Annual Report & Accounts
BuILdInG
growth
TELFORd HOMES  Plc
2011
Annual Report & Accounts 2011
Telford Homes Plc
First Floor
Stuart House
Queensgate
Britannia Road
Waltham Cross
Hertfordshire EN8 7TF
TEF2681 - AR11 cover AW02.indd   1 09/06/2011   16:41 Aerial view of the City of London showing  
a Computer Generated Image of Avant-garde 
in the foreground.
BuILdInG
focused 
TEF2681 - AR11 cover AW02.indd   2 09/06/2011   16:41 CONTENTS
Business Profile 02 - 07
Year in Review 08 - 31
Highlights 08
Chairman’s statement 09
Chief Executive’s review 10
Financial review 18
Structure 24
Training and apprenticeships 25
Health and Safety 26
Environment and sustainability 28
Key risks and uncertainties 30
Corporate Governance 32 - 43
Board of directors 32
Policy on corporate governance 34
Directors’ remuneration report 36
Report of the directors 38
Statement of directors’ responsibilities 41
Auditors’ report 42
Financial Statements 44 - 71
Group income statement 44
Balance sheet 45
Statement of changes in equity 46
Cash flow statement 47
Statement of accounting policies 48
Notes to the financial statements 52
Company Information 72
The Group has finance in  
place to add to the development 
pipeline and the market in  
East London remains robust  
and the subject of significant  
and ongoing undersupply
Andrew Wiseman 
Chief Executive
01
TEF2681 - AR11 front AW02.indd   1 13/06/2011   10:48 11 
london 
Boroughs
Telford Homes knows
london and has developed
in 11 different boroughs
BuildiNG
locally
1O YEARS OF dEVElOPiNG 
iN EAST lONdON
Telford Homes operates predominantly 
in East London in a marketplace underpinned 
by the employment areas of Canary Wharf and 
the City. Ongoing regeneration is improving the 
quality of the built environment for the benefit 
of both existing and new residents. 
Business Profile
02
TEF2681 - AR11 front AW02.indd   2 13/06/2011   10:48 WORkiNG WiTH 
lOCAl HOuSiNG 
ASSOCiATiONS:
lanrick Road
Tower Hamlets, E14
Telford Homes has long standing partnerships 
with local housing associations particularly 
Poplar HARCA and Eastend Homes. Poplar 
HARCA was our partner in developing 64 
affordable homes at lanrick Road.
local knowledge
Local knowledge has played a key role 
in the success of the Group over the last 
few years and is a competitive advantage 
particularly in relationships with local 
authorities and affordable housing 
providers and in our understanding 
of the local planning process.
2012 Olympics
The 2012 Olympics in London are 
just over a year away and East 
London can only benefit from the 
anticipation and excitement that 
this major event brings to the area, 
let alone the substantial investment 
already made.
Business Profile
03
TEF2681 - AR11 front AW02.indd   3 13/06/2011   10:48 BuildiNG
quality
AWARd WiNNiNG 
dEVEl OPMENTS
The quality of the design and 
construction of our developments  
has been recognised by many awards.  
In the last two years Telford Homes  
has won Homebuilder of the Year 2009 
(British Home Awards), three NHBC 
seals of excellence and four Evening 
Standard awards.
Customer 
service
Customer recommendation 
rate of 97.1% in 2010 calendar 
year – independent customer 
satisfaction survey
Quality control,  
thorough inspection 
and detailed handover 
procedures have become 
hallmarks of our product 
and service package
Anthony Atkinson,  
Estates & Customer Service director
Business Profile
04
TEF2681 - AR11 front AW02.indd   4 13/06/2011   10:48 Brand
The Telford Homes brand is about 
consistent delivery of high quality, 
desirable new homes backed up by our 
dedicated Customer Service team, 
providing product finish and service 
that’s second to none.
Ongoing service
For the first two years of ownership 
T elford Homes provides a 24/7, 365 
days a year free emergency service, 
ensuring there is always someone to 
help deal with any urgent problems  
that may arise out of hours.
SAuNdERS 
APARTMENTS 
Merchants’ Quarter 
E3
A development of 39 open market homes 
and the final stage of our redevelopment 
of the British Estate in partnership with 
Eastend Homes.
Business Profile
05
TEF2681 - AR11 front AW02.indd   5 13/06/2011   10:48 BuildiNG
shareholder
returns
STRONG BAlANCE SHEET
Telford Homes is profitable, has  
increased the volume of sales due  
to pre-selling developments that  
will complete in future years and has 
secured finance until September 2014.
2.5p
dividend
2011
2p
dividend
2010
Business Profile
06
TEF2681 - AR11 front AW02.indd   6 13/06/2011   10:48 OVERSEAS  
SAl ES: 
Matchmakers Wharf, 
Avant-garde and  
the Hawksmoors 
 
Clockwise from top: Computer Generated 
images of Matchmakers Wharf, E9, the 
Hawksmoors on the St Georges Estate, E1  
and Avant-garde in Shoreditch, E1.
Bank facility
On 31 March 201 1 the Group signed a 
£70 million corporate banking facility 
which extends to 30 September 2014 with 
a club of three banks being The Royal 
Bank of Scotland, HSBC and Santander. 
It is a great credit to T elford Homes that 
these three major banks are prepared to 
support the business to this extent.
Overseas sales
Overseas launches including 
Matchmakers Wharf, the Hawksmoors 
and Avant-garde have been very 
successful. The majority of overseas 
sales are secured with a 20 per cent 
deposit and we will continue to market 
appropriate developments overseas to 
secure revenue that will be recognised 
on legal completions in future years.
58%
Share price on  
31 March 2011 as  
a percentage of net  
asset value per share
Business Profile
07 07
TEF2681 - AR11 front AW02.indd   7 13/06/2011   10:48 * Before all interest charges including those expensed within cost of sales of £2.9 million  
(2010: £5.3 million) and exceptional items.
Number of open 
market sales 
(contracted) 
368
2010: 253
Highlights
Revenue 
£121.1 million
2010: £159.3 million 
Adjusted gross 
profit margin* 
15.1%
2010: 16.5%
Adjusted 
operating margin* 
5.2%
2010: 9.2%
Earnings  
per share 
4.8p
2010: 13.7p 
Profit before tax 
£3.0 million
2010: £7.3 million 
Total debt 
£64.9 million
2010: £70.8 million
dividend  
per share 
2.5p
2010: 2.0p
Best Regeneration 
Project 2010
Special commendation for 
Kinetica – Best Regeneration 
Project 2010, London Evening 
Standard Awards
Gearing 
71.2%
2010: 58.9% 
development pipeline: 1,904 properties
2010: 2,370 properties
Best New Starter Home 2010
Special commendation for Vellum – Best New Starter Home 
2010, London Evening Standard Awards
Number of 
open market 
completions 
281
2010: 389
Year in Review
08
TEl FORd HOMES Plc Annual Report & Accounts 
for the year ending 31 March 2011
TEF2681 - AR11 front AW02.indd   8 13/06/2011   10:48 Chairman’s 
statement
David Holland
Our success in marketing 
developments in the Far East 
has continued with the launch 
of Avant-garde in April and 
May 2011
In the year to 31 March 2011 Telford Homes 
exchanged contracts for the sale of 368 open 
market properties, an increase of 45 per cent 
over last year. This performance has been 
driven by successful marketing campaigns  
in the Far East, selling properties before 
construction has commenced, together with 
a steady rate of demand from UK buyers.
During the recession the Group reduced  
its investment in new land opportunities 
and switched some of its developments  
to wholly affordable housing. As expected 
this has reduced both the output of finished 
open market homes and profit margins. 
