B.p Marsh Regulatory News (BPM)

Date: 6 June 2017

On behalf of: B.P. Marsh & Partners PLC ("B.P. Marsh", "the Group" or "the Company")

Embargoed until: 0700hrs

B.P. Marsh & Partners Plc

FINAL RESULTS FOR THE YEAR TO 31 JANUARY 2017

B.P. Marsh & Partners PLC, the niche venture capital provider to early stage Financial Services businesses, announces its audited Group final results for the year to 31 January 2017.

The highlights of the results are:

· Increase in the Equity Value of the Portfolio of 22.1% over the year

· Net Asset Value of £79.7m (31 January 2016: £70.8m), a 12.5% increase, net of Dividend

· Net Asset Value increase to 273p per share (31 January 2016: 243p)

· Total return to Shareholders in the year of 13.9% (2016: 13.7%)

· Consolidated profit after tax of £9.8m (31 January 2016: £8.7m)

· Average Net Asset Value annual compound growth rate of 11.4% since 1990

· Final Dividend of 3.76p per share declared (31 January 2016: 3.42p), a 9.9% increase

· Cash and treasury funds balance of £12.6m at year end

· Three new investments - ARB, Fiducia and SSRU

· Further investment into LEBC, Nexus and PLUM

· Three disposals - Hyperion, R&Q and Broucour

· Agreement reached on Besso and Trireme disposals (completion post Year End)

· Current uncommitted cash of £29.2m

"We have concluded a further year in which our Company has built on its past achievements. The portfolio businesses continue to perform well as we support them in their development, we have interesting new investment opportunities to complete and a much increased supply of cash"

Brian Marsh OBE, Chairman

For further information, please contact:

Redleaf Communications Email: bpmarsh@redleafpr.com

Emma Kane / David Ison Tel: 020 7382 4732

Chairman's Statement

I am pleased to present the audited Consolidated Financial Statements of B.P. Marsh & Partners PLC for the year ended 31 January 2017.

The financial year proved to be one of the most productive of our 27 year history, with three new investments, three disposals, two further investments in the existing portfolio and agreement reached on the sale of our investment in Besso. The value of the investment portfolio increased by 22.1% in the year and our Net Asset Value by 12.5%, demonstrating the momentum we have been building in recent years.

The results show the Group to be in a strong position, with robust profitability, a healthy cash balance and an attractive portfolio of growth investments. This puts us in a good position to continue to develop and deliver attractive returns over the long-term for our investors, with a Total Shareholder Return in the year of 13.9% and an average NAV compound annual growth rate of 11.4% since 1990.

During the year we agreed the disposal of our investment in Besso, which brought to a close two decades of partnership. We also completed our exit from Hyperion. These investments typify our investment approach at B.P. Marsh; long-term, patient development of early stage businesses in partnership with ambitious management teams. We view all of our investments as a true partnership and we supported, counselled and encouraged Besso and Hyperion through relationships of over twenty years. Our internal rate of return (IRR) on Besso was 21.9% since 1995 and on Hyperion was 25.6% since 1994, proving the effectiveness of our investment model.

We made three new investments during the year. The first was in an established reinsurance broker based in Singapore, Asia Reinsurance Brokers PTE Ltd. We also launched two start-up Managing General Agency businesses: Fiducia in Leeds, UK, and SSRU in Toronto, Canada. During the year, we disposed of non-core holdings in Randall & Quilter and Broucour.

In addition, we made further investments in the existing portfolio, in Nexus, LEBC and PLUM. All of these businesses are making significant headway in their sectors and we believe have exciting futures.

Subsequent to the year-end we have made an investment in CBC, an established Lloyd's Broker, completed the disposal of Besso, and also disposed of our investment in Trireme by sale back to our Texas-based partners, US Risk Insurance Group Inc.

To reflect the growth in our business and to enable us effectively to exploit our pipeline opportunities, the Board agreed in February 2017 that we would increase our initial investment limit from £3m to £5m. The Board will continue to strike a balance between rewarding shareholders by generating value through investing funds in opportunities that will deliver long-term capital growth and a sustainable ongoing dividend. The Final Dividend declared of 3.76p per share is an increase of 10% on the previous year and represents a yield of just under 2% (based on the Company's share price as at 5 June 2017). The Board is aiming at least to maintain this level in the coming two years.

The Company's share price increased by 35% from 1 February 2016 to year end, and there has been a narrowing in the discount to NAV at which the Company's shares trade in the same period. We maintain our efforts to close this gap and will continue our policy to make low volume share buy backs when the NAV discount reaches 25% and when trading restrictions allow.

We have now been in business for 27 years and over the last five years in particular have built upon our reputation for being the leading investor in our corner of the market. Our team is fully focused on bringing in new investments, tending to the portfolio and developing our network, whilst ensuring our story is more widely known in the broader investment community. I believe that our momentum is building and that our management team is well equipped to continue to drive the business forward.

Business Update

Summary of Developments in the Portfolio

During the financial year ended 31 January 2017 and in the ensuing months to date, the following developments have taken place within the Group and its portfolio:

New Investments

Asia Reinsurance Brokers PTE Ltd ("ARB")

The Group extended its geographic spread when it invested in ARB, the Singapore-based specialist reinsurance broker on 21 April 2016, acquiring a 20% shareholding for a total consideration of SGD $2.40m.

ARB was established in 2008, following a management buy-out of the business from AJ Gallagher, led by the CEO, Richard Austen. The business has offices in Singapore, Malaysia, the Philippines and Indonesia.

The Group considered this an exciting opportunity to invest in a well-established, profitable business with an experienced management team and strong growth potential.

The Fiducia MGA Company Ltd ("Fiducia")

On 23 November 2016, the Group subscribed for a 25% shareholding in Fiducia, for a consideration of £0.075m alongside a loan facility of £1.75m. Of this, £0.035m was drawn down on completion and the remainder is subject to Fiducia attaining agreed targets.

Fiducia is a start-up registered Lloyd's Coverholder specialising in Marine risks and based in Leeds, UK. The Founder and CEO, Gerry Sheehy, has over 30 years' insurance industry experience.

Stewart Specialty Risk Underwriting Ltd ("SSRU")

The Group completed its investment into SSRU on 30 January 2017, subscribing for a 30% shareholding.

The investment represents a further geographic growth step for the Group, with this business based in Toronto, Canada. SSRU is a start-up Managing General Agency and, like Fiducia, was thinly capitalised. In addition to the equity, a loan facility of CAD $0.85m has been provided, with drawdown being subject to SSRU meeting certain conditions.

SSRU provides specialist insurance products to clients in the construction, manufacturing, onshore Energy and Transportation sectors. Its Founder and CEO, Stephen Stewart, has over 25 years of industry experience.

