Annual Report and Accounts 2012 - London Stock Exchange · 2 ANNUAL REPORT & ACCOUNTS 2012 Adjusted...

Annual Report and Accounts

2012

1ANNUAL REPORT & ACCOUNTS 2012

Contents

Financial Highlights 2

Directors & Advisors 3

Chairman’s Statement 5

Chief Executive’s Review 7

Notice of Meeting 14

Report of the Directors 17

Corporate Governance Statement 30

Independent Auditors’ Report on the Financial Statements 43

Consolidated Income Statement 45

Consolidated Statement of Comprehensive Income 46

Consolidated Balance Sheet 47

Consolidated Cash Flow Statement 48

Consolidated Statement of Changes in Equity 49

Notes to the Group Financial Statements 50

Company Balance Sheet - Irish GAAP 113

Accounting Policies for the Company - Irish GAAP 114

Notes to the Company Balance Sheet - Irish GAAP 117

Group Financial Record (Graphs)

Calendar

Annual General Meeting

26 June 2013

Dividends

Interim 2012 - paid 11 December 2012

Final 2012 - payable 12 July 2013

ANNUAL REPORT & ACCOUNTS 20122

Adjustedmeasures

2012

£’000

Adjustedmeasures

2011Re-presented

£’000

Notes

IFRS2012

£’000

IFRS2011

Re-presented£’000

Revenue 76,153 77,260 76,153 77,260Operating profit 11,824 13,949 6,162 7,989Adjusted earnings 8,406 10,426 1 - -Profit attributable to the owners of parent company - - 1 21,600 10,497Adjusted earnings per ordinary share - in pence 6.70 8.32 1 - -Basic earnings per ordinary share - in pence - - 1 17.22 8.38Dividend per ordinary share - in current pence equivalent

3.95

3.59

2

-

-

Group net cash/(debt) - - 20,591 (9,142)

Notes:

1. Adjusted earnings per share are stated before amortisation of intangible assets, share based payment compensation, exceptional items and discontinued operations.

Reconciliation of adjusted earnings per ordinary share:

Per share pence

Earnings £’000

Re-presented Per share

pence

Re-presented Earnings

£’000

Profit attributable to owners of the parent company 17.22 21,600 8.38 10,497Amortisation of intangible assets 2.66 3,338 2.45 3,066Share based payment compensation 0.23 291 0.34 431Exceptional items 1.51 1,894 0.78 979Discontinued operations (14.92) (18,717) (3.63) (4,547)Adjusted earnings 6.70 8,406 8.32 10,426

2. Dividend per ordinary share is calculated as the sum of the interim dividend per share of 1.65 cent and the 3.19 cent per share to be proposed at the forthcoming Annual General Meeting. The above dividend per ordinary share of 4.84 cent and the comparative have been translated into the current pence equivalent at the 2012 closing euro:GBP exchange rate of 0.8161 for disclosure purposes. The dividend will be declared in Euro with the option for payment in Euro or GBP net of Irish withholding tax.

Financial Highlights

Year ended 31 December 2012

Year ended 31 December 2011


Directors & Advisors

Directors

Colm Barrington(Non-Executive)

Evelyn Bourke(Non-Executive - elected 27 June 2012)

Mark Bourke(Chief Executive)

Aidan Comerford(Executive Director - Finance & Risk)

John Gallagher(Non-Executive Chairman - co-opted 5 February 2013)

Gary Owens(Executive Director - Ireland)

David Paige(Non-Executive - co-opted 12 July 2012)

Robin Phipps(Non-Executive - elected 27 June 2012)

Peter Priestley (Non-Executive)

Cara Ryan(Non-Executive - co-opted 5 February 2013)

Company secretary

Conleth O’Reilly

Trading address

IFG HouseBooterstown HallBooterstownCo. Dublin

Telephone (353-1) 275 2800Fax (353-1) 275 2801E-Mail: [email protected]

Principal bankers

Barclays Bank Ireland plc2 Park PlaceHatch StreetDublin 2

Stockbrokers

Davy Davy House 49 Dawson Street Dublin 2 MacquarieRopemaker Place28 Ropemaker StreetLondon EC2Y 9HD


Group auditors

PricewaterhouseCoopersOne Spencer DockNorth Wall QuayDublin 1

Principal subsidiary company auditors

PricewaterhouseCoopersOne Spencer DockNorth Wall QuayDublin 1

OSKEast Point PlazaEast PointDublin 3

Registered office

IFG Group plcIFG HouseBooterstown HallBooterstownCo. Dublin

Website

www.ifggroup.com

Solicitors

Eversheds O’Donnell Sweeney One Earlsfort CentreEarlsfort TerraceDublin 2

Matheson70 Sir John Rogerson’s QuayDublin 2

Registered in Ireland

No. 21010

Registrars

Computershare Investor Services (Ireland) LimitedHeron HouseCorrig RoadSandyford Industrial EstateDublin 18

Directors & Advisors


IFG Group plc (“IFG” or the “Group”) is pleased to announce results for the year ended 31 December 2012. The Group continues to make good progress towards our strategic goals. 2012 was a year where the Group advanced its shape and strength.

Revenue for the year was £76.2 million, which compares to £77.3 million in the prior year after adjusting for the disposal of the International Segment.

Operating profit for the year was £6.2 million (2011 re-presented: £8.0 million). Profit attributable to the owners of the parent company including the profit from discontinued operations (International Segment) was £21.6 million in 2012, up on the previous year figure of £10.5 million.

The Group delivered basic earnings per share of 17.22 pence in 2012 (including the gain on the disposal of the International Segment) compared to 8.38 pence in 2011. On an adjusted basis, the earnings per share was 6.70 pence (2011 re-presented: 8.32 pence).

RETURNS TO SHAREHOLDERS

On 5 November 2012, the Group announced its proposal to return circa £30.0 million of capital to Shareholders by way of a tender offer. The tender offer price of €1.65 represented a premium of 17.9% to the closing price of €1.40 per ordinary share on 1 November 2012, being the latest practicable date. It represented a premium of 13.9% to the volume weighted average price per ordinary share over the three month period to 1 November 2012. Following shareholder approval and a successful oversubscribed tender process, 22,603,636 shares or 17.87% of the ordinary shares in issue were repurchased and cancelled for a total consideration, before expenses, of approximately €37.3 million.

Having returned £30.0 million to Shareholders in 2012, the Board proposes to increase the dividend per share by 10%. The Board is recommending a final dividend of 3.19 cent per share (current GBP equivalent of 2.60 pence per share). This final dividend, when added to the interim dividend of 1.65 cent paid on 11 December 2012 (current GBP equivalent of 1.35 pence per share), makes a total of 4.84 cent per share (current GBP equivalent of 3.95 pence per share).

Subject to Shareholder approval, the final dividend will be paid on 12 July 2013 to Shareholders on the Register on 28 June 2013.

GOVERNANCE AND MANAGEMENT

The process of Board renewal continued in 2012 with Robin Phipps and David Paige appointed as Non-Executive Directors, both bringing significant UK financial services experience. Also, during 2012, Patrick Joseph Moran signalled his intent to step down from the Board. I was co-opted to the Board and voted as Chairman by my fellow Directors on 5 February 2013 and the Board also welcomed Cara Ryan as a Non-Executive Director on 5 February 2013.

Chairman’s StatementJohn Gallagher

Chairman


In the UK the management team has been reorganised and expanded with Alastair Conway appointed as CEO of James Hay Partnership. He joins us from CoFunds Limited and brings a wealth of experience, particularly in the platform arena. Tim Sargisson has moved to the new role of CEO of IFG Financial Services where his focus will be to grow the businesses in a post-RDR world. Tony Overy, CEO of Saunderson House, continues to lead that business forward.

On behalf of the Board I would like to thank Patrick Joseph Moran sincerely for his contribution to the development of IFG over the past 24 years. Under his Chairmanship the strategy and performance of the business evolved substantially. We wish him well for the future.

STAFF

I express my thanks to all our people for their commitment, dedication and professionalism which is reflected in these results.

John GallagherChairman

Chairman’s Statement


Chief Executive’s ReviewMark Bourke

Chief Executive

Operationally we made good progress in 2012. James Hay Partnership reached its three year target of net growth in its SIPP book. We achieved our monthly SIPP sales target during the course of 2012 and have maintained this momentum. Saunderson House continues to grow its client book, building on the momentum created under new management.

The Irish Financial Services business has had a strong year with new business and assets under management showing growth. We have stabilised and continued to reposition our other Irish businesses.

The sale of the International Segment enabled us to deleverage and return £30.0 million of capital to Shareholders. The disposal, together with the cash generative features of the businesses ensures that the Group is financially strong with net cash of £20.6 million.

Profit for the year was £21.1 million compared to £10.0 million in 2011. Adjusted earnings of £8.4 million (2011 re-presented: £10.4 million) and adjusted operating profit of £11.8 million was recorded versus £13.9 million in the previous year as shown below:

GROUP PERFORMANCE

Adjusted operating profit 2012 2011Re-presented

£’000 £’000United Kingdom 14,720 15,166Ireland (2,896) (1,217)Total 11,824 13,949

The decrease in adjusted operating profit reflects our investment in further developing the technology platforms, sales organisation and administration as well as compliance capability of the Group.

UNITED KINGDOM

SIPP Market

The UK SIPP market has expanded rapidly over the past eight years from a very small base to over 1 million SIPPs. It is converging with the more widely defined platform market, which includes non pension assets.

The platform market is expected to grow from £200 billion to £500 billion in assets under administration over the next three years. Industry estimates of new business SIPP inflows forecast growth from £10 billion a year to £13 billion a year over the same period.

Platform and SIPP providers are converging in this market. James Hay is the second largest independent SIPP provider and ranked fifth as a platform provider with circa £14 billion of assets under administration.

The Retail Distribution Review (RDR) has also impacted the sector as many platform models require change in order to be compliant. For its part, James Hay Partnership has provided RDR-ready products well in advance of the effective


Chief Executive’s Review

date of RDR and now offers flexible advisor charging options. We recently launched our MiSIPP, which provides one of the most competitive unbundled pricing propositions for assets held on our fund platform.

Independent Financial Advisor (IFA) Market

For IFAs in the UK, the introduction of the RDR on 31 December 2012 has been the most significant industry development in recent years. It has affected business models and is causing many advisors to exit the market. According to research by Matrix Solutions, an estimated 4,600 advisors left the industry from October 2012 to February 2013.

RDR has impacted our small traditional IFA business and we have undertaken a restructuring of the business to ensure it is fit for purpose in the post RDR world.

RDR has impacted our small traditional IFA business and we have undertaken a restructuring of the business to ensure it is fit for purpose in the post RDR world.

United Kingdom - Adjusted operating profit 2012 2011£’000 £’000

Pension administration 10,290 10,951Independent financial advisory 4,430 4,215Total 14,720 15,166

Pension administration

2012 2011£’000 £’000

Revenue 37,679 36,607Adjusted operating profit 10,290 10,951

TotalSIPP No.

Opening balance @ 1 January 2012 38,289Additions 2,469Attrition (3,416)Closing balance @ 31 December 2012 37,342

James Hay Partnership delivered good progress with £10.3 million adjusted operating profit.

Revenue in the business was up 3% on the previous year. Operating profit has been impacted, primarily by continued investment in the platform and business, while re-building the distribution network to achieve net growth.

The immediate tasks, at the time of the acquisition of James Hay (March 2010) were achieved within targeted timeframes and cost. These included IT decoupling, restructuring the cost base and re-engineering the business model



to facilitate an IFA/client focussed team-based structure.

At the time of the acquisition of James Hay (March 2010), we set ourselves a number of targets. These included:

1. IT decoupling from Santander - completed within six month timeframe with minimal disruption.

2. Cost base restructuring - completed within nine months, three months ahead of target involving the reduction of headcount from 520 to 348.

3. Re-engineered business model - introduced team-based structure with dedicated client point of contact, which has resulted in improved customer satisfaction, better service delivery and operating efficiency.

4. Sales, marketing and distribution - a coordinated PR/marketing campaign to revive the brand and support the launch of new products together with improved sales management and a widening of our distribution network. The firm targeted to reach the cross-over point (i.e. when new business exceeded the natural attrition on an annualised basis) which required a new business run-rate of 3,000 SIPPs per annum or 250 SIPPs per month by Q3 of 2012. This has been achieved since October 2012.

This trend continued for the remainder of the year with each successive month exceeding the previous month and Q4 of 2012 showing a 91% increase on the previous year. The improved sales momentum has continued into 2013 with a further increase in new business. With monthly sales in excess of 300 SIPPs, the first quarter sales are expected to show year on year growth of over 100%.

5. Attrition - our business plan included an attrition rate of 10%, which is predominantly driven by the older age profile of the James Hay book. Since acquisition, attrition on the James Hay back book has been at or below this planned level of 10%.

Investment in business

In James Hay Partnership, we continue to invest to build a business of scale.

IT

We continue to invest significantly in our IT resources, improving the capability of our platform and ensuring our clients and IFA partners have access to the latest back office and front-end technology. Notable extensions to our online functionality in 2012 included online applications, quotations, advisor registration and charges along with online performance reporting and client notifications. In parallel, we have also made our client portfolio data electronically available on the two leading IFA back office CRM systems, namely ‘Avelo Advisor Office’ and ‘Intelligent Office’ from ‘Intelliflo’.

New product development

Since acquisition, we have re-launched the product range and implemented a more coordinated marketing and PR programme. Modular iSIPP (MiSIPP) serves the full breadth of the market by catering for each of the full, mid and simple SIPP product needs. The product is based on a core cost effective SIPP where additional modules can be added on and paid for, as required, thereby ensuring the full flexibility of a SIPP and only paying for the functionality that is required.


Within a regulatory context, the MiSIPP, like all James Hay Partnership’s products, is RDR compliant. It allows clients, with their IFA, to tailor their product to best suit their needs at a competitive price with a high level of service and superior online functionality.

People

James Hay Partnership is a recognised pensions industry expert. We continue to invest and develop this expertise. We have also strengthened management within the business with internal promotions. In March 2013 we appointed Alastair Conway as CEO.

Regulatory & Capital Adequacy

We have invested in our compliance, risk and internal audit functions. From a capital perspective, the business is well-positioned in light of the FSA’s consultancy paper on capital requirements for SIPP providers. Based on proposed rules, if implemented in full and with immediate effect, the IFG pension administration companies on a combined basis would have substantial capital in excess of the new requirements. The financial strength and risk management of James Hay Partnership is a key competitive differentiator, which provides clients/IFAs with assurance in an uncertain marketplace.

Our performance in Q4 of 2012 is indicative of the potential we believe exists in the James Hay Partnership. Our strategic work ensures that we are well positioned in a growing but evolving market.

While consolidation has yet to materialise in the UK SIPP market, we are well positioned for such corporate activity where it makes financial, regulatory and strategic sense. We will also continue to grow James Hay Partnership organically through partnering with IFAs and other service providers.

Awards

James Hay won the ‘Best SIPP Provider’ in the Investment Life and Pensions Moneyfacts Awards 2012.

Independent financial advisory

2012 2011£’000 £’000

Revenue 24,015 25,367Adjusted operating profit 4,430 4,215

Our independent financial advisory business consists principally of Saunderson House, a fee based whole of market advisor and also the IFA business of IFG Financial Services. In the year leading to RDR, revenue across the entire independent financial advisory business in the Group was down 5% although a focus on cost and efficiency delivered a 5% increase in profitability.

In Saunderson House, the departure of two Directors has afforded the opportunity to strengthen management and invest in the business while maintaining profitability. Saunderson House offers ‘full service’ financial planning and investment advice. Its investment performance has historically surpassed most competition.

The business continues to perform and win new clients. In 2012, 100 new clients were recruited bringing total clients



to 1,300. Client attrition was negligible driven by excellent client service and relationship management. Generating revenue, on a pure time-charge basis, the business met its target billable hours recovery rate of in excess of 80%.

The performance of the firm is due to its team-based business model, outstanding advisors and staff as well as an adherence to its core values of being client-driven, combined with an investment proposition based on macroeconomic research and active asset allocation with an emphasis on transparency of process.

Investment in the businessPeople

The provision of financial advice, in a people-driven business, depends on the successful relationship between a client and the firm. The team-based business model in Saunderson House has proven its success.

We are investing in our people. The training of an advisor involves achieving the highest level of formal industry qualifications, management coaching and developing the appropriate skills to win clients. Increasing the number of client facing advisors is the key to growing the business.

IT & Operations: Utilisation of technology

Through the implementation of our IT and Operations strategy we administer client portfolios more efficiently and Saunderson House improves its client offering and experience. The greater utilisation of technology is the second leg of our strategy to scale our business.

Marketing the proposition- why Saunderson House wins clients

Saunderson House’s offering is based on excellent personal service, competitive fees and a best in class investment process, bringing an institutional investment approach to the private investor. We combine a value and fundamental analysis driven approach to client asset allocation with a rigorous, fully independent fund selection process. This has given us a track record, which puts us in the top decile when compared with our competitors.

Performance track record 3 Year 5 YearTotal % p.a. % Vol. % Total % p.a. % Vol %

Saunderson House 40-49 Balanced1 31.6 9.6 8.3 41.2 7.1 10.8ARC PCI Balanced Portfolio 19.4 6.1 6.1 22.3 4.1 7.4ABI Mixed Investment 20-60% shares 24.6 7.6 6.5 27.1 4.9 9.0ABI Mixed Investment 40-85% shares 25.5 7.9 9.9 25.7 4.7 12.9FTSE All Share Index 35.5 10.7 13.6 33.8 6.0 17.1

Source: Financial Express

ARC PCI: A set of private client indices (PCI) designed by Asset Risk Consultants (ARC). These returns are net of all fees. SHL Model returns are net of fund management charges and gross of levied advisory fees.


1 The Saunderson House Model Portfolio used here is the tactical model for clients in the 40-49 age band with a balanced attitude to risk. Portfolios for other age bands and risk profiles are constructed on the same basis with different weightings to the four asset classes as appropriate. Returns from other models are comparable on a risk adjusted basis. Performance figures are quoted net of fund management charges and excluding any trail commission rebated. Performance figures are gross of SHL advisory fees.


Regulatory

From a regulatory perspective, Saunderson House led the market and has always been RDR compliant.

We believe we will deliver growth in profitability through a combination of:

n Increasing the number of client winning resources; and

n Generating margin improvement through efficiency gains and the use of technology.

Separately, our other IFA businesses delivered a credible breakeven performance in 2012. The business, having reviewed its operating model, is now RDR compliant and ready for reorganisation and growth under the management of Tim Sargisson.

Awards

Saunderson House won the ‘Fund Manager of the Year’ award for 2012 advisory category.

IRELAND

2012 2011Re-presented

Adjusted operating loss £’000 £’000

Core businesses 1 (220)Non-core businesses (1,360) (242)Central overhead (1,537) (755)Total (2,896) (1,217)

We are well positioned to take advantage of market developments in the pensions area and the change from defined benefit to defined contribution. The investment proposition using global research partners is unique in Ireland. This investment approach won the award for Innovation at the 2012 Irish Pensions Industry awards.

In 2012, IFG Corporate Pensions achieved 51 new client wins (2011: 36) and a 30% increase in its funds under management to €725 million.

There are a number of non-core activities which are subject to strategic review and we have taken appropriate provisions against these.

INTERNATIONAL (DISCONTINUED)

The executive management team and Board develop the strategy of the Group with the purpose of delivering long term sustainable profits and returns. Within these parameters and examining the risk-adjusted return on capital, the decision to sell the International Segment was reached. This decision, effectively ‘Build versus Divest’, was based on the substantial investment that would have been required to build the necessary scale. Therefore, the approach from AnaCap Financial Partners II LP was timely and well-priced at £70.0 million consideration.



GROUP FINANCING

Group net cash/(debt) is summarised and compared to 2011 year end below.

2012 2011£’m £’m

Debt (6.6) (41.4)Cash 27.2 32.3Net cash/(debt) 20.6 (9.1)

Following the sale of the International Segment, the Group repaid its debt and restructured its finance so that at 31 December 2012, the net cash position was £20.6 million. This puts the Group in a very strong and flexible position.

The Group used part of the proceeds from the sale of the International Segment to repay its debt facilities. The opportunity was also taken to refinance the Group’s facility with Barclays Bank for a £25.0 million facility of which £7.0 million has been drawn down at the year end. Features of the facility include a 5 year term, a margin of 2% and improved operational covenants. This provides the Group with greater flexibility and sufficient access to funding.

OUTLOOK

The fundamentals of our core businesses are sound and we now have a strong platform for growth within the SIPP market with James Hay Partnership and the wealth advisory sector with Saunderson House.

We have a strong balance sheet allowing us to invest in the business. We believe we will deliver substantial growth in the medium term.

Mark BourkeChief Executive

22 April 2013



Notice is hereby given that the Forty Ninth Annual General Meeting of IFG Group plc will be held at the Radisson St Helen’s Hotel, Stillorgan, Dublin 4 on 26 June 2013 at 12.00 noon for the following purposes:

Ordinary business

1. To receive and consider the Report of the Directors, Financial Statements and the Independent Auditor’s Report thereon for the year ended 31 December 2012.

2. To declare the dividend recommended by the Directors.

3. To elect as a Director David Paige who was co-opted on 12 July 2012 and so seeks election in accordance with the Company’s Articles of Association.

4. To elect as a Director John Gallagher who was co-opted on 5 February 2013 and so seeks election in accordance with the Company’s Articles of Association

5. To elect as a Director Cara Ryan who was co-opted on 5 February 2013 and so seeks election in accordance with the Company’s Articles of Association.

6. To re-elect as a Director Mark Bourke who retires in accordance with best practice under the UK Corporate Governance Code.

7. To re-elect as a Director Gary Owens who retires in accordance with best practice under the UK Corporate Governance Code.

8. To re-elect as a Director Colm Barrington who retires in accordance with best practice under the UK Corporate Governance Code.

9. To re-elect as a Director Peter Priestley who retires in accordance with best practice under the UK Corporate Governance Code.

10. To authorise the Directors to agree the remuneration of the auditors.

Special business

11 As an Ordinary Resolution

“that the Directors of the Company be and they are generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities (within the meaning of Section 20 of the Companies (Amendment) Act, 1983) up to an aggregate nominal amount not exceeding the present authorised but unissued capital of the Company; provided that this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this Resolution or 30 September 2014 (if earlier) unless previously renewed, varied or revoked by the Company, save that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot relevant securities pursuant to such an offer or agreement as if the authority conferred hereby had not expired”.

Notice of Meeting


12 As a Special Resolution

“that the Directors be and they are hereby empowered pursuant to Section 23 and Section 24 (1) of the Companies (Amendment) Act, 1983 to allot equity securities (within the meaning of Section 23 of the said Act) for cash pursuant to the authority conferred by Resolution 8 above as if Section 23 (1) of the Companies (Amendment) Act, 1983 did not apply to such allotment provided that this power shall be limited;

a. to the allotment of equity securities in connection with a rights issue in favour of Shareholders where the equity securities respectively attributable to the interests of all Shareholders are proportionate (as nearly as may be) to the respective number of ordinary shares held by them; and

b. to the allotment (otherwise than pursuant to sub-paragraph i above) of equity securities up to an aggregate nominal value of €1,246,778 (representing ten per cent of the issued share capital of the Company at 31 December 2012.

The power hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this Resolution or 30 September 2014 (if earlier) unless such power shall be renewed in accordance with and subject to the provisions of the said Section 24 save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to such an offer or agreement as if the authority conferred hereby had not expired”.


“that the Company be and is hereby generally and unconditionally authorised to make one or more market purchases (within the meaning of Section 212 of the Companies Act, 1990) on The London Stock Exchange and/or The Irish Stock Exchange of ordinary shares of €0.12 each in the capital of the Company (“ordinary shares”) provided that:

a. the maximum aggregate number of ordinary shares hereby authorised to be purchased is 10,389,817 (representing ten per cent of the issued ordinary share capital at 31 December 2012);

b. the minimum price (exclusive of expenses), which may be paid for an ordinary share, is €0.12 being the nominal value of an ordinary share;

c. the maximum price (exclusive of expenses), which may be paid for an ordinary share, is not more than five per cent above the average of the bid and offer price for an ordinary share for the ten business days immediately preceding the day on which the ordinary shares are purchased;

d. unless previously revoked or varied, the authority hereby conferred shall expire at the close of business on 31 December 2014; and

e. the Company may make a contract or contracts to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of ordinary shares in pursuance of such a contract or contracts, notwithstanding that this authority has otherwise expired”.


Notice of Meeting


“that for the purposes of Section 209 of the Companies Act, 1990, the re issue price range at which any treasury shares (as defined by the said Section 209) for the time being held by the Company may be re-issued off-market shall be as follows:

a. the maximum price at which a treasury share may be re-issued off-market, shall not be more than five per cent above the average of the bid and offer price for an ordinary share for the ten business days immediately preceding the day on which the treasury share is reissued; and

b. the minimum price at which a treasury share may be re-issued off-market shall not be less than ten per cent below the average of the bid and offer price for an ordinary share for the ten business days immediately preceding the day on which the treasury share is re-issued.

Unless previously revoked or varied, the authority hereby conferred shall expire at the close of business on 31 December 2014”.


