Report & Accounts 2016

Transcription

1 Report & Accouts 2016 rpsgroup.com Local Kowledge INTERNATIONAL EXPERTISE

2 Strategic Report Chairma s Statemet 3 Strategy, Busiess Model ad Activities Results ad Key Performace Idicators 7 Risk Maagemet 11 Corporate Resposibility 14 Maagemet & Goverace The Board 18 Report of the Directors 19 Corporate Goverace 23 Remueratio Committee Report 29 Report of the Auditor 31 Notes to Remueratio Committee Aual Report 87 Accouts Cosolidated Icome Statemet 37 Cosolidated Statemet of Comprehesive Icome 37 Cosolidated Balace Sheet 38 Cosolidated Cash Flow Statemet 39 Cosolidated Statemet of Chages i Equity 40 Notes to the Cosolidated Fiacial Statemets 41 Paret Compay Balace Sheet 77 Paret Compay Statemet of Chages i Equity 78 Notes to the Paret Compay Fiacial Statemets 79 Five Year Summary 96 2 Report ad Accouts 2016

3 Chairma s Statemet Strategic Report Itroductio I was appoited as Chairma of the Board of RPS Group plc o 1 November 2016, a role which I was delighted to accept. My predecessor Brook Lad stepped dow from the Board havig served 20 years as the Chairma. Over the period of his chairmaship Brook provided tireless ad cotiuig support to Ala Heare, the Chief Executive, ad to the executive maagemet. He gave great directio ad leadership to the Board ad durig his teure RPS flourished ito the strog busiess it is today. The Board is grateful for the log service he provided to RPS ad wishes him well i his future edeavours. Tradig ad strategy Give the recet commecemet of my teure it is ievitable that I have a lot to lear about our busiess. I that regard I have already started visitig the busiess locatios to gai a greater uderstadig. From what I have see we have a soud ad broadly based multi-discipliary cosultacy ad services group which has bee assembled over several years by a series of strategic acquisitios. Except for the eergy related busiesses, which were ievitably impacted durig the year by a oil price which i Jauary 2016 was at its lowest level for 12 years, the busiesses i the Group have largely fared well with a umber showig orgaic reveue ad profit growth i growig markets. The macro drivers of the Group s markets such as the populatio growth, climate chage, ifrastructure developmet, the growig eed for eergy ad water ad the importace of maitaiig ad protectig the eviromet are all favourable ad should provide opportuities for growth goig forward. The Group has a high-quality cliet list ad there is potetial to derive reveue syergies from cross sellig of services. There is also scope to achieve further syergies from the itegratio of busiesses ad sharig of good practice. Although the Group has bee highly cash geerative over the years the reductio i cash flow from the eergy busiess coupled with ivestmet i acquisitios ad a steadily growig divided had icreased the level of et debt as reported at the half-year. Cash geeratio i the secod half of the year, which has bee good due to improved cash from tradig ad a pause i acquisitio activity, has resulted i a stroger year-ed balace sheet positio. Further progress is aticipated i Give that acquisitios over the years have bee people busiesses, it is ievitable that much of the acquisitio cosideratio is attributed to goodwill ad itagible assets. The key to supportig the cotiuig carryig value of itagible assets is the cash geeratio from the busiesses acquired. The review of goodwill ad itagible assets at the year-ed has cofirmed cotiuig strog cash flows ad that o impairmet of goodwill ad itagible assets is required at this time. The Group has had a excellet record of cotiued divided growth over the years. At the half-year results aoucemet, the combiatio of the challeged tradig performace of the eergy busiess ad the higher level of et debt suggested that a pause to this growth might be appropriate. Whist the cash performace i the secod half has bee strog, the recommedatio of the Board to hold the divided at the same level as last year is prudet with the expectatio that divided growth will be resumed i the future provided that debt levels, liquidity ad tradig circumstace allow. Ievitably the challeges of 2016 have placed sigificat pressures o our executive maagemet. I the circumstaces, they have coped extremely well i takig the ecessary cost maagemet actio ad strategic decisios to protect the profitability of the Group. This has bee achieved whilst retaiig a strog platform for a resumptio of growth which the Board aticipates should occur i To achieve this growth, we will cotiue to evaluate the attractiveess of the markets i which we are preset ad our competitive positio withi those markets so that Group strategy focuses resources ito those areas where we ca achieve good log term retur o ivestmet. Goverace Major demads have bee placed o the No-Executive members of the Board i As Chairma of the Nomiatio ad Remueratio Committees, Robert Miller-Bakewell, our Seior Idepedet Director, led the process to secure the appoitmet of a ew Chairma ad the developmet of the ew remueratio policy recetly approved by Shareholders. This has ievitably demaded heavy ivolvemet from the Nomiatio ad Remueratio Committees. Whilst it made sese for Robert to Chair the Nomiatio ad Remueratio Committees durig the Chairma successio process, I have ow take o the role as Chairma of the Nomiatio Committee. Robert will cotiue as Chairma of the Remueratio Committee. The Nomiatio Committee cotiues to progress the successio plaig iitiative which ecompasses the Board Executive ad No-Executive Directors ad the ext tier of executive maagemet. Phil Williams who previously headed up our eergy busiess retired o 30 September Phil led the growth ad developmet of our eergy busiess followig the acquisitio of Hydrosearch i Although Phil left the Board before I joied RPS, I kow that he cotributed eormously to our busiess over the 13 years he was with the Group. Followig Phil s retiremet Ala Heare took over Phil s Board resposibilities i cojuctio with a elarged Executive Committee which ow icludes the leaders of the regioal busiesses. rpsgroup.com 3

4 Joh Beett retured to Chair the Audit Committee followig the decisio by Adrew Page to ot seek re-electio to the Board at the last Aual Geeral Meetig. Joh had previously chaired the Audit Committee prior to steppig dow from the Board i His reappoitmet for a temporary period was expediet ad pragmatic i the circumstaces ad the Board is grateful that Joh stepped i at short otice. Joh will step dow as a No-Executive Director ad Chairma of the Audit Committee as soo as a appropriate successor is idetified. It is approachig ie years sice Louise Charlto joied the Board as a No-Executive Director. Louise has made a excellet cotributio particularly i helpig to shape iteral ad exteral Group commuicatios. Louise will also step dow from the Board as soo as a appropriate successor is idetified. All of our Directors will therefore be offerig themselves for electio or re-electio at the forthcomig Aual Geeral Meetig. As a part of my appoitmet process I performed a iitial assessmet of the effectiveess of the Board ad its committees through discussios with the Executive ad No-Executive Directors o the Board. There were o material matters of immediate cocer. With the chagig compositio of the Board it is my itetio to udertake a exteral review towards the ed of 2017 oce the replacemet No-Executive Directors referred to above have had the opportuity to settle ito their ew roles. Each of the Board committees has operated idepedetly throughout the period. As reported last year the process of reviewig ad reportig risks ad iteral cotrol systems has bee formalised. Towards the ed of the year our activities i this area were further stregtheed by the appoitmet of a Group Assurace Maager. Health ad safety performace cotiues to be regularly reported to the Board. We are, of course, a people busiess ad so much of the value of our busiess is i our people. Despite the difficult market circumstaces of our oil ad gas related busiesses the Group has remaied focussed o the importace of recruitig, retaiig, developig ad rewardig our key talet. The Board expresses its thaks for the commitmet ad dedicatio show by all our employees has without doubt had its challeges ad the Group has respoded well. The creatio of our three regioal busiesses eables us to look cofidetly to the future. Ke Lever Chairma 2 March Report ad Accouts 2016

5 Strategic Report Strategy RPS is a iteratioal cosultacy focused o providig its cliets high quality ad added value advice. Our busiesses are based primarily i Europe, North America ad Australia, although we udertake projects i may other parts of the world. We have developed a rage of skills ad services which eable us to provide idepedet advice upo: the developmet ad maagemet of the built ad atural eviromet; the plaig ad developmet of strategic ifrastructure; ad the evaluatio ad developmet of eergy, water ad other resources. Our experiece of tradig for over 40 years had eabled us to develop a clear uderstadig of how to maage techical cosultacy busiesses successfully. Our key objectives are to: build o our existig reputatio of beig recogised as a market leader i a wide rage of markets; focus o deliverig value added services which geerate good fee levels ad margis; grow our existig busiesses orgaically as ad whe markets allow; attract ad retai staff capable of attractig projects from our cliets ad maagig them successfully; exted our rage of services ad geographical cover by brigig high quality specialist compaies ito the Group ad the support them to achieve further growth; ad maage our cash ad balace sheet prudetly, whilst cotiuig to provide a attractive divided to shareholders. The Group s busiesses cotiually focus o uderstadig how their markets are developig ad shiftig their activities ad marketig accordigly. However, the Board believes there are log term fudametals uderpiig our busiess. These are: log term demad for improvemet to ad extesio of the urba fabric of tows ad cities; log term demad for urba, iter urba, trasport, water eergy/power ad commuicatios ifrastructure; log term demad for oil ad gas ad other sources of eergy/power; the icreasig importace of evirometal ad climate chage issues. Our sigificat market profile ad presece i the markets related to these opportuities eables us to beefit from them. Durig the first half of the year the cotiuig dowtur i the oil ad gas sector ad related idustries caused a sigificat reductio i our profitability ad this, coupled with ivestmet i a ew acquisitio, DBK, meat that our leverage for bak purpose at the ed of Jue had icreased to 2.2 times. As a result we paused our ivestmet i ew acquisitios ad held our divided at the level. Durig the secod half of the year our profitability ad cash flow improved cosiderably ad the leverage at the year-ed had reduced to 1.6 times, the same as at the ed of. RPS remais highly cash geerative ad the Board expect the Group leverage to reduce sigificatly durig 2017, providig more flexibility i respect of ivestmet i acquisitios ad divideds. I recet years our acquisitios i both Norway ad Australia have bee directed towards project maagemet, particularly i respect of large scale ifrastructure projects. We see this as a importat ew activity for the Group; it reduces our depedecy o the resources sectors ad provides a more flexible busiess model tha some of our techical busiesses i other sectors. This strategy ca be developed further i all the territories i which we operate. Busiess Model The Group operates i a wide rage of markets ad offers a broad rage of services. However, the approach to metrics which eable our busiesses to be maaged effectively apply across the Group as a whole. As a result we operate ad measure our busiesses with a commo set of systems focused aroud aual targets developed from a uderstadig of market coditios (top dow), together with the retur expected from the staff complemet ad overhead structure we employ (bottom up). Most idividual offices are separate profit cetres with their ow targets; larger offices may cotai more tha oe profit cetre. Offices are grouped fuctioally or geographically for maagemet ad marketig purposes. Those groupigs the form part of the reported Group segmets. Due to the declie i the Group s Eergy busiess, the Board has, as explaied uder Group Activities below, decided that, with effect from 1 Jauary 2017, the Group will operate ad report i three regioal segmets with Eergy related activities icluded withi each. A separate aoucemet will be made providig a restatemet of the 2016 Results ad Iterim Results i the ew regioal segmets. The 2017 Results ad Iterim Results will be published icludig a compariso with the restated 2016 Results ad Iterim Results. rpsgroup.com 5

6 Marketig ad busiess developmet are devolved to these segmet Boards although the Board maitais a Group website ad Busiess Iformatio Uit. IT is maaged cetrally, with support from local staff aroud the Group as ecessary. As a result of developig the Group over four decades we ow have importat strog core competeces throughout the busiess: maagig complex, itellectual cosultacy busiesses; idetifyig high value, premium margi markets; developig ad operatig busiesses iteratioally; recruitig ad retaiig high quality staff; maitaiig good cliet relatioships: maitaiig strog cash flow; ad idetifyig, deliverig ad successfully itegratig bolt o acquisitios. Achievig orgaic growth is a key requiremet of each busiess. The deliverability of this, however, is iflueced sigificatly by ecoomic ad market coditios. Acquisitios broade ad deepe the services that we offer our cliets. They have played a importat part i our growth ad will cotiue to be a importat elemet of our strategy, oce our leverage has bee reduced. We edeavour to acquire busiesses that are well maaged, deliver soud results ad ejoy good reputatios i their markets. They may be i sectors where we are already operatig or offer services that are closely related to our ow. We view o-dilutive, acquisitive growth, fuded by cash, as beig a importat elemet of our busiess model. Our acquisitio model is structured to operate o a low risk basis. This is achieved through a icremetal approach focusig o small to medium sized eterprises which are adjacet ad complemetary to our existig areas of operatio. The emphasis placed upo retetio of Directors ad employees as well as the extet of due diligece udertake ad a clear sigle brad itegratio process are also importat i keepig risks to a miimum. Icreasig Group scale ad diversity by meas of acquisitios leads to resiliece i the Group s performace, as demostrated whe the Global Fiacial Crisis bega i 2007 ad, i ad 2016, through the major dowtur i the miig ad oil ad gas idustries. Shareholder Value The Group s itese focus o covertig profit ito cash has eabled us to provide our shareholders with sigificat returs for almost 30 years. Sice the Group s IPO i July 1987 we have raised oly 60 millio from our shareholders ad distributed 165 millio i divideds icludig the recommeded 2016 fial divided. Our last fud raisig, of 40 millio, was i 2001; sice the we have paid 160 millio i divideds. We have ot sigificatly diluted the equity base of the busiess by usig shares to make acquisitios. Group Activities ad Maagemet The reductio i expediture by our cliets i the oil ad gas sector ad related idustries has bee dramatic ad has had a fudametal impact o the ature ad mix of our activities. Our 2011 Report ad Accouts was published i the aftermath of the global fiacial crisis ad subsequet recessios. The impact of these evets o our built ad atural eviromet busiess was severe. Our Eergy busiess fared much better as oil ad gas compaies maitaied a high level of ivestmet i exploratio ad productio as well as the ifrastructure ecessary to get their product to market. The balace of our busiess activities shifted sigificatly ad we disclosed that: 70% of our uderlyig profit is ow eared i the global Eergy ad associated markets. As the world s ecoomies recovered our o Eergy busiess grew agai. However, the oil ad gas dowtur of /2016 has, like the global fiacial crisis, shifted the balace of our activities dramatically agai. I 2016 oly 18% of the Group s uderlyig profit was geerated by the wider oil ad gas sector. Although the Board expects a modest recovery i Eergy profit i 2017 we aticipate that the overall balace of the busiess will ot chage materially. We have, therefore, decided to chage the maagemet structure of the busiess. I 2013 i AAP we merged the BNE ad Eergy compoets of the AAP busiess to create oe regioal multi-discipliary segmet. This was successful ad we have ow doe the same i Europe ad North America ad as oted above, have sice 1 Jauary 2017 bee tradig through three multi-discipliary regioal segmets. Each of these segmets is maaged by a separate Board with clear devolved resposibilities. The leaders of each of these Boards are ow part of a elarged Executive Committee. A sample of the projects ad activities that we udertake is described o our website at 6 Report ad Accouts 2016

7 Strategic Report 2016 Results Summary of results The Group s results for the year to ember 2016 are summarised i the table below: 2016 (costat currecy) (3) Busiess performace Reveue ( m) Fee icome ( m) PBTA (1) ( m) Adjusted earigs per share (2) (basic) (p) Total divided per share (p) Statutory reportig Profit before tax ( m) Earigs per share (basic) (p) Notes 1) PBTA is profit before tax, amortisatio ad impairmet of acquired itagibles ad trasactio related costs. (2) Adjusted earigs per share is before amortisatio ad impairmet of acquired itagibles ad trasactio related costs ad the related tax. (3) results restated at 2016 currecy rates. PBTA for the full year was 50.7 millio (: 51.8 millio; 57.2 millio o a costat currecy basis). Eergy ad other busiesses exposed to the oil ad gas sector suffered a sigificat dowtur, resultig from a further substatial cotractio i expediture by our cliets, respodig to the collapse i the oil price early i the year. However, our busiesses ot ivolved i that sector geerally performed well ad eabled the Group as a whole to produce a result well above expectatios. The Group tax rate o PBTA was 27.7% (: 29.6%). Adjusted basic earigs per share were pece (: pece; pece o a costat currecy basis). Sterlig weakeed durig the year, particularly followig the UK referedum i Jue This provided a sigificat beefit whe our overseas earigs were cosolidated ito the Group results. PBTA i 2016 would have bee 3.7m lower had exchage rates bee repeated. Segmet Cotributio The acquisitios made i recet years have cotributed materially to a shift of emphasis i the Group s performace away from the Eergy sector. The scale of the dowtur i this sector is uprecedeted ad the impact o our Eergy busiess ad, cosequetly, the Group has bee dramatic. Eergy cotributed 35 millio segmet profit i 2014, 11 millio i, ad oly 5.4 millio i We committed c. 126 millio to acquisitios i , oe with direct exposure to oil ad gas markets. This brought ew activities ad geographies ito the Group with a aggregate ru rate profit at time of completio of each trasactio of 22 millio. Whilst it is difficult to establish precisely their cotributio, because these busiesses have bee itegrated with appropriate parts of the Group, they have cotiued to grow, cotributig a estimated 29 millio of segmet profit i the year. This move away from oil ad gas sector activities materially assisted the Group maitai its profit ad demostrates clearly the value of this part of our strategy. The cotributio of the Group s four segmets i 2016 was: Segmet Profit* ( m) 2016 (costat currecy) Built ad Natural Eviromet: Europe Built ad Natural Eviromet: North America Eergy Australia Asia Pacific ( AAP ) Total *after reorgaisatio costs. rpsgroup.com 7

8 Both our BNE busiesses were exposed to oil ad gas cliet projects. The oil ad gas compoet i Europe was small cotributig about 2% of fees ad segmet profit i the year ad primarily focussed i Norway. I North America the cotributio was greater, about 30% of fees ad 17% profit; we have i place a strategy to diversify this busiess further, as has bee achieved i AAP. Our resources busiesses i AAP cotributed about 20% of total AAP fees i the year ad 5% segmet profit. The cotributio from these markets to total Group segmet results i 2016 was about 23% i respect of fees ad 12% i respect of segmet profit. I 2014 the equivalet proportios were 54% ad 62%. Despite this reductio we retai effective capability i the oil ad gas ad resources sectors ad should beefit from ay sustaied recovery i these markets. The Group s key performace idicators are show below: 2016 (costat currecy) Fee icome ( m) PBTA ( m) Coversio of profit to cash (%) (1) Net debt ( m) Notes (1) Based o operatig profit adjusted for depreciatio, share scheme costs, amortisatio of acquired itagibles, deferred cosideratio treated as remueratio ad ocash trasactio related costs. Cash Flow, Fudig ad Divided Our coversio of profit ito cash was agai strog at 117%. We fuded acquisitio ivestmet of 35.1 millio i the period, icludig 23.7 millio deferred cosideratio from acquisitios made i prior years. Net bak borrowigs at ember 2016 were 83.4 millio (ember : 78.8 millio). Deferred cosideratio of up to 13.4 millio is payable i 2017, leavig oly 1.6 millio remaiig to be paid, i Sice July we have had i place a five year 150 millio revolvig credit facility with Lloyds Bak plc ad HSBC Bak plc. I additio, over 4 years remai o the 30.0 millio ad $34.1 millio fixed term, fixed rate otes issued through Pricoa i Our iterest cover at ember was 11.8 times, well above the bak coveat of 4.0 times. The Board idicated i the 2016 Iterim Results aoucemet that it had decided to take a more cautious approach to ivestmet i acquisitios because leverage, (beig the ratio of et bak debt plus deferred cosideratio to aualised EBITDAS), had reached 2.2, eve though it was well below the bak coveat of 3.0. Our leverage at ember had reduced to 1.6 (December : 1.6). Assumig this positio ca be maitaied or further reduced, as seems likely, durig 2017, the Board would be comfortable about makig further ivestmets i suitable busiesses. The Board remais cofidet about the Group s fiacial stregth ad is recommedig a fial divided of 5.08 pece (: 5.08 pece), payable o 19 May 2017 to shareholders o the register o 21 April If approved by shareholders this would result i a full year divided of 9.74 pece, uchaged from. Markets ad Tradig Built ad Natural Eviromet (BNE) BNE: Europe Withi this busiess we provide a wide rage of cosultacy services to may aspects of the property ad ifrastructure developmet ad maagemet sectors ad also have a modest exposure to the oil ad gas sector i Norway. It delivered a very good result i the period, with a improved performace i the secod half (costat currecy) Fee icome ( m) Segmet profit* ( m) Margi % *after reorgaisatio costs: m; 0.5m. Those activities which assist cliets develop ew capital projects, particularly our plaig ad developmet busiess i the UK ad Irelad, cotiued to beefit both from good market coditios ad cliet cofidece. Our cliets ivestmet activity did ot appear to chage materially i the secod half as a result of the UK EU referedum. The itegratio of DBK, project maagemet cosultats, (acquired i April 2016) ito this part of the busiess has bee successful. 8 Report ad Accouts 2016

9 Strategic Report Those activities exposed to operatioal eviromets cotiued to eed to offer a efficiet, cost effective service to assist cliets i maagig tight budgets. This was particularly the case i the Netherlads, where our busiesses experieced sigificat pricig pressure. Our water busiess i the UK, however, beefited from its strog market presece ad oce agai performed well. This segmet icludes the Group s Norwegia busiess: the process of itegratig OEC (acquired November 2013) ad Metier (acquired April ) to form that coutry s leadig project maagemet cosultacy has moved forward sigificatly. This helped the busiess maage the adverse impact from the dowtur i the oil ad gas sector i that coutry. The UK decisio to leave the EU could cause disruptio to Group activities if our cliets decide to chage their ivestmet plas. It curretly appears, however, that there will be o sigificat short term effect. The Board believes this segmet is capable of deliverig further growth i BNE: North America This busiess was formed i 2013 from parts of our North America Eergy busiess providig advice i respect of ifrastructure required by Eergy cliets. As a result, it still has a sigificat exposure to the oil ad gas sector. This exposure held back progress as cliets reduced ad delayed expediture. This impacted both fee icome ad margi (costat currecy) Fee icome ( m) Segmet profit* ( m) Margi % ** after reorgaisatio costs: m; 0.2m. The acquisitio of Iris, based i Sa Fracisco, i October cotiued the process of diversifyig ito more traditioal evirometal cosultacy activities. Followig itegratio, it is ow workig successfully with GaiaTech (acquired May 2014), which operates from Chicago i a similar market. Klotz (acquired February ) performed well i the ifrastructure market i Texas. This shows the stregth ad value of our diversificatio strategy ad the speed at which it ca repositio our activities. A low level of activity ad cotiuig ucertaity i our eergy focussed busiesses is likely to hold back the performace i 2017, particularly i Caada where the market is particularly sluggish. However, our o-oil ad gas activities ow form the majority of our busiess, givig us a platform from which to achieve growth. This may over time be supported by the additioal ifrastructure ivestmet beig proposed by the ew admiistratio. Developig our busiess i the evirometal, ifrastructure ad project maagemet markets remais a Group priority ad is likely to be a focus of attetio whe we resume acquisitio activity. Eergy We cotiue to provide iteratioally recogised cosultacy services to the oil ad gas idustry from bases i the UK, USA ad Caada. The activity levels i this market declied at a uexpected pace i the first few moths of 2016 ad remaied ucertai durig much of the rest of the year. Some stability seemed to emerge towards the ed of the period. The result icluded a 7.0 millio provisio for doubtful debts. Towards the ed of 2016 a sigificat proportio of the debt provided was recovered, resultig i the reversal of provisios totallig approximately 4.2 millio (costat currecy) Fee icome ( m) Segmet profit* ( m) Margi % *after reorgaisatio costs: m; 0.9m. Respodig to the reductio i the volume of work available we reduced permaet headcout a further 33%, o top of the 19% reductio i. At the same time staff were grouped ito a smaller umber of core offices. Reorgaisatio costs of 3.6 millio were icurred i the year, maily i the first half ( 2.6 millio). We also sigificatly reduced our use of exteral subcosultats. This eabled the busiess to perform far better i the secod half producig a profit of 7.8 millio, after a recovery of 4.2 millio of debts previously provided for. Excludig both bad debt recovery ad reorgaisatio costs, i the secod half, the busiess produced a tradig margi of 10.7%. O 1 Jauary 2017 the EAME compoet of Eergy was merged with BNE: Europe ad the North America compoet merged with BNE: North America. Although the oil ad gas markets remai ucertai the secod half performace suggests the regioal Eergy busiesses will cotribute positively to both these ew segmets. rpsgroup.com 9

10 Australia Asia Pacific ( AAP ) This busiess is a combiatio of the former BNE: AAP ad the AAP compoet of Eergy. They were brought together i 2013 to help couter the impact of the slowdow i the resources sector by focusig more upo the buoyat ifrastructure sector. This strategy is workig well. We also cotiue to beefit from the developmet of our project maagemet capability, supported by the acquisitio of Poit i 2014 ad EIG i, both of which performed well i (costat currecy) Fee icome ( m) Segmet profit* ( m) Margi % *after reorgaisatio costs: m; 0.4m. Our resources busiesses i Wester Australia were faced with a shrikig market that deteriorated further i the secod half. As a result, it produced a sigificatly reduced cotributio compared with. We further reduced our cost base ad were able to relocate from our mai office i Perth to smaller premises. This ivolved a sigificat, but o recurrig, reorgaisatio cost. Our busiesses o the east coast, particularly those ivolved i the maagemet of major ifrastructure projects ad private sector developmet cotiued to operate successfully. Our work for a growig umber of Federal Govermet agecies also cotiued to expad. Our activities o the east coast give us cofidece that the busiess as a whole has a good platform to achieve further growth. Strategy ad Group Prospects As a result of the further sigificat chage i the relative scale ad cotributio of the Group s busiesses, ad the chagig ature of the global eergy market, the Board has, as outlied uder Group Activities ad Maagemet above, decided that from 1 Jauary 2017 the Group would operate ad report three multi-discipliary regioal segmets. I recet years our acquisitios i both Norway ad Australia have bee directed towards project maagemet cosultacy, particularly i respect of large scale ifrastructure projects. We see this as a importat ew activity for the Group; it reduces our depedecy o the resources sectors ad provides a more flexible busiess model tha some of our techical busiesses i other sectors. This strategy ca be developed further i all the territories i which we operate. DBK, acquired i April 2016 i the UK, is a illustratio of this. Further expasio i this market iteratioally is a attractive opportuity. The Board believes the Group s ew regioal structure provides the platform to eable RPS to retur to growth i Assumig such growth ad leverage remaiig at the curret level or reducig further, as seems likely, there would be flexibility to cosider resumig progressive divideds ad ivestmets i bolt o acquisitios to provide additioal growth i Report ad Accouts 2016