Disposals

Hyperion Insurance Group Ltd ("Hyperion")

In July 2016 the Group realised its remaining 1.6% stake in Hyperion for £7.3m cash. As announced on the 5 January 2017, Hyperion repaid, in full, its remaining £6.04m loan at the end of January 2017, allowing these funds to be reinvested to grow the ongoing equity portfolio.

R&Q and Broucour

The Group streamlined its portfolio by disposing of two non-core investments. On 22 April 2016, the Group sold its 49% stake in The Broucour Group Ltd ("Broucour") and on 4 May 2016, the Group sold its 1.32% stake in Randall & Quilter Investment Holdings Ltd ("R&Q").

Portfolio Developments

United Kingdom

Nexus Underwriting Management Ltd ("Nexus")

The Group acquired an additional 6.87% in Nexus, the independent specialty Managing General Agency from two of the founding shareholders for a total consideration of £4m on 15 December 2016.

The Group made an initial investment in Nexus in August 2014, acquiring 5%, and since then has built on this position with a number of follow-on investments. The Group's current shareholding in Nexus stands at 18.6%.

Since investment in August 2014, Nexus has seen premium income grow by 93%, from £56m to £108m in 2016. In the same period, commission income has increased 59%, from £12.3m to £19.6m with EBITDA increasing 92%, from £2.6m to £5m.

In 2017 Nexus are forecasting Gross Written Premium Income of £120m and EBITDA of £7m, a 40% EBITDA increase over prior year, this growth will be generated from organic growth from within the business, without any M&A activity.

LEBC Holdings Ltd ("LEBC")

LEBC, the national IFA and pension advisory business with 15 branches across the UK, continues to grow strongly, boosted by investment in technology to build a hybrid advice and technology model and success in targeting the 'at retirement' market.

The Group acquired an additional 8.02% in LEBC from legacy shareholders for £1.91m in June 2016 and then acquired a further 0.42% for £0.11m in November 2016 and the Group's holding now stands at 43.03%.

LEBC Group Ltd, LEBC's trading subsidiary, reported a turnover of £15.4m and a trading profit of £2.1m for the year to 30 September 2016, a 17% increase on trading profit in the prior year and despite the impact of the Sunset Clause banning legacy payments that came into effect on 6 April 2016 as part of the FCA's Retail Distribution Review (RDR).

LEBC is undertaking the process of direct regulation by the FCA and will accordingly leave the Tenet network once approval is obtained.

Walsingham Motor Insurance Ltd ("Walsingham")

Walsingham is a Managing General Agency providing fleet insurance cover for taxis, couriers, vans and general fleets with A- rated capacity from New India Assurance Co. Ltd. Walsingham has seen fleet Gross Written Premiums increase to £19.9m in the year to 31 March 2017, from £12.4m in the year to 31 March 2016, representing an overall increase of 60% inclusive of renewals.

Walsingham is making good progress in line with the Group's expectations and is on course to achieve its 2017 budget.

Europe

Summa Insurance Brokerage SL ("Summa")

For the year ended 31 December 2016 Summa performed in line with budget, reporting revenue of €6.1m and recurring EBITDA of €1.4m.

The Spanish economy's GDP grew by 3.2% in 2016, better than the expected 2.8%. This level of growth made Spain one of the fastest-growing countries in the Eurozone.

In regard to the Spanish Insurance sector, gross written premiums reached around €63.8bn in 2016, an increase of c. 12% over that of 2015. Despite some consolidation following the financial crisis, the Spanish insurance intermediary market remains fragmented, with a high number of small regional players. Summa is one of the largest consolidators of regional insurance brokers in Spain, with an extensive network of offices and agents throughout the country. As such, the Group believes that Summa is well positioned to take advantage of growth opportunities moving forward.

To this end, the Group has been instrumental in the appointment of Nicholas Walker to the Board of Summa as a Non-Executive Director. Nick Walker is a founding Partner of Socios Financieros, S.A., one of Spain's leading independent corporate finance firms, based in Madrid. He brings to the Board of Summa extensive local and international M&A and corporate finance experience and will assist Summa's Board in all areas of its work.

Australia

Sterling Insurance Holdings (PTY) Ltd ("Sterling")

MB Prestige Holdings (PTY) Ltd ("MB")

The Group's two investments in Australia, Sterling and MB, continue to perform in line with or above the Group's expectations at the current time.

South Africa

Bastion Reinsurance Brokerage (PTY) Ltd ("Bastion Re")

Bulwark Investment Holdings (PTY) Ltd ("Bulwark")

Property and Liability Underwriting Managers (PTY) Ltd ("PLUM")

The Group's South African investments, Bastion Re, PLUM, and Bulwark, continue to gain traction within their markets and are performing in line with the Group's expectations.

During the year PLUM met its EBITDA target, activating the deferred consideration provisions in the original investment documents. The Group paid an additional £300,000 as deferred consideration by October 2016. On 5 October 2016 the Group also acquired a further 22.5% for consideration of £613,400 taking the Group's holding in PLUM to 42.5%.

Post Year End Investments

CBC (UK) Ltd ("CBC")

The Group announced on 17 February 2017 that it had acquired an effective 35% shareholding in CBC.

CBC is an established Lloyd's retail and wholesale broker, serving commercial and personal clients as well as providing broking solutions to intermediaries. For the year ending 31 December 2017, CBC has a forecast revenue of £5.54m and a forecast EBITDA of £0.644m.

The Group partnered with CBC's management team to buy out an existing shareholder, delivering a 50% shareholding to the CBC management team, a 15% shareholding to Andrew Wallas, the newly appointed Non-Executive Chairman and 35% to B.P. Marsh. The transaction was undertaken by the Group through a newly-established company, Paladin Newco Ltd ("Paladin"), to which the Group provided £4m of funding, with subscription for the 35% shareholding in Paladin of £3,500 and provision of a loan facility of £3.99m, which was fully drawn down on completion.

CBC's CEO, Rob Cottingham, has over 30 years' insurance sector experience and the new Chairman, Andrew Wallas, is well known to the Group from his 40 years in the industry, including at Glencairn Ltd and as Non-Executive Chairman of Martello Underwriting.

Post Year End Disposals

Besso Insurance Group Ltd ("Besso")

The Group announced on 4 January 2017 that it had reached agreement to sell its entire 37.94% shareholding in Besso for cash, with completion subject to, inter alia, regulatory approval, to BGC Partners Inc ("BGC").

Completion was announced on 28 February 2017, with the Group receiving £21.6m in cash (net of transaction costs and pre-tax) following BGC's 100% acquisition of Besso for an enterprise valuation of approximately £70.5m. Various adjustments were then made by reference to completion accounts, resulting in a further £0.4m consideration proceeds (net of transaction costs and pre-tax) being payable to the Group.

