Henderson Group - 2012 Full Year Results

Full Year Results 2012

27 February 2013

Financial highlights

Notes

1. Total fee income less operating expenses, divided by total fee income.

2. Based on underlying profit after tax attributable to equity holders of the parent.

3. Based on weighted average number of shares in issue less weighted average number of own shares held during the year.

4. Based on weighted average number of shares in issue less weighted average number of own shares held during the year adjusted for the dilutive potential of share awards and share options.

5. Consists of 1H12 interim dividend of 2.10 pence per share and proposed final dividend for 2H12 of 5.05 pence per share.

Commenting on the 2012 full year results Chief Executive, Andrew Formica said:

"Political and economic uncertainty and the resultant market volatility during 2012 created a challenging sales environment for Henderson. Nonetheless, we remained focused on delivering excellent returns and service to our clients and I am pleased with the continued delivery of strong investment performance. We have maintained our rigorous cost discipline and as a result, the financial strength of the business has continued to improve, clearly visible in our balance sheet as we start 2013 in a net cash position.

By simplifying and streamlining some parts of our business we were also able to make a number of investments which will result in Henderson being a more global business with stronger investment and distribution capabilities. Given all we achieved in 2012, and how we have positioned the business for the year ahead, I am confident about our outlook."

2012 full year results

Key financial highlights

·; Underlying profit before tax £146.5m

·; Operating margin at 36.0%

·; Compensation ratio at 41.1%

·; Strong investment performance over three years; 69% of funds meet or exceed benchmarks

·; AUM increased to £65.6bn at 31 December 2012

·; Diluted underlying EPS at 11.7p

·; Board recommending final dividend of 5.05 pence per share; 2% increase in total dividend

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial condition, results and business of the Group. By their nature, forward-looking statements involve risk and uncertainty because they relate to events, and depend on circumstances, that will occur in future. The Group's actual future results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

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To view the full details of the 2012 Full Year Results Presentation, paste the following link into your web browser:

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Market briefing

Management will present these results on 27 February 2013 at 8:00pm (Sydney time)/9:00am (London time).

Teleconference details

We recommend participants start dialling in 5 to 10 minutes prior to the start of the presentation. To telephone link-up to the briefing, dial one of the following numbers from 7:50pm (Sydney time)/8:50am (London time):

From:

Webcast details

You can logon to a webcast of the results briefing which will start at 8:00pm (Sydney time)/9:00am (London time). Go towww.henderson.com/group and click on the relevant link on the homepage. An archive of the webcast will be available shortlyafter the event.

Further information

www.henderson.com

or

Preliminary final report

for the Year Ended 31 December 2012

Incorporating the requirements of ASX Appendix 4E

The information contained in this document should be read in conjunction with the Henderson Group plc (the Company) Annual Report for the year ended 31 December 2012 and any public announcements made by the Group in accordance with the continuous disclosure obligations arising under the Corporations Act 2001, the Companies (Jersey) Law 1991 and the Australian Securities Exchange (ASX) Listing Rules. This report includes the full year information required to be given to the ASX under Listing Rule 4.3A.

Results for announcement to the market

The results of Henderson Group plc for announcement to the market are as follows:

Note

1. Excluding a non-controlling interests profit of £0.2m (FY11: £0.1m loss).

Dividends

On 26 February 2013, the Directors recommended the payment of a final dividend in respect of the year ended 31 December 2012 of 5.05 pence per share.

Henderson Group plc does not offer a dividend reinvestment plan.

Net tangible assets per ordinary share

"Net tangible assets" are defined by the ASX as being total assets less intangible assets less total liabilities ranking ahead of, or equally with, claims of ordinary shares.

Five year financial summaryConsolidated Financial Results

For the year ended 31 December 2012

Notes

1. Total fee income less operating expenses divided by total fee income.

2. Employee compensation and benefits divided by total income.

3. Net margin calculated on underlying profit before tax.

4. Based on underlying profit after tax attributable to equity holders of the parent.

5. Asset weighted of funds measured over one and three years to 31 December.

Business review

Well positioned to grow

Review of 2012

It was another year that started optimistically but was soon overshadowed by political and economic uncertainty leading to a slide in markets in the second quarter. A combination of bank bailouts, quantitative easing and 'operation twist' in the US provided some relief, and markets climbed again after Mario Draghi, president of the European Central Bank, pledged to preserve the euro. Against this volatile and uncertain backdrop, it is encouraging that equity markets ended the year higher than 2011.

We also witnessed a changing political landscape with leadership changes in France and China and of course the noise surrounding the US elections.

All this uncertainty, combined with our relatively high exposure to both Europe and equities, meant we faced a challenging sales environment. Despite this, the Group's underlying profit was down only 8% as we matched the percentage fall in revenues with a similar percentage decline in costs. We made good progress in our key strategic objectives, including strengthening our retail business and expanding global and absolute return products, adding to our presence outside of Europe.

Strengthening our retail business

To address the implications of the Retail Distribution Review (RDR) in the UK, we launched 'unbundled' share classes. These share classes (often referred to as 'clean fee' share classes) will comply with the changes outlined in the RDR where investment managers are no longer allowed to pay commission to financial intermediaries for bringing in new business.

We strengthened our UK retail business by entering into strategic alliances, including Sesame Bankhall Group, and launched a range of multi-asset, multi-manager funds under the 'Optimum' banner. Multi-asset investment strategies are increasingly demanded by our clients and it is important that we have the products and strength of talent in our teams to provide the best possible investment outcomes and service. We hired Paul O'Connor, from Mercer Investment Consulting, and James de Bunsen, from Armstrong Investment Managers. Both have extensive experience in asset allocation and the now 12-strong team has around £5.4bn in AUM.

We have significantly rationalised our fund range, to help us present a clearer product line-up to our clients. Our closed-ended business, with its well-established range of investment trusts, should also be a natural beneficiary in a post-RDR world.

To provide advisers with a range of lower-cost funds that generate income and keep their clients within defined risk parameters, we launched Core Solutions. These funds, managed by the multi-asset team, do not have specific income targets or benchmarks but are intended to deliver a competitive level of income within clearly defined risk parameters. They complement Henderson's existing multi-manager fund range, which invests primarily in third party active funds and are an attractive alternative in a persistently low interest rate environment.

We have an excellent European retail franchise, with strong performing funds and improving fund flows and it remains an important part of our business. We are especially pleased with the success we have achieved in our fixed income funds. For example, the Henderson Horizon Euro Corporate Bond Fund reached €1bn in AUM in less than three years from launch - and it returned 30.6% over that period, outperforming the IBOXX EUR Corp benchmark by over 12%. Building on this strength, we launched the offshore Henderson Horizon Euro High Yield Bond Fund and look to offer a Horizon Global Corporate Bond Fund shortly.

Globalising our fixed income franchise

We have moved ahead in globalising our fixed income franchise with the appointment of senior credit analysts both in Europe and in the US, to help sustain our excellent performance record and to meet increasing client demand.

The US team, credit specialists based in Philadelphia, is headed by Kevin Loome who was formerly employed by Delaware Investments where he managed over US$6bn of predominantly high yield investments. The team will be integrated with our UK-based credit team headed by Stephen Thariyan and be a vital component of our global offering. The two teams share a similar investment philosophy and style and have managed portfolios across the entire credit spectrum.

Restructured teams in Equities

In Equities, we have restructured our teams under four key business areas:

(1) European Equities. Although these equities were out of favour for most of 2012, our managers, led by John Bennett, have outstanding investment records and believe current conditions offer attractive returns for the patient investor.

(2) Global Equities. We have recently consolidated our activities in this area under the leadership of Stephen Peak. We are already well known for our Global Equity Income products, as well as our specialist products such as Technology and Property Securities, and have strengthened our team with the appointment of Matt Beesley, a highly respected fund manager who is spearheading our global equity and EAFE proposition. We have also brought together our Asian and Emerging Markets teams to create a unified Global Emerging Market offering.

(3) Multi-Asset. As explained above, we have developed innovative new products for UK retail clients to suit the post RDR world. Bill McQuaker has been expanding his team to support him in our asset allocation investments.

(4) Absolute Return. We recognise that clients increasingly want lower volatility together with absolute rather than simply relative returns. The Hedge Fund Executive Management Committee, representing the equity managers, is investing in and expanding our product offering. We recently acquired a 50% interest in Northern Pines Capital LLC (Northern Pines), a US long/short equity hedge fund manager launched three years ago. Northern Pines is based in Boston and was founded by Pat Dunn and Dan Schiff. The fund has a similar investment strategy to that of our AlphaGen range. Strengthened by our infrastructure and distribution, we expect to grow this fund as we promote it to our clients in the US, Europe and Asia.

More diverse product offering in the US

We have diversified our fund offerings in the US to reduce our dependency on European equities and we successfully launched our All Asset and Dividend and Income Builder Funds. Both funds draw on the expertise and successful investment track records of our existing fund managers. Our Global Equity Income Fund was our main source of net inflows in the US, its assets growing by just over 30%, and it was in the top 3% selling funds in the Lipper Equity Income category in 2012.

As already mentioned, we hired the US-based credit specialists team. This is a significant step forward in the globalisation of our fixed income business and is in direct response to increasing client and consultant demand for global credit products.

