B.p Marsh Regulatory News (BPM)

Date: 4th June 2013

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

Embargoed until: 0700hrs

B. P. Marsh & Partners Plc

Final Results

B. P. Marsh & Partners Plc (AIM: BPM), a niche venture capital provider to early stage financial services businesses, announces its audited Group final results for the year to 31st January 2013.

The highlights of the results are:

¡ Net asset value up 10.6% to £55.5m (2012: £50.1m)

¡ Net asset value per share of 190p (2012: 171p)

¡ Share price trading at 32.1% discount to Net Asset Value (as at 3rd June 2013) (2012: 48.2%)

¡ Consolidated profit after tax up 55.7% to £5.7m (2012: £3.6m)

¡ Annual compound growth rate of 11.9% achieved since formation

¡ £3.7m of realised gains delivered on sale of investments

¡ £1.8m of cash available at year-end, plus a further £4.3m Directors' loan facility available; a total of £6.1m. £4m available for new investments excluding commitments to existing investments

¡ Sale agreed for 80% of the Company's shareholding in Hyperion Insurance Group Limited, subject to regulatory consent. Sale price reflected in Hyperion valuation at year-end, which drove 55.7% uplift in profit over 2012

¡ Net Cash to be received of £20.0m (post-tax and loans) post-completion of the Hyperion sale. Directors' loan facility to be repaid and cancelled upon receipt

Chairman's Statement

I am pleased to present the audited Consolidated Financial Statements of B. P. Marsh & Partners Plc for the year ended 31st January 2013.

In this, our 23rd year of operations, I am pleased to be able to report that we have again been able to increase our NAV by 10.6%, as more particularly set out below.

Our eight investee companies, large and small, are all in good heart and facing the opportunities and challenges of 2013 with confidence and enthusiasm.

Whilst we expect major developments and changes to take place in our portfolio over the coming months, we have every confidence in the future of our business, which continues to enjoy much diversity and a truly global reach.

Agreement has been reached for a sale of 80% of our shareholding in Hyperion Insurance Group Ltd, however this is still subject to regulatory consent. We are not in the habit of setting out plans until we know with a degree of certainty what will prevail.

Business Update

Financial Performance

At 31st January 2013, the net asset value of the Group was £55.5m (2012: £50.1m), after making allowance for deferred corporation tax, an increase of 10.6%. This equates to a net asset value of 190p per ordinary share as at 31st January 2013 (2012: 171p).

The Group has therefore achieved an annual compound growth rate of 11.9% after running costs, realisations, losses and distributions and having made an appropriate allowance for deferred corporation tax since the Group's establishment in 1990 (excluding £10.1m raised on flotation).

Reflecting investment portfolio movement, including the unrealised increase on revaluation of the portfolio, the consolidated profit on ordinary activities after tax for the year was £5.7m (2012: profit of £3.6m), an increase of 55.7%. However, excluding portfolio movement the Group made a pre-tax profit of £0.06m (2012: profit of £0.11m). The Group aims each year to at least break even on an underlying basis, before taking into account any portfolio movement.

£3.7m of gains were realised on the sale of investments during the year, as set out below. Due to the value of these investments being included at sale price within the 31st January 2012 portfolio valuation, no profit was shown directly within the Consolidated Statement of Comprehensive Income as the uplift in valuation had been previously reflected as unrealised gains in previous years. On sale the £3.7m realised gains were therefore transferred from the fair value reserve to retained earnings within the Consolidated Statement of Financial Position.

The Board believes that the Group's prospects remain good, despite the continued difficult outlook for the global economy. The Directors continue to explore all opportunities for realisations and development within the portfolio.

Summary of Developments in the Portfolio

During the financial year ended 31st January 2013, the following developments took place within the Group and its portfolio:

·; Hyperion Insurance Group Limited ("Hyperion")

Partial disposal of shares to Murofo Investments SL ("Murofo")

In May 2012 the Group sold 2.75% of its 18.94% shareholding in Hyperion to a fellow investor, Murofo, for a total consideration of £4.54m, or the equivalent of £3.80 per share.

This sale resulted in the Group realising what was its overall equity investment in Hyperion, (£4.35m over 17 years) whilst allowing it to continue with a significant shareholding and the prospect of further growth. This sale delivered £3.7m in profit for the Group.

In July 2012 Hyperion completed the acquisition of Windsor Limited, an international insurance and reinsurance Lloyd's broking group. As a result of this acquisition, the Group's shareholding was diluted from 16.19% to 13.97%.