The Group's final proceeds from this sale represents an increase of £0.7m on the valuation at 31 January 2017 and an IRR of 21.9% since 1995. It also represents an increase of 58% on its last published valuation of the same stake in Besso of £13.9m at 31 July 2015, being the last valuation prior to the commencement of the sale process.

Trireme Insurance Group Ltd ("Trireme")

On 3 April 2017 the Group announced the disposal of its 29.94% shareholding in Trireme for £2.96m cash, to its fellow shareholder US Risk Midco, LLC ("US Risk"). This was approved at a General Meeting of the Company's Members on 19 April 2017.

This disposal represents an uplift of 15% over the Group's valuation at 31 July 2016 and an IRR (including fees) of 15.6% since 2010, the date of investment.

As part of the disposal, Trireme repaid in full the outstanding £2.16m drawn down under its £2.42m loan facility with the Group, plus fees and any accrued interest. As such, the total pre-tax proceeds received by the Group amounted to £5.19m.

From 2010 to the year ended 31 December 2016, Trireme grew Revenue from £5.5m to £12.76m and EBITDA from £0.3m to £1.76m. During the period of investment the Group played a key role in the acquisition and integration of the broking and underwriting businesses James Hampden International Insurance Brokers Ltd and Abraxas Insurance AG into the Trireme group and oversaw the establishment of Antarah Underwriting Ltd, the Managing General Agent, in Dubai. The Group was also instrumental in assisting Trireme with its management incentive programme and has served as a resource for senior management throughout the seven years of partnership.

In July 2016 the private equity house Kohlberg & Company LLC made an investment in US Risk Insurance Group Inc which resulted in that business reassessing their strategy and looking to simplify their partnership arrangements with other investors. Agreement was therefore reached on the Group's disposal of its interest in Trireme.

Investment Strategy

Following the year end, the Board approved an increase in the Group's upper limit for new investments to £5m, previously limited to £3m.

The Board agreed to this change to the Company's investment criteria having considered the Company's cash resources following the receipt of funds from the disposals of Hyperion and Besso. The Board has agreed the Company should widen its investment criteria to consider investments up to £5m in the first round to enable the Company to consider a wider range of opportunities.

All other investment criteria remain the same:

· To take minority positions in financial services intermediary businesses;

· Investments being relationship-driven and long-term; and

· No set exit on investment (average holding period is five years, however, the longest has been over 20 years).

Dividend

The Board has recommended a dividend of 3.76p per share (£1.1m) for the financial year ending 31 January 2017. The dividend will be paid on 28 July 2017 to all Shareholders on the Register as at 30 June 2017.

This represents an increase of 10% over the dividend of 3.42p per share (£1m) paid in respect of the prior year.

It is the Board's aspiration to maintain a dividend of at least 3.76p per share for the years ending 31 January 2018 and 31 January 2019, subject to ongoing review and approval by the Board and the Company's shareholders.

When considering payment of such a dividend, the Board will continue to strike a balance between rewarding shareholders by generating value through investing available funds in opportunities that will deliver long-term capital growth and providing a meaningful dividend.

Share Buy-Backs

The Board's published Share Buy-back Policy is to continue to pursue a strategy of undertaking low volume share buy-backs at times when the Group's Share Price represents a discount to Net Asset Value of 25% or more, with a maximum of £150,000 allocated by the Company to the Policy. The Board considers that this is a useful stabilising mechanism during periods of market volatility.

As such, following the EU Referendum decision, the Group undertook a buyback of 5,726 ordinary shares of 10p each in the Company ("Ordinary Shares") at a price of 153.78p per Ordinary Share, with shares being held in Treasury. Further buy-backs took place post-year end and a total of 34,372 shares are held in Treasury currently.

New Business Opportunities

The financial year closed with a total of 84 new opportunities having been presented to the Group during the year, in comparison with 71 in the previous year. The increased deal flow reflects increased M&A activity in the global insurance market in general and an increased level of activity by the management team in developing the Group's network that is the source of new opportunities. This has resulted in a strong pipeline for the Group to consider and it is confident that it is well placed to capitalise on this, applying the Company's usual rigour and disciplined approach to the investment process.

Having completed investment in two start-up Managing General Agencies, in Leeds and Toronto, Canada, and an established broker in Singapore during the year, the Group's attention is focused on investment in established businesses in the UK and continuing assessment of the opportunities presented in North America.

This focus was rewarded in February, with the announcement of the investment in the Lloyd's broking business CBC.

The investment in Canada, SSRU, represents the first step back into the North American continent, as part of the Group's policy of expanding into territories where there is good opportunity for growth in partnership with a London-based investor and a suitably developed regulatory and compliance environment. With this policy in mind, North America continues to represent a logical opportunity base.

Of the 84 proposals, 63% fell within the insurance sector, the area of the Group's specialism. The opportunities have ranged from start-ups to investments in established businesses. These have included brokers and MGAs, as well as other intermediary businesses such as claims administrators. The Group has also looked at IFA and advisory businesses, specialist consultancy firms, as well as marketplace lending platforms and Software-as-a-service enquiries.

At year end the Group had £12.6m in cash and treasury funds. Following the realisations of Besso and Trireme, the Group currently has £29.2m available for new investment opportunities after commitments.

Financial Performance

At 31 January 2017, the net asset value of the Group was £79.7m, or 273p per share (2016: £70.8m, or 243p per share) including a provision for deferred tax. This equates to an increase in net asset value of 12.5% (2016: 12.4%) for the year.

The Group increased its dividend payment to £1.0m (or 3.42p per share) during the year, as announced previously (2016: £0.8m or 2.75p per share). Total shareholder return for the year was therefore 13.9% (2016: 13.7%) including the dividend payment and the net asset value increase.

The Group's investment portfolio movement during the year was as follows:

This equates to an increase in the portfolio valuation of 22.1% (2016: 23.8%).

The net asset value of £79.7m at 31 January 2017 represented a total increase in net asset value of £67.1m since the Group was originally formed in 1990 having adjusted for the £10.1m net proceeds raised on AIM and the original capital investment of £2.5m. The directors note that the Group has delivered an annual compound growth rate of 11.4% in Group net asset value after running costs, realisations, losses, distributions and deferred tax since 1990.

The consolidated profit on ordinary activities after taxation increased by 12.6% to £9.8m (2016: profit of £8.7m). The consolidated profit on ordinary activities before taxation was £12.2m (2016: profit of £10.7m), of which £11.2m was derived from unrealised gains on revaluing the equity investment portfolio in line with current market conditions, an increase of 9.5% on the previous year (2016: net unrealised gains of £10.3m). The Group's strategy is to cover expenses from the portfolio yield. On an underlying basis, including treasury returns, but excluding unrealised equity and all underlying treasury portfolio movement, this was achieved with a pre-tax profit of £0.6m for the year (2016: £0.5m).

