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Quintain Estates & Development PLC Annual Report 2015 BRINGING LONDON PROPERTY AND PLACES TO LIFE

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Quintain Estates & Development PLC Annual Report 2015

BRINGING LONDON PROPERTY AND PLACES TO LIFE

Quintain Estates &

Developm

ent PLC A

nnual Report 2015

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OPERATIONAL HIGHLIGHTS

Development£95m of private residential sales at Wembley ParkDevelopment pipeline of c. 1,200 homes definedExpanded masterplan in consultation for Wembley Park

Investment£9.3m net rental income from Wembley Park (2014: £4.3m)£4.1m net rental income from London Portfolio (2014: £0.1m)Seeding of new Residential Investment business

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Quintain Estates & Development PLC Annual Report 2015

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FOR UP TO DATE DETAILS ON QUINTAIN VISIT, QUINTAIN.CO.UK

FINANCIAL HIGHLIGHTSEarnings

March 2015 £m

March 2014 £m

Profit after tax 37.9 52.9Adjusted profit before tax1 6.2 4.2EPRA diluted EPS 1.0p 1.1p

Balance sheet March 2015 March 2014

Net debt £200.8m £208.9mGearing 32% 35%Look-through LTV 27% 38%

Net Asset Value per share Pence Pence

Basic 122 115Diluted 121 114EPRA diluted 122 1141 Adjusted profit excludes disposals, valuation and mark to market adjustments but includes

discontinued operations.

CONTENTSStrategic report

02 WHAT WE DO AND OUR STRATEGY 03 BUSINESS MODEL 04 BRINGING WEMBLEY PARK TO LIFE 12 PORTFOLIO OVERVIEW 14 CHAIRMAN’S STATEMENT 16 CHIEF EXECUTIVE’S REPORT 18 BUSINESS REVIEW 18 INVESTMENT ASSETS 22 DEVELOPMENT ASSETS 28 RESIDENTIAL INVESTMENT PORTFOLIO 30 FINANCE REVIEW 36 RESPONSIBILITY REPORT 44 RISK MANAGEMENT 47 MAJOR INVESTMENT PROPERTIES

Governance

48 BOARD OF DIRECTORS 50 BOARD GOVERNANCE REPORT 54 NOMINATION COMMITTEE REPORT 55 DIRECTORS’ REMUNERATION REPORT 70 AUDIT COMMITTEE REPORT 73 DIRECTORS’ REPORT 75 VERIFICATION STATEMENT – REASONABLE

ASSURANCE 77 VALUATION OF CERTAIN PROPERTY

INTERESTS AT WEMBLEY, SILVERTOWN AND REDHILL

78 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

Financial statements

79 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUINTAIN ESTATES & DEVELOPMENT PLC ONLY

82 CONSOLIDATED INCOME STATEMENT 83 CONSOLIDATED STATEMENT OF OTHER

COMPREHENSIVE INCOME 84 CONSOLIDATED BALANCE SHEET 85 CONSOLIDATED STATEMENT OF CHANGES

IN EQUITY 86 CONSOLIDATED CASHFLOW STATEMENT 87 NOTES TO THE ACCOUNTS 134 FINANCIAL SUMMARY 135 FORWARD-LOOKING STATEMENTS

Further information

136 GLOSSARY 138 SHAREHOLDER INFORMATION AND

CORPORATE DETAILS

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Strategic report

WHAT WE DOQuintain develops and invests in London property to create recurring returns for our shareholders and great places where Londoners thrive. From individual buildings through to entire districts, we transform unappreciated spaces into environments that attract the people and investment that will secure their future, creating new chapters for overlooked corners of the Capital.

OUR STRATEGYQuintain is a London property specialist that adjusts the balance of its development and investment activities as the cycle evolves, seeking to deliver significant shareholder value and outperformance through our relative scale, portfolio and team.

READ MORE ON HOW WE ARE DELIVERING THE STRATEGY ON PAGES 10 AND 11

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Strategic report

BUSINESS MODELHow we generate and preserve value.

Skills: Design – Planning – Finance – Placemaking – Development – Marketing – Management – Disposal

LAND/ PROPERTIES

COMMERCIAL INVESTMENT PORTFOLIOIncome yield + capital growth

8%

RESIDENTIAL INVESTMENT PORTFOLIO

Net yield + house price inflation

7-8%

RESIDENTIAL SALES

Development surpluses

15-20%

RECYCLE CAPITAL SHAREHOLDER RETURNS

We apply the extensive experience of our high calibre team to identifying opportunities to transform unappreciated property and places in London into highly-attractive assets and locations. Our integrated skill set is scalable, equally adept at creating social and economic value from entire mixed-use districts as from individual commercial or residential assets.

Strict rules on capital allocation and risk management, the maintenance of sensible financial criteria and control over the balance of our investment and development activities, enable us to adjust our focus and ensure the business is sustainable through the real estate cycle. See how we have transformed Wembley Park into a great place to visit and to live on pages 4 to 11.

Target Returns

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Strategic report

BRINGING WEMBLEY PARK TO LIFESince 2004, Quintain has been working on one of London’s largest regeneration schemes, Wembley Park, transforming long-neglected space around Wembley Stadium into a vibrant and self-sustaining new district of London.

2004 Outline planning consent grantedOutline consent was secured for a transformational 5m sq ft mixed-use development with the vision of making Wembley Park a great place to be once again. Work began on site in 2005.

2006 The SSE Arena, Wembley re-opens (formerly Wembley Arena) Created in 1934 as the Empire Pool, we undertook a substantial renovation of the listed Arena, preserving the original pool beneath the auditorium, introducing state-of-the-art acoustic treatments to transform the sound quality of events and rotating the building to face the new Stadium so the two venues could ‘connect’ at the heart of Wembley Park.

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2006 Arena Square opensThe first major piece of public realm to be completed, Arena Square was designed to create a natural link between the new Stadium and historic Arena. Fountains, music and lighting displays are incorporated in the infrastructure, proving particularly popular in the summer time with families and before major events.

2008 First residents move inThe first 286 apartments were opened within Forum House, bringing a new style of living to the area. Arranged around a green courtyard, every apartment has a balcony and residents are supported by a concierge in reception.

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BRINGING WEMBLEY PARK TO LIFE CONTINUED

2010 Quadrant Court openedLocated next to Forum House, 232 apartments were opened within Quadrant Court. Again, the residents’ garden at the centre was complemented by private external space for every household.

2012 APT Student Accommodation openedThis 660-bedroom student accommodation development was introduced as an early piece of animation to the site. The London student market continues to flourish and students increase economic and social activity in the areas they are located, bringing financial benefits to the local community.

2013 London Designer Outlet (LDO) openedWith 70 great shops, restaurants and coffee shops, LDO has brought the concept of outlet shopping to London for the first time. The centre, which also includes a nine-screen cinema, attracted 5m visitors in its first year of trading and brought 1,000 new jobs to Wembley Park.

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2012 Hilton London Wembley hotel openedWe opened the first 4-star hotel within five miles of the Stadium in time for the London Olympics, accommodating athletes competing at the adjacent Stadium and Arena and bringing large-scale conferencing and banqueting facilities back to the area. 150 new jobs were created.

2012 Wembley Park Boulevard and Wembley LawnsCreating beautiful, inclusive places where people want to spend time is an important feature of our work at Wembley Park and five acres of green space has been created to date. The Boulevard is pedestrianised, lined with landscaped lawns that offer visitors and residents an informal place to socialise at the foot of the iconic Stadium.

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BRINGING WEMBLEY PARK TO LIFE CONTINUED

2014 Playpark createdThe creation of this free, all-weather playpark at the heart of Wembley Park has been one of the most obvious transformational actions taken to date. On current projections, the playpark will attract over 120,000 children a year, due to a combination of engaging design and the siting of parent-friendly coffee shops offering sun-drenched terraces just a few feet away.

2014 Event space launchedBuilding on Wembley Park’s history as a destination for performance, we opened the event pad during 2014 as a base for community-focused events. 24,000 people visited the temporary ice rink over the winter period and deck chairs in front of live screenings of the Wimbledon tournament were popular during the summer.

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2013 Brent Civic Centre opened2,000 employees re-located to Wembley Park with the Council’s opening of their award-winning Civic Centre in 2013. The building, designed to be the greenest public building in the UK, further augments the local conferencing facilities with an auditorium, amphitheatre, meeting rooms and Winter Gardens, as well as wedding gardens for civil ceremonies, a major library, civic facilities and local retail needs.

2014 Market Square created and Olympic Way revitalised7,000 shrubs and 1.2 km of hedging were planted across Wembley Park during 2014, many of them at Market Square and along the famous processional route, Olympic Way, which leads from Wembley Park station to the Stadium.

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BRINGING WEMBLEY PARK TO LIFE CONTINUED

2016 Emerald Gardens, North West Village475 more homes will open around an acre of private gardens during 2016. Alongside the affordable and private homes, the development will contain 141 Professional Market Rental (PMR) homes that will be retained and managed by Quintain. See more on page 38.

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2016 Wembley TheatreA new theatre experience that will revolve the entire auditorium to face different stages as the action evolves is scheduled to open in Wembley Park in 2016. The theatre will be located at North West Village.

2017 Alto and new one-acre public green square planned for 2017Detailed planning consent for a development of 362 homes was secured in February 2015 along with a one acre space called Elvin Square Gardens.

And beyond… The Eastern LandsWe are now designing the eastern half of the site, which will feature a large expanse of green space, bringing the park back to Wembley Park. See more on pages 36 and 37.

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London Portfolio 11%

Wembley Park Investment Assets 33%

Non-core assets9%

Strategic report

PORTFOLIO OVERVIEWSince 2012 we have focused on creating a better balance between investment and development activity to ensure the business is sustainable through future real estate cycles. Our core investment assets now constitute 44% of the portfolio by value, with development land comprising 47%.

INVESTMENTWembley Park Investment AssetsAt Wembley Park, we have created a £272.9m portfolio of investment assets that delivered £9.3m of income for the Group during the year.

London Portfolio Investment AssetsLondon Portfolio now consists of £93.1m of assets with a net rent of £4.1m.

LONDON DESIGNER OUTLET ALDERMARY HOUSE

Over 5m people visited London’s first designer outlet centre at Wembley Park during 2014/15.

In May 2014, we acquired Aldermary House, a commercial building in an improving location with strong potential for value creation.

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Wembley Park Development Land 47%

DEVELOPMENTWembley Park Development LandOur development interests at Wembley Park offer exposure to the undersupplied London Mainstream housing market and constitute £395.7m of the portfolio.

EMERALD GARDENS EASTERN LANDS

By 31 March 2015, 251 apartments had been sold at Emerald Gardens at an average of £597 per sq ft. We are now designing a masterplan for the Eastern Lands.

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The business of successful Urban Regeneration takes time. At Wembley Park, much has been achieved since we started investing and developing 10 years ago: a thriving social and economic centre; a portfolio of high-quality investment assets that will progressively mature to deliver meaningful recurring income for the Group and new jobs for over 1,000 people, many of whom were recruited from the local area. The hard work of creating a sustainable heart and distinct identity for the wider development has been delivered, and yet the majority of the opportunity is still to come, amounting to 75% of the development potential and 90% of the homes for which we hold outline consent.

Centred on London and operating with an appropriate level of borrowings, we are focused on two objectives: to accelerate residential development at Wembley Park in order to unlock the full value within the site; and the creation of new sources of robust income that will underpin the future reinstatement of a sustainable dividend.

During the year, we increased the development programme of homes with detailed consent from 475 to 835 at Wembley Park and expect to expand our consented pipeline to 1,200 by the end of 2015/16. We are also finalising designs for the South West Lands where we expect to see a further 850 homes delivered. While this represents good progress, beyond these plans there remain 3,000 more homes to develop under our original outline consent, and work has now begun to design and configure the eastern half of the site where most will be located.

We target a mainstream price point where demand remains frustrated by constrained supply across London. However, absorption rates for a single location are inevitably finite and the opening of our new Professional Market Rental business at Wembley next spring is one way in which this will be managed. Seeded with 141 homes at Emerald Gardens, we intend to expand the portfolio at Wembley Park to 500 homes within five years. This new business exploits our existing skills, market expertise and land holdings. In addition to supporting the acceleration of value creation at Wembley Park, we also expect it to deliver a substantial recurring income for the Group.

Strategic report

CHAIRMAN’S STATEMENTThe business can now grow from a solid base and unlock the value of its assets in a sustainable way.

“During the year we increased the development programme at Wembley Park to 835 homes and expect to expand our consented pipeline to 1,200 by the end of 2015/16.

”WILLIAM RUCKERCHAIRMAN

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2011

10.6%

6.4%

Total return

Total return is the movement in net asset value per share adjusted for any dividends paid in the year as a percentage of the opening net asset value per share. No dividend was paidfor the year under review.

(5.9)%(4.5)%

(3.3)%

2012 2013 2014 2015 2011

35% 32%

Gearing

Gearing, as per our banking covenants, is defined as the ratio of net borrowings of the Company and its wholly-owned subsidiaries to equity shareholders’ funds adjusted for intangible assets, deferred tax and cumulative mark to market movements.

76%87%

60%

2012 2013 2014 2015

2011

£4.2m

£6.2m

Adjusted profit

£8.2m

£5.8m

£3.6m

2012 2013 2014 2015

Total profit before tax, including discontinued operations, adjusted to exclude capital, revaluation and mark to market movements, intangible asset amortisation and trading property provisions.

2011

115p122p

£0.0

Net asset value per share

104p110p116p

2012 2013 2014 2015

Shareholders’ funds divided by the number of shares in issue at the end of the financial year.

2014

CO2 emissions CO2e/£100,000 of revenue

10.93

16.72

2015

Total emissions per £100,000 of revenue is a measure of our carbon intensity in relation to output. It is the sum of our Scope 1 and 2 carbon dioxide equivalent emissions divided by our total revenue. The 2014 indicator has been re-stated according to our base year re-calculation policy.

Great place to work (“I enjoy my job”)

Disagree 7%

Agree 45%

Strongly agree

46%

98% of employees participated in the 2014 sta� survey. The key figure by which we measure the overall attractiveness of Quintain as an employer is responses to the question “I enjoy my job”.

Total shareholder return

23.4%

4.8%(8.3)%

60.4%

46.0%41.0%

One year Two year

Quintain Estates and Development PLC

FTSE All Share Real Estate Investment & Services

FTSE All Share Real Estate Investment Trusts

Net rental income

£21.6m(2014: £10.2m)

Average maturity of debt facilities

4.2 years(2014: 3.1 years)

Capital recycled

£121.7m(2014: £322m)

Residential sales average per square foot

£597psf(2014: £570psf)

80% of our portfolio is connected to Wembley Park. Beyond this, we are co-investors in and strategic advisers to WELPUT, the West End of London Property Unit Trust, and have cautiously expanded our nascent London Portfolio during the year. These are assets typically providing rental income with the potential for growth through active management and redevelopment. We will continue to invest in such opportunities to balance activity at our major Wembley Park asset.

Following the announcement in November that Richard Stearn would be leaving Quintain in April 2015, we announced that Simon Carter would become Finance Director on 26 May 2015. Richard made a substantial contribution to the creation of a stable platform from which Quintain can grow and we wish him every success in the future. Simon joins the business from British Land and his strategic acumen and extensive treasury experience

will be valuable as we seed new sources of income and unlock the potential within Wembley Park.

Over the last three years, we have progressively rebalanced the business to focus on London and today 91% of our assets benefit from the Capital’s strong fundamentals. This process has taken time and I would like to thank our shareholders for their support during the transition. The result is a business that can now grow from a solid base and unlock the value of its assets in a sustainable way.

WILLIAM RUCKERCHAIRMAN21 MAY 2015

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With a strong balance sheet now established, we are working towards a position whereby the business can be understood as three complementary activities: firstly, through careful acquisition and development, we are creating a high quality portfolio of investment assets that deliver strong and recurring cashflow whilst creating a sense of place and attracting footfall such as we have created at our largest asset, Wembley Park; secondly, we develop homes for sale that are enhanced by this placemaking, releasing the maximum inherent value in our sites and leading to meaningful development surpluses; and thirdly, we are in the final phase of establishing a new Professional Market Rental business (also known as Private Rental Sector, or PRS) to cater for the significant and growing demand for good quality, well managed, rental accommodation in London.

The development of these three complementary activities is designed to unlock the value in regeneration assets while delivering robust returns through the real estate cycle.

Strategic report

CHIEF EXECUTIVE’S REPORTThroughout 2014/15, the Quintain team focused on accelerating the pace of residential development at our major asset, Wembley Park, and creating new sources of income from investment assets that will support the business through future real estate cycles.

“The increase in net asset value reflects a 13.8% growth within our development portfolio and the growing income profile of our investment assets at Wembley Park.

”MAXWELL JAMESCHIEF EXECUTIVE

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ResultsThe increase in net asset value to £639.4m (2014: £595.4m) reflects a 13.8% growth within our development portfolio and the growing income profile of our investment assets at Wembley Park which delivered a 4.7% increase in valuation. This growth contributed to a net asset value per share of 122p (2014: 115p) for the 2014/15 financial year.

We are pleased to report that our focus on driving growth in our Wembley Park investment assets and acquiring income-producing property for the London Portfolio has more than compensated for the income foregone through the disposals programme and which materially de-geared the balance sheet. Rental income from London Designer Outlet, which opened in October 2013, and improved arrangements at The SSE Arena, were the principal drivers behind Wembley Park’s materially increased net rent of £9.3m (2014: £4.3m), while acquisitions to the new London Portfolio increased its contribution to £4.1m (2014: £0.1m).

FinanceThe re-financing of £260.0m of facilities during the year has equipped the Company with £375.0m of debt facilities (including the £115.0m corporate bond 2020 issued last year), with an average maturity of 4.2 years, at a headline margin for the bank facilities of 190 basis points.

In May 2014, we sold our 50% interest in the nationwide student accommodation joint venture, iQ, to our partner, Wellcome Trust, for £106.4m. This made a considerable contribution to the further reduction of our debt and enabled us to re-focus our balance sheet on the Capital, with capacity to invest.

As a result, and despite significant investment in accelerating development during the year, net debt at 31 March 2015 was £200.8m (2014: £208.9m) and balance sheet gearing remained low at 32%: well below our stated ceiling of 50%. The Group now has an appropriate financial structure to deliver value from development at Wembley Park, selective investment and development opportunities across London, and our new residential investment business.

Operational deliveryQuintain takes land and assets in London and transforms them into either institutional-grade investment assets or properties for rent or sale. Underpinning these activities is our ability to create a strong sense of identity in our places and properties, giving them a fresh position that increases their economic sustainability and can act as a catalyst for the improvement in the property and, after, of the surrounding area. Our integrated skill set is scalable, adept at operating with individual assets that deliver a single use-type through to large-scale, mixed-use re-development.

Intelligent use of capitalWhile Quintain now benefits from a robust balance sheet and capacity to invest, we seek to increase the pace of delivery and value creation through the introduction of third party capital where appropriate. This may be through joint ventures, as in the case of Emerald Gardens and Alto, co-investment opportunities such as through WELPUT, or the disposal of development plots or mature assets where we can recycle capital to create better risk-adjusted returns. In many cases, we also act as development manager, enabling Quintain to generate additional income from an opportunity as it evolves.

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Strategic report

BUSINESS REVIEW INVESTMENT ASSETSIn 2012, we set a corporate objective of introducing new income streams to support the Company through future real estate cycles. Today, our core investment assets constitute 44% of the portfolio.

London commercial property market5.3m people are employed in London, 32% of them in offices. The Capital is home to over 250 foreign banks, more than nearest rivals New York, Paris or Frankfurt, and the UK insurance industry is the largest in Europe.

It is forecast that over the next five years, 200,000 new jobs will be created in London, leading to a demand for around 7m sq ft of space.

In recent years the strong focus on financial and business services has been progressively diversified and London now boasts an accelerating technology and creative industries sector. The impact on London commercial property, which attracted £14.45bn of foreign investment during the 2014 calendar year, is profound. Occupiers are less attached to specific locations and more willing to re-locate if the building is right, not least due to high employment rates creating pressure from staff for a better environment and work/life balance. As costs rise and major transport improvements, such as Crossrail, are taken into consideration, value-seekers are increasingly considering new locations within London.

Despite this, the pipeline under construction is less than the total annual central London take-up for 2013. Construction costs have increased ahead of inflation and there is minimal speculative office space under construction. The result is that vacancy rates in the West End are below 3% for the first time since 2007 and strong rental growth is forecast to continue.

Through the combined activities of our London Portfolio, WELPUT and Wembley Park teams, we now have property interests across a number of London boroughs and continue to analyse opportunities where income characteristics are strong and there is potential for the repositioning of an asset or substantial improvements planned to its surrounding environment. Our core investment assets constitute 44% of the portfolio, providing better balance to our development activities. During the year, we saw income growing substantially from both our London Portfolio and Wembley Park investments, more than replacing the income relinquished through the recent disposals programme.

“Over £400.0m of transactions were completed for WELPUT during the period to deliver ongoing performance and the Trust return was 21.3%.

”NIGEL KEMPNERINVESTMENT DIRECTOR

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London PortfolioThe London Portfolio encompasses our activities in the Capital beyond Wembley Park. The objective is to build and manage a portfolio of income-producing assets that offer future development or asset management potential through the application of our existing spectrum of skills to balance our large-scale development programme at Wembley Park and whose income generated will support the business through future real estate cycles.

During the reporting period, the London Portfolio contributed £4.1m (2014: £0.1m) net rent to the Group and was valued at 31 March 2015 at £93.1m (2014: £23.9m) following £66.1m of acquisitions.

In Central London, we acquired Aldermary House, EC4, in May 2014 for £40.0m, to add to our interest in Kingsbourne House, WC2. Elsewhere, £26.1m has been invested in properties in Greater London with strong transport links and potential for site enhancement.

Members of Quintain’s team were involved in the foundation of WELPUT with Schroders in 2001 and have acted as strategic property adviser since its inception. The £1.2bn asset Fund focuses on buying quality buildings in institutional locations with opportunities for improvement. The occupier base is diverse: 34% of tenants are in the digital, creative and information services industry and business services and financial services each represent a fifth of passing office rent. Quintain is also an investor in WELPUT, owning units to the value of £12.0m (2014: £5.3m). This provides Quintain with excellent exposure to the buoyant Central London commercial market through a vehicle with which we remain closely involved due to our role as strategic property adviser.

During the year, unit holders overwhelmingly supported the proposal to modernise the Fund, extending the investable area to capture the potential now offered in the City, City Fringe, Southbank and King’s Cross and improve liquidity through greater diversity of unitholders, a larger overall fund and an annual redemption mechanism. Over £400.0m of transactions were completed during the period, disposing of mature WELPUT assets and reinvesting the cash proceeds into new opportunities to deliver ongoing performance. Our team also worked with the Investment Manager to raise £162.0m of equity from a new investor to settle redemptions. The WELPUT Trust return in the 12 months was 21.3%.

In East London, we continue to work with the Greater London Authority regarding the potential development of our holding at West Silvertown and will update the market when plans have been agreed.

LONDON PORTFOLIOAldermary House, EC4Aldermary House was acquired in May 2014 for £40.0m. Located opposite the site of Bloomberg’s new London HQ, the 62,000 sq ft building is now 93% let on rents up to £62 psf and delivering rental income of £2.36m for Quintain.

WELPUTRegent’s Wharf, King’s CrossIn November, WELPUT acted on unit holders’ support to expand the investible area by acquiring for £50m 10-18 Regent’s Wharf in the regeneration area of King’s Cross. The 67,000 sq ft of office space is fully let on low passing rents, providing significant asset management opportunities in the short to medium-term.

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Wembley Park investment assets Wembley Park is one of the largest redevelopments in London. Catalysed by the intention to build a new national Stadium at the turn of the Millennium, Quintain is creating a world-class residential, entertainment and sporting district in this internationally recognised, well-connected historic location.

During the first decade of development, Quintain transformed a dated exhibition complex into a unique, vibrant entertainment quarter, creating over 1,000 new jobs, five acres of green space, London’s first outlet centre and bringing restaurants, coffee shops and a cinema to the location for the first time. In doing so, we also established a portfolio of institutional-grade investment assets that, through our introduction of specialist operators, are now delivering a growing income stream for Quintain. After the end of the reporting period, Matthew Slade was appointed to the new position of Managing Director of Wembley Park. Matthew joins Quintain from Westfield where he was part of the management team that opened Westfield Stratford City and Acting General Manager for the centre during the 2012 London Olympics.

The SSE Arena, WembleyAnchoring the wider entertainment quarter, the renovated Wembley Arena has now been renamed ‘The SSE Arena, Wembley’ to reflect a 10-year sponsorship deal that was agreed during 2014 with the energy provider. Our appointment, in September 2013, of AEG to operate the Arena started to bear fruit during the period with an increased focus on the quality of events being attracted to Wembley as well as the frequency. Quintain derives revenue from rent and a share of commercial income.

Hilton London Wembley HotelWe opened the Hilton London Wembley hotel just before the 2012 London Olympics, for which the adjacent arena and stadium were official venues. This 361-room hotel, in which we sold a 50% interest in 2013, includes extensive banqueting and events facilities and, in addition to rising occupancy levels and room rates, the revenue from corporate events has increased substantially in this, its second full year of trading. Occupancy levels over the year averaged 78.5% (2014: 74.2%). The increase in average room rates led to overall revenues improving 12.2% compared with the previous year, demonstrating the maturing performance of the asset. Subsequent to the year end, we decided to sell our 50% interest in the hotel to our joint venture partner for £40m. This transaction delivers a premium of £6.0m to the March 2015 valuation. The disposal unlocks the value created through the asset’s development and the proceeds will be recycled into the acceleration of the residential development programme where we see greater potential for future value creation.

INVESTMENT ASSETS CONTINUED

An ice rink was installed at Wembley Park for six weeks over Christmas. Attracting more than 24,000 skaters, 2,000 tickets were given to local school children who enjoyed free tuition in line with the national curriculum. 47% of the children had never skated before.

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Opening summer 2016, the theatre can accommodate 1,300 people.

London Designer OutletThe opening of London’s first outlet centre in October 2013 changed the character of Wembley Park and knitted-together the spectrum of leisure activities now available. The combination of retailers, restaurants, coffee shops and a nine-screen cinema has proved attractive, with 5.6m people visiting during the year.

The centre is now 95% let with 13 new brands, including Next, Kurt Geiger and Helly Hansen, opening during the financial year. Most leases comprise a base rent, a turnover-related component and a rent ratchet mechanism, which enables Quintain to benefit financially as the centre’s turnover grows. At the year end, the gross contracted rent was £6.0m.

Wembley TheatreOn 3 March 2015, London Borough of Brent approved the planning application from Imagine Nation, an international entertainment company of which promoter Harvey Goldsmith is a non-executive director, to create a 1,300-seat theatre at Wembley Park.

The theatre will be constructed in North West Village, adjacent to our current residential development to the north of Wembley Park. The first show to be produced at the theatre will be the global theatrical premiere of Lionsgate’s franchise, The Hunger Games™. The theatre is scheduled to open next year. Quintain will benefit from its opening through both the ten-year lease of the land and a share of commercial income.

Wembley Park: Key facts

520 homes have been completed and we expect to deliver 1,200 more over the next four years. Outline consent is in place for a further 3,700 homes.

+3,000 people now work at Wembley Park, including approximately 1,000 people in London Designer Outlet, 150 at the Hilton London Wembley hotel and 2,000 in Brent Civic Centre.

Five acres of new green space have been created at Wembley Park, including public lawns, private squares and pocket parks. The next new public space is scheduled to open next to our Alto development in 2017.

£273mAt the end of the financial year Quintain had a £273m portfolio of investment assets at Wembley Park, including The SSE Arena, the Hilton London Wembley hotel, York House, a multi-storey car park and London Designer Outlet.

5.6m people visited Wembley Park last year to spend their leisure time, contrasting with the 4 million tickets sold for events at the Stadium and Arena, for which the location is famous.

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Strategic report

BUSINESS REVIEW DEVELOPMENT ASSETS

London Residential Property MarketLow interest rates and the continued improvement in the UK economy underpinned house price growth in London during the year. Land Registry data shows that average prices in London increased 11.3% over the year to 31 March 2015, compared with 5.3% across England and Wales, though activity from both buyers and sellers in the second hand market decreased toward the end of the year as uncertainty regarding the outcome of the general election in May 2015 began to permeate and concern emerged over headroom in the Prime tier of the market.

Measures introduced by the Bank of England to offer protection from unsustainable house price growth came into effect in April 2014 and proposals were made in June to restrict mortgages granted at more than 4.5 times the borrower’s income to those with a deposit of at least 15%. These measures appear to have had limited effect on the London housing market, where demand continues to outstrip supply substantially and is expected to do so for some time to come. With forecasts anticipating 16% population growth by 2031, the Greater London Authority estimates that the supply of new housing in the Capital already falls short by c. 17,000 homes every year.

Since 2008, house prices have recovered most strongly in Prime central London, which attracts equity-rich foreign investment. However, average prices in every London borough have now exceeded their 2007 peak and the influx of foreign investment into central London has had a ripple effect outwards to typically lower value boroughs. In Brent, where we hold significant exposure to the residential market, house prices at the end of 2014 were 31% above their 2007 peak, broadly reflecting the average for the Greater London area, though transactions remain below their pre-financial crisis average.

Affordability remains a concern in the London housing market, with the average price of a home now exceeding £400,000. On a mortgage multiple of 4.5 times with a 5% deposit, such a purchase requires a household income of £86,000 and a deposit of £20,000. However, the Government’s Help to Buy equity loan programme supports the purchase of new homes priced up to £600,000, which benefits the majority of purchasers at Wembley Park. With supply in this Mid-Mainstream tier of the market failing to fulfil demand by c. 3,500 units pa, we expect demand at this price point to remain strong.

Quintain has a meaningful role to play in delivering as many high quality homes as feasible, and doing so as quickly as possible.

LowerMainstream

(£375-450 psf)

Projected annual average supply

Mid-Mainstream(£450-700 psf)

UpperMainstream

(£700-1,000 psf)

New Prime(>£1,000 psf)

Ann

ual n

et c

ompl

etio

ns

4,0295,000 5,685 6,000 5,445

3,250

9,010

12,500

c. 3,500 p.aUnder-supply in London’s Mid-Mainstream market

Occupier demand

LowerMainstream

(Up to £450 psf)

Owner/occupier households

Mid-Mainstream(£450-700 psf)

Annual householdincome

UpperMainstream

(£700-1,000 psf)

New Prime(>£1,000 psfand above)

Hou

seho

lds

£75k to £100k

£100k to £150k

£150k to £200k

Above £200k

£50k to £75k

500

400

300

200

100

000’s

A�ordability

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OLY

MP

IC W

AY

WEM

BLEY P

ARK BOULE

VARD

WEMBLEYPARK STATION

WEMBLEYSTADIUM STATION

Eastern Lands

North WestVillage

South WestLands

EntertainmentQuarter

Wembley ParkWembley Park is designed to be a place that welcomes everyone. The majority of private homes we are creating at Wembley Park are designed to cater for the Mid-Mainstream Tier where the shortfall in supply is around 3,500 homes every year and household income is typically below £100,000.

Following our initial acquisition of land in 2002, Quintain expanded its interests to create an estate where 3,000 people work, 500 households live and the revitalised destination attracts more than 5m visitors a year to shop, eat and play. To date, we have delivered approximately 25% of the development opportunity within the consented masterplan, creating a portfolio of maturing assets at the heart of our wider

landholdings. With this social and economic heart becoming established, during the year under review we re-focused our attention on accelerating residential development and expect to deliver approximately 5,000 new homes over the next decade.

You can read more about our defined development pipeline on page 26 and the further development opportunity on page 36.

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Alto During the year we secured planning consent

for 362 homes in Alto, next to Emerald Gardens

DEVELOPMENT ASSETS CONTINUED

Defined Development PipelineNorth West Village, Wembley ParkLocated close to Wembley Park Underground station, North West Village is becoming a district of public squares and private gardens that will be home to 1,200 households.

The first 475 homes are under construction in Emerald Gardens, a development of seven buildings surrounding an acre of landscaped gardens. 284 of these homes are for private ownership and the first tranche went on sale in March 2014. By the end of the reporting period, 251 apartments had been sold at an average price of £393,000: an average price of £597 per square foot. Emerald Gardens will be occupied in stages from spring next year through to October. To maximise our return on equity and manage our development risk exposure, in April 2014 we formed a 50:50 joint venture to develop Emerald Gardens with Keystone. This transaction enables Quintain to generate income from development management fees and unlocked £32.2m, which we reinvested in the development of further residential plots.

In February 2015, planning permission was secured for the adjacent development, named Alto (pictured opposite). Comprising 362 apartments in total, construction of the

development will begin this summer and complete during the second half of 2017. Of the 211 private apartments 70 have been sold since the end of the reporting period at an average price of £422,500, reflecting a blended average £656 per square foot.

Building on the success of our partnership at Emerald Gardens, we announced after the reporting period the creation of a second 50:50 joint venture with Keystone for the delivery of Alto. This will enhance our development management income stream and unlocked a further £27.0m to increase the pace of residential development.

Work is now underway on the design of combined plots NW07 and NW08, located to the east of Alto, across a public space called Elvin Square Gardens. This development will deliver approximately 400 further apartments and complete the North West Village at Wembley Park. It is anticipated that a planning application will be submitted this autumn, with the proposed construction schedule resulting in the first completions during 2018.

Combined, the development of these plots will deliver approximately 1,200 new homes at North West Village over the next four years.

South West LandsThe new masterplan for the South West Lands, which links the Entertainment Quarter with Wembley Stadium station, was submitted in December 2014. Discussions with London Borough of Brent are ongoing, and we anticipate that the application will be considered by the Planning Committee by the end of the current half year.

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DEVELOPMENT ASSETS CONTINUED

Future Development OpportunityEastern LandsHaving activated the entire Western half of the site over the past 10 years, considerable work has been undertaken over the second half of the year to analyse how the full potential of the Eastern half can be realised.

By combining the 12.1 acres on the Green Car Park, which is included in the original 2004 masterplan consents, and the 12.4 acres of Wembley Retail Park we have the opportunity to create an exciting and cohesive new masterplan which links these two holdings. Working with London Borough of Brent, we have created a new design that brings these components together, enhancing the visibility of the iconic landmark that crowns Wembley Park from a substantial new central park, providing the Stadium with a magnificent setting and increasing the quantity of homes that could be delivered. To enable us to bring Wembley Retail Park into these redevelopment plans, we have negotiated vacancy surrender premiums from existing tenants totalling £5.0m, which will come through the 2014/15 and 2015/16 results. In addition, we have taken this opportunity to explore revisions to other undeveloped areas of the site, resulting in a proposed masterplan for c.43 acres, including the Eastern Lands.

In addition to improving the quality of the overall environment and creating a new sense of arrival to Wembley Park from the East, the proposed masterplan and concurrent re-design of undeveloped areas of the Western Lands would increase considerably the quantum of development, potentially delivering 30% more residential development than supported by the original 2004 masterplan. These additional homes will include a variety of tenure types, in line with our vision of creating a mixed and balanced community at Wembley Park.

