Annual Report  
& Accounts
for the year ended 30 June 2016
Annual Report & Accounts 2016   
  
 
 
Contents
Business performance 
Highlights of the year  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01
Chairman’s statement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02
Chief Executive’s review  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03-04
Strategic report  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05-19
Corporate governance
Report of the directors  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21
Statement of directors’ responsibilities  . . . . . . . . . . . 22
Consolidated financial statements
Independent auditors’ report to the  
members of Brooks Macdonald Group plc  . . . . . . . 24-25
Consolidated statement of  
comprehensive income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Consolidated statement of financial position  . . . . 27
Consolidated statement of changes in equity  . . . 28
Consolidated statement of cash flows  . . . . . . . . . . . . . 29
Notes to the consolidated financial statements  . 30-64
Company financial statements
Independent auditors’ report to the  
members of Brooks Macdonald Group plc  . . . . . . . 65-66
Company statement of financial position  . . . . . . . . 67
Company statement of changes in equity  . . . . . . . . 68
Company statement of cash flows  . . . . . . . . . . . . . . . . . 69
Notes to the company financial statements  . . . . . . 70-79
Directors and advisers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  01
Highlights of the year
  
HIGHLIGHTS OF THE YEAR
† Excludes acquisition costs, finance cost 
of deferred consideration, changes in 
fair value of deferred consideration and 
amortisation of intangible assets . 
A reconciliation between underlying profit 
before tax and statutory profit before tax is 
shown in the Strategic report on page 7 .
Financial highlights
+3%
Underlying pre-tax profit†  
2016: £15 .536 million 
2015: £15 .078 million
+39%
Pre-tax profit 
2016: £15 .856 million 
2015: £11 .420 million
+15%
Total dividends per share  
2016: 35 .0p* 
2015: 30 .5p
* Including a proposed final dividend of 
23 .0p per share
+12%
Discretionary funds under 
management 
30 June 2016: £8 .30 billion 
30 June 2015: £7 .41 billion
Business highlights
• We celebrated our 25th year in business with continued 
growth for the group .
• Discretionary funds under management passed the 
£8 billion mark during the year .
• We retained our 5-star Defaqto ratings for our Bespoke 
Portfolio Service, Managed Portfolio Service and 
Platform offering .
• We entered into a new strategic alliance in March 2016, 
taking the total number of these partnerships to 18 .
• Our International discretionary investment services were 
made available to South African offshore investors through 
Glacier International’s Global Life Plan and to affluent clients 
in Portugal through Generali PanEurope’s tailored Private 
Wealth Portfolio .
• In March 2016 we won an unprecedented five awards at the 
Citywire Wealth Manager Regional Stars Awards .
• Our brand was relaunched in April 2016, unifying all of the 
group’s services and encapsulating all of our literature and 
communications, both in print and online .
• We extended our principal sponsorship of Middlesex County 
Cricket Club until the end of 2019 . 02  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Chairman’s statement
  
CHAIRMAN’S STATEMENT
Against a backdrop of considerable 
market and political uncertainty, the 
group has made good progress. 
Discretionary funds under 
management grew organically in all 
areas of the business and revenues 
and profits increased while we 
continued to invest in the business.
Underlying pre-tax profit for the year 
was £15 .5m (2015: £15 . 1m), a rise of 
3%, although underlying earnings per 
share have fallen to 87 . 92p (2015: 
91 . 33p) . Statutory pre-tax profits for 
the year grew by 39% to £15 . 9m (2015: 
£11 . 4m), the scale of the increase 
resulting from a reduction in the 
estimated deferred consideration 
payable in future years to the vendors 
of Levitas Investment Management 
Services Limited .
The board is recommending a final 
dividend of 23 . 0p per share which, if 
approved by shareholders, will result 
in total dividends for the year of 35 . 0p . 
This is an increase of 15% over the 
total dividends paid the previous year 
of 30 .5p per share . The final dividend 
will be paid on 28 October 2016 to 
shareholders on the register at the 
close of business on 30 September 
2016 . We remain cash generative and 
have a strong balance sheet .
The EU referendum had an effect on 
our results . In the first half of the 
financial year we decided to postpone 
the launch of two new funds . In the 
second half, investment returns were 
challenging and in the final quarter 
investor sentiment was certainly 
weaker . In spite of these market 
conditions, our discretionary funds 
under management grew strongly 
over the year to over £8 . 30bn (2015: 
£7 . 41bn), a rise of 12 . 0% . This 
compares favourably to the growth of 
the WMA Balanced index of 4 . 6% . 
We will maintain our investment 
across the business to sustain our 
continued growth . This covers 
investment in research, governance, 
IT, distribution, marketing and most 
importantly our staff . Markets have 
improved since the EU referendum, 
but sentiment remains volatile . 
Despite the uncertainties surrounding 
our exit from the EU and the 
associated market volatility, we 
believe the strength of our investment 
proposition will enable us to deliver 
good risk-adjusted returns for our 
clients .
Brooks Macdonald was established 
twenty-five years ago, with three of its 
founders continuing to be actively 
involved in the business: Chris 
Macdonald, Jon Gumpel and Richard 
Spencer . From a modest office in Park 
Street employing a handful of people, 
the business has grown into a highly 
successful investment management 
group with twelve offices and nearly 
500 staff . We are proud of Brooks 
Macdonald’s history and confident 
that we can continue to build on what 
has been achieved over the last 
quarter century . The future, we 
believe, is bright .
 
Christopher Knight 
Chairman
20 September 2016
We will maintain our investment across the business to 
sustain our continued growth. This covers investment in 
research, governance, IT, distribution, marketing and most 
importantly our staff.
 
Christopher Knight Chairman   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  03
Chief Executive’s review
  
CHIEF EXECUTIVE’S REVIEW
Chris Macdonald Chief Executive
Introduction
This has been a good year for the 
business in spite of some signifi cant 
headwinds . This would not have been 
possible without the hard work and 
dedication of all our staff  throughout 
our twelve offi  ces and I would like to 
thank them for making these results 
possible .
In the fi rst six months of the year, we 
continued to grow discretionary funds 
under management and our planned 
move away from advisory work in our 
International business . In the second 
half, investment markets remained 
challenging but organic growth of 
discretionary funds remained robust 
and we have made substantive 
progress in our distribution model .
We have continued with our IT system 
development, working with three 
external providers . This is always 
complex and the time scale for 
completion has now moved to mid 
2017 , but I am pleased to report that 
this still remains on budget . In 
addition, we have completed our 
‘brand refresh’ . As well as modernising 
the look and feel of our marketing 
collateral, this has fi rmly positioned 
the business as an Investment 
Management business, as this remains 
the key driver of our growth . In line 
with this strategy, we will be moving 
our funds and UK asset management 
business into one brand, Investment 
Management, in early 2017 (subject to 
regulatory approvals) . 
Business review
Our discretionary funds under 
management rose to over £8 .3bn, an 
increase of over £880m over the 
fi nancial year . This represents an 
increase of 12 .0%, of which 11 .7% was 
new business (£863m) and 0 .3% 
(£25m) investment growth . We 
concluded no acquisitions in the year 
and this growth was largely generated 
internally, predominantly via our 
work with professional introducers . 
We continue to work with an 
increasing number (now over 960) of 
high-quality professional 
intermediaries throughout the UK and 
overseas . Pleasingly, our work with 
this sector shone through in the 
Citywire Regional Stars awards, where 
professional advisers voted Brooks 
Macdonald their preferred 
discretionary fund manager in 5 of 6 
regions of the UK . We remain highly 
focussed on providing a high-quality 
service to this sector and thank them 
for their continued support . 
Our bespoke discretionary portfolio 
service (‘BPS’) remains the premium 
off ering for high-net-worth clients . 
This continues to gain traction with 
private clients, pension and trust 
funds . Pension funds (principally Self 
Invested Personal Pensions - ‘SIPPs’) 
and increasingly ISA portfolios remain 
a substantial opportunity . We remain 
confi dent that the need for an 
incentive to save remains and that 
tax-effi  cient wrappers will form a key 
component of any strategy in this 
We are well positioned strategically, have a strong 
balance sheet, are growing our brand, have high-quality 
staff  across the group, are working with an increasing 
number of professional intermediaries and are 
constantly developing our investment off ering.  04  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Chief Executive’s review
 continued
Business review continued
space . On and offshore we now 
manage over £6 . 4bn via our BPS 
service .
Our managed portfolio service (‘MPS’) 
is for smaller clients and can be 
accessed as a portfolio or via a unit 
managed around a series of risk based 
mandates . Our portfolio assets now 
exceed £617m and units £241m . We 
remain of the view that this will be a 
strong area of growth in the short, 
medium and long term .
In addition to risk-rated funds, we 
manage specialist funds which will 
also move under our new single brand 
later in the new financial year . Over the 
last year and into this financial year, we 
have streamlined our offering to 
ensure that we have funds that are of 
scale . Subject to market conditions, we 
will also look to launch further new 
products into the market place .
The full integration of our 
international business into the group 
continued . The teams based in the 
Channel Islands have worked hard to 
move the business from a blend of 
advisory and discretionary business 
towards acting fully as a discretionary 
manager . This process continues and 
while the financial results are 
disappointing, I am pleased with the 
progress made in expanding our 
distribution network outside the UK .
We have made a number of 
management changes in Braemar 
Estates, our specialist property 
manager . These started to contribute 
to growth in the second half . Assets 
under administration declined 
marginally over the year (-3 . 1%) .
Our financial planning business 
continued the trend of the prior year . 
Consulting work rose while employee 
benefits had a difficult year . Work 
generated into our Investment 
Management business remains robust 
and we will be looking to launch a 
pension default fund for our 
employee-benefit clients early this 
financial year .
Industry background
Regulatory changes continue apace, 
with a major focus on MiFID II . This 
has been postponed until January 
2018, but we are ensuring the 
business is well prepared for the 
substantial changes around 
transaction and client reporting . 
During the financial year, we have 
seen further consolidation in our 
sector . I believe that with the 
increasingly high costs of providing a 
quality investment service, back office 
administration and a robust 
governance structure, consolidation 
will continue . We remain firmly 
committed to remaining independent 
and will certainly look at acquisition 
opportunities when they arise .
Strategies for growth 
We continue to focus on our core 
strategies for growth: organic, service 
and performance development, as 
well as ongoing investment in the 
business, in particular on improving 
our technological delivery . This 
remains a constant .
Our main strategic focus remains 
working with quality professional 
advisers . There were 14,491 Adviser 
firms in the UK at the end of 2015 
(source: APFA) of whom around 2,500 
fall into our immediate target market . 
Currently we work with around 
one-third of this universe and are 
excited at the prospect of making 
further progress here .
Strategic Alliances form a major part 
of our strategy and I am pleased that 
the number of firms we have these 
relationships with has increased to 19 . 
As well as working with over 960 firms 
in the UK and overseas, we are looking 
to deepen our relationships with them 
and have launched a telephone 
support team to expand our offering 
to the wider community .
Our regional offices have been a major 
success for the business since our first 
office opened outside London in 2005 . 
This has allowed us to service clients 
and professional advisers from a 
regional office as well recruiting 
high-quality staff throughout the UK 
and Channel Islands . 
In addition to recruitment, we are 
always looking to enhance and 
expand our range of services . In this 
financial year, we will look to expand 
our charity proposition, a Tier 1 
service for overseas investors and 
launch a default fund as above .
With our recent brand refresh, we will 
also look to continue the development 
of our brand further . We are 
developing an exciting social media 
presence, have just renewed our 
sponsorship of Middlesex County 
Cricket Club and have won a number 
of investment and property awards 
over the last year . We also remain one 
of the very few firms with 5-star 
ratings from Defaqto for 2016 .
Summary and outlook
While it has been a challenging year, it 
has been highly productive . We are 
well positioned strategically, have a 
strong balance sheet, are growing our 
brand, have high-quality staff across 
the group, are working with an 
increasing number of professional 
intermediaries and are constantly 
developing our investment offering . 
We have made a good start to the new 
financial year and can look forward 
with confidence .
 
Chris Macdonald 
Chief Executive
20 September 2016
CHIEF EXECUTIVE’S REVIEW
C O NT I N U E D   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  05
Strategic report
  
The market and our services
We are an independent investment management firm providing a wide range of investment and wealth management 
services to private clients, pension funds, charities, professional intermediaries and trustees . Our successful business model 
works to provide bespoke investment solutions with high-quality professional staff delivering outstanding client service, 
investment excellence and value for money from each of our eight UK based offices and two offshore offices in Jersey and 
Guernsey . In addition we have a property management business based in Hale and an investment service business based in 
the City .
A summary of our services
Brooks Macdonald manages £8 . 301 billion for its clients as of 30 June 2016, making us one of the leading private client 
investment managers . We provide discretionary investment management solutions to private clients, families, charities and 
trustees . We also provide financial planning advice and employment benefits consultancy to small and medium sized 
enterprises . Through our funds we provide multi asset and specialist fund products to the retail sector and we have a 
property estate and building management service for private individuals, institutions and property fund managers . 
A breakdown of the split of the discretionary funds under management is shown in the graph below:
Investment Management (UK)
Investment Management (Channel Islands)
Funds
STRATEGIC REPORT
  06  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
The market and our services continued
STRATEGIC REPORT
C O NT I N U E D
One of the key performance indicators is the growth in the discretionary funds under management in total across all parts of 
the group which are reported on a quarterly basis throughout the year . The increase in the year is analysed in the table below . 
2016 
 £m
2015  
£m
Opening discretionary FUM 7,413 6,550
Net new discretionary business 863 645
Acquisitions – –
Investment growth 25 218
   
Total FUM growth 888 863
   
Closing FUM 8,301 7,413
   
Organic growth (net of markets) % 11.6 9 .8
Total growth % 12.0 13 .2
   
Group performance
The group’s overall performance for the year is detailed in table 1 below .
Table 1
2016  
£m 
(unless stated)  
2015  
£m  
(unle ss sta ted)  
Total revenue 81.4 77 .7
Operating costs (67 .8)    (65 . 4)  
Net financial income and gains 2.3 (0 . 9)  
Profit before tax 15.9 11 .4
Underlying profit before tax¹ 15.5 15 .1
Earnings per share 94.41p 68 .30p
Dividends per share² 35.0p 30 .5p
Underlying margin
3
19.1% 19 .4%
    
1 
 A reconciliation between underlying profit before tax and profit before tax is shown in table 2 .
2 
 The total interim dividend and the final dividend proposed for the financial year .
3 
 Underlying profit as a percentage of total revenue 
Total revenue
Total group revenue grew by 5% during the year compared to 12% in the previous year due mainly to a reduction in revenue 
in the Channel Islands where there was a fall in revenue of over 12% compared to an increase in 2015 of 14% . During the year 
we decided to more closely align the services in Jersey and Guernsey with the investment management service in the UK and 
reduced the number of advisory and execution only clients which had a significant impact on the transactional revenue 
generated in the year . A number of these clients have transferred their funds to a discretionary mandate which we expect will 
generate a longer term and more consistent revenue stream for the business . 
We saw revenue growth during the year of 8% in the investment management business and increased revenues for our funds 
business, financial planning and estates business over the year .
The market and our services   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  07
Strategic report
 continued
Group performance continued
Operating costs 
As in previous years, the major part of the operating costs for the group are in relation to our staff (57%; 2015: 59%) and during 
the year we saw a small increase in the average number of employees from 467 to 472 . Of the total staff costs 24% (2015: 24%) 
were variable costs . We have continued to invest in our IT systems across all parts of the group, to improve the services 
offered to our clients . In our investment management business we are working on a large IT project to provide a more fully 
integrated system which will cover both onshore and offshore clients . We have assembled an internal project team and are 
working with three external software providers . The project has already delivered an improved client portal and a new client 
relationship management system to work with our professional intermediaries . Once complete during the financial year 
2018 the system will provide increased capacity with reduced risk and will deliver operational efficiencies .
We continue to operate in an increasingly regulated environment and we have again strengthened our legal, risk and 
compliance departments by additional recruitment over the last financial year . In 2016 we have seen the levy paid to the 
Financial Services Compensation Scheme (‘FSCS’) stabilise at £0 .5m (2015: £0 .5m) .
Net financial income and gains
When the group makes an acquisition it typically structures the deal whereby there are deferred payments to the 
vendors over a number of years against pre-agreed funds under management targets . Where these targets change due 
to unpredictable variables such as new business, client retention and market movements then the value of the 
deferred consideration changes and these fair value adjustments are made through the Consolidated Statement of 
Comprehensive Income . 
During the year one of the original FUM targets for Levitas was not achieved, resulting in a reduction in the amount payable to 
the vendors of the business . Accordingly, as more fully explained in note 22 to the financial statements, there was a fair value 
reduction of £3 . 3m resulting in a gain to Consolidated Statement of Comprehensive Income . 
Included in total net financial income and gains for the year of £2 . 3m is this fair value reduction for Levitas, together with 
other financial income, costs and the group’s share of joint venture results as detailed on the Consolidated Statement of 
Comprehensive Income and the accompanying notes .
As disclosed more fully in note 16 to the consolidated financial statements, the group has an investment in a student 
accommodation fund . During the year the shareholders of the fund approved the sale of the underlying property assets, 
which resulted in an impairment charge of £0 . 3m (2015: £0 . 7m) . 
Underlying profit before tax 
Underlying profit before tax and underlying earnings per share are non GAAP alternative performance measures, considered 
by the board to be a better reflection of true business performance than looking at the group’s results on a statutory basis only . 
These measures are widely used by research analysts covering the company . Underlying results exclude expenditure falling 
into the categories explained below and a full reconciliation between underlying profit and the profit attributable to 
shareholders is provided in the following table .
Table 2: Reconciliation of underlying profit before tax to statutory profit before tax
2016  
£m
2015  
£m
Underlying profit before tax 15.5 15 .1
Amortisation of intangible assets (2.6)  (2 . 7)  
Finance cost of deferred consideration (0.6)  (0 . 8)  
Changes in fair value of deferred consideration 3.6 (0 . 1)  
Acquisition costs – (0 . 1)  
   
