B.P. Marsh & Partners PLC Annual Report 2022

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FY2022 Annual Report · B.P. Marsh & Partners PLC

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Annual Report 2022

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B.P. Marsh & Partners plc
4 Matthew Parker Street
London, SW1H 9NP

T +44 (0)20 7233 3112
E enquiries@bpmarsh.co.uk

www.bpmarsh.co.uk

The Group invests amounts of up to
£5m in the first round financings and
takes a flexible approach to investment
structures, reviewing companies ranging
from start-ups to those that have
developed to the next stage of growth.
The Group initially only takes minority
equity positions and does not seek to
impose exit pressures, preferring to be
able to take a long-term view where
required and work alongside
management to a mutually beneficial
exit route that maximises value.

B.P. Marsh has invested in over 50
businesses since it was founded in 1990
and its management team has a wealth of
experience and a well-developed network
within the Financial Services sector.

B.P. Marsh & Partners PLC is a specialist
investor in early stage and growing
financial services intermediary businesses.
Whilst it is open to proposals to invest in
all facets of the non-risk bearing financial
services market, the Group considers its
focus to be on insurance intermediaries,
an area in which it has a great deal of
experience. The Group will consider
opportunities globally, and currently
has a significant presence in North
America and Australia.

The Group’s aim is to be the capital
provider of choice for the early-stage and
growing financial services intermediary
sector and to deliver to its investors
long-term capital growth alongside
a sustainable distribution policy.

The Group considers this to be achievable
through partnering with strong
management teams to back credible
business opportunities to which the Group
can provide strategic and financial
assistance. The Group therefore
considers the people element of its
business as vital to its success.

We are farmers,
not hunters

Company Information

DIRECTORS
Brian Marsh OBE (Chairman)
Alice Foulk (Managing Director)
Jonathan Newman (Group Director of Finance)
Daniel Topping (Chief Investment Officer)
Pankaj Lakhani (Non-executive)
Nicholas Carter (Non-executive)

COMPANY SECRETARY
Sinead O’Haire

COMPANY NUMBER
05674962

REGISTERED OFFICE
4 Matthew Parker Street
London, SW1H 9NP

AUDITORS
Rawlinson & Hunter Audit LLP
8th Floor, 6 New Street Square
London, EC4A 3AQ

BROKER AND NOMINATED ADVISER
Panmure Gordon (UK) Limited
One New Change
London, EC4M 9AF

REGISTRAR
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA

B.P. Marsh • 2022 Annual Report • Contents

Contents

2 Operating and Financial Highlights

4 Joint Statement by the Chairman and Managing Director

7 Chief Investment Officer’s Portfolio Update

15 Financial Review

20 Current investments: United Kingdom

22 Current investments: Rest of the world

24 Directors and Company Secretary

25 Directors’ Report & Strategic Report & Consolidated Financial Statements

26 Directors’ and Group Company Secretary biographies

28 Corporate Governance

34 Report of the Remuneration Committee

38 Report of the Audit Committee

40 Group Report of the Directors

45 Group Strategic Report

Independent Auditor’s Report

68 Consolidated Statement of Comprehensive Income

69 Consolidated and Parent Company Statements of Financial Position

70 Consolidated Statement of Cash Flows

71 Parent Company Statement of Cash Flows

71 Consolidated and Parent Company Statements of Changes in Equity

72 Notes to the consolidated financial statements

B.P. Marsh • 2022 Annual Report • Operating and Financial Highlights

Operating
and Financial
Highlights

B.P. Marsh & Partners Plc

(AIM: BPM), the specialist

investor in early stage

financial services

businesses, announces

its audited Group final

results for the year to

31 January 2022.

462.7p

Net Asset Value
increase to 462.7p
per share
(31 January 2021:
416.4p)

11.7%

Total return to
Shareholders in
the year

14.7%

Increase in equity
value of the portfolio
over the year

£166.6m

Net Asset Value,
a 11.1% increase,
net of Dividend

Group valuations

s
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£

175

150

125

100

22.10 40.61 44.17 62.97 70.81 79.68 98.90 120.10 126.24 130.00 136.90

142.6

149.9

155.0

166.6

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Year ended

Six months ended

NB: The valuation at 31 January 2007 includes £10.1m net proceeds raised on AIM. The valuations from and including

31 July 2018 include £16.6m net proceeds raised in the July 2018 Share Placing and Open Offer.

B.P. Marsh • 2022 Annual Report • Operating and Financial Highlights

£14.7m

Available cash net
of £2.8m follow-on
investment into XPT

11.6%

Average Net Asset
Value annual
compound growth
rate since 1990

2.78p

Final Dividend
of 2.78p per
share declared
(31 January 2021:
2.44p)

Historic dividend and share price performance

1.8

1.6

1.4

1.2

1.0

0.8

0.6

s
n
o

i
l
l
i

m
£

£1.30

£1.05

0.4

£0.93

£0.95

£2.86

£2.54

£2.61

£2.70

£2.06

£3.55

£4.00

£3.50

£3.00

£2.50

£2.00

£1.47

£1.27

£1.31

£1.60

£1.51

£1.50

£1.00

£0.50

£0.00

£1.25

£1.01

£1.35

£1.40

£1.47

£0.95

£1.22

£1.18

£0.95

0.2

0.0

0.29M 0.29M 0.365M 0.80M 0.80M 1.00M

1.10M 1.714M

1.714M

0.80M

0.88M

1.00M

JAN 11

JAN 12

JAN 13

JAN 14

JAN 15

JAN 16

JAN 17

JAN 18

JAN 19

JAN 20

JAN 21

JAN 22

BPM share price

FTSE AIM all share, rebased

BPM level of dividends paid

Joint Statement by the
Chairman and Managing Director

“ The Group has delivered another

strong set of results, against
a difficult macro-economic
environment, namely Covid-19.
The Group continues to
demonstrate the effectiveness
of its investment criteria, and
following a number of successful
disposals, will be looking for
more high-quality investment
opportunities to bolster an
already high performing portfolio.”

Brian Marsh OBE, Chairman

Alice Foulk, Managing Director

£149.3m

The value of the
investment portfolio

11.6%

Compound annual
growth in Net Asset
Value since 1990

11.7%

Total shareholder
return for the year

B.P. Marsh • 2022 Annual Report • Joint Statement by the Chairman and Managing Director

We are pleased to present the audited
Consolidated Financial Statements of
B.P. Marsh & Partners Plc for the year
ended 31 January 2022.

Results

For the year under review, the Group
has achieved an increase in Net Asset
Value (“NAV”) (net of dividend) of 11.1%
from £149.9m to £166.6m and an increase
in the equity value of our portfolio of
£18.3m (14.0%) from £131.0m to £149.3m.

This equates to an undiluted NAV per
share of 462.7p (2021: 416.4p) or 455.6p
on a fully diluted basis following the
vesting of the shares in the Group’s Joint
Share Ownership Plan (2021: 416.4p).

The Group’s cash balance as at
31 January 2022 stood at £8.6m, up
from £0.7m the previous year, and as at
the date of this announcement, has
increased by a further £8.9m to stand
at £17.5m.

The Portfolio

The year under review demonstrates our
successful strategy, having realised three
investments, each one either at or in
excess of the most recently published
valuation at 31 July 2021, and £4.1m or
75% greater than at 31 January 2021.
The Group also agreed a fourth disposal
that completed shortly after the Year End.

In a year that was still dominated by the
Covid-19 Pandemic, we saw some great
successes in the portfolio.

XPT Group LLC (“XPT”), based in New York,
USA, has gone from strength to strength
achieving Gross Written Premiums of c.
US$400.0m in its year to 31 December
2021 (2020: US$280.0m). Additionally,
on 1 June 2022, the Group agreed to
invest a further $3.5m (c.£2.8m) in XPT
through a mixture of redeemable shares
and equity.

In the UK, Nexus Underwriting Management
Limited (“Nexus”), successfully negotiated
a £70.0m banking facility with Barings LLC
(“Barings”) and subsequently repaid the
Company’s £4.0m loan. The Company
then reinvested this £4m by acquiring
a further 100,000 shares in Nexus from a
founding non-executive shareholder,
which resulted in the Group’s stake
increasing to 19.18%, or 19.05% on a fully
diluted basis.

Post-Year End, Nexus rebranded as
Kentro Capital Limited (“Kentro”) to
better reflect its position in the market
following an internal restructure. It
continues to pursue its impressive
growth trajectory in the UK and globally.

In a similar vein, Paladin Holdings
Limited (“Paladin”), the holding
company of CBC UK Limited (“CBC”),
the Lloyd’s insurance broker, secured a
£3.0m loan facility with Coutts &
Company following an introduction by
the Group, and utilised part of this to
repay £2.0m of the Company’s £5.1m

debt facility, whilst also investing in
building out its product offering through
the hiring of a number of teams.

As previously announced, ATC Insurance
Solutions PTY Limited (“ATC”), based in
Melbourne, Australia, successfully
acquired another of our portfolio
companies, MB Prestige Holdings PTY
Limited (“MB”) in August 2021. This
acquisition, coupled with ATC’s
consistent growth across the business,
means that it has become one of the
largest independently owned Managing
General Agencies in Australia.

More information on the portfolio is
included under the Chief Investment
Officer’s Report.

We are proud of the results we have
achieved in a year which faced
challenging circumstances. This has
been possible due to the assistance we
have been able to offer our portfolio,
and this reaffirms the success of our
business model and track record.

Business environment

The business environment of the Group
continues to be influenced by global
issues that dominate all areas of life.
The Group does not operate in isolation
and is conscious of the impact issues
like the conflict in Ukraine and the
increasingly difficult environment posed

B.P. Marsh • 2022 Annual Report • Joint Statement by the Chairman and Managing Director

by increasing inflation rates can have on
its business. The Group has considered
its exposure to the Global Sanctions
placed on Russia and has agreed that
its business remains largely unaffected.

As the world continues to open up after
two years of restrictions due to Covid-19,
the Group is taking advantage of being
able to safely meet its partners in foreign
jurisdictions. The Group has also enjoyed
a return to face to face business
operations, both internally and externally.
Due to the ‘people-focussed’ dimension
of our business this is something that
the Group missed in 2020 and 2021,
however we will be retaining elements of
remote operations that continue to work
well with our business practices. Our
colleagues have returned to the office
environment seamlessly and we thank
them all for their hard work during the
previous two years.

It is the Board’s aspiration to maintain a
dividend of at least 2.78p per share for
the years ending 31 January 2023 and
31 January 2024, subject to ongoing
review and approval by the Board and
the Company’s shareholders. In the event
that the Group successfully realises
further investments in the portfolio the
level of dividend will be revisited by
the Board.

Post Year End events

Post Year End, the Group completed a
new investment, in Denison and Partners
Ltd (“Denison and Partners”), a start-up
London-based Lloyd’s insurance broker.
Denison and Partners was established
by Alasdair Ritchie and has a focus on
delivering (re)insurance delegated
authority solutions and services to
Managing General Agencies,
Coverholders and (re)insurers.

Dividend

As announced previously on 8 February
2022, the Board has recommended a
dividend of 2.78p per share (£1.0m) for
the financial year ended 31 January
2022 to be paid on 29 July 2022 to
shareholders on the register as at the
close of business on 1 July 2022 (the
record date) and the corresponding
ex-dividend date will be 30 June 2022,
subject to Shareholder Approval at the
Company’s Annual General Meeting.

This represents an increase of 13.9%
over the dividend of 2.44p per share
(£0.9m) paid in July 2021 in respect of
the prior year.

Furthermore, the sale of Summa
Insurance Brokerage S.L. (“Summa”),
in Spain, completed on 1 March 2022
and resulted in the Group receiving an
aggregate £9.6m for its equity and loans.

Environmental, Social and
Governance (“ESG”)

The Group is committed to furthering
the principles and sustainability goals
characterised by what is collectively
termed ESG. Whilst these values have
always been held in the corporate
consciousness, shortly before the Year
End the Board established an ESG
Committee to formalise its strategy in

this ever more important area. The ESG
Committee is chaired by Dan Topping,
and has been tasked with developing the
ESG strategy, its subsequent monitoring
and implementation, and to ensure that
the Group continues to maintain high
standards. The Group will formally
report on the ESG Committee’s activities
in each of its subsequent Reports.

Outlook

The strong cash position of the Group
means it is well placed to take advantage
of compelling new investment proposals
as well as opportunities presenting
themselves from the portfolio itself.
We have developed an interesting
pipeline of new investments and have
already completed one investment post
Year End, in Denison and Partners.
As results have consistently borne out
over a number of years, our successful
investment strategy has consistently
identified high quality investment
opportunities to add to our portfolio. We
expect to be able to make more successful
investments in the remainder of the
current year, both within the portfolio
and via new business opportunities.

The Chief Investment Officer’s report will
include more information on our pipeline
and areas of interest.

Brian Marsh, OBE
Chairman
10 June 2022

Alice Foulk
Managing Director
10 June 2022

Chief Investment Officer’s
Portfolio Update

Daniel Topping, Chief Investment Officer

The Group has performed well for the financial
year to 31 January 2022, in respect of both the
underlying performance of the portfolio and
a number of successful disposals, which has
significantly increased the Group’s liquidity.

Over the financial year, the valuation of the
Group’s equity portfolio has increased by
14.7% adjusting for realisations, with NAV
increasing by 11.1%. Over the last six months,
the equity portfolio has increased by 10.2%,
with NAV increasing by 7.5%.

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

Chief Investment Officer’s
Portfolio Update
continued

During the second half of the financial
year to 31 January 2022, we realised our
holdings in Walsingham Motor Insurance
Limited (“Walsingham”) in the UK (net
proceeds received: £5.2m including loan),
MB in Australia (net proceeds received:
£3.6m) and Mark Edward Partners LLC
in the USA (net proceeds received: £1.1m).
In addition we agreed to sell our holding
in Summa in Spain which completed
after the Year End (proceeds received:
£9.6m including loan).

This has resulted in the Group’s current
cash balance of £17.5m.

The Group has a healthy pipeline of
new business opportunities with a
renewed focus on new business
following the major shock of Covid-19.
Our prudent approach over the past
two years and focus on the existing
portfolio now means that the Group has
the ability to focus on seeking out new
investment opportunities, something
made easier by the removal of many
travel restrictions and the return to more
regular business practices globally.
One such investment we have recently
completed was the start up Lloyd’s
insurance broker, Denison and Partners.

Disposals

Summa Insurance
Brokerage, S.L.
(Post Year End)

Sale date: Agreed – January 2022,
Completed – March 2022

Net equity proceeds received: €9.7m
(£8.1m)

In March 2022, the Group sold its 77.25%
holding in Summa to Acrisure España S.L.,
part of Acrisure LLC, the global financial
services business.

The Group received cash proceeds of
£9.6m in relation to the disposal,
comprising of:
• £8.1m net of transaction costs, for its

77.25% shareholding in Summa
(valued at £8.0m at 31 July 2021 and
at £7.4m at 31 January 2021); and
• £1.5m being the Group’s outstanding

loan to Summa.

Walsingham Motor
Insurance Limited

Sale date: December 2021

Net equity proceeds received: £4.9m

In December 2021, the Group sold its
40.5% stake in Walsingham to Humn.ai
Limited (“Humn”), a London-based
insurance provider producing real-time
data-driven fleet insurance, for cash
consideration of c.£4.7m.

The Group also received repayment of
its c.£0.3m loan to Walsingham Holdings
Limited (“Walsingham Holdings”) and
also received a further £0.2m in cash
from its 20% shareholding in Walsingham
Holdings post Year End, which results in
total equity proceeds on disposal of £4.9m.

The Group is well known to the sectors
in which we invest and we continue to
focus on niche opportunities backed by
experienced and capable management
teams. We are currently in detailed
discussions with a number of new
investment opportunities which, whilst
there are no guarantees that these
discussions will convert into investments,
should enable the Group to secure a
number of new high growth investments
in the coming months.

Overall, the Directors are positive about
the prospects for the Company
throughout its current financial year to
31 January 2023.

The sale of the Group’s shareholding in
Walsingham to Humn produced a 23%
uplift over the last published valuation in
July 2021 and represented an 8x money
multiple and an Internal Rate of Return
of 22% (inclusive of all income and fees).

This transaction is a good example of
the Group’s strategy of investing for the
long term in start-up and early stage
businesses with ambitious management
teams, assisting in the growth of a
business, before disposing of its stake at
a beneficial time for all parties involved.

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

MB Prestige Holdings
PTY Limited

Sale date: August 2021

Proceeds received: AUS$6.8m (£3.6m)
in Shares in ATC Insurance Solutions
PTY Limited

In August 2021, the Group sold its 40%
equity stake in MB for AU$6.8m (£3.6m)
to ATC, in which the Group is also
a shareholder.

The Group received newly issued shares
in ATC in consideration for its stake,
increasing its overall shareholding in ATC
to 25.5% from 20%.

New Investments

Denison and Partners Ltd
(Post Year End)

In March 2022, the Group acquired a
40% Cumulative Preferred Ordinary
shareholding in Denison and Partners,
providing aggregate funding of £0.8m,
part of which was provided via a
loan facility.

The acquisition by ATC valued 100% of
MB at AU$17.0m (£9.0m), representing a
c.20% uplift over the Group’s published
valuation of MB as at 31 January 2021.

Mark Edward Partners LLC
(“MEP”)

Sale date: November 2021

Proceeds received: $1.5m (£1.1m)

This realisation represented an Internal
Rate of Return of 29% since the Group’s
original investment in MB in 2013 (inclusive
of all income and fees) and a money
multiple of equity invested of almost 9x.

This transaction demonstrates the
Group’s bespoke and flexible approach
to investing and realising investments
within the financial services sector, in
terms of both size and structure.

In November 2021, the Group exited in
full from its position in MEP, for a cash
consideration of $1.5m (£1.1m).

The Board of B.P. Marsh was not aligned
with the strategic direction of the
business and therefore negotiated with
Management an exit for $1.5m (£1.1m)
for its aggregate position in MEP. Such
a transaction removed uncertainty with
MEP’s ongoing valuation for B.P. Marsh
and allowed the Management team of
MEP to pursue their own strategy going
forward. The Group had previously
written off the value of this investment.

Established by Alasdair Ritchie, Denison
and Partners is a start-up London-based
Lloyd’s insurance broker.

and services to Managing General
Agencies, Coverholders and (re)insurers.

Denison and Partners will leverage its
historic strong foundations and
relationships in the Financial and
Professional lines sector, primarily across
the UK, US and Canada, to deliver (re)
insurance delegated authority solutions

Alasdair Ritchie has over 40 years of
experience in the (re)insurance market
having held a number of senior roles at
Willis Group, now known as Willis Towers
Watson (WTW), Marsh McLennan and
most recently BMS Group, before
establishing Denison and Partners.

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

Chief Investment Officer’s
Portfolio Update
continued

Follow-on Investments and Funding

Kentro Capital Limited
Formerly Nexus Underwriting
Management Limited

+17.7 pence NAV per share uplift in Year

In February 2022, Nexus announced
that it will rebrand as Kentro. Nexus
Underwriting Holdings Limited, the
specialty MGA, and Xenia Broking
Holdings Limited (“Xenia”), the leading
credit insurance and surety distribution
specialist, will operate as distinct,
independent brands under the Kentro
holding company.

In October 2021, the Group acquired
a further 100,000 shares in Kentro for
£4.0m from Ian Whistondale, a founding
non-management shareholder. This
was an opportunity to allow a founding
shareholder to partially realise the value
of their equity in Kentro, without the need
to exit in full, whilst enabling B.P. Marsh to
increase its shareholding in Kentro, to what
is now 19.05% on a fully diluted basis.

Also in October 2021, Kentro secured a
new £70.0m banking facility from Barings.
Kentro used £50.0m of this facility to
repay a £40.0m loan facility with HPS
Investment Partners LLC and also a £4.0m
loan from the Group. The remaining
funds were made available to meet
upcoming deferred consideration
payments and for new acquisitions.

The Group first invested in Kentro in 2014,
when the value of the business’s Gross
Written Premium was c. £55.0m. Kentro
has since gown consistently and is now
on track to further increase Gross Written
Premium to approximately £450.0m in
2022. Over the period in which the Group
has been invested in Kentro, it has
completed 15 acquisitions and now
operates in nine countries having built a
successful and distinct brand as a leading
independent insurance intermediary.

Date of initial investment: August 2014

31 January 2022 valuation: £51,460,000

Equity stake as at 31 January 2022: 19.05%
(fully diluted)

XPT Group LLC

+15.7 pence NAV per share uplift in Year

Overall, the Group’s investment in XPT
continues on its strong growth trajectory.
XPT achieved GWP of c.$400.0m in its
financial year to 31 December 2021
and is on track to increase this number
beyond $500.0m in its financial year
to 31 December 2022, not taking into
account new acquisitions that it may
complete during this period.

During the course of the Group’s
financial year, XPT continued to make
acquisitions, growing its established
footprint in the West and East coasts, as
well as growing its position in the Midwest
with a diversified book of business.

The most recent acquisition undertaken by
XPT was its ninth, being S&H Underwriters,
Inc. (“S&H”), an MGA and surplus lines
broker based in Barre, Vermont. S&H
works with retail clients in Personal and
Commercial Excess, Surplus and Speciality
lines throughout New England and the
Mid-Atlantic States.

This acquisition is a continuation of XPT’s
strategy of acquiring specialist wholesale
brokers that place hard to insure risks
through wholesale distribution channels.

Additionally, over the last 18 months, XPT
has launched six new programs across
various specialty sectors, providing
insurance products in Agriculture, Bars
& Taverns, Construction, Transportation
and Management Liability. XPT have a
strong pipeline of new insurance programs
that are currently in development which
will continue to see XPT grow exponentially.

On 1 June 2022 the Group agreed to
invest a further $3.5m (£2.8m) in XPT.
$2.8m is in redeemable shares and $0.7m
in equity, increasing our shareholding
in XPT from 28.18% to 29.15%, subject
to approval from XPT’s senior lender,
Madison Capital. XPT will utilise the
investment to repay $1.5m of loan funding
from Madison Capital, and for upcoming
deferred consideration payments.

Date of initial investment: June 2017

31 January 2022 valuation: £18,597,000

Equity stake as at 31 January 2022: 28.18%

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

Portfolio Update & Activity

NAV breakdown by portfolio company

The composition of B. P. Marsh’s
underlying portfolio companies is
shown in the chart on the right.

The Group’s current investments are in
the Insurance Intermediary sector, with
the exception of the independent
financial adviser LEBC.

Our current insurance investments are
budgeting to produce in aggregate over
£1.46bn of insurance premium during
2022, and a breakdown between brokers
and MGAs is shown on the right.

Cash and other assets
10%

XPT
11%

Ag Guard
2%

ARB
<1%

Summa
5%

Sterling
2%

SSRU
5%

Sage
1%

ATC
8%

CBC
6%

EC3
<1%

Fiducia
3%

LPR
2%

LEBC
15%

Nexus
31%

MGA
£761,000,000

52%

Total Insurance Premium
£1.46bn

48%

Broker
£703,000,000

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

Insurance Brokers

Date of
Investment

Jurisdiction

Equity % at
31 January 2022

Valuation
31 January 2022

Summa Insurance Brokerage, S. L

January 2005

Spain

CBC UK Limited

Lilley Plummer Risks Limited

February 2017

October 2019

Asia Reinsurance Brokers Pte Limited

April 2016

Singapore

EC3 Brokers Limited

Total

December 2017 UK

77.25%

47.06%

30.00%

25.00%

35.00%

8,104,000

9,404,000

2,629,000

461,000

440,000

Cost of
Investment

£6,096,143

£803,500

£1,008,242

£1,551,084

£6,500,000

% of Group Net
Asset Value
31 January 2022

4.9%

5.6%

1.6%

0.3%

12.7%

–

21,038,000

£15,958,969

The Group’s Broking investments are budgeting to place over £703.0m of GWP, producing over £59.0m of commission income in
2022, accessing specialty markets around the world.

Underwriting Agencies/Managing General Agents (“MGAs”)

Date of
Investment

Jurisdiction

Equity % at
31 January 2022

Valuation at
31 January 2022

Nexus Underwriting Management Limited

August 2014

XPT Group LLC

ATC Insurance Solutions PTY Limited

June 2017

July 2018

USA

Australia

Stewart Specialty Risk Underwriting Limited

January 2017

Canada

The Fiducia MGA Company Limited

November 2016 UK

Ag Guard PTY Limited

Sterling Insurance PTY Limited

July 2019

June 2013

Australia

Sage Program Underwriters, Inc

June 2020

USA

19.34%

28.18%

25.56%

30.00%

35.18%

41.00%

19.70%

30.00%

51,460,000

18,597,000

12,940,000

8,145,000

4,228,000

3,562,000

2,829,000

1,550,000

Cost of
Investment

15,126,554

7,330,052

6,476,595

227,909

1,465,071

1,945,411

202,758

% of Group Net
Asset Value
31 January 2022

30.9%

11.2%

7.8%

4.9%

2.5%

2.1%

1.7%

0.9%

Total

–

103,311,000

32,774,369

62.0%

The Group’s MGAs are budgeting to place over £761.0m of GWP, producing over £74.0m of commission income in 2022, across
over many specialist product areas, on behalf of more than 50 insurers.

IFA Investment

LEBC Holdings Limited

April 2007

59.34%

25,000,000

Date of
investment

Jurisdiction

Equity % at
31 January 2022

Valuation at
31 January 2022

Cost of
Investment

12,373,657

% of
Net Asset Value
31 January 2022

15.0%

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

LEBC Holdings Limited
(“LEBC”)

+0 pence NAV per share uplift in Period

B.P. Marsh has been a shareholder in
LEBC, the Independent Financial Advisory
company, since April 2007. (LEBC is
currently the Group’s only non-insurance
related investment.)

In May 2022, Tavistock Investments Plc
acquired 21% of LEBC from the McVitie
Estate, following receipt of approval

from the Financial Conduct Authority.
The consideration paid by Tavistock was
£10.0m, implying a 100% equity valuation
for LEBC of £44.5m, underpinning the
Company’s own valuation of LEBC at
31 January 2022 of £25.0m for its
59% shareholding.

This transaction endorses B.P. Marsh’s
investment mantra of supporting our
partners to secure an exit when needed,
whilst also supporting our portfolio
companies’ underlying Management
Teams, enabling them to take a business

to the next stage in development.

For its year ended 30 September 2021,
LEBC produced an adjusted EBITDA of
£3.2m, which represented a considerable
year on year performance swing of over
£3m versus the prior year.

Throughout its current financial year to
30 September 2022 LEBC has built upon
the previous year’s performance, and
the Group expects further year on
year growth.

Portfolio Company Highlights
UK Investments

CBC UK Limited/Paladin
Holdings Limited

+1.8 pence NAV per share uplift in Year

CBC, the London based Retail and
Wholesale Lloyd’s insurance broker,
continues to perform well.

