Annual Report & Accounts 2005 Contents
02 Financial highlights
03 Operational highlights
04 Chairman’s statement
06 Chief Executive’s review
14 Operational review
18 Financial review
24 Board of directors
26 Directors’ report
28 Statement of directors’ 
responsibilities
29 Independent auditors’ report
30 Consolidated profit and 
loss account
31 Consolidated reconciliation of
movements in shareholders’ funds
31 Statements of movements in
reserves
32 Consolidated balance sheet
33 Company balance sheet
34 Consolidated cash flow statement
34 Notes to the consolidated 
cash flow statement
36 Notes to the financial statements
50 Proforma unaudited consolidated
balance sheet
51 Five year record
52 Shareholder information
Front cover: Weybridge, Surrey Annual Report & Accounts 2005 | Halladale Group plc 01
Our Ethos
The creation of value through active 
and entrepreneurial management, risk
controlled development and co-investment 
in commercial property assets.
Key properties in our portfolio
under management
Ofﬁces
1 Shaftesbury House, Glasgow
2 The Strand, London
3 Becket House, Cheapside, London
Retail
4 MFI, Bootle, Merseyside
5 Westway Retail Park, Cumbernauld
6 South Street, Newport, Isle of Wight
7 St Mary’s Gate, Shefﬁeld
8 Market Precinct and Brackley Street, 
Farnworth 
Retail/Residential
9 Cochrane Square, Glasgow
Shopping Centres
10 Bowen Square, Daventry
11 Cockhedge, Warrington
12 Market Walk, Newton Abbot
13 Market Gates, Great Yarmouth
14 Queens Square, West Bromwich
15 Grays Shopping Centre, Essex
16 Angel Place, Bridgwater
17 Bay Tree Centre and Beckett House,
Brentwood
18 Sunbury Cross, Sunbury-on-Thames
19 Queens Street, Darlington
20 Myrtle Walk, Bingley
1
5
2 3
10
7
8
9
6
14
12
13
15
16
17
18
19
20
4
11 02 Halladale Group plc | Annual Report & Accounts 2005
2005 2004 2003 2002 2001
10.42
9.99
7.21
5.34
7.66
Proﬁt before tax (£m) 3.92 2.61 + 50%
Dividends per ordinary share (pence) 2.9 2.1 + 38%
Undiluted earnings per ordinary 10.42 9.99 + 4%
share (pence)
Proforma triple net asset value 90.91 82.46 + 10%
per ordinary share (pence)*
2005 2004 % increase
Financial highlights
2005 2004 2003 2002 2001
Proﬁt before tax (£m)
3.92
2.61
1.69
1.15
0.85
2005 2004 2003 2002 2001
Dividends per ordinary share
(pence) 
2.9
2.1
1.6
1.25
0.0
2005 2004 2003 2002 2001
Proforma triple net asset value
per ordinary share (pence)
90.91
82.46
68.41
63.65
55.16
Undiluted earnings per ordinary
share (pence) Annual Report & Accounts 2005 | Halladale Group plc 03
Operational highlights
Total portfolio under management* (£m) 450 205 + 120%
Total transactions in portfolio 347 155 + 124%
under management* (£m)
Co-investment portfolio under 388 162 + 140%
management* (£m)
*
The calculation of these numbers, and deﬁnition of portfolio under management as used throughout the annual report and accounts, 
is contained in the Financial Review.
2005 2004 % increase
2005 2004 2003 2002 2001
Total portfolio under 
management (£m)
450
205
145
116
60
2005 2004 2003 2002 2001
Total transactions in portfolio 
under management (£m)
347
155
120
82
34
Portfolio by geographical
sector (%)
Portfolio by sector
(%)
South East 30
North West 13
East Anglia 9
Scotland 9
South West 9
East Midlands 7
West Midlands 6
North 6
Yorkshire & Humberside 5
Outer London 5
Wales 1
Shopping centres 62
In-town retail 15
Ofﬁces 12
Out of town retail 8
Industrial 3
SE
SC
IR
O
I
OTR
NW
EA
S
SW
EM
WM
N
YH
W
OL 04 Halladale Group plc | Annual Report & Accounts 2005
It gives me great pleasure to present
another set of excellent results. For
the year to 30 April 2005 Halladale’s
proﬁt before tax was £3.92m, a 50%
increase on last year’s ﬁgure. 
Undiluted earnings per share grew by 4% and triple net asset
value per share, based on the proforma unaudited balance sheet
on page 50, advanced to 90.91p, an increase of 10% over the
previous year. Further information about these calculations is given
in the Financial Review.
Consistent with our progressive dividend policy the Board is
recommending a ﬁnal dividend of 1.9p per share. Taking into
account the interim dividend of 1p per share paid on 25 February
2005 the total dividend of 2.9p per share will be 38% greater
than last year’s. Subject to shareholders’ approval at the Annual
General Meeting the ﬁnal dividend will be paid on 20 September
2005 to shareholders on the register on 22 July 2005, with the
exception of the new shares issued in May of this year pursuant 
to the placing and open offer which will not rank for this year’s
ﬁnal dividend.
Chairman’s statement
Cochrane Square, Glasgow Annual Report & Accounts 2005 | Chairman’s Statement 05
On 16 May 2005 we successfully completed our second major
fund raising of £13.4m, net of expenses, through an issue of new
ordinary shares. This followed the completion in May 2004 of our
ﬁrst major fund raising of just under £15m net of expenses. Both
transactions were enthusiastically supported by the market and, 
as a result, Halladale is in a strengthened position to take further
advantage of market opportunities. 
Co-investment fund management continues to be an important
and growing element of our activities. I am particularly pleased
that during the period, two funds were launched – CReAM with
Citigroup and Halladale Nelson Fund targeted at private investors.
We believe that this area of our activities will become of increasing
importance as the Company grows.
On 10 December 2004 I was delighted to welcome Marcus
Hopkins on to the Board as a non-executive director. Marcus, 
an executive director with Moscow Narodny Bank, has already
made a notable contribution to the Board’s deliberations. Archie
Robertson, who had been a non-executive director of Halladale 
for more than 7 years, stood down from the Board on 31 January
2005. Archie was an outstanding colleague and on behalf of
everyone at Halladale I would like to thank him for his wise
counsel over the years.
We take communication with our shareholders very seriously. 
Our AGM which takes place on 13 September 2005 is an
important opportunity for shareholders to meet the Board and to
ask questions. In addition to the formal business of the AGM our
chief executive, David Lockhart, and our property director, Ken
Lindsay, will give a presentation about the Company’s activities. 
I look forward to welcoming as many of you as possible at this
year’s meeting.
The year under review saw a very high level of activity which 
is described in the Chief Executive’s review and the Operational
Review. As always my thanks are due to my Board colleagues 
and to all the Halladale team whose commitment throughout
another dynamic year has been immense. They are what makes 
a difference and I have every conﬁdence that through their
expertise and dedication Halladale will continue to deliver strong
shareholder returns.
Fred Shedden MA LLB
Chairman
“Co-investment fund management continues 
to be an important and growing element of
our activities... We believe that this area of our
activities will become of increasing importance
as the Company grows.” Market Hall, Carlisle
06 Halladale Group plc | Annual Report & Accounts 2005
This has been another year of
signiﬁcant advance by Halladale 
and, even by comparison with our
previous high levels of activity, it has
been an extremely active year with
considerable growth across all key
areas of our business operations.
Total transactions in the portfolio under management during 
the year more than doubled from £155m in 2004 to £347m and
at 30 April 2005 our total portfolio under management had 
also more than doubled to £450m from £205m a year earlier. 
We co-launched two new co-investment Property Funds and at 
the corporate level we announced our second major fund raising
exercise of £13.4m, net of expenses, which completed just after
the ﬁnancial year end.
We are also delighted to announce another excellent set 
of ﬁnancial results which show strong growth in all our key
performance indicators. The increases in proﬁt before tax and 
total dividend of 50% and 38% respectively justify our rating 
as an asset backed earnings business. Total return on equity 
on a proforma basis was 19.61% for the year (see page 21).
In the UK, property was the top performing asset class in 2004
producing a total return of 18.3%. Most of that performance
came from capital growth fuelled by strong investor demand,
despite limited occupational demand and rising interest rates.
Retail, where the Company is signiﬁcantly invested, was the top
performing sector for the third year in succession. We continue 
to monitor market opportunities and have made a number of
strategic acquisitions in non-retail sectors, notably south east ofﬁces.
Fundraising
On 20 April 2005 we announced our second major fund raising of
£13.4m, net of expenses, through an issue of new ordinary shares,
which successfully completed on 16 May 2005. This followed the
completion of our ﬁrst major fund raising of just under £15m net
of expenses in May 2004.
We have a growing number of core institutional shareholders 
and I would like to take this opportunity to welcome our new
shareholders and also to thank our existing shareholders for their
continued support.
To those investors who acquired shares in Halladale at the time 
of our Admission to AIM in April 2001 and have held them since
then, we have delivered a total annual return of 25.5% in the
period to 30 April 2005, based on the share price at that date and
dividends paid since Admission.
Chief Executive’s review Annual Report & Accounts 2005 | Chief Executive’s Review 07
The combined effect of our two fund raising exercises has
transformed Halladale in two important ways. Firstly, our market
capitalisation has increased from circa £15m fourteen months ago
to over £60m today on a fully diluted basis. This provides us with
greater critical mass and higher recognition within the investing
community. Secondly, the new capital has given us a much
stronger balance sheet, enabling us to increase the size of projects
we can undertake, as well as expand our co-investment activities
and, where appropriate, take larger equity stakes.
The funds raised in 2004 have been put to effective use. We have
more than doubled our co-investment portfolio from £162m to
£388m at 30 April 2005, through our ability to co-invest £9.3m 
of our own equity alongside £64.2m of project equity raised from
our co-investment partners. We were also able to expand our
development programme and increase the value of our directly
owned properties from £43m last year to £62m at the year end.
This demonstrates the effective use to which we have put the
funds raised last year and we intend to do so again with the new
funds raised since the year end.
Business model
Our strategy is to create value through active and entrepreneurial
management, risk controlled development and co-investment 
in commercial property assets and we implement that strategy 
in three key areas:
Asset management – our core strategy, since the Company 
was founded, where we seek to identify opportunities that we can
add value to through our own skills and efforts rather than purely
relying on movement in the markets. At the year end the value 
of properties held for asset management was £295m of which
£249m (84%) was in a number of single investor co-investment
joint ventures with key partners, including Bank of Scotland, Anglo
Irish Private Equity, Citigroup and Kodak Pension Plan. The remaining
£46m (16%) was directly owned on our own balance sheet.
Development – our risk controlled approach to development is
achieved through utilising our own equity to seed development
opportunities through options and conditional contracts. Once 
we have created a viable development scheme with all necessary
consents we decide, having regard to risk and size, whether to
fund it directly on our own balance sheet or through one of our
co-investment joint ventures. Our total development programme,
valued at £65m at 30 April 2005, had an estimated end value 
on completion in excess of £260m of which £75m (29%) is being
funded on our own balance sheet and the remaining £185m
(71%) in co-investment joint ventures.
Co-investment fund management – during the year under
review we co-launched two Property Funds with a total investment
capacity of circa £215m of which £90m had been invested at 
30 April 2005. The ﬁrst was the £185m CReAM Fund co-launched
with Citigroup which will seek to deliver core returns through
investing primarily in the UK retail property sector. The Fund will
have a lifespan of six to eight years. Halladale has a 10% equity 
stake in the Fund and has been appointed as Asset and Property
Manager. Citigroup has a 20% equity stake in the Fund and
underwrote the remaining 70% which is currently being sold
down to both institutional and high net-worth private investors.
The second was the £30m Halladale Nelson Fund and was our 
ﬁrst Property Fund targeted at the private investor market. It is an
income based Fund seeking to deliver a 6.5% annual distribution
to its investors. Nelson is investing in a spread of properties,
principally in the ofﬁce and retail sectors, and has a life span of
seven years. Halladale has invested 9.36% of the equity in the
Fund and has been appointed Asset and Property Manager.
The ability to leverage on our balance sheet, whether through
single investor co-investment joint ventures or multi investor 
co-investment Property Funds, lies at the heart of our co-investment
business model. At 30 April 2005 co-investment activities
accounted for 86% of our total portfolio under management.
