ANNUAL 
REPORT 
AND 
ACCOUNTS 
2004 Grainger Trust is the UK’s largest quoted residential
property investor owning over 12,000 units. This core
business is supplemented by our development and
trading division, which is active in the delivery of
residential and mixed use developments. In addition 
to our traditional long-term businesses we are making
progress in growth markets such as life tenancies 
and mainland Europe. 
01 2004 Highlights
02 At a Glance
04 Chairman’s Statement
06 Chief Executive’s Statement
10 Operating and Financial Review
16 Corporate Social 
Responsibility Report
21 Board Members
22 Corporate Governance Report
25 Directors’ Report
27 Remuneration Committee Report
31 Independent Auditors’ Report
32 Financial Statements 2004 
47 Notice of the Annual 
General Meeting
48 Five Year Record
49 Shareholders’ Information
50 Advisers
51 Glossary of Terms
52 Corporate Addresses Bromley joint venture results 
consolidated for the first time
Commercial investment portfolio 
rationalised
Successful refinancing of debt 
portfolio
Gearing down to 103% from 
125%
Market value of all properties 
£1.4 billion
Profit before tax and exceptional 
interest rises 23% to £59.6m
Earnings per share before exceptional 
interest up by 25% to 149.7p
Dividends up to 23.24p for full year, 
increase of 42%
Net asset value per share advances 
by 25%
Share split and new dividend policy
announced
PROFIT BEFORE TAX*
(£ MILLIONS)
EARNINGS PER SHARE*
(PENCE) 
NET ASSET VALUE
†
PER SHARE (£)
DIVIDENDS PER SHARE
(PENCE)
2002 2001 2003 2004
44.9
21.1
48.5
59.6
2002 2001 2003 2004
96.4
52.9
119.8
149.7
2002 2001 2003 2004
14.18
12.33
16.31
23.24
2002 2001 2003 2004
17.24
13.56
21.94
27.34
Annual report and accounts 2004
Grainger Trust plc
01
2004 Highlights
*excluding exceptional interest
†
after adjusting for the market value of trading properties and investments Grainger Trust plc
Annual report and accounts 2004
02
At a Glance
Total market value of property assets
£1.4bn
Total operating contribution*
£107.2m
*profit on ordinary activities before
interest and taxation and excluding
administration expenses
Bulk of income comes from trading activities and realisation of reversionary
surpluses, so alternatives to yield based valuation measures also presented.
Focus is therefore on profit before tax, earnings per share and net asset value.
Use of NAV , diluted NAV and Grainger NAV which takes account of long-term
reversionary surplus in our core portfolios.
At individual project level, performance criteria such as cash generation,
internal rate of return, profitability and strategic positioning used.
Major risk relates to state of housing market, linked to interest rates and
general economic environment.
Risk minimised by:
•
Portfolio is geographically widespread, reduces cluster risk
•
Portfolio spread across property types and values, reducing exposure 
to highly fluctuating top-end properties
•
Relatively low average value where demand is consistent and strong
•
Regulated properties are unmodernised on vacancy so demand tends 
to be high
Long-term view taken and financial stability enables short-term price
fluctuations to be withstood.
All activities characterised by cash generation, high trading margins and
willingness to take long-term view.
Regulated tenancy market diminishing, but we maintain position by 
active purchasing.
Review new and expanding business opportunities – life tenancies, European
investment, development and trading, asset and property management.
At plc level, key criteria is total shareholder return. 
Business review
Performance criteria
Risk review
Group operations are
defined by the following:
Our residential portfolio is managed 
by a network of six offices supported
by managing agents in remote areas,
giving us a nationwide presence:
1. Altrincham
2. Epsom
3. Harborne
4. London
5. Martlesham
6. Newcastle upon Tyne
Managing our portfolio
4
2
5
1
3
6
The facts
Over the last five years our gross assets have
increased from £0.4bn to £1.5bn
Over the last five years our share price has grown 
by 362%, the FTSE 250 by 10%
The vacant possession value of our most expensive
residential property is £1.5m; the cheapest £15,000
We own a total of 12,041 residential units with 
vacant possession value of £1.9bn; these units 
have cost us £0.9bn
Two-thirds of our portfolio is valued between 
£100,000 and £250,000
Group structure
Grainger Trust plc
Tenanted residential division
Grainger Trust plc
Development and trading division Annual report and accounts 2004
Grainger Trust plc
03
Market value of property assets by division
£1.3bn
Proportion of group operating contribution*
76%
Operating contribution* by division
£81.9m
Number of properties by division
12,041
Market value of property assets by division
£109m
Proportion of group operating contribution*
24%
Operating contribution* by division
£25.3m
Divisional key characteristics: long-term business,
highly cash generative, high margins.
Divisional key characteristics: opportunistic
and entrepreneurial.
Within this division, contributions 
come from two areas of operation:
Within this division, contributions 
come from three areas of operation:
Key features:
•
Translates green and brownfield sites into 
residential or mixed use developments
•
Highly profitable but complicated long-term
business. 
•
Involves negotiations with planners, local
communities and councils
Major sites:
Kennel Farm, Basingstoke; West Waterlooville, 
Hampshire; Widdrington/Hadston, Northumberland
Key features:
•
Uses group’s asset base, expertise or equity 
type funding
•
Often in partnerships with housing associations, 
local developers and councils
Major sites:
South London Hospital, Clapham; Macaulay Road,
Clapham; Hornsey Road/Barnsbury, Islington, 
Smith Docks, North Shields
Key features:
•
Small scale niche house building mostly in 
North East of England
•
Produces consistent levels of cash and 
trading margins
Major sites:
The Kylins, Morpeth; Grangewood, Widdrington; 
Kingsfield, Seahouses; Omega Apartments,
Birmingham
Grainger Homes
Land and regeneration
Residential development
Regulated (Investment value: £939m)
Key features:
•
Tenant has security of tenure
•
Rents set by rent officer and increases capped at 
retail price index +5% over two years
•
Purchased at discount to vacant possession value and 
sold on vacancy
•
Approximately 8% of the portfolio becomes vacant every year
•
No new regulated tenancies being created
Characteristics: Low rental yield, high margin on sales.
Life tenancy (Investment value: £167m)
Key features:
•
Tenant has security of tenure
•
No rental income
•
Whole or partial ownership purchased at discount to 
vacant possession
•
Property sold on vacancy
•
No maintenance obligation
Characteristics: No rental yield, high sales margin.
Assured, vacant and others (Investment value: £223m)
Key features:
•
Market rented tenancies (£136m)
•
Vacants to be sold (£49m)
•
Other (including ground rents and serviced apartments £38m)
Characteristics: Market yield, some margin on sale.
Net rental income
Key features:
•
Net rental income derived from regulated and assured
tenancies after maintenance and management expenditure
Asset and management fees 
Key features:
•
Fee based activities remunerated by asset and property
management fees
Characteristics: Management skills adapted to provide
additional fee income with no capital investment.
Rental and management
Trading
Development and trading division Tenanted residential division Grainger Trust plc
Annual report and accounts 2004
04
Chairman’s
Statement
Property expertise: 
This has been a landmark year for
Grainger Trust. We have achieved
record levels of profits, asset 
and share price growth as well 
as making significant progress in 
our key strategic objectives. The
year under review has also been
important as it represents the first
12 month period in which our
Bromley joint venture has been
wholly owned and incorporated
into the year’s results.
Robert Dickinson
Chairman
+14%
Portfolio market value
The value of our core tenanted residential 
portfolio has increased by 14% to £1.3bn.
+30%
Grainger net asset value
Net asset value per share of £24.00, 
up from last years figure of £18.40.
+23%
Profit before tax and exceptional interest
A 23% increase over the previous year.
Share price performance
1999–2004
Performance of our share price
compared to FTSE Real Estate and
FTSE 250 companies.
Grainger Trust FTSE Real Estate FTSE 250 Index
We have continued to focus on our core 
tenanted residential business and we have
increased the market value of this portfolio by 
14% to £1.3 billion. Our total gross assets at
market value now stand at £1.5 billion. We have
maintained our leading position as the largest
quoted investor in the long-term residential market
by purchasing 486 regulated and 374 life tenancy
units in the year. We have invested considerable
management time and energy in positioning 
our life tenancy activities and believe that we 
are now well placed to take advantage of this
exciting business opportunity. Our rationalisation 
of the commercial investment portfolio has been
completed at a significant profit and we now have
greater clarity and focus in our development and
trading activities. 
To help lay the foundations for the group’s 
future growth, we completed a highly successful
refinancing of our debt portfolio with a more
flexible funding platform that will enable us to
take full advantage of opportunities as they
become apparent. 
Results
The strong residential market, as well as a good
performance from Grainger development and
trading division, have been the major drivers of 
the year’s record results. I am pleased to report
that Grainger has produced profits before tax 
and exceptional interest of £59.6m for the year 
to 30 September 2004, a 23% increase over 
the previous year’s £48.5m. As a result earnings 
per share before exceptional interest have 
grown 25% to 149.7p. 
Net assets
Net assets per share have grown by 25% to
£27.34 from £21.94. Fully diluted net asset 
value, taking into account contingent tax and the
market value of our long-term debt and hedging,
has increased by 34% to £18.62 from £13.91.
Grainger net asset value, which incorporates an
estimate of the reversionary surplus within our core
portfolio, is £24.00 per share, a 30% increase from
last year’s figure of £18.40.
Dividends
For the last five years we have adopted a
consistent dividend growth policy of 15% per
annum. Given the group’s outstanding record 
of profit increases however, this has resulted in 
a low dividend yield and high dividend cover in 
comparison to our peers. Your board is therefore
recommending a step up increase in the year 
end dividend to 19.20p per share, to be paid 
on 4 March 2005 to shareholders on the register 
at close of business on 11 February 2005. 
This will produce a full year figure of 23.24p per
share, an increase of 42% over last year. It is our
intention to continue with a progressive dividend
policy, albeit at a more moderate target growth of
10% per annum. We will also take the opportunity
to restructure the phasing of our dividend
payments and it is our intention that the interim
dividend (to be paid in July of each year) will
comprise approximately one third of the total, 
the balance being paid at the time of the final 
in March of each year. 
Share structure 
Five years ago our share price was approximately
£4.00. At 30 September 2004 this had grown 
to £18.35. At this level, we consider it appropriate
to introduce a share split on a five for one basis,
replacing each 25p ordinary share with five 5p
ordinary shares. We believe that this will improve
liquidity in our shares and will help dampen share
price volatility. Appropriate resolutions to approve
this, together with others to modernise our 
Articles of Association, will be proposed at 
an extraordinary general meeting to be held
immediately after our annual general meeting. 
Board
Robin Herbert and Nichola Pease will be retiring
from the board at the annual general meeting.
Robin has been a board member since February
1994 and has served as chairman of the audit
committee and latterly as senior non-executive
director, a role which will be assumed by Robin
Broadhurst. Nichola leaves the board after four
years’ service and her position as chairman of the
remuneration committee will be taken by Robert
Hiscox. We thank both Robin and Nichola for the
very significant contribution they have made to the
group. During a period of unprecedented growth
and activity, they have been a source of wise
counsel and encouragement. 
As announced in November 2004 Sean Slade has
resigned as an executive director. Sean joined the
group when we owned a significant commercial
investment portfolio, however the redefinition of 
the group’s focus into residential activities and the
consequent disposal of the group’s commercial
portfolio has meant that the challenges and 
’99 ’00 ’01 ’02 ’03 ’04 Annual report and accounts 2004
Grainger Trust plc
05
Re-think what you know about
Grainger Trust plc. Reassess its
markets and its business – today’s
and tomorrow’s.
Re-think, read on...
opportunities for Sean were no longer available. 
We are grateful to Sean for the professional and
efficient way in which the investment portfolio
rationalisation was conducted and wish him every
success for the future. 
People
Grainger has a core of committed staff, expert 
in buying, selling, managing and developing
residential property. As the group activities 
have expanded we have complemented this
core group with several senior appointments 
to ensure that we are well placed to take
advantage of future opportunities. I would like 
to thank our enthusiastic and hard working staff
for the continuing contribution they have made
to another successful year. 
Strategy and outlook
We are delighted with the performance in the year
but accept that our market place may present 
a more difficult trading environment in the short-
term. Indeed since the year end we have seen a
slowing in demand for our vacant properties. We
are still exceeding, on average, September 2004
vacant possession values by circa 3% on recent
sales, but the time taken to complete these sales
has extended. However, we believe that our core
business activities are resilient and can produce
good levels of shareholder return even when
economic conditions are less favourable. 
It is clear that the property sector and our
particular niche in it will face many new challenges
and opportunities over the coming year. Whilst 
our business is robust we are aware that the
overall perception of our potential success is
driven by general and media comments on the
state of the housing market. Our view is that 
the overall trend of house prices is flattening 
and that growth over the next year may well 
be limited. Indeed we believe that the market 
in London and the South East has already
experienced a significant correction. The housing
market is primarily affected by expectations of
interest rate levels and many commentators are
now indicating that rates may stabilise. If this
happens then we would expect to see forecasts
of healthier house price movements.
However, we believe that the case for residential
property as a long-term investment remains
strong. Increases in the number of households
from a combination of smaller family units, greater
levels of self occupancy and increasing life
expectancy are sustaining demand. This at a time
when new house build levels are at their lowest 
for several decades. Home ownership in the UK
has long been seen as an investment, as well 
as a method of occupation – and its attraction 
as an alternative to equities or traditional 
forms of pension provision has become more
pronounced over recent years. Interest rates
remain at a comparatively low level and this 
helps to support affordability.
The property sector faces a future in which real
estate investment trusts or ‘REIT’s’ may play a
significant role, although the recent pre-budget
report indicated that any legislation will not be
introduced until July 2006 at the earliest. Whilst 
the trading nature of Grainger business does 
not immediately lend itself to a REIT type structure,
we will ensure that we are at the forefront of any
initiative that will facilitate investment in the private
rented sector.
We will continue to focus on our core regulated
business which is high margin and cash
generative. We are optimistic about the growth
potential of the life tenancy sector and are pushing
hard for this to become a significant contributor to
group profit. We are excited by opportunities that
are being presented to us on mainland Europe 
and are confident that we can successfully 
transfer our skills and expertise to these emerging
markets. Our development and trading activities
are well defined and our vision is to build a series
of coherent, related activities showing our ability 
to operate in all sectors of the residential market,
while producing consistent levels of profitability 
and growth. 
The future
We have in place the three key resources for 
us to continue as a consistently successful 
long-term business; a superb asset base, a 
sound funding platform and an expert and
unrivalled team. We look forward to the future 
with confidence and enthusiasm.
Robert Dickinson
Chairman
21 December 2004 06
Grainger Trust plc
Annual report and accounts 2004Grainger Trust 
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Group management board
Headed by Rupert Dickinson and Andrew Cunningham. 
The group’s expert and unrivalled team allows the business
to develop and grow with assurance and confidence. 
Pictured left to right:
1. Debra Yudolph
Director of Residential Management (South)
2. Mark Robson
Director of Residential Management (North)
3. Rupert Dickinson
Chief Executive
4. Andrew Cunningham
Deputy Chief Executive and Finance Director
5. Brian Crumbley
Director of Sales and Acquisitions (North)
6. Peter Schwerdt
Director of Sales and Acquisitions (South)
7. James Fielder
Director of Urban Development
8. Marie Glanville
Group Company Secretary
Director of Group Financial Operations
9. Andy James
Director of Land and Regeneration
10. Tony Dodds
Director of Grainger Homes
Chief Executive’s 
Statement
Exciting times:
This has been a particularly
exciting and fulfilling year. 
Not only have we produced 
record profits and an excellent
growth in the value of our asset
base but we have made
substantial progress in achieving
the goals we set at the beginning
of the year. 
These included the full and
successful incorporation of 
our Bromley joint venture; the
rationalisation and refocusing 
of our development and trading
division, with the disposal of the
bulk of our commercial property
investment portfolio and the
£900m refinancing of our loan
portfolio, which gives us both
greater flexibility and overall 
lower interest rates.
We have also achieved substantial progress in
developing two key areas, which we believe will
become significant growth areas for the group – 
life tenancies and investment in mainland Europe. 
In both these areas we hope to announce further
developments, either through direct acquisition or
the creation of important joint venture partnership
agreements during the course of the current year.
Turning to the group’s operations in more detail, 
I can report that the strong housing market we
witnessed for most of the year under review was
reflected in our tenanted residential division, where
sales totalled almost £135m. In addition, we saw 
a valuation increase on the residential properties 
in our trading portfolio of 12.4% to September. 
This figure does mask regional variations of less
than 5% in central London and greater than 
30% in the North West of England. In our view
these increases underline the benefit of our
geographically widespread portfolio as well as 
the underlying strength of the housing market 
over the period. Some 42% by value of Grainger
residential assets are outside London and the
South East – the two regions that saw relatively
sluggish growth through the year to 30 September
2004. The year end average vacant possession
value of our residential properties rose to £164,000
from £144,000 last year. The reversionary surplus
in our portfolio (the difference between vacant
possession value and investment value) now
stands at £536m, or £21.61 per share.
It is also worth noting that many of the sales 
that we achieved were of unmodernised or 
below UK average value properties. There 
2003: £144,000
2004: £164,000
Average sale value of Grainger’s
properties on vacant possession
2003-2004 Annual report and accounts 2004
Grainger Trust plc
07
Our portfolio is ‘pregnant’ with
reversionary value – part of the value
is realised each year as properties 
are vacated and sold.
A long-term business
Reversionary surplus 
(the difference between vacant possession
value and investment value)
2003-2004
2003: £484m
2004: £536m
is strong and consistent demand for such
properties from both first time buyers as well 
as the owner/developer market.
On the other side of the equation, we are
extremely pleased with the level and quality of
residential purchases we have made during the
year. In fact we acquired, in total, slightly more
residential units than we sold. After a slow start 
we invested approximately £118m to purchase
1,042 units, compared with the 1,031 units 
sold, which included 486 regulated tenancies 
(at a cost of £68m) and a further 374 life 
tenancies (for £23m).
At the start of the year one of the principal 
goals we set ourselves was to rationalise 
our development and trading activities through
the orderly disposal of our commercial property
investments in order to focus effort and resource
on the residential sector. As a result we sold
£25m of commercial property investments,
showing a £3.5m surplus over September 2003
values, leaving the group with only one major
development asset – Landmark Place, Slough.
The 69,000 sq. ft. office element has been 
hard hit by current market conditions and 
we have taken a £1m write-down against 
its carrying value. 
Following the disposal of virtually all our commercial
property investments we have now reorganised the
development and trading division into three distinct
core activities: land and regeneration; residential
development; and house building. This, we believe,
now presents a coherent and structured approach. Grainger Trust plc
Annual report and accounts 2004
08
Life tenancy – taking advantage 
of our expertise
We are excited by the opportunities presented by
this sector. Diminishing pension returns and the
opportunity to crystallise some of the increase in
value of homes has increased the profile of, and
demand for, this product.
Trust Grainger
The year under review has seen the papers full 
of stories of uncertainty in the housing market.
It’s reassuring to know that in the same period
our share price has significantly increased, we
have posted a record profit and seen an increase
of 25% in our net asset value per share.
Entering new markets
With our wide skill base and expert knowledge 
we have created a unique platform from which to
enter into new markets such as life tenancy and
European investment.
In land and regeneration we sold the final major
development plots, comprising 12.4 acres, at
Kennel Farm for a total of £14.2m, generating
operating profits of £10.7m. Future activity at
Kennel Farm will focus on completion of the local
centre, the five acres allocated for business use 
and the sale of minor plots on a piecemeal basis.
The main contribution in residential development
has come from the development with Network
Housing Association which incorporated 78 flats
above a large Sainsbury’s supermarket in Wilton
Road, Pimlico. This scheme has generated income
to us of almost £8m through the sale of 70 flats
during the year; of the remaining eight flats, five
have completed since the year end. 
