B.p Marsh Regulatory News (BPM)

Date: 12th June 2018

On behalf of: B.P. Marsh & Partners Plc

B.P. Marsh & Partners Plc

("B.P. Marsh", the "Company" or the "Group")

FINAL RESULTS FOR THE YEAR TO 31 JANUARY 2018

B.P. Marsh & Partners Plc (AIM: BPM), the niche venture capital provider to early stage financial services businesses, announces its audited Group final results for the year to 31 January 2018.

The highlights of the results are:

· Increase in the Equity Value of the Portfolio of 31.3% (£18.9m)

· Net Asset Value of £98.9m (31 January 2017: £79.7m), a 24.1% increase, net of Dividend

· Net Asset Value increased to 339p per share (31 January 2017: 273p)

· Total return to Shareholders in the year of 25.5% (2017: 13.9%)

· Consolidated profit after tax of £20.2m (31 January 2017: £9.8m)

· Average Net Asset Value annual compound growth rate of 12.0% since 1990

· Final Dividend of 4.76p per share declared (31 January 2017: 3.76p), a 27% increase

· Cash and treasury funds balance of £5.4m at year end

· Four new investments - two in Lloyd's Brokers and two in the USA

· Two disposals - Besso and Trireme

· Further investment into LEBC of £7.1m

· Provision of follow-on funding to Nexus of £4m

· Current uncommitted cash of £0.5m

"On the conclusion of an excellent year, the Group is in a sound financial position, has a strong portfolio of investments and a management team committed to driving our business forward. The Group is growing strongly, delivering consistent year on year returns to shareholders and is well-positioned to deal with any uncertainty arising from the UK's exit from the EU by April 2019. The Board looks forward to the year ahead with confidence."

Brian Marsh OBE, Chairman

For further information, please contact:

B.P. Marsh & Partners Plc www.bpmarsh.co.uk

Brian Marsh OBE / Camilla Kenyon +44 (0)20 7233 3112

Nominated Adviser & Broker

Panmure Gordon

Atholl Tweedie / Charles Leigh-Pemberton +44 (0)20 7886 2500

Financial PR

Redleaf Communications

Emma Kane / Elisabeth Cowell +44 (0)20 3757 6888

Note

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

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 2018.

It has proved to be another year of strong growth and significant positive developments for the Group.

The value of the equity portfolio has increased by 31.3% in the year, driven in particular by robust growth in Nexus, LEBC and CBC, and Net Asset Value has increased by 24.1% to £98.9m or 339p per share. We are delighted to have delivered a total shareholder return in the year of 25.5%.

We made four new investments during the year. We were pleased to make two new Lloyd's broking investments in London and to further our geographic expansion with two new North American investments.

Within the existing portfolio, we provided further support to LEBC and increased our shareholding by an additional 17.84%, to take us to a majority position of 60.88%. In December 2017, LEBC completed the £5m acquisition of Aspira, a Bristol-based IFA business, to which we contributed loan funding of £1.5m.

We supported Nexus with a £4m loan facility that has enabled it to pursue its acquisition strategy, with four acquisitions during the year.

The disposal of Besso, after a partnership spanning two decades, at an Internal Rate of Return ("IRR") of 21.9%, further demonstrates the success of our model. We also successfully disposed of our Trireme investment by way of sale back to the majority shareholder in that business, US Risk Inc, at an IRR of 15.6%.

Our Group now has a geographically diverse portfolio with a range of investments from those which are well-developed and considering their options for further growth, to the recent start-ups which are beginning to make headway.

We continue to do all that we can to build value for our shareholders whilst providing a sustainable dividend and are pleased to announce a 27% increase in the dividend to 4.76p per share.

On the conclusion of an excellent year, the Group is in a sound financial position, has a strong portfolio of investments and a management team committed to driving our business forward. The Board notes the current level of uncommitted cash and is considering its options in this respect. We believe that the Group is at a key phase of its development and we look forward to the year to come.

