Hdisu - Report 2016

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How does it stack up? 2016

At the centre of the reporting debate
A review of FTSE 100 narrative reporting
+9
50
41
%
How does it stack up?

Over 30 years weve built a track record for helping clients
improve their annual and sustainability reports. And for
the last 11 of those years weve shared our expertise and
experience through How does it stack up?. A yearly
review of FTSE 100 annual reports, HDISU is now widely
recognised for its comparative analysis, impartiality and
forthright approach to the challenges we all face. Were
proud of its reputation as a practical tool that promotes
best practice and gives all companies not just RY clients
access to some of the thinking that can establish or
keepthem at the forefront of reporting.
It would be good to write that the last few years have seen
a steady increase in reporting standards, as comms and IR
teams lead their companies into the future of integrated
reporting. Or, at the very least, move them towards more
balanced, coherent and transparent reporting.
Its true that the strategic report has taken its rightful place
at the heart of reporting. And its clear that areas such as
governance and remuneration are benefiting from some
long overdue transparency. Its also a fact that integrated
reporting has good momentum and is leading to more
balanced performance narratives that identify and quantify
business impacts beyond financial return.
But while some companies have wholeheartedly embraced
the spirit of high quality, transparent reporting and
several of them are featured in this document others are
continuing to provide incoherent messaging and all-round
obfuscation. Why? is the obvious question and thats
something we aim to answer, firstly in this document but
also in the interactive reporting hub wevelaunched on
ourwebsite at ry.com/hdisu.
The job of an annual report is to present the investment

casewith clarity and conviction, and showcase the past
12months in the context of markets and strategy. It should
inspire all stakeholders, from employees and community
organisations to the media and customers, to respect and
trust the company. This is of course a tall order but its
something that is very much within the remit of an annual
report, which has almost unrivalled potential to transform
perceptions and lay the groundwork for a companys
futuresuccess.
That so many reporters are still not stepping up to the
mark is disappointing. We hope that this report not only
highlights some of the key issues and how they canbest
be addressed,but is also the start of a conversationthat
will continue through the reporting hub on our website.
Allinterested parties clients, agencies, suppliers and
the media are welcome to contribute. Themore the
better. Because although this is anRY document with
an RY perspective, the challenge extendsfarbeyond
ourteamsandthose of our clients.
Brett Simnett
Director of Investor
Engagement, RY
HDISU?
01
Our criteria
We use 16 criteria to assess annual reports, grouped into
thefour categories you see here.
Understanding the
businessandcontext
As were a creative consultancy, we use our skills and

knowledge to arrive at a unique, qualitative judgement.
We acknowledge that this is asubjective view and that
other views are available but its guided by experience
and focused by a deep-seated belief in the value of
communication. HDISU isnt a tick-box exercise in
compliance. Instead, were able to judge the quality,
depth,transparency and coherence of content, rather
thansimply identifying that the content in question is
present. As with many other comms projects, what the
audience takes awayfrom the experience is not only
shapedby whatyousay, butby the way that you say it.
Business overview
Business model
Marketplace
Resources and relationships
The criteria themselves are designed to reflect current

annual reporting legislation and best practice. We havent
included a separate category to assess Integrated Reporting
because many of the notions that are central to it, such as
sustainability and resources and relationships, are picked
upby othercriteria.
Explaining and measuring

performance
02
14
Strategy
KPIs
Performance
How sustainable
isthebusiness?
24
Risk
Sustainability
Governance
Forward-looking aspect
How effectively is the
storyexplained?
34
Messaging
Linkage and flow
Materiality and transparency
Navigation and appeal
Clarity of language
The top 10 reporters in2016
42
A final view
58
Contributors60
02
radley yeldar.
Understanding the
business and context
What we measure
Business overview
Business model
Marketplace
What do you do, where and how? Who are your customers?
What trends are impacting the marketplace? And why
should an investor care about any of this what makes you
adifferent sort of proposition to everybody else in your field?
These are not always easy questions to answer, but theyre
a central part of what investors and other stakeholders
need to know. So this category aims to get to the heart
of what makes a business tick, evaluating the overview
of the company, its business model, its marketplace
andthe resources and relationships it relies on to carry
outitsactivities.
What we have seen

Driven by the increasing prevalence of the strategic report
and the growing influence of the Integrated Reporting
Framework, most if not all FTSE 100 constituents make
an effort to explain their business model. In the majority
of cases, its no longer hard to understand a companys
operations, how it creates value and the market where
itoperates.
The concept of the business model continues to evolve,
with many companies using the International Integrated
Reporting Councils model as a basis. The leading
practitioners provide an exceptionally clear articulation
oftheir products, services and divisions, explaining in
easy-to-understand words and graphics how they create
value for all stakeholders, not just financial return for
shareholders. Readers can look at the relevant pages
of thesereports and see transparency and integration,
balanceand coherence.
But for others, the opportunity to mark themselves out as
distinctive, transparent companies the sort of organisations
that investors can quickly understand and might therefore
consider investing in has passed them by.
Although we have our theories, were not sure exactly
whycompanies should be so wary of being distinctive
andstanding out from the crowd. Are they unclear what
their business model is? Do they not know the critical
resources and relationships that sustain their business?
Or is itthat they are not sure how to communicate
whattheydo?
HDISU?
4.4
5.34
Three of the best
5.33
Antofagasta
Provident Financial
Ashtead
9
4.2
03
04
radley yeldar.
Understanding the business and context
Antofagasta
No struggle with the business model here...
The company has excelled with a clear explanation
of the business and value chain. Whats interesting
with this report is the easy way in which the reader
can see at a glance what the company does at
each stage from inputs through to restoration and
outputs, with signposting to where more information
can be found. Theres no corporate jargon on these
pages. If you knew nothing whatsoever about
copper mining, then this section would give you
atleast the basics.
Antofagasta plc
Annual report and financial statements 2015
Antofagasta plc Annual report and financial statements 2015
Theres also a good section on the resources and

relationships that Antofagasta relies on in its day-today operations, such as financial capital, employees,
contractors and water. Overall, this is a quality report
that details what the company does and the context
in which it does it.
INPUTS
EXPLORATION
EVALUATION
CONSTRUCTION
EXTRACTION
PROCESSING
MARKETING
RESTORATION
OUTPUTS
Business model
Suppliers
Suppliers play a critical role in the Groups
ability to operate, supplying a large range of
products and services from grinding media
to catering at the mine sites.
The Group cannot run its business in isolation. The business

model is underpinned by a series of relationships with
stakeholders at local, regional, national and international level,
which contribute to the long-term success of the Group.
More information on key inputs is included

onpages19 to 21.
Most of the copper and molybdenum sales

are made under annual contracts or longerterm framework agreements, with sales
volumes agreed for the coming year.
Structure of the Groups sales contracts

The Groups sales contracts typically set
out the annual volumes to be supplied and
the main terms for the sale of each payable
metal, with the pricing of the contained
copper in line with LME prices. In the case
of concentrate, a deduction is made from
LME prices to reflect TC/RCs the smelting
and refining costs necessary to process
the concentrate into copper cathodes.
These TC/RCs are typically determined
annually and in line with terms negotiated
across the concentrate market.
6.0
The prices realised by the Group during

a specific period will differ from the
average market price for that period. This is
because, in line with industry practice, sales
agreements generally provide for provisional
pricing at the time of shipment, with final
pricing based on the average market
price for the month in which settlement
takes place.
For copper concentrate, sales remain
open until settlement occurs, on average
three to five months from the shipment
date. Settlement for the gold and silver
content in copper concentrate sales occurs
approximately one month from shipment.
Copper cathode sales remain open for
an average of one month from shipment.
Settlement for copper in concentrate sales
is later than for copper cathode sales since
further refinement of copper in concentrate
is needed before sale. Molybdenum sales
generally remain open for two or three
months from shipment.
7.0
A significant proportion of the Groups

copper cathode sales are made under
annual contracts, priced in line with LME
prices. In copper cathode transactions,
a premium, or in some cases a discount,
on the LME price is negotiated to reflect
differences in quality, logistics and financing
compared with the metal exchanges
standard copper contract specifications.
22
The Groups marketing

team builds long-term
relationships with core
customers, while maintaining
relationships with trading
companies that participate
in shorter-term sales.
The Group has an open-door policy that

encourages suppliers to raise any issues
orconcerns. Suppliers are audited regularly
to ensure compliance with the law and
Company standards, particularly concerning
safety and health and the environment.
Given the sensitive market conditions for
suppliers, emphasis has been placed on
monitoring the suppliers financial health and
ensuring bank guarantees are in place when
deemed necessary.
Employees
The number of contractors working for

Antofagasta varies according to business
needs and the level of construction activity.
As at 31 December 2015, there were
approximately 13,900 contractors working
at the Groups operations and projects.
This was some 30% lower than the
same time last year, principally due to
the completion of construction of the
Antucoya project.
Contractors are vitally important to mining
operations and the Group aims to build
long-term relationships with contractor
companies based on the highest standards.
Safety and health targets are included in
performance contracts and compliance
withsafety and human rights laws and
labour regulations are assessed regularly
byinternal and external audits.
Contractors are vitally

important to mining operations
and the Group aims to build
long-term relationships with
contractor companies based
on the highest standards.
The minimum wage paid by Antofagasta

Minerals to contractor employees is
70% higher than that required by Chilean
law, andcontractor staff have access to
the same facilities as the Groups own
employees at the mine camps.
OTHER INFORMATION
Over 80% of the Groups mining sales are

under contracts of a year or longer and
metals sales pricing is generally based
onprevailing market prices.
Across the industry neither copper

producers nor consumers tend to make
annual commitments for 100% of their
respective production or needs. Therefore,
producers normally retain a portion to be
sold on the spot market throughout the year.
More on Employees on pages 61 to 63.
Contractors
The Group employs approximately 5,300

people, who work alongside approximately
13,900 contractors at its corporate offices,
operations and projects. Mining is inherently
risky and ensuring the safety and health of
every employee is an absolute priority. It is
an ethical obligation and is central to the
Groups strategic objectives.
The Group has created a variety of initiatives
over the last few years to secure and
develop talent. In particular, the Group
seeks to attract young professionals into the
mining industry and complement their work
experience with workshops and seminars
across different functional areas.
9.0
Detailed discussion of key relationships
FINANCIAL STATEMENTS
The majority of sales are to industrial

customers who refine or further process
the copper smelters, in the case of
copper concentrate production, and
copper fabricators in the case of cathode
production. The Groups marketing
team builds long-term relationships with
these core customers, while maintaining
relationships with trading companies that
participate in shorter-term sales.
Similarly, the Groups molybdenum

contracts are made under long-term
framework agreements, with pricing
usuallybased on Platts average prices.
The Group undertakes an annual survey

toassess employee satisfaction. Based
on the results, action is taken to improve
thework environment.
GOVERNANCE
Customers
Relationships with trade unions are based

on mutual respect and transparency.
This helps the Group to retain employees
and avoid labour disputes, contributing
to greater productivity and business
efficiency. During 2014, the Group renewed
labour agreements at all of its then mining
operations, except Zaldvar, ensuring stability
until 2018.
STRATEGIC REPORT
The Group forms long-term partnerships with some suppliers,

while others are managed with a more short-term focus based
on market competition.
The Group currently conducts business

with over 5,000 suppliers and is working
with the top suppliers in each category
to ensure the most cost-effective and
efficient solutions are employed across
alloperations. The corporate procurement
team has consolidated all procurement
practices across the operations and
projects. In addition, the team has reduced
the number of suppliers to extract greater
benefits from elected suppliers over a long
period of time. The Group has identified 300
categories across all its mining operations
and construction projects and is negotiating
with its suppliers on each of these.
This strategic approach will allow the Group
to extract greater benefits from its suppliers
over a long period of time. For example, the
Group may develop long-term partnerships
with some suppliers, while others are
managed with a more short-term focus
based on market competition.
OVERVIEW
Key relationships
Antofagasta plc
23
8.0
HDISU?
05
Business model
OVERVIEW
Creating value through

the mining lifecycle
Investment versus income
Revenues, however, depend on commodity prices. These tend to be cyclical,

so even as production volumes decline revenues can increase, and vice
versa. Long-life and low-cost operations increase the chances of a mine
benefiting from the peaks in the commodity price cycle while withstanding
the troughs. Also, during the life of a mine there will often be expansions
that help it to keep down its unit costs of production the most important
financial KPI on a mine.
STRATEGIC REPORT
Mining is a long-term business and timescales can run into

decades. The period from initial exploration to the start of
production often exceeds ten years and then, depending
on the nature of the project and market conditions, it may
take more than five years of operation to recoup the initial
investment. If possible, mines usually plan to exploit highergrade areas towards the start of the mine life in order to
maximise returns from the operation. As a result, average
ore grades may decline over time, with production volumes
decreasing along with revenues.
Core operations
3. Evaluation
4. Construction
5. Extraction
Resources
Relationships
Chile
International
Los Pelambres
Incremental
Expansion
Centinela Second
Concentrator
Twin Metals
Encuentro Oxides
Centinela
Molybdenum Plant
Los Pelambres
Centinela
Antucoya
Zaldvar
Further information
onpage 14.
Further information
onpage 15.
Further information
onpage 15.
Further information
onpages 16 and 17.
7. Marketing
8. Restoration
9. Outputs
Ongoing value chain

The copper and
byproducts from the
Groups mines go on
tobe further processed
for use in end markets,
including property,
power, electronics,
transport and
consumer products.
Further information
onpages 16 and 17.
Further information
onpages 16 and 17.
Further information
onpage 18.
Income
Further information
onpage 18.
OTHER INFORMATION
Further information
on page 14.
6. Processing
Income
35 YEARS
5 YEARS
35 YEARS
+20 YEARS
Investment
2. Exploration
GOVERNANCE
1. Inputs
Investment
Innovative sustainability
Sustainable development is an integral and innovative

component of Antofagastas decision-making process,
firmly embedded in the business model and strategy of the
Group. Antofagasta is committed to operational excellence,
safety, talent management, environmental management
and co-operation with employees and local communities.
Sustainability drives business success and without it the Group

would not operate as efficiently as it does.
For more information on the Groups commitment to sustainability see pages 53to63.
INPUTS
EXPLORATION
EVALUATION
CONSTRUCTION
EXTRACTION
PROCESSING
MARKETING
RESTORATION
OUTPUTS
Business model
Creating value through the mining lifecycle
12
Antofagasta plc
The Groups mining operations depend on a range of key inputs, such as energy,
water,labourand fuel. The management of these inputs has a significant impact
onoperating costs, so ensuring the long-term availability of key resources is a vital
partofsupply management.
Relationships with
Employees and contractors
Customers
Suppliers
Energy
Water
Reagents
Plant and equipment

Services and supplies
Fuel
Neighbouring communities
Environment
Government and
public authorities
Infrastructure providers
Maximising
value
Effective project evaluation and design is critical

tomaximise value at this stage of the mining cycle.
The Groups wealth of experience in both areas
helps to make the bestuse of mineral deposits.
Los Pelambres
Incremental Expansion
The Group integrates sustainability criteria into design

processes and project evaluation, developing innovative
solutions for challenges such as water, energy and
community relations.
Centinela Second
Concentrator
More on page 49.
More on pages 49 and 50.
STRATEGIC REPORT
Resources
Labour
Financial capital
Mineral resource-rich land
13
Evaluation 5 years
Twin Metals
More on page 50.
More on key inputs and

cost base on pages 19 to 21.
Exploration programmes
throughout Chile
4. Construction
Risk sharing
Efficient
construction
and cost control
Once a project has been approved by the Board,

construction begins. This stage requires significant
input of capital and resources, and effective
project management and cost control are key
tomaximising a projects return on investment.
The Group has a co-operative approach to developing
projects. Typically, after the feasibility stage, and into
the construction phase, the Group seeks a partner
for projects, diversifying risk and providing a broader
access to funding.
Centinela
More on page 48.
Encuentro Oxides
More on page 48.
Molybdenum Plant
More on page 48.
Earn-in agreements in
NorthAmerica, Latin
America, Europe, Africa
andAustralia
Construction 35 years
Growing
resources
To secure the future of the business in the long

term, the Group must grow its mineral resource
base. It undertakes in-house exploration activities
in Chile. Exploration programmes further afield are
carried out in partnership with other companies
in order to benefit from their local knowledge
and experience.
Exploration 35 years
2. Exploration
GOVERNANCE
Business model
summary followed
by more detail on
each stage
Balanced
inputs
3. Evaluation
OVERVIEW
1. Inputs
OTHER INFORMATION
Increased mineral
resources by 831.3
million tonnes in 2015
at Los Volcanes and
Polo Sur deposits.
14
Antofagasta plc
15
06
radley yeldar.
Provident Financial
This is Provident Financials first report as a FTSE
100 company. And the reporting team has picked
up the gauntlet with gusto. Words and graphics
combine to present a clear explanation of the
company as well as its various divisions what they
do, where they operate and the social benefits they
generate. These add up to a transparent, easy-tograsp overview of a business that could potentially
be challenging to understand. The differences
between the divisions are well articulated, as is
theway in which they fit together to create a
cohesive group with a clear purpose.
The marketplace section provides transparent detail,
outlining past trends as well as future opportunities.
It also highlights areas where regulatory changes
could impact the company.
Clear purpose of business
Divisions at a glance
02
03
Provident Financial plc

Annual Report and Financial Statements 2015

Overview
At a glance
Vanquis Bank
Vanquis Bank
Est 2002
Vanquis Bank is the leading supplier of credit cards

in the non-standard credit market. We provide new
customers with a low credit limit andonly increase
it when we have sufficient experience of the customer
handling their account responsibly. Wemaintain a
high level of contact withcustomers, from the initial
call welcoming thecustomer to Vanquis Bank and
continuing throughout our relationship.
Non-standard credit cards
1.4m
UK customers
1,386
Employees
185.5m
Overview
The group has three

divisions, covering five
different areas ofthe
non-standard market.
UK profit before tax
250
3,500
Range of credit limits

Read more on Vanquis Bank on pages 26 to 31
Provident
Est 1880
Provident offers home credit loans, typically

of a few hundred pounds, through a network of
5,500 local agents who call each week at0.9 million
customers homes in the UK and Ireland. Agents are
primarily paid commission on what they collect, not
what they lend, so it is in their interest not to lend
more than customers can repay. The total amount
repayable is fixed at the outset, sothere are no extra
charges whatsoever.
Home credit
0.9m 105.4m
Customers
2,160
Employees2
Profit before tax1,2
100
2,000
Loan range
8.
0
Consumer Credit Division
Provident Financial Group
Read more on Provident on pages 34 to 37
Satsuma
Satsuma is our online instalment loan product.

We give new customers a small-sum, short-term
loan andcollect repayments by continuous payment
authority once a week, on a day agreed with the
customer. Just like our other businesses we adopt a
low and grow approach to lending. Our UK-based call
centre is always there to discuss any issues customers
may have. Just like our home credit product, the total
amount repayable is fixed at the outset, so there are
noextra charges whatsoever.
Online lending
glo
5.0
Est 2013 (Start up)
Est 2014 (Start up)
glo is our guarantor loans product serving customers

who are unable to access mainstream credit from
banks and building societies with larger amounts of
affordable credit over longer durations. The loan is
guaranteed by a family member or friend with a sound
credit record who supports the customer if their
circumstances change.
Guarantor loans
49,000 100
1,000
Customers
Loan range
Read more on Satsuma on pages 40 to 43
4,000 1,000
7,000
Customers
Loan range
Read more on glo on pages 44 to 46
1 Before exceptional costs and, in respect of Moneybarn,

prior to the amortisation of acquisition intangibles.
2 Represents CCD as a whole.
3 Acquired in August 2014.
Moneybarn
Moneybarn
Est 19923
Moneybarn is the market leader in the provision

of vehicle finance for people in the non-standard
creditmarket. Moneybarn is able to help those who
may havehad problems with credit in the past but
whoare now over them to get to work, take their
children toschool and live their lives.
Non-standard vehicle finance
31,000 21.3m
Customers
151
Employees
Profit before tax1
4,000
25,000
Loan range
Read more on Moneybarn on pages 52 to 56
9.0
02_Overview_p01_06_v55.indd 2
7.0
09/03/2016 16:39
02_Overview_p01_06_v55.indd 3
09/03/2016 16:39
HDISU?
Clear and succinct

overview of PFGs
markets
04

Overview
The markets we serve

The UK non-standard credit
market is made up of around
12million people who, for a
variety of reasons, from relatively
low income to a poor credit
history, are not well served by
the mainstream credit markets
products and services.
Our customers look for:
Smaller sums typically less than

amainstreamprovider would lend.
2.4m
Number of customers
5,500
Number of
self-employed agents
3,758
Number of employees
2.0bn
Year-end receivables
High levels of contact with their lender

ourcustomers like someone to talk to
abouttheir loan.
Understanding our customers usually
havelittleleeway in their income, so, if they
experience problems during the term of
theirloan, wantto talk to someone who
understands their situation and can offer a
solution. With some ofour products this can
even mean the ability toreschedule repayments
at no extra cost to thecustomer whatsoever.
135.5m
Total tax contribution*
3.1m
Community investment
07
08
radley yeldar.
Understanding
the business and context
12
Strategic report
Our business model
Provident Financial continued
M ana g in g c
Ob
ta
in i
u
gf
s
nd
01
Secure longer-term,
lower rate funding
r e di t
ri s k
02
Develop tailored
products to meet
customers needs
03
Attract target
customers
How we operate
across our products
and services
04
Assess
aordability
and credit
worthiness
12
13


Strategic report
an
ag
in g
cre
di t
Collect
repayments
due
ri s
Lend
responsibly
06
Group business
modelshowing
themain stages
ofthevalue chain
di t
nd
cr e
fu
05
ng
07
Manage arrears
and customer
diculties
Tak
i
08
Pay for funds

and generate
surplus capital
to deploy
Our business model

How we create value
M ana g in g c
a in
in g
r e di t
01
Ob
ta
in
in
ri s k
Secure longer-term,
lower rate funding
08
02
Develop tailored
products to meet
customers needs
08
04
08
01
02
07
06
Develop tailored
products to meet
customers needs
> Provide financial access for those who would be

otherwise financially excluded.
> Simple, transparent products.
> 135 years of serving non-standard customers.
> High levels of customer satisfaction.

> Specialist business model.
Attract target
customers
Typical customer:
> Mixed employment status.
> Low to average incomes.
> Limited indebtedness.
> Live in rented accommodation or socialhousing.
> Average age of between 25 and 50 years old.
03
Channels to market:
> Multi-channel approach Business to
Consumer (B2C), Business to Business (B2B).
> Strong brand loyalty.
> Marketing expertise.
> Broker relationships.
Assess affordability
and credit worthiness
> Bespoke underwriting developed over

anumberof years.
> Use of external bureau data to supplement
in-house data.
> Leading-edge technology.
> Strong data analytics based on long history.

> Specialists in assessing non-standard
consumers.
Lend responsibly
> Small-sum, short duration.

> Low and grow approach to lending.
Startingcustomers on low amounts before
growing lending as customers demonstrate
theycan manage repayments.
> High standards of regulation

andcompliance.
> Affordable weekly/monthly repayments.
> No hidden charges.
Collect repayments
due
> Maintain regular and close contact

withcustomers.
> High-tech contact centres.
> Experienced and well-trained collections teams.
> Multiple methods of repayment.

> Compliant remuneration arrangements
forcontact centre staff and commission
policies for home credit agents.
05
01
02
07
06
03
01
02
07
06
05
03
05
01
02
07
06
03
01
02
07
06
01
02
07
06
05
03
04
an
ag
in g
cre
di t
03
05
04
ri s
06
02
06
di t
Lend
responsibly
cr e
nd
> Investment grade credit of BBB with

astableoutlook.
> Strong relationships with core banks.
04
08
ng
05
Manage arrears
and customer
Collect10:52
diculties 09/03/2016
repayments
due
01
07
Tak
i
fu
> Borrow long and lend short.

> Maintain diverse range of funding sources.
> Maintain borrowing facilities to provide
headroom forthefollowing 12 months.
04
08
Assess
aordability
and credit
worthiness
08
Ob
ta
in
in
03_Strategic_p07_17_v70.indd 12
Secure longer-term,
lower ratefunding
03
05
04
Attract target
customers
How we operate
across our products
and services
07
02
06
04
08
03
Pay for funds

and generate
surplus capital
to deploy
01
07
04
ri s k
08
Manage arrears
and customer
difficulties
> Regular contact and ongoing dialogue

throughoutthecustomer journey.
> Multiple forbearance methods.
> Sympathetic approach.
Pay for funds and

generate surplus
capital to deploy
> High ROA businesses generate surplus capital.

> Distribute 80% of earnings in dividends.
> 20% equity retained sufficient to fund future
growth inreceivables.
> Maintain low level of gearing at 3.5 times orbelow.
05
03
ri s k
04
08
Strategic report
t
Ob
d
f un
05
See how the model applies to each of our businesses in the divisional
performance reviews.
09/03/2016 10:52
09/03/2016 10:52
HDISU?
09
Detailed marketplace discussion

18
19


Strategic report
The non-standard credit market

History indicates potential
The group specialises in serving the needs

oftheapproximately 12 million UK nonstandard
credit customers with a range of products from
credit cards and car finance, to home credit and
online unsecured and guarantor loans.
Uncertainty remains as to the future size and shape of the UK non-standard credit
market but this provides the group with significant opportunity, particularly with
Satsuma and glo.
Pre-2000
Expansion of access
to credit
Non-standard credit customers typically have a poor credit history,

or no credit history at all, or may have had past problems with
credit, often due to periods of unemployment, family break-up,
illhealth orthe use of inappropriate mainstream credit offers.
The UK non-standard credit market is more diverse in the types of

credit offer than the prime market, reflecting the wider variety of
customer needs and situations, as well as business models aimed
atprofitably serving the higher credit risk customer.
Firms wanting to serve this market sustainably require a tailored

approach to credit, usually focusing on lower amounts of credit for
shorter terms initially, higher levels of customer contact and the use
of a security or asset in some form linked to the provision of credit.
Firms also need to be more flexible in dealing with nonstandard
customers who are more likely to run into repayment issues and
require forbearance.
The diagram below provides an overview of the types of product

offers common in the UK nonstandard credit market, showing
the typical loan sizes and terms of lending for each, and where the
groups products sit in the market.
Business models in this sector therefore usually incur higher costs

than more standardised and less flexible prime credit offers,
resulting in the need to charge higher prices in order to generate
acceptable returns for the risk that shareholders and investors take.
Large, greater than 12bn

annual non-standard
unsecured instalment
market develops, served by
mainstream and specialist
branch and direct/
phone models.
Low headline prices
with significant addons
including PPI.
Consumers typically
borrowing a few thousand
pounds over a few years,
often through brokers to
consolidate (eg credit/store
cards, overdrafts and mail
order credit), to buy cars, to
take holidays and to improve
their homes.
Typically, larger amounts are only viable over longer periods and
often in relation to a product or asset purchase in order to improve
the chances of repayment. The main exception is guarantor lending,
where the guarantor, typically a relative or friend of the borrower,
agrees to repay the loan should the borrower default.
UK non-standard credit market and PFG businesses
2000-2007
Underlying
issues emerge
2007-2012
Post credit crunch
short-term fix
Unsecured credit withdrawn

progressively as issues
arise with mainstream and
specialist models (eghigh loss
rates, branch infrastructure
costs, accounting for
arrears, concern over PPI
and charges).
For those not renting, secured
lending (often through
brokers) increases rapidly
to fill the gap on the back of
rapid house price inflation
and light touch regulation.
For renters, strong growth
in overdraft availability and
bank appetite encouraged by
the government helps to fill
the gap.
2012 onwards
Regulated future
Global credit crunch rapidly

curtails secured lending
and tempers bank overdraft
risk appetite as large PPI
fines and redress begin,
andregulation tightens.
Regulators take action to

protect consumers and
curtail payday lending which is
inappropriate for longer-term
needs and not sustainable.
New models of online
instalment lending
begin to emerge with
more transparent
pricing and sustainable
repayment schedules.
Consumers left with few

options to fill genuine
underlying ongoing credit
needs that remain, beyond
the excesses fuelled by
thehouse price and secured
finance bubble.
New model of payday lending
emerges, especially online,
to offer a shortterm fix for
consumers without access
toincreased help from friends
and family.
150,000
Cash-based
Asset-based
Mortgage
75,000
Strategic report
Overview
Limits to friends and family

capacity encourages growth
of guarantor lending in
the absence of sufficient
unsecured supply.
Potential for the market to
grow back towards precredit crisis levels of c.10bn
as supply returns, which
presents an attractive
opportunity for Satsuma,
glo and other longer-term
unsecured loan products.
14
Traditional sub-prime unsecured instalment loans
Car finance
Typical loan size
Rent to own
2,500
Logbook/Bill of sale
1,000
350
New style online non-standard instalment loans
Unsecured /guarantor loan
5,000
500
Secured
2ndcharge
Estimated unsecured gross advances (bn)
25,000
Credit card
Short-term unsecured loan
Authorised
overdraft
Mail order credit

Home credit cash loan
Payday loan
Unauthorised
overdraft
250
Pawn/Sale &
buy back
150
Typical contractual term of credit

<1
month
13
months
6
months
1
year
18
months
2
years
3
years
4
years
15
years
25
years
12
We are addressing this

potential opportunity
Other forms of
unsecured lending
6
4
2
0
None/
revolving
Payday loans
10
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: PFG analysis based on Datamonitor, OFT, FCA, CMA, BBA, FLA, statutory filings, company announcements and press (excludes motor finance secured on the vehicle).
04_CreditMkt_p18_23_v59.indd 18
09/03/2016 17:28
04_CreditMkt_p18_23_v59.indd 19
09/03/2016 17:28
10
radley yeldar.
Ashtead
ASHTEAD GROUP PLC Annual Report & Accounts 2016
The business model discussion is the key highlight of

what is a good all-round report from the equipment
rental specialists. While the graphics present a clear
picture of what the company does, how it works
and how it adds value, the copy rewards the reader
with valuable detail about how Ashtead adapts
the business model across different stages of the
economic cycle, and also diversifies the fleet and
customer base. This level of easy-to-understand
information gives investors the information they
need to make sound decisions.
The earlier pages also provide a visually engaging
and balanced overview of the business, including
a page of facts that provides the backdrop to the
business model section.
Annual Report & Accounts 2016
Key facts about Ashtead

6
Ashtead Group plc Annual Report & Accounts 2016
STRATEGIC REPORT
MAKING THINGS
HAPPEN
Our equipment can be used to lift, power, generate,
light, move, dig, compact, drill, support, access, scrub,
pump, direct, heat and ventilate whatever is required.
1,000,000+
550,000
METRES OF BARRIERS ASSEMBLED
Heres how we helped make things

happen in 2015/16:
125 MILLION+
MILES TRAVELLED FOR DELIVERY AND SERVICE
SMALL TOOLS RENTED
15 BILLION+
BTU/hr IN THE HEATING FLEET
7.0
5.0
7,000,000+
500,000+
kW OF POWER
RENTAL ASSETS
2,700,000
RENTAL CONTRACTS WRITTEN
8.0
1,000+
200+
570,000
APPLICATIONS FOR APPRENTICESHIPS
ENTERTAINMENT EVENTS SUPPORTED
CUSTOMERS
8.0
HDISU?
rt & Accounts 2016
13
and growth
hich is a much
than the UK and
ental market is
bigger than the
o capitalise on the
that market as
ly want to rent
own equipment.
anada which we will seek

he opportunities for growth
t is currently very strong, the
d we continue to increase our
aim is to grow the business
cle. A strong market in the
we are performing particularly
The combination of our business model, the strong economy and

the long-term trend to rental, which we discuss further on page 14,
provides the perfect environment for us to achieve our goals.
In addition, our market share gains accelerate as we make the
most of our scale advantages. In the longer term, we believe that
US market share in the order of 20% is a reasonable goal.
United Rentals
US MARKET OUTLOOK
Total building starts

(Millions of square feet)
Total building
Commercial and industrial
Institutional
Residential
2016
2017
2018
+11%
+6%
+8%
+12%
+14%
+9%
+14%
+16%
+0%
+5%
+11%
-3%
Source: Dodge Data & Analytics (March 2016).
10%
Sunbelt
7%
Herc Rentals
3%
Home Depot
1%
BlueLine Rentals
1%
1%
CONSTRUCTION ACTIVITY BY CYCLE
04
200
2013
180
2016
c.57%
4%
5%
7%
15%
0
120
Others
2%
Target
140
c.16%
US MARKET SHARE DEVELOPMENT
2007
160
4%
Top 11100
Source: Management estimate based on IHS Global Insight market estimates.