11 Strategic Report Risk Maagemet The Group supplies a wide rage of cosultacy services i may markets ad coutries, which gives rise to a rage of risks that eed to be idetified, assessed ad maaged. The maagemet of risk is ot separated from the busiess ad is treated as a itegral part of our culture ad the way we operate. Our operatig Boards cosider the risks to which they are exposed ad their mitigatio o a cotiuous basis at each of their regular meetigs ad for which purpose a structured reportig framework is i place. Agaist the backgroud of reportig from this level, the Group Executive Committee oversees the operatioal maagemet of the pricipal risks to which the Group as a whole is exposed. I tur the Group Board receives regular reportig from the Executive Committee i relatio to pricipal risks ad their mitigatio. The Group s systems of plaig, budgetig, performace review ad iteral cotrol assist with this process. I cosiderig ad challegig this iformatio the Group Board has udertake a robust assessmet of the pricipal risks facig the Group icludig those that would threate its busiess model, future performace, solvecy or liquidity. Ecoomic Eviromet The history of the Group demostrates that by far the greatest egative impact o performace results from exteral evets which are ormally related to sigificat ecoomic chages. This was clearly demostrated followig the global fiacial crisis i 2008 ad the iteratioal recessios which followed it ad the /16 oil price collapse ad the reduced volume of work available to our Eergy ad oil ad gas exposed busiesses. Adverse ecoomic chages may cause cliets to cacel, postpoe or reduce projects as well as icreasig risks associated with the recovery of debt ad work-i-progress. Although these macro-ecoomic chages are beyod our cotrol our exposure to a wide rage of markets ad geographies serves to mitigate overall risk. Ecoomic coditios i our various markets are closely reviewed i order that pre-emptive actio ca, as far as possible, be take as circumstaces chage. Our cotracted order book is moitored regularly i compariso to the productive capacity of our fee earig staff ad ecessary actios are take to reduce or icrease costs as ad whe required. Retetio of Key Persoel Iterally, experiece shows that the biggest risk we face is from losig the persoel who are resposible for maagig both cliet relatioships ad teams of staff. The Group s services are performed by well-qualified ad professioal employees with expertise across a wide rage of areas. A failure to recruit ad retai employees of appropriate calibre will, accordigly, affect our ability to meet our cliets expectatios ad correspodigly to maitai ad develop our busiess. I additio a failure to aticipate maagemet successio issues adequately may lead to discotiuity i the Group s operatios ad a correspodig dimiutio i performace. As described o pages 15 ad 16 the Group maitais competitive remueratio ad icetive structures which are reviewed ad adjusted o a regular basis. It also maitais a eviromet that is supportive of professioal developmet through traiig ad career opportuity. Board level successio plaig remais uder review by the Nomiatio Committee. Busiess Acquisitios The developmet of the Group s busiess cotiues to be supported by acquisitios. The mai risk is the failure of the acquired busiess to deliver the profit ad cash flow aticipated. This could occur if we fail to uderstad market coditios ad potetial chages i the sector, or to idetify liabilities. There is also a risk that we fail i motivatig or retaiig staff, especially key staff ad that itegratio takes loger or is more expesive tha aticipated. Detailed due diligece is performed o all potetial acquisitios drawig upo both iteral ad exteral resources ad desiged to prevet the above. This will iclude a assessmet of the ability to itegrate the acquired busiess withi the Group ad its cotrol eviromet; it caot, however, idetify macro evets which occur some years later. The itegratio of the acquisitios made i has bee successful ad work i relatio to that made i 2016 is proceedig well. Political Evets The chage ad ucertaity arisig from political evets may have a impact upo the markets i which we operate ad our ability to deliver our services to cliets. The most sigificat political risk we have faced for may years arises from the popular vote to leave the Europea Uio. Durig 2016 we beefited from the weakess i sterlig that the leave vote caused, although the impacts we might experiece i 2017 ad 2018 seem more likely to be egative if iflatio or ucertaity take hold. It is ot, however, possible to provide ay meaigful assessmet of the likely impact o Group profits ad cash flow. The US presidetial electio i 2016 also appeared to produce a sigificat chage of directio. How this will impact the markets i which we operate i the US or iteratioally is also uclear; agai this could produce both positive ad egative impacts. rpsgroup.com 11

12 The sigificat majority of the Group s services are provided i relatively stable ad predictable liberal democracies. This coupled with the rage of markets ad geographies that we serve operates to limit the impact of adverse political developmets i particular coutries. I so far as chages ca be foresee, measures ca be take to match costs to aticipated workload. The other pricipal risks faced by the Group, as listed below, are usually of sigificatly less importace i terms of the scale of impact they might have o profit. Evirometal ad Health Risks Adverse occurreces of this type may affect our ability to deliver our services ad our cliets demad for them. Our operatios have previously bee affected by evirometal evets such as Macodo oil spill i the Gulf of Mexico. No evets of this type have materially affected us i Whilst it is impossible to predict evets of this type, the wide rage of geographies ad markets that we serve should limit the impact of adverse occurreces i ay specific coutry or regio. Iformatio Systems A legthy failure or discotiuity i our IT systems could have a sigificat impact upo our operatios. The Group s IT systems are cetrally maaged with certai specific fuctios carried out locally. A aual Group pla is produced which icludes measures desiged to esure reliability ad resiliece of the Group s systems as well as appropriate disaster plaig. The Group has operatios i a large umber of locatios, which would ehace its ability to withstad ay idividual failure or malfuctio. The Group has ever experieced a sigificat failure of its systems. A successful cyber-attack upo our system could result i loss of data, disruptio to operatios or direct fiacial loss. The Group regularly experieces attempts of this ature but has ever suffered ay sigificat loss due to the effective operatio of systems ad cotrols i place. We cotiue to ivest i better IT systems, adjust our processes i respose to perceived threats ad have recruited a Security Officer. The vigilace of our fiace staff is importat ad we regularly commuicate with them about our experiece of attack ad the importace of udertakig basic checks such as idetity verificatio ad checkig to hard copy data. Health ad Safety The Group s activities require the moitorig ad maagemet of the health ad safety of its employees as well as subcotractors, cliet persoel ad the geeral public. A failure to maage this risk correctly could expose our employees ad these other groups to dagers as well as exposig the Group to potetial liabilities ad reputatioal damage. Detailed health ad safety policies ad procedures are i place throughout the Group which are desiged to idetify ad mitigate risk. These are subject to regular review to esure that ay emergig risks are idetified ad maaged. Policies ad procedures icorporate a structured reportig process which aims to esure that whe icidets do occur they are properly ivestigated ad appropriate corrective actio take. The Group s approach to the maagemet of health ad safety is described i more detail o page 16. Market Positio ad Reputatio The Group s reputatio for project delivery relies upo its public portrayal ad the perceptio of existig ad prospective cliets. A major failure of project maagemet or delivery could, accordigly, impact our ability to wi future work. The Group operates quality cotrol systems, may of which are exterally accredited ad are desiged to eable our employees to provide a cosistetly high stadard of work. Claims ad Litigatio A failure to deliver our services i accordace with our cotractual obligatios may lead to a risk of the Group becomig ivolved i litigatio. I additio, as the cotractig eviromet has evolved, cliets i some of our busiesses have sought to trasfer certai risks to the cosultats it egages. The iteral review processes operated by the Group seeks to esure that cotractual risks are properly scrutiised ad mitigated as far as possible, whilst the maagemet ad quality cotrol systems highlighted above miimise the risk of shortfalls i performace that may give rise to claims agaist the Group. Notwithstadig this, from time to time the Group receives claims from cliets agaist which appropriate professioal idemity isurace is maitaied.. 12 Report ad Accouts 2016

13 Strategic Report Compliace The Group is subject to a rage of taxatio ad legal requiremets across the various jurisdictios i which it operates. A failure to comply with these obligatios could give rise to regulatory itervetio, fiacial pealty ad reputatioal damage. The Group has i place appropriate iteral cotrols to deal with such matters ad employs appropriately qualified employees through whom it moitors ad respods to the regulatory requiremets of the coutries i which it operates. Fudig The availability of sufficiet ad appropriate fudig through the Group s bak facilities is importat to support the Group s acquisitios. The Group s pricipal bak facility is a committed multi-currecy revolvig credit facility of 150m expirig i 2020 as provided by Lloyds ad HSBC. I 2014 the Group issued seve year US private placemet otes of US$34m ad 30m repayable i 2021 uder a facility provided by Prudetial Ivestmet Maagemet Ic. Fiacial Risk Maagemet I additio to esurig the availability of sufficiet fudig the Group faces a umber of other fiacial risks which are fully described i ote 29 to the Group Fiacial Accouts o page 72. Log Term Viability Statemet I accordace with the requiremets of the UK Goverace Code the Board has assessed the log term viability of the Group. This was doe over a three year period takig accout of the risks above as well as the Group s curret positio, its strategy ad the Board s risk appetite. A three year period was chose as a realistic term over which to assess viability. The Board cosidered profit ad cash flow models based upo a rage of assumptios relatig to tradig performace ad other outflows icludig those associated with the pricipal risks the Group faces occurrig idividually ad i combiatio; this icluded severe but plausible scearios. Based o this assessmet the Directors have a reasoable expectatio that the Group will cotiue i operatio ad be able to meet its liabilities as they fall due over the period to ember rpsgroup.com 13

14 Corporate Resposibility Commitmet The Group s corporate goverace policies are described i detail elsewhere i this documet ad provide a framework withi which it seeks to achieve attractive levels of retur for its shareholders whilst balacig this objective with a recogitio of its obligatios to its employees, cliets ad society i geeral. The Board takes accout of ay sigificat evirometal, social ad goverace ( ESG ) matters i assessig the risks that the Group faces. The Executive Committee supports the Board i exercisig geeral oversight i relatio to ESG matters icludig the assessmet of the opportuities to which such issues give rise. Withi this framework the Group has adopted a geeral approach ad specific policies i relatio to its employees ad their health ad safety, the stadards through which it coducts busiess, the eviromet ad the wider commuity. These are outlied below as well as elsewhere withi this report ad are detailed more fully o the Compay s website. I the Board s view it has adequate iformatio to eable the proper assessmet of these issues ad where required traiig i such matters will be provided to Directors. It also the Board s view that the challeges, risks ad opportuities created by ESG issues as outlied herei are ulikely to chage sigificatly i the foreseeable future. The Group remais a costituet member of the FTSE4Good Idex, which cosists of those compaies that satisfy a set of globally recogised stadards i the area of corporate resposibility. It is also a participatig member of the Carbo Disclosure Project to which it provides data o a aual basis. Stadards of Busiess The Group aims to be hoest ad fair i all aspects of its busiess. Through codes of coduct employees are required to adopt high stadards of behaviour i their professioal roles. Employees are also required to be sympathetic to the cultures of ad comply with the laws ad regulatios of the coutries i which they operate, as well as givig due regard to the safety ad wellbeig of all project persoel ad relevat local commuities. All RPS employees must avoid persoal or professioal activities ad fiacial iterests that could coflict with their resposibilities to the Group. If a coflict of iterest does arise the this must be ackowledged ad reported. Employees must ot abuse their positio for persoal gai; the Group has a clearly stated ad zero tolerace policy i relatio to acts of bribery. RPS supports the Uiversal Declaratio of Huma Rights as well as the Iteratioal Labour Orgaisatio s Declaratio o Fudametal Priciples ad Rights at Work. The Group uderstads its resposibility to respect the huma rights of the commuities ad workforces with whom we iteract ad our employees are expected to coduct themselves i a maer that is respectful of such rights. The Group supports the objectives of the Moder Slavery Act ad will ot tolerate moder slavery or huma traffickig withi its ow supply chai. I that regard, it has bee reviewig its UK supply chai ad coductig a appropriate due diligece exercise. The Group will shortly publish its first moder slavery statemet i respect of the year to 31 December Commuity Ivolvemet RPS has supported a wide rage of commuity ad charitable iitiatives with gifts i kid ad fiacial cotributios throughout the year, mostly at office level. I 2016 the Group ad its staff gave or raised 944,000 i charitable cotributios (: 873,000). Takig ito accout the 368,000 (: 221,000) spet o academic bursaries ad educatioal iitiatives, the total cotributio of the Group ad its employees to the commuities i which it operates was 1,312,000 (: 1,094,000). At Group level the work of Tree Aid has cotiued to be the mai area of focus. This is i support of Tree Aid s programme of educatio, tree platig ad woodlad coservatio programmes to assist some of the poorest commuities i sub-sahara Africa. The Group cotiues to be this charity s largest corporate sposor, havig made a direct cotributio of 72,000 towards projects i Ghaa i I additio the compay s employees have through their ow fud-raisig ad voluteerig cotributed a value of approximately 18,000 to Tree Aid. This has cotiued to iclude a umber of our specialists providig techical support across a umber of disciplies o a pro boo basis. Durig the year RPS ad Tree Aid received a joit busiess charity award from Third Sector Magazie for their collaboratio o the Bogo River Trees restoratio project. The Group cotiues to be proud of its associatio with Tree Aid ad the valuable cotributio made by its employees. 14 Report ad Accouts 2016

15 Strategic Report Employmet The curret profile of the Group s employees preseted i accordace with the Group s segmetatio durig the year ad the chages over that period are as detailed below. Group 2016 Average umber of employees Built ad Natural Eviromet Europe 3,220 3,045 Built ad Natural Eviromet North America Eergy Australia Asia Pacific Cetral Group total 5,099 5,054 Employmet statistics Days abset (%) 2 3 Average legth of service (years) 7 7 Workig part time (%) Retetio rate (%)* Female 1,530 1,516 Male 3,569 3,538 Female (%) Male (%) Age profile % Employees aged uder Employees aged Employees aged Employees aged * Excludig redudacies. The recruitmet, retetio ad motivatio of high calibre employees is of strategic importace for the Group ad as highlighted i the Risk Maagemet sectio above represets a area of pricipal risk. Each of the Group s busiesses therefore maitais appropriate ad flexible remueratio structures as well as a eviromet i which employees are able to develop their skills i a way that ca be applied to cliets projects. These arragemets may differ accordig to jurisdictio ad the ature of the specific busiess but work withi a framework that is set by each of the Segmetal Boards ad oversee at Group level. The Chief Executive has overall resposibility for the developmet of huma resource practice at Group Board level. Huma resource professioals are employed throughout the Group to support the objectives of each busiess ad esure that best practice is followed wherever possible. The geder profile of the Group s employees is show i the table above. Of the seior maagemet group that is comprised of Directors of the compaies that are icluded i the Group cosolidatio, 34 are male ad 2 are female. As the Group largely operates i sectors which are male domiated, its ability to recruit female fee earig staff is sigificatly limited by the employmet applicatios it receives. This is ot expected to chage i the short or medium term ad the Group iteds to maitai a policy of employig the best available staff irrespective of geder. Buildig a eviromet i which employees feel egaged with their busiess ad the Group as a whole is of great importace ad i particular to esure the successful itegratio of ewly acquired busiesses. The Group itraet is used as a meas to commuicate developmets ad achievemets from withi the Group as well as policies ad procedures. Corporate ewsletters also facilitate this flow of iformatio. New employees receive a iductio ad staff appraisals facilitate ope commuicatio betwee employer ad employee as well as idetifyig developmetal eeds. rpsgroup.com 15

16 The Group operates share plas across all its busiesses aimed at givig employees a tagible iterest i the Group s overall performace. Share purchase plas are accordigly ope to the vast majority of employees ad eable them to purchase shares i the Compay with the beefit of a matchig share cotributio from the Compay. A performace share pla is also operated for more seior employees, which offers the potetial to build a persoally sigificat iterest i the Compay over a umber of years. The Group is committed to the traiig ad developmet of its employees to eable them to realise their potetial ad effectiveess. Divisioal Directors ad project maagers are resposible for the maagemet of traiig ad verificatio of techical competece for project persoel i accordace with our quality maagemet systems. Cotiuig professioal developmet is of particular importace for professioal employees who are required to demostrate techical competece withi their specific sectors. Give the breadth of professioal ad techical areas i which the Group is egaged this ivolves supportig traiig schemes ad cotiuig professioal developmet across a rage of disciplies both i-house ad through professioal bodies. Durig 2016 RPS cotiued its log-term practice of supportig staff i pursuig relevat higher educatio courses. This ivolved sposorig courses at uiversities ad colleges across the Uited Kigdom, Irelad, The Netherlads, USA ad Australia. Vacat positios withi the Group are, wherever possible, filled from withi. RPS provides equal opportuities for all its employees ad potetial employees regardless of their sex, sexual orietatio, trasgeder status, religio or belief, marital status, civil partership status, pregacy, age, disability, race, colour, atioality, atioal or ethic origis. The policy applies to the process of recruitmet ad selectio, promotio, traiig ad developmet, coditios of work, pay ad beefits ad to every other aspect of employmet. Health ad Safety The health ad safety of employees ad others it may affect is of paramout importace to the Group ad it remais committed to good practice that as a miimum complies with the requiremets of law. The Group sets the overall framework ad stadards for the maagemet of health ad safety. Withi this cotext each of the Group s busiesses is resposible for the developmet of appropriate safe workig coditios ad systems to protect employees, cotractors, visitors ad others who may be affected by the Group s activities. These will differ withi various parts of the Group depedig o the ature of the activities beig udertake. Where appropriate, work activities are assessed for health ad safety risks ad appropriate mitigatio measures ad cotrols put i place. Employees are traied to esure that they have the appropriate skills to carry out their job safely ad seior maagemet are traied to esure that obligatios to employees for whom they are resposible are properly discharged. The Group s busiesses have appropriately qualified health ad safety advisors to develop ad implemet these systems. Health ad safety systems are also subject to regular review ad audit. Health ad safety issues ad performace are reported to ad reviewed by all operatig Boards at each meetig. This icorporates a system for reportig all ear misses, accidets, dagerous occurreces ad work-related diseases. All such icidets are ivestigated to determie the root cause ad wherever possible actio is take to mitigate the risk of recurrece. The Group Board receives ad reviews a report at every meetig which summarises health ad safety performace across the Group as well as detailig ay sigificat icidets ad emergig issues. OHSAS is a iteratioally recogised stadard for health ad safety maagemet that is aliged with the ISO 9000 (Quality Maagemet) ad ISO (Evirometal Maagemet) stadards. 61% (: 40%) of employees across the Group work i offices that ow have third party accreditatio to the OHSAS stadard. The reportable accidet rate i the year was 1.8 accidets per 1,000 employees (: 2.2). Accidets that do occur most commoly relate to field staff ad ivolve maual hadlig activities, slips ad falls. Reportable Accidet Rates Group 2016 Reportable ijuries Reportable ijuries icidet rate per 1,000 employees Report ad Accouts 2016

17 Strategic Report Evirometal Maagemet ad Climate Chage As oted i the Risk Maagemet sectio of this report, evirometal issues are most likely to affect the Group through the impact material adverse evets may have o its tradig. Whilst give the ature of its activities the Group s ow impact o the eviromet is comparatively modest, policies ad stadards are i place, which aim to miimise this impact wherever possible. The Group ca, however, make a greater cotributio to the eviromet through its ow expertise ad may of the projects with which it is ivolved. It advises iteratioal bodies, govermets, local authorities ad compaies o the improvemet of evirometal performace. Projects iclude the developmet of strategies to reduce carbo emissios ad the adaptatio of buildigs ad ifrastructure to aticipate climate chage as well as the preparatio of Evirometal Impact Assessmets across several sectors. The Group edeavours to: comply with all relevat atioal ad regioal legislatio as a miimum stadard; comply with relevat codes of practice ad other requiremets such as those specified by regulators ad our cliets; employ practical eergy efficiecy ad waste miimisatio measures; ad provide a iter-office IT etwork together with commuicatios ad video coferecig techology that reduces busiess travel. To achieve these objectives appropriate traiig is provided where required to eable activities to be coducted i a evirometally sesitive maer ad sufficiet maagemet resources are allocated to eable effective implemetatio of policies. A umber of the Group s operatig busiesses have achieved ISO14001, the iteratioally recogised evirometal maagemet system stadard. Durig may of our offices cotiued to recycle waste paper, spet toer ad ik cartridges, obsolete computer hardware, priters ad mobile phoes. Greehouse Gas Reportig For the reportig year to ember 2016 the Group has used the 2016 UK Govermet Coversio Factors for Compay Reportig ad for iteratioal offices the Iteratioal Eergy Agecy CO 2 Emissios from Fuel Combustio, OECD/IEA, Paris, 2016 guidace. Greehouse gas emissios are reported usig the followig parameters to determie what is icluded withi the reportig boudaries i terms of RPS eergy cosumptio. Scope 1 direct emissios iclude ay gas data ad fuel use for compay owed vehicles. Fugitive emissios from air coditioig are icluded where it is the Group s resposibility withi teated buildigs. Scope 2 idirect eergy emissios iclude purchased electricity throughout the compay operatios. Greehouse gas emissios (tco2e) are set out i the table below Scope 1: Direct emissios 9,399 8,122 Scope 2: Idirect emissios 4,106 4,516 Total 13,505 12,638 The icrease i Scope 1 emissios is largely attributable to the year o year growth i the UK based RPS Water busiess ad a correspodig growth i the size of its vehicle fleet. The Group has set a target to reduce per capita office eergy cosumptio by 2.5% per aum o a five year rollig average basis. Usig this approach the five year rollig average up to was 3.45 MWh per capita which decreased to 3.12 MWh per capita for the five year rollig average to 2016, equatig to a decrease of 2.1% per aum. The Group s policies ad objectives for evirometal maagemet are reviewed from time to time i the light of chages withi the Group s busiesses, ew legislatio ad emergig practice. The Strategic Report was approved by the Board ad siged o its behalf by Ala Heare Chief Executive 2 March 2017 rpsgroup.com 17

18 The Board Ke Lever No-Executive Chairma Ke Lever joied the Board i November 2016 as Group Chairma. Ke is a Chartered Accoutat ad his previous experiece icludes spells as Fiace Director of Alfred McAlpie Plc, Albright ad Wilso Plc ad Tomkis Plc. Prior to that he was a parter at Arthur Aderse. He was Chief Executive of XChagig Plc betwee 2010 ad ad curretly holds No-Executive positios at Biffa Plc, Blue Prism Group Plc, Gresham House Strategic Plc ad Vertu Motors Plc. Ke is Chairma of the Nomiatio Committee. Dr Ala Heare Chief Executive Ala Heare holds a degree i ecoomics ad a doctorate i evirometal plaig. Followig a period of academic research ito evirometal plaig he joied RPS i 1978, becomig a Director i 1979 ad Chief Executive i Ala was the plc Etrepreeur of the Year i 2001 ad was made a Compaio of the Istitute of Maagemet i He also became a member of the Board of the Compaios i 2007, a fellow of Asto Busiess School i 2006 ad a hoorary Doctor of the Uiversity of Ket i Gary Youg Fiace Director Gary Youg graduated from Southampto Uiversity i 1982 ad qualified as a Chartered Accoutat i 1986 with Price Waterhouse. Before joiig RPS he held a umber of fiace director roles icludig positios withi Rutlad Trust plc ad AT&T Capital. He joied RPS i 2000 ad was appoited to the Board later that year. Robert Miller-Bakewell Idepedet No-Executive Director Robert joied the Board i 2010 ad is servig a third three-year term. Robert was a Seior Director of Ivestmet Research at Merrill Lych from 1998 to 2008 ad prior to this worked as a ivestmet aalyst with NatWest Markets ad its predecessor compaies. Over the previous twety years his focus was o aalysig ad advisig water, waste, trasport ad evirometal ifrastructure compaies both i the UK ad iteratioally. He has also served as a member of OFWAT s Future Regulatio Pael. Robert is Chairma of the Remueratio Committee as well as beig a member of the Audit ad Nomiatio Committees ad Seior Idepedet Director. Louise Charlto Idepedet No-Executive Director Louise was appoited to the Board i 2008 ad is servig a third threeyear term. She is Vice-Chairma of Bruswick Group LLP, the iteratioal corporate commuicatios group of which she was a co-fouder. Louise also serves o the Board of Bruswick Arts, a iteratioal strategic commuicatios cosultacy specialisig i the cultural sector ad Merchat Catos, a leadig creative commuicatios agecy. She has also served as a Director ad Trustee of the Natural History Museum. Louise is a member of the Remueratio ad Nomiatio Committees. Joh Beett Idepedet No-Executive Director Joh served as a No-Executive Director betwee 2006 ad ad was re-appoited i that role i April He is a Chartered Accoutat with 30 years experiece i the house buildig idustry. He was Fiace Director of Westbury plc, util it was acquired i early He has wide experiece of fiacial maagemet, capital ad debt raisig, acquisitios ad ivestor relatios, havig played a leadig role i the strategic developmet of Westbury ito a top te volume house builder i the UK. Joh was re-appoited to the Board for a maximum period of two years. He is Chairma of the Audit Committee ad a member of the Nomiatio ad Remueratio Committees. 18 Report ad Accouts 2016

19 Maagemet & Goverace Report of the Directors The Directors preset their report together with the audited fiacial statemets of RPS Group Plc ad its subsidiary udertakigs (the Group ) for the year eded ember Directors The Directors of the Compay as at ember 2016 were those listed o page 18. Adrew Page, Phil Williams ad Brook Lad retired as Directors o 26 April 2016, 30 September 2016 ad 31 October 2016 respectively. Joh Beett was appoited as a Director o 27 April 2016 ad Ke Lever was appoited o 1 November There were o other chages to the Board durig the year. The Directors iterests i the share capital of the Compay are as show i the Aual Report o Remueratio o page 92. Noe of the Directors was materially iterested i ay sigificat cotract to which the Compay or ay of its subsidiaries were party durig the year. Results ad divided The Cosolidated Icome Statemet is set out o page 37 ad shows the profit for the year. The Directors recommed a fial divided of 5.08p (: 5.08p) per share. This together with the iterim divided of 4.66p (: 4.66p) per share paid o 14 October 2016 gives a total divided of 9.74p (: 9.74p) per share for the year eded ember Strategic Report The Group s Strategic Report ca be foud o pages 3 to 17 ad icludes iformatio as to the likely future developmet of the Group. Fiacial key performace idicators ca be foud o page 8. The Directors review performace usig these ostatutory measures as well as segmetal ad uderlyig profit, as they cosider the former to be more reflective of the way the busiess is maaged ad viewed by the ivestmet commuity. These performace measures are defied i ote 1(g) of the Cosolidated Fiacial Statemets. Note 3 icludes a Group Recociliatio of the adjusted measures to the statutory results. The Board does ot use o-fiacial key performace idicators to assess the Group as a whole, although parts of the Group do use such idicators from time to time. The Strategic Report cotais certai forward lookig statemets with respect to the fiacial coditio, results of operatios ad busiesses of RPS. These statemets ivolve risk ad ucertaity because they relate to evets ad deped upo circumstaces that may occur i the future. There are a umber of factors that could cause actual results or developmets to differ materially from those expressed or implied by these forward lookig statemets. The Strategic Report icludes iformatio as to likely future developmets i the busiess of the Group. Nothig i the Strategic Report should be costrued as a profit forecast. Cosistet with its size ad complexity, the Group has a large umber of cotractual relatioships with cliets ad suppliers. I the Directors view, however, there is o sigle cotract or cliet relatioship, which is essetial to the Group s busiess. The Group s subsidiary udertakigs are listed i ote 6 to the Paret Compay Fiacial Statemets. Corporate Goverace The Directors report o corporate goverace ca be foud o pages 23 to 28 ad icorporates other parts of the Report ad Accouts as detailed therei. Employees The Group s policies i relatio to employees are disclosed o page 15. Corporate Resposibility The Group s corporate resposibility statemet is icluded o pages 14 to 17. This icludes the disclosures cocerig greehouse gas emissios that are required pursuat to part 7 of The Compaies Act (Strategic Report ad Directors Report) Regulatios The Group made o cotributio to political orgaisatios durig the year. rpsgroup.com 19

20 Substatial shareholdigs The Compay is aware of the followig iterests i excess of 3% of the ordiary share capital of the Compay as at 28 February No. of shares Percetage Aberforth Parters 22,521, Schroder Ivestmet Maagemet 12,429, UBS Asset Maagemet 12,386, Neptue Ivestmet Maagemet 11,338, Majedie Ivestmet Maagemet 8,561, BlackRock 6,892, Goig cocer The Group s busiess activities, a review of the 2016 results together with factors likely to affect its future developmet ad prospects are set out o pages 7 to 10. Note 16 to the Cosolidated Fiacial Statemets sets out the borrowigs of the Group ad cosiders liquidity risk, whilst ote 29 describes the Group s approach to capital maagemet, ad fiacial risk maagemet i geeral. The Group has a diverse rage of busiesses i a spread of geographies which serve to limit the overall impact of adverse coditios i ay particular market. I this regard ad otwithstadig the scale of the dowtur i the Group s Eergy busiess, the Group cotiues to ejoy strog cash flow ad operates well withi the fiacial coveats applyig to its mai bak facility. The Group s bak facilities were reewed durig ad will ot expire util July The Directors have a reasoable expectatio that the compay has adequate resources to cotiue i operatioal existece for the foreseeable future. They therefore cotiue to adopt the goig cocer basis of accoutig i preparig the aual fiacial statemets. The Group s Log Term Viability Statemet is show o page 13. Directors resposibilities statemet The Directors are resposible for preparig the Aual Report ad the fiacial statemets i accordace with applicable law ad regulatios. Each of the persos who is a Director at the time of this report cofirms that so far as he or she is aware there is o relevat audit iformatio of which the Compay s auditor is uaware ad that he or she has take all the steps that he or she ought to make himself or herself aware of ay relevat audit iformatio ad to establish that the Compay s auditor is aware of that iformatio. This cofirmatio is give ad should be iterpreted i accordace with the provisios of s.418 of the Compaies Act Compay law requires the Directors to prepare fiacial statemets for each fiacial year. Uder that law the Directors are required to prepare the Group fiacial statemets i accordace with Iteratioal Fiacial Reportig Stadards (IFRSs) as adopted by the Europea Uio ad Article 4 of the IAS Regulatio ad have elected to prepare the paret compay fiacial statemets i accordace with Uited Kigdom Geerally Accepted Accoutig Practice (Uited Kigdom Accoutig Stadards ad applicable law) icludig FRS102 The Fiacial Reportig Stadard Applicable i the UK ad Republic of Irelad. Uder compay law the Directors must ot approve the accouts uless they are satisfied that they give a true ad fair view of the state of affairs of the compay ad of the profit or loss of the compay for that period. Group Fiacial Statemets I preparig the Group fiacial statemets, Iteratioal Accoutig Stadard 1 requires that Directors: properly select ad apply accoutig policies; preset iformatio, icludig accoutig policies, i a maer that provides relevat, reliable, comparable ad uderstadable iformatio; provide additioal disclosures whe compliace with the specific requiremets i IFRSs are isufficiet to eable users to uderstad the impact of particular trasactios, other evets ad coditios o the etity s fiacial positio ad fiacial performace; ad make a assessmet of the compay s ability to cotiue as a goig cocer. Paret Compay Fiacial Statemets I preparig the paret compay fiacial statemets, the Directors are required to: select suitable accoutig policies ad the apply them cosistetly; 20 Report ad Accouts 2016