Business Update

Summary of Developments in the Portfolio

During and subsequent to the financial year ended 31 January 2018, the following developments have taken place:

New Investments - Lloyd's Brokers

Investment in EC3 Brokers Ltd ("EC3")

On 18 December 2017 the Group announced an investment into EC3 through EC3 Brokers Group Limited. The Group took an effective 20% equity stake in EC3 for a total cash consideration of £5m, in a mixture of Preferred and Ordinary shares.

EC3 is an independent specialist Lloyd's broker and reinsurance broker, established in 2014 by its current CEO, Danny Driscoll. EC3 provides services to a wide array of clients across several sectors, including construction, casualty, entertainment and cyber & technology, with a focus in the US, UK and Middle Eastern markets.

Investment in CBC UK Ltd ("CBC")

On 17 February 2017 the Group acquired a 35% shareholding in CBC for £4m.

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.

New Investments - USA

Investment in Mark Edward Partners LLC ("MEP")

On 12 October 2017 the Group invested in MEP, taking a 30% equity stake for $6m.

MEP is a specialty insurance broker offering a wide range of risk management services to commercial and private clients. Established in 2009 by Mark Freitas, Founder and CEO, it is a national U.S. firm with licenses to operate in all 50 states and has offices in New York, Palm Beach and Los Angeles.

Investment in XPT Group LLC ("XPT")

On 13 June 2017, the Group invested US$6m into XPT, a newly established US specialty lines insurance distribution company, subscribing for a 35% stake.

The management team at XPT is a line-up of industry veterans, led by Tom Ruggieri, formerly of Marsh McLennan & Companies, Advisen and Swett & Crawford.

Follow-on Investments and Funding

LEBC Holdings Ltd ("LEBC")

The Group purchased a further 17.84% stake in LEBC for aggregate consideration of £7.14m on 26 July 2017. Following the purchase, the Company had an aggregate shareholding of 60.88% in LEBC, with the balance held by Founder and CEO, Jack McVitie and LEBC Management. The Group's usual strategy is to take minority equity positions, however in this instance the opportunity to acquire additional shares proved compelling and was welcomed by the LEBC incumbent management.

In December 2017 the Group provided loan funding of £1.5m to LEBC for the £5m acquisition of Aspira, a Bristol-based advisory firm with 50 staff and nearly £0.5bn of funds under management. The acquisition completed on 6 February 2018. The Aspira acquisition is expected to be earnings enhancing in the current year. As a result of shares issued as part of the consideration for this transaction the Group's shareholding in LEBC was diluted to 59.34%.

Follow-on Funding

Nexus Underwriting Management Ltd ("Nexus")

On 10 July 2017 the Group provided Nexus, in which it holds an 18.14% shareholding, with a £4m Loan Facility secured as part of a wider debt fundraising exercise, to undertake M&A activity.

Nexus secured £30m in loan funding in total, with the balance of £26m provided by funds managed by HPS Investment Partners, LLC ("HPS").

Disposals

Besso Insurance Group Ltd ("Besso")

The Group sold its entire 37.94% shareholding in Besso for cash to BGC Partners Inc ("BGC") on 28 February 2017, with the Group receiving £22m in cash (net of transaction costs and pre-tax and after adjustments) and delivering an IRR of 21.9%.

Trireme Insurance Group Ltd ("Trireme")

The Group disposed of its 29.94% shareholding in Trireme for £2.96m cash, to its fellow shareholder U.S. Risk Midco, LLC in April 2017. This disposal represents an IRR (including fees) of 15.6%.

Portfolio Update

UK

CBC UK Ltd ("CBC")

CBC has grown strongly since investment in 2017 and for the financial year ended 31 December 2017 reported unaudited revenue of £5.5m and EBITDA of £836,000. This is an increase of £648,000 or 345% on the 2016 EBITDA of £188,000.

CBC is looking at a number of acquisition opportunities currently, as well as actively seeking individuals or teams that would complement the existing business, to further its growth ambitions.

CBC Chairman Andrew Wallas commented:

"We are very pleased with the progress that has been made since our Management Buy Out. We have created a strong platform from which to build. Our absolute priority is to acquire additional quality people with intellectual capital to support the continuing growth of our business."