·; Besso Insurance Group Limited ("Besso")

Acquisition of further 6.71% shareholding

On 1st November 2012 the Group increased its shareholding by 6.71% for a cash consideration of £0.78m. The Group's equity interest in Besso increased from 30% to 36.71% as a result (with economic rights over 36.48%).

This further investment was made alongside a consortium of American investors, who are well-known to Besso's business, who acquired 5.85% of Besso for a cash consideration of £0.70m.

Subsequent to the above, Besso had a positive 2012 financial year and is in the final stages of negotiations to complete several value accretive acquisitions. The Group, having worked alongside Besso's management team in reviewing these investments, is of the opinion that these would be positive additions to Besso.

·; LEBC Holdings Limited ("LEBC")

LEBC Group Limited ("LEBC Group"), the trading subsidiary of LEBC, has announced a significant turnaround in its financial performance, which sees the national IFA and employee benefits consultancy secure a year-on-year turnaround in profit before tax of £1.1m (FY2012 profit of £0.5m versus FY2011 loss of £0.6m), on a turnover of £10.2m, for the year ended 30th September 2012.

The Edinburgh-headquartered firm, which has 13 branches throughout the United Kingdom, has also reported a positive start to the new year, with strong revenue and profit growth.

·; Summa Insurance Brokerage SL ("Summa")

Despite the economic environment in Spain, Summa grew revenue in 2012 and maintained a satisfactory profit margin, which is in stark comparison to many other insurance operations in the Spanish market.

The Group has been working alongside Summa's Management team to develop their interaction with the Lloyd's and London Market, and has made various introductions to augment Summa's service offering to their clients.

The Group has also assisted Summa in the sourcing and recruitment of a new Chief Financial Officer so as to further improve the infrastructure for growth within this investment.

Notwithstanding the above, 2013 is likely to be a challenging year for Summa and the Board have reflected continued uncertainty surrounding the Spanish economy within its valuation of the business.

·; The Broucour Group Limited ("Broucour")

By 31st January 2013 Turner Butler Limited, a specialist SME business sales agency and a subsidiary of Broucour reached £0.5m revenue in just six months trading since its acquisition for £0.4m on 27th July 2012, over double its budgeted target. This acquisition was funded by loan financing provided by the Group. As a result of this performance the first loan repayment of £0.05m was made in March 2013, over two months ahead of schedule.

Post Balance Sheet Events

·; Hyperion - Partial disposal of shares to General Atlantic 

On 27th March 2013, the Group reached agreement with General Atlantic to sell 80% of its shareholding in Hyperion (11.04% of Hyperion's issued share capital) alongside 3i, at £5.20 per share. Due to its size in relation to the remainder of the portfolio, this transaction was put before the Company's shareholders at a General Meeting on 16th April 2013 where it was duly approved, and completion is now conditional upon regulatory approvals being granted in Spain, Singapore and Texas, USA. Completion of this transaction will see the Company in receipt of £29.2m pre-tax, and represents an effective uplift of £4.3m upon the Company's 31st July 2012 valuation.

The Group will continue to hold a 2.76% shareholding in Hyperion, which will be held under a Call Option with General Atlantic, who will be able to purchase the shares at £5.20 for a period of three years, or when Hyperion undertakes an Initial Public Offering, whichever is the sooner. In addition, the Company will no longer benefit from its previous minority protections or a nominee director on the Hyperion Board due to its reduced shareholding.

One of the terms of the transaction was that the Company provide an ongoing £6m loan to enable Hyperion to refinance a majority of the existing shareholder debt, and this has been agreed at an interest rate of 7.5% (increasing if the Bank of England Base rate increases beyond 2.5%) for a minimum term of 12 months.

Due to the sale price being agreed and significant due diligence having been carried out prior to the year-end, the valuation of Hyperion as at 31st January 2013 is reflective of this offer.

·; LEBC

The Group can confirm that LEBC (the holding company for LEBC Group) has completed the acquisition of Sesame Bankhall Group's remaining 10% stake in LEBC Group, which Sesame has held since its initial investment in LEBC Group in 2000. LEBC Group is now a 100% subsidiary of LEBC.

The Group is also happy to announce that LEBC Group won the award for Best Retirement Advisor at the Money Marketing Financial Services Awards 2013. This is a fine vindication of the service offering provided by LEBC.

Directors' Loan

The Group repaid the £1.25m drawn down on the £4.325m Directors' Loan facility upon receipt of funds from the sale of Hyperion shares to Murofo, such that at the year-end no amounts were due. Since 31st January 2013 £2.08m of Directors' loans were used to fund a draw down by US Risk (UK) of its loan facility and a new acquisition for Besso, and a further £2.25m has been drawn down to fund a new investment opportunity due to complete shortly. The facility will be repaid in full following completion of the Hyperion disposal to General Atlantic and the facility will thereafter be cancelled.

Business Strategy

The Group typically invests amounts of up to £2.5m and only takes minority equity positions, normally acquiring between 15% and 45% of an investee company's total equity. Based on our current portfolio, the average investment has been held for approximately 9 years. The Group requires its investee companies to adopt certain minority shareholder protections and appoints a director to its board. The Group's successful track record is based upon a number of factors that include, amongst other things, a robust investment process, the management's considerable experience of the Financial Services sector and a flexible approach towards exit-strategies.

At the year end, the Group had £1.79m in cash, plus a further £4.325m Directors' loan facility available. Of the £6.1m, £4.0m is available for new investment opportunities after providing for commitments to loan funding for existing investments.

Board Composition

The Board appointed Natasha Dunbar as an executive director in February 2013, in order to reflect her increased involvement in the company and the executive duties that she had taken on. Natasha served as Managing Director of the Company between 2002 and 2008, following which she was appointed as a non-executive director.

Pursuant to the above transfer of duties the Board felt that an additional non-executive director would assist to rebalance the Board, and duly invited Campbell Scoones to join the Board as a non-executive director and member of the Remuneration Committee with effect from 19th April 2013.

Investment Opportunities

The Group continued to receive a strong inflow of opportunities in the year ended 31st January 2013 and believes that this trend will continue. The New Business Department gave its detailed consideration to a number of these; including propositions from within the insurance intermediary and wealth management sectors. The Group is currently in the final stages of completing a new investment and hopes to make an announcement regarding this within the next week. The Board will continue to pursue opportunities in the best interests of the Group's shareholders.

The Group's investment strategy remains unchanged; to take minority positions in profitable businesses with strong management teams and good growth potential. The Directors consider that the Group remains unique in its investment sector and we continue to see a sufficient number of investment opportunities with good management and business plans that would fit with our tried and tested business strategy.

Brian Marsh OBE

4th June 2013

Investments

As at 31st January 2013 the Group's equity interests were as follows:

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 in June 2011.

Date of investment: February 1995

Equity stake: 36.5%

31st January 2013 valuation: £5,223,000

The Broucour Group Limited

(www.amberglobe.co.uk)

In March 2008 the Group assisted in establishing Amberglobe, a business sales platform that provides valuation and negotiation services for the sale of SME businesses in the sub £3m sector. In July 2012 Broucour was formed as a new holding company for Amberglobe, and the Group financed the acquisition of Turner Butler.

Date of investment: March 2008

Equity stake: 49.0%

31st January 2013 valuation: £173,000

Hyperion Insurance Group Limited

(www.hyperiongrp.com)

The Group first invested in Hyperion in 1994. Hyperion owns, amongst other things, an insurance broker specialising in directors' and officers' ("D&O") and professional indemnity ("PI") insurance. A subsidiary of Hyperion became a registered Lloyd's insurance broker. In 1998 Hyperion set up an insurance managing general agency specialising in developing D&O and PI business in Europe.

Date of investment: November 1994

Equity: 13.8%

31st January 2013 valuation: £35,456,000

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: 21.9%

31st January 2013 valuation: £3,460,000

Paterson Squared, LLC

(www.paterson2.com)

Paterson Squared was founded by a group of professionals from the actuarial, capital markets and reinsurance advisory sectors in conjunction with the Group. The company uses sophisticated modelling techniques to assess risk, with a view to providing counter-party risk transaction advice.

Date of investment: April 2004

Equity stake: 22.5%

31st January 2013 valuation: £0

Portfolio Design Group International Limited

(www.surrendalink.co.uk)

In March 1994 the Group invested in the Portfolio Design Group, a company which sells with-profits life endowment policies to large financial institutions. In 2002 the company diversified into investment management.

