Final Results

RNS Number : 2298H

Quintain Estates & Development PLC

25 May 2011

Quintain Estates and Development PLC
("Quintain"/"Company"/"Group")

Results for the twelve months ended 31 March 2011

QUINTAIN DELIVERS STRONG PROGRESS AGAINST BUSINESS PLAN

Quintain Estates and Development PLC today announces its results for the twelve months ended

31 March 2011.

Key Points

·    Strong progress made against 2013 business plan with the completion of nine key operational milestones.

·    New milestones set for the next 12 months aimed at establishing Wembley City as a thriving retail and leisure destination, re-invigorating development at Greenwich Peninsula and growing the specialist fund management business further.

·    Maturities extended on £295m of existing debt and the disposal of £94.5m of assets, in order to move towards operating cash flow neutrality by the end of this financial year.

Results

·    Gearing at period end was 60%, in line with target set by the Board (March 2010: 46%), against covenants of 110%.

·    Gross profit of £26.2m (March 2010: £25.9m).

·    Adjusted profit before tax of £3.6m (March 2010: £2.6m).

·    Loss before tax of £48.1m (March 2010: £10.2m), reflecting valuation write-downs in the first half of the year.

·    EPRA adjusted diluted earnings per share 1.2p (March 2010: 0.1p).

·    Basic net asset value per share 116p (March 2010: 120p).

·    Adjusted diluted net asset value per share of 125p (March 2010: 133p).

Urban Regeneration

·    Good letting progress at 280,000 sq ft London Designer Outlet in Wembley.

·    361 room Hilton Hotel and 660 bed student accommodation building, both adjacent to Wembley Stadium, at advanced stage of construction. Hotel expected to open for the Olympic Games and the student accommodation for the 2012/13 academic year.

·    Resolution to grant planning consent received after year end for a further 1.7m sq ft of mixed-use development at Wembley City, including up to 1,300 homes and a new shopping street.

·    14 Pier Walk in Greenwich occupied by Transport for London was sold for £97.1m, 6% above March 2010 valuation.

·    New arrangements agreed with partner Lend Lease Europe to allow each company to develop two residential plots independently at Greenwich to accelerate delivery.

·    Quintain set to deliver two sites at Peninsula Quays comprising some 600 residential units.

·    Agreements finalised for location of the new cable car, which will connect the Peninsula to the Royal Victoria Docks and ExCeL. It is expected to be operational by summer 2012.

Fund Management

·    On target to achieve £2bn of assets under management by 2013, having grown funds under management this year by 26% to £1.27bn.

·    Investment in Albemarle Retail Properties LLP, a new fund, with an underlying portfolio of 105 secure high street retail units.

·    Strong occupancy rates achieved across student accommodation portfolio, with bookings for next academic already at 73%, compared to 66% in May 2010.

William Rucker, Chairman of Quintain, commented:

"At Quintain, we remain firmly focused on our ambition to strengthen further the Group's profitability and financial health. Our concentration on urban regeneration in London (where we have a total of 22m sq ft of consented development) and specialist fund management has created a strong platform for future value generation. Building on the measures taken last year and the actions we have planned, I am confident of further momentum in the months to come."

Adrian Wyatt, Quintain's Chief Executive, commented:

"In the last 12 months, we have stabilised the Company further creating a solid platform for future growth in value and revenues. Our urban regeneration programme is strategically placed to benefit from London's strength as a global financial centre and the benefits this brings to its wider economy. In particular, we expect this to lead to a sustained rise in residential values. Our specialist fund management business continues on its growth path, with £267m (26%) added to assets under management during the period.

"It is with confidence that I view the prospects for the business. As planned, we have grown our fund management business and we are now much closer to realising the value in our London development schemes. The delivery of strong and sustained returns for shareholders still remains our primary objective."

FINANCIAL HIGHLIGHTS

BALANCE SHEET	31 March 2011	31 March 2010	Change %

Basic net asset value per share (pence)	116	120	(3.3)

EPRA net asset value per share (pence)	125	133	(6.0)

Total return (%)	(3.3)	(0.8)

Gearing (%)	60	46

INCOME STATEMENT	31 March 2011	31 March 2010	Change %

Gross profit (£m)	26.2	25.9	1.2

Adjusted profit before tax (£m)*	3.6	2.6	38.5

Loss before tax (£m)	(48.1)	(10.2)

Earnings per share (pence)

Basic	(6.7)	(3.3)

Adjusted diluted (EPRA)	1.2	0.1

Interest cover (x)	1.9	2.8

* Adjusted for capital movements

Meeting and conference call
A meeting for analysts and institutional investors will take place today at 09.00 at Financial Dynamics, 26 Southampton Buildings, London WC2A 1PB. The meeting can also be accessed via a conference call dial in facility, using the following details:

Dial in number: + 44 (0) 20 3059 5845

Password: Quintain

In addition, an audio webcast will be made available on the Company's website, www.quintain.co.uk, following the meeting.

For further information, please contact:

Quintain Estates and Development PLC

Rebecca Worthington/Emma Villiers

Tel: +44 (0)20 7495 8968

Financial Dynamics

Stephanie Highett/Dido Laurimore/Laurence Jones

Tel: +44 (0)20 7831 3113

Chairman's Statement

Last year was a period of real progress. We achieved nine of the ten milestones set in June 2010. We also saw important management changes which position us to deliver further advances this year, despite on-going challenges in the financial markets.

The scale of the task ahead is illustrated by our share price that remains at a substantial discount to our net asset value per share. We know that we must continue to focus on delivering the current and future value of our key developments at Greenwich Peninsula and Wembley City and our ability to capture that value on behalf of shareholders.

A vital part of our plan for this coming financial year is, therefore, to restart our development programme at Greenwich Peninsula and to continue the build-out of the Western Core at Wembley City. In both cases, we intend to bring third party capital into these developments at a level that will restore confidence in our stated net asset value.

Property market conditions are slowly improving, driven by renewed investor interest in UK real estate, especially in the London markets. Property lenders, though, remain cautious, against the backdrop of an uncertain UK economy. Our occupiers face a number of challenges including nervous consumers, low growth prospects and the impact of the Government's Comprehensive Spending Review. These factors remain high on our watch-list.

As set out in today's announcement, we have made substantial progress, with more to come. This is a testament to the dedication of all at Quintain in steering the business through the financial crisis.

Our financial position remains steady, as a result of our drive to finance our activities in a sustainable way. Our financial base was strengthened by the rights issue in 2009, a reduction in our cost of debt and a lower cost base. Given the continued uncertainty as to the general availability of debt in the market, we remain vigilant in respect of our financing. We have agreed terms to extend the maturity of £295.0m (net) of existing debt and have put in place a number of actions, including the disposal of £94.5m of assets in the period under review, in order to move towards operating cash flow neutrality by the end of this financial year.

During the year, there were a number of changes to the Board of Directors. David Gavaghan joined the Board as an Executive Director and Head of Fund Management in May 2010. David's experience in property finance and specialist property sectors has already worked to our advantage as we seek to secure new income streams by growing our assets under management. We are advancing towards our target of £2bn assets under management by 2013, which is discussed in more detail in the Business Review.

Following David Pangbourne's retirement from the Board in summer 2010, Christopher Bell joined the Group in September as a non-Executive Director and Senior Independent Director. With Quintain's extensive retail and leisure interests, Christopher's considerable corporate experience and understanding of the retail and leisure sectors is already proving to be of great benefit.

In March 2011, Nick Shattock resigned from the Board as an Executive Director. On behalf of the Board, I would like to thank him for his contribution to the Company. As reported in the Chief Executive's Review, we introduced a new structure following Nick's departure to expedite the delivery of our development schemes and to enhance the achievement of the Company's wider aims.

When we reported a year ago, I said that I anticipated a year of real progress. I am pleased to say that much of what we planned has happened. The past few years have been tough and I would like to thank my colleagues, our shareholders, customers, partners and financiers for their on-going drive and support.

At Quintain, we remain firmly focused on our ambition to strengthen further the Group's profitability and financial health. Our concentration on urban regeneration in London (where we have a total of 22m sq ft of consented development) and specialist fund management has created a strong platform for future value generation. Building on the measures taken last year and the actions we have planned, I am confident of further momentum in the months to come.

William Rucker

Chairman

25 May 2011

Chief Executive's Review

In the last 12 months, we have stabilised the Company further, creating a solid platform for future growth in value and revenues. Our urban regeneration programme is strategically placed to benefit from London's strength as a global financial centre and the benefits this brings to its wider economy. In particular, we expect this to lead to a sustained rise in residential values. Our specialist fund management business continues on its growth path, with £267m (26%) added to assets under management during the period.

The near term future is one of significant potential. We look forward to the future with confidence, while recognising the many challenges that we face.

Results

As at 31 March 2011, net assets per share were 116p (2010: 120p). This decrease was driven by the impact of valuation write-downs in the first half of the year, partially mitigated by an increase in values in the second half. At Greenwich Peninsula and Wembley City valuations remained broadly stable.

The valuation write-downs contributed to a loss before tax of £48.1m (2010: £10.2m). Excluding capital movements, adjusted profit before tax for the year was £3.6m (2010: £2.6m).

Our business model

Our business model focuses on London-centric urban regeneration and specialist fund management. The business was reorganised during the year to create clearer mandates and fewer reporting lines. The regeneration programme is now under my direct control with Rebecca Worthington and Max James (see People section below) taking leading roles at Greenwich Peninsula and Wembley respectively.

This evolution of our operating model has resulted in Quintain consolidating its experts into specialist teams to support our activities better across the lifecycle of a property asset. Our expertise encompasses planning; construction; commercial and residential development; sales and letting; asset management; commercialisation and estates management. This expertise is available to both the London urban regeneration and the specialist fund management teams. We believe that this structure will efficiently expedite our objective of unlocking the value inherent in our schemes as well as growing sustainable income from our activities.

Business delivery

In 2010, we outlined a number of milestones and I am pleased to report that we achieved all but one of these. We believe that the new operational structure put in place at the end of the financial year will enable us to accelerate our plans further.

London urban regeneration and estates management

Milestone
Wembley
Start construction of the Hilton Hotel	√
Progress the student accommodation	√
Secure anchor tenants for the London Designer Outlet	√
Greenwich Peninsula
Conclude the sale of Pier Walk and recycle the capital	√
Start construction of the next building at Greenwich	x

Of the five milestones set for our London urban regeneration and estate management activities, four were completed. At Wembley, we are making good progress with construction of the Hilton Hotel and the student accommodation, both of which 'topped' out just after the financial year ended. We have let 30% of the London Designer Outlet by net internal area and have agreed heads of terms for a further 12% of floor space. At Greenwich Peninsula, we sold Pier Walk for £48.6m (our 50% share), representing a £2.6m profit on book value.

Fund management

Milestone
Invest the designated equity from the rights issue in income generating assets	√
Expand the number of income-generating beds in iQ by 20%	√
Introduce an equity partner to the Corsham Street student accommodation scheme	√
Create a new income-generating fund	√
Achieve a 25% increase in funds under management	√

All five of the milestones set for fund management were achieved this year. We now have £1.27bn of funds under management, which generated £5.5m of net fees this financial year. The highlights of this year's activity include the completion of our investment in Albemarle Retail Properties LLP in March 2011. This transaction provides us with a paid 10% coupon on our investment as well as a priority deferred rolled up 10% coupon and a profit share on disposal. In iQ, the 20% growth in bed numbers and the acquisition of Corsham Street underpin the future growth of the student accommodation business supported by high levels of occupancy and good rental growth.

People

The past few years have been challenging for the team at Quintain. In spite of difficult market conditions, limited resources and increasing workloads they have contributed fully to the achievement of this year's objectives. I would like to thank them for this.

The senior management team has recently been boosted by the appointment of Max James to work with Wembley City development teams and to secure third party investment for our urban regeneration activities. Max will be working with fund management to devise solutions for real estate lenders and borrowers to restructure and recapitalise property assets. This will provide Quintain with new sources of recurring income through the creation of funds and joint ventures.

Post year-end events - Wembley City

In May 2011, the Company secured a resolution to grant consent for a further 1.7m sq ft of mixed-use development at Wembley City. Our plans will create a stunning new surrounding for Brent Council's new Civic Centre and up to 1,300 homes centred on a one-acre public square as well as a new shopping street. This will be delivered in parallel with our existing development plans for 6.3m sq ft of mixed-use accommodation on land surrounding the National Stadium.

We have recently agreed outline terms and are in final negotiations for the forward sale of the land and funding for the development contract for the student accommodation. Separately, we have also agreed terms in respect of a 50/50 joint venture between Quintain and a third party investor to develop and operate the London Designer Outlet. If concluded, these transactions would be at a level consistent with current valuations.

Outlook

We remain on track to achieve our objective to increase the recurring income generated by the Group and have set further operational targets for the next twelve months. These are set out in the table below.

Milestone

Wembley City

· Release £100m of capital

· Finalise planning at the North West lands

· Fund and start building the London Designer Outlet

· Increase income and profit contribution

Greenwich Peninsula

· Accelerate residential development

· Secure inward investment

· Attract new office and retail occupiers

· Build Greenwich Peninsula's sense of place

Fund Management

· Grow funds under management to at least £1.5bn

· Support growth by securing £40-50m of third party investment

· Increase income and profit contribution

· Create a new fund and/or secure partners for the residential elements at Greenwich and Wembley

It is with confidence that I view the prospects for the business. As planned, we have grown our fund management business and we are now much closer to realising the value in our London development schemes. The delivery of strong and sustained returns for shareholders still remains our primary objective.

Adrian Wyatt

Chief Executive

Key performance indicators

Performance Indicator
Financial	Target
Total return¹	10% Real	(3.3)% one year
IPD Performance²	Top quartile	In the bottom quartile over one and five years
		31 March 2011	31 March 2010
Interest cover ³	Minimum 1.5x (covenant 1.25x)	1.9x	2.8x
Gearing⁴	Maximum 90% (covenant 110%)	60%	46%
Adjusted profit⁵		£3.6m	£2. 6m
Operating cash flow⁶	Cash flow positive	£(8.2)m	£(5.8)m

¹Total return is the movement in net asset value per share adjusted for the dividends paid in the year as a percentage of the opening net asset value per share.

²IPD performance is measured in comparison with the March Universe.

³Interest cover, per our banking covenants, is defined as operating profit before net finance expenses plus realised surpluses on disposals divided by net finance costs excluding mark to market adjustments.

⁴Gearing, per our banking covenants, is defined as the ratio of net borrowings of the Company and its wholly owned subsidiaries to equity shareholders' funds adjusted for deferred tax and mark to market movements.

⁵Profit before tax adjusted to exclude capital movements

⁶Operating cash flow is defined net cash flow from operating activities excluding movements in trading property assets, swap re-price payments, acquisition of caps and adding back distributions received from joint ventures.

Quintain has in place key performance indicators upon which it reports annually. These provide shareholders with metrics against which Quintain's performance can be compared to the wider market and key indicators as to the financial stability of the business. Market conditions and the composition of Quintain's portfolio, comprising development and secondary assets which tend to recover later in the cycle than prime investment assets, make it harder for Quintain to achieve its stated targets for total returns and IPD performance over the medium term. This will be an on-going challenge for the business with negative returns in 2009 and 2011 materially impacting on five year returns.

The financial stability of the business remains a prime focus. Interest cover of 1.9 times and gearing of 60% remains well within the targets set by the Board. Our focus for this financial year remains on building the Group's recurring income to move towards positive operating cash flow. The discrepancy this year between the movement in adjusted profits and operating cash flow arose because the prior year cash flow was supported by the timing of dividend receipts from Quercus.

Financial Review

The transformation of the business continued this year, but our financial results were impeded by valuation write-downs at Corsham Street and Emersons Green in the first half of the year, which were partially offset by a modest valuation increase in the second half. The efforts we made during the year to rebalance our activities and to improve profitability will take time to become apparent in our results but the months ahead should provide clear evidence of the progress we are making.

During the year, we invested £117.0m representing 64% of the proceeds of the 2009 rights issue in activities which will provide good returns to shareholders and, over time, a marked improvement in our income. We have made further progress to enhance our debt position, negotiating extensions to £295m of debt and reducing our average cost of debt to 4.5%, substantially reducing our cost of finance.

In support of this year's operational milestones, we have set two financial milestones. The first is to build recurring income and manage costs in order to move towards positive operating cash flow. The second is to extend the debt maturity profile of the Group.

Income Statement and earnings per share

The Group reported a loss before tax for the year of £48.1m (2010: £10.2m) which, as previously explained, is mainly attributable to revaluation movements. Excluding capital items profit for the year before tax was £3.6m (2010: £2.6m).

Summary income statement	31 March 2011				31 March 2010
	Urban Regen-eration £m	Fund Manage-ment £m	Other £m	Group £m	Urban Regen-eration £m	Fund Manage-ment £m	Other £m	Group £m
Gross profit	12.6	12.3	1.3	26.2	5.3	16.4	4.2	25.9
Administrative expenses	-	-	(20.6)	(20.6)	-	-	(21.1)	(21.1)
(Deficit) gain on revaluation	(13.4)	(37.9)	(2.7)	(54.0)	8.8	4.2	(5.5)	7.5
Profit (loss) on disposal	2.6	0.2	-	2.8	(2.7)	(6.6)	1.6	(7.7)
Impairment of non-current assets	-	-	-	-	(3.1)	-	(0.2)	(3.3)
Share of profit (loss) from joint ventures and associates	(5.2)	14.6	-	9.4	6.9	(6.8)	-	0.1
Operating profit	(3.4)	(10.8)	(22.0)	(36.2)	15.2	7.2	(21.0)	1.4
Net finance costs	-	-	(11.9)	(11.9)	-	-	(11.6)	(11.6)
Profit (loss) before tax	(3.4)	(10.8)	(33.9)	(48.1)	15.2	7.2	(32.6)	(10.2)
Tax credit	-	-	13.4	13.4	-	-	2.1	2.1
Profit (loss) for the financial year	(3.4)	(10.8)	(20.5)	(34.7)	15.2	7.2	(30.5)	(8.1)
Of which: Adjusted profits after tax	12.9	17.2	(26.7)	3.4	15.9	15.9	(29.5)	2.3
Capital (losses) / gains	(16.3)	(28.0)	6.2	(38.1)	(0.7)	(8.7)	(1.0)	(10.4)

EPRA earnings per share

The table below reconciles EPRA earnings per share to the reported IFRS fully diluted loss per share of 6.7p (2010:3.3p).

	31 March 2011 Pence	31 March 2010 Pence
IFRS fully diluted earnings per share	(6.7)	(3.3)
Revaluation movements
Group	10.4	(3.0)
Joint ventures	(1.7)	0.2
Loss on disposals	(0.5)	4.0
Impairment of goodwill	-	2.6
Deferred tax arising on revaluation movements, capital allowances and derivatives
Group	(2.0)	0.8
Joint ventures	0.6	(1.1)
Fair value adjustments on interest rate swaps
Group	0.9	(0.3)
Joint ventures	0.2	0.2
EPRA earnings per share fully diluted	1.2	0.1

Gross profit

	31 March 2011				31 March 2010
	Urban Regen- eration £m	Fund Manage-ment £m	Other £m	Group £m	Urban Regen- eration £m	Fund Manage-ment £m	Other £m	Group £m
Rental income	9.7	8.7	1.8	20.2	9.7	5.8	5.9	21.4
Property outgoings	(2.3)	(1.6)	(1.2)	(5.1)	(2.0)	(0.6)	(2.3)	(4.9)
Net rental income	7.4	7.1	0.6	15.1	7.7	5.2	3.6	16.5
Income from sale of trading properties	-	-	-	-	0.1	-	-	0.1
Income from hotel operations	3.9	-	-	3.9	4.2	-	-	4.2
Fees from fund management	0.3	5.2	-	5.5	0.8	11.1	-	11.9
Other income	1.4	-	0.7	2.1	0.6	0.1	0.6	1.3
Impairment in book value of trading properties	(0.4)	-	-	(0.4)	(8.1)	-	-	(8.1)
Gross profit	12.6	12.3	1.3	26.2	5.3	16.4	4.2	25.9

Before impairments gross profit was lower at £26.6m as compared to £34.0m in 2010. The main changes to gross profit were:

· lower rental income as a result of the full year effect of property sales in 2010 and 2011

· lower fee income from fund management, which has previously been boosted by performance fees.

The impairment charge of £0.4m related to a write-down in the carrying value of Timberlaine, being 404 acres of land in Redhill held as a trading asset. In the previous year the impairment of £8.1m related to City Park Gate, Birmingham.

No fees have yet been paid by Living PlanIT in relation to the framework agreement, since construction at PlanIT Valley has yet to commence, although, the land acquisition process is now underway. The masterplan has been accepted by the Municipality and formal planning permission progressed with the regional agency responsible for the environment.

Rental income

	31 March 2011				31 March 2010
	Urban Regen- eration £m	Fund Manage-ment £m	Other £m	Group £m	Urban Regen- eration £m	Fund Manage-ment £m	Other £m	Group £m
Gross rental income
Directly owned properties	9.7	8.7	1.8	20.2	9.7	5.8	5.9	21.4
Joint ventures properties	1.6	16.6	-	18.2	2.8	18.2	-	21.0
Gross contracted annualised rent
Directly owned properties	8.7	9.0	1.8	19.5	8.7	8.6	1.2	18.5
Joint venture properties	0.4	16.3	-	16.7	3.1	15.9	-	19.0
Gross ERV¹
Directly owned properties	11.3	9.6	3.7	24.6	11.6	9.7	3.2	24.5
Joint venture properties	2.3	16.7	-	19.0	4.7	16.9	-	21.6

¹Estimated Rental Value.