House building has made very satisfactory
progress during the year as Grainger Homes
completed the sale of 132 units for £14.7m,
producing a trading profit of more than £2m.
Operationally, therefore, this has been a successful
and eventful year. Externally this success has 
been recognised by our winning the EPRA Best
Performance Small/Mid Cap Award for the 
year ended 2003. EPRA is the European Public
Real Estate Association and has been set up to
promote, develop and represent the European
public real estate sector with a particular focus on
establishing best practice standards in accounting,
reporting and corporate governance. The award 
is granted to the company showing the greatest
level of total shareholder return provided certain
standards of disclosure and corporate governance
were met – our return in the year was over 65%. 
And what of the future at Grainger Trust? As ever
our focus will remain on the regulated tenancy 
market. This business is high margin and 
cash generative and we will endeavour to 
make the most of any opportunities that arise.
However, Grainger is a long-term business and 
we are busy preparing ourselves for the time 
when the supply of regulated tenancies begins 
to diminish.
Fundamental to this is the life tenancy market. 
We are excited by the opportunities presented by
this sector. Diminishing pension returns, and the
opportunity to crystallise some value from the
increase in value of homes has increased the 
profile of and demand for this product. Regulation
of the mortgage market and the future regulation 
of equity release reversion products will, we
believe, introduce more discipline into the sector
and reward suppliers with good reputations and 
a successful history.
We are delighted to announce the appointment 
of Peter Couch to head up our life tenancy
activities. Peter is vastly experienced in the equity
release and insurance business sectors having
worked as national sales manager of financial
planning services for NPI Limited and managing
director of AMP Retirement Services before setting
up his own equity release consultancy business.
We are confident that Peter will help Grainger take
full advantage of the opportunities this sector
presents to us.
Concern has been expressed that equity release
may be tax inefficient for home-owners as a result
of the introduction of the pre-owned asset tax 
in April 2005. We are delighted to report that 
the Inland Revenue confirmed in an answer to
Parliament in November that such assets would
not be affected by the new tax. Annual report and accounts 2004
Grainger Trust plc
09
We have received a number of approaches 
from financial services companies who want to
create a reversionary equity release product and
leverage our skills. They are offering us access to
their distribution capability and we are exploring
options in this regard. 
We also feel that we can operate successfully 
in mainland Europe. We are concentrating our
efforts in two areas. The first is investment in 
long-term reversionary residential portfolios in 
the more mature economies of Western Europe
where we believe there is an opportunity to
replicate the return characteristics of our main 
UK business. We are also looking at more
opportunistic investments in residential
development land in Central Europe. In both 
cases we are currently intending to invest
alongside local operating partners.
Supporting these activities will be our development
and trading division, now rationalised and with a
clear strategy. The rationalisation of the commercial
property portfolio and the last of the bulk sales at
Kennel Farm indicate that this year’s level of
profitability will not be repeated in 2005, but we are
confident that we will be able to position this
division to produce high quality returns across a
broad spectrum of residential development activity. 
Rupert Dickinson
Chief Executive
21 December 2004
While our properties range from houses
to penthouses, 66% of our entire portfolio
have a vacant possession value of
between £100,000 and £250,000.
From houses to penthouses Grainger Trust plc
Annual report and accounts 2004
10
Operating and 
Financial Review
Figure 1 - Analysis of tenanted residential portfolio by tenure
Operating review
Tenanted residential highlights
Operating contribution* increased by 
22% to £81.9m
1,031 properties sold for £134.9m,
generating a rise in trading profits to
£59.1m and profit on disposal of fixed
assets of £3.0m
1,042 residential units purchased for
£118m
Year end portfolio of 12,041 units,
investment value £1,329m, vacant
possession value £1,865m
*profit on ordinary activities before interest and taxation and 
excluding administration expenses
Tenanted residential
The scale of our tenanted residential activities 
has increased with the acquisition of the
outstanding share of the Bromley joint venture.
For the purposes of comparison in this division 
we have included our share of the results of the
joint venture in last year’s tenanted residential
performance figures; for statutory reporting
purposes, the joint venture results are aggregated
as one disclosure item.
Key performance statistics
2004 2003
Properties sold 1,031 1,414
Sales value £m 134.9 139.4
Trading and fixed asset profits £m 62.1 51.2
Net rental income £m 17.8 14.9
The geographic strength of our portfolio is
reflected by the range of growth in vacant
possession sales values achieved in comparison
to last year’s valuation, London and the South
East showed growth levels of 7.7%, while the 
rest of the country showed 15.7%.
Geographic spread of our portfolio
Investment value % of 
£m assets
London 551 41
South East 224 17
South West 79 6
East 91 7
East Midlands 47 3
West Midlands 129 10
Wales 8 1
Yorkshire 47 3
North West 124 9
North East 20 2
Scotland 8 1
Northern Ireland 1 –
1,329 100
Our portfolio composition also helps dampen 
the volatility associated with the higher end of the
market. The analysis below shows the number
and value of properties we own by vacant
possession value.
Range of vacant possession values 
(excluding ‘other interests’)
Vacant 
No. of possession
properties value £m
>£500K 5838
£250K – £500K 963 320
£175K – £250K 2,593 540
£100K – £175K 4,867 676
<£100K 3,560256
12,041 1,830
The analysis of our portfolio by tenure is set 
out in figure 1 , below.
A key feature of the tenure analysis is that the
reversionary surplus (the difference between
vacant possession and investment values) 
now amounts to £536m, or £21.61per share.
The average vacant possession value of our
residential properties (adjusted to reflect the fact
that many of our life tenancy assets are partially
owned) at 30 September 2004 was £164,000 
compared to last year’s figure of £144,000 
(a 13.9% increase) and to the average UK house
price of £163,000. Over recent years we have
sold many of our lower value properties and, 
as we have comparatively few very high value
properties, this has meant that the price range
within our portfolio is tending to consolidate
towards the UK average. 
Acquisitions in the year totalled £118m. 
Of particular note were the portfolio purchases 
of 128 London based units for a consideration 
of £25m and 308 life tenancy units for £14.2m.
It’s simple: 
The business is growing 
and so are the opportunities
coming our way. 
No. of Vacant Investment % of vacant
properties possession value possession
value £m £m value
Regulated 7,941 1,295 939 73
Assured 1,083154136 88
Vacant 356554989
Life tenancies 2,627 320 167 52
Hoteling complex – reviewed apartments 34 6 6 100
Other interests – 35 32 91
30 September 2004 12,041 1,865 1,329 71
30 September 2003 12,030 1,648 1,164 71 Annual report and accounts 2004
Grainger Trust plc
11
Over the last five years our gross
assets have increased from £0.4bn
to £1.5bn, an average increase of
approximately 30% per annum 
over that period.
Growing the business Grainger Trust plc
Annual report and accounts 2004
12
Development and trading highlights
Operating contribution* increased 
by 74% to £25.3m
£25m of investment property sold 
at surplus of £3.5m
12.4 acres sold at Kennel Farm 
for £14.2m
Net income to date on Pimlico 
development £7.9m
Sales of 132 units worth £14.7m 
by Grainger Homes, generating 
profit of £2.1m
*profit on ordinary activities before interest and taxation and 
excluding administration expenses
Development and trading
Including profits on sales of fixed assets, net of
valuation writedowns, and before administrative
expenses this division contributed £25.3m 
(2003: £14.6m) as follows:
2004 2003
£m £m
Trading profits 13.5 10.3
Net profits on sale of fixed assets 3.5 1.9
Net rental income 0.4 1.9
Other income (Pimlico flats) 7.9 0.5
Operating profits 25.3 14.6
During the year we sold 12.4 acres of
development land at Kennel Farm, Basingstoke
for £14.2m generating profits of £10.7m. This
now completes the sale of the major residential
land blocks at this site. Since 1999 we have 
sold 78 acres for total revenues of £76.2m. 
The opportunities for further income from Kennel
Farm relate to the five acres allocated for business 
use, the local centre and to smaller residential
land parcels totalling approximately seven acres,
some of which is allocated for social housing.
Given current market conditions and planning
status we do not anticipate to benefit from the
business use site until the financial year 2005/06.
We have disposed of the majority of our
commercial investment portfolio, selling nine
properties for £25.0m, representing a surplus 
of £3.5m over September 2003 values. 
We have written down the carrying value of 
our office development at Landmark Place, 
Slough by £1m in the year.
Other income in this division relates principally 
to the Pimlico development with Network 
Housing Association. 70 flats have been sold 
for a total value of £37.3m generating income 
of £7.9m. A further eight flats remained to be 
sold and five of these have completed since 
the year end. 
Satisfactory progress is being made on the other
major projects in this division. See figure 2, below.
During the year, Grainger Homes sold 132 units
for £14.7m at a profit of £2.1m. Activity in this
division has increased and we hope to sell in 
the region of 150 units in 2004/05.
The review highlights that 2003/04 has 
been something of a one-off year for the
development and trading division. Major sales 
in the commercial portfolio and at Kennel Farm
together with the income from Pimlico flats 
have produced a contribution from the division
which is unlikely to be repeated in the short-term.
Figure 2 - Development and trading – overview of current projects 
Our housing is well spread by geographical
location, tenancy type, size and value. 
Our view is that a balanced business is a
healthy business.
Safe as houses
Project Description Status Income 
expected from
West Waterlooville Option over 640 acres MDA Masterplan approved by 2007+
Winchester Havant and Hampshire
Macaulay Road, 110,000 sq. ft. mixed Application submitted, 2007+ 
Clapham, SW4 use scheme decision awaited
South London Hospital, 77 residential units above Construction 2006/07
SW4 new Tesco foodstore commenced
Hornsey Road and Barnsbury Public/private partnership Contracts 2007+
Complex, Islington mixed use scheme, exchanged
350 residential units, 
43,000 sq.ft. council 
office and community use Annual report and accounts 2004
Grainger Trust plc
13
Financial review
Highlights
Profit before taxation and exceptional
interest up to £59.6m from £48.5m, 
an increase of 23%
Net asset value per share up by 25% 
to £27.34 from £21.94
Gearing at 103% (2003: 125%)
Refinancing in the year to give 
increased capacity and greater flexibility 
Results
Contributions from the tenanted residential and
development and trading divisions have increased
by 29.6% to give group profit before interest and
taxation of £99.7m (2003: £76.9m).
Administrative expenses
Administrative expenses have increased by 59.6%
to £7.5m, largely as a result of the consolidation
of the Bromley joint venture for the first time.
These expenses represent 3.4% of turnover.
Interest payable
Net interest payable has increased to £40.1m,
from £11.5m, again because of the consolidation
of Bromley’s figures. We also had an exceptional
charge of £5.4m relating to interest payments
arising on the early repayment of our fixed debt,
performed as part of our refinancing exercise. 
The average interest rate payable in the year has
been 5.8% (2003: 5.6%), the increase coming
from the general upward movement in borrowing
rates in the year: at 30 September 2003 three
month LIBOR stood at 3.7% and had increased
to 4.9% a year later.
Pre-exceptional interest is covered 2.5 times by
profit before interest and tax (2003: 2.7 times).
Taxation
Our annual tax charge is significantly affected by
FRS19, the accounting standard that prevents 
the provision of deferred tax on revaluation gains
when companies are acquired. This serves to
increase our effective tax rate which this year 
has been 39.1% (2003: 39.4%). Major items
affecting the tax charge are shown in figure 3, right.
Earnings per share and dividends
Earnings per share before exceptional interest
have increased by 25% to 149.7p from 119.8p
and dividends by 42%. Dividends are covered 
6.5 times by profit after taxation but before
exceptional items and minority interest 
(2003: 7.3 times).
Financial position
General
Most of our properties are held as trading stock
and are therefore shown in the balance sheet 
at cost. This does not reflect the true worth of
Grainger assets and we set out in figure 4, right, 
a statement of our net assets with the properties
restated to market value.
Fixed assets
Fixed asset properties in the balance sheet
comprise £97.0m tenanted residential and
£8.4m commercial investment, totalling 
£105.4m (2003: £84.4m, £23.7m and 
£108.1m respectively).
Investment and intangible assets
Investments relate to our investment in Schroders
ResPUT which has increased in value by £0.9m
to £9.7m – book cost is £7.0m (2003: £7.0m) 
and a recent £3.3m investment in a limited liability
partnership set up to develop land at Smiths Dock
on Tyneside.
The negative intangible asset of £84.8m 
(2003: £97.2m) principally reflects negative
goodwill arising on the acquisition of Bromley. 
It is being released to the profit and loss 
account in line with sales from that portfolio.
Trading properties
Statutory balance sheet
30 Sept 30 Sept
2004 2003
£m £m
Tenanted residential 843 807
Development and trading 76 81
T otal 919 888
Market value balance sheet
30 Sept 30 Sept
2004 2003
£m £m
Tenanted residential 1,232 1,080
Development and trading 101 106
Total 1,333 1,186
The cost of our tenanted residential stock has
increased from £807m to £843m, the movement
being stock purchases of £95m, sales, write 
offs and transfers to development and trading of 
£63m and capitalised improvement costs of £4m.
The market value figures have risen to £1,232m
from £1,080m. Valuation uplifts account for £140m
of the increase and the balance of £12m relates to
the net effect of sales, acquisitions and transfers.
The total market value of all of our tenanted
residential properties, including those held as 
fixed assets, is £1,329m (2003: £1,164m).
The group’s development and trading assets 
held as stock fell in cost terms to £76m 
and in market terms to £101m (2003: £81m 
and £106m respectively), principally as a result 
of sales of commercial properties and plots 
of land at Kennel Farm. Our investment in this
division in the year amounted to £22.6m, of 
which £14.2m related to Grainger Homes 
and a further £5.0m to projects in the land 
and regeneration division.
Figure 3 - Group tax charge
Figure 4 - Proforma net asset statement
£m
Group profit before tax 54.2
Tax at 30% 16.3
Adjusted for:
Additional tax on the difference between book 
and tax value of trading property sales 7.2
Negative goodwill (not taxable) (2.3)
Actual tax charge 21.2
30 Sept 30 Sept
2004 2003
£m £m
Properties at market value:
Tenanted residential 1,329 1,164
Development and trading 109 130
1,438 1,294
Investments and
other assets 16 12
Cash 54 81
Total assets 1,508 1,387
Borrowings (750) (761)
Net current liabilities (68) (69)
Deferred tax/other liabilities (12) (14)
Total liabilities (830) (844)
Net assets 678 543 Grainger Trust plc
Annual report and accounts 2004
14
Figure 5 - Net assets at market value
Figure 6 - Analysis of net asset value
Other assets and liabilities
Other net liabilities, excluding current instalments 
due on borrowings and cash balances, have
remained at a level consistent with last year. 
Net assets
Net assets at market value have increased 
from £543m to £678m. Major movements 
are shown in figure 5, left.
Net assets have increased by £135m from
£543m to £678m, the increase coming from
retained earnings less negative goodwill of £20m,
net revaluation surpluses of £120m and
adjustments to goodwill of £5m.
Diluted NAV (or NNNAV) is computed by adjusting
NAV for the market value of long-term debt and
derivatives and for contingent tax.
These amount to 1p and £8.71 per share
respectively as shown in figure 6 below 
(2003: 31p and £7.72 respectively).
The FRS13 adjustment has fallen as a result 
of the refinancing undertaken in the year, 
which eliminated all expensive fixed rate 
debt. Contingent tax, which will only 
crystallise on the realisation of the assets 
and is therefore payable some time in the 
future, has increased because of the increases 
in valuation surpluses in the year. 
We also present Grainger NAV to reflect 
our estimate of the present value of the
reversionary surplus in our regulated and life
tenancy portfolios (i.e. the difference between
vacant possession value and market value 
after tax). We have calculated the present 
value of those surpluses net of tax using a
discount rate of 8.6% (our weighted average 
of cost of capital plus a risk premium of 3%)
(2003: 8.9%). This adjustment increases 
NNNAV by £5.38 per share to give Grainger 
NAV of £24.00 (2003: £18.40). It should be
stressed that our calculation is based upon
current house prices; no future house price
movement is assumed.
Cash and debt
Cash balances at the year end amounted to
£54m, representing some 3.6% of our total
market value gross assets. Of this, £30m (2003:
£54m), represents deposits received or acts as
security for cash backed loan notes. 
Group borrowings have decreased slightly from
£761m to £750m.
Gearing on a revalued balance sheet basis fell 
to 103% from last year’s figure of 125%.
Refinancing 
During the year the group rearranged its debt
structure. All of the group’s debt with the
exception of a non-recourse loan of £45m 
and loan notes of £32m were repaid. This led 
to early repayment charges of £5.4m on the 
fixed rate elements. 
The new financing comprises a £900m facility with
a club of eight banks, split into three tranches; a
five year revolving credit facility of £475m, a five
year term loan of £225m and a ten year term 
loan of £200m. The new facility is arranged on 
a floating charge basis and has a far simpler 
and more relevant covenant structure; this means
that it is both cheaper and easier to manage 
and provides the group with greater flexibility 
in its day-to-day operations. Funding levels are 
more certain as there are no annual repayments
and the average cost of debt has been reduced 
by approximately 32 basis points. 
At 30 September 2004 £680m of the facility had
been drawn down leaving headroom of £220m.
The refinancing exercise has been short listed 
by ‘The Treasurer’ magazine as one of the loan
deals of the year 2004.
Capital management
The group finances its operations through 
a combination of shareholders’ funds and
borrowings and seeks to optimise its 
weighted average cost of capital (WACC). 
At 30 September 2004 our estimate of WACC 
was 5.64% (2003: 5.89%).
The group does not take trading positions in
financial instruments but holds them to minimise
the risk of exposure to fluctuating interest rates.
The majority of our debt is subject to protective
swaps, caps or collars or is maintained at fixed
rates of interest. At 30 September 2004, £501m
(71%) of the group’s net debt was either fixed to
termination, or for over one year, or was protected
by financial instruments (2003: 90%).
A combination of interest rate swaps and financial
caps is used to provide a degree of certainty over
Figure 7 - Summary of gross borrowings
Reflected in Not reflected
the accounts in the accounts Total
£m £m £m
Net assets at 1 October 2003 149 394 543
Required change in accounting policy re owned shares (2) 2 –
Restated net assets at 1 October 2003 147 396 543
Retained profits 27 (7) 20
Revaluation surpluses
Tenanted residential 4 115 119
Development and trading – – –
Investments – 1 1
Goodwill movements – (5) (5)
Market value net assets at 30 September 2004 178 500 678
Market value net assets per share £7.17 £20.17 £27.34
Statutory Market value Market value NNNAV
balance sheet adjustments balance sheet FRS13 Contingent tax balance sheet
£m £m £m £m £m £m
Properties 1,024 414 1,438 – – 1,438
Investments/other assets/cash 66 4 70 – – 70
Negative goodwill (85) 85––––
1,005 503 1,508 – – 1,508
Borrowings (750) – (750) (5) – (755)
Net current liabilities (68) – (68) – – (68)
Provisions/contingent tax (9) (1) (10) 5 (216) (221)
Minority interest – (2) (2) – – (2)
(827) (3) (830) – (216) (1,046)
Market value net assets 
at 30 September 2004 178 500 678 – (216) 462
Market value net assets per share £7.17 £20.17 £27.34 £(0.01) £(8.71) £18.62
Principal Interest
£m rate % Terminating
Fixed to termination 45 6.3 2005-32
Hedged by swap contracts 223 6.4 2005-09
Hedged by financial caps 233 6.0 2005-09
Variable/fixed under one year 256 5.6 2005-14
Total debt 757 6.0
Less: cash (54)
Net debt 703 Annual report and accounts 2004
Grainger Trust plc
15
future interest rate costs whilst enabling the group
to take advantage of any favourable short term
rates. At 30 September 2004 the group held
£223m of swap contracts at an average rate of
5.4% maturing between 2004 and 2014 (2003:
£298m at 5.4%). There were also financial caps 
in place of £233m at an average cap rate of 6.1%,
expiring between 2005 and 2009 (2003: £235m 
at 6.1%). A summary of our gross borrowings is
shown in figure 7, left.