The Group invested £1.4m in new equity investments and £6.9m for follow-on equity financing to its existing portfolio during the year. In addition the Group provided new loans for working capital to the portfolio of £1.2m. Repayment of loans by the portfolio amounted to £7.3m in the year. Cash funds (including treasury funds) at 31 January 2017 were £12.6m.

Overall, income from investments increased by 5.5% to £3.0m (2016: £2.8m). Dividend income increased by 23.2% over the year due to the strengthening performance of the portfolio companies, whilst income from loans fell by 16.6%, which was largely the result of the portfolio repaying debt in accordance with agreed repayment schedules. Fees were 50.8% higher mainly due to a number of one-off fees received in 2017 as well as fees derived from new investments.

The Group continues to invest in new and existing opportunities. Operating expenses, including costs of making new investments, increased by 31.0% during the year to £3.1m (2016: £2.4m). Of this, £0.1m related to expenses directly incurred in making new investments which, under IFRS, need to be expensed. £0.2m related to a provision against doubtful debts, £0.1m related to the newly created SIP Trust and £0.05m for costs incurred in the office move. Excluding these atypical expenses, overall expenses rose by £0.25m (10.0%) in proportion with managing a growing portfolio.

Due to favourable market conditions, the Group's treasury funds increased by 8.6% over the year (net of fund management charges) (2016: 0.4%).

Outlook

There is no doubt that there are challenges ahead for the UK and its economy as it begins preparations to exit the European Union. We believe our business is equipped to meet these challenges and that our focus on the long-term will serve us well in the coming months and years ahead. Continued global insurance M&A activity presents opportunity for our portfolio and our pipeline, as individuals or teams of people seek to start new enterprises or join smaller businesses, allowing their creativity and entrepreneurial spirit to flourish. The portfolio businesses are showing solid growth and our management team is keen to continue to demonstrate their commitment to our business and to deliver to our shareholders.

Investments

As at 31 January 2017 the Group's equity interests were as follows:

Asia Reinsurance Brokers Pte Limited

(www.arbrokers.asia)

In April 2016 the Group invested in Asia Reinsurance Brokers Pte Limited ("ARB"), the Singapore headquartered independent specialist reinsurance and insurance risk solutions provider. ARB was established in 2008, following a management buy-out of the business from AJ Gallagher, led by the CEO, Richard Austen.

Date of investment: April 2016

Equity stake: 20%

31 January 2017 valuation: £1,353,000

Bastion Reinsurance Brokerage (PTY) Limited

(www.bastionre.co.za)

In December 2014 the Group invested in Bastion Reinsurance Brokerage (PTY) Limited ("Bastion"), a start-up Reinsurance Broker based in South Africa. Established in May 2013 by its CEO and Chairman, Bastion specialises in the provision of reinsurance solutions over a number of complex issues, engaged by various insurance companies and managing general agents.

Date of investment: December 2014

Equity stake: 35%

31 January 2017 valuation: £100,000

Besso Insurance Group Limited

(www.besso.co.uk)

In February 1995 the Group assisted a specialist team departing from insurance broker Jardine Lloyd Thompson Group in establishing Besso Holdings Limited. The company specialises in insurance broking for the North American wholesale market and changed its name to Besso Insurance Group Limited ("Besso") in June 2011.

Date of investment: February 1995

Equity stake: 37.94%

31 January 2017 valuation: £21,309,000

Bulwark Investment Holdings (PTY) Limited

In April 2015 the Group, alongside its existing South African Partners, established a new venture, Bulwark Investment Holdings (PTY) Limited ("Bulwark"), a South African based holding company which establishes Managing General Agents in South Africa. To date Bulwark has established two new Managing General Agents: Preferred Liability Underwriting Managers (PTY) Limited and Mid-Market Risk Acceptances (PTY) Limited.

Date of investment: April 2015

Equity stake: 35%

31 January 2017 valuation: N/A

The Fiducia MGA Company Limited

(www.fiduciamga.co.uk)

Fiducia is a recently established UK Marine Cargo Underwriting Agency, established by its CEO Gerry Sheehy. Fiducia is a Lloyd's Coverholder which specialises in the provision of insurance solutions across a number of Marine risks including, Cargo, Transit Liability, Engineering and Terrorism Insurance.

Date of investment: November 2016

Equity stake: 20%

31 January 2017 valuation: £75,000

LEBC Holdings Limited

(www.lebc-group.com)

In April 2007 the Group invested in LEBC, an Independent Financial Advisory company providing services to individuals, corporates and partnerships, principally in employee benefits, investment and life product areas.

Date of investment: April 2007

Equity stake: 43.03%

31 January 2017 valuation: £13,058,000

MB Prestige Holdings PTY Limited

(www.mbinsurance.com.au)

In December 2013 the Group invested in MB Prestige Holdings PTY Ltd ("MB Group"), the parent Company of MB Insurance Group PTY a Managing General Agent, headquartered in Sydney, Australia. MB Group is recognised as a market leader in respect of prestige motor vehicle insurance in all mainland states of Australia.

Date of investment: December 2013

Equity stake: 40%

31 January 2017 valuation: £1,585,000

Nexus Underwriting Management Limited

(www.nexusunderwriting.com)

In 2014 the Group invested in Nexus Underwriting Management Limited ("Nexus"), an independent specialty Managing General Agency, founded in 2008. Through its operating subsidiaries Nexus specialises in the provision of Directors & Officers, Professional Indemnity, Financial Institutions, Accident & Health, Trade Credit, Political Risks Insurance, Surety, Bond and Latent Defect Insurance, both in the UK and globally.

Date of investment: August 2014

Equity stake: 18.6%

31 January 2017 valuation: £13,915,000

Property & Liability Underwriting Managers (PTY) Limited

(www.plumsa.co.za)

In June 2015 the Group completed an investment in Property And Liability Underwriting Managers (PTY) Limited ("PLUM"), a Managing General Agent based in Johannesburg, South Africa. PLUM specialises in large corporate property insurance risks in South Africa and is supported by both domestic South African insurance capacity and A-rated international reinsurance capacity.

Date of investment: June 2015

Equity stake: 42.5%

31 January 2017 valuation: £1,846,000

Stewart Specialty Risk Underwriting Ltd

A Canadian based Managing General Agent, providing insurance solutions to a wide array of clients in the Construction, Manufacturing, Onshore Energy, Public Entity and Transportation sectors. SSRU was established by its CEO Stephen Stewart, who has over 25 years' experience in the insurance industry having had senior management roles at both Ironshore and Lombard in Canada.