21 Maagemet & Goverace make judgmets ad accoutig estimates that are reasoable ad prudet; state whether applicable UK Accoutig Stadards have bee followed, subject to ay material departures disclosed ad explaied i the fiacial statemets; ad prepare the fiacial statemets o the goig cocer basis uless it is iappropriate to presume that the compay will cotiue i busiess. The Directors are resposible for keepig adequate accoutig records that are sufficiet to show ad explai the compay s trasactios ad disclose with reasoable accuracy at ay time the fiacial positio of the compay ad eable them to esure that the fiacial statemets comply with the Compaies Act They are also resposible for safeguardig the assets of the compay ad hece for takig reasoable steps for the prevetio ad detectio of fraud ad other irregularities. The Directors are resposible for the maiteace ad itegrity of the corporate ad fiacial iformatio icluded o the compay s website. Legislatio i the Uited Kigdom goverig the preparatio ad dissemiatio of fiacial statemets may differ from legislatio i other jurisdictios. Resposibilities pursuat to DTR4 We cofirm that to the best of our kowledge: the fiacial statemets, prepared i accordace with the relevat fiacial reportig framework, give a true ad fair view of the assets, liabilities, fiacial positio ad profit or loss of the Compay ad the udertakigs icluded i the cosolidatio take as a whole; the strategic report icludes a fair review of the developmet ad performace of the busiess ad the positio of the compay ad the udertakigs icluded i the cosolidatio take as a whole, together with a descriptio of the pricipal risks ad ucertaities that they face; ad the aual report ad fiacial statemets, take as a whole, are fair, balaced ad uderstadable ad provide the iformatio ecessary for shareholders to assess the Compay s performace, busiess model ad strategy. Fiacial istrumets Details o the use of fiacial istrumets ad fiacial risk are icluded i ote 16 ad ote 29 to the Cosolidated Fiacial Statemets. Post balace sheet evets There are o sigificat post balace sheet evets to report. Takeover Directive The followig additioal iformatio is provided for shareholders pursuat to the requiremet of the Takeover Directive. As at ember 2016 the Compay s issued share capital cosisted of 223,435,014 ordiary shares of 3p each. At a geeral meetig of the Compay every holder of ordiary shares preset i perso is etitled to vote o a show of hads ad o a poll every member preset i perso or by proxy ad etitled to vote has oe vote for every ordiary share held. There are o shares i issue that carry special rights with regard to cotrol of the Compay. There are o restrictios o the trasfer of ordiary shares i the Compay other tha those that may be imposed by law or regulatio from time to time. The Compay s Articles of Associatio may be ameded by special resolutio at a geeral meetig of the shareholders. Directors are appoited by ordiary resolutio at a geeral meetig of the shareholders. The Board ca appoit a Director but ayoe so appoited must be elected by a ordiary resolutio at the ext geeral meetig. Uder the Articles of Associatio ay Director who has held office for more tha three years sice their last appoitmet must offer themselves for re-electio at the ext aual geeral meetig. It is the Compay s policy, however, that all Directors should stad for aual re-electio. The Directors have power to maage the Compay s busiess subject to the provisio of the Compay s Articles of Associatio, law ad applicable regulatios. The Directors have power to issue ad buy back shares i the Compay pursuat to the terms ad limitatios of resolutios passed by shareholders at each aual geeral meetig of the Compay. No such power was exercised durig the year uder review. Directors iterests i the share capital of the Compay are show i the table o page 92. Substatial shareholder iterests of which the Compay is aware are show o page 20. Listig Rule 9.8.4C The followig disclosure is required pursuat to listig rule 9.8.4C. A arragemet is i place whereby the trustee of the Compay s employee beefit trust has agreed to waive preset ad future divided rights i respect of certai shares that it holds. There are o other matters requirig disclosure required pursuat to this listig rule. rpsgroup.com 21

22 Aual Geeral Meetig The Aual Geeral Meetig will be held o 2 May The Notice of Aual Geeral Meetig circulated with this Report ad Accouts cotais a full explaatio of the busiess to be coducted at that meetig. This icludes a resolutio to re-appoit Deloitte LLP as the Compay s Auditor. By order of the Board Nicholas Rowe Secretary 2 March 2017 Registered Office: 20 Wester Aveue Milto Park Abigdo Oxfordshire OX14 4SH Registered i Eglad No Report ad Accouts 2016

23 Maagemet & Goverace Corporate Goverace UK Corporate Goverace Code The Board is pleased to report that throughout the year the Compay complied with all provisios of the UK Corporate Goverace Code (the Code ) as applicable to a small market capitalisatio compay. The Chairma s Statemet which appears o pages 3 ad 4 icludes a sectio relatig to Corporate Goverace ad provides cotext to this detailed report. Board Resposibilities The Board has a schedule of matters that are reserved for its decisio, icludig: determiatio of the Group s overall strategy the approval of sigificat acquisitios ad disposals the approval of aual targets ad fiacial reportig icludig aual ad half year results ad iterim maagemet statemets the recommedatio ad approval of divideds ad other capital distributios the approval of policies ad systems for risk maagemet ad assurace the appoitmet of key advisers to the Group the approval of major items of capital expediture the settlemet of major litigatio. Board Structure At the date of this report the Board comprised two Executive Directors, three No-Executive Directors ad the Chairma. Adrew Page retired as a No-Executive Director o 26 April 2016 ad Phil Williams retired as a Executive Director o 30 September Joh Beett was appoited as No-Executive Director o 27 April Ke Lever was appoited as Group Chairma o 1 November at which time Brook Lad stood dow from the Board. The Executive Directors are resposible for the day-to-day maagemet of all the Group s busiess activities. The No-Executive Directors are, i the opiio of the Board, all idepedet of maagemet ad cotribute idepedet judgemet as well as brigig extesive kowledge ad experiece to the proceedigs of the Board. I particular the Board is of the view that Joh Beett, who havig previously served for ie years ad was reappoited as a No-Executive Director durig the year, satisfies this test of idepedece. The Chairma ad the No-Executive Directors are geerally appoited for three-year terms, which may subsequetly be exteded. Joh Beett was re-appoited to the Board o the basis that he would serve for a maximum term of two years. Ay term beyod six years for a No-Executive is rigorously reviewed, takig accout of the requiremet to refresh the Board. Ke Lever ad Joh Beett havig both bee appoited durig the year will be subject to electio at the forthcomig Aual Geeral Meetig. All Directors are subject to aual re-electio by shareholders. The Chairma ad Chief Executive have clear ad distict roles. The Chairma provides leadership to the Board of Directors ad is resposible for its overall effectiveess. This will iclude esurig that all Directors are properly briefed i order to take a full ad costructive part i Board discussios. The Chairma will meet regularly with major shareholders i order to uderstad their views ad seek their iput o specific matters. The Chief Executive is resposible for all executive maagemet matters withi the Group. This icorporates the developmet of Group Strategy, fiacial targets ad busiess plas havig regard to the iterests of the Group s shareholders, cliets ad employees. The Seior Idepedet Director is available to shareholders who wish to raise cocers that caot be resolved through the Chairma, Chief Executive or Fiace Director. Robert Miller-Bakewell acted as the Seior Idepedet Director throughout the year. The Board is assisted by the Audit, Remueratio ad Nomiatio Committees. The Chairma of each Committee provides updates as to its activities at Board meetigs. rpsgroup.com 23

24 The table below shows the umber of Board ad Committee meetigs atteded by each of the Directors durig the year. Full Board Audit Committee Remueratio Committee Nomiatio Committee Ke Lever* 1 1 Brook Lad* 7 2 Ala Heare 8 Gary Youg 8 Phil Williams* 6 Joh Beett* Louise Charlto Robert Miller-Bakewell Adrew Page* Number of meetigs held * served for part year oly Board Operatios The Board geerally meets eight times aually, although additioal meetigs may be held should circumstaces require. The Board ageda gives sigificat focus to busiess performace ad strategy balaced by cosideratio of emergig risks ad the cotrol eviromet. Comprehesive papers are circulated well i advace of Board meetigs which iclude geeral updates ad briefigs o sigificat issues from the Chief Executive, the Fiace Director ad the Compay Secretary. These regular reports ad other matters of immediate importace are discussed at each meetig. The Compay Secretary assists the Chairma i esurig that Board procedures are followed ad advises o matters of Corporate Goverace. The services of the Compay Secretary are available to Directors geerally. Outside of Board meetigs the Chairma has regular idividual discussios with all Directors. The No-Executive Directors hold meetigs with the Chairma without the Executives preset at least twice a year. The Executive Committee, which has historically cosisted of the Executive Directors supported by the Compay Secretary, meets regularly throughout the year ad has overall resposibility for all operatioal matters withi the Group, subject to those matters that remai reserved for the Board. With effect from 1 Jauary 2017 the Executive Committee has bee elarged to iclude the Group s three Regioal Busiess Leaders. The miutes of all Executive Committee meetigs are circulated to the No-Executive Directors. Where Directors have cocers that caot be resolved regardig the maagemet of the Compay or a proposed actio, these cocers are recorded i the Board miutes. I accordace with Compay policy ay cocers expressed by a Director o resigatio are provided, i a writte statemet, to the Chairma for circulatio to the Board. No matters of this ature have arise durig the year. The Compay s Articles of Associatio cotai provisios that allow Directors to authorise coflicts i accordace with the Compaies Act These provisios eable the Directors to authorise a coflict, subject to such terms as they may thik fit, which may iclude exclusio from votig i respect of the relevat issue ad exclusio from iformatio ad discussio relatig to the matter. The procedure approved by the Board for authorisig coflicts remids Directors of the eed to cosider their duties as Directors ad ot to grat a authorisatio uless they believe, i good faith, that this would be likely to promote the success of the Compay. A potetially coflicted Director caot vote o such a authorisig resolutio or be couted i a quorum for that purpose. Ay authority grated may be termiated at ay time ad the Director is iformed of his obligatio to iform the Compay without delay should there be ay chage i the ature of the coflict previously authorised. I additio, the Board requires the Nomiatio Committee to check that ay idividual it omiates for appoitmet to the Board is free of ay potetial coflict of iterest. There is a agreed procedure for Directors to take idepedet professioal advice ad traiig at the Compay s expese. The Compay maitais Directors ad Officers liability isurace with a curret limit of idemity of 20m. The Group s strategy ad its busiess model are described o pages 5 ad 6. Board Performace The Board udertakes a aual appraisal of its performace. Followig his appoitmet as Group Chairma, Ke Lever udertook a iitial review of the operatio ad effectiveess of the Board. For this purpose Mr. Lever egaged with all of the Compay s Directors across a rage of topics to ascertai their opiios. No material matters of immediate cocer arose. No-Executives, led by the Seior Idepedet Director, meet o a aual basis to appraise the Chairma s performace. 24 Report ad Accouts 2016

25 Maagemet & Goverace O appoitmet Directors receive iformatio o the Compay as well as the Board ad its procedures. They also meet other members of the Board to be briefed o strategy, fiacial matters ad other key issues. Advice is available from the Compay s solicitors, auditors ad brokers if required. Durig the year updates are provided o key techical issues as required icludig those relatig to corporate goverace ad corporate social resposibility. No-Executive Directors periodically udertake visits to operatig compaies ad atted their Board meetigs i order to improve their uderstadig of the issues facig the Group s busiesses. Commuicatio The Compay attaches great importace to commuicatio with its shareholders ad other stakeholders. I additio to regular fiacial reportig the Group website provides up-to-date iformatio about its orgaisatio, the services it offers ad ewsworthy subjects. The Compay also respods to equiries from shareholders ad others with a iterest i the Group. I additio to presetatios of full ad half-year results, the Executive Directors hold meetigs with the Compay s pricipal shareholders to discuss the Compay s strategy ad performace. The Chairma ad Seior Idepedet Director also meet with major shareholders. A ivestor relatios report is preseted at all regular Board meetigs to esure that the Board is kept aware of the views of larger shareholders ad the ivestmet commuity geerally. The Chairma of each of the Board Committees atteds the Aual Geeral Meetig ad is available to aswer questios. Audit ad iteral cotrols The respective resposibilities of the Directors ad the idepedet auditors i coectio with the accouts are explaied o pages 20 to 21 ad 36 ad the statemet of the Directors i respect of goig cocer appears o page 20. The log term viability statemet is set out o page 13. The Board has throughout the year ad up to the date of approval of the fiacial statemets had procedures i place as recommeded i the guidace i the UK Corporate Goverace Code ad the supportig documet issued by the Fiacial Reportig Coucil Guidace o Risk Maagemet, Iteral Cotrol ad Related Fiacial ad Busiess Reportig. The pricipal risks to which the Group is exposed ad the measures to mitigate such risks are described o pages 11 to 13. The Board is resposible for the Group s systems of risk maagemet ad iteral cotrol, which are desiged to provide reasoable but ot absolute assurace agaist material misstatemet or loss. This subject is kept uder ogoig review ad the Board receives ad cosiders regular reports relatig to the Group s system of risk maagemet ad iteral cotrol. I additio a detailed review of the Group s system of iteral cotrol ad risk maagemet was udertake by the Audit Committee durig the year, the outcome of which was reported to ad discussed with the Board. The Audit Committee ad the Board were satisfied that the systems i place are appropriate ad effective. The key procedures that the Directors have established to provide effective iteral fiacial cotrols are as follows. Fiacial reportig The results for the Group are reported to ad reviewed at each Board meetig. A detailed formal budgetig process for all Group busiesses culmiates i a aual Group budget which is approved by the Board. Fiacial ad accoutig priciples ad iteral fiacial cotrols assurace The Group s accoutig policies, priciples ad miimum stadards required for effective fiacial cotrol are commuicated to all accoutig teams. The Group Fiace fuctio udertakes periodic detailed reviews at key cetres withi the Group to esure that policies ad procedures are beig followed as well as to idetify ay cotrol weakesses or failigs. Capital ivestmet The Group has clearly defied guidelies for capital expediture. These iclude detailed appraisal ad review procedures as well as due diligece procedures i respect of potetial busiess acquisitios. Treasury The Group operates a cetral treasury fuctio that udertakes required borrowig ad foreig exchage trasactios as well as the daily moitorig of bak balaces ad cash receipts. Appropriate paymet authorisatio processes are i place i all parts of the Group. Delegated Authorities A system of delegated authorities, whereby the icurrig of expediture ad assumptio of cotractual commitmet ca oly be approved by specified idividuals ad withi pre-defied limits, is i place throughout the Group. rpsgroup.com 25

26 Review ad reportig Iteral cotrols ad i particular ay failures are reported to ad reviewed at Group ad operatig Board meetigs i order that chages to systems ca be implemeted where required. I additio the Audit Committee maitais a brief to keep the overall systems of iteral cotrol uder review. Although the Group does ot at preset operate a distict iteral audit departmet, it does, through a Group Assurace Maager, udertake a structured programme of cotrol reviews at its various operatig compaies. Audit Committee The Audit Committee curretly comprises two Idepedet No-Executive Directors, Joh Beett ad Robert Miller-Bakewell. Adrew Page served as a member of the Committee ad as its Chairma util his retiremet from the Board. Joh Beett assumed the role as Chairma o his appoitmet to the Committee i April The Committee has writte terms of referece which are available o the Compay s website ad o request from the Compay Secretary. Although the Board cosiders that both members of the Committee have experiece that is relevat to the role, Joh Beett is the member of the Committee idetified as havig recet ad relevat fiacial experiece. The Committee holds three regular meetigs durig the year, oe to cosider audit plaig ad oe to coicide with each of the publicatio of Group s aual ad iterim fiacial results. Other matters which fall withi the Committee s terms of referece are icluded o the agedas of these meetigs as required. At its aual plaig meetig i September the Committee reviews ad approves plas with the Auditors icludig the locatios to be audited as well as the scope ad key areas of audit focus. At the coclusio of the audit the Committee reviews the itegrity of the Group s fiacial statemets ad the report ad accouts as a whole prior to their submissio to the Board. This review icludes esurig that statutory ad associated legal ad regulatory requiremets are met as well as cosiderig sigificat reportig judgemets, the adoptio of appropriate accoutig policies ad practices ad compliace with accoutig stadards. I respect of the year uder review the Committee cosidered the followig sigificat issues i relatio to the fiacial statemets ad i each case addressed these as idicated. Itagible assets This classificatio of assets is by far the largest o the Group balace sheet ad as such receives careful attetio from the Board ad Committee which eed to be satisfied that its carryig value is appropriate. Goodwill impairmet testig was udertake o the November balace sheet. The Board ad Committee cosidered the appropriateess of the cash geeratig uits for goodwill testig ad the assumptios ad estimates used i the modellig, icludig approved budgets for The coclusio was that o impairmet was ecessary. Cosideratio was also give as to whether there were ay idicators of impairmet i respect of other itagible assets. The Board ad Committee agreed that o idicators of impairmet exist. Acquisitio accoutig Oe acquisitio was completed i the year ad estimates are made with respect to the fair value of the et assets acquired ad the cosideratio trasferred. The valuatio work udertake uses a spreadsheet model costructed with the help of valuatio experts ad the iputs to the model are derived from data provided by the etity acquired ad from recogised sources or usig prior experiece. The Group Fiace Director preseted a paper to the Audit Committee o this subject i respect of the acquisitio ad the Committee agreed with ad approved the valuatios made. Recoverability of trade debtors ad accrued Icome The risk that trade debtors ad accrued icome may ot be collected ad therefore may be overstated i the accouts is cosidered by the Board at its regular meetig whe it reviews busiess performace. The reports prepared for those meetigs cotai age profile iformatio by segmet ad cosider specific issues i more detail as ecessary. The Board reviewed a detailed paper preseted by the Group Fiace Director o debtors ad accrued icome as at the ed of September ad cocluded that trade receivables were the appropriately stated. The Board received a update paper i respect of trade receivables withi the Eergy segmet as at the year ed ad cocluded that they were appropriately stated at that poit. The Committee appreciates that there is estimatio applied i the recogitio of reveue but does ot cosider this to be a key area of risk. The umber of projects udertake at ay time is large ad there are relatively few that are idividually material. The procedures i place for recogisig reveue are well established ad comprehesive fiacial review of mothly results provides a good level of assurace. 26 Report ad Accouts 2016

27 Maagemet & Goverace Followig the review coducted by the Audit Committee ad its ow cosideratio, the Board was able to coclude that the Report ad Accouts for 2016, take as a whole, is fair, balaced ad uderstadable as well as providig the iformatio ecessary for shareholders to assess the Group s performace, busiess model ad strategy. I reachig this coclusio the Board was satisfied that the Group s performace across its segmets, as well as its busiess model, strategy ad the key risks that it faces are clearly explaied i the relevat sectios of the Report ad Accouts. The Audit Committee keeps the scope, cost ad effectiveess of the exteral audit uder review. The Committee reviews the effectiveess of the aual audit prior to makig recommedatios as to the aual re-appoitmet of Auditors. To facilitate this process the Group Fiace Director cavasses the views of the Group s operatig compaies o the coduct of the audit. He the reports this feedback to the Committee as well as the performace of the Auditors at Group level. Deloitte LLP was appoited as Group Auditors i Jue 2012 followig a teder process. The idepedece of the exteral auditor is also reviewed each year ad audit parters are rotated at least every five years. The Compay s policy is that Group audit appoitmet should be retedered at least every te years. As part of its resposibility to esure idepedece ad objectivity the Committee has adopted a policy to determie the circumstaces i which Auditors may be permitted to udertake tax compliace work for the Group. Uder the terms of this policy the provisio of certai services are prohibited ad iclude those listed below: bookkeepig services preparatio of fiacial statemets desig ad implemetatio of fiacial systems valuatio services ivestmet advisory, broker ad dealig services geeral maagemet services The split betwee audit ad o-audit fees for the year uder review appears i ote 8 o page 52. Certai limited scope compliace work udertake by Deloitte LLP durig the year was hadled by teams that were separate ad idepedet from the exteral audit team ad were led by differet seior parters. The Committee was satisfied that appropriate safeguards were i place ad that the provisio of these additioal services by Deloitte LLP did ot affect their idepedece as exteral auditor. Advisory work is udertake by other firms. The Committee also moitors the effectiveess of the Group s iteral fiacial cotrols ad risk maagemet processes; this icluded assistig the Board i coductig the review of iteral cotrols described o page 25. I cojuctio with this exercise the Committee also reviewed the possible eed to establish a iteral audit fuctio. I cosiderig this poit the Committee was cogisat of the detailed review work udertake by members of the Group Fiace Departmet whilst visitig various parts of the Group s operatios ad that the volume of such work icreased durig the year. Takig accout of this ad its geeral level of cofidece i the Group s systems of iteral cotrol it cocluded that the establishmet of a distict iteral audit departmet was ot appropriate at that time but that this will be kept uder regular review. Notwithstadig this the Group has cotiued to develop ad exted a system whereby members of the Group fiace fuctio udertake cotrol reviews at operatig compaies. This work has ow bee give greater focus ad further ehaced through the appoitmet of a Group Assurace Maager. The Committee also keeps uder review the meas by which staff may, i cofidece, raise cocers about fiacial improprieties relatig to fiacial reportig, iteral cotrol or other matters. The Compay s procedure allows for ay such matters to be reported to the Compay Secretary who will esure that they are properly ivestigated ad reported to the Audit Committee ad the Board. A idividual raisig a cocer eed ot disclose their idetity ad if such idetity is disclosed it will ot be passed o without the coset of that idividual. Nomiatio Committee The Committee meets as required ad curretly comprises the Group Chairma who also chairs the Committee ad the Compay s three No-Executive Directors. Robert Miller Bakewell acted as Chairma of the Committee util Ke Lever assumed that role o his appoitmet to the Board i November Brook Lad was a member of the Committee util his retiremet from the Board. The Committee s key resposibilities iclude reviewig the Board structure, size ad compositio as well as evaluatig the balace of skills, kowledge ad experiece which may be required i the future ad makig recommedatios to the Board accordigly. It is also resposible for omiatig cadidates to the Board whe vacacies arise, recommedig Directors who are retirig to be put forward for re-electio ad where appropriate cosiderig ay issues relatig to the cotiuatio i office of ay Director. It has writte terms of referece which are available o the Compay s website ad o request from the Compay Secretary. rpsgroup.com 27

28 Durig the year the Nomiatio Committee led a process to idetify ad recruit a ew Group Chairma. For this purpose Specer Stuart was used as a exteral search cosultacy; Specer Stuart has o other coectio with the Compay. A detailed specificatio for the role was prepared ad the time commitmet to udertake the role cosidered. A structured search, referecig ad iterview process was the udertake. This culmiated with the Committee recommedig the appoitmet of Keeth Lever as a ew Group Chairma. The Board the cosidered this recommedatio ad cocluded that Mr. Lever should be appoited. The retirig Chairma did ot participate i the Committee s processes or deliberatios relatig to its recommedatio to the Board. The rage of skills ad experiece offered by the curret Directors is highlighted o page 18 ad the Committee was satisfied with the balace ad membership of the Board throughout the year uder review. The Committee does, however, remai midful of the eed to esure its periodic refreshmet ad to review the positio as No-Executive Directors terms of office expire. The Committee also maitais a ogoig brief to cosider successio plaig at Board ad Seior Executive level. Although the Group s previously aouced target that a miimum of 25% of its Board membership should be female is ot curretly beig met, the Committee ad the Board remai midful of the importace of diversity ad will cotiue to cosider this i their deliberatios. Louise Charlto s third three year term as a No-Executive Director will expire i April 2017 ad as oted i the Chairma s Statemet she will remai i office util such time as a replacemet is idetified. Remueratio Committee The membership ad activities of the Remueratio Committee are described i the Remueratio Committee Report o pages 29 ad 30 together with the accompayig otes o pages 87 to 95. Takeover Directive Disclosures required uder the Takeover Directive are icluded o page 21 ad form part of the Group s Corporate Goverace report. 28 Report ad Accouts 2016

29 Maagemet & Goverace Remueratio Committee Report Aual Statemet I am pleased to preset the Remueratio Committee Report for 2016, which cosists of two parts. I my Aual Statemet I outlie the liks betwee remueratio ad the Compay s strategy as well as summarisig the mai decisios made by the Committee durig the year. The Aual Report o Remueratio which cosists of the iformatio o page 30 ad otes 1 to 12 o pages 87 to 95 icorporates the remueratio disclosures required i respect of the year. Remueratio Policy Durig the year the Remueratio Committee udertook a review a review of the curret policy ad cocluded the followig. RPS eeded a competitive, simple ad performace drive Policy aliged to executio of the log-term busiess strategy. I the absece of a stad-aloe log-term icetive arragemet the Remueratio Committee did ot have all the tools required to icetivise log-term sustaiable performace. I additio, the itroductio of a more stadard log-term icetive pla would be i lie with shareholders desire to see a icreased proportio of the remueratio package at risk for log-term performace outcomes. The ew policy should appropriately reflect evolvig corporate goverace requiremets ad best practice. The Remueratio Committee the cosulted with its pricipal shareholders i coectio with the developmet of a ew remueratio policy ad two ew icetive plas to form part of that policy. The Committee is grateful to shareholders for the feedback received ad which was take ito accout i fialisig the ew policy. The ew policy was approved at a geeral meetig of the Compay held o 30 November ad took effect from 1 Jauary This was set out i full i the circular set to shareholders, a copy of which is available o the Compay s website. A summary of the mai elemets of the ew policy as applicable to the Executive Directors is show i the otes to the Remueratio Report o pages 87 to 90. Durig the cosultatio exercise the Committee udertook to iclude the performace coditios that would apply for 2017 i respect of the RPS Group Plc Executive Log Term Icetive Pla ad these are show i the otes to the Remueratio Report o page 90. Performace ad Remueratio outcomes for 2016 Durig 2016 the RPS Group Plc Bous Pla (the Pla ) was the sole icetive arragemet i place for the Executive Directors of the Compay. The pricipal fiacial performace coditio for the Pla is PBTA, with coversio of profit to cash ad persoal objectives as secodary coditios. The Compay s key performace idicators which are a measure of success i deliverig the Compay s strategy iclude PBTA ad coversio of profit to cash. I accordace with the above bous opportuity for 2016 was assessed agaist PBTA (70%), cash collectio (20%) ad persoal objectives (10%). As the PBTA performace for the year did ot meet the miimum performace level, o bous cotributio was eared i respect of this elemet. The Miimum Profit Threshold of 50m set by the Committee before bous cotributios i respect of cash collectio ad persoal objectives could be eared was, however, exceeded. Cash collectio for the year was very strog at 117% ad was above the upper ed performace target of 110% set for this elemet by the Committee, with the result that the maximum bous cotributios was eared by each Executive Director for this elemet. I respect of persoal objectives the Committee cocluded that although those for Ala Heare ad Phil Williams had ot bee satisfied those for Gary Youg had bee met. Gary Youg therefore eared the maximum available cotributio i respect of this elemet. The bous cotributio i respect of Phil Williams was pro-rated to his service as a Director up to 30 September Further details i relatio to the Pla are set out i ote 2 to the Aual Report o pages 90 ad 91. I accordace with the ew remueratio policy 2016 was the fial year i which the Pla was operated. Other Remueratio Decisios The Executive Directors salaries were reviewed as at 1 Jauary 2016 ad o adjustmets were made. A further review was udertake as at 1 Jauary 2017 ad whilst the salary of Ala Heare was uchaged the Committee determied to icrease the basic salary of Gary Youg from 288, 600 to 310,000. This was to reflect the greater level of resposibility which it has bee ecessary for Mr. Youg to assume o reductio of the umber of Executive Directors o the Board from three to two. I makig this chage the Committee also cosidered relevat bechmarkig data ad was satisfied that Mr. Youg s basic salary ad level of overall remueratio were o greater tha the media of the Compay s comparator groups. Phil Williams, retired as a Director o 30 September He is beig paid ormal cotractual beefits util 20 March 2017 ad is beig treated as a good leaver for the purpose of the RPS Group Plc Bous Pla. Robert Miller-Bakewell Chairma of the Remueratio Committee 2 March 2017 rpsgroup.com 29

30 Aual Report Audited Iformatio The followig table sets out the total of the remueratio received by each of the Directors durig the year uder review. Director Base Salary Log Term All Employee or Fees Beefits Bous Icetives Pesios Share Pla Total Year Executive Ala Heare Phil Williams Gary Youg No Executive Ke Lever Brook Lad Joh Beett Louise Charlto Robert Miller Bakewell Adrew Page Tracey Graham Total 1,481 1, ,255 1,968 The remueratio payable to Phil Williams ad the fees payable to Ke Lever, Brook Lad, Joh Beett ad Adrew Page i 2016 were for part of the year oly. Their respective appoitmet ad leavig dates are show i the Corporate Goverace Statemet o page 23. Tracey Graham oly served as Director durig part of. The followig table shows the relatioship betwee total remueratio received by the Directors ad reported Group profits. Total Remueratio PBTA Remueratio received as % of PBTA 1,968 51, ,255 50, The additioal iformatio that is required uder the Regulatios which form part of the aual report for the year eded ember 2016 has bee icluded i otes 1 to 12 o pages 87 to 95. This additioal iformatio is uaudited with the exceptio of otes 2 to 6. The Aual Remueratio Report was approved by the Board ad siged o its behalf by Robert Miller-Bakewell Chairma of the Remueratio Committee 2 March Report ad Accouts 2016

31 Idepedet auditor s report to the members of RPS Group Plc Opiio o fiacial statemets of RPS Group Plc I our opiio: the fiacial statemets give a true ad fair view of the state of the Group s ad of the paret compay s affairs as at 31 December 2016 ad of the Group s profit for the year the eded; the Group fiacial statemets have bee properly prepared i accordace with Iteratioal Fiacial Reportig Stadards (IFRSs) as adopted by the Europea Uio; the paret compay fiacial statemets have bee properly prepared i accordace with Uited Kigdom Geerally Accepted Accoutig Practice, icludig FRS 102 The Fiacial Reportig Stadard applicable i the UK ad Republic of Irelad ; ad the fiacial statemets have bee prepared i accordace with the requiremets of the Compaies Act 2006 ad, as regards the Group fiacial statemets, Article 4 of the IAS Regulatio. The fiacial statemets that we have audited comprise: the Cosolidated Icome Statemet; the Cosolidated Statemet of Comprehesive Icome; the Cosolidated ad Paret Compay Balace Sheets; the Cosolidated Cash Flow Statemet; the Cosolidated ad Paret Compay Statemets of Chages i Equity; ad the related otes 1 to 31 ad Paret Compay otes 1 to 15. The fiacial reportig framework that has bee applied i the preparatio of the Group fiacial statemets is applicable law ad IFRSs as adopted by the Europea Uio. The fiacial reportig framework that has bee applied i the preparatio of the paret compay fiacial statemets is applicable law ad Uited Kigdom Accoutig Stadards (Uited Kigdom Geerally Accepted Accoutig Practice), icludig FRS 102 The Fiacial Reportig Stadard applicable i the UK ad Republic of Irelad. Summary of our audit approach Key risks The key risks that we idetified i the curret year ad had the greatest effect o our audit strategy were: reveue recogitio; assessmet of the carryig value of goodwill ad itagible assets; ad recoverability of trade receivables ad accrued icome. Withi this report, ay ew risks are idetified with ad ay risks which are the same as the prior year idetified with. Materiality The materiality that we used i the curret year was 2,500,000 which was determied o the basis of 5% of profit before tax, amortisatio ad trasactio related costs (PBTA) as detailed i ote 1(g). This equates to 7.8% of PBT. Scopig Sigificat chages i our approach We focused our Group audit scope ad work o the busiess uits at 6 locatios. Withi the 6 locatios, 23 busiess uits were subject to a full audit scope, whilst the remaiig 10 were subject to specified audit procedures. The Caadia busiess has ot bee icluded i the curret year scope due to its reduced sigificace i the cotext of the Group audit. Give that there have bee o sigificat acquisitios i the secod half of the year ad oly oe small acquisitio (DBK) i the first half of the year, we did ot cosider acquisitio accoutig to be a sigificat audit risk i the curret year. rpsgroup.com 31

32 Goig cocer ad the Directors assessmet of the pricipal risks that would threate the solvecy or liquidity of the Group As required by the Listig Rules we have reviewed the Directors statemet regardig the appropriateess of the goig cocer basis of accoutig cotaied withi the Director s report o page 20 ad the Directors statemet o the loger-term viability of the Group cotaied withi the strategic report o page 13. We are required to state whether we have aythig material to add or draw attetio to i relatio to: the Directors cofirmatio o page 11 that they have carried out a robust assessmet of the pricipal risks facig the Group, icludig those that would threate its busiess model, future performace, solvecy or liquidity; the disclosures o pages that describe those risks ad explai how they are beig maaged or mitigated; the Directors statemet i the Directors report about whether they cosidered it appropriate to adopt the goig cocer basis of accoutig i preparig them ad their idetificatio of ay material ucertaities to the Group s ability to cotiue to do so over a period of at least twelve moths from the date of approval of the fiacial statemets; ad the Directors explaatio o page 20 as to how they have assessed the prospects of the Group, over what period they have doe so ad why they cosider that period to be appropriate, ad their statemet as to whether they have a reasoable expectatio that the Group will be able to cotiue i operatio ad meet its liabilities as they fall due over the period of their assessmet, icludig ay related disclosures drawig attetio to ay ecessary qualificatios or assumptios. We cofirm that we have othig material to add or draw attetio to i respect of these matters. We agreed with the Directors adoptio of the goig cocer basis of accoutig ad we did ot idetify ay such material ucertaities. However, because ot all future evets or coditios ca be predicted, this statemet is ot a guaratee as to the Group s ability to cotiue as a goig cocer. Idepedece We are required to comply with the Fiacial Reportig Coucil s Ethical Stadards for Auditors ad cofirm that we are idepedet of the Group ad we have fulfilled our other ethical resposibilities i accordace with those stadards. We cofirm that we are idepedet of the Group ad we have fulfilled our other ethical resposibilities i accordace with those stadards. We also cofirm we have ot provided ay of the prohibited o-audit services referred to i those stadards. Our assessmet of risks of material misstatemet The assessed risks of material misstatemet described below are those that had the greatest effect o our audit strategy, the allocatio of resources i the audit ad directig the efforts of the egagemet team. Reveue recogitio Risk descriptio The Group is egaged i the provisio of cosultacy services through cotractual arragemets with its customers. The reveue balace was material at 594m (: 567m). The risk i reveue recogitio focusses o the judgemet ivolved i determiig the extet of reveue to be recogised o cotracts ope at year ed. There is sigificat maagemet judgemet i determiig the reveue to be recogised ad i particular i estimatig the stage of completio of, ad the costs to complete, ope cotracts at the balace sheet date. We have therefore specified this risk as relatig to the cut-off (recordig) of reveue. The Group s reveue recogitio policy is disclosed i ote 1(c). 32 Report ad Accouts 2016

33 How the scope of our audit respoded to the risk Key observatios Our audit work assessed the adequacy of the desig ad implemetatio of cotrols over the recogitio of reveue for all full scope compoets. We tested i detail a sample of cotracts, by comparig them to the siged cotract terms, agreeig iputs to the related time records, ad uderstadig ad challegig the estimated costs to complete. Based o our fidigs from this, we determied whether reveue recogitio was appropriate based o maagemet s assessmet of the stage of completio. Based o our procedures, o issues were idetified with the cut off (recordig) of reveue. Assessmet of the carryig value of goodwill ad itagible assets Risk descriptio How the scope of our audit respoded to the risk Key observatios At ember 2016, the et book value of goodwill ad itagible assets was 456m (: 417m) after impairmets. The associated disclosure is icluded i ote 11 ad the accoutig policy is disclosed i ote 1(e). The Audit Committee has icluded their assessmet of this risk o page 26 ad it is also icluded i the key accoutig estimates i ote 1 (i). Assessmet of the carryig value of goodwill ad itagible assets is a sigificat risk due to the quatum of the balace, the umber of judgemets ivolved i assessig impairmet, ad the cotiuig challegig ecoomic coditios particularly i those busiesses with sigificat exposure to the oil ad gas market. The Group s assessmet of the carryig values of goodwill ad itagible assets is based o assumptios of future segmetal cash flows, icludig assumptios o short ad log-term reveue ad profit growth rates ad the selectio of appropriate discout rates. Our audit work assessed the adequacy of the desig ad implemetatio of cotrols over maagemet review of goodwill ad itagible asset impairmet. Our work focused o challegig maagemet s assumptios ad the appropriateess of their judgemets ad forecasts used as part of their value i use calculatios, specifically the Eergy sector, give the cotiued ucertaity i the oil ad gas market. We cosidered maagemet s reveue forecasts i the light of curret tradig coditios. We compared maagemet s forecasts agaist curret ad historical results with particular focus o the oil ad gas sector. We used our valuatio specialists to calculate a acceptable rage of discout rates ad compared our rage to that determied by maagemet. We examied the short term growth rates by usig market data ad cosiderig historical growth rates. We bechmarked the log-term growth rates agaist exteral peer group published rates ad market data. We also performed sesitivity aalysis o the amout ad timig of cash flows. We have cosidered the adequacy of the associated disclosures. Based o our testig, we deemed the methodology applied by maagemet to be appropriate. We cosider that the forecasts ad growth rates applied by maagemet i assessig the carryig value of goodwill ad itagible assets were reasoable. We deemed the discout rates used to be withi a acceptable rage. Our sesitivity aalysis did ot idicate probable impairmet factors. Recoverability of trade receivables ad accrued icome Risk descriptio At ember 2016 trade receivables were 119m (: 113m) et of the provisio for impairmet ad accrued icome was 33m (: 29m) et of the provisio for impairmet. The trade receivables provisio for impairmet was 6.0m (: 10.9m) ad the accrued icome provisio for impairmet was 4.4m (: 3.6m) these are disclosed i ote 14. Recoverability of trade receivables ad accrued icome is a sigificat risk due to the material ature of these balaces ad the ucertai ecoomic eviromet i certai geographic locatios were the Group operates. The Audit Committee has icluded their assessmet of this risk o page 26. rpsgroup.com 33

34 How the scope of our audit respoded to the risk Key observatios Our audit work assessed the adequacy of the desig ad implemetatio of cotrols of aged trade receivables ad accrued icome. We assessed the assumptios used i maagemet s calculatios ad the appropriateess of judgemets o the completeess of the provisios agaist trade receivables ad accrued icome by: uderstadig the latest facts ad circumstaces, examiig ay relevat correspodece ad challegig ay coclusio by maagemet regardig provisios for aged receivables; reviewig cash received post year ed o a sample of customer debts; reviewig the overall ageig aalysis for trade receivables ad accrued icome by etity ad customer; ad challegig specific balaces which were sigificatly past-due but ot impaired ad reviewed for cash received post year ed. Based o our procedures, o material issues were idetified which raised cocers over the recoverability of trade receivables ad accrued icome beyod those provided by maagemet ad we cocur that the levels of provisios are appropriate. These matters were addressed i the cotext of our audit of the fiacial statemets as a whole, ad i formig our opiio thereo, ad we do ot provide a separate opiio o these matters. Our applicatio of materiality We defie materiality as the magitude of misstatemet i the fiacial statemets that makes it probable that the ecoomic decisios of a reasoably kowledgeable perso would be chaged or iflueced. We use materiality both i plaig the scope of our audit work ad i evaluatig the results of our work. Based o our professioal judgemet, we determied materiality for the fiacial statemets as a whole as follows: Group materiality 2,500,000 (: 2,500,000) Basis for determiig materiality 5% (: 5%) of adjusted pre-tax profit, adjusted for amortisatio ad impairmet of acquired itagible assets ad trasactio related costs (PBTA). This basis is cosistet with the prior year. This equates to 7.8% of PBT. Ratioale for the bechmark applied We chose this measure as it is the Group s key profit performace idicator. We agreed with the Audit Committee that we would report to the Committee all audit differeces i excess of 100,000 (: 125,000), as well as differeces below that threshold that, i our view, warrated reportig o qualitative grouds. The chage i the reportig threshold has bee made followig our reassessmet of what matters require commuicatig. We also report to the Audit Committee o disclosure matters that we idetified whe assessig the overall presetatio of the fiacial statemets. 34 Report ad Accouts 2016

35 A overview of the scope of our audit Our Group audit was scoped by obtaiig a uderstadig of the Group ad its eviromet, icludig Group-wide cotrols, ad assessig the risks of material misstatemet at the Group level. Based o that assessmet, we focused our Group audit scope ad work o the busiess uits at 6 locatios UK, Australia, USA, Norway, Netherlads ad Irelad (: 7). The Caadia busiess has ot bee icluded i the curret year scope, due to its reduced sigificace i the cotext of the Group audit. Withi the 6 locatios, 23 (:24) busiess uits were subject to a full audit scope, whilst the remaiig 10 (: 12) were subject to specified audit procedures where the extet of our testig was based o our assessmet of the risks of material misstatemet ad of the materiality of the Group s operatios at those locatios. These locatios, icorporatig those covered by specified audit procedures, accout for 87% (: 92%) of the Group s et assets, 90% (: 93%) of the Group s reveue ad 87% (: 93%) of the Group s profit before tax, amortisatio ad trasactio-related costs. They were also selected to provide a appropriate basis for udertakig audit work to address the risks of material misstatemet idetified above. Our audit work at the locatios was executed at levels of materiality applicable to each idividual etity which were lower tha Group materiality ad raged from 0.05m to 1.0m (: 0.1m to 1.25m). At the paret etity level we also tested the cosolidatio process ad carried out aalytical procedures to cofirm our coclusio that there were o sigificat risks of material misstatemet of the aggregated fiacial iformatio of the remaiig compoets ot subject to audit or audit of specified accout balaces. The Group audit team cotiued to follow a programme of plaed visits that has bee desiged so that the Seior Statutory Auditor ad or a seior member of the Group audit team visits i-scope overseas compoets o a rotatioal basis. Every year, regardless of whether we have visited or ot, we iclude the compoet audit parter ad other seior members of the compoet audit team i our team briefig, discuss their risk assessmet ad review documetatio of the fidigs from their work. Opiio o other matters prescribed by the Compaies Act 2006 I our opiio, based o the work udertake i the course of the audit: the part of the Directors Remueratio Report to be audited has bee properly prepared i accordace with the Compaies Act 2006; the iformatio give i the Strategic Report ad the Directors Report for the fiacial year for which the fiacial statemets are prepared is cosistet with the fiacial statemets; ad the Strategic Report ad the Directors Report have bee prepared i accordace with applicable legal requiremets. I the light of the kowledge ad uderstadig of the compay ad its eviromet obtaied i the course of the audit, we have ot idetified ay material misstatemets i the Strategic Report ad the Directors Report. Matters o which we are required to report by exceptio Adequacy of explaatios received ad accoutig records Uder the Compaies Act 2006 we are required to report to you if, i our opiio: we have ot received all the iformatio ad explaatios we require for our audit; or adequate accoutig records have ot bee kept by the paret compay, or returs adequate for our audit have ot bee received from braches ot visited by us; or the paret compay fiacial statemets are ot i agreemet with the accoutig records ad returs. Directors remueratio Uder the Compaies Act 2006 we are also required to report if i our opiio certai disclosures of Directors remueratio have ot bee made or the part of the Directors Remueratio Report to be audited is ot i agreemet with the accoutig records ad returs. Corporate Goverace Statemet Uder the Listig Rules we are also required to review part of the Corporate Goverace Statemet relatig to the compay s compliace with certai provisios of the UK Corporate Goverace Code. We have othig to report i respect of these matters. We have othig to report arisig from these matters. We have othig to report arisig from our review. rpsgroup.com 35

36 Our duty to read other iformatio i the Aual Report Uder Iteratioal Stadards o Auditig (UK ad Irelad), we are required to report to you if, i our opiio, iformatio i the aual report is: materially icosistet with the iformatio i the audited fiacial statemets; or apparetly materially icorrect based o, or materially icosistet with, our kowledge of the Group acquired i the course of performig our audit; or otherwise misleadig. I particular, we are required to cosider whether we have idetified ay icosistecies betwee our kowledge acquired durig the audit ad the Directors statemet that they cosider the aual report is fair, balaced ad uderstadable ad whether the aual report appropriately discloses those matters that we commuicated to the audit committee which we cosider should have bee disclosed. We cofirm that we have ot idetified ay such icosistecies or misleadig statemets. Respective resposibilities of Directors ad Auditor As explaied more fully i the Directors Resposibilities Statemet, the Directors are resposible for the preparatio of the fiacial statemets ad for beig satisfied that they give a true ad fair view. Our resposibility is to audit ad express a opiio o the fiacial statemets i accordace with applicable law ad Iteratioal Stadards o Auditig (UK ad Irelad). We also comply with Iteratioal Stadard o Quality Cotrol 1 (UK ad Irelad). Our audit methodology ad tools aim to esure that our quality cotrol procedures are effective, uderstood ad applied. Our quality cotrols ad systems iclude our dedicated professioal stadards review team ad idepedet parter reviews. This report is made solely to the compay s members, as a body, i accordace with Chapter 3 of Part 16 of the Compaies Act Our audit work has bee udertake so that we might state to the compay s members those matters we are required to state to them i a auditor s report ad for o other purpose. To the fullest extet permitted by law, we do ot accept or assume resposibility to ayoe other tha the compay ad the compay s members as a body, for our audit work, for this report, or for the opiios we have formed. Scope of the audit of the fiacial statemets A audit ivolves obtaiig evidece about the amouts ad disclosures i the fiacial statemets sufficiet to give reasoable assurace that the fiacial statemets are free from material misstatemet, whether caused by fraud or error. This icludes a assessmet of: whether the accoutig policies are appropriate to the Group s ad the paret compay s circumstaces ad have bee cosistetly applied ad adequately disclosed; the reasoableess of sigificat accoutig estimates made by the Directors; ad the overall presetatio of the fiacial statemets. I additio, we read all the fiacial ad o-fiacial iformatio i the aual report to idetify material icosistecies with the audited fiacial statemets ad to idetify ay iformatio that is apparetly materially icorrect based o, or materially icosistet with, the kowledge acquired by us i the course of performig the audit. If we become aware of ay apparet material misstatemets or icosistecies we cosider the implicatios for our report. Joh Cleett FCA (Seior Statutory Auditor) for ad o behalf of Deloitte LLP Chartered Accoutats ad Statutory Auditor Readig, UK 2 March Report ad Accouts 2016

37 Accouts Cosolidated Icome Statemet Report of the Idepedet Auditors cotiued Note Year eded 2016 Year eded Reveue 3 594, ,972 Recharged expeses 3 (60,175) (60,862) Fee icome 3 534, ,110 Operatig profit before amortisatio ad impairmet of acquired itagibles 1(g),3,4,5 55,877 56,845 ad trasactio related costs Amortisatio ad impairmet of acquired itagibles ad trasactio related costs 1(g),4 (17,890) (41,940) Operatig profit 37,987 14,905 Fiace costs 6 (5,331) (5,232) Fiace icome Profit before tax, amortisatio ad impairmet of acquired itagibles 50,704 51,795 ad trasactio related costs Profit before tax 32,814 9,855 Tax expese 9 (7,733) (3,013) Profit for the year attributable to equity holders of the paret 25,081 6,842 Basic earigs per share (pece) Diluted earigs per share (pece) Adjusted basic earigs per share (pece) Adjusted diluted earigs per share (pece) Cosolidated Statemet of Comprehesive Icome Year eded 2016 Year eded Profit for the year 25,081 6,842 Actuarial gais ad losses o remeasuremet of defied beefit pesio scheme (261) 234 Tax o remeasuremet of defied beefit provisio liability 65 (63) Exchage differeces* 41,429 (9,181) Total recogised comprehesive icome/(loss) for the year attributable to equity holders of the paret 66,314 (2,168) *May be reclassified subsequetly to profit or loss i accordace with IFRS. The otes o pages 41 to 76 form part of these fiacial statemets. rpsgroup.com 37

38 Cosolidated Balace Sheet Note As at 2016 As at Assets No-curret assets: Itagible assets , ,658 Property, plat ad equipmet 12 28,448 26,504 Deferred tax asset 19 5,953 4, , ,443 Curret assets: Trade ad other receivables , ,430 Cash at bak 16,503 17, , ,231 Liabilities Curret liabilities: Borrowigs Deferred cosideratio 17 13,376 20,383 Trade ad other payables , ,309 Corporatio tax liabilities 4,472 4,014 Provisios 18 1,809 1, , ,392 Net curret assets 37,249 36,839 No-curret liabilities: Borrowigs 16 99,886 96,055 Deferred cosideratio 17 1,634 9,890 Other payables 2,496 2,162 Deferred tax liability 19 10,045 10,043 Provisios 18 1,790 1, , ,792 Net assets 411, ,490 Equity Share capital 20 6,703 6,667 Share premium 114, ,026 Other reserves 21 40,898 1,149 Retaied earigs 249, ,648 Total shareholders equity 411, ,490 These fiacial statemets were approved ad authorised for issue by the Board o 2 March The otes o pages 41 to 76 form part of these fiacial statemets. Dr Ala Heare, Director Gary Youg, Director O behalf of the Board of RPS Group Plc (compay umber ). 38 Report ad Accouts 2016

39 Accouts Cosolidated Cash Flow Statemet Note Year eded 2016 Year eded Cash geerated from operatios 25 78,253 92,628 Iterest paid (5,077) (6,021) Iterest received Icome taxes paid (11,057) (11,737) Net cash from operatig activities 62,277 75,052 Cash flows from ivestig activities: Purchases of subsidiaries et of cash acquired 27 (6,557) (35,354) Deferred cosideratio (23,672) (16,568) Purchase of property, plat ad equipmet (8,130) (7,963) Sale of property, plat ad equipmet Net cash used i ivestig activities (38,134) (59,420) Cash flows from fiacig activities: Costs of issue of share capital (5) (Repaymet of)/proceeds from bak borrowigs (6,921) 4,831 Paymet of fiace lease liabilities (47) (66) Divideds paid 22 (21,613) (19,973) Paymet of pre-acquisitio divided (850) (169) Net cash geerated i fiacig activities (29,436) (15,377) Net (decrease)/icrease i cash ad cash equivalets (5,293) 255 Cash ad cash equivalets at begiig of year 17,322 17,046 Effect of exchage rate fluctuatios 4, Cash ad cash equivalets at ed of year 25 16,503 17,322 Cash ad cash equivalets comprise: Cash at bak 16,503 17,801 Bak overdraft (479) Cash ad cash equivalets at ed of year 25 16,503 17,322 The otes o pages 41 to 76 form part of these fiacial statemets. rpsgroup.com 39

40 Cosolidated Statemet of Chages i Equity Share capital Share premium Retaied earigs Other reserves At 1 Jauary 6, , ,386 11, ,677 Chages i equity durig : Total comprehesive loss 7,013 (9,181) (2,168) Issue of ew ordiary shares 27 1,926 (730) (1,221) 2 Share based paymet expese 1,889 1,889 Tax recogised directly i equity Divideds paid (19,973) (19,973) At ember 6, , ,648 1, ,490 Chages i equity durig 2016: Total comprehesive icome 24,885 41,429 66,314 Issue of ew ordiary shares 36 2,327 (688) (1,680) (5) Share based paymet expese 2,184 2,184 Tax recogised directly i equity (63) (63) Divideds paid (21,613) (21,613) At ember , , ,353 40, ,307 A aalysis of other reserves is provided i ote 21 ad details of divideds paid are provided i ote 22. The otes o pages 41 to 76 form part of these fiacial statemets. Total equity 40 Report ad Accouts 2016

41 Accouts Notes to the Cosolidated Fiacial Statemets 1. Sigificat accoutig policies RPS Group Plc (the Compay ) is a compay domiciled i the UK uder the Compaies Act. The cosolidated fiacial statemets of the Compay for the year eded ember 2016 comprise the Compay ad its subsidiaries (together referred to as the Group ). The cosolidated fiacial statemets were authorised for issuace o 2 March (a) Basis of preparatio The Group has prepared its aual fiacial statemets i accordace with Iteratioal Fiacial Reportig Stadards (IFRS) as edorsed by the Europea Uio ad implemeted i the UK. The fiacial statemets are preseted i pouds sterlig, rouded to the earest thousad. The fiacial statemets have bee prepared o the historical cost basis. Durig the year, the Group has applied IFRS 10 (ameded), IFRS 12 (ameded) ad IAS 28 Ivestmet Etities: Applyig the Cosolidatio Exceptio, IFRS 11 (ameded) Accoutig for Acquisitios of Iterests i Joit Operatios, IAS 1 (ameded) Disclosure Iitiatives ad IAS 16 (ameded) ad IAS 38 (ameded) Depreciatio ad Amortisatio. Their adoptio has ot had a material impact o the disclosures or amouts reported i these accouts. Otherwise the accoutig policies set out below have bee applied cosistetly to both years preseted i these cosolidated fiacial statemets. (b) Basis of cosolidatio Where the compay has the power, either directly or idirectly, to gover the fiacial ad operatig policies of aother etity or busiess so as to obtai beefits from its activities, it is classified as a subsidiary. The cosolidated fiacial statemets preset the results of the compay ad its subsidiaries as if they formed a sigle etity. Itercompay trasactios ad balaces betwee Group compaies are therefore elimiated i full. The cosolidated fiacial statemets icorporate the results of busiess combiatios usig the purchase method. I the Cosolidated Balace Sheet, the acquiree s idetifiable assets, liabilities ad cotiget liabilities are iitially recogised at their fair values at the acquisitio date. The results of acquired operatios are icluded i the cosolidated statemet of comprehesive icome from the date o which cotrol is obtaied. They are decosolidated from the fiacial statemets from the date cotrol ceases. (c) Reveue Reveue is stated et of sales tax. Reveue is recogised oly whe the outcome of a trasactio ca be measured reliably ad it is probable that ecoomic beefits will flow to the Group. i Fees / expeses Reveue is classified ito Fee icome ad Recharged expeses. Fee icome represets the Group s persoel, subcotractor ad equipmet time ad expertise sold to cliets. Recharged expeses is the reveue recogised o the recharge of costs icidetal to fulfillig the Group s cotracts, for example mileage, flights, subsistece ad accommodatio. ii Time ad materials I the case of time ad materials projects, reveue represets the fair value of services provided usig time spet at agreed rates as the basis. iii Fixed price I the case of fixed price cotracts, reveue is recogised i proportio to the stage of completio of the trasactio at the balace sheet date measured by referece to the milestoes achieved or cost icurred as a proportio of the total forecast cost. No reveue is recogised if there are sigificat ucertaities regardig the recovery of the cosideratio due or associated costs. A expected loss o a cotract is recogised immediately i the icome statemet. iv Tuitio Tuitio fees i respect of courses ru by RPS are recogised over the period of istructio. v Agecy agreemets The Group eters ito certai agreemets with cliets where it maages cliet expediture as a aget. It is obliged to purchase third party services ad recharges those costs, plus a maagemet fee, to the cliet. I these cases oly the maagemet fee is recogised as reveue. Receivables, payables ad cash related to these trasactios are icluded i the cosolidated balace sheet. rpsgroup.com 41

42 1. Sigificat accoutig policies cotiued Accrued reveue is booked as a receivable i the cosolidated balace sheet whe the amout of reveue recogised o a cotract exceeds the amout ivoiced. Where the amout ivoiced exceeds the amout of reveue recogised, the differece is booked as a payable o the balace sheet i deferred icome. (d) Deferred cosideratio Deferred cosideratio arises whe settlemet of all or part of the cost of a busiess combiatio falls due after the date the acquisitio was completed. It is stated at the fair value. All deferred cosideratio has bee treated as part of the cost of ivestmet. At each balace sheet date deferred cosideratio comprises the fair value of the remaiig deferred cosideratio valued at acquisitio. (e) Itagible assets i Goodwill All busiess combiatios are accouted for by applyig the purchase method. Goodwill has bee recogised o acquisitios of subsidiaries ad the busiess, assets ad liabilities of parterships. Goodwill represets the differece betwee the cost of the acquisitio ad the fair value of the idetifiable assets acquired. Goodwill is stated at cost less ay accumulated impairmet losses. Goodwill is allocated to groups of cash-geeratig uits ad is tested aually for impairmet. ii Other itagible assets Itagible assets other tha goodwill that are acquired by the Group are stated at cost less accumulated amortisatio ad impairmet losses. Itagible assets idetified i a busiess combiatio are capitalised at fair value at the date of acquisitio if they are separable from the acquired etity or give rise to other cotractual or legal rights. The fair values ascribed to such itagibles are arrived at by usig appropriate valuatio techiques. Expediture o iterally geerated goodwill ad brads is recogised i the icome statemet as a expese as icurred. iii Amortisatio Amortisatio is charged to profit or loss i proportio to the timig of the beefits derived from the related asset from the date that the itagible assets are available for use over their estimated useful lives uless such lives are idefiite. The estimated useful lives of the Group s itagible assets are as follows: Customer relatioships Trade ames Order backlog Software Itellectual property rights 5 to 10 years 1 to 5 years 1 to 6 years 4 to 10 years 10 years (f) Impairmet of o fiacial assets The carryig amouts of the Group s o fiacial assets, other tha deferred tax assets, are reviewed at each balace sheet date to determie whether there is ay idicatio of impairmet. If ay such idicatio exists, the asset s recoverable amout is estimated. For goodwill the recoverable amout is estimated at each aual balace sheet date. A impairmet loss is recogised wheever the carryig amout of a asset or its cash geeratig uit exceeds its recoverable amout. Impairmet losses are recogised i the icome statemet uless the asset is recorded at a revalued amout i which case it is treated as a revaluatio decrease to the extet that a surplus has previously bee recorded. Impairmet losses recogised i respect of cash geeratig uits are allocated first to reduce the carryig value of goodwill allocated to the cash geeratig uit ad the to reduce the carryig amout of the other assets i the uit o a pro-rata basis. i Calculatio of recoverable amout The recoverable amout is the greater of the et sellig price ad value i use. I assessig value i use, the estimated future cash flows are discouted to their preset value usig a pre-tax discout rate that reflects curret market assessmets of the time value of moey ad the risks specific to the asset. 42 Report ad Accouts 2016

43 Accouts ii Reversals of impairmet A impairmet loss i respect of goodwill is ot reversed. I respect of other assets, a impairmet loss is reversed if there has bee a chage i the estimates used to determie the recoverable amout. A impairmet loss is reversed oly to the extet that the assets carryig amout does ot exceed the carryig amout that would have bee determied, et of depreciatio or amortisatio, if o impairmet loss had bee recogised. (g) No statutory performace measures The Group defies ad presets various o-gaap performace measures. The measures preseted are those adopted by maagemet ad aalysts who follow us i assessig the performace of the busiess. Our pricipal o-gaap measure is profit before tax, amortisatio ad impairmet of acquired itagibles ad trasactio related costs (PBTA). We adjust for amortisatio ad impairmet of acquired itagible assets as they are o-cash items ad their measuremet is based o estimates of asset lives ad fair values at acquisitio where uderlyig assumptios are subjective i ature. We adjust for acquisitio related costs as they ot depedet o the uderlyig performace of the busiess ad oly icurred whe acquisitios arise. The o statutory measures are defied below: Operatig profit before amortisatio ad impairmet of acquired itagibles ad trasactio related costs (OPBA) Profit before tax, amortisatio ad impairmet of acquired itagibles ad trasactio related costs (PBTA) Adjusted basic earigs per share Adjusted diluted earigs per share Segmet profit Uderlyig profit Amortisatio ad impairmet of acquired itagibles ad trasactio related costs Reorgaisatio costs EBITDAS Statutory operatig profit before amortisatio ad impairmet of acquired itagibles ad trasactio related costs Statutory profit before tax before amortisatio ad impairmet of acquired itagibles ad trasactio related costs Statutory basic earigs per share before amortisatio ad impairmet of acquired itagibles, trasactio related costs ad tax o amortisatio ad impairmet of acquired itagibles ad trasactio related costs (see ote 10) Statutory diluted earigs per share before amortisatio ad impairmet of acquired itagibles, trasactio related costs ad tax o amortisatio ad impairmet of acquired itagibles ad trasactio related costs (see ote 10) Statutory profit before tax before iterest, amortisatio of acquired itagibles, trasactio related costs ad uallocated expeses Segmet profit before reorgaisatio costs Amortisatio of acquired itagibles (see ote 1 (e) iii), plus impairmet of acquired itagibles plus third party trasactio related costs (see ote 4) Costs ad icome arisig as a cosequece of reorgaisatio icludig redudacy costs, profit or loss o disposal of plat, property ad equipmet, the costs of cosolidatig office space ad rebradig costs Earigs before iterest, tax, depreciatio, amortisatio ad impairmet of itagibles ad share scheme costs (h) Judgemets made i applyig accoutig policies I the course of preparig the fiacial statemets, o judgemets have bee made i the process of applyig the Group s accoutig policies, other tha those ivolvig estimatios (see 1 (i) below), that have had a sigificat effect o the amouts recogised i the fiacial statemets. (i) Sources of estimatio ucertaity I applyig the Group s accoutig policies various trasactios ad balaces are valued usig estimates or assumptios. Should these estimates or assumptios prove icorrect, there may be a impact o the followig year s fiacial statemets. The oly source of estimatio ucertaity at the ed of 2016, that has a sigificat risk of resultig i a material adjustmet to the carryig amouts of assets ad liabilities durig 2017, relates to the assessmet of the carryig value of goodwill withi the Eergy cash geeratig uit. A discussio of this estimatio ucertaity ca be foud i ote 11. rpsgroup.com 43

44 Notes to the Cosolidated Fiacial Statemets cotiued 2. Other accoutig policies (a) Foreig currecy i Foreig currecy trasactios Trasactios i foreig currecy are traslated at the foreig exchage rate rulig at the date of the trasactio. Moetary assets ad liabilities deomiated i foreig currecies at the balace sheet date are traslated to pouds sterlig at the foreig exchage rate rulig at that date. Foreig exchage differeces arisig o traslatio are recogised i icome. ii Fiacial statemets of foreig operatios The assets ad liabilities of foreig operatios, icludig goodwill ad fair value adjustmets arisig o cosolidatio, are traslated to pouds sterlig at the exchage rate rulig at the balace sheet date. The reveues ad expeses of foreig operatios are traslated to pouds sterlig at rates approximatig the foreig exchage rates rulig at the dates of the trasactios. Foreig exchage differeces arisig o retraslatio are recogised i the traslatio reserve. iii Net ivestmet i foreig operatios Exchage differeces arisig from the traslatio of the et ivestmet i foreig operatios are take to the traslatio reserve. They are recycled ad take to icome upo disposal of the operatio. iv Foreig currecy forward cotracts Foreig currecy forward cotracts are iitially recogised at il value, beig priced-at-the-moey at origiatio. Subsequetly they are measured at fair value (determied by price chages i the uderlyig forward rate, the iterest rate, the time to expiratio of the cotract ad the amout of foreig currecy specified i the cotract). Chages i fair value are recogised i the icome statemet as they arise. (b) Property, plat ad equipmet i Owed assets Items of property, plat ad equipmet are stated at cost less accumulated depreciatio (see below) ad impairmet losses (see accoutig policy 1 (f) above). ii Leased assets Leases which cotai terms whereby the Group assumes substatially all the risks ad rewards icidetal to owership of the leased item are classified as fiace leases. Assets acquired uder a fiace lease are capitalised at the iceptio of the lease at fair value of the leased assets, or if lower, the preset value of the miimum lease paymets. Obligatios uder fiace leases are icluded i liabilities et of fiace costs allocated to future periods. All other leases are classified as operatig leases ad are ot capitalised. iii Subsequet costs The Group recogises i the carryig amout of a item of property, plat ad equipmet the cost of replacig part of such a item whe that cost is icurred if it is probable that the future ecoomic beefits embodied withi the item will flow to the Group ad the cost of the item ca be measured reliably. All other costs are recogised i the icome statemet as icurred. iv Depreciatio Depreciatio is charged to icome o a straight-lie basis over the estimated useful lives of each part of a item of property, plat ad equipmet. The estimated useful lives are as follows: Freehold buildigs Alteratios to leasehold premises Motor vehicles Fixtures, fittigs, IT ad equipmet 50 years Life of lease 4 years 3 to 8 years 44 Report ad Accouts 2016

45 Accouts (c) Trade ad other receivables Trade ad other receivables are recogised at cost ad carried at cost less impairmet losses. Trade ad other receivables are subject to impairmet tests wheever evets or chages i circumstaces idicate that their carryig amout may ot be recoverable. Impairmet losses are take to the icome statemet as icurred. (d) Cash ad cash equivalets Cash at bak comprises cash balaces ad call deposits with a origial maturity of three moths or less. Bak overdrafts that are repayable o demad ad form a itegral part of the Group s cash maagemet are icluded as a compoet of cash ad cash equivalets for the purposes of the cosolidated cash flow statemet. (e) Employee beefits i Defied cotributio plas Obligatios for cotributios to defied cotributio retiremet beefit plas are recogised as a expese i the icome statemet as icurred. ii Defied beefit plas The cost of providig beefits is determied usig the projected uit credit method, with actuarial valuatios beig carried out at the ed of each reportig period. Remeasuremet gais ad losses are recogised immediately i the balace sheet with a charge or credit to the Statemet of Comprehesive icome i the period i which they occur. These remeasuremet gais ad losses are ot recycled to the icome statemet. Defied beefit costs are split ito three categories: curret service cost, past service cost ad gais ad losses o curtailmets ad settlemets (recogised i admiistrative expeses) et iterest expese or icome (recogised i fiace costs); ad remeasuremet (recogised i other comprehesive icome). The retiremet beefit obligatio recogised i the Cosolidated Balace Sheet represets the deficit i the Group s defied beefit scheme. iii Share-based paymets The Group operates share based paymet arragemets with employees. The fair value of equity settled awards for share based paymets is determied at grat ad expesed straight lie over the period from grat to the date of earliest ucoditioal exercise. The Group has calculated the fair market value of optios usig a biomial model ad for whole share awards the fair value has bee based o the market value of the shares at the date of grat adjusted to take ito accout some of the terms ad coditios upo which the shares were grated. Those fair values were charged to the icome statemet over the relevat vestig period adjusted to reflect actual ad expected vestig levels. iv Accrued holiday pay Provisio is made at each balace sheet date for holidays accrued but ot take, to the extet that they may be carried forward, calculated at the salary of the relevat employee at that date. (f) Provisios A provisio is recogised i the balace sheet whe the Group has a preset legal or costructive obligatio as a result of a past evet ad it is probable that a outflow of ecoomic beefits will be required to settle the obligatio. If the effect is material, provisios are determied by discoutig the expected future cash flows at a pre-tax rate that reflects curret market assessmets of the time value of moey ad, whe appropriate, the risks specific to the liability. A provisio for oerous cotracts is recogised whe the expected beefits to be derived by the Group from a cotract are lower tha the uavoidable cost of meetig its obligatios uder the cotract. (g) Trade ad other payables Trade ad other payables are stated at cost. Trade payables with a short useful life are ot discouted. rpsgroup.com 45

46 Notes to the Cosolidated Fiacial Statemets cotiued 2. Other accoutig policies cotiued (h) Borrowigs Bak overdrafts ad iterest bearig loas are iitially measured at cost. Borrowigs are ot discouted. (i) Reserves The descriptio ad purpose of the Group s reserves are as follows: Share premium Merger reserve Employee trust Traslatio reserve Retaied earigs (j) Expeses Premium o shares issued i excess of omial value, other tha o shares issued i respect of acquisitios whe merger relief is take. Premium o shares issued i respect of acquisitios whe merger relief is take. Ow shares held by the SIP ad ESOP trusts. Cumulative gais ad losses arisig o retraslatig the et assets of overseas operatios ito sterlig. Cumulative et gais ad losses recogised i the cosolidated statemet of comprehesive icome ad cosolidated statemet of chages i equity. i Operatig lease paymets Paymets made uder operatig leases are recogised i the icome statemet o a straight-lie basis over the term of the lease. Lease icetives received are recogised as a itegral part of the total lease expese. ii Fiace lease paymets Miimum lease paymets are apportioed betwee the fiace charge ad the reductio of the outstadig liability. The fiace charge is allocated to each period durig the lease term so as to produce a costat periodic rate of iterest o the remaiig balace of the liability. (k) Icome tax Icome tax o the icome for the years preseted comprises curret ad deferred tax. Icome tax is recogised i the icome statemet except to the extet that it relates to items recogised i equity, i which case it is recogised i equity. Curret tax is the expected tax payable o the taxable icome for the year, usig tax rates eacted or substatially eacted at the balace sheet date, ad ay adjustmet to tax payable i respect of previous years. Deferred tax is provided usig the balace sheet liability method, providig for temporary differeces betwee the carryig amouts of assets ad liabilities for fiacial reportig purposes ad the amouts used for taxatio purposes. The followig temporary differeces are ot provided for: goodwill ot deductible for tax purposes, the iitial recogitio of assets or liabilities that affect either accoutig or taxable profit ad the differeces relatig to ivestmets i subsidiaries to the extet that they will probably ot reverse i the foreseeable future. The amout of deferred tax provided is based o the expected maer of realisatio or settlemet of the carryig amout of assets ad liabilities, usig tax rates eacted or substatively eacted at the balace sheet date. A deferred tax asset is recogised oly to the extet that it is probable that future taxable profits will be available agaist which the asset ca be utilised. Deferred tax assets are reduced to the extet that it is o loger probable that the related tax beefit will be realised. (l) Divideds Divideds are recogised whe they become legally payable. I the case of iterim divideds to equity shareholders, this is whe they are paid. I the case of fial divideds, this is whe approved by the shareholders at the Aual Geeral Meetig. 46 Report ad Accouts 2016

47 Accouts (m) Employee Share Owership Pla (ESOP) As the Compay is deemed to have cotrol of its ESOP trust, it is treated as a subsidiary ad cosolidated for the purpose of the Group accouts. The ESOP s assets (other tha ivestmets i the Compay s shares), liabilities, icome ad expeses are icluded o a lie-by-lie basis i the Group fiacial statemets. The ESOP s ivestmet i the Compay s shares is deducted from shareholders fuds i the Group balace sheet as if they were treasury shares. () Accoutig stadards issued but ot adopted At the date of authorisatio of these fiacial statemets, the followig stadards ad relevat iterpretatios, which have ot bee applied i these fiacial statemets, were i issue but ot yet effective (ad some of which were pedig edorsemet by the EU): IAS 12 (ameded) Recogitio of Deferred Tax Asset for Urealised Losses IFRS 16 Leases IAS 7 Disclosure Iitiative lfric 22 Foreig Currecy Trasactios ad Advace Cosideratio Aual improvemets to IFRSs: Cycle lfrs 9 Fiacial Istrumets lfrs 15 Reveue from Cotracts lfrs 2 (ameded) Classificatio ad Measuremet of Share-based Paymet Trasactios lfrs 15 Clarificatio to IFRS 15 Reveue from Cotracts with Customers The Group is udertakig a detailed review of the potetial impact of IFRS 15. We do ot believe this stadard will sigificatly affect the Group s reveue recogitio as our accoutig practices are geerally i accordace with IFR 15. IFRS 15 will be first applied to the Group s fiacial statemets for the year ed ember A full assessmet of the impact of the other stadards has ot bee udertake yet. It is ot practical to provide a reasoable estimate of their impact util a detailed review has bee completed. 3. Busiess ad geographical segmets Segmet iformatio is preseted i the fiacial statemets i respect of the Group s busiess segmets, as reported to the Chief Operatig Decisio Maker. The busiess segmet reportig format reflects the Group s maagemet ad iteral reportig structure. Iter-segmet pricig is determied o a arm s legth basis. Segmet results iclude items directly attributable to a segmet as well as those that ca be allocated o a reasoable basis. Busiess segmets The busiess segmets of the Group are as follows: Built ad Natural Eviromet ( BNE ) - cosultacy services to may aspects of the property ad ifrastructure developmet ad maagemet sectors. These iclude: evirometal assessmet, project maagemet, the maagemet of water resources, oceaography, health ad safety, risk maagemet, tow ad coutry plaig, buildig, ladscape ad urba desig, surveyig ad trasport plaig. Cosultig services are provided o a regioal basis i Europe ad North America. Eergy - the provisio of itegrated techical, commercial ad project maagemet support ad traiig i the fields of geosciece, egieerig ad health, safety ad eviromet o a global basis maily to the oil ad gas sector. Australia Asia Pacific ( AAP ) - I the AAP regio there is a sigle Board that maages the BNE ad Eergy services we provide i that regio. Accordigly the results of this busiess are reported as a separate segmet. Certai cetral costs are ot allocated to the segmets because they predomiatly relate to the stewardship of the Group. They iclude the costs of the mai Board, ad the Group fiace ad marketig fuctios ad related IT costs. These costs are icluded i the category uallocated expeses. Segmet profit, Uderlyig profit ad Reorgaisatio costs are defied i ote 1(g) rpsgroup.com 47

48 Notes to the Cosolidated Fiacial Statemets cotiued 3. Busiess ad geographical segmets cotiued Segmet results for the year eded ember 2016 Fees Expeses Itersegmet reveue Exteral reveue BNE - Europe 269,029 36,166 (714) 304,481 BNE - North America 65,382 6,398 (160) 71,620 Eergy 71,490 9,327 (485) 80,332 AAP 130,140 8,439 (541) 138,038 Group elimiatios (1,745) (155) 1,900 Total 534,296 60, ,471 Uderlyig profit Reorgaisatio costs Segmet profit BNE - Europe 35,598 (460) 35,138 BNE - North America 8,156 (305) 7,851 Eergy 8,989 (3,603) 5,386 AAP 15,481 (1,246) 14,235 68,224 (5,614) 62,610 Segmet results for the year eded ember Fees Expeses Itersegmet reveue Exteral reveue BNE - Europe 222,437 30,503 (808) 252,132 BNE - North America 58,672 7,713 (343) 66,042 Eergy 122,971 13,931 (938) 135,964 AAP 104,153 9,045 (364) 112,834 Group elimiatios (2,123) (330) 2,453 Total 506,110 60, ,972 Uderlyig profit Reorgaisatio costs Segmet profit BNE - Europe 30,871 (549) 30,322 BNE - North America 10,741 (166) 10,575 Eergy 11,810 (904) 10,906 AAP 12,539 (409) 12,130 Total 65,961 (2,028) 63,933 Group recociliatio Year eded 2016 Year eded Reveue 594, ,972 Recharged expeses (60,175) (60,862) Fee icome 534, ,110 Uderlyig profit 68,224 65,961 Reorgaisatio costs (5,614) (2,028) Segmet profit 62,610 63,933 Uallocated expeses (6,733) (7,088) Operatig profit before amortisatio ad impairmet of acquired itagibles ad 55,877 56,845 trasactio related costs Amortisatio ad impairmet of acquired itagibles ad trasactio related costs (17,890) (41,940) Operatig profit 37,987 14,905 Net fiace costs (5,173) (5,050) Profit before tax 32,814 9, Report ad Accouts 2016

49 Accouts Carryig amout of segmet assets Year eded Year eded 2016 Segmet depreciatio ad amortisatio Year eded Year eded 2016 BNE - Europe 342, ,159 9,423 8,848 BNE - North America 80,441 74,821 5,303 6,355 Eergy 101, ,440 2,468 5,219 AAP 147, ,009 8,043 7,354 Uallocated 373 4, Group total 672, ,674 25,860 28,592 The table below shows reveue ad fees to exteral customers based upo the coutry from which billig took place: Reveue Year eded 2016 Year eded Year eded 2016 Fees Year eded UK 220, , , ,876 Australia 134, , ,366 97,317 USA 91, ,290 83,486 93,180 Norway 69,528 48,587 68,129 47,255 Netherlads 31,759 28,955 26,803 24,231 Irelad 27,190 23,766 24,585 20,186 Caada 15,172 18,516 13,927 17,637 Other 4,129 7,597 4,061 7,428 Total 594, , , ,110 Carryig amout of o curret assets As at 2016 As at UK 202, ,772 Australia 108,309 96,477 USA 62,144 56,684 Irelad 40,537 36,169 Norway 44,672 38,741 Caada 13,857 11,628 Netherlads 18,463 16,960 Other 8 12 Total 490, ,443 rpsgroup.com 49

50 Notes to the Cosolidated Fiacial Statemets cotiued 4. Amortisatio ad impairmet of acquired itagibles ad trasactio related costs Year eded 2016 Year eded Amortisatio of acquired itagibles 17,470 20,491 Impairmet of acquired itagibles 20,040 Adjustmets to cosideratio payable Trasactio costs 233 1,160 17,890 41,940 The impairmet of acquired itagibles i arose i the followig segmets as a result of reduced prospects of busiesses with exposure to the oil ad gas sector: Year eded Eergy 16,612 BNE - North America 2,927 AAP 501 Total 20,040 The charge was i respect of customer relatios, itellectual property, software ad brad. We used the higher of the value i use or fair value less costs to sell to estimate the recoverable amouts of the assets. 5. Operatig profit - by ature of expese Year eded 2016 Year eded Reveue 594, ,972 Staff costs (see ote 7) (290,024) (248,296) Subcosultat costs (129,395) (127,660) Other employmet related costs (20,702) (18,621) Depreciatio of owed assets (8,371) (8,086) Depreciatio of assets held uder fiace leases (19) (15) Loss o disposal of fixed assets (540) (151) Operatig lease retals payable - property (14,119) (12,339) Operatig lease retals payable - equipmet ad motor vehicles (4,967) (4,636) Travel costs (13,434) (12,411) Office costs (19,550) (18,101) Amortisatio of acquired itagibles (17,470) (20,491) Impairmet of acquired itagibles (20,040) Adjustmets to cosideratio payable (187) (249) Bad debt provisio 4,294 (8,329) Other trasactio related costs (233) (1,160) Other costs (41,767) (51,482) Operatig profit 37,987 14, Report ad Accouts 2016

51 Accouts 6. Net fiacig costs Year eded 2016 Year eded Fiace costs: Iterest ad charges o loas, overdraft ad fiace leases (3,982) (3,847) Amortisatio of prepaid fiacig costs (359) (299) Iterest payable o deferred cosideratio (990) (1,086) (5,331) (5,232) Fiace icome: Deposit iterest receivable Net fiacig costs (5,173) (5,050) 7. Employee beefit expese Year eded 2016 Year eded Wages ad salaries 251, ,977 Social security costs 23,714 20,847 Pesio costs - defied cotributio plas 12,248 10,303 Pesio costs - defied beefits plas Share based paymet expese - equity settled 2,184 1, , ,296 Average umber of employees (icludig Executive Directors) was: Fee earig staff 4,235 4,094 Support staff ,099 5,054 The Group cosiders the Directors to be the key maagemet persoel ad details of Directors remueratio are icluded i the Remueratio Committee Report from page 28. The share based paymet charge i respect of key maagemet persoel was 4,000 (: credit of 245,000). rpsgroup.com 51

52 Notes to the Cosolidated Fiacial Statemets cotiued 8. Auditors remueratio Durig the year, the Group (icludig its overseas subsidiaries) obtaied the followig services from the Group s auditors at costs as detailed below: Year eded 2016 Year eded Statutory audit of the Compay's aual accouts Statutory audit of the Group's subsidiaries Total audit fees Iterim review Other services 27 Total assurace services Tax compliace services Tax advisory services Services i relatio to taxatio Other services 51 4 Total fees Icome taxes Aalysis of tax expese/(credit) i the icome statemet for the year: Year eded 2016 Year eded Curret tax: UK Corporatio tax 3,115 1,656 Overseas tax 7,297 11,300 Adjustmets i respect of prior years (49) (364) 10,363 12,592 Deferred tax: Origiatio ad reversal of timig differeces (2,589) (9,332) Effect of chage i tax rate (223) (826) Adjustmets i respect of prior years (2,630) (9,579) Total tax charge to icome for the year 7,733 3,013 Aalysis of tax (credit)/expese ot icluded i icome for the year: Deferred tax (credit)/charge i other comprehesive icome (65) 63 Deferred tax charge/(credit) i equity for the year 63 (63) 52 Report ad Accouts 2016

53 Accouts The effective tax rate for the year o profit before tax is 23.6% (: 30.6%). The effective tax rate for the year o profit before tax, amortisatio ad impairmet of acquired itagibles ad trasactio related costs is 27.7% (: 29.6%) as show i the table below: Year eded 2016 Year eded Total tax expese i Icome Statemet 7,733 3,013 Add back: Tax o amortisatio ad impairmet of acquired itagibles ad trasactio related costs 6,292 12,304 Adjusted tax charge o the profit for the year 14,025 15,317 Profit before tax, amortisatio ad impairmet of acquired itagibles ad trasactio related costs 50,704 51,795 Adjusted effective tax rate 27.7% 29.6% The Group operates i ad is subject to icome tax i may jurisdictios. The weighted average tax rate is derived by weightig the rates i those jurisdictios by the profits before tax eart there. It is sesitive to the statutory tax rates that apply i each jurisdictio ad the geographic mix of profits. The statutory tax rates i our mai jurisdictios were UK 20% (: 20.25%), Australia 30% (: 30%), US 39% (: 37%). The geographic mix of profits was impacted by the impairmet of certai itagible assets which was ot repeated i The impact of the chage i the tax rates ad mix of profits was that the weighted average tax rate icreased to 25.1% i 2016 from 24.5% i. The actual tax charge differs from the amout derived by applyig the weighted average rate to the profit before tax for the reasos set out i the followig recociliatio: Year eded 2016 Year eded Profit before tax 32,814 9,855 Tax at the weighted average rate of 25.1% (: 24.5%) 8,240 2,417 Effect of: Irrecoverable witholdig tax suffered 1, Impact of itercompay fiacig (1,664) (1,403) Effect of chage i tax rates (223) (826) Other differeces 57 1,675 Adjustmets i respect of prior years Total tax expese for the year 7,733 3,013 The Group operates, maily through our Eergy busiesses, i jurisdictios that impose withholdig taxes o reveue eared i those jurisdictios. This tax may be off-set agaist domestic corporatio tax either i the curret year or i the future withi certai time limits. To the extet that full recovery is ot achieved i the curret year or is ot cosidered possible i future years the withholdig tax is charged to the icome statemet. The impact of itercompay fiacig relates to the fudig of US operatios. New legislatio itroduced i the UK i respose to the OECD s Base Erosio ad Profit Shiftig project (BEPS) will apply from 1 Jauary 2017 which will reduce the impact i future periods. Durig the year ew legislatio i the UK reduced the corporatio tax rate by 1% to 17% from April I Norway the rate reduced by 1% to 24% from 1 Jauary These chages have resulted i a icome statemet credit arisig from the reductio i the balace sheet carryig value of et deferred tax liabilities to reflect the aticipated rate of tax at which those liabilities are expected to reverse. Other differeces iclude expeses ot deductible for tax purposes such as etertaiig, share scheme charges, depreciatio of fixed assets which do ot qualify for capital allowaces ad trasactio related costs. They also iclude items that are deductible for tax purposes, such as goodwill ad other asset amortisatio, but are ot icluded i the icome statemet. The other differeces were higher tha i 2016 as they icluded the impact of higher trasactio related costs ad the impairmets of itagible assets. rpsgroup.com 53

