory measure
Profit/(loss) before tax
Definition and purpose
Profit before tax and after reflecting the impact of adjusting items.
Adjusted PBT is useful as a measure of comparative operating performance between both previous periods, and other companies as it is
reflective of adjustments for non-underlying items, amortisation of acquired intangibles, share based payments expense, impairment/
impairment reversal and other factors that affect operating performance. Adjusted PBT is used to provide a useful and consistent measure
of the ongoing performance of the Group. Adjusted measures are reconciled to statutory measures in note 2.
Reconciliation
2022
£’000
2021
£’000
Profit/(loss) before tax 22,316 (30,600)
Total of adjusting items (note 2) 19,081 64,792
Adjusted profit before tax 41,397 34,192
APM
Cost to income ratio
Closest equivalent statutory measure
Not applicable
Definition and purpose
Adjusted administrative expenses and impairment as detailed in note 2, divided by net revenue as defined above.
After adjusting for significant items that are one-off in nature, the cost to income ratio is an essential metric in assessing the levels of
underlying operational gearing in the Group. The Group uses the cost to income ratio to measure the efficiency of its activities. A decrease
in cost to income ratio indicates an improvement to efficiency, and likewise an increase indicates a decline. Management note that the
usefulness of the cost to income ratio is inherently limited by the fact that it is a ratio and thus does not provide information on the
absolute amount of operating revenue and expenses.
Reconciliation
2022
£’000
2021
£’000
Net revenue 350,242 338,130
Adjusted administrative expenses and impairment (note 2) 134,322 132,623
Cost to income ratio 38.4% 39.2%
Unaudited information continued
170 DWF Group plc | Annual Report and Accounts 2022
Financial statements
APM
Adjusted administrative expenses
Closest equivalent statutory measure
Administrative expenses and impairment
Definition and purpose
Adjusted administrative expenses are defined as administrative expenses plus impairment less adjusting items (as defined above).
Adjusted administrative expenses provide a useful and consistent measure of the ongoing administrative expenses of the Group.
Inparticular, the adjusted administrative expenses are utilised within the Group’s definition of ‘Cost to income ratio’ which is also
definedabove.
Reconciliation
See note 2
APM
Net debt (excluding IFRS 16)
Closest equivalent statutory measure
Cash and cash equivalents less borrowings
Definition and purpose
Net debt comprises cash and cash equivalents less interest-bearing loans and borrowings (including the supplier payments facility).
Net debt is one measure that can be used to indicate the strength of the Group’s statement of financial position and can be a useful
measure of the indebtedness of the Group. This metric excludes the Group’s lease liabilities under IFRS 16 in order to provide consistency
with how the Group manages and reports its indebtedness and also providing consistency with the definition of Net debt under the
Group’s banking agreement.
Reconciliation
See note 17
APM
Lock-up days
Closest equivalent statutory measure
Not applicable
Definition and purpose
Lock-up days comprise work-in-progress (‘WIP’) days, representing the amount of time between performing work and invoicing clients; and
debtor days, representing the length of time between invoicing and cash collection. WIP days are calculated as unbilled revenue divided by
annualised net revenue multiplied by 365 days. Debtor days are calculated as trade and other receivables, excluding amounts due from
members of partnerships, divided by annualised net revenue multiplied by 365 days. Annualised net revenue is the total net revenue for
the previous 12 month period with adjustments for acquisitions and discontinuations.
Reconciliation
See note 26
DWF Group plc | Annual Report and Accounts 2022 171
Strategic report Governance Financial statements Other information
APM
Adjusted diluted earnings per share (‘adjusted DEPS’)
Closest equivalent statutory measure
Diluted earnings per share (‘DEPS’)
Definition and purpose
Adjusted earnings divided by the total number of ordinary shares in issue.
Adjusted earnings is defined as (loss) / earnings from continuing operations adjusted for:
• non-underlying items;
• share-based payments expense;
• gain on investment;
• amortisation of acquired intangible assets;
• impairment; and
• the tax effect of the above items;
Whilst this metric is not prepared in accordance with IAS 33 ‘Earnings per Share’, it is an important APM to provide the Group’s stakeholders
with a fully diluted EPS metric using the Group’s adjusted earnings for the period that is consistent year on year.
Reconciliation
See note 8
APM
Adjusted earnings per share (‘adjusted EPS’)
Closest equivalent statutory measure
Basic EPS
Definition and purpose
Adjusted earnings divided by weighted average number of ordinary shares for the purposes of the basic earnings per share calculation.
Seeadjusted diluted EPS definition and purpose above for details of adjusting measures.
This metric provides the Group’s stakeholders with an EPS metric using the Group’s adjusted profitability but with a denominator
consistent with the statutory basic EPS measure.
Reconciliation
See note 8
APM
Like-for-like (‘L4L’)
Closest equivalent statutory measure
N/A
Definition and purpose
Like for like metrics, are applied to net revenue, direct costs, gross profit and gross margin to exclude the results of DWF Australia and
Germany following the scale-back of operations in March 2021 and April 2022 respectively, along with the results for current year
acquisitions, Zing and BCA.
This metric allows the Group’s stakeholders to compare the performance of the business on a consistent basis with the prior period, given
that the scale back of the Australian and German business was a significant change to the Group.
Reconciliation
Not applicable
APM
Revenue per partner
Closest equivalent statutory measure
Revenue
Definition and purpose
Revenue per partner is defined as net revenue divided by average number of partners (on a full time equivalent basis) for the period.
This metric allows the Group’s stakeholders to view the performance of the business based on average revenue per partner, split by
division (this includes both member and employee partners).
Unaudited information continued
172 DWF Group plc | Annual Report and Accounts 2022
Financial statements
Reconciliation
2022
£’000
2021
£’000
Legal Advisory 896 842
Connected Services 1,382 1,428
Mindcrest 12,216 16,254
Group 975 924
APM
Annualised net revenue
Closest equivalent statutory measure
Revenue
Definition and purpose
Annualised net revenue reflects the total net revenue for the previous 12-month period inclusive of pro-forma adjustments for acquisitions
and discontinuations/closures/scale-backs.
This metric is utilised as a denominator for lock up, WIP and debtor day calculations which allow greater comparability within the legal
sector consistent with prior and full year metrics.
Reconciliation
Not applicable
APM
Free cash flows
Closest equivalent statutory measure
Not applicable
Definition and purpose
Free cash flow is the amount by which the operating cash flow exceeds working capital, amounts payable to members, tax, interest and
capital expenditure.
This metric provides the Group’s stakeholders detail around the efficiency of cash generation and utilisation.
Reconciliation
See note 26
APM
Leverage
Closest equivalent statutory measure
Not applicable
Definition and purpose
Leverage is calculated as net debt, divided by the last 12 months adjusted EBITDA (both defined above).
This metric provides the Group’s stakeholders detail around the Group’s ability to repay debt and meet payment obligations. Leverage
should be compared with a benchmark, or industry average and is widely used by analysts and credit rating agencies.
Reconciliation
2022
£’000
2021
£’000
Adjusted EBITDA (last 12 months) 66,682 58,124
Net debt 71,820 60,168
Leverage 1.08 1.04
DWF Group plc | Annual Report and Accounts 2022 173
Strategic report Governance Financial statements Other information
Annual General Meeting (‘AGM’)
The AGM of the Company will be held at
andbe broadcast from 20 Fenchurch Street,
London, United Kingdom, EC3M 3AG on
28 September 2022 at 2.00pm.
The Notice of AGM and a proxy form
accompanies this Annual Report. You can
also find the Notice of AGM on the Company’s
website at dwfgroup.com/en/investors.
Shareholder enquiries
The Company’s share register is maintained
by Equiniti. Shareholders with queries relating
to their shareholding should contact Equiniti
as follows.
By post:
Equiniti Limited, Aspect House, Spencer
Road, Lancing, West Sussex, BN99 6DA
UK Telephone:*
0371 384 2030
Overseas telephone:
+44 (0)121 415 7047
Online:
help.shareview.co.uk
(from here you can email Equiniti securely
with your enquiry)
* Lines are open from 8.30am to 5.30pm UK time,
Monday to Friday.