The main driver behind the fall in rental income was sales, with the sale of the Transport for London building at Greenwich Peninsula and Quercus units being the major factors within joint venture income. The shift in income between other and fund management arose because of the transfer of investment assets into the SeQuel fund during the prior year.

Sale of non-current assets

Sale of non-current assets in the period realised £94.5m (2010: £75.7m), giving rise to a profit of £2.8m (2010: loss £7.7m). Of the proceeds £48.6m was for our share of the sale of Pier Walk at Greenwich.

Net finance costs

	31 March 2011 £m	31 March 2010 £m
Interest payable	22.2	32.7
Interest capitalised	(11.9)	(15.6)
Interest receivable	(3.1)	(4.8)
Profit on termination of interest swaps	(0.1)	-
Change in fair value of financial instruments	(0.5)	(0.7)
Recycling of fair value adjustments on cash flow hedges	5.3	-
Total net finance expenses	11.9	11.6

Lower interest payable reflects both the lower average cost of debt and lower average borrowings this year. The capitalised interest of £11.9m relates wholly to Wembley. The recycling of fair value adjustments of £5.3m is predominately recycling of the hedge reserve on the £150m in swaps that were re-priced this year in line with the forecast transaction (being the interest expense).

Taxation

The Income Statement shows a tax credit for the year of £13.4m (2010: £2.1m). This mainly arose as a result of the valuation write-down.

Balance Sheet

As at 31 March 2011, the Group had directly held investment properties valued at £805.6m. The revaluation movement in the 12 months to 31 March 2011 gave rise to a deficit of £54.0m (2010: surplus £7.5m). In the first half of the year, valuations declined by £63.6m primarily caused by write-downs on our assets at Corsham Street and Emersons Green.

In the second half of the year, valuation increases of £9.6m, mainly attributable to Greenwich Peninsula, partially offset the first half losses. The £34.5m fall in the valuation of Corsham Street was driven by a lack of interest in large schemes in the course of construction at a time when the funding markets were particularly restricted. This was made even more extreme by the residual nature of the valuation. We expect this asset to perform well in iQ, where we capture half the valuation creation and have an overage. The fall in value at Emersons Green arose because the assumption on affordable housing has moved to 28% without grant finance.

Investment assets

At 31 March 2011	Urban Regeneration			Fund Management	Other	Total
£m	Wembley City	Greenwich Peninsula	Other
Properties at valuation	470.9	159.0	37.8	105.4	32.5	805.6
Investment in funds and joint ventures	3.5	83.7	0.9	128.9	-	217.0
Other non-current assets	-	-	3.6	12.2	-	15.8
Total	474.4	242.7	42.3	246.5	32.5	1,038.4

At 31 March 2010	Urban Regeneration			Fund Management	Other	Total
£m	Wembley City	Greenwich Peninsula	Other
Properties at valuation	458.0	155.7	48.7	123.0	27.5	812.9
Investment in funds and joint ventures	12.9	74.8	5.4	109.0	-	202.1
Other non-current assets	-	-	3.9	1.6	-	5.5
Total	470.9	230.5	58.0	233.6	27.5	1,020.5

The increase in the value of assets at Wembley reflects the on-going construction of the student accommodation and Hilton Hotel. Within Fund Management, partial disposals of our interests in Quercus and Corsham Street were offset by investments in other student accommodation and an £8.9m valuation surplus.

Investment in joint ventures

During the year, we sold a further 6.9m units in Quercus, at a 1.5% premium to net asset value, realising £10.0m. This has resulted in a further dilution of our holding to 11.22% from 14.94% and is in line with our ambition to recycle the capital in our business actively.

Net assets per share

	31 March 2011	31 March 2010
IFRS net assets	£598.3m	£622.1m
IFRS NAV per share	116p	120p
EPRA net assets	£648.9m	£691.5m
EPRA NAV per share¹	125p	133p

¹The EPRA NAV per share excludes the fair value adjustments for debt and related derivatives and deferred taxation on revaluations and is calculated on a fully-diluted basis.

The basic net asset value per share at 31 March 2011 was 116p down from 120p in 2010. This was mainly driven by negative valuation movements in the first half of the year.

Net assets per share

	31 March 2011 £m	31 March 2010 £m
IFRS net assets	598.3	622.1
EPRA Adjustments Dilutive effect of options	0.2	0.5
Deferred tax arising on revaluations movements, capital allowances and derivatives
Group	29.5	37.7
Joint ventures	(8.5)	(11.6)
Associates	0.5	0.5
Fair value adjustments on interest rate swaps
Group	22.2	29.1
Joint ventures	6.7	13.2
EPRA net assets	648.9	691.5
EPRA NAV per share	125p	133p

Movement in EPRA net assets

The principal determinants of the movement in EPRA net assets are detailed in the table below:

	£m
As at 31 March 2010	691.5
Property investment and revaluation (including disposals)	(45.9)
Underlying profit after taxation	3.4
Other movements	(0.1)
As at 31 March 2011	648.9

Capital commitments

The table below sets out capital commitments including our share of any commitments within joint ventures. Of these we have committed to invest £71.7m in the development of the Hilton Hotel and student accommodation at Wembley, where we are actively seeking third party investment, and £62.6m in iQ on student accommodation in the course of construction. The capital commitments will be financed within the Company's existing facilities (of which £191.0m are unused at 31 March 2011) and proceeds of forecast asset disposals.

	31 March 2011 £m
Group:
Middlehaven	6.4
Dashwood Studios	17.6
Wembley Hilton and student accommodation	71.7
Wembley others	10.0
Others	0.2
Joint ventures:
iQ - student accommodation in course of construction	62.6
SPark	3.8
Greenwich - MDL	1.4
	173.7

Financing strategy and capital structure

Our financing strategy in the medium term is to manage a level of debt that balances the risks to the business with the higher returns on equity that, over time, will accrue due to the lower cost of debt. Gearing levels, being the proportion of debt compared with equity, will vary depending on the profile of operational risks, the capital that is currently committed or expected to be committed in the future and the cyclical high or low of property valuations.Our financing structure needs to be flexible and cost effective. This has been achieved through securing funding at the corporate level, giving us the scope to fund efficiently all areas of the portfolio which otherwise would be more challenging, such as infrastructure works at Wembley and Greenwich. It also provides us with liquidity and operational flexibility.

We expect that debt markets will remain challenging for some time so we are pro-actively managing maturities. To date, we have extended either fully or through a series of options £295m of debt (net).

We have negotiated extension options for our £275m facility with Lloyds Banking Group. In January this year, we applied for the first extension to 1 April 2014 which was approved. The bank now has the right to request a facility reduction of £25m in June 2011. We have parallel options for the following two years which would result in the facilities maturing on 1 April 2016. A similar mechanism has been introduced into the HSBC £100m facility, with two amortisation options of £15m each to extend the facility to April 2016. In both cases the margin increased to 1.7%. After the year end, The Co-operative Bank has extended its maturity on the £25m facility to 2016 with an immediate increase in the margin to 2.00% from 1.45%. These facilities could be subject to amortisation on the exercise of elections to adjust for losses for interest cover purposes.

Discussions are taking place with other lenders with the target of extending maturities to 2016 on a minimum of £400m of facilities.

Debt summary

		Year end 31 March	Year end 31 March
	Covenant	2011	2010
Group:
Net debt		£420m	£356m
Weighted average debt maturity		2.8 yrs	3.7 yrs
Weighted average interest rate		4.5%	6.2%
% of debt at fixed/capped interest rates		100%	122%
Interest cover¹	1.25x	1.9x	2.8x
Gearing²	110%	60%	46%
Undrawn committed facilities		£191m	£263m

¹Interest cover, per our banking covenants, is defined as operating profit before net finance expenses plus realised surpluses on disposals divided by net finance costs excluding mark to market adjustments.

²Gearing, per our banking covenants, is defined as the ratio of net borrowings of the Company and its wholly owned subsidiaries to equity

		Year end 31 March 2011
	Quercus	iQ	SeQuel¹
Joint ventures:
Net debt	£26.0m	£64.3m	£34.0m
Weighted average debt maturity	2.5 yrs	1.3 yrs	3.3 yrs
Weighted average interest rate	4.8%	5.9%	5.0%
Surplus on fair value adjustments	£1.3m	£2.6m	-
% of debt at fixed/capped interest rates	88%	140%	72%
Interest cover	3.1x	1.58x	3.24x
Loan to value	41%	53%	56%
Undrawn committed facilities	£13.0m	£62.4m	-

Note: £m numbers are QED share

¹Included in the Group debt analysis

Hedging

At 31 March 2011, Quintain's interest rate was 100% hedged (31 March 2010: 122%). The fair value adjustment on these interest rate hedging instruments was a credit of £2.8m (31 March 2010: £0.4m). Of the movement during the period £0.5m was credited to the Income Statement, being the element relating to ineffective hedges and £2.3m credited to other comprehensive income.

During the year, we reset £150m of 5% 2013 swaps to the market price at the time of 1.7%. This followed consent from all the bilateral facilities that the £14.4m net present value of the transaction will be excluded from the interest charge in calculating the interest cover ratio. Since the year end, we have reset £150m of 5% 2014 swaps to the market price of 1.9% with the £12.4m net present value again being excluded from interest cover.

In order to protect the business from material increases in LIBOR and without fixing a rate that subsequently may be out of the money, we have bought £100m of forward caps at a strike rate of 3.4%. They apply from 2013 to 2016.

Cash flow

Net cash flow from operating activities was an outflow of £28.2m (31 March 2010: £30.6m). This includes a £14.4m payment in relation to re-pricing £150m of 2013 swaps. This was excluded from interest cover for the purpose of banking calculations and has re-positioned our debt costs at a lower level over the next three years, representing an annual saving of £4.8m.

In delivering the business plan of achieving critical mass at Wembley and doubling funds under management, there was a net cash outflow from investing activity of £34.5m. This included the purchase and development of property assets of £63.2m (primarily relating to the construction of the Hilton Hotel and student accommodation at Wembley and acquisition of land for student accommodation at Corsham Street and Dashwood Studios), £10.7m of non-current receivables for the Albemarle Retail Properties LLP loan note and loans to joint ventures of £19.1m. This was partly offset by proceeds of £50.1m from the sales of non-current assets, in particular the sale of land to Brent Council to enable it to build its Civic Centre in the heart of our Wembley City development and the sale of Corsham Street into iQ, taking a capital commitment off balance sheet and helping future cash flow.

Business Review

London Urban Regeneration

Of the Group's property assets, £778.0m (67.3%) are within the London urban regeneration. The segmental profit for the year, before the results of asset sales and revaluations, was £12.9m.

Our two major London development schemes provide the Company with significant opportunities to generate income and capital growth over the long-term. At the same time, by retaining long-term interests through the retention of the freeholds of the properties we develop, Quintain creates the opportunity to build additional income streams through commercial activities and estates management, such as media sales, sponsorship, events, markets and car parking.

As a result of several decades of positive economic and demographic growth, London's West End and City property markets are increasingly unable to meet demands for modern commercial and residential property at an affordable price. It is this trend which has supported the underlying values of property in these markets and also been responsible for the emergence of 'nodal' London, as typified by Canary Wharf, Paddington Basin and King's Cross.

These districts play an increasingly important part in this global City's success. All have similar characteristics. They tend to be master-planned on a major scale, providing the opportunity to create thriving, modern communities. They offer good transport links across the Capital as well as to airports and motorways. Often they are concentrated close to business, leisure or cultural facilities. They apply modern city planning to the development, blending commercial, residential and amenity accommodation around open urban space. Many took a decade or more to reach critical mass and become the successes they are today. These districts have withstood the ups and downs of the economic cycle.

To encompass the continued growth forecast for London there are a number of boroughs where areas have been earmarked for the next phase of nodal development. Many of these are still at the early phases of development; either being planned or at the early phase of planning applications, such as Earl's Court and Elephant & Castle.

In 1997, we acquired our first site on Greenwich Peninsula. Since then using our foresight and vision we have assembled two of London's most exciting development opportunities, Wembley City and Greenwich Peninsula. Both these sites possess the key aspects which have made other nodal developments so successful.

Across these schemes we have achieved 22m sq ft of development consents, which is equivalent to rebuilding three of the historic "Great Estates" of central London and the potential to provide the local areas of Wembley and Greenwich with vibrant new centres for living, for working and for leisure.

Wembley City

Encircling the home of British football, Wembley Stadium, our holdings at Wembley City encompass 84 acres of land, over which we now have 8.0m sq ft of planning consents. Across the scheme we are at various stages of the development cycle, the extent of which demonstrates the range of skills that we have brought together in our business. We have a number of income producing assets on the site and generate income from the four million annual visitors to events at the Stadium and Arena. In total we receive some £29.4m of gross income per annum from Wembley City which is analysed in the table below.

Wembley City Valuation	£m	Wembley City Income analysis	31 March 2011 £m	31 March 2010 £m
As at 1 April 2010	488.9	Rental income²	8.8	9.0
Capital expenditure on investment assets	32.0	Income from trading property sales²	9.1	14.2
Capitalised interest	11.9	Hotel income	7.6	7.7
Disposals	(21.0)	Fees from joint ventures	0.1	-
Valuation deficit	(8.5)	Other income¹	3.8	3.2
As at 31 March 2011	503.3		29.4	34.1
		¹Surrender premiums, car parking, management fees,
		commissions and sundry items.
		²Includes share of joint venture revenue

In terms of the movements in value, capital expenditure in the year mainly related to construction costs on the build out of the Hilton Hotel and student accommodation. Disposals included a land sale to Brent Council for their Civic Centre and selling our interest in the Summit joint venture. During the year Wembley Stadium Retail Park was sold to SeQuel.

The valuation was fairly stable in the year with current market sentiment remaining subdued towards large scale regeneration projects. In particular the key issues are funding and delivery.

Planning

The first phase of our development at Wembley is the Western Core, which is part of the Stage 1 lands consent. It encompasses some 1.7m sq ft of accommodation and includes residential, leisure and commercial development, all of which are now coming to fruition.

In May 2011, we were very pleased to achieve a resolution to grant outline planning consent for the second phase of development, on 14-acres of land to the north west of the Western Core. Our plans incorporate proposals for up to 1.7m sq ft of mixed use accommodation including some 1,300 homes, a new retail street, hotels, student accommodation as well as a one-acre London square. The scheme will incorporate a site wide energy centre, and deliver Code for Sustainable Homes Level 4 and BREEAM Excellent standards.

It is likely that construction of the first residential building on the north-west lands will commence following the Olympic Games. The Section 106 agreement includes up to 15% affordable housing provision which incorporates a mechanism to adjust delivery based on the availability of grant funding and type of affordable housing to be delivered. The proposal will now be referred to the Mayor of London for final review.

We also received consent for 15 homes on a peripheral site which, in an asset swap agreement transferred to Family Mosaic for an incremental increase in our share of the Quintessential joint venture. These will be developed as 15 affordable dwellings, offsetting our off-site affordable home obligation, attached to the Stage 1 lands permission.

Construction

We are currently advancing well with the construction of the 361 room Hilton Hotel and the 660 bed student accommodation building, both of which are located immediately adjacent to Wembley Stadium and the Western Core planned London Designer Outlet. Construction of both buildings is on time and on budget, with topping out in May and April 2011 respectively. We expect the Hotel to open in time for the Olympic Games and the student accommodation for the 2012/13 academic year.

Construction of Brent Council's new Civic Centre is on-going. This comprises a 300,000 sq ft town hall, offices and library and will anchor the southern element of our north-west lands development. This important building demonstrates the Council's commitment to Wembley City and its belief in the future of the area.

Commercial

We launched the marketing of the London Designer Outlet last autumn. This 280,000 sq ft centre is anchored by a 1,800 seat cinema complex let to Cineworld Group plc. To date the marketing is focused on securing anchor retailers for the scheme as well as on the food and beverage offer. We have secured GAP for an 8,100 sq ft unit and are in advanced discussions with Marks and Spencer and another multiple retailer for two major stores. We have also completed some 19,000 sq ft of lettings to Frankie and Benny's, handmade burger Co, TGI Friday's and Jimmy Spice's and are in advanced negotiations with a further four food and beverage retailers. To date £1.1m of rental income is secured, some 16% of the total, with a further 5% in solicitors' hands. It is our intention to start construction on this scheme in autumn of this year.

Residential

We have now introduced a strong residential presence to Wembley City. With its excellent transport links and modern design, Wembley City is attracting new people to the area who recognise its growth potential. Convenience retail, such as Tesco Express, is located on the lower floors of the scheme.

The two completed apartment buildings, Forum House and Quadrant Court, comprise 235 private homes of which all but four are sold or let. In the past 12 months, 58 sales were completed at an average price per square foot of £407 for Forum House and £481 for Quadrant Court. These sales realised £7.7m.

Private landlords can also benefit from our residential rental business, where the on-site lettings team are achieving rental returns which are, on average, 20% above the local Wembley market residential rents. We developed this concept to provide private investors with access to pre-let residential stock as well as to address the current issues of affordability faced by first time buyers, many of whom are unable to meet lenders requirements for equity. We now manage 150 apartments across the two buildings generating £2.0m of rental income, and contributing £0.5m to the Group's profit.

Asset management

At Wembley City, we have over 415,000 sq ft of commercial space, including two retail parks, Palace of Industry, York House and as well as the 306 bed Plaza Hotel. These are mainly let on a mix of long and short-term leases to a variety of tenants generating £16.1m income from these assets, several of which are earmarked for redevelopment.

We are also the landlord of the Wembley Arena which receives 800,000 visitors a year. It is under management by Live Nation and generates £1.8m of income for Quintain annually.

Power League recently opened a five-a-side football venue on a ten year lease bringing in rental income and animating the site. There are break-clauses in the agreement to allow for redevelopment of the land.

Commercialisation and Estate management

Our commercialisation and estate management activities generated £3.8m (2010: £3.2m) of income for the Group. This is produced in a number of ways including car parking and event day catering; the provision of services to Wembley City tenants and residents, a Sunday Market and media and sponsorship. In 2010, we secured Barclaycard as a new five-year sponsor of the Arena and created an event media joint venture with Mediaco Outdoor Ltd to develop the media across the estate.

Greenwich Peninsula

With progress slower at Greenwich Peninsula than we had planned, we are nonetheless pleased to see a new vibrancy and life coming to the space around the O2 arena. This follows on from the opening of the retail units around Peninsula Square and the arrival of the office workers and students at Ravensbourne College. This demonstrates to us the real potential that this scheme has to offer and we are pushing hard to resolve a number of outstanding issues so that we can press swiftly ahead with our plans for this scheme.

Our focus is on residential development and we recently agreed new arrangements with our partner Lend Lease Europe to allow each company to develop residential plots independently. This will create better opportunities for successful development through a more direct management approach. As a result of this, we will build the first two plots on Peninsula Quays while Lend Lease Europe will be building out two blocks on the eastern side of the Peninsula.

Valuation

The valuation below relates to Quintain's interests at Greenwich Peninsula as developer and landowner.

	£m
As at 1 April 2010	277.1
Capital expenditure	9.0
Disposals	(47.1)
Valuation surplus	2.5
As at 31 March 2011	241.5

The major transaction in the year was the sale of Pier Walk. Capital expenditure related to infrastructure and the purchase of retail units.

The valuation rose marginally in the year, with the positive impact of small riverside land parcels not being reflected in larger regeneration projects. As with Wembley critical factors affecting valuation are funding and delivery.

Planning

The existing planning consent at Greenwich Peninsula allows for the creation of more than 10,000 homes, a 3.5m sq ft office district and 350,000 sq ft of retail space. On the two sites at Peninsula Quays, over which we now have full control, we will now progress with a reserved matters planning application to enable us to start construction.

Construction

Investment of £7.6m was made in infrastructure and public realm for the first residential phase, Peninsula Riverside 1, opening up nine plots (circa 1,400 units) in the south-eastern corner of the Peninsula. In addition the final elements of infrastructure within Peninsula Central have been completed serving a further three plots.

In April, Transport for London finalised the agreements for the new cable car to span the Thames, joining the Peninsula with the Royal Victoria Docks and ExCeL. The cable car will provide a unique, quick, direct and fully accessible link to Greenwich Peninsula and it is expected to be operational by the summer of 2012. We recently agreed the construction licences with Transport for London/HCA and construction has now commenced. As part of this exercise, a new "mini" masterplan consent has been granted to accommodate the cable car changes.

Residential

The key stakeholders involved at Greenwich Peninsula have all recognised that a solution to re-energise residential delivery has to be found. In addition, the Government's changes to the grant regime and the introduction of "near market rent" also need to be absorbed into any solution. To this end a series of workshops (using Jones Lang LaSalle as mediators) has taken place involving Quintain, Lend Lease Europe, London Borough of Greenwich, Homes and Communities' Agency, Greater London Assembly and the Department for Communities and Local Government.

