Final Results - Part 2

Quintain Estates & Development PLC 04 June 2003 4 June 2003 Quintain Estates and Development PLC PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2003 - PART 2 Consolidated Profit and Loss Account for the year ended 31 March 2003 Notes 2003 2002 Restated Â£000 Â£000 ______ _______ _______ Turnover 62,660 55,339 Less - share of joint ventures turnover 12a (5,055) (4,909) _______ _______ Group turnover 2 57,605 50,430 Acquisitions 12c 7,383 - Continuing 50,222 50,430 Cost of sales 2 (21,030) (9,051) _______ _______ Gross profit 2 36,575 41,379 Administrative expenses 4/5 (10,377) (8,548) _______ _______ Group operating profit 3a 26,198 32,831 Acquisitions 12c 1,158 - Continuing 25,040 32,831 Share of operating profit in joint ventures 12a 4,421 4,280 Share of operating profit (loss) in associates 278 (44) Profit on sale of investment properties 3a 841 927 _______ _______ Profit on ordinary activities before interest and tax 31,738 37,994 Net interest payable 6 (17,770) (21,052) _______ _______ Profit on ordinary activities before taxation 13,968 16,942 Tax on profit on ordinary activities 7 (1,647) (2,033) _______ _______ Profit on ordinary activities after taxation 12,321 14,909 Equity minority interests (288) (230) _______ _______ Profit for the financial year 12,033 14,679 Dividends 8 (10,183) (9,637) _______ _______ Retained profit for the financial year 20 1,850 5,042 ====== ====== Earnings per share 9 - basic 9.4p 11.5p ====== ====== - diluted 9.3p 11.3p ====== ====== Dividends per share 8 - interim 2.75p 2.75p - final 5.25p 4.75p _______ _______ - total 8.00p 7.50p ====== ====== Details of the restatement of the comparative figures are contained in note 1(n) of the notes to the accounts. Quintain Estates and Development PLC Consolidated Statement of Total Recognised Gains and Losses for the year ended 31 March 2003 Notes 2003 2002 Restated Â£000 Â£000 ______ _______ _______ Profit for the financial year: Group 9,210 11,779 Joint ventures 12a 2,823 2,900 _______ _______ 12,033 14,679 Unrealised surplus on revaluation of investment properties 20 48,218 36,550 Share of unrealised surplus (deficit) on revaluation of investment properties held in: Joint ventures 20 884 (51) Associates 20 45 160 Tax on realisation of revaluation surplus - (1,843) Currency translation movements 20 190 (179) _______ _______ Total recognised gains and losses relating to the 61,370 49,316 financial year Prior year adjustment as set out below (542) - _______ _______ Total recognised gains and losses since the last annual 60,828 49,316 report ====== ====== Consolidated Note of Historical Cost Profits and Losses for the year ended 31 March 2003 Notes 2003 2002 Restated Â£000 Â£000 _______ _______ _______ Profit on ordinary activities before taxation 13,968 16,942 Realisation of property revaluation gains of previous 20 2,325 13,397 years _______ _______ Historical cost profit on ordinary activities before 16,293 30,339 taxation ====== ====== Historical cost profit for the year retained after taxation, minority interests and dividends 4,175 16,596 ====== ====== Quintain Estates and Development PLC Reconciliation of Movements in Equity Shareholders' Funds for the year ended 31 March 2003 Notes 2003 2002 Restated Â£000 Â£000 ______ _______ _______ Profit for the financial year 12,033 14,679 Dividends 8 (10,183) (9,637) _______ _______ 1,850 5,042 Other recognised gains and losses relating to the 49,337 34,637 year Negative goodwill 20 1,555 - Issue of shares less costs 2,377 2,057 Purchase of own shares 20 (6,166) (2,347) _______ _______ Net addition to equity shareholders' funds 48,953 39,389 Opening shareholders' funds 394,363 354,974 _______ _______ Closing shareholders' funds 443,316 394,363 ====== ====== Opening shareholders' funds As previously reported 394,905 355,207 Prior year adjustment: UITF 34 1n (542) (233) _______ _______ As restated 394,363 354,974 ====== ====== Quintain Estates and Development PLC Balance Sheets as at 31 March 2003 Notes Group Company 2003 2002 2003 2002 Restated Â£000 Â£000 Â£000 Â£000 ______ _______ _______ _______ _______ Fixed assets Investment properties 10 722,545 608,185 - - Other fixed assets 11 430 450 430 450 Investment in joint ventures share of 61,589 61,849 - - gross assets share of gross liabilities (31,055) (33,310) - - _______ _______ _______ _______ 12a 30,534 28,539 - - Investment in associates 12b 4,512 1,149 1,191 345 Other fixed asset investments 12c 188 292 304,198 293,356 _______ _______ _______ _______ 758,209 638,615 305,819 294,151 Current assets Trading properties 1,750 7,656 - - Debtors 13 48,729 20,124 12,137 6,180 Short term investments 14 14 18 - - Cash at bank and in hand 17a 22,119 37,647 15,471 7,451 _______ _______ _______ _______ 72,612 65,445 27,608 13,631 Creditors: amounts falling due within one year 15 (63,149) (107,896) (84,127) (94,377) ______ _______ _______ _______ Net current assets (liabilities) 9,463 (42,451) (56,519) (80,746) Total assets less current liabilities 767,672 596,164 249,300 213,405 Creditors: amounts falling due after more than one 16 (314,346) (192,500) (37,907) (6,484) year Provisions for liabilities and charges 18 (8,659) (6,850) - - Equity minority interests (1,351) (2,451) - - _______ _______ _______ _______ Net assets 443,316 394,363 211,393 206,921 ====== ====== ====== ====== Capital and reserves Called up share capital 19 31,825 32,098 31,825 32,098 Share premium account 20 42,623 39,950 42,623 39,950 Revaluation reserve 20 202,148 155,448 - - Other capital reserves 20 112,330 110,095 108,025 107,345 Profit and loss account 20 54,390 56,772 28,920 27,528 _______ _______ _______ _______ Equity shareholders' funds 443,316 394,363 211,393 206,921 ====== ====== ====== ====== Net asset value per share basic 9 348p 307p ====== ====== diluted 9 342p 302p ====== ====== Approved by the Board of Directors N G Ellis Director and signed on its behalf 3 June 2003 A R Wyatt Director Quintain Estates and Development PLC Consolidated Cash Flow Statement for the year ended 31 March 2003 Notes 2003 2002 Â£000 Â£000 ______ _______ _______ Net cash inflow from operating activities 25a 39,514 20,403 ====== ====== Dividends from joint ventures and associates 1,381 - ====== ====== Return on investments and servicing of finance Interest received 748 1,154 Interest paid (17,800) (21,257) Issue costs of loans (431) (82) ________ ________ Net cash outflow from return on investments and servicing of finance (17,483) (20,185) ======= ======= Corporation tax paid (1,193) (3,802) ======= ======= Capital expenditure and financial investment Purchase of tangible fixed assets (90,663) (23,389) Proceeds from disposal of tangible fixed assets 66,401 112,956 Loans to joint ventures and associates (2,261) (317) ________ ________ Net cash (outflow) inflow from capital expenditure and financial investment (26,523) 89,250 ======= ======= Acquisitions and disposals Proceeds from disposal of subsidiary companies - 18,873 Purchase of subsidiary companies (27,335) - Net cash acquired with subsidiary companies 956 - ________ ________ Net cash (outflow) inflow from acquisitions and (26,379) 18,873 disposals ======= ======= Equity dividends paid (9,599) (8,654) ======= ======= Net cash (outflow) inflow before management of liquid resources and financing (40,282) 95,885 ======= ======= Management of liquid resources 25c 18,953 13,779 ======= ======= Financing Issue of ordinary shares for cash 3,079 2,057 Loans drawn down 161,088 71,211 Loan repayments (132,548) (175,673) Purchase of own shares (6,869) (2,347) ________ ________ Net cash inflow (outflow) from financing 24,750 (104,752) ======= ======= Increase in cash in the year 25b 3,421 4,912 ======= ====== Quintain Estates and Development PLC Notes to the Accounts for the year ended 31 March 2003 1. Accounting policies The principal accounting policies, which have been applied consistently throughout the year and the preceding year except as noted below, are as follows: a) Basis of accounting The accounts have been prepared under the historical cost convention as modified by the revaluation of investment properties and in accordance with all applicable accounting standards and the requirements of the Companies Act 1985, except as explained below. b) Basis of consolidation The group accounts consolidate the accounts of the Company and all its subsidiaries and include the Group's share of the results of its joint ventures and associates. No profit and loss account is presented for the Company, as permitted by section 230 of the Companies Act 1985. The results of newly acquired entities are included in the consolidated accounts from the effective date of acquisition. c) Goodwill Goodwill arising on consolidation is capitalised and amortised through the profit and loss account over a period of 20 years or less in line with the Directors' view of its useful economic life. Negative goodwill, which arises as a result of the fair value of property assets less liabilities acquired exceeding the related purchase consideration, is credited to other capital reserves in the balance sheet. This represents a departure from FRS 10, Goodwill and Intangible Assets, which requires that negative goodwill be treated as a fixed asset. Given that the negative goodwill relates principally to the investment properties acquired, which are neither depreciated nor held for re-sale, the Directors consider that to retain it as a negative asset on the face of the balance sheet indefinitely would not properly reflect the substance of such a transaction nor result in the financial statements giving a true and fair view of the state of affairs of the Group. The treatment adopted is not inconsistent with the requirements of the Companies Act 1985. The effect of this treatment on these financial statements in respect of the acquisition of Wembley (London) Ltd has been to increase total fixed assets and total reserves on the consolidated balance sheet by Â£1,555,000 (2002: Â£ nil), representing the amount of the negative goodwill. d) Foreign currencies All assets, liabilities and results denominated in foreign currencies are translated into sterling at rates of exchange ruling at the year end. The rates ruling at the current year end were as follows: 2003 2002 _______ _______ France Â£1 = â‚¬ 1.45 â‚¬ 1.63 United States Â£1 = US $ 1.58 US $ 1.42 Differences arising from the translation of the net equity investment in overseas subsidiaries are dealt with through reserves. e) Turnover Turnover is stated net of VAT and comprises rental income proceeds from sales of trading properties, commissions and fees receivable. Rent increases arising from rent reviews due during the year are taken into account only to the extent that such reviews are agreed with tenants at the accounting date. When rent free periods are granted with new leases, rental income is allocated evenly over the period from the commencement of the lease to the date of the first rent review. Where a tenant inducement does not enhance the value of the property, it is amortised over the period to the earlier of the first rent review, the first tenant break option or the end of the lease term. f) Disposal of properties Sales of properties are recognised in the accounts if an unconditional contract is exchanged by the balance sheet date and the sale is completed before the accounts are approved by the Board. Profits or losses arising from the sale of investment properties are calculated by reference to book value and treated as exceptional items, while those arising from the sale of trading properties are included in the profit and loss account as part of the operating profit of the Group. g) Depreciation In accordance with SSAP 19, Investment Properties, no depreciation is provided in respect of the Group's freehold properties and leasehold investment properties with over 20 years to run. This represents a departure from the provisions of the Companies Act 1985 which requires all properties to be depreciated. Such properties are held not for consumption but for investment and the Directors consider that to depreciate them would not give a true and fair view. Depreciation is only one of the many factors reflected in the annual valuation of properties and accordingly the amount of depreciation which might otherwise have been charged cannot be separately identified or quantified. Depreciation is provided on other fixed assets on a straight line basis having regard to their estimated useful lives of between three and eight years. h) Valuation of properties Investment properties are independently valued annually by external professional valuers on an open market basis. Investment properties under development are stated at estimated market value on completion, supported by an independent valuation, less estimated costs to complete. Any surplus or deficit on revaluation is transferred to the revaluation reserve except that deficits below original cost which are expected to be permanent are charged to the profit and loss account. Finance charges incurred on investment properties under development are capitalised within the historical cost until practical completion. Trading properties are stated at the lower of cost and net realisable value. i) Investments in joint ventures and associates In accordance with FRS 9, Associates and Joint Ventures, joint ventures are included under the gross equity method. As a result, the Group's balance sheet discloses the Group's share of the gross assets and gross liabilities of the joint ventures. Associates are shown at the Group's share of their net assets. In both cases, the Group's share of operating profit, net interest payable and taxation are included in the Group's profit and loss account. j) Other investments Fixed asset investments are stated at cost less any provision for permanent impairment in value. k) Financial instruments The Group uses interest rate swaps for hedging purposes in line with its risk management policies to alter the risk profile of existing underlying exposure in respect of floating rate debt. Amounts payable and receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period of the contracts. l) Deferred taxation Deferred taxation is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19, Deferred Taxation. Deferred tax assets are recognised to the extent that they are considered recoverable. m) Pensions The Group makes pre-defined contributions to employees' personal pension plans. n) Change in accounting policy: Pre-contract costs In accordance with the Urgent Issues Taskforce Abstract 34, expenditure incurred prior to obtaining preferred bidder status from English Partnerships in relation to the Millennium Dome and the redevelopment of other parts of the Greenwich Peninsula has been charged in the profit and loss account. In adopting this