In their financial year to 31 December
2021, CBC produced an EBITDA of £2.2m,
which represented a 35% year on year
increase. This positive performance has
continued into CBC’s current financial
year to 31 December 2022 and further
growth is expected by the Group.

Within the Group’s financial year, CBC
secured £3.0m in financing facilities from
Coutts & Company. As previously reported,
this enabled CBC to repay £2.0m of debt
provided by B.P. Marsh. The additional
funds are being utilised for growth and
within the year CBC have hired a
number of new producers and teams.

This has included a Global Risk team, led
by Mark Winston, who have been together
for over 30 years. CBC also appointed
Chris Tully to head up their Art & Private
Clients division.

in excess of £20.0m over a 12 month period.
As Fiducia continues on this growth
trajectory, the Group are confident that
GWP will exceed £25.0m in Fiducia’s
current financial year to 31 December.

CBC continue to be in the market for
new teams and producers and have an
active pipeline of opportunities to bring
about future growth, alongside their
organic expectations.

Date of initial investment: February 2017

31 January 2022 valuation: £9,404,000

Cost of Equity: £803,000

Equity stake as at 31 January 2022: 47.06%

The Group are pleased with Fiducia’s
performance since our investment and
believe that the business will grow
substantially over the coming years.
As is customary with B. P. Marsh’s MGA
investments, Fiducia have in place robust
underwriting controls which focus on
the underlying profitability of their core
book. This is beginning to bear fruit with
Fiducia regularly being in receipt of
material profit commission payments.

The Fiducia MGA Company
Limited (“Fiducia”)

Date of initial investment: November 2016

31 January 2022 valuation: £4,228,000

+2.5 pence NAV per share uplift in Year

Cost of Equity: £278,000

The strong growth of Fiducia, the Group’s
UK Marine Cargo Underwriting Agency
based in Leeds, continues, with GWP now

Equity stake as at 31 January 2022: 35.2%

B.P. Marsh • 2022 Annual Report • Chief Investment Officer’s Portfolio Update

Chief Investment Officer’s
Portfolio Update
continued

As with the effects of Covid-19, the
performance of the Group, its portfolio
and the insurance industry itself will be
affected by the conflict in Ukraine,
increasing inflation and interest rates.
The portfolio had limited exposure to the
Russian market itself, however, some
areas in which our portfolio operate
have been affected given the sanctions
imposed on Russia and the impact on
foreign exchange markets.

Throughout the first quarter of 2022,
a number of insurance companies have
started to make provisions for losses related
to the conflict in Ukraine, notwithstanding
the continuing uncertainty regarding the
overall size of such losses. This will
continue throughout 2022 as the market’s
exposure becomes clearer. Projected
insurance and reinsurance losses
related to the conflict in Ukraine are
expected to be significant, which may
affect the profitability of the Lloyd’s and
London markets over the coming years.

Daniel Topping
Chief Investment Officer
10 June 2022

North American
Investments

Stewart Specialty Risk
Underwriting Ltd (“SSRU”)

+6.7 pence NAV per share uplift in Year

The Group invested in SSRU in 2017. Since
then, SSRU, the Toronto-based independent
underwriting agency and coverholder at
Lloyd’s, has grown significantly.

In its last financial year to 30 December
2021, SSRU hit the milestone of CAD$50.0m
of GWP, and outperformed its revenue
and EBITDA budget.

This strong performance has continued
into 2022, and the Group are confident
that SSRU will achieve over CA$70.0m of
GWP in their current financial year.

Date of initial investment: January 2017

31 January 2022 valuation: £8,145,000

Cost of Equity: £19

Equity stake as at 31 January 2022:
30.00%

Australian Investments

Agri Services Company
PTY Limited/Ag Guard PTY
Limited (“Ag Guard”)

+5.6 pence NAV per share uplift
in Period

Ag Guard continues to perform well,
producing significant year on year growth.

During the Year, Ag Guard entered into
a new strategic partnership with Elders
Insurance (Underwriting Agency) PTY

Limited , owned by QBE Insurance Group
Limited which has been transformational
for Ag Guard with GWP expected to be
above AU$40.0m in their year to 30 June
2022. This is in comparison to performance
in Ag Guard’s year to 30 June 2021 where
it wrote GWP of AU$7.0m.

Date of initial investment: July 2019

31 January 2022 valuation: £3,562,000

Cost of Equity: £1,465,000

Equity stake as at 31 January 2022: 41.00%

B.P. Marsh’s other investments in Australia
(ATC and Sterling Insurance PTY Limited)
continue to perform well with premium
income and profitability increasing year
on year across both entities.

Market Commentary

Discussions regarding rates across the
insurance industry continue. Market
consensus was that the size of rate
increases would start to decline in Q4 2021
and into 2022, following several years of
significant rate increases, although this
is yet to come into fruition. Whilst most
business plans projected low/mid single
digit rate increases, in reality rates are
increasing at a higher rate than this,
especially in the specialty markets and
generally at a higher level than inflation.

The effects of Covid-19 on our business
and the underlying portfolio have been
discussed and we remain of the view
that the Group is well positioned to take
advantage of opportunities emanating
from the world ‘returning to normal’.

Financial
Review

Jonathan Newman, Group Finance Director

The Group had a strong year, delivering an
increase in the NAV of £16.7m (2021: £13.0m).
At 31 January 2022 the NAV of the Group was
£166.6m which equates to 462.7p per share
undiluted (2021: £149.9m, or 416.4p per share).
On a diluted basis this equates to 455.6p per
share (2021: 416.4p per share). This equates
to an increase in NAV of 11.1% (2021: 9.5%) for
the year undiluted.

B.P. Marsh • 2022 Annual Report • Financial Review

Financial Review
continued

Financial Performance Summary

The table below summarises the Group’s financial results and key performance indicators for the year to 31 January 2022.

Year to/as at 31 January 2022 Year to/as at 31 January 2021

Net asset value

Net asset value per share – undiluted

Net asset value per share – diluted

Profit on ordinary activities before tax

Dividend per share paid

Total shareholder return (including dividends)

Total shareholder return on opening shareholders’ funds

Net cash from operating activities (net of equity investments, realisations and loans)

Equity cash investment for the year

Realisations (net of disposal costs)

Loans issued in the year

Loans repaid by investee companies in the year

Cash funds at end of year

Borrowing/Gearing

£166.6m

462.7p

455.6p

£19.4m

2.44p

£17.6m

11.7%

£1.5m

£8.0m

£8.8m

£0.3m

£8.1m

£8.6m

£Nil

£149.9m

416.4p

£13.7m

2.22p

£13.8m

10.1%

£0.6m

£2.4m

–

£1.1m

£2.9m

£0.7m

£1.0m

B.P. Marsh • 2022 Annual Report • Financial Review

The NAV of £166.6m at 31 January 2022
represents a total increase in NAV of
£137.4m since the Group was originally
formed in 1990 having adjusted for the
original capital investment of £2.5m, the
£10.1m net proceeds raised on AIM in
2006 and the £16.6m of net proceeds
raised through the Share Placing and
Open Offer in July 2018. The Directors
note that the Group has delivered an
annual compound growth rate of 8.4%
in Group NAV after running costs,
realisations, losses, distributions and
corporation tax since flotation and 11.6%
since 1990.

Covid-19 and Ukraine
conflict impact assessment

The financial statements to 31 January
2022 include the impact of Covid-19.
Overall performance within the investment
portfolio increased throughout the
financial year as Covid-19 restrictions
were reduced or withdrawn.

by the international community were a
direct response to that situation. As such
it has been determined that this is to be
treated as a non-adjusting post-balance
sheet event.

Whilst there has been price inflation which
has led to interest rate increases, and
volatility within foreign exchange currency
rates, certain investments within the
Group’s portfolio have seen premium
rate increases and thus increased
commission. Notwithstanding this, at
the current time the Group does not
consider the conflict in Ukraine to have
had a material impact upon the Group.

Investment performance

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

31 January 2021
valuation

£131.0m

Acquisitions
at cost

£8.0m

Disposal
proceeds

£(8.8)m

Adjusted 31 January 2021
valuation

£130.2m

31 January 2022
valuation

£149.3m

This equates to an increase in the portfolio
valuation of 14.7% (2021: 10.9%).

working capital for strategic hires and
product development.

and £1.1m from MEP, with the remainder
from four other investee companies.

The Group invested a total of £8.0m in
equity in the portfolio during the year
(2021: £2.4m). £4.0m was invested to
acquire further shares in Kentro and
£0.4m as part of deferred consideration
to acquire shares in Paladin. £3.6m of
the equity investment in the year related
to the Group’s sale of MB, which was
used to acquire new shares in ATC and
was a non-cash investment.

In addition, the Group provided £0.3m of
loans (2021: £1.1m) as follow-on funding
to two investee companies to provide

There were £8.8m of investment
realisations during the year (2021: £Nil).
£4.9m was realised from the disposal of
the Group’s holdings in Walsingham
and Walsingham Holdings (together the
“Walsingham Group”), £3.6m from the
sale of MB and £0.3m from the sale of
shares in Paladin.

£8.1m of loan repayments were made to
the Group by investee companies (2021:
£2.9m) of which £4.0m was received from
Kentro which was subsequently invested
in further equity, £2.0m from Paladin

B.P. Marsh • 2022 Annual Report • Financial Review

Financial Review
continued

Operating income

Net gains from investments were £20.2m
(2021: £12.9m), a 56.9% increase over
the previous year. This included £2.9m in
realised gains from the sale of the Group’s
interests in the Walsingham Group and
£1.1m received in cash from a loan that
was previously provided against in full.
£16.2m related to the revaluation of the
investment portfolio at 31 January 2022
(2021: £12.9m).

Overall, income from investments
decreased by £0.4m, or 9.5% to £4.1m
(2021: £4.5m). The reduction was primarily
due to receiving lower interest income
on loans made to the portfolio, which
decreased by 14.1% to £1.1m (2021: £1.3m)
which was due to a net £7.8m of loans
being repaid. Whilst this led to reduced
income, it significantly enhanced the
Group’s liquidity.

Operating expenses

Operating expenses increased by £1.2m,
or 32.7% during the year to £4.8m
(2021: £3.6m). This included £0.8m of
one-off expenses compared to the prior
year. Excluding these, expenses rose
by 11.1% as lockdown restrictions eased
and the Group commenced a return to
normal operations.

Profit on ordinary activities

The consolidated profit on ordinary
activities after taxation increased by
27.4% to £17.5m (2021: profit of £13.7m).

The Group’s strategy is to cover expenses
from the portfolio yield. On an underlying
basis, including treasury returns and

realised gains in cash, but excluding
unrealised investment activity (unrealised
gains on equity and provision against
loans receivable from investee companies),
this was achieved with a pre-tax profit of
£3.2m for the year (2021: £0.9m).

Liquidity

Cash funds at 31 January 2022 were
£8.6m (2021: £0.7m) and the Group was
debt free (2021: £1.0m of loans borrowed).
A net £7.8m of loans to the investment
portfolio were repaid during the year
(2021: £1.8m net repaid). These funds
enabled the Group to repay the £1.0m
loan, part of a £3.0m loan facility with
Brian Marsh Enterprises Ltd, a company
in which the Chairman, Mr. Brian Marsh,
is a director and sole shareholder, and
be debt free by the Year End. This loan
facility ended on 29 January 2022.

Of note, since the year-end the sale of
Summa completed whereby the Group
received equity proceeds of £8.1m and
the outstanding loan to Summa of £1.5m
repaid, and the Group completed a new
investment in Denison and Partners.
Currently the Group has cash funds
of £17.5m, or £14.7m net of the £2.8m
follow-on investment into XPT that was
agreed on 1 June 2022.

Dividend

The Group paid a dividend of £0.9m
(or 2.44p per share) during the year, an
increase of 10% over the preceding year
(2021: £0.8m or 2.22p per share). The
dividend payment reflected the Group’s
requirement to strike a balance between
the need to conserve cash to ensure that
it could continue to prosper and develop

during the Covid- 19 pandemic and
beyond, whilst also rewarding
Shareholders for their continuing
loyalty, and the dividend represented
a distribution of 100% of the underlying
realised profits of the Group for the
year to 31 January 2021. The Group has
proposed a dividend of £1.0m (or 2.78p
per share), and aspires to maintain the
same level of distribution for the next two
years, which in aggregate represents
almost 100% of the underlying realised
profits for the year to 31 January 2022.

Total shareholder return for the year was
therefore 11.7% (2021: 10.1%) including the
dividend payment and the NAV increase.

Diluted NAV per share

The NAV per share at 31 January 2022 is
462.7p (2021: 416.4p). A long-term share
incentive plan for certain directors and
employees of the Group matured on
12 June 2021, and 1,461,302 shares are
held within an Employee Benefit Trust.
Whilst they remain within the Trust they
do not have voting or dividend rights.
However, if the shares are sold in the
future in excess of 281 pence per share
(noting that the participants only benefit
from a sale in excess of 312.6p per share),
the Group would be entitled to receive
£4,106,259 and these shares would then
become entitled to voting and dividend
rights and therefore these shares would
become dilutive. Overall, this would
therefore dilute the NAV per share as at
31 January 2022 to 455.6p.

Jonathan Newman
Group Finance Director
10 June 2022

B.P. Marsh • 2022 Annual Report • Current investments

Current
investments

LEBC Holdings Limited
(www.lebc-group.com)
LEBC is an Independent Financial Advisory company
providing services to individuals, corporates and
partnerships, principally in employee benefits,
investment and life product areas.

Date of investment:
Equity stake:
31 January 2022 valuation:

April 2007
59.3%
£25,000,000

CBC UK Limited
(www.cbcinsurance.co.uk)
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 holds its investment
in CBC through CBC’s parent company, Paladin
Holdings Limited.

Date of investment:
Equity stake:
31 January 2022 valuation: £9,404,000

February 2017
47.1%

EC3 Brokers Limited
(www.ec3brokers.com)
EC3 is an independent specialist Lloyd’s broker and
reinsurance broker, that provides services to a wide
array of clients across a number of sectors, including
construction, casualty and cyber & technology.
The Group holds its investment through EC3’s
Parent Company, EC3 Brokers Group Limited.

Date of investment:
Equity Stake:
31 January 2022 valuation: £440,000

December 2017
35%

Lilley Plummer Risks Limited
(www.lprisks.co.uk)
Lilley Plummer Risks is a specialist marine Lloyd’s broker
that provides products across the marine insurance market.
The Group holds its investment in Lilley Plummer Risks
through its holding company Lilly Plummer Holdings Limited.

Date of investment:
Equity stake:
31 January 2022 valuation: £2,629,000

October 2019
30%

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

B.P. Marsh • 2022 Annual Report • United Kingdom

United
Kingdom

The Fiducia MGA Company Limited
(www.fiduciamga.co.uk)
Fiducia is a UK marine cargo Underwriting Agency and
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:
Equity stake:
31 January 2022 valuation: £4,228,000

November 2016
35.2%

Nexus Underwriting Management Limited
(www.nexusunderwriting.com)
Nexus is an independent Managing General Agency and
Broker specialising 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.
In February 2022, after the Year in question ended, Nexus
rebranded as Kentro Capital Limited.

Date of investment:
Equity stake:
31 January 2022 valuation: £51,460,000

August 2014
19.3%

B.P. Marsh • 2022 Annual Report • Current investments

Current
investments

Summa Insurance Brokerage, S. L.
(www.grupo-summa.com)
Summa is a consolidator of regional
insurance brokers in Spain.

Date of investment:
Equity stake:
31 January 2022 valuation: £8,104,000

January 2005
77.3%

Stewart Specialty Risk Underwriting Ltd
(www.ssru.ca)v
SSRU is a Managing General Agency, providing
insurance solutions to a wide array of clients in
the construction, manufacturing, onshore energy,
public entity and transportation sectors based in
Toronto, Canada.

Date of investment:
Equity stake:
31 January 2022 valuation: £8,145,000

January 2017
30%

Sage Program Underwriters, Inc.
(www.sageuw.com)
Sage provides specialist insurance products to
niche industries, initially in the inland delivery
and field sport sectors based in Bend, Oregon.

Date of Investment:
Equity Stake:
31 January 2022 valuation: £1,550,000

June 2020
30%

XPT Group LLC
(www.xptspecialty.com)
XPT is a wholesale insurance broking and Underwriting
Agency platform across the U.S. Specialty Insurance
Sector operating from many locations in the United
States of America.

Date of investment:
Equity stake:
31 January 2022 valuation: £18,597,000

June 2017
28.2%

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

B.P. Marsh • 2022 Annual Report • Rest of the world

Rest of
the world

Asia Reinsurance Brokers (Pte) Limited
(www.arbrokers.asia)
ARB is an independent specialist reinsurance and
insurance risk solutions provider headquartered
in Singapore.

Date of investment:
Equity stake:
31 January 2022 valuation: £461,000

April 2016
25%

Sterling Insurance PTY Limited
(www.sterlinginsurance.com.au)
Sterling is a specialist Underwriting Agency offering
a range of insurance solutions within the Liability
sector, specialising in niche markets including
mining, construction and demolition based in
Sydney Australia. The Group holds its investment
in Sterling via a joint venture with Besso Insurance
Group Limited, Neutral Bay Investments Limited.

Date of investment:
Equity stake:
31 January 2022 valuation: £2,829,000

June 2013
19.7%

Ag Guard PTY Limited
(www.agguard.com.au)
Ag Guard is a Managing General Agency, which
provides insurance to the agricultural sector, based
in Sydney, Australia. The Group holds its investment
through Ag Guard’s Parent Company, Agri Services
Company PTY Limited.

Date of investment:
Equity stake:
31 January 2022 valuation: £3,562,000

July 2019
41%

Criterion Underwriting (Pte) Limited
Criterion was established to provide specialist
insurance products to a variety of clients in the
cyber, financial lines and marine sectors in Far East
Asia, based in Singapore.

Date of investment:
Equity stake:
31 January 2022 valuation: £0

July 2018
29.4%

ATC Insurance Solutions PTY Limited
(www.atcis.com.au)
ATC is a Managing General Agency and Lloyd’s Coverholder,
specialising in accident & health, construction & engineering,
trade pack, motor and sports insurance headquartered in
Melbourne, Australia.

Date of investment:
Equity stake:
31 January 2022 valuation: £12,940,000

July 2018
25.56%

B.P. Marsh • 2022 Annual Report • Directors and Company Secretary

Directors and
Company Secretary

Brian Marsh OBE
Executive Chairman

Alice Foulk BA (Hons)
Managing Director

Jonathan Newman ACMA,
CGMA, MCSI
Group Finance Director

Daniel Topping MCSI, FCG
Chief Investment Officer

Pankaj Lakhani FCCA
Non-executive

Nicholas Carter
Non-executive

Sinead O’Haire
LLB (Hons), FCG
Chief Legal Officer &
Group Company Secretary

B.P. Marsh • 2022 Annual Report • Directors’ Report & Strategic Report & Consolidated Financial Statements

Directors’ Report &
Strategic Report &
Consolidated Financial
Statements
for the year ended 31 January 2022

References throughout the Reports and Consolidated Financial Statements to the
“Company” or “B.P. Marsh” refer to the Parent Company, B.P. Marsh & Partners Plc,
and references to the “Group” refer to the consolidated group, being the Parent
Company and its subsidiary undertakings.

B.P. Marsh • 2022 Annual Report • Directors’ and Group Company Secretary biographies

Directors’ and
Group Company
Secretary biographies

Brian Marsh OBE
Executive Chairman, aged 81
(I) (V) (N)
Brian started his career in insurance
broking and underwriting in Lloyd’s and
the London and overseas market over
55 years ago and was, from 1979 to
1990, chairman of Nelson Hurst & Marsh
(Holdings) Ltd, before founding the
Group. Brian has over 30 years’
experience in building, buying and
selling financial services businesses
particularly in the insurance sector.
Brian’s considerable experience being
Chairman of numerous companies in
Financial Services means he is well
suited as the Executive Chairman of
B.P. Marsh. Brian is a member of the
Remuneration (appointed 2 February
2022), Investment, Valuation, and
Nomination Committees. Brian is a
significant shareholder in B.P. Marsh
with a direct beneficial interest in 37.9%
of the Company (in addition to 3.9%
held by the Marsh Christian Trust, of
which Brian is a trustee and Settlor).

Alice Foulk BA (Hons)
Managing Director, aged 35
(R) (I) (V) (N) (D)
Alice joined B.P. Marsh in September 2011
having started her career at a leading
Life Assurance company. In February
2015 Alice was appointed as a director
of B.P. Marsh and in January 2016 was
appointed Managing Director where she
is responsible for the overall performance
of the Company and monitoring the
Company’s overall progress towards
achieving its objectives and goals, as
set by the Board. Alice is a member of
the Investment, Valuation, Nomination
and Disclosure Committees and was a
member of the Remuneration Committee
until 20 January 2022. Alice has a direct
beneficial interest in 23,428 ordinary
shares in B.P. Marsh, together with a
beneficial interest (as joint owner) in
167,465 ordinary shares in B.P. Marsh
held as part of the Company’s Joint
Share Ownership Plan and 20,964
ordinary shares in B.P. Marsh which are
held in the Company’s SIP Trust.

Jonathan Newman ACMA, CGMA, MCSI
Group Finance Director, aged 47
(I) (V) (D)
Jonathan is a Chartered Management
Accountant with over 20 years’
experience in the financial services
industry. He joined the Group in
November 1999, having started his
career at Euler Trade Indemnity, and
was appointed a director of B.P. Marsh
in September 2001 and Group Finance
Director in December 2003. Jonathan
is responsible for the Group’s finance
function, provides strategic financial
advice to the Group’s portfolio, evaluates
new investment opportunities and is a
member of the Investment, Valuation
and Disclosure Committees. Jonathan
has four nominee directorships across
two investee companies. Jonathan has
a direct beneficial interest in 19,645
ordinary shares in B.P. Marsh, together
with a beneficial interest (as joint owner)
in 167,465 ordinary shares in B.P. Marsh
held as part of the Company’s Joint
Share Ownership Plan and 29,671
ordinary shares in B.P. Marsh which are
held in the Company’s SIP Trust.

B.P. Marsh • 2022 Annual Report • Directors’ and Group Company Secretary biographies

Sinead O’Haire, LLB (Hons), FCG
Chief Legal Officer & Group
Company Secretary, aged 37
(N) (D) (E)
Sinead joined B.P. Marsh in 2009 and
was appointed Group Company
Secretary in June 2011. Sinead attends
all Board and Committee meetings and
works closely with the Chairman’s
Office and Board in all matters of
governance and to oversee the effective
functioning and leadership of the
Company, as well as ensuring
compliance with the stock market
regulations. Sinead is responsible for
negotiating and finalising the legal
aspects of new investments, any
follow-on funding and eventually the
exit process. Sinead has a direct
beneficial interest in 24,695 ordinary
shares in B.P. Marsh, together with a
beneficial interest (as joint owner) in
167,465 ordinary shares in B.P. Marsh
held as part of the Company’s Joint
Share Ownership Plan and 29,671
ordinary shares in B.P. Marsh which are
held in the Company’s SIP Trust.

Daniel Topping MCSI, FCG
Chief Investment Officer, aged 38
(I) (V) (N) (D) (E)
Daniel was appointed as a director of
B.P. Marsh in March 2011 having joined
the Group in February 2007, following
two years at an independent London
accountancy practice. Daniel graduated
from the University of Durham in 2005
and is a member of the Securities and
Investment Institute and the Chartered
Governance Institute UK & Ireland. In
January 2016 Daniel was appointed as
Chief Investment Officer of the Group
and is a member of the Investment,
Valuation, Nomination and Disclosure
Committees and on 2 December 2021
was appointed a founding member of the
Environmental, Social and Governance
(“ESG”) Committee. Daniel is the Senior
Executive with overall responsibility for
the portfolio and investment strategy for
the Group, working alongside the Board
and Investment Directors to find, structure,
develop, support and monitor the portfolio.
Daniel currently has multiple nominee
appointments across the investment
portfolio. Daniel has a direct beneficial
interest in 112,551 ordinary shares in
B.P. Marsh, together with a beneficial
interest (as joint owner) in 167,465 ordinary
shares in B.P. Marsh held as part of the
Company’s Joint Share Ownership Plan
and 21,551 ordinary shares in B.P. Marsh
which are held in the Company’s SIP
Trust. Daniel has an indirect beneficial
interest in 11,434 ordinary shares held
by his wife, Claire Cronin.

Pankaj Lakhani FCCA
Non-executive Director, aged 68
(R) (A) (V) (N)
Pankaj is a certified accountant and
joined B.P. Marsh in May 2015 and has
over 30 years’ experience within the
global insurance sector, having worked at
Marsh McLennan Group, Nelson Hurst &
Marsh Group, Admiral Underwriting and
Victor O. Schinnerer. Pankaj is Chairman
of both the Remuneration and Audit
Committees and is also a member of the
Valuation and Nomination Committees.
Pankaj owns 36,912 ordinary shares in
B.P. Marsh.

Nicholas Carter
Non-executive Director, aged 79
(R) (A) (E)
Nicholas was appointed to the Board of
B.P. Marsh in May 2019 and has over 50
years’ experience in the Lloyd’s Insurance
Market, having held a variety of positions
within Nelson Hurst & Marsh Limited,
Citicorp Insurance Brokers and Nelson
Hurst Plc. Upon joining the Group
Nicholas was appointed a member of
the Remuneration and Audit Committees
and on 2 December 2021 was appointed
a founding member of the ESG Committee.
Nicholas owns 25,000 ordinary shares
in B.P. Marsh and also has an indirect
beneficial interest in 5,314 ordinary
shares held by his wife, Fiona Carter.

Key

(R)

(A)

Member of the Remuneration
Committee during the year

Member of the Audit Committee
during the year

(I)

(V)

Member of the Investment
Committee during the year

Member of the Valuation Committee
during the year

(N)

(D)

Member of the Nomination
Committee during the year

Member of the Disclosure
Committee during the year

(E)

Member of the Environmental,
Social and Governance (“ESG”)
Committee during the year

B.P. Marsh • 2022 Annual Report • Corporate Governance

Corporate Governance

The Board of B.P. Marsh (“the Board”) is
responsible for the Group’s corporate
governance policies and recognises the
importance of high standards of integrity,
and consistently seeks to apply the
principles set out in the ‘Corporate
Governance Code’ published by the
Quoted Company Alliance to the extent
that they are appropriate for, and
applicable to, a company of B.P. Marsh’s
size quoted on the Alternative Investment
Market (“AIM”). The Company has
identified three core stakeholders within its
business model; its Shareholders, Investee
Companies and Employees.

Strategy & Business Model

Since its inception in 1990, the Company
has focused on acquiring minority stakes in
Financial Service Intermediary Businesses
with no restrictions on their global location,
assisting where possible its Investee
Companies and selling that stake, in
partnership with management, to the
benefit of the Shareholders.

As time has gone by, whilst this model has
remained unchanged, the size of the
potential initial investment has risen to up
to £5m as the Company’s assets have
grown and its business has become better
known. In addition, the Company can
provide follow-on funding to further
enhance growth.

We have been able to maintain an average
compound annual increase in the Net Asset
Value since inception of 10% or more.

We have every reason to believe that the
Company’s business will continue to grow
in size, particularly as a result of the ability
to make larger initial investments into
larger businesses.

The Board consists of four executive and
two non-executive directors and has
ultimate oversight over the business of
B.P. Marsh & Partners Plc. The Board is
responsible for the making and eventual
disposal of investments and the continued
monitoring of their performance.

Corporate Structure

The Company operates via five main
departments reporting to the Board.

Chairman’s Office:
Comprised of the Executive Chairman and
Managing Director, the Chairman’s Office
has oversight of the day to day
management of the Company’s business.

Investment Department:
Headed up by the Chief Investment Officer,
the Investment Department is responsible
for overseeing the Company’s Investment
Portfolio. With appointments made to each
of the Investee Companies’ Boards, the
Investment Department monitors the
performance of the Investee Companies
and reports to the Chairman’s Office and
ultimately the Board.

Finance Department:
Led by the Group Finance Director, the
Finance Department is responsible for the
internal finance function of the Company,
monitoring the financial performance of
the Investee Companies and providing
strategic financial support and advice.

B.P. Marsh • 2022 Annual Report • Corporate Governance

Investor Relations Department:
The Investor Relations Department, led by
the Chairman and Managing Director, is a
collaborative effort of each department.
The Investor Relations Department is
responsible for communication between
the Company and the financial markets.
This communication enables the investment
community to make an informed judgement
about the fair value of the Company’s shares
and provides the Company with essential
feedback from investors and the market on
company performance and strategy.

Company Secretarial Department:
Led by the Chief Legal Officer & Group
Company Secretary, the Company
Secretarial Department ensures that the
Group remains compliant with its legal and
regulatory obligations. It also acts as the
point of contact for the legal departments of
the Investee Companies where assistance
is required.

Directors

Details of the appointment and resignation
dates of directors are shown in the Group
Report of the Directors. All directors
are subject to re-election within a three-
year period.

It is expected that all directors dedicate as
much time as is required during the year
to successfully discharge their duties. The
Group requires each director to prepare
adequately for the four scheduled Board
Meetings held each year as well as any
time required to provide informed approval
for any other matters that arise between
Board Meetings.

All the directors have access to the advice
and services of the Company Secretary
and may, in furtherance of their duties,

take independent legal and financial
advice at the Company’s expense. They
also have access to the minutes of the
Board, in which any concerns expressed by
them regarding matters pertaining to the
Group are recorded.

A review of the performance and
effectiveness of each director, including the
non-executive directors, and the Committees
of the Board, takes place annually and is
assessed on an on-going basis by the other
members of the Board.

The Company believes that its two non-
executive directors are independent,
however it has identified the following factors
that could give rise to an argument against
the classification as independent, namely
that Pankaj Lakhani and Nicholas Carter
are shareholders in the Company and that
they both have a previous employment
history with Executive Chairman Brian Marsh.
However, the Group notes that a decision as
to the independence of its non-executive
directors rests with the Board itself, and
upon further review it remains comfortable
that both of its non-executive directors are
independent as they consistently provide
independent input and none of the
aforementioned factors compromise their
independence in practice.

Board Meetings

The Board meets at least quarterly and at
such other times as required and receives
regular reports on a wide range of key
issues including investment performance,
financial performance, investment
opportunities, disposals and corporate
strategy. All major decisions affecting the
Group are taken at Board level and all the
directors are free to bring any matter to the
attention of the Board at any time.

B.P. Marsh • 2022 Annual Report • Corporate Governance

Corporate Governance
continued

Committees of the Board

The Board has established seven standing
committees – the Remuneration Committee,
the Audit Committee, the Investment
Committee, the Valuation Committee, the
Nomination Committee, the Disclosure
Committee and the Environmental, Social
and Governance (“ESG”) Committee
(established 2 December 2021).

Remuneration Committee
The Remuneration Committee is comprised
of its Chair, Pankaj Lakhani, and members
Nicholas Carter, Alice Foulk (resigned
20 January 2022) and Brian Marsh
(appointed 2 February 2022). In accordance
with its terms of reference, the Committee
determines the level and make-up of
remuneration (including bonuses and
awards) of the executive directors and
members of staff.

The Report of the Remuneration Committee
to the shareholders on how directors are
remunerated, together with details of
individual directors’ remuneration packages,
is to be found on pages 34 to 37.

Audit Committee
The Audit Committee is comprised of the
two non-executive directors of the Company
and during the year was chaired by Pankaj
Lakhani. The external auditor, together
with the Group Finance Director and
other financial staff, are invited to attend
these meetings.

The Report of the Audit Committee, found
on pages 38 to 39, details the role of the
Committee and the work carried out by the
Committee throughout the year.

Investment Committee
The Investment Committee is comprised of
all the executive directors of the Company
and the directors of the Company’s
operating subsidiary, B.P. Marsh & Company
Limited, and meets whenever significant
investment matters arise which are not
dealt with in the normal course of Board
business. During the year the Board of
B.P. Marsh & Company Limited, whose
constituent membership is exactly the
same as the Investment Committee, took
responsibility for all matters relating to
ongoing portfolio management, with the
Investment Committee reserved solely for
considering advanced stage new business
opportunities, of which there were none.

Valuation Committee
During the year the Valuation Committee
was composed of Brian Marsh, Alice Foulk,
Jonathan Newman, Daniel Topping and
Pankaj Lakhani and, in accordance with
its terms of reference, is responsible for
preparing investment valuations and
reviewing the suitability of the Company’s
investee company valuation policy.

Nomination Committee
The Nomination Committee is composed of
at least three directors (including at least
one non-executive director) and during the
year was composed of Brian Marsh, Alice
Foulk, Daniel Topping, Pankaj Lakhani and
the Group’s Company Secretary, Sinead
O’Haire. In accordance with its terms of
reference the Committee is responsible for
reviewing the structure, size and composition
of the Board and senior staff and for
identifying and nominating for approval of
the Board, candidates for Board positions
and other senior staff vacancies as and

B.P. Marsh • 2022 Annual Report • Corporate Governance

when they arise. The Committee is also
responsible for reviewing the leadership of
the Group, including the consideration of
succession planning with a view to ensuring
the continued ability of the Group to
compete effectively in the marketplace.

Disclosure Committee
The Disclosure Committee (regarding Market
Abuse Regulation Disclosure) is composed
of Alice Foulk, Jonathan Newman, Daniel
Topping and the Group’s Company
Secretary, Sinead O’Haire. In accordance
with its terms of reference the Committee is
responsible for overseeing the Company’s
compliance with its obligations (as laid
down by the AIM Rules, Disclosure and
Transparency Rules and the Market Abuse
Regulation) in respect of the disclosure and
control of inside information directly
concerning the Company.

Directors’ Attendance Record

Environmental, Social and Governance
(“ESG”) Committee
The ESG Committee (established on
2 December 2021) is composed of the
founding members, Daniel Topping, Nicholas
Carter and the Group’s Company Secretary,
Sinead O’Haire. In accordance with its
terms of reference the Committee is
responsible for developing and reviewing the
strategies, policies and performance of the
Company in relation to environmental, social
and governance matters and suggesting
ways to drive improvement in these areas.
The Committee is also responsible for
ensuring the Company has an appropriate
ESG strategy that is integrated with the
core business strategy and ensuring the
strategy is embedded across the Group,
continues to evolve and is aligned to the
culture and values of the Company.

Board
Meeting

Audit
Committee

Remuneration
Committee

Valuation
Committee

ESG
Committee1

Nomination
Committee2

Disclosure
Committee

Brian Marsh

Alice Foulk

Daniel Topping

Jonathan Newman

Pankaj Lakhani

Nicholas Carter

12/13

13/13

N/A

2/2

N/A

2/2

N/A

2/2

N/A

69/69

N/A

1 Committee established December 2021 but did not first meet until February 2022
2 Whilst no formal meetings of the Nomination Committee took place during the year, discussions regarding Board

composition and structure were held by the Board.

B.P. Marsh • 2022 Annual Report • Corporate Governance

Corporate Governance
continued

Engagement of External Advisers

The Company engages external advisers as
and when it feels it necessary, for example
when there is a skills gap internally, or it is
agreed that the matter is important enough
that the prudent approach is to ensure
that professional advisers have opined on
the matter.

Advice is sought from selected lawyers and
accountants as and when required, including
on financial, tax, acquisition and disposal
matters, and is limited to the particular
matter which they have been engaged to
advise on.

Each Committee of the Board has, contained
within its Terms of Reference, the ability to
seek external third-party advice on any
issue contained within their remit at the
expense of the Company.

Each director is able to engage external
advisers at the expense of the Company in
order to discharge their duties, however
this had not been used during the year.

Board Evaluation

An annual evaluation is conducted to
review the performance and effectiveness
of the Board. This evaluation is conducted
through a questionnaire which is identical
for both executive and non-executive
directors covering the performance of the
Chairman, the Board and its Committees. It
is conducted in an interview format, which
is felt a more effective way of obtaining
more detailed feedback.

The results of all the interviews were
analysed and communicated through
a written report compiled by the
Company Secretarial Department, with
recommendations made where relevant.

Corporate Culture

Ever since the Company was founded, and
hence its name, the Group has advocated
and emphasised that it makes its decisions
based on the nature, needs and aspirations
of the people it employs, or those with
whom it goes into Partnership; sinking or
swimming together, alongside one another.

As a consequence of the above, the
Company pays careful attention to the
‘people dimension’ whether it is at a nine
person strong Lloyd’s broker in London or
the Management at Kentro Capital Limited
(formerly Nexus Underwriting Management
Limited), with offices in 9 countries and
over 300 staff.

In addition, and one of the main differentials
between the Company and its peers, is the
fact that it often offers flexibility to its
Partners where necessary to allow them
to develop at their own pace, for example,
not requiring personal guarantees to
accompany loans, and subordinating its
loans behind bank debt.

Likewise, this progressive approach is also
demonstrated internally, whereby the
executive team is continuingly challenged
to develop its skills and responsibilities
within the Company, resulting in a
motivated management team committed
to developing a principled yet sustainable
entity, that achieves the best results for all
its stakeholders.

B.P. Marsh • 2022 Annual Report • Corporate Governance

The task of reporting on the internal controls
and risk management has been delegated
to the Audit Committee, the report of which
can be read on pages 38 to 39.

The Board believes that its Annual Report and
these consolidated financial statements
play an important part in presenting all
shareholders with an assessment of the
Group’s position and prospects. The
Chairman’s Statement included within
the Annual Report contains a detailed
consideration of the Group’s current
position and outlook.

A statement of the directors’ responsibilities
in respect of the consolidated financial
statements is set out on pages 40 to 41.

By order of the Board.

S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2022

Relations with Shareholders

As a company listed on the Alternative
Investment Market, B.P. Marsh is responsible
for ensuring that it is aware of shareholder
needs and expectations. B.P. Marsh attaches
great importance to maintaining good
relationships with all of its shareholders
and interested parties and seeks to ensure
that they have access to correct and
adequate information at all times.

The Company is aware that as stakeholders,
its shareholders play a vital role in the fabric
of the Company and therefore regularly
engages in dialogue with its shareholders
and offers meetings with institutional and
major shareholders following the release of
B.P. Marsh’s Annual and Interim Results.

Much of the Company’s shareholder base
is comprised of small retail shareholders
holding shares through nominee accounts
and therefore the identities of the underlying
shareholders are not always available to
B.P. Marsh. The Company welcomes these,
and all, shareholders to make contact with
the Company and provide any feedback or
comments that they may have.

The Company’s Annual General Meeting is
also open to retail investors who hold their
shares in nominee accounts.

Internal Controls and
Risk Management

The Board is responsible for ensuring the
Group has effective internal controls in
place throughout the year, as well as
procedures necessary for reviewing the
Group’s system of internal controls and
assessing the nature and extent of the risks
facing the Group.

B.P. Marsh • 2022 Annual Report • Report of the Remuneration Committee

Report of the
Remuneration Committee

The Remuneration Committee of the Board
(the “Committee”) during the year was
composed of the non-executive directors
of the Company, Pankaj Lakhani and
Nicholas Carter, as well as the Managing
Director of the Group, Alice Foulk (resigned
20 January 2022).

The Committee is responsible for setting
the remuneration of the executive directors
and other members of staff, as detailed in
the Remuneration policy below.

Remuneration Policy

Company and at the same time are aligned
with the best interests of the shareholders.

The Committee’s terms of reference allow
that for as long as the Chairman and the
Managing Director of the Company are
executive, they can attend either as
members or observers and be invited to
express their views on remuneration levels
for other executives and staff, but should
not be present when their own salaries are
decided or when decisions are taken on
performance targets for incentive
arrangements in which they participate.

The Committee reviews remuneration levels
annually and seeks to ensure that they are
set at a level which is in line with comparable
companies in the industry, are capable of
attracting, retaining and motivating directors
and staff of appropriate calibre, are
consistent with the performance of the

The Board has delegated the review and
setting of non-executive director remuneration
to a sub-committee of the Board consisting of
Brian Marsh, Alice Foulk and Sinead O’Haire.

The Committee receives advice from external
remuneration advisers where appropriate.

Directors’ Service Agreements

The executive directors entered into service agreements with the Company on the
following dates:

Director

B.P. Marsh

J.S. Newman

D.J. Topping

A.H.D. Foulk

Date of service agreement

Term

Notice period

30 January 2006

1 March 2011

16 February 2015

Continuous

6 months

The non-executive directors do not have service agreements, but their letters of appointment
provide that their tenure of office is for an initial period of 12 months and shall continue until
either terminated by the non-executive director or the Company, on giving to the other, three
months prior written notice.

Director

P.B. Lakhani

N.H. Carter

Date of Office tenure

Initial period

Notice period

21 May 2015

1 May 2019

12 months

3 months

B.P. Marsh • 2022 Annual Report • Report of the Remuneration Committee

Joint Share Ownership Plan (“JSOP”)
During the year to 31 January 2019, B.P.
Marsh & Partners Plc entered into joint
share ownership agreements (“JSOAs”)
with certain employees and directors.

On 12 June 2018 1,461,302 new 10p Ordinary
shares in the Company were issued and
transferred into joint beneficial ownership
for 12 employees (including 4 directors)
under the terms of JSOAs. No consideration
was paid by the employees for their interests
in the jointly-owned shares.

The new Ordinary shares have been issued
into the name of RBC cees Trustee Limited
(“the Trustee”) as trustee of the B.P. Marsh
Employees’ Share Trust (“the Employee
Benefit Trust”) at a subscription price of
281 pence per share, being the mid-market
closing price on 12 June 2018. Following the
acquisition of the Trustee by JTC Plc on
10 December 2020, the Trustee has since
been rebranded to JTC Employer Solutions
Trustee Limited.

The jointly-owned shares are beneficially
owned by (i) each of the 9 currently
participating employees and (ii) the trustee
of the Employee Benefit Trust upon and
subject to the terms of the JSOAs entered
into between the participating employee,
the Company and the Trustee.

Of the 1,461,302 ordinary shares in respect
of which joint interests were granted, the
following directors of the Company each
acquired, jointly with the Employee Benefit
Trust, and upon and subject to the terms of
a JSOA, a beneficial interest (as joint owner)
in the number of shares respectively shown
opposite the name of each such director:

Director

A.H.D. Foulk

J.S. Newman

D.J. Topping

Total

Number of
jointly-owned
shares

% of total
jointly-owned
shares

167,465

502,395

11.5%

34.5%

Under the terms of the JSOAs, the employees
and directors are entitled to receive on
vesting the growth in value of the shares
above a threshold price of 281 pence per
share (market value at the date of grant)
plus an annual carrying charge of 3.75%
per annum (simple interest) to the market
value at the date of grant to the date of
vesting. The Employee Benefit Trust retains
the carrying cost, with 281 pence per share
due back to the Company.

Alternatively, after vesting, the participant
and the Trustee may exchange their
respective interests in the jointly-owned
shares such that each becomes the sole
owner of a number of Ordinary shares of
equal value to their joint interests.

Participants will therefore receive value from
the jointly-owned shares only if and to the
extent that the share value grows above the
initial market value plus the carrying cost
to the date of vesting.

On 12 June 2021 (the “vesting date”) the
performance criteria was met, after which
the members of the scheme became joint
beneficial owners of the shares and
therefore became entitled to any gain on
sale of the shares in excess of 312.6 pence
per share. Whilst these shares remain within
the Employee Benefit Trust, they do not have
voting or dividend rights. However, if the
shares are sold from the Employee Benefit
Trust in the future in excess of 281 pence per
share, the Group would be entitled to receive
£4,106,259 in total. These shares would then,
post-sale, have voting and dividend rights

B.P. Marsh • 2022 Annual Report • Report of the Remuneration Committee

Report of the
Remuneration Committee
continued

attached, such that they would become
fully dilutive for the Group. Whilst 254,414
shares out of 1,461,302 held within the
Employee Benefit Trust have been forfeited
by departing employees, the trust remains
the owner of these shares.

Further details are given in Note 23 to the
financial statements.

Share Incentive Plan (“SIP”)
During the year to 31 January 2017 the
Group established an HMRC approved
Share Incentive Plan (“SIP”).

During the year a total of 33,320 ordinary
shares in the Company, which were held in
Treasury as at 31 January 2021 (2021: 42,196
ordinary shares in the Company, which were
held in Treasury as at 31 January 2020)
were transferred to the B.P. Marsh SIP Trust
(“SIP Trust”). As a result, together with 1,994
of unallocated ordinary shares forfeited by
departing employees during the prior year,
a total of 35,314 ordinary shares in the
Company were available for allocation to
the participants of the SIP (2021: 47,044
ordinary shares were available for
allocation, including 4,848 ordinary shares
forfeited by departing employees).

On 12 April 2021, a total of 10 eligible
employees (including 3 executive directors
of the Company) applied for the 2021-22
SIP and were each granted 1,333 ordinary
shares (“21-22 Free Shares”), representing
approximately £3,600 at the price of issue.

(“Matching Shares”) up to a total of £3,600
worth of shares. All 10 eligible employees
(including 3 executive directors of the
Company) took up the offer and acquired
the full £1,800 worth of Partnership Shares
(596 ordinary shares) and were therefore
awarded 1,192 Matching Shares.

The 21-22 Free and Matching Shares are
subject to a 1 year forfeiture period.

A total of 31,210 (2021: 47,044) Free, Matching
and Partnership Shares were granted to the
10 (2021: 11) eligible employees during the
year, including 9,363 (2021: 13,515) granted to
3 (2021: 3) executive directors of the Company.

No ordinary shares were withdrawn from
the SIP Trust during the year (2021: 3,808
ordinary shares in the Company were
withdrawn from the SIP Trust and transferred
into the direct beneficial ownership of a
departing employee).

£68,070 of the IFRS 2 charges (2021: £74,467)
associated with the award of the SIP shares
to 10 (2021: 11) eligible directors and employees
of the Company has been recognised in
the Statement of Comprehensive Income as
employment expenses.

As at 31 January 2022, and after adjusting
for a total of 19,951 ordinary shares withdrawn
from the SIP Trust by employees on departure
and 6,842 ordinary shares forfeited on
departure (since inception), a total of
231,028 Free, Matching and Partnership Shares
had been granted to 10 eligible employees
under the SIP, including 78,579 granted to
three executive directors of the Company.

The results of the SIP Trust have been fully
consolidated within these financial
statements on the basis that the SIP Trust is
effectively controlled by the Company.

B.P. Marsh • 2022 Annual Report • Report of the Remuneration Committee

Following the SIP awards and withdrawals, 3 executive directors have a beneficial interest
in the ordinary shares of the Company (specifically held within its share plans) as follows:

Director

A.H.D. Foulk

J.S. Newman

D.J. Topping

Total

Ordinary shares held
under JSOP

Ordinary shares held
under SIP

167,465

502,395

18,073

26,780

18,660

63,513

The directors’ interests in other shares of the Company are detailed in the Group Report
of the Directors.

Aggregate Directors’ Remuneration

Emoluments

Fees

Pension contributions

Aggregate Directors’ Emoluments

2022
£

1,717,244

23,000

63,300

2021
£

1,228,133

19,750

62,000

Salaries
and fees
£

275,000

185,000

242,000

270,000

65,972

41,000

Benefits
£

5,610

6,008

8,514

–

2022
Emoluments
excluding pension
contributions
£

359,441

353,896

433,008

486,927

65,972

41,000

Annual
bonuses
£

84,441

163,286

185,000

208,413

–

B.P. Marsh

A.H.D. Foulk

J.S. Newman

D.J. Topping

P.B. Lakhani

N.H. Carter

Directors’ Pensions
The executive directors received the following
pension contributions during the year:

Audit
The tables in this report (including the Notes
thereto) have been audited by Rawlinson &
Hunter Audit LLP.

B.P. Marsh

A.H.D. Foulk

J.S. Newman

D.J. Topping

2022
£

–

14,800

24,200

24,300

This report has been approved by the
Remuneration Committee and the Board as
a whole and has been signed on behalf of the
Chairman of the Remuneration Committee,
Pankaj Lakhani, on 10 June 2022.

By order of the Board

S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2022

B.P. Marsh • 2022 Annual Report • Report of the Audit Committee

Report of the
Audit Committee

The Audit Committee’s role is to provide
effective governance over the Group’s
financial reporting, including the
disclosures made in the financial
statements, the performance of the
external auditors and oversight of the
Group’s internal financial control function
and to report to the Board on these
matters. The Company’s external auditors
are Rawlinson & Hunter Audit LLP
(“Rawlinson & Hunter”).

The Audit Committee members during the
year were Pankaj Lakhani (Chairman) and
Nicholas Carter, both Non-Executive Directors
of the Company. The Audit Committee
formally met twice in the financial year to
31 January 2022, and remained in frequent
contact throughout the period. The external
auditors are invited to each meeting,
together with the relevant members of the
Finance Department as appropriate.

The full responsibilities of the Audit
Committee are set out in its Terms of
Reference that are available on the
Company’s Website.

The Audit Committee has reviewed, with both
management and the external auditors,
the interim and final financial statements,
focusing on:

• Changes in accounting policies

and practices

• Major judgemental areas
• Significant adjustments resulting

from the audit

• The going concern assumption
• Compliance with Accounting Standards
• Compliance with applicable regulatory

and legal requirements

• Compliance with best practice in the

area of Corporate Governance

The Company adopted the QCA Governance
Code (“QCA Code”) issued by the Quoted
Companies Alliance in September 2018. The
QCA Code is a practical, outcome-oriented
approach to corporate governance that is
tailored for small and mid-size quoted
companies in the UK.

The Audit Committee has agreed that the
selection of appropriate accounting
policies and practices has not materially
changed since the previous year.

B.P. Marsh • 2022 Annual Report • Report of the Audit Committee

The Audit Committee has considered the
material risks and exposures faced by the
Company, most notably in the current
climate being Covid-19. However, the
Committee is in agreement that there are
no further risks that remain unidentified in
the Financial Statements. It was also agreed
that there were no material uncertainties
related to events and conditions that may
cast significant doubt on the Group’s
ability to continue as a going concern.

As Chairman of the Audit Committee, I am
pleased to report that we work and
communicate well with Rawlinson & Hunter
throughout the year and most importantly
during the Group’s external audit process,
which runs smoothly and effectively.

During the year, fees of £49,902 (2021:
£19,265) were paid to the external auditors
for non-audit work, including tax
compliance. This non-audit work was
undertaken by independent teams within
Rawlinson & Hunter.

Rawlinson & Hunter was appointed as B.P.
Marsh’s external auditor for the year ended
31 January 2022. There are currently no
plans to retender. The Rawlinson & Hunter
partner responsible for the B.P. Marsh audit
is Kulwarn Nagra, and HAT Group, an
independent audit, accountancy and
ICAEW compliance training organisation is
the Engagement Quality Control Reviewer.

For the upcoming AGM (25 July 2022), the
Committee has recommended to the Board
that Rawlinson & Hunter be reappointed,
and the Board will propose their
reappointment.

The Committee will continue to keep its
activities under review to ensure that it
complies with any changes in the
regulatory environment.

P. B. Lakhani
Audit Committee Chairman
10 June 2022

B.P. Marsh • 2022 Annual Report • Group Report of the Directors

Group Report
of the Directors

Directors

B.P. Marsh OBE (Chairman)
A.H.D. Foulk BA (Hons)
J.S. Newman ACMA, CGMA, MCSI
D.J. Topping MCSI, FCG
P.B. Lakhani FCCA (non-executive)
N.H. Carter (non-executive)

The directors submit their report and
the audited financial statements of the
Company and the Group (namely
B.P. Marsh & Partners Plc, B.P. Marsh &
Company Limited, Marsh Insurance
Holdings Limited, B.P. Marsh Asset
Management Limited, B.P. Marsh (North
America) Limited, RHS Midco I LLC,
B.P. Marsh US LLC, B.P. Marsh & Co. Trustee
Company Limited, Marsh Development
Capital Limited, Bastion London Limited,
XPT London Limited, the B.P. Marsh SIP Trust
and the B.P. Marsh Employees’ Share Trust)
for the year ended 31 January 2022.

Statement of Directors’
Responsibilities

The directors are responsible for preparing
the annual report (including the Group
Report of the Directors and the Group
Strategic Report) and the financial
statements in accordance with applicable
law and regulations.

Company law requires the directors to
prepare Group and Company financial
statements for each financial year. The
directors are required by the AIM Rules of
the London Stock Exchange to prepare
Group financial statements in accordance
with UK-adopted international accounting
standards and have elected to prepare the

Company financial statements on the same
basis. Under company law the directors
must not approve the financial statements
unless they are satisfied that they give a
true and fair view of the state of affairs of
the Group and Company and the Group’s
profit or loss for that year.

In preparing financial statements the
directors are required to:
• select suitable accounting policies
and then apply them consistently;

• make judgments and accounting estimates

that are reasonable and prudent;

• state whether they have been prepared in
accordance with UK-adopted international
accounting standards subject to any
material departures disclosed and
explained in the financial statements; and

• prepare the financial statements on the

going concern basis unless it is
inappropriate to presume that the Group
and the Company will continue in business.

The directors confirm that they have complied
with the above requirements in preparing
the financial statements.

The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Group and Company and enable
them to ensure the financial statements
comply with the Companies Act 2006. They
are also responsible for safeguarding the
assets of the Group and the Company and
hence for taking reasonable steps for the
prevention and detection of fraud and
other irregularities.

B.P. Marsh • 2022 Annual Report • Group Report of the Directors

The directors are responsible for ensuring the
annual report and the financial statements
are made available on a website. Financial
statements are published on the Company’s
website in accordance with legislation in the
United Kingdom governing the preparation
and dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The maintenance and integrity
of the Company’s website is the responsibility
of the directors. The directors’ responsibility
also extends to the on-going integrity of the
financial statements contained therein.

Disclosure of Information
to the Auditors

Each of the persons who are directors at the
time when the Group Report of the Directors
is approved has confirmed that:

• so far as that director is aware, there is

no relevant audit information of which the
Company’s auditors are unaware; and

• that director has taken all steps that

ought to have been taken as a director in
order to be aware of any information
needed by the Company and Group’s
auditors in connection with preparing
their report and to establish that the
auditors are aware of that information.

This information is given and should be
interpreted in accordance with the provisions
of Section 418 of the Companies Act 2006.

Principal Activity

The principal activity of the Group during
the year was the provision of consultancy
services to, as well as making and trading
investments in, financial services businesses.

Country of Incorporation
and Registration

B.P. Marsh & Partners Plc was incorporated
and is registered in England and Wales.

Results of the Business

The results for the year are set out on page 68.
The directors consider the current state of
affairs of the Group to be satisfactory.

Dividends

A dividend of 2.44p per share (£878,282)
was paid on 30 July 2021 (31 July 2020:
£798,353 or 2.22p per share). The directors
have recommended a final dividend of
2.78p per share which will be paid, subject
to Shareholder approval, on 29 July 2022
to Shareholders registered at the close of
business on 1 July 2022. Based upon the
current number of shares in issue, and
excluding the shares held within the Joint
Share Ownership Plan and in Treasury, this
would total £1,001,435.

B.P. Marsh • 2022 Annual Report • Group Report of the Directors

Group Report
of the Directors
continued

Significant Interests

As at 27 May 2022 the directors have been made aware that the following shareholders
held disclosable interests of 3% or more of the issued share capital of the Company:

Mr B.P. Marsh1

PSC UK Pty Limited

Mr M. MacLeish

Hargreaves Lansdown Asset Management

Marsh Christian Trust1

JTC Employer Solutions Trustee Limited

Interactive Investor

James Sharp & Co

No. of Ordinary
shares of 10p
each held

% of issued
Share capital

14,184,419

7,385,504

1,800,002

1,604,008

1,477,660

1,443,147

1,390,856

1,287,894

37.9%

19.7%

4.8%

4.3%

3.9%

3.7%

3.4%

1 The Marsh Christian Trust, of which Mr B.P. Marsh is a trustee and Settlor, held 1,477,660 ordinary shares (3.9% of the issued

share capital) in the Company.

Directors

The names of the directors who served at any time during the year are stated at the head
of this report.

The directors’ interests in the shares of the Company were:

Mr B.P. Marsh1

Mr D.J. Topping2

Mr J.S. Newman3

Ms A.H.D. Foulk4

Mr P.B. Lakhani

Mr N.H. Carter

31 January 2022

31 January 2021

Ordinary shares
of 10p each

15,662,079

295,572

212,562

208,966

36,912

25,000

293,761

209,441

215,397

36,912

20,000

1 Total interest includes 1,477,660 ordinary shares held by the Marsh Christian Trust of which Mr B.P. Marsh is Trustee and

Settlor (31 January 2021: Total interest included 1,272,000 ordinary shares held by the Marsh Christian Trust).

2 Total interest includes 18,660 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with
JTC Employer Solutions Trustee Limited (“JTC”) under a Joint Share Ownership Agreement between Mr D.J. Topping, JTC
and the Company and 109,447 ordinary shares directly owned by Mr D.J. Topping (31 January 2021: Total interest included
23,659 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with JTC under a Joint
Share Ownership Agreement between Mr D.J. Topping, JTC and the Company and 102,637 ordinary shares directly owned
by Mr D.J. Topping).

3 Total interest includes 26,780 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with

JTC under a Joint Share Ownership Agreement between Mr J.S. Newman, JTC and the Company and 18,317 ordinary shares
directly owned by Mr J.S. Newman (31 January 2021: Total interest included 23,659 ordinary shares held within the Company’s
SIP Trust, 167,465 ordinary shares co-owned with JTC under a Joint Share Ownership Agreement between Mr J.S. Newman,
JTC and the Company and 18,317 ordinary shares directly owned by Mr J.S. Newman).

4 Total interest includes 18,073 ordinary shares held within the Company’s SIP Trust, 167,465 ordinary shares co-owned with

JTC under a Joint Share Ownership Agreement between Ms A.H.D. Foulk, JTC and the Company and 23,428 ordinary shares
directly owned by Ms A.H.D. Foulk (31 January 2021: Total interest included 23,072 ordinary shares held within the Company’s
SIP Trust, 167,465 ordinary shares co-owned with JTC under a Joint Share Ownership Agreement between Ms A.H.D. Foulk,
JTC and the Company and 24,860 ordinary shares directly owned by Ms A.H.D. Foulk).

B.P. Marsh • 2022 Annual Report • Group Report of the Directors

Share Capital

Information relating to the Company’s
ordinary share capital (including share
repurchases and cancellation) is shown in
Note 18 to the financial statements.

Events after the Reporting Date

authority solutions and services to Managing
General Agencies, Coverholders and (Re)
insurers. The Group also provided Denison
and Partners with a loan facility of
£670,000 on completion, which is expected
to be drawn down in tranches in line with
their business plan. At the date of this
report no amounts have been drawn down
from the agreed loan facility.

Group
On 22 February 2022 Nexus Underwriting
Management Limited (“Nexus”), an investee
company, changed its name to Kentro
Capital Limited (“Kentro”) as part of a
re-branding exercise.

On 11 May 2022 Lilley Plummer Holdings
Limited drew down the remaining £100,000
of its £300,000 loan facility agreed by the
Group in September 2021. As at 31 January
2022 £200,000 was outstanding.

On 1 March 2022 the Group sold its entire
77.25% stake in Summa Insurance Brokerage,
S.L. (“Summa”) to Acrisure España S.L.
(“Acrisure”), part of Acrisure LLC, for
consideration of €9,700,737 (£8,104,208),
net of transaction costs. The consideration
received was in line with the carrying value
of the Group’s investment in Summa of
£8,104,000 as at 31 January 2022 and
represented an overall gain of £2,008,065
above the cost of investment. Outstanding
loans of €1,820,070 (£1,520,526) were also
repaid in full on completion.

On 1 June 2022 the Group agreed to invest,
through its wholly-owned subsidiary
company B.P. Marsh (North America)
Limited, a further USD 3,500,000
(c.£2,800,000) in XPT Group LLC (“XPT”),
subject to approval from XPT’s senior lender
Madison Capital. USD 2,780,000 will be used
to subscribe for a further 2,780 redeemable
preference shares in XPT. The remaining
USD 720,000 will be used to acquire a further
0.97% equity stake in XPT. The funding
provided will allow XPT to repay an existing
revolving credit facility and satisfy certain
deferred consideration payments due.
On completion, the total amount invested
by the Group in redeemable preference
shares will increase from USD 3,220,000 as
at 31 January 2022 to USD 6,000,000 and
the Group’s equity investment in XPT will
also increase from 28.18% as at 31 January
2022 to 29.15%.

B.P. Marsh • 2022 Annual Report • Group Report of the Directors

Group Report
of the Directors
continued

Directors’ and Officers’
Liability Insurance

The Company has purchased insurance
to cover directors’ and officers’ liability, as
permitted by Section 233 of the Companies
Act 2006. This insurance was in force
throughout the year ended 31 January
2022 and remains in force at the date of
this report.

Financial Risk Management

The directors’ assessment of the principal
risks and uncertainties is set out in the
Group Strategic Report.

Appointment of Auditor

In accordance with section 489 of the
Companies Act 2006, a resolution proposing
the reappointment of Rawlinson & Hunter
Audit LLP as the Group’s Auditor will be put
to members at the forthcoming AGM.

Registered Office:
5 Floor
4 Matthew Parker Street
London
SW1H 9NP

By order of the Board

S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2022

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report

Business Review

During the year the major activities of the
Group were as follows:

On 5 February 2021 Sage Program
Underwriters, Inc. (“Sage”) drew down USD
150,000 (£109,998) from its loan facility of
USD 250,000 agreed by the Group in June
2020. As at 31 January 2022 total loans
outstanding amounted to USD 150,000
(£111,496), with a remaining undrawn
facility of USD 100,000 (Note 21).

The Group paid £200,000 on 8 March 2021
and on 8 September 2021 in relation to
deferred consideration due to a former
minority shareholder in Paladin Holdings
Limited (“Paladin”). The payments
represented the second and final tranches
of consideration due in respect of 250,000
ordinary shares in Paladin acquired from
the minority shareholder in August 2020 for
initial consideration of £400,000. These
shares are being held by the Group under
a call option arrangement which Paladin
can call at any time up to 24 August 2026
and buy back from the Group for
£804,000. These shares were originally
acquired as 50,000 ordinary shares,
however the Group’s holding increased to
250,000 ordinary shares by way of a 5:1
share restructure which Paladin undertook
on 15 April 2021. As at 31 January 2022 total
consideration paid by the Group in respect
of these shares amounted to £800,000,
with no further consideration payable.

shares were previously acquired in March
2020 as 50,000 ordinary shares from a
minority shareholder and exiting employee
for a total cost of £260,000, however
following the 5:1 share restructure in April
2021 noted above, the Group’s holding
increased to 250,000 ordinary shares.
The terms of the call option arrangement
allowed Paladin to buy-back the 250,000
shares from the Group at a fixed price of
£1.0452 per share (£261,300). On 24 May
2021, pursuant to the Option Notice being
served, the Group received £26,130 as
consideration for the part disposal of
25,000 shares, after which the shares were
cancelled. On 17 June 2021 a further Option
Notice was received in relation to the
remaining 225,000 shares held under the
aforementioned call option arrangement
and on 1 July 2021 the Group received
£235,170 as consideration for these shares,
after which the shares were cancelled by
Paladin. Following the exercise of the call
option and the subsequent cancellation of
the shares, the Group’s equity holding in
Paladin decreased from 49.16% as at
31 January 2021 to 47.06% as at 31 January
2022, including the 5.88% relating to the
shares held under option. The Group
envisages that this shareholding will reduce
over time as the options are exercised.

On 18 May 2021 the Group agreed to extend
the repayment date of the £1,500,000 loan
outstanding from LEBC Holdings Limited
(“LEBC”) as at 31 January 2021 from 29 April
2021 to 1 October 2022. As part of this
agreement the Group cancelled the
remaining undrawn £500,000 loan facility,
reducing the total agreed loan facility from
£2,000,000 to £1,500,000 with effect from
1 May 2021. As at 31 January 2022 total
loans of £1,500,000 were outstanding from
LEBC, with no remaining undrawn facility.

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

On 30 July 2021 Stewart Specialty Risk
Underwriting Ltd (“SSRU”) repaid its remaining
CAD 300,000 (£172,061) outstanding loan
with the Group in full, which was 18 months
earlier than originally expected.

On 31 August 2021 ATC Insurance Solutions
PTY Limited (“ATC”), acquired 100% of MB
Prestige Holdings PTY Limited (“MB”) (both
being investee companies of the Group) for
total consideration of AUD 17,000,000. As
part of this transaction the Group sold its
entire 40% stake in MB for consideration of
AUD 6,800,008 (£3,611,071), for which the
Group received newly issued shares in ATC.
The Group also received £18,602 in cash,
representing the working capital adjustment
payable following the completion accounts
being finalised. Total consideration for the
sale therefore amounted to £3,629,673. This
represented a realised gain of £392,673
(Note 13) above the Group’s carrying value
of MB as at 31 January 2021 of £3,237,000
and an overall gain of £3,149,967 above the
cost of investment.

On 31 August 2021, and as outlined above,
AUD 6,800,008 (£3,611,071) of the
consideration received from the disposal of
the Group’s equity investment in MB was in
the form of newly issued shares in ATC.
Following the effective reinvestment of the
non-cash proceeds from the sale of MB, the
Group’s equity investment in ATC increased
from 20% to 25.56%.

On 20 September 2021 the Group provided
Lilley Plummer Holdings Limited (“Lilley
Plummer”) with a loan facility of £300,000 to
assist with its working capital requirements
for continued growth. £200,000 of the loan
facility was drawn down on 21 September
2021 and remained outstanding as at
31 January 2022, with a remaining
undrawn facility of £100,000 (Note 21).

On 8 October 2021 Kentro, formerly known
as Nexus (refer to Note 24), repaid in full its
£4,000,000 loan outstanding with the
Group as part of a fundraising and
refinancing exercise, having secured a new
£70,000,000 banking facility from Barings
LLC. As part of the refinancing, Kentro also
repaid its existing £40,000,000 loan facility
with HPS Investment Partners LLC.

Following the aforementioned loan repayment,
on 8 October 2021 the Group acquired a
further 100,000 ordinary shares (2.49% equity
stake) in Kentro from a founding non-
management shareholder for consideration
of £4,000,000. This increased the Group’s
fully diluted equity investment in Kentro to
19.18% at the time of investment. As at
31 January 2022 the Group’s shareholding
in Kentro was 19.34% (19.05% diluted).

B.P. Marsh • 2022 Annual Report • Group Strategic Report

On 19 November 2021 Paladin repaid
£2,000,000 of its total outstanding loans
with the Group of £5,096,500, having
secured a new loan facility of £3,000,000
with Coutts & Co (“Coutts”). The remaining
£1,000,000 of Paladin’s new loan facility
with Coutts will be used to fund further
growth. As at 31 January 2022 total loans
outstanding to the Group amounted to
£3,096,500, with no undrawn facility
remaining (refer to Note 24).

On 13 October 2021 the Group repaid
£550,000 of its outstanding loan due to
Brian Marsh Enterprises Limited (“BME”)
of £1,000,000. On 29 November 2021 the
Group repaid the remaining £450,000
outstanding to BME. On 29 January 2022
the loan facility ended (refer to Note 17).

On 21 December 2021 the Group sold its
entire 40.5% equity holding in Walsingham
Motor Insurance Limited (“WMIL”) for
consideration of £4,654,119. WMIL was
acquired by Humn.ai Limited (“Humn”),
a London-based insurance provider
producing real-time data-driven fleet

insurance. The Group also disposed of its
20% equity holding in Walsingham Holdings
Limited (“WHL”), which was liquidated as
part of the transaction and resulted in further
cash proceeds of £209,893 payable to the
Group post year end. The Group also
received full repayment of its outstanding
loan with WHL of £285,975 on completion.
Total equity consideration receivable
(including deferred amounts due) for the
combined disposals of WMIL and WHL
therefore amounted to £4,864,012. This
represented a realised gain of £2,544,012
(Note 13) above the Group’s combined
carrying value of WMIL and WHL as at
31 January 2021 of £2,320,000 and an
overall gain of £4,263,712 above the cost of
investment. Since 31 January 2022 the Group
has received the deferred consideration
amounts due in respect of its disposals of
WMIL and WHL amounting to £215,983
(£6,089 in respect of WMIL and £209,893 in
respect of WHL), which were included within
‘Trade and other receivables’ within the
Consolidated Statement of Financial Position
as at 31 January 2022 (refer to Note 15).

Financial performance summary
The table below summarises the Group’s financial results and key performance indicators
for the year to 31 January 2022.

Net asset value

Net asset value per share – undiluted

Net asset value per share – diluted

Profit on ordinary activities before tax

Dividend per share paid

Total shareholder return (including dividends)

Total shareholder return on opening shareholders’ funds

Net cash from operating activities (net of equity investments, realisations and loans)

Equity cash investment for the year

Realisations (net of disposal costs)

Loans issued in the year

Loans repaid by investee companies in the year

Cash funds at end of year

Borrowing/Gearing

Year to/as at
31 January
2022

Year to/as at
31 January
2021

£166.6m

462.7p

455.6p

£19.4m

2.44p

£17.6m

11.7%

£1.5m

£8.0m

£8.8m

£0.3m

£8.1m

£8.6m

£Nil

£149.9m

416.4p

£13.7m

2.22p

£13.8m

10.1%

£0.6m

£2.4m

£1.1m

£2.9m

£0.7m

£1.0m

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

The Group had a strong year, delivering an
increase in the Net Asset Value of £16.7m
(2021: £13.0m). At 31 January 2022 the Net
Asset Value of the Group was £166.6m which
equates to 462.7p per share undiluted
(2021: £149.9m, or 416.4p per share). On a
diluted basis this equates to 455.6p per
share (2021: 416.4p per share). This equates
to an increase in Net Asset Value of 11.1%
(2021: 9.5%) for the year undiluted.

The Net Asset Value of £166.6m at 31 January
2022 represents a total increase in Net Asset
Value of £137.4m since the Group was
originally formed in 1990 having adjusted
for the original capital investment of £2.5m,
the £10.1m net proceeds raised on AIM in
2006 and the £16.6m of net proceeds raised
through the Share Placing and Open Offer
in July 2018. The Directors note that the
Group has delivered an annual compound
growth rate of 8.4% in Group Net Asset Value
after running costs, realisations, losses,
distributions and corporation tax since
flotation and 11.6% since 1990.

Covid-19 and Ukraine conflict
impact assessment
The financial statements to 31 January 2022
include the impact of Covid-19. Overall
performance within the investment portfolio
increased throughout the financial year
as Covid-19 restrictions were reduced
or withdrawn.

The financial statements to 31 January 2022
do not include any impact of the conflict in
Ukraine. This is because the conflict was a
specific, defined event which occurred on
24 February 2022, i.e. after the end of the
reporting period, and the significant
sanctions imposed by the international
community were a direct response to that
situation. As such it has been determined
that this is to be treated as a non-adjusting
post-balance sheet event.

Whilst there has been price inflation which
has led to interest rate increases, and
volatility within foreign exchange currency
rates, certain investments within the Group’s
portfolio have seen premium rate increases
and thus increased commission. Therefore
at the current time the Group does not
consider the conflict in Ukraine to have had
a material impact upon the Group.

Investment performance
The Group’s investment portfolio movement during the year was as follows:

31 January 2021
valuation

£131.0m

Acquisitions
at cost

£8.0m

Disposal
proceeds

£(8.8)m

Adjusted
31 January 2021
valuation

31 January 2022
valuation

£130.2m

£149.3m

This equates to an increase in the portfolio
valuation of 14.7% (2021: 10.9%).

The Group invested a total of £8.0m in equity
in the portfolio during the year (2021: £2.4m).
£4.0m was invested to acquire further shares

in Kentro and £0.4m as part of deferred
consideration to acquire shares in Paladin.
£3.6m of the equity investment in the year
related to the Group’s sale of MB, which was
used to acquire new shares in ATC and was
a non-cash investment.

B.P. Marsh • 2022 Annual Report • Group Strategic Report

In addition, the Group provided £0.3m of loans
(2021: £1.1m) as follow-on funding to two
investee companies to provide working capital
for strategic hires and product development.

There were £8.8m of investment realisations
during the year (2021: £Nil). £4.9m was
realised from the disposal of the Group’s
holdings in WMIL and WHL, £3.6m from the
sale of MB and £0.3m from the sale of shares
in Paladin.

£8.1m of loan repayments were made to
the Group by investee companies (2021:
£2.9m) of which £4.0m was received from
Kentro which was subsequently invested in
further equity, £2.0m from Paladin and
£1.1m from MEP, with the remainder from
four investee companies.

Operating income
Net gains from investments were £20.2m
(2021: £12.9m), a 56.9% increase over the
previous year. This included £2.9m in
realised gains from the sale of the Group’s
interests in WMIL and WHL and £1.1m
received in cash from MEP for a loan that
was previously provided against in full.
£16.2m related to the revaluation of the
investment portfolio at 31 January 2022
(2021: £12.9m).

Overall, income from investments
decreased by £0.4m, or 9.5% to £4.1m
(2021: £4.5m). The reduction was primarily
due to receiving lower interest income on
loans made to the portfolio, which
decreased by 14.1% to £1.1m (2021: £1.3m)
which was due to a net £7.8m of loans
being repaid. Whilst this led to reduced
income, it significantly enhanced the
Group’s liquidity.

Operating expenses
Operating expenses increased by £1.2m, or
32.7% during the year to £4.8m (2021: £3.6m).
This included £0.8m of one-off expenses
compared to the prior year. Excluding
these, expenses rose by 11.1% as lockdown
restrictions eased and the Group commenced
a return to normal operations.

Profit on ordinary activities
The consolidated profit on ordinary activities
after taxation increased by 27.4% to £17.5m
(2021: profit of £13.7m).

The Group’s strategy is to cover expenses
from the portfolio yield. On an underlying
basis, including realised gains in cash, but
excluding unrealised investment activity
(unrealised gains on equity and provision
against loans receivable from investee
companies), this was achieved with a pre-tax
profit of £3.2m for the year (2021: £0.9m).

Liquidity
Cash funds at 31 January 2022 were £8.6m
(2021: £0.7m) and the Group was debt free
(2021: £1.0m of loans borrowed). A net £7.8m
of loans to the investment portfolio were
repaid during the year (2021: £1.8m net
repaid). These funds enabled the Group to
repay the £1.0m loan, part of a £3.0m loan
facility with BME, a company in which the
Chairman, Mr. Brian Marsh, is a director
and sole shareholder, and be debt free by
the year end. This loan facility ended on
29 January 2022.

Of note, since the year-end the sale of
Summa Insurance Brokerage S.L. (“Summa”)
completed whereby the Group received equity
proceeds of £8.1m and the outstanding loan
to Summa of £1.5m repaid, and the Group
completed a new investment in Denison
and Partners. Currently the Group has

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

cash funds of £14.7m, net of the £2.8m
follow-on investment into XPT that was
agreed on 1 June 2022.

Dividend
The Group paid a dividend of £0.9m (or 2.44p
per share) during the year, an increase of
10% over the preceding year (2021: £0.8m
or 2.22p per share). The dividend payment
reflected the Group’s requirement to strike a
balance between the need to conserve cash
to ensure that it could continue to prosper
and develop during the Covid-19 pandemic
and beyond, whilst also rewarding
Shareholders for their continuing loyalty,
and the dividend represented a distribution
of 100% of the underlying realised profits of
the Group for the year to 31 January 2021.
The Group has proposed a dividend of £1.0m
(or 2.78p per share), and aspires to maintain
the same level of distribution for the next
two years, which represents almost 100% of
the underlying realised profits for the year
to 31 January 2022.

Total shareholder return for the year was
therefore 11.7% (2021: 10.1%) including the
dividend payment and the Net Asset
Value increase.

Diluted NAV per share
The Net Asset Value per share at 31 January
2022 is 462.7p (2021: 416.4p). A long-term
share incentive plan for certain directors
and employees of the Group matured on
12 June 2021, and 1,461,302 shares are held
within an Employee Benefit Trust. Whilst
they remain within the Trust they do not
have voting or dividend rights. However, if
the shares are sold in the future in excess
of 281 pence per share (noting that the
participants only benefit from a sale in
excess of 312.6p per share), the Group
would be entitled to receive £4,106,259 and
these shares would then become entitled to

voting and dividend rights and therefore
these shares would become dilutive. Overall,
this would therefore dilute the Net Asset Value
per share as at 31 January 2022 to 455.6p.

Financial Risk Management

Effective risk management is integral to the
Group’s ability to deliver its strategy of
achieving returns for its shareholders.

As an investor, the Group is in the business
of taking risk and its operations therefore
expose the Group to a variety of financial
risks. The Group’s risk management
framework is essential in ensuring that it
monitors, manages and mitigates those risks,
and acts accordingly, to limit the adverse
effects on the financial performance of
the Group.

As at 31 January 2022 the Group was debt
free (31 January 2021: the Group owed
£1.0m in loans). Refer to Notes 17 and 24
for further detail.

Approach to risk governance
The Board is responsible for risk assessment,
the risk management process and for the
protection of the Group’s reputation and
integrity and all employees are expected to
meet the Group’s high standard of conduct
and support effective risk management
through a strong control culture.

Risk governance structure
Board
The Board governs and approves the
Group’s risk appetite and strategy and is
responsible for ensuring an effective risk
management and oversight process. It is
assisted by seven standing committees of
the Board (outlined on pages 30 to 31 and
discussed further below), each with specific
responsibility for key risk management

B.P. Marsh • 2022 Annual Report • Group Strategic Report

areas, ensuring that standards of integrity,
financial performance, risk management
and internal control are upheld.

Market Abuse Regulation) in respect of the
disclosure and control of inside information
directly concerning the Group.

Audit Committee
The primary responsibility of this committee
is for managing financial reporting risk and
internal controls, as well as the relationship
with the external auditor.

Remuneration Committee
The Remuneration Committee determines
the level and make-up of remuneration
(including bonuses and awards) of the
executive directors and members of staff.

Valuation Committee
The primary responsibility of the Valuation
Committee is for determining the valuation
of the Group’s unquoted equity investment
portfolio, comprising 90% of net assets at
31 January 2022 (2021: 87%). The Valuation
Committee also provides oversight and
challenge of the underlying assumptions
and valuation policy which formulate the
valuations and directly engages with the
Group’s external auditor at each reporting
period to confirm that the basis of its
valuations is reasonable and appropriate
based upon the information available to
the Group at that time.

Investment Committee
The Investment Committee is the principal
committee for managing the Group’s
investment portfolio and is primarily
responsible for considering and approving
all significant investment and divestment
decisions for recommendation to the Board.

Nomination Committee
The Nomination Committee is responsible for
ensuring that the Board has the necessary
skills, experience and knowledge to deliver
its strategic objectives.

Disclosure Committee
The Disclosure Committee is responsible for
overseeing the Group’s compliance with its
obligations (as laid down by the AIM Rules,
Disclosure and Transparency Rules and the

The activities of the Remuneration Committee
and Audit Committee are discussed further
in the Report of the Remuneration
Committee on pages 34 to 37 and Report
of the Audit Committee on pages 38 to 39.

Environmental, Social and Governance
(“ESG”) Committee
The ESG Committee (established on
2 December 2021) is responsible for
developing and reviewing the strategies,
policies and performance of the Company
in relation to environmental, social and
governance matters and suggesting ways
to drive improvement in these areas. The
Committee is also responsible for establishing
an appropriate ESG strategy that is
integrated with the Company’s core
business strategy and that this strategy is
embedded across the Group, continues to
evolve and is aligned to the culture and
values of the Company.

In addition to the standing committees of
the Board, regular meetings between the
Chairman’s Office and the various internal
departments of the Company, including
the Investment, Finance, Company
Secretarial and Investor Relations
departments are held to ensure effective
communication and transparency of
information throughout the Group.

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

Regular portfolio monitoring is an integral
element of the meetings held between the
Investment Department and the Chairman’s
Office to continually manage risks associated
with the portfolio.

The specific risks to which the Group is
exposed are outlined as follows:

Price risk
The Group is exposed to private equity
securities price risk as it invests in unquoted
companies. The Group manages the risk by
ensuring that a director of the Group is
appointed to the board of each investee
company. In this capacity, the appointed
director can advise the Group’s Board of the
investee companies’ activities and prompt
action can be taken to protect the value of
the investment. Monthly management reports
are required to be prepared by investee
companies for the review of the appointed
director and for reporting to the Group Board.

Credit risk
The Group is subject to credit risk on its
unquoted investments, cash and deposits.
The credit quality of unquoted investments,
which are held at fair value and include
debt and equity elements, is based on the
financial performance of the individual
portfolio companies. The credit risk relating
to these assets is based on their enterprise
value and is reflected through fair value
movements.

The Group is exposed to the risk of default
on the loans it has made available to
investee companies. The loans rank in
preference to the equity shareholding and
the majority are secured by a charge over
the assets of the investment. The Group
manages the risk by ensuring that there is
a director of the Group appointed to the

board of each of its investee companies. In
this capacity, the appointed director can
advise the Group’s Board of investee
companies’ activities and prompt action
can be taken to protect the value of the
loan, such that the directors believe the
credit risk to the Group is adequately
managed. When a loan is assessed to be
likely to be in default then the Group will
review the probability of recoverability, and
if necessary, make a provision for any
amount considered irrecoverable.

Liquidity risk
The Group invests in unquoted early stage
companies. The timing of the realisation of
these investments can be difficult to
estimate. The directors assess and review
the Group’s liquidity position and funding
requirements on a regular basis and this is
an agenda item for its Board meetings. A
key objective is to ensure that the income
from the portfolio covers operating
expenses such that funds available for
investment are not used for working
capital. The Group regularly reviews the
cash flow forecast to ensure that it has the
ability to meet commitments as they fall
due and to manage its working capital. The
Board considers that the Group has
sufficient liquidity to manage current
commitments.

Interest rate risk
Interest rate risk arises from changes in the
interest receivable on cash and deposits, on
loans issued to investment companies and
on certain preferred dividend mechanisms
linked to an interest rate. In addition, the
risk arises on any borrowings with a variable
interest rate. At 31 January 2022, the Group
did not have any interest bearing liabilities
but did have interest bearing assets. The
majority of loans provided by the Group

B.P. Marsh • 2022 Annual Report • Group Strategic Report

are subject to a minimum interest rate to
protect the Group from a period of low
interest rates, and also a hurdle rate linked
to the UK Base Rate.

Currency risk
In terms of financial risk, the Group currently
has substantial exposure to foreign
investment and derives income outside the
UK. As such some of the Group’s income and
assets are subject to movement in foreign
currencies which will affect the Consolidated
Statement of Comprehensive Income in
accordance with the Group’s accounting
policy. The Board monitors the movements
and manages the risk accordingly (see
Note 26).

New investment risk
An inherent risk of realising an investment is
the loss of a performing asset and a potential
lack of suitable new investments to replace
the lost income and capital growth. Prior
to reinvestment, returns on cash can be
significantly lower, which may reduce
underlying profitability on a short-term
basis until funds are reinvested. The Group
has an active Investment Department which
continues to receive a strong pipeline of new
investment opportunities. In addition, there
is often potential for further investment
within the Group’s existing portfolio.

Political risk
As a UK domiciled business, the Group is
exposed to the risks associated with the UK’s
decision to leave the European Union
(“Brexit”). The Board is continually
assessing the impact of Brexit on the
Group and its underlying investments,
however the direct impact on the Group’s
investment portfolio is not expected to be
material. It remains the Group’s intention
to continue to invest into the international
financial services market. As outlined under
‘Currency risk’ above, the Group continues
to monitor the movements in its foreign
currency denominated income and assets
and manages this risk accordingly.

Covid-19 risk
The Group is exposed to the risks associated
with the global coronavirus pandemic
(“Covid-19”). Since the outbreak of the
virus, the Board has been continually
assessing the potential impact of Covid-19
on the Group and its underlying investments.
The Group has taken all the steps that it can to
ensure that the health and safety of its staff,
their families and the Group’s associates is
prioritised, whilst also ensuring the continuity
of the Group’s day to day operations through
remote working arrangements. Since early
2022 our employees have returned to working
in the office on a near full-time basis.

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

the Group and its underlying investments.
Whilst the Group does not have any direct
investment in the affected region, the
impact on the wider global economy and
associated disruption to capital markets,
foreign exchange volatility, price inflation
and supply chain issues could affect both
the Group’s operations and those of its
investment portfolio, which could, in turn,
impact the future performance of the
Group. Refer to page 48 for further details
of the Directors’ assessment of the impact
of the conflict in Ukraine.

Further analysis of the Group’s sensitivity
to certain risks outlined above is set out in
Note 26 ‘Financial Risk Management’.

Environmental, Social and
Governance (“ESG”) Reporting

The Group is exempt from the requirements
of the Regulation 7, Part 2 – Amendments to
the Large and Medium-Sized Companies
and Groups (Accounts and Reports)
Regulations 2008, to report on its energy
and carbon consumptions.

ESG Statement
What we used to consider as Corporate
Social Responsibility has, in recent years,
evolved into Environmental, Social and
Governance (ESG) and we are pleased to
take the opportunity to bring this matter to
the forefront of the Company’s focus. In
December 2021 the Group established an
ESG Committee, chaired by Dan Topping,
the Group’s Chief Investment Officer, and
the Committee has since been engaged in
creating a roadmap for the Board to meet
its obligations in shaping a brighter future
for society, and the planet that we all share,
in line with its overall corporate strategy.

The Committee is in the process of
considering the next steps that will be
taken on B.P. Marsh’s ESG journey. As a
small team with a limited direct footprint,
we are acutely aware of the constraints of
our impact purely on a per capita basis.
Therefore, whilst we will continue to internally
implement measures to use fewer resources
to reduce our corporate environmental
impact and to encourage greater societal
good, we feel that our greatest tool in
targeting these goals is to act via who we
choose to partner with in terms of suppliers
and initiatives within our portfolio entities.
Accordingly, the Group is in the process
of conducting an audit into our existing
suppliers and partners, in order to identify
and prioritise businesses which align
themselves with our ESG values.

Whilst we are not in a position to give a full
report on the Company’s ESG initiatives and
targets and its plans to meet these within
this year’s report, we are enthusiastic about
the ongoing work that is being done in this
area and this is something that we look
forward to reporting on in further detail in
our annual report for the year ending
31 January 2023.

Directors’ duties under section 172

The purpose of this statement is to outline
how, during the year, the directors of the
Company had regard to the matters set
out in section 172(1) (a) to (f) of the Companies
Act 2006 when performing their duty under
section 172.

Under section 172(1):
a director of a company must act in the
way that he or she considers, in good faith,
would be most likely to promote the

B.P. Marsh • 2022 Annual Report • Group Strategic Report

success of the company for the benefit of
its members as a whole, and in doing so
have regard (amongst other matters) to:

a) the likely consequences of any decision

in the long term;

b) the interests of the company’s employees;
c) the need to foster the company’s

business relationships with suppliers,
customers and others;

d) the impact of the company’s operations
on the community and the environment;

e) the desirability of the company

maintaining a reputation for high
standards of business conduct; and

f) the need to act fairly towards all

members of the company.

In order to fulfil their duties under section 172,
and promote the success of the Group for
the benefit of all its stakeholders, the
directors need to ensure that the Group not
only acts in accordance with its legal duties
but also engages with, and has regard for,
all its stakeholders when taking decisions.
The Group has a number of key stakeholders
that it is committed to maintaining a strong
relationship with. Understanding the Group’s
stakeholders and how they and their interests
will impact on the strategy and success of
the Group over the long term is a key factor
in the decisions that the Board make.

Shareholders
The promotion of the success of the Group is
ultimately for the benefit of the Company’s
shareholders who provide the Company’s
permanent capital.

As a company listed on the Alternative
Investment Market, the Company is
responsible for ensuring that it is aware of
shareholder needs and expectations. The

Company attaches great importance to
maintaining good relationships with all of
its shareholders and interested parties and
seeks to ensure that they have access to
correct and adequate information in a
timely fashion.

The Company is aware that as stakeholders,
its shareholders play a vital role in the
fabric of the Company and therefore
regularly engages in dialogue with the
Company’s shareholders and is available
for meetings with institutional and major
shareholders following the release of the
Group’s Annual and Interim Results.

Much of the Company’s shareholder base
is comprised of small retail shareholders
holding shares through nominee accounts
and therefore the identities of the
underlying shareholders are not always
available to the Company. The Company
welcomes these and all shareholders to
make contact with the Company and
provide any feedback or comments that
they may have and contact details are
available on the Company’s website.

The Company’s Annual General Meeting is
also an important opportunity for retail
and institutional investors to meet and
engage with Directors, and ask questions
on the Company and its performance.

Employees
Our employees are key to the success of
the Group and recruiting, retaining and
developing our team is one of the Group’s
most important priorities. The Group
expects a high standard of integrity and
accountability from its employees. In return,
the Group rewards and incentivises its staff
on the basis of merit, ability and performance.

B.P. Marsh • 2022 Annual Report • Group Strategic Report

Group Strategic Report
continued

Employee engagement is a key factor of this
performance and the Group encourages
an open communication forum amongst all
members of staff, aided by the Group’s small
size and relatively flat hierarchical structure.

Informal oversight and engagement with
each investee company is carried out on
an ongoing basis by members of the
Investment Department in conjunction with
other department members.

The Group is committed to promoting
diversity in all its forms together with equal
opportunities and is a supportive employer,
providing training and development
where required.

The Group recognises that employee
wellbeing is also a fundamental element
in maintaining the success of the Group
and employees are provided with medical
insurance and the opportunity to have
annual well person screenings.

Response to the Covid-19 outbreak
The focus of the Group since the Covid-19
outbreak has been on keeping our employees
and their families safe. In accordance with
the government lockdown restrictions, all
employees worked from home when required
and were provided with the technology and
equipment to do so, where required.
Ensuring staff engagement and wellbeing
at this difficult time has been of particular
importance, and the Group ensured that
regular departmental calls and online
meetings continued to take place during
lockdown. Since early 2022 our employees
have returned to working in the office on a
near full-time basis.

Investee Companies
Engagement with the Group’s portfolio of
investee companies is critical to delivering the
Company’s long-term strategy of delivering
shareholder return. Whilst the Group does
not involve itself in the day-to-day operations
of its investee companies, it does retain
formal oversight by placing at least one
nominee director on each investee board.

Regulatory Bodies
Although the Company is not itself directly
regulated, it operates within a regulated
environment and therefore actively engages
with various regulatory bodies and advisory
firms to ensure that compliance standards
are maintained and that the Company
continues to act with the high standards
of business conduct that have established
its reputation thus far. The Company is
also a member of the British Venture
Capital Association.

Suppliers
The Company’s suppliers are integral to
the day to day operation of the Group.
Relationships with suppliers are carefully
managed to ensure that the Group is always
obtaining value for money. The Group
seeks to ensure that good relationships are
maintained with suppliers through regular
contact and the prompt payment of invoices.

Other stakeholders and the
wider community
The Company is committed to ensuring that
none of its activities have a detrimental
impact on the wider community and the
environment. The Group actively encourages
its employees to participate in charitable
work and community projects.

Decision making and section 172 of the
Companies Act 2006
The Group’s primary strategy is to deliver
shareholder value through the increase of its
Net Assets. The key driver of this growth is
the investment of the Group’s resources into
businesses with experienced management

B.P. Marsh • 2022 Annual Report • Group Strategic Report

teams that have excellent growth potential
to which the Group can offer its expertise
and add value. This objective was achieved
through growing the Net Asset Value from
£149.9m to £166.6m over the year.

During the year, the Group continued to fund
its existing portfolio of investee companies
through the provision of both follow-on equity
investment and loan funding. Historically the
Group has used funds from past realisations
and external fundraising to fund future
opportunities both within its current
portfolio and to new investments. During
the second half of the year the Group made
three successful realisations and it has
subsequently made a further realisation
post year end (refer to Note 25) which have
provided the Group with significant funds
to both repay its outstanding loan of £1.0m
with Brian Marsh Enterprises Limited (“BME”),
a company in which the Chairman, Mr. Brian
Marsh, is a director and sole shareholder, and
also finance future investment opportunities.
Following the Group’s repayment of the
BME loan during the year, the £3.0m loan
facility ended and no amounts were owed
at the year end (refer to Note 17).

Policy on Payment of Suppliers

The Group’s policy on the payment of
suppliers is to settle transactions based
upon the supplier’s agreed terms of trade.
Average supplier days were 39 (2021: 52)
during the year. There was an unusually
larger number of high value invoices at
31 January 2021 which skewed the prior
year figure. The Group has consistently
ensured that suppliers have been paid
within the agreed terms throughout the
year, such that the true number of supplier
days for 2021 was comparable with the
current year.

Going Concern

The directors continue to adopt the going
concern basis in preparing the financial
statements. This is because the directors,
after making enquiries and specifically
considering the implications of Covid-19 and
the Ukraine conflict, and following a review
of the Group’s forecasts for 2023 and 2024
including cash flows, consider that the
Group has adequate resources to continue
its operation for the foreseeable future.

Another key priority for the Group is to
ensure that shareholder expectations are
being met, not only through the growth in
the Group’s Net Asset Value, profitability
and share price, but through distributions.

By order of the Board

S.C. O’Haire
Chief Legal Officer &
Group Company Secretary
10 June 2022

The Group takes a responsible approach to
dividend distribution and has ensured that
its distribution policy strikes a balance
between rewarding loyal shareholders and
providing sufficient resources for the Group
to continue investing in growth
opportunities in financial services business
to continue its long-term success.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Independent
Auditor’s Report
to the Members of B.P. Marsh & Partners Plc

Opinion

Basis for Opinion

Our opinion on the financial statements
is unmodified
We have audited the Group financial
statements of B.P. Marsh & Partners Plc
(“the Parent Company” or “the Company”)
and its subsidiaries (“the Group”) for the
year ended 31 January 2022 which
comprise the Consolidated Statement of
Comprehensive Income, the Consolidated
and Parent Company Statements of
Financial Position, the Consolidated and
Parent Company Statements of Cash
Flows, the Consolidated and Parent
Company Statements of Changes in
Equity and the related notes.

The financial reporting framework that has
been applied in their preparation is
applicable law and UK-adopted
international accounting standards and, as
regards the Parent Company financial
statements, as applied in accordance with
the provisions of the Companies Act 2006.

In our opinion:

• the financial statements give a true and
fair view of the state of the Group’s and
of the Parent Company’s affairs as at
31 January 2022 and of the Group’s
profit for the year then ended;

• the Group financial statements have

been properly prepared in accordance
with UK-adopted international
accounting standards;

• the Parent Company financial

statements have been properly prepared
in accordance with UK-adopted
international accounting standards; and

• the financial statements have been
prepared in accordance with the
requirements of the Companies Act 2006.

We conducted our audit in accordance
with International Standards on Auditing
(UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under those standards
are further described in the Auditor’s
responsibilities for the audit of the financial
statements section of our report.

We are independent of the Group and the
Parent Company in accordance with the
ethical requirements that are relevant to
our audit of the financial statements in the
UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have
fulfilled our other ethical responsibilities
in accordance with these requirements.
We believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.

Conclusions Relating to
Going Concern

The directors have prepared the Group’s
and the Parent Company’s financial
statements on the going concern basis as
they have concluded that there are no
material uncertainties that could have cast
significant doubt over the Group’s and the
Parent Company’s ability to continue as a
going concern for at least one year from
the date of the approval of the Group’s and
the Parent Company’s financial statements
(“the going concern period”).

Our responsibility is to conclude on the
appropriateness of the directors’ conclusions
and, had there been a material uncertainty
related to going concern, to make reference
to that in this auditor’s report.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Our evaluation of the directors’ assessment
of the Group’s and the Parent Company’s
ability to continue to adopt the going
concern basis of accounting included:

However, because not all future events or
conditions can be predicted, this conclusion
is not a guarantee as to the Group’s and
the Parent Company’s ability to continue
as a going concern.

• obtaining the directors’ going concern

assessment and the forecasts they have
prepared for each of the two years to
31 January 2024 which predict profit and
positive cashflows and challenging the
rationale for assumptions used in the
preparation of these forecasts;

• considering the impact of Covid-19 and
the Ukraine conflict on the directors’
assessment to continue to adopt the
going concern basis of accounting; and

• considering the inherent risks to the
Group and the Parent Company’s
business model and how these risks
might affect the Group’s and the Parent
Company’s financial resources or ability
to continue operations over the going
concern period. We evaluated these risks
and concluded that they were not
significant enough to require us to
perform additional procedures.

Based on the work we have performed, we
have not identified any material uncertainties
relating to events or conditions that,
individually or collectively, may cast
significant doubt on the Group’s and the
Parent Company’s ability to continue as a
going concern for a period of at least twelve
months from when the Group financial
statements are authorised for issue.

In auditing the financial statements, we
have concluded that the directors’ use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate.

Our responsibilities and the responsibilities
of the directors with respect to going
concern are described in the relevant
sections of this report.

Key Audit Matters

Key audit matters are those matters that,
in our professional judgment, were of most
significance in our audit of the financial
statements of the current period and
include the most significant assessed risks
of material misstatement (whether or not
due to fraud) we identified, including those
which had the greatest effect on: the overall
audit strategy, the allocation of resources
in the audit and directing the efforts of the
engagement team.

These matters were addressed in the context
of our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion
on these matters.

Risk 1: Valuation of unquoted
equity investments
Refer to the significant accounting policies
(pages 72 to 78); and Notes 1 and 12 of the
financial statements.

The equity investment portfolio comprises
Level 3 instruments in unquoted legal
entities. In both the Group and the Parent
Company’s Statements of Financial Position
these are shown under Non-Current Assets,
unless the investments are held for resale,
in which case they are shown under
Current Assets.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Independent
Auditor’s Report
continued

The Group adopts various valuation
methodologies based on the International
Private Equity and Venture Capital Valuation
Guidelines – December 2018 (‘IPEVCV
Guidelines’), in conformity with International
Financial Reporting Standard (“IFRS”) 13
– Fair Value Measurement. Owing to the
unquoted and illiquid nature of these
investments, the assessment of fair valuation
is subjective and requires a number of
significant and complex judgments to be
made by the Valuation Committee. The exit
value will be determined by the market at the
time of realisation and therefore despite the
valuation policy adopted and judgments
made by the Valuation Committee, the final
sales value on realisation may differ
materially from the valuation at the year
end date.

There is the risk that inaccurate judgments
made in the assessment of fair value,
particularly in respect of earnings multiples,
the application of liquidity discounts,
calculation of discount rates and the
estimation of future maintainable earnings,
could lead to the incorrect valuation of the
unquoted equity investment portfolio. In turn,
this could materially misstate the value of
the investment portfolio in the Statement of
Financial Position, the gross investment
return and total return in the Consolidated
Statement of Comprehensive Income and
the net asset value per share.

There is also the risk that management and
the Valuation Committee may influence
the significant judgments and estimations
in respect of unquoted equity investment
valuations in order to meet market
expectations of the overall net asset value
of the Group.

How we address the Key Audit Matters
We performed the following procedures:

We obtained an understanding of the
Valuation Committee’s processes and
controls for determining the fair valuation of
unquoted equity investments by performing
walkthrough procedures. This included
discussing with management and the
Valuation Committee the valuation
governance structure and protocols around
their oversight of the valuation process and
corroborating our understanding by
obtaining the detailed minutes for the
Valuation Committee meetings. We have
identified key controls in the process,
assessed the design adequacy and tested
the operating effectiveness of those controls.

We compared the Valuation Committee’s
valuation methodology to IFRS and the
IPEVCV Guidelines. We sought explanations
from management and the Valuation
Committee where there were judgments
applied in their application of the guidelines
and assessed their appropriateness.

Using our knowledge of private company
valuation methodologies, historical
valuations and specific research guidance
from brokers where available, we formed an
independent range for the key assumptions
used in the valuation of a sample of
unquoted investments. We derived a range
of fair values using our assumptions and
other qualitative risk factors. We compared
these ranges to management’s fair values
and discussed our results with the
Valuation Committee.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Key observations communicated to the
Audit Committee:
The valuation of the unquoted equity
investment portfolio was determined to be
within a reasonable range of fair values.
All valuations tested have been recognised
in accordance with IFRS and the IPEVCV
Guidelines. Appropriate inputs to the
valuations were used and the valuations
calculated by the Valuation Committee are
within a reasonable range. Based on our
procedures and discussion of certain
matters with the Audit Committee, there
were no material outstanding matters.

Risk 2: Recognition of portfolio income
and of realised profits on disposal
of investments
Refer to the significant accounting policies
(pages 72 to 78); and Notes 1, 12 and 13 of
the financial statements

Portfolio income is directly attributable to
the return from investments. This includes:
dividends from investee companies which
are recognised when the Group’s rights to
receive payments have been established,
gross interest income from loans which is
recognised on an accruals basis and
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.

Realised profits originate from disposals of
investments. Realised profits are calculated
as the difference between the net proceeds
and the investment’s fair value at the
beginning of the year.

With respect to unquoted investments, on a
sample basis, we corroborated key inputs
in the valuation models, such as earnings
and net debt to source data. We also
performed the following procedures on key
judgments made by the Valuation Committee
in the calculation of fair value:
• assessed the suitability of the

comparable companies used in the
calculation of the earnings multiples;

• challenged management on the

applicability of adjustments made to
earnings multiples and obtained
rationale and supporting evidence for
adjustments made;

• performed corroborative calculations to
assess the appropriateness of discount
rates; and

• discussed the adjustments made to

calculate future maintainable earnings
and corroborated this to supporting
documentation.

On a sample basis, we verified the
valuation of unquoted investments using
market data on acquisition multiples and
other data from third party pricing sources
used by the Valuation Committee in the
calculation of fair value.

We checked the mathematical accuracy of
the valuation models on a sample basis.
We reperformed the calculation of the
unrealised profits on the revaluation of
investments impacting the Consolidated
Statement of Comprehensive Income.

We discussed with the Valuation Committee
the rationale for any differences between
the exit prices of investments realised
during the year and the prior year fair
value, to further assess the reasonableness
of the current year valuation assumptions
and methodology adopted by the
Valuation Committee.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Independent
Auditor’s Report
continued

Market expectations and revenue-based
targets may place pressure on management
to influence the recognition of portfolio
income or realised gains. This may result in
overstatement or deferral of revenues to
assist in meeting current or future targets
or expectations.

How we address the Key Audit Matters
We performed the following procedures:

We obtained an understanding of
management’s processes and controls
around accounting for portfolio income
and realised gains by discussing with the
management team and observations
during the audit fieldwork to substantiate
the processes and controls.

We performed detailed testing on a sample
of transactions to confirm whether they
had been appropriately recorded in the
Consolidated Statement of
Comprehensive Income.

For portfolio income, on a sample basis, we:
• agreed dividends from the underlying

investment agreements and the dividend
notices where available;

• reperformed the calculation of interest

income based on the terms of the
underlying agreements;

• agreed advisory fees to the relevant
investment advisory agreements; and
• agreed the receipts of the income to the
bank statements, or, if not yet received at
the year end, agreed to the debtors or
accrued income and assessed the
recoverability of these debtors or
accrued income.

For any realised gains on disposals, on a
sample basis we would typically have:
• analysed the contract and terms of the

sale to determine whether the Group had
met the stipulated requirements,
confirming that the net proceeds and
therefore the realised profit over opening
value could be reliably measured;

• re-performed management’s calculations
to determine mathematical accuracy
and confirmed the collection of the net
proceeds by agreeing the cash receipt to
bank statements; and

• assessed the recoverability if the related
income had not been received by the
due date.

For all samples selected for testing we
verified that revenue is recognised when
the significant risks and rewards of
ownership have been transferred.

We performed enquiries of management
and read minutes of meetings throughout
the year and subsequent to the year end in
order to address the risk of management
override of controls to defer revenue
recognition or over accrue revenue.

Key observations communicated to the
Audit Committee
Our audit procedures did not identify any
material matters regarding the recognition
of portfolio income and of realised profits
on disposal of investments. All transactions
tested had been recognised in accordance
with contractual terms and UK-adopted
international accounting standards. Based
on our procedures and discussion of certain
matters with the Audit Committee, there
were no material outstanding matters.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Our Application of Materiality

We apply the concept of materiality in
planning and performing the audit, in
evaluating the effect of identified
misstatements on the audit and in forming
our audit opinion.

Materiality
Materiality is defined as the magnitude of
an omission or misstatement that, individually
or in the aggregate, could reasonably be
expected to influence the economic decisions
of the users of the financial statements.
Materiality provides a basis for determining
the nature and extent of our audit procedures.

We determined materiality for the Group and
the Parent Company to be £1,600,000
(2021: £1,500,000) for unrealised investment
related items, which is 1% of net assets. We
believe that net assets provide us with a
consistent year on year basis for determining
materiality and is the most relevant measure
to the stakeholders of the Group.

However, due to the much lower net
comprehensive income generated each
year in comparison with the level of net
assets, we have set a lower materiality of
£160,000 (2021: £90,000) for the Group
and for the Parent Company for realised
comprehensive income and amortised cost
balance sheet items which represents
approximately 2% of realised income.

We believe that the above basis provides us
with a consistent year on year basis for
determining materiality and is the most
relevant measure to the stakeholders of the
Group and the Parent Company.

We calculated materiality during the
planning stage of the audit based on the
management accounts provided to us
which exclude the investment valuation at
the year end, and then reassessed it based on
the 31 January 2022 revised management
accounts updated with the investment
valuation at the year end on the basis set
out above and adjusted our audit
procedures accordingly.

Performance materiality
Performance materiality is the application
of materiality at the individual account or
balance level. It is set at an amount to
reduce to an appropriately low level the
probability that the aggregate of
uncorrected and undetected misstatements
exceeds materiality.

On the basis of our risk assessments,
together with our assessment of the
Group’s overall control environment, our
judgment was that performance materiality
was 75% (2021: 75%) of our planning
materiality, namely £1,200,000 (2021:
£1,125,000) for unrealised investment
related items and £120,000 (2021: £68,000)
for realised comprehensive income and
amortised cost balance sheet items. This is
at the top end of the range of 50% and
75% typically used. In arriving at the top
range of 75%, we considered the judgmental
nature of the valuations in the Consolidated
Statement of Financial Position and the
relative value of transactions recorded in
the other primary statements, to ensure
that total uncorrected and undetected
audit differences in all accounts did not
exceed our materiality of £1,600,000 for
unrealised investment related items and
£160,000 for comprehensive income and
amortised cost balance sheet items.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Independent
Independent
Auditor’s Report
Auditor’s Report
continued
continued

Reporting threshold
Our reporting threshold is defined as
an amount below which identified
misstatements are considered as being
clearly trivial.

The full scope components accounted for
100% of the investment portfolio and 100%
of each of profit before tax, external
revenue and of total assets (all measures
used to calculate materiality).

We agreed with the Audit Committee that
we would report to them all uncorrected
audit differences in excess of £80,000
(2021: £75,000) for unrealised investment
related items and £8,000 (2021: £4,500)
for realised comprehensive income and
amortised cost balance sheet items, which
is set at approximately 5% of planning
materiality, as well as differences below
that threshold that, in our view, warranted
reporting on qualitative grounds.

Whilst materiality for the Group financial
statements as a whole was set out as
detailed in this report, each component of
the Group was audited to an equal or lower
level of materiality.

Audits of the components were performed
at a materiality level calculated by reference
to a proportion of Group materiality
appropriate to the relative scale of the
business concerned.

We evaluate any uncorrected misstatements
against both the quantitative measures of
materiality discussed above and in light of
other relevant qualitative considerations in
forming our opinion.

An Overview of the Scope
of our Audit

Our Group audit was scoped by obtaining
an understanding of the Group and its
environment, including Group-wide controls,
and assessing the risks of material
misstatement at the Group level.

We performed an audit of the complete
financial information of 4 (2021: 4) full
scope components.

The Group comprises three consolidated
subsidiaries and two investment entity
subsidiaries. Monitoring and control over
the operations of these subsidiaries,
including those located overseas, is
centralised in London.

Other Information

The directors are responsible for the other
information. The other information comprises
the information included in the annual
report, other than the financial statements
and our auditor’s report thereon. Our
opinion on the financial statements does
not cover the other information and, except
to the extent otherwise explicitly stated in
our report, we do not express any form of
assurance conclusion thereon.

In connection with our audit of the financial
statements, our responsibility is to read the
other information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the audit or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to determine
whether there is a material misstatement
in the financial statements or a material

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

misstatement of the other information.
If, based on the work we have performed,
we conclude that there is a material
misstatement of this other information, we
are required to report that fact. We have
nothing to report in this regard.

Opinions on Other Matters
Prescribed by the Companies
Act 2006

In our opinion, based on the work undertaken
in the course of the audit:
• the information given in the Group

Strategic Report and the Group Report of
the Directors for the financial year for which
the financial statements are prepared is
consistent with the financial statements;
• the Group Strategic Report and the Group
Report of the Directors have been prepared
in accordance with applicable legal
requirements; and

• the part of the Report of the Remuneration
Committee required to be audited by us
has been properly prepared in accordance
with the Companies Act 2006.

Matters on which we are required
to Report by Exception

In the light of the knowledge and
understanding of the Group and the Parent
Company and its environment obtained in
the course of the audit, we have not identified
material misstatements in the Group Strategic
Report or the Group Report of the Directors.

We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report
to you if, in our opinion:

• adequate accounting records have not
been kept by the Parent Company, or
returns adequate for our audit have not
been received from branches not visited
by us; or

• the Parent Company financial statements
and the part of the Directors’ Remuneration
Report to be audited are not in agreement
with the accounting records and returns; or

• certain disclosures of directors’

remuneration specified by law are not
made; or

• we have not received all the information

and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the directors’
responsibilities statement, the directors are
responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and for
such internal control as the directors
determine is necessary to enable the
preparation of financial statements that
are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the
directors are responsible for assessing the
Group’s and the Parent Company’s ability
to continue as a going concern, disclosing,
as applicable, matters related to going
concern and using the going concern basis
of accounting unless the directors either
intend to liquidate the Group or the Parent
Company or to cease operations, or have
no realistic alternative but to do so.

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

Auditor’s Responsibilities for the
Audit of the Financial Statements

Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable
assurance is a high level of assurance but
is not a guarantee that an audit conducted
in accordance with ISAs (UK) will always
detect a material misstatement when it
exists. Misstatements can arise from fraud
or error and are considered material if,
individually or in the aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on the
basis of these financial statements.

Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in respect of
irregularities, including fraud. The extent
to which our procedures are capable of
detecting irregularities, including fraud, is
detailed below.

Based on our understanding of the Group
and the industry, we identified that the
principal risks of non-compliance with laws
and regulations related to breaches of UK
regulations. We considered the extent to
which non-compliance might have a material
effect on the financial statements. We also
considered those laws and regulations that
have a direct impact on the preparation

of the financial statements such as the
Companies Act 2006. We evaluated
management’s incentives and opportunities
for fraudulent manipulation of the financial
statements (including the risk of override of
controls), and determined that the principal
risks were related to posting inappropriate
journal entries to inflate revenue of the Group
and the Parent Company, and management
bias in accounting estimates and judgemental
areas of the financial statements, such as
investment valuations and provisions. Audit
procedures performed by us included:
• discussing with the directors and

management involved in the risk and
compliance functions and the Group and
Parent Company’s company secretary
function, including consideration of known
or suspected instances of non-compliance
with laws and regulation and fraud;
• reviewing correspondence between the
Group and the investee companies,
and discussions with the management
responsible for liaising with the investee
companies in relation to the investee
companies’ compliance with laws
and regulations;

• reviewing board minutes as well as relevant
meeting minutes, including those of the
Valuation Committee, Audit Committee
and the Disclosure Committee;
• challenging assumptions made by

management in arriving at accounting
estimates and judgements, in particular
in relation to the valuation of unquoted
equity investments and recognition of
portfolio income as described in the
related key audit matters above;

B.P. Marsh • 2022 Annual Report • Independent Auditor’s Report

• identifying and testing journal entries,

in particular, any journal entries posted
with unusual account combinations,
such as a credit to revenue and a debit
to the statement of financial position
(other than to expected accounts), which
may be indicative of the overstatement
or manipulation of revenue; and

• designing audit procedures to incorporate
unpredictability around the nature, timing
or extent of our testing.

Because of the inherent limitations of an
audit and the audit procedures described
above, there is an unavoidable risk that we
will not have detected all irregularities,
including some leading to material
misstatements in the financial statements,
even though we have properly planned and
performed our audit in accordance with
auditing standards. For example, the further
removed non-compliance with laws and
regulations (irregularities) is from the events
and transactions reflected in the financial
statements, the less likely the inherently
limited procedures required by auditing
standards would identify it. In addition, as
with any audit, there remains a higher risk of
non-detection of irregularities occurring due
to fraud rather than error, as fraud involves
intentional concealment, collusion, forgery,
intentional omissions, misrepresentations, or
the override of internal controls. We are not
responsible for preventing non-compliance
and cannot be expected to detect non-
compliance with all laws and regulations.

A further description of our responsibilities
for the audit of the financial statements
is located on the Financial Reporting
Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description
forms part of our auditor’s report.

Use of our Report

This report is made solely to the Company’s
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken
so that we might state to the Company’s
members those matters we are required to
state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Company and the Company’s members as
a body, for our audit work, for this report,
or for the opinions we have formed.

Kulwarn Nagra
(Senior Statutory Auditor)
For and on behalf of

Rawlinson & Hunter Audit LLP
Statutory Auditor
Chartered Accountants
Eighth Floor
6 New Street Square
New Fetter Lane
London
EC4A 3AQ

10 June 2022

B.P. Marsh • 2022 Annual Report • Consolidated Statement of Comprehensive Income

Consolidated Statement
of Comprehensive Income
for the year ended 31 January 2022

Gains on investments

Realised gains on disposal of equity investments
(net of costs)

Release of provision made against equity
investments and loans

Unrealised gains on equity investment revaluation

Income

Dividends

Income from loans and receivables

Fees receivable

Operating income

Operating expenses

Operating profit

Financial income

Financial expenses

Exchange movements

Profit on ordinary activities before taxation

Income taxes

Profit on ordinary activities after taxation
attributable to equity holders

Total comprehensive income for the year

Earnings per share – basic (pence)

Earnings per share – diluted (pence)

14,15

1,24

2,4

2,3

2,8

Notes

£’000

2022

£’000

2021

£’000

–

12,877

2,938

1,117

16,204

1,903

1,092

1,082

20,259

12,914

1,999

1,271

1,234

4,077

24,336

(4,770)

(3,595)

(67)

(24)

–

(78)

(93)

(4,770)

19,566

(171)

19,395

(1,911)

£17,484

48.6p

47.3p

4,504

17,418

(3,595)

13,823

(88)

13,735

(14)

£13,721

38.2p

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

The notes on pages 72 to 108 form
part of these financial statements.

B.P. Marsh • 2022 Annual Report • Consolidated and Parent Company Statements of Financial Position

Consolidated and Parent
Company Statements
of Financial Position
31 January 2022

Assets

Non-Current Assets

Property, plant and equipment

Right-of-use asset

Investments – equity portfolio

Investments – subsidiaries

Loans and receivables

Current Assets

Investments – Assets held for sale

Trade and other receivables

Cash and cash equivalents

Total Current Assets

Total Assets

Liabilities

Non-Current Liabilities

Lease liabilities

Deferred tax liabilities

Total Non-Current Liabilities

Current Liabilities

Trade and other payables

Lease liabilities

Loans and other payables

Total Current Liabilities

Total Liabilities

Net Assets

Capital And Reserves – Equity

Called up share capital

Share premium account

Fair value reserve

Reverse acquisition reserve

Capital redemption reserve

Capital contribution reserve

Retained earnings

Shareholders’ Funds – Equity

Net asset value per share – undiluted (pence)

Net asset value per share – diluted (pence)

Notes

2022

£’000

Group

2021

£’000

Company

2022

£’000

2021

£’000

836

123

1,001

–

141,245

130,951

134,490

122,748

–

7,231

–

15,833

32,187

4,106

27,277

4,058

149,408

147,908

170,783

154,083

8,104

4,974

8,628

21,706

171,114

(772)

(1,898)

(2,670)

(1,670)

(167)

–

(1,837)

(4,507)

–

4,398

709

5,107

–

153,015

170,791

154,091

(939)

–

(939)

(1,010)

(159)

(1,000)

(2,169)

(3,108)

–

£166,607

£149,907

£170,791

£154,091

3,747

29,342

84,975

393

3,747

29,349

70,573

393

3,747

29,342

3,747

29,349

132,347

120,605

–

48,071

45,774

5,348

383

£166,607

£149,907

£170,791

£154,091

462.7p

455.6p

416.4p

455.9p

411.3p

The Financial Statements were approved by the Board of Directors and authorised for
issue on 10 June 2022 and signed on its behalf by:

B.P. Marsh & J.S. Newman

The notes on pages 72 to 108 form
part of these financial statements.

B.P. Marsh • 2022 Annual Report • Consolidated Statement of Cash Flows

Consolidated Statement
of Cash Flows
for the year ended 31 January 2022

Cash from / (used by) operating activities

Income from loans to investee companies

Dividends

Fees received

Operating expenses

Net corporation tax (paid) / repaid

Purchase of equity investments

Net proceeds from sale of equity investments

Net repayment of loans from investee companies

Adjustment for non-cash share incentive plan

Exchange movement

Decrease / (increase) in receivables

Increase in payables

Depreciation and amortisation

Net cash from / (used by) operating activities

Net cash used by investing activities

Purchase of property, plant and equipment

Net cash used by investing activities

Net cash used by financing activities

(Repayment) / advances of borrowings

Financial income

Financial expenses

Net decrease in lease liabilities

Dividends paid

Net cash used by financing activities

Change in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of year

Notes

12,13

11,20

2022

£’000

1,092

1,903

1,082

(4,770)

(13)

(8,011)

8,755

7,837

(35)

1,248

660

198

10,040

(6)

2021

£’000

1,271

1,999

1,234

(3,595)

234

(2,408)

–

1,796

114

(81)

(954)

134

205

(51)

(5)

(1,000)

1,000

–

(78)

(159)

(878)

(2,115)

7,919

709

£8,628

(67)

(160)

(798)

(22)

(78)

787

£709

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 notes on pages 72 to 108 form
part of these financial statements.

B.P. Marsh • 2022 Annual Report • Parent Company Statement of Cash Flows

Parent Company Statement
of Cash Flows
for the year ended 31 January 2022

Cash from operating activities

Dividends received from subsidiary undertakings

Net cash from operating activities

Net cash used by financing activities

(Increase) / decrease in amounts owed by group undertakings

Adjustment relating to non-cash items

Dividends paid

Net cash used by financing activities

Change in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of year

Notes

2022

£’000

5,750

(4,910)

(878)

(5,750)

–

£8

2021

£’000

798

(5)

(798)

–

£8

Consolidated and Parent
Company Statements
of Changes in Equity
for the year ended 31 January 2022

Opening total equity

Comprehensive income for the year

Dividends paid

Share incentive plan

Total Equity

2022

£’000

149,907

17,484

(878)

Group

2021

£’000

136,870

13,721

(798)

114

2022

£’000

154,091

17,492

(878)

Company

2021

£’000

141,054

13,743

(798)

£166,607

£149,907

£170,791

£154,091

Refer to Note 19 for detailed analysis of the changes in the components of equity.

The notes on pages 72 to 108 form
part of these financial statements.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
for the year ended 31 January 2022

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 5 Floor, 4 Matthew Parker Street, London
SW1H 9NP. The consolidated financial statements for the year ended 31 January 2022 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 UK-adopted international accounting
standards, 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 UK-adopted international accounting standards 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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

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,
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, the 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, Marsh Insurance Holdings
Limited and B.P. Marsh (North America) Limited continue to be consolidated into its Group financial statements for the year.

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

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

New Accounting Standards
There are no new standards that have been issued, but are not yet effective for the year ended 31 January 2022, which might
have a material impact on the Group’s financial statements in future periods.

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 • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

1. Accounting Policies continued

Basis of consolidation continued
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.

(ii) 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 Consolidated 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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

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 £17,491,719, prior to a dividend distribution of £878,282 (2021: profit of
£13,743,101 prior to a dividend distribution of £798,353).

Employee services settled in equity instruments
The Group has entered into a joint share ownership plan (“JSOP”) with certain employees and directors. A fair value for the cash
settled share awards is measured at the date of grant. The Group measured the fair value using the Expected Return Methodology
which was considered to be the most appropriate valuation technique to value the awards.

The fair value of the award has been recognised as an expense over the vesting period on a straight-line basis. The level of vesting
was assumed to be 100% and has been reviewed annually and the charge has been adjusted to reflect actual or estimated levels
of vesting with the corresponding entry to capital contribution.

On 12 June 2021 (the “vesting date”) the performance criteria were met, after which the members of the scheme became joint
beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6 pence per
share. Whilst these shares remain within the Employee Benefit Trust they do not have voting or dividend rights. However, if the
shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to
receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would
become fully dilutive for the Group. Whilst 254,414 shares out of 1,461,302 held within the Employee Benefit Trust have been
forfeited by departing employees, the trust remains the owner of these shares.

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. In addition, new shares were issued and allocated to the SIP
Trust during the year.

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 (“IPEVCV 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:

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

1. Accounting Policies continued

Investments – equity portfolio continued
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 an
‘Investments – Assets 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.

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

Right-of-use asset
IFRS 16 requires lessees to recognise a lease liability, representing the present value of the obligation to make lease payments,
and a related right of use (“ROU”) asset. The lease liability is calculated based on expected future lease payments, discounted
using the relevant incremental borrowing rate. An incremental borrowing rate of 5% was used to discount the future lease
payments when measuring the lease liability on adoption of IFRS 16.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

The ROU asset is recognised at cost less accumulated depreciation and impairment losses, with depreciation charged on a
straight-line basis over the life of the lease. In determining the value of the ROU asset and lease liabilities, the Group considers
whether any leases contain lease extensions or termination options that the Group is reasonably certain to exercise.

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

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 credit or expense represents the sum of the tax currently recoverable or payable and any deferred tax. The tax currently
recoverable or 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 receivable or 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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

1. Accounting Policies continued

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.

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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

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.

Operating income

Operating expenses

Segment operating profit

Financial income

Financial expenses

Exchange movements

Profit before tax

Income taxes

Profit for the year

Geographic segment 1:
UK

Geographic segment 2:
Non-UK

2022

£’000

6,844

(2,242)

4,602

–

(37)

(40)

4,525

–

2021

£’000

6,892

(2,122)

4,770

(40)

(57)

4,675

–

2022

£’000

17,492

(2,528)

14,964

–

(41)

(53)

14,870

(1,911)

£4,525

£4,675

£12,959

2021

£’000

10,526

(1,473)

9,053

(27)

9,060

(14)

£9,046

2022

£’000

24,336

(4,770)

19,566

–

(78)

(93)

19,395

(1,911)

£17,484

Group

2021

£’000

17,418

(3,595)

13,823

(67)

(24)

13,735

(14)

£13,721

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 and unrealised income generated by the Group during the period:

Investee Company

Kentro Capital Limited

XPT Group LLC

Stewart Specialty Risk Underwriting Limited

ATC Insurance Solutions PTY Limited1

Walsingham Motor Insurance Limited1

The Fiducia MGA Company Limited1

Total net operating income
attributable to the
investee company
£’000

2022

7,755

6,342

2,758

2,604

2,529

–

2021

1,755

2,497

3,227

–

1,824

% of total realised and
unrealised operating income

Reportable
geographic segment

2022

2021

2022

2021

–

1 There are no disclosures for The Fiducia MGA Company Limited in the current year as the income derived from this investee company did not exceed the 10% threshold

prescribed by IFRS 8. There are also no disclosures shown for ATC Insurance Solutions PTY Limited and Walsingham Motor Insurance Limited in the prior year as the income
derived from these investee companies did not exceed the 10% threshold prescribed by IFRS 8 in that year.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

2. Segmental Reporting continued

Geographic segment 1:
UK

Geographic segment 2:
Non-UK

Non-current assets

Property, plant and equipment

Right-of-use asset

Investments – equity portfolio

Loans and receivables

Current assets

Investments – Assets held for sale

Trade and other receivables

Cash and cash equivalents

2022

£’000

567

93,161

5,633

99,426

–

2,770

8,628

11,398

2021

£’000

680

88,959

12,776

102,499

–

2,528

709

3,237

Total assets

110,824

105,736

2022

£’000

269

48,084

1,598

49,982

8,104

2,204

–

10,308

60,290

(249)

(1,898)

(2,147)

(3)

(54)

–

(57)

2021

£’000

321

41,992

3,057

45,409

–

1,870

–

1,870

47,279

(301)

–

(301)

(3)

(51)

–

(54)

(355)

2022

£’000

836

141,245

7,231

149,408

8,104

4,974

8,628

21,706

171,114

(772)

(1,898)

(2,670)

(1,670)

(167)

–

(1,837)

(4,507)

Group

2021

£’000

123

1,001

130,951

15,833

147,908

–

4,398

709

5,107

153,015

(939)

–

(939)

(1,010)

(159)

(1,000)

(2,169)

(3,108)

(523)

–

(523)

(1,667)

(113)

–

(1,780)

(2,303)

(638)

–

(638)

(1,007)

(108)

(1,000)

(2,115)

(2,753)

(2,204)

Non-current liabilities

Lease liabilities

Deferred tax liabilities

Current liabilities

Trade and other payables

Lease liabilities

Loans and other payables

Total liabilities

Net assets

£108,521

£102,983

£58,086

£46,924

£166,607

£149,907

Additions to property, plant and equipment

Depreciation and amortisation of property, plant and
equipment

Release of provision against investments and loans

Cash flow arising from:

Operating activities

Investing activities

Financing activities

Change in cash and cash equivalents

(134)

–

8,178

(6)

(2,115)

6,057

(138)

(4)

(5)

(22)

(31)

(64)

1,117

1,862

–

1,862

(66)

–

(47)

–

(47)

(198)

1,117

10,040

(6)

(2,115)

7,919

(204)

(51)

(5)

(22)

(78)

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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

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 2022 and 2021 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:

Non-UK

Total

3. Financial Expenses

Interest costs on loans and other payables (Note 17)

Interest costs on lease liability (Note 20)

4. Financial Income

Bank and similar interest

5. Staff Costs

2022

£100

2022

£’000

£78

2022

£’000

–

£ –

2021

£100

2021

£’000

£67

2021

£’000

£3

The average number of employees, including all directors (executive and non-executive), employed by the Group during the
year was 16 (2021: 16); 6 of those are in a management role (2021: 6) and 10 of those are in a support role (2021: 10). All
remuneration was paid by B.P. Marsh & Company Limited.

The related staff costs were:

Wages and salaries

Social security costs

Pension costs

Other employment costs (Note 23)

2022

£’000

2,992

418

148

2021

£’000

2,083

300

129

£3,634

£2,608

During the year to 31 January 2017 the Group 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 the Report of the Remuneration Committee on page 36 and Note 23 for
further details.

During the year to 31 January 2019, Joint Share Ownership Agreements were also entered into between certain directors and
employees and the Company. Refer to the Report of the Remuneration Committee on page 35 and Note 23 for further details.

Charges of £68,070 (2021: £74,467) relating to the SIP and £7,685 (2021: £21,472) relating to the Joint Share Ownership
Agreements are included within ‘Other employment costs’ above.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

6. Directors’ Emoluments

The aggregate emoluments of the directors were:

Management services – remuneration

Fees

Pension contributions – remuneration

2022

£’000

1,717

2021

£’000

1,228

£1,803

£1,310

502,395 of the 1,461,302 shares, in respect of which joint interests were granted during the year to 31 January 2019, were issued
to current directors. Refer to the Report of the Remuneration Committee on page 35 and Note 23 for further details.

Of the total 31,210 (2021: 47,044) Free, Matching and Partnership Shares granted under the SIP during the year, 9,363 (2021: 13,515)
were granted to directors of the Company.

Of the £7,685 (2021: £21,472) charge relating to the Joint Share Ownership Plan and the £68,070 (2021: £74,467) charge relating
to the SIP, £2,643 (2021: £7,382) and £20,421 (2021: £20,309) related to the directors respectively.

Refer to the Report of the Remuneration Committee on pages 35 and 36 and Note 23 for further details.

Highest paid director

Emoluments

Pension contribution

2022

£’000

486

£510

2021

£’000

327

£350

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, 3 directors (2021: 3) accrued benefits under these defined contribution pension schemes.

The key management personnel comprise only the directors.

7. Dividends

Ordinary dividends

Dividend paid:

2.44 pence each on 35,995,156 Ordinary shares (2021: 2.22 pence each on 35,961,836 Ordinary shares)

2022

£’000

878

£878

2021

£’000

798

£798

In the current year a total dividend of £5,752 (2021: £4,519) was payable on the 235,719 (2021: 203,573) ordinary shares held by
the B.P. Marsh SIP Trust (“SIP Trust”).

No dividend was payable on the 1,461,302 (2021: 1,461,302) ordinary shares held by the B.P. Marsh Employees’ Share Trust (“Share
Trust”) under the Joint Share Ownership Plan and on 9,542 ordinary shares held in Treasury which were unallocated at the dividend
record date (2021: 42,862).

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

8. Profit on Ordinary Activities Before Taxation

The profit for the year is arrived at after charging:

Depreciation and amortisation of property, plant & equipment, and right-of-use asset

Auditor’s remuneration :-

Audit fees for the Company

Other services:

Audit of subsidiaries’ accounts

Taxation

Other advisory

Exchange loss

9. Income Tax Expense

Current tax:

Current tax on profits for the year

Adjustments in respect of prior years

Total current tax

Deferred tax (Note 16):

Origination and reversal of temporary differences

Total deferred tax

Total income taxes charged in the Consolidated Statement of Comprehensive Income

2022

£’000

198

2021

£’000

204

2022

£’000

2021

£’000

–

1,898

£1,911

–

£14

The tax assessed for the year is lower (2021: lower) than the standard rate of corporation tax in the UK. The differences are
explained below:

Profit before tax

Profit on ordinary activities at the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)

Tax effects of:

Expenses not deductible for tax purposes

Withholding tax suffered at source on overseas income

Non-taxable capital gains on disposal of investments

Other effects:

Non-taxable income (dividends received)

Non-taxable income (unrealised gains on equity portfolio revaluation)

Management expenses unutilised

Total income taxes charged in the Consolidated Statement of Comprehensive Income

There are no factors which may affect future tax charges.

2022

£’000

19,395

3,685

(518)

(362)

(1,181)

252

£1,911

2021

£’000

13,735

2,610

–

(380)

(2,447)

188

£14

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

10. Earnings per Share from Continuing Operations Attributable to the Equity Shareholders and Net

Asset Value per Share

Earnings

Earnings for the purpose of basic and diluted earnings per share being total comprehensive income attributable to equity
shareholders

Earnings per share – basic

Earnings per share – diluted

Number of shares

Weighted average number of ordinary shares for the purposes of basic earnings per share

Number of dilutive shares under option

Weighted average number of ordinary shares for the purposes of dilutive earnings per share

No share repurchases were undertaken during both the current and prior year.

Ordinary shares held by the Company in Treasury
Movement of ordinary shares held in Treasury:

Opening total ordinary shares held in Treasury at 1 February

Ordinary shares transferred to the B.P. Marsh SIP Trust during the year

Total ordinary shares held in Treasury at 31 January

2022

£’000

17,484

48.6p

47.3p

2021

£’000

13,721

38.2p

Number

35,988,766

35,948,587

1,461,302

Nil

36,925,601

35,948,587

2022

Number

42,862

(33,320)

9,542

2021

Number

85,058

(42,196)

42,862

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

On 12 June 2021 (the “vesting date”) the performance criteria were met for 1,206,888 of 1,461,302 shares held under joint share
ownership arrangements (Note 23) within an Employee Benefit Trust, after which the members of the scheme became joint
beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6 pence per share.
There were 254,414 shares where the performance criteria were not met on the vesting date that remain unallocated within the
Employee Benefit Trust.

The weighted average number of shares used for the purposes of calculating the basic earnings per share, net asset value and
net asset value per share of the Group excludes the 1,461,302 shares held within the Employee Benefit Trust as these shares do not
have voting rights or dividend rights whilst they are held within this trust. The Group net asset value has therefore also excluded
the economic right the Group has to the first 281 pence per share (£4,106,259) on vesting for the same reasons. On this basis
the current undiluted net asset value per share is 462.7 pence for the Group. When the joint share ownership arrangements are
eventually exercised, although this would increase the number of shares in issue entitled to voting and dividend rights, this
would also increase the Group’s net asset value by £4,106,259. The diluted net asset value per share is therefore 455.6 pence.

The diluted weighted average number of ordinary shares at 31 January 2022 has been calculated by proportioning the
1,461,302 shares held under joint share ownership arrangements from the vesting date over the year.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

The increase to the weighted average number of ordinary shares between 2021 and 2022 is mainly attributable to the inclusion
of the 33,320 ordinary shares transferred from Treasury to the SIP Trust during the year that have been treated as re-issued for
the purposes of calculating earnings per share.

13,330 ordinary shares (comprising 11,336 of the 33,320 ordinary shares transferred from Treasury to the SIP Trust in April 2021
together with 1,994 of unallocated ordinary shares forfeited by a departing employee during the year to 31 January 2021) were
allocated to the participating employees as Free shares under the share incentive plan arrangement on 12 April 2021 (Note 23).

A further 17,880 ordinary shares (also part of the 33,320 ordinary shares transferred from Treasury to the SIP Trust in April 2021)
were allocated to the participating employees as Matching and Partnership shares under the share incentive plan arrangement
on 21 June 2021 (Note 23).

11. Property, Plant and Equipment

Group

Cost

At 1 February 2020

Additions

Disposals

At 31 January 2021

At 1 February 2021

Additions

Disposals

At 31 January 2022

Depreciation

At 1 February 2020

Eliminated on disposal

Charge for the year

At 31 January 2021

At 1 February 2021

Eliminated on disposal

Charge for the year

At 31 January 2022

Net book value

At 31 January 2022

At 31 January 2021

At 31 January 2020

Furniture and
Equipment

Leasehold
Fixtures and
Fittings and
Others

£’000

Total

£’000

137

(5)

137

(1)

142

(5)

102

(1)

119

152

–

152

–

152

–

103

289

(5)

289

(1)

294

138

(5)

166

(1)

198

123

151

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

12. Investments – Equity Portfolio

Group

At valuation

At 1 February 2020

Additions

Disposals

Provisions

Unrealised gains in this period

At 31 January 2021

At 1 February 2021

Transfers between categories

Additions

Disposals

Provisions

Unrealised gains in this period

At 31 January 2022

At cost

At 1 February 2020

Additions

Disposals

Provisions

At 31 January 2021

At 1 February 2021

Transfers between categories

Additions

Disposals

Provisions

At 31 January 2022

Shares in investee companies

Continuing
investments

Current Assets
– Investments
held for sale

£’000

115,666

2,408

–

12,877

£130,951

130,951

(7,435)

8,011

(5,817)

–

15,535

£141,245

57,970

2,408

–

£60,378

60,378

(6,096)

8,011

(5,913)

–

£ –

–

7,435

–

669

£8,104

–

£ –

–

6,096

–

Total

£’000

115,666

2,408

–

12,877

£130,951

130,951

–

8,011

(5,817)

–

16,204

£149,349

57,970

2,408

–

£60,378

60,378

–

8,011

(5,913)

–

£56,380

£6,096

£62,476

The additions relate to the following transactions in the year:

The Group paid £200,000 on 8 March 2021 and on 8 September 2021 in relation to deferred consideration due to a former minority
shareholder in Paladin Holdings Limited (“Paladin”). The payments represented the second and final tranches of consideration
due in respect of 250,000 ordinary shares in Paladin acquired from the minority shareholder in August 2020 for initial consideration
of £400,000. These shares are being held by the Group under a call option arrangement which Paladin can call at any time up
to 24 August 2026 and buy back from the Group for £804,000. These shares were originally acquired as 50,000 ordinary shares,
however the Group’s holding increased to 250,000 ordinary shares by way of a 5:1 share restructure which Paladin undertook
on 15 April 2021. As at 31 January 2022 total consideration paid by the Group in respect of these shares amounted to £800,000,
with no further consideration payable.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

On 31 August 2021, and as outlined under the disposal transactions below, as part of the transaction whereby ATC Insurance
Solutions PTY Limited (“ATC”) acquired 100% of MB Prestige Holdings PTY Limited (“MB”), including the Group’s entire 40% equity
stake in MB, AUD 6,800,008 (£3,611,071) of the consideration received from the disposal of the Group’s equity investment in MB
was in the form of newly issued shares in ATC. Following the effective reinvestment of the non-cash proceeds from the sale of
MB, the Group’s equity investment in ATC increased from 20% to 25.56%.

On 8 October 2021 the Group acquired a further 100,000 ordinary shares (2.49% equity stake) in Kentro Capital Limited (“Kentro”)
from a founding non-management shareholder for consideration of £4,000,000. This increased the Group’s fully diluted equity
investment in Kentro to 19.18% at the time of investment. As at 31 January 2022 the Group’s shareholding in Kentro was 19.34%
(19.05% diluted).

The disposals relate to the following transactions in the year:

On 12 May 2021 the Group received an Option Notice in relation to 25,000 of its 250,000 ordinary shares in Paladin which were
being held by the Group under a three-year call option arrangement that Paladin could call at any time. These shares were
previously acquired in March 2020 as 50,000 ordinary shares from a minority shareholder and exiting employee for a total cost
of £260,000, however following the 5:1 share restructure in April 2021 noted above, the Group’s holding increased to 250,000
ordinary shares. The terms of the call option arrangement allowed Paladin to buy-back the 250,000 shares from the Group at
a fixed price of £1.0452 per share (£261,300). On 24 May 2021, pursuant to the Option Notice being served, the Group received
£26,130 as consideration for the part disposal of 25,000 shares, after which the shares were cancelled. On 17 June 2021 a further
Option Notice was received in relation to the remaining 225,000 shares held under the aforementioned call option arrangement
and on 1 July 2021 the Group received £235,170 as consideration for these shares, after which the shares were cancelled by
Paladin. Following the exercise of the call option and the subsequent cancellation of the shares, the Group’s equity holding in
Paladin decreased from 49.16% as at 31 January 2021 to 47.06% as at 31 January 2022.

On 31 August 2021 ATC acquired 100% of MB (both being investee companies of the Group) for total consideration of
AUD 17,000,000. As part of this transaction the Group sold its entire 40% stake in MB for consideration of AUD 6,800,008
(£3,611,071), for which the Group received newly issued shares in ATC. The Group also received £18,602 in cash, representing
the working capital adjustment payable following the completion accounts being finalised. Total consideration for the sale
therefore amounted to £3,629,673. This represented a realised gain of £392,673 (Note 13) above the Group’s carrying value of
MB as at 31 January 2021 of £3,237,000 and an overall gain of £3,149,967 above the cost of investment.

On 16 November 2021 the Group agreed to sell its entire 30% existing ownership interest and outstanding debt in Mark Edward
Partners LLC (“MEP”) to MEP’s founder member, and majority shareholder, Mark Freitas for consideration of USD 1,500,000
(£1,116,603). During the year to 31 January 2019 the Group’s USD 6,000,000 (£4,572,822) equity investment in MEP together with
USD 2,600,000 (£2,045,032) of loans outstanding were fully provided against within the Group’s Consolidated Statement of
Financial Position. As per the sale agreement, the consideration for the disposal has been attributed to the outstanding loan of
USD 2,600,000 and has therefore been treated as a loan repayment and reflected within the Consolidated Statement of
Comprehensive Income as a release of provision. However, the original cost of investment of £4,572,822 has been included in the
above table within the disposals at cost and the associated transfer of unrealised losses to realised losses has been reflected
within the Statement of Changes in Equity (Note 19) under ‘Net transfers on disposal of investments’ as a transfer from the Fair
Value Reserve to Retained Earnings.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

12. Investments – Equity Portfolio continued

Group continued
On 21 December 2021 the Group sold its entire 40.5% equity holding in Walsingham Motor Insurance Limited (“WMIL”) for
consideration of £4,654,117. WMIL was acquired by Humn.ai Limited (“Humn”), a London-based insurance provider producing
real-time data-driven fleet insurance. The Group also disposed of its 20% equity holding in Walsingham Holdings Limited (“WHL”),
which was liquidated as part of the transaction and resulted in further cash proceeds of £209,893 payable to the Group post
year end. The Group also received full repayment of its outstanding loan with WHL of £285,975 on completion. Total equity
consideration receivable (including deferred amounts due) for the combined disposals of WMIL and WHL therefore amounted
to £4,864,010. This represented a realised gain of £2,544,010 (Note 13) above the Group’s combined carrying value of WMIL and
WHL as at 31 January 2021 of £2,320,000 and an overall gain of £4,263,710 above the cost of investment. Since 31 January 2022
the Group has received the deferred consideration amounts due in respect of its disposals of WMIL and WHL amounting to
£215,983 (£6,089 in respect of WMIL and £209,893 in respect of WHL), which were included within ‘Trade and other receivables’
within the Consolidated Statement of Financial Position as at 31 January 2022 (refer to Note 15).

The unquoted investee companies, which are registered in England except Summa Insurance Brokerage, S.L. (Spain), Asia
Reinsurance Brokers Pte Limited (Singapore), Stewart Specialty Risk Underwriting Ltd (Canada), XPT Group LLC (USA), ATC
Insurance Solutions PTY Limited (Australia), Criterion Underwriting Pte Limited (Singapore), Agri Services Company PTY Limited
(Australia) and Sage Program Underwriters, Inc. (USA) are as follows:

% holding

Date

capital and

profit/(loss)

of share

information

reserves

for the year

Aggregate

Post tax

Name of company

capital

available to

Principal activity

Agri Services Company PTY Limited

Asia Reinsurance Brokers Pte Limited

ATC Insurance Solutions PTY Limited

Criterion Underwriting Pte Limited1

EC3 Brokers Group Limited

The Fiducia MGA Company Limited

Kentro Capital Limited2

LEBC Holdings Limited

Lilley Plummer Holdings Limited3

Neutral Bay Investments Limited

Paladin Holdings Limited4

Sage Program Underwriters, Inc.5

Stewart Specialty Risk Underwriting Limited

Summa Insurance Brokerage, S.L.

XPT Group LLC

41.00

25.00

25.56

29.40

35.00

35.18

19.34

59.34

30.00

49.90

47.06

30.00

77.25

28.18

30.06.20

31.05.21

30.06.21

–

31.12.20

30.09.21

–

31.03.21

31.12.20

–

31.12.20

31.12.21

1,446,314

2,208,110

5,238,361

–

(9,705,910)

(1,481,102)

22,185,426

5,183,237

–

3,952,778

96,641

–

1,627,086

8,229,763

(9,356)

173,422

Holding Company for specialist Australian
agricultural Managing General Agency

Specialist reinsurance broker

2,158,688

Specialist Australian Managing General Agency

–

Specialist Singaporean Managing General Agency

(6,757,003)

Investment holding company

55,518

Specialist UK Marine Cargo Underwriting Agency

(2,791,028)

992,579

–

236,567

374,939

–

Specialist Managing General Agency

Independent financial advisor company

Specialist Marine broker

Investment holding company

Specialist Managing General Agency

1,512,722

Specialist Canadian Casualty Underwriting Agency

(46,385) Consolidator of Spanish regional insurance brokers

(3,919,412)

(6,927,053) USA Specialty lines insurance distribution company

1 Statutory financial information is not available for Criterion Underwriting Pte Limited as the company is not currently trading.
2 On 22 February 2022, as part of a rebranding exercise, Nexus Underwriting Management Limited rebranded and changed its name to Kentro Capital Limited (Note 25).
3 On 28 July 2021 the Group’s 30% investment in Lilley Plummer Risks Limited was rolled up into a newly incorporated holding company, Lilley Plummer Holdings Limited, via a

share-for-share exchange. On 10 September 2021 the Group’s 30% investment in LPR Insurance Brokers Limited was also rolled up into Lilley Plummer Holdings Limited through
a share-for-share exchange. It is expected that the results of both Lilley Plummer Risks Limited and LPR Insurance Brokers Limited will be presented within the consolidated
statutory accounts of Lilley Plummer Holdings Limited when these become due.

4 The Group’s 47.06% equity investment in Paladin Holdings Limited includes 5.88% relating to shares held under option that can be bought back and cancelled. The Group

envisages that this shareholding will reduce over time as the options are exercised.

5 Sage Program Underwriters, Inc. is a newly incorporated company. Statutory accounts are not available as these are not yet due.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

The Group’s 35% equity investments in Bastion Reinsurance Brokerage (PTY) Limited and Bulwark Investment Holdings (PTY)
Limited and its 42.5% equity investment in Property and Liability Underwriting Managers (PTY) Limited, all of which are based
in South Africa, have not been listed above as they were in the process of being wound up as at 31 January 2022 and no recent
financial information is available.

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.

Company

At valuation

At 1 February 2020

Additions

Unrealised gains in this period

At 31 January 2021

At 1 February 2021

Additions

Unrealised gains in this period

At 31 January 2022

At cost

At 1 February 2020

Additions

At 31 January 2021

At 1 February 2021

Additions

At 31 January 2022

Shares in group undertakings

£’000

109,804

–

12,944

£122,748

122,748

–

11,742

£134,490

2,143

–

£2,143

2,143

–

£2,143

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

12. Investments – Equity Portfolio continued

Shares in group undertakings
All group undertakings are registered in England and Wales. The details and results of group undertakings held throughout the
year, which are extracted from the UK-adopted international accounting standards accounts of B.P. Marsh & Company Limited,
Marsh Insurance Holdings Limited, B.P. Marsh Asset Management Limited, B.P. Marsh (North America) Limited and the UK GAAP
accounts for the other companies, are as follows:

Aggregate capital

Profit/(loss)

and reserves at

for the year to

% Holding of

31 January 2022

Name of company

share capital

B.P. Marsh & Company Limited

Marsh Insurance Holdings Limited

B.P. Marsh Asset Management Limited

B.P. Marsh (North America) Limited1

B.P. Marsh & Co. Trustee Company Limited

Marsh Development Capital Limited

Bastion London Limited

XPT London Limited

100

166,603,313

6,099,974

5,829,536

1,000

Principal activity

17,484,033

Consulting services and investment holding company

–

5,395,569

–

Investment holding company – dormant

Dormant

Investment holding company

Dormant

1 At the year end B.P. Marsh (North America) Limited held a 100% economic interest in RHS Midco I LLC, a US registered entity incorporated during the year to 31 January 2018

for the purpose of holding the Group’s equity investment in XPT Group LLC. In addition, at the year end B.P. Marsh (North America) Limited also held a 100% economic interest
in B.P. Marsh US LLC, a US registered entity, which was incorporated during the year to 31 January 2018. There were no profit or loss transactions in either of these two US
registered entities during the current or prior year.

In addition, the Group also controls the B.P. Marsh SIP Trust and the B.P. Marsh Employees’ Share Trust (Note 23).

Loans to the subsidiaries of £32,187,221 (2021: £27,277,332) are treated as capital contributions.

13. Realised Gains on Disposal of Equity Investments

The realised gains on disposal of investments comprises of a net gain of £2,937,985.

£1,300 of this net gain is in respect of the Group’s disposal of 250,000 ordinary shares (c.5.5% at the time of divestment) in
Paladin Holdings Limited (“Paladin”) which were held under a call option arrangement, for consideration of £261,300, compared
to the fair value of £260,000 at 1 February 2021.

£392,673 of this net gain is in respect of the Group’s disposal of its entire 40% investment in MB Prestige Holdings PTY Limited
(“MB”) at its carrying value of £3,237,000 for consideration of £3,629,673.

£2,407,119 of this net gain is in respect of the Group’s disposal of its entire 40.5% investment in Walsingham Motor Insurance
Limited (“WMIL”) for consideration of £4,654,119, compared to the fair value of £2,247,000 at 1 February 2021.

£136,893 of this net gain is in respect of the capital distribution from liquidating the Group’s 20% investment in Walsingham
Holdings Limited (“WHL”) for consideration of £209,893, compared to the fair value of £73,000 at 1 February 2021.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

In aggregate, the above disposals resulted in a net release of previously unrealised gains to Retained Earnings from the Fair
Value Reserve of £4,476,991.

The disposal of the Group’s entire 30% investment in Mark Edward Partners LLC (“MEP”) did not generate any realised gains or
losses on disposal as this investment had been fully provided against during the year to 31 January 2019. However, the disposal
did result in a net release of unrealised losses to Retained Earnings from the Fair Value Reserve of £4,572,822 (representing the
original cost of investment).

The above releases of fair value resulted in a net transfer of £95,831 from the Fair Value Reserve to the Retained Earnings Reserve.

Refer to Note 12 for further details relating to the above disposals.

There were no realised gains on disposal of investments in the prior year.

14. Loans and Receivables – Non-Current

Loans to investee companies (Note 24)

Amounts owed by group undertakings

2022

£’000

7,231

–

£7,231

Group

2021

£’000

15,833

–

£15,833

2022

£’000

–

4,106

£4,106

Company

2021

£’000

–

4,058

£4,058

The amounts owed to the Company by group undertakings are interest free and repayable on demand.

See Note 15 for the provisions against loans to investee companies and Note 24 for terms of the loans.

15. Trade and Other Receivables – Current

Trade receivables

Less provision for impairment of receivables

Loans to investee companies (Note 24)

Corporation tax repayable

Other receivables (Note 12)

Prepayments and accrued income

2022

£’000

356

–

356

3,135

–

218

1,265

£4,974

Group

2021

£’000

848

–

848

1,273

–

2,239

£4,398

2022

£’000

Company

2021

£’000

–

No provisions were made against loans to investee companies in the current or prior year. A provision of £1,116,603 previously
made against a loan was released during the year due to a repayment being received (2021: a provision of £37,278 was released).
The total provision as at 31 January 2022 was therefore £3,631,756 (2021: £4,748,359).

Included within net trade receivables is a gross amount of £293,450 (2021: £762,233) owed by the Group’s participating interests.
No provision for bad debts has been made in either the current or prior year.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

15. Trade and Other Receivables – Current continued

Trade receivables are provided for based on estimated irrecoverable amounts from the fees and interest charged to investee companies,
determined by the Group’s management based on prior experience and their assessment of the current economic environment.

Movement in the allowance for doubtful debts:

Balance at 1 February

Decrease in allowance recognised in the Statement of Comprehensive Income

Balance at 31 January

2022

£’000

–

£ –

Group

2021

£’000

–

£ –

2022

£’000

–

£ –

Company

2021

£’000

–

£ –

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to the reporting date.

The Group’s net trade receivable balance includes debtors with a carrying amount of £355,677 (2021: £847,621), of which £215,436
(2021: £520,320) of debtors are past due at the reporting date for which the Group has not made a provision as all amounts have
subsequently been received since the year-end. The Group does not hold any collateral over these balances other than over
£16,712 (2021: £229,712) included within the net trade receivables balance relating to loan interest due from investee companies
which is secured on the assets of the investee company.

Ageing of past due but not impaired:

Not past due

Past due: 0 – 30 days

Past due: 31 – 60 days

Past due: more than 60 days

2022

£’000

140

–

201

Group

2021

£’000

327

242

275

£356

£848

2022

£’000

–

£ –

Company

2021

£’000

–

£ –

See Note 24 for terms of the loans and Note 22 for further credit risk information.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

16. Deferred Tax Liabilities/(Assets) – Non-Current

At 1 February 2020

Tax movement relating to investment revaluation for the year (Note 9)

At 31 January 2021

At 1 February 2021

Tax movement relating to investment revaluation for the year (Note 9)

At 31 January 2022

Group

£’000

Company

£’000

–

1,898

£1,898

–

£ –

The directors estimate that, under the current taxation rules and the current investment profile, if the Group were to dispose of
all its investments at the amount stated in the Consolidated Statement of Financial Position, £1,898,000 tax on capital gains
(2021: £Nil) would become payable by the Group.

Finance (No.2) Act 2017 introduced significant changes to the Substantial Shareholding Exemption (“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 the Group to qualify for SSE on a share disposal.

Having reviewed the Group’s current investment portfolio, the directors consider that the Group should benefit from this reform to
the SSE rules on all non-US investments. As a result, the directors anticipate that on a disposal of shares in the Group’s current
non-US investments, so long as the shares have been held for 12 months they should qualify for SSE and no tax charge should
arise on their disposal.

New tax legislation was introduced in the US in 2018 which taxes at source gains on disposal of any foreign partnership interests
in US limited liability companies (“LLCs”). As such, deferred tax will need to be assessed on any potential net gains from the Group’s
investment interests in the US.

Having assessed the current portfolio, the directors anticipate that there is a requirement to provide for deferred tax in respect
of the unrealised gains on investments under the current requirements of UK-adopted international accounting standards as
the US investments currently show a net gain. As such, a provision of £1,898,000 has been made as at 31 January 2022.

The deferred tax provision of £1,898,000 as at 31 January 2022 has been calculated based upon an assessment of the US tax
liability arising from the valuations of the Group’s holdings within US LLCs at 31 January 2022, using the US Federal rate of 21%
together with US State Tax rates prevailing in the states where the Group’s US LLCs operate, which range between 0% and 10%.
Adjustments were then made based upon available allowances and taxable losses. Given the complexity, the Group utilised the
services of a specialist US tax advisory firm.

The requirement for a deferred tax provision is subject to continual assessment of each investment to test whether the SSE conditions
continue to be met based upon information that is available to the Group and that there is no change to the accounting treatment in
this regard under UK-adopted international accounting standards. 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.

The March 2021 Budget announced that the UK corporation tax would increase from 19% to 25% (effective 1 April 2023) and
Finance Bill 2021 was considered substantively enacted in May 2021. This change in tax rate has had no material impact on the
Group financial statements for the year ended 31 January 2022 as the directors do not consider there is any deferred tax due
at the year end in respect of its non-US investments due to the SSE rules.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

17. Current Liabilities

Trade and other payables

Trade payables

Other taxation & social security costs

Accruals and deferred income

Amounts owed to participating interests

Lease liabilities (Note 20)

Loans and other payables

2022

£’000

116

205

1,265

167

1,837

–

£1,837

Group

2021

£’000

152

765

159

1,169

1,000

£2,169

2022

£’000

Company

2021

£’000

–

£ –

The loans and other payables as at 31 January 2021 of £1,000,000 related to amounts drawn down from the Group’s
£3,000,000 loan facility with Brian Marsh Enterprises Limited (“BME”), a company in which the Chairman, Brian Marsh, is a
director and sole shareholder. This amount was fully repaid during the current year on 29 November 2021 and the loan facility
ended on 29 January 2022.

The loan facility provided the Group with further liquidity at an interest rate of the higher of 4% or the UK 1-month LIBOR plus
3.25% (capped at 10%). During the prior year, BME agreed to an interest free period from 2 October 2020 until 1 April 2021
subject to a fee of £20,000 being paid by the Group to BME in the current year.

All of the above liabilities are measured at amortised cost.

18. Called Up Share Capital

Allotted, called up and fully paid

37,466,000 Ordinary shares of 10p each (2021: 37,466,000)

During the year no share repurchases were undertaken.

2022

£’000

3,747

£3,747

2021

£’000

3,747

£3,747

As at 31 January 2022 a total of 9,542 ordinary shares were held by the Company in Treasury (31 January 2021: 42,862 ordinary
shares were 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.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

19. Statement of Changes in Equity

Group

Reverse

Capital

premium

Fair value acquisition redemption contribution

Retained

capital

account

reserve

earnings

£’000

At 1 February 2020

Comprehensive income for the year

Dividends paid (Note 7)

Share based payment arrangements

At 31 January 2021

At 1 February 2021

Comprehensive income for the year

Net transfers on disposal of investments
(Note 13)

Dividends paid (Note 7)

Share based payment arrangements

£’000

3,747

–

£’000

29,367

–

(18)

£’000

57,696

12,877

–

£3,747

£29,349

£70,573

3,747

29,349

–

(7)

70,573

14,306

–

£’000

393

–

£393

393

–

At 31 January 2022

£3,747

£29,342

£84,975

£393

£’000

45,618

844

(798)

110

–

Total

£’000

136,870

13,721

(798)

114

£64

£45,774

£149,907

–

45,774

3,178

149,907

17,484

(96)

(878)

–

(878)

£72

£48,071

£166,607

–

£ –

–

272

799

(798)

110

£383

383

5,750

(878)

Total

£’000

141,054

13,743

(798)

£154,091

154,091

17,492

(878)

£ –

£5,348

£170,791

–

£7

–

£7

–

£7

–

£7

Capital

premium

Fair value redemption contribution

Retained

capital

account

reserve

earnings

£’000

3,747

–

£’000

29,367

–

(18)

£’000

107,661

12,944

–

£3,747

£29,349

£120,605

3,747

29,349

–

(7)

120,605

11,742

–

£3,747

£29,342

£132,347

Company

At 1 February 2020

Comprehensive income for the year

Dividends paid (Note 7)

Share based payment arrangements

At 31 January 2021

At 1 February 2021

Comprehensive income for the year

Dividends paid (Note 7)

Share based payment arrangements

At 31 January 2022

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

20. Leases

Group
The Group has applied IFRS 16: Leases (“IFRS 16”) using the retrospective approach. The Group has one lease, that of its main
office premises. Information about this lease, for which the Group is a lessee, is presented below.

Right-of-use asset

At 1 February 2020

Modification of lease adjustment1

Depreciation charge

At 31 January 2021

At 1 February 2021

Depreciation charge

At 31 January 2022

Land and
Buildings

£’000

1,286

(114)

(171)

£1,001

1,001

(165)

£836

Lease liabilities
The Group was committed to making the following future aggregate minimum payments under its leases:

Maturity analysis – contractual undiscounted cash flows:

Earlier than one year

Between two and five years

More than five years

Lease liabilities included in Consolidated Statement of Financial Position at 31 January:

Maturity analysis:

Current liabilities (Note 17)

Non-current liabilities

2022

Land and

Buildings

£’000

2021

Land and

Buildings

£’000

214

856

£1,086

£939

167

772

£939

214

856

230

£1,300

£1,098

159

939

£1,098

1 During the prior year to 31 January 2021, the Group negotiated a rent free period on its office lease from 24 June 2020 to 23 January 2021. The present value of the lease
payments was recalculated and a modification of lease adjustment of £113,915 was applied to both the right-of-use asset and the lease liability balances brought forward.

Amounts recognised in profit or loss (Group):

Interest on lease liabilities (Note 3)

Amounts recognised in the Consolidated Statement of Cash Flows:

Total cash outflow for leases

2022

£’000

£55

2022

£’000

£(214)

2021

£’000

£63

2021

£’000

£(223)

Company
There are no right-of-use assets or associated lease liabilities recognised in the Company’s Statement of Financial Position.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

21. Loan and Equity Commitments

On 26 June 2020 the Group entered into an agreement to provide Sage Program Underwriters, Inc. with a loan facility of USD
250,000. As at 31 January 2022 USD 150,000 had been drawn down, leaving a remaining undrawn facility of USD 100,000. Any
drawdown is subject to satisfying certain agreed criteria.

On 20 September 2021 the Group entered into an agreement to provide Lilley Plummer Holdings Limited with a loan facility of
£300,000. As at 31 January 2022 £200,000 had been drawn down, leaving a remaining undrawn facility of £100,000.

Please refer to Note 25 for details of equity payments made together with loan facilities offered and amounts drawn down
after the year end.

22. Financial Instruments

The Group’s financial instruments comprise loans to participating interests, cash and liquid resources and various other items,
such as trade debtors, trade creditors, other debtors and creditors and loans. These arise directly from the Group’s operations.

It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be
undertaken unless there are economic reasons for doing so, as determined by the directors.

The main risks arising from the Group’s financial instruments are price risk, credit risk, liquidity risk, interest rate risk, currency risk,
new investment risk, concentration risk, political risk, Covid-19 risk and Ukraine conflict risk. The Board reviews and agrees policies
for managing each of these risks and they are summarised in the Group Strategic Report under “Financial Risk Management”.

Interest rate profile
The Group has cash balances of £8,628,000 (2021: £709,000), which are part of the financing arrangements of the Group. The
cash balances comprise bank current accounts and deposits placed at investment rates of interest, which ranged up to 0.01% p.a.
in the period (2021: deposit rates of interest ranged up to 0.6% p.a.). During the period all cash balances were held in immediate
access accounts or on short-term deposit of up to 14 days (2021: all cash balances were held in immediate access accounts).

Currency hedging
During the year the Group engaged in five currency hedging transactions ranging from €910,000 to €1,165,000 and USD 1,000,000
(2021: two currency hedging transactions amounting to €1,300,000 and USD 1,000,000) to mitigate the exchange rate risk for
certain foreign currency receivables. These were settled before the year end. A net loss of £7,750 (2021: net loss of £57,011) relating
to these hedging transactions was recognised under Exchange Movements within the Consolidated Statement of Comprehensive
Income when the transactions were settled. As at the year end the Group had one currency hedging transaction amounting to
USD 1,075,000 which was entered into on 28 January 2022. The fair values of these hedges are not materially different to the
transaction costs.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

22. Financial Instruments continued

Financial liabilities
The Company had no borrowings as at 31 January 2022 (2021: £1,000,000). The balance as at 31 January 2021 had been drawn
down from the Company’s agreed £3,000,000 loan facility provided by Brian Marsh Enterprises Limited, a company in which the
Chairman, Brian Marsh, is a director and sole shareholder, which was entered into on 29 July 2019 and was repaid in full during
the current year on 29 November 2021 (Note 17). The loan facility provided the Group with further liquidity at an interest rate of
the higher of 4% or the UK 1-month LIBOR plus 3.25% (capped at 10%) and was available until its expiry on 29 January 2022.

Fair values
The Group has adopted the amendment to IFRS 7 for financial instruments which are measured at fair value at the reporting
date. This requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
• Level 1: Quoted prices unadjusted in active markets for identical assets or liabilities;
• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, observed either

directly as prices or indirectly from prices; and

• Level 3: Inputs for the asset or liability that are not based on observable market data.

Unquoted equity instruments are measured in accordance with the IPEVCV Guidelines with reference to the most appropriate
information available at the time of measurement. Further information regarding the valuation of unquoted equity instruments
can be found in the section ‘Investments – equity portfolio’ under the Accounting Policies (Note 1).

The following presents the classification of the financial instruments at fair value into the valuation hierarchy at 31 January 2022:

Assets

Equity portfolio investments designated as “fair value through profit or loss” assets

Level 1

£’000

–

£ –

Level 2

£’000

Level 3

£’000

Total

£’000

–

£ –

149,349

£149,349

149,349

£149,349

The Group’s classification of the financial instruments at fair value into the valuation hierarchy at 31 January 2021 are presented
as follows:

Assets

Equity portfolio investments designated as “fair value through profit or loss” assets

Level 1

£’000

–

£ –

Level 2

£’000

Level 3

£’000

Total

£’000

–

£ –

130,951

£130,951

130,951

£130,951

Level 3 inputs are sensitive to assumptions made when ascertaining fair value. Setting the valuation policy is the responsibility of
the Valuations Committee, which is then reviewed by the Board. The policy is to value investments within the portfolio at fair value
by applying a consistent approach and ensuring that the valuation methodology is compliant with the IPEVCV Guidelines.
Valuations of the investment portfolio of the Group are performed twice a year, and the half-year valuations are subjected to the
same level of scrutiny and approach as the audited final year accounts by the Valuations Committee.

Of assets held at 31 January 2022 classified as Level 3, 72% by value (2021: 79%) were valued using a multiple of earnings and
28% (2021: 21%) were valued using alternative valuation methodologies.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Valuation multiple – the valuation multiple is the main assumption applied to a multiple of earnings based valuation. The multiple
is derived from comparable listed companies or relevant market transaction multiples. Companies in the same industry and
geography and, where possible, with a similar business model and profile are selected and then adjusted for factors including
size, growth potential and relative performance. A discount is applied or a reduced multiple used to reflect that the investment
being valued is unquoted. The multiple is then applied to the earnings, which may be adjusted to eliminate one-off revenues or
costs to better reflect the ongoing position, or to adjust for any minority interests. The resulting value is the enterprise value of
the investment, after which certain adjustments are made to calculate the equity value. These adjustments may include debt,
working capital requirements, regulatory capital requirements, deferred consideration payable, or anything that could be
dilutive which is quantifiable. The Group’s investment valuation is then derived from this based upon its shareholding.

The weighted average post discount EBITDA earnings multiple used (based on the valuations derived) when valuing the portfolio
at 31 January 2022 was 14.4x (2021: 13.6x). The weighted average post discount Price/Earnings multiple used (based on the
valuations derived) when valuing the portfolio at 31 January 2022 was 19.2x (2021: 16.9x).

If the multiple used to value each unquoted investment valued on an earnings basis as at 31 January 2022 moved by 10%, this
would have an impact on the investment portfolio of £11.0m (2021: £9.8m) or 7.3% (2021: 7.5%).

Alternative valuation methodologies – there are a number of alternative investment valuation methodologies used by the Group,
for reasons for specific types of investment. These may include valuing on the basis of an imminent sale where a price has been
agreed but the transaction has not yet completed, using a discounted cash flow model, at cost, using specific industry metrics
which are common to that industry and comparable market transactions have occurred, and a multiple of revenues where the
investments are not yet profitable.

At 31 January 2022 the proportion of the investment portfolio that was valued using these techniques were: 22% using industry
metric (2021: 19%), 1% using revenues (2021: 1%), 5% at agreed sale value (2021: none) and none at cost (2021: 1%).

If the value of all the investments valued under alternative methodologies moved by 10%, this would have an impact on the
investment portfolio of £3.6m (2021: £2.5m) or 2% (2021: 2%).

100

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

23. Share Based Payment Arrangements

Joint Share Ownership Plan
During the year to 31 January 2019, B.P. Marsh & Partners Plc entered into joint share ownership agreements (“JSOAs”) with certain
employees and directors. The details of the arrangements are described in the following table:

Nature of the arrangement

Date of grant

Number of instruments granted

Exercise price (pence)

Share price (market value) at grant (pence)

Hurdle rate

Vesting period (years)

Share appreciation rights (joint beneficial ownership)

12 June 2018

1,461,302

N/A

281.00

3.75% p.a. (simple)

3 years

Vesting conditions

There are no performance conditions other than the recipient remaining an employee throughout the vesting period. The awards vest after
three years or earlier resulting from either:
a) a change of control resulting from a person, or persons acting together, obtaining control of the Company either (i) as a result of a making

a Takeover Offer; (ii) pursuant to a court sanctioned Scheme of Arrangement; or (iii) in consequence of a Compulsory Acquisition; or
b) a person becoming bound or entitled to acquire shares in the Company pursuant to sections 974 to 991 of the Companies Act 2006; or
c) a winding up.
If the employee is a bad leaver the co-owner of the jointly-owned share can buy out the employee’s interest for 0.01p

Expected volatility

Risk free rate

Expected dividends expressed as a dividend yield

Settlement

% expected to vest (based upon leavers)

Number expected to vest

Valuation model

ERM value (pence)

Deduction for carry charge (pence)

Fair value per granted instrument (pence)

Charge for year ended 31 January 2022

N/A

1.9%

Cash settled on sale of shares

100%

1,461,302

Expected Return Methodology (ERM)

36.00

31.60

4.40

£7,685

On 12 June 2018 1,461,302 new 10p Ordinary shares in the Company were issued and transferred into joint beneficial ownership
for 12 employees (including 4 directors) under the terms of joint share ownership agreements. No consideration was paid by the
employees for their interests in the jointly-owned shares.

The new Ordinary shares have been issued into the name of RBC cees Trustee Limited (“the Trustee”) as trustee of the B.P. Marsh
Employees’ Share Trust (“the Share Trust”) at a subscription price of 281 pence per share, being the mid-market closing price on
12 June 2018. Following the acquisition of the Trustee by JTC Plc on 10 December 2020, the Trustee has since been rebranded to
JTC Employer Solutions Trustee Limited.

The jointly-owned shares are beneficially owned by (i) each of the 9 currently participating employees and (ii) the trustee of the
Employee Benefit Trust upon and subject to the terms of the JSOAs entered into between the participating employee, the Company
and the Trustee.

Under the terms of the JSOAs, the employees and directors are entitled to receive on vesting the growth in value of the shares
above a threshold price of 281 pence per share (market value at the date of grant) plus an annual carrying charge of 3.75% per
annum (simple interest) to the market value at the date of grant to the date of vesting. The Employee Benefit Trust retains the
carrying cost, with 281 pence per share due back to the Company.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

101

Alternatively, on vesting, the participant and the Trustee may exchange their respective interests in the jointly-owned shares such
that each becomes the sole owner of a number of Ordinary shares of equal value to their joint interests.

Participants will therefore receive value from the jointly-owned shares only if and to the extent that the share value grows above
the initial market value plus the carrying cost to the date of vesting.

The employees and directors received an interest in jointly owned shares and a Joint Share Ownership Plan (“JSOP”) is not an
option, however the convention for JSOPs is to treat them as if they were options. The value of the employee’s interest for
accounting purposes is calculated using the Expected Return Methodology.

The risk-free rates are based on the yield on UK Government Gilts of a term consistent with the assumed option life.

On 12 June 2021 (the “vesting date”) the performance criteria were met, after which the members of the scheme became joint
beneficial owners of the shares and therefore became entitled to any gain on sale of the shares in excess of 312.6 pence per
share. Whilst these shares remain within the Employee Benefit Trust, they do not have voting or dividend rights. However, if the
shares are sold from the Employee Benefit Trust in the future in excess of 281 pence per share, the Group would be entitled to
receive £4,106,259 in total. These shares would then, post-sale, have voting and dividend rights attached, such that they would
become fully dilutive for the Group. Whilst 254,414 shares out of 1,461,302 held within the Employee Benefit Trust have been
forfeited by departing employees, the trust remains the owner of these shares.

Share Incentive Plan
During the year to 31 January 2017 the Group established an HMRC approved Share Incentive Plan (“SIP”).

During the year a total of 33,320 ordinary shares in the Company, which were held in Treasury as at 31 January 2021 (2021:
42,196 ordinary shares in the Company, which were held in Treasury as at 31 January 2020) were transferred to the B.P. Marsh
SIP Trust (“SIP Trust”). As a result, together with 1,994 of unallocated ordinary shares forfeited by departing employees during
the prior year, a total of 35,314 ordinary shares in the Company were available for allocation to the participants of the SIP
(2021: 47,044 ordinary shares were available for allocation, including 4,848 ordinary shares forfeited by departing employees).

On 12 April 2021, a total of 10 eligible employees (including 3 executive directors of the Company) applied for the 2021-22 SIP
and were each granted 1,333 ordinary shares (“21-22 Free Shares”), representing approximately £3,600 at the price of issue.

Additionally, on 21 June 2021, all eligible employees were also invited to take up the opportunity to acquire up to £1,800 worth of
ordinary shares (“Partnership Shares”). For every Partnership Share that an employee acquired, the SIP Trust offered two ordinary
shares in the Company (“Matching Shares”) up to a total of £3,600 worth of shares. All 10 eligible employees (including 3 executive
directors of the Company) took up the offer and acquired the full £1,800 worth of Partnership Shares (596 ordinary shares) and
were therefore awarded 1,192 Matching Shares.

The 21-22 Free and Matching Shares are subject to a 1 year forfeiture period.

A total of 31,210 (2021: 47,044) Free, Matching and Partnership Shares were granted to the 10 (2021: 11) eligible employees during
the year, including 9,363 (2021: 13,515) granted to 3 (2021: 3) executive directors of the Company.

No ordinary shares were withdrawn from the SIP Trust during the year (2021: 3,808 ordinary shares in the Company were withdrawn
from the SIP Trust and transferred into the direct beneficial ownership of a departing employee).

102

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

23. Share Based Payment Arrangements continued

Share Incentive Plan continued
£68,070 of the IFRS 2 charges (2021: £74,467) associated with the award of the SIP shares to 10 (2021: 11) eligible directors and
employees of the Company has been recognised in the Statement of Comprehensive Income as employment expenses (Note 5).

As at 31 January 2022, and after adjusting for a total of 19,951 ordinary shares withdrawn from the SIP Trust by employees on
departure and 6,842 ordinary shares forfeited on departure (since inception), a total of 231,028 Free, Matching and Partnership
Shares had been granted to 10 eligible employees under the SIP, including 78,579 granted to 3 executive directors of the Company.

The results of the SIP Trust have been fully consolidated within these financial statements on the basis that the SIP Trust is effectively
controlled by the Company.

24. Related Party Disclosures

The following loans owed by the investee companies (including their subsidiaries and other related entities) of the Company
and its subsidiaries were outstanding at the year end:

Bastion Reinsurance Brokerage (PTY) Limited

Bulwark Investment Holdings (PTY) Limited

The Fiducia MGA Company Limited

Kentro Capital Limited

LEBC Holdings Limited

Lilley Plummer Holdings Limited

Paladin Holdings Limited

Property and Liability Underwriting Managers (PTY) Limited

Walsingham Holdings Limited

2022

425,831

665,000

2,449,000

–

1,500,000

200,000

3,096,500

1,450,778

–

2022

€

2021

425,831

665,000

2,545,000

4,000,000

1,500,000

–

5,096,500

1,450,778

285,975

2021

€

Summa Insurance Brokerage, S.L.

1,820,070

2,329,761

Stewart Specialty Risk Underwriting Limited

Mark Edward Partners LLC

XPT Group LLC

Sage Program Underwriters, Inc.

2022

CAD

–

2022

USD

–

2,000,000

150,000

2022

SGD

2021

CAD

300,000

2021

USD

2,600,000

2,000,000

–

2021

SGD

Criterion Underwriting Pte Limited

120,000

The loans are typically secured on the assets of the investee companies and an appropriate interest rate is charged based upon
the risk profile of that company.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

103

Income receivable, consisting of consultancy fees, interest on loans and dividends recognised in the Consolidated Statement of
Comprehensive Income in respect of the investee companies (including their subsidiaries and other related entities) of the Company
and its subsidiaries for the year were as follows:

Agri Services Company PTY Limited

Asia Reinsurance Brokers Pte Limited

ATC Insurance Solutions PTY Limited

Criterion Underwriting Pte Limited

EC3 Brokers Group Limited

The Fiducia MGA Company Limited

Kentro Capital Limited

LEBC Holdings Limited

Lilley Plummer Holdings Limited

MB Prestige Holdings PTY Limited

Neutral Bay Investments Limited

Paladin Holdings Limited

Sage Program Underwriters, Inc.

Stewart Specialty Risk Underwriting Limited

Summa Insurance Brokerage, S.L.

Walsingham Holdings Limited

Walsingham Motor Insurance Limited

XPT Group LLC

2022

125,133

123,177

121,362

–

(881,318)

203,465

1,201,425

479,851

116,736

702,778

119,597

550,570

39,544

283,771

152,274

20,308

121,906

557,099

2021

135,873

145,243

174,486

–

327,754

201,641

894,156

421,767

115,336

282,057

132,080

538,168

61,142

90,326

188,583

23,920

98,589

636,019

In addition, the Group made management charges of £34,000 (2021: £31,000) to the Marsh Christian Trust (“the Trust”), a grant
making charitable Trust, of which Brian Marsh, the Executive Chairman and a significant shareholder of the Company, is also
the Trustee and Settlor.

The Group also made management charges of £5,000 (2021: £5,800) to Brian Marsh Enterprises Limited (“BME”). Brian Marsh,
the Chairman and a significant shareholder of the Company is also the Chairman and majority shareholder of BME.

On 3 August 2021 Brian Marsh gifted 205,660 ordinary shares in the Company to the Marsh Christian Trust for £Nil consideration,
taking the total number of shares held by the Trust in the Company to 1,477,660 at that time. As at 31 January 2022 and at the
date of this report, the Trust’s holding in the Company remained at 1,477,660 shares.

On 13 May 2021, the Group repaid £550,000 of its £1,000,000 outstanding loan to BME. On 29 November 2021 the Group repaid
the remaining £450,000 outstanding. On 29 January 2022 the loan facility ended.

The original loan facility of £3,000,000 provided the Group with further liquidity at an interest rate of the higher of 4% or the UK
1-month LIBOR plus 3.25% (capped at 10%) and was available to be drawn down until, and repayable by, 29 January 2022, after
which the facility ended. BME agreed to an interest free period from 2 October 2020 until 1 April 2021 subject to a fee of £20,000
being payable by the Group to BME on 2 April 2021.

All the above transactions were conducted on an arms-length basis.

Of the total dividend payments made during the year of £878,282, £389,060 was paid to the directors or parties related to
them (2021: total dividend payments of £798,353, of which £353,596 was paid to the directors or parties related to them).

104

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

25. Events After the Reporting Date

On 22 February 2022 Nexus Underwriting Management Limited, an investee company, changed its name to Kentro Capital Limited
as part of a re-branding exercise.

On 1 March 2022 the Group sold its entire 77.25% stake in Summa Insurance Brokerage, S.L. (“Summa”) to Acrisure España S.L.
(“Acrisure”), part of Acrisure LLC, for consideration of €9,700,737 (£8,104,208), net of transaction costs. The consideration received
was in line with the carrying value of the Group’s investment in Summa of £8,104,000 as at 31 January 2022 and represented
an overall gain of £2,008,065 above the cost of investment. Outstanding loans of €1,820,070 (£1,520,526) were also repaid in
full on completion.

On 23 March 2022 the Group acquired a 40% cumulative preferred equity stake in Denison and Partners Limited (“Denison and
Partners”) for consideration of £132,000. Denison and Partners is a start-up London-based Lloyds Insurance Broker with a focus
on delivering (re)insurance delegated authority solutions and services to Managing General Agencies, Coverholders and (Re)
insurers. The Group also provided Denison and Partners with a loan facility of £670,000 on completion, which is expected to be
drawn down in tranches in line with their business plan. At the date of this report no amounts have been drawn down from the
agreed loan facility.

On 11 May 2022 Lilley Plummer Holdings Limited drew down the remaining £100,000 of its £300,000 loan facility agreed by the
Group in September 2021. As at 31 January 2022 £200,000 was outstanding.

On 1 June 2022 the Group agreed to invest, through its wholly-owned subsidiary company B.P. Marsh (North America) Limited,
a further USD 3,500,000 (c.£2,800,000) in XPT Group LLC (“XPT”), subject to approval from XPT’s senior lender Madison Capital.
USD 2,780,000 will be used to subscribe for a further 2,780 redeemable preference shares in XPT. The remaining USD 720,000 will
be used to acquire a further 0.97% equity stake in XPT. The funding provided will allow XPT to repay an existing revolving credit
facility and satisfy certain deferred consideration payments due. On completion, the total amount invested by the Group in
redeemable preference shares will increase from USD 3,220,000 as at 31 January 2022 to USD 6,000,000 and the Group’s equity
investment in XPT will also increase from 28.18% as at 31 January 2022 to 29.15%.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

105

26. Financial Risk Management

A review of the Group’s objectives, policies and processes for managing and monitoring risk is set out in the Financial Risk
Management section of the Group Strategic Report on pages 50 to 54.

This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance.
Current year profit and loss information has been included where relevant to add further context.

The Group’s operations expose it to a variety of financial risks. The Group manages the risk to limit the adverse effects on the
financial performance of the Group by monitoring those risks and acting accordingly.

The monitoring of the financial risk management is the responsibility of the Board. The policies of the Board of directors are
implemented by the Group’s various internal departments under specific guidelines.

The Group is a selective investor and each investment is subject to an individual risk assessment through an investment approval
process. The Group’s Investment Committee is part of the overall risk management framework. The risk management processes
of the Company are aligned with those of the Group and both the Group and the Company share the same financial risks.

Price risk
The Group is exposed to private equity securities price risk as it invests in unquoted companies. The Group manages the risk
by ensuring that a director of the Group is appointed to the board of each investee company. In this capacity, the appointed
director can advise the Group’s Board of the investee companies’ activities and prompt action can be taken to protect the value
of the investment. Monthly management reports are required to be prepared by investee companies for the review of the appointed
director and for reporting to the Group Board.

A 10% change in the fair value of those investments would have the following direct impact on the Consolidated Statement of
Comprehensive Income:

Fair value of investments – equity portfolio

Impact of a 10% change in fair value on Consolidated Statement of Comprehensive Income

2022

£’000

149,349

14,935

Group

2021

£’000

130,951

13,095

2022

£’000

134,490

13,449

Company

2021

£’000

122,748

12,275

Credit risk
The Group is subject to credit risk on its unquoted investments, cash and deposits. The maximum exposure is the amount stated
in the Consolidated Statement of Financial Position.

The credit quality of unquoted investments, which are held at fair value and include debt and equity elements, is based on the
financial performance of the individual portfolio companies. The credit risk relating to these assets is based on their enterprise
value and is reflected through fair value movements.

106

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

Notes to the consolidated
financial statements
continued

26. Financial Risk Management continued

Credit risk continued
The Group is exposed to the risk of default on the loans it has made available to investee companies. The loans rank in preference
to the equity shareholding and the majority are secured by a charge over the assets of the investment. The Group manages the
risk by ensuring that there is a director of the Group appointed to the board of each of its investee companies. In this capacity,
the appointed director can advise the Group’s board of investee companies’ activities and prompt action can be taken to protect
the value of the loan, such that the directors believe the credit risk to the Group is adequately managed. When a loan is assessed
to be likely to be in default then the Group will review the probability of recoverability, and if necessary, make a provision for any
amount considered irrecoverable.

The Group’s cash is held with a variety of different counterparties with 100% (2021: 100%) held on demand with A rated institutions.

Liquidity risk
The Group invests in unquoted early stage companies. The timing of the realisation of these investments can be difficult to estimate.
The directors assess and review the Group’s liquidity position and funding requirements on a regular basis and this is an agenda
item for its Board meetings. A key objective is to ensure that the income from the portfolio covers operating expenses such that
funds available for investment are not used for working capital. The Group regularly reviews the cash flow forecast to ensure
that it has the ability to meet commitments as they fall due and to manage its working capital. The Board considers that the
Group has sufficient liquidity to manage current commitments.

As at 31 January 2022 the Group had no borrowings (31 January 2021: £1,000,000).

Interest rate risk
Interest rate risk arises from changes in the interest receivable on cash and deposits, on loans issued to investment companies
and on certain preferred dividend mechanisms linked to an interest rate. In addition, the risk arises on any borrowings with a
variable interest rate. At 31 January 2022, the Group did not have any interest bearing liabilities but did have interest bearing
assets. The majority of loans provided by the Group are subject to a minimum interest rate to protect the Group from a period
of low interest rates, and also a hurdle rate linked to the UK Base Rate.

An increase of 100 basis points, based upon the Group’s closing balance sheet position of its interest bearing assets, excluding
any future contractual loan repayments and loan balances provided against at the year end, over a 12-month period, would
lead to an approximate increase in total comprehensive income of £108,000 for the Group (2021: £157,000 increase).

Currency risk
The Group currently has substantial exposure to foreign investment and derives income outside the UK. As such some of the
Group’s income and assets are subject to movement in foreign currencies which will affect the Consolidated Statement of
Comprehensive Income in accordance with the Group’s accounting policy. The Board monitors the movements and manages
the risk accordingly.

At 31 January 2022, 64% of the Group’s net assets were sterling denominated (2021: 70%). The Group’s general policy remains
not to hedge its foreign currency denominated investment portfolio.

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

107

The Group’s net assets in Euro, US Dollar, Australian Dollar and all other currencies combined are shown in the table below. The
sensitivity analysis has been undertaken based upon the sensitivity of the Group’s net assets to movements in foreign currency
exchange rates, assuming a 10% movement in exchange rates against sterling. The sensitivity of the Company to foreign exchange
risk is not materially different from the Group.

As at 31 January 2022

Net assets

Sensitivity analysis

Assuming a 10% movement of exchange rates
against sterling

Sterling

£’000

Euro

£’000

Australian
dollar

£’000

US
dollar

£’000

Other

£’000

Total

£’000

107,300

9,625

19,331

21,745

8,606

166,607

Impact on net assets

N/A

(875)

(1,757)

(1,905)

(782)

(5,319)

As at 31 January 2021

Net assets

Sensitivity analysis

Assuming a 10% movement of exchange rates
against sterling

Sterling

£’000

Euro

£’000

Australian
dollar

£’000

US
dollar

£’000

Other

£’000

Total

£’000

104,236

9,491

14,322

15,471

6,387

149,907

Impact on net assets

N/A

(769)

(1,302)

(1,341)

(581)

(3,993)

New investment risk
An inherent risk of realising an investment is the loss of a performing asset and a potential lack of suitable new investments to
replace the lost income and capital growth. Prior to reinvestment, returns on cash can be significantly lower, which may reduce
underlying profitability on a short-term basis until funds are reinvested. The Group has an active Investment Department which
continues to receive a strong pipeline of new investment opportunities. In addition, there is often potential for further investment
within the Group’s existing portfolio.

Concentration risk
Although the Group only invests in financial service businesses, and specifically insurance intermediaries, the Group has a wealth
of experience in this specific sector. It seeks to manage concentration risk by making investments across a variety of geographic
areas, development stages of business and classes of product. Quantitative data regarding the concentration risk of the portfolio
across geographies can be found in the Segmental Reporting analysis in Note 2.

Political risk
As a UK domiciled business, the Group is exposed to the risks associated with the UK’s decision to leave the European Union (“Brexit”).
The Board is continually assessing the impact of Brexit on the Group and its underlying investments, however the direct impact
on the Group’s investment portfolio is not expected to be material. It remains the Group’s intention to continue to invest into the
international financial services market. As outlined under ‘Currency risk’ above, the Group continues to monitor the movements
in its foreign currency denominated income and assets and manages this risk accordingly.

108

B.P. Marsh • 2022 Annual Report • Notes to the consolidated financial statements

26. Financial Risk Management continued

Covid-19 risk
The Group is exposed to the risks associated with the global coronavirus pandemic (“Covid-19”). Since the outbreak of the virus,
the Board has been continually assessing the potential impact of Covid-19 on the Group and its underlying investments. The Group
has taken all the steps that it can to ensure that the health and safety of its staff, their families and the Group’s associates is
prioritised, whilst also ensuring the continuity of the Group’s day to day operations through remote working arrangements.
Since early 2022 our employees have returned to working in the office on a near full-time basis.

Ukraine conflict risk
The Group is exposed to the risks associated with the conflict in Ukraine, which intensified on 24 February 2022. Since then, the
Board has been continually assessing the potential impact of the intensifying military action and associated significant economic
sanctions imposed by the international community, and the potential impact on the Group and its underlying investments. Whilst
the Group does not have any direct investment in the affected region, the impact on the wider global economy and associated
disruption to capital markets, foreign exchange volatility, price inflation and supply chain issues could affect both the Group’s
operations and those of its investment portfolio, which could, in turn, impact the future performance of the Group. Refer to the
Group Strategic Report on page 48 for further details of the Directors’ assessment of the impact of the conflict in Ukraine.

27. Ultimate Controlling Party

The directors consider there to be no ultimate controlling party.

B.P. Marsh has invested in over 50
businesses since it was founded in 1990
and its management team has a wealth of
experience and a well-developed network
within the Financial Services sector.

We are farmers,
not hunters