Since our Admission to AIM on 27 April 2001 we have raised a
total of £104m of project equity from our co-investment partners
of which £14m has been subsequently repaid. This has enabled us
to grow our total co-investment portfolio from £13.5m at the time
of Admission to £388m at the year end. We believe this is a very
efﬁcient use of our equity which generates a growing recurring fee
income as well as equity and performance related returns.
Prospects
The signiﬁcant growth in capital values in recent years has been
largely driven by investors re-rating property as an asset class
rather than by historical fundamentals such as occupational
demand and rental growth. One consequence of this re-rating is
that property should continue to be an important part of any well
balanced portfolio for the foreseeable future, especially against 
a stable background of low inﬂation and low interest rates.
That re-rating process must at some stage come to an end,
although the precise timing is difﬁcult to call, particularly with
early indications that interest rates may have peaked leading 
to the prospect of lower borrowing costs. When that happens, 
the property investment market should revert to historical
fundamentals where prospects at the macro level will be
inﬂuenced by the performance of the UK economy. It is in this type
of market that the range of asset management and development
skills that we possess becomes essential to maximise income and
create value. One of our strengths is the extensive network of
contacts we have established throughout the UK which continually
enables us to identify opportunities to apply these skills and also
provides us with a strong pipeline of new projects.
Another of our strengths is the quality and commitment of our
management team and I’d like to take this opportunity to thank
them and our professional advisors for their professionalism and
hard work, without which Halladale’s signiﬁcant achievements in
the year under review would not have been possible. We remain
conﬁdent that the combination of our entrepreneurial asset
management and development skills, together with growing 
fee income from our co-investment activities, will enable us to
continue to deliver attractive total returns to our shareholders.
David Lockhart
Chief Executive
“We remain conﬁdent that the combination 
of our entrepreneurial asset management and
development skills, together with growing fee
income from our co-investment activities, will
enable us to continue to deliver attractive total
returns to our shareholders.” 08 Halladale Group plc | Annual Report & Accounts 2005 08 Halladale Group plc | Annual Report & Accounts 2005
Risk-controlled development
All developments involve an element of risk. The key 
to exploiting opportunities successfully lies in identifying,
managing and controlling those risks from the outset. Annual Report & Accounts 2005 | Halladale Group plc 09
Where opportunities have been identiﬁed to add value to 
an existing property through development, detailed research 
is essential. The initial decision to acquire must be based on 
a real understanding of the factors that could impact on the
development and the realisation of value, including planning 
issues and tenant demand.
In the case of the Bay Tree Centre in Brentwood, acquired in 
co-investment with Bank of Scotland, thorough due diligence gave
a clear indication of how value could be maximised. The leasehold
interest in the property was purchased for £7.25m at a net initial
yield of 5% in 2002, with a development strategy to extend 
and refurbish the existing 70,000 sq. ft. shopping centre and
convert the vacant adjoining ofﬁce tower into residential units. 
Prior to purchase the enthusiastic support of the local council 
in refurbishing the centre, coupled with strong local demand for
quality housing, was carefully established. These factors made 
it extremely likely that a complex planning consent would be 
negotiated and that either the terms of the ground lease would 
be renegotiated or the freehold, owned by the local authority,
could be acquired. Full discussions with local Council ofﬁcials,
tenants and local residents were held to assess the risks involved.
After detailed discussions, terms were agreed to acquire the
freehold interest in the property for £9m and a planning consent
was successfully negotiated. On completion, scheduled later this
year, we will have rejuvenated the tired, open poorly let property
into a 120,000 sq. ft., fully enclosed climatically controlled modern
shopping centre. The anchor supermarket let to Somerﬁeld will
continue in situ alongside new tenants including JJB Sports,
Wilkinsons and Bon Marche. The ofﬁce tower, vacant for ten years,
has been sold to Barratt, since the year end for just over £7m,
along with the consent to refurbish as 106 one and two bed ﬂats,
with adjacent parking. As a result of the retail development it has
been possible to increase the tone of the rents in the adjoining
High Street block, also included in the property purchased, from
£55.00 to £75.00.
Background: 
Bay Tree Centre, Brentwood, Essex
Foreground (from left to right): 
Allan Lockhart of Halladale 
and François Nairac of L’Etoile
Developments 10 Halladale Group plc | Annual Report & Accounts 2005
Partnership through co-investment joint ventures and
co-investment property funds allows us to apply our
skills to substantial opportunities in a range of sectors.
Acting in partnership Annual Report & Accounts 2005 | Halladale Group plc 11
The best co-investments are based on compatible cultures 
and mutual understanding. Long-term relationships result in 
quick decision-making and the ﬂexibility to take advantage 
of opportunities in a range of markets.
Our co-investment with Anglo Irish Private Equity is just one
example of how working with the right partners provides
opportunities for Halladale. Sunbury Cross shopping centre was
purchased for £21.35m in January 2005. The mixed-use centre
comprises 57,500 sq. ft. of retail anchored by Marks & Spencer,
Boots and Halfords together with the prominent 56,000 sq. ft.
Chubb Tower ofﬁce block, a multi-storey car park and two
residential tower blocks let on ground leases.
The property contains a range of value enhancement strategies
through active asset management. The combination of 
strategies to maximise returns in this venture will be fully 
explored with Anglo Irish Private Equity and implemented 
at the earliest opportunity.
Background:
Sunbury Cross Shopping Centre, Middlesex
Foreground (from left to right):
John Daly of Anglo Irish Private Equity 
and Alistair McGill of Halladale 12 Halladale Group plc | Annual Report & Accounts 2005
Driving the creation of value from a portfolio is based
on the advance development of strategies for a range
of individual properties and the ability to put them
into practice quickly and decisively.
Maximisation and 
realisation of value Background:
Church Street, Liverpool
Foreground (from left to right):
Peter Bax of Citigroup, Bryan Sheriff
and David Petrie of Halladale
Annual Report & Accounts 2005 | Halladale Group plc 13
Our third joint venture with Citigroup involved the purchase of 
a portfolio of primarily retail properties for £32m in June 2002.
Individual strategies for each property had been identiﬁed prior to
purchase. For four of the properties, where identiﬁed opportunities
to add value were minimal, back-to-back sales were agreed for 
a total of £9.3m, generating proﬁt and signiﬁcantly reducing the
initial equity required. Across the remainder of the portfolio, our
range of asset management strategies included undertaking rent
reviews, negotiating longer term leases from existing tenants, and
re-letting units on imminent lease expiries.
Flexibility and adaptability is critical to asset management. To take
advantage of increasing demand for well-let retail properties,
several sales were achieved in 2003 and 2004 ahead of the initial
business plan both in terms of timing and sales value. 
In June 2005 the ﬁnal property in the portfolio was sold providing
total returns to all shareholders in the venture at over 56%, higher
than the base business plan produced on initial acquisition. Weybridge, Surrey
“Property was the top performing asset class in
2004 and has now out-performed equities and
gilts over one, three, ﬁve and ten years.”
14 Halladale Group plc | Annual Report & Accounts 2005 14 Halladale Group plc | Annual Report & Accounts 2005
Market comment 
The total portfolio under management more than doubled over
the year, from £205m to £450m. Activity in the ofﬁce sector has
increased and current weightings across the portfolio are:
Shopping centres 62%
In-town retail 15%
Ofﬁces 12%
Out of town retail 8%
Industrial 3%
As shown in Table 1, the main element of market performance
during the calendar year 2004 has been strong demand from
investors and a resultant increase in capital growth.
Property was the top performing asset class in 2004 and has 
now out-performed equities and gilts over one, three, ﬁve and ten
years. The prospects for 2005 show little sign of change with
further improvement in capital values and limited signs of rental
growth. Looking forward, we consider it likely that further capital
growth will be limited and believe that future performance will
depend on creating value through implementing successful asset
management and development strategies.
Operational review
Table 1 – sourced from Investment Property Databank
Annual Index
Total Returns Rental Growth Capital Growth
(%) (%) (%)
All property 18.3 2.3 11.4
Retail 20.5 4.0 14.1
Ofﬁce 15.2 0.1 7.6
Industrial 16.9 1.1 9.1 Ken Lindsay
Property Director
Annual Report & Accounts 2005 | Operational Review 15 Annual Report & Accounts 2005 | Operational Review 15
Transactions in the year
The year was particularly active in the portfolio under
management with total acquisitions of £256.2m (2004 – £98.7m),
and total disposals of £91.1m (2004 – £55.9m).
Despite signiﬁcant competition in the market place we acquired
interesting opportunities across all three key areas of our
operations through our extensive network of contacts throughout
the UK. Acquisitions included ﬁve shopping centres for £122m,
two retail portfolios for £62m, three ofﬁces for £34m, two
development opportunities for £12m and the freehold interest in
the Baytree Shopping Centre in Brentwood for £9m. The balance
of £17m comprised a number of directly owned retail properties.
We brought several asset management strategies to a successful
completion during the year, through the disposal of the properties
involved. We also took advantage of strong investor demand 
to effect disposals of some assets earlier than originally planned. 
The main disposals in the year included three shopping centres for
£28m and a retail warehouse for £23m. We sold £17m of mainly
retail assets to the Halladale Nelson Limited Partnership, and
disposed of our ﬁnal interest at the development in Queen Street,
Glasgow for £2m. The balance of £21m mainly comprised the
disposal of smaller retail properties.
Asset management
At 30 April 2005 the value of properties held for asset
management totalled £295m of which £249m (84%) was in 
co-investments. Major activities for the year are listed below:
Co-investment with Bank of Scotland
The Brook Retail Portfolio, acquired for £44.25m, comprises 
a wide variety of retail properties throughout the UK, providing
opportunities to apply our asset management skills. Several
properties have been disposed of to date, taking advantage 
of the strong investment market in line with the business plan. 
In addition, planning applications are being pursued for the
portfolio’s properties in Bury St Edmonds, Newbury and Tunbridge
Wells, where opportunities have been identiﬁed for redevelopment
and change of use strategies. 73-75 The Strand, acquired for
£13m, comprises ofﬁce space of 18,000 sq. ft. let to Shell UK
Limited and two substantial retail units at ground ﬂoor level.
Strategies include possible regearing of a leasehold interest 
in one of the retail units.
73-75 The Strand, London
Ofﬁce space Retail space
18,000 sq.ft. 7,646 sq.ft.
Purchase price and date Co-investment partner
£13m, April 2005 Bank of Scotland
Situated in a prime central London location, with ofﬁce space 
currently let to Shell UK Ltd and ground ﬂoor retail tenants  
which include Zizzi and Coffee Republic.
81-90 Cheapside, London
Ofﬁce space
46,000 sq.ft.
Purchase price and date Co-investment partner
£14.65m, April 2005 Kodak Pension Plan
This prominent ofﬁce building in the City of London, currently 
let to Citigroup and Wavecrest Communications Plc, has planning
consent for a major redevelopment comprising 100,000 sq. ft. 
of ofﬁce and 20,000 sq. ft. of retail space.
Queens Square, West Bromwich
Retail space
225,000 sq.ft.
Purchase price and date Co-investment partner
£18.5m, August 2004 Anglo Irish UK Property Fund
This principal shopping centre, covering ground and ﬁrst ﬂoors was
built in the early 1970s. The freeholder is Sandwell Metropolitan
Borough Council, and key tenants are Boots, Tesco, Mothercare,
River Island and H. Samuel.
Acquisitions 16 Halladale Group plc | Annual Report & Accounts 2005
Co-investments with Citigroup
The CReAM fund, referred to in the Chief Executive’s Review,
acquired three shopping centres: Angel Place Shopping Centre,
Bridgwater for £16.25m, Market Walk Shopping Centre, 
Newton Abbot for £18.85m, and Grays Shopping Centre in Essex
for £32.1m. We believe all these centres will provide good
opportunities to apply our asset management skills to add value
over the life of the fund.
The Group’s third co-investment vehicle with Citigroup completed
its disposal program following successful implementation of its
asset enhancement strategies. The ﬁnal property in this portfolio,
was sold for £1.42m after the year-end. The shopping centre in
Daventry, also held in a Citigroup co-investment was, following
completion of the partial redevelopment and increases in the rent
roll, also sold after the year-end for £22m. 