The notional effect of the fair value adjustment 
of marking the group’s fixed rate debt and
derivatives to current market rates (‘FRS 13
adjustments’) would be to produce a notional
‘liability’ after tax of £0.4m or 1p per share 
(2003: 31p). This adjustment represents
approximately 0.05% of group gross 
borrowings at 30 September 2004 and will 
not be recognised in the accounts until the
position matures or is terminated. 
The group also maintains a range of borrowings
maturities to enable it to balance continuity of
funding with flexibility. At 30 September 2004 
the average duration of the group’s debt was 
6.4 years (2003: 6.0 years).
International Financial Reporting Standards (IFRS)
IFRS are mandatory for UK quoted companies 
for accounting periods ending on or after 
31 December 2005. Grainger’s accounts will
therefore be prepared in accordance with these
standards for the year ended 30 September 2006.
We are continuing to prepare for this change,
ensuring we have the relevant information and
systems that will be required.
Andrew Cunningham
Deputy Chief Executive and Finance Director
21 December 2004
Good prospects:
Our business model is 
solid and our strategy 
strong and focused.
Most people see a derelict site. We see an
opportunity that will deliver profit over a
number of years. This year we have made
several senior appointments to ensure we
continue to take advantage of opportunities
in the market.
Spotting an opportunity Grainger Trust plc
Annual report and accounts 2004
16
• An executive director of Grainger will head 
the CSR committee
• It will report through that executive director 
to the board where appropriate
• The committee will aim to meet quarterly,
subject to there being matters for
consideration
• The main purposes of the committee are
initially to: 
•
Review progress against the three
year objectives;
•
Plan, implement and monitor targets set to
achieve these objectives by involving other 
group employees and/or consultants as
appropriate;
•
Disseminate CSR information to
stakeholders.
and after the initial three year phase to: 
•
Prepare new objectives relevant to Grainger
situation at that time;
•
Initiate any further projects necessary to
achieve these objectives;
•
Re-evaluate communication to stakeholders,
to ensure information is communicated
effectively.
Grainger CSR committee 
Terms of reference
Casella Stanger are pleased to be invited 
again to comment on Grainger Trust’s progress
since the publication of their first Corporate
Social Responsibility (CSR) Policy in 2003. 
Last year four key objectives were established
to improve CSR performance and Grainger Trust
is reporting on their progress to date, as well as
setting out plans for the future.
It is extremely encouraging that Grainger Trust
has also been very clear in establishing plans
for future improvements in CSR that will be 
co-ordinated and reviewed by a specific
Board-level CSR Committee.
In our opinion, Grainger Trust has made good
progress in its first year against their CSR
objectives. In particular, the establishment 
of “Charity of the Year” and a focussed
programme for employee involvement in
charitable activities are to be encouraged. In
addition, Grainger Trust’s activities to support
employees and merge terms and conditions 
of employment is to be commended. Grainger
Trust’s identification of KPIs in some key CSR
areas demonstrates that more formal data
collection and reporting has been established 
and that year-on-year data will begin to show
performance and further demonstrate progress. 
The focus for Grainger Trust over the coming
year should be to communicate its CSR policy
and progress to stakeholders, as well as
gathering data in a simple and formalised
manner. Grainger Trust will then be able to
assess the costs, benefits and value added 
from its CSR programme. 
We look forward to working with Grainger Trust
as it develops its CSR reporting in future years.
Prepared by
Emma Griffiths 
Principal Consultant 
Casella Stanger
Reviewed by
Ken Smith 
Business Director 
Casella Consulting
External commentary 2004
Grainger Trust CSR Performance
We have made satisfactory progress against
these over the course of the year and our key
achievements are described in more detail later
on. This report describes each objective and
contains case studies demonstrating our CSR 
in action. 
As part of the risk assessment process (see
corporate governance report), the board
considers all risks including environmental risks
and health and safety risks. A CSR committee
has also been established, with representation
from across the organisation. Rupert Dickinson
heads the committee, demonstrating the group’s
commitment to CSR. He has overall responsibility
for community issues, although other senior
management are also involved.The main purpose
of the committee is to disseminate information
around the group and involve other employees 
in specific CSR projects where their roles or skills
are relevant.
Grainger is a forward-thinking entrepreneurial
organisation, which seeks to conduct its
business in a socially responsible manner at all
times. We believe that this is achieved by being
mindful of an overall framework of suitable
standards, rather than by abiding by hard 
and fast, self-imposed CSR regulations. 
Grainger, in common with all businesses, has
many stakeholders, with differing requirements.
Our business is rooted in communities, and 
can affect the lives of many tenants and the
communities in which we operate. The focus of
our energy externally is therefore on social and
community issues. Internally, Grainger recognises
the value of its employees, and provides staff with 
a clear path to reward and recognition for success.
We are in the process of defining suitable 
CSR Key Performance Indicators (KPIs) in 
order to monitor our progress and performance. 
These are presented for the first time this year,
under the relevant objectives section, and contain
historical information where it is available. As
Grainger pursues strategies into new business
areas, we will develop further appropriate KPIs.
Finally, although not a full audit opinion, an
external commentary has been provided by
Casella Stanger, similar to last year.
Corporate Social 
Responsibility Report
In last year’s report we set out our CSR policy and commissioned 
a study which identified the CSR issues that we consider to be
the most important to our business:
How we treat our tenants;
How we look after our employees;
How we meet environmental, social and legal requirements;
How we support the communities in which we operate
Based on these issues and with the aim of improving our
performance, we defined our three year objectives which are 
set out on the following pages. Objective 1
To identify CSR issues and develop 
a strategic response to stakeholder
information requests.
Our key CSR issues were identified with Casella
Stanger, and they reported on these in September
2003. Casella also assisted in our response to an
EIRIS report. 
We have recognised that our tenants are our
biggest group of non-financial stakeholders. 
As such, our initial focus has been on ensuring
that they are treated with respect and understand
how and when to contact us.
The last year has seen significant changes in
Grainger, with the bringing in of the former
Bromley joint venture. Property Management – 
the term we use to describe all dealings with
tenants, has been brought under one roof –
Grainger Residential Management. All property
management activities are performed under this
name, from repairs to rent collection. Reviews 
of best practice in several areas of property
management have been completed and others
are ongoing, to ensure that we offer a consistent,
efficient and effective service to our tenants and
contractors. We have several payment methods,
allowing tenants to choose the most suitable 
for them and there is a centralised, dedicated
telephone number for rent queries. We have
arrears targets each year, which have fallen
relative to our rent roll year-on-year. Repairs,
however, are dealt with locally, from our offices
and agents around the country, where we feel 
our tenants can best be serviced. We utilise the
skills, flexibility and local knowledge of many 
small contractors.
Gittisham
In April 2004, an opportunity arose for Grainger 
to enhance its property portfolio and provide
some security to existing tenants. 27 properties
in the picturesque village of Gittisham in Devon
had been put up for sale by the landlord. Grainger
stepped in to buy 15 of the properties, giving
assurances that the village community would 
be preserved and that residents would be able
to stay in their homes long-term.
EPRA Award
In September 2004, Grainger was delighted 
to receive the EPRA Best Small/Mid-cap
Performance Award, based on the year ended
December 2003 in a ceremony in Berlin. EPRA
(European Public Real Estate Association) is 
a common interest, not-for-profit organisation,
which has aims to promote, develop and
represent the European public real estate 
sector. It endeavours to establish best 
practice in accounting, reporting and 
corporate governance.
The trophy was awarded on the basis of total
shareholder return, providing certain standards 
of corporate governance had been maintained.
• 
Number of tenants paying by direct debit
At 30 September 2004 5,295 tenants paid by
direct debit. This is 43% of all tenants. A further
13% paid by swipe card. These electronic
methods make rent payments easier for both 
the tenant and us. We regularly send out letters
offering these payment methods to tenants.
• 
Number of complaints
We have started to collect data regarding
complaints, and expect to report next year.
Annual report and accounts 2004
Grainger Trust plc
17
EPRA Award
In September 2004, Grainger was delighted 
to receive the EPRA Best Small/Mid-cap
Performance Award, based on the year ended
December 2003 in a ceremony in Berlin.
Dedicated telephone numbers
We have dedicated telephone numbers for 
our tenants to call in respect of repairs to 
their properties.
Capitalising on an opportunity
In April 2004, Grainger gave assurances that
the village of Gittisham would be preserved and
that residents would be able to stay in their
homes for the long-term.
Planned activities
Over the next year we plan to continue
our ‘best practice reviews’ to ensure a
forward-looking and consistent service 
is offered to tenants.  Grainger Trust plc
Annual report and accounts 2004
18
Sponsorship success
Ann Johnson is one of several sponsorship
success stories for Grainger. Her achievements
were featured in the local press in August 2004,
when she graduated with a BA in Housing
Sustainable Communities.
Objective 2
To formalise HR systems to provide
support and appropriate CSR training 
for all staff.
We have made a significant effort to integrate the
staff from Grainger and the former Bromley joint
venture. Terms and conditions were somewhat
different, and almost all have now been
harmonised. All staff are now employed by one
group company and development and training
activities encompass staff from all of our offices
as appropriate.
We now have standardised policies relating 
to all significant employment issues, including 
equal opportunities, further education, family
leave, harassment, and maternity.
Worthy of note again this year is our enlightened
attitude towards our employees. The group’s
share schemes have been opened up to the
former Bromley staff, so that approximately 
two-thirds of staff are now shareholders.
Grainger is an entrepreneurial organisation. 
Staff of all levels are encouraged to put forward
ideas and all are given consideration. Although
formal employee satisfaction surveys are not yet
undertaken, employees are encouraged to give
feedback, particularly during the performance
review process see in figure 8, right.
In September 2004 a diligent process of formally
aligning each employee’s personal objectives with
the overall objectives of the group was initiated.
Objectives for each ‘division’ were agreed
between the head of that division and the
executive board member responsible for that
division. As performance reviews were performed,
the objectives of the organisation were cascaded
throughout and personal targets set which were 
in line with the overall objectives. Further training
needs in order to achieve objectives set are being
gathered together, therefore we can be certain
that the money we spend on direct training will
specifically enhance our ability to meet stated
objectives.
We also support employees to achieve further
relevant qualifications through our further
education policy. During the year to 
30 September 2004, we sponsored 
13 employees to obtain degrees or other
professional qualifications, plus seven employees
studying for the IRPM – the Institution of
Residential Property Manager’s qualification.
Ann Johnson is one of several sponsorship
success stories for Grainger. Her achievements
were featured in the local press in August 2004,
when she graduated with a BA in Housing
Sustainable Communities and also won an 
award from the Chartered Institute of Housing,
North East Region for Best Undergraduate
Student. Ann joined Grainger in 1997 as a
secretary to the surveying department. She has
taken on more responsibility over the years and
has recently moved to another position within
Grainger land and regeneration division. We 
feel this demonstrates Grainger support and
development of staff for the benefit of the group
as well as the individual.
Grainger take all staff matters seriously. The 
group employs an HR manager for general
matters and a specific HR manager for training
and development. Both of these employees
report directly to the deputy chief executive 
officer and finance director, who has overall
responsibility for HR. No changes to terms 
and conditions are made without consultation
with relevant staff.
A full overhaul of our intranet is ongoing. The 
end product should be a most useful tool for 
both communicating with our employees and as
an invaluable source of best practice guidelines. 
The CSR policy will be included on it. It is
intended that our progress on our CSR objectives
will be updated after each CSR committee
meeting. Employees will be encouraged to offer
suggestions and take part in charitable events.
The health and safety of our employees is also
paramount. We have an overall policy and
significant guidance on our current intranet.
Figure 10 - Grainger employee ages
Mission
Objectives
Strategies
Training needs
Figure 8 - Performance review process
Figure 9 - Grainger staff statistics
Male
Female
Under 30
17
38
24
27
22
15
11
23
31–40
41–50
Over 50
Intranet
We are overhauling our intranet. This will result 
in a useful tool for communicating with our
employees, and an invaluable source of guidelines
to best practice.
Our people
Grainger has a core of committed staff expert 
in buying, selling, managing and developing
residential property, as well as enthusiastic
support staff based in our six offices.
Performance reviews
At 
30 Sept 2004
Women in senior management/ 
holding board positions 3
Total members of staff 177
Year ended 
30 Sept 2004
No. staff who received training 125
No. staff sponsored in further education 20
No. leavers 23 Annual report and accounts 2004
Grainger Trust plc
19
Objective 3
To structure our approach to charitable
giving and community support.
We have taken time to consider how best this
objective can be achieved so as to ensure our
actions are appropriate for our varied
stakeholders.
The regeneration of arts and culture is important
to Grainger and as a company we have made a
commitment to make sure our business supports
the cultural development of the North East region,
where Grainger has its roots. Following the
sponsorship of Antony Gormley’s ‘Domain Field’
exhibition at the Baltic last year, this year we
sponsored an English Heritage project – Fashion
at Belsay (FAB). Well-known fashion designers
and some not so well known from the University
of Northumbria, each selected an area within
Belsay Hall and its grounds, to create an original
piece of work. Grainger guests were invited to 
the launch night and we also held an event at 
our year end to thank the key people we work
with in other organisations. We aim to sponsor
one prominent art related event each year.
In the South of the country, we have been
investigating several potential partnerships. 
We are pleased to announce that we have
agreed to support Open House on an ongoing
basis. Open House is an architectural education
charity with three principal objectives:
• To foster public awareness and appreciation 
of London’s excellent built environment and
architecture through free access
• To promote architectural literacy and further 
a better understanding of architecture and the
public environment across all sections of the
community, particularly with children and 
young people
• To create dialogues about the present and
future environments between the Capital’s
residential and business community
We hope to be involved in various activities
including Annual London Open House, an 
event that takes place over a weekend each
September and attracts over 350,000 people 
to some 500 buildings and Junior Open House,
an educational scheme for 11-14 year olds,
involving an extended training programme 
for teachers, building visits for 2,000 school
children, and culminating in an awards scheme.
Open House have also offered their support 
with community and educational events in
conjunction with our development projects 
such as the regeneration site in Hornsey.
From the current financial year, which started 
in October 2004, we will be nominating a 
charity of the year. If employees participate 
in sponsored events, then Grainger will match 
the sponsorship raised up to £100 per employee,
provided it is donated to our charity of the year.
We are delighted to announce that our first
nominated charity is Shelter – the housing 
and homelessness charity. Shelter aim to end
homelessness and bad housing in Britain by
advising and campaigning, as well as research
and fundraising. Shelter was a natural choice 
for us, but we will be defining appropriate
conditions and criteria for our future nominees.
Each office will also be encouraged to organise 
a fundraising event in aid of our chosen charity.
Employees organising these events will be 
invited to the next CSR committee meeting to
report the outcome.
Other events in which we participated during 
the year include the Cancer Research ‘world’s
biggest coffee morning’, where employees baked
cakes and sold them, with the proceeds going to
the charity, and ‘JeansforGenes’ day. 
In total in 2004 we gave £25,455 to charitable
causes. This included £1,000 for a new 85cc
scrambler bike for a 14 year old boy in Hadston,
one of our development areas where we have
worked closely with the local community. His 
own new bike had been stolen and without 
one he could no longer participate in moto-cross,
where he had won 75 trophies in the two
previous years.
Charity of the year
Shelter – the housing and
homelessness charity aim to end
homelessness and bad housing in
Britain by advising and campaigning,
as well as research and fundraising.
Fashion at Belsay
This year we sponsored an English Heritage
project – Fashion at Belsay (FAB). Well-known
fashion designers and some not so well known
from the University of Northumbria, each selected
an area within Belsay Hall and its grounds, to
create an original piece of work. The above horse
was designed by Stella McCartney.
Given to charitable causes in 2004
£25,455
Open House
We are pleased to announce that we
have agreed to support Open House
on an ongoing basis.  Grainger Trust plc
Annual report and accounts 2004
20
Objective 4
To ensure compliance with all applicable
social and environmental legislation as 
a minimum.
As a matter of course, senior managers read
relevant trade press, and are therefore aware 
of regulations which could materially impact 
on Grainger, as they develop. In this current
climate of constantly emerging legislation, it 
is increasingly difficult to monitor and interpret 
its volumes. We therefore took the decision 
to maintain a register of all relevant legislation,
which is provided to us and regularly updated 
by consultants who specialise in this field.
The committee will review the register after 
each update in order to disseminate changes 
to senior management whose departments will
be affected.
We monitor our performance where key
regulations affect us. The main one relates 
to the necessity for a landlord to check gas
supplies/appliances. The Gas Safety (Installation
and Use) Regulations 1998 place a duty on
landlords to ensure that gas appliances, fittings
and flues provided for tenants’ use are not 
posing a health risk. The inspections must be
undertaken by a CORGI registered contractor in
each dwelling on an annual basis, and remedial
action must be taken where required. Sometimes
it can be difficult to gain entry for various reasons,
and we have best practice guidelines which are
followed rigorously to ensure both tenant and
landlord protection. 
Another major concern for us is that the
contractors we engage adhere to the relevant
health and safety standards. All contractors 
and consultants employed directly or indirectly
(via agents) by Grainger are to be risk assessed
and the results held on a database. 
The database will include the following details:
• Area of operation and expertise
• Date of assessment/approval
• Current public liability insurance 
• Member of specialist organisation 
(i.e. Corgi/FENSA)
Any new contractors will have to ensure they meet
all the criteria including risk assessments before
they can be added to the database. Contractors
who fail to comply or have outstanding relevant
details will not be able to be used.
Grainger land and regeneration division is
becoming increasingly involved in both social 
and physical regeneration. Of note this year 
is a joint venture/partnership arrangement 
for the redevelopment of a 30-acre brownfield 
site at North Shields, Tyne & Wear. Significant
contamination exists at the site, which 
was viewed as potentially harmful to the
surrounding community. 
In the South East, Grainger has begun to work 
on projects to redevelop run-down locations. 
We are pleased with the progress we have 
made on these projects, which demonstrate
effectively how business can be conducted 
with favourable social outcomes and expect 
to be able to report further next year.
In 2005 we hope to develop briefing notes 
for staff on the CSR legal requirements of 
their activities. This will be as a result of a
thorough review of our register of legislation.
Having made a tentative start, based on careful
consideration, we hope to make significant
progress on all of our stated objectives over 
the coming year.
The most significant environmental issues 
affect primarily some 10% of the business – 
our development and trading division, further 
we negotiate with external parties to ensure
standards are maintained. In Grainger Homes, 
for example, we employ a main contractor 
for each site and that contractor takes the
responsibility for all health and safety and
environmental matters on that site. Our
agreement with the contractor stipulates
minimum standards, and requires compliance
with all applicable legislation and regulations.
No separate environmental report is therefore
produced. Following further CSR work, we 
will attempt to justify the expense of a formal
environmental audit, whilst considering any 
likely benefit.
We are able to report that we now recycle 
waste paper in our offices and during the 
period between November 2003 and 
30 September 2004 we have saved over 
100 trees.
Health and safety policy
We have duties to our employees, tenants of
owned or managed properties, contractors,
visitors, clients and the general public. 
We aim to:
• Comply with the Health and Safety at Work etc.
Act 1974 and all relevant statutory provisions.
• Provide adequate resources to enable this policy
to be implemented.
• Ensure the health, safety and welfare of our
employees and others who may be affected by 
our activities. 
• Provide such information, instruction, training
and supervision as is necessary to ensure the
health and safety of our employees.
• Ensure that all plant and equipment under our
control is maintained in a safe condition and is
subject to routine and statutory inspections and
examinations.