Profit before tax 15.9 11 .4
    08  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
Group performance continued
Amortisation of intangible assets (note 14)
As explained in notes 2(d) and 2(m), client relationship intangible assets are created in the course of acquiring funds under 
management . The amortisation charge associated with these assets and software represents a significant non-cash item and 
it has therefore been excluded from underlying profit, which represents largely cash-based earnings .
Finance cost and changes in fair value of deferred consideration
When the group makes acquisitions of both corporate entities and teams of fund managers in the course of acquiring funds 
under management the typical structure of the acquisition, in order to continue to incentivise and motivate the vendors, is to 
make deferred payments over a period of time based on the retention and growth in funds under management . The initial 
estimated fair value of the deferred payments will be based on future projections of funds under management and where the 
actual payment is different from the original estimates then charges or credits will be made in arriving at the profit before tax . 
The directors consider that the effect of these changes to the original projected payments can distort the results of a 
particular period and have therefore excluded them from underlying profit . 
Initial estimates of the deferred cash payments are recognised in the financial statements at their present value based on an 
inherent rate of implied interest . The difference between the discounted present value of deferred consideration and the 
estimated future cash payment is recognised as a charge over the duration of the deferral period in arriving at profit before 
tax . The directors consider that this charge, which is a non-cash item, can distort the results of a particular period and have 
therefore excluded the charge from underlying profit .
Acquisition costs
The acquisition costs in 2015 were incurred in relation to the purchase of Levitas Investment Management Services Limited . 
There were no acquisitions made during this financial year .
Cash resources and regulatory capital
The group is cash generative and, as detailed in the Consolidated Statement of Cash Flows on page 29, there was an increase 
in cash resources at the year end of £0 . 2m to £19 .5m (2015: £19 . 3m) . The group had no borrowings at 30 June 2016 (2015: 
£nil) .
As required under Financial Conduct Authority (FCA) rules and both Jersey and Guernsey Financial Services Commissions 
we perform a regular Internal Capital Adequacy Assessment Process (ICAAP) and Adjusted Net Liquid Asset (ANLA) 
calculation which includes performing a range of stress tests to determine the appropriate level of regulatory capital and 
liquidity that the group needs to hold . Surplus levels of capital are forecast taking into account investment requirements and 
proposed dividends to ensure that appropriate buffers are maintained . The group’s Pillar 3 disclosures are published 
annually on our website (www . brooksmacdonald . com) .
Segmental review
The group reports its results in four key operating segments: Investment management; Financial planning; Funds and 
property management; and International . 
Investment management 
The UK based investment management service continues to remain the core part of the group contributing 72% (2015: 70%) 
of the group turnover . Investment management principally provides discretionary investment management to private 
investors, pension funds, charities and trusts through BPS and MPS . Despite considerable changes within the industry and 
volatility within the financial markets we have continued to grow FUM as shown in the table on page 6 . 
Financial planning
The financial consulting business continues to deliver both fee based financial planning advice to high net-worth families, 
and employee benefit consultancy to small and medium sized employers throughout the UK . Numbers of clients increased 
over the course of the year and the division remains a major introducer of new investment management funds to the group . 
During the year there was further investment in systems and staff and, despite the uncertain economic climate, revenue 
increased to £4 . 3m (2015: £4 . 1m) resulting in a small loss for the year of £0 . 1m (2015: £0 . 1m) . 
Group performance   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  09
Strategic report
 continued
Group performance continued
Segmental review continued
Funds and property management
It has been another year of growth for the funds business across the range of funds it manages . Total FUM increased by 20% to 
£796m (2015: £663m) at 30 June 2016 . This growth was achieved both organically through the net new investment across 
the range of funds with particularly strong flows of new money into the multi asset funds .
The Ground Rents Income Fund performed well during the year with an increase in the net asset value . It was the intention to 
launch two further property related funds in the second half of the year but due to the result of the EU referendum these were 
postponed and will be reviewed again during the next financial year . 
During the year, as a result of slower than anticipated growth of the Liquid Property Fund, the business recognised an 
impairment charge against its investment in North Row Capital LLP (NRC), in which it has a 60% share, of £0 . 4m (2015: £nil) 
together with a share of the losses of NRC for the year of £0 . 1m (2015: £0 . 0m) .
The estates business had an improved year although the value of assets under management marginally declined to £1 . 10bn 
(2015: £1 . 14bn) . Following a strategic review of the business and some changes to the board, additional revenue streams were 
identified which saw an increase in turnover of 9% over the previous year despite the fall in the value of assets under 
management . As a result the estates business broke even for the year compared to a loss of £0 . 4m in 2015 . 
International
The business saw an increase of FUM during the year of 16% to £1 . 35bn (2015: £1 . 16bn) with new business from a number 
of sources and new jurisdictions including South Africa and the conversion of previously non-managed advisory and 
execution clients . 
As advised at the half year the planned conversion of advisory accounts to discretionary accounts saw a significant reduction 
in the transactional income of the business during the year with total revenues for the International business falling by 12% . 
Whilst the associated costs of the advisory clients have been reduced these have not matched the timing of the loss of 
revenue and together with increased legal fees in the year, particularly dealing with some legacy issues prior to the 
acquisition, the profit for the year has fallen to £0 .5m (2015: £1 . 3m) .
The growth in the FUM and the expanded sources of international introductions together with the further rationalisation of 
the core client proposition in line with that offered in the UK means that the board believes that the business will see an 
increase in profit in the next financial year .
The new Brooks Macdonald brand
As part of the plans for the continued growth of the group, working together with specialist consultants we reviewed and 
relaunched our brand in April 2016 . 
As part of the review we ascertained from both internal and external sources the key characteristics of the group and how we 
were identified principally by our clients, professional intermediaries and staff . 
We work extensively with professional intermediaries and so in reference to this the new brand was designed to unify all of 
the group services under a single Brooks Macdonald brand . This would be used both in the UK and internationally, and 
positions us as a investment manager of choice around our core offering .
The brand emphasises the ethos of the group – striking a balance between our professional and technical expertise and the 
way we support our clients and various partners . It encapsulates our core values of honesty, fairness and clarity . From a new 
logotype through to a new style and tone, the brand will implant these values within all of our literature and communications, 
on our new website and on our secure client portal . Through these channels, it will provide our clients, partners and staff with 
assurance of the quality of our business .
Group performance 10  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
The new Brooks Macdonald brand continued
Ultimately, the new brand will help us raise awareness within the increasingly competitive environment in which we operate . 
It will help us provide the best possible service to our clients, thereby maximising growth in our FUM and improving our 
profitability . It will also allow us to maintain the culture and ethos that has made us successful . 
Corporate governance
A review of the company’s corporate structure has been conducted and this will result in changes to our corporate structure 
which will take effect at the beginning of the next financial year . These changes are designed to improve the governance 
arrangements for our key operating businesses . Historically, each subsidiary has been run as an independent company; 
however, in future, key strategic decisions will be made on a group basis . Day-to-day management of underlying businesses 
will be undertaken by a management committee, which will report to the group executive committee . We believe this 
approach will permit more effective management of resources . 
As a result of our improved governance arrangements, our asset management and funds subsidiaries will be managed 
through one single management committee as an investment management business line . This will improve investment 
governance by ensuring our risk and investment management controls are applied uniformly across our various products 
and services .
Governance arrangements at the group level remain unchanged . The principal board committees are audit, remuneration 
and risk and compliance, each of which has specific terms of reference which are periodically reviewed by the board . These 
terms of reference are available on the group website .
Audit Committee
The key responsibilities of the Audit Committee are:
• to review the group’s accounting procedures and internal financial controls;
• to review the reporting of financial and other information to the shareholders of the company and to monitor the integrity of the 
financial statements;
• to review the effectiveness of the external audit process and the independence and objectivity of the external auditors; and
• to report to the board on how it has discharged its responsibilities .
The membership of the committee comprises three non-executive directors: Richard Price (Chairman), Christopher Knight 
and Colin Harris . The board is satisfied that all members of the committee have recent and relevant financial experience . In 
addition, committee meetings are normally attended by the Group Chief Executive Officer, the Finance Director and by 
representatives of the external auditors . The committee meets with representatives of the external auditors without 
management present at least once a year .
The committee met five times during the year with meetings structured around the financial calendar of the company .
Risk and Compliance Committee
The group’s risk-management framework is designed to ensure risks are identified, managed and reported effectively at 
every level . At an operational level, first-line systems and controls are employed to monitor compliance with internal policies 
and procedures . In the second line of defence, compliance monitoring carries out independent checks . Output from both is 
reported to the relevant management committee and relevant management information is reported to the business-level risk 
committee, the executive committee, and the Risk and Compliance Committee through the group’s escalation policy . The risk 
department works with each business unit to conduct a programme of risk and control assessments throughout the year and 
the output from these is also reported to the relevant management committee, the relevant risk committee, executive 
committee and the Risk and Compliance Committee as appropriate . Identified risks at each business unit are recorded in a 
risk register and reported up through the risk committee structure, ultimately to the group board Risk and Compliance 
Committee, where required in accordance with the group escalation policy .
The new Brooks Macdonald brand   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  11
Strategic report
 continued
Corporate governance continued
Risk and Compliance Committee continued
The membership of the Risk and Compliance Committee is made up of the group’s four non-executive directors and is chaired 
by the senior independent director, Colin Harris . Business managers and representatives from the legal, risk and compliance 
functions attend committee meetings as necessary to report on monitoring output, the results of risk and control assessments 
and changes to the risk register . The group board Risk and Compliance Committee is principally responsible for monitoring 
identified risks and the effectiveness of mitigating action, keeping risk assessment processes under review, assessing 
material breaches of risk limits and reviewing client complaints .
The Risk and Compliance Committee met on six occasions during the year ended 30 June 2016 .
The group’s risk mitigation framework is subject to on-going review .
The principal risks identified as having a potential material impact on the group are detailed below, together with the 
principal means of mitigation .
Financial risks
The group’s principal financial risks relate to credit risk, liquidity risk and market risk and the measures and policies for the 
management of those risks are set out in note 32 to the consolidated financial statements . Further details on capital 
management processes can be found in note 33 .
Non-financial risks
The significant non-financial risks faced by group have been reviewed by the committee, which believes they remain broadly 
the same as in previous years and are as follows:
Reputational  risk
Impact
The group has a growing reputation as a provider of high 
quality investment and wealth management services . There 
is a risk that significant damage to reputation could lead to 
the loss of existing clients as well as impacting on the ability 
to gain new clients, which would lead to a fall in financial 
income . Such risk could arise from events such as poor 
investment performance, poor client service or regulatory 
censure .
Mitigation 
This risk is minimised by ensuring the group maintains a 
culture of high ethical and professional standards whilst 
focussing on delivering a first class service to all of our 
clients . The group maintains separate, independent risk and 
compliance departments, which ensures conformity with 
the regulations of the Financial Conduct Authority, as well as 
relevant statutes, in all of our dealings with our clients .
Regulatory risk
Impact
The sector in which the group operates is heavily regulated 
and any breach of regulations could lead to fines or 
disciplinary action against the group or its staff .
Mitigation
The group monitors compliance with existing law and 
regulations and keeps abreast of future changes to assess the 
likely business impact and to ensure that the group has 
sufficient resources to implement any necessary changes .
People risk
Impact
Our business is dependent on client relationships with our 
staff . Operating in a competitive market there is a risk of loss 
of existing clients due to poor performance or service, a 
failure to respond to changes in the market place, or the loss 
of key investment professionals .
Mitigation
To minimise this risk, the group continues to invest in its 
employees and monitors developments in the marketplace 
in which it operates to ensure that the group continues to 
offer a wide range of services . Recruitment policies are 
designed to attract high quality staff and the group regularly 
reviews and validates its remuneration packages and 
contractual arrangements and motivation is measured 
through a sentiment index . Structured training is provided 
by the group’s learning & development team .
Corporate governance 12  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
Corporate governance continued
Risk and Compliance Committee continued
Non-financial risks continued
Information Communication Technology (‘ICT’) risk
Impact
A key part of the high quality service delivered to clients is 
facilitated by a flexible and robust internal ICT 
infrastructure . Ancillary areas of ICT risk include system 
development, ICT operations, ICT support and 
telecommunications .
Mitigation
New ICT projects are regularly reviewed and appraised at 
board meetings in order to ensure that the group continues 
to develop and maintain its ICT capabilities . Business 
continuity is assured through our network of offices and our 
remote working capabilities .
Outsourcing risk
Impact
Where key systems are provided by outsourced providers, 
there is a risk of failure of the outsourcing partners or 
external suppliers . There are further risks in the onboarding 
of outsourcing partners and ongoing support from them .
Mitigation
Due diligence takes place prior to the commencement of any 
outsourcing or supply, to maintain a robust procurement 
process and good contract governance . We keep our key 
outsourcing partners under review and have in place 
procedures to regularly assess the performance of such 
suppliers as well as identifying suitable and viable 
alternatives .
Operational risk
Impact
There is a risk that the group suffers a loss of business 
resulting from inadequate or failed internal processes, 
people and systems .
Mitigation
The group employs a comprehensive risk-management 
framework, which comprises ongoing monitoring and 
reporting of operational areas by first-line and second-line 
controls . The risk function works with businesses to conduct 
risk and control assessments, and external auditors provide 
further ad hoc checks .
Investment performance risk
Impact
There is a risk that portfolios will not meet their investment 
objectives which could result in the group suffering loss of 
business . There is a risk on the suitability of portfolios for 
clients and where the suitability responsibility lies between a 
professional introducing the client and the group company .
Mitigation
Portfolio performance, valuations and risk profiles are 
monitored by management, allowing issues to be identified 
and mitigated as they arise . The group has in place BITA 
Monitor portfolio risk oversight tools to assist with 
supervising portfolio management . The group keeps its 
client documentation under review and updates it regularly 
to ensure clients are properly informed about investment 
policy and risks .
Remuneration Committee
The Remuneration Committee comprises Diane Seymour-Williams (Chair), Christopher Knight and Colin Harris . The 
committee (in consultation with the Chief Executive) determines the specific remuneration packages for each executive 
director and certain senior executives including base salary, annual bonus, long-term incentives, benefits and terms of 
employment . The committee is also responsible for setting the broad parameters for the annual base salary review for all staff 
across the group and reviews all awards made under various long-term incentive schemes operated by the group . 
Remuneration policy
Brooks Macdonald recognises the importance of its employees to the success of the group and consequently the 
remuneration policy is designed to be market competitive in order to attract, retain and motivate high-calibre individuals . 
The committee has reviewed the numerous regulatory changes and guidelines to ensure that the remuneration policies 
across the business are in line with best practice . External third party data is used to validate rather than to benchmark the 
total reward .
Corporate governance   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  13
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
The remuneration policy, which applies to directors and employees of the group and was approved by shareholders at the 
AGM on 27 October 2015, is based on the following key principles: 
• designed to encourage the retention of staff through deferred variable compensation, where appropriate; 
• the need to provide a market competitive balanced package of benefits;
• inclusion of both annual and long term elements;
• fair for both the director and the company with some element of discretion;
• differentiation by merit and performance;
• an emphasis on variable, performance driven remuneration bonus payments funded from retained profits;
• compliant with financial services rules and regulations;
• alignment with shareholders’ interests with significant long term equity participation; and 
• clarity, transparency and fairness of process .
The current remuneration package for an executive director has four main elements: basic salary and benefits, profit related 
bonus, long-term equity based incentives and pension . The total reward is designed to include a balance of fixed and variable 
pay with an element of deferral .
The remuneration of directors in 2016 and 2015 is set out in the table below . Executive director remuneration includes legacy 
LTIP awards made in 2012 and 2011 that vested in the year .
Single total figure of remuneration for each director
Salary and fees
Taxable 
benefits Annual bonus
1
Long term 
incentive  
schemes
Pension 
related 
benefits Sharesave Total
£’000 2016 2015 2016 2015 2016 2015 2016
2
2015
3
2016 2015 2016 2015 2016 2015
Executives
C A J Macdonald 257 253 3 3 240 272 93 88 – – – – 593 616
N I Holmes 169 166 3 2 192 192 82 133 25 25 – – 471 518
S J Jackson 191 188 5 4 144 140 79 48 – – – – 419 380
A W Shepherd 200 188 3 2 176 176 79 132 – – – 2 458 500
R H Spencer 191 188 4 3 132 148 46 42 – – – 4 373 385
S P Wombwell 197 194 5 3 120 104 66 159 – – – – 388 460
                
1,205 1,177 23 17 1,004 1,032 445 602 25 25 – 6 2,702 2,859
Non-executives
C J Knight 
(Chairman) 92 86 – – – – – – – – – – 92 86
C R Harris (Senior 
  i n de p e n de n t 
director) 50 45 – – – – – – – – – – 50 45
D Seymour-
Williams 46 40 – – – – – – – – – – 46 40
R Price 46 37 – – – – – – – – – – 46 37
                
Total 1,439 1,385 23 17 1,004 1,032 445 602 25 25 – 6 2,936 3,067
                
Corporate governance 14  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Notes 
1 
 The annual bonus represents the cash amount receivable for the relevant financial year . An additional amount of 20% for each executive director is deferred and 
awarded by way of ordinary shares under the terms of the long term incentive scheme ( LTIS) as disclosed below in table 2 .
2 
 The amounts represent the value vested in the year from three year LTIS awards arising from the deferred element of the 2012 annual bonus together with any 
additional awards made on similar terms . The awards satisfied the performance conditions requiring an increase in the diluted earnings per share of the company of 
at least 2% per annum more than the increase in the RPI over the period of three financial years starting with the financial year in which the date of the grant falls and 
ending with the financial year in which the third anniversary of the date of the grant falls . The vesting date was 25 October 2015 and the market price on 23 October 
2015, the day nearest to the vesting date, was £17 .34 .
3 
 The amounts represent the value vested in the year from three year LTIS awards arising from the deferred element of the 2011 annual bonus together with any 
additional awards made on similar terms . The awards satisfied the performance conditions requiring an increase in the diluted earnings per share of the company of 
at least 2% per annum more than the increase in the RPI over the period of three financial years starting with the financial year in which the date of the grant falls and 
ending with the financial year in which the third anniversary of the date of the grant falls . The vesting date was 20 October 2014 and the market price on that date 
was £13 .42 .
Notes to the single total figure of remuneration for each director table
Basic salary
Basic salary is paid monthly in cash through payroll determined by the committee and any changes are implemented from 
1 July each year or when an individual changes position or responsibility . In deciding appropriate levels the committee 
considers salaries throughout the group and information on comparable companies of a similar size and complexity 
provided by advisers to the committee . The views of the Chief Executive are taken into consideration when setting the salary 
of other directors . The base salaries of executive directors were increased on 1 July 2015 by a total of 2 .5% compared to an 
overall average increase for all employees of 3 . 1% .
Non-executive directors’ fees
The non-executive directors’ fees were similarly reviewed and increased on average by 8 . 8% with the approval of the board to 
reflect their additional responsibilities and commitments as the group grows .
The Chairman’s fee was increased from £90,000 to £92,000 on 1 August 2015 and the basic non-executive director’s fee was 
increased from £40,000 to £42,000 on 1 August 2015 . Non-executive directors also receive an additional responsibility fee of 
£4,000 per annum in recognition of their chairing a committee or being the senior independent director .
Taxable benefits 
Benefits are provided to the directors to complement the remuneration package and may include, for example private 
medical insurance for directors and their dependants, death in service cover, critical illness and permanent health insurance, 
annual medicals, Save As You Earn scheme, and the provision of interest free season ticket loans .
Taxable benefits are the provision of private medical insurance for the executives and their dependants and the provision of 
interest free season ticket loans as disclosed in note 35 to the consolidated financial statements .
Annual bonus
Awards to executive directors and some other senior employees of the group of profit related bonuses are made from a pool 
of profits of 5-15% of the group pre-tax profit after the payment of all bonuses to all other staff . As disclosed in note 22 to the 
consolidated financial statements there was an increase in the group pre-tax profit during the year of £3 . 34m in respect of 
changes in the deferred consideration on the acquisition of Levitas and given the ‘one-off’ and exceptional nature of this item 
the committee excluded this amount in the consideration of the size of the bonus pool for this year . 
The committee determines the overall size of the pool based on the performance of the group against a number of key 
performance indicators including the growth in profits, the movement in funds under management, various internal client 
service metrics and the performance against budget of each of the operating divisions . 
The total payment to executive directors in respect of the year ended 30 June 2016, including the amounts deferred into 
shares, represents 8 . 8% (2015: 9 . 8%) of group pre-tax profit . The total bonus payment to all senior employees who participate 
in this scheme is 12 . 2% (2015: 12 . 8%) .
Corporate governance   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  15
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Notes to the single total figure of remuneration for each director table continued
Annual bonus continued
Awards to individual executive directors are determined by the committee following objectives and measures proposed 
by chief executive, taking into account a number of financial and non-financial factors . These are intended to give a broad 
assessment of the annual performance objectives of each director, including the results of the business, investment 
performance, net new business, management of risks facing the group and cost control within each individual’s area 
of responsibility . 
The Remuneration Committee has decided that 20% of the bonus awarded will be made in shares deferred for a period of 
three years under a Long Term Incentive Scheme (LTIS) . In addition, directors may choose to defer a further amount of any 
bonus awarded, up to a maximum of 20%, making 40% in total, into shares under the LTIS . 
Long Term Incentive Scheme (‘LTIS’) and Employee Benefit Trust (‘EBT’)
The group established an EBT on 3 December 2010 in order to acquire ordinary shares in the company in connection with the 
deferred share element of the profit related bonus under the LTIS as detailed above . The EBT is also used for other long-term 
awards to members of the board and senior employees of the group .
The Remuneration Committee has made additional awards under the LTIS to certain executive directors and senior 
employees . The additional awards are subject to the same performance and other conditions as those applying to the 
deferred profit related bonus share options . 
The LTIS awards reported are the historic awards vesting at the end of the three year cycle valued using the share price on the 
date of the vesting . In addition to the deferred element of the annual bonus described above the executive directors are 
awarded rights to acquire ordinary shares . The scheme has performance conditions attached to the deferred award, 
requiring a minimum growth in the diluted earnings per share of the group of 2% per annum above the increase in the Retail 
Price Index (RPI) over the three year period . 
In the case of a ‘bad’ leaver, all unvested awards will normally lapse . A ‘bad’ leaver is a director who leaves other than on 
retirement, redundancy, due to ill health or on the sale of the business unless the committee determines otherwise .
Pensions
Executive directors may participate in the pension arrangements of the group or receive cash in lieu of pension on the same 
basis as other employees . The group’s contributions are currently 15% of base salary .
Sharesave
This benefit is the value of the discount on the Sharesave options granted in the year .
Directors’ interests in shares
At 30 June 2016, directors’ shareholdings were as set out in table 1 .
Corporate governance 16  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Table 1: Directors’ shareholdings and interest in shares at 30 June 2016
Interest in shares
Number of shares or options
Beneficially 
owned  
shares LTIS
1
Sharesave
EMI  
schemes CSOP Total
Executives
C A J Macdonald 230,764 16,964 649 – – 17,613
N I Holmes 55,995 16,737 1,298 6,000
2  
2,067 26,102
S J Jackson 30,534 14,474 1,298 – 2,067 17,839
A W Shepherd 50,153 18,192 727 – 2,067 20,986
R H Spencer 229,848 9,349 1,455 – 1,959
3  
12,763
S P Wombwell 54,189 13,376 1,298 – 2,067 16,741
        
Non-executives
C J Knight (Chairman) 71,585 – – – – –
C R Harris (Senior independent director) 6,086 – – – – –
D Seymour-Williams 5,000 – – – – –
R Price (appointed 1 August 2014) – – – – – –
        
Total 734,154 89,092 6,725 6,000 10,227 112,044
        
Notes
1 
 In the year ended 30 June 2016 further awards were made to the executive directors under the LTIS scheme together with the deferred element of the annual bonus 
award . The £ value of the awards are shown below in table 2 and the actual number of shares awarded will be determined based on the share price at the grant date in 
October 2016 . 
2 
 On 27 April 2016 Nicholas Holmes exercised his options over 4,500 ordinary shares of 1p each under the terms of the EMI scheme award dated 17 October 2006 at 
an option price of £2 .15 per share . The closing market price for the shares on 27 April 2016 was £17 .55 .
3 
 On 29 October 2015 Richard Spencer was granted an option over 872 ordinary shares of 1p each under the terms of the CSOP scheme at an option price of £17 .19 per 
share in respect of an award of £15,000 made in the year ended 30 June 2015 .
Table 2: Monetary value of awards made under LTIS 
Deferred 
bonus 
£’000
Additional 
awards 
£’000
Total 
£’000
Executives
C A J Macdonald 60 – 60
N I Holmes 48 40 88
S J Jackson 36 20 56
A W Shepherd 44 40 84
R H Spencer 33 – 33
S P Wombwell 30 20 50
    
Total 251 120 371
    
Corporate governance   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  17
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Directors’ interests in shares continued
Table 3: LTIS
Number of options
Plan  
cycle
Performance 
period end 
date
Vesting  
date
At 
1 July  
2015
Granted  
in the  
year
Exercised  
in the  
year
At 
30 June  
2016
C A J Macdonald 2010-13 30 .06 .2013 27 .10 .2013 4,112 – – 4,112
 2012-15 30 .06 .2015 25 .10 .2015 5,354 – (5,354)  –
 2013-16 30 .06 .2016 01 .11 .2016 4,372 – – 4,372
 2014-17 30 .06 .2017 14 .10 .2017 4,533 – – 4,533
2015-18 30 .06 .2018 29 .10 .2018 – 3,947 – 3,947
         
N I Holmes 2012-15 30 .06 .2015 25 .10 .2015 4,724 – – 4,724
 2013-16 30 .06 .2016 01 .11 .2016 2,528 – – 2,528
 2014-17 30 .06 .2017 14 .10 .2017 4,958 – – 4,958
2015-18 30 .06 .2018 29 .10 .2018 – 4,527 – 4,527
         
S J Jackson 2012-15 30 .06 .2015 25 .10 .2015 4,567 – – 4,567
 2013-16 30 .06 .2016 01 .11 .2016 2,528 – – 2,528
 2014-17 30 .06 .2017 14 .10 .2017 3,896 – – 3,896
2015-18 30 .06 .2018 29 .10 .2018 – 3,483 – 3,483
         
A W Shepherd 2012-15 30 .06 .2015 25 .10 .2015 4,567 – – 4,567
 2013-16 30 .06 .2016 01 .11 .2016 3,791 – – 3,791
 2014-17 30 .06 .2017 14 .10 .2017 4,958 – – 4,958
2015-18 30 .06 .2018 29 .10 .2018 – 4,876 – 4,876
         
R H Spencer 2011-14 30 .06 .2014 20 .10 .2014 3,105 – (3,105)  –
 2012-15 30 .06 .2015 25 .10 .2015 2,677 – – 2,677
 2013-16 30 .06 .2016 01 .11 .2016 2,186 – – 2,186
 2014-17 30 .06 .2017 14 .10 .2017 2,338 – – 2,338
2015-18 30 .06 .2018 29 .10 .2018 – 2,148 – 2,148
         
