112 Kier Group plc Annual Report and Accounts 2015 read in this context. This is not a complete list of all risks identified by our audit. audit. our by identified risks all of list acomplete not is This context. this in read be should procedures our of results the on make we comments any and awhole, as statements financial the on opinion an provide to order in areas specific these address to audit our tailored we how out set also We have below. table the in focus’ of ‘areas as identified are effort, and resources our of allocation the including audit, our on effect greatest the had that misstatement material of risks The fraud. to due misstatement material a risk of represented that directors the by bias of evidence was there whether evaluating including controls, internal of override management of risk the addressed also we audits our of all in As uncertain. inherently are that events future considering and assumptions making involved that estimates accounting significant of respect in example for judgements, subjective made directors the where at looked we particular, In statements. financial the in misstatement material of risks the assessing and materiality determining by audit our We designed &Ireland)’). (UK (‘ISAs Ireland) and (UK Auditing on Standards International with accordance in audit our We conducted focus of areas our and audit our of scope The Overview approach audit Our • • • • In our opinion: Our opinion statements financial the on Report plc of Kier Group auditor’s members to the Independent report IAS Regulation. the 4of Article statements, financial Group the regards as and, 2006 Act Companies the of requirements the with accordance in prepared been have statements financial The Accepted Accounting Practice; and Generally Kingdom United with accordance in prepared properly been have statements financial company parent The Union; European the by adopted as (‘IFRSs’) Standards International with Financialaccordance Reporting in prepared properly been have statements financial Group The ended; then year the for flows cash and Group’s profit the of and 2015 June 30 at as affairs company’s parent the of Group’s and the of state the of view fair and a true (‘thecompany statements’) financial statements financial give parent and statements financial plc’s Group Group Kier Audit scope Materiality Areas of focus • • • • • • • Assessment of carrying value of goodwill. of value carrying of Assessment forAccounting to adjustments profit. underlying provisioning. and progress in work recognition, profit –including contracts long-term for Accounting Valuation of land and properties. Acquisition for accounting Mouchel. revenues. Group of 95% for accounted work audit our performed we where divisions The Mouchel. of 2015 8June on acquisition the for accounting the to attention particular paid and Group’s divisions, the of four all across work audit We conducted non-underlying items. excluding tax before profit consolidated 5% of represents which £4.3m materiality: Group Overall Accepted Accounting Practice). Kingdom Accounting Standards (United Kingdom Generally iscompany financialstatements applicable law and United parent the of preparation the in applied been has that framework reporting financial The Union. European the by adopted as IFRSs and law applicable is statements financial Group the of preparation the in applied been has that framework reporting financial The • • • • • • comprise: statements plc’s financial Group Kier we have audited What of significant accounting policiesof accounting significant and information. other explanatory asummary include which statements, financial the to notes The then ended; and year the for equity in changes of statement Consolidated The ended; then year the for statement flow cash Consolidated The ended; then year the for income comprehensive of statement Consolidated and statement income Consolidated The 2015; June 30 at as sheet balance Company The 2015; June 30 at as sheet balance Consolidated The

financial statements. Group’s the in inventories of value carrying the on impact material a have could cost build and price sales of estimate forecast Group’s the in achange Therefore amount. recoverable their above valued are they that arisk is there as development of intention immediate no is there where sites those on work our We focused commenced. has work building where (£167m) progress in work (£117m) residential development and residential for held Group’s land the comprises which division, Residential the within £284m of inventory holds Group The judgement. significant require may which prices), current to reference (by costs build and prices selling forecast of estimate management’s upon dependent is and date sheet balance each at out carried is inventory of value realisable net the of assessment An sell). and build to costs remaining the less price selling forecast (ie the value realisable net and cost of lower the at stated is Inventory (notes). 146 page and policies) accounting (significant 126 page Report), Committee Audit and Management (Risk 80 page to Refer properties and land of Valuation capital. of cost average weighted adjusted arisk of calculation customer income was particularly judgemental, as it requires the contractual the to applied rate discount the of determination The from Mouchel’s contractual customers. stream income the discounting by calculated is these of value The expert. external an by performed work the on based contracts, customer Mouchel’s of respect in assets £141.0m intangible of identified Management Valuation of intangibles identifiable sheet. balance the in recognised previously not were that process diligence due the during identified Mouchel in exposures certain of estimate best its reflect These acquired. assets net of analysis its following provisions adjustment value fair of £15.1m recorded Management Fair value adjustments subjective process. aparticularly be can which of both assets, identifiable intangible separately any valuing including acquired, assets and liabilities the assess to exercise value afair required the acquisition consideration, a issue. through rights funded for Accounting £260.6m for 2015 8June on Mouchel acquired Group The (notes). 158 page and policies) accounting (significant 123 page Report), Committee Audit and Management (Risk 80 page to Refer Acquisition accounting for Mouchel Area of focus indicated the land or properties tested were impaired. were tested properties or land the indicated that procedures audit our through issues any encounter not We did • • • follows: as appraisals these underlying assumptions key the challenged and values carrying the supporting appraisals development property-specific the We reviewed intangible assets had been identified and valued appropriately. valued and identified been had assets intangible relevant the that determined have we done work the on Based • • • following: the challenged and expert that of objectivity and competence professional the evaluated we so doing In by management’s expert. external allocation price purchase the on performed work the We reviewed Valuation of intangible identifiable assets the industry. of experience and knowledge our and circumstances particular Mouchel’s of understanding our on based exercise value fair the We determined that management’s analysis appropriately reflects acquisition. the during prepared reports diligence due the of review from formed expectations, own our against management by made adjustments of quantum and completeness the We assessed Fair value adjustments How our audit addressed the area of focus of area the addressed audit our How assets as published by estate agents. estate by published as assets comparable of prices list the and achieved prices sales of sample a of price sales forecast the comparing by and agents sales external management’s from evidence third-party supporting We challenged management’s to sales forecast prices and sites; these develop to intention their on management We challenged sites; other on properties comparable or suppliers with correspondence estimates, cost surveyor quantity including confirmations third-party against explanations validating differences, were there where and sites other on units similar for costs build the to comparing by foot square per cost build expected management’s We reviewed be required for the fair value to be materially misstated. materially be to value fair the for be required would that change of extent the ascertain to assumptions and inputs key other and rate discount the We sensitised adjustments. value fair the of amount carrying the determine to used timings, flow cash and claims profitability, as such judgements, and assumptions contract the on management financial and commercial operational, senior We challenged future orders. firm sufficiently or agreements existing either these were and checked that for contracts significant documentation third-party obtained we contracts, customer the to relation In 113 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 114 Kier Group plc Annual Report and Accounts 2015 within underlying profit. inappropriately presented therefore and identified properly being not year the during gains one-off of risk the considered We also consistently. or presented appropriately classified not are amounts if misled could be accounts the of users therefore and judgement to subject is ‘non-underlying’ as classified are items which of determination The • • • • • • following: the of consisting items’ ‘non-underlying of disclosure separate with Group, the of results underlying the of aview presented has management business, the of performance underlying the of understanding abetter give to order In 131 (notes). page and policies) accounting 124 (significant page Report), Committee Audit and Management 81 (Risk page to Refer Accounting for to adjustments underlying profit Group. the by recognised loss or profit of level the in error amaterial in result could recoverable not are they where forecast contract the in amounts these of inclusion The liable. is customer the which for costs additional other or delays for contractor the against made claims and events, compensation customer, the by requested contract the to variations following: the from These judgements include the expected recovery of costs arising period. current the in also therefore and date to recognised loss or profit of amount the in variance amaterial in result could forecast contract the in error An contracts. on revenue and costs forecast the of estimates suitable preparing in involved judgement the of because audit our for risk asignificant is contracts on Profit completion. at contract the of costs total estimated the to relative date sheet balance the at performed work the for incurred costs contract of proportion the to reference by assessed This is activity. contract of completion of stage the on based is IAS11 in contracts with accordance construction and services long-term on profit of recognition The divisions. Services and Construction the both in contracts long-term significant has Group The policies). accounting 124 (significant page and Report) Committee Audit and Management 81 (Risk page to Refer provisioning and progress in work recognition, profit –including contracts long-term for Accounting Area of focus plc of Kier Group auditor’s members to the Independent report held for sale, presented in discontinued operations. operations. discontinued in presented sale, for held business mining UK the of write-down the of respect in £22.9m acquired businesses; and on unwind discount and amortisation intangible of £14.8m Services; &Passenger Fleet of disposal the to relating £3.4m Scheme; Pension Group Kier the of closure the of respect in £6.3m Mouchel; to relating costs acquisition of £13.5m reorganisation and post-acquisition integration costs; internal asignificant to relating charges restructuring of £8.4m continued 30 June 2015 is materially appropriate. materially is 2015 30 June ended year the for statements financial the in items exceptional and non-underlying of presentation the that satisfied were we overall items, these of quantum and nature the considered Having business. development aproperty of activity underlying with consistent transactions property normal are these that viewpoint management’s accepted We have ventures. joint and transactions development property certain of disposal on profit of recognition the surrounds area this in judgement key The items. non-underlying within identified be should these whether to as management challenged and tax before profit underlying impacting year the during gains non-recurring material certain of nature the We assessed as non-underlying. presentation their with satisfied were we charges, restructuring the of components individual the of nature the assessed Having £8.4m. of charges restructuring the included These others. than judgemental more be to considered we which non-underlying as classified had management that items certain highlighted work Our next. the to year classification clearly disclosed and applied consistently from one the for basis the losses, and gains between balanced should be classification that mindful being item, each of classification the of appropriateness the on management We challenged • • • considered: we this do to In order performance. underlying derive to tax before profit to statutory made adjustments the of appropriateness the We considered inappropriate. materially were made judgements the where issues any identify not We did contract. the on taken position the supported information this whether assess to applicable where experts Group’s legal and the insurers by undertaken these of assessments as well as claims insurance recognised to relating insurers with correspondence We inspected forecasts. the in included amounts the in reflected appropriately been have clauses key these whether assess and fees success and damages contractual customer, the with efficiencies or overruns cost of sharing the as such mechanisms contractual relevant identify to clauses key for contracts signed selected We inspected whether this information was consistent with the estimates made. assess to applicable, if Group, the by contracted experts technical or legal from these of assessments third-party obtained and events, compensation and claims variations, concerning customers with minutes meeting and correspondence We inspected size and knowledge. industry and nature asimilar of contracts other of budget against out-turn and forecast andthe forecast, the historical financialperformance in included events compensation and claims variations, of recovery expected the included which assumptions, key the particular in forecasts, management’s in applied judgements the We challenged Kong. Hong in MTR and UK the in Crossrail as such projects infrastructure major on positions forecast the included particular in These outcome. profit therefore and values contract final the over uncertainty estimation greatest the with contracts those on work our We focused How our audit addressed the area of focus of area the addressed audit our How this matter, particularly the Practice Note issued in December 2013. December in issued Note Practice the particularly matter, this Council byRecent pronouncements on the Financial Reporting and IAS1; particular in IFRS, of application The items; underlying non- and exceptional on policy Group’s accounting The

where our work was focused on particular material contracts where we determined there to be heightened risk of material misstatement. material of risk heightened be to there determined we where contracts material particular on focused was work our where Jamaica and Dubai Kong, Hong in businesses International Construction the in procedures audit specified performed we addition, In Group’s revenues. the of 95% for accounted work audit our performed we where divisions The Group. the of audit the as time same the at performed is which companies, UK the on work audit statutory our through statement flow Cash and sheet Balance statement, Group’s Income the over coverage audit appropriate obtain we that satisfied are we UK, the in incorporated companies in are assets operating and profits trading Group’s revenues, the of majority the As acquisition. the for accounting the on work our through addressed largely was which sheet, balance the on procedures audit our focused We therefore tax. before profit Group’s underlying the impact significantly not did Mouchel acquisition, the of timing the to Due function. services central its with together divisions, four the up make that units reporting of aconsolidation are statements financial Group The Mouchel). (including Services and Construction Residential, Property, being divisions, four across structured is Group The operates. Group the which in industry the and controls, and processes accounting the Group, the of structure the account into taking a whole, as statements financial the on opinion an give to able be to work enough performed we that ensure to audit our of scope the We tailored scope audit the weHow tailored focus. significant of areas be to CGUs Residential or Property Construction, the consider not did size, we its to Due goodwill. of amount carrying the support to CGU Services the within generated be not will flows cash sufficient that arisk is there Therefore market. the in pricing competitive more and costs increased to due margins challenging experience to continues industry services The CGUs. respective the by derived be to expected forecasts flow cash the of value present the by measured is which use in value to reference with annually, impairment for goodwill tests Management impairment. of arisk considered was not this transaction, the of timing the to due although acquisition, the on work our of part as Mouchel of respect in recognised goodwill of value carrying the We considered CGU. Construction the to (3%) allocated remainder the with CGU Services the to allocated is Gurney May of acquisition the from recognised goodwill (97%) of (£194.7m) majority The 2013. Gurney May August in and 2015 June in (£301.3m) Mouchel of acquisition the to in relation is Group’s goodwill the of majority The Property. and Residential Services, (‘CGUs’) Construction, are units key cash-generating Group’s the statements, financial the of 12 note in detailed As 141 page (notes). and policies) accounting 124 (significant page Report), Committee Audit and Management 81 (Risk page to Refer ofAssessment value carrying of goodwill Area of focus accounting standards and no issues were identified. were issues no and standards accounting applicable with line in were disclosures the whether tested We also impaired. not is goodwill the that satisfied were we therefore and CGU, Services the of amount carrying the over management by calculated headroom significant was There performed. analyses sensitivity own our and management’s evidence, supporting of review our on based assumptions key management’s with issues any identify not We did • • • challenged: we specifically, More appropriate. were model the underpinning assumptions the that and IAS36, of requirements the with line in was assessments impairment annual the in applied methodology the that ourselves satisfy to order in CGUs the of use in value the supports that model flow cash Group’s discounted the of integrity and principles the tested We also business. that of performance the measure to uses management that information financial the reviewing by Services, particularly management, by defined CGUs the of justification the corroborated we procedures, audit our of part As How our audit addressed the area of focus of area the addressed audit our How and underlying cash flows. cash underlying and assumptions key all to sensitivity realistic further considered and analysis sensitivity management’s reviewed We also available. where data external available to comparing including assertions, key for evidence remaining sceptical of explanations and obtaining supporting inflation), and rate growth rate, (discount models these in applied management assumptions key other the We assessed andindustry historical outcomes. and Group the of knowledge our agreements, underlying to profitability and margin contract as such inputs key We agreed

115 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 116 Kier Group plc Annual Report and Accounts 2015 We have no exceptions to report arising from this responsibility. this from arising report to exceptions no We have • • • opinion: if, our in you to report to required are we 2006 Act Companies the Under received explanations and information and records accounting of Adequacy • opinion: if, our in you to report to required are we &Ireland) (UK ISAs Under reporting (UK &Ireland) ISAs • • In our opinion: opinions 2006 Act Companies Consistency of other information reporting required Other concern. agoing as continue to ability company’s parent Group’s and the to as aguarantee not are statements these predicted, be can conditions or events future all not because However, appropriate. is basis concern going the of use directors’ the that concluded have we audit our of part As signed. were statements financial the date the from year one least at so, for do to them intend directors the that and operation, in remain to resources adequate have company parent and Group the that presumes basis concern going The accounting. of basis concern going the using statements financial the prepare to appropriate is it that concluded have directors the statement, directors’ the in noted As review. our performed having report to nothing We have concern. going to 59, relation in page on out set statement, directors’ the review to required are we Rules Listing the Under Going concern benchmark applied for Rationale it weHow determined Overall Group materiality follows: as awhole as statements financial the for materiality determined we judgement, professional our on Based awhole. as statements financial the on and individually both misstatements, of effect the evaluate to and procedures audit our of extent and timing nature, the and audit our of scope the determine to us helped considerations, qualitative with together These, materiality. for thresholds quantitative certain We set materiality. of application our by influenced was audit our of scope The Materiality plc of Kier Group auditor’s members to the Independent report misstatements below that amount that, in our view, for qualitative reasons. reporting warranted as well as £0.2m above audit our during identified misstatements them to report would we that Committee Audit the with We agreed • • the accounting records and returns. and records accounting the with agreement in not are audited be to Report Remuneration Directors’ the of part the and statements financial company parent The us; by or visited not branches from received been not have audit our for adequate returns or company, parent the by kept been not have records accounting Adequate or audit; our for require we explanations and information the all received not We have — — — is: report annual the in Information statements. financial the with consistent is structures capital share about and systems management risk and control internal to respect with 63 page on out set as Statement Governance Corporate the in given information The and statements; financial the with consistent is prepared are statements financial the which for year financial the for Report Directors’ the and Report Strategic the in given information The communicated by us to the Audit Committee. Audit the to us by communicated matters address appropriately not does Committee Audit the of work the describing Code, the of C.3.8 provision by 76, page required as on report annual the of section The audit. our performing of course the in acquired company parent and Group the of knowledge our with inconsistent materially is strategy and model business performance, company’s parent Group’s and the assess to members for necessary information the provides and understandable and fair, be balanced to awhole as taken report annual the consider they Code’), that (‘the Code Governance Corporate UK C.1.1 the of provision with 72, accordance in page on directors the by given statement The — — — otherwise misleading. otherwise or audit; our performing of course the in acquired company parent and of the Group knowledge our with, inconsistent materially or on, based incorrect materially apparently or statements; financial audited the in information the with inconsistent materially exceptional charges and provides a consistent year-on-year basis for our work. our for basis year-on-year aconsistent provides and charges exceptional of effect disproportionate any eliminates it as measure appropriate most the is tax before profit underlying that We believe items. non-underlying excluding tax before profit consolidated of 5% of abenchmark applying by materiality determined we judgement, professional our on Based statements. financial the 1to Note in management by defined as items, non-underlying excluding tax before profit consolidated 5% of £4.3m continued arising from this responsibility. this from arising report to exceptions no We have responsibility. this from arising report to exceptions no We have arising from this responsibility. this from arising report to exceptions no We have

• • • assessment of: an includes This error. or fraud by caused whether misstatement, material from free are statements financial the that assurance reasonable give to sufficient statements financial the in disclosures and amounts the about evidence obtaining involves audit An involves statements financial of audit an What writing. in consent prior our by agreed expressly where save come may it hands whose into or is shown report this whom to person other any to or purpose other any for responsibility assume or accept opinions, these giving in not, We do purpose. other no for and 2006 Act Companies 16 the of Part 3 of Chapter with accordance in abody as members Company’s the for only and for prepared been has opinions, the including report, This Auditors. for Standards Ethical Board’s Practices Auditing the with comply to us require standards Those &Ireland). (UK ISAs and law applicable with accordance in statements financial the on opinion an express and audit to is responsibility Our view. fair and a true give they that satisfied being for and statements financial the of preparation the for responsible are directors 111, the page on out set Statement Responsibilities Directors’ the in fully more explained As directors the of those and responsibilities Our audit and the statements financial the for Responsibilities review. our performed having report to nothing We have Code. Governance Corporate UK the of 10 provisions the with compliance relating Statement Governance toCorporate the parent company’s the of part the review to required are we Rules Listing the Under responsibility. this from arising report to exceptions no We have company. parent the by prepared been not has statement governance acorporate opinion, if, in our you to report to required are we 2006 Act Companies the Under Corporate governance statement responsibilities. these from arising report to exceptions no We have made. not are law by specified remuneration directors’ of disclosures certain opinion, if, in our you to report to required are we 2006 Act Companies the Under reporting 2006 Act Companies Other 2006. Act Companies the with accordance in prepared properly been has be audited to Report Remuneration Directors’ the of part the opinion, our In opinion 2006 Act –Companies report remuneration Directors’ remuneration Directors’ The overall presentation of the financial statements. statements. financial the of presentation overall The and directors; the by The reasonableness of estimates accounting significant made consistently applied and adequately disclosed; been have and circumstances company’s parent the and Group’s the to appropriate are policies accounting the Whether Chartered Accountants and Statutory Auditors Statutory and Accountants Chartered LLP PricewaterhouseCoopers of behalf on and for Jonathan Hook (Senior Statutory Auditor) 16 September 2015 16 September 6RH WC2N London Place 1 Embankment or inconsistencies we consider the implications for our report. our for implications the consider we inconsistencies or misstatements material apparent any of aware become we If audit. the performing of course the in us by acquired knowledge the with, inconsistent materially or on, based incorrect materially apparently is that information any identify to and statements financial audited the with inconsistencies material identify to report annual the in information non-financial and financial the all read we addition, In both. of acombination or procedures substantive controls, of effectiveness the testing through evidence audit We obtain conclusions. draw to us for basis areasonable provide to necessary consider we extent the to techniques, auditing other and sampling using information, examine and We test financial statements. the in disclosures the evaluating and own judgements, our forming evidence, available against judgements directors’ the assessing by areas these in work our focus We primarily

117 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 118 Kier Group plc Annual Report and Accounts 2015 Finance costs Finance – From discontinued operations 3 2 – From continuing operations share per earnings Diluted – From discontinued operations continuing operations from year the for Profit/(loss) Taxation tax before Profit/(loss) Finance income Cost of sales of Cost Group and share of joint ventures joint of share and Group Revenue Continuing operations For year 30 the June 2015 ended statement income Consolidated 1 holders of the parent company) of parent the holders equity to (attributable operations discontinued from year the for Loss operations Discontinued Profit/(loss) from operations ventures joint of disposal on Profit Gross profit/(loss)Gross revenue Group ventures joint of share Less Owners of the parent the of Owners to: Attributable Profit/(loss) for the year joint ventures of results post-tax of Share expenses Administrative Non-controlling interests Non-controlling – From continuing operations share per earnings Basic