Abstract, the results for the year ended 31 March 2002 have been restated as set out below. There has been no impact upon profits in the current year. 2003 2002 Â£000 Â£000 ______ ______ Increase in cost of sales - (442) Decrease in tax on profit on ordinary activities - 133 ______ ______ Decrease in profit for the financial year - (309) Decrease in opening reserves (542) (233) ______ ______ Decrease in shareholders' funds (542) (542) ===== ===== Decrease in debtors (775) (775) Decrease in creditors: amounts falling due within one year 233 233 ______ ______ Decrease in net assets (542) (542) ===== ===== 2. Turnover, cost of sales and gross profit These comprised: 2003 2002 Turnover Cost of Gross Turnover Cost of Gross sales profit sales profit Restated Restated Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ _______ ______ ______ ______ ______ Rents receivable 37,367 (8,210) 29,157 45,164 (7,162) 38,002 Proceeds from sales of trading properties 12,115 (9,657) 2,458 2,585 (1,889) 696 Income from leisure operations 5,950 (3,163) 2,787 - - - Other income 2,173 - 2,173 2,681 - 2,681 ______ _______ ______ ______ _______ ______ 57,605 (21,030) 36,575 50,430 (9,051) 41,379 ===== ====== ===== ===== ====== ===== The cost of sales in relation to rents receivable consisted of: 2003 2002 Â£000 Â£000 _____ _____ Rents payable 1,437 1,231 Property management fees 923 683 Legal and professional fees 816 1,243 Irrecoverable service charges 1,802 1,327 Property amortisation 871 333 Other property costs 2,361 1,903 _____ _____ 8,210 6,720 Prior year adjustment: UITF 34 (note 1n) - 442 _____ _____ 8,210 7,162 ==== ==== 3. Segmental analysis a) Geographical segmental analysis The geographical split of the Group's business was as follows: 2003 2002 Turnover Operating Net assets Turnover Operating Net assets profit profit Restated Restated Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ ______ ______ United Kingdom 55,023 24,764 667,208 47,326 31,072 580,540 France 1,516 813 7,981 1,267 643 7,020 United States 1,066 621 8,955 1,837 1,116 8,895 ______ ______ _______ ______ ______ _______ 57,605 26,198 684,144 50,430 32,831 596,455 ===== ===== ===== ===== Net investment in joint ventures and 35,046 29,688 associates (note 12) Net debt (note 25c) (275,874) (231,780) _______ _______ 443,316 394,363 ====== ====== Turnover by geographical destination is the same as turnover by origin. All sales of investment properties in the current year arose in the United Kingdom. The profit on the sale of investment properties in 2002 was shown after a loss of Â£546,000 on a disposal in the United States. 3. Segmental analysis b) Business segmental analysis The return from the Group's property assets including its overseas properties, whether held directly or through its joint ventures and associates, was as follows: Gross Net Book Revaluation Property Property rents rents value uplift return return receivable receivable 2003 2002 Restated Â£000 Â£000 Â£000 Â£000 % % ______ ______ ______ ______ ______ ______ RPI properties - own 2,759 2,690 37,825 2,195 13.7 10.0 properties Short leasehold properties 1,143 730 8,313 130 10.4 25.3 High yielding properties 13,957 11,431 142,578 10,071 17.4 8.5 Properties held for their lease restructuring potential 1,476 1,442 24,850 (1,428) 0.1 8.1 Properties held for their reversionary potential 3,969 3,661 62,671 4,443 16.4 13.3 Special projects 9,407 6,536 364,620 33,158 14.0 16.6 Properties held for resale 4,656 2,667 81,688 (351) 2.6 5.4 ______ ______ _______ ______ Total - own properties 37,367 29,157 722,545 48,218 12.5 12.6 ===== ===== ====== ===== === === Joint ventures and associates 14.4 12.9 === === Total 12.6 12.6 === === Definitions: ____________ RPI properties are those whose rents increase in line with the Retail Price Index - typically annually. Short leasehold properties are those leaseholds of 50 years or less. High yielding properties are those yielding more than the average of the CB Hillier Parker Rent Index. Properties held for their lease restructuring potential are those where it is anticipated additional income / value can be created through the reorganisation of their lease structure. Properties held for their are those where the current market rent exceeds reversionary potential the existing (or passing) rent. Special projects are those properties with large capital values and significant development potential. Properties held for resale are those whose income / value potential has been fully realised. The ungeared return for the year takes account of property income, profits from disposal and revaluation surpluses and expresses this sum as a percentage of a capital base consisting of opening book values adjusted for acquisitions and disposals on a time apportioned basis. 4. Administrative expenses a) These included: 2003 2002 Â£000 Â£000 ______ ______ Directors' remuneration 2,066 2,169 Staff costs 4,520 2,433 Legal and other professional fees 1,298 2,404 Office costs 1,851 837 Profit on sale of fixed assets (40) (6) Depreciation of tangible fixed assets 253 273 Operating lease payments 278 278 General expenses 151 160 ______ ______ 10,377 8,548 ===== ===== Directors' remuneration includes a termination payment made to a director of Â£299,000 (note 5a). Legal and other professional fees in 2003 are shown net of a recovery of Â£763,000 (2002: Â£nil) in respect of costs. b) Fees paid to the auditors and their associates: 2003 2002 Â£000 Â£000 _____ _____ Audit: Group 200 170 Parent company only 28 25 Non-audit 502 374 ==== ==== Fees paid to other accountancy firms were Â£340,000 (2002: Â£263,000). c) Staff costs Total payroll costs were as follows: 2003 2002 Â£000 Â£000 ______ ______ Wages and salaries 5,579 3,583 Social security costs 602 414 Other pension costs 294 240 ______ ______ 6,475 4,237 ===== ===== Staff costs include Â£316,000 (2002: Â£ nil) which are charged through rents payable and other property outgoings. d) Staff numbers The average number of persons employed by the Group during the year was 205 (2002: 34) split as follows: 2003 2002 Â£000 Â£000 ______ ______ Property portfolio management and administration 43 34 Leisure operations 162 - ______ ______ 205 34 ===== ===== 5. Directors' emoluments, share options and interests in ordinary shares a) Emoluments Basic Termination Bonus Fees Benefits 2003 2002 2003 2002 salary payment Total Total Pensions Pensions Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ ______ ______ ______ ______ ______ Executive N G Ellis 125 - 31 - 5 161 234 - - (Chairman) A R Wyatt 395 - 99 - 56 550 747 37 40 M E Riley 75 299 36 - 15 425 254 8 16 (resigned 31 July 2002) N S K Shattock 225 - 83 - 28 336 343 21 19 E S Dugdale 88 - 44 - 12 144 324 15 18 (resigned 7 October 2002) R J Worthington 100 - 13 - 17 130 61 10 5 J Hamilton 96 - - - 8 104 - 10 - Stubber (appointed 14 October 2002) Non-executive J B Evans - - - - - - 38 - - (resigned 24 April 2002) B S Thomas - - - 35 - 35 30 - - M R Meech - - - 30 - 30 25 - - D G Pangbourne - - - 30 - 30 15 - - W J T Plender - - - 20 - 20 - - - (appointed 23 July 2002) _____ _____ _____ _____ _____ _____ _____ _____ _____ Total 2003 1,104 299 306 115 141 1,965 - 101 - ==== ==== ==== ==== ==== ==== ==== ==== ==== Total 2002 1,180 - 697 108 86 - 2,071 - 98 ==== ==== ==== ==== ==== ==== ==== ==== ==== The basic salary for 2002 includes a payment of Â£90,000 made on appointment to M E Riley. Bonuses relate to amounts paid in June 2002. Fees include payments of Â£30,000 (2002: Â£25,000) made to BT Consulting and BT Consulting Inc Limited on behalf of Ms Thomas and Â£5,000 (2002: Â£5,000) in respect of her expenses. Following his resignation on 7 October 2002, the Group has paid fees amounting to Â£35,000 to Edward Dugdale and Â£65,000 to a consultancy of which he is a director for advice in relation to its joint venture, Quercus Property Partnership. 