Despite this the Group met market 
forecasts for the year to 31 March 2011 
achieving profit before tax and after 
exceptional items of £3.0 million.
Our success in marketing developments in 
the Far East has continued with the launch 
of Avant-garde in April and May 2011. 
Together with a strong performance at 
the UK launch we have achieved over 170 
sales out of the 257 open market homes on 
the development. These sales secure the 
recognition of profit for Telford Homes and 
our new joint venture partner, The William 
Pears Group, when the homes are handed 
over in 2013 and 2014.
Reduced output and margins will continue 
to keep profits at a lower level in the new 
financial year but these effects will have 
substantially been worked through the 
business by March 2012. Beyond this date 
the Board expects significant growth in the 
number of finished homes from the existing 
development pipeline and has secured 
pre-sales on some of those developments 
at normal margins. The signing of our new 
bank facility in March this year will improve 
our ability to add to the development 
pipeline for future years in a climate where 
many smaller developers are struggling to 
access finance.
As a result the Board is maintaining a 
progressive dividend policy in proposing a 
final dividend of 1.25 pence making a total 
of 2.5 pence for the year (2010: 2.0 pence).
Finally it gives me great pleasure to welcome 
Jon Di-Stefano as our new Chief Executive 
with effect from 1 July 2011. Jon replaces 
Andrew Wiseman and I am confident that 
Telford Homes will continue to prosper under 
his leadership. After ten years in our current 
roles Andrew will take over from me on his full 
time return to Telford Homes in January 2012, 
assuming the position of Executive Chairman, 
thus retaining his skills and knowledge within 
the business. I have been delighted to serve 
as Chairman over a successful decade and I 
look forward to continuing as a Non-Executive 
Director in the future.
david Holland 
Chairman (Non-Executive)
31 May 2011
BuildiNG
progress
Year in Review
www.telfordhomes.plc.uk 09
TEF2681 - AR11 front AW02.indd   9 13/06/2011   10:48 The Board is pleased to report that profit before tax for 
the year to 31 March 2011 is in line with expectations at 
£3.0 million after exceptional items (2010: £7.3 million). 
Although the number of open market properties 
completed in the year is lower at 281 (2010: 389) the  
Group has experienced strong demand for early sales 
of its future developments, particularly from purchasers 
in the Far East, such that the number of sales secured 
by contracts exchanged in the year has increased to 
368 (2010: 253). As a result of this and continued sales 
of affordable housing to our housing association partners, 
the Group has revenue secured by contracts exchanged 
of over £135 million to flow into the business over the  
next three years.
Sales and completions
Telford Homes is in the middle of a two year period 
during which the number of open market homes being 
finished is lower than capacity. The Group refrained from 
investing in new land during the recession and, given the 
average construction period for a development is two 
years, this is affecting the number of homes available  
for sale and legal completion up to the middle of 2012. 
Therefore the decline in the number of open market 
completions in the year to 31 March 2011 is caused more 
by the reduced supply of finished homes than by market 
demand or the ability to make sales. Overall sales 
performance has been better than expected due to the 
successful off-plan marketing of developments that are 
due to be finished between mid-2012 and mid-2014.
Profit margins in the year to 31 March 2011 have been 
affected by changes made during the recession to 
favour affordable housing and by impaired open market 
developments that were acquired by the Group in 2006 
and 2007. As expected this combination of reduced 
supply of finished open market homes and lower profit 
margins has brought total profits in the business down. 
The impact of both will continue into the year to 
31 March 2012 such that the Board expects profit 
before exceptional items to be similar year-on-year. 
Almost all of the developments that switched to 
affordable housing and those impaired by prices falling 
during the recession will have worked through the 
development pipeline by the end of the new financial year.
The rate of sales of finished homes to UK buyers  
has remained steady and visitor levels to the Group’s 
sales centres have been consistent during the year. 
Construction of the third and final phase of Queen 
Mary’s Gate in Woodford finished towards the end  
of 2010 and we now have fewer than 60 homes left  
to sell out of nearly 500 across the development. In 
September 2010 the Group acquired The Royal Bank  
of Scotland’s 50 per cent interest in Telford Homes 
(Creekside) Limited, the joint venture set up to develop 
Greenwich Creekside. This development is undergoing  
a period of phased handovers and over half of the  
121 open market homes in the first phase have now 
been handed over to their purchasers.
The availability of mortgage finance for new build 
properties remains the most significant restriction  
on demand in the UK and this is particularly true for first  
time buyers. Bank of England statistics show mortgage 
approvals have been continuing at a steady rate, albeit at 
just 40 per cent of the long term average. Whilst there 
have been some signs of improvement in the number 
of mortgages available, the Council of Mortgage 
Lenders expects gross lending for housing to be 
unchanged in 2011.
Chief Executive’s 
review
Andrew Wiseman BA (Hons) FCMA
The Group has revenue secured by 
contracts exchanged of over £135 
million to flow into the business 
over the next three years
45% 
increase in open  
market sales
(contracts exchanged)
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 10
TEF2681 - AR11 front AW02.indd   10 13/06/2011   10:48 AVANT-GARdE 
Shoreditch 
E1
Computer Generated images of Avant-garde,  
a development of 257 open market homes, 
103 affordable homes and commercial space 
near Bishopsgate.
Year in Review
11
TEF2681 - AR11 front AW02.indd   11 13/06/2011   10:48 Chief Executive's review continued
Alongside a steady UK market, overseas launches 
including Matchmakers Wharf, E9, the Hawksmoors, E1 
and, in April and May 2011, Avant-garde in Shoreditch 
have been very successful. Avant-garde is located just  
a few minutes from Liverpool Street station and over 
120 off-plan sales have been secured with buyers in 
the Far East, an unprecedented performance for this 
type of development. There has been equally strong 
off-plan demand in the recovering London market 
such that in total over 170 of the 257 open market 
homes have been sold in just two months of initial 
marketing. Construction is underway and handovers  
will take place from late 2013 onwards.
The majority of overseas sales are secured with a 20 
per cent deposit either all paid at contract exchange  
or paid in stages not later than one year before 
completion. This provides the Group with equity to be 
used for further site acquisitions and the repayment of 
debt. The Group will continue to market appropriate 
developments overseas to secure revenue that will  
be recognised on legal completions in future years.
Partnerships and affordable housing
Telford Homes remains a grant partner of the  
Homes and Communities Agency (“HCA”) and has now 
completed the first four developments under its 2008 
to 2011 grant agreement. The Group has received £55.1 
million out of a total grant allocation of £72.9 million and 
the vast majority of the remainder will be received 
by March 2012 as affordable homes are completed in 
accordance with their construction programmes.
The Group has a secured revenue stream contracted for 
the affordable housing on all of its current developments 
and is now developing a greater proportion of open 
market housing such that it is not reliant on future, 
uncertain, grant funding. New opportunities are 
appraised on a conditional basis until the value and 
amount of affordable housing required is clear.
The Spending Review has had a significant impact on 
the new four year affordable housing grant programme 
for 2011 to 2015. Central funding for new projects is 
expected to be around 25 per cent of the total grant 
allocation for 2008 to 2011 and housing associations 
have been invited to close the funding gap by charging 
higher rents to new tenants under the new ‘affordable 
rent’ model. This will only partially substitute for the 
reduction in government funding and therefore less 
affordable housing will be built. 