• Ensure that assessments of the risks arising
from our activities are undertaken and the
appropriate control measures and safe systems
of work are implemented.
• Ensure that all accidents and dangerous
occurrences are reported and where necessary,
investigated and appropriate action taken to
prevent recurrence.
Equal opportunities
It is our policy to treat job applicants and
employees in the same way, regardless of their
sex, sexual orientation, age, race, ethnic origin or
disability. Further, the organisation will monitor the
composition of the workforce and introduce
positive action if it appears that this policy 
is not fully effective.
Redevelopment of brownfield site 
at North Shields, Tyne & Wear
Of note this year is a joint venture/partnership
arrangement for the redevelopment of a 
30-acre brownfield site at North Shields.  Annual report and accounts 2004
Grainger Trust plc
21
Board Members
A strong board: 
We have in place the three key
resources for us to continue as a
consistently successful long-term
business: a superb asset base, 
a sound funding platform and 
an expert and unrivalled team. 
1 Robert Dickinson C.B.E., D.L.
Chairman, chairman of nomination committee
Aged 70
Appointed a director of the company in 1961,
and chairman in 1992. Chairman of Northern
Investors Company plc, chairman of University 
of Newcastle upon Tyne Development Trust,
chairman of AON Minet Pension Trust.
2 Rupert Dickinson M.R.I.C.S.
Chief executive
Aged 45
Joined the company in 1992 from Richard Ellis
(now Insignia Richard Ellis). Appointed a director
of the company in 1994. Appointed chief
executive in October 2002.
3 Andrew Cunningham F .C.A.
Deputy chief executive and finance director
Aged 48
Joined Deloitte Haskins and Sells in London
in 1978 and worked in their Nairobi and 
Bristol offices before being made a partner 
in Newcastle in 1989. Appointed a director 
of the company in December 1996. Appointed
deputy chief executive in December 2002.
Non-executive directors
4 Nichola Pease 
Chairman of remuneration committee, 
member of nomination committee
Aged 43
Appointed a director of the company in 
June 2001. Chief executive of J.O. Hambro
Capital Group Limited and a director of 
Northern Rock plc.
Retiring from the board at the annual 
general meeting.
5 Robin Herbert C.B.E.
Senior independent non-executive director,
member of audit and nomination committees
Aged 70
Appointed a director of the company in 1994.
Appointed senior independent non-executive
director in June 2002. Chairman of Investors
Capital Trust plc.
Retiring from the board at the annual 
general meeting.
6 Stephen Dickinson F .C.A.
Deputy chairman
Aged 70
In practice in British Virgin Islands 1963-1974.
Appointed managing director of the company 
in 1974. Upon retiring as managing director 
in October 2002, became deputy chairman. 
British Virgin Islands representative on United
Kingdom Overseas Territories Association 
1993-2004.
7 Robert R S Hiscox A.C.I.I.
Member of remuneration and nomination
committees
Aged 61
Appointed a director of the company in 
March 2002. Chairman of Hiscox plc. 
Deputy chairman of Lloyd’s 1993 to 1995.
8 John Barnsley F .C.A.
Chairman of audit committee, member of
remuneration committee
Aged 56
Appointed a director of the company in 
February 2002. Non-executive director of
Northern Investors Company plc and American
Appraisal Associates LLP . Until December 2001
was a senior partner at PricewaterhouseCoopers.
9 Robin Broadhurst C.B.E., F .R.I.C.S.
Member of audit committee
Aged 58
Appointed a director in February 2004. Recently
retired from Jones Lang LaSalle where he was
European chairman. Trustee and director of the
Grosvenor Estate, a senior adviser to Credit
Suisse First Boston, property consultant to 
Sir Robert McAlpine Limited, member of the
Prince’s Council for the Duchy of Cornwall.
123 4 5 6 7 8 9 Grainger Trust plc
Annual report and accounts 2004
22
The Applicable Code
The group is committed to high standards of corporate governance. The ‘Applicable Combined
Code’ for Grainger for the year ended 30 September 2004 was the Combined Code issued in 
June 1998. This was the last year in which this code was relevant, and as such the board has 
made diligent progress towards compliance with the New Combined Code, published in July 2003.
Where relevant, provisions of the New Combined Code are referred to within this report.
The terms of reference of the board’s committees have been reviewed in the light of the New
Combined Code and have been adopted by the board. The terms of reference refer specifically 
to relevant matters that are reserved for the attention of the full board. Copies of these terms of
reference are available from the Company Secretary upon request.
Board meetings
The group believes in recruiting and retaining the best staff throughout the organisation – and this
begins at the top. There is a working balance of non-executives and executives, entrepreneurial and
cautious. The board meets four times per year, with additional meetings as required. Telephone 
and video conference are used where short notice is necessary. In June each year the board meets
for a two day period. During this time extended strategy discussions are held; there is often a visit 
to group properties and dinners are held with senior staff and group contacts, including advisers,
bankers and agents.
Attendance at board meetings:
Date of meeting
Dec 03 Feb 04 Jun 04 Sept 04
Robert Dickinson ✓✓ ✓ ✓
Stephen Dickinson ✓✓ ✓ ✓
Rupert Dickinson ✓✓ ✓ ✓
Andrew Cunningham ✓✓ ✓ ✓
Sean Slade ✓✓ ✓ –
Robin Herbert ✓✓ ✓ ✓
Robert Hiscox – ✓✓ ✓
Nichola Pease ✓✓ – ✓
John Barnsley ✓✓ ✓ ✓
Robin Broadhurst* ✓✓
John Ward** ✓✓
✓ attended – apologies
* appointed after February 2004 board meeting
** resigned at February 2004 annual general meeting
The board’s responsibilities and procedures
The primary obligations of the board are detailed in a schedule of matters reserved for board
attention. These include overall strategy, investment strategy, acquisitions and debt over certain 
limits and accounting policies. The executive directors are responsible for communicating the 
board’s strategy to the senior management of the organisation and hence the effective
implementation of strategy and day-to-day running of the group.
The board is supplied with relevant financial and non-financial information to enable it to make
decisions. Information is supplied in a timely manner, before each board meeting. During the year 
a new monthly report has been developed to provide the non-executive directors with up-to-date
financial analysis. Any director may request further information at any time, such requests are given 
high priority. Procedures are in place for directors to take independent professional advice, when
necessary, at the group’s expense.
The chairman is responsible for the running of the board. He has instigated a process of evaluation 
of the directors as individuals, the committees and the board as a whole. The process will begin 
in the financial year commencing 1 October 2004. The chief executive is responsible for the
management of the day to day running of the group. Robin Herbert served as senior independent
non-executive director throughout the year. He is therefore the director to whom shareholders 
may turn should any concerns fail to be resolved through the normal channels of chairman, chief
executive or finance director. Following Robin Herbert’s impending retirement at the annual general
meeting in February 2005, Robin Broadhurst will fulfil this role.
Board membership and independence
Although board members have been required to stand for re-election at intervals of no more than 
three years for several years now, the board believes it is important to maintain stability and continuity 
for longer periods. Principally, this is due to the long-term nature of the group’s core businesses. 
The process of purchasing land, negotiating planning and then subsequent development to sale 
can amount to many years’ hard work, where continuity of leadership is a real asset. The board 
in fact considers itself fortunate to have retained the services of several long-standing directors for
extended periods. Further, the board does not consider that such service periods prohibit a director
from being considered independent. Length of service does not in itself, in the board’s view, impair
character or judgement. 
During the year, the board comprised the chairman, six non-executive directors and three executive
directors. Robin Broadhurst was appointed to the board following the annual general meeting in
February 2004 when John Ward retired, thus maintaining the number of non-executives throughout
the year. Robin Broadhurst will stand for re-election at the next annual general meeting. Sean Slade
resigned on 12 November 2004.
Training for directors is available, where appropriate, both on appointment to the board and thereafter.
The independence of the non-executive directors who served during the year, as assessed by the
Applicable Combined Code and by the board, is set out opposite.
Corporate Governance Report Annual report and accounts 2004
Grainger Trust plc
23
Under the New Combined Code, Nichola Pease, Robin Broadhurst and John Barnsley would be
considered independent as at the date of this report. 
The board therefore considers that it had a majority of independent non-executives throughout the year.
Biographical details of all directors appear on page 21.
Board committees
The three principal committees of the board – Audit, Nomination and Remuneration, were maintained
throughout the year. Each committee has terms of reference, which indicate matters that must be
retained for the main board.
Audit committee
John Ward was succeeded as chairman on 26 February 2004 by John Barnsley, who was already a
member of the committee. On appointment to the board on the same date, Robin Broadhurst also
joined the committee. Robin Herbert served throughout the year. The board therefore considers that
the committee comprised three independent non-executive directors throughout the period under
review. As noted earlier, Robin Herbert will be retiring at the annual general meeting in February 2005.
The board intends to appoint a further independent non-executive director to the board, and that
director will also serve on the audit committee in order to retain the required constitution.
The audit committee met four times and updated its terms of reference during the year. 
Nomination committee
Robert Dickinson (chairman) and Robin Herbert served on the nomination committee throughout the
year. Nichola Pease replaced Stephen Dickinson during the year. Robert Hiscox was also appointed.
Remuneration committee
Nichola Pease, chairman of the remuneration committee, served throughout the year, as did Robert
Hiscox and John Barnsley. John Ward retired at the annual general meeting on 26 February 2004.
Relations with shareholders
The company meets regularly with institutional shareholders and analysts. In addition to the usual meetings
after results announcements, ad hoc meetings are arranged to continue dialogue throughout the year. 
In particular, during the year under review, the group’s chief executive and deputy chief executive/finance
director have visited other countries in Europe where there is interest in Grainger’s shares. 
The annual general meeting is the primary route for communication with smaller/private shareholders,
although the group’s website also includes a specific Investor Relations section. All directors attend
the annual general meeting, and the chairmen of all committees are available to answer questions.
The notice of meeting and annual report and accounts are sent out at least 20 working days before
the meeting. Separate votes are held for each proposed resolution, including the approval of the
remuneration committee report, and a proxy count is available in each case. 
Director
Robert Dickinson 
Chairman
Stephen Dickinson 
Deputy Chairman
Robin Herbert 
Senior Independent
Director
John Barnsley
Robert Hiscox
Nichola Pease
Robin Broadhurst 
(appointed 
26 February 2004)
John Ward 
(retired 
26 February 2004)
Applicable combined code
Not independent – close
family ties, more than nine
years’ service, cross
directorships.
Not independent – close
family ties, more than nine
years’ service, cross
directorships. Part time
executive responsibilities
Not independent – more 
than nine years’ service.
Independent as at the date
of this report. Until
December 2001 John
Barnsley was a senior
partner for the group’s
auditors. Minor cross
directorship. 
From December 2004 John
Barnsley’s former position
with the group’s auditors is
no longer relevant for the
determination of
independence. He was
however strictly not
independent throughout the
year under review.
Not independent – Trustee
for Estate containing
material shareholding.
Independent.
Independent. 
Not independent – more
than nine years’ service,
cross directorships.
Board’s opinion
Not independent. The board has decided 
that taking all relevant facts into consideration,
Robert Dickinson cannot be considered
independent.
Not independent. The board has decided that
taking all relevant facts into consideration,
Stephen Dickinson cannot be considered
independent.
Independent. As stated above, the board does
not consider length of service, on its own, 
to affect the independence of its directors. 
It considers that Robin Herbert is of sound
character and judgement and thus independent.
Independent as at the date of the report and
throughout the year. Although it is suggested that
three years should elapse following a relationship
with a professional adviser of the group, John
Barnsley was not connected with any service
provided to the group during his time with the
group’s auditors. He has no continuing personal
interests with the group’s auditors and is not any
form of conduit of information. Although John
Barnsley is a director of Northern Investors
Company PLC, where Robert Dickinson is also a
director, this mutual interest is not considered to
have any impact on his independent judgement
as a director of Grainger. 
Independent. Robert Hiscox’s trusteeship is not,
on its own, sufficient to affect his independent
character and judgement. Robert Hiscox brings
significant skill and business experience to the
board in his own right.
Independent.
Independent. 
Independent. As stated above, the board does
not consider length of service, on its own, to
affect the independence of its directors. It
considers that John Ward was of sound
character and judgement and thus independent
during his time on the board this year. John Ward
was also a director of Northern Investors PLC,
along with Robert Dickinson and John Barnsley,
but this was not considered to have any impact
on his independent judgement. Grainger Trust plc
Annual report and accounts 2004
24
Internal control
The group has a cyclical process for identifying, assessing and managing its significant risks. The
process is designed to enable the board to be confident that such risks are mitigated, or controlled
as far as possible. It should be noted however that no system can eliminate the risk of failure to
achieve business objectives entirely and can only provide reasonable and not absolute assurance
against material misstatement or loss. The audit committee is delegated the task of reviewing all
identified risks, with the absolute key risks retained for full board review. Risks and controls are
reviewed to ensure effective management of appropriate strategic, financial, operational and
compliance issues. The audit committee also reviews the half year and full year financial statements
and holds discussions with the group’s auditors. In addition, the group has an internal audit function
which performs relevant reviews as part of a programme approved by the audit committee. 
The committee considers any issues or risks arising therefrom in order that appropriate actions 
can be undertaken to their satisfactory resolution.
In particular, over the last year, there have been many changes to the group’s systems made as a
result of the acquisition of the remaining 50% of Bromley just prior to the year ended 30 September
2003. The group’s external auditors were involved in reviewing these changes as part of their normal
audit procedures to the extent that they considered necessary. The group also enjoyed a unique
opportunity to redesign the organisational structure, which, whilst not stifling the entrepreneurial
nature of the group, allows the board to retain full control of the business.
An annual budget is produced, together with longer term projections, which are presented to the 
board for approval. At each meeting the board discusses progress against the budget and monitors
any variances. If applicable, revisions are made to the expected outturn against which further
progress can be monitored.
The board also discusses in detail the projected financial impact of major proposed acquisitions and
disposals, including their financing. All such proposed substantial investments are considered by all
directors or, where meetings are required between board meetings and a full complement of directors
cannot be achieved, by an executive committee of directors. The board is also responsible for the
discussion and approval of the group’s treasury strategy, including mitigation against changes in 
interest rates.
Going concern
After making enquiries, including the review of future anticipated cash flows and banking covenants,
the directors have a reasonable expectation that the group and company have adequate resources
to continue in existence for the foreseeable future. For this reason they continue to adopt the going
concern basis in preparing the accounts.
Compliance statement
With the exception of the provisions listed below, the group has, throughout the year ended 
30 September 2004, been in compliance with the Applicable Combined Code.
Independence: A3.2, B2.2, D3.1
As shown in the table on page 23, although the Applicable Combined Code strictly considers several 
of the non-executive directors to be not independent, the board differs in opinion.
Length of contracts: B1.7 to B1.10
Two of the executive directors have contracts of over one year, with no specific provisions for
compensation for loss of office. The board feels that this is necessary to ensure commitment and
long-term continuity in achieving the group’s objectives, which by virtue of the group’s activities are
also long-term in nature. However, the notice period on their original contracts is being reduced from
two years to one year on a straight line basis over a period of five years from 1 October 2002. At the
date of this report, the notice period outstanding stood at approximately 18 months.
By order of the board
Marie Glanville
Company Secretary
21 December 2004 
Corporate Governance Report continued Annual report and accounts 2004
Grainger Trust plc
25
The directors present their report and the audited financial statements for the year ended
30 September 2004.
Principal activities
During the year the group has continued its activities of property trading and development.
Review of business development and prospects
Development of the group’s activities and its prospects are reviewed in the chairman’s statement 
on pages 4 and 5 and the chief executive’s statement on pages 6 to 9.
Results for the year
The results of the group are set out in the consolidated profit and loss account on page 34, which
shows a profit on ordinary activities after taxation for the financial year of £33.0m (2003: £29.4m).
An interim dividend of 4.04p per share (2003: 3.51p) was paid on 23 July 2004 amounting to £1.0m
(2003: £0.8m) and the directors recommend the payment of a final dividend of 19.20p per share
(2003: 12.80p), to be paid on 4 March 2005, amounting to £4.7m (2003: £3.2m). The profit, after
dividend, of £27.3m (2003: £25.3m) will be transferred to reserves.
Directors
The directors of the company who served during the year are listed on page 29. 
Directors’ and other interests
The interests of the directors in the shares of the company at 30 September 2004 and 7 December 2004
(or date of resignation, if earlier), with comparative figures as at 1 October 2003 (or date of appointment, 
if later), are as follows:
Ordinary shares of 25p each (thousands)
Beneficial Non-beneficial
1 Oct 30 Sept 7 Dec 1 Oct 30 Sept 7 Dec
2003 2004 2004 2003 2004 2004
Robert Dickinson 222 202 202 494 457 457
Stephen Dickinson 780 771 771 576 541 541
Rupert Dickinson 182 249 249 46 43 42
Robin Herbert 50 50 50 – – –
Andrew Cunningham 73 74 74 – – –
Nichola Pease 71 48 48 37 37 37
Robert Hiscox – – – 2,500 2,500 2,500
Sean Slade 40 32 32 – – –
John Barnsley 2 3 3 – – –
Robin Broadhurst – – – – – –
1,420 1,429 1,429 3,653 3,578 3,577
Shares held in trust of which Robert Dickinson is a trustee, included in the above beneficially
owned by:
Ordinary shares of 25p each (thousands)
Beneficial Non-beneficial
1 Oct 30 Sept 7 Dec 1 Oct 30 Sept 7 Dec
2003 2004 2004 2003 2004 2004
Stephen Dickinson 2 1 1 – – –
Rupert Dickinson 2 1 1 – – –
Andrew Cunningham 2 1 1 – – –
Sean Slade 2 1 1 – – –
Shares held in trust of which Robert Dickinson and Stephen Dickinson are both trustees, included in
the above non-beneficial holdings:
–– – 14 14 14
Details of directors’ share options are given on page 30.
Save as disclosed above, as at 7 December 2004, the company is aware of the following interests
amounting to 3% or more in the company’s shares:
Holding Holding
(thousands) %
Schroder Investment Management Limited* 2,220 8.95
Aberforth Partners* 1,252 5.05
Barclays Global Investors Limited* 1,067 4.30
F & C Asset Management Plc* 1,001 4.03
Morley Fund Management Limited* 877 3.53
Henderson Global Investors* 806 3.25
*Shares held by funds managed or advised by the company indicated and/or its subsidiaries. 
The company is not aware of any other substantial interests amounting to 3% or more.
Retirement and rotation of directors
Robin Herbert and Nichola Pease will retire from the board of directors at the annual general meeting
to be held in February 2005. Robin Broadhurst was appointed a director on 26 February 2004, and
in accordance with the Articles of Association, will offer himself for re-election at the annual general
meeting. Stephen Dickinson, Robert Hiscox and Andrew Cunningham retire by rotation and, being
eligible, offer themselves for re-election at the annual general meeting. Robert Dickinson is standing
for re-election again this year. The Companies Act 1985 requires him to do so as he attained the age
of 70 since the last annual general meeting in February 2004. Stephen Dickinson has also reached
the age of 70.
On 12 November 2004 Sean Slade resigned from the board.
Directors’ Report
For the year ended 30 September 2004.  Grainger Trust plc
Annual report and accounts 2004
26
Directors’ interests in significant contracts
No directors were materially interested in any contract of significance.
Directors’ insurance
The group maintains insurance for Grainger Trust plc’s directors in respect of their duties as directors.
Statement of directors’ responsibilities
The directors are required by UK Company law to prepare financial statements for each financial year
that give a true and fair view of the state of affairs of the company and the group as at the end of the
financial year and of the profit or loss of the group for that period.
The directors confirm that suitable accounting policies have been used and applied consistently 
and that reasonable and prudent judgements and estimates have been made in the preparation 
of the financial statements for the year ended 30 September 2004. The directors also confirm that
applicable accounting standards have been followed and that the financial statements have been
prepared on the going concern basis.
The directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the company and the group 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 of the group, and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Acquisitions
There were no material corporate acquisitions in the year. Details of minor acquisitions are given in
note 26. 
Creditor payment policy
In respect of the financial year following that covered by this report, it is the group’s policy to pay
suppliers in accordance with their normal terms and conditions of trading. Payment in respect of 
the purchase of property is subject to and will comply with contractual terms. Trade creditors existing
at 30 September 2004 relating to purchases of property stock generally complete 28 days after
exchange of contracts. Trade creditor days relating to other trade creditors of the company and
group were calculated as 30 days (2003: 38 days).
Charitable donations
During the year the group made charitable donations amounting to £25,455 (2003: £4,480).
Health and safety
The company seeks to achieve the highest standards in respect of health and safety of employees,
and the safety of tenants. Consultants are employed to ensure that the company complies with
health and safety regulations and each year the gas supply and appliances within all of the group’s
relevant residential properties are independently inspected under the Gas Safety (Installation and Use)
Amended Regulations 1996 and certificates of compliance issued. 
Employment of disabled persons
The company gives full and fair consideration to applications for employment made by disabled
persons, having regard to their particular aptitudes and abilities. In the event of an employee
becoming disabled, every effort is made to ensure that their employment within the company
continues and that appropriate training is arranged where necessary. It is the policy of the company
that the training, career development and promotion of disabled persons should, as far as possible,
be identical to that of other employees.
Auditors
PricewaterhouseCoopers LLP have expressed their willingness to continue in office as auditors to the
company and group. A resolution to reappoint them as auditors to the company will be proposed at
the next annual general meeting. 
Issue of shares
As disclosed in note 20 to the financial statements, the company issued 48,307 25p ordinary shares
during the year for an aggregate consideration of £132,000.
By order of the board
Marie Glanville
Company Secretary
21 December 2004
Directors’ Report continued Annual report and accounts 2004
Grainger Trust plc
27
This report meets the disclosure requirements of the Companies Act 1985 and the Listing Rules 
and in accordance with usual practice will be put to shareholders for approval at the annual 
general meeting.
PricewaterhouseCoopers LLP have audited the directors’ remuneration, share options, share awards
and deferred bonus sections of this report (‘the auditable part’). The remainder of the report
comprises the unaudited part.
The remuneration committee
Throughout the year, the remuneration committee was chaired by Nichola Pease, and other
members were Robert Hiscox, John Barnsley and John Ward until his retirement from the board in
February 2004. As noted in the chairman’s statement, Nichola Pease will be retiring at the annual
general meeting in February 2005. Robert Hiscox will take over as chairman of the committee, and
Robin Broadhurst will join. The committee will therefore retain its membership of three non-executive
directors, all of whom are independent in the board’s opinion. Nichola Pease will be available at the
annual general meeting to answer related questions from shareholders. 
The committee appointed New Bridge Street Consultants LLP (NBSC) and received advice from
them during the year regarding the competitiveness of overall packages for the executive directors
and on the group’s incentive schemes. NBSC also provided updates on Grainger’s performance in
relation to the long-term incentive schemes.
The committee met three times during the year to consider the remuneration policy for the
executives and senior management, in order to make recommendations to the board. 
The committee’s terms of reference were recently revised and are available on the group’s website.
Remuneration policy
Grainger’s remuneration policy is designed to attract, motivate and retain high calibre individuals 
to enable the group to operate strategically for the continued benefit of shareholders, over the 
long-term. In order to operate this policy, the remuneration committee receives information on
remuneration packages awarded to directors in comparable organisations.
The policy is also designed to align the directors’ interests with those of shareholders. This is
principally achieved through the use of share-based incentives and by encouraging executive
directors to maintain a reasonable shareholding in the group. Details of executive directors’
shareholdings are shown on page 25.
Remuneration packages include salary, bonus and pension elements as well as long-term share
incentive and option schemes. Benefits are also afforded.
No executive director is involved in the determination of his own remuneration. Fees of the 
non-executive directors, which are set partly under consideration of their committee responsibilities, 
are determined by the board as a whole. 
‘Senior management’ are viewed as the group of people known in Grainger as the ‘subsidiary
directors’. The salaries and bonuses of this group of eight people (pictured with Rupert Dickinson
and Andrew Cunningham on page 6), are recommended by the executive directors and reviewed by
the remuneration committee. These employees also participate in the long-term incentive scheme
described below.
Service contracts
As stated in the corporate governance report, Rupert Dickinson and Andrew Cunningham each hold
service contracts with notice periods decreasing on a straight line basis from two years to one year,
over a period of five years which began on 1 October 2002. At the date of this report therefore the
notice periods have been reduced to approximately 18 months. Their contracts were dated 19 July
1996 and 26 July 2000 respectively. Sean Slade held a contract with a 12 month notice period,
which was dated 22 January 2002.
Apart from salary and benefits in relation to the notice period described above, there are no other
terms in any of the contracts that would give rise to compensation payable for early termination, 
or any other liability of the company.
No executive director holds a non-executive directorship outside of the group.
Each non-executive director has specific terms of reference. Their letters of appointment state an
initial one year period, with a continuation subject to review at that time. The letters of appointment
contain no entitlement to compensation for early termination.
Non-performance related remuneration
Basic salaries and benefits
Basic salaries are reviewed by the remuneration committee annually. Uplifts are by reference to 
cost of living, responsibilities and market rates, as for all employees, and are performed at the 
same time of year. Executive directors and the deputy chairman, Stephen Dickinson, who has 
part-time executive responsibilities, specifically including land and regeneration, along with other
senior members of staff, received a fully expensed company car, or a car allowance. Along with 
all members of staff, executive directors also benefit from health and life insurances.
The chairman’s and non-executive directors’ fees are reviewed on a biennial basis by the whole board. 
Pensions
The group contributes 15% of basic salary to the money purchase pension schemes of Rupert Dickinson
and Andrew Cunningham, and contributed 10% to that of Sean Slade. No other elements of
remuneration are pensionable.
Share schemes open to all employees
Executive directors, and Stephen Dickinson, deputy chairman, are eligible to participate in two share
schemes which are open to all employees with relevant service, subject to the rules of the schemes.
The first is a Save As You Earn scheme (SAYE), and the second a Share Incentive Plan (SIP). Both
are Inland Revenue approved and therefore subject to the limits prescribed.
Amounts relating to directors’ share options under the SAYE scheme are shown on page 30. 
Performance related remuneration
A significant element of executive directors’ and senior management’s potential remuneration is
performance related. The combination of short and long-term incentives attempt to align the interests
of executives and senior management with the interests of shareholders, and to reward significant
outperformance of budgeted expectations.
Non-executive directors do not receive performance related remuneration.
Remuneration Committee Report Grainger Trust plc
Annual report and accounts 2004
28
Annual discretionary bonus
Each year the remuneration committee considers the award of a bonus to the executive directors,
which is at their ultimate discretion. Rupert Dickinson and Andrew Cunningham, participate in 
an arrangement introduced last year whereby the provisional bonus is calculated over a three 
year period by reference to the enhancement of the triple net asset value of Grainger, relative to 
a theoretical market comparator. The comparator movement is calculated with regard to the
Nationwide and Halifax house price indices and also interest rates, using five year swap rates.
Bonuses remain capped at 150% of salary. Subject always to the committee’s discretion, one-third 
of the calculated amount is approved for payment and the provisional balance is taken into account
over the next two years. The award payable for the year ending 30 September 2004 represents
61% of salary for that year (2003: 88%).
Long-term incentives
Grainger’s policy in relation to long-term incentive schemes has evolved over time to align the 
long-term interests of executives and senior management more closely with those of shareholders,
to reward sustained performance over a number of financial years and to encourage the executives
to increase their shareholdings.
Executive directors and senior management are eligible to receive annual conditional awards of
shares worth up to 50% of salary under the Long-Term Incentive Scheme and of share options up
to a maximum of 125% of salary under the Executive Share Option Scheme. The awards under both
schemes become unconditional provided performance criteria are satisfied over a single three year
performance period following grant. The criteria for all awards granted since March 2002 has been
based on Total Shareholder Return (TSR) – dependent upon where Grainger’s TSR lies with respect
to a pre-determined comparator group as follows:
Comparator companies Performance condition Vesting of option
Brixton plc
Capital and Regional plc If Grainger’s TSR is equal to or greater than the 
CLS Holdings plc upper quartile TSR of the comparator companies 100%
Daejan Holdings plc
Derwent Valley Holdings plc If Grainger’s TSR is equal to the median TSR of 
Freeport plc the comparator companies 40%
Great Portland Estates plc
London Merchant Securities plc If Grainger’s TSR is above the median but 
Minerva plc below the upper quartile TSR of the 
Mountview Estates plc* comparator companies Pro-rata vesting
Pillar Property plc If Grainger’s TSR is below the median TSR of the 
Quintain Estates and comparator companies 0%
Development plc
Shaftesbury plc
The Unite Group plc
* Benchmark Group plc delisted during the year and was replaced by Mountview Estates plc.
As shown in the table above, no award vests unless Grainger's TSR is higher than the median
TSR of the comparator group.
Remuneration Committee Report continued
These performance criteria are believed to be stretching but realistic, and reward executives if Grainger’s
return to shareholders outperforms this group of companies operating in broadly similar markets. 
Options are granted at the current mid-market price and any material changes to the long-term
incentive schemes are presented to shareholders for approval.
The graph below shows TSR (based upon share price growth with dividends reinvested) for Grainger,
compared to the comparator group, the FTSE 250 and the FTSE Real Estate Index. These comparators
have been chosen on the basis that they are the markets within which Grainger operates.
Total Shareholder Return
Five years to 30 September 2004
1999 2000 2001 2002 2003 2004
100
200
0
300
400
500
Grainger Trust
Net Total Return Index
FTSE 250
Net Total Return Index
FTSE Real Estate
Net Total Return Index
Comparator Group 
Net Total Return Index
Grainger Trust Annual report and accounts 2004
Grainger Trust plc
29
Directors’ remuneration
Chairman, deputy chairman and executive directors Non-executive directors
Robert Stephen Rupert Andrew Sean Robin John Robin Robert Nichola John Robin
Dickinson Dickinson Dickinson Cunningham Slade Total Herbert Barnsley Broadhurst Hiscox Pease Ward Oldfield Total Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-performance related
remuneration
Salary and fees 90 120 400 300 160 1,070 30 28 15 25 30 12 – 140 1,210
Taxable benefits – 20 27 20 14 81 – – – – – – – – 81
Share incentive plan – 6 6 6 6 24 – – – – – – – – 24
Total non-performance related
remuneration 90 146 433 326 180 1,175 30 28 15 25 30 12 – 140 1,315
Performance related remuneration
Annual discretionary bonus – – 245 180 35 460 – – – – – – – – 460
Total performance related
remuneration – – 245 180 35 460 – – – – – – – – 460
Total remuneration for the year
ended 30 September 2004 90 146 678 506 215 1,635 30 28 15 25 30 12 – 140 1,775
Total remuneration for the year
ended 30 September 2003 90 239 602 437 231 1,599 30 12 – 25 30 30 10 137 1,736
Pension contributions into money
purchase schemes
Year ended 30 September 2004 – – 60 45 16 121 – – – – – – – – 121 
Year ended 30 September 2003 – – 30 33 13 76 – – – – – – – – 76
On 26 February 2004, Robin Broadhurst was appointed. This followed John Ward’s resignation of the same date. In the previous year, Robin Oldfield resigned and John Barnsley was appointed, both on 
27 February 2003.  Grainger Trust plc
Annual report and accounts 2004
30
Remuneration Committee Report continued
Directors’ share options
Ordinary shares of 25p each (thousands)
Stephen Rupert Andrew Sean
Dickinson Dickinson Cunningham Slade Total
30 Sept 1 Oct 30 Sept 1 Oct 30 Sept 1 Oct 30 Sept 1 Oct 30 Sept 1 Oct
Dates exercisable Exercise price 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
Non-performance related (available to all staff)
SAYE scheme
8 Aug 07 to 8 Feb 08 £8.180 – – 2 2 2 2 2 2 6 6
1 Sept 08 to 1 March 09 £9.323 2 2 – – – – – – 2 2
Performance related (conditional awards)
Inland Revenue Approved Executive 
Share Option Scheme
6 Jan 97 to 6 Jan 04 £2.312 – – – 40 – – – – – 40
19 July 99 to 19 July 06 £2.920 – – – – – – 10 10 10 10
23 Dec 99 to 23 Dec 06 £3.425 – – – – 9 9 – – 9 9
Long-Term Incentive Scheme
9 July 00 to 9 July 07 £2.671 – – 13 13 7 7 8 8 28 28
24 Jan 06 to 24 Jan 13 £9.590 – – 39 39 29 29 20 20 88 88
12 Jan 07 to 12 Jan 14 £16.320 – – 31 – 23 – 12 – 66 –
2 2 85 94 70 47 52 40 209 183
During the year, Rupert Dickinson exercised 40,000 options under the company’s Inland Revenue
Approved Executive Share Option Scheme at the option price of £2.312. At the date of exercise, 
the mid-market price was £16.15 per share. The total gain before tax was £553,520.
The market price of the company’s shares at the end of the financial year was £18.35, and the range
during the year was £13.38 to £19.55. 
The current long-term incentive scheme replaced the old Executive Share Option Scheme, however
some options granted under this scheme are still in existence and are disclosed above. Exercise is
conditional upon a growth in earnings per share in excess of the retail price index over a period of
three consecutive years during the period of the option.
Directors’ share awards
Ordinary shares of 25p each (thousands)
Rupert Andrew Sean
Dickinson Cunningham Slade Total
30 Sept 1 Oct 30 Sept 1 Oct 30 Sept 1 Oct 30 Sept 1 Oct
Earliest vesting date 2004 2003 2004 2003 2004 2003 2004 2003
Performance related (conditional awards)
Long-Term Incentive Scheme
1999 scheme (matching awards) 5 Dec 05 10 10 9 9 4 4 23 23
2002 scheme 24 Jan 06 16 16 11 11 8 8 35 35
2003 scheme 12 Jan 07 12 – 9 – 5 – 26 –
38 26 29 20 17 12 84 58
The share price at the date of award of the 2003 scheme was £16.32.
Deferred bonus
As reported fully in previous years, Rupert Dickinson and Andrew Cunningham participate in a one-off
deferred bonus scheme as detailed below:
Original monetary Equivalent number of shares, First tranche – vested Second tranche
amount based on average share price 11 Dec 03 to vest in Dec 2005
1 Oct 00 – 30 Sept 01 (£7.1319) (mid-market value £15.75) following results announcement 
Rupert Dickinson £600,000 84,130 42,065
Andrew Cunningham £300,000 42,064 21,032
Sean Slade announced his resignation on 12 November 2004. He received compensation of one
year’s basic salary and benefits, and an ex-gratia payment of £30,000. In addition the remuneration
committee awarded him 3,011 shares and 7,527 options under current long-term incentive 
schemes. These awards took into account the time that had elapsed since the grant of the awards
and the performance of the group as required by the rules of the scheme. Sean also received 2,655
shares relating to the matching award which would have vested in December 2005. Just prior to
resignation he exercised 10,273 approved share options and he retains 7,712 options which are
exerciseable until 12 May 2005.
Nichola Pease
Chairman of the Remuneration Committee
21 December 2004
Providing still in full 
time employment and 
not under notice to leave Annual report and accounts 2004
Grainger Trust plc
31
We have audited the financial statements which comprise the statement of accounting policies, the
consolidated profit and loss account, the statement of group total recognised gains and losses, note
of group historical cost profits and losses, balance sheets, the consolidated cash flow statement, 
and the related notes. We have also audited the disclosures required by Part 3 of Schedule 7A to 
the Companies Act 1985 contained in the remuneration committee report (‘the auditable part’).
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and the financial statements in
accordance with applicable United Kingdom law and accounting standards are set out in the
statement of directors’ responsibilities. The directors are also responsible for preparing the
remuneration committee report.
Our responsibility is to audit the financial statements and the auditable part of the remuneration
committee report in accordance with relevant legal and regulatory requirements and United Kingdom
Auditing Standards issued by the Auditing Practices board. This report, including the opinion, has
been prepared for and only for the company’s members as a body in accordance with Section 235
of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown 
or into whose hands it may come save where expressly agreed by our prior consent in writing. 
We report to you our opinion as to whether the financial statements give a true and fair view and
whether the financial statements and the auditable part of the remuneration committee report have
been 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 is not disclosed.
We read the other information contained in the annual report and consider the implications for our
report if we become aware of any apparent misstatements or material inconsistencies with the
financial statements. The other information comprises only the chairman’s statement, the chief
executive’s statement, the operating and financial review, the corporate governance report, the
directors’ report, the corporate social responsibility report and the unaudited part of the remuneration
committee report. 
We review whether the corporate governance statement reflects the company’s compliance with the
seven provisions of the Combined Code specified for our review by the Listing Rules of the Financial
Services Authority, and we report if it does not. We are not required to consider whether the board’s
statements on internal control cover all risks and controls, or to form an opinion on the effectiveness
of the company’s or group’s corporate governance procedures or its risk and control procedures. 
The maintenance and integrity of the Grainger Trust plc website is the responsibility of the 
directors; the work carried out by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that may have occurred to the
financial statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Basis of audit opinion
We conducted our audit in accordance with 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 and the auditable part of the remuneration committee report. 
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 company’s circumstances, 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 and the auditable part of the remuneration committee report 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 at 30 September 2004 and of the profit and cash flows of the group for the year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985;
and
• those parts of the remuneration committee report required by Part 3 of Schedule 7A to the
Companies Act 1985 have been properly prepared in accordance with the Companies Act 1985.
PricewaterhouseCoopers LLP
Chartered accountants and registered auditors
Newcastle upon Tyne
21 December 2004
Independent Auditors’ Report to the Members of Grainger Trust plc Grainger Trust plc
Annual report and accounts 2004
32
Statement of accounting policies
A summary of the principal accounting policies is set out below. The policies have been applied
consistently in all material respects throughout the current and the previous year with the exception
of the adoption of UITF38.
Accounting convention 
The group prepares its annual financial statements on the historical cost basis of accounting, as
modified by the revaluation of investment properties and in accordance with the Companies Act
1985 and applicable UK accounting standards.
Basis of consolidation 
The group financial statements comprise the consolidated financial statements of the company and
its subsidiaries. The financial statements of subsidiary companies are made up to 30 September.
The results of subsidiaries sold or acquired are included in the consolidated profit and loss account up
to, or from, the date control passes. Intra-group sales and profits are eliminated fully on consolidation.
On acquisition of a subsidiary, all of the subsidiary’s assets and liabilities that exist at the date of
acquisition are recorded at their provisional fair values reflecting their condition at that date.
Goodwill arising on consolidation represents the difference between the fair value of the consideration
paid and the fair value of the identifiable assets acquired. Goodwill arising on the acquisition of
subsidiaries prior to 30 September 1998 was eliminated or credited immediately against reserves and
will be transferred to the profit and loss account on subsequent disposal of the business to which it
relates. Goodwill arising subsequent to that date is shown in the balance sheet under fixed assets.
Positive goodwill is amortised through the profit and loss account over its estimated useful economic
life. Negative goodwill is amortised through the profit and loss account over the period in which the
non-monetary assets are realised either through depreciation or sale.
Turnover
Turnover comprises gross sale proceeds of trading properties and developments, gross rentals,
commissions and sundry other income, and is exclusive of VAT. Sales of land and properties are 
only recognised when the cash proceeds are received in full or the group has entered into a legally
binding undertaking. Gross rentals and commissions are recognised as they fall due.
Joint venture 
In compliance with FRS9, the group accounts for joint ventures under the gross equity method.