LEBC Holdings Ltd

LEBC Group Ltd ("LEBC Group"), the trading subsidiary for LEBC, continues to deliver strong organic growth. In the year to 30 September 2017 it declared a turnover of £18.1m and a trading profit of £3m for the year. This represents an increase on the 2016 results of 17.5% on turnover (2016 £15.4m) and 42.8% on trading profit (2016 £2.1m). Currently, on a like for like basis, LEBC is trading significantly ahead of last year.

On 1 August 2017 LEBC Group successfully completed the process of becoming a FCA directly authorised entity, having previously been an Appointed Representative of TenetConnect Limited. The key driver of the application for direct authorisation was to have a compliance framework and processes in place tailored to LEBC's business, particularly in recognition of the pace of change in the business and the industry at large over recent years.

The Aspira acquisition is integrating well and proving to be an excellent strategic fit, extending LEBCs geographic reach in the South West and bringing additional experienced advisors and valued support staff in to the business. Full integration is expected from 1 October 2018.

Nexus Underwriting Management Ltd ("Nexus")

Nexus has undertaken a number of acquisitions in the Group's financial year to 31 January 2018, including Vectura Underwriting, Equinox Global, Zon Re Accident Reinsurance and Credit Risk Solutions.

Since the Company's investment in 2014, Nexus has grown its Gross Written Premium from £56m in 2014 to £132m in 2017. In the same period, commission income has increased from £12.3m to £23.5m in 2017 and EBITDA has increased from £2.6m to an estimated £10m in 2017. The 2017 figures included above are on an unaudited basis.

On 19 January 2018 Nexus announced that it had appointed Mike Sibthorpe as CEO of Insurance and Reinsurance with effect from April 2018, as part of a wider management restructure. Mike Sibthorpe was previously Chief Underwriting Officer for Amtrust at Lloyd's.

USA

XPT Group LLC ("XPT")

Since the Group's investment, XPT has made two acquisitions: Western Security Surplus Insurance Brokers Inc, a Texas-based wholesale broker and managing general agency, and W.E. Love & Associates Inc, a North Carolina based managing general agency.

XPT has a strong pipeline of further acquisition opportunities under consideration.

Europe

Summa Insurance Brokerage S.L. ("Summa")

For the year ended 31 December 2017, Summa reported unaudited Revenue of €6.5m and Recurring EBITDA of €1.4m.

The market in which Summa operates remains competitive, with rates continuing to soften in both the general and agricultural insurance markets.  

The Group continues to work with Management to develop the business, taking advantage of a fragmented insurance intermediary market to assess M&A and Franchise opportunities, where available, as well as developing additional niche product offerings for the Spanish insurance market.

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 have been through a period of difficult trading and macro-economic conditions. A new strategic plan, with the benefit of an augmented Board, has been implemented to effect change with the support of B.P. Marsh. Nevertheless, reflecting the Group's customary prudent approach, a full impairment has been made against these investments.

Dividend

In recognition of the Group's progress during the year, the Board has recommended an increase in the dividend of 1p per share, to 4.76 pence per share for the financial year ending 31 January 2018, which will be paid on 31 July 2018 to shareholders whose names are on the register on 13 July 2018.

This is an increase of 27% over the dividend of 3.76p per share (£1.1m) paid in respect of the prior year. It is the Group's aspiration to maintain this level for the year ending 31 January 2019, subject to ongoing review and approval by the Board and the Company's shareholders.

The Board continues to strike a balance between investing cash into new opportunities for long-term capital growth and providing shareholders with a sustainable yield.

Share Buy-Backs

The Board has a stated policy, regularly reviewed, of undertaking low volume share buy-backs at times when the Group's Share Price represents a 20% or more discount to Net Asset Value. The Board considers this is a useful stabilising mechanism during periods of market or share price volatility.