“that, in accordance with the Shareholder Rights (Directive 2007/36/EC) Regulations 2009, the provisions of Article 59 of the Articles of Association of the Company allowing for the convening of an Extraordinary General Meeting of the Company on giving 14 days’ notice in writing at the least (where such meeting is not an Annual General Meeting or a general meeting for the passing of a Special Resolution) shall continue to be effective”.

By order of the Board:

Conleth O’Reilly Company Secretary

IFG House Booterstown Hall Booterstown Co Dublin

22 April 2013

Notice of Meeting


The Directors of IFG Group plc present their report and the audited financial statements for the year ended 31 December 2012.

Activities

Following the disposal of the International Segment in 2012, the Group is organised into two primarily geographical Segments - United Kingdom and Ireland.

The principal products and services offered by the Group are the provision of services and commissions earned in the intermediation of financial service products.

The Chairman’s Statement on pages 5 to 6 and the Chief Executive’s Review on pages 7 to 13 contain reviews of the development of the businesses of the Group during the year, the position at the year end and likely future developments.

Results

The profit for the year attributable to the owners of the parent Company was £21,600,000 (2011: £10,497,000).

Dividends

An interim dividend of 1.65 cent per ordinary share (current GBP equivalent of 1.35 pence per share), subject to withholding tax at 20% (2011: 1.50 cent), was paid on 11 December 2012 and a final dividend of 3.19 cent per ordinary share (current GBP equivalent of 2.60 pence per share), which may be subject to withholding tax at 20% (2011: 2.90 cent subject to withholding tax at 20%), will be paid on 12 July 2013 to qualifying Shareholders on the register on 28 June 2013. The dividend will be declared in euro with the option for payment in euro or GBP (net of Irish withholding tax).

Business review

A detailed commentary and review of the activities of the Group is contained in the Chief Executive’s Review on pages 7 to 13 of the Annual Report. In 2012, we disposed of our International business for £70.0 million achieving several objectives, including further concentration on our core business, a significant strengthening of our balance sheet and a substantial return of capital to Shareholders. Our strengthened balance sheet will enable us to offer attractive Shareholder returns, allowing us to invest in the business and take advantage of growth opportunities as they arise. Business momentum has continued into 2013. Against challenging market conditions, the Group continues to deliver solid financial performance.

Principal risks and uncertainties

The markets, in which the Group operates, may be affected by numerous factors, many of which are beyond the Group’s control and the exact effect of which cannot be accurately predicted. The Board is responsible for the Group’s risk management systems, which are designed to identify, manage and mitigate potential material risks to the achievement of the Group’s strategic and business objectives.

Report of the Directors


In accordance with the Transparency (Directive 2004/109/EC) Regulations 2007, the Directors note that the principal risks and uncertainties facing the Group include the following areas:

Strategic risks Description of risks Measures to reduce risk Environment and market conditions

The economic, technological and other macro factors affecting demand for the Group’s services.

The Group has operations across two trading segments - UK and Ireland. Whilst the current economic climate may affect all business, the impact will vary according to the markets in which they operate. The Group continues to work on operating efficiencies and business model changes to ensure it remains competitive.

Competitor activity The Group faces competition in its various markets and if it fails to compete successfully, market share and profitability may decline.

Competitor activity is monitored by the Board, Group and Subsidiary management is constantly focused on providing:

- Efficient technological solutions;- Competitive quality service; - Pricing to meet the demands of

customers; and- Appropriate governance and cost

structures.Acquisitions The risks associated with selecting

appropriate investment targets, integrating them into the business and successfully realising the growth expected from such transactions.

The Group conducts a stringent internal due diligence process prior to completing a transaction. Group and subsidiary management have significant experience and expertise in acquisition integration.

Disposals The risks associated with a significant business disposal and the risk of material indemnity and warranty claims.

The Group sets very clear limits in terms of indemnity and warranty claims within share purchase agreements (SPA).

Coupled with minimum claim levels these risks have been further mitigated by the extension and increase of the professional indemnity insurance policy levels.

Operational risks Description of risks Measures to reduce risk Loss of key customers/intermediaries

The risks associated with maintaining relationships with key customers and intermediaries and their financial impact on the business.

The Group invests significant resources to maintain strong relationships with its key customers and intermediaries. There is a constant focus on offering a quality service.

Loss of key management resources

Strong and effective management has been fundamental to the Group’s success. The ability to attract and retain highly skilled employees and executives is critical to this continued success.

The Group maintains a constant focus on succession planning, strong recruitment processes, long term management incentive programmes and management development.



Customer claims experience

The ability to contain the level of loss arising from complaints from customers who have allegedly suffered losses as a result of the miss-selling of financial products or administration error, coupled with any potential regulatory sanction.

Detailed compliance monitoring controls, procedures and complaints monitoring are in place across all subsidiary companies. The Group maintains appropriate professional indemnity insurance cover.

Information technology systems

The ability of the Group to avoid disruption to its key information technology systems.

The Group uses a range of information technology and support system solutions across business units for efficient client administration, control procedures and financial management.

Business continuity and disaster recovery planning is regularly assessed and tested to ensure the Group (across trading segments) is adequately resourced and maintains an appropriately robust environment including preventative processes on cybercrime.All key IT systems are constantly reviewed and updated to meet the needs of the Group.

Compliance /Regulatory risks

Description of risks Measures to reduce risk

Regulation Changes to regulation, taxation or legislative environment applicable to the Group’s activities.

Risks of regulatory actions and fines.

All regulatory, taxation and legislative requirements are managed locally by compliance, risk managers and finance managers. The Group also reviews and monitors regulation centrally together with legislative developments.

Fraud Technological advances and austerity measures have increased the risk of fraud and cybercrime fraud in particular.

IT and banking system security measures are subject to both external and internal review and are continuously updated and improved.

Financial risks Description of risks Measures to reduce risk Capital markets, interest rates and treasury

The ability to arrange financing having regard to capital market conditions. Exposure to fluctuations in both foreign exchange rates and interest rate movements including the impact on client account interest earned.

Treasury risks are actively managed by Group Finance in adherence to Board approved policies and procedures. The Group has recently completed a five year bank refinancing. The Company actively monitors and negotiates interest rate arrangements relating to client accounts.

Credit risk The exposure to a financial loss as a result of a default by customers or counterparties with which the Group transacts business.

The Group has a credit policy in place and monitors credit risk on an on-going basis. Customers and counterparties are subject to prior credit evaluations and are subject to continued monitoring at operating company level.

Financial risk management objectives and policies which have been implemented by executive management are set out in note 3 to the Group financial statements.




Directors

During 2012, John Lawrie and John Rowan retired as Directors of the Company both on 27 June 2012. Robin Phipps was elected to the Board on 27 June 2012. David Paige was co-opted to the Board on 12 July 2012. On 5 February 2013 Patrick Joseph Moran retired as Director and Chairman of the Board, and on the same day John Gallagher and Cara Ryan were both co-opted to the Board.

In accordance with the Articles of Association of the Company, John Gallagher, aged 53, was co-opted as a Non-Executive Director and elected Chairman of the Board on 5 February 2013. He is Executive Chairman of Crownway Capital – a private investment company. He is also Director of the Doyle Collection Hotel Group. He sits on the Remuneration, Nomination and Finance Committees of the Board. John Gallagher holds his 6.3% shareholding in the Company through Fiordland Investment Limited Partnership.

Mark Bourke, aged 46, is Group Chief Executive since June 2006. He joined the Group on 21 November 2000 as Finance Director and was appointed Deputy Chief Executive in November 2004 at which time he also assumed responsibility for the Group’s Irish Segment. He was previously a partner in international tax services with PricewaterhouseCoopers US, San Jose, California.

Aidan Comerford, aged 43, was co-opted to the Board on 31 August 2010 and elected to the Board on 29 June 2011. He is responsible for Finance and Risk. Mr. Comerford was previously Head of Risk & Internal Audit. He is a fellow of the Institute of Chartered Accountants in Ireland with 20 years financial services experience having held the position of finance director, chief financial officer and general manager of a number of privately held financial services companies with the J.M. Huber Corporation and the Hagemeyer Group. Prior to that he was with PricewaterhouseCoopers in Dublin.

Gary Owens, aged 54, is an Executive Director and is the Chief Executive Officer of IFG’s Ireland Segment since 6 September 2007. He is an Associate of the Chartered Insurance Institute and has held many senior roles in both life and general insurance industries. He is also a non-executive director of Chartis Excess Limited and Euro Insurances for which he received a total remuneration of £52,000 for 2012.

Colm Barrington, aged 67, is a Non-Executive Director since 25 June 2005. He is the Senior Independent Non-Executive. He is a member of the Remuneration, Audit and Nomination Committees of the Company. Since 2007 he has been the chief executive of FLY Leasing Limited, a NYSE listed aircraft leasing company based in Ireland. He is also the non-executive chairman of Aer Lingus plc. Mr. Barrington is a graduate of UCD and prior to his present position held several senior positions in the international aircraft leasing sector, including managing director of Babcock & Brown Ireland Limited, president of GE Capital Aviation Services Limited, chief operating officer of GPA Group plc and chief executive of GPA Capital.

Evelyn Bourke, aged 48, was co-opted to the Board on 25 August 2011 and elected to the Board on 27 June 2012 as a Non-Executive Director. She joined Bupa in September 2012 as chief financial officer. Having joined Friends Provident/Life plc in 2009 as chief financial officer, she was appointed chief commercial officer of Friends Life Group in 2011 with responsibility for group strategy & capital. In 2005, she joined Standard Life as group strategy & planning director and became finance director of Standard Life UK Financial Services in 2006. A qualified actuary with an MBA from London Business School, she has significant experience in financial services having held senior roles at Chase de Vere Investments plc and Tillinghast-Towers Perrin.



Peter Priestley, aged 45, was co-opted as a Non-Executive Director on 30 March 2010 and elected to the Board on 30 June 2010. He is the appointed representative of Fiordland Investment Limited Partnership which holds 23.6% of the issued share capital of the Company (at 31 December 2012). Mr. Priestley was involved in the foundation of Pension Insurance Corporation, a leading UK Life Insurer and was a co-founder of Celtic Utilities Limited and Greenstar Limited. A qualified lawyer, with an MBA from University of Michigan, he is an experienced corporate finance advisor having spent his early career at Williams Holdings Plc. He is a non-executive director of Continental Farmers Group Plc.

Robin Phipps, aged 62, was co-opted as a Non-Executive Director on 23 March 2012 and was elected to the Board on 27 June 2012. He joined Friends Life Group (formerly Friends Provident plc) in November 2008 as a non-executive director and is a member of the audit, risk and compliance committee and chairman of the with-profits committee. He is also a non-executive director of Partnership Assurance. Mr. Phipps has significant experience in financial services having been a group director of Legal & General Group plc, a non-executive director of GE Money Credit Cards and a senior advisor (Financial Services) of Ernst & Young.

David Paige BSc, FCA, aged 61, was co-opted as a Non-Executive Director on 12 July 2012. He was a partner in Coopers & Lybrand financial services division before moving into senior executive positions with NatWest Bank, Zurich Financial Services, Aviva Plc and Royal & Sun Alliance Insurance Group where he was executive director of risk. Mr. Paige was a non-executive director of several of Aegon’s UK businesses from 2006 until 2012 and is currently a non-executive director at Willis Limited and Yorkshire Building Society.

Cara Ryan, BSc, FCA, aged 40, was also co-opted to the Board on 5 February 2013. She holds a masters in investment & treasury, worked as an economist for Ulster Bank and then moved to IWP Plc as a corporate finance executive. She moved to IFG Group in 1999 and was appointed managing director of IFG Investment Managers in May 2001 until September 2006 when the business was sold. Over the period 2003-2009, she held board positions on numerous investment funds. She was an executive director of Manor Park Homebuilders Limited dealing with financial and legal matters of the Group until May 2012. Ms. Ryan has a 0.02% shareholding in the Company.

David Paige, who was co-opted on 12 July 2012, with John Gallagher and Cara Ryan, both of whom were co-opted to the Board on 5 February 2013, all, offer themselves for election to the Board. In accordance with best practice under the UK Corporate Governance Code, Mark Bourke, Gary Owens, Colm Barrington and Peter Priestley all retire and being eligible, offer themselves for re-election to the Board.

The Directors believe that each of the retiring Directors should be re-elected on the basis that they bring the necessary and appropriate balance of skills and experience within the Company and on the Board.

During 2012, Evelyn Bourke was appointed Chairperson of the Risk Committee, David Paige was appointed as Chairperson of the Audit Committee and Robin Phipps was appointed as Chairperson of the newly established UK Operations Committee.

Service agreements and contracts are dealt with later in this report.



Directors’ remuneration - audited

The remuneration of the Directors for the year ended 31 December 2012 is noted below:

Salary Fees Bonus Other Pension Total£’000 £’000 £’000 £’000 £’000 £’000

Colm Barrington - 37 - - - 37Evelyn Bourke - 37 - - - 37Mark Bourke 371 - 204 39 74 688Aidan Comerford 123 - 61 32 25 241Declan Kenny (a) 162 - - 5 23 190John Lawrie (b) - 18 - - - 18Patrick Joseph Moran - 49 - - - 49Gary Owens 180 - - 25 50 255David Paige (c) - 18 - - - 18Robin Phipps (d) - 28 - - - 28Peter Priestley - 37 - - - 37John Rowan (e) - 18 - - - 18Sub-total 836 242 265 101 172 1,616Share based compensation 64Total 1,680

(a) Declan Kenny ceased to be a Director on 6 July 2012 on sale of the International Segment

(b) John Lawrie retired from the Board after the Annual General Meeting held on 27 June 2012

(c) David Paige was co-opted to the Board on 12 July 2012

(d) Robin Phipps was co-opted to the Board on 23 March 2012 and elected to the Board on 27 June 2012

(e) John Rowan retired from the Board after the Annual General Meeting held on 27 June 2012


The remuneration of the Directors for the year ended 31 December 2011 is noted below:

Salary Fees Bonus Other Pension Termination Total£’000 £’000 £’000 £’000 £’000 £’000 £’000

Colm Barrington - 39 - - - - 39Mark Bogard (a) 117 - - 68 - 278 463Evelyn Bourke - 13 - - - - 13Mark Bourke 394 - 108 43 79 - 624Aidan Comerford 130 - 65 23 26 - 244Declan Kenny 324 - - 9 46 - 379John Lawrie - 39 - - - - 39Patrick Joseph Moran - 52 - - - - 52Gary Owens 245 - - 28 49 - 322Peter Priestley - 39 - - - - 39John Rowan - 39 - - - - 39Thomas Wacker (b) - 20 - - - - 20Sub-total 1,210 241 173 171 200 278 2,273Share based compensation 174Total 2,447

(a) Mark Bogard ceased to be a director as at 17 May 2011

(b) Thomas Wacker ceased to be a director as at 29 June 2011

The salaries for Executive Directors are reviewed annually. Benefits to Executive Directors may include a company car, car allowance and health benefits.

Pension payments in respect of Executive Directors are calculated on basic salary only and no incentives or benefits are included.

All Directors’ pension contributions are paid to defined contribution schemes, with the exception of Declan Kenny who was a member of a defined benefit scheme operated by IFG Management Limited, a component of the International Segment which was disposed of in July 2012.

Directors’ interest in Long Term Incentive Plans (LTIP) - audited

The performance period for a prior LTIP plan approved by Shareholders at an Extraordinary General Meeting on 28 September 2006 has now passed and no additional shares may be earned under that LTIP. A new LTIP plan was introduced in 2011 and the Circular was approved at the EGM following the AGM on the 29 June 2011. The LTIP performance period for the new plan expires on 31 January 2014. No awards under the new scheme were made for years 2011 and 2012.




On 10 January 2012, in accordance with the rules of the 2006 Plan, 233,333 ordinary shares were issued to the Employee Benefit Trust on behalf of the Executive Directors in office at that date (Mark Bourke: 83,333, Declan Kenny: 83,333 and Gary Owens: 66,667). These shares had already been earned under the LTIP between 2006 and 2010. The market price of these ordinary shares at date of issue was €1.00 per share.

The accounting charge calculated in line with the Group’s accounting policy in respect of the LTIP including the employer’s social security contribution for the Group Directors was £nil (2011: £116,000).

Directors’ interests in shares

The interests of the Directors in office and their families, all of which were beneficial, in the €0.12 ordinary shares of the Company at 31 December 2012 and 31 December 2011, or date of appointment, if later, are noted below:

At 31 December 2012 At 31 December 2011Shares under option Share holding Shares under option Share holding

Colm Barrington - 506,578 - 516,800Evelyn Bourke - - - -Mark Bourke 275,000 1,068,473 275,000 1,219,942Aidan Comerford 100,000 57,490 130,000 40,000Patrick Joseph Moran - 4,446,067 - 5,413,612Gary Owens - 375,869 - 391,133David Paige - - - -Robin Phipps - - - -Peter Priestley - 722,399 - 825,545

The number of ordinary shares held by Peter Priestley above includes 549,106 ordinary shares in which he has an indirect interest in. At 31 December 2012 the number of ordinary shares held by Gary Owens above includes 13,018 ordinary shares which are held in his pension scheme.

On 1 June 2012, Colm Barrington purchased 32,420 shares at a market value of €1.30 each. On 21 and 25 June 2012, he purchased 6,000 and 61,580 shares at the market value of €1.32 which was applicable on both days. On 22 June 2012 Peter Priestley purchased 70,000 shares at a market value of €1.34. On 25 May 2012, Aidan Comerford excerised 30,000 share options at an exercise price of €0.65.

On 12 December 2012, there was a return of shares to Company shareholders following take up of guaranteed entitlement pursuant to the tender offer as described in the circular to Shareholders dated 5 November 2012. The return of shares took place at a price per share of €1.65. The number of shares returned by the Directors were - Patrick Joseph Moran: 967,545 shares; Mark Bourke: 234,802 shares; Aidan Comerford: 12,510 shares; Gary Owens: 81,781 shares; Colm Barrington: 110,222 shares and Peter Priestley: 173,146 shares (inclusive of his shareholding through Fiordland Investment Limited Partnership).


On 30 March 2012, Soreda Resources Limited, a family trust linked with Declan Kenny sold 803,167 shares, 700,000 at a market price of €1.21 and 103,167 at a market price of €1.15. On 19 April 2012, Declan Kenny exercised 50,000 share options at a market price of €1.14. On 26 April 2012, Declan Kenny sold 50,000 ordinary shares at a market price of €1.50.

Directors’ interest in share options - audited

The dates granted and prices of the shares under option are as follows:

MG Bourke AM Comerford Date granted Exercise price Expiry date - 100,000 31.08.2010 115c 30.08.2020

25,000 - 13.07.2004 102c 12.07.2014 250,000 - 30.03.2011 141c 29.03.2021275,000 100,000 Total at 31 December 2012275,000 130,000 Total at 31 December 2011

The market price of the Company’s ordinary shares at the beginning and at the end of the year, on the Irish Stock Exchange was €1.05 per share and €1.35 per share respectively. During the year the market price per share ranged from €0.97 to €1.60.

The accounting charge calculated in line with the Group’s accounting policy in respect of the Directors’ Share Options for the year was £64,000 (2011: £58,000).

As at 31 December 2012, the Company Secretary holds options for 150,000 ordinary shares, granted on 11 October 2010 at €1.26 each (2011: 150,000 ordinary shares).

Directors’ service agreements and contracts

There are no contracts of service terminable on more than one year’s notice existing or proposed between IFG Group and any Director of IFG Group plc. Executive Directors Mark Bourke, Gary Owens and Aidan Comerford have each entered into service agreements and contracts of employment with the Group on terms which include participation in the Long Term Incentive Plan, and, inter alia, provide for salaries, pension contributions and compensation commitments in the event of early termination. The service contract the Company had entered into with IFG Employment Limited to procure the services of Declan Kenny ceased on 5 July with the disposal of the International Segment and the cessation of Mr. Kenny’s Directorship of the Company.

Other than as disclosed in note 39 ‘Related party transactions’, there has not been any contract or arrangement with the Company or any subsidiary during the year in which a Director of the Company was materially interested and which was significant in relation to the Company’s business.

Substantial shareholdings

So far as the Board is aware, the following are the holdings (other than Directors) of more than 3% of the issued share capital of the Company at 31 December 2012 and 22 April 2013:




22 April 2013 31 December 2012Number of

shares% of issued

share capital Number of

shares% of issued

share capital

Fiordland Investment Limited Partnership 24,524,289 23.60 24,524,289 23.60Mawer Investment Management Limited 7,564,695 7.28 7,795,076 7.50Nordea Bank Danmark AS 5,191,204 4.99 6,575,155 6.33Patrick Joseph Moran 4,446,067 4.28 4,446,067 4.28MSD European Opportunity Master Fund, L.P. 4,174,300 4.02 - -Schroders plc 4,149,709 3.99 3,866,632 3.72Farringdon Capital Management SA 3,405,256 3.28 3,058,479 2.94F&C Asset Management plc 3,127,909 3.01 662,672 0.64

Annual general meeting

Notice of the Company’s Forty Ninth Annual General Meeting is set out on pages 14 to 16.

The Directors believe that the resolutions to be proposed at the Annual General Meeting are in the best interest of the Company and its Shareholders. They intend to vote in favour of each of the resolutions and recommend that Shareholders also vote in favour of such resolutions.

The resolutions to be proposed as special business at the meeting are explained below.

Allotment of shares

At the Company’s Annual General Meeting held on 27 June 2012, the Directors were authorised to allot relevant securities up to an aggregate nominal amount not exceeding the then authorised but unissued share capital of the Company. This authority expires at the conclusion of this year’s Annual General Meeting. In resolution number 12, the Directors are requesting renewal of authority in respect of the current authorised unissued share capital of the Company.

Also at the Company’s last Annual General Meeting the Directors were authorised to allot shares in the Company for cash up to a nominal value of €1,508,649 as if the provisions of Section 23(1) of the Companies (Amendment) Act, 1983 did not apply. This authority expires on 30 September 2013. Under the Companies (Amendment) Act, 1983, any ordinary shares issued for cash must first be offered to existing Shareholders unless approval of the ordinary Shareholders is obtained that these provisions should not be applied. Your Directors consider it desirable that this authority should be renewed, thereby enabling them to retain the ability to make allotments of ordinary shares for cash, other than by way of rights issues to existing ordinary Shareholders. Your Directors believe it appropriate that the authority should be sought for an amount of €1,246,778, being ten per cent of the nominal amount of the Company’s issued share capital at 31 December 2012, to enable it, should the opportunity present itself, to increase the capital base of the Company. The Directors are making the proposal in resolution number 13 which is a special resolution. However, it is not the Directors current intention to use this authority. Approval for this authority is sought until 30 September 2014.

Authority to purchase own shares

At the Company’s Annual General Meeting held on 27 June 2012, the Directors were granted authority to make market purchases (within the meaning of Section 212 of the Companies Act, 1990) up to a maximum aggregate



number of 12,572,079 ordinary shares, representing ten per cent of the issued ordinary share capital net of repurchases. The Directors were also authorised to re-issue off-market treasury shares within defined price ranges. In resolution numbers 14 and 15, which are special resolutions, the Directors are seeking approval for renewal of these authorities for 10,389,817 ordinary shares representing ten per cent of the issued share capital of the Company as at 31 December 2012. The Directors are seeking approval for renewal of this authority until 31 December 2014.

Share buy-back

On 5 November 2012, the Group announced its proposal to return circa £30.0 million of capital to Shareholders by way of a tender offer. The tender offer price of €1.65 represented a premium of 17.9 per cent to the closing price of €1.40 per ordinary share on 1 November 2012, being the latest practicable date. It represented a premium of 13.9 per cent to the volume weighted average price per ordinary share over the three month period to 1 November 2012. Following Shareholder approval and a successful oversubscribed tender process, 22,603,636 shares or 17.87% of the ordinary shares in issue were repurchased and cancelled for a total consideration before expenses, of approximately €37.3 million.

Having returned £30.0 million to Shareholders in 2012, the Board proposes to increase the dividend per share by 10%. The Board is recommending a final dividend of 3.19 cent per share (current GBP equivalent of 2.60 pence per share). This final dividend, when added to the interim dividend of 1.65 cent paid on 11 December 2012 (current GBP equivalent of 1.35 pence per share), makes a total of 4.84 cent per share (current GBP equivalent of 3.95 pence per share).

Shareholders’ rights regulation

The Shareholders’ Rights (Directive 2007/36/EC) 2009 Regulations provide that Extraordinary General Meetings of the Company (except those convened for the purpose of passing special resolutions) may now be held on giving (at least) 14 days’ notice only where (a) the Company has passed a special resolution at its next General Meeting (and each subsequent Annual General Meeting) approving the holding of Extraordinary General Meetings on giving (at least) 14 days’ notice; and (b) the Company offers a facility to vote electronically (which the Articles already provide for through the appointment of proxies electronically).

The Directors consider that it is in the interest of the Company to retain the flexibility to call an Extraordinary General Meeting (except those convened for the purpose of passing special resolutions) on giving (at least) 14 days’ notice. Resolution number 12 is a special resolution permitting the Company to call an Extraordinary General Meeting on giving (at least) 14 days’ notice. Subject to the passing of the said special resolution, the approval will be effective until the Company’s next Annual General Meeting.

Research and development

The Group continues to research and develop new financial services products and to improve existing ones. Research and development costs of £154,000 (2011: £54,000) were incurred in continuing operations during the year.