Under this method, the group’s share of the joint venture’s turnover and profits and losses are
separately disclosed in the group’s profit and loss account. The group’s share of the gross assets
and gross liabilities, together with goodwill, is shown on the face of the balance sheet. The group’s
statement of total recognised gains and losses includes its share of the joint venture’s total
recognised gains and losses.
Repairs and improvements
Repairs are charged in the year they are incurred. Improvement costs are capitalised. 
Pensions
The company makes contributions to defined contribution schemes only for all employees. Pension
costs are charged in the year to which they relate.
The Bromley Property Holdings Limited group currently contributes to two pension schemes. The first
is a defined contribution scheme which is open to all employees. The contributions are charged 
to the profit and loss account during the year to which they relate. The second is a defined benefit
scheme, which was closed to new members and employee contributions in 2003. The group will
continue to contribute so as to spread the cost over the expected remaining life of the relevant
employees. The transitional disclosure requirements of FRS17, ‘Retirement Benefits’, are given 
in note 28 to the financial statements.
Tangible fixed assets
The cost of fixed assets is their purchase cost, together with any incremental costs of acquisition. 
In accordance with SSAP 19, (i) investment properties are revalued annually and the aggregate
surplus or temporary deficit is transferred to a revaluation reserve, and (ii) no depreciation or
amortisation is provided in respect of freehold investment properties and leasehold investment
properties with over 20 years to run. Permanent diminutions in value below cost are charged in the
profit and loss account. The requirement of the Companies Act 1985 is to depreciate all properties,
but that requirement conflicts with the generally accepted accounting principle set out in SSAP 19.
The directors consider that to depreciate such properties would not give a true and fair view, as the
properties are not held for consumption but for investment, and that a true and fair view is given 
by following SSAP 19 as described above. The effect of depreciation and amortisation on value is
already reflected annually in the valuation of properties, and the amount attributed to this factor by
the valuers cannot reasonably be separately identified or quantified. Had the provisions of the Act
been followed, net assets would not have been affected but revenue and profits would have been
reduced for this and earlier years.
Full valuations are made by independent professionally qualified valuers every year. The basis of
valuation is explained in note 10. 
Depreciation is calculated so as to write off the cost of tangible fixed assets (excluding investment
properties), less their estimated residual values, over the expected useful economic lives of the assets
concerned. The principal annual rates used for this purpose are:
% Method
Fixtures, fittings and equipment 20 Straight line
Financial Statements 2004 Annual report and accounts 2004
Grainger Trust plc
33
Investments
Investments in subsidiaries and other investments are included in the financial statements at cost 
less provisions for impairment.
Stocks
Tenanted residential properties are shown in the financial statements at the lower of cost to the group
and net realisable value. Cost to the group includes legal and surveying charges incurred during
acquisition together with improvement costs. Net realisable value is the net sale proceeds which 
the group expects on sale of a property with vacant possession. 
Development and trading properties are shown in the financial statements at the lower of cost to 
the group and net realisable value. Cost represents the acquisition price together with subsequent
development costs net of amounts transferred to cost of sales. Net realisable value is the current
market value as advised by the group’s professional valuers. 
Derivative financial instruments
The group uses derivative financial instruments to reduce exposure to interest rate movements. 
The group does not hold or issue derivative financial instruments for speculative purposes.
For an interest rate swap to be treated as a hedge the instrument must be related to actual assets or
liabilities or a probable commitment and must change the nature of the interest rate by converting a
fixed rate to a variable rate or vice versa. Interest differentials under these swaps are recognised by
adjusting net interest payable over the periods of the contracts.
If an instrument ceases to be accounted for as a hedge, for example because the underlying hedged
position is eliminated, the instrument is marked to market and any resulting profit or loss recognised
at that time.
Deferred taxation
Deferred tax is measured at the rate expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have been enacted by the balance sheet
date. Deferred tax is measured on a non-discounted basis.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis
of all evidence available, it can be regarded as more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can be deducted.
Deferred taxation is not recognised when fixed assets are revalued unless by the balance sheet date
there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on the
sale has been recognised in the financial statements.
Share schemes
The group operates a long-term incentive plan and a deferred bonus scheme. Shares in the
company are held for these purposes by The Grainger Trust Employee Trustee Limited, the assets,
income and costs of which have been included in these financial statements.
Prior year adjustment
The group has adopted Urgent Issues Task Force Abstract 38: ‘Accounting for ESOP trusts’ for 
the 2004 financial statements. As a result of the implementation of the requirements of this Abstract,
shares in the company held by an employee share scheme trustee company which were previously
reported as investments are now recorded as a deduction from equity shareholders’ funds. At 
30 September 2004, the carrying value of these shares was £2.3m, which has been set against the
profit and loss account in the balance sheet. The comparative figures for investments and profit and
loss account have been amended to reflect the change in treatment. The comparative figures have
been restated in a prior year adjustment to reflect this changed treatment such that shareholders’
funds at 30 September 2003 have been reduced by £2.2m. Details of the effect of the prior year
adjustment are shown in note 21. Consolidated profit and loss account
Year ended Year ended
30 September 30 September
2004 2003
For the year ended 30 September 2004 Notes £m £m
Turnover (2003: including share of joint venture) 1 217.4 173.6
Less: share of turnover of joint venture – (55.6)
Group turnover 217.4 118.0
Gross rentals 41.0 21.4
Trading profits 72.6 38.8
Other income 9.8 0.9
123.4 61.1
Less:
Property expenses (22.7) (9.1)
Administration expenses (7.5) (4.7)
Group operating profit 93.2 47.3
Share of operating profit of joint venture
(after amortisation of goodwill of £nil (2003: £35,000)) – 23.6
Total operating profit: Group and share of joint venture 93.2 70.9
Net profit on disposal of and provisions against fixed assets
– Group 6.5 1.9
– Joint venture – 4.1
2 6.5 6.0
Profit on ordinary activities before interest 99.7 76.9
Net interest payable and similar charges
– Group (40.1) (11.5)
– Group exceptional 3, 4 (5.4) – 
– Joint venture – (16.9)
3 (45.5) (28.4)
Profit on ordinary activities before taxation 1, 5 54.2 48.5
Tax on profit on ordinary activities 7 (21.2) (19.1)
Profit on ordinary activities after taxation 33.0 29.4
Minority interest – equity 25 – (0.1)
Profit attributable to shareholders 33.0 29.3
Dividends 8 (5.7) (4.0)
Retained profit for the year 21 27.3 25.3
Basic earnings per share 9 134.2p 119.8p
Diluted earnings per share 9 133.4p 119.3p
Basic earnings per share before exceptional interest 9 149.7p 119.8p
All results relate to continuing operations.
Statement of group total recognised gains and losses
2004 2003
For the year ended 30 September 2004 Notes £m £m
Profit on ordinary activities attributable to shareholders 33.0 29.3
Taxation on realisation of property revaluation gains 
of previous years 7 (0.4) –
Unrealised surplus on revaluation of properties 10, 21 4.3 3.1
Surplus recognised in the profit and loss account in the year – (1.3)
Adjustment to reserves arising from the consolidation 
of the joint venture – (2.9)
Total gains and losses recognised – group 36.9 28.2
Share of joint venture tax on realisation of revaluation surpluses – (0.9)
Unrealised surplus on revaluation of joint venture properties – 4.4
Total gains and losses recognised since the last 
annual report – group and joint venture 36.9 31.7
Note of group historical cost profits and losses
2004 2003
Notes £m £m
Reported profit on ordinary activities before taxation 54.2 48.5
Realisation of property revaluation gains of previous years 21 5.1 3.1
Historical cost profit on ordinary activities before taxation 59.3 51.6
Taxation (21.6) (20.0)
Minority interest – (0.1)
Dividends (5.7) (4.0)
Retained historical cost profit for the year 32.0 27.5
Grainger Trust plc
Annual report and accounts 2004
34
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
35
Balance sheets
Group Company
2003
2004 (restated) 2004 2003
At 30 September 2004 Notes £m £m £m £m
Fixed assets
Intangible assets 12 (84.8) (97.2) – –
Tangible assets 10 106.7 109.1 0.6 0.4
Investments 11 10.3 7.0 91.3 97.3
32.2 18.9 91.9 97.7
Current assets
Stocks 14 918.6 888.3 – –
Debtors 15 10.6 10.0 146.4 114.6
Cash at bank and in hand 16 53.8 81.7 0.7 0.3
983.0 980.0 147.1 114.9
Creditors: amounts falling due 
within one year 17 (109.0) (154.5) (71.8) (46.6)
Net current assets 874.0 825.5 75.3 68.3
Total assets less current liabilities 906.2 844.4 167.2 166.0
Creditors: amounts falling due after more 
than one year 17 (717.9) (684.8) – (2.5)
Provisions for liabilities and charges 19 (10.4) (12.8) – –
Net assets 177.9 146.8 167.2 163.5
Capital and reserves
Called up equity share capital 20 6.2 6.2 6.2 6.2
Share premium account 21 21.5 21.4 21.5 21.4
Revaluation reserve 21 13.9 14.7 – –
Capital redemption reserve 21 0.2 0.2 0.2 0.2
Profit and loss account 21 136.1 104.2 139.3 135.7
Equity shareholders’ funds 22 177.9 146.7 167.2 163.5
Minority interests – equity 25 – 0.1 – –
177.9 146.8 167.2 163.5
The financial statements on pages 32 to 46 were approved by the board of directors on 21 December
2004 and were signed on their behalf by:
Rupert Dickinson Andrew Cunningham
Director Director
Consolidated cash flow statement
2003
2004 (restated)
For the year ended 30 September 2004 Notes £m £m
Net cash inflow/(outflow) from operating activities (see below) 56.7 (37.3)
Dividends from joint venture – 52.0
Returns on investments and servicing of finance
Interest received 3.3 2.9
Interest paid – normal (42.2) (14.0)
– exceptional (5.4) –
Dividends received 0.2 0.2
(44.1) (10.9)
Taxation
UK Corporation tax paid (24.1) (11.8)
Capital expenditure and financial investment
Purchase of fixed asset investments (4.5) –
Purchase of tangible fixed assets (29.8) (0.5)
Sale of fixed asset investments 1.2 –
Sale of tangible fixed assets 41.1 2.1
8.0 1.6
Acquisitions and disposals
Purchase of subsidiaries 26 (2.3) (25.9)
Costs on purchase of subsidiaries – (0.3)
Cash acquired on purchase of subsidiaries 26 0.2 74.9
(2.1) 48.7
Equity dividends paid (4.2) (3.6)
Cash (outflow)/inflow before financing (9.8) 38.7
Financing
New loans raised 24 726.1 64.0
Repayment of loans 24 (743.7) (30.2)
Purchase of shares (0.6) (1.4)
Issue of shares 20 0.1 0.1
Net cash (outflow)/inflow from financing (18.1) 32.5
(Decrease)/increase in cash in the year 23 (27.9) 71.2
Reconciliation of group operating profit to 
net cash inflow/(outflow) from operating activities
2004 2003
£m £m
Operating profit 93.2 47.3
Depreciation 0.4 0.2
Movement in provisions for liabilities and charges (0.2) –
Amortisation of goodwill (6.1) (0.2)
Increase in debtors (2.0) (1.6)
Increase/(decrease) in creditors 1.7 (13.6)
Increase in stocks (30.3) (69.4)
Net cash inflow/(outflow) from operating activities 56.7 (37.3) Grainger Trust plc
Annual report and accounts 2004
36
Notes to the financial statements
For the year ended 30 September 2004.
1 Segmental analysis by class of business
The analysis by class of business of the group’s turnover, profit before interest and taxation, and net
assets is set out below:
Turnover and profit before taxation
2004 2003
2004 Profit before 2003 Profit before
Turnover taxation Turnover taxation
£m £m £m £m
Class of business
Continuing operations
Tenanted residential 157.5 76.1 81.0 35.6
Development and trading 59.9 23.6 37.0 13.6
217.4 99.7 118.0 49.2
Joint venture – – 55.6 27.7
217.4 99.7 173.6 76.9
Net interest payable – group – (45.5) – (11.5)
Net interest payable – joint venture –– – (16.9)
217.4 54.2 173.6 48.5
The joint venture operated its activities as one class of business encompassing both tenanted residential
and development and trading.
Net assets
Net assets Adjusted net assets*
2003
2004 (restated) 2004 2003
£m £m £m £m
Class of business
Continuing operations
Tenanted residential 148.0 94.0 623.6 464.8
Development and trading 29.9 52.8 54.7 78.6
177.9 146.8 678.3 543.4
*Adjusted net assets represent balance sheet net assets plus the excess of market value over book cost of trading stock, 
as valued on the same basis as disclosed in note 10, net of minority interest. Adjusted net assets exclude any provision for
contingent taxation. Turnover between segments is immaterial.
Analysis by geographical area
The group operates solely within the United Kingdom.
2 Net profit on disposal of and provisions against fixed assets
2004 2003
£m £m
Group
Profit on disposal of investment properties 6.5 0.6
Write back of impairment of investment properties – 1.3
6.5 1.9
Joint venture
Profit on disposal of investment properties – 4.1
Group and joint venture 6.5 6.0
3 Net interest payable and similar charges
2004 2003
£m £m
Group
Bank loans and overdrafts 38.4 9.7
Debentures and other loans 2.7 3.2
Other interest costs 2.5 1.7
43.6 14.6
Less:
Income from listed fixed asset investments (0.2) (0.2)
Interest receivable (3.3) (2.9)
40.1 11.5
Exceptional interest:
Cost of redemption of loans and debenture stock (note 4) 5.4 –
45.5 11.5
Joint venture
Bank loans and overdrafts – 12.8
Debentures and other loans – 0.9
Other interest costs – 4.4
– 18.1
Less:
Interest receivable – (1.2)
– 16.9
Group and joint venture 45.5 28.4
All interest payable is charged to the profit and loss account. No interest has been capitalised in this or
prior periods.
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
37
4 Exceptional interest
2004 2003
£m £m
Cost of early redemption of loans and debenture stock 5.4 –
The exceptional interest was paid in cash during the course of the year and represented the premium paid
upon early redemption of quoted debentures and penalties on the early repayment of loans.
5 Profit on ordinary activities before taxation
2004 2003
£m £m
Profit on ordinary activities before taxation is stated after charging:
Depreciation of tangible owned fixed assets 0.4 0.2
Auditors’ remuneration (including expenses)
(Company £6,000 (2003: £6,000)) 0.1 0.1
And after crediting:
Amortisation of goodwill 7.6 0.2
Remuneration of the company’s auditors for the provision of non-audit services to the company and its
UK subsidiary undertakings was £61,000 (2003: £81,000). Of this £34,000 (2003: £62,000) related to 
tax compliance and advisory services.
6 Directors and employees
2004 2003
£m £m
Staff costs (including executive directors) during the year:
Wages and salaries 8.7 5.3
Social security costs 1.2 1.0
Other pension costs (see note 28) 0.9 0.3
10.8 6.6
Less: recharged to joint venture – (0.7)
10.8 5.9
The average weekly number of persons employed by the group during the year (including executive
directors) was 164 (2003: 94). All employees were involved in the management and/or administration 
of the group. Details of directors’ remuneration (including pensions), directors’ share options and interests
in the long-term incentive plan are provided in the remuneration committee report on pages 27 to 30.
7 Taxation
2004 2003
£m £m
Analysis of charge in year
Current tax:
Group
UK Corporation tax on profits for the period 20.8 12.3
Adjustments in respect of prior periods (0.6) 0.2
Transferred to appropriate reserve (see below) (0.4) –
Joint venture
UK corporation tax on profits for the period – 6.3
Adjustments in respect of prior periods – 1.9
Total current tax 19.8 20.7
Deferred tax:
Origination and reversal of timing differences
Group 1.4 (0.6)
Joint venture – (1.0)
Total deferred tax 1.4 (1.6)
Group and joint venture 21.2 19.1
The group allocates the tax arising on the sale of investment properties between the profit and loss
account and the appropriate reserve to match the accounting treatment of the gain arising. Tax
attributable to the exceptional interest charges is a credit of £1.6m.
Factors affecting the tax charge for the year
The tax assessed for the period is higher than the standard rate of corporation tax in the UK (30%).
The differences are explained below:
2004 2003
£m £m
Profit on ordinary activities before tax 54.2 48.5
Profit on ordinary activities before tax at a rate of 30% 16.3 14.6
Expenses not deductible for tax purposes 0.6 0.7
Effect of negative goodwill written back (2.3) (1.5)
Tax on fair values released on sales 7.2 4.4
Effect of timing differences (0.5) 0.6
Difference between tax and accounting profit on disposals (0.9) (0.2)
Adjustments in respect of prior periods (0.6) 2.1
Total current tax 19.8 20.7 Grainger Trust plc
Annual report and accounts 2004
38
7 Taxation continued
Factors that may affect future tax charges
No provisions for deferred tax have been made on gains which would become payable if the group’s
investment properties were sold at their year end values. The estimate of unprovided deferred tax is
£15.9m (2003: £16.5m).
FRS19 prohibits the making of provisions for contingent tax liabilities on the fair value of properties on 
the acquisition of companies. It had previously been industry practice to make partial provision for such
liabilities as part of our fair value exercise on acquisition. Thus there is a greater tax charge on property
sales where there is no brought forward contingent tax provision available to be utilised in its reduction. 
The total contingent tax to the group on the difference between original cost and carrying value of trading
properties not provided at 30 September 2004 is £83.3m (2003: £91.8m).
8 Dividends
2004 2003
£m £m
Dividends on equity shares:
Ordinary – interim paid of 4.04p per share (2003: 3.51p per share) 1.0 0.8
Ordinary – final proposed of 19.20p per share (2003: 12.80p per share) 4.7 3.2
5.7 4.0
9 Earnings per share
The calculation of basic, diluted and adjusted earnings per share is based on the following earnings and
number of shares:
Year ended 30 September 2004 Year ended 30 September 2003
Weighted Weighted
Profit average Profit average
for the number Earnings for the number Earnings
year of shares per share year of shares per share
£m (thousands) pence £m (thousands) pence
Basic earnings per share 
Profit attributable to shareholders 33.0 24,563 134.2 29.3 24,473 119.8
Exceptional interest (note 4) less tax 3.8 15.5––
Adjusted earnings 36.8 149.7 29.3 119.8
Effect of dilutive securities 
Options – 144 – – 117 –
Diluted earnings per share
Profit attributable to shareholders 33.0 24,707 133.4 29.3 24,590 119.3
Exceptional interest (note 4) less tax 3.8 15.4––
Adjusted earnings 36.8 148.8 29.3 119.3
The adjusted earnings per share is presented as, in the opinion of the directors, it gives a better picture of
the underlying performance of the business.
9 Earnings per share continued
The impact of shares held by the ESOP trustee company have been taken into account in the calculation
of the weighted average number of shares for the year ended 30 September 2004. The comparatives for
2003 have been restated on the same basis.
10 Tangible fixed assets
Group Company
fixtures, fixtures,
Investment fittings and fittings and
properties equipment Total equipment
£m £m £m £m
Cost or valuation
At 1 October 2003 108.1 2.0 110.1 1.0
Surplus on revaluation 4.3 – 4.3 –
Additions 28.9 0.9 29.8 0.4 
Disposals (35.9) (0.7) (36.6) (0.2)
At 30 September 2004 105.4 2.2 107.6 1.2
Depreciation
At 1 October 2003 – 1.0 1.0 0.6
Charge for year – 0.4 0.4 0.1
Released on disposals – (0.5) (0.5) (0.1)
At 30 September 2004 – 0.9 0.9 0.6
Net book value
At 30 September 2004 105.4 1.3 106.7 0.6
At 30 September 2003 108.1 1.0 109.1 0.4
Group investment properties were revalued at their market value at 30 September 2004 by Jones Lang
LaSalle, Chartered Surveyors, independent of the company, or by in-house valuations. A structured
sample of the in-house valuations has been reviewed by Allsop & Co., Chartered Surveyors, independent
of the company. Based on the results of that review, Allsop & Co. have concluded that they have a high
degree of confidence in those valuations. These represent estimates of the open market value of the
properties subject to the tenancies then existing.