Note: Restated to reflect latest IHS Global Insight market size data.
2002
02
15
Source: Management estimates.
100
80
60
T+20
T+18
T+16
T+14
19751982
19821991
Current cycle
Forecast
(T=100 based on constant dollars)
T+12
T+8
T+10
SPECIALTY FLOORING SOLUTIONS
01
T+6
As we increase our market share and grow our specialty

businesses, they necessarily become a greater proportion of the
mix. The acquisitions we make are often to expand into a new
specialty area or to develop an existing one and then we supplement
them with greenfield openings. For example, last year we made an
acquisition to expand our climate control business to the Pacific
Northwest and opened eight greenfield locations to expand further
this highly profitable specialty business.
US MARKET SHARE
Top 710
T+4
are in the US and even though

nt rental company, there
hart 03 shows. Our major
ls and Herc Rentals with 10%
BlueLine and Sunstate have
mainder of the market is made
shops.
We believe that our model is a differentiator and explains in part our

strong performance relative to some of our larger peers. We take
share from our larger competitors because we have the right fleet
in the right place and because we offer better service. However, we
take more market share from the smaller operators than our bigger
competitors where our advantage is greater. We remain committed
to a very broad product offering in segments with low rental
penetration and high returns. The diversity of both our fleet and its
application gives us enormous competitive advantage. You can read
more about our business model on pages 16 to 21.
03
Sunstate
T+2
y, the markets we serve are

cal trends remain favourable.
ruction cycles. These have
1975 to 1982 and from 1982 to
ggressive but the overall cycle
remain mid-cycle and whilst
we should have multiple years
ty ahead.
We are confident that as the market grows, our share will also
increase. We have a good track record of success, having almost
doubled our market share in the last six years. We continue to set
ambitious targets for continuing to double our market share and
market demand allows for this. The speed with which we increase
our market share is a function of how quickly we can get new
locations up and running and generating profit.
Over the last five years we

have consistently grown at
two to three times the market
growth rate.
g. We have been impacted

oil and gas was only a small
e impact has been relatively
oil and gas sector served
rse nature of our business.
g but we also continue to see
of lower energy prices and
is positive for our broader
ntial remodelling. In the US in
nding more money which has
uction markets. We continue to
ends and the consensus is that
onger term growth. Commercial
ow well and we expect this to
Much of our market share gains come from these small independents
when we set up new stores or acquire them. Ours is a capitalintensive industry where size matters. Scale brings cost benefits
and sophistication in areas like IT and other services, and this leads
ultimately to further consolidation. The industry has evolved over
the last five years such that the proportion of the market enjoyed
by the larger players has increased by 25%. We have clearly been
a major beneficiary of this trend. Whilst there will always be a place
for strong local players, the market enjoyed by the larger players
is likely to grow by a further 30 to 40% in the medium term.
STRATEGIC REPORT
SING ON
OPPORTUNITY
19912011
Source: Dodge Data & Analytics.
In July last year we set up our first specialty flooring

solutions business. We are already the single largest
rental provider of surface maintenance equipment
focused on the commercial cleaning industry. We provide
long and short-term rental options, battery, electric,
LPG and diesel powered units, walk-behind and ride-on
sweepers and scrubbers, floor burnishers and single
disc machines (polish, scrub, grind), carpet extractors
and specialty cleaning equipment. We serve the
education, hospitality, events, retail and healthcare
industries as well as stadiums, industrial plants
and warehouses.
Detailed marketplace
commentary with clear
market share chart
11
12
radley yeldar.
Ashtead continued
Providing temporary
climate control
solutions for retail
premises, office
buildings and
construction sites.
Renting generators,
access equipment,
lighting, barriers and
temporary trakway to an
outdoor music festival.
suming we purchase an asset for $100, generate revenue of

0 each year (equivalent to 60% dollar utilisation) and receive 35%
he original purchase price as disposal proceeds, we generate
eturn of $455 on an initial outlay of $100 over an average
ven-year useful life. We incur costs in providing this service,
ncipally employee, property and transportation costs and fleet
preciation. However, this simple overview encompasses a
nificant number of moving parts and activities. Our ability to
cel in these areas enables us to generate strong margins and
iver long-term, sustainable shareholder value, whilst managing
risks inherent in our business (refer to pages 30 to 32).
ral
1,225
44
1,507
36
2,151
2,453
32
36
20
9
1,820
30
2,868
Designing, erecting
and dismantling
scaffolding systems.
2,189
27
3,596
2,742
26
4,733
3,277
22%
<50%
RELIANT ON CONSTRUCTION
25
5,663
41
45
47
48
25
26
26
24
Managing the flow for sewer

bypasses to enable the
refurbishment of ageing
infrastructure in a dry
environment.
Rapid response to natural

disasters such as floods,
tornadoes and hurricanes,
including pumps and power
generation equipment.
Managing the cycle is key

to our strategy.
IN SPECIALTY BUSINESSES
2013
Improving
market
ting
Designing bespoke lifting

solutions for complex problems,
including lifting the faade onto
multistorey buildings.
Providing traffic
management solutions
for engineering projects
or clean-up after
an accident.
MANAGING THE CYCLE

We describe ourselves as being a late cycle business in that our
main end market, non-residential construction, is usually one
of the last parts of the economy to be affected by a change in
economic conditions. This means that we have a good degree of
visibility on when we are likely to be affected, as the signs will have
been visible in other parts of the economy for some time. We are
therefore able to plan accordingly and react in a timely manner
when necessary. Key to the execution of our model is the planning
we undertake to capitalise on the opportunities presented by the
cycle. The opportunities are for both organic growth, through
winning market share from less well positioned competitors, and
positioning ourselves to be able to fund acquisitive growth if suitable
opportunities arise (see content on our strategy on pages 22 to 27).
DIFFERENTIATING OUR FLEET AND SERVICE
The differentiation in our fleet and service means that we provide
equipment to many different sectors. Construction continues to
be our largest market but now represents around 45% as we have
deliberately reduced our reliance on construction. An increasing
proportion of our North American business (22%) is in specialty
areas such as Pump & Power, Climate Control, Scaffolding,
Oil & Gas and Industrial Services. Residential construction is
a small proportion of our business (5%) as it is not a heavy user
of equipment.
Our customers range in size and scale from multinational
businesses, through strong local contractors to individual do-ityourselfers. Our diversified customer base includes construction,
industrial and homeowner customers, as well as government
entities and specialist contractors. Our core market is the small
to mid-sized local contractor. The nature of the business is such
that it consists of a high number of low-value transactions. In the
year to April 2016, Sunbelt dealt with over 540,000 customers,
who generated average revenue of $5,600.
STRATEGIC REPORT
On-site hire depot and

contractors village for
long-term maintenance
and construction projects.
In-depth business
model narrative
19
HDISU?
16
13
17
OUR BUSINESS MODEL
CREATING
SUSTAINABLE VALUE
HOW WE DO IT
PURCHASE
We purchase equipment from leading
manufacturers and maintain it through
its useful life.
STRATEGIC REPORT
WHAT WE DO
We create value through the short-term rental

of equipment that is used for a wide variety
of applications to a diverse customer base.
Our rental fleet ranges from small hand-held
tools to the largest construction equipment
and is available through a network of stores
in North America and the UK.
VALUE CREATION
DIFFERENTIATING OUR FLEET AND SERVICE

Broad fleet mix
Highly responsive (no job too small)
Scale to meet size and range of requirement
PLANNING AHEAD
The provision of cost-effective

rental solutions to a diverse
customer base.
P19
MAXIMISING
OUR RETURN ON
INVESTMENT
Simple value chain

approach to the
business model
INVESTING IN
OUR PEOPLE
NA
GE
ME
NT
TAGE OF OPPO
RTU
DVAN
NIT
IE
A
ING
OUR
CUSTOMERS
AD
AP
P18
ENSURING
OPERATIONAL
EXCELLENCE
LANCE SHEET MA
K
TA
DIFFERENTIATING
OUR FLEET
AND SERVICE
BA
FUL
RE
CA
SELL
We sell old equipment in the second-hand
market and buy new.
P19
RENT
We rent on a short-term basis, a full range
of construction and industrial equipment
to a diverse range of customers.
Developing long-term
relationships with customers
and suppliers.
ENSURING OPERATIONAL EXCELLENCE

Optimal fleet age
Nationwide networks in US and UK
Long-term partnerships with leading
equipment manufacturers
Focused, service-driven approach
Strong customer relationships
Industry-leading application of technology
P21
P20
P46
INVESTING IN OUR PEOPLE

Highly skilled team
Devolved structure
Maintaining significant staff continuity
Strong focus on recruitment, training
and incentivisation
Generating sustainable
returns for shareholders
through the cycle.
P16
P21
ION
TIN
SIT
GO
UR FL
T PO
EET AND COS
DISCOVER MORE ABOUT HOW WE MANAGE THE CYCLE
MAXIMISING OUR RETURN ON INVESTMENT

Effective management and monitoring
of fleet investment
Optimisation of utilisation rates and returns
Flexibility in local pricing structures
Focus on higher-return equipment
Appropriate incentive plans consistent
with improved returns
P19
Enhancing the communities

in which we operate, through
employment, opportunity
and community involvement.
P21
14
radley yeldar.
Explaining and measuring

performance
What we measure
Strategy
KPIs
Performance
Whats the strategy? Has that changed and if so, in
whatway and why? How has the business performed
against the strategy? How do the individual divisions
contribute to the overall execution of the strategy?
These arefair and fundamental questions to ask any
business, butfar too manyeither arent listening or dont
acknowledgethe importance of sharing the facts with
anydegree oftransparency.
The aim here is to communicate the essence of the
businessin all its glory: this is how we operate and where
were trying to get to... this is the progress weve made in
the lastyear... and this is what we intend to achieve in the
coming 12 months.
Ideally, the objectives should be linked to KPIs, thereby
givinginvestors an understanding of how the company
measures success.
What we have seen

Looking at the FTSE 100 as a whole, we can see a general
improvement in the ways in which companies approach
strategy disclosure. Many now set out their objectives
coherently and show how they are making progress
againstthose objectives. The best practitioners are also
linking strategy with future performance giving investors
an indication of where and how growth will be achieved in
theyears ahead.
The level of detail provided is also on the rise. Many
businesses now include a breakdown of divisional strategies
and explain that while these differ from each other, they
combine to support the overall group strategy. Some
companies are even making inroads into the sometimes
impenetrable jungle of the financial review, using charts
andcommentary to help investors quickly understand
theresults. These teams deserve our applause.
You can sense the but coming here... and the reasons for
disappointment within this category are headed by twin
failings with KPIs. Firstly, weve seen a small but significant
decrease in the quality of KPI disclosure some reports have
actually gone backwards in terms of telling investors how
they measure performance. Secondly, too many companies
still struggle to articulate how their KPIs link to the strategy.
In our view, this is a linkage that has to be absolutely spot on.
The KPIs should be the metrics that measure the progress
of the strategy. This is the only way in which investors will
beable to gauge the progress the business has made against
its strategic aims. Is this failing simply because companies
havent yet worked out which KPIs to use? Or is it because
the strategy is too obtuse to measure?
HDISU?
15
Three of the best

ITV
5.21
Vodafone
Intu
5.30
5.14
16
radley yeldar.
Explaining and measuring performance
ITV
The ITV report is a model of transparency this year,
with several pages of detailed discussion on strategic
priorities followed by a dashboard that summarises
performance, explains the focus for the next year
and provides links to the relevant KPIs.
The financial and performance review is also one
ofthe best. Waterfall charts help clarify the year-onyear changes to the numbers, while the financial
statements incorporate explanation boxes which lay
out the key facts to be found on each page. Overall,
this report displays admirable disclosure and balance
readers can quickly grasp the progress ITV has
made over the year.
Delivering strong
growth and building scale
ITV plc Annual Report and Accounts
for the year ended 31 December 2015
Strategic priorities clearly

definedin print and online
8.0
8.0
8.0
HDISU?
Strategic Report
Strategy and Operations
Strategic Priority 3
Strategic Report
As digital media and consumer behaviour continue to evolve,

our ability to create and distribute high-value content in
new and efficient ways is of increasing significance. ITV is
continually exploring and experimentingwith new ways to
distribute our content tobroadcasters and platform owners,
both free and pay, while also seekingnew opportunities to
extend the reach ofour content for the consumer.
Strategic
Priority 3:
See page 30 for more
Build a global pay and

distribution business
Capitalising on growing demand for VOD through the ITV Hub

Changes in technology and the growing base of connected devices are driving
rapid growth in audiences appetite for VOD and in turn fuelling demand from
advertisers forVOD inventory. ITV as a creator and owner of content, particularly
sought after drama and entertainment content, is well placed to exploit this
growing customer base.
Our Online business has grown rapidly over the last few years and is contributing
meaningful revenue to the Group. In November we successfully launched the
ITVHub to replace ITV Player and ITV.com across mobile, PC and connected TV,
throughwhich audiences can access ITV content on different devices, live
orondemand. This is a major step forward in the quality, innovation and ease
ofuse of ITVs online services. The biggest change is that live content is now
central to the ITV Hub andlive simulcast viewing is becoming increasingly popular
particularly around sporting events andlarge entertainment shows, as viewers
areusing their connected devices asatelevision set. Simulcast viewing now
represents about 30% of viewing on theplatforms on which it is available.
To drive growth in our online audiences and online advertising revenues we
havealso been working to increase the distribution of the ITV Hub which is now
available on 27 platforms, most recently launching on Amazon Fire, YouView Sony
and Freeview Play. Long-form video requests continue to grow strongly up 14%
in2015, driven by mobile and connected televisions. Online consumption, which is
the measure of how long viewers are spending online, has also increased by 42%
reflecting the quality of ITVs content and the improved viewing experience of the
ITV Hub.
To date there have been 21 million downloads of our app and to further increase
usage we will continually extend and enhance the ITV Hub with improvements in
technology and new content, such as premieres, box sets andshort-form content.
Overall the new service has been very well received by both audiences and
advertisers, with consumption growing strongly since launch, particularly for live
viewing where our audiences enjoy the new live swipe feature on smartphones
and tablets and the ITV Hubs improved streaming quality.
Pictured: The Voice is produced by

Netherlands based 2015 acquisition Talpa
Media. It has been sold to 180 countries.
26
ITV plc Annual Report and Accounts 2015
Strategic Report
Online, Pay & Interactive

revenue growth
188m
188
Additionally, we are working to

maximise the value of our digital
data. We have introduced new
digital advertising features like
AdSync+ as well as dynamicallyserved advertising on ITVs live
simulcast channels on PC and
Appleplatforms. With 13 million
registered users of the ITV Hub, we
are not only able to understand and
engage with our audiences better
but we are also developing more
targeted advertising online in 2016.
118
102
YoY
58
50
81
153
23%
+276%
09 10
Increase
on 2009
11
12
13
14
15
27
Strategic Report
Strategic Priority 3 continued
Our pay business in the UK includes deals

with Sky and Virgin for our HD channels
and catch-up VOD, an advertising free
subscription version of the ITV Hub on
iOS and a deal with Sky to make ITVs
content available through its connected
platforms including Sky Go and Now TV.
In 2014 we launched our first pay
channel, ITV Encore, which we are
strengthening with more exclusive
content including original commissions
such as The Frankenstein Chronicles and
Houdini & Doyle and critically acclaimed
acquired series such as The Americans
and Jordskott.
Outside the UK we have established
anumber of smaller pay propositions
including Cirkus, a subscription VOD
service that offers the Best of British
content to international pay platforms
which is available in the Nordics and
more recently in Iceland. We also
distribute ITV Essentials, an online
service for expats, and ITV Choice, a
general entertainment channel for
emerging markets which was recently
launched in South Africa.
28
Expanding our global

distributionnetwork
In 2015 Global Entertainment, the
distribution arm of ITV Studios, delivered
revenue growth of 9% to 157 million
(2014: 144 million) as we have continued
to drive value from the investment
wehave made in creating and owning
the rights to quality content with
international appeal.
Talpa has a very strong digital presence

internationally across its range of
formats. Since 2014 it has developed
10successful connected live formats
including The Voice, The Voice Kids and
Dance Dance Dance, in 40 countries, with
90 apps/sites and 100 YouTube channels,
in total delivering over 12 billion views.
We have made investments in the
digitalarena as we look to develop our
expertise in monetising online audiences.
These include: Believe Entertainment
Group, a producer of digital-branded
short-form entertainment; Zealot, a
digital content multi-platform network;
Indigenous Media, a producer of scripted
digital content; and Channel Mum,
thefirst ever online video network
dedicated to young mothers.
Looking ahead we will further develop
our pay offering both in the UK and
internationally exploring opportunities
for both pay and online as we seek to
monetise our content further. We will
look to do this through a mixedeconomy
of organic growth, partnerships and
acquisitions. We will also increasingly
look for opportunities to window our
content across our free channels, pay
channels and the ITV Hub to derive
maximum value for audiences,
platformsand advertisers.
157
144
135
Global Entertainment
revenue growth m
157m
133
Further developing our pay offering

inthe UK and internationally
ITV earns revenue from pay television
through licensing our channels and
content. 2015 pay revenue grew by
38%as we continued to develop our
services across multiple platforms.
As we look to increase ITV brand loyalty,

we have already increased our exposure
to new types of content including
short-form and younger focused
long-form programming and new types
of distribution. We are widening our
digital reach by expanding our presence
on YouTube to bring new audiences to
our programmes. In 2015 we launched
22new ITV branded channels across a
range of our biggest programme brands.
We saw usage increase over 400%
across the year on the ITV branded
channels to deliver over 160million
views, the equivalent of over 8 million
hours of viewing.
126
Our Online, Pay &

Interactive business
israpidly growing
andprofitable.
126
Pictured left to right: Vera is a British based

detective drama in its sixth series on ITV. Ithas
had huge international success and has been
sold to 177 countries; Thunderbirds Are Go!
is produced by ITV Studios and broadcast on
CITV. It has been sold to 90 countries to date.
123
Detailed narrative on
each strategic priority
setting out progress
and future direction
17
9%
YoY
+25%
Increase
on 2009
09 10
11
12
13
14
Reality dating show Love Island

generated significant activity on
theITV Hub with 11 million requests
on ad-funded platforms across the
series. It was the first ITV programme
to generate two million views in
aweek.
15
Our distribution business has a

substantial archive of over 40,000 hours
of television and film content that we
distribute to broadcasters and platform
owners around the world. In 2015
wehave continued to enhance our
distribution network, benefiting from
our increased rights ownership and
strong network relationships as ITV
Studios has grown in scale.
We have a strong and balanced
portfolioof scripted and unscripted
programmes and formats, both
newandreturning. We continuously
strengthen this using ITVs strong cash
flow to create and fund new content
andacquire third-party rights. ITV
Studios creates new programmes in
thekey genres ofdrama, entertainment
and factual entertainment.
Our scripted content has sold well

internationally with programmes
suchasPoldark, Aquarius, Texas Rising,
Endeavour, Jekyll & Hyde and Mr Selfridge
all selling to over 100 countries. Our
entertainment and factual entertainment
content also continues to sell well with
programmes such as Come Dine With
Me, The Voice, The Voice Kids, I Love My
Country, TheChase, Im A Celebrity Get
Me Out Of Here! and the Price of Beauty.
During the year we have also signed a
number of new multi-year and multiterritory deals including a seven year
deal for Coronation Street with CBC in
Canada. In early 2016 we agreed a multi
series and territory deal for Thunderbirds
Are Go! with Amazon covering the
USand India for first run and UK and
Germany for second run. We are now
starting to benefit from merchandising
around Thunderbirds Are Go! as we look
to extend the franchise beyond the
television set.
Global Entertainment also invests in

thefunding of scripted content with
international appeal. ITV has invested
around 160 million in the year, up
60million, in scripted programmes
such as Texas Rising, Aquarius and The
Good Witch, two of which have been
recommissioned and they are selling
well internationally.
In addition to distributing ITVs own
content, we have also acquired the
third-party distribution rights to a
number of international shows including
Schitts Creek from Canada and Nordic
thriller Jordskott.
2016 and beyond
Looking ahead we expect to deliver
double-digit growth in our Online, Pay
&Interactive revenues as we further
develop our ability to distribute and sell
our content. We will continue to invest
to enhance the ITV Hub and through
amixed economy of organic growth,
partnerships and acquisitions, we will
develop our pay and online services
andchannels and explore new ways
topackage and sell our content to
takeadvantage of demand for quality
content in the UK and internationally
from consumers, broadcasters and
platform owners.
Lastly, we are also continuing to drive
the debate around the implementation
of retransmission fees in the UK to
ensure that we are fairly compensated
for our investment in content for the
ITVmain channel when it is carried on
pay TV platforms.
Our scripted
contenthas sold well
internationally with
programmes such
asPoldark, Aquarius,
Texas Rising, Endeavour
and MrSelfridge
allselling toover
100countries.
Talpa Connect
Since 2014:
10
successful connected
live formats
in
40 countries
with
90 apps/sites
and
100 YouTube channels

with over
12 billion views
29
18
radley yeldar.
ITV continued
Summary of strategic
performance
Strategic Report
Performance Dashboard
Strategic Report
Performance Dashboard
Pictured left to right: The Tour de France
has been broadcast on ITV4 for eight
years; Trevor McDonald presented two
documentaries during 2015, with The Mafia,
broadcast in March being the most watched
documentary in Q1 on any channel.
Demonstrating continued progress against

our strategic priorities.
Strategic priority
Maximise audience
and revenue share
from free-to-air
broadcast and
VOD business
Grow international
content business
Build a global pay

and distribution
business
30
Our Key Performance Indicators (KPIs) align our performance

and accountability to our strategy of continuing to develop
acreative, commercial and global organisation. Five KPIs
measure the Groups operational and financial performance
across all three priorities:
Adjusted EBITA
Adjusted EPS
Profit to cash conversion
Non-NAR revenue
Employee engagement
2015 performance
Focus for 2016
Key Performance Indicators
Strengthen on-screen viewing in key demographics

Further invest in our content, channels and brand to maintain
ourunique scale
Grow our share of total television and VOD advertising
Continue to maximise the value of our programme brands
throughsponsorship, interactivity and brand extensions
Developing new and more targeted advertising opportunities
Developing branded content solutions through our new content
creation service ITV AdVentures
Integration of UTV
Key Performance
Indicators across
all three priorities
ITV NAR growth of 6%, ahead of our estimate of the TV advertising market
Share of broadcast up to 46.1% in 2015 (2014: 45.9%)
ITV Family SOV down 3%
ITV delivered 98% of commercial audiences over fivemillion and 93%
ofaudiences over three million
Delivered most watched entertainment drama, soap and sporting event
ITV2 and ITV3 largest digital channels in the UK
Innovative sponsorship and brand extension partnerships with advertisers
Launched AdSync+, a partnership with RadiumOne to amplify the reach of
our TV advertising
Dynamic advertising now served to ITV simulcast content on PC and iOS
Significant digital engagement with 100 million votes across our big
entertainment shows and 40 million paid competition entries
See page 18 for more on

Good growth across ITV Studios with 8% organic and 33% including
theacquisitions
ITV Studios share of ITV main channel output at 60%
46% growth in Off-ITV production revenue in the UK
Continued investment in creative pipeline with over 7,000 hours
oforiginal content produced and delivered
Completed three acquisitions including Talpa Media, our biggest
acquisition todate
53% of ITV Studios revenue generated outside the UK
Top indie producer across Europe and the US
Delivered three US scripted series in the year, two of which have
beenrecommissioned
Build further scale internationally

Continue to develop IP in key creative markets to exploit growing
worldwide demand
Build a pipeline of programmes across genres and content life cycle
Develop more 16 to 24 focused content
Attract and retain key creative talent
Continue to look at acquisitions, investments and talent deals
Successful launch of the ITV Hub

Long-form video requests up 14%, consumption up 42%
21 million downloads of app and 13 million registered users
Launched new original programming on ITV Encore
New pay deal with Virgin and others including Amazon TVOD and TalkTalk
Cirkus and ITV Choice now launched in four countries
Launched many YouTube channels across our programme brands focusing
on short-form content, which has driven very significant views
A leading European distributor of content, with Aquarius, MrSelfridge,
Poldark and Hells Kitchen USA all sold to over 100 countries
Six formats sold to three or more countries
ITV Family SOV

ITV Family SOCI
ITV Family share of broadcast
Percentage of commercial audiences
over three million and over five million
Number of new commissions for ITV Studios

Percentage of ITV output from ITV Studios

Further invest in the quality and distribution of the ITV Hub

Build a network of pay channels and OTT services
Consider wider partnerships with OTT/VOD players
Continue to trial direct to consumer pay opportunities
Develop innovative new content windowing strategy
Further grow our international distribution network with highqualitycontent
Maximise the use of our strong cash flows to finance the production
ofhigh-profile dramas that return and travel internationally
Invest in developing third-party distribution deals
Secure retransmission fees in the medium term
Total long-form video requests

Number of new commissions for ITV Studios

31
HDISU?
Strategic Report
Performance and Financials
Strategic Report
ITV delivered another strong performance in 2015

with growth across the business.
We remain highly cash

generative which, together
with our continued focus
oncosts, places us in a
strong position to invest
for further growth and
enhance shareholder value
into 2016 and beyond.
Reflecting our continued investment in quality content, we

grew revenue across all parts of the business and reported
our sixth consecutive year of double-digit growth in our
keyprofit measures, while further improving our adjusted
EBITA margin. We remain highly cash generative which,
together with our continued focus on costs, places us in a
strong position to invest for further growth and enhance
shareholder value into 2016 and beyond.
Twelve months to 31 December
NAR
Total non-NAR
Total revenue
Internal supply
Group external revenue
Adjusted EBITA
Group adjusted EBITA margin
Adjusted EPS
Adjusted diluted EPS
Dividend per share
Special dividend
Net (debt)/cash as
at 31 December
2015
m
2014
m
Change
m
Change
%
1,719
1,664
3,383
(411)
2,972
1,629
1,327
2,956
(366)
2,590
90
337
427
45
382
6
25
14
12
15
865
29%
730
28%
135
18
16.5p
16.3p
6.0p
10.0p
13.8p
13.7p
4.70p
6.25p
2.7p
2.6p
1.3p
20
19
28
41
(360)
(319)
Profit before tax

EPS
Diluted EPS
2015
m
641
12.4p
12.3p
Growth in NAR and high margin Online, Pay & Interactive

revenue combined with the growth in ITV Studios and our
continued focus on costs, delivered an 18% increase in adjusted
EBITA to 865 million (2014: 730 million), resulting in a 1%
improvement in the adjusted EBITA margin to 29%. Adjusted
EPS grew 20% to 16.5p (2014: 13.8p) while reported EPS grew
7% to 12.4p (2014: 11.6p). Reported EPS grew at a slower rate
than adjusted EPS primarily because of the treatment of
employment linked consideration for our acquisitions which
isincluded within reported earnings. This is explained over
thefollowing pages.
We remain focused on balance sheet efficiency and working
capital management. Despite increased investment in scripted
content, our profit to cash ratio remained strong at 91%. After
acquisitions of 406 million (net of cash acquired), dividend
payments of 459 million and our deficit pension contributions
of 90 million, we ended 2015 with net debt of 319 million
(31December 2014: net cash of 41 million). This gives us the
financial flexibility to continue to invest in the business.
Adjusted EBITA tracker
m
900
2014
m
Change
m
Change
%
605
11.6p
11.5p
36
0.8p
0.8p
6
7
7
Total ITV revenue increased 14% to 3,383 million (2014:

2,956 million), with external revenue up 15% at 2,972 million
(2014: 2,590 million). This reflects 6% growth in NARto
1,719million (2014: 1,629 million), and 25% growth in
non-NAR revenue to 1,664 million (2014: 1,327 million).
Non-NAR now accounts for 49% (2014: 45%) of totalrevenue.
865
28
90
800
2015
m
2014
m
Change
m
1,719
1,629
90
188
64
175
153
71
170
35
(7)
5
23
(10)
3
NAR
Online, Pay & Interactive
revenue
SDN external revenue
Other commercial income
Broadcast & Online
non-NAR revenue
Total Broadcast & Online
revenue
Total schedule costs
Other costs
Total Broadcast & Online
adjusted EBITA
Adjusted EBITA margin
427
2,146
(1,045)
(442)
659
31%
394
33
2,023
(1,018)
(437)
123
(27)
(5)
6
(3)
(1)
568
28%
91
16
m
2,175
35
730
2014
2
2,146
(7)
90
2,075
2,025
NAR
Network
Schedule
Online, Pay &

Interactive
and Other
Broadcast
ITV Studios
2,023
2015
1,975
2014
The Financial and Performance Review focuses on the adjusted

results, which, in managements view, reflect the underlying
performance of the business, providing a more meaningful
comparison of how the business is managed andmeasured
ona day-to-day basis.
The key adjustments are to reflect production tax credits in
EBITA before exceptional items (adjusted EBITA) and remove
the effect of certain items from adjusted profit before tax
andEPS. These include all operating and non-operating
exceptional items primarily acquisition-related costs such as:
employment linked consideration and professional fees for
due diligence; impairment of intangible assets; amortisation
ofintangible assets acquired through business combinations
including formats and customer contracts; net financing cost
adjustments; and tax adjustments relating to these items.
Afull reconciliation between our adjusted and statutory
results is provided on page 43.
NAR
Online,
Pay &
Interactive
SDN
Sponsorship Other
& Brand
Non-NAR
Extensions
2015
The television advertising market again showed strong

growthwith NAR up 6% to 1,719 million (2014: 1,629 million)
and continued good growth across all the major advertising
categories. The Finance advertising category was driven by
traditional banking brands and the Retail and Food sectors
remained strong with supermarkets and furniture stores
increasing spend. We saw strong growth from technology
companies such as Google and Facebook as well asnew digital
brands, such as Just Eat and Purple Bricks, all using TV to build
brand awareness. Entertainment & Leisure did see a decline
which was as a result of significant spend bybookmakers in
2014 around the Football World Cup.
Explanation boxes
on the financial
statements
Change
%
Broadcast & Online delivered another strong performance,

with total revenue up 6% to 2,146 million (2014: 2,023 million)
driven by 6% growth in NAR and 23% growth in Online,
Pay&Interactive.
2,125
(27)
750
700
Broadcast & Online
Broadcast & Online revenue tracker

44
850
The unadjusted profit before tax and EPS from the

Consolidated Income Statement are as follows:
36
Detailed financial
review
Financial and Performance Review
Financial and Performance Review
19
37
Financial Statements
Notes to the Financial Statements

Section 2: Results for the Year
In this section
2.1 Profit
before tax
Keeping it
simple
This section focuses on the results and performance of the Group. On the
following pages you will find disclosures explaining the Groups results for
the year, segmental information, exceptional items, taxation and earnings
per share.
The results for th
This section analyses the Groups profit before tax by reference to the activities
performed by the Group and an analysis of key operating costs.
Broadcast & Onli

NAR
Non-NAR
ITV Studios
Productions
Distribution
Total revenue
Earnings before interest, tax, amortisation (EBITA) and before exceptional items
remains the Groups key profit indicator. This reflects the way the business is
managed and how the Directors assess the performance of the Group. This section
therefore also shows each divisions contribution to total revenue and EBITA.
Segmental info
Operating segm
how the busines
operating decisio
Accounting policies
Revenue recognition
Revenue is stated exclusive of VAT and comprises the sale of products and services to third parties.
Judgement is required when determining the appropriate timing and amount of revenue that can be
recognised, specifically around whether there is a firm contract and that the service has been provided,
and if so, whether there is a fixed or reasonably determinable price that is reasonably certain will be
collected.
Revenue from the sale of products is recognised when the Group has transferred both the significant risks
and rewards of ownership and control of the products sold, and the amount of revenue can be measured
The Board consid

segments for th
and ITV Studios,
Total segment rev

Intersegment rev
Revenue from ext
EBITA before exce
20
radley yeldar.
Vodafone
Chief Executives strategic review
Responding to
a changing world
Taking personal responsibility for the strategy

section, the Vodafone CEO lays out the companys
three strategic priorities. Each is covered in some
detail and transparency, setting the scene and
usingsolid proof points to describe progress.
On each page, we see a summary that quickly
andeasily guides the reader through the key
issues themarket trends, market facts and how
Vodafone aimsto generate value within that context.
For thoseseeking greater detail, the commentary
alongside puts flesh on the bones of the strategy.
It has been a year of continued progress, with signs

of recovery in Europe and continued growth in emerging
markets. Our Project Spring investment programme
is now complete.
Vodafone Group Plc Annual Report 2016
Executing our strategy to capture growth opportu

Review of the year
We have made good progress on a number
of fronts in the last year. We have significantly
expanded our mobile and fixed data network
coverage and quality, leading to strong
growth in data usage; we have maintained
encouraging commercial momentum, with
consistent customer growth; and we have
returned to organic growth in both revenue
and EBITDA, thanks in part to strong
Confi
dence
cost efficiency.
In emerging
markets,
we are achieving
sustained
growth supported
in the
future
by thestrength
ofGroup
our brand,
our networks
Vodafone
Plc
Annual Report 2016
and our distribution.
In Europe, the majority
of our markets have returned to growth,
reflecting a more stable regulatory and
macroeconomic environment and better
competitive performance than in recent years.
Our key strategic drivers data, convergence
and enterprise are at the heart of this
continued improvement.
Vodafones KPIs also scored well in our assessment

process. The KPIs are well-chosen, linking well
with the strategy to demonstrate the progress
thecompany has made over the year.
Project Spring, our two year 19 billion

investment programme, which was designed
to placeVodafone at the forefront of the
growth in mobile data and the increasing trend
towards the convergence of fixed and mobile
services, came to its close in March 2016.
Highlights include:
a 4G population coverage of 87% in our
European markets, up from just 32%
in September 2013
a Extensive modernisation and capacity
improvements, with 93% of our European
network now single RAN and 90% with
high capacity backhaul
a 3G population coverage of 95% in targeted
urban areas in India, and 4G launched in the
last few months
a 91% of all customer data sessions in Europe
now at speeds of 3 Mbps or better the rate
needed for high definition video streaming
a Dropped call rates down by 40% since
September 2013 so customers
on average now only lose one call in 217
Our strategy
We aim to be a converged communications leader, investing to provide our customers with differ
customer service. Together with capturing the scale and efficiency benefits of our global presenc
enabling us to sustain our investment levels, further increase our network differentiation and me
Vodafone Group Plc

Annual Report 2016
8.0
10
Data
Convergence
5.0
0
8.
HDISU?
Overview
Strategy review
a Further expansion in enterprise products

and services, with IP-VPN extended
to 70 countries, IoT connectivity platform
to 30 countries and cloud & hosting
to 12 countries
High speed, worry-free
Context
a As smartphone penetration increases,
customers want faster and more reliable
data services
a Customers have multiple mobile devices
and want a single, worry free bill
What were aiming for

a Were encouraging customers to use 4G
to give them a better user experience.
The number of 4G customers more than
doubled to 47 million in the year
Vittorio Colao
Chief Executive
a We are driving data usage by bundling

content with 4G. Data usage grew 71%
in the year, and video usage accounts for
around one-third of data traffic
rentiated network access and excellent

ce, we aim to generate attractive returns,
eet our customers high expectations.
a Increasing smartphone penetration

also helps drive data usage. 58%
of our customers have a smartphone
in Europe, compared to 52% last year
Total data traffic across our network grew 71%

in the year, mainly reflecting the increased
take-up of 4G. Driven by Project Spring,
we now offer 4G services in 21 of our markets,
with India, Turkey and Albania added during
the year. Our 4G customer base grew by 126%
to 47 million, with average usage typically
doubling when customers migrate from 3G
to 4G. From a commercial perspective, we are
focusing on offering customers worry-free
data usage, with bigger data bundles and more
inclusive roaming. We now have the most
extensive 4G roaming network in the world,
reaching over 90 countries. Despite this strong
progress, only 27% of our European customers
are using 4G, giving us significant opportunity
for further growth.
Our network investments are yielding very

positive results in our major markets, with
a number of independent tests demonstrating
improvements in data coverage and
performance, and placing us very clearly
in the top tier of network operators. We ranked
best overall in Italy and Spain, best network
in London, and a strong number two network
overall in Germany.
In AMAP, progress has been equally strong.
In South Africa, we have built 3G coverage
to 99% and 4G coverage to 58% significantly
ahead of our competitors. We have developed
pricing plans that make data affordable
for customers across every demographic.
This has been further boosted by the success
of Vodafone-branded mobile phones and
tablets. With these products, we are able
to bring the same quality and functionality
as well-known phone brands to the market
at a much reduced price point, opening
up mobile data services for low income
customers for the first time.
Additional information
a Customers who are on the move

demand high-definition video
capabilities and low latency speeds
(fast reaction time) for a more
enjoyableexperience
We are witnessing various drivers of data

growth across our markets: the increasing
penetration of smartphones, both in Europe
and emerging markets; high speed 3G and 4G
networks, delivering consistent high-definition
video to customers on the move; bigger screen
sizes for a richer experience; the proliferation
of over-the-top video services; and the rapid
migration of social media from the desktop
to mobile. Customers increasingly expect high
speed data coverage as much as they expect
reliable voice services. Our data strategy
is simple: to build high quality mobile data
networks, to encourage worry-free usage
at fair prices, and to offer products and services
tailored to specific needs and accessible
to a wide range of users.
Financials
During the year we also significantly stepped

up our focus on improving our customers
experience of our network and customer
service, in order to bring to life the clear
customer benefits of our investments.
As measured by Net Promoter Score,
we ended the year as the leader in 13 out
of 21 markets and improved in 15 of these
markets: good progress, but still much
to do to build clear differentiation.
Data
Governance
a Fibre networks that provide high

speed broadband to 72 million homes
in Europe; including 30 million on our
own infrastructure
Performance
unities
In India, we have experienced strong growth

in data over the last few years since the launch
of 3G in 2011. Through Project Spring, we have
extended our 3G network by 40,000 base
station sites to 55,000 since September 2013.
We now have 27 million 3G customers out
of a total base of 198 million mobile users.
a We want our customers to use our

services wherever they are. Our 4G
roaming network reaches 93countries
Average smartphone usage in Europe
MB/month
2014
473
2015
2016
197m
755
1,120
of our customers use data, representing

43% of all customers, up from 40% last year
Enhancing customer services

M-Pesa, our money transfer service,
now has more than 25 million active
customers, an increase of 27% in the year,
boosted by market launches in Albania and
Ghana and supported by a network of more
than 261,000 agents in 11 countries.
Vodafone Group Plc

Annual Report 2016
Enterprise
11
CEO owning
thestrategy, with
clearsummary
panelat the start
ofeach section
21
22
radley yeldar.
Intu
Although the CEO doesnt fully own the strategy
inthe manner of Vodafones report, he does provide
a valuable introduction which prepares the ground
for the content that follows. This includes a key
summary page that transparently demonstrates
the progress and performance made during the
year, with links to the relevant risks and KPIs.
TheKPIs are carefully chosen, with explanations
of whyeach is important, how it is measured and
howthecompany has performed.
The intu difference
intu properties plc

Annual report 2015
5.0
8.0
8.0
HDISU?
34
32
intu properties plc Annual report 2015
Strategic report
Strategic overview
intugroup.co.uk
intu properties plc Annual report 2015
Key performance
indicators
33
Strategy overview
We have clear strategic objectives to ensure the business
model is put into action effectively
Optimising
asset performance
2 UK development
momentum
We are achieving this by

making our locations the most desirable for shopping and socialising
astutely managing the assets to take advantage of new trends and occupiers
building long-term partnerships with local authorities and communities
Making the
brand count

offering a distinctive customer signature experience to all our centres
having the best-in-class digital offering for retailers and customers
delivering continued world class service to retailers and shoppers
Progress in 2015
Priorities in 2016
Progress in 2015
Priorities in 2016
increased the leisure and catering elements

of centres with the opening of the new
leisure development at intu Potteries and
restaurant quarter at intu Victoria Centre
introduced new brands to our customers
including Kiko, Davids Bridal and
Red Dog Saloon
built local authority and parliamentary
relationships and made representation on
retail issues including business rates and
Sunday trading
agree terms on nal leases for catering

developments at intu Metrocentre,
intu Eldon Square and intu Bromley
continue to introduce new entrants to
our centres to enhance the tenant mix.
This may be from online brands looking
for a store presence
continue to deliver growth in like-for-like
net rental income
built on the Tell intu programme and

improved customer experience with net
promoter score increasing 20 per cent
increased retailers trading on intu.co.uk
to over 350, increasing sales through
the website
secured national brand promotions with
20th Century Fox and MasterCard
build on the success of our annual events,

such as Student Nights
continue to build new partnerships with
global brands
nationwide launch of the intu app
increase revenues from in centre and
online initiatives
KPIs we use to measure our success
Managing risk
optimising asset performance

encompasses our whole business
and as such is measured by all KPIs
property market
operations
brand

delivering the required planning approvals for all projects
generating the required level of demand to commence a project
having the required funding to progress the pipeline
Progress in 2015
Priorities in 2016
started work on the major extension at

intu Watford
started restaurant developments at
intu Metrocentre, intu Eldon Square
and intu Bromley
achieved planning approval for the
redevelopment of intu Broadmarsh
complete ongoing developments at

intu Metrocentre, intu Eldon Square
and intu Bromley
continue the extension at intu Watford
commence major projects at
intu Broadmarsh and intu Lakeside
resolve planning issues at
intu Braehead and intu Milton Keynes
Managing risk
shareholder return
total nancial return
prime property assets
GVA
property market
nancing
developments and acquisitions
brand
For more information on KPIs see

pages 34 and 35
We measure progress against strategic objectives

using the following nancial and non-nancial
performance measures
Key to strategic objectives

3
4 Seizing the growth

opportunity in Spain
Managing risk
footfall
like-for-like net rental income
shareholder return
income performance
GVA
property market
operations
brand
23
Optimise asset performance
UK development momentum
Make the brand count
Seize the growth opportunity in Spain

building a platform of the best centres in Spain through acquisition and development
delivering the same brand experiences and returns in Spain as in the UK
moving the development options forward to a point where we can consider exercising
them and commencing developments
Progress in 2015
Priorities in 2016
integrated Puerto Venecia into the Group

following its acquisition in January 2015
rebranded Parque Principado as
intu Asturias, introducing the intu
brand to Spain
exercised the option to acquire the land
near Mlaga for the construction of
intu Costa del Sol
gain required planning approvals and level

of pre-lets to start intu Costa del Sol
continue to improve asset performance
of Spanish centres
increase the exposure of the intu brand
in Spain
Managing risk
footfall
like-for-like net rental income
shareholder return
total nancial return
income performance
prime property assets
property market
nancing
developments and acquisitions
brand
For more information on risk see

pages 37to 39
Strategic progress and

priorities clearly defined
Footfall (%)
2
1
0
-1
-2
-3
-4
-5
+0%
-1%
2011
2012
intu
Experian
2013
2014
100
98
96%
94
95%
92
How is this measured?

Footfall numbers across
intus centres are captured
using a combination of
person or car counting
cameras located at specic
entrance and exit points
within the centre.
How have we performed?

Footfall was unchanged
in 2015, ahead of the
1 per cent reduction in
the national benchmark
as measured by Experian,
continuing the trend
of outperforming
this benchmark.
Strategic
objective
Why is this important?

Attracting and retaining
the right mix of retailers
and catering and leisure
operators will enhance
our centres appeal and
trading environment.

The passing rent of let
and under-offer units
expressed as a percentage
of the passing rent of let
and under-offer units plus
the ERV of unlet units.

Occupancy has increased
during the year to
96 per cent and
remains above the IPD
(retail) monthly index
benchmark gure.
Strategic
objective

Measures the organic
growth in income
generated from the
Groups properties
in the year.

Removes from the
year-on-year movement
in net rental income
the impact of acquisitions,
developments
and disposals.

Like-for-like net rental
income has returned to
growth in 2015 reecting
improved occupancy,
better rental values from
strong retailer demand,
fewer tenants going
into administration
and development units
coming back on stream,
in particular in the second
half of the year.
Strategic
objective

The Group showed a small
negative shareholder
return in 2015 compared
to a rise in the REIT sector
which was largely driven
by REITs with exposure
to central London offices.
Strategic
objective
1
3
4
2015
Occupancy (%)
96

Footfall is an important
measure of a centres
popularity with customers.
Retailers use this measure
as a key part of their
decision-making process
on where to locate
their stores.
90
2011
2012
2013
2014
2015
intu
IPD (retail)
Like-for-like net rental income (%)

4
+3.6%
-2.7%
-1.9%
-3.2%
+1.8%
-2
1
3
4
-4
2011
2012
2013
2014
2015
Shareholder return (%)

30
20
10
0
-10
-20
-30
+11%
-1%
2011
2012
intu
FTSE REIT index
Clear KPI explanation

and link to strategy
2013
2014
2015

Combines share price
movement and dividends
to produce a direct
measure of the change
in shareholder value
in the year.

Uses the movement
in share price during
the year plus dividends
paid in the year.
1
2
3
4
24
radley yeldar.
How sustainable
is the business?
What we measure
Risk
Sustainability
Governance
Forward-looking aspect
Sustainability is itself a term that can cause confusion.
Toomany organisations see it as being only concerned
withenvironmental performance and, in some cases, licence
to operate. While these issues are clearly important, for us
this category is all about the future in the broader sense.
How is the company planning for the years to come? Is this
a sustainable business or one that will merely shine today
before fading away?
A good report should describe the principal risks that face
the business (including environmental risks) and how it
is mitigating those risks. As well as risk, this conversation
relatesto corporate governance the reader should have
aclear understanding of the governance structures in
placeand how the board is managing the business.
What we have seen

The good news is that this year average scores have
increased across all the criteria in this category. Its clear
tousthat more companies are recognising the need to
provide a well-rounded, transparent and balanced view
ofpast performance and future prospects.
Sustainability content is becoming more strategic central
to both the companys performance and its prospects. Bestpractice reporters are explaining why their sustainability focus
areas are material to the business and how they may impact
future performance. Risk disclosure has improved, with more
companies taking time to discuss how the risk landscape has
evolved during the year.
Governance has also seen a step-change regarding
disclosure. The FRC published a report during the year
onhow boards can influence corporate culture. In response,
some companies now make an effort to explain how this
influence works in practice within the company. These
reporters are also providing more transparent descriptions
ofboard activity and evaluation.
The bad news is that despite the handful of shining
examples of good practice we came across, many
companies continue to avoid transparent opinion. It seems
that for some, the least said the better. There is little forwardlooking content and even less transparency when it comes
to risks and what happens in the boardroom.
For example, one might expect the UK referendum and the
issues surrounding Brexit to take centre stage in any analysis
of the future prospects of FTSE 100 companies. Regardless of
whether the likely outcome is broadly positive (falling pound)
or negative (trade barriers), it surely demands discussion? Yet
most of the reports we assessed all but ignored the whole
Brexit issue. Another example is around executive pay, an area
that concerns many investors. Few companies transparently
articulate a viewpoint on this and most content relating to
remuneration remains clouded by impenetrable vocabulary.
HDISU?
25
5
5.7
1
5.5
Three of the best

M&S
BT
Lloyds Banking Group
7
5.0
5.33
100%
0%
5.1
26
radley yeldar.
How sustainable is the business?
M&S
The M&S report puts sustainability close to centrestage, providing a clear picture of how the business
will continue in the future. Risks are linked to the
business model, giving the report a well-connected
and holistic feel. The individual risks and how they
are mitigated are discussed with transparency, as
arethe changes in risk level.
Governance is another strong area for M&S. It shuns
the easy boilerplate approach still adopted by many
reporters and instead provides good insight into
board activities and discussions.
7.0
9.0
6.0
ANNUAL REPORT &

2016
0
8.
KEYMale
PERFORMANCE
MaleMEASURES
62%
71%
Retired: 2 April 2016. In line with best

practice, Martha chose not to seek
re-election at the AGM following
completion of her third three year
term and retired from the Board
on 2 April 2016. GROUP REVENUE
Other roles: Non-Executive Director

of British Land, Trustee of Royal
Opera House Covent Garden Limited,
Trustee of Aldeburgh Music.
UNDERLYING PBT
10.4bn
684.1m
GROUP SECRETARY
Female
29%
91%
1
RETAIL
HDISU?
FREE CASH
FLOW
(PRE SHAREHOLDER
RETURNS)
EARNINGS PER SHARE
EMPLOYED
100%
15.0%
34.8p
CONSUMER
27
539.3m
N A
Performance
Share
55%
46%
55
5%
46
6%Plan (PSP)
FINANCE
Andrew Fisher
Non-Executive Director
Amanda Mellor
Group Secretary and
Head2015/16
of Corporate Governance
SCHEME
ANNUAL
BONUS
Appointed:
December
2015
Appointed: April 2015
E-COMMERCE
& TECHNOLOGY
INTERNATIONAL
EXPERIENCE
GOVERNANCE
Richard Solomons
Non-Executive Director
Annual Bonus Scheme
Other roles: Chief Executive of

IHG, Governor of the Aviation
Travel Industry Group of the World
Economic Forum, Member of the
Industry Real Estate Financing
Advisory Council.
Appointed: July 2009

Skills, competence and experience:
Andrew
has substantial
experience
Other roles:
Bonus
payments
made in respect
ofNon-Executive Director
Corporate element
of the international consumer and
of Kier Group plc.
performance for the year were
between
NON-EXECUTIVE
technology sectors, and has led the
DIRECTOR TENURE
21% and
53%
of maximum
bonus
successful
growth
of a number
of
Marc Bolland
15.9%
technology-focused
opportunity.enterprises
This resulted in payments
0-1 YEAR 16.66%
over the past 18 years. He is currently
(1 DIRECTOR)
ranging
from
207,000 to 622,000 with
Executive
Chairman
of Shazam
1-3 YEARS 16.66% 5.9%
Patrick Bousquet-Chavanne
Entertainment
Limited,
having being deferred into
half of all
amounts
(1 DIRECTOR)
previously served as Chief Executive
shares
forPrior
three
years, subject to malus
Officer
since 2005.
to that,
3-6 YEARS 66.66%
Andrew
was European
Managing
provisions
being
met.
(5 DIRECTORS)
Steve Rowe
10.7%
Director of Infospace Inc and founder
and Managing
TDLI.com.
FurtherDirector
detailofof
the performance targets
He is a member of the Advisory Board
KEY TO COMMITTEES
the extent
tothe
which each were achieved Laura Wade-Gery
5.9%
to theand
Secretary
of State for
Review
of the
BBC Charter.
N Nomination R Remuneration
are
shown
on page 60 of this report.
Committee
Other roles: Executive Chairman
CC
See
more on Annual
Helen WeirA Audit
24.1%
Chair
of Shazam
Entertainment
Limited, Bonus Scheme on p60
Non-Executive Director of
MoneySupermarket.com Group plc.
Full biographical details of
Maximum bonus possible
each director are available on
Skills, competence and experience:

Richard brings strong commercial,
nancial, consumer, branding and
global experience to the Board.
His extensive international retail,
and global consumer experience,
and role as a CEO of an international
business provides valuable insight
to the Board. During his career at
IHG, Richard was integral in shaping
and implementing IHGs asset-light
strategy, which has helped the
business grow signicantly since
it was formed in 2003, as well as
supporting the return of $10.4bn
to shareholders.
marksandspencer.com/thecompany
See more on p60-61

(max 60%)
OUR BUSINESS
ALIGNED TO REMUNERATION
Individual element (max 40%)
16.0%
27.6%
10.0%
33.6%
28.4%
Actual bonus earned
OUR PERFORMANCE
N R
38%
Female
SECTOR
EXPERIENCE
RETURN ON CAPITAL
OUR PERFOR
in September 2016.
Quick snapshot of
Board experience
andcomposition
PERFORMANCE SHARE PLAN (PSP) 2015/16
53
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
KEY PERFORMANCE MEASURES
Impact on incentive payment for 2015/16
Performance
Share Plan
Further detail of the performance targets

and the extent to which each were achieved
are shown on page 60 of this report.
Underlying Group
Prot Before Tax (PBT)
Annual Bonus Scheme Underlying Group PBT for the year was 684.1m, and above the target set
for bonus payments to begin. For executive directors, 5.9% of bonus was
payable as a result of 2015/16 PBT results.
Performance
Share Plan
Average three-year ROCE performance of 14.7% (which included 15.0%

achievement for 2015/16) was below the threshold required for this element
of the PSP to vest.
Underlying Earnings
per Share (EPS)
Performance
Share Plan
EPS growth was 2.9% over the three years ending in 2015/16 (based on an
outturn of 34.8p for this year) and was below the 5% growth required for
vesting under the PSP.
Free cash ow1
Annual Bonus Scheme Free cash ow performance for the year was above the maximum target.
The Committee felt it appropriate to adjust downwards the outturn for
bonus purposes as a result of items such as project delays resulting in an
achievement of 18.2% of bonus.
See full Strategic alignment of pay on p58
SINGLE FIGURE REMUNERATION 2015/16
Patrick
Bousquet-Chavanne
714
Steve
Rowe
720
Laura
Wade-Gery
542
Helen
Weir
946
Fixed pay
366
230
207
50
69
72
2,039
1,130
1,019
Total PSP vested
See Annual Bonus Scheme on p53 & p60-61
Steve Rowe
Laura Wade-Gery
(max 60%)
OUR BUSINESS
16.0%
27.6%
10.7%
10.0%
Helen Weir
EPS weighting/performance
Three-year EPS growth of 2.9% was below
the 5% required for threshold vesting.
1,566
ROCE weighting/performance
Average ROCE over the last three years
was 14.7%, below the 15.0% required for
this element of the award to vest.
Revenue weighting/performance
As a result of 2015/16 Multi-Channel
revenue performance, 4.8% of awards
will vest. Other revenue measures were
not met, meaning these elements of the
award will lapse.
See PSP on p53 & p62-63
See more on Performance Share Plan

on p62
Revenue*
Maximum possible
Actual performance
30%
4.8%
*Weighting (by revenue source)

UK
International
Multi-channel
10%
10%
10%
%
30
EPS
GOVERNANCE
20%
0%
CE
20
33.6%
5.9%
28.4%
24.1%
Maximum bonus possible
The chart opposite illustrates the results

of the three-year performance against
the PSP targets which were set in 2013.
Awards will vest in June 2016, with an
estimated vesting value detailed in the
single gure table.
Individual element (max 40%)
15.9%
5.9%
Actual bonus earned
See more on p62-63
PSP performance weighting

EPS
Maximum possible
Actual performance
50%
0%
ROCE
Maximum possible
Actual performance
20%
0%
Revenue*
Maximum possible
Actual performance
30%
4.8%
*Weighting (by revenue source)

UK
International
Multi-channel
10%
10%
10%
%
30
EPS
CE
20
See more on Performance Share Plan

on p62
821
620
Total bonus
128
Patrick Bousquet-Chavanne
RO
See more on Single Figure Remuneration

on p58
622
Corporate element
Marc Bolland
PERFORMANCE SHARE PLAN (PSP) 2015/16
Total
000
1,289
See more on p60-61
0%
Fixed pay comprises salary, benets and

pension benets. Further information on
payments made under the Annual Bonus
Scheme and Performance Share Plan as a
result of one- and three-year performance
respectively is illustrated on page 53, with
full detail provided later in this report.
See more on Annual Bonus Scheme on p60
See more on p58
Marc
Bolland
539.3m
Annual Bonus Scheme
Revenue weighting/performance
As a result of 2015/16 Multi-Channel
revenue performance, 4.8% of awards
will vest. Other revenue measures were
not met, meaning these elements of the
award will lapse.
Return on Capital
Employed (ROCE)
The graph opposite summarises the total

payments made to executive directors
in respect of the 2015/16 nancial year.
These gures illustrate those detailed in
the single gure table later in this report.
FREE CASH FLOW

(PRE SHAREHOLDER
RETURNS)
34.8p
ANNUAL BONUS SCHEME 2015/16

Bonus payments made in respect of
performance for the year were between
21% and 53% of maximum bonus
opportunity. This resulted in payments
ranging from 207,000 to 622,000 with
half of all amounts being deferred into
shares for three years, subject to malus
provisions being met.
Multi-channel revenue was the only metric above threshold target for the
year resulting in 4.8% vesting of PSP awards under this element.
1. Pre shareholder returns and pre acquisition of subsidiary.
EARNINGS PER SHARE
15.0%
ROCE
Maximum possible
Actual performance
OUR PERFORMANCE
Group Revenue
Incentive scheme
Further details of the alignment with

non-nancial and strategic measures
are set out in the table on page 58.
RETURN ON CAPITAL
EMPLOYED
Performance Share Plan (PSP)
GOVERNANCE
KPI
See more on p58
This clearly demonstrates a strong linkage

between performance metrics, payments
to directors and business performance over
the short- and long-term.
UNDERLYING PBT
684.1m
ALIGNED TO REMUNERATION
STRATEGIC PAY ALIGNMENT 2015/16

The table below shows the integration
between M&Ss nancial key performance
indicators as shown on page 18 and the
senior remuneration framework for 2015/16.
GROUP REVENUE
10.4bn
*REVE
NU
E
This overview summarises our Policy in action and

shows the alignment between our remuneration
framework, the Companys performance and
payments to directors for 2015/16.
50%
0%
REMUNERATION
AT A GLANCE
EPS
Maximum possible
Actual performance
RO
ROCE weighting/performance
Average ROCE over the last three years
was 14.7%, below the 15.0% required for
this element of the award to vest.
52
MARKS AND SPENCER GROUP PLC

DIRECTORS REPORT: GOVERNANCE
EXECUTIVE REMUNERATION 2015/16
PSP performance weighting
0%
EPS weighting/performance
Three-year EPS growth of 2.9% was below
the 5% required for threshold vesting.
See more on p62-63
*REVE
NU
E
The chart opposite illustrates the results

of the three-year performance against
the PSP targets which were set in 2013.
Awards will vest in June 2016, with an
estimated vesting value detailed in the
single gure table.
approach. Further detail

page 48.
Risks mapped against

the business model
BA
OUR PERFORMANCE
GOVERNANCE
INTEGRITY
Strive to do
the right thing
CYBER/
INFORMATION
SECURITY
EC
IMPACT
PLAN A
SOU
RCE & B U Y
CLOTHING &
HOME ETHICAL
SOURCING
IG N
IT
INTEGRATION
FOOD SAFETY
AND INTEGRITY
FOOD
COMPETITION
CRITICAL
LO
MAJOR
&G
MODERATE
N NET RISK LEVEL AFTER MITIGATION
CLOTHING &
HOME SUPPLY
CHAIN AND
LOGISTICS
NETWORK
Aim to
improve
things for
the better
GE
MINOR
G GROSS RISK LEVEL BEFORE MITIGATION
Listen
actively
and act
thoughtfully
RA
TE
INNOVATION
OP
10
INTERNATIONAL
BUSINESS
TRANSFORMATION
NG
11
M&S.COM
BUSINESS
RESILIENCE
CORE
PURPOSE
MAKING
EVERY
MOMENT
SPECIAL
&D
ES
EN
GA
G
INSPIRATION
ST
NI
AN
PL
CHANGING
CONSUMER
BEHAVIOURS
& R E S P ON D
PLAN A
Aim to excite
and inspire our
customers
SE
Mitigation
Required actions
are agreed and
assigned, with
target deadlines
and quarterly
status updates
AN
Total Board*
Female 5
Male 8
3. Our awards this year include

The Times Top 50 Employers for
Women, Training Journals Best
Operational Programme for
our store induction programme
and, for the second year running,
the Princes Trust Young Achiever
Award, which went to Stacey Fox
from our Swansea store.
IN TOUCH
&
38%
13
2. All our people can inuence

change through BIG, which has
3,500 representatives from every
store and business area who
gather feedback and represent
colleagues on the topics that are
most important to them. BIGs
agenda this year included the
national living wage and Sparks.
ST
TE N
ND
%
62
* Includes Marc Bolland and Martha Lane Fox who retired

from the Board on 2 April 2016. Refer to p33 for current
Board diversity information.
1. Our Inspiring Women

Network events have seen
a raft of high-prole visitors
deliver motivating speeches
to our employees. Guests this
year have included Ruby Wax
and Baroness Karren Brady.
I O PO L I T I C AL U NR E
L IS
BR A
168
Total senior managers

Female 70
Male 98
Assessment
Risks assessed in
terms of likelihood
of occurrence and
potential impact
on the Group
SO C
CLOTHING & HOME

TRANSFORMATION
N
G
&
42%
RISK AND OUR BUSINESS MODEL
G G
G
CH
FO RE IG N E X
%
58
Total employees
Female 57,841
Male 22,200
The diagram below maps our principal risks

to our business model. This mapping helps
us assess and manage risk, and provides a
greater understanding of our principal risks
in the context of our business operations,
including their broader inuence on
viability, as discussed above.
GY
80,041
To achieve a holistic view of the risks

facing our business, we consider those
that are external to our business, core
to our day-to-day operation, related to
business change activity, and those that
could emerge in the future.
During 2015/16, the directors also assessed

the long-term viability of the Company
in the context of its principal risks. The
inclusion of a Viability Statement in Annual
Reports from 2016 is a new requirement
RISK LIKELIHOOD AND IMPACT

Identication Risks
highlighted and
documented in a
centrally managed
risk register
72%
PRINCIPAL RISKS AND UNCERTAINTIES

Overleaf are details of our principal risks
and uncertainties and the key mitigating
activities in place to address them. It is
recognised that the Group is exposed to
risks wider than those listed. We disclose
those we believe are likely to have the
greatest impact on our business at this
moment in time and which have been
the subject of debate at recent Board
or Audit Committee meetings.
Following on from last years progress,

we have taken our risk appetite work
a step further and the Board has agreed
a set of Group-level appetite statements.
The purpose of these is to articulate the
Boards desired risk-taking approach,
and to support the business in its
management of a number of principal risks.
The current statements summarise normal
risk parameters within which the Group
already operates; as our business evolves
we will continue to rene our risk appetite
statements and approach. Further detail
can be found on page 48.
EL
To drive continuous improvement across

the business, the Executive Board monitors
the ongoing status of action plans against
key risks quarterly.
EMPLOYEE DIVERSITY AS AT 2 APRIL 2016
%
28
Each business area is responsible for

formally identifying and assessing their
risks half-yearly, measuring them against
a dened set of criteria, and considering
likelihood of occurrence and potential
impact to the Group. The Group Risk
function facilitates a similar exercise with
Executive Board members, combining
information to provide a consolidated
view. The top risks (based on likelihood
and impact as illustrated below) form our
Group Risk Prole, which is reported to the
Executive Board for review and challenge,
ahead of nal review and approval by the
Group Board. These principal risks are then
subject to Board discussion during the
course of the year, as appropriate.
under the UK Corporate Governance Code.

The statement is designed to strengthen
stewardship and to encourage directors
to focus on the longer term. Further detail
on this can be found on page 47.
IT
KEY AREAS OF FOCUS

This year the Group Board has placed
signicant focus on dening our risk
appetite. At the highest level, this is an
expression of the types and amount of
risk we are willing to take or accept to
achieve our strategic and operational
objectives. It is a key consideration in
decision-making across the Group and
helps us dene the mitigating activities
required to manage our risks.
EX
TRANSFORMING OUR BUSINESS
As we continue to transform our business,

we must ensure that the changes we make
are implemented and communicated to
employees effectively. The robust processes
we have in place around succession
planning, change management and our
dedicated Employee Communications team
help us mitigate such risks from a people
perspective. Our Business Involvement
Group (BIG), M&Ss network of elected
employee representatives, enables us to
inform, involve and consult with colleagues
across our business on our future plans.
BIG gives colleagues the chance to voice
their opinions and ideas, get answers and
have their views represented.
APPROACH TO RISK MANAGEMENT

The Board is accountable for carrying
out a robust assessment of the principal
risks facing the Company, including those
threatening its business model, future
performance, solvency and liquidity.
On behalf of the Board, the Audit
Committee reviews the effectiveness
of the Group risk management processes.
BR
E&
Our Your Say survey showed that employee

engagement levels remain high at 78%.
We want to develop and celebrate the talent
within M&S, and its only right that good
ideas are given a platform. Give Me Five,
our initiative where employees pitch ideas
to senior managers, has given employees
a sense of ownership and a number of the
pitched ideas have been implemented.
The idea of Give Me Five itself came from
some of our store and office colleagues
keen to support our Fit for the Future drive
to bring a more entrepreneurial spirit to M&S.
FOOD SAFETY
AND INTEGRITY
PLAN A
This year we extended our Make Your Mark

youth employment scheme to our head
office and Castle Donington distribution
centre, increasing the options available to
young people. Across the business, 1,400
people took their rst steps into work thanks
to the programme. Meanwhile, our Marks
& Start scheme for people who face barriers
getting into work helped an additional
1,400 people through work placements
in our stores and distribution centres.
We introduced Spark Something Good to
encourage our people to make a difference
in their local communities. The scheme
allowed employees to coordinate their
annual volunteer day in a collaborative
way. By taking part in a series of community
projects in individual cities on the same
day, employees mobilised as teams for
good causes. In London, we transformed
24 community projects over 24 hours. The
scheme will be rolled out to 24 cities across
the UK and Ireland over two years we have
already completed ve cities; London,
Manchester, Swansea, Edinburgh and Dublin.
FOOD
COMPETITION
ALMOST CERTAIN
ENGAGED AND ENTREPRENEURIAL
DIVERSITY AND WELLBEING
People are increasingly looking to work for

organisations that give them the freedom
to be themselves. We have developed an
approach to Be Yourself in our induction
process, encouraging employees to
recognise peoples differences while
not being afraid to express their own.
Our employees wellbeing is also crucial
to us and we continue to invest in
programmes such as Dare to Care, an
internal campaign focused around raising
awareness of mental health.
IT
EX
We have built on last years Fit For The

Future programme with a series of training
initiatives designed to help employees
live our values of Inspiration, Innovation,
Integrity and In Touch. Last summer, our
top 160 managers took part in a leadership
development programme called Fit to
Lead. The initiative looked at how we
can be more collaborative, agile and
entrepreneurial as an organisation. We also
ran events for 750 line managers and 3,500
store managers in which they examined
how our values can drive high performance.
The feedback from all the events was
extremely positive. We received 50,000
comments specic to living the values in
our annual Your Say survey they really
resonate with our employees.
OUR BUSINESS
As with any business, we face risks and uncertainties

on a daily basis. Effective risk management
places us in a better position to be able to achieve
our strategic objectives.
Our people bring our values to life.

Their talent, commitment to our customers and
pride in M&S are key to our long-term growth.
LIKELY
RISK MANAGEMENT
LIKELIHOOD
OUR PERFORMANCE
BR
BA
PLAN A
SOU
RCE & B U Y
27
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
OUR PEOPLE
LIVING OUR VALUES
CLOTHING &
HOME ETHICAL
SOURCING
26
OUR PERFORMANCE
OP
IT
INTEGRATION
MARKS AND SPENCER GROUP PLC

STRATEGIC REPORT
EL
EN
SERV
E&
Strive to do
the right thing
NG
Aim to
improve
things for
the better
INTEGRITY
CLOTHING &
HOME SUPPLY
CHAIN AND
LOGISTICS
NETWORK
INNOVATION
GL
RA
TE
NI
AN
PL
Listen
actively
and act
thoughtfully
CYBER/
INFORMATION
SECURITY
EC
CORE
PURPOSE
MAKING
EVERY
MOMENT
SPECIAL
SE
E&
ST
INSPIRATION
&
INTERNATIONAL
& R E S P ON D
PLAN A
Aim to excite
and inspire our
customers
ND
10
BUSINESS
TRANSFORMATION
&
GA
G
CHANGING
CONSUMER
BEHAVIOURS
GY
BR A
M&S.COM
BUSINESS
RESILIENCE
NG
ON
TE N
IN TOUCH
11
HA
AL
C
FO RE IG N E X
CLOTHING & HOME

TRANSFORMATION
L IS
ST
&D
ESIG
I O PO L I T I C AL U NR E
SERV
SO C
GOVERNANCE
RISK AND OUR BUSINESS MODEL
POSSIBLE
radley yeldar.
he directors
also assessed
ability of the Company
its principal risks. The
bility Statement in Annual
M&S continued
16 is a new
requirement
UNLIKELY
28
The diagram below maps our principal risks

to our business model. This mapping helps
us assess and manage risk, and provides a
greater understanding of our principal risks
in the context of our business operations,
including their broader inuence on
viability, as discussed above.
HDISU?
29
BT
This is another report that features a logical,
easy-to-follow discussion around how the risk
environment has changed during the year. Risks
arelinked to the business model and strategy,
helping the reader grasp how these risks could
materially impact the business in the future.
BT Group plc
Annual Report & Form 20-F 2016
Broadening and
deepening our
customer relationships
The section on stakeholder relationships and

environmental performance includes clear
referenceto the companys targets for 2020
anexcellent way to convey BTs commitment
to being a sustainable company and therefore
agoodlong-term investment.
Online case studies clearly

relate to stakeholders
6.0
7.0
8.0
7.0
30
radley yeldar.
BT continued
38 BT Group plc
Annual Report 2016
Overview
Stakeholders
and relationships
Creating a connected society
Our markets and customers
We sell fixed-voice, broadband, mobile and TV products and

services to individuals and households in the UK. For small and
medium-sized enterprises, as well as larger businesses in the UK,
we offer fixed-voice, broadband, mobility, networking and IT
services. In both the UK and globally we offer managed networked
IT services to multinational corporations, domestic businesses and
public sector organisations.
Some of our customers are also our competitors. This is because
we sell wholesale products and services to other communications
providers in the UK and overseas.
You can read about our markets, customers and the services
we provide them in our lines of business section, from page 57.
Communities and societya

BTs purpose is embedded at the heart of our business, and has
helped us to deliver economic growth and wider societal and
environmental benefits. During the year we invested 35m to
accelerate a number of environmental and societal priorities that
help to bring our purpose to life (see page 43). This investment is
a mixture of cash, time volunteered, and in-kind contributions. It
is equivalent to 1.1% of our previous years adjusted profit before
tax. Over the last five years weve invested over 153m,
an average of 1.18% of our adjusted profit before tax.
20
1.01%
2013
2014
1.15%
1.10%
35.0
1.12%
32.5
1.50%
27.2
30
31.9
m
40
27.1
BTs total investment in society

Year ended 31 March
10
0
2012
2015
Investment time, cash and in-kind support

Percentage of previous year's adjusted prot before taxation
2016
More than 9 out of 10 people in the

UK will have access to our fibrebased products and services
Help 10m people overcome social

disadvantage through the benefits our
products and services can bring
Data excludes EE.

discussed in detail
Financial statements
9/10
10
m
Help generate more than 1bn for

good causes, using our people, their
skills and our technology
Our lenders, mainly banking institutions and bondholders, play

an important role in our treasury and funding strategy.
bn
This year we added 94m towards our 1bn target. 60m of this
was raised via MyDonate, our commission-free online fundraising
and donations platform. This takes our overall fundraising total to
327m.
This year, we extended our fibre footprint in the UK to more

than 25m premises and in line with our 2020 goal this
means around 8.5 out of 10 people can now access fibre-based
products and services (see page 85). We plan to extend coverage
even further so that fibre availability in the UK exceeds the
Governments current target of 95% by the end of 2017.
As well as supporting a number of smaller charities and individual

fundraisers, we again used MyDonate and our communications
technology with help from our volunteers to support various
large telethons (page 34). These included Comic Relief, Children
in Need, and the Disasters Emergency Committee appeal after the
earthquake in Nepal.
We continue to push for greater digital inclusion, both by playing

a leading role in the development of the Governments Digital
Inclusion Outcomes Framework, and through the use of our own
products.
In the UK, we provide discounted calls and line rental charges to

members of The Charities Club, saving those charities 1.2m on
their phone bills.
Were helping low income groups to get online with two products:
BT Basic + Broadband and our BT Business Digital Inclusion for
Social Housing solution. The launch of the BT and Barclays Wi-Fi
in Our Community initiative is providing access, guidance and
coaching to those who need it most.
Keeping people safe online remains a priority. Internet Matters,
the website we co-founded in 2014 to help parents keep their
children safe online, has now had over 2.5m visitors. The Right
Click, our partnership with UNICEF UK, has seen BT volunteers
deliver 280 workshops in schools, teaching children and parents
how to use the internet safely.
This year weve developed a methodology to measure the social
impact of our products and services. This has been successfully
piloted on three propositions (BT Basic, Digital Inclusion for Social
Housing and Mobile Health Worker) and has been used on a
corporate contract through our work with the Colombian
government (page 62). Having a way to measure the wider
benefits our products and services can bring shows how valuable
ICT, and what we do, has become in peoples day-to-day lives.
We can also use the methodology to influence how we develop
our future products.
Outside the UK, our Connecting Africa programme has now
successfully connected all 30 of the planned SOS Childrens
Villages, in 13 countries, using BTs satellite technology. We
have used this in seven villages to provide a new Healthcare
Management System, improving healthcare services for over
100,000 people.
Our lenders
Our 2020 ambition
We also continue to embed social and environmental criteria into

our business processes, helping us to make better decisions,
stimulate growth and spark innovation. In January we launched
a BT Infinity Lab competition, in partnership with the Department
of Transport, to stimulate social and environmental innovation in
the SME sector.
Governance
Supporting charities and communities
Our 2020 ambitions
As well as our people, our main stakeholders are: our

customers; communities; shareholders; lenders; our
pension schemes; suppliers; government; and regulatory
authorities.
The Strategic Report
We see sport as a positive vehicle for change in young peoples

lives. Through the donations of BT Sport customers, The
Supporters Club funded nine new sports charities and community
sports foundations this year (four in the UK). And we encourage
people to take up sport through the Join In campaign.
Our shareholders
We have around 825,000 shareholders. As well as the Annual

Report and Annual General Meeting, we keep our shareholders
up to date with how were doing through regular mailings. These
often include offers on our products and services that are only
available to shareholders. Our website includes press releases,
newsletters, presentations and webcasts that can also keep our
shareholders informed.
We held a general meeting in April 2015 at which our shareholders
approved the acquisition of EE. And in January 2016 we published
a prospectus for the issue of new BT shares that were part of the
consideration for the acquisition.
Most of our shares are held by institutional investors. We have an
extensive investor relations programme aimed at keeping existing
investors informed and attracting new ones. This programme
includes:
reporting quarterly results, accompanied by a conference call
or presentation from senior management;
teach-ins on key topics;
site visits (for example this year we invited investors to an
innovation event at Adastral Park); and
meetings and conference calls with investors both in the UK and
around the world.
In 2015/16, we held 353 meetings or events with institutional
investors. This compares with 369 in 2014/15.
We were voted the best company for investor relations in England
in the Extel Survey 2015, for the second year running. We also
maintained our second place in the European telecoms sector.
And we won the IR Magazine award for best investor relations
in the European Technology & Communications sector.
These relationships are vital for funding the business and meeting
our liquidity requirements. We tell you more about this on
page 102.
Our pension schemes
We operate defined benefit and defined contribution pension

schemes. The largest is the BT Pension Scheme (BTPS) which has
301,500 members. You can read more about it on page 107.
Our suppliers
Our suppliers play a vital role; their products and services help us
deliver our strategy. We source from across the world and currently
have suppliers in over 150 countries. We spent around 10.2bn
with our suppliers this year (2014/15: 9.4bn). Around 64% of
our spend is with the top 100 suppliers.
We want to get the most from our suppliers especially from their
diversity, skills and innovation. The mix of suppliers keeps evolving
as we expand into markets such as mobility, TV and televised sport.
This year weve grown our supplier base in IT security, to support
our growing investment in cyber security. But weve also removed
over 2,800 suppliers from our procurement systems.
As part of integrating EE, were working to identify opportunities
for cost savings and efficiencies through our combined spend.
Our approach to procurement
We have around 330 BT people in 30 countries working with

suppliers. As part of our cost transformation activities weve
concentrated on making the most of our relationships with
our largest suppliers to get even better value. In-life contract
management of our top 130 suppliers has delivered savings
of around 18m.
Weve continued our Purchase Order (PO) Intercept programme,
reviewing all POs over 1,000 to make sure that were getting
the best from our spend across BT. Our Central Business Services
organisation has hired more people to support this programme.
Theyve reviewed around 90,000 POs, accounting for 4bn of
spend, and have saved us more than 15m.
The Procurement Profession, part of the BT Academy, has grown
this year, developing a rich library of over 120 training modules.
The website attracts nearly 250 visits a month on average.
Our ambition is to have all our buyers accredited and licensed.
And for a few of our expert practitioners to be recognised
externally as fellows of CIPS (Chartered Institute of Procurement
and Supply).
We now have 198 licensed buyers. And there are now five fellows
of CIPS (2014/15: two) leading our procurement activities in BT.
39
Recruiting talented people

A customer-connected workforce
Improving the quality of our customer relationships is at the heart

of our people strategy.
Weve built on previous years, recruiting 900 new field engineers
and more than 900 new people to work in customer-facing roles
in our UK contact centres. Weve also converted 600 agency
workers to permanent employees, so that we keep their skills and
experience in the organisation.
With growing demand for digital skills in the UK, we feel wellplaced to help create a future supply of suitably-skilled people,
helping both our own business and the national economy, and
creating a brighter future for the countrys youth.
We were again in the top half of The Times Top 100 Graduate
Employers. Were one of only four companies in the IT and telecoms
sector to feature in the top 100.
Employee engagement index

Year ended 31 March
3.9
Our 2020 ambition

Help 5m children to receive better
teaching in computer skills
Highest-ever graduate intake
In 2015/16 we hired 300 graduates globally, our highest intake

to date. Were planning on hiring around 300 again in 2016/17.
to broaden and deepen our relationship with them.
3.8
3.7
3.6
3.5
Creating a culture of tech literacy
2012
Weve made a long-term commitment to help build a culture

of tech literacy. As our first goal, we want to help 5m children
by the end of 2020.
2013
2014
2015
Targets give the section

aforward-looking focus
44 BT Group plc
Annual Report 2016
Overview
Reducing our customers carbon footprinta,b

We continue to progress towards our 3:1 goal, measuring the
impact our products and services can have on reducing our
customers carbon emissions.
Overview
Governance
45
This year we generated 3.6bn of revenue from products that

have contributed to carbon abatement up from 3.4bn in
2014/15. As an example, our Field Force Automation services
enable organisations with mobile teams to improve their
productivity by automating fleet and driver scheduling and
reporting. This means they can better manage their fleet of
vehicles, saving fuel and reducing emissions.
3:1 Goal
2015/16b
7.6 Mt
7.1 Mt
4.8 Mt
4.6 Mt
Ratio
1.6:1
1.5:1
BTs worldwide greenhouse gas emissionsa,b,c,e

Year ended 31 March
1,750
750
Our own energy use and carbon footprinta,b
Reducing our energy use
Weve reduced our worldwide energy use for the seventh

consecutive year. In Great Britain we spent around 307m on
energy and fuel this year (2014/15: 306m). We estimate that
our energy savings programme has helped reduce our overall bill
by 29m this year, and by 190m since 2009/10. 95% of the
worldwide energy we buy comes from renewable sources and
were aiming to achieve 100% where markets allow by the end
of 2020.
Our performance as a sustainable

and responsible business
Gwh
2,000
Creating a
connected
society
2,338
2,678
1997
(Base)
151
391
387
190
148
65
194
147
62
182
174
349
126
51
172
2013
2014
2015
2016
Scope 3: Other indirect emissions (eg production of purchased materials

and fuels)e
Scope 2: Indirect emissions from the generation of our purchased energy
(mainly electricity)
Scope 1: Direct emissions from our own operations (eg fuel combustion)
Figures exclude third-party consumption and EE.
2013
2014
2015
2016
2014/15 performance 2015/16 performance Status Page
Use our skills and technology to help generate more than 1bn
for good causes
86m raised for

good causes
94m raised for

good causes
Cumulative total:
234m since 2012
Cumulative total:
327m since 2012
26% of BT people
volunteering
27% of BT people
volunteering
38
34
8.5 out of 10
38
Helping 10m people overcome social disadvantage through the

benefits our products and services can bring
n/a new target
2.6m people reached
38
Creating
a culture
of tech
literacy
Help 5m children to receive better teaching in computer skills
n/a new target
344,000 children
reached
33
Delivering
environmental
benefits
Enable customers to reduce their carbon emissions by at least

three times the end-to-end carbon impact of our business
1.5:1 achieved
1.6:1 achieved
44
Our foundation measures

Our foundations
Investment to accelerate our purposeful business approach;
1.15% of PBT
38
We restate previous years data when subsequent information is deemed to be materially

significant, such as replacing previous estimates with measured figures.
EE data is excluded, in line with the GHG protocol below, pending next years report when we
will provide new baseline numbers.
We use the GHG Protocol Corporate Accounting and Reporting Standard, with UK Government
GHG Conversion Factors for Company Reporting 2015.
Most of our water usage is for office and catering facilities, or to

cool equipment (for example, in telephone exchanges). This year
we reduced our UK water consumption by 10%. Well continue
to target and reduce leaks using our half-hourly meter readings,
provided by our automatic monitoring and reporting programme.
We report on all our greenhouse gas emissions as a single total, by converting them to the
equivalent amount of CO2 using latest government conversion factors.
Detailed emissions data is available from our Delivering Our Purpose website, www.btplc.
com/Purposefulbusiness. To comply with revised GHG Protocol guidance this year, we now
report both market and location-based Scope 2 data. This chart uses a market-based measure
for 2015/16, consistent with the methodology used in previous years.
Sustainability
performance
dashboard
Use our skills and technology to help generate more than 1bn
for good causes
86m raised for

good causes
Cumulative total:
234m since 2012
Cumulative total:
327m since 2012
Inspire 66% (two-thirds) of our people to volunteer
26% of BT people
volunteering
27% of BT people
volunteering
94m raised for

good causes
38
34
8.5 out of 10
38
Helping 10m people overcome social disadvantage through the

benefits our products and services can bring
n/a new target
2.6m people reached
38
Creating
a culture
of tech
literacy
Help 5m children to receive better teaching in computer skills
n/a new target
344,000 children
reached
Delivering
environmental
benefits
Enable customers to reduce their carbon emissions by at least

three times the end-to-end carbon impact of our business
1.5:1 achieved
1.6:1 achieved
33
44
Our foundation measures

Our
investment
Our
customers
Our foundations
Investment to accelerate our purposeful business approach;

to be more than 1% of adjusted profit before tax (PBT)
1.15% of PBT
invested
Customer service: to consistently improve RFT across our entire

customer base
Our
employees
4.7% improvement
1.10% of PBT
invested
38
3.0% reduction
(see page 22)
22
Employee engagement index: our relationship with our

employees
3.82/5 achieved
3.81/5 achieved
Sickness absence rate: % of calendar days lost to sickness
2.23% calendar days

lost to sickness
2.33% calendar days

lost to sickness
Ethical performance: our employees awareness and training
4.33/5 achieved
4.31/5 achieved
Our suppliers
Ethical Trading: across our supply chain, with focus on Human

Rights. Achieve 100% follow-up within three months, for all
suppliers identified as high or medium risk, through our ethical
standards questionnaire
96% follow-up
within three months
100% follow-up
within three months
Our
environmental
impact
CO2e emissions: a measure of our climate change impact. Well reduce

our worldwide CO2e emission intensity by 80% by December 2020
79% reduction in net

CO2e emission intensity
vs. base levels
(1996/97)
81% reduction in net

CO2e emission intensity
vs. base levels
(1996/97)
Conserving natural resourcesa,b
45
More than 9/10 people in the UK will have access to our fibre-based 7.5 out of 10
products and services
Target met
a
b
Our 2020 ambitions
1.10% of PBT
Creating a
connected
society
Reducing water usage

2012
Managing waste products
More than 9/10 people in the UK will have access to our fibre-based 7.5 out of 10
products and services
Our
535
414
We try to minimise the amount of materials we use in our

operations, and re-use them where we can. Otherwise our
specialist contractors recycle them wherever possible, or manage
their disposal including hazardous materials such as oil and some
types of light bulbs and batteries in line with legislation.
Our 2020 ambitions
Inspire 66% (two-thirds) of our people to volunteer
2,616
2,200
2,100
The first table below demonstrates our performance against our six 2020 ambitions. Below that, we report progress against seven
foundation measures. Next year, we aim to maintain or improve on each of our ambitions and measures. To aid comparison against
previous years, we exclude EEs contribution to the group this year, but well provide new baseline numbers in our 2016/17 Annual
Report.
Supporting
charities and
communities
2,526
2,500
2,400
2,300
2,412
2,700
2,600
Supporting
charities and
communities
117
Our climate stabilisation intensity (CSI) target: by 2020, well

reduce our operational worldwide carbon emissions per unit of
value-added (our contribution to GDP) by 80% compared to
1996/97. This year, we achieved 81%, exceeding our target.
Next year, well incorporate EE into the numbers and set a new
target.
Our scope 1 & 2 emissions this year totalled 12.5 tonnes CO2e
per m revenue, reflecting an 86% reduction since our base
year of 1996/97.
2,800
1,097
We also report two CO2e intensity measures:
BTs worldwide energy use a,b

Year ended 31 March
Governance
Our 2020 ambitions
1,628
500
250
Our performance as a sustainable

and responsible business
The first table below demonstrates our performance against our six 2020 ambitions. Below that, we report progress against seven
foundation measures. Next year, we aim to maintain or improve on each of our ambitions and measures. To aid comparison against
previous years, we exclude EEs contribution to the group this year, but well provide new baseline numbers in our 2016/17 Annual
Report.
Our 2020 ambitions
CO2e Ktonnes
1,500
2014/15
Customer savings
Our impact
Reducing our carbon footprint
We report all of the greenhouse gas (GHG) emission sources

required under UK regulationsc. The following chart shows the
10% reduction this year in our total operational worldwide
CO2 equivalent (CO2e) emissionsd:
Target failed
Ongoing
To find out more about our 2020 ambitions, our methodologies and how our
results are calculated, take a look at www.btplc.com/Purposefulbusiness
33
34
52
40
44
32
radley yeldar.

Risk presents the financial sector with an abundance
of challenges its not hard to see why so many risk
sections in this area are long and detailed. Neither
is it hard to find financial companies that are happy
to provide risk content that is cumbersome at best
and impenetrable at worst. A well-written, cohesive
summary is one way to cut through the clutter
and this is where LBG scored well this year. The
banking group gives a clear overview of the principal
risks alongside risk indicators and a transparent
explanation of how risk relates to strategy.
BECOMING
THE BEST
BANK FOR
CUSTOMERS
Annual Report and Accounts
2015
Theres also an excellent forward-looking focus to

the report, while the helping Britain prosper plan
tells a strong sustainability story that is material
tothe business.
Clear view of Board

focus and activity
Governance
Annual Report and Accounts 2015
Corporate governance report continued
LEADERSHIP continued
The Board in action
FINANCIAL
STRATEGY AND CUSTOMER FOCUS
REGULATORY
Budget for 2015 and Group

operating plan
Draft results and presentation
to analysts
Approval of dividends
Approval of large transactions
Disposal of TSB Bank
Review of progress in implementing

the Groups 2015-17 strategy
Continuing development and
monitoring of key metrics of
customer dashboard
Conduct, culture and values
IT resilience and digital
transformation
Ring-fencing and resolution

SM&CR updates
Banking Standards Board updates
Regulatory changes
Non-Executive Directors office
SHAREHOLDERS
RISK MANAGEMENT
Investor Relations updates

AGM briefing
Dividend reinvestment
programme
Proposed public offering
of shares in the Company
by HM Treasury
Approval of Group risk appetite

and Risk Management Framework
Review of internal control systems
Investigations into PPI and
LIBOR issues
Investigations into packaged
bank account complaints
Review and approval of PRA
stress testing results
CMA investigation into
retail banking
Chairmans office
The Chairman maintains an office with support to help manage
his programme of activities, obtain briefings and deal with
external contacts.
Chairmans activities
BOARD MEETINGS AND ACTIVITY IN 2015
Jan
Feb
BD
Mar
Apr
2014
full year
results and
dividend
Board meeting
Board meeting and deep dive
7.0
Deep dive
May
Q1 results
AGM
B
BD
D
The deep dive sessions, strategy offsite meeting and site

visit to Bristol are described on page 65.
64
9.0
7.0
BD
Jun
Strategy
offsite
meeting
Jul
Aug
Half year
results
and
dividend
Sept
BD
Oct
Nov
BD
Dec
Site visit to Bristol

In November 2015, the Board held an offsite meeting in
Bristol, attended by GEC members, at which it reviewed
theGroup operating plan in detail. The November
Committee meetings also took place at the Groups Bristol
offices. During the visit, Board and GEC members took the
opportunity to meet colleagues based in Bristol and the
South West over dinner and at an informal breakfast hosted
by the Chairman and Non-Executive Directors. Some Board
members also visited the Bristol City Centre branch to meet
the local director and branch based colleagues.
Chairmans Town Hall sessions

In October 2015, as part of his engagement programme,
theChairman visited two of the Groups ITsites near
Manchester, where he was joined by 275colleagues.
The Chairman spoke to colleagues on the progress the
Group is making with the next stage of its strategy to
become the best bank for customers, how it had
strengthened its balance sheet, and the importance of
continuing to restore the trust and confidence of customers
and other key stakeholders. The visit included a question
and answer session, where colleagues asked questions
on such topics as how the Group is remediating risk, the
impact of new challenger banks and emerging new
technologies on the landscape.
Board oversight: IT resilience and digital transformation

The Board remains focused on how the Group delivers solutions that continue to put the customer at the heart of everything it does.
The Groups multi-channel service reflects customers changing preferences in how they choose to do business with the Group,
providing seamless access through a secure and resilient digital infrastructure.
Q3 results
Board site
visit to
Bristol and
Group
operating
plan
The Board spends considerable time reviewing the delivery of the three-year IT resilience investment and digital transformation
programmes. IT resilience and cyber security are regularly monitored through the risk dashboard in the reports from the Group Chief
Executive and Group Risk Officer and through the work of the Board Risk Committee of which all Non-Executive Directors are
members. Additionally, the Board received a detailed progress update at its strategy offsite meeting in November and presentations
from senior management on the delivery of the programmes at deep dive sessions held during the year.
Other information
KEY
BD
Culture and colleague engagement

Group strategy implementation
Retail strategy
The agenda was structured to allow plenty of opportunity
for discussion and concluded with a group discussion on
strategy, culture and rebuilding trust.
The Chairman undertakes an extensive engagement

programme each year representing the Group at industry
events, acting as a spokesperson for the Group and meeting
with clients, regulators, investors, the media, our Foundations
and their beneficiaries. The programme includes visits to
regional offices, branches, IT and operations centres, where
the Chairman meets local management and colleagues
through meetings, floor walks, team talks and Town Hall
sessions. The Town Hall sessions are an opportunity for
colleagues to hear from the Chairman on the Groups
performance and strategic direction, and importantly,
to ask questions. These events are very popular and are
always well attended.
Strategy offsite
During the year the Board spent two days offsite
focusing on:
Risk management
GOVERNANCE
Board effectiveness and

Chairmans performance reviews
Board and Committee structure,
size and composition
Responsible Business review and
creation of the Responsible Business
Committee
Review of Corporate Governance
Framework
Company Secretarys Corporate
Governance Review
Customer experience
Group Digital (two updates)
IT transformation update and outlook
Group Operations, including IT strategy
Retail performance and products
Commercial Banking
The changing UK payments landscape
Governance
The Non-Executive Directors frequently visit the Groups

offices on Group business and to meet with senior
management outside of Board and Committee meetings.
Tosupport the Non-Executive Directors in fulfilling their role,
the Group provides an office, with administrative support,
and a meeting room for the Non-Executive Directors use.
Deep dives
During the year the Board held eight deep dives which
provided the opportunity for presentations from senior
management and an in-depth review of key areas of
focus including:
Financial results
The Board meets annually prior to the AGM in Scotland

followed by a joint discussion with the Board of Scottish
Widows Group Limited allowing in-depth focus on
insurance matters.
Group performance report from the Group Chief Executive

Report on financial performance, including budgets, forecasts
and capital position from the Chief Financial Officer
Risk report from the Chief Risk Officer
Chairmans activities report
Reports from Committee Chairmen
BD
The Non-Executive Directors also receive regular updates

from the Group Chief Executives office including a weekly
email which gives context to current issues. In-depth and
background materials are regularly provided via a reading
room on the Board portal.
In addition to the annual schedule of Board and Committee
meetings, the Board held eight deep dives, a two-day
strategy offsite meeting and a strategy meeting at the Groups
Bristol site reviewing the operating plan. Further details are
given opposite.
REGULAR AGENDA ITEMS
7.0
The Non-Executive Directors see attendance at Board and

Committee meetings as only one part of their role. TheNonExecutive Directors regularly meet with senior management
and spend time increasing their understanding of the business
through formal briefing sessions or more informal events such
as breakfast briefings, dinners and sitevisits.
Strategic report
BOARD FOCUS IN 2015
Also, the Boards approach to succession planning, led by the Chairman, helps ensure the Board is well placed to address future
technology and market risks across the full range of business areas in which the Group operates. Read more on succession planning
and Board appointments on page 73.
Information on the progress being made on the delivery of digital capability can be found in the strategic report and on IT resilience
and cyber security in the report from the Board Risk Committee.
65
HDISU?
Explaining our wider

economic contribution
t to
et
We contribute to the UK economy through our products and

services, and through our commitments in our Helping Britain
Prosper Plan. We also make a positive economic impact as a
major employer and purchaser.
Tackling money laundering

and terrorist financing
We take steps to make sure our products are not used for criminal
purposes, such as money laundering and terrorist financing,
working closely with legislators and regulators to combat this. We
complete appropriate and proportionate customer due diligence
throughout the duration of the customer relationship, and we
monitor unusual activity on all customer accounts and use
advanced technology to detect potential criminal activity. If we
spot anything suspicious we take immediate and appropriate
action. In 2015 we made further revisions to our Anti-Money
Laundering and Counter Terrorist Policy and launched specialist
training across the Group to help colleagues understand what is
required from them.
Reporting concerns
We employ more than 75,000 colleagues. We offer them all

competitive rewards and benefits, including incentivisation
schemes based on customer outcomes. We are helping to
create additional jobs and bring talented people into our
business through our Apprenticeship Scheme. This year we
created over 1,000 new apprenticeship roles, bringing the total
to over 3,200 since we launched the scheme in October 2012.
We have committed, as part of our Helping Britain Prosper
Plan, to create 8,000 new apprenticeships by2020.
Supporting UK trade and manufacturing

Providing support to UK businesses so that they can export
and attract international investment is essential to long term
economic growth. In 2015, Lloyds Bank Commercial Banking
became the first UK bank to enter into a strategic partnership
with UK Trade and Investment to support UK businesses to
export and to attract inward investment into the UK.
We are committed to supporting the manufacturing sector
in the UK. In 2015, we announced a 5million investment over
fiveyears to support over 500 skilled apprentices at the Lloyds
Bank Advanced Manufacturing Training Centre in Coventry.
This will help address the skills gap in the sector and help
improve productivity and innovation in the sector.
1.4bn
of new funding support

provided to UK manufacturing
companies in 2015
Download more information about our Codes and

Policies at www.lloydsbankinggroup.com/RBDownloads
Explaining our wider

economic contribution
We contribute to the UK economy through our products and
services, and through our commitments in our Helping Britain
Prosper Plan. We also make a positive economic impact as a
major employer and purchaser.
We support our business customers through our extensive

network of customer facing staff. More than half a million
business and commercial clients now bank digitally with us.
Wework with the Tinder Foundation and other partners such
as the Government to improve digital skills for individuals,
small businesses and charities.
Widening financial inclusion

Responsible lending
We understand the need to lend responsibly, in line with
ourown low-risk business model and customers ability to
meet their repayments. The support we offer all customers
and the credit worthiness processes we use, reflect our
responsible approach.
Serving vulnerable
customers
Opening a basic bank account can be the first step towards

financial inclusion for many customers. In 2015, we provided
over 300,000 new basic bank accounts and also helped 55,000
customers upgrade from basic to more mainstream products.
Ensuring our products and

services are accessible and
suitable to the individual needs
of all our customers is at the
heart of everything we do;
consistently offering the best
experience for all of our
customers, providing products
and services when our
customers need our support.
This includes improving our
processes when customers are
bereaved and reviewing our
websites and mobile banking
services to ensure they are
accessible to all our disabled
customers.
Digital technology offers an important opportunity to make

financial services more accessible. Today, almost 6 million
adults in the UK have never used the internet and over
50percent of charities and more than 1 million small and
medium-sized businesses lack basic digital skills. Increasing
digital capability is one of the most important factors that will
drive financial inclusion over the coming years, so we aim to use
our expertise and reach to promote wider understanding and
access, as shown in our Lloyds Bank Consumer Digital Index.
Financial support and education
Help for homebuyers

Buying a property is the biggest financial commitment many
people ever make. We want to help more people get onto
andmove up the housing ladder. We made a public target
to provide 1 in 4 of all new first-time buyers mortgage loans
completed in the UK in 2015, and we have fulfilled that
commitment. Across all our customer brands, ourgross new
mortgage lending totalled 39 billion in 2015, and our support
for home-buyers represented over 60 per cent of thislending.
We are a leading supporter of the UK governments
Help to Buy scheme. We have advanced 3.5 billion of new
lending to customers under the mortgage guarantee element
of the scheme, since it was launched in the second half of 2013
up to the end of 2015.
11bn
We want to do more to help customers who are financially

excluded or at risk of becoming so. Our financial inclusion
strategy, launched in 2014, focuses on four strategic themes:
providing accessible products and services that meet
customers needs; improving awareness and understanding
ofthe impacts of financial exclusion across the bank; working
in partnership with and signposting to other organisations
thatmight be better suited to meet customer needs; and
continuing to invest in financial education.
of new mortgage lending

to more than 79,000
first-time buyers in 2015
24
The credit union sector provides an essential service to many

people across Britain. We believe that it can become an even
more powerful choice for consumers to turn to, which is why
weve been working in partnership with the Association of
British Credit Unions Limited and the Credit Union Foundation,
to provide a 4 million fund over four years which is invested in
the core funding of credit unions to help them become more
sustainable. In 2015, 69credit unions applied for awards and
21secured a large grant or seed funding.
We can help our current and future customers to avoid
financial difficulties by providing them with a better
understanding of money matters. We have invested 10 million
in our Money for Life programme for young people since it
launched in 2009. We are reviewing this programme in 2016
following the launch of the UK Financial Capability Strategy
published by the Money Advice Service and our own
experience of delivering community based financial education.
We are considering additional ways to support customers and
colleagues with money management.
1m
Creating new jobs

We employ more than 75,000 colleagues. We offer them all
competitive rewards and benefits, including incentivisation
schemes based on customer outcomes. We are helping to
create additional jobs and bring talented people into our
business through our Apprenticeship Scheme. This year we
created over 1,000 new apprenticeship roles, bringing the total
to over 3,200 since we launched the scheme in October 2012.
We have committed, as part of our Helping Britain Prosper
Plan, to create 8,000 new apprenticeships by2020.
Supporting UK trade and manufacturing

Providing support to UK businesses so that they can export
and attract international investment is essential to long term
economic growth. In 2015, Lloyds Bank Commercial Banking
became the first UK bank to enter into a strategic partnership
with UK Trade and Investment to support UK businesses to
export and to attract inward investment into the UK.
We are committed to supporting the manufacturing sector
in the UK. In 2015, we announced a 5million investment over
fiveyears to support over 500 skilled apprentices at the Lloyds
Bank Advanced Manufacturing Training Centre in Coventry.
This will help address the skills gap in the sector and help
improve productivity and innovation in the sector.
1.4bn
of new funding support

provided to UK manufacturing
companies in 2015
Purchasing goods and services

We are working together with our suppliers and others in our
supply chain to ensure we source goods and services in ways
that are responsible, sustainable and mutually beneficial.
Theymust also provide best value for our customers and
shareholders. In 2015, we spent around 5.8 billion on a
diverse range of goods and services, with over 4,000 different
suppliers. We continue to honour our commitment to pay our
suppliers on time and are signatories to the Prompt Payment
Code. In our Helping Britain Prosper Plan, we set a 2015 target
to pay 96 per cent of our supplier invoices within 30days and
we exceeded this target.
Other information
Our whistleblowing policy, known as Speak Up, explains

howcolleagues can raise concerns confidentially without fear
ofreprisal. During 2015, 153 allegations received through
ourSpeak Up line were investigated. Of the investigations
concluded at year end, 63 per cent were upheld with
appropriate remedial action taken where necessary. The
majority of Speak Up allegations come from our Retail and
Group Operations divisions, which given the scale of these
business areas remains proportionate. We continue to educate
and empower colleagues to do the right thing for ourcustomers
by challenging wrong behaviours if they witnessthem.
As part of our Helping Britain Prosper Plan we have a target to

increase the amount of net lending to SMEs and Mid Market
companies by 53 billion by 2017. We met our 2015 Prosper
Plan target to increase net lending to these segments by at
least 2 billion.
tion,
credit and debit card transactions

monitored for potential fraud
every month
Our year-on-year net growth in lending to SMEs increased by

5per cent in 2015. Our lending to SMEs has grown 25 per cent
net since 2011, while it declined 13 per cent across the industry
as a whole during the same period.
Risk management
ny
en
y
26m
Help for businesses
Governance
We closed down more than 2,353 fraudulent websites in 2015

and we are a strategic partner of Get Safe Online, a joint
initiative between the government, the National Crime
Agency, and public and private sector supporters from
the technology, communication, retail and finance sectors.
We monitor unusual activity on customer accounts and use
state-of-the-art technology to detect potential criminal
activity. If we spot anything suspicious we take immediate
andappropriate action.
additional funding provided to

support credit unions in 2015
Read more about our Helping Britain Prosper Plan

at www.lloydsbankinggroup.com/ProsperPlan
Read more about our business model and wider value

creation on page 18.
18
25
Discussion on responsible business

and economic contribution
Risk management
ill
use
nd
x.
We serve an increasingly diverse customer base of individuals and

businesses. To deliver sustainable growth we need to serve them
all equally well.
Financial results
Making our products

and services clearer
Protecting customers privacy and data

Our customers, including 11.5 million who actively bank
digitally, of which 6.6 million who use their mobile to bank with
us, trust us with their money and personal details. To protect
these assets, we consistently invest in security technologies,
processes and training for colleagues. Since 2011 we have
invested 157million to improve security and provide
protection for our customers. We also provide our customers
with useful information about how they can improve their own
money and data security behaviour.
Creating new jobs
Strategic report
As a responsible business we must ensure that the way that we

market our brands, products and services is fair, accurate, not
misleading and ultimately easy for consumers to understand.
The Group complies with voluntary and mandatory advertising
and marketing standards. We are working to better understand
customer behaviour and have used behavioural economic
techniques to assess their preferences and improve our marketing
materials as a result. This has made them more concise and clear.
For example, weve simplified a savings maturity letter by
introducing summary boxes and bullet points to highlight key
information. This simple change has contributed to a reduction in
complaints about the product maturity process by 80 per cent.
Governance
s
d
000
cts.
Operating responsibly continued
Financial results
g
ng
Strategic report
Responsible marketing and communications
ch
s:
Strategic report
by
ent
stry
33
34
radley yeldar.
How effectively is
thestoryexplained?
What we measure
Message
Linkage and flow
Materiality and transparency
Navigation and appeal
Clarity of language
The primary job of an annual report is to tell the story of
the year, in the context of market factors, strategy and risk,
and provide an opinion on the future. The story should be
compelling, integrated and easy to read. It should include
clear signposts to additional, deeper content. And it should
be a seamless and transparent exposition, containing a
balance of negative and positive events. Few companies
cansay with any honesty that any year has been a total
triumph. Investors understand that and the occasional
admission that you got it wrong or that things didnt pan
out quite as youd hoped will go a long way to convincing
readers that the business has everything under control.
A good report will communicate the companys key
messages via a mix of narrative styles, such as case
studies. It will also provide topical information on the
yearsachievements, with the various sections linking
together to provide a coherent story with a single voice.
Thedesign should carry this story, using creativity to
highlight the key information and make the report an
effortless and engagingread.
What we have seen

A story well told is the difference between a seamless,
coherent report and one that is made up of a number
of seemingly disconnected events and disclosures. The
notionof storytelling may be relatively well-established
among communicators, but it still causes confusion for
some reporters. Lets be clear here storytelling is not about
using unbelievable fairy tales to pacify hyperactive children
at bedtime. The task of the report is the very opposite of
sendingpeople to sleep its to keep them awake. As the
FRCs guidance is at pains to point out, its the process of
disclosing the key facts of the year in an imaginative way
thatwill promote understanding.
Messaging is the lowest scoring of all our criteria and
anarea where many FTSE 100 companies are falling
well short. It seems that many are shy of producing a
report thattells anything approaching a story. Surely,
anycompanysufficiently successful to be a constituent
of the index has by definition identified a credible market
opportunity and shaped itself to seize that opportunity.
On the plus side, we have seen big improvements in linkage
and flow. The key is to link the sections together, so that
purpose, vision, market environment, business model, risk,
strategy, performance and governance come together to
tellthe story of the year. Theres also been a step forwards
innarrative balance this year, with several companies taking
the opportunity to explain the disappointments of the year
as well as highlight the achievements.
In terms of language, many reporters are upping their
effortsto avoid jargon and to keep the content easy to
read and varied in format. But more still needs to be done
here the best design in the world wont compensate for
impenetrable copy. Companies need to focus on energising
and inspiring investors, not dulling senses with insipid
headlines and convoluted sub-clauses.
HDISU?
35
Three of the best

British Land
Paddy Power Betfair
5.08
Aviva
5.0
3.56
6
4.2
3
4.3
36
radley yeldar.
How effectively is the story explained?
British Land
This report takes the companys strategic vision
of creating places people prefer and uses it as
the maintheme to anchor the narrative. This key
message is brought to life in both the strategy
content and in case studies that tell great stories
withstyle and conviction. Strategic objectives
are well linked to KPIs, demonstrating the years
performance as well as to remuneration where
British Land explains how executive pay is tied
tothestrategy.
We create
Places People Prefer
The language throughout is easy to understand,

with an engaging narrative guiding the reader
through the various sections.
Strategic Report
PLACEMAKING CONTINUED
560m
shopper visits to Meadowhall

over 25 years
Reviving historic links

in new developments
Places which connect physically and digitally

with the people who use them, including
local communities.
At Aldgate Place, designed by Allies and

Morrison, we are reinstating an original
pedestrian street link which sits above an old
Victorian service tunnel connecting Aldgate and
Aldgate East stations. This public thoroughfare
will be reinvigorated with shops and cafs,
bringing a new sense of community to the area.
Engaging with local communities
Connecting is about providing assets which

complement peoples lifestyles, enabling them
to integrate their work and their leisure time.
It means places which are easy to access,
so we focus on assets with great transport
infrastructure and those with convenient
access points or parking facilities. We often
invest to improve connections for pedestrians
and cyclists, and we build local relationships
connecting with local communities to better
understand their needs. We also think about
how digitally enabled we are and how we
can use these capabilities to create a
closer community.
Our fourth annual Community Day brought

together 200 British Land volunteers as well as
520 local jobseekers, schoolchildren, students,
elderly residents and people with learning
disabilities across 20 community partnerships.
Our partners commented on the commitment
of those involved, reflecting how the event helps
us strengthen local relationships around our
London assets. For our volunteers it is a great
team building opportunity which enables them
to interact with people of different ages and
backgrounds as well as learning new skills.
4.3bn
of our assets are within close proximity

of a Crossrail station (opening 2018)
Building our exposure to Crossrail
7.0
6.0
When Crossrail opens in 2018, it will transform

rail transport in London and the South East,
increasing central London rail capacity by 10%,
and bringing an estimated 1.5 million more people
to within 45 minutes of central London. Already,
Crossrail is driving regeneration and economic
development. Around 4 billion ofour assets
are located near Crossrail and two of our
London campuses, Broadgate and Paddington,
will have their own Crossrail stations. Canada
Water, our 46-acre scheme in South London,
is very close to Canary Wharf and, from 2018,
will be just minutes from the West End.
28
6.
0
British Land Annual Report and Accounts 2016
Masterplanning a
destination for London
We have shared our initial ideas for the Canada

Water Masterplan with the local community.
These include a 3.5 acre park, two new public
squares, cycling and pedestrian friendly spaces
and dockside improvements so people can enjoy
and interact with the water and wildlife. We are
also proposing a pedestrianised, open-air high
street, with national and independent retailers
alongside new restaurants and cafs and a new
culture and entertainment hub, at the heart of
the town centre. Our plans are at an early stage
and will evolve, but creating a vibrant and
engaging environment will be our key focus.
Celebrating local heritage
Elk Mill in Oldham is one of several assets

where we are using public art to celebrate local
heritage and connect with local communities.
Professional sculptor Emma Hunter worked
with local people to create artworks illustrating
Elk Mills cotton-spinning heritage and poems
inspired by local peoples stories feature on a
trio of sculptures in the style of spinning cotton
bobbins. Bronze footprints are set into paving
stones around the Park, recalling a time when
mill workers went barefoot to avoid slipping
on the oily floor.
To read more case studies go to
www.britishland.com/placemaking
29
7.0
7.0
HDISU?
37
Strategic Report
PLACEMAKING
Placemaking is how we create attractive

and engaging real estate which is in tune with
modern lifestyles and are Places People Prefer.
Actively managing our assets is a core part of
our business. We put our customers first, and
invest in the skills and resources which help us
understand them better. This understanding
guides our investment activities, from investing
and developing the right assets, to enhancing
and enlivening them with a range of amenities,
events and activities. This creates preference
for our properties, helping to drive occupier
demand, growth in rents and capital values.
Visual treatment
combined with
engaging copy in
thepage titles gives
the document pace
Strategic Report
26
MARKET OVERVIEW
27
Mixed use development
experience
More than
What sets
us apart?
64,000
people work across our office portfolio
Large scale projects, combining

offices, retail, residential and
leisure set amidst attractive
public spaces. Typically, these
developments involve close
collaboration with local planning
authorities, communities and
partners, as well as active
day-to-day management.
Placemaking skills
Our approach to doing business puts

the customer at the heart of what we do.
This underpins our ability to deliver
Places People Prefer.
Customer insight
Improving our assets to create a better

overall experience for our customers
and local communities. Places which
are easy to visit, vibrant, pleasant and
engaging and with high quality on site
services; places where people want
to work, shop, live and visit.
Ability to source and

execute complex deals
We have the expertise and

financial flexibility required to
execute complex deals delivering
highly attractive returns for
our shareholders.
Our investment in data collection

and analytics brings us closer
to our customers, guiding our
investments and helping us to
create places that meet their
expectations and lifestyles.
Sustainability
credentials
High quality ofce

campuses
Office-led environments focused

around key transport infrastructure
with a growing retail and leisure offer
enabling people to combine work and
play. The diversity of our offering
provides opportunities and amenities
for local communities, helping to
energise the broader campus.
Lifestyle focused retail

environments
Regional and local multi-let

retail assets in tune with modern
consumer lifestyles, where people
go to shop, eat and be entertained.
12
330m
annual footfall at
our retail assets
Strong network
of relationships
Our networks span occupiers,

planners, local authorities,
community leaders, strategic
partners and investors, reflecting
our many years as leading
developers and landlords
across the UK.
We have been sustainability

leaders for a long time and
have successfully integrated
sustainability into our placemaking
approach, innovating to improve
peoples wellbeing, supporting
local communities, designing for
the future and developing skills
and opportunities at our places.
For more information on sustainability
www.britishland.com/sustainability
29,500
People benefited directly from our

community programme this year,
including apprentices, jobseekers
and schoolchildren
13
38
radley yeldar.
Paddy Power Betfair

Its rare to come across a report that so accurately
reflects the tone of voice adopted by the brand
in itsmore public communications. The Paddy
Power team has stuck to its guns, even after the
merger with Betfair, to provide a consistent brand
experiencefor all its stakeholders.
This year, the company elected to use the style
of a teenage diary, complete with doodles, song
lyrics and hashtags. Were not suggesting that this
approach would work for every company far
from it, in fact. But the sense of fun conveyed
in the report works well with the brand and
certainly differentiates the report from its peers.
The messages are crystal clear investors know
whattheyre getting with Paddy Power Betfair.
Includes the 2015 Paddy Power Betfair plc

Annual Report
July 2015
Dear
Dear diary,
diary,
II dont
dont like
like cricket,
cricket,
II love
love it,
it,
Oh
Oh yeah,
yeah,
At
At least
least we
we do
do when
when the
the Ashes
Ashes isis on.
on.
Id
Id be
be lying
lying ifif II wrote
wrote that
that II was
was the
the worlds
worlds biggest
biggest cricket
cricket fan.
fan. On
On the
the plus
plus side,
side, what
what other
other
event
event allows
allows you
you the
the luxury
luxury of
of sitting
sitting inin aa field
field inin the
the sunshine,
sunshine, drinking
drinking beer
beer all
all day
day but
but also
also
not
not have
have people
people thinking
thinking youre
youre aa urine-soaked
urine-soaked hobo?
hobo?
InIn the
the build-up
build-up to
to the
the 2015
2015 hostilities
hostilities between
between England
England and
and Australia,
Australia, the
the major
major
talking
talking point
point revolved
revolved around
around the
the absence
absence of
of Englands
Englands favourite
favourite South
South African,
African,
Kevin
Kevin Pietersen.
Pietersen. As
As the
the big
big day
day rolled
rolled around,
around, rather
rather than
than representing
representing the
the Three
Three
Lions,
Lions, KP
KP was
was busy
busy sunbathing
sunbathing inin the
the Caribbean,
Caribbean, stopping
stopping occasionally
occasionally to
to smash
smash
cricket
cricket balls
balls into
into the
the stands
stands and
and collect
collect massive
massive paycheques.
paycheques.
The
The phonecall
phonecall never
never came
came and
and spotting
spotting an
an opportunity,
opportunity, II swooped
swooped and
and signed
signed Pietersen
Pietersen up
up to
to air
air
some
some of
of his
his famously
famously outspoken
outspoken views
views for
for Paddy
Paddy Power.
Power. We
We made
made an
an amusing
amusing video
video of
of him
him riding
riding
inin on
on aa white
white horse
horse to
to save
save Englands
Englands Ashes
Ashes bid.
bid. ItIt was
was meant
meant to
to be
be aa clever
clever metaphor
metaphor for
for how
how
he
he was
was going
going to
to drive
drive the
the hosts
hosts on
on to
to aa stirring
stirring against
against the
the odds
odds victory,
victory, but
but itit just
just turned
turned
out
out to
to be
be him
him riding
riding aa white
white horse
horse because
because England
England got
got on
on just
just fine
fine without
without him.
him.
The
The Aussies
Aussies displayed
displayed their
their customary
customary mouthiness,
mouthiness, but
but the
the hosts
hosts wrapped
wrapped up
up the
the series
series
win
win and
and that
that funny
funny little
little urn
urn with
with aa Test
Test match
match to
to spare,
spare, courtesy
courtesy of
of aa ferocious
ferocious
bowling
bowling display
display from
from Stuart
Stuart Broad
Broad who
who saw
saw the
the Aussies
Aussies collapse
collapse to
to 60
60 all
all out
out
comfortably
comfortably the
the most
most embarrassing
embarrassing Aussie
Aussie performance
performance since
since Nicole
Nicole Kidman
Kidman inin BMX
BMX
Bandits.
Bandits.
Although
Although his
his ego
ego may
may have
have been
been aa little
little bit
bit bruised
bruised by
by how
how easily
easily his
his former
former
team-mates
team-mates claimed
claimed victory,
victory, KP
KP spoke
spoke to
to me
me via
via the
the Paddy
Paddy Power
Power Blog,
Blog, providing
providing
Paddy
Paddy Power
Power with
with some
some fascinating
fascinating insight
insight that
that was
was always
always interesting
interesting and
and only
only
sometimes
sometimes self-aggrandising.
self-aggrandising. Either
Either way,
way, itit made
made its
its way
way into
into the
the newspapers
newspapers and
and
sports
sports sections
sections of
of websites,
websites, Kevin
Kevin got
got paid
paid and
and England
England won
won the
the Ashes.
Ashes. Everyone
Everyone
won.
won. Except
Except of
of course
course the
the Aussies.
Aussies.
ket
e cric
t lik
I don
e it
I lov
5.0
3.0
Yours
Yours gloriously,
gloriously,
Paddy
8.0
9.0
8.0
HDISU?
39
The diary entries give

an engaging snapshot
of progress made in
the year
January/February 2015
Dear diary,
Obviously Im an incredible person, but part of being incredible is acknowledging that
sometimes things dont go to plan. True perfection has to be imperfect. Someone clever
said that. Einstein. Or Noel Gallagher. Thats how I sum up my attempts to get David
Ginola elected as FIFA President.
Ill be the first to admit it didnt go so well. In January - long before the FBI raids,
multiple arrests and shocking news that FIFA actually has an ethics committee - I tried
to do something about it to run a genuine football man to stand against the regime to
win back the beautiful game.
#missing
balls
FBI
So, I teamed up with reform group Change FIFA to back a shock bid from footballing
legend David Ginola. Together, we launched Team Ginola, with a manifesto based on
Transparency, Integrity and Equality - and specific, radical policies for each.
In February I was Down Under for the start of the Cricket World Cup, just in time for
Australian self-confidence to reach Kanye West levels and the arrival of England, aka the Poms.
In conjunction with their New Zealand neighbours, the Aussies were hosting the tournament and
they kicked off their bid for glory with a blockbusting game against their oldest, fiercest and
probably moaniest cricketing enemies. That was the perfect opportunity to kick the hornets
nest. Kick it, then slog that hornets nest over mid-wicket for six.
And its fair to say the whole project was a resounding success. Well, success if the goal
of the exercise was to get the sports media to hate us and get the typical football
supporter to respond to us with indifference. What was it about the exceedingly handsome,
highly toned, wealthy, Frenchman with fantastic hair that failed to resonate with your
average football fan? Hmmm I may never truly know.
F**K
!
JUST
READY
L
A
OFF
Board of Directors
Playing upon the classic cricketing stereotypes of the Baggy Greens brashness and the classic
perception of the English players being a bit vanilla and lacking bottle in high-pressure
situations, I brilliantly came up with the Missing Balls campaign. I went around Melbourne putting
up posters which said MISSING: Pair of balls. If found please return to the English cricket
team #missingballs. Because the posters werent accompanied by Sportsbet branding, there was
no trouble getting social media thumbs and actual media tongues wagging about who was
responsible. The ninja style stealth of the campaign sucked in people from all walks of life. Even
my Australian competitors at Ladbrokes failed to guess who might have been behind the
mischief, tweeting it on their own Twitter account.
Executive directors
If that chatter wasnt enough, the highlight

cameCorcoran
when I hired
a helicopter
and flew
a giant
Breon
(aged
44) became
Chief
Executive Officer in February 2016. Breon
banner of the poster above the ground while
England
trained
ahead
match
and then Officer on 1 August 2012. Prior to this,
joined
Betfair
Group
plcofasthe
Chief
Executive
displayed the poster on digital billboards along the route the England team bus took en route to
Breon was the former Chief Operating Officer at Paddy Power plc and previously
the ground on matchday. LOLZ.
was Managing Director Non Retail and Development. He joined Paddy Power plc
in 2001
having
previously
worked
with J.P.theMorgan
The whole campaign went down extremely well
somewhat
helped
by the visitors
producing
most and Bankers Trust. Breon has
an MBAsoil
(INSEAD)
and
is a rubbed
graduate
of Trinity
Dublin. Breon is also a nonunderwhelming English performance on Australian
since Lily
Allen
shoulders
with College,
Dr.
Karl Robinson. They were hammered by 111executive
runs and adirector
couple ofofweeks
later
found Group.
Tilney
Bestinvest
themselves checking in for a return flight home at the same time as such
cricketing giants as Afghanistan and Scotland.
Andy McCue (aged 41) became Chief Operating Officer in February 2016. He
Yours Pom-bashingly,
Paddy
joined Paddy Power 10 years ago having served as Chief Executive Officer of
Paddy Power plc from January 2015 to February 2016, having previously led
the combined retail estates and the telephone business. Prior to joining Paddy
Power, he was a Principal with OC&C Strategy Consultants and a Manager at
Andersen. Andy holds a MA (Hons) Economics from Cambridge University and a
Masters in Finance from London Business School. He is a non-executive director of
Hostelworld Group plc.
Alex Gersh (aged 52) became Chief Financial Officer in February 2016. Alex was
appointed as Betfair Group plcs Chief Financial Officer in December 2012. Alex has
extensive experience of working in highly competitive, international businesses.
Previously, Alex was Chief Financial Officer of NDS Group, a leading supplier of
technology solutions for digital pay-TV, Chief Financial Officer of Flag Telecom, a
global network services provider, and Chief Financial Officer of BT Cellnet. His early
career was spent with Ernst & Young. He is a qualified Certified Public Accountant.
gary
rulz!
Board of Directors
Executive directors
Michael Cawley (aged 61) was appointed as a non-executive director and as a

member of the Audit Committee in July 2013. He was appointed Chairman of the
Audit Committee in July 2014. Michael served as Deputy Chief Executive Officer
and Chief Operating Officer of Ryanair from 2003 to 2014, having previously
served as Ryanairs Chief Financial Officer and Commercial Director since 1997.
During his time at Ryanair, the airline experienced huge international growth with
profit after tax rising from c. 20 million in 1996 to c. 550 million in 2013. Prior to
joining Ryanair, Michael was Group Finance Director of Gowan Group Limited, one
of Irelands largest private companies and the main distributor for Peugeot and
Citroen automobiles in Ireland. He was appointed as a non-executive director of
Hostelworld Group plc in October 2015. Michael holds a Bachelor of Commerce
degree and is a fellow of the Institute of Chartered Accountants in Ireland. Michael
was appointed as a member of the Risk Committee in February 2016.
Breon Corcoran (aged 44) became Chief Executive Officer in February 2016. Breon
joined Betfair Group plc as Chief Executive Officer on 1 August 2012. Prior to this,
Breon was the former Chief Operating Officer at Paddy Power plc and previously
was Managing Director Non Retail and Development. He joined Paddy Power plc
in 2001 having previously worked with J.P. Morgan and Bankers Trust. Breon has
an MBA (INSEAD) and is a graduate of Trinity College, Dublin. Breon is also a nonexecutive director of Tilney Bestinvest Group.
Andy McCue (aged 41) became Chief Operating Officer in February 2016. He
joined Paddy Power 10 years ago having served as Chief Executive Officer of
Paddy Power plc from January 2015 to February 2016, having previously led
the combined retail estates and the telephone business. Prior to joining Paddy
Power, he was a Principal with OC&C Strategy Consultants and a Manager at
Andersen. Andy holds a MA (Hons) Economics from Cambridge University and a
Masters in Finance from London Business School. He is a non-executive director of
Hostelworld Group plc.
Danuta Gray (aged 57) was appointed as a non-executive director and as a

member of the Remuneration Committee in January 2013. Danuta was appointed
as a member of the Audit Committee in February 2016. Danuta brings to the
Board significant leadership experience as the former Chief Executive Officer of O2
Ireland, a position she held from 2001 to 2010. Prior to that, she was Senior Vice
President of BT Europe in Germany and, previous to that, was General Manager at
BT Mobile in the UK. She is a non-executive director of Michael Page plc and Old
Mutual plc and is the Senior Independent Director of Aldermore Bank. She is also
a non-executive member of the Defence Board of the U.K. Ministry of Defence. She
holds a B.Sc. in Biophysics, an M.Sc. and an MBA.
Alex Gersh (aged 52) became Chief Financial Officer in February 2016. Alex was
appointed as Betfair Group plcs Chief Financial Officer in December 2012. Alex has
extensive experience of working in highly competitive, international businesses.
Previously, Alex was Chief Financial Officer of NDS Group, a leading supplier of
technology solutions for digital pay-TV, Chief Financial Officer of Flag Telecom, a
global network services provider, and Chief Financial Officer of BT Cellnet. His early
career was spent with Ernst & Young. He is a qualified Certified Public Accountant.
gary
rulz!
dyson
stewy
kenny
Peter Jackson (aged 40) became a non-executive director and a member of

the Remuneration Committee and Risk Committee in February 2016. Peter was
appointed as a non-executive director of Betfair Group plc in April 2013. Prior to
this, Peter was Group Chief Executive Officer of Travelex from March 2010 to March
2015, leaving following the successful sale of the business. Before Travelex, Peter
was Managing Director of Consumer Banking for the Lloyds Banking Group, having
previously held a number of senior roles within the retail arm of HBOS plc before its
merger with Lloyds. Peter started his career at McKinsey and Co.
Stewart Kenny (aged 64) was a co-founder of Paddy Power in 1988. He has
considerable experience in the betting industry and has established two successful
bookmaking firms. He trained with Ladbrokes in London for two years before
establishing a chain of betting shops, Kenny OReilly Bookmakers. He sold that
business to Coral in 1986 and subsequently re-entered the business, opening ten
betting shops between 1986 and 1988. He was Group Chief Executive from 1988
to 2002, and Chairman from 2002 to 2003. Stewart has been a member of the Risk
Committee since June 2006 and was appointed as a member of the Nomination
Committee in July 2012.
Non-executive directors
Gary McGann (aged 65), Chairman, was appointed as a non-executive director in
November 2014 and as Chairman from July 2015. Gary was Group Chief Executive
Officer of Smurfit Kappa Group plc from 2002 until his retirement in September
2015. He joined the Smurfit Kappa Group in 1998 as Chief Financial Officer and
also served as President and Chief Operations Officer. He had held a number of
senior positions in both the private and public sectors over the previous 20 years,
including Chief Executive of Gilbeys of Ireland and Aer Lingus Group. Gary is
Chairman of Aon Ireland and Sicon Limited and a non-executive director of Smurfit
Kappa Group plc, Green Reit plc and Multi-Packaging Solutions International
Limited. He holds BA (UCD) and MSc Management (Trinity) Degrees and is a Fellow
of the Association of Chartered Certified Accountants (FCCA). Gary is a member of
the Nomination, Remuneration and Risk Committees since July 2015.
Ian Dyson (aged 53) became Senior Independent Director and a member and
Chairman of the Nomination Committee and a member of the Audit Committee in
February 2016. Ian was the Senior Independent Director and Chairman of the Audit
Committee of Betfair Group plc since 2010. He was formerly Chief Executive Officer
of Punch Taverns plc, Group Finance & Operations Director at Marks & Spencer plc
and Finance Director of The Rank Group plc. Prior to this he was Group Financial
Controller of Hilton Group plc. He joined Hilton from Le Meridien, a division of
Forte plc, where he had been Finance Director. His early career was spent with
Arthur Andersen, where he qualified as a Chartered Accountant in 1986 and
became a Partner at the firm in 1994. Ian is also currently a non-executive director
and the Chairman of the Audit Committee of InterContinental Hotels Group PLC
and SSP Group plc and Senior Independent Director of ASOS Plc and a nonexecutive director of Punch Taverns plc.
Zillah Byng-Thorne (aged 41) became a non-executive director and a member
of the Audit Committee and Nomination Committee in February 2016. Zillah was
appointed as a non-executive director of Betfair Group plc in September 2013.
Prior to this, Zillah was Chief Financial Officer of Trader Media Group from 2009 and
interim Chief Executive until July 2013, Chief Financial Officer of Fitness First Group
Ltd from 2006 to 2009, and Chief Financial Officer of the Thresher Group from 2002
to 2005. Zillah has also previously held senior finance positions with GE Capital
and HMV Media Group, qualified as an accountant with Nestle UK Ltd, and was a
non-executive Director of Mecom Group plc from 2011 until February 2015. She
is also currently Chief Executive Officer of Future plc, having previously served as
Chief Financial Officer.
32
er n
Peat ckso
J
P.O
.R
MR.
PADDY POWER BETFAIR PLC Annual Report 2015
Pdraig Rordin (aged 50) was appointed as a non-executive director in July

2008. Pdraig is an internationally recognised lawyer with extensive experience
advising on regulated industries in Ireland and international markets. He is a
Corporate Partner in Arthur Cox, the leading Irish law firm, where he served as
Managing Partner from 2003 to 2011. In 2009, he was named European Managing
Partner of the Year and received the Lifetime Achievement Award from the
Managing Partners Forum in 2012. He studied law in University College Cork and
Harvard Law School and has practiced in New York and Dublin. Pdraig is Chairman
of the DAA plc, which owns Dublin and Cork airports. Pdraig is Chairman of
the Groups Remuneration Committee (appointed in August 2008), and is also a
member of the Risk Committee (appointed in December 2011).
Peter Rigby (aged 60) became a non-executive director and a member of the
Remuneration Committee and Chairman of the Risk Committee in February 2016.
Peter was appointed as a non-executive director of Betfair Group plc in April
2014. Prior to this, Peter was Chief Executive Officer of Informa plc until the end of
2013. Peter first joined Informa plc in 1983 and served as Chief Executive Officer
from 1988, during which time it grew to a business with revenues of 1.2bn and
a market capitalisation exceeding 3bn. He previously held the role of Finance
Director for Stonehart Publications. He holds a BA in Economics from Manchester
University, and is a qualified accountant.
dyson
Secretary
Edward Traynor (aged 38) was appointed as Group General Counsel and Company
Secretary in May 2015. A solicitor, Edward was previously a Director and Head of
Legal & Regulatory Affairs for Vodafone Ireland. Having worked in private practice
with both McCann FitzGerald and Eugene F. Collins, Edward moved to Vodafone in
2007 where he has held a number of positions within both the legal function and
the wider business. Edward studied Law in University College Dublin and De Paul
University, Chicago.
33
Non-executive directors
Gary McGann (aged 65), Chairman, was appointed as a non-executive director in
November 2014 and as Chairman from July 2015. Gary was Group Chief Executive
Officer of Smurfit Kappa Group plc from 2002 until his retirement in September
2015. He joined the Smurfit Kappa Group in 1998 as Chief Financial Officer and
also served as President and Chief Operations Officer. He had held a number of
senior positions in both the private and public sectors over the previous 20 years,
including Chief Executive of Gilbeys of Ireland and Aer Lingus Group. Gary is
Chairman of Aon Ireland and Sicon Limited and a non-executive director of Smurfit
Kappa Group plc, Green Reit plc and Multi-Packaging Solutions International
Limited. He holds BA (UCD) and MSc Management (Trinity) Degrees and is a Fellow
of the Association of Chartered Certified Accountants (FCCA). Gary is a member of
the Nomination, Remuneration and Risk Committees since July 2015.
Ian Dyson (aged 53) became Senior Independent Director and a member and
Chairman of the Nomination Committee and a member of the Audit Committee in
February 2016. Ian was the Senior Independent Director and Chairman of the Audit
Committee of Betfair Group plc since 2010. He was formerly Chief Executive Officer
of Punch Taverns plc, Group Finance & Operations Director at Marks & Spencer plc
and Finance Director of The Rank Group plc. Prior to this he was Group Financial
Controller of Hilton Group plc. He joined Hilton from Le Meridien, a division of
Forte plc, where he had been Finance Director. His early career was spent with
Arthur Andersen, where he qualified as a Chartered Accountant in 1986 and
became a Partner at the firm in 1994. Ian is also currently a non-executive director
and the Chairman of the Audit Committee of InterContinental Hotels Group PLC
and SSP Group plc and Senior Independent Director of ASOS Plc and a nonexecutive director of Punch Taverns plc.
Zillah Byng-Thorne (aged 41) became a non-executive director and a member
of the Audit Committee and Nomination Committee in February 2016. Zillah was
appointed as a non-executive director of Betfair Group plc in September 2013.
Prior to this, Zillah was Chief Financial Officer of Trader Media Group from 2009 and
interim Chief Executive until July 2013, Chief Financial Officer of Fitness First Group
Ltd from 2006 to 2009, and Chief Financial Officer of the Thresher Group from 2002
to 2005. Zillah has also previously held senior finance positions with GE Capital
and HMV Media Group, qualified as an accountant with Nestle UK Ltd, and was a
non-executive Director of Mecom Group plc from 2011 until February 2015. She
is also currently Chief Executive Officer of Future plc, having previously served as
Chief Financial Officer.
32
40
radley yeldar.
Aviva
Aviva plc
Aviva plc Annual report and accounts 2015
This year, Aviva has opted for an editorial reportage

approach for its report, using pull-out quotes and
consumer-style photography to tell the companys
story in a way that is visually engaging. At first
glance, its almost more of a magazine than
an annual report, with the Your Aviva theme
introduced early and then underlined by well-written
case studiesthroughout.
Annual report
and accounts
2015
Your Aviva
Marcuss story
Our
33
million
customers
Whats important and
how we help them
every step of the way
What makes us
different?
As befits such a design approach, the language is

clear and easy to understand. In summary, this is an
excellent and hugely engaging report one that will
appeal to retail as much as institutional investors.
Our strategy in action

and the benefits it
brings to our customers
CUSTOMER FOCUS
Whats our
plan of
action?
How were doing and how

were going to do better
Your
Aviva
Read
Annas
story
Page 4
Aviva has
thought about
absolutely
everything
Your Aviva
Annas story
Meprovides the full

spectrum of insurance to single
people with additional
benefits like pet care and even
housekeeping. And We is
foryoung families. Its not just
insurance but offers things like
child care and tutoring and
even someone to call when
youwant advice on caring for
your baby.
Anna loves our Me
package. In addition to the
protection and accident cover,
she knows her much-loved dog
will be cared for if she has to
go into hospital. Assomeone
Strategic report
We launched our new

You,Me, We package in
Poland in 2015. Its tailored
to meet different peoples
needs at different times in
their lives.
We can offer this to
customers because were
aTrue Customer Composite.
And we think it means simplicity
and convenience for our
customers, delivered digitally.
You is for young people
and offers everything from life
insurance to health benefits
inthe event of injuries like
breaks, twists or sprains.
who looks after herself, she

also appreciates the healthy
eating recipes we send her
every week.
Anna thinks You, Me,
We shows that Aviva has
thought about absolutely
everything. She describes
herself as someone who smiles
a lot. We hope Aviva has made
her smile that much wider.
Aviva has thought
about absolutely
everything
5.0
0
6.
7.0
6.0
04 | Aviva plc Annual report and accounts 2015
Aviva plc Annual report and accounts 2015 | 05
7.0
HDISU?
41
The case studies bring

both the Aviva brand and
customer benefits to life
again and, as the local mayor

said everybody came
together to make it work
that included Aviva, as the
Markets insurer.
Marcus, the Markets
President, said one of the
best decisions we made was to
review our insurance with our
broker regularly, which
resulted in us having the right
coverage to be able to
recover. This was a complex
case, but John, our loss
adjuster, quickly agreed a plan
of action and we made a
substantial advance so the
resurrection of the Farmers
Market could begin. Within a
few weeks a temporary market

was operating. In total, Aviva
paidout around 2.7 million
orjust under $CAD5 million.
Now a bigger, better
StJacobs Farmers Market is
back as abustling much-loved
place, with a huge diversity of
shops and stalls, where people
can meet their friends and
family. Were proud we helped
St Jacobs Farmers Market to
rise from the ashes and take
its place back at the heart of
the community.
For video case study visit:
www.aviva.com/AR15
One of the
best
decisions
we made was to review
our insurance
regularly
Strategic
Strategicreport
report
Imagine if 70 businesses in
your community vanished
overnight: livelihoods lost,
lost income for suppliers,
and thousands of
disappointed customers.
Thats what happened in
StJacobs, Ontario, when the
much-loved St Jacobs Farmers
Market burnt down.
Overnight, local people lost
the place where they went for
everything from antiques to
livestock. One business owner
said it felt like losing a home
like you werent going to see
your family anymore.
But local people resolved
that the market would rise
42
radley
How does
yeldar.
it stack up?
The top 10 reporters in 2016

While theyre all very different companies, our top 10
reporters share a commitment to open and transparent
communication. They tell their stories coherently, giving
investors real insight into areas such as strategy as well
asthepast years performance and future prospects.
This year, weve seen a change at the top, with ARM taking
the title for the first time. Communication is clearly important
to ARM. The company understands the value of telling an
engaging story with style, passion and transparency and
its not stretching the point to say that ARMs recent high
profile takeover by SoftBank could indicate how accurately
the investment case has been presented.
Its no surprise to see long-time HDISU top 10 reporters

suchas Fresnillo, Land Securities, British Land and
AngloAmerican again featuring in our list of the best
butits good that theyve been joined by a few new names.
First-timers in the FTSE 100, Provident Financial Group
worked hard to demonstrate the wider value the business
creates for customers, while Ashtead scored well with an
engaging discussion of the business model and market
environment. BT also made our top 10 on the back of
a consistent, detailed and balanced discussion around
performance and risk.
None of these reports are perfect. There are things they
dowell and others where theres still room for improvement.
However, on balance they provide the most transparent,
coherent view of their particular businesses. They score
highly across most of our criteria and are good role models
for other reporters to follow on the journey towards a more
joined-up, integrated approach to the annual report.
HDISU?
10
43
44
radley yeldar.
Our top 10 reporters in 2016
3 Land Securities
Energising our world
The places where we shop, work and play have
a huge influence on our lives. Land Securities
aims tomeet the diverse needs of customers,
communities and businesses and this years
report takes an engaging, compelling look at
thecompanysprogress.
Land Securities scores highly on all our criteria,
butdoes exceptionally well in our How sustainable
is the business category. The governance section
goesfurther than describing board activities,using
case studies to demonstrate governance inaction.
The risk section is equally clear, featuring helpful
graphics and content that is linked back to
thestrategy.
The report highlights the way that properties
affect people in their daily lives, using detailed
case studies backed up by lively photography and
quotes that have the ring of authenticity about
them. The language is clear throughout, presenting
the investment case with transparency and verve.
Overall, this is a great read.
21
19
ANNUAL
REPORT
2016
32
34
HDISU?
Land Securities Annual Report 2016
.6%
6.3%
%
%
%
%
%
%
%
ND2
ER SHARE
35.0
29.8
2013
30.7
2014
31.85
2015
This year we highlight some of the gems

in our portfolio, the key things we did at
those places during the year, and how
people use and enjoy our space.
2016
ED NET DEBT AND LTV
4,172
3,948
Group LTV %
40
30
3,239
2013
2014
dj. net debt
2015
2016
20
Chief Executives statement

Our market
Our business model
Development timeline
Strategy
Investing through the lifecycle
Our strategy in action
Key performance indicators
London Portfolio review
Retail Portfolio review
Financial review
Physical review
Social review
Managing risk
Going Concern and
Viability Statement
GOVERNANCE
52
54
56
57
60
61
63
65
69
71
72
86
Letter from the Chairman

Board of Directors
Executive Committee
Leadership
Letter from the Chairman of
theNomination Committee
Effectiveness
Letter from the Chairman of
theAudit Committee
Accountability
Governance in action
Relations with shareholders
Directors Remuneration Report
Directors Report
90 Statement of Directors
Responsibilities
91 Independent Auditors Report
95 Income statement
95 Statement of comprehensive
income
96 Balance sheets
97 Statements of changes in equity
98 Statement of cash flows
99 Notes to the financial statements
ADDITIONAL INFORMATION
144
148
149
150
154
156
156
158
160
161
165
167
170
171
172
Business analysis Group

Business analysis London
Business analysis Retail
Sustainability reporting
Combined Portfolio analysis
Lease lengths
Development pipeline
Five year summary
Acquisitions and disposals
Directors Remuneration Policy
Subsidiaries, joint ventures
andassociates
Shareholder information
Key contacts and advisers
Glossary
Cautionary statement
50
4,290
14
16
18
20
22
24
25
26
28
32
36
42
44
46
50
To ensure we provide the right space

we must constantly anticipate and meet
peoples changing needs, using our
insight and experience to inspire how
we shape our buildings.
STRATEGIC REPORT
GOVERNANCE
%
%
%
STRATEGIC REPORT
OUR PURPOSE IS TO
PROVIDE THE RIGHT
SPACE FOR OUR
CUSTOMERS AND
OUR COMMUNITIES
HELPING BUSINESSES
TO SUCCEED, THE
ECONOMY TO GROW
AND PEOPLE TO THRIVE.
SHAREHOLDER
RN1
45
LTV
Land Securities
purpose is
introduced at the
start of thereport
46
radley yeldar.
Land Securities continued
Number of plants in our green walls in

central London
27
Number of nationally rare and protected

species of plants and animals in
Bluewaters parkland
THE BREADTH OF OUR SUSTAINABLE DESIGN AND INNOVATION AT WESTGATE OXFORD
Manage
We are constantly in dialogue with
our customers throughout their
leases. This gives us fresh insight
and enables us to be proactive.
This helps us to retain customers
and improve rental values resulting
in greater portfolio resilience.
Sell
We sell assets at appropriate
points in the cycle. Where possible,
we aim to add value through asset
management or refurbishment
ahead of selling an asset.
For more on our London
Portfolio go to: pages 2831
RETAIL
The retail property market is less
volatile than London offices and is
fundamentally driven by long-term
structural changes, such as the
effect of the economy on
consumers or the impact of online
retailing. We are seeing increasing
demand for high quality space in
thriving locations where visitors
can enjoy a great experience.
We create value by providing
customers with new or more
efficient space that can attract the
right shoppers and visitors in the
right numbers. Geographically, we
are focused in the south east and
the best regional destinations.
Buy
We acquire when we see an
opportunity to transform an
under-managed property or land
into a great destination for
shoppers and visitors.
Develop
We use our close relationships
with retailers to ensure we
understand their changing needs.
We put strong emphasis on

creating attractive, wellconsidered space where people
will want to spend time and return
frequently. We help customers
pursue multi-channel strategies
and we ensure our environments
use new technology to enhance
the shoppers experience. We
de-risk developments by seeking
substantial pre-lettings before we
start construction. And we ensure
we contribute to the environmental,
social and economic fabric of the
local area and community, which
helps to make our centres busy and
well regarded.
Manage
We are proactive managers,
constantly looking for opportunities
to enhance our space in line with the
changing needs of our customers
and communities. We continually
refresh the tenant mix in our centres
and are particularly focused on
finding the most compelling blend
of retail and leisure.
Sell
We dispose of an asset when we
see opportunities elsewhere to
use capital to create better, more
valuable space with greater appeal.
For more on our Retail
Portfolio go to: pages 3235
100% RENEWABLE ELECTRICITY

From April 2016, our Group electricity contract
went 100% renewable with the appointment
of Smartest Energy as our new provider. We
were also the first property company in the
UK to join RE100, a collaborative initiative of
influential businesses committed to 100%
renewable electricity. The contract helps
secure a competitive price for our customers
with great service levels, and it also enables
them to reduce their carbon impacts too. For
us, the new deal also means better contract
terms including lower management costs,
better payment terms and a strong service
level agreement.
Energy
consuWater
mption
on
WESTGATE
OXFORD
SUSTAINABILITY
COMMITMENTS
Health &
wellbeing
Polluti
unity
Comm ement
engag
Comm
facilitieunity
s
Transport
y&
Ecologaping
landsc
Climate change is bringing increasingly

erratic and severe weather conditions. In the
UK this includes hotter, drier summers; warmer,
wetter winters; sea levels rising; and increases
in extreme weather events such as heavy
rain and heatwaves. It is important for us to
review our assets, particularly older buildings,
in relation to future climate projections.
Understanding the risks and acting accordingly
will ensure that our portfolio is sufficiently
resilient to climate change, so we can continue
to provide the right space for our customers
and communities.
43
ENERGY
For many years weve worked to reduce our
energy requirements through active energy
management at our sites. We focus not only
on the energy used within landlord-controlled
areas but also the energy used by our
customers when sub-metered from landlord
supplies. Were sharing the benefits of greater
efficiency with our customers, helping them
to meet regulatory obligations and reduce
their energy bills. Our aim is to self-generate
as much of the energy consumed at our
properties as possible. We are working to
achieve this at design, by selecting the least
carbon intensive technologies possible, and by
retrofitting technologies such as photovoltaics
on some of our shopping centres and other
assets.
15%
Reduction in energy consumption in our

five largest energy consuming assets
against a 2013/14 baseline
WASTE
More than 10,000 tonnes of waste is
generated at our properties each year. We
offer our building occupiers the facilities
needed to dispose of their waste, and its our
responsibility to ensure that this is done safely,
securely and sustainably. Reflecting our drive
to be leaders in our sector, this year we reset
our overall recycling target from 70% to a more
ambitious 75%, and achieved an average
recycling rate of 72%.
1.84GWH
Power capacity generated this year from

renewables installed across our portfolio
270 TONNES
Annual carbon emissions saving from our

hydrogen fuel cell at 20 Fenchurch Street
cycle so we benefit from lower

construction costs, aiming to
deliver completed schemes while
demand from customers is rising
and levels of available space are
low. We generally develop
speculatively so we monitor
changing conditions forensically.
We are drawing our major
development programme to a
close for this cycle. We have plenty
of options for development within
our portfolio and the financial
capacity to acquire development
sites as we move into a new cycle.
With every development we aim
to create a positive environmental,
social and economic impact.
In response, we have set an ambitious

science-based carbon target: to reduce
carbon intensity (kgCO2/m2) by 40% by 2030
compared to a 2013/14 baseline for property
under our management for at least two years.
This target will set us on the path to achieve
our long-term ambition of an 80% carbon
intensity reduction by 2050.
CLIMATE RISKS
7 20 Fenchurch Street, EC3

687,900 sq ft of offices and a unique
public Sky Garden
Annualised net rent 2.9m
uction
ement
Constr
manag
MANAGE
Active management of assets

through the cycle helps to
reduce voids and ensure space
meets occupiers changing
needs.
In December 2015, world leaders met in Paris

at the UN Conference on Climate Change,
known as COP21, to negotiate global cuts to
carbon emissions. The resulting agreement
commits countries to limit global warming
below 2C and to ideally not go over 1.5C. In
the run up to COP21, Land Securities took part
in the conference and was one of hundreds of
businesses that made significant pledges to
action. In particular, we committed to:
Report climate change information in
mainstream reports as a fiduciary duty
Engage responsibly in climate policy
Procure 100% of electricity from
renewable sources.
We have led our industry in understanding and

minimising environmental impact and want to
continue that leadership in our approach to
wildlife and natural systems. These systems
sustain our business, our communities and
each of us as individuals. Wehave a strategic
target to maximise the biodiversity potential of
our operational and development sites and
have been working with The Wildlife Trusts to
understand what this means for us in practice
and what we need to do to achieve it. Whether
its the new green roofs at 1 & 2 New Ludgate
Waste
PR
OP
ER
TY
VA
LU
ES
23.61m
85,000
CARBON TARGETS
Amount of space we own in sq ft
BIODIVERSITY
als
Materi
Develop
We start to develop early in the
When designing a new development we

consider the effect our space will have on
everyone who encounters it from office
occupiers and their employees to retailers,
their employees and their customers; from
visitors to neighbours; from people today to
those who may experience the building ten or
twenty years from now. By thinking in smart
and innovative ways we can create new space
that enriches peoples lives. Given the amount
of time employees spend at work, and the
preciousness of leisure hours, its vital our
office and shopping centres are safe, healthy
and enjoyable places to spend time.
Business activities are

discussed in relation to
movements of the market
Buy
We aim to buy assets when values
are falling or low, or when we see a
long-term opportunity to enhance
value.
Falling values
bring opportunities
to buy assets at
attractive prices.
Everything we do is driven by the

need to meet the needs of our
customers, communities and
partners. We give particular
attention to placemaking,
designing sustainable buildings,
enhancing public realm and
facilities in and around our buildings.
6 1 Sherwood Street/Piccadilly Lights, W1

Offices, retail, leisure and a world
famous advertising landmark
WELLBEING
BUY
GOVERNANCE
The London offices market sees

marked periods of over- and
under- supply, and demand can
move from one phase to another
quite quickly. We create value by
developing space in line with the
cycle; strengthening income
through smart asset management;
and recycling capital through
welltimed disposals and
acquisitions. We operate in central
London in areas we know well.
5 Trinity Leeds
Superb 778,000 sq ft retail
destination developed by us
10 1 & 2 New Ludgate, EC4

382,300 sq ft of modern, technically
resilient office space, restaurant and retail
ES
LU
VA
TY
ER
OP
PR
LONDON
4 One New Change, EC4

Office and leisure destination in an
iconic building
9 Queen Annes Gate, SW1

BREEAM Excellent offices: built by us in
1977, refurbished in 2008
Selling some assets at

the right point in a rising
market means value can
be crystallised and the
portfolio can be biased
towards high quality
assets with long lease
lengths.
Starting schemes at the

right point in a rising
market helps maximise
value and minimise risk.
3 Bluewater, Kent
The dominant shopping centre in the
south east of England
Annualised net rent 29.5m (LS share)
8 Gunwharf Quays, Portsmouth

Outlet shopping, leisure and
entertainment on a waterfront location
SELL
DEVELOP
2 New Street Square, EC4

Contemporary offices with retail and
restaurants
or the rich diversity of parkland at Bluewater,

we already pay attention to biodiversity and
provide green infrastructure at many of our
assets; now we want to do more.
GOVERNANCE
STRATEGIC REPORT
How we aim to
match our activity
to the movements
of the market.
1 Cardinal Place, SW1

Landmark site home to blue-chip
businesses and retailers
NEW DEVELOPMENTS
We look to build assets that can create value
for us and our customers, communities and
partners for years to come. We are ambitious,
imaginative and considered in the way we
develop.
We believe sustainable design helps
make our operations and assets more efficient
and cost-effective, minimises future operational
costs, mitigates the business risk of changing
regulation and creates resilient schemes with
enduring appeal. Its also what the people who
support us from office occupiers to retailers,
from Local Authorities to local communities
expect from us. Where Part L is applicable, the
building code for carbon emissions, our new
developments are being designed beyond the
requirements. We carry out embodied carbon
assessments at major developments and
currently divert 98.3% of waste from landfill.
You can see a timeline of our recent
developments on pages 2021 of this Annual
Report, and you can read what other people
think about our approach at Oxford and
Victoria on pages 213.
risk
A focus on the materials and

technologies we use to create
and operate our assets, and
the effect our spaces have
on people and the natural
environment.
OUR TOP TEN ASSETS BY VALUE
MARKET CYCLE
Strategic Report
PHYSICAL
REVIEW
23
STRATEGIC REPORT
Flood
42
Strategic Report
LP
NCE
NA
OL
LEG A L
RN
AL
CI A
CO
LC
Acts as a sounding board for the Chairman and a trusted intermediary for other Directors.
Available to discuss with shareholders any concerns that cannot be resolved through the normal
channels of communication with the Chairman or the Executive Directors. Leads the other
independent Non-executive Directors in the performance evaluation of the Chairman.
Tim Ashby
Provides advice and assistance to the Board, the Chairman and other Directors, particularly in
relation to corporate governance practices, induction training and development. Ensures that
Board procedures are complied with, applicable rules are followed and good information flow
exists to the Board and its Committees. The appointment and removal of the Company Secretary
is a matter for the Board as a whole.
LOW
Table 19
OL
INT
ER
IT
NA
CO
MM
IT
TE
CURRENT ASSESSMENT OF PRINCIPAL RISKS
Diagram 17
Impact
HEAL
TH &
GY
OLO
HN
TEC
Very high
SAF
ETY
High
Medium
Low
Increase from last year
Decrease from last year
Current principal risk areas
1 Customers
2 Market cyclicality
3 Development
4 People and skills
5 Liability structure
6 Financing
7 Sustainability
8 Health & safety
9 Security
10 Cyber
10
18
7
20
13
19
VERY HIGH
HIGH
MEDIUM
LOW
LIKELIHOOD
17
15
16
21
14
2
3
EC
11
12
6
5
ON
OM
IC
FIN A
NC
59
Table 21
BOARD ACTIVITY
The diagram below shows the key areas of Board activity during the year.
Strategy, property and funding
Governance, stakeholders
and shareholders
Discussed the outcome of the
externally facilitated Board
evaluation and effectiveness review,
and agreed improvement
opportunities
Considered the Groups 2020
sustainability strategy, including
progress versus annual targets and
improvements planned
Reviewed regular health and safety
updates
Reviewed developments in
corporate governance and received
key legal and regulatory updates
Reviewed the investor relations
strategy and regularly reviewed
feedback from institutional
shareholders, roadshows and other
engagement activities
Reviewed and approved the Groups
new purpose, vision and values as
part of setting culture and tone from
the top
Received regular meeting reports
from the Chairman of the Audit,
Remuneration and Nomination
Committees
Reviewed and approved certain
annual fee increases for the
Non-executive Directors.
Reviewed the Groups strategy, in particular

its retail park strategy, and business
development programme in the light of
future property demand expectations
Debated the changing status of the property
cycle, including the Companys position, risk
profile and preparations for any business
impact
Reviewed the Groups performance versus
budget and targets, external benchmarks
and by reference to its peers
Reviewed performance versus Board
approval for key schemes and assets
completed or developed
Considered portfolio liquidity analysis and
development exposure
Considered and approved disposals of
Strategy,
Governance,
properties with a value in excess
property and
stakeholders and
of 150m
funding
shareholders
Reviewed and approved the conditions
around the redevelopment of Buchanan
Galleries, Glasgow
Considered and approved the
Groups Going Concern and
Viability Statements, dividend
policy, debt funding arrangements,
gearing levels and the early
redemption of 400m of medium
THE BOARD
term notes
Internal control
Approved the relocation of the
and risk
Companys head office to
Financial
management
80-100 Victoria Street, SW1.
performance
AGM
Leadership and
people
1 Apr 15
May 15
Jun 15
Jul 15
Aug 15
Sept 15
Oct 15
Nov 15
Dec 15
Jan 16
Feb 16
The number of Board and Committee meetings and their attendance by each Director during the year was as follows:
PEO
Simon Palley
Stacey Rauch
Cressida Hogg CBE
Edward Bonham Carter
Board
Audit
Committee
8/8
Table 20
Nomination
Committee
2/2
Remuneration
Committee
3/3
8/8
8/8
8/8
5/5
2/2
8/8
2/2*
2/2
Kevin OByrne
7/8
2/2
8/8
5/5
8/8
3/3**
8/8
SO
P LE
* Chris Bartram stepped down from the Remuneration Committee and joined the Audit Committee on 23 July 2015, immediately post the AGM.
** Cressida Hogg stepped down from the Audit Committee and joined the Remuneration Committee on 23 July 2015, immediately post the AGM.
1/1*
3/3
2/2**
3/3
Internal control and risk management

Reviewed the Groups risk register and the
effectiveness of the systems of internal
control and risk management
Undertook externally facilitated catastrophic
risk and reputational risk management
reviews
Debated significant and emerging risks,
including cyber-security, terrorism, the loss of
key people and the uncertainty arising from
the imminent EU referendum.
Financial performance
Leadership and people

Discussed the composition of the
Board and its Committees, including
succession planning
Appointed a new Group General
Counsel and Company Secretary
Reviewed the development of people
and potential talent in the Group,
including succession planning for
Senior Leaders
Discussed the results of the employee
engagement survey
Approved and adopted new employee
share incentive plans.
Considered the financial

performance of the business
and approved the annual budget,
key performance targets and five
year plan
Reviewed the half year and annual
results and presentations to
analysts and approved the Annual
Report
Considered the half year and full
year valuation of the Groups
portfolio by the external valuer
Reviewed the Groups tax structure
and insurance programme.
2
3
EC
11
5
ON
OM
IC
Visually engaging
board activity
discussion
12
FIN A
NC
Martin Greenslade
CIA
Dame Alison Carnwath

Robert Noel
Chris Bartram
31 Mar 16
Kevin OByrne
Group General Counsel

and Company Secretary
TR
D
AU
GOVERNANCE
Senior Independent
Director
NT
ON
STRATEGIC REPORT
ENVI
RON
ME
NT
IN TE
FIN A N
Responsible for bringing an external perspective, sound judgement and objectivity to the Boards
deliberations and decision-making. Support and constructively challenge the Executive Directors
using their broad range of experience and expertise. Monitor the delivery of the agreed strategy
within the risk management framework set by the Board.
Director
14
NIN
Independent
Kevin OByrne, Chris Bartram,
Non-executive Directors Simon Palley, Stacey Rauch,
Cressida Hogg CBE and Edward
Bonham Carter
GOVERNANCE
Supports the Chief Executive in developing and implementing strategy, and in relation to the
financial and operational performance of the Group.
16
21
AI
NT
CAL
LITI
PO
Martin Greenslade
BOARD MEETINGS AND ATTENDANCE
ME
P LE
Responsible for developing the Groups strategic direction for consideration and approval by the
Board, implementing the agreed strategy, running the business day-to-day and leading the
executive team. Maintains a close working relationship with the Chairman.
Chief Financial Officer
15
AG
E
TR
PEO
Responsible for leading the Board, its effectiveness and governance and for monitoring and
measuring progress against strategy and the performance of the Chief Executive. Ensures Board
members are aware of and understand the views and objectives of major shareholders and other
key stakeholders. Maintains a culture of openness and debate and helps set the tone from the top
in terms of the purpose, vision and values for the whole organisation.
Robert Noel
LIKELIHOOD
17
Dame Alison Carnwath
Chief Executive
MEDIUM
S
DER
LEA
Chairman
HIGH
OR
NI
SE
VERY HIGH
13
19
Determine risk
response
MANAGING
OUR RISKS
Reporting &
communication
&
Governance
Table18
The Board currently comprises a Non-executive Chairman (who was independent on appointment), two Executive Directors and six Independent
Non-executive Directors. They are advised and supported by the Group General Counsel and Company Secretary. Their key responsibilities are
as set out in the table below:
20
IE
Monitoring
& review
RIS
TE
CH
N
Identify &
assess
IC
58
BOARD COMPOSITION AND ROLES
Diagram 17
IT
AUD
AL
MENT
RN
IRON
TE
ENV
EX
MITTEE
COM
IVE
UT
EC
EX
OL
18
D
AR
BO
Emerging risks
11 Lack of UK competitiveness
12 Tax
13 Political unrest
14 Business rates
15 Demographic change
16 Living wage
17 Modern slavery act
18 Lack of innovation
19 Resilience of portfolio to climate change
20 Energy supply
21 Organised crime
47
Diagram 16
1st line of defence

2nd line of defence
3rd line of defence
LP
10
RISK MANAGEMENT PROCESS
NA
eness
to climate change
SAF
ETY
The identification of risk is a continual process.

Risks are identified through discussion with
management, external agencies, stakeholders
and government bodies. A full and detailed
review of the risks is undertaken with our
executive committees four times a year and
from this, and the feedback from our external
advisors, the top Group risks, which form the
basis for the principal risks and uncertainties,
as well as emerging risks, are challenged
and validated by the Executive Committee.
These risks are then presented to the Audit
Committee four times a year to ensure
representatives of the Board are aware of, and
contribute to, the latest position. In addition, a
risk session is held with the Board every two
years to ensure full Board participation in our
risk management process. Such a session was
undertaken in 2015/16.
Senior management from across the
business will also attend the Executive
Committee and the Audit Committee to discuss
specific risk areas, such as cyber threat.
The Risk Management function, headed
by the Director of Risk Management and
Internal Audit is responsible for facilitating
the risk discussions with the business, for
providing challenge and for coordinating
the presentation of the risks to the executive
committees, the Audit Committee and
theBoard.
Internal Audit reviews internal controls
using a risk-based approach, and management
on a quarterly basis self-certify that the key
controls within its area of responsibility have
been operating effectively.
This year we have also undertaken a
detailed sustainability materiality assessment
to identify key risks and areas for focus.
This has included reviewing current and
forthcoming legislation, peer activity, and
interviews with our own people and external
stakeholders, including investors, customers,
supply chain partners and community groups.
The assessment has confirmed that energy
and carbon, and sustainable building design
are our most material sustainability issues.
Please refer to our Sustainability Report for
more detail on our programme and priorities in
this area.
Diagram 17 shows our current assessment
of the principal risks and the emerging risks we
are monitoring.
IN T E R
GY
OLO
HN
TEC
Our approach
In order to be the best property company
in the UK in the eyes of our customers, our
communities our partners and our employees
we must understand and manage the risks
faced by the organisation. Risk is an inherent
part of our business model. Our approach to
risk is to be risk aware, not risk averse.
The Board has overall responsibility
for the monitoring of risk management and
the system of internal control. It recognises
the importance of identifying and actively
monitoring the full range of financial and
non-financial risks facing the business. By
regularly reviewing the risk appetite of the
business, the Board ensures that the risk
exposure remains appropriate at any point
in the cycle. Whilst it has chosen to delegate
this responsibility to the Audit Committee,
who are responsible for providing assurance
over these areas, managing risk is embedded
as part of our everyday business activities
and culture with all our employees having
a role to play. Our Executive Committee are
responsible for the day-to-day management of
risks, which includes the ongoing identification,
assessment and mitigation of risks as well as
for the design, implementation and evaluation
of the system of internal control and for
ensuring its operational effectiveness.
Diagram 16 sets out our approach to
managing risk and the link to the three lines of
defence governance model for effective risk
management and internal control.
We assess each risk on three factors:
likelihood; financial impact, both to income
and capital values; and reputational impact,
from the business unit through to Group level.
We also consider the inherent (gross) risk
(the impact of the risk before any mitigating
action is taken) and the residual (net) risk (the
risk that remains after the effect of mitigating
actions and controls are taken into account).
As a result of this analysis we identify principal
risks (current risks with relatively high impact
and certainty) and emerging risks (those risks
for which the extent and implications are not
yet fully understood). This also informs the
business as to those risks that have a high
dependency on the internal control systems,
which then directly helps to focus the work of
the internal audit team. The business considers
the full range of external and internal risks,
including strategic, operational, people and
technology. A risk scoring matrix is used to
ensure a consistent approach is followed.
GY
LO
O
The management of
risk is embedded in our
everyday business
activities and culture, with
all our employees having
an important role to play.
HEAL
TH &
Strategic Report
CAL
LITI
PO
as
TE
MANAGING
RISK
NT OF PRINCIPAL RISKS
r
ar
IT
LS
46
CO
MM
STRATEGIC REPORT
Current and emerging

risks are clearly identified
IT
RO
D
AU
AL
IT
INT
N
ER
UD
TR
N
CO
AL
N CI
NT
CIA
FIN A
CO
SO
IN TE
NT
L
NA
SE
CU
RIT
Y
HEALTH, SAF
ETY
&
NIN
ENVI
RON
ME
NT
ME
AI
IT
TR
UD
AG
E
47
IE
K
N
HDISU?
RO
IC
RIS
&
LS
OL
Reporting &
communication
48
radley yeldar.
2 Fresnillo
Gold standard communication
Fresnillo plc Annual Report 2015
The worlds leading silver miner and one of Mexicos

largest gold producers, Fresnillo operates in an
industry facing significant pressures. The companys
response has been to produce an annual report that
is both detailed and transparent and which goes
a long way towards showing investors exactly how
Fresnillo is rising to the challenges of its market
environment.
Fresnillo has a strong track record with HDISU
overrecent years, based on providing a consistently
high level of detail. The company doesnt shirk its
responsibility to clearly lay out its aims and progress.
This deep content is material and welllinked
across the report investors are able togain a
comprehensive and valuable understanding of
thebusiness.
Driving LongTerm Value

from Solid
Foundations
Fresnillo plc
Annual Report 2015
The strategy pages are particularly noteworthy,

with objectives, performance, next steps and KPIs
all laid out clearly. Risks are also covered with style
and expertise, including a transparent explanation
ofhowthose risks have evolved during the year.
Fresnillo plc
Annual Report 2015
Fresnillo Today
Driving Long-Term Value from Solid Foundations
Fresnillo plc
Annual Report 2015
Fresnillo Today
Fresnillo Today
Our Investment Case
p95
p5065
Strong balance sheet
Low cost
and flexible
operations
How this drives value: long-term visibility,

long life returns
We aim to maintain a strong financial position with a healthy cash

balance and a low leverage ratio. This enables us to balance
investment in profitable growth with returns to our shareholders,
while optimising our operations. Even in the current metal price
environment, we were able to invest US$474.7 million in capex,
US$140.2 million in exploration and pay out US$37.5 million in
dividends, and still close the year with a strong cash position of
US$500 million and low leverage.
We are amongst the largest concession holders in mineral-rich

Mexico. We hold a portfolio of low cost gold and silver mines, high
potential development projects and advanced exploration prospects,
with a focus on district consolidation that allows us to leverage our
local knowledge and achieve significant synergies through shared
infrastructure.
HERRADURA
NOCHE BUENA
TAJITOS
p6686
Commitment
to sustainable
business practices
Disciplined
approach to
development
How this drives value: healthy

margins, adaptability across
price cycles
How this drives value: long-term

profitable growth
How this drives value: licence to

operate
Our high quality assets allow us to extract

mineral profitably even in depressed metal
price environments, with all-in sustaining
costs below average realised prices at each
of our mines in 2015. We benefit from the
ability to tailor mine plans and leverage
expertise, and within our districts to share
personnel and plant capacity accordingly. We
optimise performance with a focus on
continuous improvement in productivity and
efficiency, and lower unit consumption of
operating materials and energy. In 2015 cost
per tonne decreased at four of our five
operating mines.
Our development projects meet stringent

viability criteria, including environmental and
social impact, sustaining capital expenditures
and rates of return. Delivery timelines and
budgets are optimised to allow us to advance
towards our production targets whilst
adjusting for adverse market conditions to
maintain a healthy financial position.
We understand the needs of our local

communities and prioritise local goods and
service for our operations, continue to work
to ensure the safety and health of our
people, and strive for continuous
improvement in minimising our
environmental footprint. This is essential not
only for operational continuity but in order to
drive value for all our stakeholders. We
invested US$19.06 million in our HSECR
initiatives in 2015, following an investment of
US$20.54 million in 2014.
Vibrating screens at Saucito result in capacity

increase
Construction of milling area at San Julin

nears completion
355,635
CENTAURO DEEP
ORISYVO
Net debt: EBITDA
GUAZAPARES
0.55x
SAN JULIAN
Total hours of safety training

CIENEGA
As at 31 December 2015
(US$m)
Senior
notes
-800
Net
debt
-300
Exploration at operating units

Exploration at development projects
Exploration projects under drilling
27
-800 -700 -600 -500 -400 -300 -200 -100
CONETO
GUACHICHIL
500
08
RODEO
SAN RAMON
Cash
balance
100 200 300 400 500
Exploration prospects
Interesting results 2015
COYOTES
JUANICIPIO
12,459
26,057
63,679
355,635
Saucito Herradura Noche

Buena
Cinega
San
Julin
Total
114,817 101,468
37,155
FRESNILLO
SAUCITO
HUIZACHE
GUANAJUATO
LA JOYA
Fresnillo
09
How this drives value: operational flexibility,

investments for growth, returns to shareholders
p6061
Corporate Governance
23
p5059
High quality assets
Strategic Report
Our solid foundations provide a competitive

advantage in the mining industry and position us
to drive long-term value.
32
34
HDISU?
Fresnillo plc
Annual Report 2015
Strategic Report
Strategy
2015 exploration investment
2016 exploration budget
Fresnillo Today
Fresnillo plc
Annual Report 2015
49
Key Performance Indicators continued

3 Explore
See pages 6265
US$135-140m
2015 objectives
2015 performance
2016 objectives
For project and prospect specific information

see pages 6265
3 Explore KPIs
Total resources (attributable)
Quantifies measured, indicated and inferred resources at all our assets; an indicator of the Groups
growth potential and ability to discover and develop new ore bodies.
Attributable silver resources
Millions of ounces
Attributable gold resources

Millions of ounces
1,970.7
35.5
1,811.1
2,038.8
2,140.3
2,008.4
1,970.7
2011
2012
2013
2014
2015
Silver resources decreased by 1.9% mainly due to changes

in vein modelling and deep drill-hole results at Saucito and
lower silver price assumptions at San Julin. This was partly
mitigated by increased silver at Huizache, Juanicipio, Cinega
and Guanajuato.
27.5
31.2
33.5
34.1
35.5
2011
2012
2013
2014
2015
Gold resources rose 4.2% as a result of increases at Rodeo,

Guachichil, Candamea, Guanajuato and Saucito.
Exploration activities at Herradura
30
Progress against the years

objectives are succinctly
discussedand objectives
fortheyear ahead identified
31
> US$170 million budgeted for exploration,

> US$151 million invested in exploration,
> US$135-140 million budgeted for
including capitalised expenses
including capitalised expenses
exploration, including capitalised expenses
> Juanicipio: continue construction of the
> Juanicipio: construction advanced,
> Juanicipio: detailed engineering, further
decline and further geological investigation
exploration resulted in 27.3% and 10.1%
exploration
increase in gold and silver resources; project
will be developed on a stand-alone basis
> Orisyvo: conclude preliminary economic
> Orisyvo: completed PEA; project currently
assessment (PEA)
deferred
> Continue our exploration programme to
> The conversion from resources to reserves
> Ongoing exploration to convert resources
gradually convert resources into reserves
in our mines was insufficient to replenish
into reserves at mines and at key projects
at our mines and at key projects
silver reserves, except at Saucito. Resource
upgrade at Candamea increased
measured and indicated resources by 0.6
million gold ounces
Our 2015 exploration programme was mainly focused

on areas of influence at our current operating mines
and key exploration sites.
US$151m
Strategic Report
Our performance in the year:
50
radley yeldar.
Fresnillo continued
Fresnillo plc
Annual Report 2015
Demonstrating the
change in risk over
the year
Strategy
areness and safety culture

ded across the business
2015 risk assessment

The annual risk assessment exercise across
all our operations, advanced projects,
exploration offices, support and corporate
areas identified and evaluated 104 risks in
2015. This universe was narrowed down
into major risks monitored by Executive
Management and the Audit Committee, and
then further consolidated into 11 principal
risks closely monitored by Executive
Management and the Board of Directors.
For the bottom-up process, the teams in
charge of each business unit determined the
perceived level of risk for their individual unit.
Executive Management then reviewed and
challenged each perceived level through the
evaluation of certain controls and relative risk
levels, and compared it to Fresnillo plcs risk
universe as a whole. The result of this
exercise is used as another input for the
selection of the principal risks of Fresnillo plc.
The same risk analysis was conducted on
advanced projects, detailing the specific risks
faced by each project according to the
unique characteristics and conditions of each
site. The risk heat map for each business unit
and development project is included in the
Review of Operations (pages 50 to 61).
11
10
Very low
Impact
9
8
Likelihood
Unlikely
2015
Almost certain
X
2014
Risk*
1. Impact of global macroeconomic developments (silver and gold prices)
(v)
2. Access to land
(v)
3. Potential actions by the government (e.g. taxes/more stringent regulations)
(v)
4. Security
5. Public perception against mining
6. Projects (performance risk)
(v)
7. Safety
8. Union relations
9. Exploration
10. Human resources
11. Environmental incidents
(v)
* Bold text indicates those risks which have changed during 2015.
(v) Risk that was considered for the viability assessment as detailed on page 48.
We believe there were a number of

developments in 2015 that have the
potential to adversely impact the entire
Mexican mining industry. These include
Mexicos transition towards indigenous
consultation (which is an emerging initiative
but worth monitoring); the perceived level
of corruption across Mexico remaining
high; continued legal challenges to the
mining industry by individuals and local
communities who may seek to disregard
previous land agreements; and due to lower
metal prices, profit levels have been
impacted and also profit sharing to

employees and union workers has
decreased. As a result of these changes we
determined that the following risk rating
levels facing Fresnillo plc have increased:
potential actions by the government,
security, access to land and union
relations. As with all our key risks, the Board
and the Executive Committee continue to
closely monitor them.
s the Audit Committee in

ng the effectiveness of our
nagement and internal
systems
1
3
nternal Audit
2
2
We have continued to build on our existing

risk management framework, enhancing risk
management and internal control systems
across the business in line with changes to
the UK Corporate Governance Code.
In addition to the permanent risk
management activities, our priority for
2016 is to continue promoting a monitoring
environment which consists of validating
the effectiveness of our current controls
in order to support the Board in their
responsibilities, which include monitoring
and reviewing risk management and the
internal control systems.
Strategic Report
> Provides direction on the

importance of risk
management and risk
management culture
Severe
Fresnillo Today
gement reviews strategic

sk appetite, assesses the
ed to achieving these
ncorporates controls into
operating plans to mitigate
own risk identification and
ess helps to ensure that
rocess performed at the
el is aligned with and
nt strategy and objectives.
Risk management system

The annual and ongoing elements of
the Groups risk management process
are controlled by well-established risk
identification, assessment and monitoring
processes. We have progressed in
embedding a risk management culture
amongst all employees, however this is an
ongoing process and we are still working to
demonstrate this with evidence collected
through the monitoring of our controls to
mitigate risks.
HDISU?
Fresnillo plc
Annual Report 2015
Strategic Report
Fresnillo plc
Annual Report 2015
Strategy
Fresnillo Today
Managing our Risks continued
Potential actions by the government e.g. implementation of more stringent regulations for obtaining permits, etc.
Risk description
We face the risk of implementation of new
governmental requirements that will have
an adverse impact on us, or other potential,
not yet materialised, new or more stringent
ecological or explosives regulations or more
difficult processes to grant permits.
We uphold strict controls on receiving, handling,

storing and dispatching explosives in each of
our operations and projects to maintain our
explosives permits.
>
Development projects
>
Growth pipeline
>
Sustainable
development
Key risk indicators

Change in heat map:
Description of risk change

The indigenous consultation
topic is being given greater
focus in Mexico. This topic is
currently not yet regulated by
the Mexican Mining Law as
such, however Mexico ratified
the Indigenous and Tribal
Peoples Convention issued by
the ILO (International Labour
Organisation) which states: ...
governments shall establish or
maintain procedures through
which they shall consult these
peoples, with a view to
ascertaining whether and to
what degree their interests
would be prejudiced, before
undertaking or permitting any
programmes for the
exploration or exploitation of
such resources pertaining to
their lands. The peoples
concerned shall wherever
possible participate in the
benefits of such activities, and
shall receive fair compensation
for any damages which they
may sustain as a result of such
activities.
>
Number of media
mentions related to
mining regulations (i.e.
tax/royalties/banning
of mining activities in
protected areas/legal
precedents) and profile
of those quoted
(political parties,
government officials,
etc.)
Risk description
Our people, contractors and suppliers face
the risk of40kidnapping, extortion or harm due
to security conditions in the regions where
we operate.
We the
face the risk of restricted
Describing
access
operations/projects
and theft
risktoindicators
and
of assets.
clearlylinking risk
tothe strategy
The influence
of drug cartels, other criminal
Risk description
Our people, contractors and suppliers face
the risk of kidnapping, extortion or harm due
to security conditions in the regions where
we operate. We face the risk of restricted
access to operations/projects and theft
of assets.
The influence of drug cartels, other criminal
elements and general lawlessness in the
regions where we operate, combined with
our exploration and project activities in
areas of transfer or cultivation of drugs,
makes working in these areas of particular
risk for us.
Response/mitigation
We closely monitor the security situation, maintain
clear internal communications and coordinate
work in areas of higher insecurity, along with the
following practices to manage our security risks
and prevent possible incidents:
>
>
>
We maintain close relations with authorities,

including army encampments installed nearby
certain of our operations. We also reinforce our
relationship with the army secretariat at the
regional level in order to align and coordinate
efforts.
Travel management e.g. travel in convoy, use
aircraft versus land travel (when possible) and
avoid known insecure areas.
In 2015 we developed the engineering for the
standard of technological and physical security
measures for all of our business units. We
started the implementation of this engineering
which is expected to be concluded in 2016.
>
We contracted security personnel (internal and

contractors) to improve the efficiency of our
security strategy.
>
We continued to utilise logistics controls in 2015

to further reduce the probability of theft of
mineral concentrate, including the use of
real-time tracking technology and the use of
guard services and control checkpoints in a
safe corridor, and reduced authorised stops in
order to optimise delivery times and minimise
the convoys exposure.
>
We invest in community programmes,

infrastructure improvements, and government
initiatives to support development of lawful
local communities and discourage criminal
acts.
>
In order to ensure the security of our personnel,

access to the San Nicolas del Oro prospect
remains suspended because of the state of
insecurity in Guerrero state.
>
Rotation of personnel to reduce their exposure

to certain regions.
>
Promote reporting to authorities amongst our

contractors.
Risk appetite
Low
Risk rating (relative position)

2015: Very high (4)
2014: Very high (3)
Link to strategy
> Mines in operation
>
>
Growth pipeline
>
Sustainable
development
Key risk indicators

>
Total number of
security incidents
affecting our workforce
(thefts, kidnapping,
extortion, etc.)
>
Continued increased state of

insecurity in the regions where
we operate.
Number of sites
affected and work
days lost, by region
and type of site
>
We have suffered minor
security incidents to contractor
personnel; that said, incidents
are getting closer to our
operations and more frequent.
Number of media
mentions related to
security issues
affecting the mining
industry
Change in heat map:
Response/mitigation
We closely monitor the security situation, maintain
clear internal communications and coordinate
work in areas of higher insecurity, along with the
following practices to manage our security risks
and prevent possible incidents:
>
We maintain close relations with authorities,

including army encampments installed nearby
certain of our operations. We also reinforce our
relationship with the army secretariat at the
regional level in order to align and coordinate
efforts.
>
Travel management e.g. travel in convoy, use

aircraft versus land travel (when possible) and
avoid known insecure areas.
>
In 2015 we developed the engineering for the

standard of technological and physical security
measures for all of our business units. We
started the implementation of this engineering
which is expected to be concluded in 2016.
We contracted security personnel (internal and
contractors) to improve the efficiency of our
security strategy.
>
We continued to utilise logistics controls in 2015

to further reduce the probability of theft of
mineral concentrate, including the use of
real-time tracking technology and the use of
guard services and control checkpoints in a
41

2015: Very high (4)
2014: Very high (3)
Link to strategy
>
>
Growth pipeline
>
Sustainable
development
Key risk indicators

>
Total number of
security incidents
affecting our workforce
(thefts, kidnapping,
extortion, etc.)
>
Continued increased state of

insecurity in the regions where
we operate.
Number of sites
affected and work
days lost, by region
and type of site
>
We have suffered minor
security incidents to contractor
personnel; that said, incidents
are getting closer to our
operations and more frequent.
Number of media
mentions related to
security issues
affecting the mining
industry
Change in heat map:
Financial S
>
Risk appetite
Low
elements and general lawlessness in the

regions where we operate, combined with
our exploration and project activities in
areas of transfer or cultivation of drugs,
makes working in these areas of particular
risk for us.
Security
Strategic Report
Another factor to increase the

level of this risk is the perceived
level of corruption across
Mexico, which remains high.
We share a general industry
view that local and regional
government levels in particular
have regrettably worsened
notwithstanding the national
effort of the anti-corruption
system, which as of today is
not yet fully deployed. This
situation might as a result
cause a delay in obtaining
permits for certain operations
and/or projects.
Strategy
Fresnillo Today
We continue collaborating with other members of

the mining community via the Mexican Mining
Chamber to lobby against new detrimental taxes/
royalties or regulations. We also support the
industrys lobbying efforts to improve the general
publics understanding of the Mining Law.
Link to strategy
Security
Nevertheless, such a huge change in the Mining

Law could take time due to the complexity of the
terms and proceedings yet to be discussed.
Risk appetite
Low

2015: Very high (3)
2014: Very high (4)
During 2015, Mexicos Supreme Court of

Justice heard a case relating to an injunction
which analysed the merits and relevance of
the right of indigenous communities to prior
and informed consent within the overall
process for granting mining concessions.
Should the Court find in favour of the
indigenous communities, a step towards
creating precedent in this regard will have
been taken that could eventually affect the
granting of new concessions in Mexico.
Response/mitigation
Indigenous consultation is an ongoing topic, thus
we will continue monitoring developments and
working with the Mexican Mining Chamber to try
and reach agreements that will benefit both
parties going forward.
Strategic Report
Fresnillo plc
Annual Report 2015
51
52
radley yeldar.
1 ARM
Shaping the future of reporting
This is a great report one that the reporting team
of any company in any sector would be proud to
callits own.
The temptation for a business like ARM which
produces the technology that is shaping the
connected world is to fill its annual report with
futuristic imagery. But while the ARM report does
use photography of chips and mobile phones, the
feature spreads are very much rooted in the world
around us. Panoramic shots of city skylines give
ARM the opportunity to show the bigger picture,
demonstrating how its technology is transforming
everyday lives and changing the way we work and
play for the better.
The strategic report narrative tells a complex story

in a simple yet powerful way. The business model,
for example, presents a compelling investment case
and the strategy demonstrates a continued drive
towards strong year-on-year performance. Logic and
transparency abounds on these pages you can
see the linkages, understand the business, identify
progress and see opportunities for the future.
ARM Holdings plc Annual Report 2015: Strategic Report
ARM Holdings plc

110 Fulbourn Road
Cambridge CB1 9NJ
United Kingdom
Telephone +44 (0)1223 400400
Facsimile +44 (0)1223 400410
www.arm.com
twitter: @ARMHoldings
youtube.com/armflix
linkedin.com/company/arm
The hero pages include work that wouldnt look

out of place in a poster campaign targeted at
consumers. Arresting and intriguing, these spreads
stop the reader in their tracks before delivering key
information on how ARM is changing our world.
ARM Holdings plc

Annual Report 2015: Strategic Report
We shape the
connected world
20
29
36
28
01_FC_IFC_BC_IBC_v53.indd 1-2
24/02/2016 15:12
HDISU?
ARMs technology
is shaping the way
we all live our lives;
in the home, as we
travel, at school or
work, and as we have
fun with our friends
Automotive autonomy
Cars are becoming mobile computing
platforms. More sensors and cameras
are being included to assist the driver
with lane detection, reading roadside
signage and identifying potential hazards
or people crossing the road. In time,
driver assistance may lead to a fully
automated vehicle.
Generating energy effectively

Wind turbines and solar panels can
be made more effective by including
technology that controls and monitors
the wind turbine, and aggregates data
across the entire wind farm.
Wearable technology
Smart watches, biometric-monitors
and augmented reality headsets are
intelligent, connected devices that can
give us extra information to improve
our health and wellness, or just to
helpus have more fun.
Mobile computing
ARM-based mobile computers, including
smartphones, tablets and some laptops
are, for many people, the primary device
for their work, whether in an office or
on the road; forresearching and writing
school assignments; and for engaging
with friends.
Intelligent networks
Broadband and mobile phone network
speeds are increasing, and latency
decreasing, enabling new services for
operators to provide to consumers and
enterprises, from delivering more movie
and TV options to collating and analysing
data from sensors.
Smart city streets

City infrastructure from street lights to car
parking meters can be made more effective
by embedding intelligent chips. Street lights
that can dim when no one is nearby will save
energy and reduce carbon emissions, and
prognostics in the lighting system can detect
faults before they occur, thereby reducing
maintenance costs and improving reliability.
53
Smarter homes
Cost-efficiency in the home can be
improved through learning thermostats
thatunderstand your daily routine, domestic
appliances that use advanced algorithms
for calculating water and detergent
requirements, and smart meters that give
information on energy usage, allowing the
householder to make better decisions.
Designed and produced by

Radley Yeldar. www.ry.com
This report has been printed on Cocoon Offset a paper
which is certified by the Forest Stewardship Council and
contains 100% recycled waste. The paper is Process Chlorine
Free (PCF) made at a mill with ISO 14001 environmental
management system accreditation.
This report was produced using the pureprint
environmental print technology, aguaranteed, low carbon,
low waste, independently audited process that reduces the
environmental impact of the printing process. Printed using
vegetable oil based inks by a CarbonNeutral printer
certified to ISO 14001 environmental management system
and registered to EMAS the Eco Management Audit Scheme.
ARM, ARM Powered, Artisan, Cordio, Cortex, Mali
and mbed are trademarks or registered trademarks
ofARM Limited.
ARMs growing market

is closely aligned to the
technologies they offer
10
ARM Strategic Report 2015
Overview
Mobile computing
Connecting us to each other, and our data
Total available market (TAM) for

mobile applications processors*
Over the past few years most of the innovation

in smartphones has been along conventional
parameters; speed of the main chip, screen size and
connectivity. And these are going to continue to be
important drivers of innovation.
TAM Value
2015
$18bn
**
ARM Market Share
85% of chips
TAM Value
2020
$25bn
ARM Target Market Share
For many people, mobile computers, including

smartphones and tablets, have become their primary
device for sending emails, browsing the internet and
engaging with friends on social networking sites.
Other technologies are now being introduced into

smartphones. Sensors, such as microphones, noise
cancellation technology and location awareness,
are being integrated into your mobile computer,
enabling it to do more than it has ever been able to
do before. Next generation smartphones will be
able to interact better with other devices; sharing
information such as context or location. This will
enable them to change their behaviour when you
are at home, in your car, or in the office or at school.
Future mobile devices will be able to interact with
you in a much more natural way; understanding
what you say, reading your handwriting, and
recognising your gestures. The smartphone is going
to significantly improve over the next few years,
and all of this is going to require more processing
capability and more technology from ARM to enable
it to happen.
At the same time, basic smartphones are becoming

cheaper and are proliferating across the world.
In developing economies and in remote parts of the
world, smart mobile devices are allowing people
to be better connected, not just to each other, but
also to education and information, and banking and
medical services. Even these basic smartphones can
contain several chips that utilise ARM processor and
physical IP technology.
Today ARM-based application processors can be
found in about an 85% share of mobile devices,
including smartphones, tablets and laptops. Over the
past five years this market has grown by anaverage
of 30% per year. Analysts predict that the average
annual growth rate to 2020 of this market is
expected to be about 7%. Although this is a lower
rate of growth, it still makes mobile computing one
of the fastest growing markets in the semiconductor
industry, which will continue to benefit ARM.
Performance
Commitment
Financials
11
Networking infrastructure equipment moves

data around the world. It includes mobile phone
base stations, WiFi hotspots in cafs and train
stations, corporate networks, cable and satellite
TV distribution, video-on-demand servers and the
entire infrastructure of routers and switches that
connects the internet together. Huge numbers of
chips are needed within these systems and analysts*
estimate that there were about 140 million chips
soldfor use in networking infrastructure in 2015,
worth about $13 billion.
Networking infrastructure
TAM Value
2015
$13bn
**
ARM Market Share
Smartphones that cost less than

$100 aretaking mobile technology
to developing economies, enabling
everyone to connect not just to their
families and friends but also to medical
and banking services.
15% of chips
TAM Value
2020
$16bn
ARM is targeting
to at least maintain
market share
ARM Target Market Share
* Including smartphones, tablets and laptops.

** Based on ARM and market data.
02_Overview_Chair_Statem_01_15_v119.indd 10
Strategy
Efficient networking infrastructure

Moving more data, without using more energy
** Based on ARM and market data.
23/02/2016 17:27
The network operators who own and run these

networks believe that they can offer new services
to consumers and enterprises that will generate
new revenue streams for them. However, networks
today are mainly built up using fixed function
hardware, requiring relatively simple chips to control
them. Operators want to transition these networks
to much more intelligent and flexible systems,
requiring sophisticated computer chips that will
run new software that is being created to enable
these new services. All of the major semiconductor
companies that make chips for this market have
licensed an ARM processor to help them add
moreintelligent chips to their product portfolios.
ARM is confident that ARM-based chips will gain
share, however the rate of share gain is harder to
predict as it depends on many factors including
theinvestment plans of network operators.
ARM is well positioned to gain share

in networking infrastructure as future
networks require more flexible compute
capability, and all the major chip vendors
for this market have already licensed
ARM technology.
45% of chips
* Gartner, December 2015.
23/02/2016 17:27
54
radley yeldar.
ARM continued
14
Fish are better

with chips
In South Korea, fish farmers are growing healthier
fish through the combination of smart, ARMbased technology and SK Telecoms mobile
communications systems. By installing wireless,
intelligent sensors in their fish ponds, farmers can
measure variations in water quality and nutrient
levels, helping them know when to feed the fish,
or to attend to a maintenance task. As these fish
farms are usually in remote regions and coastal
areas, only wireless technology was cost-effective.
Find out more about

innovationbyARMs Partners
in arangeofendmarkets visit:
www.arm.com/markets
23/02/2016 17:27
HDISU?
The benefits of ARM technologies are

brought to life through unexpected imagery
Overview
Strategy
Performance
Commitment
Financials
15
ARM
Cortex-M
Smart sensor
Sensors across the fish

farmmonitor the quality
ofthe water.
Data transmitted wirelessly
by the sensors is collated
and analysed. Information
and alerts are transmitted
to the farmers phone.
Base station
tower
Mobile
device
23/02/2016 17:27
55
56
radley yeldar.
ARM continued
ate per chip and

smart devices
Growth driver:
year, the number of chips sold containing

x-A technology rose 16%. This was driven
wth in the number of ARM-based mobile
devices as well as more networking
ure equipment being deployed with
ology.
Principal risks
martphones sold in 2015 had a Cortex-A

essor in the main chip. Of these
% were based on our latest processor
e, ARMv8-A (up from about 10% in 2014);
% also contained Mali graphics processors
5%); and 10% deployed chips with more
ores (up from <1%), which enables
performance without compromising
e opportunity
cts compute requirements will continue
en by richer user experiences in
markets and data processing trends
e. We expect these trends will drive
r our most advanced technologies.
Generate new revenue

streams fromadjacent markets
Penetration of technologies
Read more on pages 36 to 39
2015
Smartphones with more than four cores
10%
Smartphones based on ARMs Mali

graphics processor
40%
Smartphones based on ARMv8-A
50%
Overview
Strategy
Performance
Financials
31
KPI:
Investing in new technologies
and businesses
ARM is best known for the digital technology it

provides to semiconductor companies, however
around 500 of our R&D engineers spend their
time researching new markets and developing new
technologies. In 2015 two of our research projects
matured into revenue-generating businesses
Cordio and mbed Device Server.
Cordio
Cordio provides highly-integrated and ultra-lowpower radio technology to semiconductor vendors.
The radio provides Bluetooth connectivity to
low-cost sensors that can then communicate with
the internet wirelessly, running for several years
offasingle coin-sized battery.
This product was enabled by two acquisitions
Sunrise Micro Devices and Wicentric which were
completed in early 2015. Since then we have invested
further in the Cordio platform, and it forms part of
the IoT Subsystem for Cortex-M processors which
was released later in the year. This product combines
processor, radio and physical IP technologies from
ARM, allowing relatively small design teams within
our customers to bring low-power IoT products
tomarket quickly and with low development risk.
2020
Commitment
target
mbed Device Server

ARM launched mbed Device Server, a solution
for managing IoT systems in 2014. Examples of
IoT systems include smart lighting which can vary
its brightness according to traffic levels, smart
irrigation systems which can adjust how much water
they disperse according to the moisture content
of nearby soil, and smart factories that can place
orders with suppliers automatically when store
rooms run low of stock. Each IoT system could
have hundreds of thousands of low-cost end points
which communicate with remote servers in a secure
manner. Provisioning and managing a large number
ofsecure connections is a complex task.
Number of engineers invested in

longer-term development projects
11
149
12
161
13
209
14
275
2015
488
In 2015, ARM established commercial partnerships,

relating to mbed Device Server, with several IoT and
data analytics companies, including General Electric
Company, IBM Corporation, Microsoft Corporation
and Salesforce.com, Inc.
Future opportunities
ARM intends to grow the Cordio and mbed Device
Server product lines into meaningful revenue
streams. In addition, ARM is evaluating potential
investments which may yield new revenue streams
in the future.
Creating smarter
infrastructure
Smartphones with more than four cores
50%
Smartphones based on ARMs Mali

graphics processor
50%
Smartphones based on ARMv8-A
>85%
23/02/2016 17:36
Smart, connected chips can be found in streetlights, traffic

signals, car parking, toll booths, and across mass transport
systems such as railways, trams and buses. Similar chips are
making manufacturing, agriculture and freight transport
logistics more efficient and effective.
05_Strategy_KPIs_26_34_v99.indd 31
Each growth driver is

explicitly linked to key
performance indicators
23/02/2016 17:36
32
Growth driver:
Invest to create a sustainable

business, fit for the long term
Principal risks
5
KPI:
Investing in ARMs people
and systems
Our people design our products, deliver them

to our customers, and support the ecosystem of
Partners which brings that technology to market.
We invest in our people through hiring the brightest
and best graduates as well as seasoned industry
experts, developing them and providing a supportive
culture to maximise their capability and potential.
See page42 for more information.
In 2015, ARM increased headcount by a net 681
people. Some of our new colleagues came from
acquisitions, with the majority being new hires
into the business. Overall, most new joiners were
engineers to increase our research and development
capability. Headcount grew in all areas of the
business, and an increasing proportion of our
engineers are working on processor technologies
forservers and networking devices.
Shaping and connecting

aninnovative workforce
Partly as a result of this investment, normalised

expenditure on research and development
rose to 214.8 million in 2015, representing
22% of revenues and 28% growth year-on-year.
Expenditure on research and development under
IFRS was 278.0 million, representing 29% of
revenues and 24% growth year-on-year.
The future opportunity
We aim to create a work environment where
everyone can grow and excel, and be rewarded for
their contribution. We will continue to grow our
engineering capability and operational execution, and
as the products designed by our people are adopted
in more end markets, we expect the business to
generate more profits.
Overview
Growth driver:
KPI:
Investing in sustainability
Invest to create a sustainable

business, fit for the long term
Principal risks
Number of employees at year-end

11
1,382
12
734 2,116
1,652
13
846 2,833
2,370
Number of engineers
740 2,392
1,987
14
2015
924 3,294
2,938
1,037 3,975
Other employees
Strategy
Performance
ARM takes a long-term view of its business; it can

take ten years to develop a new architecture, design
a processor based on that architecture, for our
customers to build that design into a chip and for that
chip to start shipping in large numbers. And each
processor may ship in chips for several decades to
come. The sustainability of our business is therefore
a critical factor in how we develop and execute
our strategy.
Since 2012 ARM has participated in an annual
assessment process for the Dow Jones Sustainability
Index (DJSI), considered by many to be an industry
standard for corporate-wide sustainability.
The process involves a rigorous assessment of
the sustainability of the governance, strategy and
performance of around 2,000 of the worlds
largest companies.
ARMs systems and supporting infrastructure

amplifies the creativity of everyone in the
organisation and enables our engineers to develop
and test complex technology. In 2015, we initiated
a multi-year programme to improve our online
support for developers and engineers who use
ARM technology in their products. In Q4 2015,
welaunched the developer.arm.com website,
andmore services will be introduced in 2016.
Each year we have improved on our overall

performance score and our percentile performance
in relation to the semiconductor industry peers.
In 2015 we were included in the European Index
of the DJSI for the first time as our sustainability
programme across the whole business was
recognised as being aligned with best practices in
theindustry, and in some cases leading the way.
Commitment
Financials
33
The future opportunity

Our corporate responsibility programme will
continue to improve, and we are embarking on new
programmes designed to improve our performance
across areas such as supply chain management,
environment and impact reporting. We have set
ourselves a DJSI performance target score of 85%
for 2020.
Absolute company score
Since 2012, we have also increased our cash

contributions for the corporate responsibility
programme from 0.13% of pre-tax profit to 0.50% in
2015. This is supplemented by employee volunteering
time contributions, in-kind contributions, pro-bono
support and leveraged contributions through
partnerships and industry sector collaborations.
*ARM entered the Dow Jones Sustainability Index (DJSI) in 2012
11* 0
12
53
13
61
14
69
2015
74
2020 Target
85
Percentile ranking of company

12
57
13
68
14
76
2015
76
Contribution to the CR programme

as percentage of pre-tax profit (%)
12
0.13
13
14
2015
0.44
0.38
0.50
Improving care in
rural communities
ARMs employees are recognised and rewarded

for how they work together, how they drive
innovationandhow they support our customers.
Khushi Baby uses a mobile app for community health workers

that interfaces with a digital necklace worn by patients.
Health workers can scan a patients chip, without needing
connectivity to a central database, and can read, act upon,
andupdate the health record.
23/02/2016 17:36
23/02/2016 17:36
HDISU?
Overview
Strategy
Performance
Commitment
57
Financials
Our marketplace
Where the market is now
The semiconductor industry develops
the chips that manage all of the worlds
electronic devices. PCs, mobile phones
and even modern washing machines
have some form ofchip providing their
intelligence. Each generation of chip is
typically smarter than its predecessor,
enabling more capable and more
efficient consumer and embedded
electronic products.
ARMv8-A
Next generation
phones will be
both aware of
their location and
context (i.e. home,
office, school, etc.).
Around 50% of
smartphones sold
in 2015 contained
an ARMv8-A based
processor.
Faster connectivity
and reduced
latency will enable
new services.
ARM is the worlds leading

semiconductor intellectual
property (IP) supplier.
Thetechnology we design is
atthe heart of many of the
digitalelectronic products
soldinthe world.
We license our technology to a network of multiple
Partners, mainly leading semiconductor companies.
Licensees pay upfront fees to gain access to our
technology. They then incorporate our designs
alongside their own technology to create smart,
energy-efficient chips. ARM receives a royalty on
every chip sold that uses one of our technology
designs. Typically, our royalty is based on the price
ofthe chip.
Each ARM design is suitable for a wide range of end
applications and can be re-used in different chip
families addressing multiple markets. Each new chip
family generates a new stream of royalties. An ARM
design may be used in many different chips and may
ship for over 25 years.
What we need to execute

our business model
People and expertise
We are committed to hiring and
developing some of the most innovative
and imaginative engineers who, together
with supporting teams, can develop and
deploy ARMs next generation products
and services
R&D investment
In 2015, we invested 215 million in R&D
(normalised) to broaden and extend
our product portfolio, and another
74 million was invested in acquisitions
to accelerate product development
and create new revenue streams for
adjacent markets
Technology collaboration
ARM works closely with other
companies in the semiconductor industry
to share knowledge, align roadmaps and
to develop compatible technologies
We have built and invested in this
unique ecosystem to ensure our mutual
customers continue to build more
effective products. This helps ensure that
ARMs technologies are suitable for chips
going into future consumer electronics
and enterprise equipment
Supply chain
In 2015, ARM spent about 150 million
on goods and services essential to our
business operations. These were mainly
costs related to essential business
travel, property management, legal
and accounting fees, and IT support
and services
Strong financials
ARM had normalised cash generation
of 361 million last year. A proportion
of this cash is used to fund our business
operations to ensure we invest to secure
future profits andlong-term value
for shareholders
04_Business_Model_22_25_v61.indd 24
Some companies specialise in designing the chip; whilst

some companies, such as ARM, specialise in developing
critical intellectual property (IP) components within
the design; others in building the tools needed to
manufacture the chips; others in the chip fabrication;
and others in developing software, such as operating
systems and apps.
As silicon chip designs become more complex it

is expected that the semiconductor industry will
continue to license semiconductor IP. As the global
leader, ARM is well-positioned to benefit from
this trend.
The market in 2015
In 2015, approximately 750 billion silicon chips were
manufactured.* Of these, some 47 billion contained
a processor. The processor is the brain of the chip,
and controls not just the operation of the chip, but
also the operation of the product that the chip goes
into. ARM estimates that the total value of chips with
processors sold in 2015 was about $115 billion, and
that by 2020 the value of this market will have grown
to about $150 billion.
ARM processor designs were in around 15 billion
chips, a 32% market share. About 45% of the
ARM-based chips went into mobile devices. In recent
years we have also started to gain share in important
growth markets such as networking infrastructure
and embedded intelligence.
Over the next few pages we look at the main
markets for ARMs technology.
* World Semiconductor Trade Statistics, January 2016.
Our business model

Creating sustainable value
The semiconductor ecosystem

As consumer electronic products and industrial
equipment have become more sophisticated, the
chips that control them have become more complex
and more costly to develop. Over many years the
semiconductor industry has disaggregated into
specialist companies that focus on each stage in the
creation, design and manufacture of a silicon chip.
This allows each company to invest and innovate in
the area where they can add the most expertise in
the value chain.
ARM works closely with all the leading companies

within the semiconductor ecosystem to ensure that
its technology works well with other companies
products, that silicon chip designers can quickly
build low-power and high-performance chips, and
that OEMs can create complex programmes using
acombination of third-party and in-house operating
systems and applications.
The business model identifies

the resources and relationships
critical to its success and the
value the business creates
24
Overview of the semiconductor market

Semiconductors, or silicon chips, are the electronic
controllers that manage many of the digital devices
that we use every day. Computers, mobile phones,
televisions, washing machines and cars can contain
many silicon chips. Also, many enterprise and
industrial applications, from sensors to servers, are
made smarter and more efficient by silicon chips.
3,975
Full time employees
215m
Invested in research
and development
(normalised)
9,000
Engineers and industry

experts attended ARMs
annual technology
conferences and symposia
150m
23/02/2016 17:27
Overview
How we create value

for our Partners
How ARM creates value

for our shareholders
How ARM creates value

for the long term
The value we create
ARM employs engineers to develop advanced processors,

physical IP, tools and software that we mainly license to
companies developing chips for consumer electronics
and enterprise equipment. We continue to invest in
R&D programmes, hiring more engineers and investing
in productivity tools as future generations of technology
become increasingly complex.
ARM recovers its costs from each technologys licence

revenues. Over the medium term, we expect ARMs revenues
and profits to grow as our Partners design our technology into
a broader range of end markets.
ARM reinvests back into the business, hiring more engineers

to develop new technology that will enable us to create
value for the long term. ARMs technology can be re-used
byour customers in many different products and end
markets; these will generate royalty revenues for years to
come. Technology that we started licensing more than 25
years ago is still being deployed in new chips and generating
royalty revenues today.
Chips shipped
It is more cost-effective for our Partners to license the

technology from us. The design of a processor or a library
of physical IP requires a large amount of R&D investment
and expertise. In addition, the creation and development of
an ecosystem of software and tools companies that support
ARMs technology and its licensees would be difficult
to reproduce.
Performance
Commitment
23/02/2016 17:27
Our customers include the worlds largest semiconductor

companies and their regular royalty payments have become a
reliable cash flow. We have relatively little capital expenditure,
or other cash-intensive purchases, and hence our normalised
profits after tax convert to normalised cash generated. So the
more profits we earn the more cash we generate.
Strategy
Financials
25
ARMs Partners shipped around 15 billion

ARM-based chips in 2015. These smart
chips help to make consumer electronics
easier to use and more fun, and
enterprise equipment more capable and
energy-efficient
Licence/royalty income
Every licence signed represents the
opportunity for future royalty streams
which can extend to over 25 years
With ARM designing the technology once and licensing many

times, ARM is able to cover its own R&D costs and also
reduce the cost for each semiconductor company. ARMs
Partners are then able to invest in the complementary
technologies that go into a System-on-Chip. This leads to
more choice in digital electronics for OEMs and consumers.
Revenue
R&D
activity
Product
development
Multiple
applications
across a range
of markets
23 years
34 years
+25 years
ARMs US dollar revenues grew 15% in

2015, as our existing customers adopted
and deployed our latest technology in their
current and future product portfolios, and
as 41 new companies chose to adopt ARM
technology for the first time
Patents
ARM filed an additional 242 patents in
2015, taking the total number of patents
owned or pending to more than 4,500.
These patents help protect ARMs
technology globally and help secure our
future revenue streams
Profits
With our revenues growing faster than
our reinvestments in R&D, we are able
to deliver increasing profits over the
long term
Spent with suppliers
15bn
ARM-based chips
1,348
Cumulative licences signed
$1,489m
Revenue in 2015
4,500
Patents owned or pending
511m
415m
Normalised profits before tax
IFRS profits before tax
361m
Normalised net
cash generated
Shareholder returns
Investment
phase
Upfront
licence fee
23/02/2016 17:37
04_Business_Model_22_25_v61.indd 25
Royalty
revenue
Royalty
revenue continues
In 2015, ARM bought back 9.0 million

shares at a value of 92.2 million.
In addition, the proposed full year
dividend is 8.78 pence, a 25% increase
200m
Cash returned to shareholders in 2015
23/02/2016 17:37
58
radley yeldar.
A final view...
So what does this exercise tell us about where UK reporting
stands today?
Firstly, it underlines if any such emphasis was needed
the value and relative rarity of a coherent, transparent
report; one that tells a connected and consistent story from
front to back instead of providing investors with a series of
fractured, disconnected statements. In our experience, the
only way that such an outcome can be achieved is through
commitment from all those involved in the process. From
the boardroom to those responsible for generating first draft
content, the entire client team must buy into the approach.
The best practitioners provide a narrative that clearly sets
out the long-term investment case for the business. They
highlight the years progress against the backdrop of its
market environment. They outline the business model in
easily-understood detail. Theyre transparent about risk and
demonstrate how governance contributes to performance.
And they do all this by teaming thoughtful design with
well-written copy.
In short, they communicate.
This is at the heart of the better reports. And its the

cornerstone of a more integrated approach to reporting.
Weve said it before and well say it again integrated
reporting is no more and no less than good reporting.
Joined-up thinking and transparency (good communication,
in other words) will always outweigh fudge and bluster,
misrepresentation and obfuscation. Pity the investors,
analysts and other stakeholders faced with the annual
challenge of trying to scythe their way through the complex
jargon and convoluted language, poor structure and mixedup messaging of many reports. The sad truth is that theres
usually a kernel of fact and knowledge in there somewhere.
The difficulty is in finding it and investors cant be blamed
ifthey give up and look for opportunities elsewhere.
So lack of basic communication the bland leading the
bland is the single most obvious failing we came across
in the HDISU research. Sometimes, its almost as if the
company is doing all it can to prevent you finding out
what itdoes, how it does it and what degree of success
itsenjoyed in the previous 12 months. But surely this
cantbethe case... can it?
Interestingly, while some UK reporters struggle to
communicate, despite the best intentions of the IIRC,
inEurope the situation is rather different. More and more
companies across the Channel are stepping up to the
mark. Many are adopting the integrated approach and
alsofullyembracing digital and the opportunities it creates.
We recognise that to some extent this trend is encouraged
by the regulatory environment in Europe, but the alarm bells
should nevertheless be ringing in the UK. Have we become
complacent, after leading the world for so many years in
terms of communication and creativity?
HDISU?
...and a plea
So what do we hope to see in 2017? Its clear from the FRC
that many companies need to work harder to explain how
their business models add value beyond financial gain, and
we do expect this to be addressed. It would also be good
if companies recognised the importance of Brexit and
increasing concerns over executive pay, and demonstrated
how business models and governance processes are moving
to take account of what could be seismic shifts in the
economic and political landscape.
In general terms, were hopeful that FTSE 100 companies
collectively rise to the challenge of explaining their long-term
sustainability and using coherent messaging to run as a
thread through their reports. Hopeful is the key word here
we suspect that while some will forge ahead, an increasing
number will be left behind.
In short, were looking for annual reports to steadily evolve

tobecome more:
Coherent: telling a consistent story through
compellingcontent
Transparent: being clear and showing how performance
versus strategy is measured
Integrated: with sections linked together, creating a total
overview including sustainability issues
Balanced: sharing the bad news as well as the good
How can companies achieve this? By putting together
a great internal team that works together to identify key
messages and gain buy-in at an early stage. And by using
every appropriate comms tool, from stunning design to
brilliant writing, to make sure that the story is told with
energy, relevance, style and consistency.
59
60
radley yeldar.
Contributors
Brett Simnett
David Ritsema
Jo Wade
Lucy Dixon
Director of Investor
Engagement
Investor Engagement
Consultant
Investor Engagement
Consultant
Investor Engagement
Consultant
Sean Bride
Adam Mills
Creative Director
Danni Finlayson
Designer
Rob Lamb
Design Director
Investor Engagement
Consultant
InvestorEngagement
HDISU?
Now its your turn

Weve raised a number of issues in this report. But while
we have many of the questions, we dont have all of the
answers. These are matters that affect all companies, both
in the FTSE 100 index and beyond, as well as all those who
help produce annual reports. Designers, project managers,
client directors, IR and comms teams, copywriters and many
others wed like your take on the state of reporting.
Our new reporting hub is live at ry.com/HDISU. Over the
coming months, well be adding our own thoughts and
the opinions of others to the hub. Please let us have your
perspective, on whatever issue you choose whether weve
raised it in HDISU or not. Together, we can make progress
and lift the standards of reporting in the UK.
61
Were RY, a creative consultancy.

We create standout communications
thatmake a real impact.
We help multinationals, startups andprivate
companies, as well as public bodies and even
whole countries. Weve been doing it for
over 30 years now, determined to stand out
ourselves as the most inspirational agency
toworkwith,and for.
ry.com/HDISU
24 Charlotte Road
London EC2A 3PB
T +44 (0)20 7033 0700
@RadleyYeldar
hello@ry.com
ry.com

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100%

How does it stack up? 2016

How does it stack up?

The job of an annual report is to present the investment

As were a creative consultancy, we use our skills and

The criteria themselves are designed to reflect current

Explaining and measuring

What we have seen

Three of the best

Understanding the business and context

Annual report and financial statements 2015

Antofagasta plc Annual report and financial statements 2015

Theres also a good section on the resources and

The Group cannot run its business in isolation. The business

More information on key inputs is included

Most of the copper and molybdenum sales

Structure of the Groups sales contracts

The prices realised by the Group during

A significant proportion of the Groups

The Groups marketing

The Group has an open-door policy that

The number of contractors working for

Contractors are vitally

The minimum wage paid by Antofagasta

Over 80% of the Groups mining sales are

Across the industry neither copper

More on Employees on pages 61 to 63.

The Group employs approximately 5,300

Antofagasta plc Annual report and financial statements 2015

Detailed discussion of key relationships

The majority of sales are to industrial

Similarly, the Groups molybdenum

The Group undertakes an annual survey

Relationships with trade unions are based

The Group forms long-term partnerships with some suppliers,

The Group currently conducts business

Creating value through

Investment versus income

Revenues, however, depend on commodity prices. These tend to be cyclical,

Mining is a long-term business and timescales can run into

Ongoing value chain

Sustainable development is an integral and innovative

Sustainability drives business success and without it the Group

Antofagasta plc Annual report and financial statements 2015

Plant and equipment

Effective project evaluation and design is critical

The Group integrates sustainability criteria into design

More on page 49.

More on pages 49 and 50.

More on key inputs and

More on pages 50 and 51.

Once a project has been approved by the Board,

To secure the future of the business in the long

Antofagasta plc Annual report and financial statements 2015

Understanding the business and context

Clear purpose of business

Provident Financial plc

Provident Financial plc

Vanquis Bank is the leading supplier of credit cards

Non-standard credit cards

The group has three

UK profit before tax

Range of credit limits

Provident offers home credit loans, typically