5. Directors' emoluments, share options and interests in ordinary shares (continued) b) Share options Number Number Number Number Exercise Market Exercise Exercise of of of of price price period period options options options options per at date from to 31 March granted exercised / 31 March share of 2002 in year lapsed 2003 exercise in year ______ ______ ______ ______ ______ ______ ______ ______ ______ A R Wyatt Approved 6,040 - 6,040 151.5p 228.0p 22.02.02 21.02.09 Unapproved 732,673 - (732,673) - 151.5p 228.0p 22.02.02 21.02.06 Unapproved 98,060 - (98,060) - 163.2p 228.0p 28.05.02 27.05.06 Unapproved 128,762 - - 128,762 155.3p 13.06.03 12.06.07 Unapproved 40,101 - - 40,101 199.5p 04.09.04 03.09.08 Approved - 7,693 - 7,693 271.0p 17.06.05 16.06.12 Unapproved - 462,786 - 462,786 271.0p 17.06.05 16.06.09 M E Riley Approved 15,789 - (15,789) - 190.0p note 05.09.04 04.09.11 Unapproved 142,106 (142,106) - 190.0p note 05.09.04 04.09.08 Unapproved - 157,895 (157,895) - 190.0p note 17.06.05 16.06.09 N S K Approved 26,315 - - 26,315 114.0p 18.08.98 17.08.05 Shattock Unapproved 173,685 - - 173,685 114.0p 18.08.98 17.08.05 Unapproved 26,548 - - 26,548 113.0p 23.07.99 22.07.03 Unapproved 61,946 - - 61,946 113.0p 23.07.99 22.07.03 Unapproved 82,352 - - 82,352 136.0p 06.08.00 05.08.04 Unapproved 39,604 - - 39,604 151.5p 22.02.02 21.02.06 Unapproved 49,029 - - 49,029 163.2p 28.05.02 27.05.06 Unapproved 38,625 - - 38,625 155.3p 13.06.03 12.06.07 Unapproved 60,150 - - 60,150 199.5p 04.09.04 03.09.08 Unapproved - 252,400 - 252,400 271.0p 17.06.05 16.06.09 E S Dugdale Approved 130,000 - (130,000) - 110.0p 230.0p 26.07.97 25.07.04 Unapproved 70,000 - (70,000) - 114.0p 230.0p 18.08.98 17.08.02 Unapproved 70,000 - (70,000) - 113.0p 230.0p 23.07.99 22.07.03 Unapproved 72,132 - (72,132) - 136.0p 230.0p 06.08.00 05.08.04 Unapproved 66,007 - (66,007) - 151.5p 230.0p 22.02.02 21.02.06 Unapproved 49,029 - (49,029) - 163.2p 230.0p 28.05.02 27.05.06 Unapproved 38,625 - (38,625) - 155.3p note 13.06.03 12.06.07 Unapproved 30,075 - (30,075) - 199.5p note 04.09.04 03.09.08 Unapproved - 200,738 (200,738) - 271.0p note 17.06.05 16.06.09 R J Approved 9,801 - - 9,801 151.5p 22.02.02 21.02.09 Worthington Unapproved 17,455 - - 17,455 151.5p 22.02.02 21.02.06 Unapproved 9,194 - - 9,194 163.2p 28.05.02 27.05.06 Unapproved 14,487 - - 14,487 155.3p 13.06.03 12.06.07 Unapproved 30,075 - - 30,075 199.5p 04.09.04 03.09.08 Approved - 5,590 - 5,590 271.0p 17.06.05 16.06.12 Unapproved - 95,886 - 95,886 271.0p 17.06.05 16.06.09 ________ ________ _________ ________ 2,328,665 1,182,988 (1,873,129) 1,638,524 ======= ======= ======== ======= Note: Options allocated to M E Riley and E S Dugdale which had not vested lapsed on resignation. In 2002, A R Wyatt exercised 13,761 options with an exercise price of 151.5p and a market price of 206.0p. Also in the year, R J Worthington exercised 47,000 options with an exercise price of 151.5p and an average market price of 208.6p. The range of closing middle market prices for the ordinary shares of the Company during the year was 219.5p to 271.5p. The price at the year end was 227.5p. 5. Directors' emoluments, share options and interests in ordinary shares (continued) c) Interests in ordinary shares The interests of directors holding office at the end of the year in the ordinary shares of the Company were as follows: Number of shares Number of shares 2003 2002 _________ _________ N G Ellis 9,000 9,000 A R Wyatt 2,021,936 2,020,520 N S K Shattock 82,546 73,249 R J Worthington 16,475 16,389 J Hamilton Stubber - - B S Thomas 10,000 10,000 M R Meech 3,668 3,668 D G Pangbourne 4,000 - W J T Plender 6,000 6,000 _________ _________ 2,153,625 2,138,826 ======== ======== For directors appointed in the year, the position for 2002 shows their holdings as at the date of their appointment. There were no changes in directors' interests in ordinary shares between the year end and the date these accounts were approved. 6. Net interest payable 2003 2002 Â£000 Â£000 ______ ______ Interest payable on bank loans and overdrafts 18,015 20,904 Interest payable on other loans 309 764 ______ ______ 18,324 21,668 Amortisation of financing costs 704 817 ______ ______ 19,028 22,485 Interest capitalised (2,337) (1,661) Interest receivable (748) (1,152) ______ ______ Group interest charge 15,943 19,672 Share of joint venture and associate interest payable 1,827 1,380 ______ ______ 17,770 21,052 ===== ===== Of the interest capitalised in the year, the amount capitalised to investment properties was Â£2,261,000 (2002: Â£1,483,000) and to trading properties Â£76,000 (2002: Â£178,000). 7. Tax on profit on ordinary activities 2003 2002 Restated Â£000 Â£000 ______ ______ UK Corporation tax on revenue profit for the year at 30% (2002: 362 1,631 30%) Overseas taxation 100 266 ______ ______ Tax on current year revenue profit 462 1,897 Prior year adjustment: UITF 34 (note 1n) - (133) Adjustments to prior years' UK Corporation tax (1,080) (2,902) ______ ______ (618) (1,138) Deferred tax on origination and reversal of timing differences 2,265 1,177 (note 18) Deferred tax asset realised in the year - 1,994 ______ ______ 1,647 2,033 ===== ===== Reconciliation of the taxation charge: Profit on revenue profit for the year at 30% (2002: 30%) 4,190 5,215 Capital allowances (2,071) (2,324) Use of prior year UK tax losses (1,008) (1,236) Capitalised interest (698) (498) Use of losses and differing tax rates in respect of overseas (421) (83) results Disallowable expenditure 1,386 700 Profit on sale of investment properties (254) - Other non-taxable income (223) 123 Capitalised expenses and other timing differences (439) - Adjustments to prior years' UK Corporation tax (1,080) (3,035) ______ ______ (618) (1,138) ===== ===== The current year Corporation tax charge includes tax payable by the Group on its share of joint venture profits. 8. Dividends 2003 2002 Â£000 Â£000 ______ ______ Interim (paid): 2.75p (2002: 2.75p) per share 3,500 3,538 Final (proposed): 5.25p (2002: 4.75p) per share 6,683 6,099 ______ ______ Total: 8.00p (2002: 7.50p) per share 10,183 9,637 ===== ===== 9. Earnings per share and net asset value per share a) Earnings per share 2003 2003 2003 2002 2002 2002 Basic Based on Based on Basic Based on Based on underlying underlying underlying underlying profits profits and profits profits and change in change in accounting accounting policy policy Restated Restated Restated Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Profit for the financial year 12,033 12,033 12,033 14,679 14,679 14,679 Profit on sale of investment - (841) (841) - (743) (743) properties after tax Prior year adjustment: UITF 34 (note - - - - - 309 1n) _______ _______ _______ _______ _______ _______ 12,033 11,192 11,192 14,679 13,936 14,245 ====== ====== ====== ====== ====== ====== Weighted average number of shares 127,660 127,660 127,660 127,808 127,808 127,808 (000) ====== ====== ====== ====== ====== ====== Earnings per share on a diluted basis have been calculated on an adjusted profit of Â£12,201,000 (2002: Â£14,847,000 restated) and the adjusted weighted average number of shares of 131,004,000 (2002: 131,090,000). b) Net asset value per share Basic net asset value per share has been based on net assets of Â£443,316,000 (2002: Â£394,363,000 restated) and 127,301,000 (2002: 128,393,000) shares in issue at the year end. Net asset value per share on a diluted basis has been calculated on adjusted net assets of Â£446,316,000 (2002: Â£397,363,000 restated) and 130,644,000 (2002: 131,674,000) shares. 