The net book value of investment properties comprises:
Group
2004 2003
£m £m
Freehold 97.7 99.8
Long leasehold 7.7 8.3
Net book value 105.4 108.1
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
39
10 Tangible fixed assets continued
If investment properties had not been revalued, they would have been included at the following amounts:
Group
2004 2003
£m £m
Net book value 101.0 104.9
11 Fixed asset investments
Group Company
Other Investment in Other
investments subsidiaries investments Total
£m £m £m £m
Cost 
At 1 October 2003 (restated) 7.0 90.3 7.0 97.3
Additions 4.5 – – –
Disposals (1.2) – – –
Permanent diminution arising in the year – (6.0) – (6.0)
At 30 September 2004 10.3 84.3 7.0 91.3
The group’s other investments have been restated to take account of UITF 38, as explained in note 21.
Group
Other investments
2003
2004 (restated)
£m £m
Investments at net book value include:
Investments listed on a recognised stock exchange 7.0 7.0
Aggregate market value of listed investments 9.7 8.8
The directors consider that providing details of all subsidiaries as at 30 September 2004 would result in
disclosure of excessive length. The following information relates to those subsidiary undertakings whose
results or financial position, in the opinion of the directors, principally affected the figures of the group:
Proportion of nominal value of
ordinary issued shares held by:
Name of undertaking Group % Company % Activity
Northumberland Property & Durham Trust Limited 100 – Property trading
GIP Limited 100 – Property trading 
& investment 
Grainger Residential Management Limited 100 100 Property management
Derwent Developments Limited 100 – Land development
BPT (Bradford Property Trust) Limited 100 – Property trading
BPT (Assured Homes) Limited 100 – Property investment
BPT (Residential Investments) Limited 100 – Property investment
Bridgewater Tenancies Limited 100 – Property trading
Home Properties Limited 100 – Property trading
Grainger Homes Limited 100 – House building
All subsidiaries are consolidated in the group accounts, are incorporated in England and Wales and
operate within the United Kingdom.
12 Intangible assets
Group
Positive Negative
goodwill goodwill Total
£m £m £m
Cost
At 1 October 2003 – (98.5) (98.5)
Adjustment to prior year additions (see note 27) – 4.5 4.5
Additions 0.3 – 0.3
At 30 September 2004 0.3 (94.0) (93.7)
Amortisation
At 1 October 2003 – 1.3 1.3
Amortisation for year – 7.6 7.6
At 30 September 2004 – 8.9 8.9
Net book value
At 30 September 2004 0.3 (85.1) (84.8)
At 30 September 2003 – (97.2) (97.2)
The goodwill and negative goodwill arising on acquisitions are being amortised in line with the disposal of
acquired assets. £6.1m of the amortisation in the year was recognised within trading profits and £1.5m
within profit on disposal of fixed assets.
13 Capital commitments
The group had capital commitments contracted but not provided for of £nil at 30 September 2004 
(2003: £nil).
14 Stocks
Group
2004 2003
£m £m
Trading and development properties 918.6 888.3
The market value of the group’s trading and development properties is £1,332.5m (2003: £1,185.8m),
as valued on the same basis as disclosed in note 10. Grainger Trust plc
Annual report and accounts 2004
40
15 Debtors
Group Company
2004 2003 2004 2003
£m £m £m £m
Trade debtors 5.8 2.6 – –
Amounts owed by group undertakings – – 145.0 112.6
Other debtors 0.5 0.6 – 0.3
Prepayments and accrued income 2.9 4.0 1.4 1.7
Deferred tax asset (see note 19) 1.4 2.8 – –
10.6 10.0 146.4 114.6
16 Cash at bank and in hand
At 30 September 2004, bank balances included £30.4m (2003: £53.8m) which is held by lenders
awaiting substitution of alternative security, represents deposits received or is held as a guarantee 
for loan note obligations.
17 Creditors 
Group Company
2004 2003 2004 2003
£m £m £m £m
Amounts falling due within one year:
Mortgages and other loans – 11.7 – –
Loan notes 31.8 41.2 1.6 1.9
Bank loans – 23.5 – 2.0
Deposits received 0.8 1.0 – –
Trade creditors 22.2 8.1 – –
Amounts owed to group undertakings – – 55.1 25.6
Corporation tax payable 20.5 24.9 – 2.8
Other taxation and social security 3.2 2.0 – 0.1
Accruals and deferred income 25.8 38.9 10.4 11.0
Dividends payable 4.7 3.2 4.7 3.2
109.0 154.5 71.8 46.6
Group Company
2004 2003 2004 2003
£m £m £m £m
Amounts falling due after more than one year:
10
1
/2% debenture stock – 1.9 – 1.9
11
3
/4% debenture stock – 0.6 – 0.6
Mortgages and other loans – 427.6 – –
Bank loans 717.9 254.7 – –
717.9 684.8 – 2.5
17 Creditors continued
Group Company
2004 2003 2004 2003
£m £m £m £m
Maturity of finance debt (net of issue costs) is as follows:
In one year or less 31.8 76.4 1.6 3.9
Between one and two years – 46.8 – –
Between two and five years 475.2 210.6 – –
Between five and ten years 199.1 358.7 – –
Over ten years 43.6 68.7 – 2.5
749.7 761.2 1.6 6.4
Bank loans bear interest at rates between 0.9% and 1.0% above LIBOR and are secured by fixed and
floating charges over the assets of the group. Repayments are over terms of 4 to 28 years.
Loan notes carry interest at 0.75% and 1.00% below LIBOR and are payable half-yearly/quarterly or on
demand. Final redemption is at par on 30 September 2009 and 30 April 2011.
18 Financial instruments
The group’s policies in relation to financial instruments are set out in the operating and financial review on
page 14. All amounts are held in pounds sterling. Short-term debtors and creditors have been excluded
from these disclosures as they do not have a significant impact on the financial risk profile of the group.
Interest rate risk profile of financial liabilities
2004
Fixed rate Capped rate Floating rate
liabilities liabilities liabilities Total
£m £m £m £m
Loan notes – – 31.8 31.8
Bank debt 45.0 456.1 223.9 725.0
Total 45.0 456.1 255.7 756.8
2003
Fixed rate Capped rate Floating rate
liabilities liabilities liabilities Total
£m £m £m £m
Quoted debentures 2.5 – – 2.5
Institutional debt 17.4 – – 17.4
Loan notes – – 41.3 41.3
Bank debt 60.9 533.4 111.1 705.4
Total 80.8 533.4 152.4 766.6
The interest rate profile shown above takes into account the various derivative instruments used to
manage interest rate fluctuations and is gross of issue costs.
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
41
18 Financial instruments continued
Borrowings subject to caps, collars and swaps are included in capped rate liabilities. 
2004
Fixed rate Capped rate
weighted Weighted weighted Weighted
average average average average 
rate period rate period
% years % years
Hedge profile
Bank debt 6.3 20 6.1 3
2003
Fixed rate Capped rate
weighted Weighted weighted Weighted
average rate average period average rate average period
% years % years
Hedge profile
Quoted debentures 10.8 21 – –
Institutional debt 11.8 2 – –
Bank debt 6.9 20 5.8 4
Total 8.1 17 5.8 4
The fixed and capped rates are inclusive of loan margins and reflect the effective cost of finance after
taking account of the effect of interest rate swaps.
Financial assets
The group’s financial assets at the year end consist of cash at bank and in hand of £53.8m (2003: £81.7m).
The interest rate on this is floating.
Borrowing facilities
The group had unutilised borrowing facilities at the year end. The undrawn facilities available to the group
amount to £230m (2003: £41m), of which £10m expires on 30 September 2005 and £220m expires on
23 June 2009 (2003: £25m expired on 30 September 2004 and £16m expired on 9 January 2004).
Fair values of financial liabilities
The following fair values represent the amounts at which the financial instruments could be exchanged 
on an arm’s length transaction between informed and willing parties, and exclude accrued interest.
18 Financial instruments continued
2004 2003
Fair Fair
Book Fair value Book Fair value
value value adjustment value value adjustment
£m £m £m £m £m £m
Financial instruments:
Quoted debentures ––– 2.5 3.4 (0.9)
Institutional debt ––– 17.4 19.1 (1.7)
Fixed rate bank debt 42.5 43.8 (1.3) 58.3 63.0 (4.7)
Total fixed rate debt 42.5 43.8 (1.3) 78.2 85.5 (7.3)
Debt fixed under one year 707.2 707.2 – 683.0 683.0 –
Derivative financial instruments:
Interest rate swaps – 2.1 (2.1) – 6.5 (6.5)
Interest rate caps – (0.1) 0.1 – (0.8) 0.8
Interest rate collars – (0.1) 0.1 –– –
Total current derivatives – 1.9 (1.9) – 5.7 (5.7)
Future interest rate swaps – 1.9 (1.9) – 4.9 (4.9)
Total derivatives – 3.8 (3.8) – 10.6 (10.6)
749.7 754.8 (5.1) 761.2 779.1 (17.9)
Financial assets:
Cash (53.8) (53.8) – (81.7) (81.7) –
695.9 701.0 (5.1) 679.5 697.4 (17.9)
Less amount provided (see note 19) 4.6 6.8
(0.5) (11.1)
The fair values were calculated at 30 September 2004 using interest rates and market prices prevailing 
at that date and reflect the replacement values of the respective financial instruments. After deduction of
provisions, this has an after tax effect on NAV of 1p (2003: 31p).
The figures for 2003 have been re-presented to include the gross fair values and fair value adjustments
arising before the fair value provision of £6.8m made on the acquisition of Bromley Property Holdings
Limited. Previously these figures were presented net of the £6.8m provision.
Changes in the fair value of derivative instruments are only recognised when the position matures or
terminates. Grainger Trust plc
Annual report and accounts 2004
42
18 Financial instruments continued
An analysis of the unrecognised gains and losses arising on financial instruments used as hedges is as
follows:
Gains Losses Net total
£m £m £m
Gains/(losses) on hedges at 1 October 2003 1.1 (11.7) (10.6)
Losses arising in previous periods that were recognised during the year – 3.5 3.5
Gains/(losses) not recognised in the year to 30 September 2004
Arising before 1 October 2003 1.1 (8.2) (7.1)
Arising during the year to 30 September 2004 (0.8) 4.1 3.3
Unrecognised gains/(losses) on hedges at 30 September 2004 0.3 (4.1) (3.8)
Of which:
Losses expected to be recognised in the year to 30 September 2005 – (1.5) (1.5)
Gains/(losses) expected to be recognised in the year to 
30 September 2006 or later 0.3 (2.6) (2.3)
19 Provisions for liabilities and charges
Group
Provision for
Provision for fair value of
retirement financial
liabilities instruments Total
Cost at 1 October 2003 6.0 6.8 12.8
Credited to profit and loss account (0.2) (2.2) (2.4)
At 30 September 2004 5.8 4.6 10.4
The provision for retirement liabilities reflects an estimate for the amount required to meet a shortfall in
retirement liabilities within Bromley at the date of acquisition and is being amortised over the expected
remaining service lives of relevant employees.
The provision for fair value of financial instruments reflects the mark to market adjustment calculated on
the financial instruments of Bromley at the date of acquisition and is being amortised over the maturity
periods of those financial instruments.
Deferred taxation
Amount provided Amount unprovided
2004 2003 2004 2003
£m £m £m £m
Group
Tax effect of timing differences due to:
Accelerated capital allowances 0.1 0.2 – –
Net short-term timing differences (4.3) (6.3) – –
Held over gains in stock arising from transfers from fixed assets 2.8 3.3 – –
Revalued investment properties – – 15.9 16.5
Transferred to debtors 1.4 2.8 – –
Balance at 30 September 2004 – – 15.9 16.5
19 Provisions for liabilities and charges continued
£m
Group
The movements on the provisions for deferred taxation are as follows:
1 October 2003 (included within debtors) (2.8)
Amount charged to profit and loss account 1.4
Transferred to debtors 1.4
Balance at 30 September 2004 –
The company has no liability, potential or otherwise, to deferred taxation.
The group does not provide deferred tax on revalued investment properties, in line with FRS19 
‘Deferred taxation’, as there is no binding agreement to sell the revalued investment properties as at 
the balance sheet date. In addition to the above, the total contingent tax to the group on the difference
between original cost and carrying value of trading properties not provided at 30 September 2004 is
£83.3m (2003: £91.8m).
20 Called up equity share capital
2004 2003
£m £m
Company and group
Authorised:
32,000,000 (2003: 32,000,000) ordinary shares of 25p each 8.0 8.0
Allotted, called-up and fully paid:
24,811,004 (2003: 24,762,697) ordinary shares of 25p each 6.2 6.2
Nominal value Consideration
Number £’000 £’000
Shares issued during the year:
Executive share option scheme at £2.31 40,000 10 92
SAYE scheme at £3.08 4,382 1 13
SAYE scheme at £6.90 3,925 1 27
48,307 12 132
Potential issues of ordinary shares
Certain senior executives hold options to subscribe for shares in the company under executive share
option schemes at prices ranging from 267.1p to 1,632.0p. In addition, the company operates a SAYE
share option scheme for employees. Under this scheme, employees hold options to subscribe for shares
in the company at prices ranging from 466.0p to 1,359.0p. Under these various schemes, options on
48,307 shares were exercised in the year and options on 711 shares lapsed. The number of shares
subject to options, the periods in which they were granted and the periods in which they may be
exercised are given right: 
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
43
20 Called up equity share capital continued
Exercise price Exercise 2004 2003
Year of grant (pence) period Number Number
Executive share options
1994 231.2 1997-04 – 40,000
1996 292.0 – 342.5 1999-06 19,032 19,032
1997 267.1 2000-07 27,856 27,856
2003 959.0 2006-13 169,506 169,506
2004 1,632.0 2007-14 125,099 –
341,493 256,394
SAYE share options
1999 308.0 2002-05 – 4,382
2000 466.0 2003-06 1,153 1,153
2001 690.0 2004-07 5,379 9,388
2002 818.0 2005-08 22,079 22,706
2003 932.3 2006-09 19,302 19,302
2004 1,359.0 2007-10 21,595 –
69,508 56,931
Total share options 411,001 313,325
21 Reserves
Capital
Share premium Revaluation redemption Profit and
account reserve reserve loss account
£m £m £m £m
Group
At 1 October 2003 as previously reported 21.4 14.7 0.2 106.4
Prior year adjustment – UITF 38 – – – (2.2)
At 1 October 2003 as restated 21.4 14.7 0.2 104.2
Issue of shares 0.1 – – –
Investment properties:
Surplus on revaluation – 4.3 – –
Realisation on disposals – (5.1) – 5.1
Tax on realisation of revaluation surpluses – – – (0.4)
Movement in own shares – – – (0.1)
Retained profit for the year – – – 27.3
At 30 September 2004 21.5 13.9 0.2 136.1
The group has adopted Urgent Issues Task Force Abstract 38: ‘Accounting for ESOP Trusts’ for the 2004
financial statements. As a result of the implementation of the requirements of the Abstract, shares in the
company held by an employee share scheme trustee company which were previously reported as
investments are now recorded as a deduction from equity shareholders’ funds.
21 Reserves continued
Capital
Share premium redemption Profit and
account reserve loss account
£m £m £m
Company
At 1 October 2003 21.4 0.2 135.7
Issue of shares 0.1 – –
Tax credit taken to reserves – – 2.0
Retained profit for the year – – 1.6
At 30 September 2004 21.5 0.2 139.3
The group financial statements do not include a separate profit and loss account for the company as
permitted under section 230 of the Companies Act 1985. The amount of group profit after taxation dealt
with in the financial statements of the parent company is £7.3m (2003: £54.0m). Included within the
company’s profit and loss account balance of £139.3m is a total of £60.5m which is non-distributable 
as the profit arose on a transfer of assets between group companies (2003: £60.5m). 
The Grainger Trust Employee Trustee Company Limited holds 238,542 (2003: 263,639) shares with a cost
of £2.3m (2003: £2.2m) and an open market value at 30 September 2004 of £4.4m (2003: £3.6m). These
shares were acquired at various dates in the open market. The trustee company used funds provided by
the group to meet the group’s obligations under its long-term incentive scheme. These shares are retained
until awarded to employees by the trustee company in accordance with the wishes of the company.
22 Reconciliation of movements in equity shareholders’ funds 
2003
2004 (restated)
£m £m
Profit for the financial year 33.0 29.3
Dividends (5.7) (4.0)
27.3 25.3
Other recognised gains and losses for the year 3.9 2.4
Movement in own shares (0.1) (0.3)
New share capital issued 0.1 0.1
Net additions to equity shareholders’ funds 31.2 27.5
Opening equity shareholders’ funds 146.7 119.2
Closing equity shareholders’ funds 177.9 146.7 Grainger Trust plc
Annual report and accounts 2004
44
23 Reconciliation of net cash flow to movement in net debt
2004 2003
£m £m
(Decrease)/increase in cash (27.9) 71.2
Cash outflow/(inflow) from decrease/(increase) in debt 17.6 (33.8)
Change in net debt resulting from cash flows (10.3) 37.4
Other non-cash items:
Loans acquired with subsidiary – (493.7)
Others (6.1) –
Movement in net debt for the year (16.4) (456.3)
Net debt at 1 October 2003 (679.5) (223.2)
Net debt at 30 September 2004 (695.9) (679.5)
24 Analysis of net debt
At 1 Oct Other non At 30 Sept
2003 Cash flow cash changes 2004
£m £m £m £m
Cash at bank and in hand 81.7 (27.9) – 53.8
Debt due within one year (76.4) 743.7 (699.1) (31.8)
Debt due after one year (684.8) (726.1) 693.0 (717.9)
Total (679.5) (10.3) (6.1) (695.9)
25 Minority interest – equity
2004 2003
£m £m
Minority interest brought forward 0.1 –
Minority share of profit for the year – 0.1
Eliminated upon acquisition of minority interest (0.1) –
Minority interest carried forward – 0.1
26 Acquisitions
The following acquisitions were made during the year:
Satisfied by
Percentage Date of cash
Company purchased acquisition £m
The Farm House Enterprise Limited 48% 6 May 2004 0.3
City Property Developments Limited 100% 10 June 2004 2.0
2.3
These purchases have been accounted for using the acquisition method of accounting.
26 Acquisitions continued
The purchase of the remaining 48% interest in The Farm House Enterprise Limited was to acquire the
minority interest existing in that company, resulting in the group now owning 100% of the equity share
capital thereof.
The aggregate assets and liabilities acquired, and their provisional fair values, were:
Fair value Provisional 
Book value adjustments fair value
£m £m £m
Current assets
Trading stock 0.5 1.2 1.7
Cash at bank 0.2 – 0.2
Minority interest 0.1 – 0.1
Net assets acquired 0.8 1.2 2.0
Goodwill 0.3
Total consideration 2.3
The fair value of the trading properties at the dates of acquisition were prepared internally on a market
value basis.
The post acquisition cash flows and results of the above companies are not considered material 
by the directors and therefore have not been disclosed separately in the profit and loss account or 
cash flow statement.
27 Prior year acquisition
The company purchased the remaining 50% interest in the ordinary share capital of Bromley Property
Holdings Limited (‘Bromley’) on 26 September 2003. Prior to that, Bromley was treated as a joint venture
in the group’s financial statements. 
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
45
27 Prior year acquisition continued
The acquisition of Bromley was accounted for in accordance with FRS2 which, in the circumstances of 
a joint venture becoming a subsidiary, is inconsistent with the requirements of paragraph 9 to schedule 4
of the Companies Act 1985. For the purpose of establishing goodwill on the purchase of the first 50%
investment in Bromley the fair value of the identifiable assets and liabilities have been taken from the
financial statements of Bromley following that company’s acquisition of BPT Plc. This reflects the
commercial reality of the fair value of the assets and liabilities acquired by Grainger Trust plc at the time of
this investment. Full details are included in the financial statements for the year ended 30 September 2003.
