JARDINE LLOYD THOMPSON GROUP (LON:JLT) Preliminary Results

Transparency directive : regulatory news

28/02/2017 07:00

Preliminary Results


Released 07:00 28-Feb-2017

28 FEBRUARY 2017


Jardine Lloyd Thompson Group plc


PRELIMINARY RESULTS


FOR THE YEAR ENDED 31 DECEMBER 2016 (UNAUDITED)


Jardine Lloyd Thompson Group plc ("JLT" or "the Group") announces its preliminary results for the year ended 31 December 2016.


Despite challenging trading and economic conditions, JLT demonstrated the fundamental strength and resilience of its global franchise in delivering a good performance.


Financial Highlights


    Revenue growth of 9% to £1,261.3m


    Organic revenue growth of 2%


•    3% in JLT Specialty


•    4% in JLT Re


•    3% in International Employee Benefits


    Positive impact of foreign exchange movements


    Underlying* profit before tax of £172.6m, up 1%, reflecting US Specialty investment as planned **


•    Underlying profit before tax, excluding the US investment, up 5% to £199.6m


    Reported profit before tax down 13% to £134.9m


    Underlying profit margin down 80 bps to 15.4%


•    Underlying profit margin, excluding the US investment, down by 30 bps to 18.1%


    Reported diluted EPS down 21% from 48.0p*** to 37.8p


•     Underlying diluted EPS down 2% from 52.2p*** to 51.4p


    Final cash dividend of 20.6p bringing total dividend for 2016 to 32.2p, up 5%, reflecting the Board's confidence in the Group's underlying trading performance


* Underlying results exclude exceptional items of £37.7m


** Net investment in US Specialty in 2016 was £27.0m (2015: £20.5m)


*** 2015 comparatives revised


BUSINESS Highlights


    Successfully completed turnaround of UK Employee Benefits business, which is now set for a return to growth in revenues and profits; second half revenues of £85.1m exceeded those in the same period last year (H2 2015: £82.4m).


    Build-out of US Specialty continued, delivering US$56m of revenues and on track to deliver profits in 2019.  The peak of the investment programme was reached in 2016.  The recent acquisition of Construction Risk Partners completes JLT's global Construction capability.


    Disposed of non-core Thistle UK business, which made an operating loss of £3.6m in 2016 in the parts which were divested.


Dominic Burke, Group Chief Executive, commented:


"JLT has delivered a good set of financial results in 2016, particularly when set against the continued, challenging trading environment.  The Group entered 2017 in good shape, with momentum and confidence that JLT is well-positioned to deliver organic revenue growth more in line with historical rates.  I am proud of the achievements and progress we made in 2016 across all of our businesses.  The resilience we showed last year positions us very well for further growth."


Enquiries


Jardine Lloyd Thompson Group plc


Dominic Burke                                                          Chief Executive                                     020 7528 4948


Charles Rozes                                                         Finance Director                                   020 7528 4375


Paul Dransfield                                                         Head of Investor Relations                    020 7528 4933


Tom Burns/Dania Saidam                                        Brunswick Group LLP                           020 7404 5959


A presentation to investors and analysts will take place at 9am today at The St Botolph Building, 138 Houndsditch, London, EC3A 7AW. A live webcast of the presentation can be viewed on the Group's website www.jlt.com  and it will also be available after the event.


PRELIMINARY STATEMENT


JLT delivered a good set of financial results in 2016, when set against the continued challenging trading environment, which persisted throughout the year.  This included the sustained softness in both the insurance and reinsurance rating environments, depressed commodity prices and lacklustre global GDP growth.


The weakness of sterling from June 2016 was a positive factor in the Group's results; the estimated impact of £22.2m at underlying profit before tax level provided a helpful offset to the challenging trading environment.


The Group entered 2017 with momentum intact and confidence that JLT is well positioned to deliver organic revenue growth and to grow earnings across the Group's businesses.


Total revenues increased by 9%, or 3% at constant rates of exchange ("CRE"), to £1.26bn with overall organic revenue growth of 2%, consistent with that of 2015, once again impacted by the decline in revenues in the UK and Ireland Employee Benefits ("UK EB") business.

































































































































































































































Total Revenue






Trading Margin






Underlying Trading Profit



£m



2016



Growth



CRE



Organic



2015






2016



CRE



2015






2016



CRE



2015













































Risk & Insurance










































Specialty Businesses



765.3



10%



4%



3%



693.0






16%



16%



19%






126.1



113.0



128.5



JLT Re



195.6



13%



4%



4%



173.6






21%



19%



19%






40.5



34.8



32.4






960.9



11%



4%



3%



866.6






17%



16%



19%






166.6



147.8



160.9













































Employee Benefits










































UK & Ireland



160.0



(4%)



(5%)



(8%)



167.4






8%



7%



8%






12.3



11.9



12.8



International EB



140.4



16%



5%



3%



121.1






26%



26%



25%






37.2



33.1



30.8






300.4



4%



(1%)



(3%)



288.5






16%



16%



15%






49.5



45.0



43.6













































Group*



1,261.3



9%



3%



2%



1,155.1






15.4%



14.4%



16.2%






193.7



170.2



187.5



 


Notes:


-   CRE: Constant rates of exchange are calculated by translating 2016 results at 2015 exchange rates.


-   Organic growth is based on total revenue excluding the effect of currency, acquisitions, disposals and investment income.


-   Underlying results exclude exceptional items.


* Trading profit figures include central costs.


JLT's Risk & Insurance businesses delivered revenue growth of 11% to £960.9m, of which 3% was organic.  The rate of organic revenue growth was higher in JLT Re at 4%.  The Group's emerging markets businesses in Latin America and Asia saw good organic revenue growth, as did the US Specialty business.


Risk and Insurance trading margins contracted, primarily as a result of the US Specialty investment programme, but JLT Specialty maintained its trading margin and JLT Re grew to 21% (2015:19%).


The full year results of the Employee Benefits businesses were impacted by the disappointing performance of the UK and Ireland business in the first half.  The profits of UK EB rebounded in the second half of the year as anticipated and this provides confidence that the business is now firmly set for a return to growth.


The Group's International Employee Benefits operations saw headline revenue growth of 16%, which was primarily driven by foreign exchange, while organic revenue growth was 3%.  The trading margin rose 100 bps to 26%.

















































































£m



2016



2015



Underlying trading profit



193.7



187.5



Underlying share of associates



1.0



5.5



Net finance costs



(22.1)



(22.9)



Underlying profit before taxation



172.6



170.1



Exceptional items



(37.7)



(15.1)



Profit before taxation



134.9



155.0



Underlying tax expense



(52.3)



(47.5)



Tax on exceptional items



8.3



5.9



Non-controlling interests



(9.4)



(10.3)



Profit after taxation and non-controlling interests



81.5



103.1



Underlying profit after taxation and non-controlling interests



110.9



112.3



Diluted earnings per share



37.8p



48.0p♦



Underlying diluted earnings per share



51.4p



52.2p♦



Total dividend per share



32.2p



30.6p



Restated following revision to the calculation


The Group's underlying trading profit increased by 3% to £193.7m; at CRE it decreased by 9%.  Underlying profit before tax increased by 1% to £172.6m.  The trading profit margin reduced from 16.2% to 15.4%.


Excluding the US Specialty net investment of £27m, the Group's underlying profit before tax would have increased by 5% and the trading profit margin would have been broadly maintained at 18.1%, compared to 18.4% for 2015.


Reported profit before tax reduced by 13% to £134.9m, which includes the impact of exceptional costs of £37.7m and, as a consequence, reported EPS decreased to 37.8p.


OPERATIONAL REVIEW


The Group operates two sets of businesses: Risk & Insurance and Employee Benefits. The results of the businesses within each of these areas are reported in more detail below:


risk & insurance

































































































































































































































Total Revenue






Trading Margin






Underlying Trading Profit



£m



2016



Growth



CRE



Organic



2015






2016



CRE



2015






2016



CRE



2015













































JLT Specialty



327.5



5%



3%



3%



311.2






22%



21%



22%






73.1



67.8



68.3



JLT Re



195.6



13%



4%



4%



173.6






21%



19%



19%






40.5



34.8



32.4



JLT Australia & New Zealand



117.7



7%



(4%)



(3%)



109.5






29%



29%



30%






34.1



30.6



32.7



JLT Asia



90.3



18%



5%



5%



76.6






19%



18%



17%






16.8



14.8



12.7



JLT Latin America



71.4



13%



5%



4%



63.1






30%



27%



34%






21.1



17.6



21.3



JLT Insurance Services



46.8



(7%)



(11%)



(11%)



50.6






2%



-



12%






0.9



-



6.0



JLT EMEA



41.8



39%



28%



17%



30.1






16%



16%



20%






6.8



6.1



6.0



JLT US Specialty



41.3



77%



57%



52%



23.3






-



-



-






(27.0)



(24.0)



(20.5)



JLT Canada



19.2



(6%)



(14%)



(14%)



20.4






(2%)



(3%)



7%






(0.5)



(0.6)



1.5



JLT Insurance Management



9.3



13%



2%



2%



8.2






8%



8%



6%






0.8



0.7



0.5






960.9



11%



4%



3%



866.6






17%



16%



19%






166.6



147.8



160.9



JLT Specialty


JLT Specialty generated a 5% increase in headline revenues to £327.5m, or a 3% increase both at CRE and on an organic basis. Trading profit increased by 7% to £73.1m, with the trading margin maintained at 22%.


This was a strong performance in challenging trading conditions which saw insurance rates continuing their downward trend across all Specialty lines.  The business had to contend in particular with the reduced economic activity in the energy and marine sectors, which led to a lower total value of risk to insure.  To put this in context, it has been reported that in excess of $1 trillion of oil and gas capital projects in 2015 and 2016 were deferred, delayed or abandoned.  JLT's Energy and Marine divisions saw a £12m reduction in year on year revenues, despite increasing their client bases and market shares, and an estimated £8.5m negative impact on Group trading profit.


The revenue base of Specialty is, however, both diverse and well-balanced, which enables JLT better to withstand sector-specific challenges.  In 2016 there were particularly strong performances by a number of divisions - including Aviation, Construction, Cargo and Food & Agriculture - with higher revenues driven by client retention and market share penetration.


In addition there were important client wins in the Cyber division across a range of major financial institutions and corporate clients, which in turn helped to drive growth across JLT's Financial Lines specialty.


International Specialty Businesses


JLT's international Specialty businesses together delivered revenues of £437.8m, an increase of 15% (or 4% at CRE), with organic growth of 3%.


Australia and New Zealand


On a reported basis the Australia and New Zealand businesses saw revenues increase by 7% to £117.7m, although this translated to a 4% reduction on a CRE basis.  The trading environment has been particularly competitive in Australia and New Zealand and this, coupled with the continued significant pressure on rates in the region, masked a good underlying performance by the business, with high levels of client retention and a number of high profile client wins, particularly in the Financial Lines and Corporate divisions. The new business wins have included an increasing number of 'coast to coast' appointments, further underlining JLT's growing national Specialty presence. 


Asia


Asia produced a strong performance in the year, with a headline 18% increase in revenues to £90.3m and a 5% organic growth rate.  Trading profits grew strongly, with an increase of 17% at CRE.  This was a good performance when set against the challenging economic conditions and fierce insurance rating pressure in the region.


Latin America


JLT's Latin American business delivered good revenue growth of 13%, with organic revenue growth of 4%. Operations in Brazil performed strongly despite the difficult economic backdrop in that country.  While Latin American Risk and Insurance experienced good revenue growth, trading profit reduced year on year, reflecting the planned investment in building specialty capabilities across the region, the benefits of which are expected to start to be seen in 2017.


US Specialty


The US Specialty business continued to make progress in its second full year of operation, achieving organic revenue growth in excess of 50%, higher than the rate in 2015.  The business continued a programme of recruitment, with headcount reaching 223 employees at the year end.  Revenues for the year were $56m, up from $36m in 2015, while continued investment in the business resulted in losses of $37m (£27.0m).


The business now has a proven capability and a track record of winning business in specialist areas such as Financial Lines and Cyber, Energy, Real Estate and Entertainment.


The recently announced investment in, and partnership with, Construction Risk Partners, a highly respected construction specialist broker, which reported some $24m in revenues in 2016, will establish a market-leading Construction practice as part of the US Specialty business.  The acquisition also completes JLT's global Construction capability and enables it to serve international clients wherever they operate around the world. 


Given the investments to date in hiring and a steadily growing client list, the Group is confident that US Specialty revenues will once again see a significant uplift in 2017.  The progress that has now been made in the US Specialty business means that 2016 represented the high-water mark for the losses recorded in this business. 


 


JLT Re


JLT Re delivered a strong performance in the year, with reported revenues increasing by 13% to £195.6m, representing market-leading organic revenue growth of 4%, twice the rate of 2015.


This performance was delivered despite the well documented, multi-year decline in pricing across most lines of reinsurance and in most geographies and the continued consolidation in capital providers.  JLT Re has continued to grow revenues and profits steadily despite consecutive years of downward rating pressure.


JLT Re's trading profits increased to £40.5m, with an improved trading margin of 21% (2015: 19%). This margin improvement was achieved while the business continues to invest significantly for future growth, not only in recruiting leading talent to further strengthen its General Property, Casualty and Specialty lines, and its analytics capabilities, but also in its infrastructure and systems.  Two acquisitions were completed in December 2016 to deepen the capabilities of the business in Healthcare and the Central American region. 


JLT Re operates on a global basis, and all regions delivered organic revenue growth in the year.  North America continues to deliver a strong performance, with the benefits of the significant investments made in talent and infrastructure now beginning to be realised. 


Looking to 2017 and the recent January renewals, a reduced rate of decline in prices from prior years has been evident, with global property-catastrophe pricing falling by 5.7%; this compares with 8.2% in 2016 and double-digit reductions in the two years prior to that.    Casualty price reductions were, however, similar to those seen in 2016, with Specialty classes seeing more substantial rate reductions than other areas, but again, a reduced rate of decline was noted.  


Today JLT Re is positioned amongst the leading global reinsurance brokers, providing real choice and differentiation. The strong start to the year which this business had underlines how the strategic investments made are enabling it to continue to take market share from its competitors.


Employee Benefits

































































































































































Total Revenue






Trading Margin






Underlying Trading Profit



£m



2016



Growth



CRE



Organic



2015






2016



CRE



2015






2016



CRE



2015













































UK & Ireland



160.0



(4%)



(5%)



(8%)



167.4






8%



7%



8%






12.3



11.9



12.8



Asia



87.3



11%



(2%)



-



78.9






31%



31%



31%






27.2



23.7



24.5



Australia & New Zealand



27.5



36%



22%



4%



20.3






20%



20%



16%






5.5



4.9



3.3



Latin America



21.7



15%



10%



10%



18.9






17%



18%



19%






3.7



3.7



3.5



Europe, Middle East & Africa



1.9



13%



15%



14%



1.7






10%



10%



(17%)






0.2



0.2



(0.3)



Canada



2.0



47%



35%



35%



1.3






31%



31%



(17%)






0.6



0.6



(0.2)






300.4



4%



(1%)



(3%)



288.5






16%



16%



15%






49.5



45.0



43.6



UK & IRELAND employee benefits


Reported revenues for the year for JLT's UK EB business were £160.0m, compared to £167.4m in 2015, reflecting the final impact of the cessation of commission revenue from life assurers - which amounted to £5m earned in 2015.  Second half revenues of £85.1m exceeded those of the same period in 2015 of £82.4m following the successful completion of the restructure of the business, which was an encouraging indication of the stabilisation in the revenue run rate.


At the time of its 2016 interim results the Group indicated that the business would deliver the majority of its profits in the second half and this has been the case.  Trading profit for the year was £12.3m, compared to break even at the half year.


The business successfully completed its restructure programme, which has resulted in a flatter, more client-centric structure and a headcount reduction of over 300 employees.  The programme will deliver £14m of annualised savings in 2017, £9m of which were delivered in 2016 (£7m of that in the second half).


The focus in 2016 was, and will continue to be into 2017, on transitioning and rebalancing the business so that revenues and trading profit margins can grow.  The emphasis of the business continues to be on investing to strengthen and enhance platforms and to build out the sales function.


It is anticipated that UK EB will deliver organic revenue growth for 2017 and this, taken with the £5m residual benefit of the restructure programme, means the Group is confident that this business is making steady progress towards delivering a 15% trading profit margin for 2018.


INTERNATIONal Employee Benefits


JLT's EB businesses in other parts of the world performed well.  


Asia


In Asia, the Private Client Services (PCS) high net worth life insurance broking business saw some slowdown in first half revenues due to regional economic uncertainty in South Asia; however, steps were taken in the second half to broaden the range of products offered by the business.  This succeeded in pulling revenues back up from the half year position, which had been negative year on year. 


Australia and New Zealand


The Australia and New Zealand EB business achieved 36% revenue growth, following the acquisitions made in 2015 and 2016 of rehabilitation services providers in relation to workers compensation insurance.  Organic revenue growth was 4%.  With a series of major client wins as a result of the expanded capability of the business, accelerated revenue growth and improved margins are anticipated in 2017.  The trading margin of the business improved to 20% (2015:16%). 


Latin America


JLT's Latin America EB operations delivered organic revenue growth of 10%.  Performance was particularly notable in Colombia - driven by the workers compensation business - and in Brazil, despite the challenging local economic backdrop.  Investment has continued to be made in building out capabilities and expanding the offering in the region, which drove a small increase in trading profit but a 200 bps reduction in trading margin.


ASSOCIATES


The Group's income from its Associates reduced by £4.5m to £1.0m following the disposal of JLT's French associate in May 2015.


OPERATING COSTS


In 2016, total underlying operating costs (excluding exceptional items) increased by £100m, or 10%, to £1,067.6m. Of this increase, £53m resulted from changes in foreign exchange rates; £17m from investment in US Specialty; £9m from the continued growth of the JLT Specialty business; and £7m from the net impact of acquisitions and disposals.  Staff costs in 2016 (outside of US Specialty) increased by £21m as a result of investment in the Fine Arts division in JLT Specialty, the build out of the Latin America operations and investments in other markets including Europe, Middle East and Africa.  The mix of the cost base remained unchanged, with staff and premises costs as the major individual expense items.


In 2017, the cost of the Group's operations in London will increase by approximately £7m as the business increases the space it occupies to accommodate growth in the business and other costs are incurred, such as higher UK business rates and the UK apprenticeship levy.


The Group's underlying operating cost ratio increased by 80 basis points to 84.6% of total revenues.  This reflected the impact of a higher level of planned investment in US Specialty, the trading loss incurred by Thistle UK in the year and the 2015 non-recurring reduction of £5.5m in Head Office costs. The impact of the continued investment in US Specialty was the principal reason for the increase in the staff costs to revenue ratio from 61.0% to 62.3%.


EXCEPTIONAL ITEMS


Total net exceptional costs were £37.7m (2015: £15.1m).  These were primarily driven by net costs of £21.1m relating to a litigation settlement, which was marginally less than originally anticipated; restructuring costs of £13.9m relating to the UK EB business; £1.2m of acquisition and related costs; and a £1.6m loss mainly on the disposal of a business in Indonesia.  The UK EB restructuring programme is complete and the remaining £5m of benefit is expected to be captured in 2017.


 


BalanCe Sheet and funding


The net assets of the Group increased to £351m from £331m. The key movements were:


•    an increase in goodwill of £47m, almost entirely due to the re-translation of goodwill recognised in foreign currencies.  The Group completed 7 acquisitions for a total consideration of £25.3m, the goodwill impact of which was offset by the 2 disposals in the year;


•    an increase in the investments in Associates related to the increase to 49% (from 26%) in the Group's interest in its Indian Associate business.  Approximately £6m of the increase related to foreign exchange;


•    a net increase in working capital of £31m which included £14m in respect of foreign exchange re-translation.  JLT Specialty's debtors increased in line with their business, with the debtor ageing profile remaining similar year-on-year.  JLT Re's debtors increased as a result of the nature of their business where, for certain lines, the collection period is more than 12 months from initial income recognition; and


•    an increase in the pension liability to £198m (2015: £130m), as a result of changes in corporate bond yields and inflation rates.  The deferred tax asset attributable to this movement was recognised in the tax line.


The Group continues to be well funded, with an appropriate mix of short and long-term debt, with a range of maturities that extend to 2029.


Net debt, defined as own funds less total borrowings net of transaction costs, was £496m (2015: £440m).  At 31 December 2016, the Group had committed long-term unsecured revolving credit facilities of £500m and drawn private placement loan notes equivalent to £508m, resulting in total committed debt facilities equivalent to £1,008m, with maturities between 2017 and 2029.  In January 2017, the Group agreed with its relationship banks an extension of its core revolving credit facility by a further one year to a new maturity date of 2022.


Gross borrowings were £688m, which includes £671m of borrowings under the Group's committed facilities, leaving unutilised committed facilities headroom of £337m.


Net finance costs in 2016 reduced by £1m to £22m.  They are expected to increase in 2017, due to acquisition spend.


The Net Debt to EBITDA ratio, calculated on a bank covenant basis, reduced from 1.7:1 at the end of 2015 to 1.6:1 at the end of 2016.  This remains well within JLT's bank covenant and continues to reflect an investment grade profile.  JLT will continue to invest in its businesses in line with its strategy and the Group anticipates keeping the Net Debt to EBITDA ratio within a conservative range.


cashflow


The Group primarily monitors operational cash flows, which report cash and net debt movements but exclude fiduciary funds; the statutory cash flows include movements in these funds.


In 2016, the Group generated £238m of EBITDA, which included £31m of outflows in respect of exceptional items (2015: £12m).  Operational free cash flow was £141m, which was lower as a percentage of EBITDA compared to 2015, but higher as a percentage than the prior three years.


Within operational free cash flow, the net increase in working capital in the year is predominantly driven by an increase in JLT Specialty and JLT Re debtors in line with their growth, but without a deterioration in the ageing profile. Annual capex outflow reduced in the year, primarily driven by a £15m reduction in staff related items, with the balance being split between IT and premises.


The net effect of acquisitions and disposals, including deferred consideration adjustments, was a cash inflow of £7m.


The tax charge for the year was £44.0m, representing an effective tax rate of 32.6% (2015: 26.8%). The underlying tax expense was £52.3m, representing an effective tax rate of 30.3% (2015: 27.9%). The year-on-year increase in the underlying tax expense was mainly due to deferred tax assets not being recognised in respect of certain of the Group's overseas operations, combined with the global nature of JLT's business and the different tax rates across those geographies.


Taken together, the net cash outflow of £15m for 2016 was relatively small compared to that of prior periods, and not unexpected given the growth and investment across JLT.  2015 cash flows were influenced by the proceeds from the sale of the Group's French associate in May 2015.


DIVIDENDS


Subject to shareholder approval, the final dividend will be increased to 20.6p per share for the year ended 31 December 2016 (2015: 19.5p) and will be paid on 4 May 2017 to shareholders on the register at 31 March 2017. This brings the total dividend for the year to 32.2p per share, compared to 30.6p for the prior year, an increase of 5.2%. 


BOARD AND SENIOR MANAGEMENT DEVELOPMENTS


There were a number of Board and senior management changes during the year.  James Twining stepped down from the Board with effect from 26 April 2016.  Bruce Carnegie-Brown joined the Board as a Non-executive Director on 1 May 2016 and succeeded Richard Harvey as Chairman of the Remuneration Committee on 1 November 2016.  Bruce will unfortunately be stepping down from the Board at the end of June, following his appointment as Chairman of Lloyd's of London.  Lord Leach, a Non-executive Director for many years, sadly died on 12 June 2016.  Adam Keswick joined the Board as Deputy Chairman with effect from 1 September 2016.  Richard Harvey retired from the Board with effect from 31 December 2016 and Jonathan Dawson succeeded him as Senior Independent Director with effect from the same date.


Mike Rice, CEO of JLT's US Specialty business, and William Nabarro, Special Adviser to the Group Chief Executive, both joined the Group Executive Committee with effect from 1 May 2016.  Lucy Clarke, Deputy CEO of JLT Specialty, joined the Group Executive Committee with effect from 26 September 2016. 


With effect from 28 February 2017, the following senior management changes are being made: Mike Methley is being appointed as Group Chief Operating Officer; Mark Drummond Brady becomes CEO of JLT Latin America and Chairman of JLT Canada, in addition to his current role as Deputy Group CEO; Mike Reynolds, Global CEO of JLT Re, assumes responsibility for JLT Insurance Management; and Bala Viswanathan, CEO of JLT UK & Ireland Employee Benefits, also becomes International Chairman of Employee Benefits.


impact of foreign exchange


There are two components to the Group's foreign exchange (FX) exposure: translation of overseas results into sterling; and transactional exchange where local revenues and costs are denominated in different currencies, which the Group seeks to mitigate by hedging where appropriate.


The translation of overseas results is done using an average rate.  Although the USD is a large driver of FX impacts, it is only one of approximately 30 currencies which affect the ultimate outcome in a given period.


The weakening of sterling after the EU referendum in June had a significant impact in the year.  While the Group's hedging programme has the effect of smoothing the achieved rate on USD transactional revenues, the scale of the sterling depreciation nonetheless saw material improvement in the achieved rate, especially in the second half of 2016.  Of the overall £22.2m gain at underlying profit before tax level, £13.4m related to transactional FX and £8.8m related to the translation of overseas results into sterling.


The FX market currently remains volatile, consequently it is not possible to predict the impact of foreign exchange on the Group's 2017 results with any certainty. 


restatement of EPS


During the year a review was undertaken of the application of IAS 33 "Earnings per share", following changes made during 2014 and 2015 to the terms of certain staff share awards that were classified as "Participating Equity Instruments" for the purposes of calculating Earnings per Share ("EPS").  This review has led to a restatement of the reported number of ordinary shares in 2015, resulting in a small increase of 1.6p in basic EPS for 2015, from 47.0p to 48.6p and an increase of 1.0p in reported diluted EPS for 2015, from 47.0p to 48.0p. 


OUTLOOK


JLT has entered 2017 with good momentum across all of its businesses.  The Group is therefore confident that it will deliver organic revenue growth more in line with historical rates, generating sustained year-on-year financial progress.






Consolidated income statement
for the year ended 31 December 2016















































































































































































































Notes



2016

£'000



2015

£'000



Fees and commissions



2



1,256,556



1,151,392



Investment income



2,4



4,730



3,689



Total revenue



2



1,261,286



1,155,081















Salaries and associated expenses



6



(794,363)



(727,334)



Premises






(66,849)



(61,167)



Other operating costs






(209,518)



(163,685)



Depreciation, amortisation and impairment charges



3



(34,951)



(30,538)



Operating profit



1,2,3



155,605



172,357



Analysed as:












Operating profit before exceptional items



1,2



193,672



187,462



Acquisition and integration costs



3



(1,245)



(21,155)



Restructuring costs



3



(13,900)



(9,878)



Net litigation costs



3



(21,114)



(1,556)



Net gain on sale of associate



3



-



18,595



Other exceptional items



3



(1,808)



(1,111)



Operating profit



1,2,3



155,605



172,357



Finance costs



5



(24,225)



(24,473)



Finance income



5



2,147



1,612



Finance costs - net



5



(22,078)



(22,861)



Share of results of associates






1,353



5,531



Profit before taxation



1,2



134,880



155,027



Income tax expense



8



(44,018)



(41,586)



Profit for the year                   






90,862



113,441



Profit attributable to:












Owners of the parent



2



81,466



103,099



Non-controlling interests






9,396



10,342









90,862



113,441



Earnings per share attributable to the owners of the parent during the year

(expressed in pence per share)



9






restated



Basic earnings per share






38.6p



48.6p



Diluted earnings per share






37.8p



48.0p















 


 


Consolidated statement of comprehensive income
for the year ended 31 December 2016



























































































































































Notes



2016

£'000



2015

£'000



Profit for the year






90,862



113,441















Other comprehensive (expense)/income
























Items that will not be reclassified to profit or loss












Remeasurement of post-employment benefit obligations



31



(71,642)



43,149



Taxation thereon






11,850



(8,856)



Total items that will not be reclassified to profit or loss






(59,792)



34,293















Items that may be reclassified subsequently to profit or loss












Fair value gains/(losses) net of tax:












- available-for-sale






42



(34)



- available-for-sale reclassified to the income statement






(181)



10



- cash flow hedges






(41,487)



(12,569)



Currency translation differences






105,369



(13,622)



Total items that may be reclassified subsequently to profit or loss






63,743



(26,215)



Other comprehensive income net of tax






3,951



8,078



Total comprehensive income for the year            






94,813



121,519



Attributable to:       












Owners of the parent






80,889



112,552



Non-controlling interests






13,924



8,967









94,813



121,519















 


Consolidated balance sheet
as at 31 December 2016

















































































































































































































































































Notes



2016

£'000



2015

£'000



NET OPERATING ASSETS












Non-current assets












Goodwill



11



543,013



496,166



Other intangible assets



12



101,963



104,323



Property, plant and equipment



13



64,330



63,167



Investments in associates



14



50,928



41,180



Available-for-sale financial assets



15,20



23,805



15,466



Derivative financial instruments



16,20



117,043



33,684



Retirement benefit surpluses



31



509



366



Deferred tax assets



22



70,088



51,023









971,679



805,375



Current assets












Trade and other receivables



17



588,640



528,595



Derivative financial instruments



16,20



7,930



1,544



Available-for-sale financial assets



15,20



116,933



19



Cash and cash equivalents



18,20



939,945



901,087









1,653,448



1,431,245



Current liabilities












Borrowings



20,21



(54,729)



(22,338)



Trade and other payables



19



(1,257,782)



(1,086,278)



Derivative financial instruments



16,20



(33,136)



(6,115)



Current tax liabilities






(5,119)



(8,749)



Provisions for liabilities and charges



23



(8,826)



(18,594)









(1,359,592)



(1,142,074)



Net current assets






293,856



289,171



Non-current liabilities












Borrowings



20,21



(633,103)



(581,244)



Derivative financial instruments



16,20



(69,652)



(33,726)



Deferred tax liabilities



22



(11,378)



(16,978)



Retirement benefit obligations



31



(198,921)



(130,753)



Provisions for liabilities and charges



23



(1,571)



(1,043)









(914,625)



(763,744)









350,910



330,802



TOTAL EQUITY












Capital and reserves attributable to the owners of the parent












Ordinary shares



24



11,008



11,008



Share premium



24,26



104,111



104,074



Fair value and hedging reserves



26



(54,453)



(12,827)



Exchange reserves



26



83,561



(17,280)



Retained earnings






183,919



227,362



Shareholders' equity






328,146



312,337



Non-controlling interests






22,764



18,465









350,910



330,802



 


                                                                                                                                                                                                               


Consolidated statement of changes in equity
for the year ended 31 December 2016





















































































































































































































































































































Notes



Ordinary shares

£'000



Other reserves £'000



Retained earnings £'000



Shareholders' equity

£'000



Non- controlling

interests £'000



Total

equity

£'000



Balance at 1 January 2016






11,008



73,967



227,362



312,337



18,465



330,802



Profit for the period






-



-



81,466



81,466



9,396



90,862



Other comprehensive income/(expense) for the year






-



59,215



(59,792)



(577)



4,528



3,951



Total comprehensive income for the year






-



59,215



21,674



80,889



13,924



94,813



Dividends



10



-



-



(67,962)



(67,962)



(8,435)



(76,397)



Amounts in respect of share based payments:
























- reversal of amortisation net of tax






-



-



24,952



24,952



-



24,952



- shares acquired






-



-



(17,809)



(17,809)



-



(17,809)



Acquisitions



29



-



-



-



-



(1,159)



(1,159)



Disposals



30



-



-



-



-



(31)



(31)



Change in non-controlling interests






-



-



(4,298)



(4,298)



-



(4,298)



Issue of share capital



24



-



37



-



               37



-



37



Balance at 31 December 2016






11,008



133,219



183,919



328,146



22,764



350,910






















































Notes



Ordinary shares

£'000



Other

reserves

£'000



Retained earnings

£'000



Shareholders' equity

£'000



Non-

controlling

interests

£'000



Total

equity

£'000



Balance at 1 January 2015






 11,006



 98,674



 178,932



 288,612



 17,940



 306,552



Profit for the period






 -



 -



 103,099



 103,099



 10,342



 113,441



Other comprehensive (expense)/

income for the period






 -



 (24,840)



 34,293



 9,453



 (1,375)



 8,078



Total comprehensive (expense)/

income for the period






 -



 (24,840)



 137,392



 112,552



 8,967



 121,519



Dividends



10



 -



-



 (64,484)



 (64,484)



 (8,923)



 (73,407)



Amounts in respect of share based payments:
























- reversal of amortisation net of tax






 -



 -



 21,740



 21,740



 -



 21,740



- shares acquired






 -



 -



 (26,056)



 (26,056)



 -



 (26,056)



Acquisitions






 -



 -



-



 -



 (787)



 (787)



Disposals






 -



 -



 -



 -



 1,268



 1,268



Change in non-controlling interests






 -



 -



 (20,162)



 (20,162)



 -



 (20,162)



Issue of share capital



24



 2



 133



 -



 135



 -



 135



Balance at 31 December 2015






 11,008



 73,967



 227,362



 312,337



 18,465



 330,802



 


Consolidated statement of cash flows
for the year ended 31 December 2016





























































































































































































































Notes



2016

£'000



2015

£'000



Cash flows from operating activities












Cash generated from operations



28



166,712



215,380



Interest paid






(17,403)



(16,448)



Interest received






6,639



5,116



Taxation paid






(46,241)



(37,003)



Increase in net insurance broking payables






137,510



883









247,217



167,928



Dividend received from associates






935



800



Net cash generated from operating activities






248,152



168,728



Cash flows from investing activities












Purchase of property, plant and equipment



13



(9,556)



(15,183)



Purchase of other intangible assets



12



(30,215)



(45,940)



Proceeds from disposal of property, plant and equipment






928



1,282



Acquisition of businesses, net of cash acquired



29



(13,381)



(20,824)



Acquisition of associates






(3,013)



(411)



Proceeds from disposal of businesses, net of cash disposed



30



15,141



(122)



Proceeds from disposal of associates



2



-



80,235



Purchase of available-for-sale financial assets



15



(107,636)



(5,081)



Proceeds from disposal of available-for-sale financial assets






20



5,039



Purchase of available-for-sale other investments



15



-



(1,964)



Proceeds from disposal of available-for-sale other investments






303



243



Net cash used in investing activities






(147,409)



(2,726)



Cash flows from financing activities












Dividends paid to owners of the parent






(66,388)



(63,094)



Purchase of shares






(17,809)



(26,056)



Proceeds from issuance of ordinary shares



24



37



135



Proceeds from borrowings






355



17,637



Repayments of borrowings






(5,056)



(50,118)



Dividends paid to non-controlling interests






(8,435)



(8,923)



Net cash used in financing activities






(97,296)



(130,419)



Net increase in cash and cash equivalents






3,447



35,583



Cash and cash equivalents at beginning of year






901,087



871,246



Exchange gains/(losses) on cash and cash equivalents






35,411



(5,742)



Cash and cash equivalents at end of year



18



939,945



901,087



 


 


SIGNIFICANT ACCOUNTING POLICIES (UNAUDITED)
for the year ended 31 December 2016


BASIS OF PREPARATION


Compliance with IFRS


The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) and the Companies Act 2006 applicable to Companies reporting under IFRSs. The financial statements comply with IFRS as issued by the International Accounting Standards Board (IASB).


Historical cost convention


The consolidated financial statements have been prepared on a going concern basis, under the historical cost convention, except for

the following:


the available-for-sale financial assets, financial assets and liabilities (including derivative financial instruments) are measured at fair value; and


defined benefit pension plans where plan assets are measured at fair value.


STANDARDS, AMENDMENTS AND INTERPRETATIONS EFFECTIVE IN 2016


No new standards, amendments or interpretations, effective for the first time for the financial year beginning on or after 1 January 2016 have

had a material impact on the Group.


BASIS OF CONSOLIDATION


Subsidiaries


Subsidiaries are all entities (including structured entities) over which the Group has control.


The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.


Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.


The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.


Acquisition related costs are expensed as incurred.


If a business combination is achieved in stages, the fair value of the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.


Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a charge to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.


The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement. Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.


Transactions with non-controlling interests


Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions that is, as transactions with the owners in their capacity as owners.


The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.


Disposal of subsidiaries


When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss.


The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.


This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.


Associates


Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting.


Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition.


The Group's investment in associates includes goodwill identified on acquisition.


If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.


The Group's share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment.


When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.


Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associates have been modified where necessary to ensure consistency with the policies adopted by the Group.


SEGMENT REPORTING


Operating segments are reported in a manner consistent  with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.


FOREIGN CURRENCIES


Functional and presentation currency


Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency').


The consolidated financial statements are presented in sterling, which is the Group's functional and presentational currency.


Transactions and balances


Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in other comprehensive income.


Group companies


The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentational currency are translated into the presentational currency as follows:


assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;


income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and


all resulting exchange differences are recognised in other comprehensive income. On consolidation exchange differences arising from the translation of net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.


Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.


GOODWILL ARISING ON CONSOLIDATION


Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable net assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is shown separately on the Balance Sheet. Goodwill on acquisitions of associates is included in investments in associates.


Goodwill is not amortised but it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.


Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units, or groups of cash generating units, for the purpose of impairment testing. Cash generating units represent the lowest level of geographical and business segment combinations that the Group uses for internal reporting purposes.


OTHER INTANGIBLE ASSETS


Computer software


Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire them and bring them to use. These costs are amortised over their estimated useful lives. Costs associated with maintaining computer software programmes are recognised as an expense as incurred.


Development costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the software development employee costs and an appropriate portion of relevant overheads. Capitalised development costs are amortised over their estimated useful lives from the point when the asset is ready to use.


The rates of amortisation are between 14% and 100% per annum.


Capitalised employment contract payments


The Group makes payments to certain key employees in recognition of them signing a long-term employment contact, usually three to five years. These payments are capitalised as intangible assets since legal rights protect the expected benefits that the Group will derive from the contracts.


The asset recognised is then amortised over the duration of the underlying contract within salaries and associated expenses.


Other


For acquisitions completed after 1 January 2004, the business acquired is reviewed to identify assets that meet the definition of an intangible asset per IAS 38. Examples of such assets include customer contracts, expectations of business renewal and contract related customer relationships. These assets are valued on the basis of the present value of future cash flows and are amortised to the income statement over the life of the contract or their estimated economic life.


The current maximum estimated economic life is fifteen years.


IMPAIRMENT OF ASSETS


Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.


The recoverable amount is the higher of an asset's fair value less costs to sell and value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest  levels for which there are separately identifiable cash flows (cash-generating units).


PROPERTY, PLANT AND EQUIPMENT


Assets are stated at their net book amount (historical cost less accumulated depreciation). Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated to write off the cost of such assets over their estimated useful lives.


The principal rates of depreciation are as follows:


Freehold land and buildings - between 0% and 2% per annum.


Leasehold improvements - between 10% and 20% per annum or over the life of the lease.


Furniture and office equipment - between 10% and 20% per annum.


Computer hardware - between 20% and 100% per annum.


Motor vehicles - between 25% and 33.33% per annum.


The depreciation rates are reviewed on an annual basis.


FINANCIAL ASSETS


The Group classifies its financial assets as loans and receivables and available-for-sale assets. The classification depends upon the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.


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 balance sheet date.


The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. Loans and receivables are carried at amortised cost.


Available-for-sale financial assets


Available-for-sale financial assets are categorised into one of two categories:


Investments and deposits consist mainly of fixed term deposits, bonds and certificates of deposit. These investments are held at fair value and are classified between current and non-current assets according to the maturity date.


Other investments include securities and other investments held for strategic purposes and some debt instruments. These investments are held at fair value unless a fair value cannot be accurately determined in which case they are held at cost less any provision for impairment.


Interest on deposits and interest-bearing investments is credited as it is earned.


Regular purchases and sales of financial assets are recognised on the trade date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.


Available-for-sale assets are subsequently carried at fair value.


The fair values of quoted investments are determined based upon current bid price.


When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement.


Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of finance income. Dividends on available-for-sale equity instruments are recognised in the income statement as part of finance income when the Group's right to receive payments is established.


Offsetting financial instruments


Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company or the counterparty.


INSURANCE BROKING RECEIVABLES AND PAYABLES


Insurance brokers act as agents in placing the insurable risks of their clients with insurers and, as such, are not liable as principals for amounts arising from such transactions. In recognition of this relationship, debtors from insurance broking transactions are not included as an asset of the Group. Other than the receivable for fees and commissions earned on a transaction, no recognition of the insurance transaction occurs until the Group receives cash in respect of premiums or claims, at which time a corresponding liability is established in favour of the insurer or the client.


In certain circumstances, the Group advances premiums, refunds or claims to insurance underwriters or clients prior to collection.


These advances are reflected in the consolidated balance sheet as part of trade receivables.


TRADE RECEIVABLES


Trade receivables are recognised initially at fair value and subsequently at amortised cost, less provision for impairment.


A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, dispute, default or delinquency in payments are considered indicators that the receivable is impaired.


The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement.


When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables.


CASH AND CASH EQUIVALENTS


Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.


Whilst held in the Group's non-statutory trust accounts under appropriate client money regulation, fiduciary funds held are controlled by the Group and economic benefits are derived from them. As such these funds are recognised as an asset on the Group's balance sheet.


TRADE PAYABLES


Trade payables are initially recognised at fair value and subsequently measured at amortised cost except for deferred and contingent consideration which is always measured at fair value based on the underlying criteria of each transaction.


BORROWINGS


Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Borrowings are recognised initially at fair value, net of transaction costs incurred. They are subsequently stated at amortised cost using the effective interest rate method.


DEFERRED INCOME TAX


The charge for taxation is based on the result for the year at current rates of tax and takes into account deferred tax.


Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not recognised. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.


Deferred income tax is charged or credited to equity in respect of any items, which is itself either charged or credited directly to equity.


Any subsequent recognition of the deferred gain or loss in the consolidated income statement is accompanied by the corresponding deferred income tax.


Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.


Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the Group controls the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.


EMPLOYEE BENEFITS


Pension obligations


The Group operates a number of defined benefit pension schemes, and a number of employees are members of defined contribution pension schemes.


Full actuarial valuations of the Group's defined benefit schemes are carried out at least every three years.


A qualified actuary updates these valuations to 31 December each year. For the purposes of these annual updates, scheme assets are included at market value and scheme liabilities are measured on an actuarial basis using the projected unit credit method; these liabilities are discounted at the current rate of return of a high quality corporate bond of equivalent currency and term. The defined benefit surplus or deficit is calculated as the present value of defined benefit obligations less the fair value of the plan assets and is included on the Group's balance sheet. Surpluses are included only to the extent that they are recoverable through reduced contributions in the future or through refunds from the schemes. The net interest on the defined benefit surplus/deficit is included within finance costs. Actuarial gains and losses, including differences between the expected and actual return on scheme assets, are recognised through the consolidated statement of comprehensive income.


A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.


The costs of the Group's defined contribution pension schemes are charged to the income statement in the period in which they fall due.


 


Share-based compensation


The Group operates a number of equity-settled, share-based compensation plans. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense.


The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity.


The proceeds received net of any directly attributable transaction costs are credited to share capital (at nominal value) and share premium (excess over nominal value) when the options are exercised.


PROVISIONS FOR LIABILITIES AND CHARGES


A provision is recognised where there is a present obligation, whether legal or constructive, as a result of a past event for which it is probable that a transfer of economic benefits will be required to settle the obligation and a reasonable estimate can be made of the amount of the obligation. Where appropriate the Group discounts provisions to their present value. The unwinding of the provision discounting is included as an 'interest expense' within finance costs in the income statement.


REVENUE


Fees and commissions


Fees and commissions are derived from three principal sources:


Insurance broking


Income relating to insurance broking is accounted for at the later of policy inception date or when the policy placement has been completed and confirmed.


Where there is an expectation of future servicing requirements an element of income relating to the policy is deferred to cover the associated contractual obligation.


Employee benefits


Income relating to employee benefit services includes fees and commissions. Fees are charged on a time-cost or fixed-fee basis and are recognised in line with the performance of the underlying service.


Commission is recognised upon confirmation of the underlying policy or product.


Other services


Fees and other income receivable are recognised in the period to which they relate and when they can be measured with reasonable certainty.


Investment income


Investment income arises from the holding of cash and investments relating to fiduciary funds and is recognised on an accruals basis.


EXCEPTIONAL ITEMS


Exceptional items are separately identified to provide greater understanding of the Group's underlying performance. Items classified as exceptional items may include, but are not limited to: gains or losses arising from the sale of businesses and investments; closure costs for businesses; restructuring costs; professional fees in respect of acquisitions; post acquisition integration costs; post acquisition and disposal adjustments to balance sheet items; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into the underlying business performance. Items of a non-recurring and material nature are charged or credited to operating profit and are classified to the appropriate income statement headings.


LEASES


Assets held under leasing agreements, which transfer substantially all the risks and rewards of ownership to the Group are included in property, plant and equipment. The capital elements of the related lease obligations are included in liabilities. The interest elements of the lease obligations are charged to the income statement over the period of the lease term.


The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the

lease term.


Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.


DERIVATIVE FINANCIAL INSTRUMENTS


The Group only enters into derivative financial instruments in order to hedge underlying financial and commercial exposures. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their

fair value.


The method of recognising the resulting gain or loss is dependent on the nature of the item being hedged.


The Group designates derivatives as either a hedge of the  fair value of a recognised asset or liability (fair value hedge), a hedge of a forecasted transaction or of the foreign currency risk on a firm commitment (cash flow hedge), or a hedge of a net investment in a foreign entity (net investment hedges).


Changes in the fair value of derivatives that are designated and qualify as fair value hedges and that are highly effective, are recorded in the income statement, along with any changes in the fair value of the hedged asset or liability that is attributable to the hedged risk.


Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and that are highly effective, are recognised in equity. Where the forecasted transaction or firm commitment results in the recognition of a non-financial asset or of a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. Otherwise, amounts deferred in equity are transferred to the consolidated income statement and classified as income or expense in the same periods during which the hedged firm commitment or forecasted transaction affects the income statement.


The gain or loss relating to the ineffective portion is recognised immediately in the income statement. When a hedging instrument expires or is sold, any cumulative gain or loss existing in equity at that time remains in the hedging reserves and is recognised in the income statement when a hedge no longer meets the criteria for hedge accounting or when the committed or forecasted transaction ultimately occurs. When a committed or forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately recognised in the income statement.


DIVIDEND DISTRIBUTION


Dividends proposed or declared after the balance sheet date are not recognised as a liability at the balance sheet date. Final dividends are recognised as a charge to equity once approved and interim dividends are charged once paid.


FINANCIAL AND CAPITAL RISK MANAGEMENT


The Group's exposure to financial risks and its financial and capital management policies are detailed in the Finance Director's Review and the Risk Management Report of the Annual Report 2016.


CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS


Estimates and judgments used in preparing the financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting accounting estimates will, by definition, seldom equal the related actual results.


The estimates and assumptions that have a significant effect on the carrying amounts of assets and liabilities are discussed below.


a) Fair value estimation


The fair value of financial instruments traded in active markets (such as available-for-sale) is based upon quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price.


The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair values of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.


The fair value of acquired intangible assets is estimated based upon the present value of modelled related expected future cash flows.


Judgement may be applied in the determination of the growth rates, discount rates and the expected cash flows.


b) Impairment of assets


The Group tests annually whether goodwill and other assets that have indefinite useful lives suffered any impairment. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its recoverable amount.


The recoverable amount of an asset or a cash generating unit is determined based on value-in-use calculations prepared on the basis of management's assumptions and estimates. This determination requires significant judgment. In making this judgment, the Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost; and the financial health of and near-term business outlook for the investment, including factors such as industry and sector performance, changes in regional economies and operational and financing cash flow.


c) Income taxes


The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.


 


d) Pension obligations


The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions.


The assumption used in determining the net cost or income for pension obligations is a discount rate based upon high quality corporate bonds.


Any changes in the assumptions may impact the carrying amount of pension obligations, the charge in the income statement, or statement of

comprehensive income.


The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations.


In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability. Other key assumptions for pension obligations are based in part on current market conditions. As well as the discount rate, the inflation rates and life expectancy are also key assumptions.


To set the price inflation assumptions the Group considers market expectations of inflation at the appropriate durations. Adjustments are made to these rates where necessary to reflect an inflation risk premium.


In determining the life expectancy assumptions the Group considers the mortality assumptions used by the Trustees of the pension schemes in their latest actuarial valuations and also mortality guidance laid out by legislation. This enables the Group to determine a best estimate of life expectancy that is appropriate for accounting purposes.


e) Errors and omissions liability


During the ordinary course of business the Group can be subject to claims for errors and omissions made in connection with its broking activities.


A balance sheet provision is established in respect of such claims when it is probable that the liability has been incurred and the amount of the liability can be reasonably estimated.


The Group analyses its litigation exposures based on available information, including external legal consultation where appropriate, to assess its potential liability.


The outcome of the currently pending and future proceedings cannot be predicted with certainty. Thus, an adverse decision in a current or future lawsuit could result in additional costs that are not covered, either wholly or partially, under insurance policies and are in excess of the presently established provisions. It is possible therefore that the financial position, results of operations or cash flows of the Group could be materially affected by the unfavourable outcome of litigation.


FUTURE DEVELOPMENTS


The following standards, other than IFRS 16, have been published and are not mandatory for 31 December 2016 reporting periods and the Group has not adopted them early.


Accounting standards and interpretation applicable on or after 1 January 2017


IFRS 9 -Financial Instruments


IFRS 9, ('Financial instruments') addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2015. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.


 


The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the 'hedged ratio' to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted.


The changes to the hedge accounting requirements are not expected to have a material impact on the Group. The classification of Financial Instruments is not expected to have a material impact on the Group, with the exception of  any items that are classified as fair value through OCI, where there will be no recycling through the Income statement. The change to an expected loss model will mainly focus of the Group's impairment of trade receivables. The impact of this is being assessed.


 


IFRS 15 - Revenue from contracts with customers


IFRS 15 ('revenue from contracts with customers') is effective for annual periods beginning on or after 1 January 2018 and addresses revenue recognition for customer contracts, with particular focus on aligning revenue recognition with the separate and distinct performance obligation to the customer.  The standard replaces IAS 18 ('revenue') and IAS 11 ('construction contracts') and related interpretations. The Group's review of the standard is on-going, but will implement in January 2018, reporting revenues on this basis for the half year period ending 30 June 2018 and full year period ending 31 December 2018. Restatements of 2017 revenues for these corresponding periods will be completed at those intervals.


Under existing accounting policies, the primary trigger for revenue recognition is the policy inception date, and this is anticipated to remain the same under the new standard. The Group defers some elements of revenue currently, primarily to reflect anticipated claims handling activity but is considering non-claims servicing requirements under the new standard. At this time, the Group is not able to conclude or quantify the impact of the new standard on revenues, but it is likely that further elements of revenue will be deferred for both insurance broking arrangements and long-term administrative contracts. The standard also requires costs to be aligned with revenue recognition wherever possible and this is also being reviewed.


IFRS 16 - Leases


IFRS 16, ('Leases') requires lessees to recognise a lease liability reflecting future lease payments and a 'right-of-use asset' for virtually all lease contracts. This differs from IAS 17 'Leases' where a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet) was required.


The standard is effective for annual periods beginning on or after 1 January 2019 and earlier application is permitted subject to EU endorsement. The Group is yet to assess IFRS 16's full impact.


 


 


Notes to the financial statements
For the year ended 31 December 2016


1. Alternative income statement


The format of the consolidated income statement conforms to the requirements of IFRS. The alternative income statement set out below, which is provided by way of additional information, has been prepared on a basis that conforms more closely to the approach adopted by the Group in assessing its performance. The statement provides a reconciliation between the underlying results used by the Group to assess performance and the IFRS income statement.















































































Year ended 31 December 2016






Underlying


profit


£'000



Exceptional


items


£'000



Total


£'000



Fees and commissions



1,256,556



-



1,256,556



Investment income



4,730



-



4,730



Salaries and associated expenses



(784,664)



(9,699)



(794,363)



Premises



(64,307)



(2,542)



(66,849)



Other operating costs



(184,173)



(25,345)



(209,518)



Depreciation, amortisation and impairment charges



(34,470)



(481)



(34,951)



Trading profit



193,672



(38,067)



155,605



Finance costs - net



(22,078)



-



(22,078)



Share of results of associates



975



378



1,353



Profit before taxation



172,569



(37,689)



134,880



 















































































Year ended 31 December 2015






Underlying


profit


£'000



Exceptional


items


£'000



Total


£'000



Fees and commissions



1,151,392



-



1,151,392



Investment income



3,689



-



3,689



Salaries and associated expenses



(704,435)



(22,899)



(727,334)



Premises



(58,852)



(2,315)



(61,167)



Other operating costs



(173,794)



10,109



(163,685)



Depreciation, amortisation and impairment charges



(30,538)



-



(30,538)



Trading profit



187,462



(15,105)



172,357



Finance costs - net



(22,861)



-



(22,861)



Share of results of associates



5,531



-



5,531



Profit before taxation



170,132



(15,105)



155,027



 


In 2015 total other operating costs includes the gain on the disposal of the Group's interest in Milestone, the holding company of Siaci Saint Honoré, and elements of the net litigation costs.


 


2. Segment information


Management has determined its operating segments based on the analysis used to make strategic decisions.


Business segment analysis


The Group is organised on a worldwide basis into three main segments: Risk & Insurance, Employee Benefits and Head Office & Other operations. These segments are consistent with the internal reporting structure of the Group.


The Risk & Insurance segment comprises JLT's global specialist, wholesale, reinsurance broking, personal lines and SME activities. The Employee Benefits segment consists of pension administration, outsourcing and employee benefits consultancy, healthcare and wealth management activities. Certain Risk & Insurance and Employee Benefits operating segments have been disclosed within the reporting segments given their individual size. The Head Office & Other segment consists mainly of holding companies, central administration functions, the Group's captive insurance companies and the Group's investments in associates.


JLT USA now qualifies as a reportable operating segment and as a result comparatives have been restated.


Segment results


Management assesses the performance of the operating segments based upon a measure of underlying trading profit. Segment results include the net income or expense derived from the trading activities of the segment together with the investment income earned on fiduciary funds. Interest income on the Group's own funds and finance costs are excluded since the trading activities of the Group's primary segments are not of a financial nature. Income tax expense and the charge in respect of non-controlling interests are excluded from the segmental allocation.


Segment assets and liabilities


Assets and liabilities are not allocated to individual segments and are therefore all reported within Head Office & Other.


Investments in associates


The Group owns the following stakes in its principal associates: 20% of GrECo, which operates mainly in Austria and Eastern Europe; 25% of MAG JLT, which operates mainly in Italy and 25% of March-JLT, which operates mainly in Spain. The investment and the Group's share of the net results of these associates are included in the Head Office & Other segment, together with the investment and results of the Group's other associates, Sterling Re Intermediaro de Reaseguro SA de CV, JLT Insurance Management Malta, JLT Energy (France) SAS and JLT Independent Insurance Brokers Private Ltd.


During the year, the Group increased its stake in JLT Independent Insurance Brokers Private Ltd. from 26% to 49% for a  consideration of  £3,013,000.


On 6 May 2015, the Group disposed of its 26% stake in Milestone, the holding company of Siaci Saint Honoré, generating cash proceeds of £80,235,000 and net exceptional gain of £18,595,000.


Other segment items


Capital expenditure comprises additions to property, plant and equipment and other intangible assets.






























































































































































































































































































Risk & Insurance



Employee Benefits









Year ended

31 December 2016



JLT


Specialty


£'000



JLT


Re


£'000



JLT Australia


& New Zealand


£'000



JLT


Asia


£'000



JLT


USA


£'000



Other


Risk & Insurance


£'000



UK & Ireland


£'000



Asia


£'000



Other


Employee Benefits


£'000



Head Office


& Other


£'000



Total


£'000



Fees and commissions



 325,675



 195,065



 115,950



 90,133



 41,313



 188,103



 160,016



 87,260



 53,041



 -



 1,256,556



Investment income



 1,776



 541



 1,702



 149



 -



 488



 2



 17



 55



 -



 4,730



Total revenue



327,451



195,606



117,652



 90,282



41,313



188,591



 160,018



 87,277



 53,096



 -



 1,261,286



Underlying trading profit



 73,016



 40,521



 34,137



 16,825



 (26,981)



 29,060



 12,315



 27,130



 10,029



 (22,380)



 193,672



Operating profit



 52,172



 40,589



 34,135



 19,404



 (26,981)



 30,742



 (2,390)



 23,290



 9,851



 (25,207)



 155,605



Finance costs - net



 -



 -



 -



 -



 -



 -



 -



 -



 -



 (22,078)



 (22,078)



Share of results of associates



 -



 -



 -



 -



 -



 -



 -



 -



 -



 1,353



 1,353



Profit before taxation



 52,172



 40,589



 34,135



 19,404



(26,981)



 30,742



 (2,390)



 23,290



 9,851



 (45,932)



 134,880



Income tax expense



 -



 -



 -



 -



-



 -



 -



 -



 -



 (44,018)



 (44,018)



Non-controlling interests



 -



 -



 -



 -



-



 -



 -



 -



 -



 (9,396)



 (9,396)



Net profit attributable to the owners of the parent



 52,172



 40,589



 34,135



 19,404



(26,981)



 30,742



 (2,390)



 23,290



 9,851



 (99,346)



 81,466



Segment assets


Investments in associates






























 2,574,199



 2,574,199



 50,928



 50,928



Total assets






























 2,625,127



 2,625,127



Segment liabilities






























 (2,274,217)



(2,274,217)



Total liabilities






























 (2,274,217)



(2,274,217)



Other segment items:




































Capital expenditure



2,997



7,406



2,821



1,401



3,204



4,759



11,338



314



391



5,140



 39,771



Depreciation, amortisation


and impairment charges



(9,434)



(3,141)



(2,274)



(2,932)



(3,434)



(4,424)



(7,583)



(1,262)



(1,109)



(14,310)



 (49,903)



 


























































































































































































































































































Risk & Insurance



Employee Benefits









Year ended

31 December 2015 



JLT


Specialty


£'000



JLT


Re


£'000



JLT Australia


& New Zealand


£'000



JLT


Asia


£'000



JLT


USA


£'000



Other


Risk & Insurance


£'000



UK & Ireland


£'000



Asia


£'000



Other


Employee Benefits


£'000



Head Office


& Other


£'000



Total


£'000



Fees and commissions



310,366



173,274



107,504



76,406



23,285



172,138



167,376



78,903



42,140



-



1,151,392



Investment income



805



286



2,032



177



 -



 347



1



13



28



-



3,689



Total revenue



311,171



173,560



109,536



76,583



 23,285



 172,485



167,377



78,916



42,168



-



1,155,081



Underlying trading profit



68,294



32,416



32,745



12,657



 (20,544)



 35,286



12,829



24,433



6,295



(16,949)



187,462



Operating profit



60,071



36,739



32,745



12,814



(20,984)



33,303



8,041



24,431



4,481



(19,284)



172,357



Finance costs - net



-



-



-



-



-



-



-



-



-



(22,861)



(22,861)



Share of results of associates



-



-



-



-



-



-



-



-



-



5,531



5,531



Profit before taxation



60,071



36,739



32,745



12,814



 (20,984)



 33,303



8,041



24,431



4,481



(36,614)



155,027



Income tax expense



-



-



-



-



-



 -



-



-



-



(41,586)



(41,586)



Non-controlling interests



-



-



-



-



-



 -



-



-



-



(10,342)



(10,342)



Net profit attributable to the owners of the parent



60,071



36,739



32,745



12,814



 (20,984)



 33,303



8,041



24,431



4,481



(88,542)



103,099



Segment assets


Investments in associates






























2,195,440


41,180



2,195,440


41,180



Total assets






























2,236,620



2,236,620



Segment liabilities






























(1,905,818)



(1,905,818)



Total liabilities






























(1,905,818)



(1,905,818)



Other segment items:




































Capital expenditure



10,578



8,877



1,737



2,752



7,531



4,374



10,851



1,510



473



12,440



61,123



Depreciation, amortisation


and impairment charges



(8,232)



(1,949)



(2,614)



(2,638)



(2,577)



(4,114)



(6,561)



(880)



(775)



(12,570)



(42,910)



Geographical segment analysis


Although the Group's two business segments are managed on a worldwide basis, they operate in five principal geographical areas of the world.


The United Kingdom is the home country of the parent company Jardine Lloyd Thompson Group plc.


The Risk & Insurance segment operates in the United Kingdom, the Group's home country. In the Americas, the Risk & Insurance segment operates in Argentina, Bermuda, the Caribbean, Brazil, Canada, Colombia, Peru, Chile, and the United States. The Australian segment includes operations in Australia and New Zealand. In Europe, it operates in the Republic of Ireland, Sweden, Finland, Norway, Denmark, Germany, Guernsey, France, The Netherlands, Spain, Switzerland and Russia. The Asian segment includes operations in Singapore, Hong Kong, Taiwan, Indonesia, Japan, Thailand, South Korea, Philippines, Malaysia, China, Vietnam, Dubai, Qatar, Bahrain and Turkey. In Rest of the World, it operates in South Africa.


The Employee Benefits segment operates in the United Kingdom. In the Americas, the Employee Benefits segment operates in Brazil, Canada, Colombia and Peru. The Australian segment includes operations in Australia and New Zealand. In Europe, it operates in the Republic of Ireland and Switzerland. The Asian segment includes operations in Singapore, Hong Kong, Taiwan, Indonesia, Japan, Thailand, South Korea, Philippines, Malaysia, China and Vietnam. In Rest of the World, it operates in South Africa.


The Head Office & Other activities segment is mainly based in the United Kingdom with minor operations in the Americas, Europe and Asia. The Group's captive operations are included in the United Kingdom segment.


Fees and commissions are disclosed by (1) the country in which the office is located and (2) the country in which the customer is located.


Segment non-current assets, segment assets and segment liabilities are disclosed based on the country in which they are located or occur. Interest bearing assets (eg cash & cash equivalents and investments & deposits) relating to the Group's own funds and deferred tax assets are excluded from segment assets. Interest bearing liabilities (eg borrowings) and income and deferred tax liabilities are excluded from segment liabilities. Items excluded from segmental allocation are referred to as "unallocated".


 









































































































Fees and

commissions

(1)



Fees and

commissions

(2)



Segment

non-current

assets



Segment

assets



Segment

liabilities



Year ended 31 December 2016



£'000



£'000



£'000



£'000



£'000



UK



 600,837



 360,840



 356,861



 1,427,263



 (1,045,964)



Americas



 259,226



 375,886



 223,614



 462,989



 (233,192)



Australia



 146,958



 158,821



 49,651



 141,369



 (88,657)



Asia



 204,504



 199,823



 46,660



 218,807



 (152,245)



Europe



 37,717



 107,668



 24,711



 38,386



 (37,531)



Rest of the World



 7,314



 53,518



 7,809



 9,699



 (3,641)






 1,256,556



 1,256,556



 709,306



 2,298,513



 (1,561,230)



Investments in associates












 50,928



 -



Unallocated assets/(liabilities)












 275,686



 (712,987)



Total assets/(liabilities)












 2,625,127



 (2,274,217)



 









































































































Fees and

commissions

(1)



Fees and

commissions

(2)



Segment

non-current

assets



Segment

assets



Segment

liabilities



Year ended 31 December 2015



£'000



£'000



£'000



£'000



£'000



UK



592,652



365,892



391,344



1,271,524



(854,669)



Americas



218,962



335,914



167,288



345,628



(178,662)



Australia



130,470



140,631



32,725



112,941



(74,525)



Asia



173,305



175,082



44,462



162,495



(124,704)



Europe



31,000



87,804



21,745



58,465



(31,818)



Rest of the World



5,003



46,069



6,092



8,433



(4,986)






1,151,392



1,151,392



663,656



1,959,486



(1,269,364)



Investments in associates












41,180



-



Unallocated assets/(liabilities)












235,954



(636,454)



Total assets/(liabilities)












2,236,620



(1,905,818)



 


3. Operating profit


The following items have been (credited)/charged in arriving at operating profit:


























































































































































































































































































































2016


£'000



2015


£'000



Foreign exchange gains:









- fees and commissions



(5,841)



(3,133)



- other operating costs



(10,838)



(3,236)






(16,679)



(6,369)



Amortisation of other intangible assets:









- software costs



19,813



17,171



- other intangible assets



2,131



1,767



Depreciation on property, plant and equipment:









- owned assets



12,291



11,316



- leased assets under finance leases



235



284



Impairment of goodwill (included in exceptional items below)



481



-



Total depreciation, amortisation and impairment charges



34,951



30,538



Amortisation of other intangible assets:









- employment contract payments (included in salaries and associated expenses)



14,952



12,372



(Gains)/losses on disposal of property, plant and equipment



(10)



60



Operating lease rentals payable:









- minimum lease payments:









- land and buildings



41,233



36,409



- furniture, equipment and motor vehicles



792



821



- computer equipment and software



543



364



- sub-leases receipts:









- land and buildings



(426)



(376)






42,142



37,218



Available-for-sale financial assets:









- fair value (gains)/losses



(87)



41



- losses on sale



8



72






(79)



113



Exceptional items:









Acquisition and integration costs of which:









- included in salaries and associated expenses



228



13,274



- included in premises costs



70



1,736



- included in other operating costs



947



6,145






1,245



21,155



Restructuring costs of which:









- included in salaries and associated expenses



9,355



9,314



- included in premises costs



1,689



233



- included in other operating costs



2,856



331






13,900



9,878



Net litigation costs:









- included in salaries and associated expenses



-



529



- included in premises costs



-



346



- included in other operating costs



21,114



681






21,114



1,556



Costs associated with a regulatory review:









- included in salaries and associated expenses



-



274



- included in other operating costs



488



1,258






488



1,532



Net loss on disposal of businesses of which:









- included in salaries and associated expenses



116



-



- included in premises costs



783



-



- included in other operating costs



391



527



- included in depreciation, amortisation and impairment charges



370



-






1,660



527



Net gain on sale of associate



-



(18,595)



Pension curtailment gain



(127)



(492)



Release of contingent considerations



(324)



(456)



Impairment of goodwill



111



-



Total exceptional items included within operating profit



38,067



15,105



Profit on sale of associates' subsidiary  - included in share of results of associates



(378)



-



Total exceptional items



37,689



15,105



 


4. Investment income






















































2016



2015






£'000



£'000



Interest receivable - fiduciary funds



4,730



3,689



Prior year investment income



3,689



4,398



Effect of:









- average cash balance variance



(190)



127



- interest yield variance



799



(614)



- foreign exchange variance



432



(222)






4,730



3,689



 


The Group's investment income arises from its holdings of cash and investments relating to fiduciary funds. Equivalent average cash and investment balances during the year amounted to £797 million (2015: £766 million) denominated principally in US dollars (57%), sterling (18%) and Australian dollars (10%). The average return for 2016 was 0.60% (2015: 0.50%). Based upon average invested balances each 1% movement in the average achieved rate of return would impact anticipated interest income by some £8.0 million.


5. Finance income and costs

























































































2016



2015






£'000



£'000



Interest receivable - own funds



 1,938



1,503



Investment income from available for-sale financial assets



 209



109



Interest expense:









- bank and other borrowings



 (17,434)



(16,733)



- finance leases



 (57)



(49)



- interest in respect of liability discounting



 (1,862)



(1,567)



Pension financing:









- expected return on post employment scheme assets



19,065



18,749



- interest on post employment scheme liabilities



(23,937)



(24,873)



Net pension financing expense



(4,872)



(6,124)



Finance costs - net



 (22,078)



(22,861)



Finance costs



 (24,225)



(24,473)



Finance income



 2,147



1,612



Finance costs - net



 (22,078)



(22,861)



 


Interest Rate Risk


The Group has both interest bearing assets, explained in note 4, and interest bearing liabilities that give rise to net exposures to changes in interest rates, primarily in US dollars and sterling. Where appropriate, the Group uses interest rate swaps to hedge or match these interest rate exposures. The Group's policy is to continue to manage net interest rate exposures arising from the Group's cash (including fiduciary funds) and borrowings. Each 1% movement in the average achieved interest rate impacts interest expense by approximately £5.6 million based on average net borrowings in 2016.


6. Employee information (UNAUDITED)





































































2016



2015






£'000



£'000



a) Salaries and associated expenses









Wages and salaries



619,422



573,723



Social security costs



51,881



49,448



Pension costs



41,385



40,185



Equity settled share-based payments:









- incentive schemes (LTIP, SESS, ESOS)



25,174



19,991



- Sharesave Scheme



-



84






25,174



20,075



Other staff costs



56,501



43,903






794,363



727,334



 

























































































2016



2015



b) Analysis of employees









Monthly average number of persons employed by the Group during the year









Geographical segment:









- UK



3,878



4,131



- Americas



1,813



1,679



- Australasia



1,130



1,133



- Asia



3,292



3,322



- Europe



253



234



- Rest of the world



133



105






10,499



10,604



Business segment:









- Risk & Insurance



6,174



5,990



- Employee Benefits



3,475



3,778



- Head Office & Other



850



836






10,499



10,604



 

















































2016



2015






£'000



£'000



c) Key management compensation









Salaries and short-term employee benefits



13,792



13,893



Post employment benefits



406



457



Other long-term benefits



333



448



Share-based payments



2,812



5,992






17,343



20,790



 


Key management personnel are defined as persons having authority and responsibility for planning, directing and controlling the activities of

the Group directly or indirectly, including any director of the Group. This represents the Group Board of Directors and the Group Executive

Committee only.


The Group's equity-settled share-based payments comprise the JLT Long Term Incentive Plan (2004/2013), Senior Executive Share Scheme, Executive Share Option Scheme and the Sharesave Schemes.


JLT Long Term Incentive Plan (2013)


The Group operates the Long Term Incentive Plan (LTIP) for Executive Directors and persons discharging managerial responsibility (PDMRs). The scheme was renewed in 2013. Awards under the scheme are granted in the form of nil-priced options and are satisfied using market-purchased shares. The awards vest in full or in part depending on satisfaction of the performance conditions. The awards have a 3 year performance period and have a 10 year life from the date of grant. Options attract discretionary dividend equivalents (DDEs) that are rolled up and paid, in cash, on vesting. DDEs are paid to option holders only on the options that have vested. Forfeited or lapsed options are not eligible to DDEs and the DDE that has accrued on the balance sheet is released to equity at the date of forfeiture.


Senior Executive Share Scheme


The Group operates a Senior Executive Share Scheme for senior management and employees. Awards under the scheme are granted in the form of nil-priced options and are satisfied using market-purchased shares. The majority of awards have no specific performance criteria attached, other than the requirement that employees remain in employment with the Group. Certain awards have been granted with specific performance targets defined for the individual executives. In general these require targets for revenue and profit growth to be met over the vesting period. The awards have a 10 year life from the date of grant. Options granted prior to 1 January 2014 attract unconditional DDEs throughout the vesting period, this means that DDEs are paid to the option holders as and when dividends are paid to ordinary shareholders, there is no clawback on the dividends in the event of a forfeiture of the options. The options granted post 1 January 2014 attract DDEs that are rolled up and paid in cash, on vesting. The Group amended the plan rules on the 8 June 2015. From that date, all vested options are no longer eligible to DDEs.


Executive Share Option Scheme


Options were granted at a fixed price (usually market price) and are exercisable after the vesting period (usually 3 years). Options are satisfied by the issue of new shares or market-purchased shares. Some options carry performance conditions where they are only exercisable when earnings per share is in excess of RPI for the three consecutive financial accounting periods preceding the date of exercise. The awards have a 10 year life from the date of grant. This scheme is now closed for new grants and options were last granted under this scheme on 29 September 2006.


Sharesave Scheme


The Sharesave Scheme is open to all employees and are exercised after 5 years from the date of grant. Options are satisfied by the issue of new shares or market-purchased shares. The price at which options are offered is not less than 80% of the market price on the date preceding the date of invitation. All Sharesave Scheme options have no performance criteria attached, other than the requirement that the employee remains in employment with the Group. All options must be exercised within 6 months of the vesting date. As at 31 December 2016, there are no options outstanding in the scheme.


Fair value of awards


Under IFRS 2 the fair value of awards granted during the year, calculated using a Black-Scholes model, is set out below:
































































      









Black-Scholes model assumptions












Exercise


price

pence



Performance period



Share price on grant date

pence



Volatility

%



Dividend yield

%



Maturity

years



Risk free Interest rate

%



Fair value of one award

pence



JLT Long Term Incentive Plan (2013)/


Senior Executive Share Scheme



























2016



31 March



-



2016 - 22



844.50



20.67



-



1 - 6



0.86



844.50



2016



23 September



-



2016 - 21



1,013.00



21.87



-



1 - 5



0.21



1,013.00



 


The option holders who have awards under the JLT Long Term Incentive Plan (2004/2013) and the Senior Executive Share Scheme also receive payments equating to the dividends payable on their shares (subject to meeting the performance criteria). Assuming that the dividend yield is zero and that the options are issued with no cost to the employees, then the fair value will equal the share price at date of grant.


The volatility has been calculated based on the historical share price of the Company, using a 3 year term.


All options granted under the share option schemes are conditional upon the employees remaining in the Group's employment during the vesting period of the option, the actual period varies according to the scheme in which the employee participates. In calculating the cost of options granted, a factor is included to take account of anticipated lapse rates. For Executive Share Option and Sharesave Schemes this is 20%. For the JLT Long Term Incentive Plan (2004/2013) and the Senior Executive Share Scheme it is nil as both are issued with no cost to the employee.







































































Movement in number of options















Options outstanding


at 1 Jan 16

number



Granted

number



Lapsed

number



Exercised

number



Options outstanding


at 31 Dec 16

number



Weighted average exercise


(sale)

price (p)



Options exercisable


at 31 Dec 16

number



Remaining contractual

life years



JLT Long Term Incentive Plan (2004/2013)



1,927,782



925,700



(492,737)



(374,210)



1,986,535



873.22



-



8.42



Senior Executive Share Scheme



7,167,782



2,527,139



(128,558)



(1,639,371)



7,926,992



882.69



681,113



7.96



Executive Share Option Scheme



64,800



-



(18,800)



(46,000)



-



963.70



-



-



Total



 9,160,364



3,452,839



(640,095)



(2,059,581)



9,913,527



882.78



681,113



8.05



 


















































































Movement in number of options















Options outstanding


at 1 Jan 15

number



Granted

number



Lapsed

number



Exercised

number



Options outstanding


at 31 Dec 15

number



Weighted


average


exercise (sale)

price (p)



Options exercisable at 31 Dec 15

number



Remaining contractual

life years



JLT Long Term Incentive Plan (2004/2013)



2,178,744



762,100



(326,796)



(686,266)



1,927,782



1,052.56



37,514



8.18



Senior Executive Share Scheme



7,006,456



2,784,511



(686,913)



(1,936,272)



7,167,782



1,026.77



887,022



8.00



Executive Share Option Scheme



301,576



-



-



(236,776)



64,800



1,018.15



64,800



0.75



Sharesave Scheme



417,429



-



(19,919)



(397,510)



-



1,010.94



-



-



Total



9,904,205



3,546,611



(1,033,628)



(3,256,824)



9,160,364



1,029.65



989,336



7.98



 


7. Services provided by the Company's auditor and its associates


During the year the Group (including its overseas subsidiaries) obtained the following services from the Group's auditor and its associates:
































































2016



2015






£'000



£'000



Fees payable to the Group's auditor for the audit of the parent Company and consolidated financial statements



200



217



Fees payable to the Group's auditor and its associates for other services:









- the audit of the Company's subsidiaries



2,449



2,436



- audit related assurance services



254



417



- tax compliance services



130



120



- tax advisory services



46



51



- other assurance services



190



131



- other non-audit services



135



23






3,404



3,395



 


In addition to the above, fees payable to the Company's auditor and its associates for audit services supplied to the Company's associated pension schemes amounted to £18,700 (2015: £18,200).


The Audit & Risk Committee has a policy on the use of the external auditors for non-audit services to ensure that the auditor's independence is maintained and that appropriate approvals are sought for non-audit services depending upon their nature and value. Each year a limit is set on the total fees that can be paid to the external auditor in relation to non-audit services. For 2016 the Audit & Risk Committee has set this limit at £1 million (2015: £1 million).


8. Income tax expense





































































2016



2015






£'000



£'000



Current tax expense









Current year



51,499



43,153



Adjustments in respect of prior years



(7,129)



(2,167)






44,370



40,986



Deferred tax (credit)/expense









Origination and reversal of temporary differences



(4,912)



(1,515)



Reduction in tax rate



               240



655



Adjustments in respect of prior years



4,320



1,460






              (352)



600



Total income tax expense



44,018



41,586



 


The total income tax expense in the income statement of £44,018,000 (2015: £41,586,000) includes a tax credit on exceptional items of £8,245,000 (2015: £5,914,000). There were no non-recurring tax credits in the year.


In July 2015 the UK Government announced further measures in relation to the UK corporation tax rate, reducing the headline rate of corporation tax to 19% from April 2017 and then to 18% from April 2020. A further 1% reduction in the main rate of corporation tax rate to 17% from 1 April 2020 was announced in Budget 2016. As at 31 December 2016, the additional 1% rate reduction to 17% from April 2020  has been enacted. The impact of the rate reduction to 17% has been incorporated into the income tax charge for the year ended 31 December 2016, taking into consideration when timing differences are expected to reverse.


The tax on the Group's profit before tax differs from the theoretical amount that would arise using the tax rate of the home country of the Company as follows:





































































2016



2015






£'000



£'000



Profit before taxation



134,880



155,027



Tax calculated at UK Corporation Tax rate of 20% (2015: 20.25%)



26,976



31,393



Non-deductible expenses



4,214



4,405



Non recognition of tax losses



4,538



5,037



Other*



(595)



(3,878)



Adjustments in respect of prior years



(2,809)



(707)



Effect of difference between UK and non-UK tax rates



11,725



5,801



Effect of reduction in tax rate



240



655



Tax on associates



(271)



(1,120)



Total income tax expense



44,018



41,586



Other includes the non-taxable gain on disposal of subsidiaries


9. Earnings per share


Following changes to the terms of several share-based staff compensation schemes, whereby dividend rights eligibility were removed in certain circumstances, a comprehensive review of IAS 33 ('earnings per share' or 'EPS') was undertaken in the year to determine the impact of these changes. The schemes affected by this change include the JLT Long Term Incentive Plan (2004/2013), the Senior Executive Share Scheme, the Executive Share Option Scheme, and the Sharesave Scheme. The review considered whether the share options in these plans continued to qualify as participating equity instruments under IAS 33 for the purposes of calculating basic and diluted EPS. With the changes to schemes, the review concluded that only vested share options eligible to receive discretionary dividend equivalents should be included in the basic calculation. As a result, for the basic EPS calculation, the number of ordinary shares in 2015 should reduce from 219,234,336 to 210,767,437, resulting in an increase in basic EPS of 1.6p from 47.0p to 48.6p. The review also concluded that unvested share options should be included in the diluted EPS calculation, using the treasury stock method. This has the effect of reducing the number of ordinary shares in the 2015 diluted EPS calculation from 219,451,514 to 214,939,730, resulting in an increase in diluted EPS of 1.0p from 47.0p to 48.0p.


Under the revised calculation, basic EPS is calculated by dividing the profit attributable to shareholders by the sum of the weighted average number of ordinary shares in issue during the year and the vested share options eligible for discretionary dividend equivalents, excluding unallocated shares held by the Trustees of the Employees' Share Ownership Plan Trust, which are treated as treasury shares. The profit attributable to shareholders is the profit attributable to the owners of the parent adjusted for the dividend equivalents and undistributed earnings attributable to the unvested share options carrying unconditional dividend equivalent rights.


Diluted EPS is calculated by adjusting the weighted average number of ordinary shares in issue to take account of the potential dilutive effect of outstanding share options.


Basic and diluted EPS are also calculated based on underlying earnings attributable to shareholders, which exclude any exceptional items.


A reconciliation of earnings is set out below:


































 2016



2015






No. of shares



No. of shares restated



Weighted average number of shares



210,455,334



210,767,437



Effect of outstanding share options



5,210,752



4,172,293



Adjusted weighted average number of shares



215,666,086



214,939,730



 




































































2016






£'000



£'000



£'000



Pence



Pence



   



Earnings    Adjustments2



Adjusted earnings for basic earnings per share



Basic earnings


per share



Diluted earnings


 per share



Underlying profit after taxation and non-controlling interests1



110,910



(175)



110,735



52.6



51.4



Exceptional items before tax



(37,689)















Taxation thereon



8,245


















(29,444)



45



(29,399)



(14.0)



(13.6)



Profit attributable to the owners of the parent



81,466



(130)



81,336



38.6



37.8



 




































































2015






£'000



£'000



£'000



Pence



Pence






Earnings      Adjustments2



Adjusted earnings

for basic

earnings per

share



Basic


earnings


per share


restated



Diluted


earnings


per share


restated



Underlying profit after taxation and non-controlling interests1



112,290



(782)



111,508



52.9



52.2



Exceptional items before tax



(15,105)















Taxation thereon



5,914


















(9,191)



63



(9,128)



(4.3)



(4.2)



Profit attributable to the owners of the parent



103,099



(719)



102,380



48.6



48.0



1 Underlying excludes exceptional items


2 Adjustments related to the dividends and undistributed earnings on unvested share options carrying dividends equivalent rights.


10. Dividends












































2016



2015






£'000



£'000



Final dividend in respect of 2015 of 19.5p per share (2014: 18.3p)



 42,713



40,141



Less: adjustment*



(200)



(164)






 42,513



39,977



Interim dividend in respect of 2016 of 11.6p per share (2015: 11.1p)



 25,449



24,507






 67,962



64,484



 


*Adjustment relating to dividend equivalents accrued in respect of various performance related share awards and long-term incentive plans not currently anticipated to fully vest.


A final dividend in respect of 2016 of 20.6p per share (2015: 19.5p) amounting to a total of £45,100,000 (2015: £42,710,000) is proposed by the Board. The dividend proposed will not be accounted for until it has been approved at the Annual General Meeting on 27 April 2017.


11. Goodwill



































































































Gross


amount



Impairment


losses



Net carrying


amount






£'000



£'000



£'000



At 31 December 2016












Opening net book amount



500,434



(4,268)



496,166



Exchange differences



47,380



(355)



47,025



Impairment



-



(481)



(481)



Acquisitions



17,854



-



17,854



Disposals



(17,551)



-



(17,551)



Closing net book amount



548,117



(5,104)



543,013



At 31 December 2015












Opening net book amount



480,176



(4,479)



475,697



Exchange differences



         (2,266)



211



(2,055)



Acquisitions



23,239



-



23,239



Disposals



(715)



-



(715)



Closing net book amount



500,434



(4,268)



496,166



 


Impairment tests for goodwill


Goodwill is allocated to the Group's cash generating units (CGUs) identified according to country of operation and business segment. A summary of the goodwill allocation is presented below.


The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a five year period and are discounted using the weighted average cost of capital. Cash flows beyond the five year period are extrapolated using the estimated growth rates stated below:





















































































































































Key assumptions






Net carrying


amount



Growth


rate (1)



Discount


rate (2)






£'000



%



%



At 31 December 2016












JLT Re



186,215



2.10%



7.06%



JLT Speciality



110,811



2.00%



6.05%



UK & Ireland Employee Benefits



78,717



2.00%



6.05%



Latin America



42,262



3.39%



11.16%



JLT Insurance Services



9,806



2.41%



7.24%



Asia



29,912



2.41%



6.48%



Australia & New Zealand



38,455



2.50%



8.26%



Others



46,835



2.46%



7.28%






543,013



2.28%



6.98%



At 31 December 2015












JLT Re



      161,767



2.13%



7.36%



JLT Speciality



      101,669



2.12%



6.45%



UK & Ireland Employee Benefits



        79,729



2.13%



6.46%



Latin America



        31,670



3.75%



11.14%



JLT Insurance Services



        30,894



2.09%



7.01%



Asia



        27,513



2.59%



7.06%



Australia & New Zealand



        24,068



2.82%



7.36%



Others



38,856



2.35%



7.78%






496,166



2.42%



7.23%



 


1) Average growth rate used to extrapolate cash flows beyond five years.

2) Pre-tax discount rate applied to the cash flow projections.


The key assumptions used in value-in-use calculations were:


The budgeted trading profit growth: Management determines budgeted trading profit based on past experience and its expectation for market development.

The budgeted IBA interest income growth is based on past experience and long-term interest rates projections.

The discount rates used are pre-tax and reflect specific risks relating to the relevant segment and country of operation.

The weighted average growth rates used are consistent with long-term economic forecasts in the countries of operation.

The value-in-use is compared to an adjusted goodwill. The adjusted goodwill is the goodwill grossed up to reflect a 100% ownership by the Group.


The key sensitivity analysis are:


A decrease of 1% on the growth rate resulted in a reduction of 19% in the excess between the value in use and the adjusted carrying value of goodwill.


An increase of 2% on the discount rate resulted in a reduction of 36% in the excess between the value in use and the adjusted carrying value of goodwill.


A combined decrease of 1% on the growth rate and an increase of 2% in the discount rate resulted in a reduction of 44% in the excess between the value in use and the adjusted carrying value of goodwill.


12. Other intangible assets























































































































































































































































Computer

software



Capitalised


employment


contract


payments



Other



Total






£'000



£'000



£'000



£'000



At 31 December 2016



           



          









Opening net book amount



61,883



           25,902



            16,538



 104,323



Exchange differences



1,234



             1,157



             1,783



 4,174



Reclassification



-



(455)



455



-



Additions



20,342



             7,682



             2,191



 30,215



Companies acquired



3



                  -  



             3,921



 3,924



Companies disposed



(3,590)



                  -  



               (187)



 (3,777)



Amortisation charge



(19,813)



          (14,952)



            (2,131)



 (36,896)



Closing net book value



60,059



           19,334



            22,570



 101,963


















At 31 December 2016















Cost



175,155



           61,424



            33,573



          270,152



Accumulated amortisation and impairment



(115,096)



          (42,090)



           (11,003)



         (168,189)



Closing net book amount



60,059



           19,334



            22,570



          101,963


















At 31 December 2015















Opening net book amount



55,353



16,005



15,137



86,495



Exchange differences



(231)



213



(152)



(170)



Additions



23,884



22,056



-



45,940



Companies acquired



48



-



3,320



3,368



Amortisation charge



(17,171)



(12,372)



(1,767)



(31,310)



Closing net book value



61,883



25,902



16,538



104,323


















At 31 December 2015















Cost



159,357



54,892



25,846



240,095



Accumulated amortisation and impairment



(97,474)



(28,990)



(9,308)



(135,772)



Closing net book amount



61,883



25,902



16,538



104,323


















At 31 December 2014















Cost



135,451



36,039



22,878



194,368



Accumulated amortisation and impairment



(80,098)



(20,034)



(7,741)



(107,873)



Closing net book amount



55,353



16,005



15,137



86,495





Additions to computer software during 2016 include £18,097,000 of capitalised costs in respect of internal developments (2015: £20,523,000).


13. Property, plant and equipment

















































































































































































































































































































Land &

buildings



Leasehold

improvements



Furniture & equipment



Motor

vehicles



Total






£'000



£'000



£'000



£'000



£'000



At 31 December 2016


















Opening net book amount



                 18



           46,035



           14,618



             2,496



           63,167



Exchange differences



                   2



             3,094



             2,112



               359



             5,567



Additions



                    -



             4,667



             3,955



               934



             9,556



Companies acquired



                    -



                 66



               116



                 69



               251



Companies disposed



                    -



              (377)



              (121)



              (269)



              (767)



Disposals



                    -



              (168)



              (303)



              (447)



              (918)



Depreciation charge



-



            (6,161)



            (5,360)



            (1,005)



          (12,526)



Closing net book amount



                 20



           47,156



           15,017



             2,137



           64,330





















At 31 December 2016


















Cost



                 74



           93,572



           95,805



             5,936



         195,387



Accumulated depreciation



                (54)



          (46,416)



          (80,788)



            (3,799)



        (131,057)



Closing net book amount



                 20



           47,156



           15,017



             2,137



           64,330





















At 31 December 2015


















Opening net book amount



210



43,660



14,163



3,372



61,405



Exchange differences



2



(498)



(574)



(197)



(1,267)



Additions



-



8,050



6,039



1,094



15,183



Companies acquired



-



452



345



13



810



Companies disposed



-



-



(22)



-



(22)



Disposals



(193)



(166)



(368)



(615)



(1,342)



Depreciation charge



(1)



(5,463)



(4,965)



(1,171)



(11,600)



Closing net book amount



18



46,035



14,618



2,496



63,167





















At 31 December 2015


















Cost



63



88,093



88,076



5,769



182,001



Accumulated depreciation



(45)



(42,058)



(73,458)



(3,273)



(118,834)



Closing net book amount



18



46,035



14,618



2,496



63,167





















At 31 December 2014


















Cost



365



82,333



85,400



6,493



174,591



Accumulated depreciation



(155)



(38,673)



(71,237)



(3,121)



(113,186)



Closing net book amount



210



43,660



14,163



3,372



61,405





















The net book amount of property, plant and equipment held under finance leases is as follows:
























2016



2015






£'000



£'000



Furniture, equipment and motor vehicles



777



650



 


14. Investments in associates


None of the associates are considered individually material to the Group. A reconciliation of the summarised financial information of the associates is presented in aggregate below.


On 6 May 2015, the Group disposed of its stake in its principal associate Milestone, the holding company of Siaci Saint Honoré. Milestone, in the opinion of the directors, was the only material associate to the Group. The associate had share capital consisting solely of ordinary shares, which was held directly by the Group; the country of incorporation or registration was also its principal place of business.

























Place of


business/country of incorporation



% of


ownership


interest (2016)



% of


ownership


interest (2015)



Nature of


the relationship



Measurement method



Milestone (Siaci Saint Honoré)



France



-



-



Note 1



Equity



 


Note 1: Siaci Saint Honoré is a leading independent provider of insurance broking and employee benefit services to major French companies and multinational corporations.


Milestone is a private company and there is no quoted market price available for its shares.


There are no contingent liabilities relating to the Group's interest in the associate.


Summarised Income Statement and Statement of Comprehensive Income




































































Siaci






2016



2015






£'000



£'000



Revenue



-



54,820



Depreciation and amortisation



-



(2,132)



Interest income



-



1,018



Interest expense



-



(73)



Profit from continuing operations



-



22,078



Income tax expense



-



(7,200)



Profit after tax from continuing operations



-



14,878



Other comprehensive income



-



-



Total comprehensive income



-



14,878



 


Reconciliation of summarised financial information


Reconciliation of the summarised financial information presented to the carrying amount of its interest in associates.



























































































































Siaci



Others



Total






2016



2015



2016



2015



2016



2015






£'000



£'000



£'000



£'000



£'000



£'000



Opening net assets



-



203,594



35,072



30,176



35,072



233,770



Disposal during the year



-



(208,416)



-



-



-



(208,416)



Profit for the year



-



14,878



1,330



6,671



1,330



21,549



Other comprehensive income



-



-



-



167



-



167



Dividends



-



-



(4,592)



(2,306)



(4,592)



(2,306)



Change in non-controlling interests



-



(491)



-



90



-



(401)



Capital increase



-



-



2,854



1,677



2,854



1,677



Exchange differences



-



(9,565)



4,663



(1,403)



4,663



(10,968)



Closing net assets



-



-



39,327



35,072



39,327



35,072



Carrying value



-



-



50,928



41,180



50,928



41,180



 


15. Available-for-sale financial assets


Available-for-sale financial assets are categorised into one of two categories:


Investments and deposits, consist mainly of fixed term deposits, bonds and certificates of deposit. These investments are held at fair value and are classified between current and non-current assets according to the maturity date.


Other investments include securities and other investments held for strategic purposes and some debt instruments. The investments are held at fair value unless a fair value cannot be accurately determined in which case they are held at cost less any provision for impairment.







































































































































































































































Other

investments



Investments

& deposits



Total






£'000



£'000



£'000



At 1 January 2016



             6,436



 9,049



         15,485



Exchange differences



               984



 10,983



           11,967



Additions



-



 107,636



       107,636



Companies disposed



6,301



-



6,301



Disposals/maturities



              (311)



 (20)



             (331)



Revaluation deficit (included within equity)



-



 11



               11



Amounts to be written off



              (331)



 -  



             (331)



At 31 December 2016



             13,079



 127,659



       140,738















Analysis of available-for-sale financial assets












Current



 -  



 116,933



 116,933



Non-current



 13,079



 10,726



 23,805



At 31 December 2016



 13,079



 127,659



 140,738















Analysis of available-for-sale investments & deposits












Fiduciary funds






 127,358






Own funds






 301






At 31 December 2016






 127,659


















At 1 January 2015



4,746



9,642



14,388



Exchange differences



194



(571)



(377)



Additions



1,964



5,081



7,045



Disposals/maturities



(243)



(5,099)



(5,342)



Revaluation gain/(deficit) (included within equity)



(82)



(4)



(86)



Amounts to be written off



(143)



-



(143)



At 31 December 2015



6,436



9,049



15,485















Analysis of available-for-sale financial assets












Current



-



19



19



Non-current



6,436



9,030



15,466



At 31 December 2015



6,436



9,049



15,485





Analysis of available-for-sale investments & deposits












Fiduciary funds






 8,894






Own funds






 155






At 31 December 2015






9,049






The credit quality of available-for-sale investments and deposits is assessed by reference to external credit ratings, where available, and other current and historical credit data including counterparty default rates. This is summarised as follows:












































2016



2015






£'000



£'000



AA



 49,621



4,133



AA/A



 37,297



-



A



 19,932



4,916



BBB



 20,809



-



Total



 127,659



9,049



16. Derivative financial instruments













































































         At 31 December 2016



         At 31 December 2015






Assets



Liabilities



Assets



Liabilities






£'000



£'000



£'000



£'000



Interest rate swaps - fair value hedges



 32,740



 (3,477)  



11,654



(5,490)



Forward foreign exchange contracts - cash flow hedges



 92,233



 (69,674)



23,574



(11,725)



Redemption liabilities - option contracts



 -  



 (29,637)



-



(22,626)



Total



 124,973



 (102,788)



35,228



(39,841)



Current



 7,930



 (33,136)



1,544



(6,115)



Non-current



 117,043



 (69,652)



33,684



(33,726)



Total



 124,973



 (102,788)



35,228



(39,841)



 


The credit quality of counterparties with whom derivative financial assets are held is assessed by reference to external credit ratings, where available, and other current and historical credit data including counterparty default rates. This is summarised as follows:







































2016



2015






£'000



£'000



AA



 73,169



16,419



AA/A



 9,374



2,973



BBB



 42,430



15,836



Total



 124,973



35,228



 


Maturity analysis


The table below analyses the Group's derivative financial instruments, which will be settled on a gross basis, into relevant maturity groupings based upon the remaining period at the balance sheet date to contractual maturity. The amounts disclosed are the contractual undiscounted cash flows.



























































Less than

1 year



Greater than

1 year



At 31 December 2016



£'000



£'000



Forward foreign exchange contracts









Outflow



 (477,260)



 (719,936)



Inflow



 443,578



 755,747






 


Less than

1 year



Greater than

1 year



At 31 December 2015



£'000



£'000



Forward foreign exchange contracts









Outflow



(275,406)



(442,156)



Inflow



269,827



461,276



 


17. Trade and other receivables

















































2016



2015






£'000



£'000



Trade receivables



         440,941



368,215



Less: provision for impairment of trade receivables



          (20,961)



(15,018)



Trade receivables - net



         419,980



353,197



Other receivables



         143,703



152,282



Prepayments



           24,957



23,116






         588,640



528,595



 


As at 31 December 2016, the Group had exposures to individual trade counterparties within trade receivables. In accordance with Group policy, Group operating companies continually monitor exposures against credit limits and concentration of risk. No individual trade counterparty credit exposure is considered significant in the ordinary course of trading activity. Management does not expect any significant losses from non-performance by trade counterparties that have not been provided for.


Movements on the Group provision for impairment of trade receivables are as follows:






















































2016



2015






£'000



£'000



At 1 January



             (15,018)



(10,724)



Currency translation adjustments



                (1,483)



(26)



Companies acquired



                   (243)



(28)



Provisions for impairment of trade receivables



                (8,355)



(9,849)



Receivables written off during the year as uncollectible



                 2,980



2,499



Unused amounts reversed



1,158



3,110



At 31 December



(20,961)



(15,018)



 


The creation and release of provisions for impaired receivables have been included in 'Other operating costs' in the income statement. The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The Group does not hold any collateral as security.


The following table sets out details of the age of trade receivables that are not overdue as well as an analysis of overdue amounts impaired and provided for.

























































Trade

receivables



Provision for

impairment



Net trade

receivables



At 31 December 2016



£'000



£'000



£'000



Not overdue



324,227



  -  



      324,227



Past due not more than three months



75,419



         (805)



           74,614



Past due more than three months and not more than six months



16,797



         (2,377)



    14,420



Past due more than six months and not more than one year



      12,684



         (5,965)



     6,719



Past due more than one year



         11,814



       (11,814)



     -  






440,941



(20,961)



419,980



 

























































Trade

receivables



Provision for

impairment



Net trade

receivables



At 31 December 2015



£'000



£'000



£'000



Not overdue



270,706



-



270,706



Past due not more than three months



60,212



(539)



59,673



Past due more than three months and not more than six months



19,002



(2,600)



16,402



Past due more than six months and not more than one year



8,512



(2,975)



5,537



Past due more than one year



9,783



(8,904)



879






368,215



(15,018)



353,197



 


18. Cash and cash equivalents






















































2016



2015






£'000



£'000



Cash at bank and in hand



 514,474



463,665



Short-term bank deposits



 425,471



437,422






 939,945



901,087












Fiduciary funds



 748,628



737,676



Own funds



 191,317



163,411






 939,945



901,087



 


Fiduciary funds represent client money held in the form of premiums due to underwriters, claims paid by insurers and due to policyholders, and funds held to defray commissions and other income. Fiduciary funds are not available for general corporate purposes.


The credit quality of cash at bank and in hand and short-term deposits is assessed by reference to external credit ratings, where available and other current and historical credit data including counterparty default rates. This is summarised as follows:

























































2016



2015






£'000



£'000



AAA



 10,685



12,237



AA



 318,613



336,311



AA/A



 125,247



112,869



A



 146,111



107,744



BBB



 322,953



327,567



Other



 16,336



4,359



Total



 939,945



901,087



The effective interest rate in respect of short-term deposits was 0.94% (2015: 0.87%). These deposits have an average maturity of 16 days (2015: 24 days).



 


19. Trade and other payables

















































2016



2015






£'000



£'000



Insurance payables



 875,986



746,570



Social security and other taxes



 18,735



17,161



Other payables



 198,156



166,880



Accruals and deferred income



 137,408



137,905



Deferred and contingent consideration



 27,497



17,762






 1,257,782



1,086,278



All payables are considered current as the non-current portion is not material.


20. Financial instruments by category


The accounting policies for financial instruments have been applied to the line items below:























































At 31 December 2016



Loans and receivables



Derivatives


used for


hedging



Available-

for-sale



Total



Assets per balance sheet



£'000



£'000



£'000



£'000



Available-for-sale financial assets



 -  



 -  



 140,738



 140,738



Derivative financial instruments



 -  



 124,973



 -  



 124,973



Trade and other receivables (a)



 563,683



 -  



 -  



 563,683



Cash and cash equivalents



 939,945



 -  



 -  



 939,945



Total



 1,503,628



 124,973



 140,738



 1,769,339



 





























































Derivatives


used for


hedging



Other

financial liabilities



Total



Liabilities per balance sheet






£'000



£'000



£'000



Borrowings






 -  



 (687,832)



 (687,832)



Trade and other payables (b)






 -  



 (1,120,374)



 (1,120,374)



Redemption liabilities - option contracts






 (29,637)



 -  



 (29,637)



Derivative financial instruments






 (73,151)



 -  



 (73,151)



Total






 (102,788)



 (1,808,206)



 (1,910,994)



 























































At 31 December 2015



Loans and receivables



Derivatives


used for


hedging



Available-

for-sale



Total



Assets per balance sheet



£'000



£'000



£'000



£'000



Available-for-sale financial assets



-



-



15,485



15,485



Derivative financial instruments



-



35,228



-



35,228



Trade and other receivables (a)



505,479



-



-



505,479



Cash and cash equivalents



901,087



-



-



901,087



Total



1,406,566



35,228



15,485



1,457,279



 





























































Derivatives


used for


hedging



Other

financial

liabilities



Total



Liabilities per balance sheet






£'000



£'000



£'000



Borrowings






-



(603,582)



(603,582)



Trade and other payables (b)






-



(948,373)



(948,373)



Redemption liabilities - option contracts






(22,626)



-



(22,626)



Derivative financial instruments






(17,215)



-



(17,215)



Total






(39,841)



(1,551,955)



(1,591,796)



 


(a)  Prepayments are excluded from the trade and other receivables balance, as this analysis is required only for financial instruments.


(b) Non-financial liabilities are excluded from the trade and other payables balance, as this analysis is required only for financial instruments.


The following table presents the Group's financial assets and liabilities that are measured at fair value at 31 December 2016.


















































































































Level 1



Level 2



Level 3



Total



At 31 December 2016



£'000



£'000



£'000



£'000



Assets















Derivatives used for hedging



-



124,973



-



124,973



Available-for-sale financial assets















- equity securities



-



-



1,115



1,115



- debt investments



-



-



11,964



11,964



- fixed deposits



127,659



-



-



127,659



Total



127,659



124,973



13,079



265,711


















Liabilities















Deferred and contingent consideration



-



-



(27,497)



(27,497)



Redemption liabilities - option contracts



-



-



(29,637)



(29,637)



Derivatives used for hedging



-



(73,151)



-



(73,151)



Total



-



(73,151)



(57,134)



(130,285)



 











































































































Level 1



Level 2



Level 3



Total



At 31 December 2015



£'000



Assets















Derivatives used for hedging



-



35,228



-



35,228



Available-for-sale financial assets















- equity securities



311



-



1,312



1,623



- debt investments



-



-



4,813



4,813



- fixed deposits



9,049



-



-



9,049



Total



9,360



35,228



6,125



50,713



Liabilities















Deferred and contingent consideration



-



-



(17,762)



(17,762)



Redemption liabilities - option contracts



-



-



(22,626)



(22,626)



Derivatives used for hedging



-



(17,215)



-



(17,215)



Total



-



(17,215)



(40,388)



(57,603)



 


Apart from where disclosed, there are no differences between the fair value and the carrying value of financial assets and liabilities.


Instruments included in level 1 are financial instruments traded in active markets for which the fair value is based upon quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm's-length basis.


Instruments included in level 2 are financial instruments that are not traded in an active market (for example, over-the-counter derivatives) and for which the fair value is determined by using internal and external models. These models maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 2 includes derivatives used for hedging. The valuations of which are performed using a discounted cash flow methodology incorporating observable market forward foreign exchange and interest rates.


During the year there were no transfers between level 1 and level 2. There were no changes in valuation techniques during the year.


Instruments included in level 3 are financial instruments for which one or more of the significant inputs is not based on observable market data. In respect of deferred and contingent consideration and Redemption liabilities - option contracts, unobservable inputs include management's assessment of the expected future performance of relevant acquired businesses and are valued using a discounted cash flow methodology.


A 1% movement in the discount rate applied in the calculation of the redemption liability in respect of JLT Specialty Insurance Services Inc., the largest item within the redemption liability, would result in a change of the overall redemption liability of 10%.


A reconciliation of the movements in level 3 is provided below:













































































Assets


Level 3


£'000



Liabilities


Level 3


£'000



At 1 January 2016









6,125



 (40,388)



Exchange differences









984



 (8,509)



Companies disposed









6,301



 -  



Companies acquired









-



 (12,686)



Utilised in the year









-



 6,686



Charged to income statement









(331)



 (2,237)



At 31 December 2016









13,079



(57,134)



Of the £331,000 charged to the income statement, £148,000 is included in net finance costs and £183,000 in Other operating costs.



Of the £2,237,000 charged to the income statement, £1,862,000 is included in net finance costs and £375,000 in Other operating costs.



 


The Group's treasury policies are approved by the Board and are implemented by a centralised treasury department. The treasury department operates within a framework of policies and procedures that establish specific guidelines to manage currency risk, liquidity risk and interest rate risk and the use of counterparties and financial instruments to manage these risks. The treasury department is subject to periodic review by internal audit.


The Group uses various derivative instruments including forward foreign exchange contracts, interest rate swaps and, from time to time, foreign currency collars and options to manage the risks arising from variations in currency and interest rates. Derivative instruments purchased are primarily denominated in the currencies of the Group's main markets.


Where forward foreign exchange contracts have been entered into to manage currency risk, they are designated as hedges of currency risk on specific future cash flows, and qualify as highly probable transactions for which hedge accounting is applied. The Group anticipates that hedge accounting requirements will continue to be met on its foreign currency and interest rate hedging activities and that no material ineffectiveness will arise which will result in gains or losses being recognised through the income statement.


The fair value of financial derivatives based upon market values as at 31 December 2016 and designated as effective cash flow hedges was a net asset of £22.6 million and has been deferred in equity (2015: net asset of £11.8 million). Gains and losses arising on derivative instruments outstanding as at 31 December 2016 will be released to the income statement at various dates up to:


i)  47 months in respect of cash flow hedges on currency denominated UK earnings.


ii) 13 years in respect of specific hedges on USD denominated long-term debt drawn under the Group's USD private placement programme.


iii)             10 years in respect of interest rate hedges on sterling denominated long-term debt drawn under the Group's private placement programme.


No material amounts were transferred to the income statement during the year in respect of the fair value of financial derivatives.


Transactions maturing within 12 months of the balance sheet date are classified in current maturities. Transactions maturing in a period in excess of 12 months of the balance sheet date are classified as non-current maturities.


a)             Forward foreign exchange contracts


The Group's major currency transaction exposure arises in USD and the Group continues to adopt a prudent approach in actively managing this exposure. As at 31 December 2016 the Group had outstanding foreign exchange contracts, principally in USD, amounting to a principal value of £1,199,325,000 (2015: £731,103,000).


As a guide, each 1 cent movement in the achieved rate (taking into account the hedges in place) currently translates into a change of approximately £1.8 million in revenue, with a corresponding impact on trading profit equal to approximately 70% of the revenue change.


b)             Interest rate swaps


The Group uses interest rate hedges, principally interest rate swaps, to mitigate the impact of changes in interest rates. The notional principal amount of outstanding cross currency interest rate swaps as at 31 December 2016 was USD500,000,000 and £75,000,000 (2015: USD500,000,000 and £75,000,000). A net gain of £29.3 million (2015: net gain £6.2 million) on these instruments was offset by a fair value loss of £29.3 million (2015: loss £6.2 million) on the private placement loans, both of which were recognised in the income statement in the year.


c)             Redemption liabilities


The redemption liabilities represent the valuation of the put options provided in the shareholders agreements of JLT Specialty Insurance Services Inc., JLT Sigorta ve Reasurans Brokerligi Ltd Sirketi and JLT SCK Corretora e Administradora de Seguros Ltda. Fair value of these liabilities resulted in an expense of £699,000 which was recognised in the income statement in the year.


d)             Price risk




The Group does not have a material exposure to commodity price risk.


The maximum exposure to credit risk at the reporting date is the fair value of the derivatives in the balance sheet.


SHAREHOLDER Information










































































21. Borrowings (UNAUDITED)






2016


£'000



2015


£'000



Current









Bank overdraft



 18,223



21,702



Unsecured loan notes



 35,980



-



Bank borrowings



 243



418



Finance lease liabilities



 283



218






 54,729



22,338



Non Current









Unsecured loan notes



 471,975



419,394



Bank borrowing



 160,629



161,435



Finance lease liabilities



 499



415






 633,103



581,244



Total borrowings



 687,832



603,582



 


The borrowings include secured liabilities (finance leases) of £782,000 (2015: £633,000).


The exposure of the borrowings of the Group to interest rate changes and the periods in which the borrowings re-price are as follows:


 




































6 months


or less


£'000



6-12


months


£'000



1-5

years


£'000



Over


5 years


£'000



Fixed rate


£'000



Total


£'000



At 31 December 2016



632,035



243



-



-



55,554



687,832



At 31 December 2015



557,334



-



418



-



45,830



603,582



 


The effective interest rates at the balance sheet date were as follows:


 


































2016


£'000



2015


£'000



Bank overdraft



-



-



Unsecured loan notes - private placement



2.69%



2.84%



Bank borrowings



1.34%



1.53%



Finance lease liabilities



9.96%



8.14%



 












































Maturity of non-current borrowings (excluding finance lease liabilities):






2016


£'000



2015


£'000



Between 1 and 2 years



 -



30,220



Between 2 and 3 years



 2



6



Between 3 and 4 years



 67,386



-



Between 4 and 5 years



 160,626



56,092



Over 5 years



 404,590



494,511






 632,604



580,829



 


Finance lease liabilities - minimum lease payments:



























































2016


£'000



2015


£'000



No later than 1 year



 337



255



Later than 1 year and no later than 2 years



 268



204



Later than 2 years and no later than 3 years



 173



142



Later than 3 years and no later than 4 years



 78



80



Later than 4 years and no later than 5 years



 32



31



Later than 5 years



-



-






 888



712



Future finance charges on finance leases



 (106)



(79)



Present value of finance lease liabilities



 782



633



 


The present value of finance lease liabilities is as follows:


 

















































2016


£'000



2015


£'000



No later than 1 year



 283



218



Later than 1 year and no later than 2 years



 233



180



Later than 2 years and no later than 3 years



 161



127



Later than 3 years and no later than 4 years



 74



73



Later than 4 years and no later than 5 years



 31



35



Later than 5 years



-



-






 782



633



 


Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default.


































 


The carrying amount of the Group's borrowings are denominated in the following currencies:


 






2016


£'000



2015


£'000



Sterling



 264,657



263,729



US Dollar



 422,148



338,796



Other currencies



 1,027



1,057






 687,832



603,582



 


Borrowing facilities


The Group has undrawn committed borrowing facilities of:
























2016


£'000



2015


£'000



Floating rate









- expiring beyond one year



337,000



336,000



 


Facilities expiring within one year relate to:


a)   Senior unsecured loan notes totalling USD42 million (£33.9 million) issued by JIB Group Limited under the Group's 2010 private placement programme in September 2017 with a coupon of 5.02%.


Facilities expiring beyond one year relate to:


b)   The committed unsecured £500 million revolving credit facilities in the name of JIB Group Limited. As at the balance sheet date, drawings under the revolving credit facilities are subject to a margin and fees of 115 basis points above the relevant LIBOR interest rate and additional commitment fees on the undrawn facility. In January 2017, the Group agreed with its relationship banks to exercise an extension option, under existing agreed terms, by a further one year from February 2021 to a new maturity date of February 2022.


c)    Senior unsecured loan notes totalling USD83 million issued by JIB Group Limited under the Group's 2010 private placement programme with USD42 million (£33.9 million) in September 2020 with a coupon of 5.59% and USD41 million (£33.1 million) in September 2022 with a coupon of 5.69%. Drawings under the Group's private placement programme are swapped into sterling floating and are subject to an equivalent spread over LIBOR of between 227 and 238 basis points.


d)   Senior unsecured loan notes totalling USD250 million issued by JIB Group Limited under the Group's 2012 private placement programme with maturities of USD40 million (£32.3 million) in January 2020 with a coupon of 3.21%, USD140 million (£113.2 million) in January 2023 with a coupon of 3.78% and USD70 million (£56.6 million) in January 2025 with a coupon of 3.93%. The proceeds of this placement have been swapped into sterling at fixed and LIBOR based floating rates and are subject to an equivalent spread over LIBOR of between 205 and 220 basis points.


e)   Senior unsecured loan notes totalling £75 million issued by JIB Group Limited under the Group's April 2014 private placement programme maturing in April 2026 with a coupon of 4.27%. The proceeds of this placement have been swapped into LIBOR based floating rates and are subject to an equivalent spread over LIBOR of 150 basis points.


f)    Senior unsecured loan notes totalling USD125 million issued by JIB Group Limited under the Group's October 2014 private placement programme with maturities of USD62.5 million (£50.5 million) in October 2026 with a coupon of 3.93% and USD62.5 million (£50.5 million) in October 2029 with a coupon of 4.13%. The proceeds of this private placement in October 2014 have been swapped into sterling at LIBOR based floating rates and are subject to an equivalent spread over LIBOR of between 146 and 157 basis points.


The terms and conditions of the Group's facilities include common debt and interest cover covenants with which the Group expects to continue

to comply.


Liquidity risk


Liquidity risk arises from an inability to maintain an optimal cost of capital or meet the short term financial demands of the business. The Group has implemented the following steps to mitigate the risk:


      - Management reviews of business unit balance sheets and cash flows


      - Maintenance of committed credit facilities


      - Compliance with regulatory minimum capital requirements and regular stress testing


      - Maintenance of a conservative funding profile.


 


22. DEFERRED INCOME TAXES


Deferred income 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 the deferred income taxes relate to the same fiscal authority.


The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet.













































































































































Assets



Liabilities



Net






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Property, plant and equipment



 1,555



2,105



 (554)



(746)



 1,001



1,359



Provisions



 15,937



11,588



 (5,273)



(910)



 10,664



10,678



Losses



 1,858



2,986



 -



-



 1,858



2,986



Deferred income



 879



285



 (5,386)



(8,619)



 (4,507)



(8,334)



Other intangibles



 3,052



2,436



 (616)



(48)



 2,436



2,388



Goodwill



 298



237



 (3,046)



(6,024)



 (2,748)



(5,787)



Other



 3,407



7,033



 (1,826)



(2,933)



 1,581



4,100



Pensions



 32,532



22,125



 (131)



(93)



 32,401



22,032



Share based payments



 4,858



6,554



 -



-



 4,858



6,554



Fair values



 11,166



-



 -



(1,931)



 11,166



(1,931)



Tax assets/(liabilities)



 75,542



55,349



 (16,832)



(21,304)



 58,710



34,045



Set off of tax



 (5,454)



(4,326)



 5,454



4,326



 -



-



Net tax assets/(liabilities)



 70,088



51,023



 (11,378)



(16,978)



 58,710



34,045



 


The majority of the deferred tax is not expected to reverse within 12 months.





















































































































At 1


January


2016


£'000



Exchange


differences


£'000



Credit/


(charge)


to income


£'000



Credit/


(charge)


to equity


£'000



Acquisitions/


disposals


of sub


£'000



At 31


December


2016


£'000



Accelerated tax depreciation



 1,359



 (204)



 (154)



-



-



 1,001



Provisions



 10,678



 58



 (79)



-



 7



 10,664



Losses



 2,986



 44



 (1,172)



-



-



 1,858



Deferred income



 (8,334)



 3,241



 586



-



-



 (4,507)



Other intangibles



 2,388



 454



 (102)



-



 (304)



 2,436



Goodwill



 (5,787)



 3,446



 (407)



-



-



 (2,748)



Other



 4,100



 (4,534)



 2,015



-



-



 1,581



Pensions



 22,032



 7



 828



 9,534



-



 32,401



Share based payments



 6,554



-



 (1,163)



 (533)



-



 4,858



Fair values



 (1,931)



-



-



 13,097



-



 11,166



Net tax assets



 34,045



 2,512



 352



 22,098



 (297)



 58,710



 


The total current and deferred income tax charged to equity during the year is as follows:

















































































At 1 January


2016






Credit/(charge)


to equity






At 31 December


2016






£'000






£'000






£'000



Pensions



 34,351






 11,850






 46,201



Share based payments



 12,033






 (222)






 11,811



Fair values:


















- foreign exchange



 (16)






 13,196






 13,180



- available-for-sale



 (30)






 199






 169






 (46)






 13,395






 13,349






 46,338






 25,023






 71,361



 


 


23. PROVISIONS FOR LIABILITIES AND CHARGES


























































Property


related provisions


£'000



Litigation provisions


£'000



Other


£'000



Total


£'000



At 1 January 2016



 1,300



 18,223



 114



 19,637



Exchange differences



 94



 230



 -



 324



Utilised in the year



 (349)



 (16,328)



 -



 (16,677)



Charged/(credited) to the income statement



 1,984



 5,326



 (78)



 7,232



Companies disposed



 (110)



 (9)



 -



 (119)



At 31 December 2016



 2,919



 7,442



 36



 10,397



 


 
















































At 1 January 2015



 4,881



 5,570



 362



 10,813



Exchange differences



 19



 30



 -



 49



Reclassification from current liabilities



 462



 -



 -



 462



Utilised in the year



 (3,372)



 (3,710)



 (8)



 (7,090)



Credited/(charged) to the income statement



 (690)



 16,333



 (240)



 15,403



At 31 December 2015



 1,300



 18,223



 114



 19,637



 


 


















































2016


£'000



2015


£'000



Analysis of total provisions















Current - to be utilised within one year









 8,826



18,594



Non-current - to be utilised in more than one year









 1,571



1,043












 10,397



19,637



 


Property related provisions


The Group recognises a provision for onerous contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. Provision is made for the future rental cost of vacant property and expected dilapidation expenses. In calculating the provision required, account is taken of the duration of the lease and any recovery of cost achievable from subletting. Property provisions occur principally in the US and UK and relate to a variety of lease commitments. The longest lease term expires in 2026.


Litigation provisions


At any point in time the Group can be involved in a variety of litigation and dispute issues. A provision is established in respect of such issues when it is probable that the liability has been incurred and the amount of the liability can be reasonably estimated. The Group analyses its litigation exposures based on available information, including external legal consultation where appropriate, to assess its potential liability. Where appropriate the Group also provides for the cost of defending or initiating such matters. However, the final outcome could differ materially from the amount provided.


The amount charged to the income statement in 2016 includes litigation costs related to employment contract disputes.


























































Where a litigation provision has been made it is stated gross of any third party recovery. All such recoveries are included as "Other receivables" within trade and other receivables. At 31 December 2016, in connection with certain litigation matters, the Group's litigation provisions include an amount of £0.1million (2015: £0.1million) to reflect this gross basis and the corresponding insurance recovery has been included within trade and other receivables. This presentation has had no effect on the consolidated income statement for the year ended 31 December 2016 (2015: nil).


Other


Other provisions include provisions for clawback of commission which arises on certain types of Employee Benefits contracts.


 


24. Share capital and premium






Number of shares



Ordinary


shares


£'000



Share


premium


£'000



Total


£'000



Allotted, called up and fully paid















At 1 January 2015



 220,136,567



 11,006



 103,941



 114,947



Issued during the year



 34,440



 2



 133



 135



At 31 December 2015



 220,171,007



 11,008



 104,074



 115,082



Issued during the year



 10,000



 -



 37



 37



At 31 December 2016



 220,181,007



 11,008



 104,111



 115,119



 


 


Ordinary shares carry rights to dividends, voting and proceeds on winding up and have a par value of £0.05.


During the year the Company issued 10,000 (2015: 34,440) ordinary shares for a consideration of £38,250 (2015: £134,532) following exercises by executives of options held under the Jardine Lloyd Thompson Group plc Executive Share Option Scheme.


The Employee Benefit Trust holds 8,715,895 ordinary shares (2015: 8,994,952) acquired to settle employee share based payments. Acquisitions of such shares are booked directly to equity.


 


25. Non-controlling interests


The Group's total non-controlling interests' financial position for the year is £22,764,000 of which £10,556,000 is attributed to JLT's Private Client Services group of business (PCS). PCS is defined as a material non-controlling interest to the Group. The non-controlling interests in respect of other entities are not individually material.


Set out below is the summarised financial information for PCS.


Summarised Balance Sheet





















































































2016


£'000



2015


£'000



Current















Assets









 62,294



49,451



Liabilities









(34,218)



(28,535)



Total









 28,076



20,916



Non-current















Assets









 3,152



2,998



Liabilities









(316)



(312)



Total









 2,836



2,686



Net assets









30,912



23,602



 


25. Non-controlling interests


Summarised Statement of Comprehensive Income







































































2016


£'000



2015


£'000



Revenue









64,018



55,357



Profit for the year









20,663



18,195



Other comprehensive income









550



95



Total comprehensive income for the year









21,213



18,290


















Total comprehensive income attributable to non-controlling interests









5,166



4,575



Dividends paid to non-controlling interests









2,229



4,289



 


Summarised Statement of Cash Flows


















































2016


£'000



2015


£'000



Net cash generated from operating activities









19,897



34,522



Net cash used in investing activities









(291)



(1,403)



Net cash used in financing activities









(18,348)



(17,340)



Net increase in cash and cash equivalents









1,258



15,779



 


The information above is the amount before inter-company eliminations.


 


26. Other reserves















































































Share


premium


£'000



Fair value


and hedging


£'000



Exchange


reserves


£'000



Total


£'000



At 1 January 2016



 104,074



 (12,827)



 (17,280)



 73,967



Fair value gains/(losses) net of tax:















- available-for-sale



 -



 42



 -



42



- available-for-sale reclassified to the income statement



 -



(181)



-



(181)



- cash flow hedges



 -



 (41,487)



 -



 (41,487)



Currency translation differences



 -



 -



 100,841



 100,841



Net (losses)/gains recognised directly in equity



 -



 (41,626)



 100,841



 59,215



Issue of share capital



 37



 -



 -



 37



At 31 December 2016



 104,111



 (54,453)



 83,561



 133,219



 















































































Share


premium


£'000



Fair value and hedging


£'000



Exchange


reserves


£'000



Total


£'000



At 1 January 2015



 103,941



 (234)



 (5,033)



 98,674



Fair value (losses)/gains net of tax:















- available-for-sale



 -



 (34)



 -



 (34)



- available-for-sale reclassified to the income statement



 -



 10



-



 10



- cash flow hedges



 -



 (12,569)



 -



 (12,569)



Currency translation differences



 -



 -



 (12,247)



 (12,247)



Net losses recognised directly in equity



 -



 (12,593)



 (12,247)



 (24,840)



Issue of share capital



 133



 -



 -



 133



At 31 December 2015



 104,074



 (12,827)



 (17,280)



 73,967



 


27.  Qualifying Employee Share Ownership Trust


During the year, the Qualifying Employee Share Ownership Trust (QUEST) allocated nil ordinary shares to employees in satisfaction of options that have been exercised under the Sharesave schemes (2015: nil).


 


28.  Cash generated from operations


















































































































2016


£'000



2015


£'000



Profit before taxation



 134,880



155,027



Investment and finance income



 (6,877)



(5,301)



Interest payable on bank loans and finance leases



 17,491



16,782



Fair value (gains)/losses on available-for-sale financial assets



 (87)



41



Net pension financing expenses



 4,872



6,124



Unwinding of liability discounting



 1,862



1,567



Depreciation



 12,526



11,600



Amortisation of other intangible assets



 36,896



31,310



Amortisation of share based payments



 24,892



20,075



Share of results of associates' undertakings



 (1,353)



(5,531)



Non cash exceptional items



 5,294



21,959



Losses on disposal of businesses



 1,660



527



(Gains)/losses on disposal of property, plant and equipment



 (10)



60



Losses on disposal of available-for-sale financial assets



 8



72



Gain on sale of associates



 -



(19,142)



Increase in trade and other receivables



 (67,160)



(23,475)



Increase in trade and other payables - excluding insurance broking balances



 24,788



22,539



Decrease in provisions for liabilities and charges



 (12,440)



(7,833)



Decrease in retirement benefit obligations



 (10,530)



(11,021)



Net cash inflow from operations



 166,712



215,380



 


29. Business combinations


Adjustments in respect of prior year acquisitions


During the year, the contingent consideration booked in respect of acquisitions completed in previous years has been revised following the final settlement of amounts due or the revision of amounts due or the revision of estimates based on performance conditions.


 


































Revisions to contingent consideration during the year



 Consideration at 31 Dec 15


£'000



 Change in estimated consideration impacting goodwill


£'000



 Consideration at 31 Dec 2016


£'000



 Paid during the year


£'000



Ingham Holdings Limited



 1,577



 (1,577)



 -  



 -  



Keenan Insurances (Ireland)



 46



 (46)



 -  



 -  






 1,623



 (1,623)



 -  



 -  



 


 


2016 Acquisitions


During the year, the process of finalising the provisional fair values in respect of acquisitions carried out during 2015 has resulted in following changes.








































 Revised fair value acquired


£'000



 Provisional fair value reported at


31 Dec 2015


£'000



 Change in fair value


£'000



Close Brothers Asset Management (Close brothers)






 491



 580



 (89)



Pierre Leblanc & Associés SAS (PL&A)






 1,127



 990



 137









 1,618



 1,570



 48



 


These changes in fair value affected the following balance sheet classes:

























































































Revised fair value acquired


£'000



Provisional


fair value


reported at


31 Dec 2015


£'000



Change in


fair value


£'000



Property, plant and equipment






 43



 4



 39



Other intangible assets






 1,068



 1,068



 -  



Trade and other receivables






 713



 713



 -  



Cash and cash equivalents












  



- own cash






 511



 511



 -  



- fiduciary cash






 2,218



 2,218



-



Insurance payables






 (2,218)



 (2,218)



 -  



Trade and other payables






 (793)



 (704)



 (89)



Current taxation






 76



 (22)



 98









 1,618



 1,570



 48



 






























































Goodwill calculation






At


31 Dec 2016


£'000



At


31 Dec 2015


£'000



Change


£'000



Purchase consideration















- cash paid






 6,030



 6,030



 -  



- contingent consideration






 717



 717



 -  



- deferred consideration






 248



 248



 -  



Total purchase consideration






 6,995



 6,995



 -  



Less: fair value of net assets acquired






 1,618



 1,570



 48



Goodwill






 5,377



 5,425



 (48)



 


29. Business combinations continued






















































At


31 Dec 2016


£'000



At


31 Dec 2015


 £'000



Change


£'000



Purchase consideration settled in cash






6,030



6,030



 -  



Cash and cash equivalents - own cash in subsidiaries acquired






 (511)



 (511)



 -  









 5,519



 5,519



 -  



Cash and cash equivalents - fiduciary cash in subsidiaries acquired






 (2,218)



 (2,218)



 -  



Cash outflow on acquisition






 3,301



 3,301



 -  



 


 


Current year acquisitions


During the year the following new business acquisitions and additional investments were completed:



















































Notes



Acquisition


date



Percentage


voting rights


acquired



Cost


£'000



Broderick Piller Pty Ltd (Workwise)



i



May 2016



100%



 7,135



Stonehill Reinsurance Partners, LLC (Stonehill)



ii



Dec 2016



100%



 8,790



Acquisition of other new businesses completed during the year



iii



Jan - Dec 2016



various



 9,392



Additional investments in existing businesses



iv



Jan - Dec 2016



various



 5,489















 30,806



 


 


i) Acquisition of Broderick Piller Pty Ltd (Workwise)


On 10 May 2016, the Group completed the acquisition of Broderick Piller Pty Ltd trading as Workwise Occupational Health, a leading provider of workplace, health & safety and rehabilitation services in Western Australia. The acquired business contributed revenue of £1,243,000 and net profit, including acquisition and integration costs incurred to date, of £70,000 to the Group for the period since acquisition. If the acquisition had taken place on 1 January 2016, we estimate the contribution to Group revenue would have been £2,086,000 and net profit, including acquisition and integration costs incurred to date, would have been £434,000.


 























































Goodwill calculation












£'000



Purchase consideration















- cash paid












 4,415



- contingent consideration












 2,720



Total purchase consideration












 7,135



Less: fair value of net assets acquired












 1,258



Goodwill












 5,877



 


 


 


The assets and liabilities arising from the acquisition were as follows:







































































Acquiree's


carrying


amount


£'000



Fair value


£'000



Property, plant and equipment









 59



 59



Other intangible assets









 3



 606



Trade and other receivables









 277



 277



Cash and cash equivalents















- own cash









 497



 497



Deferred taxation









 (181)



 (181)












 655



 1,258



 
































£'000



Purchase consideration settled in cash






 4,415



Cash and cash equivalents - own cash in subsidiary acquired






 (497)



Cash outflow on acquisition






 3,918



 


As at 31 December 2016, the process of reviewing the fair values of assets acquired had not been completed, consequently the fair values stated above are provisional.


The contingent consideration of £2,720,000 is primarily based upon the expected profit before tax of the business for future periods up to 2020.


None of the goodwill recognised is expected to be deductible for income tax purposes.


ii) Acquisition of Stonehill Reinsurance Partners, LLC (Stonehill)


On 15 December 2016, the Group acquired the assets of Stonehill Reinsurance Partners LLC in North America, a reinsurance intermediary specialised in Medical Professional Liability and healthcare related business. The acquired business contributed revenue of £147,000 and net profit, including acquisition and integration costs incurred to date, of £24,000 to the Group for the year since acquisition. If the acquisition had taken place on 1 January 2016, we estimate the contribution to Group revenue would have been £3,804,000 and net profit, including acquisition and integration costs incurred to date, would have been £529,000.























































Goodwill calculation






£'000



Purchase consideration









- cash paid






 2,657



- contingent consideration






 6,133



Total purchase consideration






 8,790



Less: fair value of net assets acquired






 2,085



Goodwill






 6,705



 


The assets and liabilities arising from the acquisition were as follows:



























































Acquiree's


carrying


amount



Fair value


£'000



Property, plant and equipment



 141



 141



Other intangible assets



 -  



 1,626



Trade and other receivables



 243



 243



Cash and cash equivalents









- own cash



 1,015



 1,015



- fiduciary cash



 1,098



 1,098



Insurance creditors



 (1,098)



 (1,098)



Trade and other payables



 (940)



 (940)






 459



 2,085



 










































£'000



Purchase consideration settled in cash






 2,657



Cash and cash equivalents - own cash in subsidiary acquired






 (1,015)









 1,642



Cash and cash equivalents - fiduciary cash in subsidiary acquired






 (1,098)



Cash outflow on acquisition






 544



 


As at 31 December 2016, the process of reviewing the fair values of assets acquired had not been completed, consequently the fair values stated above are provisional.


The contingent consideration of £6,133,000 is based upon expected revenues up to 2020.


The maximum consideration is capped at USD15,000,000.


Goodwill recognised is expected to be deductible for income tax purposes.


Overview


iii) Other acquisitions and additional investments


 
























































Goodwill calculation






£'000



Purchase consideration









- cash paid






 9,315



- contingent consideration






 4,641



- deferred consideration






 815



- cancellation of loans






 110



Total purchase consideration






 14,881



Less fair value of net assets acquired






 3,608



Less equity movement on transactions with non-controlling interests






 4,330



Goodwill






 6,943



 


 


The assets and liabilities arising from acquisitions were as follows:










































































Acquiree's


carrying


amount



Fair value


£'000



Property, plant and equipment



 12



 12



Other intangible assets



 -  



 1,692



Trade and other receivables



 846



 846



Cash and cash equivalents









- own cash



 106



 106



- fiduciary cash



 290



 290



Insurance payables



 (290)



 (290)



Trade and other payables



 (64)



 (64)



Current taxation



 (27)



 (27)



Deferred taxation



 (116)



 (116)



Non-controlling interests



 1,159



 1,159






 1,916



 3,608



 










































£'000



Purchase consideration settled in cash






 9,315



Cash and cash equivalents  - own cash in subsidiary acquired






 (106)









 9,209



Cash and cash equivalents  - fiduciary cash in subsidiary acquired






 (290)



Cash outflow on acquisition






 8,919



 


As at 31 December 2016, the process of reviewing the fair values of assets acquired had not been completed, consequently the fair values stated above are provisional.


The contingent consideration of  £4,641,000 relates to various acquisitions of which the largest individual consideration of £1,347,000 is based upon expected revenues from 2017 to 2020.


The deferred consideration of £815,000 is based upon the net assets in the completion accounts.


None of the goodwill recognised is expected to be deductible for income tax purposes.


 


Group summary of the net assets acquired and goodwill


 


The assets and liabilities arising from acquisitions were as follows:


















































































































Workwise


£'000



Stonehill


£'000



Others


£'000



 Total


£'000



Purchase consideration:















- cash paid



 4,415



 2,657



 9,315



 16,387



- contingent consideration



 2,720



 6,133



 4,641



 13,494



- deferred consideration



 -  



 -  



 815



 815



- cancellation of loans



 -  



 -  



 110



 110



Total purchase consideration



 7,135



 8,790



 14,881



 30,806



Less fair value of net assets acquired



 1,258



 2,085



 3,608



 6,951



Less equity movement on transactions with non-controlling interests



 -  



 -  



 4,330



 4,330



Goodwill on acquisitions occurring during the year



 5,877



 6,705



 6,943



 19,525



Impact of revisions to deferred consideration












 (1,623)



Impact of revision to fair value adjustment in relation to acquisitions completed in 2015












 (48)



Net increase in goodwill












 17,854



Impact of additional investments












 4,330



Net decrease in equity












 4,330



 


Group summary of cash flows



















































Workwise


£'000



Stonehill


£'000



Others


£'000



 Total


£'000



Purchase consideration settled in cash



 4,415



 2,657



 9,315



 16,387



Cash and cash equivalents - own cash in subsidiary acquired



 (497)



 (1,015)



 (106)



 (1,618)






 3,918



 1,642



 9,209



 14,769



Cash and cash equivalents - fiduciary cash in subsidiary acquired



 -  



 (1,098)



 (290)



 (1,388)



Total purchase consideration



 3,918



 544



 8,919



 13,381



 


                                                                                                                                                                                                               


30. Business disposals


On 30 December 2016, the Group disposed of 100% of its shareholdings in Thistle Insurance Services Limited.


 


Net assets and proceeds of disposal





















































































































Fair value


£'000



Goodwill






 15,846



Property, plant and equipment






 591



Other intangible assets






3,553



Trade and other receivables






 13,410



Cash and cash equivalents









- own cash






 8,548



- fiduciary cash






 9,196



Insurance payables






 (9,196)






 (2,202)



Provisions for liabilities and charges






 (119)



Net assets at disposal






39,627



Gain on disposal






 3,438



Proceeds on disposal






 43,065


















Total









£'000



Deferred proceeds






 10,570



Cash inflow on disposal during the year






 32,495



Total consideration






 43,065












 










































Total


£'000



Disposal consideration settled in cash






 32,495



Cash and cash equivalents - own cash in subsidiaries disposed









- own cash in subsidiary sold






 (8,548)



- fiduciary cash in subsidiary sold






 (9,196)



Cash inflow on disposal during the year






 14,751



 


The deferred proceeds of £10,570,000 include an amount of £4,269,000 based upon the balance sheet positions at completion and an amount of £6,301,000 contingent upon the recovery of certain assets, the majority of which were included in the final closing balance sheet of the company disposed of. The contingent consideration of £6,301,000 is recognised as an available-for-sale asset. Including the cost on disposal of £3,484,000, the net loss is £46,000.


 


Other disposals


During the year the Group completed other disposals, none of which were individually significant.


 


Net assets and proceeds of disposal































































































































Total


£'000



Goodwill






 1,705



Property, plant and equipment






 176



Other intangible assets






 224



Trade and other receivables






 366



Cash and cash equivalents









- own cash






 494



- fiduciary cash






 286



Insurance payables






 (286)



Trade and other payables






 (894)



Current taxation






90



Non-controlling interests






 (31)



Net assets at disposal






 2,130



Exchange gains recycled from exchange reserves






325  



Equity movement on transactions with non-controlling interests






32



Loss on disposal






 (770)



Proceeds on disposal






 1,717


















Total









£'000



Deferred proceeds






 547



Cash inflow on disposal during the year






 1,170



Total consideration






 1,717



 










































Total


£'000



Disposal consideration settled in cash






 1,170



Cash and cash equivalents - own cash in subsidiaries disposed









- own cash in subsidiary sold






 (494)



- fiduciary cash in subsidiary sold






 (286)



Cash inflow on disposal during the year






 390



 


Including the cost on disposal of £844,000, the net loss is £1,614,000.


Group summary of cash flows






















































Thistle


£'000



Others


£'000



Total


£'000



Disposal consideration settled in cash






 32,495



 1,170



 33,665



Cash and cash equivalents - own cash in subsidiaries disposed















- own cash in subsidiary sold






 (8,548)



 (494)



 (9,042)



- fiduciary cash in subsidiary sold






 (9,196)



 (286)



 (9,482)



Cash inflow on disposal during the year






 14,751



 390



 15,141



 


31. Retirement benefit obligations


The Group operates a number of pension schemes throughout the world, the most significant of which are of the defined benefit type and operate on a funded basis. The principal pension schemes are the Jardine Lloyd Thompson UK Pension Scheme, the JLT (USA) Incentive Savings Plan, the JLT (USA) Employee Retirement Plan, the JLT (USA) Stable Value Plan, the Pension Plan for Employees of Jardine Lloyd Thompson Canada Inc and the Jardine Lloyd Thompson Ireland Limited Pension Fund.


The pension service costs accrued for the year are as follows:



















































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Defined benefit schemes



 -



-



 487



2,630



 487



2,630



Defined contribution schemes



 20,824



21,265



 19,254



15,723



 40,078



36,988






 20,824



21,265



 19,741



18,353



 40,565



39,618



 


 


The Jardine Lloyd Thompson UK Pension Scheme has two sections; one providing defined benefits and the other providing benefits on a defined contribution basis. The assets of the scheme are held in a trustee administered fund separate from the Company.


With effect from 1 December 2006 the defined benefit section of the Scheme was amended to cease future benefits accruals. Under the Scheme as amended, a participant's normal retirement benefit will be determined based on their service and compensation prior to 1 December 2006.