New hires to expand our presence in Australia and Asia

In little more than eight months, we have made significant progress in moving ahead with our ambitions in Australia. Rob Adams, who was appointed in May as Head of our Australian business and charged with developing and directing the strategy, has secured Board approval for a three tier approach to expanding in this important market for us. The first step is to build a distribution hub in Sydney; we have hired Matt Gaden to head it up. In the future we plan to have both funds managed and products launched locally.

We also recruited two senior distribution professionals in Asia. In October, Shiro Tsubota joined as the new Chief Executive of our Japanese business and Mabel Chan joined as Head of Retail Distribution, Asia ex Japan.

Property remained resilient

Our Property business remained resilient. We raised equity for new and existing funds and took advantage of opportunities to expand our business and widen our distribution platform.

We continued our strict discipline of choosing only the best investments to meet our clients' objectives. Given the shortage of quality properties, we also made extensive use of our in-house development team to pursue more value-add projects.

Last year, we also extended two of our funds, the UK Shopping Centre Fund and our AUB French Logistics Fund. We continue to engage with clients in order to determine the best solution for them as funds approach their expiry dates.

We have expanded our European distribution through partnering with Investire Immobiliare SGR in Italy, opening an office in Stockholm and acquiring Horizon Investment Management France SAS. We also want to expand our brand and presence in Asia, and have become investment adviser to a Singapore joint venture - Silk Road - to invest and develop designer outlet malls in China together with our partner RDM Asia and an existing client. This is an exciting development and our first move into the Chinese property market. It will form the cornerstone of growth for Property in the Asia Pacific region.

Good progress in Private Equity

Our Private Equity business made good progress in the year, with the exception of Henderson PFI Secondary Fund II L.P. (Fund II). Our Asian Private Equity funds and Fund of Fund businesses continue to perform well, as did our Henderson PFI Secondary Fund I. As for Fund II, the most notable development was resolving its litigation issues. This is in the best interests of all our stakeholders and we continue working hard to increase the value of Fund II.

We simplified and streamlined the business

Our various initiatives last year all cost money, so we had to redeploy resources from other parts of our business. Although we increased our overall gross sales following the acquisitions of New Star and Gartmore, our net sales remained negative last year, so we conducted a detailed review of our business structure.

This identified problems with some legacy products and structures and (in a few areas) poor investment performance.

To tackle these weaknesses, we needed a simplified business structure. We have therefore removed the role of Chief Investment Officer, with the Heads of Equities and Fixed Income joining the Executive Committee (ExCo). In addition, we centralised all of our support functions under Shirley Garrood, Chief Financial Officer.

These changes have strengthened our commitment to delivering quality investment expertise, performance and service to our clients.

Outlook for equities

Overall, we feel optimistic about the outlook for equities this year while recognising that investors still need to be convinced that the worst of the economic crisis is behind them.

Clearly, there are risks in 2013: the 'debt ceiling' debate in the US, the well-publicised issues in the eurozone and continued unrest in the Middle East. However, we should not lose sight of the fact that the vast majority of companies are generating cash and have made great strides in strengthening their balance sheets. The equity income investor is being rewarded with the yield on equity markets globally expected to be 3.3% in 2013 and dividends are forecast to grow by 8%, well above inflation. Furthermore, if growth improves in the first quarter, the demands for more deleveraging will abate. Much would follow from this: greater confidence in equity earnings should prompt a move out of cash into risk assets.

All said, we continue to believe that European equities offer compelling value and that concerns around Europe, which are well known, are at least partly priced in already.

It is impossible to say whether, based on recent market movements, the bear market has come to an end. I am strongly of the view however, that so long as investors adopt a medium-term investment horizon and are willing to take a longer-term view on European equities, they will be rewarded with solid total returns from this asset class.

With the re-election of President Obama, Ben Bernanke is likely to remain Chairman of the US Fed until January 2014, thus ensuring monetary policy remains stimulative. Although US equities have been out of favour for some time with domestic investors, we think this is now likely to change.

The outlook for Asia is good: valuations are attractive, corporate fundamentals remain solid and balance sheets are strong. Evidently, uncertainty over the macroeconomic backdrop remains and in the short term at least, it is going to be difficult for Asian markets to disconnect from what is going on in the global economy. We remain confident that this is an attractive time to invest in Asia for the medium to long term. We expect companies to become increasingly upbeat about their prospects as the growth outlook for the region improves as we move through 2013. In terms of opportunities, China is the market with the most investment appeal from a valuation perspective and its current position in the growth cycle. As politics plays a critical role in driving the business cycle, the peak year of China's investment growth is likely to come in 2013 as the new leaders begin to implement their growth plans.

Despite the opportunities, risks remain. Should there be an inflationary spike, domestic interest rates could be driven higher and governments may become less accommodative in implementing measures to boost growth, though this is far from our central case.

Outlook for fixed income

Bond spreads - sovereign and corporate - have widened and narrowed markedly all in the same year. We do not believe that the returns delivered in 2012 will be followed by further double digit returns.

The much talked about potential for a "great rotation" out of bonds into equities could damage sentiment in the fixed income markets in 2013. In fact, the positive start to the year by equities may be in anticipation of such a shift. Whilst long-dated government bonds are likely to come under selling pressure, not only as a result of the potential for rotation but also given their absolute yield levels, we believe that corporate bond markets still offer the potential for positive returns.

Our fixed income clients benefit from a choice of products which offer many different active investment strategies. One of our favoured investment areas is "double core" bonds - bonds from core companies in core countries.

Furthermore, our fixed income portfolio managers oversee a host of strategies, many of which should deliver positive returns in the 4% to 7% range during 2013.Increasingly we are seeing client demand for 'total return' structures which allow our managers to asset allocate across all of our fixed income strategies.

Outlook for property

Globalisation has had a significant impact on international capital flows in all asset classes. Property is no exception, investors are adapting their allocations globally in order to enhance their potential risk adjusted returns and achieve diversification.

In Europe, it is hard to envisage 2013 being significantly different from 2012, with performance relying on income security and active asset management. Depending on developments in the eurozone, there could be a sell-off of exposures in the periphery with hopes for a strong recovery waning; but equally, investors could well make their first commitment back into the region on the back of encouraging economic numbers.

In the US, which is buoyed by more favourable growth assumptions, pricing has generally levelled off. However, mirroring both Europe and Asia, the market continues to have pricing disparities across real estate types and markets. The speed of recovery across occupier markets differs considerably between geographies, sectors and quality of product, a trend likely to persist. A return to employment growth has supported an improvement in retailer performance, though rentals and valuations remain challenging. The major US markets should resume their recovery as confidence improves, but investors would do well to focus on primary markets.

In Asia, a number of developments will have a significant impact on the region's capital and real estate markets. China's new leadership will provide support for economic growth prospects, whilst new governments in Japan and South Korea are already affecting fiscal and monetary policy. These socio-political events could lead to revised growth forecasts which will in turn mean investors need to time their entry and exit points in tandem with the projected real estate cycles.

Regulatory outlook

Governments and regulators continue to drive regulatory change to improve the operation, security and ultimately the reputation of global wholesale and retail markets.

In the UK, the approach to the supervision of regulated retail firms continues to move towards a greater consideration of business strategies, firm governance and outcomes for consumers. Rule changes such as the RDR emphasise the regulatory commitment to the fair treatment of customers and the avoidance of conflicts.

Regulatory bodies within the EU continue to initiate and enact new regulations aimed at harmonising the EU financial services industry. The EU Alternative Investment Fund Managers Directive (AIFMD) will change the landscape for diversified asset managers operating regulated and alternative funds.

Increasingly, US and other international regulations are impacting the environment in which we operate, leading to new and challenging obligations to address as our business develops. We are strongly committed to meeting these challenges.

The outlook for the Group

Looking ahead, I am positive about the outlook for the Group. We have made many changes to our structure and operations over the past four years, and they have put us in a stronger position to capitalise on the opportunities in the market.

I am confident that we are now in a position to deliver the products and level of service our client's need. Delivering on clients' investment objectives, and providing them with the service they deserve and expect, is at the heart of everything we do. Establishing their trust and working with them in partnership is paramount.

Achieving this will result in organic business growth which will enable us to continue investing in areas for future growth.

Ongoing changes in the regulatory environment will add costs to our organisation. However, this is a small price to pay to deliver a better and trusted governance structure which should improve clients' confidence in how their investments are being managed.

Thank you

I would like to thank Rupert for his outstanding contribution to the Board. I have greatly appreciated his guidance and support as we positioned Henderson for future growth.

In Richard Gillingwater, we are pleased to have found such a high calibre replacement. I very much look forward to working closely with him and benefiting from the significant experience he brings to the Board.

I would also like to thank our staff for all their hard work to ensure that we deliver excellence to our clients.

Andrew FormicaChief Executive

Financial review

Strengthening financial performance

Financial performance

Underlying profit before tax decreased by 8% to £146.5m. This was primarily due to lower performance and transaction fees, partially offset by a decline in variable staff compensation and continued cost control. As a result, the operating margin saw only a slight decline from 36.3% to 36.0% and the compensation ratio reduced from 41.6% to 41.1%. Underlying profit post tax was stable, but an increase in the average number of shares in issue resulted in lower diluted earnings per share of 11.7 pence from 12.4 pence.

Total income and fee margins

Management fee income decreased by 1% to £355.2m, mainly due to net fund outflows in 2011 and 2012 offsetting the additional quarter of Gartmore revenue in 2012. Transaction fees decreased by 14% to £43.7m, primarily due to the sale of Hermes private equity JV and other one-off fees in 2011. Performance fees decreased by 48% to £33.9m as performance fees earned from absolute return funds and SICAVs were substantially lower. The main contributors to performance fees are shown in the chart on this page.

These decreases in income impacted the total fee margin which decreased 6% to 66.6bps as a result of lower performance and transaction fees, whilst the management fee margin increased by 2% to 54.6bps, largely due to a higher proportion of the outflows being lower margin institutional business and an additional quarter of Gartmore revenue.

Total operating expenses

Operating expenses decreased by 9% to £277.0m. Employee compensation and benefits decreased by £20.0m to £179.9m. Variable staff costs fell by 25% and contributed £25.7m of this decrease as performance fee bonuses and other staff incentive plans reduced reflecting business performance. Fixed staff costs increased by £5.7m, primarily due to an increase in pension costs following the decision by the trustee of the Henderson Group Pension Scheme to switch more of the asset allocation from return seeking to risk reducing, which has resulted in a lower than expected return on assets. However, underlying fixed staff costs remained flat as the actions taken at the end of 2011 offset the cost of an additional quarter of Gartmore staff and the additional hires supporting our growth initiatives. Other operating expenses decreased by £6.7m or 6% reflecting the Group's continued cost control.

Finance income and expenses

Finance income increased by £1.7m to £5.0m as the Group recognised profits on the disposal of certain seed investments.

Finance expenses decreased by £2.9m to £14.3m, mainly due to the repayment of the Group's £142.6m 2012 Notes in May 2012, reducing the Group's interest charge. This was partially offset by an additional quarter of interest on the £150.0m 2016 Notes issued on 24 March 2011.

Non-recurring items

The non-recurring items recognised in 2012, resulted in a net post-tax credit of £18.5m. The Group recognised £26.6m net management fees on Fund II following the resolution of matters in dispute. This was partially offset by a £9.1m restructuring charge to simplify certain parts of the Group's business and reduce headcount to lower staff costs. The FSCS has increased the one-off levy in relation to 2010/2011 resulting in the Group recognising an additional charge of £2.5m. In addition, the Group has increased its void property provision by £1.2m. More details are provided in note 7 to the financial statements.

Tax

The tax charge on underlying profit for the year was £19.5m resulting in an effective tax rate of 13.3%. The effective tax rate on underlying profit is less than the pro rata UK corporation tax rate of 24.5%, primarily as a result of the difference in tax rates on earnings generated overseas and the utilisation and recognition of previously unrecognised tax losses. We expect our effective tax rate to be closer to 20% in the future.

In December we announced a change in the Company's tax residency from the Republic of Ireland to the UK.

AUM and fund flows

Total AUM at 31 December 2012 was £65.6bn, an increase of £1.3bn from 31 December 2011. During 2012, the Group had net fund outflows of £3.9bn as market volatility and uncertainty impacted clients' demand for risk assets. The Institutional business saw net outflows of £1.9bn, Retail net outflows of £1.2bn and Phoenix net outflows of £0.8bn. Market and FX movements added £5.2bn as market levels improved, particularly in the latter stages of 2012.

Investment performance

Investment performance of the Group's funds remained strong. Overall, 73% and 69% of funds exceeded their benchmarks over one and three years respectively. Looking at the asset classes, 81% and 72% of equity funds and 79% of fixed income funds were either achieving or beating their benchmarks over one year and three years. The property funds achieved 34% and 47% for one year and three years respectively.

In our UK retail funds, performance over one year has improved. Our SICAVs continue to perform strongly over all periods. The performance in the US mutual fund range has picked up significantly over one year as performance in the International Opportunities fund improved, finishing the year in the first quartile. Our investment trusts had another good year with all but one of our trusts outperforming their benchmark.

Along with the industry, our absolute return funds were tested by the volatility in markets. However, performance picked up in the second half of the year with the vast majority of our funds being positive for the year.

The Institutional business continued to perform strongly with our fixed income range, in particular, having delivered excellent performance for our clients.

Liquidity and capital resources

The Group's business continued to generate strong operating cash flows during 2012 with net cash flows from operating activities, totalling £166.8m. The Group repaid in full the £142.6m of the 2012 Notes in May 2012 from its existing cash resources.

Cash and cash equivalents at 31 December 2012 were £196.9m. After deducting the manager dealing accounts of £29.0m, unrestricted cash stood at £167.9m. Gross debt, at par, amounted to £150.0m at 31 December 2012. Therefore, the Group ended 2012 in a net unrestricted cash position of £17.9m, compared to a net debt position of £28.0m as at 31 December 2011.

The Group cancelled its remaining £200m multicurrency term facility and its £75m revolving credit facility on 3 February 2012 and 15 January 2013 respectively. The Group's focus remains, subject to external factors, to repay the 2016 Notes and to strengthen the Group's capital position.

Pension schemes

The Group has five pension schemes. A defined benefit scheme and a defined contribution scheme, together forming the Henderson Group Pension Scheme (HGPS), the Gartmore Pension Scheme (GPS) and three smaller unapproved pension top-up schemes for former executives.

There was a net surplus in HGPS of £125.4m, after tax deducted at source, at 31 December 2012. The decrease in the surplus was mainly due to a reduction in the discount rate used to value the scheme liabilities.

In April 2012, the trustee of the GPS, entered into a buy-in insurance agreement with Pension Insurance Corporation that covers the accrued pension of all members of the scheme. As a result, the Group has reduced its exposure to the risks associated with the scheme. The GPS, which is closed to future accrual, had a net surplus of £4.8m, after tax deducted at source, as at 31 December 2012.

The liability in respect of the Group's unapproved pension schemes amounted to £7.2m at 31 December 2012.

Regulatory requirements

The Group is subject to regulatory oversight and inspection by the FSA and other international regulatory bodies. Consequently, the Group's internal controls, governance, procedures and capital are reviewed on a continuous basis. Both management and the Board ensure that the Group is compliant with its regulatory obligations at all times. In 2011, as part of the Gartmore acquisition process, the Group was granted a new waiver from consolidated supervision which is valid until April 2016.

The regulatory capital surplus of the Group under the parent financial holding company test increased to £954m as at 31 December 2012 (2011: £623m) following the corporate restructure carried out as part of the change in tax residency from the Republic of Ireland to the UK announced on 13 December 2012.

Dividends

The Board is recommending a final dividend for 2012 of 5.05 pence per share which will bring the total dividend for 2012 to 7.15 pence per share, an increase of 2%. The proposed final dividend will be paid on 31 May 2013 to shareholders on the register on 10 May 2013.

The Board has adopted a progressive dividend policy and will continue to apply a dividend formula where the next interim dividend will be 30% of the total dividend for the previous year, assuming the Group has the resources to fund the dividend.

Shirley Garrood

Chief Financial Officer

Key performance indicators

How we performed

Earnings per share on underlying profit

Performance in 2012

The decline in diluted earnings per share from 12.4 pence in FY11 to 11.7 pence in FY12 was due to lower underlying profit and a higher average share count, partly offset by a lower effective tax rate.

Priorities for 2013

·; Keep the client at the centre of everything we do and build trusted partnerships

·; Focus on delivering organic business growth and investing in areas for the future

·; Remain vigilant on costs

Fee margin

Performance in 2012

The decrease in the total fee margin from 70.6bps in FY11 to 66.6bps in FY12 was due to a decrease in total fee income, largely driven by performance and transaction fees.

The increase in the management fee margin from 53.3bps in FY11 to 54.6bps in FY12 was due to a higher proportion of outflows from lower margin institutional business and an additional quarter of Gartmore revenues.

The decrease in the net margin from 23.6bps in FY11 to 22.5bps in FY12 was due to the decline in underlying profit before tax over the same period.

Priorities for 2013

·; Deliver the products which meet or exceed clients' needs

·; Maintain management fee margin

·; Deliver strong investment performance to generate higher performance fees

Compensation ratio and operating margin

Performance in 2012

The compensation ratio reduced from 41.6% in FY11 to 41.1% in FY12 reflecting the Group's continued cost control and variable nature of staff costs.

The operating margin reduced slightly from 36.3% in FY11 to 36.0% in FY12 as lower variable staff costs and continued cost control substantially offset the impact of lower fee income.

Priorities for 2013

·; Continue alignment of variable staff costs with business performance

·; Maintain operating margin and improve if market conditions allow

·; Maintain compensation ratio, subject to a number of factors, including net fund flows, market levels and performance fees

·; Ensure our clients, shareholders and staff interests are aligned

Net fund flows excluding Phoenix

Performance in 2012

Net fund outflows were £3.1bn (excluding Phoenix) in 2012 of which £1.9bn was from the Institutional business and £1.2bn was from the Retail business.

Priorities for 2013

·; Provide innovative solutions to our clients to meet their needs

·; Return to net sales growth, specifically in Retail

·; Expand global and absolute return product offering

·; Establish strategic relationships, especially to assist distribution

Investment performance over 1 and 3 years

Performance in 2012

Investment performance improved and remained strong with 73% and 69% of funds exceeding their benchmarks over one and three years respectively.

Priorities for 2013

·; Maintain strong investment performance across core funds over all periods

·; Assist fund managers in improving performance where funds have short-term underperformance

·; Strengthen investment talent in our core capabilities and growth initiatives

Treating Customers Fairly (TCF)

The TCF principle is embedded in the culture and procedures of the business. TCF, amongst other priorities, intends to promote fair treatment of customers throughout the product lifecycle, from design to post-sales support. We always aim to:

·; treat our clients fairly;

·; design products to meet clients' needs; and

·; ensure that information on our products is clear, fair and not misleading and that our interests are aligned with those of our clients.

Performance in 2012

·; Continuous oversight of key metrics monitoring TCF outcomes were overseen by the Board and senior management

·; Rigorous investment and performance analysis of products against objectives

·; High quality documentation and reporting designed to meet customer information needs

·; All staff completed TCF training during 2012

Priorities for 2013

·; Continue disciplined life cycle reviews on all products

·; Further market analysis for trends in consumer demand

·; Development of new products to meet known investment profiles of clients

Summary of movements in AUM

AUM by channel

AUM by asset type

Notes

1. Includes £12m of acquired AUM as a result of the Group's acquisition of a 50% interest in Northern Pines.

2. Includes £183m of acquired AUM as a result of the Group's acquisition of Horizon Investment Management France SAS.

3. Private Equity funds' AUM is based on 30 September 2012 valuations.

4. Closing AUM average net management fee bps are calculated including all Phoenix AUM and revenue.

Risk management

Managing risk at all levels

Our risk management framework helps us meet our business objectives within acceptable risk parameters and it is reviewed regularly so that new and emerging risks are identified early on.

Our culture embeds the management of risk at all levels within our organisation. The framework we operate under also ensures that we meet our business objectives without exceeding our risk appetite and it is subject to continuous review to ensure it recognises both new and emerging risks in the business.

Risk management

The Board considers risk assessment and the existence of effective controls to be fundamental to achieving the Group's corporate objectives within an acceptable risk and reward profile. Throughout 2012, there has continued to be an ongoing process for identifying, evaluating, managing and mitigating risks within the Group's control which accords with the guidance set out in the "Turnbull Report - Internal Control: Revised Guidance for Directors on the Combined Code - October 2005". No significant failings or weaknesses were identified during this period by this process. A summary of the Group's risk policy can be found on our website and the key risks and their mitigation are outlined under Risk management on pages 13 and 14.

The responsibility for managing risk lies with the ExCo. There are also a number of management committees chaired by, and consisting of, senior managers that have responsibility for specific areas of risk. These provide a forum for resolving and managing risk and regulatory issues. Day-to-day responsibility for the management of risk is delegated to line management who work closely with the Risk function to maintain an effective system of control and oversight.

Our framework utilises a 'three lines of defence' approach to managing risk: the first line is represented by business management managing risk and having in place effective controls; the second line comprises an independent Risk function which monitors the operation of those controls and ensures risks are not overlooked and a Compliance team which monitors regulatory risks. The third line is provided by Internal Audit which operates and reports independently of management to the Audit Committee and is responsible for assessing the effectiveness of controls and, where necessary, making recommendations for improvements and monitoring management action plans to implement such improvements.

Quarterly risk reports are provided to the Board Risk Committee (BRC) which include material business risks such as credit, market and operational risks and the Chief Risk Officer (CRO) provides regular reports to the BRC on these topics. The Risk function also maintains an incident management process and reports regularly to the ExCo.

The Board considers the scope of the activities of the BRC and the reporting framework set out above gives it sufficient information upon which to assess the effectiveness of the Group's system of internal controls and to assess the actual and potential risks facing the Group.

BRC's principal activities during 2012

The BRC received regular risk management reports which addressed both significant strategic and operational issues which occurred during the year as well as emerging risks. Reports on aggregated credit risk were provided to each meeting which included matters such as the monitoring of credit risks related to countries within the eurozone and counterparty risks. The assessment of risks arising from the potential break-up of the eurozone was presented and updated throughout the year.

During 2012, the pace of regulatory change has continued unabated and the BRC was regularly updated on developments and implications for risk management. The BRC was briefed on the G30 paper on Governance, the UK FSA's Annual Retail Conduct Risk Outlook and the results of industry surveys undertaken on asset managers' risk management practices and current themes. Other matters considered included issues relating to the derivative risk management framework in light of all the regulatory and other changes occurring in that area. The BRC also approved the updated CRO's and Risk function's priorities and objectives for 2012 and 2013.

The BRC reviewed and approved the updated Group Risk Management Framework and Policy Statement, an abbreviated copy of which can be found on the Group's website. It also approved the updated Credit Risk Policy at the beginning of the year.

The reverse stress test was reviewed and updated; this requires the Group to identify explicitly the scenarios most likely to render the business unviable and then assess them. As part of this exercise, an overview of possible significant events and mitigating management actions was considered. Semi-annually, the Internal Capital Adequacy Assessment Process document is updated by the Risk function in conjunction with the relevant business areas. The BRC then reviewed, challenged and recommended its approval to the Board following approval by the ExCo. The BRC also reviewed the risks relating to litigation matters.

Further information on the BRC's role in monitoring and assessing the Group's management of risk is set out in the risk management and oversight of internal controls sections.

Key risks and their mitigation

The key risks faced by the Group fall into a number of distinct categories and the means adopted to mitigate them are both varied and relevant to the nature of the risk concerned.

Acquisition

Description

The risk of organisational stress through the potential demands made on staff and resources through the need to integrate acquired businesses. This risk is aligned to the Group's long-term strategy that involves willingness to consider the acquisition of businesses.

Mitigation

We only consider acquisitions which fit with our strategic goals and meet our financial criteria such that we can realise value for our shareholders. Thorough due diligence is performed before any acquisition is made and this includes assessing the ability of the Group to integrate successfully the acquired business. There have been no material acquisitions during the year and the Gartmore businesses acquired in 2011 have been successfully integrated.

Credit

Description

The risk of a counterparty to the Group defaulting on funds deposited with it or the non-receipt of a trade debt.

Mitigation

We have an established Credit Risk Policy to ensure credit risk arising from transactions with counterparties is assessed, managed and monitored in line with the Group's risk appetite. Furthermore, the Credit Risk Committee meets regularly to approve, review and set limits for all new and existing counterparties. As a result of the continuing eurozone issues, there has been heightened focus on monitoring counterparties during 2012 and limits have been changed as appropriate.

Foreign currency

Description

The risk that the Group will sustain losses through adverse movements in exchange rates.

Mitigation

We mitigate this risk through either the effect of natural hedges i.e. holding financial assets and liabilities of equal value in the same currency, and by limiting the net exposure to an individual currency or by hedging exposure arising from available-for-sale financial assets. A Hedge Committee oversees the risk and reports to the Board monthly. As a result of the market conditions during 2012, there has continued to be heightened focus on monitoring euro denominated assets.

Key personnel

Description

The risk of losing either a member of the ExCo or one of the Group's key investment or distribution professionals. This could have an adverse effect on both the growth of the business and/or the retention of existing business.

Mitigation

We operate competitive remuneration structures designed to recognise and reward performance. We also have succession planning to ensure that there is cover for key roles should they become vacant. In addition, staff surveys identify any issues which could adversely impact staff retention and comprehensive training is offered ensuring skills and knowledge reside in more than one individual.

Liquidity

Description

The risk that the Group may be unable to meet its payment obligations as they fall due.

Mitigation

We manage liquidity on a daily basis within the Finance function, to ensure the Group has sufficient cash and/or highly liquid assets available to meet its liabilities. The Group ensures that it has access to funds to cover all forecast commitments for at least the following 12 months. During the year, the 2012 Notes were repaid. Henderson does not bear any liquidity risk associated with our clients' funds and has no obligation to provide short-term liquidity to our clients.

Investment performance

Description

The risk that funds fail to achieve performance hurdles or benchmarks. This might cause clients to redeem their investments, which in turn would result in a reduction in revenue earned by the Group. Poor fund performance will also result in lower performance fees.

Mitigation

We mitigate this risk through a robust investment process which includes detailed research. We also have a clearly articulated investment philosophy and analyse our funds by comparing their performance against appropriate benchmarks. We maintain a broad range of funds to reduce the probability of multiple funds underperforming at the same time. An independent Investment Risk function monitors risk and performance against appropriate benchmarks and works closely with fund managers and senior management to review the monitoring reports.

Market

Description

The risk that market conditions lead to a decline in the value of Group available-for-sale financial assets and/or a reduction in the value of clients' AUM, which would result in a reduction in the level of the revenue that is based on the value of clients' AUM.

Mitigation

We mitigate the risk on the Group's available-for-sale financial assets by investing in a diversified range of assets and mitigate a fall in the value of clients' AUM by having a broad range of clients by distribution channel, product, asset class and region. In addition, the Group actively seeks fee bases which are not solely related to the market value of AUM and makes a significant amount of its expense base variable.

Operational

Description

The risk that the Group will sustain losses through inadequate or failed internal processes, people, systems and external events. This includes the risk arising from failing to manage key outsourced service providers and also the risk arising from business disruption (the occurrence of events which could have a material impact on the operations of the business).

Mitigation

We operate a system of controls which is designed to ensure operational risks are mitigated to an acceptable level. The operation and effectiveness of the controls are regularly assessed and confirmed through the work of the Group's assurance functions: Risk, Compliance and Internal Audit. Outsourced service providers are overseen by the relevant line function and, for key relationships, their controls are also reviewed by the Group's assurance functions. We maintain and test business continuity plans which are designed to ensure that, should an event occur which disrupts business activity, we are able to maintain our operations without irreparable damage being done to the business.

Regulatory/legal

Description

The risk that a change in laws and regulations will materially affect the Group's business or markets in which it operates. The Group's business is subject to many regulations in different jurisdictions and currently the pace of change is significant and may affect the business either directly or indirectly by reducing investors' appetite for our products, increasing capital requirements or in some other way.

Mitigation

We continuously monitor regulatory developments, via a dedicated team in Compliance. Where there is likely impact on our business, we have working groups in place to implement the changes. The broader Compliance team monitors ongoing regulatory obligations and engages in regular dialogue with our regulators. In 2012, this included AIFMD, RDR and derivatives.

Reputational

Description

The risk that negative publicity regarding the Group will lead to a loss of revenue or litigation. The risk of damage to the Group's reputation is more likely to result from one of the risks materialising rather than as a standalone risk.

Mitigation

We believe that reputational risk is mitigated through the effective mitigation of the other key risks. In addition, we regularly communicate with clients and the market and, in doing so, help to mitigate the risk of reputational damage.

Consolidated Income Statement

For the year ended 31 December 2012

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

Consolidated Statement of Financial Position

As at 31 December 2012

The financial statements were approved by the Board of Directors and authorised for issue on 26 February 2013. They were signed on its behalf by:

Rupert Pennant-Rea

Chairman

Consolidated Statement of Changes in Equity

For the year ended 31 December 2012

Consolidated Statement of Cash Flows

For the year ended 31 December 2012

Company Income Statement

For the year ended 31 December 2012

Company Statement of Comprehensive Income

For the year ended 31 December 2012

Company Statement of Financial Position

As at 31 December 2012

The financial statements were approved by the Board of Directors and authorised for issue on 26 February 2013. They were signed on its behalf by:

Rupert Pennant-Rea

Chairman

Company Statement of Changes in Equity

For the year ended 31 December 2012

Company Statement of Cash Flows

For the year ended 31 December 2012

Notes to the Financial Statements

Group and Company

1. Authorisation of financial statements and statement of compliance with IFRS

The Group and Company financial statements for the year ended 31 December 2012 were authorised for issue by the Board of Directors on 26 February 2013 and the respective Statements of Financial Position were signed on the Board's behalf by the Chairman, Rupert Pennant-Rea. Henderson Group plc is a public limited company incorporated in Jersey, and from 12 December 2012, tax resident in the United Kingdom (formerly tax resident in the Republic of Ireland). The Company's ordinary shares are traded on the LSE and CDIs are traded on the ASX.

The Group and Company financial statements have been prepared in accordance with IFRS, as adopted by the European Union and the provisions of the Companies (Jersey) Law 1991.

2. Accounting policies

2.1 Significant accounting policies

Basis of preparation

The Group and Company financial statements have been prepared on a going concern basis and on the historical cost basis, except for certain financial instruments that have been measured at fair value.

The Group and Company financial statements are presented in GBP and all values are rounded to the nearest one hundred thousand pounds (£0.1m), except when otherwise indicated.

Basis of consolidation

The consolidated financial statements of the Group comprise the financial statements of Henderson Group plc and its subsidiaries as at 31 December each year.

The financial statements of all the Group's significant subsidiaries are prepared to the same year end date as that of the Company. The accounts of all material subsidiaries are prepared under either IFRS or local GAAP. Where prepared under local GAAP, balances reported by subsidiaries are adjusted to meet IFRS requirements for the purpose of the consolidated financial statements.

The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Income Statement from the effective date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that the control ceases. Non-controlling interests represent the equity interests in subsidiaries not wholly held by the Group.

Interests in property closed-ended funds, private equity infrastructure funds, Open-Ended Investment Companies (OEICs) and unit trusts are accounted for as subsidiaries, associates, joint ventures or other financial investments depending on the holdings of the Group and on the level of influence and control that the Group exercises. The Group's investment in associates, where the Group has the ability to exercise significant influence as well as joint ventures where there is joint control, are accounted for using the equity method of accounting.

Income recognition

Fee income and commissions receivable

Fee income includes management fees, transaction fees and performance fees (including earned carried interest). Management fees and transaction fees are recognised in the accounting period in which the associated investment management or transaction services are provided. Performance fees are recognised when the prescribed performance hurdles have been achieved and it is probable that the fee will crystallise as a result. The Group accrues the expected fee on satisfaction that the recognition criteria have established a performance fee is due. Initial fees and commissions receivable are deferred and amortised over the anticipated period in which services will be provided, determined by reference to the average term of investment in each product on which initial fees and commissions are earned. Other income is recognised in the accounting period in which services are rendered.

Carried interest

The Group is entitled to receive a share of profits (carried interest) from certain private equity funds it manages, once the funds meet certain performance conditions. Where the funds' investments represents a large volume of the shares traded in relatively illiquid markets, the Group does not deem it appropriate to recognise unearned carried interest based on current fair values. However, where the value of the carried interest will be determined by the future disposal of investments which are quoted on a recognised exchange, then the Group will recognise carried interest to the extent deemed prudent. Carried interest for all other types of investments is only recognised when investments are disposed of and performance conditions are met.

Finance income

Interest income is recognised as it accrues using the effective interest rate method. Dividend income from investments is recognised on the date that the right to receive payment has been established.

Post-employment benefits

The Group provides employees with retirement benefits through both defined benefit and defined contribution schemes. The assets of these schemes are held separately, from the Group's general assets, in trustee administered funds.

Defined benefit obligations and the cost of providing benefits are determined annually by independent qualified actuaries using the projected unit credit method. The obligation is measured as the present value of the estimated future cash outflows using a discount rate based on AA rated corporate bond yields of appropriate duration. The resulting surplus or deficit of defined benefit assets less liabilities is recognised in the Consolidated Statement of Financial Position, net of any taxes that would be deducted at source. The Group's expense related to these schemes is accrued over the employees' service lives, based upon the actuarial cost for the accounting period, having considered interest costs and the expected return on assets. Actuarial gains and losses, to the extent these are recognised, are included in the Consolidated Statement of Comprehensive Income in the accounting period in which they occur, net of any taxes that would be deducted at source. Normal contributions to the defined contribution scheme are expensed in the Consolidated Income Statement as they become payable in accordance with the rules of the scheme.

Other post-employment benefits, such as medical care and life insurance, are also provided for certain employees. The costs of such benefits are accrued over the employees' service lives, based upon the actuarial cost for the accounting period using a methodology similar to that for defined benefit pension schemes.

Share-based payment transactions

The Group issues equity-settled share-based payments to certain employees. The valuation methodology, assumptions and schemes are disclosed in note 10.

Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date. The awards are expensed, with a corresponding increase in reserves, on either a straight-line basis or a graded basis (depending on vesting conditions) over the vesting period, based on the Group's estimate of shares that will eventually vest. Based on the Group's estimate, the expected life of the awards used in the determination of fair value is adjusted for the effects of non-transferability, exercise restrictions, market performance and behavioural considerations.

Income taxes

The Group provides for current tax expense according to the tax laws of each jurisdiction in which it operates, using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is provided, using the liability method, on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax liabilities are not recognised if they arise from goodwill; however, they are recognised on separately identified intangible assets. If the deferred tax arises from the initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither the accounting nor taxable profit or loss, it is not accounted for. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are not recognised for taxable differences arising on investments in subsidiaries, branches, associates and joint ventures where the Group controls the timing of the reversal of the temporary differences and where the reversal of the temporary differences is not anticipated in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

Income tax relating to items recognised in the Consolidated Statement of Comprehensive Income is also recognised in that statement and not in the Consolidated Income Statement.

Sales taxes

Assets and expenses are recognised net of the amount of sales tax, except where the sales tax is not recoverable, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of expenses. Receivables and payables are stated with the amount of sales tax included. The net amount of sales tax recoverable from, or payable to, the tax authority, is included within receivables or payables in the Consolidated Statement of Financial Position.

Foreign currencies

The functional currency of the Company is GBP. Transactions in foreign currencies are recorded at the appropriate exchange rate prevailing at the date of the transaction. Foreign currency monetary balances at the reporting date are converted at the prevailing exchange rate. Foreign currency non-monetary balances carried at fair value or cost are translated at the rates prevailing at the date when the fair value or cost is determined. Gains and losses arising on retranslation are taken to the Consolidated Income Statement, except for available-for-sale financial assets where the unhedged changes in fair value are recognised in the Consolidated Statement of Comprehensive Income.