Political and charitable donations

The Group made £24,000 (2011: £14,000) in charitable donations and no political donations during the year.



Regulation 21 of SI 255/2006 ‘European Communities (Takeover Bids Directive (2004/25/EC)) Regulations 2006’

For the purpose of Regulation 21 of Statutory Instruments 255/2006 ‘European Communities (Takeover Bids Directive (2004/25/EC)) Regulations 2006’, the information given under the following headings on pages 102 to 104 (share capital and share premium), pages 20 to 21 (Board of Directors), pages 23 to 25 (performance bonus and Long Term Incentive Plan), page 25 (share options), page 25 (Directors service agreements and contracts) is deemed to be incorporated in the Report of the Directors.

Subsidiary undertakings

The Group’s principal subsidiaries, associated undertaking and joint venture, as at the date of this document, are listed in note 42 to the Group financial statements.

Events since the year end

On 5 February 2013, Patrick Joseph Moran retired as Director and Chairman of the Board. John Gallagher and Cara Ryan were both co-opted to the Board on that date. On 5 February 2013, John Gallagher was unanimously appointed as Chairman of the Board.

The Board is recommending a final dividend of 3.19 cent per share (current GBP equivalent of 2.60 pence per share) which will be considered by the Shareholders at the Annual General Meeting.

Statement of Directors’ responsibilities

The Directors are responsible for preparing this report and the financial statements in accordance with Irish law.

Irish law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU). The Directors have elected to prepare the Company financial statements in accordance with Generally Accepted Accounting Practice in Ireland (accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and Group and of the profit or loss of the Group for that year.

In preparing these financial statements the Directors are required to:

n select suitable accounting policies and then apply them consistently;

n make judgements and estimates that are reasonable and prudent;

n state that the Group financial statements comply with IFRS as adopted by the EU; and

n prepare the financial statements on a going concern basis unless it is inappropriate to presume that the group will continue in business.

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

The Directors are required by Irish law and the Listing Rules issued by the Irish Stock Exchange, to prepare a Directors’ Report and reports relating to Directors’ remuneration and corporate governance. In accordance with the Transparency


(Directive 2004/109/EC) Regulations 2007 (“the Transparency Regulations”), as amended by Transparency (Directive 2004/109/EC) (Amendment) Regulations 2012, the Directors are required to include a management report containing a fair review of the business and a description of the principal risks and uncertainties facing the Group.

The Directors are responsible for keeping proper books of account, which 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 have been properly prepared in accordance with the requirements of the Companies Act 1963 to 2012. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The measures taken by the Directors to secure compliance with the Company’s obligation to keep proper books of account are the use of the appropriate systems and procedures and the employment of competent persons. The books of account are kept at the registered office of the Company.

A copy of these financial statements will be published on the Company’s website at www.ifggroup.com. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the parent Company’s website. Legislation in the Republic of Ireland concerning the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors’ statements pursuant to the Transparency Regulations

Each of the Directors, whose names and functions are listed on pages 20 to 21 of the Report of the Directors, confirm that to the best of each person’s knowledge and belief:

n the Group financial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

n the Company financial statements, prepared in accordance with Generally Accepted Accounting Principles in Ireland, give a true and fair view of the assets, liabilities and financial position of the Company; and

n the Report of the Directors contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

Corporate Governance Statement

The Corporate Governance Statement on pages 30 to 42 is part of the Report of the Directors.

Auditors

In accordance with Section 160 of the Companies Act, 1963, PricewaterhouseCoopers, Dublin, have indicated their willingness to continue in office.

On behalf of the Board:

M G Bourke A M Comerford(Chief Executive) (Executive Director - Finance & Risk)

22 April 2013



The Board of IFG Group plc is committed to maintaining high standards of corporate governance throughout the Group.

The Company therefore applies the UK Corporate Governance Code (June 2010) published by the Financial Reporting Council in the UK and the Irish Corporate Governance Annex published by the Irish Stock Exchange (together the “Codes”) in respect of its corporate governance practices.

This statement sets out in detail how IFG has applied the principles set out in section 1 of the UK Corporate Governance Code, which was published by the Financial Reporting Council in the UK and adopted by the Irish Stock Exchange. The UK Corporate Governance Code is publically available on the FRC website, www.frc.gov.uk. A copy of the Irish Corporate Governance Annex can be obtained from the ISE’s website, www.ise.ie.

The Board of Directors

The Board provides leadership and maintains effective control over the activities of IFG. The Board meets on a regular basis and has a formal schedule of matters reserved to it. The Board sets the Group’s strategic aims and specifies key developments towards the strategic objectives that are to be achieved by management within an agreed budget.

On 31 December 2012, the Board consisted of three Executive Directors and six Non-Executive Directors (see biographical details on pages 20 to 21). The Board, either directly or indirectly through the operation of Committees of Directors and delegated authority, brings an independent judgement on issues of strategy, resources and standards of conduct.

The Board considers that its composition is appropriate to oversee the Group’s businesses and is suitably diverse in background to address the challenges of the areas in which IFG operates. During the year, Declan Kenny, John Lawrie and John Rowan ceased to act as Directors whilst David Paige and Robin Phipps, both Non-Executives were appointed to the Board. Evelyn Bourke and Robin Phipps were elected to the Board on 27 June 2012, having been co-opted on 25 August 2011 and 23 March 2012 respectively. Continuing the focus on bringing excellent commercial and financial services knowledge to the Board and promoting greater diversity, John Gallagher and Cara Ryan joined the Board of IFG on 5 February 2013. John Gallagher was unanimously appointed Chairman by the Directors of IFG replacing Patrick Joseph Moran.

The Board has delegated responsibility for the management of the Group to the Group Chief Executive and, through him, to Executive Directors and management. The Board has also delegated some additional responsibilities to Committees whose powers, obligations and responsibilities are set out in written terms of reference and approved by the Board.

The Executive Directors have extensive experience of the financial services business and are responsible for the operational management of the Group’s businesses. This specialist knowledge is backed up by the general business skills of each of the individual Directors involved and by the broadly based skills and knowledge of each of the Non-Executive Directors. The collective skills of the Board are varied and provide extensive capability in general business and specifically in the areas of operation of the Company. The Board comprises a Chairman with extensive business experience in the areas of creation, building and maximising return from companies, a Non-Executive Director who is a Chairman of an Irish plc, three Non-Executive Directors who have experience and knowledge of the UK Financial




Services Industry and a Non-Executive Director who has significant experience in Irish Financial Services. The Board has been changed over the last number of years to align its collective experience and talent towards the principal market segments the Group operates within. The Board is satisfied that it is well positioned to address risks and uncertainties faced by the Group as outlined on pages 17 to 19 through the combined specialist financial industry expertise and business skills of Non-Executive and Executive Directors.

None of the Executive Directors have directorships with a FTSE 100 company. In accordance with good practice should any such directorships arise they would be limited to one FTSE company per Executive Director.

All the Non-Executive Directors are engaged under the terms of service agreements. A copy of the term of service applied for Non-Executive Directors is available on request from the Company Secretary. It is Board policy that Non-Executive Directors are normally appointed for an initial term of three years. Non-Executive Directors are typically expected to serve two three year terms; however, the Board may invite them to serve longer. Directors serve for a term of three years expiring at the AGM in the third year following their election at the AGM, or as the case may be, their re-election at the AGM. All Directors are submitted regularly for re-election at least every three years and in cases where the common code requires, annually. Directors joining are initially co-opted to the Board by vote of the existing Board. Elections of Directors by the Shareholders at an AGM take place at the AGM immediately after co-option and at subsequent periodic intervals of service. On appointment, and regularly thereafter, the Directors are briefed in writing and orally by the executive team. Papers are sent to each Director in sufficient time before Board Meetings. The Board is supplied on a timely basis with information in a form and of a quality that enables it to discharge its duties.

The Chairman and Board have provided profiles of the Non-Executive Directors being presented for election or re-election to the Board. All Directors serving in the course of 2012 have been subject to performance evaluation. Non-Executive Directors seeking re-election, have been subject to performance evaluation, which established that they are effective Directors and they have confirmed to the former and current Chairman that they are committed to the role of Director. The Non-Executive Directors seeking election after having been co-opted to the Board since the last AGM have been subject to performance evaluation, which established that they are effective Directors and have confirmed to the former and current Chairman that they are committed to the role of Director.

A Director may take independent professional advice at the Company’s expense. The Group maintains appropriate insurance cover for its Directors, officers and employees, including cover in respect of legal action against its Directors. The Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. Both the appointment and the removal of the Company Secretary is a matter for the Board as a whole, operating primarily through the Nomination Committee.

The full Board meets at least every two months. The UK Operations Committee meets at least every quarter. In addition, the Board Committees established for specific purposes, being Audit, Remuneration, Risk, Nomination and Finance meet as required. The Finance committee, established in 2013, also meet as required. All Directors allocate sufficient time to the Company to discharge their responsibilities effectively as identified in the following table.



1 Declan Kenny ceased to be a Director on 6 July 2012 on sale of the International Segment

2 John Lawrie retired from the Board after the Annual General Meeting held on 27 June 2012

3 David Paige was co-opted to the Board on 12 July 2012

4 Robin Phipps was co-opted to the Board on 23 March 2012 and elected to the Board on 27 June 2012

5 John Rowan retired from the Board after the Annual General Meeting held on 27 June 2012

The following table sets out the attendance by Directors at meetings during the year ended 31 December 2012:

Independence of Non-Executive Directors

The UK Corporate Governance Code defines “an independent Director” as one who is “independent in character and judgement, and whether there are relationships or circumstances which are likely to affect, or could appear to affect the Director’s judgement”.

Under the provisions of the UK Corporate Governance Code, Colm Barrington, Evelyn Bourke, David Paige and Robin Phipps are deemed independent Directors by the Board. Peter Priestley adheres to all the provisions of the Code for a Director to be considered independent except that he is the nominated Director of Fiordland Investment Limited Partnership, a major Shareholder in the Company holding 23.6% of the present issued share capital and is, therefore, not deemed independent. The Directors who were co-opted on 5 February 2013, John Gallagher and Cara Ryan are deemed independent Directors by the Board.

The size and composition of the Board has been assessed by the Board itself and through Egon Zehnder (a corporate governance advisor).

Director Board Audit Remuneration Risk Nomination UK Operations

Patrick Joseph Moran 7 4 2 - 2 -Mark Bourke 7 - - - - 2Aidan Comerford 7 - - - - -Declan Kenny1 3 - - - - -Gary Owens 7 - - - - -Colm Barrington 6 4 2 - 2 -Evelyn Bourke 5 - - 4 - 2John Lawrie2 4 2 2 2 1 -David Paige3 3 2 - - - 1Robin Phipps4 2 - - 2 - 2Peter Priestley 7 - - - 1 2John Rowan5 4 - - 2 - -Total meetings held 7 4 2 4 2 2


The Board instituted a Director review process in 2012. As part of that process the performance of the Chairman will be appraised by the remainder of the Board. This process will be led by the Senior Independent Director who will meet with the other Non-Executive Directors without the Chairman being present. As a new Chairman was appointed in February 2013, the review by the Non-Executive Directors led by the Senior Independent Director shall take place towards the end of 2013. Since his appointment, the Chairman has instigated meetings with the Non-Executive Directors without the Executive Directors being present. Such meetings will be held, at least, annually.

The Articles of Association of the Company currently provide that all Directors are subject to retirement by rotation on the basis that one-third, or the number nearest one-third of their number, retire at each Annual General Meeting.

Board Committees

The Board has established the following Committees to assist in the execution of its responsibilities. These are:

n the Audit Committee;

n the Remuneration Committee;

n the Risk Committee;

n the Nomination Committee;

n the UK Operations Committee; and

n the Finance Committee.

Each of the Committees has written terms of reference that have been approved by the Board which set out the Committee’s powers, responsibilities and obligations. The terms of reference are regularly reviewed and have been constructed with external advice and using best practice. The Finance Committee was established in 2013 and accordingly, there are no attendance statistics available for 2012. The UK Operations Committee first met in September 2012.

The Company Secretary acts as secretary to each of the Board Committees. In the view of the Board, the Committees have been provided with sufficient resources to undertake their duties and may, where necessary, engage external advisors to support their activities.

The terms of reference of the UK Operations Committee require the committees to consider and review the performance of the UK Segment covering revenue, costs, sales, service and operations and to ensure that the business strategies are aligned with Group policy. The terms of reference also require the Committee to ensure that the appropriate procedures and checks are in place and that the risks are fully disclosed and assessments of risks are made to the Risk Committee.

Audit Committee

The Audit Committee is comprised solely of Non-Executive Directors. The Committee is chaired by David Paige and the members are Colm Barrington and Cara Ryan. Patrick Joseph Moran was a member of this Committee until his retirement from office on 5 February 2013. The Company Secretary acts as secretary to this Committee. The Group Chief Executive, the Executive Director - Finance & Risk, the Head of Internal Audit and the external auditors normally attend meetings of the Committee.




The Head of Internal Audit and the external auditors have unrestricted access to the Committee Chairman at all times. The external auditors have the opportunity to meet with members of the Audit Committee without the presence of the Executive Directors, at least, once a year.

The Board has determined that members of the Audit Committee have recent and relevant financial experience and satisfy the requirements of the Code.

The Committee oversees the financial reporting and internal controls, the latter in conjunction with the Risk Committee, and provides a formal reporting link with the auditors. In 2012, the Committee’s remit was expanded to take in Internal Audit which was previously reviewed through the Internal Audit and Risk Committee. The Internal Control and Risk Committee was reconstituted solely as the Risk Committee.

It is current Committee policy that where it is deemed to be in the best interests of the Group, alternative professional advisers, beyond the incumbent external auditor, are engaged to provide non-audit services. Four key principles underpin the provision of non-audit services by the external auditor. The auditor shall not:

n audit its own firm’s work;

n conduct activities that would normally be undertaken by management;

n have a mutuality of financial interest with the Group; or

n act in an advocacy role for the Group.

During the year ended 31 December 2012 remuneration for non-audit related services to the Company’s external auditor PricewaterhouseCoopers in Ireland, totalled £235,000 (2011: £185,000) and to PricewaterhouseCoopers in other countries £281,000 (2011: £225,000).

The Committee has a process in place to ensure that the independence of the audit is not compromised. This includes monitoring the nature and extent of services provided by the external auditors through its annual review of fees paid to the external auditors for audit and non-audit work. The Committee also obtains confirmation from the external auditors that in their professional judgment they are independent from the Group.

The Committee has the primary responsibility for making recommendations on the appointment, reappointment and removal of the external auditors. The Committee has recommended to the Board that the external auditors continue in office.

During the year and up to the date of approval of the Annual Accounts, the Audit Committee fulfilled its responsibilities by working within a structured agenda of matters focused to coincide with key events of the Group’s financial reporting cycle, together with standing items that the Committee is required to consider at each meeting.

The Committee has made arrangements by which the Group’s staff may, in confidence, raise concerns about possible improprieties in the matters of financial reporting and other matters.

The Audit Committee, operating under its terms of reference, discharges its responsibilities by reviewing:

n the integrity of the financial statements and any announcements or judgements they contain including the 2012 preliminary, Interim results announcements and the 2012 Annual Report, in each case recommending that these be approved by the Board;


n the appropriateness of the Group’s accounting policies and compliance with accounting standards;

n in conjunction with the Risk Committee, receiving reports from Group personnel relating to compliance, internal control and internal audit. Such reports provide the Committee with the information required to oversee systems on internal control over financial reporting, overall internal control policies, corporate governance procedures and the system of risk management;

n reviewing the external auditors’ presentation of proposed audit plan and fee proposal and confirmation of their independence;

n the external auditors’ terms of engagement including the scope of the audit and assessing annually external auditor objectivity and independence taking into account relevant professional and regulatory requirements and the relationship with the audit firm as a whole, including the provision of non-audit services;

n the Internal Audit function’s terms of reference, resources, its audit plan and reports on its work during the year;

n the arrangements by which staff may, in confidence, raise concerns about possible fraud; and

n its own performance including a self-evaluation; and considering management’s report of related party matters.

On 6 February 2012, the terms of reference for the Audit Committee were amended to reflect the change in the structure of the Internal Control and Risk Committee.

Remuneration Committee

During the course of 2012 the membership of the Remuneration Committee changed. Peter Priestley joined the Committee and John Lawrie ceased to be a member upon his retirement as a Director of the Company on 27 June 2012. As at 31 December 2012, the Remuneration Committee comprised of three Non-Executive Directors; Patrick Joseph Moran, Colm Barrington and Peter Priestley. Patrick Joseph Moran was the Chairman of the Committee. John Gallagher has replaced Patrick Joseph Moran who retired as a Director on 5 February 2013, on the Committee.

The Company Secretary is secretary to this Committee. The Group Chief Executive attends on the invitation of the Chairman. All three members of the Remuneration Committee have extensive experience of other companies and industries.

The principal responsibilities of the Committee are to determine the remuneration of the Executive Directors and review that of other senior executives in the Group.

The Committee determines the remuneration of the Chairman and the Non-Executive Directors. The remuneration of the Non-Executive Directors reflects the time commitment and responsibilities of the role. The disclosure of Directors’ remuneration is set out in the Report of the Directors in accordance with the requirements of the Irish Companies Acts, 1963 to 2012 and the listing rules of the Irish Stock Exchange. The Committee also makes recommendations to the Board in relation to remuneration for Executive Directors and senior management.

Remuneration policy

Non-Executive Directors are paid Directors’ fees only. They do not receive bonuses or share entitlements. Remuneration for Executive Directors is comprised of salary, bonus, pension, share based compensation and other benefits which may include company car, car allowance and health benefits.



It is the policy of the Company to grant share options under the terms of the Group’s Share Option Schemes to Executive Directors and employees of the Group to encourage identification with Shareholders’ interests in general.

Share options and membership of the Long Term Incentive Plan (LTIP) are approved by the Remuneration Committee. The LTIP is a share based scheme approved by the Company at an EGM held on 29 June 2011. Remuneration of Executive Directors is approved by the Remuneration Committee. The LTIP scheme requires achievement of certain EPS growth for shares to be awarded. Any awards would be based on a year on year performance and awards would only be made in subsequent years to the performance year and would only vest over a minimum of a three year period. The Committee also reviews whether LTIP performance criteria have been met and if appropriate, approves the LTIP award for the period. There have been no awards under the LTIP since its inception.

During the year the Committee also approved and reviewed the share option schemes which the Company has in place. The Committee also reviewed bonus provisions for Executives and made recommendations in relation to certain bonus proposals and considered the fees payable to Non-Executive Directors. The number of shares over which options may be granted under these schemes or any other share option scheme during the period of ten years ending on the relevant date of grant, whether exercised or not, is limited to 10% of the number of shares in issue on the relevant date of grant. Options granted are entirely consistent with the share option scheme rules approved by Shareholders. There was no departure from the Company’s policy in the period under review and no change in the policy from the previous year.

As at 31 December 2012, the number of shares subject to options which have been granted by the Company, but not exercised by the recipient, is 2,824,000. As at 31 December 2012, the number of shares earned under the Company’s Long term Incentive Plan, which ceased on 31 December 2012, is 3,312,500. The total of these two amounts equals 6,136,500 and this represents 5.91% of the total issued share capital of the Company.

Risk Committee

From 6 February 2012, the Internal Control and Risk Committee was reconstituted as the Risk Committee. During the course of 2012 the membership of the Risk Committee changed. John Rowan ceased to be a member upon his retirement as a Director of the Company on 27 June 2012. Evelyn Bourke assumed the Chair of the Committee in succession to John Rowan. As at 31 December 2012, the Risk Committee comprised of three Non-Executive Directors, Evelyn Bourke, Robin Phipps and Peter Priestley. In accordance with good corporate governance recommendations the Chairman of the Audit Committee should sit on the Risk Committee and, accordingly, David Paige was co-opted onto the Risk Committee on 22 March 2013. The Company Secretary acts as Secretary to this Committee. The Group Chief Executive, the Executive Director of Finance & Risk and the Head of Internal Audit attend meetings of the Committee.

The Committee assisted the Board in fulfilling its oversight responsibilities for corporate governance by evaluating business and reputational risks and by reviewing the Company’s processes for monitoring compliance with laws, regulations and codes of conduct. The Committee liaises with the Audit Committee as appropriate.

The evaluation of business risk is conducted through a formal process of risk control assessment review over each trading subsidiary company in each of the operating segments under risk headings including, inter alia, strategic, regulatory, tax, legal, financial, business processes, technology and management information systems.



The Committee’s terms of reference requires it to advise the Board on the Company’s overall risk appetite, tolerance and strategy, taking account of the current and prospective macroeconomic and financial environment and authoritative sources that may be relevant for the Company’s risk policies. The Committee is also required to oversee and advise the Board on the current risk exposures of the Company and future risk strategy. In addition, it reviews the Company’s overall risk assessment processes that inform the Board’s decision making, ensuring both qualitative and quantitative metrics are used. The Committee provides input to the Board on proposed strategic transactions including acquisitions or disposals, ensuring that a due diligence appraisal of the proposition is undertaken, focusing in particular on risk aspects and implications for the risk appetite and tolerance of the Company, and taking independent external advice, where appropriate and available.

A Group risk management policy was approved by the Risk Committee on 23 March 2012. The policy explains the Group’s underlying approach to risk management. It also outlines key aspects of the risk management process and identifies the main reporting procedures. The Group risk management structure operates within a framework of defined organisation structure, mandated policies and processes and delegated authority to key personnel. The Groups’ principal risks and uncertainties have been outlined on pages 17 to 19.

Segmental Risk Committees and forums report into their segmental boards and also directly up to the Group Risk Committee via each Segmental Risk Director four times during the year. Risks are analysed for impact and probability to determine the exposure and action plans are identified to manage key risks. The risk exposure, risk probability, impact and mitigation are reviewed by the Group Risk Committee and the Board.

Nomination Committee

During the course of 2012 the membership of the Nomination Committee changed. Peter Priestley joined the Committee and John Lawrie ceased to be a member upon his retirement as a Director of the Company on 27 June 2012. As at 31 December 2012, the Nomination Committee comprised of three Non-Executive Directors, Patrick Joseph Moran, Colm Barrington and Peter Priestley. Patrick Joseph Moran was the Chairman of the Committee. John Gallagher has replaced Patrick Joseph Moran, who retired as a Director on 5 February 2013, on the Committee. The Group Chief Executive attends on the invitation of the Chairman. The Nomination Committee is established to carry out a formal selection process of candidates and to make recommendations to the Board on all new Board appointments (having due regard to the provisions of the Articles of Association of the Company regarding the appointment of Directors and the Company Secretary). The principal responsibilities of the Committee in relation to the composition of the Board are to keep Board renewal, structure, size and composition under constant review, including the skills, knowledge and experience required, taking account of the Group’s businesses, strategic direction and objectives. The Nomination Committee also provides input in relation to senior appointments to the Company.

The Nomination Committee normally meets annually or as needed. During the year the Committee also considered the overall structure, size and composition of the Board, together with the structure and the composition of the Committees. In the early part of 2012, the Committee commenced a process to obtain a number of new Directors for the Board. This, ultimately, led to the appointment of David Paige and Robin Phipps as Non-Executive Directors. The process involved canvassing of Directors and business contacts in the UK, the financial services market and consulting recruitment agencies. After review of a number of candidates a short list for final interview was completed. The preferred candidates, David Paige and Robin Phipps, were nominated by the Committee to the full Board. Both, Robin



Phipps and David Paige, bring to the Group significant experience in UK Financial Services which is beneficial and relevant given the increased scale of our UK business following the acquisition of James Hay in 2010.

In the latter part of 2012, the Nomination Committee also engaged in a process to appoint a Director with an emphasis on Irish financial services experience. The Nomination Committee conducted a search and reviewed a number of potential candidates. Cara Ryan, who has significant financial services experience including a number of years previously in operational roles in IFG, was the candidate ultimately recommended to the Board by the Nomination Committee. Cara Ryan was co-opted to the Board on 5 February 2013.

During 2012, the Chairman, Patrick Joseph Moran, indicated that he would step down as Chairman before the Annual General Meeting in 2013. Arising from this announcement the Nomination Committee commenced a process to seek a Chairman in succession. A significant exercise involving contacts with senior business people and the engagement of Davy, the Company’s brokers, was undertaken. Ultimately, it was established that John Gallagher, a person with a wide experience and a very successful track record in business, should be invited to succeed to the Chair. John Gallagher was co-opted to the Board on 5 February 2013 and was unanimously appointed to the Chair.

The role and responsibilities of the Nomination Committee are set out in its written terms of reference, which are reviewed annually and are available at the registered address of the Company.

UK Operations Committee

In 2012 the Board set up the UK Operations Committee. The Committee is chaired by Robin Phipps and its members are Evelyn Bourke, David Paige, Peter Priestley and Mark Bourke. The first meeting of the Committee was on 18 September 2012. The Committees remit is to consider and review the performance of the UK Segment measured against established Key Performance Indicators (KPIs), review annual operating budgets, review business strategy and its alignment with Group policy and moderate and review risk and compliance in the UK Segment.

Finance Committee

On 22 March 2013 the Board set up the Finance Committee. The Committee is chaired by John Gallagher and its members are Peter Priestley and David Paige. The Committee’s primary remit is to consider and review the appropriateness and strategic fit of potential acquisitions or disposals to be made by the Group, assess and review funding or banking requirements arising and to make recommendations to the Board in relation to financial matters.

Relations with Shareholders

The Company places considerable importance and puts significant effort into communications with Shareholders. The Group Chief Executive and Executive Director of Finance & Risk meet regularly with institutional Shareholders and brokers catering for private Shareholders, where an ongoing programme of dialogue and meetings deals with a wide range of relevant matters including strategy, performance, management and governance. The UK Corporate Governance Code suggests that the Senior Independent Non-Executive Director should attend meetings with major Shareholders, and that major Shareholders should be offered the opportunity to meet with new Non-Executive Directors in order to develop a balanced understanding of their issues and concerns. The Group does not believe that, given its size, it is



necessary to implement these code provisions on an ongoing basis. Instead, the Group Chief Executive reports to the Board on meetings with Shareholders and brokers. The Chairman is available to Shareholders, should contact through the normal communication channels not be feasible. The Company deals with its largest single block shareholding, Fiordland Investment Limited Partnership, through its nominated Director, Peter Priestley.

Colm Barrington is the Senior Independent Director (SID). The SID is available to the Chairman for separate consultation and is also available as an intermediary for other Directors should they require, in liaison with the Chairman. The Company has an approved process for feedback and review of the Chairman’s performance in the Company. This process is managed by the SID.

At its Annual General Meeting, the Company complies with the provisions of the UK Corporate Governance Code relating to the disclosure of proxy votes and the separation of resolutions. The outcome of General Meetings of the Company, including voting results, is published on the Company’s website and to the stock exchange following conclusion of the meeting.

The Directors believe the Annual Report and Accounts, Interim Report and business review, and other Shareholder communications, provide a balanced and, in the context of the complexities imposed by modern financial accounting rules, understandable assessment of the Company’s financial position and prospects.

Description of the operation of the Shareholders’ meeting

The Board of Directors use the Annual General Meeting (AGM) to communicate with Shareholders and to provide the Shareholders with a mechanism for participation. The Board is briefed regularly on the views and concerns of institutional Shareholders. Directors of the Company, including the Chairman and the CEO, attend the AGM and address questions raised by the Shareholders.

The powers and rights of the Shareholders at the AGM include:

n receipt of the annual accounts;

n approval of the annual dividend recommended by the Directors;

n authorisation of the Directors to agree the remuneration of the auditors;

n election of candidates to the Board of Directors; and

n approval of special and ordinary resolutions tabled by the Directors.

Performance evaluation

In addition to their statutory responsibilities, all Non-Executive Directors have specific responsibility for attending the Board Meetings and the relevant Board sub-Committee, where a member. Active participation and contribution at Board Meetings is required.



The Chairman is a Non-Executive Director and carries the same responsibilities as all his Non-Executives colleagues. He is responsible for the leadership of the Board and ensuring its continued effectiveness in carrying out its duties and setting its agenda. He is also responsible for ensuring that all Directors receive accurate, timely and clear information. He ensures that new Directors receive appropriate induction on joining the Board. He facilitates the effective contribution of his Non-Executive colleagues and ensures constructive relationships exist between Executive and Non-Executive Directors.

On appointment Directors receive induction materials and meet with key Executives, with a particular focus on ensuring Non-Executive Directors are fully informed on issues of relevance to the Company and its operations. Directors are provided with opportunities to update their skills and knowledge through participation in operational reviews and presentation sessions.

The Chairman and Company Secretary review Directors’ training needs, in conjunction with individual Directors, and match those needs appropriately. Training and education of Directors is fulfilled by in-house presentations by various Executives and employees with specific operational responsibilities. This takes the form of presentations on products focusing on functionality, price and service offerings. Some Directors also attend investor meetings and seminars on the business provided by the CEO and senior management.

In 2012 a process was implemented involving scorecards for Director evaluation providing for feedback from each individual Director on the Board, functioning of the Board and assessment of each Director by the Chairman. This review process has taken place involving all the Non-Executive Directors in office on 31 December 2012. The process involved the completion of rated assessments on each of the Directors by Patrick Joseph Moran, who was Chairman in the course of 2012. These ratings were provided to the Directors individually and each Director completed their rated assessment on the Board together with the functioning and operations of the Board. The Board have also introduced an assessment process for the Chairman. This is led by the Senior Independent Director. At the end of 2013 a review of the new Chairman using this process shall be completed. The evaluation process covers a broad range of areas including preparation for meetings, participation in meetings, time commitments and interaction with the other members of the Board. Consultants external to the Company may be used if deemed necessary.

Internal control

The Board have established procedures necessary to implement the requirements of the UK Corporate Governance Code relating to internal control as reflected in the updated Turnbull guidance (Internal Control: Revised Guidance for Directors on the Combined Code) published in October 2005.

The Board has overall responsibility for the Group’s system of internal control. The system is designed to provide reasonable assurance of the safeguarding of assets and of Shareholders’ investment and the reliability of financial information.

The Board is responsible for the risk management framework and has delegated to the Risk Committee, in conjunction with the Group Chief Executive, the Executive Director of Finance & Risk and the Segmental Directors, the authority to approve the risk framework of the operating subsidiaries.



The principal components of the internal control and risk management process are:

n skilled and experienced management and staff;

n the operation of the “Three Lines of Defence Model” of risk management, with clearly defined roles and responsibilities for committee’s and individuals;

n a comprehensive system of financial control incorporating budgeting, periodic financial reporting and variance analysis;

n a Risk Committee of the Board of IFG Group plc and a risk management framework comprising of segmental risk function’s, with clearly stated risk appetite and risk strategy supported by approved risk management policies and processes;

n a central Internal Audit function which carries out internal audit activities across the Group; and

n an Audit Committee whose formal terms of reference include responsibility for assessing the significant risks facing the Group in the achievement of its objectives and the controls in place to mitigate those risks.

The Group has an established system of internal control and risk management systems in relation to its financial reporting process and the process for preparation of consolidated accounts. These systems:

n include policies and procedures to facilitate the maintenance of records that accurately and fairly reflect transactions;

n provide reasonable assurance that transactions are recorded, as necessary, to permit the preparation of financial statements in accordance with International Financial Reporting Standards (IFRS); and

n require reported data to be reviewed and reconciled.

The Group finance department manages the financial reporting processes to ensure the information which enables the Board to discharge its responsibilities, including the production of interim and annual accounts, is provided on a timely basis. It is supported by a network of finance managers throughout the Group who have the responsibility and accountability to provide information in keeping with the Group policies, procedures and internal best practice. Throughout the year the Group produces latest estimates to predict the likely year end position. The latest estimates are compared with the annual budget and enable the Board to check performance and, where appropriate, to challenge sections of the business if actual or anticipated performance varies significantly from the annual budget.

The Directors confirm they have reviewed the effectiveness of the Group’s system of internal controls during the year ended 31 December 2012, and such controls remain in place to 22 April 2013. The review covered all material controls, including financial, operational and compliance controls and risk management systems. The Board has not identified any significant failings or weaknesses during the review.

In accordance with the guidance laid down by the Financial Reporting Council, there is ongoing review of the processes of identification, evaluation and management of the significant risks faced by the Group. Such risk processes were in place throughout the year 2012 and up to 22 April 2013, the approval date of the financial statements.



Going concern

The Directors statement regarding going concern has been included in note 2.1 to the Group financial statements.

Compliance with Code

The Directors confirm that the Company has reviewed the provisions of the UK Corporate Governance Code published by the UK Financial Reporting Council in June 2010 and the Irish Corporate Governance Annex and is in compliance throughout the year ended 31 December 2012 therewith save for meetings with major Shareholders have not been held with the senior Non-Executive Director present, such meetings being held with the Group Chief Executive, Executive Director of Finance & Risk and, to a limited extent, with the Chairman present, as explained above.

The Company considers this exception as acceptable, given the size of the Company and the composition of the Board as a whole.

This Corporate Governance statement forms part of the Report of the Directors.



Independent Auditors’ Report to the members of IFG Group plc

We have audited the financial statements of IFG Group plc for the year ended 31 December 2012 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and Company Balance Sheet and the related notes. The financial reporting framework that has been applied in the preparation of the group financial statements is Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the company financial statements is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Respective responsibilities of directors and auditors

As explained more fully in the Report of the Directors set out on pages 28 to 29, the directors are responsible for the preparation of the financial statements giving a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and 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 Company’s members as a body in accordance with Section 193 of the Companies Act, 1990 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.

Scope of the audit of the financial statements

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 group and the 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. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion:

n the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the group’s affairs as at 31 December 2012 and of its profit and cash flows for the year then ended;

n the Company Balance Sheet gives a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland of the state of the company’s affairs as at 31 December 2012; and

n the financial statements have been properly prepared in accordance with the requirements of the Companies Acts 1963 to 2012 and, as regards the group financial statements, Article 4 of the IAS Regulation.


Matters on which we are required to report by the Companies Acts 1963 to 2012

n We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

n In our opinion proper books of account have been kept by the company.

n The Company Balance Sheet is in agreement with the books of account.

n In our opinion the information given in the Directors’ Report is consistent with the financial statements and the description in the Corporate Governance Statement of the main features of the internal control and risk management systems in relation to the process for preparing the group financial statements is consistent with the group financial statements.

n The net assets of the company, as stated in the Company Balance Sheet, are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2012 a financial situation which under Section 40 (1) of the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the company.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Acts 1963 to 2012 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.

Under the Listing Rules of the Irish Stock Exchange we are required to review:

n the directors’ statement, set out on pages 50 to 51, in relation to going concern;

n the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK Corporate Governance Code and the two provisions of the Irish Corporate Governance Annex specified for our review; and

n the six specified elements of the disclosures in the report to shareholders by the Board on directors’ remuneration.

John Loughlinfor and on behalf of PricewaterhouseCoopersChartered Accountants and Statutory Audit Firm Dublin

22 April 2013

Independent Auditors’ Report to the members of IFG Group plc


Notes 2012

£’000

2011 Re-presented

£’000Continuing operationsRevenue 5 76,153 77,260Cost of sales (64,520) (64,081)Gross profit 11,633 13,179

Administrative expenses (4,668) (5,422)Other gains - 607Other expenses (803) (375)Operating profit 6,162 7,989

Analysed as:Operating profit before exceptional items 7,263 9,407Exceptional items 6 (1,101) (1,418)Operating profit 6,162 7,989

Finance income 10 476 164Finance costs 10 (1,712) (1,890)Finance costs - exceptional 6, 10 (867) -Share of loss of associate and joint venture 19 - (41)Profit before income tax 4,059 6,222

Income tax expense 12 (1,640) (770)Profit for the year from continuing operations 2,419 5,452

Discontinued operationsProfit from discontinued operations (net of income tax) 13 18,717 4,547Profit for the year 21,136 9,999

Profit for year attributable to:Owners of the parent company 21,600 10,497Non-controlling interest (464) (498)Profit for the year 21,136 9,999Earnings per share from continuing and discontinued operations attributable to the owners of the Company during the year:


Basic earnings per ordinary share (pence)From continuing operations 2.30 4.75From discontinued operations 14.92 3.63From profit for the year 15 17.22 8.38

Diluted earnings per ordinary share (pence)From continuing operations 2.29 4.71From discontinued operations 14.90 3.61From profit for the year 15 17.19 8.32


M G Bourke A M Comerford (Chief Executive) (Executive Director - Finance & Risk)

Consolidated Income StatementYear Ended 31 December 2012


Consolidated Statement of Comprehensive IncomeYear Ended 31 December 2012

Notes 2012

£’000

2011 Re-presented

£’000

Profit for the year 21,136 9,999

Other comprehensive loss:Actuarial losses on retirement benefit obligation - discontinued operations 28 (89) (43)Foreign currency translation differences (1,255) (2,413)Currency translation differences recycled - discontinued operations 13 (191) -Other comprehensive loss (1,535) (2,456)Total comprehensive income for the year 19,601 7,543

Total comprehensive income attributable to: - Owners of the Company 20,055 8,021- Non-controlling interest (454) (478)Total comprehensive income for the year 19,601 7,543

Total comprehensive income attributable to owners of the Company:- Continuing operations 1,618 3,439- Discontinued operations 18,437 4,582Total comprehensive income attributable to owners of the Company 20,055 8,021


Consolidated Balance SheetAs at 31 December 2012

Notes 2012£’000

2011 £’000

ASSETSNon-current assetsProperty plant and equipment 17 2,866 5,243Intangible assets 18 68,154 107,780Available-for-sale financial assets 22 - 100Other non-current assets 23 - 730Total non-current assets 71,020 113,853

Current assetsTrade and other receivables 24 22,374 37,931Current income tax asset - 378Cash and cash equivalents 25 27,325 32,261Total current assets 49,699 70,570Total assets 120,719 184,423

LIABILITIESNon-current liabilitiesBorrowings 26 6,591 32,842Deferred income tax liabilities 20 2,317 5,416Retirement benefit obligations 28 - 1,760Other non-current liabilities 29 - 2,289Provisions for other liabilities 30 1,612 110Total non-current liabilities 10,520 42,417

Current liabilitiesTrade and other payables 31 23,954 35,153Current income tax liabilities 1,117 -Borrowings 26 143 8,561Derivative financial instrument 27 - 3Provisions for other liabilities 30 4,487 3,218Total current liabilities 29,701 46,935Total liabilities 40,221 89,352Net assets 80,498 95,071

EQUITYShare capital 32 9,949 11,785Share premium 32 81,141 80,879Other reserves 33 (3,950) (4,665)Retained earnings (6,651) 6,810

80,489 94,809Non-controlling interest 34 9 262Total equity 80,498 95,071


M G Bourke A M Comerford (Chief Executive) (Executive Director - Finance & Risk)


Notes 2012£’000

2011 £’000

Cash flows from operating activities Cash generated from operations 37 11,639 14,151Interest received 487 194Income taxes paid (1,201) (2,106)Net cash generated from operating activities 10,925 12,239

Cash flows from investing activitiesPurchase of property, plant and equipment (536) (907)Sale of property, plant and equipment 9 5Purchase of subsidiary undertakings net of cash acquired - (211)Sale of International Segment 56,743 -Purchase of intangible assets (645) (1,196)Net cash generated/(used) in investing activities 55,571 (2,309)

Cash flows from financing activitiesDividends paid (4,536) (5,742)Interest paid (1,800) (1,490)Proceeds from issue of share capital 306 309Share buy-back (30,386) -Proceeds from long-term borrowings 7,000 49,956Repayment of debt (42,358) (57,554)Payment of finance lease liabilities (2) (11)Net cash used in financing activities (71,776) (14,532)

Net decrease in cash and cash equivalents (5,280) (4,602)

Cash and cash equivalents at the beginning of the year 32,244 36,893

Effect of foreign exchange rate changes 218 (47)Cash and cash equivalents at end of year 27,182 32,244

Cash and cash equivalents for the purpose of the statement of cash flows are comprised of cash and short term deposits net of bank overdrafts. For the purpose of the cash flow statement cash and cash equivalents include the following:

2012£’000

2011 £’000

Cash and short term deposits - as disclosed on the balance sheet 27,325 32,261Bank overdrafts (143) (17)

38 27,182 32,244

Consolidated Cash Flow StatementAs at 31 December 2012


Sharecapital

Sharepremium

Otherreserves

Retainedearnings

Attributableto owners of

the parent

Non-controlling

interest

Totalequity

£’000 £’000 £’000 £’000 £’000 £’000 £’000

At 1 January 2011 11,648 80,613 (2,501) 2,098 91,858 (41) 91,817

Total comprehensive income for 2011Profit/(loss) for year - - - 10,497 10,497 (498) 9,999

Other comprehensive incomeCurrency translation differences - - (2,433) - (2,433) 20 (2,413)Actuarial losses on retirement benefit obligation - - - (43) (43) - (43)Other comprehensive (loss)/income - - (2,433) (43) (2,476) 20 (2,456)Total comprehensive income for the year - - (2,433) 10,454 8,021 (478) 7,543

Dividends - - - (5,742) (5,742) - (5,742)Issue of share capital 137 266 (94) - 309 - 309Other - - (68) - (68) - (68)Share based payment compensation- Value of employee services - share options - - 282 - 282 - 282- Value of employee services - LTIP - 149 149 - 149Investment by non-controlling interest - - - - - 781 781Transaction with owners 137 266 269 (5,742) (5,070) 781 (4,289)At 31 December 2011 11,785 80,879 (4,665) 6,810 94,809 262 95,071

Total comprehensive income for 2012Profit/(loss) for year - - - 21,600 21,600 (464) 21,136

Other comprehensive incomeCurrency translation differences - - (1,456) - (1,456) 10 (1,446)Actuarial losses on retirement benefit obligation - - - (89) (89) - (89)Other comprehensive (loss)/income - - (1,456) (89) (1,545) 10 (1,535)Total comprehensive income for the year - - (1,456) 21,511 20,055 (454) 19,601

Dividends - - - (4,536) (4,536) - (4,536)Issue of share capital 77 281 (33) - 325 - 325Other - (19) - - (19) - (19)Share buy-back (1,913) - 1,913 (30,436) (30,436) - (30,436)Sale of International Segment - - - - - (26) (26)Share based payment compensation - Value of employee services - share options - - 291 - 291 - 291Investment by non-controlling interest - - - - - 227 227Transaction with owners (1,836) 262 2,171 (34,972) (34,375) 201 (34,174)At 31 December 2012 9,949 81,141 (3,950) (6,651) 80,489 9 80,498

Consolidated Statement of Changes in Equity


1. General information

IFG Group plc (“the Company”) and its subsidiaries (together “the Group”) are engaged in the provision of services and commissions earned in the intermediation of financial service products. The Company is a public company, listed on the Irish and London Stock Exchanges and is incorporated and domiciled in the Republic of Ireland. The address of its registered office is IFG House, Booterstown Hall, Booterstown, County Dublin, Ireland.

2. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these Group financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation

The Group financial statements of IFG Group plc for the year ended 31 December 2012 have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS) and those parts of the Companies Acts 1963 to 2012 applicable to companies reporting under IFRS. The Group financial statements are prepared under the historical cost convention, as modified by fair value accounting for certain available-for-sale financial assets and derivative instruments at fair value through profit or loss. The financial statements are presented in GBP, the most representative currency of the Group’s operations and rounded to the nearest thousand.

The preparation of financial statements, in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group financial statements are disclosed in note 4.

Comparative information

On 5 July 2012, IFG Group plc sold the International Segment to AnaCap Financial Partners II LP. This is consistent with the Group’s long-term strategic priority to drive growth and improve returns by focusing on its remaining pensions administration and personal advisory business. For the purpose of the financial statements and in accordance with the requirements of IFRS 5, the results and cash flows of the International Segment have been classified as ‘discontinued operations’ in the Consolidated Income Statement and Consolidated Statement of Comprehensive Income, for which the comparatives have been re-presented. See note 13 for further details.

During the year, final accounting for the acquisition of A.R.B Underwriting Limited and its subsidiary A.R. Brassington & Co Limited (ARB) was completed. As a result, the 2011 comparative information has been revised to include the effects of measurement period adjustments as if the accounting for the business combination had been completed on the acquisition date. See note 14 for further details.

Except as indicated above, the Group financial statements have been prepared on a basis consistent with that reported for the year ended 31 December 2011.

Going concern

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore the Group continues to adopt the going concern basis in preparing its financial statements. In arriving at this conclusion the Board took account of:

Notes to the Group Financial Statements


n the Group’s business activities, together with the factors likely to affect future development, performance and position, which are outlined in the ‘Group Performance’ section;

n the financial position of the Group, its cash flows, liquidity position and borrowing facilities, which are outlined in the ‘Group Financing’ section; and

n the Group’s exposures and management of financial risks, which are outlined in the ‘Principal Risks and Uncertainties’ section.

2.2 Consolidation

These financial statements are the Group financial statements of IFG Group plc, a company registered in the Republic of Ireland and its subsidiaries (“IFG”).

Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights, that are currently exercisable or convertible, are considered when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de facto control. De facto control may arise in circumstances where the size of the Group’s voting rights, relative to the size and dispersion of holdings of other Shareholders, give the Group the power to govern the financial and operating policies, etc.

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

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

Acquisition-related costs are expensed as incurred.

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

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

For all business combinations since the date of transition to IFRS completed before the adoption of IFRS 3 (revised), ‘Business combinations’ adjustments, to the present value of the obligation arising from changes in estimates, are accounted for as changes to the cost of the acquisition and goodwill.



Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed, where necessary, to ensure consistency with the policies adopted by the Group.

(a) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(b) Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost with the change in carrying amount recognised in the Consolidated Income Statement. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in Other Comprehensive Income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in Other Comprehensive Income are reclassified to profit or loss.

Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in Other Comprehensive Income is reclassified to profit or loss, where appropriate. The Group’s share of post-acquisition profit or loss is recognised in the Consolidated Income Statement with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss) of an associate’ in the Consolidated Income Statement.



Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed, where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising from investments in associates are recognised in the Consolidated Income Statement.

Joint Ventures

A joint venture is an entity established to engage in economic activity, which the Group jointly controls with its fellow venturers.

The Group financial statements incorporate a share of the results, assets and liabilities of joint ventures using the equity method of accounting, where the investment in the joint venture is carried at cost plus post-acquisition changes in the share of net assets of the joint venture, less any provision for impairment.

Losses in excess of the consolidated interest in joint ventures are not recognised, except where the Group has made a commitment to make good those losses.

Accounting policies of joint ventures have been changed, where necessary, to ensure consistency with the policies adopted by the Group.

The results of joint ventures acquired or disposed of, during the year, are included in the Consolidated Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

2.3 Segment reporting

A segment is a distinguishable component of the Group that is engaged in provision of services to earn revenue and incur expenses. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The Chief Operating Decision Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Chief Executive Officer as he makes the strategic decisions for the Group and allocates resources to each segment on the basis of segment information. The Group has determined that following the sale of the International segment its operating segments - UK and Ireland are its reportable operating segments. Refer to note 5 for further details.

2.4 Foreign currency translation

Items recorded in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The Group financial statements are presented in pounds Sterling (‘GBP or ‘£’), which is the Company’s functional and presentation currency rounded to the nearest thousand.

Transactions denominated in foreign currencies are translated into the functional currency at the rate of exchange ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. All translation differences are taken to the Consolidated Income Statement, with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to



equity, together with the exchange difference on the net investment in the foreign entity, until the disposal of the net investment, at which time they are recognised in the Consolidated Income Statement.

Results of subsidiary undertakings with different functional currency to the parent are translated into GBP using average exchange rates during the year, unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rates prevailing on the transaction dates. The related balance sheets have been translated using the rates of exchange ruling at the end of the reporting period. Adjustments arising on translation of the results of subsidiary undertakings with different functional currency to the parent at average rates, and on the restatement of the opening net assets at closing rates, are recorded in Other Comprehensive Income.

The cumulative currency translation differences arising prior to transition to IFRS have been set to zero for the purposes of ascertaining the gain or loss on disposal of a foreign operation. This was achieved by the Group electing to avail of the IFRS transitional exemption. On disposal of a foreign operation, accumulated currency translation differences are recognised in the Consolidated Income Statement as part of the overall gain or loss on disposal.

Goodwill and fair value adjustments, arising on acquisition of a foreign operation, are regarded as assets and liabilities of the foreign operation, are expressed in the functional currency of the foreign operation, are recorded at the exchange rate at the date of the transaction and subsequently retranslated at the applicable closing rates.

2.5 Property, plant and equipment

Property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. At the date of transition to IFRS the Group availed of the exemption in IFRS 1 and elected to use previous revaluations of property as deemed cost, given that they were broadly comparable to fair value.

Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the replaced item can be measured reliably. The carrying amount of the replaced part is derecognised. All repair and maintenance costs are charged to the Consolidated Income Statement during the financial period in which they are incurred.

Property, plant and equipment are depreciated over their useful economic life on a straight line basis at the following rates:

Buildings 2% Fixtures & Fittings 10-25% Motor vehicles 20-25% Computer equipment 20-33% Leasehold improvements Lower of useful life and lease period

The residual value and useful life of property, plant and equipment are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset’s residual value and useful life is reviewed and adjusted, if appropriate, at the end of each reporting period.

On disposal of property, plant and equipment, the cost and related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Consolidated Income Statement.



2.6 Intangible assets

Goodwill

Goodwill on acquisitions prior to the date of transition to IFRS has been retained at the previous Irish GAAP amount, being its deemed cost subject to being tested for impairment. Goodwill written off to reserves under Irish GAAP prior to 1998 had not been reinstated and is not included in determining any subsequent gain or loss on disposal.

Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration transferred over the Group’s interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.

For the purposes of impairment testing, any goodwill acquired, at the acquisition date, is allocated to the group of cash-generating units expected to benefit from the business combination. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit or group of cash-generating units, to which the goodwill relates. Impairment losses on goodwill are not reversed. Goodwill is monitored at the operating segment level.

Where goodwill forms part of a cash-generating unit or group of cash-generating units 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 on the basis of the relative values of the operation disposed of and the proportion of the cash-generating unit retained.

Computer software

Computer software is stated at cost, less provisions for amortisation and provisions for impairment, if any. Costs incurred on acquisition of computer software are capitalised as are costs directly related to developing the programs where the software supports a business system and the expenditure leads to the creation of a durable asset. Costs associated with maintaining software are recognised as an expense when incurred. Capitalised computer software is amortised over three to eight years. The residual value and useful life of computer software are reviewed and adjusted if appropriate at the end of each reporting period.