Direct credit of dividend payment
Dividends can be paid automatically into
your bank or building society account. The
benefits of doing this are that you will:
• receive cleared funds in your bank
account on the payment date;
• avoid postal delays; and
• remove the risk of your cheques getting
lost in the post.
To take advantage of this service or for
further details, contact Equiniti or visit
shareview.co.uk
For overseas Shareholders, a separate
dividend service provided by Equiniti
enables those living overseas to have their
dividend paid into their bank account, for a
small fee. For further details please contact
Equiniti or visit shareview.co.uk
Electronic communications
Shareholders can sign up for electronic
communications online by registering with
Shareview, the internet-based platform
provided by our Registrars, Equiniti. In addition
to enabling Shareholders to receive
communications by email, Shareview provides
a facility for Shareholders to manage their
shareholding online by allowing them to:
• receive trading updates by email;
• view their shareholdings;
• update their records – including change
ofaddress; and
• vote in advance of Company general
meetings. To find out more about the
services offered by Shareview please
visitshareview.co.uk
Corporate website
Shareholders are encouraged to visit our
website dwfgroup.com which provides:
• Company news and information;
• our three offerings – Legal Advisory,
Mindcrest and Connected Services; and
• the Company’s approach to
operatingresponsibly.
There is also a specific investors’ section
which contains up-to-date information
forShareholders, including:
• comprehensive share price information;
• financial results;
• information on how to manage your shares;
• dividend history and dividend
calculator;and
• access to current and historical
Shareholder documents, such as this
Annual Report and Accounts and the
AGMNotice of Meeting.
Unsolicited telephone calls and
correspondence Shareholders should be
wary of any unsolicited advice, offers to
buyshares at a discount, or offers of free
reports about the Company. These are
typically from overseas ‘brokers’ who target
UK or US Shareholders, offering to sell them
what often turns out to be worthless or
high-risk shares. These operations are
commonly known as boiler rooms, and the
brokers can be very persistent and
extremely persuasive.
Shareholders are advised to deal only with
financial services firms that are authorised
by the Financial Conduct Authority (‘FCA’).
You can check if a firm is properly authorised
by the FCA by visiting fca.org.uk/register.
Ifyou do deal with an unauthorised firm,
youwill not be eligible to receive payment
under the Financial Services Compensation
Scheme if anything goes wrong. For more
detailed information on how you can protect
yourself from an investment scam, or to
report a scam, go to fca.org.uk/consumers/
scams/report-scam-us or call 0800 111 6768.
Cautionary note regarding
forward-looking statements
This Annual Report and Accounts contains
certain forward-looking statements with
respect to the Company’s current targets,
expectations and projections about future
performance, anticipated events or trends
and other matters that are not historical
facts. These forward-looking statements,
which sometimes use words such as ‘aim’,
‘anticipate’, ‘believe’, ‘intend’, ‘plan’, ‘estimate’,
‘expect’ and words of similar meaning,
include all matters that are not historical
facts and reflect the directors’ beliefs and
expectations and involve anumber of risks,
uncertainties and assumptions that could
cause actual resultsand performance to
differ materiallyfrom any expected future
resultsor performance expressed or
implied by the forward-looking statement.
Shareholder information
2022 financial calendar
8 September 2022 Ex dividend date for the final dividend
9 September 2022 Record date to be eligible for the final dividend
28 September 2022 Annual General Meeting
7 October 2022 Payment date for the final dividend
December 2022 Announcement of interim results
174 DWF Group plc | Annual Report and Accounts 2022
Other information
Company name
DWF Group plc
Registered number
England 11561594
Secretary and registered office
Darren Drabble
DWF Group plc
20 Fenchurch Street London
EC3M 3AG
United Kingdom
companysecretary@dwf.law
dwfgroup.com
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
BN99 6DA
United Kingdom
UK Telephone:*
0371 384 2030
Overseas telephone:
+44 (0)121 415 7047
* Lines are open from 8.30am to 5.30pm UK time,
Monday to Friday.