We expect to submit the application for outline planning consent this autumn, which would lead to an initial planning decision before the end of the 2015/16 financial year. Subject to a successful outcome, all required regulatory discussions could be completed by the summer of 2016.

With development activity taking place across the Western half of the site and a transformational new design for the Eastern Land under consideration, Wembley Park now has a cohesive masterplanning framework and more defined potential development programme with substantial momentum that can support the delivery of 6.3m sq ft of development over the next decade.

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Professional Market Rental BusinessIn April 2014, we announced our intention to establish a new Professional Market Rental (PMR) business (a sector also known as PRS), wholly owned by Quintain and seeded with 141 apartments within Emerald Gardens. Today, we announce our medium-term intentions for this business, which we believe has the potential to be a robust source of future recurring income for Quintain that will help support the business through the real estate cycle.

A quarter of all homes in London are rented from private landlords, and this is expected to grow to over a third by 2019, equating to 1.2m households. With more affluent Londoners unable to purchase a home, a significant proportion of the growth in this market is from those earning between £40,000–100,000 pa and paying between £350–600 per week in rent (£1,500–2,500 per calendar month).

The Group is well placed to build a successful Professional Market Rental business. In addition to our proven ability to design and build attractive apartments and our ownership of well-connected development land in London, we have an existing management platform with seven years’ experience managing a portfolio of circa 150 rental properties at Wembley Park on behalf of private landlords. The existing team therefore has first-hand experience of the fundamentals of letting and managing rental properties in London, and specifically Wembley Park, the income that can be achieved, the profile of tenants, the features that attract a premium rent and the level of service that ensures tenants stay. Their success is evidenced by an average 12-month occupancy rate of 98% and average rental growth of 4% over six years.

In addition to the 141 apartments that will open next year at Emerald Gardens, we will open a further 120 apartments in Alto the following year and expect to add 100 more homes from the NW07/NW08 development during 2018. Concurrently, we are assessing the potential of other areas of Wembley Park for dedicated Professional Market Rental development alongside the private homes and Affordable Housing already being delivered. Within five years, we expect to have created a robust business of between 500 and 1,000 homes designed, built and managed by Quintain.

This business will offer a personal, flexible living experience attractive to Londoners who seek high quality, convenience, service and sociability in their living space. Social spaces such as club rooms are included within the PRM buildings, providing more flexibility for residents who will also have access to a concierge and on site team. High-speed broadband access will be included in the rent and residents will be able to book housekeeping, organise dry cleaning, reserve the social spaces and manage their account through a simple online application.

Quintain’s experience, track record and existing assets are perfectly aligned to the requirements of a successful residential investment business, and we look forward to welcoming our first tenants next spring.

Strategic report

BUSINESS REVIEW RESIDENTIAL INVESTMENT PORTFOLIO

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QuercusThe Quercus Healthcare Fund was established in 1998 as a partnership between Quintain and Aviva. At 31 March 2015, our 11.2% interest in Quercus was valued at £28.6m and had contributed £0.9m of adjusted profit during the period under review.

Tightening regulation regarding healthcare provision and constraints on public sector funding continue to affect the long-term care sector. The impact has been a 5.8% reduction in the value of the Fund over the year. Quintain’s share of the deficit was £2.7m, with a further £3.4m loss attributable to disposals. See pages 31 and 33 for further information.

During the year, a plan was executed to dispose of the more challenged assets within the Fund to leave a portfolio of performing assets. Several transactions took place during the year: a total of 99 properties sold for £94.7m, including eight properties which were exchanged with completion anticipated in June 2015. A further four properties were sold after the year end for £8.2m.

Following these transactions, Quercus now consists of approximately 90 assets located across the UK with a rent roll of £32.8m and strong underlying fundamentals. The strategy agreed at the time of the extension of the Quercus Fund in 2013, designed to deliver stronger dividends and stable asset values going forward, has been executed.

QuantumQuantum is a joint venture with Aviva which owns the Bristol and Bath Science Park and units at Heriot Watt Science Park in Edinburgh. Quintain’s investment is £18.9m, of which £6.6m relates to the properties and the remainder to infrastructure development loans to the Homes and Communities’ Agency.

Quintain’s share of Quantum’s profit for the year was £0.9m (2014: £1.8m). The £1.8m share of profit for the prior year included £1.0m in respect of non-recurring development management fees.

iQ Student AccommodationIn May 2014, we announced the disposal of our 50% interest in the student accommodation business we founded with Wellcome Trust in 2006 for £106.4 million. The transaction unlocked Quintain’s substantial investment in this market-leading business which operates across the UK and enabled the Company to recycle the capital into our largest London asset, accelerating further the pace of residential delivery at Wembley Park where we see the potential for better returns for our shareholders.

Strategic report

BUSINESS REVIEW NON-CORE ACTIVITIES9% of Quintain’s portfolio remains invested in non-core activities relating to legacy assets for which we also provide asset management services.

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Strategic report

FINANCE REVIEW

Quintain has two financial priorities: the creation of capital value from residential and commercial investment and development in London, and the creation of robust income streams from a stable financial platform. Good progress has been achieved on both fronts during the financial year.

For the year under review, adjusted pre-tax profit was ahead of last year at £6.2m (2014: £4.2m), produced from a materially de-geared balance sheet: the result of the disposals programme that completed in May 2014 and simplified and transformed our business. The Company now has the capacity to invest in its core assets to create shareholder value.

In August, the Company announced the re-financing of £260m of bilateral banking facilities to provide funding certainty for the next phase of Quintain’s evolution. The Company has £375m of debt facilities (including the 2020 £115m corporate bond) with an average maturity of over four years.

During the year, we have begun to see the benefits of rental income at London Designer Outlet, increased revenue from The SSE Arena, Wembley and rent from our London Portfolio acquisitions, which include Kingsbourne House acquired in February 2014 and Aldermary House acquired in May 2014.

The table below summarises the financial headlines for the year.

31 March 2015

£m

31 March 2014

£m

EarningsProfit after tax 37.9 52.9Adjusted profit (before capital movements) before tax 6.2 4.2EPRA diluted EPS 1.0p 1.1pNet Asset Value per shareBasic 122p 115pDiluted 121p 114pEPRA diluted 122p 114pFinancingNet debt 200.8 208.9Gearing 32% 35%Look-through LTV1 27% 38%

1 Look through loan to value is defined as the ratio of total net debt (including our share of net debt in joint ventures and associates) to total property assets (including our share of property assets in joint ventures and associates).

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1. Results for the yearThe Group reported a statutory post-tax profit for the year of £37.9m (2014: £52.9m). Operating profit for the year was £41.4m, an increase of £28.9m, due principally to a valuation surplus of £41.2m this year, compared to a surplus of £22.4m last year.

Summary income statement31 March

2015 £m

31 March 2014

£m

Turnover 57.7 32.6Gross profit 18.2 8.3Surplus on revaluation 41.2 22.4(Loss)/profit on disposals (0.2) 1.7Share of loss from joint ventures and associates (0.8) (2.5)Net segmental profit 58.4 29.9Administrative expenses (17.0) (17.4)Operating profit 41.4 12.5Net finance costs (0.7) (7.8)Tax (charge)/credit for the year (2.6) 6.3(Loss)/profit on discontinued operations (0.2) 41.9Profit after tax 37.9 52.9

2. Adjusted profit for the year Adjusted profit before tax (our measure of underlying earnings, which excludes disposals, valuation and mark to market adjustments but includes discontinued operations) for the year increased by £2.0m from £4.2m to £6.2m as set out below.

Adjusted profit for the year (including discontinued operations)

31 March 2015

£m

31 March 2014

£m

Net rental income1 15.8 3.8Net profit/(loss) from trading sales 0.1 (0.3)Fees from asset and development management 1.3 3.1Other income 1.8 2.5Gross profit – continuing operations 19.0 9.1Gross profit – discontinued operations 0.3 5.8Administrative expenses (17.0) (17.4)Operating profit/(loss) 2.3 (2.5)Share of profit from joint ventures and associates 2.6 9.4Net finance income/(expense) 1.3 (2.7)Adjusted profit before tax 6.2 4.2

1 Includes £3.0m (2014: £nil) net surrender premium income.

Importantly, adjusted gross profit from continuing operations has already more than compensated for disposals in the prior year with net rental income increasing from £3.8m to £15.8m. Growth at Wembley Park from London Designer Outlet and The SSE Arena contributed £4.3m, net surrender premiums contributed £3.0m and the London Portfolio contributed £4.1m. Fees from asset and development management of £1.3m have decreased following the disposal of iQ and Greenwich joint ventures.

During the year, potential issues, including undisclosed conflicts of interest, were identified in the management of the Quercus Fund. Quintain instigated an investigation by its lawyers, Norton Rose Fulbright, including a review of historic procurement and disposal fees charged by Quintain and others to the Fund focused on the period 2004 to 2011.

In May 2015, following completion of the investigation and with the support of the General Partner, a settlement without any admission of legal liability by Quintain, of £1.9m was agreed in favour of the Fund. The amount of £1.6m, net of VAT, has been provided in these accounts against Quercus income for 2014/15. The costs of the investigation, which are estimated at £1.2m, are separately included in general administrative costs.

The table below provides a reconciliation between adjusted and statutory profit.

Reconciliation of adjusted profit to statutory profit31 March

2015 £m

31 March 2014

£m

Pre-tax adjusted profit 6.2 4.2Amortisation of intangible asset (0.8) (0.8)Revaluation surplus/(deficit)

Continuing operations 41.2 22.4Discontinued operations – 4.7Joint ventures and associates 1.1 (4.9)

(Loss)/profit on disposalContinuing operations (0.2) 1.7Discontinued operations (1.1) 32.5Joint ventures and associates (3.4) (1.5)

Mark to market adjustmentsContinuing operations (2.0) (3.9)Discontinued operations – 0.5

Tax (charge)/creditContinuing operations (2.6) 6.3Discontinued operations (0.3) (8.3)Joint ventures and associates (0.2) –

Profit after tax 37.9 52.9

3. Analysis of rental income Quintain conducts a significant proportion of its business through joint ventures and associates. The table below sets out the combined net and gross rental income for continuing operations.

Rental income31 March

2015 £m

31 March 2014

£m

Group net rental income1 15.8 3.8Share of joint venture and associates net rental income 5.8 6.4Combined net rental income 21.6 10.2Gross rental income

Direct owned 21.3 10.3Joint venture and associates properties 12.7 13.0

1 Includes £3.0m (2014: £nil) net surrender premium income.

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FINANCE REVIEW CONTINUED

The gross contractual annual rent and gross Estimated Rental Value presented below are look forward measures.

Gross contracted and ERV rent£m

Gross contracted annual rentDirect owned 19.0JV properties 4.7

Gross ERV1

Direct owned 24.0JV properties 4.8

1 Estimated Rental Value.

4. Sales of investment and trading properties During the year, £121.7m of capital was recycled through disposals to reduce debt and invest in opportunities that offer the potential for better risk-adjusted returns, such as the acceleration of our substantial residential development programme at Wembley Park.

On 14 April 2014, Quintain entered into a 50:50 joint venture with Keystone Developers S.A. for the development of Emerald Gardens at Wembley Park. The consideration under the agreement was £22.7m for the land with a further £9.5m for future associated infrastructure, a total of £32.2m. Of this total consideration, £5.0m of infrastructure is deferred until practical completion and Quintain invested £12.5m back into the joint venture and £5.6m as a deposit on the 141 PMR apartments that the joint venture is constructing for Quintain, giving net cash proceeds of £9.1m.

On 16 May 2014, Quintain completed the disposal of its 50% interest in iQ, to its joint venture partner Wellcome Trust, for gross consideration of £106.4m.

On 28 April 2015, Quintain entered into a second 50:50 joint venture with Keystone Developers S.A. for the development of Alto, the next residential plot at Wembley Park. The consideration under the agreement was £19.0m for the land with a further £8.0m for future associated infrastructure (£4.0m deferred until practical completion), a total of £27.0m. Two buildings comprising 362 homes will be built on the plot, 120 of them will be constructed for Quintain, for which the Company will pay the joint venture £36.8m. Of this amount, £7.3m will be paid this summer, with a further £3.7m in the autumn and the balance from existing Company resources on practical completion, expected in 2017. These homes will be retained by Quintain and professionally managed as high quality PMR accommodation to expand the Group’s income. The consideration of £19.0m excludes the value of the land of the PMR homes.

5. Results of joint ventures and associatesThe Group’s share of loss from joint ventures and associates, on a statutory basis, decreased to £0.8m (2014: £2.5m) which excludes iQ as this is presented as discontinued operations. The net revaluation surplus was £1.1m (2014: £4.9m deficit).

Of the £1.1m net revaluation surplus, £3.3m relates to the increase in valuation of the Hilton hotel. This has been partially offset by a £2.7m deficit related to certain weaker assets within the Quercus Healthcare Fund portfolio, the majority of which were sold in the second part of the year realising a loss of £3.4m.

6. Net finance expenses Net finance expenses decreased from £7.8m to £0.7m. Bank and other interest payable was £13.5m, a decrease of £4.0m on the prior year. The average cost of debt increased to 5.2% (2014: 4.2%) due to the 6.5% coupon on the Bond issued in July 2013, which has a more material impact on the weighted average when overall net debt levels are relatively modest. The net finance expenses has decreased as we have continued to capitalise interest of £13.0m (2014: £13.7m) due to the ongoing active development at Wembley Park.

Interest receivable includes £1.5m reflecting the interest earned on a loan to the Hilton joint venture. Interest expense includes a £1.9m impairment relating to the investment in the Ludgate Environmental Fund, which is held at fair value as determined by reference to its quoted share price. Of this amount £1.4m represents the recycling of the cumulative deficit in cost that has previously been taken to the Statement of Other Comprehensive Income and therefore has no impact on Net Asset Value (NAV).

Net finance expenses31 March

2015 £m

31 March 2014

£m

Bank and other interest payable 13.5 17.5Recycling of fair value of financial instruments – 4.2Recycling of revaluation loss of available for sale financial asset 1.4 –Impairment of financial instrument 0.5 2.5Change in fair value of financial instruments 0.2 –Gross interest cost 15.6 24.2Interest capitalised (13.0) (13.7)Interest receivable (1.9) (2.7)

0.7 7.8

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7. ValuationAs at 31 March 2015, the valuation of the Group’s properties, including tenant incentives and our share of gross assets in joint ventures and associates, was £834.6m, an increase of £42.3m, net of capital expenditure since 31 March 2014. The increase has arisen principally on two assets, first, the development land at Wembley Park which has benefited from our placemaking activity and the strength of the London residential market and, secondly, The SSE Arena which has been enhanced by the new management arrangements put in place during the prior year. The valuation surplus has been offset in part by the Group’s share of a deficit arising in Quercus in the first half of the year. With the sale of a large portfolio of the weaker assets in Quercus, the pressure on the remaining assets has eased and the fund reported a small valuation uplift in the second half of the year for the core portfolio.

31 March 2015

£m

31 March 2014

£m%

Movement1

Wembley Investment assets 272.9 254.2 4.6%Development land 395.7 334.9 13.8%

London Portfolio Investment assets, development land 93.1 23.9 3.3%Quercus² Long-term healthcare 43.5 57.8 (5.8)%Non-core Secondary property and science parks 29.4 33.3 1.5%Continuing 834.6 704.1 7.1%iQ Student accommodation – 216.0 –Total 834.6 920.1 7.1%

1 Like for like growth, excluding capitalised interest (movement is 5.3% including interest).2 Held as an associate investment with NAV of £28.6m.

8. TaxationThe Income Statement shows a tax charge of £2.6m (2014: credit of £6.3m) arising from a deferred tax charge relating to the valuation surplus, partially offset by recognising an ACT credit and previously unrecognised losses.

9. Investment assets31 March

2014 £m

Additions £m

Disposals £m

Reclassified £m

Valuation £m

Other £m

31 March 2015

£m

Investment properties 570.0 94.5 (11.7) (20.6) 41.2 13.0 686.4Joint ventures 80.3 15.4 – (34.3) 3.6 (4.4) 60.6Associates 1.7 – – 34.3 (2.5) (3.0) 30.5Other non-current assets 19.9 8.1 (2.9) 4.6 0.9 (2.5) 28.1

671.9 118.0 (14.6) (16.0) 43.2 3.1 805.6

The increase in investment properties is due to the additions in the London Portfolio, ongoing capital expenditure at Wembley and valuation uplifts, offset by the reclassification of Alto as a trading property.

Joint venture investments decreased as a result of the reclassification of Quercus as an associate.

10. Net assets per share31 March

201531 March

2014

IFRS net assets (excluding non-controlling interest) £639.4m £595.4mIFRS NAV per share 122p 115pEPRA net assets £647.1m £598.2mEPRA NAV per share1 122p 114pIFRS diluted net assets £640.8m £598.2mIFRS diluted NAV per share 121p 114p

1 The EPRA NAV per share excludes the fair value adjustments for debt and related derivatives and deferred taxation on revaluations and includes the unrealised revaluation surplus on trading properties and is calculated on a fully diluted basis.

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FINANCE REVIEW CONTINUED

11. Contractual capital commitments As at 31 March 2015, the Group’s contractual capital commitments of £58.8m (31 March 2014: £19.0m) relate primarily to ongoing construction and infrastructure work at Wembley.

12. Cash flow Summary cash flow statement

31 March 2015

£m

31 March 2014

£m

Net cash flow from operating activities 12.7 (21.2)Net cash flow from investing activities (2.1) 259.0Net cash flow from financing activities (26.5) (272.1)Net decrease in cash (15.9) (34.3)Net repayment of loans 24.0 269.0Reduction in net debt 8.1 234.7

31 March 2015

£m

31 March 2014

£m

Capital recycled:Sale of iQ 104.7 –Sale of GPRL – 227.9Sale of Sequel – 52.4Net cash from Emerald Gardens 9.1 –Other property sales 7.9 41.9

121.7 322.2

The net cash inflow from operating activities was £12.7m (2014: £21.2m outflow) of which £22.7m relates to the sale of land held in trading property to the Quintain Keystone joint venture regarding Emerald Gardens. Investment in the development and purchase of investment properties totalled £97.3m (2014: £69.0m) during the year.

13. Financing strategy and capital structure Since 31 March 2014, the Company has held net debt at a broadly similar level from £208.9m to £200.8m, with cash generated from the iQ disposal recycled into the residential development programme and commercial acquisitions into the London Portfolio. This results in a gearing of 32%. We have enhanced our financial platform by extending our bilateral banking facilities from March 2016 to the last quarter of 2018 and into 2019. The key terms are broadly in line with the previous facilities with headline margins of 190 basis points. Together with the £115.0m Bond issued in 2013 and a rolling £20.0m overdraft facility, Quintain now has £375.2m of debt facilities with an average maturity of over four years. This presents the opportunity to allocate capital and deliver value at Wembley Park and selectively invest in opportunities elsewhere in London, the intention being to manage the balance sheet gearing between its current level and 50%, whilst ensuring that the actual level is appropriate to the nature and risk profile of the Group’s assets at any point in the real estate cycle. Our financing structure needs to be flexible and cost-effective, taking account of the availability of debt and other sources of finance. This has been achieved through securing funding at the corporate level, giving us the scope to fund efficiently across all areas of the portfolio and providing us with liquidity and operational flexibility. During the reporting period, the first Quintain Keystone joint venture agreed a £70m facility with Lloyds Bank to support construction

on the Emerald Gardens site. A similar facility will be sought for the new joint venture for the development of Alto.

The Group financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. At 31 March 2015, the Group has prepared detailed cashflow forecasts which show that it has committed undrawn facilities to finance its committed capital expenditure and other outflows, which will enable it to continue in operational existence for the foreseeable future.

The Group’s key financial covenants are an interest cover covenant and a gearing covenant as shown in the table below. The Group’s forecasts show that the Group is expected to continue to meet both financial covenants for the foreseeable future. Based on this analysis the directors consider it is appropriate to prepare the financial information on a going concern basis.

Debt summary

Covenant31 March

201531 March

2014

Cash £(7.2)m £(10.3)mBank loans and overdrafts < 1 year £12.8m –Bank loans > 1 year £195.2m £219.2mNet debt £200.8m £208.9mUndrawn committed facilities £167.2m £245.5mWeighted average debt maturity (full facility) 4.2 years 3.1 yearsWeighted average interest rate 5.2% 4.2%Cost of bank debt 3.2% 3.9%% of debt fixed 79.3% 75.3%% of debt capped 20.7% 24.7%Interest cover1 1.25x n/a3 20.5xGearing2 110% 32% 35%

1 Interest cover, per our banking covenants, is defined as adjusted operating profit, including discontinued operations, before net finance expenses plus realised surpluses on disposals divided by adjusted net finance costs excluding finance lease interest.

2 Gearing, per our banking covenants, is defined as the ratio of net borrowings of the Company and its wholly owned subsidiaries to equity shareholders’ funds adjusted for intangible assets, deferred tax and cumulative mark to market movements.

3 Net interest receivable, per banking covenant definitions.

Covenant QuercusQuintain Keystone

Joint ventures and associates:Net debt (QED share) £19.3m £6.0mWeighted average debt maturity 2.1 years 2.0 yearsWeighted average interest rate 4.8% 4.0%% of debt fixed/capped interest rate 78% –Interest cover 1.5x/n/a 2.9x n/aLoan to value 60%/50% 50% 8%Loan to cost n/a/65% n/a 27%

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14. EPRA InformationThe basic net asset value per share at 31 March 2015 was 122p, up from 115p in 2014. The EPRA net asset value per share at 31 March 2015 was 122p, up from 114p in 2014.

Reconciliation to EPRA NAV per share31 March

201531 March

2014

IFRS net assets 639.4 595.4EPRA adjustmentsDilutive effect of options 1.4 2.8Deferred tax arising on revaluation movements, capital allowances and derivatives

Group 2.3 1.2Joint ventures 1.3 (0.9)Associates (4.4) 0.3

Revaluation of trading properties 6.6 –Fair value adjustments on derivatives

Group 0.5 0.4Joint ventures and associates – (1.0)

EPRA net assets 647.1 598.2EPRA NAV per share 122p 114p

The table below reconciles EPRA earnings per share to the reported IFRS fully diluted earnings per share.

EPRA earnings per share31 March 2015 31 March 2014

Shares m £m Pence

Shares m £m Pence

IFRS fully diluted earnings per share – continuing operations 38.1 7.2 11.0 2.1IFRS fully diluted (loss)/earnings per share – discontinued operations (0.2) – 41.9 8.1IFRS fully diluted earnings per share 527.5 37.9 7.2 520.0 52.9 10.2Revaluation movements

Group – continuing operations (41.2) (7.8) (22.4) (4.3)Joint ventures and associates – continuing operations (1.1) (0.2) 4.9 0.9Group – discontinued operations – – 1.4 0.3Joint ventures – discontinued operations – – (6.1) (1.2)

Loss/(profit) on disposalsGroup – continuing operations 0.2 – (1.7) (0.3)Joint ventures and associates – continuing operations 3.4 0.6 1.5 0.3Group – discontinued operations 1.1 0.2 (32.5) (6.3)

Deferred tax arising on revaluation, capital allowances and derivatives

Group 2.9 0.6 (1.9) (0.4)Joint ventures and associates 0.2 – 3.5 0.7

Fair value adjustments on financial instrumentsGroup – continuing operations 2.1 0.4 6.7 1.3Joint ventures – discontinuing operations – – (0.5) (0.1)

EPRA earnings per share fully diluted 527.5 5.5 1.0 520.0 5.8 1.1

15. Financial OutlookQuintain has a robust financial platform in place from which to deliver on our strategy of creating value from our portfolio of investment assets, our residential development programme and our new residential investment business. We can look forward to new rental income from the opening of our first homes within the PMR investment portfolio and the commencement of development profits, starting with the first completions at Emerald Gardens next spring.

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Our vision, from which all activity flows, is to bring London property and places to life. This is underpinned by our development approach: “People first, then place, then property”. During the year, for consistency and transparency, we realigned our original Responsibility focus areas (Buildings, Neighbours, People) to ‘People, Place, Property’ and have used these themes as a basis for the development of a formal placemaking protocol, which is in the final phase of design with our partners at Wembley Park.

Our activities are governed by the Responsibility Committee, led by the Finance Director. During the year, sub-committees focused on Buildings, Neighbours and People recommended to the Committee the areas on which attention should focus to support our corporate strategy and undertook the required work. A key purpose of these sub-committees was to ensure our employees were involved in shaping our approach to Responsibility issues and the delivery of our objectives. However, at the end of the year we decided to adopt a less formal approach in order that more people can be included in areas where they might have expertise. We will expand membership of the Responsibility Committee, which will identify and delegate actions across the business as required.

MaterialityWe have adopted a simple process to identify the issues that are material to the business. This involves three steps:

EXTERNAL REVIEW

INTERNAL REVIEW IMPLEMENTATION

This process also provides the framework for benchmarking and the disclosure of information to our stakeholders, ensuring it remains relevant.

A review of the external science, trends, technologies, activities of our peers and other companies provides the starting point for identifying the issues that may become material to Quintain in the future. This is undertaken by our Sustainability Manager and reviewed on a monthly basis.

The identified issues are then reviewed internally by the Responsibility Committee and members of the Senior Management Team. This year, we also ran a workshop facilitated by a third party, to assess the trends in our sector, their potential impact on the business and our level of influence in relation to them. The result was a materiality matrix, confirming our priority issues for the near-term. It identifies a range of issues, some of which require a specific management strategy, others that we will monitor.

RESPONSIBILITY REPORTOur Responsibility Strategy has evolved over the year to reflect the maturing needs of our business functions following a prolonged period of transition, and to embed deeper governance which will ensure that our thinking remains current, that we anticipate future trends and assess how we deliver against our aspirations in a transparent, consistent manner.

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NOTE: FIND OUR 2014/15 RESPONSIBILITY DATA REPORT ON OUR WEBSITE AT WWW.QUINTAIN.CO.UK

Materiality matrix

This matrix will be reviewed annually to ensure it remains current and that new issues are assessed and included as necessary.

Transparency and disclosureQuintain is committed to high standards of transparency and disclosure. During 2013/14, we developed our data management procedures to ensure we have a robust process through which we can understand our environmental impacts. As a result, over the last two years we improved our score in the Carbon Disclosure Project from 10 to 95 and are now recognised in the Climate Disclosure Leadership Index.

This year we have for the first time produced a Responsibility Data Report alongside our Annual Report to provide more detailed data and analysis. This references other external standards and benchmarks, including the Global Reporting Initiative disclosures, London Benchmarking Group framework for community investment and EPRA sustainability reporting standards. During 2015/16, we intend to further improve reporting in relation to people and place.

PeopleThe ‘Our People’ focus area originally addressed employee-related issues. Under the new structure this has become the lens through which we assess our interaction with all stakeholders and the impact that our business activity has on them.

Quintain aspires to be a ‘destination employer’: a Company that is renowned for delivering fulfilling careers and a great employee experience. This will help us to attract the very best talent to support the achievement of our business goals. Our key measure of this is the response from staff in the annual survey to three questions, with our target being at least 85% agreement to each:

Question 2013 2014

I enjoy my job 93% agreed 91% agreeI am proud to work at Quintain 82% agreed 93% agreeI would recommend Quintain to a friend seeking employment 68% agreed 87% agree

These figures are also monitored in the context of the proportion of employees who complete the survey, which this year was 98% (2013: 93%).

To ensure the best performance of our employees and in recognition of the inefficient nature of the accommodation from which Quintain previously operated, all London-based employees have moved to new premises during the year. Our working environments in both central London and at Wembley Park are now purpose-built, open plan and equipped to a high standard with provision made for informal and formal working areas as well as active collaboration between these two offices. The impact was measured through the staff survey and the scores for the three relevant questions before and after the moves are shown below.

Question 2013 score 2014 score

The office environment reflects well on Quintain 48% agree 99% agreeWe have good office facilities 51% agree 98% agreeI am satisfied with my working environment (including equipment) 53% agree 89% agree

Impa

ct o

n Q

uint

ain

Quintain’s ability to influence

13

121110

78

9

12 3 4

56

1. Health & Safety2. Anti-corruption and bribery3. Energy and CO2 emissions – Energy security – As-built performance – Product certifications4. Legacy impacts – Local communities – Local procurement – Local employment5. Skills – Training and education – Employee satisfaction and well-being – Flexible working – Performance reviews – Fair pay

6. Supplier impacts – Resource scarcity – Materials7. Extreme weather events8. Transport9. Waste10. Water11. Biodiversity12. Diversity13. Local living wage

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RESPONSIBILITY REPORT CONTINUED

During the year, the Responsibility Committee invited employees to choose a single charity that the Company could support during the financial year. Four potential charities were chosen that focus on issues aligned to our vision of bringing London property and places to life.

At an event in our new Wembley Park office, each charity was championed by a member of staff who ‘pitched’ the charity’s case to their colleagues. A vote was then held to determine which cause had attracted most support, and – by a margin of 50% – employees selected Thames Reach as our new corporate charity. Thames Reach, which supports homeless people, will receive our entire corporate charity budget for the year as well as being the subject of employee fundraising efforts, which will be match-funded by Quintain on a £1 for £1 basis.

Quintain appoints and promotes people on merit and in line with the skills and attributes required for each role. At 31 March 2015, the gender balance was as follows:

Male Female

NEDs 5 1Executive directors 3 0Senior professionals 12 7All other employees 38 26Total 58 34

During the year, we carried out an initial stakeholder mapping exercise to identify more clearly the people and organisations outside Quintain on whom we have an impact and who are key to business success. For each stakeholder, we then identified a single person as the main employee responsible for co-ordinating our relationship, which may take place on several levels and regarding several activity areas within the business. Following the completion of the materiality assessment, which took place in February 2015, we are now starting to create an engagement plan that reflects the materiality index and will contribute to the achievement of our targets.

Place‘Our Neighbours’ was the channel through which issues relating to the wider communities in which we operate were addressed. Under our new structure, this will be split between ‘People’ and ‘Place’.

The regeneration of Wembley Park has been underway for a decade (see pages 12 to 19). One of the most obvious areas where we can influence people’s lives is in the design of the buildings and spaces that we create. The original masterplan mirrored the historic layout of the British Empire Exhibition, which took place between 1924 and 1925 reflecting a significant time in Wembley’s history. As we have progressed with this work, we’ve seen how a less angular approach to design creates a more attractive place to live and have therefore created a more organic, fluid design as we masterplan the Eastern Lands (see page 36). A seven acre park is proposed for the centre of this primarily residential development, with buildings angled to maximise views of the park, central London and the Stadium, which crowns this London development.

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An obvious success of the year in terms of bringing Wembley Park to life was the creation of a new playground opposite the sun terrace of London Designer Outlet. Entirely protected by a weather-proof cover, this new £1.7m facility features bespoke equipment designed to reflect the history of the place, such as a climbing frame resembling one of the original Stadium’s famous towers and rockers sporting Wembley lions. Its appeal was apparent within days of opening and, based on the usage levels we saw during the period, we forecast that the playground will be enjoyed by 120,000 children every year.

Aligned to this, the new event pad, located between the playground and the Stadium, has hosted a number of free events during the year, such as live screenings of the Wimbledon Championship and a winter ice rink.

Following a competition in January 2014, we started the financial year with the appointment of four official Wembley Park buskers who are authorised to busk across the site to entertain the millions of people who now visit every day of the week. This programme draws on local talent while reflecting the history of Wembley as a place where unforgettable concerts have taken place.

We are now developing a formal placemaking strategy that will be adopted across Quintain, focused on our themes of People, Place, Property. This will reflect the lessons we have learnt through ten years of bringing Wembley Park to life and give the entire Company a tool kit that can be applied to mixed-use developments, whatever their size.

PropertyFormerly, the performance of our built assets was managed through the ‘Our Buildings’ sub-committee. Under our new structure this will be managed through ‘Property’.

There have been a number of changes to the make-up of our portfolio over the year, most notably the sale of our 50% interest in the iQ Property Partnership in May 2014. This resulted in a significant reduction in our absolute Greenhouse Gas (GHG) emissions but, in accordance with our base year recalculation policy, has been removed from our year-on-year comparisons.

Having moved our central London and Wembley Park offices, we are now tenants in multi-let properties where we have less control over our environment. At our new head office in Portman Square, we adopted a sustainable approach to fit-out, which was awarded a RICS SKA for Offices Silver Rating. Although there was little additional cost required, significant additional management time was employed which precluded this option for the subsequent move of our Wembley Park office to Brent Civic Centre, although fit-out was completed to similar specification.

This winter we opened Wembley Park’s first ice rink on the event pad between the Stadium and London Designer Outlet. We created a four week ‘learn to skate’ programme aligned to the sports curriculum for Brent schools, giving pupils the chance to learn in a structured way. Robert Bergerman from Dancing on Ice collaborated with us to create filmed tutorials that pupils could look at before their first session and then teaching was given in three structured sessions to each class. Prior to the programme, 47% of the pupils had never been ice skating before and the impact of the sessions is best summed up by feedback from one of the teachers: “Lesson 1: three children skating. Lesson 3: 27 children skating!” This has been a great way to support education and skills in our immediate community and we’ll be making it a stand-alone offering in 2015.

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Scope 3 Upstream impacts

Purchased goods and services

Capital goods Fuel and energyrelated activities

Transportationand distribution

Waste generatedin operations

Water consumedin operations

Businesstravel

Employeecommuting

Use ofsold products

Tenant wastegeneration

Tenantenergy use

Tenant waterconsumption

Investments

Energy use inleased assets

Scope 3 Downstream impacts

Energy use and fugitiveemissions in controlled areas

Scope 1 and 2 impacts

End of life treatmentof sold products

Applicable and reported on Applicable but not reported on Not applicable

Quintain impacts

RESPONSIBILITY REPORT CONTINUED

Over the year, the London portfolio has increased to eight assets with different performance characteristics. We intend to improve the environmental performance of these properties, which will have an economic benefit for Quintain, and identification of actions and timeframes for implementation will be a key workstream of the 2015/16 financial year.

At Wembley Park, greater activity and animation has led to an increase in energy consumption, a trend that will persist as the development continues to unfold. We are therefore unable to compare most assets on a like-for-like basis. At London Designer Outlet we have incrementally changed the settings on the Building Management System to reduce the operating hours of air handling equipment, reducing energy consumption by 3% as a result. The recent installation of an advanced lighting control programme appears to be saving an additional 7% over the short period this has been in operation. At the Red Car Park, we recently overcame security issues to allow us to close off levels on non-event days, and as a result have seen savings in electricity consumption of around 50% when comparing with the previous week. We expect that in 2015/16, when we have a full year of comparable data, we will have made some significant reductions across both of these supplies.

During 2015/16, we will conduct energy audits of our key assets, to identify additional areas where we can reduce energy consumption, with an initial reduction of 5% against the 2013/14 baseline targeted across the portfolio.

The activity data regarding our Scope 3 emissions has been expanded this year to cover more of our downstream asset consumption. This includes the electricity consumed by the majority of tenants within London Designer Outlet and within York House. This data is being shared with tenants in order to inform them of their environmental impact, an item identified through our tenant survey as being of interest to them.

Water and waste consumption are our biggest environmental impacts after energy, so although not identified as a strategic priority for us at present, this data is included with key performance indicators. These relate to financial performance, as this is the only common metric across all our asset types. Other factors, together with a detailed breakdown of performance by asset, can be found in the data report on our website.

2014/15 was a year of significant progress for Quintain in terms of Responsibility. For the first time, we have substantial transparency into the environmental impact of our activity, a process through which we can identify the relevant Responsibility items that are material to our success and a structure through which most employees can participate in improving the Company’s performance in this area. Having created this strong foundation, we expect to be able to report more clearly defined results as well as improved performance during 2015/16.

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2014*

Scope 1GHG emissions TCO2e/£100,000 Revenue/Year

4.30

7.32

2015 2014*

Water m3/£100,000 Revenue/Year

78.09

127.47

2015 2014*

Waste Tonnes/£100,000 Revenue/Year

2.86

3.33

20152014*

Scope 2GHG emissions TCO2e/£100,000 Revenue/Year

6.63

9.40

2015 2014*

Scope 3GHG emissions TCO2e/£100,000 Revenue/Year

15.5414.93

2015

Key Performance IndicatorsTarget and commitment People Place Property Indicator 2014/15 performance

We will commission tenant and resident satisfaction surveys across all our assets on an annual basis.

Annual satisfaction score

Sampled in one office building:

mean score of 5.9/10

We will adopt the London Benchmarking Group model to measure corporate community contributions, with an increasing focus on measuring outcomes.

Total community investment

Measured outcomes

Total investment: £75,000

97% of pupils who participated

in ‘Learn to Skate’ programme said

they gained a new skill

We will formalise our Community Engagement Strategy for Wembley Park and implement this model across other assets.

Measured outcomes in relation to

strategy

Placemaking strategy proposed: currently

working with partners to finalise

We have set an interim target to maintain our absolute base-year emissions at our 2013/14 recalculated base-year level by the end of 2015/16. It is our intention to set a science-based target once a clear methodology for doing so has been developed.

Reduction in emissions over

baseline

15.7% increase in Scope 1 and 2

emissions over baseline

We will benchmark our performance in social, environmental and governance issues with our peers and wider industry, using recognised frameworks.

Score under recognised

frameworks

Carbon Disclosure Project score of 95C

(2012/13: 10)

We will continue to monitor the satisfaction of our employees, targeting a staff survey participation rate above 90% and 90% of participants saying they would recommend Quintain.

% of employees participating in the

staff survey

% of employees agreeing that they

would recommend Quintain to a friend

seeking employment

97% completed the staff survey

(2013: 93%)

87% would recommend

Quintain as an employer in 2014

(2013: 68%)

*Restated

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Quintain Estates & Development PLC Annual Report 2015

42

RESPONSIBILITY REPORT CONTINUED

Greenhouse gas emissionsThis year we have adjusted our approach to the reporting of greenhouse gases to one of operational control. This reflects the increasing number of assets for which we are financially responsible but have no operational control, and vice versa.

This requires a recalculation of base-year emissions, moving some activities between scopes. Our base-year recalculation policy has been followed to make these adjustments, and those related to the: – sale of Quintain’s 50% share in iQ Property Partnership to the Wellcome Trust

– acquisition of properties within the London Portfolio

The data in the main tables includes all emissions for which we have operational control in 2014/15, and adjusted figures for 2013/14 representing this approach. Adjusted base-year emissions exclude emissions from assets sold during the reporting year,

and either exclude, or include, a full year of emissions for assets acquired in 2014/15 (dependent on available data). Where a full year of data is provided in the numerator, this is also applied to the denominator. KPIs have also been adjusted to reflect this change.

As a result of being responsible for a number of assets for only part of the reporting year, absolute emissions for the Group have reduced significantly compared with 2013/14. However, when adjusting the base year to reflect the above mentioned scenarios, emissions have increased. This is partly as a result of higher emissions factors for 2014/15 compared with 2013/14, particularly for electricity. This can be seen in the base year comparison within the London Portfolio, where the activity data for both years is the same, but emissions for Scopes 2 and 3 are significantly higher. The main contributor to increased activity-related emissions is London Designer Outlet, where 2014/15 includes 12 months of operating data compared with five months in 2013/14.

Scope 12014/15 2013/14

Performance measureConsumption

(unit stated)GHG emissions

(TCO2e)Consumption

(unit stated)GHG emissions

(TCO2e)% change

(consumption)% change (TCO2e)

Gas consumption (kWh) 13,162,615 2,434 17,622,353 3,243 (25.3) (24.9)Quintain – Operations 108,299 20 217,580 40 (50.2) (50.0)Quintain – Wembley Park 11,235,802 2,078 9,706,952 1,786 15.8 16.3Quintain – London Portfolio 66,754 12 n/a n/a n/a n/aiQ Property Partnership 648,641 120 5,905,870 1,087 (89.0) (89.0)Quintain – Other assets 1,103,119 204 1,791,951 330 (38.4) (38.2)Other building fuel consumption (kWh) 450,160 122 n/a n/a n/a n/aQuintain – London Portfolio 450,160 122 n/a n/a n/a n/aVehicle fuel consumption (kWh) 13,700 3 n/a n/a n/a n/aQuintain – Wembley Park 13,700 3 32,034 8 (57.2) (62.5)Fugitive emissions (kg) 21 30 16 13 – –Quintain – Operations 1 0 0 0 – –Quintain – Wembley Park 9 14 7 6 – –Quintain – London Portfolio 6 10 n/a n/a n/a n/aiQ Property Partnership 1 0 5 4 – –Quintain – Other assets 4 6 4 3 – –

Scope 22014/15 2013/14

Performance measureConsumption

(unit stated) GHG emissions

(TCO2e)Consumption

(unit stated)GHG emissions

(TCO2e)% change

(consumption)% change (TCO2e)

Electricity consumption (kWh) 9,016,970 4,456 20,657,114 9,202 (56.3) (51.6)Quintain – Operations 380,937 188 373,528 166 2.0 13.3Quintain – Wembley Park 5,333,653 2,636 4,422,847 1,970 20.6 33.8Quintain – London Portfolio 265,627 131 n/a n/a n/a n/aiQ Property Partnership 1,373,021 679 11,773,442 5,245 (88.3) (87.1)Quintain – Other assets 1,663,732 822 4,087,297 1,821 (59.3) (54.9)Heat consumption (kWh) n/a n/a n/a n/a – –iQ Property Partnership (50%) n/a n/a n/a n/a – –Electricity generation (kWh) 46,500 – 239,247 – (80.6) –Quintain – Wembley Park 865 – 95,720 – (99.1) –iQ Property Partnership 28,169 – 118,511 – (76.2) –Other assets 17,466 – 25,016 – (30.2) –

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Scope 32014/15 2013/14

Performance measureConsumption

(unit stated)GHG emissions

(TCO2e)Consumption

(unit stated)GHG emissions

(TCO2e)% change

(consumption)% change (TCO2e)

Fuel- and energy-related (kWh) 22,193,335 1,455 38,311,502 2,861 -42.1 -49.1Quintain – Operations 489,237 50 591,108 49 -17.2 2.0Quintain – Wembley Park 16,583,201 947 14,161,833 781 17.1 21.3Quintain – London Portfolio 332,382 35 – – – –iQ Property Partnership 2,021,683 188 17,679,313 1,513 -88.6 -87.6Quintain – Other assets 2,766,852 235 5,879,248 518 -52.9 -54.6Water consumption (m3) 95,204 100 264,977 279 -64.1 -64.2Quintain – Operations 2,084 2 2,346 2 -11.2 0.0Quintain – Wembley Park 49,401 52 25,397 27 94.5 92.6Quintain – London Portfolio 11,106 12 – – – –iQ Property Partnership 30,536 32 235,593 248 -87.0 -87.1Quintain – Other assets 2,077 2 1,641 2 26.6 0.0Downstream leased assets (kWh) 14,465,516 7,348 4,148,565 1,569 248.7 368.3Quintain – Wembley Park 12,168,082 6,124 3,597,042 1,452 238.3 321.8Quintain – London Portfolio 1,700,184 1,053 – – – –Quintain – Other assets 597,250 171 551,523 117 8.3 46.2Waste (kg) 1,632 34 893 19 82.8 78.9Quintain – Operations 22 0 51 1 -56.9 -100.0Quintain – Wembley Park 1,433 30 842 18 70.2 66.7Quintain – London Portfolio 177 4 – – – –Business travel (km) 72,899 24 171,397 56 -57.5 -57.1Flights 64,852 23 166,834 55 -61.1 -58.2Taxis 8,047 1 4,563 1 76.4 0.0Use of sold products (kWh) 0 0 8,195,340 954 -100.0 -100.0

Explanatory notesData collection and reporting is in accordance with DEFRA Environmental Reporting Guidelines and GHG Protocol. Our Responsibility Data Report includes a detailed breakdown of performance and is linked to the EPRA Sustainability BPR Guidance (December 2014) and Global Reporting Initiative (GRI) disclosures.

Overall emissions intensity is reported against turnover; which indicates our emissions performance. Additional intensity metrics specific to each asset class are provided in our Responsibility Data Report.

BoundaryAs discussed above, the operational control approach has been applied.

Data qualityIn accordance with the GHG Protocol guidance ‘GHG Protocol guidance on uncertainty assessment in GHG inventories and calculating statistical parameter uncertainty’, the quality of activity and emissions data is measured on a scale from ‘Poor’ to ‘High’, with a percentage of mean uncertainty applied to values in each range.

The resulting confidence levels calculated are:Scope 1: Good +/- 6.2% Scope 2: Fair +/- 25.1%Scope 3: Good +/- 11.4%

Recalculated Base Year EmissionsScope 1 Scope 2 Scope 3

Performance measure 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14

GHG emissions (TCO2e) 2,482 2,386 3,823 3,064 8,968 4,867Quintain – Operations 20 40 246 318 92 148Quintain – Wembley Park 2,073 2,015 2,693 2,032 7,202 3,196Quintain – London Portfolio 179 179 154 139 1,236 1,124Quintain – Other Assets 210 152 730 575 438 399

Base yearOur base year has been recalculated to take into account adjustments to the reporting boundary, the sale of entities and the sale and acquisition of assets. Sold properties are excluded from the 2013/14 base-year and in comparison with this years’ base-year. Properties acquired during the period are dealt with on a case-by-case basis, depending on the data available; the numerator and denominator are equal. For full details, see our Responsibility Data Report.

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Accountable for strategic risk management and ensuring a sound system of internal control and risk management is in place.

Oversight and challenge of the effectiveness of risk management and assurance activities.

Coordination and analysis.

Accountable for Business area risks and risk submissions to their FRF and Risk Management team.

Challenge and review of key business area risks.

Review, challenge and approval of Group risks.

Risk

Man

agem

ent r

epor

ting

and

esca

latio

n

Governance, strategy, oversight and com

munications

Quintain Board

Risk Management team

Operating Director/

Fund Manager/ Head of function/

Business Area

Audit Committee

Group Risk Committee

(GRC)

Functional Risk Forums (FRFs)

RISK MANAGEMENTIn addition to general economic, security and regulatory risks that are part of the general commercial environment and faced by a wide range of companies, we consider there to be a number of financial and non-financial risks specific to our Company. In managing the business, the identification and monitoring of risk is crucial to enable the Group to deliver its strategic objectives.

How we manage riskThe Board has overall responsibility for managing risk and regularly reviews principal risks and uncertainties. The Board has established a Group Risk Committee (‘GRC’) which comprises the Chairman and the executive directors and meets bi-annually. The objective of the GRC is to align our risk management approach under a framework designed to be fully integrated with, and help shape, Quintain’s strategy. Our approach has applied a consistent and robust methodology across the business to identify, assess, manage, mitigate and report risk from the bottom up, establishing clear ownership of risk management. Smaller, dedicated risk committees called Functional Risk Forums (‘FRF’) meet at least bi-annually to consider the key risks aligned to their strategy and objectives.

A risk register is maintained for each FRF: Wembley Park, London Portfolio, WELPUT and Asset Management, Finance and Transactions, Operations and Non-core business (Quercus, Regional). The most significant risks are reported to the GRC. In addition to the ‘bottom up’ operational and financial risks assessed by the Functional Risk Forums, the executive directors assess the ‘top down’ Group-wide strategic risks facing the Group on a regular basis. This approach ensures that all risks are fully considered in determining the risk appetite and strategy of the business.

All risks are recorded in a risk register and assessed for impact (using financial and non-financial measures) and likelihood of occurrence on a gross (before controls), net (after controls) and target basis. The principal risks faced by the Group do not change significantly from year to year. However, changes to the external and internal environment will affect the Group’s response to these risks. Set out on pages 43 to 44 is management’s view of the current specific principal business risks and actions taken in mitigation.

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Description and implication of risk Mitigation

Strategic riskInability to capitalise on market opportunities through difficulty in sourcing investment opportunities at attractive prices or poor investment decisions.

Inappropriate asset concentration and mix may give risk to reduced liquidity and performance.

The Group has an experienced team seeking the right balance of investment and development opportunities. All investment decisions are based on the quality of related sustainable income streams.

The Group carries out a regular review of its portfolio and mitigation includes acquisitions, disposals, development and joint venture partnering.

DevelopmentThe Group is exposed to risks associated with development projects. For example:

– Delays could occur for regulatory or funding reasons.

– Obtaining planning consents.

– Counterparty risk (contractors may become bankrupt or insolvent, or development partners may fail to meet their obligations).

– Control of construction phasing and costs are vital to prevent overspend or delay once on site, which has a direct impact on successfully delivering project plans to meet valuation forecasts.

– Inability to find suitable joint venture partners.

This risk has inherently increased during the year due to the increased activity at Wembley Park. Quintain’s project management team is key to managing development risk by:

– Transferring risk to contractors where possible.

– Active engagement with local authorities to ensure development proposals are in accordance with local policies and statutes.

– Ongoing monitoring of development progress against budget and schedule.

– SupplierPortal was introduced during the year. This is a database to which our suppliers are asked to submit their policies in respect of environment, health and safety, labour, anti-bribery and corruption and IT security. Upon a successful transition through SupplierPortal, each supplier is awarded the status of ‘preferred supplier’, renewable on an annual basis.

– Monitoring the level of committed future capital expenditure on the Group’s development programme relative to the level of debt.

– Well established relationships with financially strong joint venture partners.

ReputationQuintain’s reputation with stakeholders is important in the continued effective operation of the business. Support from the public sector is essential in continuing to achieve detailed planning consents. Upcoming political events may delay and/or impact investment decisions.

Relationships with joint venture partners and other professional organisations are critical to delivery of the business strategy. The negative impact of, for example, a regulatory breach, significant loss in asset value, poorly conceived design and planning or a significant health and safety breach could result in an adverse long-term impact on the Company’s creditability with investors and other key stakeholders.

Ongoing senior management engagement with stakeholders allows greater management of reputational risk. All transactions that could result in a material impact on Quintain’s reputation are reviewed by the Board.

The GRC regularly reviews key risks in each business area. The Board reviews all key projects focusing on the reputational and commercial risks to the Group.

The Group has dedicated Heath and Safety personnel. All of our principal construction designers and contractors are vetted according to the core criteria for competence laid down by the Construction Design and Management (CDM) regulations.

There is no change in the risk status year-on-year.Operational riskInability to deliver robust income growth where income streams are concentrated in either mature assets or assets which are not our core specialism and are reliant on external management and market factors.

Following the Home Office’s recent increase in the international terrorism threat level to severe, the Group has heightened exposure to external events that threaten or disrupt London’s status as a premier destination, in particular Wembley Park.

Experienced and skilled asset managers have been engaged to run the operating assets. Detailed financial information is prepared and profit forecasts are updated and reviewed at least quarterly which include detailed monitoring of letting voids and weighted average unexpired lease terms.

Such events are often beyond our control and are an inherent risk in being focused on London. However, the Group has various security measures in place at Wembley Park and works closely with local authorities to maximise the safety of visitors.

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RISK MANAGEMENT CONTINUED

Description and implication of risk Mitigation

Property valuationsProperty valuations are inherently subjective and uncertain and may result in excessive volatility in the income statement.

We use external independent valuers that are well regarded in the industry and we keep in close contact to understand the factors affecting the movements in valuations. The Company’s external valuers meet with the Audit Committee bi-annually, in advance of the full and half year results, to present their valuation reports.

With respect to the development assets, valuers support their stand back valuation with other metrics including value per acre and value per net developable square foot.

There is no change in the risk status year-on-year.PersonnelThe need to retain and develop our staff and ensure that we recruit high calibre people is essential to the delivery of the business strategy.

Succession and resource planning is regularly reviewed by the Executive Management and Board as appropriate.

Remuneration and benefits are considered competitive, strongly linked to performance and are regularly benchmarked with Quintain’s peers.

A Group-wide bi-annual performance appraisal process focuses on continual personal development and training needs. This process is being enhanced for re-launch later in 2015.

The response to the annual employee survey allows management to understand and address employees’ issues. Regular formal staff meetings and informal events enable staff to talk to senior management, and weekly news updates on business developments and successes allow all employees to understand key activities around the Group.

There is no change in the risk status year-on-year.MarketThe Group’s business is dependent on the macro-economic and property market conditions in London. Deterioration in residential and commercial property markets could lead to a decline in the value of the Group’s property portfolio, tenant default and a reduction in income from these properties. Development land, which makes up 47% of the Group’s gross assets, is subject to greater volatility in valuations compared to income producing assets.

The Group has rebalanced its portfolio and is focused on acquiring good quality assets with strong income and/or development potential.

Each property portfolio is led by an experienced asset management team who are knowledgeable and experienced in mitigating the impact of occupier failures, lease breaks and expiries.

There is no change in the risk status year-on-year.FinancialChanges in the availability of financing and/or costs of borrowing may adversely impact Quintain’s ability to ensure sufficient liquidity is available to deliver the business plan.

This risk has reduced in the year as we have enhanced our financial platform by extending our bilateral banking facilities through extending the bank facilities from March 2016 to the last quarter of 2018 and into 2019. Quintain has strong relationships with the key banks.

The Company prepares detailed cash flow forecasts which show that it has committed undrawn facilities to finance its committed capital expenditure and other outflows, which will enable it to execute its business plan.

Quintain is in the process of enhancing its forecasting skill by the introduction of a new planning tool as the Group’s financial modelling tool that can forecast and test different business scenarios (including prospective transactions), analysing the impact on liquidity and headroom.

Increased interest rates will result in reduced profitability. Hedging policies are in place to reduce interest rate risk and the Bond is at a fixed rate.

Inappropriate capital structure. Further capital for the continued build out of Wembley Park will come from existing debt facilities or asset sales, supported by a clear marketing strategy; and joint venture partnerships, which management continues actively to seek.

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Quintain Estates & Development PLC Annual Report 2015

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MAJOR INVESTMENT PROPERTIES AT 31 MARCH 2015

Area Property description Category Principal tenants/occupier

Wembley Park, London, HA9

London Designer Outlet 280,000 sq ft of retail and leisure units

Retail Cine UKNike Retail BVMarks & Spencer plc

The SSE Arena, Wembley (formerly Wembley Arena) Iconic 1930s building fully renovated as a 21st Century music, sporting and family entertainment venue

Leisure AEG Facilities (UK) Ltd

Wembley Retail Park212,000 sq ft of retail, industrial, office and restaurant units with surface car parking

Retail Wickes Building Supplies LtdHomestyle Operations Ltd

Hilton London Wembley hotel50% interest in a 4-star hotel, comprising 361 bedrooms, sold in May 2015

Hotel Hilton

Multi-storey car park9 storey, 724-space car park located between Wembley Stadium and the London Designer Outlet

Leisure Visitors to London Designer Outlet, Stadium and Arena

York House 14 storey, 106,000 sq ft office building

Offices c.40 tenants, mainly financial services

London, EC4 Aldermary House, Queen Street 62,000 sq ft of office space and retail units

Offices and retail

18 tenants, mainly recruitment, research and financial services

London, E16 West Silvertown 12.5 acre landholding held in joint venture with the Greater London Authority

Land Leased for storage

London, WC1 Kingsbourne House, High Holborn 33,500 sq ft of commercial space with retail units on the ground floor

Offices and retail

Nine tenants, mainly recruitment and media

London, SW19 Collingham House, Wimbledon32,500 sq ft of retail and serviced offices

Retail JD Weatherspoon plc Evans Cycles (UK) Ltd

Birmingham City Park GateLandholding in central Birmingham

Land Excel Parking Services Ltd

London, TW11 Thames House, Teddington19,400 sq ft of offices

Offices Hounslow and Richmond NHS Trust

BOARD APPROVAL OF STRATEGIC REPORT

Our 2015 Strategic report, on pages 2-47, has been reviewed and approved by the Board of Directors on 21 May 2015.

MAXWELL JAMESCHIEF EXECUTIVE

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Governance

BOARD OF DIRECTORS

William Rucker ChairmanChairman of the Nomination Committee and member of the Remuneration Committee.

William joined the Board as a non-executive director and was appointed Chairman of Quintain in October 2009. He is Chief Executive of Lazard London and a member of the Executive Committee, and Chairman of Crest Nicholson Holdings plc. He is a qualified chartered accountant.

Maxwell James Chief ExecutiveMax joined Quintain as an executive director in July 2011 and was appointed Chief Executive in May 2012.

Max was previously Chief Executive of Lowndes Partners LLP, a specialist real estate investment bank which he founded in 2006. Previously, Max was Global Head of Real Estate at HSBC Investment Bank and a Director of Lazard.

Left to right, top row: Peter Dixon, Simon Laffin, Charles Cayzer, Maxwell James, Nigel Kempner Left to right, bottom row: Rosaleen Kerslake, William Rucker, Chris Bell

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Nigel KempnerInvestment DirectorNigel joined Quintain in February 2012 following the acquisition of Grafton Advisors, and was appointed as an executive director in May 2012.

Nigel was previously Chief Executive of Benchmark Group PLC, a publicly quoted company, which was sold to GE Capital in 2004. In 2001, he created the West End of London Property Unit Trust (WELPUT) with Schroders. Nigel is a former Chairman of Westminster Property Owners Association and Reading Real Estate Foundation and was The Master of the Worshipful Company of Paviors for the year to March 2015.

Chris BellSenior Independent DirectorChairman of the Remuneration Committee and a member of the Audit and Nomination Committees.

Chris joined the Board in September 2010. He is currently Chairman of XL Media PLC and TechFinancials Inc, a non-executive director of Spirit Pub Company PLC and a member of the Responsible Gambling Strategy Board. Chris will join the Board of Rank Group Plc as Senior Independent Director and member of the Audit Committee on 1 June 2015. He was Chief Executive of Ladbrokes plc (formerly Hilton plc) until 2010 having originally joined the Board of Hilton in 2000, and formerly Chairman of GAME Group plc.

Charles Cayzer Non-executive directorMember of the Nomination Committee.

Charles joined the Board in January 2010 under the terms of an agreement entered into with Caledonia Investments plc in November 2009. He is a non-executive director of Caledonia Investments plc, Eredene Capital plc and LondonMetric Property Plc. He was formerly responsible for Caledonia’s property portfolio.

Peter DixonNon-executive director Member of the Remuneration and Nomination Committees.

Peter joined the Board in January 2010. He has a broad range of public and private sector experience and is currently chairman of Diabetes UK and of Imperial College Health Partners, a member of the Broads Authority and Chairman of the Pharmaceutical Services Negotiating Committee. He was previously Chairman of the Housing Corporation, the University College London Hospitals NHS Trust, the Office for Public Management Limited and the Barking, Havering and Redbridge Hospitals.

Rosaleen KerslakeNon-executive director Member of the Audit, Remuneration and Nomination Committees.

Ros joined the Board in July 2013. She is Chief Executive of The Prince’s Regeneration Trust, a trustee of the Heritage Alliance and Chair of the Regeneration Leaders’ Network. Previously, Ros was Chief Executive of RegenCo Sandwell, a member of the Thurrock Urban Development Corporation board, Property Director at Network Rail (formerly Railtrack), Director of Business Services at Gulf Oil and Head of Group Services worldwide at Booker Group Plc.

Simon Laffin Non-executive director Chairman of the Audit Committee and a member of the Nomination Committee.

Simon was appointed to the Board in February 2008. He is Chairman of Assura plc and Flybe Group plc. He has previously served as Chairman of Hozelock Group and Mitchells & Butlers plc and as a director of Aegis Group plc and Northern Rock plc (as part of the rescue team). He was previously Group Finance and Property Director of Safeway plc and is a qualified accountant. Simon will retire from the Board following the AGM on 20 July 2015.

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Governance

BOARD GOVERNANCE REPORT

Chairman’s letterAt Quintain, our strategy seeks to deliver long-term, sustainable shareholder value in a responsible manner, through a skilled and committed team. A strong corporate governance framework supports our endeavours to run our business in an honest, transparent and ethical manner, protecting shareholder assets and working in the best interests of all our stakeholders.

As Chairman of the Board, I am responsible for ensuring that the Board has the right balance of skills, knowledge and experience to deliver the Company’s strategy. One of my priorities is to ensure that the Board works effectively as a team, with the non-executive directors providing a good balance of support and constructive challenge to the executive team. To this end, the Board has undertaken an external evaluation during the year, led by our Senior Independent Director, details of which are set out on page 53.

In November, it was announced that Richard Stearn had resigned from the Board with effect from 3 April 2015, to take up the position of Finance Director at his former employer. After seven years as an Independent Non-Executive Director, and latterly as Chairman of the Audit Committee, Simon Laffin has elected to retire at the Annual General Meeting in July and will not stand for re-election. The search for another Independent Non-Executive Director is underway and details of that process are set out on page 54 of this report. Both Simon and Richard have made great contributions to Quintain since 2008 and 2012 respectively and on behalf of the Board I would like to extend our thanks and wish them well for the future.

Simon Carter, former Head of Strategy and a member of the Executive Committee at British Land, will join the Board as Finance Director on 26 May 2015.

In the following pages we explain our approach to corporate governance and describe how our business is organised and managed. Each Committee Chairman has reported on Committee activities undertaken during the year.

WILLIAM RUCKERCHAIRMAN21 MAY 2015

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Compliance with the UK Corporate Governance CodeIt is the Board’s view that the Company has complied with the provisions of the UK Corporate Governance Code throughout the reporting period. Quintain has not been a member of the FTSE 350 Index during the year and therefore is not required to comply with all provisions of the Code, however, it aspires to membership and seeks to comply with best corporate governance standards.

The Board of DirectorsLeadership and responsibilityThe Board is responsible for promoting the long-term success of the Company. Through sound leadership the Board seeks to promote a culture of openness and innovation, relying upon a framework of corporate governance and internal controls which are designed to protect the Company’s assets. The day-to-day management of the business is delegated to the executive directors, apart from matters reserved for the Board’s decision. Matters requiring Board approval are set out in a schedule of reserved powers.

The Board delegates some of its duties and powers to Committees, each of which has written terms of reference, available on the Company’s website. The current framework of Board and Executive Committees is set out below.

Membership of Committees during the year to 31 March 2015 and individual attendance is set out in the table on page 52.

Board composition and independence The Board currently has eight members: a non-executive Chairman, five other non-executive directors and two executive directors, with a third joining the Board on 26 May 2015. The names of the current directors and biographical details are set out on pages 48 and 49. The Board believes that it has an appropriate number of members with sufficiently diverse backgrounds and a good balance of experience and skills to discharge its responsibilities effectively. The Nomination Committee keeps Board and Committee membership under review and is satisfied that all directors have sufficient time to devote to their roles.

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Board

Chairman and non-executive directors

Remuneration Committee

Nomination Committee

Audit Committee

Group Risk Committee

Executive directors

Executive Committee

Investment Committee

Responsibility Committee

Operational Boards

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The role of the Chairman and Chief Executive are separate and clearly defined. Chris Bell is the Senior Independent Director. Details of non-executive directors’ terms of appointment are set out in the Remuneration Report on page 68. The tenure of non-executive directors at the date of the AGM will be as set out below.

Name Position Appointment date Tenure (years)

William Rucker ChairmanNomination Committee ChairmanRemuneration Committee Member

1 October 2009 5

Chris Bell Senior Independent DirectorRemuneration Committee ChairmanAudit Committee Member

17 September 2010 4

Charles Cayzer Non-executive director 1 January 2010 5Peter Dixon Non-executive director

Remuneration Committee Member1 January 2010 5

Ros Kerslake Non-executive directorAudit Committee and Remuneration Committee Member

1 July 2013 2

Simon Laffin Non-executive directorAudit Committee Chairman

1 February 2008 7

All non-executive directors are members of the Nomination Committee.

The Board considers that all non-executive directors are independent. Charles Cayzer joined the Board in 2010 under the terms of an agreement entered into with Caledonia Investments Plc, which entitled Caledonia to appoint a non-executive director whilst it held shares in the Company representing 10% or more of the voting rights. Caledonia’s interest in Quintain shares has fallen below 5% and it has been confirmed that Charles’ appointment is no longer subject to the aforementioned agreement. The Board has agreed that Charles continues to act as an effective, independently minded member of the Board and his independence is not compromised by his position as a non-executive director of Caledonia. The Board is also satisfied that there are procedures in place at Caledonia to manage and address any potential conflict.

Board and Committee meetingsThere were six scheduled Board meetings, four Nomination Committee meetings, five Audit Committee meetings and five Remuneration Committee meetings during the year, with directors attending as follows:

Board meetings

Nomination Committee

meetings

Audit Committee

meetings

Remuneration Committee

meetings

William Rucker 6 4 – 5Chris Bell 6 4 5 5Charles Cayzer 6 4 – –Peter Dixon 6 – – 5Maxwell James 6 – – –Nigel Kempner 6 – – –Rosaleen Kerslake 6 3* 5 3*

Simon Laffin 6 4 5 –Richard Stearn 6 – – –

* Rosaleen Kerslake became a member of the Remuneration Committee on 23 May 2014 and attended three out of four scheduled meetings. Unscheduled meetings of the Remuneration and Nomination Committees were held in January 2015 to consider the appointment and remuneration of the new Finance Director; Ms Kerslake was unable to attend the meetings owing to a prior commitment but received and commented on the proposals in advance.

The Board received regular updates from the Chief Executive, Investment Director and Finance Director on the operational and financial performance of the business and presentations on the performance of key assets and business areas. The Board also received briefings on corporate governance, regulatory and market developments at each meeting during the year.

BOARD GOVERNANCE REPORT CONTINUED

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Board evaluation and performanceThe Board continually seeks to ensure that it provides appropriate leadership and direction to the Company through its own performance evaluation, succession planning and annual re-election of directors by shareholders.

In view of the forthcoming changes to Board membership in 2015 and in line with best practice, the Board considered it appropriate to undertake an external evaluation, led by the Senior Independent Director. The evaluation was facilitated by People Business, an HR consultancy firm which has also advised Quintain on performance management processes. The scope and objectives of the evaluation were agreed with the Senior Independent Director.

The findings confirmed that the Board has an effective governance structure and improvements in line with previous reviews were noted in relation to both Board and Committee meetings and papers. Recommendations from the evaluation will be considered and implemented by the Board.

The Chairman’s performance was considered by the non-executive directors without the Chairman present.

Protection and support available to the directorsThe Company has shareholder authority to indemnify directors of the Company against claims by third parties and to pay the cost of defending such claims in advance of a claim being decided, subject to such funds being required to be repaid where a director is convicted or judgement given against him or her. As at the date of this report, an indemnity is in place for each of the Company’s directors.

All directors have access to the advice and services of the Company Secretary and, if required, to independent advice.

Conflicts of interestIn accordance with the Companies Act 2006, the Company’s Articles of Association allow the Board to authorise potential conflicts of interest that may arise and to impose such limits and conditions as it thinks fit. The Company’s Conflicts of Interest Policy was updated during the year and potential conflicts of interest were reviewed by the Board. All directors are aware of the need to declare conflicts of interest and seek approval prior to any commitment being entered into.

Communication with shareholdersThe Board maintains communications with shareholders through an active investor relations programme. The executive directors attend meetings with major shareholders throughout the year and give presentations to investors and analysts following the annual and interim results, which are also available by webcast. In addition, briefings are held at least annually for private investors to meet Board members and receive updates on the Company’s performance. The Chairman and Senior Independent Director are available to meet with shareholders on request and all directors are available at the AGM to meet shareholders on an informal basis.

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Governance

NOMINATION COMMITTEE REPORT

Committee membership and activitiesAll non-executive directors are members of the Nomination Committee, which is chaired by the Chairman. The Company Secretary is secretary to the Committee and is available to advise and assist members of the Committee as required.

The Committee met four times during the year to consider:

– the evaluation of the Board’s performance; – succession planning; – the diversity of skills and experience required on the Board and its Committees;

– the appointment of a new executive Finance Director; – the search for a new non-executive director; and – the independence of the non-executive directors.

Director’s recruitment Following the announcement that Richard Stearn would be leaving the Board in April 2015, Odgers Berndtson was appointed to assist the Board in the search for a new Finance Director. Odgers prepared a long list of suitable candidates from a range of backgrounds, based upon an agreed job description. The Chairman, Senior Independent Director and Chairman of the Audit Committee reviewed the long list and interviewed a short list of candidates selected on the basis of their skills and experience. The preferred candidate was proposed to the Nomination Committee, which unanimously recommended the appointment of Simon Carter as Finance Director. Simon joins Quintain from British Land, where he has gained excellent experience across several senior financial roles including Head of Treasury and Capital Markets and Corporate Finance Executive.

Simon Laffin will retire from the Board at the Annual General Meeting (AGM) on 20 July 2015 and will not stand for re-election. The Nomination Committee, led by the Chairman, has considered the capabilities and experience required from a new independent non-executive director, including the relevant financial experience required to Chair the Audit Committee. The specialist search firm Zygos LLP has been instructed to assist the Committee in the search. Details of the appointment and membership of the Audit Committee will be announced this summer.

A tailored induction programme will be delivered on appointment, including a comprehensive briefing pack and meetings with executive and operational directors, the Company Secretary, internal and external auditors and valuers.

Board diversityQuintain recognises the benefit of employing people from a wide range of backgrounds and diverse experience at all levels of the Company. The Company will continue to appoint and promote people on merit and in line with the skills and attributes identified for each role.

Yours faithfully

WILLIAM RUCKERCHAIRMAN21 MAY 2015

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Annual StatementDear shareholderI am pleased to report on the Remuneration Committee’s activities during the year and introduce the Directors’ Remuneration Report.

Committee activitiesThe Committee’s priority is to implement a remuneration policy that effectively motivates and rewards our executive directors and employees, and is strongly linked to the delivery of Quintain’s business strategy.

Salary reviewsThe Committee is recommending an increase of 2.5% in base salaries for the Chief Executive and Investment Director, in line with the Group average pay award of 3.38% for 2015 and the Company’s Remuneration Policy of paying up to median salaries compared with its comparator groups.

Bonus awards At the beginning of the financial year, the Committee set stretching operational and financial performance targets for the executive directors. During the year, we have seen strengthening asset performance across the portfolio and accelerated development at Wembley Park, evidenced by improved investment income and continued growth in asset and land values. In addition, the Committee took into consideration each director’s personal contribution to the Company’s performance and is therefore recommending a bonus award of 150% of salary for the Chief Executive and 210% for the Investment Director (50% and 70% of the maximum potential of 300% of salary respectively) under the Quintain Incentive Plan. Details of the level of satisfaction of the performance targets for 2014/15 are set out on page 59.

Director’s recruitmentThe Committee approved the remuneration package and incentive buy-out arrangements which enabled the Company to recruit our new Finance Director, Simon Carter. The arrangements detailed on page 63 accord with the recruitment terms under our Remuneration Policy.

Changes to PolicyLast year our Remuneration Policy received approval from over 98% of voting shareholders and there are no changes proposed to the policy for approval at the 2015 AGM.

Governance

DIRECTORS’ REMUNERATION REPORT

CHRIS BELLCHAIRMAN OF THE REMUNERATION COMMITTEE

In 2013, when consulting on the design of the current Quintain Incentive Plan, I committed to shareholders that I would revert back to them after three years of the Plan’s operation to consult on the appropriate incentive arrangements and policy for the next stage of the Company’s development. I, therefore, intend to consult with shareholders and the main shareholder representative bodies over the spring and summer of 2015 with the intention of putting a revised Policy to a shareholder vote as soon as practical following the completion of this exercise.

Attendance at AGMAs in previous years, I will be present at the Annual General Meeting to answer any questions you may have in relation to this report; in the meantime, I trust that you find it informative.

CHRIS BELLCHAIRMAN OF THE REMUNERATION COMMITTEE21 MAY 2015

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At a glanceIn this section, we summarise the purpose of our remuneration policy, its linkage to our corporate strategic objectives and we highlight the performance and remuneration outcomes for 2014/15. More detail can be found in the Directors’ Annual Report on Remuneration.

Summary of Remuneration PolicyIn 2014 the Company’s Remuneration Policy was approved by shareholders at the AGM on 21 July 2014. Details of the vote are set out on page 57. The Remuneration Policy is available on the Company’s website. No changes to this Policy are proposed in 2015, so there is no requirement to put forward the Policy to shareholders for approval this year, the statutory requirement being that the Policy should be approved by shareholders once every three years. The only remuneration item to be considered at the 2015 AGM is an advisory vote on the Directors’ Annual Report on Remuneration.

Principles of Remuneration CompetitiveTo offer market competitive reward packages to recruit and retain directors with the skills and experience to design and implement the Company’s strategy. Fixed elements of remuneration are at or below market median with a significant incentive package to reward strong performance.

FlexibleThe remuneration package must be flexible enough to deal with the: – implementation of transformational change in the business strategy and model over the next period; – use of a wide range of quantitative and qualitative Key Performance Indicators which will be set annually to take into account the pace and direction of the transformation.

Shareholder alignmentTwo thirds of the incentive package capable of being earned is provided in shares; with 50% of those shares locked-in for five years from the date of award.

Comparator Groups Sector Comparator GroupFTSE All-Share Real Estate Investment & Services and Real Estate Investment Trust sectors.

This Comparator Group has been chosen by the Committee as the main group to establish whether the Company is competitive in relation to those companies which operate in the same sector and face similar business challenges.

Market Cap Comparator GroupThe Market Cap Comparator Group consists of FTSE All-Share companies in the industrial and service sectors with a similar market capitalisation (ranging from £300m – £1bn). This peer group has been chosen by the Committee to provide the Company with a control group to give insight into the remuneration structures and benchmarking of comparable size companies to provide a broader market perspective.

These groups are used for all reward benchmarking purposes.

The Committee has within the Policy the discretion to amend these groups and any changes will be set out in the section of the report dealing with the implementation of remuneration policy for the following year. No changes have been made in 2014/15 and none are proposed for 2015/16.

Policy positioningWhere the Policy makes reference to a quartile, this is the quartile in the Real Estate Sector Comparator Group.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Shareholder support for the Remuneration Policy The table below shows the voting outcome at the 2014 Annual General Meeting for the approval of the Remuneration Policy and the implementation of the Policy set out in the Annual Report on Remuneration:

ResolutionVotes

forAs % of

votes castVotes

againstAs a % of votes cast

Votes withheld

Remuneration Policy 401,092,126 98.77 5,012,906 1.23 1,086,186Annual Report on Remuneration 359,898,140 91.11 35,116,709 8.89 12,176,369

The Committee views this level of support from shareholders as a positive endorsement of the Remuneration Policy and its operation.

Operation of Remuneration Policy The following table summarises the operation of the Policy in 2014/15 and how it will be operated in 2015/16:

Element

Salary Policy: Up to MedianWhen determining the appropriate level of remuneration, the Committee considers:

– the remuneration practices within the Company as a whole, and

– where relevant, remuneration levels in the Company’s Comparator Groups.

It should be noted that, as is currently the case, the results of benchmarking will only be one of many factors taken into account by the Remuneration Committee, other factors include:

– the experience and background of the relevant executive;

– the individual performance of the relevant executive;

– the general pay and conditions within the Company;

– the scale and requirements of the role;

– the stability of the corporate platform;

– the economic environment;

– performance of the Company and affordability; and

– institutional shareholder attitudes to material changes in the quantum of remuneration.2014/15 2015/16

The following table sets out the salaries paid for 2014/15:

NameSalary

2014/15

Maxwell James (Chief Executive) £408,330Nigel Kempner (Investment Director) £304,000Richard Stearn1 (Finance Director) £261,750

1 It should be noted that Richard Stearn ceased employment on 3 April 2015 and was employed for the whole of the financial year.

2 Simon Carter commences employment on 26 May 2015 and his salary is shown pro-rata.

The proposed salaries for 2015/16 are:

NameSalary

2015/16

Maxwell James (Chief Executive) £418,538Nigel Kempner (Investment Director) £311,600Simon Carter2 (Finance Director) £226,091

The average salary rise for employees on a like-for-like basis was 3.38%.

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Element

Benefits & Pension Policy: MedianBenefitsExecutive directors are entitled to receive a benefits package which includes:

– private medical insurance;

– life assurance; and

– income protection insurance.

PensionThe executive directors are entitled to receive payments into the Group defined contribution pension plan or payments in lieu of pension contributions up to a maximum of 18% of salary.2014/15 2015/16

18% pension contribution. No change.Element

Incentives provided under Quintain Estates and Development PLC (‘Quintain’) Incentive PlanPolicy: Median to Upper QuartileSee page 59 for details of the performance targets for 2014/15 and their level of satisfaction.

See page 60 for the types of performance condition and their weighting for the operation of the Plan in 2015/16.

The Remuneration Committee is of the opinion that given the commercial sensitivity arising in relation to the detailed financial, operational and strategic targets used for the Quintain Incentive Plan, disclosing precise targets for the Plan in advance would not be in shareholders’ interests. Actual targets, performance achieved and awards made will be published at the end of the performance periods so that shareholders can fully assess the basis for any pay-outs under the Quintain Incentive Plan.Element

Minimum Shareholding Requirements Minimum shareholding requirement for executive directors is 250% of salary.

No change.

Non-executive Fees Policy: Median

The following table sets out the fees paid to the non-executive directors for 2014/15:

No change.

NameFees

2014/15

William Rucker (Chairman) £180,000Chris Bell (Senior Independent Director, Remuneration Committee Chairman) £54,000Rosaleen Kerslake £45,000Simon Laffin (Audit Committee Chairman) £54,000Charles Cayzer £45,000Peter Dixon £45,000

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Link between strategic objectives and Executive Incentives Our strategic priorities, related key performance indicators (set out on page 15 of the Strategic Report) and the direct links to directors’ incentive arrangements are set out in the table below:

Strategic Priorities Profitability & Financial Strength Operational PerformanceCreate long-term value from the Company’s property Portfolio

Maximise Total Shareholder Return

KPI Adjusted Profit and Gearing

Wembley Park and London Portfolio operational delivery

Net Asset Value per share Total Shareholder Return

Quintain Incentive Plan performance conditions (details below)

Performance against corporate objectives (audited)The following table sets out the performance objectives targeted by the Quintain Incentive Plan and how the Company has performed against these metrics in respect of 2014/15:

Target

Percentage of maximum contribution

2014/15 Objective TargetThreshold

performanceTarget

performanceMaximum

performance Actual

Percentage of maximum achieved by

Chief Executive

Percentage of maximum achieved by Investment

DirectorChief

ExecutiveInvestment

Director

Operational 35% 0% Wembley Park – – 25% 0%• Successful execution of Emerald

Gardens sales• Progress detailed planning for

next residential development• Successful completion of LDO

leasing programme

10% 65%London Portfolio and non-core assets – – 5% 55%• Identify a clear strategy to

enhance value of existing London Portfolio assets

• Meet acquisition objectives for new London investment, subject to set criteria

• WELPUT returns exceed IPD index to deliver performance fee1

• Maximise performance of non-core portfolio

5% 5% People – 5% 5%• Recruit appropriately into

key positions to ensure the right resources are in place to deliver strategy

Profitability and financial strength

40% 20% • Grow adjusted profit before tax2

£6.0m £6.3m £7.2m £6.2m

• Re-size facilities following transactions executed in 2013/14, extending maturities on attractive terms

– 10% 5%

Directors’ personal objectives

10% 10% • Deliver strong individual performance against specific targets

– – 5% 5%

TOTAL 100% 100% 50% 70%Percentage of salary awarded out of 300% maximum 150% 210%

1 The Committee was satisfied that the performance of WELPUT was on target, albeit that the performance fee was not triggered due to a restructuring of the fund.2 Profit before tax has been measured against the 2014/15 budget of £6.0m, rather than growth compared to the prior year, representing a more challenging target.

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Quintain Incentive Plan Performance Conditions for 2015/16The following table sets out the type of performance condition for the 2015/16 operation of the Quintain Incentive Plan.

Objective Weighting 2015/16 targets

Financial 50% • Grow net asset value and adjusted profit before tax in line with targetsOperational 30% • Implementation of Wembley Park business plan (including investment assets,

estate management, residential development and sales)• Successful launch of private rental investment platform• Achievement of planning targets• Establishment and management of joint ventures• Management of London portfolio (including WELPUT) to business plan• Maximise value of non-core assets

Personal 20% • Enhance market profile and reputation of Quintain• Undertake medium-term objectives to enhance Quintain’s position in the market• Optimise management structure, people development• Enhance Quintain’s profile as an employer, to attract and retain high calibre employees

Directors’ earnings in 2014/15The following tables set out the single figure for directors’ earnings in respect of 2014/15, calculated in accordance with the regulations, and compared to the Policy remuneration scenarios for 2014/15.

Total

Executive Director 2014/15 2013/14

Maxwell James (Chief Executive) £1,194,439 £1,431,413Nigel Kempner (Investment Director) £1,026,719 £1,033,952Richard Stearn* (Finance Director) £314,529 £894,385

* Richard Stearn ceased employment on 3 April 2015.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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£2,000,000

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

£1,400,000

£1,600,000

£1,800,000

Minimum On-target Maximum

Fixed elements

£488,188

£1,100,683

£1,713,178

CEO

Annual variable element Multiple reporting period elements

44% 28%

48%

24%

37%

19%

100% 41%

34%

25%

Actual

£1,194,439

£2,000,000

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

£1,400,000

£1,600,000

£1,800,000

Minimum On-target Maximum

Fixed elements

£314,529

£707,154

£1,099,779

Finance Director

Annual variable element Multiple reporting period elements

44% 29%

48%

24%

37%

19%

100%

£314,529

£143,963

Actual

100%

£2,000,000

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

£1,400,000

£1,600,000

£1,800,000

Minimum On-target Maximum

Fixed elements

£389,953

£845,953

£1,301,953

Investment Director

Annual variable element Multiple reporting period elements

46% 30%

47%

23%

36%

18%

100%

Actual

£1,026,719

38%

42%

20%

Notes on charts:The Policy remuneration that could be payable to each of the executive directors is based on salaries at the start of 2014/15, under three different performance scenarios: (i) Minimum; (ii) Target; and (iii) Maximum. The elements of remuneration have been categorised into three components: (i) Fixed; (ii) Annual Variable Element; and (iii) Multi Reporting Period Elements. In addition, for the purposes of comparison we have included the actual single figure remuneration paid in 2014/15.

Element Minimum On-Target Maximum

Salary 2014/15 Base salary 2014/15 Base salary 2014/15 Base salary

Pension benefits Value of pension allowance/contribution and benefits paid 2014/15

Value of pension allowance/contribution and benefits paid 2014/15

Value of pension allowance/contribution and benefits paid 2014/15

Annual Variable Element Quintain Incentive Plan (maximum 200%)

0% 50% of maximum entitlement 100% of maximum entitlement

Multiple Reporting Period Quintain Incentive Plan (maximum 100%)

0% 50% of maximum entitlement 100% of maximum entitlement

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DIRECTORS’ REMUNERATION REPORT CONTINUED

Shares and rights to shares held by the directors (audited)The following table shows the Company’s minimum shareholding requirement for its executive directors, the current level of their shareholdings and the share interests that they hold. In addition, it sets out the shareholdings of our non-executive directors:

Quintain Incentive Plan Long-Term Incentive Plan 2011

Name

Number of shares owned outright as at

31 March 20151

Conditional shares not subject to

performanceconditions2

Deferred shares under

Element A

Unvested awards under

Element B

Vested awards under

Element BUnvested

options

Unvested performance

shares

Total number of shares or

interests in shares

Maxwell James 39,613 2,582 520,034 1,096,967 – – 120,000 1,779,196Nigel Kempner 1,016,881 2,609 438,472 845,283 – – – 2,303,245Richard Stearn3 22,532 – – – – – – 22,532William Rucker 466,775 – – – – – – 466,775Chris Bell – – – – – – – –Charles Cayzer – – – – – – – –Peter Dixon 20,000 – – – – – – 20,000Rosaleen Kerslake 10,730 – – – – – – 10,730Simon Laffin 82,660 – – – – – – 82,660

1 Includes shares held by connected persons and Partnership Shares held under the SIP Trust. 2 Matching shares held under the SIP Trust. 3 Richard Stearn ceased to be a director of the Company on 3 April 2015 at which point all outstanding awards under the Quintain Incentive Plan lapsed and the

SIP Matching Shares were forfeit under the rules of the Plans.

Executive directors are required to build up a holding in Company shares, including vested shares under Element B of the Quintain Incentive Plan, to the value of 250% of base salary. At 31 March 2015, the shareholding guidelines had not been met by the Chief Executive and Investment Director, however, the Committee is satisfied that they are on track to meet the shareholding guidelines within five years of the first award under the Quintain Incentive Plan as illustrated below. There are no shareholding guidelines for non-executive directors.

100% 200% 300% 400% 500% 600% 700%

Sim

on C

arte

r(%

of s

alar

y)

250%

15%

250%

627%

0%

Value of/gain of interests over shares (ie unvested/unexercised awards)

Shareholding requirement

Value of beneficially owned shares

Value of/gain of interests over shares (ie unvested/unexercised awards)

Shareholding requirement

Value of beneficially owned shares

Nig

el K

empn

er(%

of s

alar

y)

Value of/gain of interests over shares (ie unvested/unexercised awards)

Shareholding requirement

Value of beneficially owned shares

Max

wel

l Jam

es(%

of s

alar

y)

0%

0%

250%

236%

297%

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Changes to the Executive Team DeparturesRichard Stearn resigned in October 2014, served his full six month notice, ceasing employment on 3 April 2015, and was paid up to that date. No termination payment was made. All outstanding awards under the Quintain Incentive Plan lapsed on his cessation of employment.

New JoinersSimon Carter is due to join the Board as the Company’s Finance Director on 26 May 2015. The terms of his remuneration package, cross referenced to the Company’s shareholder approved Recruitment Policy set out on the Company website and pages 57 and 58 are shown below:

Remuneration element Policy on recruitment Remuneration Package of Simon Carter Policy

Notice period In line with the policy for current executive directors.

Six months In line with Policy.

Base salary and benefits

In line with policy for existing executive directors.

£265,000 Standard benefits

In line with Policy.

Pension Maximum pension contributions will be set in line with the Company’s policy for existing executive directors.

18% Company contribution. In line with Policy.

Quintain Incentive Plan

The maximum annual contribution will be set in line with the Company’s policy for executive directors and cannot exceed 300% of salary per annum.

300% of salary pa In line with Policy.

Share buy-outs/ replacement awards

Where the Committee determines to provide a buy-out it will determine the value of any incentives that will be forfeited on cessation of a director’s previous employment. The Committee may then grant up to the equivalent value as the lapsed value, where possible, under the Quintain Incentive Plan. To the extent that it is not possible or practical to provide the buyout within the terms of the Company’s Plan, a bespoke arrangement will be used.

The maximum value of the cash buy-out bonus payable on joining the Company is £220,000. The bonus payable is subject to:

– reduction for any bonus provided by the executive’s former employer for the same period, and

– repayment of 50% of the cash bonus if Mr Carter resigns within six months of commencement.

The maximum value of the shares subject to the buy-out award is £946,000. Shares awarded will vest subject to continued employment as follows:

– 45% on 14 September 2015 (‘Tranche 1’); – 27.5% on the first anniversary of the commencement of the executive’s employment with the Company (‘Tranche 2’); and

– 27.5% on the second anniversary of his commencement of employment.

Tranche 1 is based on an assumed level of performance in respect of an award which is being bought out. The actual value of Tranche 1 will be reduced if the assumed level of performance is not achieved by the Executive’s former employer.

Full details including shares awarded will be provided in the 2015/16 Report & Accounts.

In line with Policy.

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Remuneration Committee membership and activitiesThe Committee members throughout the year have been Chris Bell (Chairman), William Rucker, Peter Dixon and Ros Kerslake. The Chief Executive and Finance Director were asked to attend meetings to assist with the review of remuneration and assessment of performance targets during the year. No director takes part in any consideration of his own remuneration.

The Committee’s terms of reference are on the Company website.

Committee activities During the year to 31 March 2015, the Committee:

– reviewed the policy for executive remuneration and agreed to consult investors during 2015 on a replacement for the Quintain Incentive Plan;

– reviewed the structure of individual directors’ remuneration packages;

– recommended changes in salaries of executive directors (and for staff earning £150,000 pa or over) having regard to the Company’s remuneration policy and objectives, the pay review for all employees and independent analysis;

– set and measured performance targets for executive awards under the Quintain Incentive Plan;

– approved a new remuneration package and buy-out arrangements for the new Finance Director, and

– agreed severance payments for directors and senior employees within its remit.

Committee advisersPwC was appointed by the Remuneration Committee in 2013. PwC’s performance is evaluated by the Remuneration Committee at least once a year. The Committee is satisfied that the advice from PwC is independent based on the separation of the team advising the Committee from any other work done by PwC and the fact that PwC is a signatory to the Remuneration Advisers Code of Conduct. PwC also provided risk assurance services. The fees paid to PwC for remuneration advice during 2014/15 were on a project fee basis and amounted to £55,000.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Impact of the new UK Corporate Governance CodeThe Committee is comfortable that its Policy is in line with the new UK Corporate Governance Code (applying for financial years beginning on or after 1 October 2014). The following table sets out the key elements of the revised Code and how the Company’s remuneration policy for executive directors is in line with the Governance Code:

Code Provision Company Remuneration Policy

Executive directors’ remuneration should be designed to promote the long-term success of the Company.

The Quintain Incentive Plan contains two Elements:

– Element A provides a rolling deferral in shares and an ongoing performance based risk adjustment;

– Shares earned under Element B cannot be sold for five years from the date of award.

It is the Committee’s view that the Quintain Incentive Plan provides a holistic approach to ensuring executive directors are focused on the long-term success of the Company.

Incentive Schemes should include provisions that would enable the Company to recover sums paid or withhold the payment of any sum, and specify the circumstances in which it would be appropriate to do so.

The Quintain Incentive Plan includes best practice malus and clawback provisions. The circumstances in which malus and clawback could apply are as follows:

– discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company;

– the assessment of any performance target or condition in respect of an award was based on error, or inaccurate or misleading information;

– the discovery that any information used to determine the number of shares subject to an award was based on error, or inaccurate or misleading information;

– action or conduct of an award holder which, in the reasonable opinion of the Board, amounts to employee misbehaviour, fraud or gross misconduct;

– events or behaviour of an award holder which have led to the censure of the Company by a regulatory authority or have had a significant detrimental impact on the reputation of any Group company provided that the Board is satisfied that the relevant award holder was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to him.

Malus will apply up to the date of the determination of the award and clawback will apply for three years from the date of payment and the vesting of awards.

The Committee believes that the rules of the Plan provide sufficient powers to enforce malus and clawback if required.

For share-based remuneration, the Remuneration Committee should consider requiring directors to hold a minimum number of shares and to hold shares for a further period after vesting or exercise, including for a period after leaving the Company, subject to the need to finance any costs of acquisition and associated tax liabilities.

The policy contains the following relevant features:

– minimum shareholding requirement of 250% of salary for executive directors; – five year period from award to sale for Element B of the Quintain Incentive Plan which continues to apply following cessation of employment.

The Committee, therefore, believes that its Policy is in line with best practice.

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DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report on Remuneration This report covers the year to 31 March 2015 and has been prepared in accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the ‘Regulations’) and the Listing Rules. KPMG LLP has audited the complete report to the extent required by the Regulations.

Single total figure of remuneration for directors (audited)

NameSalary (£)/fees

Note 1Benefits (£)

Note 2 Bonus (£) LTIP (£) Pension (£)Other (£)

Note 7 Total (£)

2014/15 2013/14 2014/15 2013/142014/15 Note 3

2013/14 Note 4

2014/15 Note 5

2013/14 Note 6 2014/15 2013/14 2014/15 2013/14 2014/15 2013/14

Executive MDS James 408,330 390,000 6,642 7,952 410,033 699,279 294,548 274,892 73,216 58,350 1,670 940 1,194,439 1,431,413NJ Kempner 304,000 275,000 31,521 29,997 427,375 493,081 207,694 193,834 54,432 41,100 1,697 940 1,026,719 1,033,952RJ Stearn 261,750 250,000 5,608 6,472 – 448,255 – 151,543 47,171 37,175 – 940 314,529 894,385Non-executive WJ Rucker 180,000 180,000 – – – – – – – – – – 180,000 180,000C Bell 54,000 54,000 – – – – – – – – – – 54,000 54,000CW Cayzer 45,000 45,000 – – – – – – – – – – 45,000 45,000PJB Dixon 45,000 45,000 – – – – – – – – – – 45,000 45,000RC Kerslake 45,000 33,750 – – – – – – – – – – 45,000 33,750ST Laffin 54,000 54,000 – – – – – – – – – – 54,000 54,000MR Meech – 14,897 – – – – – – – – – – – 14,897

Notes:1 Fees include payments of £54,000 (2013/14: £54,000) to Simon Laffin Business Services Limited on behalf of Simon Laffin.2 The value of benefits includes the provision of private medical insurance, income protection and life assurance.3 The amount relates to the following: a. 50% of the Company contribution to the Quintain Incentive Plan under Element A earned in respect of year ended 31 March 2015. The remaining 50% in respect

of this year is deferred into shares in the participant’s Plan account and must be held for a further holding period. This deferred balance is subject to performance-based forfeiture and will be disclosed in the LTIP column when this risk is removed.

b. the value of the proposed Element B Quintain Incentive Plan award to be granted in May 2015 (see page 67). Despite the fact that this is a share award vesting on the third anniversary of grant and the shares only being eligible for sale on the fifth anniversary of grant, the remuneration reporting regulations require the value of this award to be categorised as a bonus. The basis for this categorisation is that there are no further performance conditions to be satisfied after year ended 31 March 2015, the year to which these awards relate. These awards have been valued using the average share price for the three months ended 31 March 2015 of £0.967, in accordance with the remuneration reporting regulations.

4 The amount relates to the following: a. the value of the Element B Quintain Incentive Plan award granted on 23 May 2014 at a share price of £1.0189; b. 50% of the Company contribution to the Plan under Element A earned in respect of the year ended 31 March 2014.5 This is the payment under Element A of the Quintain Incentive Plan in respect of year ended 31 March 2015 of deferred elements no longer subject to a risk

of forfeiture. 6 This is the payment under Element A of the Quintain Incentive Plan in respect of year ended 31 March 2014 of deferred elements no longer subject to a risk

of forfeiture.7 The value of matching shares granted under the Share Incentive Plan, valued using the average share price for the three months ended 31 March 2015 of £0.967.

£1,200,000

£0

£200,000

£400,000

£600,000

£800,000

£1,000,000

CEO FinancialDirector

Salary

£1,194,439

£314,529

Single Figure Graph

Pension contribution Benefits

Quintain Incentive Plan Annual Quintain Incentive Plan (Multiple Reporting Periods)

£408,330

InvestmentDirector

£1,026,719

£73,216

£410,033

£294,440

£6,642

£261,750

£47,171£5,608

£304,000

£54,432

£427,375

£207,694

£31,521

The graph above excludes ‘other’ remuneration.

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Additional notes to the single figure table (audited)Quintain Incentive PlanThis section of the report sets out:

– the performance conditions set by the Committee for the 2014/15 operation of the Plan, the targets set and level of satisfaction; – the amount of the Company contribution to the Plan accounts of the executive directors in respect of the year ended 31 March 2015; and

– a summary of the Plan accounts of the executive directors as at 31 March 2015.

Performance in respect of the year ended 31 March 2015See page 59 for the Quintain Incentive Plan performance targets and their level of satisfaction.

Company Contributions earned by executive directorsThe following table sets out the Company contributions to the Quintain Incentive Plan earned by the executive directors for the year ended 31 March 2015:

ExecutiveSalary for

2014/15

Maximum Company

contribution(% of salary)

Levels of satisfaction of the

performance targets

(%)

Value of Company contribution

(£)

Maxwell James £408,330 300 150% £612,495Nigel Kempner £304,000 300 210% £638,400

* Richard Stearn ceased employment on 3 April 2015 and therefore he was not entitled to an award under the Quintain Incentive Plan for the 2014/15 financial year.

Quintain Incentive Plan Accounts for executive directorsThe following table sets out the Plan accounts for each of the executive directors and the Company contributions and payments made in respect of the year ended 31 March 2015:

Plan accounts MDS James NJ Kempner

Element A Opening balance (deferred shares from 2013/14) 614,282 433,148Value of deferred shares at measurement date1 £589,096 £415,3882014/15 Element A Company contribution £408,330 £425,600Total value at measurement date £997,426 £840,9882014/15 element payable in May 2015 £498,713 £420,494Bonus element (50% of 2014/15 contribution) £204,165 £212,800LTIP element (total element payable less the bonus element) £294,548 £207,694Closing Balance £498,713 £420,494Number of shares represented by closing balance1 520,034 438,472Element B 2014/15 Element B Company contribution2 £204,165 £212,800Number of shares to be granted under an Element B award on 22 May 20152 212,893 221,897

Notes:Richard Stearn ceased employment on 3 April 2015 and therefore all deferred awards and balances lapsed on his cessation of employment.1 Where a number of shares or value of shares is to be calculated the share price used shall be the average closing price for the 30 day period finishing on 31 March 2015

which was £0.959 in accordance with the rules of the Quintain Incentive Plan.2 The terms and conditions which shall apply to the Element B Award of shares are set out in the Policy. The following table summarises the main terms and conditions:

Executive directorFace value of the

awardDescription of

interest awarded Number of shares Vesting dateEnd of sale restrictions

Maxwell James £204,165 Nil cost option 212,893 21 May 2018 21 May 2020Nigel Kempner £212,800 Nil cost option 221,897 21 May 2018 21 May 2020

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Service contractsThe following table summarises the main contractual terms of the directors’ service agreements:

Maximum entitlement on termination

Name Date of contract/letterNotice period in

months1 Salary/fee Benefits PensionQuintain

Incentive Plan

Executive directors Maxwell James 5 July 2011 6 £204,165 £3,321 £36,608 }Nigel Kempner 25 May 2012 6 £152,000 £15,761 £27,216 See PolicySimon Carter2 20 January 2015 6 £132,500 – £23,850Non-executive directors William Rucker 1 October 2009 3 £45,000 – – –Chris Bell 17 September 2010 3 £13,500 – – –Rosaleen Kerslake 1 July 2013 3 £11,250 – – –Simon Laffin 1 February 2008 3 £13,500 – – –Charles Cayzer 21 January 2010 3 £11,250 – – –Peter Dixon 21 January 2010 3 £11,250 – – –

1 Notice periods apply to both the director and the Company.2 Simon Carter joins the Board on 26 May 2015.

Payments to past directors or loss of officeThere have been no payments to former directors or payments for loss of office for the year ended 31 March 2015. Richard Stearn ceased employment on 3 April 2015 and was paid up to that date. No termination payment was made. All outstanding awards under the Quintain Incentive Plan lapsed on his cessation of employment.

Statement of directors’ shareholdings and share interestsSee page 62 for details.

Performance graph and CEO remuneration tableThe Remuneration Committee has chosen to use the FTSE SmallCap Index and the FTSE Real Estate Investment & Services Index, because the Company has been a constituent of these indices for the last six years. The following graph plots the value of £100 in Company shares and the Indices from 31 March 2009 to 31 March 2015. The change in value of the holdings in the Indices reflects any changes in the constituent companies over the period. The value of dividend income is treated as reinvested in the period.

031 Mar 2009 31 Mar 2010 31 Mar 2011 31 Mar 2012 31 Mar 2013 31 Mar 201531 Mar 2014

6 YEAR TOTAL SHAREHOLDER RETURN31 MARCH 2009 TO 31 MARCH 2015

Source: Thomson Reuters Datastream

FTSE All-Share Real EstateInvestment & Services

Quintain

FTSE SmallCap

2,8002,6002,4002,2002,0001,8001,6001,4001,2001,000

800600400200

NoteThe graph shows the value, by 31 March 2015, of £100 invested in Quintain Estates and Development PLC on 31 March 2009, compared with the value of £100 invested in the FTSE SmallCap and the FTSE Real Estate Investment & Services indices. Share prices have been adjusted for the rights issue in 2009.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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CEO Year

CEO single figure

of total remuneration

£

Annual bonus pay out as a

percentage of the maximum

opportunity %

Long-term incentive vesting

rates against maximum

opportunity %

Maxwell James 2014/15 1,194,439 50 50Maxwell James 2013/14 1,431,413 90 90Maxwell James 2012/13 1,148,3731 90 90Adrian Wyatt 2011/12 690,000 0 0Adrian Wyatt 2010/11 705,000 0 0Adrian Wyatt 2009/10 662,000 0 0

1 Adrian Wyatt resigned as a director and Chief Executive of the Company on 25 May 2012.

Percentage change in remuneration of CEO and average Group employeeThe following table sets out the percentage changes between 2014/15 and 2013/14 in respect of certain aspects of the remuneration of the CEO and an average of the Company’s other employees.

Name Base salary Taxable benefits Bonus Total

2014/15 2013/14%

increase 2014/15 2013/14%

increase 2014/15 2013/14%

increase 2014/15 2013/14%

increase

Chief Executive

£’000 408,330 390,000 4.7 6,642 7,952 (16.5) 410,033 699,279 (41.4) 825,005 1,097,231 (24.8)Total pay for employees  group £’000 7,520,805 8,516,102 (11.7) 286,077 297,184 (3.7) 1,180,090 1,556,500 (24.2) 8,986,972 10,369,786 (13.3)Number of employees in comparator group 88 116 (24.1) 88 116 (24.1) 88 116 (24.1) 88 116 (24.1)Average employee pay in comparator group £’000 85,464 73,415 16.4 3,251 2,562 (26.9) 13,410 13,418 (0.1) 102,125 89,395 14.2

Relative importance of spend on remuneration and other distributionsThe following table sets out the total amount spent in 2014/15 and 2013/14 on remuneration of the Group’s employees and major distributions.

Distribution expense

2014/15 total (m)

2013/14 total (m)

Percentage change from

2013/14 to 2014/15

Employee remuneration £8.9 £10.3 (13.3)%Distributions to shareholders £0.0 £0.0 –

Statement of implementation of remuneration policy in 2015/16See pages 57 to 58 for full details.

Consideration by directors of matters relating to directors’ remuneration See page 55 for full details.

Statement of shareholder votingSee page 57 for full details.

BY ORDER OF THE BOARD

CHRIS BELLCHAIRMAN OF THE REMUNERATION COMMITTEE21 May 2015

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Governance

AUDIT COMMITTEE REPORT

Letter from the Audit Committee ChairmanDear shareholder,The Audit Committee was unchanged this year, consisting of three independent non-executive directors: Christopher Bell, Ros Kerslake and myself as Chairman. The Board remains satisfied that I continue to have the necessary, recent and relevant financial experience. We invited others, including the Company Chairman, Chief Executive, Company Secretary, the Finance Director, Financial Controller and representatives from the Company’s external valuers, external auditors (KPMG) and our internal auditors (PwC), to attend as necessary. The Committee and I meet both the external and internal auditors regularly without executive management present to ensure that they speak freely about issues they think important.

We met five times during the year. Our key responsibilities are:

– reviewing the Annual Report to ensure that it provides a fair, balanced and understandable summary of the Company’s position;

– reviewing the integrity and completeness of the Company’s other published financial reporting;

– considering KPMG’s plans for, and subsequent findings from, their audit of the full year results and review of the interim results;

– reviewing the effectiveness and objectivity of the external audit process, assessing the auditor’s independence and ensuring that management respond to any significant recommendations from the external auditor;

– recommending to the Board the appointment of external auditors and approving their remuneration and engagement terms;

– meeting the Company’s principal valuers and reviewing their independent valuation reports;

– assessing the adequacy of the systems of internal control and risk management, approving a new risk management policy and considering the minutes and reports of the Group Risk Committee;

– approving the programme of internal audit reviews, receiving reports from the Company’s internal auditors and monitoring management’s response to recommended actions;

SIMON LAFFINCHAIRMAN OF THE AUDIT COMMITTEE

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– approving and reviewing reports on compliance with the Company’s anti-corruption policies including whistle-blowing and anti-bribery; and

– reviewing our own performance and our terms of reference.

Significant matters consideredValuations The Committee discussed fully with the Company’s principal valuers their formal valuations at both the half and full year. The valuers are required to value property according to the procedures and policies of the ‘Red Book’, which, in particular, assumes willing buyer and willing seller. We challenged the valuations and the valuers’ view of changes in market conditions experienced over the year, seeking other transactional evidence in order to satisfy ourselves that values were appropriate. The external auditors were also invited to express their views on the valuations and explain the factors they took into account when obtaining the necessary comfort required to reach their audit opinion.

The Company’s portfolio of development land and assets at Wembley is valued by Savills, which also values the Quercus healthcare portfolio and the London Portfolio is valued by Cushman & Wakefield.

FundingFollowing a de-gearing programme in the previous two years, the Company refinanced its bank facilities in August 2014, increasing the maturity date from 2016 to 2018 and 2019. This further reduces the Company’s funding risk, but the Committee continues to regularly review funding and hedging requirements against cashflow forecasts and agreed policies. The Committee reviewed the Company’s going concern status, and confirmed that this is still an appropriate basis for the accounts.

Statutory audit KPMG presented its interim review and preliminary results of the audit reports to the Committee through the year. It found neither material adjusted nor unadjusted audit differences. It commented on the control environment and the quality of various finance processes, as well as analysing some of the key financial issues. The Committee reviewed the Auditor’s Report to the Board and challenged relevant aspects.

Capitalisation of interest This year, the Company capitalised £13.0m of interest (2014: £13.7m). This arises with regard to the Wembley Park developments. The need to capitalise interest arises only when there is interest being paid by the Company, active development continuing on the project and where the resulting valuation of the assets does not rise above that of the independent valuation of that set of assets. The Committee was satisfied that all of these conditions were met.

Various balance sheet valuations The Committee reviewed the holding values for various loans and the valuation of the Hilton London Wembley hotel. The valuation of the Hilton hotel is complex as it is subject to a joint ownership contract with a third party, with significant performance variations. The Committee approved the final valuation after reviewing a number of scenarios and consulting the auditors.

Other control matters discussed through the yearWembley tradingQuintain is developing income streams from new sources of business in Wembley Park, such as retail turnover rent and parking. The controls around this revenue were reviewed by PwC, which highlighted some further, tighter controls that have since been implemented. In particular, the need for more regular reconciliations on cash income was emphasised. The Committee requested a review of the performance and robustness of the third party manager of LDO. This was considered satisfactory, with the Committee noting the normal challenges around segregation of duties and controls for relatively small entities.

New Finance DirectorFollowing the resignation last year of our Finance Director, the Committee was involved, through both the Senior Independent Director and myself, in the appointment and briefing of Odgers, a recruitment firm, to look for a replacement. We both fully participated in the interviews of the candidates and the subsequent appointment of a high calibre individual. The Committee was also consulted, and satisfied itself, on the handover arrangements particularly as the incumbent left at the end of March, ahead of the 26 May start date of his successor.

External auditorsAs highlighted in last year’s report, the Committee had decided to hold a formal tender for external audit services. KPMG had been the Company’s auditors since its foundation. Four leading audit firms presented to the Committee; the incumbent KPMG, BDO, Ernst & Young and Deloitte. PwC did not participate as it already provides internal audit services. Following a written submission and a number of presentations, the Committee unanimously agreed to recommend that KPMG be reappointed. Their bid was considered the best, both for quality of the team and the fit with Quintain. It was also, incidentally, the most competitive on price, giving a 16% reduction versus the previous audit fee. The Board accepted this recommendation.

The Committee reviewed KPMG’s performance over the last year during the tender process and confirmed that the auditors have maintained a very high quality service to the Board. Its fee for this year is in line with that proposed during the Audit tender. A resolution to reappoint KPMG will be submitted to the AGM.

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AUDIT COMMITTEE REPORT CONTINUED

The Board or Audit Committee approves in advance all fees of £20,000 or more payable to the external auditor for non-audit services. The Committee discusses all fees for non-audit services, including audit and accounting services required for significant transactions. KPMG received fees for non-audit services of £2,000 (2014: £200,000). KPMG also received £30,000 (2014: £40,000) for the review of the Company’s interim results, which is categorised as a non-audit service.

Internal controls and risk managementThe Audit Committee discussed the Company’s internal control and risk management.

The Committee oversaw management’s comprehensive review of Quintain’s risk management policy and procedures during the year, implementing a new risk management policy and approving the terms of reference for the Group Risk Committee.

The Group Risk Committee, chaired by the Finance Director and comprising the Company Chairman and the executive directors, meets biannually to review and challenge significant risks and controls. More details of the Risk Committee are available on the Company website.

Internal auditThe Company’s internal auditor, PwC, presented a plan for the year. PwC completed a number of internal audit reviews during the year. Based on these reviews which were undertaken at the direction of management, PwC did not identify any significant matters that would indicate that the Company’s control environment has not operated effectively during the year. The Committee is satisfied with this assessment and the continued progress made by management in all areas of financial and operational controls. During the year, internal audits were carried out over IT general computer controls, taxation compliance, greenhouse gas reporting and Wembley Park financial controls over LDO.

Anti-bribery and corruptionThe Audit Committee reviewed the Whistle-blowing Policy and emphasised its importance. Despite the absence of calls, the Committee maintained the independent agency providing a confidential help line for whistle-blowers. Employee concerns seem to be more usually dealt with internally through line management, the Risk Committee and performance management meetings.

The Committee also receives reports from the Group Risk Committee, which monitors the Group’s anti-bribery procedures. Anti-bribery and corruption training is given to all new employees and regular communications are issued to remind staff of the Group’s policies on gifts and hospitality.

Tax complianceThis was investigated by internal audit and they reported that this was satisfactory, with only very minor suggestions for improvement.

Joint ventures and associatesThe Group has a number of joint ventures and associates, the most material of which are the Quercus Healthcare Property Unit Trust, Quintain Keystone (Emerald Gardens) and the Hilton London Wembley hotel, which are not controlled wholly by the Company.

During the year, a number of potential issues and possible personal conflicts of interest were identified in Quintain’s management of the Quercus Fund. Quintain immediately instigated a comprehensive investigation by its lawyers Norton Rose Fulbright, which then centred on some procurement and disposal fees charged by Quintain and others to the Fund during the period 2004 to 2011.

Whilst no legal liability has been accepted, Quintain offered £1.9m in settlement of the matters. This was agreed by the General Partner. The amount, £1.6m net of VAT, has been provided in these accounts against Quercus income in 2014/15. The costs of the investigation, which are estimated at £1.2m, are separately included in general administrative costs.

The Audit Committee responded to this matter in the following way:

1 It reviewed the terms of reference for the investigation by Norton Rose Fulbright, the final report that was produced and the Company’s proposed settlement.

2 It requested an immediate review of all possible personal conflicts of interest across the Group and its associated enterprises. No further conflicts were identified by this thorough review.

3 It reviewed and approved an enhanced stricter Conflicts of Interest Policy and supporting procedures.

4 It asked the internal auditors, PwC, to commence a review of all control risks and financial controls for joint ventures and associated business entities. This work is still in progress at this time.

Further questionsAs Chairman of the Committee, I shall be pleased to answer any further questions that shareholders may have at the Annual General Meeting.

Yours faithfully

SIMON LAFFINCHAIRMAN OF THE AUDIT COMMITTEE21 MAY 2015

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Governance

DIRECTORS’ REPORTThe directors present their report and the audited financial statements for the year ended 31 March 2015.

Corporate GovernanceAs required by the UK Corporate Governance Code, the Companies Act and the Disclosure and Transparency Rules, this Directors’ Report combines by reference the Responsibility Report, containing disclosures of greenhouse gas emissions on pages 42 to 43, the Corporate Governance Statement on page 51 and the Nomination and Audit Committee Reports on pages 54 and 70 to 72 respectively. The Directors’ Remuneration Report is on pages 55 to 69.

Strategic ReportThe Company’s Strategic Report for the year ended 31 March 2015 on pages 2 to 47 contains the following information, which is not included in this Report:

– the Business Review, including the Company’s principal activities and future developments;

– the risks and uncertainties facing the business; and – a Responsibility Report.

DirectorsThe directors of the Company, who held office during the year and up to the date of this Report, were as follows:

Chairman William Rucker

Executive directorsMaxwell JamesRichard Stearn (to 3 April 2015)Nigel Kempner

Non-executive directorsChristopher BellCharles CayzerPeter DixonRosaleen Kerslake Simon Laffin

In addition, the Board approved the appointment of Simon Carter as Finance Director with effect from 26 May 2015.

Directors’ biographies are set out on pages 48 to 49 of the Corporate Governance Report. The appointment and replacement of directors is governed by the Companies Act and the Company’s Articles of Association.

In accordance with the UK Corporate Governance Code, all directors will retire at the 2015 AGM and, with the exception of Simon Laffin, offer themselves for re-election.

DividendNo dividend was proposed during the course of the year under review (2014: nil). It continues to be the directors’ intention to return to a dividend paying model, however, any payments will only be made after taking account of the Group’s wider funding requirements.

Share capital Details of the Company’s issued share capital and changes to the issued share capital during the year are set out in note 8.12 on page 132. The directors were granted shareholder authority to issue or purchase the Company’s shares at the 2014 AGM, which expires on the date of the 2015 AGM when resolutions will be proposed for their renewal.

There are no specific restrictions on the size of a holding or on the transfer of shares. No person has any special rights of control over the Company’s share capital and all issued shares are fully paid. During the year, the Company cancelled 5,234 treasury shares and at the date of this report no shares are held in treasury by the Company.

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DIRECTORS’ REPORT CONTINUED

Significant shareholdingsQuintain Estates & Development PLC has a premium listing on the London Stock Exchange. Our share register has some 1,200 registered shareholders. The Company has received notifications under DTR 5 of the following significant interests in the Company’s total voting rights up to 31 March 2015:

Number of shares

% of issued share capital

Standard Life Investments 36,650,340 6.97Morgan Stanley Investment Management Ltd 26,377,835 5.01AXA Investment Managers SA 26,368,886 5.01Caledonia Investments PLC 26,300,036 5.00BlackRock Inc 26,060,682 4.95Third Avenue Management LLC 21,971,872 4.18

Apart from reductions in the Morgan Stanley Investment Management holding below 5% and Axa Investment Managers’ holding to 25,718,586 shares (4.89%), no changes in the interests set out above have been notified under DTR5 in the period from 31 March 2015 to 15 May 2015.

All ordinary shares of the Company carry the same rights and no shareholder enjoys any preferential rights.

The Annual General MeetingThe AGM will be held at 11.00 am on 20 July 2015, at the Hilton London Wembley. The formal notice of meeting is available on the Company’s website and has been issued to shareholders with the 2015 Annual Report.

Key contractual arrangementsThe Group has a number of joint venture arrangements, as detailed in note 3.4 on pages 104 to 109 of the financial statements. The directors consider the joint venture arrangements with Aviva Investors, Oaktree Capital Management and Keystone Holdings to be material to the business.

Change of control provisionsThe Companies Act 2006 requires the Company to identify those significant arrangements to which the Company is party that take effect, alter or terminate upon a change of control of the Company following a takeover bid, and the effects of any such agreements.

The Group’s banking facilities include provisions which require the Company to notify its bankers in the event of a change of control. Thereafter, the banks may within 30 days cancel the Company’s banking facilities and request the immediate repayment of all amounts due to them.

The property and asset management agreement between the Company and Quercus Healthcare Property Partnership contains provisions which entitle the Partnership to terminate the agreement in the event that more than 50% of the issued share capital of the Company is held by any person (or its associates) and 50% or more of the executive directors of the Company (over the previous 12 months) cease to be executive directors of the Company or another Quintain Group company.

The Company’s interest in the Hilton London Wembley hotel is subject to change of control provisions in respect of both the management agreement with Hilton International (‘Hilton’) and the joint venture agreement with OCM Wembley Holdings Sarl, a company owned by funds managed by Oaktree Capital Management L.P. (‘Oaktree’). Hilton may terminate the hotel management agreement in the event that 25% or more of the issued shares in the Company are held by certain identified categories of persons to whom Hilton objects. Oaktree may terminate the joint venture agreement in the event that 50% or more of the issued shares in the Company are held by certain identified categories of persons to whom Oaktree objects.

There are no comparable terms in the Quintain Keystone joint venture agreements.

Going concernThe Group financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. Based on the analysis set out on page 34 of the Financial Review, the directors believe it is appropriate to prepare the financial statements on a going concern basis.

Statement of disclosure to auditorIn accordance with Section 418 of the Companies Act 2006, each director at the date of this report confirms that:

– so far as he or she is aware, there is no information, which would be needed by the Company’s auditor in connection with preparing their audit report, of which the auditor is not aware; and

– each director has taken all steps necessary to make him or herself aware of any such information and to establish that the auditor is aware of it.

Directors’ Responsibility StatementThe directors’ responsibilities for the financial statements contained within this Annual Report and the directors’ confirmation required under DTR4.1.12 and the UK Corporate Governance Code are set out on page 78.

By order of the Board

SANDRA ODELLCOMPANY SECRETARY21 MAY 2015

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Carbon Credentials Energy Services Ltd (CCES) has been contracted by Quintain Estates & Development PLC (‘Quintain’) of 43-45 Portman Square, London, W1H 6LY for the independent third party verification of direct and indirect carbon dioxide equivalent emissions (CO2e) as provided in the Company 2015 Annual Report and Accounts to a reasonable level of assurance. This verification exercise has been performed to the ISO 14064-3 standard.

Roles and responsibilitiesThe management of Quintain is responsible for the organisation’s GHG information system, the development and maintenance of records and reporting procedures in accordance with that system, including the calculation and determination of GHG emissions information.

It is CCES’ responsibility to express an independent GHG verification opinion on the emissions as provided in the Quintain directors’ report for the period 1 April 2014 – 31 March 2015.

Title or description of activitiesThe organisational boundary was established following the operational control approach. The scope of this engagement covered the assessment of all emission sources required for disclosure by The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 as well as voluntary Scope 3 sources as follows:

Scope 1 Emissions – Combustion of gaseous fuels – Combustion of liquid fuels – Fugitive refrigerants

Scope 2 Emissions – Purchased electricity consumption

Scope 3 Emissions – Transportation of employees for business-related activities in vehicles owned or operated by third parties

– Fuel and energy related activities (FERA) – Operation of leased assets – Use of sold goods and services – Third party disposal and treatment of waste – Water consumption

ObjectivesThe objectives of this verification exercise were, by review of objective evidence, to confirm whether any evidence existed that the GHG emissions as declared in the organisation’s GHG assertion were not: accurate, complete, consistent, transparent and free of material error or omission in accordance with the criteria outlined below.

CriteriaCriteria against which the verification assessment was undertaken:

1. Reporting standard: DEFRA (2013) Environmental Reporting Guidelines: Including mandatory greenhouse gas emissions reporting guidance.

2. Reference calculation methodologies: Scope 1 & 2 emissions – World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition (the GHG Protocol). Scope 3 emissions – World Resources Institute/World Business Council for Sustainable Development Corporate Value Chain (Scope 3) Accounting and Reporting Standard: Supplement to the GHG Protocol Corporate Accounting and Reporting Standard.

3. Legislative criteria: Part 7 of The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013.

Level of Assurance and MaterialityThe level of assurance agreed is that of reasonable assurance. A materiality level of 5% was applied. Note that assessment of compliance and materiality was undertaken against the stated calculation methodology.

Governance

VERIFICATION STATEMENT – REASONABLE ASSURANCE

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ConclusionWe planned and performed our work to obtain the information, explanations and evidence that we considered necessary to provide a reasonable level of assurance that the reported GHG emissions for the period are fairly stated.

We conducted our verification with regard to the GHG assertion of Quintain, which included evaluation of the Company GHG information system and monitoring and reporting methodology. This assessment included the collection of evidence supporting the reported data and multiple checks relative to the provisions of the legislation, reporting standard and calculation methodologies referenced in the verification criteria. This statement shall be interpreted with the GHG assertion of Quintain as a whole.

CCES’ approach is risk-based, drawing on an understanding of the risks associated with calculating GHG emission information and the controls in place to mitigate these risks. Our examination included assessment, on a sample basis, of evidence relevant to the reporting of emission information.

Based on the data and information provided by Quintain and the processes and procedures conducted, CCES concludes with reasonable assurance that:

– the GHG inventory methodology applied by Quintain is sound, valid and based on best practice; and

– the estimated annual emissions are accurate, complete, consistent, transparent and free of material error or omission in relation to the requirements of the calculation methodologies employed.

The GHG information for the period 01/4/2014 – 31/03/2015 disclosing emissions of 16,006 metric tonnes of CO2 equivalent are verified by CCES to a reasonable level of assurance, consistent with the agreed verification scope, objectives and criteria. Emissions by scope are verified as follows:

Reporting Period: 01/04/2014 – 31/03/2015Scope 1 Scope 2 Scope 3

Reported Emissions: 2,589 tonnes of CO2e

Reported Emissions: 4,456 tonnes of CO2e

Reported Emissions: 8,961 tonnes of CO2e

Observations – The greenhouse gas emissions data reported is measured, collected and aggregated based on established and effective internal systems and processes.

– All errors in reported data identified during the verification process have been duly corrected.

– In future, more frequent internal reporting to Board level would improve reporting efficiency at year end.

Attestation:

PAUL BOSWORTHLEAD VERIFIEROn behalf of Carbon Credentials Energy Services Ltd

No member of the verification team has a business relationship with Quintain & Development PLC, its directors or managers beyond that required of this assignment. We conducted this verification independently and to our knowledge there has been no conflict of interest.

VERIFICATION STATEMENT – REASONABLE ASSURANCE CONTINUED

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We confirm that we have inspected the above properties and made all relevant enquiries in order to provide you with our opinion of Fair Value as at 31 March 2015 of the various freehold and/or leasehold property interests which Quintain Estates and Development PLC hold.

We have prepared our valuations on the basis of Fair Value as required by the International Financial Reporting Standards (IFRS). The definition of Fair Value is set out in IFRS 13 and is adopted by the International Accounting Standards Board as follows:

“The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.” The measurement date in this instance is the date of valuation.

The RICS Red Book directs us to consider that Fair Value is consistent with the concept of Market Value, the definition of which is set out in Valuation Practice Statement (VPS) 4.1.2 of the Red Book, as follows:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”

Our valuations have been made on the basis of the definition, terms of reference, information sources, assumptions and conditions as noted in our formal Valuation Certificates. In particular, no allowance has been made in our valuations for any expenses of realisation or any taxation liability arising from a sale of any property and all figures are expressed exclusive of Value Added Tax.

Our valuations are on the basis that each property has a good and marketable title and is free from any undisclosed burdens, outgoings, restrictions or charges. We have, for the purpose of our valuations, been provided with plans and particulars as to tenure and the terms of leases as have been contained within various documents supplied to us by the Company or its professional advisers.

Having carefully considered this matter, we have reported our opinion of Fair Value as at 31 March 2015 of the freehold and other interests held, subject to and with the benefit of the existing leases and otherwise with vacant possession, at an aggregate of £679,590,000 (six hundred and seventy nine million, five hundred and ninety thousand pounds). The total includes a 100% share of the interest at Silvertown of £18,000,000 and a 100% share of certain other assets which are held in joint ventures.

The assets are held for a mixture of development, investment, in the course of development and a small trading asset.

Our full form Valuation Certificate and Property Schedule comments on the high degree of subjectivity in this instance for the development land at Wembley and various other property specific matters. In particular, our valuation of Wembley includes the additional value derived from the portfolio effect and synergies arising from the legal right to acquire the freehold and long leasehold interests in land pursuant to the terms of a Development Agreement with the London Development Agency notwithstanding that this Agreement is non-assignable. As discussed with the Company and its auditors, our valuation specifically disregards this restriction.

This letter is a shortform confirmation of our valuation for inclusion in the Company’s Report and Accounts. No reliance should be placed upon it without simultaneous reference to our formal Valuation Certificates, copies of which have been provided to the Company.

Yours faithfully

For and on behalf of Savills Advisory Services Limited

S REASBECK FRICS C BRACKEN MRICSRICS REGISTERED VALUER RICS REGISTERED VALUERDIRECTOR DIRECTOR

Governance

VALUATION OF CERTAIN PROPERTY INTERESTS AT WEMBLEY, SILVERTOWN AND REDHILL

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The directors are responsible for preparing the Annual Report and the Group and parent company financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare Group and parent company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the directors are required to:

– select suitable accounting policies and then apply them consistently;

– make judgements and estimates that are reasonable and prudent;

– for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;

– for the parent company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the parent company financial statements; and

– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

We confirm that to the best of our knowledge:

– the directors consider that this Annual Report, taken as a whole is fair, balanced and understandable. The Directors believe that the disclosures set out in the Annual Report provide the information necessary for shareholders to assess the Company’s performance, business model and strategy;

– the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

– the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

WILLIAM RUCKER MAXWELL JAMESCHAIRMAN CHIEF EXECUTIVE 21 MAY 2015

Governance

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS

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1 Our opinion on the financial statements is unmodified

We have audited the financial statements of Quintain Estates & Development PLC for the year ended 31 March 2015 set out on pages 82 to 133. In our opinion: – the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 March 2015 and of the Group’s profit for the year then ended;

– the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU);

– the parent company financial statements have been properly prepared in accordance with UK Accounting Standards; and

– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006; and, as regards the Group financial statements, Article 4 of the IAS Regulation.

2 Our assessment of risks of material misstatementIn arriving at our audit opinion above on the financial statements the risk of material misstatement that had the greatest effect on our audit was as follows:

Valuation of investment properties held by the Group (£686.4m) by joint ventures (£37.8m) and the Quercus associate (£43.5m).

Refer to page 71 (Audit Committee report), page 100 (accounting policy) and pages 101 to 103 (financial disclosures).

– The risk – The Group, directly or through its joint ventures and associates, holds investment properties in a diverse range of sectors; including development land, retail and office buildings and healthcare properties. Investment properties owned directly by the Group are held at fair value in the Group’s financial statements. Further, for investment properties held by joint ventures or by associates, the Group has an indirect exposure to fair value changes, given that under the equity method of accounting the Group adjusts the carrying amount of its investments by its share of the profits or losses of the joint venture or associate.

Determination of fair value of investment properties is considered a significant audit risk due to the magnitude of the balances and subjective nature of the valuation. Each valuation requires consideration of the individual nature of the property, its location and expected future net rental values, market yields and comparable market transactions. Valuing investment properties under development can be further complicated by the need to forecast discounted cashflows with a deduction for costs to complete, which given the long-term nature of the Group’s developments, is likely to require significant judgement.

– Our response – In this area our audit procedures included, amongst others, meeting with the Group’s principal external valuers, who in aggregate value 97% of the investment properties held by the Group, its joint ventures and the Quercus associate, to understand the assumptions and methodologies used in valuing the investment properties and the market evidence used by the external valuers to support these assumptions. With assistance from our own chartered surveyor, we evaluated the assumptions made by the external valuers, the methodologies they have used, their competency, and their independence. We challenged the external valuers’ key assumptions by: – evaluating unobservable inputs used in the valuations against our knowledge and experience of the industrys; including a consideration of whether the movements in valuations were consistent with market comparable transactions and changes in industry benchmarks;

– agreeing observable inputs used in the valuations, such as rental income and current tenancy contracts, to the income earned in the year, the Group’s property management system and lease contracts; and

– comparing sales proceeds for property disposals in the year with previous valuations to assess the historical accuracy of the external valuations.

We also considered whether the Group’s disclosures in respect of the inputs into the valuations properly reflected the assumptions used and met the requirements of the relevant accounting standards.

Financial statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUINTAIN ESTATES AND DEVELOPMENT PLC ONLY

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF QUINTAIN ESTATES & DEVELOPMENT PLC ONLY CONTINUED

3 Our application of materiality and an overview of the scope of our audit

The materiality for the Group financial statements as a whole was set at £6.5m, determined with reference to a benchmark of total Group assets of which it represents 0.7%.

In addition, we applied materiality of £1.0m to Adjusted profit before tax, as defined and disclosed in note 2.1, and its constituent parts, for which we believe misstatements of lesser amounts than materiality for the financial statements as a whole could be reasonably expected to influence the Company’s members assessment of the financial performance of the Group.

We report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £0.25m, in addition to other identified misstatements that warranted reporting on qualitative grounds.

The Group audit team performed the audit of the Group as if it was a single aggregated set of financial information. The audit was performed using the materiality levels set out above and covered 100% of the total Group revenue, Group profit before tax and total Group assets.

4 Our opinion on other matters prescribed by the Companies Act 2006 is unmodified

In our opinion: – the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

– the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

5 We have nothing to report in respect of the matters on which we are required to report by exception

Under ISAs (UK and Ireland) we are required to report to you if, based on the knowledge we acquired during our audit, we have identified other information in the Annual Report that contains a material inconsistency with either that knowledge or the financial statements, a material misstatement of fact, or that is otherwise misleading.

In particular, we are required to report to you if: – we have identified material inconsistencies between the knowledge we acquired during our audit and the Directors’ Statement that they consider that the Annual Report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy; or

– the Audit Committee Report does not appropriately address matters communicated by us to the Audit Committee.

Under the Companies Act 2006 we are required to report to you if, in our opinion: – adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

– the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or

– certain disclosures of directors’ remuneration specified by law are not made; or

– we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review: – the Directors’ Statement, set out on page 74, in relation to going concern; and

– the part of the Corporate Governance Statement on page 51 relating to the Company’s compliance with the ten provisions of the 2012 UK Corporate Governance Code specified for our review.

We have nothing to report in respect of the above responsibilities.

Scope of report and responsibilitiesAs explained more fully in the Directors’ Responsibilities Statement set out on page 78, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at www.frc.org.uk/auditscopeukprivate. This report is made solely to the Company’s members as a body and is subject to important explanations and disclaimers regarding our responsibilities, published on our website at www.kpmg.com/uk/auditscopeukco2014a, which are incorporated into this report as if set out in full and should be read to provide an understanding of the purpose of this report, the work we have undertaken and the basis of our opinions.

BILL HOLLAND (SENIOR STATUTORY AUDITOR) FOR AND ON BEHALF OF KPMG LLP, STATUTORY AUDITORChartered Accountants15 Canada SquareCanary WharfE14 5GL

21 May 2015

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The notes to the financial statements have been grouped together under the following headings: – Preparation of financial statements – Performance for the year – Property assets, joint ventures and associates – Acquisitions and disposals – Other assets and liabilities – Funding – Staff costs, key management and employee benefits – Company balance sheet and notes

Accounting policies are set out in the relevant sections of the notes to the financial statements for relevance and ease of reference, as are the key judgements and estimates used.

Primary statementsConsolidated Income StatementConsolidated Statement of Other Comprehensive IncomeConsolidated Balance SheetConsolidated Statement of Changes in EquityConsolidated Cashflow Statement

Section 1: Preparation of financial statements1.1 Basis of preparation1.2 Going concern 1.3 Significant judgements, estimates and assumptions1.4 Basis of consolidation1.5 Newly effective accounting standards

Section 2: Performance for the year2.1 Underlying results for the year2.2 Segmental information2.3 Revenue, cost of sales and gross profit2.4 Administrative expenses2.5 Property revaluation movements2.6 Net finance expenses2.7 Taxation2.8 Earnings per share and net asset value per share2.9 Fees paid to auditors and their affiliates2.10 Operating lease agreements – as lessor

Section 3: Property assets, joint ventures and associates3.1 Investment properties3.2 Capital commitments 3.3 Trading properties3.4 Investments in joint ventures and associates

Section 4: Acquisitions and disposals4.1 Discontinued operations4.2 Intangible assets

Section 5: Other assets and liabilities5.1 Non-current receivables5.2 Current trade and other receivables5.3 Credit risk5.4 Other payables (non-current)5.5 Current trade and other payables

Section 6: Funding6.1 Bank loans and other borrowings6.2 Obligations under finance leases6.3 Maturity of contractual cashflows of financial liabilities6.4 Financial instruments6.5 Financial risk factors6.6 Share capital6.7 Other reserves

Section 7: Staff costs, key management and employee benefits7.1 Staff costs and numbers7.2 Key management personnel7.3 Share-based compensation

Section 8: Company balance sheet and notes8.1 Company balance sheet 8.2 Profit for the year8.3 Accounting policies8.4 Fixed asset investments8.5 Debtors8.6 Creditors: amounts falling due within one year8.7 Creditors: amounts falling due after more than one year8.8 Provision for liabilities and charges8.9 Borrowings8.10 Financial assets and liabilities8.11 Financial instruments8.12 Share capital8.13 Reserves8.14 Reconciliation of movements in shareholders’ funds8.15 Related party disclosures8.16 Commitments8.17 Directors’ benefits

Financial statements

INTRODUCTION

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Financial statements

CONSOLIDATED INCOME STATEMENTFor the year ended 31 March 2015

Notes2015

£m2014

£m

Revenue 2.3 57.7 32.6Cost of sales 2.3 (39.5) (24.3)Gross profit 18.2 8.3Administrative expenses 2.4 (17.0) (17.4)Operating profit/(loss) before recognition of results from joint ventures and associates, non-current asset sales and revaluation 1.2 (9.1)Share of profit/(loss) from joint ventures 3.4 1.9 (2.7)Share of (loss)/profit from associates 3.4 (2.7) 0.2Operating profit/(loss) before non-current asset sales and revaluation 0.4 (11.6)(Loss)/profit from sale of non-current assets (0.2) 1.7Surplus on revaluation of investment properties 2.5 41.2 22.4Operating profit 41.4 12.5Finance income 2.6 1.9 2.7Finance expenses 2.6 (2.6) (10.5)Profit before tax 40.7 4.7Tax (charge)/credit for the year 2.7 (2.6) 6.3Profit from continuing operations 38.1 11.0Discontinued operationsGross profit 0.3 5.8Share of profit from joint ventures 0.9 8.6(Loss)/profit from sale of non-current assets (1.1) 32.5Deficit on revaluation of investment properties – (1.4)Operating profit 0.1 45.5Finance income – 2.4Finance expenses – (1.2)Profit before tax 0.1 46.7Tax charge for the year (0.3) (4.8)(Loss)/profit from discontinued operations 4.1 (0.2) 41.9Profit for the financial year 37.9 52.9

Attributable to:Equity shareholders 37.9 52.9Non-controlling interest – –

37.9 52.9

Earnings per share (pence):Basic 2.8 7.2 10.2Diluted 7.2 10.2

Earnings per share – continuing operations (pence):Basic 7.2 2.1Diluted 7.2 2.1

The notes on pages 87 to 133 are an integral part of these consolidated financial statements.

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Notes2015

£m2014

£m

Profit for the financial year 37.9 52.9Surplus/(deficit) on revaluation of other non-current investments 5.1 1.4 (0.1)Fair value adjustment on cashflow hedges 0.1 6.8Recycling of revaluation loss of available for sale financial asset 2.6 1.4 –Share of other comprehensive income in joint ventures and associates, net of tax 3.4 (0.2) 0.3Tax on other comprehensive income 2.7 (0.3) (4.6)Other comprehensive income for the financial year – continuing operations 2.4 2.4Share of other comprehensive income in discontinued operations – 0.9Total comprehensive income for the year 40.3 56.2

Attributable to: Equity shareholders 40.3 56.2Non-controlling interest – –

40.3 56.2

All other comprehensive income may be reclassified as profit and loss in the future.

The notes on pages 87 to 133 are an integral part of these consolidated financial statements.

Financial statements

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME For the year ended 31 March 2015

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Financial statements

CONSOLIDATED BALANCE SHEET As at 31 March 2015

Notes2015

£m2014

£m

Non-current assetsInvestment properties 3.1 686.4 570.0Owner-occupied properties, plant and equipment 8.6 2.0Intangible assets 4.2 5.2 6.0Investment in joint ventures 3.4 60.6 80.3Investment in associates 3.4 30.5 1.7Non-current receivables 5.1 14.3 11.0Deferred tax asset 2.7 – 0.9Total non-current assets 805.6 671.9Current assetsTrading properties 3.3 23.4 28.5Trade and other receivables 5.2 42.9 42.3Cash and cash equivalents 7.2 10.3Assets held for sale 4.1 – 106.2Total current assets 73.5 187.3Total assets 879.1 859.2Current liabilitiesBank loans and other borrowings 6.1 (12.8) –Trade and other payables 5.5 (26.2) (27.9)Current tax liability (1.4) (1.3)Total current liabilities (40.4) (29.2)Non-current liabilitiesBank loans and other borrowings 6.1 (192.5) (216.7)Obligations under finance leases 6.2 (1.3) (10.7)Other payables 5.4 (3.2) (7.2)Deferred tax liability 2.7 (2.3) –Total non-current liabilities (199.3) (234.6)Total liabilities (239.7) (263.8)Net assets 639.4 595.4EquityShare capital 6.6 131.5 130.2Share premium 138.9 137.3Other capital reserves 6.7 109.5 107.0Cashflow hedge reserve (0.6) (0.5)Retained earnings 267.9 229.2Own shares reserve (7.8) (7.8)Equity shareholders’ funds 639.4 595.4Non-controlling interest – –Total equity 639.4 595.4

Net asset value per share (pence): 2.8Basic 122 115Diluted 121 114

The notes on pages 87 to 133 are an integral part of these consolidated financial statements.

Approved by the Board of Directors on 21 May 2015 and signed on its behalf by:

WILLIAM RUCKER MAXWELL JAMESDIRECTOR DIRECTOR

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Financial statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2015

Share capital

£m

Share premium

£m

Other capital

reserves £m

Cashflow hedge

reserve £m

Retained earnings

£m

Own shares

reserve £m

Equity shareholders’

funds £m

Non-controlling

interest £m

Total equity

£m

Balance 1 April 2014 130.2 137.3 107.0 (0.5) 229.2 (7.8) 595.4 – 595.4Profit for the year – – – – 37.9 – 37.9 – 37.9Other comprehensive income/(loss) for the year, net of tax – – 2.5 (0.1) – – 2.4 – 2.4Total comprehensive income/(loss) for the year – – 2.5 (0.1) 37.9 – 40.3 – 40.3Costs relating to share-based payment schemes – – – – 0.8 – 0.8 – 0.8Issue of share capital 1.3 1.6 – – – – 2.9 – 2.9Balance as at 31 March 2015 131.5 138.9 109.5 (0.6) 267.9 (7.8) 639.4 – 639.4

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2014

Share capital

£m

Share premium

£m

Other capital

reserves £m

Cashflow hedge

reserve £m

Retained earnings

£m

Own shares

reserve £m

Equity shareholders’

funds £m

Non-controlling

interest £m

Total equity

£m

Balance 1 April 2013 130.2 137.3 107.1 (11.2) 182.5 (7.8) 538.1 0.3 538.4Profit for the year – – – – 52.9 – 52.9 – 52.9Other comprehensive (loss)/income for the year, net of tax – – (0.1) 3.4 – – 3.3 – 3.3Total comprehensive (loss)/income for the year – – (0.1) 3.4 52.9 – 56.2 – 56.2Costs relating to share-based payment schemes – – – – 1.1 – 1.1 – 1.1Disposal of a subsidiary with a non-controlling interest – – – – – – – (0.3) (0.3)Transfer between reserves – – – 7.3 (7.3) – – – –Balance as at 31 March 2014 130.2 137.3 107.0 (0.5) 229.2 (7.8) 595.4 – 595.4

The notes on pages 87 to 133 are an integral part of these consolidated financial statements.

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2015 £m

2014 £m

Operating activitiesProfit for the financial year 37.9 52.9Adjustments for:Depreciation of plant and equipment 0.8 0.1Amortisation of intangible assets 0.8 0.8Costs relating to share-based payment schemes 1.0 0.6Net finance expenses 0.7 6.6Loss/(profit) on sale of non-current assets 1.3 (34.2)Surplus on revaluation of investment properties (41.2) (21.0)Share of profit from joint ventures (2.8) (5.9)Share of loss/(profit) from associates 2.7 (0.2)Tax charge/(credit) 2.9 (1.5)

4.1 (1.8)Increase in trade and other receivables (3.4) (15.3)Increase in trade and other payables 1.4 5.9Proceeds from trading properties 21.1 5.1Cash generated from operations 23.2 (6.1)Interest paid (11.0) (16.0)Interest received 0.5 1.2Tax paid – (0.3)Net cashflow from operating activities 12.7 (21.2)Investing activitiesProceeds from sale of investment properties 4.8 75.3Purchase and development of investment properties (97.3) (69.0)Purchase of owner-occupied properties, plant and equipment (2.7) (1.8)Purchase of other non-current investments (5.4) (5.8)Proceeds from sale of other non-current investments 3.1 3.2Proceeds from sale of joint ventures 104.7 243.7Capital and loan payments advanced to joint ventures (15.5) –Capital and loan repayments received from joint ventures 2.5 5.2Distributions received from joint ventures 3.7 8.2Net cashflow from investing activities (2.1) 259.0Financing activitiesProceeds from new borrowings – 115.0Repayment of borrowings (24.0) (384.0)Payment of loan issue costs (2.1) (2.3)Payment of finance lease liabilities (0.4) (0.8)Net cashflow from financing activities (26.5) (272.1)Net decrease in cash and cash equivalents (15.9) (34.3)Cash and cash equivalents at start of year 10.3 44.6Cash and cash equivalents at end of year (5.6) 10.3Cash is represented by:Cash and cash equivalents 7.2 10.3Bank overdraft (12.8) –

(5.6) 10.3

The notes on pages 87 to 133 are an integral part of these consolidated financial statements.

Financial statements

CONSOLIDATED CASHFLOW STATEMENT For the year ended 31 March 2015

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Section 1: Preparation of financial statements 1.1 Basis of preparationThe Board approved the Group financial statements on 21 May 2015. These have been prepared in accordance with International Financial Reporting Standards and Interpretations issued by the International Financial Reporting Interpretations Committee as adopted by the European Union (‘IFRS’) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are presented in Sterling and have been prepared on a historical cost basis except that investment properties, other non-current investments and certain financial instruments have been stated at fair value.

The principal accounting policies applied in the consolidated financial statements are set out in each note to the financial statements. These policies have been consistently applied to all the years presented.

1.2 Going concernThe Group financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. At 31 March 2015, the Group has prepared detailed cashflow forecasts which show that it has committed undrawn facilities to finance its committed capital expenditure and other outflows, which will enable it to continue in operational existence for the foreseeable future.

1.3 Significant judgements, estimates and assumptions The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities as at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements that are not readily apparent from other sources. However, the actual results may differ from these estimates. The key areas where management has made significant judgements are around estimates regarding the valuation of properties on the balance sheet and in joint ventures and associates. Other areas of estimation and uncertainty are included within the accounting policies, the more significant being the recoverability of receivables and the continued capitalisation of interest. These judgements and estimates are discussed in more detail in the relevant notes to these financial statements.

Other areas of judgement, risk and uncertainty which are relevant to an understanding of these results and the Group’s financial position are referred to in the Finance Review.

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.

1.4 Basis of consolidationThe Group’s financial statements consolidate those of the Company and its subsidiaries, together referred to as the Group, and equity account for the Group’s interest in joint ventures and associates.

Subsidiaries are those entities controlled by the Group. Control exists when the Group has power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The assessment of control is performed on a continuous basis. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date it ceases.

The acquisition or disposal of shares in subsidiaries and interests in joint ventures where properties constitute the only or main asset are accounted for as property transactions unless the fair values attributed to other assets and liabilities within the entity differ from their carrying values.

Financial statements

NOTES TO THE ACCOUNTSFor the year ended 31 March 2015

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NOTES TO THE ACCOUNTS CONTINUED

Section 1: Preparation of financial statements continued1.5 Newly effective accounting standardsNew standards adopted during the yearThe following standards, amendments and interpretations endorsed by the EU are effective for the first time for the Group’s 31 March 2015 year end: – IAS 27 (revised) ‘Separate Financial Statements’ – IAS 28 (revised) ‘Investments in Associates and Joint Ventures’ – IFRS 10 ‘Consolidated Financial Statements’ – IFRS 11 ‘Joint Arrangements’ – IFRS 12 ‘Disclosures of Interests in Other Entities’ – IFRIC 21 ‘Levies’ – Offsetting Financial Assets and Financial Liabilities (amendments to IAS 32) – Recoverable Amount Disclosures for Non-Financial Assets (amendments to IAS 36) – Novation of Derivatives and Continuation of Hedge Accounting (amendments to IAS 39)

IFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements and associates. As a result of the adoption of IFRS 12 the Group has amended some of its disclosures in respect of joint arrangements and associates.

None of the other standards above have had a material impact on the Group.

Standards and interpretations in issue but not yet effectiveThe following standards, amendments and interpretations relevant to the Group have been issued but are not yet effective. None of these standards or interpretations has been early adopted by the Group.

– IFRS 9 ‘Financial Instruments’ – IFRS 15 ‘Revenue from Contracts with Customers’ – Annual improvements to IFRSs 2010 – 2012 Cycle – Annual improvements to IFRSs 2011 – 2013 Cycle – Annual improvements to IFRSs 2012 – 2014 Cycle – Accounting for Acquisitions of Interest in Joint Operations (amendments to IFRS 11) – Clarification of Acceptable Methods of Depreciation and Amortisation (amendments to IAS 16 and IAS 38) – Sale of Contribution of Assets between an Investor and its Associate or Joint Venture (amendments to IFRS 10 and IAS 28) – Equity Method in Separate Financial Statements (amendments to IAS 27) – Disclosure initiative (amendments to IAS 1)

The Group has assessed the impact of these new standards on its financial reporting and does not believe they will have a material impact on the Group’s existing operations.

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Section 2: Performance for the year 2.1 Underlying results for the yearUnderlying results for the year are provided to enable readers of the accounts to differentiate between items of an underlying operating nature and those relating to capital or revaluations.

2015 2014

Adjusted £m

Removal of discontinued

operations £m

Capital1£m

Total £m

Adjusted £m

Removal of discontinued

operations £m

Capital1£m

Total £m

Revenue 58.1 (0.4) – 57.7 39.8 (7.2) – 32.6Cost of sales (38.8) 0.1 (0.8) (39.5) (24.9) 1.4 (0.8) (24.3)Gross profit/(loss) 19.3 (0.3) (0.8) 18.2 14.9 (5.8) (0.8) 8.3Administrative expenses (17.0) – – (17.0) (17.4) – – (17.4)Operating profit/(loss) before recognition of results from joint ventures and associates, non-current asset sales and revaluation 2.3 (0.3) (0.8) 1.2 (2.5) (5.8) (0.8) (9.1)Share of profit/(loss) from joint ventures 0.8 (0.9) 2.0 1.9 9.4 (8.6) (3.5) (2.7)Share of profit/(loss) from associates 1.8 – (4.5) (2.7) – – 0.2 0.2(Loss)/profit from sale of non-current assets – 1.1 (1.3) (0.2) – (32.5) 34.2 1.7Surplus/(deficit) on revaluation of investment properties – – 41.2 41.2 – 1.4 21.0 22.4Operating profit 4.9 (0.1) 36.6 41.4 6.9 (45.5) 51.1 12.5Finance income 1.9 – – 1.9 5.1 (2.4) – 2.7Finance costs (0.6) – (2.0) (2.6) (7.8) 1.2 (3.9) (10.5)Net finance income/(expenses) 1.3 – (2.0) (0.7) (2.7) (1.2) (3.9) (7.8)Profit before tax 6.2 (0.1) 34.6 40.7 4.2 (46.7) 47.2 4.7

1 For these purposes revaluation movements, trading property provisions, disposals, mark to market adjustments and amortisation of intangibles are included within capital items.

2.2 Segmental informationThe Group has four reportable segments, being Wembley (comprising investment and development assets at Wembley Park), London Portfolio (comprising investment assets in London and the WELPUT asset management services), Quercus (asset management of and share of results due to investment in the Quercus Healthcare Fund) and Non-core (comprising other property investments and the Quantum joint venture). The factors used to determine the Group’s reportable segments relate to the way in which the business is aligned and the manner in which results and assets are reported to the Board (as the Board is considered to be the chief operating decision maker) and therefore the basis that resource allocations are made.

The measure of segment results is considered to be adjusted operating profit before administrative expenses. The Board reviews administrative expenses, finance income and expenses and tax at Group level and does not allocate these costs to segments. The Group’s segment asset and liability disclosures reflect the Board’s primary focus on property, joint venture, associate and investment assets at the segment level with all other assets being reviewed at the Group level. Liabilities are only reviewed at the Group level and not allocated to segments.

All of the Group’s revenues are derived from external customers. There are no inter-segmental revenues.

All activities are based in the United Kingdom and Channel Islands.

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.2. Segmental information continued The segmental information of the Group’s results for the year ended 31 March 2015 was as follows:

Wembley £m

London Portfolio

£mQuercus

£mNon-core

£m

Total from continuing operations

£m

Discontinued operations

Total £m

iQ £m

Revenue 45.5 7.9 1.5 2.8 57.7 0.4 58.1Cost of sales (32.3) (3.0) (2.5) (1.7) (39.5) (0.1) (39.6)Gross profit/(loss) 13.2 4.9 (1.0) 1.1 18.2 0.3 18.5Share of profit from joint ventures 1.0 – – 0.9 1.9 0.9 2.8Share of (loss)/profit from associates – – (2.9) 0.2 (2.7) – (2.7)Profit/(loss) from sale of non-current assets 0.6 – – (0.8) (0.2) (1.1) (1.3)Surplus/(deficit) on revaluation of investment properties 38.3 3.0 – (0.1) 41.2 – 41.2Operating profit/(loss) before administrative expenses 53.1 7.9 (3.9) 1.3 58.4 0.1 58.5

Adjusted 12.2 5.7 0.9 1.9 20.7 1.2 21.9Capital1 40.9 2.2 (4.8) (0.6) 37.7 (1.1) 36.6Operating profit/(loss) before administrative expenses 53.1 7.9 (3.9) 1.3 58.4 0.1 58.5

1 For these purposes revaluation movements, trading property provisions, disposals, mark to market adjustments and amortisation of intangibles are included within capital items.

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Section 2: Performance for the year continued2.2 Segmental information continued The segmental information of the Group’s results for the year ended 31 March 2014 was as follows:

Wembley £m

London Portfolio

£mQuercus

£mNon-core

£m

Total from continuing operations

£m

Discontinued operations

Total £m

iQ £m

Greenwich £m

Sequel £m

Revenue 15.2 7.6 2.0 7.8 32.6 2.1 1.6 3.5 39.8Cost of sales (10.3) (6.2) (1.2) (6.6) (24.3) (0.9) – (0.5) (25.7)Gross profit 4.9 1.4 0.8 1.2 8.3 1.2 1.6 3.0 14.1Share of (loss)/profit from joint ventures (0.2) – (4.2) 1.7 (2.7) 13.5 (4.9) – 5.9Share of profit from associates – – – 0.2 0.2 – – – 0.2Profit/(loss) from sale of non-current assets 2.5 – – (0.8) 1.7 – 32.3 0.2 34.2Surplus/(deficit) on revaluation of investment properties 22.5 0.2 – (0.3) 22.4 – – (1.4) 21.0Operating profit/(loss) before administrative expenses 29.7 1.6 (3.4) 2.0 29.9 14.7 29.0 1.8 75.4

Adjusted 4.8 2.2 3.3 2.7 13.0 8.1 0.2 3.0 24.3Capital1 24.9 (0.6) (6.7) (0.7) 16.9 6.6 28.8 (1.2) 51.1Operating profit/(loss) before administrative expenses 29.7 1.6 (3.4) 2.0 29.9 14.7 29.0 1.8 75.4

1 For these purposes revaluation movements, trading property provisions, disposals, mark to market adjustments and amortisation of intangibles are included within capital items.

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.2 Segmental information continued The segmental information of the Group’s Balance Sheet as at 31 March 2015 was as follows:

Wembley £m

London Portfolio

£mQuercus

£mNon-core

£mUnallocated

£mTotal

£m

Non-current assetsInvestment properties 578.3 92.8 – 15.3 – 686.4Owner-occupied properties, plant and equipment 4.0 – – – 4.6 8.6Intangible assets – 5.2 – – – 5.2Investment in joint ventures 41.6 – – 19.0 – 60.6Investment in associates – – 28.6 1.9 – 30.5Non-current receivables – 12.8 – 1.5 – 14.3Total non-current assets 623.9 110.8 28.6 37.7 4.6 805.6Current assetsTrading properties 17.8 – – 5.6 – 23.4Other current assets 30.5 2.3 1.0 9.2 7.1 50.1Total current assets 48.3 2.3 1.0 14.8 7.1 73.5Total assets 672.2 113.1 29.6 52.5 11.7 879.1Total current liabilities (40.4) (40.4)Total non-current liabilities (199.3) (199.3)Total liabilities (239.7) (239.7)Net assets/(liabilities) 672.2 113.1 29.6 52.5 (228.0) 639.4AcquisitionsCapital expenditure 11.9 – – – 2.7 14.6Acquisition of investment properties 11.1 66.1 – 5.4 – 82.6Acquisition of non-current receivables – 5.3 – – – 5.3

23.0 71.4 – 5.4 2.7 102.5

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Section 2: Performance for the year continued2.2 Segmental information continued The segmental information of the Group’s Balance Sheet as at 31 March 2014 was as follows:

Wembley £m

London Portfolio

£mQuercus

£mNon-core

£mUnallocated

£mTotal

£m

Non-current assetsInvestment properties 526.4 23.9 – 19.7 – 570.0Owner-occupied properties, plant and equipment 1.7 – – – 0.3 2.0Intangible assets – 6.0 – – – 6.0Investment in joint ventures 27.7 – 34.3 18.3 – 80.3Investment in associates – – – 1.7 – 1.7Non-current receivables 3.0 5.3 – 2.7 – 11.0Deferred tax asset – – – – 0.9 0.9Total non-current assets 558.8 35.2 34.3 42.4 1.2 671.9Current assetsTrading properties 23.0 – – 5.5 – 28.5Other current assets 27.7 3.4 0.5 11.4 9.6 52.6Assets held for sale – – – – 106.2 106.2Total current assets 50.7 3.4 0.5 16.9 115.8 187.3Total assets 609.5 38.6 34.8 59.3 117.0 859.2Total current liabilities – – – – (29.2) (29.2)Total non-current liabilities – – – – (234.6) (234.6)Total liabilities – – – – (263.8) (263.8)Net assets/(liabilities) 609.5 38.6 34.8 59.3 (146.8) 595.4Capital expenditure 53.7 – – 0.2 0.4 54.3Acquisition of investment properties – 14.5 – – – 14.5Acquisition of non-current receivables – 5.8 – – – 5.8

53.7 20.3 – 0.2 0.4 74.6

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.3 Revenue, cost of sales and gross profit

Accounting policy Revenue, cost of sales and trading property salesRevenue is stated net of VAT and comprises rental income, proceeds from sales of trading properties, fees, commissions and other income.

Rental income from investment properties leased out under operating leases is recognised in the Consolidated Income Statement on a straight-line basis over the term of the lease. Contingent rents, which comprise turnover rents, are recognised as income in the periods in which they are earned. Rent reviews are recognised when such reviews have been agreed with tenants. Surrender premiums received are considered a component of rental income and are recognised over the remainder of the lease term.

Lease incentives are recognised as an integral part of the net consideration for use of the property and amortised on a straight-line basis over term of lease, or the period to the first tenant break, if shorter, unless there is reasonable certainty that the break will not be exercised.

Property operating costs are recognised on an accruals basis including any element of service charge expenditure not recovered from tenants.

Sales of trading properties are recognised in the accounts on the date of unconditional exchange or where an exchange is conditional, on the date that conditions have been satisfied and where there is a confirmed date for completion.

Fees from asset and development management relate to base and performance fees receivable in respect of asset and development management together with property procurement fees. Performance fees are recognised when it is probable that performance criteria have been met. All other fees are recognised on a receivable basis.

Other income comprises commercialisation income, insurance commission, car parking receipts, property management fees and miscellaneous income and is recognised on an accruals basis in accordance with the substance of the transaction.

2015 2014

Revenue £m

Cost of sales £m

Gross profit/(loss)

£mRevenue

£mCost of sales

£m

Gross profit/(loss)

£m

Rental income 21.3 (5.5) 15.8 10.3 (6.5) 3.8Income from sale of trading properties 22.9 (22.8) 0.1 5.1 (5.4) (0.3)Fees from asset and development management 5.5 (4.2) 1.3 9.6 (6.5) 3.1Intangible asset amortisation – (0.8) (0.8) – (0.8) (0.8)Other income 8.0 (6.2) 1.8 7.6 (5.1) 2.5

57.7 (39.5) 18.2 32.6 (24.3) 8.3

Rental income includes £3.0m (2014: £nil) net surrender premium income from Wembley.

Fees from asset and development management include a debit in cost of sales of £1.6m (2014: £nil), net of VAT, in respect of potential issues in the management of the Quercus Fund, as described in the Finance Review. Related legal costs of £1.2m (2014: £nil) are separately included in administrative expenses.

Net rental income2015 Total

£m

2014 Total

£m

Group net rental income 15.8 3.8Share of joint venture and associates net rental income 5.8 6.4Combined net rental income 21.6 10.2

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Section 2: Performance for the year continued2.4 Administrative expenses The analysis of the Group’s administrative expenses was as follows:

2015 £m

2014 £m

Directors’ remuneration 3.8 3.0Staff costs 5.5 7.3Total staff costs 9.3 10.3Legal and other professional fees 2.9 2.3Office costs 2.5 2.1Depreciation of property, plant and equipment 0.5 0.1Operating lease payments 0.7 0.8General expenses 0.6 0.7Onerous lease provision 0.5 1.1

17.0 17.4

Future minimum lease payments payable by the Group under non-cancellable operating leases, excluding the onerous lease, are £8.2m (2014: £8.7m) payable evenly over the next nine years.

2.5 Property revaluation movementsThe revaluation movements on the Group’s investment properties whether held directly or through joint ventures and the associates were as follows:

2015 £m

2014 £m

Surplus on revaluation of directly held investment properties 41.2 22.4Surplus/(deficit) on revaluation of investment properties in joint ventures 3.6 (5.1)(Deficit)/surplus on revaluation of investment properties in associates (2.5) 0.2

42.3 17.5

There are no revaluation surpluses or deficits in discontinued operations in the year (2014: £1.4m deficit of directly held investment properties and a surplus of £6.1m in joint ventures).

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.6 Net finance expenses

Accounting policy Capitalisation of borrowing costsNet borrowing costs in respect of capital expenditure on properties under development are capitalised. Interest is capitalised using the Group’s weighted average cost of borrowing from the commencement of development work until the date of practical completion. The capitalisation of finance costs is suspended if there are prolonged periods when development activity is interrupted. Tax relief on interest capitalised on investment properties is reflected in the Consolidated Income Statement. All other borrowing costs are recognised in the Consolidated Income Statement in the period in which they are incurred.

2015 £m

2014 £m

Recognised in Income Statement:Interest expense on bank debt and associated swaps 13.1 16.8Interest on obligations under finance leases 0.4 0.7Impairment of financial assets 0.5 2.5Recycling of revaluation loss of available for sale financial asset 1.4 –Change in fair value of ineffective caps 0.2 –Recycling of fair value adjustment on effective swaps – 4.2

15.6 24.2Interest capitalised (13.0) (13.7)Finance expenses 2.6 10.5Finance income: interest income on loans and receivables (1.9) (2.7)

0.7 7.8

Recognised in Other Comprehensive Income:Net (surplus)/deficit in fair value of quoted investments (1.4) 0.1Effective portion of changes in fair value of cashflow hedges (0.1) (2.6)Recycling of revaluation loss of available for sale financial asset (1.4) –Recycling of fair value adjustment on effective swaps – (4.2)

(2.9) (6.7)

The interest capitalised relates to investment properties in the course of construction. The average rate of interest used for capitalisation was 6.4% (2014: 5.9%).

2.7 Taxation

Accounting policyTax is recognised in the Consolidated Income Statement except to the extent that it relates to items recognised in Other Comprehensive Income, in which case the related tax is recognised under that heading. Current tax is the expected tax payable on the taxable income for the year using tax rates applicable at the balance sheet date.

Deferred tax is provided using the balance sheet liability method in respect of all temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for tax purposes.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities at the relevant tax rates which have been substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

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Section 2: Performance for the year continued2.7 Taxation continuedi) Tax charge/(credit) for the year

2015 £m

2014 £m

UK current tax at 21% (2014: 23%) (0.3) (4.4)

Deferred tax:On investment properties 12.4 (5.2)Capital allowances 0.4 (1.4)(Creation)/utilisation of tax losses (2.2) 4.7Advanced Corporation Tax (‘ACT’) recognised (7.1) –Other temporary differences (0.6) –Total deferred tax charge/(credit) 2.9 (1.9)Tax charge/(credit) 2.6 (6.3)

ii) Tax credit reconciliation

2015 £m

2014 £m

Profit before tax 40.7 4.7Tax applied at UK corporation tax rate of 21% (2014: 23%) 8.5 1.1Non-deductible expenses and non-taxable items (3.8) (0.9)ACT recognised (7.1) –Capital allowances 0.4 (1.4)Tax charge taken to share of income from joint ventures and associates 0.2 0.6Tax losses carried forward/(utilised) 2.2 (5.0)Other adjustments 2.2 (0.7)Tax charge/(credit) 2.6 (6.3)

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.7 Taxation continuediii) Deferred tax movements

1 April 2014

£m

Recognised in Income

Statement £m

Recognised in Other

Comprehensive Income

£m

31 March 2015

£m

Capital gains less capital losses (4.2) 12.4 0.3 8.5Capital allowances 5.5 0.4 – 5.9Derivative financial instruments (0.1) – – (0.1)Other temporary differences 1.8 (0.6) – 1.2ACT – (7.1) – (7.1)Revenue tax losses (3.9) (2.2) – (6.1)Deferred tax (asset)/liability (0.9) 2.9 0.3 2.3

1 April 2013

£m

Recognised in Income

Statement £m

Effect of tax rate change

£m

Recognised in discontinued

operations £m

Recognised in Other

Comprehensive Income

£m

31 March 2014

£m

Capital gains less capital losses 0.4 (5.2) 0.6 – – (4.2)Capital allowances 9.4 (1.4) (0.8) (1.7) – 5.5Derivative financial instruments (4.7) – – – 4.6 (0.1)Other temporary differences 2.1 – (0.3) – – 1.8Revenue tax losses (9.1) 4.7 0.5 – – (3.9)Deferred tax liability/(asset) (1.9) (1.9) – (1.7) 4.6 (0.9)

The Group has measured the deferred tax assets and liabilities as at 31 March 2015 using the enacted rate of 20% (2014: 20%).

At 31 March 2014 the Group had ACT with a cash value of £7.1m for which no deferred tax asset had been recognised. These losses have been recognised as an asset in the current year due to increasing likelihood that the Group will generate future profits against which these losses can be utilised. There are no unrecognised losses at 31 March 2015.

iv) Total tax chargeThe tax charge recognised in these financial statements was as follows:

2015 £m

2014 £m

Tax charge/(credit) on continuing operations 2.6 (6.3)Tax charge on share of profit in joint ventures (note 3.4c) 1.5 –Tax credit on share of loss in associates (note 3.4c) (1.3) –Tax charge on income and expenses recognised in other comprehensive income 0.3 4.6Tax charge on profit from discontinued operations 0.3 4.8Tax charge on share of profit in joint ventures – discontinued operations – 3.5

3.4 6.6

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Section 2: Performance for the year continued2.8 Earnings per share and net asset value per sharei) Earnings per share

2015 2014

Earnings £m

Number of shares

m

Earnings per share

penceEarnings

£m

Number of shares

m

Earnings per share

pence

Issued shares 525.4 521.3Less: ESOP shares (2.2) (2.2)Basic – continuing operations 38.1 523.2 7.2 11.0 519.1 2.1Basic – discontinued operations (0.2) 523.2 – 41.9 519.1 8.1Basic 37.9 523.2 7.2 52.9 519.1 10.2Adjustment:Employee share-based payment schemes – 4.3 – 0.9Diluted 37.9 527.5 7.2 52.9 520.0 10.2Revaluation movements – continuing operations (42.3) – (17.5) –Revaluation movements – discontinued operations – – (4.7) –Losses/(gains) on disposals – continuing operations 3.6 – (0.2) –Losses/(gains) on disposals – discontinued operations 1.1 – (32.5) –Fair value adjustments on financial instruments – continuing operations 2.1 – 6.7 –Fair value adjustments on financial instruments – discontinued operations – – (0.5) –Deferred tax 3.1 – 1.6 –EPRA 5.5 527.5 1.0 5.8 520.0 1.1

ii) Net asset value per share

2015 2014

Equity shareholders’

funds £m

Number of shares

m

Net asset value per

share pence

Equity shareholders’

funds £m

Number of shares

m

Net asset value per

share pence

Net assets 639.4 526.1 595.4 521.5Less: ESOP shares – (2.2) – (2.2)Basic 639.4 523.9 122 595.4 519.3 115Adjustment:Employee share-based payment schemes 1.4 4.4 2.8 6.9Diluted 640.8 528.3 121 598.2 526.2 114Fair value of derivatives 0.5 – (0.6) –Deferred tax (0.8) – 0.6 –Revaluation of trading properties 6.6 – – –EPRA 647.1 528.3 122 598.2 526.2 114

Although not required under IFRS, net asset value per share is considered a key performance indicator in the sector in which the Group operates. Contingent share entitlements have been excluded from the calculation in ii) where the conditions had not been met at the Balance Sheet date.

2.9 Fees paid to auditors and their affiliates 2015 £000

2014 £000

Fees payable to the Company’s auditor for the audit of the Company’s annual report 165 200Fees payable to the Company’s auditor and its associates for other services: The audit of the Company’s subsidiaries pursuant to legislation 66 69Review of the interim accounts 30 40Taxation compliance services 2 –Other assurance services – 200

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NOTES TO THE ACCOUNTS CONTINUED

Section 2: Performance for the year continued2.10 Operating lease agreements – as lessor

Accounting policyProperties leased out to tenants under operating leases are included in investment properties in the Consolidated Balance Sheet with rental income recognised on a straight-line basis over the lease terms.

The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases. Standard lease provisions include service charge recovery and upward only rent reviews every five years. On review, rents are increased either by a contractual formula, mainly linked to RPI, or to current market rent (estimated rental value or ERV). Typically, single let properties are leased on terms where the tenant is responsible for repair, insurance and running costs while multi-let properties are leased on terms which include recovery of a share of service charge expenditure and insurance. The Group also let tenancies on terms which include a turnover based element of £0.8m (2014: £0.2m) during the year.

Future minimum lease payments receivable by the Group under such leases were as follows:

2015 £m

2014 £m

Within one year 14.9 11.9From one to two years 10.8 10.0From two to five years 24.0 23.3After five years 84.8 73.3

134.5 118.5

In addition, the Group’s share of minimum lease payments receivable under non-cancellable operating leases contained within the Group’s joint ventures and associates were £99.5m (2014: £137.8m).

Section 3: Property assets, joint ventures and associates 3.1 Investment properties

Accounting policyInvestment propertiesInvestment properties are properties owned or leased by the Group which are held either for long-term rental growth or for capital appreciation or both. Investment property is initially recognised at cost including related transaction costs and valued bi-annually by professionally qualified external valuers. Any increases or decreases in value are taken directly to the Consolidated Income Statement in the year in which they arise.

For leasehold properties that are classified as investment properties, the associated leasehold obligations are accounted for as finance lease obligations. Properties held under operating leases are accounted for as investment properties as short leasehold properties where the other criteria for recognition are met. Such operating leases are accounted for as if they are finance leases.

Additions to investment properties consist of costs of a capital nature and, in the case of investment properties under development, capitalised interest.

Property disposalsDisposals of investment properties are recognised in the financial statements on the date of unconditional exchange or, where an exchange is conditional, on the date that conditions have been satisfied.

Profits or losses arising on disposal are calculated by reference to the carrying value of the asset at the last revaluation, adjusted for subsequent capital expenditure and selling costs.

Significant estimates and judgementsThe fair value of the Group’s investment properties is the main area within the financial statements where the Board has made significant estimates. The fair value of the Group’s property portfolio is based upon external valuations and is inherently subjective.

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Section 3: Property assets, joint ventures and associates continued3.1 Investment properties continued

Freehold £m

Long leasehold

£m

Short leasehold

£mTotal

£m

Balance 31 March 2013 521.8 35.9 4.8 562.5Additions – capital expenditure 40.3 14.8 – 55.1Additions – new property – – 14.5 14.5Interest capitalised 13.7 – – 13.7Disposals (50.9) (19.1) (4.1) (74.1)Transfer to trading property (22.7) – – (22.7)Revaluation surplus – continuing operations 18.5 3.9 – 22.4Revaluation (deficit)/surplus – discontinued operations (1.7) 0.9 (0.6) (1.4)Balance 31 March 2014 519.0 36.4 14.6 570.0Additions – capital expenditure 2.1 9.8 – 11.9Additions – new property 42.0 40.6 – 82.6Interest capitalised 13.0 – – 13.0Disposals (2.1) (9.6) – (11.7)Transfer to trading property (16.0) – – (16.0)Transfer to property, plant & equipment – (4.6) – (4.6)Revaluation surplus – continuing operations 30.4 10.2 0.6 41.2Balance 31 March 2015 588.4 82.8 15.2 686.4

The historical cost of the Group’s investment properties as at 31 March 2015 was £682.9m (2014: £584.6m), which included capitalised interest of £100.4m (2014: £88.1m).

The average rate used for interest capitalisation is shown in note 2.6.

Investment properties are required to be analysed by level depending on the valuation method adopted, in accordance with IFRS 13 Fair Value Measurement: – Level 1: valuation based on quoted market prices traded in active markets. – Level 2: valuation based on inputs other than quoted prices included within Level 1 that maximise the use of observable data either directly or from market prices or indirectly derived from market prices.

– Level 3: where one or more inputs to valuation are not based on observable market data.

All investment property held by the Group is classified as Level 3 and there have been no transfers between levels of the fair value hierarchy during the year.

The key assumptions made in the valuation of the Group’s development land at Wembley are: – future development costs including construction cost inflation; – future residential sales values including residential sales growth rates; – the implementation strategy for the relevant plots; – the timing and conditions of planning consent; and – the discount rate applied.

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NOTES TO THE ACCOUNTS CONTINUED

Section 3: Property assets, joint ventures and associates continued3.1 Investment properties continuedThe following table shows the valuation technique in measuring the fair value of development land at Wembley, as well as the significant unobservable inputs used.

Valuation technique Significant unobservable inputsInter-relationship between key unobservable inputs and fair value measurement

The fair value is derived from the estimated future rental income and residential sales (in line with the valuer’s growth forecasts) from which are deducted future costs comprising base construction, infrastructure and future planning obligations. The net difference is then discounted at an annual rate. This is then cross checked against relevant land sale transactions on a per acre basis, residential land sales rates per sq ft and land value as a percentage of Gross Development Value (‘GDV’).

Value of Wembley development land £351.1m (2014: £312.2m).

Expected average private residential sales price inflation 3.9% (2014: 5.0%).

Expected average private residential build cost inflation 4.3% (2014: 4.0%).

Private residential sales value; £620 to £698 (2014: £535 to £635) per sq ft NIA.

Private residential direct build cost; £250 to £355 (2014: £240 to £340) per sq ft NIA.

Future site-wide costs £141.7m (2014: £162.0m).

Risk adjusted discount rate of 14.0% (2014: 15.0%).

The estimated fair value would increase if there was:

Expected average private residential sales price inflation was higher.

Expected average private residential build cost inflation was lower.

Private residential sales value was higher.

Private residential direct build costs was lower.

Future site-wide costs are reduced.

Risk adjusted discount rate was lower.

The key assumptions made in the valuation of the Group’s investment properties are: – the amount and timing of future income streams; – anticipated maintenance costs and other landlord’s liabilities; and – an appropriate yield.

The following table shows the valuation technique in measuring the fair value of the Wembley investment assets, as well as the significant unobservable inputs used.

Valuation technique Significant unobservable inputsInter-relationship between key unobservable inputs and fair value measurement

The valuations reflect the tenancy data supplied by the Group along with associated revenue costs and capital expenditure. The fair value of the commercial investment portfolio has been derived from capitalising the future estimated net income receipts at capitalisation rates reflected by recent arm’s length sales transactions.

Value of Wembley investment assets £227.2m (2014: £214.2m).

Gross ERV: £19.1m (2014: £19.6m).

Net Initial Yield: 4.8% (0.0% – 13.9%) (2014: 4.4% (0.0% – 9.4%)).

Reversionary Yield: 7.4% (3.5% – 13.9%) (2014: 8.0% (5.5% – 13.3%)).

Equivalent Yield: 6.9% (5.0% – 14.0%) (2014: 7.5% (5.5% – 11.6%)).

The estimated fair value would increase if there was:

An increase in the Gross ERV.

A decrease in the Net Initial Yield.

A decrease in the Reversionary Yield.

A decrease in the Equivalent Yield.

The relationship between the unobservable inputs and their impact on the fair value measurement is not certain. Changes to the tenancies and/or income profile of an investment asset may also impact the fair value outside one or more of the above inter-relationships according to individual circumstances.

All of the Group’s properties were externally valued as at 31 March 2015 on the basis of Market Value by external, professionally qualified valuers in accordance with the Royal Institution of Chartered Surveyors (‘RICS’) Valuation Professional Standards. Such valuations are carried out every six months. The Group’s land and property holdings at Wembley, Silvertown and Redhill have been valued by Savills Advisory Services Ltd. Other properties have been valued by Cushman & Wakefield, Jones Lang LaSalle Limited, Lambert Hampton Smith and Christie + Co.

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Section 3: Property assets, joint ventures and associates continued3.1 Investment properties continuedA reconciliation of the valuations carried out by the external valuers to the carrying values shown in the Balance Sheet was as follows:

2015 £m

2014 £m

Per valuers’ reports Savills Advisory Services Limited 679.6 636.9Other valuers 98.3 25.3

777.9 662.2Adjustment for properties held in joint ventures and associates and as trading (76.3) (90.6)Investment properties at market value 701.6 571.6Adjustment in respect of rent-free periods and other tenant incentives (14.7) (12.3)Adjustment in respect of acquisition Stamp Duty (1.8) –Adjustment in respect of minimum payment under head leases separately included as a liability in the Balance Sheet 1.3 10.7As shown in the Balance Sheet 686.4 570.0

3.2 Capital commitments As at 31 March 2015, the Group had capital commitments of £53.8m (2014: £19.0m) in relation to development properties, including £31.5m (2014: £nil) payable to Quintain Keystone for the purchase of Emerald Gardens PMR units.

The Group’s share of capital commitments in relation to its joint ventures was £31.5m (2014: £0.1m).

3.3 Trading properties

Accounting policyTrading properties are properties acquired or developed and held for sale and are shown at the lower of cost or net realisable value. The cost of trading properties are those costs directly associated with the acquisition and development of a specific site. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and the estimated costs necessary to make the sale.

Investment properties are transferred to trading properties when there is a change of use evidenced by commencement of development with a view to sale. The transferred amount is the fair value of the property at the date of reclassification.

As at 31 March 2015, properties held for resale had a carrying value of £23.4m (2014: £28.5m), which includes capitalised interest of £0.7m (2014: £2.3m).

During the year, property of £16.0m (2014: £22.7m) was transferred from investment properties to trading property and the Group sold trading properties with carrying values of £22.8m (2014: £5.2m).

On 28 April 2015, post year end, the Group entered into a 50:50 joint venture with Keystone Developers S.A. for development of Alto, the next residential plot at Wembley Park. The consideration under the agreement is £19.0m for the land with a further £8.0m for future associated infrastructure, a total of £27.0m.

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NOTES TO THE ACCOUNTS CONTINUED

Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates

Accounting policyA joint venture is an undertaking in which the Group has a long-term interest and over which it exercises joint control. An associate is an entity in which the Group has significant influence but not control over financial and operating policies. The Group equity accounts for its share of net profit after tax of its joint ventures and associates through the Consolidated Income Statement. The effective portion of changes in the fair value of cashflow hedges within joint ventures less any related tax is recognised in Other Comprehensive Income. The Group’s interest in the net assets of joint ventures and associates is included in the Consolidated Balance Sheet.

Where an asset is transferred to an existing joint venture or the Group disposes of an interest in a subsidiary to a joint venture, the Group recognises a share of the profit equivalent to the interest it has sold to an external party. All such transactions occur at fair value.

Accounting policy – Property valuations (joint ventures and associates)Investment properties are held within Quercus, the Group’s healthcare associate, Quantum, the Group’s science park fund joint venture and the Hilton hotel joint venture.

The joint venture and associate investment properties are valued every six months by professionally qualified valuers in accordance with the Royal Institution of Chartered Surveyors (‘RICS’) Valuation Professional Standards. The Board must ensure that it is satisfied that the valuation of the joint venture and associate properties is appropriate for the financial statements. The principal valuers of the joint venture and associate investment properties are CBRE Limited who values Quantum, Savills (UK) Ltd who values Quercus and Savills Advisory Services Limited who values the Hilton hotel.

The key assumptions made in the valuation of the joint venture investment properties vary depending on the nature of the properties as follows: – for healthcare; expected normalised operating profits, rental cover levels at an appropriate discount rate. – for hotels; forecast trading performance at an appropriate discount rate.

Accounting policy – Trading properties (joint ventures and associates)Trading properties are properties acquired or developed and held for sale and are shown at the lower of cost or net realisable value. The cost of trading properties are those costs directly associated with the acquisition and development of a specific site. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and the estimated costs necessary to make the sale.

Investments in joint ventures and associatesa) The Group’s interest in its joint ventures was as follows:

% of ownership

Country of incorporation Joint venture partners

Quintain Keystone Holdco Limited (‘Quintain Keystone’) (acquired on 14 April 2014) 50.00 United Kingdom Keystone DevelopersQuantum Unit Trust (‘Quantum’) 50.00 Channel Islands Aviva Crest Nicholson BioRegional Quintain LLP (‘OneBrighton’) 50.00 United Kingdom Crest Nicholson HHW (Investment) LP (‘Hilton’) 50.00 United Kingdom Oaktree

The Group’s interest in its associates was as follows:

% of ownership

Country of incorporation Other members

Quercus Healthcare Property Unit Trust (‘Quercus’) 11.22 Channel Islands Aviva Albemarle Retail Properties LLP (‘Albemarle’) 28.65 United Kingdom VariousAqua Trust (‘Aqua’) 50.00 United Kingdom Aviva

Sales of trading properties are recognised in the accounts on the date of unconditional exchange or where an exchange is conditional, on the date that conditions have been satisfied and where there is a continued date for completion.

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Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates continuedb) The movement in investment in joint ventures was as follows:

2015 £m

2014 £m

Opening balance 80.3 356.8Additions 15.4 –Amounts repaid (2.5) (2.6)Amounts repaid by discontinued operation – (2.7)Disposals – (168.7)Reclassified as an associate (34.3) –Reclassified as held for sale – (106.2)Distributions (0.2) (6.3)Provisions released – 2.9Share of profit/(loss), net of tax 1.9 (2.7)Share of profit discontinued operation, net of tax – 8.6Share of other comprehensive income, net of tax – 0.3Share of other comprehensive income discontinued operations, net of tax – 0.9Closing balance 60.6 80.3

On 14 April 2014, the Group entered into Quintain Keystone, a 50:50 joint venture with Keystone Developers S.A. for the development of Emerald Gardens, a residential plot at Wembley Park. The consideration under the agreement was £22.7m for the land with a further £9.5m for future associated infrastructure, a total of £32.2m. During the year the Group granted a £15.0m shareholder loan to Quintain Keystone, at the year end the amount outstanding stood at £12.5m.

Subsequent to the year end, we sold our 50% investment in the Hilton to our joint venture partner, Oaktree, for £40.0m.

The movements in investment in associates were as follows:

2015 £m

2014 £m

Opening balance 1.7 1.5Reclassified from joint ventures 34.3 –Share of (loss)/profit, net of tax (2.7) 0.2Share of other comprehensive income, net of tax (0.2) –Distributions (2.6) –Closing balance 30.5 1.7

During the year Quercus Healthcare Property Unit Trust (‘Quercus’) was reclassified as an associate following a dilution in voting rights held by the Group. The Group’s share of the net assets of Quercus is unchanged at 11.22%.

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NOTES TO THE ACCOUNTS CONTINUED

Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates continuedc) The summarised results of its joint venture operations was as follows:Summarised income statements for the year ended 31 March 2015

Quintain Keystone Quantum Hilton

Group share of individually material joint

ventures

Group share of other

joint ventures

Group share of continuing

joint ventures

100% £m

100% £m

100% £m

50% £m £m £m

Rental income – 1.8 15.8 8.8 – 8.8Income from sale of trading properties – – – – 0.4 0.4Revenue – 1.8 15.8 8.8 0.4 9.2Cost of sales (1.9) (1.2) (6.5) (4.8) (0.4) (5.2)Gross (loss)/profit (1.9) 0.6 9.3 4.0 – 4.0Administrative expenses (0.1) – (6.3) (3.2) – (3.2)Operating (loss)/profit (2.0) 0.6 3.0 0.8 – 0.8Surplus on revaluation of investment properties – 0.6 6.6 3.6 – 3.6(Loss)/profit before net finance expenses and tax (2.0) 1.2 9.6 4.4 – 4.4Finance income – 1.0 – 0.5 – 0.5Finance costs – – (3.0) (1.5) – (1.5)(Loss)/profit before tax (2.0) 2.2 6.6 3.4 – 3.4Tax – (0.3) (2.7) (1.5) – (1.5)(Loss)/profit after tax and total comprehensive income (2.0) 1.9 3.9 1.9 – 1.9

Interest costs of £0.8m in Quintain Keystone have been capitalised in accordance with the accounting policy described in note 2.6.

The summarised income statement for Quercus for the year ended 31 March 2015 was as follows. The other associates’ results are not presented as they are immaterial and contributed a net profit after tax of £0.2m (2014: £0.2m).

Quercus 100%

£m

Group share 11.22%

£m

Rental income 34.8 3.9Income from sale of trading properties 5.3 0.6Revenue 40.1 4.5Cost of sales (5.2) (0.6)Gross profit 34.9 3.9Administrative expenses (6.6) (0.7)Operating profit 28.3 3.2Loss on disposal of investment properties (30.3) (3.4)Deficit on revaluation of investment properties (24.1) (2.7)Finance costs (11.9) (1.3)Loss before tax (38.0) (4.2)Tax 11.6 1.3Loss after tax (26.4) (2.9)

Share of other comprehensive income:Effective portion of changes in fair value of cashflow hedges, net of tax (1.5) (0.2)Total comprehensive income (27.9) (3.1)

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Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates continued Summarised balance sheets as at 31 March 2015

Quintain Keystone

100% £m

Quantum 100%

£m

Hilton 100%

£m

Group share of individually material joint

ventures 50% £m

Group share of other

joint ventures

50% £m

Group share of continuing

joint ventures

£m

Non-current assets:Investment properties – 13.1 62.3 37.7 0.1 37.8Current assets:Cash and cash equivalents 1.3 2.8 2.2 3.1 – 3.1Trading properties 53.5 – – 26.8 – 26.8Other assets 1.1 23.0 2.5 13.3 0.1 13.4Total assets 55.9 38.9 67.0 80.9 0.2 81.1Current liabilities:Trade and other payables (19.7) (1.0) (5.3) (13.0) – (13.0)Non-current liabilities:Deferred tax liability – (0.2) (2.4) (1.3) – (1.3)Non-current financial liabilities (37.3) – (42.2) (39.8) – (39.8)Net (liabilities)/assets (1.1) 37.7 17.1 26.8 0.2 27.0

Represented by:Net (liabilities)/assets (1.1) 37.7 17.1 26.8 0.2 27.0Loans to JVs 25.0 – 42.2 33.6 – 33.6Total investment 23.9 37.7 59.3 60.4 0.2 60.6

The summarised balance sheet for Quercus was as follows. The other associates’ results are not presented as they are immaterial and contributed Group share of net assets of £1.9m (2014: £1.7m).

Quercus 100%

£m

Group share 11.22%

£m

Investment properties 387.7 43.5Deferred tax asset 41.9 4.7Cash and cash equivalents 21.1 2.4Other assets 9.2 1.0Bank loans and other borrowings (current) (53.5) (6.0)Trade and other payables (14.3) (1.6)Bank loans and other borrowings (non-current) (137.2) (15.4)Net assets 254.9 28.6

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NOTES TO THE ACCOUNTS CONTINUED

Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates continued Summarised income statements for the year ended 31 March 2014

Quercus 100%

£m

Quantum 100%

£m

Hilton 100%

£m

Group share of individually material joint

ventures £m

Group share of other

joint ventures

£m

Group share of continuing

joint ventures

£m

Rental income 45.4 1.4 14.2 12.9 0.1 13.0Income from sale of trading properties 2.7 – – 0.3 4.0 4.3Other income – 2.2 – 1.1 – 1.1Revenue 48.1 3.6 14.2 14.3 4.1 18.4Cost of sales (5.3) (1.4) (6.0) (4.3) (4.3) (8.6)Gross profit 42.8 2.2 8.2 10.0 (0.2) 9.8Administrative expenses (6.4) – (5.2) (3.3) – (3.3)Operating profit/(loss) 36.4 2.2 3.0 6.7 (0.2) 6.5Loss from sale of non-current assets (13.4) – – (1.5) – (1.5)(Deficit)/surplus on revaluation of investment properties (46.2) 0.2 – (5.1) – (5.1)(Loss)/profit before net finance expenses and tax (23.2) 2.4 3.0 0.1 (0.2) (0.1)Finance income – 1.0 – 0.5 – 0.5Finance costs (14.2) – (3.0) (3.1) – (3.1)(Loss)/profit before tax (37.4) 3.4 – (2.5) (0.2) (2.7)Tax credit/(charge) – 0.2 (0.2) – – –(Loss)/profit after tax (37.4) 3.6 (0.2) (2.5) (0.2) (2.7)

Share of other comprehensive income:Effective portion of changes in fair value of cashflow hedges, net of tax 2.8 – – 0.3 – 0.3Total comprehensive income (34.6) 3.6 (0.2) (2.2) (0.2) (2.4)

Summarised balance sheets as at 31 March 2014

Quercus 100%

£m

Quantum 100%

£m

Hilton 100%

£m

Group share of individually material joint

ventures £m

Group share of other

joint ventures

£m

Group share of continuing

joint ventures

£m

Non-current assets:Investment properties 509.8 11.6 55.6 90.8 – 90.8Current assets:Cash and cash equivalents 29.1 7.0 1.3 7.5 – 7.5Trading properties 5.4 – – 0.6 0.1 0.7Deferred tax asset 30.3 – 0.4 3.6 – 3.6Other assets 19.0 19.4 0.7 12.1 0.3 12.4Total assets 593.6 38.0 58.0 114.6 0.4 115.0Current liabilities:Trade and other payables (14.3) (2.2) (2.6) (4.0) – (4.0)Current financial liabilities (19.6) – – (2.2) – (2.2)Non-current liabilities:Non-current financial liabilities (254.0) – (42.2) (49.6) – (49.6)Net assets 305.7 35.8 13.2 58.8 0.4 59.2

Represented by:Net assets 305.7 35.8 13.2 58.8 0.4 59.2Loans to JVs – – 42.2 21.1 – 21.1Total investment 305.7 35.8 55.4 79.9 0.4 80.3

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Section 3: Property assets, joint ventures and associates continued3.4 Investments in joint ventures and associates continued During the year, the Group received the following fees in respect of services provided to its joint ventures and associates:

2015 £m

2014 £m

Quercus 1.3 2.0Quintain Keystone 0.8 –Quintessential Homes (Wembley) LLP – 0.1iQ Unit Trust 0.4 2.0Greenwich Peninsula Regeneration Limited (‘GPRL’) – 1.3

2.5 5.4

During the year, the Group received the following interest on its loan notes to its joint ventures and associates:

2015 £m

2014 £m

GPRL – 0.8Greenwich N0204 – 0.7Hilton 1.5 1.5Albemarle – 0.9

1.5 3.9

Section 4: Acquisitions and disposals4.1 Discontinued operationsDuring the year the Group sold its 50% interest in iQ to its joint venture partner, Wellcome Trust. The sale completed on 16 May 2014 and consideration consisted of £106.4m in cash, which reflected the Group’s share of the net asset value of iQ as at 31 March 2014. The Group’s investment in iQ was classified as an asset held for sale at 31 March 2014.

William Rucker is also the Chief Executive of Lazard & Co., Holding Limited (‘Lazard’). Lazard were engaged to provide advisory support with respect to the disposal of iQ. Fees to Lazard of £1.3m were incurred in the year.

During the prior year the Group sold its interest in Greenwich, primarily being its 40% interest in GPRL sold to its joint venture partner, Knight Dragon Limited and its Sequel property portfolio.

The results for the discontinued operations are shown in note 2.2.

2015 £m

2014 £m

Cashflows (used in)/from discontinued operationsNet cash from operating activities 0.3 9.0Net cash from investing activities 104.7 311.4Net cash used in financing activities – (38.5)Effect on cashflows 105.0 281.9

2015 pence

2014 pence

Earnings per share – discontinued operations (pence):Basic and diluted – 8.1

4.2 Intangible assetsThe intangible asset relates to the Grafton business acquired in February 2012, including the WELPUT property adviser contract. This is being amortised over ten years; being the term remaining on this key contract at acquisition. At 31 March 2015 the unamortised value of this intangible asset in the Consolidated Balance Sheet was £5.2m (2014: £6.0m). The amortisation is included in ‘cost of sales’ in the Consolidated Income Statement.

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NOTES TO THE ACCOUNTS CONTINUED

Section 5: Other assets and liabilities5.1 Non-current receivables

Accounting policyNon-current receivables comprise loans and receivables due in more than one year and long-term investments in property related structures where the Group does not have control or significant influence. Loans and receivables are held at amortised cost using the effective interest rate method. Property related investments are designated as available for sale, shown at fair value. Adjustments to fair value are recognised in other comprehensive income except for impairments which are reflected in the Consolidated Income Statement.

ImpairmentThe carrying values of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication becomes evident, the asset’s recoverable amount is estimated and an impairment loss recognised in the Consolidated Income Statement whenever the carrying amount of the asset exceeds its recoverable amount.

The recoverable amount of an asset is the greater of its fair value less sale costs and its value-in-use. The value-in-use is determined as the net present value of the future cashflows expected to be derived from the asset, discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

The movement in other non-current receivables was as follows:

2015 2014

Loans at amortised

cost £m

Investments at fair value

£m Total

£m

Loans at amortised

cost £m

Investments at fair value

£mTotal

£m

Opening balance 2.9 8.1 11.0 48.6 5.5 54.1Additions – 5.3 5.3 – 5.8 5.8Repayment – – – (1.2) – (1.2)Reclassified as current receivable – – – – (3.1) (3.1)Impairment – (0.5) (0.5) (1.3) – (1.3)Disposals (2.9) – (2.9) (43.2) – (43.2)Revaluation surplus/(deficit) – 1.4 1.4 – (0.1) (0.1)Closing balance – 14.3 14.3 2.9 8.1 11.0

On 17 January 2014, Quintain acquired 8,269 units in the West of London Property Unit Trust (‘WELPUT’) for £5.0m which are held as ‘Investments at fair value’. On 8 December 2014, Quintain acquired 2,733 more units in WELPUT for £1.9m. On 30 March 2015, Quintain acquired a further 4,707 units for £3.4m. As at 31 March 2015, the Group’s investment in WELPUT was valued at £12.0m (2014: £5.3m).

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Section 5: Other assets and liabilities continued5.2 Current trade and other receivables

Accounting policyTrade and other receivables are recognised at amortised cost. A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able to collect all amounts due.

2015 £m

2014 £m

Trade receivables 7.0 6.5Amounts due from related parties 4.5 3.5Other receivables 9.4 7.9Trade and other receivables 20.9 17.9Prepayments and accrued income 13.8 12.9Loans at amortised cost 8.2 8.2Investments at fair value – 3.1Interest rate caps at fair value – 0.2

42.9 42.3

The Group granted unsecured loans totalling £10.7m to Albemarle Retail Properties LLP which carry a coupon of 10% per annum. In the prior year an impairment provision of £2.5m was provided against these loans. The Board has assessed the recoverability of these loans at the balance sheet date and has concluded this remains appropriate. On 12 May 2015, post year end, the Group increased its interest in Albemarle Retail Properties LLP to 55.13% making it a subsidiary undertaking. The significant assets and liabilities acquired were investment properties valued at £25.6m, bank debt of £14.3m and a mezzanine loan fair valued at £10.5m of which the Group holds £8.2m. Albemarle Retail Properties LLP generated profit before interest of £1.4m in the year ended 31 March 2015.

The ageing of trade and other receivables and loans at amortised cost was as follows:

2015 2014

Gross £m

Impairment £m

Net £m

Gross £m

Impairment £m

Net £m

Trade and other receivables:Not past due 19.9 – 19.9 10.0 – 10.0Past due less than one month 0.5 – 0.5 6.1 – 6.1Past due one to three months 0.4 – 0.4 – – –Past due three to six months 0.1 (0.1) – 1.9 (0.2) 1.7Past due over six months 0.3 (0.2) 0.1 0.3 (0.2) 0.1

21.2 (0.3) 20.9 18.3 (0.4) 17.9Loans at amortised cost:Non-current – – – 4.2 (1.3) 2.9Current 10.7 (2.5) 8.2 10.7 (2.5) 8.2

31.9 (2.8) 29.1 33.2 (4.2) 29.0

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NOTES TO THE ACCOUNTS CONTINUED

Section 5: Other assets and liabilities continued5.2 Current trade and other receivables continuedThe following amounts due from related parties, which are unsecured, are included in trade and other receivables:

2015 £m

2014 £m

Quercus 1.0 1.0iQ Unit Trust – 0.6Quantum 0.4 0.5Hilton 3.0 1.4Quintain Keystone 0.1 –

4.5 3.5

5.3 Credit risk The Group’s exposure to credit risk arises from potential financial loss if a tenant or counterparty to a financial instrument fails to meet its contractual obligations. The credit rating of counterparties to financial instruments is kept under review, particularly in the light of the current economic climate.

The Group’s activities are focused exclusively in the United Kingdom and the Channel Islands. Within this geographical area, its exposure to credit risk arising from trade and other receivables is influenced by the individual characteristics of each tenant and debtor. As at 31 March 2015, the Group’s 20 largest tenants within its directly held properties and its joint ventures accounted for 40.4% (2014: 50.8%) of passing rents.

The Group operates a policy whereby the creditworthiness of each tenant is assessed prior to lease or pre-lease terms being agreed. The process includes seeking external ratings where available and reviewing financial information in the public domain. In certain cases, the Group will require collateral to support these lease obligations. This usually takes the form of a rent deposit, parent company guarantee or a bank guarantee.

Rent collection is outsourced to managing agents who report regularly on payment performance and provide the Group with intelligence on the continuing financial viability of tenants. Arrears are monitored on a weekly basis by the internal property management teams and a strategy for dealing with significant potential defaults is presented on a timely basis by the property managers. Outstanding tenant balances are reviewed on a quarterly basis for impairment with no further charge being made in the current year (2014: £0.4m).

The Group’s maximum exposure to the credit risk arising from non-current and current receivables amounts to £29.1m (2014: £29.0m). The Board does not believe there is a significant credit risk in respect of those financial assets that are not yet due and not impaired.

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Section 5: Other assets and liabilities continued5.4 Other payables (non-current)

2015 £m

2014 £m

Unsecured loan notes 1.4 4.2Interest rate swaps at fair value 0.1 0.2Other creditors 1.7 2.8

3.2 7.2

The Company acquired Grafton Advisors (2006) LLP in February 2012 and, in addition to the cash consideration, the Grafton management team was issued with Unsecured Loan Notes (‘loan notes’) which are redeemable to the extent that certain fees, including performance fees arising from WELPUT, are earned over five years, with the maximum amount receivable by the Grafton management team being £5.0m. The loan notes carry 2% coupon and the holders have the right to apply to proceeds in subscribing for Quintain ordinary shares at a price of 55p per share. During the current year, loan notes of £2.8m were settled in accordance with this agreement and subsequently redeemed for shares. Nigel Kempner, an executive director, is entitled to 53.34% of the loan notes.

5.5 Current trade and other payables

Accounting policyNon-derivative trade and other payables are non-interest bearing and are recognised at amortised cost.

2015 £m

2014 £m

Trade payables 3.7 3.3Other payables 0.4 1.2Accruals and deferred income 21.7 23.0Interest rate swaps at fair value 0.4 0.4

26.2 27.9

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NOTES TO THE ACCOUNTS CONTINUED

Section 6: Funding6.1 Bank loans and other borrowings

Accounting policy – interest-bearing borrowingsInterest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Borrowings are subsequently stated at amortised cost with any difference between the amount initially recognised and the redemption value being recognised in the Consolidated Income Statement over the period of the borrowings on an effective interest rate basis.

2015 £m

2014 £m

Current liabilities:Overdraft 12.8 –Non-current liabilities:Bank loans 77.5 101.7Bond 115.0 115.0

192.5 216.7205.3 216.7

Represented by:Bank loans (including the Bond) 208.0 219.2Unamortised borrowing costs (2.7) (2.5)

205.3 216.7

The loans are secured by floating charges over assets owned by subsidiary undertakings. During the year our bilateral banking facilities were extended from March 2016 to the last quarter of 2018 and into 2019. The key terms are broadly in line with the previous facilities with headline margins of 190 basis points.

The maturity profile of the Group’s debt was as follows:

2015 Drawn

debt £m

2014 Drawn

debt £m

2015 Undrawn facilities

£m

2014 Undrawn

facilities £m

Within one year 12.8 – 7.2 –From one to two years – – – 5.0From two to five years 80.2 102.6 160.0 240.5After five years 115.0 116.6 – –

208.0 219.2 167.2 245.5

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Section 6: Funding continued6.1 Bank loans and other borrowings continuedThe interest rate profile of the Group’s debt before interest rate swap arrangements at the Balance Sheet date was as follows:

Percent2015

£m2014

£m

2.0 – 3.0 92.8 97.63.0 – 4.0 0.2 6.64.0 – 5.0 – –5.0 – 6.0 – –6.0 – 7.0 115.0 115.0

208.0 219.2

After taking account of interest rate swap arrangements, the risk profile of the Group’s borrowings was as follows:

2015 2014

Fixed £m

Capped £m

Total debt £m

Fixed £m

Capped £m

Total debt £m

Sterling 165.0 43.0 208.0 165.0 54.2 219.2

The weighted average interest rate and the weighted average period of the Group’s fixed rate debt were as follows:

2015 %

2014 %

2015 years

2014 years

Sterling 5.60 5.63 4 5

The Group’s key financial covenants are an interest cover covenant (bank debt only), which requires the Group’s adjusted operating profit plus realised revaluation surpluses on disposal divided by adjusted net finance expenses excluding finance lease interest to be greater than 1.25 times, and a gearing covenant, which requires the net borrowings of the Company and its wholly-owned subsidiaries to be less than 110% of its equity. As at 31 March 2015, the Group has a gearing ratio of 32% (2014: 35%) and the interest cover ratio is not applicable at the year end date as there is net interest receivable per the banking covenant definition (2014: 20.5 times).

The maturity profile of the Group’s share of debt held within its joint ventures and associates was as follows:

2015 Quintain Keystone

£m

2015 Quercus

£m

2014 Quercus

£m

Less than one year – 6.0 2.2From one to two years – – 8.8From two to five years 6.6 15.4 20.2

6.6 21.4 31.2

The debt relating to the Quintain Keystone joint venture is secured over the residential development.

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NOTES TO THE ACCOUNTS CONTINUED

Section 6: Funding continued6.2 Obligations under finance leases

Accounting policyLeases of assets where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in liabilities. The finance charges are charged to the Consolidated Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Finance lease obligations in respect of rents payable on leasehold properties were payable as follows:

2015 2014

Minimum lease

payments £m

Interest £m

Present value of minimum

lease payments

£m

Minimum lease

payments £m

Interest £m

Present value of minimum

lease payments

£m

Within one year 0.2 (0.1) 0.1 0.8 (0.8) –

From one to two years 0.2 (0.1) 0.1 0.9 (0.8) 0.1From two to five years 0.5 (0.2) 0.3 2.5 (2.0) 0.5From five to 25 years 1.0 (0.7) 0.3 14.1 (13.2) 0.9After 25 years 2.1 (1.6) 0.5 27.1 (17.9) 9.2

4.0 (2.7) 1.3 45.4 (34.7) 10.7

The net carrying amount of the leasehold properties is shown in note 3.1.

6.3 Maturity of contractual cashflows of financial liabilities

As at 31 March 2015

Bank loans (including the Bond

and interest) £m

Trade and other

payables £m

Interest rate swaps

£m

Obligations under finance

leases £m

Non-current liabilities:

Other creditors

£mTotal

£m

Within one year 23.1 4.1 0.4 0.2 – 27.8From one to two years 9.4 – 0.1 0.2 1.4 11.1From two to five years 106.5 – – 0.5 1.7 108.7From five to 25 years 117.5 – – 1.0 – 118.5After 25 years – – – 2.1 – 2.1

256.5 4.1 0.5 4.0 3.1 268.2

As at 31 March 2014

Bank loans (including the Bond

and interest) £m

Trade and other

payables £m

Interest rate swaps

£m

Obligations under finance

leases £m

Non-current liabilities:

Other creditors

£mTotal

£m

Within one year 10.7 4.5 0.4 0.8 – 16.4From one to two years 10.7 – 0.2 0.9 0.1 11.9From two to five years 125.1 – – 2.5 6.9 134.5From five to 25 years 126.6 – – 14.1 – 140.7After 25 years – – – 27.1 – 27.1

273.1 4.5 0.6 45.4 7.0 330.6

As at 31 March 2015, the fair values of the Group’s financial assets and liabilities were equal to their book values with the exception of non-current liabilities: bank loans and other borrowings which have a negative fair value adjustment of £10.2m (2014: £8.4m) as assessed by JC Rathbone Associates Limited.

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Section 6: Funding continued6.4 Financial instruments

Accounting policyDerivative financial instrumentsThe Group uses derivative financial instruments to manage its interest rate risk. These financial instruments are recognised initially at fair value and subsequently remeasured at fair value.

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. When a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the Consolidated Income Statement within finance income/expense. The amount accumulated in equity is reclassified to the Consolidated Income Statement in the same period that the hedged item affects profit or loss.

i) Designated cashflow hedgesAs at 31 March 2015, the maturity profile of the Group’s interest rate swaps, which were designated as hedging instruments with all fair value movements taken to other comprehensive income, was as follows:

2015 £m

2014 £m

Within one year – –From one to two years 50.0 –From two to five years – 50.0

50.0 50.0

The weighted average contract rate was 1.61% (2014: 1.61%). The £115m seven year 6.5% Bond is not included in this analysis but represents a fixed rate instrument.

ii) Interest rate capsAs at 31 March 2015, the maturity profile of the Group’s interest rate caps, which were not designated as hedging instruments with therefore all fair value movements taken to the Consolidated Income Statement, was as follows:

2015 £m

2014 £m

Within one year – –From one to two years 150.0 150.0

150.0 150.0

The weighted average contract rate was 2.77% (2014: 2.77%).

iii) Joint ventures and associatesAs at 31 March 2015, the maturity profile of swaps within Quercus was as follows:

2015 £m

2014 £m

Within one year – 74.9From one to two years – –From two to five years 100.0 150.0

100.0 224.9

The weighted average contract rate was 1.08% (2014: 1.01%).

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NOTES TO THE ACCOUNTS CONTINUED

Section 6: Funding continued6.5 Financial risk factorsThe Group is exposed to the following types of risk from its use of financial instruments:Credit risk (see note 5.3)Liquidity riskMarket risk

This note presents information about the nature of the Group’s exposure, its objectives, policies and processes for measuring and managing risk and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework as described in the Risk Management section of the Annual Report. The Board has established a Group Risk Committee which meets two times a year and is responsible for developing and monitoring the Group’s risk management policies. The Committee reports regularly to the Board in relation to its activities.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group’s Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Liquidity riskLiquidity risk is the risk that the Group will not be able to meet its financial obligations as these fall due.

Cash levels are monitored to ensure sufficient resources are available to meet the Group’s operational requirements. The Group has a £20m overdraft facility to manage day-to-day cash movements. Surplus cash is used to reduce the overdraft.

The Group actively pursues a policy of recycling cash through the forward funding of developments, land sales and the introduction of joint venture partners in order to minimise borrowing.

The Group’s policy is to finance its activities using equity and medium-term debt, the proportions depending on the profile of the operational and financial risks to the business. The Company generally borrows on an unsecured basis on the strength of its covenant but with floating charges over the assets of its subsidiaries.

Market riskIn relation to the Group, market risk arises mainly from the impact that changes in interest rates might have on the Group’s cost of borrowing. Excluding amortisation of arrangement fees, the weighted average rate of interest relating to the Group’s debt as at 31 March 2015 was 4.9% (2014: 4.2%).

The Group does not speculate in treasury products and only uses these to limit the impact of potential interest rate fluctuations. For borrowings at floating rates of interest, financial instruments are used to hedge the exposure to interest rate fluctuations. As at 31 March 2015, 79.3% (2014: 75.3%) of the Group’s net debt was fixed or covered by interest rate swaps. Any residual risk is hedged by the interest rate caps held by the Group. Further information on the Group’s financial instruments is given in note 6.4.

As at the year end, the fair values of the Group’s outstanding derivative financial instruments, as shown in note 5.2, 5.4 and 5.5, have been estimated by JC Rathbone Associates Limited, financial risk consultants, by calculating the present value of future cashflows, using appropriate market discount rates, representing Level 2 fair value measurements as defined by IFRS 13, ‘Fair Value Measurements’. The investments held at fair value as presented in note 5.1 consist of investments where quoted prices are available but in markets that are not considered active; therefore these are considered Level 3 fair value measurements. All other financial liabilities and assets are deemed to be Level 3.

The Group is also exposed to market rate risk through the activities of its joint ventures and associates, which borrow at variable rates and use financial instruments to safeguard against market movements in rates. This is disclosed in note 6.4 in respect of the Group’s interests in Quercus.

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Section 6: Funding continued6.5 Financial risk factors continuedSummary of the impact of a movement of 50 basis points on the cost of Group debt:

2015 2014

Increase £m

Decrease £m

Increase £m

Decrease £m

Income Statement:Interest expense on bank debt (0.1) 0.1 (0.6) 0.6Change in fair value of ineffective caps – – 0.3 (0.2)(Decrease)/increase in Group profit or loss (0.1) 0.1 (0.3) 0.4

Other Comprehensive Income:Effective portion of changes in fair value of cashflow hedges 0.4 (0.4) 0.5 (0.5)Increase/(decrease) in Group net assets 0.3 (0.3) 0.2 (0.1)

Capital management The Board’s policy is to maintain a strong capital base with a view to underpinning investor, creditor and market confidence and sustaining the future development of the business. Capital consists of ordinary shares, other capital reserves and retained earnings.

To this end, the Board monitors the Group’s performance in terms of its key performance measures at both a corporate and individual asset level and sets internal guidelines for interest cover and gearing. The Board has set a minimum target for interest cover of 1.5x as against a cover required under banking covenants of 1.25x and a maximum level of gearing of 90% as against 110% under banking covenants. The executive directors monitor the Group’s current and projected financial position against these guidelines.

There were no changes in the Group’s approach to capital management during the financial year or the comparative year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements other than those referred to above in connection with the Group’s financing arrangements.

6.6 Share capitalNumber of shares

m

Nominal value

£m

Allotted, called up and fully paid:In issue as at 31 March 2014 521.5 130.2Issue of shares under shared-based payment schemes and loan note redemption 4.6 1.3In issue as at 31 March 2015 526.1 131.5

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NOTES TO THE ACCOUNTS CONTINUED

Section 6: Funding continued6.6 Share capital continuedThe movement in the year in the number and weighted average exercise price of outstanding options and awards was:

2015 2014

Number of shares

m

Weighted average

exercise price

pence

Number of shares

m

Weighted average exercise

price pence

In issue as at 1 April 5.2 12.8 2.6 25.0Issue of new awards 1.8 – 2.7 –Options exercised (0.1) 25.0 – –Options lapsed (4.0) 27.2 (0.1) 180.0In issue as at 31 March 2.9 – 5.2 12.8

The weighted average share price at the date of exercise for share options exercised during the year was £0.25 (2014: £nil). The options and awards outstanding as at 31 March 2015 had an average remaining contingent life of 1.2 years (2014: 2.2 years). Details of the Group’s share-based payment schemes are disclosed in the Remuneration Report and note 7.3.

6.7 Other reserves i) Other capital reservesThe analysis of other capital reserves was as follows:

2015 £m

2014 £m

Capital redemption reserve 2.1 2.1Merger reserve 106.0 106.0Revaluation reserve 1.4 (1.1)

109.5 107.0

Capital redemption reserveThe capital redemption reserve reflects the nominal value of shares purchased by the Group for cancellation.

Merger reserveThe merger reserve has arisen following corporate acquisitions where the Group’s equity has formed all or part of the consideration and represents the premium on the shares issued less costs.

Revaluation reserveThe revaluation reserve comprises the movement in fair value on available for sale financial assets.

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Section 6: Funding continued6.7 Other reserves continuedii) Own shares reserve

Accounting policyTransactions of the Group-sponsored ESOP Trusts, The Quintain Group Employee Benefit Trust and the Quintain Estates and Development Deferred Bonus Plan Trust, are included in the Group financial statements. In particular, the Trusts’ purchase of shares in the Company and shares acquired as treasury shares are debited directly to equity.

As at 31 March 2015, ESOP Trusts held 2.2m (2014: 2.2m) shares in the Company which had been purchased in the market at a cost of £7.8m (2014: £7.8m). The purpose of the Trusts is to acquire and hold shares which will be transferred to employees to meet future obligations under the Group employee share-based payment schemes as set out in note 7.3 and share-based bonus entitlements. As at 31 March 2015, these shares had a market value of £2.1m (2014: £2.3m). The Quintain Group Employee Benefit Trust has waived the right to receive dividends.

Section 7: Staff costs, key management and employee benefits7.1 Staff costs and numbersStaff costs are included in both cost of sales and administrative expenses. Gross staff costs were as follows:

2015 £m

2014 £m

Wages and salaries 10.3 12.0Less amount capitalised (1.3) (1.4)Total costs relating to share-based payments 1.0 0.6Provision for national insurance on unexercised share options and rights – 0.1Social security costs 1.1 1.3Pension costs 0.8 0.7Employment termination costs – 0.2Other employment costs 1.4 0.8

13.3 14.3Cost of sales 4.0 4.0Administrative expenses 9.3 10.3

13.3 14.3

Contributions to employees’ personal plans are charged to the Consolidated Income Statement as incurred.

Details of directors’ emoluments, pensions and entitlements to share options are contained in the Remuneration Report.

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NOTES TO THE ACCOUNTS CONTINUED

Section 7: Staff costs, key management and employee benefits continued7.1 Staff costs and numbers continuedThe average number of persons employed by the Group during the year was as follows:

2015 2014

Total1 88 122

1 Excluded from the total above are staff employed by Clifton Care Home Limited, a wholly-owned subsidiary based in Jersey. Average number of persons employed was 40 (2014: 40) and these staff costs are presented in cost of sales.

Included in the prior year balances above are an average of six Quintain employees who transferred to iQ under TUPE on completion of the disposal on 16 May 2014.

Staff are allocated between cost of sales and administrative expenses as follows:

2015 2014

Cost of sales 25 33Administrative expenses 63 89

88 122

7.2 Key management personnel The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the applicable categories specified in IAS 24, ‘Related Party Disclosures’.

2015 £m

2014 £m

Short-term employee benefits 2.8 2.7Costs relating to share-based payment schemes 0.8 0.2Post-employment benefits 0.2 0.1Directors’ remuneration included in administrative expenses (note 2.4) 3.8 3.0

The members of the Board are the only key management personnel as defined under IAS 24.

7.3 Share-based compensation

Accounting policy Share-based payment schemeThe fair value of equity rights is estimated using the Black Scholes and binomial models at the date of grant to directors and staff and is dependent on factors such as the exercise price, expected volatility, option price and risk free interest rate. The fair value is then amortised through the Consolidated Income Statement on a straight-line basis over the vesting period. Expected volatility is determined based on the historic share price volatility (market price) for the Company on the grant date over a period matched to the expected life of the awards.

The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture is due only to the share price not achieving the threshold for vesting.

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Section 7: Staff costs, key management and employee benefits continued7.3 Share-based compensation continuedNo share options were granted in the year. As at 31 March 2015, the following commitments to issue shares to employees under various share-based payment schemes remained outstanding:

Date of grantNumber of

shares

Grant date fair value price per

share pence

Exercise price

per share pence

Exercise period

from

Exercise period

to

Long Term Incentive Plan (LTIP 2011)1

22.09.11 (Share award part of the LTIP) 120,000 42.3 – 22.09.16 n/a120,000

Quintain Incentive Plan22.07.13 (Element A)2 531,360 65.1 – Note2 n/a22.07.13 (Element B) 920,062 58.6 – 22.07.16 n/a23.05.14 (Element A)2 736,579 101.9 – Note2 n/a23.05.14 (Element B) 587,398 91.7 – 23.05.17 n/a

2,775,399Total 2,895,399

1 On 19 May 2015, awards over 120,000 shares lapsed as the Remuneration Committee determined that the performance conditions for the three years ended 31 March 2015 could not be met. These are excluded from the above analysis.

2 See the narrative description of Element A for details of exercise dates.

The Quintain Estates and Development PLC 2013 Incentive PlanThe Quintain Estates and Development PLC 2013 Incentive Plan (the ‘Quintain Incentive Plan’) has two elements: Element A and Element B. The maximum annual Company contribution a participant can earn under the Plan in any year is 300% of base salary. The Company contribution is earned based on the satisfaction of a combination of financial, operational and shareholder return performance conditions. Payments under the Plan are as follows:

Element A: – up to 200% of base salary can be earned under Element A; – 50% or 60% of the cumulative balance held in the participant’s Plan account under Element A is paid for the first three Plan years with 100% of the balance paid at the end of the fourth Plan year;

– any unpaid balance will be converted into shares using the 30 day average share price at the end of the relevant Plan year; and – 50% of the unpaid balance will be at risk of forfeiture each Plan year where the minimum performance targets set by the Remuneration Committee are not met.

Deferred shares under Element A will be valued at the relevant measurement date set by the Plan rules using an option pricing model with the resulting fair value calculated being expensed evenly over the year in which the contribution is earned and the deferred period, which is up to three years.

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NOTES TO THE ACCOUNTS CONTINUED

Section 7: Staff costs, key management and employee benefits continued7.3 Share-based compensation continuedElement B: – up to 100% of base salary can be earned under Element B; – shares will be awarded each Plan year based on the Company contribution earned. These shares will be subject to the following conditions:

– a holding restriction which provides that no shares may be sold (except to pay for tax) for five years following the date of grant; and – continued employment until the third anniversary of the date of grant.

Shares awarded under Element B will be valued at the relevant measurement date set by the Plan rules using an option pricing model with the resulting fair value calculated being expensed evenly over the year in which the contribution is earned and the three year deferred period.

Long Term Incentive Plan (LTIP 2011)The Plan was approved by shareholders of the Company in September 2011 on the following terms:

a) Share award part of the LTIPi) Participation was initially restricted to executive directors. ii) Individual awards were limited to 200% of his or her basic annual remuneration except in exceptional circumstances where the

limit may be exceeded up to a maximum of 300%.iii) Awards were split into three separate tranches. Subject to satisfaction of performance conditions, 40%, 30% and 30% of the

awards may vest three, four and five years from the date of grant, respectively. The awards would lapse to the extent that the performance conditions were not satisfied over these periods.

b) Share option part of the LTIPi) Participation was available to all employees. ii) Share options would vest no earlier than three years after the date of grant subject to satisfaction of performance condition over

a three year period, and would lapse to the extent the performance condition was not satisfied. Once awards had vested, options remain exercisable until the seventh anniversary of grant. All unexercised options would lapse at the end of the exercise period.

In any ten year period, no more than 10% of the Company’s issued ordinary share capital may be issued or issuable under the LTIP and all other share plans adopted by the Company.

Following the first grant of options and awards under the LTIP in September 2011, no further awards were made and there is no intention to operate the LTIP in future.

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Section 8: Company balance sheet and notes8.1 Company balance sheetAs at 31 March 2015

Notes2015

£m2014

£m

Fixed assetsTangible fixed assets 2.6 0.3Fixed asset investments 8.4 353.3 346.9

355.9 347.2

Current assetsDebtors 8.5 869.0 846.1Cash at bank and in hand 0.4 3.7

869.4 849.8Creditors: amounts falling due within one year 8.6 (644.2) (586.5)Provisions for liabilities and charges 8.8 (2.6) (1.1)Net current assets 222.6 262.2Total assets less current liabilities 578.5 609.4Creditors: amounts falling due after more than one year 8.7 (80.1) (106.2)Net assets 498.4 503.2Capital and reservesCalled up share capital 8.12 131.5 130.2Share premium account 8.13 138.9 137.3Other capital reserves 8.13 108.1 108.1Cashflow hedge reserve 8.13 (0.5) (0.6)Fair value reserve 8.13 1.7 (1.1)Profit and loss account 8.13 126.5 137.1Investment in own shares 8.13 (7.8) (7.8)Shareholders’ funds 8.14 498.4 503.2

Approved by the Board of Directors on 21 May 2015 and signed on its behalf by:

WILLIAM RUCKER MAXWELL JAMESChairman Chief Executive

Company registration no. 2694983

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NOTES TO THE ACCOUNTS CONTINUED

Section 8: Company balance sheet and notes continued8.2 Profit for the yearAs permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company is not presented as part of these financial statements. The result for the year attributable to equity shareholders dealt within the financial statements was a loss of £11.4m (2014: profit £71.5m). The Company had no employees in the year (2014: none).

Amounts paid to the Company’s auditor in respect of the services to the Company, other than as the auditor of the Company’s financial statements, have not been disclosed as the information is required instead to be disclosed on a consolidated basis in note 2.9 of the Group financial statements.

8.3 Accounting policiesThe following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements:

i) Basis of preparationThe financial statements have been prepared in accordance with applicable accounting standards (United Kingdom Generally Accepted Accounting Practice) and under the historical cost accounting rules except that other fixed asset investments and derivative financial instruments have been stated at fair value.

ii) Going concernThe Company’s financial statements have been prepared on a going concern basis which assumes that the Company will continue to meet its liabilities as these fall due. As the Company is party to the loan arrangements of the Group similar risks and uncertainties apply and therefore the going concern paragraphs on page 87 of the Group financial statements are equally relevant to the Company.

iii) Turnover and cost of salesTurnover is stated net of VAT and comprises fees and commissions receivable from participating interests. Fees from asset and development management relate to base and performance fees receivable in respect of asset management and procurement fees. Performance fees are recognised when it is certain that performance criteria have been met.

iv) Tangible fixed assetsThese assets comprise long leasehold property, fixtures, fittings and equipment and are carried at cost less accumulated depreciation and impairment.

Depreciation is charged on fixtures, fittings and equipment on a straight-line basis over the useful life of these assets estimated at between three and ten years.

v) InvestmentsInvestments in subsidiaries, joint ventures and associates are held in the Company balance sheet at cost and reviewed for impairment.

Other investments are shown at fair value. Revaluation movements are recognised through equity, unless the impairment is impaired and revaluation movements are recognised in the profit and loss account.

vi) Impairment of non-financial assetsAn impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

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Section 8: Company balance sheet and notes continued

8.3 Accounting policies continuedvii) TaxationThe charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred taxation is recognised, without discounting, for all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19, ‘Deferred Taxation’. Deferred tax assets are recognised to the extent that they are considered recoverable.

viii) Own shares held by the CompanyPurchase of own shares held by the Company are debited directly to equity.

ix) Own shares held by ESOP TrustsTransactions of the Group-sponsored ESOP Trust are included in the financial statements. In particular, the Trust’s purchases of shares in the Company are debited directly to equity.

x) Financial instruments DebtorsDebtors are recognised at invoiced values less provisions for impairment. A provision for impairment of debtors is established where there is objective evidence that the Company will not be able to collect all amounts due according to the agreed terms of the receivables concerned.

Cash at bank and in handCash at bank and in hand consists of cash in hand, deposits with banks and other short-term, highly liquid investments with original maturities of three months or less.

Creditors: amounts falling due within one yearCreditors due within one year are non-interest bearing and are recognised at invoiced amounts.

Creditors: amounts falling due after more than one yearThese creditors consist of interest bearing borrowings, which are recognised initially at fair value less attributable transaction costs. Borrowings are subsequently stated at amortised cost with any difference between the amount initially recognised and the redemption value being recognised in the profit and loss account over the period of the borrowings on an effective interest rate basis.

Derivative financial instrumentsThe Company uses derivative financial instruments to help manage its interest rate risk. These derivative financial instruments are recognised initially at fair value and subsequently remeasured. The gain or loss on remeasurement to fair value is recognised immediately in the profit and loss account, unless the derivatives qualify for hedge accounting as cashflow hedges in which case the effective element of the gain or loss is recognised directly through reserves in a hedging reserve.

The fair value of derivative financial instruments is the estimated amount that the Company would receive or pay to terminate the instrument at the balance sheet date, taking account of current interest rates and the current creditworthiness of the counterparties.

The Company’s derivative financial instruments are shown in these accounts at fair value as derived by JC Rathbone Associates Limited, financial risk consultants, based on market prices, estimated future cashflows and forward rates as appropriate.

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NOTES TO THE ACCOUNTS CONTINUED

Section 8: Company balance sheet and notes continued

8.3 Accounting policies continuedxi) Share-based paymentsThe fair value of equity rights is estimated using the Black Scholes and binomial models at the date of grant to the directors and staff and is dependent on factors such as the exercise price, expected volatility, option price and risk free interest rate. The fair value is then amortised to the profit and loss account on a straight-line basis over the vesting period. Expected volatility is determined based on the historical share price volatility (market price) for the Company on the grant date over a period matched to the expected life of the awards.

xii) GuaranteesWhere the Company enters into financial guarantee contracts to guarantee the indebtedness of obligations of its subsidiaries, the guarantee contract is treated as a contingent liability until such time as it becomes probable that the guarantor will be required to make payments under the guarantee.

xiii) Developments expected in future accounting periodsFor accounting periods beginning 1 April 2015, FRS 100, FRS 101 and FRS 102 replace existing UK financial reporting requirements for Companies not adopting IFRS. The Company has elected to apply FRS 101 for the year ending 31 March 2016 subject to shareholder approval. The results for the year ended 31 March 2015 will then be restated under FRS 101.

8.4 Fixed asset investmentsShares in

subsidiary undertakings

£m

Shares in associates

£mOther

£mTotal

£m

Cost or valuationBalance 1 April 2014 339.6 0.1 7.2 346.9Additions 0.2 – 5.2 5.4Revaluation gain – – 1.0 1.0Balance at 31 March 2015 339.8 0.1 13.4 353.3

All investments are held at cost except for other investments which are held at fair value.

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Section 8: Company balance sheet and notes continued8.4 Fixed asset investments continuedi) Principal subsidiaries

% of share capital held by:

Principal activity Company Subsidiary

Incorporated in the United Kingdom:Chesterfield Investments (No.5) Limited Property investment 100%Chesterfield Properties Limited Property investment 100%English & Overseas Properties Plc Property investment 100%Grafton Advisors (2006) LLP Asset Management 100%HHW Hotel 2 Limited Property investment 100%HHW Hotel 4 Limited Property investment 100%Letterbag Limited Property investment 100%Listed Offices Limited Property investment 100%London Designer Outlet Limited Partnership Property investment 100%Permitobtain Limited Property investment 100%Qoin Limited Property investment 100%Quintain Finance Plc Funding 100%Quintain (Clifton Jersey) Limited Property investment 100%Quintain (Holdings) Limited Property investment 100%Quintain (Manchester) Limited Property investment 100%Quintain Investments (No.2) Limited Property investment 100%Quintain (No.8) Limited Property Investment 100%Quintain (No.18) Limited Property investment 100%Quintain (Wembley Retail Park) Limited Property investment 100%Quintain City Park Gate Birmingham Limited Property investment and trading 100%Quintain Development Management Services Limited Management 100%Quintain London Limited Property investment 100%Quintain Services Limited Management 100%Quintain NW01 Investment Company Limited Property investment 100%Quintain NW01 Investor Limited Property investment 100%Quintain W03 (Groundlease) Limited Property investment 100%Quintain Investments (04) Limited Property investment 100%Quintain Investments (Allen House) Limited Asset Management 100%Quintain W05 (Groundlease) Limited Property investment 100%Quintain W06 (Groundlease) Limited Property investment 100%Quintain W07 (Groundlease) Limited Property investment 100%Quintain W08 (Groundlease) Limited Property investment 100%Quintain W10 (Groundlease) Limited Property investment 100%Quintain North West Lands Limited Property investment 100%Quintain Wembley Trading Estates Limited Property investment 100%Quintain Wembley W11 Limited Property investment 100%Quondam Estates II Limited Property investment 100%Timberlaine Limited Property investment 100%Wembley Park Residential Limited Management 100%Wembley Park Estate Management Limited Management 100%Wembley Park Limited Property investment 100%Wembley (Red House) Limited Property investment 100%Incorporated in Guernsey:Quintain (Guernsey) Limited Property investment 100%Incorporated in Jersey:Clifton Care Home Limited Managing residential home 100%Aldermary House Unit Trust Property investment 100%

All companies operate principally in their countries of incorporation. A complete list of subsidiaries will be annexed to the next annual return delivered to the Registrar of Companies.

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NOTES TO THE ACCOUNTS CONTINUED

Section 8: Company balance sheet and notes continued8.4 Fixed asset investments continuedii) Shares in associateThe Company’s interest in its associate undertakings was as follows:

% of equity held Other members

Aqua Trust 50.00 Aviva Albemarle Retail Properties LLP 28.65 Various

8.5 Debtors2015

£m2014

£m

Trade debtors 1.0 0.6Amounts due from Group undertakings 857.2 835.0Other taxation and social security 1.9 1.5Prepayments and accrued income 0.7 0.6Fair value of interest rate caps – 0.2Loans: due within one year 8.2 8.2

869.0 846.1

The Company granted unsecured loans totalling £10.7m to Albemarle Retail Properties LLP which carry a coupon of 10% pa. In the prior year an impairment provision of £2.5m was provided against these loans. The Board has assessed the recoverability of these loans at the balance sheet date and has concluded this remains appropriate. On 12 May 2015, post year end, the Company increased its interest in Albemarle Retail Properties LLP to 55.13% making it a subsidiary undertaking. The significant assets and liabilities acquired were investment properties valued at £25.6m, bank debt of £14.3m and a mezzanine loan fair valued at £10.5m, of which the Company holds £8.2m. Albemarle Retail Properties LLP generated profit before interest of £1.4m in the year ended 31 March 2015.

8.6 Creditors: amounts falling due within one year2015

£m2014

£m

Bank loans and overdrafts 12.8 –Trade creditors 1.0 0.8Other creditors 3.1 –Amounts due to Group undertakings 623.9 582.2Corporate tax 1.2 1.2Accruals and deferred income 1.8 1.9Interest rate swaps 0.4 0.4

644.2 586.5

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Section 8: Company balance sheet and notes continued8.7 Creditors: amounts falling due after more than one year

2015 £m

2014 £m

Bank and other loans (secured) 78.4 101.4Other creditors 1.6 4.6Interest rate swaps 0.1 0.2

80.1 106.2

8.8 Provisions for liabilities and charges2015

£m2014

£m

Provisions for liabilities and charges 2.6 1.1

The provisions for liabilities and charges include £0.7m (2014: £1.1m) relating to an onerous lease charge and £1.9m (2014: £nil) to a provision in respect of potential issues in the management of the Quercus Fund as described in the Finance Review.

8.9 Borrowings2015

£m2014

£m

Due within one year 12.8 –Between one and two years – 5.0Between two and five years 80.0 97.5

92.8 102.5Amortised borrowing costs (1.6) (1.1)

91.2 101.4

The Company’s borrowings are secured by floating rate charges over the assets of its subsidiaries.

8.10 Financial assets and liabilitiesAll financial assets and liabilities have the same book value and fair value, except property related investments are designated as available for sale, shown at fair value.

8.11 Financial instrumentsDetails of the Company’s interest rate swaps are given in note 6.4 sections i and ii.

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NOTES TO THE ACCOUNTS CONTINUED

Section 8: Company balance sheet and notes continued8.12 Share capital

Number of shares

m

Nominal value

£m

Allotted, called up and fully paidIn issue at 31 March 2014 521.5 130.2Issue of shares under shared-based payment schemes and loan note reduction 4.6 1.3In issue at 31 March 2015 526.1 131.5

8.13 Reserves

Share premium

£m

Other capital

reserves £m

Cashflow hedge

reserve £m

Fair value

reserve £m

Profit and loss account

£m

Investment in own shares

£m

Balance 1 April 2014 137.3 108.1 (0.6) (1.1) 137.1 (7.8)Premium on issue of shares less cost 1.6 – – – – –Recycling of fair value adjustment on cashflow hedges – – 0.1 – – –Revaluation of other investments – – – 1.4 – –Recycling of permanent diminution in value – – – 1.4 – –Costs relating to share-based payment schemes – – – – 0.8 –Loss for the year – – – – (11.4) –Balance 31 March 2015 138.9 108.1 (0.5) 1.7 126.5 (7.8)

Other capital reservesThe analysis of other capital reserves was as follows:

2015 £m

2014 £m

Capital redemption reserve 2.1 2.1Merger reserve 106.0 106.0Balance as at 31 March 108.1 108.1

Capital redemption reserveThe capital redemption reserve reflects the nominal value of shares purchased by the Group for cancellation.

Merger reserveThe merger reserve has arisen following corporate acquisitions where the Group’s equity has formed all or part of the consideration and represents the premium on the shares issued less costs.

As at 31 March 2015, ESOP Trusts held 2.2m (2014: 2.2m) shares in the Company which had been purchased in the market at a cost of £7.8m (2014: £7.8m). The purpose of the Trusts is to acquire and hold shares which will be transferred to employees to meet future obligations under the Group employee share-based payment schemes as set out in note 7.3 and share-based bonus entitlements. As at 31 March 2015, these shares had a market value of £2.1m (2014: £2.3m). The Quintain Group Employee Benefit Trust has waived the right to receive dividends.

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Section 8: Company balance sheet and notes continued8.14 Reconciliation of movements in shareholders’ funds

2015 £m

2014 £m

Opening shareholders’ funds 503.2 424.4(Loss)/profit for the year (11.4) 71.5Issue of shares 2.9 –Credit relating to share-based incentive schemes 0.8 0.5Revaluation of other investments 1.4 (0.1)Recycling of permanent diminution in value 1.4 –Recycling of fair value adjustment on cashflow hedges 0.1 4.3Effective portion of changes in fair value of cashflow hedges – 2.6Closing shareholders’ funds 498.4 503.2

8.15 Related party disclosuresThe Company has taken the exemption permitted in FRS 8 ‘Related Party Disclosures’ not to disclose transactions with its wholly-owned subsidiaries.

During the year, the Company received interest on loan notes from Sequel of £nil (2014: £2.0m).

8.16 Commitments The Company had no material operating lease or other commitments at 31 March 2015 (2014: £nil).

8.17 Directors’ benefits Details of the directors’ emoluments, pension contributions and entitlements to share options and rights are set out in the Remuneration Report on pages 66 to 67.

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Financial statements

FINANCIAL SUMMARY

Year ended 31 March

2015 £m

IFRS

2014 £m

IFRS

2013 £m

IFRS

2012 £m

IFRS

2011 £m

IFRS

2010 £m

IFRS

2009 £m

IFRS

2008 £m

IFRS

2007 £m

IFRS

2006 £m

IFRS

2005 £m

IFRS

2005 £m UK

GAAP

Assets employed:Investment and development properties:

Opening balance 570.0 562.5 825.9 805.6 812.9 800.2 1,064.2 1,058.2 889.5 754.1 809.1 797.7 Purchases 77.0 14.9 10.3 – – – – 128.6 92.4 41.4 85.8 85.8 Capital expenditure 30.5 68.4 68.2 116.1 81.8 20.8 36.8 50.1 46.4 80.1 29.5 29.5 Disposals/transfers (32.3) (96.8) (307.9) (55.3) (35.1) (27.4) (14.7) (39.8) (161.2) (110.5) (281.7) (281.7)Revaluation 41.2 21.0 (34.0) (40.5) (54.0) 7.5 (280.3) (126.7) 191.6 124.7 112.8 113.5 Other movements – – – – – 11.8 (5.8) (6.2) (0.5) (0.3) (1.4) (1.9)Closing balance 686.4 570.0 562.5 825.9 805.6 812.9 800.2 1,064.2 1,058.2 889.5 754.1 742.9

Joint venture and associates 91.1 82.0 358.3 275.1 218.5 203.7 216.2 240.5 171.3 121.8 65.4 81.3 Cash at bank 7.2 10.3 44.6 7.5 19.8 47.2 9.2 28.0 36.0 7.9 11.1 11.7 Assets held for sale – 106.2 – – – – – – – – –Other assets 94.4 90.7 106.2 67.6 60.2 50.6 57.2 116.0 130.4 82.8 44.6 41.3

879.1 859.2 1,071.6 1,176.1 1,104.1 1,114.4 1,082.8 1,448.7 1,395.9 1,102.0 875.2 877.2Financed by:Share capital 131.5 130.2 130.2 130.2 130.2 130.1 32.5 32.5 32.5 32.3 32.3 32.3 Reserves 507.9 465.2 407.9 441.5 468.1 492.0 412.3 713.2 813.6 644.3 538.8 606.0 Equity shareholders’ funds 639.4 595.4 538.1 571.7 598.3 622.1 444.8 745.7 846.1 676.6 571.1 638.3 Borrowings 205.3 216.7 486.2 540.3 436.4 398.6 533.5 541.6 336.9 251.1 175.0 184.1 Deferred tax 2.3 – – 4.8 12.2 23.7 26.0 103.6 149.6 106.8 74.9 5.1 Other liabilities 32.1 47.1 47.0 59.0 56.9 69.7 78.5 57.8 63.3 67.5 54.0 49.5 Non-controlling interest – – 0.3 0.3 0.3 0.3 – – – – 0.2 0.2

879.1 859.2 1,071.6 1,176.1 1,104.1 1,114.4 1,082.8 1,448.7 1,395.9 1,102.0 875.2 877.2 Net asset value per share (pence)

Basic 122 115 104 110 116 120 121 179 199 166 145 158Diluted 121 114 104 110 115 120 121 180 199 166 145 158EPRA 122 114 105 116 125 133 135 205 232 191 162 –

Gearing 32 35 76 93 70 57 120 69 36 36 29 27Revenue1 58.1 39.8 52.1 45.4 46.9 56.9 66.0 46.7 43.4 42.1 48.4 83.7 Rental income1 21.3 14.6 19.5 20.1 20.2 21.4 22.1 23.8 29.7 29.9 36.4 36.2 Gross profit1,2 18.5 14.1 23.0 24.9 26.2 25.9 35.0 32.7 30.9 26.8 34.3 39.7 Operating profit/(loss)1 1.5 (3.3) 4.4 2.9 5.6 4.8 8.6 3.2 5.1 4.1 17.8 20.5 (Loss)/profit on non-current asset sales1 (1.3) 34.2 (11.1) (3.9) 2.8 (7.7) (4.8) (3.3) 15.2 14.2 5.1 6.3 Revaluation surpluses (deficits)/(impairment)1 41.2 21.0 (34.0) (40.5) (54.0) 4.2 (76.1) (49.6) 12.7 23.9 19.5 –Share of profit/(loss) from joint ventures/associates1 0.1 6.1 0.9 8.5 9.4 0.1 (47.2) 5.5 22.5 33.3 8.3 4.8 Net finance expenses1 (0.7) (6.6) (10.6) (10.5) (11.9) (11.6) (9.6) (10.5) (6.9) (10.5) (15.8) (15.8)Profit/(loss) before tax1 40.8 51.4 (50.4) (43.5) (48.1) (10.2) (129.1) (54.7) 48.6 65.0 34.9 15.8 Profit/(loss) after tax1 37.9 52.9 (40.9) (35.5) (34.7) (8.1) (106.2) (40.1) 42.7 59.5 40.1 13.4 Earnings per share (pence)

Basic 7.2 10.2 (7.9) (6.8) (6.7) (3.3) (39.1) (14.8) 15.7 21.7 14.6 4.9 Diluted 7.2 10.2 (7.9) (6.8) (6.7) (3.3) (39.1) (14.8) 15.4 21.3 14.3 4.8

Dividends per share (pence) – – – – – – – 5.8 5.5 5.0 4.5 4.5

1 Comprising continuing and discontinued operations.

2 Certain staff costs have been reclassified from administrative expenses to cost of sales. As a result £2.5m was restated from administrative expenses to cost of sales for the year ended 31 March 2013.

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This document contains certain ‘forward-looking’ statements reflecting, amongst other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond Quintain Estates and Development’s ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of Quintain Estates and Development speak only as of the date on which they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, Quintain Estates and Development does not undertake to update or revise forward-looking statements to reflect any changes in Quintain Estates and Development’s expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Financial statements

FORWARD-LOOKING STATEMENTS

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Performance measuresBasic earnings per share A revenue-related performance measure calculated by dividing the profit in the financial

year by the weighted average number of shares in issue during the year.Diluted earnings per share Basic earnings per share adjusted for the dilutive effect of employee share-based

payment schemes.Basic net asset value per share The most generally accepted performance measure within the property investment

sector arrived at by dividing shareholders’ funds by the number of shares in issue at the end of the year.

Diluted net asset value per share Basic net asset value per share adjusted for the dilutive effect of employee share-based payment schemes.

Adjusted diluted (EPRA) net asset value per share

This measure excludes fair value adjustments for debt and related derivatives and deferred taxation on derivatives and revaluations and is calculated on a diluted basis.

Adjusted profit Profit before tax including discontinued operations, adjusted to exclude capital, revaluation and mark to market movements, disposals, intangible asset amortisation and trading property provisions.

Total return The movement in net asset value per share adjusted for the dividends paid in the year as a percentage of the opening net asset value per share.

Total shareholder return The movement in share price during the year adjusted for dividends paid in the year as a percentage of share price at the start of the year.

EPRA adjustments Standard adjustments to calculate EPS and NAV as set out by EPRA in its Best Practice and Policy Recommendations.

EPRA EPS EPRA EPS is the level of recurring income arising from core operational activities. It excludes all items which are not relevant to the underlying and recurring portfolio performance.

EPRA NAV EPRA NAV aims to provide consistent long-term performance measure, by adjusting reported net assets for items that are not expected to crystallise in normal circumstances, such as the fair value of derivative financial instruments and deferred tax on property valuation surpluses. EPRA NAV includes the unrecognised revaluation surplus on trading properties and the potentially dilutive effect of outstanding options granted over ordinary shares.

Treasury indicatorsNet debt: Current and non-current bank loans less cash and cash equivalents. No adjustment is

made for unamortised borrowing costs.Interest cover As defined in the Group’s banking covenants, adjusted operating profit plus realised

surpluses on disposals divided by adjusted net finance costs excluding finance lease interest.

Gearing As defined in the Group’s banking covenants, the ratio of net borrowings of the Company and its wholly-owned subsidiaries to equity shareholders’ funds adjusted for intangible assets, deferred tax and cumulative mark to market movements.

Accounting terminologyIAS/IFRS International Financial Reporting Standards issued by the International Accounting

Standards Board as adopted by the EU.UK GAAP Financial Reporting Standards and UITF Abstracts, which previously applied to the

Group’s accounts prior to 1 April 2005 and which continue to apply to the parent company’s accounts.

Further information

GLOSSARY

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Property related terminologyContracted annualised The current annual rent receivable from a property.Estimated rental value (‘ERV’) The current market rental value of a property as opposed to that presently being paid.Gross development value (‘GDV’) The current market value of a completed development.Corporate governanceUK Corporate Governance Code A set of principles and provisions setting out best practice in corporate governance,

issued by the Financial Reporting Council, with which listed companies must comply over plans under the Listing Rules of the Financial Services Authority.

Planning terminologyAffordable housing Affordable Housing is social rented, affordable rented and intermediate housing,

provided to eligible households whose needs are not met by the open market. Eligibility is determined with regard to local incomes and local house prices.

Social rented housing is usually owned by local authorities and private registered providers, for which guideline target rents are determined through the national rent regime.

Mixed-use development A development involving more than one use of a building (or series of buildings) and which typically sub-divides a building either horizontally (for example, residential above retail) or vertically (for example, student accommodation adjacent to a hotel).

Outline Planning Permission/ Reserved Matters Approval

Applications for Outline Planning Permission seek to establish the scale and nature of a proposed development and to set parameters, including height and the quantum of development, within which detailed design can come forward.

Once Outline Planning Permission has been granted, further design detail, in the form of a Reserved Matters Application, must be submitted to and approved by the local planning authority before work can start.

Resolution to grant The decision of a local authority planning committee to grant planning permission is usually conditional upon the application being referred to, and then endorsed by, a higher authority (for example, in the case of London, the Mayor) and the completion of a Section 106 agreement (see below).

Section 106 agreement A Section 106 agreement (derived from the relevant section of the Town and Country Planning Act 1990) is typically an agreement between a local planning authority and a developer negotiated in the context of granting planning permission. It provides a means of ensuring that developers contribute towards the social and physical infrastructure and services that the local authority believes to be necessary to facilitate the proposed development. Contributions may be either in cash or works in kind. The delivery of affordable housing is often secured through a Section 106 agreement.

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Registered NumberIncorporated in England and Wales under the Companies Act 1985 No 2694983

Registered Office43-45 Portman Square London W1H 6LY

Telephone and fax020 3219 2200 (T) 020 3219 2280 (F)

Principal BankersAIB Group (UK) plc Bank of Scotland plc Barclays Bank plc HSBC Bank plc Lloyds Bank plc

StockbrokersBarclays 5 The North Colonnade Canary Wharf London E14 4BB

J. P. Morgan Cazenove Limited 25 Bank Street Canary Wharf London E14 5JP

AuditorsKPMG LLP 15 Canada Square London E14 5GL

ValuersCBRE Limited Henrietta House Henrietta Place London W1G 0NB

Cushman & Wakefield LLP 43-45 Portman Square London W1H 6LY

Jones Lang LaSalle Limited 30 Warwick Street London W1B 5HN

Lambert Smith Hampton United Kingdom House 180 Oxford Street London W1D 1NN

Savills Advisory Services Limited and Savills (UK) Limited 33 Margaret Street London W1G 0JD

SolicitorsBerwin Leighton Paisner LLP Adelaide House London Bridge London EC4R 9HA

Nabarro LLP 125 London Wall London EC2Y 5AL

Norton Rose Fulbright LLP 3 More London Riverside London SE1 2AQ

RegistrarsAll general enquiries concerning holdings in ordinary shares of Quintain Estates & Development PLC should be addressed to:

Computershare Investor Services plc The Pavilions Bridgwater Road Bristol BS99 6ZZ www.investorcentre.co.uk/contactus Tel +44 (0)870 707 1253

Our websitewww.quintain.co.uk

The Investor Centre within www.quintain.co.uk carries useful shareholder tools as well as all Company presentations and reports.

You can register to receive alerts when the Company announces news at www.quintain.co.uk/alertme and follow the Company on Twitter through the handle @QuintainPLC.

Financial Calendar23 June 2015 Private Investor event at Wembley Park

20 July 2015 Annual General Meeting

November 2015 Interim results

May 2016 Annual results

SharegiftShareholders with a small number of shares may wish to consider donating them to the charity Sharegift (registered charity 1052686) which specialises in using such holdings for charitable benefit.

Further information about Sharegift is available at www.sharegift.org or by writing to: Sharegift 17 Carlton House Terrace London SW1Y 5AH Tel 020 7930 3737

Further information

SHAREHOLDER INFORMATION AND CORPORATE DETAILS

Investors are welcome to contact the Company any time by emailing [email protected].

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Quintain Estates & Development PLC

43-45 Portman Square, London W1H 6LY

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