On consolidation, the assets and liabilities of the Group's overseas operations whose functional currency is not GBP are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at average exchange rates for the accounting period. Exchange differences arising, if any, are taken through the Consolidated Statement of Comprehensive Income to the translation reserve. In the period in which an operation is disposed of, translation differences are recognised in the Consolidated Income Statement.

Business combinations

Under the requirements of IFRS 3 Business Combinations, all business combinations are accounted for using the purchase method (acquisition accounting). The cost of a business combination is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed and equity instruments issued by the acquirer. The fair value of a business combination is calculated at the acquisition date by recognising the acquiree's identifiable assets, liabilities and contingent liabilities that satisfy the recognition criteria, at their fair values at that date. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree. The cost of a business combination in excess of fair value of net identifiable assets or liabilities acquired, including intangible assets identified, is recognised as goodwill. Any costs incurred in relation to a business combination after 1 July 2009 are expensed as incurred.

Goodwill

Goodwill arising on acquisitions is capitalised in the Consolidated Statement of Financial Position. Goodwill on acquisitions prior to 1 January 2004 is carried at its value on 1 January 2004 less any subsequent impairments.

Goodwill arising on investments in associates and joint ventures is included within the carrying value of the equity accounted investments.

Impairment of goodwill

Goodwill is reviewed for impairment annually or more frequently if changes in circumstances indicate that the carrying value may be impaired. For this purpose, management prepares a valuation for each cash generating unit based on value in use. This valuation is based on the approved forecasts for future years, extrapolated for expected future growth rates and discounted at a risk adjusted discount rate based on the Group's post-tax weighted average cost of capital. Where the value in use is less than the carrying amount, an impairment is recognised. Where goodwill forms part of an entity or sub-group and the entity or sub-group or part thereof is disposed of, the goodwill associated with the entity or sub-group disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal. Any impairment is recognised immediately through the Consolidated Income Statement and cannot subsequently be reversed.

Investment management contracts

Investment management contracts have been identified as a separately identifiable intangible asset arising on the acquisition of subsidiaries. Intangible assets are recognised at the present value, as at the date of acquisition, of the expected future cash flows of the investment management contracts acquired. The intangible asset is amortised on a straight-line basis over the expected life of the investment management contracts, currently estimated at between three and eight years.

Investments in subsidiaries

Investments by the Company in subsidiary undertakings are held at cost less any impairment where circumstances indicate that the carrying value may not be recoverable.

Equity accounted investments

Equity accounted investments comprise investments in associates and joint ventures held by the Group. Investments are recognised initially at cost. The investments are subsequently carried at cost adjusted for the Group's share of profits or losses and other changes in comprehensive income of the associate or joint venture, less any dividends or distributions received by the Group. The Consolidated Income Statement includes the Group's share of profits or losses after tax for the year, or period of ownership, if shorter.

Deferred acquisition and commission costs

Incremental acquisition costs incurred in obtaining investment management business are deferred to the extent that they are recoverable out of future income. This includes initial commission paid by the Group in respect of certain investment products. These costs are amortised over the period in which they are expected to be recovered from matching revenues from related contracts. At the end of each accounting period, deferred acquisition and commission costs are reviewed for recoverability against future revenues from the related contracts in force at the reporting date.

Impairment of assets (excluding goodwill and financial assets)

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes an estimate of the recoverable amount, being the higher of an asset's fair value less cost to sell, and its value in use. In assessing value in use, the estimated future cash flows are discounted to their net present value using a risk adjusted discount rate based on the Group's post-tax weighted average cost of capital.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered to be impaired and is written down to its recoverable amount. An impairment loss is recognised in the Consolidated Income Statement.

Financial instruments

Financial assets and liabilities are recognised in the Consolidated Statement of Financial Position when the Group becomes party to the contractual provisions of an instrument, at fair value adjusted for transaction costs except for financial assets classified at fair value through profit or loss, where transaction costs are immediately recognised in the Consolidated Income Statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or where they have been transferred and the Group has also transferred substantially all risks and rewards of ownership. Financial liabilities cease to be recognised when the obligation under the liability has been discharged, cancelled or has expired.

Financial assets

Purchases and sales of financial assets are recognised at the trade date, being the date when the purchase or sale becomes contractually due for settlement. Delivery and settlement terms are usually determined by established practices in the market concerned.

Debt securities, equity securities and holdings in authorised collective investment schemes are designated as either fair value through profit or loss, or available-for-sale, and are measured at subsequent reporting dates at fair value. The Group determines the classification of its financial assets on initial recognition. Financial assets classified as fair value through profit or loss comprise the Group's manager box positions in OEICs and unit trusts and investments in the Group's fund products on behalf of employee benefit trusts. Where securities are designated as fair value through profit or loss, gains and losses arising from changes in fair value are included in the Consolidated Income Statement. Where investments in the Group's fund products are held against outstanding deferred compensation liabilities, any movement in the fair value of these assets will be offset by a corresponding movement in the deferred compensation liability in the Consolidated Income Statement.

For available-for-sale financial assets, gains and losses arising from changes in fair value which are not part of a designated hedge relationship are recognised in the Consolidated Statement of Comprehensive Income. When an asset is disposed of, the cumulative changes in fair value, previously recognised in the Consolidated Statement of Comprehensive Income, are taken to the Consolidated Income Statement in the current accounting period.

Unrealised gains and losses on financial assets represent the difference between the fair value of financial assets at the reporting date and cost or, if these have been previously revalued, the fair value at the last reporting date. Realised gains and losses on financial assets are calculated as the difference between the net sale proceeds and cost or amortised cost.

Where a fall in the value of an investment is prolonged or significant, this is considered an indication of impairment. In such an event, the investment is written down to fair value and the amounts previously recognised in the Consolidated Statement of Comprehensive Income in respect of cumulative changes in fair value, are taken to the Consolidated Income Statement as an impairment charge.

Trade receivables, which generally have 30 day payment terms, are initially recognised at fair value, normally equivalent to the invoice amount. When the time value of money is material, the fair value is discounted. Provision for specific doubtful debts is made when there is evidence that the Group will not be able to recover balances in full. Balances are written off when the receivable amount is deemed irrecoverable.

Cash amounts represent cash in hand and on-demand deposits. Cash equivalents are short-term highly liquid government securities or investments in money market instruments with a maturity date of three months or less.

Financial liabilities

Financial liabilities are stated at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement. A financial liability ceases to be recognised when the obligation under the liability has been discharged, cancelled or has expired.

Derivative financial instruments and hedging

The Group may, from time to time, use derivative financial instruments to hedge against price, interest rate, foreign currency and credit risk. Derivative financial instruments are classified as financial assets when the fair value is positive or as financial liabilities when the fair value is negative.

At the inception of a hedge, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. Such hedges are expected to be effective in achieving offsetting changes in fair value and are assessed on an ongoing basis to determine that they have been effective throughout the reporting periods for which they were designated and are expected to remain effective over the remaining hedge period.

Currency hedges

Forward foreign currency contracts are used to hedge the currency nominal value of certain euro and US dollar denominated available-for-sale financial assets and are classified as fair value hedges. The change in the fair value of a hedging instrument is recognised in the Consolidated Income Statement. The change in the fair value of the hedged item, attributable to the risk being hedged, is also recognised in the Consolidated Income Statement, offsetting the fair value changes arising on the designated hedge instrument.

Fair value estimation

The fair value of financial instruments traded in active markets (such as publicly traded securities and derivatives) is based on quoted market prices at the reporting date. The quoted market price used for financial instruments is the current bid price. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques commonly used by market participants, including the use of comparable recent arm's length transactions, discounted cash flow analysis and option pricing models.

Provisions

Provisions which are liabilities of uncertain timing or amount, are recognised when: the Group has a present obligation, legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. In the event that the time value of money is material, provisions are determined by discounting the expected future cash flows at a discount rate that reflects a current market assessment of the time value of money and, where appropriate, the risks specific to the liability. When discounting, the increase in the provision due to the passage of time is recognised as a finance charge.

Equity shares

The Company's ordinary equity shares of 12.5 pence each are classified as equity instruments. Equity shares issued by the Company are recorded at the fair value of the proceeds received or the market price on the day of issue. Direct issue costs, net of tax, are deducted from equity through share premium. When share capital is repurchased, the amount of consideration paid, including directly attributable costs, is recognised as a change in equity.

Own shares held

Own shares held are equity shares of the Company acquired by or issued to employee benefit trusts. Own shares held are recorded at cost and are deducted from equity. No gain or loss is recognised in the Consolidated Income Statement on the purchase, issue, sale or cancellation of the Company's own equity shares.

Dividend recognition

Dividend distributions to the Company's shareholders are recognised in the accounting period in which the dividends are paid and, in the case of final dividends, when these are approved by the Company's shareholders at the AGM. Dividend distributions are recognised in equity.

2.2 Significant accounting judgements, estimates and assumptions

In the process of applying the Group's accounting policies, management has made significant judgements involving estimations and assumptions which are summarised below:

Impairment of intangible assets

Goodwill is reviewed for impairment annually or more frequently if there are indicators that the carrying value may be impaired.

Investment management contracts are reviewed for impairment annually or more frequently if there are indications that the carrying value is impaired.

The judgement exercised by management in arriving at these valuations includes the selection of market growth rates, fund flow assumptions, expected margins and costs. Further details are given in note 13.

Share-based payment transactions

The Group measures the cost of equity-settled share schemes at fair value at the date of grant and expenses them over the vesting period based on the Group's estimate of shares that will eventually vest.

Consolidation of seed investments

From time to time, the Group invests seed capital on the launch of products, such as UCITs, SICAVs, hedge funds, property and private equity funds and other investment vehicles. The seed capital investments vary in duration depending on the nature of the investment, with a typical range of less than one year for equity and fixed income products and between three and seven years for private equity and property funds. Given the limited size and nature of these investments, the Group does not consider itself to have significant influence or control over the underlying funds to warrant accounting for them using the equity method or consolidating them into the Group's financial statements.

Impairment of available-for-sale financial assets

Available-for-sale financial assets are reviewed for impairment at each reporting date or more frequently if there are indicators that the carrying value is impaired. In specific cases, where a quoted market price or fair value is not available, significant judgement is exercised by management in determining the extent of impairment, taking into account other available market data. Management also exercises judgement in determining whether a decrease in the value of an asset meets the prolonged or significant tests.

Pension and other post-employment benefits

The costs of, and period end obligations under, defined benefit pension schemes are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates and future pension increases. Due to the long-term nature of these schemes, such estimates are subject to significant uncertainty. Further details are given in note 21.

Provisions

By their nature, provisions often reflect significant levels of judgement or estimates by management. The nature and amount of the provisions included in the Consolidated Statement of Financial Position are detailed in note 22 and contingencies not provided for are disclosed in note 32.

Deferred tax assets

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that future taxable profits will be available against which the losses can be utilised. Significant judgement is required by management in determining the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits.

2.3 Changes in accounting policies

The accounting policies adopted in this Annual Report and Accounts are consistent with those of the previous financial year. The Group has also adopted any IFRS or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2012. There were no new standards effective for the current year which had a material impact on the Group.

2.4 Future changes in accounting policies

A number of new standards and amendments to standards and interpretations are effective for periods beginning on or after 1 January 2013. The following new standards are not applicable to these financial statements but are expected to have an impact when they become effective. The Group plans to apply these standards in the reporting period in which they become effective.

IAS 1 Presentation of Financial Statements requires items in other comprehensive income to be grouped based on whether they are potentially reclassifiable to the income statement. This amendment has a mandatory effective date in 2013.

IAS 19 Employee Benefits replaces interest costs and expected return on plan assets with a net interest cost that is calculated by applying a discount rate to the net defined benefit asset or liability. This revision has a mandatory effective date in 2013. The expected impact of adoption is disclosed in note 34.

IFRS 10 Consolidated Financial Statements defines the principle of control, and establishes control as the basis for consolidation in the preparation of consolidated financial statements. This standard has a mandatory effective date in 2014.

IFRS 11 Joint Arrangements states that when deciding how to account for joint ventures, the focus is on rights and obligations. This standard has a mandatory effective date in 2014.

IFRS 12 Disclosure of Interests in Other Entities includes the disclosure requirements for all forms of interests in other entities, such as joint arrangements, associates and other off balance sheet vehicles. This standard has a mandatory effective date in 2014.

IFRS 9 Financial Instruments proposes revised measurement and classification criteria for financial assets. This standard has a mandatory effective date in 2015.

Unless stated above, the Group is assessing the impact of the above standards on the Group's future financial statements.

3. Income

Group

4. Expenses

4.1 Operating expenses

Group

Other expenses include marketing, travel and subsistence, legal and professional costs and irrecoverable sales taxes.

4.2 Auditors' remuneration

Group and Company

The above analysis reflects the amounts billed by Ernst & Young LLP or accrued by the Group in the respective years. Included in the fees payable to the Group's auditors for the audit of the Group's 2012 consolidated financial statements are fees of £30,000 (2011: £30,000) for the audit of the Company's 2012 financial statements.

5. Employee compensation and benefits

5.1 Average number of employees

The average number of full-time employees was as follows:

The total number of full-time employees (excluding those working on capitalised projects) at 31 December 2012 was 1,014 (2011: 1,060) for the Group and three (2011: three) for the Company.

5.2 Analysis of employee compensation and benefits expense

Employee compensation and benefits expense comprises the following:

5.3 Gartmore related employee share awards

Group

The £10.6m (2011: £33.2m) charge represents the post-acquisition share-based payment charge, including £1.3m (2011: £3.1m) for national insurance, for awards to Gartmore employees originally made in 2010 and exchanged into Henderson Group plc shares upon acquisition on the same terms as the original awards.

6. Finance expenses

7. Non-recurring items

Group

The non-recurring items comprise the following:

2012

Net recognition of Henderson PFI Secondary Fund II L.P. (Fund II) fees

Net management fees of £26.6m relating to Fund II have been recognised based on the resolution of matters in dispute between certain claimants who were investors in Fund II and the general partner of Fund II, Henderson Equity Partners (GP) Limited, and the manager of Fund II, Henderson Equity Partners Limited.

Restructuring costs

The Group has reorganised to simplify certain parts of its business and reduced headcount to lower staff costs, incurring restructuring costs of £9.1m.

Additional FSCS 2010/2011 levy

The FSCS have increased the one-off levy in relation to 2010/2011 resulting in the Group recognising an additional charge of £2.5m.

Gartmore void property provision

The Group has increased the void property provision, recognised on the acquisition of Gartmore, by £1.2m due to lower occupancy rates than initially forecast.

2011

Restructuring costs

In response to the market downturn in the second half of 2011, the Group restructured certain parts of its business, incurring staff related costs of £6.0m.

Gartmore integration costs

On 4 April 2011, the Group's acquisition of Gartmore was completed. In relation to the acquisition and integration of Gartmore, costs of £69.7m before tax were incurred during the period. These costs mainly related to staff related expenses, legal and professional fees, transition of outsourced retail and investment operations, office relocation and reorganisation and fund mergers.

New Star void property provision release

A void property provision recognised on the acquisition of New Star in 2009 was reassessed, resulting in a release of £6.5m.

Non-recurring tax

Following the acquisition of Gartmore, the Group reassessed the potential utilisation of previously unrecognised tax assets and tax liabilities recognised by Gartmore in the first quarter of 2011. Consequently, a deferred tax asset of £14.8m was recognised in respect of the expected utilisation of these assets against future taxable profits and £4.1m of Gartmore tax liabilities were released.

8. Tax

Tax recognised in the income statement

Tax recognised in the statement of comprehensive income

Reconciliation of profit before tax to tax credit

The tax credit for the year is reconciled to the profit/(loss) before tax in the income statement as follows:

Group

Company

9. Earnings per share

Group

The weighted average number of shares for the purpose of calculating earnings per share is as follows:

Basic and diluted earnings per share have been calculated on the profit attributable to equity holders of the parent. The difference between the weighted average number of shares used in the basic earnings per share and the diluted earnings per share calculations reflects the dilutive impact of options and awards of shares to employees, which are anticipated to vest based on market conditions as at 31 December 2012.

9.1 On underlying profit after tax attributable to equity holders of the parent

9.1.1 Earnings

9.1.2 Earnings per share

9.2 On profit after tax attributable to equity holders of the parent

9.2.1 Earnings

9.2.2 Earnings per share

10. Share-based payments

Group

10.1 Share-based compensation plans

The following share-based compensation plans were in operation during 2012:

Restricted Share Plan (RSP)

The RSP allows employees to receive shares in the Company for £nil consideration at a future point, usually after three years. The awards are made typically for staff recruitment and retention purposes and larger awards, generally, have performance hurdles. The Remuneration Committee approves all awards and the vesting of awards over £50,000. On vesting, the employee must satisfy any employee tax and social security obligations.

Employee Share Ownership Plan (ESOP)

The 2011 ESOP enabled all staff, including Executive Directors, to defer part of their cash-based incentive awards up to a specified limit through the purchase of Company shares. The 2011 ESOP awards up to three matching shares for every share purchased depending on the performance of the Henderson Group TSR and Company share price. It is a five year plan with one third of the matching shares vesting on the third, fourth and fifth anniversaries, if the conditions have been met on each anniversary.

Long-Term Incentive Plan (LTIP)

The LTIP awards selected employees restricted shares or £nil cost options that have employment conditions and performance conditions attached as shown below. Employees who have been awarded £nil cost options have five years to exercise their options following the three year vesting period:

If the Henderson Group TSR is between the 50th and 75th percentiles, the amount vesting will increase on a linear basis. The Remuneration Committee must also be satisfied the Henderson Group TSR reflects the underlying performance of the Group. For the 2012 LTIP, the performance hurdle was 95% relative to Henderson Group TSR and 5% on risk and sustainability metrics.

Since 2011, employees are entitled to dividend equivalents, based on the dividends declared, during the three year vesting period in respect of the shares that vest. The dividend equivalents are payable in two equal tranches, one and two year(s) after vesting. However, employees are not entitled to vote or receive dividends in respect of these awards until the vesting conditions are met, nor are they allowed to pledge, hedge or assign the expected awards in any way.

The 2009 LTIP met its vesting conditions on 31 December 2011 and 100% of awards vested in April 2012. The 2010 LTIP did not meet its vesting conditions on 31 December 2012 and all awards lapsed.

Deferred Equity Plan (DEP)

Employees who receive cash-based incentive awards over a preset threshold, have an element deferred. The majority of awards are deferred into the Company's shares, with some deferrals into Group managed funds. The DEP trustee purchases Company shares and units or shares in Group managed funds and holds them in trust. Awards are deferred for up to three years and vest in three equal tranches. Those employees who elected to participate in the 2011 ESOP, have their restricted shares, upon vesting, automatically transfer into the 2011 ESOP as bonus shares. They revert to matching shares subject to the performance and employment conditions of that plan.

The 2012 DEP has a matching share element where employees, excluding Executive Directors, are awarded one matching share for every three restricted shares on the third anniversary of the award. One third of the restricted shares will become unrestricted on each anniversary. If an employee requests to receive any of the restricted shares prior to the third anniversary, the related matching shares will be forfeited.

Hedge fund performance fee bonus awards are deferred into hedge funds and are held in trust for three years. A third of the units or shares will convert from restricted units or shares to bonus units or shares each anniversary, and the forfeiture is lifted.

Forfeiture conditions apply in the case of approved and unapproved leavers.

The expense of deferred short-term incentive awards is recognised in the Consolidated Income Statement over the period of deferral. As at 31 December 2012, £19.7m (2011: £21.1m) of deferred awards are to be recognised in future periods.

Buy As You Earn Share Plan (BAYE)

The BAYE is a HMRC approved plan. Eligible employees purchase shares in the Company by investing monthly, up to £125 (annual limit £1,500), which is deducted from their gross salary. For each share purchased, for no additional payment, two free matching shares are awarded (partnership shares). Partnership shares will be forfeited if purchased shares are withdrawn from the trust within one year.

The international version of the BAYE operates on a similar basis to that of the UK, but each purchased share is matched with one partnership share, which is not subject to forfeiture.

Company Share Option Plan (CSOP)

The CSOP is a HMRC approved share option plan with the maximum value of unvested options at any time limited to £30,000 for UK employees. No such restrictions apply for overseas employees. Employees buy Company shares after a three year vesting period at an option price fixed at the start of the scheme. There are no Group performance conditions attached to the options and the exercise period is two years, whilst US employees have three months to exercise. Executive Directors are not eligible to participate in the CSOP, but they may hold awards made prior to their executive appointment. The 2012 CSOP option price was £1.25 (2011 CSOP: £1.63 and 2010 CSOP: £1.24). The 2009 CSOP awards, excluding US employees, became exercisable in March 2012. The option price was £0.73. The CSOP 2010 was available to exercise for US employees in June 2012 as the US CSOP is a two year plan.

Executive Shared Ownership Plan (ExSOP)

The ExSOP is an employee share ownership plan and is aimed at encouraging employee share ownership at middle management level. Executive Directors do not participate in the ExSOP.

Certain employees are invited to acquire jointly, with an employee benefit trust, the beneficial interest in a number of Company shares under the terms of a joint ownership agreement (JOA). Under a JOA, the employee will benefit from any growth in value in excess of a hurdle price fixed at the time of the award.

For the 2012 ExSOP, the market price at grant was £1.21 (2011: £1.61) per share. The hurdle price was set at £1.31 (2011: £1.76) per share. The shares have a three year vesting period with a subsequent two year exercise period.

Sharesave scheme (SAYE)

The SAYE is a HMRC approved plan. UK employees may participate in more than one scheme but only up to a maximum of £250 per month across all schemes. Employees who participate in the SAYE contribute a monthly amount from their net salary to a savings account. The SAYE vesting period is three years for UK employees.

At the end of a three year period, the employees in the 2012 SAYE can exercise their share options using the funds in their savings account, together with any bonus equivalent, 2012: 0.0 (2011 SAYE: 0.1 and 2010 SAYE: 0.3), to subscribe for shares at a preset price. This was £0.92 (2011 SAYE: £1.31 and 2010 SAYE: £1.00) per share in 2012, a 20% discount to the average share price five business days prior to the award. Employees have up to six months after the three year period to exercise their options and subscribe for shares. Forfeiture provisions apply in the case of approved and unapproved leavers.

The USA Employee Share Purchase Plan (ESPP) operates on the same principles as the UK SAYE, but has a two year savings period, a lower discount at 15% and no bonus element. In 2012, the preset option price was USD1.54 (2011 ESPP: USD2.19 and 2010 ESPP: USD1.62). Employees may participate in more than one plan, but only up to a plan maximum of USD312.50 per month across all plans.

Gartmore plans

The Gartmore plans are schemes that allow employees to receive shares in the Company for £nil consideration at a future point, usually after three years. The awards were made by Gartmore, prior to the Group's acquisition, typically for staff retention purposes. On vesting, in order to obtain the shares, the employee must still be in employment and must satisfy any employee tax and social security obligations. These awards are now governed by the rules covering the Group's DEP and RSP awards.

10.2 Share-based payments through the Consolidated Income Statement

The total amount settled through the Consolidated Statement of Changes in Equity is analysed between:

All amounts above exclude Group related employment taxes which are also recognised in the Consolidated Income Statement.

10.3 Share options outstanding - SAYE

Share options outstanding under the Group's SAYE are as follows:

The weighted average share price on the date options were exercised during 2012 was £1.00 (2011: £1.42). There were 29,869 options exercisable at 31 December 2012 (2011: 162,076). The weighted average fair value of options granted during 2012 was £0.24 (2011: £0.42). At 31 December 2012, the expected weighted average time remaining until the vesting of outstanding awards was two years (2011: 10 months).

10.4 Share options outstanding - CSOP

Share options outstanding under the Group's CSOP are as follows:

The weighted average share price on the date options were exercised during 2012 was £1.19 (2011: £1.64). There were 2,163,630 options exercisable at 31 December 2012 (2011: 539,376). The weighted average fair value of options granted during 2012 was £0.24 (2011: £0.29). At 31 December 2012, the expected weighted average time remaining until the vesting of outstanding awards was one year (2011: eight months).

10.5 Jointly owned shares outstanding - ExSOP

Jointly owned shares outstanding under the Group's ExSOP are as follows:

There were no options exercised in 2012 and therefore the weighted average share price on options exercised during 2012 was £nil (2011: £1.59). There were no jointly owned shares exercisable at 31 December 2012 (2011: nil). The fair value of the jointly owned shares granted during 2012 was £0.22 (2011: £0.23). At 31 December 2012, the expected weighted average time remaining until the vesting of outstanding awards was one year and six months (2011: one year and 10 months).

10.6 Fair values of share-based compensation plans

The fair value amounts for the options and jointly owned shares granted under the SAYE, CSOP and ExSOP were determined using the Black Scholes option-pricing method, using the following assumptions:

Expected volatility has been calculated based on the historical volatility for the Company's shares over three years.

Other share schemes involve the grant of shares for £nil consideration. The fair value of these grants is calculated using the share price at grant date, which is set out in the following table. No adjustments have been made for dividends.

The fair value calculation for the LTIP includes a statistical assessment of the likelihood of the Company achieving performance targets as set out in the plan.

11. Dividends paid and proposed

Company

The Board is recommending a final dividend for 2H12 of 5.05 pence per share which, when added to the interim 1H12 dividend of 2.10 pence per share, results in a total dividend for 2012 of 7.15 pence per share.

The final dividend proposed in respect of 2H12 of £56.3m is based on the total number of ordinary shares in issue at 31 December 2012.

There is a £1.1m decrease between the proposed dividends (2H11 final: £55.4m and 1H12 interim: £23.3m), as reported in the 2011 Annual Report and Accounts and the Interim Report and Accounts for the six months ended 30 June 2012, versus the dividends paid out during the year (2H11 final: £54.8m and 1H12 interim: £22.8m). This represents dividends waived by employee benefit trust trustees on shares held in trust on behalf of Group employees. The amount waived in respect of the final dividend declared in respect of 2H12 will be established by the employee benefit trust trustees on 10 May 2013, being the dividend record date.

12. Segmental information

Group

Operating income and net assets

Henderson is an investment manager, operating throughout Europe and with operations in North America and Asia. The Group manages a broad range of actively managed investment products for institutional and retail investors, across multiple asset classes, including equities, fixed income, property and private equity. Management operates across product lines, distribution channels and geographic regions. All investment product types are sold in most, if not all, of these regions and are managed in various locations.

Information is reported to the chief operating decision-maker, the Board, on an aggregated basis. Strategic and financial management decisions are determined centrally by the Board and, on this basis, the Group is a single segment investment management business.

Entity-wide disclosures

Geographic information

The geographical revenue information is split according to the country in which the revenue is generated, not necessarily where the client is based.

The Group does not have a single client which accounts for more than 10% of revenues.

Non-current assets for this purpose consist of intangible assets, investments accounted for using the equity method, plant and equipment, non-current trade and other receivables and deferred acquisition and commission costs.

13. Intangible assets

Group

Intangible assets are analysed as follows:

2012