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Company Registration No. 91678

THE TRAFFORD CENTRE FINANCE LIMITED

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019


DIRECTORS' REPORT


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The directors present their report and the audited financial statements of the company for the year ended 31 December 2019.

The company is incorporated and registered in the Cayman Islands (company number 91678). The company's registered office is 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands KY1-9005.

As the company is an issuer of listed debt on the London Stock Exchange it is therefore required to comply with DTR obligations.

PRINCIPAL ACTIVITYThe principal activity of the company is the provision of financing to The Trafford Centre Limited, which owns intu Trafford Centre. This is funded by the issue of loan notes.

The company’s results and financial position for the year ended 31 December 2019 are set out in full in the income statement, the balance sheet, the statement of changes in equity, the statement of cash flows and the notes to the financial statements.

The company receives interest on the provision of financing to The Trafford Centre Limited at rates equal to those paid on its external debt plus additional interest of 0.01% per annum on the average principal loan amount outstanding. Any financing related fees incurred by the company are also charged on to The Trafford Centre Limited.

BUSINESS REVIEWThe company recorded a loss before taxation of £15,000 compared with a profit of £12,000 for the previous year. Net assets at 31 December 2019 were £1,015,000, a decrease of £15,000 from the 31 December 2018 figure of £1,030,000.

Given the straightforward nature of the business, the company's directors are of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business. The directors have considered the future activity of the business below and within the going concern section.

DIVIDENDSThe directors do not recommend a dividend for the year (2018 £nil).


DIRECTORS' REPORT (CONTINUED)


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FUTURE DEVELOPMENTS AND EVENTS AFTER THE REPORTING DATEThe ongoing volatility in the UK retail market has been further exacerbated by the impact of Covid-19 since the balance sheet date, with non-essential retail in intu’s centres closed between 24 March and 15 June 2020 in order to comply with measures put in place by the UK Government to limit virus transmissions.

The Trafford Centre Limited’s rents received from customers for the quarter beginning 25 March 2020 was significantly reduced with collections at 22 June 2020 totalling 37 per cent. Management are in discussions with customers on the outstanding rents but at this time it is unclear whether these rents will be fully recovered at a later date.

The directors expect there to be continued downward pressure on the The Trafford Centre Limited's property valuations and net rental income in the short term, as retailers adapt to new operating procedures with social distancing measures in place and the long-term effects of the pandemic on the wider UK economy become clear.

There are no financial covenants on the company’s loan notes at 31 December 2019. However, as this debt is amortising and the amortisation payments are included in the definition of finance costs, the affordability of the amortisation payments in relation to the cash generated by the asset is assessed quarterly. The intu group has the ability to contribute cash into the structure in order to meet ongoing finance cost obligations. No additional contribution of cash has been required in 2019, however the factors noted above in relation to intu Trafford Centre’s rent collections and post balance sheet event in relation to intu properties plc (detailed below) have placed additional pressure on the company’s ability to meet its financing obligations.

On 26 June 2020, following unsuccessful negotiations for a group-wide standstill with its lenders, intu properties plc (the ultimate parent company of the company), along with certain intu group entities that provide asset and facilities management services to intu Trafford Centre, were placed into administration.

To enable continued uninterrupted delivery of asset and facilities management services to intu Trafford Centre, from the date of intu properties plc’s administration, The Trafford Centre Limited has entered into a 6-month Transition Services Arrangement (TSA) with intu properties plc’s administrator. As part of the TSA, the administrators require The Trafford Centre Limited to pre-fund costs two months in advance prior to delivery of services.

FINANCIAL RISK MANAGEMENTThe company's financial risk management objectives and policies are set out in note 10 as is the company's exposure to price and liquidity risk.

CAPITAL MANAGEMENTThe directors consider the capital of the company to be the ordinary share capital of £2 (2018 £2). Management of this capital is performed at a group level.

GOING CONCERNFull detail in respect of going concern is set out in note 1. The going concern disclosure details that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.

After reviewing the most recent projections and the sensitivity analysis and having carefully considered the material uncertainty, the directors have formed the judgement that it is appropriate to prepare the financial statements on the going concern basis.




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DIRECTORSThe directors who held office during the year and until the date of this report are given below:

Raulin AmyMartin Breeden (Appointed 10 June 2020)Sean Crosby (Appointed 16 August 2019)David Fischel (Resigned 26 April 2019)Hugh Ford (Appointed 15 April 2020)Minakshi Kidia (Appointed 16 August 2019 and resigned 15 April 2020)Barbara Gibbes (Appointed 26 April 2019 and resigned 16 August 2019)Matthew Roberts

PRINCIPAL RISKS AND UNCERTAINTIESAs the company's principal activity is to provide financing to The Trafford Centre Limited, the company's key risks and uncertainties are those faced by The Trafford Centre Limited to the extent that they impact The Trafford Centre Limited's ability to meet its obligations to the company including those related to the terms of the company's borrowings which are secured on the assets of The Trafford Centre Limited. The key risks and uncertainties facing The Trafford Centre Limited and the company are set out below:




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Risk & Impact Mitigation Change 2019 commentary

Financing

Availability of funds

Reduced availability of funds could limit liquidity, leading to restriction of investing and operating activities.

To enable continued uninterrupted delivery of asset and facilities management services to intu Trafford Centre from the date of intu properties plc's administration, the company has entered into 6-month Transition Services Agreement (TSA) with intu properties plc's administrator. As part of the TSA, the administrators require the company to pre-fund costs two months in advance prior to delivery of services as well as settlement of existing arrears.

+ For more detailed commentary, refer to going concern section in note 1.

Property market

Macro-economic

Weakness in the macroeconomic environment could impact the intu group’s ability to deliver its strategy, customer performance and our visitor’s propensity to visit.

We regularly review the economic outlook against the business plan, including the close monitoring and stress-testing of covenant headroom.

The Company remains focused on maintaining the high-quality nature of the shopping centre, attracting and retaining aspirational customers as well as marketing events targeted at attracting footfall.

+ The economic outlook during 2019 weakened, with the annual growth of the UK economy reported to have slowed.

The trend of administrations and CVAs of customers has continued, and investors have responded by remaining highly cautious. These trends have been exacerbated by the Covid-19 pandemic and could be further impacted if the UK fails to reach a trade deal with the EU by the end of 2020.

This has resulted in lower transaction volumes and a corresponding reduction in property valuations.




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Retail environment

Structural and cyclical changes in the retail environment, including the rise in online shopping, could undermine the intu group’s ability to attract customers and visitors and continue to put pressure on net rental income and property valuations.

We will be collaborating more closely with customers, sharing data and other information so we can adapt better to their changing needs.

The customer mix is proactively managed, and plans have been developed to diversify use of future vacant units.

+ Ongoing structural change is being experienced within the retail market with an increase in administrations and CVAs during the year, exacerbated by the Covid-19 pandemic and closure of non-essential retail during the UK government lockdown between 24 March 2020 and 15 June 2020.

Operations

Pandemic

Pandemic or virus outbreak leading to staff shortages, government interventions, significant reduction in footfall or part/full closure of centres, significant reduction in rental income

Frequent crisis team meetings led by intu properties plc’s CEO, later replaced by a Business Recovery Taskforce led by the Centre Performance Director working across functions to focus on the reopening of our centres.

Liaison with Government, HMRC and external advisors regarding access to applicable financial support measures, including the furlough scheme for employees.

+ In respect of COVID -19, centres were successfully closed to non-essential retail during the lockdown period following well-rehearsed plans which were in place and had been reviewed in line with Public Health England’s advice. Other corresponding mitigating factors have also been put into action.

Health and safety

Accidents, anti-social behaviour, violent crime or system failure leading to reputational loss

There is a strong safety culture.

Consistent health and safety management process and procedures across the portfolio, compliant with OHSAS 18001.

Annual audits of operational standards and crisis management and business continuity plans are tested and in place.

= Primary Authority audits for both health and safety and fire safety are being conducted. These provide assurances surrounding compliance.

A slight increase in anti-social behaviour in the UK has influenced the implementation of new mitigators.




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Cybersecurity

Loss of data and information or failure of key systems resulting in financial and/or reputational loss

We operate robust data and cybersecurity strategies, subject to continuous review and testing –including assessments performed by CREST-accredited external consultancies.

A data committee and data protection officer oversees GDPR compliance.

Management of third parties who hold data.

Employee awareness campaigns and training.

= Significant progress has been made in the year.

An information security architect has been appointed to develop a sustainable cybersecurity framework.

To reduce intu’s threat exposure, new technical and logical security controls have been implemented.

Terrorism

Terrorist incident at an intu or other major shopping centre resulting in a decline in footfall and business disruption

Robust processes and procedures in place, supported by regular training and exercises.

We have strong relationships with police, NaCTSO, CPNI and other agencies. We are NaCTSO-approved to train staff in counter-terrorism awareness programme Action Counters Terrorism.

Crisis management and business continuity plans in place and tested regularly.

An embedded safety culture.

= UK threat level reduced in 2019.

Our Group head of security was appointed as deputy chairman of the Crowded Places Information Exchange. This ensures that intu is abreast of the current threats and work undertaken by Counter Terrorism policing teams in the UK.

Major multiagency security exercises have been held at all five super-regional centres within the last three years and learnings have been embedded into the security strategy.

We invested in airport-style screening technology which can be deployed at any centre when required.

Change in level of risk+ increased= remained the same




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STATEMENT OF DIRECTORS' RESPONSIBILTIESThe directors are responsible for preparing the company financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union for to assist the directors to discharge their obligations under section 4 of the Disclosure and Transparency rules (the ‘DTR’) issued by the United Kingdom’s Financial Conduct Authority and to enable the company to comply with its obligations under various agreements known as ‘The Trafford Centre Securitisation Agreements’.

The directors must not approve the financial statements unless they are satisfied that the financial statements give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing the financial statements, the directors are responsible for:

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selecting suitable accounting policies and then applying them consistently;stating whether applicable IFRS standards as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;making judgements and accounting estimates that are reasonable and prudent; andpreparing the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company.

The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

INDEPENDENT AUDITORDeloitte LLP succeeded PricewaterhouseCoopers LLP as the auditor for the financial year commencing 1 January 2019, further to the resolution passed at the AGM on 3 May 2019.

So far as the Directors are aware, there is no relevant audit information of which the auditor are unaware and each Director has taken all reasonable steps to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

DIRECTORS' CONFIRMATIONS�

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the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company;

the directors report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that they face; and

the financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company’s position and performance

On behalf of the Board

Hugh FordDirector30 June 2020

AndersJ

Stamp

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE TRAFFORD CENTRE FINANCE LIMITED

Report on the audit of the financial statements

1. Opinion In our opinion the financial statements of The Trafford Centre Finance Limited (the ‘Company’):

• give a true and fair view of the state of the Company’s affairs as at 31 December 2019 and of its loss for the year then ended; and

• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

We have audited the financial statements which comprise:

• the income statement and statement of comprehensive income; • the balance sheet; • the statement of changes in equity; • the statement of cash flows; and • the related notes 1 to 15.

The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report.

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the Group and Company for the year are disclosed in note 3 to the financial statements. We confirm that the non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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3. Material uncertainty relating to going concern

We draw attention to note 1 in the financial statements which indicates that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern.

On 26 June 2020, following unsuccessful negotiations for a group-wide standstill with its lenders, intu properties plc (the ultimate parent company of the Company and the Trafford Centre Limited “the Borrower”), along with certain intu group entities that provide asset and facilities management services to intu Trafford Centre, were placed into administration.

To enable continued uninterrupted delivery of asset and facilities management services to intu Trafford Centre from the date of intu properties plc’s administration, the Borrower, who owns intu Trafford Centre, has entered into a 6-month Transition Services Arrangement (TSA) with intu properties plc’s administrator. As part of the TSA, the administrators require the Borrower to pre-fund any costs prior to delivery of services.

The Company’s ability to continue as a going concern is dependent on the Borrower’s ability to continue funding its interest payments, amortisation payments and financing related fees to the Company. The loan notes held within the Company are senior creditors secured against intu Trafford Centre. The Company has back-to-back agreements with the Borrower resulting in an inter-company receivable with the same terms as this senior debt.

The Borrower has further junior funding in place from the Canadian Pension Plan Investment Board (CPPIB) of £250 million through back-to-back agreements with Intu Trafford Centre Group (UK) Limited.

We identified the following areas which we considered to be the key risks giving rise to a material uncertainty in relation to the directors’ going concern assessment and disclose our audit response. Should any of the risk factors discussed in note 1 or below occur, the Company may be unable to make payments as they fall due and may enter administration.

Risk area

Risk of default: The next interest and amortisation payment date relating to the senior loan notes is July 2020. In the event that payment is not made, this is considered an event of default. In the event of a default, the senior loan note holders can enforce their security over intu Trafford Centre, thus taking control. The deferral of interest and amortisation payments (£17.8 million paid quarterly) relating to the senior debt requires consent from the senior loan note holders. There is a risk that additional funding is not secured or consent to the deferral of interest and amortisation payments is not given.

CPPIB have provided a letter of intent in relation to supporting the Borrower, which includes payments relating to the senior loan notes. However, this is not committed and therefore there is risk that the Company is unable to meet its interest and amortisation payments and avoid an event of default.

Implications of the intu properties plc administration There is risk that with new directors, the future strategy of the Company may change and is therefore unknown. There could be a forced sale of intu Trafford Centre, at a significant discount to the 31 December 2019 market value, which would then provide insufficient funds to the Borrower to cover the repayment of amounts due to the Company as they fall due. Commencing the TSA period: In order for the TSA to commence, additional funding of £25 million is required to pay the administrators of intu properties plc and meet the obligations in relation to debt and amortisation payments to the

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Company’s bondholders. Whilst a “letter of intent” has been received from CPPIB, there is uncertainty over receiving the £25 million. During the TSA period: There is risk that additional funding and/or the deferral of amortisation and interest payments in order to meet all obligations as they fall due through the TSA period cannot be secured or agreed. After the TSA period: There is risk that terms cannot be agreed with a suitable third-party asset and facilities management service provider resulting in the closure of intu Trafford Centre. This could result in a number of lease defaults as well as the Borrower having insufficient liquidity due to decreased rental income.

Recoverability of receivable due from The Borrower: As noted above, the amounts owed by The Borrower represent back-to-back agreements between the companies. There is a risk that if the Borrower cannot repay the amounts owed in full, the Company will not be able to meet its own obligations.

Covid-19: Covid-19 has significantly decreased rent and service charge collection. There is a risk that there is a further spike in the Covid-19 pandemic in the United Kingdom resulting in varying levels of lockdown requiring intu Trafford Centre to close. This would result in further decreases in rent and service charge collection, having an adverse effect on the liquidity of the Borrower.

Response

• We challenged the forecast cash flows and assumptions made by Management with particular regard to the current market conditions.

• We have reviewed the TSA and through discussions with Management and their legal advisors understood the lender positions.

• We have reviewed the letter of intent from CPPIB.

• We reviewed key loan and bond documentation to understand the principal terms, including

financial covenants, and performed a review of the Company’s existing and forecast compliance with debt covenants and any associated equity cures / cash traps.

• We have reviewed and challenged the adequacy of the disclosures being made by Management.

As stated in note 1, the events or conditions described above indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

4. Summary of our audit approach

Key audit matter The key audit matter that we identified in the current year was:

• Going concern (see material uncertainty relating to going concern section).

In the prior year the “recoverability of amounts owed by The Trafford Centre Limited” was reported as a key audit matter by the previous auditor. In the current year, this is included within our material uncertainty relating to going concern.

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Materiality The materiality that we used in the current year was £8.04 million which was determined on the basis of 1% of total assets.

Scoping One audit team, led by the Senior Statutory Auditor, audits the Company.

5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

6. Our application of materiality 6.1. Materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Materiality £8.04 million (2018: £8.39 million was used by the previous auditors)

Basis for determining materiality

1% of total assets (2018: 1% of total assets)

Rationale for the benchmark applied

The principal activity of the Company is the provision of financing to The Trafford Centre Limited (TCL). There are back to back financing agreements with TCL resulting in total assets approximating to total liabilities.

6.2. Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 65% of materiality. In determining performance materiality we consider factors including our risk assessment and our assessment of the Company’s overall control environment. As this is our first year as auditor and given the heightened risk due to material uncertainty relating to going concern detailed above, we determined that setting performance materiality at 65% of Company materiality appropriately reflected these matters.

6.3. Error reporting threshold We agreed with the directors that we would report all audit differences in excess of £402,245 (2018: £835,579 was used by the previous auditors), as well as differences below that threshold that, in our view,

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warranted reporting on qualitative grounds. We also report disclosure matters that we identified when assessing the overall presentation of the financial statements.

7. An overview of the scope of our audit Our audit was scoped by obtaining an understanding of the Company and its environment, including controls, and assessing the risks of material misstatement. One audit team, led by the Senior Statutory Auditor, audits the Company. The audit is performed centrally, as the books and records are maintained at head office.

8. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in respect of these matters.

9. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

10. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below.

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A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

11. Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

11.1. Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

• the nature of the industry and sector, control environment and business performance including the design of the Company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;

• results of our enquiries of management and internal audit about their own identification and assessment of the risks of irregularities;

• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to: o identifying, evaluating and complying with laws and regulations and whether they were aware

of any instances of non-compliance; o detecting and responding to the risks of fraud and whether they have knowledge of any actual,

suspected or alleged fraud; o the internal controls established to mitigate risks of fraud or non-compliance with laws and

regulations; • the matters discussed among the audit engagement team and involving relevant internal

specialists, including tax, IT and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory framework that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Listing Rules.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These included the Company’s regulatory solvency requirements.

11.2. Audit response to risks identified As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws and regulations.

Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management, the audit committee and legal counsel concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

http://www.frc.org.uk/auditorsresponsibilities

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• reading minutes of meetings of those charged with governance and reviewing internal audit reports; and

• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Report on other legal and regulatory requirements

12. Other matters 12.1. Auditor tenure

We were appointed by the Board on 2 April 2019 to audit the financial statements for the year ending 31 December 2019 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is one year, covering the year ended 31 December 2019.

12.2. Consistency of the audit report with the report to those charged with governance Our audit opinion is consistent with the additional report to those charged with governance we are required to provide in accordance with ISAs (UK).

13. Use of our report This report is made solely to the Company’s members, as a body in accordance with section 4.1.7 of the Disclosure Guidance and Transparency Rules (DTR) issued by the United Kingdom’s Financial Conduct Authority. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

The engagement partner on the audit resulting in this independent auditor’s report is Claire Faulkner.

Deloitte LLP

Statutory Auditor

London, United Kingdom

30 June 2020

johnarthur

Stamp


INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME


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2019 2018Notes £000 £000

Administrative expenses (47) (33)

Operating loss 3 (47) (33)

Finance costs 4 (43,795) (46,001)Finance income 43,827 46,046Change in fair value of derivative financial instruments 4 - -

(Loss)/profit before taxation (15) 12

Taxation 5 - -

(Loss)/profit for the year (15) 12

Other than the items in the income statement above, there are no other items of comprehensive income and accordingly, a separate statement of comprehensive income has not been prepared.


BALANCE SHEET

AS AT 31 DECEMBER 2019

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2019 2018Notes £000 £000

Non-current assetsDerivative financial instruments 6 106,288 94,412Trade and other receivables 7 660,185 688,012

766,473 782,424

Current assetsTrade and other receivables 7 35,890 54,129Derivative financial instruments 6 1,509 1,481Cash and cash equivalents 618 545

38,017 56,155

Total assets 804,490 838,579

Current liabilitiesTrade and other payables 8 (7,666) (7,992)Borrowings 9 (27,827) (45,652)Derivative financial instruments 6 (1,509) (1,481)

(37,002) (55,125)

Non-current liabilitiesBorrowings 9 (660,185) (688,012)Derivative financial instruments 6 (106,288) (94,412)

(766,473) (782,424)

Total liabilities (803,475) (837,549)

Net assets 1,015 1,030

EquityShare capital 11 - -Other reserves 113 113Retained earnings 902 917

Total equity 1,015 1,030


BALANCE SHEET

AS AT 31 DECEMBER 2019

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The notes on pages 20 to 34 form part of these financial statements

The financial statements of The Trafford Centre Finance Limited (registered number 91678) were approved by the Board of directors and authorised for issue on 30 June 2020 and were signed on its behalf by:

Matthew RobertsDirector

AndersJ

Stamp


STATEMENT OF CHANGES IN EQUITY


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Share capital

Other reserves

Retained earnings

Total equity

£000 £000 £000 £000

Balance at 1 January 2018 - 113 905 1,018

Profit for the year - - 12 12

Total comprehensive income for the year - - 12 12

Balance at 31 December 2018 - 113 917 1,030

Balance at 1 January 2019 - 113 917 1,030

Loss for the year - - (15) (15)

Total comprehensive loss for the year - - (15) (15)

Balance at 31 December 2019 - 113 902 1,015


STATEMENT OF CASH FLOWS


- 19 -

2019 2018Notes £000 £000

Cash flows from operating activitiesCash generated from operations 12 40 8

Interest paid (43,305) (45,361)Interest received 43,338 45,431

Net cash inflow from operating activities 73 78

Investing activitiesAmounts owed by group undertaking received 46,525 23,179

Net cash generated from investing activities 46,525 23,179

Financing activitiesBorrowings repaid (46,525) (23,179)

Net cash used in financing activities (46,525) (23,179)

Net increase in cash and cash equivalents 73 78

Cash and cash equivalents at beginning of year 545 467

Cash and cash equivalents at end of year 618 545


NOTES TO THE FINANCIAL STATEMENTS


- 20 -

1 Accounting convention, basis of preparation and accounting policies

Purpose of financial statementsThe financial statements have been prepared to assist the directors to discharge their obligations under section 4 of the Disclosure and Transparency rules (the 'DTR') issued by the United Kingdom's Financial Conduct Authority and to enable the company to comply with its obligations under various agreements relating to the issue, management, and amortisation of bond issues of various notes issued in February 2000, June 2005, January 2006 and March 2014 where collectively such agreements are known as "The Trafford Centre Securitisation Agreements". They have not been prepared for the purpose of compliance with the requirements of the Companies Act 2006 and are therefore not statutory financial statements.

Basis of preparationThe Trafford Centre Finance Limited is a private company incorporated in the Cayman Islands and isregistered in the Cayman Islands. The address of the company’s registered office is shown on page 1.

The nature of the company’s operations and its principal activities are set out in the directors' report on page 1.

These financial statements are presented in pounds sterling which is the currency of the primary economic environment in which the company operates.

These financial statements are separate financial statements.

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities. A summary of the accounting policies is set out below.

A number of standards and amendments to standards have been issued but are not yet effective for the current year. These are not expected to have a material impact on the company's financial statements.

Critical accounting judgements and key sources of estimation uncertaintyThe preparation of financial statements in conformity with the company’s accounting policies requires the use of judgements and estimates that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Although these judgements and estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those judgements and estimates.

– key sources of estimation uncertaintyThere are no key sources of estimation uncertainty in the preparation of these financial statements.

– critical accounting judgementsGoing concern – when preparing the financial statements, management is required to make an assessment of the entity’s ability to continue as a going concern and prepare the financial statements on this basis unless it either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so. As set out in the going concern section, there are events or conditions that indicate a material uncertainty exists in relation to going concern.

After reviewing the most recent projections and having carefully considered the material uncertainty, the directors have formed the judgement that it is appropriate to prepare the financial statements on the going concern basis.


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)


1 Accounting convention, basis of preparation and accounting policies (Continued)

- 21 -

Going concern

–introductionThe company’s business activities are set out in the Principal Activities section of the Directors' Report on page 1.

The principal activity of the company is the provision of financing to The Trafford Centre Limited (the borrower), which owns intu Trafford Centre. This is funded by the issue of loan notes, which have a carrying value of £688,012,000 at 31 December 2019, and the company receives interest at rates equal to thosepaid on its external debt plus additional interest of 0.01% per annum on the average principal loan amount outstanding. Interest received from the borrower in 2019 totalled £43,338,000. Any financing related fees incurred by the company are also charged on to the borrower. As a result, the company’s ability to continue as a going concern is dependent on the borrower’s ability to continue funding its interest payments,amortisation payments and financing related fees to the company. These loan notes are senior creditors secured against intu Trafford Centre. The borrower also has funding in place from CPPIB through back-to-back agreements with Intu Trafford Centre Group (UK) Limited.

On 26 June 2020, following unsuccessful negotiations for a group-wide standstill with its lenders, intu properties plc (the ultimate parent company of the company and the borrower), along with certain intu group entities that provide asset and facilities management services to intu Trafford Centre, were placed into administration.

To enable continued uninterrupted delivery of asset and facilities management services to intu Trafford Centre from the date of intu properties plc’s administration, the borrower has entered into a 6-month Transition Services Arrangement (TSA) with intu properties plc’s administrator. As part of the TSA, the borrower is required to pre-fund costs two months in advance to the administrators prior to delivery of services as well as settlement of existing arrears. Beyond the 6-month TSA, the borrower will need to transition to a third-party asset and facilities management service provider.

The most recent forecasts used to assess going concern are based on the TSA cash flows of the borrower which are for a 6-month period from the date of intu properties plc’s administration. These cash flows have been extended through the going concern period; however, there is a material uncertainty (as discussed below) on the future strategic direction of the company beyond the 6-month TSA period. The TSA cash flows include assumptions in respect of net rental income, giving particular consideration to the impact of Covid-19 on future collections, as well as TSA costs, professional fees, and debt service costs.

–material uncertaintyDue to the factors described as follows, a material uncertainty exists which may cast significant doubt on the company’s ability to continue as a going concern.

The directors have considered the liquidity requirements of the borrower and their ability to meet their obligations as they fall due throughout the going concern period. As part of this assessment, the directors took note of written and verbal correspondence between CPPIB and the borrower, who prior to the borrower entering into the TSA expressed an intention to fund the borrower with a £25 million 6-month facility to ensure sufficient liquidity to meet its short-term obligations to October 2020. CPPIB have also indicated they would be willing to provide additional funding in order to ensure sufficient liquidity in the borrower. At the date of these financial statements, this additional funding is still in negotiation and the directors do not have certainty that it will be secured.





- 22 -

In the absence of agreeing funding with CPPIB, the company could also seek agreement to defer interest and/or amortisation payments from its lenders. These measures would require consents to be received from the lenders, the achievement and timing of which are outside the control of the directors.

Beyond the 6-month TSA, the borrower will need to transition to a third-party asset and facilitiesmanagement service provider. As part of its contingency planning, particularly given the scale and complexity of intu Trafford Centre, the directors of the borrower have begun meeting potential asset and facilities management providers that could be put in place at the end of a 6-month TSA period, or earlier if deemed suitable.

Along with this transition, it is likely new directors will be appointed to the company and the borrower. This change could result in a different strategic direction for intu Trafford Centre, which could include new funding being put in place or the sale of the asset.

Post the TSA period the borrower will require further funding which could include extending the £25 million CPPIB debt beyond the 6-month proposed initial term, as well as interest and/or amortisation waivers from the borrower's lenders. Each of these would require the relevant lender consents which are outside of the control of the directors.

Significant market uncertainty remains regarding the impact of Covid-19 on the operations of intu Trafford Centre. The centre remained semi-closed from the end of March 2020 with essential stores the only ones permitted to trade. From 15 June 2020 non-essential stores have begun to trade, with the opening of leisure and catering customers still to be confirmed. Additionally, at this time, the speed of recovery as the UK comes out of lockdown remains unclear. In the event lockdown measures were re-imposed, this could have a significant adverse effect on the future liquidity of the borrower, including further negative impacts on rent and service charge collection, as well as impacting the future sale value of the asset.

The directors have considered the impact of an event of default in the borrower. The lenders prospect of enforcement is outside of the control of the directors.

If one or more of the events described in the material uncertainty above occur, this could result in the company and the borrower entering administration. This could occur as soon as the date of the company’s next scheduled interest and amortisation payment in July 2020. An administration for the company and the borrower would likely also result in a period of closure for intu Trafford Centre while additional funding and/or a third-party asset and facilities management provider is put in place.

The directors are also mindful of the ultimate recoverability of the full balance outstanding with the borrower and are mindful that in a scenario where the company and borrower enter administration and there were to be a forced sale of intu Trafford Centre outside of the control of the company, at a discount of 30% to the 31 December 2019 market value of £1.6 billion there would be sufficient proceeds for the company’s noteholders to be repaid in full. The directors have noted the market value is expected to decline over 20% from 31 December 2019 to 30 June 2020.

–conclusionThe events or conditions described above indicate that a material uncertainty exists that may castsignificant doubt on the company’s ability to continue as a going concern.

After reviewing the most recent projections and having carefully considered the material uncertainty, the directors have formed the judgement that it is appropriate to prepare the financial statements on the going concern basis.

In forming this conclusion, the directors have taken note of the similar material uncertainty conclusions reached by the directors of the borrower in their assessment of going concern.

The auditors’ report refers to this material uncertainty surrounding going concern.





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Interest income and expenseInterest income and expense is accrued on a time basis, by reference to the principal outstanding and the effective interest rate.

Cash and cash equivalentsCash and cash equivalents comprise cash in hand, deposits with banks, whether restricted or unrestricted and other short-term liquid investments with original maturities of three months or less.

Trade receivablesTrade receivables are recognised initially at their transaction price and subsequently measured at amortised cost less loss allowance for expected credit losses.

When applying a loss allowance for expected credit losses, judgement is exercised as to the collectability of trade receivables and to determine if it is appropriate to impair these assets. When considering expected credit losses, management has taken into account days past due, credit status of the counterparty and historical evidence of collection.

Trade payablesTrade payables are recognised initially at fair value and subsequently measured at amortised cost.

BorrowingsBorrowings are initially recognised at fair value taking into account attributable transaction costs and subsequently carried at amortised cost with any transaction costs, premiums or discounts recognised over the contractual life in the income statement using the effective interest method.

In the event of early repayment, all unamortised transaction costs are recognised immediately in the income statement.

DerivativesThe company uses derivative financial instruments to manage exposure to interest rate risk. They are initially recognised on the trade date at fair value and subsequently re-measured at fair value. In assessing fair value the company uses its judgement to select suitable valuation techniques and make assumptions that are mainly based on market conditions existing at the balance sheet date. The fair value of interest rate swaps is calculated by discounting estimated future cash flows based on the terms and maturity of each contract and using market interest rates for similar instruments at the measurement date. These values are tested for reasonableness based upon broker or counterparty quotes.

Amounts paid under interest rate swaps on obligations as they fall due are recognised in the income statement as finance costs. Fair value movements on revaluation of derivative financial instruments are shown in the income statement through changes in fair value of financial instruments.

The company does not currently apply hedge accounting to its interest rate swaps.

TaxationCurrent tax is the expected tax payable on the taxable income for the year and any adjustment in respect of prior years. It is calculated using rates applicable at the balance sheet date.





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Deferred taxDeferred tax is provided using the balance sheet liability method in respect of temporary differences between the carrying amounts of assets and liabilities in the balance sheet and their tax bases.

Temporary differences are not provided on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future.

Deferred tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised only to the extent that management believe it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are offset only when they relate to taxes levied by the same authority and the group intends to settle them on a net basis.

Tax is included in the income statement except when it related to items recognised directly in other comprehensive income or equity, in which case the related tax is also recognised directly in other comprehensive income or equity.

Current/non-current classificationCurrent assets include assets held primarily for trading purposes, cash and cash equivalents, and assets expected to be realised in, or intended for sale or consumption within one year of the reporting date. All other assets are classified as non-current assets.

Current liabilities include liabilities held primarily for trading purposes and expected to be settled within one year of the reporting date. All other liabilities are classified as non-current liabilities.

Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

2 Operating segments

Management have not identified separate operating segments and rely on information presented in the primary statements for decision making purposes.

3 Operating loss

The operating loss for the year ended 31 December 2019 of £47,000 (2018 operating loss of £33,000) includes fees in respect of auditor's remuneration of £9,375 (2018 £5,163) in respect of the audit of the financial statements. No non-audit services were provided during the year (2018 £4,634).

The directors did not receive or waive any emoluments (2018 £nil) in respect of their services to the company.

There were no employees during the year (2018 none).




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4 Net finance income2019 2018£000 £000

Finance incomeOn amounts due from group undertaking 43,827 46,046

Finance costsOn borrowings (43,762) (45,986)Other interest (33) (15)

(43,795) (46,001)

Change in fair value of financial instrumentsOn external derivative financial instruments (11,876) 8,844On derivative financial instruments with The Trafford Centre Limited 11,876 (8,844)

- -

5 Taxation

The company is subject to UK corporation tax on its profits. The tax expense for the year is higher than (2018 lower than) the standard rate of corporation tax in the UK. The differences are explained below:

2019 2018£000 £000

(Loss)/profit before tax (15) 12

(Loss)/profit before tax multiplied by the standard rate of tax in the UK of 19% (2018 19%) (3) 2Utilisation of tax losses not previously recognised - (1)Group relief (without payment) 3 (1)

Tax expense - -

Deferred taxThe company has tax losses arising in the UK of £2,563,000 (2018 £2,583,000) that are available for offset against future taxable profits. No deferred tax asset is recognised in respect of these losses due to uncertainty over the level of taxable profits against which these losses can be used in future periods.

6 Derivative financial instruments

All derivative financial instrument liabilities relate to interest rate swaps with an external counterparty which are classified as fair value through profit or loss. All derivative financial instrument assets relate to interest rate swap arrangements with The Trafford Centre Limited under the same terms as the interest rate swaps with the counterparty.




- 26 -

7 Trade and other receivablesCurrent Non-current

2019 2018 2019 2018£000 £000 £000 £000

Amounts owed by group undertaking 28,692 46,525 669,145 697,838Less: finance costs (865) (873) (8,960) (9,826)

Net loan amount 27,827 45,652 660,185 688,012

Accrued income and other amounts due from group undertaking 7,678 8,094 - -Prepayments 373 373 - -VAT recoverable 12 10 - -

35,890 54,129 660,185 688,012

The amounts owed by group undertaking relate to an intercompany loan with The Trafford Centre Limited where the company’s borrowings with external parties are passed to The Trafford Centre Limited. Theamounts owed are unsecured and the repayment profile matches the maturity profile of the company’s borrowings as The Trafford Centre Limited is required to provide funds to the company in order for it to meet its external funds obligations. The recoverability of this balance has been reviewed and as a result no provision for expected credit losses is considered to be required. As part of the recoverability review, a scenario where the company and The Trafford Centre Limited enter administration and there were to be a forced sale of intu Trafford Centre outside of the control of the company, at a discount of 30% to 31 December 2019 market value there would be sufficient proceeds for the company’s note holders to be repaid in full. The directors have noted in the going concern section of these financial statements the market value is expected to decline over 20% from 31 December 2019 to 30 June 2020. There have been no impairments on other receivables or amounts written off in the year.

Interest is due on the intercompany loans at rates equal to those paid on the external debt plus additional interest of 0.01% per annum on the average principal loan amount outstanding. Interest is also due to cover any fees and costs incurred by the company.

8 Trade and other payables2019 2018£000 £000

Amounts owed to group undertakings 63 6Accruals 7,602 7,986Other payables 1 -

7,666 7,992

Amounts owed to group undertakings are unsecured and repayable on demand. No interest is charged on these amounts.




- 27 -

9 BorrowingsInterest Final Carrying Fair Carrying Fair

rate maturity value value value value2019 2019 2018 2018£000 £000 £000 £000

Current secured notesClass:A2 6.50% 2023 13,180 16,654 12,376 15,232A4 2.88% 2019 - - 20,000 20,075B 7.03% 2029 5,098 5,876 4,764 5,435D2 8.28% 2022 10,414 11,353 9,385 10,440

Debt falling due within one year 28,692 33,883 46,525 51,182

Less: finance costs (865) - (873) -

Net loan amount 27,827 33,883 45,652 51,182

Non-current secured notesClass:A2 6.50% 2033 260,983 354,551 274,163 364,669A3 Floating 2035 188,500 176,436 188,500 163,695B 7.03% 2029 57,518 70,925 62,617 77,015B2 Floating 2035 20,000 18,864 20,000 17,475B3 4.25% 2024 20,000 21,544 20,000 21,343D1(N) Floating 2035 29,054 22,146 29,054 20,690D2 8.28% 2022 23,090 24,953 33,504 37,190D3 4.75% 2024 70,000 71,000 70,000 75,523

Debt falling due after one year 669,145 760,419 697,838 777,600

Less: finance costs (8,960) - (9,826) -

Net loan amount 660,185 760,419 688,012 777,600

Total borrowings 688,012 794,302 733,664 828,782

2019 2018£000 £000

Repayable within one year 28,692 46,525Repayable in more than one year but not more than two years 31,017 28,693Repayable in more than two years but not more than five years 171,512 87,163Repayable in more than five years 466,616 581,982

697,837 744,363




9 Borrowings(Continued)

- 28 -

The secured notes have the benefit of a floating charge over all of the assets and undertakings of the company and in addition are secured against The Trafford Centre Securitisation Agreements together with the benefit of a fixed legal charge over the land and buildings comprising The Trafford Centre granted by The Trafford Centre Limited, a fellow subsidiary undertaking of Intu Trafford Centre Group (UK) Limited and owner of intu Trafford Centre.

Interest on the Class A3, Class B2 and Class D1(N) secured notes whose rates are based on LIBOR plus an applicable margin has been hedged under interest rate swap contracts totalling £237,554,000 (2018£237,554,000) with rates of 4.20%, 4.34% and 4.66%. The fair value of these interest rate swaps at 2019 was a liability of £107,797,000 (2018 £95,893,000).

10 Financial risk management

The company is exposed to a variety of financial risks arising from the company’s operations beingprincipally market risk (including interest rate risk), credit risk and liquidity risk.

The majority of the company’s financial risk management is carried out by intu properties plc’s treasury department and the group's policies for managing each of these risks as they apply to the company and their impact on the results for the year are summarised below. Further details of intu properties plc's financial risk management are disclosed in the group's publicly available financial statements.

Market risk

Interest rate riskInterest rate risk comprises of both cash flow and fair value risks. Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Fair value interest rate risk is the risk that the fair value of financial instruments will fluctuate as a result of changes in market interest rates.

The company’s interest rate risk arises from borrowings issued at variable rates that expose the company to cash flow interest rate risk, whereas borrowings issued at fixed interest rates expose the company to fair value interest rate risk.

Bank debt is typically issued at floating rates linked to LIBOR. Bond debt and other capital market debt is generally issued at fixed rates.

The Group is aware that LIBOR will be discontinued after 2021 and is actively monitoring the output from the various working groups on LIBOR reform.

It is the Group's policy, and often a requirement of the Group’s lenders, to eliminate substantially all exposure to interest rate fluctuations by using floating to fixed interest rate swaps (referred to as allocated swaps) in order to establish certainty over cash flows. Such allocated swaps have the economic effect of converting borrowings from floating to fixed rates. As a consequence, the Company, through loans owed to group undertakings, is exposed to market price risk in respect of the fair value of its fixed rate interest rate swaps.

The table below shows the effect of interest rate swaps on the borrowings profile of the company:




10 Financial risk management (Continued)

- 29 -

Fixed Floating Fixed Floating2019 2019 2018 2018£000 £000 £000 £000

Borrowings 460,283 237,554 506,809 237,554Interest rate swap impact 237,554 (237,554) 237,554 (237,554)

Net borrowings profile 697,837 - 744,363 -

Interest rate protection on floating debt 100% 100%

The weighted average rate of interest rates contracted through interest rate swaps is 4.4 per cent (2018 4.4 per cent).

The impact on the total fair value of derivatives and the inverse change in fair value of financial instruments of a 50 basis point increase in the level of interest rates would be a credit to the income statement and increase in equity of £20,628,000 (2018 £20,882,000). The approximate impact of a 50 basis point reduction in the level of interest rates would be a change to the income statement and decrease in equity of £20,628,000 (2018 £20,882,000). In practice, a parallel shift in the yield curve is highly unlikely. However, the above sensitivity analysis is a reasonable illustration of the possible effect from the changes in slope and shifts in the yield curve that may occur. Due to offsetting loans and derivative contracts with The Trafford Centre Limited the impact of interest rate movements on the company is minimal as the cash flows from the assets and liabilities will be symmetrical.

Liquidity riskLiquidity risk is managed to enable the company to meet future payment obligations when financial liabilities fall due. Liquidity analysis is conducted to ensure that sufficient headroom is available to meet the operational requirements and committed investments. The intu properties plc treasury policy aims to meet this objective through maintaining adequate cash, marketable securities and committed facilities to meet these requirements. The group’s policy is to seek to optimise its exposure to liquidity risk by balancing its exposure to interest rate risk and to refinancing risk. In effect the group seeks to borrow for as long as possible at the lowest acceptable cost.





- 30 -

The tables below set out the maturity analysis of the company’s financial liabilities based on theundiscounted contractual obligations to make payments of interest and to repay principal. Where interest payment obligations are based on a floating rate the rates used are those implied by the par yield curve.

Within 1 year or on demand

1-2 years 3-5 years Over 5 years Total

£000 £000 £000 £000 £000

At 31 December 2019Borrowings (including interest) (61,104) (61,192) (247,942) (578,993) (949,231)Amounts owed to group undertakings (63) - - - (63)Net derivative payments (8,624) (8,720) (25,561) (77,526) (120,431)

(69,791) (69,912) (273,503) (656,519) (1,069,725)

Within 1 year or on demand

1-2 years 3-5 years Over 5 years Total

£000 £000 £000 £000 £000

At 31 December 2018Borrowings (including interest) (81,534) (61,859) (175,134) (728,692) (1,047,219)Amounts owed to group undertakings (6) - - - (6)Net derivative payments (8,255) (7,870) (22,136) (73,972) (112,233)

(89,795) (69,729) (197,270) (802,664) (1,159,458)

Credit riskThe credit risk relating to cash deposits is actively managed by the intu properties plc treasury department.

Relationships are maintained with a number of tier one institutional counterparties, ensuring compliance with intu properties plc company policy relating to limits on the credit ratings of counterparties (between BBB+ and AAA).

Excessive credit risk concentration is avoided through adhering to authorised limits for all counterparties.





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Classification of financial assets and liabilities

The tables below set out the company’s accounting classification of each class of financial assets and liabilities, and their fair values.

The fair values of quoted borrowings are based on the asking price.

The fair values of derivative financial instruments are determined from observable market prices or estimated using appropriate yield curves at 31 December each year by discounting the future contractual cash flows to the net present values.

Carrying value Fair value

Gain/(loss) to income statement

2019 £000 £000 £000

Derivative financial instrument 107,797 107,797 11,876

Total financial assets - fair value through profit or loss 107,797 107,797 11,876

Trade and other receivables 695,690 801,980 -Cash and cash equivalents 618 618 -

Total financial assets - amortised cost 696,308 802,598 -

Derivative financial instrument (107,797) (107,797) (11,876)

Total financial liabilities - fair value through profit or loss (107,797) (107,797) (11,876)

Trade and other payables (63) (63) -Borrowings (688,012) (794,302) -

Total financial liabilities - amortised cost (688,075) (794,365) -





- 32 -

Carrying value Fair value

Gain/(loss) to income statement

2018 £000 £000 £000

Derivative financial instrument 95,893 95,893 (8,844)

Total financial assets - fair value through profit or loss 95,893 95,893 (8,844)

Trade and other receivables 741,758 845,257* -Cash and cash equivalents 545 545 -

Total financial assets - amortised cost 742,303 845,802 -

Derivative financial instrument (95,893) (95,893) 8,844

Total financial liabilities - fair value through profit or loss (95,893) (95,893) 8,844

Trade and other payables (6) (6) -Borrowings (733,664) (837,163)* -

Total financial liabilities - amortised cost (733,670) (837,169) -

* The 31 December 2018 fair value of the D1(N) loan notes included in borrowings has been restated to reflect the fair value attributable to the company. This previously reflected the intu Group's net position. The impact on the 31 December 2018 figures is an increase of £8,381,000. The same restatement is also reflected in trade and other receivables as a result of the financing arrangement with The Trafford Centre Limited. No financial statement line item is affected by the restatement.

The only financial assets and liabilities of the company recognised at fair value are derivative financial instruments. These are all held at fair value through profit or loss and are categorised as level 2 in the fair value hierarchy as explained below.

Fair value hierarchyLevel 1: Valuation based on quoted market prices traded in active markets.Level 2: Valuation techniques are used, maximising the use of observable market data, either

directly from market prices or derived from market prices.Level 3: Where one or more inputs to valuation are unobservable. Valuations at this level are

more subjective and therefore more closely managed, including sensitivity analysis of inputs to valuation models. Such testing has not indicated that any material difference would arise due to a change in input variables.

Transfers into and out of the fair value hierarchy levels are recognised on the date of the event or change in circumstance that caused the transfer. There were no transfers in or out for the above financial assets and liabilities during the year.

Valuation techniques for level 2 hierarchy financial assets and liabilities are presented in the accounting policies.

There were no gains or losses arising on financial assets or liabilities recognised direct to equity (2018 £nil).




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11 Share capital 2019 2018£ £

Issued, called up and fully paid2 (2018 2) Ordinary shares of £1 each 2 2

12 Cash generated from operations2019 2018£000 £000

(Loss)/profit before tax (15) 12

Adjustments for:Finance costs 43,795 46,001Finance income (43,827) (46,046)

Movements in working capital:Decrease in trade and other receivables 30 1,877Increase/(decrease) in trade and other payables 57 (1,836)

Cash generated from operations 40 8

13 Related party transactions

During the year the company entered into the following transactions with other group companies:

2019 2018Nature of transaction £000 £000

The Trafford Centre Limited* Interest receivable 43,827 46,046

Significant balances outstanding between the company and other group companies are shown below:

Amounts owed by2019 2018£000 £000

The Trafford Centre Limited 695,690 741,758




13 Related party transactions (Continued)

- 34 -

Amounts owed to2019 2018£000 £000

Intu Trafford Centre Group (UK) Limited* 63 6

*The company's registered office is 40 Broadway, London, SW1H 0BT.

14 Ultimate parent company

The ultimate parent company is intu properties plc, a company incorporated and registered in England and Wales, copies of whose financial statements may be obtained from the Company Secretary, 40 Broadway,London, SW1H 0BT. The immediate parent company is The Trafford Centre Holdings Limited, a company incorporated and registered in England and Wales, copies of whose financial statements may be obtained as above. The registered office of The Trafford Centre Holdings Limited is 40 Broadway, London, United Kingdom, SW1H 0BT.

15 Events after the reporting date

In Q1 2020, the existence of a global virus outbreak known as Covid-19 was confirmed. Non-essential retail in intu’s centres closed between 24 March and 15 June 2020 in order to comply with measures put in place by the UK Government to limit virus transmissions.

The Trafford Centre Limited’s rents received from customers for the quarter beginning 25 March 2020 were significantly reduced with collections at 22 June 2020 totalling 37 per cent. Management are in discussions with customers on the outstanding rents but at this time it is unclear whether these rents will be fully recovered at a later date.

The directors continue to monitor the impact of Covid-19 on the collection of rents and ongoing review of cash projections and sensitivity analysis are conducted.

On 26 June 2020, following unsuccessful negotiations for a group-wide standstill with its lenders, intu properties plc (the ultimate parent company of The Trafford Centre Limited and the company), along with certain intu group entities that provide asset and facilities management services to intu Trafford Centre, were placed into administration.

To enable continued uninterrupted delivery of asset and facilities management services to intu Trafford Centre from the date of intu properties plc’s administration, the borrower has entered into a 6-month Transition Services Arrangement (TSA) with intu properties plc’s administrator. As part of the TSA, the borrower is required to pre-fund costs two months in advance to the administrators prior to delivery of services as well as settlement of existing arrears.

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