10. Investment properties The movements in the year in investment properties were as follows: Group Freehold Long Short Total leasehold leasehold Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Cost or valuation: Balance 1 April 2002 436,844 154,992 16,349 608,185 Reclassification (400) (3,550) 3,950 - Transfers to trading properties (1,432) - - (1,432) Exchange movement 257 - - 257 Additions 147,162 5,600 - 152,762 Interest capitalised 1,917 344 - 2,261 Disposals (82,470) (4,365) - (86,835) Short leasehold amortisation - - (796) (796) Other property amortisation (75) - - (75) Revaluation 42,394 6,187 (363) 48,218 _______ _______ _______ _______ Balance 31 March 2003 544,197 159,208 19,140 722,545 ====== ====== ====== ====== The historical cost of the Group's investment properties as at 31 March 2003 was Â£518,422,000 (2002: Â£447,957,000) and includes capitalised interest of Â£5,687,000 (2002: Â£3,426,000). With the exception of those noted below, investment properties in the United Kingdom and the United States were valued independently as at 31 March 2003 by Jones Lang LaSalle, Chartered Surveyors; Humberts, Chartered Surveyors, or Matthews & Goodman, Chartered Surveyors, as external valuers, on the basis of open market value and in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. The Group's property interests at Greenwich and the Wembley Complex have been valued independently by FPD Savills Commercial Limited, Chartered Surveyors, as external valuers, on the basis of the open market value and in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. Northdale House, London NW10, an hotel investment property, has been valued independently by TRI Hospitality Consulting as external valuers, on the basis of open market value having regard to discounted cash flow. Chateau Rouge, Lille, France has been valued independently by Insignia Bourdais Expertises s.a., Chartered Surveyors, as external valuers, in accordance with the French Valuation Charter adopted by the French Association of Chartered Surveyors. 11. Other fixed assets Group and Company Short Motor Fixtures, Total leasehold vehicles fittings & equipment Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Cost: Balance 1 April 2002 700 75 431 1,206 Additions 75 - 162 237 Disposals - (75) - (75) _______ _______ _______ _______ Balance 31 March 2003 775 - 593 1,368 ====== ====== ====== ====== Depreciation: Balance 1 April 2002 (323) (61) (372) (756) Charge for the year (178) (10) (65) (253) Disposals - 71 - 71 _______ _______ _______ _______ Balance 31 March 2003 (501) - (437) (938) ====== ====== ====== ====== Net book value: 31 March 2003 274 - 156 430 ====== ====== ====== ====== 31 March 2002 377 14 59 450 ====== ====== ====== ====== 12. Fixed asset investments a) Investment in joint ventures Group Shares of Advances Total net assets Â£000 Â£000 Â£000 _______ _______ _______ Balance 1 April 2002 8,739 19,800 28,539 Exchange movement (331) - (331) Repayment of loans (1,381) - (1,381) Share of profit 2,823 - 2,823 Revaluation surplus 884 - 884 Reallocation (2,700) 2,700 - _______ _______ _______ Balance 31 March 2003 8,034 22,500 30,534 ====== ====== ====== The Group's interest in its principal joint ventures were as follows: Holding % of share Country of Joint venture capital held incorporation partner ___________ ___________ ___________ ___________ Hanford Mall Partners Limited Partnership 50 United States Canadian Imperial Bank of Commerce Quercus (General Partner) Limited 500 'A' 50 United Aviva ordinary shares of Â£1 Kingdom (formerly CGNU) each Quercus Property Partnership 19.8 United Norwich Union Kingdom Life & Pensions and Quercus (General Partner) Limited All joint venture undertakings are engaged in property investment. 12. Fixed asset investments (continued) a) Investment in joint ventures The Group's share of the results of its principal joint venture operations was as follows: Quercus Hanford Mall Other Group Partners joint share in Limited ventures joint Partnership ventures Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Summarised profit and loss account Rents receivable 3,587 1,468 - 5,055 Costs of sale (282) (255) - (537) _______ _______ _______ _______ Net rental income 3,305 1,213 - 4,518 Administrative expenses - (128) 31 (97) _______ _______ _______ _______ Group operating profit 3,305 1,085 31 4,421 Interest receivable - - 10 10 Net interest payable (1,279) (329) - (1,608) _______ _______ _______ _______ Profit before taxation 2,026 756 41 2,823 ====== ====== ====== ====== Summarised balance sheet Investment properties at valuation 46,595 10,886 - 57,481 Other assets 3,013 754 341 4,108 _______ _______ _______ _______ Gross assets 49,608 11,640 341 61,589 Bank loans falling due after more than one (19,868) (7,858) - (27,726) year Other liabilities (1,459) (1,587) (283) (3,329) _______ _______ _______ _______ Net external assets 28,281 2,195 58 30,534 ====== ====== ====== ====== Represented by: Joint venture capital 5,781 2,195 58 8,034 Joint venture loans 22,500 - - 22,500 _______ _______ _______ _______ Total investment 28,281 2,195 58 30,534 ====== ====== ====== ====== The figures for Quercus include both Quercus Property Partnership and Quercus (General Partner) Limited. Properties held in joint ventures were valued independently as at 31 March 2003 by Matthews & Goodman, Chartered Surveyors, and TRI Hospitality Consulting (both Quercus) and Jones Lang LaSalle, Chartered Surveyors (Hanford Mall) as external valuers on the basis of open market value and in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. The Quercus joint ventures have accounting periods ending on 31 December. The Group's share of their results for the period 1 January 2003 to 31 March 2003 has been based on their management accounts. b) Investment in associates Group Company Â£000 Â£000 _______ _______ Share of net assets: Balance 1 April 2002 1,149 345 Additions in year 3,276 923 Share of net profit (loss) 42 (77) Revaluation surplus 45 - _______ _______ Balance 31 March 2003 4,512 1,191 ====== ====== 12. Fixed asset investments (continued) b) Investment in associates Property interests in associated undertakings were valued independently by Jones Lang LaSalle, Chartered Surveyors (Aqua Trust) and Humberts, Chartered Surveyors, (Quart Limited Partnership) as external valuers, on the basis of open market value and in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors. The Group's interest in its principal associate undertakings was as follows: % of equity held Other members ______________ _____________________________ Aqua Trust 50 Norwich Union Annuity Limited City Executive Centres Limited 40 Nicola and Giles Fuchs Dome General Partner Limited 24.5 AEG Dome Management Limited and Lend Lease Europe Limited Dome Limited Partnership 24.5 AEG London Dome LLC, Lend Lease Europe Limited and Dome GP Limited Meridian Delta Limited 49 Lend Lease Europe Limited Meridian Delta Dome Limited 49 Lend Lease Europe Limited Quart General Partner Limited 25 Britel Fund Nominees Limited and Possfund Nominees Limited Quart Limited Partnership 12.375 Britel Fund Trustees Limited, Possfund Custodian Trustee Limited, Uberior Investments PLC and Quart General Partner Limited c) Other fixed asset investments Group Company Â£000 Â£000 ______ ______ Own shares: Balance 1 April 2002 104 104 Distribution of shares (104) (104) ______ ______ Balance 31 March 2003 - - ===== ===== During the year, 47,160 ordinary shares of 25p in Quintain Estates and Development PLC held in an Employee Share Trust to satisfy accrued bonus entitlements were distributed to employees in accordance with the rules. Group Company Â£000 Â£000 ______ ______ Other: Balance 1 April 2002 188 51 Disposals - (51) ______ ______ Balance 31 March 2003 188 - ===== ===== 12. Fixed asset investments (continued) c) Other fixed asset investments Subsidiaries: Group Company Â£000 Â£000 _______ _______ Balance 1 April 2002 - 293,201 Additions - 10,997 _______ _______ Balance 31 March 2003 - 304,198 ====== ====== Total 31 March 2003 188 304,198 ====== ====== Total 31 March 2002 292 293,356 ====== ====== Principal subsidiaries (whose results are included in the Group financial statements): Principal activity % of share % of share capital held capital held by by Company Subsidiary _________________ ____________ ____________ Incorporated in the United Kingdom: Albion Properties Birmingham Limited Property investment 100% Albion Properties Colchester Limited Property investment 100% Albion Properties Norwich Limited Property investment 100% Cadmus Investments Limited Property investment 100% Chesterfield Investments (No.1) Limited Property investment 100% Chesterfield (Neathouse) Limited Property investment 100% Chesterfield (No.9) Limited Property investment 100% Chesterfield Properties Limited Property investment 100% Comchester Properties Limited Property investment 100% Comgrove Properties Limited Property investment 100% Corfield Properties Limited Property investment 100% Croydon Land Limited Property investment 100% Croydon Land (No.2) Limited Property investment 100% Croydon Properties Limited Property trading 100% Croydon Properties (No.2) Limited Property trading 100% The Crystal Peaks Investment Company Property investment 100% Limited English & Overseas Investments plc Property investment 100% English & Overseas Properties plc Property investment 100% EPIC Commercial Properties Limited Property investment 100% Estates Property Investment Company Property investment 100% Limited George Wilson Developments (Dover) Property investment 100% Limited Keswick Holdings Limited Property investment 100% Licensed Retail Properties Limited Property investment 100% Listed Offices Limited Property investment 100% Permitobtain Limited Property investment 100% Qhere Limited Property investment 100% Qoin Limited Property investment 100% Quaystone Properties Limited Property investment 100% Quintain Meridian Limited Property investment 100% Quintain (No.1) Limited Property investment 100% Quintain (No.9) Limited Property investment 100% Quintain Services Limited Management 100% Quivercare Limited Property investment 100% Quocumque Limited Property investment 100% Quondam Estates Investment Limited Property investment 100% Quondam Estates No.2 Limited Property investment 100% Quo Vadis Estates Limited Property investment 100% Quo Vadis Properties Limited Property investment 100% Tenstall Limited Property investment 100% Wembley (London) Limited Property investment and provision of leisure facilities 100% 12. Fixed asset investments (continued) Principal subsidiaries (whose results are included in the Group financial statements) (continued) Principal activity % of share % of share capital held capital held by by Company Subsidiary _________________ ___________ ___________ Incorporated in France: Continental Investment Development s.a. Holding company 99% SCI Bureaux Du Chateau Rouge Property investment 80% Incorporated in the United States: Chesterfield Holdings Inc. Holding company 100% Chesterfield Investments Inc. Property investment 100% In France, the minority stake in SCI Bureaux Du Chateau Rouge is held by Zamara Corporation (15%) and Lille Gestion (5%). The French subsidiaries have accounting periods ending on 31 December. The Group's share of their results for the period 1 January 2003 to 31 March 2003 has been based on their management accounts. All companies operate principally in their countries of incorporation. A complete list of subsidiaries will be annexed to the next annual return delivered to the Registrar of Companies. Acquisition of subsidiary undertaking On 6 August 2002, the Company acquired the whole of the issued share capital of Wembley (London) Limited for a total consideration of Â£47,421,000 before costs. As some of the consideration is deferred, the amounts shown under creditors have been discounted to reflect its present value. A summary of the assets acquired together with the fair value adjustments and the consideration for the transaction is shown below: Balance Fair value Fair sheet at adjustment value acquisition Recognition balance of sheet deferred tax Â£000 Â£000 Â£000 ______ ______ ______ Investment properties 48,000 - 48,000 Debtors 7,621 - 7,621 Cash at bank and in hand 956 - 956 Creditors: amounts falling due within one year (9,156) - (9,156) Provision for liabilities and - 456 456 charges ______ _____ ______ 47,421 456 47,877 ===== ==== Negative goodwill (1,555) ______ 46,322 ===== Consideration: Cash 14,290 Deferred consideration 33,131 ______ Total consideration 47,421 Discount (2,647) ______ Discounted consideration 44,774 Costs 1,548 ______ 46,322 ===== 12. Fixed asset investments (continued) Impact of acquisition upon the profit and loss account The results of Wembley (London) Limited have been consolidated since acquisition. The contribution to the Group's operating profit for the year has been as follows: Â£000 _________ Turnover 7,383 Cost of sales (3,879) _________ Gross profit 3,504 Administrative expenses (2,346) _________ Operating profit 1,158 ======== 13. Debtors Group Group Company Company 2003 2002 2003 2002 Restated Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ Trade debtors 12,938 6,827 521 33 Amounts due under contracts for sale 21,539 140 - - Other debtors 11,389 11,613 11,286 5,803 Prepayments and accrued income 2,863 1,544 330 344 ______ ______ ______ ______ 48,729 20,124 12,137 6,180 ===== ===== ===== ===== 14. Short term investments Group Group Company Company 2003 2002 2003 2002 Â£000 Â£000 Â£000 Â£000 ______ ______ ______ ______ Treasury stock 14 18 - - ______ ______ ______ ______ 14 18 - - ===== ===== ===== ===== 15. Creditors: amounts due within one year Group Group Company Company 2003 2002 2003 2002 Restated Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Bank and other loans (secured) 188 76,945 - - Trade creditors 3,608 4,188 - 197 Other creditors 41,212 4,582 265 701 Amounts due to subsidiary undertakings - - 76,610 86,318 Dividend proposed 6,683 6,099 6,683 6,099 Corporation tax payable 214 5,409 - - Other taxation and social security 1,301 154 14 268 Accruals and deferred income 9,943 10,519 555 794 _______ _______ _______ _______ 63,149 107,896 84,127 94,377 ====== ====== ====== ====== The amounts due to other creditors include Â£14,032,000 secured on property assets (2002: Â£ nil). 16. Creditors: amounts falling due after more than one year Group Group Company Company 2003 2002 2003 2002 Â£000 Â£000 Â£000 Â£000 _______ ______ ______ ______ Bank and other loans (secured) 292,081 186,575 35,000 3,500 Convertible unsecured loan stock 3,000 3,000 3,000 3,000 10% First Mortgage Debenture Stock 2011 4,870 5,369 - - _______ ______ ______ ______ 299,951 194,944 38,000 6,500 Deferred finance costs (2,132) (2,444) (93) (16) _______ _______ ______ ______ 297,819 192,500 37,907 6,484 Other creditors 16,527 - - - _______ _______ ______ ______ 314,346 192,500 37,907 6,484 ====== ====== ===== ===== The loans are secured by fixed and floating charges over assets owned by subsidiary undertakings. In addition, the Company has guaranteed the bank loans, undertaking a minimum net worth covenant for the Group of Â£225,000,000 (2002: Â£225,000,000). The unlisted convertible unsecured loan stock is repayable on 1 April 2007 and interest is charged at 8% per annum. The loan stock is convertible at any time at the option of the holder into ordinary shares of the Company at a conversion price of 150p per share. The 10% First Mortgage Debenture Stock 2011 issued by Estates Property Investment Company Limited is secured by fixed and floating charges over the assets of the subsidiary undertaking and has a redemption value of Â£4,617,000. The premium over par arising from fair valuing the debenture on acquisition is amortised over its remaining life. The amounts due to other creditors are secured on property assets. 17. Borrowings a) Financial assets As at 31 March 2003, the Group's financial assets comprising cash balances were as follows: 2003 2002 Â£000 Â£000 ______ ______ Sterling 20,451 36,202 Euros 1,310 813 United States dollars 358 632 ______ ______ 22,119 37,647 ===== ===== b) Financial liabilities The Group is subject to interest rate, liquidity and foreign currency risks. The Group does not speculate in treasury products but uses these only to limit potential interest rate fluctuations. It usually borrows at floating rates of interest and uses hedging mechanisms to achieve an interest rate profile where the majority of borrowings are fixed or capped. At the year end, 100% (2002: 100%) of the Group's net debt was fixed or protected, and the weighted average rate of debt was 6.17% (2002: 6.37%). The Group's policy is to finance its activities with equity and long term debt, with a gearing target of 100%. At the year end, the weighted average tenure of the Group's sterling debt was 6 years (2002: 6 years). The Group borrows in the same currency as the assets being financed to minimise foreign currency risk. No currency derivatives are used. 17. Borrowings (continued) b) Financial liabilities The maturity profile of the Group's debt was as follows: Bank loans Other Total Total Undrawn Undrawn and loans debt debt facilities facilities overdrafts 2003 2002 2003 2002 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Up to one year 188 - 188 76,945 - 205 Between one and two years 211 - 211 3,500 - 41,500 Between two and five years 141,470 3,000 144,470 75,792 16,000 40,220 Over five years 150,400 4,870 155,270 115,652 59,500 100,000 _______ _______ _______ _______ _______ _______ 292,269 7,870 300,139 271,889 75,500 181,925 ====== ====== ====== ====== ====== ====== After taking account of interest rate swap arrangements, the risk profile of the Group's borrowings as at 31 March 2003 was as follows: 2003 2002 Fixed Capped Total Fixed Capped Total Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Sterling 203,870 85,099 288,969 180,619 79,574 260,193 Euros 4,670 - 4,670 4,412 - 4,412 United States dollars 6,500 - 6,500 7,284 - 7,284 _______ _______ _______ _______ _______ _______ 215,040 85,099 300,139 192,315 79,574 271,889 ====== ====== ====== ====== ====== ====== The interest rate profile of the Group's fixed rate debt was as follows: Percent 2003 2002 Â£000 Â£000 _______ _______ 4.0 - 5.0 99,170 39,412 5.0 - 6.0 59,500 95,250 6.0 - 7.0 42,000 42,000 7.0 - 8.0 14,370 15,653 _______ _______ 215,040 192,315 ====== ====== The weighted average rate and the weighted average period of the Group's fixed rate debt as at 31 March 2003 were as follows: 2003 2002 2003 2002 % % years years _____ _____ _____ _____ Sterling 5.4 5.7 6 6 Euros 4.7 4.7 3 4 United States dollars 7.7 7.7 6 7 Group 5.5 5.8 6 6 ==== ==== ==== ==== 17. Borrowings (continued) b) Financial liabilities The fair value of the Group's financial liabilities as at 31 March 2003 was as follows: Book value Fair Difference Difference / notional value 2003 2002 principal Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ Fixed rate debt 19,040 20,769 (1,729) (235) Interest rate swaps 196,000 209,160 (13,160) (3,409) _______ _______ _______ _______ 215,040 229,929 (14,889) (3,644) Forward rate swaps 50,000 52,195 (2,195) 8 _______ _______ _______ _______ 265,040 282,124 (17,084) (3,636) ====== ====== ====== ====== The fair values were calculated by J C Rathbone Associates as at 31 March 2003 and reflect the replacement values of the financial instruments used to manage the Group's exposure as at that date. The Group has taken advantage of the exemption under FRS 13 to exclude short term debtors and creditors from these disclosures. Its policies relating to financial instruments are set out in the Financial Review and in the note on the Group's accounting policies (note 1). The maturity profile of the Group's share of floating rate debt held within its joint ventures as at 31 March 2003 was as follows: 2003 2002 Â£000 Â£000 ______ ______ Between one and two years 7,858 - Between two and five years 19,868 28,566 ______ ______ 27,726 28,566 ===== ===== 18. Provisions for liabilities and charges The movement in the year in provisions for liabilities and charges was as follows: Â£000 _____ Balance 1 April 2002 6,850 Deferred tax asset recognised on acquisition of Wembley (London) Limited (note 12c) (456) Charge to profit and loss account (note 7) 2,265 _____ Balance 31 March 2003 8,659 ==== The provisions represent deferred tax comprising: Group Provided Not Provided Not provided provided 2003 2003 2002 2002 Â£000 Â£000 Â£000 Â£000 _____ ______ _____ ______ Timing differences 8,659 - 6,850 - Revaluation surplus - 42,455 - 29,626 _____ ______ _____ ______ 8,659 42,455 6,850 29,626 ==== ===== ==== ===== 19. Called up share capital Â£000 ______ Authorised: 200,000,000 shares of 25p each 50,000 ===== Allotted, called up and fully paid In issue at 1 April 2002: 128,392,873 ordinary shares of 25p each 32,098 Issue on exercise of options over 1,627,479 shares under Staff Share Option Schemes at between 407 110p and 163.2p Purchase and cancellation of 2,719,744 own shares at between 218p and 230p (680) ______ In issue at 31 March 2003: 127,300,608 ordinary shares of 25p each 31,825 ===== As at the year end, the following options granted under the Company's Share Option Schemes remained outstanding: Date of grant Number Exercise Exercise Exercise of price period period ordinary shares per share from to _________ _________ _________ _________ Approved 18.08.95 26,315 114.0p 18.08.98 17.08.05 06.08.97 11,344 136.0p 06.08.00 05.08.07 22.02.99 15,841 151.5p 22.02.02 21.02.09 13.06.00 73,834 155.3p 13.06.03 12.06.10 04.09.01 19,960 155.3p 04.09.04 03.09.11 04.09.01 70,009 199.5p 04.09.04 03.09.11 17.06.02 22,387 199.5p 17.06.05 16.06.12 17.06.02 34,128 271.0p 17.06.05 16.06.12 20.02.03 12,811 234.2p 20.02.06 19.02.13 _________ 286,629 ======== Unapproved 18.08.95 173,685 114.0p 18.08.98 17.08.05 23.07.96 88,494 113.0p 23.07.99 22.07.03 06.08.97 82,352 136.5p 06.08.00 05.08.04 22.02.99 100,871 151.5p 22.02.02 21.02.06 28.05.99 67,417 163.2p 28.05.02 27.05.06 13.06.00 298,384 155.3p 13.06.03 12.06.07 04.09.01 115,046 155.3p 04.09.04 03.09.08 04.09.01 308,857 199.5p 04.09.04 03.09.08 17.06.02 135,006 155.3p 17.06.05 16.06.09 17.06.02 60,488 199.5p 17.06.05 16.06.09 17.06.02 925,098 271.0p 17.06.05 16.06.09 20.02.03 31,944 234.2p 20.02.06 19.02.10 _________ 2,387,642 ======== Total 2,674,271 ======== On December 1993, Scottish Equitable PLC was granted an option over 1,500,000 ordinary shares exercisable at any time in whole or in part, before 6 December 2003 at an exercise price of 110p per ordinary share. Scottish Equitable PLC also holds Â£3,000,000 of the Company's unlisted convertible unsecured loan stock repayable by 1 April 2007. The loan stock is convertible into ordinary shares at a conversion price of 150p per ordinary share. 20. Reserves Group Share Revaluation Other Other Other Profit and premium reserve capital capital capital loss reserves reserves reserves account Capital Merger Capital redemption reserve reserve reserve Restated Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 _______ _______ _______ _______ _______ _______ Balance 1 April 2002 39,950 155,448 1,283 106,062 2,750 57,314 Prior year adjustment: - - - - - UITF 34 (note 1n) - - - - - (542) _______ _______ _______ _______ _______ _______ 39,950 155,448 1,283 106,062 2,750 56,772 Premium on issue of shares less 2,673 - - - - (703) costs Purchase of own shares - - 680 - - (6,166) Surplus on revaluation of: Investment properties - 48,218 - - - - Joint ventures - 884 - - - - Associates - 45 - - - - Realisation of property - revaluation gains of previous years - (2,325) - - - 2,325 Negative goodwill (note 12c) - - - - 1,555 - Exchange movement in year - - - - - 190 Short leasehold amortisation - (122) - - - 122 Retained profit for the financial - - - - 1,850 year ______ ______ ______ ______ ______ ______ Balance 31 March 2003 42,623 202,148 1,963 106,062 4,305 54,390 ====== ====== ====== ====== ====== ====== Company Share Other capital Other capital Profit and premium Reserves reserves loss account Capital Merger redemption reserve reserve Restated Â£000 Â£000 Â£000 Â£000 Balance 1 April 2002 39,950 1,283 106,062 27,528 Premium on issue of shares less costs 2,673 - - - Purchase of own shares - 680 - (6,166) Retained profit for the financial year - - - 7,558 _______ _______ _______ _______ Balance 31 March 2003 42,623 1,963 106,062 28,920 ====== ====== ====== ====== As permitted by section 230 of the Companies Act 1985, the profit and loss of the Company is not presented as part of these financial statements. The profit for the year attributable to shareholders dealt with in the financial statements of the Company was Â£19,741,000 (2002: Â£11,503,000). 21. Capital commitments As at 31 March 2003, the Group had capital commitments of Â£44,350,000 (2002: Â£15,912,000). 22. Commitments under operating leases As at 31 March 2003, the Group's annual commitments under non-cancellable operating leases were as follows: Land and buildings Land and buildings 2003 2002 Â£000 Â£000 ______ _____ Operating leases which expire: Within one year 13 - In two to five years 265 278 ______ _____ 278 278 ===== ===== 23. Contingent liabilities a) Group The Group, through Chesterfield Properties Limited, has guaranteed the payment of current interest on a secured bank loan facility of US $ 27,800,000 (of which US $ 24,833,000 was drawn down as at 31 March 2003) in the event of default by Hanford Mall Partners, a limited partnership in which the Group has a 50% interest, but is not the general partner. b) Company As at 31 March 2003, the Company had guaranteed the external borrowings of some of its subsidiaries amounting to Â£259,599,000 (2002: Â£239,966,000). 24. Related party disclosure During the year, the Group received fees amounting to Â£580,000 (2002: Â£ nil) from Quercus Property Partnership and Â£87,000 (2002: Â£ nil) from Quart Limited Partnership in respect of services provided. These fees are included in other income as shown in note 2. 25. Notes to the Consolidated Cash Flow Statement a) Reconciliation of operating profit to net cash inflow from operating activities 2003 2002 Restated Â£000 Â£000 _______ _______ Operating profit 26,198 32,831 Depreciation charge 1,124 606 Profit on sale of fixed assets (40) (6) Increase in debtors (2,646) (1,950) Increase (decrease) in creditors 7,438 (6,929) Decrease (increase) in trading stock 7,379 (4,222) Write-down of trading stock 61 73 _______ _______ Net cash inflow from operating activities 39,514 20,403 ====== ====== b) Reconciliation of net cash flow movement to net debt 2003 2002 Â£000 Â£000 _______ ________ Increase in cash in the year 3,421 4,912 Cash (inflow) outflow from debt and lease financing (28,540) 104,462 Cash outflow from increase in liquid resources (18,953) (13,779) _______ ________ Change in net debt resulting from cash flows (44,072) 95,595 Costs of issue of non-equity finance 431 82 Amortisation of issue costs (743) (817) Other non-cash movements 290 591 _______ ________ Movement in net debt in the year (44,094) 95,451 Net debt, beginning of the year (231,780) (327,231) _______ ________ Net debt, end of the year (275,874) (231,780) ======= ======= 25. Notes to the Consolidated Cash Flow Statement (continued) c) Analysis of net debt As at Cash flow Other As at 1 April 31 March 2002 2003 Â£000 Â£000 Â£000 Â£000 ________ ______ _____ ________ Liquid resources 22,324 (18,953) - 3,371 Cash 15,341 3,421 - 18,762 Debt due after more than one year (192,500) (105,297) (22) (297,819) Debt due within one year (76,945) 76,757 - (188) ________ _______ ______ ________ (231,780) (44,072) (22) (275,874) ======= ====== ===== ======= Liquid resources consist of short term investments and cash which is not available on demand. The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 31 March 2003 or 2002 but is derived from these accounts. Statutory accounts for 31 March 2002 have been delivered to the Registrar of Companies whereas those for 2003 will be delivered following the Group's Annual General Meeting. The auditors have reported on those accounts. Their reports were unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. Subject to approval at the Annual General Meeting, the recommended final dividend of 5.25p per ordinary share will be paid on 5 September 2003 to shareholders on the register on 15 August 2003. This will bring the total dividend for the year to 8.0p, an increase of 6.7%. The 2003 Annual General Meeting of Quintain Estates and Development PLC will be held at 58 Davies Street, London W1K 5JF on 3 September 2003 at 10.30 am. The Report and Financial Statements for the year ended 31 March 2003 will be posted to shareholders shortly. Non-shareholders may request a copy from the Company Secretary at the registered office, 58 Davies Street, London W1K 5JF. By order of the Board of Quintain Estates and Development PLC Charlotte Eastwood Company Secretary 3 June 2003 This information is provided by RNS The company news service from the London Stock Exchange

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