Date of investment: January 2017

Equity stake: 35%

31 January 2017 valuation: £0

Sterling Insurance PTY Limited

(www.sterlinginsurance.com.au)

In June 2013, in a joint venture enterprise alongside Besso, (Neutral Bay Investments Limited) the Group invested in Sterling Insurance PTY Limited, an Australian specialist underwriting agency offering a range of insurance solutions within the Liability sector, specialising in niche markets including mining, construction and demolition.

Date of investment: June 2013

Equity stake: 19.7%

31 January 2017 valuation: £2,378,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Madrid-based Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain. Through acquisition Summa is able to achieve synergistic savings, economies of scale and greater collective bargaining thereby increasing overall value.

Date of investment: January 2005

Equity stake: 77.25%

31 January 2017 valuation: £4,840,000

Trireme Insurance Group Limited

(www.oxfordinsurancebrokers.co.uk)

(www.jhinternational.co.uk)

(www.abrax.ch)

In July 2010 the Group completed an investment in Trireme Insurance Group Limited (formerly known as US Risk (UK) Ltd), the parent company of Oxford Insurance Brokers Ltd and James Hampden International Insurance Brokers Ltd, London-based Lloyd's specialist international reinsurance and insurance intermediaries. Trireme Insurance Group Limited is also the parent company of Abraxas Insurance AG, a Swiss-based underwriting agency specialising in Directors & Officers Liability Insurance, Professional Liability Insurance, Insurance for Financial Institutions, Medical malpractice Insurance, Property Insurance and Event Insurance.

Date of investment: July 2010

Equity stake: 29.94%

31 January 2017 valuation: £2,908,000

Walsingham Motor Insurance Limited

(www.walsinghamunderwriting.com)

In December 2013 the Group invested in Walsingham Motor Insurance Limited ("WMIL"), a niche UK fleet motor Managing General Agency, which commenced trading in July 2013. In 2015 the Group acquired a further 10.5% equity, taking the current shareholding to 40.5%.

Date of investment: December 2013

Equity stake: 40.5%

31 January 2017 valuation: £200,000

These investments have been valued in accordance with the accounting policies on Investments set out in note 1 of the Consolidated Financial Statements.

Investments made after the year end:

CBC UK Limited

(www.cbcinsurance.co.uk)

Established in 1985, CBC is a Retail and Wholesale Lloyd's Insurance Broker, offering a wide range of services to commercial and personal clients as well as broking solutions to intermediaries. The Group assisted in an MBO of CBC allowing Management to buy out a major shareholder.

Date of investment: February 2017

Equity stake: 35%

31 January 2017 valuation: N/A

Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST JANUARY 2017

The result for the year is wholly attributable to continuing activities.

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION

31ST JANUARY 2017

(Company Number: 05674962)

The Financial Statements were approved by the Board of Directors and authorised for issue on 5th June 2017

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2017

All differences between the amounts stated in the Consolidated Statement of Cash Flows and the Consolidated Statement of Comprehensive Income are attributed to non-cash movements.

†The above cash and cash equivalents balance excludes treasury portfolio funds which are referred to in Note 13. Including treasury portfolio balances of £5,230k, total available cash and treasury portfolio funds as at 31st January 2017 was £12,557k (as at 31st January 2016: £5,296k, including £3,482k of treasury portfolio funds).

\* These items are now correctly included under operating activities.

PARENT COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2017

No Company Statement of Cash Flows has been prepared as there has been no cash flow movement in the Company during the current and previous period, other than dividends received from B.P. Marsh & Company Limited ("BPMCL"), a subsidiary company, which were settled via an intercompany adjustment. The ordinary dividend payment to the Company's members during the year was paid directly by BPMCL and reflected in the Company through an intercompany adjustment. Accordingly the Company's "cash and cash equivalents" balance as at 31st January 2017 remains at £1k (2016: £1k).

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST JANUARY 2017

Refer to Note 20 for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST JANUARY 2017

1. ACCOUNTING POLICIES

B.P. Marsh & Partners Plc is a public limited company incorporated in England and Wales under the Companies Act 2006 and domiciled in the United Kingdom. The address of the Company's registered office is 5th Floor, 4 Matthew Parker Street, London SW1H 9NP. The consolidated financial statements for the year ended 31st January 2017 comprise the financial statements of the Parent Company and its consolidated subsidiaries (collectively "the Group").

Basis of preparation of financial statements

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted for use by the European Union ("IFRS"), and in accordance with the Companies Act 2006.

The consolidated financial statements are presented in sterling, the functional currency of the Group, rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances, the results of which form the basis of judgements about the carrying amounts of assets and liabilities. Actual results may differ from those amounts.

In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements:

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10: Consolidated Financial Statements ("IFRS 10") are required to account for their investments in controlled entities, as well as investments in associates at fair value through profit or loss. Subsidiaries that provide investment related services or engage in permitted investment related activities with investees that relate to the parent investment entity's investment activities continue to be consolidated in the Group results. The criteria which define an investment entity are currently as follows:

a) an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

b) an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

c) an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Group's annual and interim consolidated financial statements clearly state its objective of investing directly into portfolio investments and providing investment management services to investors for the purpose of generating returns in the form of investment income and capital appreciation. The Group has always reported its investment in portfolio investments at fair value. It also produces reports for investors of the funds it manages and its internal management report on a fair value basis. The exit strategy for all investments held by the Group is assessed, initially, at the time of the first investment and this is documented in the investment paper submitted to the Board for approval.

The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties. The Board has concluded that B.P. Marsh & Partners Plc and its two trading subsidiaries, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, which provide investment related services on behalf of B.P. Marsh & Partners Plc, all meet the definition of an investment entity. These conclusions will be reassessed on an annual basis for changes to any of these criteria or characteristics.

Application and significant judgments

When it is established that a parent company is an investment entity, its subsidiaries are measured at fair value through profit or loss. However if an investment entity has subsidiaries that provide services that relate to the investment entity's investment activities, exception to the Amendment of IFRS 10 is not applicable as in this case, the parent investment entity still consolidates the results of its subsidiaries. Therefore the results of B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited continued to be consolidated into its Group financial statements for the year.

The most significant estimates relate to the fair valuation of the equity investment portfolio as detailed in Note 12 to the Financial Statements. The valuation methodology for the investment portfolio is detailed below. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

Adopted IFRS not yet applied

None of the new standards, interpretations or amendments, which are effective for the first time in these consolidated financial statements, has had a material impact on these consolidated financial statements.

Standards that have been issued, but are not yet effective for the year ended 31st January 2017 include:

Disclosure Initiative (Amendments to IAS 7) - effective 1st January 2017

Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12) - effective 1st January 2017

IFRS 15: Revenue from Contracts with Customers - effective 1st January 2018

IFRS 9: Financial Instruments - effective 1st January 2018

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) - effective 1st January 2018

IFRS 16: Leases - effective 1st January 2019

The Board is currently assessing the impact of IFRS 9. All other standards and interpretations are not expected to have a material impact on the financial statements.

Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

b) exposure, or rights, to variable returns from its involvement with the investee; and

c) the ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a) rights arising from other contractual arrangements; and

b) the Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control.

B.P. Marsh & Partners Plc ("the Company"), an investment entity, has two subsidiary investment entities, B.P. Marsh & Company Limited and Marsh Insurance Holdings Limited, that provide services that relate to the Company's investment activities. The results of these two subsidiaries, together with other subsidiaries (except for Summa Insurance Brokerage, S.L. ("Summa")), are consolidated into the Group consolidated financial statements. The Group has taken advantage of the Amendment to IFRS 10 not to consolidate the results of Summa. Instead the investments in Summa are valued at fair value through profit or loss.

(i) Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Investments that are held as part of the Group's investment portfolio are carried in the statement of financial position at fair value even though the Group may have significant influence over those companies.

Business combinations

The results of subsidiary undertakings are included in the consolidated financial statements from the date that control commences until the date that control ceases. Control exists where the Group has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

All business combinations are accounted for by using the acquisition accounting method. This involves recognising identifiable assets and liabilities of the acquired business at fair value. Goodwill represents the excess of the fair value of the purchase consideration for the interests in subsidiary undertakings over the fair value to the Group of the net assets and any contingent liabilities acquired. The one exception to the use of the acquisition accounting method was in 2006 when B.P. Marsh & Partners Plc became the legal parent company of B.P. Marsh & Company Limited in a share for share exchange transaction. This was accounted for as a reverse acquisition, such that no goodwill arose, and a merger reserve was created reflecting the difference between the book value of the shares issued by B.P. Marsh & Partners Plc as consideration for the acquisition of the share capital of B.P. Marsh & Company Limited. This compliance with IFRS 3: Business Combinations ("IFRS 3") also represented a departure from the Companies Act.

Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Investments that are held as part of the Group's investment portfolio are carried in the Consolidated Statement of Financial Position at fair value even though the Group may have significant influence over those companies. This treatment is permitted by IAS 28: Investment in Associates ("IAS 28"), which requires investments held by venture capital organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39: Financial Instruments ("IAS 39"), with changes in fair value recognised in the profit or loss in the period of the change. The Group has no interests in associates through which it carries on its business.

No Statement of Comprehensive Income is prepared for the Company, as permitted by Section 408 of the Companies Act 2006. The Company made a profit for the year of £9,794,327, prior to a dividend distribution of £999,335 (2016: profit of £8,700,450 prior to a dividend distribution of £802,093).

Employee services settled in equity instruments

The Group has issued cash settled share-based awards to certain employees. A fair value for the cash settled share awards is measured at the date of grant. The Group measured the fair value using the Black-Scholes method which was considered to be the most appropriate valuation technique to value the awards.

The fair value of the award is recognised as an expense over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will eventually vest. The level of vesting is reviewed annually and the charge is adjusted to reflect actual or estimated levels of vesting with the corresponding entry to capital contribution.

During the period the Group also established an HMRC sanctioned Share Incentive Plan ("SIP"). Ordinary shares in the Company (previously repurchased and held in Treasury by the Company) have been transferred to The B.P. Marsh SIP Trust ("the SIP Trust"), an employee share trust, in order to be issued to eligible employees.

Under the rules of the SIP, eligible employees can each be granted up to £3,600 worth of ordinary shares ("Free Shares") by the SIP Trust in each tax year. The number of shares granted is dependent on the share price at the date of grant. In addition, all eligible employees have been invited to take up the opportunity to acquire up to £1,800 worth of ordinary shares ("Partnership Shares") in each tax year and for every Partnership Share that an employee acquires, the SIP Trust will offer two ordinary shares in the Company ("Matching Shares") up to a total of £3,600 worth of shares. The Free and Matching Shares are subject to a one year forfeiture period, however the awards are not subject to any vesting conditions, hence the related expenses are recognised when the awards are made and are apportioned over the forfeiture period.

The fair value of the services received is measured by reference to the listed share price of the parent company's shares listed on the AIM on the date of award of the free and matching shares to the employee.

Investments - equity portfolio

All equity portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair value.

The Board conducts the valuations of equity portfolio investments. In valuing equity portfolio investments, the Board applies guidelines issued by the International Private Equity and Venture Capital Valuation ("IPEVCV") Committee. The following valuation methodologies have been used in reaching the fair value of equity portfolio investments, some of which are in early stage companies:

a) at cost, unless there has been a significant round of new equity finance in which case the investment is valued at the price paid by an independent third party. Where subsequent events or changes to circumstances indicate that an impairment may have occurred, the carrying value is reduced to reflect the estimated extent of impairment;

b) by reference to underlying funds under management;

c) by applying appropriate multiples to the earnings and revenues and/or premiums of the investee company; or

d) by reference to expected future cash flow from the investment where a realisation or flotation is imminent.

Both realised and unrealised gains and losses arising from changes in fair value are taken to the Consolidated Statement of Comprehensive Income for the year. In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within a "fair value reserve" separate from retained earnings. Transaction costs on acquisition or disposal of equity portfolio investments are expensed in the Consolidated Statement of Comprehensive Income.

Equity portfolio investments are treated as 'Non-current Assets' within the Consolidated Statement of Financial Position unless the directors have committed to a plan to sell the investment and an active programme to locate a buyer and complete the plan has been initiated. Where such a commitment exists, and if the carrying amount of the equity portfolio investment will be recovered principally through a sale transaction rather than through continuing use, the investment is classified as a 'Non-current asset as held for sale' under 'Current Assets' within the Consolidated Statement of Financial Position.

Income from equity portfolio investments

Income from equity portfolio investments comprises:

a) gross interest from loans, which is taken to the Consolidated Statement of Comprehensive Income on an accruals basis;

b) dividends from equity investments are recognised in the Consolidated Statement of Comprehensive Income when the shareholders rights to receive payment have been established; and

c) advisory fees from management services provided to investee companies, which are recognised on an accruals basis in accordance with the substance of the relevant investment advisory agreement.

Investments - treasury portfolio

All treasury portfolio investments are designated as "fair value through profit or loss" assets and are initially recognised at the fair value of the consideration. They are measured at subsequent reporting dates at fair market value as determined from the valuation reports provided by the fund investment manager.

Both realised and unrealised gains and losses arising from changes in fair market value are taken to the Consolidated Statement of Comprehensive Income for the year. In the Consolidated Statement of Financial Position the unrealised gains and losses arising from changes in fair value are shown within the retained earnings reserve as these investments are deemed as being easily convertible into cash. Costs associated with the management of these investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from treasury portfolio investments

Income from treasury portfolio investments comprises of dividends receivable which are either directly reinvested into the funds or received as cash.