As a result of this, we are pleased to report that a draft solution has been suggested that will enable the delivery of circa 1,000 new residential dwellings at Greenwich. The new approach will still require Committee approval from the London Borough of Greenwich, to which end the Homes and Communities' Agency is now working closely with them to communicate the principles of the draft solution.

We have been greatly encouraged by the cooperation of all parties in this matter and look forward to an entering into a new phase of the regeneration of Greenwich Peninsula.

Following conclusion of this agreement, we will be well placed to press forward with the development of Quintain's two sites at Peninsula Quays and to conclude our negotiations in respect of the sale of a further plot of land on the southern end of the Peninsula.

On Peninsula Quays, we will be delivering a range of apartments and houses, most with spectacular views to Canary Wharf. We expect that this development will attract overseas and UK investors as well as young professionals and families who want to make Peninsula Quays their home. Planning applications are being prepared and we expect to be on site in the first half of 2012, with first occupations in 2013. Peninsula Quays has consent for around 3,000 new homes and we will be bringing forward around 600 in the first phase. The scheme will be delivered with high quality public realm, including the new riverside walk and retail development. Marketing should start toward the end of 2011 with a unique marketing suite to be constructed on the river's edge.

Bellway's first scheme of 229 units, which lies on the southern end of the Peninsula, is now virtually complete and it is expected that the first residents will be moving in this summer. We continue our negotiations with Bellway on the sale of a further 0.73 acre plot of land, but the negotiations have been protracted as a result of discussions over the social housing provision.

Commercial

Now fully occupied by Transport for London, 14 Pier Walk was sold in August 2010 for £97.1m, achieving a sales price 6% above the latest valuation. The proceeds were used to repay bank debt secured against the building. At Mitre Passage two floors are now let and we continue our discussion in respect to the remaining eight floors.

The majority of retail units are now open at Peninsula Square with Chiquitos; Wagamama; Costa Coffee and Tesco Metro trading well. They will shortly be joined by Cafe Rouge and Subway, with discussions progressing on the final four units.

Commercialisation and Estate management

The estate is managed in conjunction with Lend Lease and AEG. Our activities are less developed here than at Wembley, but will offer significant long-term opportunities given the O2 footfall and 2012 Olympic venue status.

Silvertown, London

This is a 12.6 acre site facing Greenwich Peninsula, which we own (66.6%) in partnership with the London Development Agency. Albeit on a smaller scale to the contribution we made on the Peninsula side of the river, this site has also helped to enable the cable car, providing land for one of the pylons.

Regional Activities

In Urban Regeneration, we have a legacy of regional activities, which we are planning to exit as and when it makes business and financial sense to do so. These currently represent £51.3m (4.4%) of our assets and includes Silvertown, London.

These schemes comprise:

OneBrighton, Brighton: a 172 apartment block, developed using the latest techniques in sustainable development, has now been fully sold with the exception of one commercial unit. This realised profits for the Group of £1.5m in the current year.

Riverside One, Middlesborough:following on from the success of our scheme at OneBrighton, Riverside One is now under construction. It is being actively marketed and to date we have secured nine offers for units, in advance of the show home opening and full sales launch in September. The HCA has underwritten the purchase of up to 40 units if they have not been purchased on the open market by certain dates.

Emersons Green, Bristol: we have achieved, together with Heron & Gallagher, a resolution to grant planning consent for up to 2,500 homes together with 1m sq ft of commercial accommodation. We are currently agreeing Section 106 documentation.

City Park Gate, Birmingham: it was announced last year that the station for the High Speed Rail Link 2 would be located on this site. Our development plans are on hold until we have a full understanding of the prospects this presents for future development opportunities.

Beverley, Yorkshire: the residential land in this mixed use scheme has been sold and we are making good progress in our efforts to secure occupiers for the retail properties.

Fund Management

Of the Group's property assets, 30% are included within our specialist fund management activities. The segmental profit for the year, before the results of asset sales and revaluations, was £17.2m.

We are on target to achieve £2bn of assets under management by 2013, having grown funds under management this year by 26% to £1.27bn. Of the rights issue proceeds we invested or committed to invest some £124.3m, part of which was offset by disposals and repayments, on fund management activities. During the year we invested in the Albemarle Retail Properties LLP, the Bristol and Bath Science Park and acquired assets for the iQ student accommodation fund. We have been appointed to asset manage a portfolio on behalf of a bank for which we receive asset management and performance fees.

Funds under management and Quintain equity investment by sector

	Assets under management	Assets under management	QED equity invested	QED equity invested
Sector	31 March 2011 £m	31 March 2010 £m	31 March 2011 £m	31 March 2010 £m
Healthcare	744	680	46.2	55.1
Higher Education	324	243	94.0	68.0
Science Parks	22	7	10.5	6.9
Secondary Property	185	78	42.6	24.5
Total	1,275	1,008	193.3	154.5

Our primary focus is on specialist segments of the property markets where, through the application of our skills, we can deliver strong fund performance as well as achieving resilient recurring income to support the Group throughout the economic cycle. Fund management also provides the options for refinancing individual assets or groups of assets from elsewhere within the business, while maintaining an interest in any upside.

The specialist asset classes that we invest in benefit from three shared characteristics, which are:

· compelling social, economic and environmental trends

· high barriers to entry

· the need for specialist knowledge and skills.

These factors guide our investment criteria and have led to the development of our activities within the healthcare, higher education, science and technology as well as secondary property market segments.

Healthcare

There are a number of factors which support our longer term view of the healthcare sector.

The UK market has positive demographic trends. With the elderly population (over 85s) set to grow by 1.5% and the number of elderly people requiring support forecast to rise from 322,000 in 2010 to nearly 400,000 in 2015, there will be a corresponding rise in demand for healthcare places.

We are beginning to see a number of good buying opportunities; with little competition in the market we believe this should result in attractive initial yields. We anticipate that later in the financial year there will be opportunity for us to align ourselves with investors who also see long-term opportunity in this sector to invest in operators with a proven track record.

Currently, some healthcare operators face a number of issues, as evidenced by the on-going problems at Southern Cross Healthcare. These include Government policy and spending plans, a tighter regulatory environment and rising costs. Those operators with a high level of exposure to Local Authority funded residents face additional pressure with lower levels of demand and static or reduced fees. Local Authorities are also seeking to reduce their social care expenditure by transferring their responsibilities to other government bodies and outsourcing current residential, nursing and domiciliary care services.

In spite of the above, it is our experience that operators with a strong focus on the private pay sector remain in good shape with robust demand and, despite the effects of the recession, considerably less pressure on fees.

For Quercus the risks presented by these issues can be mitigated by maintaining our low levels of exposure to any one operator and by actively working with operators who are facing difficulties.

Quercus

	31 March 2011	31 March 2010
Quintain's holding	11.22%	14.94%
Assets under management	£744m	£680m
Capital invested	£51.8m	£57.2m
Income generated ¹	£10.9m	£21.3m
Contribution to profits	£9.8m	£(3.7)m
Average remaining lease	28yrs	29yrs

¹Fee income plus share of joint venture revenue

Quercus is a healthcare fund which we manage in partnership with Aviva Investors and it is now one of the three largest healthcare landlords. During the reporting period, assets under management grew to £717.7m (£744.0m including cash held for investment) driven by the addition of 14 new properties to the portfolio. Valuations for the year remained broadly static on a like for like basis.

The fund now has 238 homes in its portfolio. Its tenant base is diverse with 34 tenants and an average unexpired lease term of 28 years.

Quintain earns fees from its asset management activities as well as dividends from its investment in the fund. During the year this generated £10.9m of income (2010: £21.3m), resulting in a profit of £9.8m (2010: loss of £3.7m). The lower income this year reflected a lower equity interest following the sale of units and a performance fee recognised in the previous year. The loss last year arose as a result of sales of poorly performing assets below valuation.

Through Lloyds Banking Group, Quercus has a term loan facility of £316.4m, of which £49.0m is undrawn. At the end of March 2011, the loan to value was 41% as compared to a covenant of 60%, with interest cover at 3.1 times as compared to a covenant of 1.5 times. Quercus also has an undrawn facility with Santander of £65m.

Investment activity

During the period under review our activities were focused on investing the proceeds of the £82.7m raised by the fund in February 2010, as a result of which 14 new homes were purchased for a total consideration of £71.8m. Quercus also disposed of eight homes which no longer fulfilled the fund's investment criteria. Agreements to purchase a further 17 homes have been made, which we expect to complete in the near future.

Asset management

The major extension and refurbishment project continued at The Old Vicarage Care Home, near Warrington. The property has been extended and reconfigured into a 58 single bed care home. Practical completion was achieved after the year end and the operator is now awaiting registration. During the year, smaller refurbishment projects were also carried out across 20 homes, contributing to a total cost of capital projects of £2.0m. These upgrades and improvements to our stock are only carried out where they result in improved rental income and rent covers.

Every year we expect some level of administrations in the Quercus portfolio. This year, however, increased pressures on operators mean that 13 care homes are in administration, representing 4% of the fund value. Care homes in administration do not incur any cost to the fund in terms of business rates or service charges and tend only to remain in administration for approximately six to nine months, continuing to operate throughout the administration period. We use our close industry relationships to seek to re-register the homes with a new operator as required by the regulators and, once this has been achieved, the leases are re-assigned.

Southern Cross Healthcare lease eight homes in our portfolio. We are currently playing an active role in the group of landlords who are working to help them resolve their current financial difficulties.

Student accommodation

The student accommodation market continues to demonstrate strong fundamentals, with increasing investor demand and, for the iQ portfolio, strong forward occupancy rates.

There are a number of new entrants into the market seeking to build portfolios in this sector. However it has become apparent that these investors have had difficulties sourcing quality stock and it will take them some time to build up their presence. Having entered this market some years ago, we have assembled a portfolio of scale and a sound operating model, which we believe provides us with a competitive advantage.

As a result of this continuing interest in the sector, the student accommodation market saw a small yield contraction during the year which reflects the strong competition for new stock. For iQ this shift was clearly beneficial for our existing properties.

Radical changes have been proposed to the funding of the UK Higher Education Sector by the recently published Browne Report. The Report highlighted a number of factors which support our positive view of the student accommodation sector. In particular Lord Browne recognises the impact of upfront fees on students and has sought to ameliorate them. Growth in higher education numbers is still planned and we believe that our customer base will become increasingly more sophisticated in terms of their accommodation needs.

This academic year may be exceptionally strong, since we anticipate that the spike in applications will translate into occupancy as students elect to postpone their gap year in order to avoid the introduction of higher fees. We expect applications the year after to be lower, reflecting the "brought forward" students but it is important to recognise that applications still far exceed places available and there is still a dramatic shortage of good quality purpose-built accommodation. We would expect a more stable picture to emerge as students better understand the new regime.

We believe that further opportunities will arise in the long-term as universities begin to outsource their accommodation in order to focus on their core educational mission and improve their "offer" as they compete for increasingly discerning students (and their parents). A key part of the university offering focuses on the general built environment including accommodation. We believe that the relatively limited availability of professionally managed, quality accommodation will provide iQ with future opportunities to grow its market share and become a core supplier of accommodation to universities in its key markets.

	31 March 2011	31 March 2010
Quintain's holding	49.98%	49.98%
Assets under management	£309m	£209m
Capital invested	£67.7m	£46.0m
Income generated ¹	£11.3m	£8.5m
Contribution to profits	£9.9m	£(1.0)m

¹Fee income plus joint venture revenue

iQ is a 50/50 joint venture with The Wellcome Trust and has grown to be one of the top ten providers of student accommodation in under four years. During the year, assets under management grew to £309m, driven by the completion of two new properties in the portfolio, the acquisition of a further site under construction for delivery in autumn 2012 and a valuation uplift of 7.9%.

The portfolio now comprises 13 properties, incorporating 4,253 operational beds plus two sites under construction which will increase this number to 5,183 beds by the 2012/2013 academic year. Six of the iQ properties incorporate retail, usually at the ground floor. This is all fully let or under offer.

Occupancy

We started the 2010 academic year with an average occupancy rate of 97%, which was ahead of the prior year. While many students have yet to secure their places, forward bookings for the next academic year are already higher than for the same period in 2010 at more than 75% (2010: 68%) despite a proposed 4.3% like-for-like increase in rents for 2011/12. We expect a further surge of bookings once the A level results are published and the university clearing process has been completed.

Development

We are currently developing two schemes for iQ, which are on schedule for delivery in 2011 and 2012.

iQ Hoxton

iQ City N1

iQ Hoxton will open in September 2011. The building will introduce a smart collection of 257 studios and en-suite bedrooms close to the City of London. The scheme incorporates modern, student-focused design, multiple communal living spaces and a rooftop terrace.

iQ City N1 will open its show flat in November 2011 with the students set to move in in September 2012. The 16-storey building will include 673 studio rooms in a variety of sizes. The building will incorporate a sky gym and fitness studio, VIP club lounges and work/play spaces as well as the normal common rooms. The scheme incorporates green wall and roof technology, grey water recycling and on-site combined heat and power.

We are also in the process of tendering for a refurbishment of iQ Nottingham, which we aim to have complete for the start of the 2011 term.

Management

The Fund now has a team of 63 people who are responsible for delivering all aspects of fund and property management. This incorporates marketing, property management and development management both on and off site. Over the past 12 months we have in-sourced the core management function to gain further tax efficiency and invested heavily in IT and accountancy platforms to provide for significant future growth.

Student Accommodation - future potential

By applying Quintain's expertise to the student accommodation sector, we can secure further opportunities to create income and / or long-term capital growth. We have two additional assets under development at Dashwood Studios, Elephant & Castle and Wembley City, and are actively seeking third party investment for these assets.

Dashwood Studios

Wembley City

Dashwood Studios will open in September 2011 providing 232 well specified studio rooms close to the landmark Strata Tower in the major regeneration area around Elephant & Castle. The scheme also offers multiple communal living spaces and ground floor retail facilities which are already under offer.

The student accommodation comprises 660 rooms around a central courtyard in the heart of Quintain's major urban regeneration scheme. As well as excellent living accommodation, students will benefit from the close proximity of entertainment and retail facilities, both existing and being built by Quintain.

Science Parks

The UK Science Park Association ('UKSPA') defines a science park as "essentially a cluster of knowledge-based businesses, where support and advice are supplied to assist in the growth of the companies. In most instances, Science Parks are associated with a centre of technology such as a university or research institute".

From an investment perspective the asset class can best be defined by the 78 parks registered by UKSPA representing almost two million sq ft of real estate across the UK providing employment for in excess of 70,000 people.

Commercially the sector benefits from two core drivers. First is the UK Government's commitment to the continued development of the UK's knowledge economy, which is seen as one of the major pillars for future economic growth. The sector enjoys continued financial support from the Government, with the 2010 Comprehensive Spending Review maintaining the science budget in cash terms over the Spending Review period with resource spending of £4.6bn and £1.9bn of capital over the four years to 2014/15. Overall government investment in R&D, incorporating the science budget, higher education, funding councils and direct government expenditure was valued at over £9.4bn in 2008/09. In 2010 the Government announced a £200m programme to develop UK Technology Innovation Centres: a network of six to eight centres focusing on manufacturing, energy and resource efficiency, transport and other areas.

The second driver is the UK's position in the top tier of innovative economies. The UK is home to four of the world's top six universities. In 2007/08, university spin-out companies employed nearly 14,000 people and had a combined turnover of over £1.1 billion. Alongside high-tech manufacturing in sectors such as pharmaceuticals, aerospace, software and industrial design, UK services are increasingly knowledge-intensive, and now account for three quarters of gross value added (GVA) and over 80% of employment in the UK.

Quantum

	31 March 2011	31 March 2010
Quintain's holding	50.00%	50.00%
Assets under management	£22m	£7m
Capital invested	£9.4m	£5.8m
Income generated	£0.7m	£0.2m
Contribution to profits	£0.4m	£0.1m

Our Quantum joint venture with Aviva is a fund still in its early phase with one large asset. Its major asset will be the Bristol and Bath Science Park which is nearing completion of the first stage of its development.

Bristol and Bath Science Park

The fund's major asset, the Bristol and Bath Science Park, is currently being developed on a 59 acre site at Emersons Green, 15 miles from Bath City Centre, eight miles from Bristol, close to the M4 and Bristol's rail stations. With significant investment from the South West Regional Development Agency and supported by the Universities of Bath, Bristol and the West of England, the project is an exemplar of its kind, bringing together higher education institutions, central and regional government and private sector organisations and demonstrates how a commitment to sustainable design, build and operational principles can be realised commercially.

Construction of the first buildings on the Park is now well underway and on target for completion this summer. SPark One, a 70,000 sq ft building, is being developed as a focus point for the Park. The building will incorporate an Innovation Centre for fledgling businesses and an Expansion Centre into which they can move as they grow. It will also house an amenity area, The Forum, which is designed to be the social hub of the Park, including conference and catering facilities.

The new £25m National Composites Centre ('NCC') is now almost ready for occupation. The facility, supported by leading aerospace, engineering and environmental firms, will provide up to 260 jobs at the Park. It will bring together dynamic companies and enterprising academics to develop new technologies for the design and rapid manufacture of high-quality composite products.

In March 2011, the NCC was named as one of the seven centres of excellence forming part of the Government's first Technology and Innovation Centre.

Secondary Property

Investment Property Databank reported total property returns of 15.2% for the year end 2010. The market is anticipated to weaken in 2011 with the Investment Property Forum reporting total annual property returns of 5.7% predominantly driven by income return. The prospects for the secondary market remain more volatile than the prime market with declining capital values and limited rental growth anticipated to generate nil or negative returns for the year. The prospects for the regional secondary market are particularly weak with limited occupational absorption further exacerbated by public sector cuts.

In line with previous years, Quintain's strategy is to capitalise on both the recent and anticipated further capital value movements to acquire individual assets or portfolios on what it considers to be an acceptable risk-adjusted basis and to generate above average returns by repositioning the asset through void reduction, lease re-gearing and extensions.

We are also looking to develop relationships with the financiers and owners of non-performing assets or property portfolios, in order to secure new income streams and joint venture partnerships as well as to apply our financing and asset management skills to realise value.

SeQuel

	31 March 2011	31 March 2010
Assets under management	£83.7m	£78.9m
Capital invested	£37.4m	£36.7m
Income generated	£9.0m	£5.6m
Contribution to profits	£3.1m	£13.4m
Average remaining lease	5.1yrs	4.8yrs

SeQuel comprises a predominantly regional mixed use commercial portfolio valued at £83.7m as at 31 March 2011, following a small fall in value. During the year £6.4m of sales were realised and the Stadium Retail Park at Wembley was acquired for £14.7m.

The Fund comprises 27 assets with a total floor area of 1.1m sq ft. It is actively managed with a clear focus on income retention with targeted sales to crystallise value.

Income generated is £9.0m with an estimated rental value ('ERV') of £9.2m representing a net initial yield of 10.0%. Voids at ERV total £0.99m representing 11% of the portfolio. In the period under review, £0.14m of new leases was secured. Since the year end a further £0.17m of income has been extended for a five year term. Other leases generating £0.55m of income per annum are in solicitors' hands constituting either new lettings or lease extensions.

Albemarle

Albemarle Retail Properties LLP ('ARP') is the first of our ventures where we have worked with the existing owners of non-performing assets to create a new partnership. ARP comprises 105 secure high street retail units, valued at £72.6m in February 2011. The vehicle is partially funded by new third party debt and shareholder equity. Quintain invested £10.7m in the vehicle in March 2011 to secure a 28% shareholding. Quintain's investment is structured to provide an annual 10% paid coupon on its equity and a priority deferred annual 10% coupon over three years. Quintain has representation in ARP's management structure and is the largest single shareholder in the vehicle.

ARP produces a gross income of £5.05m, representing 6.6% net initial yield. The portfolio is secured 70% by UK multiples with a 10-year weighted average unexpired term. The ERV on the portfolio is £5.64m. The total void exposure excluding structured voids and units under offer is £0.14m representing 2.5% of ERV. ARP provides Quintain with the opportunity to use its asset management and financial structuring skills to invest equity in the recapitalisation, restructuring and term extension of a property entity to both the existing shareholders' and Quintain's advantage.

Risk Management

In addition to general economic, security and regulatory risks faced by a wide range of companies that are part of the general commercial environment, we consider there to be a number of specific risks that are faced by our Company.

How we manage risk

In managing the business, the identification and monitoring of risk is crucial. During the year the Risk Committee was re-constituted. It now comprises the Executive Team and meets quarterly. The risk register has been divided into four areas and those responsible for the risks in each area are required to present to the Risk Committee at one of the quarterly meetings. The minutes of those meetings are distributed to the Audit Committee and more formally the Audit Committee is asked to review the risk register and consider the adequacy of controls at least once annually. Internal Audit also reviews the risk register and considers this in planning their audit programme. After the year end PwC was appointed as Internal Auditor replacing Grant Thornton. Set out below is management's view of the current key specific business risks and action taken in mitigation.

