Final Results - Part 3- IFRS
Quintain Estates & Development PLC
07 June 2005
7 June 2005
Quintain Estates and Development PLC
Unaudited results for the year ended 31 March 2005
under International Financial Reporting Standards ('IFRS')
The following statements and accompanying notes restate the Group's 2004/05
results prepared under UK GAAP to reflect the adjustments that would be required
under IFRS. The document includes an income statement, balance sheet, statement
of changes in equity and cash flow statement together with an explanation of the
principal reconciling items between the two bases of preparation.
The information contained in this document has not been audited but complies
with the current versions of the standards and interpretations released to date.
As these may change, the figures presented should not be regarded as final.
In addition, the statements do not reflect the requirements of IFRS 2,
Share-based Payment; IAS 32, Financial Instruments : Disclosure and
Presentation; IAS 39, Financial Instruments : Recognition and Measurement and
IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, which
apply to accounting periods commencing on or after 1 January 2005.
Consequently, the numbers which will form the comparatives for the 2005/06
interim and final results could be different to those here presented.
This document is not intended in its format or content to constitute a
preliminary announcement under IFRS but merely to indicate the impact of the new
standards and interpretations in their current form upon the Group's 2004/05 UK
GAAP results.
In these statements, the Group has identified certain properties which under UK
GAAP were designated as investment properties but were acquired with the
intention of development. Under IFRS, these properties have been classified as
properties in the course of development and accounted for under IAS 16,
Property, Plant and Equipment at fair value. Changes to fair value arising in
connection with these properties are recognised directly through the revaluation
reserve in equity rather than through the income statement.
The adjustments which are material in relation to the Group's results relate to:
• investment property valuation movements and revaluation deficits
on development properties which are reflected in the income statement
• the deferred tax on net property revaluation movements which is
reflected in the income statement in respect of investment properties and
through equity for development properties
• the proposed final dividend which is not recognised in the
financial statements until it becomes a legal obligation.
The impact of these changes upon the key performance measures and indicators
have been identified as:
UK GAAP IFRS
Net rental income £000 27,413 29,797
Profit before tax £000 15,763 37,329
Equity shareholders' funds £000 638,261 571,304
Basic earnings per share p 10.3 32.2
Adjusted earnings per share p 10.2 10.0
Basic net asset value per share p 495 443
Adjusted net asset value per share p 486 492
The main changes to the Group's profit before tax under UK GAAP are as follows:
£000
UK GAAP for year ended 31 March 2005 15,763
Net revaluation gains on investment properties and deficits
on development properties reflected in income statement 25,653
Tax on profits from joint ventures and associates (5,055)
Other adjustments 968
______
IFRS for year ended 31 March 2005 37,329
=====
The principal adjustments to equity shareholders' funds are as follows:
£000
Balance as at 31 March 2005: UK GAAP 638,261
Deferred tax on net revaluation gains (75,394)
Proposed final dividend 8,700
Other adjustments (263)
______
Balance as at 31 March 2005 : IFRS 571,304
======
Quintain Estates and Development PLC
Unaudited Consolidated Income Statement
for the year ended 31 March 2005
Notes UK GAAP (*) Adjustments IFRS
£000 £000 £000
Gross rental income 2a 36,159 235 36,394
Property related costs 2b (8,746) 2,149 (6,597)