The latest finalised triennial actuarial funding valuation of the Jardine Lloyd Thompson UK Pension Scheme was undertaken as at 31 March 2014. This valuation was updated to 31 December 2016 by a qualified actuary employed by the Group. An updated triennial actuarial valuation will be performed in 2017.


The principal overseas schemes are:


a)  

The JLT (USA) Incentive Savings Plan which is a defined contribution scheme. Employees may contribute up to 50% of their salary subject to an IRS maximum each year USD18,000 in 2016 and the Group contributes at a rate of 100% of each 1% contributed by the employee up to a maximum employee contribution of 4%, up to a maximum of USD10,600. Employees aged over 50 may make "catch-up" contributions subject to an IRS maximum each year USD6,000 in 2016.


b)

     

The JLT (USA) Employee Retirement Plan which is a defined benefit scheme. The latest actuarial valuation was undertaken at 1 January 2016 by independent actuaries. With effect from 31 July 2005 the plan was amended to eliminate future benefit accruals. Under the plan as amended, a participant's normal retirement benefit will be determined based on their service and compensation prior to 31 July 2005. The average compensation and length of service will be determined as at 31 July 2005.


      The Group has made a settlement gain of £127,000 (2015: £492,000) relating to non-routine lump sum payments and it is disclosed under the                 curtailment gain.


c)

     

The JLT (USA) Stable Value Plan. The latest actuarial valuation was undertaken as at 1 January 2016 by independent actuaries. With effect from 31 March 2016 the Plan was amended to eliminate future benefit accruals. Under the Plan as amended, a participant's normal retirement benefit will be determined based on their service and compensation prior to 31 March 2016. The average compensation and length of service will be determined as at 31 March 2016. The Plan was closed in 2016, however the Group made an allowance for the upcoming closure of the Stable Value Plan to future accrual in the 2015 accounts. As a result, a curtailment gain of £506,000 was recognised in 2015. No further gain or loss on curtailment was recognised in 2016.


d)

     

The Pension Plan for Employees of Jardine Lloyd Thompson Canada Inc. has two sections; one providing defined benefits based primarily on the 2007 pensionable salary and the other providing benefits on a defined contribution basis. The JLT pension contribution for the defined contribution plan ranges from 3% to 13% based on age and service. The company makes additional contribution to defined contribution plans, not exceeding 2% of pensionable earnings, if the member makes a matching voluntary contributions. The Defined Benefit  Pension Plan was amended on 1 January 2009 in order to close the plan to new entrants and eliminate future benefit accruals from this date forward.


      The JLT Canada Defined Pension Plans last formal valuation  was undertaken as of 31 December 2013 by a qualified third party actuary. 


e)  

The Jardine Lloyd Thompson Ireland Limited Pension Fund, which is a defined benefit pension scheme, has its assets held in a separately administered fund. The contributions to it are agreed between the Trustees and the Company, based on the advice of an appropriately qualified independent actuary. The most recent triennial actuarial valuation for funding purposes was carried out by the appropriately qualified independent actuary as at 1 January 2014. With effect from 30 November 2008, the scheme was closed to new entrants and future service accrual ceased. The company also operates a defined contribution scheme, namely The Jardine Lloyd Thompson 2004 Retirement Benefits Scheme, which is held and administered under a separate trust.


      The next actuarial valuation is due and being carried out as part of the current renewal of the Scheme for 1 January 2017.


 


The principal actuarial assumptions used were as follows:






































































At 31 December 2016



UK


Scheme



US


Scheme



Canadian Scheme



Irish


Scheme



US Stable Value Plan



Rate of increase in salaries



n/a



n/a



3.25%



n/a



n/a



Rate of increase of pensions in payment (a)



3.24%



n/a



3.25%



3.00%



n/a



Discount rate (b)



2.80%



4.00%



3.90%



1.90%



3.35-3.40%



Inflation rate



3.34%



2.00%



2.25%



1.50%



2.00%



Revaluation rate for deferred pensioners



2.34%



n/a



n/a



1.50%



n/a



Mortality - life expectancy at age 65 for male members: (c)


















Aged 65 at 31 December (years)



21.8



21.3



22.0



22.8



21.3



 


 






































































At 31 December 2015



UK


Scheme



US


Scheme



Canadian Scheme



Irish


Scheme



US Stable Value Plan



Rate of increase in salaries



n/a



n/a



2.50%



n/a



n/a



Rate of increase of pensions in payment (a)



2.82%



n/a



3.25%



3.00%



n/a



Discount rate (b)



3.86%



4.20%



4.00%



2.50%



3.50-3.55%



Inflation rate



2.92%



2.00%



2.25%



1.75%



2.00%



Revaluation rate for deferred pensioners



1.92%



n/a



n/a



1.75%



n/a



Mortality - life expectancy at age 65 for male members: (c)


















Aged 65 at 31 December (years)



21.7



21.7



22.0



22.8



21.7



 


a)   In respect of the UK scheme, where there are inflation linked benefits, the inflation increases are limited to a maximum of 5% per annum (some are limited to 3% per annum).


(b)  In line with IAS 19 (Revised) the expected return on scheme assets assumption is the same as the discount rate assumed for the liabilities.


(c)   Mortality assumptions for the UK scheme are based on 105% of the S2PxA tables, with improvements based on CMI 2015 tables with a 1.25% p.a. long-term rate of improvement.


Mortality assumptions for the US Scheme and US Stable Value Plan are based on the RP2014 Mortality Table with MP2016 Projections.         

Mortality assumptions for the Canadian Scheme are based on the CPM-2014 Private Table with generational projection using scale CPM-B1D2014.


Mortality assumptions for the Irish Scheme, assume that deaths after retirement will be in accordance with standard mortality tables 90% PxA92C=2004 with allowance for expected future mortality improvements. There is assumed to be no pre-retirement mortality.


The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

































Impact on defined benefit obligation






Change in


assumptions



Change to


obligation



Discount rate



decrease of 0.1%



increase of 2.0%



Inflation rate



increase of 0.1%



increase of 1.0%



Life expectancy



 increase of 1 year



increase of 4.0%



 


 


The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the balance sheet. Note this sensitivity is for defined benefit obligations only and does not consider the impact that changes in assumptions may have on the assets, in particular the assets held in respect of the insured pensioners.


The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.


                                                                                                                                                                                                               


Defined benefit obligation



















































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Present value of funded obligations



 (674,029)



(576,343)



 (72,315)



(61,940)



 (746,344)



(638,283)



Fair value of plan assets



 489,533



457,396



 58,399



50,500



 547,932



507,896



Net liability recognised in the balance sheet



 (184,496)



(118,947)



 (13,916)



(11,440)



 (198,412)



(130,387)



 


Reconciliation of defined benefit liability














































































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Opening defined benefit liability



 (118,947)



(162,620)



 (11,440)



(16,415)



 (130,387)



(179,035)



Exchange differences



 -  



-



 (2,169)



(396)



 (2,169)



(396)



Pension expense



 (4,778)



(5,902)



 (1,274)



(2,421)



 (6,052)



(8,323)



Employer contributions



 10,952



11,117



 886



3,101



 11,838



14,218



Total (loss)/gain recognised in reserves



 (71,723)



38,458



 81



4,691



 (71,642)



43,149



Net liability recognised in the balance sheet



 (184,496)



(118,947)



 (13,916)



(11,440)



 (198,412)



(130,387)



 


Reconciliation of defined benefit obligation









































































































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Opening defined benefit obligation



 (576,343)



(641,759)



 (61,940)



(78,044)



 (638,283)



(719,803)



Exchange differences



 -  



-



 (11,626)



(870)



 (11,626)



(870)



Service cost



 -  



-



 (487)



(2,630)



 (487)



(2,630)



Interest cost



 (21,435)



(22,366)



 (2,502)



(2,507)



 (23,937)



(24,873)



Curtailment gain



 -  



-



 127



998



 127



998



Settlement amount



 -  



-



 1,315



5,773



 1,315



5,773



(Loss)/gain on defined benefit obligation



 (121,841)



50,051



 (1,120)



5,453



 (122,961)



55,504



Actual benefit payments



 45,590



37,731



 3,918



9,887



 49,508



47,618



Closing defined benefit obligation



 (674,029)



(576,343)



 (72,315)



(61,940)



 (746,344)



(638,283)



 


Reconciliation of fair value of assets









































































































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Opening value of assets



 457,396



479,139



 50,500



61,629



 507,896



540,768



Exchange differences



 -  



-



 9,457



474



 9,457



474



Expected return on assets



 17,034



16,722



 2,031



2,027



 19,065



18,749



Actuarial gain/(loss)



 50,118



(11,593)



 1,201



(762)



 51,319



(12,355)



Employer contributions



 10,952



11,117



 886



3,101



 11,838



14,218



Actual benefit payments



 (45,590)



(37,731)



 (3,918)



(9,887)



 (49,508)



(47,618)



Settlement amount



 -  



-



 (1,315)



(5,773)



 (1,315)



(5,773)



Expenses



 (377)



(258)



 (443)



(309)



 (820)



(567)



Closing value of assets



 489,533



457,396



 58,399



50,500



 547,932



507,896



 


Overview


The analysis of the fair value of the scheme assets is as follows:






































































UK Schemes



Overseas Schemes



At 31 December 2016



Value


£'000



Value


%



Value


£'000



Value


%



Equities



 186,674



38%



 34,795



60%



Bonds



 -  



-



 10,454



18%



Investment funds



 95,360



19%



 -  



-



Qualifying insurance policies



 205,719



42%



-



-



Other assets



 -  



-



 3,827



6%



Cash



 1,780



1%



 9,323



16%



Total market value



 489,533



100%



 58,399



100%



 






































































UK Schemes



Overseas Schemes



At 31 December 2015



Value


£'000



Value


%



Value


£'000



Value


%



Equities



 174,843



38%



 32,395



64%



Bonds



 -  



-



 14,848



30%



Investment funds



 99,079



22%



 -  



-



Qualifying insurance policies



 176,996



39%



 -  



-



Other assets



 -  



-



 2,656



5%



Cash



 6,478



1%



 601



1%



Total market value



 457,396



100%



 50,500



100%



 


Other assets include hedge funds and property. The schemes do not hold cash as a strategic investment and cash balances at 31 December represent working balances.


 


Reconciliation of return on assets



















































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



Expected return on assets



 17,034



16,722



 2,031



2,027



 19,065



18,749



Actuarial gain/(loss)



 50,118



(11,593)



 1,201



(762)



 51,319



(12,355)



Actual return on assets



 67,152



5,129



 3,232



1,265



 70,384



6,394



 


 


The amounts recognised in the consolidated income statement are as follows:


 









































































































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000
























Service cost



 -  



-



 (487)



(2,630)



 (487)



(2,630)



Settlement and curtailment gain



 -  



-



 127



998



 127



998



Expenses



 (377)



(258)



 (443)



(309)



 (820)



(567)



Total (included within salaries and associated expenses)



 (377)



(258)



 (803)



(1,941)



 (1,180)



(2,199)



Interest cost



 (21,435)



(22,366)



 (2,502)



(2,507)



 (23,937)



(24,873)



Expected return on assets



 17,034



16,722



 2,031



2,027



 19,065



18,749



Total (included within finance costs)



 (4,401)



(5,644)



 (471)



(480)



 (4,872)



(6,124)



Expenses before taxation



 (4,778)



(5,902)



 (1,274)



(2,421)



 (6,052)



(8,323)



 


                                                                                                                                                                                                               


The amounts included in the consolidated statement of comprehensive income are as follows:




























































UK Schemes



Overseas Schemes



Total






2016


£'000



2015


£'000



2016


£'000



2015


£'000



2016


£'000



2015


£'000



(Loss)/gain on defined benefit obligation



 (121,841)



50,051



 (1,120)



5,453



 (122,961)



55,504



Actuarial gain/(loss)



 50,118



(11,593)



 1,201



(762)



 51,319



(12,355)



Total actuarial (loss)/gain recognised



 (71,723)



38,458



 81



4,691



 (71,642)



43,149



Cumulative actuarial loss recognised



 (277,162)



(205,439)



 (32,756)



(32,837)



 (309,918)



(238,276)



 


 


The five year history of experience adjustments is as follows:


 













































UK Schemes






2016


£'000



2015


£'000



2014


£'000



 


2013


£'000



2012


£'000


restated



Defined benefit obligation at end of year



 (674,029)



(576,343)



(641,759)



(583,745)



(574,360)



Fair value of plan assets



 489,533



457,396



479,139



458,727



463,621



Deficit in the schemes



 (184,496)



(118,947)



(162,620)



(125,018)



(110,739)



 


 


Difference between the actual and expected return on plan assets






















































- amount (£'000)



 50,118



(11,593)



16,437



(22,217)



32,889



- expressed as a percentage of the plan assets



10.24%



(2.53%)



3.43%



(4.84%)



7.09%





















Experience (gain)/loss on plan liabilities


















- amount (£'000)



 (7,009)



(8,840)



1,592



1,364



11,890



-

expressed as a percentage of the present value of the plan liabilities



1.04%



1.53%



(0.25%)



(0.23%)



(2.07%)



 


 













































Overseas Schemes






2016


£'000



2015


£'000



2014


£'000



2013


£'000



2012


£'000


restated



Defined benefit obligation at end of year



 (72,315)



(61,940)



(78,044)



(60,566)



(68,937)



Fair value of plan assets



 58,399



50,500



61,629



54,957



48,285



Deficit in the schemes



 (13,916)



(11,440)



(16,415)



(5,609)



(20,652)



 

























































Difference between the actual and expected return on plan assets



- amount (£'000)



 1,201



(762)



2,450



6,863



3,034



- expressed as a percentage of the plan assets



2.06%



(1.51%)



3.98%



12.49%



6.28%





















Experience (gain)/loss on plan liabilities


















- amount (£'000)



 (4,450)



(1,427)



1,265



377



(3,925)



-

expressed as a percentage of the present value of the plan liabilities



6.15%



2.30%



(1.62%)



(0.62%)



5.69%



 










































The expected employer contributions in respect of the year ending 31 December 2017 are as follows:



















Defined


benefit


£'000



UK Scheme


















 15,500



Irish Scheme


















 892



Total expected contributions


















 16,392



 


Overview


STRATEGIC REPORT


32. Related-party transactions




Transactions with the Jardine Matheson Group


 


As at 10 February 2017 the Jardine Matheson Group owns 40.16% of the Company's shares via its wholly-owned subsidiary JMH Investments Limited. The remaining 59.84% of the shares are widely held.


 


In the normal course of business a number of the Group's subsidiaries undertake, on an arm's-length basis, a variety of transactions with the Jardine Matheson Group (JMG) and its associates (JMA).


 


The following transactions were carried out during the year:








































































































2016



2015






JMG


£'000



JMA


£'000



Total


£'000



JMG


£'000



JMA


£'000



Total


£'000



Income





















Fees and commissions



3,999



1,941



5,940



3,472



1,794



5,266



Expenditure





















Administrative expenses



1,598



-



1,598



1,729



-



1,729
























Year-end balances arising from these transactions:





















Trade and other receivables



962



642



1,604



522



253



775



Trade and other payables



(82)



-



(82)



(58)



(1)



(59)






880



642



1,522



464



252



716



 


 


Transactions with associates

The following transactions were carried out with associates during the year:


































































































































2016


£'000



2015


£'000



Income


















Fees and commissions












3,238



5,994





















Finance income


















Interest receivable - own funds












8



194





















Expenditure


















Administrative expenses












19



67





















Year-end balances arising from these transactions:


















Trade and other receivables












4,966



5,115



Trade and other payables












(1)



(140)















4,965



4,975



 


                                                                                                                                                                                                               


33. Commitments


Capital commitments


Capital expenditure contracted for 2016 at the balance sheet date amounts to £1,293,000. In 2015 there was no significant capital expenditure contracted.


 


Operating lease commitments - where a Group company is the lessee


The future aggregate minimum lease payments under a non-cancellable operating leases are as follows:


































































2016


£'000



2015


£'000



No later than 1 year















42,981



24,987



Later than 1 year and no later than 5 years















146,090



121,441



Later than 5 years















300,912



264,356


















489,983



410,784



 


The Group leases various offices under non-cancellable operating lease agreements. The principal lease term on the Group's headquarters at The St Botolph Building is for 22 years from the balance sheet date. Rents will be reviewed on 1 October 2018, and every 5 years thereafter, and will be calculated by reference to the prevailing market rate.


 


Sub-leases


 


Operating lease commitments - where a Group company is the lessor


 


The future aggregate minimum lease payments under non-cancellable operating sub-leases are as follows:

























































2016


£'000



2015


£'000



No later than 1 year















151



143



Later than 1 year and no later than 5 years















231



370


















382



513



 


Legal and other loss contingencies


Jardine Lloyd Thompson Group plc and its subsidiaries are subject to various claims and legal proceedings and disputes including alleged errors and omissions in connection with the placement of insurance and reinsurance risks and consulting services.


IFRS requires that liabilities for contingencies be recorded when it is probable that a liability has been incurred before the balance sheet date and the amount can be reasonably estimated. Significant management judgement is required to comply with this guidance. The Group analyses its litigation exposure based on available information, including external legal consultation where appropriate, to assess its potential liability.


On the basis of present information, amounts already provided, availability of insurance coverages and legal advice received, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the consolidated financial position of the Group. However, it is possible that future results of operations or cash flows for any annual period could be materially affected by an unfavourable resolution of these matters.


As at 31 December 2016, the Group has contingent liabilities in respect of guarantees and letters of credit given on behalf of Group companies amounting to £12,024,000 (2015: £7,113,000).


In the UK, the Group is working with the UK Financial Conduct Authority following a market-wide thematic review of financial advice provided to customers who were offered enhanced transfer value products ('ETVs'). Pending the outcome of the UK Financial Conduct Authority's review a provision has been created for the estimated administration costs of completing the work for this review. It is too early to determine whether any further liability exists.


 


34. Subsequent events


On 27 January 2017, the Group announced the acquisition of a 50.1% ownership interest in CRP Holding Company LLC, the holding company of Construction Risk Partners LLC, one of the leading construction risk and surety specialty brokers in the USA, for a consideration of USD 50,000,000 subject to adjustment.


 


35. Subsidiaries and associated companies


 


The following were the subsidiaries and associated undertakings at 31 December 2016. Unless otherwise shown, the capital of each company is wholly-owned, is in ordinary shares and the principal country of operation is the country of incorporation/registration.




































































































































































































































































Company



% Holding

(if less than 100%)



Registered Office address



Notes















United Kingdom












Agnew Higgins Pickering & Company Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Aldgate Trustees Ltd






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Aviary Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Burke Ford Group Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Burke Ford Trustees (Leicester) Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






CPRM Limited






Lochside House, 7 Lochside Avenue, Edinburgh, EH12 9DJ, Scotland






Echelon Consulting Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Expacare Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Fly Fizzi Limited



33.00



Pyers Croft, Compton, Chichester, West Sussex, PO18 9EX, England






GCube Underwriting Limited






155 Fenchurch Street, London, EC3M 6AL, England






Gracechurch Trustees Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Gresham Pension Trustees Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Hayward Aviation Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






iimia (Holdings) Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Independent Trustee Services Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






Ingham & Co (Liabilities) Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Ingham (Holdings) Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Jardine (Lloyd's Underwriting Agents) Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Jardine Lloyd Thompson Reinsurance Holdings Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Jardine Lloyd Thompson Reinsurance Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






Jardine Reinsurance Management Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






JIB Group Holdings Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JIB Group Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JIB Overseas Holdings Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JIB UK Holdings Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England



3



JIS (1974) Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Actuaries and Consultants Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Advisory Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Benefit Consultants Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Benefit Solutions Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Capital Markets Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England






JLT Colombia Retail Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Colombia Wholesale Limited



91.87



The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England



3



JLT Consultants & Actuaries Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Corporate Services Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT EB Holdings Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT EB Services Limited






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT Financial Consultants Ltd






The St Botolph Building, 138 Houndsditch, London, EC3A 7AW, England






JLT iimia Limited






BDO LLP, 55 Baker Street, London, W1U 7EU, England