T Clarke : Final Results

TClarke plc - Results for the year ended 31 December 2016

Underlying profit is profit from continuing operations adjusted for amortisation of intangible assets and non-recurring costs (see note 4 to the financial statements)

Prior year re-presented to reclassify certain immaterial cost of sales and underlying administrative expenses totalling £0.5m as non-recurring costs to aid comparison with the current year

Underlying earnings is calculated by dividing underlying profit after tax by the weighted average number of shares in issue

New project wins since our last announcement include;

· Additional works at 22 Bishopsgate, London - Mechanical fit out over 51 Floors

· 48,000 Sq Ft Office fit out for Cleary Gottlieb Steen & Hamilton LLP, London Wall Place

· Garden Heart, new 3 story office development for the Covent Garden Market Authority at New Covent Garden Market

· The International Quarter, London, Stratford, Building S5 fit out floors 16-19

· New Data Centre for Interxion, London - 3 new data halls

· Royal National Orthopaedic Hospital, Stanmore, New Inpatient Ward

· Redevelopment of St Joseph's College as part of the Dumfries Learning Town Project

· Southbank Place, London, two commercial office blocks totalling 530,000 Sq Ft

Mark Lawrence, Chief Executive commented:

'We are delighted with the results that we are presenting today. Our business is clearly making good progress.

Our focus on improving performance and margins throughout the Group continues to show through. Equally pleasing is that we have been awarded further contract wins which means that our forward order book as at the end of February 2017 now stands at £350m, a new record for TClarke.

In addition, to support ourprefabrication capabilities we will shortly be opening a brand new 26,000 Sq Ft facility at Stansted, Essex. The move will provide enhanced facilities for our people, while achieving improved quality and efficiency plus considerably extended capabilities in our prefabrication and manufacturing activities.

The outlook for the future remains positive.'

-ends-

Date: 28 March 2017

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Chairman's statement

2016 has been a year of strong performance across the Group.

The strategic initiatives and programmes implemented over the recent years of difficult market conditions are now delivering value and encouragingly these results are ahead of market expectations.

The business is emerging as an effective and cohesive nationwide team, strongly placed to focus on, and meet, client needs and to address the growing opportunities and continuing challenges of our market place.

The growth of our current and forward order book, combined with the quality of the significant and high visibility current and future projects, demonstrates the justified confidence of our clients and the market in general, in our performance, strength, strategic positioning, quality and ability to deliver.

Headline numbers ahead of market expectation

I am pleased to report that turnover increased by 15% in 2016 to £278.6m, with growth in all geographic regions and a significant number of large project wins for the Group.

More importantly, underlying profit before tax increased by 48% to £6.2m. Furthermore, the underlying operating margin showed an 18% year on year increase to 2.5% in 2016 and underlying EPS increased by 42% to 11.60p (2015: 8.16p). These are very pleasing and creditable achievements given the current market conditions, and are a testament to the leadership of our executive and delivery teams across the Group - both on our construction sites and in our offices.

Over previous years, we have steadily reported on a programme of strategic changes and initiatives, organically funded and internally designed and implemented, to reshape and refocus the business so that we are better aligned to focus on creating, delivering and growing value. These changes, initiatives and investments are now beginning to deliver financial returns, as demonstrated by our improved margins, which other industry peers are aspiring to.

Growth matched by cost discipline and cash management

At the same time as winning and delivering the right kind of projects and growing our turnover, forward order book and activity levels, we have also concentrated on cost discipline and cash management. Mindful of the competitive nature of our markets, our 2016 results and performance have benefited from our strong disciplines in the internal management and delivery of projects, which resulted in effective cost and cash management.

Net underlying overhead for 2016 decreased to 9.2% of revenue, compared with 9.5% in 2015 and 10.1% in 2014. The net cash balance was up 39% at £9.3m at the end of 2016, compared with £6.7m in 2015 and £5.3m in 2014. Encouragingly there has been considerable year on year improvement in our average cash balances throughout the year. During 2016 we were able to renew and increase our long term banking facilities from £13m to £15m, provided at reduced cost to the business.

My fellow Non-Executive Directors and I have undertaken a programme of regular visits throughout the year to our offices and project sites across all our regions, meeting and listening to our people and teams. These visits play an essential role for us to better understand the business and appreciate the complex nature of the work our people undertake and succeed at, and enable us to see, in practice, the ideas and initiatives which are being designed and delivered in the field. We have seen at first hand the strength of our project management teams across the country, which is something that we, as Non-Executive and Executive Directors recognise and appreciate and value highly

Dividend

The Board is pleased to propose a final dividend for the year ended 31st December 2016 of 2.7p pence per share, reflecting the Group's performance and our confidence in the business going forward, whilst balancing the rewards to shareholders with the interests of other stakeholders.

The Board remains committed to improving returns to shareholders and delivering a sustainable increase in dividend over the longer term is an important objective.

One disappointment

I am very disappointed we had to report the discovery during the year of a significant fraud at one of our subsidiary companies. The management response on discovery of the fraud was swift, decisive and appropriate. An independent and comprehensive review of our internal controls and procedures was commissioned immediately. As a result of the review, a number of recommendations were made which will further strengthen our controls and are in the process of being implemented. The Board is satisfied that the fraud was limited to the subsidiary company in question and that the full extent of the fraud has been identified. Legal proceedings are ongoing.

Outlook

2016 was an exceptionally good year, both in terms of underlying trading performance and our cash position at year end, driven by the timing of major project completions and stage payments received in the second half of the year. Our order book for the year has been replenished, with the performance of London being particularly strong. We have increased the focus on certain regions in order to bring them in line with internal targets yet, overall, our order book is at a record high.

Whilst we are focused on delivering sustained margin improvement over the long term, at this early stage of the current year we cannot ignore inflationary pressures which may hold back further margin improvement in 2017. Nevertheless, the Board is confident that the Group is well placed to meet market expectations for the year ahead.

Iain McCusker

Chairman

28th March 2017

Chief Executive Officer's Review

Our people have put in an excellent performance in 2016.

The big story behind the record turnover is the quality of the jobs delivered and the order book that has been replenished so strongly this year.

We have seen a series of major projects be awarded to the Group across all our regions, signalling our valuable reputation, our capabilities and our ability to deliver.

TClarke is positioned for further confident and controlled growth with a clear and shared sense of value and how to create it.

Our business infrastructure is solid

The Group is shaped correctly and resourced nationwide for an agile response to market opportunities. Our people are clear about our strategies and their roles in achieving them. We have set parameters for evaluating opportunities and targeting those that suit our skills and our growth journey. There is always more to do, but when you add this to TClarke's exceptional culture of delivery and operational control, together with the strong sense of values, tradition and pride that is ingrained within 'The TClarke Way', we have a strong base to build on going forward.

Major projects won and delivered in our core London M&E business

It has been a particularly strong year for our London business. Our vision to grow from a famous electrical contractor into a true M&E contractor, known equally for both, has been realised. Delivery of major mechanical and M&E projects and the win of two towers at the enormous Southbank Tower project showed that we are a major player in the M&E market. This transforms the scale of our potential markets going forward - effectively more than doubling them. Our success in securing the even larger 22 Bishopsgate project will be equally transformative, providing us with a platform to lead in integrated building services, with major technology advances that have potentially vast market applications.

Major projects won and delivered across our regions

Success in London has been matched across our regions. Our vision for our nationwide offices has been to make a decisive shift from siloed local teams, delivering high quality small scale projects, to a series of regional operations targeting large scale, higher value projects, collaborating to maximise the value of their resources and building the TClarke brand. In 2016, TClarke's regional teams won a very wide range of large scale projects; more than at any time in our history. We have built new strategic partnerships, expanded existing relationships, entered new sectors, expanded into new areas and combined our operations in new ways.

Innovation and investment in the career paths of our people

We launched the TClarke Academy in 2016, as a comprehensive internal training operation aimed at providing a clear route to the top of the organization, giving everyone, whether they be in an engineering, technical or support discipline, career advancement opportunities. At TClarke it is expected for an apprentice to aim for the top. I was an apprentice here and so were most of my senior executive team, so our Training Academy is something that we, as leaders, believe in and are personally committed to driving - and indeed we deliver modules ourselves. In a year when we again took on a far larger number of apprentices than the industry average, the Group retained a far higher percentage of staff than the industry average and built our resource of directly employed people with quality people - the Academy is a further mark of our intent to keep offering the best M&E resource in the UK.

Safety remains our paramount concern

We take enormous pride in every site safety award won by our people and, in 2016, we won more than ever before. The total number of those awards is not significant but the culture that earned them is. I am personally proud of the work our safety establishment carries out to further embed that culture and to keep driving standards forward. We can never rest or become complacent regarding health and safety - we need to keep investing in this area as safety is paramount to our business.

Mark Lawrence

Chief Executive Officer

28th March 2017

Financial review

Accounting policies and segmental reporting

The Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. There have been no significant changes to accounting policies during the year ended 31st December 2016.

Underlying Group performance

Overview

Revenue from continuing operations increased by 14.9% to £278.6m (2015: £242.4m), and underlying operating profit increased by £1.8m to £6.9m (2015: £5.1m). Underlying operating profit, which excludes amortisation and non-recurring items, is the measure used to assess performance against targets and determine performance related remuneration. All regions delivered increased revenue, whilst London & South East and Scotland showed significant increases in margins. Net underlying overheads as a percentage of revenue fell to 9.2%. Our order book grew by 10% to £330m (2015: £300m).

London & South East

Revenue from our London & South East operations increased by 10.7% to £142.9m (2015: £129.1m), generating an underlying profit of £3.5m (2015: £2.0m). Underlying operating margin increased to 2.4% (2015: 1.5%). We have secured a number of significant new orders across a wide spectrum of work for 2017 and beyond, including mechanical and IT as well as electrical services, with our clients continuing to value our teams of in-house engineers and tradesmen.

Central & South West

Revenue from our Central & South West operations increased by 19.3% to £67.9m (2015: £56.9m) and underlying operating profit improved to £1.0m (2015: £0.9m), with underlying operating margins down slightly at 1.5% (2015: 1.6%). The region continues to benefit from strong client relationships and repeat business. The expansion of our healthcare business and our burgeoning reputation in the South West have presented a number of growth opportunities which should lead to improved profitability going forward.

North

In the North revenue increased by 28.2% to £53.6m (2015: £41.8m), with the region continuing to benefit from strong client relationships and repeat business. Underlying operating profit was £1.8m (2015: £1.9m). The underlying operating margin was 3.4% (2015: 4.5%), as we invested in our core mechanical and electrical contracting capabilities in the North West and the improved coordination and consistency of our offering across the region under a common managing director.

Scotland

Scotland's revenue increased by 29.6% to £21.0m (2015: £16.2m), and underlying operating profit was £0.6m (2015: £0.3m), representing an underlying operating margin of 2.9% (2015: 1.9%). Scotland's strong performance continued its recovery evident in the second half of 2015. As well as its continuing strength in the residential market, Scotland has generated significant IT, mechanical and electrical work streams in the commercial sector.

Exceptional and non-underlying items

Exceptional and non-underlying items comprise £0.2m (2015: £0.2m) amortisation of intangible assets, and £2.3m (2015: £0.5m) non-recurring costs relating to the misappropriation of funds uncovered towards the end of 2016. The total cost of the fraud, including investigation costs, is £3.3m, £1.0m of which had already been expensed in prior years. Results prior to and including 2015 have not been restated as the impact cumulatively and in each year was not material, however, the 2015 income statement has been re-presented to include £0.5m costs relating to the fraud as a non-recurring item in order to aid comparison with the current year. The cost in 2016 includes £0.4m fees incurred in investigating the fraud and pursuing civil and criminal remedies.

Finance costs

Net finance costs were £0.7m (2015: £0.9m), including a £0.6m (2015: £0.6m) non-cash finance charge in respect of the pension scheme. Net interest on bank loans and overdrafts fell to £0.2m (2015: £0.3m), reflecting improved cash performance throughout the year.

Taxation

As a wholly UK based group, our tax charge is dependent on UK corporation tax rates. For 2016, the tax charge was impacted by the fall in prospective tax rates on deferred tax assets and non-deductible expenses, which saw the effective tax rate increase to 23.5% (2015: 20.1%).

Discontinued operations

Following the decision to discontinue our Bristol and Cardiff operations in 2015, the Group has incurred further losses of £0.5m after tax (2015: £2.7m) closing out its contractual commitments in respect of these offices.

Earnings per share

Basic earnings per share after discontinued operations increased to 5.45p (2015: 0.13p), with basic earnings per share from continuing operations increasing to 6.74p (2015: 6.66p).

Basic underlying earnings per share after adjusting for amortisation of intangible assets and non recurring costs and the tax effect of these items, was 11.60p (2015: 8.16p).

Dividends

The Board is proposing a final dividend of 2.70p (2015: 2.60p), with the total dividend for the year increasing by 3.2% to 3.20p (2015: 3.10p). The dividend is covered 3.6 times by underlying earnings.

The final dividend will be paid, subject to shareholder approval, on 12th May 2017 to those shareholders on the register at 18th April 2017. The dividend will go ex-dividend on 13th April 2017. A dividend reinvestment plan (DRIP) is available to shareholders.

Pension obligations

The triennial valuation of the pension scheme at 31st December 2015 showed a deficit of £14.9m, representing a funding level of 67% (2012 valuation: deficit £11.5m, funding level 68%).

The Group has been pursuing an agreed deficit reduction plan over a number of years, however market factors have meant that the deficit has not been reduced as intended and the cost of funding current pension commitments has increased. Following provisional agreement of the draft 2015 valuation, the Group has proposed a revised deficit reduction plan which includes making additional contributions and continuing to provide security to the pension scheme in the form of a charge over property assets up to a combined market value of £3.1m. From 1st January 2017 the future service contribution will increase to 21.4% of pensionable payroll (including employee contributions) and the deficit reduction contribution has been set at £1.0m for the year ending 31st December 2017, £1.25m for the year ending 31st December 2018 and £1.5m per annum thereafter.

The Group has proposed an increase in employee contributions from 8% to 10% of pensionable salary and is consulting with employees on this proposal. The scheme is closed to new members and the Group continues to meet its ongoing obligations to the scheme.

In accordance with IAS 19 'Employee Benefits', an actuarial expense of £6.3m, net of tax, has been recognised in reserves, with the pension scheme deficit increasing by £7.2m to £20.6m (2015: £13.4m). The increase in the deficit is primarily due to a fall in the discount rate applied to scheme liabilities, which arose due to the significant fall in bond yields during 2016, offset by changes in mortality assumptions.

Cash flow and funding

The Group's net cash balances improved to £9.3m at 31 December 2016 (2015: £6.7m) after deducting the £3.0m (2015: £5.0m) outstanding under the revolving credit facility. This reflects the improved underlying performance of the Group and improved management of working capital.

During the year the Group renegotiated its banking facilities and now has in place a £10.0m revolving credit facility, which is committed until 31st March 2020 and a £5.0m overdraft facility, renewable annually. Interest on overdrawn balances is charged at 2.25% above base rate, and interest on balances drawn down under the revolving credit facility is charged at 2.25% above LIBOR, fixed for the duration of each drawdown (typically three to six months). The Group was compliant with the terms of the facilities throughout the year ended 31st December 2016 and the Board's detailed projections demonstrate that the Group will continue to meet its obligations in the future. The Group also has in place £20m of bonding facilities, of which £11.1m were unused at 31st December 2016.

Net assets and capital structure

The Group is funded by equity capital, retained reserves and bank loans, and there are no plans to change this structure. In spite of the strong underlying performance, shareholders' equity decreased by £5.5m during the year to £14.1m (2015: £19.6m) due to the increase in the pension deficit (reported through other comprehensive income) and the misappropriation of funds referred to above.

At £22.8m (2015: £23.0m), goodwill and intangible assets arising on previous acquisitions represent a significant proportion of the Group's total assets of £112.1m (2015: £109.4m). The Board has undertaken a rigorous impairment review in respect of the intangible assets at 31st December 2016 and concluded that no impairment is necessary.

Group reorganisation

During the year the Group implemented the first phase of a group reorganisation, which saw all the Group's operating activities in London & the South East and Central & South West divisions come together into a single statutory entity, TClarke Contracting Limited, with a separate statutory entity, TClarke Services Limited providing engineering and support services to the enlarged operating company. TClarke Services Limited also became the principal employer of the Group's defined benefit pension scheme and in accordance with the Group's accounting policies the defined benefit pension obligation was transferred to that company. Phase 2 of the Group reorganisation, which will see our operations in the North and Scotland merged into TClarke Contracting Limited, will be implemented during 2017. This reorganisation represents the culmination of a process of rationalisation and increased consistency of organisation and delivery that has been ongoing for a number of years.

Financial risk management

The Group's main financial assets are contract and other trade receivables and cash and bank balances. These assets represent the Group's main exposure to credit risk, which is the risk that a counterparty will fail to discharge its obligations, resulting in financial loss to the Group. The Group may also be exposed to financial and reputational risk through the failure of a subcontractor or supplier. The financial strength of counterparties is considered prior to signing contracts and reviewed as contracts progress where there are indications that a counterparty may be experiencing financial difficulty. Procedures include the use of credit agencies to check the creditworthiness of existing and new clients and the use of approved suppliers' lists and group-wide framework agreements with key suppliers.

Martin Walton

Finance Director

28th March 2017

Consolidated income statement

for the year ended 31 December 2016

* Re-presented to classify certain immaterial cost of sales and underlying administrative expenses totalling £0.5m as non-recurring administrative expenses. Further details are given in note 4.

Consolidated statement of financial position

as at 31 December 2016

Consolidated statement of cash flows

for the year ended 31 December 2016

Consolidated statement of changes in equity

for the year ended 31 December 2016

Notes to the preliminary financial statements

Note 1 - Basis of preparation

TClarke plc (the 'Company') is a company listed on the London Stock Exchange and domiciled in the United Kingdom. The consolidated preliminary financial statements (the 'financial information') comprise the financial statements of the Company and its subsidiaries (together the 'Group') and are prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union, IFRS IC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS and have been prepared on a going concern basis under the historic cost convention as modified by the revaluation of land and buildings.

The financial information does not constitute the Company's statutory accounts for the year ended 31 December 2016 or 2015 but is derived from the audited financial statements for the year ended 31 December 2016. Statutory accounts for the year ended 31 December 2015 have been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 2016 will be delivered to the Registrar of Companies in due course and will be available on the Company's website atwww.tclarke.co.uk. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for the year ended 31 December 2015 or for the year ended 31 December 2016.

The following standards, interpretations and amended standards have been applied for the first time for the financial year beginning 1st January 2016.

Annual Improvements 2012-2014 Cycle: Amendments to various standards and interpretations under the Annual Improvements 2012-2014 Cycle are applicable for the first time for the year ending 31st December 2016, but none of these amendments has had a significant effect on the financial statements.

Note 2 - Significant judgements and sources of estimation uncertainty

In the application of the Group's accounting policies the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the period that may not be readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions that have the most significant impact are set out below.

Revenue and margin

The recognition of revenue and profit on construction contracts is a key source of estimation uncertainty due to the difficulty of forecasting the final costs to be incurred on a contract in progress and the process whereby applications are made during the course of the contract with variations, which can be significant, often being agreed as part of the final account negotiation. The directors also take into account the recoverability of contract balances and trade receivables and allowances are made for those balances which are considered to be impaired.

Non-underlying items

Non-underlying items are items of financial performance which the Group believes should be separately identified on the face of the income statement to assist in understanding the underlying financial performance achieved by the Group. The quantification, disclosure and presentation in the financial statements of non-underlying items requires judgement.

Discontinued operations

The judgement as to whether an activity that has ceased constitutes a discontinued operation requires an assessment of whether it forms a separate component of the Group's business and represents a separate major line of business or geographical area of operations that has been disposed of, has been abandoned or that meets criteria to be classified as held for sale.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating unit giving rise to the goodwill, including the estimation of the timing and amount of future cash flows generated by the cash generating unit and a suitable discount rate.

Retirement benefit obligations

The costs, assets and liabilities of the defined benefit scheme operated by the Group are determined using methods relying on actuarial estimates and assumptions, which are largely dependent on factors outside the control of the Group. Details of the key assumptions are set out in Note 9, and include the discount rate, expected return on assets, rate of inflation and mortality rates. The Group takes advice from independent actuaries relating to the appropriateness of the assumptions. Changes in the assumptions used may have a significant effect on the income statement, statement of comprehensive income and the statement of financial position.

Note 3 - Segmental information

The Group provides electrical and mechanical contracting and related services to the construction industry and end users.

For management and internal reporting purposes the Group is organised geographically into four regional divisions; London and South East, Central and South West, North, and Scotland, reporting to the Chief Executive Officer, who is the chief operating decision maker.

The measurement basis used to assess the performance of the divisions is underlying profit from operations, stated before amortisation of intangible assets and non-recurring items. All assets and liabilities of the Group have been allocated to segments apart from the retirement benefit obligation and tax assets and liabilities.

All transactions between segments are undertaken on normal commercial terms. All the Group's operations are carried out within the United Kingdom, and there is no significant difference between revenue based on the location of assets and revenue based on location of customers.

Segment information about the Group's continuing operations is presented below:

Note 4 - Non-recurring costs

During the year ended 31st December 2016 the Group uncovered financial irregularities within the accounting function of a wholly owned subsidiary, DG Robson Mechanical Services Limited ('DGR'). £2.9m of cash was misappropriated over a number of years, of which £1.9m has been expensed in 2016 and £1.0m had been charged to the income statement in previous years within cost of sales and administrative expenses. The 2016 expense has been separately disclosed as a non-recurring item. Results prior to and including 2015 have not been restated as the impact cumulatively and in each year was not considered to be material, however, the 2015 results have been re-presented to show funds misappropriated in that year as non-recurring, in order to aid the comparison of underlying performance.

The Group engaged expert professional advisers to assist in the investigation and recovery of the stolen funds. The cost of the investigation to 31 December 2016 is £0.4m.

Note 5 - Taxation

Note 6 - Discontinued operations

On 19 November 2015 the Group announced its intention to discontinue its operations in the Cardiff and Bristol areas. The Group's activities in these areas ceased and the closure of the Cardiff and Bristol offices was successfully completed by 31st December 2015, with the remaining employees and any outstanding contractual commitments transferring to our expanded TClarke South West operation. The Group incurred further losses closing out these contractual commitments during 2016, and as at 31 December 2016 these have been completed.

Note 7 - Earnings / (loss) per share

A. Basic earnings / (loss) per share

Basic (loss) / earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.

B. Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has three categories of dilutive potential ordinary shares: share options granted under the Savings Related Share Option Scheme and conditional share awards and options granted under the Equity Incentive Plan.

For the share options, a calculation is made to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

C. Underlying earnings per share

Underlying earnings per share represents profit for the year from continuing operations adjusted for amortisation of intangible assets and non-recurring items and the tax effect of these items, divided by the weighted average number of shares in issue. Underlying earnings is the basis on which the performance of the operating divisions of the business is measured.

Note 8 - Dividends

The directors are proposing a final dividend of 2.70 p (2015: 2.60 p) per ordinary share totalling £1.1m (2015: £1.1m). Subject to approval at the annual general meeting, the final dividend will be paid on 12 May 2017 to shareholders on the register as at 18 April 2017. The shares will go ex-dividend on 13 April 2017. This dividend has not been accrued at the balance sheet date. A dividend reinvestment plan is available to shareholders. Those shareholders who have not elected to participate in the plan, and who would like to do so in respect of the 2016 final payment, may do so by contacting Capita Asset Services on 0871 664 0300 (Lines are open 8:30am - 5:30pm Mon-Fri. Calls cost 10p a minute plus network charges). The last day for election for the final dividend reinvestment is 18 April 2017 and any requests should be made in good time ahead of that date.

Note 9 - Pension commitments

The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method. The amount included in the consolidated statement of financial position arising from the Group's obligations in respect of its defined benefit retirement scheme is as follows:

Note 10 - Notes to the statement of cash flows

b. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments that are readily convertible into cash, less bank overdrafts, and are analysed as follows:

Note 11 - Related party transactions

The remuneration of the directors of the Company was £1.8m (2015: £1.7m), including pension contributions of £0.1m (2015: £0.2m) and termination benefits of £0.1m (2015: £nil).

The remuneration of key management (including directors of subsidiary companies) was £3.6m (2015: £3.6m), including termination benefits of £0.1m (2015: £0.2m). Post-employment benefits in respect of key management (including subsidiary directors) were £0.4m (2015: £0.5m).

Transactions between the Company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There were no other related party transactions requiring disclosure in the financial statements.

Note 12 - Annual General Meeting

The 105 Annual General Meeting will be held at 200 Aldersgate, St Paul's, London EC1A 4HD on Friday 5 May 2017 at 10.00 am.