_______ _______ _______
Net rental income 27,413 2,384 29,797
====== ====== ======
Proceeds from sale of trading properties 3a 25,852 (19,516) 6,336
Carrying value of trading properties sold 3b (22,036) 16,914 (5,122)
_______ _______ _______
Profit from sale of trading properties 3,816 (2,602) 1,214
====== ====== ======
Income from leisure activities 12,112 - 12,112
Outgoings on leisure activities (5,871) - (5,871)
_______ _______ _______
Profit from leisure activities 6,241 - 6,241
====== ====== ======
Other income receivable 4,253 - 4,253
Outgoings in relation to other income (2,050) - (2,050)
_______ _______ _______
Profit from other income 2,203 - 2,203
====== ====== ======
Total turnover 78,376 (19,281) 59,095
Total cost of sales (38,703) 19,063 (19,640)
_______ _______ _______
Gross profit 39,673 (218) 39,455
Administrative expenses (19,130) - (19,130)
_______ _______ _______
Operating profit before recognition of results
from investment property sales and revaluation 20,543 (218) 20,325
Profit from sale of investment properties 4 6,286 (709) 5,577
Gains on revaluation of investment properties 5 - 23,574 23,574
Deficits on revaluation of investment properties 5 - (3,315) (3,315)
Deficits on revaluation of development properties 6 - (1,232) (1,232)
_______ _______ _______
Net operating profit before net finance expenses 26,829 18,100 44,929
Finance income 1,454 - 1,454
Finance expenses (17,323) (56) (17,379)
Net finance expenses 7 (15,869) (56) (15,925)
Share of profit from joint ventures and 8 4,803 3,522 8,325
associates
_______ _______ _______
Profit before tax 15,763 21,566 37,329
Current tax (1,908) (283) (2,191)
Deferred tax (446) 7,066 6,620
Tax (charge) credit for the year 9 (2,354) 6,783 4,429
_______ _______ _______
Profit for the financial year 13,409 28,349 41,758
====== ====== ======
Attributable to :
Equity shareholders of the parent 13,376 28,292 41,668
Minority interests 33 57 90
_______ _______ _______
Profit for the financial year 13,409 28,349 41,758
====== ====== ======
Earnings per share - basic 10a 10.3p 32.2p
====== ======
- diluted 10a 10.2p 31.6p
====== ======
(*) Reformatted to reflect IFRS reporting requirements
Quintain Estates and Development PLC
Unaudited Statement of Changes in Equity
for the year ended 31 March 2005
Share Share Convertible Revaluation Other Translation Retained Investment Total
capital premium loan reserve capital reserve earnings in own attributable
account stock reserves shares to equity
shareholders
£000 £000 £000 £000 £000 £000 £000 £000 £000
Balance as at
1 April 2004 : UK 32,323 45,076 - 267,604 112,330 - 66,180 - 523,513
GAAP
IFRS opening
adjustments:
Gains on revaluation
of
investment properties - - - (130,911) - - 130,911 - -
Deficits on
revaluation of
development - - - 5,411 - - (5,411) - -
properties
Deferred tax on
revaluation gains - - - (31,904) - - (26,345) - (58,249)
Equity element of
convertible loan - - 786 - - - - - 786
stock
Additional interest
on
convertible loan - - - - - - (498) - (498)
stock
Interest capitalised
on
development property
in jointly
administered
arrangement - - - - - - (223) - (223)
2004 final dividend - - - - - - 7,757 - 7,757
______ ______ ______ ______ ______ ______ ______ ______ ______
Balance as at
1 April 2004 : IFRS 32,323 45,076 786 110,200 112,330 - 172,371 - 473,086
______ ______ ______ ______ ______ ______ ______ ______ ______
Changes in equity for
the income and
expenses
recognised in year:
Credit relating to
Executive Directors'
Performance Share - - - - - - 380 - 380
Plan
Credit relating to
2004
Unapproved Share Plan - - - - - - 232 - 232
Development
properties:
Tax credit on
capitalised
- - - 1,218 - - - - 1,218
interest
Revaluation gains in - - - 93,261 - - - - 93,261
year
Deferred tax charge
on
revaluation gains - - - (24,102) - - - - (24,102)
Realisation of
revaluation gains on - - - (355) - - 355 - -
sales
Revaluation element
of
short leasehold
amortisation - - - (120) - - 120 - -