Date of investment: March 1994

Equity stake: 20.0%

31st January 2013 valuation: £1,721,000

Randall & Quilter Investment Holdings plc

(www.rqih.com)

Randall & Quilter Investment Holdings is an AIM listed run-off management service provider and acquirer of solvent insurance companies in run-off. The Group invested in Randall & Quilter in January 2010, the result of a share exchange with the Group's shareholding in JMD Specialist Insurance Services Group Limited, which Randall & Quilter have now wholly acquired.

Date of investment: January 2010

Equity stake: 1.35%

31st January 2013 valuation: £785,000

Summa Insurance Brokerage, S. L.

(www.grupo-summa.com)

In January 2005 the Group provided finance to a Spanish management team with the objective of acquiring and consolidating regional insurance brokers in Spain.

Date of investment: January 2005

Equity stake: 48.63%

31st January 2013 valuation: £3,486,000

US Risk (UK) Limited

(www.oxfordinsurancebrokers.co.uk)

(jhinternational.co.uk)

In July 2010 the Group completed its investment in US Risk (UK), the parent company of Oxford Insurance Brokers Limited, a London-based Lloyd's insurance and reinsurance broker and James Hampden International Brokers Ltd, a specialist international reinsurance and insurance broking company.

Date of investment: July 2010

Equity stake: 29.3%

31st January 2013 valuation: £2,407,000

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 2013

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

CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION

31ST JANUARY 2013

The Financial Statements were approved by the Board of Directors and authorised for issue on 3rd June 2013

and signed on its behalf by:

B.P. Marsh & J.S. Newman

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31ST JANUARY 2013

\* The exchange movement as noted in the Consolidated Statement of Comprehensive Income is a gain of £37k (2012: loss of £51k). The exchange movement in the Consolidated Statement of Cash Flows excludes an exchange gain of £46k (2012: loss of £44k) relating to the revaluation of a loan denominated in Euros as this is a non-cash movement.

COMPANY STATEMENT OF CASH FLOWS

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 and the share repurchase during the year was physically made by BPMCL and reflected in the Company through an intercompany adjustment. Accordingly the Company's "cash and cash equivalents" balance as at 31st January 2013 is £1k (2012: £1k).

CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31ST JANUARY 2013

Refer to Note 21 for detailed analysis of the changes in the components of equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST JANUARY 2013

1. ACCOUNTING POLICIES

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 have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and financial liabilities through profit and loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates particularly in relation to investment valuation. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

New standards effective during the year

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.

Basis of consolidation

The Group financial statements consolidate the results and net assets of the Company and all of its subsidiary undertakings.

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 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 operatingpolicies. 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, 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 £5,676,742, prior to a dividend distribution of £292,861 (2012: profit of £3,644,959).

Investments

All 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 investments. In valuing 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 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 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 investments are expensed in the Consolidated Statement of Comprehensive Income.

Income from investments

Income from 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.

Carried interest provision

This represents the amount payable to a director in the event of a particular investment being sold and is calculated on the fair value of that investment at the end of each reporting period.

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.

Taxation

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 until the date the rent is expected to be adjusted to the prevailing market rate.

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.

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, the International Accounting Standards Board ("IASB") and International Financial Reporting Interpretations Committee ("IFRIC") have issued the following standards, which are effective for annual accounting periods beginning on or after the stated effective date. 

The Group is currently assessing the impact of IFRS 10 "Investment Entities (Amendments)". All other standards and interpretations are not expected to have a material impact on the consolidated financial statements.

As the Group prepares its financial statements in accordance with IFRS as adopted by the European Union, the application of new standards and interpretations will be subject to their having been endorsed for use in the EU via the EU Endorsement mechanism. In the majority of cases this will result in an effective date consistent with that given in the original standard or interpretation but the need for endorsement restricts the Group's discretion to early adopt standards.

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 unrealised gains and losses on the Group's non-current investments).

Each reportable segment derives its revenues from three main sources. These are described in further detail in Note 1 under 'Income from 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:

5. STAFF COSTS

The average number of employees, including all directors (executive and non-executive), employed by the Group during the year was 16 (2012: 16). All remuneration was paid by B. P. Marsh & Company Limited.

Included within the prior year wages and salaries total above was a one-off compensation payment of £30,000 made to a director who left the Group during the year (see Note 6 below). This was included in the Consolidated Statement of Comprehensive Income as an exceptional item. No such payment was made to any of the employees in the current year.

In addition to the above, Mr S. S. Clarke has an entitlement to a gain based on a carried interest, as outlined in Note 17.

Included within the prior year management services total above was a one-off compensation payment of £30,000 made to a director who left the Group during that year. This was included in the Consolidated Statement of Comprehensive Income as an exceptional item. No such payment was made to any of the directors in the current year.

The Company contributes into its defined contribution pension scheme 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 period, 3 directors (2012: 4) accrued benefits under the defined contribution pension scheme.

Factors affecting the charge for the year

There are no factors which may affect future tax charges except as set out in Note 18.

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

In August 2012 the Company repurchased 56,143 ordinary shares at a price of 89 pence per ordinary share. These shares were immediately cancelled upon purchase, resulting in a reduction in the number of ordinary shares in issue from 29,286,143 to 29,230,000.

The principal addition in the year relates to the acquisition on 1st November 2012 of a further 6.71% shareholding in Besso Insurance Group Limited for £775,000.

The principal disposals relate to the following transactions in the year:

On 16th March 2012 the Group made a partial disposal of 4.02% of its then total 34.02% equity interest in Besso Insurance Group Limited ("Besso") with a carrying value of £279,000 for consideration of £278,698. The partial disposal was made from an 11.29% equity interest in Besso originally acquired on 31st March 2011 by B. P. Marsh & Company Limited, a wholly owned subsidiary of the Company, which at the time increased the Group's overall holding from 22.73% to 34.02%. The 4.02% disposal represented the proportion of shares which were available for buy-back by Besso following the exercise of a Call Option agreement (entered into on 26th May 2011) for subsequent issue to management under a share incentive scheme. As a result of the Call Option being exercised, and the further 6.71% acquired on 1st November 2012 (noted above), the Group's overall holding in Besso as at 31st January 2013 was 36.71%.

On 17th May 2012 the Group made a disposal of 2.75% of its then total 18.94% equity interest in Hyperion Insurance Group Limited ("Hyperion"). 1,193,500 shares (from a total holding of 8,222,900 shares) were sold to an existing Hyperion shareholder and co-investor, Murofo Investments S.L., for a cash consideration of £4,535,330. Following a major acquisition by Hyperion on 3rd July 2012 which was part funded by the issue of new shares, as at 31st January 2013 the Group's overall holding in Hyperion stood at 13.84%.  

Group (continued)

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage S. L. (Spain), Preferred Asset Management Limited (Jersey), Close Horizons Limited (Isle of Man) and Paterson Squared, LLC (USA), are as follows:

In addition, as at 31st January 2013 the Group held 1.35% of the share capital of Randall & Quilter Investment Holdings Plc ("R&Q"). R&Q is an AIM listed company. During the current year R&Q made two 'return of value' distributions totalling £55,442 to shareholders through the issue and subsequent cancellation of new shares. The Group elected to receive these distributions (£32,731 in June 2012 and £22,711 in November 2012) as 'capital' receipts rather than the dividend (income) alternative. The Group has treated these distributions as disposal proceeds and reduced the cost base of this investment accordingly, resulting in a £4,501 realised gain on disposal of investment (see Note 13) which is reflected in the Consolidated Statement of Comprehensive Income for the year.

On 27th July 2012 the Company's wholly owned subsidiary B. P. Marsh & Company Limited entered into a Share Exchange Agreement with The Broucour Group Limited ("the Broucour Group") in respect of its 49% equity investment in Amberglobe Limited ("Amberglobe"). On this date the Broucour Group acquired the entire issued share capital of Amberglobe (£200,000 divided into £130,000 ordinary shares and £70,000 preference shares of £1 each, of which the Group, through its subsidiary undertaking, owned £98,000 divided into £28,000 ordinary shares and £70,000 preference shares). The Broucour Group was incorporated in July 2012 as a holding company to facilitate the acquisition of the assets of Turner Butler Limited ("Turner Butler"). The Group assisted in this acquisition by providing the Broucour Group with a £600,000 loan facility to fund the acquisition cost and associated working capital requirements which was drawn down in full on 27th July 2012. As a result of this transaction, the Group's original investment in Amberglobe is now held in the Broucour Group, with Amberglobe now a wholly owned subsidiary of the Broucour Group.

The aggregate capital and reserves and profit / (loss) for the year shown above are extracted from the relevant local GAAP accounts of the investee companies except for those of Hyperion Insurance Group Limited which are prepared under IFRS.

Shares in group undertakings

All group undertakings are registered in England and Wales. The details and results of group undertakings, which are extracted from the UK GAAP accounts of these companies, are as follows: