IMPORTANT NOTICE

THIS DOCUMENT IS AVAILABLE ONLY TO INVESTORS WHO ARE (1) QUALIFIED INSTITUTIONAL BUYERS (“QIBS”) AS DEFINED IN RULE 144A UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “US SECURITIES ACT”), OR (2) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE US SECURITIES ACT (“REGULATION S”). IMPORTANT: You must read the following before continuing. The following applies to the document following this page (the “ Document ”), and you are therefore advised to read this notice carefully before reading, accessing or making any other use of the Document. In accessing the Document, you agree to be bound by the following terms and conditions, including any modifications to them any time you receive any information from Countryside Properties plc (the “ Company ”), J.P. Morgan Securities plc, which conducts its investment banking activities as J.P. Morgan Cazenove (“ J.P. Morgan Cazenove ”), Barclays Bank PLC (“ Barclays ”), Numis Securities Limited (“ Numis ”) and Peel Hunt LLP (“ Peel Hunt ”) (J.P. Morgan Cazenove, Barclays, Numis and Peel Hunt each a “ Bank ” and collectively, the “ Banks ”) as a result of such access. IF YOU ARE NOT THE INTENDED RECIPIENT OF THIS ELECTRONIC TRANSMISSION, PLEASE DO NOT DISTRIBUTE OR COPY THE INFORMATION CONTAINED IN THIS ELECTRONIC TRANSMISSION, BUT INSTEAD DELETE AND DESTROY ALL COPIES OF THIS ELECTRONIC TRANSMISSION. NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED DIRECTLY OR INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF SUCH SECURITIES IN THE UNITED STATES. THE FOLLOWING DOCUMENT IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND YOU ARE NOT AUTHORISED TO, AND YOU MAY NOT, FORWARD OR DELIVER THE DOCUMENT, ELECTRONICALLY OR OTHERWISE, TO ANY PERSON OR REPRODUCE THE DOCUMENT IN ANY MANNER WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE FOLLOWING DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE US SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. IF YOU HAVE GAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE FOREGOING RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO PURCHASE ANY OF THE SECURITIES DESCRIBED THEREIN. THE FOLLOWING DOCUMENT IS ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (“MEMBER STATES”) WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC AS AMENDED (INCLUDING AMENDMENTS BY DIRECTIVE 2010/73/EU TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE)) (“QUALIFIED INVESTORS”). In addition, this electronic transmission and the Document is only directed at, and being distributed: (A) in the United Kingdom, to persons: (i) who have professional experience in matters relating to investments and who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”) or who fall within Article 49 of the Order; and (ii) are “qualified investors” as defined in section 86 of the Financial Services and Markets Act 2000, as amended; and (B) any other persons to whom it may otherwise be lawfully communicated (together all such persons being referred to as “relevant persons”). This electronic transmission and the Document must not be acted on or relied on: (a) in the United Kingdom, by persons who are not relevant persons; and (b) in any Member State other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which the Document relates is available only to: (1) in the United Kingdom, relevant persons; and (2) in any Member State other than the United Kingdom, Qualified Investors and other persons who are permitted to subscribe for the Ordinary Shares described therein pursuant to an exemption from the Prospectus Directive and other applicable legislation, and will only be engaged in with such persons. Confirmation of your Representation: In order to be eligible to view the Document or make an investment decision with respect to the securities, investors: (1) must be (a) QIBs; or (b) outside the United States transacting in an offshore transaction (in accordance with Regulation S); (2) if located in the United Kingdom, must be relevant persons; and (3) if located in any Member State other than the United Kingdom, must be Qualified Investors. By accepting this e-mail and accessing the Document, you shall be deemed to have represented to the Company and each of the Banks that: (1) you have understood and agree to the terms set out herein; (2) you and any customers you represent are (a) QIBs; or (b) outside the United States and the e-mail address to which this e-mail and the Document has been delivered is not located in the United States; (3) if you are located in the United Kingdom, you and any customers you represent are relevant persons; (4) if you are located in any Member State other than the United Kingdom, you and any customers you represent are Qualified Investors; (5) you consent to delivery of the Document and any amendments or supplements thereto by electronic transmission; and (6) you acknowledge that this electronic transmission and the Document is confidential and intended only for you and you will not transmit the Document (or any copy of it or part thereof) or disclose, whether orally or in writing, any of its contents to any other person. You are reminded that the Document has been delivered to you or accessed by you on the basis that you are a person into whose possession it may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver or disclose the contents of the Document to any other person. The materials relating to the offering described in the Document do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. No action has been or will be taken in any jurisdiction by the Company or any of the Banks that would, or is intended to, permit a public offering of the securities described in the Document, or possession or distribution of a prospectus (in preliminary, proof or final form) or any other offering or publicity material relating to those securities, in any country or jurisdiction where action for that purpose is required. If a jurisdiction requires that the offering be made by a licensed broker or dealer and the Banks or any of their respective affiliates is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be made by the Banks or such affiliate on behalf of the Company in such jurisdiction. The Document has been sent to you or accessed by you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently, none of the Company, any of the Banks or any of their respective affiliates, directors, officers, employees, representatives and agents or any other person controlling the Company, any of the Banks or any of their respective affiliates accepts any liability or responsibility whatsoever, whether arising in tort, contract or otherwise which they might have in respect of this electronic transmission, the Document or the contents thereof, or in respect of any difference between the document distributed to you in electronic format and the hard copy version that will be provided to you at a later date or is available to you on request from the Company or any Bank. Please ensure that your copy is complete. If you receive the Document by e-mail, you should not reply to the e-mail. Any reply e-mail communications, including those you generate by using the “Reply” function on your e-mail software, will be ignored or rejected. If you receive the Document by e-mail, your use of this e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature. February 2016

166801 Project Acre - Cover (15mm Spine).indd 1-3 30/01/2016 01:30 166801 Project Acre - Cover (15mm Spine).indd 4-6 30/01/2016 01:30 This Prospectus (the “Prospectus”) comprises a prospectus relating to Countryside Properties plc (the “Company”) prepared in accordance with the Prospectus Rules of the Financial Conduct Authority (the “FCA”) made under section 73A of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”). The Prospectus has been filed with the FCA and has been made available to the public in accordance with section 3.2 of the Prospectus Rules. Application will be made to the FCA in its capacity as competent authority under the FSMA (the “UK Listing Authority”) for all of the ordinary shares of the Company (the “Ordinary Shares”) issued and to be issued in connection with the offer of certain Ordinary Shares to certain institutional and other investors (the “Global Offer”), to be admitted to the premium segment of the Official List of the FCA (the “Official List”) and to trading on the main market for listed securities of the London Stock Exchange plc (the “London Stock Exchange”) (together, “Admission”). Admission to trading on the London Stock Exchange’s main market for listed securities constitutes admission to trading on a regulated market. In the Global Offer, up to 57,777,778 new Ordinary Shares (the “New Shares”) are being made available by the Company and up to 290,227,273 existing Ordinary Shares (the “Sale Shares” and, together with the New Shares, the “Shares”) are being made available by the Selling Shareholders. Conditional dealings in the Ordinary Shares are expected to commence on the London Stock Exchange at 8.00 a.m. (London time) on 12 February 2016. It is expected that Admission will become effective, and that unconditional dealings in the Ordinary Shares will commence, at 8.00 a.m. (London time) on 17 February 2016. All dealings in the Ordinary Shares before the commencement of unconditional dealings will be of no effect if Admission does not take place and such dealings will be on a “when issued” basis at the sole risk of the parties concerned. No application has been or is currently intended to be made for the Ordinary Shares to be admitted to listing or trading on any other exchange. The directors of the Company, whose names appear on page 45 of this Prospectus (the “Directors”), and the Company accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information. Prospective investors should read the entire Prospectus and, in particular, prospective investors are advised to examine all the risks that might be relevant in connection with an investment in the Shares. See Part II: “Risk Factors” for a discussion of certain risks and other factors that should be considered prior to any investment in the Shares.

COUNTRYSIDE PROPERTIES PLC (incorporated under the Companies Act 2006 and registered in England and Wales with registered number 9878920) Prospectus Global Offer of Shares of £1 each at an Offer Price expected to be between 225 pence and 275 pence per Share and admission to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange Sole Sponsor, Joint Global Co-ordinator and Joint Bookrunner J.P. Morgan Cazenove Joint Global Co-ordinators and Joint Bookrunners Barclays Numis Joint Bookrunner Peel Hunt Issued and fully paid Ordinary Share capital immediately following Admission Number Nominal Value 450,000,000 £450,000,000

The Company is offering sufficient New Shares to raise gross proceeds of approximately £130 million in the Global Offer and the Selling Shareholders are offering an aggregate of between 54,722,222 and 290,227,273 Existing Shares in the Global Offer as described in Part XVII: “The Global Offer”. The Company will not receive any of the proceeds from the sale of the Existing Shares, all of which will be received by the Selling Shareholders. The Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be established in a book-building process and, therefore, the Offer Price Range, the Offer Size Range, the New Share Offer Size Range and the Sale Share Offer Size Range are indicative only and may change during the course of the Global Offer. The Offer Price may be set within, above or below the Offer Price Range, the Offer Size may be set within, above or below the Offer Size Range, the New Share Offer Size may be set within, above or below the New Share Offer Size Range and the Sale Share Offer Size may be set within, above or below the Sale Share Offer Size Range. A number of factors will be considered in determining the Offer Price, the Offer Size, the New Share Offer Size, the Sale Share Offer Size and the basis of allocation to investors, including the level and nature of demand for the Shares during the book-building process, the level of demand in the Intermediaries Offer, prevailing market conditions and the objective of establishing an orderly after-market in the Shares. A pricing statement containing, among other things, the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size (the “Pricing Statement”) is expected to be published on or about 12 February 2016. If the Offer Price were to be set above the Offer Price Range and/or the Offer Size were to be set outside the Offer Size Range and/or the New Share Offer Size were to be set below the New Share Offer Size Range and/or the Sale Share Offer Size were to be set outside the Sale Share Offer Size Range, an announcement would be made via a Regulatory Information Service and prospective investors would have a statutory right to withdraw their offer to purchase or subscribe for Shares pursuant to section 87Q of the FSMA. The arrangements for withdrawing offers to purchase or subscribe for Shares would be made clear in the announcement. Further details of how the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be determined are contained in Part XVII: “The Global Offer” of this document. The Company consents to the use of this Prospectus by the Intermediaries in connection with the Intermediaries Offer to persons located in the United Kingdom, the Channel Islands and the Isle of Man: (i) in respect of Intermediaries who are appointed prior to the date of this Prospectus, from the date of this Prospectus; and (ii) in respect of Intermediaries who are appointed after the date of this Prospectus, from the date on which they are approved to participate in the Intermediaries Offer, in each case, until the closing of the Intermediaries Offer. Any Intermediary that uses this Prospectus must state on its website that it uses this Prospectus in accordance with the Company’s consent and the conditions attached thereto. Intermediaries are required to provide the terms and conditions of the Intermediaries Offer to any prospective investor who has expressed an interest in participating in the Intermediaries Offer to such Intermediary. Any application made by investors to any Intermediary is subject to the terms and conditions imposed by each Intermediary.

J.P. Morgan Securities plc (which conducts its investment banking activities as J.P. Morgan Cazenove) (“J.P. Morgan Cazenove”) has been appointed as sole Sponsor, Joint Global Co-ordinator and Joint Bookrunner; Barclays Bank PLC (“Barclays”) and Numis Securities Limited (“Numis”) have been appointed as Joint Global Co-ordinators and Joint Bookrunners; and Peel Hunt LLP (“Peel Hunt”) has been appointed as Joint Bookrunner. Each of J.P. Morgan Cazenove, Barclays, Numis and Peel Hunt (collectively, the “Underwriters”) is acting exclusively for the Company and no one else in connection with the Global Offer. They will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Global Offer and will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to their respective clients nor for giving advice in relation to the Global Offer or any transaction or arrangement referred to in this Prospectus.

The Underwriters and any of their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services for, the Company and the Selling Shareholders for which they would have received customary fees.

In connection with the Global Offer, Barclays Capital Securities Limited as stabilising manager (the “Stabilising Manager”), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Ordinary Shares or effect other transactions with a view to supporting the market price of the Ordinary Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Ordinary Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Ordinary Shares above the Offer Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Global Offer.

In connection with the Global Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Ordinary Shares effected by it during the stabilising period, the Over-allotment Shareholder has granted to it the Over-allotment Option, pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer (the “Over-allotment Shares”) at the Offer Price. The Over-allotment Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Ordinary Shares, including for all dividends and other distributions declared, made or paid on the Ordinary Shares, will be purchased on the same terms and conditions as the Ordinary Shares being issued or sold in the Global Offer and will form a single class for all purposes with the other Ordinary Shares.

Recipients of this Prospectus are authorised solely to use it for the purpose of considering the subscription for or acquisition of the Shares and may not reproduce or distribute this Prospectus, in whole or in part, and may not disclose any of the contents of this Prospectus or use any information herein for any purpose other than considering an investment in the Shares. Such recipients of this Prospectus agree to the foregoing by accepting delivery of this Prospectus.

2 The Shares are subject to selling and transfer restrictions in certain jurisdictions. Prospective subscribers or purchasers should read the restrictions contained in paragraph 15 of Part XVII: “The Global Offer—Selling and transfer restrictions”. Each subscriber for, or purchaser of, the Shares will be deemed to have made the relevant representations made therein.

This Prospectus does not constitute an offer to sell or an invitation to subscribe for, or the solicitation of an offer to buy or to subscribe for, any Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Sponsor or any of the Underwriters by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Sponsor or the Underwriters accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this Prospectus, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Group, the Shares or the Global Offer and nothing in this Prospectus is, or shall be relied upon as, a promise or representation in this respect, whether or not to the past or future. Each of the Sponsor and the Underwriters accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Prospectus or any such statement.

The Shares are being offered and sold outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933 (the “Securities Act”), (“Regulation S”), and within the United States to persons reasonably believed to be “qualified institutional buyers” as defined in and in reliance on Rule 144A under the Securities Act (“Rule 144A”) or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Prospective purchasers are hereby notified that sellers of the Shares may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of these and certain further restrictions on offers, sales and transfers of the Shares and the distribution of this Prospectus, see paragraph 15 of Part XVII: “The Global Offer—Selling and transfer restrictions”.

The Shares have not been, and will not be, registered under the Securities Act. None of the U.S. Securities and Exchange Commission, any other U.S. federal or state securities commission or any U.S. regulatory authority has approved or disapproved of the Shares nor have such authorities reviewed, passed upon or endorsed the merits of the Global Offer or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence. There will be no public offering of the Shares in the United States.

Prior to making any decision as to whether to subscribe for or purchase Shares, prospective investors should read this Prospectus in its entirety and should not just rely on key information or information summarised within it. In making an investment decision, prospective investors must rely upon his or her own examination, analysis and enquiries of the Company and the terms of this Prospectus, including the merits and risks involved.

The distribution of this Prospectus and the offer of the Shares in certain jurisdictions may be restricted by law. Apart from in the UK, the Channel Islands and the Isle of Man, no action has been or will be taken by the Company, the Selling Shareholders or the Underwriters to permit a public offering of the Shares or to permit the possession, issue or distribution of this Prospectus in any jurisdiction where action for that purpose may be required. Accordingly, neither this Prospectus nor any advertisement nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, no actions have been taken to allow a public offering of the Shares under the applicable securities laws of any jurisdiction, including Australia, Canada, Japan or South Africa. Subject to certain exceptions, the Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen of any jurisdiction, including Australia, Canada, Japan or South Africa.

Dated 1 February 2016.

3 TABLE OF CONTENTS

Page PART I SUMMARY INFORMATION...... 5

PART II RISK FACTORS...... 24

PART III PRESENTATION OF INFORMATION ON THE GROUP...... 38

PART IV DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS ...... 45

PART V EXPECTED TIMETABLE OF PRINCIPAL EVENTS...... 47

PART VI GLOBAL OFFER STATISTICS ...... 48

PART VII USE OF PROCEEDS AND DIVIDEND POLICY...... 50

PART VIII MARKET OVERVIEW...... 51

PART IX INFORMATION ON THE GROUP...... 57

PART X DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE...... 78

PART XI SELECTED FINANCIAL AND OPERATING INFORMATION...... 84

PART XII OPERATING AND FINANCIAL REVIEW...... 89

PART XIII CAPITALISATION AND INDEBTEDNESS STATEMENT...... 112

PART XIV HISTORICAL FINANCIAL INFORMATION...... 114

PART XV UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 199

PART XVI TAXATION...... 204

PART XVII THE GLOBAL OFFER ...... 210

PART XVIII ADDITIONAL INFORMATION ...... 224

PART XIX DEFINITIONS...... 268

PART XX GLOSSARY...... 274

4 PART I

SUMMARY INFORMATION

Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections A to E (A.1 to E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of “not applicable”.

Section A – Introduction and warnings

Annexes and Element Disclosure requirement

A.1 Warning to investors This summary must be read as an introduction to this Prospectus and is provided to aid investors when considering whether to invest in the Shares, but is not a substitute for this Prospectus. Any decision to invest in the Shares should be based on consideration of this Prospectus as a whole. Following the implementation of the relevant provisions of the Prospectus Directive (Directive 2003/71/EC) in each Member State of the European Economic Area, no civil liability will attach to the persons responsible for this summary in any such Member State solely on the basis of this summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in the Shares. Where a claim relating to this Prospectus is brought before a court in a Member State of the European Economic Area, the plaintiff may, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating this Prospectus before the legal proceedings are initiated.

A.2 Consent for intermediaries The Company consents to the use of this Prospectus for subsequent resale or final placement of the Shares by the Intermediaries in connection with the Intermediaries Offer to persons located in the United Kingdom, the Channel Islands and the Isle of Man on the following terms: (i) in respect of Intermediaries who are appointed prior to the date of this Prospectus, from the date of this Prospectus; and (ii) in respect of Intermediaries who are appointed after the date of this Prospectus, from the date on which they are approved to participate in the Intermediaries Offer, in each case, until the closing of the Intermediaries Offer. Prospective investors interested in participating in the Intermediaries Offer should apply for Shares through the Intermediaries by following their relevant application procedures by no later than 10 February 2016.

5 Any Intermediary that uses this Prospectus must state on its website that it uses this Prospectus in accordance with the Company’s consent. Intermediaries are required to provide the terms and conditions of the Intermediaries Offer to any prospective investor who has expressed an interest in participating in the Intermediaries Offer to such Intermediary. Any applications made by prospective investors to any Intermediary are subject to the terms and conditions approved by each Intermediary.

Section B – Company and any guarantor

Annexes and Element Disclosure requirement

B.1 Legal and commercial name Countryside Properties plc.

B.2 Domicile and legal form of The Company is a public limited company, incorporated in the Company England and Wales with its registered office situated in England and Wales. The Company operates under the Companies Act.

B.3 Operations and principal The Group is a leading UK home builder and urban activities regeneration partner, operating in London and the South East of England, and with a presence in the North West of England through its Partnerships division. The Directors believe that the Group is one of the most effective Strategic Land developers and urban regeneration partners in the UK, with a total land bank of 26,213 plots as of 30 September 2015, 55.9 per cent. of which had planning permissions. The Group operates through two business divisions, Housebuilding and Partnerships.

The Housebuilding division develops medium to larger-scale sites, providing private and affordable housing on land owned or controlled by the Group, primarily around London and in the South East of England. The Housebuilding division operates under both the Countryside and Millgate brands. Millgate was acquired by the Group in February 2014 and was integrated into the Housebuilding division as its premium housebuilding brand in the Home Counties. In the year ended 30 September 2015, the Housebuilding division completed 653 homes, comprising 456 private and 192 affordable homes, with the remaining five built under design and build contracts. Its operations are supported by a land bank of 18,410 plots as of 30 September 2015.

In the year ended 30 September 2015, the Housebuilding division generated revenue (including the proportional contribution of associate and joint ventures) of £330.7 million, 53.7 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures).

The Partnerships division specialises in medium to larger-scale urban regeneration of public sector land delivering private and affordable homes. It operates primarily in and around London and in the North West of England. Regeneration projects are developed in partnerships predominantly with public sector landowners, such as LAs and housing associations. The

6 Directors believe that the Partnerships division’s nearly 30- year track record of delivering more than 45 regeneration projects makes it one of the most experienced deliverers of regeneration in the UK. In the year ended 30 September 2015, the Partnerships division completed 1,711 new homes, of which 634 homes were sold to private buyers and 969 were sold as part of affordable housing schemes, with the remaining 108 built under design and build contracts. As of 30 September 2015, the Partnerships division owned or had development agreements in place on 7,803 plots and had been named the preferred bidder on a further 1,542 plots.

In the year ended 30 September 2015, the Partnerships division generated revenue (including the proportional contribution of associate and joint ventures) of £285.1 million, 46.3 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures).

B.4a Significant recent trends The Group acquired Millgate Developments Limited, the affecting the Company and holding company of the Millgate business, in February 2014. the industries in which it Millgate has since been integrated into the Group’s operates Housebuilding division and is the Group’s premium housebuilding brand in the Home Counties.

The Group’s business is dependent on the UK residential property market, which has seen significant growth in both volumes and prices over the last three years following an extended period of muted growth following the financial crisis. Between 2007 and 2010, new home completions in the UK decreased from 177,000 to 106,720, or 39.7 per cent., according to the Office for National Statistics. While completions have recovered to a certain extent since the global financial crisis, in the year ended 30 September 2015 there were 135,050 new homes built in the UK, which remained 28 per cent. below the 30 March 2007 peak pre-crisis levels. Of the homes built in the year ended 30 September 2015, 103,920 were private homes and 31,120 were homes built by housing associations and Local Authorities, significantly lower than the target set by the Government in its 2007 “Barker Review” of 240,000 homes being constructed per year by 2016.

The markets in which the Group operates benefit from government schemes to address housing supply and affordability that enjoyed support from the previous coalition Government and continue to be supported by the current Government. These schemes include the Help to Buy, Rent to Buy, Affordable Homes, and Right to Buy programmes. Additionally, in the 2015 Spending Review and Autumn Statement, the Government allocated £2.3 billion to housebuilders to fund the Starter Homes Initiative to help first time homebuyers buy 200,000 new homes at a 20 per cent. discount. The Group believes these programmes will support their growth strategies for all tenures of housing in both the Housebuilding and Partnerships divisions.

7 B.5 Group description The Company is a newly incorporated company which will, prior to Admission, acquire the entire issued share capital of OCM Luxembourg Midco S.à r.l (currently the holding company of the Operating Group) and which will, on and following Admission, be the holding company of the Group.

The Group, operating through two divisions, is a leading UK home builder and housing regeneration partner, operating in London and the South East of England, and with a presence in the North West of England through its Partnerships division.

The Group acquired Millgate Developments Limited, the holding company of the Millgate business, in February 2014. Millgate has since been integrated into the Group’s Housebuilding division and is the Group’s premium housebuilding brand in the Home Counties.

B.6 Major shareholders Insofar as it is known to the Company as of the date of this Prospectus, the following persons will immediately prior to Admission or immediately following Admission be interested in 3 per cent. or more of the Company’s issued ordinary share capital.

Following Pre-IPO Reorganisation and immediately Interests immediately prior to Admission(1) following Admission(2) –––––––––––––––––––––––– –––––––––––––––––––––– Percentage of Percentage of Number of issued share Number of issued share Shareholder Shares capital Shares capital ––––––––– ––––––––– ––––––––– ––––––––– OCM Luxembourg Coppice Topco S.à r.l... 335,134,716 84.2 172,214,019 38.3 Graham Cherry(3)(4)...... 17,679,091.5 4.4 17,679,091.5 3.9 Richard Cherry(3)(4) ...... 17,679,091.5 4.4 17,679,091.5 3.9

Notes: (1) Assumes Offer Price is set at the mid-point of the Offer Price Range. (2) Assumes the Offer Price is set at the mid-point of the Offer Price Range, the Oaktree Sale Share Offer Size is set at the mid-point of the Oaktree Sale Share Offer Size Range and the Over-allotment Option is not exercised. (3) Assumes the Offer Price is set at the mid-point of the Offer Price Range and does not take into account the potential sale or purchase of Ordinary Shares by any such person as part of the Global Offer or any share awards to be made on or shortly following Admission pursuant to the Company’s employee share plans. (4) Includes beneficial interests in Ordinary Shares held through the Alan Cherry Copthorn Will Trust. On Admission, such Shareholders will not have special voting rights and the Ordinary Shares owned by them will rank pari passu in all respects with other Ordinary Shares.

The Company, OCM Luxembourg Coppice Topco S.à r.l (the “Principal Shareholder”) and certain fund entities managed by Oaktree Capital Management, L.P., (the “Oaktree Funds”) have entered into a relationship agreement (the “Relationship Agreement”), the principal purpose of which is to ensure that the Company is capable of carrying out, at all times, its

8 business independently of the Principal Shareholder and the Oaktree Funds (each of whom is considered to be a “controlling shareholder” for the purposes of the Listing Rules) and their respective associates. The Relationship Agreement contains undertakings from each of the Principal Shareholder and the Oaktree Funds that: (i) transactions and relationships with it and its associates will be conducted at arm’s length and on normal commercial terms; (ii) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (iii) neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

In accordance with the terms of the Relationship Agreement, for so long as the Principal Shareholder retains (i) an interest of greater than or equal to 25 per cent. in the issued ordinary share capital of the Company, it shall be entitled to appoint two Non-Executive Directors to the Board; and (ii) an interest of less than 25 per cent. but greater than or equal to 10 per cent. in the issued ordinary share capital of the Company, it shall be entitled to appoint one Non-Executive Director to the Board. In addition, for so long as the Principal Shareholder retains an interest of 10 per cent. or more in the issued ordinary share capital of the Company, it shall be entitled to appoint one Non-Executive Director to each of the Company’s Remuneration Committee and the Nomination Committee.

The Relationship Agreement will terminate if the Ordinary Shares cease to be listed on the premium listing segment of the Official List and traded on the London Stock Exchange or the Principal Shareholder ceases to retain an interest of 10 per cent. or more of the issued ordinary share capital of the Company (or an interest which carries 10 per cent. or more of the aggregate voting rights in the Company from time to time).

Save for the Principal Shareholder and the Oaktree Funds, the Company is not aware of any person who either as of the date of this Prospectus or immediately following Admission exercises, or could exercise, directly or indirectly, jointly or severally, control over the Company.

B.7 Key financial information The selected financial information set out below has been extracted without material adjustment from the audited combined and consolidated financial information of the Group as of and for the years ended 30 September 2013, 30 September 2014 and 30 September 2015, as set out in Section B of Part XIV: “Historical Financial Information”.

9 Selected Combined and Consolidated Statement of Comprehensive Income Data of the Group

Year ended 30 September –––––––––––––––––––––––––––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Revenue...... 276,957 452,797 547,486 Cost of sales...... (233,504) (375,413) (431,690) –––––––– –––––––– –––––––– Gross profit ...... 43,453 77,384 115,796 Administrative expenses ...... (26,440) (35,142) (47,870) –––––––– –––––––– –––––––– Group operating profit...... 17,013 42,242 67,926 Analysed as: Underlying group operating profit ...... 26,162 47,120 91,166 Less: Share of associate and joint ventures operating profit ...... (2,633) (4,136) (16,685) Less: Non-underlying items... (6,516) (742) (6,555) Group operating profit...... 17,013 42,242 67,926 Finance costs...... (28,980) (51,944) (52,294) Finance income...... 4,816 2,264 1,803 Share of profit from associate & joint ventures.. 1,876 2,025 10,584 –––––––– –––––––– –––––––– (Loss)/Profit before income tax...... (5,275) (5,413) 28,019 –––––––– –––––––– –––––––– Income tax expense ...... (3,689) (6,536) (8,186) (Loss)/profit for the year ..... –––––––– (8,964) –––––––– (11,949) –––––––– 19,833 (Loss)/profit is attributable to: Owners of the parent ...... (9,108) (11,828) 19,623 Non-controlling interests ...... 144 (122) 210 –––––––– –––––––– –––––––– –––––––– (8,964) –––––––– (11,949) –––––––– 19,833 Consolidated Statement of Financial Position of the Group

Year ended 30 September –––––––––––––––––––––––––––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Assets Non-current assets Intangible assets...... 32,459 60,654 59,453 Property, plant and equipment ...... 1,651 1,244 2,406 Investment in joint ventures... 23,315 19,692 50,097 Investment in associate ...... 6,197 8,841 4,164 Available for sale financial assets ...... 10,461 10,862 10,535 Derivative financial instruments...... 716 412 6 Deferred tax assets...... 11,071 5,901 5,606 Trade and other receivables ... 7,691 24,376 15,349 –––––––– –––––––– –––––––– Current assets...... 93,561 131,983 147,616 Inventories...... 274,030 380,778 439,542 Trade and other receivables ... 52,815 76,135 105,450 Cash and cash equivalents ..... 228 172 354 –––––––– –––––––– –––––––– 327,073 457,085 545,346 –––––––– –––––––– –––––––– Total Assets ...... 420,634 589,068 692,962 –––––––– –––––––– ––––––––

10 Year ended 30 September –––––––––––––––––––––––––––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Liabilities Current liabilities Trade and other payables...... (99,628) (139,531) (181,140) Current income tax liabilities ...... (6) (4,196) (4,043) Provisions...... (765) (1,450) (1,144) –––––––– –––––––– –––––––– (100,399) (145,177) (186,327) –––––––– –––––––– –––––––– Non-current liabilities Borrowings...... (267,507) (366,408) (343,361) Trade and other payables...... (45,624) (81,696) (148,930) Provisions...... (5,646) (4,345) (1,110) (318,767) (452,449) (493,401) Total liabilities...... (419,166) (597,626) (679.728) –––––––– –––––––– –––––––– Net assets/(liabilities) ...... –––––––– 1,468 –––––––– (8,558) –––––––– 13,234 Equity Share capital...... 8 18 19

Summary Combined and Consolidated Cash Flow Statement of the Group

Year ended 30 September –––––––––––––––––––––––––––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Net Cash inflow from operating activities...... 200,300 26,576 16,136 Net cash (outflow)/inflow from investment activities.. (4,084) (86,899) 9,983 Net cash (outflow)/inflow from financing activities .... (195,988) 60,267 (25,937) Net increase/(decrease) in cash and cash equivalents .. 228 (56) 182 Cash and cash equivalents at beginning of the period...... – 228 172 Cash and cash equivalents at the end of the period...... 228 172 354

The selected financial information set out below has been extracted without material adjustment from the audited financial information of Millgate as of and for the years ended 30 September 2013 and 30 September 2014, as set out in Section D of Part XIV: “Historical Financial Information”.

11 Statement of Comprehensive Income of Millgate Year ended 30 September ––––––––—––––––––––––– 2014 2015 –––––––– –––––––– (£’000) Revenue...... 53,982 68,243 Cost of sales...... (40,944) (43,719) Gross profit ...... 13,038 24,524 Administrative expenses ...... (4,212) (8,020) Operating Profit...... 8,826 16,504 Analysed as: Underlying operating profit ...... 8,826 18,503 Less: Non-underlying ...... – (1,999) Operating profit ...... 8,826 16,504 Finance costs...... (1,190) (2,308) –––––––– –––––––– Profit before income tax ...... 7,636 14,196 Income tax expense...... (1,865) (4,054) –––––––– –––––––– Profit after tax 5,771 10,142 Other comprehensive income ...... – – –––––––– –––––––– Total comprehensive income for the year ...... –––––––– 5,771 –––––––– 10,142 Statement of Financial Position of Millgate Year ended 30 September ––––––––—––––––––––––– 2013 2014 –––––––– –––––––– (£’000) Assets Non-current assets Property, plant and equipment...... 300 275 –––––––– –––––––– 300 275 Current assets Inventories...... 71,381 93,496 Trade and other receivables ...... 559 554 Cash and cash equivalents ...... – 1,455 –––––––– –––––––– 71,940 95,505 –––––––– –––––––– Total assets –––––––– 72,240 –––––––– 95,780 Current liabilities Trade and other payables...... (7,532) (52,572) Borrowings...... (7,750) – –––––––– –––––––– Current income tax liabilities ...... (1,889) (2,920) –––––––– –––––––– (17,171) (55,492) Non-current liabilities Borrowings...... (24,383) – Deferred tax liabilities ...... (41) (13) –––––––– –––––––– (24,424) (13) –––––––– –––––––– Total liabilities (41,595) (55,505) –––––––– –––––––– Net assets –––––––– 30,645 –––––––– 40,275 Equity Share capital...... 82 82 Share premium...... 202 339 Other reserve...... 6 6 Retained earnings...... 30,355 39,848 –––––––– –––––––– Total equity –––––––– 30,645 –––––––– 40,275

12 Summary Statement of Cash Flows of Millgate Year ended 30 September ––––––––—––––––––––––– 2013 2014 –––––––– –––––––– (£’000) Net Cash inflow from operating activities ...... 1,432 4,915 –––––––– –––––––– Net cash outflow from investing activities ...... (99) (104) –––––––– –––––––– Net cash outflow from financing activities ...... (1,333) (3,356) –––––––– –––––––– Net increase in cash and cash equivalents ...... – 1,455 Cash and cash equivalents at beginning of the period...... – – –––––––– –––––––– Cash and cash equivalents at the end of the period...... –––––––– – –––––––– 1,455 Other than the acquisition of Millgate, there has been no significant change in the financial condition or operating results of the Group during the financial years ended 30 September 2013, 2014 and 2015.

Save for the movement in non-current financial indebtedness, there has been no significant change in the financial condition or operating results of the Group since 30 September 2015, being the date to which the audited combined and consolidated financial information of the Group as set out in Section B of Part XIV: “Historical Financial Information” was prepared. Non-current financial indebtedness of the Group increased to £409.6 million as at 30 November 2015 due to the investment made in work in progress over this period which increased the Group's net bank debt to £122.6 million as at 30 November 2015. This increase is in line with management’s expectations. The amount of mandatory redeemable preference shares remained at £287.3 million as at 30 November 2015.

B.8 Key pro forma financial The unaudited pro forma statement of net assets of the Group information set out below has been prepared on the basis set out in the notes below to illustrate the impact of the Global Offer and the Pre-IPO Reorganisation on the net assets of the Group, had the Global Offer and the Pre-IPO Reorganisation taken place on 30 September 2015.

The unaudited pro forma information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and does not, therefore, represent the Group’s actual financial position or results.

The unaudited pro forma statement of net assets has been prepared on a basis consistent with the IFRS accounting policies of the Group and on the basis set out in the notes below, and in accordance with Annex II to the Prospectus Directive Regulation. It should be read in conjunction with the notes below.

13 The unaudited pro forma statement of net assets is compiled from the consolidated balance sheet of the Group as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information”. There is no financial information for the Company, which was incorporated on 18 November 2015 and accordingly, the Company is excluded from the unaudited pro forma statement of net assets.

In addition, the unaudited pro forma financial information does not purport to represent what the Group’s financial position actually would have been if the Global Offer and the Pre-IPO Reorganisation had been completed on the dates indicated nor does it purport to represent the financial condition at any future date.

Net proceeds of the Global Group as Offer at 30 receivable Repayment Pre-IPO Unaudited September by the of Reorgani- Pro Forma 2015 Company borrowings sation Total ––––––– ––––––– ––––––– ––––––– ––––––– £’000 £’000 £’000 £’000 £’000 (Note 1) (Note 2) (Note 3) (Note 4) Assets Non-current assets Intangible assets ...... 59,453 – – – 59,453 Property, plant and equipment ...... 2,406 – – – 2,406 Investment in joint ventures ...... 50,097 – – – 50,097 Investment in associate...... 4,164 – – – 4,164 Available for sale financial assets...... 10,535 – – – 10,535 Derivative financial instruments ...... 6 – – – 6 Deferred tax assets..... 5,606 – – – 5,606 Trade and other receivables ...... 15,349 – – – 15,349 ––––––– ––––––– ––––––– ––––––– ––––––– Total non-current assets ...... ––––––– 147,616 ––––––– – ––––––– – ––––––– – ––––––– 147,616 Current assets Inventories ...... 439,542 – – – 439,542 Trade and other receivables ...... 105,450 – – – 105,450 Cash and cash equivalents ...... 354 114,800 (59,519) – 55,635 ––––––– ––––––– ––––––– ––––––– ––––––– Total current assets.. 545,346 114,800 (59,519) – 600,627 ––––––– ––––––– ––––––– ––––––– ––––––– Total assets...... 692,962 114,800 (59,519) – 748,243 Current liabilities Trade and other payables ...... (181,140) 1,200 – – (179,940) Current income tax liabilities ...... (4,043) – – – (4,043) Provisions ...... (1,144) – – – (1,144) ––––––– ––––––– ––––––– ––––––– ––––––– Total current liabilities...... (186,327) 1,200 – – (185,127) Non-current liabilities Borrowings ...... (343,361) – 59,519 287,329 3,487 Trade and other payables ...... (148,930) – – 87,875 (61,055) Provisions ...... (1,110) – – – (1,110) ––––––– ––––––– ––––––– ––––––– ––––––– Total non-current liabilities ...... (493,401) – 59,519 375,204 (58,678) Total liabilities ...... (679,728) 1,200 59,519 375,204 (243,805) ––––––– ––––––– ––––––– ––––––– ––––––– Net (liabilities)/assets ––––––– 13,234 –––––––116,000 ––––––– 0 –––––––375,204 –––––––504,438

14 Notes: (1) The financial information has been extracted, without material adjustment, from the consolidated financial information of the Operating Group as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information”. (2) This column reflects the net impact of the receipt of net IPO proceeds, being the gross proceeds receivable by the Company of approximately £130 million less estimated outstanding fees and expenses of £15.2 million payable by the Company. As of 30 September 2015, the Group had already paid an additional £0.5 million of fees and expenses in relation to the Global Offer and had accrued £1.2 million of the £15.2 million within Trade and other payables. The total estimated fees and expenses payable by the Company in connection with the Global Offer is £15.7 million. (3) This column reflects the intention to repay £59,519,000 of the outstanding Group financial indebtedness as of 30 September 2015, representing the amount of bank loans outstanding less the amount of cash and cash equivalents available for offset as at 30 September 2015. This amount does not reflect movements in these balances subsequent to 30 September 2015. The actual amount of borrowings the Company intends to repay, using net proceeds from the Global Offer received by it, is approximately £64.0 million as set out in Part VII: “Use of Proceeds and Dividend Policy”. (4) This column reflects the net effect of the following adjustments relating to the Pre-IPO Reorganisation as set out below: (a) The Company was incorporated on 18 November 2015 and, in connection with the Global Offer, the Pre-IPO Reorganisation is due to take place shortly prior to Admission to result in the Company becoming the ultimate holding company of the Group and OCM Luxembourg Coppice Midco S.à. r.l becoming the Company’s direct subsidiary. On incorporation, the share capital of the Company was £1, consisting of 1 ordinary share with a £1 nominal value. On 19 November 2015, the Company issued a further 9 ordinary shares and 50,000 redeemable preference shares, each of £1. Immediately prior to the publication of this Prospectus, the Company had in issue 10 ordinary shares of £1 each and 50,000 redeemable preference shares of £1 each. In connection with the Pre-IPO Reorganisation, the redeemable preference shares will be redeemable either on, or immediately after, Admission. (b) The insertion of the Company as a new holding company constitutes a group reorganisation and will be accounted for using merger accounting principles. The Pre-IPO Reorganisation will not be effective until shortly prior to Admission and the consolidated financial statements will be presented as if the Company had always been part of the same group. (c) As part of the Pre-IPO Reorganisation, the balance of the mandatory redeemable preference shares as of 30 September 2015 of £287 million and the associated accrued return of £88 million as of 30 September 2015 will be transferred from the current holders (being the Principal Shareholder and certain members of the Group’s management) to the Company in exchange for ordinary shares in the Company. These adjustments do not take into account any movements in these balances subsequent to 30 September 2015. (5) The unaudited pro forma borrowings balance of £3,487,000 relates to unamortised bank loans and arrangement fees in respect of the Group’s existing finance facilities. (6) No adjustment has been made to take account of trading results or other transactions undertaken by the Operating Group or the Company since 30 September 2015. B.9 Profit forecast or estimate Not applicable. No profit forecast or estimate has been included in this Prospectus.

15 B.10 A description of the nature Not applicable. There are no qualifications to the audit reports of any qualifications in the on the historical financial information included in this audit report on the Prospectus. historical financial information

B.11 Explanation if there is Not applicable. In the opinion of the Company, taking into insufficient working capital account the Group’s financing facilities and the net proceeds receivable by the Company from the Global Offer, the working capital available to the Company and the Group is sufficient for their present requirements, that is for the next 12 months following the date of this Prospectus.

Section C – Shares

Annexes and Element Disclosure requirement

C.1 Type and class of securities The Global Offer comprises the offer of between 47,272,727 and 57,777,778 New Shares and the sale of between 54,722,222 and 290,227,273 Sale Shares by the Selling Shareholders, in each case at an Offer Price of between 225 and 275 pence per Share. In addition, a further number of Over-allotment Shares (in an amount equal to 15 per cent. of the Offer Size) are being made available by the Over-allotment Shareholder pursuant to the Over-allotment Option to cover short positions arising from over-allotments made (if any) in connection with the Global Offer and sales made during the stabilisation period. When admitted to trading, the Ordinary Shares will be registered with ISIN GB00BYPHNG03, SEDOL number BYPHNG0 and it is expected that the Ordinary Shares will trade under the symbol “CSP”.

C.2 Currency of the issue of The currency of the Ordinary Shares is pounds sterling. securities C.3 Number of issued and fully On Admission there will be 450,000,000 Ordinary Shares in paid Shares issue (all of which will be fully paid). The Ordinary Shares will have a nominal value of £1.

C.4 Description of the rights The New Shares to be issued and the Sale Shares being sold attaching to the Shares pursuant to the Global Offer will, on Admission, rank pari passu in all respects with the other Ordinary Shares in issue and will rank in full for all dividends and other distributions thereafter declared, made or paid on the share capital of the Company.

C.5 Restrictions on the free Not applicable. There are no restrictions on the free transferability of the transferability of the Ordinary Shares. Shares C.6 Admission Application has been made to the FCA for all of the Ordinary Shares, issued and to be issued, to be admitted to the premium listing segment of the Official List of the FCA and to the London Stock Exchange for such Ordinary Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities.

16 No application has been made or is currently intended to be made for the Ordinary Shares to be admitted to listing or trading on any other exchange.

C.7 Dividends and dividend The Company expects sufficient cash flow to be available to policy meet the growth requirements of the business, maintain an appropriate level of debt and provide returns to shareholders via a dividend. Given the expected growth profile of the business, the Directors intend to adopt a dividend policy with a target payout ratio of 30 per cent. of earnings. The Company intends to pay interim dividends in July in the relevant financial year and final dividends in February of the following financial year, with the amount being paid in an approximate one-third (interim) and two-thirds (final) split. The Company expects its first dividend as a public company to be a final dividend to be paid in February 2017 reflecting the six-month period from 31 March 2016 to the 2016 financial year end.

Section D – Risks

Annexes and Element Disclosure requirement

D.1 Key information on the key • The Group’s business is dependent on the UK residential risks that are specific to property market. As a result, the Group’s business is the Company or its dependent on macroeconomic factors as well as the industry conditions of the UK residential property market, and in particular in London, the South East and the North West of England. The Group may be particularly adversely affected by any factor that reduces sales prices or transaction volumes or presents constraints in the supply chain in the UK residential property market.

• Constraints on the availability of mortgage funding may adversely affect the Group’s home sales. The decreased availability of mortgage credit following the global financial crisis continues to constrain the growth in sales volumes and prices in the wider UK housebuilding industry for both first-time buyers and existing homeowners.

• Higher costs of mortgage funding may adversely affect the Group’s home sales. The Bank of England may raise its base rate at any time, and interest rates charged on mortgages may increase correspondingly, which may reduce the volume and value of property transactions facilitated by the Group and the revenue derived from them.

• Any reduction or discontinuation of UK Government-backed home purchase assistance programmes in the future may make it more difficult for the Group to sell homes and may force the Group to either lower prices or increase purchase incentives.

• The Group may not be able to access debt financing on favourable terms. If, in the longer term, the Group does not successfully obtain further financing (should it be required to fund its future investments), this may constrain the

17 Group’s ability to grow by limiting further land acquisitions and investments in new development projects.

• Securing timely planning permission on economically viable terms is key to the value of the Group’s land bank and in turn to the Group’s ability to realise value on its developments. Any failure to obtain planning permission on economically viable terms, including cost terms, on a timely basis, or at all could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

• The Group relies on maintaining strong relationships with LAs, the HCA and housing associations, and these entities may be subject to reduced funding and other changes to their operations due to economic and political factors outside of their control. Should there be significant changes at or a major reorganisation of the LAs with which the Group works, the Group may need to rebuild its relationships or risk losing partnership opportunities with these organisations.

• The success of the Group’s businesses depends on recruiting, retaining and developing highly-skilled, competent people at all levels of the organisation. If the Group is not able to attract and retain key personnel or develop a succession plan for senior management, the Group may not be able to maintain its standards of service or continue to grow as anticipated.

• The construction of new developments involves health, safety and environmental (“HSE”) risks. A significant HSE incident at one of the Group’s developments or general deterioration in the Group’s HSE standards could put the Group’s employees, its contractors, sub-contractors or the general public at risk of injury or death and could lead to litigation, significant penalties or damage to the Group’s reputation.

• The Group’s performance depends on its ability to purchase land suitable for its purposes. Failure to identify suitable land, obstacles within the purchasing process, failure to manage land purchases to meet the demands of the business or increases in the costs of such purchases could result in margins and ROCE lower than those targeted by the Group.

• The Group depends on third-party suppliers, contractors, sub-contractors and other service providers to execute its projects. If the Group is unable to find or hire qualified and reliable third-party suppliers, contractors, or sub-contractors for any of its projects, its ability to successfully complete projects on time or at all could be impaired.

• Significant unanticipated costs might arise in relation to the execution of the Group’s projects. Any unanticipated costs arising during the execution of the Group’s projects may

18 cause material construction delays and may result in the Group incurring losses or lower profits than anticipated.

• Estimates of future land and development values may be inaccurate. There can be no assurance that the Group’s valuations of land in its financial statements or historical financial information, its net realisable value or its GDV estimates for its land bank and proposed developments will reflect the actual sale prices achieved of either the land itself or any developments built thereon.

D.3 Key information on the key • The price of the Ordinary Shares may fluctuate risks that are specific to significantly and investors could lose all or part of their the Shares investment.

• The Principal Shareholder will retain a significant interest in the Company following Admission and its interests may differ from those of the other Shareholders. • Sales of Ordinary Shares by significant Shareholders could depress the price of the Ordinary Shares. • The Company may not pay cash dividends on the Ordinary Shares in the future. Consequently, investors may not receive any return on investment unless they sell their Ordinary Shares for a price greater than that which they paid for them. • Future issuances of Ordinary Shares may dilute the holdings of Shareholders and may depress the price of the Ordinary Shares. • A liquid market for the Ordinary Shares may fail to develop or be sustained.

Section E – Global Offer

Annexes and Element Disclosure requirement

E.1 Net proceeds and expenses The Company expects to receive net proceeds of of the Global Offer approximately £114 million (after deducting estimated underwriting commissions and fees and expenses of the Global Offer (including the maximum amount of discretionary commissions and VAT) payable by the Company, which are expected to be approximately £16 million) from the issue of New Shares in the Global Offer. The Selling Shareholders will together receive gross proceeds of approximately £431 million from the sale of the Sale Shares in the Global Offer, assuming the Offer Price is set at the mid- point of the Offer Price Range and the Sale Share Offer Size is set at the mid-point of the Sale Share Offer Size Range and excluding any proceeds receivable by the Over-allotment Shareholder pursuant to any exercise of the Over-allotment Option. No commissions, fees or expenses will be charged to investors in connection with the Admission or the Global Offer by the Company or the Selling Shareholders.

19 E.2a Reasons for the Global The net proceeds received by the Company from the Global Offer and use of proceeds Offer are intended to be used as follows: (i) approximately £64 million to reduce the Group’s financial indebtedness, thereby providing the Group with a stronger balance sheet to support and pursue its growth strategy; and (ii)approximately £50 million to accelerate growth in the development of the Group’s sites at Acton, Beaulieu, Hazel End and Rayleigh, through investment in additional phases over an approximate two-year period following Admission. The Board believes that the Global Offer and Admission will also position the Group for its next stage of development, including by further raising the profile of the Group, assisting in retaining and incentivising employees and providing it with a structure for future growth.

In addition, the Global Offer and Admission will provide the Selling Shareholders with a partial realisation of their investment in the Company. The Company will not receive any proceeds from the sale of Sale Shares or Over-allotment Shares by the Selling Shareholders.

E.3 Terms and conditions of All the Shares will be sold at the Offer Price, which will be the Global Offer determined by the Company and the Principal Shareholder in agreement with the Joint Global Co-ordinators.

It is currently expected that the Offer Price will be within the Offer Price Range (225 pence to 275 pence), that the Offer Size will be set within the Offer Size Range (112,500,000 Shares to 337,500,000 Shares), that the New Share Offer Size will be within the New Share Offer Size Range (47,272,727 New Shares to 57,777,778 New Shares) and that the Sale Share Offer Size will be within the Sale Share Offer Size Range (54,722,222 Sale Shares to 290,227,273 Sale Shares). The New Share Offer Size Range has been determined by reference to the Offer Price Range, with the intention that the Company issues a sufficient number of New Shares pursuant to the Global Offer to raise gross proceeds of approximately £130 million. The Sale Share Size Range and the Offer Size Range have been determined to take into account, at a minimum, the New Share Size Range and the minimum free float requirements of the UK Listing Authority.

A number of factors will be considered in deciding the Offer Price, the Offer Size, the New Share Offer Size, the Sale Share Offer Size and the bases of allocation under the Global Offer, including the level and nature of demand for Shares in the book-building process, the level of demand in the Intermediaries Offer, prevailing market conditions and the objective of encouraging the development of an orderly and liquid after-market in the Shares.

The Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size are expected to be announced on or around 12 February 2016. The Pricing Statement, which will contain, among other things, the Offer Price, the Offer Size, the

20 New Share Offer Size and the Sale Share Offer Size, will (subject to certain restrictions) be published online at www.countryside-properties.com and be available in printed form at the Company’s registered office, Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom, until 14 days after Admission. If the Offer Price is set above the Offer Price Range, the Offer Size is set above or below the Offer Size Range, the New Share Offer Size is set below the New Share Offer Size Range and/or the Sale Share Offer Size is set outside the Sale Share Offer Size Range, then an announcement will be made via a Regulatory Information Service and prospective investors will have a statutory right to withdraw their offer to purchase Shares in the Global Offer pursuant to section 87Q of the FSMA. The arrangements for withdrawing offers to purchase Shares will be made clear in the announcement. The Global Offer comprises the “Institutional Offer” and the “Intermediaries Offer”. Under the Institutional Offer, the Shares are being offered to certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S and to persons reasonably believed to be QIBs in the United States in reliance on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Under the Intermediaries Offer, the Shares are being offered to intermediaries in the United Kingdom, the Channel Islands and the Isle of Man who will facilitate the participation of their retail investor clients located in the United Kingdom, the Channel Islands and the Isle of Man. In addition, Over-allotment Shares (representing up to 15 per cent. of the Offer Size) will be made available by the Over-allotment Shareholder pursuant to the Over-allotment Option. Admission is expected to become effective, and unconditional dealings in the Ordinary Shares are expected to commence on the London Stock Exchange, at 8.00 a.m. on 17 February 2016. It is expected that dealings in the Ordinary Shares will commence on a conditional basis on the London Stock Exchange at 8.00 a.m. on 12 February 2016. The earliest date for settlement of such dealings will be 17 February 2016. All dealings in Ordinary Shares prior to the commencement of unconditional dealings will be on a “when-issued” basis, will be of no effect if Admission does not take place and will be at the sole risk of the parties concerned. The Global Offer is subject to the satisfaction of conditions which are customary for transactions of this type contained in the Underwriting Agreement, including Admission becoming effective by no later than 8.00 a.m. on 17 February 2016 (or such later date as the Company, the Principal Shareholder and the Joint Global Coordinators may agree), determination of the Offer Price and the Underwriting Agreement not having been terminated prior to Admission. The Global Offer will be fully

21 underwritten by the Underwriters in accordance with the terms of the Underwriting Agreement. None of the Shares may be offered for subscription, sale or purchase or be delivered, or be subscribed, sold or delivered, and this Prospectus and any other offering material in relation to the Shares may not be circulated in any jurisdiction where to do so would breach any securities laws or regulations of any such jurisdiction or give rise to an obligation to obtain any consent, approval or permission, or to make any application, filing or registration.

E.4 Material interests to the The Company considers that the Principal Shareholder has Global Offer interests that are material to the Global Offer by virtue of the size of its existing shareholding in the Company. The Company does not consider that there is a conflicting interest or that there are other interests, including conflicts of interests, that are material to the Global Offer.

E.5 Selling Shareholders and The number of Shares to be sold by the Selling Shareholders Lock-ups will be the “Sale Share Offer Size” which will amount to 172,474,748 Shares, assuming the Sale Share Offer Size is set at the mid-point of the Sale Share Offer Size Range and no exercise of the Over-allotment Option. The number of Shares to be sold by the Principal Shareholder will be the “Oaktree Sale Share Offer Size”, which will be between 35,614,120 Sale Shares and 290,227,273 Sale Shares (the “Oaktree Sale Share Offer Size Range”). Assuming the Oaktree Sale Share Offer Size is set at the mid-point of the Oaktree Sale Share Offer Size Range, the Principal Shareholder will sell 162,920,697 Sale Shares. In addition, the Principal Shareholder, in its capacity as Over-Allotment Shareholder, will make available a further number of Shares equal to 15 per cent. of the Offer Size.

The Principal Shareholder has agreed to a 180-day lock-up period following Admission, during which time it may not dispose of any interests in its Ordinary Shares.

For a 180-day lock-up period following Admission, the Company will not issue or dispose of any Ordinary Shares.

The Directors (pursuant to the Underwriting Agreement) and members of Senior Management (by separate undertaking) are subject to a 365-day lock-up period following Admission, during which time they may not dispose of any interest in their Ordinary Shares.

All lock-up arrangements are subject to certain exceptions and qualifications.

E.6 Dilution resulting from the If the Offer Price is set at the mid-point of the Offer Price Global Offer Range, the New Shares being issued in the Global Offer will represent approximately 11.6 per cent. of the expected issued share capital of the Company immediately following Admission and the Existing Shares will represent approximately 88.4 per cent. of the expected issued share capital of the Company immediately following Admission.

22 E.7 Estimated expenses There are no commissions, fees or expenses to be charged to charged to the investor by investors by the Company or the Selling Shareholders under the Company or the the Institutional Offer. Selling Shareholders Any expenses incurred by any Intermediary are for its own account. Prospective investors should confirm separately with any Intermediary whether there are any commissions, fees or expenses that will be applied by such Intermediary in connection with any application made through that Intermediary pursuant to the Intermediaries Offer. The Intermediaries Terms and Conditions restrict the level of commission that Intermediaries are able to charge any of their respective clients acquiring Shares pursuant to the Intermediaries Offer.

23 PART II

RISK FACTORS

Any investment in the Ordinary Shares is subject to a number of risks. Prior to investing in the Ordinary Shares, prospective investors should carefully consider the factors and risks associated with an investment in the Ordinary Shares, as well as the Group’s business and the industry in which it operates, together with all other information contained in this Prospectus, including, in particular, the risk factors described below.

Prospective investors should note that as the risks which the Group faces relate to events and depend on circumstances that may or may not occur, prospective investors should consider not only the information on the key risks summarised in Part I: “Summary Information” but also, among other things, the risks and uncertainties described below.

The following is not an exhaustive list or explanation of all risks that prospective investors may face when making an investment in the Ordinary Shares and should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Group, or that the Group currently deems immaterial, may individually or cumulatively also have a material adverse impact on the Group’s operating results, business prospects and financial condition and, if any such risk should occur, the price of the Ordinary Shares may decline and investors could lose all or part of their investment. Prospective investors should consider carefully whether an investment in the Shares is suitable for them in the light of the information in this Prospectus and their personal circumstances.

Risks Relating to the Group’s Business and Industry The Group is dependent on the UK residential property market, the conditions of which may deteriorate due to macroeconomic or other factors. The Group’s business is dependent on the UK residential property market. As a result, the Group’s business is dependent on macroeconomic factors as well as the conditions of the UK residential property market, and in particular in London, the South East and the North West of England. The Group may be particularly adversely affected by any factor that reduces sales prices or transaction volumes or presents constraints in the supply chain in the UK residential property market.

Historically, the strength of the UK residential property market has been linked to that of the UK economy as a whole, which in turn is influenced by both European and global macroeconomic conditions, as well as internal factors within the UK, and, as such, has been cyclical. In addition, the economic weakness experienced in the UK following the global financial crisis in 2008 caused a significant decline in demand for residential property, leading to a sharp decrease in the number of residential property transactions in the UK. Between 2007 and 2010, new home completions in the UK decreased from 177,000 to 106,720, or 39.7 per cent., according to the Office for National Statistics. Similarly, average UK house prices also decreased from £214,000 to £195,000 between 2007 and 2009, according to the Office for National Statistics. While prices have recovered since the global financial crisis, as of 30 September 2015, completion volumes remained 28 per cent. below their 30 March 2007 peak pre-crisis levels. Moreover, the recent financial and political crises in the Eurozone, austerity measures introduced by the UK Government and uncertain global economic conditions have created pressure on the macroeconomic climate in the UK and the UK residential property market. An economic slowdown in the UK or further adverse changes in the macroeconomic climate, such as the breakup of the Eurozone or a referendum on the UK’s membership in the European Union, could negatively affect the Group’s sales volumes or the prices for which it sells houses.

While macroeconomic factors broadly affect the UK residential property market as a whole, property trends in the UK historically have varied significantly by region. In London, where prime residential property has been regarded as a preferred investment opportunity, residential property price growth has been largely sustained in recent years. If, however, this growth were to stagnate or reverse, there is a risk that residential property prices (in particular for higher value homes) in the counties around London, where the majority of the Group’s Housebuilding sites are located, could also stagnate or fall as more homeowners could then afford to move into London. Residential property prices in the South East of England generally also have

24 been more resilient to macroeconomic pressures compared to other regions of the UK. Most of the Group’s land bank and ongoing developments are situated in London and the South East of England, where, despite recent trends, housing prices may materially decrease in the future. The Group also has significant operations in the North West of England, which historically has been less resilient to macroeconomic pressures. In the future, should the UK economy stagnate or contract, the variations between regions in the UK may become more pronounced, and residential property prices in any of the areas in which the Group operates may suffer a greater adverse impact relative to those in other regions.

In addition to the macroeconomic factors referred to above, the UK residential property market also could be adversely impacted by, among other things:

• increased interest rates;

• restrictions on the availability of mortgages and other forms of credit for house buyers;

• supply chain availability or cost increases;

• population growth and demographic changes;

• rising unemployment, declining income (in real terms) and increases in the cost of living;

• inflation and rising costs of housing that make homes unaffordable to large segments of the population;

• changes in government budgets or funding initiatives, including the Help to Buy programme;

• changes in government regulation or policy, including infrastructure policies and planning and environmental regulations; and

• increases in tax rates, including VAT, stamp duty (including the proposed increase in UK stamp duty payable on second homes and certain buy-to-let homes by 3 per cent. from April 2016), council tax and any form of “mansion tax”, or a reduction in mortgage interest tax relief.

Any of these factors could decrease demand for new homes, lower sales prices and rents in the UK residential property market and reduce the funding available to local authorities (“LAs”) and housing associations for partnership projects with the Group, any of which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Constraints on the availability of mortgage funding may adversely affect the Group’s home sales. Home purchases in the UK are often facilitated through mortgage lending, and 86 per cent. of the Group’s homes were purchased by customers with the assistance of mortgages in the year ended 30 September 2015. Since the global financial crisis in 2008, access to residential mortgage credit in the UK has been restricted, particularly at higher loan-to-value ratios, due to a number of factors including (i) the exit of a number of mortgage providers from the UK market; (ii) a significant reduction in the number of available mortgage products; (iii) a more cautious approach to valuations of properties by surveyors (which in turn reduces the value of the mortgage that can be obtained on a given property); (iv) stricter underwriting standards by lenders that have resulted in more stringent mortgage application requirements for borrowers, including increased down payments; (v) the introduction, under the 2014 Mortgage Market Review, of mandatory interest rate “stress testing” when assessing affordability; and (vi) a desire by certain lenders to limit their lending exposure in relation to specific types of housing developments.

Although mortgage credit conditions have improved since the height of the global financial crisis, the decreased availability of mortgage credit continues to constrain the growth in sales volumes and prices in the wider UK housebuilding industry for both first-time buyers and existing homeowners. Even if potential homebuyers do not themselves need financing, adverse changes in interest rates and mortgage availability could make it harder for them to sell their existing homes to other potential buyers who need mortgage financing, thereby constraining their ability to purchase a new home. Any decrease in the availability of products and providers of mortgage financing in the future may make it more difficult for the Group to sell

25 homes, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Higher costs of mortgage funding may adversely affect the Group’s home sales. As of 1 January 2016, the Bank of England bank rate was 0.5 per cent. Despite the current low base rate environment, levels of mortgage lending throughout the UK remain low compared to those of certain other developed countries. Increases in the base rate have previously had a negative impact on the UK property market because interest rates charged on mortgages have increased correspondingly, thereby making it more expensive for prospective buyers to purchase residential property. Prospective buyers who can obtain a mortgage at current interest rates may also be deterred by the possibility of increased rates in the future and instead elect to remain in their current property. Higher interest rates (and, in turn, higher monthly interest payments) may also make mortgages unobtainable or unaffordable for some prospective buyers. Investor buyers also are sensitive to interest rate fluctuations, as higher interest rates negatively affect their investment returns. The Bank of England may raise its base rate at any time, which could have an adverse impact on transaction volumes and prices in the UK’s residential property market, and may in turn reduce the volume and value of property transactions facilitated by the Group and the revenue derived from them. Any increase in the costs for mortgage financing in the future may make it more difficult for the Group to sell homes, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The discontinuation of government-backed home purchase assistance programmes may adversely affect the Group’s sales. The Group benefits from UK Government-backed property purchase assistance schemes such as Help to Buy, which is administered by the UK Homes and Communities Agency (the “HCA”), and the Starter Homes Initiative. The Help to Buy programme provides assistance to purchasers of new-build homes in the UK by reducing the minimum down payment required from the purchaser to 5.0 per cent. of a property’s value and providing an equity loan of up to 20.0 per cent. of the property value. In the year ended 30 September 2015, 38.4 per cent. of the Group’s homes were purchased with assistance from Help to Buy. Though the detailed mechanics of the Starter Homes Initiative are still pending passage of the Housing and Planning Bill, the intent is to allow UK housebuilders to develop underutilised or unviable brownfield land. The Government has indicated that it will require LAs to produce a register of suitable brownfield sites that would then be eligible for a simplified planning “permission in principle”, which could potentially reduce the costs of securing planning as well. The Government also expects that developers on these sites would be exempt from Section 106 agreements (“s106 agreements”) or CIL requirements. In return, developers will be required to offer the homes built on the relevant land to first-time buyers at a minimum 20.0 per cent. discount to market value (with the first homes expected to reach the market during 2016). There can be no assurance, however, that Help to Buy, the Starter Homes Initiative or any other similar government-backed programme will continue at current levels, or at all, or that lenders will participate in them. Any reduction or discontinuation of UK Government-backed home purchase assistance programmes in the future may make it more difficult for the Group to sell homes and may force the Group to either lower prices or increase purchase incentives, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group may not be able to access debt financing on favourable terms. The Group has historically financed and currently finances its operations in part from borrowings under available credit facilities, which expire on 3 June 2019. Upon the expiration of the Group’s existing credit facilities, there is a risk that it will be unable to secure sufficient further funding for its business operations (see Part XII: “Operating and Financial Review—Financial liabilities and contractual obligations”). The Group may also in the future seek additional bank borrowings or issue debt for future expansion and development of the business in the longer term. No assurance can be given as to the availability of such additional financing at the relevant time or, if available, whether it would be on acceptable terms. If, in the longer term, the Group does not successfully obtain further financing (should it be required to fund its future investments), this may constrain the Group’s ability to grow by limiting further land acquisitions and

26 investments in new development projects, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group may not be able to secure planning permission for developments on a timely basis or on economically viable terms, or at all. Developments undertaken by the Group require planning permission to be granted by a relevant planning authority before works can be undertaken. In its Housebuilding division, the Group typically sources land for development prior to the grant of planning permission by securing control of plots through option agreements or conditional contracts. These contracts set out the basis upon which the Group will promote the land through the planning process, and often include land promotion timetables and cost-bearing arrangements, as well as the terms upon which the Group may or will acquire the land should planning permission be secured, ordinarily at a discount to open market value. Additionally, from time to time, the Group purchases freehold and leasehold land on an unconditional basis both with and without planning permission (and when without, usually at a discount to open market value, due to the lack of planning permission). As of 30 September 2015, 64 per cent. of the Housebuilding division’s land bank was held through option agreements, 9 per cent. was held through conditional contracts and 27 per cent. was held in freehold or leasehold. In its Partnerships division, the Group typically enters into development agreements with LAs under which the Group is usually required to secure any necessary planning permissions for the relevant site. The Group enters into development agreements in respect of land without planning permission in the belief that such land has the potential, in the medium to long-term, to be allocated for housing development purposes by the relevant LA and thereafter receive planning permission.

Securing timely planning permission on economically viable terms is key to the value of the Group’s land bank and in turn to the Group’s ability to realise value from its developments. However, the process for obtaining planning permission, for both the Housebuilding and Partnerships divisions, can be time- consuming, lasting in some cases more than 10 years, as well as costly (and these costs can be lost entirely if planning permission is never obtained in relation to a particular piece of land), and there can be no certainty that the Group will obtain planning permission for schemes which currently lack them. Planning policy and procedures are also subject to change, and these changes may make the planning process more costly or time-consuming.

In addition, financial obligations contained in s106 agreements with LAs, which govern a developer’s commitments to build affordable housing and infrastructure, as well as provide other community benefits, and payments due under the Community Infrastructure Levy (the “CIL”) could also have a material adverse effect on the viability of sites and the Group’s ability to secure permission on economically viable terms if they are particularly onerous.

As of 30 September 2015, the Group had obtained planning permission in respect of 8,838 plots in its Housebuilding land bank, or 48 per cent., and 5,810 plots, or 74.5 per cent., in its Partnerships land bank. Once received, planning permission can place onerous restrictions on how land is developed and such restrictions can reduce the profitability of a development or cause it to be financially unviable to develop. Any failure to obtain planning permission on economically viable terms, on a timely basis, or at all could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group relies on maintaining strong relationships with LAs, the HCA and housing associations, and these entities may be subject to reduced funding and other changes to their operations due to economic and political factors outside of their control. The Group’s success, and in particular that of its Partnerships division, which accounted for 46 per cent. of the Group’s revenue (including the proportional contribution of associate and joint ventures) in the year ended 30 September 2015, depends on its ability to maintain strong relationships with LAs, the HCA, housing associations and other local organisations. Many of these relationships are between specific individuals, and should these individuals leave the Group or their respective organisations, the Group may need to devote significant time and resources to building new relationships.

27 Partnerships projects are typically awarded through competitive public procurement processes, often based on the perception by an LA or housing association of a developer’s expertise, design quality, reputation, price and value. For example, non-financial criteria, such as planning and design capability, customer service record, past delivery of high-quality homes with minimal defects, delivery capacity and proposals to address social and economic sustainability issues, typically account for more than 50 per cent. of an applicant’s score in public procurement processes. As a result, the Group’s reputation among, and relationships with, key LAs is critical to the success of the Partnerships division. In addition, LAs often have oversight and authority over multiple potential developments sites, and previous LA clients are thus an important source of referral and repeat business for the Partnerships division.

In addition to its partnerships with LAs and housing associations, the Group has previously received loans from the HCA, and the Group may seek additional funding from the HCA in the future. As a result, maintaining a strong working relationship with the HCA is important to the Group’s operations, as a deterioration of this relationship could result in both reputational and financial consequences for the Group.

LAs, the HCA, housing associations and other public entities in the UK are subject to reduced funding and other changes to their operations and structure as a result of both economic and political factors outside of their control. For example, challenging economic conditions in the UK may reduce funding available to LAs to undertake or continue large-scale and long-term regeneration projects. In addition, governments both at the national and local level may seek to influence or change the scope or direction of LAs’ activities for political reasons, and even without direct pressure, changes in national UK Government policy may affect LAs’ decisions on local planning issues. While no individual relationship accounted for more than 2 per cent. of the Group’s revenue in the year ended 30 September 2015, should there be significant changes at or a major reorganisation of the LAs with which the Group works, the Group may need to rebuild its relationships or risk losing partnership opportunities with these organisations, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group relies on its Senior Management team and may be unable to attract and retain key managers or a highly-skilled and experienced workforce. The success of the Group’s businesses depends on recruiting, retaining and developing highly-skilled, competent people at all levels of the organisation. The Group experiences a degree of regular employee turnover, which could increase and could be particularly straining to the Group’s business during periods of high activity. The Group’s success may make its employees attractive hiring targets for competitors, and to retain key employees, the Group may be required to keep pace with increases in salaries due to competitive pressures. In addition, the Group relies on its project managers and skilled personnel (e.g., designers) for the day-to-day execution of its developments, and qualified personnel for these key positions are in high demand and short supply.

In particular, the Group has a strong Senior Management team who have significant experience in the housebuilding and regeneration industries, and have developed strong reputations and relationships among those with whom the Group does business. The Group’s future success depends in large part upon the continued service of its Senior Management team, who are critical to the overall management of the Group as well as the development of its products, culture and strategic direction. The Group does not maintain key man insurance, and if the Group is not able to attract and retain key personnel or develop a succession plan for senior management, the Group may not be able to maintain its standards of service or continue to grow as anticipated.

The loss of any member of the Senior Management team or the inability to attract and retain key managers or skilled employees generally could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The construction of new developments involves health, safety and environmental (“HSE”) risks. Operating in the housebuilding industry poses certain HSE-related risks. A significant HSE incident at one of the Group’s developments or general deterioration in the Group’s HSE standards could put the Group’s employees, its contractors, sub-contractors or the general public at risk of injury or death and could lead to

28 litigation, significant penalties or damage to the Group’s reputation. In addition, the Group’s reputation plays a significant role in its ability to acquire land, particularly with respect to the Partnerships division’s operations, and any damage to its reputation resulting from HSE issues could thus have a negative impact on its ability to generate new business.

The Group may be liable for the costs of removal, investigation or remediation of hazardous or toxic substances located on, under or in a property currently or formerly owned, leased or occupied by the Group, whether or not it caused or knew of the pollution. The Group may also be deemed responsible for latent or historic risks from unknown contamination or may incur greater liability or costs than originally anticipated. The costs of remediation or defending against environmental claims can be substantial, and they may not be covered by warranties and indemnities from the seller of the affected land or by the Group’s insurance policies.

Some of the projects the Group has developed are located on land that has been contaminated by previous use. Although the Group commissions third-party environmental reports on such sites and endeavours to factor all identified risks into the project costs, no assurances can be given that material claims or liabilities relating to these developments will not arise in the future.

Any failure in HSE performance, including any delay in responding to changes in HSE regulations, particularly in light of evolving international standards and potential new implementing legislation, may result in penalties for non-compliance with relevant regulatory requirements. Monitoring and ensuring HSE best practices may become increasingly expensive for the Group in the future, and HSE risks may become more acute as the Group undertakes larger scale projects, or during periods of intense activity. Any of these risks, were they to materialise, could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group’s performance depends on its ability to purchase land suitable for its purposes. The procurement of land on which to build new homes is essential for the continuation and future performance of the Group’s business. Purchasing land at the right time and price and investing in the most appropriate geographical locations are fundamental to the Group’s strategy. Increased demand for land from the Group’s competitors may lead to increases in the prices the Group is required to pay to procure land for its business, including to levels that may subsequently be considered to be inflated. In addition, any future reduction in the size of the Group’s land bank or its quality may adversely affect the number and saleability of new homes that the Group can build. Failure to identify suitable land (including due to deficiencies in the Group’s due diligence procedures), obstacles within the purchasing process, failure to manage land purchases to meet the demands of the business or increases in the costs of such purchases could mean the Group is unable to obtain an adequate supply of land or could result in margins and ROCE on its developments lower than those targeted by the Group, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group depends on third-party suppliers, contractors, sub-contractors and other service providers to execute its projects. The Group relies on third-party suppliers, contractors and sub-contractors to execute its projects, as well as for post-construction warranty repairs. The Group has a number of key suppliers, contractors and sub- contractors in its various operating regions with which it regularly contracts, and the performance of sub- contractors used by the Group on its large development sites is particularly important to the Group’s business. In the year ended 30 September 2015, the Group’s top 10 suppliers accounted for 41 per cent. of the Group’s total construction material purchases and its top 10 sub-contractors accounted for 32 per cent. of its sub-contracting expenses. If the Group is unable to find or hire qualified and reliable third-party suppliers, contractors, or sub-contractors for any of its projects, its ability to successfully complete projects on time or at all could be impaired. Furthermore, if any of these third parties fails to provide timely or adequate services, labour, equipment or raw materials, due to financial difficulties, reduced availability as a result of increased market demand, or any other reason, the Group may be required to source these products and services at a higher price than anticipated and may face delays at its project sites until it is able to identify an appropriate alternative supplier, contractor or sub-contractor.

29 In particular, during times of increased construction demand, and given the current market expansion and increased demand for construction labour generally in the UK, contractors and sub-contractors may have difficulty finding qualified labourers, which may cause delays or increase costs at the Group’s projects. Furthermore, a potential exit of the UK from the EU could also reduce the availability of skilled labour from outside the UK. Suppliers, contractors and sub-contractors may also intentionally overestimate their costs to the Group and may attempt to defraud it through illegitimate invoices and false accounting of goods and services provided. Any of these events could negatively affect the Group’s profitability and cash position, as the Group may not be able to pass on any increased costs to its purchasers, and it may be liable for penalty payments resulting from project execution delays, any of which could have an adverse effect on the Group’s reputation and its ability to maintain high quality standards of its developments.

The Group is also exposed to the risk of litigation or claims relating to breaches of contract by third-party suppliers, contractors, and sub-contractors. Furthermore, delivery by suppliers, contractors, or sub- contractors of faulty equipment or raw materials or substandard work by contractors or sub-contractors could result in claims against the Group for failure to meet required project specifications. These risks are compounded during times of economic downturn, as third-party suppliers, contractors and sub-contractors may experience financial difficulties or find it difficult to obtain sufficient financing to fund their deliveries or operations. In the event that contractors, sub-contractors or suppliers are liable to the Group following a contractual breach, there can be no guarantee that they will have sufficient funds to pay these amounts. If a contractor, sub-contractor or supplier were to file for insolvency, the Group would not only face delays and potential increased costs, but also may not have any means of recovery from the insolvent company. Consequently, any third-party contractor, sub-contractor or supplier that fails to provide timely or adequate services or materials could cause financial and reputational harm to the Group, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Significant unanticipated costs might arise in relation to the execution of the Group’s projects. The Group is subject to risks related to the cost of materials and labour in connection with the execution of its projects. Unanticipated costs can arise during the course of a development due to a number of factors, including errors, omissions, unforeseen technical conditions, increases in contractor and sub-contractor costs, increases in materials costs (such as timber framing, bricks, concrete and steel), labour shortages, changes to legislation, inadequate contractual arrangements or public procurement processes which do not provide for a final cost in advance. These risks are particularly significant with respect to the Group’s private rented sector housing (“PRS housing”), affordable housing and design and build projects, for which the Group enters into fixed-price contracts at the beginning of construction phases. Before commencing a development, the Group calculates cost estimates based on certain assumptions, estimates and judgments, which may ultimately prove to be inaccurate. In addition, if a sub-contractor or supplier’s cost estimates or quotes to the Group are incorrect, the Group may incur additional costs or be required to source products and services at a higher price than anticipated, as well as face delays at its project sites if the estimate is incorrect by a large enough margin that the project is better served by finding an alternative contractor or supplier. Any unanticipated costs arising during the execution of the Group’s projects may cause material construction delays and may result in the Group incurring losses or lower profits than anticipated, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Estimates of future land and development values may be inaccurate. Estimating the future value of property is inherently subjective due to the individual nature of each property and is heavily affected by wider market conditions outside of the Group’s control. Factors such as changes in regulatory requirements and applicable laws (including in relation to building and environmental regulations, taxation and planning), transport and infrastructure policies, political conditions, the condition of financial markets, the financial condition of customers, applicable tax regimes, and interest and inflation rate fluctuations also contribute to the uncertainty and potential volatility of forward-looking valuations. Moreover, all such valuations, including the Group’s estimated land purchase price and gross development value (“GDV”) relating to its planned developments, are made on the basis of assumptions (such as assumed sale price, number of units within the assumed development, the split between open market and affordable

30 housing units and the obtaining of planning permission) which may prove inaccurate. There can be no assurance that the Group’s valuations of land in its financial statements or in the historical financial information included in this Prospectus, the land’s net realisable value or the Group’s GDV estimates for its land bank and proposed developments will reflect the actual sale prices achieved of either the land itself or any developments built thereon. If any of the risks described above were to materialise, it could adversely affect the value of the Group’s land or developments, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group may not be able to realise fully the revenue recorded in its forward private order book of sales. As of 30 September 2015, the Group’s forward private order book for sales of new private homes was £137.5 million, or 310 units, of which £84.4 million was sold in the Housebuilding division and £53.1 million in the Partnerships division.

The Group’s forward private order book is not necessarily indicative of the Group’s future revenue. The Group’s forward private order book may be adjusted following withdrawal of buyers, new contracts, early cancellation of existing contracts (in which case the Group is generally not entitled to compensation for anything other than reasonably incurred costs) or changes in the scope of projects in progress. The Group also may not be able to perform its obligations under contracts in its forward private order book, and its customers or counterparties may seek to renegotiate the terms of their contracts to obtain more favourable rates or terminate their contracts. Purchasers may also be able to rescind sale contracts under the Consumer Code for Home Builders in the event of house delivery delays caused by the Group. The occurrence of any of these events could have an adverse effect on the Group’s forward private order book, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Prospective investors should exercise caution when comparing the Group’s forward private order book to that of other companies, as it is a measure that is not required by, or presented in accordance with, IFRS. Other companies may calculate order books differently, and similar measures are used by different companies for differing purposes and based on differing assumptions and are often calculated in ways that reflect the circumstances of those companies.

A significant proportion of the Group’s business is carried out through joint ventures, over some of which the Group does not have sole operational control. As of 30 September 2015, the Group was involved in 28 joint ventures, the vast majority of which were structured as 50/50 partnerships. In the year ended 30 September 2015, revenue from joint ventures accounted for £68.4 million, or 11 per cent., of the Group’s revenue (including the proportional contribution of associate and joint ventures). On many of the projects undertaken by the Group’s joint ventures, the Group acts as the project manager for the development. As project manager, the Group is responsible for a significant proportion of the joint ventures’ operations, including sales, accounting and administrative matters. Certain decisions, however, relating to the joint ventures’ activities, the properties held or secured through joint ventures and the operations of the joint ventures, including internal controls and financial reporting, may not be exclusively within the control of the Group and may depend upon the consent or approval of the Group’s joint venture partners. The Group’s joint venture partners may also have different approaches to operating the business (including with respect to risk management, operational and commercial matters and financial performance), which may result in delayed decision-making, a failure to agree on material issues or the joint venture not performing in line with expectations.

The Group may have disputes with its joint venture partners and may not be able to resolve all the issues that arise with respect to such disputes, despite procedures dictated by the joint venture agreement. Such disputes may lead to delays in the development and completion of the project, or the project being developed in such a way that it will not achieve its highest potential rate of return. In addition, the Group may accept risks or responsibilities in the course of its joint venture operations that exceed those which it typically would be prepared to accept.

Joint ventures often require the Group and its partners to obtain or procure financing in furtherance of the joint venture’s operations. If one of the Group’s joint ventures or partners were unable to obtain financing

31 when required, the Group may be forced to make up the financial shortfall from its own resources, which could result in additional cost or delay to the development. Conversely, if the Group were unable to meet its obligations under its joint venture agreements, its partners may have the ability to remove the Group from the relevant joint venture.

