Derwent London plc (DLN) 2012年年度報告「LSE」.pdf

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1、Derwent London plcReport&Accounts 2012Who We are 1overvieW 2What we do 4Where we are 6Financial highlights 8Key achievements 12Chairmans statement 14Our market 18Strategy 20Business model 22Business strategy 24Key performance indicators and metrics 26Risk management 30Performance 34Property review 3

2、6 Valuation 36 Portfolio management 38 Investment activity 42 Projects 44Consistent delivery 48Development pipeline 50Finance review 54SuStainability 62Our approach 65Our performance 66Our carbon footprint 67Resource efficiency 68Engaging with the community and employees 70Our 2013 targets 73corPora

3、te governance 74Board of Directors 76Statement of Directors responsibilities 78Directors report 79Letter from the Chairman of the Remuneration Committee 88Report of the Remuneration Committee 89Letter from the Chairman of the Nominations Committee 100Report of the Nominations Committee 101Letter fro

4、m the Chairman of the Risk Committee 102Report of the Risk Committee 103Letter from the Chairman of the Audit Committee 104Report of the Audit Committee 105Independent Auditors report 106financial StatementS 108Group income statement 110Group statement of comprehensive income 111Balance sheets 112St

5、atements of changes in equity 113Cash flow statements 114Notes to the financial statements 115Principal properties 148List of definitions 150Five-year summary 152Financial calendar and advisors IBCFRoNT covER imAgEMiesian column at 4&10 Pentonville Road N1ovERviEW 2SuSTAiNAbiLiTy 62STRATEgy 20coRpoR

6、ATE 74 govERNANcE pERFoRmANcE 34FiNANciAL 108 STATEmENTSiN ThiS REpoRTThroughout the report we have used the icons below to help navigate to further informationLinks to pages within this report1Derwent London plc Report&Accounts 2012Derwent London owns a portfolio of 5.4 million sq ft(505,800m2)of c

7、ommercial real estate predominantly in central London,making us the largest London-focused real estate investment trust(REIT).Our experienced team has a proven record of value creation through development,refurbishment and asset management activities.We take a fresh approach to each building,adoptin

8、g a design-led and tenant-led philosophy.We focus on buildings with reversionary mid-market rents,particularly those in improving locations around the West End and the City borders.The business is grounded on a strong balance sheet with modest leverage,a robust income stream and flexible financing.C

9、reating tomorrows space todayOVERVIEW4OverviewWHAT WE DOp44p427.3%increase in underlying valuation 495,000SQ FTunder development or refurbishment at year end Our ethos has always been distinctive and design-led.Our speciality is to acquire well-located central London properties with potential and re

10、generate them to provide good value,high-quality offices.Our principal objectiveTo deliver above average long-term returns to shareholders by providing well-designed and affordable offices in central London.Creating well-designed officespaceTransforming commercial properties through high-quality des

11、ign creating flexible,contemporary spaces for our tenants andthe local community.Business modelThe Group acquires properties with potential,creates well-designed office space and helps to revitalise neighbourhoods.We invest in central London excluding the City core.The majority of the portfolio is i

12、ncome-producing with a reversionary rental profile.The Group applies detailed knowledge of occupiers needs to attract a wide range of strong tenants.Properties with limited future growth are earmarked for disposal,thereby recycling capital.Our business is supported by robust and flexible financing w

13、ith modest leverage and comfortable interest cover.Achievements in 2012 Completed refurbishment of 4&10 Pentonville Road N1 Commenced redevelopment of Turnmill EC1 and 40 Chancery Lane WC2 Received planning permission on 655,000 sq ft(60,850m2)495,000 sq ft(46,000m2)under development or refurbishmen

14、t at year endFocus for 2013 Complete the regeneration of:BuckleyBuilding EC1 Morelands Buildings EC1 1PageStreet SW1 Phase 1,1-2Stephen Street W1 Commence projects at:Queens,Bishops Bridge Road W2 73Charlotte Street W1 80CharlotteStreet W1 Planned capital expenditure of 127m Advance existing and fut

15、ure projectsWe do this by:Acquiring properties and unlocking theirpotentialPurchasing buildings in London with the scope forimprovement or regeneration.Unlocking potential through restructuring leases.Achievements in 2012 Acquired Francis House SW1,9and 16 Prescot Street E1 and 25 and 29 Berners Str

16、eet W1 for 90m Restructured ownership interests at 40 Chancery Lane WC2 Established joint venture with Grosvenor at1-5 Grosvenor Place SW1:150-year lease unlocks redevelopmentopportunityFocus for 2013 Add selectively to the portfolio Restructure leases to enable redevelopmentPrevious spread:4&10 Pen

17、tonville Road N1Derwent London plc Report&Accounts 20125p38p43p581.6%year end EPRA vacancy rate161mproperty sales30%loan-to-value ratioOptimising incomeEmploying our detailed knowledge of occupiers needs to let to strong tenants from a wide range of businesses.Achievements in 2012 Concluded 13.3m le

18、ttings on 340,300sq ft(31,610m2),including 127,000 sq ft(11,800m2)pre-let to Burberry Maintained low vacancy rate throughout year Regeared leases with Telecity and SagePublications at 1 Olivers Yard EC2 Regeared lease with Arup at 8FitzroyStreet W1Focus for 2013 Letting campaign at the Buckley Build

19、ing EC1 Pre-letting campaign on WhiteCollarFactory,City Road EC1 Continue to manage vacancy rate Monitor portfolio for further asset management initiativesRecycling capitalIdentifying properties for disposal where value has been optimised and disposing of those which do not fit into the Groups long

20、term plans.Achievements in 2012 Raised 161m from the sale of:Riverwalk House and 232-242 Vauxhall Bridge Road SW1 Triangle Centre,Bishopbriggs,Scotland 50%interest in 1-5 Grosvenor Place SW1Focus for 2013 Monitor portfolio for further opportunities to recycle capitalMaintaining robust financingMaint

21、aining flexible financing with a comfortable level of interest cover and gearing,enabling us to deliver our development ambitions and to take advantage of suitable acquisitions.Achievements in 2012 Achieved refinancing targets 83m 3.99%12-year loan arranged with Cornerstone Broadened sources of fund

22、ing:around 50%of loans are from non-bank sources Loan-to-value ratio reduced to 30.0%Focus for 2013 Continue to monitor gearing levels with reference to interest cover Refinance 125m facility expiring in 2014 Maintain facility headroom of at least 200mPercentages weighted by valuation Scotland:3%Lad

23、broke Grove:1%King CrossSt Pancras InternationalFarringdonCrossrailLiverpoolStreetLondon BridgeWaterlooVictoriaPaddingtonPaddington1%Holborn5%Baker Street&Marylebone5%Victoria13%Southbank1%Clerkenwell 6%CityCovent Garden/Soho4%Euston1%Fitzrovia37%Mayfair 2%Belgravia 3%Old Street5%Islington/Camden9%S

24、horeditch4%Whitechapel1%6OverviewWHERE WE AREOur portfolio comprises 5.4 million sq ft(505,800m2)of properties valued at 2.9billion.97%of our properties are located in central London,grouped in 18“villages”,each with its own culture and identity.76%can be found in the West End and 21%inthe City bord

25、ers.The balance relates to properties held in Scotland on the northern outskirts of Glasgow.Derwent London plc Report&Accounts 20127129buildings550+tenants2.9bnvaluation of the portfolio119.6mannualised net contracted rental incomeTen principal tenants%of rental income1Arup5.2Burberry4.4Cancer Resea

26、rch UK4.2Saatchi&Saatchi3.5Government3.2FremantleMedia Group3.1MWB Business Exchange2.6Thomson Reuters2.4Pinsent Masons2.0EDF Energy1.81 Based upon contracted net rental income of 119.6mProfile of tenants business sectors2%Media,TV,marketing and advertising 29Professional and business services 27Ret

27、ail head offices,showrooms 12Retail sales 12Financial 5Charities 5Government and public administration 3Other 7Our portfolioWe own and manage a 5.4 million sq ft(505,800m2)portfolio that was valued at 2.9bn as at 31 December 2012.Of our portfolio,76%is in the West End,in villages such as Fitzrovia,V

28、ictoria and Belgravia.TheCity borders account for 21%and include villages such as Old Street,Clerkenwell,Shoreditch and Whitechapel in“Londons Tech Belt”.The remaining 3%is in Scotland,on the northern outskirts of Glasgow.The portfolio consists of 129 buildings and has over 550 tenants covering a ra

29、nge of business sectors.Media,TV,marketing and advertising tenants account for 29%of our net rental income whilst professional and business services tenants comprise 27%and 12%of our income is from retail head offices.86%of the portfolio is office space,with the balance mostly retail.Our portfolios

30、annualised net contracted rental income at the year end was 119.6m,compared with an estimated rental value of 175.0m,therefore offering strong reversionary potential.With passing rent of 26.04 per sq ft(280 per m2)on our central London office portfolio,rising to 31.18 per sq ft(336 per m2)once“toppe

31、d up”for the expiry of rent free periods and other rental incentives,average rents remain low.Office rent banding “topped-up”income2%0 20 per sq ft 720 30 per sq ft 1430 40 per sq ft 3040 50 per sq ft 3450 60 per sq ft 1260+per sq ft 32 Expressed as a percentage of annualised rental incomeAverage31.

32、18 per sq ft8OverviewFINANCIAL HIGHLIGHTSEPRA MEASuRESEPRA NAV per share1,886p2011:1,701p200820092010201120121,2221,1611,4741,7011,886p55,p125EPRA NNNAV per share1,775p2011:1,607p200820092010201120121,2061,1261,4251,6071,775p125EPRA profit before tax52.5m2011:52.3m2008200920102011201222.261.855.252.

33、352.5p56,p124EPRA earnings per share50.36p2011:51.59p2008200920102011201221.7457.1452.8951.5950.36p56,p124Derwent London plc Report&Accounts 20129EPRA net initial yield14.3%2011:4.4%200920082010201120125.75.54.74.44.3p37,p126EPRA“topped-up”net initial yield14.8%2011:5.2%20092010201120126.220086.05.3

34、5.24.8p37,p126EPRA vacancy rate1.6%2011:1.3%200820092010201120123.83.65.91.31.6p41,p1261 Figures for 2008 calculated on a non-EPRA basis,across the whole portfolio10OverviewFINANCIAL HIGHLIGHTSOTHER MEASuRESNet property income117.0m2011:117.7m2008200920102011201295.5114.8113.0117.7117.0p56,p117Inter

35、est cover ratio351%2011:307%20082009201020112012247330328307351p60,p141NAV gearing45.6%2011:50.4%2008200920102011201271.261.959.450.445.6p60,p140Loan-to-value ratio30.0%2011:32.0%2008200920102011201239.736.435.732.030.0p60,p140Derwent London plc Report&Accounts 201211Dividend per share33.70p2011:31.