There remains a housing shortage in London and 
Telford Homes will continue to work with both the HCA 
and the local authorities to address the need for new 
housing developments to be brought forward and to 
provide affordable housing whilst ensuring that each 
new development remains financially viable.
l and acquisition
The developments in the Group’s ownership during 
2008 and 2009 were in good locations and were flexible 
in terms of housing mix such that write downs were 
less than three per cent of total assets and profitable 
development could proceed with increased levels of 
affordable housing. However the impact of not investing 
in new sites during the recession, albeit a necessity at 
the time, is now being felt in terms of reduced output.
In February 2010 Telford Homes raised £7.2 million  
of equity through a placing of new shares to bolster  
the Group’s ability to purchase land. In addition to this 
the Board was delighted to sign a three and a half year 
£70 million banking facility with The Royal Bank of 
Scotland, HSBC and Santander on 31 March 2011.  
The process to secure this finance involved a year of 
extensive investigation of every aspect of the business 
and its financial position. It is great credit to Telford 
Homes that at the end of this process these three major 
banks are prepared to support the Group to this extent.
£55.1 million 
of grant funding  
received to date
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 12
TEF2681 - AR11 front AW02.indd   12 13/06/2011   10:49 GREENWiCH  
CREEkSidE 
Greenwich  
SE8
A development of 242 open market homes,  
129 affordable homes and commercial space 
close to the centre of Greenwich.
Year in Review
13
TEF2681 - AR11 front AW02.indd   13 13/06/2011   10:49 The new banking facility provides significant headroom 
for future investment but even without this finance 
the Group has been acquiring land. The successful 
partnership with Eastend Homes to develop new homes 
across several estates in Tower Hamlets continues and 
during the last twelve months the Group has exercised 
options to purchase eight sites to provide 141 new open 
market homes. The Group’s partnership with Poplar 
HARCA also resumed in the year with contracts in place 
for the development of four sites.
The Group’s development pipeline is the total number 
of properties not yet legally completed that are to be 
constructed on land in its ownership or held under 
option contracts. A significant number of affordable 
homes, 400, have been completed during the year 
with revenue and profit having been recognised over 
the entire construction period. The total number of 
properties in the pipeline was 1,904 at 31 March 2011 
(2010: 2,370) with finance in place to significantly add to 
this over the next few years. On 27 May 2011 the Group 
exchanged contracts with Eastend Homes to develop 
209 new homes on the Holland Estate on Commercial 
Street, E1, increasing the number of properties in the 
development pipeline to over 2,100.
All of the Group’s developments have planning permission 
and the Group is careful to limit its exposure to planning 
risk, especially given uncertainty over future planning 
policy and the impact of ‘localism’. The New Homes Bonus 
introduced by the coalition government is valuable to local 
authorities and it is hoped that this will encourage a more 
pragmatic approach to planning policy where appropriate. 
Telford Homes is working with several landowners to 
secure planning for developments that are not yet 
under the Group’s control. 
Operations
Few developers possess the expertise and experience 
of Telford Homes in East London. The quality of the 
Group’s developments both in design and construction 
has been recognised by many awards in the last year 
including two special commendations from the London 
Evening Standard 2010 Homes and Property Awards 
and two National House-Building Council awards.
An independent survey of the Group’s customers 
throughout 2010 resulted in a 97% customer 
recommendation rate, a record high. The reasons 
include the quality of the finished apartments, the lack  
of defects and the high level of customer service 
provided. Once again the Board extends its gratitude 
to each of the Group’s employees, without whom the 
excellent standards maintained across every part of 
the business would not be possible.
Board changes
I am standing down as Chief Executive with effect  
from 30 June 2011 and I look forward to returning as 
Executive Chairman in 2012. At that time I will take on 
special responsibility for land acquisition alongside the 
normal responsibilities of the Chairman. I look forward 
to remaining with Telford Homes for many years to 
come working alongside Jon Di-Stefano as he steps into 
the role of Chief Executive. I would like to thank David 
Holland for his significant contribution to the business  
in his ten years as Non-Executive Chairman and I am 
pleased that he will also remain on the Board as the 
Senior Non-Executive Director. 
I am also delighted to announce the appointment of 
Katie Rogers as our new Financial Director with effect 
from the Annual General Meeting on 14 July 2011. Katie 
has been with Telford Homes for three and a half years 
and is currently the Group’s Financial Controller. She has 
been instrumental in securing the new banking facility 
and is well known to the Group’s bankers.
Chief Executive's review continued
400  
affordable homes 
completed during the year
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 14
TEF2681 - AR11 front AW02.indd   14 13/06/2011   10:49 VEllu M 
Walthamstow  
E17
A development of 66 open market 
homes, in a new mixed tenure 
'Home Zone', near Blackhorse Road 
underground station in Walthamstow.
Year in Review
15
TEF2681 - AR11 front AW02.indd   15 13/06/2011   10:49 Current trading and outlook
A high level of sales has been maintained throughout  
the last year due primarily to overseas pre-sales. Since 
1 April 2011 this trend has continued and, with the 
successful launch of Avant-garde, the Group has already 
sold 200 open market homes in the new financial  
year of which over 130 have been secured by  
exchanging contracts.
Profits are expected to remain at a similarly reduced 
level in the year to 31 March 2012 but the developments 
that switched to affordable housing or were impaired 
during the recession will be finished by the middle of 
2012 and significant growth both in output and margin 
is expected in future years. The number of pre-sales 
being achieved on developments that will be completed 
from 2012 onwards gives the Board confidence in this 
expectation and as such the dividend being paid this 
year has been increased by 25 per cent to 2.5 pence.
The Group has finance in place to add to the development 
pipeline and the market in East London remains robust 
and the subject of significant and ongoing undersupply. 
The 2012 Olympics in London are just over a year away 
and East London can only benefit from the anticipation 
and excitement that this major event brings to the area, 
let alone the substantial investment already made. The 
longer term prospects for Telford Homes remain strong.
Andrew Wiseman 
Chief Executive
31 May 2011
Chief Executive's review continued
200 
open market sales since  
1 April 2011
BuildiNG
for profit
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 16
TEF2681 - AR11 front AW02.indd   16 13/06/2011   10:49 17
kiNETiCA 
dalston 
E8
A development of 41 open market homes,  
25 affordable homes and commercial space 
near to the new dalston Junction station.
Year in Review
www.telfordhomes.plc.uk 17
TEF2681 - AR11 front AW02.indd   17 13/06/2011   10:49 Financial 
review
Jonathan Di-Stefano MA (Econ), ACA
On 31 March 2011 the Group 
signed a £70 million corporate 
banking facility, which extends 
to 30 September 2014, with The 
Royal Bank of Scotland, HSBC 
and Santander
A new £70 million banking facility secured on 
31 March 2011 has ensured that Telford Homes is  
able to continue existing developments and invest in 
new sites to enhance the longer term development 
pipeline. In addition the Group has recently agreed 
terms with HSBC to finance the joint venture that is 
responsible for Avant-garde and as such will have 
finance in place for every one of its developments. 
Operating results
Revenue fell to £121.1 million (2010: £159.3 million)  
with gross profit before exceptional items of £15.4 
million (2010: £21.0 million). Gross profit is stated after 
expensing loan interest that has been capitalised within 
inventories of £2.9 million (2010: £5.3 million) and before 
charging this interest the gross margin in the year was 
15.1 per cent compared to 16.5 per cent last year. 
The reductions in revenue and margin are primarily 
due to lower output of finished homes and a higher 
than normal proportion of affordable housing under 
construction, both of which were as anticipated.
Profit margins will remain lower than usual next year 
but the impact of those sites that were impaired by 
the effects of the recession will have been almost fully 
accounted for in twelve months time and as such the 
Group will be back to more normal margins for the  
year to 31 March 2013.