Co-investment with Anglo Irish Private Equity
Queens Square Shopping Centre, acquired for £18.5m, is the
principal shopping centre in West Bromwich and extends to
225,000 sq. ft. The potential redevelopment of the centre will 
be fully explored in the medium term. Sunbury Cross Shopping
Centre in Sunbury-on-Thames, acquired for £21.35m, is a mixed-
use property located adjacent to junction 1 of the M3. It comprises
retail space of 57,500 sq. ft. and the Chubb ofﬁce tower which 
is a 12-storey ofﬁce building of 56,000 sq. ft. offering potential
opportunities for development when the current lease expires. 
The Queens Street Shopping Centre in Darlington, acquired for
£28.6m, extends to 75,000 sq. ft. The property is immediately
adjacent to a proposed town centre extension site that will
facilitate the development of a major new shopping facility.
Co-investment with Kodak Pension Plan
Beckett House, Cheapside, London, acquired for £14.65m, 
is a mixed-use leasehold property, within close proximity to the
Bank of England, and with planning consent for 120,000 sq. ft. 
of retail space and Grade A ofﬁces. There are opportunities to
enhance value through a variety of asset management strategies
including combining the leasehold and freehold interests, as well 
as implementing the planning consent. The 130,000 sq. ft. 
Big W unit in Stockton, let on a long lease to a good covenant,
was sold into the strong investment market some 2 years ahead 
of budget for £23.25m. At MVA House, Woking, a complex
refurbishment programme was completed with the existing tenant
in situ. As part of the agreement to refurbish, a new long-term
lease was signed with the tenant and the property was sold 
for £2.72m.
Co-investment with Private Client of Kleinwort Benson
The two shopping centres held in the co-investment were sold in
the year: Market Hall, Carlisle, sold for £7.46m, and Market Walk
Shopping Centre, Newton Abbot, sold for £18.85m, following 
the successful completion of various asset management strategies
including a substantial reletting programme at Newton Abbot
where the majority of the leases expired in December 2004. 
Directly owned
The Larrick Portfolio, acquired for £15.85m, comprises seven town
centre retail properties throughout the UK, and a retail warehouse
in Blackpool. Two of the properties, in Blackpool and Brighton,
have been sold this year in advance of business plan in timing and
Cochrane Square, Glasgow
Retail space Residential space
9,000 sq.ft. 84 one and two bed apartments
Purchase price and date
£1.9m, February 2004
This landmark, mixed-use development site near the city centre 
incorporates the original façade of the property, and allowance for
basement level car parking.
Angel Place Shopping Centre, Bridgwater
Retail space
87,000 sq.ft.
Purchase price and date Co-investment partner
£16.25m, September 2004 Citigroup
This purpose-built covered shopping centre comprises 19 shop 
units, anchored by Wilkinsons, Iceland and Peacocks, with parking
for 385 cars.
17 Moorgate, London
Ofﬁce space
15,000 sq.ft.
Purchase price and date
£8.05m, June 2005
This prime location, currently let to Unicredit, is to be fully 
refurbished and converted into mixed use ofﬁce and retail 
space on the ground ﬂoor.
Acquisitions
Operational Review (cont) Annual Report & Accounts 2005 | Operational Review 17
sales value. Wellington Road, Aberdeen acquired for £4.45m, and
St Mary’s Gate, Shefﬁeld acquired for £7.4m, are retail warehouse
properties with potential to increase rental income at forthcoming
rent reviews. We took advantage of opportunities in the ofﬁce
market with the acquisition for £4.8m of Shaftesbury House,
Glasgow, comprising ofﬁces and retail with short-term income and
an exciting development opportunity adjacent to Central Station.
After the year end the Group also acquired, for £8.05m, a 
15,000 sq. ft. ofﬁce at Moorgate, London, let for a further six years.
Development
Our risk-controlled development programme continues to grow
and at the year end had an estimated value on completion in
excess of £260m spread over 11 projects in the group and 
co-investments. These include:
Baytree Shopping Centre, Brentwood
The freehold interest of the Baytree Shopping Centre was 
acquired from Brentwood Council, for £9m, following the grant 
of planning permission. Construction is now well advanced for 
the refurbishment and extension of the shopping centre with
completion scheduled for later this year. Major pre-lets have been
secured with JJB Sports and Wilkinsons and various lettings are
proceeding through legals with major national multiples. Planning
consent was achieved to convert the vacant ofﬁce tower above
the centre into 106 one and two bedroom ﬂats and, since the year
end, this part of the property has been sold to Barratts for £7.1m.
Cochrane Square, Glasgow
At Cochrane Square, in Glasgow’s Merchant City, building works
are now well advanced on the mixed-use development of 84 one
and two bedroom ﬂats with underground car parking and four
retail/restaurant units. The project is scheduled for completion in
Spring 2006.
Newport, Isle of Wight
The Group purchased the bus station in Newport for just over 
£5m having gained planning consent to develop 60,000 sq. ft. of
new retail space together with a new bus interchange. Preliminary
works have now commenced on-site with a view to completion in
the summer of 2006. Pre-lets of three out of the four large units
have been achieved. The site also includes a building let to
Secretary of State for the Environment until March 2006 and
strategies to maximise value are being advanced.
OKI site, Cumbernauld
This 65 acre site was purchased in our ﬁrst co-investment with 
The Carlyle Group and comprises a new production facility of
200,000 sq. ft. currently being constructed and which OKI will
occupy under a new lease. The site also has planning consent for
over 300,000 sq. ft. of bulky goods retail warehousing. The new
facility for OKI should complete in August 2005 and the next
phase will involve the construction of the retail warehouse park
where discussions are well advanced with the anchor tenant.
Other developments
There are a number of properties, both directly-owned and in 
co-investments, where a development strategy is being pursued.
This includes refurbishment of the shopping centre at Bingley, 
the potential redevelopment of Shaftesbury House, Glasgow to
provide high quality new ofﬁce space with retail at ground ﬂoor,
and the extension and refurbishment of the shopping centre in
West Bromwich.
Through our extensive network of contacts we continue to receive
a strong ﬂow of potential development opportunities across 
all sectors. 
Future activities
The portfolio under management at 30 April 2005 comprised 
64 properties (2004 – 45 properties), and an average lot size of
£7.03m (2004 – £4.55m). The new funds raised will enable us 
to continue to increase the average lot size, providing greater
economies of scale. 
Whilst retail properties, including shopping centres, continue to
form a major part of the total portfolio, we are increasingly taking
advantage of opportunities in the ofﬁce market, notably in the
South East, where we recently announced the acquisition of well
located properties on The Strand and Cheapside in central London
and the post year-end acquisition of an ofﬁce in Moorgate, London.
Our retail portfolio comprises retailers selling mainly convenience
goods, as opposed to luxury goods, and we consider that this, 
as well as our strategy of careful stock selection, will underpin 
the value of the portfolio’s retail assets. We continue to identify
shopping centres, let at modest rental levels, which have seen little
asset management over the years and which therefore offer good
opportunities to increase values and generate proﬁt through our
asset management and development skills.
Our development programme has grown signiﬁcantly through 
our ability to identify opportunities across all sectors where we can
apply our skills through the planning and project management
process to generate a growing proﬁt stream. Whilst the investment
market has had a strong run, growth in occupational demand 
and rental levels has, on average, been much more modest. 
With limited supply in certain sectors now emerging, this provides
a stable background for our development activities.
Careful stock selection, together with a strong asset management
and development skill base, will be the key to out-performance 
at this stage in the cycle. At Halladale we have a proven track
record in both areas and, as such, are conﬁdent that we can
continue to create signiﬁcant value for our co-investment partners
and shareholders.
Ken Lindsay
Property Director Mark Harkin
Finance Director
18 Halladale Group plc | Annual Report & Accounts 2005
Financial performance
During the year under review the Group has continued to 
expand all its activities, particularly through co-investment vehicles.
The activities of these vehicles are, under accounting standards,
shown as a share of operating proﬁt only which makes it difﬁcult to 
convey the scale of operations and the gross value of transactions
within these vehicles. Tables 1 and 2 on pages 19 and 20 provide
an analysis of the Group’s activities.
Total revenue received by co-investments and from directly-owned
properties was £114m (2004 – £69m).
No allocation of overhead has been made between co-investment
and directly-owned activities.
Financial review
“...the return on equity has increased. This is
indicative of the effective use of both existing
shareholder equity and of the new capital 
raised in the year.” Kilburn, London NW6
Annual Report & Accounts 2005 | Financial Review 19
Table 1 – Proﬁt before tax
2005 2004
Directly-owned Directly-owned
total Co-investments* total Co-investments*
£000 £000 £000 £000
Rental income 2,371 18,083 2,323 8,915
Property sales 26,926 64,184 10,171 45,784
Management fees 1,672 – 888 –
Other income 268 571 – 427
Total revenue 31,237 82,838 13,382 55,126
Costs of sales (26,082) (55,128) (8,173) (38,912)
5,155 27,710 5,209 16,214
Equity share of net proﬁts of co-investments 3,630 1,746
Incentivised share of net proﬁts of co-investments 2,359 1,250
Administration costs (4,743) (3,750)
Group interest 
– net property debt (1,706) (1,703)
– Convertible Unsecured Loan Stock (672) –
– other interest (101) (143)
Proﬁt before tax 3,922 2,609
Undiluted earnings per share 10.42p 9.99p
*Co-investments include the gross value of all joint ventures and associates of the Group as listed in Note 9 to the accounts.
A total of £459,000 of proﬁts and fees, which have been received
in the year, has been deferred to future years in accordance with
accounting principles. Of total fees received from co-investments
in the year, the sum of £245,000 has been deferred as the 
co-investment entity has capitalised that fee as part of its cost 
of acquisition. Proﬁts from property sales of £214,000 have been
deferred where properties have been sold from entities within 
the Group to co-investment vehicles. The deferral is calculated 
by reference to the Group’s equity share in the purchasing 
co-investment vehicle.
Undiluted earnings per share has increased in the year after
allowing for the issue of 8,374,056 new shares in May 2004. 
The average number of shares, upon which this calculation is based,
is 27,495,723 (2004 – 18,982,500). 20 Halladale Group plc | Annual Report & Accounts 2005
Financial Review (cont)
Table 2 – Turnover in directly owned activities
Co-investment 2005
Asset fund Directly-owned
managementDevelopmentmanagement total
£000 £000 £000 £000
Rental income 2,371 – – 2,371
Property sales 24,746 2,180 – 26,926
Management fees 773 552 347 1,672
Other income 268 – – 268
Total revenue 28,158 2,732 347 31,237
Costs of sales (24,244) (1,838) – (26,082)
3,914 894 347 5,155
Table 3 – Proforma net assets per share
2005 2005 2004 2004
Net asset value Pence per Net asset value Pence per 
£000 share £000 share
Shareholders’ equity as shown in the 18,930 68.8 11,445 59.9
consolidated balance sheet
Uplift to market value of directly-owned properties 3,391 12.3 3,066 16.1
held as trading stock
Group’s share of uplift to market value of properties 6,165 22.4 3,959 20.7
held in co-investment vehicles
Proforma shareholders’ equity 28,486 18,470
Proforma net assets per share 103.5 96.7 Daventry, Northamptonshire
Annual Report & Accounts 2005 | Financial Review 21
Proforma net asset value
As a trading group properties are carried at the lower of cost and net realisable value. A proforma unaudited balance sheet has been
prepared on the basis set out on page 50.
Table 4 – Proforma triple net asset value per share
2005 2004
£000 £000
Proforma shareholders’ equity 28,486 18,470
Estimate of tax on re-valued properties (2,866) (2,108)
FRS 13 adjustment (net of tax) (605) (605)
Proforma triple net asset value 25,015 15,757
Proforma triple net asset value per share 90.91p 82.46p
Return on proforma shareholders’ equity 
Table 5 shows the return on weighted-average proforma shareholders’ equity including surplus on revaluation of properties net of tax at
30%. The tax rate applied to the current year proﬁt is 26.9% (2004 – 27.3%).
Weighted average proforma shareholders’ equity is the opening
proforma net asset value in each ﬁnancial year, adjusted for the
weighted average of funds received from share issues in the year.
Notwithstanding the impact of the share placing in May 2004, 
the return on equity has increased. This is indicative of the effective
use of both existing shareholder equity and of the new capital
raised in the year. 