S P Wombwell 2012-15 30 .06 .2015 25 .10 .2015 3,780 – – 3,780
 2013-16 30 .06 .2016 01 .11 .2016 2,528 – – 2,528
 2014-17 30 .06 .2017 14 .10 .2017 4,108 – – 4,108
2015-18 30 .06 .2018 29 .10 .2018 – 2,960 – 2,960
         
Total 75,610 21,941 (8,459)  89,092
         
Corporate governance 18  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Directors’ interests in shares continued
Table 4: Sharesave
Number of options
Plan  
cycle Grant date
Market  
value of 
shares at  
grant date 
(£)
Vesting 
 date
At 
1 July  
2015
Granted  
in the  
year
Exercised 
in the  
year
At
30 June 
2016
C A J Macdonald 2014-17 21 .05 .14 17 .32 01 .06 .17 649 – – 649
         
N I Holmes 2014-17 21 .05 .14 17 .32 01 .06 .17 1,298 – – 1,298
         
S J Jackson 2014-17 21 .05 .14 17 .32 01 .06 .17 1,298 – – 1,298
           
A W Shepherd 2013-16 14 .05 .13 14 .65 01 .06 .16 767 – (767)
1  
–
2015-18 22 .05 .15 15 .46 01 .06 .18 727 – – 727
         
R H Spencer 2015-18 22 .05 .15 15 .46 01 .06 .18 1,455 – – 1,455
         
S P Wombwell 2014-17 21 .05 .14 17 .32 01 .06 .17 1,298 – – 1,298
         
Total 7,492 – (767)  6,725
         
Note
1 
 On 15 June 2016 Andrew Shepherd exercised options over 767 ordinary shares of 1p each under the terms of the Sharesave scheme granted on 14 May 2013 . The 
exercise price was £11 .72 and the market price of the shares on exercise was £16 .76 .
Table 5: CSOP
Number of options
Plan 
 cycle Grant date
Market  
value of 
shares at  
grant date 
(£)
Vesting  
date
At 
1 July  
2015
Granted  
in the  
year
Exercised
in the  
year
At
30 June 
2016
N I Holmes 2013-16 21 .11 .13 14 .52 21 .11 .16 2,067 – – 2,067
         
S J Jackson 2013-16 21 .11 .13 14 .52 21 .11 .16 2,067 – – 2,067
         
A W Shepherd 2013-16 21 .11 .13 14 .52 21 .11 .16 2,067 – – 2,067
         
R H Spencer 2013-16 21 .11 .13 14 .52 21 .11 .16 1,087 – – 1,087
2015-18 29 .10 .15 17 .19 29 .10 .18 – 872 – 872
         
S P Wombwell 2013-16 21 .11 .13 14 .52 21 .11 .16 2,067 – – 2,067
         
Total 9,355 872 – 10,227
          
Sharesave Scheme
All directors are entitled to take part in the HMRC approved Brooks Macdonald Group Sharesave Scheme on the same terms 
as all other employees . Annual invitations to participate in the scheme, which commences each year on 1 June, are sent to 
directors and option grants are made at 80% of the closing mid market price on the day of the offer . 
Enterprise Management Incentive Scheme (‘EMI’) 
The Brooks Macdonald Group Enterprise Management Incentive Scheme (EMI) was adopted by the shareholders of the 
Company on 11 February 2005 . 
Options granted can be exercised if there has been an increase in the diluted earnings per share of the Company of at least 2% 
per annum more than the increase in the RPI over the period of three financial years starting with the financial year in which 
the date of grant falls and ending with the financial year in which the third anniversary of the date of grant falls .
Corporate governance Corporate governance   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  19
Strategic report
 continued
Corporate governance continued
Remuneration Committee continued
Enterprise Management Incentive Scheme (‘EMI’) continued
Options may not normally be exercised before the third anniversary of the date of the grant and expire on the tenth 
anniversary of the grant . Due to the increase in the size of the Company it is no longer eligible under HMRC rules to grant 
options under this EMI scheme and the last options were awarded to directors under this scheme on 17 October 2007 .
Company Share Option Plan (‘CSOP’)
Following discussions regarding remuneration structures and incentives schemes for senior employees and directors the 
Company decided to set up a CSOP which was approved by shareholders at the annual general meeting on 17 October 2013 
and by HMRC on 21 November 2013 .
The scheme is a discretionary scheme whereby employees or directors are granted an option to purchase the Company’s 
shares in the future at a price set on the date of the grant . The maximum award under the terms of the scheme for an 
individual at any one time is a total market value of £30,000 . There are performance conditions attaching to the scheme 
similar to those in place for the EMI Scheme above whereby there must be an increase in the diluted earnings per share of the 
Company of 2% more than the increase in the RPI over the three years starting with the financial year in which the option is 
granted .
Dilution
Not more than 15% of the issued ordinary share capital of the Company (adjusted for bonus and rights issues) will be issued 
for all EMI and share incentive schemes operated by the Company in any ten year rolling period . The Company satisfies the 
various equity-based schemes it operates using a combination of market purchased, newly issued and treasury shares .
Service contracts for executive directors
The Company has service contracts with its executive directors with a notice period of 12 months and it is company policy 
that such contracts should not normally contain periods of more than 12 months .
External appointments
Executive directors are encouraged to take on external appointments as non-executive directors but are discouraged from 
taking more than one other position given the time commitment . Prior approval of any new appointment is required by the 
Board with any fees in excess of £15,000 per annum paid to the Company .
Non-executive directors
Non-executive directors do not have contracts of employment but as with other directors are now required to stand for 
re-election . The executive directors are responsible for determining the fees of the non-executive directors who do not 
receive pension or other benefits from the group and do not participate in any group incentive schemes .
Corporate governance 20  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Report of the directors
  
REPORT OF THE DIRECTORS
 
Directors and their interests
The directors of the company, who were in office during the year and up to the 
date of signing the financial statements, are listed below together with their 
beneficial interests in the share capital of the Company .
At 30 June 
2016 
 Number  
of shares 
At 30 June 
2015 
 Number  
of shares 
Chairman
C J Knight 71,585 71,585
   
Executives
C A J Macdonald 230,764 835,410
N I Holmes 55,995 54,895
S J Jackson 30,534 79,534
A W Shepherd 50,153 47,915
R H Spencer 229,848 776,743
S P Wombwell 54,189 89,189
   
Non-executives
C R Harris 6,086 6,086
R Price – –
D Seymour-Williams 5,000 5,000
   
Details of share options held by the directors at the beginning and the end of the year can be found within the 
Remuneration Committee report on pages 12 to 19 .
The directors present herewith their 
annual report, together with the 
audited financial statements of the 
group for the year ended 30 June 
2016 .
Results and dividends
The profit before taxation for the year 
ended 30 June 2016 was £15,856,000 
(2015: £11,420,000) and the profit after 
taxation was £12,739,000 (2015: 
£9,151,000) .
The Company paid an interim 
dividend during the year of 12 . 0p 
(2015: 10 . 0p) per share . The directors 
recommend a final dividend of 23 . 0p 
(2015: 20 .5p) per share . This results in 
total dividends for the year of 35 . 0p 
(2015: 30 .5p) per ordinary share . These 
dividends amount to a total distribution 
to shareholders of £4,715,000 (2015: 
£4,095,000) in the year .
Retirement and  
re-appointment of directors
Christopher Knight, Chris Macdonald 
and Colin Harris will retire by rotation 
at the annual general meeting and are 
eligible to nominate themselves for 
re-election .
Directors’ indemnities 
The Company has made qualifying 
third party indemnity provisions for 
the benefit of its directors and these 
remain in force at the date of the 
report .
Employment policies 
Employees are encouraged to identify 
and become involved with the 
financial performance of the group 
and are rewarded by involvement in 
profit sharing arrangements . 
Employees also have the opportunity 
to participate in the group’s share 
incentive plans .
The group considers that 
communication with our employees 
is very important and indeed vital for 
the success of the group . Employees 
are informed of important issues by 
electronic mail and seminars .
The group considers that regular 
training is extremely important . This 
is achieved by the provision of 
in-house and external training 
courses and the training team provide 
a number of continuing professional 
development activities . All staff are 
encouraged to report their specific 
training needs to their line managers, 
which are then co-ordinated through 
the central Learning and 
Development department .
The group operates a graduate 
training scheme in respect of its 
trainee investment fund managers 
and financial planning consultants .
The group is an equal opportunities 
employer . All job applicants and 
employees are treated fairly and on 
merit, regardless of their race, gender, 
marital status, age, disability, religious 
belief or sexual orientation . 
Applications from disabled persons 
are always considered and where 
employees become disabled efforts 
are made to continue their 
employment within the group by 
providing training and the supply of 
equipment if necessary so that they 
are able to continue their role . 
All staff have the option to take an 
interest free annual season ticket loan . 
To retain the group’s employees and 
to improve staff morale, the group 
recognises the need for employees to 
have an appropriate work-life balance . 
Long serving employees are entitled 
to additional annual leave dependent 
on their length of service .
Under the terms of the Pensions Act 
2008, on commencing employment 
all eligible employees are 
‘auto-enrolled’ into the group 
pension scheme .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  21
Report of the directors
 continued
Events since the end of the year
Details of events after the reporting 
date are set out in note 37 to the 
consolidated financial statements .
Independent auditors
The Audit Committee has 
recommended to the Board of 
Directors that the incumbent auditor, 
PricewaterhouseCoopers LLP, be 
reappointed . 
PricewaterhouseCoopers LLP have 
expressed their willingness to 
continue in office as auditor and a 
resolution to reappoint them as 
auditor will be proposed at the 
forthcoming annual general meeting .
Each of the directors in office at the 
date of signing this report confirms 
that, so far as they are aware, there is 
no relevant audit information of 
which the Company’s auditor is 
unaware . Each director has taken all 
reasonable steps that he or she ought 
to have taken as a director in order to 
make him or herself aware of any 
relevant audit information and to 
establish that the Company’s auditor 
is aware of that information .
Annual general meeting
The 2016 annual general meeting will 
be held on 25 October 2016 at 
72 Welbeck Street, London, W1G 0AY . 
The notice of the meeting together 
with details of the resolutions 
proposed and explanatory notes have 
been distributed separately to 
shareholders and can also be found on 
the group’s website .
On behalf of the Board of Directors,
S J Jackson 
Finance Director
20 September 2016
REPORT OF THE DIRECTORS
C O NT I N U E D
Substantial shareholdings 
As at 6 September 2016, the Company had received notification of substantial 
interests in its shares of 3% or more as follows:
Substantial shareholdings
Number of 
shares
Percentage 
holding
Liontrust Asset Management 2,676,393 19 .52
   
Octopus Investments 1,273,912 9 .29
   
Hargreave Hale 1,195,178 8 .72
   
Standard Life Investments 852,826 6 .22
   
Artemis Fund Managers 831,851 6 .07
   
J M Gumpel 661,265 4 .82
   
Invesco Asset Management 512,776 3 .74
    22  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Statement of directors’ responsibilities
  
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
 
The directors are responsible for 
preparing the Annual Report, the 
Directors’ Remuneration Report and 
the financial statements in accordance 
with applicable law and regulations .
Company law requires the directors to 
prepare financial statements for each 
financial year . Under that law the 
directors have prepared the group and 
parent company financial statements 
in accordance with International 
Financial Reporting Standards (IFRSs) 
as adopted by the European Union . 
Under company law the directors 
must not approve the financial 
statements unless they are satisfied 
that they give a true and fair view of 
the state of affairs of the group and the 
company and of the profit or loss of 
the company and group for that 
period . In preparing these financial 
statements, the directors are 
required to:
• select suitable accounting policies 
and then apply them consistently;
• make judgements and accounting 
estimates that are reasonable and 
prudent;
• state whether applicable IFRSs as 
adopted by the European Union and 
IFRSs issued by IASB have been 
followed, subject to any material 
departures disclosed and explained 
in the financial statements; and
• prepare the financial statements on 
the going concern basis unless it is 
inappropriate to presume that the 
company will continue in business .
The directors are responsible for 
keeping adequate accounting records 
that are sufficient to show and explain 
the company’s transactions and 
disclose with reasonable accuracy at 
any time the financial position of the 
company and the group and enable 
them to ensure that the financial 
statements and the Directors’ 
Remuneration Report comply with 
the Companies Act 2006 and, as 
regards the group financial 
statements, Article 4 of the IAS 
Regulation . They are also responsible 
for safeguarding the assets of the 
company and the group and hence for 
taking reasonable steps for the 
prevention and detection of fraud and 
other irregularities .
The directors are responsible for the 
maintenance and integrity of the 
company’s website . Legislation in the 
United Kingdom governing the 
preparation and dissemination of 
financial statements may differ from 
legislation in other jurisdictions .
The directors consider that the 
Annual Report and Accounts, taken as 
a whole, is fair, balanced and 
understandable and provides the 
information necessary for 
shareholders to assess a company’s 
performance, business model and 
strategy . 
Each of the directors, whose names 
and functions are listed in the Report 
of the directors confirm that, to the 
best of their knowledge:
• the group financial statements, 
which have been prepared in 
accordance with IFRSs as adopted 
by the EU, give a true and fair view of 
the assets, liabilities, financial 
position and profit of the group; and
• the Strategic report and the Report 
of the directors include a fair review 
of the development and 
performance of the business and the 
position of the group, together with a 
description of the principal risks and 
uncertainties that it faces .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  23
Statement of directors’ responsibilities
  
Consolidated financial statements
Independent auditors’ report to the  
members of Brooks Macdonald Group plc  . . . . . . . 24-25
Consolidated statement of  
comprehensive income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Consolidated statement of financial position  . . . . 27
Consolidated statement of changes in equity  . . . 28
Consolidated statement of cash flows  . . . . . . . . . . . . . 29
Notes to the consolidated financial statements  . 30-64
Company financial statements
Independent auditors’ report to the  
members of Brooks Macdonald Group plc  . . . . . . . 65-66
Company statement of financial position  . . . . . . . . 67
Company statement of changes in equity  . . . . . . . . 68
Company statement of cash flows  . . . . . . . . . . . . . . . . . 69
Notes to the company financial statements  . . . . . . 70-79
Directors and advisers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IBC
Financial statements 24  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Independent auditors’ report
to the members of Brooks Macdonald Group plc 
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BROOKS MACDONALD GROUP PLC
 
Report on the group  
financial statements
Our opinion
In our opinion, Brooks Macdonald 
Group plc’s group financial statements 
(the ‘financial statements’):
• give a true and fair view of the state 
of the group’s affairs as at 30 June 
2016 and of its profit and cash flows 
for the year then ended;
• have been properly prepared in 
accordance with International 
Financial Reporting Standards 
(‘IFRSs’) as adopted by the European 
Union; and
• have been prepared in accordance 
with the requirements of the 
Companies Act 2006 .
What we have audited
The financial statements, included 
within the Annual Report & Accounts 
(the ‘Annual Report’), comprise:
• the Consolidated Statement of 
Financial Position as at 30 June 201 6;
• the Consolidated Statement of 
Comprehensive Income for the year 
then ended;
• the Consolidated Statement of Cash 
Flows for the year then ended;
• the Consolidated Statement of 
Changes in Equity for the year then 
ended; and
• the notes to the financial statements, 
which include a summary of 
significant accounting policies and 
other explanatory information .
The financial reporting framework 
that has been applied in the 
preparation of the financial 
statements is IFRSs as adopted by the 
European Union, and applicable law .
In applying the financial reporting 
framework, the directors have made a 
number of subjective judgements, for 
example in respect of significant 
accounting estimates . In making 
such estimates, they have made 
assumptions and considered 
future events .
Opinion on other matter 
prescribed by the Companies 
Act 2006
In our opinion, the information given 
in the Strategic Report and the Report 
of the Directors for the financial year 
for which the financial statements are 
prepared is consistent with the 
financial statements .
Other matters on which we are 
required to report by exception
Adequacy of information and 
explanations received
Under the Companies Act 2006 we are 
required to report to you if, in our 
opinion, we have not received all the 
information and explanations we 
require for our audit . We have no 
exceptions to report arising from this 
responsibility . 
Directors’ remuneration
Under the Companies Act 2006 we are 
required to report to you if, in our 
opinion, certain disclosures of 
directors’ remuneration specified by 
law are not made . We have no 
exceptions to report arising from this 
responsibility . 
Responsibilities for the 
financial statements and 
the audit
Our responsibilities and those of 
the directors
As explained more fully in the 
Statement of Directors’ 
Responsibilities set out on page 22, 
the directors are responsible for the 
preparation of the financial 
statements and for being satisfied 
that they give a true and fair view .
Our responsibility is to audit and 
express an opinion on the financial 
statements in accordance with 
applicable law and International 
Standards on Auditing (UK and 
Ireland) (‘ISAs (UK & Ireland)’) . Those 
standards require us to comply with 
the Auditing Practices Board’s Ethical 
Standards for Auditors .
This report, including the opinions, 
has been prepared for and only for the 
parent company’s members as a body 
in accordance with Chapter 3 of Part 
16 of the Companies Act 2006 and for 
no other purpose . We do not, in giving 
these opinions, accept or assume 
responsibility for any other purpose 
or to any other person to whom this 
report is shown or into whose hands it 
may come save where expressly 
agreed by our prior consent in writing .
What an audit of financial statements 
involves
We conducted our audit in 
accordance with ISAs (UK & Ireland) . 
An audit involves obtaining evidence 
about the amounts and disclosures in 
the financial statements sufficient to 
give reasonable assurance that the    Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  25
Independent auditors’ report
to the members of Brooks Macdonald Group plc | continued
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BROOKS MACDONALD GROUP PLC | 
C O NT I N U E D
financial statements are free from 
material misstatement, whether 
caused by fraud or error . This includes 
an assessment of: 
• whether the accounting policies are 
appropriate to the group’s 
circumstances and have been 
consistently applied and adequately 
disclosed; 
• the reasonableness of significant 
accounting estimates made by the 
directors; and 
• the overall presentation of the 
financial statements . 
We primarily focus our work in these 
areas by assessing the directors’ 
judgements against available 
evidence, forming our own 
judgements, and evaluating the 
disclosures in the financial 
statements .
We test and examine information, 
using sampling and other auditing 
techniques, to the extent we consider 
necessary to provide a reasonable 
basis for us to draw conclusions . We 
obtain audit evidence through testing 
the effectiveness of controls, 
substantive procedures or a 
combination of both .
Responsibilities for the 
financial statements and  
the audit continued
What an audit of financial statements 
involves continued
In addition, we read all the financial 
and non-financial information in the 
Annual Report to identify material 
inconsistencies with the audited 
financial statements and to identify 
any information that is apparently 
materially incorrect based on, or 
materially inconsistent with, the 
knowledge acquired by us in the 
course of performing the audit . If we 
become aware of any apparent 
material misstatements or 
inconsistencies we consider the 
implications for our report .
Other matter
We have reported separately on the 
parent company financial statements 
of Brooks Macdonald Group plc for the 
year ended 30 June 2016 .
Natasha McMillan (Senior Statutory 
Auditor) for and on behalf of 
PricewaterhouseCoopers LLP 
Chartered Accountants and  
Statutory Auditors
London 
20 September 2016 26  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Consolidated statement of comprehensive income
for the year ended 30 June 2016 
Note
2016  
£’000
2015  
£’000
Revenue 4 81,399 77,686
Administrative costs (67 ,794)  (65,371)  
Realised gain on investment 5 20 540
Other gains and losses 6 2,857 (754)  
      
Operating profit 7 16,482 12,101
Finance income 9 58 86
Finance costs 9 (577)  (763)  
Share of results of joint venture 17 (107)  (4)  
      
Profit before tax 15,856 11,420
Taxation 10 (3,117)  (2,269)  
      
Profit for the year attributable to equity holders of the Company 12,739 9,151
      
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Revaluation of available for sale financial assets 16 (6)  –
Revaluation reserve recycled to profit or loss 16 – 68
       
Total comprehensive income for the year 12,733 9,219
      
Earnings per share
Basic 11 94.41p 68 .30p
Diluted 11 94.07p 68 .14p
      
The accompanying notes on pages 30 to 64 form an integral part of the consolidated financial statements .
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
    Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  27
Consolidated statement of financial position
as at 30 June 2016 
Note
2016  
£’000
2015  
£’000
Assets
Non-current assets
Intangible assets 14 65,849 65,258
Property, plant and equipment 15 3,309 3,539
Available for sale financial assets 16 1,715 1,532
Investment in joint venture 17 207 628
Trade and other receivables 19 150 –
Deferred tax assets 18 551 709
      
Total non-current assets 71,781 71,666
      
Current assets
Trade and other receivables 19 23,958 21,402
Financial assets at fair value through profit or loss 20 1,000 3
Cash and cash equivalents 21 19,478 19,274
      
Total current assets 44,436 40,679
      
Total assets 116,217 112,345
      
Liabilities
Non-current liabilities
Deferred consideration 22 (5,290)  (9,442)  
Deferred tax liabilities 18 (3,951)  (4,694)  
Other non-current liabilities 23 (114)  (95)  
      
Total non-current liabilities (9,355)  (14,231)  
      
Current liabilities
Trade and other payables 24 (18,844)  (16,894)  
Current tax liabilities (2,142)  (1,463)  
Deferred tax liabilities 18 (84)  (119)  
Provisions 25 (2,784)  (5,474)  
      
Total current liabilities (23,854)  (23,950)  
      
Net assets 83,008 74,164
      
Equity
Share capital 27 137 136
Share premium account 27 35,997 35,600
Other reserves 28 5,517 5,101
Retained earnings 28 41,357 33,327
      
Total equity 83,008 74,164
      
The consolidated financial statements on pages 26 to 64 were approved by the Board of Directors and authorised for issue on 
20 September 2016, signed on their behalf by:
C A J Macdonald S J Jackson 
Chief Executive Finance Director
Company registration number: 4402058
The accompanying notes on pages 30 to 64 form an integral part of the consolidated financial statements .
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016 28  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Consolidated statement of changes in equity
for the year ended 30 June 2016 
Share capital 
£’000
Share 
premium
account  
£’000
Other 
reserves 
£’000
Retained 
earnings  
£’000
Total  
£’000
Balance at 1 July 2014 135 35,147 4,720 27,456 67,458
       
Comprehensive income
Profit for the year – – – 9,151 9,151
Other comprehensive income:
Revaluation reserve recycled – – 68 – 68
       
