13th Jun 2007 07:02
Quintain Estates & Development PLC13 June 2007 QUINTAIN ESTATES AND DEVELOPMENT PLC CONSOLIDATED INCOME STATEMENT for the year ended 31 March 2007 2007 2006 Notes £000 £000Revenue from continuing operations 2 43,426 42,051Cost of sales in respect of continuing operations 2 (12,542) (15,295)Gross profit from continuing operations 30,884 26,756Administrative expenses 4 (25,819) (22,660)Operating profit before recognition of results fromnon-current property asset sales and revaluation 5,065 4,096Profit from sale of non-current property assets 11,823 14,188Profit from sale of shares in subsidiaries 6,786 -Gain on revaluation of investment properties 12,181 23,911Deficit on revaluation of investment properties (924) (1,777)Deficit on revaluation of development properties (182) (1,834)Reversal of deficit on revaluation of development 1,255 3,598propertiesShare of profit from joint ventures 12i 23,011 32,864Share of (loss) profit from associates 12ii (455) 393Operating profit before net finance expenses 58,560 75,439Interest payable (12,174) (9,041)Change in fair value of derivative financial instruments 1,493 (2,994)Finance expenses (10,681) (12,035)Finance income 3,759 1,549Net finance expenses 5 (6,922) (10,486)Profit before tax 51,638 64,953Current tax (8,347) (3,033)Deferred tax 1,508 (2,429)Tax charge for the year 6i (6,839) (5,462)Profit after tax but before result from discontinued operations 44,799 59,491Loss from discontinued operations, net of tax 7 (34) (2,829)Profit for the financial year 44,765 56,662 Earnings per share from continuing operations (pence): 8i(a)basic 35.0 46.1diluted 34.3 45.2 Earnings per share from total operations (pence): 8i(b)basic 34.9 43.9diluted 34.3 43.0 Dividends per share (pence): 9interim (paid) 3.50 3.25final (proposed) 8.25 7.25Total 11.75 10.50 In accordance with IAS 10, 'Events after the Balance Sheet Date', theConsolidated Balance Sheet reflects dividends which have been paid in the year.Proposed dividends are shown for information purposes only. QUINTAIN ESTATES AND DEVELOPMENT PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE for the year ended 31 March 2007 2007 2006 Notes £000 £000Foreign currency translation differences (319) 278Gain on revaluation of development properties 179,284 100,798Deficit on revaluation of other non-current investments (882) -Effective portion of changes in fair value of cashflow hedges, net of 7,047 (1,676)recyclingShare of recognised income and expense in joint ventures, net of tax 12i 546 (102)Tax recognised on income and expense recognised directly in equity 6iii (44,328) (31,435)Net income recognised directly in equity 141,348 67,863Profit for the financial year 44,765 56,662Total recognised income and expense for the financial year 186,113 124,525 QUINTAIN ESTATES AND DEVELOPMENT PLC CONSOLIDATED BALANCE SHEET as at 31 March 2007 2007 2006 Notes £000 £000Non-current assetsInvestment properties 10 288,938 290,088Development properties 10 769,305 599,455Owner-occupied properties, plant and equipment 11 1,470 942Investment in joint ventures 12i 170,099 120,076Investment in associates 12ii 1,222 1,677Other non-current investments 12iii 3,044 2,716Non-current receivables 13 45,349 -Total non-current assets 1,279,427 1,014,954Current assetsTrading properties 14 6,831 6,814Trade and other receivables 15 73,667 72,312Current investments 16 4 7Cash and cash equivalents 20i 36,048 7,954Total current assets 116,550 87,087Total assets 1,395,977 1,102,041Current liabilitiesBank loans and other borrowings 18 (3,000) (4,432)Trade and other payables 17 (37,466) (49,104)Current tax liability (9,216) (1,521)Total current liabilities (49,682) (55,057)Non-current liabilitiesBank loans and other borrowings 18 (333,924) (246,626)Deferred tax liability 6iv (149,620) (106,800)Obligations under finance leases 19 (11,734) (12,213)Other payables (4,919) (4,670)Total non-current liabilities (500,197) (370,309)Total liabilities (549,879) (425,366)Net assets 846,098 676,675EquityIssued capital 23 32,457 32,324Share premium account 22 50,797 47,265Revaluation reserve 22 370,814 248,836Other capital reserves 22 108,136 113,227Cashflow hedge reserve 22 671 (4,808)Translation reserve 22 86 405Retained earnings 22 292,481 242,920Own shares held reserve 22 (9,344) (3,494)Equity shareholders' funds 846,098 676,675 Net asset value per share (pence): 8iibasic 660 526diluted 655 516 Approved by the Board of Directors and signed on its behalf by: ADRIAN WYATT REBECCA WORTHINGTONDirector Director 13 June 2007 QUINTAIN ESTATES AND DEVELOPMENT PLC CONSOLIDATED CASHFLOW STATEMENT for the year ended 31 March 2007 2007 2006 Notes £000 £000Operating activitiesProfit for the financial year 44,765 56,662Adjustments for:Short leasehold amortisation 248 408Depreciation of plant and equipment 472 441Cost relating to share-based payment schemes 3,718 1,180Net finance expenses 6,922 10,486Profit from sale of non-current property assets (11,823) (14,188)Profit from sale of shares in subsidiaries (6,786) -Gain on revaluation of investment properties (12,181) (23,911)Deficit on revaluation of investment properties 924 1,777Deficit on revaluation of development properties 182 1,834Reversal of deficit on revaluation of development properties (1,255) (3,598)Share of profit from joint ventures (23,011) (32,864)Share of loss (profit) from associates 455 (393)Loss from sale of plant and equipment 61 30Impairment of other investments 69 632Tax on continuing operations 6,839 5,462Tax on discontinued operations (14) (1,213) 9,585 2,745Decrease in trade and other receivables 1,870 7,830(Decrease) increase in trade and other payables (7,061) 430(Increase) decrease in trading properties (17) 3,313Cash generated from operations 4,377 14,318Interest paid (18,930) (15,395)Interest received 3,587 1,526Tax paid (520) (231)Net cashflow from operating activities (11,486) 218Investing activitiesPurchase and development of property assets (133,096) (112,058)Purchase of plant and equipment (1,010) (2,365)Proceeds from sales of non-current assets 117,595 88,390Tax paid on sales of non-current assets (3,230) (5,486)Proceeds from sale of current investments 3 12Proceeds from sale of shares in subsidiary companies 20,476 -Acquisition of shares in subsidiary companies - (7,335)Acquisition of investment in joint ventures (2,335) (553)Loans to joint ventures and associates (17,588) (24,474)Distributions received from joint ventures 8,400 3,002Acquisition of other investments (54,962) (3,160)Proceeds from sale of other investments 7,851 -Net cashflow from investing activities (57,896) (64,027)Financing activitiesIssue of shares 1,120 247Purchase of own shares for cancellation - (108)Investment in own shares (6,060) (1,955)Proceeds from new borrowings 315,000 281,004Repayment of borrowings (197,432) (205,150)Payment of loan issue costs (431) (400)Payment of finance lease liabilities (873) (190)Equity dividends paid (13,744) (12,867)Net cashflow from financing activities 97,580 60,581Net increase (decrease) in cash and cash equivalents 28,198 (3,228)Cash and cash equivalents at start of year 7,954 11,090Effect of exchange rate fluctuations on cash held (104) 92Cash and cash equivalents at end of year 36,048 7,954Net cashflow from discontinued operations included in net cashflow from operating activities 7 (489) (2,374) QUINTAIN ESTATES AND DEVELOPMENT PLC NOTES TO THE ACCOUNTS for the year ended 31 March 2007 1 ACCOUNTING POLICIES i) BASIS OF PREPARATION The Group's financial statements have been prepared and approved by the Board inaccordance with International Financial Reporting Standards and interpretationsissued by the International Financial Reporting Interpretations Committee asadopted by the European Union ('IFRS') and those parts of the Companies Act 1985applicable to companies reporting under IFRS. The financial statements are presented in Sterling and have been prepared on anhistorical cost basis except that investment and development properties, othernon-current investments and certain financial instruments as described insection xvii below have been stated at fair value. The Group has adopted the amendments to IAS 39, 'Financial Instruments:Recognition and Measurement', and IFRS 4, 'Insurance Contracts', which apply inrelation to financial guarantee contracts, both of which are effective foraccounting periods commencing on or after 1 January 2006. Where Group companiesenter into financial guarantee contracts to guarantee the indebtedness orobligations of other companies within the Group, these are considered to beinsurance arrangements and accounted for as such. In this respect, the guaranteecontract is treated as a contingent liability until such time as it becomesprobable that the guarantor will be required to make a payment under theguarantee. Accordingly, the amendments have not had any impact upon thesefinancial statements. As at the date of these financial statements, IFRS 7, 'Financial Instruments:Disclosure', had been issued but was not effective and has not been adopted bythe Group. On adoption, the Standard will affect only presentation anddisclosure and will not result in any adjustments to the financial statements. ii) SIGNIFICANT JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of financial statements under IFRS requires the Board to makejudgements, estimates and assumptions that affect the application of accountingpolicies, the reported amounts of assets and liabilities as at the date of thefinancial statements and the reported amount of revenue and expense during thereporting period. The estimates and associated assumptions are based onhistorical experience and various other factors that are believed to bereasonable under the circumstances, the results of which form the basis ofmaking judgements that are not readily apparent from other sources. However,the actual results may differ from these estimates. The measurement of fair value constitutes the main area of judgement exercisedby the Board in respect of the Group's results. In relation to the Group'sinvestment and development properties, the Board has relied upon the externalvaluations carried out by professionally qualified valuers in accordance withthe Appraisal and Valuation Standards of the Royal Institution of CharteredSurveyors. Copies of the valuation reports of Savills Commercial Limited andJones Lang LaSalle Limited, which together account for 98.5% of these categoriesof non-current assets, and of Christie + Co which values the investmentproperties within Quercus, currently the Group's principal joint venture, arecontained within the annual report. In respect of derivative financial instruments, the Board has relied on thevaluation carried out by JC Rathbone Associates Limited, financial riskconsultants, and the basis for this exercise is referred to below in sectionxvii of this note and in note 21. The Board has also exercised its judgement in relation to the recognition ofcertain deferred tax assets, which is discussed in further detail in note 6iv,and in assessing the recoverability of trade receivables by reference to theirage and the ability of debtors to pay. Other areas of judgement, risk anduncertainty which are relevant to an understanding of these results and theGroup's financial position are referred to in the Operating and FinancialReview. The estimates and underlying assumptions are reviewed on an ongoing basis.Revisions to accounting estimates are recognised in the period in which theestimate is revised, if the revision affects only that period, or in the periodof the revision and future periods if the revision affects both current andfuture periods. iii) BASIS OF CONSOLIDATION The Group's financial statements consolidate those of the Company and itssubsidiaries, together referred to as the Group, and equity account the Group'sinterest in joint ventures and associates. The Parent Company financialstatements present information about the Company as a separate entity and notabout the Group. The Company has elected to prepare its parent company financialstatements in accordance with UK GAAP. Subsidiaries are those entities controlled by the Group. Control exists whenthe Group has the power, directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefits from its activities.In assessing control, potential voting rights that are currently exercisable orconvertible are taken into account. The financial statements of subsidiaries areincluded in the consolidated financial statements from the date that controlcommences until the date it ceases. A joint venture is an undertaking in which the Group has a long term interestand over which it exercises joint control. An associate is an entity in whichthe Group has significant influence but not control over financial and operatingpolicies. The Group equity accounts for its share of net profit after tax ofjoint ventures and associates, which includes its share of fair valueadjustments to their investment properties, through the Income Statement. Theeffective portion of changes in the fair value of cashflow hedges within jointventures less any related tax is recognised directly in equity. All otherchanges are recognised in the Income Statement. The Group's interest in the netassets of joint ventures and associates is included in the Consolidated BalanceSheet. iv) FOREIGN CURRENCY Assets and liabilities of foreign operations are translated into Sterling atexchange rates ruling at the Balance Sheet date. Operating income and expensesare translated at average exchange rates. The year end and average rates usedfor these purposes were as follows: Year end Year end Average Average 2007 2006 2007 2006France £1= €1.47 €1.44 €1.49 €1.47United States £1= $1.96 $1.74 $1.89 $1.79 Exchange differences arising from the translation of the net investment inforeign operations are reflected in the translation reserve and released to theIncome Statement upon disposal of the foreign operation. v) REVENUE AND COST OF SALES Revenue is stated net of VAT and comprises rental income, proceeds from sales oftrading properties, income from hotel operations, fees from fund management,commissions and other income. Rental income from investment and development properties leased out underoperating leases is recognised in the Income Statement on a straight-line basisover the term of the lease. Contingent rents such as turnover rents and indexedrents are recognised as income in the periods in which they are earned. Rentreviews are recognised when such reviews have been agreed with tenants. Lease incentives are recognised as an integral part of the net consideration forthe use of the property and amortised on a straight-line basis over the term ofthe lease, or the period to the first tenant break, if shorter. Property operating costs are expensed as incurred including any element ofservice charge expenditure not recovered from tenants. Sales of trading properties are recognised on the unconditional exchange ofcontracts by the Balance Sheet date. Income from hotel operations represents income receivable from the Plaza Hotel,Wembley prior to the redevelopment of the site, for which outline planningconsent has been obtained. Fees from fund management relate to base and performance fees receivable inrespect of asset management together with property procurement fees.Performance fees are recognised when it is likely that performance criteria havebeen met. Other income comprises income receivable from derivative instruments enteredinto by the Group, tenant lease surrender premiums, insurance commission, carparking receipts, property management fees and miscellaneous income. vi) PURCHASE AND DISPOSAL OF PROPERTIES HELD AS NON-CURRENT ASSETS Property purchases and sales are recognised in the accounts on the date ofunconditional exchange or, where an exchange is conditional, on the date thatconditions have been satisfied. Profits or losses arising on disposal arecalculated by reference to the carrying value of the asset at the beginning ofthe year, adjusted for subsequent capital expenditure. vii) IMPAIRMENT The Group's assets are reviewed at each reporting date to determine whetherthere is any indication of impairment. If such indication becomes evident, theasset's recoverable amount is estimated and an impairment loss recognisedwhenever the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset is the greater of its net selling price andits value-in-use. The value-in-use is determined as the net present value ofthe future cashflows expected to be derived from the asset, discounted using apre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. Any impairment of financialassets is based on the original effective interest rate attributable to thefinancial asset on acquisition. viii) EMPLOYEE BENEFITS Pensions Contributions to employees' personal pension plans are charged to the IncomeStatement as incurred. Share-based payment schemes The fair value of equity rights is estimated using the Black Scholes andbinomial models at the date of grant to Directors and staff and is dependent onfactors such as the exercise price, expected volatility, option price and riskfree interest rate. The fair value is then amortised through the IncomeStatement on a straight-line basis over the vesting period. Expected volatilityis determined based on the historic share price volatility (market price) forthe Company on the grant date over a period matched to the expected life of theawards. ix) CAPITALISATION OF BORROWING COSTS Net borrowing costs in respect of capital expenditure on properties underdevelopment or undergoing refurbishment are capitalised. Interest is capitalisedusing the Group's weighted average cost of borrowing from the commencement ofdevelopment work until the date of practical completion. The capitalisation offinance costs is suspended if there are prolonged periods when developmentactivity is interrupted. All other borrowing costs are recognised in the IncomeStatement in the period in which they are incurred. x) TAX Tax is included in the Income Statement except to the extent that it relates toitems recognised directly in equity, in which case the related tax is recognisedin equity. Current tax is the expected tax payable on the taxable income for theyear using tax rates applicable at the Balance Sheet date. Tax payable upon therealisation of revaluation gains recognised in prior periods is recorded as acurrent tax charge with a release of the associated deferred taxation. Deferred tax is provided on all temporary differences, except in respect ofinvestments in subsidiaries and joint ventures where the timing of the reversalof the temporary difference is controlled by the Group and it is probable thatthe temporary difference will not reverse in the foreseeable future. Deferred tax is provided using the Balance Sheet liability method in respect oftemporary differences between the carrying amount of assets and liabilities forfinancial reporting purposes and amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner ofrealisation or settlement of the carrying amount of assets and liabilities,using tax rates applicable at the Balance Sheet date. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. xi) DISCONTINUED OPERATIONS In accordance with IFRS 5, 'Non-current Assets held for Sale and DiscontinuedOperations', the loss from discontinued operations is shown in the IncomeStatement net of tax. xii) INVESTMENT PROPERTIES Investment properties are properties owned or leased by the Group which are heldeither for long term rental growth or for capital appreciation or both.Investment property is initially recognised at cost including relatedtransaction costs and valued annually by professionally qualified externalvaluers. Additions to investment properties consist of costs of a capital nature and inthe case of investment properties under development, capitalised interest. Investment properties are independently valued annually by external valuers atmarket value. The valuations are prepared by considering the aggregate of thenet annual rents receivable from the properties and where relevant, associatedcosts. A yield which reflects the specific risks inherent in the net cashflowsis then applied to the net annual rentals to arrive at the property valuation. Gains or losses arising from changes in the fair value of investment propertyare included in the Income Statement of the period in which they arise. When the Group redevelops an existing investment property for continued futureuse as an investment property, the property remains an investment property andis not reclassified. xiii) DEVELOPMENT PROPERTIES Properties acquired with the intention of redevelopment are classified asdevelopment properties and stated at fair value in accordance with IAS 16, 'Property, Plant and Equipment'. Changes in fair value are recognised throughequity in the revaluation reserve. However, a deficit on revaluation of adevelopment property is recognised in the Income Statement to the extent itexceeds any surplus held in the revaluation reserve relating to a previousrevaluation of that property. Similarly, a surplus on revaluation is creditedto the Income Statement to the extent of a deficit previously charged. All costs directly associated with the purchase and construction of adevelopment property are capitalised. When development properties arecompleted, they are reclassified as investment properties and any accumulatedbalance on revaluation is transferred to retained earnings. Developmentproperties which are independently valued annually by external professionalvaluers are stated at estimated market value on completion less estimated coststo complete. xiv) LEASES The Group as lessor Leases are classified according to the substance of the transaction. A leasethat transfers substantially all the risks and rewards of ownership to thelessee is classified as a finance lease. All other leases are classified asoperating leases. The Board has exercised judgement in considering the potential transfer of risksand rewards of ownership in accordance with IAS 17, 'Leases', for all propertiesleased to tenants and has determined that all such leases are operating leases.Accordingly, all the Group's leasehold properties are classified as investmentor development properties, as appropriate, and included in the Balance Sheet atfair value. The Group as lessee The obligation to the freeholder or superior leaseholder for the buildingselement of the leasehold is included in the Balance Sheet at the present valueof the minimum lease payments at inception. Payments to the Group's landlordsare apportioned between a finance charge and a reduction of the outstandingliability. The finance charge is allocated to each period during the lease termso as to produce a constant periodic rate of interest on the remaining balanceof the liability. Rent reviews are charged as an expense in the period in which they are incurred. xv) OWNER-OCCUPIED PROPERTIES, PLANT AND EQUIPMENT Fixtures, fittings and equipment are carried at cost less accumulateddepreciation. Depreciation is provided on a straight-line basis over the usefullife of these assets estimated at between three to five years. xvi) TRADING PROPERTIES Trading properties are properties acquired or developed and held for sale andare shown at the lower of cost and net realisable value. The cost of tradingproperties is determined on the basis of specific identification of theirindividual costs. Net realisable value is the estimated selling price in theordinary course of business less estimated costs to completion and the estimatedcosts necessary to make the sale. xvii) FINANCIAL INSTRUMENTS Non-current receivables Non-current receivables are held at amortised cost. Other non-current investments Other non-current investments are non-derivative investments that are designatedas available for sale. As permitted, these were previously held at cost lessimpairment owing to information on which to assess fair value being unavailable.At the current year end, these investments are shown at fair value. Trade and other receivables Trade and other receivables are recognised at invoiced values less provisionsfor impairment. A provision for impairment of trade receivables is establishedwhere there is objective evidence that the Group will not be able to collect allamounts due according to the agreed terms of the receivables concerned. Cash and cash equivalents Cash and cash equivalents consist of cash in hand, deposits with banks and othershort term highly liquid investments with original maturities of three months orless. Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value lessattributable transaction costs. Borrowings are subsequently stated at amortisedcost with any difference between the amount initially recognised and theredemption value being recognised in the Income Statement over the period of theborrowings on an effective interest rate basis. Trade and other payables Trade and other payables are non-interest bearing and are recognised at invoicedamount. Derivative financial instruments The Group uses interest rate swaps to help manage its interest rate risk. Thesederivative financial instruments are recognised initially at fair value andsubsequently re-measured. The gain or loss on re-measurement to fair value isrecognised immediately in the Income Statement, unless the derivatives qualifyfor hedge accounting as cashflow hedges, in which case the effective element ofthe gain or loss is recognised directly through equity in a hedging reserve. The fair value of interest rate swaps is the estimated amount that the Groupwould receive or pay to terminate the swap at the Balance Sheet date, takingaccount of current interest rates and the current creditworthiness of the swapcounterparties. The Group's interest rate swaps are shown in these accounts at fair value asderived by JC Rathbone Associates Limited, financial risk consultants, based onmarket prices, estimated future cashflows and forward rates as appropriate. Other derivative instruments From time to time, the Group invests in derivatives to mitigate or enhance itsexposure to a particular class or a spectrum of property assets and relatedbusinesses. Such instruments are accounted for initially at fair value withsubsequent adjustments to fair value being reflected through the IncomeStatement. xviii) OWN SHARES HELD BY ESOP TRUSTS AND TREASURY SHARES Transactions of the Group-sponsored ESOP Trusts, The Quintain Group EmployeeBenefit Trust and The Quintain Estates and Development Deferred Bonus PlanTrust, are included in the Group's financial statements. In particular, theTrusts' purchases of shares in the Company and shares acquired as treasuryshares are debited directly to equity. 2 REVENUE, COST OF SALES AND GROSS PROFIT 2007 2007 2007 2006 2006 2006 Revenue Cost of Gross Revenue Cost of Gross sales profit sales profit £000 £000 £000 £000 £000 £000Rental income 29,661 (6,821) 22,840 29,897 (8,210) 21,687Income from sales of trading properties 28 - 28 4,065 (3,687) 378Income from hotel operations 3,376 (2,019) 1,357 - - -Fees from fund management 4,650 (1,661) 2,989 3,290 (1,375) 1,915Other income 5,711 (2,041) 3,670 4,799 (2,023) 2,776Continuing operations 43,426 (12,542) 30,884 42,051 (15,295) 26,756Discontinued leisure operations (note 7) 1,295 (716) 579 5,848 (6,738) (890) 44,721 (13,258) 31,463 47,899 (22,033) 25,866 The cost of sales in relation to rental income comprised: 2007 2006 £000 £000Service charge expenditure 3,613 3,998Service charge recovery (2,224) (2,489)Irrecoverable service charges 1,389 1,509Rents payable 223 243Property management fees 632 547Legal and professional fees 883 787Short leasehold amortisation 248 408Other property costs 3,446 4,716 6,821 8,210 Other income was derived from: 2007 2007 2007 2006 2006 2006 Revenue Cost of Gross Revenue Cost of Gross sales profit sales profit £000 £000 £000 £000 £000 £000Income from property derivatives 2,056 (826) 1,230 2,026 (453) 1,573Surrender premiums 1,608 (108) 1,500 1,154 - 1,154Management fees and commissions 1,175 (410) 765 636 - 636Car parking income 724 (255) 469 525 (141) 384Impairment of other non-current investments - - - - (632) (632)Abortive project costs - (325) (325) - (737) (737)Sundry income 148 (117) 31 458 (60) 398 5,711 (2,041) 3,670 4,799 (2,023) 2,776 3 SEGMENTAL ANALYSIS i) BUSINESS SEGMENTAL ANALYSIS The analysis of the Group's results by business segment, which are described inthe Operating and Financial Review, was as follows: 2007 2006 2007 2006 2007 2006 2007 2006 Gross Gross Gross Gross Share of Share of Profit from Profit from revenue revenue profit profit profit from profit from sale of sale of joint joint non- non- ventures ventures current current and and assets assets associates associates £000 £000 £000 £000 £000 £000 £000 £000Investment portfolio 16,690 23,720 12,450 17,155 - - 3,461 13,959Special projects 19,800 13,644 13,597 6,287 (685) 542 9,356 115Fund management 6,936 4,687 4,837 3,314 23,241 32,715 5,792 114 43,426 42,051 30,884 26,756 22,556 33,257 18,609 14,188 2007 2006 Profit Profit before before tax tax £000 £000Investment portfolio 25,673 46,840Special projects 23,836 10,350Fund management 34,870 40,909 84,379 98,099Administrative expenses (25,819) (22,660)Net finance expenses (6,922) (10,486)Profit before tax from continuing operations 51,638 64,953Loss before tax from discontinued operations (note 7): Special projects (48) (4,042)Profit before tax from total operations 51,590 60,911 2007 2007 2007 2007 2006 2006 2006 2006 Investment Development Joint Total Investment Development Joint Total properties properties ventures revaluation properties properties ventures revaluation at at valuation and uplift at valuation at valuation and uplift valuation associates associates £000 £000 £000 £000 £000 £000 £000 £000Investment 228,053 24,481 - 10,559 219,588 19,040 - 17,176 portfolioSpecial 51,150 738,524 42,758 181,938 42,100 575,415 30,409 102,259 projectsFund 9,735 6,300 128,563 26,383 28,400 5,000 91,344 35,126 management 288,938 769,305 171,321 218,880 290,088 599,455 121,753 154,561 2007 2006Capital expenditure £000 £000Investment portfolio 27,217 42,775Special projects 52,445 68,468Fund management 55,719 5,839 135,381 117,082 ii) GEOGRAPHICAL SEGMENTAL ANALYSIS The geographical split of the Group's results was as follows: 2007 2006 2007 2006 2007 2006 2007 2006 Gross Gross Gross Gross Profit Profit Profit Profit revenue revenue profit profit from sale from sale before before of of non- tax tax non-current current assets assets £000 £000 £000 £000 £000 £000 £000 £000United Kingdom and Channel Islands 42,530 40,388 30,527 25,864 17,818 14,188 50,629 63,341France 886 1,628 347 857 791 - 1,025 1,612United States 10 35 10 35 - - (16) - 43,426 42,051 30,884 26,756 18,609 14,188 51,638 64,953Loss before tax from discontinued operations (note 7):United Kingdom (48) (4,042)Profit before tax from total operations 51,590 60,911 2007 2006 2007 2006 Net assets Net assets Capital Capital expenditure expenditure £000 £000 £000 £000United Kingdom and Channel Islands 1,150,407 906,122 135,381 116,731France (3,433) 13,657 - 351 1,146,974 919,779 135,381 117,082Cash and cash equivalents 36,048 7,954Current liabilities: bank loans and other borrowings (3,000) (4,432)Non-current liabilities: bank loans and other borrowings (333,924) (246,626) 846,098 676,675 As at 31 March 2007, all investment properties, development properties, jointventures and associates were located in the United Kingdom and Channel Islands. iii) SECTOR ANALYSIS The analysis of the Group's results by sector was as follows: 2007 2006 2007 2006 2007 2006 2007 2006 Gross Gross Gross Gross Share of Share of Profit Profit revenue revenue profit profit profits profits from sale from sale from joint from joint of non- of non- ventures ventures current current and and assets assets associates associates £000 £000 £000 £000 £000 £000 £000 £000Healthcare 5,016 4,625 3,358 3,251 17,589 32,322 1,934 -Hotels 4,735 2,013 2,589 1,991 - - 2,307 1,978Industrial 4,144 8,643 3,668 5,676 - - 1,679 652Land 4,474 3,355 2,005 725 (707) 542 3,012 24Leisure 6,172 847 6,091 497 - - 508 114Offices 14,464 16,727 10,768 13,553 - - 5,055 8,328Retail 1,369 3,715 918 263 - - 171 3,103Student accommodation 1,313 - 1,028 - 6,129 - 3,833 -Other 1,739 2,126 459 800 (455) 393 110 (11) 43,426 42,051 30,884 26,756 22,556 33,257 18,609 14,188 2007 2006 Profit Profit before before tax tax £000 £000Healthcare 22,674 39,365Hotels 4,898 5,120Industrial 7,917 11,670Land 4,309 1,291Leisure 7,117 596Offices 24,442 36,368Retail 1,949 2,047Student accommodation 10,990 -Other 83 1,642 84,379 98,099Administrative expenses (25,819) (22,660)Net finance expenses (6,922) (10,486)Profit before tax from continuing 51,638 64,953operationsLoss before tax from discontinued operations (note 7):Leisure (48) (4,042)Profit before tax from total operations 51,590 60,911 2007 2007 2007 2007 2006 2006 2006 2006 Investment Development Joint Total Investment Development Joint Total properties properties ventures revaluation properties properties ventures revaluation at at valuation and uplift at at valuation and uplift valuation associates valuation associates £000 £000 £000 £000 £000 £000 £000 £000Healthcare 9,735 - 112,629 21,510 22,300 - 89,667 33,264Hotels 4,700 10,580 - 2 4,698 22,742 - 7,285Industrial 46,059 81,223 - 11,956 43,558 71,785 - 23,230Land - 615,088 42,747 168,090 75 421,866 30,409 74,302Leisure 43,316 - - 518 42,150 8,500 - 63Offices 167,493 33,633 - 9,197 160,204 52,581 - 16,388Retail 16,035 22,481 - 2,585 15,653 16,981 - (1,319)Studentaccommodation - - 14,723 6,199 - - - -Other 1,600 6,300 1,222 (1,177) 1,450 5,000 1,677 1,348 288,938 769,305 171,321 218,880 290,088 599,455 121,753 154,561 2007 2006Capital expenditure £000 £000Healthcare 4,462 151Hotels 10,712 433Industrial 7,168 12,265Land 31,630 65,589Leisure 649 22Offices 25,978 33,685Retail 3,546 4,735Student accommodation 49,260 -Other 1,976 202 135,381 117,082 4 ADMINISTRATIVE EXPENSES 2007 2006 £000 £000Directors' remuneration 4,971 4,148Staff costs 11,967 13,857Cost relating to employee share-based payment schemes 1,439 1,180Total staff costs 18,377 19,185Reorganisation provision for discontinued operations - 650Legal and other professional fees 2,615 1,817Office costs 3,548 2,817Loss on sale of plant and equipment 61 30Depreciation of plant and equipment 472 441Operating lease payments 880 480General expenses 493 392Total administrative expenses 26,446 25,812Continuing operations 25,819 22,660Discontinued operations (note 7) 627 3,152 26,446 25,812 In addition to the depreciation charge disclosed above, short leaseholdamortisation of £248,000 (2006: £408,000) is charged under cost of sales andshown in note 2. i) FEES PAID TO AUDITORS AND THEIR AFFILIATES 2007 2006 £000 £000Fees payable to the Company's auditor for the audit of the Company's annual accounts 240 220Fees payable to the Company's auditor and its associates for other services: The audit of the Company's subsidiaries pursuant to legislation 64 40 Other services pursuant to legislation 32 30 Tax services 8 44 Other services 40 27 Fees paid to other accountancy firms amounted to £431,000 (2006: £270,000) ofwhich £140,000 (2006: £162,000) were capitalised. These fees related mainly totax advisory and internal audit services. ii) STAFF COSTS Staff costs are included in both cost of sales and administrative expenses.Gross staff costs were as follows: 2007 2006 £000 £000Wages and salaries 13,417 14,390Cost relating to Executive Directors' Performance Share 641 566PlanCost relating to other share-based incentive schemes 798 614Provision for national insurance on unexercised share options and rights 628 408Social security costs 2,044 2,051Pension costs 830 806Other employment costs 778 350 19,136 19,185 Cost of sales 759 -Administrative expenses 18,377 19,185 19,136 19,185 Details of Directors' emoluments, pensions and entitlements to share options andrights are contained in the Remuneration Report. Details of Directors' interests in the share capital of the Company arecontained in the Report of the Directors. iii) STAFF NUMBERS The average number of persons employed by the Group during the year was asfollows: 2007 2006 Number NumberProperty portfolio management and 120 128administrationLeisure operations 11 55Hotel operations 68 - 199 183 Staff are allocated between cost of sales and administrative expenses asfollows: 2007 2006 Number NumberCost of sales 59 -Administrative expenses 140 183 199 183 5 NET FINANCE EXPENSES 2007 2006 £000 £000Interest payable on bank loans and overdrafts 18,606 15,328Interest payable on other loans 1,912 1,307Interest on obligations under finance leases 865 230 21,383 16,865Interest capitalised (9,209) (7,824) 12,174 9,041Change in fair value of ineffective interest rate swaps (1,493) 2,994Finance expenses 10,681 12,035Finance income: interest receivable (3,759) (1,549)Net finance expenses 6,922 10,486 Of interest capitalised in the year, the amount capitalised to developmentproperties was £8,980,000 (2006: £7,506,000) and to investment properties was£229,000 (2006: £318,000). In accordance with IAS 39, the Group has reviewed its interest rate hedges inexistence as at 31 March 2007 along with those in its joint ventures. Asassessed by JC Rathbone Associates Limited, movements in fair value of theelements of those viewed as effective have been recognised through equity whileall other movements, including those relating to the ineffective elements ofeffective hedges, are reflected in the Income Statement. 