Table 5 – Return on weighted average proforma shareholders’ equity
2005 2004
£000 £000
Proﬁt after tax 2,864 1,896
Increase in proforma revaluation reserve in the year 2,531 1,505
Tax thereon at 30% (759) (451)
Total unrealised return 1,772 1,054
Total returns (realised and unrealised) 4,636 2,950
Weighted average proforma shareholders’ equity 23,642 15,481
Return on weighted average proforma shareholders’ equity 19.61% 19.06% 22 Halladale Group plc |  Annual Report & Accounts 2005
*Total investment includes both equity and subordinated loans
provided by both Halladale and its co-investment partners. Halladale
investment comprises equity, loans and share of retained reserves
of each relevant entity.
Total portfolio under management at 30 April 2005 of £450m
represents the value of directly owned properties (£62m – 14%)
and those held in co-investments (£388m – 86%). 
Note 9 to the Accounts gives further information on co-investments.
Co-investments
Table 6 – Co-investments
Property Total Halladale Halladale
at value investment* investment* share of equity
Co-investment Partner £000 £000 £000 £000
Halladale Ventures Limited Bank of Scotland 83,045 14,455 2,150 50%
Bowen Square Properties Limited Citigroup Property Investors 19,000 3,000 444 10%
Halladale Portfolio Finance Limited Citigroup Property Investors 1,420 – 150 10.1%
The Cockhedge Retail Limited Citigroup Property Investors 47,500 10,450 671 6%
Partnership
CPI Retail Active Management Citigroup Property Investors 71,722 20,930 2,042 10%
Programme Limited Partnership
Halladale Opportunity Fund Kodak Pension Plan 7,165 3,975 676 50%
Limited Partnership
Halladale Opportunity Fund No 2 Kodak Pension Plan 19,969 8,011 1,250 50%
Limited Partnership
The Anglo Halladale Limited Anglo Irish Private Equity 26,350 4,732 434 9%
Partnership
The Anglo Halladale No2 Limited Anglo Irish Private Equity 48,110 10,527 3,182 30%
Partnership
The Anglo Halladale No3 Limited Anglo Irish Private Equity 22,635 5,713 1,761 30%
Partnership
Cumbernauld Retail Park Limited Carlyle Group 16,286 11,570 461 20%
Partnership
Halladale Nelson Limited Private Investors 18,225 10,695 937 9.36%
Partnership
Oban Bay Properties Limited Black King Properties 6,285 500 789 50%
387,712 104,558 14,947
Other co-investments 20
Other investments 5
14,972
Shown in the Accounts as £000
Investment in joint ventures 4,410
Investment in associates 9,809
Debtors 748
Other investments 5
14,972 Annual Report & Accounts 2005  |  Financial Review 23
Borrowings and gearing
Table 7 – Borrowings
Co-investments Directly-owned
2005 2004 2005 2004
£000 £000 £000 £000
Total borrowings 277,504 109,850 61,666 32,805
Cash balances (5,362) (861)
Net borrowings 56,304 31,944
Borrowings at ﬁxed rates 219,882 81,440 20,586 9,143
Borrowings at variable rates 57,622 28,410 41,080 23,662
Average ﬁxed rate at 30 April 6.75% 6.84% 8.26% 9.76%
Average variable rate at 30 April 6.41% 5.71% 6.64% 6.34%
Interest Cover (rents over net property interest cost) 139% 136%
Table 8 – Gearing
2005 2004
£000 £000
Proforma shareholders’ funds 28,486 18,470
Convertible Unsecured Loan Stock (‘CULS’) 9,586 –
Shareholders’ funds including CULS 38,072 18,470
Net borrowings (less CULS) 46,718 31,944
Proforma gearing 123% 173%
CULS have been included in this calculation as equity on the basis that the 
conversion price is signiﬁcantly below the current share price.
Gearing based on the statutory balance sheet 297% 279%
Borrowings by co-investments are wholly without recourse to 
the Group other than as disclosed in Note 19 to the Accounts.
The average ﬁxed rate of debt for directly-owned properties is
high due to a long term loan of £4.15m at 10.29% which will be
ﬁnally repaid in 2014. The Company continues to seek to balance
a sensible level of interest rate protection through a combination
of ﬁxed rates and hedging instruments whilst maintaining
ﬂexibility to implement the particular strategy of each project.
IFRS (International Financial Reporting Standards)
As an AIM company Halladale is not required to adopt IFRS 
until the year commencing 1 May 2007. The Company is
considering the likely effect of adopting IFRS and will continue 
to explain results to its shareholders as clearly and meaningfully 
as possible.
Trading status
HM Inspector of Taxes has previously conﬁrmed that Halladale
satisﬁed the criteria as a trading company for Business Asset Taper
Relief. The Directors believe that the business continues to be
conducted in a manner consistent with the position approved by
HM Inspector of Taxes.
Mark Harkin
Finance Director 12 3
Cheapside, London EC2
24 Halladale Group plc | Annual Report & Accounts 2005
1 Fred Shedden, MA, LLB
Non-executive Chairman
was senior partner of a major Scottish law ﬁrm until his retirement
in April 2000. He is now chairman of Martin Currie Japan
Investment Trust plc and is a non-executive director of Murray
International Trust plc, iomart Group plc and The Equitable Life
Assurance Society. He is also a Governor of Glasgow School of Art,
a member of The Scottish Further Education Funding Council and
a Board Member of Glasgow Housing Association.
Mr Shedden joined the Board of Halladale in 2001 as 
Non-executive Chairman.
2 David Lockhart, CA, NP
Chief Executive
is qualiﬁed as a Chartered Accountant and Solicitor. He practised
law in his family law ﬁrm until 1981 when he resigned to found
Caltrust Limited, a property development company based in
Scotland. He served as Executive Chairman of Caltrust Limited
until 1987 when the company was acquired by Sheraton Securities
International plc, following which he served as Managing Director
of the newly formed Sheraton Caltrust plc until 1990. During this
period the company undertook, either on its own or in a joint
venture, numerous prime ofﬁce and retail developments.
In 1991, Mr Lockhart founded Halladale and served as Executive
Chairman until 2001 when he assumed the role of Chief Executive.
3 Ken Lindsay, FRICS
Property Director
is a Chartered Surveyor with over 25 years’ experience in UK
commercial property. His career in property spans both public 
and private sectors. As Senior Surveyor from 1983 with Scottish
Provident and Aberdeen Asset Managers he was responsible for 
a £350 million property investment portfolio, and undertook 
many major transactions. In 1993, as Property Fund Manager, 
he assumed responsibility for an active UK property portfolio
worth £500 million with annual purchases and sales of more 
than £100 million.
Mr Lindsay joined the board of Halladale in 1998 as 
Property Director.
Board of directors  45 6 7
Annual Report & Accounts 2005 | Board of Directors 25
4 Mark Harkin, BAcc, CA
Finance Director
studied accountancy at Glasgow University and is a Chartered
Accountant. After six years in the accountancy profession, he joined
Caltrust Limited (which became part of Sheraton Caltrust plc) 
a Scottish based property development company in 1986 and 
was involved in many development projects throughout the UK. 
In 1990 he joined Edinburgh Development and Investment Limited,
the property development arm of Edinburgh District Council.
Mr Harkin joined the Board of Halladale as Finance Director in 1995.
5 Simon Taylor, BSc, MRICS
Director of Structured Finance
is a Chartered Surveyor with 15 years’ experience in property
ﬁnance. He was previously a Vice President at Security Paciﬁc
(which became part of Bank of America) structuring both
development and investment transactions for developers. He then
became a Partner in Drivers Jonas, where he established and ran
their ﬁnancial service business, advising clients in both the public
and private sectors in raising ﬁnance for a broad range of projects.
He was a founding shareholder in Outlet Centres International, 
a specialist developer of factory outlets. 
Mr Taylor joined the Board of Halladale as Director of Structured
Finance in 2002.
6 Michael Baker, FRICS
Non-executive Director
is a Chartered Surveyor with over 30 years’ experience in the
Central London property market and was previously Managing
Director of Baker Harris Saunders plc. He is a founding partner 
of BH2, the specialist City of London property consultancy. 
He is a past Chairman of the City of London branch of The Royal
Institution of Chartered Surveyors and a Past Master of the
Chartered Surveyors Livery Company. He is actively involved in 
all aspects of the City property market.
Mr Baker joined the Board of Halladale in 1995.
7 Marcus Hopkins, BA Hons, ACIB
Non-executive Director
studied law at Oxford University and has over 25 years’ of experience
in the banking sector. He was previously head of emerging
markets for Midland/HSBC Group mainly dealing with projects 
in Latin America. He joined Moscow Narodny Bank in 1998 as
Assistant General Manager focussing on corporate and wholesale
banking, and is now Executive Director and Head of Capital Markets.
Mr Hopkins joined the Board of Halladale in 2004. 26 Halladale Group plc | Annual Report & Accounts 2005
The directors present their report and the audited ﬁnancial
statements for the year ended 30 April 2005.
1. Activities and future prospects
The principal activities of the Group are trading, asset
management and development of property located throughout
the UK both on its own account and in co-investment vehicles. 
A full review of the Group’s business and results for the year is
contained in the Chairman’s Statement, Chief Executive’s Review,
Operational Review and Financial Review, which should be read in
conjunction with this report.
2. Results and dividends
The Group proﬁt for the year after taxation amounted to
£2,864,000. An interim dividend of 1p per share, amounting to
£275,000, was paid in February 2005 and it is proposed that a
ﬁnal dividend of 1.9p per share, amounting to £523,000, be paid
in September 2005. This leaves a surplus of £2,066,000 to be
transferred to reserves.
3. Share capital
During the year the Company issued 8,374,056 new ordinary
shares of 25p each at a price of 70p per share as a share placing
and 35,000 new ordinary shares of 25p each at a price of 59p per
share on the exercise of staff share options.
In May 2005 the Company issued a further 12,986,281 ordinary
shares at £1.10 per share. The net proceeds, after costs, were
£13.4m.
4. Substantial shareholders
As at 30 April 2005, substantial interests of 3% or more of 
the allotted and fully paid ordinary shares of the company were 
as follows:
Shares held %
MNB Strategic Investments Ltd 3,785,714 13.76
David A.S. Lockhart* 2,476,923 9.00
3i Group plc 2,220,000 8.07
Hansa Trust Plc 2,153,846 7.83
Framlington Investment Management Ltd 1,725,000 6.27
DASL Liferent Trust* 1,500,000 5.45
George S. Lockhart Trust for Niece & Nephews* 1,000,000 3.63
Frank Nominees Limited 861,538 3.13
Poss Fund Nominees Limited 841,693 3.06
*these shareholders are considered to be related (see directors’
interests below).
5. Power to allot shares 
At the forthcoming Annual General Meeting resolutions will 
be proposed to renew the directors’ power to allot, at any time
during the following ﬁve years, shares equal to up to 10% of 
the issued share capital, otherwise than on a pre-emptive basis.
6. Corporate governance
While the Combined Code issued by the Financial Reporting
Council does not apply to AIM companies, the directors consider
corporate governance to be an important area and accordingly
have provided the disclosure below to outline how the governance
of the Group is conducted.
Internal control
The directors have reviewed the effectiveness of the system of
internal control, the key elements of which are as follows:
• Board procedures to establish the parameters within which
management operate.
• The measurement of Group ﬁnancial performance on a monthly
basis against budget. On a quarterly basis this reporting 
is formalised within a report circulated to and considered 
by the Board.
• A system of authorisation and approval of expenditure,
together with relevant cheque signatory limits. 
• Detailed diligence is undertaken on each new property
acquisition including those in co-investments, comprising
agency advice, legal opinions and survey reports together with
a detailed business plan to conﬁrm viability. Each business plan
is regularly reviewed to factor-in actual performance and any
necessary amendments to assumptions.
• Careful consideration, including advice on legal, accounting
and tax implications, is given to each new vehicle established.
This includes a review of the level of the Company’s control
over future activities of the relevant vehicle, as well as a
risk/reward analysis to determine the potential proﬁtability of
each acquisition.
Directors’ responsibilities
Details of the composition of the Board are disclosed in this report.
