Part of www.page. com We are one of the world’s best known and most respected specialist recruitment consultancies. We deliver recruitment services to clients through a network of 140 offices the interests of spouses, civil partners, of the number of Directors (the (e) notification is received by the Strategic Report across 36 countries. Our vision is to be the leading specialist recruiter in the markets in children, companies and trusts. “Relevant Proportion”) provided that: Company from that person that he is resigning or retiring from his office Borrowing powers of the Directors  (i) the provisions of this paragraph which we operate. (b) shall only apply if the as director, and such resignation The Directors shall restrict the number of Directors retiring or retirement has taken effect in borrowings of the Company and under paragraph (a) above accordance with its terms Contents Highlights exercise all powers of control exercisable is less than the Relevant (f) in the case of an Executive by the Company in relation to its Proportion Director, his appointment as such Strategic Report subsidiary undertakings so as to secure  (ii) subject to the provisions of is terminated or expires and the Gross profit increase (as regards subsidiary undertakings so Directors resolve that he should 1 Chairman’s Introduction the Act and to the relevant far as by such exercise they can secure) provisions of the Articles of cease to be a Director 3 Overview +3.0%* (up 11.7% in reported rates) that the aggregate principal amount Association, the Directors to (g) that person is absent from 4 Business Model (including any premium payable on final retire under this paragraph Directors’ meetings for more than 7 Strategic Review repayment) outstanding of all money (b) shall be those who have six consecutive months (without Revenue Ordinary and Special Dividend 13 Latin America and the UK borrowed by the Group (excluding been longest in office since permission of the other Directors) 15 KPIs amounts borrowed by any member of their last appointment or and the Directors resolve that he reappointment, but as between should cease to be a Director 18 Q&A with Steve Ingham, CEO £1,196.1m 18.44p the Group from any other member of the Group), shall not at any time, save persons who became or were (h) a notice in writing is served on him

19 Corporate Social Responsibility Corporate Governance 2015: £1,064.9m +3.6%* 2015: 27.5p with the previous sanction of an ordinary last reappointed Directors on signed by all the Directors stating 23 Regional Perspectives resolution of the Company, exceed the same day those to retire that that person shall cease to be 25 Risk Management Structure Gross Profit % Non-UK an amount equal to three times the shall (unless they otherwise a Director with immediate effect agree among themselves) be 27 Principal Risks and Uncertainties aggregate of: determined by lot There is no requirement of share 32 Review of the Year (a) the amount paid up on the share ownership for a Director’s qualification. £621.0m 76.4% capital of the Company If the Company, at the meeting at which Amendments to the articles of Corporate Governance 2015: £556.1m +3.0%* 2015: 72.7% (b) the total of the capital and revenue a director retires by rotation, does not fill association 37 Chairman’s Introduction to reserves of the Group, including the vacancy the retiring Director shall, if Corporate Governance Operating Profit % Non-Accounting and Financial Services any share premium account, willing to act, be deemed to have been Subject to the Act, the Articles of reappointed unless a resolution not to 38 Our Board of Directors capital redemption reserve, capital Association of the Company can be contribution reserve and credit fill the vacancy or not to reappoint that 41 The Executive Board altered by special resolution of the £101.0m 61.6% balance on the profit and loss Director is passed. members. 42 Corporate Governance Report account, but excluding sums set In addition to any power of removal 46 Nomination Committee Report 2015: £90.1m +1.4%* 2015: 60.4% aside for taxation and amounts Winding-up under the Act, the Company may, by attributable to outside shareholders 48 Audit Committee Report special resolution, remove a director If the Company is wound up, the Basic Earnings Per Share Conversion rate in subsidiary undertakings of the 53 Directors’ Remuneration Report – before the expiration of his period of liquidator may, with the sanction of a Annnual Statement Company and deducting any debit special resolution of the Company and balance on the profit and loss office (without prejudice to any claim for any other sanction required by law: 55 Directors’ Remuneration 23.1p 16.3% account, all as shown in the latest damages for breach of any contract of Policy Report (a) divide among the members in kind Financial Statements 2015: 21.3p -1.7%* 2015: 16.2% audited consolidated balance sheet service between the director and the 60 Directors’ Remuneration Report and profit and loss account of the Company) and, subject to the Articles of the whole or any part of the assets of 73 Directors’ Report * In constant currency at prior year rates Group, but adjusted as may be Association, may by ordinary resolution, the Company and, for that purpose, 75 Directors’ Statements necessary in respect of any variation appoint another person who is willing to set such values as he deems fair of Responsibility in the paid up share capital or share act as a director, and is permitted by law upon any property to be divided and Our strategy Business model premium account of the Company to do so, to be a director instead of him. determine how the division shall be since the date of that balance sheet The newly appointed person shall be carried out between the members Financial Statements We have established three categories into PageGroup’s business model has proved itself and further adjusted as may be treated, for the purposes of determining (b) vest the whole or any part of the 76 Independent Auditor’s Report which we have grouped each of our markets both through economic cycles and as the necessary to reflect any change the time at which he or any other assets in trustees upon such 81 Consolidated Income Statement based on criteria including the size of the business has expanded into a global enterprise. since that date in the companies director is to retire as if he had become a trusts for the benefit of members 81 Consolidated Statement of opportunity and the potential for future growth. At its core is a focus on organic growth. comprising the Group director on the day on which the director as the liquidator shall think fit, but no member shall be compelled to Comprehensive Income Director’s appointment, retirement in whose place he is appointed was last accept any assets upon which there 82 Consolidated and Parent and removal appointed or reappointed as a Director. Typically under-developed is a liability Company Balance Sheets Large, markets, but where we have At each annual general meeting, there A Director shall be disqualified from 83 Consolidated Statement of Changes High a successful track record and holding office as soon as: Potential confidence in our ability to scale shall retire from office by rotation: in Equity Agile and (a) that person ceases to be a director our operations substantially. Career responsive (a) all Directors of the Company who 84 Statement of Changes in Equity – development structure held office at the time of the two under the provisions of the Act or Parent Company is prohibited by law from being a preceding annual general meetings Additional Information 85 Consolidated and Parent These are large markets where Director Team and who did not retire by rotation at Company Cash Flow Large, we are already proven with profit-led either of them (b) a bankruptcy order is made against Organic compensation Statements Proven a strong track record and a Global that person significant presence. management Growth (b) such additional number of Directors 86 Notes to the Financial mobility as shall, when aggregated with the (c) a composition is made with that Statements number of Directors retiring under person’s creditors generally in Markets which are, or could be, paragraph (a) above, equal either satisfaction of that person’s debts significant profit contributors Productivity-led Additional Information Small Experienced expansion one third of the number of Directors, (d) by reason of that person’s mental with attractive conversion management pool 113 Shareholder information and and Medium, in circumstances where the number health, a court makes an order which High Margin margins, but are unlikely (or not of Directors is three or a multiple of wholly or partly prevents that person advisers yet proven) to be able to grow to three, or in all other circumstances, from personally exercising any more than 300 fee earners. the whole number which is nearest powers or rights which that person to but does not exceed one-third would otherwise have

PageGroup Annual Report 2016 PageGroup Annual Report 2016 116 Strategic Report Corporate Governance FinancialFinancial StatementsStatements Additional Information 340 8 Offices employees AUSTRALASIA Technology System transformation 865 ASIA and change Attraction and retention Data security 17 Offices employees People development PageGroup brands and reputation Annual Report 2016 PageGroup Fiscal and legal compliance 81% 53% 13% Financial management and control

People Operational

Positive score to Employee Engagement Survey Working population is female Working Reduction in energy derived emissions Sustainability Being a responsible corporate citizen is not it is good for the only thing to do, the right long-term health of our business. 2,553 EMEA 63 Offices employees Risk UK 1,411 Categories 27 Offices employees 118.3m £138.8m £125.5m £ £238.4m

Strategic Financial

541 LATIN LATIN

Total

AMERICA 15 Offices employees £621.0m 389 exposure efficiencies translation risk NORTH NORTH AMERICA 10 Offices employees Foreign exchange – Shift in business model Macro-economic Legal, Technology, HR etc Technology, Legal, Property & Construction, Engineering, Procurement & Supply Chain Sales & Retail Marketing, Delivery of operational Accounting and Financial Services Principal risks Gross profit by discipline

(13% of Group) (19% of Group) (44% of Group) Countries acrossCountries the world Scale Brand

Culture (24% of Group)

Page 23 for EMEA Performance Review Page 24 for Asia Pacific PerformancePage 24 for Review Page 23 for the UK Performance Review Page 24 for The Americas Performance Review The Page 24 for

sia Pacific sia Pacific

£272m Gross Profit EMEA

£120m Gross Profit

A

6,099

£83m Gross Profit

The Americas Headcount

£146m Gross Profit

UK 36

Where we operate we Where over the past 40 years. balance we have achieved in the business combination of these three factors and the Our true competitive advantage is the

advantage Our competitive Chairman’s Introduction

2016 Performance EU referendum result in June in our UK China. However, despite these challenges, business, which was down 3.5% on the this category was flat on the prior year In 2016 we celebrated our 40th anniversary, prior year and the continued uncertainty in constant currency, and continues to we have certainly come a long way since in the Financial Services sector which represent 30% of Group gross profit. 1976. From those initial days, trading above had a negative effect on a number of our To enable us to grow our market presence, a laundrette in London, we have grown into businesses, in particular the US, which we have continued to expand our a FTSE 250 company with operations in 36 was down 3% in constant currency. We disciplines into new countries such as countries and over 6,000 staff. continued to invest in to new markets and Procurement and Supply Chain into India disciplines and finished the year with an The Group recorded its highest level of and Malaysia as well as Healthcare and increase in the number of fee earners to gross profit in 2016 of £621m, an increase Life Sciences into Poland and Portugal. 4,711. At the same time we continued of 11.7% over the prior year in reported We will also invest in headcount, not only to deliver efficiencies in our back office rates and 3.0% in constant currency, with in our Large High Potential Markets, but activities and finished the year with a fee 20 of our 36 countries delivering their best also in those businesses where growth is earner to operational support staff ratio of recorded level of gross profit. However, our strongest and where market conditions 77:23. During the year, our new headcount growth was impacted by the unexpected support investment. We have made good was added at a ratio of 86 fee earners for progress in setting up our European every 14 operational support staff as we Shared Service Centre. The Marketing and continued to move towards our target ratio Finance elements of the transition are now of 80:20. complete and we are approximately two The best performing region was once thirds of the way through the IT transition. again our largest region, EMEA, which As well as improving quality and efficiency delivered another strong year, with now through improved operational consistency, 10 consecutive quarters of double-digit it is anticipated that this will lead to cost gross profit growth in constant currency. savings in 2017 and beyond. David Lowden EMEA grew gross profit 25.3% in reported During 2016, we completed the roll-out of Chairman rates over the prior year and 11.5% in our operating system, Page Recruitment constant currency, an outstanding result. System (PRS). Initial feedback has been In terms of gross profit, Southern Europe extremely positive, with consultants grew over 18% in constant currency. benefiting from the enhanced speed and There were a number of other pleasing functionality of the new system. Each PRS results such as Latin America, outside of roll-out also saw the introduction of our Brazil, which also grew strongly, up 19% next generation website, a key part of our on the prior year in constant currency, approach to candidate acquisition. and the US, excluding New York Financial Services, which grew 11%. However, our

business in Brazil was once again subject “ We continued to invest

to difficult trading conditions. The macro- economic environment in Brazil continued in to new markets“ and to impact our business, with negative growth in constant currency of 21%. In disciplines our Asia Pacific region, although we had strong performances across a number of our countries, the trading environment in One of the key factors of our continued Greater China meant our businesses there success is the retention of our highly had a difficult year, down 2.2% in constant talented people. The importance of their currency. continued dedication and willingness to move within the business to where The PageGroup leadership team also they can add most value, cannot be continues to make progress on the underestimated and is greatly appreciated. strategic priorities. In 2017, we will continue Our ongoing focus on staff retention, to invest in our five Large High Potential mobility and development will enable us Markets, namely the US, Germany, to improve productivity and, consequently, South East Asia, Greater China and Latin improve conversion rates. America. In November 2016, we opened our 36th country, Thailand, to extend our The Group benefited from positive foreign South East Asian platform. In 2016, the exchange movements which increased overall performance of our Large High- our reported gross profit by £48m and Potential Markets was impacted by the operating profit by £10m. Operating profit weak Financial Services market in New grew 12.1% in reported rates, 1.4% in York, the continued macroeconomic constant currencies and basic EPS rose issues in Brazil and uncertainty in Greater over 8%.

1 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 2 Annual Report 2016 PageGroup last 40 years is purely due to their efforts. last 40 years is purely Strategic Report Strategic sets out PageGroup’s This report the we address strategic vision and how the opportunitiesvarious markets and have highlighted areas us. We before this vision, critical to achieving which are Proposition Value such as our Employee also details report shown on page 19. The social to corporate and our approach including how we engage responsibility, with our stakeholders. Looking Ahead for 2017 is The global trading environment The UK will initiate very difficult to predict. will US with a new President the Brexit, economic policies, and new introduce be elections in several of our will there major markets such as Brazil, Germany we will continue to and France. However, while growth focus on driving profitable quickly to any being able to respond changes in market conditions, as we did 2016. throughout Last, but by no means least, on behalf I would like to thank our of the Board is a people business people. PageGroup Our with a clear and tangible culture. and working dedicated, hard are staff committed to the Brand. They have a team ethos which is evident in very strong everything we do. Our success over the

Board diligent in both remains Board Your the executivesupporting and challenging and recommendations strategy team’s to changing market their responses of the work ofconditions. Full details in and subjects discussed the Board and set out in the Directors’ the year are Committees’ reports. members have considerable All Board internationallyexperience of working in parts of the world. Indeed, the different skills, a good mix of relevant has Board experience, gender and backgrounds. benefit to This diversity is of great the business. In October 2016 we welcomed Michelle Michelle has a Healy onto the Board. wealth of experience in global human leadership and general resources the management. She is currently Officer People & Culture Chief Group and a member of the Executive Group Management of ISS A/S, a leading of facility services, listed global provider on the Copenhagen Stock Exchange. held global, Michelle has previously country leadership roles and regional plc and with British American Tobacco of experience SABMiller plc. Her breadth leadership in global human resources will complement the experience of other and I believe will bring members Board to PageGroup. benefit great has Ruby McGregor-Smith Baroness informed us that she will not renew the term of her appointment when it on 23 May 2017. Consequently expires at the Ruby will not stand for re-election forthcoming Annual General Meeting. Ruby has been a Non-Executive Director for 10 years. She has of PageGroup made an outstanding contribution over this time and has played an important role and growth in helping to drive the Group’s development. I would like to thank her on for all she has done behalf of the Board for PageGroup.

on 2015. dividend of 11.98p, an increase of 4.2% dividend of 11.98p, an increase in October of 3.75p, this implies a total together with the interim dividend paid the final dividend to 8.23p. When taken for the year, we propose to increase to increase we propose for the year, Given this cash position and our results Given this cash position and our results year with cash balances of £92.8m. operations of £121.3m and ended the In 2016, we generated cash from In 2016, we generated cash from it during more prosperous times. prosperous it during more during downturns, as well as increasing sustain the level of dividend payment term growth rate. In this way we can term growth economic cycle in line with our long- the dividend over the course of the Our ordinary dividend policy is to grow dividend policy is to grow Our ordinary the £70m returned by special dividend.the £70m returned payments during the same period and top of over £350m of ordinary dividend top of over £350m of ordinary of its issued share capital. This is on of its issued share buybacks and cancelled around 30% buybacks and cancelled around has returned over £275m by share has returned over £275m by share 15 years since flotation, the Group 15 years since flotation, the Group and cancelling the shares. Over the and cancelling the shares. to shareholders through share buybacks share through to shareholders Historically, the Group has returned cash has returned the Group Historically, dividends and/or share buybacks. dividends and/or share supplementary returns, using specialsupplementary returns, be returned to shareholders through through be returned to shareholders in excess of these first two priorities will of an ordinary dividend. Cash generated of an ordinary to make returns to shareholders by way to make returns to shareholders share plans. Our second use of cash is plans. share hedge its liabilities under the Group’s hedge its liabilities under the Group’s investment requirements, as well as to investment requirements, cash remains to satisfy operational and cash remains in this way. The Group’s first use of The Group’s in this way. was the first time we had returned cashwas the first time we had we paid to shareholders in 2015, which we paid to shareholders special dividend. This followed the £50m £20m to shareholders by way of a £20m to shareholders shareholder returns. shareholder dividends, we returned in ordinary longer-term growth and deliver robust and deliver robust growth longer-term paying over £36mIn 2016, in addition to our people, will enable us to achieveour people, will enable Dividends and the investment in the skills ofand the investment in where market conditions are favourable market conditions are where new disciplines, increasing headcount new disciplines, increasing high potential markets, the roll-out of the roll-out high potential markets, We believe, our continued focus on our believe, our continued We Overview

Financial Strategic People Operational

Business Highly profitable Sustainable organic growth Team-based service delivery Strong brands Maintain a strong balance Diversification to mitigate Talent and skills development/ Effective use of technology Model sheet cyclicality by geography, retention brand and discipline Highly cash generative Focus on operational P4 efficiency

Long-term investment into To be the leading specialist Career development structure Assurance of a quality core markets: recruiter in each of the service markets in which we Large, High Potential; Effective recruitment operate Strategy process Large, Proven; and Small and Medium, P7 High Margin

Macro-economic exposure Shift in business model People development Technology; systems transformation and Foreign exchange Delivery of operational Attraction and retention change; data security; translation risk efficiencies Risks brand reputation; financial management and control; fiscal and legal compliance P25

Gross profit growth Fee earner headcount Employee satisfaction survey Measurement performed growth at a granular level Gross profit diversification Management experience Gross profit per fee earner KPIs Earnings per share Fee earner:operational Net cash support staff ratio Perm:Temp ratio P15 Conversion rate

EPS growth: 3 year Strategic targets Leadership and people Cost and financial cumulative development management IT transformation PBT performance Retention/succession Risk management and Remuneration internal controls Comparator gross profit growth IT strategic development P53

Maintain a strong balance Return surplus cash to Ensure dividends are paid at First use of cash is to sheet shareholders sustainable levels such that satisfy operational and Dividend investment in the business and investment needs, as its people is maintained well as to hedge liabilities Policy under the Group’s share plans P35

3 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 4 Annual Report 2016 PageGroup Discipline expertise organise our consultants We into 14 specialist discipline grouped into four broad teams, then specialise We categories. digital marketing further (e.g. within Marketing) to ensure we provide expert recruitment services to our clients. Perm and temp mix PageGroup is the international market leader for permanent recruitment in the majority of countries in which we operate. also have a substantial We and growing temporary recruitment business in markets where temporary placements for professionally qualified candidates are culturally accepted. What we do best are one of the world’s We known and most respected specialist recruitment We deliver consultancies. recruitment services to clients through a network of 140 offices across 36 countries. Geographic reach PageGroup has a truly global with a substantial and reach, well-balanced business across including Latin all regions, America We source and Asia. candidates from domestic and international markets and provide a comprehensive service to both local and multinational clients. A Global Leader A Global

QUALIFIED PROFESSIONAL CLERICAL PROFESSIONAL EXECUTIVE SEARCH GENERALIST STAFFING

TARGETED SECTORS TARGETED

administrative support, professional clerical and junior management levels. administrative support, requiring permanent employees or temporary or contract staff at technical and Page Personnel offers specialist recruitment services to organisations Page Personnel Page Page recruits on a permanent, temporary, contract or interim basis. temporary, Page recruits on a permanent, market. Operating at the qualified professional and management level, Michael Operating at the qualified professional and management level, market. of 14 broad disciplines, each providing a service to a specialist area of the of 14 broad disciplines, the first business in each new country that we enter. Michael Page is comprised the first business in each new country that we enter. Michael Page is the original PageGroup brand and is normally established as Michael Page sub-board and board levels. and retain their leadership talent. The roles on which we focus typically sit at the and retain their leadership talent. search, selection and management solutions for organisations needing to attract search, Page Executive is the Group’s executive search business and offers a range of Page Executive is the Group’s Page Executive Page

different of the market. levels PageGroupbrands operating into three is organised at Business Model Business Business Model

A focus on organic growth PageGroup’s business model has proved itself both through economic cycles and as the business has expanded into a global enterprise. At its core is a focus on organic growth.

PageGroup offers its consultants a well-defined and varied career in recruitment. This Recruitment is a fast-paced and dynamic business. includes a clear development structure with significant Our agility gives us the confidence to respond quickly to opportunities for the most talented. Agile and the opportunities and challenges as they appear. Career responsive development structure

We regularly move experienced directors A focus on team-based performance Team into markets where they can add the profit-led rather than the individual promotes most value and guide the business Organic compensation positive corporate behaviour and through the challenges of a market Global consistent quality of service for both cycle, while allowing us to retain and management Growth clients and candidates. motivate key senior talent. mobility

Productivity-led Experienced expansion Experience through economic cycles management pool Our operational metrics focus on productivity, and across geographies and disciplines by team, discipline and geography. This bottom-up reduces our learning curve, maximises approach aligns expansion criteria throughout the Group, scalability and is crucial for placing resources focusing and optimising investment on key priorities. where they will add the most value.

Our objectives

Diversified Scalable Talent organic and flexible and skills Sustainable growth capacity development growth

Diversification helps The ability to respond Our business is to mitigate the cyclical quickly to changing reliant on having The combination of these nature of the recruitment market conditions is the experience to objectives has enabled markets, which for us critical to managing manage the challenges PageGroup to deliver strong is combined with high the business efficiently and identify the cash flows and have the operational gearing throughout economic opportunities across financial strength to prosper given our permanent cycles. our local markets. through economic cycles. recruitment bias. We ensure that we Our scalability is It also gives the resilience Our broad-based always have the ability to dependent on having to cope with market capabilities enable us flex our capacity up and the right people downturns without damaging to capitalise on market down, while maintaining available to grow the the business’s long-term opportunities across a core presence in each business and nurture prospects. the globe, avoiding market to service clients the next generation. over-reliance on any one properly and retain geography or discipline. management experience to enable a quick recovery.

5 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 6 Annual Report 2016 PageGroup See page 7 for more on our Strategic Vision See page 7 for more on our Strategic Culture the is unique in culture PageGroup’s sector and has ingrained values of how to do business ethically and to make decisions for the long term. that delivers a It is a global culture both internally andconsistent approach while being accepting of the externally, particular character of each local market. is of the culture The global nature of management aided by a high degree mobility. consultant our through It is reinforced by the processes training programmes, which we do business, and our team- which is at the heart of based approach everything we do. It also encourages us to challenge ourselves with confidence, the successes of our and to respect colleagues. Culture Scale Large, Proven Large, and a track record with a strong proven already we are large markets where These are for example the UK and Australia. significant presence, High Margin Small and Medium, contributors with attractive conversion or could be, significant profit Markets which are, than 300 fee to more to be able to grow unlikely (or not yet proven) margins, but are earners, for example Japan and Switzerland. Large, High Potential Large, we have a successful track record markets, but where under-developed Typically for example Latin and confidence in our ability to scale our operations substantially, America and South East Asia. Scale commit to Our scale enables PageGroup cycles giving clients to markets through the confidence to build long-term with us. It also enables a relationships with participation offering client broader disciplines, even in some of multiple from our newest markets. diverse expertise The ability to offer range of complementary broad a across specialisms and geographies enhances and the candidate pools our offering we can access. Our scale enables us to build an unrivalled skillset and level of experience, equally available to the smallest and largest of our clients. financial standing has also Our strong important for many been increasingly not to work with clients who prefer the smaller market players, particularly in times of economic uncertainty. also derive comfort from staff Temporary that their salaries our financial strength will be paid. Brand

Our strategy our vision of aims to fulfil being the leading specialist recruiter in each of the markets in which we Our service offering is spread operate. across a broad set of disciplines focusing on and geographies, opportunities where our industry and market experience can set us apart Operating in from the competition. 36 geographies and in highly diverse we have established three cultures, categories into which we have grouped each of our markets based on criteria including the size of the opportunity and the potential for future growth. This structure has provided a clear investment framework for the business.

there for the long term. for there provide a high quality service and to be a provide candidates to remain committed, to candidates to remain We are trusted by our clients and are We behind their online marketing profile. behind their online marketing profile. Our strategy of consultants who have substance key decisions on their future in the hands key decisions on their future candidates will only continue to place online participant. However, high quality online participant. However, delivery channels. We are a highly active are delivery channels. We recruitment sector’s marketing and sector’s recruitment The digital revolution has reshaped the has reshaped The digital revolution marketplace. these brands to resonate strongly in their strongly these brands to resonate operate and level of expertise enables commitment to the markets in which we of quality service. Our consistent levels of confidence, trust and assurance Personnel are brands which inspire high brands which inspire Personnel are Page Executive, Michael Page and PagePage Executive, Michael Brand over the past 40 years. We generate funds through fees earned for candidates placing temporary in permanent and We roles. over the past 40 years. Our true competitive advantageOur true competitive is the combination and the balance we have of these three factors in the business achieved Our competitive advantage Our competitive Strategic Review

This review will take you through the source of our competitive I would like to welcome you to our advantage and the relationship to our Strategic Plan. Then following Strategic Review, where we have on from this, how we approach our investment plan in our markets. We continue this year to relate how we measure performance, through our KPIs – both financial and non financial – with associated outlined how we see current market risks. These risks then directly link to the four elements (financial, strategic, people and operational) of the performance criteria in our dynamics, together with PageGroup’s current executive remuneration plans. business model and strategy. Global vision Our global diversification strategy is part of our clear strategic vision: to be the leading specialist recruiter in the markets in which we operate. Our presence in major global economies enables the greatest potential for long-term growth in gross profit at attractive conversion rates. This enables us to offer a premium service that is valued by clients and attracts the highest calibre of clients. We offer our services across a broad set of disciplines and specialisations, solely within the professional recruitment market. Our background is in permanent recruitment, but nearly 25% of the business is now in the temporary market, with this being dependent on local culture and market conditions. Steve Ingham We offer a premium service which is valued by clients and attracts the CEO PageGroup highest calibre of candidates, due to our focus on opportunities where our market and industry knowledge can set us apart.

“ Our global diversification strategy is part of our clear strategic

vision: to be the leading specialist recruiter in the“ markets in which we operate.

Strategic framework PageGroup is focused on delivering against three key objectives to achieve its strategic vision and sustainable financial returns. These are to: 1) look for organic and diversified growth; 2) position the business to be efficiently scalable and highly flexible to react to market conditions; and 3) nurtur e and develop our people, driving our meritocratic growth model. Organic growth is at the centre of our business model. As set out on page 5, key elements of our business model are derived from this team-led approach, with great value placed on structured career development and the value that experienced management brings to the business.

7 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 8 Annual Report 2016 PageGroup The mobility of our people, together with the significant loyalty of the management team, vastly enhances the flexibility of our business model and allows the even in uncertain business to progress invest significantly therefore markets. We in our people, as the recruitment, and development of talent is retention fundamental in our ability to achieve long-term sustainable growth. Specialist industry knowledge and market with deep local knowledge Global reach, Expertise in premium candidate sourcing and candidate Experienced advocate for client high quality processes Consistent,

K

R is valued greatly, their career throughout and, as such, our management team and has some of the longest tenure Due to this experience in the industry. constant depth of talent that is available to the business, the senior executive team can flex the business exposure to any of our markets, both up and market to prevailing down, according conditions. They take decisions as to can achieve the PageGroup where the on investment from return greatest allocation of management resource. O

W

Reward and recognition Career opportunities Greater exclusivity Future candidates Future client Peer Peer recommendations

T Leads to... • Rapid career promotion • • Leads to... • Repeat business • • • Leads to... relationship • Career-long •

A

L

E

D

O

M

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U O rofessional high quality Access to jobs across entire compensation Consistent process Appropriate candidate P PageGroup service shortlist Market understanding and service Career advice client profiling client

Consultants structure and Team-based • • • Clients • Sector expertise • • Candidates • Professional high quality • •

Directors. The experience acquired The experience acquired Directors. future senior managers and main Board senior managers and main Board future join us know that they could be our from within, means that people who from internal career moves and promotion moves and promotion internal career in recruitment. Our strong record of record Our strong in recruitment. than a long-term and fulfilling career than a long-term and fulfilling career to understand that we can offer more more to understand that we can offer business. Our consultants quickly come particularly as an organically grown particularly as an organically grown are at the heart of everything we do, are We recognise that it is our people who that recognise We People and management People successes enhance our reputation; bring greater repeat business; and turn into clients and vice-versa. candidates repeat bring greater our reputation; successes enhance When these elements are brought together, the potential for a successful outcome for both client and candidate is maximised. Such both client and candidate is maximised. the potential for a successful outcome for together, brought are When these elements quality processes. Our value proposition is based around expertise and specialism and for this to be delivered in a consistent manner, supported by high in a consistent manner, delivered and specialism and for this to be expertise around is based Our value proposition Our value proposition Our value Strategic Review

Market dynamics but the advantages of being an early future impact on Group revenue. Set out participant and building scale can be on page 11 is an explanation of these The professional recruitment sector has considerable. categorisations and our approach to these always been highly sensitive to fluctuating different markets. economic conditions and is strongly As set out in the table below, PageGroup influenced by client and candidate views certain key features as defining Our market categorisation has provided confidence. Market liquidity can change a particular recruitment market profile, the business with a framework within rapidly, whether in terms of availability categorised by the proportion of roles filled which investment decisions can be judged, of jobs and candidates, or candidate through a recruitment agency (“market and guidance as to where management confidence in taking the next step in their penetration”). expertise and fee earner headcount is best placed. These decisions are continuously career. It can also be localised, whether by The challenges to achieving a significant reviewed in order to best align them to the geography or discipline, and differ between market position vary across these business needs and the prevailing market temporary and permanent placements in markets, as does their attractiveness environment, which is often fast moving the same market. We intend to maintain to PageGroup. These features, when and highly dynamic. our strategy of retaining our market taken together with PageGroup’s historic presence throughout downturns, whilst success in a particular market, helped closely controlling our cost base. define the Strategic Vision and identify Operational efficiency Through diversification, PageGroup which geographies would have the highest PageGroup is very aware of the need for has a well-balanced business profile in potential for long-term success. high levels of operational efficiency in a order to mitigate the exposure to any recruitment business, and especially one one geographic area or discipline. This Strategic vision with such a global footprint. Central to the strategy requires us to operate in very strategic objectives of scalable growth and PageGroup has a Strategic Vision diverse markets, each with a particular flexibility through the cycle is for this to be which defines its aspirations within recruitment culture, such as the degree to achieved while controlling the fixed asset various markets. It provides a disciplined which temporary placement opportunities base. framework to focus investment plans are acceptable to professionals. Other on geographies with the greatest long- Our relentless focus on sharing best aspects of this culture include the degree term potential, and to help structure the practice across the Group enhances the of outsourced recruitment undertaken, as career moves of the rising stars in the quality and consistency of the service opposed to in-house by HR departments. business. A portion of the Executive offering. We have continued to centralise In a number of geographic regions, such Directors’ remuneration is also linked to the many of our support functions into regional as Latin America or Greater China, our performance against milestones within this shared service centres enabling the potential markets are very large, yet Vision, and its overall achievement. capture and leverage of skills and expertise relatively immature. This provides not only for the benefit of the whole Group, An essential part of the development of significant market share opportunities, but whilst maintaining the robustness of the this Vision was to review the markets in also business development challenges. operational platform. which PageGroup operated, and to identify New markets can take time to crack, which had the greatest potential and likely

Emerging Developing Mature

Market penetration 0-15% 15-30% 30-70% Over 70%

Limited international Few well-established Well developed markets Highly competitive Competition operators present regional players with many international operators

France, Australasia, Latin America, SE Asia Germany, China UK, US Examples Holland, Spain, Italy

9 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 10 Annual Report 2016 PageGroup Mainly visible through improvement in gross but a buoyant market profit, helps to drive productivity, principally through reducing the time to hire. Notable influence on both gross profit and also Productivity, conversion rate. especially in permanent is significantly recruitment, enhanced as these market drivers positively align. Financial Impact Finally, further work on YourPage, our further work on YourPage, Finally, programme, Proposition Employee Value clarity of greater has looked to provide paths, and to increase individual career of identified talent at key career retention points and in key markets. end of 2016, the fee earnertotal and levels for the headcount was at record This was achieved together with Group. the continued best operational support operational ratio to date, reflecting within the business. efficiencies delivered in headcount and As well as progress has been a there market presence, focus on operational flexibility strong the Group. across completed the Marketing and We Finance transition to our new European in Barcelona. Service Centre Shared A major influence on market liquidity where macro-environment is sufficiently A major influence on market liquidity where macro-environment which helps to drive job candidates careers, will look to progress their stable, liquidity. Group average a 10% range over the cycle historically moves within (19.5%-22%). Reflects level of candidate shortage within a particular discipline and liquidity plus macro-economic conditions. or geography, reduce the number of interviews companies As candidates become scarcer, not to lose preferred and shorten the decision making process in order candidates. Often highly discipline/geography-specific, especially at midpoints in the cycle cycle especially in the at midpoints Often highly discipline/geography-specific, as This is a key driver of most other elements, confidence grows. as client demonstrated through their ability to the quality of a recruiter is most clearly source difficult-to-find candidates. Comment

Candidate confidence Fees/rates inflation Wage to hire Time Candidate shortages Impact

Gross Profit and Productivity and Profit Gross Market Liquidity Market

diversifying the service offering. At the diversifying the service offering. as permanent recruitment, further as permanent recruitment, Growth was in temporary as well Growth Group’s strategy of global diversification. Group’s countries, emphasises further the our market share in already established in already our market share office in Thailand, along with increasing office in Thailand, along with increasing specialisms. The opening of the new with the continued introduction of new with the continued introduction its market presence in core target areas target areas in core its market presence 2016. The business continued to grow 2016. The business continued to grow against its three strategic objectives in against its three PageGroup made good progress made good progress PageGroup Our 2016 achievements conversion margins. conditions will see drivers in both elements rapidly align, and this has a dramatic impact on PageGroup’s overall performance and has a dramatic impact on PageGroup’s in both elements rapidly align, and this conditions will see drivers those which influence gross profit and consultant productivity. It is the nature of the professional recruitment market that strong market strong recruitment market that professional of the It is the nature productivity. consultant and profit gross those which influence drivers which can materially impact PageGroup’s financial performance. These are split into elements which affect market liquidity and market split into elements which affect These are financial performance. impact PageGroup’s drivers which can materially As well as the influence of the general macro-economic environment on business activity, there are a number of specific market-based a are there activity, on business environment of the general macro-economic As well as the influence Market drivers of PageGroup performance drivers of PageGroup Market Strategic Review

How we categorise the markets In 2013, PageGroup categorised each of its markets around the globe based on criteria such as the potential for future growth. This growth potential was assessed on a combination of expectations for economic growth, Large, size of the existing PageGroup operations relative to the market, and competitive landscape. High Potential The outcome was three categories (as set out in the table to the right), into which the 36 geographical markets in which we operate were placed. Five markets were identified as Large, High Potential markets. These Substantial, high potential markets include the large economies of the US, Germany for recruitment. Typically under- and Greater China, together with the regions of Latin America and South East Asia. Typically under-developed developed, but where PageGroup from a recruitment perspective, each satisfied key has a successful track record, and criteria, including: confidence in its ability to successfully • Positive PageGroup track record; scale operations. CATEGORISATION • Ability to adapt PageGroup culture to local culture; • Ability to hire and retain local consultants; • Ability to roll-out disciplines and open offices; Germany, Greater China, Latin • Attractive conversion rate potential; and America, South East Asia and • Large-scale economies. the US. Six historically successful geographies were categorised EXAMPLES as Large, Proven, reflecting the fact that PageGroup had, within the last economic cycle, operated substantial businesses in each. While currently below Sustained investment through peak levels, they have a proven track record, and, as cycle – adding headcount/offices/ a group, the potential to return to historic high levels – disciplines. albeit with a different mix of headcount and disciplines. APPROACH Finally, the remaining businesses were categorised as INVESTMENT Small and Medium, High Margin. This reflects the fact that each individually will not have the scale or potential Create a market leading network of to be a significant contributor to gross profit. However, offices, management and headcount. they each offer the prospect of attractive margins and include countries with some of the highest fee rates and c. 40% of Group gross profit/fee conversion margins in the Group. Within this category VISION earners; 30% conversion rates. are three markets – Japan, India and Africa – that all STRATEGIC have the long-term potential to achieve Large, High Potential status. Gross profit flat for the year, strong growth in LatAm ex. Brazil of 19%. Investment approach

2016 Conditions difficult in Brazil and within New York Financial Services. Investment in the business has been focused on RESULTS developing the long-term sustainability of the business and is supported by significant balance sheet strength and cash flow generation. The market categorisation provides an investment framework for the business. Continue investment in new Investment comes in a range of forms including headcount and management team, 2017 headcount, new offices and infrastructure, marketing PLAN whilst improving conversion rates. spend and minimum levels of market presence through the economic cycle.

11 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 12 2016 2017 PLAN VISION RESULTS EXAMPLES STRATEGIC STRATEGIC APPROACH INVESTMENT CATEGORISATION Annual Report 2016 PageGroup

Investment responsive to market Expected to represent conditions. c.15% of Group gross profit/fee earners; 30% conversion rates. Gross profit records in 11 countries, improving profitability. Continued focus on growth and improving our conversion rates. Have been, or could be, significant or could be, Have been, profit contributors for PageGroup, but not likely to be in excess of 300 fee earners. Africa, East, Middle Japan, and other Turkey Canada, India, European countries. Small and Medium, Medium, Small and High Margin Respond to market conditions, focus Respond to market conditions, on high margin opportunities.

Gross profit growth of 4%, tough Gross profit growth of 4%, trading conditions in the UK. growthwas 11%. Excluding this, Continue to drive future growth as well as through existing capacity, improving conversion rates. Collectively return to 2007 peak levels of operating profit and conversion 45% of Group rates; equivalent to c. gross profit/fee earners. and Spain. Large markets in which PageGroup is already proven with a strong track record and a significant presence. Australia, France, UK, Italy the Netherlands, Investment reflects gross profit growth and market conditions. Large, Large, Proven Latin America and the UK in the Brexit landscape

13 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 14 Annual Report 2016 PageGroup We can still point to a number of can still point to We Our Legal andbright spots in 2016. both saw gross disciplines Technology of 10% in 2016, with our growth profit & Supply Chain sector Procurement up 5%. With at the lower recruitment less impactedsalary end of the market our Page Brexit, by the slowdown from which represent Personnel business, Logistics 2%. Our 22% of the UK, grew operationbusiness and our Scotland also experienced success. an extremely Above all, the UK remains with market for PageGroup, profitable for 2016 of £24.2m. operating profit Our flexible model and ability to scale up and down quickly means we have By way of natural control. cost strong less attrition, particularly of newer, experienced consultants and non or delayed replacement of leavers, we were of leavers, we were delayed replacement able to lower our fee earner headcount have or by 8%. We by 85 in the year, by 20, our support staff also reduced number of initiatives, such as a through our new Scotland-based centralised CV have currently We Centre. Processing over 1,000 fee earners in the UK, in 27 13 disciplines. cities and working across into 2017, whilst Going forward the market sentiment, caution remains has identified a number of PageGroup and we remain opportunities to grow, respond confident that we can, as ever, rapidly to any changes in market conditions. in this sector. Our business in Brazil is Our in this sector. ready to take efficient, leaner and more theadvantage of every opportunity market provides. of the2017 will see an acceleration Service Shared implementation of our plan in Argentina and we will Centre new disciplines andfurther investment in Interim in Perusectors, such as Page Page Personneland expansion of our brand in Argentina. The UK in the Brexit The UK in the Brexit landscape For the UK, 2016 was a year dominated June The UK entered by uncertainty. on the back of a five months’ cautious trading which saw a cumulative year- profit on-year contraction in gross of 9.6% to growth of 1% (compared for 2015 as a whole). The impending was clearly an important Referendum commented at the time that We factor. whilst activity levels had largely held was a slowdown in the final up, there as clients and decision making process, cautious in candidates became more and accepting jobs. both offering of the Referendum, Following the result we saw activity levels fall, initially by in some sectors and 10% around particularly in Financial Services, then For the year as slightly. recovering profit a whole, the UK saw its gross contract by 3.5%. Uncertainty remained with trading relationship as to our future the EU and in consequence, confidence particularly low, levels have remained amongst our multi-national clients. Business confidence was, however, higher with our SME clients, who are generally less exposed to global trade or financial markets. PageGroup’s Although the UK remains biggest single market, representing in Q4 profit gross 21% of the Group’s 2016, our geographic and discipline diversification strategy of the past few no longer years has meant that we are as dependent on the UK or on Financial 5% of the Services, which represented This is a much Profit. 2016 Gross UK’s dependency than in the past. reduced 10 years ago, for example, in 2006, the of PageGroup 45% UK represented and within the UK, Financial Services profit. accounted for 11% of gross

Temp market and we have invested Temp have been encouraging signs in Brazil’s have been encouraging signs in Brazil’s office and discipline structure. There There office and discipline structure. headcount of c. 130 and retained our headcount of c. 130 and retained we ended the year with a fee earner extremely challenging year, down 21%, challenging year, extremely Whilst Brazil has experienced an since 2010. a compound annual growth rate of 22% a compound annual growth generating £2m of gross profit in 2016, profit generating £2m of gross Executive division in all six countries, We also operate our high end Page We country operates in 10 disciplines. from 31 in 2010. On average, each from disciplines across Latin America, up disciplines across Overall, we now operate in 59 country Technology in both Colombia and Peru. Technology Sales in Mexico, Legal in Argentina and operate, with recent additions including operate, with recent disciplines and specialisms in which we we have also expanded the number of As well as expanding geographically, As well as expanding geographically, headcount exceeded that of Brazil. first time, in 2016, Mexico’s fee earner first time, in 2016, Mexico’s annual growth rate of 24%. For the annual growth 80 to just under 300, a compound Brazil) grew over the same period from over the same period from Brazil) grew 35%. Fee earner headcount (excluding a compound annual growth rate of over a compound annual growth in 2016. In constant currencies, this is in 2016. In constant currencies, Group, a figure which reached £24.1mreached which figure a Group, generated £5.7m gross profit for the profit generated £5.7m gross In 2010, Latin America excluding Brazil no sign of any slowdown. Argentina, Chile and Colombia there is Argentina, Chile and Colombia there any indication of this yet, whilst for Peru, impact on Mexico, but we have not seen record years. The US election result may years. The US election result record along with Mexico and Colombia, had gross profit in 2016. Both countries, profit gross growth. Peru more than doubled its more Peru growth. run of 12 consecutive quarters of +30% of 49% and has delivered a remarkable a remarkable of 49% and has delivered of 19% in 2016. Argentina had growth of 19% in 2016. Argentina had growth recent years, with gross profit growth growth profit with gross years, recent remarkable growth for PageGroup in for PageGroup growth remarkable Excluding Brazil, Latin America has seen operations in 2014. and our sixth country, Peru, commenced Peru, and our sixth country, Chile in 2010. Colombia opened in 2012Chile in 2010. Colombia following in 2006, Argentina in 2007 andfollowing in 2006, Argentina continent in Brazil in 2000, with Mexicocontinent in Brazil in We opened our first office in the opened our first office in We conditions in Brazil. notwithstanding the challenging marketnotwithstanding the challenging recent years has been a success story, story, years has been a success recent For PageGroup, Latin America in Latin America For PageGroup, Latin America Key Performance Indicators

We measure our progress against our strategic objectives using the following key performance indicators:

How measured: Gross profit growth represents revenue less cost of sales expressed as the Gross profit growth (%)* percentage change over the prior year. It consists principally of placement fees for permanent candidates and margin earned on the placement of temporary candidates. 2016 3.0 Why it’s important: This metric indicates the degree of revenue growth in the business. 2015 4.4 It can be impacted significantly by foreign exchange movements in our international markets. 2014 3.7 Consequently, we look at both reported and constant currency metrics. 2013 -2.5 How we performed in 2016: Gross profit increased 11.7% in reported rates, 3.0% in constant 20112012 -4.9 currencies, as favourable currency movements benefited the full year figures. Relevant strategic objective: Organic growth. * Increase in gross profit in constant currency over the prior year

Gross profit How measured: Total gross profit from a) geographic regions outside the UK; and b) disciplines outside of Accounting and Financial Services, each expressed as a percentage of total gross diversification (%) profit. Why it’s important: These percentages give an indication of how the business has diversified its 76.4% 61.6% revenue streams away from its historic concentrations in the UK and from the Accounting and Financial Services discipline. Ex- How we performed in 2016: Geographies: the percentage increased to 76.4% from 72.7% in Ex-UK Accounting and Financial 2015, demonstrating a high degree of diversification. This also reflected strong trading conditions Services in Continental Europe, along with the weakness of Sterling. Disciplines: The percentage increased slightly to 61.6% (2015: 60.4%), as our professional 2012 2013 2014 2015 2016 disciplines of Legal, HR, IT and Secretarial performed strongly combined with good growth in our Technical disciplines comprising Property & Construction, Procurement & Supply Chain and Ex-UK 77.0 75.9 74.0 72.7 76.4 Engineering. Ex-Finance 58.1 58.8 60.3 60.4 61.6 Relevant strategic objective: Diversification.

FINANCIAL How measured: Profit for the year attributable to the Group’s equity shareholders, divided by the Basic earnings per share (p) weighted average number of shares in issue during the year, and compared to the prior year. Why it’s important: This measures the underlying profitability of the Group and the progress made against the prior year. 2016 23.1 How we performed in 2016: The Group saw an 8.5% rise in Basic EPS to 23.1p. Improvements 2015 21.3 in trading and favourable foreign exchange movements drove strong growth in the Group’s EPS 2014 18.4 in 2016. 2013 15.1 Relevant strategic objective: Sustainable growth. 2012 13.6

Net cash (£m) How measured: Cash and short-term deposits less bank overdrafts and loans. Why it’s important: The level of net cash reflects our cash generation and conversion capabilities 2016 92.8 and our success in managing our working capital. It determines our ability to reinvest in the business, to return cash to shareholders and ensure we remain financially robust through cycles. 2015 95.0 How we performed in 2016: Net cash remained broadly flat at £92.8m (2015: £95m). This was 2014 90.0 after dividend payments of £56.3m (including a special dividend of £20m), and the purchase of 2013 85.4 shares by the Employee Benefit Trust of £15.1m. 2012 61.4 Relevant strategic objective: Sustainable growth.

Ratio of permanent vs How measured: Gross profit from each type of placement expressed as a percentage of total temporary placements gross profit. Why it’s important: This ratio reflects both the current stage of the economic cycle and our geographic spread, as a number of countries culturally have minimal temporary placements. Gross profit 2012 2013 2014 2015 2016 It gives a guide as to the operational gearing potential in the business, which is significantly Permanent 78 76 76 76 76 greater for permanent recruitment. Temporary 22 24 24 24 24 How we performed in 2016: The ratio was flat at 76%, with strong growth in temporary placements in our more mature markets matched by permanent fee growth at lower salary levels in both mature and less developed markets. Relevant strategic objective: Diversification.

15 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 16

Annual Report 2016 PageGroup Sustainable growth. growth. Organic Sustainable growth. Sustainable growth. Talent and Skills development. Talent In reported rates, this increased to £135.2k from £126.8k. to £135.2k from rates, this increased In reported The ratio was maintained at the record 77:23, in line with The ratio was maintained at the record slightly to 16.3% increased conversion rate The Group’s The average tenure of the Group’s management increased from from management increased of the Group’s The average tenure This reflects the operational efficiency in the business in terms of our This reflects the level of fee earner and the Group’s productivity This reflects Our indicator of productivity; affected by levels of activity in the market,the in activity of levels by affected productivity; of indicator Our

A positive working environment and motivated team helps productivity and motivated team helps productivity A positive working environment both geographies and the economic cycle and across Experience through Gross profit divided by the average number of fee-generating staff, of fee-generating staff, divided by the average number profit Gross at to operational support staff of fee earners compared The percentage Number of fee earners and directors involved in revenue-generating involved in revenue-generating fee earnersNumber of and directors Average tenure of front-office management measured as years of service for management measured of front-office tenure Average A key output of the employee surveys undertaken periodically within

How measured: capacity within the business and the number of recently hired fee earners not yet hired who are of recently capacity within the business and the number can also impact this figure. movements Currency at full productivity. How we performed in 2016: However, in constant currency, it fell slightly to £124.8k as a result of the investment in fee it fell slightly to £124.8k as a result in constant currency, However, markets. earners and challenging conditions in some of our larger Relevant strategic objective: activities at the year end, expressed as the percentage change compared to the prior year. change compared as the percentage expressed activities at the year end, in fee earnersand a guide to our confidence in the business important: Growth is Why it’s demand above expectations as to the level of future outlook, as it reflects macro-economic the business. the existing capacity within in resulting at 5.1% in the year, 2016: Fee earnerHow we performed in grew headcount for the Group. a record 4,711 fee earners at the end of the year, Relevant strategic objective: How measured: average basis. monthly calculated on a rolling important: Why it’s How measured: as a ratio. expressed the year-end, important: Why it’s as a exceptional items expressed (EBIT) before Operating profit How measured: profit. of gross percentage important: Why it’s ability to grow the revenue-generating platform at a faster rate than the staff needed to than the staff platform at a faster rate the revenue-generating ability to grow support this growth. How we performed in 2016: achieved in the business that enabled2015. This was facilitated by operational efficiencies The ratio of joiners in the year was 86:14. 5.1% fee earner headcount growth. Relevant strategic objective: of investment being in the business, together with the degree at cost control effectiveness growth. made for future How we performed in 2016: conditions in a number of markets, (2015: 16.2%) with a combination of steadily improving individual larger challenging conditions in some of the Group’s in part by more offset markets, such as the UK and Brazil. Relevant strategic objective: the business. important: Why it’s disciplines is critical for a cyclical business operating across the globe. Our organic business the globe. Our organic disciplines is critical for a cyclical business operating across and senior resourcing on an experienced management pool to enable flexibility in model relies management succession planning. How we performed in 2016: in the Americas. 11.2 years to 11.6 years, with a particular increase Relevant strategic objective: and encourages retention of key talent within the business. and encourages retention for employee engagement in an 81% positive score recorded How we performed in 2016: We the latest Employee Survey in 2015 (2014: 75%). This was a combination of questions, including: and the level of trust to work for PageGroup; they were how valued our people felt; how proud for their work. No survey was performed in 2016 and the next they received and recognition one is planned for 2017, as we participated in a number of local employee satisfaction surveys ranked 77th. we were where including the Sunday Times best 100 Companies to work for, Relevant strategic objective: Sustainable growth. How measured: and above. directors important: Why it’s How measured: 77 23 2016 16.2 16.3 77 23 2015 11.6 years 140.4 11.2 years 11.1 years 139.2 135.2 77 23 10.8 years 14.7 10.5 years 130.3 2014

13.3 126.8 124.8 74 26 2013 12.4 12.3

71 29 5.1 5.1 2012 4.8 81% score Positive Positive -4.6 engagement

2013 2012 2014 2015 2016 2013 2012 2015 2013 2012 2014 2015 2013 2012 2015 2016 2016 2014 2016 2014

Fee earner n Fee n Support Fee earner:operationalFee support staff ratio fee earner (£’000) Gross profit per headcount growth (%) headcount growth Fee earnerFee Management experience Employee index Conversion rate (%)

PEOPLE STRATEGIC Key Performance Indicators

How measured: Direct and Indirect GHG emissions calculated in line with the UK Total GHG emissions Government’s 2016 DEFRA reporting standards. Principally based on data from a sample of our offices, covering 65% of the Group by headcount, and extrapolated for the Group Total energy-derived emissions as a whole. (CO2e tonnes) Source of emissions 2015 2016 Why it’s important: The emissions calculations look at the CO2e impact of our operations in Direct GHG emissions 1,705 1,662 absolute terms. Indirect GHG emissions 4,981 4,703 How we performed in 2016: Direct GHG emissions relating to the combustion of fuel

decreased by 2.5% to 1,662 tonnes CO2e, while Indirect GHG emissions, through the purchase of energy such as electricity, decreased by 5.6% to 4,703 tonnes. Relevant strategic objective: Sustainable growth.

How measured: Intensity values for GHG emissions are based on property and vehicle energy- Intensity values of derived emissions per 1,000 headcount. Headcount is viewed as being the most representative metric for PageGroup’s activity levels and is unaffected by issues such as business mix or

GHG EMISSIONS GHG emissions foreign exchange variations. CO e tonnes per 1,000 employees 2 2015 2016 Why it’s important: Intensity values help to normalise the GHG metrics and place them in Energy-derived emissions 1,209 1,052 the context of the Group’s changing business profile, particularly in terms of increases in headcount. It helps to identify where progress has been made on emission reduction. How we performed in 2016: Energy-derived emissions were reduced by 13.0% compared with 2015, largely due to relocations to more energy efficient offices, changes in fuel sources, and an increase in headcount without a corresponding increase in the number of offices. Relevant strategic objective: Sustainable growth.

2015 Direct and Indirect GHG emissions were originally reported as 1,527 and 4,935 respectively. These have been restated to reflect the change in the use of IEA conversion factors for non-UK countries in 2016. The 2015 Intensity value of energy-derived emissions has been restated from 1,118 to 1,209 on the same basis. The source of data and calculation methods year-on-year are on a consistent basis. The movements in KPIs are in line with expectations.

Greenhouse Gas Emissions (“GHG”) Emissions have been calculated in line with the 2016 DEFRA reporting standards, In line with the requirements of the Companies Act 2006 (Strategic Report and Directors’ and calculated using 2016 DEFRA Report Regulations), PageGroup reports on all direct greenhouse gas (GHG) emissions conversion factors for fuels, gases and UK (relating to the combustion of fuel and the operation of any facility, together with any fugitive electricity, and International Energy Agency emissions); and indirect GHG emissions (through the purchase of electricity, heat, steam conversion factors for non-UK electricity or cooling). generation. Since 2014, we have gathered energy data from our major offices. This is in conjunction with The intensity values are based on our environmental policy that focuses on implementing efficiency measures in our offices to emissions derived from property energy reduce energy consumption and carbon emissions. As a result, we enhanced the quality of and vehicle fuel per 1,000 headcount. our 2013 and 2014 data collation, and the data collation process has continued since 2015. This factor was chosen as being most The Group’s total 2016 emissions from energy and fuel used in its properties and vehicles, representative of the Group’s activity together with comparable data for the previous three years, are reported below. levels, and being unaffected by issues such as business mix or foreign exchange

Total energy derived emissions (tonnes CO2e) properties and vehicles variations. 2016 emissions improved by Source of emissions 2013 2014 2015 2016 18.8% compared with 2015. Direct GHG emissions (relating to the combustion of fuel and the operation of any facility) 1,745 1,647 1,705 1,662 Energy derived emissions – CO2e tonnes Indirect GHG emissions (through the purchase of electricity, heat, steam or cooling) 4,099 4,898 4,981 4,703 per 1,000 employees Total emissions 5,844 6,545 6,686 6,365 2013 2014 2015 2016 1,152 1,189 1,209 1,052 Emissions derived from property energy consumption directly under the Group’s control have The reduction in 2016 is largely attributable been calculated by using a sample of offices across the world (including those for the entire to improvement in the property energy UK business). These offices represent 65% of the global headcount in 2016. The emissions derived emissions (emissions deriving from for the remaining offices were calculated by extrapolating headcount. Emissions from fuel property energy consumption amounted consumed by Group owned or leased vehicles were calculated using the fuel consumed to nearly 80% of total emissions). This by the German based car fleet. This represents around 15% of the Group’s global car fleet is due to factors such as relocation to of just under 1,100 vehicles. The emissions for vehicles in other countries were calculated more energy efficient offices, as was the by first extrapolating the Germany’s fuel consumption per vehicle and then calculating the case with our relocation in New York City, resulting emissions. There were no fugitive emissions related to refrigerants topped up as change of fuel sources, as was the case part of air conditioning maintenance. in France, and increasing the numbers of employees without increasing the numbers of office locations.

17 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 18 Annual Report 2016 PageGroup What are the progression What are the progression As an organically grown business, As an organically grown How is PageGroup How is PageGroup invest a significant amount of We

exposure in the business to any one in the business exposure of ourmarket, with the development as well asPage Personnel business diversification.discipline and geographic far less dependent This means we are than we haveon Financial Services there is plenty of opportunity to is plenty there rapidly within PageGroup, progress to the senior leadership consultant from team, and we have many examples of The management the Group. this across team, and myself as CEO, started as consultants, demonstrating the opportunities significant progression also enjoy the We that we can offer. performance culture. This is also true of every member of the senior operational management in externally. brought team; none were we have facilitate this progression, To a clearly defined talent development supporting the training roadmap, development of all our staff professional at every stage of their career. developing its consultants to become senior leaders of the future? resource to succession planning, talent to succession resource a offer We development and retention. package, we competitive remuneration run executive coaching schemes, internal and external 360 mentor programmes, feedback assessments, Personal degree Development Plan development and Academy in which a Global Directors we partner with an external leadership This investment development company. is designed so that we can develop our consultants into the leaders of current an international also have We tomorrow. we have where mobility programme our business with confidence grown moving some of our most through talented employees to new locations for the most beneficial impact. Q. A. historically been, this now onlyhistorically been, this 7% of the Group. representing Q. A. opportunities at PageGroup? opportunities at What do you consider the It is clear that there are a number of are It is clear that there We continue to operate a policy of continue to operate a policy We You’ve paid special paid special You’ve

macro-economic challenges in a number macro-economic of our larger markets and the current to be unpredictable cycle is proving in 2016 we In particular, in nature. experienced tough trading conditions in a number of our markets such as New Financial Services, the UK, Greater York have very limited China and Brazil. We visibility on the economic outlook, but we will continue to focus on driving profitable 2016. as we have throughout growth, I am confident that we have the best management team in place to guide the economic current the through Group the have reduced We uncertainty. financing the activities and developmentfinancing the activities earnings our retained from of the Group consistentlyand to operate while balance sheet maintaining a strong to first use our cash position. We satisfy our operational and investment and to hedge our liabilities requirements, plans. We share under the Group’s our liquidity over and above then review to make returns to this requirement firstly by way of ordinary shareholders, dividend. this ordinary Our policy is to grow dividend over the course of the economic cycle, in line with our long- rate; we believe this enables term growth us to sustain the level of ordinary dividend payments during a downturn, it during more as well as increasing times. prosperous Cash generated in excess of these returned first two priorities will be to supplementary through shareholders using special dividends or share returns, buybacks. In 2016, after consultation we made a with our shareholders, of 6.46p persupplementary return will continue to monitor our We share. toliquidity in 2017 and will make returns policy. above the with line in shareholders dividends over the last two you anticipate that Do years. 2017? continuing into A. Q. A. Q. outlook to be for 2017 and what do you consider to be your biggest challenge?

How do you maximise How do Technology delivers speed and delivers Technology

and desires. than any publicly available data ever style; image skills; personality; culture; back into that process, which is crucial back into that process, in such a candidate driven market. our candidates about know more We will: their motivations; requirements; putting the human initiative and contact candidate. Our skill at PageGroup is candidate. Our skill at PageGroup everyone has equal access to every LinkedIn, has driven a perception that LinkedIn, has driven a perception including CV boards and networks like including CV boards and affinity for our brands. Technology, Technology, and affinity for our brands. well as an opportunity to build awareness well as an opportunity to build awareness us to acquire candidates and clients, as us to acquire LinkedIn is another significant channel for remuneration and improved skills. and improved remuneration the consultants through increased increased the consultants through benefits us as a Group but also benefits benefits us as a Group of their calls to ensure success. This of their calls to ensure clearly needs training around the content clearly needs training around but not generating enough new jobs, a number of business development calls area. For example, a consultant making area. us to deploy training to the most relevant us to deploy training to the most relevant quickly into great recruiters. It also allows recruiters. quickly into great to-day basis and to develop them more to-day basis and to develop them more consultants more effectively on a day- effectively consultants more This real time data allows us to manage time This real relevant task.relevant to ensure they are focusing on the most they are to ensure can be tailored to each consultant daily, to each consultant daily, can be tailored performance amongst the team. These dashboard, so they can actively manage dashboard, KPIs which appear on each manager’s KPIs which appear on each manager’s measurement, with access to visual measurement, Technology also gives better performance Technology resulting in an increase in productivity. in productivity. an increase in resulting focused on streamlining processes, processes, focused on streamlining candidates and clients with a system maximises their exposure talking to maximises their exposure boards, or compliance. In turn, or boards, this searching, loading vacancies on job searching, on administration, whether that be It minimises the time consultants spend clients’ requirements. on understanding and delivering the our consultants to focus their time By using technology efficiently, it allows By using technology efficiently, tools to drive sales on an ongoing basis.tools to drive sales on acquisition and gives management theacquisition and gives their productivity. It drives candidate their productivity. efficiency for our teams, boostingefficiency for our teams, A. Q. Q&A with Steve Ingham, CEO Ingham, Steve with Q&A your business? your business? media and LinkedIn have on media and LinkedIn and what impact does social and what impact technology in your business Corporate Social Responsibility

Corporate social responsibility is not just an item on our to-do list. At PageGroup it’s an inherent part of our culture and our business.

We are proud to continue our commitments to our stakeholders, to:

Our people Our candidates The communities Society at large Our clients in which Our suppliers we operate Our shareholders

Workplace Marketplace Governance Community Environment

Make PageGroup a great Ensure we have the highest Contribute positively to the Minimise and mitigate our place to work ethical standards communities in which we environmental footprint operate Value our people Maintain the highest Provide responsible, standards of corporate global citizenship governance

sionate ab Pas out your progress It is in our DNA to focus on people, modules, the ability to request and track constantly looking for ways to improve – training, and self-help materials. n fu N e e v and that begins with our employees. d e a r Rewards and health made fun m g h i v lt e a Passionate about progress

e u h Other initiatives introduced during the year p

d l n e

a a Our organic business model promotes include our performance management

r

s

n

d

i r

n from within, based on merit – the majority toolbox which drives an improved,

a g w

e of our Executive Board are proud to consistent way of managing and R have started their life at PageGroup as rewarding the talent within our business;

A t consultants, including CEO Steve Ingham. the introduction of flexible benefits; and e a e m iv k g c Our team-based culture and reward initiatives to introduce new ways of working t a h to b a g t’s ud in system drives collaborative behaviours more flexibly. di Pro th ver e se som which give the best possible outcome for Many of the initiatives helping to refine both clients and candidates. our Employee Value Proposition (EVP) Career development is transparent and have come from employee feedback. We Our People meritocratic, and includes opportunities to constantly listen to our people in a variety PageGroup is all about make international moves. During 2016, of ways, including one to one discussions, people. The people we made over 1,400 promotions and saw team and department meetings, consultant who work here, the nearly 100 international moves. forums, and our global ‘Have Your Say’ engagement survey. Our last survey saw a companies we do business with, the Never give up learning candidates whose lives we change global participation rate of 77% with 81% for the better on a daily basis, and the In 2016, we enhanced our already positive engagement – excellent results for communities and individuals we help as we industry-renowned training and a new survey in a global business such as give back to others. development framework by starting the ours. Our next survey takes place in the roll-out of a new learning management second half of 2017. system which includes online learning

19 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 20 “

“ without exception Acceptance Annual Report 2016 PageGroup It’s been a very positive It’s development/retention initiative The ability to talk honestly about frustrations and areas difficulties, role of concern within one’s “ Celebrated LGBT Pride sharing month in June, real life stories and promoting acceptance without exception “ High maternity return rates – 100% in some key countries including Austria, Portugal Poland, America, North Germany, and Spain Global internal mentoring programme UK Over 200 taking part in the – France, UK, Singapore, Singapore, UK, days – France, Family Brazil Japan, Parenting seminars Parenting – Time to Change Pledge Time Global Campaign International Women’s International Women’s Day e

g a Working Forward pledge to Working P @ y t i l i Signed the Stonewall global diversity champion since 2015 equality index – Work support pregnant women and new mums Ability@Page July 2016 Launched Ability@Page Mental health champions appointed First recruitment company to sign the Pre and post maternity coaching programmes Signed up to the Think Act Report campaign b A % 52 21 29 53 19 38 2 3 66 70 3,022 3,232

% 48 79 71 47 81 62 5 5 247 293 2,813 2,867

Total employees Total Senior Management At 31 December 2015 Board Directors Total employees Total Senior Management At 31 December 2016 Board Directors Gender diversity incidents in 2016. of this Report. We had no reportable had no reportable of this Report. We 52 in the Corporate Governance section the Audit Committee Report on page wrong-doing. For more information see For more wrong-doing. anonymously report any perceived any perceived anonymously report facility for our employees to easily and an independently hosted whistleblowing and honest communication, we have to our people and encouraging open In line with our commitment to listening business. the positive impact they have on our works at a local level, and to celebrate globalising our initiatives in a way that memberships. Our aim is to continue encompasses a broad range of encompasses a broad internal communication channels and to inclusivity and diversity. It to inclusivity and diversity. activities, active networks using our OpenPage underpins our commitment equally diverse clients and candidates. equally diverse clients and candidates. the best possible understanding of our retain them for longer, and we will have for longer, them retain continue to attract good people andcontinue to attract good and good for our organisation. We will We and good for our organisation. best of their ability. That’s good for them That’s best of their ability. feel comfortable and perform to thefeel comfortable and their true selves to work so that theytheir true selves to work want our people to be able to bringwant our people to be wouldn’t otherwise be possible. We We otherwise be possible. wouldn’t solving capability and sustainability thatsolving capability and business, generating creativity, problem- creativity, business, generating perspectives and insight to ourperspectives and insight A diverse team brings different different A diverse team brings A team that’s diverse A team that’s Corporate Social Responsibility

The communities in which we operate

Giving back to others is part of our culture. We live and work in the communities we serve, and we encourage our people to be proactive in their charitable support of those communities. All areas of the organisation are involved, from the CEO running in fund-raising triathlons and serving on the Board Monaco No Finish Line helping of Great Ormond Street Hospital, to disadvantaged and sick children holding recruitment advice workshops for Germany donating work clothing immigrants in Australia, carrying out suit drives helping unemployed people back to work in Germany, and visiting schools to provide CV, career and interviewing advice in the UK. We encourage our people to take a volunteer day annually when they can use their time to support good causes. Often those efforts are co-ordinated so that whole teams are contributing. In the UK, PageGroup also promotes a payroll-based donation scheme which the Company then matches. China – become reading partners to children with leukaemia and donate We share and celebrate our activities money to purchase new story books through our internal communication channels, fostering creativity and sharing New Zealand Ronald McDonald ideas across all our regions. Charities – wrapped presents for and spent time with patients and families

PageTalent Schools programme

Singapore Yellow Ribbon Project

UK Fundraising event for Teenage Cancer Trust

Over 2,500 students interviewed

Malaysia Sanctuary Care Centre – High New York LLS Light the Night event Tea for Underprivileged Children

21 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 22

Annual Report 2016 PageGroup Grand Winner Agency 2016 Grand Winner Agency Putting in place Skype forPutting in place Skype our use of Business, increasing to and helping video conferencing travel; minimise air and car as criteria Making environmental decisiona key consideration in new offices,making when leasing seeking energy efficient premises provide able to are landlords where us with supporting data. For example, during 2016 we relocated Chrysler building in New the from efficient building to a more York remote with a fit-out including lighting and low energy controlled air conditioning equipment; and legacy print and In the UK, replacing copy devices with new machines energy efficient, utilising which are and default double- release secure sided functions. This has resulted in CO2 emissions in 50% reduction in the use and over 60% reduction of paper. Top Employer Europe Top Excellent Employer award Belgium | France | Germany | Spain Switzerland

gas emissions. See page 17 for GHG See page 17 for gas emissions. for 2016. reporting mitigate continue to look at ways to We during the lastour impact, and activities year included: • • • Asia Recruitment ICT Recruiter of the year 2016 (Netherlands)

Society at large As a service based organisation, our impact environmental International Recruiter of the year (Australasia) Proud to be Clear Assured Status the opportunity to meet our regional to meet our regional the opportunity leadership teams. is indirect (predominantly energy (predominantly is indirect consumption and business travel) but we seriously and our take our responsibilities CEO is the sponsor of our environmental in place to have processes We policy. house on our green monitor and report Highest standards of corporate Highest standards governance standards we believe high At PageGroup of governance underpin sustainable is collectively performance. The Board financial for the Group’s responsible as well asand operational performance business. the success of the promoting responsibilities by fulfils its The Board and supervising the Company’s directing strategy and policies. The Corporate Governance section sets out details of the of this report and activities undertaken by the Board its Standing Committees during 2016. Best & Brightest Companies to work for in the Nation – 2016 winner (USA) Attained for Global Mobility of the Year Year Highly commended for Global Mobility of the (Small Program) and Best Redesign of Global Mobility Strategy Candidates Candidates suppliers clients shareholders

Shortlisted for Head of Diversity – European Diversity Awards Stonewall Global Diversity Champion Highly commended for Global Diversity – 2016 ENEI Awards

Public recognition during the year included: year included: Public recognition during the Highest ethical standards Highest ethical standards investor relations events which give investor relations and will continue to hold our successful and engagement with our shareholders, and engagement with our shareholders, We constantly review communication review constantly We commitment to that work continues. our modern slavery policy, and our our modern slavery policy, we started the process of formalising we started the process our procurement activities. During 2016 our procurement of conduct is now an integral part of all from our suppliers and our supplier code our from We expect the same high standards the same high standards expect We core of all our dealings with them. our dealings with them. of all core Confidentiality and sensitivity are at the Confidentiality and sensitivity are to both our clients and our candidates. to both our clients and our candidates. constantly aware of our responsibilities of our responsibilities constantly aware In our daily operations, we are In our daily operations, we are improve. improve. position by actively seeking ways toposition by actively seeking integrity. We continue to reinforce that continue to reinforce We integrity. with strong brands and a reputation for brands and a reputation with strong PageGroup is a leading global recruiter, is a leading global recruiter, PageGroup Regional Perspectives

How did you deliver Gross profit £m EMEA 2016 £271.9m against your 2016 2015 £217.0m What are your priorities? 2014 £212.0m We delivered another strong performance 2013 £207.8m priorities for 2017? in 2016, with overall growth of 11.5% and We will continue to drive growth throughout 12 countries delivering record years. We Permanent to temporary ratio the region if the trading conditions we saw continue to focus on our conversion rate, in 2016 continue in 2017. We will focus and despite the costs of transitioning 29% on driving productivity improvements from to our new European Shared Service PRS, our new operating system, as well Centre, we improved our conversion rate to 19%. We saw good growth in our as investing in our fee earner headcount 71% where we see opportunities for growth. largest countries of France and Germany, up 6% and 9% respectively. % 2016 2015 We remain mindful of possible political uncertainty that may occur throughout We completed the transition of our Permanent 71 72 2017, though with our flexible business European Finance functions to our new Temporary 29 28 model, remain able to react quickly to any Shared Service Centre in Barcelona, with changes in market conditions. Marketing also fully transitioned. IT is now Headcount two-thirds complete and will continue in line with our strategy to move to the Cloud. 2016 2,553 2015 2,295 2014 2,113 2013 1,886

UK How did you deliver Gross profit £m 2016 £146.3m against your 2016 2015 £151.6m What are your priorities? 2014 £138.4m priorities for 2017? Due to uncertainty in the lead up to, 2013 £124.1m and post the result of the Referendum, We anticipate that candidate and client we experienced decreased client and Permanent to temporary ratio confidence levels will remain subdued candidate confidence levels as 2016 in 2017 due to the ongoing political progressed. As a result, we saw an overall 30% uncertainty. We will continue to manage reduction in our gross profit of 3.5%. our fee earner headcount accordingly in Confidence was impacted most in our response to market conditions. Michael Page business, which was down Despite this, we will seek to maximise the 5%, whereas our Page Personnel business 70% was more resilient, up 2%. We did see growth opportunities that arise, through % 2016 2015 investment in the disciplines in which we strong performances from our Legal and Permanent 70 71 see opportunities for growth. Technology disciplines, both up 10%. We managed our headcount to reflect the Temporary 30 29 more challenging trading conditions, and ended the year down 85 fee earners. Headcount 2016 1,411 2015 1,516 2014 1,441 2013 1,319

23 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 24 87 13 15 85 930 2015 2015 883 1,205 1,180 844 £83.1m 1,141 £119.7m 814 £78.4m £76.9m 87 13 £109.1m 15 85 £76.2m 1,111 £105.8m £105.5m 2016 2016 Annual Report 2016 PageGroup 13% 15% 85% 87% Temporary % Permanent % Permanent Temporary 2014 2015 2016 2015 2014 2013 2013 2015 2014 2013 2016 2016 2016 2015 2014 2013 Gross profit £m Gross profit Headcount Permanent to temporary ratio Gross profit £m Headcount Permanent to temporary ratio How did you deliver How against your 2016 priorities? North America saw confidence levels fall within the Financial Services market, with impact seen in our office the greatest sought have therefore We in New York. our businesses from to drive growth Financial Services, outside of New York our performances from with strong offices in Boston, Los Angeles and Philadelphia. Latin America continued to see mixed market conditions. Brazil experienced tough market conditions throughout though we did see a slight the year, in the fourth quarter. improvement growth we saw very strong However, our other businesses in Latin from 65% of the America, which represented 19%. and collectively grew region, The region was impacted throughout was impacted throughout The region in China.2016 by economic uncertainty profit in gross This led to a reduction Conditions were for the year of 2.2%. 4%, thoughtougher within Asia, down as 2016 we saw an improvement in Australasia, with overall progressed of the year of 4%, and growth for growth 9% in our Page Personnel business. In Asia, we focused on the Chinese domestic market, which now represents 30% of our Chinese business and also We in the year. saw good growth launched our business in Bangkok, giving us Thailand at the end of the year, our seventh country in Asia. How did you deliver you deliver did How 2016 against your priorities?

The Americas Asia Pacific in 2017. more favourable market conditions more make investment here if we begin to see make investment here maintain our platform in Brazil, and will recruitment market. We will continue to market. We recruitment as focusing on our new temporary our existing office network, as well through rolling out new disciplines to out new rolling through business in the region outside of Brazil, business in the region In Latin America, we will expand our improvements in our conversion rate. improvements performing individuals which will drive continue to focus on retaining the best continue to focus on retaining offices outside of New York. We will York. offices outside of New by growing our market share in our our market share by growing response to changed market conditions, response diversify our offerings to the market, in diversify our offerings In North America, we will seek to priorities for 2017? What are your What are businesses in Australasia. driving future growth in our improving in our improving growth driving future within China and Japan, as well as growth such as the domestic market such growth markets where we see opportunities for markets where We will continue to invest in the will continue We most appropriate markets. most appropriate have our fee earner headcount in the model, will enable us to make sure we to make sure model, will enable us combined with our flexible businesscombined with our flexible demand throughout the region, which the region, demand throughout We will continue to monitor the level of will continue to monitor the We priorities for 2017? priorities for What are your your What are Risk Management Structure

Principal Risks In the intervening periods the risks The Executive Board and the Board associated with changes in either the continue to focus on Strategic, People and The Group recognises that the effective external environment or as a result of Financial risks. For these, we disclose KPIs management of risk is key in achieving our internal proposals are discussed as part which we use to monitor the risk impact, strategic objectives. of our ongoing business reviews and are and the rewards and incentives we apply to A Group risk review process is in place responded to accordingly. ensure effective management. which identifies the strategic and We also have well established compliance See strategic framework on page 7. operational risks which could impact on teams: IT risks and security, who focus Our Operational risks are those that the our business and the mitigating actions on delivery of activity to mitigate our IT Executive Board have agreed can be required to ensure that these risks are risks and systems and data security; and managed by our people on a day-to-day controlled to an acceptable level. Our regional revenue recognition compliance basis. These are included within our risk agreed level of risk appetite approved by teams who ensure accurate reporting of registers and are reviewed by the Board on the Board guides the level of acceptable our revenue worldwide. risk. an exceptions basis. The risks around data Our Internal Audit programme of activity security (cyber risk) is one such area which The process of risk management is an aligns the provision of assurance to the is reviewed at Board level on an ongoing integral part of our business forming part of controls that mitigate the risks identified basis. Previously systems transformation our strategy review, our business plans and from this process. was also included, but with the completion the delivery of our daily activity. of the roll-out of our Page Recruitment Our risk management process categorises System, this no longer carries the same It is supported by risk registers that are our principal risks into Strategic, Financial, level of review. maintained locally at country and process People and Operational. level and consolidated twice a year. This is Our risk evaluation includes matters Within this process we assess all risks then combined with a top-down review of relating to all our key stakeholders that could have a significant impact on the risks conducted with senior management and encompasses considerations of ability of the business to deliver its short- and the summarised output formally governance, social, environmental and term plans and medium and long-term reviewed by the Executive Board and the legal requirements. Audit Committee on behalf of the Board. strategy.

Our Risk and Control Framework

Risk and Control Framework

Controls Functions Review

Business Reviews/ Internal Control Checklists

Policies and Procedures Executive Revenue Compliance Teams Risk Management/ Board Board/Audit Committee IT Security Team Group Financial Control Risk Registers

Audit Reports Internal Audit Quarterly Updates

Group Governance Framework

25 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 26 Technology Annual Report 2016 PageGroup System transformation and change Attraction and retention Higher willingness to take risk Data security People development PageGroup brands and reputation Fiscal and legal compliance Financial management and control People Operational Risk Categories Strategic Financial

Further planned improvements exposure efficiencies translation risk

Shift in business model Foreign exchange – Macro-economic Delivery of operational Unacceptable to take risk PageGroup actualPageGroup net risk assessment

y

Risk appetite range

  Information systems – technolog P and retention Risk level 10. Financial management and control 10. 9. Fiscal and legal compliance 9. 8. PageGroup brands and reputation PageGroup 8. 7. Data security 7. 6. System transformation and change 6. 5. 5. 4. 4. attraction eople –development, 3. Shift in business model 3. 2. Foreign exchange – translation risk Foreign exchange 2. 1. Macro economic exposure 1. success globally. ensures we are best placed for are we ensures This measured approach to taking risk approach This measured business. of operational gearing inherent in the of operational gearing inherent balance sheet, reflecting the degree the degree balance sheet, reflecting financial position with a strong financial position with a strong We will always operate a conservative will always We sustainable manner. to operating in an ethical, legal and meritocratic culture with a commitment meritocratic culture We maintain a strong sales driven, a strong maintain We culture across the Group. across culture consistency of model and business from within the business, ensuring within from by developing and promoting our people by developing and promoting wide geographic spread. We drive this We wide geographic spread. the proven disciplines for brands to a the proven Our growth model is organic, rolling out model is organic, rolling Our growth experience and capability to manage. experience and capability taking the operational risks it has thetaking the operational a strong financial position and only a strong mitigate its strategic risks, maintainmitigate its strategic with a low risk appetite, seeking towith a low risk appetite, PageGroup operates in this environment operates in this environment PageGroup creating a higher risk environment. creating environment and thus financially volatile and thus financially environment makes it sensitive to the economicmakes it sensitive to provides limited forward visibility. This visibility. limited forward provides Recruitment is inherently cyclical and cyclical Recruitment is inherently Risk Appetite Principal Risks and Uncertainties

Financial Risks Actions to Mitigate Risk

Macro-economic exposure • We have diversified our business by • We continue to balance our permanent Recruitment activity is driven largely by expanding geographically, by increasing and temporary staff in line with the ratio of economic cycles and the levels of business the number of disciplines we support, and our permanent to temporary business in confidence. Businesses are less likely to by establishing three brands to address the each of the markets in which we operate. need new hires and employees are less different levels of the recruitment market: The temporary business tends to be more likely to move jobs when they do not have the clerical professional sector; the qualified resilient in times of economic downturn. confidence in the market, so leading to professional market; and the executive search sector. • We maintain a relatively low fixed cost reduced recruitment activity. base which allows the Group to scale up A substantial proportion of the Group’s • Our strategy recognises large high potential and down according to the economic profit arises from fees that are contingent markets in which we operate, principally environment. Our information systems upon the successful placement of a Germany, Greater China, Latin America, model is service based and we have candidate in a position. If the client cancels South East Asia and the US, where we centralised support activities at a Group and the assignment at any stage in the process, believe it is appropriate to continue to regional level to ensure we benefit from the the Group receives no remuneration. invest through the economic cycles for the efficiencies of scale and standard processes long-term. This investment is principally in where possible. our people in these areas and can be offset by balancing against costs in other regions where we seek to drive further efficiencies.

Foreign exchange – translation risk • The Group does not actively attempt to • The Group does not have material exposure The majority of the Group’s operating profit hedge the exposure from translation risk to foreign denominated monetary assets is derived from operations outside of the as this is a reporting risk only and not an and liabilities. operational risk. In 2016 the Company UK, so material changes in the strength • Note 20 of the financial statements includes of Sterling against the main functional entered into hedges to cover its investment in foreign entities in the US and Canada. a sensitivity analysis showing the effect of a currencies could have an adverse effect on 10% strengthening of Sterling against other the Group’s reported Sterling profits in the key currencies. financial statements. The main functional currencies in addition to Sterling are the Euro, Australian Dollar, Swiss Franc, Chinese Renminbi and Singapore Dollar.

Strategic Risks Actions to Mitigate Risk

Shift in business model • We actively monitor developments in new • Our highly trained and often specialised The emergence of new technology technologies and their use in the recruitment consultants maintain an extensive qualified platforms including, for example, social sector, and we have a pro-active social candidate database which we use to media, may lead to increased competition media strategy. resource for our clients at an overall cost that they cannot match. and pressure on margins which may • We partner with the large providers, such adversely affect the Group’s results if it is as LinkedIn and Facebook, to ensure that • We have established a network of innovation unable to respond effectively. we use this form of media to enhance our teams comprising senior management who value to clients. All consultants are trained in focus on developments in the marketplace. utilising the benefits of social media in their day-to-day activity.

27 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 28 Annual Report 2016 PageGroup Our service roll-out strategy is to fully Our service roll-out they operate pilot new services to ensure and achieve the benefits effectively deployed across they are planned before the Group. We select vendors through a robust a robust select vendors through We which ensures vendor selection process those chosen have the ongoing capability to support our business requirements and managed This is reviewed effectively. the services on an ongoing basis through delivery team. have in place a central procurement We team who in addition to supporting negotiations management in commercial with third that the relationship ensure defined appropriately party suppliers are and operationalised. have in place service delivery We contracts with our key vendors which to appropriate include levels of resilience of our business. the nature We have a strong sense of pride in have a strong We everything we do, with a firm belief to the Group in teamwork being core This drives determination to culture. succeed both individually and as a team, and motivation of our staff the increasing rewarding. more making their careers The Group targets its recruitment process process its recruitment targets The Group qualityto attract and employ high individuals. to a competitive committed are We use and pay and benefits structure we remain benchmarking to ensure incorporate a competitive. We with bonus performance-led culture This of pay. a proportion representing is based on team bonus structure which has been shown profitability of high- to encourage the retention performing individuals even in economic downturns. options linked of share make awards We financial performance to the Group’s to key senior employees. This provides incentive and a long-term retention aligns their motivations with those of our shareholders. employment contracts contain The Group in the event of an employee protection leaving, which at our senior level usually contain notice periods and provisions to confidentiality and non- relating solicitation.

• • • • • • • • •

our capabilities. We have a dedicated security team who We from protected our systems are ensure unauthorised access. This includes multi-layered ensuring appropriate at network and local levels protection monitoring and testing of and regular plans have in place disaster recovery We for each of our services at global and a level of levels which provide regional with the business in the service agreed event of a disaster. of migrating our in the process are We services to a cloud-based infrastructure and which will further enhance resilience capabilities. our disaster recovery Our core operating systems are governed operating systems are Our core regionally on a global basis but are the need to ensure recognise based. We the best practice is applied throughout is to our approach and therefore Group common platforms, standards ensure being applied. Within are and processes we have developed highly regions IT operation environments. resilient Key high performing individuals are Key high performing individuals are plans identified and have progression their specific needs at recognising of their development. stages different focus on succession have a strong We planning at all levels of the business with particular focus on the development of high performing individuals identified as team leaders. future continue to have a strategy of filling We within senior operational positions from which is a key part of our retention observe Our employees strategy. with high performers being rewarded and know that the Group promotion opportunities. sustainable career provides We have a well established appraisal have We the applied throughout process performance which reviews organisation by personalagainst objectives supported development plans. significant investments in make We developmentemployees’ training and including the the organisation across opportunity for international career by a globaldevelopment supported is aligned at the Training mobility policy. consultant level, set at a high standard based and individually and is both broad focused with a “9 step” modular to support leaders as they programme the Group. develop through

• • • • • • • • • Actions to MitigateRisk Actions to Mitigate Risk

Operational Risks People risk appetite) (Assessed under technology in our

candidates and our ability to deliver our financial performance. Our move to the delivery of IT as a reliance our flexible service increases technology an integral part of our Our systems are operations. Loss of systems capability would have a high impact on our performance, impacting the quality to clients and of service we provide party vendors for service on third Should one of these vendors delivery. at risk of a service disruption. fail we are Information systems – and financial results. and financial The Group’s strategy of organic growth, growth, strategy of organic The Group’s with nearly all senior operational relies within, positions being filled from high-performingon its ability to develop individuals. to attract and retain The failure skill-set,employees with the right key of particularly the resignation the affect individuals, may adversely operational performance Group’s People attraction, development and retention Principal Risks and Uncertainties

Operational Risks Actions to Mitigate Risk

System transformation and change • We have successfully rolled-out our Page • Our systems strategy will ensure IT is Recruitment System to all of the Group. The delivered on a service model managed by a The Group is in the process of implementing next stage in the programme is to ensure global IT capability which not only ensures a new suite of IT applications. This has the business is deriving the benefits from an efficient service provision but one which now been successfully delivered to all of the enhanced capability and common is highly resilient and scalable. our users. We have a working application platforms. suitable for our business which will deliver • Our back-office support activity covering benefits on a global basis. There are still • A programme to implement a global, cloud- IT, Finance, HR and Marketing is provided some residual risks around timing. based finance system has been initiated via shared service centres to ensure we which will deliver common systems enabling maximise our opportunities for process As our business grows we may be unable to standard processes and efficiencies. We are standardisation and gain the benefits of support our front end activities in an efficient using third party specialists to support our scale. and effective manner. internal team in this implementation. • We have established a dedicated Group Programme Management Office which co-ordinates the delivery of Group-wide projects and ensures appropriate prioritisation of activity through regular reporting into regional and Executive Board meetings.

Data security • We have comprehensive data protection • The Board reviews data security on a Confidential, sensitive and personal policies and procedures in place for the regular basis and receives updates on the data is held across the Group. Failure management of confidential, sensitive and status of our security activity and statistics to secure and handle this data properly personal data. on attempted data breaches, both internal could expose the Group to loss of • Security vulnerability is assessed as part of and external. business, financial penalties and/or our IT security strategy and the remediation • We continue to review our processes reputational damage. As stated earlier, of identified risks and alerts is tracked. and resource requirements in line with our move to the delivery of IT as a Regular security assurance checks take developments in both how our business flexible service increases our reliance place across all regions and penetration operates, greater reliance on third party on third parties. As a consequence, we testing is undertaken by specialist third suppliers and the level of external risk. also have an increased reliance on the parties. During the year we further strengthened the third parties’ IT security to secure our team with additional resource to maintain confidential and sensitive data. this focus.

PageGroup brands and reputation • We have comprehensive policies for key • Our marketing strategy recognises the need areas including social media, data protection to engage with candidates and clients using Our brands are material assets of the and information security. the latest media available in a way that Group and maintaining their reputation is reflects changing behaviours. We conduct key to continued success. • We actively monitor media to identify where there are unusually high references to the ongoing surveys of clients and candidates In the short-term, any event that could PageGroup, Michael Page, Page Personnel to ensure that we understand their cause reputational damage is a risk to and Page Executive trademarks. We have requirements and can adapt our processes the Group, such as a failure to comply a clear escalation/reporting path so that and procedures accordingly. with legislation, or other regulatory any potential incidents can be managed • We train our consultants to effectively use requirements, or confidential data lost effectively. new media, making the channels available to or stolen. Use of new social media them as part of their day-to-day activity. network sites has increased the speed of • We are supported by external advisers who communication and the reach, increasing provide ongoing advice on the protection • We have a programme of activity which the impact of an incident. and management of our brand. ensures that we effectively communicate the Page brands, keeping awareness high In the medium to longer term, a lack of among both current and potential clients awareness of the Group brands, or a and candidates. deterioration in the quality of service we provide to both clients and candidates, could have a significant impact.

29 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 30

Annual Report 2016 PageGroup Increased since prior year Increased There are compliance teams located in are There or share operates regional The Group which, as well as driving service centres control effective efficiencies, enable more of activities. The Group tax function regularly monitors tax function regularly The Group and transfer pricing requirements appropriate that developments to ensure being taken and appropriate actions are maintained todocumentation is being and compliance meet local reporting requirements. holds all normal business The Group employers’insurance cover including public liability and professional liability, indemnity insurance. the Contracts include clauses to ensure protected. rights are Group’s Monthly management information which and reconciled, is produced performance reviews. facilitates regular each region which ensure revenues are are revenues which ensure each region recognised. appropriately

• • • • • • Board through the review of monthly review the through Board showing comparisons of results reports and against budget, quarterly forecasts with explanations provided the prior year, for significant variances. Discussion strategy is undertaken by the around in its normal course of business, Board as well as at an annual dedicated strategy day. projections longer-term also prepare We which drive our Strategic Vision. These years. Our Strategic typically three are a clear vision for the Vision provides to one clear aligns the Group Group, on investment clarity provides culture, priorities, branding, belief in achievable goals, and clarity on the goals for our financial vision.

Lower than prior year Similar to prior year The Group has financial policies and The Group that support effective procedures financial management and financial and reporting. control and mirrors The Finance structure The Company Secretary and local legal and local The Company Secretary induction training and receive Our staff the Group’s updates regarding regular and compliance policies and procedures for legislation covering, with relevant legislation,example, discrimination anti-bribery and corruption and pre- employment checks. has central tax and treasury The Group functions, which manage the Group’s cash position and tax compliance. supports the local, regional and Group and Group supports the local, regional management structure. and compliance teams are advised by advised are and compliance teams leading external advisers, as required, to changes in legislation that in regard business, including the Group’s affect tax and corporateemployment, legislation, governance.

Actions to Mitigate Risk • • • • • approval of these accounts. As a result, of these accounts. As a result, approval the going concernto basis continues the financial in preparing be appropriate statements. Viability Statement Viability of the Assessing the prospects Company Our strategy and the key risks we face described on pages 7 and 27 to 30. are is process A full business forecasting performed on a quarterly basis, with a full budget for the following year created being during October and November, in December. to the Board presented strategy the Group’s reviews The Board budget. an annual Group and approves by the Performance is then monitored Operational Risks

Fiscal and legal compliance number operates in a large The Group have varyingof legal jurisdictions that requirements. legal, tax and compliance client contractAny non-compliance with and legislation or regulatory requirements could have an adverse requirements brands or financial on the Group’s effect results. Financial management and control Failure to maintain adequate financial Failure and and management processes could lead to poor quality controls in management decisions, resulting not achieving its financial the Group financial in the Group’s or errors targets, reporting.

The Board’s view of direction of travel of gross risk: of travel of gross view of direction The Board’s of at least 12 months from the date of of at least 12 months from the foreseeable future, being a period future, the foreseeable to continue in operational existence for that the Group has adequate resources has adequate resources that the Group cost base, the Directors are satisfied are cost base, the Directors risk, as well as the ability to manage the diversification, the limited concentration available, the geographical and discipline of cash, the level of borrowing facilities of cash, the level of borrowing 27 to 30. Based on the Group’s level 27 to 30. Based on the Group’s and uncertainties as set out on pages of the Group as well as the principal risks of the Group have considered the business activities have considered of Financial Statements”, the Directors of Financial Statements”, the Directors Accounting Standard 1 “Presentation 1 “Presentation Accounting Standard accounting purposes under International preparing the financial statements for preparing In adopting the going concern for basis Going Concern Principal Risks and Uncertainties

The period over which we confirm to explore the resilience of the Group We consider that this stress testing based longer-term viability to the potential impact of the significant assessment of the Group’s prospects is risks as set out on pages 27 to 30, or a reasonable in the circumstances given the Within the context of the above, in combination of those risks. We considered inherent uncertainty involved. accordance with provision C.2.2 of cyber incidents, disintermediation by way the 2014 revision of the UK Corporate Confirmation of longer-term viability of innovation, changes in technology, Governance Code, the Board has movements in foreign exchange rates, The Directors confirm that their assessment assessed the viability of the Group. and a global downturn. We have assumed of the principal risks and uncertainties Given the inherent uncertainty involved, the that, as in the past, as downside risks facing the Group was robust. period over which the Directors consider it materialise our headcount will flex through Based upon the robust assessment of the possible to form a reasonable expectation natural attrition in line with the drop in gross principal risks and uncertainties facing the as to the Group’s longer-term viability is profit, such that the impact on operating Company and the stress testing-based the three year period to 31 December profit is partially mitigated. assessment of the Company’s prospects, 2019. This period has been selected as it The scenarios were designed to be all of which are described above, the is short enough to present the Board and, severe, but plausible and were modelled Directors have a reasonable expectation therefore, users of the Annual Report with individually and in combination. In that the Company will be able to continue a reasonable degree of confidence, while each case, the Group remained viable in operation and meet its liabilities as still providing an appropriate longer-term throughout. However, it is considered they fall due over the period to 31 outlook. While the Board has no reason to extremely unlikely that this combination of December 2019. However, we operate believe the Group will not be viable over events would ever occur. Controls are also in an environment of limited visibility, a longer period, the Board has taken into in place, where possible, to mitigate dependent upon confidence in the global account the short-term visibility inherent in the impact of these scenarios and these marketplace. Further weakness in the a recruitment business with a permanent are described on pages 27 to 30. macro-economic outlook may cause us to recruitment bias. adapt our strategy during the three-year Various events may also alert the Main and Stress testing period in response, leading to a re- Executive Boards to a potential threat to evaluation of additional risks involved which The forecasting and budgeting process viability for example, macro-events drive might impact the business model. is also supported by scenarios that the recruitment industry, a drop in GDP in a encompass a broad range of potential particular country may lead to a reduction outcomes. These scenarios are designed in gross profit growth rates.

31 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 32 %

CER

CER*

-0.9% -3.5% -2.2% +2.3% +5.1% +3.0% +3.6% +3.0% +1.4% Change +11.5%

% +4.2% +9.5% +8.5% Annual Report 2016 PageGroup -3.5% Change +12.3% +11.7% +12.1% +10.3% +6.0% +9.7% +25.3% +10.8% +14.4% +11.7% 78.4 2015 As a result, our fee earner to operationalAs a result, ratio was maintained support staff level of 77:23. In total, at the record administrative expenses increased 11.6% to £520.1m (2015: £466.0m). from operating profit The Group’s trading activities totalled £101.0m (2015: £90.1m), an increase of (2015: £90.1m), an increase 1.4% at constant rates and 12.1% challenging by more in part offset larger conditions in some of the Group’s individual markets such as the UK in reported rates. in reported conversion rate of The Group’s from to operating profit profit gross slightly to trading activities increased 16.3% (2015: 16.2%). This reflected a combination of steadily improving conditions in a number of markets, and Brazil. 556.1 217.0 151.6 109.1 424.0 132.1 2015 27.5p 11.5p 21.1p 21.3p £90.1m £90.7m £556.1m £1,064.9m Reported (£m)

83.1 2016 621.0 271.9 146.3 119.7 470.0 151.0 2016 23.1p 23.1p 18.44p 11.98p £621.0m £101.0m £100.0m £1,196.1m 44% 24% 19% 13% 76% 24% 100% % of Group disciplines where there were increased increased were there disciplines where instances of candidate shortages. Our Large, High Potential Markets category declined 0.3% in constant gross but achieved a record currencies, of 8.9% in £186m and growth of profit performances in rates. Strong reported by the offset Germany and Mexico were difficult trading conditions experienced in China. Brazil, the US and Greater by headcount increased Group Total 264 in the year, up 5% to a record 6,099. up 5% to a record 264 in the year, of 227 This comprised a net increase fee earners (+5.1%) and an increase (+3%), of 37 operational support staff focus on the continued strong reflecting The ratio of net operational efficiency. additions in the year was 86 fee earners to 14 operational support staff.

Total Permanent Gross profit Year-on-year EMEA UK Asia Pacific Americas Temporary Total dividend per share (incl. special dividend) dividend per share (incl. Total Total dividend per share (excl. special dividend) dividend per share (excl. Total Diluted earnings per share Diluted earnings per share Basic earnings per share Basic earnings per share Revenue Financial summary Gross profit Operating profit Profit before tax *In constant currency at prior year rates *In constant currency was experienced in markets and although a stronger pricing environment pricing environment although a stronger relatively stable across all regions, all regions, stable across relatively (2015: 20.8%). Overall, pricing remained (2015: 20.8%). Overall, pricing remained increased slightly to 21.0% in 2016 increased This margin on temporary placements together with the margin charged. comprises the salaries of those placed, Revenue from temporary placements Revenue from year at 40:60 and 76:24 respectively. year at 40:60 and 76:24 respectively. placements was in line with the prior mix between permanent and temporary The Group’s revenue and gross profit profit and gross revenue The Group’s 11.7% to £621.0m (2015: £556.1m). £1,064.9m) and gross profit increased increased profit £1,064.9m) and gross increased 12.3% to £1,196.1m (2015: increased by 3.0%. At reported rates, revenue rates, revenue by 3.0%. At reported 2016 increased 3.6% and gross profit profit 3.6% and gross 2016 increased revenue for the year ended 31 December for revenue At constant exchange rates, the Group’s At constant exchange rates, the Group’s

Regional Reviews Review of the Year the of Review Review of the Year

Europe, Middle East and Africa (EMEA) grew 6%, 9% and 26% respectively, for the full year in constant currencies. Page EMEA Gross profit (£m) Growth rates Personnel in Germany, where last year we invested heavily in temporary and (44% of Group in 2016) 2016 2015 Reported CER contracting recruitment, grew 17%. Page Personnel now represents over a 271.9 217.0 +25.3% +11.5% third of our German business. Overall, 13 countries, representing 44% of the Market Presence Africa that are less developed, with limited competition, but are increasingly looking region, had double-digit growth during EMEA is the Group’s largest region, for professional recruitment services. the year. contributing 44% of the Group’s gross The Middle East, where PageGroup is the The Middle East and Africa, which profit in the year. With operations in largest international recruiter, has some of represented 5% of the region, saw a 18 countries, PageGroup has a strong the Group’s highest conversion rates. decline of 7% in gross profit compared to presence in the majority of EMEA markets, 2015 due to political uncertainty and the and is the clear leader in specialist Performance weakness in the oil and gas sector. permanent recruitment in the two largest, In 2016, the EMEA region generally saw France and Germany. Across the region, The 62.1% increase in operating profit for strong market conditions, with 12 countries permanent placements accounted for 2016 to £51.7m (2015: £31.9m) and the delivering record gross profit for the year. 71% and temporary placements 29% of increase in the conversion rate to 19.0% In constant currency, revenue increased gross profit. (2015: 14.7%) is the result of continued 13.6% on 2015 and gross profit increased favourable market conditions in the region, The region comprises a number of large, by 11.5%. In reported rates, revenue in combined with good control over costs proven markets, such as France, Spain, the region was up 27.8% to £538m (2015: despite transitioning to our new European Italy and the Netherlands, across which £421m), and gross profit increased 25.3% Shared Service Centre. there is a broad range of competition. to £272m (2015: £217m). The region EMEA also includes one of the Group’s benefited from favourable foreign exchange Headcount across the region increased Large, High Potential Markets, Germany, movements that increased revenue by 258 (+11%) to 2,553 at the end of which has low penetration rates (markets and gross profit by £60m and £30m, 2016 (2015: 2,295). The majority of where less than 30% of recruitment respectively. the increase was fee earners, as the is outsourced) and significant growth business added headcount where Our larger businesses in France, Germany potential, particularly in temporary growth opportunities were strongest, and the Netherlands, together representing recruitment. In addition, there are a number predominately in France, the Netherlands nearly 60% of the region by gross profit, of markets such as Poland, Turkey and and Southern Europe.

United Kingdom UK disciplines such as Technology (+10%), Legal (+10%) and Procurement & Supply UK Gross profit (£m) Growth rates Chain (+5%), performed well. However, market conditions in our Accounting & (24% of Group in 2016) 2016 2015 Financial Services discipline (-2%) and Sales and Marketing disciplines were more 146.3 151.6 -3.5% challenging, with Marketing down 13%. Michael Page was down 5%, while Page Market Presence and Page Executive, with representation Personnel was up 2%, reflecting stronger in 12 specialist disciplines via the Michael activity in temporary and permanent The UK represented 24% of the Group’s Page brand. There is significant opportunity recruitment at the professional clerical gross profit in 2016 and is the Group’s to roll-out new discipline businesses under level. These challenging market conditions largest single market, operating from the lower-level Page Personnel brand, resulted in a decline in operating profit of 27 offices covering all major cities. It which now represents 22% of UK gross 17.4% to £24.2m (2015: £29.2m) and a is a mature, highly competitive and profit. Our Michael Page business was reduction in the conversion rate to 16.5% sophisticated market with the majority impacted the most by the Brexit-related (2015: 19.3%). of vacant positions being outsourced economic uncertainty, with activity levels to recruitment firms. PageGroup has a stronger at the lower salary levels and in Headcount fell 7% during the year to market leading presence in permanent Page Personnel. 1,411 at the end of December 2016 recruitment across the UK and a growing (2015: 1,516). With a relatively high presence in temporary recruitment. In the Performance staff turnover of newer, less experienced UK, permanent placements accounted for consultants, we will continue to monitor 70% and temporary placements 30% of Revenue of £325m (2015: £338m) and activity and will, if needed, use that gross profit. gross profit of £146m (2015: £152m) turnover to lower headcount, and therefore declined 3.9% and 3.5% respectively, costs, by natural attrition. The UK business operates under the three reflecting continued economic uncertainty. brands of Michael Page, Page Personnel

33 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 34

Annual Report 2016 PageGroup This was driven by the US (down 3%) which was impacted in particular by our Financial Services business in New as well as in area, and the Tri-state York our Canadian business which declined economic 8%, due to the prevailing conditions and the challenging oil and gas market. was up profit In Latin America, gross in constant currencies. 2% year-on-year continued to operate in two The region divergent markets, with tough economic conditions in Brazil, which led to a fall by strong 21%, offset of profit in gross Our business performances elsewhere. to the challenging in Brazil reacted the economic conditions by reducing number of fee earners by 7% during Excluding Brazil, the other the year. which made countries in the region, up 65% of Latin America, saw growth of 19%. fell 29.6% to £4.4m Operating profit (2015: £6.2m), with a conversion rate of 5.3% (2015: 7.9% %). Headcount by 86 (+10%) in 2016 to 930 increased (2015: 844). of 9% and growth in New Zealand of in growth of 9% and China in Greater conditions 37%. Trading the end of towards (-4%) improved by Eastern driven in particular the year, have we where China. In Hong Kong, clients,a large number of multinational tough marketwe continue to experience Asia was downconditions. South East primarily to due 6% on the prior year, in Singapore. difficult trading conditions made leadership and management We year, during the changes in Singapore enable us to betterwhich, we believe, will and environment current to the react opportunities. growth fell 8.8% to £20.7m Operating profit in a reduction (2015: £22.7m), resulting in the conversion rate to 17.3% the (2015: 20.8%). Headcount across by 25 (2%) in the year, rose region ending the year at 1,205 (2015: 1,180). The majority of these headcount in Asia. additions were CER CER -2.2% -0.9% Growth rates Growth rates +6.0% +9.7% Reported Reported Performance revenue In constant currencies, profit 0.2% and gross decreased rates, declined by 0.9%. In reported 7.7% to £124m increased revenue profit (2015: £115m) while gross 6.0% to £83m (2015: £78m). improved benefited the region During the year, exchange favourable foreign from revenue movements that increased by £9m and £5m, profit and gross respectively. profit In North America, our gross by 4% in constant currencies. decreased Australasia is a mature, well-developed Australasia is a mature, recruitment and highly competitive has a meaningful market. PageGroup in permanent recruitment presence professional in the majority of the disciplines and major cities in Australia and New Zealand. Page Personnel and significant presence has a growing market potential to expand and grow share. Performance In Asia Pacific, in constant currencies, 3.0% and gross decreased revenue reported by 2.2%. In decreased profit 9.6% to increased rates, revenues profit gross while £191m), (2015: £210m to £120m (2015: £109m). 9.7% rose in growth Australasia benefited from our Australian Page Personnel business are few international competitors andare scale. Across none with any regional Latin America, permanent placements and profit accounted for 92% of gross temporary placements 8%. 78.4 2015 2015 109.1

Gross profit (£m) Gross profit (£m) 83.1 2016 2016 119.7

Americas (13% of Group in 2016) Asia Pacific (19% of Group in 2016) The Americas in six countries and 15 offices. There in six countries and 15 offices. There position with around 550 employees position with around PageGroup enjoys the leading market PageGroup a very under-developed region, where where region, a very under-developed competitive advantage. Latin America is reach is uncommon and provides a is uncommon and provides reach professional specialisms and geographic professional of any scale. PageGroup’s breadth of breadth of any scale. PageGroup’s there is limited national competition there many disciplines, especially technical, developed recruitment industry, but in industry, developed recruitment we have eight offices, has a well- our growth strategy. The US, where The US, where strategy. our growth to be Large, High Potential Markets in US and Latin America are considered considered US and Latin America are America (44% of the region). Both the America (44% of the region). America (56% of the region) and Latin America (56% of the region) Group’s gross profit in 2016, being North profit gross Group’s The Americas represented 13% of the The Americas represented Market Presence Asia Pacific 5% of gross profit. profit. 5% of gross for 95% and temporary placements Asia, permanent placements accounted opportunity in Asia is significant. Across opportunity in Asia is significant. Across limited competition, the size of the management team of c. 800 staff and management team of c. 800 staff this region. Withthis region. a highly experienced East Asia and Greater China, are in China, are East Asia and Greater Large, High Potential Markets, South at good conversion rates. Two of our at good conversion rates. Two international and domestic marketplaces offers attractive opportunities in both attractive offers generally highly under-developed, but generally highly under-developed, and Hong Kong, the Asian market is financial centres of Tokyo, Singapore Tokyo, Singapore of financial centres 29% Australasia. Other than in the 71% of the region being Asia and 71% of the region Group’s gross profit in 2016, with profit gross Group’s Asia Pacific represented 19% of the represented Asia Pacific Market Presence Review of the Year

Operating Profit and to 16.5%, while Asia Pacific saw a fall In line with the improved growth rates from 20.8% to 17.3%, driven mainly by and increase in operating profits, a final Conversion Rates economic concerns in Greater China. The dividend of 8.23p (2015: 7.9p) per ordinary The Group’s organic growth model and Americas conversion rate was impacted share is proposed. When taken together profit-based team bonus ensures cost by tough market conditions within our New with the interim dividend of 3.75p (2015: control remains tight. Approximately three- York Financial Services market, down to 3.6p) per ordinary share, this would imply quarters of costs were employee related, 5.3% from 7.9% in 2015. an increase in the total dividend for the year of 4.2% over 2015 to 11.98p per ordinary including wages, bonuses, share-based The Group benefited from movements share. long-term incentives, and training and in foreign exchange rates, as Sterling relocation costs. weakened against almost all currencies in The proposed final dividend, which Our fee earner to operational support staff which the Group operates. The weakness amounts to £25.6m, will be paid on 19 ratio maintained its record level of 77:23, of Sterling increased the Group’s revenue, June 2017 to shareholders on the register with our ongoing focus on conversion gross profit and operating profit by £93m, as at 19 May 2017, subject to shareholder rates and maximising productivity from the £48m and £10m, respectively. approval at the Annual General Meeting on 8 June 2017. investment of 206 fee earners added in A net interest charge of £1.0m primarily 2015, as well as the further 227 added in reflected the catch up of £0.6m interest After consultation with our shareholders, 2016. Net additions in the year were 86 fee expense relating to the discounting of we also paid a special dividend of 6.46p earners to 14 operational support staff. French construction participation tax which per share on 12 October 2016, totalling The combination of the weakness in has now been recognised. Interest of £20m. We will continue to monitor our cash Sterling and the ongoing focus on cost £0.1m was received on cash balances held position in 2017 and will make returns to control resulted in operating profit of through the year, offset by financial charges shareholders in line with the above policy. £101.0m (2015: £90.1m), an increase relating to the Group’s invoice discounting of 12.1% in reported rates and 1.4% in facility and overdrafts used to support local Cash Flow and Balance Sheet operations of £0.5m. constant currencies. Cash flow in the year was strong, with In December, we completed the roll-out Earnings Per Share and £121.3m (2015: £101.6m) generated from of PRS, our new operating system. We operations. The closing net cash balance also completed the European Finance Dividends was £92.8m at 31 December 2016, a decrease of £2.2m on the prior year. The transition into our Shared Service Centre in In 2016, basic earnings per share movements in the Group’s cash flow in Barcelona, although with the last countries increased 8.5% to 23.1p (2015: 21.3p), 2016 reflected trading conditions in 2016, transitioning in December, there was still reflecting the favourable foreign exchange with a £1.1m increase in working capital. some temporary parallel-running in place movements and improved business at the year end. The Marketing transition performance. Diluted earnings per share, The Group has a £50m invoice financing completed earlier in the year and IT is now which takes into account the dilutive effect arrangement and a £13m committed two-thirds complete, the latter progressing of share options, was up 9.5% to 23.1p overdraft facility to facilitate cash flows in line with our strategy to move to the (2015: 21.1p). across its operations and ensure rapid Cloud. access to funds should they be required. The Group’s strategy is to operate a policy Neither of these were in use at the Depreciation and amortisation for the year of financing the activities and development year end. totalled £17.1m (2015: £15.4m). This of the Group from our retained earnings included amortisation relating to PRS of and to maintain a strong balance sheet Income tax paid in the year was £32.5m £7.6m (2015: £6.7m). position. We first use our cash to satisfy our (2015: £19.1m) an increase of £13.4m The Group’s conversion rate for the period operational and investment requirements on the prior year. The increase reflects of 16.3% was a slight improvement and to hedge our liabilities under the principally an increase in the UK arising from 16.2% in 2015. This was achieved Group’s share plans. We then review our from the impact of a repayment received alongside the Group’s investment liquidity over and above this requirement to in 2015 and an additional payment made programme, which was focused in make returns to shareholders, firstly by way in 2016, both in respect of earlier years. particular on our Large, High Potential of ordinary dividend. The adjustment by way of repayment and additional payment is a normal Markets, and despite the tough market Our policy is to grow this ordinary dividend consequence of periodic payments on conditions faced in a number of the over the course of the economic cycle, account in the UK with liabilities not being Group’s core markets. in line with our long-term growth rate; we finalised until 12 months after the financial believe this enables us to sustain the level In EMEA, despite the costs of transitioning year. There was also increased foreign of ordinary dividend payments during a to our new European Shared Service withholding tax incurred in the year and downturn as well as increasing it during Centre, conversion increased from 14.7% higher tax payments in EMEA resulting more prosperous times. to 19.0%. This was driven by operational from its stronger trading performance. leverage on gross profit growth. All other Cash generated in excess of these first two In addition, the weakening of Sterling in regions saw a worsening of conversion priorities will be returned to shareholders the year has increased the value of rates due to tough trading conditions. In through supplementary returns, using foreign tax payments when translated the UK, the conversion rate fell from 19.3% special dividends or share buybacks. into Sterling.

35 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 36 Cash Increase Decrease Annual Report 2016 PageGroup

92.8 of which 5.4m had vested, but had During the year, not been exercised. granted over 1.8m shares options were option plans. share under the Group’s over 0.1m exercised Options were generating £0.4m in cash, and shares, At options lapsed over 1.6m shares. the end of 2016, options remained of which outstanding over 17.9m shares, 7.8m had vested, but had not been During 2016, 3.7m shares exercised. a cost of £15.1m by at purchased were Trust to Employee Benefit the Group’s employee satisfy obligations under future plans (2015: £nil). No shares share by the Company or repurchased were cancelled during the year (2015: nil). on 7 March by the Board Approved 2017 and signed on its behalf by: Steve Ingham Chief Executive Officer Trust to satisfy future obligations under obligations future to satisfy Trust £nil). plans (2015: our employee share item in our balanceThe most significant which sheet was trade receivables, at 31 Decemberamounted to £205.1m comprising2016 (2015: £163.4m), and salariespermanent fees invoiced temporaryand fees invoiced in the but not yet paid.placement business, debtors at 31 December sales in Day’s 50 days (2015: 46 days). 2016 were 3.7 Exchange Dec 2016

Paid (36.2) (20.1) Dividends (14.7) exercises/ exercises/ Net option EBT purchases Net Capex (23.4) predominantly reductions, in reductions, predominantly of the countries one third approximately operates such in which PageGroup the corporation as the UK where 20.25% to tax rate has fallen from 20.0%. In addition to the movement tax in the underlying rate, the effective rate in 2016 was impacted by a mix and (0.5% decrease) of recognition of losses (0.8% increase) derecognition a range of territories (overall 0.3% across options and tax on share increase) which together increased (0.2% increase) the rate by 0.5%. the The tax charge for the year reflects which is aligned to tax policy, Group’s policy business goals. It is PageGroup’s of tax in the countries to pay its fair share in which it operates and to deal with its open and in a straightforward, tax affairs honest manner. At the beginning of 2016 the Group At the beginning of 2016 the Group options outstanding, had 17.9m share Share Options and Share Repurchases Dividend payments were down on the were Dividend payments (2015: £85.1m),prior year at £56.3m of the larger special as a result also was There dividend paid in 2015. receipts reduction in cash a significant In 2016, option exercises. share from from by the Group £0.4m was received to of options compared the exercise by the in 2015, driven £22.6m received In 2016, price at that time. higher share on the purchase £15.1m was also spent Benefit by the Employee of 3.7m shares (32.8) interest x and net Ta (1.1) Capital EBITDA Working 122.4 95.0 Dec 2015 75 50

125 100 225 200 175 150

£m lower tax rates and rate changes, to greater profits from territories with from profits to greater from 2015 was predominantly owing 2015 was predominantly from 27.4% (2015: 29.4%). The reduction 27.4% (2015: 29.4%). The reduction For 2016, the underlying tax rate was overseas countries. expenditure and higher tax rates in expenditure due to the impact of disallowable year of 20.0% (2015: 20.25%) principally effective UK Corporation Tax rate for the UK Corporation Tax effective 27.0%). The rate is higher than the an effective tax rate of 27.9% (2015: an effective gross profit increased by £30m. increased profit gross (2015: £24.5m). This represented largest impact was within EMEA, where largest impact was within EMEA, where The tax charge for the year was £27.9m impact was felt globally, but by far the impact was felt globally, Taxation therefore operating profit by £10m. This profit operating therefore administrative expenses by £38m and year, increasing gross profit by £48m, by profit gross increasing year, benefit to our reported results for the reported benefit to our Foreign exchange provided a substantial provided exchange Foreign Foreign Exchange Cash flow waterfall 2016 Cash flow Group’s largest office by headcount. largest office Group’s and Neuilly, Paris, which is now the Paris, which and Neuilly, moves in the year in New York, Tokyo Tokyo New York, moves in the year in and equipment increased due to office due and equipment increased System. Spending on property, plant property, System. Spending on transition to our new Global Financetransition to our new operating system and started theoperating system and the implementation of our new PRSthe implementation of software increased as we completed increased software £23.4m (2015: £14.8m). Spending on£23.4m (2015: £14.8m). Net capital expenditure in 2016 was expenditure Net capital Chairman’s Introduction to Corporate Governance

governance framework. This underpins the in June 2016. Ruby ceased to be a member Board’s ability to set the overall strategic of the Audit and Remuneration Committees direction of PageGroup and supports its with effect from 23 May 2016 and stood core values, policies and procedures, which down as Senior Independent Director on in turn, creates an environment in which 9 June 2016, when Patrick De Smedt was our business and employees can act with appointed in her stead. In October, on integrity and effectiveness, while driving the recommendation of the Nomination profitable growth. Committee, the Board appointed Michelle Healy as a Non-Executive Director. The following pages of this Corporate Michelle has extensive experience in global Governance Report set out how the human resources management. This Company has complied with the UK experience, together with Michelle’s general David Lowden, Corporate Governance Code; the work management experience in the service Chairman and activities of each Board Committee; sector, complements that of the other Board and the annual evaluation process, which members. this year was an externally facilitated review Dear Shareholder, undertaken by Lintstock Limited. I hope you find our Corporate Governance I am pleased to present the Company’s Report informative and I will be available During the year under review the Board Corporate Governance Report for the at the 2017 Annual General Meeting to continued to build a strong and well financial year ended 31 December respond to any questions you may have on balanced Board. Baroness Ruby McGregor- 2016. Your Board believes that sound this Report. Smith completed nine years on the Board in governance, both in the boardroom and May 2016 and at the request of the Board throughout the Group, is fundamental to continued to serve on the Board as a Non- David Lowden the long-term success of the business. It Executive Director. Ruby was re-elected by Chairman remains committed to high standards of shareholders at the Annual General Meeting governance and the fostering of an effective 7 March 2017

Our Corporate Governance Framework

The Board The Board’s role is to provide entrepreneurial leadership of the Group within a framework of prudent and effective controls which enable risk to be assessed and managed. It has a formal schedule of matters reserved for its decision. More details on pages 42 to 45

Chief Executive Chief Financial Nomination Officer (CEO) Officer (CFO) Committee Key responsibility is to develop Responsible for managing the Responsible for ensuring that the and deliver the Group’s strategy financial risks, reporting and Company has the executive and non- within the policies and values planning of the Group. executive Board leadership it requires. established by the Board. Details on page 46

Audit Committee Executive Board Responsible for the integrity of the The Executive Board is chaired Company’s financial statements and by the CEO and includes the performance, ensuring the necessary CFO. The Executive Board is internal controls and risk management responsible for overseeing systems are in place and effective. operations in our regions and for Details on page 48 overseeing business operational functions Group-wide. Details on page 41 Remuneration Committee Company Secretary Responsible for the review, Responsible for ensuring the recommendation and implementation Board complies with all legal, of the Group’s remuneration strategy, regulatory and governance its framework and cost. requirements. Details on page 60

37 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 38

None

Annual Report 2016 PageGroup More than ten years in the Group than ten years in the Group More Extensive experience in finance, Significant international experience in the UK, Continental including roles and Asia Europe High levels of compliance, change management, large teams and almost systems experience, across every finance discipline network of finance Strong professionals Group’s operations Group’s with a detailed knowledge of the audit and risk management

Kelvin joined PageGroup plc Past Roles: Kelvin joined PageGroup Financial Controller in July 2006 as Group He was appointed and Company Secretary. Acting Chief Financial Officer in October 2013. He held the title of Company until December 2013. In June Secretary 2014 Kelvin was appointed Chief Financial Kelvin Prior to joining the Group, Officer. spent six years at Allied Domecq and three years at Unilever in a variety of years three finance functions. He has significant international experience and has high levels of compliance, change management, large teams and systems experience, across almost every finance discipline. almost across Management Accountant. He is a Chartered Appointments: Other Current None Committees: Board Skills and Experience: • • • • • June 2014 Kelvin Stagg, Chief Financial Kelvin Stagg, Chief Executive Director Officer, Date of Appointment:

None

Steve joined Michael Page Experience in other sectors and industries having worked on the of a major charity and retailer Boards Strong entrepreneurial and strategic entrepreneurial Strong many skills having initiated and grown businesses Extensive experience in business development and account management Significant international experience including the emerging markets of SE Asia, China, Latin America and India Leadership of a global people business having seen PageGroup 6,000 200 to over from grow employees 30 years’ service with the Group and 30 years’ service with the Group industry recruitment 11 years as a CEO of a public now FTSE 250, with strong company, value IR skills, delivering shareholder

Steve Ingham, Chief Executive Steve Ingham, Chief Executive Director Officer, Date of Appointment: February 2001 Chief Executive Officer April 2006 • • • • • • • Past Roles: in 1987 as a consultant with Michael Page Marketing and Sales. He was for setting up the London responsible Marketing and Sales business and was in 1990. to Operating Director promoted He was appointed Managing Director of Michael Page Marketing and Sales in 1994. Subsequently Steve took additional for several businesses. He responsibility as Executive to the Board was promoted UK Operations in February of Director 2001 and subsequently to Managing UK Operations in May 2005. of Director Steve was appointed Chief Executive Officer in April 2006. Appointments: Non- Other Current Debenhams plc. Executive Director, Member of the Corporate Partnership Hospital. Ormond Street Great Board, Committees: Board Skills and Experience:

Experienced non-executive in several sectors Proven ability for delivering Proven value shareholder financial, marketing and Strong skills commercial international businesses with cultural diversity strategic understanding Strong Extensive experience in both general management and Many years of operating within financial management

Date of Appointment: 2012 August Director Chairman December 2015 Chairman David Lowden, • • • • •

• Our Board of Directors of Board Our Skills and Experience: (Chairman) Board Committees: Nomination Committees: Board Committee, William Hill plc. and Chairman of the Audit and Risk Berensden plc; Non-Executive Director plc; Non-Executive Director Berensden of the Remuneration Committee, Independent Director and Chairman Independent Director financial positions in Asprey plc, financial positions in Asprey Appointments: Senior Other Current Nielson Sofres plc David held senior Nielson Sofres Corporation. Express Officer in 2006. Before joining Taylor joining Officer in 2006. Before A.C. Nielsen Corporation and Federal 1999 to 2009, becoming Chief Executive the marketing services business, from the marketing services business, from the Board of Taylor Nielson Sofres plc, Nielson Sofres of Taylor the Board Past Roles: David was a member of Our Board of Directors

Baroness Ruby McGregor-Smith Simon Boddie, Independent Danuta Gray, Independent CBE, Non-Executive Director Non-Executive Director Non-Executive Director

Date of Appointment: Date of Appointment: Date of Appointment: May 2007 September 2012 December 2013

Past Roles: Ruby qualified as a Past Roles: Simon qualified as a Past Roles: Danuta was Chairman of Chartered Accountant with BDO Stoy Chartered Accountant with Price Telefonica O2 in Ireland until December Hayward. Ruby joined Mitie Group plc Waterhouse. He was Group Finance 2012, having previously been its Chief in December 2002 as Group Finance Director of Electrocomponents plc until Executive from 2001 to 2010. Prior to that Director and was appointed Chief 2015. Prior to that Simon held a variety of Danuta was Senior Vice President for BT Operating Officer in September 2005. senior finance positions with Diageo over a Europe in Germany and during her career She was Chief Executive of Mitie Group 13-year career, latterly Finance Director of gained experience in sales, marketing, plc from March 2007 to December Key Markets. customer services and technology and in 2016. leading and changing large businesses. Other Current Appointments: Chief She previously served for seven years Other Current Appointments: Financial Officer, Coats Group plc. on the Board of Irish Life and Permanent Member of the Women’s Business Board Committees: Audit (Chairman), plc and was a Director of Business in the Council; Non-Executive Director of the Nomination, Remuneration Community Ireland and Aer Lingus plc. Department of Education. Skills and Experience: Other Current Appointments: Non- Board Committees: Nomination* • CFO of FTSE 250 public company for Executive Director and Remuneration Skills and Experience: over ten years Committee Chairman, Old Mutual plc; Non- • CEO, COO and CFO experience Executive Director and Senior Independent • Extensive experience in financial, audit Director of Aldermore Bank PLC; Non- with a FTSE 250 public company and risk management for over 13 years Executive Director of Paddy Power Betfair • Many years of operating within plc*; Non-Executive Director, Direct Line • Strong strategic and commercial international businesses with cultural Insurance Group plc; Member of the understanding diversity Defence Board, UK Ministry of Defence. • Proven ability for delivering • Emerging markets experience shareholder value Board Committees: Remuneration • Strong strategic and commercial (Chairman), Audit, Nomination • Extensive experience in customer understanding services Skills and Experience: • Broad industry experience, including • Significant financial, audit and risk consumer goods, distribution and • Chairman and CEO experience management systems experience manufacturing • Experienced non-executive in several sectors * Ruby was a member of the Audit and Remuneration Committees until • Extensive experience in general 23 May 2016 management • Proven ability for delivering shareholder value • Strong strategic understanding • Extensive experience in sales, marketing, customer services and technology • Leading and changing large businesses

* Danuta will cease to be a Non-Executive Director of Paddy Power Betfair plc from 17 May 2017

39 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 40

Annual Report 2016 PageGroup Prior to this Extensive public company, Extensive public company, compliance and corporate governance experience General counsel experience in a FTSE250 companies from number of business sectors Over 25 years’ experience as a Secretary Chartered

• • Past Roles: • appointment Elaine was Company and General Counsel of Secretary plc. HMV Group Skills and Experience: Elaine Marriner, Elaine Marriner, Company Secretary Date of Appointment: December 2013 Non-

Patrick spent 23 years at Experienced non-executive in several sectors Extensive experience in general management Many years of operating within international businesses with cultural diversity ability for delivering Proven value shareholder Leading and changing large businesses Extensive experience of technology and customer services

Date of Appointment: August 2015 • • • • • • Patrick De Smedt, Senior Patrick De Smedt, Independent Director Past Roles: Microsoft during which time he founded Microsoft the Benelux subsidiaries, led the development of its Western European business and served as Chairman of Middle East and for Europe, Microsoft in 2006, Africa. Since leaving Microsoft of a Patrick has served on the boards public and private number of European companies. He has deep knowledge of international markets and information and experience as a non- technology, executive in diverse industry sectors. Appointments: Other Current and Remuneration Executive Director plc; Committee Chairman of Victrex of KCOM Senior Independent Director Senior Independent Director plc; Group and Remuneration Committee Chairman plc; Non- of Morgan Sindall Group of Kodak Alaris Executive Director of Holdings Ltd; Non-Executive Director Nexinto GmbH. Committees: Audit, Nomination, Board Remuneration Skills and Experience: Group Group

Leading and delivering change Extensive experience in general management Extensive experience in global leadership human resources

Skills and Experience: Remuneration Board Committees: Audit, Nomination, Committees: Board • • Services A/S. Other Current Appointments: Other Current World ISS Officer, Chief People & Culture • in Germany. plc and Trust Management Consultants plc and Trust included assignments with Kerry Group included assignments with Kerry Group within the Group. Michelle’s earlier career earlier career Michelle’s within the Group. previously held a number of senior roles held a number of senior roles previously British American Tobacco plc, having British American Tobacco was General Manager UK & Ireland for was General Manager UK & Ireland SABMiller plc. Prior to this, Michelle Integrated Change Programme at Integrated Change Programme 2015 Michelle was Director, Group Group 2015 Michelle was Director, Before joining ISS in April joining Past Roles: Before Date of Appointment: October 2016 Non-Executive Director Michelle Healy, Independent Michelle Healy, The Executive Board

Steve Ingham Gary James Patrick Hollard Chief Executive Officer, Executive Board Director, Executive Board Director, Executive Director Asia Pacific Latin America, Middle East and Africa

See biography on page 38. Gary joined Michael Page Finance in Patrick joined Michael Page in France in 1996, London in 1984. He was appointed having worked previously for KPMG Peat director of Michael Page UK Sales and Marwick. Prior to that, he had been Vice- Marketing in 1994 and Managing Director President of AISEC International, the student-led of Michael Page UK Marketing in 1997. organisation, from 1991 to 1992. Appointed In 2002 he transferred to the USA on his director in 1999, he moved to Sao Paulo to appointment as Managing Director of launch Michael Page Brazil, and then launched our business in North America. He was offices in Mexico in 2006, Argentina in 2008, appointed Regional Managing Director of Chile in 2010 and Colombia in 2011. Appointed the Asia Pacific region in August 2006. Regional Managing Director in 2007, he is now Kelvin Stagg responsible for PageGroup’s operations in Latin Chief Financial Officer, America, Middle East and Africa. Executive Director

See biography on page 38.

Olivier Lemaitre Oliver Watson Executive Board Director, Executive Board Director, Continental Europe UK, USA and Canada

Olivier joined Michael Page Finance in Oliver joined Michael Page in 1995 as a Paris in 1997, having worked previously consultant in London. He was appointed as a Controller for Renault in Poland. In director of Michael Page UK Sales in 1999, he moved to Sao Paulo to launch 1997 and then managing director in 2002. Michael Page Brazil, before returning to In 2006, he was appointed Regional Europe in November 2002 to lead our Managing Director for Michael Page UK Michael Page Frankfurt office. He was Sales, Marketing and Retail. In 2007, he appointed managing director of Michael launched Michael Page Middle East and has Page Germany in 2004. In 2007, he was since developed our office network across appointed Regional Managing Director in the region. In 2009, he became Regional charge of Austria, Belgium, Germany, Managing Director for Michael Page UK the Netherlands, Luxembourg and Finance, Marketing and Sales, Middle East, Switzerland. Since 2012 he has been Scotland and Ireland. He is now responsible responsible for PageGroup’s operations for PageGroup’s operations in the UK, USA in Continental Europe. and Canada.

41 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 42

Annual Report 2016 PageGroup Approval of Nomination Committee of Approval on the recommendations of appointment and removal and succession planning; Directors capital Changes to the Group’s of any and approval structure business plan prior to a new entity being established in a new territory; audit and tax Financial reporting, matters; Material contracts and transactions course of not in the ordinary business; Material capital expenditure projects; of the annual budget; Approval Obtaining major finance; and Communications with stakeholders and complying with regulatory requirements. Group strategy and corporate Group objectives; and extent Determining the nature of the significant risks the Board is willing to take in achieving the strategic objectives of the Company; scope Major changes to the nature, or scale of the business of the Group; Corporate governance matters;

plans. He also leads the programme of leads the programme plans. He also shareholders. communication with Directors Executive and Non-Executive and equal members of the Board are Board for have collective responsibility Directors decisions. The Non-Executive and experience tobring a wealth of skills and its Committees. the Board of has a formal schedule The Board which for its decision matters reserved includes: • • • • • • • • training and Induction, information for the The Chairman is responsible and is induction of new directors assisted by the Company Secretary. • • • • each On appointment to the Board, discusses with the Chairman Director the extent and the Company Secretary A tailored of the training required. to cover their induction programme is then compiled. individual requirements typically Elements of the programme Baroness Ruby McGregor-Smith Ruby McGregor-Smith Baroness on the Board completed nine years the of in May 2016. At the request to continue to Ruby agreed Directors, as a Non-Executive serve on the Board for and consequently stood Director General at the 2016 Annual re-election she was reappointed. Meeting, where member of theRuby ceased to be a CommitteesAudit and Remuneration 23 May 2016 and stood from with effect on Director down as Senior Independent that determined 9 June 2016. The Board independent for these Ruby remained few days, during which no matters arose the attention of the Senior which required term of Ruby’s Independent Director. appointment will cease on 23 May 2017 for a further and will not be renewed period. clear division of responsibilities is a There of the Chairman and between the role While that of the Chief Executive Officer. is collectively responsible the Board the for the success of the Company, to ensure Chairman manages the Board that the Company has appropriate He strategy. objectives and an effective is a Chief Executive there that ensures Officer with a team to implement the in procedures are strategy and that there of performance place to inform the Board against objectives. The Chairman also the Company is operating that ensures with the principles of in accordance corporate governance. The Chairman’s other significant commitments are considers noted on page 38. The Board not a constraint on the that these are time commitment to agreed Chairman’s the Company. Patrick De Smedt was appointed as the on 9 June Senior Independent Director 2016 and acts as an alternative channel He of communication for shareholders. for the also acts as a sounding board Chairman and serves as an intermediary for other Directors. Steve Ingham, the Chief Executive responsibility for the has overall Officer, day-to-day management of the Group’s operations. He develops the vision review, and strategy for the Board’s approved implements the Board’s strategy and chairs the Executive as Committee (known within the Group which executes the “Executive Board”) the delivery of the annual operating

time of his appointment as Chairman. David Lowden was independent at the In addition, the Board determined that In addition, the Board and Danuta Gray were independent. and Danuta Gray were each of Simon Boddie, Patrick De Smedt from her date of appointment onwards, her date of appointment onwards, from review, and in the case of Michelle Healy review, considers that during the year under served throughout the year. The Board The Board the year. served throughout 10 October 2016. All other Directors 10 October 2016. All other Directors Executive Director of the Company on Executive Director Michelle Healy was appointed a Non- 38 to 40. these Directors can be found on pages these Directors effective operation. effective The biographies of each of Directors. has met the Code’s requirements for its requirements has met the Code’s Financial Officer and five Non-Executive Company. The Board is satisfied that it The Board Company. the Chief the Chief Executive Officer, shareholders for the success of the shareholders comprised the Chairman, the Board collectively responsible to the Company’s to the Company’s collectively responsible As at the end of the year under review be assessed and managed. The Board is be assessed and managed. The Board Composition of the Board effective controls which enables risk to controls effective within a framework of prudent and entrepreneurial leadership of the Group leadership of the Group entrepreneurial The Board’s role is to provide is to provide role The Board’s Association. England and Wales and in its Articles of England and Wales and duties set out in relevant laws of and duties set out in relevant Group’s business and has the powers Group’s of the Code. for the overall conduct of the responsible how we have applied the main principles plc is the body of PageGroup The Board Report on pages 73 to 75, we describe The Board and its operation on pages 53 to 72 and the Directors’ on pages 53 to 72 and the Directors’ 36, the Directors’ Remuneration Report Remuneration 36, the Directors’ with the Strategic Report on pages 1 towith the Strategic Report Corporate Governance section, together FRC website (www.frc.org.uk). In this FRC website (www.frc.org.uk). The Code is publicly available on theThe Code is publicly Governance 2014 (the “Code”). Code 2016 and to the date of this document,2016 and to the date with thethe Company has complied of the UK Corporate provisions Corporate Governance Code 31 DecemberDuring the year ended Compliance with the UK with the UK Compliance Corporate Governance Report Corporate Corporate Governance Report

consist of meetings with senior executives, Details of the composition and activities Asia Pacific and Latin America, Middle East site visits, attending internal conferences of each Committee can be found in the and Africa. Each regional board usually and consultant shadowing to understand respective reports of each Committee: meets at least four times a year. the day-to-day activities of a recruitment Audit Committee Report on pages 48 and consultant. In addition, information is 49; the Nomination Committee Report on Board and Committee provided on the Company’s services, page 46; and the Directors’ Remuneration Group structure, Board arrangements, Report on page 60. Attendance financial and environmental, social and The table below sets out the number of Each Committee has clear terms of governance information, major competitors meetings of the Board held during the reference, copies of which can be and major risks. year and individual attendance by the found on the Company’s website Directors at these meetings, demonstrating Directors update and refresh their www.page.com. Each Committee also commitment to their role as Directors of knowledge and familiarity with the Group reviews its effectiveness and makes the Company. Attendance by the relevant through site visits, participation at meetings recommendations to the Board of any members of each Committee can be found with and receiving presentations from appropriate changes as and when on page 48 (Audit Committee), page 46 senior management. This is in addition required. The Chairman of each of the (Nomination Committee) and page 60 to the access that every Director has to Board Committees will be available to (Remuneration Committee). The Board the Company Secretary. The Company answer shareholders’ questions at the met eight times during the year. During Secretary is responsible to the Board forthcoming Annual General Meeting. the year under review the Non-Executive for ensuring that Board procedures are The Company Secretary acts as secretary Directors met on several occasions without complied with as well as advising the to each of these Committees and minutes the Executive Directors being present. The Board on new legislation and corporate of meetings are circulated to all Committee Non-Executive Directors also met without governance matters. Board Committees members and to all members of the Board the presence of the Chairman. and Directors are also given access to unless it would be inappropriate to do so. independent professional advice at the Succession Planning Group’s expense if the Directors deem it The Group also has an Executive Board necessary in order for them to carry out which is chaired by the Chief Executive Executive development and succession their responsibilities. Officer. It comprises the Chief Financial planning discussions are held each Officer and other senior executives, year. These discussions focus on the For each Board and Committee meeting biographies for whom can be found on development and succession of the Directors receive a pack of relevant page 41. The Executive Board usually Executive Directors, Executive Board information on the matters to be discussed. meets four times a year and is responsible members and other senior managers in the The Board uses a third party board for assisting the Chief Executive Officer Group with the aim of ensuring that existing portal to distribute information quickly in the performance of his duties. senior executives are being developed and securely. The Chief Executive Officer These include the development and and that there is a pipeline of talented presents a comprehensive update on implementation of strategy, operational senior individuals within the business. the business issues across the Group plans, policies, procedures and budgets. Development and succession planning is a to the Board and the Chief Financial These activities are performed at a regional critical part of the Chief Executive Officer’s Officer presents a detailed analysis of the level by regional boards for each of the UK performance objectives for annual bonus financial performance. The Board also and North America, Continental Europe, and long-term remuneration. receives at each Board Meeting an Investor Relations Report, including any feedback from investors and Investor Roadshows. Regional Managing Directors and other Director No. of meetings senior managers also attend relevant parts Held Attended of Board meetings and the Board Strategy Day in order to make presentations on their David Lowden 8 8 areas of responsibility. Simon Boddie 8 8 Board Committees Patrick De Smedt 8 8 The Board has three principal Board Danuta Gray 8 8 Committees, each of which regularly Michelle Healy1 8 1 reports to the Board: the Audit Committee, Nomination Committee and Remuneration Steve Ingham 8 8 Committee. The Audit and Remuneration Baroness Ruby McGregor-Smith2 8 6 Committees are comprised solely of independent Non-Executive Directors. Kelvin Stagg 8 8

The Nomination Committee is comprised Notes: of all Non-Executive Directors and is 1. Michelle Healy was appointed as a Director of the Company on 10 October 2016 so was eligible to attend only chaired by the Chairman of the Board one Board meeting. who was independent on appointment. 2. Baroness Ruby McGregor-Smith was unable to attend the Board meetings held in August and December due to prior engagements.

43 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 44 Annual Report 2016 PageGroup Focus on overseeing theFocus on overseeing development of the senior the support ofleadership team, with HR Director the new Group

Internal Control and Risk Management with the Code, the In accordance for the overall responsibility has Board system of of the Group’s effectiveness internal and risk management. control by the established The procedures have been designed and Board implemented to meet the particular and the risks Group of the requirements to which it is exposed. an provide also These procedures for identifying, ongoing process evaluating and managing principal risks. The system of internal includes control financial, compliance and operational designed to meet which are controls, particular needs. These the Group’s assets, Group aim to safeguard controls accounting records that proper ensure maintained, that the financial are information used within the business and and to support for publication is reliable the successful delivery of the Group’s Strategic Plan. Any system of internal reasonable, can only provide control but not absolute, assurance against material misstatement or loss. In practice • review Board It is envisaged that the on the next year will follow up exercise to ensure the 2016 review, themes from is measured. progress that year-on-year Re-election of Directors Articles of Association The Company’s must retire that each Director provide years. The Code every three office from all Directors goes beyond this, requiring at each and stand for re-election to retire Annual General Meeting. The Company complies with the Code requirement. Ruby except Baroness All Directors, and Michelle Healy, McGregor-Smith will submit themselves for re-election at the forthcoming Annual General Ruby McGregor- Meeting. Baroness the Board Smith will step down from who on 23 May 2017. Michelle Healy, after the was appointed a Director last Annual General Meeting Company’s with the Company’s will, in accordance Articles of Association, stand for election at the Annual General Meeting. Continue to focus on key strategic issues and investments Focus on future Board composition Board Focus on future priorities, taking into account Non- of current the likely tenure Executive Directors Continue enhancing the understanding of PageGroup site visits and by engaging through with management outside of Board meetings Assess the quality of information particularly to the Board, provided on strategic initiatives The adequacy of succession plans for members of top management the Board and the level of exposure has to management in various The considered. settings were oversight of the processes Board’s for managing, developing and internalretaining talent was also considered. The Board’s understanding of the The Board’s views of key stakeholders and the markets in which the Group operates. The management and focus of as well as the meetings Board to quality of information provided and its Committee’s. the Board oversight of strategy The Board’s and its implementation as well as views as to the main the Directors’ strategic issues facing the Group. focus on risk as well The Board’s oversight of culture as the Board’s the and behaviours throughout organisation. The composition of the Board Board The composition of the and whether changes could to the profile be considered in the context of of the Board strategic goals. PageGroup’s

Chairman. Interviews were conducted Interviews were Chairman. two by Board with members of the Lintstock to from representatives raised in theexpand upon the issues of all with anonymity questionnaires, throughout being ensured respondents the to promote in order the process of views. open and frank exchange a produced Lintstock subsequently of covering the following areas report review: • • • • • was discussed The output of the review and its Standing by the Board Committees and amongst other things to: agreed the Directors • • • • •

Further investigate the strategic investment opportunities in key markets which will deliver competitive advantage. With the recent Board changes, With Board the recent ongoing Board’s the review of its composition, improvement and practices and processes; Continue to build the bench part of the ongoing as strength succession planning process;

of the Board, its Committees, and the of the Board, survey addressing the performance survey addressing requested to complete an online requested PageGroup. All Board members were members were All Board PageGroup. to the specific circumstances of to the specific circumstances evaluation, to tailor survey content Chairman to set the context for the with the Company Secretary and with the Company Secretary The review involved Lintstock engaging The review connection with the Group. of this service, Lintstock has no other Chairman. Apart from the provision the provision Chairman. Apart from Board Standing Committees and the Board its performance, as well as that of the Limited to undertake an evaluation of In 2016 the Board engaged Lintstock In 2016 the Board and were dealt with accordingly. dealt with accordingly. and were the Board and its relevant Committees and its relevant the Board These action points were reviewed by reviewed These action points were attention during 2016 as follows: • in an action plan of matters for further The 2015 internal evaluation resulted Remuneration Committees. • and each of the Audit, Nomination and performance reviews) of the Board of the Board performance reviews) • advisory firm that specialises in Board advisory firm that specialises in Board undertaken by Lintstock Limited (an an externally facilitated evaluation was Code, during the year under review Code, during the year under review Directors. In accordance with the In accordance Directors. page 20. of its Committees and its individual page 46 and the Strategic Report onpage 46 and the Strategic evaluation of its own performance, that in the Nomination Committee Report onin the Nomination Committee a formal and rigorous undertakes Board and the Group as a whole can be found as a whole can and the Group Evaluation Performance In line with the Code, each year the policy on diversity both at Board level at Board policy on diversity both as a whole. Information on the Board’s on the Board’s as a whole. Information basis succession planning for the Board for the Board basis succession planning Directors and considers on a regular and considers on a regular Directors of experience of the Non-Executive also considers the breadth and depth and also considers the breadth In addition, the Nomination CommitteeIn addition, Corporate Governance Report

the Board delegates the implementation business has adhered to the system also available on the Company’s website of the Board’s policy on risks and control of internal control during the period, www.page.com. The website contains to executive management and this is including compliance with Group up-to-date information on the Group’s monitored by an Internal Audit function policies. The statement also requires activities, published financial results and the which reports back to the Board through the reporting of any significant control presentations used for briefings and investor the Audit Committee. issues that have emerged, including meetings held during the year. These are suspected or reported frauds, so available to download. The key elements of our system of internal that areas of Group concern can control are as follows: The Annual General Meeting is an additional be identified and investigated as opportunity for all Board members to meet • Group Organisation – The Board required. These confirmations and with shareholders and investors and give of Directors meets eight times a year, supporting controls self-assessment them the opportunity to ask questions. focusing both on strategic issues and questionnaires are reviewed by the Final voting results are published through a operational and financial performance. Internal Audit function and a summary Regulatory Information Service and on the There is also a defined policy on of findings is provided to the Audit Company’s website following the Meeting. matters reserved strictly for the Board. Committee for review. The Regional Managing Director, supported by a Regional Finance In accordance with the requirements of Conflicts Director, of each of our four regions the Code and the recommendations of The Company has implemented robust is accountable for establishing and the FRC’s Guidance on Risk Management procedures in line with the Companies monitoring internal controls within our and Related Financial and Business Act 2006, requiring Directors to seek respective regions. Reporting, the Board has reviewed and agreed its approach to risk and its risk appropriate authorisation from the Board • Annual Business Plan – The Board appetite when considering its strategy prior to entering into any outside business reviews the Group’s strategy and and the management of its risks. It has interests which have, or could have, a approves an annual Group budget. also considered its longer-term viability. direct or indirect interest that conflicts, or Performance is then monitored by Details on the Board’s risk appetite and its may conflict, with the Group’s interests. the Board through the review of assessment of its longer-term viability can These procedures have operated effectively monthly reports showing comparisons be found in the Strategic Report on pages throughout the year under review. The of results against budget, quarterly 26 and 30. Further, the Board, with the Nomination Committee is responsible for forecasts and the prior year, with assistance of the Audit Committee, has reviewing possible conflicts of interest. It explanations provided for significant carried out a review of the effectiveness of makes recommendations to the Board as variances. the Group’s risk management and internal to whether a conflict should be authorised • Policies and Procedures – Policies control systems, including a review of the and the terms and conditions on which any and procedures are documented Internal Audit activities and the financial, such authorisation should be given by the over both financial controls and non- operational and compliance controls for the Board. Only Directors without an interest in quantifiable areas such as the Group’s period from 1 January 2016 to the date of the matter being considered will be involved whistleblowing policy and its policy this Annual Report. No significant failings or in the decision and each Director must relating to anti-bribery and corruption, weaknesses were identified. A confirmation act in a way they consider, in good faith, gifts and hospitality. of any necessary actions is, therefore, not will promote the success of the Group. • Risk Management – The Board has provided. However, had there been any All Directors are aware of their continuing established a framework for identifying such failings or weaknesses the Board obligation to report any new interests, or and managing risk, both at a strategic confirms that necessary actions would have changes in existing interests, that might and operational level. An overview of been taken to remedy them. amount to a possible conflict of interest in this framework and a summary of the order that these may be considered by the principal risks identified, together with Relations with Shareholders Board and appropriate authorisation given. mitigating actions, can be found in the Strategic Report on pages 1 to 36. Communications with shareholders are given a high priority. The majority of contact • Internal Audit – The Group’s Internal between the Board and shareholders is Audit function examines business David Lowden through the Chief Executive Officer and process controls throughout the Chairman the Chief Financial Officer. They make Group on a risk basis and reports the themselves available, where possible, to 7 March 2017 findings to the Executive Board and meet with shareholders and analysts at Audit Committee. Agreed actions are their request. During 2016 the Executive monitored and reported to the Directors visited eight cities on roadshows Audit Committee. across the United Kingdom, Europe and • Confirmations from Executive North America. They also held investor Management – The Managing conferences and equity sales teams’ Director and Finance Director of our briefings, as well as over 147 investor operations in each country formally meetings. The Annual Report and certify twice a year whether the Accounts is sent to all shareholders and is

45 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 46

1 3 5 5 5 5 Attended Annual Report 2016 PageGroup 5 5 No. of meetings 5 5 5 5 Held 2 1 Assess and nominate members to the Board; members to the Board; Assess and nominate its and skills and experience on the Board of character, Maintain the right mix Committees; development and succession plans for on to the Board Make recommendations management; and senior members of the Board and terms of appointment for Directors; job descriptions and written Approve their taking into account of Non-Executive Directors, Review the independence other directorships.  Michelle Healy was appointed to the Committee on 10 October 2016 so was eligible to attend only one Nomination Committee meeting. Director Baroness Ruby McGregor-Smith Baroness David Lowden Simon Boddie Patrick De Smedt Danuta Gray Michelle Healy  Bar prior engagements.

Notes: 1. 2. wasunabletoattendtwomeetingsoftheNominationCommitteedue oness RubyMcGregor-Smith Activities During the Year During 2016 the Committee met on five occasions. Details of the members’ as follows: attendance at meetings of the Committee are • • • • • for appointing Directors. procedures The Committee follows formal and transparent Responsibilities to: Committee are of the The key responsibilities independent executive by an for new non-executive directors It is assisted in its search With the Committee selects the executive search each new search company. search for the assignment. and relevant company which it considers the most appropriate companies have no connection with the Company other These executive search services. With of the search assignment a detailed candidate each than the provision compiled and discussed by the Committee, taking into consideration the is profile of members and the requirements Board balance of skills and experience of existing by the recommended is profile Once finalised the strategy. the Company and its future for its approval. Committee to the Board is undertaken. based on that profile and selection process a search If approved, identified and selected on merit against objective criteria and with Candidates are shortlist of A including gender. to the benefits of diversity on the Board, due regard the Chief Executive of the Board, candidates is then interviewed by the Chairman of appointmentrecommendation a Thereafter Officer and members of the Committee. is made to the Board. level and at every other both at Board Geographic and gender diversity is important to seek diversity of policy the Committee’s remains level in the business. It therefore a talented to create geographic experience and gender in order experience, capability, of diversity below work in respect Details on the Company’s high-performing Board. can be found in the Strategic Report on page 20. level Board

Committee to the Board. the recommendations made by the the recommendations challenge, questioning and debate of arrangement fosters appropriate arrangement fosters appropriate appropriate and necessary. This and necessary. appropriate attend meetings by invitation when Director and externalDirector advisers, may Officer, the Group Human Resources Human Resources the Group Officer, individuals, such as the Chief Executive entitled to attend meetings. Other Only members of the Committee are Only members of the Committee are can be found on page 38. Lowden’s other significant commitments Lowden’s throughout the year. Details of David the year. throughout Company. All other members served Company. her appointment as a Director of the her appointment as a Director the Committee on 10 October 2016 on Michelle Healy became a member of and Baroness Ruby McGregor-Smith. Ruby McGregor-Smith. and Baroness Smedt, Danuta Gray, Michelle Healy Smedt, Danuta Gray, Committee, Simon Boddie, Patrick De Lowden, who was Chairman of the members of the Committee were David members of the Committee were both now and for the future. the During the year under review executive Board leadership it requires, leadership it requires, executive Board Membership Company has the executive and non- responsible for ensuring that the responsible The Nomination Committee is Purpose Committee Chairman David Lowden, Nomination Committee Report Committee Nomination Nomination Committee Report

The Committee continues to focus on from 23 May 2016. She also ceased to The activities of the Committee were succession planning both for senior be the Senior Independent Director from reviewed as part of the annual Board management and the Board. The 9 June 2016 when Patrick De Smedt was evaluation process. During the year under Committee undertook the selection of a appointed in her stead. At the Annual review the external evaluation process was new Non-Executive Director which resulted General Meeting of the Company held in undertaken independently by Lintstock in the appointment of Michelle Healy on June 2016, Baroness Ruby McGregor- Limited. Details of the evaluation process 10 October 2016. The independent Smith was reappointed as a Director of the can be found in the Corporate Governance executive search agency, The Zygos Company for a further year. Report on page 44. Partnership, were engaged for this The letter of appointment for Danuta Gray appointment. reached the end of its initial three-year term Plan for 2017 The Committee also considered the in December 2016 and the Committee In 2017 the Committee will continue to extension of the term of appointment recommended to and the Board approved review the size of the Board, its mix of skills for each of Baroness Ruby McGregor- its renewal for a further three-year period. and experience, and succession plans Smith and Danuta Gray. Neither Ruby nor The Committee also considered the for both Executive and Non-Executive Danuta took part in discussions about the pipeline of talent for the Executive Board Directors. extension of their own term. to ensure there is sufficient bench strength Baroness Ruby McGregor-Smith to run key parts of PageGroup. Committee completed nine years as a Non-Executive members meet Executive Committee Director on 23 May 2016. Due to the members, and executives at the level Board changes which took place in 2015 below the Executive Board, through and Ruby’s extensive experience, gained presentations at the Company’s annual through the different parts of the economic Strategy Day and at Board Meetings. The cycle, the Directors requested Ruby to management and development of the continue to serve on the Board. Ruby talent pipeline is left to the Chief Executive ceased to be a member of the Audit and Officer so that the independence of the Remuneration Committees with effect Committee and its members is maintained.

47 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 48

1 3 7 7 7 Attended Annual Report 2016 PageGroup 7 7 No. of meetings 7 7 7 Held 2 1 Baroness Ruby McGregor-Smith ceased to be a member of the Audit Committee on 23 May 2016 so was ceased to be a member Ruby McGregor-Smith Baroness Audit Committee meetings. only eligible to attend three Michelle Healy was appointed to the Committee on 10 October 2016 so was eligible to attend only oneMichelle Healy was appointed to the Committee on 10 Audit Committee meeting. Director Baroness Ruby McGregor-Smith Baroness Simon Boddie Patrick De Smedt Danuta Gray Michelle Healy

2. of the main activities of the CommitteeSet out in the table on page 49 is a summary to the Board. reported by the Committee are during 2016. Key issues covered Financial Reporting aims to the Board parties, and other interested reporting to shareholders In its financial position and balanced and understandable assessment of the Group’s a fair, present the Company’s to assess necessary information for shareholders providing prospects, business model, strategy and performance. The Company has an established process balanced and it is fair, the Annual Report and Accounts to ensure for reviewing understanding It included a thorough understandable. This was used again this year. to process for the Annual Report and Accounts; a requirements of the regulatory of the data and language; and a consistency and clarity determine the accuracy, parties including external advisers. A checklist of by all appropriate detailed review and was completed to document the process all the elements of the process to provide management structure the Group’s implemented through cascaded sign-off undertaken by had been procedures assurance to the Committee that the appropriate companies. all Group (which it undertook in on tax risks disclosures thematic review As part of the FRC’s 2015 Annual the Company’s of 10% of FTSE 350 companies) it reviewed respect of the relationship recording to the transparent Report and Accounts in relation tax The FRC gave the Company’s between tax charges and accounting profit. a favourable review. disclosures 2016 Annual Report and Accounts. the Company’s The Committee has reviewed incorporated into the Annual Report and Accounts comments which were It provided that, in its opinion, the Annual Report and Accounts and has advised the Board the information and provides balanced and understandable taken as a whole is fair, performance, business model and strategy. necessary to assess the Company’s Notes: 1. the Chief Financial Officer, the Company Secretary, the Director of Internal Audit and the Director Secretary, the Company Officer, the Chief Financial and invited to attend meetings as appropriate regularly the externalaudit partner are can invite others to attend as appropriate. The Committee necessary. and Chairman of the Committee has the current is satisfied that the The Board of the by the provisions required experience financial and accounting relevant range of business of the Committee have a sufficiently wide Code. Other members role. The fulfil its such that the Committee can effectively experience and expertise their shown in of the Committee members are qualifications and experience relevant 38 to 40. The Committee met with the externalbiographies on pages auditor during an opportunity for to provide management in order of the year without the presence of Internal Audit and the external The Director confidential discussion. auditor have the year. of the Committee throughout access to the Chairman direct the Committee met on seven occasions. Committee During the year under review reporting calendar and set to coincide with key dates of the financial meetings are to undertake its resources with sufficient the audit cycle. The Committee is provided as at the meetings of the Committee are duties. Details of the members’ attendance follows:-

the Board, the Chief Executive Officer, the Chief Executive Officer, the Board, individuals, such as the Chairman of entitled to attend meetings. Other Only members of the Committee are Only members of the Committee are reporting and regulation. and regulation. reporting auditor, on developments in corporate auditor, provided by the Company’s external by the Company’s provided and ongoing basis through updates, and ongoing basis through the Committee takes place on a regular the Committee takes place on a regular the Company. Training of all members of Training the Company. strategy as well as the principal risks of the Company’s business model and the Company’s was also provided with an overview of was also provided as a Director of the Company. Michelle of the Company. as a Director the expected time commitment required the expected time commitment required Terms of Reference and an indication of of Reference Terms provided with a copy of the Committee’s with a copy of the Committee’s provided Michelle was, amongst other things, of the director induction programme induction programme of the director as a Director of the Company. As part of the Company. as a Director on 10 October 2016 on her appointment appointed a member of the Committee a Non-Executive Director. Michelle was a Non-Executive Director. when she completed her ninth year as of the Committee on 23 May 2016 Healy. Ruby ceased to be a member Healy. Ruby McGregor-Smith and Michelle Ruby McGregor-Smith throughout the year except Baroness the year except Baroness throughout Smith and Michelle Healy. All served Smith and Michelle Healy. Danuta Gray, Baroness Ruby McGregor- Baroness Danuta Gray, of the Committee, Patrick De Smedt, Simon Boddie, who was the Chairman members of the Committee were members of the Committee were management systems are in place management systems are the During the year under review necessary internal and risk controls Membership the responsibility for ensuring that the the responsibility reporting of performance. It also has reporting financial statements and external and effective. of the integrity of the Company’s of the integrity of the Company’s The Audit Committee is the guardian The Audit Committee is the guardian Purpose Committee Chairman Simon Boddie, Audit Committee Report Committee Audit Audit Committee Report

Main Activities of the Audit Committee During 2016

January April October Review of Financial Statements Review of Financial Statements Review of Financial Statements • Quarter 4 trading update • Quarter 1 trading update • Quarter 3 trading update

External Auditor March July • Approval of the external auditor’s fees Review of Financial Statements Review of Financial Statements • Draft preliminary • Quarter 2 trading update announcement and 2015 December Annual Report and Accounts • External auditor’s year-end August Review of Financial Statements report • Review of 2016 Annual Report • Going concern analysis Review of Financial Statements and Accounts process • Viability Statement • Draft interim report • Viability Statement review • Review of non-audit fees Risk and Internal Control Risk and Internal Control • Fair, balanced and • Internal audit update • Internal audit update understandable review • Risk management update • Approval of internal audit plan • Management letter of for 2017 External Auditor representation • Confirmation of principal risks • External auditor’s 2015 • Review of the approach for the Risk and Internal Control management letter • Ratification of principal risks Viability Statement in the 2016 • External auditor’s interim Annual Report and Accounts • Internal audit update review External Auditor Compliance • Assessment of risk of material misstatement • Updated assessment of risk of • Meeting with external auditor material misstatement without Executive Directors • Scope of the full year audit • Interim review management • Updated scope of the full year External Auditor letter of representation audit • External auditor satisfaction • Review of the external Compliance survey auditor’s fee • Year-end legislative and • Reappointment of external • Review of external auditor procedural matters auditor independence and objectivity Regulatory update Treasury Policy • Policy on the provision of non- audit services • Implications of IFRS 15 • Review and update • External auditor partner and IFRS 16 rotation

Compliance • Meeting with external auditor without Executive Directors

49 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 50

Annual Report 2016 PageGroup The Committee concluded that the approach to revenue recognition was recognition to revenue The Committee concluded that the approach The Committee reviews this area on a six monthly basis to ensure transfer pricing provisions transfer pricing provisions ensure on a six monthly basis to this area The Committee reviews Transfer pricing provisions with particular reference to their recoverability and adequacy. With and adequacy. to their recoverability with particular reference pricing provisions Transfer How the Committee addressed the issue addressed How the Committee c.75% of its operations in overseas territories, the Group is subject to significant international the Group tax legislationc.75% of its operations in overseas territories, pricing provision. which impacts the determination of the transfer Actions taken: appropriate. remain held assessment of the provisions with management’s Conclusions and rationale: The Committee agreed pricing. transfer around Context: consistent with the policies and that any judgments made were appropriate made were consistent with the policies and that any judgments Revenue recognition for permanent and temporary placements, with particular focus on period and temporary placements, with particular for permanent Context: Revenue recognition accounting policies. Group with IFRS and in accordance accounting treatment and appropriate end cut off on assignments (income recognised both retained permanent placements is derived from Revenue from recognised at the date an assignments (income non-retained completion of defined stages of work) and temporary been determined). Revenue from a start date has by a candidate and where is accepted offer including the salary cost of of temporary staff, amounts billed for the services placements, which represents when the service has been provided. is recognised these staff, with management, the internal recognition and discusses revenue Actions taken: The Committee reviews audit team and the external auditor. Conclusions and rationale:

Significant issue Transfer Pricing Transfer Provision Revenue Recognition standards and the relevant requirements around financial and governance reporting. Details on accounting policies can be foundreporting. Details on accounting financial and governance around requirements and the relevant standards as follows: judgement that may materially impact reported results as well as the clarity of disclosures, compliance with financial reporting compliance with financial as well as the clarity of disclosures, results materially impact reported judgement that may and practices adopted by the Group and any significant areas of and any significant areas by the Group and practices adopted in particular on key accounting policies The Committee focuses Significant Accounting Issues and Areas of Judgement Issues and Areas Accounting Significant The significant issues and areas of judgement considered by the Committee during the year and how these were addressed were were addressed the year and how these were by the Committee during of judgement considered and areas The significant issues on pages 86 to 90. estimates made by management in each of these areas. The Committee reviewed with Ernst & Young LLP, the Company’s external auditor, the methodology used to test the assumptions and the external auditor, the Company’s LLP, with ErnstThe Committee reviewed & Young Audit Committee Report

External Auditor’s Independence the safeguards in place to deal with the • Robustness and perceptiveness of independence threats from such work the external auditor in handling key and Effectiveness (as detailed in Note 3 to the financial accounting and audit judgements; The Committee monitors the objectivity, statements) and concluded that Ernst & • Content of reports provided to the independence and effectiveness of the Young LLP remained independent. Committee by the external auditor external auditor. The Company is mindful of The Committee considers that in 2016 it including reporting on internal control; the provisions of the Code, best practice, has complied with the Competition and and the Competition and Market Authority Audit Market Authority Audit Order 2014. • Feedback from management which Order 2014 and EU audit legislation as is ascertained from staff surveys Further, during the year under review, regards audit firm rotation and the provision completed by staff involved in the the Committee discussed and agreed of non-audit services. The Committee audit process. considered both matters in each of 2014, the scope of the year-end audit and 2015 and 2016. approved the audit fee. Details of the fees Following a full evaluation of the external paid to Ernst & Young LLP during 2016 auditor at the end of the 2016 audit, the Ernst & Young LLP, the Company’s current in respect of non-audit services are shown Committee recommended to the Board the external auditor, was appointed in 2011 on page 93. reappointment of Ernst & Young LLP as following a tender process. In accordance Auditor of the Company at the forthcoming The objectivity and independence of the with audit regulation, Ernst & Young LLP Annual General Meeting. operate a policy of rotating the Audit external auditor is safeguarded by: Partner every five years. The Audit Partner • Obtaining assurances from the Internal Control and who had served as the Company’s Audit external auditor that adequate policies Partner since 2011 stepped down after the and procedures exist within its firm Risk Management completion of the 2015 year end audit and to ensure that the firm and staff are The Board’s responsibilities for, and a new Audit Partner, Bob Forsyth, was independent of the Group by reason their report on, risk management and appointed in 2016. of family, finance, employment, the systems of internal control and their investment and business relationship The Committee approved and effectiveness are set out in the Corporate (other than in the normal course of implemented in 2014 a policy for the tender Governance Report on pages 44 and 45. business); of external audit services. This policy On behalf of the Board the Committee provides that the Company will retender • Enforcing a policy of reviewing all reviewed the Group’s risk assessment the external audit at least every ten years cases where it is proposed that a procedures for identifying its principal and will change the external auditor at former employee of the external risks and its longer-term viability. The least every 20 years. Thus, the Company auditor be employed by the Group in risk assessment takes account of all expects to tender the external audit in a senior management position or at risks, including environmental, social respect of the 2021 year end during the Board level; and governance matters, inherent in the course of 2020, but this position is subject • Monitoring the external auditor’s strategy of the business and its plan. These to annual review by the Audit Committee. compliance with applicable UK ethical procedures include regular reports to the guidance on the rotation of audit The Committee also reviewed its policy on Committee from the Director of Internal partners; and the use of the external auditor for non-audit Audit on the performance of the system of services in 2014, 2015 and again in 2016 • Enforcing a policy concerning the internal control and on its effectiveness in and determined that the policy should provision of non-audit services by the managing material risks and identifying any remain unchanged. The policy prohibits external auditor. control failings or weaknesses. the external auditor from certain services The Committee considers the annual The Committee also reviews the Group’s which could give rise to independence appointment of the external auditor by risk management process annually, with threats such as computing tax provisions, shareholders at the Annual General the outcome being reported to the Board. payroll services, acting as an advocate, Meeting to be a fundamental safeguard. This, together with regular updates to internal audit and system design. In line the Board on material risks, allows the with new ethical regulations for external The performance and effectiveness of Board to make the assessment on the auditors, the Audit Committee has agreed the external auditor is also reviewed systems of internal control and the residual a more restrictive policy from 1 January annually by the Committee. This covers risk for the purpose of making its public 2017 which prohibits the external auditor qualification, expertise, resources and statement. The risk process, together with from providing a more extensive range reappointment as well as assurance that the key risks and their indicators, have of services which includes, inter alia, tax there are no issues which could adversely been identified and mitigating actions are advice, tax compliance services and global affect the external auditor’s independence described in the Strategic Report on pages mobility support. Arrangements were made and objectivity taking into account the 25 to 30. Key performance indicators and before the end of 2016 for all such existing relevant standards. In this respect the management incentives are highlighted for services provided by Ernst & Young LLP to Committee reviewed the: the main financial, strategic and people be transferred to other service providers. • Robustness of the external auditor’s risks in the Strategic Report on pages In respect of 2016 the level of non-audit plan and its identification of key risks; 15 to 17. services relative to the global audit fee • Fulfilment of the agreed external audit Where weaknesses have been identified was 35%. The Audit Committee reviewed plan and any variations from the plan; in the internal control system for the

51 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 52 Annual Report 2016 PageGroup

about possible improprieties in financial improprieties about possible ensuring or other matters and reporting investigatedthat these concerns are This is and escalated as appropriate. by the Internal in all regions promoted by an externalAudit function, is run third to all employeesparty and is available no reportable were There in the Group. during reported whistleblowing incidents the year under review. Simon Boddie Chairman of the Audit Committee 2017 7 March

the evaluation process can be found in process the evaluation the Corporate Governance Report on page 44. Whistleblowing of the with the provisions In accordance for Code, the Committee is responsible the arrangements whereby reviewing in confidence, raise concerns may, staff Anti-Bribery and Corruption and Business Ethics The Company has a Code of Conduct which can be found on its website This sets out the www.page.com. of behaviour by which all standards bound and are employees of the Group commitment is based on the Company’s fairly and to acting professionally, is A gifts and entertainments register transparency. maintained to ensure a good understanding of the issue and reported. were no breaches Fraud the procedures The Committee reviews of and detection for the prevention cases Suspected fraud in the Group. Chief to the of fraud must be reported of the Director Financial Officer and Internal and investigated by Audit and Internaloperational management Audit. The outcome of any investigation to the Committee. A register is reported of all suspected fraudulent activity and the outcome of any investigation is to the Committee kept and is circulated basis. During the year in on a regular question, no frauds of a material nature reported. were with integrity. tolerance maintains a zero The Group corruption. It has an against approach established anti-bribery and corruption which includes guidance on policy, of gifts and the giving and receiving This policy applies throughout hospitality. The policy and the training the Group. and reviewed of employees is regularly The training is updated when required. undertaken by all managers and all staff by means the Group across in risk areas of standard and presentation of review training material. Group-prepared of compliance with the policy A review The review is undertaken annually. was undertaken in 2016 showed there

Executive Board and the Committee. Executive Board the Committee and reported to the the Committee and reported plan are agreed with the Chairman of with agreed plan are Audit. All changes to the Internal Audit necessary, to the activity of Internal necessary, made to the risk profile and, where and, where made to the risk profile reviewed and required changes are changes are and required reviewed Committee. Risks are also regularly also regularly Committee. Risks are and are monitored and reported to the and reported monitored and are are agreed with the Executive Board Executive Board with the agreed are effectiveness of the control environment environment of the control effectiveness Details and the outcome of party. third Actions to maintain and improve the Actions to maintain and improve was undertaken by an externalprocess related matters. related The 2016 evaluation under review. governance, environmental and socialgovernance, environmental performed during the year process this process, including those around including those around this process, evaluation as part of the Board reviewed level. All major risks are addressed in addressed level. All major risks are The activities of the Committee were to mitigate risks to an acceptable Committee Evaluation to assess the effectiveness of controls of controls to assess the effectiveness on a rotational risk-based approach risk-based approach on a rotational Audit Committee. Businesses are visited Audit Committee. Businesses are reported to the Executive Board and the to the Executive Board reported the findings from internal the findings from audits being agreed with the Committee annually with with agreed of work for the Internal Audit function is for frank and open dialogue. The scope Board. This ensures there is opportunity is there ensures This Board. direct access to the Committee and the access direct of the Audit Committee. He also has has a reporting line to the Chairman has a reporting Officer on a day-to-day basis, but also Audit reports to the Chief Financial Audit reports internal of Internal auditors. The Director Director of Internal of Director Audit and a team of Internal Audit function comprises a experience to this function, the Group’s experience to this function, the Group’s and depth of risk and internal control function. To ensure there is breadth is breadth there ensure function. To the effectiveness of the Internal Auditthe effectiveness material losses. and reviewed Committee monitored weaknesses that resulted in unforeseen in unforeseen weaknesses that resulted the review During the year under review there were no control failings or no control were there review Internal Audit Activities until complete. During the period underuntil complete. During in this respect are regularly monitored monitored regularly are in this respect system are put in place. Action plans put in place. Action system are level, plans to strengthen the control the control level, plans to strengthen mitigation of risks to an acceptablemitigation Directors’ Remuneration Report

The Remuneration Committee addressed the following areas in 2016: Future Directors’ Remuneration Policy and Introduction of the Executive Single Incentive Plan (‘ESIP’) PageGroup operates in a cyclical industry in which the retention and ongoing motivation of executives and management continuity is critical to the success of the Company. The Committee’s aim is for the Remuneration Policy to encourage long-term decision making, to avoid undue volatility in remuneration outcomes and to act as an effective retention tool in market downturns. Following a review of remuneration in 2016, the Committee determined that these goals could not be achieved successfully within the construct of the existing Policy. A new Remuneration Policy is now proposed which will simplify remuneration by combining Danuta Gray, the annual bonus and LTIP into a single scheme, the Executive Single Incentive Plan (‘ESIP’). Committee Chairman The key features of the ESIP are: • simplification – replacing the existing annual bonus and LTIP with one plan; ANNUAL STATEMENT • no change in the maximum total quantum available to executives; Dear Shareholder, • use of a single performance scorecard, with a balance of metrics, aligning reward outcomes to our Key Performance Indicators and strategy; On behalf of the Board, I am pleased to present the Directors’ Remuneration Report • significant deferral ensuring that awards drive shareholding of executives – 60% of each for the year ended 31 December 2016. award will be deferred in shares over three years; This Directors’ Remuneration Report is • continuation of the Executive shareholding requirement of two-times base salary and the split into three parts: this Statement; the introduction of a two-year holding period on vesting ESIP awards for Executives who Annual Report on Remuneration; and the have not met the requirement; new Directors’ Remuneration Policy for • both annual and longer-term (trailing) performance will be measured; Executive Directors and Non-Executive • the longer-term metrics will include both absolute and relative performance; and Directors. • simpler accounting treatment and transparent remuneration reporting disclosures. During the year, the Committee reviewed the current Directors’ Remuneration Policy With regard to the assessment of performance under the ESIP, at least 70% of any (the ‘Policy’) to ensure it reflects our pay- assessment will be linked to financial outcomes, and we will include further financial for-performance philosophy and provides goals within the personal element linked to the specific objectives of the individual where alignment to our strategy. As a result of appropriate. For the first award, the balanced scorecard will be as follows: this review, the Remuneration Committee identified a number of issues with the current Policy and has proposed to address Measure Weightings these through the introduction of a new Executive Single Incentive Plan (‘ESIP’). PBT 30 The ESIP represents a radical simplification and will replace both the current annual Annual performance Non-financial, strategic 15 bonus and Long Term Incentive Plan, with no increase in the maximum variable pay Personal performance 10 opportunity. If approved at the 2017 Annual General Meeting, the ESIP will make its first EPS growth 35 award in the 2018 financial year in respect Longer-term metrics of 2017 performance. Further information Relative Gross Profit growth 10 on the ESIP is provided below in this Annual Statement and in the Directors’ Annual performance measures will include PBT, strategic and personal performance. Annual Remuneration Policy. targets will be set for PBT. Strategic measures will focus Executives on key drivers of long- term performance. For example, these will be key milestones or projects that ensure the business is appropriately developed for the future, and are likely to be shared across both Executives. Personal measures will be tailored to each role, and cover areas such as people development, specific job related goals, and the extent to which the Executives set and drive the culture of PageGroup and have the appropriate succession plans in place for the future. Longer-term metrics will include Gross Profit growth relative to peers, and EPS growth. Targets for the trailing EPS performance metric will take account of the internal business plan and strategic goals, broker forecasts, and EPS target ranges used by other FTSE 250 companies.

53 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 54

Annual Report 2016 PageGroup

pension benefits to be reduced to align to be pension benefits are We with those of other employees. developmentsclosely monitoring market and to pension benefits with respect of policy underwill keep this aspect for any new Executive Director review appointments. Meeting, theAt the 2017 Annual General Annual Report onAnnual Statement and will be subjectRemuneration for 2017 new Directors’ to an advisory vote. The will be subject toRemuneration Policy the triennial binding shareholder vote. the triennial binding shareholder your I very much hope that we will receive support at the 2017 AGM. Danuta Gray Chairman of the Remuneration Committee 2017 7 March

Conclusion The purpose of the ESIP is to simplify and to significantly, remuneration with sustained and align remuneration balanced performance. The ESIP will incentive for our an effective provide Executive team in the next phase of and development. growth PageGroup’s some from of the desire aware are We for Executive Director shareholders Long-Term Incentives Long-Term made in 2014 awards The LTIP end of their performance the reached period on 31 December 2016. The performance metrics for these awards gross EPS, relative cumulative were peer companies, and against a profit range of strategic objectives for each Following an assessment of Director. performance against each performance metric, the Chief Executive Officer 60% of his maximum award received received and the Chief Financial Officer Further 60% of his maximum award. detail is set out on pages 63 and 64. of the maximum bonus opportunity. opportunity. of the maximum bonus a represent These bonus payments Full to last year. compared reduction detail on the annual bonus targets and the strategic objectives is set out on pages 62 and 63. Annual Bonus years, the performance As in previous of a combination criteria in 2016 were tax, and the achievement before profit total annualof strategic targets. The Chief Executivebonus payout for the at £604,828,Officer was determined bonusbeing 58.9% of the maximum Chief Financialopportunity and for the being 62.1%Officer was £302,900,

the FTSE 250 median. bring his base salary closer in line with a salary increase of 7.7% for 2017 to a salary increase the Committee decided to award Kelvin the Committee decided to award with the Directors’ Remuneration Policy, Remuneration Policy, with the Directors’ effective Chief Financial Officer. In line Chief Financial Officer. effective has developed into a well-rounded and has developed into a well-rounded accountabilities has increased and he accountabilities has increased his appointment, Kelvin’s range of his appointment, Kelvin’s a series of staged increases. Since a series of staged increases. median, with the intention to make with a base salary set below market Chief Financial Officer in June 2014 performance metrics and weightings. Stagg was appointed as PageGroup’s Committee made some amendments to salary in 2017 will be £350,000. Kelvin account of the feedback received, the account of the feedback received, base The Chief Financial Officer’s on all vesting share awards. Taking Taking awards. on all vesting share increases. Head Office percentage introduction of a holding requirement of a holding requirement introduction which is slightly below the average UK of variable remuneration, as well as the of variable remuneration, for 2017, of 2.6% an increase represents requirement to always defer a portion requirement Officer will be £601,749 in 2017. This simplification of remuneration and the simplification of The base salary for the Chief Executive supportive. Shareholders welcomed the supportive. Shareholders Base Salary proposal. In summary, feedback was In summary, proposal. adaptations being made to the originaladaptations being made constructive feedback which resulted in which resulted constructive feedback part in this consultation and provided and provided part in this consultation shareholder representatives who took representatives shareholder like to thank all the shareholders and like to thank all the shareholders Officer in 2017. The Committee wouldOfficer in 2017. The salary increase for the Chief Financial salary increase introduction of the ESIP and the base of the ESIP and the introduction shareholder representatives about the representatives shareholder We consulted with shareholders and consulted with shareholders We Shareholder consultation Shareholder Directors’ Remuneration Policy Report

PageGroup is a global business that operates in a cyclical industry in which the retention and ongoing motivation of Executives and management continuity is critical to the success of the Company. As a result, the Directors’ Remuneration Policy set out in this report has been designed to encourage long-term decision making, to avoid undue volatility in remuneration outcomes, and to act as an effective retention tool during market downturns. The Remuneration Policy set out below will take effect, subject to shareholder approval, from 8 June 2017 (the date of the Annual General Meeting). This new policy will replace the Annual Bonus and LTIP with a single plan, the Executive Single Incentive Plan (‘ESIP’). This change will not increase the maximum total quantum available to executives, and will: simplify remuneration; introduce a single balanced scorecard; incorporate deferral of a significant portion of any award; introduce post-vesting holding periods on all vesting shares for executives who have not met the shareholding requirement; maintain both annual and longer-term performance measurement; and result in simpler disclosure of remuneration outcomes. There are no other new components in the remuneration policy.

Future Policy Table for Executive Directors

Purpose and link Element to strategy Operation Maximum opportunity

Salary Attract, retain and Salary levels (and subsequent increases) are set after reviewing Salaries will not increase by (Fixed reward high calibre various factors including individual and Company performance, more than RPI +5% except pay) Executive Directors role and responsibility, internal relativities such as the increases increases in excess of this awarded to other employees and prevailing market levels for may be awarded in the case Executive Directors at companies of comparable status and of new Executive Directors market value, taking into account the total remuneration package. where it is appropriate to offer a below market salary Salaries are normally reviewed annually. initially on appointment and Salary is paid monthly and increases are generally effective from a series of staged increases, 1 January. subject to performance and experience in role, to bring to a market competitive salary. Aim for market competitive salaries. For information the 2017 CEO salary level is £601,749 and the 2017 CFO salary is £350,000 which can be increased in line with the parameters set out under the column ‘Operation’.

Benefits Attract, retain Competitive benefits including car allowance or company car Competitive benefits in line (Fixed and reward high (including running costs), private medical insurance for the with market practice. pay) calibre Executive individual and family, permanent health insurance and four times Directors salary life assurance. Provision of Provision of relocation assistance and any associated costs or opportunities for benefits (including but not limited to housing benefits, personal connecting with tax advice and school fees) upon appointment if/when applicable. clients, investors The Company may also provide tax equalisation arrangements. and staff to Membership of clubs as appropriate for the development facilitate growth of business. strategy

55 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 56 Annual Report 2016 PageGroup CEO: 25% of salary. Other Executive Directors: 20% of salary. The ESIP allows for annual of up to a maximum of awards for each375% of base salary Executive Director. Maximum opportunity targets should not incentivise excessive risk taking targets for financial and strategic yet should be stretching measures achievable, and set with reference to internal plans and external expectations

financial performance. The Committee mindful that: are • arrangements Legacy Remuneration this Directors’ In approving Policy Report, authority is given to the •

performance measures should performance measures alignment between the provide of management and those interests of shareholders of any a significant proportion incentive scheme should be linked financial performance to Group used currently PBT and EPS are key measures because they are of business performance and profitability

• • • will focus Executives Strategic measures on key drivers that underpin long-term Executive Directors may receive a defined contributiondefined a receive may Directors Executive pension benefit or cash supplement. Awards are paid in cash (40%), and deferred shares shares paid in cash (40%), and deferred are Awards tranches over a minimum(60%) which vest in equal period. three-year with performance annual awards The plan consists of and trailing long-term over both one year measured will At least 40% of any award performance periods. depend on trailing longer-term metrics. depend on trailing longer-term against a balanced Performance will be measured strategy. to support the company’s scorecard, Performance targets will be a mix of financial, which maystrategic/operational and personal targets not limited to, the following: PBT; comprise, but are people development; cost key strategic projects; vs a comparator Profit Gross management; relative EPS. and group; who A post-vesting holding period applies. Directors of requirement the shareholding have not reached to hold vested 200% of base salary will be required each tranche of the ESIP for a further two from shares purposesyears post-vesting, except for sales for the of meeting tax liabilities on vesting and exercise. will normally A minimum of 70% of the possible award be linked to financial metrics. periodDividend equivalents accrue during the vesting vest. to the extent awards released only but are will apply to the total Malus and clawback provisions portions, for cash and deferred including award, of failure misstatement of performance, substantial misconduct. and gross risk control, Operation

Attract, retain Attract, retain and fairly reward high calibre Executive Directors Rewards both Rewards short and long term performance of Aligns interests Executive Directors with shareholders Purpose and linkPurpose and to strategy

strategic goals performance measures should drive performance measures of key the achievement and reward short and long-term financial and Pension (Fixed pay) Executive Single Incentive Plan (ESIP) Element

third and subsequent awards, performance will be measured over a three-year performance period. over a three-year performance will be measured and subsequent awards, third 2018 will be based on 2017 EPS. For the second ESIP award, performance will be measured over a two-year performance period. For the performance will be measured 2018 will be based on 2017 EPS. For the second ESIP award, To avoid measuring performance over periods already known at implementation, the trailing element for the first ESIP award to be made in known at implementation, the trailing element for the first ESIP award avoid measuring performance over periods already To by the following principles: setting targets the Committee is guided choosing performance measures and choosing performance measures • Annual Remuneration Report. When is disclosed in detail in the Directors’ is disclosed in detail in the Directors’ and targets for each annual award and targets for each annual award measures and target setting Information on performance measures Choice of performance Directors’ Remuneration Policy Report

Company to honour any commitments when setting the Executive Director Executive shareholding entered into with current or former Directors remuneration policy. Remuneration levels (such as the payment of a pension or awards for all employees are set in the context requirements pursuant to the terms of the legacy share of internal relativities and market levels Shareholding requirements are operated schemes such as the Long-Term Incentive of remuneration for comparable roles. to align Executive Directors’ interests Plan and the Deferred Bonus Plan) granted Policy for Executive Directors differs from with those of shareholders. The current prior to the date that this policy takes effect. other senior executives in that Executive requirement is 200% of base salary. Details of any such payments will be set Director variable remuneration is capped, This will be achieved through the retention out in the Directors’ Annual Remuneration whereas for other senior executives it is of half of any vesting share award (net of Report as they arise. uncapped. This is in line with practice in tax) made under the legacy deferred bonus the recruitment industry where variable arrangement, and through the application Consistency with remuneration remuneration is funded from an uncapped of 2-year post-vest holding periods (net for the wider group profit pool. This arrangement provides a of tax) if the award was made under the strong incentive for employees to grow legacy LTIP or the new ESIP. The Committee reviews and considers PageGroup profit. remuneration across PageGroup

Our approach to recruitment Remuneration will be subject to the maximum levels as set out in the Directors Remuneration Policy in force at the time of appointment. As a result, the maximum level of variable remuneration is 375% of base salary under the ESIP (excluding any “buy out” payments). Individuals will participate in the ESIP up to the normal annual limit subject to: • Award levels in the year of appointment being pro-rated to reflect the proportion of the financial year worked • Performance measures and/or measurement periods may be adjusted for newly appointed Executive Directors, taking account of the timing of appointment and the individual’s role The table below sets out our approach to the treatment of outstanding awards of variable remuneration when recruiting externally or internally:

Element of remuneration External recruits Internal recruits

Treatment of May offer additional cash and/or share-based elements when considered to Any variable pay element awarded outstanding be in the best interests of the Company and, therefore, shareholders, in order in respect of the prior role may be awards to ‘buy out’ forfeited remuneration. allowed to pay out according to its of variable terms on grant. Any ‘buy-out’ payments would be based solely on remuneration lost when remuneration leaving the former employer and would be on terms that are no more favourable than the delivery mechanism (i.e. cash, shares, options) and time horizons. Where forfeited remuneration is performance related, any ‘buy-out’ payment would be subject to performance conditions determined by the Committee. The Committee may need to avail itself of the current Listing Rule 9.4.2 R to make such awards where doing so is necessary to facilitate, in exceptional circumstances, the recruitment of the relevant individual.

In addition, the structure of remuneration for a new Executive Director may differ temporarily from that in effect for other Executive Directors. The circumstances in which this may occur are as follows: • when it is appropriate to offer a below market salary initially, a series of salary increases may be given over the following few years subject to individual performance and experience in role which bring the incumbent to the determined salary level, reflective of the policy to pay market competitive salaries • the Committee may agree that the Company will meet certain costs associated with the recruitment (for example legal fees)

57 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 58

72% £1,584k rget Max 59% Ta £1,077k Annual Report 2016 PageGroup £446k 100% 41% 28% Minimum (i.e. salary, benefits and pension) (i.e. salary, remuneration plus Maximum: fixed maximum ESIP opportunity Minimum: fixed remuneration only Minimum: fixed remuneration plus 60% fixed Target: of the maximum payable under the and annual elements of the ESIP, 50% of the maximum payable under trailing elements of the longer-term the ESIP 0

500

• based on an annual salary The charts are of £601,749, for the Chief Executive Officer and £350,000 for the Chief and assume a maximum Financial Officer, ESIP opportunity of 375% and 325% of maximum salary for the Chief Executive Officer and Chief Financial respectively. Officer Illustration of the application of the application Illustration policy of our remuneration an indication ofThe chart below gives be which could the total remuneration Officer by the Chief Executive received under theand Chief Financial Officer presented: scenarios are Three policy. receivable; the minimum remuneration • • the amount receivable if they perform in if they perform the amount receivable expectations; and line with the Company’s receivable. the maximum remuneration only indicative, Note that the charts are price movement and dividend as share accruals have been excluded and assumed. performance outcomes are Assumptions for each illustrative scenario as follows: are 2000 1500 1000 Chief Financial Officer 74% 26% £3,044k rget Max 61% Ta £2,040k £787k 100% 39% Minimum adjustment of performance that payout is outcomes to ensure in the context of fair and reasonable overall performance. the Company’s the need to ensure continuity the need to ensure any claims the need to compromise may have that the Executive Director whether the Executive Director a PILON payment received of the proportion whether a greater may have vested outstanding award served had the Executive Director out his notice has whether the Executive Director handover over an orderly presided the best interests of the Company the best interests the contribution of the Executive the success of the to Director Company during their tenure 0

• • • • • • • • The extent to which any awards made to which any awards The extent to the plans prior under legacy share vest date of this policy would effective wouldupon cessation of employment with their be determined in accordance terms and the plan rules. discretion of In considering the exercise Committee will takeas set out above, the circumstances. into account all relevant may (butFactors that the Committee take into accountshall not be obliged to) limited to, thewill include, but not be following: 500 Chief Executive Officer 3500 3000 2500 2000 1500 1000

Other appropriate circumstances at circumstances Other appropriate of the Committee. the discretion The company with which the holds office Executive Director or employment ceasing to be a or member of the Group; Redundancy, retirement, injury, injury, retirement, Redundancy, ill health or death in service; disability, A transfer of employment in connection with the disposal of a business or undertaking;

Committee’s discretion. discretion. Committee’s to time pro-ration at the Remuneration to time pro-ration clawback. They may also be subject will continue to be subject to malus and at the established vesting dates and Executive Director and will normally vest Executive Director ESIP awards may be retained by the may be retained ESIP awards performance. Unvested deferred performance. Unvested deferred for example due to: of the year worked and subject to Director may be deemed a ‘good leaver’, may Director for the portion employment pro-rated In respect of the ESIP, an Executive of the ESIP, In respect for their last year of for an ESIP award dismissed for cause will not be eligible awards. deferred As a ‘good leaver’ they will be eligible An Executive Director who resigns or is who resigns An Executive Director and will forfeit any for an ESIP award • holiday. made in respect of accrued but untaken made in respect • 31 December 2013. A payment may be apply to Executive Directors in post at apply to Executive Directors • phasing and reduction of PILON will not phasing and reduction if there are alternative earnings. are if there The • period and be subject to reduction period and be subject to reduction phased over the remainder of the notice phased over the remainder to the executive. This payment can be pension that would have been payable the amount of base salary, benefits and the amount of base salary, (PILON) as a lump sum equivalent to can make a payment in lieu of notice individual on garden leave. The Company individual on garden fulfil his current duties or may place the fulfil his current may require the individual to continue to the individual to continue may require period during which time the Companyperiod during which time and pension for the duration of his noticeand pension for the duration continue to receive basic salary, benefits basic salary, continue to receive either party, an Executive Director can an Executive Director either party, appropriate. Should notice be served by Should notice be served appropriate. legal principles, including mitigation, aslegal principles, including are calculated in accordance with normal calculated in accordance are payments due to an Executive Director Executive Director payments due to an of office On termination, any compensation Policy on payment for loss on payment Policy Directors’ Remuneration Policy Report

Statement of consideration Key areas of discretion described in the “Policy on payment for loss of office” section of employment conditions Key areas of Committee discretion in the on page 58) elsewhere in the Group Remuneration Policy include (but are not limited to): – adjustments required in certain PageGroup does not consult directly with circumstances (e.g. rights issues, • the choice of financial performance employees when determining remuneration corporate restructuring and special measures in variable remuneration and policy for Executive Directors. However, dividends) the choice of performance targets for increases in pay across the senior those measures – the ability to adjust existing management population and the wider performance conditions for • the treatment of leavers in the ESIP workforce are taken into account when exceptional events so that they (as described in the “Policy on setting pay levels for Executive Directors. can still fulfil their original purpose payment for loss of office” section (subject to the amended condition on page 58) Statement of consideration of not being materially less challenging) • certain discretions as set out in the shareholder views ESIP plan rules such as: External Non-Executive Director The Committee considers shareholder – the timing of grant of award and/or feedback received in relation to the AGM payment positions each year at its first meeting following – the size of an award and/or a Subject to Board approval, Executive the AGM. The Remuneration Committee payment (subject to the maximums Directors are permitted to take on non- Chairman will seek to inform major set out in the Future Policy Table for executive positions with other companies. shareholders of any material changes to Executive Directors) Executive Directors are permitted to retain the Remuneration Policy in advance and their fees in respect of such positions. – determination of a good leaver (in will generally offer a meeting to discuss Details of outside directorships held by the addition to any specified categories) these changes. Executive Directors and any fees that they for incentive plan purposes based received are provided on page 72 of the on the rules of the ESIP, and the Directors’ Annual Remuneration Report. resulting treatment of the award (as Future Policy Table for Board Chairman and Non-Executive Directors The Board Chairman and Non-Executive Directors receive a fee for their services and do not receive any other benefits from the Group, nor do they participate in any of the bonus or share schemes. The fees recognise the responsibility of the role and the time commitments required, and are not performance related or pensionable. They are paid monthly in cash and there are no other benefits.

Purpose and link Element to strategy Operation Maximum opportunity Fees Attract, retain and Reviewed by the Board after recommendation by the Chairman and The maximum aggregate fees for all fairly reward high Chief Executive (and by the Committee in the case of the Chairman) Directors allowed by the Company’s calibre individuals. taking into account individual responsibilities, such as committee Articles of Association is £600,000. Chairmanship, time commitment, general employee pay increases, and Current fee levels are set out in the prevailing market levels at companies of comparable status and Directors’ Annual Remuneration Report. market value. Fee increases are normally reviewed annually and are generally effective from 1 March.

The above principles will also be applied for the recruitment of new Non-Executive Directors.

Service contracts and letters of twelve months following termination of on payment for early termination in the employment. letters of appointment. After the initial appointment three year term they may be reappointed Non-Executive Directors, including the for a further term of three years, subject All Executive Directors’ service contracts Chairman of the Board, are engaged to annual re-election at Annual General contain a twelve month notice period. The under letters of appointment and do not Meetings. service contracts also contain restrictive have service contracts with the Company. covenants preventing the Executive They are appointed for a fixed term of Further detail on service contracts and Directors from competing with the Group three years, during which period the letters of appointment are set out on page for six months following the termination of appointment may be terminated by either 69 and copies are available for inspection employment and preventing the Executive party upon one month’s written notice or in at the Company’s registered office during Directors from soliciting key employees, accordance with the Articles of Association normal business hours. clients and candidates of the employing of the Company. There are no provisions company and Group companies for

59 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 60

Annual Report 2016 PageGroup The proposed new remuneration new remuneration The proposed shareholder policy and associated consultation process; targetsThe setting of performance made awards for the 2016 incentive to the Executive Directors; of strategic Monitoring the progress objectives; regulations Reviewing reporting remuneration; regarding amount of bonuses the Approving for the plan awards and share based on pre- Executive Directors set performance targets; Reviewing various shareholder bodies’ communications and of remuneration; policies in respect and and Undertaking its annual review salaries and incentives of approval and other of the Executive Directors senior executives.

The Committee met a total of five times met a total of five The Committee the followingduring 2016 and discussed matters: • • • • • • • The Remuneration Committee set out in the 2013 Annual Report and Accounts Remuneration Policy the PageGroup at by shareholders which was approved Annual General Meeting the Company’s held on 5 June 2014. Full details of the can voting in this respect shareholder be found on page 72. A copy of the Remuneration Policy in full can be found in the 2013 Annual Report and Accounts in the Investors section of our website The Committee www.page.com. continued to operate this Remuneration Policy during 2016. The Remuneration Committee will at the Annual shareholders put before General Meeting of the Company to be held on 8 June 2017 the remuneration policy which appears on pages 55 to 59.

1 1 5 5 5 ds included in the 5 5 No of meetings 5 5 5 Held ded in 2016; and 2 e for remuneration and the accompanying notes; and the accompanying e for remuneration 1

Details of the long-term variable pay awar Details of the long-term Single total figur against metrics for variable awar Details of the performance single sum;

Baroness Ruby McGregor-Smith ceased to be a member of the Remuneration Committee on 23 May 2016 Ruby McGregor-Smith Baroness so was eligible to attend one Remuneration Committee meeting. Michelle Healy was appointed to the Committee on 10 October 2016 so was eligible to attend only oneMichelle Healy was appointed to the Committee on 10 Remuneration Committee meeting.

Baroness Ruby McGregor-Smith Baroness Simon Boddie Patrick De Smedt Michelle Healy Director Danuta Gray

Resources Director. Resources £13,000, the Chairman, Chief Executive Officer, Company Secretary and Group Human and Group Company Secretary £13,000, the Chairman, Chief Executive Officer, The Committee also received input from Caddow Consulting Limited for a fee of input from The Committee also received totalled £66,749. New Bridge Street did not provide any services to the Company. any services to the Company. did not provide totalled £66,749. New Bridge Street levels; and advised on the remuneration report. The fees paid to New Bridge Street The fees paid to New Bridge Street report. levels; and advised on the remuneration various incentive arrangements; benchmarking of remuneration against market various incentive arrangements; benchmarking of remuneration shareholder consultation process; the setting of performance criteria for the Company’s the setting of performance criteria for the Company’s consultation process; shareholder to the Committee on the proposed new remuneration policy and the associated new remuneration to the Committee on the proposed of broker fees. During the year New Bridge Street has provided independent advice independent has provided fees. During the year New Bridge Street of broker to the Company during the year under review. £97,000 was paid to Aon in respect £97,000 was paid to Aon in respect to the Company during the year under review. New Bridge Street is a member of the Aon Group who provided insurance services insurance who provided is a member of the Aon Group New Bridge Street under the code of conduct in relation to executive remuneration consulting in the UK. to executive remuneration under the code of conduct in relation is a member of the Remuneration Consultants Group and as such voluntarily operates is a member of the Remuneration Consultants Group September 2013 as a result of a competitive retendering process. New Bridge Street Bridge Street New process. of a competitive retendering September 2013 as a result The Committee appointed New Bridge Street as its remuneration consultants in as its remuneration The Committee appointed New Bridge Street to their own remuneration. invitation when appropriate and necessary. No Director takes part in discussions relating takes part in discussions relating No Director and necessary. invitation when appropriate the Group Human Resources Director and external Director advisers, may attend meetings by Human Resources the Group Baroness Ruby McGregor-Smith, the Chief Executive Officer, the Chief Financial Officer, the Chief Financial Officer, the Chief Executive Officer, Ruby McGregor-Smith, Baroness such as the Chairman of the Board, who attends meetings of the Committee regularly, who attends meetings of the Committee regularly, such as the Chairman of the Board, Only members of the Committee are entitled to attend meetings. Other individuals, Only members of the Committee are 2. 1. Notes: meetings of the Committee were as follows:- meetings of the Committee were Director of the Company on 10 October 2016. Details of the members’ attendance at of Director Michelle Healy who became a member of the Committee on her appointment as aMichelle Healy who became a member of McGregor-Smith who ceased to be a member of the Committee on 23 May 2016 and McGregor-Smith McGregor-Smith and Michelle Healy. All served throughout the year except Ruby All served throughout and Michelle Healy. McGregor-Smith was Chairman of the Committee, Simon Boddie, Patrick De Smedt, Baroness Ruby Patrick De Smedt, Baroness was Chairman of the Committee, Simon Boddie, During the year under review the members of the Committee were Danuta Gray, who Danuta Gray, the members of the Committee were During the year under review (d) Section on outstanding share awards. share (d) Section on outstanding (c) subject to audit are the: subject to audit are (b) under the Regulations. The elements of the Directors’ Annual Remuneration Report Annual Remuneration The elements of the Directors’ under the Regulations. (a) Regulations 2013. The information on pages 60 to 72 has been audited where required required audited where information on pages 60 to 72 has been Regulations 2013. The and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) and Groups and Medium-sized Companies This part of the report has been prepared in accordance with Part 3 of the Large with Part in accordance has been prepared the report This part of Directors’ Remuneration Report Remuneration Directors’ Directors’ Remuneration Report

Directors’ Remuneration as a single figure The tables below report a single figure for total remuneration for each Director for the years ended 31 December 2016 and 31 December 2015. 2016 Dividends Salary Short-term Long-term paid on and Fees Benefits Pensions incentives incentives unvested (note 1) (note 2) (note 3) (note 4) (note 5a) shares Total Executive £’000 £’000 £’000 £’000 £’000 £’000 £’000 Steve Ingham 587 35 147 605 509 131 2,014 Kelvin Stagg 325 26 65 303 161 52 932 Non-Executive David Lowden 200 – – – – – 200 Simon Boddie 66 – – – – – 66 Patrick De Smedt 55 – – – – – 55 Danuta Gray 66 – – – – – 66 Michelle Healy6 12 – – – – – 12 Ruby McGregor-Smith 55 – – – – – 55 2015

Dividends Salary Short-term Long-term paid on and Fees Benefits Pensions incentives incentives unvested (note 1) (note 2) (note 3) (note 4) (Note 5b) shares Total Executive £’000 £’000 £’000 £’000 £’000 £’000 £’000 Steve Ingham 575 35 144 682 485 153 2,074 Kelvin Stagg 307 24 61 309 110 50 861 Non-Executive Robin Buchanan8 233 – – – – – 233 Simon Boddie 66 – – – – – 66 Patrick De Smedt7 22 – – – – – 22 Danuta Gray 52 – – – – – 52 David Lowden 67 – – – – – 67 Ruby McGregor-Smith 58 – – – – – 58

Notes: 1. Salary and fees represent the salary and fees paid in cash in respect of the financial year. 2. Benefits epresentr the taxable value of the benefits provided in the year and comprise a company car or cash equivalent; fuel; permanent health insurance; medical insurance; life insurance; and in respect of the Chief Executive Officer, golf club membership used for corporate entertaining. 3. Pension includes the cash value of Company contributions to defined contribution pension plans and cash payments in lieu of pension contributions. 4. The “Short-Term Incentives” figure for each of the 2015 and 2016 years includes the annual cash bonus. 5a. The value of shares vesting under the 2014 LTIP, for which the performance period ended in the financial year. Following the assessment of performance, 136,363 shares will vest to Steve Ingham and 42,149 shares will vest to Kelvin Stagg. In addition, the value of 2,000 share options awarded to Kelvin Stagg on 9 March 2009 which will become exercisable in March 2017 are also shown in the single figure table above. The figures shown in the table are based on the average share price in the three months to 31 December 2016, which is 372.62p. The figure will be restated next year using the actual share price on the relevant date. Further details relating to performance targets, weightings and outcomes can be found on pages 63 and 64. 5b. The long-term incentives were earned in the 2015 year but paid in March 2016. 6. Michelle Healy was appointed a Director of the Company on 10 October 2016. The fees shown in the 2016 table reflect the amount paid to her from the date of appointment to 31 December 2016. 7. Patrick De Smedt was appointed a Director of the Company on 1 August 2015. The fees shown in the 2015 table reflect the amount paid to him from the date of appointment to 31 December 2015. 8. Robin Buchanan ceased to be a Director of the Company on 31 December 2015. The fees noted above cover the period 1 January 2015 to 31 December 2015.

61 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 62

(% of salary) Outcome Outcome (% of salary) 45.7% 12.5% 57.1% 12.5% 13.5% 10% 10% 103.1%

Annual Report 2016 PageGroup

Thr T Maximum PBT – £128.8m T Maximum PBT – £128.8m Thr

Achievements Achievements • • eshold PBT-£77.3m PBT–£103m arget • in a bonus payment of 45.7% of 2016 PBT at budget rates of £88.6m resulted no benefit ensure this element, which was determined using a sliding scale. To exchange movements, the actual PBT is favourable foreign from is received at the time of setting the target. to the exchange rates prevailing re-translated identified and developed. were Services Centres Key executives for Shared for the global finance function was New performance management process out. New capability added in the global finance team including tax and rolled resource. procurement new European-wide • PBT–£103m arget • payment of 57.1% of in a bonus 2016 PBT at budget rates of £88.6m resulted no benefit ensure sliding scale. To this element, which was determined using a PBT is exchange movements, the actual favourable foreign from is received the target. at the time of setting to the exchange rates prevailing re-translated development plans implemented for senior and individual Organisational talent pipeline level. This will ensure at executive and regional leadership group for Page leadership. succession planning development and choice for future in line with objectives in and fee earner Productivity headcount was increased and economic events. In key categories in spite of adverse global political three delivered particular in HPM fee earner headcount up to 1,576. Efficiencies were Service Centre. Shared the Barcelona through in Brazil continued with newDespite adverse market conditions, investment made in were US. Investments investments in Peru, Latam, Indonesia, regional UK. sector of IT contracting in Germany and the the growing of females met with the percentage for 2016 were At year end, diversity targets of female 48% to 52% and the number from in the UK business increasing 26% to 33%. from increased directors in attrition of fee earners in performing markets due to betterDecrease of talent. retention in UK & and 100% completion of IT roll-out 100% completion of PRS roll-out within budget. and Europe APAC LATAM, ROW, • eshold PBT–£77.3m Weighting (max Weighting % of salary) Weighting (max Weighting % of salary) 12.5% of salary 15% of salary 15% of salary 10% of salary 10% of salary 175% 100% of salary 125% of salary

Performance metric Performance metric Executive Leadership Development Executive Leadership Development Strategy Development Page People Development Page IT systems (% of salary) Total Financial – PBT Financial – PBT CFO tables below for both Executive Directors: tables below for both The performance metrics, weightings and targets, together with the determination of the annual bonus payment, are as set out in the payment, are the determination of the annual bonus weightings and targets, together with The performance metrics, financial year. Performance against the strategic measures was assessed against a number of areas. was assessed against the strategic measures Performance financial year. CEO were set having considered both internal budgets and market expectations, being adjusted for the impact of foreign currency in the currency both internal being adjusted for the impact of foreign budgets and market expectations, set having considered were As in prior years, the annual bonus was based on PBT and strategic measures. The PBT thresholds and maximum targets for 2016 and maximum targets The PBT thresholds measures. annual bonus was based on PBT and strategic As in prior years, the which represented 62.1% of £487,500, this being the maximum payable under the annual bonus. this being the maximum payable under 62.1% of £487,500, which represented nnual bonus. Kelvin Stagg received £302,900 (93.2% of base salary) received the annual bonus. Kelvin Stagg this being the maximum payable under 58.9% of £1,026,375, The annual bonus payment for the Executive Directors was £604,828 to Steve Ingham (103.1% of base salary) which represented represented Steve Ingham (103.1% of base salary) which was £604,828 to for the Executive Directors The annual bonus payment Determination of Annual Bonus for the Financial Year Ended 31 December 2016 December 2016 Ended 31 Financial Year Bonus for the of Annual Determination Directors’ Remuneration Report

Performance Weighting (max Outcome metric % of salary) Achievements (% of salary) Risk Management 12.5% of salary Global legal and commercial framework for the Group was designed and implemented. 10% and Internal Controls There was an improvement in the Audit Committee’s assessment of risk due to the integration of risk register and risk management processes into the Group’s strategy and business management processes.

Cost Management, 12.5% of salary Mainland European finance functions were transferred to the Shared Services Centre 12.5% Financial, Strategic generating operational efficiencies and ongoing cost savings. Global finance system and Management project is on-budget for 2016 and all 2016 actions are complete. Information

Tax and Treasury 12.5% of salary 100% completion of the new Treasury Management System (TMS) within the agreed 12.5% Management budget. Successful conclusion of corporate tax management trial.

Total (% of salary) 150% 93.2%

CEO maximum opportunity

CEO actual Maximum

CFO maximum opportunity

CFO actual Maximum 0255075 100 125 150 175 % Salary

PBT Executive Leadership Development Strategy Development Page People Development Page IT systems

Risk Management and Internal Controls Cost Management, Financial, Strategic Tax and Treasury Management and Management Information

Deferred Annual Bonus Any bonus above 125% for each of the Chief Executive Officer and the Chief Financial Officer is deferred into Ordinary shares of the Company. As shown on pages 62 and 63 the annual bonus for the financial year ended 31 December 2016 for the Chief Executive Officer and the Chief Financial Officer was 103.1% and 93.2% of salary respectively and, therefore, no bonus was deferred. Long-Term Incentives included in the Single Figure Table The long-term incentive awards granted in March 2014 to Steve Ingham and Kelvin Stagg were subject to EPS, Relative Gross Profit and Strategic targets measured over a three year period. The Committee assessed performance against each of these targets at the end of the performance period, 31 December 2016, and determined that 60% of the LTIP award should vest to Steve Ingham, and 60% should vest to Kelvin Stagg. This resulted in 136,363 shares vesting to Steve Ingham and 42,149 shares vesting to Kelvin Stagg. The determination of these vesting outcomes is set out in the table below:

Performance Weighting (max Outcome metric % of award) Achievements (% of award) Financial Cumulative EPS 62.5% • Threshold EPS – 57p 28.7% • Maximum EPS – 78p • Actual EPS – 62.8p

Relative Gross Profit 12.5% • Median comparator group gross profit growth – 6.1% 8.8% Growth • Upper quartile comparator group gross profit growth – 8.4% • PageGroup actual gross profit growth – 7.4%

63 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 64

Outcome (% of award) 12% 7.5% 60.0% 8% 10.5% 60.0% 7% Maximum Maximum 100 Annual Report 2016 PageGroup 5 Cost Management, Financial, Strategic and Management Information Executive Leadership Development 07 % of maximum People Development 55 Relative Gross Profit Growth Profit Relative Gross Achievements People development plan executed over the three years resulting in resulting years three People development plan executed over the in employee engagement survey results. improvements Roll-out of employer value proposition. into wider and Inclusive Leadership programmes Integration of Women-only and digital Global performance management development programmes. learning out. systems have been rolled Record ratio of 77:23 of fee-earners support roles. Record to operational The first three years of the five year development and succession plan were year development and succession plan were years of the five The first three for the CEO and other senior executives. Thesuccessfully implemented operated successfully for a executives has already succession plan for senior in Asia Pacific. senior executive position Finance Strategy have been implemented 1, 2 and 3 of the Global Years Service place for the Shared People and systems have been put in effectively. systematically over the 3 years. has been extended and their reach Centres been embedded into the business and has Team The Strategic Finance strategy into the of a global procurement strategic planning. Introduction group. After the end of the three-year period, PageGroup has record Revenue, Gross Revenue, Gross has record period, PageGroup After the end of the three-year and Headcount. Profit growth Profit with high Gross Successful brand development was achieved, CAGR. period for Page Personnel of 13% over the three-year High Potential Markets (LHPM) in Large Execution of strategic vision resulted period. over the three-year growth Profit Gross exhibiting strong Strategy Development Cumulative EPS 02 Weighting (max Weighting % of award) CEO: 7.5% 100% CFO: 12.5% CEO: 10% CFO: 12.5% 100% CEO: 7.5% CFO actual opportunity opportunity CEO actual CFO maximum CEO maximum

Performance metric Strategic Total CEO Total (% of max) Cost Management, Financial, Strategic and Management Information People Development Executive Leadership Development Total CFO Total (% of max) Strategy Development Directors’ Remuneration Report

Percentage Change in Remuneration for the Chief Executive Officer The following table provides a summary of the 2016 increase in base salary for the Chief Executive Officer compared to the average increase for the Group Head Office population in the same period. Also included is the proposed 2017 salary increase for the purpose of comparison.

Proposed 2016 2015 2017 increase % increase % increase %

Chief Executive Officer 2.6 2.0 1.8 Salary Group Head Office Population 2.81 2.01 2.51

Chief Executive Officer _ _ _ Benefits Group Head Office Population _ _ _ Chief Executive Officer _ -11.3 -2.8 Annual Bonus Group Head Office Population _ 3.01 10.91

Note: 1. Represents average increase. The Group Head Office population was chosen as the most relevant population comparison as the Chief Executive Officer is based in the UK, as are the Group Head Office staff and the Group Head Office population does not include operational staff incentivised against sales targets. Details of the Long-Term Incentive Award made in 2016 On 18 March 2016 an award of shares under the Long-Term Incentive Plan was made to each of the Chief Executive Officer and the Chief Financial Officer as follows:

% of Award if vesting at End of performance Executive Type of Award Basis of Award Face Value threshold period

Steve Ingham 284,865 shares 200% of salary £1,150,000 25 31 December 2018

Kelvin Stagg 133,298 shares 175% of salary £538,125 25 31 December 2018

Note: The market price of the shares as at the date of grant was 427.20p. The performance conditions attaching to the Long-Term Incentive Plan awards can be found on pages 66 and 67. Outstanding Share Awards This section sets out the share interests of the Executive Directors under the old ISP, the legacy Executive Share Option Scheme, the 2009 Share Option Scheme and the Long-Term Incentive Plan. Incentive Share Plan – Performance Award Details of Performance Awards made under the Incentive Share Plan were as follows:

Number of Granted Vested Number of shares at during during Lapsed shares at End of Grant 1 January the the during 31 December performance Executive date 2016 year year the year 2016 period Vesting date 11 March 31 December Steve Ingham 2013 41,968 – (41,968) – – 2015 11 March 2016

Total 41,968 – (41,968) – – 11 March 31 December Kelvin Stagg 2013 9,427 – (9,427) – – 2015 11 March 2016

Total 9,427 – (9,427) – –

65 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 66 Vesting date Vesting Vesting date Vesting 20 March 2018 20 March 2019 18 March 11 March 2017 11 March 18 March 2019 18 March 11 March 2017 11 March 2018 20 March 11 March 2016 11 March 2016 11 March N/A N/A Annual Report 2016 PageGroup period period 5% 10% 7.5% 31 December 2017 31 December 2018 31 December 2016 31 December 2018 31 December 2016 31 December 2017 End of performance End of performance – – – – 2016 2016 at 31 at 31 84,191 70,248 25 25 25 133,298 287,737 723,551 284,865 227,273 211,413 Number Number of shares of shares of shares of shares December December Average annual growth in Company EPS in excess in Company annual growth Average in the Retail Prices Index over of the increase rs yea three – – _ _ – – – – – – – – the the year year during during Lapsed Lapsed % of award vesting at threshold % of award – – _ _ – – – – the the year year during during Vested Vested Vested Vested (83,937) (18,854) (83,937) (18,854) – – – – – – – – the the year year during during 25 284,865 284,865 133,298 133,298 12.5 62.5 Granted Granted – –

at 1 at 1 2016 2016 83,937 18,854 18,854 84,191 70,248 83,937 154,439 438,686 227,273 211,413 January Number January Number Weighting (% of award) (% Weighting of shares of shares of shares of shares date date Grant Grant 11 March 2013 11 March 2013 11 March 18 March 2016 18 March 20 March 2015 20 March 11 March 2014 11 March 11 March 2014 11 March 2015 20 March 2016 18 March

Performance Measure Executive Executive Value of Shares subject to Performance of Shares Value Date Award conditions vesting on Kelvin Stagg Total Kelvin Stagg Kelvin Stagg Total Comparator gross profit growth profit Comparator gross Strategic targets Cumulative 3-year real EPS Cumulative 3-year real Steve Ingham Steve Ingham Steve Ingham Steve Ingham Total Kelvin Stagg Total Shares with greater value than 75% of Participant’s salary at Award Date at Award salary of Participant’s value than 75% with greater Shares Shares with value between 50% and 75% of Participant’s salary at Award Date salary at Award and 75% of Participant’s with value between 50% Shares Date at Award salary Participant’s with value up to 50% of Shares The performance criteria relating to the Long-Term Incentive Plan awards granted in the year are as follows: granted in the year are Incentive Plan awards to the Long-Term The performance criteria relating Details of awards made under the Long-Term Incentive Plan that remain outstanding at 31 December 2016 are as follows: 2016 are outstanding at 31 December Incentive Plan that remain made under the Long-Term Details of awards Long-Term Incentive Plan Long-Term

Incentive Share Plan – Deferred Awards Plan – Deferred Incentive Share as follows: outstanding at 31 December 2016 are Plan that remain under the Incentive Share Awards Details of the Deferred The performance conditions relating to the Performance Awards made to the Executive Directors are noted below. are Directors made to the Executive Performance Awards to the conditions relating The performance Directors’ Remuneration Report

The shares subject to the cumulative three-year EPS performance condition will vest as follows after the completion of the three-year performance period: • 25% will vest for achieving three-year cumulative EPS of 66p; • 100% of the shares will vest for achieving three-year cumulative EPS of 80.5p; and • Between 25% to 100% of the shares will vest for three-year cumulative EPS in between 66p and 80.5p. The shares subject to the comparator gross profit measure will vest as follows after the completion of the three year performance period: • 25% will vest for achieving the median gross profit growth of the comparator group; • 100% of the shares will vest for achieving the upper quartile gross profit growth of the comparator group; and • Between 25% to 100% of the shares will vest for achieving gross profit growth in between median and upper quartile. The comparator group comprises the following companies and where relevant and practical, is measured only against organic growth against relevant divisions: Adecco, Hays, Hudson, Manpower, Randstad, Robert Half, Robert Walters and SThree. The Committee currently considers the targets for the other performance measures to be commercially sensitive and will disclose the performance targets for each of the 2015 and 2016 awards once the final vesting outcome has been determined. The performance targets for the 2014 award can be found on pages 63 and 64. The outturn of performance against the comparator group for the 2014 award can be found on page 63. Executive Share Option Scheme Details of options granted under The Michael Page International plc Executive Share Option Scheme and The Michael Page 2009 Share Option Scheme that remain outstanding at 31 December 2016 are as follows:

The Michael Page Executive Share Option Scheme

Number of Number of options at Exercised Lapsed options at Grant 1 January during the during the 31 December Exercise Exercise Executive date 2016 year year 2016 price (p) period

1 Steve Ingham 10 March 2010 374,147 – – 374,147 381.5 2013-2020

Total 374,147 – – 374,147

1 Kelvin Stagg 10 March 2010 50,000 – – 50,000 381.5 2013-2020

Total 50,000 – – 50,000

Note: 1. At 31 December 2016 all options had vested and were available for exercise. The market price of the shares as at 31 December 2016 was 390.50p per share, with a range during the year of 264.90p to 481.20p per share.

The Michael Page 2009 Share Option Scheme

Number of Exercised Number of options at during Lapsed options at 1 January the during the 31 December Exercise Exercise Executive Grant date 2016 year year 2016 price (p) period

Kelvin Stagg 9 March 2009 20,000 – – 20,0001 187.5 2012-2019

Kelvin Stagg 11 March 2011 30,000 – – 30,000 491.0 2014-2021

Kelvin Stagg 12 March 2012 30,000 – – 30,0001 477.0 2015-2022

Total 80,000 – – 80,000

Note: 1. At 31 December 2016 45,030 of the options had vested and were available for exercise. Steve Ingham does not hold any options under The Michael Page 2009 Share Option Scheme.

67 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 68

35 880 10,000 As at 31 2016 as a 2016 Executive 19.1 2015 % of salary holding as at 31 December m +70% p December 2016 32.5 Directors’ value of Directors’

Annual Report 2016 PageGroup 31 10,000 2016 as at holding Value of Value 3.4 £116,209 December £5,170,044 +0% p m 3.4 on Deto on Deto Ovell pen 2016 Purchased in the year Purchased shares shares 29,759 as at 31 Ordinary Ordinary 1,323,955 December – – 352.8 No +13% person (26,633) longer a on p m Ovell pen 398.5 connected

As at 1 January 2016 in year (59,324) (13,326) 0 Disposal – – e >100% te E m 15.1 pe pe in year Purchased Purchased Connected person 85.1 28,281 125,905 -34% Ordinary shares of 1p shares Ordinary p m Dven acquired on acquired share award share 56.3 vesting of ISP Ordinary shares shares Ordinary

2016 as at 66.2 14,804 shares shares Ordinary Ordinary +9% t m 1,284,007 1 January Pot te Pot 72.1

0

100 200 300 400 outstanding awards under the Long-Term Incentive Plan. under the Long-Term outstanding awards vested under the ISP. shares 125,905 Ordinary Steve Ingham: During the year under review vested under the ISP. shares 28,281 Ordinary Kelvin Stagg: During the year under review price on 31 December 2016 of 390.5p per share. holdings uses the closing share The value of the Executive Directors’ In addition to the Ordinary shares shown in the table above, Steve Ingham and Kelvin Stagg have a beneficial interest in the Ordinary shares shown on page 66 as shares in the Ordinary above, Steve Ingham and Kelvin Stagg have a beneficial interest shown in the table shares In addition to the Ordinary

Executive Directors

Non-Executive Directors David Lowden Steve Ingham Kelvin Stagg £m not been exercised, as set out on page 67. as set out not been exercised, subject to ongoing vesting and/or performance conditions which are set out on page 66 or share options which have vested but have options which have vested out on page 66 or share set are and/or performance conditions which subject to ongoing vesting are shown in the table below. The table shows interests which are held outright and does not include interests held in shares which are which are held in shares interests held outright and does not include which are shows interests The table shown in the table below. are The beneficial interests of the Directors who served during 2016, and their connected persons, in the Ordinary shares of the Company shares persons, in the Ordinary who served during 2016, and their connected Directors of the The beneficial interests Kelvin Stagg who was appointed a Director during 2014 is in the process of building the required minimum holding. minimum the required of building during 2014 is in the process appointed a Director Kelvin Stagg who was shares of an amount equal to two times their base salary. As at 31 December 2016 Steve Ingham complied with this requirement. requirement. 2016 Steve Ingham complied with this As at 31 December two times their base salary. of an amount equal to shares It is the Company’s policy that Executive Directors are required to build and hold a direct beneficial holding in the Company’s Ordinary Ordinary holding in the Company’s beneficial to build and hold a direct required are policy that Executive Directors It is the Company’s Statement of Directors’ Shareholdings of Directors’ Statement change to the prior year is also shown. overall spend on Directors’ pay as included in the single figure table on page 61 and the tax paid in the financial year. The percentage The percentage table on page 61 and the tax paid in the financial year. pay as included in the single figure overall spend on Directors’ Michael Page Employees’ Benefit Trust, overall spend on pay to all employees (see Note 4 in the financial statements on page 93)Trust, overall Michael Page Employees’ Benefit The graph below shows details of the Company’s retained profit after tax, distributions by way of dividend, shares purchased by the purchased after tax, distributions by way of dividend, shares profit retained The graph below shows details of the Company’s Report. Relative Importance of Spend on Pay There have been no changes to the Directors’ shareholdings since 31 December 2016 to the date of this Directors’ Remuneration since 31 December 2016 to the date of this Directors’ shareholdings been no changes to the Directors’ have There No other Non-Executive Director held Ordinary shares in the Company during the year under review. shares held Ordinary No other Non-Executive Director 4. 2. 3. Notes: 1. Directors’ Remuneration Report

Service Contracts and Letters of Appointment All Executive Directors’ service contracts contain a twelve month notice period. The service contracts also contain restrictive covenants preventing the Executive Directors from competing with the Group for six months following the termination of their employment and preventing the Executive Directors from soliciting key employees, clients and candidates of the employing company and Group companies for twelve months following termination of employment. The Remuneration Committee has the right to exercise mitigation in the event of termination. Non-Executive Directors, including the Chairman of the Board, are engaged under letters of appointment and do not have service contracts with the Company. They are appointed for a fixed term of three years, during which period the appointment may be terminated by either party upon giving one month’s written notice or in accordance with the provisions of the Articles of Association of the Company. There are no provisions on payment for early termination in the letters of appointment. After the initial three-year term, they may be reappointed for a further term of three years, subject to annual re-election at the Annual General Meeting. Copies of the service contracts and letters of appointment are available for inspection during normal business hours at the Company’s registered office.

Executive Director Service Contract Date Unexpired Term Notice Period

Steve Ingham 31 December 2010 No specific term 12 months

Kelvin Stagg 6 June 2014 No specific term 12 months

Non-Executive Directors Letter of Appointment Date Unexpired Term at 31 December 2016

Simon Boddie 24 September 2015 19 months

Patrick De Smedt 1 August 2015 18 months

Danuta Gray 9 December 2016 36 months

Michelle Healy 2 September 2016 34 months

David Lowden 9 December 2015 18 months

Ruby McGregor-Smith 23 May 2016 5 months

Implementation of the Remuneration Policy for Executive Directors in 2017 Base Salary The base salaries of the Executive Directors were considered with reference to the general salaries across the Group Head Office population and other market benchmarks. The Remuneration Committee decided to increase the salary of the Chief Executive Officer by 2.6% which is below the increase awarded to the Group Head Office population. The CFO was promoted onto the Executive Committee and the Board from within the business. His initial base salary was set below the market median for a FTSE 250 Finance Director and the Remuneration Committee stated intention was to make a series of staged increases, subject to performance and experience in role, to bring him to a market competitive salary. Since appointment, the CFO’s range of accountabilities has increased. Having reviewed his performance and the salary levels of CFOs across the sector (and the wider FTSE 250) the Remuneration Committee has decided to increase the CFO base pay to the current FTSE 250 median of £350,000 from 1 January 2017, which represents an increase of 7.7%.

Executive Single Incentive Plan As set out in the Annual Statement and Directors’ Remuneration Policy, the first ESIP award will be paid in 2018 and will replace the Annual Bonus to be paid in 2018 and the LTIP award to be granted in 2018. The maximum opportunity under the ESIP will be equal to the current combined opportunity under the Annual Bonus and LTIP, namely 375% of base salary for the CEO and 325% of base salary for the CFO. The first award will be based on the following scorecard:

Measure Weightings

Annual Performance PBT 30%

Non-financial, strategic 15%

Personal performance 10%

Longer-term metrics EPS growth 35%

Relative Gross Profit 10%

69 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 70 Annual Report 2016 PageGroup £205,000 £53,300 £7,000 £14,000 £14,000

Cumulative 3-year EPS (62.5% of award) (12.5% of award) Growth Profit Comparator Gross (25% of award) Strategic measures

Senior Independent Director Chairman Non-Executive basic fee Additional fees payable: Chairman of the Audit Committee Chairman of the Remuneration Committee

below the average UK Head Office percentage salary increase. below the average UK Head Office percentage Following a review of fee levels, it was decided to increase the Chairman’s and Non-Executive basic fees by 2.5%, which is slightly the Chairman’s of fee levels, it was decided to increase Following a review

The fees per annum for the Board Chairman and the Non-Executive Directors have been agreed as follows: have been agreed Chairman and the Non-Executive Directors The fees per annum for the Board contribution equivalent to 20% of his base salary. contribution equivalent to 20% of his base Directors in 2017 for the Chairman and Non-Executive Policy Implementation of the Remuneration equivalent. The Chief Executive Officer receives a contribution equivalent to 25% of his base salary. The Chief Financial Officer receives a The Chief Financial Officer salary. receives a contribution equivalent to 25% of his base equivalent. The Chief Executive Officer for strategic measures to be commercially sensitive and will disclose the targets once the final vesting outcome has been determined. sensitive and will to be commercially for strategic measures a contribution to a defined contribution pension scheme or a cash receive Directors In line with the Remuneration Policy the Executive group of companies and structured on the same basis as for awards granted in 2016. The Committee currently considers the targets granted in 2016. The Committee currently awards on the same basis as for companies and structured of group Pensions account of broker forecasts and the Company’s business plan. The relative gross profit metric will be measured against a comparator metric will be measured profit gross business plan. The relative and the Company’s forecasts account of broker with threshold performance of 69p (25% vesting) and maximum performance of 84p (100% vesting). This performance range takes performance of 69p (25% vesting) and maximum performance of 84p (100% vesting). with threshold For the portion of the award subject to the EPS performance condition, cumulative EPS will be measured over the three years 2017-19 over the three measured subject to the EPS performance condition, cumulative EPS will be For the portion of the award performance will be provided retrospectively, starting in the 2018 Annual Report on Remuneration. starting in the 2018 Annual retrospectively, performance will be provided • performance will be measured over three years. Transparent disclosure of performance measures, targets, and the assessment of targets, and of performance measures, disclosure years. Transparent over three performance will be measured 2016: will be unchanged from and weightings for these awards The performance measures of base salary for the Chief Financial Officer. • over periods already known. For the second award, performance will be measured over two years, and for the third and later awards and later awards years, and for the third over two performance will be measured the second award, known. For over periods already Officer and 175% will be 200% of base salary for the Chief Executive The face value of awards new policy comes into force. the before • price inflation at maximum vesting. For the first award, performance will be measured over one year to avoid measuring performance over one year to avoid measuring be measured performance will vesting. For the first award, price inflation at maximum 2017 under the existing policy will be granted in March award The last LTIP under the LTIP. will be no further awards there 2018 From performance level is expected to imply an annual growth rate above price inflation, and a materially more significant margin above significant margin inflation, and a materially more rate above price expected to imply an annual growth performance level is Incentive Long-Term for future awards is to set targets, in normal circumstances, that align to a sustained, long-term rate of EPS growth. The threshold The threshold rate of EPS growth. that align to a sustained, long-term circumstances, is to set targets, in normal awards for future for 2017 will take account of the internal long-term business plan and strategic goals, and broker forecasts. The Committee’s intention The Committee’s forecasts. of the internalfor 2017 will take account plan and strategic goals, and broker long-term business Longer-term metrics will include Gross Profit growth relative to peers, and EPS growth. Targets for the trailing EPS performance metricTargets for the peers, and EPS growth. relative to growth Profit Gross metrics will include Longer-term set and drive the culture of PageGroup and have the appropriate succession plans in place for the future. succession plans in place and have the appropriate of PageGroup set and drive the culture be tailored to each role, and cover areas such as people development, specific job related goals, and the extent to which the Executivesrelated goals, people development, specific job such as and cover areas to each role, be tailored ensure the business is appropriately developed for the future, and are likely to be shared across both Executives. Personal measures will measures both Executives. Personal across likely to be shared and are for the future, developed the business is appropriately ensure measures will focus Executives on key drivers of long-term performance. For example, these will be key milestones or projects that or projects For example, these will be key milestones on key drivers of long-term performance. will focus Executives measures Annual performance measures will include PBT, strategic and personal performance. Annual targets will be set for PBT. Strategic PBT. will be set for Annual targets and personal performance. strategic PBT, will include measures Annual performance Total Shareholder Return The performance graph below shows the movement in the value of £100 invested in the shares of the Company compared to an investment in the FTSE 250 index and the FTSE Support Services index over the period 31 December 2008 to 31 December 2016. The graph shows the Total Shareholder Return generated by the movement in the share price and the reinvestment of dividends. The FTSE 250 index and the FTSE Support Services indexes have been selected as the Company was a member of each index throughout the period.The table below shows the total remuneration of the Chief Executive Officer over the same eight year period.

31 Dec 2008 31 Dec 2009 31 Dec 2010 31 Dec 2011 31 Dec 2012 31 Dec 2013 31 Dec 2014 31 Dec 2015 31 Dec 2016

350 353.88 331.78

305.21 298.43 300 287.90 286.12

270.71 265.27 263.63 273.64

250 255.28 231.51

217.66 220.68

201.72 200 191.91 201.83

181.31 173.64

172.60 163.24 162.60 150.64

150 132.50

PageGroup FTSE 250 FTSE SS

100 100.0

CEO 2009 2010 2011 2012 2013 2014 2015 2016

Single remuneration total £1,010,000 £2,184,000 £1,647,000 £2,723,000 £1,318,000 £1,494,000 £2,074,000 £2,014,000 Short-term incentives (% of maximum) (note 1) N/A N/A N/A N/A 58% 71% 68% 59% Long-term incentives (% of maximum) N/A N/A N/A N/A N/A N/A N/A 60%

Notes: 1. Prior to 2012 the Company operated uncapped incentives which, by definition, did not have the concept of “maximum”. As a result it is not possible to provide this information historically. However, following the changes in 2012 it is possible to provide this information for the years 2013, 2014, 2015 and 2016.

71 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 72 2,626,945 10,806,402 Votes Withheld Votes % Annual Report 2016 PageGroup 1.30 7.82 Votes Votes Against 3,467,477 20,056,781 % 98.70 92.18 Votes For Votes 263,878,771 236,349,070 AGM 5 June 2014 9 June 2016

Resolutions Remuneration Policy Report Directors’ Remuneration Report Directors’ Chairman of the Remuneration Committee 2017 7 March Danuta Gray Signed on behalf of the Board of Directors Signed on behalf of the Board The Directors’ Remuneration Report has been approved by the Board of Directors. the Board by Remuneration Report has been approved The Directors’ non-executive director of Debenhams plc. No other Executive Director earned external directorships. of Debenhams plc. No other Executive Director any fees from non-executive director During the year Steve Ingham, Chief Executive Officer, earned and retained £42,500 (2015: £42,500) in respect of fees from his role as a his respect of fees from £42,500) in earnedretained £42,500 (2015: and Officer, During the year Steve Ingham, Chief Executive on the Company’s website at www.page.com. on the Company’s External Directorships A full schedule in respect of shareholder voting on all the resolutions put to shareholders at the 2016 Annual General Meeting is available put to shareholders voting on all the resolutions of shareholder A full schedule in respect favour in order for each of the resolutions to be passed. resolutions for each of the favour in order Report put to shareholders at the 2016 Annual General Meeting. Each resolution required a simple majority of the votes cast to be in a simple majority required the 2016 Annual General Meeting. Each resolution at Report put to shareholders below shows the results of the voting on the Remuneration Policy at the 2014 Annual General Meeting and the Directors’ Remuneration 2014 Annual General Meeting and the Directors’ voting on the Remuneration Policy at the of the below shows the results Remuneration Policy was not varied or amended so was not put to shareholders at the 9 June 2016 Annual General Meeting. The table at the 9 June 2016 Annual General to shareholders was not varied or amended so was not put Remuneration Policy At the Company’s Annual General Meeting held on 5 June 2014, shareholders approved the current Remuneration Policy. The Remuneration Policy. the current approved 2014, shareholders Annual General Meeting held on 5 June At the Company’s Statement of Voting at the Annual General Meeting the Annual General at of Voting Statement Directors’ Report

The Directors present their Report together with the consolidated financial statements for the year ended 31 December 2016. Certain information that fulfils the requirements of the Directors’ Report can be found elsewhere in this document as noted in the table below. This information is incorporated into this Directors’ Report by reference. A summary of the disclosures required to be made in, and incorporated into, this Directors’ Report is given below.

Elaine Marriner, Company Secretary

Likely future developments 2 Company Name Policy on disability 74 At the Annual General Meeting held on 9 June 2016 the shareholders of the Employee engagement 74 Company approved a change of the Company’s name from Michael Page Greenhouse gas emissions 17 International plc to PageGroup plc. Names and biographies of Directors who served during the year 38-40 Directors Corporate Governance Report 42-45 The Directors who served throughout the year under review were David Lowden, Directors’ interests 65-68 Simon Boddie, Patrick De Smedt, Results and dividends 73 Danuta Gray, Steve Ingham, Baroness Ruby McGregor-Smith and Kelvin Stagg. Share capital and acquisition of own shares 74 Michelle Healy was appointed a Non- Executive Director on 10 October 2016. Directors’ disclosure of information to the auditor in respect of the audit 75 Results and Dividends Directors’ Responsibility Statement 75 The results for the year are set out in the Going concern 30 Consolidated Income Statement on page 81. An analysis of revenue, profit and net Viability Statement 30-31 assets by region is shown in Note 2 on pages 91 and 92. A final dividend for 2015 Appointment and replacement of Directors 44 of 7.9p per Ordinary share was paid on 20 June 2016; an interim dividend for 2016 Articles of Association 114-116 of 3.75p per Ordinary share was paid on 12 October 2016; and a special dividend Powers of Directors 115 of 6.46p per share was also paid on Share capital and shareholder rights 12 October 2016. The Directors recommend the payment of – Substantial shareholders 74 a final dividend for the year ended 31 December 2016 of 8.23p per Ordinary – Restriction on transfer of shares 115 share on 19 June 2017 to shareholders on – Rights attaching to shares 114 the register of members on 19 May 2017. If approved by shareholders at the Annual – Restrictions on voting 114 General Meeting, this will result in a total ordinary dividend for the year of – Details of employee share schemes 105-107 11.98p per Ordinary share (2015: 11.5p). This, together with the payment of the Subsidiary and associated undertakings and branches 98-102 special dividend, gives a total dividend for the year of 18.44p (2015: 27.5p). Financial risk management 107-111

Related party transactions 112

Post balance sheet events 111

73 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 74

% of voting rights % of voting rights 5.16 5.07 4.99 4.97 4.87 4.70 0 5.06 Annual Report 2016 PageGroup

Financial Instruments and Instruments and Financial Financial Risk Management of financial use Details of the Group’s financial riskinstruments, including and policies ofmanagement objectives of the Group and exposure the Group, can be found into certain financial risks to 111. Note 20 on pages 107 Significant Agreements of Control Containing Change Provisions The Company has an invoice discounting facility that terminates on a change of amounts being prepaid with control, repayable. and employees’ contracts Directors’ for payment for do not normally provide result loss of office or employment as a the However, of a change of control. and Company operates several share schemes for the benefit of option share and employees, its Executive Directors the rules of which contain provisions which may cause options and share to vest on a change granted awards of control. No. of Ordinary shares No. of Ordinary No. of Ordinary shares No. of Ordinary 16,830,751 16,512,860 16,289,042 16,198,834 15,872,246 15,308,070 Nil 16,512,860 Directors’ Indemnities The Company has not granted separate The indemnities to the Directors. and maintained Company purchased and Officers’ Liability Insurance Directors’ the period under review, throughout cover for legal which gives appropriate against the Directors. actions brought having regard to their respective aptitudes to their respective having regard employment and abilities. The Group’s practicable, policy includes, where of thosethe continued employment duringwho may become disabled of the provision their employment and and development training and career The Group appropriate. where promotion, committed to employee also remains the business. involvement throughout of kept well informed Employees are strategy of thethe performance and regular personal briefings, through Group internal (the Group’s meetings, Yammer social collaboration site), emails and other the Chief Executive communications from Officer and members of the Executive details of employment Further Board. policies and employee involvement can be found in the Strategic Report on pages 19 to 22.

Shareholder Shareholder Sanne Fiduciary Services Ltd as Trustee of the Michael Page Employees’ Benefit Trust Benefit of the Michael Page Employees’ Sanne Fiduciary Services Ltd as Trustee Baillie Gifford & Co Baillie Gifford Heronbridge Investment Management LLP Heronbridge Causeway Capital Management LLC J O Hambro Capital Management Limited J O Hambro Franklin Templeton Institutional LLC Franklin Templeton UBS Trustees (Jersey) Limited as Trustee of the Michael Page Employees’ Benefit Trust* of the Michael Page Employees’ Benefit (Jersey) Limited as Trustee UBS Trustees Baillie Gifford & Co Baillie Gifford Since the date of disclosure, the above shareholdings may have changed. the above shareholdings Since the date of disclosure, The following notifications were received during the period 1 January 2017 to 7 March 2017: received during the period 1 January 2017 to 7 March The following notifications were * This notification was made with the change of Trustee of the Michael Page Employees’ Benefit Trust. Trustee of the Michael Page Employees’ Benefit * This notification was made with the change of The Investment Association. with the dilution limits recommended by with the dilution limits recommended their effect on dilution limits and complies on their effect and executive share plans in terms of and executive share shares made under the various employee made shares employment made by disabled persons, The Company reviews the award of the award The Company reviews fair consideration to applications for issued to satisfy share options exercised. options exercised. issued to satisfy share Employee Involvement continues to give full and The Group During the year 55,750 shares were were During the year 55,750 shares and Employment Policy forthcoming Annual General Meeting. will be put to shareholders at the will be put to shareholders year. A further resolution in this respect in this respect A further resolution year. No shares were repurchased during the repurchased were No shares of the issued share capital in the market. capital in the of the issued share to purchase up to a maximum of 10% up to a maximum to purchase shareholders authorised the Company authorised the shareholders Meeting held on 9 June 2016 theMeeting held on 9 June £3,259,754.55. At the Annual General£3,259,754.55. At the Ordinary shares of 1p each, totalling shares Ordinary a single class of 325,975,455 Company’s issued capital comprised issued Company’s As at 31 December 2016 theAs at 31 December 2016 Share Capital notification. undermentioned noted interests in its Ordinary share capital. The percentage of voting rights shown below are as at the date of as at the date of voting rights shown below are capital. The percentage share in its Ordinary undermentioned noted interests Substantial Shareholders Rules, of the Transparency and with the FCA Disclosure been notified, in accordance At 31 December 2016 the Company had Directors’ Report

Political Contributions (iii) select suitable accounting policies and 3. Directors’ Confirmation apply them consistently; No political contributions were made during The Directors are responsible for preparing the year. The Company has a policy of (iv) make judgments and estimates that are the Annual Report in accordance with not making political donations to political reasonable and prudent; applicable law and regulations. Having taken advice from the Audit Committee, organisations or independent election (v) present information, including candidates anywhere in the world as the Board considers the Annual Report accounting policies, in a manner that and Accounts, taken as a whole, as fair, defined by the Political Parties, Election provides relevant, reliable, comparable and Referendums Act 2000. balanced and understandable and that and understandable information; and it provides the information necessary for Post Balance Sheet Events (vi) prepare the financial statements on shareholders to assess the Company’s a going concern basis unless it is performance, business model and strategy. There have been no significant post inappropriate to presume that the Neither the Company nor the Directors balance sheet events since 31 December Company and the Group will continue accept any liability to any person in relation 2016. in business. to the Annual Report except to the extent that such liability could arise under Reappointment of Auditor The Directors are responsible for keeping proper accounting records which disclose English law. Ernst & Young LLP are willing to continue with reasonable accuracy at any time 4. Disclosure of Information to in office and, accordingly, resolutions the financial position of the Company the Auditor concerning their reappointment and and of the Group and to enable them to Having made the requisite enquiries, so far to authorise the Directors to set their ensure that the financial statements and as the Directors are aware as at the date remuneration will be proposed at the Directors’ Remuneration Report comply of this Statement, there is no relevant audit forthcoming Annual General Meeting. with the Companies Act 2006 and, for information (as defined by section 418(3) the consolidated financial statements, of the Companies Act 2006) of which the Article 4 of the EU IAS Regulation. They Company’s auditor is unaware and the Directors’ Statements are also responsible for the system of Directors have taken all the steps they internal control, for safeguarding the assets of Responsibility ought to have taken to make themselves of the Company and the Group and, aware of any relevant audit information and The Directors are responsible for preparing hence, for taking reasonable steps for the to establish that the Company’s auditor is the Annual Report and Accounts in prevention and detection of fraud and other aware of that information. accordance with applicable law and irregularities. regulations and keeping proper accounting Annual General Meeting The Directors are responsible for the records. Detailed below are statements The Annual General Meeting of the made by the Directors in relation to their maintenance and integrity of the corporate and financial information included on the Company will be held on 8 June 2017. responsibilities, disclosure of information to The notice of meeting can be found in the the Company’s auditor and going concern. Company’s website. Legislation in the United Kingdom governing the preparation document which accompanies this Annual 1. Financial Statements and and dissemination of financial statements Report and Accounts. It is also available on Accounting Records may differ from legislation in other the Company’s website www.page.com. Company law of England and Wales jurisdictions. By order of the Board requires the Directors to prepare for each 2. Directors’ Responsibility financial year financial statements which Statement give a true and fair view of the state of affairs of the Company and of the Group The Board confirms to the best of its at the end of the financial year and of the knowledge that: Elaine Marriner profit or loss of the Group for that period. (i) the Group and parent company financial Company Secretary statements, prepared in accordance In preparing those financial statements the 7 March 2017 with IFRS as adopted by the EU, give a Directors are required to: true and fair view of the assets, liabilities, (i) state whether the Group financial financial position and profit of the Group statements have been prepared in and parent company; and accordance with International Financial (ii) the Directors’ Report and the Strategic Reporting Standards (“IFRS”) as Report include a fair review of the adopted for use in the EU and Article 4 development and performance of the of the EU IAS Regulations; business and the position of the Group (ii)  state whether the parent company together with a description of the financial statements have been principal risks and uncertainties that prepared in accordance with IFRS as it faces. adopted for use in the EU;

75 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 76 Annual Report 2016 PageGroup e we performed full or specific audit Balance sheet Statement of changes in equity Cash flow statement Related notes 1 to 24 Parent company Parent ecognition for permanent and temporary placements oup materiality of £4.9m which represents 5% of profit 5% of profit oup materiality of £4.9m which represents The components wher W Revenue r Pr W procedures accounted for 85% of revenue, 80% of gross profit, profit, 80% of gross accounted for 85% of revenue, procedures tax and 78% of total assets. before 90% of profit components. the Group and audit procedures on specific balances for a further and audit procedures the Group five components.  Overall Gr tax before

• • • 27 overtheremaining e performedotherauditprocedures • • ovision fortransferpricing • e performedafullscopeauditofsixcomponentoperations

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006, and, as regards the regards as and, 2006, Act Companies the of requirements the with accordance in prepared been have statements financial the 4 of the IAS Regulation. financial statements, Article Group the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; European with IFRSs as adopted by the in accordance prepared have been properly financial statements the Group by the European with IFRSs as adopted in accordance prepared statements have been properly company financial the parent of the Companies Act 2006; and with the provisions Union as applied in accordance PageGroup plc’s Group financial statements and Parent company financial statements (the “financial statements”) give a true (the “financial statements”) give a company financial statements and statements and Parent financial Group plc’s PageGroup the for profit 31 December 2016 and of the Group’s as at affairs company’s and of the parent of the Group’s fair view of the state year then ended;

Materiality Audit scope Risks of material misstatement Consolidated statement of comprehensive Consolidated statement of comprehensive income Consolidated balance sheet Group Consolidated income statement Consolidated statement of changes in equity Consolidated cash flow statement Related notes 1 to 24 any opinion on these individual areas. procedures below which were designed in the context of the financial statements as a whole and, consequently, we do not express we do not express statements as a whole and, consequently, designed in the context of the financial which were below procedures allocation of resources in the audit and the direction of the efforts of the audit team. In addressing these risks, we have performed the of the audit team. In addressing of the efforts in the audit and the direction allocation of resources We identified the risks of material misstatement described below as those that had the greatest effect on our overall audit strategy, the on our overall audit strategy, effect identified the risks of material misstatement described below as those that had the greatest We Our assessment of risk of material misstatement accordance with the provisions of the Companies Act 2006. with the provisions accordance Overview of our audit approach Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in the parent as regards Union and, (IFRSs) as adopted by the European Standards The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reportingreporting framework that has been applied in their preparation The financial

PageGroup plc’s financial statements comprise: plc’s PageGroup What we have audited • • • In our opinion: • Our opinion on the financial statements on the financial Our opinion Independent Auditor’s Report to the Members of PageGroup plc of PageGroup the Members Report to Auditor’s Independent Key observations communicated to the Risk Our response to the risk Audit Committee

Revenue recognition for permanent and We performed full and specific scope audit procedures over this risk We concluded that revenue temporary placements area in 11 components, which covered 85% of the revenue balance. recognised for permanent The Group has reported permanent We performed following procedures in full and specific scope and temporary placements placement revenues of £476.3million components: is correctly recorded in (2015: £431.3million) and temporary • Updated our understanding of the revenue processes at all full accordance with the Group’s placement revenue of £719.8million (2015: scope and specific scope components. We independently tested revenue recognition criteria £633.7million). key management controls around recognition and measurement and IFRS, and that the provision for expected For permanent placement revenue, of revenue at three of six full scope components and three of revenue reversals was there is a risk around the timing of the five specific scope components. For the other components, we reasonably estimated. recognition of revenue as a contract may increased our substantive sampling procedures as described be agreed with a customer and candidate below. several months in advance of the start of • Selected a sample at all full scope and specific scope components employment. Consequently, there is a of permanent and temporary placement revenue transactions for risk that: detailed transaction testing to verify that the revenue recognition • r evenue recognition may occur before criteria had been met and to verify that the transaction had actually revenue recognition criteria have been occurred and was recorded at the correct value. We performed met analytical procedures at all full scope and specific scope components. • r evenue is not recognised in the correct period • Performed period-end cut off testing at all full scope and specific scope components focusing on material items to check all revenue • the placement is not taken up as recognition criteria for the placements had been met and revenue agreed, which could result in the had been recognised in the correct period. reversal of previously recorded revenue • Compar ed the level of actual permanent placement revenue For temporary placement revenue there is reversals, which occur as a result of non-completion of contractual a risk that: placements, to the provision recorded against accrued income to • r evenue may be recognised when determine if the provision was appropriate. an approved timesheet has not been For all other components which covered 15% of the revenue balance, submitted we performed audit procedures centrally on a country by country • r evenue is recorded for days worked basis to address the risk of an undetected material error occurring prior to submission of the weekly in these components. Such procedures included analytical review timesheets of revenue and gross profit, and ratio analysis of key performance Refer to the Audit Committee Report indicators including revenue and gross profit per fee earner. The (page 50); Accounting policies (page 90); processes and group-wide controls for these components are and Note 2 of the Consolidated Financial consistent with the rest of the Group. Statements (page 91)

Provision for transfer pricing With assistance from our international tax specialists: We concluded that Charges between components of the • we checked whether the model employed by management management’s judgements Group are potentially open to challenge by appropriately reflects the country risks; in relation to the transfer pricing provision are local tax jurisdictions, especially as 75% • we sample tested the data input to the model and its arithmetical reasonable. of the Group’s operations are overseas. integrity; Significant management judgement is • using our experience of country transfer pricing risks we involved in determining the appropriate challenged the assumptions and judgements inherent in the model; level of provision to cover any adjustments and to expected tax liabilities that might arise. There is a risk that judgements • we compared the approach taken by the Group to other groups. and estimates applied in determining tax provisions may not be appropriate and supportable. Refer to the Audit Committee Report (page 50); Accounting policies (page 90); and Note 7 of the Consolidated Financial Statements (page 95)

In the prior year, our auditor’s report included a risk of material misstatement in relation to the following areas of audit focus. We have assessed that these no longer represent a significant risk of material misstatement: 1. Accounting for Page Recruitment System (PRS) no longer represents a significant risk due to a reduction in the transition and execution risk as the implementation is complete. This means that the risk of impairment or accelerated depreciation is reduced. 2. Recognition of deferred tax assets on US tax losses and timing differences is dependent on the level of confidence in US profit projections. Given the 3-year track record of profitability in the US, we now believe that the risk related to recoverability is lower than in prior years.

77 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 78 57% 56% 26% 81% 49% 24% 83% 53% 29% 82% 60% 27% 88% 2015 Total assets 22% 57% 21% 78% 68% 22% 90% 57% 23% 80% 62% 23% 85% 2016 21% Other procedures Annual Report 2016 PageGroup 68% tax Profit before 10% 22% 57% Specific Scope components Full scope components Specific scope components Total Full scope components Specific scope components Total Full scope components Specific scope components Total Full scope components components Specific scope Total Gross profit 20% 23% 62% Revenue 15% Full Scope components 15% of the Group’s revenue; 15% of the Group’s profit; gross 20% of the Group’s tax; and before profit 10% of the Group’s total assets. 22% of the Group’s

Total assets Total Profit before tax before Profit Gross profit profit Gross Revenue 23% These 11 reporting components where we performed audit procedures accounted for: accounted audit procedures we performed where components 11 reporting These Changes from the prior year Changes from this was whereas 1. The USA has been designated as full scope component this year, We have changed the designation to designated as specific scope in the prior year. key metrics. quantitative full scope coverage of the Group’s obtain greater 2. Brazil is not identified as full or specific scope component this year as it is not financial metrics shown above. significant based on the Group’s Involvement with component teams audit, we determined the type of to the Group In establishing our overall approach work that needed to be undertaken at each of the components by us, as the primary other EY global network firms audit engagement team, or by component auditors from operating under our instruction. Of the 6 full scope components, audit procedures Head Office, performed on a part of one of these components, being the Group’s were audit team. For the largest full scope component, the United by the Group directly audit senior manager from Kingdom, the component audit team included the Group 5 full scope components and the 5 specific audit team. For the remaining the Group • • • • than 2% of the Group’s individually greater 27 components are None of the remaining tax, and 2% of before profit 2% of the Group’s profit, gross 2% of the Group’s revenue, we performed other audit procedures, total assets. For these components, the Group’s on a country-by-country basis, obtaining an procedures including analytical review components, including the over all wide entity level controls understanding of the group and the management visits, oversight and review, level of CEO, CFO and other group to of those visits to respond and the results scope of the annual Internal Audit programme financial statements. to the Group any potential risks of material misstatement the audit work performed. from The charts below illustrate the coverage obtained The audit scope of these specific scope components may not have included testing ofThe audit scope of these specific scope but will have contributed to the coverage ofall significant accounts of the component significant accounts tested for the Group. 27 components together represent: The remaining

and Switzerland. Italy, Germany, the Netherlands, Spain Germany, Italy, specific scope components comprised these accounts or their risk profile. The these accounts or their risk profile. statements either because of the size of accounts in the group financial accounts in the group the greatest impact on the significant the greatest we considered had the potential for we considered accounts within that component that performed audit procedures on specific performed audit procedures (“specific scope components”), we For the remaining 5 components For the remaining on their size or risk characteristics. the USA. These were selected based the USA. These were France, China, Hong Kong, Australia and which comprised the United Kingdom, components (“full scope components”), performed a full scope audit of 6 Of the 11 components selected, we principal business units within the Group. reporting components that represent the components that represent reporting statements, we selected 11 of the 38 significant accounts in the financial adequate quantitative coverage of statements, and to ensure we had statements, and to ensure misstatement to the Group financial misstatement to the Group In assessing the risk of material component in relation to the Group. component in relation management to determine the size of a tax as this is a key measure used by tax as this is a key measure addition to revenue and profit before before and profit addition to revenue determine our group audit scope in determine our group We used gross profit as a measure to as a measure profit gross used We work to be performed at each entity. work to be performed Audit results when assessing the level of when assessing the Audit results and other factors such as recent Internal as recent and other factors such changes in the business environment environment changes in the business effectiveness of group-wide controls, controls, of group-wide effectiveness the organisation of the group and group the organisation of the We take into account size, risk profile, profile, take into account size, risk We the consolidated financial statements.the consolidated financial this enables us to form an opinion onthis enables us to form entity within the Group. Taken together, together, Taken entity within the Group. determine our audit scope for eachdetermine our audit scope allocation of performance materialityallocation of evaluation of materiality and ourevaluation Our assessment of audit risk, ourOur assessment Tailoring the scope Tailoring The scope of our auditThe scope scope components, where the work was account or balance level. It is set at an the directors; and the overall presentation performed by component auditors, we amount to reduce to an appropriately low of the financial statements. In addition, determined the appropriate level of group level the probability that the aggregate of we read all the financial and non-financial team involvement as described below to uncorrected and undetected misstatements information in the Annual Report and enable us to determine that sufficient audit exceeds materiality. Accounts to identify material inconsistencies evidence had been obtained as a basis for with the audited financial statements and On the basis of our risk assessments, our opinion on the Group as a whole. to identify any information that is apparently together with our assessment of the materially incorrect based on, or materially During the current year’s audit cycle, visits Group’s overall control environment, inconsistent with, the knowledge acquired were undertaken by the Group audit partner our judgement was that performance by us in the course of performing the and the Group audit senior manager to materiality was 75% (2015: 50%) of our audit. If we become aware of any apparent the UK and France. A visit to the Group’s planning materiality, namely £3.6million material misstatements or inconsistencies new European shared service centre (SSC) (2015: £2.25million). The calculation of we consider the implications for our report. based in Barcelona, Spain was undertaken performance materiality was increased by the Group audit senior manager. to 75% in the current year due to our These visits involved discussing the audit low expectation of misstatements for the Respective responsibilities of approach with the component teams and current year. Misstatements identified in the directors and auditor any issues arising from their work, reviewing prior year were one-off and lower in value As explained more fully in the Directors’ key audit working papers on risk areas and and number compared to earlier years, and Responsibilities Statement set out on page attending the audit closing meeting with are therefore not expected to recur in the 75, the directors are responsible for the local management. The purpose of the visit current year. preparation of the financial statements to the SSC was to obtain an understanding Audit work at components for the purpose and for being satisfied that they give a true of the SSC operations and perform of obtaining audit coverage over significant and fair view. Our responsibility is to audit walkthrough procedures for all significant financial statement accounts is undertaken and express an opinion on the financial processes in relation to the countries now based on a percentage of total performance statements in accordance with applicable supported by the SSC. The Group audit materiality. The performance materiality set law and International Standards on Auditing team attended 3 regional audit closing for each component is based on the relative (UK and Ireland). Those standards require meetings with regional management and scale and risk of the component to the us to comply with the Auditing Practices the Group CFO, at which all key areas of Group as a whole and our assessment of Board’s Ethical Standards for Auditors. judgement were discussed and challenged. the risk of misstatement at that component. This report is made solely to the company’s The Group audit team interacted regularly In the current year, the range of performance members, as a body, in accordance with with the component teams where materiality allocated to components Chapter 3 of Part 16 of the Companies Act appropriate during various stages of was £0.7million to £1.18million (2015: 2006. Our audit work has been undertaken the audit, reviewed key working papers £0.45million to £1.13million). so that we might state to the company’s and were responsible for the scope and Reporting threshold members those matters we are required direction of the audit process. This, together to state to them in an auditor’s report and An amount below which identified with the additional procedures performed at for no other purpose. To the fullest extent misstatements are considered as being Group level, gave us appropriate evidence permitted by law, we do not accept or clearly trivial. for our opinion on the Group financial assume responsibility to anyone other than statements. We agreed with the Audit Committee that the company and the company’s members we would report to them all uncorrected as a body, for our audit work, for this report, audit differences in excess of £0.24million or for the opinions we have formed. Our application of materiality (2015: £0.23million), which is set at 5% of We apply the concept of materiality planning materiality, as well as differences in planning and performing the audit, below that threshold that, in our view, Opinion on other matters in evaluating the effect of identified warranted reporting on qualitative grounds. prescribed by the Companies misstatements on the audit and in forming We evaluate any uncorrected Act 2006 our audit opinion. misstatements against both the quantitative In our opinion: Materiality measures of materiality discussed above • the part of the Directors’ Remuneration The magnitude of an omission or and in light of other relevant qualitative Report to be audited has been misstatement that, individually or in the considerations in forming our opinion. properly prepared in accordance with aggregate, could reasonably be expected the Companies to influence the economic decisions of the Scope of the audit of the financial Act 2006; and users of the financial statements. Materiality statements • based on the work undertaken in the provides a basis for determining the nature An audit involves obtaining evidence about course of the audit: and extent of our audit procedures. the amounts and disclosures in the financial – the information given in the Strategic We determined materiality for the Group statements sufficient to give reasonable Report and the Directors’ Report to be £4.9million (2015: £4.5million), assurance that the financial statements are for the financial year for which the which is 5% of profit before tax (2015: 5% free from material misstatement, whether financial statements are prepared profit before tax). We believe that profit caused by fraud or error. This includes an is consistent with the financial before tax is the principal consideration assessment of: whether the accounting statements; for stakeholders in assessing the financial policies are appropriate to the Group’s – the Strategic Report and the performance of the Group. and the Parent company’s circumstances Directors’ Report have been Performance materiality and have been consistently applied and prepared in accordance with adequately disclosed; the reasonableness The application of materiality at the individual applicable legal requirements. of significant accounting estimates made by

79 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 80

We have no exceptions have We to report. We have no exceptions We to report. We have no exceptions We to report. Annual Report 2016 PageGroup We have nothing material We to add or to draw attention to.

ning the preparation and dissemination of financial statements may differ from legislation in from and dissemination of financial statements may differ ning the preparation  audit. the directors’ confirmation in the annual report that they have carried out a robust carried out a report that they have confirmation in the annual the directors’ including those that would assessment of the principal risks facing the entity, performance, solvency or liquidity; its business model, future threaten that describe those risks and explain how they in the annual report the disclosures being managed or mitigated; are statement in the financial statements about whether they considered the directors’ to adopt the going concern it appropriate basis of accounting in preparing ability them, and their identification of any material uncertainties to the entity’s the date of to continue to do so over a period of at least twelve months from of the financial statements; and approval as to how they have assessed explanation in the annual report the directors’ they over what period they have done so and why of the entity, the prospects and their statement as to whether they consider that period to be appropriate, expectation that the entity will be able to continue in operation have a reasonable and meet its liabilities as they fall due over the period of their assessment, drawing attention to any necessary qualifications disclosures including any related or assumptions. certain disclosures of directors’ remuneration specified by law are not made; or not made; specified by law are remuneration of directors’ certain disclosures for we require all the information and explanations we have not received our concern,going to longer- and 30, page on out set relation in statement directors’ the on page 30; and set out term viability, the part of the Corporate Governance to the company’s Statement relating of the UK Corporate Governance Code specified forcompliance with the provisions our review. adequate accounting records have not been kept by the parent company, or returns company, have not been kept by the parent adequate accounting records not visited by us; or branches from adequate for our audit have not been received of the Directors’ company financial statements and the part the parent the accounting with not in agreement Remuneration Report to be audited are or and returns; records ncial statements; or financial statements; in the audited with the information materially inconsistent our inconsistent with, based on, or materially incorrect materially apparently orperforming our audit; in the course of acquired of the Group knowledge otherwise misleading.

re required to give a statement as to whether we have anything material to add to give a statement as to whether we have anything material required are We to: or to draw attention to in relation • • • • • • to review: required are We • • its environment and understanding of the Company and its environment In light of the knowledge of the audit, we have identified no material misstatements in theobtained in the course Report. Strategic Report or Directors’ to you if, in our opinion: to report required are We • • We are required to report to you if, in our opinion, financial and non-financial to you if, in our opinion, to report required are We is: report in the annual information • • • In particular, we are required to report whether we have identified any inconsistencies whether report to required we are In particular, in the course of performing the audit and the acquired between our knowledge and accounts taken as a consider the annual report statement that they directors’ information necessary the balanced and understandable and provides whole is fair, and strategy; performance, business model to assess the entity’s for shareholders those matters that we addresses appropriately report and whether the annual e been disclosed. committee that we consider should hav communicated to the audit aintenance and integrity of the PageGroup plc web site is the responsibility of the directors; the work carried out by the of the directors; plc web site is the responsibility aintenance and integrity of the PageGroup

  Legislation in the United Kingdom gover other jurisdictions. The m auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that responsibility the auditors accept no auditors does not involve consideration of these matters and, accordingly, on the web site. initially presented to the financial statements since they were may have occurred

Listing Rules review requirements Companies Act 2006 reporting ISAs (UK andISAs (UK reporting Ireland) ISAs (UK and reporting Ireland) 2. 1. Bob Forsyth (Senior statutory auditor) Notes: 7 March 2017 7 March for and on behalf of Ernst & Young LLP, Statutory Auditor LLP, for and on behalf of Ernst & Young London or liquidity of the entity

Statement on the directors’ assessment of the principal risks that would threaten the solvency Statement on the directors’ assessment Matters on which we are required to report by exception by to report are required we on which Matters CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2016

2016 2015 Note £’000 £’000 Revenue 2 1,196,125 1,064,945 Cost of sales (575,091) (508,840) Gross profit 2 621,034 556,105 Administrative expenses (520,082) (466,034) Operating profit 2 100,952 90,071 Financial income 5 117 1,116 Financial expenses 5 (1,073) (490) Profit before tax 2 99,996 90,697 Income tax expense 6 (27,900) (24,489) Profit for the year 3 72,096 66,208

Attributable to: Owners of the parent 72,096 66,208

Earnings per share Basic earnings per share (pence) 9 23.1 21.3 Diluted earnings per share (pence) 9 23.1 21.1 The above results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2016

2016 2015 £’000 £’000 Profit for the year 72,096 66,208 Other comprehensive income/(loss) for the year Items that may subsequently be reclassified to profit and loss: Currency translation differences 22,105 (5,825) Loss on hedging instruments (2,468) (173) Total comprehensive income for the year 91,733 60,210 Attributed to: Owners of the parent 91,733 60,210

81 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 82 – – – – – – – – – – – – – 932 2015 3,258 £’000 90,268 (87,690) 505,912 323,764 418,222 505,912 636,601 636,601 418,222 (724,291) (724,291) (724,291) 1,142,513 – – – – – – – – – – – – – 932 2016 3,259 £’000 90,458 Company 509,872 280,728 375,377 509,872 664,008 664,008 375,377 (798,503) (798,503) (134,495) (798,503) Annual Report 2016 PageGroup 1,173,880 – 932 2015 £’000 1,733 2,693 8,814 3,258 (1,167) (5,390) (6,557) 34,533 10,641 21,411 14,055 74,425 95,018 90,268 (22,738) (61,365) 178,025 221,759 214,732 318,564 153,891 221,759 392,989 (141,935) (164,673) (171,230) – 932 (430) 2016 Group 1,696 7,640 3,259 £’000 36,187 32,746 29,461 16,547 91,531 12,743 92,796 90,458 (9,944) 192,107 246,561 259,328 364,867 165,404 246,561 (24,404) (10,374) (72,941) 456,398 (175,059) (199,463) (209,837) 7 2 7 2 11 10 12 11 16 13 13 19 14 14 16 17 18 18 18 18 Note

The Company’s profit for the financial year amounted to £8.8m (2015: £3.6m). profit The Company’s Kelvin Stagg, Chief Financial Officer e (including assets Computer softwar held under construction) - - Goodwill and other intangibles

Property, plant and equipment Property, Non-current assets Non-current Investments Retained earnings Intangible assets Deferred tax assets Deferred Total equity Total

Other receivables Other receivables Trade and other receivables and other Trade Current assets Current Current tax receivable Current Cash and cash equivalents Total assets Total Trade and other payables and other Trade Current liabilities Current Current tax payable Current Net current assets/(liabilities) Net current Other payables Non-current liabilities Non-current Deferred tax liabilities Deferred Total liabilities Total Net assets Called-up share capital Called-up share Capital and reserves Share premium Share Capital redemption reserve Capital redemption Reserve for shares held in the employee benefit trust Reserve for shares Currency translation reserve Currency

As at 31 December 2016 As at 31 December CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS BALANCE COMPANY PARENT AND CONSOLIDATED Steve Ingham, Chief Executive Officer Signed on behalf of the Board of Directors of Directors Signed on behalf of the Board Directors and authorised for issue on 7 March 2017. and authorised for issue on 7 March Directors plc (Company Number 3310225) set out on pages 81 to 112 were approved by the Board of by the Board approved plc (Company Number 3310225) set out on pages 81 to 112 were The financial statements of PageGroup CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2016

Reserve for shares Capital held in the Currency Called-up Share redemption employee translation Retained Total share capital premium reserve benefit trust reserve earnings equity 2015 Note £’000 £’000 £’000 £’000 £’000 £’000 £’000 Balance at 1 January 2015 3,219 75,215 932 (72,407) 16,466 192,798 216,223

Currency translation differences – – – – (5,825) – (5,825) Net expense recognised directly in equity – – – – (5,825) – (5,825) Loss on hedging instruments – – – – – (173) (173) Profit for the year – – – – – 66,208 66,208 Total comprehensive (loss)/income for the year – – – – (5,825) 66,035 60,210 Exercise of share plans 39 15,053 – – – 7,770 22,862

Transfer from reserve for shares held in the employee benefit trust – – – 11,042 – (11,042) – Credit in respect of share schemes – – – – – 6,801 6,801 Credit in respect of tax on share schemes – – – – – 728 728 Dividends 8 – – – – – (85,065) (85,065) 39 15,053 – 11,042 – (80,808) (54,674)

Balance at 31 December 2015 and 1 January 2016 3,258 90,268 932 (61,365) 10,641 178,025 221,759

2016 Currency translation differences – – – – 22,105 – 22,105

Net income recognised directly in equity – – – – 22,105 – 22,105 Loss on hedging instruments – – – – – (2,468) (2,468) Profit for the year – – – – – 72,096 72,096

Total comprehensive income for the year – – – – 22,105 69,628 91,733

Purchase of shares held in employee benefit trust – – – (15,058) – – (15,058)

Exercise of share plans 1 190 – – – 173 364

Transfer from reserve for shares held in the employee benefit trust – – – 3,482 – (3,482) –

Credit in respect of share schemes – – – – – 4,442 4,442 Debit in respect of tax on share schemes – – – – – (368) (368) Dividends 8 – – – – – (56,311) (56,311) 1 190 – (11,576) – (55,546) (66,931) Balance at 31 December 2016 3,259 90,458 932 (72,941) 32,746 192,107 246,561

83 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 84 191 6,801 3,630 3,630 8,833 8,833 4,442 £’000 15,092 (63,172) (85,065) (56,311) (51,678) 418,222 477,764 375,377 Total equity Total – – 6,801 3,630 3,630 8,833 8,833 4,442 £’000 Annual Report 2016 PageGroup (78,264) (85,065) 323,764 398,398 (56,311) (51,869) 280,728 earnings Retained

– – – – – – – – – – – – 932 932 932 £’000 Capital reserve reserve redemption redemption – – – – – – – – 190 190 Share Share £’000 90,268 15,053 15,053 75,215 90,458 premium premium – – – – – – – – 1 1 39 39 3,258 3,219 £’000 3,259 Called-up share capital capital share 8 8 Note

and 1 January 2016 Balance at 31 December 2015 Dividends Credit in respect of share schemes of share respect in Credit Exercise of share plans of share Exercise the year Total comprehensive income for comprehensive Total Profit for the year for Profit Balance at 1 January 2015 Balance at 1 January Company Profit for the year Profit 2016 the year Total comprehensive income for income comprehensive Total Exercise of share plans of share Exercise Credit in respect of share schemes share of in respect Credit Dividends Balance at 31 December 2016

For the year ended 31 December 2016 ended 31 December For the year STATEMENT OF CHANGES IN EQUITY – PARENT COMPANY COMPANY EQUITY – PARENT CHANGES IN OF STATEMENT CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS For the year ended 31 December 2016 Group Company 2016 2015 2016 2015 Note £’000 £’000 £’000 £’000 Profit before tax 2 99,996 90,697 8,833 3,630 Depreciation and amortisation charges 10/11 17,065 15,417 – – Loss on sale of property, plant and equipment, and computer software 186 690 – – Share scheme charges 4,235 6,869 – – Net finance cost/(income) 956 (626) – – Operating cash flow before changes in working capital and finance costs 122,438 113,047 8,833 3,630 Increase in receivables (21,061) (20,248) (27,407) (230) Increase in payables 19,942 8,804 74,212 63,366 Cash generated from operations 121,319 101,603 55,638 66,766 Income tax paid (32,499) (19,091) – – Net cash from operating activities 88,820 82,512 55,638 66,766

Cash flows from investing activities Proceeds in respect of share scheme recharges to subsidiaries – – 482 3,207 Purchases of property, plant and equipment 10 (14,111) (9,161) – – Purchases of intangibles 11 (11,153) (6,015) – – Proceeds from the sale of property, plant and equipment, and computer software 1,890 374 – – Interest received 117 1,116 – – Net cash (used in)/from investing activities (23,257) (13,686) 482 3,207

Cash flows from financing activities Dividends paid (56,311) (85,065) (56,311) (85,065) Interest paid (460) (269) – – Issue of own shares for the exercise of options 364 22,619 191 15,092 Purchase of shares held in the employee benefit trust (15,058) – – – Net cash used in financing activities (71,465) (62,715) (56,120) (69,973)

Net (decrease)/increase in cash and cash equivalents (5,902) 6,111 – – Cash and cash equivalents at the beginning of the year 95,018 90,012 – – Exchange gain/(loss) on cash and cash equivalents 3,680 (1,105) – –

Cash and cash equivalents at the end of the year 19 92,796 95,018 – –

85 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 86 Annual Report 2016 PageGroup IFRS 15 – Revenue from Contracts from 15 – Revenue IFRS with Customers and issued in May 2014 IFRS 15 was account a five-step model to establishes with contracts arising from for revenue is Under IFRS 15, revenue customers. the reflects that amount an at recognised an entity expectsconsideration to which for transferringto be entitled in exchange a customer. goods or services to will standard The new revenue revenue supersede all current under IFRS. requirements recognition application or Either a full retrospective application is retrospective a modified on for annual periods beginning required Early adoptionor after 1 January 2018. current is permitted. It is the Group’s on the plan to adopt the new standard the full date using effective required method. retrospective is in the business of providing The Group services. IFRS 15 requires recruitment once value be recognised to revenue by the customer and has been received when the performance obligations have the been satisfied. IFRS 15 also prohibits fees. of up-front recognition performed a During 2016, the Group assessment of IFRS 15, preliminary which is subject to changes arising from ongoing analysis. As a detailed a more assessment, preliminary of this result we do not expect any adjustment to be material being less than £1m. Further detail is included below. to transition to IFRS 15, the In preparing considering the following: is Group Revenue earned on a contingent basis (c. 26% of revenue) recognised revenue Currently permanent placements on a from contingent basis is typically based of the candidate’s on a percentage package, this income remuneration at the date an offer being recognised is accepted by a candidate and where a start date has been determined. It anticipated, but not includes revenue invoiced, at the balance sheet date, accrued on the which is correspondingly balance sheet within accrued income. is made against accrued A provision income for possible cancellations of placements prior to, or shortly after, the commencement of employment. view is that this basis of Our current appropriate remains recognition revenue as our only performance obligation (the placement of the candidate) has do not therefore been performed. We of the expect any adjustment as a result earnedtransition to IFRS 15 of revenue on a contingent basis.

e Initiative – AS 7 Disclosur Amendments to IAS 7; effective Amendments to IAS 7; effective date 1 January 2017 1 January 2018 IAS 12 Recognition of Deferred Tax Tax IAS 12 Recognition of Deferred Losses; Assets for Unrealised date 1 January 2017 effective IFRS 2 Classification and of Share-based Measurement effective Payment Transactions; date 1 January 2018 22 Foreign IFRIC Interpretation and Advance Transactions Currency date Consideration; effective to IFRSs Annual Improvements I  IFRS 9 Financial Instruments; date 1 January 2018 effective Contracts IFRS 15 Revenue from date with Customers; effective 1 January 2018 date IFRS 16 Leases; effective date 2014-2016 Cycle; effective 1 January 2017/1 January 2018 IAS 16 and IAS 38 Clarification of Acceptable Methods of and Amortisation Depreciation IFRS 7 Financial Instruments:  IFRS 7 Financial Instruments: Disclosures FinancialIFRS 10 Consolidated Statements of Financial IAS 1 Presentation Statements IAS 19 Employee Benefits 1 January 2019

(iii) Employee Benefit Trust Benefit (iii) Employee by plc held in PageGroup Shares in a reduction shown as the trust are funds. shareholders’ in accounting policyChanges – new accounting standards, and amendments interpretations adopted are The accounting policies of the previous consistent with those for the followingfinancial years except of as effective amendments to IFRS 1 January 2016: • • • • • • • • • or The adoption of these standards did not have any impact interpretations on the accounting policies, financial position or performance of the Group. issued but not yet Standards effective that and interpretations The standards up to but not yet effective, issued, are the date of issuance of the Group’s disclosed financial statements are intends to adopt The Group below. if applicable, when they these standards, become effective. • • • •

impairment. to the extent that there is no evidence of to the extent that there same way as unrealised gains, but only same way as unrealised Unrealised losses are eliminated in the losses are Unrealised the consolidated financial statements. transactions, are eliminated in preparing eliminated in preparing transactions, are expenses arising from intragroup intragroup expenses arising from gains and losses or income and Intragroup balances and any unrealised balances and any unrealised Intragroup consolidation (ii) Transactions eliminated on (ii) Transactions its power over the investee. the ability to affect those returns through through those returns the ability to affect involvement with the investee and has rights, to variable returns from its rights, to variable returns from when the Group is exposed, or has when the Group December 2016. Control is achieved December 2016. Control the Group and its subsidiaries as at 31 the Group comprise the financial statements of The consolidated financial statements (i) Subsidiaries Basis of consolidation result of increased dividend income. dividend of increased result the Company’s profit this year is as a profit the Company’s £8.8m (2015: £3.6m). The increase in £8.8m (2015: £3.6m). The increase profit for the financial year amounted for to profit financial statements. The Company’s financial statements. The Company’s has not been included as part of these profit and loss account of the Company and profit 408 of the Companies Act 2006, the undertakings. As permitted by Section Company and all its subsidiary plc consolidate the results of the plc consolidate the results The financial statements of PageGroup The financial statements of PageGroup Basis of preparation European Union. European with current IFRS as adopted by the with current cost convention and in accordance cost convention and in accordance have been prepared under the historical have been prepared The Company financial statements with Article 4 of the EU IAS Regulation. European Union and therefore complies Union and therefore European Standards (IFRS) as adopted by the Standards current Internationalcurrent Financial Reporting and loss. This is in accordance with and loss. This is in accordance instruments) at fair value through profit profit instruments) at fair value through and liabilities (including derivativeand liabilities (including by the revaluation of financial assets of financial by the revaluation historical cost convention modifiedhistorical cost convention have been prepared under the have been prepared The consolidated financial statementsThe consolidated financial under the Companies Act.under the Companies incorporated in the United Kingdomincorporated in the United PageGroup plc is a company PageGroup policies Statement of compliance 1. Significant accounting1. Significant For the year ended 31 December 2016 2016 ended 31 December For the year Statements Notes to the Financial the Financial Notes to Revenue earned on a retained basis Presentation and disclosure under IAS 17. Note 21 gives the current (c. 9% of revenue) requirements lease portfolio. IFRS 16 is effective for annual periods beginning on or after Currently revenue recognised from IFRS 15 also provides presentation and 1 January 2019. Early application is permanent placements on a retained disclosure requirements, which are more permitted, but not before an entity applies basis is typically based on a percentage detailed than under current IFRS and IFRS 15. A lessee can choose to apply the of the candidate’s remuneration package, may result in an increase in the volume of standard using either a full retrospective this income being recognised on the disclosures required in the Group’s financial or a modified retrospective approach. The completion of defined stages of work. statements. IFRS requires an entity to standard’s transition provisions permit The defined stages are “Retainer”, provide users of financial statements with certain reliefs. “Shortlist” and “Completion”. comprehensive information about the nature, amount, timing and uncertainty of In 2017, the Group plans to assess One area of contention is around the revenue and cash flows arising from the the potential effect of IFRS 16 on its first stage, retainer revenue. As IFRS entity’s contracts with customers. The consolidated financial statements. It is 15 effectively prohibits the recognition Group has already commenced a review our current intention to adopt the full of upfront fees as revenue, we need to of the required disclosures, appropriate retrospective approach to this standard to be able to demonstrate that the client systems, internal controls, policies and provide transparency to the users of the gets an element of value from this initial procedures necessary to collect and financial statements. stage and if so, how much. As the client disclose the required information. receives a retainer pack, information on the IFRS 9 – Financial Instruments market, salary levels, potential candidate IFRS 16 – Leases The Group doesn’t anticipate that IFRS 9 requirements, and production of job IFRS 16 was issued in January 2016 will have a material impact on the Group’s specifications at this first stage, there is and it replaces IAS 17 Leases, IFRIC 4 financial statements once it becomes therefore clearly an element of value. The Determining whether an Arrangement effective from 1 January 2018. value received by the client in the latter two contains a Lease, SIC-15 Operating stages also needs to be defined and this, The Group has not early adopted any other Leases-Incentives and SIC-27 Evaluating combined with the value received at the standard, interpretation or amendment that the Substance of Transactions Involving first stage, will determine the percentage has been issued but is not yet effective. the Legal Form of a Lease. IFRS 16 sets of revenue which should be recognised in out the principles for the recognition, No other issued but not endorsed each of the three stages. measurement, presentation and disclosure amendments to IFRS will have a material It is therefore possible that the percentage of leases and requires lessees to account impact on the Group’s financial statements of revenue recognised at each stage for all leases under a single on-balance once they become endorsed and effective. will differ following transition to IFRS 15. sheet model similar to the accounting for Going concern However, bearing in mind the relatively finance leases under IAS 17. low percentage of retained revenue as The Directors have, at the time of IFRS 16 requires all leases in excess of $5k a proportion of total revenue, combined approving the financial statements, a and 12 months in length to be recognised with the adjustment only being required reasonable expectation that the Company as an asset on the balance sheet, with a to retained revenue earned in the last few and the Group have adequate resources corresponding lease liability. Lessees will weeks of the year having to be deferred to continue in operational existence for the be required to separately recognise the or anticipated (in turn offset by revenue foreseeable future. Thus, they continue interest expense on the lease liability and coming into the start of the year being to adopt the going concern basis of the depreciation expense on the right-of- deferred or anticipated from an earlier accounting in preparing the financial use asset. period), we do not expect any adjustment statements. Further detail is contained in to be material with our current estimate Lessees will be also required to re-measure the Strategic Report on page 30. being less than £1m. the lease liability upon the occurrence of a) Revenue and income recognition certain events (e.g. a change in the lease Temporary revenue (c. 60% of revenue) term, a change in future lease payments Revenue, which excludes value added Revenue from temporary placements, resulting from a change in an index or rate tax (VAT), constitutes the value of services which represents amounts billed for the used to determine those payments). The undertaken by the Group from its services of temporary staff, including the lessee will generally recognise the amount principal activities, which are recruitment salary cost of these staff is recognised of the re-measurement of the lease liability consultancy and other ancillary services. when the service has been provided. We as an adjustment to the right-of-use asset. These consist of: do not anticipate any change as a result As the Group does not currently have • revenue from temporary placements, of the transition to IFRS 15 for revenue any finance leases, the transition to IFRS which represents amounts billed earned from temporary placements. 16 is likely to have a significant effect for the services of temporary staff, Other revenue (c. 5% of revenue) on the Group, the main areas impacted including the salary cost of these staff. being leases for properties and cars. It is This is recognised when the service Other revenue earned, principally considered unlikely for there to be many has been provided; advertising revenue representing amounts other leases in the Group either exceeding • revenue from permanent placements billed to clients for expenses incurred $5k, or a term of more than 12 months. is typically based on a percentage of on their behalf, is recognised when the the candidate’s remuneration package expense is incurred. We do not anticipate IFRS 16 is expected to result in an increase and is derived from both retained any change as a result of the transition to in EBITDA for the Group, as rentals are assignments (income recognised IFRS 15 for revenue earned from temporary reclassified as depreciation and interest on completion of defined stages of placements. expense. Margins may also appear higher work) and non-retained assignments as a result. IFRS 16 also requires us to (income recognised at the date an make more extensive disclosures than

87 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 88

Annual Report 2016 PageGroup Leasehold improvements 10% per Leasehold improvements annum or period of lease if shorter and equipment fixtures Furniture, Motor vehicles 25% per annum 10-20% per annum the estimated useful lives of intangible lives useful the estimated indefinite. such lives are assets unless life. an indefinite useful Goodwill has is amortised at 20% software Computer to unless it is considered per annum the life, in which case have a shorter The is reduced. period of amortisation goodwill written off cumulative amount of of earnings in respect to retained directly December 1997acquisitions prior to 31 is £311.7m (2015: £311.7m). plant and equipment f) Property, plant and equipment are Property, less accumulatedstated at original cost is calculated Depreciation depreciation. the cost less estimated to write off over value of each asset evenly residual its expected useful life at the following rates: • • • g) Investments stated at Fixed asset investments are for impairment. cost less provision h) Impairment of assets Non-financial assets Assets that have an indefinite useful to amortisation and not subject life are annually for impairment. An tested are for the impairment loss is recognised carrying amount by which the asset’s amount. amount exceeds its recoverable amount is the higher The recoverable fair value less costs to of an asset’s sell and value in use. For the purposes of assessing impairment, assets are at the lowest levels for which grouped identifiable cash separately are there flows (cash-generating units). Financial assets A financial asset is assessed at each date to determine whether reporting is any objective evidence that it is there impaired. to be A financial asset is considered if objective evidence indicates impaired events has had that one or more on the estimated a negative effect cash flows of that asset. For future certain categories of financial asset, assets such as trade receivables, assessed not to be impaired that are subsequently assessed individually are for impairment on a collective basis. Objective evidence of impairment for a could include the portfolio of receivables past experience of collecting Group’s income and expenses for eachincome and expenses at translated income statement are and average exchange rates; exchange differences all resulting in other recognised are income. comprehensive assets and liabilities for eachassets and are presented balance sheet rate at thetranslated at the closing sheet; date of that balance

that have a functional currency different different currency a functional that have are currency the presentation from currency into the presentation translated as follows: • • e) Intangible assets (i) Goodwill the excess of Goodwill represents the cost of an acquisition over the of the share fair value of the Group’s net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised, but is tested at least annually for impairment (see accounting policy h). Gains and losses on the disposal of an entity include the to carrying amount of goodwill relating the entity sold. (ii) Computer software or acquired Computer software is stated at developed by the Group cost less accumulated amortisation (see intangible reviews below). The Group assets for any indication of software impairment annually. under construction (iii) Software under construction relates Software to the to cost capitalised in relation development of a new operating system applications. Costs are and related capitalised when they fulfil the criteria in internally developed IAS 38 regarding intangible assets. While still under tested for construction, assets are moved Assets are impairment annually. construction to under software from when they become computer software available for use. (iv) Trademark stated at cost trademarks are Acquired written down over five years on a and are the straight-line basis, which represents estimated useful life of the intangible. (v) Amortisation Amortisation is charged to the income statement on a straight-line basis over • clients for expenses incurred clients for expenses incurred on their behalf (principally when advertisements) is recognised the expense is incurred. revenue from amounts billed to from revenue offer is accepted by a candidate is accepted offer has been a start date and where The latter includesdetermined). but not anticipated, revenue the balance sheet date,invoiced, at accrued which is correspondingly within accruedon the balance sheet is made against income. A provision accrued income for possible prior to,cancellations of placements the commencement or shortly after, of employment; and

currency of a hyperinflationary economy) currency the Group entities (none of which has the the Group The results and financial position of all The results (iii) Group companies (iii) Group recognised in the income statement. recognised denominated in foreign currencies are are currencies denominated in foreign rates of monetary assets and liabilities translation at year end exchange of such transactions and from the of such transactions and from and losses resulting from the settlement from and losses resulting transactions. Foreign exchange gains transactions. Foreign rates prevailing at the dates of the rates prevailing functional currency using the exchange functional currency are translated into the respective translated into the respective are Foreign currency transactions currency Foreign (ii) Transactions and balances (ii) Transactions presentation currency. presentation which is the Company’s functional and which is the Company’s statements are presented in Sterling, presented statements are currency”). The consolidated financial currency”). the entity operates (“the functional primary economic environment in which primary economic environment measured using the currency of the using the currency measured of each of the Group’s entities are entities are of each of the Group’s Items included in the financial statements (i) Functional and presentation currency (i) Functional and presentation d) Foreign currency translation currency d) Foreign the margin on advertising income. placement of temporary candidates and candidates, the margin earned on the total placement fees of permanent cost of sales and consists of the Gross profit represents revenue less represents profit Gross c) Gross profit c) Gross costs. behalf of clients, principally advertising of temporary staff and costs incurred on and costs incurred of temporary staff Cost of sales consists of the salary cost b) Cost of sales rate applicable. outstanding and at the effective interest interest outstanding and at the effective basis, by reference to the principal basis, by reference Interest income is accrued on a time income Interest • payments, an increase in the number of Deferred tax is calculated at the tax rates n) Share-based compensation delayed payments in the portfolio, as well that are expected to apply in the period The Group operates a number of equity- as observable changes in national or local when the liability is settled or the asset settled, share-based compensation plans. economic conditions that correlate with realised. The accounting treatments for the Group default on receivables. Deferred tax is charged or credited to the and parent company are described below: The carrying amount of the financial asset income statement, except when it relates (i) Share option schemes is reduced by the impairment loss directly to items charged or credited directly to for all financial assets with the exception equity, in which case the deferred tax The fair value of the employee services of trade receivables, where the carrying is also dealt with in equity. Deferred tax received in exchange for the grant of the amount is reduced through the use of assets and liabilities are offset when there is options is recognised as an expense in an allowance account. When a trade a legally enforceable right to set off current the income statement of the Group with receivable is considered uncollectible, it is tax assets against current tax liabilities and a corresponding adjustment to equity. written off against the allowance account. when they relate to income taxes levied by In the parent company, it is capitalised Subsequent recoveries of amounts the same taxation authority and the Group as an investment, with a corresponding previously written off are credited against intends to settle its current tax assets and adjustment to equity. The total amount to the allowance account. Changes in the liabilities on a net basis. be expensed over the vesting period is carrying amount of the allowance account determined by reference to the fair value of j) Pension costs are recognised in the income statement. the options granted, excluding the impact The Group operates defined contribution of any non-market vesting conditions i) Taxation pension schemes. The assets of the (for example, earnings per share). Non- Income tax expense represents the sum of schemes are held separately from those of market vesting conditions are included in the current tax and deferred tax charges. the Group in independently administered assumptions about the number of options The tax currently payable is based on funds. The pension costs charged to that are expected to become exercisable. taxable profit for the year. Taxable profit the income statement represent the At each balance sheet date, the estimate differs from profit as reported in the income contributions payable by the Group to the of the number of options that are expected statement because it excludes items of funds during each period. to become exercisable is revised. The income or expense that are taxable or Group recognises the impact of the k) Leased assets deductible in other years and it further revision of original estimates, if any, in the excludes items that are never taxable or Leases are classified as finance leases income statement, and the corresponding deductible. The Group’s liability for current whenever the terms of the lease transfer adjustment to equity over the remaining tax is calculated using tax rates that have substantially all the risks and rewards of vesting period. been enacted or substantively enacted by ownership to the lessee. All other leases (ii) Management Incentive Plan and Long- the balance sheet date. are classified as operating leases. Term Incentive Plan Deferred tax is recognised on differences The Group does not currently have any Where deferred awards are made to between the carrying amounts of assets finance leases. Directors and senior executives under and liabilities in the financial statements Rentals under operating leases are charged either the Management Incentive Plan or and the corresponding tax bases used in to the income statement on a straight-line the Long-Term Incentive Plan, to reflect that the computation of taxable profit and is basis over the term of the lease. Benefits the awards are for services over a longer accounted for using the balance sheet received and receivable as an incentive period, the value of the expected award liability method. to enter into an operating lease are also is charged to the income statement of the Deferred tax liabilities are generally spread on a straight-line basis over the Group on a straight-line basis over the recognised for all taxable temporary lease term. vesting period to which the award relates. differences and deferred tax assets are In the Parent Company, it is capitalised l) Segment reporting recognised to the extent that it is probable as an investment, with a corresponding that taxable profits will be available against IFRS 8 requires operating segments to be adjustment to equity. which deductible temporary differences identified on the basis of internal reports o) Repurchase of share capital can be utilised. Such assets and liabilities about components of the Group that are are not recognised if the temporary regularly reviewed by the Board to allocate When share capital recognised as difference arises from goodwill or from the resources to the segments and to assess equity is repurchased, the amount of the initial recognition (other than in a business their performance. Information provided consideration paid, including any directly combination) of other assets and liabilities in to the Board is focused on regions and attributable costs, is recognised as a a transaction that affects neither the taxable as a result, reportable segments are on change in equity. profit nor the accounting profit. a regional basis. Transactions between p) Provisions segments are recorded and allocated on Deferred tax liabilities are recognised for an arms-length basis. A provision is recognised in the balance taxable temporary differences arising on sheet when the Group has a present investments in subsidiaries, except where m) Dividend distribution legal or constructive obligation as a result the Group is able to control the reversal of Dividend distribution to the Company’s of a past event, and it is probable that the temporary difference and it is probable shareholders is recognised as a liability an outflow of economic benefits will be that the temporary difference will not reverse in the Group’s financial statements in required to settle the obligation. Provisions in the foreseeable future. The carrying the period in which the dividends are are measured at the Directors’ best amount of deferred tax assets is reviewed approved by (for final dividends) or paid estimate of the expenditure required to at each balance sheet date and reduced to to (for interim dividends) the Company’s settle the obligation at the balance sheet the extent that it is no longer probable that shareholders. date, and are discounted to present value sufficient taxable profits will be available. where the effect is material.

89 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 90

Annual Report 2016 PageGroup Note 13 – trade and other receivables Note 13 – trade and tax Note 16 – deferred payments Note 17 – share-based recoverable. This requires an estimation requires This recoverable. of the recoverable amount of the amount of the recoverable assets unit to which the cash-generating the value- allocated. Estimating are to make an the Group in-use requires cash flows from the future estimate of unit and also tothe cash-generating rate in order choose a suitable discount of those value to calculate the present cash flows. • • • There is uncertainty regarding customers is uncertainty regarding There to pay as theirwho may not be able the invoices fall due. In reviewing of the provisions appropriateness of trade of recoverability in respect been consideration has receivables, given to the economic climate in the markets, the ageing of the respective debt and the potential likelihood of default. Management has estimated the likely of tax assets in respect value of deferred trading losses carried forward. policy for share-based The Group’s payments is stated in Note 1 (n). The payments equity-settled share-based estimates charge is partly derived from of factors such as lapse rates and achievement of performance criteria. It assumptions such is also derived from volatility of the Company’s as the future expected dividend yields price, share rates. interest and risk-free u) Exceptional items those items Exceptional items are or considers to be one-off the Group that should be brought material in nature attention in understanding to the reader’s financial performance. the Group’s Trust v) Employee Benefit Trust is The Employee Benefit a separate legal entity and considered company. not an extension of the parent It is included in the consolidated results as it is deemed to have of the Group of the entity. control

liabilities Note 7 – current tax assets and Note 7 – current Note 11 – intangibles Note 1 – revenue recognition Note 1 – revenue

are accounted for in a way similar to for in a way accounted are hedges. Gains or lossescash flow to instrument relating on the hedging of the hedge are portion the effective Comprehensive as Other recognised relating any gains or losses Income while recognised portion are to the ineffective On or loss. in the statement of profit the operation, disposal of the foreign such gains orcumulative value of any in equity is transferred losses recorded or loss. to the statement of profit estimates andt) Critical accounting judgements of financial statements The preparation the use requires in conformity with IFRS estimatesof certain critical accounting and judgements. It also requires judgement in management to exercise of applying the Company’s the process accounting policies. Estimates and judgements are based on continually evaluated and are historical experience and other factors, events including expectations of future under to be reasonable believed that are the circumstances. no accounting areas are There significant judgements, which require information about significant areas of estimation uncertainty in applying accounting policies that have the on the amount most significant effect in the financial statements recognised in the following notes: described are • being a multinational The Group, is subject to both international company, and local transfer pricing legislation. the transfer Management has reviewed any potential pricing position to ensure is adequately provided. exposure • • In making its judgement, management the detailed criteria for the considered permanent from of revenue recognition a position has been placements where accepted by a candidate, a start date but employment has not yet agreed, is made by commenced. A provision management, based on past historical of those experience, for the proportion the candidate is placements where their acceptance expected to reverse prior to the start date. The Group determines whether goodwill The Group impaired and other intangible assets are on an annual basis or otherwise when changes in events or situations indicate that the carrying value may not be for as part of the net investment, of a monetary item that is accounted foreign operation, including a hedge foreign Hedges of a net investment in a s) Hedge accounting statement. valued at fair value through the income valued at fair value through the balance sheet date that have been The Group has derivative contracts at The Group value, net of transaction costs. borrowings, are initially measured at fair measured initially are borrowings, cost. Other financial liabilities, including Trade and other payables are stated at and other payables are Trade statement of cash flows. cash equivalents for the purpose of the included as a component of cash and the Group’s cash management are cash management are the Group’s demand and form an integral part of Bank overdrafts that are repayable on repayable that are Bank overdrafts maturities of three months or less. maturities of three highly liquid investments with original with banks, and other short-term cash-in-hand, deposits held at call Cash and cash equivalents includes interest would be immaterial. would interest receivables when the recognition of when the recognition receivables interest rate, except for short-term rate, interest recognised by applying the effective by applying the effective recognised any impairment. Interest income is any impairment. Interest the effective interest method, less interest the effective are measured at amortised cost using measured are and receivables. Loans and receivables Loans and receivables and receivables. active market are classified as loans active market are payments that are not quoted in an payments that are that have fixed or determinable Trade receivables and other receivables and other receivables receivables Trade payables. and borrowings and trade and other and borrowings cash and cash equivalents, loans comprise trade and other receivables, comprise trade and other receivables, Non-derivative financial instruments contractual provisions of the instrument. contractual provisions when the Group becomes a party to the when the Group recognised in the Group’s balance sheet in the Group’s recognised Financial assets and liabilities are liabilities are Financial assets and r) Financial assets and liabilities r) Financial assets preceding years. preceding borrowing costs in either the current or costs in either the current borrowing The Group has not capitalised any has not capitalised The Group connection with the borrowing of funds. connection with the borrowing and other costs that an entity incurs inand other costs that an Borrowing costs consist of interest costs consist of interest Borrowing are expensed in the period they occur. occur. expensed in the period they are the asset. All other borrowing costs the asset. All other borrowing are capitalised as part of the cost of capitalised as part of the cost are get ready for its intended use or sale for its intended get ready takes a substantial period of time to period of time takes a substantial production of an asset that necessarily of an asset production to the acquisition, construction or construction to the acquisition, Borrowing costs directly attributable costs directly Borrowing q) Borrowing costs q) Borrowing 2. Segment reporting All revenues disclosed are derived from external customers. The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1. Segment operating profit represents the profit earned by each segment including allocation of central administration costs. This is the measure reported to the Group’s Board, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance. Segments are aggregated in accordance with management ownership, determined by the possession of similar characteristics. No judgements were applied to identify the reportable segments.

(a) Revenue, gross profit and operating profit by reportable segment

Gross Operating Revenue profit profit 2016 2016 2016 2016 £’000 £’000 £’000 EMEA 538,403 271,863 51,685 United Kingdom 324,548 146,313 24,153

Asia Pacific Australia and New Zealand 103,979 35,085 4,592 Asia 105,692 84,644 16,135 Total – Asia Pacific 209,671 119,729 20,727

Americas 123,503 83,129 4,387 Operating profit – – 100,952 Financial expense – – (956) Revenue/gross profit/profit before tax 1,196,125 621,034 99,996

Gross Operating Revenue profit profit 2015 2015 2015 2015 £’000 £’000 £’000 EMEA 421,310 216,987 31,889 United Kingdom 337,673 151,581 29,235

Asia Pacific Australia and New Zealand 95,835 30,077 4,696 Asia 95,468 79,033 18,020 Total – Asia Pacific 191,303 109,110 22,716

Americas 114,659 78,427 6,231 Operating profit – – 90,071 Financial income – – 626 Revenue/gross profit/profit before tax 1,064,945 556,105 90,697 The above analysis by destination is not materially different to the analysis by origin. The analysis opposite is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, goodwill and other intangibles.

91 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 92 7 8 73 43 15 116 142 709 514 2015 2015 2015 2015 2,449 2015 8,008 6,015 5,149 £’000 £’000 £’000 £’000 £’000 33,187 74,687 40,499 12,616 20,624 36,266 12,682 22,738 148,492 171,230 556,105 109,860 106,321 119,842 556,105 132,090 220,082 424,015

– – – 22 31 53 690 316 2016 2016 2016 Gross profit Gross 2016 3,862 2016 Gross profit Gross 8,595 2,242 £’000 £’000 £’000 £’000 £’000 37,883 33,278 96,270 43,306 10,526 16,462 26,988 18,869 24,404 11,153 Total liabilities Total 185,433 209,837 621,034 118,293 125,545 138,830 Annual Report 2016 PageGroup 238,366 621,034 151,074 469,960 Intangible assets Intangible assets

761 628 133 2015 2015 2015 2015 7,204 1,255 1,364 2,619 6,479 2015 2,866 3,252 £’000 £’000 £’000 £’000 5,109 8,814 £’000 9,161 2,282 21,953 48,213 70,166 21,411 41,689 143,621 128,699 384,175 392,989 152,578 190,547 253,456 468,364 633,653 431,292 1,064,945 1,064,945

407 Revenue Revenue equipment equipment 2016 2016 2016 2016 7,183 7,142 1,376 3,053 4,429 2,686 2,797 2,390 2,345 6,283 £’000 £’000 2016 £’000 £’000 £’000 29,461 10,707 24,869 56,182 81,051 56,311 12,743 14,111 Total assets Total 187,257 119,036 443,655 456,398 161,796 227,908 294,972 511,449 719,804 476,321 Property, plant and Property, Property, plant and Property, 1,196,125 1,196,125 Australia and New Zealand Asia Total – Asia Pacific Total Total – Asia Pacific Total Asia Australia and New Zealand Asia – Asia Pacific Total Australia and New Zealand Americas Asia Pacific Americas Asia Pacific United Kingdom United Kingdom EMEA EMEA EMEA Capital expenditure United Kingdom Asia Pacific Americas Segment assets/liabilities Income tax Marketing, Sales and Retail Engineering, Property & Construction, Procurement & Supply Chain & Construction, Procurement Engineering, Property Legal, Technology, HR, Secretarial and other HR, Secretarial Legal, Technology, Temporary Accounting and Financial Services Permanent (d) Revenue and gross profit generated from permanent and temporary placements permanent and temporary generated from profit (d) Revenue and gross (c) Revenue and gross profit by discipline profit (c) Revenue and gross (b) Segment assets, liabilities, non-current assets and capital expenditure by reportable segment reportable by expenditure and capital assets non-current liabilities, assets, (b) Segment 3. Profit for the year 2016 2015 £’000 £’000 Profit for the year is stated after charging: Employment costs (Note 4) 398,530 352,753 Net exchange losses 1,207 827 Depreciation of property, plant and equipment – owned (Note 10) 7,917 7,366 Amortisation of intangibles (Note 11) 9,148 8,051 Impairment of trade receivables (Note 20) 12,264 7,167 Loss on sale of property, plant and equipment and computer software 186 690 Operating lease rentals – Land and buildings 29,980 24,926 – Plant and machinery 7,252 2,895

Fees payable to the Company’s auditor: Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 207 194 Fees payable to the Company’s auditor and associates for other services: – The audit of the Company’s subsidiaries pursuant to legislation 477 410 – Audit related assurance services 52 87 Total audit fees 736 691 – Tax compliance services for the Company and its subsidiaries 60 78 – Tax advice for the Company, its subsidiaries and individual employees in relation to moving employees internationally 153 194 – Tax advisory services 48 29 Total non-audit fees 261 301 Total fees 997 992

4. Employee information The average number of employees (including Executive Directors) during the year and total number of employees (including Executive Directors) at 31 December 2016 were as follows:

2016 2015 At 31 Dec At 31 Dec Average Average 2016 2015 No. No. No. No. Management 295 310 292 301 Client services 4,297 4,071 4,419 4,183 Administration 1,392 1,333 1,388 1,351 5,984 5,714 6,099 5,835

Employment costs (including Directors’ emoluments) comprised:

2016 2015 £’000 £’000 Wages and salaries 336,874 295,767 Social security costs 39,686 34,984 Pension costs – defined contribution plans 14,187 11,801 Share-based payments and deferred cash plan 7,783 10,201 398,530 352,753 No staff are employed by the parent company (2015: none) hence no remuneration has been disclosed for the Company. Remuneration for Directors for their services on behalf of the parent company are included in the Directors’ Remuneration Report on pages 60 to 68.

93 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 94 – – – – – % 3.3 3.3 0.6 2.0 64 (0.3) (2.1) 27.0 20.2 (490) (490) 971 2015 £’000 1,116 1,116 (728) 2015 (365) 2015 £’000 £’000 (3,326) (2,039) (1,893) 24,489 13,462 14,289 27,815 –

(12) (28) 568 368 (301) – 2015 2,951 3,000 1,840 2016 £’000 £’000 117 117 (1,893) 24,489 18,364 90,697 259 252 (53) 2016 (465) (608) £’000 Annual Report 2016 PageGroup 2016 (597) £’000 (1,073) 27,900 18,976 11,078 30,313 (2,413) (2,015) – % 4.2 3.3 0.3 1.1 1.1 27.9 20.0 (1.8) (0.1) (0.2) – 252 (168) (240) 2016 4,153 3,346 1,180 1,134 £’000 27,900 19,999 99,996 (1,756)

Tax expense and effective rate for the year expense and effective Tax Adjustment to tax charge in respect of prior periods Adjustment to tax charge in respect Movement of rate difference Other tax overseas Higher tax rates on overseas earnings Derecognition of overseas losses Derecognition Recognition of overseas losses and other tax attributes Utilisation of losses not previously recognised Utilisation of losses not previously Unrelieved overseas losses Unrelieved Disallowable items and other permanent differences Effects of: Effects standard rate of corporation tax in the UK standard Profit on ordinary activities before tax multiplied by the tax multiplied activities before on ordinary Profit Profit before taxation before Profit Relating to settled transactions Tax recognised directly in equity directly recognised Tax Deferred tax income Deferred income tax expense in the income statement Total Origination and reversal of temporary differences Origination and reversal losses and other tax attributes unrecognised Recognition of previously for tax losses recognised (Credit)/charge Adjustment in respect of prior years Adjustment in respect Adjustments in respect of prior year Adjustments in respect Overseas income tax tax Deferred losses recognised of previously Derecognition Reconciliation of effective tax rate Reconciliation of effective UK income tax at 20.00% (2015: 20.25%) for year UK income tax at 20.00% (2015: 20.25%) Analysis of charge in the year Analysis of charge in Interest receivable Interest Financial income Financial Interest payable Interest Financial expenses

Interest on discounting of French construction participation tax construction discounting of French on Interest 5. Financial income/(expenses) 5. Financial

Final determination of taxable impact of certain items has resulted in a prior year reclassification between current and deferred tax. and deferred between current in a prior year reclassification items has resulted Final determination of taxable impact of certain

6. Income tax expense (2015: 27.0%). tax before on profit annual tax rate of 27.9% is based on the effective The charge for taxation 7. Current tax assets and liabilities The current tax asset of £12.7m (2015: £8.8m), and current tax liability of £24.4m (2015: £22.7m) for the Group, and current tax asset and liability of £nil (2015: £nil) for the parent company, represent the amount of income taxes recoverable and payable in respect of current and prior periods. The Group maintains a provision in relation to disputes and uncertain tax positions, including transfer pricing, which is included in the current tax liability. The Group has considered if there is a need to make a disclosure in relation to IAS 1 Estimation Uncertainty and has concluded that as no material adjustment to the carrying value of the transfer pricing reserve at 31 December 2016 is anticipated within the next financial year, no disclosure is required. 8. Dividends 2016 2015 £’000 £’000 Amounts recognised as distributions to equity holders in the year: Final dividend for the year ended 31 December 2015 of 7.90p per Ordinary share (2014: 7.58p) 24,564 23,702 Interim dividend for the year ended 31 December 2016 of 3.75p per Ordinary share (2015: 3.60p) 11,660 11,271 Special dividend for the year ended 31 December 2016 of 6.46p per Ordinary share (2015: 16.0p) 20,087 50,092 56,311 85,065 Amounts proposed as distributions to equity holders in the year: Proposed final dividend for the year ended 31 December 2016 of 8.23p per Ordinary share (2015: 7.90p) 25,599 24,747 The proposed final dividend had not been approved by shareholders at 31 December 2016 and therefore has not been included as a liability. The comparative final dividend at 31 December 2015 was also not recognised as a liability in the prior year. The proposed final dividend of 8.23p (2015: 7.90p) per Ordinary share will be paid on 19 June 2017 to shareholders on the register at the close of business on 19 May 2017, subject to approval by shareholders. When the Company pays a dividend to shareholders, there may be income tax consequences. The impact will depend upon the individual circumstances of the shareholder. 9. Earnings per Ordinary share The calculation of the basic and diluted earnings per share is based on the following data: 2016 2015 £’000 £’000 Earnings Earnings for basic and diluted earnings per share (£’000) 72,096 66,208

Number of shares number number Weighted average number of shares used for basic earnings per share (‘000) 311,534 311,436 Dilutive effect of share plans (‘000) 802 2,368 Diluted weighted average number of shares used for diluted earnings per share (‘000) 312,336 313,804

pence pence Basic earnings per share 23.1 21.3 Diluted earnings per share 23.1 21.1 The above results relate to continuing operations. Basic Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary shares in issue during the year, excluding Ordinary shares purchased by the Employee Benefit Trust and held in the reserve. Diluted Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares outstanding to assume conversion of all dilutive potential Ordinary shares. This calculation determines the number of shares that could have been acquired at fair value (determined as the average market price of the Company’s shares) based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares calculated in the basic earnings per share is then adjusted to reflect the number of shares deemed to be issued for nil consideration as a result of the potential exercise of existing share options. The remaining share options that are currently not dilutive and hence excluded from the dilutive earnings per share calculation remain potentially dilutive until they are either exercised or they lapse.

95 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 96 Total Total 9,161 7,366 7,917 7,689 £’000 £’000 (8,652) (3,079) (7,612) (1,927) 81,798 84,368 14,111 10,914 81,798 90,862 62,560 60,387 60,387 61,401 21,411 29,461 (15,961) (14,592)

77 838 745 146 590 582 (951) (147) (579) (103) (829) (552) 2,269 2,622 2,269 2,424 1,129 1,037 1,037 1,144 1,232 1,280 £’000 £’000 Motor Motor Annual Report 2016 PageGroup vehicles vehicles

2015 2016 6,420 4,807 6,306 3,630 3,910 4,612 £’000 £’000 (3,833) (1,596) (3,838) (1,117) 47,428 48,050 47,428 49,999 38,488 37,163 37,163 36,363 10,265 13,636 (9,322) (10,155) Furniture, Furniture, Furniture, Furniture, equipment equipment equipment fixtures and fixtures fixtures and fixtures (707) 6,853 3,609 4,462 3,146 3,425 3,000 9,914 £’000 £’000 ments ments (3,868) (1,336) (3,195) 32,101 33,696 32,101 38,439 22,943 22,187 22,187 23,894 14,545 (4,977) (4,718) improve- improve- Leasehold Leasehold

Cost At 1 January Cost At 1 January Additions Additions Disposals Disposals Effect of movements in foreign exchange of movements in foreign Effect Effect of movements in foreign exchange movements in foreign of Effect At 31 December At 31 December Depreciation At 1 January Depreciation At 1 January Charge for the year Charge for the year Disposals Disposals Effect of movements in foreign exchange of movements in foreign Effect Effect of movements in foreign exchange of movements in foreign Effect At 31 December At 31 December Net book value At 31 December Net book value At 31 December Group

Group 10. Property, plant and equipment plant 10. Property, 11. Intangible assets

2016

Computer software, Computer assets under software construction Subtotal Goodwill Trademark Subtotal Total Group £’000 £’000 £’000 £’000 £’000 £’000 £000 Cost At 1 January 66,762 3,204 69,966 1,539 746 2,285 72,251 Additions 2,773 8,380 11,153 – – – 11,153 Disposals (5,685) – (5,685) – – – (5,685) Transfers 4,648 (4,648) – – – – – Effect of movements in foreign exchange 1,556 – 1,556 – – – 1,556 At 31 December 70,054 6,936 76,990 1,539 746 2,285 79,275 Amortisation At 1 January 35,433 – 35,433 – 552 552 35,985 Charge for the year 9,111 – 9,111 – 37 37 9,148 Disposals (4,978) – (4,978) – – – (4,978) Effect of movements in 1,237 – 1,237 – – – 1,237 foreign exchange At 31 December 40,803 – 40,803 – 589 589 41,392 Net book value

At 31 December 29,251 6,936 36,187 1,539 157 1,696 37,883

2015

Computer software, Computer assets under software construction Subtotal Goodwill Trademark Subtotal Total Group £’000 £’000 £’000 £’000 £’000 £’000 £000 Cost At 1 January 63,327 1,819 65,146 1,539 746 2,285 67,431 Additions 1,009 5,006 6,015 – – – 6,015 Disposals (384) – (384) – – – (384) Transfers 3,621 (3,621) – – – – – Effect of movements in (811) – (811) – – – (811) foreign exchange At 31 December 66,762 3,204 69,966 1,539 746 2,285 72,251 Amortisation At 1 January 28,453 – 28,453 – 432 432 28,885 Charge for the year 7,931 – 7,931 – 120 120 8,051 Disposals (359) – (359) – – – (359) Effect of movements in (592) – (592) – – – (592) foreign exchange At 31 December 35,433 – 35,433 – 552 552 35,985 Net book value At 31 December 31,329 3,204 34,533 1,539 194 1,733 36,266

97 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 98

51 214 2015 £’000 1,274 1,539 £’000 3,960 505,912 509,872

51 214 Annual Report 2016 PageGroup Subsidiary undertakings 2016 1,274 1,539 £’000 Registered office Registered Carlos Pellegrini 1265, Piso 12, Ciudad de Argentina C1009ABY, Buenos Aires, NSW Sydney, Street, Level 32, 225 George 2000, Australia Mariahilfer Strasse 17, 1060, Wien, Austria Place du Champ de Mars 5 , 1050 Brussels, Belgium Place du Champ de Mars 5 , 1050 Brussels, Belgium Olimpia, CEP Rua Funchal 375, 7th Floor Vila 04551-060, Sao Paulo, Brazil das Nações Unidas, 10.989 - 4º Andar , Av. Conjunto 41 - Edifício Mendes Caldeira, CEP Brazil 04578-900, São Paulo - SP, Luis Carlos Berrini, 716, 1º Engenheiro Av. andar - CJ.12 - Cidade Monções, CEP 04571- Brazil 000, São Paulo - SP, Toronto, 21st Floor, West, 130 Adelaide Street Ontario, M5H 1J8, Canada Carlos Pellegrini 1265, Piso 12, Ciudad de Argentina C1009ABY, Buenos Aires, Carlos Pellegrini 1265, Piso 12, Ciudad de Argentina C1009ABY, Buenos Aires, Principal activity Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Country of incorporation Australia Austria Belgium Belgium Brazil Brazil Brazil Canada Argentina Argentina Argentina

UK USA Singapore Cost at 1 January 2016 plans for subsidiaries’ employees to share relating Transactions Cost at 31 December 2016 Company Recrutamento Especializado Ltda Especializado Ltda Especializado e servicos corporativos Ltda Michael Page International (Australia) Pty Limited Michael Page International GmbH Michael Page International (Belgium) NV/SA Page Interim (Belgium) NV/SA Michael Page International Do Brasil - Page Interim Do Brasil - Recrutamento Page Personnel Do Brasil - Recrutamento Michael Page International Canada Limited Eventuales SA out below: SA Argentina SA Page Personnel Argentina Servicios Page Personnel Argentina Michael Page International Name of undertaking The Company’s principal subsidiary undertakings at 31 December 2016, their principal activities and countries of incorporation are set principal activities and countries of incorporation are principal subsidiary undertakings at 31 December 2016, their The Company’s opinion of the Directors that at 31 December 2016 there was no impairment of goodwill. was that at 31 December 2016 there opinion of the Directors The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. It is the indications that goodwill might be impaired. are if there frequently tests goodwill annually for impairment, or more The Group materially exceed its recoverable amount. materially exceed its recoverable reasonably possible change in any of the above key assumptions would cause the carrying value of goodwill allocated to any CGU to possible change in any of the above key assumptions would cause the carrying value reasonably 12. Investments of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense. Management believes that no as an expense. Management loss is recognised amount. An impairment to its recoverable of the asset is reduced value of those cash flows. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount to be less than its carrying amount, recoverable amount of an asset is estimated If the value of those cash flows. rate of 8%, representing the weighted average cost of capital for the Group, to the estimated future cash flows to calculate the terminal future to the estimated cost of capital for the Group, the weighted average rate of 8%, representing term average growth rate of the relevant markets and reflects long-term wage inflation fee growth. Management applied a discountgrowth. fee long-term wage inflation markets and reflects relevant rate of the term average growth financial budget, management projections for five years, followed by an assumed growth rate of 0%, which does not exceed the long- growth rate of 0%, which does not exceed assumed for five years, followed by an projections financial budget, management In assessing value in use, the estimated future cash flows are calculated by preparing cash flow forecasts derived from the most recent from the most derived cash flow forecasts preparing calculated by cash flows are use, the estimated future In assessing value in goodwill allocation is presented below: is presented goodwill allocation Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the country of operation. A summary of theof operation. A summary to the country according units (CGUs) identified cash-generating allocated to the Group’s Goodwill is Impairment tests for goodwill tests Impairment Country of Principal Name of undertaking incorporation activity Registered office Michael Page International Chile Recruitment Consultancy Magdalena 181, Piso 16, Las Condes, Santiago Chile Ltda 7550055, Chile

Page Personnel International Chile Recruitment Consultancy Magdalena 181, Piso 1, Las Condes, Santiago Chile Ltda 7550055, Chile

Page Consulting Chile Ltda Chile Recruitment Consultancy Magdalena 181, Piso 16, Las Condes, Santiago 7550055, Chile

Empresa de Servicios Transitorios Chile Recruitment Consultancy Magdalena 181, Piso 1, Las Condes, Santiago Page Interim Chile Limitada 7550055, Chile

Michael Page (Beijing) China Recruitment Consultancy Room 2701 & 2708, SK Tower Beijing, No.6 Recruitment Co. Ltd Jianguomenwai Avenue, Chaoyang District, Beijing 100022, China Michael Page (Shanghai) China Recruitment Consultancy Level 11, Tower 2, Jing An Kerry Centre, 1539 Recruitment Co. Ltd Nanjing Road West, Shanghai, 200040, China

Michael Page International Colombia Recruitment Consultancy Av. Calle 82 No. 10-33 - Oficina 801, Colombia Colombia SAS

Michael Page Partnership Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page Employment England and Wales Recruitment Consultancy Page House, 1 Dashwood Lang Road, Bourne Services Limited Business Park, Weybridge, Surrey KT15 2QW, UK

LPM (Professional Recruitment) England and Wales Holding company Page House, 1 Dashwood Lang Road, Bourne Limited Business Park, Weybridge, Surrey KT15 2QW, UK

Accountancy Additions Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Slamway Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

The Assessment Centre Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

LPM (Group Services) Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

The Page Partnership Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Sales Recruitment Specialists England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Limited Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page International Limited England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page International England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne 1982 Limited Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page International England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Investment Limited Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page International England and Wales Non-trading Page House, 1 Dashwood Lang Road, Bourne Finance Limited Business Park, Weybridge, Surrey KT15 2QW, UK

Page Personnel (UK) Limited England and Wales Recruitment Consultancy Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page Holdings Limited England and Wales Support services Page House, 1 Dashwood Lang Road, Bourne Business Park, Weybridge, Surrey KT15 2QW, UK

Michael Page International England and Wales Holding company Page House, 1 Dashwood Lang Road, Bourne Holdings Limited Business Park, Weybridge, Surrey KT15 2QW, UK

99 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 100 Annual Report 2016 PageGroup Registered office Registered 164 Avenue Achille Peretti, 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 164 Avenue Achille Peretti, 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 1, Rue Esquermoise, 59800 Lille, France France 48, Rue de la République, 69002 Lyon, 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 7 Rue de l’Industrie, 98000 Monaco 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 164 Avenue Achille Peretti, 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France Page House, 1 Dashwood Lang Road, Bourne 1 Dashwood Lang Road, Page House, UK KT15 2QW, Surrey Weybridge, Business Park, Bourne 1 Dashwood Lang Road, Page House, UK KT15 2QW, Surrey Business Park, Weybridge, Lang Road, BournePage House, 1 Dashwood UK KT15 2QW, Surrey Business Park, Weybridge, Lang Road, BournePage House, 1 Dashwood UK KT15 2QW, Surrey Business Park, Weybridge, Lang Road, BournePage House, 1 Dashwood UK KT15 2QW, Surrey Business Park, Weybridge, 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France 92522 Neuilly-sur- Achille Peretti, 164 Avenue Seine, Paris, France Principal activity Non-trading Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Holding company Recruitment Consultancy Holding company Recruitment Consultancy Support services Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment France France France France France France France France France France France France England and Wales England and England and Wales England and Wales England and Wales France France France France France France France England and Wales England and Country of Country of incorporation

MP Nord EURL MP Nord MP Sud EURL Michael Page Advertising SARLU Page Consulting SARLU Page Executive EURL Michael Page EDP EURL Michael Page Monaco SARL MP Immobilier et Construction EURL Michael Page IT Services SARLU for SARLU Talent MP Services SASU EURL Michael Page Limited Michael Page Michael Page International Southern Limited* Europe Michael Page UK Limited Michael Page Recruitment Limited Group Michael Page International (France) SAS Michael Page Financial Services SAS Page Personnel SAS EURL MP Commercial MP Ignenieurs et Informatuque SARLU Page Formation EURL MP International – LRR EURL MP Finance et Comptabilitie Recruitment Limited* Recruitment Michael Page InternationalMichael Page Name of undertaking Country of Principal Name of undertaking incorporation activity Registered office Michael Page International Germany Recruitment Consultancy Carl Theodor Strasse 1, 40213 Dusseldorf, Germany (Deutschland) GmbH

Page Personnel Services GmbH Germany Recruitment Consultancy Carl Theodor Strasse 1, 40213 Dusseldorf, Germany

Page Personnel (Deutschland) Germany Recruitment Consultancy Carl Theodor Strasse 1, 40213 Dusseldorf, Germany GmbH

Michael Page Interim GmbH Germany Recruitment Consultancy Carl Theodor Strasse 1, 40213 Dusseldorf, Germany

Michael Page International (Hong Hong Kong Recruitment Consultancy 611 One Pacific Place, 88 Queensway, Hong Kong Kong) Limited

Michael Page International India Recruitment Consultancy 5th Floor, 2 North Avenue, Maker Maxity, Bandra-Kurla Recruitment Pvt Ltd Complex, Bandra (E), Mumbai 400051, India

PT Michael Page International Indonesia Recruitment Consultancy One Pacific Place, Suites B-F, Level 12, Sudirman Central Indonesia Business District, Jl. Jend. Sudirman Kav 52-53, Jakarta 12190, Indonesia

Michael Page International (Ireland) Ireland Recruitment Consultancy c/o Mason Hayes & Curran, Southbank House, Barrow Limited Street, Dublin 4, Ireland

Michael Page International Italia Srl Italy Recruitment Consultancy Via Spadari 1, 20123 Milan, Italy

Page Personnel Italia SpA Italy Recruitment Consultancy Via Spadari 1, 20123 Milan, Italy

Michael Page International (Japan) Japan Recruitment Consultancy 6F Hulic Kamiyacho Building, 4-3-13 Toranomon, Minato-ku, K.K. Tokyo 105-0001, Japan

Michael Page International Malaysia Recruitment Consultancy Level 27, Integra Tower, The Intermark, 348 Jalan Tun Razak, (Malaysia) Sdn Bhd Kuala Lumpur, 50400, Malaysia

Michael Page International Mexico Mexico Recruitment Consultancy Av. Paseo de la Reforma, No. 115, Piso 10, Col. Lomas de Reclutamiento Especializado, S.A. Chapultepec,Z.C. 11000, CDMX, Mexico de C.V.

Michael Page International Mexico Mexico Recruitment Consultancy Av. Paseo de la Reforma, No. 115, Piso 10, Col. Lomas de Servicios Corporativos SA de CV Chapultepec,Z.C. 11000, CDMX, Mexico

Page Interim Mexico Servicios SA Mexico Recruitment Consultancy Av. Paseo de la Reforma, No. 115, Piso 10, Col. Lomas de de CV Chapultepec,Z.C. 11000, CDMX, Mexico

Michael Page International (Maroc) Morocco Recruitment Consultancy Residence Plein Ciel 9, Angle rue Mahassine Arrouyani et Ali SARL AU Abderrazak. Quartier Racine-20.100 Casablanca- Maroc

Michael Page International Netherlands Recruitment Consultancy World Trade Center, Strawinskylaan 421, 107XX, Amsterdam, (Nederland) BV Netherlands

Page Interim BV Netherlands Recruitment Consultancy World Trade Center, Strawinskylaan 421, 107XX, Amsterdam, Netherlands

Michael Page International (New New Zealand Recruitment Consultancy Level 17, 191 Queen Street, Auckland NZ 1010 Zealand) Limited

Michael Page International Peru Peru Recruitment Consultancy Calle Las Orquídeas 665 esq. Andrés Reyes - Piso 2, Oficina SRL 201 San Isidro, Peru

Michael Page International Poland Recruitment Consultancy ul. Zlota 59, 00-120 Warsaw, Poland (Poland) Sp.z.o.o

Michael Page International Portugal Recruitment Consultancy Avenida da Liberdade n 180A, 1250-146 Lisboa, Portugal Empressa de Trabalho Temporário e Serviços de Consultadoria Lda

101 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 102

Annual Report 2016 PageGroup 622 3rd Avenue, 29th Floor, New York, NY10017, New York, 29th Floor, Avenue, 622 3rd USA No. 202, Al Fattan Currency House, Tower 1, House, Tower No. 202, Al Fattan Currency (DIFC), PODubai International Finance Centre Box 506702, Dubai, United Arab Emirates Buyukdere Caddesi, Kanyon Ofis, Binasi No. Buyukdere 185, Kat 5 34394 Levent, Instanbul, Turkey Buyukdere Caddesi, Kanyon Ofis, Binasi No. Buyukdere 185, Kat 5 34394 Levent, Instanbul, Turkey Unit 3076, 30th Floor Bhiraji Tower, EmQuartier, EmQuartier, Unit 3076, 30th Floor Bhiraji Tower, 689 Sukhumvit Road, Klongton Nuea, Vadhanna, Bangkok 10110, Thailand 17th Floor, ITF Tower, No 140/36-37 Silom Road, ITF Tower, 17th Floor, Kwaeng Suriawong, Khet Banrak, Bangkok, Thailand 8F-1 Shin Kong Xin Yi Financial Building, Financial 8F-1 Shin Kong Xin Yi City, District, Taipei Road Xing-Yi 36-1 Songren 110 Taiwan Quai de la Poste 12, CH-1204 Geneva, Switzerland Master Samuelsgatan 42, l4tr 111 57 Stockholm, Sweden Calle Julian Camarillo 42-4, 28037 Madrid, Spain Plaza Europa 21-23 5ª, 08908 Hospitalet de Plaza Europa Spain (Barcelona), Llobregat Paseo de la Castellana 28 -3ª, 28046 Madrid, Spain Calle Julian Camarillo 42-4, 28037 Madrid, Spain Paseo de la Castellana 28 -3ª, 28046 Madrid, Spain Paseo de la Castellana 28 -3ª, 28046 Madrid, Spain PO Box 653555, Benmore 2010, South Africa 2010, PO Box 653555, Benmore PO Box 653555, Benmore 2010, South Africa 2010, PO Box 653555, Benmore One Raffles Place, #09-61 Office Tower Two, Tower Office One Raffles Place, #09-61 048616 Singapore Building 9, Zemlianoy val Str., Moscow, 105064, Moscow, val Str., Building 9, Zemlianoy Russian Federation Qatar Financial Centre, Office 2, Ground Floor, Floor, Office 2, Ground Centre, Qatar Financial PO Box 23153, Doha, Bay, West Tower, Tornado Qatar Avenida da Liberdade n 180A, 1250-146 Lisboa, n 180A, da Liberdade Avenida Portugal Registered office Registered Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Holding company Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Holding company Recruitment Consultancy Non-trading Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Consultancy Recruitment Recruitment Consultancy Recruitment Principal activity United States United Arab Emirates Turkey Turkey Thailand Thailand Taiwan Switzerland Sweden Spain Spain Spain Spain Spain Spain South Africa South Africa Singapore Russia Qatar Portugal Country of Country of incorporation

Michael Page International Inc* Michael Page International (UAE) Limited Servisleri Danismanligi Ltd Michael Page International Yonetim Michael Page International Yonetim IstihdamDanismanligi Michael Page International NEM Limited Sirketi (Thailand) Limited Michael Page International Recruitment Michael Page Thailand Limited Taiwan Michael Page International Michael Taiwan Co Ltd Michael Page International (Switzerland) SA Michael Page International (Sweden) AB Page Personnel ETT SA Page Group Europe SL Europe Page Group Michael Page AD SL Page Personnel Seleccion SA Michael Page Holding (España) SL Michael Page International (España) SA Michael Page Africa (SA) (Pty) Limited Michael Page Africa (SA) Michael Page International (SA) (Pty) Limited Michael Page International Pte Limited* Michael Page International Russia LLC (In liquidation) Michael Page InternationalMichael Page Qatar (Branch) classes of issued share capital. The share capital of all the subsidiary undertakings comprise Ordinary shares. capital of all the subsidiary undertakings comprise Ordinary capital. The share classes of issued share The percentage of the issued share capital held is equivalent to the percentage of voting rights held. The Group holds 100% of all holds of voting rights held. The Group capital held is equivalent to the percentage of the issued share The percentage and operate principally in their country of incorporation. *The equity of these subsidiary undertakings is held directly by PageGroup plc. All companies have been included in the consolidation by PageGroup *The equity of these subsidiary undertakings is held directly Portugal MP Outsourcing Portugal MP Name of undertaking 13. Trade and other receivables Group Company 2016 2015 2016 2015 £’000 £’000 £’000 £’000 Current Trade receivables 210,145 169,012 – – Less provision for impairment of receivables (5,070) (5,635) – – Net trade receivables 205,075 163,377 – – Amounts due from Group companies – – 664,008 636,601 Other receivables 9,612 9,041 – – Accrued Income 37,623 34,226 – – Prepayments 7,018 8,088 – – 259,328 214,732 664,008 636,601 Non-current Other receivables 7,640 2,693 – – The fair values of trade and other receivables are not materially different to those disclosed above. The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in Note 20. All amounts due from Group undertakings are unsecured, interest-free and repayable on demand.

14. Trade and other payables Group Company 2016 2015 2016 2015 £’000 £’000 £’000 £’000 Current Trade payables 7,515 15,659 – – Amounts owed to Group companies – – 798,493 724,291 Other tax and social security 46,813 44,181 – – Other payables 21,407 10,813 – – Accruals 98,084 70,543 10 – Deferred income 1,240 739 – – 175,059 141,935 798,503 724,291 Non-current Deferred income 9,702 5,092 – – Other tax and social security 242 298 – – 9,944 5,390 – – The fair values of trade and other payables are not materially different to those disclosed above. All amounts due to Group undertakings are unsecured, interest-free and repayable on demand. The total liability relating to other tax and social security includes a balance of £0.8m (2015: £1.1m) relating to social charges on share-based payments. The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 20.

103 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 104

(14) 392 Total (512) 2015 £’000 1,167 £’000 (9,035) (3,327) (2,413) (1,208) (12,888) (12,888) (14,055) (12,888) (16,117) – – 430 (14) 2016 (188) Other £’000 £’000 (2,086) (3,228) (5,328) (5,328) (4,124) (9,640) (16,117) (16,547) Annual Report 2016 PageGroup

– – – 949 (509) £’000 (4,481) (4,990) (4,990) (1,020) (5,061) Tax losses Tax – – 392 762 410 (512) £’000 (2,468) (2,570) (2,570) (1,416) payments Share-based Share-based

Deferred tax assets Deferred Deferred tax liabilities Deferred At 1 January 2016 Recognised in equity for the year Recognised in profit or loss for the year Recognised in profit Exchange differences At 31 December 2016 At 1 January 2015 Recognised in equity for the year Recognised in profit or loss for the year Recognised in profit Exchange differences At 31 December 2015 prior reporting periods. prior reporting The Group’s exposure to interest rate, foreign currency and liquidity risk for financial assets and liabilities is disclosed in Note 20. liquidity risk for financial assets and liabilities and currency foreign rate, to interest exposure The Group’s and during the current thereon, and the movements by the Group, (assets)/liabilities recognised tax the major deferred The following are arrangement with HSBC. All conditions precedent on each of these facilities had been met. on each of these facilities All conditions precedent arrangement with HSBC. tax 16. Deferred £2m facility with HSBC, £1m elsewhere in the Group and £36.9m of undrawn borrowing facilities under the Invoice Discounting and £36.9m of undrawn borrowing in the Group £1m elsewhere £2m facility with HSBC, At 31 December 2016, the Group had available £10m (2015: £10m) of undrawn committed borrowing facilities with Deutsche Bank, facilities with Deutsche committed borrowing had available £10m (2015: £10m) of undrawn the Group At 31 December 2016, and facilities are repayable on demand. repayable and facilities are The Group has a £10m committed overdraft facility with Deutsche Bank, as well as a £2m facility with HSBC. All other bank overdrafts All other bank overdrafts facility with HSBC. as well as a £2m with Deutsche Bank, facility £10m committed overdraft has a The Group The carrying amounts of the Group’s borrowings are denominated in Sterling. are borrowings amounts of the Group’s The carrying No bank overdrafts were utilised in respect of the year ended 31 December 2016 (2015: £Nil). 31 December 2016 of the year ended in respect utilised were No bank overdrafts 15. Bank overdrafts 15. Bank of the deferred tax balances (after offset) for balance sheet purposes: for balance sheet tax balances (after offset) of the deferred Certain deferred tax assets and liabilities have been offset in accordance with the Group’s accounting policy. The following is the analysis accounting policy. with the Group’s accordance in tax assets and liabilities have been offset Certain deferred disclosure is required. disclosure material adjustment to the carrying value of the deferred tax asset at 31 December 2016 is anticipated within the next financial year, no tax asset at 31 December 2016 is anticipated within the next financial year, material adjustment to the carrying value of the deferred Group has considered if there is a need to make a disclosure in relation to IAS 1 Estimation Uncertainty and have concluded that as no in relation is a need to make a disclosure if there has considered Group The Group has estimated the likely value of deferred tax assets in respect of trading losses carried forward and all other categories. The and all other of trading losses carried forward tax assets in respect has estimated the likely value of deferred The Group losses and other tax attributes remain available to offset future taxable profits in the respective territories where they have arisen. respective territories where in the profits taxable future available to offset losses and other tax attributes remain given the future utilisation of the tax losses is uncertain; there were no other tax attributes recognised in those territories. These tax in those territories. other tax attributes recognised no were utilisation of the tax losses is uncertain; there given the future addition there are carried forward losses of £14.0m (2015: £12.1m) arising in overseas territories for which no deferred tax is recognised tax is recognised arising in overseas territories for which no deferred losses of £14.0m (2015: £12.1m) carried forward are addition there deferred tax has arisen. Of the net deferred tax asset recognised, £0.4m relates to territories that were loss making in the current year. In year. loss making in the current to territories that were relates £0.4m tax asset recognised, tax has arisen. Of the net deferred deferred The realisation of the deferred tax asset is dependent upon generating future taxable profits in the overseas territories in which the in the overseas territories taxable profits tax asset is dependent upon generating future of the deferred The realisation year and in 2016 resulted in an increase in the deferred tax asset of £4.3m (2015: £3.2m decrease). (2015: £3.2m decrease). tax asset of £4.3m in the deferred in an increase year and in 2016 resulted temporary differences between the recognition of income and expenditure for accounting and tax purposes. This can vary from year to vary from for accounting and tax purposes. This can of income and expenditure between the recognition temporary differences of tax losses across a number of territories plus the utilisation of losses in other territories. The movement in ‘Other’ is comprised of of tax losses across The net reduction of the deferred tax asset balance by £0.9m in the year includes £1.3m for the effects of recognition and derecognition derecognition and of recognition tax asset balance by £0.9m in the year includes £1.3m for the effects of the deferred The net reduction reverse in the foreseeable future. in the foreseeable reverse Group is in a position to control the timing of the reversal of the temporary difference and it is not probable that such differences will that such differences and it is not probable difference of the temporary the timing of the reversal is in a position to control Group No deferred tax liability has been recognised in respect of £110.3m (2015: £87.9m) of unremitted earnings(2015: £87.9m) of unremitted of subsidiaries because the of £110.3m in respect tax liability has been recognised No deferred 17. Called-up share capital 2016 2015 Number of Number of £’000 shares £’000 shares Allotted, called-up and fully paid Ordinary shares of 1p each At 1 January 3,258 325,919,705 3,219 321,834,542 Shares issued 1 55,750 39 4,085,163 At 31 December 3,259 325,975,455 3,258 325,919,705 Shares issued in the year related to the Executive Share Option Scheme. Share option plans The Group has share option awards currently outstanding under an Executive Share Option Scheme (ESOS) and a Share Option Scheme (SOS). These plans are described below. At 31 December 2016 the following options had been granted and remained outstanding in respect of the Company’s Ordinary shares of 1p under both the Michael Page Executive Share Option Scheme and the Share Option Scheme. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

No. of options outstanding at Balance at 1 Granted Exercised Lapsed 31 December Base EPS/ Exercise price Year of grant January 2016 in year in year in year 2016 OP range† per share Exercise period 2006 (Note 1)* 28,000 – (28,000) – – 15.5 309.9p March 2009 – March 2016 2009 (Note 2) 1,043,365 – (92,275) (64,072) 887,018 OP range 187.5p-211.84p March 2012 – March 2019 2010 (Note 1)* 2,626,024 – (27,750) (139,357) 2,458,917 6.6 381.5p-383.0p March 2013 – March 2020 2011 (Note 2) 2,628,569 – – (359,000) 2,269,569 OP range 491.0p-492.9p March 2014 – March 2021 2012 (Note 2) 2,164,318 – – (181,415) 1,982,903 OP range 477.0p March 2015 – March 2022 2013 (Note 2) 3,567,473 – – (479,640) 3,087,833 OP range 442.0p March 2016 – March 2023 2014 (Note 2) 4,148,606 – – (327,992) 3,820,614 OP range 484.0p March 2017 – March 2024 2015 (Note 2) 1,710,000 90,000 – (87,573) 1,712,427 OP range 526.0p-534.0p March 2018 – March 2025 2016 (Note 2) – 1,700,000 – – 1,700,000 OP range 406.0p-427.0p March 2019 – March 2026 Total 2016 17,916,355 1,790,000 (148,025) (1,639,049) 17,919,281 Weighted average exercise price 2016 (£) 4.48 4.14 2.47 4.55 4.45 Total 2015 24,102,409 1,860,000 (5,967,626) (2,078,428) 17,916,355 Weighted average exercise price 2015 (£) 4.27 5.26 3.83 4.66 4.48

* These options have fully vested

† The Operating Profit ranges for each award are fully disclosed in Note 2 of this Note. 7,820,896 options were exercisable at the end of 2016 at a weighted average exercise price of £4.05 (2015: £3.83). The weighted average share price at the date of exercise was £3.83. Note 1 Executive Share Option Scheme Using the ESOS, awards of share options can be made to key management personnel and senior employees to receive shares in the Company. No awards have been made under the ESOS since 2010 and this award has fully vested. For grants under the ESOS, the performance condition is tested on the third anniversary and no retesting will occur thereafter. These options were granted subject to a performance condition requiring that an option may only be exercised, in normal circumstances, if there has been an increase in base earnings per share of at least 3% per annum above the growth in the UK Retail Price Index. The respective base earnings per share for each grant are shown in the table above.

105 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 106 – Nil MIP 5.26 23% 2015 2.09% 0.71% 3 years (20,319) 824,157 (753,448) 4.94-5.26 2,008,320 2,058,710 – – – Nil Annual Report 2016 PageGroup 4.04 LTIP 2016 2.75% 0.89% 25.7% 3 years 418,163 593,125 3.72-4.04 1,011,288 Management Incentive Plan Nil Nil 5.26 5.26 23% 2015 0.71% 3 years Nil Nil 3.72 4.04 2016 0.89% 25.7% 3 years Long-Term Incentive Plan Long-Term 0.84 5.26 5.26 23% 2015 2.09% 0.71% 5 years 0.68 4.06 4.06 2016 2.75% 0.89% 25.7% 5 years Share Option Plans Share Expected dividend yield Risk free rate Risk free Expected life Expected volatility Weighted average fair value (£) Weighted Average exercise price (£) exercise Average Share price (£) Share Outstanding as at 31 December 2016 Exercised Granted Lapsed Weighted average fair value at the date of measurement Weighted As at 1 January 2016 conditions are met. Movements on these plans are shown below: met. Movements on these plans are conditions are physical delivery of shares, currently satisfied by shares held in the Employee Benefit Trust, to the extent that service and performance held in the Employee Benefit satisfied by shares currently physical delivery of shares, Plan for the Senior Executives. Details of these plans are disclosed in the Directors’ Remuneration Report and are settled by cash or the Remuneration Report and are disclosed in the Directors’ plans are Plan for the Senior Executives. Details of these The Company also operates a Management Incentive Plan for the Executive Directors and senior employees and a Long-Term Incentive employees and a Long-Term and senior Incentive Plan for the Executive Directors The Company also operates a Management Other share-based payment plans Other share-based achieved, up to a maximum of 100% at Operating Profit of £125m or more. None of this award has yet vested. None of this award of £125m or more. Profit achieved, up to a maximum of 100% at Operating For the 2016 grant, if Operating Profit is in excess of £75m, 1% of the award will vest for every additional £1m of Operating Profit will vest for every additional £1m of Operating Profit is in excess of £75m, 1% of the award For the 2016 grant, if Operating Profit periods have elapsed. was achieved this year, the performance criteria have been fully achieved and these awards will vest in full when their three year time will vest in full when their three the performance criteria have been fully achieved and these awards was achieved this year, Operating Profit achieved will vest up to a maximum of 100% if the Operating Profit is £100m or more. As Operating Profit of £101.0m Operating As is £100m or more. achieved will vest up to a maximum of 100% if the Operating Profit Operating Profit For grants between 2012 and 2015, if Operating Profit is in excess of £50m, a proportion of the award equivalent to the amount of equivalent of the award is in excess of £50m, a proportion Profit For grants between 2012 and 2015, if Operating achieved, up to a maximum of 100% at Operating Profit of £200m or more. Following 2016’s operating profit, none of this award will vest. none of this award operating profit, Following 2016’s of £200m or more. Profit achieved, up to a maximum of 100% at Operating For the 2011 grant, if Operating Profit is in excess of £100m, 1% of the award will vest for every additional £1m of Operating Profit will vest for every additional £1m of Operating Profit is in excess of £100m, 1% of the award For the 2011 grant, if Operating Profit linked to the Group’s Operating Profit. Operating Profit. linked to the Group’s Further grants under the SOS have been made in each year from 2011. The performance conditions for these grants are also directly directly also are The performance conditions for these grants 2011. the SOS have been made in each year from Further grants under 2016 following the 2015 result. Following 2016’s Operating Profit of £101.0m, the final portion of the award will vest on 10 March 2017. 10 March will vest on the final portion of the award of £101.0m, Operating Profit Following 2016’s result. 2016 following the 2015 As the Group’s 2011 Operating Profit was £86.0m, 86% of this award vested on 10 March 2012, with a further 4% vesting on 10 March 10 March 2012, with a further 4% vesting on on 10 March vested was £86.0m, 86% of this award Operating Profit 2011 As the Group’s would vest. 100% of the award would vest if Operating Profit was £100m. would vest if Operating Profit the award would vest. 100% of Operating Profit. If Operating Profit is £30m then 30% of the award would vest. For every £1m of Operating Profit over £30m, a further 1% £1m of Operating would vest. For every £30m then 30% of the award is Profit If Operating Operating Profit. elapsed, in which case any awards outstanding under the grant will lapse. The performance condition is directly linked to the Group’s Group’s linked to the The performance condition is directly outstanding under the grant will lapse. any awards elapsed, in which case since then has been and will be tested annually until either the entire grant vests, or ten years from the date of grant of the award have award the date of grant of the vests, or ten years from grant entire and will be tested annually until either the since then has been The 2009 grant made under the SOS is subject to a performance condition that was tested, initially, three years after the date of grant and years after three condition that was tested, initially, under the SOS is subject to a performance The 2009 grant made downturn on the Group’s EPS and thus would not provide the required retention incentive. retention required the EPS and thus would not provide downturn the Group’s on of at least 3% per annum above the growth in the UK Retail Price Index by 2011, would not be achievable due to the impact of the global by 2011, would not be achievable due to in the UK Retail Price Index above the growth of at least 3% per annum Board’s view that grants made under the existing ESOS, which would have required an increase over the 2008 base earnings per share an increase have required made under the existing ESOS, which would view that grants Board’s This share option scheme was created in 2009 to provide an effective plan under which to grant awards from 2009 onwards. It was the 2009 onwards. from to grant awards plan under which an effective provide in 2009 to was created option scheme This share shares held in the Employee Benefit Trust. Employee Benefit held in the shares Executive Directors of the Company are not eligible to participate in this plan. Any exercises of awards made under this plan are settled by under this plan are made of awards plan. Any exercises to participate in this not eligible of the Company are Executive Directors Share Option Scheme Share Note 2 Note Scholes option pricing model. The inputs into the model were as follows: Scholes option pricing model. The inputs into the model were contractual life of 5.9 years. The fair values of options and other share awards granted during the year were calculated using the Black- granted during the year were awards contractual life of 5.9 years. The fair values of options and other share The options outstanding at 31 December 2016 have an exercise price in the range of 187.5p to 534.0p and a weighted average The options outstanding at 31 December 2016 have an exercise value measurement at grant date. There are no market conditions associated with the share option grants. with the share no market conditions associated are at grant date. There value measurement Share options are granted under service and non-market performance conditions. These conditions are not taken into account in the fair granted under service and non-market performance conditions. These conditions are options are Share were granted on 20 March with the estimated fair value of the options granted on that day of £0.84. granted on 20 March were In 2016, options were granted on 18 March with the estimated fair value of the options granted on that day of £0.68. In 2015, options granted on 18 March In 2016, options were Share option valuation and measurement Share Expected volatility was determined by reference to historical volatility of the Company’s share price in the last 12 months. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. Expectations of early exercise are incorporated into the Black-Scholes option pricing model. The Group recognised total expenses of £4.2m, including social security, (2015: £7.6m) related to share-based payment transactions during the year. 18. Reserves Share premium The share premium account has been established to represent the excess of proceeds over the nominal value for all share issues, including the excess of the exercise share price over the nominal value of the shares on the exercise of share options. Capital redemption reserve The capital redemption reserve relates to the cancellation of the Company’s own shares. Reserve for shares held in the Employee Benefit Trust At 31 December 2016, the reserve for shares held in the employee benefit trust consisted of 17,592,938 Ordinary shares (2015: 14,776,231 Ordinary shares) held for the purpose of satisfying awards made under the Management Incentive Share Plan, the Long-Term Incentive Plan and the SOS, representing 5.4% of the called-up share capital with a market value of £68.7m (2015: £71.6m). There are 14,926,677 (2015: 12,663,133) of these shares held in the trust on which dividends are waived. Currency translation reserve Since first-time adoption of the International Financial Reporting Standards, the currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations that are integral to the operations of the Company. 19. Cash and cash equivalents Group Company 2016 2015 2016 2015 £’000 £’000 £’000 £’000 Cash at bank and in hand 78,022 76,957 – – Short-term deposits 14,774 18,061 – – Cash and cash equivalents 92,796 95,018 – – Cash and cash equivalents in the statement of cash flows 92,796 95,018 – – Net funds 92,796 95,018 – – The Group operates a multi-currency notional cash pool. Currently the main Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in this cash pool, although it is the Group’s intention to extend the scope of the participation to other Group companies going forward. The structure facilitates interest and balance compensation of cash and bank overdrafts. 20. Financial risk management The Group has exposure to the following risks from its use of financial instruments: (i) credit risk (ii) liquidity risk (iii) market risk This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

107 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 108 918 2015 £’000 2015 £’000 5,818 7,167 5,635 22,700 43,810 95,949 (1,405) (2,579) (3,366) 163,377 Net trade receivables receivables 60 118 258 2015 5,199 5,635 £’000 Annual Report 2016 PageGroup Provision Provision 2016 £’000 5,635 5,070 12,264 (1,259) (8,026) (3,544) 2015 6,117 £’000 22,760 43,928 96,207 169,012 receivables receivables Gross trade Gross 836 2016 £’000 31,489 60,603 205,075 112,147 Net trade receivables receivables 53 102 179 2016 5,070 4,736 £’000 Provision Provision 2016 5,572 £’000 31,542 60,705 112,326 210,145 receivables receivables Gross trade Gross More than 150 days More Past due 31-150 days Past due 0-30 days Not past due Balance at beginning of the year on receivables Impairment losses recognised as uncollectable Amounts written off during the year Amounts recovered Impairment losses reversed Balance at end of the year the expected liquidation proceeds. The Group does not hold any collateral over these balances. The Group the expected liquidation proceeds. The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value of and the present between the carrying amount of these trade receivables the difference represents The impairment recognised individually impaired trade receivables with a balance of £2.4m (2015: £2.9m) which have been placed in litigation. trade receivables individually impaired Most of the allowance for doubtful debts represents a provision for debts which the Group estimate may be irrecoverable, as well as estimate may be irrecoverable, which the Group for debts a provision Most of the allowance for doubtful debts represents Movement in the allowance for doubtful debts: Movement in the allowance for doubtful maturity and existence of previous financial difficulties. maturity and existence of previous client credit risk, clients are grouped according to their credit characteristics, including geographic location, industry, ageing profile, ageing profile, characteristics, including geographic location, industry, to their credit according grouped risk, clients are client credit The majority of the Group’s clients have been transacting with the Group for several years, with losses rarely occurring. In monitoring losses rarely for several years, with transacting with the Group clients have been The majority of the Group’s concentration of credit risk. concentration of credit revenue is attributable to sales transactions with a single client. The geographic diversification of the Group’s revenue also reduces the revenue also of the Group’s attributable to sales transactions with a single client. The geographic diversification is revenue Group’s client base, including the country in which clients operate, also has an influence on credit risk. Less than 3% of the Group’s risk. Less than 3% of the Group’s in which clients operate, also has an influence on credit client base, including the country Group’s The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each client. The demographics of the risk is influenced mainly by to credit exposure The Group’s 46 days). collateral over these balances. The days sales of these receivables at the year end is 50 days in excess of the initial credit period (2015: credit year end is 50 days in excess of the initial at the balances. The days sales of these receivables collateral over these the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not hold any does not hold The Group recoverable. still considered as the amounts are not provided has Group date for which the the reporting Included in the Group’s trade receivables balance are debtors with a carrying amount of £92.9m (2015: £67.4m) that are past due at of £92.9m (2015: £67.4m) that are debtors with a carrying amount balance are trade receivables Included in the Group’s irrecoverable amounts from the provision of our services, determined by reference to past default experience. services, determined by reference of our the provision amounts from irrecoverable date was: at the reporting The ageing of trade receivables this credit period. Thereafter, interest is charged on the outstanding balance. Trade receivables are provided for based on estimated provided are receivables outstanding balance. Trade is charged on the interest period. Thereafter, this credit An initial credit period is made available on invoices. No interest is charged on trade receivables from the date of the invoice during from receivables is charged on trade available on invoices. No interest period is made An initial credit Total trade receivables (net of allowances) held by the Group at 31 December 2016 amounted to £205.1m (2015: £163.4m). 2016 amounted to £205.1m (2015: at 31 December (net of allowances) held by the Group trade receivables Total Trade and other receivables Trade the carrying amount of each financial asset in the balance sheet. asset in the balance amount of each financial the carrying At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by represented is risk credit to The maximum exposure risk. credit concentrations of no significant were sheet date there At the balance to credit risk is monitored on an ongoing basis. on an risk is monitored to credit obligations, and arises principally from the Group’s receivables from clients. Management has a credit policy in place and the exposure in place and the exposure policy has a credit clients. Management from receivables Group’s the from and arises principally obligations, Credit risk is the risk of financial loss to the Group if a client or counterparty to a financial instrument fails to meet its contractualinstrument fails to to a financial if a client or counterparty Group of financial loss to the risk is the risk Credit (i) Credit risk (i) Credit Exposure to credit risk The maximum exposure to credit risk for net trade receivables at the reporting date by geographic region was: Carrying amount 2016 2015 £’000 £’000 EMEA 122,858 89,288 United Kingdom 37,028 40,147 Asia Pacific 27,290 20,545 Americas 17,899 13,397 205,075 163,377 The maximum exposure to credit risk for net accrued income at the reporting date by geographic region was: Carrying amount 2016 2015 £’000 £’000 EMEA 1,917 1,128 United Kingdom 15,617 14,902 Asia Pacific 12,620 12,036 Americas 7,469 6,160 37,623 34,226 The entire accrued income balance is not past due. The fair values of trade and other receivables are not materially different to those disclosed above and in note 13. There is no material effect on pre-tax profit if the instruments are accounted for at fair value or amortised cost. (ii) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management framework that aims to ensure that the Group has sufficient cash or credit facilities at all times to meet all current and forecast liabilities as they fall due. It is the Directors’ intention to continue to finance the activities and development of the Group from retained earnings. Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group also operates a multi-currency notional cash pool to facilitate interest and balance compensation of cash and bank overdrafts. The following are the contractual maturities of financial liabilities: Less than More than 1 month 1-3 months 3-12 months 12 months 2016 £’000 £’000 £’000 £’000 Trade payables 5,330 787 971 427 Accruals and other payables 58,796 16,236 44,459 –

Less than More than 12 1 month 1-3 months 3-12 months months 2015 £’000 £’000 £’000 £’000 Trade payables 9,302 5,122 1,191 44 Accruals and other payables 42,032 21,603 17,721 –

109 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 110 £m 0.3 (0.8) (0.5)

2015

£m 1.5 0.5 (1.0) 2016 Annual Report 2016 PageGroup Derivatives at fair value Derivative assets Net derivative liabilities Derivative liabilities Derivative financial instruments All derivative instruments are classified as level 1 instruments. All derivative instruments are Fair values are not adjusted for credit risk, as required by IFRS 13, because credit impact is not material given the low fair value levels. impact is not material given the low fair value by IFRS 13, because credit risk, as required not adjusted for credit Fair values are s held at the balance sheet date is shown in the table below. in the table below. instruments held at the balance sheet date is shown Information on the fair value of derivative financial manage the risks arising from underlying business activities. manage the risks arising from The Group does not use derivatives for speculative purposes. All transactions in derivative financial instruments are undertaken to financial instruments are does not use derivatives for speculative purposes. All transactions in derivative The Group All derivative financial instruments not in a hedge relationship are classified as derivatives at fair value through the income statement. classified as derivatives at fair value through relationship are a hedge All derivative financial instruments not in policy not to seek to designate these derivatives as hedges. policy not to seek to designate these derivatives currencies, it may use foreign exchange rate derivatives to manage the currency exposure that arises on these loans. It is the Group’s that arises on these loans. It is the Group’s exposure manage the currency exchange rate derivatives to it may use foreign currencies, In certain cases, where the Company gives or receives short-term loans to and from other Group companies with different reporting reporting companies with different other Group loans to and from short-term the Company gives or receives In certain cases, where December 2016 is £2.5m (2015: £0.2m). other comprehensive income. The pre-tax loss on effective hedging instruments deferred within other comprehensive income as at 31 income as within other comprehensive hedging instruments deferred loss on effective income. The pre-tax other comprehensive investment hedges. The portion of gains or losses on the hedging instruments determined to be an effective hedge is transferred to hedge is transferred losses on the hedging instruments determined to be an effective investment hedges. The portion of gains or The Group has entered into hedges to cover its investments in foreign entities in the US and Canada designating them as net entities in the US and Canada designating in foreign into hedges to cover its investments has entered The Group in accounting for its overseas operations. The Group policy is not to hedge translation exposure. policy is not to hedge translation exposure. The Group in accounting for its overseas operations. The Group does not have material transactional currency exposures. The Group is exposed to foreign currency translation differences translation differences currency is exposed to foreign The Group exposures. does not have material transactional currency The Group The main functional currencies of the Group are Sterling, Euro, Chinese Renminbi, Swiss Franc, Singapore Dollar and Australian Dollar. Dollar. Dollar and Australian Swiss Franc, Singapore Chinese Renminbi, Sterling, Euro, are of the Group The main functional currencies and underlying net assets of foreign subsidiaries. and underlying net assets of foreign as a result of transactions in currencies other than the functional currencies of some of its subsidiaries and the translation of the results translation of the results of some of its subsidiaries and the currencies other than the functional of transactions in currencies as a result subject to foreign currency exchange risk due to exchange rate movements. The Group is exposed to foreign currency exchange risk currency is exposed to foreign movements. The Group exchange risk due to exchange rate currency subject to foreign The Group publishes its results in Pounds Sterling and conducts its business in many foreign currencies. As a result, the Group is the Group As a result, currencies. its business in many foreign in Pounds Sterling and conducts publishes its results The Group Currency rate risk Currency rate paid on bank overdrafts was 2.50% (2015: 2.23%). was rate paid on bank overdrafts The Group’s only interest bearing assets and liabilities at 31 December 2016 relate to cash and bank overdrafts. The average interest The average interest to cash and bank overdrafts. 2016 relate assets and liabilities at 31 December bearing only interest The Group’s liabilities are based on relevant national LIBOR equivalents. national based on relevant rate liabilities are rates for determining floating as significant. The benchmark Borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. The Group does not consider this risk The rate risk. to cash flow interest thus exposing the Group arranged at floating rates, are Borrowings Interest rate risk management Interest market risks or the manner in which it manages and measures the risk. in which it manages and measures market risks or the manner the Group’s main exposure currencies is shown on the next page. There has been no material change in the Group’s exposure to exposure change in the Group’s has been no material shown on the next page. There is currencies main exposure the Group’s these risks are not deemed to be material. However, a sensitivity analysis showing hypothetical fluctuations in Pounds Sterling against hypothetical fluctuations in Pounds a sensitivity analysis showing material. However, not deemed to be these risks are The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates, but rates, exchange rates and interest currency of changes in foreign expose it primarily to the financial risks activities The Group’s (iii) Market risk and sensitivity analysis (iii) Market risk and managing capital during the years ended 31 December 2016 and 31 December 2015. 2016 and 31 December ended 31 December capital during the years managing repurchases with subsequent cancellation, or issue new shares. No changes were made in the objectives, policies or processes for or processes in the objectives, policies made No changes were new shares. cancellation, or issue with subsequent repurchases adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders through share share through to shareholders return capital to shareholders, the dividend payment may adjust the Group capital structure, adjust the to ensure that it maintains a strong credit rating and healthy capital ratios to support its business and maximise shareholder value. maximise shareholder its business and capital ratios to support rating and healthy credit a strong that it maintains to ensure or maintain To in economic conditions. it in light of changes adjustments to and makes its capital structure manages The Group Capital is equity attributable to the equity holders of the parent. The primary objective of the Group’s capital management is capital management the Group’s objective of primary The of the parent. holders to the equity attributable is equity Capital disclosed in the table over the page, which therefore should not be considered a projection of likely future events and losses. of likely future a projection should not be considered disclosed in the table over the page, which therefore nterest and exchange rates to vary from the hypothetical amounts and exchange rates to vary from in the global financial markets which may cause fluctuations in interest certain adverse market conditions occur. Actual results in the future may differ materially from those projected, due to developments those projected, materially from may differ in the future results Actual certain adverse market conditions occur. the same basis for 2015. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming forward-looking the sensitivity analysis are the same basis for 2015. The amounts generated from of currency correlation, and assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on constant. The analysis rates, remain and assumes that all other variables, in particular interest correlation, of currency profit or loss by the amounts shown over the page. This analysis is applied currency by currency in isolation, i.e. ignoring the impact by currency or loss by the amounts shown over the page. This analysis is applied currency profit A 10% strengthening of Sterling against the following currencies at 31 December 2016 would have increased/(decreased) equity and at 31 December 2016 would have increased/(decreased) of Sterling against the following currencies A 10% strengthening Sensitivity analysis – currency risk Sensitivity analysis – currency 2016 equity 2016 PBT £’000 £’000 Euro (6,929) (1,992) Australian Dollar (1,247) 56 Swiss Franc (1,727) (182) Chinese Renminbi (1,178) (386) Singapore Dollar (1,203) 40 Other (4,040) (506)

2015 equity 2015 PBT £’000 £’000 Euro (5,287) (1,271) Australian Dollar (1,232) (24) Swiss Franc (1,355) (96) Chinese Renminbi (964) (228) Singapore Dollar (1,044) (52) Other (3,099) (516) A 10% weakening of Sterling against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. 21. Commitments Operating lease commitments At 31 December 2016 the Group was committed to make the following payments in respect of non-cancellable operating leases: Land and buildings Other 2016 2015 2016 2015 £’000 £’000 £’000 £’000 Within one year 28,987 23,473 5,020 3,399 Within two to five years 63,684 57,584 5,301 3,602 After five years 20,319 21,766 – – Total 112,990 102,823 10,321 7,001 The Group leases various offices under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The Group also leases various plant and machinery under operating lease agreements. The Group is required to give varying notice for the termination of these agreements. Capital commitments The Group had £0.7m of contractual capital commitments as at 31 December 2016 relating to property, plant and equipment (2015: £2.6m). The Group had contractual capital commitments of £0.7m as at 31 December 2016 relating to computer software (2015: £1.1m). 22. Contingent liabilities Guarantees The Company has provided guarantees to other Group undertakings amounting to £nil (2015: £0.3m) in the ordinary course of business. It is not anticipated that any material liabilities will arise from the contingent liabilities. VAT Group registration As a result of Group registration for VAT purposes, the Company is contingently liable for VAT liabilities arising in other companies within the VAT group which at 31 December 2016 amounted to £4.8m (2015: £7.5m). 23. Events after the balance sheet date Between 31 December 2016 and 6 March 2017, 5,000 options were exercised, leading to an increase in share capital of £50 and an increase in share premium of £19k.

111 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 112

189 23.1 2016 2015 2015 5,420 1,000 1,882 8,491 £’000 £’000 £’000 16.3% 72,096 99,996 100,952 100,952 621,034 724,291 1,196,125

Amounts owed to related parties to related 2016 517 180 £’000 21.3 2015 2016 £’000 5,786 1,177 7,660 16.2% £’000 798,493 66,208 90,697 90,071 90,071 556,105 Annual Report 2016 PageGroup 1,064,945

2015 £’000 19.3* 2014 636,601 £’000 14.7% 78,461 59,331* 80,361* 80,092* 532,817 1,046,887 Amounts owed

by related parties by related 2016 £’000 13.8* 2013 £’000 13.3% 68,178 664,008 42,604* 64,057* 65,725* 513,881 1,005,502

2015 3,630 £’000 11.9* 2012 £’000 12.4% 65,121 36,197* 57,003* 57,287* 526,869 989,882 Dividends received 2016 8,890 £’000 †

Conversion Profit attributable to equity holders Profit Profit before tax before Profit Operating profit after exceptional items Operating profit Operating profit before exceptional items before Operating profit Gross profit Gross Basic earnings per share (pence) Basic earnings per share Revenue Wages and salaries Wages Social security costs contribution plans Pension costs – defined Share-based payments and deferred cash plan payments and deferred Share-based

Transactions FIVE YEAR SUMMARY consolidation. Details of transactions between the parent company and subsidiary undertakings are shown below. are company and subsidiary undertakings the parent consolidation. Details of transactions between Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on parties of the Company, related between the Company and its subsidiaries, which are Transactions Company Related party transactions Committee having regard to the performance of individuals and market trends. The transactions for the year were: The transactions of individuals and market trends. to the performance Committee having regard on pages 38 to 41. The remuneration of Directors and members of the Executive Committee is determined by the Remuneration and members of the Executive of Directors remuneration on pages 38 to 41. The Key management personnel are deemed to be the Directors and members of the Executive Committee as detailed in the biographies Executive Committee as detailed in the and members of the deemed to be the Directors are Key management personnel Transactions with key management personnel with key management Transactions The Company has a related party relationship with its Directors and members of the Executive Committee, and subsidiaries (Note 12). and subsidiaries of the Executive Committee, and members its Directors with party relationship has a related The Company Identity of related parties related Identity of 24. Related party transactions 24. Related † Operating profit before exceptional items as a percentage of gross profit. of gross exceptional items as a percentage before † Operating profit * Includes exceptional items. Shareholder information and advisers Annual General Meeting To be held on 8 June 2017 at 9.30am at Page House, 1 Dashwood Lang Road, The Bourne Business Park, Addlestone, Surrey, KT15 2QW. Every shareholder is entitled to attend and vote at the Meeting. Final dividend for the year ended 31 December 2016 To be paid (if approved) on 19 June 2017 to shareholders on the register of members on 19 May 2017. Company Secretary Elaine Marriner Company number 3310225 Registered office, domicile and legal form The Company is a limited liability company incorporated and domiciled within the United Kingdom. The address of its registered office is: Page House, 1 Dashwood Lang Road, The Bourne Business Park, Addlestone, Surrey, KT15 2QW.

Auditor Joint corporate brokers Ernst & Young LLP Citigroup 1 More London Place 33 Canada Square London SE1 2AF Canary Wharf London E14 5LB Solicitors HSBC Bank plc Herbert Smith LLP 8 Canada Square Exchange House Canary Wharf Primrose Street London E14 5HQ London EC2A 2HS Registrars Bankers Capita Asset Services HSBC Bank plc The Registry West End Business 34 Beckenham Road Banking Centre Beckenham 70 Pall Mall Kent BR3 4TU London SW1Y 5GZ Financial PR Deutsche Bank Netherlands N.V. De Entree 99 FTI Consultancy 1101 HE Amsterdam 200 Aldersgate The Netherlands Aldersgate Street London EC1A 4HD

113 PageGroup Annual Report 2016 Strategic Report Corporate Governance Financial Statements Additional Information 114

ovision, Annual Report 2016 PageGroup in such manner (if any) as may be in such manner (if any) such pr in the absence of any provided by those rights; or provided with the consent in writing of the in nominal holders of three-quarters of the value of the issued shares of that class (excluding any shares or with shares) class held as treasury the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class,

Limitations and non-resident or non-resident and Limitations shareholders foreign persons who those treats English law UK neither are and hold the shares in the same way nor nationals residents They are or nationals. as UK residents any to own, vote on and transfer free they hold. shares of rights Variation of the CompanyIf at any time the capital classes of shares, is divided into different any class may bethe rights attached to varied either: (a) (b) but not otherwise, and may be so varied either whilst the Company is a going concern or during, or in contemplation of, a winding-up. At every such separate general meeting the necessary quorum shall be at least two persons together at least by proxy holding or representing in nominal value of the issued one-third of the class (excluding any shares shares shares), of that class held as treasury save that at any adjourned meeting any of the class (other than holder of shares by proxy or present shares) treasury shall be a quorum. Unless otherwise the rights by provided expressly those attached to any class of shares, rights shall be deemed not to be varied by the Company of any by the purchase or the holding of such of its own shares shares. as treasury shares Dividend rights ordinary Holders of the Company’s resolution may by ordinary shares dividends but no such dividend declare shall exceed the amount recommended If, in the opinion of the by the Directors. of the Company the profits Directors, available for distribution justify such time from may, payments, the Directors to time, pay interim dividends on the of such amounts and on such shares of such periods as dates and in respect of the Company they think fit. The profits available for distribution and resolved to be distributed shall be apportioned to the amounts and paid proportionately during any portion paid up on the shares of which the of the period in respect at a dividend is paid. The members may, least 21 clear days’ notice. Subject to notice. 21 clear days’ least Act, the Company of the the provisions period the notice to reduce may resolve annual meetings (other than for general an to 14 days on general meetings) The Company proposes annual basis. its authority to hold general to renew notice for anothermeetings on 14 days’ Annual Generalyear in item 17 of the persons entitled to Meeting notice. Two to be transactedvote upon the business shall be a quorum. provide The Articles of Association or restrictions that subject to any rights of on a show attached to any shares, and every dulyhands every member shall have one present appointed proxy representative vote. Every corporate has been duly authorised who present by a corporation has the same voting rights as the corporation would be entitled to. On a poll every member person or by a duly appointed in present shall representative or corporate proxy of which have one vote for every share of which he is a holder or in respect or corporate his appointment as proxy has been made. No representative member shall be entitled to vote in held by him if any any share of respect call or other sum payable by him to the unpaid. Company remains If a member or any person appearing held by a in shares to be interested member has been duly served with a notice under the Act and is in default period in supplying for the prescribed to the Company information thereby otherwise unless the Directors required, determine, the member shall not be of the default shares entitled in respect or to vote (either in to be present or proxy) person or by representative at any general or class meeting of the Company or on any poll or to exercise by membership any other right conferred to such meeting or poll. In in relation any dividend due certain circumstances, shall be of the default shares in respect transferscertificated certain and withheld may be refused. than one A member entitled to more vote need not, if he votes, use all his votes or cast all the votes he uses in A member is entitled to the same way. to appoint another person as his proxy all or any of his rights to attend exercise and speak and vote at a meeting of need not be a A proxy the Company. A member may appoint more member. to attend on the same than one proxy the occasion. This does not preclude attending and voting at the member from meeting or at any adjournment of it.

es, or any of them,

determine that, as between the consolidate and divide all or any of shares resulting from such a sub- such from resulting shares division, any of them may have advantage as or any preference with the others. compared  sub-divide its shar into shares of a smaller amount than into shares and its existing shares;    its share capital into shares of larger capital into shares its share amount than its existing shares;

ordinary resolution: ordinary The Company may from time to time by The Company may from Alteration of capital share capital.share Company no longer has an authorised authorised share capital. As such, the authorised share requirement for a company to have, an requirement (c) The Act abolished the concept of, and (b) Share capital Share number 3310225. (a) in England and Wales with registered with registered in England and Wales name PageGroup plc and is registered plc and is registered name PageGroup The Company is incorporated under theThe Company is incorporated Incorporation operative provisions. operative provisions. of record, and no longer contains any of record, Company has now become a documentCompany has now become Memorandum of Association of theMemorandum of Association of Association. Under the Act, theof Association. Under amended, and the Company’s Articles amended, and the Company’s 2006 of Great Britain (the “Act”), as Britain (the “Act”), 2006 of Great by reference to the Companies Act by reference The summary is qualified in its entirety entirety is qualified in its The summary 2010) and applicable English Law. applicable English Law. 2010) and of Association (as adopted on 21 May (as adopted on 21 of Association provisions of the Company’s Articles of the Company’s provisions The following summarises certainThe following Articles of association of association Articles general meetings) shall be called by at (which shall be called extraordinary (which shall be called extraordinary general meeting and all general meetings to the provisions of the Act, an annual to the provisions location they so determine. Subject whenever and at whatever time and The Directors may call general meetings The Directors General meetings and voting rights General Meeting notice. another year in item 16 of the Annual authority to purchase its own shares for its own shares authority to purchase The Company proposes to renew its to renew The Company proposes shares, including redeemable shares. shares. including redeemable shares, the Company may purchase its own the Company may purchase Subject to the provisions of the Act, Subject to the provisions Purchase of own shares Purchase premium account, in any way. premium redemption reserve and any share and any share reserve redemption reduce its share capital, any capital capital, its share reduce the Company may by special resolution the Company may by special resolution Subject to the provisions of the Act, Subject to the provisions general meeting declaring a dividend upon requirements) under the Uncertificated (c) the giving to him of any other indemnity the recommendation of the Directors, direct Securities Regulations 2001 to register which is on substantially the same that it shall be satisfied wholly or partly by the transfer. terms as indemnities given or to be the distribution of specific assets. given to all of the other directors and/ Directors or the funding by the Company of this No dividend shall be paid otherwise than The Company’s Articles of Association expenditure on defending proceedings out of profits available for distribution as provide for a Board of Directors, consisting or the doing by the Company of specified under the provisions of the Act. of (unless otherwise determined by the anything to enable him to avoid Any dividend unclaimed after a period of Company by ordinary resolution) not fewer incurring such expenditure where all other directors have been given or twelve years from the date of declaration than two Directors, who shall manage the are to be given substantially the same of such dividend shall, if the Directors so business of the Company. The Directors arrangements resolve, be forfeited and shall revert to the may exercise all the powers of the Company. Company, subject to the provisions of the (d) the purchase or maintenance for Articles of Association and any directions any director or directors of insurance Calls on shares given by special resolution. If the quorum is against liability Subject to the terms of allotment, the not fixed by the Directors, the quorum shall (e) his interest arises by virtue of his being, Directors may make calls upon members be two. or intending to become a participant in in respect of any amounts unpaid on their the underwriting or sub-underwriting of Subject to the provisions of the Company’s shares (whether in respect of nominal value an offer of any shares in or debentures Articles of Association, the Directors may or premium) and each member shall pay to or other securities of the Company for delegate any of their powers: the Company as required by the notice the subscription, purchase or exchange amount called on his shares. (a) to such person or committee (f) any arrangement for the benefit of the (b) by such means (including power of employees and directors and/or former Transfer of shares attorney) employees and former directors of the Company or any of its subsidiaries and/ Any member may transfer all or any of his (c) to such an extent or the members of their families or any shares in certificated form by instrument (d) in relation to such matters or territories of transfer in the usual common form or person who is or was dependent on (e) on such terms and conditions such persons, including but without in any other form which the Directors may being limited to a retirement benefits approve. The transfer instrument shall be as in each case they think fit, and such scheme and an employees’ share signed by or on behalf of the transferor delegation may include authority to scheme, which does not accord to him and, except in the case of fully-paid shares, sub-delegate all or any of the powers any privilege or advantage not generally by or on behalf of the transferee. delegated, may be subject to conditions accorded to employees and/or former and may be revoked or varied. Where any class of shares is for the time employees to whom the arrangement being a participating security, title to The Directors may also, by power of relates shares of that class which are recorded attorney or otherwise, appoint any person, (g) any transaction or arrangement as being held in uncertificated form, whether nominated directly or indirectly with any other company in which may be transferred (to not more than by the Directors, to be the agent of the he is interested, directly or indirectly four transferees) by the relevant system Company for such purposes and subject (whether as a director or shareholder concerned. to such conditions as they think fit, and or otherwise), provided that he is not may delegate any of their powers to such the holder of or beneficially interested The Directors may in their absolute an agent. in at least 1% of any class of shares of discretion refuse to register any transfer that company (or of any other company of shares (being shares which are not fully The Articles of Association place a general through which his interest is derived), paid or on which the Company has a lien), prohibition on a Director voting on any and is not entitled to exercise at least provided that if the share is listed on the resolution concerning a matter in which 1% of the voting rights available to Official List of the UK Listing Authority such he has, directly or indirectly, a material members of the relevant company refusal does not prevent dealings in the interest (other than an interest in shares, If a question arises at a Directors’ meeting shares from taking place on an open and debentures or other securities of, or as to the right of a Director to vote, the proper basis. otherwise in or through the Company), question may be referred to the Chairman unless his interest arises only because The Directors may also refuse to register a of the meeting (or if the Director concerned the case falls within one or more of the transfer of shares (whether fully paid or not) is the Chairman, to the other Directors at following: unless the transfer instrument: the meeting), and his ruling in relation to (a) the giving to him of a guarantee, (a) is lodged at the registered office, or any Director (or, as the case may be, the security, or indemnity in respect of such other place as the Directors may ruling of the majority of the other Directors money lent to, or an obligation incurred appoint, accompanied by the relevant in relation to the Chairman) shall be final by him for the benefit of, the Company share certificate(s) and conclusive. or any of its subsidiary undertakings (b) is in respect of only one class of share (b) the giving to a third party of a The Act requires a Director of a company (c) is in favour of not more than four guarantee, security, or indemnity who is in any way interested in a proposed transferees in respect of an obligation of the transaction or arrangement with the company to declare the nature of his The Directors of the Company may Company or any of its subsidiary interest at a meeting of the Directors of the refuse to register the transfer of a share undertakings for which the Director has assumed responsibility in whole or in company (save that a director need not in uncertificated form to a person who part and whether alone or jointly with declare an interest if it cannot reasonably is to hold it thereafter in certificated others under a guarantee or indemnity be regarded as giving rise to a conflict of form in any case where the Company is or by the giving of security interest). The definition of “interest” includes entitled to refuse (or is excepted from the

115 PageGroup Annual Report 2016 We are one of the world’s best known and most respected specialist recruitment consultancies. We deliver recruitment services to clients through a network of 140 offices the interests of spouses, civil partners, of the number of Directors (the (e) notification is received by the Strategic Report across 36 countries. Our vision is to be the leading specialist recruiter in the markets in children, companies and trusts. “Relevant Proportion”) provided that: Company from that person that he is resigning or retiring from his office Borrowing powers of the Directors  (i) the provisions of this paragraph which we operate. (b) shall only apply if the as director, and such resignation The Directors shall restrict the number of Directors retiring or retirement has taken effect in borrowings of the Company and under paragraph (a) above accordance with its terms Contents Highlights exercise all powers of control exercisable is less than the Relevant (f) in the case of an Executive by the Company in relation to its Proportion Director, his appointment as such Strategic Report subsidiary undertakings so as to secure  (ii) subject to the provisions of is terminated or expires and the Gross profit increase (as regards subsidiary undertakings so Directors resolve that he should 1 Chairman’s Introduction the Act and to the relevant far as by such exercise they can secure) provisions of the Articles of cease to be a Director 3 Overview +3.0%* (up 11.7% in reported rates) that the aggregate principal amount Association, the Directors to (g) that person is absent from 4 Business Model (including any premium payable on final retire under this paragraph Directors’ meetings for more than 7 Strategic Review repayment) outstanding of all money (b) shall be those who have six consecutive months (without Revenue Ordinary and Special Dividend 13 Latin America and the UK borrowed by the Group (excluding been longest in office since permission of the other Directors) 15 KPIs amounts borrowed by any member of their last appointment or and the Directors resolve that he reappointment, but as between should cease to be a Director 18 Q&A with Steve Ingham, CEO £1,196.1m 18.44p the Group from any other member of the Group), shall not at any time, save persons who became or were (h) a notice in writing is served on him

19 Corporate Social Responsibility Corporate Governance 2015: £1,064.9m +3.6%* 2015: 27.5p with the previous sanction of an ordinary last reappointed Directors on signed by all the Directors stating 23 Regional Perspectives resolution of the Company, exceed the same day those to retire that that person shall cease to be 25 Risk Management Structure Gross Profit % Non-UK an amount equal to three times the shall (unless they otherwise a Director with immediate effect agree among themselves) be 27 Principal Risks and Uncertainties aggregate of: determined by lot There is no requirement of share 32 Review of the Year (a) the amount paid up on the share ownership for a Director’s qualification. £621.0m 76.4% capital of the Company If the Company, at the meeting at which Amendments to the articles of Corporate Governance 2015: £556.1m +3.0%* 2015: 72.7% (b) the total of the capital and revenue a director retires by rotation, does not fill association 37 Chairman’s Introduction to reserves of the Group, including the vacancy the retiring Director shall, if Corporate Governance Operating Profit % Non-Accounting and Financial Services any share premium account, willing to act, be deemed to have been Subject to the Act, the Articles of reappointed unless a resolution not to 38 Our Board of Directors capital redemption reserve, capital Association of the Company can be contribution reserve and credit fill the vacancy or not to reappoint that 41 The Executive Board altered by special resolution of the £101.0m 61.6% balance on the profit and loss Director is passed. members. 42 Corporate Governance Report account, but excluding sums set In addition to any power of removal 46 Nomination Committee Report 2015: £90.1m +1.4%* 2015: 60.4% aside for taxation and amounts Winding-up under the Act, the Company may, by attributable to outside shareholders 48 Audit Committee Report special resolution, remove a director If the Company is wound up, the Basic Earnings Per Share Conversion rate in subsidiary undertakings of the 53 Directors’ Remuneration Report – before the expiration of his period of liquidator may, with the sanction of a Annnual Statement Company and deducting any debit special resolution of the Company and balance on the profit and loss office (without prejudice to any claim for any other sanction required by law: 55 Directors’ Remuneration 23.1p 16.3% account, all as shown in the latest damages for breach of any contract of Policy Report (a) divide among the members in kind Financial Statements 2015: 21.3p -1.7%* 2015: 16.2% audited consolidated balance sheet service between the director and the 60 Directors’ Remuneration Report and profit and loss account of the Company) and, subject to the Articles of the whole or any part of the assets of 73 Directors’ Report * In constant currency at prior year rates Group, but adjusted as may be Association, may by ordinary resolution, the Company and, for that purpose, 75 Directors’ Statements necessary in respect of any variation appoint another person who is willing to set such values as he deems fair of Responsibility in the paid up share capital or share act as a director, and is permitted by law upon any property to be divided and Our strategy Business model premium account of the Company to do so, to be a director instead of him. determine how the division shall be since the date of that balance sheet The newly appointed person shall be carried out between the members Financial Statements We have established three categories into PageGroup’s business model has proved itself and further adjusted as may be treated, for the purposes of determining (b) vest the whole or any part of the 76 Independent Auditor’s Report which we have grouped each of our markets both through economic cycles and as the necessary to reflect any change the time at which he or any other assets in trustees upon such 81 Consolidated Income Statement based on criteria including the size of the business has expanded into a global enterprise. since that date in the companies director is to retire as if he had become a trusts for the benefit of members 81 Consolidated Statement of opportunity and the potential for future growth. At its core is a focus on organic growth. comprising the Group director on the day on which the director as the liquidator shall think fit, but no member shall be compelled to Comprehensive Income Director’s appointment, retirement in whose place he is appointed was last accept any assets upon which there 82 Consolidated and Parent and removal appointed or reappointed as a Director. Typically under-developed is a liability Company Balance Sheets Large, markets, but where we have At each annual general meeting, there A Director shall be disqualified from 83 Consolidated Statement of Changes High a successful track record and holding office as soon as: Potential confidence in our ability to scale shall retire from office by rotation: in Equity Agile and (a) that person ceases to be a director our operations substantially. Career responsive (a) all Directors of the Company who 84 Statement of Changes in Equity – development structure held office at the time of the two under the provisions of the Act or Parent Company is prohibited by law from being a preceding annual general meetings Additional Information 85 Consolidated and Parent These are large markets where Director Team and who did not retire by rotation at Company Cash Flow Large, we are already proven with profit-led either of them (b) a bankruptcy order is made against Organic compensation Statements Proven a strong track record and a Global that person significant presence. management Growth (b) such additional number of Directors 86 Notes to the Financial mobility as shall, when aggregated with the (c) a composition is made with that Statements number of Directors retiring under person’s creditors generally in Markets which are, or could be, paragraph (a) above, equal either satisfaction of that person’s debts significant profit contributors Productivity-led Additional Information Small Experienced expansion one third of the number of Directors, (d) by reason of that person’s mental with attractive conversion management pool 113 Shareholder information and and Medium, in circumstances where the number health, a court makes an order which High Margin margins, but are unlikely (or not of Directors is three or a multiple of wholly or partly prevents that person advisers yet proven) to be able to grow to three, or in all other circumstances, from personally exercising any more than 300 fee earners. the whole number which is nearest powers or rights which that person to but does not exceed one-third would otherwise have

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