Annual Report and Accounts 2015 Inside This Year’S Integrated Annual Report and Accounts 2015
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2015 Annual ReportAnnual Accounts and The Crown Estate Annual Report and Accounts 2015 Inside this year’s integrated Annual Report and Accounts 2015 Overview Building an integrated The Crown Estate is an Highlights of our performance 03 approach independent commercial Chairman’s statement 04 Chief Executive’s review 06 Three years ago we began to work towards a business, created by Act new vision, which would integrate sustainability Our business at a glance 10 across our business. In order to communicate of Parliament. this we produced our first integrated report Our role is to make sure that the land and What we’ve been doing and set out a three-year plan to improve our property we invest in and manage are Review of activities 12 approach. sustainably worked, developed and enjoyed to deliver the best value over the long term. At the In the first year we outlined our business heart of how we work is an astute, considered, Our markets model and identified the material issues that collaborative approach that helps us create Our markets 34 impact our performance. In the second year success for our business and for those we looked more deeply at our markets and we work with. How we create value improved our understanding of the resources and relationships that sustain our business Business model 38 Our vision is to be a progressive commercial and contribute to our success. In this, our business creating significant value beyond Resources and relationships 40 third integrated report, we have focused on financial return. We will work with partners What is Total Contribution? 42 developing robust measurement indicators and stakeholders to grow our business, Strategic objectives 44 and exploring the broader impact of what we outperforming the market whilst delivering do and how we can inspire change. Key performance indicators 46 sustainable long-term returns. In everything we do, we are guided by our values – Material issues 48 What’s next commercialism, integrity and stewardship. Although we have come a long way, the three About our performance year plan is not the end. It has helped us to Finance Director’s review 50 see how much more we can do to improve our business and become more successful. Managing the business Therefore going forward we intend to: Governance 56 • Demonstrate how our conscious Board Members 58 commercialism leads to a positive impact Management Board 60 for us, our partners, customers and other stakeholders. Governance report 61 Principal corporate risks 78 • Continue to explore how we can measure and opportunities our Total Contribution to inform our decision-making. Statement of The Crown Estate 81 Commissioners’ and Accounting An integrated report is aligned with the Officer’s responsibilities Companies Act 2006 (Strategic report and Remuneration report 82 Directors report Regulations 2013). In the opinion of the Audit Committee, our The detailed financials 2015 Integrated Annual Report and Accounts The Certificate and Report of the 88 is in alignment with the International Integrated Comptroller and Auditor General to Reporting Council (IIRC) Framework. We will the Houses of Parliament continue to evolve our approach to integrated Consolidated statements of 89 reporting. comprehensive income Consolidated balance sheet 90 Consolidated cash flow statement 91 Consolidated statement of changes in 92 capital and reserves Notes to the consolidated 93 financial statements To The Queen’s Most Excellent Majesty Ten-year record (unaudited) 117 May it please Your Majesty, The Crown Estate Commissioners take leave to submit this their fifty-ninth Report and Accounts, in Glossary 118 obedience to sections 2(1) and 2(5) of the Crown Estate Act 1961. Integrated reporting at The Crown Estate http://www.thecrownestate.co.uk/our-business/integrated-reporting/ The Crown Estate’s Total Contribution http://www.thecrownestate.co.uk/our-business/how-we-measure-value/ PwC has provided limited assurance against ISAE 3000 and ISAE 3410 standards for selected key data in 2015. Where you see the A in this report it indicates data has been externally assured. For the full limited International Integrated Reporting Council assurance opinion and our reporting criteria see www.theiirc.org http://www.thecrownestate.co.uk/pwc-statement Overview At the heart of how we work is an astute, considered, collaborative approach that helps us create success for our business and those we work with. We call this conscious commercialism. This is our challenge to ourselves and our commitment to our partners, customers and the community. It challenges us to be enterprising, creating opportunities, finding new and better ways of building success and inspiring change. The Crown Estate Annual Report and Accounts 2015 1 Our integrated approach to business… O ur W pe e ac op o tive le ur c ly m d ore a a eve ac na n lo tivi ge d e pm tie o k g l en s o ur an cia , t f: p n t r er nd an in o o a l la . d v rt w s th m ra UK p e fo s om tu e ro st lio - e e c ul th p m h c rc s ic d er e th r u e gr n t n ro o o d a u y t u u s lu , ro m , g w s e c d a a a h a o l r in n d s c t la e n s r O s ra h k b a e o u ic r a g t s u e t a e e , r r a h p s s u n w m s l d e e o t d io n th n u r a n l a r a o f t p r a f y o . p t l rt tr t e u a o s s o g t c r Working together i p re o t i n c a s f i y e fo m o s p h r , d li n o a p e e n t s iv a a r r d e t ’ t s d e n i s r c r n d e o o e p l u n h r r a a e s m a s e h l o r e r a d l i c r p a o a ia f e s o t s O a t r e c n b s p i e e h t , r s d a f o s i l w to create value s s v s a y a h e i s r h d e r o O h r e r r u d e e c n v w P O a u a w o o e r r k b i n n Making e g n e c Payments e t a Our business model shows the flow fi w p to the Treasury t i f t a positive Our annual net r a o o l m revenue profit f r o is paid to the k r c o t Treasury for s impact h m between the resources and relationships the benefit e p O b of the nation. e u , t s i y t i i t n i v u e l e i e s b a s u y a d Financial . r l t t t i v l n o we draw upon i i resources t n a a a c e n The proceeds la t o v - t s o o a m n raised from v m u g e t t u s i e i n selling property m e g u d n u r k a a are reinvested in r e e o g n e a d m s n r the portfolios. t e t m r u e c - i u c r n r p m v g o o i R r f e t e i e n d c n t a l s e o a W t- o t m u o h l a r d t a e l o i h m a e v l h w e b n W i i g s te k a t u t e s s a e y s s a w s s , i in d in e t s n . ra t d n t iv s w i o e g yo te t e s v a e a c d e o e r je n a c p lo v e b t b a r a t p a r k n o e p im C o e s u i a lu lo c m u n ta is nd e e on r c a l in c te fo b p g se W d - r le rin t ll n ng e t c h pr a lo m o ip e op o b al va er to t or ly lu ty us ro by e wi c w s of th . ell the ing es pr tate ope . What we draw on rty, to create value Our resources and relationships are increased, decreased and transformed through our activity A strategy 1 2 3 4 5 6 Actively Secure access Create a great Deliver Deliver value To be to maximise manage to capital place to work customer beyond purely respected for our assets through with a high service financial return our approach performance selective use performance excellence and delivering of strategic culture conscious Our strategic objectives guide us in partnerships commercialism setting and assessing business priorities against our Vision Measuring our success £285.1 million Our key performance indicators show our progress each year against our strategic objectives Net revenue profit +6.7% compared to 2013/14 Key factors affecting our performance Our material issues are the factors we identify that could potentially influence our ability to deliver our strategic objectives To read about our integrated approach to business See pages 38–49 2 The Crown Estate Annual Report and Accounts 2015 …achieves great results Overview Highlights of our performance Net revenue profit The Crown Estate total return up 6.7 per cent compared to Outperforming our target 18.4 per cent £267.1 million in 2014 (IPD bespoke benchmark) £285.1 million 20.8% +6.7% Carbon intensity improvement Capital value up 16.1 per cent compared +4% to £9.9 billion in 2014 Renewable energy £11.5 billion Offshore operational capacity to date +16.1% 4.6 GW Property value up 16.7 per cent compared Building Public Trust Award to £9.4 billion in 2014 for sustainability reporting (including share of joint venture properties and other property investments) 2014 £11 billion +16.7% The Crown Estate Annual Report and Accounts 2015 3 Another record-breaking year Chairman’s statement The bar has been raised again by this year’s results.