There can be no guarantee that the Group will be able to find suitable joint venture partners in the future, and the Group’s attractiveness as a joint venture partner could be negatively affected by actual or perceived shortcomings in the Group’s project execution (including any actual or perceived deterioration to its levels of customer service). Should any of the aforementioned events occur, they could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Housebuilding is subject to the risk of construction defects which may give rise to contractual or other liabilities, as well as reputational damage. Construction defects may occur on the Group’s projects and developments and may arise some time after the completion of a particular project or development. Although the Group seeks to obtain warranty, guarantee or indemnity protection in its contracts with designers, contractors, sub-contractors and suppliers, and has arrangements with insurance providers to insure against a number of such risks, it may not be able to obtain this protection in all cases or the protection may not cover all risks. Significant liabilities may not be identified or may only come to light after the expiry of warranty, guarantee or indemnity periods. Any claims relating to defects arising on a development attributable to the Group may give rise to contractual or other liabilities which can extend, depending on the relevant contractual or statutory provisions, for a number of years following the completion of the project or development. Unexpected levels of expenditure attributable to defects (including those caused by third parties) arising on a development project may have a material adverse effect on the return generated by a particular project and the Group’s overall performance. Furthermore, widespread or significant defects could generate significant adverse publicity and have a negative impact on the Group’s reputation and key relationships with LAs, the HCA, joint venture partners, private rented sector investors, finance providers, or suppliers, as well as on the Group’s ability to sell housing and acquire new land, which in turn would have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group’s projects are subject to execution risk including delay, non-completion and financial loss. During the execution of construction projects, the Group may encounter unexpected operational issues or difficulties, including those related to technical engineering issues, regulatory changes, disputes with third- party contractors, sub-contractors and suppliers, accidents, bad weather, and changes in purchaser requirements that require the Group to delay or terminate a project. For larger projects, these risks are inherently greater. A failure to meet deadlines could also affect the Group’s reputation and future prospects and expose it to additional costs and result in contractual penalties (or surety bonds being called by a purchaser) that may reduce its profit margins and result in the termination of contracts. Furthermore, any delays or underperformance in the Group’s projects may lead to conflicting demands on resources allocated to be used on other projects. In addition, even for timely project completions, property developments typically require substantial capital outlays during construction periods, and it may take months or years before positive cash flows, if any, can be generated by pre-sales of properties to be completed or by sales of completed properties. Also, for some projects, the Group may be required to build commercial spaces and mixed-use facilities, areas that are not part of the Group’s core business and expertise and therefore pose additional execution risks. The failure to meet project deadlines and targets, in either the construction or sales process, could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The housebuilding and home development market is competitive. The Group operates in a competitive industry. The Group’s competitors include other local, regional and national UK housebuilders that compete with the Group for the purchase of land and sales of homes. In addition, new competitors may enter the housebuilding market and, in particular, the partnerships market, which could impair the Group’s ability to win public procurement processes at economically viable levels, or at all. The Group’s competitors may have greater financial resources and/or lower financing costs than that

32 of the Group. Furthermore, there is a risk in an increasingly competitive sales environment that the Group may fail to sell houses as quickly as anticipated, may need to increase selling incentives or marketing costs or may be forced to sell at lower than projected prices. Any or all of these factors could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group’s business is subject to complex and substantial regulations which may change. The Group is required to comply with a wide range of laws, regulations, administrative requirements and policies in the UK which relate to, among other matters, planning, developing, building, land use, fire, health and safety, environment, employment, bribery, competition and money laundering. Changes in relevant laws, regulations or policies, or the interpretation thereof, may give rise to substantial compliance, remediation and other costs, and could prohibit or severely restrict the Group from developing and building in certain locations. There may also be changes in law or regulation between the time when initial planning permission is given for a particular site and when the Group begins construction, which may cause delays, increase costs, reduce the expected rate of return or make a proposed development financially unviable. For example, in March 2015, the Government withdrew the Code for Sustainable Homes, which set a national standard for the design and construction of sustainable homes, but the Group may still face legacy requirements under the code that are in place as conditions with LAs.

Additionally, there historically has been significant discussion in the media and among certain politicians in the UK relating to “land banking”, a practice whereby a person or entity obtains land but does not develop it, or develops it many years after its purchase. Detractors of “land banking” argue that the practice contributes to inflated real estate prices by limiting the amount of land available for sale in a given area. The Group secures plots of land through option agreements or conditional contracts at very early stages of development, often before planning permission is obtained, and frequently holds real estate for long periods before obtaining planning permission, developing the land and selling it. As a result, any changes in legislation aimed at forcing holders of real estate to develop or sell their real estate holdings within certain prescribed periods (e.g. “use it or lose it” policies) could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Land can be an illiquid asset and can therefore be difficult to sell. Land and real estate properties can be relatively illiquid assets, meaning that they may not be easily sold and converted into cash, and that any sale may not be capable of being completed quickly without accepting a lower price than may be otherwise offered. The Group may seek to sell certain of its owned land from time to time, including if changes in economic, property market or other conditions make certain land uneconomical for the Group to develop for an extended period. If the Group were unable to sell any of its land, such illiquidity may expose the Group to onerous land creditor obligations. If the Group’s ability to value, dispose of or liquidate part of its land portfolio in a timely fashion and at satisfactory prices, it could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Adverse tax consequences could occur as a result of changes in tax law or other factors. Tax rules, including stamp duty land tax provisions and their interpretation, may change, and new taxes may be introduced, such as a property tax on high-value homes (i.e. “mansion tax”). Any change in the Group’s tax status, in taxation legislation or its interpretation, or in HMRC practice, could affect the value of property held by the Group, potential sales and the post-tax returns to the Group. References in this Prospectus concerning the taxation of the Group are based upon tax law and practice that are subject to change, possibly with retrospective effect. Any such change could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group is exposed to liability claims by third parties. The nature of the Group’s business exposes it to potential liability claims by third parties. The Group may face legal proceedings as the result of a wide range of events, including: (i) actual or alleged deficiencies in its execution of construction projects (including relating to the design, installation or repair of structures); (ii) defects in the building materials the Group uses, sells or transports; (iii) deficiencies in the goods and services provided by suppliers, contractors, and sub-contractors used by the Group; (iv) non-performance of

33 obligations owed to landowners (including obligations to promote land through the planning process); and (v) the conveyance of defective property title or property mis-description (including as a result of information provided to sales agents). As a result, accidents, injuries or damage at or relating to one of the Group’s ongoing or completed projects or sales transactions resulting from the Group’s actual or alleged negligence could result in significant liability, warranty or other civil and criminal claims, as well as reputational harm, especially if public safety is impacted. These liabilities may not be insurable or could exceed the Group’s insurance limits and the fees the Group generates, which could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

The Group may suffer uninsured losses or suffer material losses in excess of insurance proceeds. While the Group maintains commercial insurance at a level it believes is appropriate against risks commonly insured in its industry, there is no guarantee that it will be able to obtain the desired levels of cover on acceptable terms in the future. Therefore, the Group’s properties or developments could suffer physical damage, resulting in losses which may not be fully compensated by insurance. In addition, certain types of risks may be, or may become, either uninsurable or not economically insurable, or may not be currently or in the future covered by the Group’s insurance policies. In addition, the Group could be liable to repair damage to a property or development caused by uninsured risks out of its own funds. The Group would also remain liable for any debt or other financial obligation related to the affected property, even if the property is no longer available for its intended use. Any of the foregoing could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

An inability to obtain additional surety bonds could limit the Group’s future growth. The Group is often required to provide surety bonds, generally to housing or other statutory authorities, to secure the Group’s performance under development agreements and other arrangements. The Group’s ability to obtain additional surety bonds may be restricted by market conditions. For example, from 2008 to 2011, as a result of the financial crisis, surety bonds in the UK became difficult to obtain and their costs increased. Although the Group believes it has adequate headroom within its existing surety bonding lines, additional surety facilities beyond the Group’s current facilities may be required in the future. The ability to obtain additional surety bonds primarily depends upon the Group’s past performance, management expertise and certain external factors, including the capacity of the surety market. Surety providers consider such factors in addition to the Group’s performance and claims record and such providers’ underwriting standards, which may change from time to time. The Group uses several primary surety bond facility providers (generally insurance companies such as Aviva and HCC International), which also act as the principals under the surety bonds. If the Group is unable to obtain additional surety bonds when required, this could limit the ability of the Group to secure or commence new developments, and therefore could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

A failure in, or cyber attacks on, the Group’s infrastructure and information technology (“IT”) systems could disrupt the Group’s businesses or result in the disclosure of confidential information. The Group is dependent on reliable and efficient IT systems. The Group also routinely transmits and receives personal, confidential and proprietary information by email and other electronic means and therefore relies on the secure processing, storage and transmission of such information. The Group’s financial, accounting, data processing, IT, communications or other systems and facilities, and/or third-party infrastructure on which the Group relies, may: (i) fail to operate properly or become disabled as a result of events that are wholly or partially beyond the Group’s control; and (ii) be vulnerable to unauthorised access and data loss (from within the organisation or by third parties), computer viruses, malicious code, cyber threats that have a security impact, and the interception or misuse of information transmitted or received by the Group. The Group has suffered limited data protection breaches in the past and there can be no assurances that it will not suffer such events in the future. Where the collation of data has been centralised within a business function, it is more likely that a data protection breach would result in the loss of a large amount of data. The Group has put in place data security provisions that it believes are appropriate, in particular in respect of its centralised IT function, but breaches may still occur. If one or more of such events occur, it could result in the loss of the Group’s or its customers’ confidential and other information, or otherwise cause interruptions or malfunctions in the Group’s, its customers’ or third parties’ operations. The Group may be required to

34 expend significant additional resources to modify its protective measures or to investigate and remedy vulnerabilities or other exposures, and it may be subject to litigation, reputational harm and financial losses that are either not insured against or not fully covered through any insurance maintained by it. Any of the foregoing could have a material adverse effect on the Group’s operating results, business prospects, and financial condition.

The Group is dependent on the strength of its brands, trademarks and other intellectual property (“IP”) rights. The Group’s brands, trademarks and other IP, particularly the “Countryside” and “Millgate” brands and trademarks, are part of its business and success. Although the Directors believe that its IP is adequately supported by applications for registrations, existing registrations and other legal protections in the Group’s principal market, these protections may be challenged by others. A successful challenge to these protections, or any other damage to the Group’s IP (such as, for example, the loss of a brand’s strength), could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Risks Relating to the Global Offer and the Ordinary Shares The price of the Ordinary Shares may fluctuate significantly and investors could lose all or part of their investment. The share price of quoted companies can be highly volatile, which may prevent Shareholders from being able to sell their Ordinary Shares at or above the price they paid for them. The Offer Price may not be indicative of prices that will prevail in the trading market and investors may not be able to resell the Ordinary Shares at or above the price they paid. The market price for the Ordinary Shares could fluctuate significantly for various reasons, many of which are outside of the Group’s control. These factors could include performance of the Group, large purchases or sales of the Ordinary Shares, legislative changes and general economic, political or regulatory conditions.

The Principal Shareholder will retain a significant interest in the Company following Admission and its interests may differ from those of the other Shareholders. Following Admission (assuming that the Offer Price is set within the Offer Price Range, the Oaktree Sale Share Offer Size is set within the Oaktree Sale Share Offer Size Range and the Over-allotment Option is not excercised), the Principal Shareholder will hold between 9.7 and 66.8 per cent. of the Company’s issued share capital. As such, it is expected that, following Admission, the Principal Shareholder and the Oaktree Funds may be “controlling shareholders” of the Company for the purposes of the Listing Rules. Although the Principal Shareholder and the Oaktree Funds have entered into the Relationship Agreement, which contains contractual obligations to ensure that the Company is able to operate independently of its controlling shareholders after Admission, the interests of the Principal Shareholder and the Oaktree Funds, on the one hand, and the Shareholders that buy Ordinary Shares in connection with the Global Offer, on the other hand, may not be aligned. Following Admission, the Principal Shareholder and the Oaktree Funds may be in a position to exercise a significant degree of influence over certain matters to be considered by Shareholders, including the election of Directors and approval of significant mergers and consolidations. The Principal Shareholder and the Oaktree Funds may make acquisitions of, or investments in, other businesses in the same sectors as the Group. These businesses may be, or may become, competitors of the Group. In addition, funds or other entities managed or advised by the Principal Shareholder or the Oaktree Funds may be in direct competition with the Group on potential acquisitions of, or investments in, certain businesses.

The Relationship Agreement, moreover, does not prevent the Principal Shareholder from accepting, blocking or making a takeover offer for the Company or from cancelling the Company’s listing after its becomes entitled to do so. The Relationship Agreement specifies neither the price at which any takeover offer for the Company must be made, nor any conditions (including as to the level of acceptances by Shareholders) to which such an offer must be subject.

In addition, the Listing Rules set out conditions that must be met before the Company may request the cancellation of its premium listing. In particular, in most circumstances, the voting approval of Shareholders other than the Principal Shareholder must be obtained. However, this voting requirement does not apply to

35 the cancellation of the Company’s premium listing in the case of a takeover offer for the Company. If a third party were to make a takeover offer for the Company, the offeror would need to acquire or to have agreed to acquire 75 per cent. of the Ordinary Shares before the Company may request cancellation of its premium listing. Because the Principal Shareholder will, following Admission, be interested in between 9.7 and 66.8 per cent. of the Ordinary Shares (assuming that the Offer Price is set within the Offer Price Range, the Oaktree Sale Share Offer Size is set within the Oaktree Sale Share Offer Size Range and the Over-allotment Option is not exercised), any decision by the Principal Shareholder to accept a takeover offer for the Company from a third party may, if a relatively small number of other Shareholders were also to accept the takeover offer, lead to the cancellation of the Company’s premium listing. Furthermore, if the Principal Shareholder were to make a takeover offer for the Company, it would be able to procure that the Company request the cancellation of its premium listing after it had acquired or agreed to acquire 80 per cent. of the Ordinary Shares, which it may obtain regardless of whether the takeover offer is accepted by a majority of Shareholders other than the Principal Shareholder.

Sales of Ordinary Shares by significant Shareholders could depress the price of the Ordinary Shares. Subject to or following the expiry of the lock-up undertakings (described in paragraph 13 of Part XVII: “The Global Offer—Lock-up arrangements”), the Principal Shareholder and other significant Shareholders could sell a substantial number of Ordinary Shares in the public market following the Global Offer, which could significantly reduce the price of the Ordinary Shares. The Group is unable to predict whether substantial amounts of Ordinary Shares (in addition to those which will be available in the Global Offer) will be sold in the open market following the expiration or waiver of, or under certain exceptions to, such Shareholders’ lock-up undertakings. Any such sales, or the perception that such sales could occur, may materially adversely affect the market price of the Ordinary Shares. This may make it more difficult for Shareholders to sell their Ordinary Shares at a time and price that they deem appropriate, and could also impede the Company’s ability to issue equity securities in the future, any of which could have a material adverse effect on the trading price of the Ordinary Shares as well as the Group’s operating results, business prospects and financial condition.

The Company may not pay cash dividends on the Ordinary Shares in the future. Consequently, investors may not receive any return on investment unless they sell their Ordinary Shares for a price greater than that which they paid for them. While the Directors have adopted a dividend policy aimed at maintaining an appropriate level of dividend cover, there can be no assurance that the Company will pay dividends in the future. Any decision to declare and pay dividends in the future will be made at the discretion of the Board and will depend on, among other things, applicable law, regulations, the results of the Group’s operations, cash requirements, contractual restrictions (including under the Facilities, see paragraph 13.4 of Part XVIII: “Additional Information— Material contracts—Facility Agreement” for more information), future projects and plans and other factors that the Board may deem relevant. Consequently, investors may not receive any return on investment unless they can sell their Ordinary Shares for a price greater than that which they paid for them.

The Company is a holding company with substantially all of its operations conducted through its subsidiaries. Its ability to pay dividends on the Ordinary Shares depends on its ability to obtain cash dividends and other cash payments or obtain loans from its subsidiaries. The Company conducts substantially all of its operations through subsidiaries and subsidiary undertakings which generate substantially all of the Group’s operating income and cash flow. Because the Company has no direct operations or significant assets other than the capital stock of its subsidiaries, it relies on those entities for cash dividends, investment income, financing proceeds and other cash flows to pay dividends, if any, on the Ordinary Shares and, in the long-term, to pay other obligations at the holding company level that may arise from time to time. The ability of the Company’s subsidiaries to make payments to the Company depends largely on their financial condition and ability to generate profits. In addition, because the Company’s subsidiaries are separate and distinct legal entities, they will have no obligation to pay dividends or to lend or advance the Company funds and may be restricted from doing so by contract, including other financing arrangements, charter provisions, other shareholders or the applicable laws and regulations of the countries in which they operate. The Company cannot guarantee that its subsidiaries will generate sufficient profits and cash flows to pay dividends or lend or advance to the Company sufficient funds to enable it to

36 meet its obligations and pay interest, expenses and dividends, if any, on the Ordinary Shares. Consequently, holders of the Ordinary Shares may not receive any return on their investment unless they can sell their Ordinary Shares for a price greater than that which they paid for them. The inability of one or more of the Company’s subsidiaries to pay dividends or lend or advance funds to the Company could have a material adverse effect on the Group’s operating results, business prospects and financial condition.

Future issuances of Ordinary Shares may dilute the holdings of Shareholders and may depress the price of the Ordinary Shares. Other than the Global Offer, the Company has no current plans for an offering of new Ordinary Shares. It is possible that the Company may decide to offer additional Ordinary Shares or securities convertible into Ordinary Shares in the future. Future sales could dilute the holdings of Shareholders, adversely affect the prevailing market price of the Ordinary Shares and impair the Group’s ability to raise capital through future sales of equity securities.

A liquid market for the Ordinary Shares may fail to develop or be sustained. Admission should not be taken as implying that there will be a liquid market for the Ordinary Shares. Prior to Admission, there has been no public market for the Ordinary Shares and there is no guarantee that an active trading market will develop or be sustained after Admission. If an active trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares may be adversely affected.

Holders of the Ordinary Shares in certain jurisdictions, including the United States, may not be able to exercise their pre-emptive rights or participate in future equity offerings if the Group increases its share capital. Under the Articles, a holder of the Ordinary Shares generally has the right to subscribe and pay for a sufficient number of Ordinary Shares to maintain its relative ownership percentage prior to the issuance of any new Ordinary Shares to another person. U.S. holders of the Ordinary Shares may not be able to exercise their pre-emptive rights unless a registration statement under the Securities Act is effective with respect to such rights and the related Ordinary Shares or an exemption from the registration requirements of the Securities Act is available. Similar restrictions exist in certain other jurisdictions. The Group does not intend to register the Ordinary Shares under the Securities Act or the laws of any other jurisdiction, and no assurance can be given that an exemption from registration requirements will be available to U.S. or other holders of the Ordinary Shares or, if available, that the Company will use it. To the extent that U.S. or other holders of the Ordinary Shares are not able to exercise their pre-emptive rights, the pre-emptive rights would lapse and their proportional interests in the Company would be reduced.

37 PART III

PRESENTATION OF INFORMATION ON THE GROUP

General Investors should only rely on the information in this Prospectus. No person has been authorised to give any information or to make any representations in connection with the Global Offer other than the information and representations contained in this Prospectus and, if any other information or representations is or are given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors, the Selling Shareholders, the Sponsor or the Underwriters. No representation or warranty, express or implied, is made by the Sponsor, any Underwriter or any selling agent as to the accuracy or completeness of such information, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation by the Sponsor, the Underwriters or any selling agent as to the past, present or future.

Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87G of the FSMA and paragraph 3.4.1 of the Prospectus Rules, neither the delivery of this Prospectus nor any subscription or sale made under this Prospectus shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company or of the Group taken as a whole since the date hereof or that the information contained herein is correct as of any time subsequent to its date.

None of the Company, the Directors, the Selling Shareholders, the Sponsor or the Underwriters accepts any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions expressed by the press or other media regarding the Company, the Group or the Global Offer. None of the Company, the Directors, the Selling Shareholders, the Sponsor or the Underwriters makes any representation as to the appropriateness, accuracy, completeness or reliability of any such information or publication.

The Company will update the information provided in this Prospectus by means of a supplement hereto if a significant new factor that may affect the ability of prospective investors to make an informed assessment of the Global Offer occurs prior to Admission or if this document contains any material mistake or inaccuracy. This Prospectus and any supplement thereto will be subject to approval by the FCA and will be made public in accordance with the Prospectus Rules. If a supplement to this Prospectus is published prior to Admission, investors shall have the right to withdraw their subscriptions made prior to the publication of the supplement. Such withdrawal must be done within the time limits set out in the supplement (if any) (which shall not be shorter than two days after publication of the supplement).

The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to any subscription, purchase or proposed subscription or purchase of Shares. In making an investment decision, each investor must rely on his or her own examination, analysis and enquiry of the Company and the terms of the Global Offer, including the merits and risks involved.

In connection with the Global Offer, any of the Underwriters and any of their respective affiliates acting as an investor for its or his or her own account may retain, purchase, sell, offer to sell or otherwise deal for its or his or her own account(s) in the Shares, any other securities of the Company or other related investments in connection with the Global Offer or otherwise. Accordingly, references in this Prospectus to the Shares being offered or otherwise dealt with should be read as including any offer to, or dealing by, the Underwriters and any of their respective affiliates acting as an investor for its or his or her own account(s). Such persons do not intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so.

38 None of the Company, the Directors, the Selling Shareholders, the Sponsor or the Underwriters is making any representation to any offeree, subscriber or purchaser of the Shares regarding the legality of an investment by such offeree, subscriber or purchaser.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Sponsor or the Underwriters by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Sponsor or Underwriters accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this Prospectus, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Group, the Shares or the Global Offer, and nothing in this Prospectus is, or shall be relied upon as, a promise or representation in this respect, whether or not to the past or the future. Each of the Sponsor and the Underwriters accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this Prospectus or any such statement.

The Underwriters and any of their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services for, the Company and the Selling Shareholders for which they would have received customary fees.

Prior to making any decision as to whether to subscribe for or purchase Shares, prospective investors should read this Prospectus in its entirety and should not just rely on key information or information summarised within it. In making an investment decision, prospective investors must rely upon his or her own examination, analysis and enquiries of the Company and the terms of this Prospectus, including the merits and risks involved.

Investors who subscribe for or purchase Shares in the Global Offer will be deemed to have acknowledged that: (i) they have not relied on the Sponsor, any of the Underwriters or any person affiliated with any of them in connection with any investigation of the accuracy of any information contained in this Prospectus or their investment decision; and (ii) they have relied on the information contained in this Prospectus, and no person has been authorised to give any information or to make any representation concerning the Company, Group or the Shares (other than as contained in this Prospectus) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company, the Directors, the Selling Shareholders, the Sponsor or any of the Underwriters.

Presentation of financial information and non-financial operating data Historical financial information The historical financial information in this Prospectus has been prepared in accordance with the requirements of the Prospectus Directive Regulation, the Listing Rules and the basis of preparation as set out in Note 2 to each of Sections B and D of Part XIV: “Historical Financial Information”. The historical financial information presented in this Prospectus consists of:

• the audited combined and consolidated financial information of the Operating Group as of and for the years ended 30 September 2013, 30 September 2014 and 30 September 2015 (the “Group Financial Information”); and

• the audited financial information of Millgate as of and for the years ended 30 September 2013 and 30 September 2014 (the “Millgate Financial Information”).

The Company was incorporated on 18 November 2015 and has no historical operations of its own. Therefore, this Prospectus does not present any standalone, unconsolidated historical financial information of the Company. The Company will acquire the entire issued share capital of OCM Luxembourg Coppice Midco S.à r.l prior to Admission pursuant to the Pre-IPO Reorganisation.

On 16 April 2013, OCM Luxembourg Coppice Midco S.à r.l acquired the share capital of Copthorn Holdings Limited, which prior to this date was the ultimate parent company of the Group. The Group Financial

39 Information presents a combined and consolidated financial track record of those businesses that were part of the Group for the years ended 30 September 2013, 30 September 2014 and 30 September 2015.

All operational and financial information presented in this Prospectus relating to the Group reflects the impact of Millgate only from its date of acquisition on 3 February 2014. Accordingly, the Group financial information for the year ended 30 September 2013 presented in this Prospectus excludes the financial results of Millgate for this period. The Millgate Financial Information shows the Millgate results for the years ended 30 September 2013 and 30 September 2014 on a stand alone basis.

None of the financial information used in this Prospectus has been audited in accordance with auditing standards generally accepted in the United States of America (“U.S. GAAS”) or auditing standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). U.S. GAAS and the auditing standards of the PCAOB do not provide for the expression of an opinion on accounting standards which have not been finalised and are still subject to modification, as is the case with accounting standards as adopted for use in the EU and included in Part XIV: “Historical Financial Information”. Accordingly, it would not be possible to express any opinion on the financial information in Part XIV: “Historical Financial Information” under U.S. GAAS or the auditing standards of the PCAOB. In addition, there could be other differences between the auditing standards issued by the Auditing Practices Board in the United Kingdom and those required by U.S. GAAS or the auditing standards of the PCAOB. Potential investors should consult their own professional advisers to gain an understanding of the financial information in Part XIV: “Historical Financial Information” and the implications of differences between the auditing standards noted herein.

The Directors consider that it is in the best interests of the Group for the Company to adopt the Financial Reporting Council’s Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”). FRS 102 applies only to the Company’s accounts under the Companies Act 2006 and will have no impact on the Group Financial Information. A Shareholder or Shareholders holding in aggregate 5 per cent. or more of the total allotted shares in the Company may serve objections to the use of the disclosure exemptions on the Company in writing, to its registered office, not later than 30 June 2016.

Non-IFRS financial measures The Group has included certain measures in this Prospectus that are not measures defined by IFRS or any other generally accepted accounting principles, including the following Group and segmental measures: underlying group operating profit, return on capital employed (“ROCE”), segmental ROCE, asset turn, tangible net asset value (“TNAV”) and tangible net operating value (“TNOAV”). The Group uses these measures to assess operating performance because it believes these are important supplemental measures of such performance. Furthermore, such measures are sometimes used by investors to evaluate the efficiency of a company’s operations and its ability to employ its earnings towards repayment of debt, capital expenditures and working capital requirements. There are no generally accepted principles governing the calculation of non-IFRS financial measures, and the criteria upon which they are based can vary from company to company. The Group defines these measures as follows:

• Underlying group operating profit is calculated as the Group operating profit including the proportional contribution of associate and joint ventures’ operating profit and excluding the impact of non-underlying items (which includes fees incurred in relation to business combinations or capital markets transactions and items which are material either because of their nature or size and which do not relate to the Group’s underlying performance);

• ROCE is calculated as the underlying operating profit divided by the average TNOAV for the given year (ROCE for the year ended 30 September 2013 is calculated based on the average of unaudited TNOAV for the year ended 30 September 2012 and TNOAV for the year ended 30 September 2013);

• Asset turn is calculated as revenue (including the proportional contribution of associate and joint ventures) divided by the average TNOAV for the given year (asset turn for the year ended 30 September 2013 is calculated based on the average of the unaudited TNOAV for the year ended 30 September 2012 and TNOAV for the year ended 30 September 2013);

40 • TNAV is calculated as net assets excluding intangible assets and mandatory redeemable preference shares (including the outstanding return on mandatory redeemable preference shares); and

• TNOAV is calculated as net assets excluding intangible assets, net bank debt (excluding unamortised bank loans and arrangement fees) and mandatory redeemable preference shares (including the outstanding return on mandatory redeemable preference shares).

The non-IFRS financial measures included in this Prospectus do not alone provide a sufficient basis to compare the Group’s performance with that of other companies and should not be considered in isolation or as a substitute for operating income or any other generally accepted measure as an indicator of operating performance, or as an alternative to cash generated from operating activities as a measure of liquidity. In addition, these measures should not be used instead of, or considered as alternatives to, the Group’s historical financial results based on IFRS. In addition, investors should be aware that the Group may incur expenses similar to the adjustments used in its presentation of non-IFRS measures in the future, and that certain of these items could be considered recurring in nature. The presentation of the non-IFRS measures in this Prospectus should not be construed as an implication that the Group’s future results will be unaffected by unusual or non-recurring items.

In addition, where indicated, the Group has presented revenue, gross profit and operating profit including the proportional contribution of its joint ventures and associate.

Pro forma financial information In this Prospectus, any reference to “pro forma” financial information is to information which has been extracted without material adjustment from the unaudited pro forma financial information contained in Section A of Part XV: “Unaudited Pro Forma Financial Information”. The unaudited pro forma statement of consolidated net assets is based on the audited consolidated net assets of the Group as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information”. The unaudited pro forma statement of consolidated net assets includes certain adjustments in respect of the Global Offer and the Pre- IPO Reorganisation, which might have affected the financial information presented had they occurred on 30 September 2015. However, the unaudited pro forma statement of consolidated net assets is not necessarily indicative of what the financial position of the Group would have been had the Global Offer and the Pre-IPO Reorganisation occurred on 30 September 2015.

The unaudited pro forma financial information is for illustrative purposes only and in accordance with Annex II of the Prospectus Rules and should be read in conjunction with the notes set out in Section A of Part XV: “Unaudited Pro Forma Financial Information”. Because of its nature, the unaudited pro forma financial information addresses a hypothetical situation and, therefore, does not represent the Group’s actual financial position as of 30 September 2015. Future results of operations may differ materially from those presented in the unaudited pro forma information due to various factors.

Non-financial operating data The non-financial operating data included in this Prospectus has been extracted without material adjustment from the management records of the Company and is unaudited.

Gross development value (“GDV”) GDV is the Group’s estimate of the total revenue that could potentially be generated from development of a particular site.

GDV is determined (as of a particular date) on the assumption that the relevant development is constructed in accordance with the planning permission obtained, or if none has yet been obtained, in accordance with the Group’s plans for the proposed development (which could change as a response to the planning process or other factors) and on the assumption that the units in the development will be sold at the average sales values in the relevant geographic area for similar types of open market or affordable housing. Where the number of affordable housing units is not yet determined, the Group estimates what the affordable housing requirements will be based on the relevant LA’s policy and its historical experience. Where land sales, or

41 income from the sale of mixed use elements, is anticipated, the anticipated GDV is adjusted to take into account the estimated income from the non-housebuilding elements.

In determining average sales value, the Group uses a combination of internal and external sales research and data from the local area. Where the Group has no sales in an area, the Group will analyse third-party sales data, giving regard to factors such as the age and size of properties sold. The Group will also engage estate agents to price the Group’s development and will take those valuations into account when determining the average sales value.

GDV is, therefore, only an estimate as of a given date, reflecting revenue that the Group believes it may be able to achieve if all of its developments are completed as planned and sold at the then average sales values. As a result, estimated GDV should not be taken as an indication of future returns on any development or of the Group’s financial prospects. GDV for any of the Group’s developments may materially change based on a number of factors, such as changes in demand and housing prices, changes in a development’s design or changes to the number of affordable housing required within a development. In addition, GDV does not include cost items such as costs of sale and only represents possible revenue from a development. All GDV figures used in this Prospectus are estimated as of 30 September 2015 unless otherwise specified. In respect of land controlled by the Group’s joint venture arrangements, the Group calculates its proportion of the relevant development’s GDV based on the Group’s equity participation in the joint venture.

Prospective investors should exercise caution when comparing the Group’s GDV figures to those of other companies, as GDV is a measure that is not required by, or presented in accordance with, IFRS. There is no standardised definition of GDV. Other companies may calculate GDV differently, and similar measures are used by different companies for differing purposes and based on differing assumptions and are often calculated in ways that reflect the circumstances of those companies.

Forward private order book The Group’s forward private order book represents both plots that are contracted but for which construction is yet to complete and plot reservations that have yet to exchange. All reservations require a deposit to hold the plot while construction is completed or while the potential sale is vetted by the Group (or by appointed third-party agents in the case of reservations secured by Millgate).

The Group’s forward private order book is not necessarily indicative of the Group’s future earnings and is subject to material adjustment. Prospective investors should exercise caution when comparing the Group’s forward private order book to that of other companies, as it is a measure that is not required by, or presented in accordance with, IFRS. Other companies may calculate order books differently, and similar measures are used by different companies for differing purposes and based on differing assumptions and are often calculated in ways that reflect the circumstances of those companies.

Currency presentation Unless otherwise indicated, all references in this Prospectus to “sterling”, “pounds sterling”, “GBP”, “£” or “pence” are to the lawful currency of the United Kingdom. All references to “dollars” or “U.S.$” are to the lawful currency of the United States.

The Offer Price will be stated in pounds sterling. On 29 January 2016 (being the latest practicable date prior to the publication of this Prospectus), £1.00 = U.S.$1.4244, based on the exchange rate quoted by Bloomberg on that date.

The Group prepares its financial statements and the financial information included in this Prospectus in pounds sterling. Unless otherwise indicated, the financial information contained in this Prospectus has been expressed in pounds sterling.

Rounding Percentages and certain amounts in this Prospectus, including financial, statistical and operating information, have been rounded. As a result, the figures shown as totals may not be the precise sum of the figures that precede them.

42 Market, economic and industry data Certain information in this Prospectus, in particular the information in Part VIII: “Market Overview”, has been sourced from third parties. The Company confirms that all third-party information contained in this Prospectus has been accurately reproduced and, so far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading.

Where third-party information has been used in this Prospectus, the source of such information has been identified.

Information regarding forward-looking statements Certain information contained in this Prospectus, including any information as to the Group’s strategy, market position, plans or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intend”, “continue”, “budget”, “project”, “aim”, “estimate”, “may”, “will”, “could”, “should”, “schedule” and similar expressions identify forward-looking statements.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements.

Investors are cautioned that forward-looking statements are not guarantees of future performance. Forward- looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this Prospectus speak only as of the date of this Prospectus, reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group’s operations, results of operations, growth strategy, liquidity and the availability of new credit. Investors should specifically consider the factors identified in this Prospectus that could cause actual results to differ before making an investment decision. All of the forward-looking statements made in this Prospectus are qualified by these cautionary statements. Specific reference is made to Part II: “Risk Factors”, Part IX: “Information on the Group” and Part XII: “Operating and Financial Review”.

Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules, or applicable law, the Company explicitly disclaims any intention or obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this Prospectus that may occur due to any change in the Company’s expectations or to reflect events or circumstances after the date of it.

Definitions Certain terms used in this Prospectus, including all capitalised terms and certain technical and other terms, are defined and explained in Part XIX: “Definitions”. Additional industry-related terms and those specific to the Group’s operations are defined and explained in Part XX: “Glossary”.

Information not contained in this Prospectus No person has been authorised to give any information or make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been so authorised. Neither the delivery of this Prospectus nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Prospectus or that the information in this Prospectus is correct as of any time subsequent to the date hereof.

43 No incorporation of website information The contents of the Company’s website, any website mentioned in this Prospectus or any website directly or indirectly linked to these websites have not been verified and do not form part of this Prospectus, and investors should not rely on such information.

44 PART IV

DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS

Directors David Howell Ian Sutcliffe Rebecca Worthington Federico Canciani James Van Steenkiste Richard Adam Baroness Sally Morgan Amanda Burton

Company Secretary Gary Whitaker

Registered and head office of Countryside Properties plc the Company Countryside House The Drive Brentwood Essex CM13 3AT United Kingdom

Sponsor, Joint Global J.P. Morgan Securities plc Co-ordinator, Joint 25 Bank Street Bookrunner and Underwriter Canary Wharf London E14 5JP United Kingdom

Joint Global Co-ordinator, Barclays Bank PLC Joint Bookrunner and 5 The North Colonnade Underwriter London E14 4BB United Kingdom

Joint Global Co-ordinator, Joint Numis Securities Limited Bookrunner, Underwriter, and The London Stock Exchange Building Intermediaries Offer 10 Paternoster Square Co-ordinator London EC4M 7LT United Kingdom

Joint Bookrunner Peel Hunt LLP Moor House 120 London Wall London EC2Y 5ET United Kingdom

English and U.S. legal advisers Linklaters LLP to the Company One Silk Street London EC2Y 8HQ United Kingdom

English and U.S. legal advisers Ashurst LLP to the Underwriters Broadwalk House 5 Appold Street London EC2A 2HA United Kingdom

45 Reporting Accountants and PricewaterhouseCoopers LLP Auditors 1 Embankment Place London WC2N 6RH United Kingdom

Registrars Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU United Kingdom

46 PART V

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Expected timetable of principal events Event Time and Date(1) Latest time and date for receipt of completed application forms from the 4.00 p.m. on Intermediaries in respect of the Intermediaries Offer ...... 10 February 2016

Latest time and date for receipt of indications of interest from institutional 1.00 p.m. on investors under the Institutional Offer...... 11 February 2016

Announcement of the Offer Price, the Offer Size, the New Share Offer Size, the Sale Share Offer Size and the Oaktree Sale Share Offer Size, publication of the Pricing Statement and notification 7.00 a.m.on of allocations(2) ...... 12 February 2016

Commencement of conditional dealings on the London Stock Exchange(3).. 8.00 a.m. on 12 February 2016

Admission and commencement of unconditional dealings on the London... 8.00 a.m. on Stock Exchange ...... 17 February 2016

CREST accounts credited(3) ...... 17 February 2016

Despatch of definitive share certificates (where applicable)(3) ...... From 17 February 2016

Notes: (1) References to times are to London times. Each of the times and dates in the above timetable is subject to change without further notice. (2) The Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be set out in the Pricing Statement. The Pricing Statement will not automatically be sent to persons who receive this Prospectus but it will be available free of charge at the Company’s registered office at Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom. In addition, the Pricing Statement will (subject to certain restrictions) be published online at www.countryside-properties.com. (3) Prospective investors who apply for Shares in the Intermediaries Offer should consult their Intermediary as to when they will be sent documents in respect of any Shares they have been allocated and when they may commence dealing in any such Shares. It should be noted that, if Admission does not occur, all conditional dealings will be of no effect and any such dealings will be at the sole risk of the parties concerned. Temporary documents of title will not be issued.

47 PART VI

GLOBAL OFFER STATISTICS

Global Offer statistics Offer Price Range (per Share)(1) ...... 225 pence to 275 pence

Number of Ordinary Shares in issue immediately prior to Admission(2)...... 398,000,000

Minimum number of Ordinary Shares in the Global Offer ...... 112,500,000

Maximum number of Ordinary Shares in the Global Offer ...... 337,500,000

Minimum number of New Shares in the Global Offer(3) ...... 47,272,727

Maximum number of New Shares in the Global Offer(3)...... 57,777,778

Minimum number of Sale Shares in the Global Offer(4) ...... 54,722,222

Maximum number of Sale Shares in the Global Offer(4) ...... 290,227,273

Percentage of the enlarged issued ordinary share capital expected to be Between 25% issued and sold in the Global Offer(4)...... and 75%

Maximum number of Existing Shares subject to the Over-allotment Option(5) ...... 50,625,000

Number of Ordinary Shares expected to be in issue on Admission...... 450,000,000

Expected market capitalisation of the Company at the Offer Price(6)...... £1,125 million

Estimated net proceeds of the Global Offer receivable by the Company(7) ...... approximately £114 million

Estimated gross proceeds of the Global Offer receivable by the Selling Shareholders(8) ... £431 million

Notes: (1) It is currently expected that the Offer Price will be within the Offer Price Range. It is expected that the Pricing Statement containing, among other things, the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be published on or about 12 February 2016 and will be available (subject to certain restrictions) on the Company’s website at www.countryside-properties.com. If the Offer Price were to be set above the Offer Price Range, an announcement would be made via a Regulatory Information Service and prospective investors would have a statutory right to withdraw their offer to purchase or subscribe for Shares pursuant to section 87Q of FSMA. The arrangements for withdrawing offers to purchase or subscribe for Shares would be made clear in the announcement. Further details of how the Offer Price will be determined are contained in Part XVII: “The Global Offer”. (2) Assuming the Offer Price is set at the mid-point of the Offer Price Range. (3) The New Share Offer Size Range has been determined by reference to the Offer Price Range, with the intention that the Company issues a sufficient number of New Shares pursuant to the Global Offer to raise gross proceeds of approximately £130 million. (4) The Sale Share Offer Size Range has been determined to take into account, at a minimum, the New Share Offer Size Range, and the minimum free float requirements of the UK Listing Authority. (5) The maximum number of Over-allotment Shares is equal to 15 per cent. of the maximum Offer Size. (6) Assuming the Offer Price is set at the mid-point of the Offer Price Range. The market capitalisation of the Company at any given time will depend on the market price of the Ordinary Shares at that time. There can be no assurance that the market price of an Ordinary Share will be equal to or exceed the Offer Price. (7) The estimated net proceeds receivable by the Company are stated after deduction of the estimated underwriting commissions and other fees and expenses of the Global Offer (including the maximum amount of discretionary commissions and VAT) payable by the Company, which are expected to be approximately £16 million. The Company will not receive any portion of the proceeds resulting from the sale of Sale Shares in the Global Offer by the Selling Shareholders in the Global Offer.

48 (8) Assuming no exercise of the Over-allotment Option and the Offer Price is set at the mid-point of the Offer Price Range and the Sale Share Offer Size is set at the mid-point of the Sale Share Offer Size Range. Proceeds are stated without the deduction of underwriting commissions and fees and expenses payable by the Selling Shareholders in connection with the Global Offer.

49 PART VII

USE OF PROCEEDS AND DIVIDEND POLICY

1. Use of Proceeds The Company expects to receive net proceeds of approximately £114 million (after deducting estimated underwriting commissions and fees and expenses of the Global Offer (including the maximum amount of discretionary commissions and VAT) payable by the Company, which are expected to be approximately £16 million (assuming the Offer Price is set at the mid-point of the Offer Price Range)) from the issue of New Shares in the Global Offer.

The net proceeds received by the Company from the Global Offer are intended to be used as follows:

(i) approximately £64 million to reduce the Group’s financial indebtedness by repaying amounts drawn on its revolving credit facilities as soon as practicable after Admission, thereby providing the Group with a stronger balance sheet to support and pursue its growth strategy (see Part XII: “Operating and Financial Review—Financial liabilities and contractual obligations”); and

(ii) approximately £50 million to accelerate growth in the development of the Group’s sites at Acton, Beaulieu, Hazel End and Rayleigh, through investment in additional phases over an approximate two- year period following Admission.

The Board believes that the Global Offer and Admission will also position the Group for its next stage of development, including by further raising the profile of the Group, assisting in retaining and incentivising employees and providing it with a structure for future growth.

In addition, the Global Offer and Admission will provide the Selling Shareholders with a partial realisation of their investment in the Company. The Selling Shareholders will together receive gross proceeds of approximately £431 million from the sale of the Sale Shares in the Global Offer, assuming the Offer Price is set at the mid-point of the Offer Price Range and the Sale Share Offer Size is set at the mid-point of the Sale Share Offer Size Range and excluding any proceeds receivable by the Over-allotment Shareholder pursuant to any exercise of the Over-allotment Option. The Company will not receive any proceeds from the sale of Sale Shares or Over-allotment Shares by the Selling Shareholders.

2. Dividend Policy The Company expects sufficient cash flow to be available to meet the growth requirements of the business, maintain an appropriate level of debt and provide returns to shareholders via a dividend. Given the expected growth profile of the business, the Directors intend to adopt a dividend policy with a target payout ratio of 30 per cent. of earnings.

The Company intends to pay interim dividends in July in the relevant financial year and final dividends in February of the following financial year, with the amount being paid in an approximate one-third (interim) and two-thirds (final) split. The Company expects its first dividend as a public company to be a final dividend to be paid in February 2017 reflecting the six-month period from 31 March 2016 to the 2016 financial year end.

50 PART VIII

MARKET OVERVIEW

1. Overview of the UK housing market According to the Department for Communities and Local Government (“DCLG”), the housing stock in England comprised approximately 23.4 million units as at 31 December 20141, and in the year ended 31 December 2014, there were approximately 1.05 million residential housing transactions in England2. Of these transactions, there were 117,720 new build completions, of which approximately 92,750 were private sales and approximately 24,960 were completions of affordable housing for LAs and housing associations3. While these numbers represent an improvement in activity level compared to that during the financial crisis, the total number of UK transactions in 2014 only represented 4.5 per cent. of the total housing stock, while new build completions represented less than 0.5 per cent. of the total UK housing stock.

The UK housing market has been in a long-term position of structural undersupply as the number of new completions has failed to keep pace with the number of new household formations and the replacement of redundant stock. In 2003, the Government commissioned the Barker report4 in response to the housing crisis to establish the quantum, and identify the causes, of the shortfall with a view to making recommendations as to how the decline could be reversed. The report, published in 2004, identified that while the UK was completing around 125,000 homes per year at that time, a further 120,000 were required each year to meet growing demand and to maintain real house price inflation at around 1.1 per cent. per year. While the Barker report is more than 10 years old, the Board believes it remains an important reference point, and the subsequent decline in completions to as low as approximately 107,000 during the recent recession, as reported by the DCLG5, exacerbated the UK’s housing shortfall.

Between 2012 and 2014, the recovery in the housing market saw new build starts in England grow by 17 per cent. on average per year to 135,4306. This improvement has been driven by wider economic recovery, government support for the housing sector, improved availability of land through the planning process and increased access to low cost mortgage financing. However, current levels of production remain below demand levels, and completions in 2014, as reported by the DCLG, were below the long-term average7 and 33.4 per cent. below the most recent peak in 20078. More importantly, they remain 52.0 per cent. below the recommended annual levels cited within the Barker report.

The impact of macroeconomic improvement and increased mortgage availability and affordability, together with Government policy to stimulate demand has meant that the demand for homes has increased beyond the improving supply. As a consequence, UK house prices have increased by 9.2 per cent. over the 12 month period to December 2015 and an average of 5.4 per cent. each year since 20129, albeit with some significant regional variances. The regions in which the Group operates have grown strongly, and the Directors believe that with the strong growth seen in Central London, the Group is now well-placed to benefit from further price increases in outer London and in the South East, as well as the North West, of England.

1 DCLG Table 100: Number of dwellings by tenure and district, England. 2 HMRC – UK Property Transaction Count – November 2015. 3 DCLG Table 244: Permanent dwellings started and completed, by tenure, England, historical calendar year series. 4 Kate Barker ‘Review of Housing Supply’ – 2004. 5 DCLG Table 244: Permanent dwellings started and completed, by tenure, England, historical calendar year series – 2010 completion for all dwellings. 6 DCLG Table 244: Permanent dwellings started and completed, by tenure, England, historical calendar year series. 7 DCLG Table 244: Permanent dwellings started and completed, by tenure, England, historical calendar year series. Completions per year since 1947 used for calculating long-term average. 8 DCLG Table 244: Permanent dwellings started and completed, by tenure, England, historical calendar year series. 9 Halifax House Price Index.

51 2. Housing demand and supply dynamics The Directors believe that a number of key factors drive the demand for housing in the UK:

• Macroeconomic environment: According to the Office of National Statistics (“ONS”), UK gross domestic product (“GDP”) grew 2.8 per cent. in 2014, up from the 1.7 per cent. growth in the previous year. The Government Office for Budget Responsibility (“OBR”) forecasts UK GDP growth of 2.4 per cent. and 2.3 per cent. for 2015 and 2016, respectively, underpinning economic-led demand. Unemployment rates in the UK have continued to fall since their peak in November 2011. According to the ONS, the unemployment rate fell 0.7 per cent. to 5.3 per cent. between 30 September 2014 and 30 September 2015, the fourth consecutive drop in the annual rate. As a consequence of this strong employment environment and low inflation, real wages in the UK have seen strong growth in 2015, with growth of 2.7 per cent. in the year to September 2015, supporting housing affordability.

• Mortgage availability: Since the low point in gross mortgage lending of approximately £144 billion in 2009, the Council of Mortgage Lenders (“CML”) has reported that gross mortgage lending (on a seasonally-adjusted basis) in the UK recovered to approximately £203 billion in 2014, still significantly below the peak of approximately £357 billion in 2007. The number of mortgage approvals was approximately 65,000 per month in 2015, compared to approximately 140,000 per month at the peak in 2006 and the long-term average of around 83,000 per month. The current rate is largely due to the lower transaction volumes, but also in part due to a higher proportion of cash buyers which stood at 37 per cent. of all transactions in 2014, compared to only 15 per cent. in 2006.

• Mortgage Affordability: The combination of real wage growth and UK interest rates at historically low levels has supported housing affordability despite increasing house prices. Market consensus suggests that interest rate increases are likely to be both gradual and well-signalled by the Bank of England. The Bank of England Credit Conditions Survey 2015 Q4 noted that demand for secured lending for house purchases increased slightly in the fourth quarter of 2015, and is expected to increase again in the first quarter of 2016. The supply of secured credit to households was reported to have increased slightly in the three months to mid-December 2015 and is expected to increase in the first quarter of 2016, with overall spreads on secured lending to households narrowing significantly in the fourth quarter of 2015 but expected to widen slightly in the fourth quarter of 2016. Following the Mortgage Market Review in 2014 (“MMR”) and against a backdrop of general caution of lenders, the credit quality of borrowers is generally perceived to be materially higher than before the recession. With low mortgage servicing costs, the Halifax Building Society has estimated that it is 8 per cent. cheaper for a typical first-time buyer to own a property than to rent the equivalent.10

• Demographic Demand: The ONS forecasts that the UK population of 64.1 million as of 2014 will increase to 73.3 million by mid-203711. The DCLG has estimated that this population growth, combined with a falling average household size, will result in a growth in household formations in England alone from 22.3 million in 2012 to 27.5 million in 2037. This growth in households will require 210,000 additional homes per year to keep pace with demographic growth, without any regard to the backlog of demand identified in the Barker report. Additionally, in December 2015, the Home Builders Federation12 estimated that there are 1.37 million households on social housing waiting lists in England, an increase of 34 per cent. since 1997, and that an additional 17,000 new homes per year will be required to meet demand.

• Land Supply: Since the publication of the Barker report, the Government has focused on policies intended to make available more land suitable for housebuilding. However, a number of these initiatives have failed to deliver development land in the quantum or at the speed in which it is required. The National Planning Policy Framework (“NPPF”), which was introduced by the Government in 2012, introduced the presumption of sustainable development, which required all LAs to produce a local plan to include a five-year housing supply. However by mid-2015, the Planning

10 Halifax Buying vs. Renting Review – Press Release 23 August 2015. 11 ONS, Population and Migration statistics as available on 5 June 2014. 12 HBF Facts and Messages Bulletin December 2015.

52 Advisory Service reported that only 54 per cent. of LAs had such a plan in place. The Housing and Planning Bill 2015/16 requires all LAs to have an accepted plan in place by 1 January 2017, failing which the Secretary of State will intervene. It will also force LAs to maintain a register of brownfield land and to ensure that 90 per cent. of suitable brownfield sites have planning permission for housing by 2020. With the relaxation of green belt regulation and change of use criteria, the number of outline planning permissions granted has continued to rise. The DCLG has reported that for the year ended 30 September 2015, planning consent was granted for 251,000 homes in England, an increase of 6 per cent. compared to the prior year. As a consequence of the greater supply of land with planning permission, there has generally been little cost inflation in the overall market for land, particularly outside Central London.

Government support for Housebuilding Since the creation of the NPPF in 2012 and the introduction of Help to Buy in 2013, there has been strong and consistent political support for housebuilding in the UK. Additionally, the 2015 Spending Review and Autumn Statement and the subsequent Housing and Planning Bill in November 2015 included a number of additional measures to support the housebuilding sector.

• Help to Buy: Help to Buy is designed to encourage home ownership in the UK. In its first phase, the scheme committed funds as part of a shared equity scheme, under which buyers put down a minimum 5 per cent. deposit on a home with the UK Government providing an equity loan up to 20 per cent. of the value up to a maximum purchase price of £600,000. In April 2013, the UK Government committed £3.5 billion for Help to Buy through the end of 2016. This funding has been increased by a further £6.0 billion and the programme extended until 2021. The equity loan maximum has been raised to 40 per cent. of the purchase price for buyers in London following the 2015 Spending Review and Autumn Statement. The programme has had over 60,000 transactions in its first two and a half years.

• Help to Buy Shared Ownership: Following the 2015 Spending Review and Autumn Statement, restrictions on those able to purchase homes through shared ownership were reduced, allowing anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, to buy a home through shared ownership. Under shared ownership, buyers acquire a share between 25 per cent. and 75 per cent. of a home and pay rent of no more than 3 per cent. of the remaining amount.

• Starter Homes: The Starter Homes Initiative was announced in December 2014 to help first time homebuyers buy new homes. 200,000 homes will be available for a 20 per cent. discount to first time buyers under 40 years old. In the 2015 Spending Review and Autumn Statement, the UK Government allocated £2.3 billion of funding to housebuilders to facilitate this discount. The UK Government will make changes to the planning system to free brownfield land from planning costs and replace s106 agreement obligations to provide below market value sale price on the homes built on the site.

• Rent to Buy: The Rent to Buy scheme was launched in 2014 to help people who need financial support for a limited period of time through the provision of sub-market rent to allow them to save for a deposit to buy a home. The Government announced in 2013 that the programme will receive £400 million in funding for new build homes that will be rented for affordable rent for a limited time before being sold, with the tenant receiving the first chance to buy.

• Affordable Homes: The Affordable Homes Programme, known initially as the National Affordable Housing Programme, was established in 2008 to increase the supply of new affordable homes in England. In its first round of funding between 2008 and 2011, the Affordable Homes Programme funded 155,000 new homes, including a proportion for low cost home ownership and rent. In its second round, between 2011 and 2015, the programme will have provided £4.5 billion in affordable housing, with the majority of houses made available for affordable rent. In its third round, as the Affordable Homes Programme 2, the scheme will provide £2.9 billion in funding between 2015 and 2018, £1.7 billion of which is available for the delivery of 165,000 new affordable homes outside London and £1.25 billion of which is available to build 45,000 affordable homes in Greater London.

53 • Right to Buy: Right to Buy was first launched in 1980, giving council housing residents a discount on the purchase of their council residence. In January 2013, the UK Government announced its intention to increase the maximum discounts on an annual basis by the consumer price index from April 2015. The current maximum discount for tenants is £77,900 outside London and £103,900 in London. At the same time, the UK Government committed to building a new home with affordable rent to replace each council residence sold to a tenant.

• Build to Rent Fund: The Build to Rent Fund was launched in 2012 to stimulate new private rented housing supply. The fund was initially allocated £200 million, which was increased to £1 billion in the 2013 budget.

• Builders’ Finance Fund: The Builders’ Finance Fund will provide £525 million from 2015 to 2017 to aid the development of housing schemes of between 15 and 250 units that have slowed down or stalled. It seeks to address difficulties that small developers are facing in accessing development funds.

• Strategic Land and Property: The UK Government announced in the 2014 budget that its Strategic Land and Property review identified scope to generate £5 billion of receipts from government land and property to support housing growth and economic development.

• Get Britain Building: The Get Britain Building programme is a £500 million investment fund set up to help start construction on at least 12,000 locally-backed stalled sites with planning permission that are experiencing problems accessing finance.

• Estate Regeneration: The UK Government announced in January 2016 that it will seek to replace some of England’s most run-down housing estates, following publication of a report by Savills that states approximately 50,000 new homes are needed in London over each of the next 20 years to make up for past shortfalls in housing supply and to meet new demand. According to Savills, the regeneration of these housing estates has the potential to provide somewhere between 190,000 and 500,000 homes, of which between 54,000 and 360,000 would be new, representing a significant increase over the number of existing homes. In its statement, the UK Government announced the formation of a new Estate Regeneration Advisory Panel and committed £140 million to fund regeneration of these estates.

Planning policy Planning permission is required for residential development in England. Consequently, the Group develops land for housebuilding in accordance with England’s relevant legal framework, which broadly comprises the Town & Country Planning Acts and associated statutes, together with national and local policies that guide how the national legislation is interpreted and implemented locally. The land planning system in England is relatively complex, time consuming and expensive, and larger, private landowners often partner with experienced developers such as the Group to reduce risk, share costs and increase the chances of successfully navigating through the planning system.

Under the NPPF, development land is generally allocated through the local plans. Before building can begin, the developer will then need to file one of two types of planning permission applications: “outline”, which requests that certain matters, such as means of access, appearance, landscaping, layout and scale be considered and approved at a later time (in the form of “reserved matters” planning permissions), and “detailed” which addresses all the details of proposed development. Outline planning permission applications are usually submitted for larger projects to establish the principle of development, reserving more detailed matters to be considered on a phase-by-phase basis.

In addition, when a development exceeds a particular size threshold (150 houses as of 6 April 2015), certain applications must be accompanied by an environmental assessment (an “EA”) to comply with European Union directives aimed at assessing and mitigating the impact of new housing developments on the environment. An EA must detail existing environmental conditions both on site and in the surrounding area and requires particular attention on identifying the existence of, and impact on, any European protected species or protected habitat, a process that can add considerable delay and cost to the planning process.

54 Prior to the grant of a planning permission, LAs will usually mandate that larger developments (typically more than 14 homes) also be subject to an s106 agreement between land owners and the LA. The s106 agreement typically requires financial contributions toward the construction of local infrastructure, such as schools, roads and healthcare facilities needed as a result of increased demand resulting from the development. Highways and school-related contributions account for the majority of the Group’s s106 Agreement costs, which can average more than £25,000 per house on larger sites. The s106 Agreement also determines the level of social housing for rent or shared ownership (“affordable housing”) that the development must contain, which can significantly impact a development’s overall value. The levels of mandated affordable housing under s106 agreements can account for up to 50 per cent. of homes on a site, although specific levels vary depending on local circumstances and policy. In 2010, the Government introduced the CIL as an alternative to s106 agreements. The CIL was designed to provide greater consistency across England in calculating the funding required by developers for local infrastructure. However, the CIL is set and applied by LAs, and is currently under review by an independent group to assess the extent to which it does or can provide an effective mechanism for funding infrastructure.

On average, the determination of a planning permission application takes between 3 and 6 months from the submission date, although generally the promotion of strategic land through the planning process is a long- term process that can take several years. Once granted, planning permissions are subject to a number of conditions that must be complied with by the developer. Many conditions will require the submission of further details to the LA as a project develops or certain actions be taken both prior to the commencement of the development and prior to the occupation of the first house.

If a planning permission is refused by an LA, the Group has the right of appeal to an independent inspector, appointed by the UK Secretary of State for Communities and Local Government.

In its 2015 productivity report, “Fixing the foundations: Creating a more prosperous nation” the Government announced several planning reforms including tightening planning performance by punishing local authorities that make 50 per cent. or fewer of decisions on time, introducing a dispute resolution mechanism for s106 agreements, and an intent to not proceed with the zero carbon Allowable Solutions carbon offsetting scheme. Despite these plans and changes in legislation, including the Localism Act and further Government initiatives to streamline the planning system such as the NPPF, it remains relatively complex, time consuming and expensive to promote land for development and secure planning permission in the UK.

Competition Market background The largest house builders, which produce more than 10,000 homes per year (for example, Barratt, Taylor Wimpey and Persimmon) have shown modest growth since 2012. The mid sized house builders, which produce between 2,000 and 7,000 homes per year (for example, Bellway, Redrow, Bovis, Crest Nicholson and Galliford Try) have the capacity to increase production levels further to meet demand. The Directors believe that this segment of the market represents the Group’s greatest competition for growth, but that the regional nature of many of these competitors and the predominance of the second hand market means that direct competition is still limited.

Small to Medium Enterprise (“SMEs”) builders, which produce 100 homes or less per year, have declined markedly during the past 25 years. The Home Builders Federation reports that the number of SMEs has fallen 80 per cent. in the past 25 years. SMEs have gone from building 40 per cent. of all homes in 1988 to delivering just 13 per cent. of a smaller overall output in 2014. Despite a succession of Government initiatives to stimulate this part of the sector, the Directors believe that increased output from SMEs will have very little or no impact on the Group’s growth plans.

Group Positioning The Directors believe that the Housebuilding division provides a differentiated product in place-making environments – for further details see Part IX: “Information on the Group”, and that the long-term nature of promoting Strategic Land through the planning process provides a significant barrier to entry for potential competitors. The division’s focus on sourcing Strategic Land (86 per cent. of the plots in the division’s land

55 bank as at 30 September 2015 were strategically sourced) means it is rarely involved in direct competition to source land, but rather its competition is typically related to house sales. The Group considers its principal publicly-listed competitors to the Housebuilding division to be the Berkeley Group, Bovis Homes and Crest Nicholson. The Housebuilding division had an average private ASP of £583,000 in the financial year ended 30 September 2015, second highest behind the Berkeley Group in the sector and without the benefit of prime London sales outlets.

The Directors believe that the Partnerships division also delivers a differentiated product in place-making environments, often as part of the urban regeneration of Local Authority housing estates – for further details see Part IX: “Information on the Group”. The division sources the vast majority of its land from public sector land, often in public procurement processes. In selecting their preferred partners, LAs require expertise in brownfield development, an ability to manage the community issues surrounding urban regeneration and the ability to construct mixed developments with a strong a sense of place and community.

Most of the Group’s publicly-listed peers do not operate at significant scale in the partnerships market relative to the rest of their businesses, although the Berkeley Group, Barratt Homes, Taylor Wimpey and Galliford Try have limited exposure in this area. The Group considers the Partnerships division’s key competitors to include some social housing providers such as Keepmoat and Lovell (a division of Morgan Sindall), as well as contractors such as Kier and Willmott Dixon, together with certain larger housing associations. However, the sector remains somewhat fragmented and while competition is likely to increase, the Directors believe that the growth opportunity in the Partnerships division is significant. There is significant public sector land ownership at both a central and local government level, and these land holdings provide an opportunity to expand the Partnerships model, while the procurement process and the skill set required provide significant barriers to entry.

56 PART IX

INFORMATION ON THE GROUP

Investors should read this Part IX: “Information on the Group” in conjunction with the other information contained in this Prospectus including the financial and other information appearing in Part XII: “Operating and Financial Review”. Where stated, financial information in this Part IX has been extracted from Part XIV: “Historical Financial Information”.

1. Overview The Group is a leading UK home builder and urban regeneration partner, operating in London and the South East of England, and with a presence in the North West of England through its Partnerships division. The Directors believe that the Group is one of the most effective Strategic Land developers and urban regeneration partners in the UK, with a total land bank of 26,213 plots as of 30 September 2015, 55.9 per cent. of which had planning permission. The Directors believe that the Group’s reputation is founded on its thorough knowledge of the UK planning system, its integrity in its dealings with public and private sector landowners, its design and delivery of quality housing and its ability to deliver social and physical infrastructure to create a sense of place and community.

The Group operates through two business divisions:

• Housebuilding: The Housebuilding division develops medium to larger-scale sites, providing private and affordable housing on land owned or controlled by the Group, primarily around London and in the South East of England. The Housebuilding division operates under both the Countryside and Millgate brands. Millgate was acquired by the Group in February 2014 and was integrated into the Housebuilding division as its premium housebuilding brand in the Home Counties. In the year ended 30 September 2015, the Housebuilding division completed 653 homes, comprising 456 private and 192 affordable homes, with the remaining five built under design and build contracts. The division was active on 31 sites as of 30 September 2015, with key current projects including Beaulieu, Greenwich Millennium Village, Great Kneighton, St. Luke’s Park and Kings Park. This division has more than 30 years’ experience in promoting Strategic Land through the planning process, and its operations are supported by a land bank of 18,410 plots with a GDV of £5.7 billion as of 30 September 2015.

In the year ended 30 September 2015, the Housebuilding division generated revenue (including the proportional contribution of associate and joint ventures) of £330.7 million, 53.7 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures). As of 30 September 2015, the Housebuilding division had a forward private order book of £84.4 million, which represented 23 per cent. of the total planned sales for the 2016 financial year.

• Partnerships: The Partnerships division specialises in medium to larger-scale urban regeneration of public sector land delivering private and affordable homes. It operates primarily in and around London and in the North West of England. Regeneration projects are developed in partnerships predominantly with public sector landowners, such as LAs and housing associations. The Directors believe that the Partnerships division’s nearly 30-year track record of delivering more than 45 regeneration projects makes it one of the most experienced deliverers of regeneration in the UK. The Directors believe that the Group’s reputation is further strengthened by its introduction of place-making to urban regeneration, using a design-based approach to development to provide residents of the Group’s homes with a sense of place. In the year ended 30 September 2015, the Partnerships division completed 1,711 new homes, of which 634 homes were sold to private buyers and 969 were sold as part of affordable housing schemes, with the remaining 108 built under design and build contracts. As of 30 September 2015, the division was active on 37 sites, with key current projects including Acton Gardens, Canning Town and New Broughton Village. As of the same date, the Partnerships division owned or had development agreements in place on 7,803 plots (with a GDV of £1.7 billion) and had been named the preferred bidder (i.e., it had been chosen as the final candidate with which an LA

57 seeks to finalise a development agreement (a “DA”)) on a further 1,542 plots (with a GDV of £488 million). Together, these plots are equivalent to a 5-year supply of homes, based on the Partnerships division’s completion levels for the year ended 30 September 2015.

In the year ended 30 September 2015, the Partnerships division generated revenue (including the proportional contribution of associate and joint ventures) of £285.1 million, or 46.3 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures).

In the year ended 30 September 2015, the Group generated revenue (including the proportional contribution of associate and joint ventures) of £615.8 million and an underlying operating profit of £91.2 million. As of 30 September 2015, the Group had a TNOAV of £388.5 million.

2. History of Countryside Properties Countryside Properties was founded in 1958 and in its early years focused on small residential developments, primarily in Essex and East London. While growing its residential development operations in the 1980s, Countryside Properties also expanded the scope of its activities, first into commercial property and subsequently into new community development, affordable housing and design and build contracting. Throughout the 1980s and 1990s, Countryside Properties extended its geographic scope from its origins in Essex and East London to include developments across London and the South East, North and North West of England.

In the 1980s, Countryside Properties began working on urban regeneration and sustainable community projects. Its first regeneration project was the Five Estates Peckham Partnership, one of the UK’s largest estate regeneration schemes at the time. This was followed by a partnership with Taylor Woodrow to develop the Greenwich Millennium Village, at the time one of the largest regeneration projects in Europe.

By the time of its 50th anniversary in 2008, Countryside Properties had a development programme across a range of activities, including private housebuilding, commercial property, mixed-use and mixed-tenure schemes and recreational and community facilities.

Countryside Properties plc was a listed company traded on the LSE from 1972 until 2005, when it was acquired by Copthorn Holdings Limited, at that time a 50/50 joint venture between the Cherry family and Bank of Scotland (part of Lloyds Banking Group plc). Countryside Properties underwent a restructuring of its balance sheet in 2010, and in 2013, the Principal Shareholder acquired control of the Group from a consortium of banks.

Following the Principal Shareholder’s acquisition of the Group, the Group’s strategy was refined to focus on the core areas of the Housebuilding and Partnerships divisions’ businesses, with a progressive exit from commercial and design and build projects. In February 2014, the Group acquired Millgate, which it subsequently integrated into the Housebuilding division.

3. Strengths The Directors believe that the Group’s key strengths are as set out below.

Well-positioned in areas of strong demand The Directors believe that there is, and has been for a number of years, a structural imbalance between the demand and supply for housing in the UK. Following the Barker Review in 2004, it was determined that England required 240,000 new homes per year to be built. While the Government subsequently committed to the production of 200,000 new homes per year, that level has not been met, as in 2014 approximately 150,000 were built. The Directors believe that the Group is well placed to increase its production from current levels and has the land bank, financing and experienced management team to do so. The Group has recognised the current growth opportunity and increased its completions by 48.6 per cent. from 1,591 in the year ended 30 September 2013 to 2,364 in the year ended 30 September 2015. The Group, as of 30 September 2015, was active on 68 sites, and has set a medium-term target of over 3,600 annual completions.

58 In particular, the Directors believe that there is a shortage in the UK of PRS housing. The North region of the Partnerships division has made a strategic shift away from design and build contracting in favour of PRS housing on mixed-tenure developments, which the Directors believe can deliver higher returns. In the year ended 30 September 2015, PRS housing accounted for approximately 27 per cent. of completions within the Partnerships division.

The Housebuilding division is well-positioned for growth through both its geographic and product mixes. Residential property prices in and around London and the South East of England, where the vast majority of the Group’s Housebuilding sites are located, generally have been more resilient to macroeconomic pressures compared to other regions of the UK. Additionally, the Group’s housebuilding capabilities were strengthened in 2014 by its acquisition and successful integration of Millgate to address higher-end demand in the South East of England. Millgate is now the Group’s premium housebuilding brand and has supplemented the Housebuilding division’s high-end product offerings and extended its geographic reach in the southern and western home counties.

Balanced business with differentiated divisional models The Directors believe that the combination of the Group’s Strategic Land-led housebuilding business and low-risk partnerships model drives high margin growth and capital efficiencies. In the year ended 30 September 2015, the Housebuilding division generated 53.7 per cent. of the Group’s revenue (including the proportional contribution of associate and joint ventures) and the Partnerships division generated 46.3 per cent. The Group allocates its capital with the aim of maximising returns and earning growth throughout market cycles. In all cases, when assessing opportunities, the Directors seek to pursue investments that meet minimum targets of 22 per cent. gross margin and 25 per cent. ROCE for the Housebuilding division and 15 per cent. gross margin and 50 per cent. ROCE for the Partnerships division.

The Group’s balanced business model is further supported by its robust land bank. The Housebuilding division’s operations are supported by a land bank of 18,410 plots as of 30 September 2015. As of 30 September 2015, 72.9 per cent. of the plots in the Housebuilding division’s land bank were controlled by either option agreements or conditional contracts, which provide flexibility, create value through embedded discounts to open market value (which averaged 10.0 per cent. for the year ended 30 September 2015), reduce the cost of land to the Group and enhance the efficiency of its balance sheet while still enabling it to control significant land holdings. The Directors believe that the size and quality of the land bank will enable the Housebuilding division to continue to grow revenue through increased housing completion volumes, with a target of over 1,200 completions per year by the year ending 30 September 2018.

The Partnerships division secures its land either through public sector procurement or negotiations with private landowners. It complements the Housebuilding division by delivering private and affordable homes in medium to larger-scale regeneration schemes primarily in and around London and in the North West of England. The Directors believe that the Group’s partnerships model is a resilient, low-risk, low-capital model with reduced financial risks due to phased viability during projects and contractual priority profit arrangements. The Directors further believe that the Group’s nearly 30-year track record of delivering more than 45 regeneration projects makes it one of the most experienced deliverers of regeneration in the UK, and that the Partnerships division benefits from significant barriers to entry for potential competitors. As of 30 September 2015, the Partnerships division owned or had DAs in place on 7,803 land plots with a GDV of £1.7 billion and had been named the preferred bidder for an additional 1,542 plots with a GDV of £488 million. Together, these plots are equivalent to a 5-year supply of homes, based on the Partnerships division’s completion levels for the year ended 30 September 2015. In addition, the Group had further identified 15,487 plots for bids in progress and future bids.

The Directors believe that the Group’s growth plans for the Partnerships division take into account only a fraction of the urban regeneration that is likely to be required and that, against this backdrop, there are significant opportunities for the Partnerships division. In particular, a Savills report commissioned by the UK Government and published in January 2016 identified that an additional 50,000 homes per annum are needed in London over the next 20 years and that the regeneration of local authority housing estates in London has the potential to provide up to 360,000 additional new homes on existing sites.

59 Across both divisions, the Group places a focus on design quality and place-making, and its achievements are exemplified by the receipt of more than 300 awards for design and sustainability since 2001 (in 2008, the Group’s Accordia development in Cambridge became the first residential development to receive the RIBA Stirling Prize for the greatest contribution to the evolution of architecture in the UK in the past year), and by the fact that the Group holds more Building for Life Standards for Design Excellence from the Commission for Architecture and the Built Environment than any other UK private developer. The Directors believe that through the Group’s in-house team of design specialists, the Group’s design and place-making-led approach to development contributes to a strong forward private order book and increased average selling prices and sales rates, as well as supports the Group’s ability to secure land and obtain planning permissions.

High visibility on medium-term plan provides confidence in delivery The Directors believe that the Group has a high degree of visibility over its medium-term plan. The key driver of this visibility is the Group’s leading land banks in both the Housebuilding and Partnerships divisions. In the year ended 30 September 2015, the Group received planning permission on 3,473 plots. In the Housebuilding division, as of 30 September 2015, 100.0 per cent. of the land for the division’s three-year build programme was owned or controlled and 95.8 per cent. had received planning permission. In the Partnerships division, as of 30 September 2015, 99.3 per cent. of the plots for the division’s three-year build programme had been identified, with 59.8 per cent. of the land owned or controlled, and 52.1 per cent. of the owned or controlled plots had received planning permission.

The Group’s visibility over its 2016 financial year performance is also enhanced through its forward sales, which as of 30 September 2015 represented 27.8 per cent. of anticipated private completions for the year ending 30 September 2016. For private housing, these sales are measured through the Group’s forward private order book, which represents its reservations for properties in advance of completion. As of 30 September 2015, the Group’s forward private order book was £137.5 million, or 310 units, of which £84.4 million was sold in the Housebuilding division and £53.1 million in the Partnerships division, with an average private ASP of £444,000.

The Group intends to deliver its medium-term target completions within its existing geographies and operational framework. The Directors believe that the Group has the key staff, land and supply chain in place to implement its medium-term plan, as well as drive further growth and accelerate site development. Each of the Group’s divisions separately identifies and manages its own contractors, sub-contractors and supply chain, although the Group uses its central buying function for purchases of certain raw material supplies to take advantage of bulk purchase discounts.

Structural margin, ROCE and underlying operating profit improvement opportunity The Directors believe that the Group has opportunities for continued structural margin and ROCE improvement across both divisions, driven primarily by continued change in the Group’s product mix and increasing overhead efficiency in the medium-term. For example, the Group expects that affordable housing, which typically provides lower margins than private housing and which represented approximately 49.1 per cent. of the Group’s completions in the year ended 30 September 2015, are expected to decrease to approximately 47.0 per cent. of completions by 2018, while private sales, which typically offer higher margins, are expected to increase from approximately 46.1 per cent. of completions in the year ended 30 September 2015 to approximately 51.0 per cent. by 2018. In addition, the Directors believe that PRS housing benefits from strong government support and can deliver higher returns than either design and build contracting or affordable housing. In the Housebuilding division, margin growth opportunities are also expected as, over time, completions from lower-margin legacy sites decrease and the division sees a greater pull-through of sites on higher margin Strategic Land and an increase in private housing as a proportion of the tenure mix of its developments.

Given previous overhead expenditures in anticipation of future growth, the Directors also believe that growth can be achieved without significant increase in the current level of overhead costs, and as such, as volumes increase overheads are expected to reduce as a proportion of revenue. As the Group continues to grow, the divisional supply chains and the central buying functions are well-positioned to benefit from greater operating scale and increasing volumes within the Group’s existing operating structure. Additionally, as the

60 use of standardised housing increases, the central buying function may be able to procure more of the materials for the Group’s divisions, and offsite manufacturing may be used more frequently to facilitate lower labour and materials costs. The Directors believe the percentage of the Group’s units using a standard housing type will increase from 54.4 per cent. in the year ended 30 September 2015 to approximately 60 per cent. in the year ending 30 September 2016. Increases in both centralised buying and offsite manufacturing should also be possible as the Group achieves greater economies of scale, which will help improve its structural margins and ROCE.

The Directors also believe that the ownership and planning status of sites in the current land bank gives strong visibility of future medium-term growth plans. The Directors further believe that the planned increase in completions, combined with margin improvement, will help drive growth in underlying operating profit and ROCE.

Strong management team with operational experience across numerous cycles The Group has a strong and committed management team with extensive experience in the UK housebuilding industry, including expertise in land acquisition, planning, development and partnering with housing associations and local authorities. The Group’s management is led by Group CEO Ian Sutcliffe, whose previous experience includes roles as UK Chief Executive of Taylor Wimpey plc and Chief Operating Officer of SEGRO plc. Mr. Sutcliffe is supported by Graham Cherry and Richard Cherry, the divisional Chief Executive Officers of Housebuilding and Partnerships, respectively, who have been with the Group since the early 1980s. The Group’s CFO, Rebecca Worthington, has more than 15 years of experience in real estate development, substantially within a public company environment, and David Simpson, who joined Millgate in 2000, has served in the capacity of Managing Director of Millgate since 2009. The management team is supported by strong divisional and line management with extensive knowledge of the Group and the industry. The Directors believe that management’s commitment to the Group has enabled them to build a strong reputation and develop relationships with key stakeholders over time.

4. Strategies The Group seeks to maintain and strengthen its position as a leading UK housebuilder and regeneration partner. To achieve this goal, the Group is focused on the following key strategic priorities.

Leverage and maintain its land bank The Group intends to leverage its leading land banks in both its Housebuilding and Partnerships divisions to ensure option-led flexibility that allows the Group to maintain its capital efficiency and provide added value through embedded discounts to open market value (see “—Structure and Operations—Housebuilding Division—Land acquisition”). The Group aims to maintain the current strength of both land banks while continuing to seek to achieve its minimum financial targets for new investments, being 22 per cent. gross margin and 25 per cent. ROCE for the Housebuilding division and 15 per cent. gross margin and 50 per cent. ROCE for the Partnerships division.

In addition, in the Housebuilding division, the Group plans to maintain a 10-year supply of land in areas of strong demand and economic resilience in the South East of England. In the Partnerships division, the Group plans to maintain a five-year public sector land bank by utilising effective bid strategies and pro-actively engaging with its partners.

Grow revenue and reduce costs through product mix and design efficiencies The Group will seek to ensure that its homes remain differentiated and aspirational at all price points to meet customer requirements. At the same time, the Group will continue to utilise different product and price points on larger developments with the goal of optimising sales rates and values. To optimise the value in its product mix, the Group intends to continue to feature multiple, separate sales outlets on its larger sites which are each tailored to different product ranges and price points. As of 30 September 2015, for example, the Great Kneighton development has, to date, had three, and the Beaulieu development had plans for five, separate sales outlets. It is also the Group’s intention to retain the distinct Millgate product range to maximise its brand recognition.

61 The Group also intends to increase the use of standardised home types and design details to help reduce and improve the predictability of costs, as well as improve construction build times. For example, in the year ended 30 September 2015, 54.4 per cent. of the Group’s homes were built using a standardised housing type, which is anticipated to increase to approximately 60.0 per cent., over the medium-term. The Directors believe that this shift to increased standardisation helps reduce costs and construction time and allows the Group to build homes more efficiently while continuing to allow it to utilise its skills and experience in design and place-making. The Group will also seek to maintain its use of Group-level purchasing agreements to improve efficiency. As the use of standardised housing types increases, the Group’s central buying function may be able to procure more of the materials for the Group’s divisions, and offsite manufacturing may be used more frequently to facilitate lower labour and materials costs.

Leverage relationships with key stakeholders The Group will focus on maintaining and strengthening its long-term relationships with key landowners, LAs, housing associations, contractors and sub-contractors, which are core to the Group’s ability to deliver high-quality products on a timely and cost-effective basis. Each of the Group’s key relationships is overseen by a member of Senior Management and the Group will continue to ensure that the development of these relationships is continuously reviewed. The Group will also seek to develop new relationships, principally through its new business teams, but also at specific events such as the international MIPIM (Le marché international des professionnels de l’immobilier) real estate conference in France and at sponsored events such as the Alan Cherry Debate and Award for Public Sector Place-Making.

Strengthen sales through place-making and efficient asset turn The Group aims to maximise sales through a focus on design quality and place-making. The Group considers its core customers to be owner-occupiers, and it does not specifically target investors, outside of PRS housing, or overseas buyers. The Group’s sales rates are determined by the product mix and build rate, and the Group’s objective is to maximise sales prices whilst not compromising build efficiency or asset turn. For example, for affordable housing and PRS housing sales, the Group aims to have contractual obligations from its purchasers before commencement of build, with phased payment to ensure capital efficiency. In the Partnerships division, the Group aims to seek to increase the share of PRS housing in its product tenure, which the Directors believe can deliver higher returns and benefits from strong government support.

Continue to ensure the efficient management of project development The Group intends to continue to grow revenue through increased housing completion volumes in both the Housebuilding and Partnerships divisions, and the Group’s management is targeting to increase housing completions to over 3,600 in the medium-term. The Group will continue to manage the development of its smaller sites directly, utilising sub-contractors, and using principal contractors to deliver larger or more complex construction, while seeking to ensure that all building is completed to the Group’s standards of quality and safety. The Group has long-standing relationships with many of its contractors, sub-contractors and supply chain, and the Directors believe that maintaining and expanding these relationships are essential to the Group’s growth plans.

Continue to offer excellent customer care The Group will continue to strive to continuously improve its customer care and quality of service experience at all stages of the purchase process. The Housebuilding division and the Partnerships division plan to leverage their in-house staff dedicated to managing reservations, providing home owner demonstrations and, if needed, resolving any problems. The Group will also continue its strong focus on its customer service by further tracking internal and external research and benchmarks to ensure that the key stages of the customer journey are delivered in a manner that meets or exceeds customer expectations.

Continue to maintain high health and safety standards The Group has an excellent health and safety record and intends to continue to ensure that all of its activities are conducted in a safe and considerate manner. The Group has developed a culture of safety throughout the business and has a dedicated team of health and safety professionals to assess each of its sites and

62 communicate lessons learnt on a monthly basis. For the year ended 30 September 2015, the Group’s Accident Incident Rate (“AIR”) was 265 per 100,000 persons employed, compared to the Health and Safety Executive benchmark AIR of 351 and the Home Builder Federation major housebuilders’ AIR of 412 in the same period. The Board has also appointed the Group Chief Executive as the Director responsible for health and safety. The Group Chief Executive chairs the Group’s Health & Safety Committee, which meets quarterly and is attended by the senior operational directors, as well as the Group Head of Health & Safety.

Attract and retain high quality personnel The Group has built a strong reputation for recruiting, developing and retaining high-quality personnel and will continue to seek to do so. In 2015, the Group recruited new human resources managers, who are tasked with ensuring that the Group’s employees are of a high calibre, well-motivated and appropriate for the needs of the Group’s business given its growth strategy. Initiatives and opportunities for employee development include management and leadership development programmes, National Vocational Qualifications and regular formal performance reviews. To help recruit and retain its personnel, the Group plans to continue to offer competitive incentive-based pay and implement competitive benefits packages.

5. Structure and Operations The Group’s operations are divided into two divisions: Housebuilding and Partnerships. Each division is headed by a divisional Chief Executive Officer, who in turn reports to the Group Chief Executive Officer to ensure alignment of the respective division with the Group’s overall strategy. Each division is further divided into operating regions, with four regions in the Housebuilding division and two in the Partnerships division. Both divisions share internal audit, legal, HSE, customer care, human resources and most procurement functions, and the Group exercises oversight over all material investments made by the divisions. In addition, a new, highly experienced Group CFO was appointed in 2015, strengthening Group control over financial matters.