The operational teams continue to monitor and  
control development costs with a focus on achieving 
cost savings wherever possible, while maintaining 
good relationships with all suppliers. Some savings 
have been made in the light of reduced development 
activity in London although raw material costs can  
be volatile and occasionally the Group holds stock  
of materials such as steel to maximise the benefit 
when prices are lower.
Administrative expenses have remained under  
close control and have fallen to £9.3 million (2010: 
£9.7 million) mainly due to lower employee bonus 
payments. Selling expenses have increased by 42  
per cent to £2.7 million (2010: £1.9 million) in line with 
the increase in the number of contracts exchanged  
in the year. Overseas selling events are a significant 
investment regardless of the level of success but 
where a large number of sales are secured this is 
reducing the marketing expenditure needed in  
the future. Unfortunately the required accounting 
treatment for selling expenses does not enable the 
Group to match revenues with costs in relation to 
overseas events. The costs must be expensed as 
incurred even though profit recognition from any  
sales made is two to three years in the future.
Exceptional items
On 17 September 2010 the Group acquired the other 50 per 
cent of Telford Homes (Creekside) Limited, the joint venture 
set up to develop Greenwich Creekside, from The Royal 
Bank of Scotland. Their interest was acquired for the sum  
of £500 with all existing equity injected by the bank being 
converted to debt. As a result the Group recognised a 
‘bargain gain’ of £511,000 on the acquisition representing 
the value of 50 per cent of the net assets of Telford Homes 
(Creekside) Limited on 17 September 2010 less the £500 
purchase price. This gain is shown as an exceptional item  
in the income statement to 31 March 2011. The exceptional 
items reported in the year to 31 March 2010 of £0.8 
million were primarily write downs to the value of  
land and work in progress.
£70 million 
banking facility signed
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 18
TEF2681 - AR11 front AW02.indd   18 13/06/2011   10:49 CHANdl ERS kEEP 
Fletcher Street 
E1
A development of 17 open market homes  
on the St Georges Estate, the second estate 
regeneration project with Eastend Homes.
Year in Review
19
TEF2681 - AR11 front AW02.indd   19 13/06/2011   10:49 Financial review continued
interest
The total borrowings of the Group reduced from £70.8 
million to £64.9 million at 31 March 2011 and interest paid 
in the year reduced from £3.5 million to £2.7 million. The 
security of funding provided by the new longer term 
banking facility attracts a higher rate of interest at 3.5 
per cent over LIBOR and this will increase the average 
rate of interest paid on borrowings in the new financial 
year. The benefits of the new facility far outweigh this 
increased cost and the rate is competitive in the current 
market compared to other developers.
For the first time the Board has agreed to take  
out some protection against future interest rates. 
Although the Board does not believe significant rate 
rises are likely in the near future the cost of interest 
rate protection is currently quite low for the same 
reason and as such it is worth investing a small 
amount to protect the business and ensure that 
interest cover covenants remain achievable. The Group 
has purchased a cap on LIBOR of three per cent on 
£30 million of debt which expires in September 2014. 
The cost of this cap was £290,000 paid up front and 
this will be expensed over the term of the product.
Interest charged to the income statement includes 
£2.9 million in cost of sales (2010: £5.3 million) and a 
further £1.1 million of finance costs (2010: £1.7 million) 
mainly as a result of suspending the capitalisation of 
interest on certain sites that were not progressing in 
terms of design or construction for parts of the year.
dividend
The Board has decided to propose a final dividend of  
1.25 pence which, together with the 1.25 pence interim 
dividend paid on 14 January 2011, makes a total dividend 
for the year of 2.5 pence (2010: 2.0 pence). This increase  
is in line with the Board’s stated intention of paying a 
year-on-year progressive dividend in line with the business 
building the foundations for future profit growth.
The final dividend is expected to be paid on  
22 July 2011 to those shareholders on the register  
at the close of business on 24 June 2011.
Balance sheet
Net assets at 31 March 2011 were £64.7 million, increased 
from £63.1 million last year. Net assets per share were 
132.1 pence and the share price on 31 March 2011 
represented just 58 per cent of that value per share 
(31 March 2010: 71 per cent). The Group has remained 
profitable, increased its volume of sales due to pre-selling 
developments that will complete in future years and 
secured finance for the next three and a half years  
and hence the Board believes the current share price  
to be significantly undervalued.
Cash balances remain high at 31 March 2011  
at £18.8 million although down from £33.6 million  
last year. This balance includes operational balances  
of £12.7 million and grant monies held for future 
expenditure of £6.1 million. The cash balance was 
inflated on the final day of the year by the first 
drawdown under the new banking facility which 
generated funds over and above the repayment  
of previous facilities of £7.1 million.
Cash balances were expected to reduce over the  
year both through ongoing expenditure of grant 
monies held and also through investment of the 
placing funds received in March 2010. The cash flow 
statement shows that the Group has made a net 
investment in working capital this year as opposed to 
the significant reduction in work in progress last year.
On 30 September 2010 the Group announced that it 
had repaid all of the outstanding loan notes in relation 
to the acquisition of Clifford Contracting which took 
place in June 2009. This acquisition provided a form  
of finance against unsold properties and would have 
been available until 30 September 2011. The rate of 
sales being secured resulted in the Board concluding 
that the funding was no longer required. The early 
redemption of the loan notes saved £300,000 of 
interest and the Group repurchased and cancelled  
the 1,130,089 shares that formed part of the 
transaction for a total sum of £1.
Cash management and cash flow 
forecasting
Control of cash remains important and a detailed 
month-by-month cash flow forecast is maintained as 
part of the Group’s management information systems. 
This enables continuous monitoring of the forecast and 
actual cash flows over a five year period. The forecasts 
are necessarily subject to a number of assumptions and 
judgements and these are tested on a reasonable basis 
by sensitivity analysis. These forecasts are reviewed by 
the Board in detail on a monthly basis.
2.5p 
dividend up 25%
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 20
TEF2681 - AR11 front AW02.indd   20 13/06/2011   10:49 MATCHMAkERS  
WHARF 
Hackney 
E9
Computer Generated image and  
‘under construction’ photograph of 
Matchmakers Wharf, a development  
of 209 homes and commercial space  
near the Olympic Park, due for  
completion from March 2012. 
Year in Review
21
TEF2681 - AR11 front AW02.indd   21 13/06/2011   10:49 Borrowings
Net debt at 31 March 2011 was £46.1 million (2010: 
£37.2 million) with gearing at 71.2 per cent (2010: 58.9 
per cent). The Board has determined that long term 
growth can be achieved at lower levels of gearing than 
those required in previous years and as such expects 
this to remain below 150 per cent consistent with debt 
being provided at 60 per cent of cost.
On 31 March 2011 the Group signed a £70 million 
corporate banking facility, which extends to 
30 September 2014, with a club of three banks 
being The Royal Bank of Scotland, HSBC and 
Santander. The debt is secured against a portfolio  
of land and development sites with only Greenwich 
Creekside, owned by a subsidiary, and Avant-garde, 
in a joint venture with The William Pears Group, 
remaining outside of the facility.
Interest will be charged on the new facility at 3.5 per 
cent over LIBOR with an arrangement fee of 1.25 per 
cent payable in two tranches. Funds will be advanced 
at 60 per cent of cost and site specific funding under 
the overall facility umbrella will be repaid from the first 
65 per cent of the open market residential proceeds 
on each site. The first ten per cent of any deposits 
received can be retained by the Group without any 
loan repayment.
There are a number of site specific loan to value 
covenants along with corporate covenants concerning 
net asset value, gearing and interest cover. The Board 
performed a detailed assessment of these covenants, 
including sensitivity analysis, to ensure that they were 
appropriate when compared to current forecasts 
before signing the new facility.
As part of the acquisition of the remaining 50 per cent 
of Telford Homes (Creekside) Limited the Group secured 
finance from The Royal Bank of Scotland to complete  
its Greenwich Creekside development. The facility 
totals £57.7 million including the equity replacement 
mezzanine debt and is repayable in phases on 
31 December 2011 and 31 December 2012. To date 
£18.3 million of the first phase debt has been repaid.
The William Pears Group (“William Pears”) has recently 
become the new joint venture partner to Telford Homes 
in Bishopsgate Apartments LLP which is developing 
Avant-garde. William Pears purchased a 50 per cent 
interest from Genesis Housing Group at cost. HSBC has a 
long relationship with William Pears and has just started 
a relationship with Telford Homes; as a result the joint 
venture has been able to secure credit approval for a 
land and development facility of £45.9 million. This facility 
will repay the existing Allied Irish Bank loan of £15 million 
and enable the development to proceed. The formal 
paperwork is expected to be signed later in June 2011 
and, with significant pre-sales secured, development  
of the open market tower is already underway.
These facilities combined ensure that the Group has 
sufficient bank finance available for the foreseeable 
future in an environment where this is not the case for 
all of our competitors. The initial drawdown under the 
£70 million facility was £31.9 million leaving headroom 
of £38.1 million and this will be utilised over the next 
three years to invest in new sites and support the 
future growth of Telford Homes.
 
Jonathan di-Stefano 
Financial Director 
31 May 2011
Financial review continued
Total borrowings 
at 31 March by year (£m)
125
100
75
50
25
0
2007 2008 2009 2010 2011
BuildiNG
resources
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 22
TEF2681 - AR11 front AW02.indd   22 13/06/2011   10:49 QuEEN MARY’S  
GATE 
South Woodford  
E18
A development of almost 500 homes that  
has been completed in three phases over  
a five year construction programme.
23
Year in Review
TEF2681 - AR11 front AW02.indd   23 13/06/2011   10:49 Structure
The Group now has over 2,100 properties in the 
development pipeline and these properties need to be 
managed through the planning process, in design and 
ultimately during construction. In order to control this 
process Telford Homes is organised into two operating 
divisions being Alto and Metro. 
This structure is necessary in order to manage the 
delivery of several hundred homes per annum and 
ensures management control to yield excellent design, 
high standards of construction and delivery on programme. 
Each division predominantly specialises in certain sizes 
of development and styles of construction.
Mark Parker and John Fitzgerald jointly take on the 
roles and responsibilities of Group Managing Director. 
Mark Parker is responsible for Metro and John Fitzgerald is 
responsible for Alto and each division has a management 
team responsible for day-to-day operations.
Sales and Marketing, Land Acquisition, Partnerships, 
Customer Service, Finance and Buying are regarded as 
core central services that deliver economies of scale in  
a relatively small geographic region by remaining 
outside of the divisional structure.
development 
pipeline
Over 2,100 properties
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 24
TEF2681 - AR11 front AW02.indd   24 13/06/2011   10:49 l ocal 
apprentices
30 local apprentices in five years
Training and 
apprenticeships
BuildiNG
knowledge
Telford Homes operates in an industry sector where 
up-to-date qualifications, standards and knowledge 
are vital to the safe and successful operation of the 
business. The Group has a supply-chain of partners 
that provide all the necessary design and building 
services to complete each development. The Group 
has established an ‘apprentice trainee’ strategy that  
is propagated through its supply-chain by delivering 
apprenticeships that provide a quality of training 
sufficient to give each apprentice the opportunity for 
long term employment. Over the last five years the 
Group, along with its partners, has assisted over 30 
local apprentices to gain a valuable qualification  
within the construction industry. 
The Group also operates a comprehensive Management 
Trainee programme under which trainees from school 
or college are employed annually. Trainees are taken 
on in each of the operational departments and are 
often based on site. They are enrolled on college 
courses, funded by Telford Homes, for a minimum  
of four years with encouragement to progress to 
complete a construction or surveying degree. A 
combination of college based training and on the  
job training alongside experienced staff allows the 
apprentices and trainees to develop technical as  
well as personal skills. 
With a constant flow of new apprentices and trainees 
developing their skills and being promoted, Telford 
Homes has developed a highly skilled workforce that  
is benefiting from updated industry knowledge 
combined with practical on the job training.
The Group puts training at the heart of its  
operations ensuring its employees maintain their 
industry knowledge. Training is seen as a necessity  
and it is important to continually assess training needs 
whilst anticipating changes in the external environment 
that will dictate new skills and knowledge that our 
employees may need. The focus on high quality 
industry specific training allows the Group to have  
a fresh approach and the Board views training, 
particularly through apprenticeships, as an essential 
investment in the future of the Group and the future  
of the construction industry. 
Year in Review
www.telfordhomes.plc.uk 25
TEF2681 - AR11 front AW02.indd   25 13/06/2011   10:49 Health and Safety
The Group received a gold 
award for health and safety 
at the Royal Society for the 
Prevention of Accidents 
awards 2011
The health, safety and wellbeing of every person 
involved in, or affected by, our business is fundamental 
to our operations. We promote a positive safety culture 
and communicate this to all employees and everyone 
working on our sites ensuring that health and safety 
procedures are understood by recipients, identify all 
the relevant risks and dangers that are likely to be 
encountered in the course of their work and set out  
the appropriate precautionary measures. 
We invest in the training and development of our people 
with the continuation of our ‘Health and Safety Core’ 
training programme. This programme ensures that all 
employees and in particular those deemed as ‘safety 
critical’ have the appropriate skills and level of training. We 
demand that our suppliers employ competent people and 
encourage continual professional development of those 
holding safety critical posts. To support this process we 
have established and held subsidised onsite training 
specifically for their employees. 
Our accident frequency rate for the year to 
31 March 2011 was in line with the industry average.  
The majority of our accidents over the last few years 
have arisen as a result of the behavioural failings of 
those injured. In an attempt to improve this situation  
we have instigated a programme of simple solutions  
to make people consciously aware of themselves 
and their interaction with their workplace. 
Our health and safety management system,  
accredited to BS OHSAS 18001:2007, continues  
to be audited every six months by the British Standard 
Institution (BSI) in accordance with their stringent auditing 
processes. In addition the Company received a gold award 
for health and safety and a silver award for the management 
of occupational road risk at the ‘Royal Society for the 
Prevention of Accidents’ (RoSPA) awards 2011. The RoSPA 
awards and the BSI certification recognise the maturity of 
our occupational health and safety management system 
and the culture of the Company. 
Hours worked
1,450,000 man hours worked across 
all developments in the year
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 26
TEF2681 - AR11 front AW02.indd   26 13/06/2011   10:49 BuildiNG
safely
Our ‘Executive Safety Committee’ and ‘Operational 
Safety Forum’ continue to meet regularly and to be 
instrumental in developing significant changes to 
the way health and safety is managed. 
Our ‘supply-chain’ procedure remains in place with all of our 
suppliers vetted by the health and safety department. In a 
climate where businesses are cautious and resources are 
under pressure several of our suppliers have struggled and 
some have ceased trading. As part of our vetting procedure 
the commercial viability of each supplier is scrutinised in an
attempt to ensure they are able to meet their obligations. 
Our operational teams expect the highest health and safety 
standards from each supplier and this is considered during 
the tender process for new work. We continually monitor 
our suppliers and take the necessary steps to ensure they 
meet our high expectations.
John Fitzgerald and Mark Parker remain responsible 
for health and safety in each of the operating divisions 
and John Fitzgerald is the board member with overall 
responsibility for health and safety.
Given market conditions and the cautious approach 
being observed by the industry, our overall health and 
safety performance has been excellent and stands us 
in good stead for the future.
Steve Nicoll
Group Health & Safety Manager
Year in Review
www.telfordhomes.plc.uk 27
TEF2681 - AR11 front AW02.indd   27 13/06/2011   10:49 Environment and 
sustainability
Telford Homes is committed to designing and 
constructing developments that both minimise 
ecological impact and improve energy efficiency. The 
Group has an environmental policy and we ensure that 
this is communicated throughout our operations. Our 
environmental policy and environmental management 
system is regularly reviewed to ensure the prevention  
of pollution and compliance with relevant legislation.  
We have commenced the accreditation process  
with the British Standards Institute to certify our 
environmental management system to BS EN ISO 
14001:2004.
The materials used in our developments  
contribute to our environmental performance.  
We re-use, recycle and adopt renewable materials 
wherever viable and continually look for new ways  
to meet and exceed environmental expectations in all  
of our activities. For example, the use of aggregates 
and crushed concrete in filling excavations and 
procuring core materials such as timber from 
responsible organisations that have established 
processes to validate its environmental credentials.
We have adopted the Building Research Establishment 
SMARTER
©
 Waste programme which not only  
records waste but also energy & timber usage. 
The majority of our sites benefit from low energy 
lighting, methods of reducing internal water usage 
including flow restrictors and dual flushes, recycling 
facilities, cycle storage and local transport links. In 
addition we use both established and cutting edge 
technologies to improve the energy efficiency of our 
developments once they are occupied. 
Some of the technologies we currently operate 
include: 
Biomass
Boilers fuelled by recycled timber pellets or alternative 
fuels such as rapeseed oil and bio-diesel are used 
to complement gas fired boilers in order to feed an 
energy efficient communal heating system in some 
of our larger developments. 
Biomass plant is currently being used or will be  
used at Greenwich Creekside, OneStratford, SoBow, 
Avant-garde, Matchmakers Wharf, Bow Trinity,  
Vellum and Lanrick Road.
Combined heat and power plant (CHP)
A fuel source, typically gas, is burnt to provide heat to 
drive a turbine or Stirling engine in order to generate 
electricity to power lighting and appliances or for 
export to the national grid. The same heat passes 
through a heat exchanger to generate domestic 
heating and hot water for a communal system. 
Currently associated only with communal systems, 
this technology is the subject of rapid development 
and small plant for individual houses and apartments 
will soon be commercially available.
A CHP is being incorporated at Avant-garde and is 
being considered for future developments.
Accreditation 
process begun
with the British Standards institute  
to certify our environmental 
management system to  
BS EN iSO 14001:2004.
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 28
TEF2681 - AR11 front AW02.indd   28 13/06/2011   10:49 Photovoltaics (PV)
PV panels convert light energy into electricity in  
order to provide lighting to the development. Current 
innovations in PV include solar tiles and transparent 
panels for incorporation into walls. Government feed  
in tariffs are encouraging inclusion of this technology 
by offering guaranteed payments to the panel owner 
in return for the reduction in electrical load on the 
national grid.
PV panels are installed or will be installed at Stadthaus, 
Bow Trinity, St Anne’s, St George’s Estate, Trades Hall 
in Leyton and High Cedars in Wanstead.
Solar thermal
Solar thermal panel heaters use radiant energy  
from the sun to heat water. There are two types of 
collectors for solar heating - flat plate and evacuated 
tube. The collectors are connected to the plumbing 
system of individual apartments and complement a 
high efficiency boiler to deliver domestic hot water  
and heating.
This technology is in use at Stadia in Leyton  
and Icona in Stratford.
Air source heat pumps
Air from within the dwelling or from outside is put 
through a process of evaporation, compression, 
condensation and expansion via a small electric pump. 
This releases heat from the air that is used to raise 
the temperature of water for domestic use and for 
underfloor heating.
Air source heat pumps are used or will be used  
at Decorum in Leyton, St Anne’s, Avant-garde  
and the St George’s Estate.
Wind power
Wind turbines are the most visible of all renewable 
technologies. They are installed on the outside of  
a building and turn generators in order to produce 
electrical energy for use in the building or for export  
to the national grid.
A wind turbine has been installed at Kinetica and 
another is planned at Avant-garde.
BuildiNG
sustainability
Year in Review
www.telfordhomes.plc.uk 29
TEF2681 - AR11 front AW02.indd   29 13/06/2011   10:49 key risks and uncertainties
Economic environment
Demand for properties from both investors and  
owner occupiers is dependent on confidence in both 
the local housing market and the wider economy.  
This confidence is heavily influenced by factors such  
as interest rates, the availability of mortgage finance, 
rental incomes, unemployment and increasing 
consumer costs for other goods and services.  
All of these are outside of the Group’s control.
The Group’s policy has been to sell early in the 
development process, wherever possible, to 
minimise the risk in each site. This policy has been 
very successful to date and pre-sales are still being 
secured with both housing associations and overseas 
buyers. in addition the Sales and Marketing team 
have detailed knowledge of the local market and 
are able to formulate the best sales strategy for 
each development and to work with purchasers and 
prospective purchasers to ensure that all stages of 
the process from reservation to legal completion run 
as smoothly as possible.
l and acquisition
The Group needs new land to maintain a development 
pipeline and to enable the business to continue to 
operate at a certain capacity. This land needs to be 
sourced in appropriate locations and where optimum 
planning consents can be obtained. The appraisal 
process that determines the price paid for land is 
critical in maintaining margins and return on equity  
at acceptable levels. 
The l and Acquisition and Partnerships team  
are responsible for sourcing land and our strong 
relationships with various land owners including 
local authorities and affordable housing providers 
play a key role in our ability to acquire new sites.  
in particular our existing partnerships with housing 
transfer organisations are expected to continue  
to be a significant source of land in the next 
few years. The appraisal process for new sites 
includes due diligence by an experienced solicitor 
and authorisation of all prospective purchases at 
appropriate levels.
Planning process
The flow of properties through the development 
pipeline is dependent on achieving suitable planning 
permission on sites purchased without planning or 
subject to planning. The process is time consuming 
and involves an increasing number of supporting 
reports and detailed consultations with many 
different bodies. Delays in achieving suitable planning 
permissions affect the number of properties that 
can be brought to market and impact on the timing 
of future cash flows. Failure to achieve a suitable 
planning permission may lead to cost write offs or 
reduced margins on individual developments.
Telford Homes has extensive knowledge of local 
planning requirements, excellent relationships 
with planning authorities and takes care in the 
appointment of professional architects, planning 
consultants and engineers. Early consultations 
with the planning authorities are a key part of the 
land acquisition process. While this cannot remove 
planning risks it mitigates them as much as 
possible. All of the sites currently owned by  
the Group have the benefit of a full planning 
permission. The Board ensures that the Group 
is not overexposed to planning risks by limiting  
the total investment in sites without a planning 
permission at any one time.
Cash requirements and bank finance
Property development is a capital intensive business 
with significant initial outlays supported by bank 
finance and lengthy time periods before the majority 
of the cash inflows on each project. Forecasting 
of cash flows is critical to ensure the Group is not 
operating beyond its financial capacity. Part of this 
process involves the forecast of bank funding for 
each development and the availability of sufficient 
bank finance is therefore also of critical importance.
Telford Homes maintains a detailed cash flow 
forecast as part of its management information 
systems. This extends five years into the future 
and is subject to continual re-assessment and 
sensitivity analysis. The cash flow position is 
reviewed by the Board and by each of the Group’s 
banking partners on a monthly basis. Telford 
Homes has excellent relationships with the banks 
funding the business and has sufficient facilities 
available to ensure the continuing operation of 
the business. 
Year in Review
TEl FORd HOMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 30
TEF2681 - AR11 front AW02.indd   30 13/06/2011   10:49 Construction
The construction process is critical to the efficient 
and timely delivery of properties to purchasers which 
affects both cash flow and customer satisfaction.  
The quality of the construction work and finish 
in each property affects the reputation of the 
Group and can impact on repeat purchase and 
recommendation rates. 
Standards of construction and control of the 
building process on site are of paramount 
importance to each operating division. Careful 
planning is required to assess a development 
programme before construction commences 
and this is monitored over the course of the 
building work. The construction teams work very 
closely with the Customer Service team and their 
interaction commences at an early stage in the 
development. The Customer Service team spend  
a substantial proportion of their time on site 
carrying out quality control before a purchaser 
sees the property for the first time.
Availability of materials and labour
The availability of materials and sub-contracted 
labour for each site can affect both the construction 
programme and the cost of construction. Build cost 
inflation will impact directly on the margin achieved  
on each site where this is in excess of forecasts.
Planning of the construction programme and  
timely management of the tender process for each 
sub-contracted trade reduces the risk of delays in 
the construction programme due to availability of 
materials and labour. The tender process ensures 
that competitive rates are achieved on every trade. 
Telford Homes works in partnership with all of its 
sub-contractors and makes timely payments to 
encourage an equal relationship that is beneficial  
to all parties.
 
Health and Safety
Construction sites are dangerous places and there 
are many different health and safety risks to consider. 
The health and safety of everyone associated with 
Telford Homes, both employees and sub-contractors, 
is the first priority of the Group.
investment in training, the promotion of health 
and safety to all employees and extensive policies 
and procedures all contribute to a comprehensive 
approach to health and safety management with 
the objective of minimising risk and providing  
a safe working environment. 
Political environment
Changes in laws and regulations can have a direct 
impact on the efficient running of the Group and  
the costs incurred on each development. Changes  
in both local and national government can have a  
direct bearing on the regulatory environment.
Telford Homes works closely with specialist 
consultants to ensure that it is up to date with 
current regulations and aware of any future  
changes so that operations can be 
planned accordingly. 
Year in Review
www.telfordhomes.plc.uk 31
TEF2681 - AR11 front AW02.indd   31 13/06/2011   10:49 Board of directors
David Holland has over 40 years 
experience in the development 
and house building sector having 
joined George Wimpey Plc in 
1966. On his retirement he held 
the position of Group Managing 
Director with responsibility for 
worldwide housing and land 
development. In 1997 David held 
the annual position of President 
of the House Builders Federation. 
David was appointed Non-
Executive Chairman of Telford 
Homes Plc in December 2001 and 
advises on all development issues 
and matters of strategic planning. 
He chairs the remuneration 
committee and is a member  
of the audit committee.
David Durant is a co-founder 
of Telford Homes Plc and has 
over 30 years experience in the 
construction and house building 
sectors including 14 years at 
Furlong Homes where he was 
Group Technical Director from 
1997 to 2000. David had been 
Group Managing Director since the 
start of the Company’s operations 
in 2001. In 2005 he supervised 
devolving responsibility for the 
finished Telford Homes product 
into two divisions in order to 
handle the high level of growth in 
units under construction. David’s 
role is focused on major planning 
consents, product design and 
maintaining key partnerships. 
Jon Di-Stefano joined Telford 
Homes Plc as Financial Director 
in October 2002. He had one 
year with Mothercare following 
five years with Arthur Andersen. 
Apart from financial matters Jon 
also has board responsibility 
for human resources. There has 
been extensive growth in both 
areas and Jon has developed a 
significant finance team. The role 
Jon has played, in nurturing the 
trust and support of our banking 
partners with the constant high 
quality of his financial reporting 
and in developing relationships 
with institutional investors through 
regular presentations, has proved 
invaluable to the success of 
Telford Homes. 
Non-Executive Chairman, 70
David Holland
Andrew Wiseman, together with 
close colleagues, founded Telford 
Homes Plc in December 2000 
following ten years with Furlong 
Homes Plc initially as Financial 
Director then as Chief Executive 
for the final three years. Prior to 
1990 his experience had been 
gained in various sectors, including 
seven years with B.A.T Industries 
Plc. Andrew spear-headed the 
successful flotation of both Furlong 
Homes Plc and Telford Homes 
Plc on AIM. The former on the 
launch of AIM in 1995 and the 
latter in December 2001 building 
on excellent relationships with 
institutional investors. Andrew 
has been especially involved in 
the cementing of relationships 
between Telford Homes Plc and 
affordable housing providers 
which have been central to the 
growth of the Company. 
Chief Executive, 54
Andrew Wiseman BA (Hons), FCMA
Financial Director, 36
Jonathan Di-Stefano MA (Econ), ACA
Group Planning & Design Director, 49
David Durant
tElF orD Ho MES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 32
Corporate Governance
TEF2681 - AR11 Middle AW02.indd   32 13/06/2011   10:53 John Fitzgerald ICIoB
Jim Furlong has over 40 years 
experience in all aspects of the 
construction and building industry 
through his involvement in roofing, 
civil engineering, construction 
and house building companies 
which all bore the ‘Furlong’ name. 
Prior to joining Telford Homes as 
Land Director Jim was a driving 
force within Furlong Homes, where 
he was Chairman with specific 
responsibility for land acquisition. 
Jim’s wide experience of land 
acquisition played a central role in 
the initial growth of Telford Homes. 
Robert Clarke was a partner in 
Binder Hamlyn and subsequently 
Arthur Andersen until his 
retirement in 2000. Robert joined 
Telford Homes Plc as a non-
executive director at the time of 
the AIM flotation in December 2001 
and he has been influential in the 
fields of corporate governance  
and strategic direction. He has 
also been a non-executive director 
of various other public and 
private companies and served on 
committees of national charities. 
Robert is chairman of the audit 
committee and a member of the 
remuneration committee.
John Fitzgerald began his 
career in 1987 with Willmot 
Dixon Construction followed by 
Willmot Dixon Housing. He has 
over 20 years experience in the 
construction and house building 
sector and spent the four years 
prior to joining Telford Homes as 
Project and Contract Manager 
with Furlong Homes where he was 
responsible for some of their more 
prestigious developments. He 
joined Telford Homes in February 
2003 and was jointly responsible 
for construction until March 2005 
when, following re-structuring, 
he was appointed divisional 
managing director of Telford 
Homes Alto where he has built a 
very successful team. John was 
appointed a director on 1 August 
2007 and is the director with 
responsibility for health and safety 
throughout the business.
Mark Parker joined the Wimpey 
Group as a management trainee 
in 1981 and spent the following 
21 years with various Wimpey 
divisions culminating in the post of 
Construction Director for McAlpine 
Homes East. He spent the next 
three years as one of the two 
initial directors of the new North 
London division of KingsOak Homes. 
Appointed as Construction Director 
he was involved in all aspects of the 
new division, from land acquisition 
to sales and customer care. Mark 
joined Telford Homes in February 
2005 as divisional managing director 
of Telford Homes Metro and has 
been influential in developing 
strong partnerships with housing 
associations. Mark was appointed a 
director on 1 August 2007 and jointly 
with John Fitzgerald has taken on the 
duties and responsibilities of Group 
Managing Director.
l and Director, 75
James Furlong
Sheena Ellwood joined Telford 
Homes Plc as Sales & Marketing 
Director in January 2003. Prior 
to this, her experience comes 
from consumer goods export 
with the Maxwell Group and 
Hallmark Corporation (including 
two years in the USA), followed 
by eight years as regional 
Sales & Marketing Director for 
Wimpey Homes. Sheena has 
developed an extensive sales 
& marketing team at Telford 
Homes Plc and set up a customer 
service department that plays 
an important role in building 
and maintaining relationships 
with our individual customers, 
whether owner-occupiers, UK  
or overseas investors. 