54 Notes to the Cosolidated Fiacial Statemets cotiued 10. Earigs per share The calculatios of basic ad diluted earigs per share were based o the profit attributable to ordiary shareholders ad a weighted average umber of ordiary shares outstadig durig the related period as show i the table below: /000s Year eded 2016 Year eded Profit attributable to ordiary shareholders 25,081 6,842 Weighted average umber of ordiary shares for the purposes of basic earigs per share 220, ,166 Effect of employee share schemes 1,237 1,269 Weighted average umber of ordiary shares for the purposes of diluted earigs per share 222, ,435 Basic earigs per share (pece) Diluted earigs per share (pece) The Directors cosider that earigs per share before amortisatio ad impairmet of acquired itagible ad trasactio related costs provides a more meaigful measure of the Group s performace tha statutory earigs per share. The calculatios of adjusted earigs per share were based o the umber of shares as above ad are show i the table below: Year eded 2016 Year eded Profit attributable to ordiary shareholders 25,081 6,842 Amortisatio ad impairmet of acquired itagibles ad trasactio related costs (ote 4) 17,890 41,940 Tax o amortisatio ad impairmet of acquired itagibles ad trasactio related costs (ote 9) (6,292) (12,304) Adjusted profit attributable to ordiary shareholders 36,679 36,478 Adjusted basic earigs per share (pece) Adjusted diluted earigs per share (pece) Report ad Accouts 2016

55 Accouts 11. Itagible assets Itellectual property rights Customer relatioships Order backlog Trade ames No compete agreemets Software Goodwill Total Cost: At 1 Jauary , ,508 17,881 8, , , ,177 Additios 3, ,279 13,249 Adjustmets to prior year estimates Exchage differeces ,985 2,686 1, ,300 57,517 At ember , ,653 21,187 9, , , ,477 Aggregate amortisatio ad impairmet losses: At 1 Jauary ,257 73,749 15,469 7, ,151 12, ,519 Amortisatio 12 13,073 2,275 1, ,470 Exchage differeces ,434 2,387 1, ,980 At ember ,859 97,256 20,131 9, ,238 12, ,969 Net book value at ember ,397 1, , , ,508 Itagible asset additios i 2016 have bee recogised at their provisioal fair values (see ote 27). Acquisitios i were origially stated at provisioal values. These fair values have ow bee fialised. The 534,000 adjustmet relates to adjustmets to the valuatio of cosideratio i Metier ad property, plat ad equipmet i EIG. Itellectual property rights Customer relatioships Order backlog Trade ames No compete agreemets Software Goodwill Total Cost: At 1 Jauary 3, ,660 14,661 6, , , ,825 Additios 13,990 3,689 2,347 1,362 40,580 61,968 Adjustmets to prior year estimates Exchage differeces 141 (2,142) (469) (274) 16 (136) (7,844) (10,708) At ember 3, ,508 17,881 8, , , ,177 Aggregate amortisatio ad impairmet losses: At 1 Jauary 1,172 43,239 11,308 4, ,221 73,829 Amortisatio ,999 4,371 2, ,491 Impairmet 1,672 18, ,040 Exchage differeces 80 (566) (210) (150) 16 (11) (841) At ember 3,257 73,749 15,469 7, ,151 12, ,519 Net book value at ember 12 43,759 2,412 1,305 1, , ,658 Goodwill Goodwill acquired i a busiess combiatio is allocated at acquisitio to the groups of cash geeratig uits (CGUs) that are expected to beefit from that busiess combiatio. The carryig amout of goodwill has bee allocated as follows: rpsgroup.com 55

56 Notes to the Cosolidated Fiacial Statemets cotiued 11. Itagible assets cotiued As at 2016 As at BNE: Europe (UK ad Irelad) 162, ,116 BNE: Europe (Netherlads) 9,836 9,118 BNE: Europe (Norway) 34,108 27,361 BNE: North America 47,789 40,064 AAP 90,875 76,523 Eergy 67,459 65, , ,503 The Group tests aually for impairmet at year ed. The determiatio of whether or ot goodwill has bee impaired requires a estimate to be made of the value i use of the CGU groups to which goodwill has bee allocated. The value i use calculatio icludes estimates about the future fiacial performace of the CGUs. I all cases the approved budget for the followig fiacial year forms the basis for the cash flow projectios for a CGU. The cash flow projectios i the four fiacial years followig the budget year reflect maagemet s expectatios of the medium-term operatig performace of the CGU ad the growth prospects i the CGU s market. Thereafter, a perpetuity is applied. Key assumptios The key assumptios i the value i use calculatios are the discout rates applied, the growth rates ad margis assumed over the forecast period. Discout rate applied The discout rate applied to a CGU represets a pre-tax rate that reflects the market assessmet of the time value of moey at the ed of the reportig period ad the risks specific to the CGU. The Group bases its estimate for the pre-tax discout rate o its weighted average cost of capital (WACC). The iputs to this calculatio are derived from market ad idustry data. The discout rates applied to the CGUs are i the rage 10.1% to 11.6% (: 10.4% to 13.6%). Growth rates The growth rates applied reflect maagemet s judgemet regardig the potetial future performace of the busiess. These icorporate the expected recovery of CGUs affected by the -16 reductio i oil price ad the past experiece of the Group as it emerged from previous recessios. We expect the Group s Eergy busiesses to recover i respose to the stabilisatio of the oil price ad ay subsequet expasio of E&P ivestmet. The medium term comprises the years 2018 to The average real growth rate used durig this period is betwee 2.5% ad 7.5%, although particular years may be higher or lower tha this rate reflectig market coditios. The log term growth rate applied to the perpetuity calculatios was betwee 2.0% ad 2.5% per aum (: 2.0% ad 2.5%) reflectig the average log term EBIT growth rates of the ecoomies i which the CGUs are based. The assumptios used for the most sigificat groups of CGUs by amout of goodwill are as follows: Post tax discout rate Medium term real growth rate excludig iflatio Log term growth rate BNE: E (UK ad Irelad) 10.2% 3.0% 2.1% AAP 11.2% 2.5% 2.5% Eergy (global) 11.3% 7.5% 2.2% Summary of results Durig the year, all goodwill was tested for impairmet with o impairmet charge resultig (: il). 56 Report ad Accouts 2016

57 Accouts Sesitivity of results to chages i estimates The Group s CGUs all have sigificat headroom with the exceptio of Eergy. Aside from Eergy, the Group does ot cosider the chages i estimates that would result i a material adjustmet to the carryig amouts of assets ad liabilities i 2017 to be reasoably possible. The valuatio of goodwill allocated to the Eergy CGU group is most sesitive to the achievemet of the 2017 budget. Budgets comprise forecasts of reveue, staff costs ad overheads based o curret ad aticipated market coditios that have bee cosidered ad approved by the Board. Whilst we are able to maage staff costs, direct costs ad overheads, the reveue projectios are iheretly ucertai due to the short term ature of our order book ad the oil ad gas market coditios which remais upredictable. The Eergy market has udergoe a sigificat dowtur over the past 2 years ad has oly recetly showed sigs of stabilisatio. Eergy uderperformed substatially agaist its budget i 2016 ad whilst ot probable, it is possible that further uderperformace may occur i 2017 if the oil price drops back to the lows experieced i 2016 or expediture by our cliets reduces. It is also reasoably possible that Eergy exceeds its budget if market coditios allow. A 60% uderperformace agaist budget would geerate a impairmet charge of 28 millio. For 2017, we cosider it reasoably possible that Eergy goodwill may suffer a impairmet charge of up to 28 millio if market coditios worse sigificatly. A 34% uderperformace agaist budget would reduce headroom for the Eergy CGU group to il but would ot result i a impairmet charge. rpsgroup.com 57

58 Notes to the Cosolidated Fiacial Statemets cotiued 12. Property, plat ad equipmet Freehold lad ad buildigs Alteratios to leasehold premises Motor vehicles Fixtures, fittigs, IT ad equipmet Cost: At 1st Jauary ,917 7,583 2,824 61,281 80,605 Additios 19 1, ,185 7,678 Disposals (3,255) (415) (3,093) (6,763) Additios through acquisitio Foreig exchage differeces 1, ,996 7,546 At ember ,229 6,360 3,144 69,464 89,197 Depreciatio: At 1st Jauary 2,514 4,501 1,607 45,479 54,101 Charge for the year 217 1, ,559 8,390 Disposals (2,754) (396) (2,851) (6,001) Foreig exchage differeces ,206 4,259 At ember ,040 3,282 2,034 52,393 60,749 Net book value at ember ,189 3,078 1,110 17,071 28,448 Total Freehold lad ad buildigs Alteratios to leasehold premises Motor vehicles Fixtures, fittigs, IT ad equipmet Cost: At 1 Jauary 9,576 7,114 2,906 61,401 80,997 Additios ,844 8,109 Disposals (220) (285) (593) (5,685) (6,783) Trasfers 375 (375) Additios through acquisitio Foreig exchage differeces (453) (306) (136) (1,536) (2,431) At ember 8,917 7,583 2,824 61,281 80,605 Depreciatio: At 1 Jauary 2,600 3,735 1,661 45,630 53,626 Charge for the year 194 1, ,283 8,101 Disposals (175) (282) (530) (5,181) (6,168) Trasfers 150 (150) Foreig exchage differeces (105) (180) (70) (1,103) (1,458) At ember 2,514 4,501 1,607 45,479 54,101 Net book value at ember 6,403 3,082 1,217 15,802 26,504 Total 58 Report ad Accouts 2016

59 Accouts 13. Subsidiaries A list of the Group s subsidiaries, icludig the ame, coutry of icorporatio ad proportio of owership iterests is give i Note 6 to the Paret Compay s fiacial statemets o page Trade ad other receivables As at 2016 As at Trade receivables 118, ,718 Accrued icome 33,294 28,533 Prepaymets 9,536 10,716 Other receivables 4,110 5, , ,430 Trade receivables ad accrued icome et of provisio for impairmat are show below. As at 2016 As at Trade receivables 124, ,593 Provisio for impairmet (6,038) (10,875) Trade receivables et 118, ,718 As at 2016 As at Accrued icome 37,710 32,105 Provisio for impairmet (4,416) (3,572) Accrued icome et 33,294 28,533 All amouts show uder trade ad other receivables fall due withi oe year. The carryig value of trade ad other receivables is cosidered a reasoable approximatio of fair value due to their short term ature ad the provisios for impairmet recorded agaist them. The idividually impaired balaces maily relate to items uder discussio with customers. Certai trade receivables are past due but have ot bee impaired. These relate to customers where we have o history of default ad o cocers over their fiacial situatio. The age of fiacial assets past due but ot impaired is as follows: As at 2016 As at Not more tha three moths 10,201 11,407 More tha three moths 11,735 9,009 21,936 20,416 rpsgroup.com 59

60 Notes to the Cosolidated Fiacial Statemets cotiued 14. Trade ad other receivables cotiued Movemets i impairmet Trade receivables Accrued icome Total As at 1 Jauary ,875 3,572 14,447 Impairmet charge 2,155 3,443 5,598 Recoveries (6,449) (1,360) (7,809) Receivables writte off durig the year as ucollectible (1,076) (1,550) (2,626) Additios through acquisitios Exchage differeces As at ember ,038 4,416 10,454 As at 1 Jauary 4,464 4,062 8,526 Impairmet charge 8,838 2,878 11,716 Recoveries (509) (1,711) (2,220) Receivables writte off durig the year as ucollectible (2,081) (1,681) (3,762) Additios through acquisitios Exchage differeces 17 (151) (134) As at ember 10,875 3,572 14,447 The carryig amouts of the Group s trade ad other receivables are deomiated as follows: 2016 UK Poud Sterlig 58,946 50,107 US Dollar 29,112 40,455 Euro 22,754 23,538 Australia Dollar 31,989 24,578 Caadia Dollar 8,563 5,376 Norwegia Kroe 13,380 11,598 Other 860 1, , ,430 The maximum exposure to credit risk at the reportig date is the carryig amout of each class of receivable metioed above. 15. Trade ad other payables As at 2016 As at Trade payables 33,825 30,375 Accruals 42,039 36,781 Deferred icome 24,389 20,597 Creditors for taxatio ad social security 17,850 15,695 Other payables 7,062 8, , ,309 All amouts show uder trade ad other payables fall due for paymet withi oe year. The carryig values of trade ad other payables are cosidered to be a reasoable approximatio of fair value due to the short term ature of these liabilities. 60 Report ad Accouts 2016

61 Accouts 16. Borrowigs As at 2016 As at Bak loas 43,312 42,902 US loa otes 57,571 53,116 Bak overdraft 479 Fiace lease creditor ,919 96,580 Arragemet fees (997) 99,922 96,580 Bak loas, otes ad overdraft Fiace lease creditor as at ember 2016 as at ember Bak Fiace Arragemet loas ad lease fee Total overdraft creditor Total The borrowigs are repayable as follows: Amouts due for settlemet withi 12 moths I the secod year I the third to fifth years iclusive 100, ,883 42,902 42,902 Over five years 53,116 53,116 Amout due for settlemet after 12 moths 100, ,883 96, ,055 Arragemet fee previously settled (997) (997) Total 100, (997) 99,922 96, ,580 The arragemet fees were icurred i 2014 ad ad icluded i prepaymets at ember. The pricipal features of the Group s borrowigs are as follows: (i) A ucommitted 3,000,000 bak overdraft facility, repayable o demad. (ii) A ucommitted Australia Dollar deomiated overdraft facility of AUD 1,500,000 repayable o demad. (iii) The Group has oe pricipal bak facility: a multicurrecy revolvig credit facility of 150,000,000 with Lloyds Bak plc ad HSBC Bak plc, expirig i Term loas draw dow uder this facility carry iterest fixed for the term of the loa equal to LIBOR plus a margi determied by referece to the total bak borrowig of the Group. There were loas draw totallig 43,312,000 (: 42,902,000) at ember The facility is guarateed by the Compay ad certai subsidiaries but o security over the Group s assets exists. (iv) I additio, the Group has issued seve year US private placemet otes of $34,070,000 ad 30,000,000 with fixed iterest chargeable at 3.84% ad 3.98% respectively. These otes were draw o 30 September 2014 ad are repayable o 30 September The otes are guarateed by the Compay ad certai subsidiaries but o security over the Group s assets exists. The carryig amouts of short term borrowigs approximate their fair values, as the impact of discoutig is ot sigificat. The carryig amouts of our log term borrowigs approximate fair value. rpsgroup.com 61

62 Notes to the Cosolidated Fiacial Statemets cotiued 16. Borrowigs cotiued Liquidity risk The Group has strog cash flow ad the fuds geerated by operatig compaies are maaged o a coutry basis. The Group also cosiders its log-term fudig requiremets as part of the aual busiess plaig cycle. Loa liquidity risk profile 2016 <1 year 3,201 2, years 3,201 2,849 >2 but <5 years 108,265 51,083 >5 years 54, , ,448 The liquidity risk profile above shows the expected cashflows i respect of the Group s loa facilities comprisig paymets of capital ad iterest assumig that the loa balace at year ed remais costat util expiry of the facilities ad foreig exchage rates remai costat at the rates existig at the year ed. 17. Deferred cosideratio As at 2016 As at Amout due withi oe year 13,376 20,383 Amout due betwee oe ad two years 1,625 9,708 Amout due betwee two ad five years Total deferred cosideratio payable 15,010 30, Report ad Accouts 2016

63 Accouts 18. Provisios Property The provisio for property costs relates to oerous operatig lease retals ad related costs o vacated property ad will be utilised withi oe year. Warraty This provisio is i respect of cotractual obligatios ad is expected to be utilised withi oe to two years. Dilapidatios The dilapidatios provisio is i respect of reistatemet obligatios related to leasehold properties ad will be utilised withi ie years. Property Warraty Dilapidatios Total As at 1 Jauary ,268 2,803 Additioal provisio i the year ,844 Utilised i year (157) (228) (680) (1,065) Released (78) (162) (240) Arisig o acquisitio of subsidiary Exchage differece As at ember ,348 3,599 As at 2016 As at Due as follows: Withi oe year 1,809 1,161 After more tha oe year 1,790 1,642 3,599 2,803 The carryig value of the provisios disclosed above is a reasoable approximatio of their fair value. rpsgroup.com 63

64 Notes to the Cosolidated Fiacial Statemets cotiued 19. Deferred taxatio Fixed asset timig differeces Goodwill ad itagible assets Employmet beefits Share based paymets Provisios ad other timig differeces At 1 Jauary (273) (11,871) 2, (8,831) Credit/(charge) to icome for the year 201 9,676 (166) (230) (728) 8,753 (Charge)/credit to icome due to chage i tax rate (77) 990 (21) 16 (82) 826 Credit/(charge) to equity for the year 63 (63) Additios through acquisitios 12 (6,993) 216 (620) (7,385) Exchage differeces (31) 1,003 (164) At ember (168) (7,195) 2,264 (33) (630) (5,762) Disclosed withi liabilities 678 (13,314) 2,235 (33) 391 (10,043) Disclosed withi assets (846) 6, (1,021) 4,281 Credit/(charge) to icome for the year 968 1,691 (21) (74) (157) 2,407 (Charge)/credit to icome due to chage i tax rate (37) 300 (9) 8 (39) 223 Credit/(charge) to equity for the year 65 (63) 2 Additios through acquisitios (675) (675) Exchage differeces 6 (628) (116) (287) At ember (6,507) 2,748 (160) (942) (4,092) Disclosed withi liabilities 622 (12,314) 2,735 (185) (903) (10,045) Disclosed withi assets 147 5, (39) 5,953 Total Legislatio has bee eacted to reduce the rate of corporatio tax i the UK to 17% from 1 April 2020 ad Norway to 24% from Jauary Accordigly deferred tax assets ad liabilities i both coutries have bee calculated at the reduced rates of corporatio tax which materially reflects the rate for the period i which the deferred tax assets ad liabilities are expected to reverse. No deferred tax liability is recogised o temporary differeces of 33,130,000 (: 36,964,000) related to the uremitted earigs of overseas subsidiaries as the Group is able to cotrol the timig of the reversal of these temporary differeces ad it is probable that they will ot reverse i the foreseeable future. The amout of tax that would be payable o the uremitted earigs is 1,876,000 (: 7,370,000). Deferred icome tax assets ad liabilities are offset where there is a legally eforceable right to offset curret tax assets agaist curret tax liabilities ad whe the deferred icome taxes relate to the same fiscal authority. 64 Report ad Accouts 2016

65 Accouts 20. Share capital as at ember 2016 as at ember Authorised Number Authorised Authorised Number Authorised Ordiary shares of 3p each 240,000,000 7, ,000,000 7, Issued ad fully paid Number Number Ordiary shares of 3p each At 1 Jauary 222,234,251 6, ,347,707 6,640 Issued uder the Share Icetive Pla 905, , Issued i respect of the Performace Share Pla 295, , At ember 223,435,014 6, ,234,251 6,667 Number As at 2016 As at Ordiary shares held by the ESOP Trust 2,497,500 2,211,269 Ordiary shares held by the SIP Trust 4,428,223 4,103,643 The ESOP Trust has elected to waive ay divided o the uallocated ordiary shares held. The table below shows optios outstadig at ember 2016: Period exercisable Number Exercise price (p) , , , ,000 rpsgroup.com 65

66 Notes to the Cosolidated Fiacial Statemets cotiued 21. Other reserves Merger reserve Employee trust Traslatio reserve At 1 Jauary 21,256 (10,776) 1,071 11,551 Exchage differeces (9,181) (9,181) Issue of ew shares (1,221) (1,221) At ember 21,256 (11,997) (8,110) 1,149 Exchage differeces 41,429 41,429 Issue of ew shares (1,680) (1,680) At ember ,256 (13,677) 33,319 40,898 Total 22. Divideds Year eded 2016 Year eded Amouts recogised as distributios to equity holders durig the year: Fial divided for the year eded ember of 5.08p (2014: 4.42p) per share 11,267 9,668 Iterim divided for the year eded ember 2016 of 4.66p (: 4.66p) per share 10,346 10,305 21,613 19,973 Proposed fial divided for the year eded ember 2016 of 5.08p (: 5.08p) per share 11,315 11,260 The proposed fial divided for the year eded ember 2016 is subject to approval by shareholders at the Aual Geeral Meetig ad has ot bee icluded as a liability i the fiacial statemets. 23. Operatig lease arragemets At ember 2016 the Group s total remaiig commitmets as lessee uder o-cacellable operatig leases were as follows: as at ember 2016 as at ember Property Other Property Other Withi oe year 13,911 1,623 10,500 2,102 I two to five years 24,625 2,450 19,148 3,189 After five years 3,328 4, ,864 4,073 33,916 5, Report ad Accouts 2016

67 Accouts 24. Related party trasactios Related parties, followig the defiitios withi IAS 24, are the subsidiary compaies ad members of the Board ad their families. Trasactios betwee the Compay ad its subsidiaries have bee elimiated o cosolidatio ad are ot disclosed i this ote. The Group cosiders the Directors to be the key maagemet persoel. There were o trasactios withi the year i which the Directors had ay iterest. The Remueratio Committee Report cotais details of Board emolumets. 25. Notes to the Cosolidated Cash Flow Statemet Year eded 2016 Year eded Operatig profit 37,987 14,905 Adjustmets for: Depreciatio 8,390 8,101 Amortisatio of acquired itagible assets 17,470 20,491 Impairmet of acquired itagibles 20,040 Cosideratio fair value adjustmets Share based paymet expese 2,184 1,889 Loss o sale of property, plat ad equipmet EBITDAS 66,755 65,826 Decrease i trade ad other receivables 9,522 29,320 Icrease/(decrease) i trade ad other payables 1,976 (2,518) Cash geerated from operatios 78,253 92,628 The table below provides a aalysis of et bak borrowigs, comprisig cash ad cash equivalets, iterest bearig loas ad fiace leases, durig the year eded ember Prepaid At Cash flow Acquisitio arragemet fees Foreig exchage At 31 Dec 2016 Cash at bak 17,801 (5,821) 49 4,474 16,503 Overdrafts (479) 479 Cash ad cash equivalets 17,322 (5,342) 49 4,474 16,503 Bak loas ad otes (96,018) 6,921 (4,900) 997 (6,886) (99,886) Fiace lease creditor (83) 47 (36) (78,779) 1,626 (4,851) 997 (2,412) (83,419) The cash balace at ember 2016 icludes 3,036,000 (: 3,640,000) that is restricted i its use either as security or cliet deposits. 26. Major o-cash trasactios Major o cash trasactios durig the year are as follows: Year eded 2016 Year eded Depreciatio 8,390 8,101 Amortisatio of acquired itagibles 17,470 20,491 Impairmet of acquired itagibles 20,040 Share based paymet expese 2,184 1,889 28,044 50,521 rpsgroup.com 67

68 Notes to the Cosolidated Fiacial Statemets cotiued 27. Acquisitios O 25 April 2016 the Group completed the acquisitio of 100% of the issued share capital of DBK Parters Ltd, a UK based property project maagemet cosultacy that is icluded i the BNE: Europe segmet. This acquisitio broades ad stregthes the services the Group offers. The Group has allocated provisioal fair values to the et assets of DBK as it did ot have complete iformatio at the balace sheet date. The provisioal amouts recogised i respect of the idetifiable assets acquired ad liabilities assumed, the fair value of cosideratio ad the resultig goodwill are as follows: DBK Itagible assets: Order book 620 Customer relatios 3,160 Trade ames 190 Property, plat ad equipmet 131 Cash 49 Other assets 3,975 Other liabilities (8,360) Net assets acquired (235) Satisfied by: Iitial cash cosideratio 6,606 Fair value of deferred cosideratio 2,438 Total cosideratio 9,044 Goodwill 9,279 Goodwill arisig represets the value of the workforce acquired, potetial syergies, future cotracts ad access to ew markets. There is o tax deductible goodwill. The total fair value of receivables acquired was 1,663,000. The breakdow betwee gross receivables ad amouts estimated irrecoverable was as follows: Gross recievables 1,918 Estimated irrecoverable (255) Fair value of assets acquired 1,663 The vedors of DBK have etered ito warraty agreemets with the Group. The total udiscouted cash flow that could be receivable by the Group is betwee il ad 1,663,000. The Group does ot expect that these warraties will become receivable ad therefore has ot recogised a idemificatio asset o acquisitio. The Group icurred acquisitio related costs of 420,000 which have bee expesed through the icome statemet ad are icluded withi amortisatio of acquired itagibles ad trasactio related expeses. 68 Report ad Accouts 2016

69 Accouts The cotributio of DBK to the Group s results for the year is give below. Reveue 9,501 Fees 9,108 Operatig profit before amortisatio 1,491 Operatig profit 649 The proforma Group reveue ad operatig profit assumig that the acquisitio had bee completed o the first day of the year would have bee 598,703,000 ad 38,288,000 respectively. A recociliatio of the goodwill movemet i 2016 i respect of acquisitios made i ad 2016 is give i the table below. Goodwill at 1 Jauary 2016 Additios through acquisitio Adjustmets to prior year estimates Foreig exchage movemet Goodwill at ember 2016 Klotz 9,372 1,805 11,177 Metier 13, ,141 17,306 Iris 5,446 1,050 6,496 EIG 11, ,138 13,600 DBK 9,279 9,279 There were o accumulated impairmet losses at the begiig or ed of the period. No egative goodwill was recogised i or Defied beefit pesio scheme The Group has two defied beefit pesio schemes, arisig from the acquisitio i 2013 of the OEC Group. These schemes are closed to ew etrats. The schemes are admiistered by a fud that is legally separated from the compay. The trustees of the pesio fud are required by law to act i the iterest of the fud ad of all relevat stakeholders i the scheme. The trustees are resposible for the ivestmet policy with regard to the assets of the fud. Uder the plas, the employees are etitled to post-retiremet yearly istalmets amoutig to 66% of pesioable salary o attaimet of a retiremet age of 67. The pesioable salary is the differece betwee the curret salary of the employee ad the state retiremet beefit. The schemes expose the compay to actuarial risks such as: ivestmet risk, iterest rate risk, logevity risk ad salary risk. rpsgroup.com 69

70 Notes to the Cosolidated Fiacial Statemets cotiued 28. Defied beefit pesio scheme cotiued The most recet full actuarial valuatios of the plas assets ad preset value of the defied beefit liabilities were carried out i November 2016 for the two schemes by a qualified actuary. The pricipal assumptios used for the purposes of actuarial valuatio were as follows: 2016 Discout rate 2.10% 2.50% Expected rate of salary icrease 2.25% 2.50% Iflatio 2.00% 2.50% There are two defied beefit schemes i Norway; with the exceptio of the rates of pesio icrease i 2014 all pricipal assumptios are the same for both schemes. Oe scheme has assumptios of 2.0% ad the other used il % (: both used 3.0%). The assumed life expectatios o retiremet at age 65 are: Years 2016 Retirig today: Males Females This is based o Norway s stadard mortality table with modificatios to reflect expected chages i mortality. Amouts recogised i icome i respect of these defied beefit schemes are as follows: 2016 Curret service cost Net iterest expese Compoets of defied beefit costs recogised i profit or loss The service charge for the year has bee icluded i the icome statemet i admiistrative expeses. The et iterest expese has bee icluded withi fiace costs. Amouts recogised i the statemet of comprehesive icome are as follows: 2016 Actuarial losses/(gais) arisig from: Chages i fiacial assumptios 248 (205) Movemets i payroll tax 13 (29) Remeasuremet of the et defied beefit liability 261 (234) The amout icluded i the balace sheet arisig from the Group s obligatios i respect of its defied beefit retiremet beefit schemes is as follows: 2016 Preset value of defied beefit obligatios (4,253) (3,553) Fair value of pla assets 3,475 2,888 Net liability arisig from the defied beefit obligatios (778) (665) 70 Report ad Accouts 2016

71 Accouts Movemets i the preset value of defied beefit obligatios i the year were as follows: 2016 Defied beefit obligatio at 1 Jauary 3,553 4,158 Curret service cost Iterest cost Remeasuremet (gais)/losses: Actuarial (gais) arisig from chages i demographic assumptios (293) (9) Actuarial (gais) ad losses arisig from chages i fiacial assumptios 163 (405) Liabilities extiguished o settlemets (168) Exchage differeces 858 (522) Beefits paid (52) (61) Defied beefit obligatio at ember 4,253 3,553 Movemets i the fair value of pla assets i the year were as follows: 2016 Pla assets at 1 Jauary 2,888 2,930 Remeasuremet gai/(losses): The retur o pla assets (excludig amouts icluded i et iterest expese) Actuarial (losses) arisig from chages i fiacial assumptios 17 (181) Exchage differeces 268 (323) Cotributios from the employer Assets distributed o settlemet (106) Beefits paid (52) (61) Admiistratio costs (4) (6) Pla assets at ember 3,475 2,888 The major categories ad fair values of scheme assets at the ed of the reportig period were: 2016 Shares 8.4% 9.8% Other ivestmets 3.2% 2.0% Short term bods 28.8% 35.4% Term bods 47.5% 38.0% Property 12.1% 14.8% Total 100.0% 100.0% rpsgroup.com 71

72 Notes to the Cosolidated Fiacial Statemets cotiued 29. Fiacial Risk Maagemet (a) Capital maagemet The capital of the Group cosists of debt, which icludes the borrowigs ad facilities disclosed i ote 16, cash ad cash equivalets ad equity attributable to equity holders of the paret, comprisig issued capital, reserves ad retaied earigs as disclosed i the cosolidated balace sheet ad otes 21 ad 22. The Group maages its capital to support its strategy, ad there were o chages i approach to capital maagemet durig the year. The borrowigs are maaged cetrally ad fuds are oward let to operatig subsidiaries as required. The Group has a committed 150 millio multi currecy revolvig credit facility that provides a high degree of flexibility. There are two fiacial coveats related to this facility; iterest cover must be o less tha 400% ad the ratio of Group et borrowigs (icludig deferred cosideratio) to EBITDAS adjusted to iclude the aualised cotributio of acquisitios i the year should be o greater tha 300%. These coveats are tested regularly ad were ot breached durig the year ad have ot bee sice the year ed. Seve year otes with pricipal of 30.0 millio ad $34.1 millio were issued i September 2014 bearig fixed iterest at 3.98% ad 3.84% per aum, respectively. There are two fiacial coveats associated with these otes facility that are the same as for the revolvig credit facility above. These loa otes represet the Group s core debt. The Group s busiesses provide a good level of cash geeratio which helps fud future growth. The Group seeks to miimise borrowigs by utilisig cash geerated by operatios that is surplus to the immediate operatig eeds of the busiess ad a objective is to maitai a miimum level of cash at bak. (b) Fiacial istrumets The Group s fiacial assets comprise cash ad trade ad other receivables. The Group s fiacial liabilities comprise bak loas, deferred cosideratio ad trade ad other payables. It is, ad has bee throughout the period uder review, the Group s policy that o tradig i fiacial istrumets shall be udertake. Fair values The fair value of the fiacial assets ad liabilities of the Group are cosidered to be materially equivalet to their book value. The classificatio of fiacial istrumets is show i the table below. As at 2016 As at Cash 16,503 17,801 Trade ad other receivables 156, ,714 Fiacial assets 172, ,515 Borrowigs 99,922 96,580 Deferred cosideratio 15,010 30,273 Trade ad other payables 89,021 80,982 Fiacial liabilities 203, ,835 Iterest rate ad currecy risk are the most sigificat aspects for the Group i the area of fiacial istrumets. It is exposed to a lesser extet to liquidity risk that is reviewed i ote 16. The Board reviews ad agrees policies for maagig each of these risks ad they are summarised below. (c) Iterest rate risk The Group draws dow term loas, typically betwee oe ad three moths, agaist its revolvig credit facility i GB Pouds ad Norwegia Kroe at fixed rates of iterest for the term of the loa. The Group has ot etered ay cotracts to fix iterest rates beyod the period of the term loas but will cosider doig so if borrowigs become sigificatly larger ad loger term. The Group s overdraft bears iterest at floatig rates. Surplus fuds are placed o short-term deposit or held withi istat access deposit accouts earig floatig rate iterest. 72 Report ad Accouts 2016

73 Accouts Iterest rate risk ad profile of fiacial liabilities The iterest rate risk profile of the Group s fiacial liabilities at ember was as follows: 2016 Floatig rate Fixed rate No iterest bearig Total (restated) 2016 (restated) Sterlig 33,964 37,479 32,213 32,927 29,506 31,006 95, ,412 Euro 9,905 6,093 9,905 6,093 Australia Dollar 3,696 9,084 18,130 14,403 21,826 23,487 Caadia Dollar 868 6,553 4,849 6,553 5,717 US Dollar 31,423 31,261 11,578 13,761 43,001 45,022 Norwegia Kroe 8,612 5,902 5,024 9,332 13,052 10,445 26,688 25,679 Other At ember 42,576 43,381 72,356 83,472 89,021 80, , ,835 The maturity profile of fiacial liabilities at ember was as follows: 2016 Floatig rate Fixed rate No iterest bearig Total (restated) 2016 (restated) Withi oe year ,412 20,429 84,735 77,178 98,147 98,086 I oe to two years 1,625 9,745 1,611 1,191 3,236 10,936 I two to five years 42,576 42,902 57, ,628 1, ,523 44,556 Over five years 53,116 1,047 1,141 1,047 54,257 42,576 43,381 72,356 83,472 89,021 80, , ,835 The weighted average iterest rate ad term for iterest bearig fiacial liabilities is show below: Fixed ad floatig rate fiacial liabilities Weighted average iterest rate % Fixed rate fiacial liabilities Weighted average period for which rate is fixed moths (restated) Sterlig Australia Dollar Caadia Dollar US Dollar Norwegia Kroe Cash balaces at year ed: As at 2016 As at Sterlig 1, Euro 1,341 1,189 US Dollar 2,817 5,391 Australia Dollar 1,877 2,968 Caadia Dollar 2,761 3,285 Norwegia Kroe 4,607 3,273 Malaysia Riggit Other ,503 17,801 rpsgroup.com 73

74 Notes to the Cosolidated Fiacial Statemets cotiued 29. Fiacial Risk Maagemet cotiued Cash balaces are held i either o-iterest bearig curret accouts or istat access deposit accouts earig floatig rate iterest. There are o iterest bearig trade ad other receivables. Borrowig facilities The Group has a committed revolvig credit facility that expires i The amout udraw uder this facility at 31 December 2016 was 106,688,000 (: 107,098,000). The Group also has a ucommitted 3,000,000 overdraft facility carryig floatig rate iterest. Iterest rate sesitivity The Group is maily exposed to iterest rate sesitivity i respect of its revolvig credit facility. A 1.0% decrease i iterest rates would icrease Group profit before tax by 728,000. A 1.0% icrease i iterest rates would decrease Group profit before tax by 728,000. (d) Foreig currecy risk The Group, which is based i the UK ad reports i sterlig, has sigificat ivestmets i overseas operatios i Australia, the USA, Norway, Netherlads, Irelad ad Caada that have fuctioal currecies other tha sterlig. As a result the Group s balace sheet ad icome statemet ca be affected by movemet i the exchage rate betwee sterlig ad the fuctioal currecies of overseas operatios. The most importat exchage rates as far as the Group is cocered is the GB Poud to Australia Dollar ad GB Poud to US Dollar. The fair value of the forward foreig exchage cotracts held at year ed was ot material. The Group does ot hedge balace sheet ad icome statemet traslatio exposures. A umber of the Group s operatios trasact i currecies other tha their fuctioal currecy. This creates a foreig currecy exposure that is moitored ad hedged cetrally usig a risk based approach. Foreig currecy sesitivity Sice the Group hedges the majority of its trasactioal foreig currecy exposures, the sesitivity of the results to trasactioal foreig currecy risk is ot material. (e) Credit risk It is Group policy, implemeted locally, to assess the credit risk of ew customers before eterig cotracts. The Group does ot eter ito complex derivatives to maage credit risk. The Group s exposure to credit risk is limited to the carryig amout of fiacial assets recogised at the balace sheet date. The Directors cosider the Group s fiacial assets that are ot impaired to be of good credit quality icludig those that are past due. See ote 14 for further detail o receivables that are past due. The Group s fiacial assets are ot secured by collateral advaced by couterparties. I respect of trade ad other receivables, the Group has a broad rage of cliets, the largest beig multi-atioal oil compaies, atioal oil compaies or substatial utility compaies. Ifrequetly (ad geerally for admiistrative reasos) there may be a build up of upaid ivoices. The credit risk for cash ad cash equivalets is cosidered egligible, sice the couterparties are reputable baks with high quality exteral credit ratigs. 74 Report ad Accouts 2016

75 Accouts 30. Share-based paymets Share scheme costs Year eded 2016 Year eded Share Icetive Pla ( SIP ) 1,356 1,220 Performace Share Pla ( PSP ) Bous Pla (249) Total share scheme costs 2,184 1,889 The followig tables set out details of material share schemes activity: SIP Year of grat Number outstadig New grats Releases Forfeits Number outstadig 2016 Vestig coditios ,360 (349,577) (14,783) 3 years ,392 (45,828) (30,158) 358,406 3 years 637,399 (59,677) (49,085) 528,637 3 years ,448 (25,495) (25,021) 800,932 3 years 1,436, ,448 (480,577) (119,047) 1,687,975 Year of grat Number outstadig 2014 New grats Releases Forfeits Number outstadig Vestig coditios ,986 (385,033) (15,953) 3 years ,442 (24,285) (30,797) 364,360 3 years ,934 (24,633) (35,909) 434,392 3 years 674,260 (12,618) (24,243) 637,399 3 years 1,315, ,260 (446,569) (106,902) 1,436,151 PSP Year of grat Number outstadig New grats Releases Lapses Number outstadig 2016 Vestig coditios ,027 (1,634) (27) 83,366 3 years ,638 (9,109) (990) 60,539 3 years ,132 (13,491) (3,999) 68,642 3 years ,482 (224,385) (2,927) 82,170 3 years ,481 (19,830) (35,896) 350,755 3 years 510,983 (26,952) (42,131) 441,900 1, 2 or 3 years , ,876 3 years 1,468, ,876 (295,401) (85,970) 1,614,248 rpsgroup.com 75

76 Notes to the Cosolidated Fiacial Statemets cotiued 30. Share-based paymets cotiued Year of grat Number outstadig 2014 New grats Releases Lapses Number outstadig Vestig coditios ,148 (2,148) 2 or 3 years ,828 (1,828) 1, 2 or 3 years ,248 (10,777) (9,444) 85,027 3 years ,112 (14,009) (3,465) 70,638 3 years ,219 (287,811) (1,276) 86,132 3 years ,706 (10,362) (5,862) 309,482 3 years ,778 (6,187) (2,110) 406,481 3 years 523,380 (1,054) (11,343) 510,983 1, 2 or 3 years 1,313, ,380 (334,176) (33,500) 1,468,743 SIP For the purposes of calculatig the fair value of coditioal shares awarded uder the SIP, the fair value was calculated as the market value of the shares at the date of grat as participats are etitled to receive divideds over the three year holdig period. SIP awards Fair value at measuremet date p p Weighted fair value p Holdig period 3 years The Group assumed a 5% aual lapse rated as at the date of grat for the above schemes ad all o-market based performace coditios would be satisfied i full (see accoutig policy 2(e)ii). PSP For the purposes of calculatig the fair value of coditioal shares awarded uder the PSP the fair value was calculated as the market value of the shares at the date of grat adjusted to reflect that participats are ot etitled to receive divideds over the performace period. PSP awards Fair value at measuremet date p p Weighted fair value p Holdig period 1, 2 or 3 years Expected divided yield 1.83% % 31. Evets after the balace sheet date There were o evets arisig after the balace sheet date requirig adjustmet to the year ed results or disclosure. 76 Report ad Accouts 2016

77 Accouts Paret Compay Balace Sheet Notes As at 2016 As at Fixed assets: Itagible assets Tagible assets ,121 Ivestmets 6 397, , , ,004 Curret assets: Debtors: - due withi oe year 7 77,578 64,196 Cash at bak ad i had ,905 64,196 Creditors: amouts fallig due withi oe year: 8 44,735 24,090 Net curret assets 33,170 40,106 Total assets less curret liabilities 431, ,110 Creditors: Amouts fallig due after more tha oe year 9 99,886 96,018 Provisio for liabilities Net assets 331, ,835 Capital ad reserves Called up share capital 12 6,703 6,667 Share premium accout , ,026 Profit ad loss reserve , ,459 Merger reserve 12 21,256 21,256 Employee trust shares 12 (13,677) (11,997) Other reserve 12 99,424 99,424 Total shareholders equity 331, ,835 These fiacial statemets were approved ad authorised for issue by the Board o 2 March The otes o pages 79 to 86 form part of these fiacial statemets. Dr Ala Heare, Director Gary Youg, Director O behalf of the Board of RPS Group Plc (compay umber: ). rpsgroup.com 77

78 Paret Compay Statemet of Chages i Equity Share capital Share premium Merger reserve Employee trust shares Profit ad loss reserve Other reserve At 1 Jauary 6, ,100 21,256 (10,776) 109, , ,471 Chages i equity durig : Issue of ew shares 27 1,926 (1,221) (730) 2 Share-based paymet expese 1,889 1,889 Retaied profit for the year 24,743 24,743 No-distributable loss (43,297) (43,297) Divided paid (ote 13) (19,973) (19,973) At ember 6, ,026 21,256 (11,997) 115,459 99, ,835 Chages i equity durig 2016: Issue of ew shares 36 2,327 (1,680) (688) (5) Share-based paymet expese 2,184 2,184 Retaied profit for the year 8,300 8,300 Divided paid (ote 13) (21,613) (21,613) At ember , ,353 21,256 (13,677) 103,642 99, ,701 Total The otes o pages 79 to 86 form part of these fiacial statemets. 78 Report ad Accouts 2016

79 Accouts Notes to the Paret Compay Fiacial Statemets 1. Accoutig policies RPS Group Plc (the Compay ) is a compay domiciled i the UK uder the Compaies Act. The address of the registered office is give o page 22. The ature of the Compay s operatios ad its pricipal activities are set out i the strategic report o pages 3 to 17. The fiacial statemets have bee prepared uder the historical cost covetio, modified to iclude certai items at fair value, ad i accordace with Fiacial Reportig Stadard 102 (FRS 102) issued by the Fiacial Reportig Coucil. The fuctioal ad presetatioal currecy of RPS Group Plc is cosidered to be pouds sterlig. RPS Group Plc meets the defiitio of a qualifyig etity uder FRS 102 ad has therefore take advatage of the disclosure exemptios available to it i respect of its fiacial statemets. Exemptios have bee take i relatio to share-based paymets, fiacial istrumets, presetatio of a cash flow statemet, itra-group trasactios ad remueratio of key maagemet persoel. Goodwill Goodwill arisig o the acquisitio of busiesses, represetig ay excess of the fair value of the cosideratio give over the fair value of the idetifiable assets ad liabilities acquired, is capitalised ad is writte off o a straight lie basis over its useful ecoomic life of up to 20 years. Provisio is made for ay impairmet. Valuatio of ivestmets Ivestmets held as fixed assets are stated at cost, less ay provisio for impairmet i value. Tagible fixed assets Tagible fixed assets are stated at cost, et of depreciatio ad ay provisio for impairmet. Depreciatio is provided o all tagible fixed assets at rates calculated to write off the cost, less estimated residual value of each asset o a straight lie basis over their expected useful lives as follows: Alteratios to leasehold premises Fixtures, fittigs, IT ad equipmet Life of lease 3 to 8 years All tagible fixed assets are expected to have il residual value. Operatig leases Retals uder operatig leases are charged o a straight-lie basis over the lease term, eve if the paymets are ot made o such a basis. Beefits received ad receivable as a icetive to sig a operatig lease are similarly spread o a straight-lie basis over the lease term. Foreig currecy traslatio Foreig currecy trasactios are traslated at the rates rulig whe they occurred. Foreig currecy moetary assets ad liabilities are traslated at the rates rulig at the balace sheet date. Pesio costs Cotributios to the Compay s defied cotributio pesio schemes are charged to the profit ad loss accout i the year i which they become payable. Share based employee remueratio The Compay s employees may beefit from a Group operated share based paymet arragemet. The fair value of equity settled awards for share based paymets is determied at grat ad expesed straight lie over the period from grat to the date of earliest ucoditioal exercise. The Group has calculated the fair market value of optios usig a biomial model ad for whole share awards the fair value has bee based o the market value of the shares at the date of grat adjusted to take ito accout some of the terms ad coditios upo which the shares were grated. Those fair values were charged to the icome statemet over the relevat vestig period adjusted to reflect actual ad expected vestig levels. rpsgroup.com 79

80 Notes to the Paret Compay Fiacial Statemets cotiued 1. Accoutig policies cotiued Taxatio Curret tax, icludig UK corporatio tax, is provided at amouts expected to be paid (or recovered) usig the tax rates ad laws that have bee eacted or substatively eacted by the balace sheet date. Deferred tax is recogised i respect of all timig differeces that have origiated but ot reversed at the balace sheet date where trasactios or evets that result i a obligatio to pay more tax i the future or a right to pay less tax i the future have occurred at the balace sheet date. Timig differeces are differeces betwee the Compay s taxable profits ad its results as stated i the fiacial statemets that arise from the iclusio of gais ad losses i tax assessmets i periods differet from those i which they are recogised i the fiacial statemets. Urelieved tax losses ad other deferred tax assets are recogised oly to the extet that, o the basis of all available evidece, it ca be regarded as more likely tha ot that there will be suitable taxable profits from which the future reversal of the uderlyig timig differeces ca be deducted. Deferred tax is measured usig the tax rates ad laws that have bee eacted or substatively eacted by the balace sheet date that are expected to apply to the reversal of the timig differece. Where items recogised i other comprehesive icome or equity are chargeable to or deductible for tax purposes, the resultig curret or deferred tax expese or icome is preseted i the same compoet of comprehesive icome or equity as the trasactio or other evet that resulted i the tax expese or icome. Employee Share Owership Pla (ESOP) The assets, icome ad expediture of the ESOP Trust are icorporated ito the Compay s fiacial statemets. Fiacial istrumets Disclosures o fiacial istrumets have ot bee icluded i the Compay s fiacial statemets as its cosolidated fiacial statemets iclude appropriate disclosures. i Fiacial assets Trade debtors ad other receivables are fiacial assets that are recogised at fair value o iceptio ad are subsequetly carried at amortised cost. They are subject to impairmet tests wheever evets or chages i circumstaces idicate that their carryig value may ot be recoverable. Impairmet losses are take to the profit ad loss accout as icurred. ii Fiacial liabilities Trade creditors ad other payables icludig bak loas are fiacial liabilities that are recogised at fair value o iceptio ad are subsequetly carried at amortised cost. 2. Critical accoutig judgemets ad key sources of estimatio ucertaity I the course of preparig the fiacial statemets, o judgemets have bee made i the process of applyig the Compay s accoutig policies, other tha those ivolvig estimatios, that have had a sigificat effect o the amouts recogised i the fiacial statemets. Sources of estimatio ucertaity I applyig the Compay s accoutig policies various trasactios ad balaces are valued usig estimates or assumptios. Should these estimates or assumptios prove icorrect, there may be a impact o the followig year s fiacial statemets. The oly source of estimatio ucertaity at the ed of 2016, that has a sigificat risk of resultig i a material adjustmet to the carryig amouts of assets ad liabilities durig 2017, relates to the testig for impairmet of the Compay s ivestmets. A impairmet of the carryig value of RPS Group Plc s ivestmet i its US subgroup is reasoably possible i 2017 because some of our busiesses there are exposed to the oil ad gas market. The valuatio of the ivestmet is most sesitive to the achievemet of the 2017 budget. The budget comprises forecasts of reveue, staff costs ad overheads based o curret ad aticipated market coditios that have bee cosidered ad approved by the Board. Whilst we are able to maage staff costs, direct costs ad overheads, reveue projectios are iheretly ucertai due to the short term ature of our order book ad oil ad gas market coditios. 80 Report ad Accouts 2016

81 Accouts The US busiess uderperformed agaist budget i 2016 ad whilst ot probable, it is possible that further uderperformace may occur i 2017 if the oil price drops back to the lows experieced i 2016 or expediture by our cliets reduces. Our US busiess may exceed budget if market coditios allow. A uderperformace agaist target may lead to a impairmet of this asset. The ivestmet value associated with the US busiess at ember was 144,552, Profit attributable to shareholders No profit ad loss accout is disclosed by the Paret Compay as allowed by Sectio 408 of the Compaies Act Year Year eded eded 2016 Profit for the year attributable to the shareholders of the Paret Compay, dealt with i the accouts of the Paret Compay 8,300 24,743 The remueratio of the auditors for the statutory audit of the Compay was 50,000 (: 50,000). 4. Itagible Assets Goodwill Cost At 1 Jauary 2016 ad at ember ,134 Amortisatio At 1 Jauary ,686 Charge for the year 66 At ember ,752 Net book value at ember Net book value at ember Tagible Assets Alteratios to leasehold premises Fixtures, fittigs, IT ad equipmet Cost or valuatio At 1 Jauary ,068 6,851 7,919 Additios Disposals (559) (249) (808) At ember ,856 7,365 Depreciatio At 1 Jauary ,938 6,798 Provided for the year Disposals (559) (246) (805) At ember ,190 6,617 Net book value at ember Net book value at ember ,121 Total rpsgroup.com 81

82 Notes to the Paret Compay Fiacial Statemets cotiued 6. Ivestmets 2016 Subsidiary udertakigs Cost At 1 Jauary 455, ,147 Additios 25,523 At ember , ,670 Provisios At 1 Jauary 58, Impairmet 57,397 At ember ,235 58,235 Net book value at ember , ,435 Durig 25,523,000 was ivested i the USA subgroup to fud the acquisitio of Klotz Associates Ic. ad Iris Evirometal. I the Group s ivestmet i its US busiess was impaired by 57,397,000. Subsidiary udertakigs The pricipal activity of the majority of our tradig subsidiaries is the provisio of cosultig services. The followig were the subsidiaries durig the year. Shares are held directly by RPS Group Plc except where marked by a asterisk where they are held by a subsidiary udertakig. Coutry of Proportio registratio of ordiary ad share operatio capital held Coutry of registratio ad operatio Proportio of ordiary share capital held C & B Plat Pty Ltd Australia 100% * RPS Aquaterra Pty Ltd Australia 100% * Coics (Brisbae) Pty Ltd Australia 100% * RPS Australia East Pty Ltd Australia 100% * Coics (Brisbae) Uit Trust Ltd Australia 100% * RPS Australia West Pty Ltd Australia 100% * Coics (Cairs) Pty Limited Australia 100% * RPS Cosultats Pty Ltd Australia 100% Coics (Gold Coast) Pty Ltd Australia 100% * RPS ECOS Pty Ltd Australia 100% * Coics (Mackay) Pty Ltd Australia 100% * RPS Eergy Pty Ltd Australia 100% * Coics (Miig & Ifrastructure) Pty Ltd Australia 100% * RPS Eergy Services Pty Ltd Australia 100% * Coics (Sushie Coast) Pty Ltd Australia 100% * RPS Eviromet ad Plaig Pty Ltd Australia 100% * Coics (Sushie Coast) Uit Trust Australia 100% * RPS Harper Somers O Sulliva Pty Ltd Australia 100% * Coics (Sydey) Pty Ltd Australia 100% * RPS HSO Subco Pty Ltd Australia 100% * Coics (Towsville) Pty Ltd Australia 100% * RPS Maidis Roberts Pty Ltd Australia 100% * Coics Positioig Pty Ltd Australia 100% * Rudall Blachard Associates Pty Limited Australia 100% * Coics Pty Ltd Australia 100% * Terraea Mappig Techologies Pty Ltd Australia 100% * ECL DM Pty Ltd Australia 100% * Troy Ikoda Australasia Pty Ltd Australia 100% * ECL Drillig Maagemet Pty Limited Australia 100% * Urba Blueprit Pty Ltd Australia 100% * ECL Pty Ltd Australia 100% * Vivo Desig Pty Ltd Australia 100% * EHA Pty Ltd Australia 100% * Whelas Corporatio Pty Limited Australia 100% * Everythig Ifrastructure Cosultig Pty Ltd Australia 100% * Whelas Isites Pty Limited Australia 100% * Everythig Ifrastructure Group Pty Ltd Australia 100% * RPS Cosultores do Brasil Ltda Brazil 100% * Everythig Ifrastructure Services Pty Ltd Australia 100% * Petroleum Istitute for Cotiuig Educatio Ltd Caada 100% * Geo Mappig Techologies Pty Ltd Australia 100% * Boyd Exploratio Cosultats Ltd Caada 100% * Itelliget Ifrastructure Pty Ltd Australia 100% * HMA Lad Services Ltd Caada 100% * Maidis Roberts Employee Beefits Pty Ltd Australia 100% * Maverick Lad Cosultats 2012 Ltd Caada 100% * Massie Cosgrove Pty Ltd Australia 100% * Rolad Resources 2012 Ic Caada 100% * Natural Solutios Evirometal Cosultats Pty Ltd Australia 100% * RPS Caada Ltd Caada 100% * Newco (Brisbae) Pty Ltd Australia 100% * RPS Eergy Caada Ltd Caada 100% * Newco (Sushie Coast) Pty Ltd Australia 100% * Aquaterra Iteratioal Ltd Eglad 100% * Pioeer Surveys Pty Ltd Australia 100% * Aquaterra UK Limited Eglad 100% * PMM Global Surveys Pty Ltd Australia 100% * Basicshare Limited Eglad 100% PMM Holdigs Pty Ltd Australia 100% * Burks Gree & Parters Limited Eglad 100% * PMM Sydey Pty Ltd Australia 100% * Cambria Cosultats America Limited Eglad 100% * Poit Project Maagemet Pty Ltd Australia 100% * Cambria Cosultats Limited Eglad 100% * RPS APASA Pty Ltd Australia 100% * Caadia GaiaTech, B.C. ULC Eglad 100% * 82 Report ad Accouts 2016

83 Accouts Coutry of Proportio registratio of ordiary ad share operatio capital held Coutry of registratio ad operatio Proportio of ordiary share capital held CgMs Holdigs Limited Eglad 100% * Utility Techical Services Limited Eglad 100% CgMs Limited Eglad 100% * WTW & Associates Limited Eglad 100% Clear Evirometal Cosultats Limited Eglad 100% * X-IPEC Limited Eglad 100% * DBK Parters Limited Eglad 100% * Metier Academy GmbH Germay 100% * ECL Group Limited Eglad 100% Geoco Asia Limited Gibraltar 100% * ECL Resources Maagemet Limited Eglad 100% * RPS Cosultig Egieers Limited Irelad 100% * ECL Techology Limited Eglad 100% * RPS Egieerig Services Limited Irelad 100% * Emulous Group Limited Eglad 100% RPS Evirometal Cosultacy Limited Irelad 100% Emulous Ltd Eglad 100% RPS Group Limited Irelad 100% * Eergy Iovatios Limited Eglad 100% * RPS MMA Limited Irelad 100% * Exploratio Cosultats Limited Eglad 100% * RPS Plaig & Eviromet Limited Irelad 100% * Flow Cotrol (Water Coservatio) Limited Eglad 100% RPS Properties Limited Irelad 100% * Geoco Group Services Limited Eglad 100% Cambria Cosultats Asia Sd. Bhd Malaysia 100% * Geophysical Cosultats Limited Eglad 100% * Kowledge Reservoir Geosciece & Egieerig Sd. Bhd Malaysia 100% * Geophysical Safety Resources Limited Eglad 100% * RPS Cosultats Sd Bhd Malaysia 100% * Hydrosearch Associates Limited Eglad 100% Cambria Cosultats CC America, Ic S.de R.L. de C.V. Mexico 100% * Ichro Limited Eglad 100% * Aquaterra East Asia LLC Mogolia 100% * Isochroe Holdigs Limited Eglad 100% RPS advies-e igeieursbureau bv Netherlads 100% * Kowledge Reservoir (UK) Ltd Eglad 100% * RPS Aalyse BV Netherlads 100% * Martidale Holdigs Limited Eglad 100% * RPS BV Netherlads 100% Nautilus (SEAA) Limited Eglad 100% * RPS Detacherig BV Netherlads 100% * Nautilus Limited Eglad 100% * RPS Cosultats NZ Limited New Zealad 100% * Net Admi Limited Eglad 100% * RPS Irelad Limited Norther Irelad 100% * Nigel Moor Associates plc Eglad 100% * Delphi AS Norway 100% * Oil Experiece Limited Eglad 100% * Kowledge Reservoir Holdig AS Norway 100% * Paras Cosultig Limited Eglad 100% * Metier AS Norway 100% * Paras Limited Eglad 100% * Metier Holdig AS Norway 100% * Probablistic Risk Assessmets Limited Eglad 100% Metier Trodheim AS Norway 100% * Quad Egieerig Limited Eglad 100% * Metier Vest AS Norway 100% * R W Gregory Limited Eglad 100% OEC Gruppe AS Norway 100% * RPS Busiess Healthcare Limited Eglad 100% RPS Norway AS Norway 100% * RPS Chapma Warre Limited Eglad 100% * K.R. LLC (Oma) Oma 100% * RPS Cosultats Ltd Eglad 100% * Poit Project Maagemet (PNG) Ltd Papua New Guiea 100% * RPS Cosultig Services Limited Eglad 100% OceaFix Iteratioal Limited Scotlad 100% * RPS Desig Ltd Eglad 100% RPS Occupatioal Health Limited Scotlad 100% * RPS Ecoscope Limited Eglad 100% Delphi Group Asia PTE Limited Sigapore 85% * RPS Eergy Cosultats Limited Eglad 100% Metier AB Swede 100% * RPS Eergy Limited Eglad 100% Metier Academy AB Swede 100% * RPS Eergy Services Limited Eglad 100% APA USA, Ic USA 100% * RPS Evirometal Maagemet Limited Eglad 100% Applied Sciece Associates Ic. USA 100% * RPS Group US Holdigs Limited Eglad 100% Cambria Cosultats America Ic. USA 100% * RPS Health i Busiess Limited Eglad 100% * Espey Cosultats, Ic. USA 100% * RPS Laboratories Limited Eglad 100% Evas Hamilto, Ic. USA 100% * RPS Moutaiheath Limited Eglad 100% * GaiaTech Caada, LLC USA 100% * RPS Plaig & Developmet Limited Eglad 100% GaiaTech Holdigs, Ic USA 100% * RPS Timetrax Limited Eglad 100% * GaiaTech, Ic USA 100% * RPS Trustees Limited Eglad 100% Housto Geosca Ic USA 100% * RPS US Holdigs Limited Eglad 100% * Hydrosearch USA Ic USA 100% * RPS Utilities Limited Eglad 100% * Iris Evirometal USA 100% * RPS Water Services Limited Eglad 100% Klotz Associates Ic. USA 100% * Rudall Blachard Associates Group Limited Eglad 100% * Kowledge Reservoir Group Ic USA 100% Rudall Blachard Associates Limited Eglad 100% * Kowledge Reservoir, LLC USA 100% * Safety ad Reliability Cosultats Limited Eglad 100% Nautilus Holdigs LLC USA 100% * Scott Pickford Limited Eglad 100% * Nautilus World LP USA 100% * Sherwood House Properties Limited Eglad 100% * Petroleum Istitute for Cotiuig Educatio USA Ic USA 100% * SRC (Cosultats) Limited Eglad 100% * RPS America Group Ic USA 100% * Tow Plaig Cosultacy Limited Eglad 100% RPS Group, Ic. USA 100% * TPK Cosultig Limited Eglad 100% RPS JDC Ic. USA 100% * Troy Ikoda Limited Eglad 100% * The Geocet Group LLC USA 100% * Troy-Ikoda Maagemet Limited Eglad 100% * The Scotia Group Ic USA 100% * rpsgroup.com 83

84 Notes to the Paret Compay Fiacial Statemets cotiued 7. Debtors 2016 Amouts fallig due withi oe year: Amouts due from subsidiary udertakigs 73,395 59,077 Other debtors 2,135 1,916 Prepaymets ad accrued icome 2,048 3,203 77,578 64, Creditors amouts fallig due withi oe year 2016 Borrowigs 179 Trade creditors 1, Amouts due to from subsidiary udertakigs 40,081 20,694 Other creditors Accruals ad deferred icome 2,268 2,096 44,735 24, Borrowigs 2016 Bak loas 43,312 42,902 US loa otes 57,571 53,116 Arragemet fees (997) 99,886 96,018 Due as follows: After two years ad withi five years 100,883 42,902 Over five years 53,116 Arragemet fee previously settled (997) 99,886 96,018 Details of the borrowigs are disclosed i ote 16 to the cosolidated accouts. 84 Report ad Accouts 2016

85 Accouts 10. Provisio for liabilities Total As at 1 Jauary Additioal provisio i the year 28 Utilised i the year (137) As at ember The provisios relate to property ad dilapidatios provisios. The total provisio is expected to be utilised as follows: As at 2016 As at Withi oe year After more tha oe year Deferred taxatio The movemet o deferred taxatio i the year was as follows: As at 2016 As at Net asset at begiig of year Credit /(charge) to icome for the year 27 (106) Net asset at year ed The deferred taxatio balaces comprise: As at 2016 As at Short term timig differeces (58) (46) Depreciatio i excess of capital allowaces Deferred tax asset Deferred tax is icluded withi other debtors i the balace sheet. rpsgroup.com 85

86 Notes to the Paret Compay Fiacial Statemets cotiued 12. Share capital ad reserves Authorised Allotted ad fully paid Value Value Number Number Ordiary shares of 3p each At 1 Jauary ,000,000 7, ,234,251 6,667 At ember ,000,000 7, ,435,014 6,703 Full details of the share capital of the Compay are disclosed i Note 20 to the Cosolidated Fiacial Statemets. The Compay s other reserves are as follows: Share premium Merger reserve Premium o shares issued i excess of omial value, other tha o shares issued i respect of acquisitios whe merger relief is take. Premium o shares issued i respect of acquisitios whe merger relief is take. Employee trust shares Ow shares held by the SIP ad ESOP trusts. Profit o loss reserve Other reserves Cumulative et gais ad losses recogised i the profit ad loss accout ad statemet of chages i equity. No-distributable profit geerated o Group recostructio. 13. Divideds Details of divideds paid by the Compay are disclosed i Note 22 of the Cosolidated Fiacial Statemets. 14. Commitmets uder operatig leases Total future miimum lease paymets uder o-cacellable operatig leases are as follows: Lad ad buildigs Other Withi oe year Betwee oe ad five years Directors iterests i trasactios There were o trasactios durig the year i which the Directors had ay iterest. 86 Report ad Accouts 2016

87 Accouts Notes to Remueratio Committee Aual Report 1. Remueratio Policy ad Implemetatio i 2017 The Compay s remueratio policy was approved by shareholders at a Geeral Meetig held o 30 November 2016 ad will apply for a three year period from 1 Jauary The key compoets of this policy as they apply to the Executive Directors of the Compay icludig plaed implemetatio for 2017 are set out i the table below. The full policy statemet is available o the Compay s website. Elemet, purpose ad lik to strategy Base salary To provide competitive fixed remueratio that will attract ad retai key employees ad reflect their experiece ad positio i the Group. Operatio ad maximum opportuity A Executive Director s basic salary is cosidered by the Remueratio Committee o appoitmet ad ormally reviewed oce a year, or whe there is a sigificat chage to role or resposibility. Whe makig a determiatio as to the appropriate remueratio, the Remueratio Committee, where it is relevat, bechmarks the remueratio agaist the Compay s comparator group (orgaisatios of comparable size ad or sector to RPS i the FTSE All Share). The results of bechmarkig will, however, oly be oe of a umber of factors take ito accout by the Remueratio Committee ad which will iclude: the idividual performace ad experiece of the Executive Director; pay ad coditios for employees across the Group; the geeral performace of the Group; ad the ecoomic eviromet. The Remueratio Committee policy i relatio to salary is: aroud media salary o appoitmet depedig o the experiece ad backgroud of the ew Executive Director; ad o promotio, up to the media salary for the ew role. Aual percetage icreases are geerally cosistet with the rage awarded across the Group. Percetage icreases i salary above this level may be made i certai circumstaces, such as a chage i resposibility or a sigificat icrease i the scale of a role or the Group s size ad complexity. Idividuals who are recruited or promoted to the Board may, o occasio, have their salaries set below the targeted policy level util they become established i their role. I such cases subsequet icreases i salary may be higher tha the average util the target positioig is achieved. Performace measures ad assessmet A broad assessmet of idividual ad busiess performace is used as part of the salary review. Chages from the previous policy ad implemetatio for 2017 No chage to the curret policy other tha to the comparator group which is ow orgaisatios of comparable size ad/or sector to RPS i the FTSE All Share. With effect from 1 Jauary 2017 Ala Heare s salary will be uchaged at 581,400 ad Gary Youg s has bee icreased to 310,000. rpsgroup.com 87

88 Notes to Remueratio Committee Aual Report cotiued Elemet, purpose ad lik to strategy Beefits To provide competitive beefits ad to attract ad retai high calibre employees. Operatio ad maximum opportuity Performace measures ad assessmet Chages from the previous policy ad implemetatio for 2017 The Remueratio Committee s policy is to provide a market competitive beefits package. The Executive Directors may receive the followig beefits: healthcare; life assurace ad depedats pesios; Not applicable. No chage to previous beefits policy. Beefits for 2017 will be provided i accordace with the policy. disability schemes; compay car or car allowace; ad other beefits as provided from time to time, such as relocatio allowaces o recruitmet. Beefit values vary year o year depedig o premiums ad the maximum potetial value is the cost of the provisio of these beefits. Pesio To provide a competitive compay cotributio that eables effective retiremet plaig. The Executive Directors are eligible to participate i defied cotributio pesio schemes, or receive a salary supplemet or a combiatio of the two. Other tha basic salary, o elemet of the Directors remueratio is pesioable. Salary supplemets are ot icluded i base salary to calculate other beefits ad icetive opportuities. The maximum employer cotributio either to a pesio scheme ad/or provided as a salary supplemet is 25% of basic salary. Not applicable. No chage to previous pesio policy. Pesio beefits for 2017 will be provided i accordace with the policy. The RPS Group Plc Short Term Aual Bous Pla (the STABP ) To icetivise achievemet of aual objectives which support the Group s short-term performace goals. Maximum awards each year uder the STABP are equal to 150% of salary. The performace period is oe fiacial year with pay-out determied by the Remueratio Committee followig the year ed, based o achievemet agaist a rage of fiacial ad o-fiacial targets. 50% of the bous award will be paid out i cash with the remaiig 50% deferred ito shares subject to a further three year vestig period. There are o further performace targets applicable to the deferred amout. Malus ad clawback provisios may apply at the discretio of the Remueratio Committee where it cosiders such actio is reasoable ad appropriate. The malus period would be up to the date of the bous determiatio ad three years after i respect of deferred shares uder the STABP. The clawback period will be three years from the date of the bous determiatio for ay cash paymets uder the STABP. Participats may be etitled to divided equivalets represetig the divideds paid durig the deferral period of the shares. Performace targets will be set by the Remueratio Committee aually based o a rage of fiacial ad o-fiacial measures. Fiacial targets gover the majority of bous paymets, although ofiacial metrics may also be used. The Remueratio Committee will determie the weightig of the various measures ad targets to esure that they support the busiess strategy ad objectives for the relevat year. Targets are typically structured o a challegig slidig scale, with zero payout accruig for achievig threshold performace through to full pay-out for maximum performace. The Remueratio Committee has the discretio to adjust targets or performace measures for ay exceptioal evets that may occur durig the year. The Remueratio Committee has the discretio to make dowward or upward movemets to the amout of bous eared resultig from the applicatio of the performace measures if it believes that the bous outcomes are ot a fair ad accurate reflectio of busiess performace. The previous Bous Pla has bee replaced by the STABP. Uder the STABP the maximum award level is 150% which is a reductio from the 200% maximum uder the Bous Pla. The deferral period uder the STABP has icreased from two to three years. There are o other chages to the aual icetive. The bous opportuity i 2017 will be 100% of salary for the Group Chief Executive ad 125% of salary for the Group Fiace Director. The bous awards i 2017 will be subject to the achievemet of three measures: PBTA (70% weightig), cash coversio (20% weightig) ad persoal objectives (10% weightig). The Committee cosiders prospective disclosure of targets to be commercially sesitive, however will disclose targets retrospectively followig the fiacial year ed. 88 Report ad Accouts 2016

89 Elemet, purpose ad lik to strategy Operatio ad maximum opportuity The RPS Group Plc Executive Log Term Icetive Pla (the ELTIP ) Performace measures ad assessmet Chages from the previous policy ad implemetatio for 2017 To icetivise Executives to achieve sustaiable, strog, log term performace for the Compay, to retai key idividuals ad to alig their iterests with shareholders. Uder the ELTIP, the Remueratio Committee may award aual grats of performace share awards i the form of il-cost optios or coditioal shares ( ELTIP awards ). Maximum ELTIP awards each year are equal to 150% of base salary (200% of salary i exceptioal circumstaces). ELTIP awards will ormally vest after a three year performace period subject to the achievemet of the performace measures. The Remueratio Committee will retai the discretio to determie whether to attach a holdig period to a particular award at the date of each grat. Malus ad clawback provisios may apply at the discretio of the Remueratio Committee where it cosiders such actio is reasoable ad appropriate. The malus period would be up to the date of vestig (i.e. three years from the grat date). The clawback period will be two years from the date of vestig. Participats may be etitled to divided equivalets represetig the divideds paid durig the deferral period of the shares. Fiacial ad o-fiacial measures may be applied to awards uder the ELTIP. Targets are typically structured o a challegig slidig scale, with o more tha 20% of the maximum award vestig for achievig the threshold performace level through to full vestig for maximum performace. The Remueratio Committee has the discretio to adjust targets or performace measures for ay exceptioal evets that may occur durig the vestig period. The Remueratio Committee has the discretio to make dowward or upward movemets i the vestig of the ELTIP resultig from the applicatio of the performace measures if the Remueratio Committee believes that the outcomes are ot a fair ad accurate reflectio of busiess performace. The Remueratio Committee will review the performace measures aually, i terms of the rage of targets, the measures themselves ad weightigs applied to each elemet of the ELTIP. Ay revisios to the measures ad/or weightigs i future years will oly take place if it is ecessary because of developmets i the Group s strategy ad, where these are material, followig dialogue with the major shareholders. The ELTIP has bee itroduced i 2017 i order to provide a icreased focus o logterm performace. Uder the previous policy the oly variable remueratio provided was the Bous Pla. The ELTIP awards grated i 2017 will be 100% of salary for the Group Chief Executive ad 125% of salary for the Group Fiace Director ELTIP awards will vest subject to the achievemet of three measures: EPS (25% weightig), relative TSR (50% weightig) ad cash coversio (25% weightig). Performace targets will be as show i the separate table below. All-Employee Icetives To ecourage all employees to become shareholders ad thereby alig their iterests with those of shareholders. Eligible employees may participate i the Share Icetive Pla or coutry equivalet. Executive Directors will be etitled to participate o the same terms. Maximum participatio levels for all staff are set by referece to the pla rules ad relevat legislatio. Not applicable. No chage to previous policy. Shareholdig Guidelies To esure that Executive Directors iterests are aliged with those of shareholders over the loger term. Executive Directors are required to build or maitai (as relevat) the followig miimum shareholdig i the Compay: 200% of base salary for the Chief Executive; ad 150% of base salary for other Executives. Shares icluded i this calculatio are those held beeficially by the Executive Director ad his or her spouse/life parter. The shareholdig requiremet is determied by the Remueratio Committee ad may be up to 200% of salary. Executive Directors will be required to retai 50% of the post-tax umber of shares vestig uder the STABP ad ELTIP util their requiremet is met ad the maitaied. Not applicable. Shareholdig guidelies have icreased from 150% of salary to 200% of salary for the Chief Executive ad from 100% of salary to 150% of salary for other Executives. rpsgroup.com 89

90 Notes to Remueratio Committee Aual Report cotiued The followig performace targets will apply to the LTIP awards to be made to Executive Directors i Performace measure Measuremet period Performace target Vestig level (% maximum) Upper Quatile 100% Total Shareholder Retur Pro rata o a straight lie basis Three fiacial years Media to Upper Quartile relative to the FTSE All Share betwee 20% ad 100% Below Media 0% Average Aual Growth i Earigs per share (measured o a costat currecy basis) Cash collectio Three fiacial years Three fiacial years 12% p.a. 100% Betwee 4% ad 12% p.a. Pro rata o a straight lie basis betwee 20% ad 100% Below 4% p.a. 0% 105% 100% Betwee 85% ad 105% p.a. Pro rata o a straight lie basis betwee 20% ad 100% 85% 0% 2. Sigle figure remueratio table Notes for fiacial year eded ember 2016 The sigle figure table is set out o page 30 of this report. Beefits ad pesio The value for beefits for each Executive Director show i the Sigle Figure Remueratio is comprised of a compay car or compay car allowace ad private medical isurace. The Executive Directors are eligible to participate i defied cotributio pesio schemes, or receive a salary supplemet or a combiatio of the two, the value of which has bee show i the Sigle Figure Remueratio for each. Bous Pla assessmet for 2016 For 2016 the Maximum Aual Cotributios uder the RPS Group Plc Bous Pla for Ala Heare, Phil Williams ad Gary Youg were 200%, 175% ad 150% of salary respectively. The maximum total cotributio that ca be eared by all participats uder the Bous Pla is limited to 3% of the Group s PBTA. For each Executive Director, performace was assessed agaist three measures: PBTA (70%), cash collectio (20%) ad persoal objectives (10%). I additio, for 2016 the Remueratio Committee set a miimum PBTA level of 50m which had to be reached before ay bous cotributio i respect of the cash collectio ad persoal objectives elemets could be eared. The bous value icluded withi the Sigle Figure Remueratio for 2016 has bee calculated as set out below. This shows the performace targets for 2016, their level of satisfactio ad the correspodig level of bous eared by each of the Executive Directors. PBTA No bous cotributio was eared i respect of the elemet relatig to PBTA as the threshold level of performace was ot achieved. However, as the PBTA for 2016 was 50.7m which is above the uderpi set of 50m, the Executive Directors were eligible to ear bous cotributios i respect of the other elemets. Cash Collectio I respect of cash collectio, bous cotributio could be eared at a etry poit of 85% with a straight lie basis applyig up to 110%, at which poit the maximum cotributio for this elemet could be eared. Cash collectio for the year was at 117% with the result that the maximum cotributio was eared by each Executive Director for this elemet. Persoal Objectives I respect of persoal objectives the Remueratio Committee determied that o bous cotributio would be paid to either Ala Heare or Phil Williams, but that the maximum cotributio would be payable to Gary Youg. The persoal objectives for Gary Youg related to the developmet of the Group Fiace fuctio. 90 Report ad Accouts 2016

91 Based o the performace described above the bous cotributios for each of the Executive Directors for 2016 were as follows. Executive Director Bous attributable to PBTA (70%) Bous attributable to Cash collectio (20%) Bous attributable to Persoal Objectives (10%) Total Bous cotributio Amout of Bous cotributio paid i cash Amout of Bous cotributio deferred shares (see below) Ala Heare 0 232, , ,500 Phil Williams 0 112, , ,500 0 Gary Youg 0 86,500 43, ,500 64,750 64,750 I respect of Gary Youg ad i accordace with the ormal terms of the Pla oe half of the bous cotributio will be paid i cash ad the balace deferred i shares for a period of two years. I respect of Ala Heare the Committee determied the etire bous cotributio should be deferred i shares for a period of two years. The umber of deferred shares i respect of the bous will be disclosed i ext year s Report followig their grat i March Phil Williams employmet with the Compay will ed o 20 March 2017 ad as a good leaver uder the rules of the Pla ay shares deferred uder the Pla would be released at that time. The Remueratio Committee accordigly determied that his bous cotributio i respect of 2016 would be paid wholly i cash. I lie with the Compay s Remueratio Policy the amout of bous eared has bee pro-rated to the period of the fiacial year which he worked as a Executive Director. 3. Icetive grats to Executive Directors made durig the fiacial year edig ember 2016 There were o icetive grats made to Executive Directors uder the RPS Group Plc Bous Pla durig the year to 31 December The oly share awards made to Executive Directors durig the year were i respect of the Compay s all employee Share Icetive Pla. The followig table sets out the umber ad value of matchig ad divided shares that were awarded to the Executive Directors uder the all employee Share Icetive Pla durig Executive Director Number of shares Value of shares Ala Heare 1,657 3,018 Phil Williams 929 1,755 Gary Youg 1,858 2,668 Shares are valued by referece to their price as at date of award. The shares show as awarded to Phil Williams are i respect of the period up to his retiremet as a Director. As oted above a award of deferred shares i respect of bous eared uder the RPS Group Plc Bous Pla for 2016 will be made to Ala Heare ad Gary Youg i March Paymets to past Directors Followig his retiremet from the Board Phil Williams is beig paid his ormal cotractual etitlemets beig salary, pesio ad beefits for the balace of his otice period up to 20 March 2017 ad is beig treated as a good leaver for the purpose of the RPS Group Plc Bous Pla. rpsgroup.com 91

92 Notes to Remueratio Committee Aual Report cotiued 5. Paymet for loss of office There were o paymets for loss of office made to Directors of the Compay i respect of the year uder review. 6. Total shareholdig of Directors The table below shows the total shareholdig for each Director. Ucoditioal shares Shares held at 31/12/16 Shares held at 24/02/17 Coditioal Matchig shares uder the SIP Shares held at 31/12/16 Shares held at 24/02/17 Shares held at 31/12/16 Total Shares held at 24/02/17 Executive Director Ala Heare 122, ,204 2,015 2, , ,254 Gary Youg 107, ,474 2,016 2, , ,525 Phil Williams* 290,076 /a 1,804 /a 291,880 /a No-Executive Director Ke Lever Joh Beett Louise Charlto Robert Miller Bakewell 10,000 10,000 10,000 10,000 *Iterests for Phil Williams are show as at 30 September 2016 beig his date of retiremet from the Board. Ucoditioal shares iclude shares held directly or idirectly by coected persos. They also iclude shares acquired uder the Share Icetive Pla beig partership ad divided shares held as well as matchig shares that have bee held for loger tha three years ad are therefore o loger coditioal. The table below shows the shareholdig guidelie for each Executive Director (as applicable from 1 Jauary 2017) ad the extet to which that guidelie was met at ember Guidelie % salary Value of shareholdig required Value of ucoditioal shares Ala Heare 200 1,162, ,492 Gary Youg , ,718 The value show for ucoditioal shares is based upo the Compay s share price as at ember Report ad Accouts 2016

93 7. Total Shareholder Retur Performace The Compay has selected the FTSE All Share ad the FTSE All Share Support Services as the broad equity market idices agaist which to compare the Compay s total shareholder retur performace as the Compay has bee a costituet member of these idices throughout the eight year period. Total shareholder retur from 1 Jauary RPS Group FTSE AllShare FTSE AllShare Support Services (all rebased to RPS) 150 Source: Thomso Datastream CEO Remueratio Elemet Total Remueratio (sigle figure for the Year - ) Aual Bous (%age of Maximum Opportuity) Log Term Icetives (%age of Maximum Number of Shares capable of vestig) , zero 46% 54% 77% 47% 32% zero 20% 100% zero 13% 100% zero zero zero zero It should be oted that the Sigle Figure for 2012 icludes the paymet of deferred balaces uder the previous bous bakig pla from 2010 ad These balaces were eared durig these years but subject to deferral util the ed of 2012 ad at risk of performace based forfeiture. rpsgroup.com 93

94 Notes to Remueratio Committee Aual Report cotiued 9. Percetage Chage i Remueratio of Chief Executive The followig table shows the percetage chage i the Chief Executive s salary, beefits ad aual bous betwee fiacial years compared to the percetage chage for all employees. Elemet Percetage Chage from Fiacial Year to 2016 Fiacial Year CEO Employees Salary 0% 2.9% Taxable Beefits 0% 2.5% Aual Bous /a* 13.2% * As the Chief Executive received a bous for 2016 but o bous i, it is ot possible to express this chage i percetage terms. 10. Relative Importace of Sped o Pay The chart below shows the total remueratio paid to or receivable by all employees of the Compay ad total distributios to shareholders by way of divideds for the curret ad previous fiacial years: 350, ,000 Total employee pay +16.8% 250, , , ,000 50,000 PBTA -2.1% Divided +8.2% Profit before tax ad amortisatio is a key performace idicator for the Group ad was the pricipal performace measure used uder the RPS Plc Bous Pla. The sigificat icrease i employee pay resulted i part from the impact of currecy fluctuatios. Measured o a costat currecy basis this icrease would have bee 8.5%, although of this icrease the substatial majority reflected the impact of acquisitios made i beig icluded for the whole year. 11. The Committee ad its Advisors Role of the Remueratio Committee ( Committee ) The Committee is resposible for settig policies relatig to remueratio for the Executive Directors as well as determiig their specific remueratio packages. It also moitors the level ad structure of remueratio for the Group s seior maagemet as well as overseeig the operatio of the Group s share plas. The Committee s agreed terms of referece are available o the Compay s website ad o request from the Compay Secretary. The Board determies the remueratio of the No Executive Directors. No Director plays a part i ay decisio about their ow remueratio. 94 Report ad Accouts 2016

95 Accouts Committee members The curret members of the Committee are Robert Miller-Bakewell (Chairma), Louise Charlto ad Joh Beett all of whom are idepedet No Executive Directors. Adrew Page served as a member of the Committee util his retiremet as a Director i April Joh Beett joied the Committee o his appoitmet as a Director i April The Chief Executive of the Compay atteds meetigs by ivitatio ad where this is pertiet to the matters uder discussio, but is ever preset whe his ow remueratio is uder discussio. Represetatives of PricewaterhouseCoopers LLP ( PwC ) also atted some meetigs of the Committee. The Compay Secretary acts as secretary to the Committee. Noe of the members of the Committee has ay persoal fiacial iterest (other tha as shareholders), or coflicts of iterests arisig from other directorships or day to day ivolvemet i ruig the busiess of the Compay. Further iformatio o meetigs ad attedace by the Committee members is disclosed i the Corporate Goverace report o page 24. Exteral advice Durig 2016 the Committee received exteral advice i relatio to executive remueratio from PwC. PwC have acted as advisors to the Committee for several years, havig previously bee appoited by the Committee followig a review process. PwC are members of the Remueratio Cosultats Group ad, as such, volutarily operate uder the code of coduct i relatio to executive remueratio cosultig i the UK. PwC also udertook some limited tax advisory work for the Compay durig the year. The Committee reviewed the ature of the services provided ad was satisfied that o coflict of iterest exists or existed i the provisio of these services ad that the advice the Remueratio Committee received was objective ad idepedet. PwC has o other coectios with the Compay. The total fees paid to PwC i the year for services to the Committee amouted to 110,000. This fee was comprised of a aual retaier to cover certai stadard advice ad paymet for additioal services i respect of which fees were agreed o a case by case basis. The sigificat majority of this has related to developmet of the ew remueratio policy which was approved by shareholders durig the year. No cotiget fee arragemets were operated. 12. Statemet of Shareholder votig The Remueratio Committee s Aual Report for was approved at the Compay s 2016 Aual Geeral Meetig. The votig for this resolutio is show below. Aual Report Number of Votes Cast % of Votes Cast Votes for 158,006, Votes agaist 5,900, Total 163,907, Witheld 2,308,635 The Compay s ew Remueratio Policy was approved at a Geeral Meetig held o 30 November The votig i respect of this resolutio is as show below. Policy statemet Number of Votes Cast % of Votes Cast Votes for 159,064, Votes agaist 16,607, Total 175,672, Witheld 3,167,972 rpsgroup.com 95

96 Five Year Summary Reveue 594, , , , ,863 Fee icome 534, , , , ,835 PBTA 50,704 51,795 66,114 63,032 60,099 Net bak debt (83,419) (78,779) (73,180) (32,368) (13,501) Net assets 411, , , , ,814 Adjusted cash geerated from operatig activities 78,253 92,628 70,772 72,030 76,045 Average umber of employees 5,099 5,054 4,530 4,306 4,507 Divided per share 9.74p 9.74p 8.47p 7.36p 6.40p Adjusted basic EPS 16.60p 16.57p 22.04p 20.22p 19.48p Adjusted diluted EPS 16.51p 16.47p 21.92p 20.14p 19.36p The Five Year Summary does ot form part of the audited fiacial statemets. 96 Report ad Accouts 2016

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98 Cover image: Acid crater lake o White Islad, New Zealad. RPS expertise i commuity creatio has bee called o to assist urba growth i the Bay of Plety. Cotact: RPS Group Plc 20 Wester Aveue Milto Park Abigdo Oxfordshire OX14 4SH rpsgroup.com 46709