Microsoft Word - NED Review (for circulation at AGM) (49064911 Legal) NORTHACRE PLC ("Northacre" or the "Company") NED Review: review of Consultancy Agreement for circulation at AGM dated 9 June 2016
  1. INTRODUCTION

  2. ADCM Limited ("ADCM" or the "Consultant") was originally appointed pursuant to a consultancy agreement dated 25 June 2013 between ADCM and Northacre (as subsequently amended) (the "Consultancy Agreement").

  3. The performance of ADCM under the Consultancy Agreement as well as the value accruing to Northacre in respect of the services provided is subject to annual review by the non- executive directors (the "NED Review").

  4. As non-executive directors of Northacre, we have conducted the NED Review and are satisfied that ADCM has complied with its obligations under the Consultancy Agreement. A summary of our conclusions is set out below.

  5. ADCM'S INITIATIVES

  6. We have reviewed the projects and achievements delivered by ADCM since its appointment, which include, but are not limited to the following:

  7. securing development schemes for Northacre, such as the appointment of Northacre as Development Manager in respect of the acquisition of New Scotland Yard;

  8. providing support with regards to securing financing options for funding schemes under development by Northacre, such as raising acquisition and development finance for 22 Prince Edward Mansions and refinancing the bridge loan and arranging a new development loan for 1 Palace Street;

  9. provision of strategic advice in respect of sourcing the bidders for the successful exit of 33 Thurloe Square; and

  10. organisation of a global roadshow and media event for Northacre in 2015, starting in the United Arab Emirates, in order to raise Northacre's profile in the region and to facilitate connections with prominent developers.

  11. PERFORMANCE OF ADCM
  12. Performance of the Services

    1. The terms of the Consultancy Agreement require ADCM to provide advice and analysis to Northacre in relation to a number of matters as set out in full in the Schedule to the Consultancy Agreement ("the Services").

    2. We have undertaken a review of the Services, which include (but are not limited to) introducing Northacre to developers and investors in the London area and the UAE, providing strategic advice and guidance, and providing access to an a network of potential funders.

    3. Based on ADCM's initiatives summarised above, we confirm that we are satisfied that ADCM has performed the Services.

      1. Provision of consultant report

      2. The terms of the Consultancy Agreement require ADCM to provide a report to the board of directors of Northacre, on or before 20 December in each year of its service, in relation to the Services that it has provided in the previous twelve months (the "Consultant Report").

      3. We confirm that we have reviewed the Consultant Report submitted in December 2015, and are satisfied that it is an accurate reflection of the activities of ADCM.

      1. VALUE ACCRUED TO NORTHACRE

      2. We are required to review the value that has accrued to Northacre in respect of ADCM's performance.

      3. The projects secured following ADCM's appointment have generated additional fee income through Development Management Fees ("DMF"). DMF from new projects sourced by ADCM is valued at approximately £23.9 million, up from approximately £6.3 million earned prior to ADCM's appointment between 2009 and February 2013.

      4. In addition, ADCM's initiatives have allowed Northacre to distribute interim dividends of 35.43p per share on 5 September 2014, providing liquid returns to its shareholders.

      5. Accordingly, we confirm that we are satisfied that ADCM has provided the anticipated additional value to Northacre as well as its shareholders.

      6. CONCLUSION

      7. ADCM has continued to secure development schemes resulting in both fee income and brand awareness. We, the non-executive directors, are satisfied that the Consultancy Agreement has brought to Northacre the benefits which were anticipated in terms of new business, brand enhancement, guidance and attention to market regulations.

    Northacre plc published this content on 09 June 2016 and is solely responsible for the information contained herein.
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