Risks and mitigation

Description and implication of risk	Mitigation
Property valuations
Property valuations are inherently subjective and uncertain. This is more acute both in current markets where transaction volumes are lower than average and in relation to our major regeneration projects which are unique with comparables used varying materially more than for investment properties.	We use external independent valuers that are well regarded in the industry. We keep in close contact to understand how valuations are moving. With respect to the urban regeneration properties, valuers support their stand back valuation with other metrics including value per acre, value per net developable square foot and discounted cashflow.
Banking covenants
The two key financial covenants within the corporate bilateral facilities are gearing and interest cover. The gearing ratio of 60% compares with a covenant of 110%. Interest cover for the year was 1.9 times against a covenant of 1.25 times.	Covenants are forecast and monitored on a regular basis. Internal guidelines which have been endorsed by the Board operate at tighter levels of control than the external covenants and incorporate the impact of positioning in the cycle to encourage significant headroom at the top of the cycle. In re-pricing the 2013 and 2014 swaps to market, the banks have agreed to exclude the NPV payment from interest cover which materially increases headroom against forecast for the next three years. The corporate debt remains fully hedged to assist in cost certainty and part of the proceeds of the rights issue was set aside to invest in income producing assets and build the fund management business to improve the income profile of the Group.
Liquidity
Quintain's corporate debt facilities expire between 2013 and 2016. Ensuring sufficient liquidity is in place to deliver the business plan.	Having extended, either fully or through options, £295m of debt net of amortisation the target this year is to increase that to £400m. We currently have sufficient undrawn facilities to meet commitments. Recycling of capital through sales and joint venture partners will be critical to the continued build out of our major regeneration schemes.

Description and implication of risk	Mitigation
Development
The Group is exposed to risks associated with development projects. Delays could occur for regulatory or funding reasons. Counterparty risk remains high with a risk that contractors may become bankrupt or insolvent. This also applies to other counterparties such as development partners who may fail to meet their obligations. Control of timing and construction costs are vital to prevent overspend or delays once on site.	Quintain's in-house project management team transfers risk to contractors where possible and employs a culture of no changes once the design is agreed. The supply chain management initiative, SC², is creating increasing visibility into opportunities for cost control and reduction, while standardisation across Quintain's projects will increase predictability and provide economies of scale. Structuring of deals and retentions provide some support against counterparty risk.
Market
The Group's business is dependent on the general economic and property market conditions in the United Kingdom. Deterioration in residential and commercial property markets could lead to further declines in the value of the Group's property portfolio, tenant default and a reduction in income from these properties. Land, which makes up 47.5% of the Group's gross assets, tends to experience greater volatility in valuations than income producing assets.	There is significant diversification in the profile of assets, from nursing homes with RPI linked long leases and minimum rental uplifts, to direct lets of student accommodation, secondary regional property with a wide tenant base and regeneration projects with lower initial income profiles. While the Group has a considerable quantity of planning consents, we have few development obligations. The largest tenant comprising 4.9% of contracted annualised rent is Live Nation, operating Wembley Arena. This exposure is reduced by receipts equating to approximately half of the rent being received in Quintain controlled bank accounts before being passed on and also by Quintain's ability to step in to the business.
Reputation
Quintain's reputation with many stakeholders is important in the continued effective operations of the business. Support from the public sector is essential in continuing to achieve detailed planning consents. Relationships with joint venture partners and other professional organisations are critical in delivery of the business.	On-going senior management engagement with stakeholders. All deals that may have a material impact on reputation must be reviewed by the Board. In order to increase our understanding and manage the risk, we recently commissioned a perceptions audit and are creating an action plan to address any concerns that arise.
Counterparty Risk
The ability of counterparties to meet their obligations is crucial. In particular we are exposed to contractors on developments under construction, joint venture partners and end purchasers under forward funding agreements.	We monitor counterparty risk and ensure that through step-in rights, retentions and deposits, we have protected our position as far as possible from financial loss.
Personnel
The loss of key personnel could affect delivery of the business strategy. This risk is currently increased because share incentive packages have very little value or no value.	A new share incentive plan will be implemented subject to shareholder consent at the next AGM. In order to understand and address employees' issues within the business there is an annual employee survey, the findings of which are openly disclosed and acted upon. There are regular formal staff meetings and monthly informal events at which staff can communicate with senior management, as well as weekly transmissions of news and successes allowing all employees to understand the activities around the Group and the impact of their contribution.

The detailed assessment of financial risk management covering credit, liquidity and market risk is set out in note 19 to the accounts.

Responsibility Statement

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with the applicable set of accounting standards give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

· The Management Report¹, the Principal Risks and Key Performance Indicators sections of this report include a fair

review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

¹The Management Report encompasses the Chairman's Statement, the Chief Executive's Review, Finance Review and the Business Review.

On behalf of the Board

William Rucker Rebecca Worthington

Chairman Finance Director

25 May 2011 25 May 2011

Forward looking statements

This document contains certain "forward-looking" statements reflecting, amongst other things, current views on our markets, activities and prospects. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur and which may be beyond Quintain Estates and Development's ability to control or predict (such as changing political, economic or market circumstances). Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of Quintain Estates and Development speak only as of the date on which they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except to the extent required by law, Quintain Estates and Development does not undertake to update or revise forward-looking statements to reflect any changes in Quintain Estates and Development's expectations with regard thereto or any changes in information, events, conditions or circumstances on which any such statement is based.

Quintain Estates and Development plc

Consolidated Income Statement

For the year ended 31 March 2011

			2011	2010
	Notes		£m	£m
Revenue	4		46.9	56.9
Cost of sales (before impairment in book value of trading properties)	4		(20.3)	(22.9)
Impairment in book value of trading properties	4		(0.4)	(8.1)
Gross profit			26.2	25.9
Administrative expenses		5	(20.6)	(21.1)
Operating profit before recognition of results from non-current
asset sales and revaluation			5.6	4.8
Profit (loss) from the sale of non-current assets			2.8	(7.7)
(Deficit) surplus on revaluation of investment properties	9		(54.0)	7.5
Share of profit (loss) from joint ventures	11i		9.5	(0.2)
Share of (loss) profit from associates	11ii		(0.1)	0.3
Impairment of other non-current investments	11iii		-	(0.2)
Impairment recognised on acquisition	27		-	(3.1)
Operating (loss) profit before finance expenses and tax			(36.2)	1.4
Interest payable			(10.3)	(17.1)
Change in fair value of derivative financial instruments			(4.7)	0.7
Finance expenses			(15.0)	(16.4)
Finance income			3.1	4.8
Net finance expenses	6		(11.9)	(11.6)
Loss before tax			(48.1)	(10.2)
Current tax			(0.2)	(0.2)
Deferred tax			13.6	2.3
Tax credit for the year	7i		13.4	2.1
Loss for the financial year			(34.7)	(8.1)

Attributable to:
Equity shareholders			(34.7)	(8.2)
Non-controlling interest			-	0.1
			(34.7)	(8.1)

Earnings per share (pence):
Basic	8i		(6.7)	(3.3)

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2011

		2011	2010
	Notes	£m	£m
Foreign currency translation differences		(0.1)	-
Deficit on revaluation of other non-current investments	11iii	(0.3)	(0.1)
Effective portion of changes in fair value of cashflow hedges, net of
recycling	20i	2.3	(0.3)
Recycling of fair value adjustment on cashflow hedges		5.3	-
Recycling of fair value adjustment on disposal of interest in joint
venture		0.4	-
Share of other comprehensive income in joint ventures, net of tax	11i	4.8	1.2
Tax on other comprehensive income	7iii	(2.1)	0.1
Other comprehensive income for the financial year, net of tax		10.3	0.9
Loss for the financial year		(34.7)	(8.1)
Total comprehensive income for the financial year, net of tax		(24.4)	(7.2)

Attributable to:
Equity shareholders		(24.4)	(7.3)
Non-controlling interest		-	0.1
		(24.4)	(7.2)

Consolidated Balance Sheet

As at 31 March 2011

		2011	2010
	Notes	£m	£m
Non-current assets
Investment properties	9	805.6	812.9
Owner-occupied properties, plant and equipment	10	2.6	2.7
Investment in joint ventures	11i	217.0	202.1
Investment in associates	11ii	1.5	1.6
Other non-current investments	11iii	3.6	3.9
Non-current receivables	12	10.7	-
Total non-current assets		1,041.0	1,023.2
Current assets
Trading properties	13	23.9	28.1
Trade and other receivables	14	19.4	15.9
Cash and cash equivalents	19ii	19.8	47.2
Total current assets		63.1	91.2
Total assets		1,104.1	1,114.4
Current liabilities
Bank loans and other borrowings	16	(3.7)	(1.6)
Trade and other payables	15	(36.5)	(37.1)
Current tax liability		(1.2)	(1.1)
Total current liabilities		(41.4)	(39.8)
Non-current liabilities
Bank loans and other borrowings	16	(432.7)	(397.0)
Deferred tax liability	7iv	(12.2)	(23.7)
Obligations under finance leases	17	(11.1)	(11.1)
Other payables	18	(8.1)	(20.4)
Total non-current liabilities		(464.1)	(452.2)
Total liabilities		(505.5)	(492.0)
Net assets		598.6	622.4
Equity
Issued capital	23	130.2	130.1
Share premium account		137.3	137.3
Revaluation reserve		(0.4)	(0.1)
Other capital reserves	22	108.1	108.1
Cashflow hedge reserve		(28.3)	(39.0)
Translation reserve		0.4	0.5
Retained earnings		260.6	294.8
Own shares held reserve		(9.6)	(9.6)
Equity shareholders' funds		598.3	622.1
Non-controlling interest		0.3	0.3
Total equity		598.6	622.4

Net asset value per share (pence):	8ii
Basic		116	120
Diluted		115	120

Approved by the Board of Directors on 25 May 2011 and signed on its behalf by:

ADRIAN WYATT REBECCA WORTHINGTON

Director Director

Consolidated Statement of Changes in Equity

For the year ended 31 March 2011

		Issued capital	Share premium account	Revaluation reserve	Other capital reserves	Cashflow hedge reserve	Translation reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Total equity
		Issued capital	Share premium account	Revaluation reserve	Other capital reserves	Cashflow hedge reserve	Translation reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Total equity
		£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance 1 April 2010		130.1	137.3	(0.1)	108.1	(39.0)	0.5	294.8	(9.6)	622.1	0.3	622.4
Loss for the financial year		-	-	-	-	-	-	(34.7)	-	(34.7)	-	(34.7)
Other comprehensive income
	for the year, net of tax	-	-	(0.3)	-	10.7	(0.1)	-	-	10.3	-	10.3
Issue of shares less costs		0.1	-	-	-	-	-	-	-	0.1	-	0.1
Costs relating to share-based
	payment schemes	-	-	-	-	-	-	0.5	-	0.5	-	0.5
Balance 31 March 2011		130.2	137.3	(0.4)	108.1	(28.3)	0.4	260.6	(9.6)	598.3	0.3	598.6

Refer to note 22 for more information.

Consolidated Statement of Changes in Equity

For the year ended 31 March 2010

		Issued capital	Share premium account	Revaluation reserve	Other capital reserves	Cashflow hedge reserve	Translation reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Total equity
		Issued capital	Share premium account	Revaluation reserve	Other capital reserves	Cashflow hedge reserve	Translation reserve	Retained earnings	Own shares held reserve	Equity shareholders' funds	Non-controlling interest	Total equity
		£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Balance 1 April 2009		32.5	51.5	174.6	108.1	(41.7)	0.5	131.2	(11.9)	444.8	-	444.8
Transfer on change in
	accounting policy
	relating to development
	properties (see note below)	-	-	(172.9)	-	-	-	172.9	-	-	-	-
Loss for the financial year		-	-	-	-	-	-	(8.2)	-	(8.2)	0.1	(8.1)
Other comprehensive income
	for the year, net of tax	-	-	(0.1)	-	1.0	-	-	-	0.9	-	0.9
Realisation of revaluation reserve		-	-	(1.7)	-	-	-	1.7	-	-	-	-
Realisation of hedging reserve		-	-	-	-	1.7	-	(1.7)	-	-	-	-
Rights issue		97.5	93.6	-	-	-	-	-	-	191.1	-	191.1
Expenses of rights issue		-	(8.0)	-	-	-	-	-	-	(8.0)	-	(8.0)
Issue of other shares less
	costs	0.1	0.2	-	-	-	-	-	-	0.3	-	0.3
Costs relating to share-based
	payment schemes	-	-	-	-	-	-	1.2	-	1.2	-	1.2
Shares awarded to
	employees under share-
	based bonus schemes	-	-	-	-	-	-	(2.3)	2.3	-	-	-
Proceeds from sale of
	non-controlling interest	-	-	-	-	-	-	-	-	-	0.2	0.2
Balance 31 March 2010		130.1	137.3	(0.1)	108.1	(39.0)	0.5	294.8	(9.6)	622.1	0.3	622.4

With effect from the financial year commencing 1 April 2009, development properties were accounted for under IAS 40, 'Investment Property', instead of, as previously, under IAS 16, 'Property, Plant and Equipment', with revaluation movements being reflected through the Income Statement rather than through other comprehensive income. The balance in the revaluation reserve as at 1 April 2009 of £172.9m relating to development properties was transferred to retained earnings.

Consolidated Cashflow Statement

For the year ended 31 March 2011

	Notes	2011 £m	2010 £m
Operating activities
Loss for the financial year		(34.7)	(8.1)
Adjustments for:
Depreciation of plant and equipment		0.8	0.8
Costs relating to share-based payment schemes		0.5	1.2
Net finance expenses		11.9	11.6
(Profit) loss on sale of non-current assets		(2.8)	7.7
Deficit (surplus) on revaluation of investment properties		54.0	(7.5)
Share of (profit) loss from joint ventures		(9.5)	0.2
Share of loss (profit) from associates		0.1	(0.3)
Loss on sale of plant and equipment		-	0.1
Impairment of other non-current investments		-	0.2
Impairment recognised on acquisition		-	3.1
Impairment in book value of trading properties		0.4	8.1
Tax on continuing operations		(13.4)	(2.1)
		7.3	15.0
Decrease (increase) in trade and other receivables		0.7	(1.6)
Decrease in trade and other payables		(1.9)	(5.6)
Decrease (increase) in trading properties		2.2	(17.3)
Cash generated from operations		8.3	(9.5)
Interest paid		(37.3)	(23.9)
Interest received		0.9	1.3
Tax (paid) recovered		(0.1)	1.5
Net cashflow from operating activities		(28.2)	(30.6)
Investing activities
Proceeds from sale of investment properties		34.6	30.5
Purchase and development of property assets		(63.2)	(14.4)
Purchase of owner-occupied properties, plant and equipment		-	(0.1)
Proceeds from sale of other non-current assets		(0.7)	7.4
Proceeds from sale of interests in joint ventures		15.5	43.2
Capital invested in joint ventures		(1.1)	-
Capital repayments received from joint ventures		4.0	-
Loans advanced to joint ventures		(44.0)	(50.3)
Loans repaid by joint ventures		24.9	2.0
Loans advanced to associate		(10.7)	-
Distributions received from joint ventures		6.2	8.9
Net cashflow from investing activities		(34.5)	27.2
Financing activities
Issue of shares		0.1	183.4
Proceeds from new borrowings		193.1	364.3
Repayment of borrowings		(156.3)	(503.7)
Payment of loan issue costs		(0.8)	(1.8)
Payment of finance lease liabilities		(0.8)	(0.8)
Net cashflow from financing activities		35.3	41.4
Net (decrease) increase in cash and cash equivalents		(27.4)	38.0
Cash and cash equivalents at start of year		47.2	9.2
Cash and cash equivalents at end of year	19ii	19.8	47.2

Notes to the accounts

For the year ended 31 March 2011

1 Accounting policies

i) Basis of preparation

The Board approved the Group financial statements on 25 May 2011. These have been prepared in accordance with International Financial Reporting Standards and Interpretations issued by the International Financial Reporting Interpretations Committee as adopted by the European Union ('IFRS') and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The Group financial statements have been prepared on a going concern basis, which assumes that the Group will continue to meet its liabilities as they fall due. At 31 March 2011, the Group has prepared detailed cashflow forecasts which show that it has adequate committed undrawn facilities and expects to realise certain assets to finance its committed capital expenditure and other outflows, which will enable it to continue in operational existence for the foreseeable future.

The Group's key financial covenants are an interest cover covenant, which requires the Group's operating profit before net finance expenses plus realised profits on disposals over net finance expenses excluding mark to market movements on derivatives to be greater than 1.25x, and a gearing covenant, which requires the net borrowings of the Company and its wholly owned subsidiaries to be less than 110% of its equity, as defined in the banking covenants. The Group has a gearing ratio of 60% at 31 March 2011 and an interest cover ratio of 1.9x at

31 March 2011. The Group's forecasts show that the Group is expected to continue to meet both financial covenants for the foreseeable future.

Based on the above the directors believe it is appropriate to prepare the financial statements on a going concern basis.

Further information regarding the Group's business activities, together with the factors likely to affect its future development, performance and position is set out in the Operational and Financial Review. In addition, note 19 to these financial statements sets out the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and hedging activities and its exposure to credit risk and liquidity risk.

The financial statements are presented in Sterling and have been prepared on an historical cost basis except that investment properties, other non-current investments and certain financial instruments described in section xiv below have been stated at fair value.

During the financial year, the following accounting standards and guidance were adopted by the Group:

IFRS 3 (Revised), 'Business Combinations', effective for accounting periods beginning on or after

1 July 2009.

Amendments to IAS 27, 'Consolidated and Separate Financial Statements', effective for accounting periods beginning on or after 1 July 2009.

Amendments to IAS 32, 'Financial Instruments: Presentation: Classification of Rights Issues', effective for accounting periods beginning on or after 1 February 2010.

IFRIC 15, 'Agreements for the Construction of Real Estate', effective for accounting periods beginning on or after 1 January 2010.

IFRIC 17, 'Distributions of Non-cash Assets to Owners', effective for accounting periods beginning on or after 1 November 2009.

IFRIC 18, 'Transfer of Assets from Customers', effective for accounting periods beginning on or after

1 November 2009.

None of these newly adopted standards has had a material impact on the Group in this financial year.

The following new standards, amendments to standards and interpretations have been endorsed but are not effective for the financial year and have not been adopted early:

IFRIC 19, 'Extinguishing Financial Liabilities with Equity Instruments', effective for accounting periods beginning on or after 1 July 2010.

IAS 24 (Revised), 'Related Party Disclosures', effective for accounting periods beginning on or after

1 January 2011.

The majority of amendments made as part of the IASB's 2010 Annual Improvements Programme affect accounting periods beginning on or after 1 January 2011. The Group has adopted early the amendments to IAS 1 arising from this Programme that allows changes in each component of equity arising from transactions recognised in other comprehensive income to be disclosed in the notes. The comparative statement of changes in equity has been restated as a result.

None of these standards and interpretations, when applied, are expected to have a material impact upon the financial statements, other than in relation to disclosure or presentation.

ii) Significant judgments, estimates and assumptions

The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities as at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements that are not readily apparent from other sources. However, the actual results may differ from these estimates. The areas where management have made significant judgements and estimates are as follows:

Property valuations - Group

The fair value of the Group's investment properties is the main area within the financial statements where the Board has exercised significant judgement. The fair value of the Group's property portfolio is inherently subjective. In the current market where transaction volumes are lower than average and comparables on the Group's major regeneration schemes (Wembley and Greenwich) are limited, the subjectivity around the valuations is more acute.

The Group's investment properties are valued every six months by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Board must ensure that it is satisfied that the valuation of the Group's properties is appropriate for the accounts. The principal valuers of the Group's investment properties are Savills Commercial Limited and Jones Lang LaSalle Limited. Copies of the valuation reports of Savills Commercial Limited and Jones Lang LaSalle Limited, which together account for 96.3% of the Group's investment properties, will be included within the annual report.

The key assumptions made in the valuation of the Group's investment properties are:

the amount and timing of future income streams;

anticipated maintenance costs and other landlord's liabilities; and

an appropriate yield.

The key assumptions made in the valuation of the Group's investment properties in the course of construction (primarily Wembley and Greenwich) are:

the discount rate applied;

the implementation strategy for the relevant plots;

the timing and conditions of planning consent;

future development costs including construction cost inflation; and

future residential sales values including residential sales growth rates.

In performing the valuations, the valuers have regard to market evidence on comparable transactions and underlying assumptions.

Property valuations - joint ventures

The fair value of the investment properties held within joint ventures is a further area where the Board has exercised judgement. Investment properties are held within Quercus, the Group's healthcare joint venture, iQ, the Group's student accommodation fund, Quantum, the Group's science park fund and the Greenwich N0204 and Retail joint ventures.

The joint venture investment properties are valued every six months by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Board must ensure that it is satisfied that the valuation of the joint venture properties is appropriate for the accounts. The principal valuers of the joint venture investment properties are CB Richard Ellis Limited who value iQ, Christie + Co who value Quercus and Savills Commercial Limited who value the Greenwich joint ventures.

The key assumptions made in the valuation of the joint venture investment properties are the same as those noted above in respect of the Group properties.

Derivatives

The fair value of the derivative financial instruments requires management to make judgements and estimates. The Board has relied on the valuations carried out by JC Rathbone Associates Limited, financial risk consultants, in determining the fair value of derivatives held by the Group and within joint ventures as at 31 March 2011. The key assumptions made within the fair value calculations are the future cashflows under the derivatives and the appropriate market discount rate.

ii) Significant judgments, estimates and assumptions continued

Other

Other areas of judgement, risk and uncertainty which are relevant to an understanding of these results and the Group's financial position are referred to in the Operational and Financial Review.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

iii) Basis of consolidation

The Group's financial statements consolidate those of the Company and its subsidiaries, together referred to as the Group, and equity account the Group's interest in joint ventures and associates. The parent company financial statements present information about the Company as a separate entity and not about its Group. The Company has elected to prepare its parent company financial statements in accordance with UK GAAP.

Subsidiaries are those entities controlled by the Group. Control exists when the Group has power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date it ceases.

A joint venture is an undertaking in which the Group has a long term interest and over which it exercises joint control. An associate is an entity in which the Group has significant influence but not control over financial and operating policies. The Group equity accounts for its share of net profit after tax of its joint ventures and associates through the Income Statement. The effective portion of changes in the fair value of cashflow hedges within joint ventures less any related tax is recognised in other comprehensive income. The Group's interest in the net assets of joint ventures and associates is included in the Consolidated Balance Sheet.

Where an asset is transferred to an existing joint venture or the Group disposes of an interest in a subsidiary, the Group recognises a share of the profit equivalent to the interest it has sold to an external party. All such transactions occur at fair value.

iv) Revenue and cost of sales

Revenue is stated net of VAT and comprises rental income, proceeds from sales of trading properties, income from hotel operations, fees, commissions and other income.

Rental income from investment properties leased out under operating leases is recognised in the Income Statement on a straight-line basis over the term of the lease.

Contingent rents which comprise turnover rents are recognised as income in the periods in which they are earned. Rent reviews are recognised when such reviews have been agreed with tenants.

Lease incentives are recognised as an integral part of the net consideration for the use of the property and amortised on a straight-line basis over the term of the lease, or the period to the first tenant break, if shorter.

Property operating costs are expensed as incurred including any element of service charge expenditure not recovered from tenants.

Sales of trading properties are recognised in the accounts on the date of unconditional exchange or where an exchange is conditional, on the date that conditions have been satisfied, except for contracts with affordable housing associations for development and eventual sale which are recognised on a percentage of completion basis under

IAS 11, 'Construction Contracts'. Where a land sale occurs to prior to the development, the profit is recognised at the point of the original sale.

Income from hotel operations represents income receivable from the Plaza Hotel, Wembley prior to the redevelopment of the site, for which outline planning permission has been obtained. Hotel revenue is recognised when the relevant services are provided.

Fees from fund management relate to base and performance fees receivable in respect of asset management together with property procurement fees. Performance fees are recognised when it is likely that performance criteria have been met. All other fees are recognised on a receivable basis.

Other income comprises tenant lease surrender premiums, insurance commission, car parking receipts, property management fees and miscellaneous income.

v) Purchase and disposal of properties held as non-current assets

Property purchases and sales are recognised in the accounts on the date of unconditional exchange or, where an exchange is conditional, on the date that conditions have been satisfied.

Profits or losses arising on disposal are calculated by reference to the carrying value of the asset at the last revaluation, adjusted for subsequent capital expenditure and selling costs.

The acquisition or disposal of shares in subsidiaries and interests in joint ventures where properties constitute the only or main asset are accounted for as property transactions unless the fair values attributed to other assets and liabilities within the entity differ from their carrying values.

vi) Impairment

The carrying values of the Group's assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication becomes evident, the asset's recoverable amount is estimated and an impairment loss recognised in the Income Statement whenever the carrying amount of the asset exceeds its recoverable amount.

The recoverable amount of an asset is the greater of its fair value less sale costs and its value-in-use. The value-in-use is determined as the net present value of the future cashflows expected to be derived from the asset, discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

vii) Employee benefits

Pensions

Contributions to employees' personal plans are charged to the Income Statement as incurred.

Share-based payment schemes

The fair value of equity rights is estimated using the Black Scholes and binomial models at the date of grant to directors and staff and is dependent on factors such as the exercise price, expected volatility, option price and risk free interest rate. The fair value is then amortised through the Income Statement on a straight-line basis over the vesting period. Expected volatility is determined based on the historic share price volatility (market price) for the Company on the grant date over a period matched to the expected life of the awards.

The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture is due only to the share price not achieving the threshold for vesting.

viii) Capitalisation of borrowing costs

Net borrowing costs in respect of capital expenditure on properties under development are capitalised. Interest is capitalised using the Group's weighted average cost of borrowing from the commencement of development work until the date of practical completion. The capitalisation of finance costs is suspended if there are prolonged periods when development activity is interrupted. Tax relief on interest capitalised on investment properties is reflected in the Income Statement. All other borrowing costs are recognised in the Income Statement in the period in which they are incurred.

ix) Tax

Tax is included in the Income Statement except to the extent that it relates to items recognised in other comprehensive income, in which case the related tax is recognised under that heading. Current tax is the expected tax payable on the taxable income for the year using tax rates applicable at the balance sheet date. Tax payable upon the realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with a release of the associated deferred tax.

Deferred tax is provided on all temporary differences, except in respect of investments in subsidiaries and joint ventures where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is provided using the balance sheet liability method in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amount used for tax purposes.

The amount of deferred tax provided is based on the expected manner of realisation 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 that future taxable profits will be available against which the asset can be utilised.

x) Investment properties

Investment properties are properties owned or leased by the Group which are held either for long term rental growth or for capital appreciation or both. Investment property is initially recognised at cost including related transaction costs and valued bi-annually by professionally qualified external valuers.

Properties held under operating leases are accounted for as investment properties where the other criteria for recognition are met. Such operating leases are accounted for as if they are finance leases.

Additions to investment properties consist of costs of a capital nature and in the case of investment properties under development, capitalised interest.

Gains or losses arising from changes in the fair value of investment property are included in the Income Statement of the year in which they arise.

xi) Leases

Where a Group company is the lessee:

a) Operating leases - leases in which substantially all the risks and rewards of ownership are retained by another party, the lessor, are classified as operating leases. Payments, including prepayments, made under operating leases (net of any incentives received from the lessor) are charged to the Income Statement on a straight-line basis over the period of the lease.

b) Finance leases - leases of assets where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in liabilities. The finance charges are charged to the Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The investment properties acquired under finance leases are subsequently carried at their fair value.

Where a Group company is the lessor:

a) Operating leases - properties leased out to tenants under operating leases are included in investment properties in the Balance Sheet with rental income recognised on a straight-line basis over the lease term.

b) Finance leases - when assets are leased out under a finance lease, the present value of the minimum lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the terms of the lease using the net investment method before tax which reflects a constant periodic rate of return. Where only the buildings element of a property lease is classified as a finance lease, the land element is shown within operating leases.

xii) Owner-occupied properties, plant and equipment

Fixtures, fittings and equipment are carried at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the life of these assets estimated at between three to five years.

xiii) Trading properties

Trading properties are properties acquired or developed and held for sale and are shown at the lower of cost and net realisable value. The cost of trading properties are those costs directly associated with the acquisition and development of a specific site. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and the estimated costs necessary to make the sale.

xiv) Financial instruments

The Group initially recognises all financial instruments at fair value.

Other non-current investments

Other non-current investments are non-derivative investments that are designated as available for sale and are shown at fair value. Adjustments to fair value are recognised in other comprehensive income except for impairments which are reflected in the Income Statement.

Non-current receivables

Non-current receivables are held at amortised cost using the effective interest method.

Trade and other receivables

Trade and other receivables are recognised at amortised cost. A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able to collect all amounts 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 other short term highly liquid investments with original maturities of three months or less.

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Borrowings are subsequently stated at amortised cost with any difference between the amount initially recognised and the redemption value being recognised in the Income Statement over the period of the borrowings on an effective interest rate basis.

Trade and other payables

Trade and other payables are non-interest bearing and are recognised at amortised cost.

Derivative financial instruments

The Group uses derivative financial instruments to manage its interest rate risk. These financial instruments are recognised initially at fair value and subsequently re-measured at fair value.

When a derivative is designated as the hedging instrument in a hedge of the variability in cashflows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the Income Statement. The amount accumulated in equity is reclassified to the Income Statement in the same period that the hedged item affects profit or loss.

xv) Own shares held by ESOP Trusts and treasury shares

Transactions of the Group-sponsored ESOP Trusts, The Quintain Group Employee Benefit Trust and the Quintain Estates and Development Deferred Bonus Plan Trust, are included in the Group financial statements. In particular, the Trusts' purchases of shares in the Company and shares acquired as treasury shares are debited directly to equity.

Notes to the accounts

continued

2 Results for the financial year

	2011	2011	2011	2010	2010	2010
	Adjusted	Capital	Total	Adjusted	Capital	Total
	£m	£m	£m	£m	£m	£m
Revenue	46.9	-	46.9	56.9	-	56.9
Cost of sales (before impairment in
book value of trading properties)	(20.3)	-	(20.3)	(22.9)	-	(22.9)
Impairment in book value of trading
properties	-	(0.4)	(0.4)	-	(8.1)	(8.1)
Gross profit (loss)	26.6	(0.4)	26.2	34.0	(8.1)	25.9
Administrative expenses	(20.6)	-	(20.6)	(21.1)	-	(21.1)
Operating profit (loss) before
recognition of results from
non-current asset sales and
revaluation	6.0	(0.4)	5.6	12.9	(8.1)	4.8
Profit (loss) from the sale of
non-current assets	-	2.8	2.8	-	(7.7)	(7.7)
(Deficit) surplus on revaluation of
investment properties	-	(54.0)	(54.0)	-	7.5	7.5
Share of profit (loss) from joint
ventures	4.8	4.7	9.5	2.0	(2.2)	(0.2)
Share of (loss) profit from associates	-	(0.1)	(0.1)	-	0.3	0.3
Impairment of other non-current
investments	-	-	-	-	(0.2)	(0.2)
Impairment recognised on acquisition	-	-	-	-	(3.1)	(3.1)
Operating profit (loss) before
finance expenses and tax	10.8	(47.0)	(36.2)	14.9	(13.5)	1.4
Interest payable	(10.3)	-	(10.3)	(17.1)	-	(17.1)
Change in fair value of derivative
financial instruments	-	(4.7)	(4.7)	-	0.7	0.7
Finance expenses	(10.3)	(4.7)	(15.0)	(17.1)	0.7	(16.4)
Finance income	3.1	-	3.1	4.8	-	4.8
Net finance expenses	(7.2)	(4.7)	(11.9)	(12.3)	0.7	(11.6)
Profit (loss) before tax	3.6	(51.7)	(48.1)	2.6	(12.8)	(10.2)
Current tax	(0.2)	-	(0.2)	(0.2)	-	(0.2)
Deferred tax	-	13.6	13.6	-	2.3	2.3
Tax (charge) credit for the year	(0.2)	13.6	13.4	(0.2)	2.3	2.1
Profit (loss) for the financial year	3.4	(38.1)	(34.7)	2.4	(10.5)	(8.1)
Non-controlling interest	-	-	-	(0.1)	-	(0.1)
Profit (loss) for the financial year
attributable to equity
shareholders	3.4	(38.1)	(34.7)	2.3	(10.5)	(8.2)

3 Segmental analysis

The Group has eight reportable segments being Wembley, Greenwich, Other Urban Regeneration, Quercus, iQ, SeQuel, Other QFM and Other. The factors used to determine the Group's reportable segments relate to the way in which the business is aligned and the manner in which results and assets are reported to the Board (as the Board is considered to be the chief operating decision maker) and therefore the basis that resource allocations are made.

Following a change in management reporting lines, the Group's reportable segments have been amended in the current financial year. Wembley and Greenwich now have separate segment managers and are reported separately to the Board. Thus, management believe that it is more appropriate to disaggregate these segments going forward. The comparative year's segmental results have been restated accordingly. Other Urban Regeneration includes other smaller development sites outside of Wembley and Greenwich.

The Group also invests in a number of property joint ventures. Each of these has different characteristics such as different customers and property types. On this basis, Quercus (the Group's healthcare joint venture), iQ (the Group's student accommodation joint venture) and SeQuel (the Group's secondary property fund) have been disclosed as separate operating segments within the Quintain Fund Management division. The Other QFM segment consists of Quantum, Albemarle and other fund management assets.

The Other operating segment consists of secondary properties held directly by the Group.

The measure of segment result is considered to be the IFRS measure of Operating Profit before finance expenses and tax. The Board reviews administrative expenses, finance expenses and tax at Group level and does not allocate these costs to segments. Following a revision in the reporting provided to the Board, the Group's segment asset and liability disclosures have also been amended in this financial year. The Board's review now concentrates primarily on property, joint venture and investment assets at the segment level with all other assets being reviewed at the Group level. Liabilities are only reviewed at the Group level and not allocated to segments. The comparative year's segmental balance sheet has been restated accordingly.

All activities are based in the United Kingdom and Channel Islands.

Further discussion of the Group's results for the year and the segmental balance sheets is contained in the Operational and Financial Review.

The segmental analysis of the Group's results for the year ended 31 March 2011 was as follows:

	Wembley	Greenwich	Other Urban Regeneration	Total Urban Regeneration	Quercus	iQ	SeQuel	Other QFM	Total QFM	Other	Unallocated	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	25.2	0.4	3.5	29.1	3.4	2.4	9.0	0.6	15.4	2.4	-	46.9
Cost of sales	(13.0)	(0.1)	(3.0)	(16.1)	(1.1)	-	(1.7)	(0.3)	(3.1)	(1.1)	-	(20.3)
Impairment in
book value of
trading
properties	-	-	(0.4)	(0.4)	-	-	-	-	-	-	-	(0.4)
Gross profit	12.2	0.3	0.1	12.6	2.3	2.4	7.3	0.3	12.3	1.3	-	26.2
Administrative
expenses	-	-	-	-	-	-	-	-	-	-	(20.6)	(20.6)
Operating profit
(loss) before
recognition of
results from non-
current asset
sales and
revaluation	12.2	0.3	0.1	12.6	2.3	2.4	7.3	0.3	12.3	1.3	(20.6)	5.6
Profit (loss) from
the sale of
non-current
assets	0.1	2.5	-	2.6	0.2	-	0.7	(0.7)	0.2	-	-	2.8
(Deficit) surplus
on revaluation
of investment
properties	(6.8)	3.0	(9.6)	(13.4)	-	-	(4.9)	(33.0)	(37.9)	(2.7)	-	(54.0)
Share of (loss)
profit from joint
ventures	(0.8)	(5.9)	1.5	(5.2)	7.3	7.5	-	(0.1)	14.7	-	-	9.5
Share of loss
from associates	-	-	-	-	-	-	-	(0.1)	(0.1)	-	-	(0.1)
Operating profit
(loss) before
finance expenses
and tax	4.7	(0.1)	(8.0)	(3.4)	9.8	9.9	3.1	(33.6)	(10.8)	(1.4)	(20.6)	(36.2)
Net finance
expenses	-	-	-	-	-	-	-	-	-	-	(11.9)	(11.9)
Profit (loss)
before tax	4.7	(0.1)	(8.0)	(3.4)	9.8	9.9	3.1	(33.6)	(10.8)	(1.4)	(32.5)	(48.1)

The segmental analysis of the Group's results for the year ended 31 March 2010 was as follows:

Restated	Wembley	Greenwich	Other Urban Regeneration	Total Urban Regeneration	Quercus	iQ	SeQuel	Other QFM	Total QFM	Other	Unallocated	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Revenue	30.8	0.9	0.8	32.5	9.5	2.3	5.6	0.4	17.8	6.6	-	56.9
Cost of sales	(18.4)	-	(0.7)	(19.1)	(0.8)	-	(0.6)	-	(1.4)	(2.4)	-	(22.9)
Impairment in book
value of trading
properties	-	-	(8.1)	(8.1)	-	-	-	-	-	-	-	(8.1)
Gross profit (loss)	12.4	0.9	(8.0)	5.3	8.7	2.3	5.0	0.4	16.4	4.2	-	25.9
Administrative
expenses	-	-	-	-	-	-	-	-	-	-	(21.1)	(21.1)
Operating profit
(loss) before
recognition of
results from non-
current asset
sales and
revaluation	12.4	0.9	(8.0)	5.3	8.7	2.3	5.0	0.4	16.4	4.2	(21.1)	4.8
(Loss) profit
from the sale of
non-current assets	(1.3)	(1.4)	-	(2.7)	(8.5)	-	2.2	(0.3)	(6.6)	1.6	-	(7.7)
(Deficit) surplus
on revaluation
of investment
properties	(12.3)	20.3	0.8	8.8	-	-	6.2	(2.0)	4.2	(5.5)	-	7.5
Share of (loss)
profit from joint
ventures	(0.9)	7.7	0.1	6.9	(3.9)	(3.3)	-	0.1	(7.1)	-	-	(0.2)
Share of profit
from associate	-	-	-	-	-	-	-	0.3	0.3	-	-	0.3
Impairment of other
non-current
investments	-	-	-	-	-	-	-	-	-	(0.2)	-	(0.2)
Impairment
recognised on
acquisition	-	-	(3.1)	(3.1)	-	-	-	-	-	-	-	(3.1)
Operating (loss) profit
before finance expenses
and tax	(2.1)	27.5	(10.2)	15.2	(3.7)	(1.0)	13.4	(1.5)	7.2	0.1	(21.1)	1.4
Net finance expenses	-	-	-	-	-	-	-	-	-	-	(11.6)	(11.6)
(Loss) profit before tax	(2.1)	27.5	(10.2)	15.2	(3.7)	(1.0)	13.4	(1.5)	7.2	0.1	(32.7)	(10.2)

Depreciation of £0.2m (2010: £0.2m) on fixtures, fittings and equipment is included within cost of sales under Wembley. Depreciation of £0.6m (2010: £0.6m) is included in administrative expenses (note 5) and has not been allocated.

None of the Group's customers account for more than 10% of the Group's revenue. All of the Group's revenues are derived from external customers. There are no inter-segmental revenues.

The segmental analysis of the Group's Balance Sheet as at 31 March 2011 was as follows:

	Wembley	Greenwich	Other Urban Regeneration	Total Urban Regeneration	Quercus	iQ	SeQuel	Other QFM	Total QFM	Other	Unallocated	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Non-current assets
Investment
properties	470.9	159.0	37.8	667.7	-	-	83.7	21.7	105.4	32.5	-	805.6
Owner-occupied
properties, plant
and equipment	-	-	-	-	-	-	-	-	-	-	2.6	2.6
Investment in
joint ventures	3.5	83.7	0.9	88.1	51.8	67.7	-	9.4	128.9	-	-	217.0
Investment in
associates	-	-	-	-	-	-	-	1.5	1.5	-	-	1.5
Other non-current
investments	-	-	3.6	3.6	-	-	-	-	-	-	-	3.6
Non-current
receivables	-	-	-	-	-	-	-	10.7	10.7	-	-	10.7
Total non-current
assets	474.4	242.7	42.3	759.4	51.8	67.7	83.7	43.3	246.5	32.5	2.6	1,041.0
Current assets
Trading properties	11.1	-	12.8	23.9	-	-	-	-	-	-	-	23.9
Other current
assets	-	-	-	-	-	-	-	-	-	-	39.2	39.2
Total current assets	11.1	-	12.8	23.9	-	-	-	-	-	-	39.2	63.1
Total assets	485.5	242.7	55.1	783.3	51.8	67.7	83.7	43.3	246.5	32.5	41.8	1,104.1
Total current
liabilities	-	-	-	-	-	-	-	-	-	-	(41.4)	(41.4)
Total non-current
liabilities	-	-	-	-	-	-	-	-	-	-	(464.1)	(464.1)
Total liabilities	-	-	-	-	-	-	-	-	-	-	(505.5)	(505.5)
Net assets (liabilities)	485.5	242.7	55.1	783.3	51.8	67.7	83.7	43.3	246.5	32.5	(463.7)	598.6
Capital expenditure	32.4	0.2	0.1	32.7	-	-	0.1	29.3	29.4	7.8	-	69.9

The segmental analysis of the Group's Balance Sheet as at 31 March 2010 was as follows:

Restated	Wembley	Greenwich	Other Urban Regeneration	Total Urban Regeneration	Quercus	iQ	SeQuel	Other QFM	Total QFM	Other	Unallocated	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Non-current assets
Investment properties	458.0	155.7	48.7	662.4	-	-	78.9	44.1	123.0	27.5	-	812.9
Owner-occupied
properties, plant
and equipment	-	-	-	-	-	-	-	-	-	-	2.7	2.7
Investment in
joint ventures	12.9	74.8	5.4	93.1	57.2	46.0	-	5.8	109.0	-	-	202.1
Investment in
associate	-	-	-	-	-	-	-	1.6	1.6	-	-	1.6
Other non-current
investments	-	-	3.9	3.9	-	-	-	-	-	-	-	3.9
Total non-current
assets	470.9	230.5	58.0	759.4	57.2	46.0	78.9	51.5	233.6	27.5	2.7	1,023.2
Current assets
Trading properties	16.3	-	11.8	28.1	-	-	-	-	-	-	-	28.1
Other current assets	-	-	-	-	-	-	-	-	-	-	63.1	63.1
Total current assets	16.3	-	11.8	28.1	-	-	-	-	-	-	63.1	91.2
Total assets	487.2	230.5	69.8	787.5	57.2	46.0	78.9	51.5	233.6	27.5	65.8	1,114.4
Total current liabilities	-	-	-	-	-	-	-	-	-	-	(39.8)	(39.8)
Total non-current
liabilities	-	-	-	-	-	-	-	-	-	-	(452.2)	(452.2)
Total liabilities	-	-	-	-	-	-	-	-	-	-	(492.0)	(492.0)
Net assets	487.2	230.5	69.8	787.5	57.2	46.0	78.9	51.5	233.6	27.5	(426.2)	622.4
Capital expenditure	5.8	-	-	5.8	-	-	0.1	0.1	0.2	-	-	6.0

4 Revenue, cost of sales and gross profit

	2011	2011	2011	2010	2010	2010
	Revenue	Cost of sales	Gross profit	Revenue	Cost of sales	Gross profit
	£m	£m	£m	£m	£m	£m
Rental income	20.2	(5.1)	15.1	21.4	(4.9)	16.5
Income from sales of trading
properties	7.6	(7.6)	-	11.1	(11.0)	0.1
Income from hotel operations	7.6	(3.7)	3.9	7.7	(3.5)	4.2
Fees from fund management
and other services provided to related parties	6.7	(1.2)	5.5	12.7	(0.8)	11.9
Other income	4.8	(2.7)	2.1	4.0	(2.7)	1.3
	46.9	(20.3)	26.6	56.9	(22.9)	34.0
Impairment in book value
of trading properties	-	(0.4)	(0.4)	-	(8.1)	(8.1)
	46.9	(20.7)	26.2	56.9	(31.0)	25.9

The impairment in the book value of trading properties for the year ended 31 March 2010 related to a property asset that was transferred to investment properties. The property was revalued to its fair value on the date of transfer with the impairment recognised as a cost of sale. There was an impairment in relation to the carrying value of a trading property asset in the current financial year.

The cost of sales in relation to rental income comprised:

	2011 £m	2010 £m
Service charge expenditure	2.2	2.1
Service charge recovery	(0.9)	(1.1)
Irrecoverable service charges	1.3	1.0
Rents payable	0.1	0.1
Property management fees	0.3	0.3
Legal and professional fees	0.6	0.8
Allowance for impairment in respect of trade receivables	0.5	0.8
Other property costs	2.3	1.9
	5.1	4.9

Other income related to:

	2011	2011	2011	2010	2010	2010
	Revenue	Cost of sales	Gross profit	Revenue	Cost of sales	Gross profit
	£m	£m	£m	£m	£m	£m
Surrender premiums	0.2	-	0.2	0.2	-	0.2
Management fees and
commissions	1.7	(0.4)	1.3	1.3	(0.6)	0.7
Car parking income	2.0	(0.8)	1.2	1.8	(0.6)	1.2
Abortive project costs	-	(0.6)	(0.6)	-	(0.8)	(0.8)
Sundry income	0.9	(0.9)	-	0.7	(0.7)	-
	4.8	(2.7)	2.1	4.0	(2.7)	1.3

Cost of sales in relation to other income includes £0.2m (2010: £0.2m) in respect of depreciation of fixtures, fittings and equipment.

5 Administrative expenses

The analysis of the Group's administrative expenses was as follows:

	2011	2010
	£m	£m
Directors' remuneration	2.4	2.3
Staff costs	10.2	11.0
Total staff costs	12.6	13.3
Legal and other professional fees	2.5	2.3
Office costs	3.2	3.2
Loss on sale of plant and equipment	-	0.1
Depreciation of tangible fixed assets	0.6	0.6
Operating lease payments	1.1	1.1
General expenses	0.6	0.5
	20.6	21.1

i) Fees paid to auditors and their affiliates

	2011	2010
	£m	£m
Fees payable to the Company's auditor for the audit of the Company's annual
accounts	0.2	0.2
Fees payable to the Company's auditor and its associates for other services:
The audit of the Company's subsidiaries pursuant to legislation	0.1	0.1
Other services	0.1	0.2

In the comparative year, fees for other services included fees of £0.2m in relation to the rights issue which were charged to the share premium account.

Fees paid to other accountancy firms, mainly for tax advisory and internal audit services, amounted to £0.2m (2010: £0.3m) which were expensed.

ii) Staff costs

Staff costs are included in both cost of sales and administrative expenses. Gross staff costs were as follows:

	2011	2010
	£m	£m
Wages and salaries	11.2	10.6
Total costs relating to share-based payments	0.5	1.2
Provision for national insurance on unexercised share options and rights	(0.1)	0.2
Social security costs	1.5	1.4
Pension costs	1.1	0.9
Other employment costs	0.8	1.0
	15.0	15.3
Cost of sales	2.4	2.0
Administrative expenses	12.6	13.3
	15.0	15.3

Of the total costs relating to share-based payments, £0.4m (2010: £0.3m) related to the Executive Directors' Performance Share Plan and £0.1m (2010: £0.9m) related to other share-based incentive schemes.

iii) Staff numbers

The average number of persons employed by the Group during the year was as follows:

	2011	2010
Property portfolio management and administration	120	108
Hotel operations	100	114
	220	222

Staff are allocated between cost of sales and administrative expenses as follows:

	2011	2010
Cost of sales	89	100
Administrative expenses	131	122
	220	222

6 Net finance expenses

	2011	2010
	£m	£m
Recognised in Income Statement:
Interest expense on financial liabilities measured at amortised cost	21.4	31.9
Interest on obligations under finance leases	0.8	0.8
	22.2	32.7
Interest capitalised	(11.9)	(15.6)
	10.3	17.1
Change in fair value of derivative financial instruments	(0.5)	(0.7)
Recycling of fair value adjustment on cashflow hedges	5.3	-
Profit realised on termination of derivative financial instruments	(0.1)	-
Finance expenses	15.0	16.4
Finance income: interest income on loans and receivables	(3.1)	(4.8)
	11.9	11.6

Recognised in other comprehensive income:
Net change in fair value of available for sale financial assets	0.3	0.1
Effective portion of changes in fair value of cashflow hedges	(2.3)	0.3
Recycling of fair value adjustment on cashflow hedges	(5.3)	-
Tax on fair value adjustments recognised in equity	2.1	(0.1)
	(5.2)	0.3

Of interest capitalised in the year, the amount capitalised to properties in the course of construction included within investment properties was £11.9m (2010: £14.8m) and trading properties £nil (2010: £0.8m). The average rate of interest used for capitalisation was 6.0% (2010: 6.2%).

7 Tax

i) Tax credit for the year

	2011	2010
	£m	£m
UK current tax at 28% (2010: 28%)	-	0.1
Adjustment to prior year's UK corporation tax	0.1	-
Overseas tax	0.1	0.1
Total current tax charge	0.2	0.2

Deferred tax:
On investment properties	(10.7)	0.7
On derivative financial instruments	0.1	0.2
On other temporary differences	(2.2)	(3.2)
Effect of tax rate change	(0.8)	-
Total deferred tax credit	(13.6)	(2.3)
Tax credit	(13.4)	(2.1)

ii) Tax credit reconciliation

	2011	2010
	£m	£m
Loss before tax	(48.1)	(10.2)
Tax applied at UK corporation tax rate of 28% (2010: 28%)	(13.5)	(2.9)
Use of losses and differing tax rates in respect of overseas results	(0.1)	(0.3)
Indexation relief on UK investment properties	0.3	(3.5)
Adjustment to prior years' current and deferred tax	0.8	(0.8)
Tax (credit) charge taken to share of income from joint ventures and
associates	(3.8)	2.3
Impact of future UK corporation tax rate change	(0.8)	-
Other movements	3.7	3.1
Tax credit	(13.4)	(2.1)

iii) Tax recognised in other comprehensive income

	2011	2010
	£m	£m
Deferred tax charge (credit) recognised in other comprehensive income	2.1	(0.1)

iv) Deferred tax movements

	1 April 2010	Recognised in Income Statement	Effect of tax rate change	Recognised in other comprehensive income	31 March 2011
	£m	£m	£m	£m	£m
Capital gains less capital losses	38.3	(10.7)	(2.0)	-	25.6
Capital allowances	8.0	2.5	(0.7)	-	9.8
Derivative financial instruments	(8.6)	0.1	0.5	2.1	(5.9)
Other temporary differences	(0.6)	1.1	-	-	0.5
Revenue tax losses	(13.4)	(5.8)	1.4	-	(17.8)
Deferred tax provision	23.7	(12.8)	(0.8)	2.1	12.2

As part of the Budget presented on 23 March 2011, the Government announced that the corporation tax rate would reduce to 26% with effect from April 2011 with three further annual 1% cuts to 23% by April 2014. On

29 March 2011, the Provisional Collection of Taxes Act 1968 substantively enacted the reduction to 26% on

1 April 2011. The Group has therefore re-measured the deferred tax assets and liabilities as at 31 March 2011 using the enacted rate of 26%. Other than the enacted change to 26%, the effects of the announced changes are not reflected in the financial statements for the year ended 31 March 2011 as they have not yet been enacted and the impact has not yet been estimated.

The impact of the rate reduction was to reduce deferred tax liabilities by £0.8m. This has been recognised within the Income Statement. Management cannot quantify the full impact of the further rate changes.

Deferred tax assets estimated at £15.4m (2010: £12.6m) have not been recognised due to a higher degree of uncertainty over both the amount and timing of the utilisation of the underlying tax losses and deductions, which amounted to £39.0m (2010: £26.8m). Under current tax legislation, there is no expiry date associated with the unprovided deferred tax assets.

There were no temporary differences associated with investment in subsidiaries and interests in joint ventures and associates for which deferred tax liabilities have not been recognised.

v) Total tax credit

The tax credit recognised in these financial statements was as follows:

	2011	2010
	£m	£m
Tax credit on loss as above	(13.4)	(2.1)
Tax charge (credit) on share of profit in joint ventures (note 11ic)	3.1	(0.6)
Tax charge on share of profit in associates (note 11iic)	-	0.1
Tax charge (credit) on income and expenses recognised in other
comprehensive income	2.1	(0.1)
	(8.2)	(2.7)

8 Earnings per share and net asset value per share

i) Earnings per share

			2011			2010
	Loss after tax	Weighted average number of shares	Earnings per share	Loss after tax	Weighted average number of shares	Earnings per share
	£m	m	pence	£m	m	pence
Basic and diluted	(34.7)	517.8	(6.7)	(8.2)	247.9	(3.3)

ii) Net asset value per share

			2011			2010
	Equity shareholders' funds	Number of shares	Net asset value per share	Equity shareholders' funds	Number of shares	Net asset value per share
	£m	m	pence	£m	m	pence
As per accounts	598.3	520.7		622.1	520.5
Less: Treasury
shares	-	(2.8)		-	(2.8)
Basic	598.3	517.9	116	622.1	517.7	120
Adjustments:
Employee share-
based payment
schemes	0.2	1.2		0.5	1.8
Diluted	598.5	519.1	115	622.6	519.5	120

Although not required under IFRS, net asset value per share is considered a key performance indicator in the sector in which the Group operates.

Apart from allocations which have vested but not been released, entitlements under the Executive Directors' Performance Share Plan have been excluded from the calculation in ii) above as the commitments relate to contingently issuable shares where the conditions had not been met at the balance sheet date.

9 Investment properties

The movements in investment and development properties were as follows:

		Investment properties				Development properties
		Freehold	Long leasehold	Short leasehold	Total	Freehold	Long leasehold	Total
		£m	£m	£m	£m	£m	£m	£m
Balance 31 March 2009		118.3	19.1	6.1	143.5	607.9	48.8	656.7
Reclassification of development
	properties	607.9	48.8	-	656.7	(607.9)	(48.8)	(656.7)
Transfer from trading properties		4.7	7.1	-	11.8	-	-	-
Additions		6.0	-	-	6.0	-	-	-
Interest capitalised		14.8	-	-	14.8	-	-	-
Disposals		(27.4)	-	-	(27.4)	-	-	-
Revaluation surplus (deficit)		8.8	(0.8)	(0.5)	7.5	-	-	-
Balance 31 March 2010		733.1	74.2	5.6	812.9	-	-	-
Additions		53.6	16.3	-	69.9	-	-	-
Interest capitalised		11.9	-	-	11.9	-	-	-
Disposals		(20.1)	(15.0)	-	(35.1)	-	-	-
Revaluation deficit		(16.6)	(37.3)	(0.1)	(54.0)	-	-	-
Balance 31 March 2011		761.9	38.2	5.5	805.6	-	-	-

Of the additions shown above, £37.2m (2010: £nil) related to the acquisition of properties, £32.7m (2010: £5.9m) related to construction on development sites and the balance to improvements to existing properties.

Under the cost model, the historical cost of the Group's investment properties as at 31 March 2011 was £691.1m (2010: £645.5m) and included capitalised interest of £73.4m (2010: £61.5m).

With effect from 1 April 2009, development properties were accounted for as investment properties.

The average rate used for capitalisation is shown in note 6.

All of the Group's properties were externally valued as at 31 March 2011 on the basis of market value by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors.

The Group's land holdings at Greenwich, Wembley, Silvertown and Dairy House Farm, Redhill have been valued by Savills Commercial Limited. Other properties in the United Kingdom have been valued by Jones Lang LaSalle Limited, CB Richard Ellis Limited and Christie + Co. The Group's property interests in the Channel Islands have been valued by Guy Gothard & Co.

A reconciliation of the valuations carried out by the external valuers to the carrying values shown in the Balance Sheet was as follows:

	2011	2010
	£m	£m
Investment properties at market value as determined by valuers	795.6	802.8
Adjustment in respect of rent-free periods and other tenant incentives	(1.2)	(1.1)
Adjustment in respect of minimum payment under head leases
separately included as a liability in the Balance Sheet	11.2	11.2
As shown in the Balance Sheet	805.6	812.9

The percentage of investment properties valued by each of the principal valuers was as follows:

				2011	2010
	Per valuers' reports	Adjustment for properties held in joint ventures and associates and as trading	Properties held as investment properties	Percentage valued by each valuer	Percentage valued by each valuer
	£m	£m	£m	%	%
Savills Commercial Limited	761.1	(104.7)	656.4	82.5	78.0
Jones Lang LaSalle Limited	112.1	(2.5)	109.6	13.8	21.0
Other valuers	29.6	-	29.6	3.7	1.0
	902.8	(107.2)	795.6	100.0	100.0

10 Owner-occupied properties, plant and equipment

	Long leasehold	Fixtures, fittings and equipment	Total
	£m	£m	£m
Cost:
Balance 31 March 2009	0.7	4.2	4.9
Additions	-	0.1	0.1
Disposals	(0.7)	-	(0.7)
Balance 31 March 2010	-	4.3	4.3
Additions	-	0.7	0.7
Balance 31 March 2011	-	5.0	5.0

Depreciation:
Balance 31 March 2009	-	(0.8)	(0.8)
Charge for year	-	(0.8)	(0.8)
Balance 31 March 2010	-	(1.6)	(1.6)
Charge for year	-	(0.8)	(0.8)
Balance 31 March 2011		(2.4)	(2.4)

Net book value:

31 March 2011	-	2.6	2.6
31 March 2010	-	2.7	2.7
31 March 2009	0.7	3.4	4.1

11 Non-current investments

i) Investment in joint ventures

a) The movement in investment in joint ventures was as follows:

	Total
	£m
Balance 31 March 2009	215.0
Additions	1.7
Amounts advanced	50.3
Amounts repaid	(3.0)
Reclassification of joint venture as subsidiary	(2.9)
Disposals	(52.0)
Distributions	(8.0)
Share of loss, net of tax	(0.2)
Share of other comprehensive income, net of tax	1.2
Balance 31 March 2010	202.1
Additions	2.7
Amounts advanced	44.0
Amounts repaid	(24.9)
Disposals	(15.5)
Distributions	(5.7)
Share of profit, net of tax	9.5
Share of other comprehensive income, net of tax	4.8
Balance 31 March 2011	217.0

b) The Group's interest in its joint ventures was as follows:

	% of share capital held	Country of incorporation	Joint venture partners
Quercus Healthcare Property Unit Trust (Quercus)	11.22	Channel Islands	Aviva Life & Pensions UK Limited
Greenwich Peninsula Regeneration Limited (GPRL)	49.00	United Kingdom	Lend Lease (Europe) Limited

Greenwich Peninsula N0204 Block B Unit Trust (N0204)	50.00	Channel Islands	Lend Lease N0204 Block B Limited
Greenwich Peninsula Retail LLP (Greenwich Retail)	50.00	United Kingdom	Lend Lease (Europe) Limited
iQ Unit Trust (iQ)	49.98	Channel Islands	Wellcome Trust Investment Limited Partnership
Quantum Unit Trust (Quantum)	50.00	Channel Islands	Aviva Life & Pensions UK Limited
Crest Nicholson BioRegional Quintain LLP (OneBrighton)	50.00	United Kingdom	Crest Nicholson (South East) Limited

Quintessential Homes (Wembley) LLP (Quintessential)	63.02	United Kingdom	Geninvest Limited Family Housing Development Company Limited

Quercus is accounted for as a joint venture as the Group has a 50% share of the general partner which controls the operation of the Unit Trust.

Quintessential is accounted for as a joint venture as the Group does not exercise control over substantive issues.

During the year, the Group disposed of its interests in Greenwich Peninsula N0204 Block A Unit Trust and Wembley City HIX Limited.

c) The Group's share of the results of its joint venture operations was as follows:

Summarised income statements for the year ended 31 March 2011	Quercus	GPRL	Greenwich Peninsula N0204	Greenwich Retail	iQ	Quantum	Quintessential	One Brighton	Other joint ventures	Group share in joint ventures
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Rental income	7.5	0.4	0.8	0.1	8.9	0.2	0.3	-	-	18.2
Income from sale of trading properties	-	5.8	-	-	-	-	3.9	6.9	-	16.6
Revenue	7.5	6.2	0.8	0.1	8.9	0.2	4.2	6.9	-	34.8
Cost of sales	-	(5.9)	(0.6)	-	(2.7)	(0.3)	(3.9)	(5.3)	-	(18.7)
Gross profit	7.5	0.3	0.2	0.1	6.2	(0.1)	0.3	1.6	-	16.1
Administrative expenses	(1.4)	(0.2)	(0.1)	-	(1.2)	-	-	(0.1)	-	(3.0)
Operating profit (loss)	6.1	0.1	0.1	0.1	5.0	(0.1)	0.3	1.5	-	13.1
Loss from sale of non-current assets	(0.1)	-	-	-	-	-	-	-	-	(0.1)
Surplus (deficit) revaluation of investment
properties	1.7	-	(0.3)	(0.2)	9.4	(0.1)	-	-	(1.6)	8.9
Profit (loss) before net finance expenses
and tax	7.7	0.1	(0.2)	(0.1)	14.4	(0.2)	0.3	1.5	(1.6)	21.9
Finance expenses	(1.8)	-	(4.5)	(0.1)	(3.1)	-	-	-	-	(9.5)
Finance income	-	-	-	-	-	0.2	-	-	-	0.2
Profit (loss) before tax	5.9	0.1	(4.7)	(0.2)	11.3	-	0.3	1.5	(1.6)	12.6
Tax	1.4	0.1	(1.2)	-	(3.8)	(0.1)	-	-	0.5	(3.1)
Profit (loss) after tax	7.3	0.2	(5.9)	(0.2)	7.5	(0.1)	0.3	1.5	(1.1)	9.5

Share of other comprehensive income:
Effective portion of changes in
fair value of cashflow hedges, net of tax	1.0	-	0.4	-	1.8	-	-	-	-	3.2
Recycling of mark-to-market adjustment	-	-	2.3	-	(0.7)	-	-	-	-	1.6
	1.0	-	2.7	-	1.1	-	-	-	-	4.8

Summarised balance sheets as at 31 March 2011	Quercus	GPRL	Greenwich Peninsula N0204	Greenwich Retail	iQ	Quantum	Quintessential	One Brighton	Other joint ventures	Group share in joint ventures
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Investment properties	79.6	-	17.2	4.3	154.4	2.6	-	-	-	258.1
Investment in joint ventures	-	1.2	-	-	-	-	-	-	-	1.2
Trading properties	0.8	56.0	-	-	-	-	7.9	0.7	-	65.4
Deferred tax asset	-	-	3.4	-	4.7	0.4	-	-	-	8.5
Other assets	5.2	5.3	0.7	0.5	4.8	9.1	0.4	0.3	0.2	26.5
Gross assets	85.6	62.5	21.3	4.8	163.9	12.1	8.3	1.0	0.2	359.7
Current liabilities:
Trade and other payables	(3.2)	(2.6)	(1.3)	(0.9)	(27.1)	(2.7)	(4.8)	(0.3)	-	(42.9)
Current tax liability	-	(0.1)	-	-	-	-	-	-	-	(0.1)
Non-current liabilities:
Bank loans and other
borrowings	(30.0)	-	-	-	(67.3)	-	-	-	-	(97.3)
Other liabilities	(0.6)	-	-	-	(1.8)	-	-	-	-	(2.4)
Net external assets	51.8	59.8	20.0	3.9	67.7	9.4	3.5	0.7	0.2	217.0

Represented by:
Capital	51.8	0.1	(9.8)	1.8	67.7	9.4	3.5	0.7	0.2	125.4
Loans	-	59.7	29.8	2.1	-	-	-	-	-	91.6
Total investment	51.8	59.8	20.0	3.9	67.7	9.4	3.5	0.7	0.2	217.0

Summarised income statements for the year ended 31 March 2010	Quercus	GPRL	Greenwich Peninsula N0204		iQ	Quantum	Quintessential	One Brighton	Other joint ventures	Group share in joint ventures
	£m	£m	£m		£m	£m	£m	£m	£m	£m
Rental income	11.8	0.4	2.2		6.2	0.2	0.2	-	-	21.0
Income from sale of trading properties	-	-	-		-	-	3.1	0.4	-	3.5
Other income	-	14.5	-		-	-	-	-	0.1	14.6
Revenue	11.8	14.9	2.2		6.2	0.2	3.3	0.4	0.1	39.1
Cost of sales	-	(14.5)		(0.3)	(2.4)	(0.1)	(3.2)	(0.3)	0.1	(20.7)
Gross profit	11.8	0.4	1.9		3.8	0.1	0.1	0.1	0.2	18.4
Administrative expenses	(3.2)	(0.2)	(0.1)		(1.1)	(0.1)	-	-	(0.4)	(5.1)
Operating profit (loss)	8.6	0.2	1.8		2.7	-	0.1	0.1	(0.2)	13.3
Loss from sale of non-current assets	(2.1)	-	-		-	-	-	-	-	(2.1)
Share of profit from joint ventures	-	-	-		-	-	-	-	0.7	0.7
(Deficit) surplus on revaluation of investment
properties	(5.9)	(3.9)	10.0		(1.5)	(0.1)	-	-	0.3	(1.1)
Profit (loss) before net finance expenses
and tax	0.6	(3.7)	11.8		1.2	(0.1)	0.1	0.1	0.8	10.8
Finance expenses	(3.2)	-	(1.7)		(5.5)	-	-	-	(1.5)	(11.9)
Finance income	0.1	-	-		-	0.2	-	-	-	0.3
(Loss) profit before tax	(2.5)	(3.7)	10.1		(4.3)	0.1	0.1	0.1	(0.7)	(0.8)
Tax	(1.4)	4.2	(2.9)		1.0	-	-	-	(0.3)	0.6
(Loss) profit after tax	(3.9)	0.5	7.2		(3.3)	0.1	0.1	0.1	(1.0)	(0.2)

Share of other comprehensive income:
Effective portion of changes in fair value of
cashflow hedges, net of tax	0.1	-	0.2		(0.4)	-	-	-	-	(0.1)
Recycling of mark-to-market adjustment	-	-	-		1.3	-	-	-	-	1.3
	0.1	-	0.2		0.9	-	-	-	-	1.2

Summarised balance sheets as at 31 March 2010	Quercus	GPRL	Greenwich Peninsula N0204		iQ	Quantum	Quintessential	One Brighton	Other joint ventures	Group share in joint ventures
	£m	£m	£m		£m	£m	£m	£m	£m	£m
Investment properties	93.5	-	65.2		104.6	3.4	-	-	6.0	272.7
Investment in joint ventures	-	1.2	-		-	-	-	-	-	1.2
Trading properties	1.9	66.4	-		-	-	9.7	5.8	-	83.8
Deferred tax asset	-	-	4.6		8.5	0.4	-	-	-	13.5
Other assets	9.4	5.9	2.2		3.5	2.2	0.5	0.2	1.7	25.6
Gross assets	104.8	73.5		72.0	116.6	6.0	10.2	6.0	7.7	396.8
Current liabilities:
Trade and other payables	(4.3)	(18.0)	(5.6)		(7.6)	(0.2)	(4.5)	(0.6)	-	(40.8)
Current tax liability	-	(0.2)	-		-	-	-	-	-	(0.2)
Non-current liabilities:
Bank loans and other borrowings	(40.3)	-	(45.8)		(58.8)	-	-	-	-	(144.9)
Deferred tax liability	(1.4)	-	-		-	-	-	-	(0.5)	(1.9)
Other liabilities	(1.6)	-	(1.1)		(4.2)	-	-	-	-	(6.9)
Net external assets	57.2	55.3	19.5		46.0	5.8	5.7	5.4	7.2	202.1

Represented by:
Capital	57.2	0.3	(11.8)		46.0	5.8	5.7	5.4	1.5	110.1
Loans	-	55.0	31.3		-	-	-	-	5.7	92.0
Total investment	57.2	55.3	19.5		46.0	5.8	5.7	5.4	7.2	202.1

Details of the floating rate debt within Quercus and iQ and of interest rate swaps entered into by each of these are given in notes 16 and 20iii below.

The valuation of properties held with Quercus as at 31 March 2011 has been carried out by Christie + Co on the basis of market value and in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. Properties within the Greenwich joint ventures were valued by Savills Commercial Limited and within the iQ Unit Trust and Quantum Unit Trust by CB Richard Ellis Limited.

The Quercus and Quantum joint ventures have accounting periods ending 31 December and OneBrighton 31 October. The Group's share of their results for the remainder of the financial year has been based on their management accounts

d) The summarised financial statements of the Group's principal joint venture operations were as follows:

	2011	2010	2011	2010	2011	2010	2011	2011	2010
	Quercus	Quercus	GPRL	GPRL	Greenwich Peninsula N0204	Greenwich Peninsula N0204	Greenwich Retail	iQ	iQ
	£m	£m	£m	£m	£m	£m	£m	£m	£m
Income statements
Revenue	54.1	59.1	12.6	30.5	1.6	4.5	0.2	17.8	12.4
Expenses	(11.8)	(71.2)	(12.4)	(38.0)	(10.9)	15.7	(0.6)	4.9	(20.9)
Profit (loss) before tax	42.3	(12.1)	0.2	(7.5)	(9.3)	20.2	(0.4)	22.7	(8.5)

Balance sheets
Non-current assets	707.1	625.9	2.4	2.4	41.2	139.5	8.6	318.4	218.7
Current assets	56.2	75.9	125.1	147.5	1.5	4.4	1.0	9.4	7.0
Total assets	763.3	701.8	127.5	149.9	42.7	143.9	9.6	327.8	225.7
Current liabilities	(29.1)	(28.9)	(5.4)	(37.1)	(2.7)	(11.2)	(1.8)	(54.1)	(15.3)
Non-current liabilities	(272.9)	(290.0)	-	-	-	(93.7)	-	(138.3)	(118.4)
Net external assets	461.3	382.9	122.1	112.8	40.0	39.0	7.8	135.4	92.0

Percentage share held by the Group	11.22%	14.94%	49.00%	49.00%	50.00%	50.00%	50.00%	49.98%	49.98%

Group share of net external assets	51.8	57.2	59.8	55.3	20.0	19.5	3.9	67.7	46.0

	2011 Quantum	2010 Quantum	2011 Quintessential	2010 Quintessential	2011 OneBrighton	2011 OneBrighton
	£m	£m	£m	£m	£m	£m
Income statements
Revenue	0.7	0.7	8.4	6.6	13.8	0.7
Expenses	(0.7)	(0.6)	(7.8)	(6.5)	(10.8)	(0.6)
Profit before tax	-	0.1	0.6	0.1	3.0	0.1

Balance sheets
Non-current assets	5.9	7.6	-	-	-	-
Current assets	18.2	4.5	13.1	20.4	1.9	11.9
Total assets	24.1	12.1	13.1	20.4	1.9	11.9
Current liabilities	(5.3)	(0.5)	(7.5)	(9.0)	(0.5)	(1.0)
Net external assets	18.8	11.6	5.6	11.4	1.4	10.9

Percentage share held by the Group	50.00%	50.00%	63.02%	50.02%	50.00%	50.00%

Group share of net external assets	9.4	5.8	3.5	5.7	0.7	5.4

ii) Investment in associates

a) The movement in the investment in associates was as follows:

			£m
Balance 31 March 2009			1.3
Share of profit, net of tax			0.3
Balance 31 March 2010			1.6
Share of loss, net of tax			(0.1)
Balance 31 March 2011			1.5

b) The Group's interest in its associate undertakings was as follows:

	% of equity held	Other members
Aqua Trust	50	Aviva Annuity UK Limited
Albemarle Retail Properties LLP	28	Various

c) The Group's share of the summarised income statement for Aqua Trust for the year ended 31 March 2011 was as follows:

	2011 £m	2010 £m
(Deficit) surplus on revaluation of investment properties	(0.1)	0.4
Deferred tax charge for the year	-	(0.1)
(Loss) profit after tax	(0.1)	0.3

The Group's share of profit from Albemarle Retail Properties LLP for the year was negligible (2010: £nil).

d) The Group's share of the summarised balance sheet for Aqua Trust as at 31 March 2011 was as follows:

	2011 £m	2010 £m
Investment properties	2.0	2.1
Deferred tax liability	(0.5)	(0.5)
Net external assets	1.5	1.6

Represented by:

Capital

1.5

1.6

The investment properties in Aqua Trust have been valued as at 31 March 2011 by Jones Lang LaSalle Limited.

The Group's share of the net assets of Albemarle Retail Properties LLP as at 31 March 2011 was negligible (2010: £nil).

iii) Other non-current investments

The movement in other non-current investments, all of which have been classified as available for sale, was as follows:

			£m
Balance 31 March 2009			10.8
Disposals			(6.6)
Impairment			(0.2)
Revaluation loss			(0.1)
Balance 31 March 2010			3.9
Revaluation loss			(0.3)
Balance 31 March 2011			3.6

The remaining other non-current investment as at 31 March 2011 is shown at the value at which it is quoted on AIM.

12 Non-current receivables

During the year, the Group granted two unsecured loans totalling £10.7m to an associate, Albemarle Retail Properties LLP, which carry a coupon of 10% per annum and the principal of which will be repaid together with an additional rolled-up coupon of 10% out of the proceeds from the sale of the associate's properties. The receivables are shown in the Balance Sheet at amortised cost.

13 Trading properties

As at 31 March 2011, properties held for resale of £23.9m (2010: £28.1m) are shown at the lower of cost and net realisable value and include capitalised interest of £1.3m (2010: £2.0m).

During the year, an impairment of £0.4m (2010: £8.1m) was recognised in respect of one of the Group's trading properties.

Also, during the year, the Group sold trading properties with book values of £7.6m (2010: £11.0m).

As at 31 March 2011, the directors have assessed that the net realisable value of the Group's trading properties exceeds in their carrying value.

14 Trade and other receivables

	2011 £m	2010 £m
Trade receivables	10.5	9.7
Other receivables	4.6	3.5
Trade and other receivables	15.1	13.2
Prepayments and accrued income	4.3	2.7
	19.4	15.9

The ageing of trade and other receivables was as follows:

	2011	2011	2011	2010	2010	2010
	Gross	Impairment	Net	Gross	Impairment	Net
	£m	£m	£m	£m	£m	£m
Not past due	10.6	-	10.6	8.8	-	8.8
Past due less than one month	3.0	-	3.0	3.0	-	3.0
Past due one to three months	0.6	-	0.6	0.1	-	0.1
Past due three to six months	0.4	(0.1)	0.3	1.0	(0.2)	0.8
Past due over six months	1.9	(1.3)	0.6	1.5	(1.0)	0.5
	16.5	(1.4)	15.1	14.4	(1.2)	13.2

The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows:

				£m
Balance 1 April 2009				0.8
Amounts written off in year				(0.4)
Increase in allowance				0.8
Balance 31 March 2010				1.2
Amounts written off in year				(0.3)
Increase in allowance				0.5
Balance 31 March 2011				1.4

15 Current liabilities: trade and other payables

	2011 £m	2010 £m
Trade payables	5.4	4.7
Other payables	4.3	4.2
Accruals	21.6	18.0
Interest rate swaps	5.2	10.2
	36.5	37.1

16 Bank loans and other borrowings

	2011 £m	2010 £m
Current liabilities:
Bank loans	1.7	1.6
10% First Mortgage Debenture Stock 2011 (secured)	2.0	-
	3.7	1.6
Non-current liabilities:
Bank loans	436.2	399.4
10% First Mortgage Debenture Stock 2011 (secured)	-	2.1
	436.2	401.5
Amortised borrowing costs	(3.5)	(4.5)
	432.7	397.0

Total bank loans and other borrowings	439.9	403.1
Amortised borrowings costs	(3.5)	(4.5)
	436.4	398.6

The loans are secured by floating charges over assets owned by subsidiary undertakings.

The 10% First Mortgage Debenture Stock 2011 issued by Estates Property Investment Company Limited is secured by a cash deposit of £3.4m and has a redemption value of £2.0m.

The maturity profile of the Group's debt was as follows:

	2011			2010	2011	2010
	Bank loans and overdrafts	Other loans	Total debt	Total debt	Undrawn facilities	Undrawn facilities
	£m	£m	£m	£m	£m	£m
Within one year	1.7	2.0	3.7	1.6	25.0	15.0
From one to two years	91.7	-	91.7	3.7	18.9	-
From two to five years	342.7	-	342.7	396.0	146.6	248.0
After five years	1.8	-	1.8	1.8	-	-
	437.9	2.0	439.9	403.1	190.5	263.0

After taking account of interest rate swap arrangements, the risk profile of the Group's borrowings was as follows:

	2011			2010
	Fixed or capped	Floating	Total debt	Fixed or capped	Floating	Total debt
	£m	£m	£m	£m	£m	£m
Sterling	439.9	-	439.9	403.1	-	403.1

The interest rate profile of the Group's fixed or capped rate debt was as follows:

Percent	2011 £m	2010 £m
3.0 - 4.0	150.0	-
4.0 - 5.0	5.5	5.5
5.0 - 6.0	28.0	28.0
6.0 - 7.0	175.0	350.0
7.0 - 8.0	75.0	17.5
8.0 - 9.0	4.4	-
9.0 -10.0	2.0	2.1
	439.9	403.1

The weighted average rate and the weighted average period of the Group's fixed rate debt were as follows:

2011

2010

2011

years

2010

years

Sterling

5.6

6.2

The maturity profile of the Group's share of floating rate debt held within its joint ventures as at 31 March 2011 was as follows:

	2011 £m	2010 £m
From one to two years	67.3	-
From two to five years	30.0	144.9
	97.3	144.9

17 Obligations under finance leases

The Group has entered into a number of leases in relation to its investment properties, the carrying amounts of which are disclosed in note 9.

These leases are for fixed terms and subject to regular rent reviews. They contain no material provisions for contingent rents, renewal or purchase options and escalation clauses nor any restrictions outside of the normal lease terms.

Finance lease obligations in respect of rents payable on leasehold properties were payable as follows:

	2011	2011	2011	2010	2010	2010
	Minimum lease payments	Interest	Present value of minimum lease payments	Minimum lease payments	Interest	Present value of minimum lease payments
	£m	£m	£m	£m	£m	£m
Within one year	0.8	(0.8)	-	0.8	(0.8)	-
From one to two years	0.8	(0.8)	-	0.8	(0.8)	-
From two to five years	2.3	(2.3)	-	2.3	(2.3)	-
From five to 25 years	15.5	(15.0)	0.5	15.5	(15.0)	0.5
After 25 years	36.2	(25.6)	10.6	36.9	(26.3)	10.6
	55.6	(44.5)	11.1	56.3	(45.2)	11.1

18 Non-current liabilities: other payables

	2011 £m	2010 £m
Interest rate swaps	6.8	19.0
Other creditors	1.3	1.4
	8.1	20.4

19 Financial assets and liabilities

The Group is exposed to the following types of risk from its use of financial instruments:

Credit risk

Liquidity risk

Market risk

This note presents information about the nature of the Group's exposure, its objectives, policies and processes for measuring and managing risk and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The Board has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board has established a Risk Committee which meets four times a year and is responsible for developing and monitoring the Group's risk management policies. The Committee reports regularly to the Board in relation to its activities.

The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group's Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by Internal Audit. This function was outsourced during the year to PwC, having previously been carried out by Grant Thornton. Internal Audit undertakes both regular and ad hoc reviews of risk management control and procedures, the results of which are reported to the Audit Committee.

Credit risk

The Group's exposure to credit risk arises from potential financial loss if a tenant or counterparty to a financial instrument fails to meet its contractual obligations. It relates principally to the Group's receivables from tenants and other third parties. The credit rating of counterparties to financial instruments is kept under review, particularly in the light of the current economic climate. Given that the majority of positions are significantly out of the money, this does not represent a major risk at the current time.

Non-current and current receivables

The Group's activities are focused exclusively in Great Britain and the Channel Islands and within this geographical area, its exposure to credit risk arising from trade and other receivables is influenced by the individual characteristics of each tenant and debtor. As at 31 March 2011, the Group's 20 largest tenants within its directly held properties and its joint ventures accounted for 33.3% (2010: 39.2%) of the passing rents from these properties.

The Group operates a policy whereby the creditworthiness of each tenant is assessed prior to lease or pre-lease terms being agreed. The process includes seeking external ratings where available and reviewing financial information in the public domain. In certain cases, the Group will require collateral to support these lease obligations. This usually takes the form of a rent deposit, parent company guarantee or a bank guarantee.

Rent collection is outsourced to managing agents who report regularly on payment performance and provide the Group with intelligence on the continuing financial viability of tenants. Arrears are monitored internally on a weekly basis by the internal property management teams and a strategy for dealing with significant potential defaults is presented on a timely basis by the Head of Investment Portfolio or the property managers of the Group's various joint ventures to the weekly meeting of the executive directors.

Outstanding tenant balances are reviewed on a quarterly basis for impairment with an allowance of £0.5m being made in the current year (2010: £0.8m) as shown in note 4.

In relation to iQ, the student accommodation fund in which the Group has a 49.98% share, rents are either collected directly from universities or are underpinned by deposits received in advance from students.

The Board has assessed the recoverability of the unsecured non-current receivables, the principal of which are repayable out of the proceeds from property sales and has concluded that the risk to current property values in the Albemarle portfolio is minimal.

The Group's maximum exposure to the credit risk arising from non-current and current receivables amounts to £25.8m (2010: £13.2m).

The Board does not believe there is a significant credit risk in respect of those financial assets that are not yet due and not impaired.

Guarantees

Where Group companies enter into financial guarantee contracts to guarantee the indebtedness or obligations of other companies within the Group, the guarantee contract is treated as a contingent liability until such time as it becomes probable that the guarantor will be required to make a payment under the guarantee. In the current and comparative periods, such guarantees did not have any impact on the financial statements.

In respect of iQ, if the loan to value covenant of 65% is not met, or the interest cover of 1.25x is not met, then the Group would be required to inject equity alongside its partner, Wellcome, to restore the covenants.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as these fall due.

Cash levels are monitored to ensure sufficient resources are available to meet the Group's operational requirements. The Group has a £20m working capital facility to manage day to day cash movements. Surplus cash is used to reduce debt.

The Group actively pursues a policy of recycling cash through the forward funding of developments, land sales and the introduction of joint venture partners in order to minimise borrowing.

The Group's policy is to finance its activities using equity and medium term debt, the proportions depending on the profile of the operational and financial risks to the business. The Group generally borrows on an unsecured basis on the strength of its covenant but with floating charges over the assets of its subsidiaries.

The Group's bilateral banking facilities carry an interest rate of LIBOR plus an average margin of 1.5%. The key covenants negotiated with the banks included:

i) interest cover of 1.25x after taking account of capitalised borrowing costs but excluding fair value movements on derivative financial instruments and

ii) gearing of 110% based on net assets as shown in the Group's balance sheet adjusted for deferred tax on revaluation surpluses and fair value adjustments on derivative financial instruments.

During the year, the Group agreed with the Lloyds Banking Group, its largest lending bank, to create a series of options to be exercised by the bank to extend the maturity date for its two facilities totaling £275m under a structured transaction, which links maturity extension to April 2016 to a partial amortisation of £75m over the period. The margin on both facilities has also increased to 1.7%.

Also, during the year, HSBC agreed to a series of options for the bank to extend the Group's £100m facility to April 2016 in return for partial amortisation of £30m over the period and an increase in margin to 1.7%.

Following the year end, the Co-operative Bank agreed to extend its £25m facility to April 2016 at a margin of 2.0%.

Market risk

In relation to the Group, market risk arises mainly from the impact that changes in interest rates might have on the Group's cost of borrowing. Excluding amortisation of arrangement fees, the weighted average rate of interest relating to the Group's debt as at 31 March 2011 was 4.5% (2010: 6.2%).

The Group does not speculate in treasury products but only uses these to limit the impact of potential interest rate fluctuations. The majority of the borrowings are at floating rates of interest and financial instruments are used to hedge the exposure to interest rate fluctuations. As at 31 March 2011, 79.9% (2010: 82.2%) of the Group's net debt was fixed or covered by interest rate swaps. Any residual risk is hedged by the interest rate caps held by the Group. Further information on the Group's financial instruments is given in note 20.

During the year, a £100m interest rate swap with a swap rate of 3.0% matured and the Group purchased £100m of forward start caps at a strike rate of 3.4% which will have effect between 2013 and 2016.

Also, during the year, the Group re-set £150m of swaps with an average swap rate of 5.0% to the prevailing market rate of 1.7% for a payment of £14.4m. The Group obtained the agreement of the banks providing its bilateral facilities to exclude this payment from the interest charge in calculating the interest cover ratio.

Following the year end, the Group re-priced another £150m of swaps with an average swap rate of 5.0% to the market rate of 1.9% for a £12.4m payment which with the agreement of its banks will also be excluded from the interest cover calculation.

As at the year end, the fair values of the Group's outstanding financial instruments, as shown in note 20, have been estimated by JC Rathbone Associates Limited, financial risk consultants, by calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined by IFRS 7, 'Financial Instruments: Disclosures'. All other financial liabilities and assets are deemed to be Level 3.

The Group is also exposed to market rate risk through the activities of its joint ventures, which borrow at variable rates and use financial instruments to safeguard against market movements in rates. This is disclosed in note 20 in respect of the Group's interests in Quercus and iQ.

Capital management

The Board's policy is to maintain a strong capital base with a view to underpinning investor, creditor and market confidence and sustaining the future development of the business.

To this end, the Board monitors the Group's performance in terms of its main financial indicator, total return, at both a corporate and individual asset level, and sets internal guidelines for interest cover and gearing. The Board has set a minimum target for interest cover of 1.5x as against a cover required under banking covenants of 1.25x and a maximum level of gearing of 90% as against 110% under banking covenants. The executive directors monitor the Group's current and projected financial position against these guidelines.

The Board receives ongoing reports on the demographic spread of shareholders and maintains regular contact with the principal investors and other stakeholders in order to discuss performance and communicate strategy.

In the interest of the shareholders, the Board has pursued a progressive dividend policy, but in the current economic climate, has deferred the declaration of dividends until the business becomes cash positive again.

The Board also encourages employees to participate in the share ownership structure through savings investment plans, the share-based element of bonus arrangements and the various performance related employee share option schemes, all of which it considers best aligns the interest of employees with those of the Group and its shareholders.

From time to time, the Group purchases its own shares in the market. Such purchases can take the form of treasury shares with the aim of using these to cover entitlements under bonus arrangements and option schemes but also for cancellation on occasions when the Board considers that this course of action would enhance the value of the Group for the shareholders. No shares were purchased during the financial year or the comparative year.

There were no changes in the Group's approach to capital management during the financial year or the comparative year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements other than those referred to above in connection with the Group's financing arrangements.

i) Sensitivity analysis

As at 31 March 2011, it is estimated that an increase of 50 basis points in interest rates would have increased the Group's loss before tax by £0.4m (2010: £0.5m) and that a decrease of 50 basis points would have decreased the Group's loss before tax by £0.4m (2010: £0.5m). There would have been no effect on amounts recognised directly in other comprehensive income.

These estimates have been compiled by applying the interest rate change to the variable rate borrowings net of interest rate swaps in existence during the year.

The impact on the fair value of the Group's interest rate swaps and caps in existence as at 31 March 2011 of an increase in 50 basis points in interest rates would have been to reduce the loss before tax by £1.1m

(2010: £0.1m) with a credit directly to other comprehensive income of £3.5m (2010: £5.0m). A decrease in interest rates by 50 basis points would have increased the Group's loss before tax by £0.9m (2010: £0.1m) with a debit directly to other comprehensive income of £3.5m (2010: £5.0m).

ii) Financial assets

The currencies in which the Group's cash and cash equivalents were held were as follows:

	2011 £m	2010 £m
Sterling	19.6	46.8
United States dollars	0.2	0.2
Euros	-	0.2
	19.8	47.2

These assets principally comprise deposits placed with banks at market rates for maturities of not more than

one month, at an average rate of 1.3% (2010: 1.3%). Such deposits are considered to be cash equivalents.

In the comparative year, the Sterling balance included £23.8m which was held by solicitors to the order

of the Group in relation to the purchase of a property completed after the balance sheet date. There was

no equivalent balance in the current year.

iii) Fair value of financial instruments

As at 31 March 2011, the fair values of the Group's financial assets and liabilities were equal to their book

values with the exception of non-current liabilities: bank loans and other borrowings which have a negative

fair value adjustment of £0.8m (2010: £1.0m) as assessed by JC Rathbone Associates Limited.

iv) Maturity of financial liabilities

As at 31 March 2011	Bank loans	10% first mortgage debenture stock	Interest	Financial liability cashflows
	£m	£m	£m	£m
Within one year	1.7	2.0	18.1	21.8
From one to two years	91.7	-	17.6	109.3
From two to five years	342.7	-	13.5	356.2
From five to 25 years	1.8	-	0.3	2.1
After 25 years	-	-	-	-
	437.9	2.0	49.5	489.4

	Financial liability cashflows	Trade and other payables	Interest rate swaps	Obligations under finance leases	Non-current liabilities: Other creditors	Total
	£m	£m	£m	£m	£m	£m
Within one year	21.8	31.3	5.2	0.8	-	59.1
From one to two years	109.3	-	4.1	0.8	-	114.2
From two to five years	356.2	-	2.7	2.3	1.3	362.5
From five to 25 years	2.1	-	-	15.5	-	17.6
After 25 years	-	-	-	36.2	-	36.2
	489.4	31.3	12.0	55.6	1.3	589.6

As at 31 March 2010	Bank loans	10% first mortgage debenture stock	Interest	Financial liability cashflows
	£m	£m	£m	£m
Within one year	1.6	-	22.5	24.1
From one to two years	1.6	2.1	22.0	25.7
From two to five years	396.0	-	32.9	428.9
From five to 25 years	1.8	-	0.3	2.1
After 25 years	-	-	-	-
	401.0	2.1	77.7	480.8

iv) Maturity of financial liabilities continued

	Financial liability cashflows	Trade and other payables	Interest rate swaps	Obligations under finance leases	Non-current liabilities: Other creditors	Total
	£m	£m	£m	£m	£m	£m
Within one year	24.1	26.9	10.2	0.8	-	62.0
From one to two years	25.7	-	9.9	0.8	-	36.4
From two to five years	428.9	-	9.1	2.3	1.4	441.7
From five to 25 years	2.1	-	-	15.5	-	17.6
After 25 years	-	-	-	36.9	-	36.9
	480.8	26.9	29.2	56.3	1.4	594.6

20 Financial instruments

i) Designated cashflow hedges

The Group's interest swaps as at 31 March 2011 were classified as cashflow hedges with movements in

fair value as follows:

Amount	Maturity date	Swap rate	2011 Fair value adjustments Effective	2011 Fair value adjustments Ineffective	2010 Fair value adjustments Effective	2010 Fair value adjustments Ineffective
£m		%	£m	£m	£m	£m
100.0	05.05.10	3.02	-	0.2	0.4	0.9
75.0	22.04.13	1.74	(0.4)	-	(0.1)	-
75.0	22.04.13	1.74	(0.4)	-	(0.1)	-
50.0	03.01.14	4.94	0.9	-	(0.2)	-
50.0	03.01.14	4.97	1.1	-	(0.2)	-
50.0	03.01.14	5.00	1.1	-	(0.1)	-
400.0			2.3	0.2	(0.3)	0.9

ii) Interest rate caps

As at 31 March 2011, the profile of the Group's interest rate caps, which were not designated as

hedging instruments with therefore all fair value movements taken to the Income Statement, was as follows:

				2011	2010
Amount	Start date	Maturity date	Strike rate	Fair value adjustments	Fair value adjustments
£m			%	£m	£m
25.0		03.01.13	5.50	(0.1)	-
25.0		03.01.13	5.75	(0.1)	(0.1)
150.0		22.04.13	7.50	(0.2)	-
50.0		22.07.13	6.50	(0.1)	-
100.0	22.04.13	22.04.16	3.40	0.8	-
350.0				0.3	(0.1)

iii) Joint venture financial instruments continued

As at 31 March 2011, the Group's share of fair value adjustments on interest rate swaps held within Quercus,

a joint venture in which the Group has an 11.22% interest (2010: 14.94%), was as follows:

			2011	2010
Amount	Maturity date	Swap rate	Group share reflected in other comprehensive income	Group share reflected in other comprehensive income
£m		%	£m	£m
50.0	22.10.09	4.84	-	0.1
25.0	25.11.09	5.02	-	0.1
25.0	24.10.11	2.95	0.1	(0.1)
30.0	23.07.12	3.10	0.1	(0.1)
80.0	22.01.13	5.11	0.4	0.1
100.0	22.01.13	4.99	0.4	0.1
310.0			1.0	0.2

As at 31 March 2011, the following interest rate caps and collars were held within iQ, a joint venture in which

the Group has a 49.98% interest (2010: 49.98%):

				2011	2011	2010	2010
Amount	Maturity date	Strike rate Floor	Strike rate Cap	Group share reflected in Income Statement	Group share reflected in other comprehensive income	Group share reflected in Income Statement	Group share reflected in other comprehensive income
£m		%	%	£m	£m	£m	£m
31.5	31.12.12	5.28	5.75	-	0.5	-	(0.1)
63.0	31.12.12	5.08	6.00	-	0.9	(0.3)	(0.2)
31.5	04.10.12	4.89	6.25	-	0.4	-	(0.1)
63.0	04.10.12	4.69	6.50	0.8	-	(0.3)	-
189.0				0.8	1.8	(0.6)	(0.4)

21 Property revaluation movements

The revaluation movements on the Group's investment properties whether held directly or through joint ventures and the associates were as follows:

	2011	2010
	£m	£m
(Deficit) surplus on revaluation of directly held investment properties	(54.0)	7.5
Surplus (deficit) on revaluation of investment properties in joint ventures	8.9	(1.1)
(Deficit) surplus on revaluation of investment properties in associates	(0.1)	0.4
	(45.2)	6.8

22 Note to Consolidated Statement of Changes in Equity

The analysis of other comprehensive income was as follows:

	2011	2011	2011	2011	2010	2010	2010	2010
	Revaluation reserve	Cashflow hedge reserve	Translation reserve	Equity shareholders' funds	Revaluation reserve	Cashflow hedge reserve	Translation reserve	Equity shareholders' funds
	£m	£m	£m	£m	£m	£m	£m	£m
Foreign currency translation differences	-	-	(0.1)	(0.1)	-	-	-	-
Deficit on revaluation of other non-current
investments	(0.3)	-	-	(0.3)	(0.1)	-	-	(0.1)
Effective portion of changes in fair value of
cashflow hedges, net of recycling	-	2.3	-	2.3	-	(0.3)	-	(0.3)
Recycling of fair value adjustment on
cashflow hedges	-	5.3	-	5.3	-	-	-	-
Recycling of fair value adjustment on
disposal of interest in joint venture	-	0.4	-	0.4	-	-	-	-
Share of other comprehensive income in joint
ventures, net of tax	-	4.8	-	4.8	-	1.2	-	1.2
Tax on other comprehensive income	-	(2.1)	-	(2.1)	-	0.1	-	0.1
	(0.3)	10.7	(0.1)	10.3	(0.1)	1.0	-	0.9

The movement in the Group's other capital reserves was as follows:

Capital

redemption

reserve

£m

Merger

reserve

£m

Total other

capital

reserves

£m

Balance 31 March 2010 and 31 March 2011

2.1

106.0

108.1

As at 31 March 2011, ESOP Trusts held 2.8m (2010: 2.8m) shares in the Company which had been purchased in the market at a cost of £9.6m (2010: £9.6m). The purpose of the Trusts is to acquire and hold shares which will be transferred to employees to meet future obligations under the Group employee share-based payment schemes as set out in note 23 and share-based bonus entitlements. As at 31 March 2011, these shares had a market value of £1.2m (2010: £1.6m). The Quintain Group Employee Benefit Trust has waived the right to receive dividends.

Capital redemption reserve

The capital redemption reserve reflects the nominal value of shares purchased by the Group for cancellation.

Merger reserve

The merger reserve has arisen following corporate acquisitions where the Group's equity has formed all or part of the consideration and represents the premium on the shares issued less costs.

Cashflow hedge reserve

The cashflow hedge reserve comprises the effective portion of the cumulative net change in the cashflow hedging instruments.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of the Group's foreign subsidiaries.

23 Share capital

	Number of shares m	Nominal value £m
Allotted, called up and fully paid:
In issue as at 31 March 2009	130.0	32.5
Issue of shares under share-based payment schemes at 25p per share	0.1	-
Issue of shares at 80.6p per share	0.2	0.1
Rights issue at 49p per share	390.2	97.5
In issue as at 31 March 2010	520.5	130.1
Issue of shares under share-based payment schemes at 25p per share	0.2	0.1
In issue as at 31 March 2011	520.7	130.2

As at 31 March 2011, share capital included 2.8m (2010: 2.8m) shares held by ESOP Trusts. These shares had a nominal value of £0.7m (2010: £0.7m).

As at 31 March 2011, the following commitments to issue shares to employees under various share-based payment schemes remained outstanding:

Date of grant	Number of shares	Exercise price per share pence	Exercise period	Exercise period
			from		to
Executive Directors' Performance Share Plan (LTIP)
26.09.03	1,590,000	-	26.09.12		27.09.12
12.07.05	795,000	-	12.07.14		13.07.14
	2,385,000
1996 Approved Executive Share Option Scheme (1996 Approved)
17.06.02	27,651	127.8	17.06.05		16.06.12
13.06.03	125,258	135.4	13.06.06		12.06.13
13.09.04	66,266	218.0	13.09.07		12.09.14
	219,175
2004 Unapproved Share Plan (2004 Unapproved)
13.09.04	298,315	25.0	13.09.07		12.09.14
12.07.05	323,520	25.0	12.07.08		11.07.15
09.01.06	2,075	25.0	09.01.09		08.01.16
	623,910
Senior Operational Employees' Incentive Plan
24.09.08	330,028	-	24.09.11		24.09.11
Total	3,558,113

Executive Directors' Performance Share Plan (LTIP)

The Plan was approved by shareholders of the Company in September 2003 on the following terms:

i) participation in the Plan is confined to executive directors of the Company;

ii) individual awards to directors are restricted to 1% of the Company's issued share capital on the date

of award and an aggregate of 2.5% of the Company's issued share capital;

iii) awards are granted at nil cost to participants; and

iv) vesting occurs, subject to the achievement of performance conditions, over years 5,6,7,8 and 9. No

release of shares shall take place until the ninth anniversary of the award date.

1996 Approved Executive Share Option Scheme (1996 Approved)

The Scheme is an HMRC approved scheme with the following provisions:

i) since 2004 vesting of the options has been subject to a share price based performance condition; and

ii) individual awards are restricted to £30,000.

No awards have been made under the Scheme since 2005.

2004 Unapproved Share Plan (2004 Unapproved)

The Plan is not approved by HMRC and has the following provisions:

i) vesting of rights is subject to achievement of total return based performance conditions; and

ii) individual awards are restricted to annual earnings.

Aggregate awards are restricted to 5% of the issued share capital of the Company on the date of issue.

Senior Operational Employees' Incentive Plan

The Plan is not approved by HMRC and its main provisions are as follows:

i) shares are held on trust for a three year period and released at nil cost to the participants; and

ii) in addition to continued employment, the performance condition of the awards is based on achievement of top quartile IPD performance over a three year period.

The movement in the year in the number and weighted average exercise price of outstanding options was as follows:

		2011		2010
	Number of shares	Weighted average exercise price	Numbers of shares	Weighted average exercise price
	m	pence	m	pence
In issue as at 1 April	6.0	37.1	4.1	117.5
Impact of rights issue	-	-	3.8	-
Options exercised	(0.2)	25.0		-
Distribution under share-based
payment scheme (deferred bonus)	-	-	(0.2)	-
Options lapsed	(2.2)	75.0	(1.7)	167.0
In issue as at 31 March	3.6	14.2	6.0	37.1

The weighted average share price at the date of exercise for share options exercised during the year was 25p (2010: 81p). The options outstanding as at 31 March 2011 had a weighted average remaining contingent life of 2.2 years (2010: 3.0 years).

No options were granted during the current or comparative year.

24 Capital commitments

As at 31 March 2011, the Group had capital commitments of £105.9m (2010: £122.3m) in relation to its own development properties of which £3.8m (2010: £3.3m) is recoverable under government grants.

The Group's share of capital commitments in relation to its joint ventures was £67.8m (2010: £20.8m),

of which £18m will be refunded to the Group following the re-financing of the Corsham Street property by

iQ Unit Trust on practical completion of the development.

25 Operating lease agreements

i) As lessee

Future minimum lease payments payable by the Group under non-cancellable operating leases were as follows:

	2011 £m	2010 £m
Within one year	0.8	0.9
From one to two years	0.8	0.8
From two to five years	2.2	2.5
After five years	-	0.5
	3.8	4.7

The Group's lease commitments relate to its own offices at 16 Grosvenor Street, London W1K 4QF.

ii) As lessor

The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases. The majority of properties are let for terms from five to 35 years at a market rent. Standard lease provisions include service charge recovery and upward only rent reviews every five years. On review, rents are increased either by a contractual formula or to current market rent (estimated rental value or ERV). Typically, single let properties are leased on terms where the tenant is responsible for repair, insurance and running costs while multi-let properties are leased on terms which include recovery of a share of service charge expenditure and insurance. Only one of the Group's properties is let on terms which include a turnover based element.

Future minimum lease payments receivable by the Group under such leases were as follows:

	2011 £m	2010 £m
Within one year	16.4	17.6
From one to two years	13.6	16.5
From two to five years	27.5	38.2
After five years	62.9	62.0
	120.4	134.3

In addition, the Group's share of minimum lease payments receivable under non-cancellable operating leases contained within the Group's joint ventures were £192.5m (2010: £295.9m).

26 Related party disclosures

During the year, the Group received the following fees in respect of services provided to its joint ventures:

	2011 £m	2010 £m
Quercus Healthcare Property Unit Trust	3.4	9.5
iQ Unit Trust	2.4	2.3
Greenwich Peninsula Regeneration Limited	0.3	0.6
Quintessential Homes (Wembley) LLP	0.1	0.1
Quantum Unit Trust	0.5	-
BioRegional Quintain Limited	-	0.2
	6.7	12.7

The Group also received interest on loan notes amounting to £1.6m (2010: £1.5m) from Greenwich Peninsula Regeneration Limited, £0.7m (2010: £0.6m) from Greenwich N0204, £0.1m (2010: £0.5m) from Wembley City HIX Limited and £nil (2010: £1.6m) from BioRegional Quintain Limited, which are included in finance income.

On 15 March 2010, BioRegional Quintain Limited became a wholly owned subsidiary when the Group acquired the remaining 50.1% of its equity.

The following amounts due from related parties are included in trade and other receivables in note 14:

	2011 £m	2010 £m
Quercus Healthcare Property Unit Trust	2.5	2.5
iQ Unit Trust	0.8	0.9
Greenwich Peninsula Regeneration Limited	0.6	0.2
Quantum Unit Trust	0.5	-
	4.4	3.6

Amounts due from related parties are due on demand and are unsecured.

In addition, the Group has granted loans of £10.7m (2010: £nil) to an associate, Albemarle Retail Properties LLP, which are shown in these financial statements as non-current receivables.

If iQ's loan to value covenant of 65% or its interest cover covenant of 1.25x is not met, the Group is required to inject equity alongside its partner, Wellcome, up to a limit of £19.0m (2010: £32.0m) to restore the covenant.

The Group has also agreed to fund the whole £36m second instalment payment for Corsham Street, a property held within iQ. This is included within the joint venture capital commitments shown in note 24. It is anticipated that £18m will be refunded to the Group on refinancing of the property following practical completion.

The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the applicable categories specified in IAS24, 'Related Party Disclosures'.

	2011 £m	2010 £m
Short-term employee benefits	2.2	2.0
Post-employment benefits	0.2	0.3
Directors' remuneration included in administrative expenses (note 5)	2.4	2.3

The members of the Board are the only key management personnel as defined under IAS 24.

27 Acquisition of subsidiary in the comparative year

On 15 March 2010, the Company acquired the remaining 50.1% of the share capital of BioRegional Quintain Limited for a consideration of £1. The fair value of the assets and liabilities as at the date of acquisition and the corresponding carrying amounts immediately before the acquisition were:

	Carrying value at transaction date	Fair value adjustments	Fair value recognised on acquisition
	£m	£m	£m
Investment in joint ventures	5.8	-	5.8
Trading properties	4.0	(0.8)	3.2
Net current liabilities	(0.9)	(0.1)	(1.0)
Non-current liabilities	(2.4)	-	(2.4)
Net assets acquired	6.5	(0.9)	5.6
Represented by:
Initial cost of the Group's 49.9%
equity interest in the joint venture			11.6
Loss under the equity method of the
initial 49.9% interest			(3.0)
Impairment of investment			(3.1)
Costs of acquisition			0.1
			5.6

28 Disposal of interest in the comparative year

On 30 September 2009, the Company disposed of a 1.5% minority stake in one of its subsidiaries, Signal Property Investments LLP (the SeQuel Property Fund), for a consideration of £0.1m. At the date of the disposal, the fair values of the assets and liabilities were as follows:

	£m
Investment properties	83.3
Bank loans	(49.0)
Shareholder loans	(25.1)
Net assets	9.2

Fair value of minority stake	(0.1)
Proceeds from disposal	0.1
Loss on disposal	-

29 Financial Statements

The information set out above does not constitute statutory accounts for the year ended 31 March 2011 or 2010 but is derived from those accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Company's annual general meeting and will be made available on the Company's website, www.quintain.co.uk. The accounts have been prepared on a going concern basis which the directors consider appropriate. The auditors have reported on the 2010 and 2011 accounts, their reports were unqualified and did not contain statements under section 498 (1) or (2) of the Companies Act 2006.

This information is provided by RNS

The company news service from the London Stock Exchange

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