Total comprehensive income – – 68 9,151 9,219
       
Transactions with owners
Issue of ordinary shares 1 453 – – 454
Share-based payments – – 1,315 – 1,315
Share-based payments transfer – – (1,334)  1,334 –
Purchase of own shares by employee benefit trust – – – (742)  (742)  
Tax on share options – – 332 – 332
Dividends paid (note 12) – – – (3,872)  (3,872)  
       
Total transactions with owners 1 453 313 (3,280)  (2,513)  
       
Balance at 30 June 2015 136 35,600 5,101 33,327 74,164
       
Comprehensive income
Profit for the year – – – 12,739 12,739
Other comprehensive income:
Revaluation of available for sale financial asset – – (6)  – (6)  
       
Total comprehensive income – – (6)  12,739 12,733
       
Transactions with owners
Issue of ordinary shares 1 397 – – 398
Share-based payments – – 943 – 943
Share-based payments transfer – – (806)  806 –
Purchase of own shares by employee benefit trust – – – (1,143)  (1,143)  
Tax on share options – – 285 – 285
Dividends paid (note 12) – – – (4,372)  (4,372)  
       
Total transactions with owners 1 397 422 (4,709)  (3,889)  
       
Balance at 30 June 2016 137 35,997 5,517 41,357 83,008
       
The accompanying notes on pages 30 to 64 form an integral part of the consolidated financial statements .
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  29
Consolidated statement of cash flows
for the year ended 30 June 2016 
Note
2016  
£’000
2015  
£’000
Cash flow from operating activities
Cash generated from operations 26 17,536 20,094
Taxation paid (2,773)  (1,757)  
       
Net cash generated from operating activities 14,763 18,337
      
Cash flows from investing activities
Purchase of property, plant and equipment 15 (751)  (1,558)  
Purchase of intangible assets 14 (3,265)  (1,879)  
Purchase of available for sale financial assets 16 (500)  (250)  
Acquisition of subsidiary companies, net of cash acquired 13 – 37
Deferred consideration paid 22 (3,901)  (9,218)  
Interest received 9 58 86
Purchase of financial assets at fair value through profit or loss 20 (1,000)  (40)  
Proceeds of sale of property, plant and equipment 3 –
Proceeds of sale of financial assets at fair value through profit or loss 20 – 263
Investment in joint venture 17 (86)  (400)  
      
Net cash used in investing activities (9,442)  (12,959)  
      
Cash flows from financing activities
Proceeds of issue of shares 398 454
Purchase of own shares by employee benefit trust 28 (1,143)  (742)  
Dividends paid to shareholders 12 (4,372)  (3,872)  
      
Net cash used in financing activities (5,117)  (4,160)  
      
Net increase in cash and cash equivalents 204 1,218
Cash and cash equivalents at beginning of year 19,274 18,056
          
Cash and cash equivalents at end of year 21 19,478 19,274
       
The accompanying notes on pages 30 to 64 form an integral part of the consolidated financial statements .
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016 30  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1. General information
Brooks Macdonald Group plc (‘the Company’) is the parent company of a group of companies (‘the group’), which offers a 
range of investment management services and related professional advice to private high net worth individuals, charities 
and trusts . The group also provides financial planning as well as offshore fund management and administration services and 
acts as fund manager to regulated OEICs, providing specialist funds in the property and structured return sectors and 
managing property assets on behalf of these funds and other clients .
The Company is a public limited company, incorporated and domiciled in the United Kingdom under the Companies Act 
2006 and listed on AIM . The address of its registered office is 72 Welbeck Street, London, W1G 0AY .
2. Principal accounting policies
The general accounting policies applied in the preparation of these financial statements are set out below . These policies have 
been applied consistently to all years presented, unless otherwise stated .
a) Basis of preparation
The group’s consolidated financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations, as adopted by the European Union and the 
Companies Act 2006 applicable to companies reporting under IFRS . The financial statements have been prepared on the 
historical cost basis, except for the revaluation of available for sale financial assets such that they are measured at their 
fair value .
At the time of approving the financial statements, the directors have a reasonable expectation that the Company and the 
group have adequate resources to continue in operational existence for the foreseeable future . Accordingly, they continue to 
adopt the going concern basis in preparing the financial statements .
b) Basis of consolidation
The group’s financial statements are a consolidation of the financial statements of the Company and its subsidiaries . The 
underlying financial statements of the subsidiaries are prepared for the same reporting year as the Company, using consistent 
accounting policies . Subsidiaries and structured entities are all entities controlled by the Company, deemed to exist where 
the Company 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 . The financial statements of the subsidiaries are included from the date on 
which control is transferred to the group to the date that control ceases .
All intercompany transactions and balances between group companies are eliminated on consolidation .
The group has disclosed all of its subsidiary undertakings in note 42 of the parent company’s financial statements . 
c) Changes in accounting policies
The group’s accounting policies that have been applied in preparing these financial statements are consistent with those 
disclosed in the Annual Report and Accounts for the year ended 30 June 2015, except as explained below .
New accounting standards, amendments and interpretations adopted in the period
In the year ended 30 June 2016, the group did not adopt any new standards or amendments issued by the IASB or 
interpretations issued by the IFRS Interpretations Committee (IFRS IC) that have had a material impact on the consolidated 
financial statements .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  31
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
c) Changes in accounting policies continued
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016 | 
 C O NT I N U E D
New accounting standards, amendments and interpretations adopted in the period continued
Other new standards, amendments and interpretations listed in the table below were newly adopted by the group but have 
not had a material impact on the amounts reported in these financial statements . They may however impact the accounting 
for future transactions and arrangements .
Standard, Amendment or Interpretation Effective date
Annual improvements (2011-2013 cycle) 1 January 2015
  
Contributions to defined benefit plans (amendments to IAS 19) 1 February 2015
  
Annual improvements (2010-2012 cycle) 1 February 2015
  
New accounting standards, amendments and interpretations not yet adopted
A number of new standards, amendments and interpretations, which have not been applied in preparing these financial 
statements, have been issued and are effective for annual periods beginning after 1 July 2015:
Standard, Amendment or Interpretation Effective date
Disclosure initiative (amendments to IAS 1) 1 January 2016
  
Accounting for acquisitions of interests in joint operations (amendments to IFRS 11) 1 January 2016 
  
Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16  
and IAS 38) 1 January 2016
  
Annual improvements (2012-2014 cycle) 1 January 2016
  
Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and  
IAS 28) 1 January 2016
†  
  
Recognition of deferred tax assets for unrealised losses (amendments to IAS 12) 1 January 2017
†  
  
Disclosure initiative (amendments to IAS 7) 1 January 2017
†  
  
Revenue from contracts with customers (IFRS 15) 1 January 2018
†  
  
Financial instruments (IFRS 9) 1 January 2018
†  
  
Clarification and measurement of share-based payment transactions (amendments to IFRS 2) 1 January 2018
†  
  
Leases (IFRS 16) 1 January 2019
†  
  
† 
Not yet endorsed for use in the EU
The impact of these changes is currently being reviewed and there is no intention to early adopt .
IFRS 16 ‘Leases’ is expected to have a significant impact on the group’s future consolidated financial statements . This new 
standard will require the recognition a right-of-use asset and associated lease liability for the office premises that are leased 
by the group . The asset would be depreciated over the lease term and the liability would accrue interest, resulting in a 
front-loaded expense profile . This accounting treatment contrasts with the current treatment for operating leases, where no 
asset or liability is recognised and the lease payments are charged to the Consolidated Statement of Comprehensive Income 
on a straight line basis over the term of the lease . 
IFRS 9 ‘Financial Instruments’ could change the classification and measurement of financial assets . IFRS 15 ‘Revenue from 
Contracts with Customers’ could change how and when revenue is recognised from contracts with customers . The extent of 
their impact has not yet been fully determined . 32  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
d) Critical accounting estimates and judgements
The preparation of financial information requires the use of assumptions, estimates and judgements about future conditions . 
Use of currently available information and application of judgement are inherent in the formation of estimates . Actual results 
in the future may differ from those reported . In this regard, the directors believe that the accounting policies where 
judgement is necessarily applied are those that relate to the measurement of intangible assets, deferred consideration, the 
estimation of the fair value of share-based payments and client compensation provisions .
The underlying assumptions made are reviewed on an ongoing basis . Revisions to accounting estimates are recognised in the 
period in which the estimate is revised only if the revision affects both current and future periods .
Further information about key assumptions and sources of estimation uncertainty are set out below .
Intangible assets
The group has acquired client relationships and the associated investment management contracts as part of business 
combinations (as described in note 13), through separate purchase and purchased with newly employed teams of fund 
managers (as described in note 14) . In assessing the fair value of these assets the group has estimated their finite life based on 
information about the typical length of existing client relationships . Contracts acquired with fund managers and acquired 
client relationship contracts are amortised on a straight line basis over their estimated useful lives, ranging from 5 to 20 years .
Goodwill recognised as part of a business combination is reviewed annually for impairment, or when a change in 
circumstances indicates that it might be impaired . The recoverable amounts of cash generating units are determined by 
value in use calculations, which require the use of estimates to derive the projected future cash flows attributable to each unit . 
Details of the more significant assumptions are given in note 14 .
Deferred consideration
As described in note 22, the group has a deferred consideration balance in respect of the acquisition of Levitas Investment 
Management Services Limited in July 2014 . Deferred consideration is recognised at its fair value, being an estimate of the 
amount that will ultimately be payable in future periods . This has been calculated allowing for estimated growth in the 
acquired funds, discounted by the estimated cost of capital . The group considers that reasonably possible changes to these 
assumptions would not result in a material change in the fair value of the deferred consideration . 
Share-based payments
The group operates various share-based payment schemes in respect of services received from certain employees . Estimating 
the fair value of these share-based payments requires the group to apply an appropriate valuation model and determine the 
inputs to that model (notes 24 and 29) . The charge to the Consolidated Statement of Comprehensive Income in respect of 
share-based payments is calculated using assumptions about the number of eligible employees that will leave the group and 
the number of employees that will satisfy the relevant performance conditions . These estimates are reviewed regularly .
Provisions 
In the ordinary course of business, the group may receive complaints from clients in relation to the services provided . 
Complaints are assessed on a case-by-case basis and provisions are made where it is judged to be likely that compensation 
will be paid .
e) Exceptional items
Exceptional items are disclosed and described separately in the financial statements where it is necessary to do so to provide 
further understanding of the underlying financial performance of the group . These include material items of income or 
expense that are shown separately due to the significance of their nature or amount .
f) Business combinations
Business combinations are accounted for using the acquisition method . The cost of an acquisition is measured at the fair 
value of the aggregate amount of the consideration transferred at the acquisition date, irrespective of the extent of any 
minority interest . Acquisition costs are charged to the Consolidated Statement of Comprehensive Income in the year 
of acquisition .
d) Critical accounting estimates and 
judgements
f) Business combinations   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  33
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
f) Business combinations continued
When the group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and 
designation in accordance with the contractual terms, economic circumstances and pertinent conditions at the acquisition 
date . If the business combination is achieved in stages, the fair value of the group’s previously held equity interest is 
re-measured at the acquisition date and the difference is credited or charged to the Consolidated Statement of 
Comprehensive Income . Identifiable assets and liabilities assumed on acquisition are recognised in the Consolidated 
Statement of Financial Position at their fair value at the date of acquisition .
Any contingent consideration to be paid by the group to the vendor is recognised at its fair value at the acquisition date . 
Subsequent changes to the fair value of contingent consideration are recognised in accordance with IAS 39 in the 
Consolidated Statement of Comprehensive Income .
Goodwill is initially measured at cost, being the excess of the consideration transferred over the acquired company’s net 
identifiable assets acquired and liabilities assumed . If the consideration is lower than the fair value of the net assets acquired, 
the difference is recognised as a gain on a bargain purchase in the Consolidated Statement of Comprehensive Income .
Impairment
Goodwill and other intangible assets with an indefinite life are tested annually for impairment . For the purposes of 
impairment testing, goodwill acquired in a business combination is allocated to each of the group’s cash generating units that 
are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquisition are assigned 
to those units . The carrying amount of each cash generating unit is compared to its recoverable amount, which is determined 
using a discounted future cash flow model .
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill 
associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or 
loss on disposal of the operation . Goodwill disposed of in this circumstance is measured based on the relative values of the 
operation disposed of and the portion of the cash generating unit retained .
g) Fees, commissions and interest
Portfolio management and other advisory and custody services are billed in arrears but are recognised over the period the 
service is provided . Fees are calculated on the basis of a percentage of the value of the portfolio over the period . Dealing 
charges are levied at the time a deal is placed for a client . Fees are only recognised when the fee amount can be estimated 
reliably and it is probable that the fee will be receivable . Amounts are shown net of rebates paid to significant investors .
Performance fees are earned from some clients when contractually agreed performance levels are exceeded within specified 
performance measurement periods . They are only recognised, at the end of these performance periods, when a reliable 
estimate of the fee can be made and it is almost certain that it will be received .
Financial consulting fees are charged to clients using an hourly rate or by a fixed fee arrangement and are recognised over the 
period the service is provided . Commissions receivable and payable are accounted for in the period in which they are earned .
Where amounts due are conditional on the successful completion of fund raising for investment vehicles, revenue is 
recognised where, in the opinion of the directors, there is reasonable certainty that sufficient funds have been raised to enable 
the successful operation of that investment vehicle . Amounts due on an annual basis for the management of third party 
investment vehicles are recognised on a time apportioned basis .
Interest receivable is recognised on an accruals basis .
h) Cash and cash equivalents 
Cash comprises cash in hand and call deposits held with banks . Cash equivalents comprise short-term, highly liquid 
investments, with a maturity of less than three months from the date of acquisition . 34  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
i) Share-based payments
Equity-settled schemes 
The group engages in equity-settled share-based payment transactions in respect of services received from certain 
employees . The fair value of the services received is measured by reference to the fair value of the shares or share options on 
the grant date . This cost is then recognised in the Consolidated Statement of Comprehensive Income over the vesting period, 
with a corresponding credit to equity .
The fair value of the options granted is determined using option pricing models, which take into account the exercise price of 
the option, the current share price, the risk free rate of interest, the expected volatility of the Company’s share price over the 
life of the award and other relevant factors .
Cash settled schemes 
The group engages in cash settled share-based payment transactions in respect of services received from certain employees . 
On the grant date, the liability is measured at its fair value . The liability is subsequently re-measured at the end of each 
reporting period and on the date of settlement, with any changes in fair value recognised in the Consolidated Statement of 
Comprehensive Income . The cost of the services received from employees in respect of this scheme is recognised in the 
Consolidated Statement of Comprehensive Income with a corresponding credit to accruals .
j) Segmental reporting 
The group determines and presents operating segments based on the information that is provided internally to the group 
Board of Directors, which is the group’s chief operating decision maker . 
k) Fiduciary activities 
The group commonly acts as trustee and in other fiduciary capacities that result in the holding or placing of assets on behalf 
of individuals, trusts, retirement benefit plans and other institutions . These assets and income arising thereon are excluded 
from these financial statements, as they are not assets of the group .
The group holds money on behalf of some clients in accordance with the client money rules of the Financial Conduct 
Authority . Such monies and the corresponding liability to clients are not included within the Consolidated Statement of 
Financial Position as the group is not beneficially entitled thereto .
l) Property, plant and equipment 
All property, plant and equipment is included in the Consolidated Statement of Financial Position at historical cost less 
accumulated depreciation and impairment . Costs include the original purchase cost of the asset and the costs attributable to 
bringing the asset into a working condition for its intended use .
Provision is made for depreciation to write off the cost less estimated residual value of each asset, using a straight line 
method, over its expected useful life as follows:
   
Fixtures and fittings 3 to 6 . 67 years
   
Equipment 5 years
   
Leasehold improvements over the term of the lease
   
Motor vehicles 4 years
  
The assets’ residual values and useful economic lives are reviewed, and adjusted if appropriate, at the end of each reporting 
period . Gains and losses arising on disposal are determined by comparing the proceeds with the carrying amount . These are 
included in the Consolidated Statement of Comprehensive Income .    Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  35
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
m) Intangible assets
Amortisation of intangible assets is charged to administrative expenses in the Consolidated Statement of Comprehensive 
Income on a straight line basis over the estimated useful lives of the assets (4 to 20 years) .
Acquired client relationship contracts and contracts acquired with fund managers
Intangible assets are recognised where client relationship contracts are either separately acquired or acquired with 
investment managers who are employed by the group . These are initially recognised at cost and are subsequently amortised 
on a straight line basis over their estimated useful economic life . Separately acquired client relationship contracts are 
amortised over 15 to 20 years and those acquired with investment managers over 5 years . Both types of intangible asset are 
reviewed annually to determine whether there exists an indicator of impairment or an indicator that the assumed useful 
economic life has changed .
Computer software
Computer software costs are amortised on a straight line basis over an estimated useful life of four years .
Goodwill 
Goodwill arising as part of a business combination is initially measured at cost, being the excess of the fair value of the 
consideration transferred over the group’s interest in the net fair value of the separately identifiable assets, liabilities and 
contingent liabilities of the subsidiary at date of acquisition . In accordance with IFRS 3 ‘Business Combinations’, goodwill is 
not amortised but is reviewed annually for impairment and is therefore stated at cost less any provision for impairment of 
value . Any impairment is recognised immediately in the Consolidated Statement of Comprehensive Income and is not 
subsequently reversed . Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the 
entity sold . On acquisition, any goodwill acquired is allocated to cash generating units for the purposes of impairment testing . 
If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised 
directly in the Consolidated Statement of Comprehensive Income .
n) Investments in joint ventures
A joint venture is an entity in which the group holds a long-term interest and is jointly controlled by the group and one or more 
third parties under a contractual agreement . Under the equity method of accounting, interests in joint ventures are initially 
recognised at cost in the Consolidated Statement of Financial Position and subsequently adjusted to reflect changes in the 
group’s share of the net assets of the entities . The group’s share of the results of joint ventures is included in the Consolidated 
Statement of Comprehensive Income .
If the group’s share of the losses of a joint venture equals or exceeds its investment, the group does not recognise further 
losses, unless it has incurred obligations or made payments on behalf of the joint venture .
o) Financial investments 
The group classifies financial assets in the following categories: fair value through profit or loss; available for sale; loans and 
receivables; and held-to-maturity . The classification is determined by management on initial recognition of the financial 
asset, which depends on the purpose for which it was acquired .
Fair value through profit or loss
Financial instruments are classified as fair value through profit or loss if they are either held for trading or specifically 
designated in this category on initial recognition . Assets in this category are initially recognised at fair value and 
subsequently re-measured, with gains or losses arising from changes in fair value being recognised in the Consolidated 
Statement of Comprehensive Income . 36  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
o) Financial investments continued
Available for sale
Available for sale financial assets are non-derivatives that are either specifically designated in this category or are not 
classified in any of the other categories . They are included in non-current assets unless the investment matures or 
management intends to dispose of it within 12 months of the end of the reporting period . Available for sale financial assets 
are initially recognised at fair value and are subsequently revalued based on the current bid prices of the assets as quoted in 
active markets . Changes in fair value are recognised directly in equity, through the Consolidated Statement of Changes in 
Equity, with the exception of impairment losses which are recognised in the Consolidated Statement of Comprehensive 
Income . The cumulative gain or loss recognised in equity is recycled to the Consolidated Statement of Comprehensive 
Income when an available for sale financial asset is derecognised or impaired .
Loans and receivables 
Loans and receivables are non-derivative assets with fixed or determinable payments that are not quoted in an active market . 
They are included in current assets except where they have maturities of more than 12 months after the end of the reporting 
period, in which case they are classified as non-current assets . The group’s loans and receivables are recognised within ‘trade 
and other receivables’ .
Held-to-maturity
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinate payments and fixed maturities 
that the group’s management has the positive intention and ability to hold to maturity . Held-to-maturity financial assets are 
measured at amortised cost .
p) Provisions
Provisions are recognised when the group has a present obligation as a result of a past event, where it is probable that it will 
result in an outflow of economic benefits and can be reliably estimated . Provisions are measured at the present value of the 
expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market 
assessments of the time value of money and the risks specific to the obligation .
Client compensation 
Complaints are assessed on a case-by-case basis and provisions for compensation are made where it is judged necessary .
q) Foreign currency translation
The group’s functional and presentational currency is the Pound Sterling . Foreign currency transactions are translated using 
the exchange rate prevailing at the transaction date . At the reporting date, monetary assets and liabilities that are 
denominated in foreign currencies are retranslated at the prevailing rates on that date . Foreign exchange gains and losses 
resulting from settlement of such transactions and from the translation of period-end monetary assets and liabilities are 
recognised in the Consolidated Statement of Comprehensive Income .
r) Retirement benefit costs
Contributions in respect of the group’s defined contribution pension scheme are charged to the Consolidated Statement of 
Comprehensive Income as they fall due .
s) Taxation 
Tax on the profit for the year comprises current and deferred tax . Current tax is the expected tax payable on the taxable 
income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable 
in respect of previous years .
Deferred 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 group’s financial statements . Deferred tax assets and liabilities are measured 
at the tax rates that are expected to apply to the period when the asset is realised or the liability settled based on tax rates (and 
laws) that have been enacted or substantively enacted at the reporting date .
o) Financial investments   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  37
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
s) Taxation continued
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against 
which the temporary differences can be utilised .
t) Trade receivables 
Trade receivables are initially recognised and subsequently measured at the original invoice amount less an allowance for 
any amounts that are expected to be uncollectable . Doubtful debts are provided for when the collection of the full amount is 
no longer probable, whilst bad debts are immediately written off when identified .
u) Trade payables 
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from 
suppliers . These are classified as current liabilities if payment is due within 12 months or less (or in the normal operating 
cycle of the business if longer) . Otherwise, they are presented as non-current liabilities in the Consolidated Statement of 
Financial Position .
Trade payables are initially recognised at fair value and subsequently measured at amortised cost using the effective 
interest method .
v) Operating lease payments 
Rent payments due under operating leases are charged to the Consolidated Statement of Comprehensive Income on a 
straight line basis over the term of the lease . Where leases include lease incentives such as rent-free periods, the benefit of 
these incentives is recognised over the lease term as a reduction in the rental expense .
w) Financial instruments 
The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial 
liability or an equity instrument in accordance with the substance of the contractual arrangement . Financial instruments are 
recognised in the Consolidated Statement of Financial Position at fair value when the group becomes a party to the 
contractual provisions of the instrument .
x) Employee Benefit Trust (‘EBT’)
The Company provides finance to an EBT to purchase the Company’s shares on the open market in order to meet its 
obligation to provide shares when an employee exercises certain options or awards made under the group’s share-based 
payment schemes . The administration and finance costs connected with the EBT are charged to the Consolidated Statement 
of Comprehensive Income . The cost of the shares held by the EBT is deducted from equity . A transfer is made between other 
reserves and retained earnings over the vesting periods of the related share options or awards to reflect the ultimate 
proceeds receivable from employees on exercise . The trustees have waived their rights to receive dividends on the shares .
The EBT is considered to be a Structured Entity, as defined in note 36 . In substance, the activities of the trust are being 
conducted on behalf of the group according to its specific business needs, in order to obtain benefits from its operation . 
On this basis, the assets held by the trust are consolidated into the group’s financial statements .
y) Share capital
Ordinary share capital is classified as equity . Incremental costs directly attributable to the issue of new ordinary shares or 
options are shown in equity as a deduction, net of tax, from the proceeds .
Where the Company purchases its own equity share capital (treasury shares) the consideration paid, including any directly 
incremental costs (i . e . net of income taxes) is deducted from equity attributable to the Company’s equity holders until the 
shares are cancelled or reissued . Where such ordinary shares are subsequently reissued, any consideration received (net of 
any directly attributable incremental transaction costs and the related income tax effects) is included within equity 
attributable to the Company’s equity holders . 
s) Taxation 38  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
2. Principal accounting policies continued
z) Dividend distribution
The dividend distribution to the Company’s shareholders is recognised as a liability in the group’s financial statements in 
the period in which the dividend is authorised and no longer at the discretion of the Company . Final dividends are recognised 
when approved by the Company’s shareholders at the annual general meeting and interim dividends are recognised 
when paid .
3. Segmental information
For management purposes the group’s activities are organised into four operating divisions: Investment management, 
Financial planning, Funds and property management and International . The group’s other activity, offering nominee and 
custody services to clients, is included within Investment management . These divisions are the basis on which the group 
reports its primary segmental information . In accordance with IFRS 8 ‘Operating Segments’, disclosures are required to reflect 
the information which the Board uses internally for evaluating the performance of its operating segments and allocating 
resources to those segments . The information presented in this note is consistent with the presentation for internal reporting 
to the group Board of Directors .
Revenues and expenses are allocated to the business segment that originated the transaction . Revenues and expenses that 
are not directly originated by a particular business segment are reported as unallocated . Sales between segments are carried 
out at arm’s length . Centrally incurred expenses are allocated to business segments on an appropriate pro-rata basis . 
Segmental assets and liabilities comprise operating assets and liabilities, those being the majority of the balance sheet .
Year ended 30 June 2016
Investment 
management 
£’000
Financial
planning 
£’000
Funds and 
 property 
management 
£’000
International 
£’000
Total  
£’000
Total segment revenue 58,949 4,387 6,896 11,605 81,837
Inter segment revenue (238)    (136)  (64)  – (438)  
      