The chart below sets out the organisational structure of the Group’s operations.

Countryside Properties

Housebuilding Partnerships

East South Central Millgate South North Region Region Region Region Region

Group Functions

Finance Legal Procurement HSE Human Resources

Housebuilding Division Overview Leveraging its more than 30 years’ experience in securing strategically sourced land and promoting it through the planning process, the Housebuilding division develops medium to larger-scale sites, mainly under the Countryside brand, providing private and affordable housing on land owned or controlled by the Group, primarily around London and in the South East of England. The ASP under the Countryside brand typically ranges from £250,000 to £1 million, while the ASP of the premium product delivered by Millgate

63 on smaller developments typically ranges from £650,000 to £2 million. The average private ASP across the division for the year ended 30 September 2015 was £583,000. In the year ended 30 September 2015, the Housebuilding division completed 653 homes, comprising 456 private and 192 affordable homes, with the remaining five built under design and build contracts. In addition, as of 30 September 2015, the Housebuilding division was active on 31 sites, with sales being undertaken at 17 of those sites.

The Group’s housebuilding model is largely focused on strategically sourcing land in areas of economic resilience and, subsequently, progressing developments through the planning process. In the year ended 30 September 2015, the division acquired 2,017 plots across 13 sites, of which 90 per cent. were acquired through option contracts and all met the Group’s target gross margin and ROCE projections. The Group seeks to ensure that the Housebuilding division’s land bank is underpinned by a number of larger sites (i.e. sites that can potentially accommodate more than 300 units and multiple sales outlets) to provide a significant source of plots over a number of years. These larger sites are supplemented by smaller stand-alone developments, with seven of the 13 sites acquired in the year ended 30 September 2015 comprising 100 plots or less, making the average size of a site acquired in that year 155 plots, lower than the average site in the Housebuilding land bank of 179 plots. The majority of the Housebuilding division’s developments consists of low-rise housing and offers predictable cost-outturns and the ability to align build and sales rates that help manage the Group’s capital exposure and maximise returns. As of 30 September 2015, the Group had an attractive Housebuilding land bank with 18,410 plots, of which 86.0 per cent. were strategically sourced with a GDV of £4.5 billion, giving the Group substantial embedded value.

The Housebuilding division operates as either a sole developer or, on larger sites, as the lead developer. In some instances the Housebuilding division’s sites are developed through joint ventures with landowners, housing associations and, in one instance to date, a competing housebuilder. In its housebuilding joint venture arrangements, the Group seeks to retain both operational control and project management responsibilities.

Millgate Acquired by the Group in February 2014, Millgate has been integrated into the Housebuilding division as its premium brand. Founded in 1988, Millgate develops premium apartments and executive housing in the Home Counties. The acquisition complemented and expanded the Group’s product and geographic scope. Additionally, the Group was able to integrate the Millgate back office functions following the acquisition, while it has retained and expanded certain features of Millgate’s operations across the Group more broadly, such as its premium-level customer service practices.

The Directors believe that Millgate’s reputation, brand and market standing, earned over 25 years of premium development, affords it opportunities to secure higher value, smaller sites by re-enforcing sellers’ confidence that Millgate will be able to obtain planning permissions based on its design quality and planning approach. Millgate has a strong track record of delivering a high-quality product combined with rigorous cost control to provide attractive margins.

Regional operations The Housebuilding division is divided into three geographic regions trading under the Countryside brand: East, Central and South, while Millgate effectively operates as a fourth region. As is typical in the UK housebuilding sector, each region maintains its own land, technical, development, estimating, construction and sales and marketing teams. Where appropriate, resources are shared between regions to drive efficiencies and economies of scale. Delivery and quality control procedures and specifications are managed centrally to ensure a coherent and co-ordinated approach.

The East region is based in Brentwood and is responsible for housebuilding activities in Essex, as well as the Group’s development of Greenwich Millennium Village in London. This region is a strong growth area for the Group with several developments being undertaken as of the date of this Prospectus, including Beaulieu, Greenwich Millennium Village and St. Luke’s Park.

The Central region is also based in Brentwood and is responsible for housebuilding activities in Buckinghamshire, Cambridgeshire, Hertfordshire, North London and Harold Wood. Key developments

64 being undertaken by the Central region as of the date of this Prospectus include Great Kneighton and Kings Park. The South region is based in Sevenoaks and is responsible for housebuilding activities in Kent, Surrey and Sussex. Key developments being undertaken by the South region as of the date of this Prospectus include Springhead Park and Horsted Park. Millgate is based in Twyford, Berkshire and effectively operates as the fourth region in the Group’s Housebuilding division. Millgate’s properties typically attract higher-income purchasers, with the ASP of Millgate’s homes being £1.3 million in the year ended 30 September 2015. Key developments being undertaken by Millgate as of the date of this Prospectus include Knowle Hill Park, Sundridge Park, Woolley Hall and Engelmere, Ascot.

Land acquisition The Group’s approach to securing new land for its Housebuilding division is primarily aimed at identifying strategically sourced sites (for which there are typically fewer competitors than for land with planning permission) that are considered likely to be granted planning permission within the upcoming two to 10 years and negotiating an option agreement or conditional contract. By focusing on areas outside of London, the Group is able to acquire property at prices that the Directors believe present greater value to the Group. The Group’s strategy in recent years has reduced the concentration of the Housebuilding division’s land bank by increasing the number of small sites it owns or controls. This has increased the diversity of its holdings, which the Directors believe will in turn accelerate delivery of homes and diversify risk. The Group undertakes extensive due diligence prior to entering into any legal commitment relating to the acquisition of land for the Housebuilding division, taking into account the site’s planning history and legal status, an analysis of competing sites and desktop reviews of engineering issues, ecology, archaeology, landscape, roads and services. The Group has a site acquisition process that requires approval by an investment committee before the Group purchases land or enters into an option agreement or conditional contract in relation to a site. The approval process involves consideration of various factors relating to the proposed development, including the underlying assumptions related to value, risk, scale, costs and sales rates, as well as the overall design, quality, location and scale of the project. As of 30 September 2015, the Group had strategically sourced 86.0 per cent. of the land for its Housebuilding division by acquiring the land without planning permission, typically through option agreements or conditional contracts in order to maintain capital efficiency and operational flexibility. • Under an option agreement, the Group acquires a long-term option to purchase land, subject to planning permission being obtained. Option agreements typically include obligations for the Group to endeavour to secure planning permission at its cost, and the land is often paid for in stages as it is developed. Once planning permission is granted, the Group will agree the market value of the land with the seller, or, in cases where agreement cannot be reached, the parties will appoint a third-party expert to determine a valuation. Once market value is agreed or determined, the Group elects whether to exercise its option. Option agreements typically provide for the Group to purchase land, typically at a 10.0 per cent. discount against open market value on average, and for costs incurred in obtaining planning permission to be deducted from the purchase price to reflect the Group’s efforts in securing planning permission. In some cases, the seller will stipulate a minimum value to be paid per developable acre, in which case the Group will negotiate to ensure that it is not obliged to pay more than the agreed minimum value. On larger sites, the Group generally will seek to negotiate to acquire the land in phases, or to pay the purchase price in instalments. • Under a conditional contract, the Group agrees to acquire land subject to the satisfaction of certain conditions precedent, such as the securing of satisfactory planning permission. Similar to option agreements, the Group will typically agree to endeavour to secure planning permission at its own cost. Once it has done so, unlike an option agreement, the Group is required to acquire the land at a pre-agreed value formula, which may be adjusted depending on the type of planning permission obtained.

65 Both option agreements and conditional contracts allow the Group to effectively control land with minimal impact on its balance sheet, providing visibility on future revenue and profits. For land subject to option agreements, until it has exercised its option, the Group holds the land on its balance sheet at the cost of the option. The costs of seeking planning permissions are deducted from the land value and the cost of the option is written down over the life of the option. Land subject to conditional contracts is not recognised on the Group’s balance sheet until the contract has become unconditional. Once owned, land is recognised at cost on the Group’s balance sheet. By strategically sourcing its land through these types of contracts, the Group can typically achieve, on average, 10.0 per cent. discounts to open market value on its land purchases.

While the majority of land within the Housebuilding division is strategically sourced via option and conditional contracts, the Group also unconditionally purchases freehold and long-term leasehold interests in land, both with and without planning permission. Unconditional acquisitions are made when a seller will not sell the land conditionally and/or in situations where the Group has assessed and accepted the planning risk associated with the purchase, if any. Direct acquisitions are typically purchased on deferred payment terms with payments due on specific dates or as certain milestones in the development of the site are achieved, although the Group also occasionally makes lump-sum payments on closing of the acquisition. Freehold and leasehold acquisitions are generally sourced through on-going relationships with land agents and are generally smaller in size than Strategic Land acquisitions.

In addition, as of the date of this Prospectus, the Group had two “legacy sites”, Horsted Park and Harold Wood, for which the historical land cost exceeds the current market value of the land due to the timing of their acquisitions. For accounting purposes, the Group has attributed a fair value to these sites that projects a gross margin of 15 per cent., reflecting the Group’s development plans for the sites. The Directors believe that both sites are in well-positioned locations and the sites are expected to perform at or above their fair value in the medium term, with a target of building out and selling both sites within the next four years.

Land bank The Group’s results of operations are highly dependent on its land banks. As of 30 September 2015, the Housebuilding division’s land bank consisted of 18,410 plots which had a total GDV of £5.7 billion. Of these plots, 15,832 or 86.0 per cent. were strategically sourced and had a GDV of £4.5 billion as of 30 September 2015. An additional 1,811 plots were bought with planning permission at market value, which had a GDV of £1.0 billion, and 767 were from legacy land sources, which had a GDV of £201 million, in each case as of 30 September 2015. As of 30 September 2015, 64.0 per cent. of the Housebuilding’s division’s land bank was controlled through option agreements, 8.9 per cent. was controlled through conditional contracts, and the remaining 27.1 per cent. was owned outright by the Group or one of the Group’s joint ventures. The Group had also agreed contractual terms (but had not signed contracts) for an additional 4,596 plots as of 30 September 2015.

Of the 18,410 plots in the Housebuilding land bank as of 30 September 2015, 8,838 or 48.0 per cent. had planning permission, while 35.1 per cent. had either allocated or a draft allocation for planning permission in a local plan. The remaining 16.9 per cent. had no planning status. Of the Group’s estimated completions for the years ending 30 September 2016 and 2017, 100.0 per cent. have planning permission in place, while 87.0 per cent. of the estimated completions for the year ending 30 September 2018 already have planning permission.

Key Sites As of 30 September 2015, the Housebuilding division was active on 31 sites, with sales being undertaken at 17 of those sites. The Group’s sites are a mix of larger sites (i.e. sites that can potentially accommodate more than 300 units), supplemented by smaller stand-alone developments. See “—Strategies”. The following sites represent key large-scale projects being undertaken by the Housebuilding division as of the date of this Prospectus.

Chelmsford – Beaulieu Located northwest of Chelmsford, Beaulieu is designed to be a major new district for the city of Chelmsford, comprising approximately 3,700 new homes on the 700-acre site. Beaulieu has a landscaped master planned

66 setting that will include a new business park, community centre, schools, shops, railway station and local road improvements including links to the A12 dual carriageway.

Beaulieu is being undertaken in a joint venture with London & Quadrant New Homes Limited (“L&Q”), with profits split 50/50 between the two parties. As of 30 September 2015, the Group’s share of the site’s GDV was £671 million, and it had an expected gross margin of 28.4 per cent. and ROCE of 46.7 per cent. The peak funds expected to be contributed by the Group are £79.8 million.

The initial site was strategically sourced in 1988, and was added to under multiple option agreements from 2000 to 2007. The Group commenced development of Beaulieu in November 2014 and sales began in August 2015. The site has one sales outlet, with an additional four planned, each tailored to different product ranges and price points. The tenure mix of the site is 73 per cent. private housing and 27 per cent. affordable housing.

London – Greenwich Millennium Village Located adjacent to the River Thames on the Greenwich Peninsula in southeast London, Greenwich Millennium Village is situated on a former gas works that has been remediated by the HCA. The site will comprise approximately 2,800 new homes on the 300-acre site. Greenwich Millennium Village has a landscaped master planned setting that will include a school, community facilities, retail shops and employment space.

Greenwich Millennium Village is being undertaken in a joint venture with Taylor Wimpey, with profits split 50/50 between the two parties. The initial site was strategically sourced in 1999, and phases one and two of the development were completed in 2009, with phases three through five having commenced development in March 2013. As of 30 September 2015, the Group’s share of the site’s GDV for phases three through five was £422 million, and it had an expected gross margin of 24.7 per cent. and ROCE of 25.1 per cent. The peak funds expected to be contributed by the Group for these phases are £37 million.

Sales at phases of three to five at Greenwich Millennium Village began in May 2015, with one dedicated one sales outlet. The tenure mix of the site is 80 per cent. private housing and 20 per cent. affordable housing.

Cambridge – Great Kneighton Located 2.5 miles south of Cambridge, Great Kneighton is a new neighbourhood development that will consist of approximately 2,600 new homes on the 300-acre greenfield site. The site will feature a biomedical campus, two schools, retail units, a community centre, civic square and country park.

As of 30 September 2015, Great Kneighton’s GDV was £678 million, and it had an expected gross margin of 28.1 per cent. and ROCE of 48.5 per cent. The peak funds expected to be contributed by the Group are £58.7 million.

The initial site was strategically sourced in March 2007. The Group commenced development of Great Kneighton in May 2011 and sales began in September 2012. The development has to date had three separate sales outlets, tailored to different product ranges and price points. The tenure mix of the site is 60 per cent. private housing and 40 per cent. affordable housing. The Group has sold serviced parcels of residential land to Skanska and Bovis to manage the Group’s capital exposure.

Essex – St. Luke’s Park Located on the site of the former Runwell Hospital in Essex, St. Luke’s Park will comprise approximately 600 new homes on 200 acres between Battlesbridge and Rettendon. The site will also feature retail shops, commercial spaces, a primary school and a community centre.

As of 30 September 2015, St. Luke’s Park GDV was £236 million, and it had an expected gross margin of 20.9 per cent. and ROCE of 51.5 per cent. The peak funds expected to be contributed by the Group are £27.1 million.

67 The site was purchased freehold in March 2015. The Group commenced development of St. Luke’s Park in May 2015 and sales are expected to begin in May 2016. The development is expected to have two separate sales outlets. The tenure mix of the site is 65 per cent. private housing and 35 per cent. affordable housing.

London – Kings Park, Harold Wood Located near Harold Wood Station in the London Borough of Havering, Kings Park will comprise approximately 800 new homes set on 32 acres with tree-lined avenues and a landscaped square.

As of 30 September 2015, Kings Park’s GDV was £242 million, and it had an expected gross margin of 10.7 per cent. and ROCE of 2.5 per cent. The peak funds expected to be contributed by the Group are £54.5 million.

Kings Park is a legacy site which was purchased freehold in March 2007. The Group commenced development of Kings Park in June 2007 and sales began in June 2013. The development currently has one sales outlet, with an additional outlet planned. The tenure mix of the site is 71 per cent. private housing and 29 per cent. affordable housing.

Design and Build The Group also undertakes a small number of “design and build projects”. These projects typically entail the construction of homes as part of wider developments on land generally not owned or controlled by the Group and commissioned directly by housing associations for which the Group receives fees for its design and project management services. The Group now considers this part of the business to be non-core and accordingly is no longer seeking new design and build work.

Partnerships Division Overview The Partnerships division specialises in partnerships with LAs, housing associations and other public bodies (such as the HCA) to deliver medium to larger-scale urban regeneration projects. The Directors believe that the Group’s nearly 30-year track record of delivering more than 45 regeneration projects makes it one of the most experienced deliverers of regeneration in the UK. These projects develop local authority estates and brownfield land into housing that comprises primarily three tenures: private housing sold at market value, PRS housing sold to investors and affordable housing sold to LAs and housing associations for less than market value. The mix of housing tenure is agreed with the LA, HCA or housing association within the DA, which lays out all of the terms of the partnership.

The division is organised into Partnerships North and Partnerships South, each with its own managing director and staff, including development, sales and production teams.

Partnerships South operates in the South East of England, primarily in and around London, and focuses on projects involving the regeneration of existing local authority housing estates. These projects vary significantly in size, from developments with as few as approximately 100 homes to those with nearly 3,000. The regenerated developments typically comprise a mixture of private homes for sale and those offered under affordable rent and shared equity schemes to accommodate existing tenants and leaseholders of the estate.

Partnerships North operates in the North West of England, predominantly in and around Liverpool and Manchester, and focuses on the development of existing estates or vacant land plots held by local authorities. As with Partnerships South, Partnerships North’s developments are also typically brought to market through a combination of homes for sale and homes offered through affordable housing and rent schemes. Partnerships North, however, also delivers PRS housing as part of its tenure mix, typically at gross margins of around 10 per cent. See “—Private Rented Sector”.

In the year ended 30 September 2015, the Partnerships division completed 1,711 new homes, of which 634 were sold to private buyers and 969 were sold as part of affordable housing schemes, with the remaining 108 built under design and build contracts. In the year ended 30 September 2015, the ASP for private homes

68 was £321,000 in the Partnerships South region and £154,000 in the Partnerships North region. As of 30 September 2015, the Partnerships division owned or had DAs in place on 7,803 land plots with a GDV of £1.7 billion and had been named the preferred bidder for an additional 1,542 plots with a GDV of £488 million. Together, these plots are equivalent to a 5-year supply of homes, based on the Partnerships division’s completion levels for the year ended 30 September 2015, and as of 30 September 2015, the Group had obtained planning permission for approximately half of these plots. The Group had bids in progress for a further 8,487 plots and had identified approximately 7,000 plots on which it may bid in the future. Between 2011 and 2015, the Group won approximately 40 per cent. of the bids for partnerships plots for which it bid. As of 30 September 2015, the Group was either on-site or awaiting construction start for 100 per cent., 97 per cent., and 74 per cent. of the plots necessary to meet its Partnerships division build projections for the years ending 30 September 2016, 2017 and 2018, respectively. The Group has further identified the remaining 3 per cent. of plots for its projections for the year ending 30 September 2017 and 24 per cent. (of the remaining 26 per cent.) of the plots for its projections for the year ending 30 September 2018.

Identifying and acquiring land Most schemes secured by the Partnerships division involve public sector land and/or buildings that are subject to public procurement regulations, which require a competitive process to be followed. These competitive public procurement processes typically are initially advertised through the Official Journal of the European Union or through one of the frameworks established by the Greater London Authority (in London) and the HCA (in locations outside of London).

To stay informed of potential partnership opportunities ahead of formal public procurement announcements, and to conduct necessary preparatory work for public procurement processes, the Group stays in regular contact, at both member and officer level, with local authorities, the HCA and other public bodies. In addition, the Group reviews public planning, housing and regeneration strategies, promotes and supports market testing and encourages debate on partnership issues through its support of industry-related conferences, seminars and research projects to remain on top of current events and opportunities in the marketplace.

Before bidding on a project, the Group will evaluate it based on several factors, such as project viability, scope, contract value, capacity considerations and complexity of the design requirements or financial structure. The Group will also carry out a detailed estimation of potential costs, including labour, materials, equipment, contractors and sub-contractors required to complete the project, as well as consider risk contingencies, profit margins and construction methodologies. Following this assessment, a final decision to submit a bid is approved by management of the division and then by the investment committee.

Competitive partnership public procurement processes are often subject to complex evaluation criteria. Non- financial criteria, such as planning and design capability, delivery capacity and proposals to address social and economic sustainability issues typically account for more than 50 per cent. of an applicant’s score, with the balance comprising a range of financial-related criteria. Typically, partnership public procurement processes will involve three stages, during which the number of bidders is progressively reduced to two or three candidates, before a single preferred bidder is identified with which the LA seeks to finalise project negotiations. The Directors believe that the nature of public procurement processes, particularly given the emphasis on non-financial evaluation criteria, together with the lengthy procurement process, constitute a significant barrier to entry for new competitors.

Awarded projects Historically, the Partnerships division’s contracts have been on average approximately seven years in length (ranging from three to 15 years). The Partnerships division’s projects are generally awarded on a conditional basis, subject to both parties entering into a DA. On larger, multi-phase scheme negotiations, the Group endeavours to ensure that risk are reduced by, for example, phased viability tests. The latter involves an arrangement where a development appraisal is carried out on each phase to ensure the Group has achieved a “priority profit” (i.e. profit received before the residual land value is calculated) for the relevant project phase. If the development appraisal shows that the priority profit is not achievable, the Group will consider a range of solutions with the partner landowner to create a viable position going forward, such as a change

69 in tenure mix to permit viability. DAs also usually contain “overage” provisions, whereby profit generated during a phase over and above the target profit is shared with the partner on a 50/50 basis.

DAs also address responsibility and process for securing planning permission and the Group’s delivery of affordable housing. The Partnerships division is typically able to provide affordable housing to LAs in lieu of cash payments for land. In addition, because any remaining cash payments owed by the Group to LAs are usually phased over the course of a project’s development, the Partnerships division has lower working capital requirements than the Housebuilding division, which drives higher ROCE, despite the lower gross margins typically achieved.

Construction works and the suppliers, contractors and sub-contractors for the Partnerships division’s projects are generally procured by the Group or its partner. In the case of certain joint ventures, the Group may earn a fee for its project management. In addition to this fee, the Partnerships division earns revenue on its projects through fees for sales and marketing and accountancy services, which in aggregate can be up to three per cent. of private housing revenue.

Private Rented Sector The PRS business is a growing part of the tenure mix on Partnerships sites, predominately conducted through the Partnerships North region. For the year ended 30 September 2015, PRS housing made up approximately 25 per cent. of all Partnerships completions. PRS sales are structured such that a contract is agreed in advance of construction works to sell the completed home(s) to an investor for a fixed price, payable in instalments over the course of the development. Due to housing supply shortages, particularly for individuals who neither qualify for affordable housing nor are able to afford to purchase a home, the UK Government and LAs have been increasingly supportive of PRS housing. In some cases, the Group has been able to exchange affordable housing allocations on its developments for PRS housing. While PRS housing ASPs are typically lower than market prices, this is offset by savings in marketing and incentives and the Group benefits from the upfront, guaranteed sale, as well as higher margins on PRS housing than those on affordable housing.

The Group works with institutional investors and housing associations, such as Sigma Capital for example (with whom the Group had signed framework agreements for 927 units as of 30 September 2015), to build PRS housing both as a part of larger developments and as standalone PRS sites, with the allocation of cost and risk governed by framework agreements. On standalone PRS sites, the Group undertakes its typical Strategic Land identification process, signs an option agreement on the identified land and creates a development scheme that is presented to the PRS investor. In some cases, the Group engages the investor earlier in the process and only signs the option agreement upon receiving the investor’s approval to the development in principle. Once the option agreement is signed, the Group then begins the process of obtaining planning permission on its proposed development. When the planning permission has been granted, the Group exercises the option, directing the land owner to transfer the land directly to the PRS investor. The Group then proceeds with the construction of the development under the instruction of the PRS investor. The Group has set a 10 per cent. gross margin target for PRS housing and aims for the projects to be cash positive, so as to enhance ROCE.

Key Sites As of 30 September 2015, the Partnerships division was active on 37 sites. The following sites represent key projects being undertaken by the Partnerships division as of the date of this Prospectus.

London – Acton Gardens Located on the former site of 1,800 social housing units in West London, Acton Gardens is a large-scale estate regeneration project aimed at transforming South Acton. The development will feature approximately 2,900 new homes and social and community facilities centred around a 55,000 square foot communal space. The project was awarded by the London Borough of Ealing in May 2010.

Acton Gardens is being undertaken in a joint venture with L&Q, with profits split 50/50 between the two parties. As of 30 September 2015, the Group’s share of the site’s GDV for phases one through four is

70 £132.5 million, and it had an expected gross margin of 18.8 per cent. and ROCE of 65.3 per cent. The peak funds expected to be contributed by the Group for these phases are £24.6 million.

Acton Gardens will have 21 phases over 15 years, each of which is viability tested. The Group commenced development in June 2011 and sales began in March 2013. Acton Gardens currently has three separate sales outlets, with an additional 18 outlets planned. The tenure mix of the site is 54 per cent. private housing and 46 per cent. affordable housing.

London – East City Point Located in East London, East City Point is part of the regeneration and redevelopment of Canning Town and Custom House, as well as the nearby Rathbone market. The development will feature approximately 600 new homes and community facilities including the new Keir Hardie primary school and a new energy centre. The project was awarded by the Newham Council in April 2006.

As of 30 September 2015, East City Point’s GDV was £162 million, and it had an expected gross margin of 23.8 per cent. and ROCE of 75.0 per cent. The peak funds expected to be contributed by the Group are £24.1 million.

East City Point will have three phases over eight years, with development beginning in December 2010 and sales in September 2013. East City Point currently has one sales outlet, with an additional outlet planned. The tenure mix of the site is 65 per cent. private housing and 35 per cent. affordable housing.

Procurement and Project Execution The Group’s procurement and project execution functions are based on an integrated approach that considers factors, including client requirements, design considerations, cost and risk analysis. Due to their varying requirements, each of the Group’s divisions separately identifies and manages its own supply chain. However, the Group uses a central buying function to purchase materials such as bricks, blocks, windows, kitchens and dry wall. In the three years ended 30 September 2015, approximately 90 per cent. of procurement purchases have been made under Group-wide procurement contracts, which allows the Group to realise lower costs and have greater control of contracting terms.

The Group’s key focus during project execution is on well-founded construction, commercial efficiencies and best practices in HSE matters. The Group strives to monitor and improve the efficiency and quality of its construction process to ensure that its projects are completed on time and on budget, with minimal defects in work. To this end, the Group utilises preferred and trusted pre-qualified external architects, engineers, professional consultants, contractors, sub-contractors and suppliers to supplement the Group’s own in-house planning, design, procurement, construction and customer care teams.

For works outside the Group’s core activities, such as the provision of infrastructure works and commercial developments, the Group tenders projects with its preferred suppliers and sub-contractors, and canvasses the wider market to ensure it is achieving good value for its contracts. For the majority of its projects, the Group engages sub-contractors on “supply and fix” and/or “labour only” terms, with sites project-managed and supervised by Group personnel. However, where necessary, the Group appoints third-party contractors to deliver specialised work. The Group also has long-term agreements with certain preferred materials suppliers, and in recent years, the Group has achieved its annual objectives to place at least 80 per cent. of direct spend with these preferred suppliers.

As a project is progressed from its initial concept through the construction execution process, the Group regularly appraises its activities in relation to costs, potential sales value, margins and ROCE and actively looks for areas for value improvement. Where possible, the Group seeks to maximise the use of local suppliers and sub-contractors. On certain regeneration projects the Group is obliged to utilise local supply chains and procurement to help stimulate the local economy.

Design and Place-Making The Group has a focus on design quality and place-making, which the Directors believe helps drive its success in planning applications and sales performance. Its achievements are exemplified by the receipt of

71 more than 300 awards for design and sustainability since 2001 and by the fact that the Group holds more Building for Life Standards for design excellence from the Commission for Architecture and the Built Environment than any other UK private developer. The Directors believe that through the Group’s in-house team of design specialists, the Group’s design and place-making-led approach to development can help make its homes more desirable, maximise values and create a positive long-term legacy for the Group’s projects. The Directors also believe that the Group’s approach to design quality and commitments to economic, social and environmental sustainability supports the Group’s ability to secure land and to obtain planning permissions. The Directors believe that the Group is able to increase sales by providing differentiated product ranges for customers across price points, square footage and design preferences. As such, across its developments, the Group’s design team aims to create visually stimulating, mixed-tenure homes in urban and rural locations that have a strong emphasis on light, flexibility and space within the home. The Group takes into account the unique characteristics of each site and its surroundings and seeks to incorporate and enhance existing natural landscape features and habitat to create a sense of place. For Partnerships division sites, the Group engages with local authorities and residents at an early stage to create design and landscaping schemes that are acceptable to the local community and helps to shape the social and community infrastructure provided for the area. Early planning and design of a regeneration site is particularly important to set a distinctive sense of place and the tone for the partnership with the local community. The Directors believe that the Group’s reputation for design and related collaborative working relationships with regeneration stakeholders are important factors that landowners and their advisers consider when considering the Group as a development partner. In recent years, the Group has increased the use of standardised house types to help reduce, and improve the predictability of, costs, as well as improve construction times. For example, in the year ended 30 September 2015, 54.0 per cent. of the Group’s homes were built using a standardised house type, which is anticipated to increase to approximately 60 per cent. in the year ending 30 September 2016 and approximately 50.0 per cent. will be built with timber frames. Timber frames, which are used in Partnerships North, are more efficient as they can be produced in component parts by a factory and can be constructed more quickly than traditional brick or block buildings. Timber frames can be built, including with a roof and windows installed, in less than 10 days, which also limits the Group’s exposure to bad weather. The Directors believe that this shift to increased standardisation helps reduce costs and construction times, allowing the Group to build homes more efficiently while continuing to utilise its skills and experience in design and place-making. The Group also recognises the key role commercial and other non-residential buildings, such as neighbourhood centres and schools, play in creating vibrant communities. These are not part of the Group’s core business, but they enhance the quality of developments, particularly for larger Partnership sites. Millgate employs a dedicated design team and retains a team of architects, interior designers and landscape architects who optimise the planning process, layout and product mix for Millgate’s high-end developments. The Directors believe the brand’s standard of excellence in design, specification, build quality and site presentation allows Millgate to achieve sales prices in excess of market valuations.

Commercial The Group does not develop commercial real estate on a stand-alone basis, but does deliver small-scale retail, office and ancillary spaces as part of mixed-use developments. Additionally, the Group has a joint venture with Liberty Property Trust to develop the Cambridge Biomedical Campus. The joint venture delivers serviced parcels of land for larger scale commercial developments, such as Papworth Hospital, Astra Zeneca and Cambridge University Research Centre.

The Group does not retain an investment portfolio of commercial property, and it seeks to avoid speculative development of commercial and mixed-use space. When required to deliver commercial space as part of mixed-use developments, it aims to contract end purchasers prior to the commencement of development.

The Group’s commercial property team is formally situated within the Housebuilding division, although the team provides a Group-wide service, and its expertise is particularly relevant on large developments and

72 estate regeneration schemes, for which mixed-use and commercial space are often required by the terms of partnership contracts.

6. Marketing The Group’s marketing function oversees brand management, national and regional advertising, digital communications, public relations, websites, brochure design, and external marketing through property portals, show homes presentation and corporate communications. As of 30 September 2015, the Group had 22 employees dedicated to marketing across the Group and divisional functions. The Directors believe that the perception, reputation and presentation of the Group’s brands is of the utmost importance and that both the Countryside and Millgate brands are premier, value-adding brands. As a result, the Group seeks to support its brands by adopting a common approach in all communications relating to the brands under the Group’s control. The Group’s sales and marketing literature is produced in a consistent style to maintain brand recognition for both Countryside and Millgate, strengthen its corporate identity and ensure that all marketing is appropriate for the Group’s developments. The Group is also active across multiple social media platforms, managed by an in-house digital team and an external public relations consultant. Both the Group’s websites and listings on external property portals (e.g. Rightmove and Zoopla) are managed centrally to ensure that all sales information is appropriate, consistent and up to date.

7. Sales The Group maintains a sales database and client registration system to record, manage and maximise sales opportunities from its marketing activities. Each Group development under the Countryside brand has a dedicated team of full-time sales advisors overseen and supported by a development sales manager. Sales managers maintain a comprehensive and detailed understanding of the local real estate market and trends, while sales advisors guide buyers through the home buying process. The Group’s sales teams also ensure that sales management personnel have access to market research competitors and market trends. The Group constructs marketing suites at each of its developments as early as possible to provide potential customers with fully finished show homes. Show homes are complemented by interior designs handled by external interior design professionals, which are approved by the Group’s sales management team.

Millgate utilises premium brand estate agents appropriate for the sales of its higher-end properties, benefiting from their local and product expertise while lowering staff overhead on slower selling, high-value sites. These agents operate under the direction of the Millgate Sales and Marketing Director and sales management team.

As of 30 September 2015, the Group had 29 open sales outlets, and averaged 0.76 sales per outlet per week for the year then ended. The Group also takes reservations for its properties in advance of completions through its forward private order book. On larger apartment-orientated sites, reservations will generally be taken in advance of construction, whereas on lower-rise, housing-led sites the Group will generally accept reservations three months ahead of build completion. As of 30 September 2015, the Group’s forward private order book was £137.5 million, or 310 units, of which £84.4 million was sold in the Housebuilding division and £53.1 million in the Partnerships division, which represents both plots that are contracted but for which building is yet to complete and plot reservations for which contracts have yet to exchange. All reservations require a nominal deposit to hold the property while the potential sale is vetted by the Group (or by appointed third-party agents in the case of reservations secured by Millgate). Upon the exchange of finalised contracts, which the Group aims to complete within six weeks of the initial deposit, the purchaser is required to provide a further deposit, typically 10 per cent. of the property’s purchase price. The balance of the purchase price is then paid upon completion of the home. Sales are not recognised for either turnover or profit until the full purchase price has been paid. Cancellation rates between reservation and exchange have typically been around 11 per cent. in recent years and minimal (approximately one per cent.) between exchange and completion. All of the Group’s reservation data is provided on a net of cancellation basis.

The Group places importance on customer service. Since its integration of Millgate, the Group has sought to implement Millgate’s premium-level customer service practices across the Group, and in 2015, the Group maintained its four star rating from the Home Builders Federation for customer satisfaction, despite the Group’s increasing sales volumes and the industry trend of declining scores.

73 The Group benefits from the Government-sponsored Help to Buy, which provides up to 20 per cent. equity toward the purchase of new homes for first time buyers. This scheme does not involve a financial commitment by the Group, nor is it administered by the Group, but the Directors estimate that it was utilised in 38.4 per cent. of sales in the year ended 30 September 2015. The Group also has its own shared equity schemes (i.e., schemes in which the Group sold a purchaser a certain equity percentage interest in a home and accepted payment for the remainder of the equity interest upon the property’s resale or after a fixed term), with a shared equity loan book value of £10.5 million as of 30 September 2015. The Group no longer offers or participates in shared equity schemes for its properties, and it is actively seeking to reduce its outstanding shared equity loan book through redemptions. The Group also offers buyers the opportunity to engage in a part-exchange, a process whereby a potential customer exchanges their current property as part of the consideration for the purchase of a new property. All properties taken under the part-exchange scheme are subject to ready sale valuations and have minimum uplift criteria. The portfolio of part-exchange properties is reviewed each week to ensure no property is held for more than three months. Total part-exchanges for the year ended 30 September 2015 were 12, with two remaining unsold as of 30 September 2015.

8. Sureties The Group’s requirements to provide performance bonds, or surety bonds, arise out of its activities as a housebuilder, building contractor and land purchaser and vendor. Most commonly, the Group will be required to provide surety bonds to LAs in relation to its obligations to build infrastructure works under s106 agreements or to other third parties when the Group acts as a design and build contractor. The Group typically arranges bond facilities with a number of different insurance or surety companies or the National House Building Council in order to have the bonds available to put in place as and when it or its material joint ventures require them. The bonding obligations themselves often form part of the agreements that the Group enters into with a particular LA or third party, with the surety company also a party to that agreement.

The surety bonds are a form of insurance for the beneficiary and may be triggered in the event of a default by the Group of its obligations to the third party (e.g., to build a particular roadway to a given specification by a given date for an LA) or in the event the Group becomes insolvent. The surety bonds may be paid out by the surety company to the LA or third party on-default, meaning once the default has been proven through a form of litigation or arbitration proceedings, or on-demand, meaning all that is required is for the LA to present a demand for payment. The surety bonds are typically for a fixed maximum amount agreed on commencement and may be capable of reduction in value if milestones are achieved that are certified by a qualified third party. Otherwise, the surety bonds may expire automatically upon a defined date or event, typically the date when the Group is scheduled to have completed the works.

Alongside the bonding facility arrangements and the surety bonds in favour of particular LAs or other third parties, the Group also enters into direct indemnity agreements with the surety companies. These are the means by which the surety companies are able to recover from the Group any amounts paid out under a surety bond.

9. Joint Ventures, Associate and Minority Interests In the ordinary course of the Group’s business, in particular in relation to the Partnerships division, it seeks to enter into joint venture projects in relation to certain sites and developments, typically in order to benefit from a joint venture partner’s access to land or technical experience, or to share risk. When evaluating a potential joint venture partner, the Group considers factors such as the potential partner’s market position, available resources, experience, specialised skills, financial and technical capability and past performance on similarly executed projects. The Group’s joint venture partners as of the date of this Prospectus include Taylor Wimpey (in relation to the Greenwich Millennium Village development) and The London and Quadrant New Homes Limited (in relation to the Acton Gardens, Oak Village and Beaulieu developments). See paragraph 12 of Part XVIII “Additional Information—Subsidiaries, joint ventures and associates” for more information on the Group’s joint ventures.

74 The Group’s joint ventures are typically established through joint venture entities in the form of limited companies or limited liability partnerships, with the Group and the joint venture partner having joint control over the relevant entity. On certain of these joint ventures, the Group also acts as the project manager for the relevant development pursuant to a separate arm’s-length agreement with the joint venture entity pursuant to which the Group receives a management fee. Where the Group is acting as project manager, it is responsible for significant elements of the joint venture’s operations, including sales, accounting and secretarial matters.

As of 30 September 2015, the Group had interests in 30 such joint venture entities. In 25 of these, the Group had a 50 per cent. interest and joint control, and in the other three the Group had a holding of no less than a one third interest. The Group does not have sole control over any of these joint venture entities and they are not subsidiary undertakings of the Company. Accordingly the Group recognises its share of profit on a joint venture share basis.

Through its joint ventures, the Group held, owned or controlled 4,851 plots as of 30 September 2015.

In addition to its interests in joint ventures, the Group also has:

• a 28.5 per cent. interest in an associate entity in connection with the Bicester development. For this development, the Group only facilitates land development and does not build; and

• a 74.9 per cent. interest in Countryside Sigma Limited, a subsidiary undertaking in which a third party, being an entity ultimately owned by Sigma Capital Limited, holds the remaining minority interest.

10. Health and Safety The Group recognises its obligations in relation to health and safety matters, and the Group conducts its work with regard to the health, safety and welfare of its employees, contractors, clients, visitors and members of the public. The Group is proud of its health and safety record, and it seeks to continually improve both its absolute performance and its performance relative to industry benchmarks, by way of regular monitoring, training and auditing.

The Board has appointed the Group Chief Executive as the Director responsible for health and safety. The Group’s Health & Safety Committee meets quarterly and is attended by the senior operational directors, as well as the Group Head of Health & Safety. The Group also employs a dedicated team of practitioners to implement the Group’s health and safety policies (which are periodically reviewed), and this team strives to improve the health and safety performance of the Group and its contractors by providing guidance and advice, as well as by arranging relevant training.

As a housebuilder, the safety of the Group’s construction sites is of paramount importance. The Group’s health and safety procedures dictate that all construction sites receive monthly inspections and additional monthly improvement visits. Inspections are conducted by the Group’s operational safety inspectors and managers. The level of compliance is given a grade from “A” to “D” and weighted for importance (as judged by the Group Health and Safety Committee) to form an overall inspection score of either ‘Above Group Quality Line’ or ‘Below Group Quality Line’ where a grade “C” or “D” will fall below the quality line. The performance of all sites is reviewed monthly and results and learnings are published to all staff. The Group also conducts periodic reviews and evacuation exercises for offices and other places of work that are recorded but not scored.

The Group manages its health and safety performance using an occupational management system certified to the BS OHSAS 18001 standard. The Group is also accredited to both the Contractors Health and Safety Assessment Scheme and the Safety Management Advisory Services Worksafe Scheme. In addition, the Group monitors its Accident Incident Rate (“AIR”) as a key health and safety performance indicator. The Group’s AIR was 265 per 100,000 persons employed in the year ended 30 September 2015, down from 289 for the year ended 30 September 2014; the Health and Safety Executive benchmark AIR was 351 in the year ended 30 September 2015, while the Home Builder Federation major housebuilders AIR was 412 in the same period. The Group’s AIR has been consistently below the industry benchmark for the past 9 years.

75 Among the Group’s recent health and safety initiatives is a focus on leadership and behavioural safety at the workplace. Following the implementation of the Construction (Design and Management) Regulations of 2015, the Group has also recently introduced pre-construction procedures, presentations and training designed to increase awareness of and compliance with health and safety regulations.

11. Environment The Group seeks to comply with all relevant environmental laws and regulations, and it has suffered no prosecutions or fines for environmental practices over the last 10 years. The Group maintains an Environmental Aspects Risk Assessment, Significance Evaluation and Legislation Register to monitor and assess its environmental impact and obligations. The Group produces a handbook for Group employees to better understand and comply with environmental legislation in relation to activities at the Group head office, as well as during land acquisition, pre-construction, construction and post-sites phases of development projects.

12. Information Technology The Group’s core IT systems are hosted at a data centre located at the Group’s headquarters in Brentwood, Essex. A second data centre in the Group’s Warrington office replicates the services and data hosted in Brentwood, and in the event of disaster recovery the Group’s core systems can be switched to this second facility. The Group also utilises the Microsoft Office 365 platform, which includes cloud-based data storage, helping to ensure that there is no interruption to the business if a data centre goes offline.

The Group’s core IT systems are a combination of “off-the-shelf” and bespoke software. The Group utilises SunSystems from Infor for accounting and finance functions. Infor also supply ncProcure, a web-based procurement system, which is used throughout the Group. The Group uses bespoke systems for customer care and sales administration, and a web-based system, ContactBuilder, for management systems. The Group uses Cascade for its human resources function.

The Group has recently implemented Anaplan, a cloud-based business modelling and planning platform adopted by many leading housebuilders, for its cash flow forecasting and financial consolidation system. Other key IT initiatives include a document management system using the Group’s Microsoft Office 365 platform, a site access system (MOSAIC), as well as other projects to improve the efficiency of site administration.

13. Intellectual Property The Directors believe that that the Countryside and Millgate trade names, as well as related logos, are strong brands known throughout their areas of operation and the housebuilding industry. The Group has 14 registered trademarks in respect of the Countryside brand in the UK. The Group has held UK-registered trademarks for Millgate and Millgate Homes, as well as related logos, since 18 September 2015.

The Group routinely monitors the marketplace and has taken action against third-party trademark and other IP infringers, although none of these actions or infringements has had a material effect on the Group.

14. Insurance The Group has insurance coverage through well-known providers, including for public liability, employer’s liability, engineering and inspection, professional indemnity, business interruption, property, transport, directors’ and officers’ liability and certain other claims consistent with customary practice in the UK housebuilding industry. The Directors believe the Group’s insurance coverage to be adequate both as to the scope and quantum of risks for the business the Group conducts, and the Group has not had any material claims, nor has it suffered any material losses following any uninsured claim in the last three years.

76 15. Employees The following table sets out the number of the Group’s employees by business area as of the dates indicated:

As of 30 September ––––––––––––––––––––––––––––––––––– Employees 2013 2014 2015 –––––––– –––––––– –––––––– Housebuilding division (excluding Millgate) ...... 237 300 388 Millgate (acquired in February 2014)...... – 55 82 Partnerships division (South)...... 103 119 146 Partnerships division (North)...... 103 115 163 Central services...... 89 120 136 –––––––– –––––––– –––––––– Total number of employees ...... –––––––– 532 –––––––– 709 –––––––– 915 The Directors believe that the Group’s relationship with its employees is good. In the year ended 30 September 2015, the Group had a staff turnover of 19 per cent. which is in line with comparative industry peers. The Group’s employees are not unionised and succession plans are in place for all senior management roles.

The Group is committed to recruiting, developing and retaining high-quality personnel and believes its employees are critical to the Group’s success. In 2014, the Group recruited a new Human Resources Director, and in 2015 a new Head of Learning & Development, Head of Resourcing and Head of Reward & Employee Relations, who are tasked with ensuring that the Group’s employees are of a high calibre, well- motivated and appropriate for the needs of the Group’s business given its growth strategy. Initiatives and opportunities for Group employees include management and leadership development programmes, National Vocational Qualifications 4 and 6 programmes for construction staff and regular performance reviews. The Group is committed to ongoing graduate recruitment and development, and intends to hire approximately 10 graduates in 2016, an increase from the 6 graduates hired in 2015.

The Group currently makes defined contribution pension plans available to its employees under which the employee and employer pay fixed contributions based on a percentage of the employee’s salary. The employer contribution percentages in respect of each employee differ depending on the employing entity and the status of the employee.

The Group pays a cash allowance instead of pension contributions in respect of certain employees. Further details of pension provision are provided under Part XVIII: “Additional Information”.

The Group has no ongoing liability in respect of any historic or previous pension arrangements.

16. Litigation There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during at least the 12 months preceding the date of this Prospectus which may have, or have had in the recent past, significant effects on the Company or the Group’s financial position or profitability.

17. Head Office and Principal Operational Centres The Group’s head office is located in Brentwood, Essex with its other principal operational centres in Twyford, Berkshire, Warrington, Cheshire and Sevenoaks, Kent.

77 PART X

DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE

1. Directors and Senior Management Directors The following table lists the names, ages and positions of the Directors:

Name Age Position ––––––––––––––––––– –––––– ––––––––––––––––––––––––––––––––––––––– David Howell 66 Independent Non-Executive Chairman Ian Sutcliffe 56 Group Chief Executive Officer Rebecca Worthington 44 Group Chief Financial Officer Federico Canciani 39 Non-Executive Director James Van Steenkiste 38 Non-Executive Director Richard Adam 58 Senior Independent Non-Executive Director Baroness Sally Morgan 56 Independent Non-Executive Director Amanda Burton 57 Independent Non-Executive Director

The business address of each of the Directors is Countryside House, The Drive, Brentwood, Essex CM13 3AT, United Kingdom.

Senior Management The Group’s current Senior Management, in addition to the Directors listed above, is as follows:

Name Age Position ––––––––––––––––––– –––––– ––––––––––––––––––––––––––––––––––––––– Graham Cherry 56 Chief Executive Officer, Housebuilding division Richard Cherry 54 Chief Executive Officer, Partnerships division David Simpson 60 Managing Director, Millgate Gary Whitaker 52 General Counsel and Company Secretary

Biographies The management experience and expertise of each of the Directors and members of Senior Management is set out below.

David Howell – Independent Non-Executive Chairman Mr. Howell joined the Group in April 2014 as a Non-Executive Director, and was appointed as Non- Executive Chairman in January 2015.

Mr. Howell is a chartered accountant who has extensive experience working across a number of different industry sectors as either an executive or Non-Executive Director. His last three executive roles were as chairman of Western & Oriental plc, Chief Financial Officer and a member of the board of lastminute.com plc and Group Finance Director of First Choice Holidays plc. Mr. Howell was a Non-Executive Director of The Berkeley Group Holdings PLC for over 10 years and there he chaired the Audit Committee, until 2014. Mr. Howell is also Treasurer of The British Red Cross.

Mr. Howell is a member of the Remuneration Committee and chairman of the Nomination Committee.

Ian Sutcliffe – Group Chief Executive Officer Mr. Sutcliffe joined the Group in October 2013 as Executive Chairman and was appointed Group Chief Executive Officer in January 2015.

78 Mr. Sutcliffe held a number of senior roles at Shell before being appointed UK Managing Director of George Wimpey and subsequently UK Chief Executive and board member at Taylor Wimpey. He followed this with a similar role at SEGRO, before becoming Chief Executive of Keepmoat Ltd. He is also a Non-Executive Director of Ashtead Group plc.

Rebecca Worthington – Group Chief Financial Officer Ms. Worthington was appointed as Chief Financial Officer in August 2015.

Ms. Worthington qualified as a chartered accountant with PricewaterhouseCoopers in 1997. She subsequently worked at Quintain Estates and Development plc for 15 years, first as Finance Director and latterly as Deputy Chief Executive. Following that she spent two years as Chief Executive of Lodestone Capital, a business advising on operational real estate assets. She is a non-executive director of Hansteen plc, and until recently was a non-executive director and Chair of the Audit Committee of Aga Rangemaster plc.

Federico Canciani – Non-Executive Director Mr. Canciani was appointed as a Non-Executive Director in April 2013. He is a Managing Director of Oaktree, having joined the firm in 2006 from Matlin Patterson Advisers (Europe) LLP.

Prior experience includes corporate finance and M&A with Goldman Sachs International in London, and private equity positions with Nomura Principle Finance Group and Terra Firma Capital Partners Limited. He received a Laurea Degree in Business Administration from the Universitá Commerciale Luigi Bocconi in Milan, Italy in 1999.

Mr. Canciani is a member of the Nomination Committee.

James Van Steenkiste – Non-Executive Director Mr. Van Steenkiste was appointed as a Non-Executive Director of the Group in April 2013. He is a Managing Director of Oaktree, having joined the firm in 2002.

Mr. Van Steenkiste has previously worked for UBS Warburg LLC as an Investment Banking Analyst, gaining experience in financings, restructurings, LBO’s, recapitalisations, and mergers and acquisitions. Prior thereto, he worked at Donaldson, Lufkin & Jenrette as an Investment Banking Analyst. He received a B.B.A. degree from the School of Business Administration at the University of Michigan. Mr. Van Steenkiste is a non-Executive Director of Bavaria Yachtbau, Pegasus New Build Ltd, Saloro S.L., Ainscough Ltd. and Solvtrans.

Richard Adam – Senior Independent Non-Executive Director Mr. Adam was appointed as a Non-Executive Director of the Group and chairman of the Audit Committee in April 2015.

He is a chartered accountant who has gained a wealth of experience from executive and Non-Executive roles spanning the media, infrastructure and construction sectors. He is currently Group Finance Director of FTSE 250 support services business, Carillion plc and Non-Executive Director and Chair of the Audit Committee of Countrywide plc.

Mr. Adam was previously Non-Executive Director of SSL International plc, where he also served as Chair of the Audit Committee, Zattika plc and Wincanton plc.

Mr. Adam was appointed as a Senior Independent Director on 8 December 2015. He is also a member of the Remuneration Committee and the Nomination Committee.

Baroness Sally Morgan – Independent Non-Executive Director Baroness Morgan of Huyton was appointed as a Non-Executive Director of the Group in October 2014.

79 Baroness Morgan of Huyton is currently a Non-Executive Director of Dixons Carphone plc and previously served as a board member for the Olympic Delivery Authority and as Chair of Ofsted. She had a long and successful career in central Government, serving as Director of Government Relations at 10 Downing Street from 2001 to 2005. Prior to this, Baroness Morgan was political secretary to the Prime Minister from 1997 to 2001 and was appointed Minister for Women and Equalities in 2001. She was made a life peer of the House of Lords in the same year. Baroness Morgan is also a Member of Council of Kings College London and trustee of a number of charities.

Baroness Morgan is a member of the Nomination Committee, the Audit Committee and the Remuneration Committee.

Amanda Burton – Independent Non-Executive Director Ms. Burton was appointed as a Non-Executive Director of the Group and chairman of the Remuneration Committee in October 2014.

Ms. Burton’s previous experience includes her recent role as global chief operating officer at Clifford Chance LLP. She joined Clifford Chance in 2000 from Meyer International plc, where she was director and Chairman of its Timber Group. Ms. Burton served for nine years on the Board of Galliford Try plc as a Non- Executive Director, from 2005, and as Senior Independent Director since 2008. She was Non-Executive Director of Fresca Group Ltd. for almost twelve years from 1999 to 2010. She is a Non-Executive Director of Monitise plc, HSS Hire Group PLC and a trustee of Battersea Dogs and Cats Home.

Ms. Burton is also a member of the Nomination Committee and the Audit Committee.

Graham Cherry – Chief Executive Officer, Housebuilding division Mr. Cherry was appointed as Chief Executive Officer of the Housebuilding division of the Group in January 2015, having previously acted as Head of Division.

Mr. Cherry is a Member of the Chartered Institute of Building and has a well-established and successful history with the Group, spanning over 35 years. After initially joining the Group as a graduate trainee from University of Reading in 1980, he was appointed as a Director in 1984.

Richard Cherry – Chief Executive Officer, Partnerships division Mr. Cherry was appointed as Chief Executive Officer of the Partnerships division of the Group in January 2015, having previously acted as Head of Division of the Partnerships division.

Mr. Cherry is a Fellow of the Royal Institution of Chartered Surveyors and has had a long-lasting and noteworthy career within the Group. Having joined the Group as a graduate trainee from University of Reading in 1982, he was appointed as a Director in 1986.

David Simpson – Managing Director, Millgate Developments Ltd Mr. Simpson was appointed as Managing Director of Millgate Developments Ltd in 2009, having joined the company in 2000.

Mr. Simpson’s previous experience includes serving in senior positions, including as Finance Director for Darwin Medical Communications Ltd, Kingdom of Leather Ltd and Parker Knoll Limited, and as Group Financial Controller for Cornwell Parker plc. He is also a qualified chartered accountant.

Gary Whitaker – General Counsel and Company Secretary Mr. Whitaker was appointed to the role of General Counsel and Company Secretary of the Group in March 2015.

80 Mr. Whitaker is a qualified solicitor and has extensive experience in the role of General Counsel and Company Secretary, having served as General Counsel and Company Secretary for Xchanging plc for 15 years prior to joining the Group. Mr. Whitaker received a LLB degree from King’s College London in 1993.

2. Corporate governance 2.1 UK Corporate Governance Code The Board is committed to the highest standards of corporate governance. As of the date of this Prospectus, and on and following Admission, the Board complies and intends to continue to comply with the requirements of the UK Corporate Governance Code, save that, excluding the Independent Non-Executive Chairman, the Board currently only has three Non-Executive Directors which it considers to be independent, which constitutes non-compliance with Code Provision B.1.2 that recommends at least half the board, excluding the chairman, comprise independent non-executive directors. The Board believes that the current composition of the Board, comprising two Executive Directors and six Non-Executive Directors, brings to the Board a desirable range of skills and experience in light of the Company’s challenges and opportunities following Admission, while at the same time ensuring that no individual (or small group of individuals) can dominate the Board’s decision making. The Company will report to its shareholders on its compliance with the UK Corporate Governance Code in accordance with the Listing Rules.

In compliance with the UK Corporate Governance Code, the Board has established three committees: an Audit Committee, a Nomination Committee and a Remuneration Committee. If the need should arise, the Board may set up additional committees as appropriate.

The UK Corporate Governance Code recommends that at least half the board of directors of a UK- listed company, excluding the chairman, should comprise non-executive directors determined by the Board to be independent in character and judgement and free from relationships or circumstances which may affect, or could appear to affect, the director’s judgement. As of the date of this Prospectus, the Board consists of six non-executive Directors (including the non-executive Chairman) and two Executive Directors. The Company regards all of the Non-Executive Directors, other than Federico Canciani and Jim Van Steenkiste, as “independent non-executive directors” within the meaning of the UK Corporate Governance Code and free from any business or other relationship that could materially interfere with the exercise of their independent judgement.

The UK Corporate Governance Code recommends that the board of directors of a company with a premium listing on the Official List of the FCA should appoint one of the Non-Executive Directors to be the Senior Independent Director to provide a sounding board for the chairman and to serve as an intermediary for the other directors when necessary. The Senior Independent Director should be available to shareholders if they have concerns which contact through the normal channels of the CEO has failed to resolve or for which such contact is inappropriate. Richard Adam has been appointed Senior Independent Director.

The UK Corporate Governance Code further recommends that directors should be subject to annual re-election. The Company intends to comply with these recommendations.

2.2 Audit Committee The Audit Committee has responsibility for, amongst other things, the monitoring of the integrity of the financial statements of the Company, the review of the Company’s internal financial controls and the monitoring and review of the effectiveness of the Company’s internal audit function and external audit process.

The UK Corporate Governance Code recommends that an audit committee comprise at least three members who are independent non-executive directors and includes one member with recent and relevant financial experience. The Audit Committee is chaired by Richard Adam, and its other members are Baroness Sally Morgan and Amanda Burton. The Audit Committee will meet not less than twice a year.

81 2.3 Nomination Committee The Nomination Committee assists the Board in determining the composition and make-up of the Board. It is responsible for periodically evaluating the balance of skills, experience, independence and knowledge on the Board. It leads the process for board appointments and makes recommendations to the Board, taking into account the challenges and opportunities facing the Group in the future.

The UK Corporate Governance Code recommends that a majority of the members of a nomination committee should be independent non-executive directors. The Nomination Committee is chaired by David Howell, and its other members are Amanda Burton, Baroness Sally Morgan, Richard Adam and Federico Canciani. The Nomination Committee will meet not less than twice a year.

2.4 Remuneration Committee The Remuneration Committee assists the Board in determining its responsibilities in relation to remuneration, including making recommendations to the Board on the Company’s policy on executive remuneration, including setting the over-arching principles, parameters and governance framework of the Group’s remuneration policy and determining the individual remuneration and benefits package of each of the Company’s Executive Directors and its Company Secretary. The Remuneration Committee will also ensure compliance with the UK Corporate Governance Code in relation to remuneration.

The UK Corporate Governance Code provides that a remuneration committee should comprise at least three members who are independent non-executive directors (other than the chairman). The Remuneration Committee is chaired by Amanda Burton, and its other members are David Howell, Baroness Sally Morgan and Richard Adam. The Remuneration Committee will meet not less than twice a year.

2.5 Share dealing The Company has adopted, with effect from Admission, a code of securities dealings in relation to the Shares which is based on, and is at least as rigorous as, the model code published in the Listing Rules. The code adopted will apply to the Directors and other relevant employees of the Company.

3. Relationship agreement, election of independent directors and cancellation of listing The Company has entered into a relationship agreement with the Principal Shareholder and the Oaktree Funds in order to ensure that the Company will be able, at all times to carry out its business independently of the Principal Shareholder and the Oaktree Funds (being “controlling shareholders” of the Company for the purposes of the Listing Rules) and their respective associates and that all transactions and relationships between the Company and its controlling shareholders and their associates are at arm’s length and on a normal commercial basis. See paragraph 13.3 of Part XVIII: “Additional Information—Material contracts— Relationship Agreement” for a more detailed description of the terms of the Relationship Agreement.

For so long as the Company has a controlling shareholder, the Articles allow for the election of any independent director to be approved by separate resolutions of (i) the Shareholders and (ii) the Shareholders excluding any controlling shareholder. If either of the resolutions is defeated, the Company may propose a further resolution to elect or re-elect the proposed independent director which (a) may be voted on within a period commencing 90 days and ending 120 days from the original vote, and (b) may be passed by a vote of the Shareholders voting as a single class. Furthermore, in the event that the Company wishes the FCA to cancel the listing of the Shares on the premium segment of the Official List or transfer the Shares to the standard listing segment of the Official List, the Company must obtain at a general meeting the prior approval of (y) a majority of not less than 75 per cent. of the votes attaching to the Shares voted on the resolution and (z) a majority of the votes attaching to the Shares voted on the resolution excluding any Shares voted by a controlling shareholder.

In all other circumstances, the Principal Shareholder has, and will have, the same voting rights attached to the Shares as all other Shareholders.

82 4. Conflicts of interest Save for their capacities as persons legally and beneficially interested in Shares as set out in paragraph 8 of Part XVIII: “Additional Information—Interests of the Directors and Senior Management” and save for the appointment of Federico Canciani and James Van Steenkiste, as representatives of the Principal Shareholder, pursuant to the terms of the Relationship Agreement (see paragraph 13.3 of Part XVIII: “Additional Information—Material contracts—Relationship Agreement”) there are:

(i) no potential conflicts of interest between any duties to the Company of the Directors and members of Senior Management and their private interests and/or other duties; and

(ii) no arrangements or understandings with the Principal Shareholder, any other major shareholders, customers, suppliers or others pursuant to which any Director or member of Senior Management was selected.

83 PART XI

SELECTED FINANCIAL AND OPERATING INFORMATION

The selected financial information relating to the Group set out below has been extracted, without material adjustment, from Section B of Part XIV: “Historical Financial Information”. The selected financial information relating to Millgate set out below has been extracted, without material adjustment, from Section D of Part XIV: “Historical Financial Information”. The selected non-IFRS financial information and operating information relating to the Group set out below has been calculated on the basis set out in Part III: “Presentation of Information on the Group”. The selected financial and operating information presented below should be read in conjunction with Part XII:”Operating and Financial Review”. Investors should read the whole of this Prospectus before making an investment decision and not rely solely on the summarised information in this Part XI: “Selected Financial and Operating Information”.

Selected Financial Information of the Group Selected Combined and Consolidated Statement of Comprehensive Income Data of the Group

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Revenue ...... 276,957 452,797 547,486 Cost of sales ...... (233,504) (375,413) (431,690) –––––––– –––––––– –––––––– Gross profit...... 43,453 77,384 115,796 Administrative expenses...... (26,440) (35,142) (47,870) –––––––– –––––––– –––––––– Group operating profit ...... 17,013 42,242 67,926 Analysed as: Underlying group operating profit ...... 26,162 47,120 91,166 Less: Share of associate and joint ventures’ operating profit... (2,633) (4,136) (16,685) Less: Non-underlying items...... (6,516) (742) (6,555) Group operating profit ...... 17,013 42,242 67,926 Finance costs ...... (28,980) (51,944) (52,294) Finance income ...... 4,816 2,264 1,803 Share of profit from associate & joint ventures...... 1,876 2,025 10,584 –––––––– –––––––– –––––––– (Loss)/profit before income tax ...... (5,275) (5,413) 28,019 –––––––– –––––––– –––––––– Income tax expense...... (3,689) (6,536) (8,186) –––––––– –––––––– –––––––– (Loss)/profit for the year ...... –––––––– (8,964) –––––––– (11,949) –––––––– 19,833 (Loss)/profit is attributable to: Owners of the parent...... (9,108) (11,828) 19,623 Non-controlling interests...... 144 (122) 210 –––––––– –––––––– –––––––– –––––––– (8,964) –––––––– (11,949) –––––––– 19,833

84 Consolidated Statement of Financial Position of the Group Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Assets Non-current assets Intangible assets ...... 32,459 60,654 59,453 Property, plant and equipment ...... 1,651 1,244 2,406 Investment in joint ventures ...... 23,315 19,692 50,097 Investment in associate...... 6,197 8,841 4,164 Available for sale financial assets ...... 10,461 10,862 10,535 Derivative financial instruments...... 716 412 6 Deferred tax assets ...... 11,071 5,902 5,606 Trade and other receivables...... 7,691 24,376 15,349 –––––––– –––––––– –––––––– 93,561 131,983 147,616 Current assets Inventories ...... 274,030 380,778 439,542 Trade and other receivables...... 52,815 76,135 105,450 Cash and cash equivalents...... 228 172 354 –––––––– –––––––– –––––––– 327,073 457,085 545,346 –––––––– –––––––– –––––––– Total assets ...... 420,634 589,068 692,962 –––––––– –––––––– –––––––– Liabilities Current liabilities Trade and other payables ...... (99,628) (139,531) (181,140) Current income tax liabilities...... (6) (4,196) (4,043) Provisions...... (765) (1,450) (1,144) –––––––– –––––––– –––––––– (100,399) (145,177) (186,327) –––––––– –––––––– –––––––– Non-current liabilities Borrowings ...... (267,507) (366,408) (343,361) Trade and other payables ...... (45,624) (81,696) (148,930) Provisions...... (5,636) (4,345) (1,110) –––––––– –––––––– –––––––– (318,767) (452,449) (493,401) –––––––– –––––––– –––––––– Total liabilities ...... (419,166) (597,626) (679,728) –––––––– –––––––– –––––––– Net assets/(liabilities) ...... –––––––– 1,468 –––––––– (8,558) –––––––– 13,234 Equity Share capital...... 8 18 19 Share premium ...... 687 870 1,075 Reserves ...... 629 (9,469) 11,907 –––––––– –––––––– –––––––– Equity attributable to owners of the parent...... 1,324 (8,581) 13,001 Equity attributable to non-controlling interest...... 144 23 233 –––––––– –––––––– –––––––– Total equity ...... –––––––– 1,468 –––––––– (8,558) –––––––– 13,234

85 Summary Combined and Consolidated Cash Flow Statement of the Group Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Net cash inflow from operating activities...... 200,300 26,576 16,136 Net cash (outflow)/inflow from investing activities ...... (4,084) (86,899) 9,983 Net cash (outflow)/inflow from financing activities...... (195,988) 60,267 (25,937) Net increase/(decrease) in cash and cash equivalents...... 228 (56) 182 Cash and cash equivalents at beginning of the period...... – 228 172 Cash and cash equivalents at the end of the period ...... 228 172 354

Non-IFRS Financial and Non-Financial Operating Data of the Group The following tables show certain of the Group’s KPIs during the periods under review.

Year ended 30 September (unaudited) ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (Units) Completions Housebuilding...... 555 696 653 Partnerships...... 1,036 1,348 1,711 Total Group...... 1,591 2,044 2,364

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Underlying Group Operating Profit Housebuilding...... 4,924 25,386 51,562 Partnerships...... 21,238 21,734 39,604 Total Group...... 26,162 47,120 91,166

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (%) Underlying Group Operating Profit Margin Housebuilding...... 3.2 9.9 15.6 Partnerships...... 13.8 10.3 13.9 Total Group ...... 8.5 10.1 14.8

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) TNOAV Housebuilding...... 232,933 288,484 334,321 Partnerships...... 21,179 60,003 54,179 Total Group...... 254,112 348,487 388,500

86 Year ended 30 September (unaudited) ––––––––––––––––——————–––––––– 2013(1) 2014 2015 –––––––– –––––––– –––––––– (%) ROCE Housebuilding ...... 2.1 9.7 16.6 Partnerships...... 100.5 53.5 69.4 Total Group ...... 10.4 15.6 24.7

Note: (1) 2013 ROCE is calculated based on average of the 2012 unaudited TNOAV (which was £230.2 million for the Housebuilding division and £21.1 million for the Partnerships division) and 2013 TNOAV. Year ended 30 September (unaudited) ––––––––––––––––——————–––––––– 2013(1) 2014 2015 –––––––– –––––––– –––––––– (X) Asset Turn Housebuilding...... 0.7 1.0 1.1 Partnerships...... 7.3 5.3 5.1 Group...... 1.2 1.6 1.7

Note: (1) 2013 asset turn is calculated based on average 2012 unaudited TNOAV (which was £230.2 million for the Housebuilding division and £21.1 million for the Partnerships division) and 2013 TNOAV.

Selected Financial Information of Millgate Statement of Comprehensive Income of Millgate Year ended 30 September ––––––———–––––––––– 2013 2014 –––––––– –––––––– (£’000) Revenue ...... 53,982 68,243 Cost of sales ...... (40,944) (43,719) –––––––– –––––––– Gross profit...... 13,038 24,524 Administrative expenses...... (4,212) (8,020) –––––––– –––––––– Operating Profit ...... 8,826 16,504 Analysed as: Underlying operating profit...... 8,826 18,503 Less: Non-underlying items...... – (1,999) Operating profit...... 8,826 16,504 Finance costs ...... (1,190) (2,308) –––––––– –––––––– Profit before income tax ...... 7,636 14,196 Income tax expense...... (1,865) (4,054) –––––––– –––––––– Profit after tax ...... 5,771 10,142 Other comprehensive income...... – – –––––––– –––––––– Total comprehensive income for the year ...... –––––––– 5,771 –––––––– 10,142

87 Statement of Financial Position of Millgate Year ended 30 September ––––––———–––––––––– 2013 2014 –––––––– –––––––– (£’000) Assets Non-current assets Property, plant and equipment ...... 300 275 –––––––– –––––––– 300 275 Current assets Inventories ...... 71,381 93,496 Trade and other receivables...... 559 554 Cash and cash equivalents...... – 1,455 –––––––– –––––––– 71,940 95,505 –––––––– –––––––– Total assets ...... –––––––– 72,240 –––––––– 95,780 Current liabilities Trade and other payables ...... (7,532) (52,572) Borrowings ...... (7,750) – Current income tax liabilities...... (1,889) (2,920) –––––––– –––––––– (17,171) (55,492) Non-current liabilities Borrowings ...... (24,383) – Deferred tax liabilities...... (41) (13) –––––––– –––––––– (24,424) (13) –––––––– –––––––– Total liabilities ...... (41,595) (55,505) –––––––– –––––––– Net assets ...... –––––––– 30,645 –––––––– 40,275 Equity Share capital...... 82 82 Share premium ...... 202 339 Other reserve ...... 6 6 Retained earnings...... 30,355 39,848 –––––––– –––––––– Total equity ...... –––––––– 30,645 –––––––– 40,275 Summary Statement of Cash Flows of Millgate Year ended 30 September ––––––———–––––––––– 2013 2014 –––––––– –––––––– (£’000) Net cash inflow from operating activities...... 1,432 4,915 –––––––– –––––––– Net cash outflow from investing activities...... (99) (104) –––––––– –––––––– Net cash outflow from financing activities...... (1,333) (3,356) –––––––– –––––––– Net increase in cash and cash equivalents ...... – 1,455 Cash and cash equivalents at beginning of the period...... – – –––––––– –––––––– Cash and cash equivalents at the end of the period ...... – 1,455 –––––––– ––––––––

88 PART XII

OPERATING AND FINANCIAL REVIEW

The following discussion summarises the results of operations and the financial condition of the Group as of and for the years ended 30 September 2013, 30 September 2014 and 30 September 2015, and should be read in conjunction with the Group Financial Information set out in Section B of Part XIV: “Historical Financial Information” and the other financial information contained elsewhere in this Prospectus. For the avoidance of doubt, the Group Financial Information represents the audited combined and consolidated financial information of the Operating Group as of and for the years ended 30 September 2013, 30 September 2014 and 30 September 2015. See Part III: “Presentation of Information on the Group”.

The following discussion of the Group’s results of operations and financial condition contains forward-looking statements that reflect the current view of the Group’s management. The Group’s actual results could differ materially from those anticipated in any forward-looking statements as a result of the factors discussed below and elsewhere in this Prospectus, particularly under Part II: “Risk Factors”. Investors should carefully consider the following information, together with the other information contained in this Prospectus, before investing in the Shares.

Overview The Group is a leading UK home builder and urban regeneration partner, operating in London and the South East of England, and with a presence in the North West of England through its Partnerships division. The Directors believe that the Group is one of the most effective Strategic Land developers and urban regeneration partners in the UK, with a total land bank of 26,213 plots as of 30 September 2015, 55.9 per cent. of which had planning permission. The Directors believe that the Group’s reputation is founded on its thorough knowledge of the UK planning system, its integrity in its dealings with public and private sector landowners, its design and delivery of quality housing and its ability to deliver social and physical infrastructure to create a sense of place and community.

The Group operates through two business divisions:

• Housebuilding: The Housebuilding division develops medium to larger-scale sites, providing private and affordable housing on land owned or controlled by the Group, primarily around London and in the South East of England. The Housebuilding division operates under both the Countryside and Millgate brands. Millgate was acquired by the Group in February 2014 and was integrated into the Housebuilding division as its premium housebuilding brand in the Home Counties. In the year ended 30 September 2015, the Housebuilding division completed 653 homes, comprising 456 private and 192 affordable homes, with the remaining five built under design and build contracts. The division was active on 31 sites as of 30 September 2015, with key current projects including Beaulieu, Greenwich Millennium Village, Great Kneighton, St. Luke’s Park, and Kings Park. This division has more than 30 years’ experience in promoting Strategic Land through the planning process, and its operations are supported by a land bank of 18,410 plots with a GDV of £5.7 billion as of 30 September 2015.

In the year ended 30 September 2015, the Housebuilding division generated revenue (including the proportional contribution of associate and joint ventures) of £330.7 million, 53.7 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures). As of 30 September 2015, the Housebuilding division had a forward private order book of £84.4 million, which represented 23 per cent. of the total planned sales for the 2016 financial year.

• Partnerships: The Partnerships division specialises in medium to larger-scale urban regeneration of public sector land delivering private and affordable homes. It operates primarily in and around London and in the North West of England. Regeneration projects are developed in partnerships predominantly with public sector landowners, such as LAs and housing associations. The Directors believe that the Partnerships division’s nearly 30-year track record of delivering more than 45 regeneration projects

89 makes it one of the most experienced deliverers of regeneration in the UK. The Directors believe that the Group’s reputation is further strengthened by its introduction of place-making to urban regeneration, using a design-based approach to development to provide residents of the Group’s homes with a sense of place. In the year ended 30 September 2015, the Partnerships division completed 1,711 new homes, of which 634 homes were sold to private buyers and 969 were sold as part of affordable housing schemes, with the remaining 108 built under design and build contracts. As of 30 September 2015, the division was active on 37 sites, with key current projects including Acton Gardens, Canning Town and New Broughton Village. As of the same date, the Partnerships division owned or had development agreements in place on 7,803 plots (with a GDV of £1.7 billion) and had been named the preferred bidder (i.e., it had been chosen as the final candidate with which an LA seeks to finalise a DA) on a further 1,542 plots (with a GDV of £488 million). Together, these plots are equivalent to a 5-year supply of homes, based on the Partnerships division’s completion levels for the year ended 30 September 2015.

In the year ended 30 September 2015, the Partnerships division generated revenue (including the proportional contribution of associate and joint ventures) of £285.1 million, or 46.3 per cent. of the Group’s total revenue (including the proportional contribution of associate and joint ventures).

In the year ended 30 September 2015, the Group generated revenue (including the proportional contribution of associate and joint ventures) of £615.8 million and an underlying operating profit of £91.2 million. As of 30 September 2015, the Group had a TNOAV of £388.5 million.

Key factors affecting the Group’s results of operations Macroeconomic and UK property market conditions The Group’s operating results are dependent on macroeconomic factors and conditions in the UK residential property market, in particular in London, the South East and the North West of England. Historically, the strength of the UK residential property market has been linked to that of the UK economy as a whole, which in turn is influenced by both European and global macroeconomic conditions, as well as internal factors within the UK, and as such has been cyclical. For example, the economic weakness experienced in the UK following the global financial crisis in 2008 caused a significant decline in demand for residential property, leading to a sharp decrease in the number of residential property transactions in the UK. Between 2007 and 2010, new home completions in the UK decreased from 177,000 to 106,720, or 39.7 per cent., according to the Office for National Statistics. Similarly, average UK house prices also decreased from £214,000 to £194,000 between 2007 and 2009, according to the Office for National Statistics. During the periods under review, prices have recovered since the global financial crisis, while, as of 30 September 2015, completion volumes remained 28 per cent. below their 30 March 2007 peak pre-crisis levels. Moreover, the recent financial and political crises in the Eurozone, austerity measures introduced by the UK Government and uncertain global economic conditions have created pressure on the macroeconomic climate in the UK and the UK residential property market. The Group’s results are also affected to a certain extent by the supply of housing in the second-hand market, as increased stock in the second-hand market typically leads to fewer opportunities to construct (and lower demand for) new homes.

While macroeconomic factors broadly affect the UK residential property market as a whole, property trends in the UK historically have varied significantly by region. The Group has concentrated its Housebuilding division on economically resilient areas around London and in the South East of England, which historically have been more robust during periods of economic downturn. The Directors believe that this, together with the Group’s lower-risk strategy of buying Strategic Land, should help to mitigate its risk throughout the economic cycle. In its Partnerships division, the Group has concentrated its operations in the North West of England and the South East of England, where areas of urban regeneration are more susceptible to macro economic impacts. The Group believes that it is able to mitigate this risk through its use of the Partnership model that seeks to ensure that a small percentage of land is owned outright, that DAs include priority profits and that larger sites have phased viability.

90 The Group’s growth plans are primarily within its current areas of operation, but it would consider other geographic areas of growth utilising the Partnerships business model, provided that the Group could secure the relationships and resources to develop a critical mass of business.

In the periods under review and going forward, UK budget cuts have had and are expected to have an impact on the funding available to LAs for essential services. However, the Directors believe that in an environment of austerity, LAs and housing associations are incentivised to regenerate older estates as regenerated developments typically will generate additional council tax revenue and help these entities monetise their assets. As a result, the Directors believe that the Group benefits from a degree of resilience throughout the macroeconomic cycle as the Partnerships division is able to secure projects in times of economic downturn during which the Housebuilding division may experience a slowdown.

The availability and affordability of mortgages The Group’s operating results are particularly affected by changes in the availability and affordability of mortgages, which can impact the Group’s housing sales prices and transaction volumes. Home purchases in the UK are often facilitated through mortgage lending, and 86 per cent. of the Group’s homes were purchased by customers with the assistance of mortgages in the year ended 30 September 2015. Since the global financial crisis in 2008, access to residential mortgage credit in the UK has been restricted, particularly at higher loan-to-value ratios, due to a number of factors, including a reduction in the number of mortgage providers and products, stricter underwriting standards, the introduction of stress-testing and a desire by certain lenders to limit their lending exposure in relation to specific types of housing developments. Mortgage credit conditions have improved since the height of the global financial crisis, and the UK Government has introduced schemes to assist certain home purchasers (see “ – Government purchase assistance schemes and grants”), which have enabled a growth in sales volumes and supported prices in the wider UK housebuilding industry for both first-time buyers and existing homeowners.

When mortgages are generally available, low interest rates tend to encourage consumers to obtain financing and purchase homes, although, despite the current low base rate environment, levels of mortgage lending in the UK during the periods under review remained low compared to that of certain other developed countries. During the periods under review, the Bank of England base rate has remained at 0.5 per cent. Increases in the base rate have previously had a negative impact on the UK property market because interest rates charged on mortgages have increased correspondingly, thereby making it more expensive for prospective buyers to purchase residential property. Prospective buyers who can obtain a mortgage at current interest rates may be deterred by the possibility of increased rates (and, in turn, higher monthly interest payments) in the future and instead elect to remain in their current property or to continue renting. Investor buyers are also sensitive to interest rate fluctuations as higher interest rates negatively affect their investment returns. The Directors believe that the Bank of England may raise its base rate in the near-term. While it is possible that competitive pressures will cause banks to reduce their margins and thus not raise mortgage rates in the event the Bank of England’s base rate is increased, higher mortgage rates would likely have an adverse impact on the Group’s transaction volumes, as well as the value of property transactions facilitated by the Group and the revenue derived from them.

Product mix and ASPs The Group’s profitability is affected by the product mix of the homes that it sells. The Group’s product mix falls into three primary categories: private housing, PRS and affordable housing. The Group’s target gross margins for these various sale types are 20 per cent. for private housing, 10 per cent. for PRS and 5-10 per cent. for affordable housing. The Directors believe that the Group has opportunities for margin improvement across both of the Group’s divisions through an anticipated change in the Group’s product mix in the medium-term (and the Group’s projections assume no housing price or cost inflation). For example, within the Partnerships division, the PRS business is a growing part of the Group’s strategy. Due to housing supply shortages, particularly for individuals who do not qualify for affordable housing, but who are unable to afford to purchase a home, the UK Government and LAs have been increasingly supportive of PRS housing particularly when larger institutional and corporate investors are involved. The Group expects that affordable housing, which typically provide lower margins and which represented approximately 49 per cent. of the Group’s total completions in the year ended 30 September 2015, will decrease to approximately

91 47 per cent. of total completions by 2018, while private sales, which typically offer higher margins, are expected to increase from approximately 46 per cent. of total completions in the year ended 30 September 2015 to approximately 51 per cent. by 2018. Design and build projects have typically delivered low margins and are now considered non-core. They represented 5 per cent. of the Group’s total completions in the year ended 30 September 2015 and are expected to decrease to only 2 per cent. of total completions by the year ending 30 September 2018.

The Group’s gross margins will also be impacted by a change in the mix between the number of Housebuilding division completions and those for the Partnerships division. Because the Housebuilding division typically produces higher gross margins (with a target project hurdle rate of 22 per cent.) than the Partnerships division (with a target project hurdle rate of 15 per cent.), as the proportion of Housebuilding division completions grows in the medium term, the Group’s overall gross margins are likely to increase. However, during downturns in the economic cycle, the lower-margin Partnerships division is expected to increase as a proportion of the total mix as the Directors believe that it is a more resilient business model.

Ongoing mix improvement has also driven an increase in the Group’s private sale ASPs over the periods under review. The Group’s private sale ASPs were £258,000, £329,000 and £385,000 for the years ended 30 September 2013, 2014 and 2015, respectively, while the Group’s private sale order book ASP was £444,000 as of 30 September 2015. The increases in private sale ASPs were driven in part by a higher proportion of constructed homes (rather than flats), which increased from 60 per cent. in the year ended 30 September 2013 to 75 per cent. for the year ended 30 September 2015, as well as the effect of higher-value home sales by Millgate. In addition, the increase in the Group’s private sale order book ASP was partially attributable to improved sales mix, with more higher-value units forward sold, particularly by Millgate.

Private sale ASPs for the Housebuilding division were £343,000, £490,000 and £583,000 for the years ended 30 September 2013, 2014 and 2015, respectively, while the private sale ASP order book for the Housebuilding division was £743,000 as of 30 September 2015. The increase in the Group’s private sale order book ASP was partially attributable to the increased effect of Millgate’s sales, which generally offer significantly higher ASPs than that of other Group sales. The Directors anticipate that the Housebuilding division’s private sale ASPs will benefit in 2016 from sales at higher value schemes (such as its Aura (Great Kneighton) and Chalfont developments), but will decrease in subsequent years as the schemes end, and the Directors expect the Housebuilding division’s private sale ASPs (before taking into account the impact of any general market house price inflation) to be approximately £550,000 to £600,000 in the medium-term. The Group also intends to continue to help shape its ASPs in the future by managing the timing of its sales in order to analyse and learn from earlier sales in a development in order to understand market demand and manage unit sizes and numbers, as well as ASPs for later sales in a development.

Private sale ASPs for the Partnerships division were £188,000, £193,000 and £242,000 for the years ended 30 September 2013, 2014 and 2015, respectively, while its private sale order book ASP was £271,000 as of 30 September 2015. The Directors expect the Partnerships division’s private sale ASPs (before taking into account the impact of any general market house price inflation) to be approximately £300,000 in the medium-term, due to the “regeneration impact” (i.e., higher prices on homes sold in later phases of regeneration projects due to the perceived improvement in the community following the earlier phases of the regeneration project) as well as the completion of units at the Group’s Dollis Valley project, which, due to its location in Barnet, has relatively higher ASPs.

ASPs for affordable housing in the Housebuilding division, which were £138,000 for the year ended 30 September 2015, are expected to increase to approximately £150,000 in the year ending 30 September 2016 (as most of these sales are already contracted), remaining relatively flat thereafter, independent of any effect of inflation. In the Partnerships division, affordable ASPs were £99,000 in the year ended 30 September 2015, and the Directors anticipate that they will rise to approximately £110,000 in the year ending 30 September 2016, remaining relatively flat thereafter.

92 The Group’s cost base A significant portion of the Group’s costs relate to the costs of building its housing developments, including the costs of raw materials and labour. Factors within the Group’s control, such as the type of units it builds (which determines the composition of the materials required), and factors outside the Group’s control, such as raw materials prices and wage costs, can have a material impact on the Group’s build costs and, accordingly, the Group’s financial results.

During economic downturns, such as that following the financial crisis, the Group may benefit from certain decreases in raw materials prices and more competitive sub-contractor tendering. However, in the periods under review, the Group’s contractor and labour costs have risen, and in certain areas, competition among housebuilders for qualified labour has resulted in labour shortages and materially higher labour costs. In addition, although to a lesser extent, the Group’s materials costs have increased as well, primarily due to supply shortages. For example, in 2014, a brick shortage in the UK resulted in a significant increase in brick prices that persisted for much of the year. The Directors anticipate that inflationary increases in house prices will be accompanied by build cost pressures in the future.

To help mitigate cost pressures going forward, the Group intends to increase the use of standardised home types, standard design details and specifications to help reduce and improve the predictability of costs, as well as improve construction build times and quality. For example, in the year ended 30 September 2015, 54.4 per cent. of the Group’s homes were built using a standardised house type, and this is anticipated to increase to approximately 60 per cent. over the medium-term. The Directors believe that this shift to increased construction standardisation can help reduce costs and build times while continuing to allow the Group to utilise its skills and experience in design and place-making.

The Partnerships division’s use of phased viability allows increased build costs to be included in future phases, while maintaining priority profits. This mechanism mitigates the impact of cost increases on future phases, but does not affect cost increases during the construction of a phase. However, to partially mitigate this risk and before finalising the viability of a phase, the Group normally seeks to formally tender larger cost elements to its sub-contractors, helping to increase its cost visibility. The Group will also seek to maintain its use of Group-level purchasing agreements to improve efficiency, and as housing types are standardised, the Group’s central buying function may be able to procure more of the materials for the Group’s divisions. The Group is also exploring the use of off-site manufacture for its timber frame products, which could further improve efficiency.

The Group is targeting gross margins of 24 per cent. and 20 per cent. for its Housebuilding and Partnerships divisions, respectively, by the year ending 30 September 2018. For the Housebuilding division, the Group has set a project hurdle gross margin rate of 22 per cent., and the Directors believe that typically strategically sourced land can deliver an additional one to two per cent. of incremental gross margin due to discounts embedded in the Group’s land bank. For Partnerships projects, which typically have a 15 per cent. target gross margin, fees and performance are targeted to drive gross margins, including fees and overage, to approximately 20 per cent.

Overhead costs (including the proportional contribution of associate and joint ventures overhead costs) represented 6.6 per cent. of the Group’s revenue (including the proportional contribution of associate and joint ventures) in the year ended 30 September 2015, although as a result of efficiencies expected to be obtained through increased scale in the Group’s operations, the Directors expect that overhead costs will reduce to four to five per cent. of revenue in the medium-term. However, if the Group’s operations grow faster than expected, the Group likely would incur certain increases in overhead costs.

The Directors are targeting Group underlying operating margins of at least 17 per cent. going forward. In the Housebuilding division, underlying operating margins are expected to increase to approximately 18 per cent. over the next three years as the Group captures operational efficiencies. Given expected gross margins in the Partnerships division, the Directors are targeting an underlying operating margin of approximately 15 per cent.

93 Numbers of completions and operating cycle The Group’s profitability is influenced by the number of completions it achieves and the margin it earns on those completions. The total number of completions in a given year is influenced by the number of active sites from which the Group is operating and its operating cycle.

In the periods under review, the Group’s Housebuilding division experienced a significant increase in private completions, with a gradual reduction in design and build completions. The division achieved 555 completions in the year ended 30 September 2013, of which 338 were private home completions, 151 were affordable completions and 66 were design and build completions. In the year ended 30 September 2014, the division achieved 696 completions, of which 406 were private home completions, 212 were affordable completions and 78 were design and build completions. In the year ended 30 September 2015, the division had 653 completions, of which 456 were private home completions, 192 were affordable completions and five were design and build completions. The Directors believe that the Group has strong visibility on the number of completions the Housebuilding division for the year ending 30 September 2016 as well. The Directors expect the Housebuilding division to complete at least 750 completions in the year ending 30 September 2016. More than two-thirds of this growth is expected from affordable homes, which are expected to represent at least 250 completions. Private sales are expected to rise to 500 completions, with 23 per cent. of this target having already been sold as of 30 September 2015. By the year ending 30 September 2018, the Directors expect completions to grow to more than 1,200 units, with a similar mix to that of the year ended 30 September 2015 (i.e., at least 900 private completions and 300 affordable completions, with no design and build).

The Group’s Partnerships division had 1,036 completions in the year ended 30 September 2013, of which 409 were private completions, 201 were affordable completions and 426 were design and build completions. In the year ended 30 September 2014, the division had 1,348 completions, of which 479 were private completions, 468 were affordable completions and 401 were design and build completions. In the year ended 30 September 2015, the division had 1,711 completions, of which 634 were private completions, 969 were affordable completions and 108 were design and build completions. The increase in the periods under review reflected overall volume growth, despite a strategic reduction in design and build completions. In the year ending 30 September 2016, the Directors expect the Partnerships division’s completions to be at least 1,900, of which at least 625 are expected from private completions and at least 1,200 are expected from affordable completions. Thus, growth is expected to be driven primarily from affordable housing, in particular PRS. By the year ending 30 September 2018, the Directors expect completions to exceed 2,400 units, with more than 1,000 private and 1,400 affordable completions, respectively, in addition to approximately 100 design and build completions. Despite the Group’s relatively strong visibility on its future completions, as the Group’s revenue recognition policy (consistent with industry norms) reflects the completion of construction milestones, the Group’s revenue can be affected by inconsistent project operating cycles, which can be caused by a variety of factors (including those outside of the Group’s control) such as weather conditions, fluctuations in demand and execution risk. For example, the Group’s operating cycle is dependent on obtaining the necessary labour and materials to complete its developments on schedule. In the past, the Group has experienced instances in which sub-contractors failed to perform their obligations to the Group (primarily due to their own financial difficulties), resulting in project delays for the Group’s developments. The Directors believe that this risk can be partially mitigated for work on larger developments, as these projects tend to provide sub-contractors with greater visibility of their own revenue streams, helping to increase the likelihood that they will allot their resources so as to meet their contractual obligations with the Group. The Directors also believe that increased construction standardisation, as discussed above, will allow the Group to better manage its labour costs, particularly for specialised labour, and will be an attractive proposition for sub-contractors as well, helping to ease their work. Nevertheless, as a result of inconsistency in its operating cycle, the Group has experienced and may experience in the future a degree of variability in its results, which can make financial periods difficult to directly compare. For example, when constructing blocks of flats, the Group is often unable to recognise private completions until the entire block is completed. If the scheduled completion date is close to the close

94 of a financial reporting period, this could create operational pressure on the Group to complete the project, or risk needing to recognise the relevant revenue in a later reporting period.

The Group’s land bank The Group’s results of operations are highly dependent on its land banks.

As of 30 September 2015, the Housebuilding division’s land bank consisted of 18,410 plots with a total GDV of £5.7 billion. Of these plots, 15,832 or 86.0 per cent. were strategically sourced, with a GDV of £4.5 billion as of 30 September 2015. An additional 1,811 plots were bought with planning permission at market value, with a GDV of £1.0 billion, and 767 were from legacy land sources, with a GDV of £201 million. The Group had also agreed contractual terms (but had not signed contracts) for an additional 4,596 plots in the Housebuilding division.

Of the 18,410 plots in the Housebuilding land bank as of 30 September 2015, 8,838 or 48.0 per cent. had planning permission, while 35.1 per cent. had either allocated or a draft allocation for planning permission in a local plan. The remaining 16.9 per cent. had no planning status. Of the Group’s estimated completions for the years ending 30 September 2016 and 2017, 100 per cent. have planning permission in place, while 87 per cent. of the estimated completions for the year ending 30 September 2018 already have planning permission.

The Housebuilding division’s land bank is secured through a range of contractual arrangements, which are intended to provide a blend of risk and return appropriate to the land being acquired. Most of the Group’s land is secured under option agreements and conditional contracts, for which the price of a site is acquired by reference to the prevailing market price at the time of acquisition (after planning permission has been secured), with purchases made on average at a 10 per cent. discount to open market value. See Part IX: “Information on the Group—Structure and Operations—Housebuilding Division—Land acquisition”.

As of 30 September 2015, the Partnerships division owned or had DAs in place on 7,803 land plots with a GDV of £1.7 billion and had been named the preferred bidder for an additional 1,542 plots with a GDV of £488 million. Together, these plots are equivalent to a 5-year supply of homes, based on the Partnerships division’s completion levels for the year ended 30 September 2015. In addition, the Group had further identified 15,487 plots on which it had yet to bid or was in the process of bidding. The majority of sites in the Partnerships land bank are held under DAs pursuant to which the Group constructs the site in phases through build licences, with units transferred directly from the owner of the site to the purchaser, which is usually either a PRS investor, affordable housing owner, a joint venture of which the Group is a partner, or the Group directly. In the case of PRS housing, the Group generally does not acquire the land on which it constructs homes, and in the case of a joint venture, the Group only owns the land in proportion to its ownership of the joint venture.

Historically, the Group has sold land where it no longer sought to pursue development. Going forward, the Directors expect that the Group will continue to make serviced commercial and non-core land sales. The Directors anticipate the Group will receive approximately £40 million in revenue and £10 million in net profit per year from ancillary income, the primary component of which is expected to be these types of land sales.

Government purchase assistance schemes and grants The Group benefits from UK Government-backed property purchase assistance schemes such as Help to Buy, which is administered by the HCA, and which provides assistance to homebuyers in the UK by reducing the minimum down payment required from the purchaser to 5 per cent. of a property’s value and providing an equity loan of up to 20 per cent. of the property value. In the year ended 30 September 2015, 38.4 per cent. of the Group’s homes were purchased with assistance from Help to Buy. Under current legislation, Help to Buy is scheduled to continue until 2021, and the 2015 Spending Review and Autumn Statement from the Government increased the funding level under Help to Buy in London to 40 per cent. of the property value (although the 2015 Spending Review and Autumn Statement also proposed to increase stamp duty payable on second homes and certain buy-to-let homes by 3 per cent. from April 2016). A reduction or discontinuation of Help to Buy may make it more difficult for the Group to sell homes and may

95 force the Group to either lower prices or increase its own shared equity programme, which has been closed to new participants since 2015.

The Group may also benefit from increased demand for new builds from first time buyers, as well as improved tenure mix on larger sites (through a reduction of affordable housing) as a result of the Starter Homes Initiative. Though the detailed mechanics of the Starter Homes Initiative are still pending passage of the Housing and Planning Bill, the intent is to allow UK housebuilders to develop underutilised or previously economically unviable brownfield land. The Government has indicated that it will require that LAs to produce a register of suitable brownfield sites that would then be eligible for a simplified planning “permission in principle”, which could potentially reduce the costs of securing planning as well. The Government also expects that developers on these sites would be exempt from s106 agreement or CIL requirements. In return, developers will be required to offer the homes built on the relevant land to first-time buyers at a minimum 20 per cent. discount to market value (up to approximately £450,000 in London and £250,000 outside of London, with the first homes expected to reach the market by 2016). The Starter Homes Initiative is expected to apply to all new build sites with sales to first-time buyers, subject to funding and eligibility.

In addition, the Group has previously received loans from the HCA, and the Group may seek additional funding from the HCA in the future. Like Help to Buy and the Starter Homes Initiative, funding for HCA loans is subject to change as a result of both economic and political factors, and the Group is unable to predict the extent to which such funding will be available in future periods.

Relationships with LAs The Group’s success and in particular that of its Partnerships division, which accounted for 50.0 per cent., 45.1 per cent. and 46.3 per cent. of the Group’s revenue (including the proportional contribution of associate and joint ventures) in the years ended 30 September 2013, 2014 and 2015, respectively, depends on its ability to maintain strong relationships with LAs, the HCA, housing associations and other local organisations, many of which are between specific individuals. Partnership projects are typically awarded by public bodies through competitive public procurement processes, often based on the perception by an LA or housing association of a developer’s expertise, design quality, reputation, price and value. Non-financial criteria, such as planning and design capability, delivery capacity and proposals to address social and economic sustainability issues, typically account for more than 50 per cent. of an applicant’s score in public procurement processes. New entrants and existing competitors may attempt to undercut the Group on pricing for regeneration projects going forward, and as a result, the Group’s reputation among, and relationships with, key LAs is critical to the success of the Partnerships division.

Impact of Millgate Acquired by the Group in February 2014, Millgate has been integrated into the Housebuilding division as its premium housebuilding brand, and the Group Financial Information reflects the impact of Millgate from 3 February 2014, its date of acquisition. Due to the significance of the acquisition, Millgate’s standalone financial information for the years ended 30 September 2013 and 2014 are presented in this Prospectus. See Section D of Part XIV “Historical Financial Information”. Millgate develops premium apartments and executive housing in the Home Counties. The Directors believe that Millgate’s reputation and market standing, earned over 25 years of premium development, affords it opportunities to obtain higher value, smaller sites by re-enforcing sellers’ confidence that Millgate will be able to secure planning permissions based on their design quality and planning approach. The full year standalone profit after tax of Millgate for the year ended 30 September 2014 was £10.1 million, compared to £5.8 million for the year ended 30 September 2013. This increase was primarily due to an increase in private sales units.

Current trading and prospects The Group saw strong trading in the first quarter of its 2016 financial year, covering the 13 weeks from 1 October to 31 December 2015. Cancellation rates and sales incentives remained low, confirming the continued customer demand for the Group’s products.

96 The Group’s unaudited performance highlights included: • The private forward order book was up 11.1 per cent. to £166.4 million from £149.7 million in the quarter ending 31 December 2014. • The Group had 453 completions, including both private and affordable housing, an increase of 9.4 per cent. from 414 units in the quarter ending 31 December 2014. • Private average selling prices rose to £513,000 from £367,000 in the quarter ending 31 December 2014 due to changes in tenure mix and house price inflation. • The Group’s sales rate was 0.65 sales per outlet per week, which fell within the 0.60 to 0.80 target range, though a decrease from 0.68 in the quarter ending 31 December 2014. • Six new sites were opened during the quarter, bringing the total number of open sales outlets to 32 as of 31 December 2015, with a further 31 sites under construction. • Build cost pressures across the business continued to ease and the Group remains focused on delivering overhead efficiencies as it increases output volumes. The Group’s land bank increased to 26,535 plots as of 31 December 2015 from 26,213 plots as of 30 September 2015, maintaining the Group’s long term visibility of future work. The Group secured 860 plots during the first quarter including 257 at South Oxhey and 269 at Norris Green, both within the Partnerships division. The Group saw increased levels of bid opportunities for the Partnerships division, where the pipeline of opportunities increased to over 27,000 plots. In particular, the Group is at an advanced stage of discussions with relevant LAs in relation to a number of potentially significant new development opportunities for the division. In January 2016, it was announced that the Partnerships division had been selected by the Greater London Authority to develop, together with London & Quadrant, Beam Park, a 71.7 acre site in Dagenham, East London with a GDV of £887 million. The development is expected to feature up to 3,000 new homes, of which the Group expects to develop up to 1,500, with 35 per cent. intended to be affordable homes. Construction is due to start in 2017 and to be completed in 2029. The planning environment remained positive for the Group in the first quarter, which had a total of 15,460 plots with planning within the land bank as of 31 December 2015 compared to 14,648 plots as of 30 September 2015. The Group obtained planning permission on 798 plots in the first quarter, including 591 at Knowsley, Merseyside. The Group continued to see political support for the housebuilding and regeneration sectors and the Government’s 2015 Spending Review and Autumn Statement contained a number of initiatives which further support the Group’s future growth plans.

Key income statement items Revenue Revenue consists of sale proceeds for private units, affordable homes, PRS and design and build units, as well as proceeds from land sales and commercial construction. Cost of sales Cost of sales consists of all costs associated with delivering a completed construction scheme, the largest elements typically being land, infrastructure, groundworks and the cost of construction. Both the materials and labour are generally provided by sub-contractors, while site supervisors are employed directly.

Administrative expenses Administrative expenses consist of the costs of running the Group’s operations that are not directly associated with the build out of sites, for example head office functions such as accounting, information technology expenses and human resources.

Finance costs Finance costs consist principally of interest payable, principally interest accrued on shareholder loans and interest payable to banks on loans. Finance costs also include amortisation of loan arrangement fees, interest on future land creditor payments and fair value movement in the value of interest rate hedges.

97 Results of operations of the Group The following table shows, for the periods indicated, certain items from the Group Financial Information.

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£’000) Revenue ...... 276,957 452,797 547,486 Cost of sales ...... (233,504) (375,413) (431,690) –––––––– –––––––– –––––––– Gross profit...... 43,453 77,384 115,796 Administrative expenses...... (26,440) (35,142) (47,870) –––––––– –––––––– –––––––– Group operating profit ...... 17,013 42,242 67,926 Analysed as: Underlying group operating profit ...... 26,162 47,120 91,166 Less: Share of associate and joint ventures’ operating profit...... (2,633) (4,136) (16,685) Less: Non-underlying items...... (6,516) (742) (6,555) Group operating profit ...... 17,013 42,242 67,926 Finance costs ...... (28,980) (51,944) (52,294) Finance income ...... 4,816 2,264 1,803 Share of profit from associate & joint ventures...... 1,876 2,025 10,584 –––––––– –––––––– –––––––– (Loss)/profit before income tax ...... (5,275) (5,413) 28,019 –––––––– –––––––– –––––––– Income tax expense...... (3,689) (6,536) (8,186) –––––––– –––––––– –––––––– (Loss)/profit for the year ...... –––––––– (8,964) –––––––– (11,949) –––––––– 19,833 Year ended 30 September 2015 compared to year ended 30 September 2014 Because the Group manages its business by tracking certain metrics, including the proportional contribution of associate and joint ventures, the discussion below includes an analysis of Group and segmental revenue, gross profit and operating profit both including and excluding the proportional share of the relevant metric attributable to associate and joint ventures. See Note 4 to the Group Financial Information in Section B of Part XIV: “Historical Financial Information” and Part III: “Presentation of Information on the Group”.

Revenue Revenue in the year ended 30 September 2015 was £547.5 million, an increase of £94.7 million, or 20.9 per cent., from £452.8 million in the year ended 30 September 2014. This increase was primarily due to an increase in the number of private homes sold (both due to an increase in the number of sales sites and higher numbers of sales at existing sites) and an uplift in the private ASP from £329,000 to £385,000, as well as an increase in the delivery of affordable and PRS units.

Revenue including the proportional contribution of associate and joint ventures in the year ended 30 September 2015 was £615.8 million, an increase of £147.1 million, or 31.4 per cent., from £468.7 million in the year ended 30 September 2014, which reflects the increase in revenue described above, as well as an increase of £52.4 million in the proportional contribution of associate and joint ventures. This additional increase was primarily due to an increase in private joint venture homes sold at existing sites and an increase in private joint venture ASP from £149,000 to £364,000.

Housebuilding Revenue generated by the Housebuilding division in the year ended 30 September 2015 was £278.7 million, an increase of £25.8 million, or 10.2 per cent., from £252.9 million in the year ended 30 September 2014. This increase was primarily due to an increase in private homes sold (both due to an increase in the number

98 of sales sites and higher numbers of sales at existing sites) and an uplift in the private ASP from £490,000 to £583,000.

Revenue generated by the Housebuilding division including the proportional contribution of associate and joint ventures in the year ended 30 September 2015 was £330.7 million, an increase of £73.3 million, or 28.5 per cent., from £257.4 million in the year ended 30 September 2014, which reflects the increase in revenue described above, as well as an increase of £47.5 million in the proportional contribution of associate and joint ventures. This additional increase was primarily due to an increase in private joint venture homes sold at existing sites, and an increase in private joint venture ASP from £229,000 to £319,000.

Partnerships Revenue generated by the Partnerships division in the year ended 30 September 2015 was £268.7 million, an increase of £68.9 million, or 34.5 per cent., from £199.8 million in the year ended 30 September 2014. This increase was primarily due to an increase in private homes sold (both due to an increase in the number of sales sites and higher numbers of sales at existing sites) and an increase in private ASP from £193,000 to £242,000.

Revenue generated by the Partnerships division including the proportional contribution of associate and joint ventures in the year ended 30 September 2015 was £285.1 million, an increase of £73.8 million, or 34.9 per cent., from £211.3 million in the year ended 30 September 2014, which reflects the increase in revenue described above, as well as an increase of £4.9 million in the proportional contribution of associate and joint ventures. This additional increase was primarily due to an uplift in private joint venture ASP from £148,000 to £491,000, predominantly related to phase two at Acton Gardens.

Cost of sales Cost of sales in the year ended 30 September 2015 was £431.7 million, an increase of £56.3 million, or 15.0 per cent., from £375.4 million in in the year ended 30 September 2014. This increase was primarily due to the increased number of units built in the year and an increase in construction cost prices, which the Group broadly estimates to have increased by between four and seven per cent. across the Group, though there may be greater variation from site to site.

Gross profit Gross profit in the year ended 30 September 2015 was £115.8 million, an increase of £38.4 million, or 49.6 per cent., from £77.4 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Gross profit including the proportional contribution of associate and joint ventures in the year ended 30 September 2015 was £133.1 million, an increase of £50.9 million, or 61.9 per cent., from £82.2 million in the year ended 30 September 2014, which reflects the increase in gross profit described above, as well as an increase of £12.5 million in the proportional contribution of associate and joint ventures. This additional increase was primarily due to the factors discussed above.

Administrative expenses Administrative expenses in the year ended 30 September 2015 were £47.9 million, an increase of £12.8 million, or 36.5 per cent., from £35.1 million in the year ended 30 September 2014. This increase was primarily due to an increase in staff costs, driven by an increase in the number of Group employees and higher average salaries and bonuses.

Group operating profit Group operating profit in the year ended 30 September 2015 was £67.9 million, an increase of £25.7 million, or 60.9 per cent., from £42.2 million in the year ended 30 September 2014, due to the factors discussed above.

99 Underlying Group operating profit Underlying Group operating profit, which comprises Group operating profit, the Group’s share of associate and joint ventures’ operating profit and excludes the impact of non-underlying items, was £91.2 million in the year ended 30 September 2015, an increase from £47.1 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above

Share of associate and joint ventures’ operating profit was £16.7 million in the year ended 30 September 2015, an increase from £4.1 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Non-underlying items were £6.6 million in the year ended 30 September 2015, an increase from £0.7 million in the year ended 30 September 2014. By their nature, non-underlying items vary from year to year, and in the year ended 30 September 2015 they comprised advisory fees in relation to the Global Offer, costs in respect of a change in senior management, impairment of a receivable and costs relating to a management incentive plan. In the year ended 30 September 2014, non-underlying items comprised costs relating to the acquisition of Millgate and a management incentive plan.

Housebuilding Operating profit generated by the Housebuilding division in the year ended 30 September 2015 was £38.0 million, an increase of £16.8 million, or 79.2 per cent., from £21.2 million in the year ended 30 September 2014. This increase was primarily due the factors discussed above.

Underlying operating profit generated by the Housebuilding division in the year ended 30 September 2015 was £51.6 million, an increase of £26.2 million, or 103.1 per cent., from £25.4 million in the year ended 30 September 2014, which reflects an increase of £9.4 million in the proportional contribution of associate and joint ventures. This increase was primarily due to the factors discussed above.

Partnerships Operating profit generated by the Partnerships division in the year ended 30 September 2015 was £33.8 million, an increase of £12.0 million, or 55.0 per cent., from £21.8 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Underlying operating profit generated by the Partnerships division in the year ended 30 September 2015 was £39.6 million, an increase of £17.9 million, or 82.5 per cent., from £21.7 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Group items Operating loss generated by Group items, which was composed solely of non-underlying items, was £6.6 million in the year ended 30 September 2015, an increase of £5.9 million, or 842.9 per cent., from £0.7 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Net finance costs Net finance costs in the year ended 30 September 2015 were £50.5 million, an increase of £0.8 million, or 1.6 per cent., from £49.7 million in the year ended 30 September 2014, primarily due to higher interest expense on the Group’s mandatory redeemable preference shares as the previous years’ accrued interest was capitalised, partially offset by lower interest expense on bank loans and overdrafts during the year, due to lower borrowing levels during the year.

Share of profit from associate and joint ventures Share of profit from associate and joint ventures in the year ended 30 September 2015 was £10.6 million, an increase of £8.6 million, or 430.0 per cent., from £2.0 million in the year ended 30 September 2014. This increase was primarily due to an increase in private associate and joint venture homes sold and an uplift in ASP.

100 (Loss)/Profit before income tax Profit before income tax in the year ended 30 September 2015 was £28.0 million, an increase of £33.4 million from a loss of £5.4 million in the year ended 30 September 2014. This increase was primarily due to the factors discussed above.

Income tax expense Income tax expense in the year ended 30 September 2015 was £8.2 million, an increase of £1.7 million, or 26.2 per cent., from £6.5 million in the year ended 30 September 2014. This increase was primarily due to increased profit before income tax.

(Loss)/profit for the year Profit for the year in the year ended 30 September 2015 was £19.8 million, an increase of £31.7 million from a loss of £11.9 million in the year ended 30 September 2014, due to the factors discussed above.

Year ended 30 September 2014 compared to year ended 30 September 2013 Revenue Revenue in the year ended 30 September 2014 was £452.8 million, an increase of £175.8 million, or 63 per cent., from £277.0 million in the year ended 30 September 2013. This increase was primarily due to a 40 per cent. increase in the volume of units sold and the sale of land at Beaulieu into a joint venture. It also reflected a 28 per cent. increase in ASP to £329,000 driven by a combination of housing mix (i.e., a greater proportion of houses rather than flats), the increase of Great Kneighton ASPs and the increased percentage of Great Kneighton completions as a percentage of total completions, and underlying house price inflation.

Revenue including the proportional contribution of associate and joint ventures in the year ended 30 September 2014 was £468.7 million, an increase of £161.1 million, or 52.4 per cent., from £307.6 million in the year ended 30 September 2013, which reflects the increase in revenue described above, partially offset by a decrease of £14.7 million in the proportional contribution of associate and joint ventures. This decrease was primarily due to a reduction in private joint venture sales.

Housebuilding Revenue generated by the Housebuilding division in the year ended 30 September 2014 was £252.9 million, an increase of £108.4 million, or 74.9 per cent., from £144.6 million in the year ended 30 September 2013. This increase was primarily due to an increase in land sales (particularly from the sale of land at the Group’s Beaulieu development), an increase in private homes sold (both due to an increase in the number of sales sites and higher numbers of sales at existing sites) and an increase in ASPs, principally as a result of the opening of new development phases that had a greater mix of high-end homes.

Revenue generated by the Housebuilding division including the proportional contribution of associate and joint ventures in the year ended 30 September 2014 was £257.4 million, an increase of £103.6 million, or 67.4 per cent., from £153.8 million in the year ended 30 September 2013, which reflects the increase in revenue described above, partially offset by a decrease of £4.8 million in the proportional contribution of associate and joint ventures. This decrease was primarily due to a decrease in private associate homes sold.

Partnerships Revenue generated by the Partnerships division in the year ended 30 September 2014 was £199.8 million, an increase of £67.4 million, or 50.9 per cent., from £132.4 million in the year ended 30 September 2013. This decrease was primarily due to a decrease in the mix of private homes sold as compared to affordable homes, as well as higher ASPs obtained across homes sold.

Revenue generated by the Partnerships division including the proportional contribution of associate and joint ventures in the year ended 30 September 2014 was £211.3 million, an increase of £57.5 million, or 37.4 per cent., from £153.8 million in the year ended 30 September 2013. This increase was due to the increase in revenue described above, as well as higher revenue from land and commercial sales made in 2014

101 as compared to 2013, partially offset by a decrease of £10.0 million in the proportional contribution of associate and joint ventures due to a decrease in private joint venture homes sold.

Cost of sales Cost of sales in the year ended 30 September 2014 was £375.4 million, an increase of £141.9 million, or 60.8 per cent., from £233.5 million in the year ended 30 September 2013. This increase was primarily due to the increased volume of units, but also reflects construction cost inflation.

Gross profit Gross profit in the year ended 30 September 2014 was £77.4 million, an increase of £33.9 million, or 77.9 per cent., from £43.5 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

Gross profit including the proportional contribution of associate and joint ventures in the year ended 30 September 2014 was £82.2 million, an increase of £35.7 million, or 76.8 per cent., from £46.5 million in the year ended 30 September 2013, which reflects the increase in gross profit described above, as well as an increase of £1.8 million in the proportional contribution of associate and joint ventures. This additional increase was primarily due to the factors discussed above.

Administrative expenses Administrative expenses in the year ended 30 September 2014 were £35.1 million, an increase of £8.7 million, or 33.0 per cent., from £26.4 million in the year ended 30 September 2013. This increase was primarily due to an increase in staff costs, driven by an increase in the number of, and higher average, salaries and bonuses of, employees, designed to help ensure the Group was adequately prepared for projected growth.

Group operating profit Group operating profit in the year ended 30 September 2014 was £42.2 million, an increase of £25.2 million, or 148.2 per cent., from £17.0 million in the year ended 30 September 2013, due to the factors discussed above.

Underlying Group operating profit Underlying Group operating profit, which comprises Group operating profit, the Group’s share of associate and joint ventures’ operating profit and non-underlying items, was £47.1 million in the year ended 30 September 2014, an increase from £26.2 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

Share of associate and joint ventures’ operating profit was £4.1 million in the year ended 30 September 2014, an increase from £2.6 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

Non-underlying items were £0.7 million in the year ended 30 September 2014, a decrease from £6.5 million in the year ended 30 September 2013. By their nature, non-underlying items vary from year to year, and in the year ended 30 September 2014 non-underlying items included costs relating to the acquisition of Millgate and a management incentive plan. In the year ended 30 September 2013, non-underlying items comprised costs in relation to the Group’s acquisition of Copthorn Holdings Limited.

Housebuilding Operating profit generated by the Housebuilding division in the year ended 30 September 2014 was £21.2 million, an increase of £16.0 million from £5.2 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

102 Underlying operating profit generated by the Housebuilding division in the year ended 30 September 2014 was £25.4 million, an increase of £20.5 million, or 418.4 per cent., from £4.9 million in the year ended 30 September 2013, primarily due to the factors discussed above.

Partnerships Operating profit generated by the Partnerships division in the year ended 30 September 2014 was £21.8 million, an increase of £3.4 million, or 18.5 per cent., from £18.4 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

Underlying operating profit generated by the Partnerships division in the year ended 30 September 2014 was £21.7 million, an increase of £0.5 million, or 2.3 per cent., from £21.2 million in the year ended 30 September 2013, primarily due to the factors discussed above.

Group Items Operating loss generated by Group items, which was composed solely of non-underlying items, in the year ended 30 September 2014 was £0.7 million, a decrease of £5.8 million, or 89.2 per cent., from £6.5 million in the year ended 30 September 2013. This decrease was primarily due to the factors discussed above.

Net finance costs Net finance costs in the year ended 30 September 2014 were £49.7 million, an increase of £25.5 million, or 105.2 per cent., from £24.2 million in the year ended 30 September 2013. This increase was primarily due to a higher level of accrued interest on the Group’s mandatory redeemable preference shares, as the previous years’ accrued interest was capitalised, and additional loans being drawn down in the year for the acquisition of Millgate.

Share of profit from associate and joint ventures Share of profit from associate and joint ventures in the year ended 30 September 2014 was £2.0 million, an increase of £0.1 million, or 5.3 per cent., from £1.9 million in the year ended 30 September 2013. This increase was primarily due to land sales at Bicester, combined with slightly lower levels of provisions and losses in 2014 compared to those in 2013.

Loss before income tax Loss before income tax in the year ended 30 September 2014 was £5.4 million, an increase of £0.1 million, or 1.9 per cent., from a loss of £5.3 million in the year ended 30 September 2013. This increase was primarily due to the factors discussed above.

Income tax expense Income tax expense in the year ended 30 September 2014 was £6.5 million, an increase of £2.8 million, or 75.7 per cent., from £3.7 million in the year ended 30 September 2013. This increase was primarily due to an increase in taxable profits, partially offset by the utilisation of brought forward tax losses.

Loss for the year Loss for the year in the year ended 30 September 2014 was £11.9 million, an increase of £2.9 million, or 32.2 per cent., from a loss of £9.0 million in the year ended 30 September 2013, due to the factors discussed above.

Liquidity and capital resources Overview The Group’s principal liquidity requirements arise from the need to fund operating expenses for projects and capital expenditure. During the periods under review, the Group’s liquidity needs were mainly funded from cash generated from operating activities and a revolving loan bank facility. The Group will target an adjusted gearing (comprising net debt plus land creditors) of between 20-30 per cent. in the medium-term.

103 Cash flow The following table presents the Group’s combined and consolidated cash flow for the periods indicated.

Year ended 30 September ––––––––––––––––——————–––––––– 2013 2014 2015 –––––––– –––––––– –––––––– (£ millions) Net cash inflow from operating activities...... 200.3 26.6 16.1 Net cash (outflow)/inflow from investing activities ...... (4.1) (86.9) 10.0 Net cash (outflow)/inflow from financing activities...... (196.0) 60.3 (25.9) Net increase/(decrease) in cash and cash equivalents...... 0.2 0.0 0.2 Cash and cash equivalents at beginning of the period...... – 0.2 0.2 Cash and cash equivalents at the end of the period ...... 0.2 0.2 0.4

Net cash inflow from operating activities Net cash inflow from operating activities decreased by £10.5 million from £26.6 million in the year ended 30 September 2014 to £16.1 million over the same period in 2015. This decrease was primarily due to lower cash generated from operations (despite a profit before taxation of £28.0 million in the year ended 30 September 2015, compared to a loss of £5.4 million in the year ended 30 September 2014), primarily due to a £26.7 million increase in net working capital which was primarily the result of an increase in trade and other payables as site activity increased during the year, as well as an increase of £7.3 million in tax paid, partially offset by £4.9 million of lower interest paid, due to lower net borrowings. Net cash flows from operating activities decreased by £173.7 million from £200.3 million in the year ended 30 September 2013 to £26.6 million over the same period in 2014. This decrease was primarily due to significantly lower cash generated from operations, primarily due to a £180.4 million decrease in trade and other payables, reflecting the impact of the acquisition of the Group by the Principal Shareholder in the year ended 30 September 2013, and an increase in finance costs from £29.0 million to £51.9 million reflecting the full year effect of interest on the Group’s mandatory redeemable preference shares.

Cash flows from investing activities The Group generated a net cash inflow from investing activities of £10.0 million in the year ended 30 September 2015, compared to a net cash outflow of £86.9 million in the year ended 30 September 2014, due to the acquisition of Millgate (reflected as a £54.5 million cash outflow in “Acquisition of subsidiary (net of cash acquired)) and an increase in loans to associate and joint ventures in the year ended 30 September 2014, primarily due to an increase in joint venture construction activity. The inflow in the year ended 30 September 2015 principally reflects dividends received from joint ventures reflecting an increase in share of joint venture profits.

Net cash outflows from investing activities increased by £82.8 million from £4.1 million in the year ended 30 September 2013 to £86.9 million over the same period in 2014. This increase was primarily due to the acquisition of Millgate in the year ended 30 September 2014 (as described above) and an increase in loans to associate and joint ventures in the same period, primarily due to an increase in joint venture construction activity.

Cash flows from financing activities The Group had a net cash outflow of £25.9 million in the year ended 30 September 2015, compared to a net cash inflow of £60.3 million in the year ended 30 September 2014. These amounts reflect proceeds from the issue of mandatory redeemable preference shares and proceeds from borrowings in the year ended 30 September 2014 (which were not repeated in the year ended 30 September 2015), as well as a reduced net repayment of borrowings in the year ended 30 September 2015.

The Group had a net cash inflow of £60.3 million in the year ended 30 September 2014, compared to a net cash outflow of £196.0 million in the year ended 30 September 2013, primarily due to the issuance of mandatory redeemable preference shares in the year ended 30 September 2014 and a larger net repayment

104 of borrowings in the year ended 30 September 2013 following the acquisition of the Group by the Principal Shareholder.

Financial liabilities and contractual obligations Liabilities and indebtedness Revolving Credit Facilities On 4 June 2014, Copthorn Holdings Limited (which at the time of Admission will be a wholly owned subsidiary of the Company), as original borrower, and certain of its subsidiaries, as original guarantors, entered into a revolving credit facility agreement with Barclays Bank PLC, Lloyds Bank plc and Santander UK plc as mandated lead arrangers and original lenders and Lloyds Bank plc as facility agent and security agent, providing for a £200 million committed secured revolving credit facility (the “Original Facility Agreement”). The Original Facility Agreement as amended and as amended and restated from time to time is referred to as the “Facility Agreement”.

On 21 April 2015 and 18 November 2015, additional revolving facilities were established under the terms of the Facility Agreement, pursuant to which each of the original lenders agreed to make, in aggregate, a further £65 million available to Copthorn Holdings Limited (together with the original revolving facility, the “Facilities”).

The Facility Agreement was amended in an amendment and restatement agreement dated 6 January 2016 (the “Amendment and Restatement Agreement”), which, among other things, requires Copthorn Holdings Limited to apply £60 million in prepayment of the Facilities after Admission (subject to satisfying certain other conditions). The Amendment and Restatement Agreement will become effective on the later of (i) the date on which the facility agent under the Facility Agreement notifies Copthorn Holdings Limited and the lenders that all conditions have been satisfied; and (ii) Admission.

The Facilities expire on 3 June 2019, with the exception of one facility of £25 million which expires on 30 June 2017. Under the Facility Agreement, Copthorn Holdings Limited will have the ability to utilise the Facilities for general corporate and working capital purposes in sterling. Copthorn Holdings Limited can also agree with individual lenders that they provide some or all of their commitment by way of bilateral ancillary facilities (for letters of credit and bank guarantees).

The commitments available under the Facilities are not conditional upon Admission and, as at 29 January 2016 (the last practicable date prior to the date of this Prospectus), Copthorn Holdings Limited had an aggregate of £97 million of undrawn commitments under the Facility Agreement. Utilisation of undrawn commitments is subject to customary utilisation conditions, including that no default under the finance documents is continuing or would result from the utilisation and that certain representations that are to be repeated are true (in all material respects, in respect of those representations and warranties not already qualified by materiality).

The Facility Agreement contains warranties, representations, covenants and events of default (in each case, subject to agreed exceptions, materiality tests, carve outs and grace periods) that are customary for a credit agreement and business of this nature. These include restrictions on disposals, mergers and acquisitions and incurring additional financial indebtedness, a negative pledge, restrictions and covenants in relation to pension schemes, financial covenants and requirements for mandatory prepayment in certain circumstances.

The Facility Agreement provides for the financial covenants to be tested quarterly. To comply with the ongoing financial covenants under the Facility Agreement, Copthorn Holdings Limited must ensure that:

(i) interest cover is not less than 3.50:1 in respect of any testing period up to (and including) 31 December 2015, 4.00:1 in respect of the testing periods falling on 31 March 2016 and 30 June 2016, and 4.50:1 in respect of any testing period falling thereafter. Interest cover means the ratio of operating profit to net finance charges;

(ii) gearing is not greater than 1.00:1 in respect of testing periods up to (and including) 30 June 2016, 0.80:1 in respect of testing periods falling from (and including) 30 September 2016 to (and including)

105 30 June 2017, and 0.70:1 in respect of testing periods falling thereafter. After Admission, and subject to satisfying certain other conditions contained in the Amendment and Restatement Agreement, the gearing requirement shall be amended so that for each testing period occurring on or after the date of Admission the gearing shall be 0.50:1 (apart from the testing period occurring on 30 June 2016, which shall be 0.65:1 unless prior to 30 June 2016 Copthorn Holdings Limited notifies the facility agent that gearing is 0.50:1). Gearing means the ratio of Group net debt to net tangible assets;

(iii) net tangible assets is not less than £200 million in respect of any testing period up to (and including) 30 June 2016, £250 million in respect of the testing periods falling from (and including) 30 September 2016 to (and including) 30 June 2017, and £275 million in respect of any testing period falling thereafter; and

(iv) loan to book value is not less than 0.65:1 in respect of any testing period up to (and including) 30 June 2016, and 0.60:1 in respect of any testing period falling thereafter. Loan to book value means the ratio of Group net debt to stock.

The interest rate under the Facility Agreement is LIBOR plus a margin of between 2.50 to 3.25 per cent. per annum, depending on the level of gearing. The Facility Agreement requires Copthorn Holdings Limited to prepay the Facilities on demand on a change of control (which will include the Principal Shareholder’s holding of Ordinary Shares reducing to 30 per cent. or less following Admission, save where, following Admission, gearing is 0.50:1 or less (and is notified by Copthorn Holdings Limited to the agent) in which case such a reduction shall not be a change of control). The Facilities shall also become immediately due and payable if there is a disposal of all or substantially all of the assets of OCM Luxembourg Coppice Holdco S.à r.l. and each of its subsidiaries (or, after Admission and subject to satisfying certain other conditions contained in the Amendment and Restatement Agreement, if there is a disposal of all or substantially all of the assets of the Company. and each of its subsidiaries).

The Facilities are secured by all or substantially all of the assets of the obligors under the Facility Agreement. The Company is required to accede to the Facility Agreement as an additional guarantor on the earlier of; (i) the point at which the Company becomes the direct owner of the shares of Copthorn Holdings Limited; and (ii) 31 March 2016 (the “Accession”). Subject to certain exceptions, no obligor (other than, following the Accession, the Company) shall declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital), and the Company is restricted from declaring, making or paying any dividend whilst certain material events of default are continuing.

Following notification by Copthorn Holdings Limited that, following Admission (but prior to 1 October 2016), gearing has been reduced to 0.50:1:

(i) the restriction on dividends by obligors other than the Company will be removed; and

(ii) on request, Lloyds Bank plc as security agent shall release, discharge and re-assign the security created under the transaction security documents upon the request of Copthorn Holdings Limited (other than any security granted over the share capital (and rights associated with shares) of any material company (as defined in the Facility Agreement) and any floating charge security granted by any material company).

Mandatory redeemable preference shares OCM Luxembourg Coppice Midco S.à r.l. currently has the following mandatory redeemable preference shares in issue:

• £207,404,865 in mandatory redeemable preference shares, which were issued to the Principal Shareholder and £19,944,135 to certain employees of the Group on 16 April 2013.

• £54,546,493 in mandatory redeemable preference shares, which were issued to the Principal Shareholder and £3,230,558 to certain employees of the Group on 3 February 2014.

106 • £2,203,321 in mandatory redeemable preference shares, which were issued to certain employees of the Group on 3 November 2014.

Interest on the mandatory redeemable preference shares issued on 16 April 2013 accrues annually at 14.5 per cent. for the first twelve months from issue, then 12.0 per cent. thereafter, and is payable on a date determined by the issuer or on the mandatory redemption date set out therein. Interest on the mandatory redeemable preference shares issued on 3 February 2014 accrues annually at 15 per cent. for the first twelve months from issue, then 12.0 per cent. thereafter, and is payable on a date determined by the Issuer or on the mandatory redemption date set out therein.

As part of the Pre-IPO Reorganisation, the holders of the mandatory redeemable preference shares will transfer them (together with all rights thereunder) to the Company prior to Admission in return for Ordinary Shares, with the result that the Company will, prior to Admission, be the holder of all the mandatory redeemable preference shares described above. The balance of the mandatory redeemable preference shares and the outstanding associated returns as of 30 September 2015 was £287.3 million and £87.9 million, respectively.

Contractual obligations As of 30 September 2015, the Group’s obligations under bank loans and finance costs was £142.4 million. The table below sets forth a breakdown of these payment obligations by year.

Bank loan and finance cost obligation –––––––– Years (£’000) <1 ...... 2.4 1 to 2 ...... – 2 to 5 ...... 140 5+ ...... – –––––––– Total ...... –––––––– 142.4 The Group’s obligations to land creditors were £112.2 million as of 30 September 2015. A portion of these obligations relate to accrued overage agreements in relation to the Group’s priority profit agreements with land owners, which will only become payable if the profit is realised, while the remainder of the amount are contractual obligations to pay land creditors at specific times. The table below sets forth a breakdown of the timing of the Group’s land creditor obligations by year.

Land Creditor Overage Total –––––––– –––––––– –––––––– Years (£’000) <1...... 43,801 7,311 51,112 1 to 2...... 12,314 169 12,483 2 to 5...... 10,798 27,523 38,321 5+...... 5,203 5,051 10,254 –––––––– –––––––– –––––––– Total ...... –––––––– 72,116 –––––––– 40,054 –––––––– 112,170 As of 30 September 2015, the Group’s obligations under operating leases (primarily in relation to buildings from which the Group operates) was £13.9 million. The table below sets forth a breakdown of the Group’s operating lease payments by year.

107 Operating lease obligation –––––––– Years (£’000) <1 ...... 3.0 1 to 5 ...... 8.1 5+ ...... 2.8 –––––––– Total ...... –––––––– 13.9 In addition, the Group has certain financial commitments to fund its joint ventures that it makes in the ordinary course of its business.

As described above, the Group also has issued mandatory redeemable preference shares, which will be exchanged immediately prior to Admission for Ordinary Shares as part of the Pre-IPO Reorganisation.

Inventories Inventories, comprising land and work in progress, were £223.4 million, £278.0 million and £307.6 million as of 30 September 2013, 2014 and 2015, respectively, in the Housebuilding division, excluding investment in associate and joint ventures. The Directors expect these inventories to increase, as a reflection of the division’s growing business. The Directors expect that inventories will be approximately £450 million as of 30 September 2016, increasing by more than £100 million over the following several years.

The Group has made significant investments in its joint ventures in the periods under review, with particular investment in the Beaulieu, Five Oaks Village and Greenwich Millennium Village developments. The Directors anticipate that this investment will continue in the year ending 30 September 2016, most notably with approximately £30 million invested in Beaulieu, as this scheme gains critical mass.

Inventories of the Partnerships division were £50.6 million, £102.8 million and £131.9 million as of 30 September 2013, 2014 and 2015, respectively. The Directors expect that inventories will increase to approximately £160 million as of 30 September 2016, with a small further increase in the year ending 30 September 2017 before flattening out in subsequent years.

Acton Gardens is currently the only joint venture within the Partnerships division. Because of its capital efficient structure, investment in this joint venture has been relatively low, at approximately £6 million as of 30 September 2015. The Directors expect this investment to increase by £10 million to 12 million in the year ending 30 September 2016, given the high level of activity on site, and modestly reduce in the year ending 30 September 2017.

ROCE ROCE and capital discipline are a key focus of the Group’s management. Group ROCE was 10.4 per cent., 15.6 per cent. and 24.7 per cent. for the years ended 30 September 2013, 2014 and 2015, respectively.13 The Housebuilding division’s ROCE was 2.1 per cent., 9.7 per cent. and 16.6 per cent. for the same periods, respectively. The increases in ROCE over the periods under review were driven by land mix improvement as the Group’s legacy sites were managed out, as well as improved asset turn and economies of scale delivering operating leverage as the Group’s operations grow. The Directors are targeting a ROCE of over 20 per cent. for the Housebuilding division over the medium-term.

The Partnerships division’s ROCE was 100.5 per cent., 53.5 per cent. and 69.4 per cent. for the years ended 30 September 2013, 2014 and 2015, respectively. The nature of partnership contracts is that land is drawn down and paid for in phases and possibly in kind. In addition, affordable and PRS units are funded by the end owner, making the Partnerships model relatively capital light. ROCE increased for the year ended 30 September 2015 as the division focused on building new private and affordable houses, reducing its

13 ROCE is unaudited. ROCE for the year ended 30 September 2013 is calculated based on average of the unaudited TNOAV for the year ended 30 September 2012 (which was £230.2 million for the Housebuilding division and £21.1 million for the Partnerships division) and TNOAV for the year ended 30 September 2013.

108 proportion of design and build activity, and going forward, the Directors will continue to target a minimum ROCE of 50 per cent. on Partnership projects.

Capital Expenditure In the period under review, the Group did not incur material capital expenditure and it does not expect to incur material capital expenditure in the year ending 30 September 2016.

Off-balance sheet arrangements The Group has surety bond facilities with a number of insurance companies available for both core Group and certain joint venture projects so that it has bonds available to it as required. See Part IX: “Information on the Group—Sureties”. The surety bond facilities are capable of increase by agreement between the parties from time to time. As of 30 September 2015, the Group had an aggregate surety bond commitment of £80.9 million from its providers. Additionally the JVs in which the Group holds an interest had aggregate surety bond commitments of £35.5 million.

Other than as described above, as of 30 September 2015, the Group did not have any off-balance sheet arrangements.

Quantitative and qualitative disclosures about market risks The main financial risks associated with the Group have been identified as liquidity risk, interest rate risk, housing market risk and credit risk. The Directors are responsible for managing these risks and the policies adopted are set out below.

Liquidity risk The Group finances its operations through a mixture of equity (Company share capital, reserves and retained earnings) and debt (preferred shares, bank loan facilities). The Group manages its liquidity risk by monitoring its existing facilities for both financial covenant and funding headroom against forecast requirements based on short-term and long-term cash flow forecasts.

Interest rate risk Interest rate risk reflects the Group’s exposure to fluctuations in interest rates in the market. This risk arises from bank loans that are drawn under the Group’s loan facilities with variable interest rates based upon UK LIBOR. As of 30 September 2015, the Group had £142.4 million of borrowings outstanding that were subject to variable interest rates. For the year ended 30 September 2015 it is estimated that an increase by 0.5 per cent. in interest rates would have decreased the Group’s profit before tax by £575,000 (2014: £678,000, 2013: £373,000).

The Group’s interest rate risk is managed through interest rate swap contracts. On 16 April 2013, the Group entered into a new three year interest rate cap with a nominal value of £90.0 million.

The Group has no material exposure to foreign currency risk.

Housing market risk The Group is affected by price fluctuations in the UK housing market. These are in turn affected by the wider economic conditions such as mortgage availability and associated interest rates, employment and consumer confidence. Whilst these risks are beyond the Group’s ultimate control, risk is spread across the business activities undertaken by the Group and the geographic regions in which it operates.

Credit risk Credit risk is the risk that the Group’s counterparties will default on a debt when due. The Group’s exposure to credit risk primarily relates to its housebuilding activities and the fact that the Group receives cash only at the point of legal completion of its sales. The Group also has credit risk arising from trade receivables.

109 Loans receivable from financial assets held for sale are those advanced to homebuyers to assist in their purchase of property under the shared equity schemes. The loans are secured by either a first or second charge over the property and are held at fair value.

Trade receivables on deferred terms arise from land sales. The amount deferred is secured by a charge over the land until such time payment is received.

Trade and other receivables comprise mainly the amounts receivable from housing associations, associate and joint ventures. The Directors consider the credit of its various debtors is good in respect of the amounts outstanding and therefore credit risk is considered to be low.

Critical accounting judgements and estimates The preparation of the Group’s historical financial information under IFRS requires the Directors to make estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.

In the process of applying the Group’s accounting policies the Directors have made no individual judgements that have had significant impact upon the Group Financial Information, apart from those involving estimations, which are dealt with below.

The estimates and underlying assumptions are based on historical experience and other relevant factors and reviewed on an ongoing basis. This approach forms the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based or as a result of new information. Such changes are recognised in the year in which the estimate is revised.

The key assumptions about the future and key sources of estimation uncertainty that have a risk of causing a material adjustment to the carrying value of assets and liabilities are described below.

Impairment of goodwill The Group tests its goodwill for impairment annually. The value of any impairment of goodwill requires an estimate of the value in use of cash generating units which represent the asset. The value in use calculation is reliant upon estimated future cash flows generated by the cash generating unit which are then discounted to their net present value.

Estimation of costs to complete and contract provisions In order to determine the profit and loss that the Group is able to recognise on its developments and construction contracts in a specific period, the Group has to allocate total costs of the developments and construction contracts between the proportion completing in the period and the proportion to complete in a future period. The assessment of the total costs to be incurred requires a degree of estimation. However, Group management has established internal controls to review and ensure the appropriateness of estimates made on an individual contract basis.

Carrying value of inventory The Group carries inventory obtained as part of an acquisition at fair value. Inventory generated through the normal course of business is recorded at the lower of cost and net realisable value. A financial appraisal is prepared and updated monthly for each development which records an estimate of future revenues and expenditure. In circumstances where forecast revenues are lower than anticipated expenditure, an inventory provision is made. This inventory provision may be reversed in future periods when there is evidence of improved selling prices or reduced expenditure forecast on a development.

Provisions for onerous leases When the present value of the economic benefits from the operation of leased assets is less than the present value of the rental payments to which the Group is committed, the Group provides for any further onerous element of the contract (for all leases). Determining the amount of such a provision requires estimating the

110 future net cash flows receivable in respect of these assets, and in the particular case where the leased properties are vacant this requires assessing the likely period for which the property will remain vacant, the cost of any works required to enhance its marketability and the rental income receivable when the property is sublet.

Deferred taxation As of 30 September 2015, the Group recognised a deferred tax asset of £5.6 million largely as a result of inventory impairment charges in Copthorn Holdings Limited from preceding financial years. The deferred tax asset is held at future corporation tax rates that are substantively enacted at the balance sheet date, and is recognised on the basis that future profitability will arise in the same entity in which the losses arose. Various factors may have favourable or unfavourable effects on the recognition of this asset. These include changes in UK tax law, tax rates, interpretations of existing tax laws and overall levels of future earnings.

Available for sale financial assets Available for sale financial assets comprise loans that have been advanced to homebuyers to assist in their purchase of property under the shared equity scheme. The loans are secured by either a first or second charge over the property and are either interest-free or have interest chargeable from the fifth year onwards.

The loans are held at fair value, which is based on an estimate of the future cash flows from the loans. The estimate considers the value of the property based upon market conditions and possible borrower default. The loans are discounted at an interest rate equivalent to that which would be payable for loans made against the property by a third party. Any changes to the fair value are recognised in the income statement.

Contingent and deferred consideration payments relating to acquisitions Contingent and deferred consideration is an estimate of the fair value of the amount payable in future in respect of acquisitions. Consideration is recognised at its fair value based upon management estimates. The estimates consider the likelihood and timing of such payments. Any changes to the fair value are recognised in the income statement.

Valuation of identifiable assets and liabilities on acquisitions The consideration paid on an acquisition is allocated to identifiable assets and liabilities at their estimated fair value, with any excess recognised as goodwill. Fair values are estimates, as active markets do not always exist for assets and liabilities acquired through acquisition and therefore alternative valuation methods are used. The allocation of consideration to identifiable assets and liabilities is made on a provisional basis and is revised based upon improved knowledge in subsequent periods, but no later than one year following the date of acquisition.

Share based payments Assumptions are made in determining the fair value of employee services received in exchange for the grant of options under share-based payments awards at the date of grant, and of the likely outcome of non-market conditions.

111 PART XIII

CAPITALISATION AND INDEBTEDNESS STATEMENT

The following tables set out the indebtedness of the Group as of 30 November 2015 and the capitalisation of the Group as of 30 September 2015. The following tables do not reflect the impact of the Global Offer or the Pre-IPO Reorganisation on the Group’s capitalisation and indebtedness. Please refer to Section A of Part XV: “Unaudited Pro Forma Financial Information” of this Prospectus for an analysis of the impact of the Global Offer and the Pre-IPO Reorganisation on the consolidated net assets of the Group. As of 30 November 2015 (unaudited) ——––—— (£’000) Total current debt Guaranteed(3) ...... – Secured(4)...... 5,926 Unguaranteed/unsecured(5)...... – ——––—— Total current debt ...... 5,926 ——––—— Total non-current debt (excluding current portion of long-term debt) Guaranteed(3) ...... – Secured(4)(6) ...... 116,672 Unguaranteed/unsecured(5)...... 287,329 ——––—— Total non-current debt ...... 404,001 ——––—— As of 30 September 2015 ——––—— (£’000) Shareholders’ equity(7)(8) Share capital ...... 19 Share premium...... 1,075 Other reserves ...... 1,565 Notes: (1) This statement of capitalisation and indebtedness has been prepared under IFRS using policies which are consistent with those used in preparing the Group’s historical financial information set out in Section B of Part XIV: “Historical Financial Information”. (2) The indebtedness information as of 30 November 2015 has been extracted without material adjustment from the Group’s unaudited accounting records. (3) The Group has no guaranteed debt. (4) The Group’s secured current debt includes its overdraft balance (which is net of certain cash balances for which the Group has a right of set off against the outstanding overdraft balance). The Group’s secured non-current debt includes borrowings issued under its revolving credit facility less unamortised debt arrangement fees. This debt is secured over all or substantially all of the assets of the Group companies that are obligors under the Facility Agreement. (5) The Group’s unguaranteed/unsecured non-current debt includes mandatory redeemable preference shares. The amount included in the table above does not include the outstanding accrued returns in respect of the mandatory redeemable preference shares, which are classified as Trade and Other Payables in the Statement of Financial Position. The value of the outstanding accrued returns as of 30 November 2015 is £95,117,000. (6) The Group’s debt is shown net of unamortised debt issue costs of £3,328,000. (7) The shareholders’ equity does not include the profit and loss reserve. (8) This statement of capitalisation has been extracted without material adjustment from the Group’s historical financial information as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information” of this Prospectus. There has been no material change in the Group’s capitalisation since 30 September 2015.

112 The following table sets out the Group’s net indebtedness as of 30 November 2015.

As of 30 November 2015 (unaudited) ——––—— (£’000) Cash ...... 348 Cash equivalents ...... – Trading securities...... – ——––—— Liquidity ...... 348 ——––—— Current financial receivable ...... – Current bank debt ...... 5,926 Current portion of non-current debt ...... – Other current financial debt...... – ——––—— Current financial debt...... 5,926 ——––—— Net current financial indebtedness ...... 5,578 Non-current bank loans(4)...... 116,672 Other non-current loans(5) ...... 287,329 Non-current financial indebtedness ...... 404,001 ——––—— Net financial indebtedness ...... ——––—— 409,579 Notes: (1) This statement of net financial indebtedness has been prepared under IFRS using policies which are consistent with those used in preparing the Group’s historical financial information set out in Part XIV: “Historical Financial Information”. (2) The indebtedness information as of 30 November 2015 has been extracted without material adjustment from the Group’s unaudited accounting records. (3) The Group has entered into counter indemnities to banks, insurance companies, statutory undertakings and the National House Building Council in the normal course of business, including those in respect of joint venture partners from which it is anticipated that no material liabilities will arise. The Group has no other contingent indebtedness as of 30 November 2015. (4) The Group’s non-current bank loans is shown net of unamortised debt issue costs of £3,328,000. (5) Other non-current loans relate to mandatory redeemable preference shares. The amount included in the table above does not include the outstanding accrued returns in respect of the mandatory redeemable preference shares, which are classified as Trade and Other Payables in the Statement of Financial Position. The value of the outstanding accrued returns as of 30 November 2015 is £95,117,000. (6) The Group has derivatives not reflected in the analysis above in relation to its interest rate cap with the following fair values as of 30 November 2015: Asset/ (liability) (unaudited) ————— (£ million) £90 million interest rate cap Assets...... 1 ————— 1 ————— Capitalisation and Indebtedness of the Company The Company was incorporated on 18 November 2015 and, at that date, the Company’s capitalisation was £1 consisting of 1 Ordinary Share with a £1 nominal value. On 19 November 2015, the Company issued a further 9 Ordinary Shares of £1 each, and 50,000 redeemable preference shares, also of £1 each, resulting in issued share capital of £10 and £50,000 of issued redeemable preference shares.

113

PART XIV

HISTORICAL FINANCIAL INFORMATION

Section A – Accountants Report on the Operating Group Historical Financial Information

The Directors Countryside Properties plc Countryside House The Drive, Brentwood Essex CM13 3AT

J.P. Morgan Securities plc (the “Sponsor”) 25 Bank Street Canary Wharf London E14 5JP

1 February 2016

Dear Sirs

The Operating Group We report on the combined and consolidated financial information of the Operating Group (being Copthorn Holdings Limited and its subsidiaries prior to 16 April 2013, and OCM Luxembourg Coppice Midco S.à r.l. and its subsidiaries thereafter) for the years ended 30 September 2013, 30 September 2014 and 30 September 2015 set out in Section B of Part XIV below (the “Operating Group Historical Financial Information”). The Operating Group Historical Financial Information has been prepared for inclusion in the prospectus dated 1 February 2016 (the “Prospectus”) of Countryside Properties plc (the “Company”) on the basis of the accounting policies set out in note 2 to the Operating Group Historical Financial Information. This report is required by item 20.1 of Annex I to the PD Regulation and is given for the purpose of complying with that item and for no other purpose.

Responsibilities The directors of the Company are responsible for preparing the Operating Group Historical Financial Information in accordance with the basis of preparation set out in note 2 to the Operating Group Historical Financial Information Table.

It is our responsibility to form an opinion as to whether the Operating Group Historical Financial Information gives a true and fair view, for the purposes of the Prospectus and to report our opinion to you.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the

PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

114 extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting to its inclusion in the Prospectus.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the Operating Group’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America or auditing standards of the Public Company Accounting Oversight Board (United States) and accordingly should not be relied upon as if it had been carried out in accordance with those standards.

Opinion In our opinion, the Operating Group Historical Financial Information gives, for the purposes of the Prospectus dated 1 February 2016, a true and fair view of the state of affairs of the Operating Group as of the dates stated and of its profits/losses, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in note 2 to the Operating Group Historical Financial Information.

Declaration For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

115 Section B – Operating Group Historical Financial Information

OCM LUXEMBOURG COPPICE MIDCO S.à r.l.

Combined and Consolidated Statement of Comprehensive Income For the year ended 30 September ––––––––––––––––––––––––——–––––––– Note 2013 2014 2015 –––––––– –––––––– –––––––– –––––––– £’000 Revenue 4 276,957 452,797 547,486 Cost of sales ...... (233,504) (375,413) (431,690) –––––––– –––––––– –––––––– Gross profit ...... 43,453 77,384 115,796 Administrative expenses ...... (26,440) (35,142) (47,870) –––––––– –––––––– –––––––– Group operating profit ...... 6 17,013 42,242 67,926 Analysed as: Underlying group operating profit ...... 6 26,162 47,120 91,166 Less: Share of associate and joint ventures’ operating profit ...... 28, 29 (2,633) (4,136) (16,685) Less: Non-underlying items ...... 6 (6,516) (742) (6,555) Group operating profit ...... 17,013 42,242 67,926 Finance costs...... 7 (28,980) (51,944) (52,294) Finance income ...... 8 4,816 2,264 1,803 Share of profit from associate and joint ventures...... 28, 29 1,876 2,025 10,584 –––––––– –––––––– –––––––– (Loss)/profit before income tax ...... (5,275) (5,413) 28,019 –––––––– –––––––– –––––––– Income tax expense...... 10 (3,689) (6,536) (8,186) –––––––– –––––––– –––––––– (Loss)/profit for the year ...... –––––––– (8,964) –––––––– (11,949) –––––––– 19,833 (Loss)/profit is attributable to: Owners of the parent...... (9,108) (11,828) 19,623 Non-controlling interests ...... 144 (121) 210 –––––––– –––––––– –––––––– (8,964) (11,949) 19,833 –––––––– –––––––– –––––––– Other comprehensive income Items that may be reclassified to profit and loss Changes in the fair value of available- for-sale financial assets ...... 14c – 1,122 443 –––––––– –––––––– –––––––– Total comprehensive (loss)/income for the year...... (8,964) (10,827) 20,276 –––––––– –––––––– –––––––– Total comprehensive (loss)/income for the period attributable to: Owners of the parent...... (9,108) (10,706) 20,066 Non-controlling interest ...... 144 (121) 210 –––––––– –––––––– –––––––– (8,964) (10,827) 20,276 –––––––– –––––––– –––––––– (Loss)/earnings per share (expressed in pence per share): Basic (loss)/earnings per share ...... 11 –––––––– (2,341) –––––––– (862) –––––––– 1,085 Revenue and operating profits and losses arise from the Group’s continuing operations.

116 OCM LUXEMBOURG COPPICE MIDCO S.à r.l.

Consolidated Statement of Financial Position For the year ended 30 September ––––––––––––––––––––––––——–––––––– Note 2013 2014 2015 –––––––– –––––––– –––––––– –––––––– £’000 Assets Non-current assets Intangible assets ...... 12 32,459 60,654 59,453 Property, plant and equipment ...... 13 1,651 1,244 2,406 Investment in joint ventures ...... 29 23,315 19,692 50,097 Investment in associate ...... 28 6,197 8,841 4,164 Available for sale financial assets...... 14 10,461 10,862 10,535 Derivative financial instruments ...... 15 716 412 6 Deferred tax assets ...... 22 11,071 5,902 5,606 Trade and other receivables ...... 17 7,691 24,376 15,349 –––––––– –––––––– –––––––– –––––––– 93,561 –––––––– 131,983 –––––––– 147,616 Current assets Inventories...... 16 274,030 380,778 439,542 Trade and other receivables ...... 17 52,815 76,135 105,450 Cash and cash equivalents ...... 18 228 172 354 –––––––– –––––––– –––––––– 327,073 457,085 545,346 –––––––– –––––––– –––––––– Total assets ...... –––––––– 420,634 –––––––– 589,068 –––––––– 692,962 Liabilities Current liabilities Trade and other payables ...... 19 (99,628) (139,531) (181,140) Current income tax liabilities ...... (6) (4,196) (4,043) Provisions ...... 21 (765) (1,450) (1,144) –––––––– –––––––– –––––––– –––––––– (100,399) –––––––– (145,177) –––––––– (186,327) Non-current liabilities Borrowings ...... 20 (267,507) (366,408) (343,361) Trade and other payables ...... 19 (45,624) (81,696) (148,930) Provisions ...... 21 (5,636) (4,345) (1,110) –––––––– –––––––– –––––––– (318,767) (452,449) (493,401) –––––––– –––––––– –––––––– Total liabilities ...... (419,166) (597,626) (679,728) –––––––– –––––––– –––––––– Net assets/(liabilities) ...... –––––––– 1,468 –––––––– (8,558) –––––––– 13,234 Equity Share capital ...... 23 8 18 19 Share premium ...... 23 687 870 1,075 Reserves ...... 23 629 (9,469) 11,907 –––––––– –––––––– –––––––– Equity attributable to owners of the parent.. 1,324 (8,581) 13,001 Equity attributable to non-controlling interest 144 23 233 –––––––– –––––––– –––––––– Total equity ...... –––––––– 1,468 –––––––– (8,558) –––––––– 13,234

117 OCM LUXEMBOURG COPPICE MIDCO S.à r.l.

Combined and Consolidated Statement of Changes in Equity Copthorn Holdings Available Limited for sale Equity Invested financial attribut- Non- Share Share Capital Retained assets able controlling Total Note capital premium (Note 1) earnings (Note 14) to owner interest Equity –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– £’000 At 1 October 2012...... – – 28,165 – – 28,165 – 28,165 Comprehensive income (Loss)/Profit for the period ...... – – (9,737) 629 – (9,108) 144 (8,964) Transactions with owners Pre-acquisition ownership interests ...... – – (18,428) – – (18,428) – (18,428) Proceeds from issue of shares...... 23 8 687 – – – 695 – 695 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with owners ...... 8 687 (18,428) – – (17,733) – (17,733) –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– At 30 September 2013...... 8 687 – 629 – 1,324 144 1,468 Comprehensive income Loss for the period ...... – – – (11,828) – (11,828) (121) (11,949) Other comprehensive income ...... – – – – 1,122 1,122 – 1,122 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– Total comprehensive income ...... – – – (11,828) 1,122 (10,706) (121) (10,827) Transactions with owners Share based payment ...... 5a – – – 608 – 608 – 608 Proceeds from issue of shares...... 23 10 183 – – – 193 – 193 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with owners ...... 10 183 – 608 – 801 – 801 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– At 30 September 2014...... 18 870 – (10,591) 1,122 (8,581) 23 (8,558) Comprehensive income Profit for the period ...... – – – 19,623 – 19,623 210 19,833 Other comprehensive income ...... – – – – 443 443 – 443 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– Total comprehensive income ...... – – – 19,623 443 20,066 210 20,276 Transactions with owners Share based payment ...... 5a – – – 1,310 – 1,310 – 1,310 Proceeds from issue of shares...... 23 1 205 – – – 206 – 206 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with owners ...... 1 205 – 1,310 – 1,516 – 1,516 –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– At 30 September 2015 ...... –––––––– 19 –––––––– 1,075 –––––––– – –––––––– 10,342 –––––––– 1,565 –––––––– 13,001 –––––––– 233 –––––––– 13,234

118 OCM LUXEMBOURG COPPICE MIDCO S.à r.l.

Combined and Consolidated Cashflow Statement For the year ended 30 September ––––––––––––––––––––––––——–––––––– Note 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Cash generated from operations ...... 26 216,625 37,808 29,819 Interest paid...... (18,536) (10,502) (5,648) Tax received/(paid) ...... 2,211 (730) (8,035) –––––––– –––––––– –––––––– Net cash inflow from operating activities 200,300 26,576 16,136 –––––––– –––––––– –––––––– Cash flows from investing activities Purchase of property, plant and equipment 13 (521) (490) (1,514) Purchase of derivative financial instruments (360) – – Settlement of derivative financial instruments ...... (3,071) – – Proceeds from disposal of available for sale financial assets ...... 273 1,971 2,511 Acquisition of subsidiary (net of cash acquired) ...... 12 – (54,572) – (Decrease)/Increase in loans to associate and joint ventures ...... (1,799) (37,095) 1,480 Interest received ...... 495 527 824 Increase in investments in joint ventures .... (180) – – Dividends received from joint venture investments ...... 29 1,079 2,760 6,682 –––––––– –––––––– –––––––– Net cash (outflow)/inflow from investing activities ...... (4,084) (86,899) 9,983 –––––––– –––––––– –––––––– Cash flows from financing activities Net proceeds from issue of ordinary shares 23 695 193 206 Proceeds from issue of preference shares.... – 54,706 – Proceeds from borrowings ...... 125,000 130,368 – Repayment of borrowings...... (321,683) (125,000) (26,143) –––––––– –––––––– –––––––– Net cash (outflow)/inflow from financing activities ...... (195,988) 60,267 (25,937) –––––––– –––––––– –––––––– Net increase/(decrease) in cash and cash equivalents...... 228 (56) 182 Cash and cash equivalents at beginning of the period ...... – 228 172 –––––––– –––––––– –––––––– Cash and cash equivalents at the end of the period ...... 18 –––––––– 228 –––––––– 172 –––––––– 354

119 OCM LUXEMBOURG COPPICE MIDCO S.à r.l.

Notes to the Combined and Consolidated Historical Financial Information

1 General Information OCM Luxembourg Coppice Midco S.à r.l. (the “Operating Company”) is a company incorporated and domiciled in Luxembourg on 5 February 2013 under the legal form of “Société à Responsibilité Limitée” having its corporate office at 26a Boulevard Royal, L-2449 Luxembourg, Grand-Duchy of Luxembourg. The address of the registered office is: Registre du Commerce et des Sociétés of Luxembourg City under number B175318. OCM Luxembourg Coppice Midco S.à r.l. is the holding company of OCM Luxembourg Coppice Holdco S.à r.l. and its subsidiaries whose principal activity of the Group is UK based property development.

On 16 April 2013 the Operating Company acquired a significant holding in the share capital of Copthorn Holdings Limited (the “Acquisition”). Prior to the Acquisition, Copthorn Holdings Limited was the parent company within the Group. At the date of the Acquisition, the ultimate parent of OCM Luxembourg Coppice Holdco S.à r.l. was the Operating Company.

On 3 February 2014, the Operating Company acquired a significant holding in the share capital of Millgate Developments Limited (“Millgate”) through its subsidiary Millgate (UK) Holdings Limited, which was incorporated by Magnum Luxco S.à r.l (a direct subsidiary of the Operating Company) to acquire Millgate. As a result of this acquisition on 3 February 2014, 25% of the issued share capital of Millgate (UK) Holdings Limited was held by the existing management of Millgate. On 4 June 2014, the 75% shareholding in Millgate (UK) Holdings Limited was transferred from Magnum Luxco S.à r.l to Countryside Properties (UK) Limited (an indirect subsidiary of the Operating Company). During January 2015, Countryside Properties (UK) Limited exercised an option (which was put in place at the time of the original acquisition of Millgate on 3 February 2014) to acquire the remaining 25% shareholding in Millgate (UK) Holdings Limited.

For the purposes of this historical financial information, the term “Operating Group” and “Group” means prior to 16 April 2013, Copthorn Holdings Limited and its consolidated subsidiaries and undertakings, and thereafter, OCM Luxembourg Coppice Midco S.à r.l. and its consolidated subsidiaries and undertakings. Immediately prior to and following Admission, the “Group”, unless the context otherwise requires, shall mean Countryside Properties plc (the “Company”) and its consolidated subsidiaries and undertakings.

2 Accounting Policies

(a) Basis of preparation The constituent parts of the Group during the track record period are explained in note 1. This combined and consolidated historical financial information presents the financial track record of those businesses that were part of the Group for the years ended 30 September 2013, 30 September 2014 and 30 September 2015.

The historical financial information is prepared for inclusion in the Prospectus of the Company for the purposes of admission to the premium segment of the Official List maintained by the Financial Conduct Authority and to trading on the London Stock Exchange’s main market for listed securities (the “Admission”). This financial information has been prepared in accordance with the requirements of the Prospectus Directive regulation, the Listing Rules, International Financial Reporting Standards as adopted by the European Union (“IFRS”), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

IFRS does not provide for the preparation of combined and consolidated financial information and, accordingly, in preparing the combined and consolidated financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars, as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board, have been applied. The application of these conventions results in a material departure from IFRS. In all other respects IFRS has been applied.

120 Due to a change in capital structure of the Group on 16 April 2013, the historical financial information is prepared on a combined and consolidated basis which reflects the following:

For the year ended 30 September 2013 The financial information is a combination of the consolidated financial information of Copthorn Holdings Limited and its subsidiaries for the period from 1 October 2012 to 16 April 2013 and the consolidated financial information of OCM Luxembourg Coppice Midco S.à r.l. and its subsidiaries for the period from 17 April 2013 to 30 September 2013.

For the years ended 30 September 2014 and 2015 The financial information is based on the consolidated financial information of OCM Luxembourg Coppice Midco S.à r.l. and its subsidiaries.

This combined and consolidated historical financial information is prepared on a going concern basis and under the historical cost convention, except for the fair valuation of assets and liabilities of the subsidiary companies acquired during the period, and available for sale financial assets and financial liabilities (including derivative instruments). The historical financial information is presented in thousands of pounds sterling (“£”) except when otherwise indicated.

The combined and consolidated historical financial information has not been prepared in accordance with IAS 33 given the changes in the capital structure. An illustrative earnings per share measure for the three years is included in note 11 to present the earnings attributable to the shares as of Admission.

The preparation of historical financial information in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s reasonable knowledge of the amount, event or actions, actual results may differ from those estimates.

The principal accounting policies adopted in the preparation of the historical financial information are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

(b) Going concern This historical financial information relating to the Group has been prepared on the going concern basis.

The Group maintains a mixture of medium-term debt, committed credit facilities and cash reserves, which together are designed to ensure that the Group has sufficient available funds to finance its operations. The Directors review forecasts of the Group’s liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The Directors have reviewed the cash flow forecasts of the Group and consider that the Group has adequate resources to continue in operational existence for at least 12 months from the date of this historical financial information. The Directors therefore consider it is appropriate to adopt the going concern basis of accounting in preparing the combined and consolidated financial information.

The cash flow projections are the sole responsibility of the Directors based upon their present plans, expectations and intentions. In this context, the Directors have prepared and considered cash flow projections for the Group for a period extending one year from the date of approval of this historical financial information. Based on these cash flows, and having regard to the provision of the debt facilities as described in note 20 to this historical financial information, and the receipt of net proceeds from the proposed admission of the ordinary shares of the Company to the London Stock Exchange’s main market for listed securities, the Directors are satisfied that the Group is able to meet its liabilities

121 as and when they fall due for the foreseeable future and for a minimum period of 12 months from the date of this historical financial information.

New standards, amendments and interpretations The following amendments to standards and interpretations which will be relevant to the preparation of the Group’s Financial Information, have been issued, but are not effective (or not effective in the EU) and have not been early adopted for the financial year beginning 1 October 2015:

• IFRS 9 ‘Financial instruments’, on ‘Classification and measurement’ (effective 1 October 2018). This is the first part of a new standard on classification and measurement of financial assets that will replace IAS 39. IFRS 9 has two measurement categories: amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is at fair value through profit or loss. Amortised cost accounting will also be applicable for most financial liabilities, with bifurcation of embedded derivatives. The main change is that in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch.

• IFRS 15 ‘Revenue from contracts with customers’ (effective 1 October 2018). This standard will replace both IAS 18 which covers contracts for goods and services and IAS 11 which covers construction contracts. The basis for IFRS 15 is revenue is now recognised when control of a good or service is transferred to a customer, which replaces the existing treatment of risks and rewards. Under the new standard, revenue is also allocated to separate performance obligations under a contract, which revenue is recognised only once those obligations are met.

• Amendments to IFRS 10 and IAS 28 (effective 1 October 2016). These amendments clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. Where non-monetary assets constitute a business, the investor recognises a full gain or loss on sale of those assets. If the assets do not represent a business, only the gain or loss to the extent of the other investor’s in the associate or joint venture.

• Amendments to IAS 1 (effective 1 October 2016). This amendment explores how the financial statement disclosures can be improved by disaggregating information, reducing obscurity. Where applicable the Group will amend its disclosures.

• Amendments to IFRS 10, IFRS 12 and IAS 28 (effective 1 October 2016). These amendments provide guidance on when an investor consolidates financial statements of an associate or joint venture.

Management will assess the impact on the Group of these standards prior to the effective date of implementation.

There are no IFRSs or IFRS Interpretations Committee interpretations that are not yet effective that would be expected to have a material impact on the Group for the financial year beginning 1 October 2015.

(c) Basis of consolidation

Subsidiaries Subsidiaries are entities which the Group has the power to control. The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to govern the financial and operating policies so as to obtain economic benefits from its activities. The financial information of subsidiaries is consolidated in the historical financial information using the acquisition method of accounting from the date on which control is obtained up until the date that control ceases.

122 Non-controlling interests in the results and equity of subsidiaries are shown separately in the Combined and Consolidated Statement of Comprehensive Income, Statement of Changes in Equity and Consolidated Statement of Financial Position respectively.

Where the accounting policies of a subsidiary do not conform in all respects to those of the Group, adjustments are made on consolidation to reflect the accounting policies of the Group.

Transactions eliminated on consolidation Intragroup transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated in preparing the historical financial information. Gains arising from transactions with joint arrangements and associates are eliminated to the extent of the Group’s interest in the entity.

Business combinations All acquisitions are accounted for using the acquisition method of accounting. The cost of an acquisition is the aggregate of the fair values of the assets transferred, liabilities incurred or assumed and equity instruments in issue at the date of acquisition.

Costs directly relating to an acquisition are expensed to the Combined and Consolidated Statement of Comprehensive Income. The identified assets and liabilities and contingent liabilities are measured at their fair value at the date of acquisition. The excess of cost of acquisition over the aggregate fair value of the Group’s share of the net identified assets plus identified intangible assets is recorded as goodwill.

The consideration transferred includes the fair value of the asset or liability resulting from a deferred and contingent consideration arrangement.

Associate An associate is an entity over which the Group is in a position to exercise significant influence but does not control or jointly control. Investments in associates are accounted for using the equity method. Under the equity method, the investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the investors’ share of the profit or loss of the investee after the date of the acquisition.

The Group’s share of post-acquisition profit or loss is recognised in the Combined and Consolidated Statement of Comprehensive Income, and its share of post-acquisition movements in the Combined and Consolidated Statement of Other Comprehensive Income, with a corresponding adjustment to the carrying amount of the investment.

The Group funds its associate through a combination of equity investment and shareholder loans. The Directors review the recoverability of investments and shareholder loans for impairment annually. Where an investment is held in an associate which has net liabilities, the investment is held at nil and other long term interests, such as shareholder loans are reduced by the value equal to the net liabilities, unless it has incurred legal or constructive obligations or made payments on behalf of its associate. Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial information only to the extent of unrelated investors’ interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Where the accounting policies of the Group’s associate do not conform in all respects to those of the Group, adjustments are made on consolidation to reflect the accounting policies of the Group.

123 Joint ventures The Group has applied IFRS 11 to all joint arrangements. Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.

Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.

(d) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation.

Depreciation Depreciation is charged at rates to write off the cost of the asset on a straight-line basis over the estimated useful life of the asset. The applicable annual rates are:

• Plant and machinery 20% to 25%

• Fixtures and fittings 10%

The Group does not own any land or buildings considered to be non-trade related.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

(e) Intangible assets

Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the interest in net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. If the total consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement.

The carrying value of goodwill is compared to its recoverable amount being the higher of its value in use and its fair value less costs of disposal. An impairment review is carried out annually or when circumstances arise that may indicate an impairment is likely. Any impairment is charged immediately to the Combined and Consolidated Statement of Comprehensive Income, and is not subsequently reversed.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.

124 Brand The Group carries assets on the balance sheet for brands that have been acquired. Internally generated brands are not recognised. Cost is determined at acquisition as being directly attributable cost or, where relevant, by using an appropriate valuation method. Acquired brands, are tested for impairment when a triggering event is identified. Acquired brands are amortised over a period of 20 years.

(f) Financial assets

Classification The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Financial assets are derecognised only when the contractual rights to the cash flows from the financial asset expire or the Group transfers substantially all risks and rewards of ownership.

(a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

The Group’s use of derivatives and financial instruments is governed by the Group’s policies approved by the Directors. The Group’s activities expose it primarily to interest rate risk and it uses interest rate swap contracts to hedge these exposures. The Group does not use derivative financial instruments for speculative purposes.

All derivative financial instruments are recognised in the Consolidated Statement of Financial Position at fair value, with subsequent changes in value recognised in the Combined and Consolidated Statement of Comprehensive Income.

(b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the Consolidated Statement of Financial Position.

(c) Available for sale financial assets Available for sale financial assets are non-derivative assets that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

Equity share scheme loans are classified as available for sale financial assets and are initially recorded at fair value net of transaction costs. Fair value is assessed annually with gains and losses being recognised directly in the Combined and Consolidated Statement of Other Comprehensive Income until the loan is repaid. The loans are discounted at an interest rate equivalent to market rate. On repayment the accumulated fair value, which had been recognised in the Combined and Consolidated Statement of Changes in Equity, is recognised in the Combined and Consolidated Statement of Comprehensive Income. If a loan is determined to be impaired, any impairment loss is recognised immediately in the Combined and Consolidated Statement of Comprehensive Income.

125 (g) Inventories Inventory obtained as part of an acquisition of a company is recognised at fair value. Where land is purchased on deferred settlement terms then the land and the land payable are discounted to their fair value. The land payable is then increased to the settlement value over the period of financing, with the financing element being charged as finance cost through the income statement.

Development land and work in progress is recognised in inventory until such time as revenue is recognised in accordance with the Group’s revenue recognition policy, then the associated costs capitalised in inventory are transferred to cost of sales. Where a property is being developed, cost includes cost of acquisition and development incurred in bringing the inventories to their present location and condition.

Land options purchased are initially stated at cost. Option costs are written off over the remaining life of the option and also subject to impairment review. Impairment reviews are performed on a regular basis and provisions made where considered necessary.

Land inventory is recognised when the substantial risks and rewards of ownership transfer to the Group after exchange of unconditional contracts. Where land is purchased with deferred payment terms, a corresponding liability is recognised within trade and other payables.

Construction work in progress held in inventories is measured at cost plus profit less progress to date. Pre-contract expenditure is capitalised where it is probable that a contract will be signed or otherwise is recognised as an expense within costs of sales in the Combined and Consolidated Statement of Comprehensive Income.

Net realisable value represents the estimated selling price less all estimated costs to completion and selling costs to be incurred.

Provisions for inventories are made, where appropriate, to reduce the value of inventories and work in progress to their net realisable value.

(h) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less any provision for impairment. A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flows discounted using the original effective interest rate. The carrying value of the receivable is reduced and any impairment loss is recognised in the Combined and Consolidated Statement of Comprehensive Income. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

(i) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and other short-term deposits held by the Group with maturities of three months or less. Bank overdrafts are presented in current liabilities.

(j) Trade payables Trade payables on normal terms are not interest-bearing and are stated initially at their fair value. Trade payables on extended terms, particularly in respect of land, are recorded at their fair value at the date of acquisition of the asset to which they relate and subsequently held at amortised cost. The discount to fair value is amortised over the period of the credit term and charged to finance costs using the effective interest rate method. Changes in estimates of the final payment due are capitalised into inventory and, in due course, to cost of sales in the Combined and Consolidated Statement of Comprehensive Income.

Trade payables also include liabilities in respect of land overage where the Group is committed to make contractual payments to land vendors related to the performance of the development in the

126 future. Land overage is estimated on expected future cash flows in relation to relevant developments and, where payment will take place in more than one year, is discounted.

Deposits received from customers relating to sales of new properties are held within current trade payables.

Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

(k) Borrowings Interest-bearing bank loans and overdrafts are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement or redemption, are amortised over the term of the instrument using the effective interest rate method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position.

(l) Provisions Provisions are recognised when the Group has a present legal obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated. Where the effect of the time value of money is material, the provision is based on the present value of future outflows, discounted at the pre-tax discount rate that reflects the risks specific to the liability. Provisions for onerous leases are recognised when there are foreseeable net cash outflows on a lease which has more than one year before expiring or option to exercise a break.

(m) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

Where any Group company holds shares in the company’s equity share capital (treasury shares) the consideration paid, including any directly attributable incremental costs, is deducted from equity until the shares are cancelled or re-issued.

(n) Mandatory redeemable preference shares Mandatory redeemable preference shares are interest-bearing financial instruments which are recorded at their fair value. Such instruments are carried at their amortised cost with returns recognised over the term of the instrument using the effective interest rate method.

(o) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(p) Revenue Revenue for the sale of properties is recognised once the significant risks and rewards of ownership have passed to the purchaser, and is accounted for in accordance with IAS 18.

Revenue on the sale of new homes in recognised on legal completion. Revenue is recognised on land and commercial property sales when there is an unconditional exchange of contracts, as this is the point at which substantially all risks and rewards of ownership are considered to be transferred to the buyer.

Profit is calculated on a plot by plot basis and is recognised on sales based on the forecast margin across the related development site.

127 Fees receivable for sales and marketing and project management services are recognised on an accruals basis in line with the underlying contract.

Construction contracts Revenue from construction contracts is recognised in accordance with the Group’s accounting policy on construction contracts.

Deferred income Where the Group receives an amount in advance in respect of future income streams, the value of the receipt is amortised over the period of the contract as the services are delivered and the unexpired element is disclosed in other liabilities as deferred revenue.

Dividend income Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.

(q) Construction contracts Contract revenue and costs are accounted for in accordance with IAS 11, and are recognised by reference to the stage of completion of the contract at the balance sheet date.

Contracting development sales for affordable housing are accounted for as construction contracts.

The amount of profit recognised is calculated with reference to the proportion of revenue completed to date and is based on an assessment of the forecast revenue less anticipated expenditure on the contract. Revenue and profit are not recognised in the Income Statement until the outcome of the contract can be estimated reliably. Variations in contract work are included to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. If it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense in the Combined and Consolidated Statement of Comprehensive Income immediately.

(r) Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Rentals payable and incentives receivable under operating leases are both expensed on a straight-line basis over the term of the relevant lease.

(s) Net finance costs

Finance costs Finance costs comprise interest payable on borrowings and trade payables in respect of land, direct issue costs, dividends on redeemable preference shares and fair value changes on derivative financial instruments.

Finance income Finance income comprises interest receivable on funds invested and fair value changes on derivative financial instruments. Interest income is recognised in profit or loss as it accrues using the effective interest method.

(t) Current and deferred income tax Income tax for the years presented comprises current and deferred tax.

128 Current taxation The current tax payable is based on taxable profit for the period which differs from accounting profit as reported in the Combined and Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and those items never taxable or deductible. The Group’s liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Information and the corresponding tax rates used in the computation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the substantively enacted tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the Group intends to settle the balances on a net basis.

(u) Segment reporting Segmental reporting is presented in the combined and consolidated financial information in respect of the Group’s business segments, which are the primary basis of segmental reporting. The business segmental reporting reflects the Group’s management and internal reporting structure.

Segmental results include items directly attributable to the segment, as well as those that can be allocated on a reasonable basis. As the Group has no activities outside the UK, segment reporting is not required by geographical region.

The chief operating decision-maker (“CODM”) has been identified as the Group’s Executive Committee. The CODM reviews the Group’s internal reporting in order to assess performance and allocate resources. The CODM assesses the performance of the operating segments based on underlying operating profit and tangible net operating asset values (“TNOAV”).

(v) Employee benefits

Pension obligations The Group operates a defined contribution pension scheme. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they fall due.

129 Share-based payment transactions Share based payment schemes fall within the provision of IFRS 2 “Share Based Payments” and represent equity settled share-based payments. A charge is taken to the Combined and Consolidated Statement of Comprehensive Income for the difference between the fair value of shares at grant date and the amount subscribed, spread over the period until the employees have unconditional access to the benefit of share ownership. At the end of each reporting period, the Group revises its estimates of the number of interests that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Combined and Consolidated Statement of Comprehensive Income, with a corresponding adjustment to equity.

(w) Non-underlying items Certain items are presented separately in the Combined and Consolidated Statement of Comprehensive Income as non-underlying items where, in the judgement of the Directors, they need to be disclosed separately by virtue of their nature, size or incidence in order to obtain a clear and consistent presentation of Group’s underlying business performance. As these non-underlying items can vary significantly from year to year they create volatility in reported earnings. As such, the Directors believe that the ‘underlying group operating profit’ and ‘underlying diluted and basic earnings per share’ measures presented provide a clear and consistent presentation of the underlying performance of the Group’s ongoing business for shareholders. Underlying group operating profit is not defined by IFRS and therefore may not be directly comparable with the ‘adjusted’ or ‘underlying’ profit measures of other companies.

Examples of material and non-recurring items which may give rise to disclosure as non-underlying items are:

• Fees incurred in relation to business combinations or capital markets transactions; and

• Items which are material either because of their nature, or size and which do not relate to the Group’s underlying performance.

Share based payment charges in respect of the management incentive plan established during the year ended 30 September 2013 in connection with the Acquisition (the “Plan”) are also treated as a non- underlying item. This allows the underlying performance of the Group to be measured from period to period, due to that fact the full benefits of owning these shares are crystallised only following an exit event, such as a trade sale or Initial Public Offering.

Underlying group operating profit is one of the key measures used by the Board to monitor Group’s performance.

3 Critical Accounting Judgements and Estimates The preparation of the Group’s historical financial information under IFRS requires the Directors to make estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.

(a) Critical accounting judgements In the process of applying the Group’s accounting policies, which are described above, the Directors have made no individual judgements that have had significant impact upon the Financial Information, apart from those involving estimations, which are dealt with below.

(b) Key sources of estimation uncertainty The estimates and underlying assumptions are based on historical experience and other relevant factors and reviewed on an ongoing basis. This approach forms the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Changes in accounting estimates may be necessary if there are changes in the circumstances on which

130 the estimate was based or as a result of new information. Such changes are recognised in the year in which the estimate is revised.

The key assumptions about the future and key sources of estimation uncertainty that have a risk of causing a material adjustment to the carrying value of assets and liabilities are described below.

Impairment of goodwill The Group tests its goodwill for impairment annually. The value of any impairment of goodwill requires an estimate of the value in use of cash generating units which represent the asset. The value in use calculation is reliant upon estimated future cash flows generated by the cash generating unit which are then discounted to their net present value.

Estimation of costs to complete and contract provisions In order to determine the profit and loss that the Group is able to recognise on its developments and construction contracts in a specific period, the Group has to allocate total costs of the developments and construction contracts between the proportion completing in the period and the proportion to complete in a future period. The assessment of the total costs to be incurred requires a degree of estimation. However, Group management has established internal controls to review and ensure the appropriateness of estimates made on an individual contract basis.

Carrying value of inventory The Group carries inventory obtained as part of an acquisition at fair value. Inventory generated through the normal course of business is recorded at the lower of cost and net realisable value. A financial appraisal is prepared and updated monthly for each development which records an estimate of future revenues and expenditure. In circumstances where forecast revenues are lower than anticipated expenditure, an inventory provision is made. This inventory provision may be reversed in future periods when there is evidence of improved selling prices or reduced expenditure forecast on a development.

Provisions for onerous leases When the present value of the economic benefits from the operation of leased assets is less than the present value of the rental payments to which the Group is committed, the Group provides for any further onerous element of the contract (for all leases). Determining the amount of such a provision requires estimating the future net cash flows receivable in respect of these assets, and in the particular case where the leased properties are vacant this requires assessing the likely period for which the property will remain vacant, the cost of any works required to enhance its marketability and the rental income receivable when the property is sublet.

Deferred Taxation At the balance sheet date the Group recognised a deferred tax asset of £5,606,000 (2014: £5,902,000, 2013: £11,071,000) largely as a result of inventory impairment charges in Copthorn Holdings Limited from preceding financial years. The deferred tax asset is held at future corporation tax rates that are substantively enacted at the balance sheet date, and is recognised on the basis that future profitability will arise in the same entity in which the losses arose. Various factors may have favourable or unfavourable effects on the recognition of these assets. These include changes in UK tax law, tax rates, interpretations of existing tax laws and overall levels of future earnings.

Available for sale financial assets Available for sale financial assets comprise loans that have been advanced to homebuyers to assist in their purchase of property under the shared equity scheme. The loans are secured by either a first or second charge over the property and are either interest-free or have interest chargeable from the fifth year onwards.

131 The loans are held at fair value, which is based on an estimate of the future cash flows from the loans. The estimate considers the value of the property based upon market conditions and possible borrower default. The loans are discounted at an interest rate equivalent to that which would be payable for loans made against property by a third party. Any changes to the fair value are recognised in the Combined and Consolidated Statement of Other Comprehensive Income.

Contingent and deferred consideration payments relating to acquisitions Contingent and deferred consideration is an estimate of the fair value of the amount payable in future in respect of acquisitions. Consideration is recognised at its fair value based upon management estimates. The estimates consider the likelihood and timing of such payments. Any changes to the fair value are recognised in the Combined and Consolidated Statement of Comprehensive Income.

Valuation of identifiable assets and liabilities on acquisitions The consideration paid on an acquisition is allocated to identifiable assets and liabilities at their estimated fair value, with any excess recognised as goodwill. Fair values are estimates, as active markets do not always exist for assets and liabilities acquired through acquisition and therefore alternative valuation methods are used. The allocation of consideration to identifiable assets and liabilities is made on a provisional basis and is revised based upon improved knowledge in subsequent periods, but no later than one year following the date of acquisition.

Share based payments Assumptions are made in determining the fair value of employee services received in exchange for the grant of options under share-based payments awards at the date of grant, and of the likely outcome of non-market conditions.

4 Segmental Reporting Segmental reporting is presented in respect of the Group’s business segments reflecting the Group’s management and internal reporting structure and is on the basis on which strategic operating decisions are made by the Group’s Chief Operating Decision Maker (“CODM”). The Group’s two business segments are Housebuilding and Partnerships.

The Housebuilding division develops medium and larger-scale sites, providing private and affordable housing on land owned or controlled by the Group, primarily around London and in the South East of England operating under both the Countryside and Millgate brands.

The Partnerships division specialises in medium to large scale housing regeneration schemes delivering private and affordable homes in partnership with public sector land owners and operates primarily in and around London and in the North West of England.

Segmental underlying operating profit and segmental operating profit include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Central head office costs have been allocated between the segments using a percentage of revenue basis. Items below Group operating profit have not been allocated.

Segmental net assets and tangible net operating asset value include items directly attributable to a segment as well as those that can be allocated on a reasonable basis with the exception of intangibles, mandatory redeemable preference share (including the outstanding return) and net bank loans (excluding unamortised bank loans and arrangement fees).

132 (i) Segmental income statement House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2015 Group revenue including share of associate and joint ventures’ revenue ...... 330,701 285,139 – 615,840 Share of associate and joint ventures’ revenue ...... (51,958) (16,396) – (68,354) –––––––– –––––––– –––––––– –––––––– Group Revenue ...... 278,743 268,743 – 547,486 –––––––– –––––––– –––––––– –––––––– Segment result: Total operating profit including share of operating profit from associate and joint ventures...... 51,562 39,604 – 91,166 Less: Share of operating profit from associate and joint ventures ...... (13,565) (3,120) – (16,685) Less: Non-underlying items ...... – (2,678) (3,877) (6,555) –––––––– –––––––– –––––––– –––––––– Group operating profit/(loss)...... 37,997 33,806 (3,877) 67,926 Analysed as: Underlying group operating profit ...... 51,562 39,604 – 91,166 Less: Share of joint ventures’ operating profit.. (13,565) (3,120) – (16,685) Less: Non-underlying items ...... – (2,677) (3,878) (6,555) –––––––– –––––––– –––––––– –––––––– Group operating profit/(loss)...... 37,997 33,807 (3,878) 67,926 Net finance costs ...... – – (50,491) (50,491) Share of post tax profit from associate and joint ventures ...... – – 10,584 10,584 –––––––– –––––––– –––––––– –––––––– Profit/(loss) before taxation ...... 37,997 33,806 (43,784) 28,019 –––––––– –––––––– –––––––– –––––––– Income tax expense ...... – – (8,186) (8,186) –––––––– –––––––– –––––––– –––––––– Profit/(loss) after taxation ...... –––––––– 37,997 –––––––– 33,806 –––––––– (51,970) –––––––– 19,833

133 House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2014 Group revenue including share of associate and joint ventures’ revenue...... 257,357 211,310 – 468,667 Share of associate and joint ventures’ revenue ...... (4,409) (11,461) – (15,870) –––––––– –––––––– –––––––– –––––––– Group revenue ...... 252,948 199,849 – 452,797 –––––––– –––––––– –––––––– –––––––– Segment result: Total operating profit including share of operating profit from associate and joint ventures ...... 25,386 21,734 – 47,120 Less: Share of operating profit from associate and joint ventures ...... (4,178) 42 – (4,136) Less: Non-underlying items ...... – – (742) (742) –––––––– –––––––– –––––––– –––––––– Group operating profit...... 21,208 21,776 (742) 42,242 Analysed as: Underlying group operating profit ...... 25,386 21,734 – 47,120 Less: Share of joint ventures’ operating profit.. (4,178) 42 – (4,136) Less: Non-underlying items ...... – – (742) (742) –––––––– –––––––– –––––––– –––––––– Group operating profit...... 21,208 21,776 (742) 42,242 Net finance costs ...... – – (49,680) (49,680) Share of post-tax profit from associate and joint ventures ...... – – 2,025 2,025 –––––––– –––––––– –––––––– –––––––– Profit/(loss) before taxation ...... 21,208 21,776 (48,397) (5,413) –––––––– –––––––– –––––––– –––––––– Income tax expense ...... – – (6,536) (6,536) –––––––– –––––––– –––––––– –––––––– Profit/(loss) after taxation ...... –––––––– 21,208 –––––––– 21,776 –––––––– (54,933) –––––––– (11,949)

134 House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2013 Group revenue including share of associate and joint ventures’ revenue...... 153,757 153,804 – 307,561 Share of associate and joint ventures’ revenue ...... (9,175) (21,429) – (30,604) –––––––– –––––––– –––––––– –––––––– Group revenue ...... 144,582 132,375 – 276,957 –––––––– –––––––– –––––––– –––––––– Segment result: Total operating profit including share of operating profit from associate and joint ventures ...... 4,924 21,238 – 26,162 Less: Share of operating profit from associate and joint ventures ...... 251 (2,884) – (2,633) Less: Non-underlying items ...... – – (6,516) (6,516) –––––––– –––––––– –––––––– –––––––– Group operating profit/(loss)...... 5,175 18,354 (6,516) 17,013 Analysed as: Underlying group operating profit ...... 4,924 21,238 – 26,162 Less: Share of joint ventures’ operating profit.. 251 (2,884) – (2,633) Less: Non-underlying items ...... – – (6,516) (6,516) –––––––– –––––––– –––––––– –––––––– Group operating profit/(loss)...... 5,175 18,354 (6,516) 17,013 Net finance costs ...... – – (24,164) (24,164) Share of post-tax profit from associate and joint ventures ...... – – 1,876 1,876 –––––––– –––––––– –––––––– –––––––– Profit/(loss) before taxation ...... 5,175 18,354 (28,804) (5,275) –––––––– –––––––– –––––––– –––––––– Income tax expense ...... – – (3,689) (3,689) –––––––– –––––––– –––––––– –––––––– Profit/(loss) after taxation ...... –––––––– 5,175 –––––––– 18,354 –––––––– (32,493) –––––––– (8,964) (ii) Segmental capital employed House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2015 Net assets/(liabilities)(1) ...... 334,321 54,180 (375,267) 13,234 TNOAV(2) ...... 334,321 54,180 – 388,501

House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2014 Net assets/(liabilities)(1) ...... 288,484 60,003 (357,045) (8,558) TNOAV(2) ...... 288,484 60,003 – 348,487

Notes 1 Group items includes intangible assets of £59,453,000 (2014: £60,654,000, 2013: £32,459,000), mandatory redeemable preference shares of £287,329,000 (2014: £285,126,000, 2013: £227,349,000), outstanding return in respect of the mandatory redeemable preference shares of £87,872,000 (2014: £46,911,000, 2013: £12,815,000) and net debt (excluding unamortised bank loan and arrangement fees) of £59,519,000 (2014: £85,662,000, 2013: £44,939,000). 2 TNOAV is calculated as net assets/(liabilities) excluding intangibles, mandatory redeemable preference shares (including the outstanding interest) and net debt.

135 House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2013 Net assets/(liabilities)(1) ...... 232,933 21,179 (252,644) 1,468 TNOAV(2) ...... 232,933 21,179 – 254,112

(iii) Segmental other items House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2015 Investment in associate...... 4,164 – – 4,164 Investment in joint ventures ...... 48,016 2,081 – 50,097 Capital expenditure – property, plant & equipment ...... 813 701 – 1,514 Depreciation and amortisation ...... 1,105 448 – 1,553 Acquisition of intangible assets ...... – – – – Share based payments ...... – – 1,310 1,310

House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2014 Investment in associate...... 8,841 – – 8,841 Investment in joint ventures ...... 12,063 7,629 – 19,692 Capital expenditure – property, plant & equipment ...... 269 221 – 490 Depreciation and amortisation ...... 1,302 911 – 2,213 Acquisition of intangible assets ...... – – 29,227 29,227 Share based payments ...... – – 608 608

House- Partner- Group building ships Items Total –––––––– –––––––– –––––––– –––––––– £’000 Year ended 30 September 2013 Investment in associate...... 6,197 – – 6,197 Investment in joint ventures ...... 21,476 1,839 – 23,315 Capital expenditure – property, plant & equipment ...... 260 261 – 521 Depreciation and amortisation ...... 399 399 – 798 Acquisition of intangible assets ...... – – 32,797 32,797 Share based payments ...... – – – –

136 5 Employees and Directors

(a) Staff costs for the Group during the year: The aggregate remuneration for the employees and directors of the Group comprised:

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Wages and salaries ...... 20,815 26,761 38,407 Social security costs ...... 3,183 4,343 5,375 Performance related incentives ...... 3,305 6,835 12,030 Pension costs (Note 5e)...... 2,107 2,443 3,195 Share based payments ...... – 608 1,310 Compensation for loss of office ...... – – 750 –––––––– –––––––– –––––––– –––––––– 29,410 –––––––– 40,990 –––––––– 61,067 The average monthly number of employees (including Directors) for the period for each of the Group’s principal activities was as follows:

2013 2014 2015 Number Number Number –––––––– –––––––– –––––––– Housebuilding and development...... 499 611 780 Head office ...... 24 26 31 –––––––– –––––––– –––––––– –––––––– 523 –––––––– 637 –––––––– 811 Share based payments In the year ended 30 September 2013, a management incentive plan (“Plan”) was approved by the Board in which certain senior employees of Countryside Properties (UK) Limited, a subsidiary company, were invited to acquire shares issued by the Operating Company. Further shares were issued under the Plan during the years ended 30 September 2014 and 2015.

The Plan falls within the provisions of IFRS 2 “Share Based Payments” as it represents an equity- settled share-based payment to the relevant employees. Under the standard, the difference between the fair value of the shares at the grant date and the amount subscribed is charged to the Income Statement, spread over the period until the employees have unconditional access to the full benefit of share ownership. Unconditional access is obtained following an exit event, such as a trade sale or Initial Public Offering. Employees have no entitlement to sell the shares prior to this point and should they leave the employment of the Group, the shares are returned.

137 When the shares granted under the Plan give rise to a charge, this is recognised in the Combined and Consolidated Statement of Comprehensive Income. For the year ended 30 September 2015 the charge amounted to £1,310,000 (2014: £608,000, 2013: £Nil).Under the Plan the following shares were issued:

Share class No. of shares ––––––—–– ––––––—–– Year ended 30 September 2013 April 2013 ...... B 24,948 August 2013 ...... B 4,291 Year ended 30 September 2014 December 2013 ...... B 16,238 February 2014 ...... BB 2,000 April 2014 ...... BB 1,000 May 2014 ...... B 1,809 July 2014 ...... B 500 July 2014 ...... BB 4,500 Year ended 30 September 2015 October 2014 ...... B 3,800 May 2015 ...... B 1,050 May 2015 ...... BB 700

(b) Directors’ emoluments For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Aggregate emoluments ...... 2,244 3,451 4,658 Accrued retirement benefits ...... 113 – – –––––––– –––––––– –––––––– –––––––– 2,357 –––––––– 3,451 –––––––– 4,658 Compensation in relation to the loss of office of £750,000 paid in year ended 30 September 2015 is considered to be a non-underlying item (Note 6).

(c) Emoluments of the highest paid Director For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Aggregate emoluments ...... 542 930 1,155 Accrued retirement benefits ...... 33 – – –––––––– –––––––– –––––––– –––––––– 575 –––––––– 930 –––––––– 1,155

138 (d) Key management compensation The following table details the aggregate compensation paid in respect of the members of the Board of Directors including the Executive Directors.

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Wages and salaries ...... 2,244 3,451 4,658 Accrued retirement benefits ...... 113 – – Termination benefits ...... – – 750 Share based payments ...... – 461 1,123 –––––––– –––––––– –––––––– –––––––– 2,357 –––––––– 3,912 –––––––– 6,531 There are no defined benefit schemes for key management. Pension costs under defined contribution schemes are included in the accrued retirement benefits disclosed above. The disclosures of shares granted under the long term incentive schemes are included in Note 5(a).

(e) Retirement benefits Group Personal Pension Plans operate for both staff and executives of Copthorn Holdings Limited. These are defined contribution schemes invested with Scottish Equitable PLC. Annual contributions to these plans charged against income during the year amounted to £3,195,000 (2014: £2,443,000; 2013: £2,107,000) of which £267,000 (2014: £176,000; 2013: £144,000) was outstanding at 30 September 2015.

6 Group Operating Profit

(a) Group operating profit has been arrived at after charging For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Staff costs (Note 5a) ...... 29,410 40,990 61,067 Acquisition costs ...... 6,516 134 – Depreciation of property, plant and equipment ...... 460 1,181 352 Amortisation of intangible assets ...... 338 1,032 1,201 Provisions for: Onerous leases...... 6,401 – – Inventories ...... 685 8,165 300 Inventories expensed to cost of sales ...... 237,073 366,554 423,881 Operating leases ...... 2,688 3,361 3,435 Auditors’ remuneration (Note 9) ...... 735 586 1,448

139 (b) Non-underlying items For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Non-recurring items: Acquisition costs ...... 6,516 134 – Advisory costs...... – – 1,698 Change of Board Director...... – – 870 Impairment of non-trade receivable ...... – – 2,677 –––––––– –––––––– –––––––– Total non-recurring items...... 6,516 134 5,245 Share based payments in respect of the Plan ...... – 608 1,310 –––––––– –––––––– –––––––– Total non-underlying items ...... –––––––– 6,516 –––––––– 742 –––––––– 6,555 Acquisition costs During the year ended 30 September 2013, £6,516,000 of costs were expensed in relation to the acquisition of Copthorn Holdings Limited. During the year ended 30 September 2014, £134,000 of costs were expensed relating to the acquisition of Millgate Developments Limited.

Advisory fees During the year ended 30 September 2015, the Operating Company engaged in corporate activity in relation to the Admission. Advisory costs of £1,698,000 were incurred in relation to this activity. These costs primarily relate to reporting accounting fees, legal fees and consultancy fees.

Change of Board Director of Copthorn Holdings Limited During the year ended 30 September 2015, £870,000 of costs were incurred in relation to the resignation and appointment of Chief Financial Officers. This amount includes compensation for loss of office of £750,000 and £120,000 of recruitment costs.

Impairment of non-trade receivable The non-recurring charge of £2,677,000 relates to the impairment of a receivable during the year which management believes may no longer be recoverable.

A total tax credit of £1,419,000 (2014: £178,000; 2013: £nil) in relation to all of the above non- recurring items was included within taxation in the Combined and Consolidated Statement of Comprehensive Income.

Share based payments In the year ended 30 September 2013, the Plan was approved by the Board in which certain senior employees of Countryside Properties (UK) Limited, a subsidiary company, were invited to acquire shares issued by the Operating Company. The Directors believe that this Plan should also be treated as a non-underlying item, as this allows the underlying performance of the Group to be measured from period to period due to the fact unconditional access is obtained following an exit event, such as a trade sale or Initial Public Offering. Refer to Note 5 for further details.

£1,310,000 was charged to the income statement in the year ended 30 September 2015 (2014: £608,000; 2013: £nil) in respect of charges related to the Plan. An income tax credit of £383,000 (2014: £178,000; 2013: £nil) in relation to the charges was included within the taxation in the income statement.

140 (c) Non-GAAP performance measures The Directors believe that the ‘underlying group operating profit’ and ‘underlying group operating profit earnings per share’ measures presented provide a clear and consistent presentation of the underlying performance of the Group’s ongoing business for shareholders. Underlying group operating profit and underlying group operating profit earnings per share are not measures that are defined by IFRS and therefore may not be directly comparable with the ‘adjusted’ or ‘underlying’ profit measures of other companies.

The following table reconciles Group operating profit to underlying group operating profit and underlying group including share of operating profit from joint ventures:

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Group operating profit...... 17,013 42,242 67,926 Add: Non-underlying items ...... 6,516 742 6,555 Add: Share of operating profit of associate and joint ventures...... 2,633 4,136 16,685 –––––––– –––––––– –––––––– Underlying group operating profit ...... –––––––– 26,162 –––––––– 47,120 –––––––– 91,166 7 Finance Costs For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Finance cost Bank loans and overdrafts...... 13,110 8,907 6,195 Interest on mandatory redeemable preference shares.. 12,815 34,095 40,961 Other loans ...... 66 125 117 Fair value losses on financial instruments ...... – 304 406 Unwind of imputed interest ...... 2,554 3,059 3,502 Amortisation of debt finance costs ...... 435 5,454 1,113 –––––––– –––––––– –––––––– –––––––– 28,980 –––––––– 51,944 –––––––– 52,294 The mandatory redeemable preference shares (note 20) accrue interest annually.

The amortisation of debt finance costs included a one off amount of £4,085,000 which relates to the cancellation of an interest hedge during the year ended 30 September 2014.

141 8 Finance Income For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Finance Income Bank interest receivable ...... 376 524 824 Fair value gains on financial instruments ...... 3,412 – – Unwind of imputed interest ...... 1,028 1,740 979 –––––––– –––––––– –––––––– –––––––– 4,816 –––––––– 2,264 –––––––– 1,803 9 Auditors’ Remuneration During the year the Group (including its overseas subsidiaries) obtained the following services from the Operating Group’s auditors at costs as detailed below:

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Fees payable to Group’s auditors’ and its associates for other services: – The audit of Operating Company’s subsidiaries...... 351 410 381 – Non-audit services ...... 139 – 140 – Tax advisory services ...... 245 176 229 – Services relating to corporate finance transactions entered into or proposed to be entered into on behalf of the Operating Company ...... – – 698 –––––––– –––––––– –––––––– –––––––– 735 –––––––– 586 –––––––– 1,448

142 10 Taxation For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Analysis of credit in year Current tax Luxembourg corporation tax – Current period ...... 3 3 3 UK corporation tax Current period ...... 243 2,337 8,087 Adjustments in respect of prior periods...... (2,302) (79) (200) –––––––– –––––––– –––––––– Total current tax ...... (2,056) 2,261 7,890 Deferred tax (Note 22) Origination and reversal of temporary differences ...... 2,059 (2,091) 318 Reversal of deferred tax...... 885 5,023 235 Changes in tax rates ...... 2,801 448 (122) Adjustment in respect of prior years ...... – 895 (135) –––––––– –––––––– –––––––– Total deferred tax ...... 5,745 4,275 296 –––––––– –––––––– –––––––– Income tax expense ...... –––––––– 3,689 –––––––– 6,536 –––––––– 8,186 The tax assessed for the United Kingdom share of the results is higher than the standard rate of Corporation Tax in the United Kingdom which is 20% (2014: 21%, 2013: 23%).

The table below shows the reconciliation of profit before tax to the income tax expense using the parent entity tax rate. This is then adjusted for overseas subsidiaries taxed at different rates and changes in those overseas tax rates to reconcile back to the total income tax expense.

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 (Loss)/Profit before Income Tax ...... (5,275) (5,413) 28,019 Tax calculated at the parent entity rate of tax: 29.22% (2014: 29.22%, 2013: 29.22%) ...... (1,541) (1,582) 8,187 Associate and joint venture results reported net of tax ...... (32) (592) (3,093) Expenses not deductible for tax...... 1,124 3,298 2,482 Accelerated capital allowances ...... (146) (146) (198) Transfer pricing adjustments ...... 2,269 4,556 3,728 Adjustments in respect of prior years ...... (2,864) 816 (477) Joint ventures taxed at different rates ...... (798) (47) – Overseas subsidiaries taxed at different rates ...... 438 (1,258) (2,419) Changes in overseas subsidiaries tax rates ...... 3,514 594 (174) Temporary timing differences ...... – 897 150 Trading gains not recoverable ...... 1,725 – – –––––––– –––––––– –––––––– –––––––– 3,689 –––––––– 6,536 –––––––– 8,186 The tax assessed is at the Luxembourg Corporation Tax rate of 29.22% (2014: 29.22%, 2013: 29.22%), however the majority of the profits and losses are generated by the United Kingdom Group of companies.

143 11 (Loss)/Earnings Profit Per Share

(a) Basic earnings per share The earnings per share presented for the year ended 30 September 2013 is based on the weighted average number of ordinary shares of OCM Luxembourg Coppice Midco S.à r.l from the date of Acquisition (see note 1) through to 30 September 2013 and does not include the pre-acquisition position.

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– (Loss)/Profit for the year (£’000) ...... (9,108) (11,828) 19,623 –––––––– –––––––– –––––––– Basic weighted average number of shares ...... 389,147 1,371,805 1,808,829 Basic (loss)/profit per share (in pence per share) ...... (2,341) (862) 1,085

There are no shares or options with a dilutive effect and hence the basic and diluted earnings per share are the same.

(b) Underlying group operating profit earnings per share Underlying group operating profit represents a key measure for the Group. Profit per this measure is illustrated as follows based upon the weighted average shares as detailed in Note 11(a).

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 –––––––– –––––––– –––––––– £’000 Underlying group operating profit for the year ...... 26,162 47,120 91,166 –––––––– –––––––– –––––––– Basic weighted average number of shares ...... 389,147 1,371,805 1,808,829 Basic profit per share (in pence per share) ...... 6,723 3,435 5,040

144 12 Intangible Assets

(a) Movement in intangible assets Brand Goodwill Total –––––––– –––––––– –––––––– £’000 Cost At 1 October 2012...... – – – Acquisition of subsidiary (Note 12(b))...... 13,500 19,297 32,797 –––––––– –––––––– –––––––– At 1 October 2013...... 13,500 19,297 32,797 Acquisition of subsidiary (Note 12(b))...... 10,700 18,527 29,227 –––––––– –––––––– –––––––– At 30 September 2014 ...... 24,200 37,824 62,024 –––––––– –––––––– –––––––– At 30 September 2015 ...... 24,200 37,824 62,024 –––––––– –––––––– –––––––– Accumulated amortisation At 1 October 2012...... – – – Amortisation ...... 338 – 338 –––––––– –––––––– –––––––– At 1 October 2013...... 338 – 338 Amortisation ...... 1,032 – 1,032 –––––––– –––––––– –––––––– At 30 September 2014 ...... 1,370 – 1,370 Amortisation ...... 1,201 – 1,201 –––––––– –––––––– –––––––– At 30 September 2015 ...... 2,571 – 2,571 –––––––– –––––––– –––––––– Net book value At 30 September 2015 ...... 21,629 37,824 59,453 –––––––– –––––––– –––––––– At 30 September 2014 ...... 22,830 37,824 60,654 –––––––– –––––––– –––––––– At 30 September 2013 ...... –––––––– 13,162 –––––––– 19,297 –––––––– 32,459 Goodwill The goodwill relates to the acquisition of the Copthorn Holdings Group (£19,297,000) in April 2013 and Millgate Developments (£18,527,000) in February 2014. Both entities are considered to be cash generating units (“CGU”). The goodwill balance is tested annually for impairment. The recoverable amount has been determined as the value in use of the business assessed on the current five year cash flow forecasts excluding any allowance for inflation. Cash flow beyond the five year period is extrapolated using a growth rate of 2%. Cash flows generated by both CGU’s are discounted using a pre-tax discount rate of 12.5%, are updated at regular intervals throughout the year and are approved by the Board of Directors. The cash flow forecasts are also sensitised for a slowdown in sales and reduction in selling prices. Significant headroom exists on all sensitised forecasts given the relative size of goodwill compared to annual operating profits and cash flows.

Brand The brand relates to both the Countryside Brand (£13,500,000), acquired as part of the Copthorn Holdings Group and the Millgate Brand (£10,700,000). Both brands have been valued using the income method and are considered to have a finite life. Brands are amortised on a straight line basis over their useful economic life of 20 years.

Amortisation expense of £1,201,000 (2014: £1,032,000, 2013: £338,000) has been charged to administrative expenses.

145 (b) Acquisitions The acquisitions relate to the following acquisitions by the Group:

(i) Acquisition of Copthorn Holdings Limited On 16 April 2013, the Group acquired 89.45% of the issued share capital of Copthorn Holdings Limited. The remaining 10.55% shareholding was held by a Director of Copthorn Holdings Limited, which was subsequently acquired by the Group following the exercise of an option which occurred on 25 April 2014 for £3,500,000. This option that was issued on 25 March 2013 ensured the transfer of the remaining shares to the Group. Therefore, the Directors of the Group assessed that the risk and reward relating to this minority shareholding had already transferred to the Group and there was no non-controlling interest.

Copthorn Holdings Limited is the parent company of a group of house building and property development companies based in the United Kingdom. This transaction is accounted for using the acquisition method of accounting.

Book Fair value value adjustment Total –––––––– –––––––– –––––––– £’000 Intangible assets ...... 13,374 126 13,500 Property, plant and equipment ...... 1,498 – 1,498 Investments in joint ventures ...... 22,343 (277) 22,066 Investments in associates ...... 4,361 1,772 6,133 Deferred tax asset...... 18,280 (1,968) 16,312 Available for sale financial assets ...... 10,042 – 10,042 Inventories ...... 299,371 (5,155) 294,216 Trade and other receivables ...... 81,422 – 81,422 Cash and cash equivalents ...... 412 – 412 Trade and other payables ...... (125,920) – (125,920) Provisions ...... (6,401) – (6,401) Bank and other loans ...... (299,827) – (299,827) –––––––– –––––––– –––––––– 18,955 (5,502) 13,453 Goodwill...... 19,297 –––––––– 32,750 –––––––– Satisfied by: Ordinary shares...... 1 Preferred equity certificates ...... 19,999 Cash ...... 12,750 –––––––– –––––––– 32,750 Acquisition related costs of £6,516,000 have been charged to administrative expenses in the Consolidated Income Statement for the period ended 30 September 2013.

The consideration paid to acquire Copthorn Holdings Limited amounted to £32,750,000, which at the time was considered to be the fair value. The funding of the acquisition was provided by OCM Luxembourg Coppice Midco S.à r.l., the immediate parent company. The consideration comprised the following elements:

(1) Issue of £0.01 ordinary shares with a nominal value of £1,173 exchanged for shares in Copthorn Holdings Limited.

(2) Preferred equity certificates with a value of £19,998,827 exchanged for shares in Copthorn Holdings Limited.

146 (3) Cash amounting to £3,952,667 paid to Directors and employees in relation to their specific shareholdings in Copthorn Holdings Limited.

(4) Cash amounting to £3,500,000 representing the amount due to a Director of Copthorn Holdings Limited, was paid following the exercise of an option.

(5) Cash paid amounting to £6,000,000, of which £5,298,000 represents an estimate of the potential amount payable to Uberior Equity Limited in relation to existing contractual arrangements. The remaining £702,000 is expected to be recovered and is recognised as a receivable.

Contingent consideration of £3,612,500 which is equivalent to 85% of the value of guarantees held by Copthorn Holdings Limited, is payable if the guarantees are not called upon by 16 April 2016. The fair value of the guarantees at the date of acquisition was £nil.

Upon acquisition the assets and liabilities of Copthorn Holdings Limited were fair valued, resulting in the following adjustments:

(1) The net £126,000 adjustment to intangible assets relates to the reduction in goodwill held by Copthorn Holdings Limited, as it is no longer a separable identifiable asset and the recognition of £13,500,000 of intangible assets related to the Countryside brand acquired with Copthorn Holdings Limited.

(2) The adjustment to investments in Joint Ventures of £277,000 reflects a decrease in book value where future margins are lower than a benchmark margin generally expected in the house building sector.

(3) The adjustment to investments in associate of £1,772,000 reflects an increase in book value where future margins are higher than a benchmark margin generally expected in the house building sector.

(4) Deferred tax was adjusted by £1,968,000 for timing differences arising from the adjustment to intangible assets, inventories and investments in joint ventures and associate.

(5) The net £5,155,000 adjustment to inventories reflects the reduction in the book value where the expected future margin was lower than or where an increase in book value where margins were different to a benchmark margin generally expected in the house building sector.

The fair value of the acquired receivables equals the gross contractual amount, of which all the related cashflows are expected to be collected.

The goodwill arising on the acquisition of Copthorn Holdings Limited was attributable to the anticipated profitability arising from development activities from its land bank. The goodwill is not deductible for tax purposes.

During the period from the date of acquisition until 30 September 2013, Copthorn Holdings Limited contributed £207,053,000 revenue and £15,430,000 profit before tax to the Group’s results.

(ii) Acquisition of Millgate Developments Limited Millgate (UK) Holdings Limited was incorporated by Magnum Luxco S.à r.l., a subsidiary of the Group.

Millgate (UK) Holdings Limited was set-up to acquire Millgate Developments Limited on 3 February 2014. As a result of the acquisition, 25% of the issued share capital of Millgate (UK) Holdings Limited was held by the existing management of Millgate (UK) Holdings Limited. An option, issued on 3 February 2014, was exercisable by another subsidiary

147 company, Countryside Properties (UK) Limited to acquire these shares, and it was exercised in January 2015 for £43,244.40. On this basis the Directors assessed the risk and reward to this minority shareholding had already transferred to the Operating Company and there was no non- controlling interest.

The Group has accounted for this acquisition under IFRS3: Business Combinations.

Book Fair value value adjustment Total –––––––– –––––––– –––––––– £’000 Intangible assets ...... – 10,700 10,700 Property, plant and equipment ...... 284 – 284 Inventories ...... 63,526 (6,436) 57,090 Trade and other receivables ...... 1,296 – 1,296 Deferred tax liability ...... (89) (805) (894) Trade and other payables ...... (8,719) – (8,719) Bank loans and other loans ...... (18,431) – (18,431) –––––––– –––––––– –––––––– 37,867 3,459 41,326 Goodwill recognised on acquisition...... 18,527 –––––––– 59,853 –––––––– Satisfied by: Shares ...... 52 Cash ...... 11,851 Shareholder Loan notes outstanding ...... 5,229 Shareholder Loan notes settled ...... 42,721 –––––––– –––––––– 59,853 The aggregate consideration paid to acquire Millgate (UK) Holdings Limited amounted to £59,853,000, which was considered to be fair value.

The consideration comprised the following elements:

(1) Issue of £0.01 ordinary shares with a nominal value of £299, at a premium of £51,421 exchanged for shares in Millgate (UK) Holdings Limited.

(2) Cash of £11,851,441 was paid to the vendors.

(3) “A” Loan notes amounting to £3,025,750.

(4) “B” Loan notes amounting to £42,721,184.

(5) “C” Loan notes amounting to £2,203,322.

Acquisition costs of £134,000 have been charged to administrative expenses in the Consolidated Income Statement for the year ended 30 September 2014.

The fair value of the acquired receivables equals the gross contractual amount.

The goodwill arising on the acquisition of Millgate Developments Limited was attributable to the anticipated profitability arising from development activities from its land bank. The goodwill is not deductible for tax purposes.

During the period from the date of acquisition, 3 February 2014, until 30 September 2014, Millgate Developments Limited (“Millgate”) contributed £33,078,389 of revenue, £9,770,770 gross profit, £5,197,753 of operating and underlying operating profit and £3,463,101 profit before tax to the Group’s results. All of the Millgate operations reside within the Operating

148 Group’s Housebuilding segment (Note 4), and currently it has no joint ventures or associate arrangements.

If Millgate had been acquired on 1 October 2013, it would have contributed the following to the Group’s result for the year ended 30 September 2014: £68,243,432 revenue, £24,875,846 gross profit, £16,498,765 operating profit, £18,497,765 underlying operating profit and £14,190,344 profit before tax.

The pre-acquisition contributions to revenue and profit do not take into account the impact of any fair value adjustments that occurred as a result of the acquisition, and which are included in the post-acquisition revenue and profit contributions

13 Property, Plant and Equipment Plant & Fixtures & machinery Fittings Total –––––––– –––––––– –––––––– £’000 Cost At 1 October 2012 ...... 4,633 2,156 6,789 Additions ...... 397 124 521 –––––––– –––––––– –––––––– At 30 September 2013 ...... 5,030 2,280 7,310 Acquisitions of a subsidiary...... 128 156 284 Additions ...... 439 51 490 –––––––– –––––––– –––––––– At 30 September 2014 ...... 5,597 2,487 8,084 Additions ...... 781 733 1,514 Disposals ...... (1,381) – (1,381) –––––––– –––––––– –––––––– At 30 September 2015 ...... 4,997 3,220 8,217 –––––––– –––––––– –––––––– Accumulated depreciation At 1 October 2012 ...... 3,252 1,947 5,199 Depreciation charge for the year ...... 386 74 460 –––––––– –––––––– –––––––– At 30 September 2013 ...... 3,638 2,021 5,659 Depreciation charge for the year ...... 1,083 98 1,181 –––––––– –––––––– –––––––– At 30 September 2014 ...... 4,721 2,119 6,840 Depreciation charge for the year ...... 208 144 352 –––––––– –––––––– –––––––– Disposals ...... (1,381) – (1,381) –––––––– –––––––– –––––––– At 30 September 2015 ...... 3,548 2,263 5,811 –––––––– –––––––– –––––––– Net book value At 30 September 2015 ...... 1,449 957 2,406 –––––––– –––––––– –––––––– At 30 September 2014 ...... 876 368 1,244 –––––––– –––––––– –––––––– At 30 September 2013 ...... –––––––– 1,392 –––––––– 259 –––––––– 1,651 Depreciation expense of £352,000 (2014: £1,181,000, 2013: £460,000) has been charged to administrative expenses.

149 14 Investments

(a) Subsidiary undertakings of the Group The Operating Company substantially owns directly or indirectly the whole of the issued and fully paid ordinary share capital of its subsidiary undertakings.

Subsidiary undertakings of the Group at 30 September 2013, 2014 and 2015 are presented below:

Voting Country of Rights Principal incorporation % activity –––––––––—– ——– ———————— Direct investment OCM Luxembourg Coppice Holdco S.à r.l...... Luxembourg 100.00 Holding company OCM Magnum Holding S.à r.l. (from 3 February 2014)...... Luxembourg 100.00 Holding company Indirect investment Beaulieu Park Limited...... UK 100.00 Dormant Brenthall Park (One) Limited ...... UK 100.00 Dormant Copthorn Holdings Limited ...... UK 100.00 Holding company Countryside (UK) Limited ...... UK 100.00 Dormant Countryside Build Limited...... UK 100.00 Dormant Countryside Commercial & Industrial Properties Limited ...... UK 100.00 Dormant Countryside Developments Limited...... UK 100.00 Dormant Countryside Investments Limited ...... UK 100.00 Dormant Countryside Properties (Commercial) Limited...... UK 100.00 Dormant Countryside Properties (In Partnership) Limited...... UK 100.00 House building Countryside Properties (London & Thames Gateway) Limited...... UK 100.00 Dormant Countryside Properties (Northern) Limited ...... UK 100.00 House building Countryside Properties (Southern) Limited ...... UK 100.00 House building Countryside Properties (Special Projects) Limited...... UK 100.00 Dormant Countryside Residential (South Thames) Limited...... UK 100.00 Dormant Countryside Residential (South West) Limited ...... UK 100.00 Dormant Countryside Residential Limited ...... UK 100.00 Dormant Countryside Seven Limited...... UK 100.00 House building Lakenmoor Ltd...... UK 100.00 Dormant Wychwood Park Golf Club Limited ...... UK 100.00 House building Countryside 26 Limited ...... UK 100.00 House building Countryside 28 Limited ...... UK 100.00 House building Countryside Cambridge One Limited...... UK 100.00 House building Countryside Cambridge Two Limited...... UK 100.00 House building Countryside Eight Limited...... UK 100.00 House building Countryside Four Limited...... UK 100.00 House building Countryside Properties (Joint Ventures) Limited...... UK 100.00 House building Countryside Properties (Uberior) Limited ...... UK 100.00 House building Countryside Properties (UK) Limited...... UK 100.00 House building Countryside Properties Land (One) Limited ...... UK 100.00 House building Countryside Properties Land (Two) Limited ...... UK 100.00 House building Countryside Properties Holdings Limited ...... UK 100.00 House building Countryside Thirteen Limited...... UK 100.00 House building Copthorn 2009 Limited (in liquidation)...... UK 100.00 Dormant Copthorn Finance Limited (in liquidation)...... UK 100.00 Dormant Copthorn Limited (in liquidation)...... UK 99.99 Dormant Cliveden Village Management Company Limited...... UK 100.00 Dormant

150 Voting Country of Rights Principal incorporation % activity –––––––––—– ——– ———————— Harold Wood Management Limited...... UK 100.00 Dormant Highmead Management Company Limited...... UK 100.00 Dormant Skyline 120 Management Limited...... UK 100.00 Estate management Skyline 120 Nexus Management Limited...... UK 100.00 Estate management South at Didsbury Point Two Management Limited ... UK 100.00 Estate management Trinity Place Residential Management Company Limited ...... UK 100.00 Estate management Urban Hive Hackney Management Limited ...... UK 100.00 Dormant Wychwood Park (Management) Limited...... UK 100.00 Estate management Countryside Sigma Limited ...... UK 74.90 House building

From 3 February 2014 to 26 January 2015, the Group held 75.00% voting rights in Millgate (UK) Holdings Limited; the remaining 25.00% was held by the management of Millgate Developments Limited. On 26 January 2015, the Group was transferred the shares from management to increase its holding to 100.00%. During the period from 3 February 2014 to 30 September 2015, Millgate (UK) Holdings Limited held the following subsidiary undertakings:

Millgate Developments Limited (from 3 February 2014)...... UK 100.00 House building Millgate Homes Limited (from 3 February 2014)...... UK 100.00 Dormant Millgate Homes UK Limited (from 3 February 2014) UK 100.00 Dormant

All subsidiaries are fully consolidated, after eliminating intergroup transactions. The non-controlling interest is identified as Countryside Sigma Limited.

(b) Associate and Joint venture undertakings of the Group The Group’s investments in associates and joint ventures, all of which are incorporated in the United Kingdom, and are accounted for using the equity method, are detailed in notes 28 and 29.

(c) Available for sale financial assets For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 At 1 October...... 8,556 10,461 10,862 Changes in fair value...... 523 1,122 443 Unwind of discount...... 814 1,250 515 Loans issued...... 841 – – Redemptions...... (273) (1,971) (1,285) ———— ———— ———— At 30 September...... 10,461 10,862 10,535 ———— ———— ———— Changes in the fair value of available for sale assets are recorded in the Combined and Consolidated Statement of Comprehensive Income.

The available for sale financial assets comprise loans advanced to home buyers to assist in the purchase of their property under shared equity schemes. The loans are secured by either a first or second legal charge over the property and are either interest-free or have interest chargeable from the fifth year onwards or tenth year onwards, dependent upon the scheme under which the loans were issued.

151 The assets are held at fair value, which represents the estimated future value receivable by the Group, discounted to present values. The future estimated value takes into consideration movements in house prices, the anticipated timing of the repayment of the asset and associated credit risk. As the precise final valuation and timing of the redemption of these assets remain uncertain, the Group applies assumptions based upon current market conditions and the Group’s experience of actual cash flows resulting from these transactions. These assumptions are reviewed at the end of each financial year as part of the impairment review conducted by the Directors. The difference between the estimated future value and the initial fair value is credited to finance income over the estimated period of the deferred term.

These loans are subject to credit risk, where loans may potentially not be repaid if the borrower defaults on repayment. An adjustment for credit risk is built into the calculation by means of using an interest rate used for home loans, which rank behind mortgages, with an increment added for borrowers who have a lower loan to value ratio. None of these financial assets are either past, due or impaired.

If UK house price inflation had been 1% higher or lower, with all other variables held constant and excluding any effect of current or deferred tax, the value of shared equity would increase or decrease by £90,000, respectively, whilst if the discount rate used had been 1% higher or lower, the value of these financial instruments would decrease or increase by £492,000 and £524,000, respectively. Changes in economic conditions will change the estimates made, therefore impacting the fair value of these loans.

The inputs used are by nature estimated and the resultant fair value has been classified as Level 3 under the fair value hierarchy.

15 Derivative Financial Instruments As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Assets Interest rate swap ...... 716 412 6 ———— ———— ———— 716 412 6 ———— ———— ———— Trading derivatives are classified as a current asset or liability. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.

Interest Rate Derivative Financial Instruments The Group uses interest rate derivatives to hedge against the risk exposure of LIBOR interest rates. The Group has an interest rate cap with a nominal value of £90,000,000 for a term of three years expiring April 2016. The fair value of this derivative as of 30 September 2015 was £6,000 (2014: £412,000, 2013: £716,000), the movement being included in interest costs in the income statement.

152 16 Inventories As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Development land and work in progress ...... 257,756 350,835 408,700 Completed properties unlet, unsold or awaiting sale...... 16,274 29,943 30,842 ———— ———— ———— 274,030 380,778 439,542 ———— ———— ———— The value of inventories expensed during the period and included in cost of sales was £423,881,000 (2014: £366,554,000, 2013: £237,073,000). During the year inventories were written down through cost of sales by £300,000 (2014: £8,165,000, 2013: £685,000). During the year the impairment to inventories amounting to £652,000 (2014: £247,000, 2013: £735,000) has been reversed, due to improved market conditions.

Provisions against land included in inventories For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 As of 1 October...... 22,504 22,056 20,942 Utilised on sale...... (398) (13,136) (5,546) Reversed in the year...... (735) (247) (652) Created in the year ...... 685 8,165 300 ———— ———— ———— As of 30 September...... 22,056 16,838 15,044 ———— ———— ———— Interest incurred on deferred land purchases amounting to £300,000 (2014: £556,000, 2013: £887,000) was capitalised during the year to inventories.

17 Trade and Other Receivables As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Amounts falling due within one year: Trade receivables...... 12,057 4,438 16,500 Amounts recoverable on construction contracts...... 8,741 17,733 18,010 Amounts owed by parent undertakings ...... – 19 – Amounts owed by joint ventures ...... 23,783 45,952 62,435 Amount owed by associate ...... 1,405 – – Other taxation and social security...... 2,819 2,682 4,819 Other receivables...... 788 981 965 Prepayments and accrued income...... 3,222 4,330 2,721 ———— ———— ———— 52,815 76,135 105,450

153 For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Amounts falling due in more than one year: Amounts recoverable on construction contracts...... 2,791 2,663 1,733 Trade receivables...... 4,900 21,713 13,616 ———— ———— ———— 7,691 24,376 15,349 ———— ———— ———— Total trade and other receivables ...... 60,506 100,511 120,799 ———— ———— ———— The Directors are of the opinion that there are no significant concentrations of credit risk (Note 31). The fair value of the financial assets is not considered to be materially different from their carrying value, as the impact of discounting is not significant. The fair values are based on discounted cash flows and are within Level 3 of the fair value hierarchy.

An impairment review has been undertaken at the year end to assess whether the carrying amount of trade receivables is deemed recoverable. A provision for impairment is made when there is objective evidence of impairment which is usually indicated by a delay in the expected cash flows or non-payment from customers. Trade receivables remaining outstanding past their due date are £219,000 (2014: £239,000, 2013: £336,000), however none were impaired.

Amounts owed by joint ventures falling due within one year represent non trading items consisting of advances, which include a provision of £8,000,000 (2014: £8,000,000, 2013: £8,000,000) made to Countryside Neptune LLP.

The other classes within trade and other receivables do not contain impaired assets.

18 Cash and Cash Equivalents As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Cash and cash equivalents ...... 228 172 354 ———— ———— ———— Cash and cash equivalents are offset against bank loans where applicable. Amounts that are not offset are tabled above.

Cash and cash equivalents of £80,835,000 (2014: £67,510,000, 2013: £80,289,000) comprise cash and short term deposits held, of which £80,481,000 (2014: £67,338,000, 2013: £80,061,000) is offset against loans drawn under the Group’s senior term facility. If these assets were fair valued, they would be considered as Level 1 under the fair value hierarchy. The carrying amount of these assets is equal to their fair value. At the year end, all financial assets held were in Sterling.

154 19 Trade and Other Payables As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Amounts falling due within one year: Trade payables ...... 54,830 73,055 114,006 Amounts owed to related parties ...... 48 62 47 Accruals and deferred income ...... 36,179 54,015 58,229 Other taxation and social security...... – 1,288 1,793 Other payables ...... 7,878 10,601 6,747 Advances due to joint ventures...... 693 510 318 ———— ———— ———— 99,628 139,531 181,140 Amounts falling due in more than one year: Trade payables ...... 30,119 34,785 61,055 Accruals and deferred income ...... 15,505 46,911 87,875 ———— ———— ———— 45,624 81,696 148,930 ———— ———— ———— Total trade and other payables ...... 145,252 221,227 330,070 ———— ———— ———— Trade and other payables principally comprise amounts outstanding for trade purchases and land acquired on deferred terms. The average credit period taken for trade purchases is 45 days (2014: 29 days, 2013: 37 days). The Directors consider that the carrying amount of trade and other payables approximates to their fair value, as the impact as the impact of discounting is not significant. The fair values are based on discounted cash flows and are within Level 3 of the fair value hierarchy.

20 Borrowings As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Bank loans...... 125,000 153,000 140,000 Cash and cash equivalents available for offset ...... (80,061) (67,338) (80,481) Bank loan and arrangement fees...... (4,781) (4,380) (3,487) ———— ———— ———— 40,158 81,282 56,032 Mandatory redeemable preference shares...... 227,349 285,126 287,329 ———— ———— ———— 267,507 366,408 343,361 ———— ———— ———— Bank Loans At 30 September 2015, the Group had a committed bank loan facility of £215,000,000 made available by Lloyds Bank plc, Barclays Bank PLC and Santander UK plc. This facility was originally £200,000,000 but was extended during the year. Subsequent to the year end, the facility has been increased by a further £50,000,000 to £265,000,000 following approval by the syndicate banks. The facility expires 3 June 2019. Interest is charged at UK LIBOR plus a variable margin. This facility is subject to both financial and non- financial covenants and is secured by fixed charges over the Group’s property interests and fixed assets and a floating charge over all other assets.

The carrying value of the loans drawn under the facility is equal to their fair value. As the impact of discounting is not significant, the fair values are based on discounted cash flows and are within Level 2 of the fair value hierarchy.

155 Bank loan arrangement fees are amortised over the term of the facility. At 30 September 2015, £894,000 (2014: £312,000, 2013: £435,000) was amortised during the year, leaving a remaining balance of £3,487,000 (2014: £4,380,000, 2013: £4,781,000).

The table below outlines those floating rate bank loans expiring after more than one year:

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Floating rate: Expiring after more than one year:...... 40,000 47,000 75,000 ———— ———— ———— Mandatory redeemable preference shares Mandatory redeemable preference shares were issued as follows:

• 16 April 2013 – £207,404,865 to OCM Luxembourg Coppice Topco S.à r.l. and £19,944,135 to Management

• 3 February 2014 – £54,546,493 to OCM Luxembourg Coppice Topco S.à r.l. and £3,230,558 to Management

• 3 November 2014 – £2,203,321 to management

The characteristics of these instruments have determined that they are classed as financial liabilities rather than equity.

These shares are redeemable on a date to be determined by the issuer or upon liquidation of the Operating Company or on the tenth anniversary of the date of issue, the mandatory redemption date. Interest on the shares issued on 16 April 2013 accrues annually at 14.5% for the first twelve months from issue, then 12.0% thereon which is payable on a date determined by the issuer or on the mandatory redemption date. Interest on the shares issued on 3 February 2014 accrues annually at 15% for the first twelve months from issue, then 12.0% thereon which is payable on a date determined by the issuer or on the mandatory redemption date.

The fair value of the financial liability is not considered to be materially different from its current value, as the impact of the discount is not significant. The fair values are based on discounted cash flows and are within Level 3 of the fair value hierarchy.

21 Provisions For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 At 1 October...... – 6,401 5,795 Provisions charged/(released) to the income statement during the year ...... 6,401 – (2,106) Provisions utilised during the year ...... – (606) (1,478) Unwind of discount...... – – 43 ———— ———— ———— At 30 September...... 6,401 5,795 2,254 ———— ———— ———— Included in current liabilities ...... 765 1,450 1,144 Included in non-current liabilities...... 5,636 4,345 1,110 ———— ———— ———— 6,401 5,795 2,254 ———— ———— ————

156 The provision is for an onerous lease on a vacant leasehold office property. The provision is calculated on the estimated cash flows over the remaining length of the lease until January 2019 and discounted at a risk free rate based on UK Government gilts.

22 Deferred Tax Assets As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Amounts due to be recovered within one year ...... 10,437 – – Amounts due to be recovered after more than one year...... 634 5,902 5,606 ———— ———— ———— 11,071 5,902 5,606 ———— ———— ———— The movement in the year in the Group’s net deferred tax position was as follows:

Tax losses Other Total ———— ———— ———— £’000 At 1 October 2012...... 15,323 3,461 18,784 Acquisition in the period (Note 14)...... – (1,968) (1,968) Charge to Income Statement for the period...... (3,401) (2,344) (5,745) ———— ———— ———— At 30 September 2013 ...... 11,922 (851) 11,071 Acquisition during the year (Note 14)...... – (894) (894) Charge to Income Statement for the year ...... (6,022) 1,747 (4,275) ———— ———— ———— At 30 September 2014 ...... 5,900 2 5,902 Charge to Income Statement for the year ...... (262) (34) (296) ———— ———— ———— At 30 September 2015 ...... 5,638 (32) 5,606 ———— ———— ———— The deferred tax asset of £5,638,000 (2014: £5,900,000, 2013: £11,922,000) has been recognised in respect of unutilised tax losses where realisation of the related tax benefit through future taxable profits is probable. Temporary differences arising in connection with interests in associate and joint ventures are not significant. No deferred tax asset has been recognised in relation to losses where it is considered that they are not recoverable in the near future.

23 Share Capital As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Authorised Ordinary A1 to A5 shares of £0.01 each ...... 6 7 7 Ordinary B1 to B5 shares of £0.01 each ...... – – 1 Ordinary C shares of £0.01 each ...... 2 10 10 Ordinary D shares of £0.01 each ...... – – – Ordinary AA shares of £0.01 each...... – 1 1 Ordinary BB shares of £0.01 each...... – – – ———— ———— ———— 8 18 19 ———— ———— ————

157 As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Allotted and issued Ordinary A1 to A5 shares of £0.01 each ...... 6 7 7 Ordinary B1 to B5 shares of £0.01 each ...... – – 1 Ordinary C shares of £0.01 each ...... 2 10 10 Ordinary D shares of £0.01 each ...... – – – Ordinary AA shares of £0.01 each...... – 1 1 Ordinary BB shares of £0.01 each...... – – – ———— ———— ———— 8 18 19 ———— ———— ———— Share Premium Ordinary A shares ...... 645 644 844 Ordinary B shares ...... 29 29 35 Ordinary C shares ...... – – – Ordinary D shares ...... 13 13 12 Ordinary AA shares ...... – 172 172 Ordinary BB shares...... – 12 12 ———— ———— ———— 687 870 1,075 ———— ———— ———— All ordinary shares allotted and issued have equal voting rights of one vote per share, with the right to receive dividends if declared.

The Operating Company was incorporated on 5 February 2013 with the issue of 12,500 £1.00 Ordinary Shares.

During the period until 30 September 2013, the following shares were issued:

15 April 2013

• The 12,500 Ordinary Shares were converted into 1,250,000 £0.01 Ordinary D Shares;

• 119,027 A1 Shares of £0.01; 119,027 A2 Shares of £0.01; 119,027 A3 Shares of £0.01; 119,027 A4 Shares of £0.01; 119,027 A5 Shares of £0.01 were issued; 1,249,999 D Shares were cancelled.

16 April 2013

• 11,173 A1 Shares of £0.01; 11,173 A2 Shares of £0.01; 11,173 A3 Shares of £0.01; 11,173 A4 Shares of £0.01; 11,173 A5 Shares of £0.01 were issued; 4,988 B1 Shares of £0.01; 4,989 B2 Shares of £0.01; 4,989 B3 Shares of £0.01; 4,991 B4 Shares of £0.01; 4,991 B5 Shares of £0.01; 160,000 C Shares of £0.01 were issued.

29 August 2013

• 859 B1 Shares of £0.01; 858 B2 Shares of £0.01; 858 B3 Shares of £0.01; 858 B4 Shares of £0.01; 858 B5 Shares of £0.01 were issued.

During the year to 30 September 2014 the following shares were issued:

24 December 2013

• 16,238 B shares of £0.01; 167,444 C shares of £0.01 were issued.

3 February 2014

• 135,497 AA shares of £0.01; 6,500 BB shares of £0.01; 353,150 C shares of £0.01 were issued.

158 15 April 2014

• 1,000 BB shares of £0.01 were issued.

9 May 2014

• 1,809 B shares of £0.01 were issued.

8 July 2014

• 500 B shares of £0.01; 278,406 C shares of £0.01 were issued.

During the year to 30 September 2015 the following shares were issued:

23 October 2014

• 1,520 B shares of £0.01

29 October 2014

• 2,280 B shares of £0.01

26 May 2015

• 8,016 A shares of £0.01; 1,050 B shares of £0.01; 700 BB shares of £0.01; 3,100 C shares of £0.01 were issued.

The following describes the nature and purpose of each reserve within shareholders’ equity:

Share premium The amount subscribed for share capital in excess of nominal value less any costs directly attributable to the issue of new shares.

Reserves Cumulative net gains and losses recognised in the Combined and Consolidated Statement of Comprehensive Income and Statement of Changes in Equity.

Available for Retained sale financial Total Earnings assets reserves ———— ———— ———— £’000 At 1 October 2012...... – – – Profit for the period...... 629 – 629 ———— ———— ———— At 30 September 2013...... 629 – 629 ———— ———— ———— (Loss)/Profit for the period ...... (11,828) 1,122 (10,706) Share based payment ...... 608 – 608 ———— ———— ———— At 30 September 2014...... (10,591) 1,122 (9,469) ———— ———— ———— Profit for the period...... 19,623 443 20,066 Share based payment ...... 1,310 – 1,310 ———— ———— ———— At 30 September 2015...... 10,342 1,565 11,907 ———— ———— ————

159 24 Commitments and Contingencies

(a) Operating lease commitments The Group has leases various under non-cancellable operating lease agreements. The lease terms are between 1 and 20 years, and the majority of lease agreements are renewable at the end of the lease period at market rate. The Group also leases various vehicles, under cancellable lease agreements. The Group is required to give a six month notice for termination of these agreements. The lease expenditure charged to the income statement during the year is disclosed in note 5. The future aggregate minimum lease payments under non-cancellable operating leases as follows:

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Within 1 year...... 2,381 2,522 3,041 Later than 1 year and less than 5 years...... 7,739 6,878 8,074 After 5 years...... 2,955 4,093 2,756 ———— ———— ———— 13,075 13,493 13,871 ———— ———— ———— (b) Parent company guarantees The Group has made parent company guarantees to its joint ventures and associate in the normal course of business.

25 Financial Instruments The following tables categorise the Group’s financial assets and liabilities included in the Consolidated Statement of Financial Position: Derivatives Loan and at fair Available receivables value for sale Total ———— ———— ———— ———— £’000 2015 Assets Available for sale financial assets...... – – 10,535 10,535 Derivative financial instruments ...... – 6 – 6 Trade and other receivables ...... 49,859 – – 49,859 Amounts due from joint ventures and associate ...... 62,435 – – 62,435 Cash and cash equivalents ...... 80,835 – – 80,835 ———— ———— ———— ———— 193,129 6 10,535 203,670 ———— ———— ———— ———— 2014 Assets Available for sale financial assets...... – – 10,862 10,862 Derivative financial instruments ...... – 412 – 412 Trade and other receivables ...... 46,547 – – 46,547 Amounts due from joint ventures and associate ...... 45,952 – – 45,952 Cash and cash equivalents ...... 67,510 – – 67,510 ———— ———— ———— ———— 160,009 412 10,862 171,283 ———— ———— ———— ————

160 2013 Assets Available for sale financial assets...... – – 10,461 10,461 Derivative financial instruments ...... – 716 – 716 Trade and other receivables ...... 28,489 – – 28,489 Amounts due from joint ventures and associate ...... 25,188 – – 25,188 Cash and cash equivalents ...... 80,289 – – 80,289 ———— ———— ———— ———— 133,966 716 10,461 145,143 ———— ———— ———— ———— Any changes in fair value on derivatives are taken through the Combined and Consolidated Statement of Comprehensive Income.

Other financial liabilities at Derivatives amortised at cost fair value Total ———— ———— ———— £’000 2015 Liabilities Bank loan and finance cost ...... 142,355 – 142,355 Mandatory redeemable preference shares...... 375,201 – 375,201 Trade and other payables (excluding non-financial liabilities) ...... 177,402 – 177,402 Amount due to joint ventures ...... 318 – 318 ———— ———— ———— 695,276 – 695,276 ———— ———— ———— 2014 Liabilities Bank loan and finance cost ...... 155,355 – 155,355 Mandatory redeemable preference shares...... 332,037 – 332,037 Trade and other payables (excluding non-financial liabilities) ...... 107,592 – 107,592 Amount due to joint ventures ...... 510 – 510 ———— ———— ———— 595,494 – 595,494 ———— ———— ———— 2013 Liabilities Bank loan and finance cost ...... 126,811 – 126,811 Mandatory redeemable preference shares...... 240,164 – 240,164 Trade and other payables (excluding non-financial liabilities) ...... 86,277 – 86,277 Amount due to joint ventures ...... 693 – 693 ———— ———— ———— 453,945 – 453,945 ———— ———— ———— Fair value estimation The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

161 Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs).

The following table presents the Group’s assets that are measured at fair value at 30 September 2014.

Level 1 Level 2 Level 3 Total ———— ———— ———— ———— £’000 2015 Assets Available for sale financial assets...... – – 10,535 10,535 Derivative financial instruments ...... – 6 – 6 ———— ———— ———— ———— – 6 10,535 10,541 ———— ———— ———— ———— 2014 Assets Available for sale financial assets...... – – 10,862 10,862 Derivative financial instruments ...... – 412 – 412 ———— ———— ———— ———— – 412 10,862 11,274 ———— ———— ———— ———— 2013 Assets Available for sale financial assets...... – – 10,461 10,461 Derivative financial instruments ...... – 716 – 716 ———— ———— ———— ———— – 716 10,461 11,177 ———— ———— ———— ———— There were no transfers between levels during the period. This is the first year that the available for sale financial assets have been measured at fair value, therefore there is no opening balance movement.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Level 1: No financial instruments of the Group is of level 1.

Level 2: The fair value of the level 2 financial instruments, namely interest rate swaps, is calculated as the present value of the estimated future cash flows, based on observable yield curves.

Level 3: The key assumptions used in level 3 valuations include future house price movements, the expected timing of receipts, credit risk and discount rates. Techniques, such as discounted cash flow analysis, have used to determine fair value for the level 3 financial instruments.

The fair values of the financial instruments that are measured at amortised cost is not shown, because the difference is not material.

162 26 Notes to the Cash Flow Statement

(a) Reconciliation of operating profit to cash generated from operations For the For the For the year ended year ended year ended 30 September 30 September 30 September Note 2013 2014 2015 ———— ———— ———— ———— £’000 Cash flows from operating activities (Loss)/Profit before taxation...... (5,275) (5,413) 28,019 Adjustments for Depreciation charge...... 13 460 1,181 352 Amortisation charge...... 12 338 1,032 1,201 Fair value gains on available for sale financial assets...... 14(c) (523) – – Non-cash items ...... 26(b) 3,962 5,168 (977) Share of post-tax profit from joint ventures and associates ...... 28,29 (1,876) (2,025) (10,584) Share based payment ...... 5(a) – 608 1,310 Finance costs...... 7 28,980 51,944 52,294 Finance income...... 8 (4,816) (2,264) (1,803) Changes in working capital Increase/(Decrease) in inventories...... (8,062) (5,057) 2,648 Decrease/(Increase) in trade and other receivables ...... 23,142 (1,118) (5,589) Increase/(Decrease) in trade and other payables ...... 174,735 (5,642) (35,574) Increase in Assets available for sale financial assets...... (841) – – Increase/(Decrease) in provisions ...... 21 6,401 (606) (1,478) ———— ———— ———— Cash generated from operations...... 216,625 37,808 29,819 ———— ———— ———— (b) Non-cash items For the year ended 30 September 2014, non-cash items relate to stock write downs amounting to £8,165,000 less the release of prior year stock impairments of £247,000. An accrual against joint venture guarantees was also released in the year amounted to £2,750,000.

In the year ended 30 September 2013, non- cash items relate to stock write downs amounting to £3,962,000.

163 27 Related Party Transactions

Transactions with Group joint ventures and associate Joint ventures Associates –———————————————— –———————————————— As of As of As of As of As of As of 30 September 30 September 30 September 30 September 30 September 30 September 2013 2014 2015 2013 2014 2015 ———— ———— ———— ———— ———— ———— £’000 Sales during the year...... 5,371 46,273 20,648 20 1,451 1,522 At 1 October...... 23,820 23,090 45,442 1,405 1,405 – Net advances (repayments) during the period ...... (730) 22,352 16,675 – (1,405) – ———— ———— ———— ———— ———— ———— At 30 September...... 23,090 45,442 62,117 1,405 – – ———— ———— ———— ———— ———— ———— The transactions noted above are between the Group and its associate and joint ventures whose relationship is described in Note 28 and Note 29 respectively.

Sales of goods to related parties were made at the Group’s usual list prices. No purchases were made by the Group from its joint ventures or associate. The amounts outstanding ordinarily bear no interest and will be settled in cash.

Remuneration of key management personnel The aggregate remuneration of the Directors of Copthorn Holdings Limited, who are considered to be key management personnel of the Group for the years ended 30 September 2013, 30 September 2014 and 30 September 2015 are set out below:

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Aggregate emoluments ...... 2,244 3,451 4,658 Retirement benefits ...... 113 – – Emoluments of highest paid Director...... 542 930 1,155 Retirement benefits of highest paid Director...... 33 – –

Transactions with key managementpersonnel In 2014, properties were sold by the Group at market value to parties related to the Directors. A property was sold to a company of which GS Cherry is a Director and Shareholder, for a consideration of £345,000. This property was leased back to the Group, resulting in payments of £21,000 (2014: £12,250) during 2015. A property was also sold to a close family member of IC Sutcliffe for a consideration of £339,500. This property was leased back to the Group, resulting in payments of £17,250 (2014: £1,460) during 2015.

In 2013, Acton Gardens LLP, a joint venture of the Group, sold a property to a close family member of RS Cherry for a consideration of £360,000.

In 2015, a close family member of IC Sutcliffe was employed by a subsidiary of the Group. In addition subsequent to 30 September 2015 a close family member of GS Cherry was employed by a subsidiary of the Group. Both individuals were recruited through the normal interview process and are employed at salaries commensurate with someone of their experience performing those roles. The combined annual salary and benefits of these individuals is less than £100,000.

164 28 Investment in Associate The Group holds a 28.5% share with pro rata voting rights in Countryside Properties (Bicester) Limited, a company incorporated in the United Kingdom, whose principal activity is Housebuilding. It is accounted for using the equity method.

The Group’s investment in its associate is represented by:

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Current assets ...... 11,385 8,956 3,960 Cash...... 56 5,158 5,434 Current liabilities ...... (3,321) (4,446) (4,903) Non-current liabilities ...... (1,923) (827) (327) ———— ———— ———— Investment in associate ...... 6,197 8,841 4,164 ———— ———— ———— The amount due from the associate is £nil (2014: £nil, 2013: £1,405,000). The Group’s share of post-tax profit from its associate arises as follows: For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Revenues ...... 330 12,763 3,791 Expenses...... (209) (8,638) (3,064) ———— ———— ———— Operating profit...... 121 4,125 727 Finance (cost)/income...... (128) 15 87 Income tax...... 1 (1,004) (248) ———— ———— ———— Share of profit from associate...... (6) 3,136 566

Dividends paid to shareholders...... ———— – ———— – ———— (5,243)

———— (6) ———— 3,136 ———— (4,677) ———— ———— ———— 29 Investments in Joint Ventures The Group’s aggregate investment in its joint ventures is represented by:

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Non-current assets...... 1,084 603 404 Current assets ...... 65,615 155,872 205,097 Cash...... 12,520 4,355 5,827 Current liabilities ...... (23,033) (21,645) (29,844) Non-current liabilities ...... (32,871) (119,493) (131,387) ———— ———— ———— Investment in joint ventures...... 23,315 19,692 50,097 ———— ———— ———— The aggregate amount due from joint ventures is £62,435,000 (2014: £45,952,000, 2013: £23,783,000). The amount due to joint ventures is £318,000 (2014: £510,000, 2013: £693,000). Transactions between the Group and its joint ventures are disclosed in Note 27.

165 The Group’s share of retained profits from its joint ventures arises as follows:

For the For the For the year ended year ended year ended 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Revenues ...... 30,604 15,870 68,354 Expenses...... (28,092) (15,859) (52,396) ———— ———— ———— Operating profit...... 2,512 11 15,958 Finance cost ...... (582) (1,233) (3,848) Income tax...... (48) 111 (2,092) ———— ———— ———— Share of profit from joint ventures ...... 1,882 (1,111) 10,018 Dividends paid to shareholders...... (1,079) (2,760) (6,682) ———— ———— ———— 803 (3,871) 3,336 ———— ———— ———— The Group’s principal investments in joint ventures, all of which are incorporated in the United Kingdom, and are accounted for using the equity method, comprise:

Voting Country of Rights Principal Name of joint venture incorporation (%) activity ———————————————————————————— —————–— ——— —————–———– Brenthall Park (Commercial) Limited ...... UK 50.00 Commercial Brenthall Park (Infrastructure) Limited ...... UK 50.00 Dormant Brenthall Park (Three) Limited...... UK 50.00 Dormant Brenthall Park Limited...... UK 50.00 House building C.C.B. (Stevenage) Limited...... UK 33.33 House building Countryside Properties (Accordia) Limited...... UK 50.00 House building Countryside Properties (Booth Street 2) Limited...... UK 39.00 House building Countryside Properties (Merton Abbey Mills) Limited ...... UK 50.00 House building Countryside Properties (Salford Quays) Limited ...... UK 50.00 House building Mann Island Estate Limited...... UK 50.00 Estate management Peartree Village Management Limited ...... UK 50.00 Estate management The Edge 1A Limited ...... UK 39.00 House building Woolwich Countryside Limited...... UK 50.00 House building Acton Gardens LLP ...... UK 50.00 House building Cambridge Medipark Limited ...... UK 50.00 Commercial CBC Estate Management Limited ...... UK 50.00 Estate management Countryside 27 Limited ...... UK 50.00 Estate management Countryside Annington (Colchester) Limited ...... UK 50.00 House building Countryside Annington (Mill Hill) Limited ...... UK 50.00 House building Countryside Land Securities (Springhead) Limited ...... UK 50.00 House building Countryside L&Q (Oaks Village) LLP...... UK 50.00 House building Countryside Maritime Limited ...... UK 50.00 House building Countryside Neptune LLP ...... UK 50.00 House building Countryside Zest (Beaulieu Park) LLP...... UK 50.00 House building Greenwich Millennium Village Limited...... UK 50.00 House building iCO Didsbury Limited ...... UK 50.00 Commercial iCO Didsbury Point Estate Management Limited...... UK 50.00 Estate management Silversword Properties Limited ...... UK 50.00 Commercial

A full list of joint ventures is available on request from the company’s registered office.

166 30 Construction contracts As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Contracts in progress at the reporting date Amounts due from contract customers included in trade and other receivables ...... 7,224 14,440 12,644 Retentions held by customers for contract work included in trade and other receivables...... 4,308 5,956 7,099 Revenue generated from contracting activities during the period...... 34,696 68,240 33,145 ———— ———— ———— 31 Financial Risk Management The main financial risks associated with the Group have been identified as liquidity risk, interest rate risk and housing market risk and credit risk. The Directors are responsible for managing these risks and the policies adopted are set out below.

Liquidity risk The Group finances its operations through a mixture of equity (Company share capital, reserves and retained earnings) and debt (preferred equity certificates, bank loan facilities). The Group manages its liquidity risk by monitoring its existing facilities for both financial covenant and funding headroom against forecast requirements based on short term and long term cash flow forecasts.

Maturity analysis The following table sets out the contractual undiscounted maturities including estimated cash flows of the financial assets and liabilities (excluding financial derivatives) of the Group at 30 September:

Less than 1 to 2 2 to 5 Over 1 year years years 5 years Total ———— ———— ———— ———— ———— £’000 2015 Assets Cash and cash equivalents ...... 80,835 – – – 80,835 Available for sale financial assets...... – – – 13,924 13,924 Trade and other receivables...... 34,530 6,530 10,603 – 51,663 Amounts due from joint ventures and associate...... 62,435 – – – 62,435 ———— ———— ———— ———— ———— 177,800 6,530 10,603 13,924 208,857 ———— ———— ———— ———— ———— 2015 Liabilities Bank loans and finance cost ...... 2,355 – 140,000 – 142,355 Mandatory redeemable preference shares ...... – – – 287,329 287,329 Return on mandatory redeemable preference shares ...... – – – 87,872 87,872 Trade and other payables...... 118,179 14,665 45,666 12,669 191,179 Amounts due to joint ventures...... 318 – – – 318 Provisions ...... 1,144 534 621 – 2,299 ———— ———— ———— ———— ———— 121,996 15,199 186,287 387,870 711,352 ———— ———— ———— ———— ————

167 Less than 1 to 2 2 to 5 Over 1 year years years 5 years Total ———— ———— ———— ———— ———— £’000 2014 Assets Cash and cash equivalents ...... 67,510 – – – 67,510 Available for sale financial assets...... – – – 16,435 16,435 Trade and other receivables...... 29,258 6,369 13,107 – 48,734 Amounts due from joint ventures and associate...... 45,952 – – – 45,952 Amounts due from parent...... 19 – – – 19 ———— ———— ———— ———— ———— 142,739 6,369 13,107 16,435 178,650 ———— ———— ———— ———— ———— 2014 Liabilities Bank loans and finance cost ...... 2,355 – 153,000 – 155,355 Mandatory redeemable preference shares ...... – – – 285,126 285,126 Return on mandatory redeemable preference shares ...... – – – 46,911 46,911 Trade and other payables...... 75,393 17,240 15,819 4,252 112,704 Amounts due to joint ventures...... 510 – – – 510 Provisions ...... 1,486 1,353 3,101 – 5,940 ———— ———— ———— ———— ———— 79,744 18,593 171,920 336,289 606,546 ———— ———— ———— ———— ———— 2013 Assets Cash and cash equivalents ...... 80,289 – – – 80,289 Available for sale financial assets...... – – – 18,422 18,422 Trade and other receivables...... 26,109 1,624 1,731 336 28,900 Amounts due from joint ventures and associate...... 25,188 – – – 25,188 ———— ———— ———— ———— ———— 131,586 1,624 1,731 18,758 153,699 ———— ———— ———— ———— ———— 2013 Liabilities Bank loans and finance cost ...... 1,811 – 125,000 – 126,811 Mandatory redeemable preference shares ...... – – – 227,349 227,349 Return on mandatory redeemable preference shares ...... – – – 12,815 12,815 Trade and other payables...... 55,930 30,615 6,367 750 93,662 Amounts due to joint ventures...... 693 – – – 693 Amounts due to parent ...... 48 – – – 48 Provisions ...... 765 1,302 4,126 401 6,594 ———— ———— ———— ———— ———— 59,247 31,917 135,493 241,315 467,972 ———— ———— ———— ———— ———— Cash and cash equivalents, includes £80,481,000 (2014 £67,338,000, 2013: £80,061,000) which is available for offset against loans drawn under the senior term facility, which has a maturity date of February 2018.

168 Interest rate risk Interest rate risk reflects the Group’s exposure to fluctuations in interest rates in the market. This risk arises from bank loans that are drawn under the Group’s loan facilities with variable interest rates based upon UK LIBOR. For the year ended 30 September 2015 it is estimated that an increase by 0.5% in interest rates would have decreased the Group’s profit before tax by £575,000 (2014: £678,000, 2013: £373,000).

The following table sets out the interest rate risk associated with the Group’s financial liabilities at 30 September:

Floating Non-interest Fixed rate rate bearing Total ———— ———— ———— ———— £’000 2015 Liabilities Bank loans and finance cost ...... – 142,355 – 142,355 Mandatory redeemable preferred shares...... 287,329 – – 287,329 Return on mandatory redeemable preferred shares...... 87,872 – – 87,872 Trade and other payables ...... 5,189 – 172,213 177,402 Amounts due to joint ventures...... – – 318 318 ———— ———— ———— ———— 380,390 142,355 172,531 695,276 ———— ———— ———— ———— 2014 Liabilities Bank loans and finance cost ...... – 155,355 – 155,355 Mandatory redeemable preferred shares...... 285,126 – – 285,126 Return on mandatory redeemable preferred shares...... 46,911 – – 46,911 Trade and other payables ...... 8,569 – 99,023 107,592 Amounts due to joint ventures...... – – 510 510 ———— ———— ———— ———— 340,606 155,355 99,533 595,494 ———— ———— ———— ———— 2013 Liabilities Bank loans and finance cost ...... – 126,811 – 126,811 Mandatory redeemable preferred shares...... 227,349 – – 227,349 Return on mandatory redeemable preferred shares...... 12,815 – – 12,815 Trade and other payables ...... 11,888 3,116 71,511 86,515 Amounts due to joint ventures...... – – 693 693 ———— ———— ———— ———— 252,052 129,927 72,204 454,183 ———— ———— ———— ———— The financial assets (excluding financial derivatives) of the Group amounting to £204,275,000 (2014: £170,801,000, 2013: £145,129,000) with the exception of cash and cash equivalents amounting to £80,481,000 (2014: £67,338,000, 2013: £80,061,000) are all non-interest bearing.

The Group’s interest rate risk is managed through interest rate swap contracts. On 16 April 2013, the Group entered into a new three year interest rate cap with a nominal value of £90,000,000.

The Group has no exposure to foreign currency risk.

Housing market risk The Group is affected by price fluctuations in the UK housing market. These are in turn affected by the wider economic conditions such as mortgage availability and associated interest rates, employment and consumer

169 confidence. Whilst these risks are beyond the Group’s ultimate control, risk is spread across business activities undertaken by the Group and the geographic regions in which it operates. We have considered the sensitivity in relation to available for sale financial assets, which is detailed in note 14c.

Credit risk The Group’s exposure to credit risk is limited solely to the United Kingdom for housebuilding activities and by the fact that the Group receives cash at the point of legal completion of its sales.

The Group’s remaining credit risk predominantly arises from trade receivables and cash and cash equivalents.

Loans receivable from financial assets held for sale are those advanced to homebuyers to assist in their purchase of property under the shared equity schemes. The loans are secured by either a first or second charge over the property and are held at fair value.

Trade receivables on deferred terms arise from land sales. The amount deferred is secured by a charge over the land until such time payment is received.

Trade and other receivables comprise mainly the amounts receivable from housing associations, joint ventures and associate. The Directors consider the credit rating of the various debtors is good in respect of the amounts outstanding and therefore credit risk is considered to be low.

Cash and cash equivalents and derivative financial instruments are held with UK clearing banks which are either A or A- rated.

Capital management The Group’s policies seek to protect returns to shareholders by ensuring the Group will continue to trade profitably in the foreseeable future. The Group also aims to optimise its capital structure of debt and equity so as to minimise its cost of capital. The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by monitoring its actual cash flows against bank loan facilities, financial covenants and the cash flow forecasts approved by the Directors.

As of As of As of 30 September 30 September 30 September 2013 2014 2015 ———— ———— ———— £’000 Total borrowings ...... 352,349 438,126 427,329 Less: cash and cash equivalents available for offset...... (80,061) (67,338) (80,481) ———— ———— ———— Net borrowings...... 272,288 370,788 346,848 Total equity ...... 1,468 (8,558) 13,234 ———— ———— ———— Total capital...... 273,756 362,230 360,082 ———— ———— ———— 32 Contingent Liabilities The Group has entered into counter indemnities to banks, insurance companies, statutory undertakings and the National House building Council in the normal course of business, including those in respect of joint venture partners from which it is anticipated that no material liabilities will arise.

33 Parent and Ultimate Parent Undertakings The ultimate parent company of OCM Luxembourg Coppice Midco S.à r.l. and the largest group of undertakings into which the Operating Company is consolidated is OCM Luxembourg Coppice Topco S.à r.l. All such entities are incorporated in Luxembourg.

OCM Luxembourg Coppice Topco S.à r.l. is owned by certain investment funds managed and advised by Oaktree Capital Management, L.P. a global investment manager headquartered in Los Angeles, USA. By

170 virtue of its ownership of Oaktree Capital Management, L.P., the ultimate parent and controlling entity is considered to be Oaktree Capital Group LLC, an entity organised in the USA and listed on the New York Stock Exchange.

Financial statements for OCM Luxembourg Coppice Topco S.à r.l. are available from the company secretary, Countryside House, The Drive, Great Warley, Brentwood, Essex, CM13 3AT.

34 Post Balance Sheet Events

(a) Revolving Credit Facility agreement At 30 September 2015, the Group had a committed bank loan facility of £215,000,000 made available by Lloyds Bank plc, Barclays Bank PLC and Santander UK plc. As set out in note 20, this facility was originally £200,000,000 but was extended during the year. Subsequent to the year end, on 18 November 2015, the facility has been increased by a further £50,000,000 to £265,000,000 following approval by the syndicate banks. The facility expires 3 June 2019 with the exception of one facility of £25 million that expires on 30 June 2017. Interest is charged at UK LIBOR plus a variable margin, the facility is subject to both financial and non-financial covenants and is secured by fixed charges over the Group’s property interests and fixed assets and a floating charge over all the other assets.

(b) Reorganisation The Company was incorporated on 18 November 2015. In connection with Global Offer and Admission, the Group will undertake a reorganisation (prior to Admission) of its corporate structure that will result in the Company becoming the ultimate holding company of the Group. On incorporation, the share capital of the Company was £1, consisting of 1 ordinary share with a £1 nominal value. On 19 November 2015, the Company issued a further 9 ordinary shares and 50,000 redeemable preference shares, each of £1. Immediately prior to the publication of this Prospectus, the Company had in issue 10 ordinary shares of £1 each and 50,000 redeemable preference shares of £1 each.

The insertion of the Company as a new holding company constitutes a Group reorganisation and will be accounted for using merger accounting principles. The reorganisation will not be effective until shortly prior to Admission and the consolidated financial statements of the Company will be presented as if the Company had always been part of the Group.

As part of the reorganisation, the holders of the mandatory redeemable preference shares will exchange these and the outstanding associated returns immediately prior to Admission for ordinary shares in the Company. The balance of the mandatory redeemable preference shares and the outstanding associated returns as of 30 September 2015 was £287,329,000 and £87,875,000, respectively.

Immediately following the reorganisation it is anticipated that the Operating Company will transfer to the Company the entire issued share capital of its direct subsidiary OCM Luxembourg Coppice Holdco S.à r.l.

Following this transfer it is intended that the Operating Company will be sidelined from the Group structure and placed into voluntary solvent liquidation, with the liquidation process anticipated to be completed following Admission.

(c) Adoption of employee share plans On 29 January 2016, the Company adopted three share based incentive plans, which are conditional on Admission. These plans are the Countryside Properties plc Deferred Bonus Plan; the Countryside Properties plc Long Term Incentive Plan (the “LTIP”), participation in which will be at the discretion of the Board; and an HMRC approved all-employee save as you earn plan (the “SAYE”), which is open to all employees including Executive Directors. No awards will be made under any of these three incentive plans prior to Admission.

171 (d) Relationship Agreement On 1 February 2016, the Company, OCM Luxembourg Coppice Topco S.à r.l. (the “Principal Shareholder”) and certain fund entities managed by Oaktree Capital Management L.P. (the “Oaktree Funds”, as defined below), entered into the Relationship Agreement. The principal purpose of the Relationship Agreement is to ensure that the Company will be capable of carrying on its business independently of its each of the Principal Shareholder and the Oaktree Funds and their respective associates.

The Relationship Agreement contains undertakings from each of the Principal Shareholder and the Oaktree Funds that: (i) transactions and relationships with it and its associates will be conducted at arm’s length and on normal commercial terms; (ii) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (iii) neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

The Relationship Agreement will be effective as from Admission and remain in effect for so long as: (i) the Principal Shareholder holds at least 10 per cent. of the issued Shares in the Company (or an interest which carries 10 per cent. or more of the aggregate voting rights in the Company from time to time); and (ii) the Ordinary Shares are admitted to the premium listing segment of the Official List maintained by the Financial Conduct Authority.

The Oaktree Funds comprise Oaktree Opportunities Fund VIIIb, L.P., Oaktree Opportunities Fund VIIIb (Parallel), L.P., Oaktree Opportunities Fund IX, L.P., Oaktree Opportunities Fund IX (Parallel), L.P., Oaktree Opportunities Fund IX (Parallel 2), L.P., Oaktree European Principal Fund III, L.P. and Oaktree European Principal Fund III (Parallel), L.P

172

Section C – Accountants Report on the Millgate Historical Financial Information

The Directors Countryside Properties plc Countryside House The Drive, Brentwood Essex CM13 3AT

J.P. Morgan Securities plc (the “Sponsor”) 25 Bank Street Canary Wharf London E14 5JP

1 February 2016

Dear Sirs

Millgate Developments Limited We report on the financial information of Millgate Developments Limited (“Millgate”) for the years ended 30 September 2013 and 30 September 2014 set out in Section D of Part XIV below (the “Millgate Historical Financial Information”). The Millgate Historical Financial Information has been prepared for inclusion in the prospectus dated 1 February 2016 (the “Prospectus”) of Countryside Properties plc (the “Company”) on the basis of the accounting policies set out in note 2 to the Millgate Historical Financial Information. This report is required by item 20.1 of Annex I to the PD Regulation and is given for the purpose of complying with that item and for no other purpose.

Responsibilities The directors of the Company are responsible for preparing the Millgate Historical Financial Information in accordance with International Financial Reporting Standards as adopted by the European Union.

It is our responsibility to form an opinion as to whether the Millgate Historical Financial Information gives a true and fair view, for the purposes of the Prospectus and to report our opinion to you.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting to its inclusion in the Prospectus.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the

PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

173 amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to Millgate’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error.

Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America or auditing standards of the Public Company Accounting Oversight Board (United States) and accordingly should not be relied upon as if it had been carried out in accordance with those standards.

Opinion In our opinion, the Millgate Historical Financial Information gives, for the purposes of the Prospectus dated 1 February 2016, a true and fair view of the state of affairs of Millgate as of the dates stated and of its profits/losses, cash flows and changes in equity for the periods then ended in accordance with the International Financial Reporting Standards as adopted by the European Union.

Declaration For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

174 Section D – Millgate Historical Financial Information

MILLGATE DEVELOPMENTS LIMITED

Statement of Comprehensive Income For the year For the year ended ended 30 September 30 September Note 2013 2014 –––––––– –––––––– –––––––– £’000 Revenue:...... 53,982 68,243 Cost of sales ...... (40,944) (43,719) –––––––– –––––––– Gross profit ...... 13,038 24,524 Administrative expenses ...... (4,212) (8,020) –––––––– –––––––– Operating profit ...... 5 8,826 16,504 Analysed as: Underlying operating profit ...... 8,826 18,503 Less: Non-underlying item ...... – (1,999) Operating profit ...... 8,826 16,504

Finance costs...... 6 (1,190) (2,308) –––––––– –––––––– Profit before income tax ...... 7,636 14,196 Income tax expense...... 8 (1,865) (4,054) –––––––– –––––––– Profit after tax ...... 5,771 10,142 Other comprehensive income – – –––––––– –––––––– Total comprehensive income for the year ...... –––––––– 5,771 –––––––– 10,142 Revenue and operating profits arise from Millgate Developments Limited’s continuing operations.

175 MILLGATE DEVELOPMENTS LIMITED

Statement of Financial Position For the year For the year ended ended 30 September 30 September Note 2013 2014 –––––––– –––––––– –––––––– £’000 Assets Non-current assets Property, plant and equipment ...... 9 300 275 –––––––– –––––––– 300 275 Current assets Inventories...... 11 71,381 93,496 Trade and other receivables ...... 12 559 554 Cash and cash equivalents ...... 13 – 1,455 –––––––– –––––––– 71,940 95,505 –––––––– –––––––– Total assets ...... –––––––– 72,240 –––––––– 95,780 Current liabilities Trade and other payables ...... 14 (7,532) (52,572) Borrowings...... 15 (7,750) – Current income tax liabilities...... (1,889) (2,920) –––––––– –––––––– (17,171) (55,492) Non-current liabilities Borrowings...... 15 (24,383) – Deferred tax liabilities ...... 16 (41) (13) –––––––– –––––––– (24,424) (13) –––––––– –––––––– Total liabilities ...... (41,595) (55,505) –––––––– –––––––– Net assets ...... –––––––– 30,645 –––––––– 40,275 Equity Share capital...... 17 82 82 Share premium ...... 17 202 339 Other reserve...... 17 6 6 Retained earnings...... 30,355 39,848 –––––––– –––––––– Total equity ...... –––––––– 30,645 –––––––– 40,275

176 MILLGATE DEVELOPMENTS LIMITED

Statement of Changes in Equity Share Share Other Retained capital premium reserve earnings Total –––––––– –––––––– –––––––– –––––––– –––––––– £’000 At 1 October 2012 ...... 82 167 6 25,490 25,745 –––––––– –––––––– –––––––– –––––––– –––––––– Total comprehensive income for the period Profit for the year...... – – – 5,771 5,771 Transactions with owners recorded directly in equity Dividends ...... – – – (906) (906) Proceeds from issue of ordinary shares ...... – 35 – – 35 –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with owners recognised directly in equity ...... – 35 – (906) (871) –––––––– –––––––– –––––––– –––––––– –––––––– At 30 September 2013 ..... –––––––– 82 –––––––– 202 –––––––– 6 –––––––– 30,355 –––––––– 30,645 Total comprehensive income for the period Profit for the year...... – – – 10,142 10,142 Transactions with owners recorded directly in equity Dividends ...... – – – (649) (649) Proceeds from issue of ordinary shares ...... – 137 – – 137 –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with owners recognised directly in equity ...... – 137 – (649) (512) –––––––– –––––––– –––––––– –––––––– –––––––– At 30 September 2014 ..... –––––––– 82 –––––––– 339 –––––––– 6 –––––––– 39,848 –––––––– 40,275

177 MILLGATE DEVELOPMENTS LIMITED

Cash Flow Statement For the year For the year ended ended 30 September 30 September Note 2013 2014 –––––––– –––––––– –––––––– £’000 Cash flows from operating activities Profit before taxation ...... 7,636 14,196 Adjustments for: Depreciation charge ...... 9 73 79 Loss on disposal of property, plant and equipment ...... 9 1 50 Finance costs...... 6 1,190 2,308 Changes in working capital: Increase in inventories ...... 11 (398) (22,115) Decrease in trade and other receivables...... 12 173 5 (Decrease)/Increase in trade and other payables ...... 14 (3,582) 15,432 –––––––– –––––––– Cash generated from operations ...... 5,093 9,955 Interest paid...... (1,190) (1,989) Tax paid...... (2,471) (3,051) –––––––– –––––––– Net cash inflow from operating activities ...... 1,432 4,915 –––––––– –––––––– Cash flows from investing activities Purchase of property, plant and equipment ...... 9 (99) (104) –––––––– –––––––– Net cash outflow from investing activities ...... (99) (104) –––––––– –––––––– Cash flows from financing activities Net proceeds from issue of ordinary shares ...... 17 35 137 Dividends paid to shareholders...... (70) (3,493) Proceeds from loan borrowings ...... 15 1,000 – Repayment of existing loan borrowings ...... 15 (2,298) – –––––––– –––––––– Net cash outflow from financing activities ...... (1,333) (3,356) –––––––– –––––––– Net increase in cash and cash equivalents ...... – 1,455 Cash and cash equivalents at beginning of the period...... – – –––––––– –––––––– Cash and cash equivalents at the end of the period ...... 13 –––––––– – –––––––– 1,455

178 MILLGATE DEVELOPMENTS LIMITED

Notes to the Financial Information

1 General Information Millgate Developments Limited (“Millgate”) is a property development and sales business focussed on the development of new homes.

Millgate is a private company and is incorporated and domiciled in the UK. The address of its registered office is Millgate House, Ruscombe Lane, Ruscombe, Twyford, Berkshire, RG10 9JT.

On 3 February 2014, OCM Luxembourg Coppice Midco S.à r.l. acquired the entire share capital of Millgate through its subsidiary Millgate (UK) Holdings Limited, which was incorporated by Magnum Luxco S.à r.l. (a direct subsidiary of OCM Luxembourg Coppice Midco S.à r.l.) to acquire Millgate. As a result of this acquisition on 3 February 2014, 25 per cent. of the issued share capital of Millgate (UK) Holdings Limited was held by the existing management of Millgate.

On 4 June 2014, the 75 per cent. shareholding in Millgate (UK) Holdings Limited was transferred from Magnum Luxco S.à r.l to Countryside Property (UK) Limited (a fellow subsidiary of OCM Luxembourg Coppice Midco S.à r.l.). During January 2015, Countryside Property (UK) Limited exercised an option (which was put in place at the time of the original acquisition of Millgate on 3 February 2014) to acquire the remaining 25 per cent. shareholding in Millgate (UK) Holdings Limited.

The financial information presented in this Section D of this Part XIV: “Millgate Historical Financial Information” has been prepared specifically for the purpose of this Prospectus, and incorporates financial information of Millgate that has been previously reported on a standalone basis albeit that the previously reported financial information of Millgate relates to different period ends and was prepared under UK Generally Accepted Accounting Practices (“UK GAAP”).

This historical financial information presents the financial track record of Millgate for the years ended 30 September 2013 and 2014.

2 (i) Accounting Policies The principal accounting policies applied in the preparation of this financial information is set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of preparation This historical financial information presents the financial track record of Millgate for the two years ended 30 September 2014 and is prepared for the inclusion in the prospectus of Countryside Properties plc for the purposes of admission to the premium segment of the Official List maintained by the Financial Conduct Authority and to trading on the London Stock Exchange’s main market for listed securities (the “Admission”). This financial information has been prepared in accordance with the requirements of the Prospectus Directive regulation, the Listing Rules, International Financial Reporting Standards as adopted by the European Union (“IFRS”), and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The deemed IFRS transition date for Millgate is 1 October 2012. The principles and requirements for first time adoption of IFRS are set out in IFRS 1. IFRS 1 allows certain exemptions in the application of particular standards to prior periods in order to assist companies with the transition process. As this is the first set of financial information for Millgate presented for the two years ended 30 September 2014 and as of 30 September 2013, no corresponding reconciliations to UK GAAP have been provided. As set out in Note 25 there were no reconciling items impacting the statement of financial position as of 30 September 2014.

This historical financial information is prepared In accordance with IFRS on a going concern basis and under the historical cost convention, except for the fair valuation of assets and liabilities of the

179 subsidiary company acquired during the period, and financial liabilities. The historical financial information is presented in thousands of pounds sterling (“£”) except when otherwise indicated.

The preparation of historical financial information in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s reasonable knowledge of the amount, event or actions, actual results may differ from those estimates.

The principal accounting policies adopted in the preparation of the historical financial information are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

(b) Going concern This historical financial information relating to Millgate has been prepared on the going concern basis.

Millgate maintains a mixture of parent company loans and cash reserves, which together are designed to ensure that Millgate has sufficient available funds to finance its operations. The Millgate Board of Directors review forecasts of Millgate’s liquidity requirements based on a range of scenarios to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its committed borrowing facilities at all times so that Millgate does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The Millgate Board of Directors have reviewed the cash flow forecasts of Millgate and consider that Millgate has adequate resources to continue in operational existence for at least 12 months from the date of this historical financial information. The Millgate Board of Directors therefore consider it is appropriate to adopt the going concern basis of accounting in preparing the financial information.

The cashflow projections are the sole responsibility of the Millgate Board of Directors based upon their present plans, expectations and intentions. In this context, the Millgate Board of Directors have prepared and considered cash flow projections for Millgate for a period extending one year from the date of approval of this historical financial information. Based on these cash flows, and having regard to the provision of the debt facilities as described in Note 15 to this historical financial information, the Millgate Board of Directors are satisfied that Millgate are able to meet their liabilities as and when they fall due for the foreseeable future and for a minimum period of 12 months from the date of this historical financial information.

New standards, amendments and interpretations The following amendments to standards and interpretations which will be relevant to the preparation of Millgate’s Financial Information, have been issued, but are not effective (or not effective in the EU) and have not been early adopted for the financial year beginning 1 October 2016:

• IFRS 9 ‘Financial instruments’, on ‘Classification and measurement’ (effective 1 October 2018). This is the first part of a new standard on classification and measurement of financial assets that will replace IAS 39. IFRS 9 has two measurement categories: amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is at fair value through profit or loss. Amortised cost accounting will also be applicable for most financial liabilities, with bifurcation of embedded derivatives. The main change is that in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch.

180 • IFRS 15 ‘Revenue from contracts with customers’ (effective 1 October 2018). This standard will replace both IAS 18 which covers contracts for goods and services and IAS 11 which covers construction contracts. The basis for IFRS 15 is revenue is now recognised when control of a good or service is transferred to a customer, which replaces the existing treatment of risks and rewards. Under the new standard, revenue is also allocated to separate performance obligations under a contract, which revenue is recognised only once those obligations are met.

• Amendments to IAS 1 (effective 1 October 2016). This amendment explores how financial statement disclosures can be improved by disaggregating information, reducing obscurity.

Management will assess the impact on Millgate of these standards prior to the effective date of implementation. There are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on Millgate for the financial year beginning 1 October 2016.

(c) Property, plant and equipment Property, plant and equipment are stated at historical purchase cost less accumulated depreciation.

Depreciation Depreciation is charged at rates to write-off the cost on a reducing balance basis over the estimated useful lives of each part of an item of property, plant and equipment. The applicable annual rates are:

• Fixtures and fittings 10%

• Plant and machinery 20% to 25%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the assets carrying amount is greater than is estimated recoverable amount.

(d) Financial assets

Classification Millgate classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

Millgate’s use of derivatives and financial instruments is governed by Millgate’s policies approved by the Millgate Directors. Millgate’s activities expose it primarily to interest rate risk and it uses interest rate swap contracts to hedge these exposures. Millgate does not use derivative financial instruments for speculative purposes.

All derivative financial instruments are recognised in the balance sheet at fair value, with subsequent changes in value recognised in the Statement of Comprehensive Income.

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those

181 with maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Millgate’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash equivalents’ in the Statement of Financial Position.

(e) Inventories Inventory is recognised at fair value. Where land is purchased on deferred settlement terms then the land and the land payable are discounted to their fair value. The land payable is then increased to the settlement value over the period of financing, with the financing element being charged as finance costs through the Statement of Comprehensive Income. Development land and work in progress is recognised in inventory until revenue is recognised in accordance with Millgate’s revenue recognition policy. Where a property is being developed, cost includes cost of acquisition and development incurred in bringing the inventories to their present location and condition.

Land inventory is recognised at the time a liability is recognised, generally after exchange of unconditional contracts.

Net realisable value represents the estimated selling price less all estimated costs to completion and selling costs to be incurred.

(f) Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less any provision for impairment. A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flows discounted using the original effective interest rate. The carrying value of the receivable is reduced and any impairment loss is recognised in the Statement of Comprehensive Income. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

(g) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and other short-term deposits held by Millgate with maturities of three months or less. Bank overdrafts are presented in current liabilities.

(h) Trade payables Trade payables on normal terms are not interest-bearing and are stated initially at their fair value. Trade payables on extended terms, particularly in respect of land, are recorded at their fair value at the date of acquisition of the asset to which they relate and subsequently held at amortised cost. The discount to fair value is amortised over the period of the credit term and charged to finance costs using the effective interest rate method. Changes in estimates of the final payment due are capitalised into inventory and, in due course, to cost of sales in the Statement of Comprehensive Income.

Deposits received from customers relating to sales of new properties are held within current trade payables.

Accounts payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

(i) Borrowings Interest-bearing bank loans and overdrafts are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement or redemption, are amortised over the term of the instrument using the effective rate interest method.

Borrowings are classified as current liabilities unless Millgate has an unconditional right to defer settlement of the liability for at least 12 months after the date of the Statement of Financial Position.

182 (j) Provisions Provisions are recognised when Millgate has a present legal obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated. Where the effect of the time value of money is material, the provision is based on the present value of future outflows, discounted at the pre-tax discount rate that reflects the risks specific to the liability. Provisions for onerous leases are recognised when there are foreseeable net cash outflows on a lease which has more than one year before expiring or option to exercise a break.

(k) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from the proceeds.

(l) Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(m) Revenue Revenue is attributable to one principal activity of the business, the sale of properties. Revenue for the sale of properties is recognised once the significant risks and rewards of ownership have passed to the purchaser.

Revenue on the sale of new homes in recognised on legal completion.

Profit is calculated on a plot by plot basis and is recognised on sales based on the forecast margin across the related development site.

Fees receivable for sales and marketing and project management services are recognised on an accruals basis in line with the underlying contract.

Deferred income Where Millgate receives an amount in advance in respect of future income streams, the value of the receipt is amortised over the period of the contract as the property is delivered and the unexpired element is disclosed in other liabilities as deferred revenue.

(n) Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Rentals payable and incentives receivable under operating leases are both expensed on a straight-line basis over the term of the relevant lease.

(o) Net finance costs

Finance costs Finance costs comprise interest payable on borrowings.

Finance income Finance income comprises interest receivable on funds invested.

(p) Current and deferred income tax Income tax for the years presented comprises current and deferred tax.

183 Current taxation The current tax payable is based on taxable profit for the period which differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and those items never taxable or deductible. Millgate’s liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the historical financial information and the corresponding tax rates used in the computation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the substantively enacted tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when Millgate intends to settle the balances on a net basis.

(q) Employee benefits

Pension obligations Millgate operates a defined contribution pension scheme. A defined contribution plan is a pension plan under which Millgate pays fixed contributions into a separate entity. Millgate has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Millgate has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they fall due.

(r) Non-underlying items Certain items are presented separately in the Statement of Comprehensive Income as non-underlying items where, in the judgement of the Millgate Board of Directors, they need to be disclosed separately by virtue of their nature, size or incidence in order to obtain a clear and consistent presentation of Millgate’s underlying business performance. As these non-underlying items can vary significantly from year to year they create volatility in reported earnings. The Millgate Board of Directors believe that the ‘underlying operating profit’ presents a clear and consistent presentation of the underlying performance of Millgate’s ongoing business for shareholders. Underlying profit is not defined by IFRS and therefore may not be directly comparable with the ‘adjusted’ profit measures of other companies.

An example of a material and non-recurring item which may give rise to disclosure as a non- underlying item is fees incurred in relation to business combinations.

184 2 (ii) Critical Accounting Judgements and Estimates The preparation of Millgate’s historical financial information under IFRS requires the Directors to make estimates and assumptions that affect the application of policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.

(a) Critical accounting judgements In the process of applying the Group’s accounting policies, which are described above, the Millgate Board of Directors have made no individual judgements that have had significant impact upon the financial information, apart from those involving estimations, which are dealt with below.

(b) Key sources of estimation uncertainty The estimates and underlying assumptions are based on historical experience and other relevant factors and reviewed on an ongoing basis. This approach forms the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based or as a result of new information. Such changes are recognised in the year in which the estimate is revised.

The key assumptions about the future and key sources of estimation uncertainty that have a risk of causing a material adjustment to the carrying value of assets and liabilities are described below.

Estimation of costs to complete and contract provisions In order to determine the profit and loss that Millgate is able to recognise on its developments in a specific period, Millgate has to allocate total costs of the developments between the proportion completing in the period and the proportion to complete in a future period. The assessment of the total costs to be incurred requires a degree of estimation. However, Millgate management has established internal controls to review and ensure the appropriateness of estimates made on an individual development basis.

Carrying value of inventory Millgate carries inventory at fair value. Inventory generated through the normal course of business is recorded at the lower of cost and net realisable value. A financial appraisal is prepared and updated monthly for each development which records an estimate of future revenues and expenditure. In circumstances where forecast revenues are lower than anticipated expenditure, an impairment charge is made. This impairment charge may be reversed in future periods when there is evidence of improved selling prices or reduced expenditure forecast on a development.

3 Segmental Reporting The operations of Millgate comprise one class of business segment, being the sale of properties. The Directors of Millgate review business activities, performance and strategic decisions of Millgate as one single segment. Accordingly, the Millgate represents a single operating and reportable segment.

185 4 Employees and Directors

(a) Staff costs for Millgate during the year: For the year For the year ended ended 30 September 30 September 2013 2014 –––––––– –––––––– £’000 The aggregate remuneration for the employees of Millgate comprised: Wages and salaries ...... 2,904 3,161 Social security costs ...... 405 457 Performance related incentives ...... 434 1,917 Pension costs ...... 149 147 –––––––– –––––––– –––––––– 3,892 –––––––– 5,682 The average monthly number of employees (including Directors) for the period for each of Millgate’s principal divisions was as follows:

2013 2014 –––––––– –––––––– Number Number Housebuilding and development activities ...... 28 29 Head office ...... 32 33 –––––––– –––––––– –––––––– 60 –––––––– 62 (b) Directors’ emoluments For the year For the year ended ended 30 September 30 September 2013 2014 –––––––– –––––––– £’000 Aggregate emoluments...... 704 1,115 Accrued retirement benefits ...... 42 29 –––––––– –––––––– –––––––– 746 –––––––– 1,144 Employees and Directors Two of Millgate’s directors are remunerated by Countryside Properties (UK) Limited, a fellow subsidiary of OCM Luxembourg Coppice Midco S.à r.l, the ultimate parent company. Their emoluments are disclosed in the combined and consolidated historical financial information of OCM Luxembourg Coppice Midco S.à r.l. During the year ended 30 September 2014, four directors’ roles were terminated. Compensation for loss of office for one of the directors was paid by Millgate and this amounted to £34,000 and is included in Director’s emoluments above. No compensation for loss of office was paid by Millgate in respect of the other directors. Three Directors (2013: three) had pension contributions made by Millgate into a money purchase scheme.

186 (c) Emoluments of the highest paid Director For the year For the year ended ended 30 September 30 September 2013 2014 –––––––– –––––––– £’000 Aggregate emoluments...... 203 369 Accrued retirement benefits ...... 16 1 –––––––– –––––––– –––––––– 219 –––––––– 370 (d) Key management compensation The following table details the aggregate compensation paid in respect of the members of the Millgate Board of directors.

For the year For the year ended ended 30 September 30 September 2013 2014 –––––––– –––––––– £’000 Wages and salaries ...... 704 1,115 Post-employment benefits...... 42 29 –––––––– –––––––– –––––––– 746 –––––––– 1,144 There are no defined benefit schemes for key management. Pension costs under defined contribution schemes are included in the post-employment benefits disclosed above. The disclosures of shares granted under the long term incentive schemes are included in Note 4(e).

(e) Share based payments The company recognised no charges relating to equity settled share based payment transactions during the year as the charge for the year is considered to be immaterial.

(f) Retirement benefits Personal Pension Plans operate for both staff and executives of Millgate Developments Limited. These are defined contribution schemes invested with Scottish Equitable PLC. Annual contributions to these plans charged against income during the year amounted to £147,000 (2013: £149,000) of which £19,000 (2013: £24,000) was outstanding at 30 September 2014.

5 Operating Profit For the year For the year ended ended 30 September 30 September 2013 2014 ———— ———— £’000 Operating profit has been arrived at after charging: Staff costs (Note 4) ...... 3,892 5,682 Depreciation of property, plant and equipment ...... 73 79 Inventories expensed to cost of sales...... 41,400 51,354 Acquisition costs...... – 1,999 Reversal of impairment of inventory, included in cost of sales...... (456) (7,635) Operating leases ...... –––––––– 388 –––––––– 380

187 During the year ending 30 September 2014, £1,999,000 of non-underlying legal and professional fees were expensed in relation to the acquisition of Millgate by OCM Luxembourg Coppice Midco S.à r.l on 3 February 2014.

6 Finance Costs For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 Bank loans and overdrafts...... 1,190 1,750 Other interest payable ...... – 2 Intercompany loans...... – 556 ———— ———— 1,190 2,308 ———— ———— Interest payable on bank borrowings include £548,000 of debt arrangement fees written off as a result of repaying the bank loan early on 4 June 2014 (Note 15).

7 Auditors’ Remuneration During the year the Company obtained the following services from the Company’s auditors at costs as detailed below:

For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 Fees payable to Millgate’s auditors for the audit of the statutory financial statements...... 27 38 Fees payable to Millgate’s auditors for other services: – Non-audit services ...... 7 7 ———— ———— 34 45 ———— ———— 8 Taxation For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 Analysis of credit in year UK corporation tax Current period ...... 1,756 3,963 Adjustments in respect of prior periods...... (3) 119 ———— ———— 1,753 4,082 Deferred tax (Note 16) Origination and reversal of temporary differences ...... 112 (28) ———— ———— 112 (28) ———— ———— 1,865 4,054 ———— ————

188 The charge for the period can be reconciled to the result per the Statement of Comprehensive Income as follows:

For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 Profit before income tax ...... 7,636 14,196 Tax at the domestic tax rate 22.0% (2013: 23.5%) ...... 1,794 3,123 Expenses not deductible for tax...... 12 451 Accelerated capital allowances ...... (15) (17) Adjustments in respect of prior years...... (3) 119 Changes in tax rates ...... 77 49 Temporary timing differences...... – (4) Tax relief for exercise of employee shares schemes...... – (225) Taxation in respect of Apricot Properties (West Brook House) Limited ...... – 205 Change on adoption of FRS 101/IFRS...... – 353 ———— ———— 1,865 4,054 ———— ———— 9 Property, Plant and Equipment Plant and Computer machinery, and other Leasehold Motor fixtures and office Property Vehicles fittings equipment Total ———— ———— ———— ———— ———— £’000 Cost At 1 October 2012 ...... 239 95 236 413 983 Additions...... – 32 38 29 99 Disposals...... – (17) – (7) (24) ———— ———— ———— ———— ———— At 30 September 2013...... 239 110 274 435 1,058 ———— ———— ———— ———— ———— Additions...... – 41 3 60 104 Disposals...... – (80) (38) (202) (320) ———— ———— ———— ———— ———— At 30 September 2014...... 239 71 239 293 842 ———— ———— ———— ———— ———— Accumulated depreciation At 1 October 2012 ...... 123 71 162 352 708 Depreciation charge for the year ...... 11 12 21 29 73 Disposals...... – (16) – (7) (23) ———— ———— ———— ———— ———— At 30 September 2013...... 134 67 183 374 758 Depreciation charge for the year ...... 11 14 12 42 79 Disposals...... – (64) (12) (194) (270) ———— ———— ———— ———— ———— At 30 September 2014...... 145 17 183 222 567 ———— ———— ———— ———— ———— Net book value At 30 September 2014...... 94 54 56 71 275

At 30 September 2013...... ———— 105 ———— 43 ———— 91 ———— 61 ———— 300

At 30 September 2012...... ———— 116 ———— 24 ———— 74 ———— 61 ———— 275 ———— ———— ———— ———— ———— Depreciation expense of £79,000 (2013: £73,000) has been charged to administrative expenses.

189 10 Investments

Subsidiary undertakings of Millgate Millgate substantially owns directly the whole of the issued and fully paid ordinary share capital of its subsidiary undertakings. The subsidiary undertakings of Millgate at 30 September 2014 are presented below:

Country of Voting rights Principal Incorporation % activity ———–——— ———–——— ———–——— Direct investment Millgate Homes Limited...... UK 100.00 Dormant Millgate Homes UK Limited...... UK 100.00 Dormant

11 Inventories As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Development land and work in progress ...... 3,619 15,959 Completed properties, unsold or awaiting sale...... 67,762 77,537 ———— ———— 71,381 93,496 ———— ———— The value of inventories expensed during the year ended 30 September 2014 and included in cost of sales was £51,354,000 (2013: £41,400,000). During 2013, Millgate had reviewed its development plan for one of its sites, Sundridge Park, and obtained planning permission for a new scheme with an improved forecast. Therefore the carrying value of the impairment provision in respect of the site was reduced by £7,635,000 to £3,302,000 (2013: £11,739,000).

Provisions against land included in inventories:

2013 2014 ———— ———— £’000 As of 1 October...... 12,195 11,739 Utilised on sale...... – (802) Reversed in the year...... (456) (7,635) ———— ———— As of 30 September...... 11,739 3,302 ———— ———— 12 Trade and Other Receivables As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Trade receivables...... 2 31 Amounts owed by parent undertakings ...... – 70 Prepayments and accrued income...... 231 225 Other taxation and social security...... 255 227 Other receivables...... 71 1 ———— ———— 559 554 ———— ———— The Millgate Board of directors are of the opinion that there are no significant concentrations of credit risk. The fair value of the financial assets is not considered to be materially different from their carrying value, as the impact of discounting is not significant. The fair values are based on discounted cash flows and are within Level 3 of the fair value hierarchy.

190 The other classes within trade and other receivables do not contain impaired assets.

Amounts owed by parent undertakings are unsecured, interest free and repayable on demand.

191 13 Cash and Cash Equivalents As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Cash and cash equivalents ...... – 1,455 ———— ———— Cash and cash equivalents are offset against bank loans where applicable. Amounts that are not offset are tabled above.

Cash and cash equivalents of £1,455,000 (2013: £2,298,000) comprise cash and short term deposits held. of which £nil (2013: £2,298,000) is offset against loans drawn under Millgate’s revolving credit facility.

If these assets were fair valued, they would be considered as Level 1 under the fair value hierarchy. The carrying amount of these assets approximates to their fair value. At the year end, all financial assets held were in Sterling.

14 Trade and Other Payables As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Trade payables ...... 2,462 10,135 Amounts owed to parent undertakings ...... – 36,858 Other taxation and social security...... 174 199 Other payables ...... 3,584 1,352 Accruals and deferred income ...... 1,312 4,028 ———— ———— 7,532 52,572 ———— ———— Trade and other payables principally comprise amounts outstanding for trade purchases and land acquired on deferred terms. The average credit period taken for trade purchases is 29 days (2013: 22 days). The Directors consider that the carrying amount of trade and other payables approximates to their fair value, as the impact as the impact of discounting is not significant. The fair values are based on discounted cash flows and are within Level 3 of the fair value hierarchy.

Millgate granted a fixed charge over the stock of land and properties under construction in respect of the bank loans and subsequent amounts due to the parent company.

Amounts owed to parent undertakings are unsecured, interest bearing and based on LIBOR plus a margin, and are repayable on demand.

192 15 Borrowings As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Amounts falling due within one year Bank loans – Senior term facility ...... 7,750 – Amounts falling due after more than one year Bank loans – Revolving credit facility ...... 27,000 – Cash and cash equivalents available for offset ...... (2,298) – Bank loan and arrangement fees...... (319) – ———— ———— 24,383 – ———— ———— Total borrowings ...... 32,133 – ———— ———— The senior term facility expired and was repaid 15 February 2014. As of 4 June 2014, a revolving credit facility was available to Millgate from Barclays Bank PLC. All loans outstanding under this facility were repaid when Millgate was acquired by Copthorn Holdings Limited.

16 Deferred tax liabilities For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 At 1 October...... 71 (41) Provisions (utilised)/charged to the income statement during the year...... (112) 28 ———— ———— At 30 September 2015 ...... (41) (13) ———— ———— Deferred tax assets and liabilities arise on the recognition of accelerated capital allowances.

17 Share Capital and Reserves As of As of 30 September 30 September 2013 2014 ———— ———— £’000 Allotted, issued and fully paid 8,181,740 (2013 : 964,780) Ordinary “B” shares of £0.10 each...... 10 82 Nil (2013 : 720,000) Non re-redeemable cumulative preference “A” shares of £0.10 each...... 72 – ———— ———— 82 82 ———— ———— Millgate converted all non-redeemable cumulative preference “A” shares to ordinary “B” shares on 3 February 2014 following the acquisition of Millgate by OCM Luxembourg Midco S.à r.l.

Share Capital Dividend Rights Each ordinary share is entitled pari passu to dividend payments or any other distribution.

The previous preference A shares holders were entitled to receive an annual dividend of £1.30 per share in priority to any payment by way of dividend to the holders of any other shares in the capital of Millgate.

193 Therefore, a total of £649,000 of preference shares dividends were payable up to 3 February 2014 (2013: £905,540). The total preference shares dividend payable including brought forward amounts payable from prior year were settled prior to the acquisition of the Company on 3 February 2014.

Capital Rights In the event of a winding up each share is entitled pari passu to participate in a distribution arising from the winding up of Millgate.

Voting Rights Each A share is entitled to ten votes in any circumstances.

Each B share is entitled to one vote in any circumstances.

Share premium The amount subscribed for share capital in excess of nominal value less any costs directly attributable to the issue of new shares.

Other Reserves This represents the capital redemption reserve, which recognises the difference where shares previously issued by Millgate have been purchased.

Retained earnings Cumulative net gains and losses recognised in the Comprehensive Statement of Income.

18 Commitments and Contingencies

(a) Operating lease commitments At 30 September 2014, Millgate had the following minimum lease payments under non-cancellable operating leases for each of the following periods:

For the year ended For the year ended 30 September 2013 30 September 2014 —————————–—————— —————————–—————— Land and Land and buildings Other Total buildings Other Total ———— ———— ———— ———— ———— ———— £’000 Expiring in under one year...... – 25 25 – 2 2 Expiring in one to five years...... – 84 84 – 141 141 Expiring in more than five years...... 3,169 – 3,169 2,844 25 2,869 ———— ———— ———— ———— ———— ———— 3,169 109 3,278 2,844 168 3,012 ———— ———— ———— ———— ———— ———— (b) Contingencies Millgate has entered into counter indemnities to bankers, insurance companies, statutory undertakings and the National House Building Council in the normal course of business.

194 19 Financial Instruments The following tables categorise Millgate’s financial assets and liabilities included in the Statement of Financial Position:

Loans and receivables Total ———— ———— £’000 2014 Assets Trade and other receivables ...... 31 31 Cash and cash equivalents ...... 1,455 1,455 ———— ———— 1,486 1,486 ———— ———— 2013 Assets Trade and other receivables ...... 2 2 Cash and cash equivalents ...... 2,298 2,298 ———— ———— 2,300 2,300 ———— ———— Other financial liabilities at amortised cost Total ———— ———— £’000 2014 Liabilities Amounts due to parent undertaking...... 36,858 36,858 Trade and other payables (excluding non-financial liabilities) ...... 10,135 10,135 ———— ———— 46,993 46,993 ———— ———— 2013 Liabilities Bank loan and finance cost ...... 34,750 34,750 Amounts due to parent undertaking...... – – Trade and other payables (excluding non-financial liabilities) ...... 2,462 2,462 ———— ———— 37,212 37,212 ———— ———— 20 Financial Risk Management The main financial risks associated with Millgate have been identified as liquidity risk, interest rate risk, housing market risk and credit risk. The Millgate Directors are responsible for managing these risks and the policies adopted are set out below.

Liquidity risk Millgate finances its operations through a mixture of equity (share capital, reserves and retained earnings) and debt (bank loan facilities and loans from parent undertakings). Millgate manages its liquidity risk by monitoring its existing loans for funding headroom against forecast requirements based on short term and long term cash flow forecasts.

195 Maturity analysis The following table sets out the contractual undiscounted maturities including estimated cash flows of the financial assets and liabilities (excluding financial derivatives) at 30 September 2014:

Less than 1 to 2 2 to 5 Over 1 year years years 5 years Total ———— ———— ———— ———— ———— £’000 2014 Assets Cash and cash equivalents ...... 1,455 – – – 1,455 Trade and other receivables...... 31 – – – 31 ———— ———— ———— ———— ———— 1,486 – – – 1,486 ———— ———— ———— ———— ———— 2014 Liabilities Trade and other payables...... 10,135 – – – 10,135 Amounts due to parent undertaking ...... 36,858 – – – 36,858 ———— ———— ———— ———— ———— 46,993 – – – 46,993 ———— ———— ———— ———— ———— 2013 Assets Cash and cash equivalents ...... 2,298 – – – 2,298 Trade and other receivables...... 2 – – – 2 ———— ———— ———— ———— ———— 2,300 – – – 2,300 ———— ———— ———— ———— ———— 2013 Liabilities Bank loans ...... 7,750 – 27,000 – 34,750 Trade and other payables...... 2,462 – – – 2,462 Amounts due to parent undertaking ...... – – – – – ———— ———— ———— ———— ———— 10,212 – 27,000 – 37,212 ———— ———— ———— ———— ———— Cash and cash equivalents for the year ending 30 September 2013 includes £2,298,000 which is available for offset against loans drawn under the loan facility.

Interest rate risk Interest rate risk reflects Millgate’s exposure to fluctuations in interest rates in the market. This risk arises from loans drawn from the parent company which in turn draws loans under its loan facilities with variable interest rates based upon UK LIBOR. For the year ending 30 September 2014 it is estimated that an increase by 0.5% in interest rates would have decreased profit before tax by £173,000 (2013: £167,000).

196 21 Financial risk management The following table sets out the interest rate risk associated with the financial liabilities: Floating Non-interest Fixed rate rate bearing Total ———— ———— ———— ———— £’000 2014 Liabilities Loans from parent undertakings ...... – 36,858 – 36,858 Trade and other payables ...... – – 10,135 10,135 ———— ———— ———— ———— – 36,858 10,135 46,993 ———— ———— ———— ———— 2013 Liabilities Bank loans...... – 32,452 – 32,452 Trade and other payables ...... – – 2,462 2,462 ———— ———— ———— ———— – 32,452 2,462 34,914 ———— ———— ———— ———— The financial assets (excluding financial derivatives) amounting to £1,486,000 (2013: £2,000) with the exception of cash and cash equivalents amounting to £1,455,000 (2013: £2,000) are all non-interest bearing. Millgate has no exposure to foreign currency risk.

Housing market risk Millgate is affected by price fluctuations in the UK housing market. These are in turn affected by the wider economic conditions such as mortgage availability and associated interest rates, employment and consumer confidence. Whilst these risks are beyond Millgate’s ultimate control, risk is managed by offering a mixed product range across a broad price range attracting customers with substantial equity offsetting their mortgage requirements.

Credit risk The exposure to credit risk is limited solely to the United Kingdom for housebuilding activities and by the fact that Millgate receives cash at the point of legal completion of its sales. Cash and cash equivalents and derivative financial instruments are held with UK clearing banks which are either A or A- rated.

Capital management Millgate’s policies seek to protect returns to shareholders by ensuring it will continue to trade profitably in the foreseeable future. It also aims to optimise its capital structure of debt and equity so as to minimise its cost of capital. It manages its capital with regard to the risks inherent in the business and the sector within which it operates by monitoring its actual cash flows against available headroom bank loan facilities, financial covenants and the cash flow forecasts approved by the Millgate Directors.

For the For the year ended year ended 30 September 30 September 2013 2014 ———— ———— £’000 Total borrowings ...... 34,750 – Less: cash and cash equivalents available for offset...... (2,298) – ———— ———— Net borrowings...... 32,452 – Total equity ...... 30,645 40,275 ———— ———— Total capital...... 63,097 40,275 ———— ————

197 22 Related Party Transactions Millgate leases premises from G Simpson, who resigned as a Millgate director on 3 February 2014. During the year rent of £325,000 (2013: £325,000) was incurred and expensed.

The aggregate remuneration of the Directors of Millgate, who are considered to be key management personnel of Millgate for the years ended 30 September 2013 and 30 September 2014, is set out in Note 4.

In 2015, a close family member of IC Sutcliffe was employed by Millgate, following the normal interview process and is employed at a salary commensurate with someone of their experience performing the role employed for.

23 Parent and Ultimate Parent Undertakings Prior to the acquisition on 3 February 2014, the ultimate controlling party of Millgate was G Simpson by virtue of his controlling interest of 88.2% of the voting rights of Millgate. Following the acquisition by OCM Luxembourg Coppice Midco S.à r.l. on 3 February 2014, Millgate’s immediate parent is Millgate (UK) Holdings Limited, whose ultimate parent company in the United Kingdom is Copthorn Holdings Limited, which prepares publicly available consolidated financial statements. Copthorn Holdings Limited is the parent undertaking of the smallest group of undertakings to consolidate this financial information. The financial statements of both Countryside Properties (UK) Limited and Copthorn Holdings Limited are available from Countryside House, The Drive, Great Warley, Brentwood, Essex, United Kingdom, CM13 3AT.

The ultimate parent company of Copthorn Holdings Limited is OCM Luxembourg Coppice Topco S.à r.l., an entity which is incorporated in Luxembourg. OCM Luxembourg Coppice Topco S.à r.l. is the parent undertaking of the largest group of undertakings to consolidate this financial information.

OCM Luxembourg Coppice Topco S.à r.l. is owned by certain investment funds managed and advised by Oaktree Capital Management, L.P. a global investment manager headquartered in Los Angeles, USA. By virtue of its ownership of Oaktree Capital Management, L.P., the ultimate parent and controlling entity is considered to be Oaktree Capital Group LLC, a USA based entity listed on the New York Stock Exchange.

24 Post Balance Sheet Events No significant post balance sheet events have occurred.

25 Changes in GAAP and accounting policies to IFRS This financial information for the years ended 30 September 2013 and 2014 is the first published financial information of Millgate Developments Limited prepared in accordance with IFRS. The previously published financial statements for the year ended 30 June 2013 and the 15 month period ended 30 September 2014 have been prepared in accordance with FRS 101.

Some of the IFRS presentation and disclosure requirements differ from FRS 101 and consequently certain of the notes to this Historical Financial Information have been amended to reflect the IFRS requirements. As a result of the changes in year end and period length, it is only the Statement of Financial Position as of 30 September 2014, included in this financial information, that has previously been published in accordance with FRS 101. There were no recognition or measurement changes that impacted the Statement of Financial Position as of 30 September 2014 as a result of the change from FRS 101 to IFRS and as such no reconciliation between FRS 101 and IFRS has been included within this financial information.

198 PART XV

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Section A: Unaudited pro forma financial information The unaudited pro forma statement of net assets for the Group set out below has been prepared on the basis set out in the notes below to illustrate the effect of the Global Offer and the Pre-IPO Reorganisation on the net assets of the Group, had the Global Offer and the Pre-IPO Reorganisation taken place on 30 September 2015.

The unaudited pro forma information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and does not, therefore, represent the Group’s actual financial position or results.

The unaudited pro forma information does not constitute financial statements within the meaning of Section 434 of the Companies Act 2006. Shareholders should read the whole of this document and not rely solely on the summarised financial information contained in this Part XV:“Unaudited Pro Forma Financial Information”. PricewaterhouseCoopers LLP’s report on the unaudited pro forma statement of net assets is set out on Section B of this Part XV:“Unaudited Pro Forma Financial Information”.

The unaudited pro forma statement of net assets has been prepared on a basis consistent with the IFRS accounting policies of the Group and on the basis set out in the notes below, and in accordance with Annex II to the Prospectus Directive Regulation. It should be read in conjunction with the notes below.

The unaudited pro forma statement of net assets is compiled from the consolidated balance sheet of the Group as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information”. There is no financial information for the Company, which was incorporated on 18 November 2015 and accordingly, the Company is excluded from the unaudited pro forma statement of net assets.

In addition, the unaudited pro forma financial information does not purport to represent what the Group’s financial position and results of operations actually would have been if the Global Offer and the Pre-IPO Reorganisation had been completed on the dates indicated nor do they purport to represent the results of operations for any future period or the financial condition at any future date.

Shareholders should read the whole of this Prospectus and not rely solely on the summarised financial information contained in this Part XV: “Unaudited Pro Forma Financial Information”.

199 Net proceeds of the Global Group Offer as of receivable Repayment Pre-IPO Unaudited 30 September by the of Re- Pro Forma 2015 Company borrowings organisation Total –––––––– –––––––– –––––––– –––––––– –––––––– £’000 £’000 £’000 £’000 (Note 1) (Note 2) (Note 3) (Note 4) Assets Non-current assets Intangible assets ...... 59,453 – – – 59,453 Property, plant and equipment...... 2,406 – – – 2,406 Investment in joint ventures ...... 50,097 – – – 50,097 Investment in associate...... 4,164 – – – 4,164 Available for sale financial assets ...... 10,535 – – – 10,535 Derivative financial instruments...... 6 – – – 6 Deferred tax assets...... 5,606 – – – 5,606 Trade and other receivables...... 15,349 – – – 15,349 –––––––– –––––––– –––––––– –––––––– –––––––– Total non-current assets...... 147,616 – – – 147,616 –––––––– –––––––– –––––––– –––––––– –––––––– Current assets Inventories ...... 439,542 – – – 439,542 Trade and other receivables...... 105,450 – – – 105,450 Cash and cash equivalents...... 354 114,800 (59,519) – 55,635 –––––––– –––––––– –––––––– –––––––– –––––––– Total current assets...... 545,346 114,800 (59,519) – 600,627 –––––––– –––––––– –––––––– –––––––– –––––––– Total assets ...... –––––––– 692,962 –––––––– 114,800 –––––––– (59,519) –––––––– – –––––––– 748,243 Current liabilities Trade and other payables...... (181,140) 1,200 – – (179,940) Current income tax liabilities ...... (4,043) – – – (4,043) Provisions ...... (1,144) – – – (1,144) –––––––– –––––––– –––––––– –––––––– –––––––– Total current liabilities...... (186,327) 1,200 – – (185,127) Non-current liabilities Borrowings ...... (343,361) – 59,519 287,329 3,487 Trade and other payables...... (148,930) – – 87,875 (61,055) Provisions ...... (1,110) – – – (1,110) –––––––– –––––––– –––––––– –––––––– –––––––– Total non-current liabilities ...... (493,401) – 59,519 375,204 (58,678) Total liabilities...... (679,728) 1,200 59,519 375,204 (243,805) –––––––– –––––––– –––––––– –––––––– –––––––– Net (liabilities)/assets ...... –––––––– 13,234 –––––––– 116,000 –––––––– 0 –––––––– 375,204 –––––––– 504,438 Notes: (1) The financial information has been extracted, without material adjustment, from the consolidated financial information of the Operating Group as of 30 September 2015 as set out in Section B of Part XIV: “Historical Financial Information”. (2) This column reflects the net impact of the receipt of net IPO proceeds, being the gross proceeds receivable by the Company of approximately £130,000,000 less estimated outstanding fees and expenses of £15,200,000 payable by the Company. As of 30 September 2015, the Group had already paid an additional £500,000 of fees and expenses in relation to the Global Offer and had accrued £1,200,000 of the £15,200,000 within Trade and other payables. The total estimated fees and expenses expenses payable by the Company in connection with the Global Offer is £15,700,000. (3) This column reflects the intention to repay £59,519,000 of the outstanding Group financial indebtedness as of 30 September 2015, representing the amount of bank loans outstanding less the amount of cash and cash equivalents available for offset as at 30 September 2015. This amount does not reflect movements in these balances subsequent to 30 September 2015. The actual

200 amount of borrowings the Company intends to repay, using net proceeds from the Global Offer received by it, is approximately £64,000,000 as set out in Part VII: “Use of Proceeds and Dividend Policy”. (4) This column reflects the net effect of the following adjustments relating to the Pre-IPO Reorganisation as set out below: (a) The Company was incorporated on 18 November 2015 and, in connection with the Global Offer, the Pre-IPO Reorganisation is due to take place shortly prior to Admission to result in the Company becoming the ultimate holding company of the Group and OCM Luxembourg Coppice Midco S.à r.l becoming the Company’s direct subsidiary. On incorporation, the share capital of the Company was £1, consisting of 1 ordinary share with a £1 nominal value. On 19 November 2015, the Company issued a further 9 ordinary shares and 50,000 redeemable preference shares, each of £1. Immediately prior to the publication of this Prospectus, the Company had in issue 10 ordinary shares of £1 each and 50,000 redeemable preference shares of £1 each. In connection with the Pre-IPO Reorganisation, the redeemable preference shares will be redeemable either on, or immediately after, Admission. (b) The insertion of the Company as a new holding company constitutes a group reorganisation and will be accounted for using merger accounting principles. The Pre-IPO Reorganisation will not be effective until shortly prior to Admission and the consolidated financial statements will be presented as if the Company had always been part of the same group. (c) As part of the Pre-IPO Reorganisation, the balance of the mandatory redeemable preference shares as of 30 September 2015 of £287,329,000 and the associated accrued return of £87,875,000 as of 30 September 2015 will be transferred from the current holders (being the Principal Shareholder and certain members of the Group’s management) to the Company in exchange for ordinary shares in the Company. These adjustments do not take into account any movements in these balances subsequent to 30 September 2015. (d) Immediately following the reorganisation it is anticipated that the Operating Company will transfer to the Company the entire issued share capital of its direct subsidiary OCM Luxembourg Coppice Holdco S.à r.l. Following this transfer it is intended that the Operating Company will be sidelined from the Group structure and placed into voluntary solvent liquidation, with the liquidation process anticipated to be completed following Admission. (5) The unaudited pro forma borrowings balance of £3,487,000 relates to unamortised bank loan and arrangement fees in respect of the Group’s existing finance facilities. (6) No adjustment has been made to take account of trading results or other transactions undertaken by the Operating Group or the Company since 30 September 2015.

201

Section B: Accountants Report on the unaudited pro forma financial information The Directors Countryside Properties plc Countryside House The Drive, Brentwood Essex CM13 3AT J.P. Morgan Securities plc 25 Bank Street Canary Wharf London E14 5JP

1 February 2016

Dear Sirs

Countryside Properties plc (the “Company”) We report on the unaudited pro forma statement of net assets (the “Pro Forma Financial Information”) set out in Section A of Part XV of the Company’s prospectus dated 1 February 2016 (the “Prospectus”) which has been prepared on the basis described in the notes to the Pro Forma Financial Information, for illustrative purposes only, to provide information about how the proposed Global Offer and the Pre-IPO Reorganisation might have affected the financial information presented on the basis of the accounting policies to be adopted by the Company in preparing the financial statements for the period ended 30 September 2016. This report is required by item 7 of Annex II to the PD Regulation and is given for the purpose of complying with that PD Regulation and for no other purpose.

Responsibilities It is the responsibility of the directors of the Company to prepare the Pro Forma Financial Information in accordance with Annex II of the PD Regulation.

It is our responsibility to form an opinion, as required by item 7 of Annex II to the PD Regulation as to the proper compilation of the Pro Forma Financial Information and to report our opinion to you.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting to its inclusion in the Prospectus.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report,

PricewaterhouseCoopers LLP, 1 Embankment Place, London, WC2N 6RH T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority for designated investment business.

202 which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the directors of the Company.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing standards or other standards and practices generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion In our opinion:

(i) the Pro Forma Financial Information has been properly compiled on the basis stated; and

(ii) such basis is consistent with the accounting policies of the Company.

Declaration For the purposes of Prospectus Rule 5.5.3 R(2)(f), we are responsible for this report as part of the Prospectus and we declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with Item 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

203 PART XVI

TAXATION

The comments in this Part XVI: “Taxation” are of a general nature and are not intended to be exhaustive. Any prospective investors who are in any doubt about their tax position should consult their own professional advisers immediately.

Section A: United Kingdom Taxation The following statements are intended only as a general guide to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of acquiring, holding or disposing of Shares. They are based on current UK tax legislation and what is understood to be the current published practice of HMRC (which is not binding on HMRC) as of the date of this Prospectus, both of which may change at any time, possibly with retroactive effect.

These statements apply only to Shareholders who are resident (and, in the case of individuals, domiciled) for tax purposes in (and only in) the UK and to whom “split year” tax treatment does not apply (except insofar as express reference is made to the treatment of non-UK residents), who hold their Shares as an investment (other than under an individual savings account or a Self Invested Personal Pension) and who are the absolute beneficial and legal owners of both the Shares and any dividends paid on them.

The tax position of certain categories of Shareholders who are subject to special rules (such as persons acquiring their Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes or those for whom the Shares are employment related securities) is not considered. Prospective investors who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK are strongly recommended to consult their own professional advisers.

1. Taxation of dividends The Company is not required to withhold tax when paying a dividend. Liability to tax on dividends paid by the Company will depend upon the individual circumstances of a Shareholder.

UK resident individual Shareholders An individual Shareholder who is resident for tax purposes in the UK and who receives a dividend from the Company will generally be entitled to a tax credit equal to one-ninth of the amount of the dividend received, which is equivalent to 10 per cent. of the aggregate of the dividend received and the tax credit (the “gross dividend”), and will be subject to income tax on the gross dividend. An individual UK resident Shareholder who would otherwise be subject to income tax on the gross dividend at the basic rate only will be liable to tax on the gross dividend at the rate of 10 per cent. (2015/16), so that the tax credit will satisfy the income tax liability of such a Shareholder in full.

An individual UK resident Shareholder who is subject to income tax on the gross dividend at the higher rate will be liable to income tax on the gross dividend at the rate of 32.5 per cent. (2015/16) to the extent that such sum, when treated as the top slice of that Shareholder’s income, exceeds the threshold for higher rate income tax but falls below the threshold for the additional rate of income tax. After taking into account the 10 per cent. tax credit, a higher rate taxpayer will therefore be liable to additional income tax of 22.5 per cent. of the gross dividend, equal to 25 per cent. of the cash dividend.

An individual UK resident Shareholder who is subject to income tax at the additional rate will be subject to tax on the gross dividend at 37.5 per cent. (2015/16) to the extent that, when treated as the top slice of that Shareholder’s income, the gross dividend exceeds the threshold for the additional rate. After taking into account the 10 per cent. tax credit, an additional rate taxpayer will be liable to additional income tax of 27.5 per cent. of the gross dividend, equal to 30.6 per cent. of the net dividend.

204 A UK resident individual Shareholder who is not liable to income tax in respect of the gross dividend (or whose liability is less than the tax credit) will not be entitled to claim repayment of the tax credit (or part thereof) from HMRC.

The UK Government has announced reforms to the taxation of dividends including clauses of the Draft Finance Bill 2016 implementing these changes that were published in December 2015. If the clauses are enacted in their current form, then from 6 April 2016 the 10 per cent. tax credit on dividends will be abolished. A UK-resident individual shareholder in receipt of a dividend from the Company on or after 6 April 2016 will instead receive a new annual £5,000 tax free dividend allowance. Dividends above this level will be taxed at 7.5 per cent. (basic rate), 32.5 per cent. (higher rate), and 38.1 per cent. (additional rate). The above statements are based on the information that has been made publically available to date in relation to the announced changes.

UK resident corporate Shareholders Tax resident corporate Shareholders will be subject to corporation tax on dividends paid by the Company, unless (subject to special rules for such Shareholders that qualify as small companies) the dividends fall within an exempt class and unless other conditions are met. It is likely that most dividends paid on the Shares to UK resident corporate Shareholders would fall within one or more exempt class. However, it should be noted that the exemptions are not comprehensive and are subject to anti-avoidance rules. Shareholders within the charge to corporation tax should consult their own professional advisers.

UK resident exempt Shareholders UK resident Shareholders who are not liable to UK tax on dividends, including pension funds and charities, are not entitled to claim repayment of the tax credit.

Non-UK resident Shareholders Shareholders who are resident outside the UK for tax purposes will not generally be able to claim repayment of any part of the tax credit attaching to dividends received from the Company, although this will depend on the existence and terms of any double taxation convention between the UK and the country in which such Shareholder is resident. A Shareholder resident outside the UK may also be subject to taxation on dividend income under local law. A Shareholder who is resident outside the UK for tax purposes should consult his own tax adviser concerning his tax position on dividends received from the Company.

2. Taxation of capital gains A disposal or deemed disposal of Shares by a Shareholder who is resident in the UK for tax purposes may, depending upon the Shareholder’s circumstances and subject to any available exemption or relief (such as the annual exempt amount for individuals and indexation for corporate shareholders), give rise to a chargeable gain or an allowable loss for the purposes of UK taxation of capital gains.

Shareholders who are not resident in the UK will not generally be subject to UK taxation of capital gains on the disposal or deemed disposal of Shares unless they are carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) in connection with which the Shares are used, held or acquired.

An individual Shareholder who has ceased to be resident for tax purposes in the UK or is treated as resident outside the UK for the purposes of a double tax treaty (a “Treaty non-resident”) for a period and who disposes of all or part of his Shares during that period may be liable to capital gains tax on his return to the UK if the temporary non-residence rules are met, subject to any available exemptions or reliefs.

3. Stamp duty and Stamp Duty Reserve Tax (“SDRT”) The Offer The stamp duty and SDRT treatment of the subscription or purchase of Shares under the Global Offer will be as follows:

205 (a) The issue of New Shares by the Company direct to persons acquiring Shares pursuant to the Global Offer will not generally give rise to stamp duty or SDRT.

(b) The transfer of, or agreement to transfer, Sale Shares sold by the Selling Shareholders under the Global Offer will generally give rise to a liability to stamp duty and/or SDRT at a rate of 0.5 per cent. of the Offer Price (in the case of stamp duty, rounded up to the nearest multiple of £5). The Selling Shareholders have agreed to meet such liability. An exemption from stamp duty is available on an instrument transferring Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. The Selling Shareholders have not agreed to bear any liability to stamp duty or SDRT at the 1.5 per cent rate that may arise in connection with the Global Offer as described under “Depositary Receipt Systems and Clearance Services” below.

Subsequent Transfers Stamp duty at the rate of 0.5 per cent. (rounded up to the next multiple of £5) of the amount or value of the consideration given is generally payable on an instrument transferring Shares. As noted above, an exemption from stamp duty is available on an instrument transferring Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. A charge to SDRT will arise on an unconditional agreement to transfer Shares (at the rate of 0.5 per cent. of the amount or value of the consideration payable). However, if within six years of the date of the agreement being made or, in the case of a conditional contract, the agreement becoming unconditional, an instrument of transfer is executed pursuant to the agreement, and stamp duty is paid on that instrument, or the instrument is otherwise exempt, any SDRT already paid will be refunded (generally, but not necessarily, with interest) provided that a claim for repayment is made, and any outstanding liability to SDRT will be cancelled. The liability to pay stamp duty or SDRT is generally satisfied by the purchaser or transferee.

Shares held through CREST Paperless transfers of Shares within CREST are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration. CREST is obliged to collect SDRT on relevant transactions settled within the system. The charge is generally borne by the purchaser. Under the CREST system, no stamp duty or SDRT will arise on a transfer of Shares into the system unless such a transfer is made for a consideration in money or money’s worth, in which case a liability to SDRT (usually at a rate of 0.5 per cent.) will arise.

Depository Receipt Systems and Clearance Services Special rules apply where Shares are issued or transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depositary receipts within section 67 or section 93 of the Finance Act 1986 or a person providing a clearance service within section 70 or section 96 of the Finance Act 1986, under which SDRT or stamp duty may be charged at a rate of 1.5 per cent. Following litigation, HMRC has confirmed that it will no longer seek to apply the 1.5 per cent. SDRT charge on the issue of shares into a clearance service or depositary receipt arrangement, on the basis that the charge is not compatible with EU law. HMRC’s view is that the 1.5 per cent. SDRT or stamp duty charge will continue to apply to transfers of shares into a clearance service or depositary receipt arrangement unless they are an integral part of an issue of share capital. This view is currently being challenged in further litigation. Accordingly, specific professional advice should be sought before incurring the cost of the 1.5 per cent. stamp duty or SDRT charge in any circumstances.

The statements in this section apply to any holders of Shares irrespective of their residence, summarise the current position and are intended as a general guide only. Special rules apply to agreements made by, amongst others, intermediaries.

206 Inheritance Tax The Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift or settlement of such assets by, or on the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax even if the holder is neither domiciled in the UK nor deemed to be domiciled there under certain rules relating to long residence or previous domicile. Generally, inheritance tax is not chargeable on gifts to individuals if the transfer is made more than seven complete years prior to death of the donor. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit.

Special rules also apply to close companies and to trustees of settlements who hold Shares, bringing them within the charge to inheritance tax. Shareholders should consult an appropriate tax adviser if they make a gift or transfer at less than market value or intend to hold any Shares through such a company or trust arrangement. Shareholders should also seek professional advice in a situation where there is potential for a double charge of inheritance tax and an equivalent tax in another country or if they are in any doubt about their inheritance tax position.

Section B: United States

Certain U.S. Federal Income Tax Considerations

1. General The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership and disposition of Shares by a U.S. Holder (as defined below). This summary deals only with initial purchasers of Shares that are U.S. Holders that will hold the Shares as capital assets. The discussion does not cover all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership or disposition of Shares by particular investors (including consequences under the alternative minimum tax or net investment income tax), and does not address state, local, non-U.S. or other tax laws. This summary also does not address tax considerations applicable to investors that own (directly, indirectly or by attribution) 5 per cent. or more of the voting stock of the Company, nor does this summary discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance companies, individual retirement accounts and other tax-deferred accounts, tax-exempt organisations, dealers in securities or currencies, investors that will hold the Shares as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes, persons that have ceased to be U.S. citizens or lawful permanent residents of the United States, investors holding the Shares in connection with a trade or business conducted outside of the United States, U.S. citizens or lawful permanent residents living abroad or investors whose functional currency is not the U.S. dollar).

As used herein, the term “U.S. Holder” means a beneficial owner of Shares that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organised under the laws of the United States or any State thereof, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has validly elected to be treated as a domestic trust for U.S. federal income tax purposes.

The U.S. federal income tax treatment of a partner in an entity treated as a partnership for U.S. federal income tax purposes that holds Shares will depend on the status of the partner and the activities of the partnership. Prospective purchasers that are entities treated as partnerships for U.S. federal income tax purposes should consult their tax advisers concerning the U.S. federal income tax consequences to them and their partners of the acquisition, ownership and disposition Shares by the partnership.

Except as otherwise noted, the summary assumes that the Company is not a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes, which the Company believes to be the case. The

207 Company’s possible status as a PFIC must be determined annually and therefore may be subject to change. If the Company were to be a PFIC in any year, materially adverse consequences could result for U.S. Holders.

This summary is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published rulings and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect.

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED TO BE RELIED UPON BY PURCHASERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE U.S. INTERNAL REVENUE CODE. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING, AND DISPOSING OF THE SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

2. Dividends General. Distributions paid by the Company out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. Holder as dividend income, and will not be eligible for the dividends received deduction allowed to corporations. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s basis in the Shares and thereafter as capital gain. However, the Company does not maintain calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders should therefore assume that any distribution by the Company with respect to Shares will be reported as ordinary dividend income. U.S. Holders should consult their own tax advisers with respect to the appropriate U.S. federal income tax treatment of any distribution received from the Company.

Dividends paid by the Company generally will be taxable to a non-corporate U.S. Holder at the reduced rate normally applicable to long-term capital gains, provided the Company qualifies for the benefits of the income tax treaty between the United States and the United Kingdom, which the Company believes to be the case, and certain other requirements are met. A U.S. Holder will not be able to claim the reduced rate on dividends received from the Company if the Company is treated as a PFIC in the taxable year in which the dividends are received or in the preceding taxable year. See “—Passive Foreign Investment Company Considerations” below.

Prospective purchasers should consult their tax advisers concerning the applicability of the foreign tax credit and source of income rules to dividends on the Shares.

Foreign Currency Dividends. Dividends paid in pounds will be included in income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the dividends are received by the U.S. Holder, regardless of whether the pounds are converted into U.S. dollars at that time. If dividends received in pounds are converted into U.S. dollars on the day they are received, the U.S. Holder generally will not be required to recognise foreign currency gain or loss in respect of the dividend income.

3. Sale or other Disposition Upon a sale or other disposition of Shares, a U.S. Holder generally will recognise capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realised on the sale or other disposition and the U.S. Holder’s adjusted tax basis in the Shares. This capital gain or loss will be long- term capital gain or loss if the U.S. Holder’s holding period in the Shares exceeds one year. Net long-term capital gain of certain non-corporate U.S. Holders generally is subject to preferential rates of tax. The deductibility of capital losses is subject to limitations. However, regardless of a U.S. Holder’s actual holding period, any loss may be long-term capital loss to the extent the U.S. Holder receives a dividend that qualifies

208 for the reduced rate described above under “Dividends—General”, and exceeds 10 per cent. of the U.S. Holder’s basis in its Shares.

A U.S. Holder’s tax basis in a Share generally will be its U.S. dollar cost. The U.S. dollar cost of a Share purchased with pounds will generally be the U.S. dollar value of the purchase price on the date of purchase, or the settlement date for the purchase, in the case of Shares traded on an established securities market, within the meaning of the applicable Treasury Regulations, that are purchased by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects). Such an election by an accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without the consent of the IRS. The amount realised on a sale or other disposition of Shares for an amount in pounds generally will be the U.S. dollar value of this amount on the date of sale or disposition. On the settlement date, the U.S. Holder generally will recognise U.S. source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the U.S. dollar value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of Shares traded on an established securities market that are sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time.

4. Disposition of Pounds Pounds received on the sale or other disposition of a Share will have a tax basis equal to the U.S. dollar value of the pounds on the settlement date. Pounds that are purchased generally will have a tax basis equal to the U.S. dollar value of the pounds on the date of purchase. Any gain or loss recognised on a sale or other disposition of pounds (including their use to purchase Shares or upon exchange for U.S. dollars) will be U.S. source ordinary income or loss.

5. Passive Foreign Investment Company Considerations The Company does not believe that it should be treated as, and does not expect to become (including, for the avoidance of doubt, as a result of the receipt of proceeds from this offering), a PFIC for U.S. federal income tax purposes but the Company’s possible status as a PFIC must be determined annually and therefore may be subject to change. If the Company were to be treated as a PFIC, U.S. Holders of Shares would be required (i) to pay a special U.S. addition to tax on certain distributions and gains on sale, (ii) to pay tax on any gain from the sale of Shares at ordinary income (rather than capital gains) rates in addition to paying the special addition to tax on this gain, and (iii) to comply with additional reporting obligations. Additionally, dividends paid by the Company would not be eligible for the reduced rate of tax described above under “Dividends— General”. Prospective purchasers should consult their tax advisers regarding the potential application of the PFIC regime.

6. Backup Withholding and Information Reporting Payments of dividends and other proceeds with respect to Shares, by a U.S. paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to comply with applicable certification requirements. Certain U.S. Holders are not subject to backup withholding. U.S. Holders should consult their tax advisers about these rules and any other reporting obligations that may apply to the ownership or disposition of Shares, including requirements related to the holding of certain foreign financial assets.

209 PART XVII

THE GLOBAL OFFER

1. Summary of the Global Offer The Global Offer comprises an offer of between 47,272,727 and 57,777,778 New Shares and between 54,722,222 and 290,227,273 Sale Shares (with an overall Offer Size of between 112,500,000 and 337,500,000 Shares) in each case at an Offer Price of between 225 pence and 275 pence per Share.

The Company intends to issue a sufficient number of New Shares in the Global Offer so as to raise gross proceeds of approximately £130 million. The number of New Shares to be issued pursuant to the Global Offer will range from 47,272,727 New Shares (if the Offer Price is set at the top of the Offer Price Range) to 57,777,778 New Shares (if the Offer Price is set at the bottom of the Offer Price Range). It is expected that the number of Sale Shares to be sold pursuant to the Global Offer will range from 54,722,222 Sale Shares to 290,227,273 Sale Shares. The Sale Share Size Range and the Offer Size Range have been determined to take into account, at a minimum, the New Share Size Range and the minimum free float requirements of the UK Listing Authority. However, the number of New Shares to be issued may be set outside the New Share Offer Size Range and/or the number of Sale Shares to be sold may be set outside the Sale Share Offer Size Range and/or the overall Offer Size may be set outside the Offer Size Range (subject, when taken together, to the minimum free float requirements agreed by the Company with the UK Listing Authority). See paragraph 14 of this Part XVII: “The Global Offer—Withdrawal Rights” for the steps the Company will take should the Offer Size be set outside the Offer Size Range, the New Share Offer Size be set below the New Share Offer Size Range and/or the Sale Share Offer Size be set outside the Sale Share Offer Size Range. The actual number of New Shares to be issued by the Company and Sale Shares to be sold by the Selling Shareholders in the Global Offer will only be determined at the time the Offer Price is determined and could be higher or lower than these numbers. In addition, a further number of Ordinary Shares (equal to 15 per cent. of the Offer Size) is being made available by the Principal Shareholder pursuant to the Over-allotment Option described below. The Company will not receive any of the proceeds from the sale of the Sale Shares or the Over-allotment Shares (if any), all of which will be paid to the Selling Shareholders.