Board meetings are held on average every two months, where 
a formal schedule of matters including, inter alia , overall strategy
and monitoring of ﬁnancial performance, is discussed.
The two undernoted committees, minutes of which are circulated
and reviewed by the directors, have operated throughout the year.
Audit Committee
The Audit Committee comprises the three non-executive directors
who have a remit to meet at least twice a year to monitor the
Group’s ﬁnancial reporting and accounting policies and the
adequacy of internal ﬁnancial controls. The Committee also
reviews interim reports, preliminary announcements and the
Annual Report and Accounts prior to their submission to the Board.
Remuneration Committee
The Remuneration Committee comprises the three non-executive
directors and meets at least once a year to determine the
remuneration and terms and conditions of employment of the
executive directors of the Company. In particular the Remuneration
Committee sets the level of discretionary bonus payments to each
of the directors. The total sum paid in bonus to the executive directors
for the year to 30 April 2005 was £975,000 (2004 – £750,000).
Additionally, the full Board acts as the Nomination Committee to
consider, when necessary, the appointment of any new directors or
company secretary.
Going concern
After making due enquiry, the directors are of the opinion that at
the time of approving the accounts, taking into account available
bank facilities, the Company and Group has adequate resources 
to continue in operational existence for the foreseeable future. 
The accounts have therefore been prepared on the going concern basis.
Directors’ report Annual Report & Accounts 2005 | Halladale Group plc 27
7. Directors
The present membership of the Board is set out on pages 24 and 25.
The directors who retire from ofﬁce by rotation under Article 24 
of the Articles of Association are A.C. Shedden and K.F. Lindsay.
Being eligible, their re-election is recommended by the Board at
the forthcoming Annual General Meeting.
On 31 January 2005 A. Robertson resigned as a director. M. Hopkins
was appointed as a director on 10 December 2004. In terms of
Article 24 of the Articles of Association, Mr Hopkins is required to
retire as a non-executive director as he was appointed during the
year ending 30 April 2005. His re-election is recommended by the
board at the forthcoming Annual General Meeting.
The directors’ interests, as deﬁned in the Companies Act 1985, in
the shares of the Company at 30 April 2005 are as follows:
Ordinary Shares
of £0.25
2005 2004
D.A.S. Lockhart 2,476,923 2,350,000
A.C. Shedden 21,538 20,000
K.F. Lindsay 20,000 20,000
M.J. Harkin 10,769 10,000
S.A. Taylor 45,147 41,923
D.A.S. Lockhart also has a beneﬁcial interest in 1,500,000 ordinary
shares of £0.25 through a liferent trust (2004 – 1,500,000) and 
a further non-beneﬁcial interest in 1,000,000 ordinary shares of
£0.25 (2004 – 1,000,000) through another liferent trust.
The following share options have been granted:
D.A.S. Lockhart *250,000 shares at 74.5p exercisable between 
28 July 2007 and 27 July 2014
K.F. Lindsay 50,847 shares at 59p exercisable between 
11 June 2004 and 10 June 2011
349,153 shares at 50p exercisable between 
11 June 2004 and 10 June 2011
40,000 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
60,000 shares at 55p exercisable between 
5 August 2006 and 4 August 2013 
*250,000 shares at 74.5p exercisable between 
28 July 2007 and 27 July 2014
M.J. Harkin 50,847 shares at 59p exercisable between 
11 June 2004 and 10 June 2011
199,153 shares at 50p exercisable between 
11 June 2004 and 10 June 2011
80,000 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
S.A. Taylor 57,142 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
272,858 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
*These options were granted on 28 July 2004.
No other director had an interest in the share capital of the
Company during the year.
8. Directors’ and ofﬁcers’ liability insurance
The Company has purchased and maintained Directors’ and
ofﬁcers’ liability insurance under the terms of Section 310(3) of the
Companies Act 1985.
9. Payment of suppliers
It is the Company’s payment policy with all suppliers to settle
outstanding accounts in accordance with the terms and conditions
agreed when placing orders.
The Company’s trade creditors balance at 30 April 2005 represents
86 days of annual purchases (2004 – 71 days).
10. Donations
The Company made no political donations in the year. Charitable
donations totalling £5,025 were made.
11. Auditors 
A resolution to reappoint Deloitte & Touche LLP as the 
Company’s auditors will be proposed at the forthcoming Annual
General Meeting.
By order of the Board
Mark J. Harkin Secretary
12 July 2005 28 Halladale Group plc | Annual Report & Accounts 2005
Statement of directors’ responsibilities
United Kingdom company law requires the directors to prepare
ﬁnancial statements for each ﬁnancial period which give a true
and fair view of the state of affairs of the Company and Group 
at the end of that ﬁnancial period and of the proﬁt or loss of the
Group for that period. In preparing those ﬁnancial statements, 
the directors are required to:
• select suitable accounting policies and then apply 
them consistently;
• make judgements and estimates that are reasonable and
prudent; and
• state whether applicable accounting standards have been
followed subject to any material departures disclosed and
explained in the ﬁnancial statements.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
ﬁnancial position of the Company and to enable them to ensure
that the ﬁnancial statements comply with the Companies Act
1985. They are also responsible for safeguarding the assets of the
Company and Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities. Annual Report & Accounts 2005 | Halladale Group plc 29
Independent auditors’ report to the 
members of Halladale Group plc
We have audited the ﬁnancial statements of Halladale Group plc
for the year ended 30 April 2005 which comprise the consolidated
proﬁt and loss account, the consolidated reconciliation of
movements in shareholders’ funds, the statements of movements
in reserves, the balance sheets, the consolidated cash ﬂow
statement and notes thereto, and the related notes 1 to 23. These
ﬁnancial statements have been prepared under the accounting
policies set out therein.
This report is made solely to the company’s members, as a body, 
in accordance with section 235 of the Companies Act 1985. 
Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the statement of directors’ responsibilities, 
the company’s directors are responsible for the preparation of 
the ﬁnancial statements in accordance with applicable United
Kingdom law and accounting standards. They are also responsible
for the preparation of the other information contained in 
the annual report. Our responsibility is to audit the ﬁnancial
statements in accordance with relevant United Kingdom legal 
and regulatory requirements and auditing standards.
We report to you our opinion as to whether the ﬁnancial
statements give a true and fair view and are properly prepared 
in accordance with the Companies Act 1985. We also report 
to you if, in our opinion, the directors’ report is not consistent
with the ﬁnancial statements, if the company has not kept proper
accounting records, if we have not received all the information
and explanations we require for our audit, or if information
speciﬁed by law regarding directors’ remuneration and
transactions with the company and other members of the group 
is not disclosed.
We read the directors’ report and the other information contained
in the annual report for the above year as described in the
contents section and consider the implications for our report 
if we become aware of any apparent misstatements or material
inconsistencies with the ﬁnancial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom
auditing standards issued by the Auditing Practices Board. 
An audit includes examination, on a test basis, of evidence relevant
to the amounts and disclosures in the ﬁnancial statements. 
It also includes an assessment of the signiﬁcant estimates and
judgements made by the directors in the preparation of the
ﬁnancial statements and of whether the accounting policies are
appropriate to the circumstances of the company and the group,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary 
in order to provide us with sufﬁcient evidence to give reasonable
assurance that the ﬁnancial statements are free from material
misstatement, whether caused by fraud or other irregularity 
or error. In forming our opinion, we also evaluated the overall
adequacy of the presentation of information in the ﬁnancial
statements.
Opinion
In our opinion the ﬁnancial statements give a true and fair view 
of the state of affairs of the company and the group as at 30 April
2005 and of the proﬁt of the group for the year then ended and
have been properly prepared in accordance with the Companies
Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Glasgow
12 July 2005
Notes: An audit does not provide assurance on the maintenance
and integrity of the website, including controls used to achieve
this, and in particular on whether any changes may have occurred
to the ﬁnancial statements since ﬁrst published. These matters are
the responsibility of the directors but no control procedures can
provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and
dissemination of ﬁnancial statements differs from legislation in
other jurisdictions. 30 Halladale Group plc |  Annual Report & Accounts 2005
2005 2004 
Notes £000 £000 £000 £000
Turnover: group and share of joint ventures 49,396 22,381
Less share of joint ventures’ turnover (18,159) (9,014)
Group turnover 2 31,237 13,367
Cost of sales (26,082) (8,173)
Gross proﬁt 5,155 5,194
Administrative expenses (4,743) (3,750)
Other operating income – 15
Operating proﬁt 412 1,459
Share of operating proﬁt in joint ventures 4,620 1,968
Share of operating proﬁt in associates 5,273 3,095
Total operating proﬁt 10,305 6,522
Interest receivable and similar income 3
Group 507 136
Joint ventures 94 12
Associates 91 25
692 173
Interest payable and similar charges 3
Group (2,986) (1,982)
Joint ventures (3,062) (1,548)
Associates (1,027) (556)
(7,075) (4,086)
Proﬁt on ordinary activities before taxation 4 3,922 2,609
Tax on proﬁt on ordinary activities 5 (1,058) (713)
Proﬁt on ordinary activities after taxation 2,864 1,896
Dividends 6 (798) (518)
Retained proﬁt for the ﬁnancial year 2,066 1,378
Earnings per ordinary share 7 10.42p 9.99p
Fully diluted earnings per ordinary share 7 8.54p 9.91p
Turnover and operating proﬁt in both years relate wholly to continuing activities.
There are no other recognised gains or losses in either year other than as presented above.
Consolidated profit and loss account
Year ended 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 31
Consolidated reconciliation of movements in
shareholders’ funds
2005 2004
£000 £000
Proﬁt for the year attributable to shareholders 2,864 1,896
Dividends on ordinary shares (798) (518)
2,066 1,378
Issue of share capital (net of expenses) 5,419 255
Recovery of VAT on issue costs previously written-off against share premium account – 42
Net movements in shareholders’ funds 7,485 1,675
Opening shareholders’ funds 11,445 9,770
Closing shareholders’ funds 18,930 11,445
Statements of movements in reserves
Year ended 30 April 2005
Capital Share Proﬁt
Capital redemption premium and loss
reserve reserve account account Total
Group £000 £000 £000 £000 £000
At 1 May 2004 176 1,772 2,413 2,307 6,668
Arising on new issue of shares – – 3,317 – 3,317
Realisation of proﬁt on joint venture property sales (100) – – 100 –
Proﬁt for the year – – – 2,066 2,066
At 30 April 2005 76 1,772 5,730 4,473 12,051
Capital Share Proﬁt
redemption premium and loss
reserve account account Total
Company £000 £000 £000 £000
As at 1 May 2004 1,772 2,413 1,051 5,236
Arising on new issue of shares – 3,317 – 3,317
Proﬁt for the year – – 2,865 2,865
At 30 April 2005 1,772 5,730 3,916 11,418 32 Halladale Group plc |  Annual Report & Accounts 2005
2005 2004
Notes £000 £000
Fixed assets
Tangible assets 8 283 309
Investments in joint ventures 9
Goodwill 30 40
Share of gross assets 59,556 21,175
Share of gross liabilities (55,176) (19,346)
4,410 1,869
Investments in associates 9 9,809 978
Other investments 5 5
14,224 2,852
Total ﬁxed assets 14,507 3,161
Current assets
Stocks 10 59,152 39,796
Debtors 11 7,724 3,590
Cash at bank and in hand 12 5,362 861
72,238 44,247
Creditors:
amounts falling due within one year 13 (11,445) (17,117)
Net current assets 60,793 27,130
Total assets less current liabilities 75,300 30,291
Creditors:
amounts falling due after more than one year 14 (46,784) (18,846)
Convertible unsecured loan stock 15 (9,586) –
Net assets 18,930 11,445
Capital and reserves
Called up share capital 18 6,879 4,777
Capital redemption reserve 1,772 1,772
Capital reserve 76 176
Share premium account 5,730 2,413
Proﬁt and loss account 4,473 2,307
Total equity shareholders’ funds 18,930 11,445
These ﬁnancial statements were approved by the Board of Directors on 12 July 2005.
David A.S. Lockhart
Director
Mark J. Harkin
Director
Consolidated balance sheet
As at 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 33 Annual Report & Accounts 2005  |  Halladale Group plc 33
2005 2004
Notes £000 £000
Fixed assets
Investments 9 13,968 3,206
Current assets
Debtors 11 50,537 33,494
Cash at bank and in hand 1,958 657
52,495 34,151
Creditors:
amounts falling due within one year 13 (32,232) (22,864)
Net current assets 20,263 11,287
Total assets less current liabilities 34,231 14,493
Creditors:
amounts falling due after more than one year 14 (6,348) (4,480)
Convertible unsecured loan stock 15 (9,586) –
Net assets 18,297 10,013
Capital and reserves
Called up share capital 18 6,879 4,777
Capital redemption reserve 1,772 1,772
Share premium account 5,730 2,413
Proﬁt and loss account 3,916 1,051
Total equity shareholders’ funds 18,297 10,013
These ﬁnancial statements were approved by the Board of Directors on 12 July 2005.
David A.S. Lockhart
Director
Mark J. Harkin
Director
Company balance sheet
As at 30 April 2005 34 Halladale Group plc |  Annual Report & Accounts 2005 34 Halladale Group plc |  Annual Report & Accounts 2005
2005 2004
Notes £000 £000
Net cash outﬂow from operations ii (17,212) (6,629)
Dividends received from joint ventures and associates 5,438 1,582
Returns on investments and servicing of ﬁnance iii (2,275) (1,651)
Taxation – (683)
Capital expenditure and ﬁnancial investment iii (61) (206)
Acquisitions and disposals iii (11,252) (243)
Equity dividends paid (660) (327)
Cash outﬂow before ﬁnancing (26,022) (8,157)
Financing iii 30,523 6,577
Increase/(decrease) in cash 4,501 (1,580)
Notes to the consolidated cash flow statement
Year ended 30 April 2005
2005 2004
i Reconciliation of net cash ﬂow to movement in net debt (note iv) £000 £000
Increase/(decrease) in cash in the period 4,501 (1,580)
Cash inﬂow from increase in debt and lease ﬁnancing (25,104) (6,280)
Change in net debt resulting from cash ﬂows (20,603) (7,860)
Loans acquired with subsidiary (3,750) –
New hire purchase agreements – (40)
Net debt at 1 May 2004 (31,980) (24,080)
Net debt at 30 April 2005 (56,333) (31,980)
2005 2004
ii Reconciliation of operating proﬁt to net cash outﬂow from operating activities £000 £000
Operating proﬁt 412 1,459
Depreciation 87 68
Goodwill amortised 10 10
Release of deferred income on sales to joint venture (100) (50)
Gain on sale of tangible ﬁxed assets – (13)
Sums written-off investments in joint venture – 20
Increase in stocks (14,744) (8,168)
Increase in debtors (5,032) (292)
Increase in creditors 2,155 337
(17,212) (6,629)
Consolidated cash flow statement
Year ended 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 35
Notes to the consolidated cash flow statement (cont)
Year ended 30 April 2005
2005 2004
iii Gross cash ﬂows £000 £000
Returns on investments and servicing of ﬁnance
Interest received 543 190
Interest paid (2,818) (1,841)
(2,275) (1,651)
Capital expenditure and ﬁnancial investment
Purchase of ﬁxtures, equipment and motor vehicles (61) (219)
Sale of ﬁxed assets – 13
(61) (206)
Acquisitions and disposals
Investments in joint ventures and associates (11,236) (243)
Realisation of investments in associates 525 –
Acquisition of subsidiary undertaking (note v) (541) –
(11,252) (243)
Financing
Issue of ordinary shares 5,419 255
VAT recovered on issue costs previously written-off – 42
Loans received 42,840 13,872
Loans repaid (17,729) (7,588)
Hire purchase repaid (7) (4)
30,523 6,577
At 1 May Acquisitions At 30 April
2004 Cash ﬂows and disposals 2005
iv Analysis of changes in net debt £000 £000 £000 £000
Cash at bank and in hand 861 4,501 – 5,362*
Debt due within 1 year (13,959) 12,413 (3,750) (5,296)
Debt due after more than 1 year (18,846) (37,524) – (56,370)
Hire purchase agreements (36) 7 – (29)
(31,980) (20,603) (3,750) (56,333)
*Of this amount, £3.226m can only be used for acquiring properties in connection with a long term loan, or in part repayment of that loan.
v Acquisition of subsidiary undertaking
During the year the Group acquired 100% of the issued share capital of Halladale (Shaftesbury) Limited for £541,000 in cash. 
The following table sets out the book value of the assets and liabilities acquired and their fair value to the Group.
Fair value Fair value to
Book value adjustment the Group
£000 £000 £000
Net assets acquired
Stocks 4,175 437 4,612
Debtors 45 – 45 
Creditors (366) – (366)
Bank loan (3,750) – (3,750)
104 437 541
Satisﬁed by cash 541
Halladale (Shaftesbury) Limited contributed £188,000 to Group turnover and £171,000 to operating proﬁt. 36 Halladale Group plc |  Annual Report & Accounts 2005
Notes to the financial statements
Year ended 30 April 2005
1. Accounting policies
The ﬁnancial statements are prepared in accordance with
applicable United Kingdom accounting standards. The particular
accounting policies adopted by the directors, which have remained
unchanged from the previous year, are described below.
(a) Accounting convention
These ﬁnancial statements have been prepared under the historical
cost convention and in accordance with all applicable accounting
standards. 
(b) Basis of consolidation
The Group ﬁnancial statements consolidate the ﬁnancial
statements of the Company and its subsidiaries for the year ended
30 April 2005 (Note 9). The results of subsidiaries acquired are
consolidated for the period from the date on which control
passed. Acquisitions are accounted for under the acquisition
method. No proﬁt and loss account is presented for Halladale
Group plc as provided by S230 of the Companies Act 1985. 
(c) Joint ventures and associates
The results of joint ventures and associates are consolidated using
the equity method of accounting. The consolidated proﬁt and loss
account includes the Group’s share of associates’ and joint
ventures’ proﬁts, while the Group’s share of the net assets of joint
ventures and associates is shown in the consolidated balance
sheet. The Group is entitled to incentivised returns on reaching
pre-established hurdles, mainly set by reference to overall returns,
in certain projects being undertaken by associates. This incentivised
return is only recognised by the Group once it is earned, normally
on the receipt of a distribution at the incentivised return rate.
(d) Income recognition
Turnover is recognised on the sale of properties held for resale or
development at the date of unconditional completion of the
contract. Other income, including rental income and management
fees, is recognised in the period to which it relates.
(e) Tangible ﬁxed assets
Depreciation is provided on all tangible ﬁxed assets at rates
calculated to write off the cost in equal instalments over their
estimated useful lives. The rates of depreciation are as follows:
Furniture and equipment 15% straight line
Computer equipment 25% straight line
Motor vehicles 25% straight line
(f) Investments
Investments in subsidiary companies are stated at cost less
provision for impairment. Other investments are stated at cost less
provision for diminution in value.
(g) Stocks
Properties held for re-sale or development are valued at the lower
of cost and net realisable value. Cost includes capitalised interest
where relevant. Net realisable value represents the estimated sales
price less costs estimated to be incurred up to the date of disposal.
(h) Interest capitalisation
For properties in the course of development, interest is capitalised
in stocks up until the date of Practical Completion. From that date,
interest is charged against proﬁt.
(i) Current tax
Current tax, including UK corporation tax is provided at amounts
expected to be paid (or recovered) using the tax rates and laws
that have been enacted or substantively enacted by the balance
sheet date.
(j) Deferred taxation
In accordance with FRS 19, deferred tax is provided in full on
timing differences which result in an obligation at the balance
sheet date to pay more tax, or a right to pay less tax, at a future
date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the
inclusion of items of income and expenditure in taxation
computations in periods different from those in which they are
included in ﬁnancial statements. Deferred tax assets are recognised
to the extent that it is regarded as more likely than not that 
they will be recovered. Deferred tax assets and liabilities are 
not discounted.
(k) Hire purchase
Assets held under hire purchase agreements and the related
obligations are recorded in the balance sheet at the fair value of
the assets at the inception of the agreements. The excess of the
payments over the recorded obligations are treated as ﬁnance
charges which are charged to the proﬁt and loss account as
incurred. Rental costs under operating leases are charged to the
proﬁt and loss account in equal annual amounts over the periods
of the leases.
(l) Goodwill
Goodwill is capitalised in the year in which it arises and amortised
over its estimated useful life. The directors regard 10 years as a
reasonable maximum for the estimated useful life of existing
goodwill. Capitalised goodwill on a fair value basis relating to joint
ventures is included within the carrying value of the joint venture.
(m) Debt
Debt is initially stated at the amount of the net proceeds after the
deduction of issue costs. The carrying amount is increased by the
ﬁnance cost in respect of the accounting period and reduced by
payments made. Convertible debt is reported as a liability unless,
and until, conversion actually occurs. Annual Report & Accounts 2005  |  Halladale Group plc 37
2. Turnover 
Turnover was contributed as follows: 
2005 2004
£000 £000
Property sales 26,926 10,171
Rental income 2,371 2,323
Management fees 1,224 732
Other income from asset management 716 141
31,237 13,367
All turnover was attributable to activities within the United Kingdom in both years.
3. Interest
Receivable
2005 2004
£000 £000
Bank interest 314 55
Sums held on escrow 75 –
Loans to associates and joint ventures 118 81
507 136
Share of interest receivable by joint ventures 94 12
Share of interest receivable by associates 91 25
692 173
Payable
2005 2004
£000 £000
Bank loans and overdrafts
Repayable outwith 5 years 438 457
Repayable within 5 years 1,980 1,406
2,418 1,863
Capitalised interest (205) (27)
2,213 1,836
Convertible unsecured loan stock 672 –
Other loans 101 143
Other interest – 3
2,986 1,982
Share of interest payable by joint ventures 3,062 1,548
Share of interest payable by associates 1,027 556
7,075 4,086 38 Halladale Group plc |  Annual Report & Accounts 2005
4. Proﬁt on ordinary activities before taxation
2005 2004
£000 £000
a. Proﬁt on ordinary activities before taxation is stated after charging:
Auditors’ remuneration – audit fees 60 56
– other services 95 78
155 134
Depreciation on owned assets 73 55
Depreciation on assets held under hire purchase 14 13
87 68
Rentals payable on operating leases 27 27
2005 2004
£000 £000
b. Salaries 2,894 2,111
Social security costs 348 289
Other pension costs 156 148
3,398 2,548
c. Directors’ remuneration 1,651 1,320
Directors’ fees 54 42
Directors’ pension contributions 133 118
1,838 1,480
d. Remuneration of highest paid director
Emoluments 540 480
Pension contributions 47 41
587 521
e. Average staff numbers in the year 22 20
5. Tax on proﬁt on ordinary activities
2005 2004
£000 £000
United Kingdom Corporation Tax
Current at 30% (2004 – 30%) 189 (254)
Prior year adjustment (5) 5
Current tax charge/(credit) 184 (249)
Deferred – origination and reversal of timing differences (164) 92
Deferred – prior year adjustment 6 4
26 (153)
Share of tax of associated companies 1,062 765
Share of tax of joint venture companies (30) 101
Total tax charge 1,058 713
Notes to the financial statements (cont)
Year ended 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 39
Reconciliation of tax charge
The standard rate of current tax for the year, based on the UK standard rate of corporation tax, is 30% (2004 – 30%). The actual tax
charge for the current and prior years differs from 30% for the reasons set out in the following reconciliation:
2005 2004
£000 £000
Proﬁt before tax 3,922 2,609
Tax on proﬁt at 30% 1,177 783
Factors affecting charge:
Proﬁt on sale of properties previously transferred intra-group (225) (45)
Permanent difference 34 24
Capital allowances for the year in excess of depreciation 45 3
Rate differences (35) –
Deferred tax asset on inter-company proﬁts not realised (23) (95)
Unrecognised movement in deferred tax 106 (54)
Unrecognised proﬁt on management fees to associates 142 –
Share of Associate and Joint Venture Companies tax charge (1,032) (870)
Current tax charge/(credit) for the year 189 (254)
6. Dividends
2005 2004
£000 £000
Interim ordinary dividend paid of 1.0p per share (2004 – 0.7p) 275 133
Final ordinary dividend proposed of 1.9p per share (2004 – 1.4p) 523 385
798 518
7. Earnings per share
Earnings per share are calculated on the Group proﬁt after tax divided by the weighted average number of shares in issue during the year,
as follows:
2005 2004
Proﬁt Number Pence per Proﬁt Number of Pence per 
of shares share shares share
£000 p £000 p
Earnings per share 2,864 27,495,723 10.42 1,896 18,982,500 9.99
Dilutive potential shares 519 12,131,486 – 143,486
Fully diluted earnings per share 3,383 39,627,209 8.54 1,896 19,125,986 9.91
Dilutive potential shares represent the number of additional shares which would require to be issued on exercise of share options at the
year end based on the difference between the option price and the average share price throughout the year and the Convertible
Unsecured Loan Stock at the conversion price of 87.5p assuming conversion at the beginning of the year. 40 Halladale Group plc |  Annual Report & Accounts 2005
8. Tangible ﬁxed assets
Furniture & Computer Motor
equipment equipment vehicles Total
£000 £000 £000 £000
Group
Cost
At 1 May 2004 211 152 56 419
Additions 18 43 – 61
At 30 April 2005 229 195 56 480
Depreciation
At 1 May 2004 (36) (61) (13) (110)
Charge for year (31) (42) (14) (87)
At 30 April 2005 (67) (103) (27) (197)
Net book value
At 30 April 2005 162 92 29 283
At 30 April 2004 175 91 43 309
The net book value of the Group’s ﬁxed assets includes £29,000 (2004 – £43,000) in respect of assets held under hire purchase agreements.