External revenue 58,711 4,251 6,832 11,605 81,399
      
Segment result 17,825 (60)  (624)  453 17,594
Unallocated items:
 Changes in fair value of deferred consideration 3,343
 Other unallocated items (5,081)  
      
Profit before tax 15,856
Taxation (3,117)  
      
Profit for the year 12,739
      
2. Principal accounting policies   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  39
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
3. Segmental information continued
Y ear ended 30 June 2015 
Investment 
management 
£’000
Financial
planning  
£’000
Funds and 
property 
management 
£’000
International 
£’000
Total  
£’000
Total segment revenue 54,464 4,191 6,044 13,200 77,899
Inter segment revenue (101)  (69)  (43)  – (213)  
      
External revenue 54,363 4,122 6,001 13,200 77,686
      
Segment result 15,774 (68)  (564)  1,315 16,457
Unallocated items:
 Changes in fair value of deferred consideration (302)  
 Other unallocated items (4,735)  
      
Profit before tax 11,420
Taxation (2,269)  
      
Profit for the year 9,151
      
a) Geographic analysis
The group’s operations are located in the United Kingdom and the Channel Islands . The following table presents external 
revenue analysed by the geographical location of the group entity providing the service .
2016  
£’000
2015  
£’000
United Kingdom 69,794 64,486
Channel Islands 11,605 13,200
    
Total revenue 81,399 77,686
    
b) Major clients
The group is not reliant on any one client or group of connected clients for the generation of revenues .
4. Revenue
2016  
£’000
2015  
£’000
Fee income 69,273 66,443
Financial services commission 125 235
Advisory and other income 12,001 11,008
     
Total revenue 81,399 77,686
     
5. Realised gain on investment
During the year ended 30 June 2016, the group realised an additional gain of £20,000 (2015: £540,000) on final disposal of its 
investment in Sancus Holdings Limited through the voluntary winding up of the company (note 16) .
3. Segmental information 40  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
6. Other gains and losses
Other gains and losses represent the net changes in the fair value of the group’s financial instruments recognised in the 
Consolidated Statement of Comprehensive Income .
2016  
£’000
2015  
£’000
Impairment of available for sale financial assets (note 16) (311)  (718)  
Impairment of investment in joint venture (note 17) (400)  –
Loss from changes in fair value of financial assets at fair value through profit or loss  
(note 20) (3)  (252)  
Gain from changes in fair value of deferred consideration (note 22) 3,571 216
     
Other gains and losses 2,857 (754)  
    
7 . Operating profit
Operating profit is stated after charging:
2016  
£’000
2015  
£’000
Staff costs (note 8) 38,716 38,558
Acquisition costs (see below) – 120
Auditors’ remuneration (see below) 380 280
Financial Services Compensation Scheme Levy (see below) 475 510
Depreciation (note 15) 969 990
Amortisation (note 14) 2,674 2,708
    
A more detailed analysis of auditors’ remuneration is provided below:
2016 
 £’000
2015  
£’000
Fees payable to the Company’s auditor for the audit of the consolidated group and parent 
company financial statements 56 61
Fees payable to the Company’s auditor and its associates for other services:
– Audit of the Company’s subsidiaries pursuant to legislation 230 185
– Audit-related assurance services 70 34
– Other advisory services 24 –
    
Total auditors’ remuneration 380 280
    
Acquisition costs
Administrative costs for the year ended 30 June 2016 include no directly attributable business acquisition costs 
(2015: £120,000) .
Financial Services Compensation Scheme levies
Administrative costs for the year ended 30 June 2016 include a charge of £475,000 (2015: £510,000) in respect of the 
Financial Services Compensation Scheme (‘FSCS’) levy . This includes the group’s levy for the 2016/17 scheme year of 
£470,000 .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  41
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
8. Employee information
a) Staff costs
2016  
£’000
2015  
£’000
Wages and salaries 33,491 32,670
Social security costs 3,053 3,129
Other pension costs 1,145 1,331
Share-based payments 1,027 1,428
     
Total staff costs 38,716 38,558
    
Pension costs relate entirely to a defined contribution scheme .
b) Number of employees
The average monthly number of employees during the year, including directors, was as follows:
2016 2015
Professional staff 190 183
Administrative staff 282 284
    
Total staff 472 467 
    
c) Key management compensation
The compensation of the key management personnel of the group, defined as the group Board of Directors including both the 
executives and non-executives, is set out below .
2016  
£’000
2015  
£’000
Short-term employee benefits 2,466 2,434
Post-employment benefits 25 25
Share-based payments 445 346
    
Total compensation 2,936 2,805
    
d) Directors’ emoluments
Further details of directors’ emoluments are included within the Remuneration Committee report on pages 12 to 19 .
2016  
£’000
2015  
£’000
Salaries and bonuses 2,209 2,209
Non-executive directors’ fees 234 208
Benefits in kind 23 17
    
2,466 2,434
Pension contributions 25 25
Amounts receivable under long term incentive schemes 445 378
    
Total directors’ remuneration 2,936 2,837
    
The aggregate amount of gains made by directors on the exercise of share options during the year was £109,000 
(2015: £913,000) . Retirement benefits are accruing to one director (2015: six) under a defined contribution pension scheme .  42  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
8. Employee information continued
d) Directors’ emoluments continued
The remuneration of the highest paid director during the year was as follows:    
2016  
£’000
2015  
£’000
Remuneration and benefits in kind 500 528
Amounts receivable under long term incentive schemes 93 68
    
Total remuneration 593 596
    
The amount of gains made by the highest paid director on the exercise of share options during the year was £25,000 
(2015: £90,000) .
9. Finance income and finance costs
2016  
£’000
2015  
£’000
Finance income
Bank interest on deposits 58 86
    
Total finance income 58 86
    
Finance costs
Bank interest payable – 3
Finance cost of deferred consideration 577 760
    
Total finance costs 577 763
    
10. Taxation
The tax charge on profit on ordinary activities for the year was as follows:
2016  
£’000
2015  
£’000
UK Corporation Tax at 20 . 00% (2015: 20 . 75%) 3,262 2,776
Under/(over) provision in prior years 448 (231)  
    
Total current tax 3,710 2,545
Deferred tax credits (259)  (276)  
Effect of change in tax rate on deferred tax (334)  –
    
Income tax expense 3,117 2,269
    
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions .
d) Directors’ emoluments
8. Employee information   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  43
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
10. Taxation continued
The tax on the group’s profit before tax differs from the theoretical amount that would arise using the time apportioned tax 
rate applicable to profits of the consolidated entities in the UK as follows: 
2016  
£’000
2015  
£’000
Profit on ordinary activities before tax 15,856 11,420
    
Profit on ordinary activities multiplied by the standard rate of tax in the UK of 20 . 00%  
 (2015: 20 . 75%) 3,171 2,370
Tax effect of:
– Lower tax rates in other countries in which the group operates (77)  (255)  
– Disallowable expenses (91)  385
– Change in rate of Corporation Tax applicable to deferred tax (334)  –
– Under provision / (over provision) in prior years 448 (231)  
    
Tax charge for the year 3,117 2,269
    
The deferred tax credits totalling £259,000 (2015: £276,000) represent a charge of £185,000 (2015: £28,000 charge) 
arising from the share option reserve at the balance sheet date, a credit of £35,000 (2015: £117 ,000 charge) relating to 
accelerated capital allowances and a credit of £409,000 (2015: £421,000) arising from the amortisation of acquired client 
relationship contracts .
On 1 April 2016, the standard rate of Corporation Tax in the UK was reduced to 20% . As a result the effective rate of 
Corporation Tax applied to the taxable profit for the year ended 30 June 2016 is 20 . 00% (2015: 20 . 75%) .
In addition to the change in the rate of UK Corporation Tax disclosed above, the Finance (No . 2) Act 2015, which was 
substantively enacted in October 2015, will further reduce the main rate of UK Corporation Tax to 19% in 2017 and 18% 
in 2020 . Deferred tax assets and liabilities are calculated at the rate that is expected to be in force when the temporary 
differences unwind, but limited to the extent that such rates have been substantively enacted . The tax rate used to 
determine the deferred tax assets and liabilities is therefore 18% (2015: 20%) and will be reviewed in future years subject to 
new legislation .
11. Earnings per share
The directors believe that underlying earnings per share provide a truer reflection of the group’s performance in the year . 
Underlying earnings per share are calculated based on ‘underlying earnings’, which is defined as earnings before acquisition 
costs, finance costs of deferred consideration, changes in the fair value of deferred consideration and amortisation of 
intangible assets . The tax effect of these adjustments has also been considered .
Earnings for the year used to calculate earnings per share as reported in these consolidated financial statements were 
as follows:
2016 
 £’000  
2015  
£’000
Earnings attributable to ordinary shareholders 12,739 9,151
Acquisition costs (note 7) – 120
Finance cost of deferred consideration (note 9) 577 760
Changes in fair value of deferred consideration (note 22) (3,571)  70
Amortisation (note 14) 2,674 2,708
Tax impact of adjustments (556)  (571)  
    
Underlying earnings attributable to ordinary shareholders 11,863 12,238
    
10. Taxation 44  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
11. Earnings per share continued
Basic earnings per share is calculated by dividing earnings attributable to ordinary shareholders by the weighted average 
number of shares in issue throughout the year . Diluted earnings per share represents the basic earnings per share adjusted 
for the effect of dilutive potential shares issuable on exercise of employee share options under the group’s share-based 
payment schemes, weighted for the relevant period .
The weighted average number of shares in issue during the year was as follows:
2016  
Number of 
shares
2015  
Number of 
shares
Weighted average number of shares in issue 13,493,316 13,399,031
Effect of dilutive potential shares issuable on exercise of employee share options 48,220 30,996
    
Diluted weighted average number of shares in issue 13,541,536 13,430,027
    
Earnings per share for the year attributable to equity holders of the Company were:
2016  
(p)
2015  
(p)
Based on reported earnings:
Basic earnings per share 94.41 68 .30
Diluted earnings per share 94.07 68 .14
    
Based on underlying earnings:
Basic earnings per share 87.92 91 .33
Diluted earnings per share 87.60 91 .12
    
12. Dividends
Amounts recognised as distributions to equity holders of the Company in the year were as follows:
2016  
£’000
2015  
£’000
Final dividend paid for the year ended 30 June 2015 of 20 .5p 
(2014: 19 . 0p) per share 2,758 2,535
Interim dividend paid for the year ended 30 June 2016 of 12 . 0p 
(2015: 10 . 0p) per share 1,614 1,337
    
Total dividends 4,372 3,872
    
Final dividend proposed for the year ended 30 June 2016 of 23 . 0p (2015: 20 .5p) per share 3,101 2,757
    
The interim dividend of 12 . 0p (2015: 10 . 0p) per share was paid on 26 April 2016 . 
A final dividend for the year ended 30 June 2016 of 23 . 0p (2015: 20 .5p) per share was declared by the Board of Directors on 
20 September 2016 and is subject to approval by the shareholders at the Company’s annual general meeting . It will be paid on 
28 October 2016 to shareholders who are on the register at the close of business on 30 September 2016 . In accordance with 
IAS 10 ‘Events After the Reporting Period’, this dividend has not been included as a liability in these financial statements .
13. Business combinations
On 31 July 2014, the group exercised its option to acquire the entire share capital of Levitas Investment Management Services 
Limited (‘Levitas’) . Full details of the acquisition are disclosed in note 13 of the 2015 Annual Report and Accounts . There have 
been no adjustments to the goodwill recognised in relation to the acquisition of Levitas .
11. Earnings per share   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  45
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
14. Intangible assets
Goodwill  
£’000
Computer
software 
 £’000
Acquired
client
relationship
contracts  
£’000
Contracts
acquired with
fund
managers  
£’000
Total  
£’000
Cost
At 1 July 2014 24,793 411 32,747 3,048 60,999
Additions – 1,405 – 474 1,879
Additions on acquisition of subsidiaries at fair value 11,213 – – – 11,213
      
At 30 June 2015 36,006 1,816 32,747 3,522 74,091
Additions – 3,265 – – 3,265
      
At 30 June 2016 36,006 5,081 32,747 3,522 77 ,356
      
Accumulated amortisation
At 1 July 2014 – 269 3,771 2,085 6,125
Amortisation charge – 129 2,167 412 2,708
      
At 30 June 2015 – 398 5,938 2,497 8,833
Amortisation charge – 132 2,177 365 2,674
      
At 30 June 2016 – 530 8,115 2,862 11,507
      
Net book value
At 1 July 2014 24,793 142 28,976 963 54,874
At 30 June 2015 36,006 1,418 26,809 1,025 65,258
      
At 30 June 2016 36,006 4,551 24,632 660 65,849
      
a) Goodwill
Goodwill acquired in a business combination is allocated at acquisition to the cash generating units (‘CGUs’) that are expected 
to benefit from that business combination . The carrying amount of goodwill at 30 June 2016 comprises £3,550,000 in respect 
of the Braemar Group Limited (‘Braemar’) CGU, £21,243,000 in respect of the Brooks Macdonald Asset Management 
(International) Limited, Brooks Macdonald Retirement Services (International) Limited and DPZ (collectively ‘Brooks 
Macdonald International’) CGU and £11,213,000 in respect of the Levitas Investment Management Services Limited 
(‘Levitas’)  CGU .
Goodwill is reviewed annually for impairment and its recoverability has been assessed at 30 June 2016 by comparing 
the carrying amount of the CGUs to their expected recoverable amount, estimated on a value-in-use basis . The value-in-use of 
each CGU has been calculated using pre-tax discounted cash flow projections based on the most recent budgets approved by 
the relevant subsidiary company boards of directors, covering a period of up to five years . Cash flows are then extrapolated 
beyond the forecast period using an expected long-term growth rate .
Based on the value-in-use calculation, at 30 June 2016 the calculated recoverable amount of the Brooks Macdonald 
International CGU was £43,172,000, indicating that there is no impairment . The key underlying assumptions of the 
calculation are the discount rate, the short-term growth in earnings and the long-term growth rate of the business . A pre-tax 
discount rate of 8 . 45% has been used, based on the group’s assessment of the risk-free rate of interest and specific risks 
relating to Brooks Macdonald International . Annual earnings growth rates of between 23% and 65% are forecast over the next 
five financial years, the period covered by the most recent forecasts, which reflect historic actual growth and planned 
management actions and are considered to be achievable given current market and industry trends . The 2% long-term 
growth rate applied is considered prudent in the context of the long-term average growth rate for the funds, investment 
management and financial planning industries in which the CGU operates . 46  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
14. Intangible assets continued
a) Goodwill continued
In relation to the Levitas CGU, based on the value-in-use calculation the calculated recoverable amount at 30 June 2016 was 
£17 ,910,000, indicating that there is no impairment . The key underlying assumptions of the calculation are the discount rate, 
the growth in funds under management of the Levitas funds and the long-term growth rate of the business . A pre-tax discount 
rate of 8 . 45% has been used, based on the group’s assessment of the risk-free rate of interest and specific risks relating to 
Levitas . Annual funds under management growth rates of between 20% and 48% are forecast in the next five financial years, 
the period covered by the most recent forecasts, which reflect historic actual growth and planned management activities and 
are considered to be achievable given current market and industry trends . The 2% long-term growth rate applied is 
considered prudent in the context of the long-term average growth rate for the funds industry in which the CGU operates .
The key assumptions inherent in the value-in-use calculations for the Braemar CGU were similarly a pre-tax discount rate of 
8 . 45%, annual revenue growth rates ranging from 12% to 20% and a long-term growth rate of 2% . 
Significant headroom exists in the calculations of the respective recoverable amounts of these CGUs over the carrying 
amounts of the goodwill allocated to them . On this basis, the directors have concluded that there is no impairment . The 
directors consider that no reasonably foreseeable change in any of the key assumptions would result in an impairment of 
goodwill, given the margin by which the estimated recoverable amounts of the CGUs exceed the carrying amounts of the 
goodwill allocated to each .
b) Computer software
Software costs are amortised over an estimated useful life of four years on a straight line basis .
c) Acquired client relationship contracts
This asset represents the fair value of future benefits accruing to the group from acquired client relationship contracts . 
The amortisation of client relationships is charged to the Consolidated Statement of Comprehensive Income on a straight 
line basis over their estimated useful lives (15 to 20 years) .
d) Contracts acquired with fund managers
This asset represents the fair value of the future benefits accruing to the group from contracts acquired with fund managers . 
Payments made to acquire such contracts are stated at cost and amortised on a straight line basis over an estimated useful life 
of five years .
      Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  47
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
15. Property, plant and equipment
Motor 
vehicles 
£’000
Fixtures and 
fittings  
£’000
Equipment 
and leasehold  
improvements  
£’000
Total  
£’000
Cost
At 1 July 2014 35 2,087 5,814 7,936
Additions 25 69 1,528 1,622
Disposals – (64)  – (64)  
     
At 30 June 2015 60 2,092 7,342 9,494
Additions – 19 732 751
Disposals (27)  – – (27)  
     
At 30 June 2016 33 2,111 8,074 10,218
     
Accumulated depreciation
At 1 July 2014 13 959 3,993 4,965
Depreciation charge 15 307 668 990
     
At 30 June 2015 28 1,266 4,661 5,955
Disposals (15)  – – (15)  
Depreciation charge 9 232 728 969
     
At 30 June 2016 22 1,498 5,389 6,909
     
Net book value
At 1 July 2014 22 1,128 1,821 2,971
At 30 June 2015 32 826 2,681 3,539
     
At 30 June 2016 11 613 2,685 3,309
     
16. Available for sale financial assets
2016 
£’000
2015 
£’000
At beginning of year 1,532 2,182
Additions 500 250
Disposals – (250)  
Loss from changes in fair value (6)  –
Accumulated loss on revaluation reserve recycled – 68
Impairment loss (311)  (718)  
    
At end of year 1,715 1,532
    
The group holds investments of 1,426,793 . 64 class B ordinary shares, representing an interest of 10 . 88%, in Braemar Group 
PCC Limited Student Accommodation Cell (‘Student Accommodation Fund’); 750,000 zero dividend preference shares in 
GLI Finance Limited (‘GLIF’), a listed company incorporated in Guernsey; and 500,000 redeemable preference shares in an 
unlisted company incorporated in the UK . 48  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
16. Available for sale financial assets continued
The Student Accommodation Fund is promoted by Brooks Macdonald Funds Limited, a subsidiary of the group . The 
shareholders of the fund approved a resolution in May 2016 to sell the underlying property portfolio of the fund to a third 
party . The shares will subsequently be compulsorily redeemed out of the remaining net assets of the fund following the sale, 
although this process had not been completed at 30 June 2016 . The group has therefore estimated the fair value of the group’s 
investment at 30 June 2016 at £471,000 (2015: £782,000) based on the most recent information made available to investors 
about the consideration payable for the assets of the fund and the expected net asset value per share after adjusting for the 
costs associated with the sale . An impairment loss of £311,000 (2015: £718,000) was recognised in the Consolidated Statement 
of Comprehensive Income during the year, reflecting this perceived permanent diminution of value of the group’s shareholding .
During the year, the group realised an additional gain of £20,000 (2015: £540,000) on the final distribution of proceeds from 
the voluntary liquidation of Sancus Holdings Limited (‘SHL’), an unlisted company incorporated in Guernsey . The disposal of 
the group’s investment in SHL was recognised in the year ended 30 June 2015 and the gain is included within realised gain on 
investment in the Consolidated Statement of Comprehensive Income . Further details are disclosed in note 16 to the 2015 
Annual Report and Accounts . 
At 30 June 2016, the fair value of the group’s GLIF preference shareholding was £744,000 (2015: £750,000), based on their bid 
price on the London Stock Exchange . The reduction in fair value of £6,000 (2015: £nil) is recognised within other 
comprehensive income in the Consolidated Statement of Comprehensive Income .
During the year, the group acquired 500,000 redeemable preference shares in an unlisted company with a par value of £1 at a 
cost of £500,000 . The preference shares are redeemable at par any time after five years from the date of issue (8 April 2016) 
and bear an entitlement to a fixed preferential dividend of 8% per annum of the nominal value of the shares . The fair value of 
the preference shares has been estimated at £500,000 based on a discounted cash flow analysis .
The table below provides an analysis of the financial instruments that, subsequent to initial recognition, are measured at fair 
value . These are grouped into the following levels within the fair value hierarchy, based on the degree to which the inputs 
used to determine the fair value are observable:
• Level 1 – derived from quoted prices in active markets for identical assets or liabilities at the measurement date;
• Level 2 – derived from inputs other than quoted prices included within level 1 that are observable, either directly or indirectly; 
and 
• Level 3 – derived from inputs that are not based on observable market data .
Level 1 
£’000
Level 2 
£’000
Level 3 
£’000
Total 
£’000
Braemar Group PCC Limited Student Accommodation Cell – – 471 471
Unlisted redeemable preference shares – – 500 500
GLIF preference shares 744 – – 744
     