The Global Offer is being made by way of:

(a) the Institutional Offer: (i) to certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S under the Securities Act; and (ii) to persons reasonably believed to be QIBs in the United States in reliance on Rule 144A under the Securities Act or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; and

(b) the Intermediaries Offer to the Intermediaries for onward distribution to retail investors located in the United Kingdom, the Channel Islands and the Isle of Man.

Under the Global Offer, all of the Shares will be issued or sold, payable in full, at the Offer Price. Certain restrictions that apply to the distribution of this Prospectus and the Shares being issued and sold under the Global Offer in jurisdictions outside the United Kingdom are described in paragraph 15 of this Part XVII: “The Global Offer—Selling and transfer restrictions”.

When admitted to trading, the Ordinary Shares will be registered with ISIN GB00BYPHNG03, SEDOL number BYPHNG0 and it is expected that the Ordinary Shares will trade under the symbol “CSP”. The rights attaching to the Ordinary Shares will be uniform in all respects and they will form a single class for all purposes.

Immediately following Admission, it is expected that not less than 25 per cent. of the Company’s issued ordinary share capital will be held in public hands (within the meaning of Listing Rule 6.1.19).

The terms of the Global Offer are subject to change, and any terms to be varied shall be agreed between the Company, the Selling Shareholders and the Joint Global Co-ordinators (on behalf of the Underwriters).

210 2. Reasons for the Offer The Company expects to receive net proceeds of approximately £114 million (after deducting estimated underwriting commissions and fees and expenses of the Global Offer (including the maximum amount of discretionary commissions and VAT) payable by the Company, which are expected to be approximately £16 million (assuming the Offer Price is set at the mid-point of the Offer Price Range)) from the issue of New Shares in the Global Offer.

The net proceeds receivable by the Company from the Global Offer are intended to be used as follows:

(a) approximately £64 million to reduce the Group’s financial indebtedness by repaying amounts drawn on its revolving credit facilities as soon as practicable after Admission, thereby providing the Group with a stronger balance sheet to support and pursue its growth strategy (see Part XII: “Operating and Financial Review—Financial liabilities and contractual obligations”); and

(b) approximately £50 million to accelerate growth in the development of the Group’s sites at Acton, Beaulieu, Hazel End and Rayleigh, through investment in additional phases over an approximate two- year period following Admission.

The Board believes that the Global Offer and Admission will also position the Group for its next stage of development, including by further raising the profile of the Group, assisting in retaining and incentivising employees and providing it with a structure for future growth.

In addition, the Global Offer and Admission will provide the Selling Shareholders with a partial realisation of their investment in the Company. The Selling Shareholders will together receive gross proceeds of approximately £431 million from the sale of the Sale Shares in the Global Offer, assuming the Offer Price is set at the mid-point of the Offer Price Range and the Sale Share Offer Size is set at the mid-point of the Sale Share Offer Size Range and excluding any proceeds receivable by the Over-allotment Shareholder pursuant to any exercise of the Over-allotment Option. The Company will not receive any proceeds from the sale of Sale Shares or Over-allotment Shares by the Selling Shareholders.

3. Book-building, Offer Price, Offer Size and allocation The Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be determined by the Company and the Principal Shareholder in agreement with the Joint Global Co-ordinators and are expected to be announced on or about 12 February 2016. The Pricing Statement, which will contain, among other things, the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size, will be published in printed form and available free of charge at the Company’s registered office at Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom and (subject to certain restrictions) on the Company’s website at www.countryside-properties.com.

It is currently expected that the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be within the Offer Price Range, the Offer Size Range, the New Share Offer Size Range and the Sale Share Offer Size Range, respectively, but these ranges are indicative only and the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size may be set within, above or below the Offer Price Range, the Offer Size Range, the New Share Offer Size Range and the Sale Share Offer Size Range, respectively. A number of factors will be considered in deciding the Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size, including the level and the nature of the demand for Shares in the book-building process, the level of demand in the Intermediaries Offer, prevailing market conditions, the minimum free float requirements of the UK Listing Authority and the objectives of encouraging the development of an orderly and liquid after-market in the Ordinary Shares. The Offer Price, the Offer Size, the New Share Offer Size and the Sale Share Offer Size will be established at a level determined in accordance with these arrangements, taking into account indications of interest received (whether before or after the times and/or dates stated) from persons (including market-makers and fund managers) connected with the Joint Global Co-ordinators, in the case of the Institutional Offer, and the Intermediaries, in the case of the Intermediaries Offer. Accordingly, the Offer Price will not necessarily be the highest price at which all of the Shares subject to the Global Offer could be issued or sold.

211 Unless required to do so by law or regulation, the Company does not envisage publishing any supplementary prospectus or pricing statement until announcement of the Offer Price, Offer Size, New Share Offer Size and Sale Share Offer Size. If the Offer Price is set above the Offer Price Range, the Offer Size is set above or below the Offer Size Range, the New Share Offer Size is set below the New Share Offer Size Range and/or the Sale Share Offer Size is set above or below the Sale Share Offer Size Range, then an announcement would be made via a Regulatory Information Service and prospective investors would have a statutory right to withdraw their offer to purchase Shares pursuant to section 87Q of the FSMA. The arrangements for withdrawing offers to subscribe for or purchase Shares would be made clear in the announcement. In such circumstances, the Pricing Statement would not be published until the period for exercising such withdrawal rights has ended. Therefore, the expected date of publication of the Pricing Statement would be extended. The arrangements for withdrawing offers to subscribe for or purchase Shares would be made clear in the announcement. Full details of statutory rights to withdraw an offer to subscribe for or purchase Shares pursuant to section 87Q of FSMA are set out in paragraph 14 of this Part XVII : “The Global Offer— Withdrawal Rights”.

The Underwriters will solicit from institutional prospective investors indications of interest in acquiring Shares under the Institutional Offer. Prospective institutional investors will be required to specify the number of Shares which they would be prepared to acquire either at specified prices or at the Offer Price (as finally determined).

Applications are expected to be sought by the Intermediaries from their selected retail investor clients under the Intermediaries Offer for Shares on the basis that the exact number of Shares the subject of such applications will vary depending on the final Offer Price. A global application will then be made by the Intermediaries on behalf of their clients, through the Intermediaries Offer Co-ordinator, and this demand will be taken into account by the Company, the Selling Shareholders and the Joint Global Co-ordinators alongside indications of interest in the Institutional Offer in conducting the book-building in respect of the Global Offer.

The allocation of Shares among prospective investors in each of the Institutional Offer and the Intermediaries Offer will be determined by the Company and the Principal Shareholder in consultation with the Joint Global Co-ordinators. A number of factors will be considered by the Company and the Principal Shareholder in determining the basis of allocation between the Institutional Offer and the Intermediaries Offer, including the level and nature of demand for Shares in the Global Offer and the objective of encouraging an orderly and liquid after-market in the Shares. If there is excess demand for Shares, allocations may be scaled down and applicants may be allocated Shares having an aggregate value which is less than the sum applied for. The Company and the Principal Shareholder may allocate such Shares at their discretion (subject to consultation with the Joint Global Co-ordinators) and there is no obligation for such Shares to be allocated proportionally. All Shares subscribed for or sold pursuant to the Global Offer will be issued or sold, payable in full, at the Offer Price. No commissions, fees, expenses or taxes will be charged to investors by the Company or the Selling Shareholders under the Global Offer. Liability for UK stamp duty and SDRT is described in Part XVI: “Taxation”.

The rights attaching to the Shares will be uniform in all respects with all other Ordinary Shares and the Shares will form a single class for all purposes with the other Ordinary Shares. The Shares to be allocated under the Global Offer have been underwritten, subject to certain conditions, by the Underwriters, as described in paragraph 12 of this Part XVII: “The Global Offer—Underwriting arrangements” and in paragraph 13.1 of Part XVIII: “Additional Information—Material contracts—Underwriting Agreement”.

Upon accepting any allocation, prospective investors will be contractually committed to acquire the number of Shares allocated to them at the Offer Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate, or otherwise withdraw from, such commitment. Dealing may not begin before notification is made.

Completion of the Global Offer will be subject to, inter alia, the determination of the Offer Price, Offer Size, New Share Offer Size and Sale Share Offer Size. It will also be subject to the satisfaction of conditions contained in the Underwriting Agreement, including Admission occurring and the Underwriting Agreement not having been terminated. The Global Offer cannot be terminated after Admission.

212 The Company, the Selling Shareholders and the Underwriters expressly reserve the right to determine at any time prior to the publication of the Pricing Statement not to proceed with the Global Offer. If such right is exercised, the Global Offer will lapse and any monies received in respect of the Global Offer will be returned to investors without interest.

4. The Institutional Offer Under the Institutional Offer, Shares will be offered: (i) to certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S under the Securities Act; and (ii) to persons reasonably believed to be QIBs in the United States in reliance on Rule 144A under the Securities Act or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Certain restrictions that apply to the distribution of this Prospectus and the offer and sale of the Shares in jurisdictions outside the United Kingdom are described in paragraph 15 of this Part XVII: “The Global Offer—Selling and transfer restrictions”.

The latest time and date for indications of interest in acquiring Shares under the Institutional Offer is set out in Part V: “Expected Timetable of Principal Events” but that time may be extended at the discretion of the Company and the Selling Shareholders (with the agreement of the Joint Global Co-ordinators).

Prospective investors in the Institutional Offer will be advised verbally or by electronic mail of their allocation as soon as practicable following pricing and allocation. Upon acceptance of any allocation, prospective investors in the Institutional Offer will be committed to acquire the number of Shares allocated to them at the Offer Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate, or otherwise withdraw from, such commitment.

5. The Intermediaries Offer Members of the general public will not be able to apply directly to the Company or the Selling Shareholders for Shares in the Global Offer. They may, however, be eligible to apply for Shares through the Intermediaries by following their relevant application procedures, by no later than 4.00 p.m. on 10 February 2016. Underlying applicants are not allowed to make more than one application under the Intermediaries Offer (whether on their own behalf or through other means, including, but without limitation, through a trust or pension plan).

Only the Intermediaries’ retail investor clients in the United Kingdom, the Channel Islands and the Isle of Man are eligible to participate in the Intermediaries Offer. No Shares allocated under the Intermediaries Offer will be registered in the name of any person whose registered address is outside the United Kingdom, the Channel Islands and the Isle of Man except in certain limited circumstances with the consent of the Joint Global Co-ordinators. For the avoidance of doubt, applicants in the United States will not be able to participate in the Intermediaries Offer.

An application for Shares in the Intermediaries Offer means that the applicant agrees to acquire the Shares at the Offer Price.

Each applicant must comply with the appropriate money laundering checks required by the relevant Intermediary. Where an application is not accepted or there are insufficient Shares available to satisfy an application in full, the relevant Intermediary will be obliged to refund the applicant as required and all such refunds will be made in accordance with the terms provided by the Intermediary to the applicant. The Company, the Selling Shareholders and the Underwriters accept no responsibility with respect to the obligation of the Intermediaries to refund monies in such circumstances.

Each Intermediary has agreed, or will on appointment agree, to the Intermediaries Terms and Conditions, which regulate, inter alia, the conduct of the Intermediaries Offer on market standard terms and provide for the payment of commission to any Intermediary that elects to receive commission from the Selling Shareholders or the Company.

Pursuant to the Intermediaries Terms and Conditions, in making an application, each Intermediary will also be required to represent and warrant that they are not located in the United States and are not acting on behalf

213 of anyone located in the United States. Under the Intermediaries Offer, Shares will be offered to persons outside the United States in reliance on Regulation S under the Securities Act.

In addition, the Intermediaries may prepare certain materials for distribution or may otherwise provide information or advice to retail investors in the United Kingdom, the Channel Islands and the Isle of Man subject to the terms of the Intermediaries Terms and Conditions. Any such materials, information or advice are solely the responsibility of the relevant Intermediary and shall not be reviewed or approved by any of the Underwriters, the Intermediaries Offer Co-ordinator, the Company or the Selling Shareholders. Any liability relating to such documents shall be for the Intermediaries only. Any Intermediary that uses this Prospectus must state on its website that it uses this Prospectus in accordance with the Company’s consent. Intermediaries are required to provide the terms and conditions of the relevant offer made by the Intermediary to any prospective investor who has expressed an interest in participating in the Intermediaries Offer.

Each Intermediary will be informed by the Intermediaries Offer Co-ordinator by email of the aggregate number of Shares allocated to, and to be acquired by, the Intermediary on behalf of its underlying clients (or to the Intermediaries themselves) and the total amount payable in respect thereof. The aggregate allocation of Shares as between the Institutional Offer and the Intermediaries Offer, and as between Intermediaries, will be determined by the Company and the Principal Shareholder (after consultation with the Joint Global Co- ordinators). The allocation policy for the Intermediaries Offer will be determined by the Company and the Principal Shareholder. Each Intermediary will be required to apply the allocation policy to each of its underlying applications from retail investors. The allocation policy will be made available to Intermediaries prior to the commencement of conditional dealings in the Shares.

The publication of this Prospectus and any actions of the Company, the Selling Shareholders, the Joint Global Co-ordinators, the Intermediaries Offer Co-ordinator, the Intermediaries or other persons in connection with the Global Offer should not be taken as any representation or assurance as to the basis on which the number of Shares to be offered under the Intermediaries Offer or allocations within the Intermediaries Offer will be determined and all liabilities for any such action or statement are hereby disclaimed by the Company, the Selling Shareholders, the Underwriters and the Intermediaries Offer Co-ordinator.

Pursuant to the Intermediaries Terms and Conditions, the Intermediaries have undertaken to make payment on their own behalf (and not on behalf of any other person) of the consideration for the Shares allocated, at the Offer Price, to the Intermediaries Offer Co-ordinator in accordance with details to be communicated to them, by means of the CREST system against delivery of the Shares at the time and/or date set out in Part V: “Expected Timetable of Principal Events”, or at such other time and/or date after the date of publication of the Offer Price as may be agreed by the Company, the Selling Shareholders and the Joint Global Co-ordinators and notified to the Intermediaries by the Intermediaries Offer Co-ordinator.

The Intermediaries Terms and Conditions provide for the Intermediaries to have an option to be paid a commission by the Selling Shareholders in respect of the Shares allocated to and paid for by them pursuant to the Intermediaries Offer.

6. New Individual Savings Accounts The Shares will, on Admission, be “qualifying investments” for the stocks and shares component of a new individual savings accounts (“NISA”). Save where an account manager is acquiring Shares using available funds in an existing NISA, an investment in Shares by means of a NISA is subject to the usual annual subscription limits applicable to new investments into a NISA. Sums received by a Shareholder on a disposal of Ordinary Shares from a NISA will not count towards that Shareholder’s annual NISA limit, but a disposal of Ordinary Shares held in a NISA will not serve to make available again any part of the annual subscription limit that has already been used by the Shareholder in that tax year. Individuals wishing to invest in Shares through a NISA should contact their professional advisers regarding their eligibility.

214 7. Representations and warranties Each investor and, in the case of sub-paragraph (g) below, any person confirming his agreement to subscribe for and/or to purchase Ordinary Shares on behalf of an investor or authorising the Underwriters to notify an investor’s name to the Registrar in connection with the Global Offer, is deemed to represent, warrant and acknowledge to each of the Underwriters, the Registrar, the Selling Shareholders and the Company that:

(a) if the investor is a natural person, such investor is not under the age of majority in the jurisdiction where they are located (18 years of age in the United Kingdom) on the date of such investor’s application to subscribe for and/or to purchase Ordinary Shares under the Global Offer and will not be any such person on the date any such application is accepted;

(b) in agreeing to subscribe for and/or purchase Ordinary Shares under the Global Offer, the investor is relying on this Prospectus and, if applicable, any supplementary prospectus and the Pricing Statement, and not on any other information or representation concerning the Company, the Ordinary Shares or the Global Offer. Such investor agrees that none of the Company, the Selling Shareholders, the Underwriters, the Registrar nor any of their respective officers or directors will have any liability for any such other information or representation. The investor irrevocably and unconditionally waives any rights it may have in respect of any other information or representation. This paragraph shall not exclude any liability for fraudulent misrepresentation;

(c) the content of this Prospectus is exclusively the responsibility of the Company and its Directors and none of the Selling Shareholders, the Underwriters, the Registrar nor any person acting on behalf of any of them nor any of their respective employees, directors, officers, agents or affiliates is responsible for or shall have any liability for any information, representation or statement contained in this Prospectus or any information published by or on behalf of the Company, and none of the Selling Shareholders, the Underwriters, the Registrar nor any person acting on behalf of any of them nor any of their respective employees, directors, officers, agents or affiliates will be liable for any decision by an investor to participate in the Offer based on any information, representation or statement contained in this Prospectus, any supplementary prospectus or otherwise. The investor irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;

(d) the investor has not relied on the Underwriters or any person affiliated with the Underwriters in connection with any investigation of the accuracy of any information contained in this Prospectus, any supplementary prospectus or their investment decision; it has relied only on the information contained in this Prospectus and any supplementary prospectus;

(e) it is a person to whom it is lawful for the offer of Ordinary Shares to be made under the terms of the jurisdiction in which that investor is located;

(f) it is entitled to subscribe for and/or to purchase Ordinary Shares under the laws of all relevant jurisdictions which apply to it; it has fully observed such laws and obtained all governmental and other consents which may be required under such laws and complied with all necessary formalities; it has paid all issue, transfer or other taxes due in connection with its acceptance in any jurisdiction, save for the stamp duty/stamp duty reserve tax that the Selling Shareholders have agreed to be liable for; and it has not taken any action or omitted to take any action which will or may result in any of the Selling Shareholders, the Company, the Underwriters, the Registrar or any of their respective affiliates, directors, officers, agents, employees or advisers acting in breach of the legal and regulatory requirements of any jurisdiction in connection with the Global Offer or, if applicable, its acceptance of or participation in the Global Offer;

(g) in the case of a person who confirms to the Underwriters on behalf of an investor an agreement to purchase and/or subscribe for Shares and/or who authorises the Underwriters to notify the investor’s name to the Registrar, that person represents and warrants that it has authority to do so on behalf of the investor;

215 (h) the investor is not, and is not applying as nominee or agent for, a person which is, or may be, mentioned in any of sections 67, 70, 93 and 96 of the UK Finance Act 1986 (depository receipts and clearance services);

(i) it will pay to the Underwriters (or as they may direct) any amounts due from it in accordance with this Prospectus on the due time and date set out herein; and

(j) the Company, the Selling Shareholders, the Underwriters and the Registrar will rely upon the truth and accuracy of the foregoing representations, warranties and undertakings.

8. Dealing arrangements The Global Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement, which are typical for an agreement of this nature. Certain conditions are related to events which are outside the control of the Company, the Directors and the Underwriters. Further details of the Underwriting Agreement are described in paragraph 13.1 of Part XVIII: “Additional Information—Material contracts—Underwriting Agreement”.

Application has been made to the FCA for the Ordinary Shares to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for such Ordinary Shares to be admitted to trading on its main market for listed securities.

It is expected that Admission will take place and unconditional dealings in the Ordinary Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 17 February 2016. Settlement of dealings from that date will be on a two-day rolling basis. Prior to Admission, it is expected that dealings in the Ordinary Shares will commence on a conditional basis on the London Stock Exchange on 12 February 2016. The earliest date for such settlement of such dealings will be 17 February 2016. All dealings in the Shares between the commencement of conditional dealings and the commencement of unconditional dealings will be on a “when issued” basis. If the Global Offer does not become unconditional in all respects, any such dealings will be of no effect and any such dealings will be at the sole risk of the parties concerned. These dates and times may be changed without further notice.

When admitted to trading, the Ordinary Shares will be registered with ISIN GB00BYPHNG03, and SEDOL number BYPHNG0 and will trade under the symbol “CSP”.

It is intended that Shares allocated to investors who wish to hold shares in uncertificated form will take place through CREST on Admission. It is intended that, where applicable, definitive share certificates in respect of the Global Offer will be despatched by the Registrar. Temporary documents of title will not be issued. Dealings in advance of crediting of the relevant CREST stock account shall be at the risk of the person concerned.

In connection with the Global Offer, any of the Underwriters and any of their respective affiliates acting as an investor for its or his or her own account may retain, purchase, sell, offer to sell or otherwise deal for its or his or her own account(s) in the Shares, any other securities of the Company or related investments in connection with the Global Offer or otherwise. Accordingly, references in this Prospectus to the Shares being offered or otherwise dealt with should be read as including any offer to, or dealing by, the Underwriters and any of their respective affiliates acting as an investor for its or his or her own account(s). Such persons do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

9. Over-allotment and stabilisation In connection with the Global Offer, Barclays Capital Securities Limited, as Stabilising Manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Ordinary Shares or effect other stabilisation transactions with a view to supporting the market price of the Ordinary Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such stabilisation transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at

216 any time during the period commencing on the date of the commencement of conditional dealings in the Ordinary Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. There is no assurance that stabilising transactions will be undertaken. Such transactions, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Ordinary Shares above the Offer Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Global Offer.

In connection with the Global Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Ordinary Shares effected by it during the stabilising period, the Over- allotment Shareholder has granted to it the Over-allotment Option, pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer at the Offer Price. The Over-allotment Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Ordinary Shares, including for all dividends and other distributions declared, made or paid on the Ordinary Shares, will be purchased on the same terms and conditions as the Shares being issued or sold in the Global Offer and will form a single class for all purposes with the other Ordinary Shares.

10. Stock Lending Agreement In connection with the Over-allotment Option, on 1 February 2016 the Stabilising Manager entered into the Stock Lending Agreement with the Over-allotment Shareholder pursuant to which the Stabilising Manager, on Admission, will be able to borrow a number of Ordinary Shares equal to 15 per cent. of the Offer Size for the purposes, among other things, of allowing the Stabilising Manager to settle, at Admission, over- allotments of Ordinary Shares, if any, made in connection with the Global Offer. If the Stabilising Manager borrows any Ordinary Shares pursuant to the Stock Lending Agreement, it will be required to return equivalent securities to the Over-allotment Shareholder in accordance with the terms of the Stock Lending Agreement.

11. CREST CREST is a paperless settlement system in the UK enabling securities to be evidenced otherwise than by a certificate and to be transferred otherwise than by a written instrument. With effect from Admission, the Articles will permit the holding of Ordinary Shares under the CREST system and the Company has applied for the Ordinary Shares to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in the Ordinary Shares following Admission may take place within the CREST system, if any Shareholder so wishes.

CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so. An investor applying for Shares in the Global Offer may, however, elect to receive Shares in uncertificated form if that investor is a system-member (as defined in the Uncertificated Securities Regulations) in relation to CREST.

12. Underwriting arrangements The Company, the Directors, the Principal Shareholder, the Underwriters and the Stabilising Manager have entered into the Underwriting Agreement pursuant to which, on the terms and subject to certain conditions contained in the Underwriting Agreement (which are customary in agreements of this nature), the Underwriters have agreed to use their reasonable endeavours to procure:

(a) purchasers or subscribers for the Institutional Offer Shares and, failing which, to purchase or subscribe for such Institutional Offer Shares themselves in their agreed proportions; and

217 (b) that the Intermediaries purchase the Intermediaries Offer Shares and, failing which, to purchase such Intermediaries Offer Shares themselves in their agreed proportions, in each case, at the Offer Price.

The Underwriting Agreement contains provisions entitling the Joint Global Co-ordinators to terminate the Global Offer (and the arrangements associated with it) at any time prior to (but not after) Admission in certain circumstances. If these termination rights are exercised, the Global Offer and the arrangements associated with it will lapse, Admission will not occur and any monies received in respect of the Global Offer will be returned to applicants without interest.

Further details of the terms of the Underwriting Agreement are set out in paragraph 13.1 of Part XVIII: “Additional Information—Material contracts—Underwriting Agreement”.

13. Lock-up arrangements Pursuant to the Underwriting Agreement, each of the Company and the Principal Shareholder has agreed that, subject to certain exceptions (including an exception allowing the Principal Shareholder to grant security over its Ordinary Shares in connection with Oaktree debt financing arrangements with any of the Joint Global Coordinators or their affiliates), during the period of 180 days from the date of Admission, it will not, without the prior written consent of the majority by number of the Joint Global Co-ordinators, issue, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing.

Each of the Directors (pursuant to the Underwriting Agreement), the Selling Shareholders (other than the Principal Shareholder) and members of Senior Management (by separate undertaking) has agreed that, subject to certain exceptions, during the period of 365 days from the date of Admission, he/she will not, without the prior consent of the majority by number of the Joint Global Co-ordinators, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing.

Further details of these arrangements are set out in paragraph 13.1 of Part XVIII: “Additional Information— Material contracts—Underwriting Agreement” and paragraph 13.2 of Part XVIII: “Additional Information— Material contracts—Deeds of Election”.

14. Withdrawal rights In the event that the Company is required to publish any supplementary prospectus, applicants who have applied to subscribe for or purchase Shares in the Global Offer shall have at least two clear business days following the publication of the relevant supplementary prospectus within which to withdraw their offer to acquire Shares in the Global Offer in its entirety.

In addition, in the event that the Offer Price is set above the Offer Price Range, the Offer Size is set above or below the Offer Size Range, the number of New Shares to be issued by the Company is set below the New Share Offer Size Range and/or the number of Sale Shares to be sold by the Selling Shareholders is set above or below the Sale Share Offer Size Range (subject, when taken together, to the minimum free float requirements agreed by the Company with the UK Listing Authority), the applicants who have applied to subscribe for or purchase Shares would have a statutory right to withdraw their offer to subscribe for or purchase Shares in the Global Offer in its entirety pursuant to section 87Q of the FSMA before the end of a period of two business days commencing on the first Business Day after the date on which an announcement of this is published by the Company via a Regulatory Information Service announcement (or such later date as may be specified in that announcement). In these circumstances, the Pricing Statement would not be issued until this deadline for exercising such statutory withdrawal rights has ended.

The right to withdraw an application to acquire Shares in the Global Offer in the circumstances set out above will be available to all investors in the Global Offer. If the application is not withdrawn within the stipulated period, any offer to apply for Shares in the Global Offer will remain valid and binding.

218 Details of how to withdraw an application will be made available if a supplementary prospectus is published. Applicants who have applied for Shares in the Intermediaries Offer through an Intermediary should contact the relevant Intermediary for details on how to withdraw an application.

Any supplementary prospectus will be published in accordance with the Prospectus Rules (and notification thereof will be made to a Regulatory Information Service) but will not be distributed to investors individually. Any such supplementary prospectus will be published in printed form and available free of charge at the Company’s registered office at Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom and (subject to certain restrictions) on the Company’s website at www.countryside- properties.com until 14 days after Admission.

15. Selling and transfer restrictions The distribution of this Prospectus and the offer of Shares in certain jurisdictions may be restricted by law, and therefore, persons into whose possession this Prospectus comes should inform themselves about and observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time.

Apart from in the UK, the Channel Islands and the Isle of Man, no action has been taken or will be taken in any jurisdiction that would permit a public offering or sale of the Shares, or possession or distribution of this Prospectus (or any other offering or publicity material relating to Shares) in any country or jurisdiction where action for that purpose is required or doing so may be restricted by law.

None of the Shares may be offered for subscription, sale or purchase or be delivered, and this Prospectus and any other offering material in relation to the Shares may not be circulated, in any jurisdiction where to do so would breach any securities laws or regulations of any such jurisdiction or give rise to an obligation to obtain any consent, approval or permission or to make any application, filing or registration.

Persons into whose possession this Prospectus comes should inform themselves about and observe any restrictions on the distribution of this Prospectus and any offering of the Shares. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute an offer to purchase any of the Shares to any person in any jurisdiction to whom it is unlawful to make such offer of solicitation in such jurisdiction.

European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (2003/71/EC) (each a “Relevant Member State”), an offer to the public of any Shares may not be made in that Relevant Member State, except that the Shares may be offered to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the Global Co-ordinators for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the Company or the Underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive and each person who initially acquires Shares or to whom any offer is made will be deemed to have represented, warranted and agreed to and with the Underwriters and the

219 Company that it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive.

For the purposes of this provision, the expression “an offer of Shares to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Global Offer and the Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State.

In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the Global Offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Shares to the public in a Relevant Member State prior to the publication of a prospectus in relation to the Shares which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another Relevant Member State and notified to the competent authority in the Relevant Member State, all in accordance with the Prospectus Directive, other than their offer or resale to Qualified Investors or in circumstances in which the prior consent of the Underwriters has been obtained to each such proposed offer or resale.

The Company, the Selling Shareholders, the Underwriters and their affiliates and others will rely upon the truth and accuracy of the foregoing representation, acknowledgement, and agreement. Notwithstanding the above, a person who is not a qualified investor and who has notified the Underwriters of such fact in writing may, with the consent of the Underwriters, be permitted to subscribe for or purchase Shares in the Global Offer.

United States Each purchaser or subscriber of Shares in the United States will be deemed to have represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an investment decision and that:

(a) it is (i) a QIB, (ii) acquiring the Shares for its own account or for the account of one or more QIBs with respect to whom it has the authority to make, and does make, the representations and warranties set forth in this paragraph, (iii) acquiring the Shares for investment purposes, and not with a view to further distribution of such Shares and (iv) aware, and each beneficial owner of the Shares has been advised, that the sale of the Shares to it is being made in reliance on Rule 144A or in reliance on another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

(b) it understands and agrees that the Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state, territory or other jurisdiction of the United States and may not be offered, resold, pledged or otherwise transferred, except (i)(1) to a person whom the purchaser and any person acting on its behalf reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (2) in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S, (3) pursuant to an exemption from the registration requirements of the Securities Act provided by Rule 144 thereunder (if available) or (4) pursuant to an effective registration statement under the Securities Act and (ii) in accordance with all applicable securities laws of any state, territory or other jurisdiction of the United States;

(c) it acknowledges that the Shares (whether in physical, certificated form or in uncertificated form held in CREST) are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, that the Shares are being offered and sold in a transaction not involving any public offering in the United States within the meaning of the Securities Act and that no representation is made as to the availability of the exemption provided by Rule 144 for resales of Shares;

220 (d) it understands that in the event Shares are held in certificated form, such certificated Shares will bear a legend substantially to the following effect:

“THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS IN THE UNITED STATES OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT: (A) IN A TRANSACTION IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER; (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE); OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THIS SECURITY. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER AND EACH PURCHASER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. EACH HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS”;

(e) notwithstanding anything to the contrary in the foregoing, it understands that Shares may not be deposited into an unrestricted depository receipt facility in respect of Shares established or maintained by a depository bank unless and until such time as such Shares are no longer “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act;

(f) any resale made other than in compliance with the above-stated restrictions shall not be recognised by the Company;

(g) it agrees that it will give to each person to whom it transfers Shares notice of any restrictions on transfer of such Shares; and

(h) it acknowledges that the Company, the Selling Shareholders, the Underwriters and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations or agreements deemed to have been made by virtue of its purchase of Shares are no longer accurate, it will promptly notify the Company, and if it is acquiring any Shares as a fiduciary or agent for one or more QIBs, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Regulation S transfer restrictions Each purchaser or subscriber of Shares outside the United States in accordance with Regulation S will be deemed to have represented, agreed and acknowledged that it has received a copy of this Prospectus and such other information as it deems necessary to make an investment decision and that:

(a) it is authorised to consummate the purchase of the Shares in compliance with all applicable laws and regulations;

(b) it acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed to it that such customer acknowledges) that the Shares have not been, and will not be, registered under

221 the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States;

(c) it and the person, if any, for whose account or benefit the purchaser is acquiring the Shares is subscribing or purchasing the Shares in an offshore transaction meeting the requirements of Regulation S; and

(d) the Company, the Selling Shareholders, the Underwriters and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations or agreements deemed to have been made by virtue of its purchase of Shares are no longer accurate, it will promptly notify the Company, and if it is acquiring any Shares as a fiduciary or agent for one or more accounts, it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each such account.

Japan The Shares offered hereby have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended)(the “Financial Instruments and Exchange Act”). Accordingly, no Shares will be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act and other relevant laws and regulations of Japan.

Australia This Prospectus does not constitute a prospectus or other disclosure document under Part 6D.2 of the Corporations Act 2001 of the Commonwealth of Australia (the “Corporations Act”) and will not be lodged with the Australian Securities and Investment Commission. The Shares will be offered to persons in Australia only to the extent that such offers of shares for issue or sale do not need disclosure to investors under Part 6D.2 of the Corporations Act. Any offer of Shares received in Australia is void to the extent that it needs disclosure to investors under the Corporations Act. In particular, offers for the issue or sale of Shares will only be made in Australia in reliance on various exemptions from such disclosure to investors provided by section 708 of the Corporations Act. Any person to whom Shares are issued or sold pursuant to an exemption provided by section 708 of the Corporations Act must not within 12 months after the issue or sale of those Shares offer those Shares for sale in Australia unless that offer is itself made in reliance on an exemption from disclosure provided by that section.

Canada The Shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this Prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non- Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the

222 Underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Switzerland The Shares will not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This Prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27ff. of the SIX Listing Rules or any listing rules of any other stock exchange or regulated trading facility in Switzerland.

Neither this Prospectus nor any other offering or marketing material relating to the Company or the Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this Prospectus will not be filed with, and the offer of the Shares will not be supervised by, the Swiss Financial Market Supervisory Authority, and the offer of the Shares has not been and will not be authorised under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to purchasers of the Shares.

This Prospectus, as well as any other material relating to the Shares, is personal and confidential and does not constitute an offer to any other person. This Prospectus may only be used by those investors to whom it has been sent in connection with the offering described herein and may neither, directly nor indirectly, be distributed or made available to other persons without the express consent of the Company.

It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Other overseas territories Prospective investors in jurisdictions other than the EEA, the United States, the United Kingdom, Japan, Canada, Australia and Switzerland should consult their professional advisers as to whether they require any governmental or other consents or need to observe their formalities to enable them to purchase any Shares under the Global Offer.

223 PART XVIII

ADDITIONAL INFORMATION

1. Responsibility The Company and the Directors, whose names and principal functions are set out in Part X: “Directors, Senior Management and Corporate Governance”, accept responsibility for the information contained in this Prospectus, including with respect to subsequent resales or final placement of the Shares by any Intermediary that uses this Prospectus with the Company’s consent. To the best of the knowledge of the Company and the Directors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Incorporation 2.1 The Company was incorporated and registered in England and Wales on 18 November 2015 as a public company limited by shares under the Companies Act with the name Hackplimco (No. 121) plc and with the registered number 9878920. 2.2 On 23 November 2015, the Company was issued with a trading certificate under section 761 of the Companies Act entitling it to commence business. 2.3 On 7 January 2016, the Company changed its name to Countryside Properties plc. 2.4 The Company’s registered office and principal place of business is at Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom. The Company’s telephone number is 01277 260 000. 2.5 The principal laws and legislation under which the Company operates and the Shares have been created are the Companies Act and the regulations issued thereunder. 2.6 The business of the Company, and its principal activity, is to act as the ultimate holding company of the Group.

3. Share capital 3.1 The share capital history of the Company is as follows:

3.1.1 On incorporation on 18 November 2015, the issued share capital of the Company was £1 consisting of one Ordinary Share of £1 nominal value, which was issued to Hackwood Secretaries Limited. 3.1.2 On 19 November 2015, the Principal Shareholder subscribed for 9 Ordinary Shares in the Company and 50,000 £1 redeemable preference shares, in each case at nominal value. On the same date, Hackwood Secretaries Limited transferred its one Ordinary Share to Ian Sutcliffe. It is intended that the 50,000 £1 redeemable preference shares will be redeemed by the Company shortly after Admission at nominal value. 3.1.3 On 29 January 2016, by members’ written resolutions, it was resolved that, conditional on Admission: (a) the Directors be generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006, in substitution for all prior authorities conferred upon them, to exercise all of the powers of the Company to allot: (i) Ordinary Shares with an aggregate nominal value of up to £150,000,000; and

(ii) in connection with an offer by way of a rights issue, up to a further aggregate nominal value of £150,000,000;

224 with such authority expiring (unless previously revoked, varied or renewed) on 31 March 2017 or, if earlier, at the conclusion of the next annual general meeting of the Company, save that the Company may before such expiry, make an offer or agreement which would or might require shares to be allotted after such expiry and the Directors may allot shares in pursuance of such offer or agreement as if the authority had not expired;

(b) the Directors be empowered to allot equity securities (within the meaning of section 560 of the Companies Act) for cash, pursuant to the authority described in sub-paragraph 3.1.3(a)(i) above in substitution for all prior powers conferred upon them, but without prejudice to any allotments made pursuant to the terms of such powers, as if section 561(1) of the Act did not apply to any such allotment, such power being limited to Ordinary Shares with an aggregate nominal value of up to £45,000,000, with such authority expiring (unless previously revoked, varied or renewed) on 31 March 2017 or, if earlier, at the conclusion of the next annual general meeting of the Company, save that the Company may before such expiry, make an offer or agreement which would or might require shares to be allotted after such expiry and the Directors may allot shares in pursuance of such offer or agreement as if the authority had not expired; and

(c) the Company was generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of the Companies Act) of Ordinary Shares subject to the following conditions:

(i) the maximum aggregate number of shares authorised to be purchased is 45,000,000, representing 10 per cent. of the aggregate nominal value of the Company’s issued share capital immediately following Admission;

(ii) the minimum price (excluding expenses) which may be paid for each share is £0.01 (being the expected nominal value of an Ordinary Share following the Post- IPO Reduction of Capital); and

(iii) the maximum price (excluding expenses) which may be paid for each Ordinary Share is 105 per cent. of the average of the middle market quotations of a Share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the Ordinary Share is contracted to be purchased,

with such authority expiring on 31 March 2017 or, if earlier, at the end of the annual general meeting of the Company to be held in 2015 so that the Company may before the expiry of the authority enter into a contract to purchase Ordinary Shares which will or may be executed wholly or partly after the expiry of such authority.

4. Pre-IPO Reorganisation, Midco Liquidation and Post-IPO Reduction of Capital 4.1 Prior to Admission, the holders (including the Selling Shareholders) of the equity securities in OCM Luxembourg Coppice Midco S.à r.l. (including the mandatory redeemable preference shares) will enter into a share-for-share exchange with the Company, pursuant to which the Company will acquire the entire issued share capital of OCM Luxembourg Coppice Midco S.à r.l (including the mandatory redeemable preference shares) in consideration for the issue to such holders of Ordinary Shares of £1 each (the “Pre-IPO Reorganisation”). In conjunction with the Pre-IPO Reorganisation, the Company will issue a single deferred share of £1 to the Principal Shareholder for the purposes of capitalising certain reserves of the Company created as a result of the Pre-IPO Reorganisation (the “Deferred Share”).

4.2 Following the Pre-IPO Reorganisation and prior to Admission, it is anticipated that OCM Luxembourg Coppice Midco S.à r.l. will be sidelined from the main Group structure with the effect that OCM Luxembourg Coppice Holdco S.à r.l., which is currently a direct, wholly owned subsidiary of OCM Luxembourg Coppice Midco S.à r.l., will instead become a direct, wholly owned subsidiary

225 of the Company. OCM Luxembourg Coppice Holdco S.à r.l. is, and on Admission will remain, the holding company of the remainder of the Group.

This will be achieved by OCM Luxembourg Coppice Midco S.à r.l. transferring to the Company the entire issued share capital of its direct, wholly owned subsidiary, OCM Luxembourg Coppice Holdco S.à r.l. Following such transfer, OCM Luxembourg Coppice Midco S.à r.l. will be placed into voluntary solvent liquidation, with an interim liquidation distribution of its assets being made to the Company prior to Admission and with the liquidation process anticipated to be completed following Admission.

4.3 Following Admission, the Company will undertake a reduction of capital, to be approved by the Court pursuant to section 645 of the Companies Act, in order to create additional distributable reserves to assist the Company to implement its dividend policy following Admission (the “Post-IPO Reduction of Capital”). It is intended that this capital reduction will (a) cancel the share premium account of the Company; (b) reduce the nominal value of the Ordinary Shares to £0.01 each; and (c) cancel the Deferred Share. The terms of the proposed capital reduction have been approved by the Directors and by members’ special resolution passed on 29 January 2016.

5. Memorandum and Articles of Association Articles of Association The Company’s objects are not restricted by its Articles. Accordingly, pursuant to section 31 of the Companies Act, the Company’s objects are unrestricted.

The Articles were adopted on 29 January 2016 and include provisions to the following effect:

5.1 Shares 5.1.1 Respective rights of different classes of shares Without prejudice to any rights attached to any existing shares, the Company may issue shares with such rights or restrictions as determined by either the Company by ordinary resolution or, if the Company passes a resolution to so authorise them, the Directors. The Company may also issue shares which are, or are liable to be, redeemed at the option of the Company or the holder and the Directors may determine the terms, conditions and manner of redemption of any such shares.

5.1.2 Voting rights At a general meeting, subject to any special rights or restrictions attached to any class of shares:

(a) on a show of hands, every member present in person and every duly appointed proxy present shall have one vote;

(b) on a show of hands, a proxy has one vote for and one vote against the resolution if the proxy has been duly appointed by more than one member entitled to vote on the resolution, and the proxy has been instructed:

(i) by one or more of those members to vote for the resolution and by one or more other of those members to vote against it; or

(ii) by one or more of those members to vote either for or against the resolution and by one or more other of those members to use his discretion as to how to vote; and

(c) on a poll, every member present in person or by proxy has one vote for every share held by him.

226 A proxy shall not be entitled to vote on a show of hands or on a poll where the member appointing the proxy would not have been entitled to vote on the resolution had he been present in person.

Unless the Directors resolve otherwise, no member shall be entitled to vote either personally or by proxy or to exercise any other right in relation to general meetings if any call or other sum due from him to the Company in respect of that share remains unpaid.

5.1.3 Variation of rights (a) Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class may be varied or abrogated either with the written consent of the holders of three-quarters in nominal value of the issued shares of the class (excluding shares held as treasury shares) or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class (but not otherwise), and may be so varied or abrogated either while the Company is a going concern or during or in contemplation of a winding-up.

(b) The special rights attached to any class of shares will not, unless otherwise expressly provided by the terms of issue, be deemed to be varied by (i) the creation or issue of further shares ranking, as regards participation in the profits or assets of the Company, in some or all respects equally with them but in no respect in priority to them, or (ii) the purchase or redemption by the Company of any of its own shares.

5.1.4 Transfer of shares (a) Transfers of certificated shares may be effected in writing or in any other form acceptable to the Directors, and signed by or on behalf of the transferor and, if any of the shares are not fully paid, by or on behalf of the transferee. The transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the register of members in respect of those shares. Transfers of uncertificated shares shall be effected by means of a relevant system (i.e. CREST) unless the CREST Regulations provide otherwise.

(b) The Directors may decline to register any transfer of a certificated share, unless (i) the instrument of transfer is in respect of only one class of share, (ii) the instrument of transfer is lodged at the transfer office, duly stamped if required, accompanied by the relevant share certificate(s) or other evidence reasonably required by the Directors to show the transferor’s right to make the transfer or, if the instrument of transfer is executed by some other person on the transferor’s behalf, the authority of that person to do so, and (iii) the certificated share is fully paid up.

(c) The Directors may refuse to register an allotment or transfer of shares in favour of more than four persons jointly.

5.1.5 Restrictions where notice not complied with If any member, or any other person appearing to be interested in shares (within the meaning of Part 22 of the Companies Act) held by such member has been duly served with a notice under section 793 of the Companies Act (which confers upon public companies the power to require information as to interests in its voting shares) and is in default for a period of 14 days in supplying to the Company the information required by that notice:

(a) the holder of those shares shall not be entitled to attend or vote (in person or by proxy) at any shareholders’ meeting or exercise any other right in relation to shareholders’ meetings, unless the Directors otherwise determine; and

227 (b) the Directors may in their absolute discretion, where those shares represent 0.25 per cent. or more of the issued shares of a relevant class, by notice to the holder direct that:

(i) any dividend or part of a dividend (including shares issued in lieu of a dividend) or other money which would otherwise be payable on the shares will be retained by the Company without any liability for interest; and/or

(ii) (with various exceptions set out in the Articles) transfers of the shares will not be registered.

5.1.6 Forfeiture and lien (a) If a member fails to pay in full any sum which is due in respect of a share on or before the due date for payment, then, following notice by the Directors requiring payment of the unpaid amount with any accrued interest and any expenses incurred by the Company by reason of such non-payment, such share may be forfeited by a resolution of the Directors to that effect (including all dividends declared in respect of the forfeited share and not actually paid before the forfeiture).

(b) A member whose shares have been forfeited will cease to be a member in respect of the shares, but will remain liable to pay the Company all monies which at the date of forfeiture were presently payable together with interest. The Directors may in their absolute discretion enforce payment without any allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal, or waive payment in whole or part.

(c) The Company shall have a lien on every share that is not fully paid for all monies called or payable at a fixed time in respect of such share. The Company’s lien over a share takes priority over the rights of any third party and extends to any dividends or other sums payable by the Company in respect of that share. The Directors may waive any lien which has arisen and may resolve that any share shall for some limited period be exempt from such a lien, either wholly or partially.

(d) A share forfeited or surrendered shall become the property of the Company and may be sold, re-allotted or otherwise disposed of to any person (including the person who was, before such forfeiture or surrender, the holder of that share or entitled to it) on such terms and in such manner as the Directors think fit. The Company may deliver an enforcement notice in respect of any share if a sum in respect of which a lien exists is due and has not been paid. The Company may sell any share in respect of which an enforcement notice, delivered in accordance with the Articles, has been given if such notice has not been complied with. The proceeds of sale shall first be applied towards payment of the amount in respect of the lien to the extent that amount was due on the date of the enforcement notice, and then on surrender of the share certificate for cancellation, to the person entitled to the shares immediately prior to the sale.

5.2 General meetings 5.2.1 Annual general meeting An annual general meeting shall be held in each period of six months beginning with the day following the Company’s accounting reference date, at such place or places, date and time as may be decided by the Directors.

5.2.2 Convening of general meetings The Directors may, whenever they think fit, call a general meeting. The Directors are required to call a general meeting once the Company has received requests from its members to do so in accordance with the Companies Act.

228 5.2.3 Notice of general meetings etc. (a) Notice of general meetings shall include all information required to be included by the Companies Act and shall be given to all members other than those members who are not entitled to receive such notices from the Company under the provisions of the Articles. The Company may determine that only those persons entered on the register of members at the close of business on a day decided by the Company, such day being no more than 21 days before the day that notice of the meeting is sent, shall be entitled to receive such a notice.

(b) For the purposes of determining which persons are entitled to attend or vote at a meeting, and how many votes such persons may cast, the Company must specify in the notice of the meeting a time, not more than 48 hours before the time fixed for the meeting, by which a person must be entered on the register of members in order to have the right to attend or vote at the meeting. The Directors may in their discretion resolve that, in calculating such period, no account shall be taken of any part of any day that is not a working day (within the meaning of section 1173 of the Companies Act).

5.2.4 Quorum No business other than the appointment of a chairman shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. Two members present in person or by proxy shall be a quorum.

5.2.5 Conditions of admission (a) The Directors may require attendees to submit to searches or put in place such arrangements or restrictions as they think fit to ensure the safety and security of attendees at a general meeting. Any member, proxy or other person who fails to comply with such arrangements or restrictions may be refused entry to, or removed from, the general meeting.

(b) The Directors may decide that a general meeting shall be held at two or more locations to facilitate the organisation and administration of such meeting. A member present in person or by proxy at the designated “satellite” meeting place may be counted in the quorum and may exercise all rights that they would have been able to exercise if they had been present at the principal meeting place. The Directors may make and change from time to time such arrangements as they shall in their absolute discretion consider appropriate to:

(i) ensure that all members and proxies for members wishing to attend the meeting can do so;

(ii) ensure that all persons attending the meeting are able to participate in the business of the meeting and to see and hear anyone else addressing the meeting;

(iii) ensure the safety of persons attending the meeting and the orderly conduct of the meeting; and

(iv) restrict the numbers of members and proxies at any one location to such number as can safely and conveniently be accommodated there.

5.3 Directors 5.3.1 General powers The Directors shall manage the business and affairs of the Company and may exercise all powers of the Company other than those that are required by the Companies Act or by the Articles to be exercised by the Company at the general meeting.

229 5.3.2 Number of directors The Directors shall not be less than two nor more than 20 in number, save that the Company may, by ordinary resolution, from time to time vary the minimum number and/or maximum number of directors.

5.3.3 Share qualification A Director shall not be required to hold any shares of the Company by way of qualification. A Director who is not a member of the Company shall nevertheless be entitled to attend and speak at general meetings.

5.3.4 Directors’ fees (a) The fees payable to the Directors are determined by the Directors from time to time but shall not exceed £2 million per annum in aggregate for all Directors or such higher amount as may from time to time be determined by ordinary resolution of the shareholders.

(b) Any Director who holds any executive office (including the office of chairman or deputy chairman), or who serves on any committee of the Directors, or who otherwise performs services which in the opinion of the directors are outside the scope of the ordinary duties of a director, may be paid extra remuneration in addition to and outside of the cap mentioned in sub-paragraph 5.3.4(a) above by way of salary, commission or otherwise or may receive such other benefits as the Directors may determine.

5.3.5 Executive directors The Directors may from time to time appoint one or more of their number to be the holder of any executive office and may confer upon any director holding an executive office any of the powers exercisable by them as directors upon such terms and conditions, and with such restrictions, as they think fit. They may from time to time revoke, withdraw, alter or vary all or any of such delegated powers.

5.3.6 Directors’ retirement (a) Each Director shall retire at the annual general meeting held in the third calendar year following the year in which he was elected or last re-elected by the Company. In addition, each Director (other than the chairman and any Director holding an executive office) shall also be required to retire at each annual general meeting following the ninth anniversary of the date on which he was elected by the Company. A Director who retires at any annual general meeting shall be eligible for election or re-election unless the Directors resolve otherwise not later than the date of the notice of such annual general meeting.

(b) When a Director retires at an annual general meeting in accordance with the Articles, the Company may, by ordinary resolution at the meeting, fill the office being vacated by re-electing the retiring Director.

5.3.7 Removal of a director by resolution of Company The Company may, by ordinary resolution of which special notice is given, remove any Director before the expiration of his period of office in accordance with the Companies Act, and elect another person in place of a Director so removed from office. Such removal may take place notwithstanding any provision of the Articles or of any agreement between the Company and such Director, but is without prejudice to any claim the Director may have for damages for breach of any such agreement.

230 5.3.8 Proceedings of the Board (a) Subject to the provisions of the Articles, the Directors may meet for the despatch of business and adjourn and otherwise regulate the proceedings of the Board as they think fit.

(b) The quorum necessary for the transaction of business of the Directors may be fixed from time to time by the directors and unless so fixed at any other number shall be two. A meeting of the Directors at which a quorum is present shall be competent to exercise all powers and discretions for the time being exercisable by the Directors.

(c) The Directors may elect from their number a chairman and a deputy chairman (or two or more deputy chairmen) and decide the period for which each is to hold office.

(d) Questions arising at any meeting of the Directors shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have a second or casting vote.

5.3.9 Directors’ interests (a) For the purposes of section 175 of the Companies Act, the Directors shall have the power to authorise any matter which would or might otherwise constitute or give rise to a breach of the duty of a Director to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company.

(b) Any such authorisation will be effective only if:

(i) the matter in question was proposed in writing for consideration at a meeting of the Directors, in accordance with the Board’s normal procedures or in such other manner as the Directors may resolve;

(ii) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the Director in question or any other interested Director; and

(iii) the matter was agreed to without such interested Directors voting or would have been agreed to if their votes had not been counted.

(c) The Directors may extend any such authorisation to any actual or potential conflict of interest which may arise out of the matter so authorised and may (whether at the time of the giving of the authorisation or subsequently) make any such authorisation subject to any limits or conditions they expressly impose, but such authorisation is otherwise given to the fullest extent permitted. The Directors may also terminate any such authorisation at any time.

5.3.10 Restrictions on voting (a) Except as provided below or otherwise permitted in the Articles, a Director may not vote on any resolution in respect of any contract, arrangement or any other proposal in which he, or a person connected to him, is interested. Any vote of a Director in respect of a matter where he is not entitled to vote shall be disregarded.

(b) Subject to the provisions of the Companies Act, a Director is entitled to vote and be counted in the quorum in respect of any resolution concerning any contract, transaction or arrangement, or any other proposal (inter alia):

(i) in which he has an interest of which he is not aware or which cannot be reasonably be regarded as likely to give rise to a conflict of interest;

(ii) in which he has an interest only by virtue of interests in the Company’s shares, debentures or other securities or otherwise in or through the Company;

231 (iii) which involves the giving of any security, guarantee or indemnity to the Director or any other person in respect of obligations incurred by him or by any other person at the request of or for the benefit of the Company or its subsidiaries and guaranteed by the Company (or vice versa);

(iv) concerning an offer of securities by the Company or any of its subsidiary undertakings in which he is or may be entitled to participate as a holder of securities or as an underwriter or sub-underwriter;

(v) concerning any other body corporate in which the Director has interest, provided that he and any connected persons do not own or have a beneficial interest in one per cent. or more of any class of share capital of such body corporate, or of the voting rights available to the members of such body corporate;

(vi) relating to an arrangement for the benefit of employees or former employees which does not award him any privilege or benefit not generally awarded to the employees or former employees to whom such arrangement relates;

(vii) concerning the purchase or maintenance of insurance for any liability for the benefit of Directors;

(viii) concerning the giving of indemnities in favour of the Directors;

(ix) concerning the funding of expenditure by any Director or Directors (A) on defending criminal, civil or regulatory proceedings or actions against him or them, (B) in connection with an application to the court for relief, (C) on defending him or them in any regulator investigations, or (D) incurred doing anything to enable him to avoid incurring such expenditure; or

(x) in respect of which the Director’s interest, or the interest of Directors generally, has been authorised by ordinary resolution.

5.3.11 Confidential information If a Director, otherwise than by virtue of his position as Director, receives information in respect of which he owes a duty of confidentiality to a person other than the Company, he shall not be required to disclose such information to the Company or otherwise use or apply such confidential information for the purpose of or in connection with the performance of his duties as a Director, provided that, if the duty of confidentiality arises out of a situation in which the Director has, or can have, a direct or indirect conflict of interest, such an actual or potential conflict of interest arises from a permitted or authorised interest under the Articles. This is without prejudice to any equitable principle or rule of law which may excuse or release the Director from disclosing the information, in circumstances where disclosure may otherwise be required under the Articles.

5.3.12 Borrowing powers (a) Subject to the provisions of the Companies Act, the Directors may exercise all the powers of the Company to borrow money, mortgage or charge all or any part or parts of the Company’s undertaking, property and uncalled capital, and issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

(b) The Directors shall, however, restrict the borrowings of the Company and exercise all voting and other rights in relation to its subsidiary undertakings (if any) so as to secure (so far, as regards subsidiary undertakings, as by such exercise they can secure) that monies borrowed by and owing to persons outside the Group (as defined in the Articles) less the aggregate amount of current asset investments (as defined in the Articles) shall

232 not, without the previous sanction of an ordinary resolution of the Company, exceed an amount equal to two times the adjusted capital and reserves (as defined in the Articles).

5.3.13 Powers of the directors (a) The Directors may delegate any of their powers or discretions, including those involving the payment of remuneration or the conferring of any other benefit to the Directors, to such person or committee and in such manner as they think fit. Any such person or committee shall, unless the Directors otherwise resolve, have the power to sub-delegate any of the powers or discretions delegated to them. The Directors may make regulations in relation to the proceedings of committees or sub-committees.

(b) The Directors may establish any local boards or appoint managers or agents to manage any of the affairs of the Company, either in the United Kingdom or elsewhere, and may:

(i) appoint persons to be members or agents or managers of such local board and fix their remuneration; (ii) delegate to any local board, manager or agent any of the powers, authorities and discretions vested in the Directors, with the power to sub-delegate; (iii) remove any person so appointed, and may annul or vary any such delegation; and (iv) authorise the members of any local boards, or any of them, to fill any vacancies on such boards, and to act notwithstanding vacancies. (c) The Directors may appoint any person or fluctuating body of persons to be the attorney of the Company with such purposes and with such powers, authorities and discretions and for such periods and subject to such conditions as they may think fit. (d) Any Director may at any time appoint any person (including another Director) to be his alternate director and may at any time terminate such appointment.

5.3.14 Directors’ liabilities (a) So far as may be permitted by the Companies Act, every Director, former Director or secretary of the Company or of an Associated Company (as defined in section 256 of the Companies Act) of the Company may be indemnified by the Company out of its own funds against any liability incurred by him in connection with any negligence, default, breach of duty or breach of trust by him or any other liability incurred by him in the execution of his duties, the exercise of his powers or otherwise in connection with his duties, powers or offices. (b) The Directors may also purchase and maintain insurance for or for the benefit of: (i) any person who is or was a director or Secretary of a Relevant Company (as defined in the Articles); or (ii) any person who is or was of any time a trustee of any pension fund or employees’ share scheme in which employees of any Relevant Company are interested, including insurance against any liability (including all related costs, charges, losses and expenses) incurred by or attaching to him in relation to his duties, powers or offices in relation to any Relevant Company, or any such pension fund or employees’ share scheme. (c) So far as may be permitted by the Companies Act, the Company may provide a Relevant Officer (as defined in the Articles) with defence costs in relation to any criminal or civil proceedings in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or an Associated Company of the Company, or in relation to an application for relief under section 205(5) of the Companies Act. The

233 Company may do anything to enable such Relevant Officer to avoid incurring such expenditure.

5.4 Dividends (a) The Company may, by ordinary resolution, declare final dividends to be paid to its shareholders. However, no dividend shall be declared unless it has been recommended by the Directors and does not exceed the amount recommended by the Directors.

(b) If the Directors believe that the profits of the Company justify such payment, they may pay dividends on any class of share where the dividend is payable on fixed dates. They may also pay interim dividends on shares of any class in amounts and on dates and periods as they think fit. Provided the Directors act in good faith, they shall not incur any liability to the holders of any shares for any loss they may suffer by the payment of dividends on any other class of shares having rights ranking equally with or behind those shares. (c) Unless the share rights otherwise provide, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid, and apportioned and paid pro rata according to the amounts paid on the shares during any portion or portions of the period in respect of which the dividend is paid. (d) Any unclaimed dividends may be invested or otherwise applied for the benefit of the Company until they are claimed. Any dividend unclaimed for 12 years from the date on which it was declared or became due for payment shall be forfeited and shall revert to the Company. (e) The Directors may, if authorised by ordinary resolution, offer to ordinary shareholders the right to elect to receive, in lieu of a dividend, an allotment of new Ordinary Shares credited as fully paid.

5.5 Failure to supply an address A shareholder who has no registered address within the United Kingdom and has not supplied to the Company an address within the United Kingdom for the service of notices will not be entitled to receive notices from the Company.

5.6 Disclosure of shareholding ownership The Disclosure and Transparency Rules require a member to notify the Company if the voting rights held by such member (including by way of certain financial instruments) reach, exceed or fall below three per cent. and each one per cent. threshold thereafter up to 100 per cent. Under the Disclosure and Transparency Rules, certain voting rights in the Company may be disregarded.

5.7 Changes in capital The provisions of the Articles governing the conditions under which the Company may alter its share capital are no more stringent that the conditions imposed by the Companies Act.

6. Directors and Senior Management 6.1 The Directors and members of Senior Management, their functions within the Group and brief biographies are set out in Part X: “Directors, Senior Management and Corporate Governance”.

6.2 The companies and partnerships of which the Directors and members of Senior Management are, or have been, within the past five years, members of the administrative, management or supervisory

234 bodies or partners (excluding the Company and its subsidiaries and also excluding the subsidiaries of the companies listed below) are as follows:

Name Current directorships/partnerships Former directorships/partnerships ——————— ———————————————— ———————————————— David Howell – Aquis Hotels Ltd The Berkley Group Holdings PLC YouTravel.com Ltd Hatchford Park Residents Ltd Stelow Ltd Ian Sutcliffe Ashtead Group PLC Airport Property GP (No.2 Ltd Allnatt London Properties PLC Bilton PLC Brixton Ltd Castle 1 Ltd Cygnet Midco Ltd Cygnet Topco Ltd K&A Merger Ltd Keepmoat Ltd Lakeside 1 Ltd Primavera Asset Management LLP Segro Public Limited Company Slough Trading Estate Ltd Surrey Connections Ltd Rebecca British Property Federation Aga Rangemaster Group PLC Worthington Hansteen Holdings PLC Albion Properties Colchester Ltd Lodestone Capital Ltd Albion Properties Norwich Ltd Lodestone Capital Partners LLP Albion Property Investments Ltd Paw Consulting Ltd Arrow Valley Management Company Ltd Basepraise Ltd BQL Ltd Cadmount Properties Ltd Cadmus Investment Company Ltd Chantry Court Westbury Ltd Chantry Court Westbury No. 2 Ltd Chesterfield (Neathouse) Ltd Chesterfield (No.6) Ltd Chesterfield (No.7) Ltd Chesterfield (No.8) Ltd Chesterfield (No.9) Ltd Chesterfield (No.29) Ltd Chesterfield (No.30) Ltd Chesterfield (No.40) Ltd Chesterfield (No.41) Ltd Chesterfield Investments (No.1) Ltd Chesterfield Investments (No.5) Ltd Chesterfield Stourbridge Ltd Chestergrove Ltd Chestermount Properties Ltd Clarke House Ltd Cle Residential Ltd Columbia Centre (Holdings) Ltd

235 Name Current directorships/partnerships Former directorships/partnerships ——————— ———————————————— ———————————————— Rebecca Comchester Properties Ltd Worthington Comgrove Properties Ltd (continued) Corfield Properties Ltd Corsham Street Student 1 Ltd Corsham Street Student 2 Ltd Cosec7 Ltd Croydon Land (Holdings) Ltd Croydon Properties Ltd Disknote Ltd Emersons Green Development Company Ltd English & Overseas Properties PLC Epic Commercial Properties Ltd Epic London Properties Ltd Estates Property Investment Company (Holdings) Ltd Estates Property Investment Company Ltd Factory Holdings Group Ltd Fasttrack Homes Ltd Flatplate Ltd G.C.T.(North Finchley)Ltd George Wilson Developments (Dover) Ltd Gideon 1 Ltd Gideon 2 Ltd Gideon 3 Ltd Gideon 4 Ltd Giltvote Ltd GPRL Gp Retail Ltd GPRL Retail Ltd Grange 31 Warrington (61)(No. 1) Ltd Grange 31 Warrington (61)(No. 2) Ltd Hinchrise Ltd IQ (Shareholder GP) Ltd Keswick Holdings Ltd Knight Dragon Investments Ltd Letterbag Ltd Listed Offices Ltd Meadowcourt Management (Meadowhall) Ltd NPS European Property (Walworth Road) Lettings GP1 Ltd NPS European Property (Walworth Road) Lettings GP2 Ltd Orderthread Ltd Peninsula Quays Ltd Penwind Ltd Permitobtain Ltd Qhere Ltd Qoin Ltd Quantum Property Partnership (General Partner) Ltd

236 Name Current directorships/partnerships Former directorships/partnerships ——————— ———————————————— ———————————————— Rebecca Quantum Property Partnership Worthington (Nominee) Ltd (continued) Quart (General Partner) Ltd Quaystone Properties Ltd Quercus (General Partner) Ltd Quintain Estates And Development PLC Quintessential Homes Ltd Quivercare Ltd Quo Vadis Estates Ltd Quocumque Ltd Quondam Estates Ii Ltd Quondam Estates Investments Ltd Quondam Estates Ltd Quondam Properties Ltd Qwest Ltd Riverside One Management Ltd South East Properties (Redhill) Ltd Tenstall Ltd The Crystal Peaks Investment Company Ltd Triplemanor Ltd The Greenwich Point Development Company Ltd Timberlaine Ltd Triplemanor Ltd Velocity 330 Ltd Viaduct Properties Ltd Wembley Park Residential Management Company Ltd Woolwich Investment Company Ltd Federico OCM Luxembourg Coppice – Canciani Topco S.à r.l. James Van Accord Topco Ltd Pegasus New Homes Ltd Steenkiste Ainscough Crane Hire R&R Ice Cream PLC Bavaria Yachtbau GmbH Barruecopardo Joint Venture BV Ormonde Mining PLC Pegasus Life Ltd Saloro SL Silver Holdings AS Tungsten Mining JV SLU Lulworth Coastal Property LLP

237 Name Current directorships/partnerships Former directorships/partnerships ——————— ———————————————— ———————————————— Richard Adam Carillion plc Zattikka PLC Countrywide PLC BSF Newco Ltd 1st Insulation Partners Ltd Carillion International (Construction A.F.R. Ltd Projects) Ltd Building Environmental Hygiene Ltd Carillion Richardson Thanet Ltd Cultural Community Solutions Ltd CR Thanet General Partner Ltd Dudley Bower Group PLC Debind International (UK) Ltd E.J. Horrocks Ltd EAGA Renewables Ltd Everprime Ltd General Workers Stevedores Ltd Formsole Ltd Horrocks Group PLC George Howe Ltd Infrastructure Investments (Defence) Planned Maintenance Engineering Ltd Ltd Postworth Ltd Infrastructure Investments (Health) Represent Ltd Ltd R.G. Francis Ltd Lawgra (No.975) Ltd Stiell Inframan Ltd Nationbrook Ltd The Carillion Construction Company Protocol Communications (East Africa) Ltd Management Ltd TPS Consult Ltd Permarock Products Ltd Warmsure Ltd Real Partnership Ltd W A Investments Ltd Rt (Bridgend) Ltd Renewable Clean Energy Ltd Shootersway Berkhamsted Management Ltd U.K. Fastrack Ltd Wincanton PLC Baroness Sally Dixons Carphone PLC Southern Cross Healthcare Group Morgan Future Leaders Charitable Trust Ltd PLC Infinis Energy PLC The Mayor’s Fund For London Schools and Teachers Innovating for Results Teaching Leaders The Frontline Organisation Centre For Reform Amanda Jane HSS Hire Group PLC Fresca Group Ltd Burton Monitise PLC Galliford Try PLC Battersea Dogs’ And Cats’ Home M & W Mack Trustees Ltd Chapman Hall Gray Ltd OSC Services Pvt Ltd Dunwoodie & Co. Ltd Oscar Services Ltd Robinson, David & Co. Ltd 00616470 Ltd Sabah Timber (Midlands & Wales) Crossley Ferguson Ltd Ltd Gabriel Wade (Wales) Ltd William Evans & Company (Widnes) Ltd Graham Cherry Cherry Pickings Ltd Benenden School (Kent) Ltd MY 76C Ltd Stonebond Ltd Stonebond Properties Ltd Richard Cherry Stonebond Ltd Stonebond Properties Ltd David Simpson Sundridge Park Management Company Ltd

238 Name Current directorships/partnerships Former directorships/partnerships ——————— ———————————————— ———————————————— Gary Whitaker – Xchanging PLC Accelerated Collection Services Ltd Brokitas Ltd Ferguson, Snell And Associates Ltd Future Business Training (City Of London) Ltd Infrex Ltd Landmark Business Consulting Ltd Linden Chase Residents Ltd Xchange Ltd Xpanse Ltd Xpanse No. 2 Ltd 6.3 Save as set out above, none of the Directors, any member of the Senior Management or the Company Secretary has any business interests, or performs any activities, outside the Group which are significant with respect to the Group. 6.4 There are no family relationships between any Directors, between any members of Senior Management or between any Directors and members of Senior Management, save that Richard Cherry and Graham Cherry are brothers. 6.5 As of the date of this Prospectus, none of the Directors or any member of Senior Management has, at any time within the last five years: 6.5.1 had any prior convictions in relation to fraudulent offences; 6.5.2 been declared bankrupt or been the subject of any individual voluntary arrangement; 6.5.3 been associated with any bankruptcies, receiverships or liquidations when acting in the capacity of a member of the administrative, management or supervisory body or of a senior manager, save that (A) Baroness Sally Morgan was a non-executive director of Southern Cross Healthcare Group plc, which entered into a company voluntary arrangement in 2012, from 2006 to 2011; and (B) Richard Adam was a non-executive director of Zattikka plc, which went into administration in 2013, from 2012 to 2013; 6.5.4 been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including designated professional bodies);

6.5.5 been disqualified by a court from acting in the management or conduct of the affairs of any company;

6.5.6 been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of any company;

6.5.7 been a partner or senior manager in a partnership which, while he was a partner or within 12 months of his ceasing to be a partner, was put into compulsory liquidation or administration or which entered into any partnership voluntary arrangement;

6.5.8 owned any assets which have been subject to a receivership or been a partner in a partnership subject to a receivership where he was a partner at a time or within the 12 months preceding such event; or

6.5.9 been an executive director or senior manager of a company which has been placed in receivership, compulsory liquidation, creditors’ voluntary liquidation or administration or which entered into any company voluntary arrangement or any composition or arrangement with its creditors generally or any class of creditors, at any time during which he was an executive director or senior manager of that company or within 12 months of his ceasing to be an executive director or senior manager.

239 6.6 The total amount set aside or accrued by the Company or its subsidiaries to provide pension, retirement or similar benefits for the Directors for the year ended 30 September 2015 was £87,873.24.

6.7 Save as set out in paragraph set out in paragraph 13.1 of Part XVIII: “Additional Information— Material contracts—Underwriting Agreement” and paragraph 13.2 of Part XVIII: “Additional Information—Material contracts—Deeds of Election”, there are no restrictions agreed by any Director or Senior Manager on the disposal within a certain time of their holdings in the Company’s securities.

7. Directors’ Service Agreements, Letters of Appointment and Remuneration 7.1 Executive Directors Group Chief Executive Ian Sutcliffe is employed as Group Chief Executive under a service agreement with Countryside Properties (UK) Limited dated 29 January 2016. He is entitled to a base salary of £500,000 per annum and to a discretionary performance-related bonus, which may be up to a cap as set out in the Shareholder approved remuneration policy in place from time to time. The bonus award is determined by the Remuneration Committee.

He is entitled to 30 days’ paid holiday per annum (in addition to public and bank holidays in England and Wales). The Group Chief Executive is eligible to participate in a pension scheme operated by the Group, but can opt out of the scheme and receive an amount equal to 25 per cent. of his base salary as a non-pensionable cash supplement paid in monthly instalments. Given the cash supplement attracts employer’s national insurance contributions, the payment is reduced by such amount so that when employer’s national insurance contributions are added the amount due to Mr Sutcliffe results in no greater cost to the Company. He also receives a car allowance, private health insurance and permanent health insurance and death in service life assurance. His service agreement contains a confidentiality clause that is without limit in time, along with non-solicit and non-poaching covenants for a 12 month period and a non-compete restrictive covenant for a 6 month period. His service agreement is terminable by either party on not less than 12 months’ written notice or immediately upon payment in lieu of notice and contains a garden leave clause.

Group Chief Financial Officer Rebecca Worthington is engaged as Group Chief Financial Officer under a service agreement with Countryside Properties (UK) Limited dated 29 January 2016. She is entitled to a salary of £300,000 per annum and to a discretionary performance-related bonus, which may be up to a cap as set out in the Shareholder approved remuneration policy in place from time to time. The bonus award is determined by the Remuneration Committee. She is entitled to 30 days’ paid holiday per annum (in addition to public and bank holidays in England and Wales). She is eligible to participate in a pension scheme operated by the Group. She also receives a car allowance, private health insurance and permanent health insurance and death in service life assurance. Her service agreement contains a confidentiality clause that is without limit in time, along with non-solicit and non-poaching covenants for a 12 month period and a non-compete restrictive covenant for a 6 month period. Her service agreement is terminable by either party on not less than 12 months’ written notice or immediately upon payment in lieu of notice and contains a garden leave clause.

7.2 Non-Executive Directors Chairman David Howell’s appointment as Chairman is subject to the terms of a letter of appointment agreed between him and the Company dated 22 December 2015.

Mr Howell is entitled to an annual fee of £150,000 for up to two days’ work per week, which includes consideration for chairing the Nomination Committee and for being a member of the Remuneration Committee. He will be entitled to an additional fee if he is required to perform any specific and additional services. The Chairman is not entitled to receive any compensation on termination of his

240 appointment (other than payment in respect of a notice period where notice is served) and is not entitled to participate in the Company’s share, bonus or pension schemes, and is entitled to be reimbursed all reasonable out-of-pocket expenses incurred in the proper performance of his duties. Mr Howell is subject to confidentiality undertakings without limitation in time.

Mr Howell’s appointment may be terminated at any time upon 6 months’ written notice. The appointment may also be terminated pursuant to the Articles or as otherwise required by law. He is subject to annual re-election by the Company in general meeting. The Company has customary directors’ and officers’ indemnity insurance in place in respect of each non-executive director and each non-executive director has the benefit of an indemnity against directors’ liability set out in the Articles.

Other Non-Executive Directors The Non-Executive Directors do not have service contracts, although they each have a letter of appointment reflecting their responsibilities and commitments.

The appointments of all the Non-Executive Directors may be terminated at any time upon 3 months’ written notice. They may also be terminated pursuant to the Articles or as otherwise required by law. They are all subject to annual re-election by the Company in general meeting. A Non-Executive Director will be entitled to an additional fee if s/he is required to perform any specific and additional services. They are not entitled to receive any compensation on termination of their appointment (save for notice, where due) and are not entitled to participate in the Company’s share, bonus or pension schemes. They are all entitled to the reimbursement of reasonable expenses. They are all subject to confidentiality undertakings without limitation in time. The Company has customary directors’ and officers’ indemnity insurance in place in respect of each of them and they have the benefit of an indemnity against directors’ liability set out in the Articles.

The terms of the Non-Executive Directors’ letters of appointment are summarised below:

Appointment Name of Director Title Letter Date Fee per Annum ———————— ——————————————— —————— —————————— Richard Adam Senior Independent Non-Executive 21 December £45,000, £5,000 to Director 2015 chair the Audit Committee and £5,000 to be the Senior Independent Director Baroness Sally Independent Non-Executive 17 December £45,000 Morgan Director 2015 Amanda Burton Independent Non-Executive 17 December £45,000 and £5,000 to Director 2015 chair the Remuneration Committee Federico Canciani Non-Executive Director 17 December No fees payable 2015 James Van Non-Executive Director 17 December No fees payable Steenkiste 2015 7.3 Remuneration Policy 7.3.1 Overview of Remuneration Policy The Company’s aim is to attract, retain and motivate the best talent to help ensure continued growth and success as it enters the next stage of its development operating as a listed company.

The remuneration policy aims to align the interests of the Executive Directors and employees with the long-term interests of shareholders and aims to support a high performance culture with appropriate

241 reward for superior performance without creating incentives that will encourage excessive risk taking or unsustainable Company performance.

Overall remuneration levels have been set at levels that are considered by the Remuneration Committee to be appropriate for the size and nature of the business, having taken independent advice where necessary, in order to ensure that the policies and remuneration structure is appropriate for the listed company environment.

To support this aim, the Board has adopted the following incentive plans:

(a) the Countryside Properties plc Deferred Bonus Plan;

(b) the Countryside Properties plc Long Term Incentive Plan (the “LTIP”), which is the Company’s primary long term share based incentive vehicle; and

(c) an HMRC approved all-employee save as you earn plan (the “SAYE”) in which Executive Directors are able to participate.

Details of the incentive plans are set out in paragraph 10 of this Part XVIII: “Additional Information— Employee share plans”.

The following information summarises the key components of the Executive Director and Non-executive Director remuneration arrangements which will form part of the remuneration policy subject to formal approval by shareholders at the first Annual General Meeting (“AGM”) of the Company following Admission in accordance with the regulations set out in the Large and Medium-sized Companies and Groups (Accounts and Report) (Amendment) Regulations 2013. It is intended that this policy will apply for three years from that date, and that it will be operated for the period from admission to that meeting.

The details of the Group’s Executive Director and Non-executive Director remuneration for the financial year, including the operation of the Group’s incentive plans and payments made under them, will be set out each year in an annual report on remuneration contained in the Group’s annual report, as per the requirements of the relevant statutory instrument.

7.3.2 Executive Directors’ Remuneration Summary Base salary • Objective and link to strategy: Recognises the market value of an Executive Director’s role, skill, responsibilities, performance and experience.

• Operation: Salaries are reviewed annually, with any changes effective as of 1 October each year. Reviews will not take place outside this normal cycle other than in exceptional circumstances.

• Maximum opportunity: Salaries are set by reference to a market benchmark based on companies of a comparable size operating in a similar sector. Salary reviews will also take into consideration an individual’s performance, responsibility levels and internal relativities. Increases will normally be only for inflation and/or in line with the wider workforce. For the financial year ending 30 September 2016, the salary of the CEO is £500,000 and the CFO £300,000. Individuals who are recruited or promoted to the Board may, on occasion, have their salaries set below the targeted policy level until they become established in their role. In such cases above inflation increases may be made subject to performance.

• Performance measures and assessment: Not applicable.

Other benefits • Objective and link to strategy: Provides a market competitive package.

• Operation: Reviewed periodically to ensure benefits remain market competitive. Benefits include a car or car allowance; life, personal accident, disability and health insurance; travel

242 insurance; and other benefits, including flexible benefits, as provided from time to time, for example where a director relocates.

• Maximum opportunity: Benefit values vary year on year depending on premiums and the maximum potential value is the cost of the provision of these benefits.

• Performance measures and assessment: Not applicable.

Annual bonus scheme • Objective and link to strategy: The annual bonus is designed to incentivise the Executive Directors to deliver against goals linked to the Company’s strategy. Long-term alignment with shareholder interests is ensured through the deferral element. • Operation: Bonus awards will be granted annually. The performance period is one financial year with payout determined by the Remuneration Committee following the year end, based on achievement against a range of performance targets. Two-thirds of the bonus award will be paid out in cash with the remaining one-third deferred into shares for a period of three years (subject to continued employment). Bonuses relating entirely to periods prior to Admission will not be subject to deferral. Malus and clawback arrangements will apply to annual bonus awards enabling the reduction in vesting or recovery of amounts paid in certain circumstances. • Maximum opportunity: 150 per cent. of salary. Participants may be entitled to dividends or dividend equivalents on the deferred shares representing the dividends paid during the deferral period. • Performance measures and assessment: Performance targets will be set by the Remuneration Committee annually based on a range of financial and strategic measures. At least 50 per cent. of the bonus will be based on financial measures in any year.

LTIP • Objective and link to strategy: The LTIP is designed to incentivise Executive Directors to successfully deliver the Company’s objectives over the longer term and to drive alignment with investors over this period. • Operation: Awards of conditional shares may be made under the LTIP. Awards will vest three years from the date of grant subject to achievement against performance measures, subject to malus and clawback provisions enabling the reduction in vesting or recovery of amounts paid in certain circumstances. The Remuneration Committee wishes to ensure that Countryside’s remuneration policy is appropriately flexible through the Company’s transition from the private to listed environment. As such, the Remuneration Committee retains the flexibility to incorporate a two year post-vest holding period as part of the LTIP in which Executive Directors will not be permitted to sell awarded shares. This would take the total period from grant to release of LTIP shares to five years. The Committee does not anticipate operating this period in the first cycle of awards under the plan. • Maximum opportunity: The maximum LTIP award level is 200 per cent. of base salary. Participants may be entitled to dividends or dividend equivalents representing the dividends paid during the performance period on LTIP awards. • Performance measures and assessment: LTIP performance will be assessed against core financial metrics potentially including (but not limited to): Relative Total Shareholder Return (“TSR”), TNAV and ROCE. The Remuneration Committee will review and set weightings for measures and appropriate targets before each grant. The Remuneration Committee may change the balance of the measures, or use different measures for subsequent awards as appropriate.

Pension • Objective and link to strategy: To aid retention and to provide competitive levels of retirement benefit.

243 • Operation: Pension contributions will be made into the Company’s defined contribution scheme. Alternatively, a participant may opt out of the scheme and receive a non-pensionable cash supplement (typically in the scenario where that participant has reached the lifetime allowance for pension tax relief set by HMRC or the pension contribution exceeds the yearly tax-free limit). • Maximum opportunity: The pension opportunity for Executive Directors will be set in line with market rates. • Performance measures and assessment: Not applicable.

SAYE • Objective and link to strategy: The purpose of this plan is to encourage all employees to become shareholders in the Company and thereby align their interests with shareholders. • Operation: Executive Directors are able to participate in savings based share plans available to all employees of the Company. • Maximum opportunity: The maximum participation levels will be the applicable limits set by HMRC. • Performance measures and assessment: Not applicable.

7.3.3 Non-Executive Directors’ Remuneration Summary • Objective and link to strategy: Provides a level of fees to support recruitment and retention of Non- Executive Directors with the necessary experience to advise and assist with establishing and monitoring the group’s strategic objectives. • Operation: Non-Executive Directors are paid a base fee and additional fees for chairmanship of committees and the role of Senior Independent Director. In exceptional circumstances, fees may also be paid for additional time spent on the Company’s business outside of the normal duties. • Maximum opportunity: Fees are reviewed annually. The Company will pay reasonable expenses incurred by the Chairman and Non-Executive Directors. Any increases in fees will be determined based on time commitment and will take into consideration the level of responsibility and fees paid in other companies of comparable size and complexity. Non-Executive Directors do not receive any variable remuneration element or receive any other benefits, other than being covered for disability benefits. • Performance measures and assessment: Not applicable.

It is the Remuneration Committee’s intention that commitments made in line with its policies prior to Admission will be honoured, even if satisfaction of such commitments is made after the Company’s first AGM following Admission and may be inconsistent with the above policies.

7.4. Directors’ and Senior Management’s remuneration for the financial year ended 30 September 2015 The amount of remuneration paid (including salary and other emoluments) and benefits in kind granted to each of the Executive Directors for services in all capacities by the Group for the financial year ended 30 September 2015 are set out below:

Pension Basic contributions Executive salary and Taxable (or cash in lieu) Director fees (£) Bonus (£) benefits (£) Total ––––––––––––––––––––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– Ian Sutcliffe...... £433,333.32 £400,000 £3,233.56 £208,333.33 £1,044,900.21 Rebecca Worthington...... £50,000.00(1) N/A £1,819 £5,000 £56,819

Notes: (1) Rebecca Worthington jointed the Group as Group Chief Financial Officer on 1 August 2015.

244 The figures above represent actual salary, pension and benefits received, bonus awarded and share based payments in respect of 2015.

The aggregate remuneration paid and benefits in kind granted to the Directors and Senior Management by the Company and its subsidiaries during the year ended 30 September 2015 was £3,779,463.77.

The aggregate remuneration paid (including benefits) to Non-Executive Directors for the financial year ended 30 September 2015 was £225,000.

The aggregate remuneration paid (including salary and other benefits) to the Senior Management team (excluding the Directors) for the year ended 30 September 2015 was £2,450,519.76 of which £1,185,000.00 comprised salaries, £230,500 comprised retirement benefits or cash in lieu of pension, £1,008,688 annual variable remuneration, and £13,806.96 taxable benefits.

8. Interests of the Directors and Senior Management 8.1 The table below sets out the interests of the Directors and Senior Management in the share capital of the Company (all of which, unless otherwise stated, are beneficial and include the interest of persons connected with them) immediately prior to Admission and immediately following Admission.

Following Pre-IPO Reorganisation and immediately Immediately following prior to Admission(1) Admission(2) –––––———––––––––––– –––––———––––––––––– Number of Percentage of Number of Percentage of Ordinary issued share Ordinary issued share Shares capital Shares capital –––––––– –––––––– –––––––– –––––––– Name of Director David Howell ...... – 0.0 – 0.0 Ian Sutcliffe...... 9,785,996 2.5 9,785,996 2.2 Rebecca Worthington...... 952,289 0.2 952,289 0.2 Federico Canciani ...... – 0.0 – 0.0 James Van Steenkiste ...... – 0.0 – 0.0 Richard Adam ...... – 0.0 – 0.0 Baroness Sally Morgan...... – 0.0 – 0.0 Amanda Burton...... – 0.0 – 0.0 Name of Senior Manager Graham Cherry(3)...... 17,679,091.5 4.4 17,679,091.5 3.9 Richard Cherry(3) ...... 17,679,091.5 4.4 17,679,091.5 3.9 David Simpson...... 2,576,344 0.6 2,576,344 0.6 Gary Whitaker...... 315,718 0.1 315,718 0.1

Notes: (1) Assumes the Offer Price is set at the mid-point of the Offer Price Range. (2) Assumes the Offer Price is set at the mid-point of the Offer Price Range. It does not take into account the potential sale or purchase of Ordinary Shares by any Director or Senior Manager as part of the Global Offer or any share awards to be made on or shortly following Admission pursuant to the Company’s employee share plans (further details of which are set out in paragraph 10 of this Part XVIII: “Additional Information—Employee share plans”. (3) Includes beneficial interests in Ordinary Shares held through the Alan Cherry Copthorn Will Trust. 8.2 The interests of the Directors and Senior Management together are expected to represent 12.3 per cent. of the issued share capital of the Company immediately prior to Admission and are expected to represent approximately 10.9 per cent. of the issued share capital of the Company immediately following Admission (in each case assuming the Offer Price is set at the mid-point of the Offer Price Range) not taking account the potential sale or purchase of Ordinary Shares by any Director or Senior

245 Manager as part of the Global Offer or any share awards to be made on or shortly following Admission pursuant to the Company’s employee share plans.

8.3 Save as set out in this paragraph 8 and in Part XIV: “Historical Financial Information”, none of the Directors has any interests in the share or loan capital of the Company or any of its subsidiaries.

8.4 Save as set out in this paragraph 8, no Director has or has had any interest in any transaction which is or was unusual in its nature or conditions or is or was significant to the business of the Group and was effected by the Company in the current or immediately preceding financial year or was effected during an earlier financial year and remains in any respect outstanding or unperformed.

8.5 As of 29 January 2016 (being the latest practicable date prior to the date of this Prospectus), there were no outstanding loans granted by any member of the Group to any Director or member of Senior Management, nor by any Director or member of Senior Management to any member of the Group, nor was any guarantee which had been provided by any member of the Group for the benefit of any Director or member of Senior Management, or by any Director or member of Senior Management for the benefit of any member of the Group, outstanding.

8.6 Each Director and Senior Manager may, at his or her sole discretion, sell up to 30 per cent. of his or her pre-Admission holdings of Existing Shares as part of the Global Offer.

9. Interests of significant Shareholders 9.1 Other than any interest that may arise under the Underwriting Agreement, insofar as it is known to the Company as of the date of this Prospectus, the following persons will immediately prior to Admission or immediately following Admission be interested in, 3 per cent. or more of the Company’s issued ordinary share capital.

Following Pre-IPO Reorganisation and immediately Interests immediately prior to Admission(1) following Admission(2) –––––———––––––––––– –––––———––––––––––– Percentage of Percentage of Number of issued share Number of issued share Shareholder Shares capital Shares capital ——————————————— –––––––– –––––––– –––––––– –––––––– OCM Luxembourg Coppice Topco S.à r.l...... 335,134,716 84.2 172,214,019 38.3 Graham Cherry(3)(4) ...... 17,679,091.5 4.4 17,679,091.5 3.9 Richard Cherry(3)(4) ...... 17,679,091.5 4.4 17,679,091.5 3.9

Notes: (1) Assumes Offer Price is set at the mid-point of the Offer Price Range. (2) Assumes the Offer Price is set at the mid-point of the Offer Price Range, the Oaktree Sale Share Offer Size is set at the mid-point of the Oaktree Sale Share Offer Size Range and the Over-allotment Option is not exercised. (3) Assumes the Offer Price is set at the mid-point of the Offer Price Range and does not take into account the potential sale or purchase of Ordinary Shares by any such person as part of the Global Offer or any share awards to be made on or shortly following Admission pursuant to the Company’s employee share plans. (4) Includes beneficial interests in Ordinary Shares held through the Alan Cherry Copthorn Will Trust.

9.2 Save as set out above the Company is not aware of any holdings of voting rights (within the meaning of Chapter 5 of the Disclosure and Transparency Rules) which will represent 3 per cent. or more of the total voting rights in respect of the issued share capital of the Company following Admission.

9.3 There are no differences between the voting rights enjoyed by the Principal Shareholder as set out in A1.18.2 this paragraph 9 and those enjoyed by any other holder of Ordinary Shares in the Company.

246 10. Employee share plans 10.1 Overview of the New Plans Following Admission, the Company intends to operate two discretionary share plans: the Countryside Properties plc Long Term Incentive Plan (the “LTIP”) and the Countryside Properties plc Deferred Bonus Plan (the “DBP”). In addition, the Company has also established the Countryside Properties plc Save As You Earn Plan (the “SAYE Plan”), which is an all-employee share plan. The LTIP and DBP are, together, the “Discretionary Plans”, and the Discretionary Plans and the SAYE Plan are, together, the “New Plans”.

A reference in this paragraph 10 to the Board includes any designated committee of the Board. Participation in the LTIP by the Executive Directors and the terms of their participation will be determined by the Remuneration Committee.

Information on certain awards to be made at or following Admission and the principal features of the New Plans are summarised below.

10.2 The LTIP 10.2.1 Status The LTIP is a discretionary executive share plan. Under the LTIP, the Board may, within certain limits and subject to any applicable performance conditions, grant to eligible employees: (i) nil cost options over Ordinary Shares (“LTIP Options”) and/or (ii) conditional awards (i.e. a conditional right to acquire Ordinary Shares) (“LTIP Conditional Awards”) and/or (iii) Ordinary Shares which are subject to restrictions and the risk of forfeiture (“LTIP Restricted Shares”, and together with LTIP Options and LTIP Conditional Awards, “LTIP Awards”). Where the participant becomes entitled to the Ordinary Shares, the LTIP Award is said to have vested. 10.2.2 Eligibility All employees (including executive directors) of the Group are eligible for selection to participate in the LTIP at the discretion of the Board, although it is intended that the LTIP will be operated for senior management. 10.2.3 Grant of LTIP Awards The Board may grant LTIP Awards over Ordinary Shares to eligible employees with a maximum total market value in any financial year of up to 200 per cent. of the relevant individual’s annual base salary. It is anticipated that the first grant of LTIP Awards will be made at or shortly after Admission and for the first grant of LTIP Awards, the Board reserves the right to calculate market value by reference to the Offer Price. The initial grant to each Executive Director will be over Ordinary Shares with a market value of 200 per cent. of salary. LTIP Awards may be granted during the 42 days beginning on: (i) Admission; (ii) the day after the announcement of the Company’s results for any period; (iii) any day on which the Board determines that circumstances are sufficiently exceptional to justify the making of the LTIP Award at that time; or (iv) the day after the lifting of any dealing restrictions. However, no LTIP Awards may be granted more than 10 years from the date when the LTIP is adopted, which is expected to be shortly before Admission. 10.2.4 Holding period At its discretion, the Board may grant LTIP Awards subject to a holding period of a maximum of two years following vesting.

10.2.5 Performance and other conditions The Board may impose performance conditions on the vesting of LTIP Awards. Where performance conditions are specified for LTIP Awards, the underlying measurement period

247 for the conditions will ordinarily be three years. The proposed performance condition measures and weightings for the first grant of LTIP Awards are the following: TSR (30 per cent. weighting), ROCE (35 per cent. weighting) and TNAV (35 per cent. weighting).

Any performance conditions applying to LTIP Awards may be varied, substituted or waived if the Board considers it appropriate, provided the Board considers that the new performance conditions are reasonable and are not materially less difficult to satisfy than the original conditions (except in the case of waiver).

The Board may also impose other conditions on the vesting of LTIP Awards.

10.2.6 Malus The Board may decide, at the vesting of LTIP Awards or at any time before, that the number of Ordinary Shares subject to an LTIP Award will be reduced (including to nil) on such basis that the Board in its discretion considers to be fair and reasonable in the following circumstances:

• discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group company;

• the assessment of any performance condition or condition in respect of an LTIP Award was based on error, or inaccurate or misleading information;

• the discovery that any information used to determine the number of Ordinary Shares subject to an LTIP Award was based on error, or inaccurate or misleading information;

• action or conduct of a participant which amounts to fraud or gross misconduct; or

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

10.2.7 Vesting and exercise LTIP Awards will normally vest, and LTIP Options will normally become exercisable, on the third anniversary of the date of grant of the LTIP Award to the extent that any applicable performance conditions have been satisfied and to the extent permitted following any operation of malus or clawback. LTIP Options will remain exercisable for a period determined by the Board at grant which will not exceed 10 years from grant.

10.2.8 Clawback The Board may apply clawback to all or part of a participant’s LTIP Award in substantially the same circumstances as apply to malus (as described above) during the period of two years following the vesting of an LTIP Award. Clawback may be effected, among other means, by requiring the transfer of Ordinary Shares, payment of cash or reduction of LTIP Awards.

10.2.9 Cessation of employment Except in certain circumstances, set out below, an LTIP Award will lapse immediately upon a participant ceasing to be employed by or holding office with the Group.

If a participant ceases to be employed because of ill-health, injury, disability, redundancy, retirement with the agreement of his employer, the participant being employed by a company which ceases to be a Group company or being employed in an undertaking which is transferred to a person who is not a Group company or in other circumstances at the discretion of the Board (each, an “LTIP Good Leaver Reason”), the participant’s LTIP Award will ordinarily vest on the date when it would have vested if the participant had not so ceased to be a Group employee or director, subject to the satisfaction of any applicable performance

248 conditions measured over the original performance period and the operation of malus or clawback. In addition, unless the Board decides otherwise, vesting will be pro-rated to reflect the reduced period of time between grant and the participant’s cessation of employment as a proportion of the normal vesting period.

If a participant ceases to be a Group employee or director for an LTIP Good Leaver Reason, the Board can alternatively decide that the participant’s LTIP Award will vest early when the participant leaves. If a participant dies, a proportion of the participant’s LTIP Award will normally vest on the date of death. The extent to which an LTIP Award will vest in these situations will be determined by the Board at its absolute discretion taking into account, among other factors, the period of time the LTIP Award has been held and the extent to which any applicable performance conditions have been satisfied at the date of cessation of employment and the operation of malus or clawback. In addition, unless the Board decides otherwise, vesting will be pro-rated to reflect the reduced period of time between grant and the participant’s cessation of employment as a proportion of the normal vesting period.

To the extent that LTIP Options vest for an LTIP Good Leaver Reason, they may be exercised for a period of six months following vesting (or such longer period as the Board determines) and will lapse at the end of that period. To the extent that LTIP Options vest following death of a participant, they may normally be exercised for a period of 12 months following death and will lapse at the end of that period.

10.2.10 Corporate events In the event of a takeover, scheme of arrangement, or winding-up of the Company, the LTIP Awards will vest early. The proportion of the LTIP Awards which vest will be determined by the Board taking into account, among other factors, the period of time the LTIP Award has been held by the participant and the extent to which any applicable performance conditions have been satisfied at that time.

To the extent that LTIP Options vest in the event of a takeover, scheme of arrangement, or winding-up of the Company they may be exercised for a period of six months measured from the relevant event (or in the case of takeover such longer period as the Board determines) and will otherwise lapse at the end of that period.

In the event of a demerger, distribution or any other corporate event, the Board may determine that LTIP Awards will vest. The proportion of the LTIP Awards which vest will be determined by the Board taking into account, among other factors, the period of time the LTIP Award has been held by the participant and the extent to which any applicable performance conditions have been satisfied at that time. LTIP Options that vest in these circumstances may be exercised during the period as the Board determines and will otherwise lapse at the end of that period.

If there is a corporate event resulting in a new person or company acquiring control of the Company, the Board may (with the consent of the acquiring company) alternatively decide that LTIP Awards will not vest or lapse but will be replaced by equivalent new awards over shares in the new acquiring company.

10.3 The DBP The DBP incorporates the Company’s executive bonus scheme as well as a mechanism for the deferral of bonus into awards over Ordinary Shares. The DBP will operate in respect of the annual bonus earned for the financial year ended 30 September 2016, with the first deferred awards over Ordinary Shares under the DBP to be made in 2016. 10.3.1 Status The DBP is both a cash bonus plan and a discretionary executive share plan under which a proportion of a participant’s bonus may be deferred into an award over Ordinary Shares. Under the DBP, the Board may, within certain limits, grant to eligible employees deferred

249 awards over Ordinary Shares taking the form of: (i) nil cost options over Ordinary Shares (“DBP Options”) and/or (ii) conditional awards (i.e. a conditional right to acquire Ordinary Shares) (“DBP Conditional Awards”) and/or (iii) Ordinary Shares which are subject to restrictions and the risk of forfeiture (“DBP Restricted Shares” and, together with DBP Options and DBP Conditional Awards, “DBP Awards”). No payment is required for the grant of a DBP Award.

10.3.2 Eligibility All employees (including Executive Directors) of the Group are eligible to participate in the DBP at the discretion of the Board.

10.3.3 Bonus opportunity Participants selected to participate in the DBP for a financial year of the Company will be eligible to receive an annual bonus subject to satisfying performance conditions and targets set for that financial year. The Board may determine that a proportion of a participant’s annual bonus will be deferred into a DBP Award. The maximum bonus (including any part of the bonus deferred into a DBP Award) deliverable under the DBP will be 150 per cent. of a participant’s annual base salary. The Board will determine the bonus to be delivered following the end of the relevant financial year.

Except in certain circumstances, a DBP participant who ceases to be employed by or hold office with the Group before the bonus determination is made will cease to be eligible to receive a bonus. However, if a participant so ceases because of death, ill-health, injury, disability, redundancy, retirement with the agreement of the participant’s employer, the participant being employed by a company which ceases to be a Group company or being employed in an undertaking which is transferred to a person who is not a Group company or in other circumstances at the discretion of the Board (each, a “DBP Good Leaver Reason”), the participant will remain eligible for a bonus. The performance conditions and targets will be considered and the bonus will be deliverable in the same way and at the same time as if the individual had not ceased to be employed or hold office with the Group, although, unless the Board otherwise decides, the value of the bonus will be pro-rated to reflect the reduced period of time between the start of the financial year and the participant’s cessation of employment as a proportion of that financial year.

In addition, if a corporate event occurs as described below, a participant will be eligible to receive a bonus as soon as practicable after the relevant event, the amount of which will be determined by the Board in its absolute discretion taking into account the performance conditions and targets. The value of the bonus will be pro-rated to reflect the reduced period of time between the start of the financial year and the relevant corporate event as a proportion of the relevant financial year, unless the Board otherwise decides.

Malus and clawback provisions apply to a bonus awarded under the DBP as described below.

10.3.4 Grant of DBP Awards The Board may determine that a proportion of a participant’s annual bonus will be deferred into a DBP Award.

There is a maximum limit on the market value of Ordinary Shares granted to any employee under a DBP Award of 50 per cent. of the total annual bonus for that individual. For the first grant of DBP Awards that will be made in 2016 in respect of the annual bonus earned in the financial year ended 30 September 2016, the maximum limit on the market value of Ordinary Shares granted to the Executive Directors will be no more than one-third of their total annual bonus. DBP Awards may be granted during the 42 days beginning on: (i) Admission; (ii) the day after the announcement of the Company’s results for any period; (iii) any day on which the Board determines that circumstances are sufficiently exceptional to justify the making of the DBP Award at that time; or (iv) the day after the lifting of any dealing restrictions.

250 No DBP Awards may be granted more than 10 years from the date when the DBP is adopted, which is expected to be shortly before Admission.

10.3.5 Holding period At its discretion, the Board may grant DBP Awards subject to a holding period of a maximum of up to two years following vesting.

10.3.6 Malus The Board may decide: (i) at the time of payment of a cash bonus or at any time before to reduce the amount of the bonus (including to nil); and/or (ii) at the vesting of a DBP Award or any time before, that the number of Ordinary Shares subject to a DBP Award will be reduced (including to nil) on such basis that the Board in its discretion considers to be fair and reasonable in the following circumstances: • discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group company; • the assessment of any performance condition or condition in respect of a DBP Award was based on error, or inaccurate or misleading information; • the discovery that any information used to determine the number of Ordinary Shares subject to a DBP Award was based on error, or inaccurate or misleading information; • action or conduct of a participant which amounts to fraud or gross misconduct; or • events or the behaviour of a participant have led to the censure of a Group company by a regulatory authority or have had a significant detrimental impact on the reputation of any Group company provided that the Board is satisfied that the relevant participant was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to the participant. 10.3.7 Vesting and exercise DBP Awards will normally vest on the third anniversary of the date of grant of the DBP Award to the extent permitted following any operation of malus or clawback. DBP Options will remain exercisable for a period determined by the Board at grant which will not exceed 10 years from the date of grant. 10.3.8 Clawback The Board may apply clawback to all or part of a participant’s cash bonus and/or DBP Award in substantially the same circumstances as apply to malus (as described above) during the period of two years following the determination of the bonus by reference to which the DBP Award was granted. Clawback may be effected, among other means, by requiring the transfer of Ordinary Shares, payment of cash or reduction of awards or bonuses. 10.3.9 Cessation of employment Except in certain circumstances, set out below, a DBP Award will lapse immediately upon a participant ceasing to be employed by or holding office with the Group. If a participant so ceases to be employed because of ill-health, injury, disability, redundancy, retirement with the agreement of the participant’s employer, the participant being employed by a company which ceases to be a Group company or being employed in an undertaking which is transferred to a person who is not a Group company or in other circumstances at the discretion of the Board (each a “DBP Award Good Leaver Reason”), the participant’s DBP Award will ordinarily vest on the date when it would have vested if the participant had not so ceased to be a Group employee or director, subject to the operation of malus and clawback. If a participant ceases to be a Group employee or director for a DBP Award Good Leaver Reason, the Board can alternatively decide that the participant’s DBP Award will vest early when the participant leaves, subject to the operation of malus and clawback. If a participant

251 dies, the participant’s DBP Award will ordinarily vest on the date of the participant’s death, subject to the operation of malus and clawback. To the extent that DBP Options vest for a DBP Award Good Leaver Reason, they may be exercised for a period of six months following vesting (or such longer period as the Board determines) and will otherwise lapse at the end of that period. To the extent that DBP Options vest following the death of a participant, they may be exercised for a period of 12 months following death and will otherwise lapse at the end of that period. 10.3.10 Corporate events In the event of a takeover, scheme of arrangement or winding-up of the Company, the DBP Awards will vest early in full. To the extent that DBP Options vest in the event of a takeover, scheme of arrangement or winding-up of the Company, they may be exercised for a period of six months measured from the relevant event (or in the case of takeover such longer period as the Board determines) and will otherwise lapse at the end of that period. In the event of a demerger, distribution or any other corporate event, the Board may determine that DBP Awards will vest in full. DBP Options that vest in these circumstances may be exercised during the period the Board determines and will otherwise lapse at the end of that period.

If there is a corporate event resulting in a new person or company acquiring control of the Company, the Board may (with the consent of the acquiring company) alternatively decide that DBP Awards will not vest or lapse but will be replaced by equivalent new awards over shares in the new acquiring company.

10.4 Provisions applying to each of the Discretionary Plans 10.4.1 Awards not transferable Awards granted under the Discretionary Plans are not transferable other than to the participant’s personal representatives in the event of the participant’s death provided that awards and Ordinary Shares may be held by the trustees of an employee as nominee for the participants.

10.4.2 Limits The Discretionary Plans may operate over new issue Ordinary Shares, treasury shares or Ordinary Shares purchased in the market. The rules of each of the Discretionary Plans provide that, in any period of 10 calendar years, not more than 10 per cent. of the Company’s issued ordinary share capital may be issued under the relevant plan and under any other employees’ share scheme operated by the Company. In addition, the rules of each of the Discretionary Plans provide that, in any period of 10 calendar years, not more than 5 per cent. of the Company’s issued ordinary share capital may be issued under the relevant plan and under any other discretionary share scheme adopted by the Company. Ordinary Shares issued out of treasury under the relevant Discretionary Plan will count towards these limits for so long as this is required under institutional shareholder guidelines. Ordinary Shares issued or to be issued pursuant to awards granted before Admission or within 42 days beginning on Admission will not count towards these limits. In addition, awards which are renounced or lapse will be disregarded for the purposes of these limits.

10.4.3 Variation of capital If there is a variation of share capital of the Company or in the event of a demerger or other distribution, special dividend or distribution, the Board may make such adjustments to awards granted under each of the Discretionary Plans, including the number of Ordinary Shares subject to awards and the option exercise price (if any), as it considers to be fair and reasonable.

252 10.4.4 Dividend equivalents In respect of any award granted under any of the Discretionary Plans, the Board may decide that participants will receive a payment (in cash and/or additional Ordinary Shares) equal in value to any dividends that would have been paid on the Ordinary Shares which vest under that award by reference to the period between the time when the relevant award was granted and the time when the relevant award vested. This amount may assume the reinvestment of dividends and exclude or include special dividends or dividends in specie.

10.4.5 Alternative settlement At its discretion, the Board may decide to satisfy awards granted under the Discretionary Plans with a payment in cash or Ordinary Shares equal to any gain that a participant would have made had the relevant award been satisfied with Ordinary Shares.

10.4.6 Rights attaching to Ordinary Shares Except in relation to the award of Ordinary Shares subject to restrictions, Ordinary Shares issued and/or transferred under the Discretionary Plans will not confer any rights on any participant until the relevant award has vested or the relevant option has been exercised and the participant in question has received the underlying Ordinary Shares. Any Ordinary Shares allotted when an option is exercised or an award vests will rank equally with Ordinary Shares then in issue (except for rights arising by reference to a record date prior to their issue). A participant awarded Ordinary Shares subject to restrictions will have the same rights as a holder of Ordinary Shares in issue at the time that the participant acquires the Ordinary Shares, save to the extent set out in the agreement with the participant relating to those Ordinary Shares.

10.4.7 Amendments The Board may, at any time, amend the provisions of any of the Discretionary Plans in any respect. The prior approval of the Company at general meeting of the Company in the case of any amendment to the advantage of participants which is made to the provisions relating to eligibility, individual or overall limits, the persons to whom an award can be made under the relevant Discretionary Plan, the adjustments that may be made in the event of any variation to the share capital of the Company and/or the rule relating to such prior approval, save that there are exceptions for any minor amendment to benefit the administration of the relevant Discretionary Plan, to take account of the provisions of any proposed or existing legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants, the Company and/or its other Group companies. Amendments may not normally adversely affect the rights of participants except where participants are notified of such amendment and the majority of participants approve such amendment.

10.4.8 Overseas plans The Board may, at any time, establish further plans based on the LTIP and the DBP for overseas territories. Any such plan will be similar to the LTIP or the DBP, as relevant, but modified to take account of local tax, exchange control or securities laws. Any Ordinary Shares made available under such further overseas plans must be treated as counting against the limits on individual and overall participation under the relevant plan.

10.4.9 Pensionable Benefits The benefits received under the LTIP are not pensionable. Some cash awards under the DBP may be pensionable

253 10.5 The SAYE Plan It is intended to operate the SAYE Plan after Admission.

10.5.1 Status The SAYE Plan is an all-employee savings related share option plan which has been designed to meet the requirements of Schedule 3 of the Income Tax (Earnings and Pensions) Act 2003 so that Ordinary Shares can be acquired by UK employees in a tax-efficient manner.

10.5.2 Eligibility Each time that the Board decides to operate the SAYE Plan, all UK resident tax-paying employees of the Company and its subsidiaries participating in the SAYE Plan must be offered the opportunity to participate. Other employees may be permitted to participate. Participants invited to participate may be required to have completed a minimum qualifying period of employment (which may be up to five years) before they can participate, as determined by the Board in relation to any award of an option under the SAYE Plan.

10.5.3 Savings contract and grant of option In order to participate in the SAYE Plan, an employee must enter into a linked savings contract with a bank or building society to make contributions from salary on a monthly basis over a three or five year period. A participant who enters into a savings agreement is granted an option to acquire Ordinary Shares under the SAYE Plan (“SAYE Option”).

The number of Ordinary Shares over which an SAYE Option may be granted is limited to the number of Ordinary Shares that may be acquired at the SAYE Option exercise price out of the proceeds of the linked savings contract. The exercise price per Ordinary Share will be the amount determined by the Board which will not be less than 80 per cent. (or such other percentage as is permitted by the applicable legislation) of the market value of an Ordinary Share on the date specified by the Board for the purposes of the relevant invitation.

Contributions may be made between £5 a month and the maximum permitted under the applicable legislation (currently £500 a month) or up to such lesser sum as the Board may determine. At the end of the three or five year savings contract, employees may either withdraw their savings on a tax free basis or utilise such sum and any bonus or interest due under the savings contract to acquire Ordinary Shares under the linked SAYE Option granted to the participant under the SAYE Plan.

Invitations may be issued during the 42 days beginning on: (i) Admission; (ii) the day after the announcement of the Company’s results for any period; (iii) any day on which the Board determines that circumstances are sufficiently exceptional to justify the grant of an option at that time; or (iv) the day after the lifting of any dealing restrictions.

No SAYE Options may be granted more than 10 years from the date when the SAYE Plan is adopted, which is expected to be shortly before Admission.

SAYE Options are not transferable and may only be exercised by the relevant employee or, in the event of death, their personal representatives.

10.5.4 Limits The SAYE Plan may operate over new issue Ordinary Shares, treasury shares or Ordinary Shares purchased in the market. The rules of the SAYE Plan provide that, in any period of 10 calendar years, not more than 10 per cent. of the Company’s issued ordinary share capital may be issued under the SAYE Plan and under any other employees’ share scheme operated by the Company. Ordinary Shares issued out of treasury under the SAYE Plan will count towards these limits for so long as this is required under institutional shareholder guidelines. Ordinary Shares issued or to be issued pursuant to awards granted before Admission or within 42 days beginning on Admission will not count towards these limits. In addition, awards which are renounced or lapse will be disregarded for the purposes of these limits.

254 10.5.5 Exercise of SAYE Options SAYE Options may normally only be exercised for a period of six months following the maturity of the related savings contract. If not exercised by the end of this period, the relevant SAYE Options will lapse.

SAYE Options may be exercised earlier with the proceeds of savings made under the linked savings contract and any interest due in certain specified circumstances including death, retirement, cessation of employment due to injury, disability or redundancy, by reason of a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 or if the relevant employment is employment by an associated company by reason of a change of control or other circumstances ending that company’s status as an associated company or on death.

10.5.6 Corporate events In the event of a takeover, scheme of arrangement, or winding-up of the Company, SAYE Options may normally be exercised early with the proceeds of savings made under the linked savings contract and any interest due.

If there is a corporate event resulting in a new person or company acquiring control of the Company SAYE Options may in certain circumstances be replaced by equivalent new options over shares in the acquiring company.

10.5.7 Variation of capital If there is a variation of share capital of the Company, the Board may make such adjustments to SAYE Options, including the number of Ordinary Shares subject to SAYE Options and the SAYE Option exercise price, as it considers to be fair and reasonable.

10.5.8 Rights attaching to Ordinary Shares Ordinary Shares issued and/or transferred under the SAYE Plan will not confer any rights on any participant until the relevant SAYE Option has been exercised and the participant in question has received the underlying Ordinary Shares. Any Ordinary Shares allotted when an SAYE Option is exercised will rank equally with Ordinary Shares then in issue (except for rights arising by reference to a record date prior to their issue).

10.5.9 Amendments The Board may, at any time, amend the provisions of the SAYE Plan in any respect. The prior approval of the Company at general meeting must be obtained in the case of any amendment to the advantage of participants which is made to the provisions relating to eligibility, individual or overall limits, the persons to whom an SAYE Option can be granted, the price at which Ordinary Shares can be acquired on exercise of an SAYE Option, the adjustments that may be made in the event of any variation to the share capital of the Company and/or the rule relating to such prior approval, save that there are exceptions for any minor amendment to benefit the administration of the SAYE Plan, to take account of the provisions of any proposed or existing legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants, the Company and/or its other Group companies. Amendments may not adversely affect the rights of participants except where participants are notified of such amendment and the majority of participants approve such amendment.

10.5.10 Overseas plans The Board may, at any time, establish further plans based on the SAYE Plan for overseas territories. Any such plan will be similar to the SAYE Plan, as relevant, but modified to take account of local tax, exchange control or securities laws. Any Ordinary Shares made available under such further overseas plans must be treated as counting against the limits on individual and overall participation under the SAYE Plan.

255 10.5.11 Benefits not pensionable The benefits received under the SAYE Plan are not pensionable.

11. Pensions The principal pension scheme made available by the Group is the Countryside Group Personal Pension Plan, a defined contribution scheme with Aegon, into which contributions are made by both the relevant employer and the relevant employee. Employer contribution percentages are between 1 per cent. and 25 per cent., depending on the membership status of the employee. It is operated as an automatic enrolment scheme to satisfy the Group’s obligations under UK pension legislation.

The Group pays a cash allowance instead of pension contributions in respect of some of its employees.

For its Millgate employees, the Group makes available two further defined contribution pension schemes with St. James’s Place and Aegon, respectively. The employer contributions percentages are 5 per cent. for both these schemes, save in respect of David Simpson for whom the employer contribution percentage is 10 per cent.

The Group does not operate a defined benefit pension scheme and has no ongoing liability in respect of any historic or previous pension arrangements.

12. Subsidiaries, joint ventures and associates The Company is the principal operating and holding company of the Group. The principal subsidiaries and subsidiary undertakings, joint ventures and associate of the Company were as follows:

Country of incorporation Percentage of and shares held as registered of 29 January Name office 2016 Principal Activity ––––––––——————————————— –––––——––– –––––——––– –––––––––––––––– Subsidiaries OCM Luxembourg Coppice Midco S.à r.l. Luxembourg 100 per cent. Holding Company OCM Luxembourg Coppice Holdco S.à r.l. Luxembourg 100 per cent. Holding Company Copthorn Holdings Limited UK 100 per cent. Holding Company Countryside Properties (UK) Limited UK 100 per cent. House building Countryside Properties Land (One) Limited UK 100 per cent. House building Countryside Properties Land (Two) Limited UK 100 per cent. House building Countryside Four Limited UK 100 per cent. House building Countryside Seven Limited UK 100 per cent. House building Countryside Eight Limited UK 100 per cent. House building Countryside Thirteen Limited UK 100 per cent. House building Countryside 28 Limited UK 100 per cent. House building Countryside 26 Limited UK 100 per cent. House building Countryside Sigma Limited UK 74.90 per cent. House building Countryside Properties (Joint Ventures) Limited UK 100 per cent. House building Countryside Properties (Uberior) Limited UK 100 per cent. House building Countryside Properties (Southern) Limited UK 100 per cent. House building Countryside Properties (Northern) Limited UK 100 per cent. House building Countryside Properties (In Partnership) Limited UK 100 per cent. House building Millgate Developments Limited UK 100 per cent. House building Wychwood Park Golf Club Limited UK 100 per cent. House building Countryside Cambridge One Limited UK 100 per cent. House building Countryside Cambridge Two Limited UK 100 per cent. House building

256 Country of incorporation Percentage of and shares held as registered of 29 January Name office 2016 Principal Activity ––––––––——————————————— –––––——––– –––––——––– –––––––––––––––– Joint Ventures Greenwich Millennium Village Limited UK 50 per cent. House building Countryside Maritime Limited UK 50 per cent. House building Silversword Properties Limited UK 50 per cent. Commercial Cambridge Medipark Limited UK 50 per cent. Commercial Countryside Annington (Colchester) Limited UK 50 per cent. House building Countryside Annington (Mill Hill) Limited UK 50 per cent. House building Countryside Land Securities (Springhead) Limited UK 50 per cent. House building Countryside Neptune LLP UK 50 per cent. House building Countryside Zest (Beaulieu Park) LLP UK 50 per cent. House building Acton Gardens LLP UK 50 per cent. House building Countryside L&Q (Oaks Village) LLP UK 50 per cent. House building Brenthall Park Limited UK 50 per cent. House building Countryside Properties (Merton Abbey Mills) Limited UK 50 per cent. House building Countryside Properties (Salford Quays) Limited UK 50 per cent. House building Woolwich Countryside Limited UK 50 per cent. House building Associate Countryside Properties (Bicester) Limited UK 28.5 per cent. House building

13. Material contracts The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company or another member of the Group within the two years immediately preceding the date of this Prospectus or, in the case of the Pre-IPO Reorganisation Agreement, is expected to be entered into prior to Admission, and are or may be material:

13.1 Underwriting Agreement On 1 February 2016, the Company, the Directors, the Principal Shareholder, the Underwriters and the Stabilising Manager entered into the Underwriting Agreement. Pursuant to the Underwriting Agreement:

13.1.1 the Company has agreed, subject to certain conditions, to allot and issue, at the Offer Price, the New Shares to be issued in connection with the Global Offer and the Underwriters have severally agreed, subject to certain conditions, to use reasonable endeavours to procure, as agents for and on behalf of the Company, subscribers for, and failing which to subscribe for themselves such New Shares (in such proportions as set out in the Underwriting Agreement) pursuant to the Institutional Offer;

13.1.2 the Principal Shareholder and the Company (acting as agent for and on behalf of the Management Sellers pursuant to the Deeds of Election) have agreed, subject to certain conditions, to sell, at the Offer Price, the Existing Ordinary Shares to be sold by them in connection with the Institutional Offer and the Underwriters have severally agreed, subject to certain conditions, to use reasonable endeavours to procure, as agents for the Company (acting for and on behalf of the Management Sellers pursuant to the Deeds of Election) purchasers for, and failing which to purchase themselves such Existing Ordinary Shares (in such proportions as set out in the Underwriting Agreement) pursuant to the Institutional Offer;

257 13.1.3 in addition, the Principal Shareholder has agreed, subject to certain conditions, to sell, at the Offer Price, the Intermediaries Offer Shares in connection with the Intermediaries Offer and the Underwriters have severally agreed, subject to certain conditions, to use reasonable endeavours to procure, as agents for the Principal Shareholder, that the Intermediaries purchase and, failing which, to purchase themselves such Intermediaries Offer Shares (in such proportions as are set out in the Underwriting Agreement);

13.1.4 each of the Company (acting for itself) and the Principal Shareholder has agreed to pay the Underwriters a base commission equal to its Pro Rata Proportion of the amount equal to: (i) 1.9 per cent. of the Offer Price multiplied by the number of Institutional Offer Shares issued and/or sold pursuant to Institutional Offer; plus (ii) 0.38 per cent. of the Offer Price multiplied by the number of the Intermediaries Offer Shares sold pursuant to the Intermediaries Offer;

13.1.5 the Company (acting for and on behalf of each of the Management Sellers pursuant to the Deeds of Election) has agreed to pay the Underwriters a base commission equal to the Management Sellers’ Pro Rata Proportion of the amount equal to: (i) 1.9 per cent. of the Offer Price multiplied by the number of Institutional Offer Shares issued and/or sold pursuant to Institutional Offer; plus (ii) 0.38 per cent. of the Offer Price multiplied by the number of the Intermediaries Offer Shares sold pursuant to the Intermediaries Offer;

13.1.6 the Company has agreed to pay Numis a fee of £100,000 in connection with its role as the co-ordinator of the Intermediaries Offer;

13.1.7 the Principal Shareholder has agreed to pay the Underwriters a base commission of 1.9 per cent. of the Offer Price multiplied by the number of Over-allotment Shares sold by it pursuant to the exercise of the Over-allotment Option (if any);

13.1.8 in addition:

(a) the Company (acting for itself) may in its absolute discretion pay the Underwriters a discretionary commission up to an amount equal to 1.1 per cent. of the Offer Price multiplied by the aggregate number of Shares issued by it pursuant to the Global Offer;

(b) the Company (acting for and on behalf of each of the Management Sellers pursuant to the Deeds of Election) may in its absolute discretion pay the Underwriters a discretionary commission of up to an amount equal to 1.1 per cent. of the Offer Price multiplied by the aggregate number of Share sold by the Management Sellers pursuant to the Global Offer;

(c) the Principal Shareholder (in its capacity as both the Principal Shareholder and the Over-allotment Shareholder) may in its absolute discretion pay the Underwriters a discretionary commission of up to an amount equal to 1.1 per cent. of the Offer Price multiplied by the aggregate number of Shares and Over-allotment Shares sold by it pursuant to the Global Offer; and

(d) the Company may in its absolute discretion pay Numis a fee of up to £50,000 in connection with its role as co-ordinator of the Intermediaries Offer;

13.1.9 the obligations of the Underwriters to procure subscribers and/or purchasers for or, failing which, themselves to subscribe for or purchase Shares (as the case may be) on the terms of the Underwriting Agreement are subject to certain conditions. These conditions include the absence of any breach of representation or warranty under the Underwriting Agreement, there being no material adverse change since the date of the Underwriting Agreement, the Pre-IPO Reorganisation and the Midco Liquidation having occurred prior to Admission and Admission occurring not later than 8.00 a.m. on 17 February 2016 (or such later time or date as the Joint Global Co-ordinators (on behalf of the Underwriters) may agree with the Company and the Principal Shareholder). In addition, the majority of the Joint Global Co-ordinators (by

258 number) have the right to terminate the Underwriting Agreement, exercisable in certain customary circumstances prior to Admission;

13.1.10 Barclays Capital Securities Limited, as Stabilising Manager, has been granted the Over-allotment Option by the Over-allotment Shareholder pursuant to which the Stabilising Manager may purchase, or procure purchasers for, up to 15 per cent. of the total number of Shares comprised in the Global Offer at the Offer Price for the purposes of covering short positions arising from over-allocations, if any, in connection with the Global Offer, and/or any sales of Shares made during the stabilisation period. Save as required by law or regulation, neither the Stabilising Manager, nor any of its agents, intends to disclose the extent of any over-allotments and/or stabilisation transactions under the Global Offer. Settlement of any purchase of Over-allotment Shares will take place shortly after such determination (or, if acquired on Admission, at Admission). If any Over-allotment Shares are acquired pursuant to the Over-allotment Option, the Stabilising Manager (on behalf of the Underwriters) will be committed to pay to the Over-allotment Shareholder, or procure that payment is made to it of, an amount equal to the Offer Price multiplied by the number of Over-allotment Shares purchased from the Over-allotment Shareholder, less commissions and expenses.

13.1.11 to the extent permitted by law, the Company has agreed to pay the costs, charges, fees and expenses of the Global Offer (together with any related VAT);

13.1.12 each of the Company, the Directors and the Principal Shareholder has given certain representations, warranties and undertakings to the Underwriters. The liabilities of the Company under the Underwriting Agreement are not limited as to amount or by time. The liabilities of the Directors and the Principal Shareholder under the Underwriting Agreement are limited as to time and amount;

13.1.13 the Company has given an indemnity to the Underwriters and Barclays Capital Securities Limited in a form that is typical for an agreement of this nature; and

13.1.14 the parties to the Underwriting Agreement have given certain covenants to each other regarding compliance with laws and regulations affecting the making of the Global Offer in relevant jurisdictions.

Lock-up arrangements Pursuant to the Underwriting Agreement, each of the Company and the Principal Shareholder has agreed that, subject to certain exceptions (including an exception allowing the Principal Shareholder to grant security over its Ordinary Shares in connection with Oaktree debt financing arrangements with any of the Joint Global Coordinators or their affiliates), during the period of 180 days from the date of Admission, it will not, without the prior written consent of the majority by number of the Joint Global Co-ordinators, issue, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing. Each of the Directors (pursuant to the Underwriting Agreement), the Selling Shareholders (other than the Principal Shareholder) and the members of Senior Management (by separate undertaking) has agreed that, subject to certain exceptions, during the period of 365 days from the date of Admission, he/she will not, without the prior consent of the majority by number of the Joint Global Co-ordinators, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing.

13.2 Deeds of Election Each of the Executive Directors and members of Senior Management has entered into a Deed of Election in connection with his/her election to sell his/her shareholding in the Company through the IPO, pursuant to which he/she has agreed, among other things, (a) to give typical representations and

259 warranties regarding his/her title, capacity and compliance with laws in favour of the Company and the Underwriters, and (b) subject to certain exceptions, for a period of 365 days from the date of Admission, not to offer, sell or otherwise dispose of, his/her Ordinary Shares, without the prior written consent of the Company and the Joint Global Co-ordinators. In addition, each of the Management Sellers (excluding the Directors and members of Senior Management) who sells Ordinary Shares through the IPO will enter into a Deed of Election on similar terms to those describe above.

13.3 Relationship Agreement 13.3.1 On 1 February 2016, the Company entered into a relationship agreement (the “Relationship Agreement”) with the Principal Shareholder and the Oaktree Funds that will come into force on Admission. The principal purpose of the Relationship Agreement is to ensure that the Company is capable at all times of carrying on its business independently of the Principal Shareholder and the Oaktree Funds (each of whom is considered to be a “controlling shareholder” for the purposes of the Listing Rules) and their respective associates. The Relationship Agreement will stay in effect until the earlier of the date on which the Principal Shareholder, the Oaktree Funds and their associates cease to own in aggregate an interest, direct or indirect, of at least 10 per cent. of the issued share capital of the Company and the date on which the Ordinary Shares cease to be listed on the premium listing segment of the Official List. The Relationship Agreement is intended to ensure that the Company can meet, from Admission, the requirements of the Listing Rules.

13.3.2 The Relationship Agreement includes provisions to ensure that the Group is able to do business independently of the Principal Shareholder, the Oaktree Funds and their respective associates. The Relationship Agreement contains undertakings from each of the Principal Shareholder and the Oaktree Funds that:

(a) transactions and relationships with it and its associates will be conducted at arm’s length and on normal commercial terms;

(b) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and

(c) that neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

13.3.3 Under the Relationship Agreement each of the Principal Shareholder and the Oaktree Funds shall not, and shall procure that its associates shall not, take any action that would, or which would be reasonably likely to: (a) have the effect of preventing any member of the Group from carrying on its business independently of the Principal Shareholder, or any of its associates, and for the benefit of its shareholders as a whole; or (b) have the effect of prejudicing the Company’s listing on the Official List;

13.3.4 In addition, under the Relationship Agreement, the Principal Shareholder:

(a) has agreed that it will not exercise any of its voting or other rights and powers to procure any amendment to the Articles which would be inconsistent with, undermine or breach any provision of the Relationship Agreement;

(b) has agreed that it will abstain from voting, and shall procure that any representative of it on the Board abstains from voting, on any resolution to approve a related party transaction involving it, the Oaktree Funds or their respective associates (or the related party);

260 (c) will have the right to appoint two Non-Executive Directors to the Board, provided that the Principal Shareholder and the Oaktree Funds or their respective associates hold, in aggregate, at least 25 per cent. of the issued share capital of the Company;

(d) will have the right to appoint one Non-Executive Director to the Board, provided that the Principal Shareholder, the Oaktree Funds or their respective associates hold, in aggregate, at least 10 per cent., but less than 25 per cent., of the issued share capital of the Company;

(e) will have the right to appoint one Non-Executive Director to the Nomination Committee, provided that the Principal Shareholder, the Oaktree Funds or their respective associates hold, in aggregate, at least 10 per cent. of the issued share capital of the Company; and

(f) has agreed that it will inform the Company in advance, and where practicable at least three business days in advance, of any disposal or transfer (or a series of connected disposals or transfers) of an interest in 10 per cent. or more of the issued share capital of the Company by the Principal Shareholder, the Oaktree Funds and/or their respective associates to a third party.

The Board believes that the terms of the Relationship Agreement will enable the Company to carry on its business independently from the Principal Shareholder, the Oaktree Funds and their respective associates, and ensure that all transactions and relationships between the Company and its controlling shareholder are, and will be, at arm’s length and on a normal commercial basis.

13.3.5 The Relationship Agreement also provides that the obligations described in 13.3.2, 13.3.3, or 13.3.4 above will not prevent the Principal Shareholder, the Oaktree Funds or their respective associates from:

(a) accepting, or providing an irrevocable undertaking to accept, a takeover offer made in accordance with the Takeover Code in relation to their respective interests in the Company or, where such takeover offer is made by way of a scheme of arrangement under sections 895 to 899 of the Companies Act 2006 (a “Scheme”), voting in favour of such Scheme at the court and related shareholder meetings or otherwise agreeing to sell their shares in connection with a takeover offer;

(b) making a takeover offer by way of a general offer for all of the outstanding Shares or by way of a Scheme and de-listing the Company after it becomes entitled to do so or, in the case of a Scheme, after it has become effective;

(c) purchasing Ordinary Shares in the market in connection with a takeover offer;

(d) disposing of Ordinary Shares pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986 in relation to the Company or pursuant to a compromise or arrangement under section 896 of the Companies Act 2006 providing for the acquisition by any person (or group of persons acting in concert, as such expression is defined in the Takeover Code) of 50 per cent. or more of the Shares;

(e) choosing to accept or not to accept any offer by the Company to purchase its own Ordinary Shares which is made on identical terms to the holders of Ordinary Shares of the same class;

(f) choosing to take up or not to take up any Ordinary Shares offered to them under a rights issue or pre-emptive open offer conducted by the Company; or

(g) otherwise exercising its rights as a Shareholder in accordance with the Listing Rules, except where to do so would result in a breach of the terms of the Relationship Agreement.

261 13.3.6 Under the Relationship Agreement, each of the Principal Shareholder and the Oaktree Funds has agreed that it shall not, and shall procure that its associates shall not, solicit for employment certain key employees of the Group for a period of 12 months from the date of Admission.

13.3.7 In addition, under the Relationship Agreement the Company has also undertaken to provide reasonable assistance to the Principal Shareholder in the event of a sale of Ordinary Shares by the Principal Shareholder at any time following the Global Offer.

13.4 Facility Agreement On 4 June 2014, Copthorn Holdings Limited (which at the time of Admission will be a wholly owned subsidiary of the Company), as original borrower, and certain of its subsidiaries, as original guarantors, entered into the Facility Agreement with Barclays Bank PLC, Lloyds Bank plc and Santander UK plc as mandated lead arrangers and original lenders and Lloyds Bank plc as facility agent and security agent, providing for a £200 million committed secured revolving credit facility. On 21 April 2015 and 18 November 2015, additional revolving facilities were established under the terms of the Facility Agreement, pursuant to which each of the original lenders agreed to make, in aggregate, a further £65 million available to Copthorn Holdings Limited. The Facility Agreement was amended in the Amendment and Restatement Agreement dated 6 January 2016, which, among other things, requires Copthorn Holdings Limited to apply £60 million in prepayment of the Facilities after Admission (subject to satisfying certain other conditions). The Amendment and Restatement Agreement will become effective on the later of (i) the date on which the facility agent under the Facility Agreement notifies Copthorn Holdings Limited and the lenders that all conditions have been satisfied; and (ii) Admission. The Facilities expire on 3 June 2019, with the exception of one facility of £25 million which expires on 30 June 2017. Under the Facility Agreement, Copthorn Holdings Limited will have the ability to utilise the Facilities for general corporate and working capital purposes in sterling. Copthorn Holdings Limited can also agree with individual lenders that they provide some or all of their commitment by way of bilateral ancillary facilities (for letters of credit and bank guarantees). The commitments available under the Facilities are not conditional upon Admission and, as at 29 January 2016 (the last practicable date prior to the date of this Prospectus), Copthorn Holdings Limited had an aggregate of £97 million of undrawn commitments under the Facility Agreement. Utilisation of undrawn commitments is subject to customary utilisation conditions, including that no default under the finance documents is continuing or would result from the utilisation and that certain representations that are to be repeated are true (in all material respects, in respect of those representations and warranties not already qualified by materiality). The Facility Agreement contains warranties, representations, covenants and events of default (in each case, subject to agreed exceptions, materiality tests, carve outs and grace periods) that are customary for a credit agreement and business of this nature. These include restrictions on disposals, mergers and acquisitions and incurring additional financial indebtedness, a negative pledge, restrictions and covenants in relation to pension schemes, financial covenants and requirements for mandatory prepayment in certain circumstances. The Facility Agreement provides for the financial covenants to be tested quarterly. To comply with the ongoing financial covenants under the Facility Agreement, Copthorn Holdings Limited must ensure that:

13.4.1 interest cover is not less than 3.50:1 in respect of any testing period up to (and including) 31 December 2015, 4.00:1 in respect of the testing periods falling on 31 March 2016 and 30 June 2016, and 4.50:1 in respect of any testing period falling thereafter. Interest cover means the ratio of operating profit to net finance charges;

262 13.4.2 gearing is not greater than 1.00:1 in respect of testing periods up to (and including) 30 June 2016, 0.80:1 in respect of testing periods falling from (and including) 30 September 2016 to (and including) 30 June 2017, and 0.70:1 in respect of testing periods falling thereafter. After Admission, and subject to satisfying certain other conditions contained in the Amendment and Restatement Agreement, the gearing requirement shall be amended so that for each testing period occurring on or after the date of Admission the gearing shall be 0.50:1 (apart from the testing period occurring on 30 June 2016, which shall be 0.65:1 unless prior to 30 June 2016 Copthorn Holdings Limited notifies the facility agent that gearing is 0.50:1). Gearing means the ratio of Group net debt to net tangible assets;

13.4.3 net tangible assets is not less than £200 million in respect of any testing period up to (and including) 30 June 2016, £250 million in respect of the testing periods falling from (and including) 30 September 2016 to (and including) 30 June 2017, and £275 million in respect of any testing period falling thereafter; and

13.4.4 loan to book value is not less than 0.65:1 in respect of any testing period up to (and including) 30 June 2016, and 0.60:1 in respect of any testing period falling thereafter. Loan to book value means the ratio of Group net debt to stock.

The interest rate under the Facility Agreement is LIBOR plus a margin of between 2.50 to 3.25 per cent. per annum, depending on the level of gearing. The Facility Agreement requires Copthorn Holdings Limited to prepay the Facilities on demand on a change of control (which will include the Principal Shareholder’s holding of Ordinary Shares reducing to 30 per cent. or less following Admission, save where, following Admission, gearing is 0.50:1 or less (and is notified by Copthorn Holdings Limited to the agent) in which case such a reduction shall not be a change of control). The Facilities shall also become immediately due and payable if there is a disposal of all or substantially all of the assets of OCM Luxembourg Coppice Holdco S.à r.l. and each of its subsidiaries (or, after Admission and subject to satisfying certain other conditions contained in the Amendment and Restatement Agreement, if there is a disposal of all or substantially all of the assets of the Company and each of its subsidiaries).

The Facilities are secured by all or substantially all of the assets of the obligors under the Facility Agreement. The Company is required to accede to the Facility Agreement as an additional guarantor on the earlier of: (i) the point at which the Company becomes the direct owner of the shares of Copthorn Holdings Limited; and (ii) 31 March 2016 (the “Accession”).

Subject to certain exceptions, no obligor (other than, following the Accession, the Company) shall declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital), and the Company is restricted from declaring, making or paying any dividend whilst certain material events of default are continuing.

Following notification by Copthorn Holdings Limited that, following Admission (but prior to 1 October 2016), gearing has been reduced to 0.50:1:

(i) the restriction on dividends by obligors other than the Company will be removed; and

(ii) on request, Lloyds Bank plc as security agent shall release, discharge and re-assign the security created under the transaction security documents upon the request of Copthorn Holdings Limited (other than any security granted over the share capital (and rights associated with shares) of any material company (as defined in the Facility Agreement) and any floating charge security granted by any material company).

13.5 Pre-IPO Reorganisation Agreement Prior to Admission, the Company will enter into a share-for-share exchange agreement with the holders of the equity securities in OCM Luxembourg Coppice Midco S.à r.l. (including the Selling Shareholders), pursuant to which the Company will acquire the entire issued share capital of OCM

263 Luxembourg Coppice Midco S.à r.l. (including its mandatory redeemable preference shares) in consideration for the issue to such holders of Ordinary Shares in the Company.

14. Related party transactions and other arrangements Details of related party transactions entered into by members of the Group during the period covered by the historical financial information contained in this Prospectus are set out in note 27 of Section B of Part XIV: “Historical Financial Information” and note 22 of Section D of Part XIV: “Historical Financial Information”.

On 1 February 2016, the Company, the Principal Shareholder and the Oaktree Funds entered into the Relationship Agreement, the principal purpose of which is to ensure that the Company is capable at all times of carrying on its business independently of its controlling shareholders. See paragraph 13.3 of this Part XVIII: “Additional Information—Material contracts—Relationship Agreement” for further details of the Relationship Agreement.

Save as set out above, and for the related party transactions set out in note 27 in Section B of Part XIV: “Historical Financial Information” and note 22 of Section D of Part XIV: “Historical Financial Information”, there are no related party transactions that were entered into during the period covered by the historical financial information and during the period from 30 September 2015 to the date of this Prospectus.

15. Working capital In the opinion of the Company, taking into account the Group’s financing facilities and the net proceeds receivable by the Company from the Global Offer, the working capital available to the Company and the Group is sufficient for their present requirements, that is for the next 12 months following the date of this Prospectus.

16. No significant change 16.1 There has been no significant change in the financial or trading position of the Company since 18 November 2015, being the date of its incorporation.

16.2 Save for the movement in non-current financial indebtedness, there has been no significant change in the financial or trading position of the Group since 30 September 2015, being the date to which the audited combined and consolidated financial information of the Group as set out in Section B of Part XIV: “Historical Financial Information” was prepared. Non-current financial indebtedness of the Group increased to £409.6 million as at 30 November 2015 due to the investment made in work in progress over this period which increased the Group's net bank debt to £122.6 million as at 30 November 2015. This increase is in line with management’s expectations. The amount of mandatory redeemable preference shares remained at £287.3 million as at 30 November 2015.

17. Consents PricewaterhouseCoopers LLP is a member firm of the Institute of Chartered Accountants in England and Wales and has given and has not withdrawn its written consent to the inclusion of the reports included in Section A and Section C of Part XIV: “Historical Financial Information” and in Section B of Part XV: “Unaudited Pro Forma Financial Information”, in the form and context in which they appear, and has authorised the contents of its reports for the purposes of Rule 5.5.3R(2)(f) of the Prospectus Rules. A written consent under the Prospectus Rules is different from a consent filed with the SEC under section 7 of the Securities Act. PricewaterhouseCoopers LLP has not filed and will not be required to file a consent under Section 7 of the Securities Act.

18. Intermediaries 18.1 The Intermediaries authorised as of the date of this Prospectus to use this Prospectus in connection with the Intermediaries Offer are: AJ Bell Securities Limited, Alliance Trust Savings Limited, Barclays Bank PLC, Beaufort Securities LTD, Canaccord Genuity Wealth Ltd, Charles Stanley & Co

264 Ltd, Cornhill Capital Limited, Equiniti Financial Services Limited (trading as Equiniti Shareview, Saga Share Direct & Selftrade), Fiske PLC, Hargreave Hale Limited, Hargreaves Lansdown Asset Management Limited, IG Markets Limited, Interactive Investor Trading Ltd, Jarvis Investment Management Ltd (trading as Sharedeal Active & X-O.co.uk), JM Finn & Co., Redmayne-Bentley LLP, Shard Capital Partners LLP, Shore Capital Stockbrokers Limited, SVS Securities, TD Direct Investing (Europe) Limited, The Share Centre Limited, Walker Crips Stockbrokers Limited and WH Ireland Limited. 18.2 Any new information with respect to financial intermediaries unknown at the time of approval of this Prospectus, including in respect of: 18.2.1 any financial intermediary that is appointed by the Company in connection with the Intermediaries Offer after the date of this Prospectus following its agreement to adhere to and be bound by the terms of the Intermediaries Terms and Conditions; and 18.2.2 any Intermediary that ceases to participate in the Intermediaries Offer, will be available online (subject to certain restrictions) at www.countryside-properties.com.

19. Takeover regulation The City Code on Takeovers and Mergers (the “Takeover Code”) is issued and administered by the Panel on Takeovers and Mergers (the “Takeover Panel”). The Company is subject to the Takeover Code and therefore its shareholders are entitled to the protections afforded by the Takeover Code.

Other than as provided by the Takeover Code and Part 28 of the Companies Act, there are no rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules that apply to the Ordinary Shares of the Company.

19.1 Mandatory bids Under Rule 9 of the Takeover Code, when: (i) a person acquires any interest in shares which (when taken together with shares in which he and persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company subject to the Takeover Code; or (ii) any person who, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company subject to the Takeover Code but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any persons acting in concert with him, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he is interested, then, in either case, that person, together with the person acting in concert with him, is normally required to extend offers in cash, at the highest price paid by him (or any persons acting in concert with him) for shares in the company within the preceding 12 months, to the holders of any class of equity share capital, whether voting or non-voting, and also to the holders of any other class of transferable securities carrying voting rights.

19.2 Squeeze-out Under the Companies Act, if a takeover offer (as defined in section 974 of the Companies Act) is made for the Shares and the offeror were to acquire, or unconditionally contract to acquire, not less than 90 per cent. in value of the shares to which the takeover offer relates (the “Takeover Offer Shares”) and not less than 90 per cent. of the voting rights attached to the Takeover Offer Shares within three months of the last day on which its offer can be accepted, it could acquire compulsorily the remaining 10 per cent. It would do so by sending a notice to outstanding shareholders telling them that it will acquire compulsorily their Takeover Offer Shares and then, six weeks later, it would execute a transfer of the outstanding Takeover Offer Shares in its favour and pay the consideration to the Company, which would hold the consideration on trust for outstanding shareholders. The consideration offered to the shareholders whose Takeover Offer Shares are acquired compulsorily under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.

265 19.3 Sell-out The Companies Act gives minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the Shares and, at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90 per cent. of the Shares to which the offer relates, any holder of Shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those Shares. The offeror is required to give any shareholder notice of his or her right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of the minority shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period. If a shareholder exercises his or her rights, the offeror is bound to acquire those Shares on the terms of the offer or on such other terms as may be agreed.

19.4 Concert Party Presumptions Under the Takeover Code, shareholders in a private company who sell their shares in that company in consideration for the issue of new shares in a company to which the Takeover Code applies (such as the Company) will generally be presumed to be acting in concert with each other.

The Company understands, on the basis of confirmations received by it from the Takeover Panel, that:

19.4.1 in accordance with such presumption, until such time as they can demonstrate otherwise, the Takeover Panel will generally presume that the Principal Shareholder and the Oaktree Funds (together the “Presumed Concert Party Group”) will be acting in concert for the purposes of Rule 9 of the Takeover Code; but

19.4.2 notwithstanding such presumption, the Principal Shareholder and the Oaktree Funds, on the one hand, and the Management Sellers (or any of them), on the other hand, will not generally be presumed to be acting in concert with each other.

19.5 Acquisitions of further Ordinary Shares following Admission Prospective investors should be aware that following Admission:

19.5.1 the members of the Presumed Concert Party Group may between them hold more than 50 per cent. of the Company’s voting share capital and (if the Presumed Concert Party Group was deemed to exist at any relevant time) may accordingly be able to increase their aggregate shareholding without incurring any obligation under Rule 9.1 to make a general offer; and

19.5.2 individual members of the Presumed Concert Party Group, including the Principal Shareholder, or any sub-group of the Presumed Concert Party Group, will not, without the consent of the Panel, be able to increase their interests in Ordinary Shares through a Rule 9 threshold (i.e., to or through 30 per cent. of the Company’s voting share capital or any increase between (and including) 30 per cent. but no more than 50 per cent. of the Company’s voting share capital) without incurring an obligation under Rule 9 to make a general offer for the Company.

19.6 Stabilisation arrangements in connection with the Global Offer Under the stabilisation arrangements described in Part XVII: “The Global Offer” of this Prospectus, the Stabilising Manager may, for stabilisation purposes, over-allot Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer. In connection with such arrangements, the Stabilising Manager will be able to borrow up to a number of Ordinary Shares equivalent to 15 per cent. of the Offer Size from the Over-allotment Shareholder under the terms of the Stock Lending Agreement. The Stabilising Manager will be required, on or before the 30th calendar day after the date of the commencement of conditional dealings in the Ordinary Shares on the London Stock Exchange, to re-deliver to the Over-allotment Shareholder equivalent securities in respect of any borrowing it makes under the terms of the Stock Lending Agreement by transferring the same number of Ordinary Shares to the Over-allotment Shareholder as the Stabilising Manager has borrowed from the Over-allotment Shareholder.

266 For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over allotments and/or from sales of Ordinary Shares effected by it during the stabilising period, the Over-allotment Shareholder has granted to it the Over-allotment Option, pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Global Offer at the Offer Price. The Over-allotment Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings in the Ordinary Shares on the London Stock Exchange.

As a result of the combined effect of lending Ordinary Shares pursuant to the Stock Lending Agreement and granting the Over-allotment Option, the Over-allotment Shareholder’s shareholding in the Company can only remain the same or decrease from what its shareholding would be if it were not party to any stabilisation arrangements. In particular, the Over-allotment Shareholder’s shareholding in the Company will return to its original level when the loan is repaid and then decrease if the Stabilising Manager acquires Ordinary Shares from it pursuant to utilisation of the Over-allotment Option.

The Company understands that, pursuant to Note 4 on the definition of “Interests in securities” and Note 17 on Rule 9.1 in the City Code, the Over-allotment Shareholder will not be treated as having disposed of an interest in any Ordinary Shares when it lends Ordinary Shares to the Stabilising Manager under the Stock Lending Agreement and will not therefore be treated as having increased its interest in Ordinary Shares upon the redelivery of the lent Ordinary Shares. Accordingly, no Rule 9 mandatory offer obligation will arise under the stock lending arrangements.

An announcement will be made by the Company or by the Stabilising Manager on its behalf following utilisation of the Over-allotment Option, not later than one week after the end of the stabilisation period. The Over-allotment Shareholder will be required to notify the Company of the movements that have taken place in its shareholding in the Company consequent upon the arrangements referred to above, and the Company will make a further announcement in respect of any such notification.

20. Miscellaneous The Company will bear approximately £16 million of fees and expenses in connection with the Global Offer and Admission, including commissions payable to the Underwriters (including the maximum amount of any discretionary commissions), other estimated fees and expenses in connection with the Global Offer and Admission and amounts in respect of VAT.

21. Documents available for inspection Copies of the following documents are available for inspection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for a period of 12 months following Admission at the offices of Linklaters LLP at One Silk Street, London EC2Y 8HQ and at the Company’s registered office at Countryside House, The Drive, Brentwood, Essex, CM13 3AT, United Kingdom:

(a) the articles of association of the Company;

(b) the consent letter referred to in paragraph 17 of this Part XVIII: “Additional Information—Consents”;

(c) the reports of PricewaterhouseCoopers LLP which are set out in Section A and Section C of Part XIV: “Historical Financial Information” and Section B of Part XV: “Unaudited Pro Forma Information”; and

(d) this Prospectus.

Dated: 1 February 2016

267 PART XIX

DEFINITIONS

Definitions The following definitions apply throughout this Prospectus unless the context requires otherwise:

Admission the admission of the Ordinary Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities becoming effective in accordance with, respectively the Listing Rules and the Admission and Disclosure Standards

Amendment and Restatement the amendment and restatement agreement dated 6 January 2016 Agreement among Copthorn Holdings Limited, certain of its subsidiaries as guarantors, Barclays Bank PLC, Lloyds Bank plc and Santander UK PLC as lenders and Lloyds Bank plc as facility agent relating to the Original Facility Agreement (as amended by an amendment letter dated 30 June 2015 and an amendment agreement dated 27 November 2015)

Articles the articles of association of the Company to be adopted upon Admission

Audit Committee the audit committee of the Board

Barclays Barclays Bank PLC

Board the board of directors of the Company

CEO the chief executive officer of the Company

CFO the chief financial officer of the Company

Companies Act the Companies Act 2006, as such act may be amended, modified or re-enacted from time to time

Company Countryside Properties plc

CREST the UK-based system for the paperless settlement of trades in listed securities, of which Euroclear UK & Ireland is the operator

CREST Regulations the Uncertified Securities Regulations 2001 (512001/3755)

Deeds of Election the deeds of election entered into or to be entered into by Management Sellers in connection with the Global Offer as further described in paragraph 13.2 of Part XVIII “Additional Information—Material contracts—Deeds of Election”

Directors the directors of the Company whose names are set out in Part X: “Directors, Senior Management and Corporate Governance”

Disclosure and Transparency Rules the disclosure rules and transparency rules produced by the FCA and forming part of the handbook of the FCA as, from time to time, amended

EU the European Union

268 Eurozone those member states of the European Union which have adopted the euro

Executive Directors the executive Directors of the Company

Existing Shares the Ordinary Shares in issue immediately prior to Admission

Facilities the committed secured revolving credit facilities established under the terms of the Facility Agreement

Facility Agreement the Original Facility Agreement as amended and as amended and restated from time to time

FCA the UK Financial Conduct Authority

FSMA the Financial Services and Markets Act 2000, as amended

Global Offer the Institutional Offer and the Intermediaries Offer

Governance Code the UK Corporate Governance Code published by the Financial Reporting Council and dated September 2014, as amended from time to time

Government or UK Government the Government of the United Kingdom

Group or Countryside (where referring or relating to periods from and including the completion of the Pre-IPO Reorganisation) the Company and its consolidated subsidiaries and subsidiary undertakings (including limited liability partnerships) or (where referring or relating to periods prior to the completion of the Pre-IPO Reorganisation) the Operating Group

HMRC HM Revenue & Customs

IFRS the International Financial Reporting Standards, as adopted by the European Union

Institutional Offer the offer of Shares to certain institutional investors in the United Kingdom and elsewhere described in Part XVII: “The Global Offer”

Institutional Offer Shares the Shares to be issued or sold pursuant to the Institutional Offer

Intermediaries the entities listed in paragraph 18 of Part XVIII: “Additional Information—Intermediaries”, together with any other intermediary financial institution (if any) that is appointed by the Company in connection with the Intermediaries Offer after the date of this Prospectus, and “Intermediary” shall mean any one of them

Intermediaries Booklet the booklet entitled “Countryside Properties plc Share Offer: Information for Intermediaries” and containing, among other things, the Intermediaries Terms and Conditions

Intermediaries Offer the offer of Shares to Intermediaries located in the United Kingdom, the Channel Islands and the Isle of Man described in Part XVII: “The Global Offer”

Intermediaries Offer Co-ordinator Numis

Intermediaries Offer Shares the Shares to be issued or sold pursuant to the Intermediaries Offer

269 Intermediaries Terms and the terms and conditions agreed between the Company, the Selling Conditions Shareholders and the Intermediaries in relation to the Intermediaries Offer and contained in the Intermediaries Booklet

IRS the U.S. Internal Revenue Service

ISIN International Security Identification Number

Joint Bookrunners J.P. Morgan Cazenove, Barclays, Numis and Peel Hunt

Joint Global Co-ordinators J.P. Morgan Cazenove, Barclays and Numis

J.P. Morgan Cazenove J.P. Morgan Securities plc, which conducts its investment banking activities as J.P. Morgan Cazenove

LIBOR London Interbank Offered Rate

Listing Rules the rules relating to admission to the Official List made under section 73A(2) of FSMA

London Stock Exchange or LSE London Stock Exchange plc

Management Sellers certain employees of members of the Group who are expected to hold Ordinary Shares following the Pre-IPO Reorganisation and who may sell a proportion of those Ordinary Shares in the Global Offer on the terms set out in their respective Deeds of Election

Member States member states of the EU

Midco Liquidation the placing of OCM Luxembourg Coppice Midco S.à r.l. into liquidation prior to Admission, as described in paragraph 4 of Part XVIII: “Additional Information—Pre-IPO Reorganisation, Midco Liquidation and Post-IPO Reduction of Capital”

Millgate Millgate Developments Ltd.

New Share Offer Size the number of New Shares to be issued pursuant to the Global Offer, to be set out in the Pricing Statement

New Share Offer Size Range the range within which the New Share Offer Size is currently expected to be set, being between 47,272,727 and 57,777,778 New Shares

New Shares the new Ordinary Shares to be allotted and issued pursuant to the Global Offer

Nomination Committee the nomination committee of the Board

Non-Executive Directors the non-executive Directors of the Company

Numis Numis Securities Limited

Oaktree Oaktree Capital Management, L.P., a global asset management firm

Oaktree Funds Oaktree Opportunities Fund VIIIb, L.P., Oaktree Opportunities Fund VIIIb (Parallel), L.P., Oaktree Opportunities Fund IX, L.P., Oaktree Opportunities Fund IX (Parallel), L.P., Oaktree Opportunities Fund IX (Parallel 2), L.P., Oaktree European Principal Fund III, L.P. and Oaktree European Principal Fund III (Parallel), L.P.

270 Oaktree Sale Share Offer Size the number of Sale Shares to be sold by the Principal Shareholder pursuant to the Global Offer, to be set out in the Pricing Statement

Oaktree Sale Share Offer Size the range within which the Oaktree Sale Share Offer Size is Range currently expected to be set, being between 35,614,120 and 290,227,273 Existing Shares

Offer Price the price at which each Share is to be issued or sold under the Global Offer

Offer Price Range the range within which the Offer Price is currently expected to be set, being between 225 pence and 275 pence per Share

Offer Size the number of Shares to be issued or sold pursuant to the Global Offer (excluding, for the avoidance of doubt, the Over-allotment Shares)

Offer Size Range the range within which the Offer Size is currently expected to be set, being between 112,500,000 and 337,500,000 Shares

Official List the Official List of the Financial Conduct Authority

Operating Group OCM Luxembourg Coppice Midco S.à r.l. and its consolidated subsidiaries and subsidiary undertakings (including limited liability partnerships) and, prior to 16 April 2013, Copthorn Holdings Limited and its consolidated subsidiaries and subsidiary undertakings (including limited liability partnerships)

Ordinary Shares the ordinary shares of £1 each in the capital of the Company

Original Facility Agreement the facility agreement dated 4 June 2014 among Copthorn Holdings Limited, certain of its subsidiaries as guarantors, Barclays Bank PLC, Lloyds Bank plc and Santander UK PLC as mandated lead arrangers and original lenders and Lloyds Bank plc as facility agent and security agent

Over-allotment Option the option granted to the Stabilising Manager by the Over-allotment Shareholder to purchase, or procure purchasers for, additional Ordinary Shares as more particularly described in Part XVII: “The Global Offer”

Over-allotment Shareholder the Principal Shareholder

Over-allotment Shares the Ordinary Shares to be offered pursuant to the Over-allotment Option

Peel Hunt Peel Hunt LLP

Post-IPO Reduction of Capital the proposed reduction of capital to be undertaken by the Company following Admission as described in paragraph 4 of Part XVIII: “Additional Information—Pre-IPO Reorganisation, Midco Liquidation and Post-IPO Reduction of Capital”

Pre-IPO Reorganisation the corporate reorganisation to be undertaken by the Company and the Group in connection with, and prior to, Admission, including the acquisition by the Company of the Operating Group, as described in paragraph 4 of Part XVIII: “Additional Information— Pre-IPO Reorganisation, Midco Liquidation and Post-IPO Reduction of Capital”

271 Pricing Statement the statement containing the Offer Price, the Offer Size and certain other information expected to be published on 12 February 2016

Principal Shareholder OCM Luxembourg Coppice Topco S.à r.l., being an entity controlled by Oaktree

Pro Rata Proportion in respect of a person the proportion, expressed as a percentage, of the aggregate number of Shares represented by the Shares issued and/or sold by that person pursuant to the Global Offer (excluding Over-allotment Shares)

Prospectus Directive EU Prospectus Directive (2003/71/EC) (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State and includes any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU)

Prospectus Directive Regulation the Prospectus Directive Regulation (2004/809/EC)

Qualified Institutional buyers or has the meaning given by Rule 144A under the Securities Act QIBs Qualified Investors persons who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive

Registrars Capita Asset Services

Regulation S Regulation S under the Securities Act

Regulatory Information Service one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies

Relationship Agreement the relationship agreement between the Company, the Principal Shareholder and the Oaktree Funds dated 1 February 2016 described in paragraph 13.3 of Part XVIII: “Additional Information—Material contracts—Relationship Agreement”

Remuneration Committee the remuneration committee of the Board

Sale Share Offer Size the number of Sale Shares to be sold pursuant to the Global Offer, to be set out in the Pricing Statement

Sale Share Offer Size Range the range within which the Sale Share Offer Size is currently expected to be set, being between 54,722,222 and 290,227,273 Existing Shares

Sale Shares the Ordinary Shares to be sold in the Global Offer by the Selling Shareholders (excluding, for the avoidance of doubt, the Over- allotment Shares)

Securities Act the United States Securities Act of 1933, as amended

SEDOL Stock Exchange Daily Official List

Selling Shareholders the Principal Shareholder and the Management Sellers being Shareholders who may sell Existing Shares as part of the Global Offer

272 Senior Management Members of the group’s senior management team, details of whom are set out in Part X: “Directors, Senior Management and Corporate Governance”

Shareholders the holders of Ordinary Shares in the capital of the Company

Shares the New Shares and the Sale Shares to be offered as part of the Global Offer

Sponsor J.P. Morgan Cazenove

Stabilising Manager Barclays Capital Securities Limited

Stock Lending Agreement the stock lending agreement entered into between the Stabilising Manager and the Over-allotment Shareholder described in paragraph 10 of Part XVII: “The Global Offer—Stock Lending Agreement”

Subsidiary has the meaning given to it in section 1159 of the Companies Act unless stated otherwise in this Prospectus

UK the United Kingdom of Great Britain and Northern Ireland

UK Listing Authority the FCA in its capacity as the competent authority for the purposes of Part VI of FSMA

Underwriters J.P. Morgan Cazenove, Barclays, Numis and Peel Hunt

Underwriting Agreement the underwriting agreement entered into between the Company, the Directors, the Selling Shareholders and the Underwriters described in paragraph 13.1 of Part XVIII: “Additional Information— Material contracts—Underwriting Agreement”

United States or U.S. the United States of America, its territories and possessions, any State of the United States of America and the District of Columbia

VAT within the EU, such taxation as may be levied in accordance with (but subject to derogations from) the Directive 2006/112/EEC and, outside the EU, any taxation levied by reference to added value or sales

273 PART XX

GLOSSARY

Glossary The following definitions apply throughout this Prospectus unless the context requires otherwise: affordable housing homes sold or leased at less than open market value

ASP average selling price asset turn asset turn is calculated as revenue including the proportional contribution of associate and joint ventures divided by the average TNOAV for the given year

CIL Community Infrastructure Levy, introduced by the Government in 2010 as an alternative to s106 agreements completion when either a freehold or leasehold interest in a home has been transferred to a purchaser controlled land land not owned, but under the Group’s control by way of a build licence, an option agreement, a conditional contract or a DA

DA a development agreement under which the Group undertakes to carry out development either on its own behalf or on behalf of itself and others, including joint ventures design and build an arrangement to design and build a development generally on land not controlled or owned detailed planning permission planning permission in which all relevant matters are addressed in the initial application, as compared to outline planning permission forward private order book the Group’s reservations from customers both for plots that are contracted but for which construction is yet to complete and for plot reservations that have yet to exchange. A deposit is initially taken to hold the plot while the potential sale is vetted by the Group (or by the appointed third-party agents in the case of Millgate)

HCA the Homes and Communities Agency, a public body that enables development, including delivery of affordable housing, in England

Help to Buy a financing scheme of the UK Government designed to encourage home ownership in the UK home a single unit of residential property (flat, house or other form of dwelling)

Housebuilding division the Group’s Housebuilding division, which develops both large- and smaller-scale sites, providing private and affordable housing on land owned or controlled by the Group, primarily around London and the South East of England housing associations private non-profit organisations that provide affordable housing to people on a low income or who need extra support, also known as Registered Social Landlords or Private Registered Providers of Social Housing

274 joint ventures a business structure entered into by the Group and its partners when developing sites, through which the joint venture vehicle owns or controls the land land bank land available to the Group for development (both controlled land and owned land)

LAs local authorities, or local governments, in the United Kingdom legacy sites sites acquired for which the historic land cost exceeds the current market value of the land option agreement an agreement granting the Group the right to acquire land in the future at a fixed price or at a specified percentage of market value at the time the option is exercised outline planning permission planning permission establishing the general principles of how a site can be developed, which is granted subject to conditions requiring the subsequent approval of one or more reserved matters part exchange a process whereby a potential customer exchanges their current property as part of the consideration for the purchase of a new property

Partnerships division the Group’s Partnerships division, which specialises in medium- to large-scale housing regeneration schemes delivering private and affordable homes, predominantly in partnership with public sector landowners, such as LAs and housing associations peak funds the maximum net funds committed by the Group to a development at any given time place-making an element of the Group’s design-based approach to development aimed at providing residents of the Group’s homes with a sense of place planning permission permission granted by a local planning authority for a site or the passage of a resolution to grant the planning permission, which could be detailed planning permission or outline planning permission plot an area of land on which a single home can be built preferred bidder the final bidder identified during a public procurement process with which an LA seeks to finalise a DA priority profit profit received under certain partnership DAs before the land value is calculated for regenerated land private housing homes sold or to be sold in the open market directly by the Group or a joint venture (i.e. to the public rather than to a housing association or local authority)

PRS housing private rented sector housing that is built by the Group to be sold to institutional investors who subsequently rent the properties as private landlords reserved matters planning subsequent planning permission for aspects of a proposed permission development for which an applicant initially submitted an outline planning application

275 ROCE return on capital employed, which is calculated as the underlying operating profit divided by the average TNOAV for the given year shared equity scheme schemes in which a purchaser is sold a certain equity percentage interest in a home in exchange for the remainder of the equity interest upon the property’s resale or after a fixed term s106 agreements agreements between developers and LAs entered into pursuant to section 106 of the Town and Country Planning Act 1990 (as amended), which govern the developer’s commitments to build affordable housing and infrastructure, as well as provide other community benefits

Strategic Land strategically sourced land controlled or acquired without planning permission, generally through option agreements or conditional contracts, for which the optionality or conditionally is based on successfully obtaining planning permission for development on the land

TNAV tangible net asset value, which is calculated as net assets excluding intangible assets and mandatory redeemable preference shares (including the outstanding return on mandatory redeemable preference shares)

TNOAV tangible net operating value, which is calculated as net assets excluding intangible assets, net bank debt (excluding unamortised bank loans and arrangement fees) and mandatory redeemable preference shares (including the outstanding return on mandatory redeemable preference shares) underlying group operating profit underlying operating profit is calculated as the Group operating profit including the proportional contribution of associate and joint ventures’ operating profit and excluding the impact of non-underlying items (which includes fees incurred in relation to business combinations or capital markets transactions and items which are material either because of their nature or size and which do not relate to the Group’s underlying performance)

276 sterling 166801 166801 Project Acre - Cover (15mm Spine).indd 4-6 30/01/2016 01:30 February 2016

166801 Project Acre - Cover (15mm Spine).indd 1-3 30/01/2016 01:30