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the property, plant and equipment cost less their estimated residual value, over their expected useful lives on the following bases:

Furniture & equipment - 5 years

Leasehold fixtures and fittings - over the life of the lease

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies at the reporting period are translated at the exchange rate ruling at the reporting period.

Transactions in foreign currencies are translated into sterling at the foreign exchange rate ruling at the date of the transaction.

Exchange gains and losses are recognised in the Consolidated Statement of Comprehensive Income.

Income taxes

The tax expense represents the sum of the tax currently payable and any deferred tax. The tax currently payable is based on the estimated taxable profit for the year. Taxable profit differs from net profit as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the date of the Consolidated Statement of Financial Position.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and of liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and it is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except 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.

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

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

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

Pension costs

The Group operates a defined contribution scheme for some of its employees. The contributions payable to the scheme during the period are charged to the Consolidated Statement of Comprehensive Income.

Operating leases

Rentals under operating leases are charged on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight- line basis over the period of the lease.

Financial assets and liabilities

Financial instruments are recognised in the Consolidated Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument. De-recognition occurs when rights to cash flows from a financial asset expire, or when a liability is extinguished.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the reporting period which are classified as non-current assets. They are stated at their cost less impairment losses.

Loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received net of issue costs associated with the borrowings. After initial recognition, these are subsequently measured at

amortised cost using the effective interest method, which is the rate that exactly discounts the estimated future cash flows through the expected life of the liabilities. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

Trade and other receivables

Trade and other receivables in the Consolidated Statement of Financial Position are initially measured at original invoice amount and subsequently measured after deducting any provision for impairment.

Cash and cash equivalents

Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents comprise cash and short-term deposits as defined above and other short-term highly liquid investments that are readily convertible into cash and are subject to insignificant risk of changes in value, net of bank overdrafts.

Trade and other payables

Trade and other payables are stated based on the amounts which are considered to be payable in respect of goods or services received up to the date of the Consolidated Statement of Financial Position.

International Financial Reporting Standards in issue but not yet effective

At the date of authorisation of these consolidated financial statements there are no IFRS or International Financial Reporting Standards Interpretations Committee ("IFRS IC") interpretations or amendments issued but not yet effective that would be expected to have a material impact on the Group.

2. SEGMENTAL REPORTING

The Group operates in one business segment, provision of consultancy services to, as well as making and trading investments in, financial services businesses.

The Group identifies its reportable operating segments based on the geographical location in which each of its investments is incorporated and primarily operates. For management purposes, the Group is organised and reports its performance by two geographic segments: UK & Channel Islands and Non UK & Channel Islands.

If material to the Group overall (where the segment revenues, reported profit or loss or combined assets exceed the quantitative thresholds prescribed by IFRS 8: Operating Segments ("IFRS 8")), the segment information is reported separately.

The Group allocates revenues, expenses, assets and liabilities to the operating segment where directly attributable to that segment. All indirect items are apportioned based on the percentage proportion of revenue that the operating segment contributes to the total Group revenue (excluding any realised and unrealised gains and losses on the Group's current and non-current investments).

Each reportable segment derives its revenues from three main sources from equity portfolio investments as described in further detail in Note 1 under 'Income from equity portfolio investments' and also from treasury portfolio investments as described in Note 1 under 'Income from treasury portfolio investments'.

All reportable segments derive their revenues entirely from external clients and there are no inter-segment sales.

Included within the operating income reported above are the following amounts requiring separate disclosure owing to the fact that they are derived from a single investee company and the total revenues attributable to that investee company are 10% or more of the total realised income generated by the Group during the period:

\* There are no disclosures shown for Nexus Underwriting Management Limited in the prior year as the total realised income derived from this investee company did not exceed the 10% threshold prescribed by IFRS 8 Operating Segments.

5. STAFF COSTS

The average number of employees, including all directors (executive and non-executive), employed by the Group during the year was 17 (2016: 17); 6 of those are in a management role (2016: 6) and 11 of those are in a support role (2016: 11). All remuneration was paid by B.P. Marsh & Company Limited.

During the year to 31st January 2015, Joint Share Ownership Agreements were entered into between certain directors and employees, the Company and B.P. Marsh Management Limited, a company wholly owned by the Executive Chairman and majority shareholder, Mr B.P. Marsh. Refer to Note 24 for further details.

During the year the Group also established a Share Incentive Plan ("SIP") under which certain eligible directors and employees were granted Ordinary shares in the Company. These shares are being held on behalf of these directors and employees within the B.P. Marsh SIP Trust. Refer to Note 24 for further details.

Charges of £66,740 (2016: £Nil) relating to the SIP and £2,013 (2016: £2,013) relating to the Joint Share Ownership Agreements are included within 'Other employment costs' above.

1,080,059 of the 1,421,130 shares, in respect of which joint interests were granted during the year ended 31st January 2015, were issued to directors. Of the total 73,080 Free, Matching and Partnership Shares granted under the SIP during the year, 32,480 were granted to directors of the Company.

Of the £2,013 (2016: £2,013) charge relating to the Joint Share Ownership Plan and the £66,740 (2016: £Nil) charge relating to the SIP, £1,529 (2016: £1,529) and £29,664 (2016: £Nil) related to the directors respectively. Refer to Note 24 for further details.

The highest paid director also has a joint interest in 355,283 shares pursuant to a Joint Share Ownership Agreement entered into during the year ended 31st January 2015 as well as 8,120 shares held within the Company's SIP. Refer to Note 24 for further details.

The Company contributes into defined contribution pension schemes on behalf of certain employees and directors. Contributions payable are charged to the Consolidated Statement of Comprehensive Income in the period to which they relate.

During the year, 4 directors (2016: 4) accrued benefits under these defined contribution pension schemes.

The key management personnel comprises of the directors.

In the current year a total dividend of £3,340 was payable on the 97,652 ordinary shares held by the B.P. Marsh SIP Trust ("SIP Trust"); these shares having been held in Treasury at the start of the year and subsequently transferred to the SIP Trust in March 2016. No dividend was payable on the 59,040 ordinary shares held by the Company in Treasury in the prior year.

The tax assessed for the year is lower (2016: lower) than the standard rate of corporation tax in the UK. The differences are explained below:

There are no factors which may affect future tax charges except as set out in Note 17.

10. EARNINGS PER SHARE FROM CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS

During the year the Company paid a total of £8,805 (2016: £56,414) in order to repurchase 5,726 (2016: 38,612) ordinary shares at an average price of 154 pence per share (2016: 146 pence per share). All 5,726 ordinary shares are being held by the Company in Treasury (2016: all 38,612 ordinary shares were held by the Company in Treasury).

Distributable reserves have been reduced by £8,805 as a result (2016: reduction of £56,414).

The Treasury shares do not have voting or dividend rights and have therefore been excluded for the purposes of calculating earnings per share.

As at 31st January 2017 a total of 5,726 ordinary shares were held by the Company in Treasury (31st January 2016: 97,652 ordinary shares were held by the Company in Treasury, prior to being transferred to the B.P. Marsh SIP Trust ("SIP Trust") in the current year).

The repurchase of the ordinary shares is borne from the Group's commitment to reduce share price discount to net asset value. Its policy has been throughout the year (and previously) to buy small parcels of shares when the share price drops to more than 25% below its published Net Asset Value and place them into Treasury. Following the year end, on 3rd March 2017 the Group announced a Share Buy-Back Policy outlining this commitment.

The increase to the weighted average number of ordinary shares between 2016 and 2017 is attributable to the transfer of the 97,652 ordinary shares held by the Company in Treasury as at 31st January 2016 to the SIP Trust during the year. These shares have therefore been treated as re-issued for the purposes of calculating earnings per share. 73,080 of the 97,652 ordinary shares transferred to the SIP Trust were subsequently allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement (Note 24).

12. INVESTMENTS - EQUITY PORTFOLIO

*Since 31st January 2017 the Group has disposed of its investments in both Besso Insurance Group Limited ("Besso") and Trireme Insurance Group Limited ("Trireme") (Note 26). Although the completion of these disposals took place after the year end, the intention to dispose of each investment was entered into prior to 31st January 2017. In the case of Besso, the Group's intention to dispose of its investment was also publicly announced prior to the year end. In accordance with the provisions of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations ("IFRS 5") these investments have been moved from Non-current Assets to Current Assets and as at 31st January 2017 are shown within the Statement of Financial Position as "Non-current assets as held for sale". In addition, the movements in valuation and cost attributable to these specific investee companies have been categorised separately within the Group's investment movement table above. For the income generated from these two investments refer to Note 2.

The additions relate to the following transactions in the year:

On 20th April 2016 the Group acquired a 20% shareholding in Asia Reinsurance Brokers Pte Limited ("ARB"), a Singapore headquartered independent specialist reinsurance and insurance risk solutions provider, for a total consideration of SGD 2,398,424 (£1,268,336). The Group may increase its shareholding in ARB to 25% for an additional cash consideration of SGD 500,000 dependent on the performance of ARB in its financial year ending 31st December 2017.

On 14th June 2016 the Group acquired a further 8.02% preferred equity stake in LEBC Holdings Limited ("LEBC") for aggregate consideration of £1,911,120. These shares were acquired from a number of legacy shareholders, predominantly retired ex-employees of LEBC. On 16th November 2016 the Group acquired an additional 0.4% preferred equity stake in LEBC from another legacy shareholder for consideration of £110,514. Following these purchases, and as at 31st January 2017, the Group had an aggregate shareholding in LEBC of 43.03%.

During the year, Property and Liability Underwriting Managers (PTY) Limited ("PLUM") achieved its target earnings before interest, tax, depreciation and amortisation ("EBITDA") of ZAR 8,299,927 over the first year of the Group's investment. This EBITDA target had been agreed upon at initial investment in June 2015 and provided for further consideration of £300,000 to become payable in order to maintain the Group's equity stake in PLUM at 20%. On 9th June 2016 the Group paid £150,000 of this consideration and on 5th October 2016 the Group paid the remaining £150,000, bringing the total consideration payable for the 20% to £606,463. In addition, on 5th October 2016, the Group acquired a further 22.5% preferred equity stake in PLUM for consideration of £613,400. Following this additional investment, the Group's equity stake in PLUM stood at 42.5% as at 31st January 2017.

On 22nd November 2016 the Group acquired a 25% cumulative preferred ordinary shareholding in The Fiducia MGA Company Limited ("Fiducia"), a newly established UK Marine Cargo Underwriting Agency, for total consideration of £75,000.

On 15th December 2016 the Group acquired a further 6.87% equity stake in Nexus Underwriting Management Limited ("Nexus") for a total consideration of £4,000,000. The Group acquired this additional equity from two of Nexus' founding shareholders. Following this additional investment, the Group's equity stake in Nexus stood at 18.6% as at 31st January 2017.

On 27th January 2017 the Group acquired a 30% cumulative preferred ordinary shareholding in Stewart Specialty Risk Underwriting Limited ("SSRU"), a start-up Specialty Casualty Underwriting Agency based in Toronto, Canada for consideration of CAD 30 (£19).

The disposals relate to the following transactions in the year:

On 15th April 2016 the Group sold its entire 49% stake in The Broucour Group Limited ("Broucour") to the founder and managing director, Mr Rupert Cattell, for consideration of up to £341,000, which equated to the Group's 31st January 2016 valuation of its investment in Broucour. The outstanding loan (£329,834 at the date of sale and £254,837 as at 31st January 2017) will be repaid in full in instalments.

On 4th May 2016 the Group sold its entire 1.32% stake (948,830 ordinary shares) in Randall & Quilter Investment Holdings Limited ("R&Q") to Brian Marsh Enterprises Limited, a company owned by Mr B.P. Marsh, the Chairman and majority shareholder of the Company. The total consideration of £1,019,992 represented a realised gain of £246,992 on the investment when compared to the carrying value of £773,000 as at 31st January 2016 (Note 14).

On 30th June 2016 the Group sold its remaining 1.6% equity stake (1,405,880 ordinary shares) in Hyperion Insurance Group Limited ("Hyperion") for consideration of £7,310,576. This consideration represents a realised gain of £576 when compared to the carrying value of £7,310,000 as at 31st January 2016 (Note 14). On 31st January 2017 the Group received full repayment of its £6,037,361 outstanding loan originally made to Hyperion in May 2013.

On 9th September 2016 the Group entered into a share buy-back agreement with Besso Insurance Group Limited ("Besso") for Besso to re-purchase 437,769 A Ordinary shares being held by the Group. This equity was originally acquired by the Group in September 2015 (at the time of acquisition equating to 7.03% of Besso) and was a capped participation which was stated within the Group's valuation of Besso at cost (£1,581,147) alongside its main economic participation of 37.94% (total 44.97%) as at 31st January 2016. Following Besso's buy-back of the shares at cost, the Group's holding returned to 37.94% and remained as such at 31st January 2017. As the shares were acquired by Besso at their 31st January 2016 carrying value, no gain or loss resulted on disposal.

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage S.L. (Spain), MB Prestige Holdings PTY Limited (Australia), Bastion Reinsurance Brokerage (PTY) Limited (South Africa), Bulwark Investment Holdings (PTY) Limited (South Africa), Property and Liability Underwriting Managers (PTY) Limited (South Africa), Asia Reinsurance Brokers Pte Limited (Singapore) and Stewart Specialty Risk Underwriting Limited (Canada) are as follows: