Interim Results - Part 3
Land Securities PLC
14 November 2001
PART 3
LAND SECURITIES
NOTES TO THE INTERIM RESULTS
for the six months ended 30 September 2001
NOTE 1 INTERIM RESULTS
The Accounting Standards Board (ASB) has issued a non-mandatory statement
'Interim Reports', which seeks to codify best practice in the presentation of
interim results. The Interim Results, which incorporate a revaluation of
investment properties as at 30 September 2001, have been prepared having
regard to the guidance in the ASB statement and on the basis of the accounting
policies set out in the group's audited financial statements for the year
ended 31 March 2001, except that in these interim results the group has
adopted the Urgent Issues Task Force Abstract 28 'Operating Lease Incentives
(UITF28) and Financial Reporting Standard 'Deferred Tax' (FRS19) and restated
comparative figures accordingly.
UITF28 requires property companies to treat any incentive for lessees to enter
into lease agreements as a revenue cost and also to account for rental income
from the commencement and not, as was the group's practice, the expiry date,
of any rent-free period. The group has, therefore, changed its accounting
policy for leases commencing on or after 1 April 2000. The cost of all lease
incentives (such as rent-free periods or contributions to fitting out costs)
is now offset against the total rent due and the net rental income is then
spread evenly over the shorter of the period from the rent-free or rent
commencement date, as appropriate, to the date of the next rent review or the
lease end date.
FRS19 requires that deferred tax is recognised in full in respect of
transactions or events that have taken place by the balance sheet date and
which could give the group an obligation to pay more or less tax in the
future. However, the FRS requires that deferred tax is not recognised on
revaluation gains and losses where these are not taken to the profit and loss
account. The group's accounting policy had been to account for deferred tax to
the extent that liabilities or assets were expected to be payable or
receivable in the foreseeable future. In accordance with FRS19, the group has
now changed its policy to make full provision for timing differences, which in
the group's case arise primarily from capital allowances and industrial
building allowances. Following the sale or demolition of a property, any
deferred tax provisions not required will be released to the profit and loss
account.
The financial information for the year to 31 March 2001, extracted from the
group's financial statements to that date and which received an unqualified
auditors' report, did not contain a statement under Section 237(2) or (3) of
the Companies Act 1985 and have been filed with the Registrar of Companies;
these results and the previous interim results have been restated to reflect
the application of UITF28 to all leases commencing 1 April 2000 and the
effects of adopting FRS19.
The Interim Results for the six months ended 30 September 2001 were approved
by the Directors on 14 November 2001.
NOTE 2 RESTATEMENT OF COMPARATIVES
The effects of adopting UITF28 (Operating Lease Incentives) and FRS19
(Deferred Tax) for the current and comparative prior periods are as follows:
Gross Taxation Profit Earnings Earnings
Property after per share per share
income taxation (pence) (pence)
£m £m £m Basic Diluted
-------- -------- -------- -------- --------
YEAR ENDED 31 MARCH
2001
As previously
reported 647.2 (81.5) 233.1 44.57 44.14
Effect of adopting
UITF28 3.2 (1.1) 2.1 .41 .38
Effect of adopting
FRS19 (4.8) (4.8) (.92) (.87)
------ ------ ------ ------ ------
As restated 650.4 (87.4) 230.4 44.06 43.65
====== ====== ====== ====== ======
SIX MONTHS ENDED
30 SEPTEMBER 2000
As previously
reported 266.1 (40.1) 108.4 20.73 20.60
Effect of adopting
UITF28 1.3 (.4) .9 .17 .15
Effect of adopting
FRS19 (5.5) (5.5) (1.05) (.99)
------ ------ ------ ------ ------
As restated 267.4 (46.0) 103.8 19.85 19.76
====== ====== ====== ====== ======
SIX MONTHS ENDED
30 SEPTEMBER 2001
Without adopting
UITF28 and FRS19 433.3 (45.8) 120.9 23.07 22.81
Effect of adopting
UITF28 1.9 (.7) 1.2 .23 .22
Effect of adopting
FRS19 (.6) (.6) (.12) (.11)
------- ------ ------ ------ ------
As reported 435.2 (47.1) 121.5 23.18 22.92
====== ====== ====== ====== ======
Goodwill Share- Net assets Net assets
holders' per share per share
funds (pence) (pence)
£m £m Basic Diluted
--------- --------- --------- ---------
YEAR ENDED 31 MARCH
2001
As previously reported 41.9 6,150.9 1175 1154
Effect of adopting
UITF28 (1.1) - -
Effect of adopting
FRS19 (.7) (122.4) (24) (23)
------ ------ ------ ------
As restated 41.2 6,027.4 1151 1131
====== ====== ====== ======
SIX MONTHS ENDED 30
SEPTEMBER 2000
As previously reported - 5,997.8 1147 1128
Effect of adopting
UITF28 (.4) - -
Effect of adopting
FRS19 (123.1) (23) (22)
------ ------- ------- -------
As restated - 5,874.3 1124 1106
====== ====== ====== ======
SIX MONTHS ENDED
30 SEPTEMBER 2001
Without adopting
UITF28 and FRS19 39.9 6,193.7 1181 1159
Effect of adopting
UITF28 - (1.8) - -
Effect of adopting
FRS19 - (122.3) (23) (21)
------ ------ ------ ------
As reported 39.9 6,069.6 1158 1138
====== ====== ====== ======
NOTE 3 SEGMENTAL INFORMATION
Six months Six months Six months
to 30.9.01 to 30.9.01 to 30.9.01
(unaudited) (unaudited) (unaudited)
Property Total Total
investment Property
Services
£m £m £m
-------- -------- --------
(i) PROFIT AND LOSS
ACCOUNT
GROSS PROPERTY INCOME 287.9 147.3 435.2
======= ====== ======
NET RENTAL INCOME 249.0 32.1 281.1
Property management
and administration
expenses (24.0) (11.5) (35.5)
------ ------ ------
OPERATING PROFIT 225.0 20.6 245.6
Profit on sales of
properties 3.5 - 3.5
------ ------ ------
PROFIT ON ORDINARY
ACTIVITIES BEFORE
INTEREST AND TAXATION 228.5 20.6 249.1
====== ====== ======
Six months Year to Year to Year to
to 30.9.00 31.3.01 31.3.01 31.3.01
unaudited (audited/ (audited/ (audited/
(restated) restated) restated) restated)
Total
Property
Services
Property Property (see Note
Investment investment below) Total
£m £m £m £m
--------- --------- --------- ---------
(i) PROFIT AND LOSS
ACCOUNT
GROSS PROPERTY INCOME 267.4 553.1 97.3 650.4
====== ====== ====== ======
NET RENTAL INCOME 232.8 478.0 22.7 500.7
Property management
and administration
expenses (17.4) (35.4) (10.3) (45.7)
------ ------ ------ ------
OPERATING PROFIT 215.4 442.6 12.4 455.0
Profit on sales of
properties .4 6.3 - 6.3
------ ------ ------ ------
PROFIT ON ORDINARY
ACTIVITIES BEFORE
INTEREST AND TAXATION 215.8 448.9 12.4 461.3
====== ====== ====== ======
NOTE 3 SEGMENTAL INFORMATION (continued)
30.9.01 30.9.01 30.9.01
(unaudited) (unaudited) (unaudited)
Total
Property Property
investment Services Total
£m £m £m
-------- -------- --------
(ii) NET ASSETS
FIXED ASSETS 7,909.0 424.2 8,333.2
NET CURRENT
LIABILITIES (37.3) (94.8) (132.1)
====== ======
LONG TERM
LIABILITIES
AND PROVISIONS (2,131.5)
-------
NET ASSETS 6,069.6
=======
30.9.00 31.3.01 31.3.01
(unaudited (audited/ (audited/
/restated) restated) restated)
Total
Property
Services
Property Property (see Note
Investment investment below) Total
£m £m £m £m
-------- -------- -------- --------
(ii) NET ASSETS
FIXED ASSETS 7,739.7 7,956.0 341.5 8,297.5
NET CURRENT
LIABILITIES (200.1) (379.2) (5.1) (384.3)
====== ======
LONG TERM LIABILITIES
AND PROVISIONS (1,665.3) (1,885.8)
------ ------
NET ASSETS 5,874.3 6,027.4
====== ======
As Trillium, the total property services business unit of the group, was
acquired in November 2000, there is no corresponding segmental information for
total property services for the six months ended 30 September 2000.
Consequently, also, the information for that segment for the year ended 31
March 2001 is for a four month period.
NOTE 4 NET RENTAL INCOME
Six months
to Year to
Six months 30.9.00 31.3.01
to 0.9.01 unaudited audited
unaudited (restated) (restated)
£m £m £m
--------- --------- --------
Rental income 262.0 244.3 501.6
Property services
income 147.3 - 97.3
Service charges and
other recoveries 25.9 23.1 51.5
----- ----- -----
Gross property income 435.2 267.4 650.4
Ground rents payable (54.8) (8.7) (47.7)
Other property
outgoings (99.3) (25.9) (102.0)
(154.1) (34.6) (149.7)
------ ------ ------
281.1 232.8 500.7
====== ====== ======
All income was derived from within the United Kingdom from continuing
operations. No operations were discontinued during the period. Other property
outgoings include the amortisation charge in respect of very short leaseholds.
NOTE 5 FINANCE
Six
Six months months
to to Year to
30.9.01 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- --------
INTEREST RECEIVABLE:
Short term deposits 2.0 4.1 6.9
Other interest
receivable and similar
income .4 .4 .7
----- ----- -----
2.4 4.5 7.6
===== ===== =====
INTEREST PAYABLE:
Borrowings not wholly
repayable within five
years 74.6 69.5 140.5
Borrowings wholly
repayable within five
years 7.0 .5 8.2
Other interest payable
and similar charges 1.3 .5 2.4
----- ----- -----
82.9 70.5 151.1
===== ===== =====
NOTE 6 TAXATION
Six months Six months Year to
to to 31.3.01
30.9.01 30.9.00 audited
unaudited unaudited (restated)
(restated)
£m £m £m
--------- --------- --------
The charge for
taxation is made up
as follows:
Revenue profit at the
Corporation Tax rate
of 30% (2000: 30%) 49.5 44.8 93.7
Capital allowances on
expenditure relating
to properties (8.4) (5.2) (11.8)
Movements in deferred
taxation (Note 16):
Net charge for the
period 7.5 6.2 12.2
Released in respect
of property disposals
during the period (7.0) (.8) (7.4)
Other adjustments 3.5 .9 1.4
----- ----- -----
45.1 45.9 88.1
Adjustments relating
to previous years .9 .1 (.5)
----- ----- -----
On revenue profit 46.0 46.0 87.6
On property sales and
bid costs 1.1 - (.2)
----- ----- -----
47.1 46.0 87.4
===== ===== =====
The amount of tax on capital gains which would become payable in the event of
sales of the properties at the amounts at which they are stated in Note 9 is
in the region of £523m (2000 £510m). The deferred taxation which would be
released in such circumstances, on the assumption that no balancing charge
would be incurred is £122.3m (2000 £123.1m).
NOTE 7 DIVIDENDS
The interim dividend of 9.05p per share (2000 8.65p per share)will amount to £
47.5m (2000 £45.2m) calculated on 524.2m shares (2000 522.7m shares) in issue
on 30 September 2001. However, dividends shown in the Profit and Loss Account
include £0.1m (2000 £0.1m) of prior year final dividend arising from increases
in share capital after the last year end but before the record date of 1 June
2001.
NOTE 8 EARNINGS AND NET ASSETS PER SHARE
EARNINGS PER SHARE
Earnings per share are calculated on the profit on ordinary activities after
taxation of £121.5m (2000 - restated £103.8m) and on the weighted average
number of shares in issue during the period of 524.2m(2000 522.7m).
Adjusted earnings per share are calculated on the same weighted average number
of shares but exclude the profit arising on sales of properties and bid costs
0f £2.4m (2000 £0.4m) and the additional deferred taxation of £0.6m (2000 £
5.5m) arising from the adoption of FRS19. Bid costs and the profits on the
sale of investment properties are excluded from the adjusted earnings as these
are potentially non-recurring items. The additional FRS19 deferred tax is
excluded as the group's experience is that it is very unusual for plant
allowances to be claimed back through balancing charges on the disposal of a
property.
Diluted earnings per share are calculated on the profit on ordinary activities
after taxation of £127.0m (2000 restated £109.3m), after adjusting for the
effects of the exercise of conversion rights relating to the convertible
bonds, and on the weighted average number of shares in issue during the period
of 554.2m (2000 553.1m), which takes into account the number of potential
shares arising from the exercise of conversion rights and share options.
NET ASSETS PER SHARE
Net assets per share are calculated on net assets of £6,069.6m (2000 £
5,874.3m) and on 524.2m (2000 522.7m shares).
Adjusted net assets per share have been calculated on the same number of
shares but exclude the additional deferred tax liability of £122.3m (2000 £
123.1m) arising on the adoption of FRS19. Adjusted net assets have been
calculated on this basis because the group's experience is that deferred tax
on capital allowances in relation to investment properties is unlikely to
crystallise in practice.
The diluted net assets per share are calculated on adjusted net assets of £
6,341.8m (2000 - restated £6,125.5m) and on 557.5m shares (2000 553.8m shares)
after adjusting for the effects of the exercise of share options and of
conversion rights relating to the convertible bonds on net assets and the
number of shares in issue.
NOTE 9 PROPERTIES
Leasehold Leasehold
over 50 under 50
Freehold years to run years to run Total
£m £m £m £m
VALUATION/COST -------- -------- -------- -------
At 1 April 2001 6,100.1 2,027.6 102.9 8,230.6
Additions 167.0 85.9 10.7 263.6
Sales (170.0) (19.1) (2.3) (191.4)
------- ------- ------- -------
6,097.1 2,094.4 111.3 8,302.8
Unrealised deficit on
valuation (Note 18) (28.6) (4.1) .2 (32.5)
------- ------- ------- -------
At 30 September 2001 6,068.5 2,090.3 111.5 8,270.3
======= ======= ======= =======
ACCUMULATED
DEPRECIATION
At 1 April 2001 (1.3) (.2) (.1) (1.6)
Depreciation for the
period (2.1) (.2) (.5) (2.8)
-------- -------- -------- --------
At 30 September 2001 (3.4) (.4) (.6) (4.4)
======= ======= ======= =======
ADJUSTMENT FOR EFFECT
OF UITF28 (4.5) (5.2) (.1) (9.8)
NET BOOK AMOUNT
At 30 September 2001
(unaudited) 6,060.6 2,084.7 110.8 8,256.1
======= ======= ======= =======
At 30 September 2000
(unaudited/restated) 5,902.5 1,749.4 62.4 7,724.3
======= ======= ======= =======
At 31 March 2001
(audited/restated) 6,095.7 2,023.8 102.7 8,222.2
======= ======= ======= =======
Investment Land
properties Securities
Trillium
£m £m
VALUATION/COST -------- -------
At 1 April 2001 7,905.9 324.7
Additions 222.1 41.5
Sales (191.4) -
------- -------
7,936.6 366.2
Unrealised deficit on
valuation (Note 18) (32.5) -
------- -------
At 30 September 2001 7,904.1 366.2
======= =======
ACCUMULATED
DEPRECIATION
As at 1 April 2001 - (1.6)
Depreciation for the
period - (2.8)
------ ------
At 30 September 2001 - (4.4)
====== ======
ADJUSTMENT FOR EFFECT
OF UITF28 (9.8) -
VALUATION/NET BOOK
AMOUNT
At 30 September 2001
(unaudited) 7,894.3 361.8
======= =======
At 30 September 2000
(unaudited/restated) 7,724.3 -
======= ======
At 31 March 2001
(audited/restated) 7,899.1 323.1
======= =======
Investment properties are included at their valuations at 30 September 2001 as
determined by the group's professional valuers, Knight Frank.
Freeholds include £376.7m (2000 £387.3m)of investment property leaseholds with
unexpired terms exceeding 900 years; leaseholds with under 50 years to run
include £10.7m (2000 £10.2m) with unexpired terms of 20 years or less.
The historical cost of investment properties is £4,123.2m (2000 £3,854.8m).
Certain of the assets acquired under the PRIME agreement by Land Securities
Trillium are subject to a first charge granted to the DWP (formerly known as
the DSS). The amount of this charge at 30 September 2001 is £26.0m, which
reduces to nil on a straight line basis after a further eighteen months. The
charge secures amounts which would become payable to the DWP on early
termination of the PRIME Agreement in the relevant year.
NOTE 10 TRADING PROPERTIES
These are properties for sale held at the lower of cost and net realisable
value.
NOTE 11 DEBTORS
30.9.00 31.3.01
30.9.01 unaudited audited
unaudited (restated) (restated)
£m £m £m
------ ------ ------
Trade debtors 116.5 52.9 33.4
Capital debtors 17.5 11.4 19.5
Property sales debtors 3.2 7.9 52.1
Other debtors 47.7 16.0 29.7
Prepayments and
accrued income 46.2 26.0 47.0
------- ------- -------
231.1 114.2 181.7
====== ====== ======
NOTE 12 CASH AT BANK AND IN HAND
Cash at bank at 30 September 2001 includes £60m placed in a bank account under
the control of solicitors acting on behalf of British Telecommunications PLC
(BT) as a refundable deposit in relation to ongoing negotiations between
Telereal and BT for the purchase of certain BT real estate and the provision
of associated services.
NOTE 13 CREDITORS FALLING DUE WITHIN ONE YEAR
30.9.01 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- --------
Debentures and loans 26.4 10.4 26.4
Overdraft 5.6 - 4.2
Trade and other
creditors 47.1 17.3 44.7
Taxation and Social
Security 84.2 84.8 62.2
Proposed dividend 47.5 45.2 124.9
Capital creditors 50.0 52.9 59.5
Accruals and deferred
income 257.2 202.4 273.4
----- ----- -----
518.0 413.0 595.3
===== ===== =====
NOTE 14 BORROWINGS FALLING DUE AFTER MORE THAN ONE YEAR
30.9.00 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- --------
Debentures, bonds and
loans 1,756.2 1,283.3 1,506.8
Falling due within
one year (Note 13) (26.4) (10.4) (26.4)
------- ------- -------
1,729.8 1,272.9 1,480.4
Convertible bonds 243.1 246.7 246.1
------- ------- -------
1,972.9 1,519.6 1,726.5
======= ======= =======
NOTE 15 OTHER CREDITORS FALLING DUE AFTER MORE THAN ONE YEAR
30.9.01 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- --------
Deferred income 19.3 18.5 20.4
Other creditors 10.6 3.1 11.4
----- ----- -----
29.9 21.6 31.8
===== ===== =====
NOTE 16 PROVISION FOR LIABILITIES AND CHARGES
Dilapidations Deferred Total
taxation
£m £m £m
-------- -------- --------
As 1 April 2001
(audited) 4.7 1.1 5.8
Prior year adjustment
(Note 1) 121.7 121.7
Increase during the
period .5 .5
Net charge for the
period 7.5 7.5
Released in respect of
property disposals
during the period (7.0) (7.0)
Notional interest
charge .2 .2
----- ----- -----
At 30 September 2001
(unaudited) 5.4 123.3 128.7
====== ====== ======
NOTE 17 CALLED UP SHARE CAPITAL
30.9.01 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- --------
Ordinary shares of £1
each
Authorised 720.0 720.0 720.0
===== ===== =====
Allotted and fully
paid 524.2 522.7 523.6
===== ===== =====
NOTE 18 RESERVES
Share Capital
premium redemption Revaluation
account reserve reserve
£m £m £m
--------- -------- ---------
At 1 April 2001
(audited) 312.0 36.0 3,696.4
Prior year
adjustment (Note 2) - - (3.2)
------ ------ ------
At 1 April 2001 as
restated 312.0 36.0 3,693.2
Premium arising on
issues of shares 3.2
Unrealised deficit
on valuation of
properties (Note 9) (32.5)
UITF adjustment to
property valuation (3.0)
Realised on sales of
properties (72.8)
Retained profit for
the period
Amortised discount
and issue expenses
of bonds (.4)
------ ------ -------
At 30 September 2001 314.8 36.0 3,584.9
(unaudited)
====== ====== =======
Profit
Other and loss
reserves account Total
£m £m £m
--------- --------- ---------
At 1 April 2001
(audited) 324.6 1,258.3 5,627.3
Prior year
adjustment (Note 2) - (120.3) (123.5)
------ ------ ------
At 1 April 2001 as
restated 324.6 1,138.0 5,503.8
Premium arising on
issues of shares 3.2
Unrealised deficit
on valuation of
properties (Note 9) (32.5)
UITF28 adjustment to
property valuation (3.0)
Realised on sales of
properties 72.8
Retained profit for
the period 73.9 73.9
Amortised discount
and issue expenses
of bonds .4
----- ------- -------
At 30 September 397.4 1,212.3 5,545.4
2001 (unaudited)
----- ------- -------
NOTE 19 FINANCIAL ASSETS AND LIABILITIES
The group's financial assets and liabilities and their fair values are:
Book value 30.9.01 30.9.00 31.3.01
unaudited unaudited audited
£m £m £m
--------- --------- ---------
FINANCIAL ASSETS
Short term investments
and cash 112.9 98.7 31.8
FINANCIAL LIABILITIES
Debentures, bonds,
other loans and (1,761.8) (1,283.3) (1,511.0)
overdraft
Convertible bonds (243.1) (246.7) (246.1)
FINANCIAL INSTRUMENTS
Interest rate swaps - - -
====== ====== ======
Fair value 30.9.01 audited 30.9.00 31.3.01
unaudited audited
£m £m £m
--------- --------- ---------
FINANCIAL ASSETS
Short term investments
and cash 112.9 98.7 31.8
FINANCIAL LIABILITIES
Debentures, bonds,
other loans and (2,219.8) (1,684.1) (1,964.5)
overdraft
Convertible bonds (271.0) (264.1) (287.7)
FINANCIAL INSTRUMENTS
Interest rate swaps (13.2) 12.0 (12.2)
====== ====== ======
Fair value has been calculated by taking the market value, where one is
available, or using a discounted cash flow approach for those financial assets
and liabilities that do not have a published market value. The difference
between book value and fair value will not result in any change to the cash
outflows of the group unless, at some stage in the future, borrowings are
purchased in the market other than at nominal value.
The group has entered into five interest rate swaps. Two swaps, each for £
100m, had a start date of 30 September 2000 for 15 years. Two further swaps,
each for £100m, have a start date of 30 June 2002 for 10 years. The
counterparties can extend the duration of each of these swaps on similar
terms. As the intention of these swaps is to fix the interest rate on existing
and new bank borrowings, the value of the swaps have not been incorporated in
the financial statements. Once they commence operating interest receipts and
payments are dealt with on an accruals basis. The remaining swap was taken out
by Trillium to hedge the secured bank loan. This swap has a maximum life of
16.5 years and mirrors the repayment schedule for that bank loan. As part of
the fair value accounting for the acquisition of Trillium, this swap was
marked to market at a cost of £14.9m. The cost, which is included in the bank
loan, is being amortised over the life of the swap as a credit to interest
payable.
At 30 September 2001, £9.1m of short term deposits were charged as temporary
security for borrowings until substitutions have been agreed for properties
that have been released from charge.
The maturity and repayment profiles of the group's financial assets and
liabilities and the expiry periods of its undrawn committed borrowing
facilities are:
Financial Assets 30.9.01 30.0.00 31.3.01
unaudited unaudited audited
£m £m £m
One year or less,
or on demand 112.9 98.7 29.8
More than one year
but no more than two
years - - 2.0
More than two years
but no more than
five years - - -
More than five years - - -
------ ------ ------
112.9 98.7 31.8
====== ====== ======
Financial 30.9.01 30.0.00 31.3.01
Liabilities unaudited unaudited audited
£m £m £m
-------- -------- --------
One year or less, or
on demand 32.0 10.4 30.6
More than one year
but no more than two
years 1.5 .4 1.4
More than two years
but no more than
five years 321.5 38.6 62.3
More than five years 1,649.9 1,480.6 1,662.8
------- ------- --------
2,004.9 1,530.0 1,757.1
======= ======= =======
Borrowing Facilities 30.9.01 30.0.00 31.3.01
unaudited unaudited audited
£m £m £m
-------- -------- --------
One year or less, or
on demand - 75.0 50.0
More than one year
but no more than two
years - 75.0 -
More than two years
but no more than
five years 350.0 50.0 -
More than five years - - 600.0
------- ------- -------
350.0 200.0 650.0
======= ======= =======
The amount of debt that is repayable by instalments, where any of the
instalments fall due after more than five years, is not material.
NOTE 20 POST BALANCE SHEET EVENT
In October 2001, LS Trillium entered into a 30 year contract with the BBC
under which LS Trillium acquired a building at White City and agreed to
provide property management services across the BBC's London and Scottish
estates. In addition LS Trillium undertook to construct a new building at
White City over the next 3 years, which will have an estimated development
cost, including the site, of £240m to be funded by the group. In return, LS
Trillium will receive an initial index-linked unitary charge of some £35m
p.a., rising to over £70m p.a. when the new building is completed.
Land Securities
Interim Report
for the six months ended 30 September 2001
REVIEW REPORT BY THE AUDITORS
INDEPENDENT REVIEW REPORT TO
Land Securities PLC
Introduction
We have been instructed by the Company to review the financial information set
out above and we have read the other information contained in the interim
report for any apparent misstatements or material inconsistencies with the
financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of
making enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and verification
of assets, liabilities and transactions. It is substantially less in scope
than an audit performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2001.
PricewaterhouseCoopers
Chartered Accountants
London
14 November 2001
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