Total 744 – 971 1,715
     
During the year, the Student Accommodation Fund investment was transferred from level 2 to level 3 . As no active market 
exists for the shares and there has been no recent announcement of the net asset value of the fund, the group has applied 
valuation techniques that are not based on observable market data .
17 . Investment in joint venture 
Brooks Macdonald Funds Limited, a subsidiary of Brooks Macdonald Group plc, holds a 60% interest in North Row Capital 
LLP, a UK Limited Liability Partnership . The group has joint control over the partnership, with the remaining interest owned 
by two individual partners who developed the investment approach behind the IFSL North Row Liquid Property Fund . The 
fund was launched in February 2014 and offers investors liquid exposure to global real estate markets .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  49
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
17 . Investment in joint venture  continued
2016 
£’000
2015 
£’000
At beginning of year 628 232
Working capital advanced in the year 86 400
Impairment loss (400)  –
Share of loss of joint venture (107)  (4)    
    
At end of year 207 628
    
An impairment loss of £400,000 was recognised during the year (2015: £nil) to reduce the carrying amount of the group’s 
investment in North Row Capital LLP to its estimated recoverable amount . The expense is included within other gains and 
losses on the Consolidated Statement of Comprehensive Income . Based on the most recent forecasts, the future cash flows 
from the partnership will accumulate slower than originally anticipated and as a result it will take longer for the group to 
realise a cash return on its investment in the joint venture . 
18. Deferred income tax
Deferred income tax assets are only recognised to the extent that it is probable that future taxable profit will be available 
against which the temporary differences can be utilised . An analysis of the group’s deferred assets and deferred tax liabilities 
is shown below .
2016 
£’000
2015 
£’000
Deferred tax assets
Deferred tax assets to be settled after more than 12 months 190 207
Deferred tax assets to be settled within 12 months 361 502
    
Total deferred tax assets 551 709
    
Deferred tax liabilities
Deferred tax liabilities to be settled after more than 12 months (3,951)  (4,694)  
Deferred tax liabilities to be settled within 12 months (84)  (119)  
    
Total deferred tax liabilities (4,035)  (4,813)  
    
The gross movement on the deferred income tax account during the year was as follows:
2016 
£’000
2015 
£’000
At 1 July (4,104)  (4,308)  
Credit to the Statement of Comprehensive Income (note 10) 593 276
Credit recognised in other comprehensive income – –
Credit/(charge) recognised in equity 27 (72)  
Additions on acquisition of subsidiaries – –
    
At 30 June (3,484)  (4,104)  
     50  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
18. Deferred income tax continued
The change in deferred income tax assets and liabilities during the year was as follows:
Share-based 
payments
£’000
Deferred tax assets
At 1 July 2014 809
Charge to the Statement of Comprehensive Income (28)  
Charge to equity (72)  
  
At 30 June 2015 709
Charge to the Statement of Comprehensive Income (185)  
Charge to equity 27
  
At 30 June 2016 551
  
The carrying amount of the deferred tax asset is reviewed at each reporting date and is only recognised to the extent that it is 
probable that future taxable profits of the group will allow the asset to be recovered . 
Accelerated 
capital 
allowances
£’000
Available for 
sale financial 
assets
£’000
Intangible 
asset 
amortisation
£’000
Total
£’000
Deferred tax liabilities
At 1 July 2014 2 – 5,115 5,117
Credit to the Statement of Comprehensive Income 117 – (421)  (304)  
Charge to other comprehensive income – – – –
     
At 30 June 2015 119 – 4,694 4,813
Additions on acquisition of subsidiaries – – – –
Debit/(credit) to the Statement of Comprehensive Income (35)  – (743)  (778)  
Charge to other comprehensive income – – – –
     
At 30 June 2016 84 – 3,951 4,035
     
19. Trade and other receivables
2016
£’000
2015
£’000
Non-current assets
Loans receivable 150 –
    
Total non-current trade and other receivables 150 –
    
Current assets
Trade receivables 5,939 5,854
Other receivables 2,518 3,426
Prepayments and accrued income 15,501 12,122
    
Total current trade and other receivables 23,958 21,402
    
At 30 June 2016 there was a loan receivable outstanding, issued by Brooks Macdonald Asset Management (International) 
Limited to a third party for £150,000 (2015: £150,000) . The loan is now repayable after more than one year from the reporting 
date . At 30 June 2015 the loan was included as a current asset within other receivables . No impairment was recognised 
during the year (2015: £nil) .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  51
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
20. Financial assets at fair value through profit or loss
2016
£’000
2015
£’000
At beginning of year 3 478
Additions 1,000 40
Disposals – (263)    
Loss from change in fair value (3)    (252)    
     
At end of year 1,000 3
    
These investments are classified as Level 1 as defined in note 16 .
21. Cash and cash equivalents
2016
£’000
2015
£’000
Cash at bank 19,437 19,240
Cash held in employee benefit trust 41 34
    
Total cash and cash equivalents 19,478 19,274
    
Cash and cash equivalents are distributed across a range of financial institutions with high credit ratings in accordance with 
the group’s treasury policy . Cash at bank comprises current accounts and immediately accessible deposit accounts .
22. Deferred consideration
Deferred consideration is split between non-current liabilities (see below) and provisions within current liabilities (note 25) to 
the extent that it is due for payment within one year of the reporting date . It reflects the directors’ best estimate of amounts 
payable in the future in respect of certain client relationships and subsidiary undertakings that were acquired by the group . 
Deferred consideration is measured at its fair value based on discounted expected future cash flows . The movements in the 
total deferred consideration balance during the year were as follows:
2016
£’000
2015
£’000
At 1 July 13,826 11,236
Added on acquisitions during the year – 11,264
Finance cost of deferred consideration 577 760
Fair value adjustments (3,571)  (216)  
Payments made during the year (3,901)  (9,218)  
    
At 30 June 6,931 13,826
    
Analysed as:
Amounts falling due within one year 1,641 4,384
Amounts falling due after more than one year 5,290 9,442
    
Total deferred consideration 6,931 13,826
    
No additions to deferred consideration (2015: £11,264,000) were recognised in the year . Payments totalling £3,901,000 (2015: 
£9,218,000) were made during the year, representing the final payment of £524,000 to the vendor of JPAM Limited (‘JPAM’); 
the final payment of £2,130,000 to vendors of DPZ; and a further payment of £1,247 ,000 to vendors of Levitas . 52  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
22. Deferred consideration continued
A reduction in the fair value of deferred consideration of £3,571,000 (2015: £216,000) was recognised during the year, with a 
corresponding gain recognised within other gains and losses on the Consolidated Statement of Comprehensive Income . This 
included an adjustment to reduce the fair value of deferred consideration in respect of Levitas by £3,343,000 . The amount 
payable is based on the incremental growth in FUM of the TM Levitas funds, measured at annual intervals . As forecast growth 
was not achieved during year, the FUM forecast was subsequently revised and the estimated future deferred consideration 
payments reduced accordingly . Adjustments were also made to reduce the fair value of the deferred consideration 
attributable to DPZ by £225,000 and JPAM by £3,000 to the amount of the final payments made to the vendors .
Deferred consideration is classified as Level 3 within the fair value hierarchy, as defined in note 16 .
Amounts falling due after more than one year from the reporting date are presented in non-current liabilities as shown below:
2016
£’000
2015
£’000
At 1 July 9,442 2,943
Added on acquisitions during the year – 11,264
Finance cost of deferred consideration 498 482
Changes in fair value of deferred consideration (3,343)  –
Transfer to current liabilities (1,307)  (5,247)  
    
At 30 June 5,290 9,442
    
During the year, no deferred consideration was recognised on acquisitions (2015: £11,264,000 was recognised in relation to 
the acquisition of Levitas) . An amount of £1,307 ,000 (2015: £5,247 ,000), representing deferred consideration payable in 
respect of the acquisition of Levitas, was transferred to provisions within current liabilities . A range of final outcomes for the 
expected total deferred consideration payable cannot be estimated as the future value of the funds under management is 
dependent on several unpredictable variables, including client retention and market movements . 
23. Other non-current liabilities
Other non-current liabilities relate to employer’s National Insurance contributions arising from share option awards under 
the LTIS scheme . 
2016
£’000
2015
£’000
At 1 July 95 115
Additional liability in respect of LTIS awards 76 74
Transfer to current liabilities (57)  (94)  
    
At 30 June 114 95
    
The additional liability was recognised during the year of £76,000 (2015: £74,000) in respect of existing LTIS awards, granted 
in previous years, that are expected to vest in the future . During the year, an amount of £57 ,000 (2015: £94,000) was 
transferred to current liabilities, reflecting awards that are expected to vest within the next 12 months .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  53
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
24. Trade and other payables
2016
£’000
2015
£’000
Trade payables 4,870 2,854
Other taxes and social security 2,509 2,580
Other payables 219 1,429
Accruals and deferred income 11,246 10,031
    
Total trade and other payables 18,844 16,894
    
Included within accruals and deferred income in 2016 is an accrual of £179,000 (2015: £282,000) in respect of employer’s 
National Insurance contributions arising from share option awards under the LTIS (note 29b) . 
The options have been valued using a Black Scholes model based on the market price of the Company’s shares at the grant 
date (note 29) . The total charge to the Consolidated Statement of Comprehensive Income for the year for all Phantom Share 
Option Schemes and employer’s National Insurance contributions arising from share option awards under the LTIS (note 29b) 
was £84,000 (2015: £114,000) .
25. Provisions
Client 
compensation
£’000
Deferred 
consideration
£’000
FSCS  
levy
£’000
Total
£’000
At 1 July 2014 503 8,293 351 9,147
Charge to the Statement of Comprehensive Income 400 – 510 910
Added on acquisitions during the year – 2,304 – 2,304
Finance cost of deferred consideration – 278 – 278
Fair value adjustments – (216)  – (216)  
Transfer from non-current liabilities – 2,943 – 2,943
Utilised during the year (202)  (9,218)  (472)  (9,892)  
     
At 30 June 2015 701 4,384 389 5,474
Charge to the Statement of Comprehensive Income 125 – 475 600
Added on acquisitions during the year – – – –
Finance cost of deferred consideration – 79 – 79
Fair value adjustments – (228)  – (228)  
Transfer from non-current liabilities – 1,307 – 1,307
Utilised during the year (153)  (3,901)  (394)  (4,448)  
     
At 30 June 2016 673 1,641 470 2,784
      54  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
25. Provisions continued
a) Client compensation
Client compensation provisions relate to the potential liability arising from client complaints against the group . Complaints 
are assessed on a case by case basis and provisions for compensation are made where judged necessary .
b) Deferred consideration
Deferred consideration has been included within provisions as a current liability to the extent that it is due for payment 
within one year of the reporting date . The amount outstanding at 30 June 2016 was £1,641,000 (2015: £4,384,000) and relates 
entirely to the Levitas acquisition .
An amount of £1,307 ,000 (2015: £2,943,000) was transferred from non-current liabilities, representing payments made 
during the year and provisions for amounts falling due within one year of the reporting date . Provisions of £3,901,000 (2015: 
£9,218,000) were utilised during the year on payment of £524,000 to the vendor of JPAM, £2,130,000 to the vendors of DPZ, 
and £1,247 ,000 to vendors of Levitas . 
c) FSCS levy
Following confirmation by the FSCS in April 2016 of its final industry levy for 2016/17 , the group has made a provision of 
£470,000 (2015: £502,000) for its estimated share .
26. Reconciliation of operating profit to net cash inflow from operating activities
2016
£’000
2015
£’000
Operating profit 16,482 12,101
Adjustments for:
Depreciation of property, plant and equipment 969 990
Loss on sale of fixed assets 9 –
Amortisation of intangible assets 2,674 2,708
Other gains and losses (2,857)  1,004
(Increase)/decrease in receivables (2,706)  67
Increase in payables 1,950 1,693
Increase in provisions 53 236
Increase/(decrease) in non-current liabilities 19 (20)  
Share-based payments 943 1,315
    
Net cash inflow from operating activities 17,536 20,094
     
In the year ended 30 June 2015, the group obtained control of Levitas . The net cash outflow resulting from this business 
combination is presented in note 13(c) on page 43 of the 2015 Annual Report and Accounts .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  55
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
27 . Share capital and share premium account
The movements in share capital and share premium during the year were as follows:
Number of 
shares
£’000
Exercise
price
(p)
Share
capital
£’000
Share 
premium
account
£’000
Total
£’000
At 1 July 2014 13,592,175 135 35,147 35,282
Shares issued:
– on exercise of options 29,500 155 .5-290 .5 – 50 50
– to Sharesave Scheme 38,545 916 .0-1,054 .0 1 403 404
      
At 30 June 2015 13,660,220 136 35,600 35,736
Shares issued:
– on exercise of options 19,400 215 .0-290 .5 – 53 53
– to Sharesave Scheme 29,550 1,054 .0-1,386 .0 1 344 345
      
At 30 June 2016 13,709,170 137 35,997 36,134
      
The total number of ordinary shares issued and fully paid at 30 June 2016 was 13,709,170 (2015: 13,660,220) with a par value 
of 1p per share . 
Shares issued on exercise of options and to Sharesave Scheme members resulted in a £1,000 increase in share capital in the 
year ended 30 June 2016 (2015: £1,000) .
Employee Benefit Trust
The group established an Employee Benefit Trust (‘EBT’) on 3 December 2010 to acquire ordinary shares in the Company 
to satisfy awards under the group’s Long Term Incentive Scheme (‘LTIS’) and other share-based payment schemes (note 29) . 
At 30 June 2016, the EBT held 228,208 (2015: 207 ,532) 1p ordinary shares in the Company, acquired for a total consideration 
of £3,376,000 (2015: £2,803,000) with a market value of £3,774,000 (2015: £3,668,000) . They are classified as treasury shares 
in the Consolidated Statement of Financial Position, their cost being deducted from retained earnings within 
shareholders’ equity .
28. Other reserves and retained earnings
Other reserves are comprised of the following balances:
2016
£’000
2015
£’000
Share option reserve 5,331 4,909
Merger reserve 192 192
Available for sale reserve (6)  –
      
Total other reserves 5,517 5,101
     56  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
28. Other reserves and retained earnings continued
The movements in other reserves during the year were as follows:
2016
£’000
2015
£’000
Share option reserve
At beginning of the year 4,909 4,596
Share-based payments 943 1,315
Transfer to retained earnings (806)  (1,334)  
Tax on share-based payments 285 332
    
At end of the year 5,331 4,909
    
Available for sale reserve
At beginning of the year – (68)  
Revaluation of available for sale financial assets (6)  –
Recycling of reserve due to impairment – 68
    
At end of the year (6)  –
    
The movements in retained earnings during the year were as follows:
2016
£’000
2015
£’000
At beginning of the year 33,327 27,456
Profit for the financial year 12,739 9,151
Purchase of own shares by Employee Benefit Trust (1,143)  (742)   
Transfer from share option reserve 806 1,334
Dividends paid (4,372)  (3,872)  
    
At end of the year 41,357 33,327
    
29. Equity-settled share-based payments
All share options granted to employees under the group’s equity-settled share-based payment schemes are valued using a 
Black Scholes model, based on the market price of the Company’s shares at the grant date and annualised volatility of up to 
50%, covering the period to the end of the contractual life . Volatility has been estimated on the basis of the Company’s 
historical share price subsequent to flotation . The risk-free annual rate of interest is deemed to be the yield on a gilt edged 
security with a maturity term of 3 years, ranging from 0 . 30% to 2 . 00% .
For options granted during the year, the Black Scholes model was based on the market price of the Company’s shares at each 
respective grant date and volatility of 26% to 27% with a dividend yield of 1 . 77% to 2 . 06%, an expected vesting period of three 
years and a risk-free annual rate of interest of between 0 . 61% and 1 . 00% .
The share options issued under the various equity-settled share-based payment schemes have been valued at prices ranging 
from £0 .58 to £16 . 28 per share . The charge to the Consolidated Statement of Comprehensive Income for the year in respect of 
these was £943,000 (2015: £1,315,000) . The weighted average remaining contractual life of all equity-settled share-based 
payment schemes at 30 June 2016 was 1 . 48 years (2015: 1 . 62 years) . The weighted average share price of all options 
exercised during the year was £17 . 71 (2015: £14 . 84) . The total charge to the Consolidated Statement of Comprehensive 
Income for the year for all share-based payment schemes was £1,027 ,000 (2015: £1,428,000) .
28. Other reserves and retained earnings   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  57
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
29. Equity-settled share-based payments continued
The exercise price and fair value of share options granted during the year was as follows:
Exercise  
price (p)
Fair value  
(p)
Company Share Option Plan 1,719 278
Long Term Incentive Scheme nil 1,628
Employee Sharesave Scheme 1,400 357
     
a) Enterprise Management Incentive Scheme (‘EMI’)
Under the approved EMI Scheme, certain employees hold options to subscribe for shares in the Company at prices ranging 
from 215p to 775p . Options are conditional on the employee completing three years’ service (the vesting period) and are 
exercisable three years from the grant date . The options have a contractual option term of seven years from the date they 
become exercisable . The group has no legal or constructive obligation to repurchase or settle the options in cash .
2016 2015
Number  
of options
Weighted 
average 
exercise price 
(£)
Number  
of options
Weighted 
average 
exercise price 
(£)
At 1 July 39,753 3.81 69,253 2 .90
Forfeited in the year – – – –
Exercised in the year (19,400)  2.73 (29,500)  1 .71
     
At 30 June 20,353 4.83 39,753 3 .81
     
The number of share options outstanding at the reporting date was as follows:
Scheme year (grant date)
Exercise  
price (p)
Vesting  
period
2016
Number  
of options
2015
Number 
 of options
2006 215 .0 2009 – 2016 – 4,500
2007 290 .5 2010 – 2017 12,250 27,150
2010 775 .0 2013 – 2020 8,103 8,103
     
All years 20,353 39,753
     
b) Long Term Incentive Scheme (‘LTIS’)
The Company has made annual awards under the LTIS to executive directors and other senior executives . The 
conditional awards, which vest three years after the grant date, are subject to the satisfaction of specified performance 
criteria, measured over a three year performance period . All such conditional awards are made at the discretion of the 
Remuneration Committee .
2016
Number  
of options
2015
Number  
of options
At 1 July 198,291 233,496
Granted in the year 60,671 70,624
Exercised in the year (45,794)  (95,215)  
Forfeited in the year (4,429)  (10,614)  
    
At 30 June 208,739 198,291
     58  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
29. Equity-settled share-based payments continued
b) Long Term Incentive Scheme (‘LTIS’) continued
The number of share options outstanding at the reporting date was as follows:
Scheme year (grant date)
Exercise  
price (p)
V esting  
period
2016
Number  
of options
2015
Number  
of options
2010 – 2013 10,550 10,550
2011 – 2014 6,863 10,622
2012 – 2015 26,285 68,320
2013 – 2016 40,795 42,163
2014 – 2017 64,156 66,636
2015 – 2018 60,090 –
       
All years 208,739 198,291
       
c) Employee Benefit Trust (‘EBT’)
Brooks Macdonald Group plc established an Employee Benefit Trust (‘the Trust’) on 3 December 2010 . The Trust was 
established to acquire ordinary shares in the Company to satisfy rights to purchase shares on the exercise of options awarded 
under the LTIS . All finance costs and administration expenses connected with the Trust are charged to Consolidated 
Statement of Comprehensive Income as they accrue . The Trust has waived its rights to dividends . The following table shows 
the number of shares held by the Trust that have not yet vested unconditionally .
2016
Number  
of shares
2015
Number  
of shares
At 1 July 207,532 249,696
Acquired in the year 66,470 53,051
Exercised in the year (45,794)  (95,215)  
    
At 30 June 228,208 207,532
    
d) Company Share Option Plan (‘CSOP’)
The Company has established a Company Share Option Plan (‘CSOP’), which was approved by HMRC in November 2013 . The 
CSOP is a discretionary scheme whereby employees or directors are granted an option to purchase the Company’s shares in 
the future at a price set on the date of the grant . The maximum award under the terms of the scheme is a total market value of 
£30,000 per recipient . The performance conditions attached to the scheme require an increase in the diluted earnings per 
share of the Company of 2% more than the increase in the RPI over the three years starting with the financial year in which 
the option is granted .
2016 2015
Number of 
options
Weighted 
average 
exercise price 
(£)
Number of 
options
Weighted 
average 
exercise price 
(£)
At 1 July 39,927 14.16 21,016 14 .52
Granted in the year 42,501 17.105 22,110 13 .81
Lapsed in the year (1,164)  17.19 (3,199)  14 .07
      
At 30 June 81,264 15.67 39,927 14 .16
         Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  59
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
29. Equity-settled share-based payments continued
d) Company Share Option Plan (‘CSOP’) continued
The number of share options outstanding at the reporting date was as follows: 
Scheme year (grant date)
Exercise  
price (£)
V esting  
period
2016
Number  
of options
2015
Number  
of options
2013 14 .52 2016 19,810 19,810
2014 13 .81 2017 20,117 20,117
2015 17 .19 2018 41,337 –
     
