Brooks Macdonald Regulatory News (BRK)

BROOKS MACDONALD GROUP PLC

HALF YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2013

Brooks Macdonald Group plc ("Brooks Macdonald" or the "Group"), the AIM listed integrated wealth management group, today announces its report for the six months ended 31 December 2013.

Financial Highlights

*adjusted for acquisition costs and amortisation of client relationships

Business Highlights:

· Strong growth in discretionary FUM (Asset Management, International and Funds):

o Organic growth of £570m or 11% over the six month period

o Organic growth of over £1 billion or 23% year on year

o APCIMS Balanced index grew by 5.0% over the six month period and 10.8% over the year

o Includes Brooks Macdonald Funds' FUM of £447m (2012: £232m, June 2013: £390m) 

· Property assets under administration, managed by Braemar Estates, grew to £1,071m (2012: £885m, June 2013: £1,040m), an increase of 14%

· Third party assets under administration are now in excess of £160m (2012: >£100m, June 2013: >£140m)

· Interim dividend increased 8% to 7.0p (2012: 6.5p) reflecting the Board's continued confidence in the Group's progress

· Invested in a new partnership, North Row Capital LLP, which offers investors liquid exposure to global real estate markets; successfully launched its first fund

· Acquired an option to buy Levitas, which expands our range of risk adjusted funds and adds further exposure to the pensions market including auto enrolment

Commenting on the results and outlook, Chris Macdonald, Chief Executive, said:

"The first half of our financial year has been a solid period of progress for the Group with continued growth in discretionary funds under management, further development of our investment offering, distribution and IT systems."

"We are pleased with the progress the Group has made and has continued to make since the half year end."

An analyst meeting will be held at 9.15 for 9.30am on Wednesday, 12 March at the offices of MHP Communications, 60 Great Portland Street, London, W1W 7RT. Please contact Simon Hockridge on

020 3128 8789 or e-mail brooks@mhpc.comfor further details.

Enquiries to:

Notes to editors

Brooks Macdonald Group plc is an AIM listed, integrated, wealth management group. The Group consists of six principal companies: Brooks Macdonald Asset Management Limited, a discretionary asset management business; Brooks Macdonald Funds Limited, a fund management business; Brooks Macdonald Financial Consulting Limited, a financial advisory and employee benefits consultancy; Brooks Macdonald Asset Management (International) Limited, a Jersey and Guernsey based provider of discretionary investment management and stockbroking; Brooks Macdonald Retirement Services (International) Limited, a retirement planning services provider and Braemar Estates (Residential) Limited, an estate management company.

CHAIRMAN'S STATEMENT

Introduction

The Group has made good progress over the six month period with continued growth in discretionary funds under management, increased profits, strong investment performance and further growth of its distribution capabilities.

Results

Profit before tax for the period increased to £4.93m from £4.26m. Adjusting for acquisition costs and amortisation of client relationships profit before tax increased to £6.16m from £6.07m.

Earnings per share have increased to 32.63p from 25.35p for the same period last year with a lower overall tax charge reflecting a reduction in the rate of deferred tax in respect of the acquired intangible assets.

Dividend

The Board has declared an interim dividend of 7p. This is an increase of 7.7% compared with last year's interim dividend. This reflects the Board's continued confidence in the Group's progress and continues our progressive dividend policy. The interim dividend will be paid on 17 April 2014 to shareholders on the register on 21 March 2014.

Funds under Management

As announced on 24 January 2014 our discretionary funds totalled £5.68 billion as at 31 December 2013 (2012: £4.62bn). This represents growth of 11% over the six month period and organic growth of over £1 billion year on year (c. 23%).

Property assets under administration totalled £1.071 billion (2012: £885m), advisory assets £374m (2012: £373m) and third party assets under administration over £160m (2012: >£100m).

Business review

The first half of our financial year has been a period of solid progress for the Group with continued growth in discretionary funds under management, further development of our investment offering, distribution and IT systems.

Investment markets were supportive and we delivered strong risk-adjusted returns for our discretionary clients. Funds under management grew by £570m over the six months to £5.68bn which was a combination of net new business of £315m and investment growth of £255m. This represents growth of 11% over the period which compares to growth in the APCIMS Balanced Index of 5% over the same period.

Growth was achieved across the Group, onshore and offshore, in our Bespoke Private Client Service ('BPS'), Funds and Managed Portfolio Service ('MPS'). I am also pleased to report that we have launched an MPS offshore similar to our onshore offering. In addition our property assets under administration managed by Braemar Estates rose by £30m (2.9%) and our third party assets grew by £40m (33%) in the six month period. Financial Consulting income grew by 13% relative to the same period last year.

We have continued to invest in our investment offering. This takes the form of continuing investment in our research capabilities, IT systems (mainly in the form of monitoring volatility on all assets) and expanding the range of investable assets. With regards to the latter the Group has entered into a new partnership, North Row Capital LLP which offers investors liquid exposure to global real estate markets. I am pleased to report that the fund (IFSL North Row Liquid Property Fund) launched successfully at the end of February.

In addition and as also previously announced, the Group acquired an option to buy Levitas Investment Management Services Limited, exercisable from July 2014. As well as expanding our range of risk adjusted funds this gives the Group further exposure to employee benefits as the funds are designed to cater for company and individual pension contributions specifically around 'auto enrolment'.

We have continued to work with an increasing number of professional advisers. The number of firms that the Group works with now exceeds 620 having more than doubled within the last two years. We have announced a further two Strategic Alliances since the year end, bringing our total to 14.

Whilst still early days I am pleased that Brooks Macdonald International ('BMI') is starting to work with advisers both in the UK and further afield. This is an exciting development for the Group as it extends BMI's reach to a new and wider potential client base.

Crucial to the continuing success of the business is our investment performance and our people. I am pleased to report that the Group has been identified as the only discretionary fund manager to achieve the highest level of Defaqto (an independent, financial research company in the UK) Star and Diamond Rating in all four categories of discretionary management (MPS, Bespoke, Funds and Platforms). In addition we are delighted to be listed in the Sunday Times 100 Best Companies to work for 2014 and have won a further 5 industry awards. These are important external endorsements of the business.

Outlook and Summary

There continues to be a huge amount of change in our industry. This change is focused on regulation and the related increase in costs, the continued desire for clients to look at risk-rated returns, changes in the distribution landscape for investment management, auto enrolment, margin compression and the speed of technological change particularly around client reporting. We are pleased with the progress we have made both to meet these changes and in the development of our business. Our expectations for the current year remain in place.

Christopher Knight

Chairman

11 March 2014

BROOKS MACDONALD GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 31 December 2013

The accompanying notes form an integral part of these condensed consolidated financial statements.

BROOKS MACDONALD GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 December 2013

The condensed consolidated financial statements were approved by the Board of Directors and authorised for issue on 11 March 2014, signed on their behalf by:

Company registration number: 4402058

The accompanying notes form an integral part of these condensed consolidated financial statements..

BROOKS MACDONALD GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the period 1 July 2012 to 31 December 2013

The accompanying notes form an integral part of these condensed consolidated financial statements.

BROOKS MACDONALD GROUP PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended 31 December 2013

The accompanying notes form an integral part of these condensed consolidated financial statements.

BROOKS MACDONALD GROUP PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the six months ended 31 December 2013

1. General information

Brooks Macdonald Group plc ('the Company') is the parent company of a group of companies ('the Group'), which offers a range of investment management services and related professional advice to private high net worth individuals, charities, and trusts. The Group also provides financial planning as well as offshore fund management and administration services and acts as fund manager to regulated OEICs, providing specialist funds in the property and structured return sectors and managing property assets on behalf of these funds and other clients. The Group's primary activities are set out in its Annual Report and Accounts for the year ended 30 June 2013.

The Group has offices in London, Edinburgh, Guernsey, Hale, Hampshire, Jersey, Leamington Spa, Manchester, Taunton, Tunbridge Wells and York. The Company is a public limited company, incorporated and domiciled in the United Kingdom under the Companies Act 2006 and listed on AIM. The address of its registered office is 111 Park Street, London, W1K 7JL.

The consolidated interim financial information was approved for issue on 11 March 2014. It has been independently reviewed but is not audited.

2. Accounting policies

a) Basis of preparation

The Group's condensed consolidated half yearly financial statements are prepared and presented in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union. They have been prepared on a going concern basis with reference to the accounting policies and methods of computation and presentation set out in the Group's consolidated financial statements for the year ended 30 June 2013, except as stated below. The half yearly financial statements should be read in conjunction with the Group's audited financial statements for the year ended 30 June 2013, which have been prepared in accordance with IFRS as adopted by the European Union.

The information in this announcement does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group's accounts for the year ended 30 June 2013 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not draw attention to any matters by way of emphasis. It contained no statement under section 498(2) or (3) of the Companies Act 2006.

b) New accounting policies

The Group's accounting policies are consistent with those disclosed within the annual financial statements for the year ended 30 June 2013, except as described below.

i) Investments in joint ventures

A joint venture is an entity in which the Group holds a long-term interest and is jointly controlled by the Group and one or more third parties under a contractual agreement. Under the equity method of accounting, interests in joint ventures are initially recognised at cost in the Condensed Consolidated Statement of Financial Position and subsequently adjusted to reflect changes in the Group's share of the net assets of the entities. The Group's share of the results of joint ventures is included in the Condensed Consolidated Statement of Comprehensive Income.

If the Group's share of the losses of a joint venture equals or exceeds its investment, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint venture.

New standards, amendments and interpretations adopted by the Group

In the current period no new standards, amendments or interpretations adopted by the Group have had a material effect on the amounts reported in these financial statements.

New standards, amendments and interpretations not affecting the reported results of the Group

The following standards, amendments and interpretations have been adopted in the current period. Their adoption has not had a significant impact on the amounts reported in these financial statements but may impact the accounting for future transactions and arrangements:

New standards, amendments and interpretations not yet effective

A number of new standards, amendments and interpretations, which have not been applied in preparing these financial statements, are effective for annual and interim periods beginning on or after 1 January 2014:

None of these are expected to have a significant impact on the Group's future financial statements.

3. Financial risk factors

The Group's activities expose it to a variety of financial and non-financial risks. The principal risks faced by the Group are described on pages 52 to 54 of the Annual Report and Accounts for the year ended 30 June 2013. These key risks include: loss of clients or reputational damage as a result of poor performance or service; regulatory breaches; loss of key staff; potential service issues with IT infrastructure; operational risk due to inadequate processes and controls; and financial risks such as liquidity risk, market risk and credit risk. These remain our principal risks for the second half of the financial year. There have been no significant changes affecting the fair value or classification of financial assets during the period.

4. Segment information

For management purposes the Group's activities are organised into three operating divisions: investment management (including the results of Brooks Macdonald (International) Limited, financial planning (including the results of Brooks Macdonald Retirement Services (International) Limited) and fund and property management. The Group's other activity, offering nominee and custody services to clients, is included within investment management. These divisions are the basis on which the Group reports its primary segment information.

Revenues and expenses are allocated to the business segment that originated the transaction. Revenues and expenses that are not directly originated by a particular business segment are reported as unallocated. Sales between segments are carried out at arm's length. Centrally incurred expenses are allocated to business segments on an appropriate pro-rata basis. Segment assets and liabilities comprise operating assets and liabilities, being the majority of the balance sheet.

In accordance with IFRS 8 'Operating Segments', disclosures are required to reflect the information which the Board uses internally for evaluating the performance of its operating segments and allocating resources to those segments. The information presented in this note follows the presentation for internal reporting to the Group Board of Directors.

a) Geographic analysis

The Group's operations are located in the United Kingdom and the Channel Islands. The following table presents underlying operating income analysed by the geographical location of the Group entity providing the service.

b) Major clients

The Group is not reliant on any one client or group of connected clients for the generation of revenues.

5. Administrative costs

Administrative costs for the six months ended 31 December 2013 include a charge of £81,000 in respect of an estimated interim levy by the Financial Services Compensation Scheme ('FSCS') relating to the 2013/14 scheme year. For the six months ended 31 December 2012, administrative costs included a similar provision of £240,000 in respect of estimated levies by the FSCS relating to the 2012/13 and 2013/14 scheme years. For the year ended 30 June 2013, administrative costs included a total charge of £359,000 for FSCS levies.

6. Taxation

The current tax expense for the six months ended 31 December 2013 was calculated based on the estimated average annual effective tax rate. The overall effective tax rate for this period was 12.97% (six months ended 31 December 2012: 32.32%; year ended 30 June 2013: 22.77%).

The UK Government has proposed that the UK corporation tax rate be reduced to 20% by 2015. It was reduced from 24% to 23% on 1 April 2013 and will further reduce from 23% to 21% on 1 April 2014. As a result, the corporation tax rate used to calculate the current tax charge is a 'blended' rate of 22.50% (six months ended 31 December 2012: 23.75%; year ended 30 June 2013: 23.75%).

Deferred tax assets and liabilities are calculated at the rate that is expected to be in force when the temporary differences unwind, but limited to the extent that such rates have been substantively enacted at the respective balance sheet dates. The Finance Act 2013 was substantively enacted on 2 July 2013 with the effect that the rate of corporation tax will reduce from 23% to 21% from 1 April 2014 and then to 20% from 1 April 2015. As a result, deferred tax at the reporting date has been measured using a rate of 20% (six months ended 31 December 2012: 23%; year ended 30 June 2013: 23%) on the basis that it will materially reverse on or after 1 April 2015.

7. Earnings per share

8. Dividends

An interim dividend of 7.0p per share was declared by the Board of Directors on 11 March 2014. It will be paid on 17 April 2014 to shareholders who are on the register at the close of business on 21 March 2014. In accordance with IAS 10, this dividend has not been included as a liability at 31 December 2013.

9. Intangible assets

a) Goodwill

Goodwill acquired in a business combination is allocated at acquisition to the cash generating units ('CGUs') that are expected to benefit from that business combination. The carrying amount of goodwill at 30 June 2013 comprises £3,550,000 in respect of the Braemar Group Limited ('Braemar') CGU and £17,208,000 in respect of the Brooks Macdonald Asset Management (International) Limited and Brooks Macdonald Retirement Services (International) Limited (collectively 'Brooks Macdonald International') CGU.

At the reporting date, there were no indicators that the carrying amount goodwill should be impaired.

b) Computer software

Software costs are amortised over an estimated useful life of four years on a straight line basis.

c) Acquired client relationship contracts

This asset represents the fair value of future benefits accruing to the Group from acquired client relationship contracts. The amortisation of client relationship contracts is charged to the Condensed Consolidated Statement of Comprehensive Income on a straight line basis over their estimated useful lives (15 to 20 years).

d) Contracts acquired with fund managers

This asset represents the fair value of future benefits accruing to the Group from contracts acquired with fund managers. Payments made to acquire such contracts are stated at cost and amortised on a straight line basis over an estimated useful life of five years.

10. Property, plant and equipment

During the six months ended 31 December 2013, the Group acquired assets at a cost of £856,000 (six months ended 31 December 2012: £353,000; year ended 30 June 2013: £917,000). No assets were disposed of in the six months ended 31 December 2013 (six months ended 31 December 2012: £nil; year ended 30 June 2013: £nil), resulting in a gain on disposal of £nil (six months ended 31 December 2012: £nil; year ended 30 June 2013: £nil).

11. Available for sale financial assets

During the period the Group made an investment of £250,000 in Sancus Holdings Limited, an unlisted company incorporated in the Channel Islands. The market value of the investment at 31 December 2013 is £250,000.

Available for sale financial assets include an investment in Braemar Group PCC Limited Student Accommodation Cell - B shares of £1,493,000. The fund is managed by Brooks Macdonald Funds Limited, a subsidiary of the Group. Trading is currently suspended on this fund, however the fund manager continues to publish a price based on the fair value of the underlying assets of the fund.

12. Investment in joint venture

During the period Brooks Macdonald Funds Limited, a subsidiary of the Group, entered into a new partnership, North Row Capital LLP, in which it holds a 60% interest and has joint control. The balance is owned by two individual partners who developed the investment approach behind the IFSL North Row Liquid Property Fund, which was launched in February 2014. The fund offers investors liquid exposure to global real estate markets by investing predominantly in property derivatives, as well as property equity and debt, to gain exposure to the direct property markets.

The establishment of the partnership and the fund required an investment of approximately £146,000 by Brooks Macdonald Funds in the six months ended 31 December 2013. The Group's share of the loss for the period reported by North Row Capital LLP was £71,000, which has been recognised in the Condensed Consolidated Statement of Comprehensive Income with a corresponding reduction in the investment in joint venture recognised in the Condensed Consolidated Statement of Financial Position.

13. Financial assets at fair value through profit or loss

During the period the Group acquired an equity shareholding in an unlisted investment. The cost of the investment was £50,000 and its market value at 31 December 2013 was £50,000.

14. Deferred consideration

Deferred consideration, which is also included within provisions in current liabilities to the extent that it is due to be paid within one year of the reporting date (note 15), relates to the directors' best estimate of amounts payable in the future in respect of certain client relationships and subsidiary undertakings that were acquired by the Group. Deferred consideration is measured at its fair value based on discounted expected future cash flows. Amounts falling due after more than one year from the reporting date are presented in non-current liabilities as shown below.

There were no acquisitions during the six months ended 31 December 2013. The amount payable in respect of acquisitions during the six months ended 31 December 2012 of £5,691,000 comprises deferred consideration of £4,319,000 relating to the acquisition of Brooks Macdonald Asset Management (International) Limited and Brooks Macdonald Retirement Services (International) Limited and £1,372,000 relating to the acquisition of JPAM Limited.

15. Provisions

a) Client compensation

Client compensation provisions relate to the potential liability arising from client complaints against the Group. Complaints are assessed on a case by case basis and provisions for compensation are made where judged necessary. Complaints are on average settled within eight months (six months ended 31 December 2012: eight months; year ended 30 June 2013: eight months) from the date of notification of the complaint.

b) Deferred consideration

Deferred consideration has been included within provisions as a current liability to the extent that it is due to be paid within one year of the reporting date.

A total provision for deferred consideration of £1,868,000 was utilised during the six months ended 31 December 2013 (six months ended 31 December 2012: £1,240,000; year ended 30 June 2012: £3,637,000). This included an amount of £982,000 paid in August 2013 to the vendors of JPAM Limited and an amount of £886,000 paid in December 2013 to Clarke Willmott LLP, representing the final instalment in respect of the client relationships acquired by the Group.

An amount of £5,535,000 (six months ended 31 December 2013: £995,000; year ended 30 June 2013: £959,000) was transferred from non-current liabilities during the period, representing £942,000 payable in August 2014 in respect of JPAM Limited and £4,593,000 payable in November 2014 in respect of Brooks Macdonald Asset Management (International) Limited and Brooks Macdonald Retirement Services (International) Limited.

Details of the acquisition of Brooks Macdonald Asset Management (International) Limited and JPAM Limited are contained in the Annual Report and Accounts for the year ended 30 June 2013 on pages 37 to 39.

c) Other provisions

Other provisions include an amount of £81,000 in respect of an estimated interim levy by the Financial Services Compensation Scheme on the 2013/14 scheme year. At 31 December 2012 and 30 June 2013 a similar provision of £240,000 was included in respect of levies on the 2012/13 and 2013/14 scheme years.

16. Reconciliation of operating profit to net cash inflow from operating activities

17. Related party transactions

At 31 December 2013, two of the Company's directors (at 31 December 2012: three; at 30 June 2013: three) had taken advantage of the season ticket loan facility that is available to all staff. The total amount outstanding at the reporting date was £11,000 (at 31 December 2012: £11,000; at 30 June 2013: £9,000).

18. Share-based payment schemes

a) Long Term Incentive Scheme (LTIS)

The Company has made annual awards under the LTIS to executive directors and other senior executives. The conditional awards, which vest three years after the grant date, are subject to the satisfaction of specified performance criteria, measured over a three year performance period. All such conditional awards are made at the discretion of the Remuneration Committee.

b) Employee Benefit Trust

The Group established an Employee Benefit Trust ('the Trust') on 3 December 2010. The Trust was established in order to acquire ordinary shares in the Company to satisfy rights to purchase shares on the exercise of options awarded under the LTIS. All finance costs and administration expenses connected with the Trust are charged to the Condensed Consolidated Statement of Comprehensive Income as they accrue. The Trust has waived its rights to dividends.

As at 31 December 2013, the Company had paid £3,136,000 to the Trust, which had acquired 251,072 ordinary shares on the open market for consideration of £3,114,000.

In November 2013, in respect of the scheme granted in October 2010, the Trust received instructions to exercise 11,376 options. The cost of the shares released on exercise of these options amounted to £109,000. At the reporting date, the number of shares held in the Trust was 239,696 with a market value of £3,542,000.

c) Company Share Option Plan

The Company has established a Company Share Option Plan ('CSOP'), which was approved by HMRC in November 2013. The CSOP is a discretionary scheme whereby employees or directors are granted an option to purchase the Company's shares in the future at a price set on the date of the grant. The maximum award under the terms of the scheme is a total market value of £30,000 per recipient. The performance conditions attached to the scheme require an increase in the diluted earnings per share of the Company of 2% more than the increase in the RPI over the three years starting with the financial year in which the option is granted.

A grant of 21,361 share options with an exercise price of £14.52 was made under the scheme to directors and employees on 1 December 2013.

d) Other share schemes

No awards have been made under other the Group's other share based payment schemes, details of which are provided on pages 48 to 50 of the Annual Report and Accounts for the year ended 30 June 2013.

19. Capital and financial commitments

On 19 December 2013 the Company signed a put and call option agreement with the shareholders of Levitas Investment Management Services Limited ('Levitas') in respect of the sale and purchase of the entire issued share capital of Levitas.

Under the terms and subject to the conditions of the option agreement:

a) the shareholders of Levitas have granted to the Group a call option to require the shareholders to sell the entire issued share capital of Levitas; and

b) the Group has granted to the shareholders of Levitas a put option to require the Group to purchase the entire issued share capital of Levitas.

The consideration payable by the Group, upon exercise of either of the options, will be based on 3% of Levitas' funds under management, calculated at agreed milestones up to 1 November 2018. The maximum consideration payable by the Group will be £24,000,000 and is subject to reduction if the growth in funds under management fails to meet the agreed targets. Payment of the consideration will be made by the Group in cash in a series of instalments, with the final payment date being on or around 8 November 2020.

The call option may be exercised by the Group during the period 18 July 2014 to 7 August 2014 and the put option may be exercised by the shareholders of Levitas during the period 8 August 2014 to 28 August 2014. If neither option is exercised before the expiry of the relevant option period, the options will lapse and the option agreement will terminate.

In the eighteen-month accounting period ended 31 December 2012, Levitas reported a profit before tax of £7,000 on revenues of £52,000.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that these condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

· an indication of important events that have occurred during the first six months and their impact on the condensed set of consolidated financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

· material related party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The directors of Brooks Macdonald Group plc are listed in the Annual Report and Accounts for the year ended 30 June 2013.

By order of the Board of Directors

S J Jackson

Finance Director

11 March 2014

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF BROOKS MACDONALD GROUP PLC

Introduction

We have been engaged by the Company to review the condensed consolidated set of financial statements in the Half Yearly Financial Report for the six months ended 31 December 2013, which comprise the Condensed Consolidated Statement of Comprehensive Income, the Condensed Consolidated Statement of Financial Position, the Condensed Consolidated Statement of Changes in Equity, the Condensed Consolidated Statement of Cash Flows and the related notes. We have read the other information contained in the Half Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated financial statements.

Directors' responsibilities

The Half Yearly Financial Report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half Yearly Financial Report in accordance with the AIM Rules for Companies, which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this Half Yearly Financial Report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated set of financial statements in the Half Yearly Financial Report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated set of financial statements in the Half Yearly Financial Report for the six months ended 31 December 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules for Companies.

PricewaterhouseCoopers LLP

Chartered Accountants

11 March 2014

7 More London Riverside, London, SE1 2RT

Notes:

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

The maintenance and integrity of the Brooks Macdonald website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.