Substantial Shareholding Exemption ("SSE")

Finance (No.2) Act 2017 introduced significant changes to the SSE rules in Taxation of Chargeable Gains Act 1992 Sch. 7AC which applied to share disposals on or after 1 April 2017. In general terms, the rule changes relax the conditions for a company such as B.P. Marsh to qualify for SSE on a share disposal.

Having reviewed our current investment portfolio, we consider that the Group should benefit from this reform to the SSE rules and, as a result, we would anticipate that on a disposal of shares in our current investments, so long as the shares have been held for 12 months, they should qualify for SSE and no corporation tax charge should arise on the disposal.

As such, and having assessed the current portfolio, we anticipate that there should currently be no requirement to provide for deferred tax (£4.9m provision as at 31 July 2017) in respect of unrealised gains on those investments under the current requirements of the International Financial Reporting Standards ("IFRS"). As such there was no deferred tax provision at 31 January 2018. The requirement for a deferred tax provision ongoing is subject to continual assessment of each investment to test whether the SSE conditions continue to be met based on information that is available to the Group and that there is no change to the accounting treatment in this regard under IFRS. It should also be noted that, until the date of the actual disposal, it will not be possible to ascertain if all the SSE conditions are likely to have been met and, moreover, obtaining agreement of the tax position with HM Revenue & Customs may possibly not be forthcoming until several years after the end of a period of accounts.

Given the flexible nature of the Group's investment strategy this does not imply that the Group will only make investment decisions based upon the SSE rules going forwards, although this will form part of the overall investment proposition.

New Business Opportunities and Outlook

The financial year closed with a total of 77 new opportunities having been presented to the Group during the year, this is broadly in line with previous years with total number of opportunities in 2017 and 2016 being 84 and 71 respectively. Of the 77, the majority were in the insurance sector, with 41 insurance intermediary enquiries, or 53%.

Four new investments were made during the year, two in the U.S. and two in London. During the year, several opportunities from the pipeline were referred on to portfolio companies as potential bolt-ons.

The Group's model of making equity investments in financial services intermediary businesses with a partnership approach and a long-term view continues to deliver attractive opportunities. The recent investments in the U.S. have ensured that the portfolio now has geographic representation in the UK, Europe, U.S., Singapore, Australia, Canada and South Africa, which the Group believes represents a solid international framework and makes it well-positioned to take advantage of global economic growth.

Cash Balance

At 31 January 2018 the cash balance was £5.4m, with current uncommitted cash of £0.5m. The Board notes the current level of uncommitted cash and is considering its options in this respect.

Financial Performance

At 31 January 2018, the net asset value of the Group was £98.9m, or 339p per share (2017: £79.7m, or 273p per share) including a provision for deferred tax where relevant. This equates to an increase in net asset value of 24.1% (2017: 12.5%) for the year, or 19.5% excluding any deferred tax movement.

The Group increased its dividend payment to £1.1m (or 3.76p per share) during the year, as announced previously (2017: £1.0m or 3.42p per share). Total shareholder return for the year was therefore 25.5% (2017: 13.9%) including the dividend payment and the net asset value increase.

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

This equates to an increase in the equity portfolio valuation of 31.3% (2017: 22.1%).

The net asset value of £98.9m at 31 January 2018 represented a total increase in net asset value of £86.3m 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 12.0% in Group net asset value after running costs, realisations, losses, distributions and corporation tax since 1990.

The consolidated profit on ordinary activities after taxation increased by 107% to £20.2m (2017: profit of £9.8m). The consolidated profit on ordinary activities before taxation was £16.5m (2017: profit of £12.2m), of which £18.1m was derived from unrealised gains on revaluing the equity investment portfolio in line with current market conditions, an increase of 62% on the previous year (2017: net unrealised gains of £11.2m). The Group's strategy is to cover expenses from the portfolio yield. On an underlying basis, including treasury returns, but excluding investment activity (unrealised gains on equity, a provision against deferred consideration receivable, a provision against loans receivable from investee companies and all underlying treasury portfolio movement), this was achieved with a pre-tax profit of £0.7m for the year (2017: £0.6m).

The Group invested £21.7m during the year - £14.4m in new equity investments and £7.3m for follow-on equity financing to its existing portfolio. In addition, the Group provided new loans for working capital to the portfolio of £15.6m. Repayment of loans by the portfolio amounted to £8.9m in the year. Cash funds (including treasury funds) at 31 January 2018 were £5.4m.

Overall, income from investments increased by 30.1% to £3.9m (2017: £3.0m). Dividend income increased by 95.4% over the year due to the strengthening performance of the portfolio companies, whilst income from loans fell by 13.4%, which was largely the result of the portfolio repaying debt in accordance with agreed repayment schedules. Fees were 41.4% higher mainly due to a number of one-off transaction fees received in 2018 as well as fees derived from new investments.

The Group realised two investments during the year, resulting in a combined profit on disposal (before tax) of £19.7m. The cash received from these realisations enabled the Group to invest in a number of new and existing opportunities throughout the year.

Operating expenses, including costs of making new investments, increased by 34.4% during the year to £4.1m (2017: £3.1m). Of this, £0.6m related to enhanced bonuses awarded to directors and staff under a newly created incentive scheme which is linked to the Group's growth in net asset value and was also based upon the £19.7m realised gain on successful sale of investments during the year. £0.2m related to expenses directly incurred in making new investments which, under IFRS, are expensed and £0.1m related to one-off costs incurred in the office move (which mainly comprised of rent, rates and service charge costs incurred for an overlapping period during the year whilst the Group's leases on its old and new office premises ran concurrently). Excluding these atypical expenses, overall expenses rose by £0.1m (3.2%) in proportion with managing a growing portfolio.

Due to favourable market conditions, the Group's treasury funds increased by 4.1% over the year (net of fund management charges) (2017: 8.6%).

Joint Share Ownership Plan ("JSOP")

The Company intends to establish a new joint share ownership plan (the "2018 JSOP") for eligible Group employees and senior executives to replace the 2014 JSOP, which matured in November. The purpose of the 2018 JSOP is to provide eligible employees of the Group with a joint beneficial ownership in and an opportunity to benefit from any possible appreciation in the value of Ordinary Shares in the Company subject to a suitable hurdle rate.

To implement the 2018 JSOP, the Group has established an employee benefit trust which intends to subscribe for up to 1,461,302 new Ordinary Shares, representing 5.00 per cent. of the existing issued ordinary share capital in the Company, at the time the awards are made.

Outlook

The Group is growing strongly, delivering consistent year on year returns to shareholders and is well-positioned to deal with any uncertainty arising from the UK's exit from the EU by April 2019. The Board looks forward to the year ahead with confidence.

Investments

As at 31 January 2018 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 2018 valuation: £779,000

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 2018 valuation: £-

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 2018 valuation: £-

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 via parent company Paladin Holdings Limited.

Date of investment: February 2017

Equity stake: 35%

31 January 2018 valuation: £2,372,000

EC3 Brokers Limited

(www.ec3brokers.com)

In December 2017, the Group invested in EC3 Brokers Limited, an independent specialist Lloyd's broker and reinsurance broker, via a newly established NewCo, EC3 Brokers Group Limited. Founded by its current Chief Executive Officer Danny Driscoll, who led a management buyout to acquire EC3's then book of business from AJ Gallagher in 2014, EC3 provides services to a wide array of clients across a number of sectors, including construction, casualty, entertainment and cyber & technology.

Date of investment: December 2017

Equity Stake: 20%

31 January 2018 valuation: £5,000,000

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: 25%

31 January 2018 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: 59.34%

31 January 2018 valuation: £33,166,000

Mark Edward Partners LLC

(www.markedwardpartners.com)

Founded in 2010 by Mark Freitas, its President & Chief Executive Officer, Mark Edward Partners LLC ("MEP") provides core insurance products in Financial & Liability, Property & Casualty, Personal Lines, Life Insurance, Cyber and Affinity Groups. MEP is a national U.S. firm with licenses to operate in all 50 states and has offices in New York, Palm Beach and Los Angeles.

Date of investment: October 2017

Equity stake: 30%

31 January 2018 valuation: £4,219,000

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 2018 valuation: £1,840,000

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: 17.08%

31 January 2018 valuation: £20,544,000

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 2018 valuation: £0

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. Stewart Specialty Risk Underwriting Ltd 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: 30%

31 January 2018 valuation: £-

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 2018 valuation: £2,198,000

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 2018 valuation: £4,018,000

Walsingham Motor Insurance Limited

(www.walsinghamunderwriting.com)

In December 2013 the Group invested in Walsingham Motor Insurance Limited, 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 2018 valuation: £692,000

XPT Group LLC

(www.xptspecialty.com)

In June 2017 the Group backed the ex-Swett & Crawford CEO Tom Ruggieri and a strong management team to develop a New York-based wholesale insurance broking and underwriting agency platform across the U.S. Specialty Insurance Sector.

Date of investment: June 2017

Equity stake: 35%

31 January 2018 valuation: £4,219,000

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

Consolidated Financial Statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31ST JANUARY 2018

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

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION

31ST JANUARY 2018

(Company Number: 05674962)

The Financial Statements were approved by the Board of Directors and authorised for issue on 11th June 2018

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2018

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 £2,756k, total available cash and treasury portfolio funds as at 31st January 2018 was £5,404k (as at 31st January 2017: £12,557k, including £5,230k of treasury portfolio funds).

PARENT COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2018

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST JANUARY 2018

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 2018

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 2018 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 three trading subsidiaries, B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited and B.P. Marsh (North America) Limited (incorporated on 22nd March 2017), 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 and the results of B.P. Marsh (North America) Limited are consolidated for the first time 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.

New Accounting Standards

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 2018 include:

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 directors do not expect the adoption of the standards and interpretations to have a material impact on the Group's financial statements in the period of initial application, with the exception of IFRS 16: Leases ("IFRS 16").

IFRS 16 was issued on 13th January 2016 and replaces IAS 17: Leases. The standard is effective for annual periods beginning on or after 1st January 2019 with early adoption permitted.

IFRS 16 requires all operating leases in excess of one year, where the Group is the lessee, to be included on the Group's Statement of Financial Position and recognised as a right-to-use asset and a related lease liability representing the obligation to make lease payments. The right-of-use asset will be amortised on a straight-line basis with the lease liability being amortised using the effective interest method. Certain optional exemptions are available under IFRS 16 for short-term leases (lease term of less than 12 months) and for low-value leases. Therefore IFRS 16 is expected to result in an increase in the Group's total assets and total liabilities but is not anticipated to have a material impact on net assets or total return.

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 three subsidiary investment entities, B.P. Marsh & Company Limited, Marsh Insurance Holdings Limited and B.P. Marsh (North America) Limited, that provide services that relate to the Company's investment activities. The results of these three subsidiaries, together with other subsidiaries (except for Summa Insurance Brokerage, S.L. ("Summa") and LEBC Holdings Limited ("LEBC")), 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 and LEBC. Instead the investments in Summa and LEBC 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 £20,251,651, prior to a dividend distribution of £1,098,109 (2017: profit of £9,794,327 prior to a dividend distribution of £999,335).

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.

The Group has established an HMRC approved 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 Committee ("IPEV Guidelines"). 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 and other costs - 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.

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.

Under IFRS 8: Operating Segments ("IFRS 8") 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 and Non-UK. The UK segment includes the 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), 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:

1There are no disclosures shown for Besso Insurance Group Limited, Hyperion Insurance Group Limited and Trireme Insurance Group Limited in the current year as the Group had disposed of these investments during the previous year and the early part of this financial year. This resulted in a reduced level of income and consequently the income derived from these investee companies did not exceed the 10% threshold prescribed by IFRS 8.

As outlined previously, under IFRS 8 the Group reports its operating segments (UK and Non-UK) and associated income, expenses, assets and liabilities based upon the country of domicile of each of its investee companies.

In addition to the segmental analysis disclosure reported above, the Group has undertaken a further assessment of each of its investee companies' underlying revenues, specifically focusing on the geographical origin of this revenue. Geographical analysis of each investee company's 2018 and 2017 revenue budgets was carried out and, based upon this analysis, the directors have determined that on a look-through basis, the Group's portfolio of investee companies can also be analysed as follows:

5. STAFF COSTS

The average number of employees, including all directors (executive and non-executive), employed by the Group during the year was 19 (2017: 17); 6 of those are in a management role (2017: 6) and 13 of those are in a support role (2017: 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. During the year B.P. Marsh Management Limited acquired the economic interests of all 1,421,130 ordinary shares in the Company held under joint beneficial ownership. Refer to Note 24 for further details.

During the year to 31st January 2017 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 £69,315 (2017: £66,740) relating to the SIP and £2,576 (2017: £2,013) relating to the Joint Share Ownership Agreements are included within 'Other employment costs' above.

6. DIRECTORS' EMOLUMENTS

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. During the year all 1,080,059 shares in which joint interests were held by the directors were sold. Refer to Note 24 for further details.

Of the total 37,935 (2017: 73,080) Free, Matching and Partnership Shares granted under the SIP during the year, 16,860 (2017: 32,480) were granted to directors of the Company.

Of the £2,576 (2017: £2,013) charge relating to the Joint Share Ownership Plan and the £69,315 (2017: £66,740) charge relating to the SIP, £1,958 (2017: £1,529) and £30,807 (2017: £29,664) related to the directors respectively.

Refer to Note 24 for further details.

The highest paid director also has a beneficial interest in 12,335 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 (2017: 4) accrued benefits under these defined contribution pension schemes.

The key management personnel comprise of the directors.

In the current year a total dividend of £4,174 (2017: £3,340) was payable on the 111,015 (2017: 97,652) ordinary shares held by the B.P. Marsh SIP Trust ("SIP Trust").

*Including additional review work in relation to the change in the Substantial Shareholding Exemption regulations and the impact on the Group's deferred tax position (Note 17).

The tax assessed for the year is lower (2017: 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 £53,967 (2017: £8,805) in order to repurchase 28,646 (2017: 5,726) ordinary shares at an average price of 188 pence per share (2017: 154 pence per share).

Distributable reserves have been reduced by £53,967 as a result (2017: reduction of £8,805).

Ordinary shares held by the Company in Treasury

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

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 be able to buy small parcels of shares when the share price is below 25% of its published Net Asset Value and place them into Treasury, as outlined in the Group's Share Buy-Back Policy announcement on 24th July 2017. Since 31st January 2018, and as announced on 6th March 2018, the Group has updated its Share Buy-Back Policy such that it can buy back small parcels of shares and place them into Treasury when the share price is below 20% of its published Net Asset Value.

The decrease to the weighted average number of ordinary shares between 2017 and 2018 is attributable to the buy-back of 28,646 ordinary shares in the Company during the year. 13,363 ordinary shares were also transferred from Treasury to the SIP Trust during the year. These shares were therefore treated as re-issued for the purposes of calculating earnings per share. 37,935 ordinary shares (comprising the 13,363 ordinary shares transferred from Treasury to the SIP Trust during the year together with 24,572 unallocated ordinary shares already held by the SIP Trust at the start of the year) were subsequently allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement (Note 24).

In the prior year there was an increase to the weighted average number of shares due to the transfer of 97,652 ordinary shares held by the Company in Treasury as at 31st January 2016 to the SIP Trust during that year. These shares were therefore 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 allocated to the participating employees as Free, Matching and Partnership shares under the share incentive plan arrangement in that year.

11. PROPERTY, PLANT AND EQUIPMENT

12. INVESTMENTS - EQUITY PORTFOLIO

During the year, and as noted below, the Group disposed of its investments in both Besso Insurance Group Limited ("Besso") and Trireme Insurance Group Limited ("Trireme"). Although the completion of these disposals took place after 31st January 2017, 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 31st January 2017. In accordance with the provisions of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations ("IFRS 5") these investments were moved from Non-current Assets to Current Assets and as at 31st January 2017 were 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 were categorised separately within the Group's investment movement table above.

The additions relate to the following transactions in the year:

On 17th February 2017 the Group acquired, through a newly established company Paladin Holdings Limited (previously known as Paladin Newco Limited until 5th April 2017) ("Paladin"), an effective 35% shareholding in CBC UK Limited ("CBC"), a Retail and Wholesale Lloyd's insurance broker. The Group partnered with CBC's management team to buy out an existing shareholder and the acquisition of CBC was made through Paladin, to which the Group provided £4,000,000 of funding (comprising cash consideration of £3,500 for the 35% equity and a loan facility of £3,996,500 which was fully drawn down on completion).

On 13th June 2017 the Group acquired, through its wholly owned subsidiary company B.P. Marsh (North America) Limited, a 35% shareholding in a newly established New York based specialty lines insurance distribution company, XPT Group LLC ("XPT") for consideration of $6,000,000 (£4,790,419).

On 26th June 2017 the Group acquired a further 17.84% equity stake in LEBC Holdings Limited ("LEBC") for consideration of £7,137,563. The acquisition increased the Group's equity stake in LEBC to 60.88% at the time of investment. The Group has also provided for £148,960 of deferred consideration due to certain LEBC shareholders in respect of this transaction which became due upon the Group's 100% equity valuation of LEBC exceeding £43,000,000. This condition was met as at 31st January 2018 and therefore the Group's equity cost in LEBC has been increased to include this deferred consideration which is expected to be paid in 2018. Following this additional investment, and after some dilution resulting from an acquisition made by LEBC in December 2017, the Group's equity stake in LEBC stood at 59.34% as at 31st January 2018.

On 13th October 2017 the Group acquired, through its wholly-owned subsidiary company B.P. Marsh (North America) Limited, a 30% equity stake in Mark Edward Partners LLC ("MEP") for consideration of $6,000,000 (£4,572,822). MEP is a specialty insurance broker offering a wide range of risk management services to both commercial and private clients and has offices in New York, Palm Beach and Los Angeles, with licenses to operate in all 50 US states.

On 15th December 2017 the Group acquired an effective 20% equity stake (comprising a mixture of ordinary and preferred shares) in EC3 Brokers Limited ("EC3") through a newly established company, EC3 Brokers Group Limited, for total consideration of £5,000,000. EC3 is an independent specialist Lloyds broker and reinsurance broker which provides services to a wide array of clients across a number of sectors, including construction, casualty, entertainment and cyber & technology.

The disposals relate to the following transactions in the year:

On 28th February 2017 the Group sold its entire 37.94% stake in Besso to an affiliate of BGC Partners, Inc ("BGC"), for an initial consideration of £21,566,158 (net of transaction costs). On 12th April 2017 the Group received further cash consideration of £441,638 pursuant to an adjustment based upon Besso's 28th February 2017 final completion accounts, bringing the total consideration received by the Group to £22,007,796. The total consideration received represents a realised gain of £698,796 when compared to the carrying value of the Group's investment in Besso of £21,309,000 as at 31st January 2017 (Note 14) and a total overall gain of £18,617,346 above the cost of investment. Outstanding loans of £4,907,500 were also repaid in full on completion.

On 21st April 2017 the Group sold its entire 29.94% stake (351,000 B ordinary shares, 3,400 preferred shares and 292 ordinary shares) in Trireme Insurance Group Limited ("Trireme") to its fellow shareholder, US Risk Midco, LLC, for cash consideration of £2,908,350 as well as an additional net payment of £18,924. The consideration of £2,908,350 equates to the Group's 31st January 2017 valuation of its investment in Trireme (Note 14) and represents a total overall gain of £1,059,046 above the cost of investment. The outstanding loan of £2,155,113 as at 31st January 2017 was also repaid on completion.

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), Stewart Specialty Risk Underwriting Limited (Canada), XPT Group LLC (USA) and Mark Edward Partners LLC (USA) are as follows: