2014 ANNUAL REPORT “Our achievements in 2014 are a strong base for our future growth. We are reporting a profit before tax of £24.7m, successfully delivered new IT systems as our platform for future growth, and achieved external recognition as a great employer becoming one of the Sunday Times’ 50 Best Companies to work for in the UK”.

Simon Featherstone, Global Chief Executive

Ultimate parent undertaking: Secretary: Bibby Line Group Limited Bibby Bros. & Co. (Management) Limited

Directors: Registered Office: Sir Michael Bibby, Bt. Chairman 105 Duke Street Simon Andrew Featherstone, Liverpool Global Chief Executive L1 5JQ Simon Timothy Davies Incorporated in England and Wales Mark Timothy Hartigan (Registered Number 3530461) Jonathan Haymer Leigh Anderson Lones Auditors David John Postings Deloitte LLP Steven Vears Robinson Liverpool Stephen George Rose Darcy Willson-Rymer 22 Ian Watson Bibby Financial Services Limited

STATEMENT FROM GLOBAL CHIEF EXECUTIVE

I am pleased to present as many new entrants compete the great people in this business our Annual Report for 2014. for SME business through both and their contribution to serving Bibby Financial Services traditional and new internet based our clients. Our investment in new (BFS) aspires to be the business models. The BFS response technology has also led to the world’s leading SME finance has been to invest in our business launch of new websites in all our during 2014, developing and countries. We continued to respond company in our chosen implementing new systems that to client needs with the launch of markets, providing the fuel will help us be more efficient in new products in and North for growth to businesses the future and that we believe will America. Our focus has been how around the world. We improve our service to our clients. best to respond to and meet continue to make solid I am proud of our achievement in client needs. progress in pursuit of this implementing the new client system, We would not be able to continue aim, providing our clients Aquarius, during 2014 in many of our to grow our business without the with £660 million of funding UK businesses, Ireland, and continuing support of our funders (2013: £601m) to drive their the . On behalf of the who have provided strong and businesses forward. Board and shareholders I recognise uninterrupted support around the efforts of our people and our IT the globe, growing our funding Our achievements in 2014 are a partners at HPD, and I thank them capacity to £769m, for that strong base for our future growth. for their outstanding contribution. I am extremely appreciative. We are reporting a profit before This is a great platform for our Giving Something Back to tax of £24.7m for the year, we future growth. our local communities remains a successfully delivered new IT The outlook for 2015 is one of strong focus for the whole team. systems as our platform for change, as new entrants continue to Once again I am taken aback by future growth, and we achieved try and disrupt our business model the efforts of our people to support external recognition as a great place whilst many of our markets are likely and raise funds for local charities to work by becoming a Times Top to continue to experience sluggish that resonate personally with them. 50 employer in the UK. Further economic conditions. I believe we In 2014 our employees raised an details of the financial results for must continue to respond positively amazing £226k, including matched 2014 are set out in the Financial to those pressures by continuing funding from Bibby Line Group – Highlights, on pages 10 and 11. to grow our core products and an achievement of which I am 2014 has been a challenging and diversify into new ones that serve very proud. exciting time for financial services our SME clients. Our strategy is Finally I would like to thank all companies serving SMEs. In many based on three core pillars: Being my colleagues whose commitment markets, economies continued to a Great Place to Work; Setting and contributions to growing the experience slow growth, despite the Standard for Service and business is inspiring. Their passion there being overall high supply Value; and Growing Profitably. We for delivering a service to our of capital and liquidity. These were delighted to once again be clients like no other in the industry conditions contribute to a situation recognised in the Sunday Times is truly remarkable. where SMEs are presented with 100 Best Companies to work for new avenues to access funding, in the UK which is testament to

3 Annual Report TIMELINE OF BIBBY FINANCIAL SERVICES 2013-2014 2007 2010 office opened. 2001-2003 Entry into the Acquisition of 1981 West Midlands Offices Kopparberg Bibby Line Group 2005 Business opened in and Finans in establishes -2006 Centre and Warsaw, Sweden a factoring 1990-1993 Lyon, Warrington Sydney, New Delhi business within Acquisitions of Dublin Office & Florida office opened Hong Kong Bibby Line’s Berisford Factors and opened in office opened accounts Ltd, Maddox Toronto the UK. department in Factoring & offices Liverpool Anpal Finance Ltd opened

2014 Debts Factored 1985 1985 1985 1985 1985 1985 1985 1985 Debts Factored £1.55M £8.34BN 1981 1981 1981 1981 1981 1981 1981 1981 Bibby Financial Services 1,000+

1985 5,000+ Factoring business 1998 2004 migrated to a Client Dallas office 2010 wholly owned numbers opened 2008 Client 2011 subsidiary and break the Acquisition numbers New Zealand renamed Bibby 1,000 barrier of Arbuthnot break the office opened Financial Services Commercial 5,000 barrier and strategic Acquired Finance Ltd partnership assets of with DAS Siemens in the Receivables Netherlands Finance Ltd Düsseldorf began office opens

CONTENTS

P2 & 3 Statement from Global Chief Executive GOVERNANCE P6 & 7 Bibby Financial Services at a Glance P24 & 25 Directors’ Report & Statement STRATEGIC REPORT of Directors’ Responsibilities P8 & 9 Statement from Global Finance Director P26 & 27 Auditor’s Report P10 - 12 Financial Highlights FINANCIAL STATEMENTS STRATEGY & OPERATIONS P28 Group Profit & Loss Account & Statement of Total Group Recognised Gains and Losses P14 & 15 Business Review P29 Balance Sheets P16 & 17 Business Strategy P30 Group Cash Flow Statements P18 - 21 Risk Management P31 - 47 Notes to the Financial Statements P22 & 23 We believe in giving something back

4 Bibby Financial Services Limited OUR VALUES

Our values are at the heart of everything we do, and it is our team’s passion for them that makes us who we are and drives our success.

POWERED BY PEOPLE PUTTING WE WORK AS A FAMILY We recognise our strength in our CUSTOMERS FIRST Our roots are important to us, people and they make the company Our clients are at the heart and that is why we are proud to what it is today. They inspire and of our business. That’s why we be part of the Bibby Line Group shape our future. We give our put them at the heart of everything family. The values we stand by and people encouragement and we do. That means taking the time demonstrate are the foundations opportunity to achieve their to really get to know them, to upon which our parent and Bibby potential and the best for our understand their needs, listen to Financial Services have built clients and our business. what they say and provide them successful businesses. Our strength We don’t just say our people are with the very best solutions. is the relationships we have built empowered, we put it into practice. with our businesses, our clients, We value, respect and seek out our suppliers, our partners and the individual talents. By investing in communities in which we work. and developing our people and Paramount to those relationships encouraging teamwork, we are is our continual aim to maintain high collectively investing in our future. AMBITIOUS CHALLENGE quality and professional standards We love being a part of a winning and we are committed to team and enjoy the challenge of supporting trustworthy teams. coming up with ideas to make We keep our promises and ensure things happen. We embrace we continually aspire to be a good change in order to grow and are company to work with, to work POSITIVE ENERGY consistently looking for ways to for and to succeed with. Our people bring Bibby Financial improve, because it’s about wanting Services alive with their passionate to make things better so that OUR CUSTOMERS ARE and vibrant approach to work and both our business and our clients THE LIFEBLOOD OF OUR life in general. We gain from each keep ahead of our respective BUSINESS. THAT’S WHY other’s energy, sparking off ideas competition. Standing still is not WE PUT THEM AT THE and inspiring each other. We are a an option for us or our clients – HEART OF EVERYTHING bright and colourful organisation that’s why enterprising, enthusiastic WE DO. and it is our people that provide and purposeful people with ‘yes we that colour. We adapt and help can’ attitudes thrive within Bibby shape our ever changing world to Financial Services. ensure we make the most of it, but to also make the most of what each employee has to offer. Our values make work more enjoyable and a fun place to be!

5 Strategic Report BIBBY FINANCIAL SERVICES AT A GLANCE

PROUD TO HELP 8,900 CLIENTS GROW THEIR BUSINESSES BY PROVIDING IN EXCESS OF £650M OF FUNDING £226k DONATED TO CHARITIES TO SUPPORT OUR LOCAL COMMUNITIES POWERED BY A TEAM OF 1,255 DEDICATED EMPLOYEES OVER £14.3M INVESTED IN OUR SYSTEMS AND THE FUTURE IN 2014 £1.16M INVESTED IN TRAINING AND DEVELOPING OUR PEOPLE IN 2014 50 OFFICES ACROSS 16 COUNTRIES, IN EUROPE, THE AMERICAS AND ASIA PACIFIC ONE OF THE SUNDAY TIMES 100 BEST COMPANIES TO WORK FOR IN THE UK

6 Bibby Financial Services Limited BIBBY FINANCIAL SERVICES AT A GLANCE

UK North America Banbury*, Basingstoke, Belfast, Birmingham, Canada: Montreal, Toronto Bradford, Brentwood, Bristol, Edinburgh, USA: Atlanta, Boynton Beach (Florida), Chicago, Glasgow, Hastings, Leicester, Liverpool, Los Angeles, Nashville London, Manchester, Slough, Sunderland, Asia Pacific Leeds, Warrington Australia: Adelaide, Brisbane, Melbourne, Perth, Sydney Europe India: Gurgaon Czech Republic: Brno Hong Kong **: Aix en Provence, Lyon, Paris, New Zealand: Auckland Lille, Nantes Singapore Germany/Netherlands: Düsseldorf Ireland: Dublin

Poland: Katowice, Poznan, Warsaw *Bibby Factors International, Bibby Trade Services, Bibby Factors Slovakia: Bratislava **The French business is a direct subsidiary of Bibby Line Group Limited 7 Sweden: Stockholm Strategic Report STATEMENT FROM GLOBAL FINANCE DIRECTOR

FINANCIAL PERFORMANCE The Board of BFS consider the best measure of financial The total value of goodwill at performance to be Profit Before Tax (PBT). For the year 31 December 2014 was £1.3m (2013 ended 31 December 2014 BFS delivered a PBT (ordinary £2.4m), and this is being amortised activities) of £24.7m (2013 : £31.5m), after significant as per the BFS accounting policy. expenditure on developing and implementing new systems The goodwill and intangible assets have been tested for impairment as (£3.7m) which will be an important platform for future growth. at 31 December 2014, and the Board The decision to invest strongly has contributed to a reduction is comfortable that no impairment in Return On Shareholder Funds (ROSF) in 2014 (11% : 2013 is required. 14%) and increased our cost income ratio (73% : 2013 70%). We believe this investment will build the platform FINANCIAL RISK for future sustainable growth. MANAGEMENT The financial risks BFS face have For the year ended 31 December been considered and policies have 2014 BFS reported turnover in BFS GENERATED been implemented to deal with each Sterling of £159m (2013 £161m), £18.9M OF CASH IN risk. The most significant financial which is an annual growth of 1.8% at 2014 FROM TRADING, risks are considered to be liquidity constant exchange rates year on AND INVESTED £14.3M risk, finance cost risk, and exchange year. Debts Factored grew more rate transaction risk. In each case the strongly (2.7% year on year), market The investment in new systems risk is managed by matching assets pressure reducing our gross margin undertaken during 2014 also added and liabilities on the relevant basis. to 1.69%. The performance of each £10.1m to fixed assets and £0.8m We advance to our clients and raise region is illustrated in the Financial to intangible assets in the year. funds on a largely matched basis, Highlights section on pages 10-11, Interest payable for 2014 was BFS charge clients and pay for funds and discussed in more detail in the £18.0m (2013: £16.9m), and this is on an aligned charging basis, and Statement from the Chief Executive. primarily the cost of funding our BFS raise funds in the same currency Operating costs for 2014 advances to clients. The amount as we advance. Where necessary (i.e. were £116.5m (2013 £112.8m), drawn by our clients at December where there is no matching trading and include the investment costs 31 2014 was £660m (2013: £601m), balance to a currency exposure) we referred to above. Stripping out the and is a good reflection of the address exchange rate transaction investment costs overhead growth underlying growth of our business. risk by taking out forward cover in at constant exchange rates is 3%. The BFS Board monitor cash the form of a currency derivative generated by trading after contract. These were entered into “THE MOST expenditure for investment during 2014, after significant review SIGNIFICANT and this measure is set out by the Directors of the effectiveness FINANCIAL RISKS under the KPI section of these of the derivatives to hedge the ARE CONSIDERED TO financial statements. exchange rate risk exposure. No BE LIQUIDITY RISK, BFS generated cash of £4.6m swaps were required for BFS at FINANCE COST RISK, on this measure (2013 £18.9m), the reporting date of 31 December AND EXCHANGE RATE the year on year reduction being 2014 and any contracts held were TRANSACTION RISK.” largely driven by the increase taken out on behalf of clients of our in investment. subsidiaries.

8 Bibby Financial Services Limited

BFS trades in various countries any uncertainty on the viability around the world and is exposed of the BFS’s business model and to many different currencies. The the extent to which they might functional and reporting currency affect the preparation of the for BFS is sterling (GBP). BFS financial statements on a going therefore also carries an exchange concern basis. rate translation risk in preparing Based on this assessment the the financial statements. No Directors consider that the Group specific exchange instruments maintains an appropriate level of are used to protect against this capital and liquidity, sufficient to translation risk because it is a meet both the normal demands of non-cash risk to the company. the business and the requirements The financial risks connected which might arise in stressed with contracts and warranties, circumstances. It also maintains including the consideration of a borrowing facility to supplement warranty terms, duration, and liquidity, if required. In addition, other commercial or legal terms the BFS Group’s assets are assessed are considered carefully by BFS for recoverability on a regular before being entered into. basis and provision is made where appropriate. The Directors consider GOING CONCERN that the Group is not exposed to Stephen Rose The current uncertain economic losses on these assets which would Global Finance Director conditions present increased risks affect their decision to adopt the for all businesses. In response to going concern basis. such conditions, the Directors On this basis the Directors have have carefully considered these a reasonable expectation that, risks, including an assessment of despite uncertain market conditions, the Group has sufficient funding and liquidity to ensure that it will “THE DIRECTORS continue in operational existence CONSIDER THAT THE for the foreseeable future. GROUP MAINTAINS AN Accordingly the Directors of Bibby APPROPRIATE LEVEL Financial Services Limited have OF CAPITAL AND adopted the going concern basis in LIQUIDITY, SUFFICIENT preparing the financial statements TO MEET BOTH THE of the Group. NORMAL DEMANDS OF THE BUSINESS AND THE REQUIREMENTS WHICH MIGHT ARISE IN STRESSED CIRCUMSTANCES.”

9 Strategic Report FINANCIAL HIGHLIGHTS BFS BFSHIGHLIGHTS HIGHLIGHTS AT A AT GLANCE A GLANCE EXECUTIVEEXECUTIVE SUMMARY SUMMARY BFS BFSHIGHLIGHTS HIGHLIGHTS AT A AT GLANCE A GLANCE EXECUTIVEEXECUTIVE SUMMARY SUMMARY 20142014 TURNOVER TURNOVER 20142014 PBT PBT(ORDINARYACTIVITIES) (ORDINARYACTIVITIES) REGION2014REGION2014 TURNOVER % SHARE TURNOVER % SHAREYEAR YEAR(£000) (£000) REGION2014REGION2014 PBT % SHARE (ORDINARYACTIVITIES)PBT % SHARE (ORDINARYACTIVITIES)YEAR YEAR(£000) (£000) BFS BFSREGIONAL REGIONAL HIGHLIGHTS HIGHLIGHTS AT A AT GLANCE A GLANCE REGIONREGION % SHARE % SHAREYEAR2009 YEAR2009(£000)114,978 (£000)114,978 REGIONREGION % SHARE % SHARE YEAR2009 YEAR2009(£000)18,581 (£000)18,581 BFS BFSREGIONAL REGIONAL HIGHLIGHTS HIGHLIGHTS AT A AT GLANCE A GLANCE 17% 17% 14% 14% TURNOTURNOVER: VER:EUROPE EUROPE (£000) (£000) 136,289 136,289 TURNOTURNOVER: VER:UK (£000) UK (£000) 20102009 20102009114,978 114,978 20102009 2010200918,58134,257 18,58134,257 14% 2014 UK 2014TURN UKOV TURNER: OVER: UK TURNOUKVER: TURNOVER: 2014 EUROPE2014 EUROPE TURNOV TURNER: OVER: EUROPEEUROPE TURNOVER: TURNOVER: 17% 17% 14% TURNOVER: UK (£000) TURNOTURNOVER: VER:EUROPE EUROPE (£000) (£000) 20112010 20112010 136,28154,910136,287 154,9107 15% 15% 2011 2011201034,2540,706834,2540,0687 PERTURNO PRODUCTPERVER: PRODUCT GROUP UK (£000)GROUP (£000) (£000)YEAR (£000)YEAR (£000) PER COUNTRPER CYOUNTR (£000Y) (£000) YEAR (£000)YEAR (£000) 13% 13% 2010 58% 58% 161,430 66% 66% 2014 UK2014 TURN UKOV TURNER: OVER: UK TURNOUK VER:TURNOVER: 2014 EUROPE2014 EUROPE TURNOV TURNER: OVER: EUROPEEUROPE TURNOVER: TURNOVER: 20122011 20122011 154,107 154,161,430107 15% 15% 20122011 2012201133,40940,06833,40940,068 FAPERCT PRODUCTORINGPERFACT PRODUCTORING GROUP GROUP(£000)59,50 (£000)3 59,50YEAR3 (£000)YEAR (£000) POLANDPER COUNTRPOLANDPER CYOUNTR (£000Y) (£0006,928) 6,928YEAR (£000)YEAR (£000) 13% 13% INVOICEINV DISCOICEOUNTING DISCOUNTING10,267 10,267 IRELANDIRELAND 3,511 3,511 5% 5% 58% 58% 12% 12% 2013 2013 161,161,430038 161,161,430038 66% 66% 2013 201331,474 31,433,40974 9 33,409 9 2012 2012 2012 2012 71 LEASINGLEASING 5,091 5,091 71 GERMANYGERMANY 2,530 2,530 50 FACTORINGFACTORING 59,503 59,503 50 POLANDPOLAND 6,928 6,928 ,76 ,76 ,7 SPECIALISSPECIALIST/OTHERT/OTHER17,577 17,577 ,7 NETHERLANDNETHERLANDS S 2,108 2,108 5% 5% INVOICEINV DISCOICEOUNTING DISCOUNTING10,267 10,267 IRELANDIRELAND 3,511 3,511 20142013 20142013 159,161,155038 159,161,155038 20142013 2420142013,71831,42474,71831,474 77 88,291 96,5 97 92,017 92,438 12% 77 88,291 96,5 97 92,017 92,438 12% 9 2 9 CZECH REPUBLICCZECH REPUBLIC 1,903 1,903 2 71 LEASINGLEASING 5,091 5,091 71 GERMANYGERMANY 2,530 2,530 50 TOTAL TURNOTOTALVER TURNOVER92,438 92,43850 112 112 10 10 , ,

‘09 ‘10 ‘11 ‘12 ‘13 ‘14,76 ,76

‘09,7 ‘10 ‘11 ‘12 ‘13 ‘14 SPECIALISSPECIALIST/OTHERT/OTHER17,577 17,577 ,7 SLNETHERLANDOVAKIASLNETHERLANDOVAKIAS S 2,731081 2,108731 2014 2014 159,155 159,155 2014 242014,718 24,718 10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC 10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC 88,291 96,5 97 92,017 92,438 77 77 88,291 96,5 97 92,017 92,438 2 SWEDENSWEDEN 708 708 2 TOTAL TURNOTOTAL VERTURNOVER92,438 92,438 CZECH REPUBLICCZECH REPUBLIC 1,903 1,903 112 112 10 ‘09 ‘10 ‘09‘11 ‘10‘12 ‘11‘13 10 ‘12‘14 ‘13 ‘14 , , NORTH AMERICA NORTH AMERICA ‘09 ‘10 ‘09‘11 ‘10‘12 ‘11‘13 ‘12‘14 ‘13 ‘14 TOTSLOVALAKIA TURNOTOTSLOVALAKIAVER TURNOVER18,420731 18,420731 NORTH AMERICA NORTH AMERICA

10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC 10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC SWEDENSWEDEN 708 708 EUROPEEUROPE EUROPEEUROPE ‘09 ‘10 ‘09‘11 ‘10‘12 ‘11‘13 ‘12‘14 ‘13 ‘14 NORTH AMERICANORTH AMERICA NORTH AMERICANORTH AMERICA TOTAL TURNOTOTALVER TURNOVER18,420 18,420 UK UK UK UK EUROPEEUROPE EUROPEEUROPE UK UK UK UK 20142014 DEBTS DEBTS FACTORED FACTORED 20142014 CLIENT CLIENT ADVANCES ADVANCES 20142014 DEBTS DEBTS FACTORED FACTORED REGIONREGION % SHARE % SHAREYEAR YEAR(£M) (£M) REGION2014REGION2014 CLIENT % SHARE CLIENT % SHARE ADVANCES ADVANCESYEAR YEAR(£M CL (£MOSING) CLOSING) REGIONREGION % SHARE % SHAREYEAR YEAR(£M) (£M) REGIONREGION % SHARE % SHARE YEAR YEAR(£M CL (£MOSING) CLOSING) 19% 19% 2009 20094,671 4,671 15% 15% 2009 2009378 378

2010 20105,813 5,813 15% 15% 20102009 2010374568 456 TURNOTURNOVER: VER:NORTH NORTH AMERICA AMERICA (£000) (£000) TURNOTURNOVER: VER:ASIA ASIAPACIFIC PACIFIC (£000) (£000) 19% 19% 2009 20094,671 4,671 11% 11% 2009 378 10% 10% 6,968 6,968 532 20112010 201120105,813 5,813 60% 60% 20112010 20112010456 456532 2014TURNO NORTHTURNO2014VER: AMERICANORTHVER: NORTHAMERICA TURNO NORTHVER: TURNO AMERICANORTHVER: AMERICA AMERICANORTH (£000) AMERICA (£000) 2014 ASIA2014 TURNOPA CIFICASIA TURNO PATURNOCIFICVER:VER: TURNO VER:ASIAVER:A ASIASIA PA PACIFICCIFICA SIAPA PACIFIC CIFIC(£000) (£000) 60% 60% 11% 11% PER COUNTRPER CY/OUNTRGROUPY/ (£000)GROUP (£000)TURNOVER:TURNO YEARVER: (£000) YEAR (£000) PER COUNTRPER CYOUNTR (£000Y) (£000) TURNOVER:TURNO YEARVER: (£000) YEAR (£000) 10% 10%2012 2012 6,9687,663 7,663 14% 2012 2012 557 557 11% 2011 2011 6,968 60% 60% 14% 2011 2011 532 532 2014 NORTH2014 NORTHAMERICA AMERICA TURNO VER:TURNONORTHVER: NORTHAMERICA AMERICA 2014 AS2014IA PA ASCIFICIA PA TURNOCIFICVER: TURNOVER:ASIA PAACIFICSIA PACIFIC 60% 60% 11% USA USA 11,362 11,362 AUSTRALIA/AUSTRALIA/ 25,031 25,031 2013 2013 8,120 8,120 2013 2013 601 601 PER COUNTRPER CY/OUNTRGROUPY/ GROUP(£000) (£000)TURNOVER:TURNO YEARVER: (£000) YEAR (£000) PER COUNTRPER CYOUNTR (£000Y) (£000) TURNOVER:TURNO YEARVER: (£000) YEAR (£000) 2012 2012 7,663 7,663 14% 14% 2012 2012 557 557 CANADACANADA 5,240 5,240 NEW ZEALANDNEW ZEALAND 11% 11% TRANSPORTRANSPORTATION TATION4,444 4,444 HONG KOHONGNG KONG 929 929 2014 2014 8,338 8,338 2014 2014 660 660 1 USA USA 11,362 11,362 1 AUSTRALIA/AUSTRALIA/ 25,031 25,031 2013 2013 8,120 8,120 2013 2013 601 601 8 8

SINGAPORE 851 13

SINGAPORE 851 13 006 72 006 72 046 046 154 TOTCANADAL TURNOACANADTOTALVER TURNOA VER21,5,204640 21,5,204640 154 NEW ZEALANDNEW ZEALAND ASIA PACIFICASIA PACIFIC ASIA PACIFICASIA PACIFIC ,251 ,7 ,251 ,7 110 INDIA INDIA 441 441 110 16, 18, 18,643 21, 23,206 21, TRANSPORTRANSPORTATIONTATION 4,444 4,444 16, 18, 18,643 21, 23,206 21, HONG KOHONGNG KONG 929 929 2014 8,338 8,338 2014 660 1 2014 2014 660 1 27 11, 16 ,73 22,935 25,899 27 27 11, 16 ,73 22,935 25,899 27 8 8 NORTH AMERICANORTH AMERICA NORTH AMERICANORTH AMERICA

SINGAPORE 851 13

SINGAPORE 851 13 006 72

046 TOTAL TURNOVER 27,251 ‘09 ‘10 ‘11 ‘12154 ‘13 ‘14 TOTAL TURNOVER 27,251

‘09006 ‘10 ‘11 ‘12 ‘13 ‘14 72 046 TOTAL TURNOTOTAL VERTURNOVER21,046 21,046 154 ‘09 ‘10 ‘09‘11 ‘10‘12 ‘11‘13 ‘12‘14 ‘13 ‘14 ASIA PACIFICASIA PACIFIC ASIA PACIFICASIA PACIFIC ,251 ,7 ,251 ,7 110 INDIA INDIA 441 441 110 16, 18, 18,643 21, 23,206 21, EUROPEEUROPE EUROPEEUROPE 18,643 21, 23,206 21, 16, 18, 27 11, 16 ,73 22,935 25,899 27 27 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 TOTAL TURNOVER 27,251 11, 16 ,73 22,935 25,899 27 NORTH AMERICANORTH AMERICA NORTH AMERICANORTH AMERICA ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 TOTAL TURNOVER 27,25‘091 ‘10 ‘09‘11 ‘10‘12 ‘11‘13 ‘12‘14 ‘13 ‘14 UK UK UK UK EUROPEEUROPE EUROPEEUROPE BFS BFSKEY KEYPERFORMANCE PERFORMANCE INDICATORS INDICATORS UK UK UK UK BFS BFSKEY KEY PERFORMANCE PERFORMANCE INDICATORS INDICATORS

RETURNRETURN ON ON CASHCASH SHAREHOLSHAREHOLDERS DERS FUNDINFUNDING G GENERAGENERATION TION CLIENTCLIE ADNTVA ADNCESVANCES NUMBENUMBER OF R OF NUMBENUMBER OF R OF GROSSGR OSS COST COINCOST MEINCO ME CASHCASH FUNDRETURNSRETURNFUND (£ ON00S 0) (£ ON00 0) CAPACICATYPA (£CIM)TY (£M) (£000(£) 000) % OF %ASSIGNED OF ASSIGNED DEBT DEBT CLIENTCLIES NTS DEBTORDEBTS (UORK S000’S (UK 000’S) MAR) GIMARN %GIN % RATIORATIO SHAREHOLSHAREHOLDERS DERS FUNDINFUNDING G GENERAGENERATION TION CLIENTCLIE ADNTVA ADNCESVANCES NUMBENUMBER OF R OF NUMBENUMBER OF R OF GROSSGR OSS COST COINCOSTME INCO ME FUND‘10 FUNDS‘10 (£00S0) (£000) CA‘10 PACACI‘10TYPA (£CITYM) (£M) (£‘10000(£‘10) 000) %‘10 OF %ASSIGNED‘10 OF ASSIGNED DEBT DEBT CLIE‘10 NTCLIE‘10S NTS DEBT‘10 ORDEBT‘10 S (UORK S000’S (UK 000’S) MAR‘10) GIMAR‘10N %GIN % RA‘10 TIORA‘10 TIO

‘11‘10 ‘10‘11 ‘11‘10 ‘10‘11 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 ‘11‘10 10 ‘12‘11 ‘11‘12 ‘12‘11 ‘11‘12 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11 ‘12‘11

‘13‘12 ‘12‘13 ‘13‘12 ‘12‘13 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12 ‘13‘12

‘14‘13 ‘13‘14 ‘14‘13 ‘13‘14 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13 ‘14‘13

METHOD‘14 METHOD ‘14OF CAL CULAOF CALTIONCULATION METHOD‘14 METHOD ‘14OF CAL CULAOF CALTIONCULATION METHOD‘14 METHOD ‘14OF CAL CULAOF CALTIONCULATION METHOD‘14 METHOD ‘14OF CAL CULAOF CALTIONCULATION METHOD‘14 METHOD OF‘14 CAL CULAOF CALTIONCULATION METHOD‘14 METHOD OF‘14 CAL CULAOF CALTIONCULATION METHOD‘14 METHOD OF‘14 CAL CULAOF CALTIONCULATION METHOD‘14 METHOD OF‘14 CAL CULAOF CALTIONCULATION Profit forPr theofit finanical for the finanicalyear (afte yer ar (afteTor tal extToernaltal exfundingternal capacityfunding ,capacity####, #### Closing clientClosing ad clientvances ad (trvaadences (trade ### ### ### ### Profit forPr theofit financial for the financialyear on year on OperatingOper costs,ating divide costs,d divided taxMETHOD and minorityMETHODtax OF and CAL minorityint OFCULAer est)CALTION intCULAdividederest)TION dividedinMETHOD GBP (M),METHODin OF GBP at CAL the (M), CULAOFrespectiv at CAL theTIONCULA reespectiv yearTIONe yearMETHODMETHOD OF CAL CULAOF CALTIONCULATION debtMETHODors -debtMETHOD trOFadeors CAL cr -edit CULAtrOFadeors CAL TIONcr) editCULAorsTION) METHODMETHOD OF CALCULA OF CALTIONCULATION METHODMETHOD OF CALCULA OF CALTIONCULATION orMETHODdinary oractivitiesMETHOD OFdinary CAL activities CULA beforOF CALTIONe tax beforCULAation.eTION taxation.byMETHOD turnovebyMETHOD OFr. turn CALoveCULA OFr. 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OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE by the openingby the opening shareholders shareholders funds. funds.and dateand. date. divided bydivided trade by debt tradeors. debtors. Add backAd operd backating oper costs.ating Divide costs. DivideProfit forPr theofit finanical for the finanicalyear year STRATEGICSTRA OBJECTIVETEGIC OBJECTIVE Profit forPr theofit finanical for the finanicalyear (afte yer ar (aftePrr ofit forPr theofit finanical for the finanicalyear (afte yer ar (aftePrr ofit forPr theofit finanical for the finanicalyear (afte yer ar (aftePrrofit forPr theofit finanical for the finanicalyear (afte yer ar (after Profit forPr theofit finanical for the finanicalyear (afte yer ar (after Profit forPr theofit finanical for the finanicalyear (aft yeer ar (aftbyer debts byfact debtsored. factored. (aftSTRAer TEGICtax(aft SandTRAer OBJECTIVE minoritytaxTEGIC and OBJECTIVE minorityinterest) interest) taxSTRA andTEGIC minorityStaxTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) dividedtaxSTRA andTEGIC minorityStaxTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) dividedtaxSTRA andTEGIC minoritytaxSTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) dividedtaxSTRA andTEGIC minoritytaxSTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) divided taxSTRA andTEGIC minoritytaxSTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) divided taxSTRA andTEGIC minoritytaxSTRA and OBJECTIVETEGIC minorityinter OBJECTIVEest) intdividederest) dividedProfit forPr theofit finanical for the finanicalyear (afte yearr (aftedividedr by the opening Profit fordividedPr theofit finanical for by the the yefinanical openingar year byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afeholders funds.ter funds.byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afeholders funds.ter funds.byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afeholders funds.ter funds.byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afeholders funds.ter funds. byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afeholders funds.ter funds. byPr ofitthe foropeningby the the finanical openingshareholders ye sharar (afteholders funds.er funds.taxSTRA andTEGIC minoritytaxSTRA and OBJECTIVETEGIC minorityinter est)OBJECTIVE intdividederest) dividedshar eholders funds. Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after (after taxshar(aft andeholderser minority tax and funds. intminorityerest) interest) tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided by the openingby the openingshareholders shareholders funds. funds. tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) dividedProfit forPr theofit finanical for the finanicalyear (afte yrear (aftedividedr bydivided the opening by the opening by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds.tax and minoritytax and minorityinterest) intdividederest) dividedshar eholdersshar eholdersfunds. funds. by the openingby the sharopeningeholders shar eholdersfunds. funds. Bibby Financial Services Limited

EXECUTIVE SUMMARY BFSBFS HIGHLIGHTS HIGHLIGHTS AT AT A GLANCEA GLANCE EXECUTIVE SUMMARY 20142014 TURNOVER TURNOVER 20142014 PBT PBT (ORDINARYACTIVITIES) (ORDINARYACTIVITIES)

REGIONREGION % SHARE % SHARE YEARYEAR (£000) (£000) REGIONREGION % SHARE % SHARE YEARYEAR (£000) (£000) BFSBFS REGIONAL REGIONAL HIGHLIGHTS HIGHLIGHTS AT AT A GLANCEA GLANCE 20092009 114,978114,978 20092009 18,58118,581 17% 17% 14%14% TURNOTURNOVER:VER: UK UK(£000) (£000) TURNOTURNOVER:VER: EUROPE EUROPE (£000) (£000) 20102010 136,28136,289 9 20102010 34,2534,257 7

2014 UK2014 TURN UK TURNOVEROV: ER: UK TURNOUK TURNOVER: VER: 2014 2014EUROPE EUROPE TURN TURNOVEROV: ER: EUROPEEUROPE TURNO TURNOVER:VER: 2011 2011 154,10154,7 107 15%15% 20112011 40,06840,068 PER PRODUCTPER PRODUCT GROUP GROUP (£000) (£000) YEARYEAR (£000) (£000) PER CPEROUNTR COUNTRY (£000Y (£000) ) YEARYEAR (£000) (£000) 13% 13% 58%58% 20122012 161,430161,430 66%66% 20122012 33,40933,409 FACTORINGFACTORING 59,5059,503 3 POLANDPOLAND 6,9286,928 5% 5% INVOICEINV OICEDISC OUNTINGDISCOUNTING10,26710,267 IRELANDIRELAND 3,511 3,511 12% 20132013 161,03161,8 038 20132013 31,431,474 74

9 12% 9 71 LEASING 5,091 71 GERMANY 2,530

LEASING 5,091 50 GERMANY 2,530 50 ,76 ,7 ,76 SPECIALISSPECIALIST/OTHERT/OTHER 17,57717,577 ,7 NETHERLANDNETHERLANDS S 2,1082,108 20142014 159,155159,155 2014201424,72418,718 88,291 96,5 97 77 92,017 92,438 2 77 88,291 96,5 97 92,017 92,438 CZECH REPUBLIC 1,903 2 TOTALTOT TURNOAL TURNOVER VER 92,43892,438 CZECH REPUBLIC 1,903 BFSBFS HIGHLIGHTS HIGHLIGHTS AT AT A GLANCEA GLANCE 112 10 112 10 , ‘09 ‘10‘09 ‘11‘10 ‘12‘11 ‘13‘12 ‘14‘13 ‘14 SLOVSLAKIAOVAKIA 731 731 , 12,539 15,958 16,608 18, 18,420 10 ASIA PACIFIC ASIA PACIFIC

10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC SWEDENSWEDEN 708 708 ‘09 ‘10‘09 ‘11‘10 ‘12‘11 ‘13‘12 ‘14‘13 ‘14 NORTH AMERICA NORTH AMERICA EXECUTIVEEXECUTIVE SUMMARY SUMMARYTOTALTOT TURNOAL TURNOVER VER 18,42018,420 NORTH AMERICA NORTH AMERICA 2014EUROPE2014EUROPE TURNOVER TURNOVER 2014EUROPE2014EUROPE PBT PBT (ORDINARYACTIVITIES) (ORDINARYACTIVITIES) UK UK UK UK REGIONREGION % SHARE % SHARE YEARYEAR (£000) (£000) REGIONREGION % SHARE % SHARE YEARYEAR (£000) (£000) BFSBFS REGIONAL REGIONAL HIGHLIGHTS HIGHLIGHTS AT AT A GLANCEA GLANCE 20092009 114,978114,978 20092009 18,58118,581 20142014 DEBTS DEBTS17% 17 FACTORED% FACTORED 20142014 CLIENT CLIENT14%14% ADVANCES ADVANCES TURNOTURNOVER:VER: UK UK (£000) (£000) TURNOTURNOVER:VER: EUROPE EUROPE (£000) (£000) 20102010 136,28136,289 9 20102010 34,2534,257 7 20142014 UK TURN UK TURNOVEROV: ER: UK TURNOUK TURNOVER:VER: 20142014 EUROPE EUROPE TURN TURNOVEROV: ER: EUROPEEUROPE TURNO TURNOVER:VER: REGION % SHARE 2011YEAR2011 (£M)154,10154,7 107 REGION % SHARE15% 15% 2011YEAR2011 (£M4 0,CL0684O0,068SING) PER PERPRODUCT PRODUCT GROUP GROUP (£000) (£000) YEARYEAR (£000) (£000) PER PERCOUNTR COUNTRY (£000Y (£000) ) YEARYEAR (£000) (£000) REGION % SHARE13% 13% YEAR (£M) REGION % SHARE YEAR (£M CLOSING) 58%58% 20122012 161,430161,430 66%66% 20122012 33,40933,409 FACTFAORINGCTORING 59,5059,503 3 POLANDPOLAND 6,9286,928 15% 5% 5% INVOICEINVOICE DISC DISCOUNTINGOUNTING10,26107 ,267 IRELANDIRELAND 3,5113,511 19%1219%% 12% 20132009201320094,6714,671161,03161,8 038 15% 201320092013200937831,43787431,474 9 9 71 LEASINGLEASING 5,0915,091 71 GERMANYGERMANY 2,5302,530 50 50 ,76 ,76 ,7 SPECIALISSPECIALIST/OTHERT/OTHER 17,57717,577 ,7 NETHERLANDNETHERLANDS S 2,1082,108 2014201020142010 5,8135,813159,155159,155 201420102014201024,74561824,745618 77 88,291 96,5 97 92,017 92,438 77 88,291 96,5 97 92,017 92,438 2 TURNOVER: ASIA PACIFIC (£000)2 11% 11% TURNOTOTALTOTTURNO TURNOAL VER:TURNOVERVER: VERNORTH NORTH92,43892,438 AMERICA AMERICA (£000) (£000) CZECHCZECH REPUBLICTURNO REPUBLICVER:1,90 ASIA31,903 PACIFIC (£000) 112 112 10 10 , , 10%10% 6,968 532 ‘09 ‘09‘10 ‘11‘10 ‘12‘11 ‘13‘12 ‘13‘14 ‘14 SLOVSLAKIAOVAKIA 731 731 2011 2011 6,968 60%60% 20112011 532

10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC

10 12,539 15,958 16,608 18, 18,420 ASIA PACIFIC ASIA PACIFIC 2014 NORTH2014 NORTH AMERICA AMERICA TURNO TURNOVER: VER:NORTHNORTH AMERICA AMERICA 2014SWEDEN SW2014ASIAEDEN AS PAIACIFIC PACIFIC TURNO TURNOVER:70VER:8 708ASIAA PASIACIFIC PACIFIC 60%60% PER COUNTRY/GROUP (£000) TURNOVER: YEAR (£000) PER COUNTRY (£000) TURNOVER: YEAR (£000) PER COUNTRY/GROUP (£000) TURNOVER: YEAR (£000) PER COUNTRY (£000) TURNO‘09 ‘09‘10VER:‘11‘10 YEAR‘12‘11 ‘13‘12(£000)‘13‘14 ‘14 NORTHNORTH AMERICA AMERICA 20122012 7,6637,663 NORTHNORTH AMERICA AMERICA14%14% 20122012 557557 TOTALTOT TURNOAL TURNOVERVER 18,42018,420 11% 11% USA 11,362 AUSTRALIA/ 25,031 EUROPEEUROPE EUROPEEUROPE USA 11,362 AUSTRALIA/ 25,031 20132013 8,1208,120 20132013 601 601 CANADCANADA A 5,2405,240 NEWNEW ZEALAND ZEALAND UK UK UK UK TRANSPORTATION 4,444 HONG KONG 929 2014 8,338 2014 660 TRANSPORTATION 4,444 1 HONG KONG 929 2014 8,338 2014 660 1 8 8

SINGAPORE 851 13 006 72 046 154

SINGAPORE 851 13 006 72

TOTAL TURNOVER 21,046 046 TOTAL TURNOVER 21,046 154 ASIA PACIFIC ASIA PACIFIC ,251 ,7 ASIA PACIFIC ASIA PACIFIC 110 ,251 INDIA 441 ,7 110

16, 18, 18,643 21, 23,206 21, INDIA 441 16, 18, 18,643 21, 23,206 21, 27 11, 16 ,73 22,935 25,899 27 27 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 TOTAL TURNOVER 27,251 11, 16 ,73 22,935 25,899 27 NORTHNORTH AMERICA AMERICA NORTHNORTH AMERICA AMERICA ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 TOTAL TURNOVER 27,251 ‘09 ‘10‘09 ‘11‘10 ‘12‘11 ‘13‘12 ‘14‘13 ‘14 20142014 DEBTS DEBTS FACTORED FACTORED 20142014 CLIENT CLIENT ADVANCES ADVANCES EUROPEEUROPE EUROPEEUROPE REGIONUKREGIONUK % SHARE % SHARE YEARYEAR (£M) (£M) REGIONUKREGIONUK % SHARE % SHARE YEARYEAR (£M (£M CLO CLSING)OSING) BFSBFS KEY KEY PERFORMANCE PERFORMANCE INDICATORS INDICATORS 19% 19% 200920094,6714,671 15% 15% 20092009378 378

20102010 5,8135,813 20102010 456 456 TURNORETURNTURNOVER: ONVER: NORTH NORTH AMERICA AMERICA (£000) (£000) CASHCASH TURNO TURNOVER:VER: ASIA ASIA PA CIFICPACIFIC (£000) (£000) 11% 11% RETURN ON 10%10% FUNDING GENERATION CLIENT ADVANCES NUMBER OF 2011 2011 NUMBE6,9686,968R OF 60%60% 2011 2011 532 532 SHAREHOL2014SHAREHOL2014 NORTH NORTH DERSAMERICA AMERICADERS TURNO TURNOVER:VER:FUNDINNORTHNORTH AMERICAG AMERICA GENERA20142014 ASIA ASTI PAIAONCIFIC PACIFIC TURNO TURNOVER:VER:CLIEASIAANT PASIACIFIC ADPACIFIC VA NCES NUMBE60%60%R OF NUMBER OF GRGROSSOSS COCOST STIN COINCOMEME FUNDPERFUND PERCSOUNTR (£ COUNTR00S (£Y/0)GROUP00Y/0)GROUP (£000) (£000) CATURNOPACATURNOVER:CIPATYVER: CIYEAR (£TY YEARM) (£000) (£ (£000)M) (£PER000(£ PERC000OUNTR) COUNTR) Y (£000Y (£000) ) %TURNO OF%TURNO OFASSIGNEDVER: ASSIGNEDVER: YEAR YEAR (£000) DEBT (£000) DEBT CLIECLIENTSNTS 20122012DEBTDEBTOR7ORS,66 (U37S,66 K(U 3000’SK 000’S) ) MARMARGINGI %N %14%14% 2012RA2012RATIOTIO557 557 11% 11% USAUSA 11,36211,362 AUSTAURALIA/STRALIA/ 25,0325,1 031 ‘10 ‘10 ‘10 ‘10 ‘10 20132013 ‘10 8,1208,120 ‘10 20132013‘10 601 601 ‘10CANADCANADA A 5,2405,240 ‘10 ‘10NEWNEW ZEALAND ZEALAND ‘10 ‘10 ‘10 ‘10 ‘10 TRANSPORTRANSPORTATIOTANTION 4,4444,444 HONGHONG KONG KONG 929 929 20142014 8,3388,338 20142014 660 660 1 ‘11 ‘11 1 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 8 ‘11 ‘11 ‘11 ‘11 8 ‘11 ‘11 ‘11 ‘11 13 SINGAPORESINGAPORE 851 851 13 006 006 72 72 046 046 154 TOTALTOT TURNOAL TURNOVERVER 21,04621,046 154 ASIAA PASIACIFIC PACIFIC ASIAA PASIACIFIC PACIFIC ,251 ,7 ,251 ,7 110 INDIAINDIA 441 441 110 16, 18, 18,643 21, 23,206 21, ‘12 ‘1216, 18, 18,643 21, 23,206 21, ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 27 11, 16 ,73 22,935 25,899 27 27 ‘12 ‘12 ‘12 ‘12 11, 16 ,73 22,935 25,899 27 ‘12 NORTHNORTH AMERICA AMERICA ‘12 ‘12NORTHNORTH AMERICA AMERICA ‘12 ‘09 ‘09‘10 ‘11‘10 ‘12‘11 ‘13‘12 ‘13‘14 ‘14 TOTALTOT TURNOAL TURNOVERVER 27,25271 ,251 ‘09 ‘09‘10 ‘11‘10 ‘12‘11 ‘13‘12 ‘13‘14 ‘14 EUROPEEUROPE EUROPEEUROPE ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 UK UK UK UK BFS‘14 BFS‘14 KEY KEY PERFORMANCE PERFORMANCE‘14 ‘14 INDICATORS INDICATORS‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 METHODMETHOD OF CAL OFCULA CALCULATIONTION METHODMETHOD OF CAL OFCULA CALCULATIONTION METHODMETHOD OF CAL OFCULA CALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CALOF CALCULACULATIONTION METHODMETHOD OF CALOF CALCULACULATIONTION ProfitPr forofit the for finanical the finanical year (afyearte r(af ter Total Toextalternal ext ernalfunding funding capacity capacity, , ######## ClosingClosing client client adva adncesva nc(tresade (trade ### ### ###### ProfitPr forofit the for financialthe financial year y onear on OperOperatingating costs, co dividests, divided d tax andtax minority and minority interest) inter dividedest) divided in GBPin (M),GBP at (M), the at r espectivthe respective yeare year debtorsdebt - orstrade - tr cradeedit crorsedit) ors) ordinaryordinary activities activities befor before taxeation. taxation. by turnby turnover.over. by theby opening the opening shareholders shareholders funds. funds.and daandte. date. CASHCASH divideddivided by tr adeby tr debtade ors.debtors. Add Adbackd back oper operatingating costs. co Dividests. Divide RETURNRETURN ON ON by debts factored. FUNDINFUNDING G GENERAGENERATIONTION CLIECLIENT NTAD VAADNCESVANCES11 NUMBENUMBER OFR OF NUMBENUMBER OFR OF GRby debtsOSSGROSS fact or ed. COSTRASSTCOTRATEGIC STINTEGIC COOBJECTIVE IN OBJECTIVEMECO ME SSHAREHOLTRASHAREHOLTEGICSTRATEGIC OBJECTIVEDERS OBJECTIVEDERS STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE ProfitPr forofit thefor finanicalthe finanical year ye ar FUNDFUNDProfitS (£forS00 the(£0) 00finanical0) year (after CAPAPrCAofitCIPA forTYCI the TY(£ finanicalM) (£M) year (after (£000(£Profit000) for )the finanical year (after % OFPr%ofit OFASSIGNED for ASSIGNEDthe finanical DEBT year DEBT (after CLIECLIEPrNTofit forSNT theS finanical year (after DEBTDEBTProfitOR forORS the (US finanicalK (U 000’SK 000’Syear) (after) MARSTRASMARTEGICTRAGITEGICNGI OBJECTIVE%N OBJECTIVE % RATIRAOTIO Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after Profit for the finanical year (after (after(aft taxer andtax andminority minority inter intest)er est) tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided Profit for the finanical year (after tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided tax and minority interest) divided Profit for the finanical year (after divideddivided by the by openingthe opening by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. by the opening shareholders funds. tax and minority interest) divided by‘10 the ‘10opening shareholders funds. by‘10 the ‘10opening shareholders funds. by‘10 the‘10 opening shareholders funds. by‘10 the ‘10opening shareholders funds. by‘10 the‘10 opening shareholders funds. by‘10 the‘10 opening shareholders funds. tax‘10 and‘10 minority interest) divided shar‘10 shareholders‘10eholders funds. funds. by theby openingthe opening shar shareholderseholders funds. funds. ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11 ‘11

‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12 ‘12

‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13 ‘13

‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14 ‘14

METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION METHODMETHOD OF CAL OF CULACALCULATIONTION ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter TotalTo extalternal external funding funding capacity capacity, , ######## ClosingClosing client client adva adncvaes nc(tresade (trade ### ### ### ### ProfitPr forofit the for financial the financial year yonear on OperOperatingating costs, co dividests, divided d tax andtax minorityand minority inter est)inter dividedest) divided in GBPin GBP(M), (M),at the at r theespectiv respective yeare year debtdebtors - orstrade - tr cradeedit crorsedit) ors) ordinaryordinary activities activities befor before taxeation. taxation. by turnby oveturnr.over. by theby opening the opening shar eholdersshareholders funds. funds.and daandte .date. divideddivided by tr byade tr debtade debtors. ors. Add Adbackd back oper operatingating costs. co Dividests. Divide by debtsby debts factor facted.ored. STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE ProfitPr forofit the for finanical the finanical year year STRASTEGICTRATEGIC OBJECTIVE OBJECTIVE ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter ProfitPr forofit the for finanical the finanical year ye(afarte (afr ter ProfitPr forofit the for finanical the finanical year ye(aftarer (aft er (after(aft taxer and tax minorityand minority inter est)inter est) tax andtax minorityand minority inter est)inter dividedest) divided tax andtax minorityand minority inter est)inter dividedest) divided tax andtax minorityand minority inter est)inter dividedest) divided tax andtax minorityand minority inter est)inter dividedest) divided tax andtax minorityand minority inter est)inter dividedest) divided tax andtax minorityand minority inter est)inter dividedest) divided ProfitPr forofit the for finanical the finanical year y(afearte (afr ter divideddivided by the by opening the opening by theby opening the opening shar eholdersshareholders funds. funds.by theby opening the opening shar eholdersshareholders funds. funds.by theby opening the opening shar eholdersshareholders funds. funds.by theby opening the opening shar eholdersshareholders funds. funds. by theby opening the opening shar eholdersshareholders funds. funds. by theby opening the opening shar eholdersshareholders funds. funds.tax andtax minorityand minority inter est)inter dividedest) divided shareholdersshareholders funds. funds. by theby opening the opening shar eholdersshareholders funds. funds. Strategic Report

KEY PERFORMANCE INDICATORS

RETURNRETURN ONRETURN SHAREHOL ON SHAREHOL ONDERS SHAREHOL DERS DERSFUNDIN FUNDING FUNDING G CASHCASH GENERACASH GENERATI ONGENERATION TION CAPACACITYPA (£CACIM)TYPA (£CIM)TY (£M) FUNDSFUND SFUND S FUNDINFUNDING FUNDING G CASH(£000)CASH (£GENERA000) (£CASHGENERA00TI0)ON GENERATION TION RETURNRETURN ON RETURNSHAREHOL ON SHAREHOL ONDERS SHAREHOL DERS DERSFUNDIN FUNDING FUNDING G CASHCASH GENERACASH GENERATION GENERATION TION FUND2010 SFUND 2010 SFUND 2010 S 24% 24CA2010% PA24CACI%2010TYPA (£CICA2010M)TYPA (£(£CIM)TY 59 (£(£03M) 59035903(£2010000)(£(£2010000)(£2010000) 7,873 7,873 7,873

20102011 20102011 20112010 22%24% 22%24%2010201122%242010%2011 20112010 5903611 5903611 596103120102011 20102011 20112010 36,397,8713 36,397,8713 36,397,871 3 2010 2010 2010 24% 242010% 242010% 2010 5903590359032010 2010 2010 7,873 7,873 7,873 20112012 20112012 20122011 17% 1722%% 1722%% 2011201222% 20112012 20122011 611 736101 73610120112012730 2011201216,2282012201116,228 16,228 36,391 36,391 36,391 2011 2011 2011 22% 22% 201122% 2011 2011 611 611 6112011 2011 2011 36,391 36,391 36,391 2012 2012 2012 17% 17% 17% 2012 2012 2012 730 730 2012730 201216,228201216,228 16,228 20122013 20122013 20132012 14% 17%14% 1714%% 17% 20122013 20122013 20132012 737109 737190 20122013717390 2012201316,22818,882013201216,2287 18,8816,2287 18,887 2013 2013 2013 14% 14% 14% 2013 2013 2013 719 719 2013719 2013 18,8820137 18,887 18,887 20132014 20132014 201411%2013 14%11% 14%11% 14% 20132014 20132014 20142013 719769 71976201320149 7194,62376201392014 4,62318,882014201374,62314,31518,887 in14,315ve18,88sted7 in14,315vested invested

2014 2014 11%2014 11% 11% METHOD2014 METHOD2014 OF CALMETHOD CULA2014OF CALTION CULAOF CALTIONCULATION769 76METHOD20149 4,62376METHOD2014 9OF CAL4,623METHOD 2014CULAOF CALTION4,62314,315 CULAOF CAL inTION14,315veCULAsted inTIONve14,315sted invested METHOD2014 METHOD2014 OF CALMETHOD11% 2014CULAOF CALTION11% CULAOF CALTIONCULA11% TION 2014 2014 2014 769 7620149 4,6237620149 4,6232014 4,62314,315 in14,315vested in14,315vested invested Profit forPr theofit finanical forPr theofit finanicalyforear the (aft finanical yerear tax (aft and yerear tax (aft ander taxT andotal extTernalotal exfundingtTernalotal excapacityfundingternal fundingcapacity, in GBP capacity,(M), in GBP ,(M), in GBP PB (M),T, add PB backT, add deprPB backT,eciation, add depr backeciation, amortisation, depreciation, amortisation, amortisation, METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODminorityMETHODminority intOFer CALest)minority METHODint CULAdividedOFer CALest)TION int CULAbydividedOFer the est)CALTION opening byCULAdivided theTION opening by the opening METHODat the respectivMETHODat OF the CAL respectiveatMETHOD yCULA OF earthe CAL end rTIONespective yCULA OFdaearte CALend.TIONe y CULAeardate end.TION date. METHODmovementMETHODmo OF inv ement CALaccruals,andmoMETHODCULA OF invement CALacTIONcruals,andCULA OFminority in acCALTIONcruals,and CULAminority intereTIONst .minority interest. interest. Prsharofiteholders forPrshar theofit eholders finanical funds.forPrshar theofit eholders finanicalfunds.y forear the (aft funds.finanicalyerear tax (aft and eryear tax (aft ander taxT otaland extTernalotal exfundingternalTotal fundingexcapacityternal capacity,funding in GBP ,(M),capacity in GBP (M),, in GBP PBDeduct T,(M), add PBtaDeduct backxaT,tion add depr taDeductPB pabackxaeciation,yment,T,tion add depr tapa back xaadjusteciation,yment, amortisation,tion depr pafor adjustyment, eciation, amortisation,spend/ for adjust amortisation,spend/ for spend/ Profit forPr theofit finanical forPr theofit finanicaly forear the(aft finanicaleryear tax (aft and eryear tax (aft ander taxT otaland extTernalotal exfundingtTernalotal capacityexfundingternal ,capacityfunding in GBP (M),,capacity in GBP (M),, in GBP PB T,(M), add PB backT, add deprPB backeciation,T, add depr back eciation,amortisation, depr eciation,amortisation, amortisation, minorityminority interest) minorityint dividederest) intbydivideder theest) opening by divided the opening by the openingat the respectivat the respective atyear the end reespectiv y daearte end. e y daearte end. date. moprocvementeedsmopr re ocinvlatingement eedsaccruals,andmopr tore ocinv latingassets.ement eedsaccruals,and minorityreto inThlating assets. acis cruals,andmeasur minorityto in Th teassets.isree stmeasur . minorityin Thteisree measurst . interee st. minority minorityinterest) minority intdividederest) byintdivided ertheest) opening bydivided the opening by the openingatSTRA the TEGIC respectivatSTRA the OBJECTIVETEGIC reespectiv SatyTRAear the OBJECTIVE endTEGIC reespectiv y daear teOBJECTIVE end. e y daearte end. date. movementmo invement accruals,andmo invement accruals,and minority in accruals,and minorityinterest . minorityinterest. interest. sharSTRAeholdersTEGICsharSTRA eholdersOBJECTIVE funds.TEGICSsharTRA eholdersOBJECTIVEfunds.TEGIC OBJECTIVE funds. Deductdiffers frtaDeductdiffersomxa tionthat fr ta paDeductdiffersomofxayment, the tionthat statutfr tapa omof adjustxayment, the tionthatory statut forcashflopaof adjust yment, thespend/ory statutw. forcashflo adjust spend/oryw. cashflofor spend/w. shareholdersshareholders funds.shareholders funds. funds. To ensurToe the ensur extToeernal the ensur exfundingteernal the exisfunding tinernal plac fundingise, in plac ise, in placDeducte, taDeductxation tapaDeductxayment,tion tapa adjustxayment,tion forpa adjust yment,spend/ for adjust spend/ for spend/ To generToate gener consistentToate gener consistent longate termconsistent long returns term long to re turns term tore turns to proceedspr reoclatingeedspr toreoclating assets.eeds tore Th latingassets.is measur to Th assets.ise measur Thise measure StoTRA facilitaTEGICStoTRAte f acilitacurrOBJECTIVETEGICentStoteTRA f andacilitacurrOBJECTIVETEGIC longentte and currOBJECTIVEterm entlong and term long term proceedspr reoclatingeedspr toreoc latingassets.eeds tore Th latingassets.is measur to Th assets.ise measur Thise measure SourTRA sharTEGICSeholders.ourTRA OBJECTIVEsharTEGICeholders.SourTRA OBJECTIVEsharTEGICeholders. OBJECTIVE STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE differs frdiffersom that fr omdiffersof the that statutfr ofom the thatory statut cashflo of theory statutw. cashflooryw. cashflow. STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE Toliquidity ensurTo eliquidityr equirthe ensur exements.te Toliquidityernalr equirthe ensur exfundingements.t eernalrequir the fundingexisements. internal plac isfundinge, in plac ise, in placdiffersSTRAe, TEGIC fromdiffersSTRA thatOBJECTIVTEGIC fr SofomdiffersTRA the thatOBJECTIVTEGIC statut Efr ofom the oryOBJECTIVthat Estatut cashflo of theory Ew.statut cashflooryw. cashflow. To generToate gener consistentToate gener consistent longate term consistent long returns term long to re turns term to re turnsTo ensur to eTo the ensur exteToernal the ensur exfundingteernal the isexfunding internal plac ise,funding in plac ise, in place, To generToate gener consistentToate gener consistent longate term consistent long returns term long to re turns term to re turnsto facilita to tote f acilitacurrenttote fandcurracilita entlongte and currterm longent and term long term To ensurToe that ensur theToe thatbusiness ensur thee thatbusiness is gener the business atingis gener atingis gener ating our shareholders.our shareholders.our shareholders. to facilitatote f curracilitaenttote andf curracilita longentte and currterm longent and term long term STRATEGICSTRA OBJECTIVTEGICSTRA OBJECTIVTEGICE OBJECTIVE E our shareholders.our shareholders.our shareholders. liquidity liquidityrequirements. liquidityrequirements. requirements. SenoughTRATEGIC ScashenoughTRA OBJECTIV toTEGIC effectivenoughcashSTRA OBJECTIV toTEGICEely effectivcash fund OBJECTIV toE ely oreffectivganic fund Eelygrorowganic fundth, grorowganicth, growth, liquidity liquidityrequirements. liquidityrequirements. requirements. Toand ensur inveToeandstments. that ensur in vetheeandTostments. thatbusiness ensur in vethestments.e businessthat is gener the businessatingis gener ating is gener ating To ensureTo that ensur theeTo businessthat ensur thee business thatis gener the atingbusiness is gener ating is gener ating enough cashenough to effectivcashenough toely effectiv cash fund to elyor effectivganic fund grelyorowganic fundth, grorowganicth, growth, enough cashenough to effectiv cashenough toely effectiv cash fund to elyor effectivganic fund grelyorowganic fundth, grorowganicth, growth, and inveandstments. investments.and investments. and investments.and investments.and investments.

CLIENTCLIE ADNTVACLIE ADNCESNTVA AD NCESVANCES NUMBENUMBER OFNUMBER OF R OF NUMBENUMBER OFNUMBE R OF R OF (% OF(% ASSIGNED OF(% ASSIGNED OF ASSIGNEDDEBT DE) BT DE) BT)CLIENTCLIES NTCLIES NTS DEBTORDEBTS (UDEORK)BTS (UORK)S (UK) CLIENTCLIE ADNTVACLIE ADNCESNTVA ADNCES VA NCES NUMBENUMBER OFNUMBER OF R OF NUMBENUMBER OFNUMBE R OF R OF CLIENTCLIES NTCLIES NTS DEBTDEORBTS (UORDEK)SBT (UORK)S (UK) (%2010 OF(%(% ASSIGNED2010 OF(% ASSIGNED2010 OF ASSIGNEDDEBT DE) 53BT% )DE) 53BT% )CLIE201053%NTCLIE2010S NTCLIE2010S NTS 8,895 8,895DE2010BT8,895ORDE2010BTS (UORDE2010K)BTS (UORK)S (UK)100,040100,040100,040

20102011 20102011 20112010 5353%% 5353%% 2010201153% 20102011 20112010 8,548,8951 8,548,8951201020118,548,895120102011 20112010 1098,0,0401751098,0,040175 1098,0,170405 2010 2010 2010 53% 53% 201053% 2010 2010 8,895 8,89520108,8952010 2010 100,040100,040100,040 20112012 20112012 20122011 5355%% 5355%% 201120125355%% 20112012 20122011 8,548,9631 8,548,9631 201120128,548,963120112012 20122011 1098,0,1767501098,0,17675 01098,0,176750 2011 2011 2011 53% 53% 201153% 2011 2011 8,541 8,54120118,5412011 2011 98,175 98,175 98,175 2012 2012 2012 55% 55% 2012201355% 20122013 20132012 8,963 8,963201220138,96320122013 20132012 100,670100,670 100,670 20122013 20122013 20132012 55%55% 55% 201255% 2012 2012 8,9638,986 8,9638,98620128,9868,9632012 2012 92,916100,6792,9160100,6792,9160100,670

2013 2013 2013 55% 55% 2013201455% 20132014 20142013 8,986 8,986201320148,98620132014 20142013 82,06592,91682,06592,91682,06592,916 20132014 20132014 20142013 55%57% 55%572013% 55%572013% 2013 8,9868,937 8,9868,9320137 8,938,98620137 2013 92,916 92,916 92,916

METHOD2014 METHOD2014 OF CALMETHOD CUL2014OF CALATIO CULOFN CALATIOCULN ATIO57N% 57METHOD%2014 57METHOD2014% OF CALMETHOD2014 CULAOF CALTION CULAOF CALTIONCULATION8,937 8,93METHOD720148,93METHOD2014 7OF CALMETHOD 2014CULAOF CALTION CULAOF CAL82,TION065CULA82,TION065 82,065 2014 2014 2014 57% 572014% 572014% 2014 8,937 8,9320147 8,9320147 2014 82,065 82,065 82,065 Closing clientClosing adv clientClosingances adv (trclientancadees advdebt (trancadeorses debt- (tradeors debt- orsThe - closingThe number closingThe numberofclosing clients. numberof clients. of clients. The closingThe number closingThe numberofclosing debtors numberof debt(UK only).ors of debt(UK orsonly). (UK only). METHODMETHOD OF CALMETHOD CULOF CALATIOCUL OFN ATCALIOCULN ATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODtrade crediMETHODtr OFadeto rsCAL cr) edidividedtrMETHODCUL OFadeto rsATCAL cr) byediIOdividedCUL OFN totraders ATCAL) by dividedIOdebtCUL Ntradeors.AT by IOdebt Ntradeors. debtMETHODors. METHOD OF CALMETHODCULA OF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHODCULA OF CALTIONCULA OF CALTIONCULATION Closing clientClosing adv clientClosingances adv (tr clientancadees debtadv (trancadeorses debt- (tradeors -debt orsThe - closingThe numberclosingThe numberof closing clients. ofnumber clients. of clients. The closingThe numberclosingThe numberof closing debtors ofnumber debt(UK only).ors of (UKdebt only).ors (UK only). Closing clientClosing adv clientClosingances adv (tr clientancadees debtadv (trancadeorses -debt (tradeors -debt orsTSheTRA - closing TEGICTSheTRA number OBJECTIVEclosingTEGICSTTRAhe ofnumber OBJECTIVEclosingTEGIC clients. ofnumberOBJECTIVE clients. of clients. TSheTRA closingTEGICTSheTRA number OBJECTIVEclosingTEGICSTTRAhe of numberOBJECTIVEclosingTEGIC debtors ofnumberOBJECTIVE (UKdebt only).ors of (UKdebt only).ors (UK only). trade creditradetors cr) edidividedtradetors cr) bydividededi trtoaders) bydivideddebt tradeors. bydebt tradeors. debtors. trSadeTRA TEGICcreditrSTRAadeto OBJECTIVErs TEGICcr) dividedediStrTRAadeto OBJECTIVErsTEGIC cr) bydividededi trto adeOBJECTIVErs) bydebtdivided tradeors. bydebt tradeors. debtToors. grow Toour gr clientow Toour base, gr clientow and our base, therclient andefor base, ether gener andeforate ether gener eforateToe gener div ersifyateTo div theersify crToedit div the riskersify cr editin theour risk crportfolio editin our risk portfolio. in our portfolio. . STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE To advancToe adv againstancToe adv asagainst muchance as againstof muchthe clients as of much the clients of the clientsSgrTRAeatTEGICer rSgreturns,TRAeat OBJECTIVEerTEGIC andrgrSeturns,TRAeat divOBJECTIVEerTEGICersify randeturns, div OBJECTIVErisk.ersify and div risk.ersify risk. STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE SassignedTRATEGICSassigned TRAdebt OBJECTIVETEGIC asassignedS prudent,debtTRA OBJECTIVETEGIC as prudent,debt to OBJECTIVEmeet as prudent, toour meet clients toour meet clients ourTo grclientsow Toour gr clientow Toour base, gr clientow and our base, ther client andefor base, ether gener eforandatee ther gener eforateToe gener diversifyToate div theersify crToedit divthe riskersify cr editin ourthe risk crportfolio inedit our risk portfolio. in our .portfolio. STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE To grow Toour gr clientow Toour base, gr clientow and our base, ther client eforand base, ether gener eforandate ether gener eforToatee generdiv ersifyToate div theersify crToedit divthe riskersify cr editin ourthe risk portfoliocr editin our risk portfolio. in our portfolio. . Toneeds adv ancforToneeds eadv adv againstanc ancforneedsToes. eadv asadvagainst ancmuch forances. adve as ofagainst anc muchthees. clients asof muchthe clients of the clientsgreater rgreturns,eater andreturns,great diverersify andreturns, div risk.ersify and divrisk.ersify risk. To advancToe advagainstancToe as advagainst muchance as ofagainst muchthe clients asof muchthe clients of the clientsgreater rgreturns,eater andrgreturns,eat diverersify andreturns, divrisk.ersify and divrisk.ersify risk. assignedassigned debt asassigned prudent,debt as prudent, debtto meet as prudent, toour meet clients ourto meet clients our clients assignedassigned debt as assigned prudent,debt as prudent,debtto meet as prudent,ourto meet clients ourto meet clients our clients needs forneeds advanc forneedses. advanc fores. advances. needs forneeds advanc forneedses. advanc fores. advances.

GROSSGR OSSGR OSS COST COINCOSTCO MEINCOST MEINCO ME BAD DEBADBT DEBADBT DEBT MARGIMARN %GIMARN %GIN % RATIORATIORATIO (% OF(% CL OFIE(%NT CL OFADIENT VACL ADIENCESNTVA AD)NCESVANCES) ) GROSSGR OSSGR OSS COSTCO INCOST COMEININCOST ME ININCO ME BAD DEBADBT DEBADBT DEBT MARGIMARN %GIMARN %GIN % MAR2010GIMAR2010N %GIMAR2010N %GIN % 2.19% 2.19%RA2010TI2.O19%RA2010TIORA2010TIO 68% 68% (%201068 OF% (%(% 2010CL OFIE(%NT 2010CLCL OFADIEIENT VACLCL ADNCESIEIENTVA ADNCES) 2.36%VA))NCES2.36%) 2.36%

20102011 20102011 20112010 1.98%2.19%1.98%2.19%1.98%201020112.19%20102011 20112010 63%68% 63%68% 6320102011%68% 20102011 1.08%20112010 1.08% 1.08% 2.36% 2.36% 2.36% 2010 2010 2010 2.19% 2.19%20102.19%2010 2010 68% 68% 201068% 2010 2010 2.36% 2.36% 2.36% 20112012 20112012 20122011 1.89%1.98% 1.89%1.98% 1.89%1.98%20112012 20112012 20122011 63%69%63%69%6320112012%69% 20112012 1.08%20122011 1.08% 1.08% 2011 2011 2011 1.98% 1.98% 1.98%2011 2011 2011 63% 63% 632011% 2011 1.08%2011 1.08%1.59%1.08%1.59% 1.59% 20122013 20122013 20132012 1.781.89%% 1.781.89%% 1.781.89%%2012 2012 2012 69% 69% 201269% 2012 2012 1.59% 1.59% 1.59% 2012 2012 2012 1.89% 1.89% 1.89%20122013 20122013 20132012 6970%% 6970%% 201220136970%% 20122013 20132012 1.551.59%% 1.551.59%% 1.551.59%% 20132014 20132014 20142013 1.78% 1.78% 1.78%2013 2013 2013 70% 70% 201370% 2013 2013 1.55% 1.55% 1.55% 2013 2013 2013 1.69%1.78% 1.69%1.78% 1.69%1.78%20132014 20132014 20142013 70%73% 70%7320132014% 7073% 20132014% 201420131.30%1.551.30% %1.551.30% %1.55%

METHOD2014 METHOD 2014OF CALMETHOD CULA2014OF CALTION CULAOF CAL1.69%TIONCULA1.69%TION 1.69%METHOD2014 METHOD2014 OF CALMETHOD CULA2014OF CALTION CULAOF CALTIONCULATION73% 73METHOD2014% 73METHOD2014 %OF CALMETHOD CULA2014OF1.30 CALTION% CULAOF1.30 CALTION%CULA1.30TION% 2014 2014 2014 1.69% 1.69% 1.69% 2014 2014 2014 73% 732014% 732014% 20141.30% 1.30% 1.30% Profit forPr theofit financial forPr theofit financial yforear the on financialoryeardinary on or yactivitieseardinary on or activities dinaryOper activities atingOper costs, ating Operdivided costs,ating bydivided costs, turnov bydivideder .turnov byer turn. overBad. debtBad char debtgeBad for char thedebtge y for earchar ,the dividedge y forear ,the divided year, divided METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODMETHOD OF CALMETHOD CULAOF CALTIONCULA OF CALTIONCULATION METHODbefore taMETHODbefor xaOFtion. CALe ta AbeforMETHODCULA xaddOFtion. backCALe TIONta AxaCULA ddOFopertion. back CALatingTION A ddCULAoper costs. backatingTION oper costs.ating METHOD costs. METHOD OF CALMETHODCULA OF CALTIONCULA OF CALTIONCULATION METHODby clientMETHODby advOF client ancCALesbyMETHOD CULA advOF. client ancCALTIONes advCULA OF. anc CALTIONesCULA. TION PrDivideofit for byPrDivide the ofitdebts financial for by fDividePr actthe debtsofitor financial y ed.for earby fact the debtsonor financialoryed.eardinary fact onor ored.yactivitieseardinary on oractivities dinaryOper activities atingOper costs, ating Operdivided costs,ating bydivided costs, turnov bydivideder turn. ov byer .turnoverBad. debtBad char debtge Badfor char the debtge y forear char ,the dividedge y earfor, thedivided year, divided Profit forPr theofit financial forPr theofit financialy forear the on orfinancialyeardinary on oractivitiesyeardinary on oractivities dinaryOperSTRA activities atingTEGICOperSTRA costs, OBJECTIVatingTEGIC SdividedOperTRA costs, OBJECTIVatingTEGICE bydivided costs,turn OBJECTIVEov bydivideder .turnEov byer .turnoverBad. debtBad char debtge Badfor char the debtge y earfor char , thedividedge y earfor , thedivided year, divided before tabeforxation.e ta Abeforxaddtion. backe taAxa ddopertion. backating A ddoper costs. backating oper costs.ating costs. by clientby adv clientances byadv. clientances adv. ances. before tabeforxation.e ta Abeforxaddtion. backe ta A xaddopertion. backating A ddoper costs. backating oper costs.ating To costs. oper ateTo operefficientlyateTo operefficiently. ate efficiently. . bySTRA clientTEGICby SadvTRA client ancOBJECTIVTEGICesSby advTRA. client OBJECTIVancTEGICEes adv. OBJECTIVancE es. E DivideSTRATEGIC byDivideS TRAdebts OBJECTIVETEGIC by fDivideSact TRAdebtsor OBJECTIVEed.TEGIC by fact debtsor OBJECTIVEed. factored. STRATEGICSTRA OBJECTIVTEGICSTRA OBJECTIVTEGICE OBJECTIVE E Divide byDivide debts by factDivide debtsored. by fact debtsored. factored. STRATEGICSTRA OBJECTIVTEGICSTRA OBJECTIVTEGICE OBJECTIVE E To fund ourTo fund clients ourTo safelyfund clients our. safely clients. safely. To earn sufficientTo earn sufficientTo inc earnome sufficient toinc meetome totheinc meetome risks tothe meet risks the To risks oper ateTo operefficientlyateTo efficientlyoper. ate efficiently. . STRATEGICSTRA OBJECTIVTEGICSTRA OBJECTIVTEGICE OBJECTIVE E To operateTo efficientlyoperateTo efficientlyoper. ate efficiently. . STRATEGICSTRA OBJECTIVTEGICSTRA OBJECTIVTEGICE OBJECTIVE E SweTRA taTEGICke.SweTRA taOBJECTIVETEGICke.SweTRA taOBJECTIVETEGICke. OBJECTIVE To fund ourTo fund clients ourTo safely fundclients .our safely clients. safely. STRATEGICSTRA OBJECTIVETEGICSTRA OBJECTIVETEGIC OBJECTIVE To fund ourTo fundclients ourTo safely fundclients .our safely clients. safely. To earn sufficientTo earn sufficientTo inc earnome sufficient toinc meetome to theinc meet omerisks the to meet risks the risks To earn sufficientTo earn sufficientTo inc earnome sufficient to inc meetome theto inc meet omerisks theto meet risks the risks we take.we take. we take. we take. we take. we take.

12 OUR STRATEGY IS FOCUSED ON GROWTH

13 Strategy & Operations

BUSINESS REVIEW

BFS operates in 16 countries focusing on the supply of invoice finance and other working capital solutions to the SME sector.

WHAT DO WE DO? MARKET CONDITIONS Bibby Financial Services Limited Trading conditions remain 2014 CONTINUED TO (BFS) is a wholly owned subsidiary extremely challenging in all SEE THE COMPETITIVE of Bibby Line Group Limited and our markets and this continues MIX CHANGE WITH NEW acts as the holding company for to impact the growth of our ONLINE FINANCING Bibby Line Group’s Financial businesses. Economic uncertainty PLATFORMS Services Division. BFS provides continues to deliver a cautious SME INCREASING THEIR financial services to clients in 16 sector which is increasingly holding SHARE AND THEIR countries in Europe, North America larger cash reserves and refraining AWARENESS and Asia Pacific. The legal entities from borrowing money to grow its AMONGST SMEs. providing these services are businesses. In addition to this the referred to as the “Group” in these competitive landscape remains financial statements. Financial tough with new market entrants COMMERCIAL RISKS Services includes Factoring, Invoice fighting for share. 2014 continued AND UNCERTAINTIES Discounting, Trade Finance to see the competitive mix change Competitive pressure in and Asset Finance. with new online financing platforms international markets is a continuing increasing their share and risk for the Group. To manage this HOW ARE WE awareness amongst SMEs creating risk, the Group strives to provide ORGANISED? pressures on income growth and clients with a high standard of The Group manages its operations margins across the industry. service and to develop new on a regional basis, although products to satisfy their needs. within that region each operating THE GROUP HAS The Group has maintained very company has a large degree of strong liquidity and funding autonomy. The Group Directors MAINTAINED VERY STRONG LIQUIDITY relationships during the recession have presented, on pages 10 and 11, while continuing to grow, New the BFS Financial Highlights on a AND FUNDING RELATIONSHIPS. funding was agreed for the UK, regional basis. Australia and many of our European The Group continues to seek countries to support growth. investment opportunities in existing The Group’s principal activities and new business areas with a view involve taking a credit risk in respect to continue its policy of expansion. of its clients and their customers. The Group strives to maintain the This risk is managed by taking highest standards in corporate adequate security and by a series governance and bases its actions on of internal controls, both manual the principles of openness, integrity and systems-based, as described and accountability. Audit and in detail in the Risk Management Remuneration committees exist section of this report on pages within Bibby Line Group Limited, 18 to 21. which cover the activities of BFS.

14 Bibby Financial Services Limited

FINANCIAL REGULATIONS ENVIRONMENT EMPLOYEES IN OUR MARKETS AND COMMUNITIES It is the policy of the Group BFS is approved to operate in the The Group recognises the to ensure that all sections of following regulated markets: importance of its environmental the community have an equal opportunity in matters related > Our UK leasing subsidiary is responsibilities and designs and to employment. The policy of authorised by the Financial implements policies to mitigate any the Group is to give full and fair Conduct Authority (FCA) for adverse impact that might be consideration to applications for consumer credit, consumer hire caused by its activities. Initiatives employment made by disabled and debt collection business. aimed at minimising the Group’s persons. If any employee becomes > Our German subsidiary is impact on the environment disabled whilst employed by a authorised by the Bundesanstalt include recycling and reducing Group company, every effort is für Finanzdienstleistungsaufsicht energy consumption. The Group made to find suitable continuing (BaFin) for factoring business. also commits to Giving Something Back to the local communities in employment with re-training as BFS has applied to the Financial which it operates. necessary. Disabled persons Conduct Authority (UK) for The programme sees employees share equally in the opportunities authorisation as a Payment volunteering and raising funds for available for training, career Institution, which will allow it to local charitable causes which our development and promotion. operate a foreign exchange business. share holder – Bibby Line Group The Group participates in a In the UK BFS is a leading – match fund. money purchase pension scheme member of ABFA, the Asset Based operated by Bibby Line Group Finance Association, and complies Limited. The Group also makes with the code of conduct. contributions to private money Regulation is evolving, including purchase schemes. the strengthening of self-regulation The Group is committed to in our markets and one which we the continuing development of will continue to proactively lead. effective employee communication Our focus on treating clients and involvement including regular fairly remains a key criteria in publication of company magazines everything we do. and e-newsletters in addition to intranet services. It is the Group’s policy to promote the CASH INVESTMENT (£) SINCE 2012* understanding and involvement of all employees in its business aims and performance.

By order of the Board Bibby Bros. & Co. (Management) Limited 27th March 2015

*Investment in our new Aquarius operating platform, new business digital platforms and 3.6m 6.9m 14.3m 15 2012 2013 2014 core infrastructure Strategy & Operations BUSINESS STRATEGY

Despite challenging market conditions, we continue to have confidence in our ability to grow our business given the opportunities worldwide. In order to maximise the returns to our shareholders our business strategy is to be the leading SME finance company in our chosen markets, providing the fuel for growth and success to businesses around the world. Our strategy is based on three core pillars:

BEING A SETTING THE GROWING GREAT PLACE STANDARD FOR PROFITABLY TO WORK SERVICE AND VALUE

BEING A GREAT SETTING THE STANDARD PLACE TO WORK FOR SERVICE AND VALUE We were delighted to once again We measure success with reference businesses, plus Germany, Ireland be included in the Sunday Times to our Net Promoter Score. This and the Netherlands and also 100 Best Companies to work for. is very positive and demonstrates migrated our Hong Kong business Our improved position again this that our clients perceive real value to iFactor. The implementation went year, demonstrates how we are in their relationships with us. Much to plan and has bedded down well. progressing in “Being a great work has been undertaken across We continue to invest in upgrading place to work”. the business to review what and our broader IT infrastructure which Our “Giving Something Back” how we deliver funding and other will enable us to deliver major programme this year continued to services to our clients and advances as we drive forwards see some amazing efforts to raise intermediaries. Our ambition over the coming years. money or to physically support local is to provide a service which our charities that our employees have clients want and which sets us chosen. We match fund the amount apart from our competitors. our employees raise. Our own We continue to invest heavily measure of engagement sees us in the use of technology in order with high performance norms to deliver a market leading across our businesses. client experience. 2014 has seen a re-launch of our websites across INCLUDED IN THE the world. SUNDAY TIMES 100 Much more importantly, we BEST COMPANIES delivered a new operating platform TO WORK FOR 2015. – Aquarius - into most of our UK

16 Bibby Financial Services Limited

GROWING PROFITABLY We continue to grow our business We are in the process of Contract Factoring in Germany though the impact of a stronger expanding our international network and , and a variant of Invoice pound (our reporting currency) into Malaysia (via our existing Discounting in Germany. means that we are reporting business in Singapore) in order Our operational and risk teams turnover at close to £159m, a to capitalise on the international have once again turned in an comparable level with 2013 and trading opportunities that this excellent year in managing risk 2012. Despite challenging trading region presents to us. across our client portfolio with conditions; we are pleased to have We continue to maximise growth the bad debt charge in the achieved some excellent sales in our existing territories with the income statement being performances across our regions launch of a new West Midlands 1.3% of our portfolio - an with our UK and European regions Business Centre (UK), and the excellent achievement. achieving record monthly sales at recruitment of a new team in our 2014 saw the business continue times during the year. Our Leasing business, together with to review and refine our funding investment in IT will also provide the several office moves across the strategy with some important infrastructure for a scaled up world to provide capacity. Our new and extended agreements organisation. A key factor in our commitment to growing our with key partners secured during profitability is the investment in new traditional factoring and invoice the year. business digital platforms, which we discounting portfolio remains, we The Group continues to seek hope will be the bed rock of growth also continually drive refinements to investment opportunities in that will secure our future in the our products through segmentation existing and new business areas rapidly growing “fin tech” space. of small, medium and large clients with a view to continuing its policy and valuable sectors such as of expansion. construction and transportation. We have adopted a flexible WE CONTINUE TO 2014 saw the launch of Forward approach to our markets working MAXIMISE GROWTH Finance – a simple, easy to use both directly with businesses who IN OUR EXISTING service for our smaller clients in our require funding and through valued TERRITORIES WITH UK business and an Asset Based introductory sources who help us THE LAUNCH OF A Lending product in our North tailor our solutions to meet our NEW WEST MIDLANDS America region for larger clients. client’s needs. BUSINESS CENTRE The Leasing business in the UK We measure our success in (UK), AND THE has performed strongly, having achieving our strategic aims RECRUITMENT OF reset its strategy it is contributing through a wide and balanced range A NEW TEAM IN OUR substantially to the UK region. Our of performance measures. The key LEASING BUSINESS, Australia business has reached indicators include those set out on TOGETHER WITH record levels of turnover and profit. page 12 of this Annual Report, plus SEVERAL OFFICE The Europe region also focused on Employee Engagement and Net MOVES ACROSS THE maximising local opportunities with Promoter Score. WORLD TO PROVIDE the launch of Recourse Factoring in GROWTH CAPACITY. The Netherlands, Non-Recourse Factoring in Ireland,

17 Strategy & Operations RISK MANAGEMENT The acceptance of risk is an integral part of BFS’s businesses. Management of that risk is critical to BFS’s continuing profitability and strong independent prudential management has been a key to BFS’s success. Where risk is accepted it is within a calculated and controlled framework that assigns clear risk roles and responsibilities represented by ‘three lines of defence’. THREE LINES OF DEFENCE

2. Central 1. Business Operations Management Support 3. Independent Review

The primary responsibility for risk management lies at the second line of defence and independently assesses the business level, which forms the first line of defence. all material risks. The third line, which includes internal Part of the role of all business managers throughout audit, independently reviews and challenges the group’s BFS’s business units is to ensure risks are managed risk management controls, processes and systems. appropriately. The central management support forms

BFS’s core risk management principles have remained stable and continue to be highly effective.

OWNERSHIP OF RISK PREPARING FOR AT THE BUSINESS LEVEL WORST CASE OUTCOMES Business Unit Heads are responsible BFS’s risk management approach for identifying risks within their is based on examining the businesses and ensuring that they consequences of worst case are managed appropriately. outcomes and mitigating these Business ownership of risk is an such that the risk becomes essential element in understanding acceptable. This approach is and mitigating risk. adopted for all material risk types. In terms of credit risk, BFS doesn’t APPROVAL BY NON- rely on statistical and quantitative EXECUTIVE DIRECTORS techniques but deploys and AND BIBBY LINE develops on the skills of Mark Hartigan GROUP FOR ALL experienced credit professionals Global Risk Director MATERIAL DECISIONS to mitigate the risk. For all material decisions BFS requires the approval of our holding company Bibby Line Group Limited and our Non-Executive Directors who form an independent assessment of the risk.

18 Bibby Financial Services Limited

RISK TYPES

£ £

STRATEGIC OPERATIONAL CREDIT FINANCIAL

GUIDANCE GUIDANCE GUIDANCE GUIDANCE Influenced by the Concerns the day to day Core to this business and Concerns the environment in which issues that confront the is influenced by internal management and control the business operates. business as it implements and external factors of the finances of the The external and internal and executes the business impacting on client business and the effects factors which could decisions and plans risk management. of external factors such “knock the business off and responds to as availability of funds and course” and compromise external events. CATEGORIES interest rate movements. the ability of the business to deliver its long term CREDIT ENVIRONMENT CATEGORIES CATEGORIES growth and shareholder PORTFOLIO QUALITY INTERNAL AND value objectives. FUNDING EXTERNAL FRAUD PORTFOLIO PERFORMANCE LIQUIDITY EMPLOYMENT CATEGORIES PRACTICES AND CONCENTRATIONS INTEREST RATES MACROECONOMIC/ WORKPLACE SAFETY CREDIT MANAGEMENT FOREIGN EXCHANGE POLITICAL CLIENTS, PRODUCTS CREDIT INSURANCE ACCOUNTING INDUSTRY/ MARKET AND BUSINESS TRANSPARENCY CLIENT DYNAMICS PRACTICES FINANCIAL COMPETITION BUSINESS DISRUPTION PERFORMANCE AND SYSTEM FAILURES SHAREHOLDER INTEREST DAMAGE TO ASSETS EXECUTION, DELIVERY CHANGES IN LAW AND PROCESS AND REGULATIONS MANAGEMENT BRAND/REPUTATION 3RD PARTY SUPPLIERS KEY PEOPLE ISSUES TECHNOLOGY CHANGES MAJOR PROJECTS/ INVESTMENTS

19 Strategy & Operations

RISK APPETITE RISK CULTURE BFS’s risk appetite for each proposal is defined by BFS recognises that at the heart of an effective risk the principle: Preparing for worst case outcomes. management framework is an effective risk culture. Where we can see strong gains from an investment This is equally as important as rigorous controls but but losses in the worst case our appetite will be less tangible. The risk culture is maintained as follows: tempered to keep such losses within very acceptable limits. As a result of this approach, aggregate losses THE BOARD sets expectations regarding appropriate in a severe and long downturn are expected to be behaviours and oversees performance. more than adequately covered by earnings. Owing to the spread within BFS’s portfolio, c.8,900 MANAGEMENT implements the expectations clients with an average of £74,000 advance in 16 by: their leadership and communication, countries, we do not set product, industry or country organisational governance, incentives and limits. We have set limits in terms of maximum exposure establishing appropriate capability. to one ‘connection’. The spread within the BFS portfolio is a function of the market which BFS is in. MONITORING the assessment is made of risk Business units are subject to risk-return monitoring decisions and reported in order to enable adjustment and reporting. Management’s performance based and refinement as required. remuneration reflects this. Key aspects of BFS’s risk culture: RISK GOVERNANCE AND STRUCTURE > Business units are client oriented Risk management is sponsored by the Board, and > Everyday business processes and procedures include is a top priority for senior managers, the Operating consideration of the worst case rather than as a Company Managing Director, the regional Chief separate exercise Executive Officer (CEO), and the Global Chief Executive. The Global Risk Director is a full Board member and > Risk management is actively engaged in taking reports directly to the Global Chief Executive. risk decisions The Board oversees the risk appetite and profile > Taking a long view is encouraged by BFS’s senior of BFS and ensures that business developments are management remuneration incentives. consistent with BFS’s risk appetite and goals. All Board members have a responsibility for risk overall and RISK PERSONNEL especially within their own function. BFS has a small central risk team, headed by the BFS Beneath this level there are senior specialists within Risk Director (RD), including the four regional Risk each region or function to focus on risks as appropriate. Directors (RRD) covering UK, Europe, Asia Pacific Risk acceptance decisions are delegated to individuals and North America. or committees as appropriate by the Board to ensure Heads of the central functions, Finance, Risk, IT and that sanctioners are accountable for risk decisions. Change, HR and Marketing are responsible for risk management within their functions The four RRDs are CREDIT IMPAIRMENT REVIEW responsible for risk management within their regions. All exposures are subject to recurring review for Within the four regions the RRDs have risk staff possible impairment. Provisions are recognised where responsible for ensuring appropriate risk management there is objective evidence of impairment. is carried out within BFS’s business units worldwide.

20 Bibby Financial Services Limited

CREDIT RISK REGIONAL AND FUNCTIONAL RISK Credit risk is defined as the risk of loss in relation Each of the RRDs is responsible for all risks within to an advance made by one of BFS’s business units. their region. Operating businesses are given modest levels of credit BFS is relatively entrepreneurial in terms of business discretion but the BFS group average exposure is c. and a formal new business approval process is in place, £74,000 so an effective £500,000 limit will cover a with regional and local authorities in place to enable majority of facilities. Credit exposures above these levels speedy sanction in situ where possible. Whilst the detail will be approved by senior credit staff, RRD, Regional of application will vary in different jurisdictions, the CEO and Board credit committee as appropriate. same risk management framework applies across all Credit risk analysis is focused on ensuring that risks business units and functions. have been fully identified and that the downside risk is properly understood and acceptable against the LIQUIDITY RISK expected rewards. BFS uses system generated risk BFS’s aim is to have long term funding in place for its monitoring and internal rating processes. However BFS businesses. This is not possible in all its markets owing does not seek to rely on quantitative models to assess to local banking practices. The aim is over the coming credit risk but uses fundamental credit analysis as the years to obtain this longer term funding for all our basis for decisions. businesses as the business grows. Credit exposures are monitored against limits and Liquidity risk is assessed by the business on a regular counterparty limits are in place for all facilities. basis. The Board receives and assesses cashflows of Credit policies are in place to avoid unacceptable the business at each quarterly meeting of the Directors. counterparty credit risk. The business maintains cash buffers to accommodate OPERATIONAL RISK MANAGEMENT potential perceived demands on liquidity arising from Local business units are responsible for operational losses and other scenarios. risk management. This comes under the responsibility Between Board meetings the business generates of the RRD. regular global cash adequacy reports to ensure that Operational risk incidents are recorded on a any potential cash pressures which the business might centralised reporting system. Incidents are followed face are properly understood and dealt with. up from the centre to ensure they are satisfactorily categorised and analysed to identify trends and INTERNAL AUDIT establish lessons learnt on the effectiveness of controls. A risk based internal audit process has been Each business unit is subject to a recurring implemented within BFS reporting to the Audit operational audit which seeks to identify weaknesses Committee. BFS carries out operational audits of and areas for improvement. The results of these its business units on an annual basis as a minimum. audits are reported to the Board. This achieves management assurance that proper CAPITAL ADEQUACY processes are being followed. Internal Audit provides an independent and Capital adequacy is assessed by the Board on a objective assessment as to whether risks have regular basis to ensure that the business has adequate been adequately identified; that adequate internal capital to withstand potential losses and provide controls are in place to manage those risks; and creditors with adequate protection. whether those controls are working effectively. The group maintains undrawn facilities available on our existing loan book to ensure it has adequate capital in addition to its earnings which increase funds available in the year.

21 WE BELIEVE IN GIVING SOMETHING BACK

22 Bibby Financial Services Limited SUPPORTING OUR COMMUNITIES

Our “Giving Something Back” programme is a unique initiative which underpins our values and aims to harness the passion of our people, supporting them to fundraise or volunteer for the charities they choose.

The programme continues to see our teams take part in a variety of activities in their efforts to support their local communities and those who are less advantaged. 150 personal and community charities have benefited from an amazing £226k raised by our employees which is then matched funded. From walking the Great Wall of China, climbing Ben Nevis or volunteering for an Action Aid programme to build homes for families in Nepal who have been freed from a life of bonded labour and left with the most basic of shelter, the passion and enthusiasm displayed by our teams to give something back to their communities never ceases to amaze.

£ £ £ £ £ £226,000 33 LOCATIONS DONATED PARTICIPATED

118 EMPLOYEES 150 35 TOOK PART CHARITIES OFFICE SUPPORTED EVENTS

“I’M NOT SURE I CAN PUT INTO WORDS HOW AMAZING AND LIFE CHANGING BEING INVOLVED IN THIS PROJECT HAS BEEN BUT I’M SURE I SPEAK FOR ALL OF US, WHEN I SAY THAT IT IS ONE OF THE MOST MEMORABLE, EXCITING AND HUMBLING OF EXPERIENCES AND WE ALL HAVE A BOND THAT GOES BEYOND THE WORK AND CAMARADERIE WE HAD IN CAMP.” LYNSEY DEVINE BIBBY FINANCIAL SERVICES, EDINBURGH

23 Governance DIRECTORS’ REPORT The Directors present their report together with the audited financial statements for the year ended 31 December 2014.

DIRECTORS The Directors who served during the year were:

Sir Michael Bibby, Bt. Simon Andrew Simon Timothy Davies Mark Timothy Hartigan Chairman Featherstone Europe Chief Executive Global Risk Director Global Chief Executive

Jonathan Haymer Leigh Anderson Lones David John Postings Steven Vears Robinson Non-Executive Americas Chief Executive UK Chief Executive Chief Operating Officer

Stephen George Rose Ian Watson Darcy Willson-Rymer Global Finance Director Asia Pac Chief Executive Non-Executive

Diane Blinkhorn - resigned as a Director on 27 February 2014.

DIRECTORS’ INDEMNITIES DIVIDENDS PRINCIPAL ACTIVITIES The Company has made qualifying Interim dividends totalling The Group’s principal activity third party indemnity provisions for £10,674,000 (17.1 pence per share) continues to be the provision the benefit of its Directors which were paid during the year (2013 - of financial services. There have were made during the year and £12,406,500; 19.8 pence per share), been no significant changes in the remain in force at the date of see note 7. The Directors Group’s principal activities in the this report. recommend a final dividend year under review. The Directors are payment of £nil be made in respect not, at the date of this report, aware of the financial year ended 31 of any likely major changes in the December 2014. This dividend has Group’s activities during 2015. not been recognised as a liability in the financial statements.

24 Bibby Financial Services Limited

MATTERS INCLUDED DIRECTORS’ IN STRATEGIC REPORT RESPONSIBILITIES In accordance with s414C(11) of STATEMENT the Companies Act, included within The Directors are responsible > Prepare the financial statements the strategic report is information for preparing the Directors’ Report on the going concern basis unless relating to the future development and the financial statement in it is inappropriate to presume of the business and the financial accordance with applicable law that the Group and the Parent instruments policies and risks of the and regulations. Company law Company will continue in business. business, which would otherwise be requires the Directors prepare The Directors are responsible required by Schedule 7 of the ‘Large financial statements for each for keeping adequate accounting and Medium-sized Companies and financial year. Under that records that are sufficient to show Groups (Accounts and Reports) law the Directors have elected and explain the Group and Parent Regulations 2008’ to be contained to prepare the financial statement Company’s transactions and disclose in the Directors’ report. in accordance with United Kingdom with reasonable accuracy at any Generally Accepted Accounting time the financial position DISCLOSURE OF Practice (United Kingdom of the Group and Parent Company INFORMATION TO Accounting Standards and AUDITOR and enable them to ensure that their applicable law). Under company financial statements comply with Each of the persons who is a law the Directors must not approve the Companies Act 2006. Director at the date of approval the financial statements unless they They are also responsible for of this report confirms that: are satisfied that they give a true safeguarding the assets of the Group and fair view of the state of affairs and Parent Company and hence > So far as the Director is aware of the Group and the Parent for taking reasonable steps for there is no relevant audit Company and of the profit the prevention and detection information of which the group or loss for that period. of fraud and other irregularities. auditor is unaware; and In preparing these financial > The Director has taken all statements, the Directors are SUBSEQUENT EVENTS steps that he or she ought to required to: There are no events after the have taken as a Director to make balance sheet date to report. himself/herself aware of any > Select suitable accounting policies By order of the Board relevant audit information and and then apply them consistently; Bibby Bros. & Co. to establish that the group auditor > Make judgements and accounting (Management) Limited is aware of that information. 27th March 2015 estimates that are reasonable and prudent; This confirmation is given and should be interpreted in accordance > State whether applicable uk with the provisions of s418 of the accounting standards have been Companies Act 2006. followed, subject to any material departures disclosed and explained in the financial statements; and

25 Governance AUDITOR’S REPORT

We have audited the financial statements of Bibby Financial Services Limited for the year ended 31 December 2014 which comprise the Group Profit and Loss Account, the Group Statement of Total Recognised Gains and Losses, the Group and Parent Company Balance Sheets, the Group Cash Flow Statement and the related notes 1 to 27. The financial reporting framework that has been applied in their preparation is applicable Law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the RESPECTIVE SCOPE OF THE AUDIT OF company’s members, as a body, in RESPONSIBILITIES OF THE FINANCIAL STATEMENTS accordance with Chapter 3 of Part DIRECTORS AND AUDITOR An audit involves obtaining 16 of the Companies Act 2006. Our As explained more fully in evidence about the amounts audit work has been undertaken the Directors’ Responsibilities and disclosures in the financial so that we might state to the Statement, the Directors are statements sufficient to give company’s members those matters responsible for the preparation reasonable assurance that the we are required to state to them of the financial statements and financial statements are free in an auditor’s report and for no for being satisfied that they give a from material misstatement, other purpose. To the fullest extent true and fair view. Our responsibility whether caused by fraud or error. permitted by law, we do not accept is to audit and express an opinion This includes an assessment of: or assume responsibility to anyone on the financial statements in whether the accounting policies other than the company and the accordance with applicable law are appropriate to the Group’s company’s members as a body, for and International Standards on and the Parent Company’s our audit work, for this report, Auditing (UK and Ireland). Those circumstances and have been or for the opinions we standards require us to comply consistently applied and adequately have formed. with the Auditing Practices Board’s disclosed; the reasonableness of Ethical Standards for Auditors. significant accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

26 Bibby Financial Services Limited

OPINION ON MATTERS ON WHICH WE FINANCIAL STATEMENTS ARE REQUIRED TO REPORT In our opinion the financial BY EXCEPTION statements: We have nothing to report in > Give a true and fair view of respect of the following matters the state of the Group’s and of where the Companies Act 2006 the Parent Company’s affairs as requires us to report to you if, in at 31st December 2014 and of our opinion: the Group’s profit for the year > Adequate accounting records then ended; have not been kept by the Parent > Have been properly prepared Company, or returns adequate in accordance with United for our audit have not been Kingdom Generally Accepted received from branches not Accounting Practice; and visited by us; or > Have been prepared in > The Parent Company financial accordance with the requirements statements are not in agreement of the Companies Act 2006. with the accounting records and returns; or > Certain disclosures of Directors’ OPINION ON OTHER MATTER PRESCRIBED BY remuneration specified by law THE COMPANIES ACT 2006 are not made; or David Heaton (Deloitte) Bibby red In our opinion the information > We have not received all given in the Strategic Report the information and explanations and the Directors’ Report for we require for our audit. David Heaton (Deloitte) 100K the financial year for which the financial statements are prepared is consistent with David Heaton (Deloitte) 85K the financial statements. David Heaton (Senior Statutory Auditor) David Heaton (Deloitte) white for and on behalf of Deloitte LLP Chartered Accountants and Statutory Auditor

Manchester 27 March 2015

27 Financial Statements

GROUP PROFIT AND LOSS ACCOUNT YEAR ENDED 31 DECEMBER 2014

2014 2013

Note £000 £000

Turnover 2 159,155 161,038 Operating Costs (116,508) (112,793) Operating Profit 18 42,647 48,245 Interest Receivable and Similar Income 3 54 75 Interest Payable and Similar Charges 4 (17,983) (16,846) Profit on Ordinary Activities Before Taxation 2,5 24,718 31,474 Tax on Profit on Ordinary Activities 6 (7,309) (10,125) Profit on Ordinary Activities After Taxation 17,409 21,349 Minority Interest - -

Profit for the Financial Year 16,17 17,409 21,349

The Parent Company has not presented its own profit and loss account as permitted by Schedule 4, section 408, of the Companies Act 2006. The Parent Company made a profit for the financial year of £12,873,000 (2013 - £10,790,000). Turnover and profit on ordinary activities all derive from continuing activities which are unchanged from the previous year.

STATEMENT OF TOTAL GROUP RECOGNISED GAINS AND LOSSES YEAR ENDED 31 DECEMBER 2014

2014 2013

Note £000 £000

Profit for the Financial Year 16,17 17,409 21,349 Currency Translation Difference on Foreign Currency 16,17 (956) (4,723) Net Investment Total Recognised Gains Relating to the Year 16,453 16,626

The notes on pages 31 to 47 form part of these financial statements.

28 Bibby Financial Services Limited

BALANCE SHEETS AS AT 31 DECEMBER 2014

Parent Company Group

2014 2013 2014 2013

Note £000 £000 £000 £000

Fixed assets Intangible Assets 8 - - 2,129 2,392 Tangible Assets 9 15,960 7,990 18,410 10,739 Investments 10 76,600 164,003 - -

92,560 171,993 20,539 13,131

Current assets: Debtors Debtors 11 12,414 10,124 1,230,257 1,148,414 Cash at Bank and in Hand 12 3,534 4,611 6,234 7,237

15,948 14,735 1,236,491 1,155,651

Creditors (amounts falling due 13 (40,270) (120,909) (549,988) (634,189) within one year) Net Current (Liabilities)/Assets (24,322) (106,174) 686,503 521,462

Total Assets Less Current 68,238 65,819 707,042 534,593 Liabilities

Creditors (amounts falling due after 13 485 265 544,030 377,360 more than one year)

Capital and other reserves Called-Up Share Capital 15 62,600 62,600 62,600 62,600 Profit and Loss Account 16 5,153 2,954 100,412 94,633

Shareholder’s Fund 2,17 67,753 65,554 163,012 157,233

68,238 65,819 707,042 534,593

Company registration number: 03530461 Approved by the Board on 27 March 2015

S.G. Rose Global Finance Director

The notes on pages 31 to 47 form part of these financial statements.

29 Financial Statements

GROUP CASH FLOW STATEMENT YEAR ENDED 31 DECEMBER 2014

2014 2013

Note £000 £000

Net Cash (Outflow) from Operating Activities 18 (34,364) (18,340)

Returns on Investments and Servicing of Finance Interest Received 54 75 Interest Paid (17,734) (16,839) (17,680) (16,764)

Taxation Tax Refund 1,036 - UK Tax Paid (4,434) (4,999) Foreign Tax Paid (4,218) (3,082) (7,616) (8,081)

Capital Expenditure and Financial Investment Purchase of Tangible Fixed Assets (10,114) (7,045) Purchase of Intangible Fixed Assets (815) - Proceeds from Sale of Tangible Fixed Assets 5 62 (10,924) (6,983)

Equity Dividends Paid (10,674) (12,407) Cash Outflow Before Financing (81,258) (62,575)

Financing New Loans 85,062 69,315 Repayments of Amounts Borrowed (4,964) (3,000) 80,098 66,315

(Decrease)/Increase in Cash (1,160) 3,740

The notes on pages 31 to 47 form part of these financial statements.

30 Bibby Financial Services Limited

NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES The principal accounting policies are summarised below. They have all been applied consistently throughout the current and preceding year.

ACCOUNTING BASIS CONSOLIDATION The financial statements are prepared under the The Group profit and loss account and balance sheets historical cost convention and in accordance with include the financial statements of Bibby Financial applicable law and United Kingdom Accounting Services Limited and all its subsidiary undertakings. Standards. The majority of subsidiary undertakings prepare their financial information to 31 December 2014 and their GOING CONCERN - GROUP results are included in the Group profit and loss account These financial statements have been prepared in full, except where a subsidiary undertaking has been on a going concern basis. As set out in the Directors’ acquired during the year in which case its results are Responsibilities Statement, in preparing these financial included from the date of acquisition and accounted statements the Directors are required to prepare the for by the acquisition method of accounting. financial statements on the going concern basis unless it is inappropriate to presume that the company and INCOME RECOGNITION Group will continue in business. The Directors of the Administration fees are recognised in the profit and Parent Company have considered in detail the Group’s loss account at the time the debts are factored and forecast performance, as well as its capital and liquidity transactions financed. Other fees are normally resources. On this basis the Directors have a reasonable recognised in the profit and loss account at the time expectation that, despite challenging market conditions, the charge is made. However, where fees are charged the Group has sufficient funding and liquidity facilities in respect of nonperforming debt, the proportion to ensure that it will continue in operational existence credited to the profit and loss account is limited to for the foreseeable future. Accordingly the Directors of the amount by which total recoveries exceeds the the company have adopted the going concern basis in advance outstanding. Income is recognised on preparing these financial statements. leasing and hire purchase agreements on an actuarial before tax basis. GOING CONCERN - COMPANY The Directors have also considered the going concern DEBTORS AND CREDITORS status of the Parent Company. Although the company Trade debtors represent the debts assigned under is in a net current liabilities position, this is a result of factoring agreements, net of any bad debt provision. intercompany liabilities with its subsidiary companies, The full value of the assigned debt is recognised and it is therefore deemed that the Parent Company on the balance sheet as it represents rights or other has control over repayment of these liabilities access to future economic benefits. The corresponding Accordingly the Directors of the Parent Company trade creditor recognised represents the difference have adopted the going concern basis in preparing between the assigned debt and cash advanced to the company financial statements. clients net of appropriate factoring fees.

BAD DEBTS FIXED ASSETS Debts are written off when there is no realistic prospect Fixed assets are included at cost less accumulated of recovery. Specific provisions are made to reduce all depreciation. Depreciation is provided to write-off impaired balances to their expected realisable values. the assets over their useful life on a straight line A further provision is made for losses not specifically basis as follows:- identified, based on past experience, knowledge of the Office Equipment Group’s exposure and other relevant factors. The Three to seven years charge for the year for bad debts is included in Leasehold Improvements operating costs. The lower of ten years or the remaining life of the lease.

31 Financial Statements

CURRENT TAXATION FOREIGN CURRENCIES Current taxation, including UK corporation tax and A number of subsidiary undertakings prepare their foreign tax, is provided at amounts expected to be paid financial statements in foreign currencies. The net (or recovered) using the tax rates and laws that have assets of these companies are converted into sterling been enacted, or substantively enacted, at the balance at the rate of exchange ruling at the balance sheet date sheet date. and the resulting net differences are taken directly to reserves. All other exchange rate differences are taken DEFERRED TAXATION to the profit and loss account as they arise. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the GOODWILL balance sheet date where transactions or events that Goodwill arising on consolidation represents the excess result in an obligation to pay more tax in the future or of the fair value of the consideration over the fair value a right to pay less tax in the future have occurred at of the net assets acquired, and is eliminated by the balance sheet date. The deferred tax assets and amortisation through the profit and loss account liabilities are not discounted. Deferred tax assets are over its useful economic life. The Directors consider regarded as recoverable and recognised in the financial each acquisition individually and amortise the goodwill statements when, on the basis of available evidence, it accordingly. Amortisation periods currently vary is more likely than not that there will be suitable taxable between 1 and 10 years. In accordance with FRS 10 and profits from which the future reversal of the timing 11 goodwill is reviewed for impairment where events or differences can be deducted. changes in circumstances indicate that the carrying amount of the goodwill may be recoverable. Impairment OPERATING LEASES is measured by comparing the carrying value of the Operating lease rentals are charged to the profit income generating unit with its recoverable amount. and loss account as incurred. Where the recoverable amount is value in use, this is calculated by discounting the expected future cash LEASING ASSETS flows to a net present value. Assets leased to clients which transfer substantially all the risks and rewards of ownership to the customer RELATED PARTY TRANSACTIONS are classified as finance leases and are recorded within Under Financial Reporting Standard 8, the Group is debtors. The net investment in finance leases represents exempt from disclosing related party transactions with total minimum payments less gross earnings allocated group companies as more than 90% of the voting rights to future periods. are controlled by the ultimate parent undertaking, Bibby Line Group Limited. PENSION COSTS Bibby Financial Services Limited and certain of its UK INVESTMENTS subsidiaries are members of the Bibby Line Group Investments held as fixed assets are held on the Limited Pension Scheme but are unable to identify their balance sheet of the Company at cost, less any share of the underlying assets and liabilities of the impairment provision. Scheme on a consistent and reasonable basis therefore, as required by FRS 17 ‘Retirement Benefits’, Bibby Financial Services Limited continues to account for the scheme as if it were defined contribution scheme. Payments to defined contribution schemes are charged as incurred, in the profit and loss account.

32 Bibby Financial Services Limited

2. SEGMENTAL ANALYSIS BY GEOGRAPHICAL REGION

2014 2013

£000 £000

Turnover United Kingdom 92,438 92,017 Rest of Europe 18,420 18,102 North America 21,046 23,206 Asia Pacific 27,251 27,713 159,155 161,038

2014 2013

£000 £000

Profit on Ordinary Activities Before Taxation United Kingdom 16,149 22,922 Rest of Europe 1,277 1,678 North America 3,776 3,782 Asia Pacific 3,516 3,092 24,718 31,474

2014 2013

£000 £000

Equity Shareholders’s Funds United Kingdom 105,009 101,737 Rest of Europe 17,346 17,974 North America 20,271 17,163 Asia Pacific 20,386 20,359 163,012 157,233

33 Financial Statements

3. INTEREST RECEIVABLE AND SIMILAR INCOME

2014 2013

£000 £000

Bank Interest Receivable and Similar Income 54 75

4. INTEREST PAYABLE AND SIMILAR INCOME 2014 2013

£000 £000

On Bank Loans and Overdrafts 17,983 16,846

5. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION IS STATED AFTER CHARGING/(CREDITING) THE FOLLOWING AMOUNTS:-

2014 2013

£000 £000

Staff Costs: Wages and Salaries 48,893 50,919 Social Security Costs 4,688 4,518 Pension Costs 3,437 3,095 57,018 58,532 Depreciation 2,364 1,719 Amortisation of Goodwill 1,080 1,151 Hire of Plant and Equipment 930 980 Loss/(Profit) on Disposal of Fixed Assets 1 (8) Rental of Property 3,000 3,012 Auditor’s Remuneration: Fees Payable to the Company’s Auditor for the Audit 3 3 of the Company’s Annual Accounts Fees Payable to the Company’s Auditor for the Audit 458 450 of the Company’s Subsidiaries Other Services - Taxation and Other Advisory Services 10 110

Particulars of Employees The average number of persons employed during the year was 1,255 1,210

34 Bibby Financial Services Limited

6. TAX ON PROFIT ON ORDINARY ACTIVITIES

2014 2013

£000 £000

Foreign Tax Charge 4,143 3,710 Adjustment for Prior Year Taxes - 398 UK Tax Charge 3,350 5,097 Current Tax Charge for the Year 7,493 9,205

Deferred Tax (See Note 14) Current Year (Credit)/Charge (184) 920 7,309 10,125

A reduction in the UK corporation tax rate from 23% to 21% from 1 April 2014 and to 20% from 1 April 2015 was substantively enacted during 2013. Both of these rate reductions are reflected in the financial statements resulting in a charge of £7.3m to the Profit and Loss in period, giving an overall net credit of £2.8m in respect of the Group’s net deferred tax asset.

2014 2013

£000 £000

Profit on Ordinary Activities Before Taxation 24,718 31,474 Current Tax at 21.5% (2013 - 23.25%) 5,314 7,318 Difference Between Capital Allowances and Depreciation (415) (502) Other Timing Differences 456 (145) Expenses not Deductible for Tax Purposes 595 460 Adjustment in Respect of Previous Periods - 398 Effect of Foreign Rates of Tax 858 696 Non-Utilisation of Tax Losses 685 980 Current Tax Charge for the Year 7,493 9,205

35 Financial Statements

7. DIVIDENDS PAID

2014 2013

£000 £000

Interim Dividend of 8.8p Per Share paid on 23 January 2014 5,500 Interim Dividend of 8.0p Per share paid on 27 March 2014 5,000 Interim Dividend of 0.3p Per Share paid on 16 April 2014 174 10,674 Interim Dividend of 10.4p Per Share paid on 2 January 2013 6,500 Interim Dividend of 9.4p Per share paid on 9 April 2013 5,907 12,407

The Directors recommend a final dividend payment of £nil be made in respect of the financial year ended 31 December 2014. This dividend has not been recognised as a liability in the financial statements.

8. INTANGIBLE ASSETS THE COMPANY HAS NO INTANGIBLE ASSETS. DETAILS OF THOSE RELATING TO THE GROUP ARE AS FOLLOWS:

Other intangible Goodwill assets Total

£000 £000 £000

Cost At 1 January 2014 18,037 - 18,037 Purchased - 815 815 Exchange Difference 230 - 230 At 31 December 2014 18,267 815 19,082

Accumulated Amortisation At 1 January 2014 15,645 - 15,645 Charge for the Year 1,080 - 1,080 Exchange Difference 228 - 228 At 31 December 2014 16,953 - 16,953

Net Book Amount at 31 December 2014 1,314 815 2,129 Net Book Amount at 31 December 2013 2,392 - 2,392

36 Bibby Financial Services Limited

9. TANGIBLE ASSETS

Leasehold Office COMPANY Improvements Equipment Total

£000 £000 £000

Cost At 1 January 2014 196 8,507 8,703 Additions - 9,261 9,261 At 31 December 2014 196 17,768 17,964

Accumulated Amortisation At 1 January 2014 36 677 713 Charge for the Year 17 1,274 1,291 At 31 December 2014 53 1,951 2,004

Net Book Amount at 31 December 2014 143 15,817 15,960 Net Book Amount at 31 December 2013 160 7,830 7,990

Leasehold Office GROUP Improvements Equipment Total

£000 £000 £000

Cost At 1 January 2014 1,473 20,597 22,070 Additions - 10,114 10,114 Exchange Difference - (625) (625) Disposals - (64) (64) At 31 December 2014 1,473 30,022 31,495

Accumulated Amortisation At 1 January 2014 941 10,390 11,331 Charge for the Year 142 2,222 2,364 Exchange Difference - (551) (551) Disposals (1) (58) (59) At 31 December 2014 1,082 12,003 13,085

Net Book Amount at 31 December 2014 391 18,019 18,410 Net Book Amount at 31 December 2013 532 10,207 10,739

37 Financial Statements

10. INVESTMENTS

The investments of the Group are held by the Company and five sub-holding companies and are detailed below. All these investments relate to subsidiary undertakings and as such they are eliminated on consolidation.

2014 2013

£000 £000

Investment in Subsidiary Undertakings 76,600 164,003

Ordinary Shares in Wholly Owned Group Undertakings:- Bibby Group of Factors Limited 61,850 61,850 Bibby Trade Services Limited 3,200 3,200 Bibby Asset Finance Limited 9,250 9,250 Bibby Management Services Limited 600 83,600 Bibby Finance 1 Limited - - Bibby Finance 2 Limited - 4,403 Factoring UK Group Limited 1,700 1,700 Verus360 Limited - - 76,600 164,003

Bibby Group of Factors Limited also holds the following investments:-

> Bibby Debt Finance Limited > Global Management > Bibby Financial Services Sp. z.o.o. > Bibby Factors Bedford Limited Services Limited (operates in Poland) > Bibby Factors Borehamwood > Bibby ACF Limited > Bibby Financial Services (Ireland) Limited > Bibby Revolving Finance Limited Limited (operates in the Republic > Bibby Factors Bristol Limited > Bibby Transactional of Ireland) > Bibby Factors International Finance Limited > Bibby Financial Services (India) Limited > Bibby Factoring Slovakia, Pvt Limited (operates in India) > Bibby Factors Leicester Limited a.s (operates in Slovak Republic) > Bibby Invoice Discounting Limited > Bibby Factors Limited > Bibby Financial Services (Asia) > Bibby Financial Services, a.s. > Bibby Factors Manchester Limited Limited (operates in Hong Kong) (operates in Czech Republic) > Bibby Factors Northeast Limited > Bibby Financial Services > Bibby Financial Services Australia > Bibby Factors Northwest Limited (Singapore) Pte Limited Pty Limited (operates in Australia > Bibby Factors Scotland Limited (operates in Singapore) and New Zealand) and holds the > Bibby Factors Slough Limited > Bibby Financial Services A.B. following investment:- > Bibby Factors Sussex Limited (operates in Sweden) > Integral Collections Pty Limited > Bibby Factors Wessex Limited > Bibby Financial Services GmbH (operates in Australia) > Bibby Factors Yorkshire Limited (operates in Germany) > Bibby Trade Factors Limited

38 Bibby Financial Services Limited

> Bibby Financial Services > Bibby Financial Services > Bibby Transportation Finance, Inc. (Holdings), Inc. (operates in the (Midwest), Inc. (operates in (operates in the USA) USA) and holds the following the USA) > Bibby Financial Services (Canada) investments:- > Bibby International Trade Finance, Inc. (operates in Canada) > Bibby Financial Services Inc. (operates in the USA) (CA), Inc. (operates in the USA)

Bibby Asset Finance Limited holds the following investment:- > Bibby Leasing Limited

Factoring UK Group Limited holds the following investments:- > Factoring UK Limited > Cashflow UK Limited

All the Group companies are registered in England and Wales, except for those which operate outside the UK which are registered in those countries and Bibby Factors Scotland Limited which is registered in Scotland. Bibby Group of Factors Limited and its subsidiaries operate as debt factors, Bibby Trade Services Limited, and Bibby International Trade Finance, Inc. as transactional financiers and Bibby Asset Finance Limited and its subsidiary as capital asset financiers. All of the Company’s subsidiaries’ equity shares are wholly owned, with the exception of Bibby Financial Services (India) Pvt Limited which is 75% owned by the Company. The Company owns the entire issued preference share capital of the aforementioned company. Voting rights are in proportion to overall share ownership.

39 Financial Statements

11. DEBTORS

Parent Company Group

2014 2013 2014 2013

£000 £000 £000 £000

Net Investment in Finance Leases - - 50,715 37,222

Trade Debtors - - 1,156,283 1,091,822

Prepayments and Accrued Income 3,720 995 13,675 10,536

Other Debtors 591 457 1,632 1,218

Amount Owed by Ultimate 5,117 5117 5,117 5,117 Parent Undertaking

Amount Owed by Other 2,986 3,555 - - Group Undertakings Deferred Taxation (See Note 14) - - 2,835 2,499

12,414 10,124 1,230,257 1,148,414

Net Investment in Finance Leases includes £13,039,000 (2013 - £5,990,000) due in respect of hire purchase contracts. An amount of £26,843,000 (2013 - £22,120,000) is included within Net Investment in Finance Leases which falls due after more than one year. The cost of assets acquired for the purpose of letting under Finance Leases was £21,982,000 (2013 - £19,080,000). The aggregate rentals receivable during the year in respect of Finance Leases was £17,438,000 (2013 - £16,306,000).

12. CASH AT BANK AND IN HAND

The Company, together with a number of its UK subsidiary undertakings, are party to a composite accounting structure agreement with one of their bankers. This agreement treats all the sterling bank accounts included in the agreement as one account; as a result, positive and negative cash balances included in the agreement are shown net in the consolidated balance sheet.

40 Bibby Financial Services Limited

13. CREDITORS

Parent Company Group

2014 2013 2014 2013

£000 £000 £000 £000

Amounts Falling Due Within One Year

Trade Creditors 974 572 496,778 490,915

Bank Loans and Overdrafts - - 26,166 114,739

Amounts Owed to Other 38,701 118,094 - - Group Undertakings

Accruals and Deferred Income 22 1,974 23,298 24,049

Other Taxation and Social Security - - 1,816 2,189

Deferred Tax 573 269 - -

Corporation Tax - - 1,930 2,297

40,270 120,909 549,988 634,189

Amounts Falling Due After More Than One Year

Bank Loans and Overdrafts 485 265 544,030 377,360

Bank loans and overdrafts are repayable as follows:

Parent Company Group

2014 2013 2014 2013

£000 £000 £000 £000

Within One Year - - 26,166 114,739

Between One and Two Years 485 265 524,807 325,314

Between Two and Five Years - - 19,223 52,046

485 265 570,196 492,099

The bank loans and overdrafts of certain factoring facilities are secured by a fixed and floating charge over the assets of the Company and its subsidiary undertakings with, however, the stipulation that in respect of the book debts the amount recoverable under this security is limited to the amount actually prepaid under client agreements. The interest charged on the Group’s facilities is based on a variable rate above local country base rates or interbank rates.

41 Financial Statements

14. DEFERRED TAXATION ASSET

Parent Company Group

£000 £000

As at 1 January 2014 - 2,499

Profit and Loss Account - Charge (See Note 6) - 184

Exchange Difference - 152

As at 31 December 2014 - 2,835

The amounts of deferred taxation recognised at rates between 13% and 38% (2013 - 13% and 38%) by the Group are as follows:

2014 2013

£000 £000

Accelerated Depreciation 1,622 1,305

Other Timing Differences 1,213 1,194

2,835 2,499

A deferred tax asset of £1,597,000 (2013 - £1,516,000) has not been recognised at the balance sheet date as it is not certain that it will be recoverable in the foreseeable future.

15. CALLED-UP SHARE CAPITAL

2014 2013

£000 £000

Allotted and Fully Paid: Ordinary £1 Shares 62,600 62,600

42 Bibby Financial Services Limited

16. RESERVES

Profit and Loss Account

£000

Company

At 1 January 2014 2,954

Profit for the Financial Year 12,873

Dividends Paid (10,674)

At 31 December 2014 5,153

Group

At 1 January 2014 94,633

Profit for the Financial Year 17,409

Dividends Paid (10,674)

Currency Translation Difference on Foreign Currency Net Investment (956)

At 31 December 2014 100,412

17. MOVEMENT IN SHAREHOLDER’S FUNDS

Parent Company Group

2014 2013 2014 2013

£000 £000 £000 £000

Profit for the Financial Year 12,873 10,790 17,409 21,349

Dividends Paid (10,674) (12,407) (10,674) (12,407)

2,199 (1,617) 6,735 8,942

Currency Translation Differences - - (956) (4,723) on Foreign Currency Net Investment

Addition/(Deduction) to 2,199 (1,617) 5,779 4,219 Shareholder’s Funds

Opening Shareholder’s Funds 65,554 67,171 157,233 153,014

Closing Shareholder’s Funds 67,753 65,554 163,012 157,233

43 Financial Statements

18. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES

2014 2013

£000 £000

Operating Profit 42,647 48,245

Depreciation 2,364 1,719

Amortisation of Goodwill 1,080 1,151

Loss/(Profit) on Disposal of Fixed Assets 1 (8)

(Increase) in Debtors (90,767) (115,199)

Increase in Creditors 10,311 45,752

Net Cash (Outflow) from Operating Activities (34,364) (18,340)

19. RECONCILIATION OF MOVEMENT IN NET DEBT

2014 2013

£000 £000

(Decrease)/Increase in Cash in the Year (1,160) 3,740

Increase in Loans (80,098) (66,315)

Change in Net Debt from Cash Flows (81,258) (62,575)

Exchange Movements 2,158 12,799

Movement in Net Debt in the Year (79,100) (49,776)

Net Debt at 1 January (484,862) (435,086)

Net Debt at 31 December (563,962) (484,862)

44 Bibby Financial Services Limited

20. ANALYSIS OF NET DEBT

1 January Exchange 31 December 2014 Cash Flow Differences 2014

£000 £000 £000 £000

Cash at Bank and in Hand 7,237 (1,160) 157 6,234

Debt Due Within 1 year (114,739) 88,263 310 (26,166)

Debt Due After 1 year (377,360) (168,361) 1,691 (544,030)

(492,099) (80,098) 2,001 (570,196)

(484,862) (81,258) 2,158 (563,962)

21. DIRECTORS EMOLUMENTS 2014 2013

£000 £000

The total emoluments were:

Emoluments 2,270 2,790

Pension Contributions 110 129

2,380 2,919

The emoluments, excluding pension contributions, of the Chairman were £nil (2013 - £nil) and of the highest paid Director £368,000 (2013 - £449,000). Contributions of £110,000 (2013 - £129,000) were made in respect of six (2012 - six) of the Directors to a money purchase pension scheme. The pension contributions of the highest paid Director to a money purchase scheme for the year were £nil (2013 - £nil).

45 Financial Statements

22. CAPITAL COMMITMENTS

As at 31 December 2014, the Group had no capital commitments (2013 - nil).

23. CONTINGENT LIABILITIES

The contingent liabilities relate to Group companies providing client suppliers and government agencies with guarantees of payment or with a letter of credit issued on their behalf by UK banks.

2014 2013

£000 £000

Unpresented Letters of Credit 1,186 736

24. PENSION COSTS

The Group participated in the Bibby Line Group Pension Scheme (the “Scheme”), a defined benefit pension scheme. The assets of the Scheme are held separately from those of the sponsoring and participating employers and are invested with an insurance company. The Scheme was closed to new entrants from 1 April 2000 and closed to future accruals for existing members from 30 September 2011. The Group is unable to identify its share of the underlying assets and liabilities of the scheme as a significant number of members who are deferred or pensioners within the Scheme relate to businesses that are no longer part of the Group. The contributions made by the Group over the financial year to this Scheme have been £nil (2013-£nil). Since 1 April 2000, the Group has participated in a defined contribution scheme for new employees, currently the Bibby Line Group Personal Pension Plan (“the Plan”), which is a defined contribution scheme for new employees. The contributions made by the Group over the financial year to the Plan have been £1,998,000 (2013 - £1,857,000). The Group has also made contributions of £33,000 (2013 - £30,000) to private money purchase pension schemes. Outstanding contributions at the balance sheet date to all pension arrangements amounted to £nil (2013 - £nil).

FRS17 Disclosures As noted above and under accounting policies (see note 1) the Group participates in the Scheme. As part of the information disclosed under FRS17 in the ultimate holding company’s accounts, a net deficit of £14,982,000 (2013 - £12,719,000) is noted. Further information on the scheme can be found in the financial statements of the ultimate Parent Company.

46 Bibby Financial Services Limited

25. OPERATING LEASE COMMITMENTS

Parent Company Group

2014 2013 2014 2013

£000 £000 £000 £000

Annual Commitments Under Operating Leases Which Expire:

Within One Year

Vehicles and Equipment 12 34 118 229

Land and Buildings 17 - 516 516

Within Two to Five Years

Vehicles and Equipment 260 191 895 995

Land and Buildings - 248 1,849 2,463

After More than Five Years -

Vehicles and Equipment - - - 4

Land and Buildings 74 - 95 -

363 473 3,473 4,207

26. FORWARD CONTRACTS NOT INCLUDED AT FAIR VALUE

2014 2013

£000 £000

Fair Value of Forward Foreign Exchange Contracts 34 410

The Group uses forward contracts to hedge its exposure to changes in foreign currency exchange rates. The fair values are based on market values of equivalent instruments at the balance sheet date. Contracts held at year end were taken out on behalf of subsidiary clients. The nominal value of forward foreign exchange contracts at the balance sheet date was £608,000.

27. PARENT UNDERTAKING

The Company is a wholly owned subsidiary undertaking of Bibby Line Group Limited, the ultimate parent and controlling company, a company registered in England. Bibby Line Group Limited is the parent undertaking of the largest and smallest group which consolidates these financial statements and of which the Company is a member. Copies of the parent undertaking’s financial statements may be obtained from Bibby Line Group Limited, 105 Duke Street, Liverpool L1 5JQ.

Group website address: www.bibbygroup.co.uk

47 Bibby Financial Services Limited Registered Office T: 0044 (0) 1295 661900 Endeavour House, Noral Way, Banbury, 105 Duke Street, Liverpool, L15JQ, F: 0044 (0) 1295 661979 Oxfordshire, OX16 2SB, United Kingdom United Kingdom E: [email protected] Registered in England and Wales W: www.bibbyfinancialservices.com Registered Number: 3530461