Details of the aggregate assets and liabilities relating to the 50% interest acquired, on 26 September 2003
and the provisional and final fair value adjustments made for the purpose of calculating negative goodwill
of the Bromley acquisition were:
Provisional Final
Book fair value Provisional fair value Final
value adjustments fair values adjustments fair values
£m £m £m £m £m
Fixed assets
Intangible assets (40.1) 40.1 – – –
Tangible assets 42.4 – 42.4 – 42.4
Current assets
Trading properties 214.0 72.5 286.5 (1.7) 284.8
Debtors 3.6 1.2 4.8 – 4.8
Cash at bank and in hand 37.5 – 37.5 – 37.5
Total assets 257.4 113.8 371.2 (1.7) 369.5
Liabilities
Creditors: amounts falling due within one year (46.4) – (46.4) – (46.4)
Creditors: amounts falling due after more 
than one year (227.1) – (227.1) (2.8) (229.9)
Provisions for liabilities and charges (2.3) (4.1) (6.4) – (6.4)
Net (liabilities)/assets acquired (18.4) 109.7 91.3 (4.5) 86.8
Consideration 34.9 – 34.9
Negative goodwill on acquisition (56.4) 4.5 (51.9)
50% share of Bromley’s negative goodwill (40.1) – (40.1)
Unamortised goodwill on initial acquisition 
of joint venture 0.3 – 0.3
Total negative goodwill (96.2) 4.5 (91.7)
The adjustments to provisional fair values relate to the finalisation of property valuations and assessment
of the carrying value of borrowings.
28 Pension schemes
Grainger Trust plc operates defined contribution pension schemes for its employees. The assets of the
schemes are held separately from those of the group in independently administered funds. Pension
arrangements for executive directors are disclosed in the remuneration committee report. The pension
cost charge in these financial statements represents contributions payable by the group (see note 6).
28 Pension schemes continued
BPT Limited, a wholly owned subsidiary of Bromley, currently contributes to two pension schemes. The
first is a defined contribution scheme, implemented in 2003 and open to all employees. The contributions
are charged to the profit and loss account during the year. The second is a defined benefit scheme, 
which was closed to new members and employee contributions during 2003. The group will continue to
contribute so as to spread the cost over the expected remaining service lives of the relevant employees.
Defined benefit scheme
The assets of the defined benefit scheme are held separately from those of the group in funds
administered by trustees and are invested with an independent investment manager. Costs and funding
are assessed with the advice of an independent qualified actuary using the projected unit method.
Actuarial valuations are carried out every three years. The defined benefit scheme is due to be valued as
at 1 July 2004 and the actuary’s comments are currently awaited. Therefore the results of the 1 July 2001
valuation have been included below. Based on actuarial assumptions of an investment return of 7.5% 
per annum and salary increases of 6% per annum, the assets were valued at £9.0m. At the time, these
were held in a relevant insurance contract but subsequently the assets have been transferred to an AXA
Sun Life managed fund. These assets represented 85% of the value of the scheme’s accrued liabilities.
The deficiency is being met over the expected working lifetimes of the members. The pension cost for 
the year ended 30 September 2004 was £0.4m (2003: £0.4m).
The actuary also undertook a Minimum Funding Requirement valuation as at 1 July 2001 in accordance
with the Pensions Act 1995. The value of the assets of the scheme was determined at 95% of the
liabilities of the scheme.
FRS17 transitional disclosures
The FRS17 calculations for disclosure purposes have been based on a valuation at 1 August 2003
adjusted to 30 September 2004 by a qualified independent actuary. The major assumptions used by 
the actuary were:
30 September 2004 30 September 2003
Discount rate 5.50% pa 5.30% pa
Rate of increase in salaries 4.00% pa 3.70% pa
Rate of increases in pensions in payment 5.00% pa 5.00% pa
Inflation assumption 3.00% pa 2.70% pa
The assets were transferred to a managed fund with AXA Sun Life on 12 August 2004. Prior to this the
assets were held with AXA Sun Life in a with-profits fund. This policy was surrendered during the year.
The breakdown of the assets and the associated expected rate of return is given in the table below: 
30 September 2004 30 September 2003
Expected Expected
Value rate of Value rate of
(£m) return (pa) (£m) return (pa)
AXA Sun Life with-profits fund – – 10.5 6.3%
Equities 4.0 7.3% – –
Bonds 6.2 5.2% – –
Other 0.5 5.0% – –
Total value of assets 10.7 10.5 Grainger Trust plc
Annual report and accounts 2004
46
28 Pension schemes continued
The following approximate amounts were measured in accordance with the requirements of FRS17:
30 September 30 September
2004 2003
£m £m
Total market value of assets 10.7 10.5
Present value of scheme liabilities (15.3) (14.2)
Deficit in the scheme (4.6) (3.7)
Related deferred tax assets 1.4 1.1
Net pension liability (3.2) (2.6)
If the above amounts had been recognised in the financial statements, the net assets and profit and loss
reserve would be as follows:
30 September 30 September
2004 2003
£m £m
Net assets excluding SSAP24 pension liability 179.9 148.9
FRS17 pension liability (1.6) (1.3)
Net assets including FRS17 pension liability 178.3 147.6
Profit and loss reserve excluding SSAP24 pension liability 138.1 109.3
FRS17 pension reserve (1.6) (1.3)
Profit and loss reserve 136.5 108.0
If the net pension liability had been recognised as part of the net assets of Bromley, the adjustment 
to the pension liability would have been included in the net assets acquired as at 26 September 2003.
The adjustment to pensions balances to reflect the adoption of FRS17 would therefore have been to
goodwill and the profit and loss reserve as indicated above.
The following amounts would have been recognised in the group’s performance statements in the year 
to 30 September 2004 and in the joint venture’s for the year ended 30 September 2003, under the
requirements of FRS17:
Year ended Year ended
30 September 30 September
2004 2003
£m £m
Operating profit
Current service cost – 0.3
Past service cost – –
Total operating charge – 0.3
Other finance expense
Interest on pension scheme liabilities (0.8) (0.7)
Expected return on pension scheme assets 0.7 0.6
Net finance expense (0.1) (0.1)
Statement of total recognised gains and losses (STRGL)
Actual return less expected return on pension scheme assets (0.9) (0.3)
Experience gains and losses arising on the scheme liabilities (0.5) 0.1
Changes in assumptions underlying the present value of scheme liabilities – (1.1)
Actuarial loss recognised in STRGL (1.4) (1.3)
28 Pension schemes continued
Movements in deficit for the year to 30 September 2004 
Year ended Year ended
30 September 30 September
2004 2003
£m £m
Deficit in scheme at beginning of the year (3.7) (3.1)
Current service cost – (0.3)
Past service gain – –
Contributions 0.6 1.1
Other finance expense (0.1) (0.1)
Actuarial loss (1.4) (1.3)
Deficit in scheme at end of year (4.6) (3.7)
Details of experience gains and losses for the year to 30 September 2004
Year ended Year ended
30 September 30 September
2004 2003
£m £m
1. Difference between the expected and actual return on scheme assets
Amount (0.9) (0.3)
Percentage of scheme assets (8.4%) (2.9%)
2. Experience gains and losses on scheme liabilities
Amount (0.5) 0.1
Percentage of the present value of the scheme liabilities (3.3%) 0.1%
3. Total amount recognised in statement of total recognised gains and losses
Amount (1.4) (1.3)
Percentage of the present value of the scheme liabilities (9.2%) (9.2%)
29 Contingent liabilities
The company, in conjunction with certain other group companies, has guaranteed bank loans and 
other loans of subsidiary companies amounting at 30 September 2004 to £680.0m (2003: £243.8m).
30 Related party transactions
In accordance with the provisions of FRS8 ‘Related Party Disclosures’, details of transactions with
subsidiary undertakings are not disclosed. There are no other related party transactions in addition 
to those already disclosed in the financial statements.
Financial Statements 2004 continued Annual report and accounts 2004
Grainger Trust plc
47
Notice of the Annual General Meeting
For the year ended 30 September 2004.
Notice is hereby given that the ninety-second annual general meeting of the company will be held at
Citygate, St James’ Boulevard, Newcastle upon Tyne NE1 4JE on 24 February 2005 at 12.15 pm for 
the following purposes:
As routine business, to consider and, if thought fit, pass the following resolutions as ordinary resolutions 
of the company:
1. That the directors’ report and the audited financial statements for the year ended 30 September 2004
be approved and adopted.
2. That the remuneration committee report for the year ended 30 September 2004 be approved.
3. That a dividend of 19.20p per share be paid on 4 March 2005 to all holders of ordinary shares on the
register of members of the company at the close of business on 11 February 2005, in respect of all
ordinary shares then registered in their names.
4. That Robert Dickinson be re-elected as a director.
5. That Stephen Dickinson be re-elected as a director.
6. That Robert Hiscox be re-elected as a director.
7. That Andrew Cunningham be re-elected as a director.
8. That Robin Broadhurst (having been appointed since the last annual general meeting) be re-elected
as a director.
9. That PricewaterhouseCoopers LLP be re-appointed auditors of the company to hold office until the
conclusion of the next general meeting at which accounts are laid before the company and that their
remuneration be fixed by the directors.
By order of the board
Marie Glanville
Company Secretary
21 December 2004
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Notes 
(1) A member entitled to attend and vote at the annual general meeting (‘AGM’) may appoint one or more proxies
(who need not be a member of the company) to attend and, on a poll, to vote on his or her behalf. A form of
proxy is enclosed for use by members and in order to be valid this form must be returned by post, by courier
or by hand together with, if applicable, the power of attorney or other authority under which it is signed, to the
company’s registrars, Capita Registrars, Proxy Department, The Registry, 34 Beckenham Road, Beckenham,
Kent, BR3 4TU. In the case of a corporation, the proxy should be executed under its common seal or under
the hand of a duly authorised officer or attorney.
Alternatively CREST members may use the CREST electronic proxy appointment service in accordance with
the procedures set out below.
In each case the proxy appointments must be received by the company not less than 48 hours before the
time for the holding of the meeting.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment
service may do so by utilising the procedures described in the CREST Manual. CREST personal members 
or other CREST sponsored members, and those CREST members who have appointed (a) voting service
provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid,
the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance
with CRESTCo’s specifications and must contain the information required for such instructions, as described
in the CREST Manual. The message, regardless of whether it relates to the appointment of a proxy or to an
amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted
so as to be received by the issuer’s agent (ID RA10) by the latest time for receipt of proxy appointments
specified in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the CREST Applications Host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. 
The company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001. CREST members and, where applicable, their
CREST sponsors or voting service providers should note that CRESTCo does not make available special
procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed 
(a) voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such 
action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting
service providers are referred, in particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
(2) Appointment of a proxy does not preclude a shareholder from attending the AGM and voting in person.
(3) Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, in order to be able to attend and
vote at the AGM or any adjourned meeting, (and also for the purposes of calculating how many votes a person
may cast), a person must have his/her name entered on the register of members of the company by 6.00pm
on 22 February 2005 (or 6.00pm on the date two days before any adjourned meeting). Changes to entries on
the register of members after this time shall be disregarded in determining the rights of any person to attend or
vote at the meeting.
(4) Copies of the directors’ service contracts with the company and the register of interests of the directors and
their families in the share capital of the company are available for inspection at the registered office of the
company during usual business hours (Saturdays, Sundays and public holidays excepted) and will be available
at the place of the AGM from 15 minutes prior to and during the AGM. Grainger Trust plc
Annual report and accounts 2004
48
Five Year Record
For the year ended 30 September 2004.
2000 2001 2002 2003 2004
£m
Turnover** 68.2 124.7 213.8 173.6 217.4
Gross rentals 24.7 23.2 22.0 21.4 41.0
Sales of investment properties 19.9 40.0 7.1 2.1 41.1
Trading profits 19.7 26.5 33.7 38.8 72.6
Profit before taxation** 16.4 21.1 44.9 48.5 54.2
Profit after taxation and minority interests** 11.1 12.9 23.5 29.3 33.0
Dividends paid 2.7 3.0 3.5 4.0 5.7
Pence 
per share
Earnings** 44.3 52.9 96.4 119.8 149.7
Dividends 10.72 12.33 14.18 16.31 23.24
£m
Fixed assets and stocks on a financial 
statement basis 283.7 315.1 372.8 907.2 950.8
Fixed assets and stocks at market value*** 439.3 554.9 680.3 1,305.8 1,454.5
Share capital and reserves 85.9 94.8 119.2 146.7 177.9
£ per share
Net asset value on financial statements basis 3.49 3.84 4.82 5.92 7.17
Net asset value including fixed assets and stocks
at replacement value* 9.79 13.56*** 17.24*** 21.94 27.34
Dividend cover** 4.2x 4.3x 6.7x 7.3x 6.5x
Gearing 74% 60% 52% 125% 103%
Share price at 30 September 575.0p 757.5p 992.5p 1,365.0p 1,835.0p
Figures for 2000 and 2001 are restated, where relevant, to take account of FRS19. 
Figures for 2000 to 2003 are restated, where relevant, to take account of UITF 38. 
Earnings are restated to reflect ESOP shares held by the group. 
In addition:
* Corporation tax has not been provided on valuation surpluses relating to stocks.
** Excluding exceptional items and including share of joint venture.
*** 2001 and 2003 includes share of the market value of joint venture properties and negative 
goodwill write back. Annual report and accounts 2004
Grainger Trust plc
49
Shareholders’ Information
Financial calendar
Annual general meeting 24 February 2005
Payment of 2005 final dividend 4 March 2005
Announcement of 2005 interim results June 2005
Payment of 2005 interim dividend July 2005
Announcement of 2005 final results December 2005
Share price
During the year ended 30 September 2004, the range of 
mid market prices of the company’s ordinary shares was:
Price at 30 September 2004 £18.35
Lowest price during the year £13.38
Highest price during the year £19.55
Daily information on the company’s share price can be obtained on 
our website or by telephoning:
The Financial Times Cityline Service on 09068 432 750.
Capital gains tax
The market value of the company’s shares for capital gains tax purposes 
at 31 March 1982 was 30.4p.
Website
Website address www.graingertrust.co.uk
Shareholders’ enquiries
All administrative enquiries relating to shareholdings (for example, notification 
of change of address, loss of share certificates, dividend payments) should be 
addressed to the company’s registrar at:
Capita IRG plc,
The Registry, 
34 Beckenham Road, Beckenham, Kent
Company secretary and registered office
Marie Glanville
Grainger Trust plc
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE Grainger Trust plc
Annual report and accounts 2004
50
Advisers
Solicitors
Dickinson Dees 
St Ann’s Wharf, 112 Quayside, Newcastle upon Tyne
Denton Wilde Sapte 
5 Chancery Lane, Cliffords Inn, London
Hammonds 
2 Park Lane, Leeds
Financial public relations
Baron Philips Associates 
131 Finsbury Pavement, London
NP Public Relations and Marketing 
8 Mosley Street, Newcastle upon Tyne
Bankers
Clearing bank and facility agent
Barclays Bank PLC
Other bankers
Lloyds TSB Bank plc
The Royal Bank of Scotland plc 
Allied Irish Bank plc
Bradford & Bingley plc
HBOS PLC
National Australia Bank Limited
Nationwide Building Society
Auditors
PricewaterhouseCoopers LLP 
89 Sandyford Road, Newcastle upon Tyne
Stockbrokers
Cazenove & Company Ltd 
20 Moorgate, London
Brewin Dolphin Securities 
Commercial Union House, 39 Pilgrim Street, Newcastle upon Tyne
Registrars and transfer office
Capita IRG plc 
The Registry, 34 Beckenham Road, Beckenham, Kent Annual report and accounts 2004
Grainger Trust plc
51
Glossary of Terms
Property 
Assured periodic tenancy (‘APT’) Market rented tenancy arising from succession from
regulated. Tenant has security of tenure. 
Assured shorthold tenancy (‘AST’) Market rented tenancy where landlord may obtain
possession if appropriate notice served.
Assured tenancy (‘AT’) Market rented tenancy where tenant has right to renew.
Investment value (‘IV’) Open market value of a property subject to relevant 
tenancies in place.
Life tenancy Rent free tenancy where tenant has right of 
occupation until possession is forfeited (usually on
death). If tenant retains an equity interest in the 
property this is a partial life tenancy. 
Regulated tenancy Tenancy regulated under 1977 Rent Act, rent 
(usually sub-market) set by rent officer and tenant 
has security of tenure.
Tenanted residential (‘TR’) Activity covering the acquisition, renting out and
subsequent sale (usually on vacancy) of residential 
units subject to a tenancy agreement.
Vacant possession value (‘VP’) Open market value of a property free from any
tenancies.
Financial 
Cap Financial instrument which, in return for a fee,
guarantees an upper limit for the interest rate on a loan.
Contingent tax The amount of tax that would be payable should assets
be sold at the market value shown in the accounts.
Dividend cover Earnings per share divided by dividends per share.
Earnings per share (‘EPS’) Profit attributable to shareholders divided by the
weighted average number of shares in issue in the year.
FRS13 Accounting standard requiring the disclosure of the
market value of long-term debt and financial
instruments.
FRS19 Accounting standard prohibiting the provision of
deferred tax on stock revaluation surpluses when
companies are acquired. 
Gearing The ratio of borrowings net of cash to net asset value.
Financial continued
Hedging The use of financial instruments to protect against 
interest rate movements.
Interest cover Profit on ordinary activities before interest and tax 
divided by net interest payable. 
Negative goodwill On acquisition of a company, the surplus of the value 
of the statutory net assets acquired over the purchase
price paid.
Net asset value (‘NAV’) Shareholders’ funds adjusted for the market value of
property assets held as stock.
Net net asset value (triple net or ‘NNNAV’) NAV adjusted for contingent tax liabilities which would
accrue if assets sold at market value and for the 
market value of long-term debt and derivatives. 
Swap Financial instrument to protect against interest rate 
movements.
Total shareholder return (‘TSR’) Return attributable to shareholders on basis of share
price growth with dividends reinvested.
Weighted average cost of capital (‘WACC’) The weighted average cost of funding the group’s
activities through a combination of shareholders’ funds
and debt.
Corporate 
BPT plc Formerly Bradford Property Trust plc. Major residential
investor acquired by Bromley in May 2001.
Bromley joint venture (‘Bromley JV’) The joint venture between Grainger and Deutsche Bank
which acquired BPT plc.
Bromley Property Holdings Limited (‘Bromley’) Holding company of the vehicle used to acquire 
BPT plc.
Deutsche Bank (‘DB’) Joint venture partners in acquisition of BPT plc. Altrincham office
St John’s House
Barrington Road
Altrincham 
Cheshire
WA14 1TJ
Epsom office
Kings Lodge
28 Church Street
Epsom 
Surrey
KT17 4QB
Harborne office
The Circle
Harborne
Birmingham
B17 9DY
London office
161 Brompton Road
Knightsbridge
London
SW3 1QP
Martlesham office
42a Barrack Square
Martlesham Heath
Ipswich 
Suffolk
IP5 3RF
Newcastle office
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Grainger Trust plc
Annual report and accounts 2004
52
Corporate Addresses Printed on Zanders Mega Matt – a paper that is 
manufactured using 50% recycled de-inked fibre 
and 50% TCF (totally chlorine free) pulp, and is 
sourced from sustainable forests. The paper is 
also biodegradable and harmless to the environment.
Designed & produced by Carnegie Orr
T 020 7610 6140
www.carnegieorr.com Grainger Trust plc
Newcastle office:
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
London office:
161 Brompton Road
London
SW3 1QP
email:
info@graingertrust.co.uk
Company registration 
number: 
125575