6 TAX i) TAX CHARGE ON PROFIT 2007 2006 £000 £000UK current tax at 30% (2006: 30%) 3,207 1,892Adjustment to prior years' UK corporation tax 1,382 900 4,589 2,792Overseas tax 3,758 241Total current tax charge 8,347 3,033Deferred tax:On investment properties 946 3,052On derivative financial instruments (450) (898)On other temporary differences (2,004) 275Total deferred tax (credit) charge (1,508) 2,429Tax charge 6,839 5,462 ii) TAX CHARGE RECONCILIATION 2007 2006 £000 £000Profit before tax 51,638 64,953Tax applied at UK corporation tax rate of 30% 15,491 19,486Locked-in capital allowances (1,984) (3,551)Use of losses and differing tax rates in respect of overseas results 83 (231)Use of tax losses (1,265) -Indexation relief on UK investment properties (2,194) (1,703)Adjustment to prior years' current and deferred tax 1,883 (534)Tax charge included in share of income from joint ventures and associates (6,643) (9,205)Other movements 1,468 1,200Tax charge 6,839 5,462 iii) TAX RECOGNISED DIRECTLY IN EQUITY 2007 2006 £000 £000Deferred tax charge on revaluation of development properties 42,214 31,938Deferred tax charge (credit) on effective element of interest rate swaps 2,114 (503) 44,328 31,435 iv) DEFERRED TAX MOVEMENTS 1 April Recognised Recognised 31 March 2006 in income in equity 2007 £000 £000 £000 £000Capital gains less capital losses 105,257 946 42,214 148,417Capital allowances 5,776 (1,890) - 3,886Derivative financial instruments (2,986) (450) 2,114 (1,322)Other temporary differences 1,173 (114) - 1,059Revenue tax losses (2,420) - - (2,420)Deferred tax provision 106,800 (1,508) 44,328 149,620 Deferred tax assets estimated at £11,528,000 (2006: £21,360,000) have not beenrecognised due to a higher degree of uncertainty over both the amount and timingof the utilisation of the underlying tax losses and deductions. Under currenttax legislation, there is no expiry date associated with the unprovided deferredtax assets. v) TOTAL TAX CHARGE The total tax charge recognised in these financial statements was as follows: 2007 2006 £000 £000Tax charge on profit as above 6,839 5,462Tax credit on discontinued operations (note 7) (14) (1,213)Tax charge on share of profit in joint ventures (note 12i(c)) 9,686 1,625Tax (credit) charge on share of profit in associates (195) 57Tax charge on income and expenses recognised directly in equity 44,328 31,435Tax charge (credit) on share of income and expenses in joint ventures recognised directly in equity 234 (44) 60,878 37,322 7 DISCONTINUED OPERATIONS The results from the Arena, Conference Hall and Exhibition Centres at Wembleyhave been classified in these financial statements as discontinued. Thebreakdown of the numbers disclosed in the Income Statement in relation to theseactivities was as follows: 2007 2006 £000 £000Revenue 1,295 5,848Cost of sales (716) (6,738)Gross profit (loss) 579 (890)Administrative expenses (627) (3,152)Loss before tax on discontinued operations (48) (4,042)Tax credit 14 1,213Loss after tax on discontinued operations (34) (2,829) The impact upon cashflow of discontinued operations was as follows: 2007 2006 £000 £000Loss after tax on discontinued operations as above (34) (2,829)(Decrease) increase in provision for reorganisation costs, net of tax (455) 455Net cashflow from discontinued operations included in net cashflow from operating (489) (2,374)activities The decision taken by the Board to cease to be involved in the business ofoperating the Arena as well as to terminateits conference and exhibition activities at Wembley has led to theclassification of the results from these operations, which together constitutethe Group's leisure activities, as discontinued. The Arena has been leased to athird party as from April 2006 with the income generated being shown as rentwhile the Conference Hall and Exhibition Centres, which ceased to trade by July2006, are in the process of demolition prior to the redevelopment of the sites. The basic loss per share for discontinued operations was 0.1p (2006: 2.2p). Thediluted loss per share for these operations was 0.04p (2006: 2.2p). 8 EARNINGS PER SHARE AND NET ASSET VALUE PER SHARE i) EARNINGS PER SHARE a) From continuing operations 2007 2007 2007 2006 2006 2006 Profit after Weighted Earnings Profit after Weighted Earnings tax and average per share tax and before average per share before number discontinued number discontinued of shares operations of shares operations £000 000 pence £000 000 penceBasic 44,799 128,169 35.0 59,491 128,937 46.1Adjustments: Interest on 8% convertible 243 2,000 235 2,000 unsecured loan stock Employee share-basedpayment schemes - 1,225 - 1,237Diluted 45,042 131,394 34.3 59,726 132,174 45.2 b) From total operations 2007 2007 2007 2006 2006 2006 Profit after Weighted Earnings Profit after Weighted Earnings tax and after average per share tax and after average per share discontinued number discontinued number operations of shares operations of shares £000 000 pence £000 000 penceBasic 44,765 128,169 34.9 56,662 128,937 43.9Adjustments: Interest on 8% convertible 243 2,000 235 2,000 unsecured loan stock Employee share-based payment schemes - 1,225 - 1,237Diluted 45,008 131,394 34.3 56,897 132,174 43.0 ii) NET ASSET VALUE PER SHARE 2007 2007 2007 2006 2006 2006 Equity Number Net asset Equity Number Net asset shareholders' of shares value shareholders' of shares value funds per share funds per share £000 000 pence £000 000 penceBasic 846,098 128,199 660 676,675 128,635 526Adjustments: 8% convertible unsecured - - 2,893 2,000 loan stock (note 18) Employee share-based 9,642 2,520 9,766 2,925 payment schemesDiluted 855,740 130,719 655 689,334 133,560 516 The number of shares in issue has been adjusted for the 1,627,414 (2006:659,596) shares held by ESOP Trusts and by the Group as treasury shares. Although not required under IFRS, net asset value per share is considered a keyperformance indicator in the sector in which the Group operates. Entitlements under the Executive Directors' Performance Share Plan have beenexcluded from 8i and 8ii as the commitments relate to contingently issuableshares where at the Balance Sheet date conditions had not been met. 9 DIVIDENDS The proposed final dividend of 8.25 pence per share (2006: 7.25 pence per share)was approved by the Board on 6 June 2007 and is payable on 7 September 2007 toshareholders on the register at the close of business on 27 July 2007. Thedividend has not been included as a liability as at 31 March 2007. The totaldividend for the year ended 31 March 2007 amounts to 11.75 pence per share(2006: 10.50 pence per share). The dividend of £13,744,000 included in thereconciliation of equity in note 22 comprises the 2006 final dividend of£9,257,000, which was paid on 8 September 2006, together with the interimdividend of £4,487,000 paid on 18 January 2007. 10 INVESTMENT AND DEVELOPMENT PROPERTIES The movements in the year in investment and development properties were asfollows: Investment Investment Investment Investment Development Development Development Development properties properties properties properties properties properties properties properties Freehold Long Short Total Freehold Long Short Total leasehold leasehold leasehold leasehold £000 £000 £000 £000 £000 £000 £000 £000Cost or valuation:Balance 1 April 192,663 87,469 10,070 290,202 419,918 39,038 4,937 463,8932005Transfers between categories 47,060 (4,960) - 42,100 (39,635) (2,465) - (42,100)Foreign exchange movement 164 - - 164 - - - -Additions 31,879 11,531 - 43,410 65,414 4,831 62 70,307Interest 318 - - 318 7,074 432 - 7,506capitalisedDisposals (91,448) (15,843) (949) (108,240) (2,305) - - (2,305)Short leasehold amortisation - - - - - - (408) (408)Revaluation surplus 10,224 10,968 942 22,134 93,871 7,353 1,338 102,562Balance 31 March 190,860 89,165 10,063 290,088 544,337 49,189 5,929 599,4552006Transfers between categories 8,650 - - 8,650 (6,184) (2,466) - (8,650)Foreign exchange movement (259) - - (259) - - - -Additions 26,877 3,912 - 30,789 97,650 1,023 167 98,840Interest 229 - - 229 8,865 115 - 8,980capitalisedDisposals (34,560) (17,256) - (51,816) (80,706) (22,875) (5,848) (109,429)Short leasehold amortisation - - - - - - (248) (248)Revaluation surplus (deficit) 6,504 4,601 152 11,257 180,862 (505) - 180,357Balance 31 March 198,301 80,422 10,215 288,938 744,824 24,481 - 769,3052007 Of the additions shown above, £92,388,000 (2006: £41,437,000) related toacquisitions of properties. The historical cost of the Group's investment and development properties as at31 March 2007 was £490,676,000 (2006: £496,786,000) and included capitalisedinterest of £23,766,000 (2006: £16,729,000). All of the Group's properties were externally valued as at 31 March 2007 on thebasis of market value by professionally qualified valuers in accordance with theAppraisal and Valuation Standards of the Royal Institution of CharteredSurveyors. The Group's land holding in Greenwich and the Wembley Complex have been valuedby Savills Commercial Limited. The discount rates which have been applied inrelation to these developments were 12% and 10% respectively. Other propertiesin the United Kingdom have been valued by Jones Lang LaSalle Limited andChristie + Co. Properties in the Channel Islands have been valued by GuyGothard & Co. A reconciliation of the valuations carried out by the external valuers to thecarrying values shown in the Balance Sheet was as follows: 2007 2006 £000 £000Investment and development properties at market value as determined by valuers 1,046,962 878,295Adjustment in respect of rent-free periods and other tenant incentives (466) (965)Adjustment in respect of minimum payments under head leases separately includedas a liability in the Balance Sheet 11,747 12,213As shown in the Balance Sheet 1,058,243 889,543 The percentage of investment and development properties valued by each valuerwas as follows: 2007 2007 2007 2007 2006 Per valuers' Adjustment for Properties held Percentage Percentage reports properties as investment valued by each valued by each held in joint and valuer valuer ventures and development associates properties £000 £000 £000 % %Savills Commercial Limited 766,650 (30,242) 736,408 70.3 62.1Jones Lang LaSalle Limited 296,245 (1,600) 294,645 28.2 36.7Other valuers 15,909 - 15,909 1.5 1.2 1,078,804 (31,842) 1,046,962 100.0 100.0 Copies of the valuation reports of Jones Lang LaSalle Limited and SavillsCommercial Limited are included within the annual report. 