36、35p2008200920102011201224.5027.0029.0031.3533.70p60,p142Total return12.7%2011:17.4%12.729.317.4(30.6)(2.9)2011201020092008201233.70p26,p142Total shareholder return39.0%2011:2.9%39.02.922.986.7(47.9)20082009201020112012p29,p99Total property return11.6%2011:13.4%2008200920102011201212.64.321.313.411.6

37、p26,p3712OverviewKEY ACHIEVEMENTSIn 2012,we had considerable letting success,added to and progressed our development pipeline and completed a number of key asset and financial management initiatives.FebruaryPlanning consent granted at Queens,96-98 Bishops Bridge Road W2Construction of 16 residential

38、 units and ground floor retail space starts in 2013,retaining the art deco faade.Pre-let to Burberry at 1 Page Street SW1All 127,000 sq ft(11,800m2)was pre-let to Burberry at a rent of 5.3m pa on a 20-year lease.JanuaryRefinanced 300m of bank loans New 150m five-year facilities completed,one with RB

39、S/Barclays and the other with Lloyds Bank,replacing facilities that were to expire in March 2013.MarchBrandOpus pre-let at 1 Stephen Street W115,400 sq ft(1,430m2)pre-let at a rentof 52.50 per sq ft on the ground floor and 21.50 per sq ft on the lower ground floor,part of our phased regeneration pla

40、ns at 1-2Stephen Street.Joint venture with Grosvenor at 1-5 Grosvenor Place SW1A new 150-year lease and 50:50 joint venture agreement signed with Grosvenor.We arenow working towards the redevelopment of this site of over 1.5 acres at Hyde Park Corner.AprilPlanning permission for major mixed use sche

41、me at 1 Oxford Street W1A 275,000 sq ft(25,500m2)scheme to build offices above theTottenham Court Road Crossrail and London Underground stations.JuneTea Building wins RIBA regional awardTo improve the efficiency of the Tea Building E1 a“Green Tea”refurbishment is underway,including double-glazed win

42、dows,high efficiency lighting,roof insulation and a thermal loop to allow energy sharing throughout the building.Derwent London plc Report&Accounts 201213JulyPurchase of Francis House SW1A 57,000 sq ft(5,300m2)freeholdoffice building,adjoining Greencoat&Gordon House and 6-8 Greencoat Place,was purch

43、ased for 30.6m.83m 12-year secured debt facility signedThe new loan with Cornerstone was signed in July and drawn in August,providing long-term fixed rate debt at an attractive rate of 3.99%to October 2024.AugustStart of construction at 40 Chancery Lane WC2Having restructured our interests at Chance

44、ry Lane earlier in 2012 into a 128-year lease,we started construction of 100,000 sq ft(92,900m2)of office space.DecemberPurchase of 25 and 29 BernersStreet W1Long leasehold interests over two buildings totalling 79,500 sq ft(7,390m2)purchased for 36.5m,reflecting a capital value of 460per sq ft(4,95

45、0 per m2).SeptemberPurchase of 9 and 16 Prescot Street E19 and 16 Prescot Street,totalling 111,000 sq ft(10,310m2),were acquired for 23.2m reflecting a low capital value of 209per sq ft(2,250 per m2).OctoberTicketmaster checks in at 4&10 Pentonville Road N1Ticketmaster will occupy 87%of the building

46、 under a 12-year lease in a letting agreed justtwo months after practical completion of this development.Lease regears at 8 Fitzroy Street W1 and 1 Olivers Yard EC28 Fitzroy Street is let to Arup.We replaced five-year upward-onlyreviews with annual stepped increases and will be receiving atleast 80

47、per sq ft by expiry in2033.The Telecity leases at 1 Olivers Yard were extended from five to 25 years and increased the rent from 35 per sq ft on best to 45 per sq ft in 2017,and thereafter the equivalent of 2.5%annual increases.Start of construction at Turnmill EC170,000 sq ft(6,500m2)new build offi

48、ce building across the road from the entrance to Farringdon station.14OverviewCHAIRMANS STATEMENTThe Group achieved a double digit percentage increase in net asset value driven by increasing rents in our markets,asset management activity and progress in our development pipeline.Derwent London plc Re

49、port&Accounts 201215Last year was both a significant year for London and another strong one for Derwent London.The Groups hallmark mid-market office product was in demand,there was excellent progress in the development pipeline,a string of successful planning decisions and the unlocking of value thr

50、ough restructuring of leasehold interests.We added to the portfolio in our core markets,recycled capital and achieved our refinancing targets.This activity added value and we saw an 11%increase in EPRA net asset value per share to 1,886p with the portfolio generating an overall revaluation surplus o

51、f 175.3m.All this was achieved whilst broadly maintaining profits and further strengthening our balance sheet.HighlightsProgress was made across all the Groups business areas:340,300 sq ft(31,610m)of space was let,securing 13.3m of rental income at an average premium of 7.6%to 31 December 2011 ERV,o

52、f which 55%related to pre-lettings of developments.The EPRA vacancy rate of available space at the year end was 1.6%.Six planning consents were secured totalling 655,000 sq ft(60,850m).4&10 Pentonville Road N1 was completed(55,000 sq ft/5,110m)and is 87%let.Asset management initiatives were complete

53、d on 580,000 sq ft(53,900m)providing greater longevity of income and inbuilt rental growth.Principal acquisitions were five properties totalling 247,500 sq ft(23,000m)bought for 90.3m after costs(365 per sq ft/3,930 per m)at an average net initial yield of 4.7%.Disposals raised 161m after costs,gene

54、rating a profit of 6.9m.These included the 50%interest in 1-5 Grosvenor Place SW1 to facilitate future development.The remainder were non-core assets.Our financing retains strength and flexibility.During the year we signed an 83m 3.99%12-year secured loan,further diversifying our sources of finance

55、and increasing our weighted average length of unexpired debt to 6.1 years at the year end.The EPRA net initial yield of the portfolio was 4.3%at 31 December 2012.The EPRA like-for-like net rental income increased over the year by 8.2%.In addition at the year end reversionary income stood at 55.4m pa

56、,38%of which is contracted through the expiry of rent free periods,stepped rents and fixed uplifts.Our marketIn 2012,the eyes of the world were on London,which hosted memorable celebrations for the Queens Diamond Jubilee,the Olympics and the Paralympics.The capital excelled in its time in the spotli

57、ght,demonstrating just what an attractive,welcoming and exciting place it is.It has an effective and improving infrastructure,a diverse and vibrant mix of cultural events and the London economy stands apart from the country as a whole.London is a desirable place in which to live,work and operate bus

58、inesses.Consequently the property investment market in central London continues to flourish with yields remaining firm,supported by high levels of activity.11%increase in EPRA net asset value per share8.2%increase in EPRA like-for-like net rental income7.5%increase in dividend for the year“We are co

59、ntinuing to see new tenants attracted to the space we provide and consider that rents in our markets will continue to rise.”Robert RayneNon-executive Chairman16OverviewCHAIRMANS STATEMENTCONTINuEDDerwent London is an innovator in the regeneration of Londons offices,investing in improving areas in th

60、e West End and City borders and offering tenants great space.This requires well-designed buildings at reasonable rents in the appealing locations of the future such as those close to the Crossrail routes or within“Londons Tech Belt”,an arc stretching between Kings Cross and Whitechapel.Our mid-marke

61、t offices continue to attract tenants with Unilever recently taking 21,100 sq ft(1,960m)at the Buckley Building EC1.We said at the beginning of 2012 that rents would rise,and were pleased to see stronger growth than the 4-5%we had envisaged,with a 6.7%underlying increase in the estimated rental valu

62、e(ERV)and new lettings signed at rents on average 7.6%ahead of December 2011 ERV.Capturing valueThe strength of the occupational market and our robust financing give us the confidence to press ahead with our development pipeline.We completed 4&10 Pentonville Road N1 in August 2012,but still had six

63、major projects underway at the year end totalling 495,000 sq ft(46,000m).During 2013 we are starting work on three additional schemes totalling 422,000 sq ft(39,200m)including our largest project to date,the 385,000 sq ft(35,800m)regeneration of 80 Charlotte Street,Fitzrovia W1.Looking further to th

64、e future,we have over 1.8 million sq ft(169,000m)of exciting projects to start in 2014 and beyond,of which 0.9 million sq ft(86,000m)has planning permission.One of our largest schemes with planning permission is the White Collar Factory at City Road EC1 where we are about to finish a working prototy

65、pe.Marketing presentations begin in April before we move into full scale construction of this office development in the heart of“Londons Tech Belt”on a speculative basis.We have recently signed an option agreement with the freeholder and head leaseholder that provides for a regear of our leasehold i

66、nterest at 55-65 North Wharf Road W2.This will enable us to proceed with the development of 240,000 sq ft(22,300m)of office space under a 999-year lease at this important site in Paddington where we hold a planning consent.Results and dividendDerwent Londons property portfolio increased in value to

67、2.86bn as at 31 December 2012,showing an overall revaluation surplus of 175.3m and an underlying valuation increase of 7.3%during the year,which compares to annual capital growth of 4.1%produced by the IPD Central London Offices Index.Of our valuation increase,4.1%came in the second half of 2012.The

68、 portfolios total property return for the year was 11.6%against 8.8%for IPD.This strong property return contributed to EPRA net asset value per share rising to 1,886p at the year end compared with 1,701p at 31 December 2011 and 1,770p at 30 June 2012.After adding back dividends,the Groups total retu

69、rn for the year was 12.7%.13.3m of lettings concluded6.7%rise in underlying estimated rental values495,000 SQ FTof major projects underwayDerwent London plc Report&Accounts 201217Despite a significant acceleration in development activity during the year,income levels have been broadly maintained,wit

70、h EPRA profit before tax of 52.5m against 52.3m in the previous year.Given dividend cover of 1.5 times and our current outlook,we are recommending a final dividend for the year of 23.75p,an increase of 8.4%,to be paid on 14 June 2013 to shareholders on the register on 10 May 2013.Of this,18.75p will

71、 be paid as a PID under the UK REIT regime and there will be a scrip alternative.The total dividend for the year is therefore 33.70p,an increase of 7.5%on that in 2011.The Groups overall debt position was broadly unchanged with net debt up by only 1.2%over the year to 874.8m.The overall loan-to-valu