Restated to reflect the impact of the bonus element of the rights issue associated with the Mouchel transaction (see note 24). note (see transaction Mouchel the with associated issue rights the of element bonus the of impact the reflect to Restated 19). note (see discontinued as activities mining UK Group’s the classify to Represented 4). note (see items non-underlying before Stated Notes 30e 11 11 11 11 19 14 9a 5 2 5 2 2 2 Underlying (2,993.0) 3,351.2 3,275.9 (201.9) 282.9 103.7 items (75.3) (19.5) (16.9) 66.8 66.8 96.0p 85.9 95.6p 14.8 69.0 65.7 (3.1)p (3.1)p (2.2) £m 1.1 1.7 7.9 1

underlying (note 4) (note items (55.8)p (55.6)p (30.8)p (30.8)p (21.8) (61.3) (61.3) (61.3) (39.5) (42.8) (42.8) (46.4) Non- (3.6) £m 6.9 – – – – – – – – – (2,993.0) 3,351.2 3,275.9 (244.7) 282.9 (33.9)p (33.9)p (75.3) (23.1) (24.0) (10.0) Total Total 2015 40.2p 14.8 40.0p 60.9 29.5 39.5 £m 1.1 5.5 5.5 4.4 1.7 7.9 Underlying Underlying (2,653.0) 2,906.9 2,937.8 (174.3) 253.9 items (13.5) (30.9) (15.8) 58.5 86.9p 60.2 59.2 59.2 73.7 87.3 87.5p (1.5)p (1.5)p £m (1.0) 2.2 1.6 6.1 0.7 1 3 3 3 3

underlying underlying (note 4) (note (58.3) (48.5) (48.5) (48.5) (48.5) (53.0) (70.8)p (49.5) (71.3)p items Non- (3.5) (5.3) (3.5) 9.8 £m – – – – – – – – – – 3 3 (2,656.5) 2,906.9 2,937.8 (223.8) 250.4 (30.9) (21.1) 2014 34.3 16.2p 15.4 16.1p 10.0 11.7 10.7 10.7 Total (1.5)p (1.5)p (1.0) (3.7) £m 2.2 1.6 6.1 0.7 2 3 3 3 3 Discontinued operations Non-controlling interests – continuing operations –continuing interests Non-controlling of parent holders Equity to: Attributable Total for the comprehensive loss year forOther the comprehensive loss year Continuing operations Continuing from: arises shareholders toequity attributable income Total comprehensive Total items that will not be reclassified to the income statement income tothe reclassified be not will that Total items provisions on tax Deferred liabilities benefit defined on losses actuarial on tax Deferred liabilities benefit defined of Re-measurement statement income tothe reclassified be not will that Items Total items that may be reclassified subsequently to the income statement income tothe subsequently reclassified be may that Total items exchangeForeign translation differences operations foreign of funding long-term on losses exchange Foreign instruments hedging flow cash on movements value fair on tax Deferred instruments hedging flow cash on movements value Fair hedging instruments flow cash on movements value fair venture joint of share on tax Deferred instruments hedging flow cash on movements value fair venture joint of Share statement income tothe subsequently reclassified be may that Items Profit for the year For year 30 the June 2015 ended ofcomprehensive statement Consolidated income Notes 14 14 9c 9c 9c 9c

8

2015 2015 (25.8) (21.4) (21.4) (20.3) (20.3) (34.0) (24.0) (27.2) (0.2) (0.2) 1.1 £m 1.4 6.8 0.2 5.5 2.6 0.9 0.7 – – (25.5) (18.7) (19.4) 2014 2014 15.1 (4.0) 10.7 (8.4) (3.6) (1.9) (8.7) (8.7) (4.9) (1.0) (9.4) (9.4) (1.7) 0.3 6.1 0.7 £m – 119 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 120 Kier Group plc Annual Report and Accounts 2015 Transfers shares own of Issue payments Tax share-based on payments Share-based Dividends paid Dividends At 30 June 2014 June 30 At At 30 June 2015 June 30 At (loss)/income comprehensive Other 1 year the for Profit Transfers payments Tax share-based on shares own of Issue 2013 June 30 At For year 30 the June 2015 ended in equity ofchanges statement Consolidated Share-based payments Share-based shares own of Purchase paid Dividends (loss)/income comprehensive Other year the for Profit

See note 9 to the Company only accounts on page 163. page on accounts only Company the 9to note See 1 capital Share Share 0.2 0.4 0.4 0.6 1.0 £m £m – – – – – – – – – – – – – premium premium 334.8 408.5 Share 63.3 10.4 73.7 £m – – – – – – – – – – – – – redemption reserve Capital Capital £m 2.7 2.7 2.7 – – – – – – – – – – – – – – – Retained earnings 102.0 (40.2) (25.5) (37.3) (27.2) 50.0 51.4 10.0 41.7 (1.2) (0.1) (1.1) £m 3.4 0.5 4.4 4.0 – – Cash flow flow Cash reserve reserve hedge (13.0) 10.1 (2.9) (2.2) 0.7 £m – – – – – – – – – – – – – Translation reserve (3.6) (4.0) (2.9) 0.4 0.7 £m – – – – – – – – – – – – – reserve Merger 184.8 183.6 134.8 (50.0) 1.2 1.2 £m – – – – – – – – – – – – – to owners of owners to Attributable Attributable the parent 335.2 155.8 194.2 583.6 306.7 (25.8) (40.2) (19.4) (37.3) 10.0 (1.1) (1.1) (0.1) 3.4 0.5 4.4 4.0 £m – – controlling interests interests Non- (2.3) (0.2) 2.5 1.1 3.0 1.8 0.7 £m – – – – – – – – – – – equity equity 335.2 158.3 194.2 585.4 309.7 (25.8) (42.5) (19.4) (37.5) Total 10.7 (1.1) (0.1) 5.5 3.4 0.5 4.0 £m – – Trade and other receivables other and Trade behalf by: its on signed were and 2015 16 on September directors of Board the by approved were 160 to 118 pages on statements financial The 1 Deferred tax assets tax Deferred ventures joint to loans and in Investments equipment and plant Property, assets Intangible assets Non-current At 30 June 2015 sheet balance Consolidated Trade and other receivables other and Trade Inventories assets Current assets Non-current Corporation tax receivable tax Corporation Provisions obligations benefit Retirement payables other and Trade liabilities financial Other obligations lease Finance Borrowings liabilities Non-current liabilities Current Provisions payable tax Corporation payables other and Trade obligations lease Finance Overdraft liabilities Current assets Total group adisposal of part as sale for held Assets equivalents cash and Cash Non-current liabilities Non-current liabilities financial Other assets Current Merger reserve Merger Translation reserve reserve hedge flow Cash earnings Retained Capital redemption reserve Share premium Share capital Equity Net assets Total liabilities group adisposal of part as sale for held Liabilities Total equity interests Non-controlling parent the of toowners attributable Equity Represented to disclose assets held for sale separately as assets held for sale as part of a disposal group and liabilities held for sale as part of a disposal group group adisposal of part as sale for 19). held note (see liabilities and group adisposal of part as sale for held assets as separately sale for held assets disclose to Represented Director Mursell Haydn Director Bev Dew Notes 12 18 22 22 13 18 20 20 20 23 23 15 19 19 21 21 14 16 27 27 24 24 24 24 8 2 (2,155.6) (1,355.0) (1,314.3) 1,020.0 1,527.1 2,741.0 (394.8) (632.6) (153.6) (168.0) 121.2 408.5 535.3 134.8 585.4 585.4 583.6 193.9 254.0 776.7 737.8 (11.4) (13.1) (12.7) (45.6) (25.7) (14.9) 2015 2015 11.3 31.4 79.4 41.7 (1.5) (2.2) (2.9) 1.8 1.0 2.7 £m – – – (1,522.2) (1,078.1) 1,831.9 1,176.7 (982.7) (381.7) (195.4) 184.8 586.4 582.4 323.8 112.4 192.4 306.7 309.7 309.7 470.4 (55.8) (59.8) (39.8) (62.4) (59.4) 2014 (27.9) (27.6) 40.9 23.5 72.8 51.4 73.7 (2.9) (9.3) (3.6) (2.0) (0.1) 1.8 3.0 0.6 2.7 7.5 £m – 1 121 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 122 Kier Group plc Annual Report and Accounts 2015 Issue of shares activities financing from flows Cash Interest paid shares own of Purchase Net cash used in investing activities investing in used cash Net costs disposal of net business plant of disposal on proceeds Non-underlying proceeds disposal non-underlying before activities investing in used cash Net acquired Cash/(overdraft) Inflow from new borrowings equipment and plant property, on leases finance from Inflow finance raising incurred outflow Cash in joint ventures Investment resale for held assets in investment Net assets intangible of Purchase equipment and plant property, of Purchases ventures joint of sale from Proceeds equipment and plant property, of sale from Proceeds activities investing from flows Cash activities inflow/(outflow) operating from cash Net ventures joint from received Dividends activities inflow/(outflow) operating from Cash items non-underlying from outflow Cash items non-underlying before activities operating from inflow Cash Decrease in provisions Other non-cash items non-cash Other assets intangible of impairment and amortisation recognised, goodwill Negative charge payments share-based settled Equity charge pension of than)/in excess (less fund pension to contributions cash Normal Depreciation charges Depreciation Increase inIncrease payables Decrease/(increase) in receivables in inventories Increase fund pension to contributions Special capital working in movements before flows cash Operating equipment and plant property, of disposal on Loss/(profit) ventures joint of disposal on Profit Opening cash, cash equivalents and overdraft and equivalents cash cash, Opening overdraft and equivalents cash cash, in Increase/(decrease) generated byNet financing cash activities interests minority to paid Dividends parent the of holders equity to paid Dividends borrowings of Repayment lease repayments Finance of subsidiaries Acquisition (paid)/received taxes Income Interest received Closing cash, cash equivalents and overdraft and equivalents cash cash, Closing Share of post-tax trading results of joint ventures joint of results trading post-tax of Share cost finance Net items Non-underlying operations discontinued including tax before Profit activities operating from flows Cash For year 30 the June 2015 ended flow cash Consolidated statement Notes 30b 30e 30e 30e 30a 24 12 20 13 21 21 25 14 14

5 4

(205.5) (305.1) (305.1) (262.6) 138.5 181.4 192.8 121.4 365.1 334.1 110.2 254.0 199.9 119.7 (18.8) (32.2) (28.3) (12.6) (22.6) (14.8) (35.6) (94.0) (18.7) (19.8) (39.1) (15.6) 2015 2015 32.2 32.2 88.0 54.5 28.9 21.4 13.9 13.6 16.9 72.6 13.7 (3.5) (2.3) (0.1) (2.6) (4.6) (7.9) 2.1 3.5 2.0 3.4 1.7 £m – – (156.3) (129.2) (125.0) 122.6 152.3 102.9 (48.2) (65.6) (35.6) (16.8) (20.0) (29.6) (14.2) (29.1) (11.7) (31.7) (79.7) (19.7) 2014 96.3 40.3 11.3 20.2 42.2 51.2 15.9 14.8 10.8 41.5 72.6 17.3 (6.2) (5.9) (8.0) (0.2) (4.5) (6.1) (1.6) (1.1) (4.0) (7.0) £m 2.2 2.2 1.3 4.2 0.3 6.0 4.0 – – has indicated that early adoption will be permitted. The Group has has Group The permitted. be will adoption early that indicated has IASB 2018; the June 30 in accounts Group the to time first the for applied be therefore will and 2017 earliest the at 1January after or on periods accounting for effective become will It Contracts’. ‘Construction IAS11 and ‘Revenue’ IAS18 replace will IFRS15 periods. future in interpretations and standards new these of impact the considering are directors The IFRS15 IFRS9 2017 respectively: 1January and 2018 1 January after starting periods for effect take will and issued, have been standards to amendments and standards new following The IAS36 IAS28 IAS27 IFRS12 IFRS11 IFRS10 onwards: 2015 June 30 ended year financial the for effective are standards to amendments and standards new following The value. fair their at stated are which instruments financial derivative for except basis cost historical the on prepared been have They sterling. pounds in presented are statements financial The statements. Group’s financial the preparing in basis concern going the adopt to continue directors the Accordingly, future. foreseeable the for existence operational in continue to resources adequate have Group the and Company the that expectation areasonable have directors the enquiries, making After its business activities. across suppliers and customers of range adiverse and contracts long-term resources, financial considerable has Group The preparation of Basis 161 163. to pages on presented are These (‘GAAP’). Practice Accounting Accepted Generally UK with accordance in statements financial company parent its prepare to elected has Company The 2014. 1July on beginning periods accounting for effective and Union European the by as adopted Committee Interpretations Reporting Financial International by the issued interpretations and (‘IASB’) Board Standards Accounting International the by issued standards accounting all applied has Group The IFRS. under reporting companies to applicable are that 2006 Act Companies the of parts those with and Regulation IAS EU the 4of Article with comply therefore (‘IFRS’) and Union European the by adopted as Standards Reporting Financial International with accordance in directors the by approved and prepared been have statements financial Group’s consolidated The Statement of compliance 2015. 16 on September directors the by approved were statements financial consolidated The joint arrangements. in Group’s interest the and Group’) ‘the as to referred (together subsidiaries its and Company the comprise 2015 June 30 ended year the for Company the of statements financial The consolidated Wales. and England in (‘UK’) incorporated and United Kingdom the in domiciled acompany is Company’) (‘the plc Group Kier 1 Significant accounting policies For year 30 the June 2015 ended statements Notes financial consolidated to the Revenue with from Customers Contracts Financial Instruments assets) non-financial for disclosures amount (Recoverable Assets of Impairment Ventures Joint and Associates in Investments Statements Financial Separate and Consolidated Entities Other in Interests of Disclosure Joint Arrangements Consolidated Financial Statements Group’s financial statements. the to relation in material considered are which items with dealing in consistently applied been have policies accounting following The required. than earlier and interpretations standards above the of any adopt to not chosen has Group The expected. is standards new these of adoption the from net impact significant no above, noted as IFRS15 of impact the than Other date. effective the of advance in upon acted and highlighted are procedures accounting current the to changes and understood fully is standard new the of effect and impact the that ensure to contracts major existing all of review asystematic begun settlement is accounted for within reserves. within for accounted is settlement case which in equity, as classified is consideration contingent the unless statement income the in recognised are consideration contingent the of value fair the to changes Subsequent date. acquisition the at value fair at recognised is payable consideration contingent Any incurred. as expensed are combination business a with connection in incurs Group the that securities, equity or debt of issue the with associated those than other acquisition, the to related Costs statement. income the in recognised generally are amounts Such relationships. pre-existing of settlement the to related amounts include not does transferred consideration The date. acquisition the of months 12 within finalised are date areporting at allocated values fair Provisional loss. or profit in immediately recognised is gain purchase’ a‘bargain negative, is result the When • • • • as: date acquisition the at goodwill measures 2010, Group the 1January after or on acquisitions For loss. or profit in recognised are re-measurements such from arising losses or gains any date; acquisition the at value fair to re-measured is acquiree the in interest equity held previously acquirer’s the of value carrying date acquisition the stages, in achieved is combination abusiness If are exercisable. currently that rights voting potential consideration takes into Group the control, assessing In activities. its from benefits obtain to as so entity an of policies operating and financial the govern to power the is Control Group. the to transferred is control which on date the is which date, acquisition the at as method acquisition the using for accounted are combinations Business Group until the date that control ceases. the to transfers control that date the from statements financial consolidated the in included are Subsidiaries activities. its from benefits economic obtain to as so entity an of policies operating and financial the govern to power indirect or direct has Group the when exists 2015. Control June 30 to up drawn Company the by controlled subsidiaries and Company the of statements financial the comprise statements financial consolidated The (a) Subsidiaries Basis of consolidation identifiable assets acquired and liabilities assumed. liabilities and acquired assets identifiable the of value) fair (generally amount recognised net The less acquiree; the in interest equity existing the of value fair the stages, in achieved is combination business the If plus acquiree; the in interests non-controlling any of amount recognised The plus transferred; consideration the of value fair The 123 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 124 Kier Group plc Annual Report and Accounts 2015 it is incurred. which in period the in off written is expenditure research Other • • • met: are conditions following the of all if only recognised are Group the by developed assets intangible generated Internally software Computer rights Contract follows: as principally are which assets, the of lives useful expected the over basis astraight-line on statement income the in expenses administrative to charged is Amortisation losses. impairment and amortisation accumulated less cost at stated are software computer and rights contract comprise which assets intangible Other disposal. on loss or profit the of determination the in included is goodwill of amount carrying attributable the entity, controlled jointly or asubsidiary of disposal On immediately. statement income the in recognised is goodwill income statement and is not subsequently reversed. Negative the in immediately recognised is impairment Any annually. at least impairment for reviewed and asset an as recognised is Goodwill asubsidiary. of liabilities and assets identifiable the of value fair the in Group’s interest the over consideration the of excess the represents consolidation on arising Goodwill assets intangible other and Goodwill the agreements. of terms the to according measured flows cash and liabilities assets, profits, sales, of share own its for accounts the Group IFRS11, with accordance In IFRS11. by defined as operations joint of category the under fall These other parties. with jointly contracts undertakes Group the time to time From entity. the in investment net the of part form substance, in that, interests long-term any with together investment the of amount carrying the is entity the in Interest recognised. are losses further no which nil, following to reduced is amount carrying the losses these fund to obligation no is there and entity the in Group’s interest the exceeds losses of share the Where sheet. balance consolidated the in investments in included is assets net their in interest its and statement income consolidated the in included is entities controlled jointly of losses less profits the of Group’s share the method this Under method. the equity using for accounted are ventures joint in Group’s interests The parties. with third control joint to subject is that activity economic an undertakes Group the whereby arrangement acontractual is arrangement A joint (b) Joint arrangements on consolidation. eliminated are expenses and income balances, transactions, intra-Group All Group. the by used those with consistency ensure to necessary where adjusted are subsidiaries of policies Accounting 1 Significant accounting policies continued For year 30 the June 2015 ended statements Notes financial consolidated to the the development cost of the asset can be measured reliably. measured be can asset the of cost development the economic benefits; and future generate will created asset the that probable is it identified; be can that created is asset an 3–7 years life contract remaining the Over Revenue profit recognition and 1 Group’s performance. the monitor to Board the by used measures key the of one is profit operating Underlying Group. the of performance underlying the highlight to order in non-underlying as items further disclose to appropriate be may it time to time from and examples, are These period. to period from basis acomparable on measured be can Group the of profit underlying the that so item non-underlying a as treated also is assets intangible acquired of Amortisation items. such of respect in provisions of reclassification include also They costs. transaction acquisition and impairments asset businesses, acquired newly of integration businesses, existing of reorganisation and restructuring of costs businesses, of disposal the on losses or gains include items non-underlying as disclosure to rise give may which items material of Examples performance. business Group’s underlying the of presentation consistent and aclear obtain to order in incidence or size nature, their of virtue by separately disclosed be to need they directors, the of judgement the in where, items non-underlying as statement income consolidated the in separately presented are items Certain items Non-underlying • • • • • follows: as are recognition profit for principles general The forecasting. contract of respect in place in are procedures review contract Consistent contract. that complete to costs and revenues the of review regular by determined is contract each of outcome final the of assessment The date. relevant the at contract the of completion of percentage the upon based profit the recognise and contract each of outcome final estimated the assess to is practice Industry practice. industry and standards accounting with accordance in calculated is contracts on Profit certified. actually are they until claims excludes but retentions) (including date sheet balance the to period the for out carried work of value gross the is It valuations. external by determined normally Revenue arises from increases in valuations on and contracts is (a) Construction contracts follows: as recognised are profit and Revenue operations. controlled jointly under out carried work of proportion Group’s the includes also It Group. the within sales eliminating after and discounts and rebates tax, added value of net receivable, or received consideration the of value fair the comprises Revenue

Exceptional items. Exceptional will be recovered. be will they that probable highly considered is it when completion to forecasts in included are events compensation and Variations and recovery; of certainty reasonable is there that extent the to only and losses foreseeable mitigate to included be may receivable of claims forecasts to completion, a and prudent reasonable evaluation contract preparing in that except payment, for or certified received when income as recognised are receivable Claims apparent; become they as soon as completion to the contract bringing in foreseen or incurred losses for made is Provision estimated reliably; be can outcome contract’s the when basis completion of apercentage on recognised are contracts other on Profits is complete; contract the when taken are contracts duration short on Profits continued 1 the Group provides more than one service in a service concession concession a service in service one than more provides the Group When Group. the by provided were services the which in period the in recognised is revenue service or (see Operation above). accounting policy on recognising revenue on construction contracts Group’s the with consistent performed, work the of of completion stage the on based recognised is agreement concession service a under services upgrade or construction to relating Revenue concession agreements (‘PFI’) service (e) Initiative Finance Private works. development and construction the of completion of percentage the with line in thereafter and sale of time the at works development and construction the of completion percentage the with line in sale of time the at recognised are profit and revenue completion, to prior but construction during sold is development a If work. development and construction the of completion percentage the on based construction, on progress the with line in recognised are profit and Revenue sale. of point the at recognised is profit or revenue no construction, of commencement of the advance in sold is adevelopment If completed. are development and construction of acts outstanding significant the as and sale of point the from recognised are profit and revenue completed, being construction of advance in sold are developments Where apparent. become they as soon as development a completing in foreseen losses any for made is Provision performance. development to relating commitments residual cover to necessary amounts any to subject is taken Profit developments. finished of disposal on contracts of exchange unconditional on taken is developments property of respect in Revenue (d) development Property apparent. become they as soon as asite completing in foreseen losses any for made is Provision forecasting. site of respect in place in are procedures review Consistent site. each on out-turn final the of made be to assessment an enable and complete to costs and revenues on These focus basis. asite-by-site on forecasts of preparation the is period aparticular to sites on profit attributing in Group the by used technique estimation principal The site. each from result out-turn expected the to reference by basis asite-by-site on recognised is Profit contracts. of exchange unconditional the on recognised is exchanges land and sales land from Revenue incentives. of net completion, legal on receivable or received consideration the of value fair the at recognised is sales housing from Revenue sales land (c) and housing Private included in deferred income. are amounts these recognised revenue of amount the exceeds invoicing Where customers. to invoiced actually amounts the and recognised revenue the between difference the is revenue Unbilled expenses. administrative to charged are amounts these obligations, its meet to aclient of inability of result as a is non-recovery Where recognised. revenue the against charged are amounts these client, the with adispute to due recoverable be to not found is recognised been has that revenue Where provided. is service the when and as recognised is recycling, and cleaning street management, facilities include which rendered, services from profit and Revenue (b) Services used. is value internal the case which in value, certified the to different materially is value internal the unless value, final estimated of apercentage as date to value certified taking by calculated normally is completion Percentage to the relative fair values of the services delivered. services the of values fair relative to the reference by allocated is received consideration the agreement, of the term of the lease or the expected useful life of the asset. the of life useful expected the or lease the of term the of shorter the over depreciated are leases finance under held Assets Plant and equipment (including vehicles) Leasehold buildings and improvements buildings and land Freehold follows: as principally are which lives, economic estimated their of period the over instalments annual equal in values residual to depreciated are assets tangible Other depreciated. not is land Freehold concerned. assets the of lives economic estimated the and value, residual estimated the less items, the of acquisition the to attributable directly is that expenditure including cost, deemed or historical on based is Depreciation depreciation and equipment and plant Property, relate. costs the which to contract construction the of life the over recognised and deferred is credited not amount The vehicle. purpose special the in ashare retains Group the that extent the to except statement, were not previously capitalised are credited to the income that recovery this within costs pre-contract and vehicle purpose special the from recovered are costs contracts, (‘PPP’) Partnership Private Public or PFI on achieved is close financial When receivables. other as sheet balance the in forward carried are close financial of date the to date that from incurred costs status, bidder preferred secured has Group the when usually awarded, be will acontract that probable is it When costs). (pre-contract incurred as off written are contracts for bidding with associated Costs costs Pre-contract comprehensive income. other in immediately recognised are losses, and gains actuarial including liability, pension defined net the of Re-measurements arise. they which in period the in full in recognised are costs financing and employees of lives the over systematically spread are costs service current statement; income the in separately operating and financing costs of such plans are recognised The value. fair at measured are assets plan while value present discounted at measured are Obligations (Revised). IAS19 with accordance in obligations benefit defined for accounts Group The fall due. they as statement income the to charged are payable amounts Group, the by operated schemes pension contribution defined For (a) Retirement obligations benefit Employee benefits lease. each of the life over basis astraight-line on statement income the to charged are charges rental the and leases operating are leases Other asset. that to applicable policy accounting the with accordance in for accounted is asset the recognition, initial to Subsequent payments. lease minimum of the value present the and value fair its of lower the to equal amount an at measured is asset leased the recognition initial On leases. finance as classified are ownership of rewards and risks of the all substantially assumes Group the which of terms in Leases Leases 3–12 years 3–12 lease of Period years 25–50 125 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 126 Kier Group plc Annual Report and Accounts 2015 the asset can be utilised. Deferred tax assets are reduced to the the to reduced are assets tax Deferred utilised. be can asset the which against available be will profits taxable future that probable is it that extent the to only recognised is asset tax A deferred date. sheet balance the at enacted substantively or enacted rates tax using liabilities, and assets the of amount carrying the of settlement or realisation of manner expected the on based is provision tax deferred The purposes. taxation for used amounts the and purposes reporting financial for liabilities and assets of amounts carrying the between differences temporary for providing method, sheet balance the using provided is tax Deferred years. previous of respect in payable tax to adjustment any and date, sheet balance the at enacted substantively or enacted rates tax year, using the for income taxable on payable tax expected the is tax Current recognised in equity. is it case which in equity, in directly recognised items to relates it that extent the to except statement income the in recognised is tax Income tax. deferred and current comprises tax Income Taxation costs. finance to charged is liabilities, long-term on discount the of unwinding the representing payable, interest Notional use. into operational brought are assets relevant the until capitalised are projects PPP and PFI in assets of construction the to relating entities controlled Group’s jointly the within incurred costs Borrowing income statement as incurred. the to off written are costs borrowing other All assets. qualifying constructs Group the where capitalised are costs Borrowing method. rate interest effective the using incurred as statement income the to charged or credited is balances bank on payable and receivable Interest Finance income and costs cost. original the with compared shares these of value market the on statement income the within recognised is loss or gain No earnings. retained from deducted are schemes share Group’s the with connection in trust in held and purchased Shares granted. are options the date the at shares the of value fair the on based is scheme the of cost The met. are criteria particular if years three after vest will which shares of number a employees senior to awards scheme The period. performance relevant the over basis astraight-line on spread is scheme LTIP the under employees to awards of Group the to cost The model. astochastic on based is LTIP which the of element return shareholder total the from apart model Black-Scholes the using calculated is award of date the at schemes these of value fair The (‘LTIP’) Plan schemes. Term Incentive Long and Sharesave the affects This grant. of date the at shares the of value fair the at valued are vested not but granted payments Share-based (b) payments Share-based plan. to the contributions future in reductions or plan the from refunds future available any of value present the to limited is asset recognised the Group, the to asurplus in result calculations the Where statement. income the in costs finance in included is cost This assets. plan of value fair the and obligation benefit defined the of balance net to the rate discount the applying by calculated is cost finance net The 1 Significant accounting policies continued For year 30 the June 2015 ended statements Notes financial consolidated to the be realised. be will benefit tax related the that probable longer no is it that extent remaining adjustment is taken to the income statement. income the to taken is adjustment remaining the when depreciated fully is asset the until asset tangible of the cost the in change acorresponding with provision restoration the in achange as recognised is change the of value present the rate, subsequent change to the estimated restoration costs or discount a is there Where asset. the of life the over basis coal extraction a on depreciated and provision initial the to equivalent amount an for created is asset Atangible costs. finance within included is discount the of unwinding the and incurred as provision the against charged are Costs costs. anticipated the of value present the represents provided amount The arises. liability restoration the as soon as aprovision as recognised is restoration of cost The basis. extraction a coal on site the of life’ ‘coaling the over depreciated is value residual the less cost the and capitalised is site opencast an operating Opencast expenditure incurred prior to the commencement of Mining assets statement. income the in reflected are differences translation other All income. comprehensive other in recognised are rates year-end the at undertakings subsidiary overseas in investments net of retranslation the from arising exchange on Differences period. accounting the during prevailing rates average at translated are losses or profits Trading date. sheet balance the at ruling exchange of rate the at translated are undertakings subsidiary overseas of liabilities and assets The statement. income the in differences arising from foreign currency transactions are reflected Exchange date. sheet balance the at ruling rates the exchange at translated are liabilities and assets denominated currency foreign Resulting place. take they when effect in rates exchange the at recorded are currencies foreign in denominated Transactions Foreign currencies attributable to the development. Where development property is is property development Where development. the to attributable income other or rental of net charges finance and expenses fees, attributable directly including date, to development and acquisition of cost includes cost developed, being is aproperty Where disposals. part or payments progress as receivable or received amounts any less development the of disposing and completing in foreseen losses any less cost at included is progress, in work and land development all represents which inventory, Property contracts. unconditional of exchange after generally recognised; is aliability time the at recognised is inventory Land sheet. balance the in payables other and trade within included is difference the recognised, income the exceed customers from received payments If billings. progress less date to recognised losses less profit plus cost at measured is It sheet. balance the in inventories within included is progress in work Construction distribution. and selling marketing, in be incurred to costs and completion of costs estimated all less price selling estimated the represents value realisable Net costs. and income finance for policy accounting the in explained as interest notional includes also circumstances certain in Cost condition. and location present their to progress in work and inventories the bringing in incurred been have which overheads production and labour appropriate, where and, materials direct comprises Cost value. realisable net and cost of lower the at valued are development, of course the in and for held land including Inventories, Inventories continued investment in joint ventures. investment within cost amortised its at included and asset afinancial as classified is asset the in Group’s interest the services, associated the of purchaser the with largely remain ownership of rewards and risks the where project, similar or aPFI of terms the Under (d) assets PFI arise. they which in period the in settled not are they that extent the to instrument the of value carrying the to added are and method interest effective the using statement income the in basis accruals an on for accounted are costs, issue direct and redemption or settlement on payable premiums including charges, Finance costs. issue direct of net received, proceeds the of value fair the at recorded are borrowings other and bank Interest-bearing borrowings (c) other and Bank sheet. balance the in liabilities current in liabilities financial within included are overdrafts Bank exists. off set of right legal where overdrafts bank of net less, or months three of maturities original with deposits bank including hand, in and bank at cash comprise statement flow cash the in equivalents cash and Cash equivalents (b) cash and Cash value. present their at recorded and discounted are purchases, land of respect in particularly terms, extended on payables Trade value. nominal their at stated are and bearing interest not are terms normal on payables Trade estimated irrecoverable amounts. for allowances appropriate by reduced value initial fair their at stated are and interest carry not do receivables Trade non-current. in included remainder the with current to date sheet balance the of months 12 within due payables and receivables allocated therefore has Group The cycle. operating acommon identify to practicable not is it Group the of activities varied the Given payables trade (a) and Trade receivables follows: as are Group the of liabilities and assets financial principal The instrument. the of provisions contractual the to aparty becomes Group the when sheet Group’s balance the in recognised are liabilities financial and assets Financial Financial instruments estimated. reliably be can amount the and obligation the settle to required be will outflow an that probable is it where and event, apast of aresult as obligation constructive or legal apresent has Group the when recognised are Provisions Provisions issue costs. incremental attributable directly of net received, proceeds the as recorded is Company the of capital share ordinary The Share capital condition. their present in sale for available are assets the and probable highly is sale the when only met as regarded is condition This use. continuing through than rather transaction asale through recovered be will amount carrying their if sale for held as classified are Assets sell. to costs less value fair and amount carrying their of lower the at measured are sale for held as classified Assets sale for held Assets statement. income the to taken are costs finance and income rental net developed, actively being not balance sheet date. sheet balance the at prices market quoted on based are values Fair statement. income the in recognised are derivatives of value fair in changes applied, not is accounting hedge Where above. described as derivative instruments are significant, hedge accounting is applied these where cases In exposures. currency foreign transactional against hedge to order in contracts forward into enters Group The occurs. transaction forecast the until there remains equity in recognised previously loss or gain cumulative The prospectively. discontinued is accounting hedge the exercised, or terminated sold, is or expires accounting, hedge for criteria the meets longer no instrument hedging the If date. sheet balance the at derivatives the estimated amount that the Group would receive or pay to terminate the is derivatives rate interest of value fair The or loss. profit affect will items hedged the when periods the in statement income the to recycled are equity in accumulated Amounts statement. income the in immediately recognised is portion ineffective Any income. comprehensive other in directly recognised is derivatives these of value fair in change the of part effective the hedges flow cash For isrelationship effective. hedging the whether and instrument ahedging as designated is derivative the whether on depends value fair in change resulting the recognising of method The value. fair their at periods iscontract entered into and subsequently in re-measured future the that date the on value fair at recognised initially are Derivatives instruments (e) financial Derivative downs of land and work in progress may be necessary. be may progress in work and land of downs write unfavourably, change estimates and judgements key the if therefore and uncertainty of adegree include assessments These • • • are: progress in work and land of value realisable net the determining in estimates and judgements key The progress in work and (b) land of Valuation in costs. changes and liabilities defects and maintenance programmes, contract work, of scope the in changes costs, pre-contract of recovery the on made be to judgements and assessments require which contracts long-term of outcome the of made to be require contracts and forecastsconstruction contracts services sales, housing private development, property of respect in recognition profit and revenue for used techniques estimation The (a) Revenue recognition and profit follows: as are year financial next the within liabilities and assets of amounts carrying the to adjustment amaterial causing of risk significant a have that date sheet balance the at uncertainty estimation of sources key other and future the concerning assumptions key The Accounting estimates judgements and received. be will grant the that and it, to attached conditions the with comply will Group the that assurance is reasonable there that point the at recognised is income grant Government (f) Government grants An estimation of selling costs. selling of estimation An and revenues; remaining the of estimation An complete; to costs of estimation An 127 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 128 Kier Group plc Annual Report and Accounts 2015 out in note 19. note in out set are operations discontinued and sale for held assets of Details criteria. classification the meet to sale of timing the assessing in applied is judgement Management Group. the of business of line major aseparate form and abandoned, or sold been have sale, for held be to criteria the meet which businesses of agroup or businesses are operations Discontinued sale. for held as classified be to criteria the meet they marketed actively being are they and year one within sold be will businesses that probable is it When operations discontinued and sale (i) for Held 2015. June 30 ended year the for statement income the to charged was tax after £61.3m of cost non-underlying A total requires judgement. items non-underlying or underlying of part is item whether an Determining Group. the by achieved performance financial underlying the understanding in assist to statement income the of face the on identified separately be should believes the Group which performance financial of items are items Non-underlying items (h) Non-underlying reasonably possible sensitivities. of impact the of assessment an with together 12 note in out set are assumptions The rate. discount and margin operating growth, revenue are CGU each assessing in inputs key Other forecasts. and Group’s budgets the on based are years three next for the forecasts flow Cash value. present net the calculate to order in rate discount asuitable of application the and CGU the from arise to expected flows cash future of amount and timing the of made be to estimate an requires calculation use in value The allocated. been has goodwill the which to CGUs of use in value of the estimation an requires impaired is goodwill whether Determining (g) Goodwill irrecoverable. be to considered balances for recognised are provisions and receivable to each specific information economic available of light the in reviewed regularly is receivables other and trade of recoverability The receivables recognised of value (f) Recoverable date. reporting each at re-evaluated and applied is judgement of liabilities timing and amount the of estimate areliable making in therefore and amount or timing uncertain of liabilities are Provisions (e) Provisions 8. note in included are used assumptions the of Details • • • • • Group: the of control the outside factors on dependent largely are below, given are which assumptions, key The made. been have assumptions key of anumber liabilities, and assets scheme pension benefit defined of valuation the determining In (d) Defined benefit pension scheme valuations goodwill. into subsumed is value the case which in reliably, measured be cannot value fair the unless liabilities contingent and liabilities and assets identifiable the to attributed are values fair abusiness, of acquisition the On on acquisitions assets net identifiable of values fair of (c) Determination 1 Significant accounting policies continued For year 30 the June 2015 ended statements Notes financial consolidated to the Salary and pension increases. pension and Salary Discount rate; and Mortality; rate; Inflation assets; plan on return Expected on a reasonable basis. reasonable on a allocated be can that those as well as asegment to attributable directly items include Executive Chief the to reported that are results segmental The expense. tax income and interest items, non-underlying before operations from loss or profit of basis on the information segmental evaluates Group The 128. to 123 pages on policies accounting significant of summary the in described those as same the are segments operating the of policies accounting The 53. to 38 pages on reviews divisional the 10 6to and on pages review strategic Executive’s Chief the in discussed are segments The services. have core customers different and different offer which units business strategic are segments maker. The decision operating chief the is who board, the with together Executive, Chief the to provided information the on based is information Segmental pension schemes. benefit defined for charge the and overheads unrecovered includes Corporate information. segmental primary its reports and manages Group the which on basis the is which Services, and Construction four divisions: Residential, operates Group The Property, reporting 2 Segmental utilised. be will differences temporary the which against arise will profit taxable future that probable judged is it that extent the to recognised are assets tax deferred and full in for provided generally are liabilities tax Deferred assessment of exposures. management’s on based are provisions such and periods future in payable become may tax additional where positions tax uncertain of respect in liabilities future for provides Group The taxes. income for provision overall the determining in required is judgement and jurisdictions of anumber in tax to subject is Group The Taxation (j) continued Underlying net finance (costs)/income finance net Underlying ventures joint of disposal on Profit Underlying operating profit/(loss) ventures joint of results post-tax of Share Assets/(liabilities) held for sale for held Assets/(liabilities) Amortisation of computer software of computer Amortisation and equipment plant property, of Depreciation Capital expenditure contract rights contract to relating assets intangible of Amortisation items Non-underlying Other non-underlying items non-underlying Other costs finance Non-underlying Underlying profit/(loss) before tax Group operating profit/(loss) operating Group Profit revenue Group ventures joint of share Less ventures joint of share and Group Revenue Continuing operations 2015 Year June to30 continued reporting 2 Segmental 4 3 2 1 Inter-segmental revenue Inter-segmental Other information Net assets sale for held assets excluding assets Net borrowings of net Cash, Total assets excluding cash excluding Total assets sheet Balance from before tax continuing operations Profit/(loss) assets held for sale for held assets excluding assets/(liabilities) operating Net Liabilities excluding borrowings excluding Liabilities

Net operating assets/(liabilities) represent assets excluding cash, borrowings and interest-bearing inter-company loans. inter-company interest-bearing and borrowings cash, excluding assets represent assets/(liabilities) operating Net of rate anotional at divisions the to (charged)/credited was Interest revenue. inter-segmental of exclusion the after stated is Revenue Inter-segmental pricing is determined on an arm’s length basis. arm’s an length on determined is pricing Inter-segmental 1 3 4 2 Property 128.2 126.2 103.5 (66.8) (73.9) (24.7) 20.3 14.8 20.2 20.1 59.4 49.9 29.6 22.7 (2.5) (0.1) 5.8 1.9 2.1 0.1 £m – – – – Residential 4.0%. (243.9) 320.5 260.9 257.2 257.2 (59.6) (11.0) 11.2 11.2 17.0 17.0 (0.1) 0.3 0.2 0.2 £m – – – – – – – – – Construction 1,720.8 1,712.7 (719.0) (194.9) 288.8 524.1 12.2 35.9 86.5 43.9 43.0 93.9 37.7 (0.5) (8.1) (6.0) (0.4) (7.4) 2.2 6.2 1.8 £m – – – 1,246.6 Services 1,247.0 (602.8) 691.3 130.7 (42.9) (16.7) (10.7) 13.1 88.5 31.1 58.0 53.4 45.6 58.7 57.7 (8.0) (2.3) (3.6) (4.6) (0.4) 0.3 5.9 £m – Corporate (186.7) 629.0 442.3 373.3 373.4 (68.9) (25.9) (23.1) (31.8) (54.9) (25.9) 11.3 14.0 (2.5) (5.9) (6.1) (0.1) (0.1) £m – – – – – – – (1,592.8) 3,351.2 2,293.1 3,275.9 (140.8) 158.8 585.4 559.5 700.3 103.7 Group (11.2) (75.3) (28.9) (31.6) (17.8) 85.9 81.0 14.8 19.8 25.9 39.5 (4.8) (3.6) £m 7.9 129 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 130 Kier Group plc Annual Report and Accounts 2015 Non-underlying finance costs finance Non-underlying rights contract to relating assets intangible of Amortisation items Non-underlying Less share of joint ventures joint of share Less Profit/(loss) from before tax continuing operations items non-underlying Other Underlying profit/(loss) before tax Amortisation of computer software of computer Amortisation equipment and plant property, of Depreciation Capital expenditure Underlying net finance (costs)/income finance net Underlying ventures joint of results post-tax of Share profit/(loss) operating Group Profit revenue Group Group and share of joint ventures joint of share and Group Revenue Continuing operations 2014 Year June to30 continued reporting 2 Segmental For year 30 the June 2015 ended statements Notes financial consolidated to the Total assets excluding cash excluding Total assets sheet Balance Liabilities excluding borrowings excluding Liabilities assets held for sale for held assets excluding assets/(liabilities) operating Net 6 5 4 3 2 1 held for sale held for assets excluding assets/(liabilities) Net Inter-segmental revenue Inter-segmental Other information assets/(liabilities) Net sale for held Assets borrowings of net Cash, Underlying operating profit/(loss) ventures joint of disposal on Profit

Restated to reflect the classification of the UK mining operations as discontinued. as operations mining UK the of divisions. classification the reflect to Construction and Restated Residential Property, the into divisions Construction and Property the of reclassification the reflect to Restated 4.0%. of rate anotional at divisions the to (charged)/credited was Interest revenue. inter-segmental of exclusion the after stated is Revenue Inter-segmental pricing is determined on an arm’s length basis. arm’s an length on determined is pricing Inter-segmental loans. inter-company interest-bearing and borrowings cash, excluding assets represent assets/(liabilities) operating Net 1 3 4 2 Property 102.2 119.9 137.2 (65.7) (24.4) (17.3) 54.2 10.4 11.0 64.6 16.0 13.7 77.8 (2.3) (2.3) (0.3) (0.1) (0.1) £m 1.5 1.0 0.5 6.1 9.4 – 5 Residential (238.5) 233.2 299.1 233.2 255.1 (44.0) (11.1) 16.6 16.6 (0.1) (0.1) (3.5) (3.4) £m 7.7 7.7 – – – – – – – – – 5 Construction continued 1,498.3 1,491.8 (638.9) 540.0 273.9 175.0 175.0 (98.9) 10.3 29.1 30.2 28.9 37.1 (8.5) (6.5) (0.4) (7.8) £m 3.2 6.9 1.1 – – – – 5,6 1,104.1 1,104.1 Services (382.0) 432.0 130.0 (29.2) (10.3) (10.4) 53.3 35.2 13.2 48.8 63.2 63.2 53.3 23.1 50.0 (4.5) (5.0) £m – – – – – Corporate (105.7) (142.4) 238.4 (21.6) (22.5) (19.9) (44.1) (19.9) 96.0 (3.6) (2.6) (1.1) (9.7) (9.7) £m 8.8 8.4 – – – – – – – – (1,224.6) 2,906.9 1,646.7 2,937.8 (122.8) 150.2 422.1 299.3 309.7 Group (41.5) (42.2) (30.9) (13.6) (10.8) 48.2 15.4 10.4 79.6 73.7 87.3 (1.1) (5.3) £m 1.6 6.1 6 Fees payable to the Company’s auditor for other services: other for auditor Company’s the to payable Fees Operating lease rentals: lease Operating machinery and plant of Hire equipment and plant property, of sale on Loss/(profit) equipment: and plant property, of Depreciation 1 statements financial consolidated and company parent the of audit the for payable Fees Auditor’s remuneration: Operating profit is stated charging/(crediting): after year the for 3 Profit 4 Non-underlying items 4 Non-underlying was payable to KPMG LLP mainly in respect of the Group’s organisational and efficiency project). efficiency and Group’s organisational the of respect in mainly LLP KPMG to payable was 79 (2014: page on £0.9m provided are year, £0.5m, the during LLP PricewaterhouseCoopers by provided services other of A summary LLP.PricewaterhouseCoopers to paid amounts to relate LLP. remuneration auditor’s 2015 KPMG to The paid amounts to relate remuneration 2014 auditor’s The Research and Development Expenditure Credit receivable Other non-underlying items: non-underlying Other Acquisition discount unwind rights of intangible contract Amortisation Continuing operations Charged against profit for the year the for profit against Charged items from discontinued operations Non-underlying Associated credit tax 19) (see note sell to costs less value fair to business mining UK the of Impairment operations Discontinued Charged against profit for the year from continuing operations Associated credit tax Total items from continuing non-underlying operations Total items other non-underlying

Audit of the Company’s subsidiaries, pursuant to legislation to pursuant subsidiaries, Company’s the of Audit Land and buildings and Land leased Finance Owned services Other Plant and machinery Costs relating to acquisition of the Mouchel Group Mouchel the of acquisition to relating Costs Construction Workers Compensation Scheme costs Gurney May of acquisition the following costs transformation and Restructuring Gurney May of acquisition to relating Costs Services &Passenger Fleet of disposal the to relating Costs scheme pension salary final Group Kier the of cessation with associated Costs Costs in relation to the preparation for and restructuring following the acquisition of the Mouchel Group Mouchel the of acquisition the following restructuring and for preparation the to relation in Costs Exceptional items. Exceptional 1 143.9 (11.2) (21.8) (61.3) (13.5) (22.9) (39.5) (31.6) (46.4) 2015 2015 2015 11.2 16.2 12.7 (6.3) (4.1) (8.4) (3.6) (3.4) £m 1.1 2.1 1.1 0.1 0.5 6.0 6.9 £m – – – (58.3) (48.5) (48.5) (42.2) (29.6) (10.8) 2014 2014 12.9 11.6 55.1 19.4 (4.5) (5.3) (8.1) (4.5) £m £m 0.9 0.1 9.8 4.7 0.7 – – – – – – – – 131 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 132 Kier Group plc Annual Report and Accounts 2015 Interest payable on finance leases finance on payable Interest Interest payable toInterest payable joint ventures benefit obligation defined net on interest Net Discount unwinding Interest payable on borrowings 3 2 overdrafts and loans and overdrafts bank on fees and payable Interest costs Finance joint ventures to loans on receivable Interest deposits bank on receivable Interest income Finance operations –continuing cost and income 5 Finance 1 Scheme. Compensation Workers the Construction of, costs administration the and from, claims both of Group’s share the satisfy to cost likely the 2014 in for provided was £4.5m scheme. pension the of cessation on incurred being charge curtailment non-cash £5.2m afurther with scheme pension salary final Group Kier the closing incurred 31) was (see £1.1m note and sale for business Services &Passenger Fleet the preparing incurred was £3.4m Gurney. May of acquisition the following costs transformation and restructuring on incurred was 2014 In £29.6m business. enlarged the into Mouchel of integration and numbers staff in reduction to related primarily costs transformation and restructuring on £8.4m incurred business the acquisition Mouchel the following and for preparation In Gurney. May of acquisition the on 2014 in £8.1m and Group Mouchel the of acquisition the on £13.5m incurred Group the year the During items 4 Non-underlying For year 30 the June 2015 ended statements Notes financial consolidated to the Net finance costs

Restated to exclude discontinued operations (see note 19). (see note operations discontinued exclude to Restated acquisition. on made adjustments value fair and consideration deferred of respect in discount of Unwind Exceptional items. Exceptional 1 continued Underlying (19.5) (13.7) (17.8) (2.2) (1.0) (2.6) 1.0 1.7 £m 0.7 – – underlying Non- (3.6) (3.6) (3.6) £m – – – – – – – – 2 continued (23.1) (21.4) (13.7) 2015 Total (2.2) (1.0) (2.6) (3.6) £m 1.0 1.7 0.7 – Underlying (15.8) (13.6) (1.8) (3.6) (0.1) (2.7) (7.6) 2.2 1.6 0.6 £m – 3

underlying Non- (5.3) (5.3) (5.3) £m – – – – – – – – 2

(18.9) (21.1) 2014 Total (5.3) (1.8) (3.6) (0.1) (2.7) (7.6) 2.2 1.6 0.6 £m 3 Share-based payment plansShare-based £5.2m) of charge curtailment (2015 includes scheme pension contribution defined the to Contributions Defined benefit pension scheme costs Social security costs Wages and salaries and Wages Comprising: Rest of world of Rest Rest of world of Rest United Kingdom was: directors executive including year the during employed people of number average Monthly employees to relating 6 Information remuneration report on pages 84 to 106. to 84 pages on report remuneration directors’ the in appears LTIP interests and options share entitlements, pension emoluments, directors’ to relating Information directors to relating 7 Information United Kingdom follows: as are costs staff Group the 2015/16 financial year of £1.6m have been agreed with the trustees. trustees. the with agreed been have £1.6m of year 2015/16the for financial contributions Deficit salaries. pensionable in increases future for allowing after date, that at members to accrued had that benefits the of 83% approximately represented which £62.0m was date that at scheme’s assets the of value market The method. unit projected the 2014 using 31 at as March actuaries independent trustees’ the by undertaken was scheme Gurney May the of valuation actuarial An 19). (see note sale for held assets/liabilities into and liability pension the of out transferred been have scheme benefit defined TransLinc the of liabilities and assets the Therefore year. financial the of end the after shortly sold was which Limited, FPS Kier with associated is scheme benefit defined TransLinc The investment managers. professional independent to decisions day-to-day delegate and assets, the holding and for decisions responsible are The trustees Group. the of assets the from separate trust in held are scheme the of (2014: assets £0.3m to £0.3m). The amounted 2015 30 June to period the in payable plans both to contributions deficit the of sum the and accrual future to closed have schemes defined benefit these of year. Both 2014 financial the in Gurney May with acquired were schemes benefit defined TransLinc and Gurney May The group Gurney May the with Acquired defined benefitOther schemes contributions. above the to addition in payable is levy Fund Protection Pension The 2016. June to year the in deficit service past the funding for £16.5m of contributions make to The Group expects date. valuation 2013 the at identified deficit service past the funding for allowance an include will contributions forward, Going deficit. service the past (2014: £15.1m of fund to £8.0m) £24.7m were contributions year the (2014: included £16.4m) during which paid contributions The 2015. 28February on accrual future to closed was scheme the until service for benefits accrue to continued members existing 2002; 1January on entrants new to closed was scheme the of section benefit defined The decisions to independent professional investment managers. day-to-day delegate and assets the investing for responsible are trustees The Group. the of assets the from separate trust in held are scheme the of assets The section. contribution adefined and section benefit adefined includes and scheme principal the is This Scheme Pension Group Kier below. described as employees eligible for schemes pension of anumber operates Group The 8 Retirement benefit obligations

Note 25

16,110 17,931 681.5 1,821 742.2 742.2 657.5 2015 2015 14.2 29.2 60.7 37.9 3.4 £m No. 15,335 14,318 522.2 613.4 613.4 576.4 1,017 2014 45.9 14.0 27.3 37.0 No. 4.0 £m 133 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 134 Kier Group plc Annual Report and Accounts 2015 Inflation rate (CPI) rate Inflation Net pension liability pension Net asset tax deferred Related Deficit Inflation rate (RPI) rate Inflation Present value of liabilities of value Present assets of value Total market collateral and swaps cash, bonds, Government Discount rate PFI assets PFI assets return-seeking other and property Equities, Land salaries pensionable in increases general of Rate Rate of increase to pensions in payment liable for Limited Price Indexation Price Limited for liable payment in pensions to increase of Rate May Gurney defined benefit schemes Scheme Pension Group Kier were: actuaries qualified independent the by used assumptions principal The IAS19. under permitted as income comprehensive of statement the through losses or gains actuarial any recognises Group The IAS19 ‘Employee Benefits’ disclosures arrangements. (2014: £26.7m) these to year the during £29.2m of contributions paid Group The arrangements. contribution defined other of anumber to made also are Contributions schemes defined contribution Other 2016. in again valued be to need will and 2013 31 at as March actuaries independent trustees the by valued formally were schemes Mouchel The retirees. 1,305 and members 3,042 deferred members, 78 active have currently schemes the total, In year. of £7.8m coming the in contributions deficit requiring place, in plan recovery adeficit is 2010. in There accrual future to closed was remainder the but accrual, future to open still are schemes the of parts comparable’ sector ‘public The 2001. in entrants new to closed were schemes These managers. investment professional independent to decisions day-to-day delegate and assets, the holding and decisions for responsible are trustees The Group. the of assets the from separate trust in held are scheme the of assets The £68.6m. was schemes of the liability aggregate the acquisition, At Group. Mouchel the with schemes pension benefit defined of anumber acquired has Group The Group Mouchel the with Acquired continued obligations benefit 8 Retirement For year 30 the June 2015 ended statements Notes financial consolidated to the Discount rate Indexation Price Limited for liable payment in pensions to increase of Rate expected to increase to 28.9 years for future male and 31.0 years for future female pensioners who retire in 2035. in retire who pensioners female future for 31.0 and years male future for years 28.9 to increase to expected is but awoman 29.7 27.8 for and aman years for currently is years 60 age from expectancy life that are assumptions mortality The (‘CPI’)) Index Price (Consumer rate Inflation (‘RPI’)) Index Price (Retail rate Inflation continued (994.6) 238.4 672.5 919.4 (75.2) (60.2) 2015 2015 15.0 n/a 8.5 2.3 3.3 3.9 3.4 £m % – (900.2) 644.9 37.1 8 171.6 (50.5) (63.1) 2014 2014 2014 2015 13.3 12.6 3.2 3.3 3.4 2.4 4.4 2.3 3.3 3.9 3.4 7.3 £m % % (832.4) (832.4) 608.1 608.1 155.6 155.6 783.7 (48.7) (48.7) Value 2013 2013 (37.5) (37.5) 2014 11.2 11.2 12.9 3.2 3.2 3.3 3.5 2.5 3.4 2.4 4.4 4.4 4.7 7.1 7.1 £m % % expected to increase to 29.1 years for future male and 31.7 years for future female pensioners who retire in 2035. in retire who pensioners female future 31.7 for and male years future for 29.1 to years increase to expected is but awoman for years 29.8 27.3 and aman for currently is years 60 age from expectancy life that are assumptions mortality The (‘CPI’) rate Inflation (‘RPI’) rate Inflation Discount rate salaries pensionable in increases general of Rate Net pension liability pension Net asset tax deferred Related Deficit liabilities of value Present assets of value Total market collateral and swaps cash, bonds, Government assets return-seeking other and property Equities, Land Surplus cash and bonds Government assets return-seeking other and property Equities, 2035. in retire who pensioners female future for years 30.5 and male future for 28.1 years to increase to expected is but awoman for years 28.8 and aman for years 26.5 currently is 60 age from expectancy life that are assumptions mortality The Mouchel defined benefit schemes (deficit)/assetNet pension Related deferred tax liability tax deferred Related liabilities of value Present assets of value Total market (69.9) 2015 66.4 29.3 37.1 (2.8) (3.5) £m 0.7 (431.2) 356.3 277.6 Value (59.9) (71.3) (74.9) 2015 Value 2014 2.3% 2015 3.9% 3.4% 38.0 16.1 15.0 62.6 36.6 74.6 (0.7) 3.3 n/a 2.6 £m £m % 135 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 136 Kier Group plc Annual Report and Accounts 2015 Current service cost service Current income statement the in profit tooperating (Charged)/credited Administration expenses Amounts recognised in the financial statements in respect of these defined benefit schemes are as follows: as are schemes benefit defined these of respect in statements financial the in recognised Amounts continued obligations benefit 8 Retirement For year 30 the June 2015 ended statements Notes financial consolidated to the Past service cost (including curtailments) (including cost service Past Acquired in the year the in Acquired 1July at value Fair assets scheme of value fair the in Changes full in recognised Total amount Settlement credit Interest income on scheme assets Actuarial gains/(losses) due to liability experience liability gains/(losses) to due Actuarial demographic assumptions in changes to due losses Actuarial financial assumptions in changes to due losses Actuarial net interest in recognised that of excess in return Actual in income other comprehensive Re-measurement loss and profit in (expense)/credit recognised Pension Net interest on net defined benefit obligation benefit defined net on interest Net Contributions by the employer the by Contributions gainsRe-measurement on scheme assets Contributions by scheme participants scheme by Contributions Fair value at 30 June 30 at value Fair Administration expenses out paid benefits Net Current service cost service Current year the in Acquired 1July at value Fair defined benefit obligation the of value present the in Changes Past service cost Past service liabilities scheme on expense Interest Transfer to assets held for resale for held assets to Transfer Contributions by scheme participants scheme by Contributions Settlement Net pension (liability)/asset pension Net asset/(liability) tax deferred Related Net (deficit)/surplus assets scheme of value Fair sheet balance the in included Amounts Transfer to assets held for resale for held assets to Transfer out paid benefits Net Actuarial (losses)/gains due to liability experience (losses)/gains liability to due Actuarial demographic assumptions in changes to due losses Actuarial financial assumptions in changes to due losses Actuarial Net present value of the defined benefit obligation benefit defined the of value present Net Fair value at 30 June 30 at value Fair Kier Group Scheme Pension (900.2) (994.6) (994.6) 919.4 919.4 837.1 (38.8) (38.8) (75.2) (13.8) (60.2) (23.0) (87.8) (87.8) 38.8 36.6 15.0 60.4 60.4 24.7 (5.2) (5.2) (5.8) (2.2) (5.2) (5.8) (0.6) (0.6) 4.4 4.4 £m – – – – – – – – – – Gurney (71.3) (10.8) (10.8) (69.9) (69.9) (14.0) 11.4 66.4 66.4 74.6 (2.8) (3.5) (0.2) (0.2) (3.1) (0.1) May (3.4) (4.4) 3.2 5.9 0.1 5.9 0.5 0.3 0.5 3.4 £m 0.7 – – – – – – – – – – – – Mouchel (431.2) (431.2) (424.4) 355.8 356.3 356.3 (59.9) (74.9) 15.0 (0.1) (0.1) (0.1) (1.0) (0.3) (0.1) (0.1) (6.6) (6.6) (6.6) (0.9) 0.8 0.9 £m 0.7 continued – – – – – – – – – – – – – – – – (1,495.7) (1,495.7) 1,342.1 1,342.1 (105.2) (122.9) (105.2) (971.5) (153.6) (424.4) 355.8 911.7 2015 (14.2) (43.1) (34.0) (42.9) (14.0) 11.4 43.1 66.3 66.3 40.6 Total 25.7 30.7 (5.2) (5.2) (2.2) (5.2) (5.9) (5.9) (0.9) (0.9) 4.9 4.9 £m – – – – – – Kier Group Kier Scheme Pension (900.2) (900.2) (832.4) 783.7 37.1 8 37.1 8 (38.3) (50.5) (63.1) (35.0) (44.4) (44.4) (12.1) (18.7) 36.4 36.4 36.4 12.6 35.0 16.4 (0.9) (9.3) (3.0) (1.9) (0.9) (9.3) (3.0) (0.1) (7.7) (7.7) 0.1 £m – – – – – – – – Gurney (71.3) (71.3) (67.4) 71.1 74.6 74.6 (0.9) (2.6) (3.4) (3.1) (3.4) (0.7) May 3.3 3.3 2.5 2.5 0.3 2.6 2.6 0.1 0.1 £m – – – – – – – – – – – – – – – – – – Sheffield (183.9) (193.1) 182.9 193.1 11.7 11.7 (2.5) (6.5) (2.5) (0.8) (8.4) (0.9) (8.4) (0.9) (4.3) (2.0) (7.5) (7.5) Kier LLP 6.5 4.3 1.4 0.8 1.4 0.9 2.1 5.1 5.1 £m – – – – – – – – – – – – (1,016.3) (193.1) (971.5) (971.5) 966.6 193.1 911.7 911.7 (55.3) (55.3) (11.8) (11.8) (59.8) (18.7) (41.9) (14.0) (16.1) (16.1) 2014 (67.4) (47.9) (47.9) 46.2 18.8 44.0 44.0 11.9 41.9 71.1 Total (1.8) (0.9) (0.9) (0.9) (0.9) (0.9) 1.4 1.4 0.9 8.7 8.7 £m These amounts have been included as contributions received by the scheme. the by received contributions as included been have amounts These • • (2014: nil): period the in Scheme Pension Group Kier the to contributions special following the made has Group The Experience gains/(losses) on scheme liabilities gains/(losses) scheme on Experience assets scheme on return actual and expected between Difference liability pension Net asset tax deferred Related analyses did not change compared with the previous period. previous the with compared change not did analyses sensitivity the preparing in used assumptions of types and methods The applied. been has sheet balance the in recognised the liability calculate to used method same the assumption, the to sensitivity the calculating When constant. assumptions other all holding while assumption akey in achange on based is which change, actual the of representative be not may and period reporting the of end at the occuring assumptions respective the of changes possible reasonably on based determined been have above analyses sensitivity The (+/– 1year) expectancy life in Increase -0.25%) (+0.25%, rate Inflation Discount rate (+0.25%, -0.25%) schemes: pension Group Mouchel Inflation rate (+0.25%, -0.25%) (+0.25%, rate Inflation Discount rate (+0.25%, -0.25%) Kier Scheme: Pension Group obligations. benefits retirement the determine to used assumptions actuarial significant the in achange from arising surplus/(deficit) in change the shows tables following The Pension sensitivity Net deficit obligation benefit defined the of value present Net assets scheme of value Fair History of experience gains and losses for defined benefit schemes in aggregate: in schemes benefit defined for losses and gains experience of History Increase in life expectancy (+/– 1year) expectancy life in Increase . cash in settled was which 2014, £1.5m September In and cash; in settled was which 2014, £1.8m July In +0.25%/+1 year +0.25%/+1 (33.2) (31.0) 45.7 £m (1,495.7) 1,342.1 (122.9) (153.6) -0.25%/-1 year -0.25%/-1 2015 66.3 30.7 4.9 £m (45.7) 2015 33.2 31.0 £m (971.5) 911.7 (59.8) 2014 (47.9) 44.0 11.9 8.7 £m +0.25%/+1 year +0.25%/+1 year +0.25%/+1 (1,016.3) 966.6 (38.3) (49.7) 11.4 45.7 2013 2013 0.7 £m (20.3) (28.7) (10.8) (17.0) 41.1 19.4 £m £m (940.9) 883.1 (43.9) (42.9) 2012 (57.8) 13.9 (6.1) £m -0.25%/-1 year -0.25%/-1 -0.25%/-1 year (869.3) 839.7 (34.4) (21.9) (29.6) (41.4) 2011 (19.4) 2014 2015 20.3 28.7 10.8 47.0 17.0 £m £m 7.7 £m 137 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 138 Kier Group plc Annual Report and Accounts 2015 Profit before tax before Profit rate tax effective of Reconciliation temporary differences of reversal and Origination expense tax Deferred income statement charge/(credit) the in Total tax tax Total deferred Adjusted profit before tax before profit Adjusted included above ventures joint on tax Add: tax deferred on effect change Rate years prior of respect in Adjustments tax Total current Adjustments for prior years 20.75% (2014: 22.5%) of rate tax corporation UK at tax Income tax UK corporation expense tax Current (a) Recognised in the income statement 9 Taxation For year 30 the June 2015 ended statements Notes financial consolidated to the The tax charge before non-underlying items and amortisation of contract rights of £16.9m (2014 £16.9m of rights contract of amortisation and items non-underlying before charge tax The rules. Scheme Tax of Avoidance Disclosure the under been notified have should or were which schemes avoidance tax any into entered not has Kier 2012 1July since and policy tax an aggressive have not does Group The tax. corporation UK to subject are and UK the in predominantly based are subsidiaries its and Group Kier 2 1 equates to an effective tax rate of 20% (2014 20% of rate tax effective an to equates in the previous year’s financial statements and the actual tax liabilities calculated in the tax returns submitted to and agreed by HMRC. HMRC. by agreed and to submitted returns tax the in calculated liabilities tax actual the and statements year’s financial previous in the included taxation of estimates the between differences from arises results years’ prior of respect in £0.4m of adjustment credit net The LTIP. and Scheme You As Earn Save Group’s employee the under exercised of shares cost the of respect in received deduction tax the of impact the includes statement income the in recognised not expenses on Tax relief tax. to subject not year, are the during of disposed ventures joint the of some including investments, certain of disposal on arising gains capital legislation, tax UK with accordance In provisions. on differences permanent and Mouchel on costs acquisition to relate mainly expenses The non-deductible above. table the in 20.75% of shown items of tax (2014: anumber to 22.5%) due corporation of rate standard the than is lower Non-deductible expenses Non-deductible Group tax charge/(credit) tax Group ventures Tax joint on ventures) joint (including Total tax years prior of respect in Adjustments jurisdictions foreign in rates tax of Effect the income statement in recognised not expenses on Tax relief taxed not gains Capital rate tax corporation UK in change of Effect

Restated to reclassify the Group’s UK mining operations as discontinued. as operations mining UK Group’s the reclassify to Restated 4). (see note items non-underlying before Stated 2 : 18%) on adjusted profit before tax of £86.2m (2014 £86.2m of tax before profit adjusted on : 18%) Underlying items (10.4) 86.2 15.1 12.6 85.9 16.9 16.9 10.0 17.2 17.9 (0.3) (0.3) (0.4) (0.4) (0.4) £m 1.8 5.1 0.1 0.3 0.3 – 1

Non-underlying (note 4) (note items (46.4) (46.4) (2.9) (2.9) (6.9) (6.9) (6.9) (9.6) (4.0) (4.0) £m 2.7 – – – – – – – – – – continued 2015 (10.4) 12.2 39.8 39.5 10.3 10.0 10.0 10.0 Total (2.2) (0.3) (0.3) (0.4) (0.4) (0.4) £m 2.2 2.8 8.3 8.6 0.3 0.3 – Underlying 2 : £13.5m) shown in the table above above table the in shown : £13.5m) items 2 13.5 13.5 13.6 73.8 16.6 10.6 73.7 : £73.8m). This effective rate rate : £73.8m). effective This (5.5) (0.2) (5.4) (0.1) (1.4) £m 5.8 2.5 0.2 0.8 6.9 1.4 0.6 0.1 7.7 1

Non-underlying (note 4) (note (58.3) (58.3) items (13.1) (8.2) (8.2) (9.8) (9.8) (9.8) (1.6) (1.6) £m 3.3 – – – – – – – – – –

2014 15.5 15.4 Total (5.5) (0.5) (0.2) (1.3) (5.4) (0.1) (1.4) 4.2 3.8 5.8 3.5 0.2 0.8 1.4 0.6 0.1 9.0 3.7 3.7 £m 2 Total tax charge in the statement of comprehensive income comprehensive of statement the in charge Total tax Provisions 2015. A scrip dividend alternative will be offered. be will alternative dividend 2015. Ascrip 25 September on business of close the at register the on shareholders to 2015 27 on November paid be will £34.1m circa totalling The dividend statements. financial these in aliability as included been not has so and date sheet balance the at approved been not had Final dividend for the year ended 30 June 2014 39.6 of pence June 30 ended year the for dividend Final year: the in parent the of owners to distributions as recognised Amounts 10 Dividends indefinitely. forward carried be may losses these legislation, tax present Under offset. be could losses these which against streams profit future of unpredictability the to due losses remaining the of respect in recognised been has asset tax deferred No (2014: £14.7m) losses. £43.2m of tax respect income in of recognised been has asset tax A deferred profits. future £177.3m against of losses offset tax for (2014: unused has available £14.8m) Group the date sheet balance the At (e) Tax losses 20%. at recognised been has end year the at as balance tax deferred The statement of comprehensive income. the to directly £5.7m and charged being statement income the to credited being £4.6m with £1.1m additional an by asset tax deferred the reduce to be would date, sheet balance the at balance tax deferred the to applied had they if changes, these of effect overall The statements. financial these in included not are effects their date sheet balance the at enacted substantively been not had changes the As 2020. 1April 2017 from 18% to 1April and from 19% to rate the reduce to rate main the to reductions include 2015. These 8July on Budget Chancellor’s the in announced were rates tax corporation UK the to Changes charges tax future affect may (d) that Factors 1 schemes pension benefit defined on losses Actuarial instruments hedging flow cash on movements value Fair instruments hedging flow cash venture joint on movements value fair of Share rate) tax in change of effect (including expense tax Deferred (c) Recognised in the statement of comprehensive income (2014: repayment). year £11.3m the during £3.5m of payments shows statement flow cash The (b) Recognised in the flow cash statement Interim dividend for the year ended 30 June 2015 of 19.2 pence of 2015 June 30 ended year the for dividend Interim The proposed final dividend of 36.0 pence (2014: 39.6 pence 36.0 of pence dividend final proposed The

As restated for the bonus element of the rights issue associated with the Mouchel transaction (see note 24). (see note transaction Mouchel the with associated issue rights the of element bonus the for restated As 1 ) bringing the total dividend for the year to 55.2 pence 55.2 to year the for dividend total the ) bringing 1 (2013: 37.2 pence 1 (2014: pence 18.0 1 ) 1 ) 2015 2015 2015 13.2 40.2 1 27.0 (6.8) (6.6) (2014: 57.6 pence 0.2 £m £m – – 2014 2014 12.3 25.0 10.1 37.3 (0.3) 1.9 4.9 3.6 £m £m 1 ) 139 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 140 Kier Group plc Annual Report and Accounts 2015 Other non-underlying items items non-underlying Other parent the of holders equity to attributable profits net being interests), minority and tax (after Earnings operations Discontinued Earnings from discontinued operations 3 2 1 operations continuing from Earnings items non-underlying Other Acquisition discount unwind ofAmortisation intangible assets items net of tax: of non-underlying Impact parent the of holders equity to attributable profits net being interests), minority and tax (after Earnings Continuing operations share per Earnings share per earnings for used shares of number average Weighted Acquisition discount unwind (2014: £2.2m) £2.3m of credit tax of –net assets intangible of Amortisation items net of tax: of non-underlying Impact parent the of holders equity to attributable profits net being interests), minority and tax (after Earnings Continuing operations Earnings items. non-underlying of impact the illustrate to made are adjustments The below. out set is share per earnings and profit underlying to statement, income the in reported as share, per earnings and profit of A reconciliation share per 11 Earnings For year 30 the June 2015 ended statements Notes financial consolidated to the Other non-underlying items – net of tax credit of £3.9m (2014: £6.4m) £3.9m of credit tax of –net items non-underlying Other Earnings from continuing operations continuing from Earnings equity holders of the parent the of equity holders to attributable loss net being interests), minority and tax (after Earnings operations Discontinued Other non-underlying items – net of tax credit of £1.1m (2014: £1.1m of nil) credit tax of –net items non-underlying Other Earnings from discontinued operations

at 858 pence per share, at a bonus of 25.1%. EPS has been restated to reflect the bonus element embedded in the rights issue. rights the in embedded element bonus the to reflect restated been has EPS 25.1%. of abonus at share, per pence 858 at shares new 39,646,692 issuing issue, 7rights a5for from £340.2m, raised business the acquisition, Mouchel the fund to 2015, 2June On acquisition. on made adjustments value fair and consideration deferred of respect in discount of Unwind 19). (see note discontinued as operations mining UK show to Represented 2 – net of tax credit of £0.7m of credit (2014: tax of £1.2m) –net continued million pence (33.9) (24.0) Basic 21.8 40.2 12.6 30.8 39.2 28.4 96.0 70.7 67.9 27.7 (2.2) (3.1) £m 2.9 8.9 4.0 Diluted Diluted million pence (33.9) (24.0) 2015 12.5 21.8 30.8 28.4 95.6 40.0 71.0 39.0 67.9 27.7 (2.2) (3.1) 2.9 8.9 4.1 £m million pence Basic Basic 68.0 35.8 12.6 16.2 11.0 59.5 52.6 87.5 (1.5) (1.5) (1.0) (1.0) 8.6 6.1 4.1 £m – – 3 3 Diluted Diluted million pence 2014 68.5 35.8 86.9 52.3 12.6 11.0 59.5 16.1 (1.5) (1.5) (1.0) (1.0) 8.6 5.9 4.1 £m – – 3 3 1 Acquired Additions Charge for the year 2013 June 30 At Amortisation 2015 June 30 At contract rights are amortised on a straight-line basis over the remaining contract life. contract remaining the over basis astraight-line on amortised are rights contract other All duration. contract total expected the over basis astraight-line on amortised are Mouchel and Gurney May on rights Contract • • • • • to: relates primarily rights contract of cost The CGU. each of profits projected the upon based review impairment annual an to subject been have balances (£0.8m). These Southdale and (£2.6m) Limited Beco (£4.8m), Limited Recycling (£5.2m), Pure Limited Homes (£194.7m), PLC Partnership Kier Services Integrated Gurney May (£301.3m), Limited MRBL of acquisition the to relates Goodwill 1 Additions 2014 June 30 At Disposals 2013 June 30 At Cost 12 assets Intangible Charge for the year 2014 June 30 At Disposals Disposals Acquired At 30 June 2014 June 30 At 2015 June 30 At Disposals At 30 June 2015 June 30 At value book Net

£19.6m The acquisition of MRBL Limited (Mouchel Group) (£141.0m). Group) (Mouchel Limited MRBL of acquisition The (£106.7m); plc and Services Integrated Gurney May of acquisition The (£3.6m); Council District Wealdon from business collections refuse acommercial of acquisition The (£1.0m); Milne Stewart and (£2.0m) Limited Recycling Pure of acquisition The (2014: £0.2m £0.1m); Council Tyneside (2014: £0.2m) North and £0.3m Council City (2014: £0.6m (2014: £0.6m), Council £nil Stoke-on-Trent £0.2m), Harlow Council City Sheffield are: 2015 June 30 to year the for amounts The interests. minority as statement income the in reflected are shares profit These profits. in the share aminority for rights the and interest ownership aparticipatory retained have that councils respective the with in partnership are (£7.2m). Council contracts Tyneside These North and (£1.9m) Council City (£0.8m), Stoke-on-Trent Council Harlow (£21.3m), Council City Sheffield of operations services business and construction the of assets and businesses the of acquisition The

is under construction and not being depreciated. being not and construction under is Goodwill 208.6 208.6 302.1 194.7 509.5 509.5 13.4 (1.2) (0.7) 1.2 £m – – – – – – – – contract rights rights contract Intangible Intangible 144.5 108.5 106.7 141.0 239.7 287.1 (36.0) (11.2) (25.6) (10.8) (47.4) 38.9 (0.2) (1.6) 0.5 0.9 0.4 0.7 £m Computer software 21.7 34.6 27.5 (2.3) (0.3) (1.2) (4.8) (1.1) (7.1) 4.2 4.5 4.5 9.0 6.7 £m

– – – – 1 323.8 831.2 362.1 301.4 776.7 447.3 (54.5) (38.3) (11.9) (26.8) (16.0) 56.8 22.6 Total (2.3) (0.2) (0.8) 6.2 0.4 £m

141 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 142 Kier Group plc Annual Report and Accounts 2015 Services Construction • • • £nil: to down headroom bring to change assumption single any for follows as change to have would assumptions The intangibles. and goodwill of value carrying the of impairment an to rise give would assumption single any in change possible reasonable any that consider not do management although margin, operating the and rate growth revenue rate, discount assumptions: key the in changes to sensitive is review impairment CGU Services The assets. segmental of value carrying the £474m is that above segment Services the for amount arecoverable derived assumptions these calculation, use in value the on Based 9.1%). (2014: 10.0% is used rate discount pre-tax The rate. growth GDP UK of forecasts current and trading current with line in are assumptions These perpetuity. into flows cash segment Services the to applied been 5% have of margin operating afixed and 2% of rate growth A revenue segment Services Property by CGU rights contract intangible and goodwill of amounts Carrying 12 assets Intangible continued For year 30 the June 2015 ended statements Notes financial consolidated to the not lead to an impairment being recognised. being impairment an to lead not would assumptions key the in change possible reasonably any that considers management and CGUs all in exists headroom Significant applied. assumption rate growth aterminal have forecast those beyond periods for flows Cash flows. cash future to applied rates discount the and period forecast the during margins gross and revenues forecast the are calculations use in value the in assumptions key The tested. being assets the with associated risk the reflect to necessary as adjusted capital, of cost average Group’s weighted the on based calculations use in value the in used rate discount the with value, present to discounted are flows cash resulting The period. athree-year covering management, by approved forecasts, Group’s the on based projections flow cash use calculations The calculations. use in value on based determined been has intangibles and goodwill the of amount recoverable The CGUs. four above the to allocated been has goodwill the purposes testing impairment For Residential Underlying operating margin – reduce from 5% 2.4%. to from –reduce margin operating Underlying 5.5%; and negative to 2% positive from –reduce rate Growth 10.0% 14.6%; to from –increase rate Discount Goodwill 496.5 509.5 6.9 0.1 6.0 £m Intangible contract contract 235.3 239.7 rights 3.8 0.6 £m – continued 731.8 749.2 2015 Total 10.7 6.0 £m 0.7 Goodwill 208.6 195.3 1.3 6.9 5.1 £m Intangible Intangible contract contract 108.5 103.6 rights 4.3 0.6 £m – 298.9 317.1 2014 11.2 Total 1.9 5.1 £m Acquired 2013 June 30 At Cost equipment and plant Property, 13 At 30 June 2014 June 30 At Currency realignment Disposals Additions Currency realignment Additions Acquired Transfer to assets held for resale for held assets to Transfer Disposals At 30 June 2015 June 30 At At 30 June 2013 June 30 At Accumulated depreciation Currency realignment Disposals Currency realignment Impairment Disposals operations –continuing year the for Charge Acquired Transfer to assets held for resale for held assets to Transfer Charge for the year – continuing operations –continuing year the for Charge 2014 June 30 At At 30 June 2015 June 30 At At 30 June 2015 June 30 At value book Net At 30 June 2014 June 30 At leases (see note 21). (see note leases finance under held assets of (2014: £24.4m of respect in £81.2m) amount an includes equipment and plant of value book net The – discontinued operations – discontinued – discontinued operations – discontinued Land and and Land buildings buildings (12.3) (13.5) 60.2 59.5 71.8 71.2 57.7 (3.2) (2.2) (6.0) (2.0) (1.6) (2.4) (2.4) (0.7) 1.1 1.1 0.5 0.6 6.7 0.7 7.3 £m – – – – – – equipment equipment Plant and (121.0) (119.1) 158.8 235.6 114.6 130.4 (75.8) (22.2) (32.3) (12.1) (42.6) (49.4) (66.9) 35.6 39.5 81.1 18.7 63.5 67.8 (1.2) (0.4) 6.8 8.9 0.5 0.9 £m – – – Mining (33.6) (26.6) (51.7) 18.3 49.9 51.9 37.9 (0.2) (0.2) (4.3) (7.0) 2.0 £m – – – – – – – – – – – – – – – – – (166.9) (171.5) 192.4 121.2 191.2 106.2 166.1 201.6 359.3 (34.5) (82.0) (13.9) (79.0) (80.4) (45.0) (24.6) 48.2 19.8 Total Total 36.7 (1.2) (2.0) (4.3) (0.4) (7.0) 0.5 0.9 9.6 £m 7.4 143 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 144 Kier Group plc Annual Report and Accounts 2015 Total investments in and loans to joint ventures tojoint loans and in Total investments ventures joint to provided Loans Net external assets Total liabilities liabilities Non-current Borrowings liabilities Non-current liabilities Current payable tax Income –current payables other and Trade liabilities Current Borrowings –current Borrowings loans and investment of (b) Analysis Total assets Total assets Current receivables trade and Cash assets Current assets Non-current assets non-current Other assets tax Deferred equipment and plant Property, assets Non-current Investment in joint ventures joint in Investment (a) year in Movements ventures joint to loans and in Investments 14 For year 30 the June 2015 ended statements Notes financial consolidated to the At 30 June 30 At At 1July At Disposals Additions Acquired Items recognised directly in other comprehensive income: Dividends received ventures joint of results Post-tax profit Operating of: Share Loan repayments

Taxation costs Finance Fair value movements in cash flow hedging instruments hedging flow cash in movements value Fair Deferred tax on fair value movements in cash flow hedging instruments hedging flow cash in movements value fair on tax Deferred continued (147.1) 193.5 101.9 (95.5) (95.5) (50.1) (51.6) 2015 2015 2015 2015 26.3 46.4 91.6 91.6 33.0 40.9 35.6 75.5 79.4 79.4 (3.5) (0.5) (0.2) (1.0) (1.0) (0.3) (2.4) 8.2 0.1 0.4 £m £m 0.7 7.9 – – 102.5 (56.6) (56.6) (69.3) (12.7) (13.7) 2014 2014 33.2 33.9 38.0 40.9 40.9 29.9 29.9 15.1 72.6 11.7 29.7 (0.3) (0.2) (9.3) (3.6) (3.4) (0.1) £m 1.9 1.6 0.4 0.7 £m 7.7 – – Share-based payments creditedShare-based to equity Credited/(charged) to income statement Acquired 2014 June 30 At Charged directly to comprehensive income Net tax assets tax Net tax Set-off Total losses Tax Share-based payments Share-based Financial instruments Payables Inventories Kier Sydenham LP Kier Sydenham Acquired 2013 June 30 At year: prior reporting and current the during thereon movements and Group the by recognised liabilities and assets tax deferred major the are following The tax Deferred 15 Solum Regeneration (Epsom) LP follows: as ventures joint of facilities borrowing support to guarantees provided has Group The Credited directly to comprehensive income Expenditure Credit Development and Research Credited/(charged) to income statement Intangible assets Intangible equipment and plant Property, Retirement benefit obligations benefit Retirement Fore UK 1B LP 1B UK Fore Limited (UK) Biogen Deferred tax assets and liabilities are attributed to temporary differences relating to the following: the to relating differences temporary to attributed are liabilities and assets tax Deferred At 30 June 2015 June 30 At payments chargedShare-based to equity Transfers Kier Trade City LLP City Trade Kier Kier Hammersmith Limited LLP Reading Kier joint ventures are given on page 166. page on given are ventures joint in Group’s interests the of Details Group. the to recourse without are ventures joint the of liabilities the above disclosed as than Other Borrowing Borrowing Intangible Intangible (58.9) 2015 facility facility 11.3 143.6 20.2 assets 70.2 30.7 (28.2) (21.3) (20.3) £m 45.8 21.5 (47.1) 1.8 22.0 19.3 16.0 19.0 6.5 2.4 8.6 (0.6) £m £m 1.4 1.6 – – – – – – – – – equipment equipment Guarantee Guarantee plant and plant Property, Assets (33.6) 2014 2014 11.9 35.4 1.8 3.3 1.9 21.5 2.9 76.2 19.3 8.7 6.7 £m 17.0 17.1 2.9 8.0 2.8 1.9 £m 7.5 2.7 4.7 9.7 £m – – – – – – – – – – at 30 June 30 at differences differences Short-term Short-term temporary Drawn (58.9) 2015 (47.1) 58.9 2015 45.8 86.1 15.0 16.0 (3.1) (8.7) £m £m (3.4) (1.6) (1.0) (0.1) (6.7) 5.2 3.5 0.6 2.5 2.9 1.4 0.5 2.6 2.0 7.5 £m – – – – – – – – Retirement obligations Liabilities Borrowing Borrowing benefit benefit (33.6) (11.3) (20.3) 2014 facility facility 33.6 11.9 11.4 (2.0) 13.7 30.7 £m 36.0 22.0 15.0 73.0 (0.8) (4.9) (1.7) £m 6.2 6.8 £m – – – – – – – – – – – – – – Guarantee Guarantee losses losses 2015 2015 (47.1) 11.3 11.3 30.7 17.1 65.5 36.0 22.0 (5.4) (2.2) 2.2 3.5 2.9 5.9 2.4 1.8 8.6 2.4 8.6 £m Tax £m 7.5 £m – – – – – – – – – – – – at 30 June 30 at Drawn (20.3) (11.4) 2014 2014 11.3 11.9 23.5 2014 Total Total Total 45.5 31.5 (6.5) (2.3) (2.6) (0.1) (4.3) 1.2 1.8 1.8 1.8 3.3 1.9 1.4 2.9 2.5 6.8 0.5 4.7 £m £m £m 5.0 9.0 – – – – – – 145 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 146 Kier Group plc Annual Report and Accounts 2015 Other receivables security social and taxation Other Prepayments and income accrued Trade receivables Current: receivables other and Trade 18 (note 16) progress in contracts –construction Inventories follows: as liabilities and assets into analysed is balance net The (2014: £8,224.6m £7,120.2m). of receivable and received billings (2014: progress £6,875.8m), less £7,984.1m of losses less profits recognised plus incurred costs contract comprise date sheet balance the at progress in Contracts contracts 17 Construction (note 17) progress in contracts Construction Raw materials and consumables 16 Inventories For year 30 the June 2015 ended statements Notes financial consolidated to the Other receivables fromjoint receivable Amounts ventures (note 22) customers to due amounts –gross payables other and Trade progress in work Other development for held progress in work and Land Construction contract retentionsConstruction contract Non-current: Construction contract retentionsConstruction contract continued (400.2) (240.5) 211.1 535.3 343.4 241.8 159.7 159.7 737.8 107.0 2015 2015 2015 2015 18.3 91.1 21.5 56.8 31.4 20.3 23.6 £m 9.9 £m £m (336.8) (244.4) 358.4 586.4 331.4 470.4 2014 2014 2014 2014 86.3 11.3 11.5 23.5 12.0 23.9 92.4 92.4 59.1 22.7 67.1 £m 4.2 £m £m Provisions borrowings) (including liabilities current Other Finance costs Finance (loss)/profit Operating Operating costs Revenue is as follows: assets, associated the of re-measurement the on recognised result the and operations mining UK the of result the of Analysis operations (c) discontinued of Result Total Trade and other payables other and Trade sale for held as classified group disposal of (b) Liabilities and equipment plant Property, sale for held as classified group (a) disposal of Assets consolidated. fully not and sale for held as presented be to continues JSS therefore FY16, of half first the in likely is completion and process asale of stage advanced an at now is Group The sale. of details the finalising in adelay to due FY15 during complete not did however date, sheet balance previous the at sale for held also was (‘JSS’)) JSS sale. for Limited held also Holdings are Suffolk) and (Norfolk Services (‘KCL’) Support Limited Justice and Catterick (Kier ventures property its of two in Group’s interest The FY16. of half first the in sold be to expected is KML Group. the for business of line major aseparate constitute which operations, mining UK its from exit to decision astrategic made has Group the and end year the at advanced well were sell to discussions discontinued, and sale for held as (‘KML’) Ltd classified Minerals been have Kier of liabilities and assets The 2015. 1July on completed transaction the and end year the at advanced well were discussions as sale, for held as classified been (‘F&PS’) have Limited FPS Kier to related liabilities and assets The operations discontinued and sale for held assets 19 Non-current Loss for theLoss year from discontinued operations value realisable to activities discontinued of assets net of re-measurement the on recognised tax after Loss Tax value realisable to activities discontinued of assets net of re-measurement the on recognised tax before Loss operations discontinued of tax after Loss Tax tax before Loss Net assets held for sale for held assets Net Goodwill Total assets current Other Inventory intangibles Other (32.1) F&PS F&PS (49.7) (17.6) 62.8 45.5 13.1 17.0 0.3 £m £m – – – (38.6) (10.9) (27.5) 31.2 13.7 17.5 KML KML (0.2) (7.4) £m £m – – – (17.5) (17.5) 26.5 16.7 KCL KCL 0.8 9.0 9.0 £m £m – – – – (62.2) (55.3) 11.2 73.4 73.4 (6.9) JSS JSS £m £m – – – – – (132.4) (168.0) 193.9 108.7 (22.5) (21.8) (22.9) (24.0) 2015 2015 (10.9) (24.7) 2015 2015 20.6 25.9 75.9 Total Total (2.2) (1.9) (2.9) (1.0) 1.1 £m 0.7 0.3 9.0 £m £m – (46.7) 2014 47.4 (56.7) (62.4) 2014 2014 (1.3) (0.6) (1.0) (1.0) (0.4) 72.8 72.8 £m 10.4 0.7 (5.7) JSS JSS £m £m – – – – – – – – 147 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 148 Kier Group plc Annual Report and Accounts 2015 Acquired obligations obligations New Total cash flows Total cash flows cash Financing Investing cash flows 21 Finance lease obligations lease 21 Finance hand in cash and balances –bank equivalents cash and Cash borrowings and equivalents cash 20 Cash, flows cash Operating operations discontinued flows(d) from Cash continued operations discontinued and sale for held assets 19 Non-current For year 30 the June 2015 ended statements Notes financial consolidated to the Information on borrowings is detailed in note 27. note in detailed is borrowings on Information (2014: £1,341.6m £553.4m). overdraft (2014: and £1,595.6m £665.8m) were equivalents cash and cash basis, agross On arrangements. pooling cash Group-wide to subject are equivalents cash and Cash £0.1m). (2014: cash restricted of £0.2m and balances bank Group other against offset be £67.3m cannot that (2014: cash of operations, £80.4m) joint by held equivalents cash and cash of Group’s share £78.6m the (2014: being include £31.9m) equivalents cash and Cash borrowings Net year one after due Borrowings Borrowings due within one year Finance lease liabilities are payable as follows: as payable are liabilities lease Finance Repayments Transferred to assets held for sale for held assets to Transferred 1July At Less than one year one than Less At 30 June At 30 June June 30 At years five and two Between Over five years five Over payments payments payments payments minimum minimum Future Future Future Future (34.8) (32.7) lease lease lease lease 15.9 92.4 42.6 42.6 26.7 17.7 £m £m – – Interest Interest Interest (0.8) (1.0) (1.0) (2.0) (2.0) (5.4) £m 1.6 2.6 £m – – payments payments payments payments minimum minimum continued value of of value value of of value Present Present Present (32.2) (31.1) 2015 2015 lease lease lease lease 16.9 14.9 40.6 40.6 25.7 87.0 £m £m – – payments payments payments payments minimum minimum Future Future Future Future (32.3) lease lease lease lease 66.8 66.8 43.1 92.4 92.4 29.5 14.8 61.7 1.2 £m £m – Interest Interest (394.8) (140.8) 254.0 2015 2015 2015 (3.5) (2.8) (1.2) (4.2) (1.9) (5.4) (5.4) (0.2) (1.1) (0.1) £m £m 1.3 2.7 £m £m – – – payments payments payments payments minimum minimum value of of value value of of value Present Present Present Present (122.8) (195.4) 112.4 (39.8) (29.6) lease lease lease lease 2014 2014 2014 2014 58.2 40.3 62.6 13.7 87.0 87.0 27.6 (0.2) (2.0) (9.6) (7.4) £m £m 1.2 1.2 £m £m – Future outflows in respect of other provisions are expected to occur over the next 11 years. 11 next the over occur to expected are provisions other of respect in outflows Future is uncertain. liabilities these of respect in outflows future potential any of timing the claims, insurance for provision the of nature the to Due year one after Due Due within one year one within Due follows: as utilised be will provided amounts the that anticipated is It provisions. value fair and contracts certain of cessation on obligations contractual represent primarily provisions Other operations. mining UK its from exiting of process the in is Group 19) the (see as note group of restoration of cost the represent provisions Mining companies. Group various in disputes other and legal of respect in are provisions Insurance 1 At 1 July 1July At Accruals and deferred income deferred and Accruals retentions Sub-contract Trade payables Non-current: 23 Provisions security social and taxation Other Deferred consideration on acquisitions balancesConstruction contract retentions Sub-contract Trade payables Current: payables other and Trade 22 income statement (Charged)/credited to Due to external joint ventures joint external to Due on received Payments account Accruals and deferred income deferred and Accruals payables Other At 30 June June 30 At Transfers Utilised Acquired Unwinding ofUnwinding discount Transfer to Assets held for resale (see note 19). (see note resale for held Assets to Transfer Insurance Insurance claims 22.3 17.4 (8.3) 5.2 2.1 5.9 £m – Restoration of mining (10.9) sites 17.8 £m (7.7) 0.8 – – – 1 opencast mining activities; this provision has been transferred to the disposal disposal the to transferred been has provision this activities; mining opencast provisions (15.2) (10.3) Other Other 48.5 13.9 36.4 (4.1) 3.6 £m (31.2) (12.9) 2015 19.1 58.7 83.7 Total £m (4.4) 4.4 Insurance Insurance claims claims (10.2) 27.2 17.4 (8.0) 8.4 £m – – Restoration of mining mining of 16.8 sites 17.8 (0.1) £m 1.1 – – – provisions 1,314.3 400.2 253.3 437.9 2015 2015 11.4 13.1 13.1 53.5 52.9 45.6 39.4 58.7 77.1 (28.2) £m £m Other Other 1.5 48.5 9.5 56.5 0.4 13.4 0.8 4.9 1.1 £m – – 338.8 336.8 982.7 170.4 (38.4) 2014 2014 2014 2014 55.8 56.5 13.0 49.5 83.7 34.7 83.7 37.2 Total 27.9 57.4 (7.0) £m £m 1.3 6.3 9.3 1.0 2.1 0.9 9.2 6.0 £m 149 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 150 Kier Group plc Annual Report and Accounts 2015 shares are accounted for as a deduction from retained earnings. retained from adeduction as for accounted are shares These shares. new of issue the from than Trust rather Plan Ownership Share Employee Ltd Trustees Group Gurney May Trust and Benefit Employee 1999 Group Kier the by held shares following the from satisfied be to intended are shares as taken are which awards The settled. equity all are LTIP the under Awards targets. performance specific achieving Group the to subject is and lapsing) award the of balance the (with part in or full in be may Vesting grant. the of date the of anniversary third the following vest to able normally are scheme the under made Awards Long Term Incentive Plan 1,377 was pence. options of exercise of date the at shares plc Group Kier of price market average weighted The settled. equity all are Scheme Sharesave the under (2014: year nil). the in Options granted were 762,213 options Sharesave Scheme – directors 2015 June 30 at outstanding Awards grant of Date follows: as were 2015 June 30 at shares ordinary Company’s the over awards and Options payments Share-based 25 2013. 8July on Gurney May acquire to apremium at issued shares the on arose reserve merger The Merger reserve 2004. 1July at nil to set was reserve this IFRS1, of provisions transitional the with accordance In undertakings. subsidiary overseas in investments net of retranslation the from arising exchange on difference cumulative the comprises reserve This Translation reserve tax. deferred related any with together occurred, yet not have that transactions to hedged related instruments hedging flow cash the of value fair the in change net cumulative the of portion effective the comprises reserve This reserve hedge flow Cash Company. the of meetings at share per vote one to entitled are and time to time from declared as dividends receive to entitled are shares ordinary of holders The £2.1m. of apremium at Scheme Sharesave the under shares 182,843 and £1.1m of apremium at premium. share from deducted been have (£8.1m) placing issue rights the to related Costs £311.6m. of value nominal to apremium at share, per pence 858 at shares new 39,646,692 issuing issue, 7rights a5for from £340.2m, raised business the acquisition, Mouchel the 2015, fund to 2June On each 1pence of shares ordinary paid fully and Issued comprises: Company the of capital share The Share capital reserves and capital 24 Share For year 30 the June 2015 ended statements Notes financial consolidated to the Exercise price (pence) price Exercise – employees At 1July At

May Gurney at date of acquisition of date at Gurney May issue rights the of aconsequence as Acquired At 30 June 30 At schemes other and awards of satisfaction in Issued See note 30 for further details. During the year 65,358 shares were issued as a scrip dividend alternative alternative dividend ascrip as issued were shares 65,358 year the During details. further for 30 note See Sharesave 373,139 373,139 Scheme 27 Apr 27 1,050 2012 – Sharesave Sharesave 364,955 364,955 Scheme 1,050 2013 3 May – 31 October Sharesave Sharesave 762,213 762,213 Scheme 1,450 2014 – May Gurney May Sharesave Sharesave 133,650 133,650 Scheme Formerly 30 July July 30 2012 95,159,247 743 continued (177,864) 681,503 – of shares of 122,575 736,792 Number Number Number LTIP 2013 LTIP 2013 130,851 507,098 637,949 13 Sept Sept 13 – award 2012 nil LTIP 2014 544,657 2015 643,347 Value 2015 98,690 £m 1.0 (1.9) £m 21 Oct 21 Oct 9.3 7.4 award 2013 – – nil 55,264,354 LTIP 2015 LTIP of shares (238,775) 836,446 455,686 146,045 519,881 982,491 736,792 Number Number 22 Oct Oct 22 award 2014 nil – 3,522,158 3,897,744 375,586 2014 Total Total Value 2014 £m 0.6 (2.8) 9.3 6.0 6.1 £m – the acquisition date. The option life shown above is the period from acquisition. from period the is above shown life option The date. acquisition the at shares plc Group Kier over options to converted were employees Gurney May to granted scheme Gurney May the under options Former (pence): option per Value (years) life Option (pence) price Exercise Share price at grant (pence) grant at price Share grant of Date Long Term Incentive Plan (pence) grant at price Share grant of Date Sharesave Scheme model. astochastic on based is LTIP which the of (‘TSR’) element return shareholder total the from apart options all for model Scholes Black- the on based are calculations These assumptions. following the using calculated been has granted option per value fair The Value of schemes share 106. to 84 pages on report remuneration directors’ the in included are scheme each of conditions and terms the and schemes these of A description waived. been have shares £9.7m these was 2015 on June 30 at (2014: dividends shares £13.0m). The these of value market The Risk-free interest rate Dividend yield volatility Expected Exercise price Exercise Dividend yield (years) life Option Risk-free interest rate Expected volatility Expected conditions are market conditions under Payments’. IFRS2 ‘Share-based performance the as awarded, be will that shares of number the of assessment an incorporates element TSR the of value fair The year. the in issue rights the on arising factor bonus the for adjusted as payable, consideration the less option the of value fair the represents option per value The (pence): option per Value Restated for rights issue (see note 24) (see note issue rights for Restated grant At Restated for rights issue (see note 24) (see note issue rights for Restated grant At 13 September (EPS element) 1,214.3 1,399 970.4 2012 4.7% n/a n/a 3.0 3.0 nil 13 September (TSR element)(TSR 28.1% 1,399 501.7 627.8 2012 0.4% 4.7% 3.0 nil (EPS element) 21 October 1,604.2 1,281.9 27 April 27 April 32.8% 1,050 209.7 1,172 1,797 167.6 2012 2013 3.8% 5.6% 0.7% n/a n/a 3.0 3.0 3.0 3.0 nil (TSR element)(TSR 21 October 1,092.1 1,366.7 28.6% 27.2% 1,050 139.5 1,187 1,797 3 May 3 May 174.6 2013 2013 3.8% 0.8% 5.6% 0.4% 3.0 3.0 3.0 nil (EPS element) 22 October 31 October 31 October 1,053.0 1,317.7 1,450 1,490 200.4 160.1 1,519 27.1% 2014 2014 4.8% 1.1% 4.7% n/a n/a 3.0 3.0 3.0 nil (TSR element)(TSR May Gurney May 22 October Formerly 30 July July 30 24.6% 604.8 1,268 335.4 27.8% 756.8 1,519 419.7 2012 2014 5.2% 1.0% 0.5% 4.7% 2.36 2.36 743 3.0 3.0 nil 151 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 152 Kier Group plc Annual Report and Accounts 2015 Granted Exercised Forfeited schemes Gurney May from Converted Impact of rights issue rights of Impact at 1 July Outstanding a pre-tax annualised return of at least 15% is required to ensure such investments are value enhancing for shareholders. for enhancing value are investments such ensure to 15% required is least at of return annualised a pre-tax typically and capital of cost average Group’s weighted the to regard with made are decisions investment All borrowings. of repayment or increase the and capital share new of issue the shareholders, to dividends of payment the through required as structure capital its adjusts and basis aregular on needs capital longer-term and medium short, monitors and forecasts Group The below. further described and 20 note in disclosed as borrowings and equivalents cash cash, and equity; in changes of statement consolidated the in disclosed as reserves other and earnings retained premium, share capital, share of consisting equity, comprises: Group the of structure capital The 2014. from unchanged remains strategy management risk capital Group’s overall The objectives. management Group’s capital the deliver and divisions operating the support to profiles maturity and return risk, different with types capital of ablend use to is strategy management Group’s capital The developments. fund to capital net require divisions Residential and Property the whilst surplus, cash anet generating division, Services the to extent and a lesser division, Construction the with characteristics, capital complementary have Group the of divisions operating four The qualification. tender and development business support to sheet balance astrong maintain to and capital; of cost the minimise to order in structure capital the optimise to concern; agoing as continue to Group’s ability the ensure to are: objectives management Group’s capital The riskCapital management 27 instruments Financial business. of course normal the in into entered ventures, joint and operations joint including arrangements, other and contracting under claims and guarantees bonds, performance of respect in liabilities contingent are There 26 contingent Guarantees and liabilities below: shown is movements option of A reconciliation insurance. national employer’s for provisions to (2014: £0.3m of £0.5m) relating amount an is payables other in (2014: costs Included £4.0m). employee as statement income the in recognised been has payments share-based to relating £3.4m life. option assumed the with consistent aterm of bonds UK Government zero-coupon on yield the is return of rate risk-free The years. three last the over volatility historical on based is volatility expected The vest. to expected are that awards of number the for a‘true-up’ by factored value fair the on based is element this for charged amount the Instead awarded. be will that shares of number the of assessment an include not does therefore value fair The IFRS2. under conditions non-market are element EPS the of conditions performance The continued payments Share-based 25 For year 30 the June 2015 ended statements Notes financial consolidated to the Exercisable at 30 June 30 at Exercisable at 30 June Outstanding The options outstanding at 30 June 2015 have a weighted average remaining contractual life of 1.32 years (2014: years years). 1.27 1.32 of life contractual remaining average aweighted have 2015 June 30 at outstanding options The 1,326,442 2,743,955 3,897,744 of options (291,651) (662,477) 781,475 continued Number – – Weighted Weighted exercise average average 405.8p 632.5p 404.3p 591.9p 575.9p 2015 price – – – 3,057,902 2,743,955 of options of (636,895) (592,482) 345,201 570,229 Number – – Weighted Weighted exercise 404.3p 464.9p average average 265.8p 744.0p 674.6p price 2014 – – – Overall, the Group considers that it is not exposed to significant credit risk. credit significant to exposed not is it that considers Group the Overall, Services Construction follows: as was receivables trade of age average the Group; the across vary terms (2014: 13.6%). Credit 45.1% was payment for overdue were that 2015 June 30 at receivables trade of proportion The unprovided. and overdue are that sheet balance the in recognised receivables trade of amount the of respect in obligations payment their meet not will debtors the that 2015 June 30 at as indications no are 2015. There August of end the by (2014: £37.8m) £64.2m received which been of had against, provided been not have that date sheet balance the at overdue were that receivables trade of £109.1m (2014: were £48.8m) There June 30 at as Provision Charged/(credited) to the income statement Acquired in the year the in Acquired 1July at as Provision below: out set is receivables trade against held provision the of analysis An recoverable. longer no is debt the that considers management when provision debt bad the against off written are Receivables date. sheet balance the at factors known and experience default prior on based is overdue are that debts for made provision and provision of rate group-wide no is There accounts. receivable individual, of areview following management by estimated been has which provision debt abad of net stated are sheet balance the in included receivables other and Trade risk. credit of concentrations significant no were there date sheet balance the At limits. predetermined within are counterparty one any to exposures credit that so regularly monitored are positions exposure Counterparty agencies. ratings major ratings the by on based issued counterparties authorised credit-rated highly with only executed are transactions hedging and deposits bank Short-term client. the of nature the to due quality credit ahigh of are or ratings credit high have generally which entities industry regulated or public are clients significant Group’s most The history. credit appropriate an have customers that ensure to exist procedures and Policies hedges. currency and rate interest and deposits bank short-term receivables, trade as such instruments financial on arises risk Credit risk Credit rates. exchange and interest in to fluctuations exposure hedge to used are instruments financial Derivative transactions. speculative into enter not does and centre aprofit is not Treasury Board. the by approved limits operating and policies within risks financial principal the manages team Group’s treasury The assets. net and performance financial on effects adverse any potential minimise to is policies management risk Group’s financial the of aim overall The risk. liquidity and risk market risk, credit to primarily exposed is Group the business, its of course the In managed. is Group the way the of part integral an is management risk Financial Financial risk management 23 days (2014: days 23 41 days) (2014: days 22 days) 36 2015 2015 11.6 14.0 2.3 0.1 £m 2014 2014 (0.8) 1.8 1.3 2.3 £m 153 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 154 Kier Group plc Annual Report and Accounts 2015 Loans to joint ventures joint to Loans cash flows will impact the income statement and the fair value of the related hedging instruments: hedging related the of value fair the and statement income the impact will flows cash those how occur, to expected are hedges flow cash with associated flows cash the which in periods the indicates table following The recognised directly in equity. been have aresult as and accounting hedge for criteria the meet to continued have swaps US$116m. These value nominal loan, denominated dollar aUS on risk currency the hedge to swaps cross-currency four into entered plc Group 2014 Kier During US$28m. value nominal loan, denominated dollar a US on risk currency the hedge to swaps cross-currency three into entered plc Group Kier 2013 During on market observable data. based are that inputs include that techniques valuation using method, 2valuation alevel on based determined been has contracts these of value fair The statement. income the through value fair at held derivatives as for accounted been have contracts forward price Fuel contracts forward price Fuel related deferred tax asset of £4.4m, have met the criteria for hedge accounting and as a result have been recognised directly in equity. in directly recognised been have aresult as and accounting hedge for criteria the met have £4.4m, of asset tax deferred related the with together which, £22.0m to amounted markets, active in prices quoted on 2015, based June 30 at derivatives rate interest these of liability value fair net total the of Group’s share The £123.4m. is held are derivatives rate interest which against debts bearing interest- these on outstanding amount aggregate the 2015 June 30 At Group. the to recourse without are and years 30 25 and between of term atypical have ventures joint these within derivatives rate interest associated and debts Interest-bearing risk. rate interest hedging of ameans as derivatives rate interest into entered have ventures joint Group’s PFI the of anumber above, the to addition In Cash and cash equivalents cash and Cash equivalents: cash and cash cost, amortised at receivables and Loans assets Financial Liabilities swaps: Cross-currency Continuing operations operations Discontinued 2015 June 30 At instruments Derivative financial levels. debt gross peak forecast exceed to designed is and regularly reviewed is Group the to available facilities borrowing committed of amount The facilities. borrowing committed unsecured of form in the banks relationship of asyndicate by provided are facilities borrowing Group’s principal The term. medium the over debt net significant carry to need the without operations fund to available are facilities borrowing sufficient that ensure to is risk liquidity on Group’s policy The Liquidity risk swaps. or contracts exchange foreign forward using hedged are these identified, are exposures currency foreign significant Where significant. be to considered not is risk currency to exposure its that such UK the within primarily operates Group The risk currency Foreign rate. interest significant is there where swaps rate interest into entered have ventures Group’s joint the of anumber addition, In rate Variable rate Fixed follows: as analysed be can Group’s borrowings The LIBOR. over amargin at rates, floating at interest carry which requirements, capital medium-term finance to loans term and requirements capital working short-term finance to facilities borrowing has Group The risk rate Interest risk Market continued 27 instruments Financial For year 30 the June 2015 ended statements Notes financial consolidated to the Trade and other receivables (including £31.4m due after more than one year) – excluding prepayments prepayments –excluding year) one than more after due £31.4m (including receivables other and Trade Fair value value Fair 1.5 £m 34.6 Total £m 0–1 years 0–1 continued £m 4.1 1–2 years 1–2 years liabilities Current Current £m 4.1 0.4 £m Non-current Non-current 2–5 years 2–5 liabilities 212.1 394.8 254.0 182.7 459.7 746.7 2015 2015 2015 12.1 33.0 Expected cashExpected flows £m £m £m £m – More than liabilities liabilities 5 years 235.2 550.8 112.4 670.9 172.5 2014 2014 2014 14.3 62.7 Total £m £m 0.4 £m £m 7.7 30 June 2014 June 30 Carrying value Carrying Over five years five Over years five to Four One to two years two to One Four to five years five to Four year one than Less flows cash Contractual Three to four years four to Three years Two three to years two to One year one than Less flows cash Contractual Included within borrowings are capitalised loan fees of £2.8m (2014: £2.3m). £2.8m of fees loan capitalised are borrowings within Included period. the throughout covenants these with complied has Group The worth. net consolidated cover, and interest EBITDA, to debt of ratios the regarding specifically structure, Group’s financing the to linked covenants certain to subject are facilities committed The (2014: 2015 June 30 £39.8m). at drawn £nil demand, on repayable LIBOR, over (2014: amargin at £45.0m), £45.0m of overdraft unsecured an has Group the addition In • • • facilities: committed unsecured following the has Group The andBorrowings borrowing facilities 2. level as classified are Group’s derivatives The liabilities. and assets Group’s financial the of value fair and value carrying the between difference material no is There 1 Two to three years Two three to Over five years five Over years four to Three value Carrying 2015 June 30 flows: cash contractual their of profile maturity the with together liabilities financial following the had Group the 2015 June 30 At dates maturity of –analysis liabilities Financial year. one than more after due receivables other and trade of £31.4m are above the in Included

Trade and other payables excludes deferred consideration, deferred income, taxes and social security and payments on account. on payments and security social and taxes income, deferred consideration, deferred excludes payables other and Trade £182.7m (2014: £62.7m). (2014: £182.7m 2015, June 30 at drawn 2024, fully November and 2021 November 2022, 2019, December December repayments, four in repayable 4.1% 4.9%, and between of coupons £47.0m US$28.0m, fixed US$116.0m, with £45.0m, of and amounts principal notes, loan Four (2014: and 2015, 2017, £30.0m £30.0m); June 30 at January drawn fully repayable £30.0m LIBOR, over amargin at loan term One (2014: £55.0); 2015 June 30 at drawn £185.0m 2020, June in renewal for due LIBOR, over amargin at £380.0m, of facility credit Revolving Trade and payables 1,232.8 1,232.8 1,221.4 940.8 940.8 931.5 other 11.4 £m 9.3 – – – – – – – – 1 on acquisition consideration consideration Deferred Deferred £m 1.0 1.0 1.0

– – – – – – – – – – – – – Borrowings Borrowings 235.2 453.8 218.2 259.6 394.8 169.4 84.1 45.0 55.1 66.7 39.2 5.2 3.5 8.8 8.8 9.4 £m

obligations Finance lease lease 92.4 11.4 29.5 24.3 21.0 15.9 42.6 40.6 87.0 17.0 1.2 5.0 2.1 0.6 £m 7.0 – instruments Derivative financial 14.1 34.6 £m 2.2 0.9 0.9 0.9 0.9 0.9 1.5 1.7 4.1 4.1 4.1 4.1 4.1 6.7

Continuing Continuing operations 1,300.5 1,265.7 1,250.8 1,007.9 1,763.8 1,669.7 106.0 183.5 222.9 15.8 61.0 70.1 39.7 15.0 19.9 Total 71.7 £m

Discontinued Discontinued instruments instruments operations Derivative Derivative financial financial 0.2 0.4 0.4 0.1 0.1 0.4 0.4 0.4 £m – – – – – – – – 155 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 156 Kier Group plc Annual Report and Accounts 2015 beyond 30 June 2015 of 14 years. Vehicle leases typically run for a period of four years. No leases include contingent rentals. contingent include leases No years. four of aperiod for run typically leases Vehicle 14 of 2015 years. June 30 period beyond amaximum to up length in considerably vary leases Property purposes. operational for vehicles and properties leases Group The Non-cancellable operating lease rentals are payable as follows: as payable are rentals lease operating Non-cancellable Over five years five Over years five and one Between Share-based payment charge payment Share-based benefits employment Total short-term Employer’s national insurance contributions Termination payments Commitments for equity and subordinate debt in joint ventures joint in debt subordinate and equity for Commitments Commitments for capital expenditure commitments capital and Financial 28 For year 30 the June 2015 ended statements Notes financial consolidated to the Key management personnel compensation comprised: 25). (see note programme option Group’s share the in participate also personnel management Key 95. page on disclosed as arrangements pension their to contributes and directors to benefits non-cash provides also Group the salaries, their to addition In 106. to 84 pages on report remuneration directors’ the in identified as directors non-executive and executive the are personnel Group’s management key The Transactions with key management personnel participate. employees its which in schemes pension and personnel management key ventures, joint its with relationship party arelated has Group The parties related of Identity parties 29 Related year one Within Emoluments as analysed in the directors’ remuneration report

Details of transactions between the Group and pension schemes in which its employees participate are detailed in note 8. note in detailed are participate employees its which in schemes pension and Group the between transactions of Details Transactions with pension schemes continued Property Property 25.2 55.3 10.1 20.0 £m machinery machinery Plant and 2015 61.2 22.1 32.1 £m 7.0 Property Property 2015 2015 2015 33.8 11.1 16.4 16.3 16.3 22.6 £m 6.3 0.2 6.3 3.3 4.3 0.3 0.5 4.0 £m £m machinery Plant and and Plant 2014 2014 2014 2014 45.2 23.4 23.9 30.7 19.7 3.2 4.3 3.6 0.4 1.6 0.7 7.3 £m £m £m – Information Resources (Oldham) Limited 1LLP Holdings 140 Tri-Link Watford Health Campus Partnership LLP Partnership Campus Health Watford Kier Hammersmith Holdco Limited Biogen Holdings Limited Limited Village Salford 1LLP Holdings Square 3 Sovereign 1LLP Holdco Reading Kier 1LLP Holdco City Trade Kier 30 June 2014 June 30 payable at Balance ofUnwinding discount 2014 June 30 to year the during Paid Gurney May of Acquisition below: analysed are ventures joint from due Amounts ventures joint to loans on Interest 30 June 2013 June 30 payable at Balance Limited Company Comedat Saudi services Management costs associated and Staff Transactions with joint ventures Staffordshire Property Partnership Property Staffordshire acquisitions of respect in payable and paid consideration of (a) Summary disposals and Acquisitions 30 (note 30b) (note Acquisition of Mouchel (note 30d) (note Southdale of Acquisition 30 June 2015 June 30 to year the during Paid Balance payable at 30 June 2015 June 30 at payable Balance

Limited Beco (0.1) 0.1 £m – – – – – – – Develop- Limited ments ments (26.0) 25.7 £m Kier Kier 0.3 – – – – – – Tyneside Council North North (1.0) (1.0) £m 1.9 1.0 0.1 – – – – Gurney (38.5) 38.5 May £m – – – – – – – Mouchel (260.6) 260.6 £m – – – – – – – Southdale 2015 2015 2015 33.0 14.6 (2.2) (0.8) 1.8 1.8 6.2 1.0 3.8 3.5 0.1 2.0 0.1 £m £m 0.7 7.4 – (1.0) 1.0 £m – – – – – – – (262.6) 260.6 (65.6) 2014 2014 2014 38.1 40.1 38.5 Total 27.7 (2.0) £m £m 1.5 0.2 0.5 2.0 6.6 0.9 1.0 1.0 0.4 £m 7.7 – – – – – – – 157 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 158 Kier Group plc Annual Report and Accounts 2015 Provisions obligations benefit Retirement payable tax Corporation Borrowings payables other and Trade equivalents cash and Cash receivables other and Trade Inventories assets tax Deferred in joint ventures Investment equipment and plant Property, assets Intangible item. anon-underlying as statement income the to expensed and year the in incurred were costs acquisition of £13.5m purposes. tax for deductible be to expected is recognised goodwill the of None position. market Group’s strengthened the from arise that synergies operating the and workforce assembled the of expertise and knowledge the to attributable is acquisition on arising goodwill The period. measurement the in adjustments for further allow to provisional are acquired liabilities and assets of values fair the date, plc’s reporting Group Kier to acquisition the of proximity the to Due acquisition. of date the at contracts customer of value fair the represents acquired assets intangible the of value fair The management market. and maintenance highways UK growing the in leader asector as Kier positions and complementary highly is acquisition the believes Board Kier The sector. infrastructure the in growth for strategy Kier’s accelerate to opportunity excellent an represented acquisition The network. road strategic UK the to services maintenance and repair of provider leading the is It Australia. and East the Middle UK, the in markets utilities and education health, services, emergency property, government, local transportation, and to the highways services managed and delivery project design, advisory, provides It group. services business and infrastructure international an is Mouchel £260.6m. of consideration atotal for 2015 8June on (‘Mouchel’) Limited MRBL of capital share entire the purchased Group The (b) Acquisition of Mouchel Mouchel of (b) Acquisition continued disposals and Acquisitions 30 For year 30 the June 2015 ended statements Notes financial consolidated to the 9 June 2015 to 30 June 2015. June 30 to 9 June 2015 period the for £2.6m of taxation before profit underlying and £55.6m of revenue Group the to contributed business Mouchel The Group. combined the of results future the of year, indicative or the of beginning the at made been actually purchase the had occurred have would that Group combined the of results the of indicative necessarily not is information This eliminated. been have transactions inter-company the 2014 and 1July on acquired were businesses the if as included been have costs and revenue results, forma pro the preparing In £85.9m). of taxation before profit underlying reported the with (compared £99.5m of taxation £4,033.9m of operations continuing from revenue include year, would the of beginning the at made been had Mouchel of acquisition the if as Group, the of results consolidated forma pro The consideration Cash Satisfied by: acquired Total assets Goodwill (compared with the Group revenue of £3,275.9m) and underlying profit before before profit underlying and £3,275.9m) of revenue Group the with (compared continued to the Group the to Provisional fair value fair (156.4) 301.3 145.2 260.6 260.6 (68.6) (11.5) (94.0) (19.1) (40.7) 32.2 49.3 76.7 (2.3) 0.4 7.4 £m asset for sale. sale. asset for an as held is KCL date sheet balance the at aresult As parties. interested with ongoing are negotiations and date sheet balance the of months 12 within KCL of dispose to decided Group the June, 30 before but 2015 19 June on acquisition the to Subsequent Total consideration Deemed consideration consideration Cash Satisifed by: acquired Total assets Goodwill Borrowings liabilities Current bank at Cash assets Current assets Non-current acquisition: at liabilities and assets of values fair Provisional disposal deemed on Gain investment of Cost Deemed consideration follows: as calculated is venture joint the of disposal deemed on gain The venture. joint the of disposal deemed the on arose £3.8m of Again asubsidiary. of acquisition subsequent and (see below) venture ajoint of disposal adeemed as treated been has transaction This (‘KCL’). Limited (Catterick) Kier renamed entity the and £4.5m, for partner venture joint the from acquired was LCL of capital share the of 50% remaining The holding. a50% had Group the which of venture ajoint as held (‘LCL’). been Limited previously had LCL (Catterick) Lingfield of capital share the of 100% acquired Limited, Developments Property Kier subsidiary its through Group, the 2015 19 June On of (Catterick) Lingfield Limited asubsidiary as acquisition subsequent and venture joint in investment of (c) disposal Deemed carrying value carrying at acquisition Provisional (14.2) 16.7 (3.3) (0.7) 4.5 4.5 4.5 0.3 0.5 9.0 9.0 3.8 9.0 9.0 £m £m – 159 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 160 Kier Group plc Annual Report and Accounts 2015 Cash consideration Cash Satisfied by: acquired Total assets Goodwill payables other and Trade receivables other and Trade Inventories acquisition: at liabilities and assets of values fair Provisional 2015. April in cash in paid wholly was acquired assets net the of value fair the representing £1.0m of consideration The Limited. Southdale of operations construction and housing the of business the and assets certain acquired Limited, Living Kier subsidiary its through Group, the 2015 April 29 On Limited Southdale of assets and trade of (d) Acquisition continued disposals and Acquisitions 30 For year 30 the June 2015 ended statements Notes financial consolidated to the The disposal proceeds can be reconciled to the profit on disposal as follows: as disposal on profit the to reconciled be can proceeds disposal The business. of course underlying the in are which trading underlying be to vehicles such of disposals considers Group the and transactions, structure to ventures joint uses typically division Property The Resources (Oldham) Limited. Information and Limited Holdings (Oldham) Resources (30c)), (see note Information Limited (Catterick) Lingfield ventures: joint following the in investments its sold also Limited, Investment Project Kier and Limited Developments Kier subsidiaries its through Group, The Rail. Network with partnership in development for considered be to continue will projects future and arrangement funding guaranteed existing the under forward taken be to continue will projects Existing £10.0m. of consideration acash for (GP) Limited Regeneration Solum and Partnership Limited Regeneration Solum in interests its of disposed Limited, NR Kier subsidiary its through Group, the year the During ventures joint in investments of (e) Disposal after disposal costs of £3.4m were incurred in the current financial year and were expensed to the income statement as income the to incurred. expensed were and year financial current the in incurred were £3.4m of costs disposal after £2.2m, disposal of on loss £17.9m, overall for an to rise Limited giving FPS Kier in investment its sold Group the 2015 1July On events 31 Subsequent ventures joint to loans and assets net of value Book Sales proceeds and deemed consideration Profit on disposal on Profit Sale costs assets Intangible continued 2015 14.8 18.7 (1.2) (0.3) (2.4) £m carrying value carrying to the Group the to Provisional 2014 17.3 (1.5) (1.8) (9.4) 0.8 1.1 6.1 0.6 1.0 1.0 0.2 £m £m – behalf by: its on signed were and 2015 16 on September directors of Board the by approved 161 were 163 to pages on statements financial The Total funds shareholders’ account loss and Profit Capital redemption reserve reserve Merger Share premium Share capital funds Shareholders’ Net assets Net current assets year one within due falling –amounts Creditors liabilities Current equivalents cash and Cash Debtors assets Current undertakings subsidiary from due Amounts Director year one than more after due falling –amounts Creditors liabilities Non-current liabilities current less Total assets inInvestments subsidiaries Fixed assets 2708030) number company (registered At 30 June 2015 sheet Company balance Mursell Haydn

Director Bev Dew Notes 10 9 9 9 9 8 7 6 7 5 1,121.7 (394.8) 408.5 134.8 165.3 732.3 251.0 248.0 224.1 726.9 726.9 179.9 897.6 (26.9) 2015 2015 1.0 3.0 2.7 £m (195.4) 384.2 384.2 384.2 184.8 160.3 130.6 514.8 319.4 156.7 319.4 (29.7) 2014 73.7 57.6 3.6 0.6 2.7 £m – 161 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 162 Kier Group plc Annual Report and Accounts 2015 1 2014 June 30 2015 June 30 at value book Net 2015 June 30 At Disposals 2014 June 30 at Cost –investments 5 Fixed assets statements. financial consolidated 10 the to note in included are Company the by paid dividends the of Details 4 Dividends directors. the than other employees no has Company The 106. to 84 pages on report remuneration directors’ the in appears LTIP interests and options share entitlements, pension emoluments, directors’ to relating Information employees and directors to relating 3 Information £0.1m (2014: was £0.1m). Company the to services audit for remuneration auditor’s The year. the for account loss and profit own its present to not elected has Company the 2006, Act Companies the of 408 section by permitted As year the for 2 Profit Company. the for disclosures instrument financial separate present to requirement the from FRS29 in exemptions certain of advantage taken has Company the Disclosures’. Consequently, and Instruments ‘Financial FRS29 with comply which IFRS7 27 under note in disclosures include statements financial consolidated The cost. amortised at subsequently and value fair at initially recognised are Borrowings value. nominal at sheet balance the in carried is bank at Cash borrowings. and bank at cash are liabilities and assets financial principal Company’s The Financial instruments vest. eventually will that shares of estimate the on based period, vesting the over basis astraight-line on expressed is grant of date the at schemes these of value fair The LTIP schemes. and Sharesave the under payments share-based equity-settled issues Company The payments Share-based account. loss and profit the in funds shareholders’ in areduction as shown is plans, option share Company’s the funding of purpose the Trust for Benefit Employee 1999 Group Kier the by held shares comprises which shares, own its in investment Company’s the of cost The shares Own purposes. accounts and taxation for computed profits between differences timing of respect in rates tax corporation future expected at basis anon-discounted on and fully provided is Tax’, taxation ‘Deferred deferred FRS19 with accordance In Deferred taxation value. in diminution for provision any less cost at sheet balance the in included are undertakings subsidiary in Investments investments asset Fixed 2006. Act Companies the and standards accounting applicable with accordance in and basis concern going the on convention, cost historical the under prepared been have statements financial The preparation of Basis material. considered are which items with dealing in consistently applied been have policies accounting following The 1 Accounting policies For year 30 the June 2015 ended Notes statements Company to financial the

The Group restructured its ownership of Kier MGIS Limited selling its interest to Kier Limited for book value (see note 9). (see note value book for Limited Kier to interest its selling Limited MGIS Kier of ownership its restructured Group The ­ (218.9) 384.2 384.2 165.3 165.3 £m

1 in note 25 to the consolidated financial statements. statements. financial consolidated the to in note 25 included are schemes payment share-based the of Trust and Benefit Employee 1999 Group Kier the by held shares the of Details £7.4m of (2014: reserve £7.3m).of £3.7m sharescheme the (2014: on £4.7m) balance acredit shares and own in investment the comprises which reserve sharescheme the on balance the is account loss and profit the in Included 1 At 30 June 2015 June 30 At shares own of Issue 2013 June 30 At Purchase of own shares own of Purchase payments Share-based Transfers shares own of Issue paid Dividends year the for Profit 2014 June 30 At paid Dividends year the for Profit shares own of Purchase payments share-based for provision in Movement follows: as is reserves in movement The 9 Reserves statements. financial consolidated 24 the to note in included are Company the of capital share the of Details capital 8 Share Other creditors tax Corporation undertakings subsidiary to due Amounts year: one within due falling Amounts 7 Creditors Deferred tax debtors Other 6 Debtors

Borrowings year: one than more after due falling Amounts Further details on borrowings are included in note 27 to the consolidated financial statements. financial consolidated 27 the to note in included are borrowings on details Further

and entered into a long-term loan for the balance of consideration. As a consequence £50m of the merger reserve was transferred to to retained earnings. transferred was reserve merger the of £50m aconsequence As consideration. of balance the for loan along-term into and entered cash free from £50.0m paid was it which for loss, profit anil for Limited Kier to Limited MGIS Kier of ownership its restructured Group The Share capital capital Share 0.2 0.4 0.4 0.6 £m 1.0 – – – – – – – – – premium 334.8 408.5 Share Share 63.3 10.4 73.7 £m – – – – – – – – – reserve reserve Merger 184.8 183.6 134.8 (50.0) 1.2 £m – – – – – – – – – 1 redemption reserve reserve Capital £m 2.7 2.7 2.7 – – – – – – – – – – – and loss loss and account account 394.8 109.8 179.9 Profit Profit (40.2) 2015 2015 (37.3) 23.2 26.9 38.5 53.8 50.0 57.6 £m (1.1) (0.7) 1.1 1.4 1.6 2.6 3.0 3.4 £m £m 3.7 – – 1 195.4 335.2 194.2 106.1 109.8 726.9 319.4 2014 2014 (40.2) (37.3) 29.7 Total 27.8 53.8 £m £m (1.1) (0.7) 1.2 1.0 3.6 2.6 0.7 £m 3.4 3.7 – 163 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 164 Kier Group plc Annual Report and Accounts 2015 Corporate Residential Property Services Construction Wales. and England in incorporated and owned are wholly undertakings these otherwise, indicated Unless below. listed are 2015 June 30 at as statements financial consolidated in the included units business and subsidiaries operating principal The units business and subsidiaries Principal operating Gurney May Kier Plant Management and Fleet Mouchel Kier Limited Kier Partnership Homes Limited Kier Living Limited Limited Investment Project Kier Kier Ventures Limited Limited Developments Kier Kier Property Limited Management Insurance Solutions Energy Management Asset Environmental Management Facilities Maintenance Housing Kier Services Limited Limited Overseas and Infrastructure Kier Engineering Specialist businesses Southern Scotland Northern London Eastern Central Building Kier Construction Limited

Kier FPS Limited (sold July 2015) (sold July Limited FPS Kier Limited CIC Recycling MG Kier Limited Estates MG Kier Limited MG Kier Limited MGIS Kier Limited Services Fleet Kier Limited Plant Kier MRBL Limited (80.01%) Limited Tor2 EM Highways Services Limited Services Highways EM Mouchel Limited Tempsford Company Limited Insurance Limited Services Management Kier Insurance Limited Solutions Energy Kier Limited Services Partnership Asset Kier Limited Warwick Recycling Pure Pure Buildings Limited Limited Services Facilities Kier Kier Harlow Limited Harlow Kier Process & Engineering Alliances and Frameworks Strategic &Wales Western Major Projects Kier Sheffield LLP Sheffield Kier Kier Stoke Limited Stoke Kier Kier Islington Limited Islington Kier Kier North Tyneside Limited Tyneside North Kier (incorporated in(incorporated Guernsey)

4

2 2

(40%) (80.1%) 2

(80%)

2 (80%)

4

Hedra Scotland Limited Hedra Group Limited Limited Company Management (Thetford) Heatherwood Limited Management Facilities HBS Greenfinch Limited (50%) Limited Genica Limited 300 Gas Limited Services Educational Circle Full Limited (Holdings) FDT FDT Contracts Limited Limited Associates FDT Engineered Products Limited (52%) Limited Lambeth Engage Limited Company Management Bourne Park Elsea Limited ECT Engineering Dudley Coles Limited (50%) Limited Pty Services Australia) in (incorporated DownerMouchel Limited Company Management Road Mill Cowley Limited Management Project Coombe Constantine Place (Longstanton) Management Company Limited Limited 21Community Connect Limited Company Management Bath Concordia Clearbox Limited IntegratedCaxton Holdings Services Limited Caribbean Construction Company Limited Limited Company &Construction Building Brazier Construction Limited Bellwinch Limited Bellwinch Homes (Western) Limited Bellwinch Homes Limited Limited Company Asphalte Ayton Limited Engineers Odlin Consulting Atkins Allison Homes Eastern Limited AK Student Living Limited (50%) Limited &Son A CChesters Limited Swindon Absolute Limited Property Absolute Limited Forbury Absolute Limited 2020 Wirral 2020 Helens Limited St Limited 2020 Sefton Limited 2020 Oldham 2020 Liverpool Limited Limited 2020 Knowsley Other subsidiaries 4 3 2 1 Notes:

Kier Construction Limited (incorporated in St Kitts) St in (incorporated Limited Construction Kier Limited UKSC Commercial Kier Limited Investments Commercial Kier Limited CB Kier Limited (Catterick) Kier Limited &Industrial Caribbean Kier Limited BusinessKier Services Limited Building Kier Kier Build Limited Kier Benefits Limited Limited Suffolk) and (Norfolk Services Support Justice Limited Holdings Suffolk) and (Norfolk Services Support Justice Limited (London) &Company J LKier Limited &Company J LKier Javelin Construction Company Limited Limited MP Consultants Instal IEI Limited JonesHenry Limited JonesHenry Construction Limited

(incorporated in Jamaica) (incorporated (incorporated in Scotland) (incorporated Limited, Kier Sheffield LLP and Kier Stoke Limited. Stoke Kier and LLP Sheffield Kier Limited, Tyneside North Kier Limited, Harlow Kier of profits the share of aminority receive and interest ownership have a participating councils respective the whereby Council City Stoke-on-Trent and Council City Sheffield Council, Tyneside North Council, Harlow with agreements partnership into entered has Group The Carribean. the and East Middle the Kong, Hong in operates also Limited Overseas and Infrastructure Kier otherwise. indicated unless Kingdom, United the within principally operates entity Each Shares held directly by Kier Group plc. Group Kier by directly held Shares otherwise. indicated unless plc Group Kier by indirectly held and owned wholly is entities all of capital share ordinary The

Mouchel Parkman Ewan Services Limited Services Ewan Parkman Mouchel Limited Associates Ewan Parkman Mouchel Kong) Hong in (incorporated (99%) Limited East Middle Mouchel Limited Consulting Management Mouchel Ireland Ltd Mouchel Mouchel International Limited Mouchel International (Jersey) Ltd (99.99%) Ltd Insurance Mouchel Mouchel Holdings Limited Limited 302 Gas Mouchel Limited 301 Gas Mouchel Mouchel Finance Limited Limited Holdings &Treasury Finance Mouchel Mouchel Ewan Limited in India) (incorporated Limited Private Consultants Engineering Mouchel Limited Holdings Dormant Mouchel Limited Southern Construction Moss Limited Northern Construction Moss Limited Morrell-Ixworth Limited Resourcing MKB Michco 210 Limited Limited Essex MGWSP Limited Club Social Gurney May Limited Company Management Park Mayflower Limited Marriott Liferange Limited Limited &Wilson Lazenby Limited Aspects Land (65%) Limited (PSP) Partnership Learning Lambeth Limited Hotel Docklands KM Limited Place Whitehall Kier Limited UKSC Ventures Kier Inc USA Kier LLP UKSC Kier Limited Thurrock Kier Limited Southern Kier Limited East South Kier Limited Scotland Kier Limited (Kent) PSP Kier Limited Company Management Property Kier Limited Developments Property Kier Limited ProfessionalKier Services (Two) Limited Overseas Kier (Twenty-Three) Overseas Kier Limited Limited (Twenty-Four) Overseas Kier Limited (Twelve) Overseas Kier Limited (Six) Overseas Kier Limited (Seventeen) Overseas Kier Limited (Nineteen) Overseas Kier Limited (Nine) Overseas Kier Limited (Fourteen) Overseas Kier Limited (Four) Overseas Kier Limited (Fifteen) Overseas Kier Limited (NR) Kier Limited East North Kier Limited National Kier Limited Mortimer Kier Limited Investments Mining Kier Limited Minerals Kier Midlands Limited Kier Limited Trustees MG Kier Limited Services) (Technical MG Kier Limited (Regional) MG Kier Limited Group MG Kier Limited Building MG Kier Kier London Limited Kier Living Limited Limited Land Kier Limited PSP (Kent) Kier Limited Development Jamaica Kier Kier International SRL Kier International Limited (Investments) International Kier Limited Kier Limited Homes Northern Kier Homes Caledonia Limited Trustees Group Kier Limited Limited Trustees AESOP Group Kier Limited Services Engineering Kier Kier ConstructionSA (incorporated in Ireland) (incorporated in Jersey) (incorporated in Guernsey) (incorporated in Scotland) (incorporated in Romania) (incorporated in Haiti) (incorporated 4 4 4 Tempsford Holdings Limited Holdings Tempsford Tempsford Cedars Limited T Cartledge Limited Limited Company Management Walstan’s St Power (Harlow) Limited Social Power Limited (Harlow) Holdings Social SchoolsSheff Topco Limited TrusteesSenturion Limited (MidCo) Limited Senturion Limited Group Senturion (BidCo) Limited Senturion Limited Company Management Property Seaspray Limited Management Place Sea Saxonwood Bardney Management Company Limited Limited Construction Kier Saudi Limited Group Marriott Robert Riley Builders Limited 2Limited Ridham Prospect Healthcare (Ipswich) Limited Limited Holdings (Ipswich) Healthcare Prospect P Limited Holdings PCE Limited East South Parkman in Scotland) (incorporated Parkman Scotland Limited in Nigeria) (incorporated Limited Nigeria Parkman in Kenya) (incorporated Kenya Limited Parkman Parkman Holdings Limited Limited Services Professional Group Parkman Engineers Consulting Parkman Limited Consultants Parkman in Botswana) (incorporated (99%) Limited (Pty) Botswana Parkman Limited Services Recycling Community Norfolk Limited Learning New Limited &Co King Newbury Limited MPHBS TrusteeMouchel Limited Limited Support Traffic Mouchel Africa) South in (incorporated (49%) Limited Pty Africa South Mouchel 3Limited No. Rail Mouchel 2Limited No. Rail Mouchel Mouchel Rail Limited Ltd Pty Mouchel Limited Mouchel Parkman Serviways Limited Serviservices Parkman Mouchel Limited Projects Construction ServiRail Parkman Mouchel Limited Mouchel Parkman Servigroup Limited Management Property Parkman Mouchel Limited (NI) Parkman Mouchel Limited Metro Parkman Mouchel Limited LDA Parkman Mouchel Limited GB Parkman Mouchel Wygate ManagementWygate Company Limited Limited William Group Moss Limited Engineering Civil Moss William Limited (Construction) W &CFrench Limited Western Wallis Limited Wallis Limited Builders Wallis Limited Usherlink in Scotland) (incorporated Limited Moling Services Underground Twigden Homes Southern Limited Twigden Homes Limited Limited Services Smart Turriff Limited Group Turriff Turriff Contractors Limited Tudor Homes (East Anglia) Limited Limited EBT Support Traffic Limited T JBrent Limited T HConstruction Tempsford Oaks Limited (incorporated in Saudi Arabia) Saudi in (incorporated (incorporated in Australia) (incorporated (incorporated in Scotland) (incorporated in Scotland) (incorporated in Scotland) (incorporated FI Street Lighting Limited Limited Lighting Street 4 4 165 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 166 Kier Group plc Annual Report and Accounts 2015 Lysander Student Properties Limited Lysander Properties Student Lysander Student Properties Investments Limited Investments Lysander Properties Student Kier Warth Limited Warth Kier LLP City Trade Kier 2LLP Holdco City Trade Kier 1LLP Holdco City Trade Kier Kier Sydenham Nominee Limited Nominee Sydenham Kier Kier Sydenham LP Sydenham Kier Limited GP Sydenham Kier Kier Sydenham Limited Sydenham Kier Kier Sydenham GP Holdco Limited Holdco GP Sydenham Kier 2LLP Holdco Reading Kier 1LLP Holdco Reading Kier Kier Hammersmith Limited Kier Hammersmith Holdco Limited LLP Street Foley Kier 2LLP Holdco Street Foley Kier 1LLP Holdco Street Foley Kier 1Limited LEP Kent LP 1B UK Fore Dragon Lane Holdings 2LLP Holdings Lane Dragon Dragon Lane Holdings 1LLP Holdings Lane Dragon Biogen Waen Limited Biogen (UK) Limited Vinci Mouchel Limited Limited Partnership Unity The Limited Borough) (Rochdale Partnership Impact The Limited Oord Team Van Limited Defence Coastal Pevensey Biogen Holdings Limited Biogen Holdings Biogen Gwyriad Limited Biogen Gwyriad Alliance Community Partnership Limited Network Information Services Limited Services Information Network Mouchel IRE Limited incorp. in Ukraine in incorp. Limited IRE Mouchel Limited Services Education Babcock Mouchel LLP Square 3 Sovereign Mouchel Babcock Education Investments Limited Limited Investments Education Babcock Mouchel 3 Sovereign Square Holdings 2LLP Holdings Square 3 Sovereign UK Principal joint operations Hinkley Point C Hercules Deephams 501/511 Contracts Crossrail South Hook Gateway Mersey Plus KMI KMI WSP Kier KCD 300/410/435 Contracts Crossrail Hackney Schools for the Future Limited Services 1LLP Holdings Square 3 Sovereign Property Joint ventures Principal joint arrangements (incorporated in Scotland) Overseas Limited and BAM Nuttall Limited and a Kier Infrastructure joint between arrangement Beatty Balfour and Limited Living Kier Limited, Construction Kier between arrangement a joint Aecom Limited and Limited, &Sons JMurphy Limited, Overseas and a Kier Infrastructure joint between arrangement Overseas Limited and BAM Nuttall Limited and a Kier Infrastructure joint between arrangement Overseas Limited and NV Besix SA Besix NV and Limited Overseas and a Kier Infrastructure joint between arrangement S.A. FCC Construccion and Limited C&T ECUK Samsung Limited, Overseas and a Kier Infrastructure joint between arrangement Limited Mouchel and Limited Services Project Interserve Limited, &Sons JMurphy Limited, Overseas and a Kier Infrastructure joint between arrangement Limited Services Project Interserve and Limited &Sons JMurphy Limited, Overseas and a Kier Infrastructure joint between arrangement WSP UK Limited and Limited MG Kier between arrangement a joint Limited Clancy Docwra and Limited MG Kier between arrangement a joint Limited (UK) Agroman Ferrovial and Limited Nuttall BAM Limited, Overseas and a Kier Infrastructure joint between arrangement

Interest held Interest 27.5% 90% 90% 90% 50% 50% 90% 90% 50% 50% 90% 90% 90% 50% 50% 50% 50% 80% 50% 50% 50% 80% 50% 40% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 29% 26% 10% 67% 25% 6% Salford Village Limited Village Salford Evolution (Woking) Limited Evolution (Woking) Evolution (Woking) Holdings Limited Holdings Evolution (Woking) Blue 3 (Staffs) Limited 3(Staffs) Blue Limited (Holdings) 3(Staffs) Blue Limited 3(London) Blue Limited (Holdings) 3(London) Blue Long-term concession holdings under the Private Finance Initiative Finance Private the under holdings concession Long-term Watford Health Campus Partnership LLP Partnership Campus Health Watford Tri-Link 140 Holdings 2LLP Holdings 140 Tri-Link Tri-Link 140 Holdings 1LLP Holdings 140 Tri-Link Limited Transcend Property Staffordshire Property Partnership Joint Venture Limited Partnership Property Staffordshire Solum Regeneration (Wembley) LLP (Wembley) Regeneration Solum Solum Regeneration (Twickenham) LLP (Twickenham) Regeneration Solum Solum Regeneration (Tonbridge) LLP LLP (Tanner) Regeneration Solum Solum Regeneration (Surbiton) LLP (Surbiton) Regeneration Solum LLP (Redhill) Regeneration Solum Solum Regeneration (Maidstone) LLP Solum Regeneration (Kingswood) LLP (Kingswood) Regeneration Solum Solum Regeneration (Haywards)Solum LLP Regeneration Solum Regeneration (Guildford) LLP (Guildford) Regeneration Solum Solum Regeneration Epsom (Residential) LLP (Residential) Epsom Regeneration Solum Saudi Comedat Company Limited Limited Defence Graham Kier LLC Dubai Kier Kier Construction LLC Rathenraw Limited Rathenraw Solum Regeneration (Epsom)Solum Regeneration Limited Partnership Solum Regeneration Epsom (GP) Limited (GP) Epsom Regeneration Solum Limited Subsidiary) (GP Epsom Regeneration Solum Kier ASGC JV ASGC Kier (Bishops)Solum Regeneration LLP Besix-Kier Dabhol Société anonyme Dabhol Besix-Kier Premier Inn Kier Limited Kier Inn Premier ASK Joint Venture Lysander Student Properties Operations Limited Operations Properties Student Lysander Construction MTRC Contract 901 MTRC Contract 824 30% and 65%, operate overseas in the territory indicated: territory the in overseas operate 65%, 30% and between is participation Group the which in operations, joint following The 4 3 2 1 Notes: International

are still considered joint ventures as the Group still has joint control. has joint still Group the as ventures joint considered still are of 50% excess in interest an has Group the where ventures joint The undertakings. subsidiary by held are ventures joint above the in Interests Kingdom. United the in and operate incorporated are companies the stated otherwise where Except own trade. on their carrying businesses ongoing are ventures Joint business. existing Group’s the of extension an is which project a specific on co-operate to agreements contracted are operations Joint and Kaden Construction Limited Construction and Kaden Limited Kong Hong O’Rourke Laing Limited, Overseas and a Kier Infrastructure joint between arrangement S.A. Obras Subterráneas and Limited Construction Kaden Limited, Overseas and a Kier Infrastructure joint between arrangement Saudi Arabia in incorporated UAE in incorporated Abu Dhabi in incorporated incorporated in UAE in incorporated incorporated inincorporated Belgium incorporated in UAE in incorporated Interest held Interest 80% 80% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 40% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 49% 49% 49% 25% 25%

Underlying basic earnings per share per earnings basic Underlying tax before Profit Dividend per share per Dividend Other non-underlying items non-underlying Other Non-underlying finance costs finance Non-underlying rights contract to relating assets intangible of Amortisation Profit on disposal of joint ventures joint of disposal on Profit Revenue: Group and share of joint ventures joint of share and Group Revenue: June 30 Year ended Continuing operations (unaudited) record Financial Group operating profit operating Group Profit 3 2 1 Underlying profit before tax Underlying netUnderlying finance costs Net assets per share Net assets (£m) funds Shareholders’ June 30 At Share of post-tax results of joint ventures joint of results post-tax of Share Underlying operating profit Less share of joint ventures joint of share Less Group revenue Group

Restated to reflect the impact of discontinued operations (see note 19 to the consolidated financial statements). financial consolidated the to 19 (see note operations discontinued of impact the reflect to Restated consolidated financial statements). 24 the to (see note transaction Mouchel the with associated issue rights the of element bonus the of impact the reflect to Restated statements). financial consolidated the 4to (see note items non-underlying before Stated 2 2 1 1 1 1 1,2 3,351.2 3,275.9 615.2p 585.4 103.7 (11.2) (75.3) (31.6) 2015 (17.8) 55.2p 96.0p 85.9 81.0 14.8 39.5 (3.6) £m 7.9 2,906.9 2,937.8 309.7 47.8p 4 (30.9) (13.6) (42.2) (10.8) 2014 15.4 79.6 73.7 87.5p 87.3 57.6p (5.3) 1.6 6.1 £m 3 1,958.3 1,918.5 158.3 317.5p (39.8) 2013 (17.0) 54.3p 45.9 78.9p 24.2 52.6 41.9 (1.3) (3.4) (6.7) 9.8 0.9 £m 3 2,000.3 2,039.0 154.2 107.4p 317.4p (38.7) 2012 58.3 60.8 52.8 49.0 52.7p (2.5) (2.3) (3.6) (3.4) 1.3 6.7 £m 3 2,084.3 2,140.1 343.8p 164.2 (55.8) 2011 50.2 56.5 52.5 91.4p 51.1p 55.7 (3.4) (0.4) (4.0) 5.9 0.4 7.0 £m 3 167 Kier Group plc Annual Report and Accounts 2015 Strategic Report 1–59 Governance Report 60–111 Financial Statements 112–168 168 Kier Group plc Annual Report and Accounts 2015 final dividend for year ending 30 June 2016 June 30 ending for year dividend final and results full-year preliminary of Announcement 2016 September 2016 June 30 ending year for dividend interim of Payment 2016 May 2016 June 30 year ending ofAnnouncement results half-year and interim dividend for March 2016 2015 June 30 ended year for dividend final of Payment 2015 27 November meeting general Annual 2015 November 12 Financial calendar England 2708030 Registered number SG19 2BD Bedfordshire Sandy Hall Tempsford plc Group Kier office registered and Headquarters H ERaven Secretary CBE N PWinser A JMellor A KBashforth R CBailey C Veritiero N ATurner N PBrook B EJDew H JMursell CBE P MWhite Board of directors Corporate information Corporate

EC2M 4RB EC2M London 280 Bishopsgate PLC Scotland of Bank Royal The NW1 3AN London Regent’s Place 2 Triton Square plc UK Santander 2GA MK9 Keynes Milton Boulevard 321 Avebury House Metropolitan plc Bank HSBC EC2V 7AE London Street 10 Gresham plc Group Banking Lloyds 5HP E14 London Place 1 Churchill plc Bank Barclays Principal bankers 6RH WC2N London Place 1 Embankment LLP PricewaterhouseCoopers Auditor EC4M 7LT EC4M London 10 Square Paternoster Numis Securities Limited 6DA EC2R London 20 Moorgate J. P. Cazenove Morgan advisers Financial 0LA HD8 YorkshireWest Huddersfield Bridge Fenay Park Woodsome House Northern Services Asset Capita Registrars www.kier.co.uk

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Printed on Amadeus Primo Silk which is produced using Credits: wood fibre from fully responsible forests with FSC® Page 45 – Crossrail Ltd certification. All pulps used are Elemental Chlorine Free Page 46 – Hufton+Crow (Photographer), (ECF). The manufacturing mill holds the ISO 14001 and Bennetts Associates (Architects) EU Ecolabel certificates for environmental management. Page 51 – Thames Water Page 53 – iStock.com/_ultraforma Consultancy, design and production by Luminous www.luminous.co.uk Kier Group plc Annual Report and Accounts 2015 Kier Group plc Sandy Hall, Tempsford Bedfordshire SG19 2BD 01767 355000 Tel: www.kier.co.uk