11 OWNER-OCCUPIED PROPERTIES, PLANT AND EQUIPMENT The movements in owner-occupied properties, plant and equipment were as follows: Long Short Fixtures, Total leasehold leasehold fittings & equipment £000 £000 £000 £000Cost:Balance 1 April 2005 10,039 837 1,250 12,126Additions 1,341 - 1,024 2,365Disposals (11,380) (566) (528) (12,474)Balance 31 March 2006 - 271 1,746 2,017Additions - - 1,010 1,010Disposals - (271) (1,007) (1,278)Balance 31 March 2007 - - 1,749 1,749Depreciation:Balance 1 April 2005 - (823) (887) (1,710)Charge for year - (2) (439) (441)Disposals - 554 522 1,076Balance 31 March 2006 - (271) (804) (1,075)Charge for year - - (472) (472)Disposals - 271 997 1,268Balance 31 March 2007 - - (279) (279) Net book value:31 March 2007 - - 1,470 1,47031 March 2006 - - 942 94231 March 2005 10,039 14 363 10,416 12 NON-CURRENT INVESTMENTS i) INVESTMENT IN JOINT VENTURES a) The movements in investment in joint ventures were as follows: Share of Advances Total net assets £000 £000 £000Balance 1 April 2005 13,195 50,910 64,105Additions 553 - 553Acquisition of interest in joint venture 2,812 - 2,812Acquisition of related deferred tax liability (318) - (318)Amounts advanced - 24,474 24,474Distributions (4,312) - (4,312)Share of profit, net of tax 32,864 - 32,864Share of effective portion of changes in fair value of cashflow hedges, net of tax (102) - (102)Balance 31 March 2006 44,692 75,384 120,076Additions 132 10,426 10,558Acquisitions of interest in joint ventures 5,620 - 5,620Amounts advanced - 18,688 18,688Distributions (8,400) - (8,400)Share of profit, net of tax 23,011 - 23,011Share of effective portion of changes in fair value of cashflow hedges, net of tax 546 - 546Balance 31 March 2007 65,601 104,498 170,099 b) The Group's interest in its joint ventures was as follows: % of Country of Joint venture equity held incorporation partnerQuercus Healthcare Property Unit Trust 27.96 Channel Islands Norwich Union Life & Pensions LimitedMeridian Delta Limited 49.00 United Kingdom Lend Lease Europe LimitedMeridan Delta Dome Limited 49.00 United Kingdom Lend Lease Europe LimitediQ Unit Trust 50.00 Channel Islands Wellcome Trust Investment Limited PartnershipQuantum Unit Trust 50.00 Channel Islands CGNU Life Assurance LimitedCountryside Properties 50.00 United Kingdom Countryside Properties PLC (Merton Abbey Mills) LimitedCountryside Quintain Birmingham Limited 50.00 United Kingdom Countryside Properties PLCBioRegional Quintain Limited 49.90 United Kingdom BioRegional Properties LimitedQuintessential Homes (Wembley) LLP 50.02 United Kingdom Geninvest Limited Family Housing Development Company LimitedSouth East Properties (Redhill) Limited 50.00 United Kingdom South East Properties Limited c) The Group's share of the results of its joint venture operations was asfollows: Quercus Meridian iQ Quantum Quintessential BioRegional Quintain Other Group Delta Homes Quintain Birmingham joint share ventures in joint ventures £000 £000 £000 £000 £000 £000 £000 £000 £000 Summarised income statements for year ended 31 March 2007 Rents 10,669 - 27 - - - - - 10,696 receivableOther income - - - - - - - (6) (6)Administrative expenses (1,608) (235) (88) (32) (85) (271) (23) 9 (2,333)Operating 9,061 (235) (61) (32) (85) (271) (23) 3 8,357 profit (loss)Share of gain on revaluation of investment properties 21,717 - 6,199 - - - - - 27,916Profit before finance expenses and 30,778 (235) 6,138 (32) (85) (271) (23) 3 36,273 taxationFinance (3,674) (16) (9) - - (93) - (13) (3,805) expensesFinance 171 - - - 34 2 - 22 229 incomeProfit (loss)before taxation 27,275 (251) 6,129 (32) (51) (362) (23) 12 32,697Taxation (7,725) - (1,833) - - - - (128) (9,686)Profit (loss) after taxation 19,550 (251) 4,296 (32) (51) (362) (23) (116) 23,011 Summarised balance sheets as at 31 March 2007 Investment properties at 203,051 - 31,600 - - - - - 234,651 valuationOther non- current assets - - - - - - - 2,812 2,812Trading - 30,686 - - 10,470 952 1,655 102 43,865 propertiesOther assets 7,112 2,438 1,537 449 - 1,403 271 667 13,877Gross assets 210,163 33,124 33,137 449 10,470 2,355 1,926 3,581 295,205Current liabilities: - - (16,000) - - - - - (16,000) bank loans and other borrowingsCurrent tax (1,353) - - - - - - - (1,353) liabilityNon-current liabilities: (76,366) - - - - - - - (76,366) bank loans and other borrowingsDeferred tax (11,951) - (1,833) - - - - (318) (14,102) liabilityOther (7,864) (2,057) (581) (460) (4,835) (834) (66) (588) (17,285) liabilitiesNet external 112,629 31,067 14,723 (11) 5,635 1,521 1,860 2,675 170,099 assets Represented by: Capital 52,349 825 4,297 (11) 5,635 (332) 163 2,675 65,601 Loans 60,280 30,242 10,426 - - 1,853 1,697 - 104,498Total 112,629 31,067 14,723 (11) 5,635 1,521 1,860 2,675 170,099 investment Quercus Meridian BioRegional Quintain Merton Other Group Delta Quintain Birmingham Abbey joint share Mills ventures in joint ventures £000 £000 £000 £000 £000 £000 £000 Summarised income statements for year ended 31 March 2006 Rents receivable 7,838 - - - - - 7,838Profit from sale of trading properties - - - - 1,469 - 1,469Administrative expenses (1,031) (216) (272) - (122) - (1,641)Operating profit (loss) 6,807 (216) (272) - 1,347 - 7,666Share of gain on revaluation of investment properties 29,415 - - - - - 29,415Loss on sale of investment properties (39) - - - - - (39)Profit (loss) before finance expenses and taxation 36,183 (216) (272) - 1,347 - 37,042Finance expenses (2,519) (16) (20) - (21) - (2,576)Finance income - - - - 23 - 23Profit (loss) before taxation 33,664 (232) (292) - 1,349 - 34,489Taxation (1,342) - - - (283) - (1,625)Profit (loss) after taxation 32,322 (232) (292) - 1,066 - 32,864 Summarised balance sheets as at 31 March 2006 Investment properties at valuation 147,831 - - - - - 147,831Other non-current assets - - - - - 2,812 2,812Trading properties - 20,772 - - 2,513 - 23,285Other assets 4,873 1,288 931 1,220 2,790 416 11,518Gross assets 152,704 22,060 931 1,220 5,303 3,228 185,446Current tax liability (1,100) - - - (115) - (1,215)Non-current liabilities: bank loans and other borrowings (51,479) - - - - - (51,479)Deferred tax liability (5,345) - - - - (318) (5,663)Other liabilities (5,113) (1,135) (422) - - (343) (7,013)Net external assets 89,667 20,925 509 1,220 5,188 2,567 120,076 Represented by:Capital 37,803 1,056 31 185 3,050 2,567 44,692Loans 51,864 19,869 478 1,035 2,138 - 75,384Total investment 89,667 20,925 509 1,220 5,188 2,567 120,076 Details of the floating rate debt within Quercus and iQ and of interest rateswaps entered into by the former are given in notes 20ii(f) and 21iii. The valuation of investment properties held within Quercus as at 31 March 2007has been based on the exercise carried out by Christie + Co, CharteredSurveyors, as external valuers, on the basis of market value and in accordancewith the Appraisal and Valuation Manual of the Royal Institution of CharteredSurveyors. The Quercus joint venture has an accounting period ending on 31 December. TheGroup's share of its results for the remainder of the financial year has beenbased on its management accounts. d) The summarised financial statements of the Group's principal joint ventureoperations were as follows: 2007 2006 2007 2006 2007 2007 2007 Quercus Quercus Meridian Meridian iQ Quantum Quintessential Delta Delta Homes £000 £000 £000 £000 £000 £000 £000Income statementsIncome 116,433 135,750 - - 12,475 - 67Expenses (18,039) (18,130) (511) (474) (217) (63) (169)Profit (loss) before 98,394 117,620 (511) (474) 12,258 (63) (102)taxation Balance sheetsNon-current assets 726,220 522,187 - 2,628 63,201 - -Current assets 25,436 17,214 67,600 42,392 3,073 898 16,302Total assets 751,656 539,401 67,600 45,020 66,274 898 16,302Current liabilities (75,708) (21,946) (4,198) (2,316) (36,828) (920) (5,037)Non-current liabilities (273,126) (200,721) - - - - -Net external assets 402,822 316,734 63,402 42,704 29,446 (22) 11,265 Percentage share held by Group 27.96% 28.31% 49.00% 49.00% 50.00% 50.00% 50.02%Group share of net external assets 112,629 89,667 31,067 20,925 14,723 (11) 5,635 2007 2006 2007 2006 2007 2006 BioRegional BioRegional Quintain Quintain Merton Merton Quintain Quintain Birmingham Birmingham Abbey Mills Abbey Mills £000 £000 £000 £000 £000 £000Income statementsIncome 100 - - - 32 2,938Expenses (825) (589) (45) - (14) (240)(Loss) profit before taxation (725) (589) (45) - 18 2,698 Balance sheetsCurrent assets 4,720 1,866 3,852 2,440 1,342 10,606Total assets 4,720 1,866 3,852 2,440 1,342 10,606Current liabilities (1,671) (368) (132) - (1,176) (230)Non-current liabilities - (478) - - - - 3,049 1,020 3,720 2,440 166 10,376 Percentage share held by Group 49.90% 49.90% 50.00% 50.00% 50.00% 50.00%Group share of net external 1,521 509 1,860 1,220 83 5,188assets ii) INVESTMENT IN ASSOCIATES a) The movement in investment in associates was as follows: £000Balance 1 April 2005 1,284Share of profit, net of tax 393Balance 31 March 2006 1,677Share of loss, net of tax (455)Balance 31 March 2007 1,222 b) The Group's interest in its principal associate undertaking was as follows: % of equity held Other memberAqua Trust 50 Norwich Union Annuity Limited iii) The movement in other non-current investments, all of which have beenclassified as available for sale, was as follows: £000Unquoted investments:Cost 1 April 2005 188Additions 3,160Impairment (632)Net book value 31 March 2006 2,716Additions 1,248Disposals (38)Revaluation deficit (882)Fair value 31 March 2007 3,044 During the year, the Group added to its investment in Serrastone SA, a companybased in France, which is researching and developing a substitute for naturalstone for building purposes. 13 NON-CURRENT RECEIVABLES During the year, the Group acquired a loan which carries a coupon of LIBOR +2.5% and has a maximum term of 17 years. This receivable is shown in the BalanceSheet at amortised cost. 14 TRADING PROPERTIES As at 31 March 2007, two properties were held for resale and are shown at thelower of cost and net realisable value. At that date, trading properties werefair valued by the Directors at £10,300,000. 15 TRADE AND OTHER RECEIVABLES 2007 2006 £000 £000Trade receivables 12,175 9,166Amounts due under contracts for sale 51,275 54,635Other receivables 7,047 5,424Prepayments and accrued income 3,170 3,087 73,667 72,312 16 CURRENT INVESTMENTS 2007 2006 £000 £000Treasury stock 4 7 As at 31 March 2007, the nominal value of the Treasury stock was £4,000 (2006:£7,000). 17 TRADE AND OTHER PAYABLES 2007 2006 £000 £000Trade payables 6,751 8,802Other payables 7,535 3,503Accruals 18,774 23,854Interest rate swaps 4,406 12,945 37,466 49,104 18 BANK LOANS AND OTHER BORROWINGS 2007 2006 £000 £000Current liabilities:Bank loans (secured) - 4,432Other loans 3,000 - 3,000 4,432Non-current liabilities:Bank loans (secured) 329,054 238,8638% convertible unsecured loan stock - 2,89310% first mortgage debenture stock 2011 (secured) 4,870 4,870 333,924 246,626Total borrowings 336,924 251,058 The loans are secured by floating charges over assets owned by subsidiaryundertakings. The 8% convertible unsecured loan stock was convertible by 31 March 2007 but wasnot converted and was repaid post the Balance Sheet date. The 10% first mortgage debenture stock 2011 issued by Estates PropertyInvestment Company Limited is secured by fixed and floating charges over theassets of the subsidiary undertaking and has a redemption value of £4,617,000.The premium over par arising from fair valuing the debenture on acquisition isamortised over its remaining life. 19 OBLIGATIONS UNDER FINANCE LEASES Finance lease obligations in respect of rents payable on leasehold propertieswere as follows: 2007 2007 2007 2006 2006 2006 Minimum Interest Present value Minimum lease Interest Present lease of minimum payments value of payments lease payments minimum lease payments £000 £000 £000 £000 £000 £000Within one year 815 (809) 6 863 (855) 8Between one and five years 3,277 (3,245) 32 3,452 (3,410) 42Between five and 25 years 16,387 (16,002) 385 17,165 (16,772) 393After 25 years 43,628 (32,317) 11,311 48,188 (36,418) 11,770 64,107 (52,373) 11,734 69,668 (57,455) 12,213 20 FINANCIAL ASSETS AND LIABILITIES i) FINANCIAL ASSETS The currencies in which the Group's cash and cash equivalents were held were asfollows: 2007 2006 £000 £000Sterling 22,364 2,539Euros 13,439 5,119United States dollars 245 296 36,048 7,954 Details of other financial assets are shown in the table in note 20ii(e). ii) FINANCIAL LIABILITIES The Group's policy is to finance its activities with equity and long term debt,the proportions depending on the profile of the operational and financial risksto the business. The weighted average tenure of the Group's Sterling debt isfive years (2006: five years) and the weighted average cost of debt was 6.6%(2006: 6.6%). a) The maturity profile of the Group's debt was as follows: 2007 2007 2007 2006 2007 2006 Bank loans Other loans Total debts Total debts Undrawn Undrawn and overdrafts facilities facilities £000 £000 £000 £000 £000 £000Within one year - 3,000 3,000 4,432 - -Between one and two years - - - 2,893 - -Between two and five years 329,054 4,870 333,924 238,863 164,000 254,000After five years - - - 4,870 - - 329,054 7,870 336,924 251,058 164,000 254,000 b) After taking account of interest rate swap arrangements, the risk profile ofthe Group's borrowings was as follows: 2007 2007 2007 2006 2006 2006 Fixed Floating Total debt Fixed Floating Total debt £000 £000 £000 £000 £000 £000Sterling 164,877 172,047 336,924 164,770 81,856 246,626Euros - - - 4,432 - 4,432 164,877 172,047 336,924 169,202 81,856 251,058 c) The interest rate profile of the Group's fixed rate debt was as follows: 2007 2006Percent £000 £0004.0 - 5.0 - 4,4325.0 - 6.0 157,007 157,0077.0 - 8.0 3,000 2,8939.0 - 10.0 4,870 4,870 164,877 169,202 d) The weighted average rate and the weighted average period of the Group'sfixed rate debt were as follows: 2007 2006 2007 2006 % % years yearsSterling 5.6 5.5 6 7Euros - 4.7 - - Group 5.6 5.5 6 7 e) The fair value of the Group's financial assets and liabilities was asfollows: 2007 2007 2007 2006 2006 2006 Book value Fair value Fair value Book value Fair value Fair value adjustment adjustment £000 £000 £000 £000 £000 £000Other non-current investments 3,044 3,044 - 2,716 2,716 -Non-current receivables 45,349 45,349 - - - -Trade and other receivables 73,667 73,667 - 72,312 72,312 -Current investments 4 4 - 7 7 -Cash and cash equivalents 36,048 36,048 - 7,954 7,954 - 158,112 158,112 - 82,989 82,989 -Current liabilities: bank loans and other borrowings (3,000) (3,000) - (4,432) (4,432) -Trade and other payables (37,466) (37,466) - (49,104) (49,104) -Non-current liabilities: bank loans and other borrowings (333,924) (333,959) (35) (246,626) (246,878) (252)Obligations under finance leases (11,734) (11,734) - (12,213) (12,213) -Other payables (4,919) (4,919) - (4,670) (4,670) -Total net financial liabilities (232,931) (232,966) (35) (234,056) (234,308) (252)Fair value adjustment on a post-tax basis (25) (176) The fair values were calculated by JC Rathbone Associates Limited as at 31 March2007 and reflect the replacement values of the financial instruments used tomanage the Group's exposure as at that date. f) The maturity profile of the Group's share of floating rate debt held withinits joint ventures as at 31 March 2007 was as follows: 2007 2006 £000 £000Within one year 16,000 -Between two and five years - 51,479Over five years 76,366 - 92,366 51,479 21 FINANCIAL INSTRUMENTS The Group is subject to interest rate, liquidity, foreign currency and creditrisks. The Group does not speculate in treasury products but uses these only tolimit potential interest rate fluctuations. It usually borrows at floatingrates of interest and uses hedging instruments to achieve an interest rateprofile where the majority of borrowings are fixed or capped. As at 31 March2007, 54.8% (2006: 69.6%) of the Group's net debt was fixed or protected. i) EFFECTIVE CASHFLOW HEDGES The profile of the Group's interest swaps which were in existence as at 31 March2007 and for the purpose of these financial statements were classified aseffective cashflow hedges was as follows: 2007 2006 Amount Maturity date Swap rate Fair value Fair value Reflected adjustments adjustments in equity £000 % £000 £000 £000 10,000 20.07.09 5.45 62 (186) 248 20,000 20.01.11 5.79 (106) (845) 739 7,507 01.04.11 5.64 (4) (280) 276 18,000 20.01.14 5.33 159 (665) 824 11,500 20.07.14 5.34 80 (467) 547 20,000 20.07.14 5.36 121 (833) 954 20,000 20.07.14 5.45 8 (963) 971 10,000 20.01.15 5.28 93 (393) 486 20,000 20.01.15 5.29 177 (797) 974 20,000 20.01.15 5.61 (220) (1,248) 1,028 157,007 370 (6,677) 7,047 These swaps were valued as at 31 March 2007 by JC Rathbone Associates Limited. ii) INEFFECTIVE CASHFLOW HEDGES As at 31 March 2007, the Group has entered into the following forward startswaps which do not qualify as effective cashflow hedges for the purposes of IAS39. These were also valued by JC Rathbone Associates Limited. 2007 2006 Amount Start date Maturity date Swap rate Fair value Fair value Reflected in adjustments adjustments Income Statement £000 % £000 £000 £000 10,000 20.01.15 20.01.35 5.28 (841) (1,136) 295 20,000 20.01.15 20.01.35 5.29 (1,694) (2,284) 590 20,000 20.01.15 20.01.35 5.61 (2,241) (2,849) 608 50,000 (4,776) (6,269) 1,493 iii) JOINT VENTURE FINANCIAL INSTRUMENTS As at 31 March 2007, the following interest rate swaps shown at the full amount,were held within Quercus, a joint venture in which the Group has a 27.96%interest (2006: 28.31%). 2007 2006 Amount Maturity Swap rate Fair value Fair value Group share date adjustments adjustments reflected in equity £000 % £000 £000 £000 50,000 22.10.07 5.32 100 (432) 150 40,000 22.01.09 4.86 570 (50) 174 50,000 22.10.09 4.84 1,006 (43) 295 25,000 25.11.09 5.02 404 (173) 161 165,000 2,080 (698) 780 These swaps were valued at the year end by JC Rathbone Associates Limited andclassified as 100% effective cashflow hedges on similar grounds to those whichapplied to the Group's own cashflow hedges. iv) FINANCIAL RISK MANAGEMENT The Group's policy is to minimise refinancing risk. As at 31 March 2007, thematurity profile of Group debt showed an average maturity of five years (2006:five years). Efficient treasury management and strict credit control ensure thatfunds are available to meet the Group's financial commitments as these fall due. The Group's principal financial assets are cash and cash equivalents, trade andother receivables and investments. The Group's credit risk is primarilyattributable to its non-current receivables and its trade and other receivables.These amounts are disclosed net of provisions for doubtful debts and allowancesfor impairment are made where appropriate. The Group has no significantconcentration of credit risk with exposure spread over a number ofcounterparties and tenants. Creditworthiness evaluations are performed on all potential tenants looking toenter into lease or pre-lease agreements with the Group. In certain cases, theGroup will require collateral to support these lease obligations. This usuallytakes the form of a rent deposit, parent company guarantee or a bank guarantee. Where the Group places short term deposits, counterparties must have a shortterm credit rating of at least A1/P1. Transactions involving derivativefinancial instruments are with counterparties with whom the Group has a signedISDA agreement as well as having good investment grade credit ratings. Giventheir high credit ratings, the Board does not expect any counterparty to fail tomeet its obligations. On 31 December 2006, the Property Index-linked Total Return Swap entered into bythe Group in the comparative year expired. The credit risk on this instrumentwas limited as the counterparty was a bank with a credit rating assigned by aninternational credit rating agency. 22 RECONCILIATION OF MOVEMENTS IN EQUITY Share Share Revaluation Other Cashflow Translation Retained Own Equity capital premium reserve capital hedge reserve earnings shares share- account reserves reserve held holders' reserve funds £000 £000 £000 £000 £000 £000 £000 £000 £000Balance 32,298 46,575 180,102 113,222 (3,533) 127 198,401 (1,539) 565,6531 April 2005Recognised - - 68,860 - (1,275) 278 56,662 - 124,525 income and expense for the yearIssue of shares 31 690 - - - - (474) - 247 less costsPurchase of own (5) - - 5 - - (108) - (108) shares for cancellationPurchase of own - - - - - - - (1,955) (1,955) shares as treasury sharesCost relating to - - - - - - 1,180 - 1,180 share-based payment schemesShort leasehold - - (126) - - - 126 - - amortisationDividends paid - - - - - - (12,867) - (12,867)in yearBalance 32,324 47,265 248,836 113,227 (4,808) 405 242,920 (3,494) 676,675 31 March 2006Recognised - - 136,188 - 5,479 (319) 44,765 - 186,113 income and expense for the yearTransfer - - - (5,091) - - 5,091 - - between reservesIssue of shares 133 3,532 - - - - (2,545) - 1,120 less costsPurchase of - - - - - - - (6,060) (6,060) own shares as treasury sharesCost relating to - - - - - - 1,439 - 1,439 share-based payment schemesCost relating to - - - - - - 2,279 - 2,279 share-based bonus schemesShares awarded - - - - - - (210) 210 - to employees under bonus schemeShort leasehold - - (102) - - - 102 - - amortisationRealisation of - - (14,108) - - - 14,108 - - revaluation gains on saleTax on realised - - - - - - (1,724) - (1,724) gainsDividends paid - - - - - - (13,744) - (13,744) in yearBalance 32,457 50,797 370,814 108,136 671 86 292,481 (9,344) 846,098 31 March 2007 Part of the gain on the revaluation of investment and development properties isrecognised in the Income Statement and part directly through equity. 2007 2006 £000 £000Recognised in the Income Statement:Gains (deficits) on revaluation of investment properties in:Group 12,181 23,911Joint ventures 27,916 29,415Associates (650) 450Deficits on revaluation of investment properties (924) (1,777)Deficits on revaluation of development properties (182) (1,834)Reversal of deficits on revaluation of development properties 1,255 3,598Recognised directly in equity: Gains on revaluation of development properties 179,284 100,798 218,880 154,561 The movements in the Group's other capital reserves were as follows: Capital Convertible Merger Capital Total other redemption loan stock reserve reserve capital reserve reserve reserves £000 £000 £000 £000 £000Balance 1 April 2005 2,069 786 106,062 4,305 113,222Purchase of own shares for cancellation 5 - - - 5Balance 31 March 2006 2,074 786 106,062 4,305 113,227Transfer to retained earnings - (786) - (4,305) (5,091)Balance 31 March 2007 2,074 - 106,062 - 108,136 The charge against retained earnings in respect of the issue of shares lesscosts related to options exercised by staff in a subsidiary company. There wasno equivalent entry in the accounts of the Company. As at 31 March 2007, ESOP Trusts held 1,359,774 (2006: 659,596) shares in theCompany which had been purchased in the market at a cost of £7,714,000 (2006:£3,494,000). The purpose of the Trusts is to acquire and hold shares which willbe transferred to employees to meet future obligations under the Group employeeshare-based payment schemes as set out in note 23 and share-based bonusentitlements. As at 31 March 2007, these shares had a market value of£12,177,000 (2006: £4,485,000). The Quintain Group Employee Benefit Trust haswaived the right to receive dividends. As at 31 March 2007, the Company also held 267,640 (2006: nil) of its own shareswhich had been purchased in the market at a cost of £1,630,000 (2006: £nil). Asat that date, these shares had a market value of £2,397,000 (2006: £nil). CAPITAL REDEMPTION RESERVE The capital redemption reserve reflects the nominal value of shares purchasedand then cancelled by the Company. MERGER RESERVE The merger reserve has arisen following corporate acquisitions where the Group'sequity has formed all or part of the consideration and represents the premium onthe shares issued less costs. CASHFLOW HEDGE RESERVE The cashflow hedge reserve comprises the effective portion of the cumulative netchange in the cashflow hedging instruments. TRANSLATION RESERVE The translation reserve comprises all foreign exchange differences arising fromthe translation of the financial statements of the Group's foreign subsidiaries. 23 SHARE CAPITAL Number of Nominal shares value 000 £000Authorised as at 31 March 2006 and 2007: Ordinary shares of 25p each 200,000 50,000Allotted, called up and fully paid: In issue at 1 April 2005 129,191 32,298 Issue of shares under share-based payment schemes at between 155.3p and 271.0p 124 31 Purchase and cancellation of shares (20) (5)In issue at 31 March 2006 129,295 32,324Issue of shares under share-based payment schemes at between 25p and 556.3p 531 133In issue at 31 March 2007 129,826 32,457 As at 31 March 2007, share capital included 1,359,774 (2006: 659,596) sharesheld by ESOP Trusts. These shares had a nominal value of £339,944 (2006:£164,899). The Company also held 267,640 (2006: nil) of its own shares with anominal value of £66,910 (2006: £nil). As at 31 March 2007, the following commitments to issue shares to employeesunder various share-based payment schemes remained outstanding: Date of grant Number of shares Exercise price per Exercise period Exercise period share from to penceExecutive Directors' Performance Share Plan (LTIP)26.09.03 1,000,000 - 26.09.12 27.09.1212.07.05 375,000 - 12.07.14 13.07.14 1,375,0001996 Approved Executive Share Option Scheme (1996 Approved)22.02.99 6,040 151.5 22.02.02 21.02.0913.06.00 29,151 155.3 13.06.03 12.06.1004.09.01 1,504 199.5 04.09.04 03.09.1117.06.02 13,043 271.0 17.06.05 16.06.1213.06.03 63,540 287.0 13.06.06 12.06.1302.02.04 8,720 344.0 02.02.07 01.02.1413.09.04 88,305 460.0 13.09.07 12.09.1412.07.05 45,633 556.3 12.07.08 11.07.1509.01.06 9,450 634.8 09.01.09 08.01.1610.07.06 42,416 653.0 10.07.09 09.07.16 307,8021996 Executive Share Option (No.2) Scheme (1996 Unapproved)04.09.01 79,845 155.3 04.09.04 03.09.0804.09.01 223,058 199.5 04.09.04 03.09.0817.06.02 85,382 155.3 17.06.05 16.06.0917.06.02 892,741 271.0 17.06.05 16.06.0913.06.03 14,373 271.0 13.06.06 12.06.1013.06.03 399,066 287.0 13.06.06 12.06.10 1,694,4652004 Unapproved Share Plan (2004 Unapproved)13.06.03 12,290 25.0 13.06.06 12.06.1002.02.04 7,450 25.0 02.04.07 01.02.1402.02.04 10,551 25.0 02.04.08 01.02.1402.02.04 11,729 25.0 02.04.09 01.02.1413.09.04 161,721 25.0 13.09.07 12.09.1412.07.05 188,638 25.0 12.07.08 11.07.1509.01.06 1,566 25.0 09.01.09 09.01.1610.07.06 124,146 25.0 10.07.09 09.07.16 518,091Total 3,895,358 The movement in the year in the number and weighted average exercise price ofoutstanding options was as follows: 2007 2007 2006 2006 Number of shares Weighted average Number of shares Weighted average exercise price (pence) exercise price (pence)In issue as at 1 April 4,300,080 155.8 3,919,274 170.1Options granted 172,232 383.1 740,562 59.8Options exercised (531,031) (210.8) (124,604) (197.9)Options lapsed (45,923) (232.4) (235,152) (70.1)In issue as at 31 March 147.3 4,300,080 155.83,895,358 Options granted during the current and previous year have been valued using theBlack Scholes and binomial models on the basis of the following mainassumptions: Date of grant 12.07.05 09.01.06 10.07.06 LTIP 1996 2004 1996 2004 1996 2004 Approved Unapproved Approved Unapproved Approved UnapprovedNumber 375,000 55,310 299,236 9,450 1,566 42,416 129,816Exercise price (pence) - 556.3 25.0 634.8 25.0 653.0 25.0Term of option (years) 9 10 7 10 7 10 7Expected volatility (%) 23 23 23 21 21 22 22Expected annual 1.7 1.7 1.7 1.8 1.8 1.6 1.6 dividend yield (%)Risk free rate (%) 4.3 4.3 4.3 4.2 4.2 4.7 4.7Fair value (pence) 482.0 112.0 480.0 95.0 571.0 135.0 561.0 24 CAPITAL COMMITMENTS As at 31 March 2007, the Group had capital commitments of £15,669,000 (2006:£30,570,000) in relation to its own properties and £81,450,000 (2006:£7,786,000) in relation to its joint ventures. 25 OPERATING LEASE ARRANGEMENTS i) AS LESSEE Future minimum lease payments payable by the Group under non-cancellableoperating leases were as follows: 2007 2006 £000 £000Operating leases which expire: Between one and five years 22 545 After five years 7,144 7,791 7,166 8,336 ii) AS LESSOR Future minimum lease payments receivable by the Group under non-cancellableoperating leases were as follows: 2007 2006 £000 £000Operating leases which expire: Within one year 1,785 20,957 Between one and five years 14,199 50,197 After five years 128,577 119,164 144,561 190,318 In addition, the Group's share of minimum lease payments receivable undernon-cancellable operating leases contained within the Group's joint ventures was£377,222,000 (2006: £296,665,000). 26 RELATED PARTY DISCLOSURES During the year, the Group received the following fees in respect of servicesprovided to its joint ventures: 2007 2006 £000 £000Quercus Property Partnership 4,014 3,143BioRegional Quintain Limited 192 105iQ Property Partnership 177 -Quintessential Homes LLP 161 -Meridian Delta Limited 71 -Quart Property Partnership 25 42Quantum Property Partnership 10 - 4,650 3,290 The Group also received interest on loan notes amounting to £1,741,000 (2006:£1,041,000) from Meridian Delta Limited and £108,000 (2006: £22,000) fromBioRegional Quintain Limited, which are included in finance income. Amounts due from joint venture undertakings as at 31 March 2007 are shown innote 12i. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Quadrise