Research expenditure is recognised as an expense as incurred. Costs incurred on development projects are recognised as intangible assets when the following criteria are fulfilled:

n it is technically feasible to complete the intangible asset so that it will be available for use;

n management intends to complete the intangible asset to use it;

n there is an ability to use the asset;

n it can be demonstrated how the intangible assets will generate future economic benefits;

n adequate technical, financial and other resources to complete the development are available; and

n the expenditure attributable to the intangible asset during its development can be reliably measured.



Other development expenditure, that does not meet these criteria, are recognised as an expense as incurred. Development costs, previously recognised as an expense, are not recognised as an asset in a subsequent period. Capitalised development costs are recognised as intangible assets and are amortised from the point at which the assets are ready for use on a straight-line basis over their useful lives, and not to exceed five years. Development assets are tested annually for impairment.

Other intangible assets

Other intangible assets are stated at cost less provisions for amortisation and impairment. Customer relationships acquired as part of a business combination are amortised over their estimated useful lives from the time they are first available for use. The estimated useful lives are determined at acquisition date and currently range from seven to fifteen years. The residual value and useful lives of other intangible assets are reviewed and adjusted at the end of each reporting period, if appropriate.

2.7 Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment when events or circumstances indicate that the carrying value may be impaired or may not be recoverable. An impairment loss is recognised to the extent that the carrying value of the assets exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

2.8 Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use.

2.9 Financial assets

Classification

The Group classifies its financial assets in the following categories: loans and other receivables, held to maturity financial assets, available-for-sale financial assets and financial assets at fair value through the profit or loss (usually derivatives not designated as hedges). The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and other receivables

Loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They normally arise when the Group provides services directly to a customer with no intention of trading the receivable. They are included in current assets, except for maturities greater than twelve months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and other receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the Consolidated Balance Sheet.



Held-to-maturity financial assets

Restricted cash comprises cash held by the Group but which is ring-fenced or used as security for specific arrangements, and to which the Group does not have unfettered access. Restricted cash is classified as held to maturity.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either classified in this category or not classified in any other category. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the end of the reporting period.

Financial assets at fair value through profit or loss

Financial assets at fair value, through profit or loss, are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within twelve months, otherwise they are classified as non-current.

Derivative financial instruments

The Group designates certain derivatives as either:

(a) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

(b) hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or

(c) hedges of a net investment in a foreign operation (net investment hedge).

Where derivatives are not designated as hedges they are classified as held for trading.

Options to acquire interests in other entities

The Group assesses all options to acquire interests in an entity that, if exercisable would give control of the entity to the Group. Where such options are exercisable the Group consolidates the entity.

2.10 Recognition and measurement

Regular purchases and sales of financial assets are recognised on the trade date (the date on which the Group commits to purchase or sell the asset). Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed in the Consolidated Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value, through profit or loss, are subsequently carried at fair value. Gains and losses arising from changes in the fair value of available-for-sale financial assets are recorded in equity.

Held-to-maturity financial assets, loans and other receivables are subsequently carried at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the Consolidated Income Statement in the period in which they arise.



Dividend income from financial assets at fair value, through profit or loss, is recognised in the Consolidated Income Statement as part of other income when the Group’s right to receive payments is established.

When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments are included in the Consolidated Income Statement as other gains and losses.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

Options to acquire an interest in an entity which are not currently exercisable are accounted for at fair value.

2.11 Impairment of financial assets

At each reporting date, the Group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired.

A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the counterparty and delinquency in payments are considered to be indicators of a receivable being impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the Consolidated Income Statement. When a trade receivable is uncollectible it is written off against the provision for trade receivables. Subsequent recoveries of amounts previously written off are credited against Cost of Sales in the Consolidated Income Statement.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in the Consolidated Income Statement. It is removed from equity and recognised in the Consolidated Income Statement. Impairment losses recognised in the Consolidated Income Statement on equity instruments are not reversed through the Consolidated Income Statement.

2.12 Accounting for hedging activities

Hedging

At the inception of the hedging transaction, the Group documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair value of hedged items.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is more than twelve months and, as a current asset or liability when the remaining maturity of the hedged item is less than twelve months. Trading derivatives are classified as a current asset or liability. At the year-end, no derivatives were designated as a hedging instrument.



Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the Consolidated Income Statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The Group only applies fair value hedge accounting for hedging fixed interest risk on borrowings. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in the Consolidated Income Statement within Finance Costs. The gain or loss relating to the ineffective portion is recognised in the Consolidated Income Statement within Other Gains or Other Losses where appropriate. Changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk are recognised in the Consolidated Income Statement within Finance Costs. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item, for which the effective interest method is used, is amortised to profit or loss over the period to maturity.

Cash flow hedge

The effective portion of changes in the fair value of derivatives, that are designated and qualify as cash flow hedges, is recognised in Other Comprehensive Income. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Income Statement within Other Gains or Other Losses, where appropriate. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, for example, when the forecast sale that is hedged takes place. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the Consolidated Income Statement. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset, for example a fixed asset, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in depreciation in the case of fixed assets. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity, at that time, remains in equity and is recognised when the forecast transaction is ultimately recognised in the Consolidated Income Statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Consolidated Income Statement within Other Gains or Other Losses where appropriate.

Net investment hedges

Where foreign currency borrowings are designated as a hedge instrument and provide an effective hedge against a net investment in a foreign operation, any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Income Statement. Cumulative gains and losses remain in equity until disposal of the net investment in the foreign operation, at which point the related differences are transferred to the Consolidated Income Statement as part of the overall gain or loss on sale.

2.13 Cash and cash equivalents

Cash and cash equivalents in the Consolidated Balance Sheet comprise cash at bank and in hand as well as short-term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. They are, however, shown as part of borrowings in current liabilities on the Consolidated Balance Sheet.



2.14 Leases

Finance leases, which transfer substantially all the risks and benefits to ownership of the leased asset to the Group, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The corresponding liability, net of interest charges to the lessor, is included in the Consolidated Balance Sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation. Finance charges are charged to the Consolidated Income Statement as part of finance costs over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. Leases where the lessor retains substantially all the risks and benefits of ownership of the assets are classified as operating leases. Operating lease payments are recognised as an expense in the Consolidated Income Statement on a straight line basis over the lease term.

2.15 Borrowings

All borrowings are initially recognised at fair value, net of transaction costs incurred.

After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any transaction costs and any discount or premium on settlement. Gains and losses are recognised in the Consolidated Income Statement when the liabilities are derecognised or impaired, as well as through the amortisation process.

Borrowings are classified as current unless there is an enforceable entitlement to repay balances more than twelve months after the end of the reporting period in which case they are classified as non-current.

2.16 Current and deferred income tax

The income tax expense, in the Consolidated Income Statement, represents the sum of the tax chargeable on profits for the year and deferred tax.

Current tax payable is based on taxable profit for the year. Taxable profit differs from profit before income tax as reported in the Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or deductible. The Group’s liability for current tax is calculated using rates that have been enacted or substantially enacted at the end of the reporting period. Any taxation not payable within twelve months is disclosed as a non-current liability.

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

Deferred income tax is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates except to the extent that the timing of the reversal is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.



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

The carrying amount of deferred income tax assets is reviewed at each end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit would be available to allow all or part of the deferred income tax asset to be utilised.

2.17 Employee benefits

(a) Pension assets/obligations

The Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies or trustee-administered funds, determined by periodic actuarial calculations.

Defined contribution plans

A defined contribution plan is a pension plan where the Group pays a fixed amount to a separate entity. The Group has no further legal or constructive obligations to pay further contributions once the fixed contributions have been paid.

Obligations to the defined contribution pension plans are recognised as an expense in the Consolidated Income Statement as incurred.

Defined benefit plan

A defined benefit plan is a pension plan that is not a defined contribution plan. Defined benefit plans typically define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

Until 5 July 2012, the Group operated a defined benefit pension scheme via its subsidiary IFG Management Limited for eligible employees which require contributions to be made to separately administered funds. This subsidiary was sold as part of the disposal of the International Segment. The Group’s net obligation in respect of the defined benefit pension scheme was calculated by an external actuary who estimated the amount of future benefits that employees have earned in return for their service in the current and prior periods. That benefit was discounted to determine its present value. The liability recognised on the balance sheet was the present value of the future benefit less the fair value of any plan asset, together with adjustments for unrecognised past service costs. The discount rate employed in determining the present value of the scheme’s liabilities was determined by reference to market yields at the end of the reporting period on high quality corporate bonds for a term consistent with the currency and term of the associated post-employment benefit obligations.

Actuarial gains and losses comprised the effects of differences between the previous actuarial assumptions and what had actually occurred as well as the effects of changes in actuarial assumptions. Those gains and losses were charged or credited to equity in Other Comprehensive Income in the period in which they arose.

The net surplus or deficit arising in the Group’s defined benefit pension scheme was shown within either non-current assets or liabilities on the face of the Consolidated Balance Sheet.

Past service costs were recognised as an expense over the average period until the benefits became vested, in which case the past service costs were recognised as an expense immediately. To the extent that the benefits vested immediately, the expense was recognised immediately in the Consolidated Income Statement.



The amounts charged to the Consolidated Income Statement in respect of the defined benefit plan consisted of current service cost, interest cost, the expected return of any plan assets, the effect of any curtailments or settlements and past service costs.

(b) Share based payment compensation

In line with the transitional arrangements set out in IFRS 2, ‘Share Based Payment’, the recognition and measurement principles of this standard have been applied only in respect of share entitlements granted after 7 November 2002 and not vested by 1 January 2005.

The Group operates a number of equity-settled, share-based compensation plans. The fair value of the employee services received in exchange for the equity instrument granted is recognised as an employee expense in the Consolidated Income Statement with a corresponding increase in equity. The fair value of share options is determined using the Black-Scholes model while the fair value of shares awarded is estimated as the market price of the shares at the grant date. The total amount to be expensed over the vesting period is determined by reference to the fair value of the equity instrument granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of equity instruments that are expected to vest. At each end of the reporting period, the entity revises its estimates of the number of equity instruments that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the Consolidated Income Statement, with a corresponding adjustment to equity over the remainder of the vesting period.

The proceeds received by the Company, when share options are exercised, are credited to share capital at nominal value and share premium. In instances where shares are issued under the LTIP, the difference between the proceeds received and the nominal value of the shares is credited to other reserves.

The Group does not operate any cash-settled share-based payment schemes or share-based payment transactions with cash alternatives as defined in IFRS 2.

2.18 Provisions

A provision is recognised in the Consolidated Balance Sheet when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits would be required to settle the obligation and the amount has been reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. An increase in provision due to passage of time is recognised as an interest expense.

2.19 Revenue recognition

Revenue comprises fees from the provision of services and commissions earned in the intermediation of financial service products. Revenue is recognised when, and to the extent that, the Group has obtained the right to consideration in exchange for the services that it provides.

Accordingly, initial commissions from the intermediation of financial services are recognised as revenue on the effective inception date of the product or service, subject to a reduction for expected clawback where commission is earned on an indemnity basis. Renewal or trail commissions are recognised as revenue when the contingent events, which give rise to the right to receive those commissions, typically renewal or persistency, have occurred.



Where the Group receives payment from customers in advance of the performance of its contractual obligations, a liability equal to the amount received is recognised as deferred income. That liability is reduced and the amount of the reduction is recognised as revenue when, and as, the Group obtains the right to consideration in exchange for the contracted service it provides.

2.20 Finance cost and finance income

Finance cost comprises interest payable on borrowings calculated using the effective interest rate method. The interest expense component of finance lease payments is recognised in the Consolidated Income Statement using the effective interest rate method. The unwinding of the discount rate on provisions is included as finance cost.

Finance income includes interest receivable on funds invested and is recognised in the Consolidated Income Statement on a time proportion basis, using the effective interest method.

2.21 Share capital

Ordinary shares that have been issued are classified as equity and confer on the holder a residual interest in the assets of the Group after deducting all of its liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs, is deducted from equity attributable to the Company’s owners until such shares are cancelled, reissued or disposed. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s owners.

2.22 Dividends

Dividends on ordinary shares are recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s Shareholders. Dividends declared after the end of the reporting period are disclosed in note 16 in the financial statements.

2.23 Offset

Financial assets and liabilities are offset and the net amount reported in the Consolidated Balance Sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise an asset and settle the liability simultaneously.

2.24 Exceptional items

The Group has adopted an income statement format, which seeks to highlight significant items within the Group results for the year. Such items include restructuring, impairment of assets, profit or loss on disposal or termination of operations, litigation settlements, unamortised transaction costs arising from early termination of borrowings, profit or loss on disposal of investments and the acquisition and integration costs relating to major acquisitions. Judgement is used by the Group in assessing the particular items, which by virtue of their scale and nature, should be disclosed in the Consolidated Income Statement and/or notes as exceptional items. These items require separate disclosure in the financial statements to enable a better understanding of the Group’s financial performance.



2.25 Discontinued operations

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of, is held for sale or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period.

2.26 Updates to technical pronouncements

(a) New standards, amendments and interpretations effective for years ending 31st December 2012;

n Amendment to IFRS 7 ‘Disclosures – Transfer of financial assets’, (effective for financial periods beginning on or after 1 July 2011). The amendment was EU endorsed on 23 November 2011. The amendment addresses disclosures required to help users of financial statements evaluate the risk exposures relating to transfer of financial assets and the effect of those risks on an entity’s financial position. The Group adopted the amendment from 1 January 2013. This information has been disclosed in note 3.

(b) New standards, amendments and interpretations issued but not yet effective;

The following standards, amendments and interpretations have been issued but are not yet effective for the Group. The Group will apply the relevant standards from their EU effective dates and is currently assessing their impact on its financial statements.

n Amendment to IAS 12, ‘Recovery of underlying assets’. The amendment was EU endorsed on 29 December 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2013. The amendment provides a practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model in IAS 40 Investment Property. The Group will apply the amendment in the accounting period beginning 1 January 2013. It is not expected to have a significant impact on the Group.

n Amendment to IAS 19, ‘Employee benefits’, (effective for financial periods beginning on or after 1 January 2013). The amendment was EU endorsed on 6 June 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2013. The amendment makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and increases the volume of disclosures. The Group will apply the revised IAS 19 in the accounting period beginning 1 January 2013. This is expected to have a limited impact on the financial statements following the disposal of the International Segment within which the defined benefit scheme was held.



n Amendment to IAS 1, ‘Presentation of items of other comprehensive income (OCI)’, (effective for financial periods beginning on or after 1 July 2012). The amendment was EU endorsed on 6 June 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 July 2012. The amendment introduces a requirement for entities to group items of OCI on the basis of whether they are potentially reclassifiable to profit or loss subsequently. The Group will apply this amendment in the accounting period beginning 1 January 2013. This is expected to have a limited impact on the Group.

n Amendment to IFRS 7, ‘Disclosures – Offsetting financial assets and financial liabilities’, (effective for financial periods beginning on or after 1 January 2013). The amendment was EU endorsed on 29 December 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2013. The amendment enhances current disclosures about offsetting financial assets and financial liabilities. The Group does not anticipate this will have a significant impact on the financial statements and will apply the amendments in the accounting period beginning 1 January 2013.

n Amendment to IAS 32, ‘Offsetting financial assets and financial liabilities’, (effective for financial periods beginning on or after 1 January 2014). The amendment was EU endorsed on 29 December 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. The amendment clarifies some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. The Group is yet to assess the amendments to the full impact of IAS 32 and intends to adopt IAS 32 no later than the accounting period beginning on or after 1 January 2014.

n IFRS 10, ‘Consolidated financial statements’, (effective for financial periods beginning on or after 1 January 2013). The standard was EU endorsed on 29 December 2012, and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 and SIC 12. IFRS 10 changes the definition of control so that the same criteria are applied to all entities to determine control. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single entity remains unchanged, as do the mechanics of consolidation. IAS 27 is renamed ‘Separate financial statements’ and is now a standard dealing solely with separate financial statements. The Group is yet to assess the full impact of IFRS 10 and intends to adopt IFRS 10 in the accounting period beginning 1 January 2014.

n IFRS 11, ‘Joint arrangements’, (effective for financial periods beginning on or after 1 January 2013). The standard was EU endorsed on 29 December 2012, and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. IFRS 11 eliminates the existing accounting policy choice of proportionate consolidation for jointly controlled entities. IFRS 11 makes equity accounting mandatory for participants in joint ventures. Changes in definitions also mean that the ‘types’ of joint arrangements have been reduced from three to two; joint operations and joint ventures. IFRS 11 also made a number of consequential amendments to IAS 28, ‘Investments in associates and joint ventures’. The Group is yet to assess the full impact of IFRS 11 and intends to adopt IFRS 11 in the accounting period beginning 1 January 2014.



n IFRS 12, ‘Disclosure of interests in other entities’, (effective for financial periods beginning on or after 1 January 2013). The standard was EU endorsed on 29 December 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. IFRS 12 sets out the required disclosures for entities reporting under IFRS 10 and IFRS 11. IFRS 12 requires entities to disclose information about the nature, risks and financial effects associated with the entity’s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. The Group is yet to assess the full impact of IFRS 12 and intends to adopt IFRS 12 in the accounting period beginning 1 January 2014.

n IFRS 13, ‘Fair value measurement’, (effective for financial periods beginning on or after 1 January 2013). This standard was EU endorsed on 29 December 2012 and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2013. IFRS 13 explains how to measure fair value and enhances fair value disclosures. The Group does not expect this to have a significant effect in its financial statements and intends to adopt IFRS 13 in the accounting period beginning 1 January 2013.

n IAS 27 (revised 2011), ‘Seperate financial statements’, (effective for financial periods beginning on or after 1 January 2013). The standard was EU endorsed on 29 December 2012, and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. Consolidation requirements previously forming part of IAS 27 (2008) have been revised and are now contained in IFRS 10 ‘Consolidated Financial Statements’. The Group is yet to assess the full impact of IAS 27 (revised 2011) and intends to adopt it in the accounting period beginning 1 January 2014.

n IAS 28 (revised 2011), ‘Associates and joint ventures’, (effective for financial periods beginning on or after 1 January 2013). The standard was EU endorsed on 29 December 2012, and is effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. IAS 28 (revised 2011) includes the requirements for associates and joint ventures that have to be equity accounted following the issue of IFRS 11 ‘Joint arrangements’. The Group is yet to assess the full impact of IAS 28 (revised 2011) and intends to adopt it in the accounting period beginning 1 January 2014.

n Amendment to IFRS 10 and IFRS 12, ‘Investment Entities’, (effective for financial periods beginning on or after 1 January 2014). The amendments are subject to EU endorsement. The amendment provides certain consolidation exemptions to funds and similar entities from consolidating controlled investees in certain circumstances. The Group will apply the amendments from the EU effective date, once endorsed.

n Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12); (effective for financial periods beginning on or after 1 January 2014). The amendments were EU endorsed on 5 April 2013, and are effective for EU adopted IFRS preparers in financial periods beginning on or after 1 January 2014. The amendments clarify the Board’s intention when first issuing the transition guidance in IFRS 10 and provide similar relief from the presentation or adjustment of comparative information for periods prior to the immediately preceding period. The Group is yet to assess their full impact and intends to adopt them in the accounting period beginning 1 January 2014.

n Improvements to IFRSs (2009-2011), (effective for financial periods beginning on or after 1 January 2013). The amendments were EU endorsed on 28 March 2013 and are effective for EU IFRS preparers in financial periods beginning on or after 1 January 2013. The Group will apply the amendments in the accounting period beginning 1 January 2013. They are not expected to have a material impact on the Groups’ financial statements.



n IFRS 9, ‘Financial instruments’, (effective for financial periods beginning on or after 1 January 2015). This standard is still subject to EU endorsement. IFRS 9 is the first step in the process to replace IAS 39, ‘Financial instruments: recognition and measurement’. IFRS 9 introduces new requirements for classifying and measuring financial assets and is likely to affect the group’s accounting for its financial assets. IFRS 9 replaces the multiple classification models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value. Classification under IFRS 9 is driven by the entity’s business model for managing financial assets and the contractual characteristics of the financial assets. IFRS 9 removes the requirement to separate embedded derivatives from financial asset hosts. IFRS 9 removes the cost exemption for unquoted equities. The Group is yet to assess the full impact of IFRS 9 and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January 2015.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

3. Financial and capital risk management

Financial risk management

The Group’s activities expose it to a number of financial risks: market risk (including interest rate risk and foreign currency risk), credit risk and liquidity risk. The Group’s finance function seeks to reduce its exposure to these risks. It also ensures surplus funds are managed and controlled in a manner which will protect capital sums invested and ensures adequate short-term liquidity, whilst maximising returns. It does not operate as a profit centre and transacts only in relation to underlying business requirements. It operates policies and procedures which are periodically reviewed and approved by the Board of Directors. The Board provides written policies for overall risk management.

(a) Market risk

Interest rate risk

The Group has no significant interest bearing exposures other than bank balances and borrowings. Interest rate risk arising from the Group’s borrowings is managed through the utilisation of interest rate swaps when conditions are favourable. The Group centrally manages the short-term cash surpluses or borrowing requirements of subsidiary companies. During 2012, the Group’s borrowings, which were drawn down at variable rate, were denominated in GBP. At 31 December 2012, if interest rates had increased/decreased by 1% with all other variables held constant, profit for the year would have been £66,000 (2011: £414,000) lower/higher.

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to euro (€). Foreign exchange transaction exposure in the Group is mitigated by the fact that trading entities in the Group tend to have the majority of their revenues and expenses denominated in their functional currencies. Although the Group has extensive United Kingdom operations, it also has investments outside the United Kingdom. As a result, currency movements, particularly movements in the GBP/Euro exchange rate, can affect the Group’s GBP Consolidated Balance Sheet and Consolidated Income Statement. The Group also has transactional currency exposures arising from sales or purchases by subsidiaries in currencies other than the subsidiaries’ operating functional currency.



The Group’s policy in regard to foreign exchange translation exposure is to, on occasion, use foreign currency borrowings to hedge the impact of exchange rate movements on the Group’s Consolidated Balance Sheet and to use forward foreign exchange contracts to mitigate the impact of exchange rate movements on the Group’s Consolidated Income Statement, when the Group considers it economically viable to do so. In order to achieve this objective, the Group uses its borrowings, where practicable and cost effective, partially to hedge its foreign currency denominated assets. At the end of 2012, no foreign borrowings were used as a hedge of the Group’s net investments in its subsidiaries.

At 31 December 2012, if Euro had weakened/strengthened by 10% against GBP with all other variables held constant, post tax profit for the year would have been £132,000 (2011: £771,000) lower/higher mainly as a result of foreign exchange gains/losses on translation of Euro denominated assets.

(b) Credit risk

The Group has a credit policy in place and monitors credit risk on an ongoing basis. Credit risk is managed at both the Group level and the subsidiary level. It largely arises from exposures in respect of cash and short-term deposits with banks as well as credit exposures to customers.

Credit risk is managed by limiting the aggregate amount and duration of exposure to counterparties. These judgements are made after taking into account the counterparty’s credit rating and by regular monitoring of these ratings. Acceptable credit ratings are medium-to-high investment grade ratings for cash and cash equivalents. Customers who wish to avail of credit terms with the Group are subject to credit evaluations prior to credit being advanced and are subject to continued monitoring at operating company level. The Group does not hold collateral in respect of amounts receivable from customers.

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group’s customer base as these factors may have an influence on credit risk. At the end of the reporting period, management believes that there were no concentrations of credit risk in respect of trade receivables due to the large number of customers spread across the Group’s activities and areas of operation. An impairment provision amounting to 9% of the trade and other receivables (2011: 10%) has been made at year end. At year end 75% of the trade and other receivables balances were classified as neither past due or impaired (2011: 60%). The maximum exposure to credit risk is represented by the carrying value of each receivable in the Consolidated Balance Sheet.

Management monitors credit ratings of banks and financial institutions to which the Group has exposure and where necessary addresses concentration risk by reducing its exposure to individual banks. Cash, cash equivalents and borrowings are held with acceptable banks, as required by the banking facility agreement.

At 31 December 2012, the Group had 81% (2011: 83%) of its cash, cash equivalents and borrowings held with institutions with Standard & Poor’s rating of equal to and greater than an A rating. The remaining balances were with institutions permitted by the Group’s bank facility agreement.

The Group’s maximum exposure to credit risk in respect of cash and cash equivalents during the year end is the carrying value of the balance.



(c) Liquidity risk

Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group finance. Group finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (note 26), at all times so that the Group does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements - for example, currency restrictions. The Group maintains long-term committed facilities that are managed to ensure it has sufficient available funds for operations and planned expansions.

The principal liquidity risks faced by the Group relate to the maturity profile of debt obligations. The Group’s finance function ensures that sufficient resources are available to meet such liabilities as they fall due through a combination of liquid investments, cash and cash equivalents, cash flows and undrawn committed bank facilities. Flexibility in funding sources is achieved through a variety of means including (i) maintaining cash and cash equivalents with a range of highly-rated counterparties; (ii) limiting the maturity of such balances; (iii) borrowing the bulk of the Group’s debt requirements under committed bank lines; and (iv) having surplus committed lines of credit.

The undrawn committed facilities available to the Group, as at the end of the reporting period, are quantified in note 26.

On sale of the International Segment on 5 July 2012, the Group received cash consideration of £70.0 million. The Group repaid the borrowings of £42.3 million relating to its facility. On 29 November 2012, the Group entered into a new facility agreement with Barclays Bank Ireland plc for a facility of £25.0 million. An amount of £7.0 million is to be repaid in December 2017.

These facilities are available to meet current foreseeable borrowing requirements.

The following is an analysis of the anticipated contractual cash flows including interest payable for the Group’s non-derivative financial liabilities and derivative financial liabilities on an undiscounted basis. Derivative financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. For the purpose of this table, debt is defined as all classes of borrowing except for obligations under finance leases. Interest is calculated based on debt held at 31 December without taking account of future issuance. Floating rate interest is estimated using the prevailing rate at the end of the reporting period. Cash flows in foreign currencies are translated using the exchange rates at 31 December 2012.

Comparative information has been re-presented as permitted by the amendments to IFRS 7 for the liquidity risk disclosures.



Debt 1 Intereston debt

Tradepayables

& accruals 2

Other liabilities

Derivativefinancial

instruments

Obligationsunder

financeleases

Financecharge on

financelease

obligations

Total

At 31 December 2012 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Due less than one year 143 210 14,002 - - - - 14,355Between one and two years - 420 - - - - - 420Between two and five years 7,000 403 - - - - - 7,403Total 7,143 1,033 14,002 - - - - 21,178

At 31 December 2011

Due less than one year 8,559 252 19,924 - 3 2 - 28,740Between one and two years 21,910 659 - 2,289 - - - 24,858Between two and five years 10,932 335 - - - - - 11,267Total 41,401 1,246 19,924 2,289 3 2 - 64,865

1 For the purposes of this table debt is defined as all classes of borrowing other than finance lease liabilities.

2 The maturity analysis applies to financial instruments only and therefore non-financial liabilities are not included.

Capital risk management

The Group’s primary objective in respect of capital risk management is to safeguard its ability to continue as a going concern in order to provide returns for its members.

The Group may, on occasion, adjust the amount of dividends paid out to its members, return capital to members and issue new shares or buy back shares as the need arises.

Capital is monitored on the basis of the gearing ratio which is calculated as net commitment divided by total capital. Net commitment is calculated as the sum of total borrowings and contingent consideration on acquisitions less cash and cash equivalents. Total capital is calculated as the market value of ordinary shares in issue plus net debt. At year end the gearing ratio was (18)% (2011: 8%) as the Group’s borrowings were reduced during the year.

The Group’s bank facilities require the Group to maintain its consolidated EBITDA/net debt (excluding share of joint ventures) at no lower than 2.5 times for twelve month periods ending 30 June and 31 December. Non-compliance with financial covenants would give the relevant lenders the right to terminate facilities and demand early repayment of any sums due under such facilities thus altering the maturity profile of the Group’s debt and liquidity. The Group monitors compliance with financial covenants on a quarterly basis and the consolidated net debt position is reviewed regularly by the Board of Directors. At the balance sheet date, the Group is in compliance with the financial covenants and expects to be so for the foreseeable future based on current budgets and forecasts.



Fair value estimation

The disclosure of fair value measurements by valuation method has been done using the following fair value measurement hierarchy:

n Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

n Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

n Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

At the year end there were no financial instrument assets or liabilities measured at fair value (2011: £100,000 of financial instrument assets were classified as level 3 and £3,000 of financial instrument liabilities were classified as level 2 ).

The following table presents an analysis of the changes in financial assets and liabilities classified as level 2 and 3 which comprise of available for sale financial assets and financial derivative liabilities for the years ended 31 December 2011 and 31 December 2012.

Year ended 31 December 2012 Year ended 31 December 2011

Available for sale financial

assets

Financial derivative

liability

Total Available for sale financial

assets

Financial derivative

liability

Total

£’000 £’000 £’000 £’000 £’000 £’000Opening balance 100 (3) 97 100 (14) 86(Losses)/gains recognised in profit or loss (100) 3 (97) - 11 11Closing balance - - - 100 (3) 97

The available-for-sale financial instrument relates to unquoted shares held by the Group, which were disposed of in 2012 as the balance was included in the assets of the International Segment. The financial derivative liability in 2011 related to a forward foreign exchange contract outstanding at the year end 2011. There were no financial derivative liabilities/assets outstanding at the year end 2012.

Changes in fair value of the financial derivative liability of £3,000 (2011: £11,000) is included within Other Expenses in the Consolidated Income Statement. There have been no transfers from level 3 in 2012 (2011: no transfers in either direction). The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely, as little as possible, on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

The Group has used discounted cash flow analysis for various available-for-sale financial assets that are not traded in active markets.



4. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.

(a) Goodwill impairment

In accordance with the accounting policy stated in note 2.7 the Group tests annually whether goodwill has been impaired. The recoverable amounts of groups of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of significant estimates with regards to discount rates, long term growth rates and the estimated cash flows for the five year period 2013 to 2017 as stated in note 18.

(b) Non goodwill intangible assets

The estimated useful lives of intangibles are determined at acquisition date and reviewed at each balance sheet date. The estimated useful lives currently range from three to fifteen years. Intangibles are tested for impairment if impairment indicators are identified. In 2012, the continuing amortisation charge was £4,270,000 (re-presented continuing 2011: £4,111,000). If, in 2012, the amortisation period was shortened by one year for all categories of intangibles, other than goodwill, it would have resulted in an additional continuing amortisation charge in the year of £482,000 (re-presented continuing 2011: £389,000).

(c) Provision for impairment of receivables

Management reviews the recoverability of receivables taking into account objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. At 31 December 2012, a provision of £1,863,000 (2011: £3,532,000) was made excluding a provision of £800,000 in relation to amounts due from an entity IFG jointly controls. See notes 6 and 24 for further details.

(d) Provisions for legal and other claims

The financial statements include provisions to cover certain legal and other claims brought against some subsidiaries of the Group. The provisions recorded represent management’s best estimate of the exposures based on information available at the time of the approval of the accounts. These estimates will, by definition, differ from the related actual outturn. See note 30 for more detail.

(e) Working capital adjustment on International Segment disposal

The terms of the International Segment sale agreement provide for a working capital adjustment to the £70.0 million disposal consideration received based on a completion balance sheet. As at the date of the approval of the financial statements there are on-going negotiations with the purchaser as to the final value of the working capital adjustment. The gain on sale of the International Segment is net of a provision of £3.0 million in respect of this matter. This is management’s best estimate of the adjustment that is required in order to finalise the process with regards to the disposal of the Segment. A provision of £0.5 million has been made for other indemnities relating to the International Segment.



Management also exercise judgment in determining the revenue and expenses disclosed as exceptional items. Note 6 of the financial statements include a table outlining details of the items classified as exceptional for the current and prior year.

5. Segmental information

In line with the requirements of IFRS 8, ‘Operating segments’, the Group has identified its Chief Operating Decision Maker (CODM). The Group has identified the Chief Executive Officer (CEO) of the Company as its CODM. The CEO reviews the Group’s internal reporting in order to assess the performance of the Group and allocate resources. The operating Segments have been identified based on these reports.

During the year, the CEO considered the business from a largely geographic perspective, based on three reporting segments: UK, International and Ireland. The International and Ireland Segments were managed by Executive Directors who reported to the CEO and the Board of Directors. The Group CEO has responsibility for the UK Segment.

Following the sale of the International Segment on 5 July 2012, the performance for the period to the date of the disposal, along with the gain made on the disposal, have been included as a single line ‘discontinued operations’ on the face of the Consolidated Income Statement and is outlined in note 13.

The CEO assesses the performance of the segments based on a measure of adjusted earnings. He reviews working capital and overall balance sheet performance on a Group wide basis.

The Group earns its revenues in these segments by way of fees from the provision of services and commissions earned in the intermediation of financial service products.

Goodwill is allocated to cash-generating units on a reporting segment level and that is the level at which it is assessed for impairment.

The segment information provided to the CEO for the reportable segments for the year ended 31 December 2012 is as follows:

UK Ireland TotalContinuing

£’000 £’000 £’000

Revenue 61,694 14,459 76,153

Adjusted operating profit/(loss) 14,720 (2,896) 11,824

Share based payment charges (291)Amortisation of intangibles (4,270)Exceptional costs (1,101)Operating profit 6,162

Finance income 476Finance costs (1,712)Finance costs - exceptional (867)Profit before income tax 4,059Income tax expense (1,640)Profit for the year 2,419



The 2011 comparatives are as follows:

UK Ireland Total Continuing

Re-presented£’000 £’000 £’000

Revenue 61,974 15,286 77,260

Adjusted operating profit/(loss) 15,166 (1,217) 13,949

Share based payment charges (431)Amortisation of intangibles (4,111)Exceptional costs (1,418)Operating profit 7,989

Finance income 164Finance cost (1,890)Share of loss of associate and joint venture (41)Profit before income tax 6,222Income tax expense (770)Profit for the year 5,452

Breakdown of revenue by country of operation is as follows:

The home country of IFG Group plc is Ireland. The Group’s revenues are derived from the following countries:

2012 2011 Re-presented

£’000 £’000

Ireland 13,884 14,025United Kingdom 61,296 61,899Other 973 1,336Total 76,153 77,260

Revenue in the table above has been allocated based on the country where the customer is located.



Analysis of revenue by category


£’000 £’000

Pension Administration Services 41,895 41,033Financial Services 34,258 36,227Total 76,153 77,260

During the year there were no revenues derived from a single customer that represent 10% or more of total revenues.

Analysis of total non-current assets at the year-end by geographical region

The total non-current assets (excluding deferred tax assets, available for sale assets and other financial instruments), at the year end. split by geographical region are as follows:

2012 2011£’000 £’000

Ireland 10,552 12,664United Kingdom 60,443 63,572Isle of Man - 2,848Jersey - 12,908Cyprus - 15,323Other 25 6,355Total 71,020 113,670

6. Exceptional items

Exceptional items charged against operating profit 2012 2011£’000 £’000

Provision against receivable from joint venture 800 -Redudancy and related costs 301 774Others - 644Total 1,101 1,418



Provision against receivable from joint venture

During the year an impairment review was carried out on the recoverability of the balance due from IFG McGivern Flynn Teoranta (trading as ‘Insure4less’). On review of the recoverable amount, an impairment provision of £800,000 was recorded.

Redundancy and related costs

In the current year, redundancy and related costs relate to a charge of £301,000 (2011: £774,000) in the UK Segment.

The other prior year exceptional items related to:

n an exceptional gain of £596,000 in respect of foreign currency gain on unhedged Euro borrowings;

n an impairment charge of £318,000 taken on the assets of Foster & Cranfield Limited, a subsidiary, that formed part of the non-core business, which was sold for a nominal amount in 2011. The impairment charge arose as the fair value less costs to sell of the net assets of the subsidiary was lower than the carrying amount of those assets; and

n once-off costs of £922,000 incurred in association with reviews performed following the completion of an ARROW visit to some of the subsidiaries in the UK Segment.

Exceptional finance costs

Early write off of unamortised transaction costs

The sale of the International Segment offered the Group the opportunity to repay and refinance the its net debt during the year. As a result of the surplus cash received, in November 2012, the Group refinanced its borrowing facility as noted in note 3 (c). The unamortised costs of £867,000 which related to the previous facility were written off during the year. The tax associated with these exceptional finance costs was £nil.



7. Expenses by nature


£’000 £’000

Depreciation and amortisation 5,181 5,309Establishment costs 3,569 2,948Employee benefit expense 40,621 39,777Advertising costs 1,390 1,174Operating lease rentals 2,350 2,637Professional fees 2,515 3,608Software support 473 436Other IT costs 3,318 2,755Commissions 3,724 4,343Property SIPP administration fees 1,134 1,121Foreign exchange gain (198) (598)Other expenses 5,914 6,370Total 69,991 69,880Relating to discontinued operations 12,541 29,319Total cost of sales, administrative expenses and other expenses 82,532 99,199

No other expenses classified by nature exceed £1.0 million in total and so have not been disclosed.

8. Directors’ remuneration

2012 2011£’000 £’000

Emoluments: For services as a director 242 241For other services 1,374 1,754For loss of office - termination payment - 278

1,616 2,273

The amounts above do not include charges in respect of the share based compensation payments of £64,000 (2011: £174,000).



9. Employee benefit expense

The average number of persons employed by the Group during the year including Executive Directors for continuing operations was 832 (2011 re-presented for continuing operations: 824). The actual number of persons employed by the Group as at 31 December 2012, including Executive Directors for continuing operations, was 837 (2011 re-presented: 825).

The average number of persons employed by the Group, including Non-Executive Directors during the year, analysed by category, was as follows:


UK 678 667Ireland 140 144Head office 14 13

832 824

The aggregate remuneration costs of these employees can be analysed as follows:


£’000 £’000

Wages and salaries 35,210 34,090Social welfare costs 3,089 2,949Redundancy and related costs 437 900Pension costs - defined contribution plans 1,594 1,463Share based payment compensation - share options 291 226Share based payment compensation - LTIP - 149Total 40,621 39,777Relating to discontinued operations 8,577 17,770Total remuneration costs 49,198 57,547



10. Finance income and costs


£’000 £’000

Interest expense - bank borrowings (1,703) (1,854)Unwinding of discount (95) (304)Finance lease interest (2) (2)

(1,800) (2,160)Relating to discontinued operations 88 270Finance cost relating to continuing operations (1,712) (1,890)Unamortised transaction costs (note 6) (867) -

(2,579) (1,890)

Finance income

Interest income on short-term bank deposits 487 194Relating to discontinued operations (11) (30)Finance income relating to continuing operations 476 164

Net finance costs - continuing (2,103) (1,726)

11. Operating profit


£’000 £’000The following items have been charged in operating profit:

Depreciation 911 1,198Amortisation of intangible assets 4,270 4,111Operating lease rentals 2,350 2,637Research and development 154 54Net foreign exchange gain (198) (598)Employee costs (note 9) 40,621 39,777



During the year, the Group obtained the following services from the Group’s auditors (PricewaterhouseCoopers in Ireland):

2012 2011Auditors’ remuneration - Group £’000 £’000

Statutory audit of the Group accounts 137 154Other assurance services 128 176Tax advisory services 146 159Other non-audit services 89 26Total remuneration 500 515

12. Income tax expense/(credit)

2012 2012 2011 2011Continuing Discontinued Continuing Discontinued

Re-presented Re-presented£’000 £’000 £’000 £’000

Current taxIreland (at 12.5%): - current year (49) 71 54 67 - prior year (156) - (14) (60)UK and other (primarily at 24.5%): - current year 2,569 156 1,962 261 - prior year 555 - (20) (21)

2,919 227 1,982 247

Deferred taxIreland: - current year (313) (30) (95) (8)UK and other: - current year (641) (14) (1,117) (844) - prior year (325) - - -

(1,279) (44) (1,212) (852)Income tax expense/(credit) 1,640 183 770 (605)



The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows:


£’000 £’000

Profit before income tax 4,059 6,222

Tax calculated at domestic tax rates applicable to results in the respective country countries 1,498 1,765Adjustment in respect of prior years 399 (34)Impact of double taxation on intergroup dividends - (30)Re-measurement of deferred tax - impact of change in UK tax rate (442) (503)Current year losses on which a deferred tax asset has not been recognised 254 123Utilisation of previously unrecognised tax losses (213) (676)Others including expenses not deductible for tax purposes 144 125Income tax expense 1,640 770

The weighted average applicable tax rate for the year was 37% (2011: 28% (re-presented)). The increase in the effective rate is a result of the change in the profitability of some of the company’s subsidiaries in the different countries the Group has operations in and would have been higher had it not been for the reduction in the UK corporation tax rate from 26% to 24% during the year.

In accordance with the requirements of IAS 12, the rate of 23% has been used as a basis for the calculation of deferred taxes in relation to UK temporary differences as that was the rate substantively enacted at the balance sheet date. Further reductions in the UK tax rates have been announced. If the announced UK tax rate of 20% had been used, the net of the deferred tax liabilities and assets as at 31 December 2012 would drop by £419,000 and the current year tax charge would have reduced by an equal amount to an income tax charge of £1,221,000. However, as the reduction was not substantively enacted at the balance sheet date its impact has not been reflected in these financial statements.

13. Profit from discontinued operations (net of income tax)

Discontinued operations

On 29 March 2012, the Board announced that it had signed an agreement for the sale of its entire International Segment (‘IFG International’) to AnaCap Financial Partners II LP (the ‘AnaCap Fund’) for a cash consideration of £70.0 million to be adjusted by a working capital adjustment on finalisation of completion accounts. The sale was approved by the Board of Directors in early March 2012 and the assets and liabilities relating to the Segment were classified as held for sale from 1 March 2012. The sale was approved by Shareholders at an EGM on 18 June 2012 and completed on 5 July 2012 as part of a plan to focus on the core businesses within the UK and Ireland Segments.



For the purpose of the financial statements, management has classified the International Segment as discontinued as it;

n represented a separate major line of business and geographical area of operations; and

n was part of a single co-ordinated plan to dispose of a separate major line of business and geographical area of operations.

The results of the International Segment are presented in the financial statements as discontinued operations. The Consolidated Income Statement distinguishes the discontinued operations from continuing operations.

Financial information relating to this discontinued operation is set out below.

Income statement Period ended Year ended5 July 2012 31 Dec 2011

£’000 £’000

Revenue 15,182 33,501Expenses (12,541) (29,319)Operating profit 2,641 4,182

Finance income 11 30Finance cost (88) (270)Profit before income tax 2,564 3,942Income tax (expense)/credit (183) 605Profit after income tax of discontinued operations 2,381 4,547Gain on sale of the International Segment 16,336 -Profit for the year relating to discontinued operations 18,717 4,547

Period ended Year ended5 July 2012 31 Dec 2011

Cash flow £’000 £’000

Operating activities (2,096) 5,844Investing activities (236) (475)Net movement in cash and cash equivalents from discontinued operations (2,332) 5,369



Details on the sale of operation

The gain on sale of the International Segment has been calculated as follows:

£’000

Cash consideration received 70,000Working capital adjustment provision (3,000)Other indemnities provision (500)Carrying amounts of net assets disposed (47,868)Costs of disposal (2,487)Currency translation differences recycled to the Consolidated Income Statement on disposal 191Gain on sale relating to discontinued operations 16,336

Net cash flow on disposal, exclusive of disposal costs £’000

Cash consideration 70,000Cash and cash equivalents disposed of (11,354)

58,646

Effect of disposal on the financial position of the Group£’000

Property, plant and equipment 1,812Intangible assets including goodwill 34,428Available-for-sale financial assets 100Other non-current assets 537Trade and other receivables 12,640Cash and cash equivalents 11,354Retirement benefit obligation (1,873)Trade and other payables (7,150)Other non-current liabilities (2,213)Deferred income tax liabilities (1,767)Carrying amounts of International Segment net assets disposed 47,868



14. Business combinations

On 29 July 2011 the Company acquired, through its wholly owned subsidiary IFG Nominees Limited, 70% of the issued share capital of A.R.B Underwriting Limited and its subsidiary A.R. Brassington & Co Limited (ARB). The purchase consideration paid was €500,000 (GBP equivalent of £442,000). The investment in ARB gave voting rights for 70% of the acquired business and thus control and the right to a 70% participation in any future dividends. The interest acquired does not grant the Company the right to any proceeds on a future sale.

As part of the transaction a call options agreement was put in place. If this call options was exercised, it would allow the Group to receive up to 70% of the proceeds on the future sale of ARB. It is at the sole discretion of the Group as to whether it exercises the call option or not.

During the year, final accounting for the acquisition of ARB was completed. As a result, the 2011 comparative information has been revised to include the effects of measurement period adjustments as if the accounting for the business combination had been completed on the acquisition date. The impact of the measurement period adjustment on 31 December 2011 Consolidated Balance Sheet was an increase in goodwill of £92,000, an increase in other intangible assets of £491,000, an increase in deferred income tax liability of £62,000 with a net credit adjustment to non-controlling interest of £521,000.

15. Earnings per ordinary share


BasicProfit after income tax and non-controlling interest (£’000)Continuing operations 2,883 5,950Discontinued operations 18,717 4,547Total 21,600 10,497

Weighted average number of ordinary shares in issue for thecalculation of earnings per share 125,404,061 125,284,387

Basic earnings per share (pence)Continuing operations 2.30 4.75Discontinued operations 14.92 3.63From profits for the year 17.22 8.38



DilutedProfit after income tax and non-controlling interest (£’000)Continuing operations 2,883 5,950Discontinued operations 18,717 4,547Total 21,600 10,497

Weighted average number of ordinary shares in issue for thecalculation of earnings per share 125,404,061 125,284,387Dilutive effect of share options 282,890 617,069Dilutive effect of long term incentive plan - 333,333Weighted average number of ordinary shares for the calculation of diluted earnings per share 125,686,951 126,234,789

Diluted earnings per share (pence)Continuing operations 2.29 4.71Discontinued operations 14.90 3.61From profits for the year 17.19 8.32

The number of shares used in the calculation of basic earnings per share and diluted earnings per share has been calculated in accordance with International Accounting Standard No.33.

Diluted earnings per share are based on the weighted average number of ordinary shares used in the basic earnings per share calculation, with an adjustment to reflect:

n the bonus element of the average number of options outstanding during the year. The bonus element arises when the exercise price is lower than the average market price during the year; and

n the number of shares earned under the Long Term Incentive Plan (LTIP), which have not been issued.

At 31 December 2012 there were no shares earned by participants but not yet issued under the 2011 LTIP.

16. Dividends

Dividends paid and approved during 2012 were £4,536,000 (2011: £5,742,000) amounting to 4.55 cent per share with a current GBP equivalent of 3.62 pence per share (2011: 5.50 cent per share (GBP equivalent of 4.76 pence per share). A final dividend in respect of 2012 of 3.19 cent (current GBP equivalent at rate of €1:£0.8161: 2.60 pence per share) is to be proposed at the Annual General Meeting on 26 June 2013. These financial statements do not reflect this dividend payable. The 2012 interim dividend of 1.65 cent per share was paid on 11 December 2012.



17. Property, plant and equipment

Buildings & leasehold

improvements

Computer equipment

Fixtures & fittings

Motor vehicles

Total

£’000 £’000 £’000 £’000 £’000Cost At 31 December 2010 4,455 6,902 2,891 325 14,573

Additions 138 641 102 26 907Disposals (5) (523) (1,748) (131) (2,407)Reclassification to intangible assets - (204) - - (204)Business combinations - 351 2 - 353Exchange adjustment (28) (41) (27) (4) (100)At 31 December 2011 4,560 7,126 1,220 216 13,122

Additions 6 419 73 38 536Disposals - continuing (40) (130) (321) (47) (538)Disposal of the International Segment (1,909) (2,353) (67) (132) (4,461)Exchange adjustment (41) (79) (43) (4) (167)At 31 December 2012 2,576 4,983 862 71 8,492

Accumulated depreciationAt 31 December 2010 (1,403) (5,091) (1,969) (194) (8,657)

Charge for year (575) (955) (254) (37) (1,821)Reclassification to intangible assets - 157 - - 157Disposals 2 523 1,742 131 2,398Exchange adjustment 20 23 - 1 44At 31 December 2011 (1,956) (5,343) (481) (99) (7,879)

Charge for year (325) (530) (126) (29) (1,010)Disposals - continuing 40 116 313 37 506Disposal of the International Segment 572 1,900 99 78 2,649Exchange adjustment 17 63 28 - 108At 31 December 2012 (1,652) (3,794) (167) (13) (5,626)

Net book amountsAt 31 December 2010 3,052 1,811 922 131 5,916At 31 December 2011 2,604 1,783 739 117 5,243

At 31 December 2012- cost 2,576 4,983 862 71 8,492- accumulated depreciation (1,652) (3,794) (167) (13) (5,626)

924 1,189 695 58 2,866

The continuing depreciation charge for the year of £911,000 (2011 continuing: £1,198,000) is included in the Consolidated Income Statement in ‘Cost of Sales’. The discontinued depreciation charge of £99,000 is included within ‘Discontinued operations’ (2011: £623,000).



Capital commitments

At 31 December 2012 amounts authorised by the Directors, but not contracted for, were £2,549,000 (2011: £2,210,000). Capital commitments contracted for were £42,000 (2011: £nil).

18. Intangible assets

Goodwill Customerrelationship

brands¹

Computersoftware

Total

£’000 £’000 £’000 £’000Year ended 31 December 2012Opening net book amount 62,282 41,421 4,077 107,780Additions - - 645 645Disposal of the International Segment (17,961) (16,012) (455) (34,428)Amortisation charge - (2,515) (2,338) (4,853)Exchange adjustment (518) (416) (56) (990)Closing net book amount 2012 43,803 22,478 1,873 68,154

At 31 December 2012Cost 54,126 42,831 10,429 107,386Accumulated amortisation/impairment (10,323) (20,353) (8,556) (39,232)Net book amount 43,803 22,478 1,873 68,154

Year ended 31 December 2011Opening net book amount 62,253 46,241 5,279 113,773Business combinations 442 491 - 933Additions - - 1,196 1,196Disposals (225) - - (225)Reclassification from property, plant and equipment - - 47 47Amortisation charge - (4,993) (2,400) (7,393)Exchange adjustment (188) (318) (45) (551)Closing net book amount 2011 62,282 41,421 4,077 107,780

At 31 December 2011Cost 72,605 59,259 10,295 142,159Accumulated amortisation/impairment (10,323) (17,838) (6,218) (34,379)Net book amount 62,282 41,421 4,077 107,780

¹ Includes the cost of intangibles that were identified and valued as part of the purchase price allocation that resulted from business combinations. These intangibles are primarily customer relationships acquired as part of recent business combinations of the Group. Useful lives range from seven to fifteen years. Management estimates that the James Hay brand and customer relationship intangibles acquired during 2010 (net book value of £20,697,000) have approximately twelve years and two months left in their useful lives as of 31 December 2012.



Computer software is amortised over three to six years.

The amortisation charge of £4,853,000 includes both continuing (£4,270,000) and discontinued (£583,000) charge. The 2011 amount of £7,393,000 includes the continuing charge of £4,111,000 and discontinued charge of £3,282,000. The continuing charge is included in the Consolidated Income Statement. This is included within ‘Cost of Sales’.

Goodwill as allocated to segments - group of cash generating units

At 31 December

2012

At 31 December

2011£’000 £’000

United Kingdom 36,389 36,287Ireland 7,414 7,733International - 18,262Total goodwill 43,803 62,282

Impairment tests for goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s segments which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes.

Value-in-use calculations are utilised to calculate recoverable amounts of a CGU. Value-in-use is calculated as the net present value of the projected risk-adjusted pre-tax cash flows of the group of cash generating units, in which the goodwill is contained. Net present value of cash flows is achieved by applying a discount rate based on the Group pre-tax weighted average cost of capital (WACC) as outlined below. These cash flows are approved by the Board covering a one year budget together with a four year forecast. Cash flows beyond the five year period are extrapolated using the estimated long-term growth rates as stated below. Forecasts and cash flows are based on historical performance together with management’s expectation of future trends affecting the industry and other developments and initiatives in the business.

The key assumptions include the long term growth rates, discount rates and management’s estimates of future profitability based on sales growth, inflation and movement in estimated cost expectations. The prior year assumptions were prepared on the same basis. The values applied to the key assumptions are derived from a combination of external and internal factors based on historical experience and take into account management’s expectation of future trends affecting the industry and other developments and initiatives in the business.



The key assumptions used for the value-in-use calculations in 2012 and 2011 are as follows:

2012 2011

United KingdomLong term growth rate 2.0% 2.0%Discount rate 9.4% 8.7%

IrelandLong term growth rate 1.0% 1.0%Discount rate 10.7% 10.2%

In the current and prior year, the Group has included a risk factor on the Group WACC in order to arrive at the discount rate to be used for Ireland, given the different risk profile for the cash flows for Ireland.

If the revised estimated long term growth rates for all businesses were lowered by 1% from management’s estimate at 31 December 2012, the Group would not have recognised an impairment charge against goodwill. If the discount rate used increased by 1%, an impairment charge of £nil would have been recorded at 31 December 2012. If the estimated cash flows for the five-year period 2013-2017 reduced by 3%, then an impairment charge of £nil would have been recorded at 31 December 2012.

For an impairment charge to be taken on the Ireland Segment, cash flow projections would have to decrease to 48% of the approved budget and forecasts. In relation to the Ireland Segment management has assumed for the period 2013 to 2017 average revenue growth per annum of 7.5% together with improvements in gross margin along with a reduction of historic establishment costs. The revenue growth projections of 7.5% are influenced by the growth in 2012 in the core business. In 2012, while there was a reduction in total Ireland Segment revenue of 5% (in GBP), in euro terms there was 1% growth in revenue. In euro terms the core business achieved revenue growth of 7%.

19. Investments in associate and joint venture

2012 2011£’000 £’000

At 1 January - 42Share of loss for the year - (41)Foreign exchange - (1)At 31 December - -

In 2010, the Group acquired a 50% interest for €100,000 in IFG McGivern Flynn Teoranta, an Irish entity trading as ‘Insure4less’. The Group has not recognised losses of £204,000 (2011: £43,000) for IFG McGivern Flynn Teoranta as the carrying value of its investment in the joint venture is £nil.

The Group’s investment in associate comprises its shareholdings in Rayband Limited (shareholding 35% (2011: 35%)). The Group has not recognised losses of £6,000 (2011: £4,000) for Rayband Limited as the carrying value of its investment in the associate is £nil.



The Group’s share of the results of its principal associates and joint ventures, all of which are unlisted, and its aggregated assets and liabilities are as follows:

Assets Liabilities Revenues Loss Share of loss recognised by IFG

£’000 £’000 £’000 £’000 £’0002012 889 (939) 921 (210) -2011 1,235 (1,031) 1,311 (47) (41)

There were no capital commitments for 2012 associated with IFG McGivern Flynn Teoranta.

20. Deferred income tax

Deferred income tax assets and liabilities are offset if, and only if, there is a legally enforceable right to set off the recognised amounts and there is an intention to either settle on a net basis or to realise the asset and settle the liability simultaneously.

2012 2011£’000 £’000

Net deferred tax balance (2,317) (5,416)

The gross movement on the deferred income tax account is as follows:

At beginning of the year (5,416) (7,571)Exchange movement 9 153Business combinations - (62)Sale of International Segment 1,811 852Consolidated Income Statement credit 1,279 1,212At end of the year (2,317) (5,416)

No deferred income tax is recognised on the unremitted earnings of overseas subsidaries and joint ventures as the Group does not anticipate additional tax in Ireland on any dividends received from overseas subsidiaries.



The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Acceleratedcapital

allowances

Pastbusiness

review

Intangiblesassets

Taxlosses

Othertemporarydifferences

Total

£’000 £’000 £’000 £’000 £’000 £’000

Deferred tax assets at 31 December 2010 419 137 - 528 1,174 2,258Deferred tax liabilities at 31 December 2010 - - (9,829) - - (9,829)Net deferred tax balances at 31 December 2010 419 137 (9,829) 528 1,174 (7,571)

At 1 January 2011 419 137 (9,829) 528 1,174 (7,571)Exchange movement (1) - 168 (15) 1 153Business combinations - - (62) - - (62)(Charged)/Credit to discontinued operations (12) - 819 24 21 852(Charged)/Credit to continuing operations (121) (74) 1,045 1,037 (675) 1,212Net deferred tax balances at 31 December 2011 285 63 (7,859) 1,574 521 (5,416)

Deferred tax assets at 31 December 2011 285 63 - 1,574 521 2,443Deferred tax liabilities at 31 December 2011 - - (7,859) - - (7,859)Net deferred tax balances at 31 December 2011 285 63 (7,859) 1,574 521 (5,416)

At 1 January 2012 285 63 (7,859) 1,574 521 (5,416)Exchange movement - - 63 (8) (46) 9Sale of International Segment (10) - 1,777 - - 1,767Credit to discontinued operations - - 44 - - 44Credit/(charged) to Consolidated Income Statement 8 (63) 932 502 (100) 1,279Net deferred tax balances at 31 December 2012 283 - (5,043) 2,068 375 (2,317)

Deferred tax assets at 31 December 2012 283 - - 2,068 375 2,726Deferred tax liabilities at 31 December 2012 - - (5,043) - - (5,043)Net deferred tax balances at 31 December 2012 283 - (5,043) 2,068 375 (2,317)

Deferred tax assets of £1,979,000 (2011: £1,650,000) in respect of tax losses of £14,618,000 (2011: £12,797,000) have not been recognised. These losses have no expiration date and can be carried forward indefinitely. Deferred tax assets are recognised where it is probable that future taxable profit will be available to utilise losses.



21. Financial instruments by category

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

31 December 2012 Held tomaturity

Loans and receivables

Available-for-salefinancial assets

Total

Assets as per balance sheet £’000 £’000 £’000 £’000

Trade and other receivables - 18,948 - 18,948Loans to associates and joint venture - 1,174 - 1,174Cash & cash equivalents - 27,325 - 27,325Total - 47,447 - 47,447

31 December 2011 Held to Loans and Available-for-sale Totalmaturity receivables financial assets

Assets as per balance sheet £’000 £’000 £’000 £’000

Available-for-sale financial assets - - 100 100Other non-current assets - 730 - 730Trade and other receivables - 32,529 - 32,529Loans to associates and joint venture - 1,449 - 1,449Cash & cash equivalents - 32,261 - 32,261Total - 66,969 100 67,069

31 December 2012 Other financialliabilities

Liabilities as per balance sheet £’000

Borrowings 6,734Trade and other payables 2,925Accruals 11,077Total 20,736

31 December 2011 Otherfinancial

liabilitiesLiabilities as per balance sheet £’000

Borrowings 41,403Derivative financial instrument 3Trade and other payables 5,788Accruals 14,136Total 61,330

See note 24 commentary on the credit quality of trade and other receivables.



22. Available-for-sale financial assets

Unquotedinvestments

2012

Unquoted investments

2011

£’000 £’000

At 31 December - 100

During the year, the available for sale asset was disposed of as part of the International Segment sale.

23. Other non-current assets

2012 2011£’000 £’000

Other loans - 357Receivables due from joint ventures - 289Other assets - 84At 31 December - 730

During the year, £289,000 of receivables due from joint ventures were fully provided for. Please see note 24 for further details. The other loans and other assets balances were disposed of as part of the International Segment sale.

24. Trade and other receivables

2012 2011£’000 £’000

Trade receivables and other receivables 20,811 36,061Less provision for impairment (1,863) (3,532)Trade receivables and other receivables - net 18,948 32,529Prepayments 2,213 3,929Receivables from joint venture 88 340Receivables from associate 1,086 1,109Value added tax 39 24

22,374 37,931

The carrying value less impairment provision of trade and other receivables approximates fair value.

The Group’s exposure to concentration risk in respect of its trade receivables is assessed as low given the large number of customers and the absence of any significant exposure to one customer.

As of 31 December 2012, trade and other receivables of £15,648,000 (2011: £21,516,000) were fully performing. There is no history of default with any of these clients.



Trade and other receivables that are less than three months past due have been reviewed and are not considered impaired. As of 31 December 2012, trade and other receivables of £1,929,000 (2011: £6,728,000) were past due but not impaired. These relate to a wide range of clients for whom there is no history of default. The ageing analysis of these trade and other receivables is as follows:

2012 2011£’000 £’000

Less than 3 months 1,718 6,0613 to 6 months 211 667

1,929 6,728

As of 31 December 2012, trade and other receivables of £3,234,000 (2011: £7,817,000) were impaired and provided for. The amount of the provision was £1,863,000 (2011: £3,532,000). Management assesses that at least the receivable amount net of provision will be recovered. The ageing of these receivables is as follows:

2012 2011£’000 £’000

6 months to one year 1,980 4,861More than one year 1,254 2,956

3,234 7,817

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:

2012 2011£’000 £’000

Euro 7,533 10,095Sterling 13,275 25,028USD - 329Other currencies 3 609

20,811 36,061

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

2012 2011£’000 £’000

At 1 January 3,532 2,982Provision for receivables impairment 985 1,110Sale of International Segment (932) -Receivables written off during year as uncollectible (1,670) (330)Unused amounts reversed - (188)Exchange adjustment (52) (42)At 31 December 1,863 3,532

The creation and release of the provision for impaired trade receivables has been included within ‘Cost of Sales’ in the Consolidated Income Statement.



The receivable from the joint venture is net of a provision of £800,000 which has been included in Other expenses. Other than as outlined earlier, the other classes within trade and other receivables do not contain any impaired assets. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

The receivables from joint venture and associate are denominated in euro.

25. Cash and cash equivalents

2012 2011£’000 £’000

Cash at bank and in hand 20,905 24,555Short-term bank deposits 6,420 7,706Total cash and cash equivalents 27,325 32,261

Cash and cash equivalents are reported at amortised cost which approximates fair value. Cash at bank and in hand earns interest at floating rates based on daily deposit bank rates. Short-term deposits are made for varying periods depending on the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.

Currency rate profile of cash and cash equivalents

2012 2011Cash at

bank and in hand

Short termdeposits

Total Cash at bank and

in hand

Short term deposits

Total

£’000 £’000 £’000 £’000 £’000 £’000

Euro 3,112 2 3,114 2,280 6 2,286Sterling 17,701 6,418 24,119 20,258 7,700 27,958US Dollar - - - 1,252 - 1,252Swiss Franc - - - 608 - 608Yen 92 - 92 157 - 157At 31 December 20,905 6,420 27,325 24,555 7,706 32,261



26. Borrowings

2012 2011£’000 £’000

Non-currentBank borrowings 6,591 32,842

6,591 32,842

CurrentBank overdrafts 143 17Bank borrowings - 8,542Leasing finance - 2

143 8,561

Total borrowings 6,734 41,403

Bank borrowings

Bank borrowings at 31 December 2012 mature in 2017 and bear average coupons of 3.0% annually (2011: 3.0% annually).

The carrying amounts and fair values of the non-current borrowings are as follows:

2012 2011 2012 2011£’000 £’000 £’000 £’000

Bank borrowings 6,734 32,842 6,734 32,8426,734 32,842 6,734 32,842

The fair values are based on cash flows discounted using a rate based on the borrowing rate of 3.0% (2011: 3.0%).

The carrying amounts of the Group’s borrowings are denominated in the following currencies:

2012 2011£’000 £’000

Euro - 16Sterling 6,734 41,387

6,734 41,403

The Group has the following undrawn committed borrowing facilities available:

2012 2011£’000 £’000

Expiring between two and five years 16,400 18,04716,400 18,047


Carrying amount Fair value


£1,600,000 of the borrowing facilities is allocated to a guarantee. This is not included in the £16,400,000 undrawn committed borrowings facilities. These facilities are at floating interest rates which include short-term working capital facilities providing the Group with the necessary funding in each of our functional currencies for short and long term objectives.

The Company, along with some of its subsidiaries, has guaranteed Group borrowings and guarantees totalling £8,600,000 (2011: £42,814,000). There are certain share pledges for some subsidiary companies under the bank facility agreement.

Leasing finance

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

Gross finance lease liabilities minimum-lease payments:

2012 2011£’000 £’000

Within one year - 2Between one and two years - -

- 2Future finance charges on finance leases - -

- 2

The present value of finance lease liabilities is as follows:2012 2011

£’000 £’000

Within one year - 2Between one and two years - -

- 2

27. Derivative financial instrument

There were no foreign exchange contracts outstanding at 31 December 2012 (2011: $6,000,000). The fair value of foreign exchange contracts at year end was £nil (2011: £3,000).

28. Retirement benefit obligations

Defined benefit schemes

2012 2011£’000 £’000

Balance sheet Pension benefit obligation - 1,760

Income statement Pension benefits 125 269



The Group operated a defined benefit pension scheme via its former subsidiary IFG Management Limited (a component of the International Segment) for eligible employees based on employee pensionable remuneration and length of service. Following the sale of the International Segment on 5 July 2012 the Group has no further obligations in respect of the scheme which transferred as part of the sale along with IFG Management Limited.

The scheme was closed to new entrants with effect from 1 November 1997. The assets of the scheme were held separately from those of the Group and were invested with an insurance company.

The most recent full valuation for funding purposes was carried out by a qualified actuary at 1 January 2012 and is available for inspection by the scheme members but is not available for public inspection.

The following information relates to the Group’s defined benefit pension scheme.

Pension benefits

The amounts recognised in the balance sheet are determined as follows:

2012 2011£’000 £’000

Present value of funded obligations - 5,955Fair value of plan assets - (4,195)Liability in the balance sheet - 1,760

The movement in the defined benefit obligation, over the year, is as follows:

2012 2011£’000 £’000

At beginning of the year 5,955 5,447Interest cost 131 290Current service cost 108 200Contributions by members 12 24Benefits paid (69) (137)Actuarial losses - 131Disposal of the International Segment (6,137) -At end of the year - 5,955



The movement in the fair value of plan assets, over the year, is as follows:

2012 2011£’000 £’000

At beginning of the year 4,195 3,806Expected return on plan assets 115 221Contributions by employer 100 193Contributions by members 12 24Benefits paid (69) (137)Actuarial (losses)/gains (89) 88Disposal of the International Segment (4,264) -At end of the year - 4,195

The amounts recognised in the Consolidated Income Statement as part of the profit for the year from discontinued operations are as follows:

2012 2011£’000 £’000

Interest cost 132 290Current service cost 108 200Expected return on plan assets (115) (221)Total charge 125 269

The actual return on plan assets was £26,000 (2011: £309,000).

The principal actuarial assumptions used at 31 December 2011 were:

2011

Discount rate 4.7%Expected return on plan assets 5.46%Future salary increases 4.2%Inflation 3.4%Future pension increase 3.2%

Assumed life expectancy in years, on retirement at 65:Retiring today:Male (years) 24.0 yearsFemale (years) 26.0 years

Retiring in 20 years:Male (years) 26.0 yearsFemale (years) 27.2 years

Contributions expected to be made to the scheme in 2013 are £nil.

The cumulative amount of actuarial gains and losses recognised in Other Comprehensive Income at 31 December 2012 was a loss of (£1,772,000) (2011: (£1,683,000)).



History of experience gains and losses

2012 2011 2010 2009 2008As at 31 December £’000 £’000 £’000 £’000 £’000

Present value of defined benefit obligation - 5,955 5,447 4,603 2,610Fair value of plan assets - 4,195 3,806 2,950 2,524Deficit - 1,760 1,641 1,653 86Experience adjustments on plan liabilities - 57 156 (29) 39Experience adjustments on plan assets (89) 88 106 (115) (794)

Defined contribution schemes

IFG entities operate pension arrangements which cover the Group’s material obligations to provide pensions to retired employees. These schemes include those provided by defined contribution schemes whereby retirement benefits are determined by the value of funds arising from contributions paid in respect of each employee.

29. Other non-current liabilities

The other non-current liabilities balance represented the non-current element of an amount refundable to a former customer of one of the subsidiaries in the International Segment. This has been disposed of as part of the International Segment sale as per note 13.

30. Provisions for other liabilities

Working

capital adjustment

Complaints & legal

Dilapidations Total

£’000 £’000 £’000 £’000

At 1 January - 3,328 - 3,328Additions 3,500 344 250 4,094Unused amount reversed - (517) - (517)Used during the year - (812) - (812)Unwinding of discount - 7 - 7Exchange movement - (1) - (1)At 31 December 3,500 2,349 250 6,099

Analysis of provisions:2012 2011

£’000 £’000

Current 4,487 3,218Non-current 1,612 110

6,099 3,328



Working capital adjustment

The terms of the International Segment sale agreement provide for a working capital adjustment to the £70.0 million disposal consideration received based on a completion balance sheet. As at the date of the approval of the financial statements there are on-going negotiations with the purchaser as to the final value of the working capital adjustment. The gain on sale of the International Segment is net of a provision of £3.0 million in respect of this matter. A provision of £0.5 million has been made for other indemnities relating to the International Segment. This is management’s best estimate of the adjustment that is required in order to finalise the process with regards to the disposal of the Segment.

Complaints and legal

The provisions recorded represent management’s best estimate of the exposures relating to complaints and legal claims against Group companies based on information available at the time of the approval of the accounts. This includes provisions made to cover existing and incurred but not reported complaints and legal claims against the Group. These provisions represent managament’s best estimate of the costs of settling these matters.

Dilapidations

A provision reflecting management’s best estimate of the dilapidation costs for premises currently leased by Group companies has been recognised.

Although these provisions are uncertain in terms of timing and/or amount, it is expected that £4,487,000 of the provision will be utilised in 2013.

31. Trade and other payables (amounts falling due within one year)

2012 2011£’000 £’000

Trade and other payables 2,925 5,788Accruals and deferred income 18,863 26,967PAYE and social welfare 1,741 1,500Value added tax 425 898

23,954 35,153

Creditors for taxation and social welfare included above 2,166 2,398

The carrying value of trade and other payables approximates fair value.



32. Share capital and share premium

Authorised2012

No. of shares

2012

£’000

2012

€’000

2011No. of shares

2011

£’000

2010

€’000

Ordinary shares of 12c each 140,187,210 13,095 16,822 140,187,210 13,095 16,822“A” Ordinary shares of €1.27 each 8,200 7 10 8,200 7 10

13,102 16,832 13,102 16,832

Allotted and fully paid up No. of Ordinary Shareshares shares premium

£’000 £’000

At 1 January 2011 124,388,615 11,648 80,613Share options exercised 415,500 43 266LTIP shares issued 916,671 94 -At 31 December 2011 125,720,786 11,785 80,879

Share buy-back (22,603,636) (1,913) -Share options exercised 447,682 44 281LTIP shares issued 333,333 33 -Other - - (19)At 31 December 2012 103,898,165 9,949 81,141

Share buy-back

On 31 August 2012, in the announcement of the Company’s interim results for the six months ended 30 June 2012, the Board announced a proposal to return circa £30.0 million capital to Shareholders via a share buy-back initiative. The Board confirmed its intention to proceed with the proposed return of capital of €37.3 million (£30.0 million) to Shareholders by way of a tender offer.

The tender offer was made to qualifying Shareholders at a price per share of €1.65 and tenders were made at the tender price only. The tender price represented a premium of 17.9 per cent to the closing price of €1.40 per ordinary share on 1 November 2012 and represented a premium of 13.9 per cent to the volume weighted average price per ordinary share over the three month period to 1 November 2012.

The Company purchased 22,603,636 ordinary shares from qualifying Shareholders at the tender price in December 2012. These ordinary shares were subsequently cancelled by the Company and the nominal value of the cancelled shares was transferred to a capital redemption reserve. The capital redemption reserve is held in accordance with company legislation and for the purposes of capital maintenance is considered as part of capital, akin to paid in capital that cannot be reduced without a High Court resolution.



Share options

The Group operates share option schemes whereby options are granted to employees to acquire shares in IFG Group plc. The exercise price of the granted options is equal to the market price of the shares on the date of grant. Options are conditional on the employee remaining in service for a period of three years (vesting period) and are exercisable between three and ten years from the date of grant. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

At 31 December 2012 share options were outstanding over 2,824,000 (2011: 3,140,182) ordinary shares under the Company’s Share Option Schemes.

Movements in the number of share options outstanding and their related average exercise prices are as follows:

2012 2012 2011 2011Weighted exercise

price in € per shareOptions

’000Weighted exercise

price in € per shareOptions

’000

At 1 January 1.44 3,140 1.42 3,481Granted 1.55 640 1.41 250Expired 2.06 (508) 2.09 (175)Exercised 0.90 (448) 1.02 (416)At 31 December 1.37 2,824 1.44 3,140

Options exercisable 1.50 1,312 1.79 1,430

The weighted average share price at the date of exercise for options exercised during the year was €1.41 (2011: €1.84).

Options outstanding at the end of the year entitle holders to purchase ordinary shares as follows:

Options Exercise Price in € Period normally exercisable‘000 per share From To

165 1.14 16.04.2007 15.04.201425 1.02 13.07.2007 12.07.201459 0.99 16.04.2008 15.04.2015

117 2.05 10.05.2009 09.05.2016135 2.08 12.04.2010 11.04.2017303 1.97 14.04.2011 11.04.2018120 0.65 06.05.2012 05.05.2019388 1.30 07.09.2012 08.09.2019447 1.15 31.08.2013 30.08.2020175 1.26 11.10.2013 10.10.2020250 1.41 30.03.2014 29.03.2021640 1.55 27.04.2015 26.04.2022



Option pricing

The fair value of options granted was determined using the Black-Scholes valuation model. The significant inputs into the model were share price and exercise price of €1.55 and €1.55 respectively in 2012, (2011: €1.41 and €1.41) at the grant dates, standard deviation of expected share price returns of 44% (2011: 50%), option life of five years (2011: five years) disclosed above and annual risk-free rate of 3.5%. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over a seven year period as this represents the historical experience of grant date to exercise date. The expected dividend yield input assumption for all years was zero. The fair value of share options granted in the year was €0.67 (2011: €0.72).

Long term incentive plan

Some Executives of the Company are participants in Long Term Incentive Plans. The share awards under the LTIP approved by Shareholders are contingent on the achievement of defined annual adjusted EPS growth targets and on the recipients remaining with the Group until the end of the performance period.

All shares earned under the 2006 LTIP have been issued and there was no accounting charge in 2012 in relation to this scheme.

A new LTIP was introduced in 2011 and circular approved at the EGM following the AGM on the 29 June 2011. The LTIP performance period for the new LTIP expires on 31 January 2014. No awards under the new scheme were made in 2012.

Performance cycle ending Grant Date Maximum number of shares that can be awarded

Shares earned at the balance sheet date

‘000 ‘000

31 December 2014 29.06.11 3,800 -

The share based payment compensation charge for the year has been disclosed in note 9.



33. Other reserves

Capitalconversion

reserve

Convertiblebond

Equitysettled sharetransactions

Capitalredemption

reserve

Translationreserve

Total

£’000 £’000 £’000 £’000 £’000 £’000

At 31 December 2010 292 238 7,151 - (10,182) (2,501)

Currency translation difference - - - - (2,433) (2,433)Share based payment compensation -Value of employee services - LTIP - - 149 - - 149 - Value of employee services - share

options - - 282 - - 282Shares issued under LTIP - - (94) - - (94)Other - - (68) - - (68)At 31 December 2011 292 238 7,420 - (12,615) (4,665)

Currency translation difference - - - - (1,456) (1,456)Cancellation of shares - - 1,913 - 1,913Share based payment compensation - Value of employee services - share

options - - 291 - - 291Shares issued under LTIP - - (33) - - (33)At 31 December 2012 292 238 7,678 1,913 (14,071) (3,950)

The capital conversion reserve arose on the redenomination of the shares from Irish pounds to euro in year 2001 and the renominalisation of the share capital.