Exchange adjustment - - - - - 127 - - 127
______ ______ ______ ______ ______ ______ ______ ______ ______
Net income recognised
directly in equity - - - 69,902 - 127 1,087 - 71,116
Profit for the - - - - - - 41,668 - 41,668
financial year
______ ______ ______ ______ ______ ______ ______ ______ ______
Total recognised
income
and expense for the - - - 69,902 - 127 42,755 - 112,784
year
Other changes to
equity:
Issue of shares 81 1,499 - - - - (1,046) - 534
Purchase of own
shares
for cancellation (106) - - - 106 - (2,243) - (2,243)
Investment in own - - - - - - - (1,539) (1,539)
shares
Purchase of minority
interest - - - - - - - - -
Dividends paid - - - - - - (11,318) - (11,318)
______ ______ ______ _______ _______ ______ _______ ______ _______
Balance as at
31 March 2005 : IFRS 32,298 46,575 786 180,102 112,436 127 200,519 (1,539) 571,304
===== ===== ===== ====== ====== ===== ====== ===== ======
Unaudited Statement of Changes in Equity
for the year ended 31 March 2005 (continued)
Total Minority Total
attributable shareholders equity
to equity
shareholders
£000 £000 £000
Balance as at
1 April 2004 : UK GAAP 523,513 1,446 524,959
IFRS opening
adjustments:
Gains on revaluation
of
investment properties - - -
Deficits on
revaluation of
development properties - - -
Deferred tax on
revaluation gains (58,249) - (58,249)
Equity element of
convertible loan stock 786 - 786
Additional interest on
convertible loan stock (498) - (498)
Interest capitalised
on
development property
in jointly
administered
arrangement (223) - (223)
2004 final dividend 7,757 - 7,757
______ ______ ______
Balance as at
1 April 2004 : IFRS 473,086 1,446 474,532
______ ______ ______
Changes in equity for
the income and
expenses
recognised in year:
Credit relating to
Executive Directors'
Performance Share Plan 380 - 380
Credit relating to
2004
Unapproved Share Plan 232 - 232
Development
properties:
Tax credit on 1,218 - 1,218
capitalised interest
Revaluation gains in 93,261 - 93,261
year
Deferred tax charge on
revaluation gains (24,102) - (24,102)
Realisation of
revaluation gains on - - -
sales
Revaluation element of
short leasehold
amortisation - - -
Exchange adjustment 127 - 127
______ ______ ______
Net income recognised
directly in equity 71,116 - 71,116
Profit for the 41,668 90 41,758
financial year
______ ______ ______
Total recognised
income
and expense for the 112,784 90 112,874
year
Other changes to
equity:
Issue of shares 534 - 534
Purchase of own shares
for cancellation (2,243) - (2,243)
Investment in own (1,539) - (1,539)
shares
Purchase of minority
interest - (1,296) (1,296)
Dividends paid (11,318) - (11,318)
_______ ______ _______
Balance as at
31 March 2005 : IFRS 571,304 240 571,544
====== ===== ======
Quintain Estates and Development PLC
Unaudited Consolidated Balance Sheet
as at 31 March 2005
Notes UK GAAP (*) Adjustments IFRS
£000 £000 £000
Non-current assets
Investment properties 11 742,876 (452,674) 290,202
Development properties 11 - 463,893 463,893
Owner occupied properties, plant and equipment 12 9,215 1,201 10,416
Investment in joint ventures 13 62,023 8,209 70,232
Investment in associates 1,800 - 1,800
Other investments 188 - 188
_______ _______ _______
Total non-current assets 816,102 20,629 836,731
====== ====== ======
Current assets
Trading properties 13 17,487 (12,763) 4,724
Trade and other receivables 11/13 31,920 (2,649) 29,271
Short term investments 19 - 19
Cash and cash equivalents 13 11,744 (654) 11,090
_______ _______ _______
Total current assets 61,170 (16,066) 45,104
====== ====== ======
Total assets 877,272 4,563 881,835
====== ====== ======
Current liabilities
Bank loans 14 (88) - (88)
Trade and other payables 13/15 (35,913) 9,685 (26,228)
Tax liabilities (11,294) (24) (11,318)
_______ _______ _______
Total current liabilities (47,295) 9,661 (37,634)
====== ====== ======
Non-current liabilities
Bank loans 14 (173,815) 6,795 (167,020)
Other borrowings 16 (7,870) 203 (7,667)