72、e ratio at the end of 2012 fell to 30.0%from 32.0%in 2011 and gross interest cover over 2012 has increased to 351%from 307%last year.Following the arrangement of a new 83m 12-year loan in August,around 50%of our current financing is with non-bank sources and we have increased the weighted average un

73、expired duration of debt to 6.1 years.We had substantial undrawn facilities totalling 333m and uncharged properties totalling 624m at the year end giving us the headroom to meet our committed capital expenditure requirements.We do not achieve these results without considerable commitment,skill and h

74、ard work.I would like to thank the Derwent London team,and congratulate them for winning Management Todays Britains Most Admired Property Company award for the third successive year.The BoardWe welcomed Simon Fraser to the Board on 1 September 2012 and believe that his extensive corporate broking an

75、d financial services experience will benefit the Group.Simon Neathercoat retired from the Board on 31 December 2012 after giving 13 years of valuable advice.OutlookLondon is a desirable place in which to operate and invest and this currently shows no signs of changing.Our office brand appeals to a w

76、ide range of tenants from both a design and a price perspective,in particular those from the broad-based TMT world.The increase in rents in our markets in 2012 exceeded our expectations.We believe we shall see rental growth in these markets of 4-6%in 2013 with yields remaining stable.We have an exte

77、nsive and deliverable pipeline of value-creating developments,both for the near term and extending into the future.These are well-located in our core areas and in many cases will benefit substantially from the arrival of Crossrail.In 2013 we aim to make progress in the following areas:Complete 212,0

78、00 sq ft(19,700m)at Buckley Building EC1 and 1 Page Street SW1 which are 70%pre-let overall.Progress construction of 256,000 sq ft(23,790m)at 1-2 Stephen Street W1,40 Chancery Lane WC2 and Turnmill EC1.Commence construction of 422,000 sq ft(39,200m)in three developments including 80 Charlotte Street

79、 W1.Of this space around 20%will be residential,which will enable Derwent London to take advantage of the current high demand for central London residential property.Progress a number of major consented projects,including White Collar Factory EC1,55-65 North Wharf Road W2 and a retail scheme at 18-3

80、0 Tottenham Court Road W1(together 570,000 sq ft/52,910m).Advance the planning of our future value-creating opportunities,including 1-5 Grosvenor Place SW1.Our increased development programme,significant reversionary potential and asset management activities provide a strong foundation for the deliv

81、ery of future value.Low leverage and our focus on interest cover create the financial strength to undertake this development pipeline and to take advantage of new opportunities.These components give us a powerful platform for growth,thereby continuing to provide attractive returns to shareholders.Ro

82、bert A.Rayne Non-executive Chairman 28 February 2013“The performance of the business gives us the confidence both to accelerate our development pipeline and increase the dividend for the year by 7.5%.”Robert RayneNon-executive Chairman18OverviewOuR MARKETThe central London office market,where 97%of

83、Derwent Londons portfolio is located,plays a key role in the success of the capital by providing a home to a wide range of national and international companies.Londons economy is predominantly service-based and accounts for approximately 20%of national output.It remained resilient in 2012 despite th

84、e weakness in the UK economy as a whole.In central London,Derwent Londons core market,office take-up was lower than average but the supply of space was constrained,thereby keeping vacancy rates below trend and providing the conditions for further rental growth.In addition London continued to be seen

85、 by investors as offering an attractive investment destination.Transaction volumes were at their highest level for five years,according to leading surveyors,CBRE.Economic backdropThe lack of growth in the UK economy,with continued austerity measures and uncertainties within the Eurozone,provided the

86、 main economic backdrop to 2012.UK GDP was flat over 2012,compared with a rise of 0.9%in 2011.The UK base rate remained unchanged at 0.5%,whilst total employment reached an all-time high,rising 1.6%over the year and CPI inflation fell from 4.2%to 2.7%.Londons economy proved more resilient than that

87、of the country as a whole with its GDP growing 0.3%over the year,according to Oxford Economics.Looking forward,the outlook for UK growth remains subdued.The Bank of England forecasts that the economy is likely to see a gradual recovery over the next three years with GDP growth of around 1%predicted

88、for 2013,well below its historical average.In London the economy is expected to continue to outperform the country as a whole,notwithstanding some of the enduring banking issues,with GDP growth of 1.3%forecast for 2013 and 2.5%for 2014.Central London office occupier marketThe central London office m

89、arket,where 97%of Derwent Londons portfolio is located,plays a key role in the success of the capital by providing a home to a wide range of national and international companies.At the year end,the capitals office stock totalled approximately 221 million sq ft(20.5 million m)49%located in the City,4

90、2%in the West End and 9%in Docklands.CBRE reported that central London office take-up in 2012 totalled 9.8 million sq ft(0.91 million m),7%lower than the previous year and 17%below the 10-year average.In the West End take-up was 16%below the average at 3.5 million sq ft(0.33 million m)with the TMT s

91、ector comprising 23%of transactions.During 2012,West End active demand increased 15%with the TMT sector accounting for over 50%of year end requirements,suggesting that the low take-up at least in part reflects the low level of completions.Overall City activity was 12%below the 10-year average at 4.1

92、 million sq ft(0.38 million m).Source:CBRECompletedUnder constructionProposedVacancy rate2002201620142012201020082006200400.51.01.52.02.502.55.07.510.012.5Floor area million sq ftVacancy rate%West End office development pipelineCompletedaverageDerwent London plc Report&Accounts 201219On the delivery

93、 side,West End development completions were fractionally below the 10-year average at 0.95 million sq ft(88,300m)whilst City completions were just 0.51 million sq ft(47,400m),73%below the 10-year average.These relatively low levels of supply helped moderate the central London vacancy rate which was

94、5.3%at the year end.The West End vacancy rate declined slightly from 4.3%to 4.2%whilst the City rate decreased from 7.0%to 6.8%over the same period.With supply for both locations still below 10-year averages,the CBRE prime rent index showed further rental uplift with growth of 3.7%in the West End an

95、d 0.8%in the City over the year.The level of West End completions is expected to rise considerably during 2013,but we expect that this space will be absorbed by the market,given current levels of demand and the level of pre-lets already agreed on these properties.Central London office investment mar

96、ketAccording to CBRE,central London office investment transactions totalled 14.0bn in 2012,55%greater than 2011 and 28%above the 10-year average.Londons status as an international safe haven persisted with the property market offering both rental growth and liquidity.Overseas investors accounted for

97、 67%of acquisitions.Prime yields were static throughout the year at 4.0%in the West End and 5.0%in the City.The progress in the Crossrail project gained visibility during 2012.There was a flurry of acquisition and development activity around future Crossrail hubs such as Tottenham Court Road and Far

98、ringdon stations,where we have a large concentration of our portfolio,whilst Shoreditch,with its new High Street station,benefited from the completion of the London Overground orbital.We note with interest the Governments plans to include conversion of offices to residential units within permitted d

99、evelopment rights for three years,but do not believe that this will have a significant impact on our business.2004Average2006200820102012024861012141618Central London office investment transactions bnSource:CBREWELLSTRATEGYPLACEDWELL PLACED:CROSSRAILThe opening of Crossrail in 2018 will significantl

100、y improve transport into London.200 million passengers are expected to travel on it each year with 24 trains per hour running between Paddington and Whitechapel during peak times.Derwent London owns property all along the central section of the line,most notably near Tottenham Court Road and Farring

101、don stations.PaddingtonAt 55-65 North Wharf Road W2 there is planning permission to build 240,000 sq ft (22,300m2)of offices and 73,000 sq ft(6,800m2)of residential accommodation and retail space.The site is one of the best locations within Paddington Basin yet to be developed.It is ideally placed,d

102、irectly opposite one of the entrances to the station.In 2013 we signed an option agreement with the freeholder and head leaseholder that will provide us with a 999-year headlease and enable us to proceed with the office development.The head leaseholder will be responsible for the residential element

103、.55-65 North Wharf Road W2240,000SQ FTAPaddingtonMaidenheadPortfolio distributionDistance from Crossrail station 400 metres5,000m2 Achieve a minimum of BREEAM Excellent for all new build projects Undertake a series of presentations to new tenants in 2013 to raise awareness of the Ska assessment proc

104、ess in order to encourage its uptake Introduce a new BMS and metering system audit and sign off procedure in all new build development briefsResource efficiency (energy and carbon)Investigate and develop an appropriate and consistent measurement method for embodied carbon in our portfolio Carry out

105、a post occupancy energy performance evaluation on all new projects 5,000m2 once occupied for more than 12 monthsResource efficiency (water)Maintain portfolio mains water consumption below 0.50 m3/m2 Report percentage of water usage from rainwater harvesting All projects over 5,000m2 to be designed t

106、o include water saving systems All new projects to be designed to achieve a maximum mains water usage of 0.50m3/m2 or betterResource efficiency (waste)Send zero waste to landfill from properties for which Derwent London has control over waste management Achieve a 60%recycling rate for managed waste

107、in all properties for which Derwent London has control over waste management Divert 90%of construction and demolition waste from landfill For projects 5,000m2 ensure that a minimum of 15%of the total value of materials used contain recycled and/or re-used content,using the WRAP Net Waste Tool as the

108、 measureTravel Review the outcomes from the travel surveys undertaken during 2012 and implement the recommendations where appropriateBiodiversity Implement the recommendations from the biodiversity action plan on six buildings in the managed portfolioSuppliers Develop and implement a set of formal s

109、ustainability requirements for our construction contracts Develop and implement a sustainability brief for all our suppliers at our managed properties Investigate our supplier staff wage structures and benchmark them against industry best practiceCommunity Investigate and develop an appropriate and

110、consistent approach to measure our socio-economic impactCustomers Implement a formal,regular programme of customer service training for property and building management staff drawing on feedback from 2011 and 2012 pilots Undertake customer feedback assessments on occupation in all new build and refu

111、rbishments 5,000m2 Review the outcomes from the customer sustainability survey and implement the recommendations made Undertake a customer satisfaction survey for 2013 to assess the improvement benchmarked against 2011 resultsEmployees Launch employee volunteering programme working with existing cha

112、rity partners and communities in which we operate Deliver training to all Development/Asset/Building Management staff on our sustainability approach,commitments and requirements Develop and host two further Director technical presentations as part of the ongoing knowledge-share programmeSpread overl

113、eaf:40 Chancery Lane WC2Corporate governanCe76Corporate governanceBoard of direCtors1.Robert A.Rayne,64Non-executive ChairmanThe Hon R.A.Rayne joined the Board in February 2007.He has been on the boards of anumber of public companies,including First Leisure Corporation plc and Crown Sports plc,and i

114、s a non-executive Director of LMS Capital plc.He is also a non-executive Director of Weatherford International Inc.,and was Chief Executive Officer of London Merchant Securities plc.2.John D.Burns,68Chief Executive OfficerJohn has been a Director of the Company since 1984 and has overall responsibil

115、ity for Group strategy,business development and day-to-day operations.He is a member of the strategic board of the New West End Company Limited.He is also a member of the Risk Committee.3.Damian M.A.Wisniewski,51Finance DirectorDamian is a chartered accountant and has overall responsibility for fina

116、ncial strategy,treasury,taxation and financial reporting.He joined the Board on 1 February 2010,prior to which he held senior finance roles at Treveria Asset Management,Wood Wharf Limited Partnership and Chelsfield plc.He is a member of the Risk Committee.4.Simon P.Silver,62Executive DirectorSimon h

117、as overall responsibility for the development and regeneration programme.He became a Director in 1986 and is an honorary fellow of the Royal Institute of British Architects.5.Paul M.Williams,52Executive DirectorPaul is a chartered surveyor and was appointed to the Board in 1998.His responsibilities

118、include portfolio asset management,supervision of refurbishment and development projects and sustainability.He is a Director of The Paddington Waterside Partnership.6.Nigel Q.George,49Executive DirectorA chartered surveyor,Nigel was appointed to the Board in 1998.He has responsibility for acquisitio

119、ns and investment analysis.He is a Director of the Chancery Lane Association.7.David G.Silverman,43Executive DirectorDavid joined the Board in January 2008.He is a chartered surveyor and is responsible for investment acquisitions and disposals.He is the immediate past Chairman of Westminster Propert

120、y Association and sits on its General Council.107115132146123914 8Derwent London plc Report&Accounts 2012778.John C.Ivey,71Non-executive Deputy ChairmanA chartered accountant,John was a non-executive Director of RWS Holdings plc until January 2010 and was formerly Chief Executive of Berendsen plc.He

121、 has served on the Board since 1984 and is a member ofthe Nominations Committee.9.Stuart A.Corbyn,68Senior Independent Director Stuart is a chartered surveyor.He was appointed to the Board in 2006.Until December 2008,he was Chief Executive of Cadogan Estates,one of the principal private estates in L

122、ondon,and is a former president of the British Property Federation.He chairs the Nominations Committee and is a member of the Audit and Remuneration Committees.10.Robert A.Farnes,67Non-executive DirectorRobert is a chartered surveyor.He was previously the Chairman of CB Hillier Parker andjoined the

123、Board in 2003.He is a member ofthe Remuneration,Audit and Nominations Committees.11.June de Moller,65Non-executive DirectorJune joined the Board in February 2007.She is a non-executive Director of Temple BarInvestment Trust plc.Previously,she wasManaging Director of Carlton Communications Plc and a

124、non-executive Director of Cookson Group plc,BT plc,AWG plc,J Sainsbury plc,Archant Limited and London Merchant Securities plc.She chairs the Remuneration Committee and is a member of the Audit,Risk andNominations Committees.12.Simon Fraser,49Non-executive DirectorSimon joined the Board in September

125、2012 and is a member of the Audit and Remuneration Committees.From 1997 to his retirement at the end of 2011,he worked at Bank of America Merrill Lynch where he had been managing director and co-head of corporate broking since 2004.13.Stephen G.Young,57Non-executive DirectorStephen is a chartered ma

126、nagement accountant.He joined the Board in August 2010.He is Group Finance Director at Meggitt plc.Previously,he held the position of Group Finance Director at Thistle Hotels plc and the Automobile Association.He chairs the Audit and Risk Committees whilst serving on the Remuneration and Nominations

127、 Committees.14.Timothy J.KiteCompany Secretary78Corporate governancestatement of direCtors responsiBilitiesDirectors responsibilitiesThe Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Companys transactions and disclose with reasonable ac

128、curacy at any time the financial position of the Company,for safeguarding the assets of the Company,for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a Directors report and Directors remuneration report which comply with the req

129、uirements of the Companies Act 2006.The Directors are responsible for preparing the annual report and the financial statements in accordance with the Companies Act 2006.The Directors are also required to prepare financial statements for the Group in accordance with International Financial Reporting

130、Standards,as adopted by the European Union(IFRS)and Article 4 of the IAS Regulation.The Directors have chosen to prepare financial statements for the Company in accordance with IFRSs.Group financial statementsInternational Accounting Standard 1 requires that financial statements present fairly for e

131、ach financial year the Groups and Companys financial position,financial performance and cash flows.This requires the faithful representation of the effects of transactions,other events and conditions in accordance with the definitions and recognition criteria for assets,liabilities,income and expens

132、es set out in the International Accounting Standards Boards“Framework for the preparation and presentation of financial statements”.In virtually all circumstances,a fair presentation will be achieved by compliance with all applicable IFRSs.A fair presentation also requires the Directors to:consisten

133、tly select and apply appropriate accounting policies;present information,including accounting policies,in a manner that provides relevant,reliable,comparable and understandable information;and provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to e

134、nable users to understand the impact of particular transactions,other events and conditions on the entitys financial position and financial performance.The Directors confirm to the best of their knowledge:they have complied with the above requirements in preparing the financial statements which give

135、 a true and fair view of the assets,liabilities,financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;the adoption of a going concern basis for the preparation of the financial statements continues to be appropriate based on the fore

136、going and having reviewed the forecast financial position of the Group;and the business review includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole,together with a description of

137、the principal risks and uncertainties that they face.Financial statements are published on the Groups website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements,which may vary from legislation in other jurisdictions.The maintenanc

138、e and integrity of the Groups website is the responsibility of the Directors.The Directors responsibility also extends to the ongoing integrity of the financial statements contained therein.On behalf of the BoardJohn D.BurnsChief Executive OfficerDamian M.A.WisniewskiFinance Director28 February 2013

139、Derwent London plc Report&Accounts 201279direCtors reportCorporate governanceThe Directors present their report and the financial statements for the year ended 31 December 2012.Chairmans letter on corporate governanceOn behalf of the Board I am pleased to present the Groups Corporate Governance repo

140、rt for 2012.The rules and regulations that define Corporate Governance continue to expand and best practice continues to evolve.Consequently,Governance in its broadest sense demands more time and resources.However,at Derwent London we see adhering to these requirements as not only an exercise in com

141、pliance but also essential to the running of a successful and sustainable business.The Company is subject to the provisions of the UK Corporate Governance Code(the Code)which was introduced by the Financial Reporting Council(FRC)in 2010.During 2012 a number of revisions were made which we will be re

142、quired to comply with for our year ending December 2013.For 2012,the Board believes that the Company has complied with the main and supporting principles of the Code except for provision B.1.1 which addresses the independence of non-executive Directors.This matter is discussed more fully in the foll

143、owing section.In addition we have complied with a number of the new requirements.Developments in the corporate governance framework during the year mean that the Groups Board Committees have had to consider the implications of a number of new issues,some of which I comment on below:DiversityIn overs

144、eeing the Board refreshment process,the Nominations Committee was conscious of the increased focus on diversity in the boardroom.As a Board we acknowledge the importance of all aspects of diversity including gender,ethnic origin,business skills and experience,not only because it is right to do so bu

145、t also because it is good for business.However,to be successfully implemented,change cannot be forced but can only be made gradually to reflect the natural pace of Board succession and the desired rate of refreshment,without being unduly influenced by an aspiration to affect the diversity of the Boa

146、rd.To ensure that a sufficiently diverse list of potential candidates is considered when a new non-executive Director is being sought,we use external recruitment consultants who subscribe to the“Voluntary Code of Conduct for Executive Search Firms”and request that female candidates of equal merit ar

147、e included on the list of candidates.RiskThe introduction of the Groups Risk Committee at the end of 2011 appears to have been well timed as the nature of risks to the business and the management thereof has become subject to increased scrutiny.Social media is being used more and more in the busines

148、s environment and the high velocity with which news,both good and bad,is propagated in this medium could pose a particular risk to the Groups reputation.To address this we have put in place measures to monitor the content of the various forums and established an agreed procedure which would be imple

149、mented in a case of adverse or false comments.On a separate front,potential legislation currently being consulted upon may,if enacted,prevent private investors from acquiring shares in REITs with a consequent possible effect on the Groups share price.Along with others,we have lobbied on this proposa

150、l through the British Property Federation and wait to see the result of the industrys efforts.Further details of the work of the Risk Committee are given on pages 102 and 103 and the Groups risk management processes are detailed on pages 30 to 33.RemunerationThere has been much focus on executive re

151、muneration over the last few years and 2012 saw the publication of wide reaching proposals on the subject by the Department for Business,Innovation and Skills(BIS).We agree with many of the proposals,in particular the requirement to publish a single figure for Directors remuneration which will allow

152、 for more meaningful comparisons to be made.We have always published a single figure in our report of the Remuneration Committee albeit calculated on a different basis from that currently proposed by BIS.We have continued to use our method this year as the BIS basis has not yet been finalised.Corpor

153、ate Social Responsibility(CSR)continues to increase its prominence on the governance agenda and for the first time we have sought third party assurance of our figures.This will establish a firm base year for our reporting and allow us to monitor our performance and progress in this area more accurat

154、ely in the future.Once again,I would like to stress the importance of the Annual General Meeting(AGM)as an opportunity for shareholders to meet the management team and encourage you to attend on 17 May 2013.Robert A.RayneChairman28 February 201380Corporate governancedireCtors reportContinuedBusiness

155、 reviewA review of the development of the Groups business during the year,the principal risks and uncertainties facing the Group and its future prospects is included in the Chairmans statement and the strategy,performance and sustainability sections of the report and accounts.The information require

156、d by section 417 of the Companies Act 2006 and by rules 4.1.8 to 4.1.11 of the Disclosure and Transparency Rules is given on pages 14 to 73.These sections should be read in conjunction with this report and are incorporated into the Directors report by reference.The disclosures in respect of the use

157、of financial instruments are given in notes 27 and 28 of the financial statements.The Board and Board CommitteesFollowing the retirement of Simon Neathercoat at the end of the year the Board consisted of:A non-executive Chairman:Robert RayneSix non-executive Directors:John IveyStuart CorbynStephen Y

158、oungJune de MollerRobert FarnesSimon FraserSix executive Directors:John BurnsSimon SilverDamian WisniewskiNigel GeorgePaul WilliamsDavid SilvermanSimon Fraser joined the board on 1 September 2012.As noted above,John Ivey and Robert Farnes do not qualify to be deemed independent using the criteria se

159、t out in provision B.1.1.of the Code.The Board has therefore specifically considered their independence.At the year end both had served on the board for more than nine years and are therefore not deemed independent.The Board does not believe that length of service is necessarily an accurate indicati

160、on of the degree of independence of a Director and therefore has reviewed the manner in which both Directors carried out their duties during the year.In the Boards opinion,they both continue to demonstrate commitment to their roles and to exercise their expertise in an effective and independent mann

161、er.Robert Farnes period of service as a non-executive Director reached nine years on 31 March 2012 and in accordance with best practice,on 1 April 2012 he handed over the chairmanship of the Remuneration Committee to June de Moller and was replaced by Stuart Corbyn as the Groups Senior Independent D

162、irector.Neither John Ivey nor Robert Farnes has any association with management that might compromise their independence and both are standing for re-election at the Companys AGM on 17 May 2013.During the year the process of refreshment which was introduced in 2010 was continued.This was instigated

163、to address the independence issues that had been identified at that time,through an orderly process of change.In 2011,the independent executive search agency,Spencer Stuart,was appointed to assist with the recruitment of two new independent non-executive Directors over a period of 18 months.Simon Fr

164、aser,who was appointed to the Board on 1 September 2012,is the first new director under this initiative,and this was followed by the retirement of Simon Neathercoat at the end of the year.It is anticipated that another non-executive Director will be appointed during 2013 and that John Ivey will reti

165、re shortly thereafter.As part of the refreshment process,the Directors continue to assess the composition and diversity of the Board having particular regard to its gender diversity and the enhanced requirements in this area due to be introduced in the 2012 revision of the Code.One of these requirem

166、ents is to publish an aspirational target for the number of women on the board.The Board currently includes one female(8%)and remains reluctant to publish such a target as it is convinced that future appointments should be based solely on the merit of the candidates.The gender mix throughout the com

167、pany is illustrated in the diagrams opposite.Taking all factors into account,the Directors continue to believe that the Board has an appropriate balance of skills,experience,knowledge and independence to satisfy the requirements of good corporate governance.A formal schedule,which has been approved

168、by the Board,sets out the division of responsibilities between the Chairman,who is responsible for the effectiveness of the Board,and the Chief Executive Officer,who is responsible for the day-to-day operation of the business.The Board is responsible for setting the companys strategic aims,for ensur

169、ing that adequate resources are available to meet its objectives and for reviewing management performance.A formal list of matters reserved for the full Boards approval is maintained and reviewed periodically.The full Board met six times during the year and six meetings are scheduled for 2013.Extra

170、meetings will be arranged if necessary.During the year,the executive Board was expanded to create an executive committee.This committee consists of the executive Directors plus three of the Groups senior managers and met 12 times throughout the year.Both bodies are provided with comprehensive papers

171、 in a timely manner to ensure that the members are fully briefed on matters to be discussed at these meetings.Derwent London plc Report&Accounts 201281The Board maintains a number of Board Committees.The terms of reference of each Committee are available on the Groups website.Set out below are detai

172、ls of the membership and duties of the four principal Committees that operated throughout 2012.Remuneration CommitteeAt the start of the year the Committee comprised of June de Moller,Stuart Corbyn and Stephen Young under the chairmanship of Robert Farnes.June de Moller took over as Chairman on 1 Ap

173、ril 2012 and Simon Fraser joined the Committee on 1 January 2013,slightly later than originally planned.He will become Chairman of the Committee after the Groups AGM in May 2013 and,in order to ensure a smooth transition,it has been decided that Robert Farnes will remain on the Committee until that

174、date.The Committee is responsible for establishing the Companys remuneration policy and individual remuneration packages for the executive Directors.There were six meetings of the Committee in 2012 and the report of its activities is set out on pages 89 to 99.Audit CommitteeThis Committee is chaired

175、 by Stephen Young and was served throughout the year by Stuart Corbyn,Robert Farnes and June de Moller.Simon Fraser joined the Committee on 1 September 2012 and Robert Farnes will step down following the Groups AGM in Gender diversity Whole company%Male 54Female 46Gender diversity Support staff%Male

176、 25Female 75May 2013.The Committee is responsible for reviewing,and reporting to the Board on,the Groups financial reporting and for maintaining an appropriate relationship with the Companys auditor.The Committee met four times during 2012 and the report of the Audit Committee is on page 105.Nominat

177、ions CommitteeThe Committee consists of John Ivey,Robert Farnes,June de Moller,Simon Neathercoat and Stephen Young and is chaired by Stuart Corbyn.Its responsibilities include identifying external candidates for appointment as Directors and,subsequently,recommending their appointment to the Board.If

178、 requested,the Committee will make a recommendation concerning an appointment to the Board from within the Company.The Committee met three times during 2012.The report of the Nominations Committee is on page 101.Risk CommitteeThe Risk Committee was established in November 2011.It is chaired by Steph

179、en Young and was served throughout the year by June de Moller,John Burns and Damian Wisniewski.The Committees main responsibility is to review the effectiveness of the Companys internal control and risk management systems.It met three times during the year and the Committee report is on page 103.Gen

180、der diversity Senior management(excluding Directors)%Male 73Female 27Gender diversity Professional staff%Male 61Female 3982Corporate governancedireCtors reportContinuedDirectors attendance at Board and Committee meetings during the year was as follows:Full BoardExecutive CommitteeRemuneration Commit

181、teeAudit CommitteeNominations CommitteeRisk CommitteeNumber of meetings6 12 6 4 33 ExecutiveJ.D.Burns6 12 3 S.P.Silver6 10 D.M.A.Wisniewski6 12 3 P.M.Williams6 12 N.Q.George6 12 D.G.Silverman6 11 Non-executiveR.A.Rayne6 J.C.Ivey6 2S.J.Neathercoat6 3R.A.Farnes6 6 4 3S.A.Corbyn6 6 4 3J.de Moller6 6 4

182、33 S.G.Young 6 6 4 33 S.Fraser(from 1 September 2012)2 1 Performance evaluationWith regard to the requirement of provision B.6.2 of the Code and having used an independent third party to facilitate the annual review of the effectiveness of the Board last year,the Board undertook an internal assessme

183、nt in 2012.The review was initiated by all Directors completing a questionnaire prepared by the Chairman,Senior Independent Director and Company Secretary which covered the processes and performance of the Board,its Committees and the Chairman.It was decided that the performance of individual Direct

184、ors would be assessed by means of one-to-one meetings between the Chairman and the Directors.The anonymous responses were summarised by the Company Secretary and reviewed by the Chairman,the Senior Independent Director or the Committee chairmen as appropriate.Any significant matters were discussed w

185、ith the individual Directors by the Chairman.As a result of the evaluation,the Board is satisfied that the structure,mix of skills and operation of the Board continues to be satisfactory and appropriate for the Company.In addition,the Chairman is satisfied that the non-executive Directors standing f

186、or re-election at the AGM continue to be effective and show a high level of commitment to their roles.The performance of the Chairman was assessed by the non-executive Directors under the leadership of the Senior Independent Director using the responses to that part of the questionnaire.As part of t

187、his review,we identified an opportunity to further enhance the breadth and depth of our communication with shareholders by increasing the number of meetings that the Chairman has with investors.This matter will be addressed in the first half of 2013.DirectorsAppointment and replacement of DirectorsT

188、he appointment of a Director from outside the Company is on the recommendation of the Nominations Committee,whilst internal promotion is a matter decided by the Board unless it is considered appropriate for a recommendation to be requested from the Nominations Committee.The Directors shall be not le

189、ss than two and not more than 15 in number.The shareholders may vary the minimum and/or maximum number of Directors by passing an ordinary resolution.Other than as required by the Remuneration Committee,a Director shall not be required to hold any shares in the Company.Directors may be appointed by

190、the Company by ordinary resolution or by the Board.A Director appointed by the Board holds office only until the next AGM of the Company and is then eligible for re-appointment.The Board or any Committee authorised by the Board may from time to time appoint one or more Directors to hold any employme

191、nt or executive office for such period and on such terms as they may determine and may also revoke or terminate any such appointment.The articles provide that at every AGM of the Company any Director who has been appointed by the Board since the last AGM,or who held office at the time of the two pre

192、ceding AGMs and who did not retire at either of them,or who has held office with the Company,other than employment or executive office,for a continuous period of nine years or more at the date of the meeting,shall retire from office and may offer himself for re-appointment by the members.However,Pro

193、vision B.7.1 of the Code requires that all Directors are subject to annual re-election and therefore at the next AGM all the Directors will retire and,being eligible,offer themselves for re-election.Biographies of all the Directors are given on pages 76 and 77.Derwent London plc Report&Accounts 2012

194、83Ordinary shares of 5p eachOptions31 Dec 1231 Dec 1131 Dec 1231 Dec 11R.A.Rayne14,409,295 4,409,295 91,730 157,345 J.C.Ivey79,072 79,072 J.D.Burns760,031 737,127 199,543 241,683 S.P.Silver364,939 346,465 171,120 206,521 N.Q.George33,846 20,348 103,695 125,122 P.M.Williams35,622 35,168 103,695 125,1

195、22 D.G.Silverman8,879 6,821 89,705 108,543 D.M.A.Wisniewski 816 100,352 67,221 S.J.Neathercoat(retired 31 December 2012)8,000 R.A.Farnes6,838 6,838 S.A.Corbyn1,000 1,000 J.de Moller2,985 2,985 S.G.Young1,0001,000S.Fraser(joined 1 September 2012)1 Includes shares held by the Rayne Foundation of which

196、 he is a trusteeThe Company may by special resolution remove any Director before the expiration of his period of office.The office of a Director shall be vacated if:he resigns or offers to resign and the Board resolve to accept such offer;his resignation is requested by all of the other Directors an

197、d all of the other Directors are not less than three in number;he is or has been suffering from mental or physical ill health and the Board resolves that his office be vacated;he is absent without the permission of the Board from meetings of the Board(whether or not an alternate Director appointed b

198、y him attends)for six consecutive months and the Board resolves that his office is vacated;he becomes bankrupt or enters into an agreement with his creditors generally;he is prohibited by a law from being a Director;he ceases to be a Director by virtue of the Companies Act;or he is removed from offi

199、ce pursuant to the Companys articles.If considered appropriate,new Directors are provided with external training that addresses their role and duties as a director of a quoted public company.Existing Directors monitor their own continued professional development and are encouraged to attend those co

200、urses that keep their market and regulatory knowledge current.All Directors have access to the services of the Company Secretary and any Director may instigate an agreed procedure whereby independent professional advice may be sought at the Companys expense.Directors and Officers Liability Insurance

201、 is maintained by the Company.Directors interestsThe Directors of the Company during the year and their interests in the share capital of the Company,including deferred shares and shares over which options have been granted,either under the Executive Share Option Scheme or the Performance Share Plan

202、,are shown below.All of these interests are held beneficially.Powers of the DirectorsSubject to the Companys articles,the Companies Act and any directions given by the Company by special resolution,the business of the Company will be managed by the Board who may exercise all the powers of the Compan

203、y,whether relating to the management of the business of the Company or not.In particular,the Board may exercise all the powers of the Company to borrow money,to guarantee,to indemnify,to mortgage or charge any of its undertaking,property,assets(present and future)and uncalled capital and to issue de

204、bentures and other securities and to give security for any debt,liability or obligation of the Company or of any third party.There have been no changes in any of the Directors interests between the year-end and 28 February 2013.The Directors do not participate in the Groups Executive Share Option Sc

205、heme.Details of the options exercised by Directors are given in the report of the Remuneration Committee(pages 89 to 99).A conditional grant of 230,925 shares was made to Directors under the Performance Share Plan(PSP)whilst 173,925 shares vested to the Directors from an earlier conditional award at

206、 a zero exercise price.The remaining 173,925 shares of this award made to Directors lapsed.Other than as disclosed in note 40,the Directors have no interest in any material contracts of the Company.Conflicts of interestThe Companys articles permit the Directors to regulate conflicts of interest.The

207、Board operates a policy for managing and,where appropriate,approving conflicts or potential conflicts of interest whereby Directors are required to notify the Company as soon as they become aware of a situation that could give rise to a conflict or potential conflict of interest.The register of pote

208、ntial conflicts of interest is regularly reviewed by the Risk Committee and the Board is satisfied that this policy has operated effectively throughout the period.84Corporate governancedireCtors reportContinuedCommunication with shareholdersThe Company recognises the importance of clear communicatio

209、n with shareholders.Regular contact with institutional shareholders and fund managers is maintained,principally by the executive Directors,by giving presentations and organising visits to the Groups property assets.The Board receives regular reports of these meetings which include a summary of any s

210、ignificant issues raised by the shareholders.Communication with shareholders will be further enhanced by the increase in the number of meetings between the Chairman and investors discussed above.The annual report,which is available to all shareholders,reinforces this communication.During the year,th

211、e Groups website has been updated so as to provide a more functional source of information for shareholders and the presentations made to analysts at the time of the Groups interim and full year results are made available on the website.The AGM provides an opportunity for shareholders to question th

212、e Directors and,in particular,the chairman of each of the Board Committees.An alternative channel of communication to the Board is available through Stuart Corbyn,the Senior Independent Director.Risk management and internal control The principal risks and uncertainties facing the Group in 2013 toget

213、her with the controls and mitigating factors are set out on pages 30 to 33.The systems that control the risks form the Groups system of internal control.The key elements of the Groups internal control framework are:an approved schedule of matters reserved for decision by the Board supported by defin

214、ed responsibilities and levels of authority;the day-to-day involvement of the executive Directors in all aspects of the Groups business;a comprehensive system of financial reporting and forecasting including both sensitivity and variance analysis;maintenance,updating and regular review by the Risk C

215、ommittee of the Groups risk register;and a formal whistleblowing policy.The effectiveness of this system and the operation of the key components thereof have been reviewed for the accounting year and the period to the date of approval of the financial statements.The Board has considered the need for

216、 an internal audit function but continues to believe that this is unnecessary given the size and complexity of the Group.Report and accountsThe Board has considered the Groups report and accounts and,taking into account the recommendation of the Audit Committee,is satisfied that,taken as a whole,it

217、is fair,balanced and understandable and provides the information necessary for the shareholders to assess the Companys performance,business model and strategy.Share capitalAs at 28 February 2013,the Companys issued share capital comprised a single class of 5p ordinary shares.Details of the ordinary

218、share capital and shares issued during the year can be found in note 29 to the financial statements.Rights and restrictions attaching to sharesThe Company can issue shares with any rights or restrictions attached to them as long as this is not restricted by any rights attached to existing shares.The

219、se rights or restrictions can be decided either by an ordinary resolution passed by the shareholders or by the Directors as long as there is no conflict with any resolution passed by the shareholders.These rights and restrictions will apply to the relevant shares as if they were set out in the artic

220、les.Subject to the articles,The Companies Act and other shareholder rights,unissued shares are at the disposal of the Board.VotingShareholders will be entitled to vote at a general meeting whether on a show of hands or a poll,as provided in the Companies Act.Where a proxy is given discretion as to h

221、ow to vote on a show of hands,this will be treated as an instruction by the relevant shareholder to vote in the way in which the proxy decides to exercise that discretion.This is subject to any special rights or restrictions as to voting which are given to any shares or upon which any shares may be

222、held at the relevant time and to the articles.If more than one joint holder votes(including voting by proxy),the only vote which will count is the vote of the person whose name is listed first on the register for the share.Derwent London plc Report&Accounts 201285Restrictions on votingUnless the Dir

223、ectors decide otherwise,a shareholder cannot attend or vote shares at any general meeting of the Company or upon a poll or exercise any other right conferred by membership in relation to general meetings or polls if he has not paid all amounts relating to those shares which are due at the time of th

224、e meeting,or if he has been served with a restriction notice(as defined in the articles)after failure to provide the Company with information concerning interests in those shares required to be provided under the Companies Act.The Company is not aware of any agreements between shareholders that may

225、result in restrictions on voting rights.Restrictions on transfer of securities in the CompanyThere are no restrictions on the transfer of securities in the Company,except:that certain restrictions may from time to time be imposed by laws and regulations(for example,insider trading laws);and pursuant

226、 to the Listing Rules of the Financial Services Authority whereby certain employees of the Company require the approval of the Company to deal in the Companys ordinary shares.The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities

227、.Variation of rightsIf the Companies Act allows this,the rights attached to any class of shares can be changed if it is approved either in writing by shareholders holding at least three quarters of the issued shares of that class by amount(excluding any shares of that class held as treasury shares)o

228、r by a special resolution passed at a separate meeting of the holders of the relevant class of shares.This is called a“class meeting”.All the articles relating to general meetings will apply to any such class meeting,with any necessary changes.The following changes will also apply:a quorum will be p

229、resent if at least two shareholders who are entitled to vote are present in person or by proxy who own at least one third in amount of the issued shares of the class(excluding any shares of that class held as treasury shares);any shareholder who is present in person or by proxy and entitled to vote

230、can demand a poll;and at an adjourned meeting,one person entitled to vote and who holds shares of the class,or his proxy,will be a quorum.The provisions of this article will apply to any change of rights of shares forming part of a class.Each part of the class which is being treated differently is t

231、reated as a separate class in applying this article.The rights conferred upon the holders of any shares shall not,unless otherwise expressly provided in the rights attaching to those shares,be deemed to be varied by the creation or issue of further shares ranking pari passu with them.No person holds

232、 securities in the Company carrying special rights with regard to control of the Company.Powers in relation to the Company issuing or buying back its own sharesThe Directors were granted authority at the last AGM held in 2012 to allot relevant securities up to a nominal amount of 1,694,567.That auth

233、ority will apply until the conclusion of this years AGM.At this years AGM shareholders will be asked to grant an authority to allot relevant securities(i)up to a nominal amount of 1,699,522 and(ii)up to a nominal amount of 3,399,044(after deducting from such limit any relevant securities allotted un

234、der(i),in connection with an offer by way of a rights issue,(the“section 551 authority”),such section 551 authority to apply until the end of next years AGM.A special resolution will also be proposed to renew the Directors power to make non-pre-emptive issues for cash in connection with rights issue

235、s and otherwise up to a nominal amount of 254,928.A further special resolution will be proposed to renew the Directors authority to repurchase the Companys ordinary shares in the market.The authority will be limited to a maximum of 10,197,134 ordinary shares and the resolution sets the minimum and m

236、aximum prices which may be paid.Treasury sharesAt 31 December 2012 the Company held 42,895 shares as treasury shares in order to deliver the deferred bonus shares to the Directors when the deferral period expires.Movements on the holding of treasury shares are detailed in the table below.Treasury sh

237、aresNumber of 5p ordinary sharesPercentage of issued share capital%Price Aggregate consideration Acquired on 25 March 201125,322 0.025 15.55 393,757 Holding at 31 December 201125,322 0.025 393,757 Acquired on 29 March 201230,236 0.029 17.38 525,502 Maximum holding during 201255,558 0.054 919,259 Dis

238、posed on 2 April 2012(12,663)(0.012)17.31(219,196)Holding at 31 December 201242,895 0.042 700,063 86Corporate governancedireCtors reportContinuedSubstantial shareholdersIn addition to those of the Directors disclosed on page 83,the Company has been notified of the following interests in the issued o

239、rdinary share capital as at 28 February 2013.Number of sharesPercentage of issued share capitalCohen&Steers Capital Management Inc5,231,757 5.13 Ameriprise Financial Inc5,132,584 5.03 BlackRock Investment Management(UK)Ltd5,035,211 4.94 Standard Life Investments4,284,390 4.20 Third Avenue Management

240、 LLC3,944,764 3.87 Withers Trust Corporation Ltd3,942,641 3.86 Lady Jane Rayne13,593,838 3.52 1 Includes shares held by the Rayne Foundation of which she is a trusteeSignificant agreementsThere are no agreements between the Company and its Directors or employees providing for compensation for loss o

241、f office or employment that occurs because of a takeover bid,except that,under the rules of the Groups share-based remuneration schemes some awards may vest following a change of control.Some of the Groups banking arrangements are terminable upon a change of control of the Company.As a REIT,a tax ch

242、arge may be levied on the Company if it makes a distribution to another company which is beneficially entitled to 10%or more of the shares or dividends in the Company or controls 10%or more of the voting rights in the Company,(a substantial shareholder),unless the Company has taken reasonable steps

243、to avoid such a distribution being made.The Companys articles give the Directors power to take such steps,including the power:to identify a substantial shareholder;to withhold the payment of dividends to a substantial shareholder;and to require the disposal of shares forming part of a substantial sh

244、areholding.There is no person with whom the Group has a contractual or other arrangement which is essential to the business of the Company.Amendment of articles of associationUnless expressly specified to the contrary in the articles of the Company,the Companys articles may be amended by a special r

245、esolution of the Companys shareholders.Creditor payment policyThe Groups policy is to agree terms of business with suppliers prior to the supply of goods or services.In the absence of any dispute,invoices are paid in accordance with these terms.For the year ended 31 December 2012,the average payment

246、 period was 24 days(2011:24 days).Charitable donationsThe Group made charitable donations of 0.1m during the year(2011:0.1m).Fixed assetsThe Groups freehold and leasehold investment properties were professionally revalued at 31 December 2012,resulting in a surplus of 183.3m,before deducting the leas

247、e incentive adjustment of 8.0m.The freehold and leasehold properties are included in the Group balance sheet at a carrying value of 2,807.0m.Further details are given in note 18 of the financial statements.Post balance sheet eventsDetails of post balance sheet events are given in note 37 of the fina

248、ncial statements.Going concernUnder Provision C.1.3 of the UK Corporate Governance Code,the Board needs to report that the business is a going concern.In considering this requirement,the Directors have taken into account the following:i)The Groups latest rolling forecast for the next two years in pa

249、rticular the cash flows,borrowings and undrawn facilities.Sensitivity analysis is included within these forecastsii)The headroom under the Groups financial covenantsiii)The risks included on the Groups Risk Register that could impact on the Groups liquidity and solvency over the next 12 months.iv)Th

250、e risks on the Groups Risk Register that could be a threat to the Groups business model and capital adequacy.The Groups risk and risk management processes are set out on pages 30 to 33.Having due regard to these matters and after making appropriate enquiries,the Directors have reasonable expectation

251、 that the Group and Company have adequate resources to continue in operational existence for the foreseeable future.Therefore,the Board continues to adopt the going concern basis in preparing the financial statements.Disclosure of information to auditorsThe Directors who held office at the date of a

252、pproval of this Directors report confirm that,so far as they are each aware,there is no relevant audit information of which the Companys auditor is unaware and that each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit inform

253、ation.AuditorBDO LLP have expressed the willingness to continue in office and accordingly,resolutions to re-appoint them and to authorise the Directors to determine their remuneration will be proposed at the AGM.These are resolutions 17 and 18 set out in the notice of meeting.Derwent London plc Repo

254、rt&Accounts 201287Annual General MeetingThe notice of meeting contained in the circular to shareholders that accompanies the report and accounts includes four resolutions to be considered as special business.Resolution 19 is an ordinary resolution which will renew the authority of the Directors unde

255、r Section 551 of the Companies Act 2006 to allot shares.Paragraph A of the resolution gives the Directors authority to allot ordinary shares up to an aggregate nominal amount of 1,699,253 which represents about one third of the issued ordinary share capital(excluding treasury shares)of the Company a

256、s at the latest practicable date prior to the publication of this document.In line with guidance issued by the Association of British Insurers,paragraph B of the resolution gives the Directors authority to allot ordinary shares in connection with a rights issue in favour of ordinary shareholders up

257、to an aggregate nominal amount of 3,398,506,as reduced by the nominal amount of any shares issued under paragraph A of the resolution.This amount(before any reduction)represents approximately two-thirds of the issued ordinary share capital(excluding treasury shares)of the Company as at the latest pr

258、acticable date prior to the publication of this document.The Directors have no present intention of issuing shares except on the exercise of options under the Companys share option scheme,on the vesting of shares under the Companys performance share plan or in connection with the scrip dividend sche

259、me.The authority will expire at the conclusion of the next AGM after the passing of the resolution or,if earlier,the close of business on 16 August 2014.Resolution 20 is a special resolution,proposed annually,and will renew the Directors authority under Sections 570 and 573 of the Companies Act 2006

260、.The resolution empowers the Directors to allot or,now that the Company may hold shares as treasury shares(as further described below),sell shares for cash in connection with pre-emptive offers and the scrip dividend scheme(where the scrip election is made after the declaration(but before payment)of

261、 a final dividend)with modifications to the requirements set out in Section 561 of the Companies Act 2006.The resolution further empowers the Directors to allot or,in the case of treasury shares,sell shares for cash,otherwise than on a pre-emptive basis,up to an aggregate nominal value of 255,040 wh

262、ich is equivalent to approximately 5%of the issued share capital as at the latest practicable date prior to the publication of this document.In respect of this aggregate nominal amount,the Directors confirm their intention to follow the provisions of the Pre-Emption Groups Statement of Principles re

263、garding cumulative usage of authorities within a rolling three-year period where the Principles provide that usage in excess of 7.5%should not take place without prior consultation with shareholders.Allotments made under the authorisation in paragraph(B)of resolution 19 would be limited to allotment

264、s by way of a rights issue only(subject to the right of the Board to impose necessary or appropriate limitations to deal with,for example,fractional entitlements and regulatory matters).The authority will expire at the conclusion of the next AGM after the passing of the resolution or,if earlier,the

265、close of business on 16 August 2014.Resolution 21 is proposed to renew the authority enabling the Company to purchase its own shares.This authority enables the Directors to act quickly,if,having taken account of all major factors such as the effect on earnings and net asset value per share,gearing l

266、evels and alternative investment opportunities,such purchases are considered to be in the Companys and shareholders best interest while maintaining an efficient capital structure.The special resolution gives the Directors authority to purchase up to 10%of the Companys ordinary shares and specifies t

267、he maximum and minimum prices at which shares may be bought.The authority will expire at the conclusion of the next AGM after the passing of the resolution or,if earlier,the close of business on 16 August 2014.The Companies Act 2006 permits the Company to hold any such repurchased shares in treasury

268、,with a view to possible re-issue at a future date,as an alternative to immediately cancelling them(as had previously been required under the relevant legislation).Accordingly,if the Company purchases any of its shares pursuant to resolution 21,the Company may cancel those shares or hold them in tre

269、asury.Such a decision will be made by the Directors at the time of purchase on the basis of the Companys and shareholders best interests.As at the date of the notice of meeting,the Company held 61,211 shares in treasury.The total number of options to subscribe for ordinary shares outstanding at 28 F

270、ebruary 2013 was 1,098,880 which represented 1.08%of the issued share capital(excluding treasury shares)at that date.If the Company were to purchase the maximum number of ordinary shares permitted by this resolution,the options outstanding at 28 February 2013 would represent 1.33%of the issued share

271、 capital(excluding treasury shares).Resolution 22 is required to reflect the implementation of the Shareholder Rights Directive which,in the absence of a special resolution to the contrary,increased the notice period for general meetings of the Company to 21 days.The Company is currently able to cal

272、l general meetings(other than an AGM)on 14 clear days notice and would like to preserve this ability.The shorter notice period would not be used as a matter of routine,but only where the flexibility is merited by the business of the meeting and it is thought to be to the advantage of the shareholder

273、s as a whole.The approval will be effective until the Companys next AGM,when it is intended that a similar resolution will be proposed.By order of the Board.Timothy J.Kite ACACompany Secretary28 February 201388Corporate governanceletter from the Chairman of the remuneration CommitteeDear Shareholder

274、I am pleased to present the Remuneration Committees report on Directors remuneration for 2012.As you may be aware,the Government has tabled proposals to reform the way Directors remuneration is voted upon and reported.In particular,the Department for Business,Innovation and Skills(BIS)has produced t

275、wo consultation papers,the results of which,amongst other things,will have an impact on the content and presentation of information in the report of the Remuneration Committee.The new legislative requirements will not come into effect until October 2013 but,although not mandatory for this report,the

276、 Committee has decided to adopt some of these changes early.Consistent with the proposals,the report has been split into two sections:a Policy Section,which sets out the policy on the remuneration of the executive and non-executive Directors,and an Implementation Section,which discloses how the remu

277、neration policy has been implemented for the year ending 31 December 2012.We will be seeking your support for both parts of the report by way of a single advisory vote at the forthcoming AGM on 17 May 2013.Derwent Londons continued objective is to deliver above average long-term returns to sharehold

278、ers.In an industry where relatively few people manage a large and complicated business this can only be achieved by recruiting and retaining the right people.At a senior level,the Remuneration Committee is responsible for maintaining a remuneration structure that achieves this.Performance and reward

279、As discussed in the Business Review,the Group has delivered an increase in EPRA net assets per share of 10.9%and a total return of 12.7%.This strong performance in two of the Groups key KPIs resulted in a bonus entitlement of 85.41%once the Committees discretionary element was added to the mathemati

280、cal result.The current economic climate has led to a debate about the“correct”amount of tax that should be paid as opposed to the legal amount.It is against this background that the Committee has decided to pay the Directors bonuses in March,as in previous years,rather than delay the payment into Ap

281、ril when tax rates will be lower.The Committee believes that this is in keeping with the governance standards expected of the Company by its investors.Awards made under the PSP in 2009 were subject to two conditions,one half based on relative total shareholder return(TSR)performance against a group

282、of other real estate companies and the other half based on net asset value growth compared to the return from properties in the IPD Central London Offices Total Return Index.The performance criteria were measured during the year and 50%of the total awards vested as a result of upper quartile positio

283、ning against the TSR peer group.Awards made under the PSP in 2010 are subject to the same performance conditions with the net asset value part of the award measured to 31 December 2012 and the TSR part measured to 1 April 2013.The Committee believes the annual bonus outturn and PSP vesting during th

284、e year fairly represents the Group performance over their respective performance periods.Remuneration Policy for 2013We are committed to ensuring that rewards for executives are closely aligned to the interests of shareholders through having all our incentive arrangements linked to challenging perfo

285、rmance targets.These targets focus our management team on growing the Groups net asset value and increasing total return which in turn should deliver above market returns to shareholders.The Committee is satisfied with the current structure of incentive arrangements being an annual bonus plan(with a

286、 portion deferred in shares)and awards under a PSP.Moreover,we believe the current mix of targets under both incentive schemes is appropriate for the year ahead.That said,the Groups PSP expires in 2014 and we will be taking this opportunity to undertake a full review of the remuneration structure ov

287、er the coming year.The Remuneration Committee encourages dialogue with the Companys leading shareholders and will consult with major shareholders ahead of any significant changes to the remuneration policy.The Committee reviewed executive Directors salary levels in December 2012 and agreed a basic i

288、ncrease of 3%for 2013 which took into account another excellent year of performance by the management team over all areas of the business in 2012,the competitive nature of the market for top performing executives in the real estate sector and the increases awarded throughout the rest of the Company.

289、The Committee made a further award to one recently appointed Director in recognition of his increased experience and importance to the business.The Committee is committed to ensuring that an appropriate balance is struck between the rewards made available to our executives and the risk profile of th

290、e Company and keeps the impact of remuneration on risk under review.As part of our considerations on risk,and in line with emerging best practice,the Committee introduced clawback provisions into the annual bonus plan and PSP during 2012.Following these changes the Committee remains satisfied that t

291、he Companys remuneration policy is fully aligned with the risk profile of the Company.In times when companies remuneration policies are subject to a high level of scrutiny,it is pleasing to note that at last years AGM,the Directors remuneration report was approved by 95%of the votes cast.This level

292、of support from shareholders reinforces the Committees view that the current remuneration structure accords with best practice and that the performance measures used in the variable pay elements of the structure are suitably aligned to the Companys overall performance.June de MollerChairman of the R

293、emuneration Committee28 February 2013Derwent London plc Report&Accounts 201289report of the remuneration CommitteePolicy reportThis part of the report of the Remuneration Committee sets out the remuneration policy for the Company with effect from 1 January 2013.There are no changes to the policy com

294、pared to 2012,which the Committee considers still supports the Groups philosophy and is directly aligned with the business strategy.The Committee,on behalf of the Board,is responsible for determining remuneration packages for the executive Directors and selected other senior executives.It also overs

295、ees the operation of the Groups bonus scheme and PSP and considers whether the schemes encourage the taking of excessive business risk.The key aims of the Committees remuneration policy for senior executives are:to ensure that the Company attracts,retains and motivates executives who have the skills

296、 and experience necessary to make a significant contribution to the delivery of the Groups objectives;to incentivise key executives by use of a remuneration package that is appropriately competitive with other real estate companies taking into account the experience and importance to the business of

297、 the individuals involved,whilst also having broad regard to the level of remuneration in similar sized FTSE 350 companies.The Committee also takes account of the pay and conditions throughout the Company;to align,as far as possible,the interests of the senior executives with those of shareholders b

298、y providing a significant proportion of the Directors total remuneration potential through a balanced mix of short and long-term performance related elements that are consistent with the Groups business strategy;to ensure that incentive schemes are subject to appropriately stretching performance con

299、ditions and designed so as to be consistent with best practice;and to ensure that the Groups remuneration structure does not encourage management to adopt an unacceptable risk profile for the business.The areas covered in this policy report comprise:A table setting out the remuneration policy for ex

300、ecutive Directors.Remuneration scenarios for executive Directors.Description of key remuneration related aspects of service contracts.Chairmans and non-executive Directors fees.90Corporate governancereport of the remuneration CommitteeContinued2013 executive Director policy tablePurpose and link to

301、strategyHow operatedMaximum opportunityPerformance metricsChanges in the yearBase salaryTo help recruit,retain and motivate high-calibre executives.Reflects experience and importance to the business.Reviewed annually,with effect from 1 January.Review reflects:role,experience and performance;economic

302、 conditions;increases throughout the rest of the business;and levels in companies with similar characteristics.Annual increases generally linked to those of the wider workforce though the Remuneration Committee retain discretion to award increases to individuals above this level where appropriate.Fo

303、r promotions,role changes or where a Director gains experience of being in the role,salary increases may be higher than that of the workforce.NoneDirectors salaries increased by approximately 3%for 2013.An additional increase of 12,000 was awarded to Mr Silverman which continues to move his salary t

304、owards the market benchmark.BenefitsTo provide a market competitive benefits package to help recruit and retain high-calibre executives.Medical benefits to help minimise disruption to business.Directors are entitled to private medical insurance,car and fuel allowance and life assurance.n/aNoneNonePe

305、nsionTo help recruit and retain high calibre executives and reward continued contribution to the business.The Company operates a defined contribution pension scheme.Where contributions would exceed either the lifetime or annual contribution limits payments in lieu are made.Directors receive a contri

306、bution of 20%of salary.NoneNoneAnnual bonusTo incentivise the annual delivery of stretching financial targets and personal performance goals.Financial performance measures reflect KPIs of the business.Bonus payments are determined by the Committee after the year end,based on performance against the

307、targets set.Measures and targets for the year ahead are reviewed by the Committee at the start of each financial year.Bonuses up to 100%of salary are paid as cash.Amounts in excess of 100%are deferred into shares of which 50%is released after 12 months and the balance after 24 months.These deferred

308、shares are potentially forfeitable if the executive leaves prior to the share release date.Bonus payments are not pensionable.Clawback provisions apply in the event of misstatement or misconduct.Maximum bonus potential,for the achievement of stretching performance conditions:John Burns and Simon Sil

309、ver 150%of salary.Other executive directors 125%of salary.37.5%of the maximum is based on Groups net asset value performance against IPD Central London Offices Total Return Index.37.5%based on Groups total return against that of major real estate companies.25%based on personal performance objectives

310、.Total return is one of the KPIs used to measure the Groups overall success and its use in calculating a significant part of the Directors bonus ensures an alignment between delivery of the Groups strategy and Directors remuneration.Clawback provisions were implemented during 2012.Derwent London plc

311、 Report&Accounts 201291Purpose and link to strategyHow operatedMaximum opportunityPerformance metricsChanges in the yearLong-term incentive planTo align the long-term interests of the Directors with those of the Groups shareholders.To incentivise value creation over the long-term.To aid retention.Th

312、e Committee makes a conditional award of nil cost options each year.Vesting is determined by the Groups achievements against stretching performance targets over the three subsequent years and continued employment.The Groups performance against the targets is independently verified on behalf of the C

313、ommittee.The Committee considers the appropriateness of measures,their relative weightings and targets prior to each grant.Clawback provisions apply in the event of misstatement or misconduct.Where an employee retires during the three-year vesting period,their award will be adjusted in accordance wi

314、th the scheme rules.Awards will be satisfied by either newly issued shares or shares purchased in the market.Any use of newly issued shares will be limited to corporate governance compliant dilution limits contained in the scheme rules.Normal limit 200%of salary.Limit in exceptional circumstances(e.

315、g.recruitment)300%of salary.Working policy limits currently set at:John Burns and Simon Silver 175%of salary.Other executive directors 150%of salary.50%determined by the Groups total shareholder return compared to a bespoke comparator group of real estate companies.25%vests at median performance wit

316、h full vesting at upper quartile performance.No awards vest for below median performance.50%determined by the Groups net asset value growth compared to the IPD Central London Offices Total Return Index.25%vests at median performance with full vesting for exceeding the median by 5%.No awards vest for

317、 below median performance.Vesting is on a straight line basis between threshold and maximum.The Committee has discretion to reduce the extent of vesting in the event that it considers that performance against the relevant measure of performance(whether TSR or NAV growth)is inconsistent with underlyi

318、ng financial performance.Clawback provisions were implemented during 2012.Share ownership guidelinesTo provide alignment between executives and shareholders.Executive Directors are required to retain at least half of any shares vesting(net of tax)until the guideline is met.John Burns 200%of salary.O

319、ther Executive Directors 100%of salary.NoneNoneNew appointmentsBase salary levels will be set to reflect the experience of the individual,appropriate market data and internal relativities.If it is considered appropriate to appoint a new director on a below market salary through external recruitment

320、or internal promotion,they may be the subject of a series of increases to a desired salary over an appropriate time frame,(e.g.two to three years),subject to performance in post.Normal policy will be for the new director to participate in the remuneration structure detailed above.Should it be the ca

321、se that the Remuneration Committee considered it necessary to buy out incentive pay which an individual would forfeit on leaving their current employer,such compensation,where possible,would be structured so that the terms of the buy-out mirrored the form and structure of the remuneration being repl

322、aced(e.g.vested share awards may be replaced with shares in Derwent London while recently granted long-term incentive awards may be replaced with an exceptional performance related LTIP award).Exit payment policyOutside of the legacy arrangements of the Companys current executive Directors,the Compa

323、nys policy for new appointments will be for service contracts to be terminable by the Company on one years notice and to contain a mitigation clause providing for monthly phased payments throughout the notice period to include pro-rated salary,benefits and pension only,until alternative employment i

324、s found,at which point payments will cease or be reduced accordingly.Other than in the event of certain“good leaver”events(such as redundancy or retirement),no bonus will be payable unless the individual remains employed and is not under notice at the payment date.With regards to LTIP awards,standar

325、d“good leaver”definitions are included in the plan rules which also include the facility to reduce vested awards pro-rata for time served in the relevant period.1 The basic salaries effective from 1 January 2013(2012 equivalents in brackets)are:John Burns 584,000(567,000),Simon Silver 501,000(486,00

326、0),Nigel George 372,000(361,000),Paul Williams 372,000(361,000),Damian Wisniewski 372,000(361,000),David Silverman 357,000(335,000).2 The TSR Comparator Group for 2013 awards remains unchanged from the prior year.The peer companies are:Big Yellow Group plc,British Land plc,Capital&Regional plc,Capit

327、al Shopping Centres Group plc,Great Portland Estates plc,Hammerson plc,Intu Properties plc,Land Securities plc,Quintain Estates and Development plc,St Modwen Properties plc,Segro plc,Shaftesbury plc and Workspace Group plc.TSR will be measured over a single three-year performance period from the dat

328、e of grant and will be calculated by comparing average performance over three months prior to the start and the end of the performance period.TSR calculations are performed independently for the Committee by NBS.92Corporate governancereport of the remuneration CommitteeContinuedVesting profileMedian

329、Upperquartile0255075100125Vesting profile of LTIP element measured against comparator group vesting percentageuntil alternative employment is found,at which point payments will cease or be reduced accordingly.Chairman and non-executive DirectorsThe remuneration for the Chairman is set by the full Bo

330、ard.The remuneration for non-executive Directors,which consists of fees for their services in connection with Board and Board committee meetings and,where relevant,for additional services such as chairing a Board committee,is also set by the whole Board.As part of the recruitment process,the remuner

331、ation of the non-executive Directors was reviewed during 2012 to ensure that the fees were at an appropriate level.Neither the Chairman nor non-executive Directors are eligible for pension scheme membership and do not participate in the Companys bonus or equity-based incentive schemes,although the C

332、hairman has a number of unexercised options granted under the historic LMS Executive Share Option Scheme,details of which are given in table 4 on page 97.The non-executive Directors do not have service contracts and are appointed for three-year terms which expire as follows:Stuart Corbyn,23 May 2015

333、;June de Moller,31 January 2016;Stephen Young,9 July 2013;John Ivey,12 December 2014 and Robert Farnes,31 December 2014.Mr Rayne has a letter of appointment,which runs for three years,expiring on 31 January 2016.In addition to his fee as Chairman,it provides for a car,driver and secretary,together with a contribution to his office running costs.His letter of appointment also contains provisions re