The convertible bond reserve was created on the transition to IFRS and the recognition of the senior unsecured notes as a compound financial instrument. The existence of warrants required the separation of debt from the equity piece of the notes.

Equity settled share transactions reserve records all entries that result in the Group’s requirement to settle its obligations in the form of the issue of shares.

Note 32 contains information on the cancellation of shares and the share buy-back that occurred during 2012.

Translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net investment in foreign subsidiaries.



34. Equity non-controlling interests

At 31 December 2012, equity non-controlling interest is represented by non-controlling interests in IFG Investment and Mortgage Services Limited, Mortgage & Assurance Services Limited and A.R.B Underwriting Limited. IFG Investment and Mortgages Services Limited and Mortgage & Assurance Services Limited are both 50% holdings but are consolidated as subsidiaries as the casting vote on the boards of the companies lies with the Group.

During 2012, a capital contribution of £227,000 (2011: £220,000) was made to IFG Investment and Mortgages Services Limited. An equivalent amount was contributed by the non-controlling interest, GE Capital Woodchester Limited. This amount has been reflected within the non-controlling interests in the Statement of Changes in Equity.

35. Operating lease commitments

The Group leases various properties and equipment under non-cancellable operating lease agreements. The lease terms are between one and eleven years and the majority of lease agreements are renewable at the end of the lease period at market rate. The lease expenditure charged to the Consolidated Income Statement during the year is disclosed in note 7. The leases have varying conditions and terms.

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

2012 2011£’000 £’000

- within one year 1,750 3,099- in the second to fifth year 3,629 8,599- over five years 1,117 3,711

6,496 15,409

36. Commitments, contingencies and guarantees

Given the nature of the business, the Group has a number of claims against it. The Group has procedures in place to assess the veracity of the claims and provision has been made to cover its best estimate of the exposure in respect of these matters.

The Company, along with some of its subsidiaries, has guaranteed Group borrowings of £7,000,000 and guarantees of £1,600,000 totalling £8,600,000 (2011: £42,814,000). There are certain share pledges for some subsidiary companies under the bank facility agreement.

The Company has provided rent guarantees totalling £2,547,000 over the period to 2017 (2011: £3,529,000).

The agreement for the sale of the International Segment contains certain limitations on the ability of the purchaser to claim against the Company for breach of warranty and under indemnities. In particular, the aggregate liability of the Company for all claims under the sale agreement (other than certain fundamental warranties) will not exceed the net consideration.

The Company will not be liable for any warranty or indemnity claim unless it exceeds £500,000. The Company will also have no liability for any warranty claim unless and until warranty claims exceed £1,350,000 in aggregate (in which case the Company will be liable for the full amount and not just the excess over £1,350,000). In addition, claims in respect of non-tax warranties claims or indemnities must be brought within twenty four months of the date of completion. Tax warranty and/or tax indemnity claims must be brought within seven years of the date on which completion occurs.



37. Cash generated from operations


£’000 £’000

Continuing operations


Depreciation and amortisation 5,181 5,309

Impairment of assets of subsidiary sold - 318

Loss on sale of property, plant and equipment 23 4

Finance costs 2,579 1,890

Finance income (476) (164)

Group share of loss of associates and joint venture - 41

Foreign exchange movement (257) (619)

Non-cash share based payment compensation charges 291 431

Decrease in trade and other receivables 329 1,164

Movement on loan and other payments to associates (224) 105

Increase/(decrease) in short term and long term liabilities 2,214 (6,697)

Cash generated from continuing operations 13,719 8,004

Discontinued operations


Working capital adjustment and other indemnities (3,500) -

Depreciation and amortisation 682 3,905

Finance income (11) (30)

Finance costs 88 270

Impairment of non-current assets - 892

Foreign exchange movement (99) (736)

Decrease/(increase) in trade and other receivables 2,767 (14)

Decrease in short term and long term liabilities (4,571) (2,082)

Cash flow from discontinued operations (2,080) 6,147

Cash generated from operations - net 11,639 14,151



38. Analysis of net debt

Openingbalance

Cash flow

Othermovements

Closingbalance

£’000 £’000 £’000 £’000

Cash and short term deposits 32,261 (5,154) 218 27,325

Overdrafts (17) (126) - (143)

32,244 (5,280) 218 27,182

Bank loans due within one year (8,542) 42,358 (33,816) -

Bank loans due after one year (32,842) (7,000) 33,251 (6,591)

Finance leases (2) 2 - -

Total (9,142) 30,080 (347) 20,591

Other movements

Other movements of £347,000 include the impact of exchange rate movements arising on balances denominated in currencies other than GBP and the non-cash impact of unamortised borrowing transaction costs. The analysis also reflects the impact on the current and non-current classification of borrowings following the re-financing completed in 2012.

39. Related party transactions

Key management personnel compensation

For the purposes of the disclosure requirements of IAS 24, IFG Group has defined the term ‘key management personnel’ as its Directors. In addition to their salaries, the Group also provides non-cash benefits to Directors and contributes to post-employment plans on behalf of certain Directors. Executive Directors also participate in the Group’s share option programme and Long Term Incentive Plan.

2012 2011£’000 £’000

Salaries and other short term benefits 1,443 1,795Post-employment benefit 183 222Share based payment compensation 64 174Termination benefits - 278Charged to Consolidated Income Statement 1,690 2,469



Ultimate controlling party

The Group’s ultimate parent is IFG Group plc (incorporated in Ireland) and there is no ultimate controlling party.

Transactions and balances with joint venture and associates

At 31 December 2012, Group companies were owed £1,086,000 (2011: £1,109,000) by Rayband Limited, an Irish unlisted company and an associate of the Group. During the year the Group paid £3,000 (2011: £6,000) in expenses on behalf of Rayband Limited. These advances are unsecured, interest free and have no fixed repayment date. This company is controlled by Patrick Joseph Moran, a former Director of IFG Group plc.

During 2010, IFG acquired an interest of 50% in IFG McGivern Flynn Teoranta (trading as ‘Insure4less’), an Irish unlisted entity which the Group jointly controls. IFG McGivern Flynn Teoranta is engaged in the sale and marketing of insurance policies for general personal lines of insurance. At 31 December 2012, Group companies were owed £501,000 (2011: £232,000) from the joint venture for cash transfers, services rendered and expenses incurred on behalf of the joint venture. The Group also has a receivable from the joint venture relating to the sale of an insurance renewal book in 2010. The proceeds of the sale of £387,000 was payable in installments over 5 years commencing 2012. This balance is classified within ‘Trade and other receivables’ as payable to IFG within one year as the terms of the repayment have been modified. These receivables are unsecured and interest free. During the year an impairment review was carried out on the recoverability of the balances and a provision for £800,000 was recorded.

Transactions involving entities in which key management have an interest

During 2012, Group companies earned £nil (2011: £72,000) from TFC Limited, a company based in the Isle of Man and of which Declan Kenny, Chief Executive of the International Segment and a former Director of IFG Group plc, is a Director. This related to the provision of services to TFC from Group companies. Additionally, Group companies earned £5,000 (2011: £10,630) from TFC’s parent Tanyl Limited of which Declan Kenny is also a director and a shareholder.

During 2012, Group companies earned £nil (2011: £33,000) from Peajmor Limited, a legal entity which Patrick Joseph Moran, a former Director, controls. Cara Ryan who was co-opted to the Board on 5 February 2013 is also a director of this entity and has a beneficial interest of 5%. At the year end Group companies were owed £74,000 for services provided to Peajmour Limited. This amount, in line with the treatment of other investors who received similar services as Peajmour Limited was provided for.

During 2012, Group companies earned £14,000 (2011: £6,000) from Gargo Pension Trust, a pension trust held for Gary Owens, the Executive Director of the Irish Segment. At the year end Group companies were owed £21,000 in relation to services provided for the pension trust.

During 2012, Group companies earned £11,000 (2011: £9,000) from Leeson Pension Trust, a pension trust held for Mark Bourke, the Chief Executive Officer of the Group. At the year end Group companies were owed £10,000 in relation to services provided for the pension trust. This has been settled post year end.

40. Events since the year end

On 5 February 2013, Patrick Joseph Moran retired as a Director and Chairman of the Board. John Gallagher and Cara Ryan were both co-opted to the Board on that date. On 5 February 2013, John Gallagher was appointed to the Board as the new Chairman.

The Board is recommending a final dividend of 3.19 cent per share (current GBP equivalent of 2.60 pence per share) which will be considered by the Shareholders at the Annual General Meeting.



41. Profit for the financial year

In accordance with section 148(8) of the Companies Act, 1963 and section 7 (1A) of the Companies (Amendment) Act, 1986, the Company is availing of the exemption from presenting its individual profit and loss account to the Annual General Meeting and from filing it with the Registrar of Companies. The Company’s profit for the year determined in accordance with Irish GAAP is £36,227,000 (2011: £1,729,000).

42. Principal Operating Subsidiaries, Associated Undertakings and Joint Ventures

COMPANY PRINCIPAL ACTIVITIES SHAREHOLDING AND VOTING RIGHTS

PRINCIPAL OPERATING SUBSIDIARIES INCORPORATED IN IRELAND

IFG Securities Limited Group administration services 100

IFG Investment and Mortgage Services Limited Distributor of financial products and services 50

IFG Private Clients Limited Pension and investment consultants 100

Mortgage and Assurance Services Limited Life assurance and mortgage broker 50

Planlife Advisory Services Limited Employee benefit consultants 100

IFG Pensco Limited Employee benefit consultants 100

The Endowment Policy Purchasing Purchase and sale of marketable Company Limited endowment policies 100

Trade Credit Brokers Limited Credit insurance services 100

ARB Underwriting Limited Wholesale insurance broker 70

All at IFG House, Booterstown Hall, Booterstown, Co Dublin telephone (353-1) 2752800 fax (353-1) 2752801

INCORPORATED IN THE ISLE OF MAN

IFG Group Finance Limited Provision of loan finance to Group companies 100

International House, Castle Hill, Victoria Road, Douglas, Isle of Man, telephone (44 1624) 630600, fax (44 1624) 624469

INCORPORATED IN JERSEY

IFG UK Finance Limited Provision of loan finance to Group companies 100

James Hay Insurance Company Limited Provision of SIPPS 100

Wellington House, 15 Union Street, St Helier, telephone (44 1534) 714 500, fax (44 1534) 767 787



INCORPORATED IN BVI

IFG Asia Limited Independent financial advisor 100

8F Shimbashi Kato Building, 5-26-8 Shimbashi, Minato-ku, Toyko 105-0004, Japan telephone (813) 3436 2001, fax (813) 4496 4665

INCORPORATED IN UK

IFG UK Holdings Limited Holding company 100

IFG Financial Services Limited Independent financial advisor 100

DK Wild & Company Limited Independent financial advisor 100

John Siddall Financial Services Limited Independent financial advisor 100

The IPS Partnership plc Pensions administration and pension scheme administrators 100

Associated Risk Consultants Limited Credit insurance services 100

Trade Credit Brokers (UK) Limited Credit insurance services 100

IPS Pensions Limited Actuarial and pension administration services 100

All at Trinity House, Anderson Road, Swavesey, Cambridgeshire, telephone (44 1954) 233 555 fax (44 1954) 233 500

Saunderson House Limited Independent financial advisor 100

1 Long Lane, London, EC1A 9HA telephone (44 207) 315 6500 fax (44 207) 315 6550

James Hay Holdings Limited Holding company 100

James Hay Administration Company Limited Provider of SIPPs 100

Dunn’s House St Paul’s Road Salisbury SP2 7BF telephone (0044) 0845 850 4455 fax (0044) 0845 850 4466

James Hay Pension Trustees Limited Pension Trustee services 100

James Hay Wrap Managers Limited Portfolio administrative services 100

Trinity House, Anderson Road, Swavesey, Cambridge telephone (0044)0845 850 4455 fax (0044) 845 850 4466

INCORPORATED IN FRANCE

Siddalls France SASU Independent financial advisor 100

Parc Innolin, 3 Rue de Golf, 33700 Merigneac, telephone (00 33) 55 6 34 75 51 fax (33) 5 56 34 75 52

PRINCIPAL ASSOCIATE INCORPORATED IN IRELAND

Rayband Limited Property development 35

IFG House, Booterstown Hall, Booterstown, Co Dublin telephone (353-1) 2752800 fax (353-1) 2752801



JOINT VENTURE INCORPORATED IN IRELAND

IFG McGivern Flynn Teoranta Insurance services 50

IFG House, Booterstown Hall, Booterstown, Co Dublin telephone (353-1) 2752800 fax (353-1) 2752801

Notes

1. The companies operate principally in their countries of incorporation.

2. Pursuant to Section 16 of the Companies Act, 1986, a full list of subsidiaries and associates will be annexed to the Company’s Annual Return to be filed in the Companies Registration Office in Ireland.

43. Approval of financial statements.

The Directors approved the financial statements on 22 April 2013.



Notes 2012 2011£’000 £’000

Financial AssetsInvestments in subsidiaries 1 15,941 70,099

Current assetsDebtors 2 183,407 160,850Cash at bank and in hand 1,102 -

184,509 160,850

Creditors (amounts falling due within one year) 3 (25,713) (113,284)Net current assets 158,796 47,566

Creditors (amounts falling due after one year) 4 (6,591) -Total assets less total liabilities 168,146 117,665

Net assets 168,146 117,665

Capital and reserves Share capital 5 9,949 11,785Share premium 6 81,141 80,879Capital conversion reserve fund 6 292 292Other reserves 6 2,639 7,561Capital redemption reserve 6 1,913 -Retained earnings 6 72,212 17,148Total shareholders’ funds 7 168,146 117,665


M G Bourke A M Comerford(Chief Executive) (Executive Director - Finance & Risk)

Company Balance Sheet - Irish GAAPAs at 31 December 2012


The principal accounting policies of the Company are listed below:

Basis of Preparation

The financial statements have been prepared on a going concern basis and in accordance with the Companies Acts, 1963 to 2012 and Generally Accepted Accounting Practice in Ireland (accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland). The financial statements are prepared in Sterling, denoted by the symbol £’000.

In accordance with section 148(8) of the Companies Act, 1963 and section 7(1A) of the Companies (Amendment) Act, 1986, the Company is availing of the exemption from presenting its individual profit and loss account to the Annual General Meeting and from filing it with the Registrar of Companies. The Company’s profit for the year determined, in accordance with Irish GAAP, is £36,227,000 (2011: £1,729,000).

Basis of accounting

The financial statements are prepared under the historical cost convention.

Financial assets

The Company classifies its financial assets in the following categories: loans and receivables and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets, with fixed or determinable payments, that are not quoted in an active market. They arise when the Company provides services with no intention of trading the receivable. They are included in current assets, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current assets. Loans and receivables are included in debtors in the balance sheet and are recognised initially at fair value and, subsequently, carried at amortised cost using the effective interest method less provision for impairment. A provision for impairment of receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor delinquency in payments are considered to be indicators of a receivable being impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in administrative expenses. When a receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts, previously written off, are credited against administrative expenses.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either classified in this category or not classified in any other category. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the end of the balance sheet date.

Accounting Policies for the Company - Irish GAAP


All financial assets are initially recorded at fair value, including transaction costs. All purchases and sales are recognised on the settlement date. Available-for-sale financial assets are subsequently carried at fair value. Gains and losses arising from changes in the fair value of available-for-sale financial assets are recorded in equity. When available-for-sale financial assets are sold or impaired, the accumulated fair value adjustments are included in the profit and loss as gains and losses from investment securities. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risk and rewards of ownership.

Financial assets are assessed for impairment at each balance sheet date. In the case of equity securities, classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. For such assets, any impairment charge is the amount currently carried in equity for the difference between the original cost, net of any previous impairment, and the fair value.

Investments in subsidiaries are stated in the Balance Sheet at cost unless they have been impaired, in which case they are carried at net realisable value or value in use as appropriate. In situations where the event that caused the original impairment loss has reversed in a way not foreseen in the original impairment assessment, the impairment loss is reversed.

Deferred taxation

Deferred tax is provided on all material timing differences that have originated, but not reversed, at the balance sheet date where transactions or events, that result in an obligation to pay more tax in the future or a right to pay less tax in the future, have occurred at the balance sheet date.

Timing differences are differences between profits/(losses) computed for tax purposes and profits/(losses) as stated in the financial statements, dealt with in different years for tax purposes.

Foreign currencies

Transactions denominated in foreign currencies are translated into GBP at the rate of exchange ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All translation differences are taken to the profit and loss.

Dividends

Dividends on ordinary shares are recognised as a liability in the Company’s financial statements in the period in which the dividends are approved by the Company’s Shareholders. Dividends declared after the end of the reporting period are disclosed in note 16 in the Group financial statements.

Share based payment compensation

The Company operates a number of equity-settled, share-based compensation plans for employees of some of its subsidiaries. The fair value of the employee services, received in exchange for the equity instruments granted in each of the investments held by the Company, is recognised as an addition to the investment with a corresponding increase in equity. The fair value of share options is determined using the Black-Scholes model while the fair value of shares awarded is estimated as the market price of the shares at the grant date. The proceeds received by the Company when share options are exercised are credited to share capital at nominal value and to share premium.



In line with the transitional arrangements set out in FRS 20, “Share Based Payment”, the recognition and measurement principles of this standard have been applied only in respect of share entitlements granted after 7 November 2002 and not vested by 1 January 2005.

The Company does not operate any cash-settled share-based payment schemes or share-based payment transactions with cash alternatives as defined in FRS 20.

Borrowings

All borrowings are initially recognised at fair value, net of transaction costs incurred.

After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any transaction costs and any discount or premium on settlement. Gains and losses are recognised in the profit and loss when the liabilities are derecognised or impaired, as well as through the amortisation process.

Borrowings are classified as current unless there is an enforceable entitlement to repay balances more than twelve months after the balance sheet date, in which case they are classified as non-current.



1. Investments in subsidiaries

£’000CostAt 1 January 2012 79,540Additions 84,349Disposals (138,119) Capital contribution in respect of share based payment compensation 291At 31 December 2012 26,061

Impairment provisionAt 1 January 2012 (9,441)Charge for the year (679)At 31 December 2012 (10,120)

Net book amountAt 31 December 2011 70,099At 31 December 2012 15,941

Principal subsidiaries are listed in note 42 of the Group financial statements.

2. Debtors

2012 2011£’000 £’000

Amounts receivable within one year

Amounts due from subsidiaries 182,094 155,736Receivable from associates - 1,109Other debtors 1,307 1,081Prepayments 6 65

183,407 157,991Amounts receivable after one year

Amounts due from subsidiaries - 2,859183,407 160,850

The carrying value, less impairment provision of debtors and other receivables, approximates fair value. All receivables from subsidiary undertakings are interest free and repayable on demand.

3. Creditors (amounts falling due within one year)

2012 2011£’000 £’000

Trade and other creditors 77 572Accruals 1,186 30Amounts due to subsidiaries 24,450 112,682

25,713 113,284

Creditors for taxation and social welfare included above 39 27

The carrying amount of creditors approximates fair value.

Notes to the Company Balance Sheet - Irish GAAP


4. Creditors (amounts falling due after one year)

2012 2011£’000 £’000

Borrowings (6,591) -(6,591) -

On 29 November 2012, the Company entered into a new facility agreement with Barclays Bank Ireland plc for a facility of £25.0 million, of which £7.0 million is drawn down. The amount of £7.0 million is to be repaid in December 2017.

5. Share capital

Authorised 2012No. of shares

2012

£’000

2012

€’000

2011 No. of shares

2011

£’000

2011

€’000

Ordinary shares of 12c each 140,187,210 13,095 16,822 140,187,210 13,095 16,822“A” ordinary shares of €1.27 each 8,200 7 10 8,200 7 10

13,102 16,832 13,102 16,832

Allotted and fully paid up No. of shares £’000At 1 January 2011 124,388,615 11,648Share options exercised during year 415,500 43Shares issued under LTIP during year 916,671 94At 31 December 2011 125,720,786 11,785

Share buy-back (22,603,636) (1,913)Share options exercised during year 447,682 44Shares issued under LTIP during year 333,333 33At 31 December 2012 103,898,165 9,949



6. Retained earnings and other reserves

Sharepremium

Capitalconversion

reserve fund

Otherreserves

Capitalredemption

reserve

Retainedearnings

Total

£’000 £’000 £’000 £’000 £’000 £’000

At 31 December 2010 80,613 292 7,224 - 19,354 107,483

Profit for the year - - - - 1,729 1,729Dividends - - - - (5,742) (5,742)Movement to currency translation account - - - - 1,807 1,807Equity shares issued for the LTIP - - (94) - - (94)Exercise of equity share options 266 - - - - 266Value of employee services - Share options - - 282 - - 282 - LTIP - - 149 - - 149At 31 December 2011 80,879 292 7,561 - 17,148 105,880

Profit for the year - - - - 36,227 36,227Unrealised gain for the year - - - - 48,629 48,629Dividends - - - - (4,536) (4,536)Share buy-back - - - 1,913 (30,436) (28,523)Reclassification - - (5,180) - 5,180 -Other (19) - - - - (19)Equity shares issued for the LTIP - - (33) - - (33)Exercise of equity share options 281 - - - - 281Value of employee services - Share options - - 291 - - 291At 31 December 2012 81,141 292 2,639 1,913 72,212 158,197

For information on the share buy-back please see note 32 of the Group financial statements.

The net movement in retained earnings was an increase of £55,064,000 in the year ended 31 December 2012 (2011: reduction of £2,206,000).

7. Reconciliation of movements in Shareholders’ funds2012 2011

£’000 £’000

Profit for the year 36,227 1,729Unrealised gain for the year 48,629 -Dividends (4,536) (5,742)Movement to currency translation account - 1,807Other (19) -Share buy-back (30,436) -Exercise of equity share options 325 309Value of employee services - Share options 291 282 - LTIP - 149Net addition /(reduction) to Shareholders’ funds in the year 50,481 (1,466)Shareholders’ funds at 1 January 117,665 119,131Shareholders’ funds at 31 December 168,146 117,665



During the year, a gain of £48,629,000 was made on the sale of the holding company of the Group’s UK subsidiaries to another Group company. As the consideration on the gain on disposal is not qualifying consideration, the gain is considered an unrealised profit and does not form part of the realised profits of the Company.

8. Related party transactions

Transactions with entities that are 100% owned by Group or investees of the Group qualifying as related parties are not disclosed as the Company is exempt from such disclosures under Paragraph 3(c) of FRS 8 - ‘Related Party Disclosures’.

At the year end, the Company had payables of £245,000 (2011: £nil) to IFG Investment and Mortgages Services Limited. The payable is not interest bearing.

At 31 December 2012, the Company was owed £nil (2011: £1,109,000) by Rayband Limited, an Irish unlisted company and an associate of the Group. During 2012, the balance was transferred to another Group entity. During the year, the Company paid £3,000 (2011: £6,000) in expenses on behalf of Rayband Limited. These advances are unsecured, interest free and have no fixed repayment date. This company is controlled by Patrick Joseph Moran, the former Director and Chairman of the Company.

9. Statement of cash flows

The Company has taken advantage of the exemption from preparing a statement of cash flows under the terms of Financial Reporting Standard number 1 (as 1996 revised), on the grounds that a Group statement of cash flows is included in the Group financial statements which are publicly available and include the results of the Company.

10. Guarantees

The Company, along with some of its subsidiaries, has guaranteed Group borrowings of £7,000,000 and guarantees of £1,600,000 totalling £8,600,000 (2011: £42,814,000). There are certain share pledges for some subsidiary companies under the bank facility agreement.

Pursuant to the provisions of Section 17, Companies (Amendment) Act, 1986, the Company has guaranteed the liabilities of its wholly-owned subsidiary undertakings in the Republic of Ireland for the financial year ended 31 December 2011 and, as a result, such subsidiary undertakings have been exempted from the filing provisions of Section 7, Companies (Amendment) Act, 1986 and Regulation 20 of the European Communities (Accounts Regulations) 1993, respectively.

11. Auditors’ Remuneration

2012 2011£’000 £’000

Statutory audit of parent entity accounts 9 9

12. Approval of financial statements

The Directors approved the financial statements on 22 April 2013.


Group Financial Record

Net (Debt)/Cash £’ million

Turnover £’000

Dividend Per Share £ pence

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

‘08 ‘09 ‘10 ‘11 ‘120

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

‘09 ‘10 ‘11 ‘12‘08

(100)

(80)

(60)

(40)

(20)

0

20

40

‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12(100)

(80)

(60)

(40)

(20)

0

20

40

IFG Group plc

IFG House, Booterstown Hall, Booterstown, Co Dublin Telephone (353-1) 275 2800 Fax (353-1) 275 2801 E-Mail: [email protected]

Date post:	17-Aug-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Annual Report and Accounts 2012 - London Stock Exchange · 2 ANNUAL REPORT & ACCOUNTS 2012 Adjusted...

Documents