Statutory Auditor
PricewaterhouseCoopers
1 Hardman Square
Manchester
M3 3EB
United Kingdom
Corporate stockbrokers
Berenberg
60 Threadneedle Street
London
EC2R 8HP
United Kingdom
Zeus Capital Limited
82 King Street
Manchester
M2 4WQ
United Kingdom
Principal UK bankers
HSBC UK Bank plc
8 Canada Square
London
E14 5HQ
United Kingdom
Corporate information
DWF Group plc | Annual Report and Accounts 2022 175
Strategic report Governance Financial statements Other information
Principal offices
United Kingdom
42 Queen Street
Belfast
BT1 6HL
One Snowhill
Snow Hill Queensway
Birmingham
B4 6GA
Redcliff Quay
120 Redcliff Street
Bristol
BS1 6HU
23-25 Coldharbour Road
Redland
Bristol
BS6 7JT
No. 2 Lochrin Square
96 Fountainbridge
Edinburgh
EH3 9QA
103 Waterloo Street
Glasgow
G2 7BW
Bridgewater Place
Water Lane
Leeds
LS11 5DY
5 St Paul’s Square
Old Hall Street
Liverpool
L3 9AE
20 Fenchurch Street
London
EC3M 3AG
1 Scott Place
2 Hardman Street
Manchester
M3 3AA
2nd Floor
Central Square
South Orchard Street
Newcastle-Upon-Tyne
NE1 3AZ
Australia
Level 36
Riverside Centre
123 Eagle Street
Brisbane
QLD 4000
GPO Box 74
Brisbane QLD 4001
Level 9
Wyndham Corporate Centre
1 Corporate Court
Bundall
QLD 4217
Tower 4
Level 17
727 Collins Street
Docklands
VIC 3008
Level 29
85 Castlereagh Street
Sydney
NSW 2000
DWF Adjusting
Suite 1
Level 1
123 Midson Road
Epping
NSW 2121
Canada
111 Queen Street
East Suite 450
Toronto ON
M5C 1S2
605 – 1185 West Georgia St.
Vancouver
BC, V6E 4E6
France
137-139 rue de l’Université
75007
Paris
France
Toque K0165
Germany
Rechtsanwaltsgesellschaft mbH
Linkstr. 12
10785 Berlin
Germany
Rechtsanwaltsgesellschaft mbH
Königsallee 60 c
D-40212 Düsseldorf
Germany
Rechtsanwaltsgesellschaft mbH
Prinzregentenstraße 78
81675 Munich
Germany
Rechtsanwaltsgesellschaft mbH,
Habsburgerring 2, Westgate
50674 Cologne
Germany
India
Mindcrest
701/801, Gera – Commerzone
Building No 6 (R4)
Survey No 65
Kharadi
Pune 411014
Ireland
2 Dublin Landings
North Wall Quay
North Dock
Dublin
Dublin 1
Italy
Via dei Bossi 6
20121
Milano
Poland
plac Stanisława Małachowskiego 2
00-066 Warszawa
Poland
Qatar
Suite A
23rd Floor
Tornado Tower
PO Box 9417
Doha
Qatar
Spain
Escoles Pies 102
08017 Barcelona
Serrano 116
28006 Madrid
Gran Vía Marqués del Turia
55 46005 Valencia
United Arab Emirates
Office 902,
Tower 2
Al Fattan Currency House
DIFC PO Box 507104
Dubai
United States of America
Mindcrest
425 S. Financial Place
Suite 1100
Chicago
IL 60605
DWF Claims (USA) LLC
740 Waukegan Road
Suite 340
Deerfield
IL 60015
176 DWF Group plc | Annual Report and Accounts 2022
Other information
CBP013969
Revive Silk is a white triple coated
sheet,manufactured from FSC
®
Recycled
certified fibre derived from 100% pre- and
post-consumer waste.
Manufactured in accordance with ISO
certified standards for environmental,
quality and energy management.
DWF Group plc | Annual Report and Accounts 2022
DWF Group plc
20 Fenchurch Street
London EC3M 3AG
T +44 (0)333 320 2220
dwfgroup.com