All years 81,264 39,927
     
e) Employee Sharesave Scheme
Under the scheme, employees can contribute up to £500 a month over a three year period to acquire shares in the Company . 
At the end of the savings period, employees can elect to receive shares or receive their savings in cash .
2016 2015
Number  
of options
Weighted 
average 
exercise 
price (£)
Number  
of options
Weighted 
average 
exercise  
price (£)
At 1 July 223,664 12.86 231,472 12 .85
Granted in the year 54,837 14.00 96,466 12 .37
Forfeited in the year (21,118)  12.79 (67,673)  13 .39
Exercised in the year (31,494)  11.60 (36,601)  10 .48
     
At 30 June 225,889 13.32 223,664 12 .86
     
The number of share options outstanding at 30 June 2016 was as follows:
Scheme year (grant date)
Exercise  
price (p)
V esting  
period
2016
Number  
of options
2015
Number  
of options
2012 1,054 .0 2015 – 3,922
2013 1,172 .0 2016 920 30,656
2014 1,386 .0 2017 85,153 92,620
2015 1,237 .0 2018 84,979 96,466
2016 1,400 .0 2019 54,837 –
      
All years 225,889 223,664
      
30. Lease commitments
The group leases various office premises under non-cancellable operating lease arrangements . The future aggregate 
minimum lease payments under these leases are as follows:
2016
£’000
2015
£’000
Within one year 1,966 1,234
Second to fifth years inclusive 4,469 5,892
After five years – 1
     60  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
31. Discretionary funds under management
The group holds client money and assets on behalf of clients in accordance with the client money rules of the Financial 
Conduct Authority . Such money and the corresponding liabilities to clients are not shown in the Consolidated Statement of 
Financial Position as the group is not beneficially entitled thereto . The total market value of client money and assets held is 
shown below:
2016
£’000
2015
£’000
Client money bank accounts 773,899 544,855
Client assets under management 7,528,077 6,868,145
    
Total client funds under management 8,301,976 7,413,000
    
32. Financial risk management
The group has identified the financial risks arising from its activities and has established policies and procedures as part of a 
formal structure for managing risk, including establishing risk lines, reporting lines, mandates and other control procedures . 
The structure is reviewed regularly . The group does not use derivative financial instruments for risk management purposes .
a) Liquidity risk
Liquidity risk is the risk that the group is unable to meet its payment obligations associated with its financial liabilities when 
they fall due .
The primary objective of the group’s treasury policy is to manage short-term liquidity requirements and to ensure that the 
group maintains a surplus of immediately realisable assets over its liabilities, such that all known and potential cash 
obligations can be met .
The table below shows the cash inflows and outflows from the group under non-derivative financial assets and liabilities, 
together with cash and bank balances available on demand .
At 30 June 2016
On demand
£’000
Not more than 
3 months
£’000
After  
3 months but 
not more than 
1 year
£’000
After 1 year 
but not more 
than 6 years
£’000
Financial 
assets with 
no fixed 
repayment 
date
£’000
Total
£’000
Cash flows from financial assets
Available for sale financial assets – – – – 1,715 1,715
Financial assets at fair value through  
 profit or loss – – – – 1,000 1,000
Cash and balances at bank 19,478 – – – – 19,478
Trade receivables – 5,939 – – – 5,939
Other receivables – 7,028 133 – – 7,161
       
19,478 12,967 133 – 2,715 35,293
Cash flows from financial liabilities
Trade payables – 4,870 – – – 4,870
Other financial liabilities – 13,182 2,314 5,874 – 21,370
       
– 18,052 2,314 5,874 – 26,240
       
Net liquidity gap 19,478 (5,085)  (2,181)  (5,874)  2,715 9,053
          Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  61
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
32. Financial risk management continued
a) Liquidity risk continued
At 30 June 2015
On demand
£’000
Not more than 
3 months
£’000
After 
 3 months but 
not more than 
1 year
£’000
After 1 year 
but not more 
than 6 years
£’000
Financial 
assets with 
no fixed 
repayment 
date
£’000
Total
£’000
Cash flows from financial assets
Available for sale financial assets – – – – 1,532 1,532
Financial assets at fair value through  
 profit or loss – – – – 3 3
Cash and balances at bank 19,274 – – – – 19,274
Trade receivables – 5,854 – – – 5,854
Other receivables – 9,936 122 – – 10,058
       
19,274 15,790 122 – 1,535 36,721
Cash flows from financial liabilities
Trade payables – 2,854 – – – 2,854
Other financial liabilities – 12,331 4,602 9,537 – 26,470
       
– 15,185 4,602 9,537 – 29,324
       
Net liquidity gap 19,274 605 (4,480)  (9,537)  1,535 7,397
       
b) Market risk 
Interest rate risk
The group may elect to invest surplus cash balances in short-term cash deposits with maturity dates not exceeding three 
months . Consequently, the group has a limited exposure to interest rate risk due to fluctuations in the prevailing level of 
market interest rates .
A 1% fall in the average monthly interest rate receivable on the group’s cash and cash equivalents would have the impact of 
reducing interest receivable and therefore profit before taxation by £195,000 (2015: £190,000) . An increase of 1% would have 
an equal and opposite effect .
Foreign exchange risk
The group does not have any material exposure to transactional foreign currency risk and therefore no analysis of foreign 
exchange risk is provided .
Price risk
Price risk is the risk that the fair value of the future cash flows from financial instruments will fluctuate due to changes in 
market prices (other than those arising from interest rate risk or currency risk) . The group is exposed to price risk through its 
holdings of equity securities and other financial assets, which are measured at fair value in the Consolidated Statement of 
Financial Position (notes 16 and 20) . A 1% fall in the value of these financial instruments would have the impact of reducing 
total comprehensive income by £27 ,000 (2015: £15,000) and profit before tax by £nil (2015: £nil) . An increase of 1% would 
have an equal and opposite effect .
c) Credit risk
The group may elect to invest surplus cash balances in highly liquid money market instruments with maturity dates not 
exceeding three months . The difference between the fair value and the net book value of these instruments is not material . 
To reduce the risk of a counterparty default, the group deposits the rest of its funds in approved, high quality banks . At 30 
June 2016 there was no significant concentration of credit risk in any particular counterparty (2015: none) .
Assets exposed to credit risk recognised on the Consolidated Statement of Financial Position total £19,478,000 (2015: 
£19,274,000), being the group’s total cash and cash equivalents .
a) Liquidity risk 62  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
32. Financial risk management continued
c) Credit risk continued
Trade receivables with a carrying amount of £5,939,000 (2015: £5,854,000) are neither past due nor impaired . Trade 
receivables have no external credit rating as they relate to individual clients, although the value of investments held in each 
individual client’s portfolio is always in excess of the total value of the receivable . All trade receivables fall due within three 
months (2015: all) .
33. Capital management 
Capital is defined as the total of share capital, share premium, retained earnings and other reserves of the Company . Total 
capital at 30 June 2016 was £83,008,000 (2015: £74,164,000) . Regulatory capital is derived from the group Internal Capital 
Adequacy Assessment Process (ICAAP), which is a requirement of the Capital Requirements Directive . The ICAAP draws on 
the group’s risk management process which is embedded within the individual businesses, function heads and executive 
committees within the group .
The group’s objectives when managing capital are to comply with the capital requirements set by the Financial Conduct 
Authority, to safeguard the group’s ability to continue as a going concern so that it can continue to provide returns for 
shareholders and benefits for other stakeholders and to maintain a strong capital base to support the development of the 
business .
Capital adequacy and the use of regulatory capital are monitored daily by the group’s management . The group’s 2016 ICAAP 
was approved in August 2016 . There have been no capital requirement breaches during the year . Brooks Macdonald Group 
plc’s Pillar III disclosure is presented on our website at www . brooksmacdonald . com .
34. Guarantees and contingent liabilities
Brooks Macdonald Asset Management Limited, a subsidiary company of the group, has an agreement with the Royal Bank of 
Scotland plc to guarantee settlement for trading with CREST stock on behalf of clients . The group holds client assets to fund 
such trading activity .
Additional levies by the Financial Services Compensation Scheme may give rise to further obligations based on the group’s 
income in the current or previous years . Nevertheless, the ultimate cost to the group of these levies remains uncertain and is 
dependent upon future claims resulting from institutional failures .
35. Related party transactions
Certain directors have taken advantage of the group’s interest-free season ticket loan facility which is available to all 
employees . The directors who have such loans are as follows:
Loan balance Maximum amount
2016
£’000
2015
£’000
2016
£’000
2015
£’000
S J Jackson 5 5 10 10
      
c) Credit risk   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  63
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
35. Related party transactions continued
Transactions between the Company and its subsidiaries, which are related parties, are eliminated on consolidation . The 
Company’s individual financial statements include the amounts attributable to subsidiaries . These amounts are disclosed in 
aggregate in the relevant company financial statements and in detail in the following table: 
Amounts owed  
by related parties
Amounts owed  
to related parties
2016
£’000
2015
£’000
2016
£’000
2015
£’000
Brooks Macdonald Funds Limited 1,252 1,126 – –
Braemar Facilities Management Limited 5 2 – –
Braemar Estates (Residential) Limited – 42 81 –
North Row Capital LLP 6 2 – –
Levitas Investment Management Services Limited 9 – – –
Braemar Group Limited 661 655 – –
Brooks Macdonald Financial Consulting Limited – 259 475 –
Brooks Macdonald Asset Management Limited – – 9,456 7,553
Brooks Macdonald Nominees Limited – – 2,583 2,583
     
All of the above amounts are interest-free and, with the exception of the subordinated loan to Braemar Group Limited, are 
repayable on demand .
The group manages a number of collective investment funds that are considered related parties . Available for sale financial 
assets include an investment of 1,426,793 . 64 class B ordinary shares in Braemar Group PCC Limited Student Accommodation 
Cell (note 16) . Financial assets at fair value through profit or loss include an investment of 563,689 . 4025 class A units in the 
IFSL Brooks Macdonald Balanced Fund made during the year (note 20) . These transactions were conducted on an arm’s 
length basis at market value .
The group holds a 60% interest in North Row Capital LLP, a joint venture, details of which are given in note 17 .
36. Interest in unconsolidated structured entities 
Structured entities are those entities that have been designed so that voting or similar rights are not the dominant factor in 
deciding who has control, such as when any voting rights relate to administrative tasks only, or when the relevant activities 
are directed by means of contractual arrangements . The group’s interests in consolidated and unconsolidated structured 
entities are described below .
The only consolidated structured entity is the Employee Benefit Trust (‘EBT’), details of which are given in note 27 . 64  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the consolidated financial statements
for the year ended 30 June 2016 | continued
36. Interest in unconsolidated structured entities  continued
The group has interests in structured entities as a result of contractual arrangements arising from the management of assets 
on behalf of its clients . Assets under management within the Funds and property management segment include those 
managed within structured entities . These structured entities consist of unitised vehicles such as Open Ended Investment 
Companies (OEICs) which entitle investors to a percentage of the vehicle’s net asset value . The structured entities are 
financed by the purchase of units or shares by investors . As fund manager, the group does not guarantee returns on its funds 
or commit to financially support its funds . Where external finance is raised, the group does not provide a guarantee for the 
repayment of any borrowings . The business activity of all structured entities, in which the group has an interest, is the 
management of assets in order to maximise investment returns for investors from capital appreciation and/or investment 
income . The group earns a management fee from its structured entities, based on a percentage of the entity’s net asset value . 
The main risk the group faces from its interest in FUM managed on behalf of external investors is the loss of fee income as a 
result of the withdrawal of funds by clients . Outflows from funds are dependent on market sentiment, asset performance and 
investor considerations . The assets under management of unconsolidated structured entities total £625m (2015: £398m) . 
Included in revenue on the consolidated statement of comprehensive income is management fee income of £3,027 ,000 
(2015: £1,980,000) from unconsolidated structured entities managed by the group . 
37 . Events since the end of the year
The group disposed of its entire holding of GLIF zero dividend preference shares in July 2016 for proceeds of £735,000, 
representing a total realised loss on disposal of £15,000 .
The sale of the underlying property portfolio of the Student Accommodation Fund completed on 1 July 2016 and the listing 
of the cell’s ordinary shares on the Channel Islands Securities Exchange was cancelled on 5 July 2016 . The final net asset 
value of the fund had not been determined at the date of signing these financial statements but is expected to available by the 
end of September 2016, with final payment of the redemption monies anticipated in October 2016 .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  65
Independent auditors’ report
to the members of Brooks Macdonald Group plc 
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BROOKS MACDONALD GROUP PLC
 
Report on the parent company 
financial statements
Our opinion
In our opinion, Brooks Macdonald 
Group plc’s parent company financial 
statements (the ‘financial statements’):
• give a true and fair view of the state 
of the parent company’s affairs as at 
30 June 2016 and of its cash flows 
for the year then ended;
• have been properly prepared in 
accordance with International 
Financial Reporting Standards 
(‘IFRSs’) as adopted by the European 
Union and as applied in accordance 
with the provisions of the 
Companies Act 2006; and
• have been prepared in accordance 
with the requirements of the 
Companies Act 2006 .
What we have audited
The financial statements, included 
within the Annual Report & Accounts 
(the ‘Annual Report’), comprise:
• the Company Statement of Financial 
Position as at 30 June 2016;
• the Company Statement of Cash 
Flows for the year then ended;
• the Company Statement of Changes 
in Equity for the year then ended; 
and
• the notes to the financial statements, 
which include a summary of 
significant accounting policies and 
other explanatory information .
The financial reporting framework 
that has been applied in the 
preparation of the financial 
statements is IFRSs as adopted by 
the European Union, and applicable 
law, and as applied in accordance with 
the provisions of the Companies 
Act 2006 .
In applying the financial reporting 
framework, the directors have made a 
number of subjective judgements, for 
example in respect of significant 
accounting estimates . In making such 
estimates, they have made 
assumptions and considered future 
events .
Opinion on other matter 
prescribed by the Companies 
Act 2006
In our opinion, the information given 
in the Strategic Report and the Report 
of the Directors for the financial year 
for which the financial statements are 
prepared is consistent with the 
financial statements .
Other matters on which we are 
required to report by exception
Adequacy of information and 
explanations received
Under the Companies Act 2006 we are 
required to report to you if, in our 
opinion:
• we have not received all the 
information and explanations we 
require for our audit; or
• adequate accounting records have 
not been kept by the parent 
company, or returns adequate for 
our audit have not been received 
from branches not visited by us; or
• the financial statements are not in 
agreement with the accounting 
records and returns .
We have no exceptions to report 
arising from this responsibility .
Directors’ remuneration
Under the Companies Act 2006 we are 
required to report to you if, in our 
opinion, certain disclosures of 
directors’ remuneration specified by 
law are not made . We have no 
exceptions to report arising from this 
responsibility . 
Responsibilities for the 
financial statements and 
the audit
Our responsibilities and those  
of the directors
As explained more fully in the 
Statement of Directors’ 
Responsibilities set out on page 22, 
the directors are responsible for the 
preparation of the financial 
statements and for being satisfied that 
they give a true and fair view .
Our responsibility is to audit and 
express an opinion on the financial 
statements in accordance with 
applicable law and International 
Standards on Auditing (UK and 
Ireland) (‘ISAs (UK & Ireland)’) . Those 
standards require us to comply with 
the Auditing Practices Board’s Ethical 
Standards for Auditors .
This report, including the opinions, 
has been prepared for and only for the 
parent company’s members as a body 
in accordance with Chapter 3 of Part 
16 of the Companies Act 2006 and for 
no other purpose . We do not, in giving 
these opinions, accept or assume 
responsibility for any other purpose 
or to any other person to whom this 
report is shown or into whose hands it 
may come save where expressly 
agreed by our prior consent in writing .
What an audit of financial  statements 
involves
We conducted our audit in 
accordance with ISAs (UK & Ireland) . 
An audit involves obtaining evidence 
about the amounts and disclosures in 
the financial statements sufficient to 
give reasonable assurance that the 
financial statements are free from 
material misstatement, whether 
caused by fraud or error . This includes 
an assessment of: 
• whether the accounting policies are 
appropriate to the parent company’s 
circumstances and have been 
consistently applied and adequately 
disclosed; 
• the reasonableness of significant 
accounting estimates made by the 
directors; and 
• the overall presentation of the 
financial statements .  66  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Independent auditors’ report
to the members of Brooks Macdonald Group plc | continued
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
 
We primarily focus our work in these 
areas by assessing the directors’ 
judgements against available 
evidence, forming our own 
judgements, and evaluating the 
disclosures in the financial 
statements .
We test and examine information, 
using sampling and other auditing 
techniques, to the extent we consider 
necessary to provide a reasonable 
basis for us to draw conclusions . We 
obtain audit evidence through testing 
the effectiveness of controls, 
substantive procedures or a 
combination of both .
In addition, we read all the financial 
and non-financial information in the 
Annual Report to identify material 
inconsistencies with the audited 
financial statements and to identify 
any information that is apparently 
materially incorrect based on, or 
materially inconsistent with, the 
knowledge acquired by us in the 
course of performing the audit . If we 
become aware of any apparent 
material misstatements or 
inconsistencies we consider the 
implications for our report .
Other matter
We have reported separately on the 
group financial statements of Brooks 
Macdonald Group plc for the year 
ended 30 June 2016 .
Natasha McMillan (Senior Statutory 
Auditor) for and on behalf of 
PricewaterhouseCoopers LLP 
Chartered Accountants 
and Statutory Auditors
London
20 September 2016
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BROOKS MACDONALD GROUP PLC |
 CONTINUED
Responsibilities for the 
financial statements and  
the audit continued
What an audit of financial statements 
involves continued   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  67
Company statement of financial position
as at 30 June 2016 
Note
2016
£’000
2015
£’000
2014
£’000
Assets
Non-current assets
Investment in subsidiaries 42 65,610 64,462 51,883
Available for sale financial assets 43 971 782 1,432
        
Total non-current assets 66,581 65,244 53,315
Current assets
Trade and other receivables 44 2,121 1,846 6,730
Financial assets at fair value through profit or loss 45 994 – –
Cash and cash equivalents 1,831 526 5,254
        
Total current assets 4,946 2,372 11,984
        
Total assets 71,527 67,616 65,299
        
Liabilities 
Non-current liabilities 
Deferred consideration 46 (5,290)  (9,442)  –
        
Total non-current liabilities (5,290)  (9,442)  –
Current liabilities
Trade and other payables 47 (16,429)  (13,051)  (27,751)  
        
Total current liabilities (16,429)  (13,051)  (27,751)  
         
Net assets 49,808 45,123 37,548
        
Equity
Share capital 49 137 136 135
Share premium account 49 35,997 35,600 35,147
Share option reserve 4,767 4,404 4,202
Revaluation reserve – – (68)  
Retained earnings 8,907 4,983 (1,868)  
        
Total equity 49,808 45,123 37,548
        
The company financial statements were approved by the Board of Directors and authorised for issue on 20 September 2016, 
signed on their behalf by:
 
C A J Macdonald S J Jackson
Chief Executive Finance Director
Company registration number: 4402058
The accompanying notes on pages 70 to 79 form an integral part of the company financial statements .
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
  68  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Company statement of changes in equity 
as at 30 June 2016 
COMPANY STATEMENT OF CHANGES IN EQUITY 
AS AT 30 JUNE 2016
 
Share capital
£’000
Share 
premium
account
£’000
Other 
reserves
£’000
Share option 
reserve
£’000
Retained 
earnings
£’000
Total
£’000
Balance at 1 July 2014 135 35,147 (68) 4,202 (1,868)  37,548
       
Comprehensive income
Profit for the year (note 40) – – – – 10,352 10,352
Other comprehensive income:
Revaluation reserve recycled – – 68 – – 68
       
Total comprehensive income – – 68 – 10,352 10,420
Transactions with owners
Issue of ordinary shares 1 453 – – – 454
Share based payments – – – 1,315 – 1,315
Share based payments transfer – – – (1,113)  1,113 –
Purchase of own shares by employee 
benefit trust – – – – (742)  (742)  
Dividends paid (note 41) – – – – (3,872)  (3,872)  
       
Total transactions with owners 1 453 – 202 (3,501)  (2,845)  
       
Balance at 30 June 2015 136 35,600 – 4,404 4,983 45,123
       
Comprehensive income
Profit for the year (note 40) – – – – 8,859 8,859
       
Total comprehensive income – – – – 8,859 8,859
Transactions with owners
Issue of ordinary shares 1 397 – – – 398
Share-based payments – – – 943 – 943
Share based payments transfer – – – (580)  580 –
Purchase of own shares by employee 
benefit trust – – – – (1,143)  (1,143)  
Dividends paid (note 41) – – – – (4,372)  (4,372)  
       
Total transactions with owners 1 397 – 363 (4,935)  (4,174)  
       
Balance at 30 June 2016 137 35,997 – 4,767 8,907 49,808
       
The accompanying notes on pages 70 to 79 form an integral part of the company financial statements .
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
    Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  69
Company statement of cash flows
for the year ended 30 June 2016 
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
 
Note 
2016
£’000
2015
£’000
Cash flow from operating activities
Cash generated from operations 48 9,419 10,696
      
Net cash generated from operating activities 9,419 10,696
Cash flows from investing activities
Investment in subsidiaries 42 (250)  (11,264)  
Purchase of available for sale financial assets 43 (500)  –
Purchase of financial assets at fair value through profit and loss (1,000)  –
Deferred consideration paid (1,247)  –
      
Net cash used in investing activities (2,997)  (11,264)  
Cash flows from financing activities
Proceeds of issue of shares 398 454
Purchase of own shares by employee benefit trust (1,143)  (742)  
Dividends paid to shareholders 41 (4,372)  (3,872)  
      
Net cash used in financing activities (5,117)  (4,160)  
      
Net increase/(decrease) in cash and cash equivalents 1,305 (4,728)  
Cash and cash equivalents at beginning of year 526 5,254
      
Cash and cash equivalents at end of year 1,831 526
        
The accompanying notes on pages 70 to 79 form an integral part of the company financial statements . 70  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the company financial statements
for the year ended 30 June 2016 
38. Principal accounting policies
General information
Brooks Macdonald Group plc (the ‘Company’) is the parent company of a group of companies . The Company is a public limited 
company, incorporated and domiciled in the United Kingdom under the Companies Act 2006 and listed on AIM . The address 
of its registered office is 72 Welbeck Street, London, W1G 0AY .
Statement of compliance 
The individual financial statements of the Company are presented as required by the Companies Act 2006 and have been 
prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union . These 
are the Company’s first financial statements prepared in accordance with IFRS and IFRS 1 “First time adoption of 
International Financial Reporting Standards” has been applied . An explanation of how the transition to IFRS has affected the 
reported financial position, financial performance and cash flows of the Company is provided in note 53 .
Developments in reporting standards and interpretations 
Developments in reporting standards and interpretations are set out in note 2 to the consolidated financial statements . 
The principal accounting policies adopted are set out below:
a) Basis of preparation
The financial statements have been prepared on the historical cost basis, except for the revaluation of investments such that 
they are measured at their fair value .
At the time of approving the financial statements, the directors have a reasonable expectation that the Company has 
adequate resources to continue in operational existence for the foreseeable future . Accordingly, they continue to adopt the 
going concern basis in preparing the financial statements . As permitted by Section 408 of the Companies Act 2006, the 
company has elected not to present its own Statement of Comprehensive Income for the financial year .
b) Investments in subsidiary companies
Where the Company has investments in subsidiary companies; whereby one entity (the ‘subsidiary’) is controlled by another 
entity (the ‘parent’), the investments are stated at cost less, where appropriate, provision for impairment . The carrying values 
of investments in subsidiary companies are reviewed annually to determine whether any indicator of impairment exists .
c) Retirement benefit costs
Contributions in respect of the group’s defined contribution pension scheme are recognised in the Income Statement as they 
fall due .
d) Employee Benefit Trust
Where the Company holds its own equity shares through an Employee Benefit Trust these shares are shown as a reduction in 
shareholders’ equity . Any consideration paid or received for the purchase or sale of these shares is shown as a reduction in 
the reconciliation of movements in shareholders’ funds . No gain or loss is recognised in the Income Statement on the 
purchase, sale, issue or cancellation of these shares .
e) Other investments
Other quoted investments are designated as available for sale and re-valued each reporting period to their fair value 
according to the most recently available market information .
Accounting policies in relation to impairment, dividend income, interest income, operating leases, foreign currency, taxation, 
cash and cash equivalents and share based payments are set out in note 2 to the consolidated financial statements . 
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  71
Notes to the company financial statements
for the year ended 30 June 2016 | continued
39. Critical accounting judgements and key sources of estimation and uncertainty 
The critical accounting judgement and key source of estimation and uncertainty arise from the company’s acquisition of 
Levitas Investment Management Services Limited in July 2014 . This is described in note 2(d) to the consolidated financial 
statements .
40. Profit for the year
Brooks Macdonald Group plc reported profit after tax for year ended 30 June 2016 of £8,859,000 (2015: £10,352,000) . 
Auditors’ remuneration is disclosed in note 7 of the consolidated financial statements . The average monthly number of 
employees during the year was 10 (2015: 10) . Directors’ emoluments are set out in note 8 of the consolidated financial 
statements .
41. Dividends
Details of the Company’s dividends paid and proposed, subject to approval at the annual general meeting, are set out in note 
12 of the consolidated financial statements .
42. Investment in subsidiaries and related undertakings
Net book value
Group 
undertakings
£’000
At 1 July 2014 51,883
Additions:
– Acquisition of subsidiary 11,264
– Capital contribution relating to share-based payments 1,315
   
At 30 June 2015 64,462
Additions:
– Investment in subsidiary 250
– Capital contribution relating to share-based payments 898
   
At 30 June 2016 65,610
   
In the year ended 30 June 2016, the Company invested £250,000 in the ordinary share capital of Brooks Macdonald 
Retirement Services (International) Limited . In the year ended 30 June 2015 the Company acquired 100% of the share capital 
of Levitas at a cost of £11,264,000 . The capital contribution relating to share-based payments reflects the share options 
granted by the Company to employees of its subsidiary undertakings .
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016 | 
 C O NT I N U E D 72  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the company financial statements
for the year ended 30 June 2016 | continued
42. Investment in subsidiaries and related undertakings continued
Details of the Company’s subsidiary undertakings at 30 June 2016, all of which were 100% owned and included in the 
consolidated financial statements, are provided below:
Company
Type of shares  
and par value
Country of 
incorporation
Nature of  
business
Braemar Estates (Mortgages & Finance) Limited Ordinary £1 UK Dormant
Braemar Estates (Residential) Limited Ordinary £1 UK Property management
Braemar Facilities Management Limited Ordinary £1 UK Property management
Braemar Group Limited Ordinary 1p UK Investment management
Brooks Macdonald Asset Management Limited Ordinary £1 UK Investment management
Brooks Macdonald Asset Management 
(International) Limited
Ordinary 1p &
Preference £1 Channel Islands Investment management
Brooks Macdonald Asset Management 
(Tunbridge Wells) Limited Ordinary £1 UK Non-trading
Brooks Macdonald Financial Consulting Limited Ordinary 5p UK Financial consulting
Brooks Macdonald Funds Limited Ordinary £1 UK Fund management
Brooks Macdonald Investment Services Limited Ordinary £1 UK Dormant
Brooks Macdonald Nominees Limited Ordinary £1 UK Non-trading
Brooks Macdonald Retirement Services 
(International) Limited Ordinary £1 Channel Islands Retirement planning
Brooks Macdonald Tax Services Limited Ordinary £1 UK Dormant
DPZ Capital Limited* Ordinary £1 Channel Islands Investment management
DPZ Nominees Limited Ordinary £1 Channel Islands Non-trading
JGHP Limited Ordinary £1 UK Non-trading
JPAM Limited Ordinary £1 UK Non-trading
Levitas Investment Management Services Limited Ordinary £1 UK Fund Sponsor 
Long Income REIT Limited Ordinary 50p UK Investment vehicle
Secure Nominees Limited Ordinary £1 Channel Islands Non-trading
UK Farming Limited Ordinary 50p UK Agricultural land investment
* DPZ Capital Limited ceased to exist as a separate entity following a legal merger with Brooks Macdonald Asset Management (International) Limited in December 2015 .
Associated undertakings of the Company and its subsidiaries also have a 60% interest in a joint venture as shown below:
Entity Type of interest
Country of 
incorporation Nature of business
North Row Capital LLP Members’ capital UK Investment research
       Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  73
Notes to the company financial statements
for the year ended 30 June 2016 | continued
43. Available for sale financial assets
2016
£’000
2015
£’000
2014
£’000
At 1 July 782 1,432 1,582
Additions 500 – –
Revaluation – – (150)  
Accumulated loss on revaluation reserve recycled – 68 –
Impairment loss (311)  (718)  –
       
At 30 June 971 782 1,432
      
The Company holds investments of 1,426,793 . 64 class B ordinary shares, representing an interest of 10 . 88%, in Braemar 
Group PCC Limited Student Accommodation Cell (‘Student Accommodation Fund’); and 500,000 redeemable preference 
shares in an unlisted company incorporated in the UK .
The Student Accommodation Fund is promoted by Brooks Macdonald Funds Limited, a subsidiary of the Company . The 
shareholders of the fund approved a resolution in May 2016 to sell the underlying property portfolio of the fund to a third 
party . The shares will subsequently be compulsorily redeemed out of the remaining net assets of the fund following the sale, 
although this process had not been completed at 30 June 2016 . The Company has therefore estimated the fair value of the 
group’s investment at 30 June 2016 at £471,000 (2015: £782,000) based on the most recent information made available to 
investors about the consideration payable for the assets of the fund and the expected net asset value per share after adjusting 
for the costs associated with the sale . An impairment loss of £311,000 (2015: £718,000) was recognised in the Income 
Statement during the year, reflecting this perceived permanent diminution of value of the Company’s shareholding .
During the year, the Company acquired 500,000 redeemable preference shares in an unlisted company with a par value of £1 
at a cost of £500,000 . The preference shares are redeemable at par any time after five years from the date of issue (8 April 
2016) and bear an entitlement to a fixed preferential dividend of 8% per annum of the nominal value of the shares . The fair 
value of the preference shares has been estimated at £500,000 based on a discounted cash flow analysis .
An analysis of these financial instruments and the level within the fair value hierarchy into which they are categorised is 
provided within note 16 of the consolidated financial statements .
44. Trade and other receivables 
2016
£’000
2015
£’000
2014
£’000
Amounts owed by subsidiary undertakings 1,934 1,729 6,461
Other receivables 25 71 269
Prepayments and accrued income 162 46 –
      
At 30 June 2,121 1,846 6,730
      
Amounts owed by subsidiary companies are unsecured, interest-free and repayable on demand . 74  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the company financial statements
for the year ended 30 June 2016 | continued
45. Financial assets at fair value through profit or loss
2016
£’000
2015
£’000
2014
£’000
At beginning of year – – –
Additions 1,000 – –
Loss from changes in fair value (6)  – –
       
At 30 June 994 – –
      
These investments are classified as Level 1 as defined in note 16 to the consolidated financial statements .
46. Deferred consideration
Deferred consideration is split between non-current liabilities and other payables within current liabilities (note 47) to the 
extent that it is due for payment within one year of the reporting date . It reflects the directors’ best estimate of amounts 
payable in the future in respect of certain client relationships and subsidiary undertakings that were acquired by the group . 
Deferred consideration is measured at its fair value based on discounted expected future cash flows . The amount outstanding 
at 30 June 2016 of £5,290,000 (2015: £9,442,000) related exclusively to amounts payable in respect of the acquisition of Levitas .
47 . Trade and other payables 
2016
£’000
2015
£’000
2014
£’000
Trade payables 144 36 27
Amounts owed to subsidiary undertakings 12,596 9,779 21,307
Other payables 1,641 1,580 4,705
Accruals and deferred income 2,048 1,656 1,712
      
At 30 June 16,429 13,051 27,751
      
Amounts owed to subsidiary companies are unsecured, interest-free and are repayable on demand . Included in other 
payables is £1,641,000 (2015: £1,580,000; 2014: nil) which is the directors’ best estimate of the deferred consideration payable 
in respect of the client relationships and subsidiary undertakings that were acquired by the company in 2015 .
48. Reconciliation of operating profit to net cash inflow from operating activities
2016
£’000
2015
£’000
Operating profit 8,859 10,352
Adjustments for:
Impairment of available for sale financial assets 311 718
Changes in fair value of financial assets at fair value through profit or loss 6 –
Changes in fair value of deferred consideration (3,343)  –
(Increase)/decrease in receivables (275)  4,884
Increase/(decrease) in payables 3,816 (14,700)  
Share based payments 45 –
Increase in non-current liabilities – 9,442
    
Net cash inflow from operating activities 9,419 10,696
       Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  75
Notes to the company financial statements
for the year ended 30 June 2016 | continued
49. Share capital and share premium account
The movements in share capital and share premium during the year were as follows:
Number of 
shares
Share
capital
£’000
Share 
premium 
account
£’000
Total
£’000
At 1 July 2013 13,347,974 133 31,867 32,000
Shares issued 244,201 2 3,280 3,282
     
At 30 June 2014 13,592,175 135 35,147 35,282
Shares issued 68,045 1 453 454
     
At 30 June 2015 13,660,220 136 35,600 35,736
Shares issued 48,950 1 397 398
     
At 30 June 2016 13,709,170 137 35,997 36,134
     
The total number of ordinary shares, issued and fully paid at 30 June 2016, was 13,709,170 (2015: 13,660,220; 2014: 
13,592,175) with a par value of 1p per share . Excluding 228,208 (2015: 207 ,532; 2014: 249,696) treasury shares held by the 
EBT, the Company had 13,480,962 (2015: 13,452,688; 2014: 13,342,479) ordinary 1p shares in issue as at 30 June 2016 . Details 
of the shares issued are given in note 27 of the consolidated financial statements .
Long Term Incentive Scheme
The group established an Employee Benefit Trust (‘EBT’) on 3 December 2010 to acquire ordinary shares in the Company to 
satisfy awards under the group’s Long Term Incentive Scheme (‘LTIS’) and other share-based payment schemes (note 29) . All 
finance and administration expenses connected with the Trust are charged to the Consolidated Statement of Comprehensive 
Income as and when they accrue . The Trust has waived its rights to dividends .
During the year, the Trust received instructions to exercise 45,794 (2015: 95,215; 2014: 11,376) options . The cost of the shares 
released on exercise of these options amounted to £558,000 (2015: £1,113,000; 2014: £109,000) . At 30 June 2016, the number 
of shares held by the Trust was 228,208 (2015: 207 ,532; 2014: 249,696) with a market value of £3,775,000 (2015: £3,668,000; 
2014: £3,906,000) acquired for a total consideration of £3,376,000 (2015: £2,803,000; 2014: £3,168,000) . These shares are 
presented as treasury shares in the group financial statements and their cost is deducted from retained earnings within 
shareholders’ equity .
The Company has made annual awards under the LTIS to executive directors and other senior executives . The conditional 
awards, which vest three years after the grant date, are subject to the satisfaction of specified performance criteria, measured 
over a three year performance period . All such conditional awards are made at the discretion of the Remuneration Committee .
50. Lease commitments
The Company leases office premises under non-cancellable operating lease arrangements . The future aggregate minimum 
lease payments under these leases are as follows:
2016
£’000
2015
£’000
Within one year 1,745 1,012
Second to fifth years inclusive 4,445 5,315
After five years – –
     76  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the company financial statements
for the year ended 30 June 2016 | continued
51. Related party transactions
The remuneration of key personnel of the Company, defined as the Company’s directors, is set out below:
2016
£’000
2015
£’000
Short-term employee benefits 2,466 2,434
Post-employment benefits 25 25
Share-based payments 445 346
    
Total compensation 2,936 2,805
    
Dividends totalling £562,000 (2015: £564,000) were paid in the year in respect of ordinary shares held by key management 
personnel and their close family members .
During the year, the Company entered into the following transactions with its subsidiaries:
2016
£’000
2015
£’000
Dividends received:
– Brooks Macdonald Asset Management Limited 9,759 13,589
– Brooks Macdonald Asset Management (International) Limited – 865
    
Total transactions with subsidiaries 9,759 14,454
    
The Company’s balances with fellow group companies at 30 June 2016 are set out in note 35 to the consolidated financial 
statements . One director took advantage of the Group’s interest-free season ticket loan facility, details of which are disclosed 
in the same note . All transactions with fellow group companies are carried out at arm’s length and all outstanding balances 
are to be settled in cash . None of the balances are secured and no provisions have been made for doubtful debts in respect of 
any of the amounts due from fellow group companies .
52. Financial risk management objectives and policies 
The financial risk management objectives and policies applied by the Company are in line with those of the group as 
disclosed in note 32 to the consolidated financial statements .
53. Explanation of transition to IFRS
As stated in note 38, these are the first set of financial statements prepared in accordance with IFRS . The accounting policies 
set out in note 38 have been applied in preparing the financial statements for the year ended 30 June 2016, the comparative 
information presented in these financial statements for the year ended 30 June 2015 and in preparation of an opening IFRS 
Statement of Financial Position at 30 June 2014 (the opening position on 1 July 2014, the date of the transition to IFRS) . In 
preparing its opening IFRS Statement of Financial Position, the Company has adjusted amounts reported previously in 
financial statements prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP), see detailed 
workings on pages 78 and 79 . An explanation of how the transition from previous UK GAAP to IFRS has affected the 
Company’s reported financial position from previous UK GAAP to IFRS is set out in the following notes and tables .   Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  77
Notes to the company financial statements
for the year ended 30 June 2016 | continued
53. Explanation of transition to IFRS continued
Transitional arrangements 
IFRS 1 “First time adoption of International Financial Reporting Standards” permits companies adopting IFRS for the first time 
to take certain exemptions from the full requirements of IFRS in the transition period . The Company’s application of the 
optional exemptions is as follows:
Assets and Liabilities measured at the group’s transition date to IFRS
The company has taken advantage of the option given in IFRS 1 to measure its assets and liabilities at the carrying value 
amounts that were included in the group’s consolidated financial statements, based on the group’s transition to IFRS 
on 1 July 2006 .
Investments in subsidiaries 
The Company has elected to recognise all its investments in subsidiaries at their deemed cost, which was the carrying value 
under UK GAAP .
Other Investments 
The Company has elected to classify equity instruments with a carrying value at 1 July 2015 of £782,000 (2014: £1,432,000) 
as available for sale financial assets .
Key impacts of IFRS 
The significant differences between UK GAAP and IFRS which impact on the Company’s reported financial position, financial 
performance and cash flows are set below:
IAS1 and IAS 39 – Presentation of Financial Statements and Financial Instruments: Recognition and Measurement
The Statement of Financial Position and applicable notes have been amended to reflect the presentational disclosures 
required by IAS 1 and IAS 39 .
IAS 39 – Financial Instruments: recognition and measurement
In accordance with IAS 39, the Company has recognised gains or losses on revaluation of available for sale equity securities 
in other comprehensive income .
IAS12 – Income Taxes
IAS 12 requires that deferred tax on equity items is recognised directly in equity . UK GAAP requires that all such deferred tax 
is recognised in the Income Statement . In addition, deferred tax is recognised on available for sale assets under IAS12 . No 
such deferred tax is recognised under UK GAAP . Reported profit after tax for the year ended 30 June 2015 and for 30 June 
2014 has not changed because there was no deferred tax relating to the available for sale asset . Deferred tax assets are only 
recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences 
can be utilised .
IAS 7 – Statement of cash flows 
The Company has prepared its Statement of Cash Flows in accordance with IAS 7 . Under IAS 7 , the Statement of Cash Flows 
shows the movement in cash and cash equivalents, being defined as cash in hand, demand deposits and short term highly 
liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of 
change in value . Under UK GAAP, the Company was exempt from the requirement to prepare a Statement of Cash Flows . 78  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016
Notes to the company financial statements
for the year ended 30 June 2016 | continued
53. Explanation of transition to IFRS continued
Reconciliation of the Statement of Financial Position at 1 July 2014 (date of transition to IFRS)
UK GAAP
1 July 2014
£’000
Presentation 
of financial 
statements
(IAS 1 &  
IAS 39)
£’000
IFRS
1 July 2014
£’000 
Assets
Non-current assets 
Investments 53,315 (53,315)  –
Investment in subsidiaries – 51,883 51,883
Available for sale financial assets – 1,432 1,432
    
Total non-current assets 53,315 – 53,315
Current assets
Amounts owed by group undertakings 6,461 (6,461)  –
Other debtors 269 (269)  –
Trade and other receivables – 6,730 6,730
Cash and cash equivalents 5,254 – 5,254
    
Total current assets 11,984 – 11,984
    
Total assets 65,299 – 65,299
    
Liabilities
Current liabilities 
Trade creditors (27)  27 –
Amounts owed to subsidiary undertakings (21,307)  21,307 –
Accruals (1,712)  1,712 –
Other creditors (4,705)  4,705 –
Trade and other payables – (27,751)  (27,751)  
    
Total current liabilities (27 ,751)  – (27 ,751)  
    
Net assets 37,548 – 37,548
    
Equity 
Share capital 135 – 135
Share premium account 35,147 – 35,147
Share option reserve 4,202 – 4,202
Revaluation reserve (68)  – (68)  
Profit and loss account (1,868)  1,868 –
Retained earnings – (1,868)  (1,868)  
    
Total equity 37,548 – 37,548
       Brooks Macdonald Group plc  |  Annual Report and Accounts 2016  |  79
Notes to the company financial statements
for the year ended 30 June 2016 | continued
53. Explanation of transition to IFRS continued
Reconciliation of the Statement of Financial Position at 30 June 2015
UK GAAP 
30 June 2015
£’000
Presentation 
of financial 
statements
 (IAS 1 &  
IAS 39)
£’000
IFRS 
30 June 2015
£’000 
Assets
Non-current assets 
Investments 65,244 (65,244)  –
Investment in subsidiaries – 64,462 64,462
Available for sale financial assets – 782 782
    
Total non-current assets 65,244 – 65,244
Current assets
Amounts owed by group undertakings 1,729 (1,729)  –
Other debtors 117 (117)  –
Trade and other receivables – 1,846 1,846
Cash and cash equivalents 526 – 526
    
Total current assets 2,372 – 2,372
    
Total assets 67,616 – 67,616
    
Liabilities 
Non-current liabilities 
Deferred consideration (9,442)  – (9,442)  
    
Total non-current liabilities (9,442)  – (9,442)  
Current liabilities 
Trade creditors (36)  36 –
Amounts owed to subsidiary undertakings (9,779)  9,779 –
Accruals (1,656)  1,656 –
Other creditors (1,580)  1,580 –
Trade and other payables – (13,051)  (13,051)  
    
Total current liabilities (13,051)  – (13,051)  
    
Net assets 45,123 – 45,123
    
Equity 
Share capital 136 – 136
Share premium account 35,600 – 35,600
Share option reserve 4,404 – 4,404
Profit and loss account 4,983 (4,983)  –
Retained earnings – 4,983 4,983
    
Total equity 45,123 – 45,123
     Directors
C J Knight Chairman
C A J Macdonald Chief Executive
C R Harris Senior Independent Director
N I Holmes
S J Jackson Group Finance Director
R S Price Non-executive Director
D Seymour-Williams Non-executive Director
A W Shepherd Deputy Chief Executive
R H Spencer
S P Wombwell
Company information
Company Secretary S Broomfield
Company Registration Number 4402058
Registered Office 72 Welbeck Street, London, W1G 0A Y
Website www . brooksmacdonald . com
Directors and advisers
Officers and advisers
Independent auditors
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
Solicitors
Macfarlanes LLP
20 Cursitor Street
London
EC4A 1LT
Principal bankers
The Royal Bank of Scotland plc
280 Bishopsgate 
London
EC2M 4RB
Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Nominated adviser and broker
Peel Hunt LLP
Moor House
120 London Wall
London
EC2Y 5ET
Public relations
MHP Communications Limited
6-11 Agar Street 
London
WC2N 4HN
80  |  Brooks Macdonald Group plc  |  Annual Report and Accounts 2016 Offices
Edinburgh
10 Melville Crescent 
Edinburgh
EH3 7LU
Guernsey
Y orkshire House 
Le Truchot 
St Peter Port 
Guernsey 
GY1 1WD
Hale
Richmond House 
Heath Road 
Hale 
Cheshire 
WA14 2XP
Hampshire
The Long Barn
Dean Estate
Wickham Road
Fareham
Hampshire
PO17 5BN
Jersey
Liberation House
Castle Street
St . Helier
Jersey
JE2 3AT
London
72 Welbeck Street
London
W1G 0A Y
London
John Stow House
18 Bevis Marks
London
EC3A 7JB
Leamington Spa
36 Hamilton Terrace
Holly Walk
Leamington Spa
Warwickshire
CV32 4LY
Manchester
1 Marsden Street
Manchester
M2 1HW
Taunton
4 Heron Gate
Hankridge Way
Taunton
TA1 2LR
Tunbridge Wells
2 Mount Ephraim Road
Tunbridge Wells
Kent
TN1 1EE
York
Howard House
3 St . Mary’s Court
Blossom Street
York
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