Deferred tax liability 17 (5,117) (75,429) (80,546)
Obligations under finance leases 18 - (12,750) (12,750)
Other payables (4,674) - (4,674)
_______ _______ _______
Total non-current liabilities (191,476) (81,181) (272,657)
====== ====== ======
Total liabilities (238,771) (71,520) (310,291)
_______ _______ _______
Net assets 638,501 (66,957) 571,544
====== ====== ======
Equity
Issued capital 32,298 - 32,298
Share premium account 46,575 - 46,575
Convertible loan stock (equity element) 16 - 786 786
Revaluation reserve 311,606 (131,504) 180,102
Other capital reserves 112,436 - 112,436
Translation reserve 19 - 127 127
Retained earnings 136,885 63,634 200,519
Investment in own shares (1,539) - (1,539)
_______ _______ _______
Equity attributable to equity shareholders of the parent 20 638,261 (66,957) 571,304
Minority interest 240 - 240
_______ _______ _______
Total equity 638,501 (66,957) 571,544
====== ====== ======
Net asset value per share - basic 10b 495p 443p
====== ======
- diluted 10b 486p 436p
====== ======
(*) Reformatted to reflect IFRS reporting requirements
Quintain Estates and Development PLC
Unaudited Consolidated Cash Flow Statement
for the year ended 31 March 2005
UK GAAP (*) Adjustments IFRS
£000 £000 £000
Operating activities
Profit before tax 15,763 21,566 37,329
Adjustments for :
Depreciation 1,088 (61) 1,027
Costs relating to share plans 612 - 612
Net finance expenses 15,869 56 15,925
Unrealised net revaluation gains on investment properties - (20,259) (20,259)
Deficits on revaluation of development properties - 1,232 1,232
Share of the profit from joint ventures and associates (4,803) (3,522) (8,325)
Profit on sale of investment properties (6,286) 709 (5,577)
Impairment of investment property 425 (425) -
_______ _______ _______
Operating profit before changes in working capital 22,668 (704) 21,964
Decrease in trade and other receivables 4,147 (97) 4,050
Decrease in trade and other payables (7,569) 2,846 (4,723)
Decrease (increase) in trading properties 2,814 (5,776) (2,962)
_______ _______ _______
Cash generated from operations 22,060 (3,731) 18,329
Interest paid (19,245) (492) (19,737)
Profit on termination of hedging arrangement 722 - 722
Interest received 1,127 (21) 1,106
Tax paid (1,561) 1,460 (101)
_______ _______ _______
Cash flows from operating activities 3,103 (2,784) 319
_______ _______ _______
Investing activities
Purchase and development of property assets (110,615) - (110,615)
Purchase of property, plant and equipment (9,007) - (9,007)
Proceeds from property sales 287,486 - 287,486
Tax paid on property sales - (1,460) (1,460)
Acquisition of subsidiary companies (15,153) - (15,153)
Loans to joint ventures and associates (20,860) 2,212 (18,648)
Distributions received from joint ventures and associates 2,165 - 2,165
_______ _______ _______
Cash flows from investing activities 134,016 752 134,768
_______ _______ _______
Financing activities
Issue of shares 534 - 534
Purchase of own shares for cancellation (2,243) - (2,243)
Investment in own shares (1,539) - (1,539)
Decrease in borrowings (152,316) 3,323 (148,993)
Payment of loan issue costs (2,858) - (2,858)
Payment of finance lease liabilities - (1,663) (1,663)
Equity dividends paid (11,318) - (11,318)
_______ _______ _______
Cash flows from financing activities (169,740) 1,660 (168,080)
_______ _______ _______
Net decrease in cash and cash equivalents (32,621) (372) (32,993)
Cash and cash equivalents as at 1 April 2004 44,187 (282) 43,905
Effect of exchange rate fluctuations on cash held 197 - 197
_______ _______ _______
Cash and cash equivalents as at 31 March 2005 11,763 (654) 11,109
====== ====== ======
(*) Reformatted to reflect IFRS reporting requirements
Quintain Estates and Development PLC
Notes to the unaudited financial statements
for the year ended 31 March 2005
1. Basis of preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards and interpretations adopted by the
International Accounting Standards Board.
The consolidated financial statements are prepared on a historical cost basis
except for investment and development properties which are carried at fair
value.
2. Property related income
a Gross rental income
Under IFRS, rent free periods are allocated over the whole lease term or to a
tenant break option if appropriate, rather than the period to the first rent
review as is the case under UK GAAP.
£000
_______
UK GAAP for the year ended 31 March 2005 36,159
Reallocation of rent smoothing adjustment 235
_______
IFRS for the year ended 31 March 2005 36,394
======
b Property related costs
Notes £000
_______ _______
UK GAAP for the year ended 31 March 2005 8,746
Treatment of leasehold interests as finance leases i (1,663)
Reversal of short leasehold amortisation on investment properties ii (61)
Reversal of impairment on investment property iii (425)
______
IFRS for the year ended 31 March 2005 6,597
=====
Notes :
i Under IFRS, leasehold property interests held as investment property at fair
value are accounted for as finance leases. The liability under these leases is
recognised as the present value of the minimum lease payments at the date of
inception or acquisition of the lease. A finance charge is shown in these IFRS
accounts based on the discount rate used in the present value calculations.
ii Under IFRS, revaluation surpluses and deficits on investment properties are
recognised in the income statement, thus measuring the amortisation in the value
of the Group's short leasehold investment properties.
iii As revaluation deficits on investment properties are included in the IFRS
income statement, these deficits would also reflect any impairment charge
previously recognised in property related costs under UK GAAP.
3. Profit from sale of trading properties
Under UK GAAP, the results of a jointly administered arrangement, Countryside
Properties (Merton Abbey Mills) Limited, is accounted for on a proportional
basis. Under IFRS, these results are equity accounted in the same way as those
of the Group's other joint ventures.
a Proceeds from sale of trading properties
£000
_______
UK GAAP for the year ended 31 March 2005 25,852
Reclassification of sales revenue to share of profit from joint ventures and associates (19,516)
_______
IFRS for the year ended 31 March 2005 6,336
======
b. Carrying value of trading properties sold £000
_______
UK GAAP for the year ended 31 March 2005 22,036
Reclassification of cost of sales to share of profit from joint ventures and associates (16,914)
______
IFRS for the year ended 31 March 2005 5,122
======
4. Profit from sale of investment properties
Under UK GAAP, the profit from the sale of investment properties arising in
joint ventures and associates is shown together with the profit from this source
arising directly within the Group. Under IFRS, this is included as part of the
result from joint ventures and associates in the income statement.
5. Gains (deficits) on revaluation of investment properties
Under IFRS, changes in the fair value of investment properties are recognised
separately in the income statement. Under UK GAAP, such revaluation surpluses
or temporary deficits are recognised as a net movement within equity.
6. Deficits on revaluation of development properties
Under IAS 16, Property, Plant and Equipment, when the carrying amount of a
development property is decreased as a result of a revaluation, the decrease
should be recognised as an expense. However, a revaluation decrease is charged
directly against any related revaluation surplus to the extent that the decrease
does not exceed the amount held in the revaluation surplus in respect of the
same asset.
7. Net finance expenses
Notes £000
______ ______
UK GAAP for the year ended 31 March 2005 15,869
Net interest incurred by joint ventures and associates i (1,689)
Interest payable on finance leases 2bi 1,147
Interest payable on convertible loan stock ii 85
Reversal of interest capitalised on development property in joint iii 492
arrangement
Reclassification of joint venture interest iv 21
______
IFRS for the year ended 31 March 2005 15,925
=====
Notes :
i Under UK GAAP, interest expense arising within joint ventures and associates
is included with the Group's directly incurred finance costs. Under IFRS, this
is netted off against the operating results from such arrangements.
ii Under UK GAAP, the Group's convertible loan stock is included under
liabilities. Under IFRS, the present value of the liability is estimated at the
date of issue using an appropriate rate of discount and this amount is reflected
in the balance sheet under liabilities with the equity element included within
the equity section. Interest is charged at this rate to the income statement
during the life of the obligation.
iii Under UK GAAP, the Group accounts for jointly administered arrangements on a
proportional basis and capitalises interest on its share of the cost of
properties in the course of development. Under IFRS, all such arrangements with
third parties are included in the financial statements on an equity accounted
basis. As a result, the interest previously capitalised on such development
expenditure has been reversed.
iv Under UK GAAP, the joint arrangement with Countryside Properties is accounted
for on a proportional basis and interest incurred or received within the Company
shown as part of the Group's finance charge for the year. Under IFRS, this
interest is included in the income statement within the share of profit from
other joint ventures and associates.
8. Share of profit from joint ventures and associates
Notes £000
______ ______
UK GAAP for the year ended 31 March 2005 :
share of operating profit from joint ventures 4,608
share of operating profit from associates 195
______
4,803
Reclassification of share of profit in Countryside Properties (Merton i 2,623
Abbey Mills) Limited
Cost of sales adjustment in respect of capitalised interest ii 308
Profit from sale of investment properties arising within joint ventures iii 709
and associates
Net interest incurred by joint ventures and associates 7i (1,689)
Share of revaluation gains in year iv 6,626
Current year tax on share of profit v (935)
Deferred tax on revaluation gains in year vi (4,120)
______
IFRS for the year ended 31 March 2005 8,325
=====
Notes :
i Under IFRS, the Group's joint arrangement, Countryside Properties (Merton
Abbey Mills) Limited is accounted for on an equity basis rather than on a
proportional basis. The entries required to arrive at this adjustment are as
follows:
£000
_______
Proceeds from sale of trading properties (19,516)
Carrying value of trading properties sold 16,914
Financial income (21)
Reclassification of share of profit in Countryside Properties (Merton Abbey Mills) Limited 2,623
_______
-
======
ii Under IFRS, as Countryside Properties (Merton Abbey Mills) Limited, is
reclassified as a joint venture, interest previously capitalised on development
expenditure under the proportional basis of accounting has been reversed.
iii Under UK GAAP, the profit arising from the sale of investment properties
within joint ventures and associates is included together with the Group's own
profit from such sales. Under IFRS, this profit is shown in the income
statement as part of the result from joint ventures and associates.
iv Under UK GAAP, gains on revaluation of investment properties in joint
ventures and associates are accounted for through equity. Under IFRS, movements
in revaluation are included within the share of profit from joint ventures and
associates in the income statement.
v Under UK GAAP, the current year tax charge on the share of profit from joint
ventures and associates is shown as part of the Group's tax charge. Under IFRS,
this element of the current year charge is included within the results from
joint ventures and associates.
vi Under UK GAAP, deferred tax on revaluation gains is shown by way of a note to
the accounts. Under IFRS, deferred tax on such gains is included as part of the
share of profit from joint ventures and associates in income statement.
9 Taxation
a. Tax (charge) credit for the year
Current Deferred Total
UK Overseas Total tax
corporation tax
tax
£000 £000 £000 £000 £000
______ _______ ________ __________ _______
UK GAAP for the year ended 31 March 2005 1,822 86 1,908 446 2,354
Adjustments 283 - 283 (7,066) (6,783)
______ _______ ________ __________ _______
IFRS for the year ended 31 March 2005 2,105 86 2,191 (6,620) (4,429)
===== ====== ======= ========= ======
The deferred tax release relates to the use of prior year tax losses and surplus
ACT, which has offset the charge on the net revaluation gains reflected in the
income statement.
b Reconciliation of tax charge
£000
_______
Profit before tax 37,329
Add : tax deducted from share of profit from joint ventures and associates 5,055
_______
42,384
Tax @ 30% 12,715
Adjustments :
ACT offset against chargeable gains (9,498)
Locked-in capital allowances (3,801)
Prior year tax movements 320
Tax charges taken to share of profit from joint ventures and associates (5,055)
Indexation allowance (1,607)
Overseas tax rates 351
Use of losses (797)
Other movements 2,943
_______
(4,429)
======
c Deferred tax
UK GAAP IFRS
1 April Recognised Recognised 31 March
2004 in income in equity 2005
£000 £000 £000 £000
______ _______ ________ _______
Short term timing differences 4,671 481 - 5,152
Gains on revaluation of properties - 18,151 57,243 75,394
______ _______ ________ _______
4,671 18,632 57,243 80,546
===== ====== ======= ======
10. Earnings per share and net asset value per share
a Earnings per share
UK GAAP UK UK IFRS IFRS IFRS
GAAP GAAP
Profit Average Earnings Profit Average Earnings
for the weighted per share for the weighted per share
financial number financial number
year of shares year of shares
£000 000 pence £000 000 pence
________ ________ _______ ________ ________ _______
Basic 13,376 129,349 10.3 41,668 129,349 32.2
Adjustments:
In respect of 8% convertible
loan stock 168 2,000 228 2,000
In respect of employee
share option arrangements - 1,031 - 1,031
________ ________ ________ ________
Diluted 13,544 132,380 10.2 41,896 132,380 31.6
Adjustments:
Net gains on revaluation of investment and
development properties in income statement - - (25,653) -
Deferred tax on net revaluation gains - - (2,946) -
________ ________ ________ _______
Adjusted 13,544 132,380 10.2 13,297 132,380 10.0
======= ====== ====== ======= ====== ======
b Net asset value per share
UK GAAP UK UK IFRS IFRS IFRS
GAAP GAAP
Net assets Number Net asset Net Number Net asset
of shares value assets of shares value
per share per share
£000 000 pence £000 000 pence
________ ________ _______ ________ _______ _______
Basic 638,261 128,891 495 571,304 128,891 443
Adjustments:
In respect of 8% convertible
loan stock 3,000 2,000 2,797 2,000
In respect of employee share option 9,310 2,919 9,310 2,919
arrangements
________ _______ ________ _______
Diluted 650,571 133,810 486 583,411 133,810 436
Adjustments:
Deferred tax on net revaluation gains - - 75,394 -
________ ________ _______ _______
Adjusted 650,571 133,810 486 658,805 133,810 492
======= ======= ====== ======= ====== ======
11. Investment and development properties
Investment Development
Notes properties properties
£000 £000
_____ _______ _______
Balance as at 31 March 2005 : UK GAAP 742,876 -
Transfer to development properties i (453,817) 453,817
Recalculation of rent free periods ii (330) -
Gross-up of book value of leasehold property interests iii 1,473 10,076
_______ _______
Balance as at 31 March 2005 : IFRS 290,202 463,893
====== ======
Notes :
i Under IFRS, investment properties, mainly comprising land holdings,
acquired with the intention of development have been redesignated properties in
the course of development and are accounted for under IAS 16, Property, Plant
and Equipment at fair value. Movements in the valuation of these properties are
recognised not in the income statement but directly in the revaluation reserve
in equity.
ii Under IFRS, rent free periods are allocated over the whole lease term or
to a tenant break option if appropriate. Under UK GAAP, rent free periods are
allocated usually over the period to the first review. The corresponding
adjustment is shown in Trade and other receivables.
iii Under IFRS, the obligation to the lessor at the inception or acquisition
of a lease is recognised as a separate liability. Under UK GAAP, this liability
is included within the property valuation. Accordingly, the amount shown under
non-current assets under IFRS has been grossed-up to reflect this adjustment.
iv Investment and development properties have been valued as at 31 March 2005
at fair value by professionally qualified external valuers in accordance with
the Appraisal and Valuation Standards of the Royal Institution of Chartered
Surveyors.
12. Owner occupied property, plant and equipment
Notes £000
_____ ______
Balance as at 31 March 2005 : UK GAAP 9,215
Gross-up of carrying value of leasehold property interests i 1,201
______
Balance as at 31 March 2005 : IFRS 10,416
=====
Notes :
i. Under IFRS, the obligation to the lessor at the inception or
acquisition of a lease is recognised as a separate liability. Under
UK GAAP, this liability is included within the carrying value of the property.
Accordingly, the amount shown under Owner occupied property, plant and equipment
under IFRS in respect of long leasehold and short leasehold properties has been
grossed-up to reflect this adjustment.
The Group continues to show assets held under this heading at net book cost.
13. Investment in joint ventures
Notes £000
_____ ______
Balance as at 31 March 2005 : UK GAAP 62,023
Restatement of investment in Countryside Properties (Merton Abbey Mills) i 8,616
Limited
Adjustment in respect of capitalised interest included in carrying value of ii (407)
property asset
______
Balance as at 31 March 2005 : IFRS 70,232
=====
Notes:
i. Under UK GAAP, the results of a jointly administered arrangement,
Countryside Properties (Merton Abbey Mills) Limited, is
accounted for on a proportional basis. Under IFRS, these results are equity
accounted in the same way as those of the Group's other joint ventures. The
entries required to arrive at this adjustment are as follows:
£000
______
Trading properties (12,763)
Trade and other receivables (2,979)
Cash and cash equivalents (654)
Trade and other payables 985
Non-current liabilities : Bank loans 6,795
Restatement of investment in Countryside Properties (Merton Abbey Mills) Limited 8,616
______
-
=====
ii As Countryside Properties (Merton Abbey Mills) Limited is now accounted
for on an equity basis, interest previously capitalised on development
expenditure has been reversed.
14. Borrowings
As a result of the transitional arrangements under IAS 39, Financial Instruments
: Recognition and Measurement, which applies to accounting periods commencing on
or after 1 January 2005, borrowings as at 31 March 2005 remain unchanged.
With effect from 1 April 2005, the Group's interest rate swaps will be included
in the balance sheet at fair value with changes in fair value being recognised
through equity in the case of effective cash flow hedges and through the income
statement in the case of ineffective hedges and the ineffective portions of
other hedges. The IFRS balance sheet as at 31 March 2005 will be restated for
the adoption of IAS 39 by including interest rate swaps with a negative value of
£8,651,000 together with a tax credit of £2,595,000, reducing net assets as at
that date by £6,056,000.
15. Trade and other payables
The accrual for the proposed final dividend of £8,700,000 provided under UK GAAP
has not been recognised within these IFRS statements, but will henceforward be
shown by way of a note.
16. Other borrowings
Under UK GAAP, the Group's convertible loan stock is included under liabilities.
Under IFRS, the liability has been estimated at the date of issue as the
present value of payments due under the obligation using an appropriate discount
rate. The equity element is shown within the equity section of the balance
sheet.
17. Deferred tax liability
£000
_______
Balance as at 31 March 2005 : UK GAAP 5,117
Deferred tax on short term timing differences 35
Deferred tax arising on revaluation gains 78,195
Deferred tax assets arising on revaluation deficits (2,801)
_______
Balance as at 31 March 2005 : IFRS 80,546
======
The amount of tax losses offset against the deferred tax on revaluation gains is
£2,895,000.
18. Obligations under finance leases
Notes £000
______ ______
Balance as at 31 March 2005 : UK GAAP -
Investment properties 11 1,473
Development properties 11 10,076
Owner occupied properties 12 1,201
______
Balance as at 31 March 2005 : IFRS 12,750
=====
19. Translation reserve
Under UK GAAP, differences arising from the translation of the net equity
investment in overseas subsidiaries were dealt with through retained earnings.
Under IFRS, these are shown in a translation reserve which is disclosed
separately within the equity section of the balance sheet.
20. Equity attributable to equity shareholders of the parent
Notes £000
_______ _______
Balance as at 31 March 2005 : UK GAAP 638,261
Deferred tax on net revaluation gains 17 (75,394)
Proposed final dividend 15 8,700
Other adjustments (263)
_______
Balance as at 31 March 2005 : IFRS 571,304
======
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