9. Fixed asset investments
2005 2004
£000 £000
Group
Investment in joint ventures
Goodwill 30 40
Share of gross assets 59,556 21,175
Share of liabilities due within one year (2,809) (1,234)
Share of liabilities due outwith one year (52,367) (18,112)
4,410 1,869
Investment in associates
Goodwill – 8
Share of gross assets 47,906 10,999
Share of liabilities due within one year (2,343) (1,589)
Share of liabilities due outwith one year (35,754) (8,440)
9,809 978
Other investments 5 5
14,224 2,852
Notes to the financial statements (cont)
Year ended 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 41
Investments
Joint ventures Associates Other Total
£000 £000 £000 £000
Investment in shares/partners capital at cost 2,621 2,600 5 5,226
Long term loans 1,790 6,924 – 8,714
Share of prior year retained reserves 217 448 – 665
Share of current year post tax proﬁt 1,682 3,275 – 4,957
Realisation of deferred proﬁt 100 – – 100
Dividends received (2,000) (3,438) – (5,438)
Total 4,410 9,809 5 14,224
As at 30 April 2004 1,869 978 5 2,852
New investments in shares/partners capital 1,600 2,595 – 4,195
New loans 1,169 5,872 – 7,041
Reclassiﬁcation of loans from other debtors – 1,052 – 1,052
Goodwill amortised (10) – – (10)
Investments realised in year – (525) – (525)
Share of current year post tax proﬁt 1,682 3,275 – 4,957
Realisation of deferred proﬁt 100 – – 100
Dividends received (2,000) (3,438) – (5,438)
At 30 April 2005 4,410 9,809 5 14,224
Of long term loans to joint ventures and associates totalling £8,714,000, £6,298,000 are interest bearing and £2,416,000 are non-interest
bearing. These loans are subordinated to senior debt in each vehicle and will be repaid as the relevant vehicle disposes of property.
Additional disclosures
Additional information is required under FRS 9 when associates or joint ventures cumulatively or individually exceed certain thresholds with
respect to the Group. The required disclosure, being the Group’s share of the undernoted information for the relevant entities, is as given
below. In addition, Halladale Haworth (Newton Abbot) Limited and Halladale Haworth (Carlisle) Limited, together contributed £3,549,000
to the Group’s proﬁt before tax, the tax on which was £832,000. These companies are in members voluntary liquidation at the year end.
Joint ventures Associates
£000 £000
Turnover 18,159 7,607
Fixed assets 13,657 11,680
Current assets 45,989 35,964
Liabilities due within one year (2,809) (2,055)
Liabilities due after more than one year (53,829) (44,214)
Joint ventures Associates
Halladale
Opportunity Halladale
Halladale Fund Limited Oban Bay Portfolio
Ventures Ltd Partnership Properties Ltd Finance Ltd
£000 £000 £000 £000
Turnover 3,719 12,330 1,942 2,000
Proﬁt before tax (532) 1,967 264 246
Tax 95 – (66) (69)
Fixed assets – 3,583 – –
Current assets 41,460 954 3,100 383
Liabilities due within one year (1,446) (729) (253) (289)
Liabilities due outwith one year (37,893) (3,582) (2,414) – 42 Halladale Group plc |  Annual Report & Accounts 2005
9. Fixed asset investments (cont)
Subsidiary Associates & Other
companies joint ventures investment Total
£000 £000 £000 £000
Company
Ordinary shares
At 1 May 2004 999 1,583 5 2,587
Realised in year – (525) – (525)
Purchased in year – 4,194 – 4,194
At 30 April 2005 999 5,252 5 6,256
Long term loan
At 1 May 2004 – 619 – 619
Advanced in year – 6,041 – 6,041
Reclassiﬁed from debtors – 1,052 – 1,052
At 30 April 2005 – 7,712 – 7,712
Total at 30 April 2005 999 12,964 5 13,968
Total at 30 April 2004 999 2,202 5 3,206
The principal companies in which the Company’s interest is more than 10% are as follows:
Company name Principal activity Country of registration % of equity held
Subsidiary undertakings
Halladale Developments Ltd Property trading/development Scotland 100%
and management services
Halladale Asset Management Ltd Property enhancement Scotland 100%
Finford Management Ltd Property management Scotland 100%
Geranium Properties Ltd Property trading and development England 100%
Halladale Investments Ltd Property trading and development Scotland 100%
Halladale (Queen Street) Ltd Property trading and development Scotland 100%
Halladale (Stafford) Ltd Property trading and development Scotland 100%
Halladale (Newport) Ltd Property trading and development Scotland 100%
Halladale (Shaftesbury) Ltd Property trading and development Scotland 100%
Halladale Properties (London) Ltd Property trading and development England 100%
Halladale Ofﬁce (One) Ltd Property trading and development England 100%
Halladale (Woolwich) Ltd Property trading and development Scotland 100%
Halladale Land Ltd Property trading and development Scotland 100%
Halladale Properties Ltd Property trading and development Scotland 100%
Halladale Investments (London) Ltd Property trading and development England 100%
Halladale (CReAM) Ltd Holder of shares in general partners England 100%
of limited partnerships
Halladale LP Ltd Holder of interest in limited Scotland 100%
partnerships
Halladale GP Ltd Holder of shares in general partners 
of limited partnerships Scotland 100%
Halladale (Isle of Wight) Ltd Property trading and development Scotland 100%
Halladale General Partner Ltd Holder of shares in general partners 
of limited partnerships England 100%
Halladale Property Holdings Ltd Intermediate holding company Scotland 100%
Notes to the financial statements (cont)
Year ended 30 April 2005 Annual Report & Accounts 2005  |  Halladale Group plc 43
Company name Principal activity Country of registration % of equity held
Joint ventures
Halladale Ventures Ltd Property trading and development Scotland 50% 
Halladale (Brentwood) Ltd Property trading and development Scotland 50% 
Halladale Ventures (Scotland) Ltd Property trading and development Scotland 50%
Halladale Ventures (Brook) Ltd Property trading and development England 50% 
Oban Bay Properties Ltd Property trading and development Scotland 75%
The Group’s beneﬁcial interest in Oban Bay 
Properties Limited is 50%
Associates
Bowen Square Properties Ltd Property trading and development England 10% 
Halladale Portfolio Finance Ltd Property trading and development England 10.1%
Woodley Finance Limited Property trading and development England 20% 
The Company also holds interests in the following limited partnerships:
% interest of 
Limited partnership Principal activity Country of registration Company
Joint ventures
Halladale Opportunity Fund Limited Partnership Property trading and development England 50%
Halladale Opportunity Fund No.2 Limited Partnership Property trading and development England 50%
Brook Properties Limited Partnership Property trading and development Jersey 50%
Associates
The Cockhedge Retail Limited Partnership Property trading and development Scotland 6%
The Anglo Halladale Limited Partnership Property trading and development England 9%
The Anglo Halladale No.2 Limited Partnership Property trading and development England 30%
The Anglo Halladale No.3 Limited Partnership Property trading and development England 30%
Halladale Nelson Limited Partnership Property trading and development England 9.36%
Cumbernauld Retail Park Limited Partnership Property trading and development Scotland 20%
CPI Retail Active Management Programme Property trading and development Scotland 10%
Limited Partnerships
10. Stocks 
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Properties held for resale or development 59,152 39,796 – –
Included in these ﬁgures is £232,000 (2004 – £490,000) of capitalised interest. 44 Halladale Group plc |  Annual Report & Accounts 2005
Notes to the financial statements (cont)
Year ended 30 April 2005
11. Debtors
Group Company
2005 2004 2005 2004
£000 £000 £000 £00
Trade debtors 149 154 – 24
Amounts due by Group companies – – 48,676 31,372
Amounts due by associates and joint ventures 748 1,835 748 1,835
Other debtors 5,681 894 692 119
Deferred tax asset (note 17) 267 103 – –
Corporation tax debtor 239 223 – –
Prepayments 640 381 421 144
7,724 3,590 50,537 33,494
All debtors are considered to be due within one year.
12. Cash at bank and in hand
Cash at bank and in hand in the Group includes £3.226m which can only be used for acquiring properties in connection with a long term
loan or in part repayment of that loan.
13. Creditors: Amounts falling due within one year
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Bank loans 4,796 13,709 – –
Other loans 500 250 500 250
Trade creditors 926 471 164 146
Corporation tax 214 – 166 –
Other taxes and social security 543 136 473 8
Proposed dividend 523 385 523 385
Hire purchase creditor 29 36 – –
Amounts owed to Group undertakings – – 30,046 21,940
Accrued charges and deferred income 3,914 2,130 360 135
11,445 17,117 32,232 22,864
A bank loan of £4,690,000 bears interest at 4% over base rate and is secured by a ﬁrst ranking security over an asset held in stock and a
bond and ﬂoating charge over all the assets of Halladale (Queen Street) Limited. The balance of £106,000 is the current tranche of a loan
due outwith one year. 
Other loans of £500,000 are the current tranche of a loan due outwith one year.  Annual Report & Accounts 2005  |  Halladale Group plc 45
14. Creditors: Amounts falling due after more than one year
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Bank loans 45,784 17,346 5,348 2,980
Other loans 1,000 1,500 1,000 1,500
46,784 18,846 6,348 4,480
Of the total bank loans, £4,046,000 (2004 – £4,258,000) bears interest at 10.29% ﬁxed, and is secured by ﬁrst ranking standard
securities over certain of the properties held in stock and a bond and ﬂoating charge over all the assets of Halladale Investments Limited. 
A loan of £8,720,000 (2004 – £8,720,000), shown net of ﬁnance costs of £17,000 which are being charged to proﬁt and loss account
over the life of the loan, bears interest at 1.25% over LIBOR and is secured by a ﬁrst charge over properties and a debenture over the
assets of Geranium Properties Limited. 
A loan of £4,750,000 (2004 – £nil) bears interest at 1.75% over base rate and is secured over the assets of Halladale (Newport) Limited
and Halladale (Isle of Wight) Limited. Loans totalling £10,370,000 (2004 – £nil) shown net of ﬁnance costs of £43,000 which are being
charged to proﬁt and loss account over the life of the loan, bear interest at 1.25% over base rate and are secured over the assets of
Halladale Investments (London) Limited.
A loan of £12,671,000 (2004 – £nil), shown net of ﬁnance costs of £61,000 which are being charged to proﬁt and loss account over the
life of the loan, bears interest at 1.5% over base rate and is secured over the assets of Halladale (Stafford) Limited. 
Loans totalling £2,180,000 (2004 – £2,180,000) bear interest at a ﬁxed rate of 10% p.a. and are secured by a second charge over the
assets of Geranium Properties Limited.
A loan of £3,168,000 (2004 – £800,000) bears interest at a ﬁxed rate of 8.5% p.a. and is secured by a second charge over the assets of
Halladale (Stafford) Limited.
Other loans represent sums advanced by The Throgmorton Trust plc, a shareholder. These sums are unsecured, bear interest at 8% per
annum ﬁxed and are repayable in tranches from 30 June 2002 to 30 June 2007. The tranche of £500,000 due on 30 June 2005 is shown
in Creditors: Amounts falling due within one year (note 13).
Bank loans are repayable as follows:
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Due within 1–2 years 26,172 2,435 2,180 –
Due within 2–5 years 16,415 11,503 3,168 2,980
Due after more than 5 years 3,197 3,408 – –
45,784 17,346 5,348 2,980
The loans due outwith ﬁve years are the relevant portion of loans being repaid in tranches from 2001 to 2014. 46 Halladale Group plc |  Annual Report & Accounts 2005
Notes to the financial statements (cont)
Year ended 30 April 2005
15. Convertible unsecured loan stock
On 14 May 2004 the company issued £10m 7% Convertible Unsecured Loan Stock (CULS). The CULS are convertible at the option of the
holder at any time after 17 March 2007 into ordinary shares at the rate of 200 new ordinary shares per each £175 of nominal value. 
If conversion does not take place before May 2011 the shares are redeemed at par. Interest is payable six monthly in arrears. The CULS
are shown at par less costs of issue totalling £483,000 which are being amortised to proﬁt over seven years.
2005 2004
£000 £000
Group and Company
Convertible Unsecured Loan Stock 10,000 –
Costs of issue (483) –
Issue costs amortised in year 69 –
9,586 –
16. Financial assets and liabilities
The Group holds ﬁnancial instruments only to manage the interest rate risk arising from its borrowings. As all transactions are undertaken
in sterling and within the UK, there is no perceived currency risk. No speculative transactions are permitted.
The Group’s borrowings, other than one loan of £1,500,000 (2004 – £1,750,000) and the CULS (note 15), are wholly in relation to and
secured by properties held as stock. Accordingly a relatively short term view is required to be considered when reviewing the interest rate
risk. This risk is managed by securing a mixture of ﬁxed and ﬂoating rate debt and by the use of interest rate swaps. The actual balance
of these measures is determined by the nature of the asset to which the borrowing relates and is established and reviewed in consultation
with the relevant lender.
The Group has deﬁned ﬁnancial assets and liabilities as those of a ﬁnancial nature, being cash and borrowings. Short term debtors and
creditors, taxation and prepayments and accruals are not considered.
2005 2004
£000 £000
Financial assets
Cash at bank and in hand 5,362 861
Financial liabilities
Bank loans 50,580 31,055
Other loans 1,500 1,750
Convertible Unsecured Loan Stock 9,586 –
61,666 32,805
Loans repayable in 
One year or less, or on demand 5,296 13,959
Within one to two years 26,672 3,185
Within two to ﬁve years 16,915 12,253
Over ﬁve years 12,783 3,408
61,666 32,805
The interest proﬁle of the Group’s ﬁnancial liabilities at 30 April 2004 and 30 April 2005 were:
Weighted 
average
Weighted period for 
average ﬁxed which rate is 
Floating rate Fixed rate Total interest rate ﬁxed (years)
30 April 2005 £000 £000 £000
Bank loans 41,080 9,500 50,580 9.63% 5.34
Other loans – 1,500 1,500 8% 1.17
Convertible Unsecured Loan Stock – 9,586 9,586 7% 6.00
41,080 20,586 61,666 Annual Report & Accounts 2005  |  Halladale Group plc 47
Weighted 
average
Weighted period for 
average ﬁxed which rate is 
Floating rate Fixed rate Total interest rate ﬁxed (years)
30 April 2004 £000 £000 £000
Bank loans 23,662 7,393 31,055 10.17% 5.48
Other loans 0 1,750 1,750 8.00% 2.17
23,662 9,143 32,805
Floating rate loans bear interest based on short term inter-bank rates (mainly 3 month LIBOR) and base rates.
Book value Fair value
2005 2004 2005 2004
£000 £000 £000 £000
Cash at bank and in hand 5,362 861 5,362 861
Bank loans (50,580) (31,055) (51,438) (31,903)
Other loans (1,500) (1,750) (1,507) (1,766)
Convertible Unsecured Loan Stock (9,586) – (9,586) –
(56,304) (31,944) (57,169) (32,808)
Fair value has been calculated using a discounted cash ﬂow approach. It is the intention of the Group to repay its bank and other loans 
at maturity.
Borrowing facility
The Group’s various undrawn committed borrowing facilities are:
2005 2004
£000 £000
Expiring in:
One year or less, or on demand 1,500 1,500
17. Deferred tax asset
Deferred tax
£000
1 May 2004 103
Credit to proﬁt and loss account – current year 164
As at 30 April 2005 267
Analysis of the deferred tax balances are as follows:
2005 2004
£000 £000
Excess of capital allowances over depreciation (1) 3
Asset arising on inter-company proﬁts not realised 219 100
Other timing differences 49 –
267 103
Deferred tax has been computed at the expected long term rate of 30% (2004 – 30%). 48 Halladale Group plc |  Annual Report & Accounts 2005
Notes to the financial statements (cont)
Year ended 30 April 2005
18. Called up share capital 
2005 2004 2005 2004
No. No. £000 £000
Authorised
Ordinary shares at £0.25 each 96,000,000 96,000,000 24,000 24,000
Redeemable deferred shares at £1.00 each 1,546,875 1,546,875 1,547 1,547
97,546,875 97,546,875 25,547 25,547
Allotted, issued and fully paid
Ordinary shares of £0.25 each 27,516,556 19,107,500 6,879 4,777
During the year the company issued 8,374,056 new ordinary shares of 25p each at a price of 70p per share as a share placing and
35,000 new ordinary shares of 25p each at a price of 59p per share on the exercise of staff share options. 
After the year end, on 16 May 2005, the company issued a further 12,986,281 new ordinary shares at 110p per share as a placing and
open offer.
19. Contingent liabilities 
Halladale Group plc has guaranteed bank loans totalling £9,792,000 (2004 – £12,283,000) to subsidiary companies.
The company has guaranteed interest shortfall in favour of Bank of Scotland in connection with a loan to Anglo Halladale No.3 Limited
Partnership. The guarantee is limited to £175,000 p.a. but subsists until the property is sold.
20. Commitments
At 30 April 2005 the Group was committed to making the following payments during the next year under operating leases:
2005 2004
£000 £000
Lease which expire:
After more than ﬁve years 27 27
21. Pension commitments
Contributions are made payable to the personal pension plans of the Group’s eligible employees on the basis of a ﬁxed percentage of salary.
The pension costs charged to the proﬁt and loss account of the Group amounted to £156,000 (2004 – £148,000) for the year.
22. Proﬁt of parent company
As permitted by Section 230 of the Companies Act 1985, the proﬁt and loss account of the Company is not presented as part of these
ﬁnancial statements. The parent Company’s proﬁt for the year amounted to £2,865,000 (2004 – £1,446,000). Annual Report & Accounts 2005  |  Halladale Group plc 49
23. Related party transactions
At the year end, Halladale Group plc had loans due from its associates and joint ventures as follows:
Loan Loan
2005 2004
£000 £000 % Share
Bowen Square Properties Limited 299 299 10
Oban Bay Properties Limited 449 449 50
Halladale Portfolio Real Estate Limited – 36 10.1
The Cockhedge Retail Limited Partnership 626 626 6
Halladale Nelson Limited Partnership 1,000 – 9.35
Halladale Opportunity Fund Limited Partnership 620 620 50
The Anglo Halladale Limited Partnership 426 426 9
The Anglo Halladale No.2 Limited Partnership 3,158 –30
The Anglo Halladale No.3 Limited Partnership 1,714 –30
Halladale Opportunity Fund No.2 Limited Partnership 1,170 –50
9,462 2,456
The Group invoiced the following amounts in the year in respect of management fees and acquisition fees:
Outstanding
2005 2004 at year end
£000 £000 £000
Halladale Ventures Ltd 438 75 –
Bowen Square Properties Ltd 56 50 –
Woodley Real Estate Ltd 7 40 –
Halladale Portfolio Finance Ltd 30 75 –
The Cockhedge Retail Limited Partnership 95 50 –
CPI Retail Active Management Programme Limited Partnership 128 ––
Halladale Opportunity Fund Limited Partnership 48 48 –
Halladale Opportunity Fund No.2 Limited Partnership 5 ––
The Anglo Halladale Limited Partnership 50 ––
The Anglo Halladale No.2 Limited Partnership 33 ––
Cumbernauld Retail Park Limited Partnership 68 ––
Halladale Nelson Limited Partnership 52 ––
Halladale Haworth Newton Abbot Limited and Halladale Haworth Carlisle Limited 65 82 –
1,075 420 –
During the year, subsidiaries of Halladale Group plc sold properties to the Halladale Nelson Limited Partnership for total consideration of
£17.375m. In addition, Halladale Haworth Newton Abbot Limited (then an associate of the group) sold property to CPI Retail Active
Management Programme (No.1) Limited Partnership (also an associate), for consideration of £18.85m. Both of these transactions were
conducted on an arms-length basis. No such transactions occurred in the year ended 30 April 2004. 50 Halladale Group plc |  Annual Report & Accounts 2005
Proforma unaudited consolidated balance sheet
As at 30 April 2005
2005 2004
£000 £000
Fixed assets
Tangible assets 283 309
Investments 20,389 6,811
20,672 7,120
Current assets
Stocks 62,543 42,862
Debtors 7,724 3,590
Cash at bank and in hand 5,362 861
75,629 47,313
Creditors: Amounts falling due within one year (11,445) (17,117)
Net current assets 64,184 30,196
Total assets less current liabilities 84,856 37,316
Creditors: Amounts falling due after more than one year (46,784) (18,846)
Convertible Unsecured Loan Stock (9,586) (0)
28,486 18,470
Capital and reserves
Called up share capital 6,879 4,777
Capital redemption reserve 1,772 1,772
Capital reserve 76 176
Share premium account 5,730 2,413
Revaluation reserve 9,556 7,025
Proﬁt and loss account 4,473 2,307
Total shareholders’ funds 28,486 18,470
The unaudited proforma balance sheet was prepared using the Group’s accounting policies as amended to include such adjustments as
the directors consider appropriate to reﬂect the impact of open market valuations arising from review of properties held for resale and
those held in joint ventures and associates undertaken by DTZ Debenham Tie Leung and FPD Savills as at 31 March 2005. This is the only
amendment to net assets.  Annual Report & Accounts 2005  |  Halladale Group plc 51
Five year record
2005 2004 2003 2002 2001
(Note 1)
Proﬁt before tax £3.92m £2.61m £1.69m £1.15m £0.85m
Earnings per ordinary share (pence) 10.42 9.99 7.21 5.34 7.66
Dividends per ordinary share (pence) 2.9 2.1 1.6 1.25 –
Proforma triple net asset value per ordinary share (pence) 90.91 82.46 68.41 63.65 55.16
Total portfolio under management £450m £205m £145m £116m £60m
Total transactions in portfolio under management £347m £155m £120m £82m £34m
Note 1 – As restated for the implementation of FRS 19 in April 2002. 52 Halladale Group plc |  Annual Report & Accounts 2005
Shareholder information
Financial calendar
Year end 30 April 2005
Year end results announced 12 July 2005
Annual Report published 19 August 2005
Annual General Meeting 13 September 2005
Secretary
M.J. Harkin BAcc, CA
Registered ofﬁce
93 West George Street
Glasgow G2 1PB
Company number
SC134255
Professional advisors
Independent auditors
Deloitte & Touche LLP
Glasgow
Broker and nominated advisor
Collins Stewart
8th Floor, 88 Wood Street
London EC2V 7QR
Solicitors
Eversheds LLP
Senator House
85 Queen Victoria Street
London EC4V 4JL
McGrigors
Paciﬁc House
70 Wellington Street
Glasgow G2 6SB
Valuers
DTZ Debenham Tie Leung
One Curzon Street
London W1A 5PZ
FPD Savills
20 Grosvenor Hill
London W1K 3HQ
Clearing bank
Bank of Scotland
Glasgow Central Branch
Gordon Street
Glasgow G1 3RS
Registrars
Capita Registrars Limited
Northern House
Woodsome Park Fenay Bridge
Huddersﬁeld HD8 0LA Designed and Produced by Rare Corporate Design, London