Sales & Marketing Director, 52
Sheena Ellwood  
BA (Hons), Dip. Int. Marketing
Non-Executive Director, 68
Joint Group Managing Director, 40
Joint Group Managing Director, 48
robert Clarke FCA
Mark Parker BSc (Hons), MCIoB
www.telfordhomes.plc.uk 33
Corporate Governance
TEF2681 - AR11 Middle AW02.indd   33 13/06/2011   10:53 tElF orD Ho MES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 34
Corporate Governance
Policy on corporate governance
Application of principles
Although not formally required to do so, the directors have sought to embrace the principles contained in the 
Combined Code (2003) (the Code) and its 2008 revised version applicable to fully listed companies, in formulating 
and applying the Group’s corporate governance policies. These policies are monitored to ensure that they are 
appropriate to the Group’s circumstances and comply as far as possible with the provisions of the Code given 
the size of the Group. 
Directors
The Company and Group are managed by a board of directors and they have the necessary skills and experience 
to effectively operate and control the business. There are nine directors in total of whom two are non-executive 
directors. David Holland and Robert Clarke, the non-executive directors, are considered independent and they 
comprise both the audit and remuneration committees. The Board meets once a month and the directors make 
every effort to attend all board meetings.
The Board is responsible for taking all major strategic decisions and also addressing any significant operational 
matters. In addition the Board reviews the risk profile of the Group and ensures that an adequate system of 
internal control is in place. Management information systems are in place to enable the directors to make 
informed decisions to properly discharge their duties.
The roles of the Chairman and the Chief Executive are separate. The Chairman is responsible for running the 
Board and he meets regularly and separately with the Chief Executive and the other non-executive director to 
discuss matters for the Board.
As the business has developed, the composition of the Board has been under constant review to ensure that it 
remains appropriate to the managerial requirements of the Group. One third of the directors retire annually in 
rotation in accordance with the Company’s articles of association. This enables the shareholders to decide on 
the election of the Company’s Board.
The Board takes decisions regarding the appointment of new directors as a whole and this is only done  
following a thorough assessment of a potential candidate’s skills and suitability for the role. New directors are 
given a full induction to the Group where required so as to ensure they can properly fulfil their role and meet 
their responsibilities.
All directors are offered appropriate coaching and training to develop their knowledge and ensure they remain 
up to date in relevant matters for which they have responsibility as a member of the Board.
The Chairman’s statement and Chief Executive’s review included in this annual report give the Board’s current 
assessment of the Group’s prospects. The directors are responsible for preparing the financial statements as set 
out in the statement of directors’ responsibilities. The responsibilities of the auditors are set out in their report.
r emuneration committee
Details concerning the composition and meetings of the remuneration committee are contained in the directors’ 
remuneration report on pages 36 to 37.
Audit committee
During the period the audit committee, which is chaired by Robert Clarke an independent non-executive director, 
has met twice with the external auditors being in attendance on both occasions. The non-executive directors 
meet separately with the auditors up to twice a year.
The committee has a responsibility for reviewing the financial statements provided to shareholders. In addition the 
committee reviews the business and financial risks and internal controls as described below.
The duties of the committee also include ensuring that the auditors provide a cost effective service to the Group 
and remain objective and independent and to consider from time to time the need for an internal audit function.
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Corporate Governance
r elations with shareholders
The Company has institutional shareholders and is, where practicable, willing to enter into a dialogue with them. 
The Chief Executive and the Financial Director meet regularly with institutional investors within the confines of 
relevant legislation and guidance.
The Board invites communication from its private investors and encourages participation by them at the 
Annual General Meeting (AGM). All Board members present at the AGM are available to answer questions 
from shareholders. Notice of the AGM in excess of 21 clear days is given and the business of the meeting is 
conducted with separate resolutions, voted on initially by a show of hands and with the result of the voting 
being clearly indicated.
Internal control
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a 
system is designed to mitigate the risk of failure to achieve business objectives and can only provide reasonable 
but not absolute assurance against material misstatement or loss.
The Board is of the view that there is an ongoing process for identifying, evaluating and managing the Group’s 
significant risks and that it has been in place for the period ended 31 March 2011 and up to the date of approval 
of the annual report and accounts, and that it is regularly reviewed by the Board.
The internal control procedures are delegated to executive directors and senior management in the Group 
operating within a clearly defined departmental structure. The Board regularly reviews the internal control 
procedures in the light of the ongoing assessment of the Group’s significant risks.
On a monthly basis management accounts, including a comprehensive cash flow forecast, are reviewed by 
the Board in order to provide effective monitoring of financial performance. At the same time the Board 
considers other significant strategic, organisational and compliance issues to ensure that the Group’s assets are 
safeguarded and financial information and accounting records can be relied upon. The Board formally monitors 
monthly progress on each development.
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for the year ending 31 March 2011 36
Corporate Governance
Directors’ remuneration report
The directors present the remuneration report for the year ended 31 March 2011.
Composition of the remuneration committee
The remuneration committee comprises the independent non-executive directors, David Holland and Robert 
Clarke. The committee makes recommendations to the Board on executive directors’ service agreements and 
remuneration. In doing so it has undertaken relevant research to ensure that remuneration levels are competitive 
with the industry average. The committee met four times during the year.
r emuneration policy
It is the Group’s policy to provide remuneration packages sufficient to attract, retain and motivate directors of 
the quality required. To add further incentive the directors have adopted two bonus schemes, one applicable 
to all staff and a scheme for executive directors and senior management. Both schemes are dependent on the 
Group meeting certain financial performance targets. The maximum amount that can be earned under the 
executive bonus scheme is 100% of basic salary.
The Company operates a Share Incentive Plan (SIP) in which all employees are entitled to participate. The SIP exists in 
order to increase employee ownership of shares and further details are given in note 17 to the financial statements.
During 2006 the Company set up a Deferred Payment Share Purchase Plan (DPSPP) for the benefit of selected 
senior employees. Further details are given in note 17 to the financial statements. The remuneration committee 
is responsible for approving any offers of shares made under the DPSPP. 
The Board as a whole determines the remuneration of the non-executive directors after considering external 
market research. They do not participate in the bonus schemes or in the personal pension scheme. They are 
entitled to participate in the SIP. 
Service contracts
The executive directors have service contracts that can be terminated on twelve months notice. These provide 
for termination payments equivalent to twelve months basic salary and contractual benefits.
The non-executive directors have letters of appointment that can be terminated on three months notice.
Directors’ emoluments
The directors’ emoluments for the year ended 31 March 2011 are as follows:
Salary
and fees Bonus
Benefits
in kind
Pension
contributions
t otal
2011
t otal
2010
Andrew Wiseman 156,250 30,000 17,341 15,625 219,216 257,711
Robert Clarke 44,500 – – – 44,500 42,500
David Durant 136,250 30,000 14,486 13,625 194,361 222,684
Jonathan Di-Stefano 136,250 30,000 22,713 13,625 202,588 232,275
Sheena Ellwood 136,250 30,000 23,973 13,625 203,848 232,333
John Fitzgerald 136,250 30,000 22,962 13,625 202,837 231,038
James Furlong 83,250 30,000 32,951 – 146,201 181,089
David Holland 57,500 – – – 57,500 55,500
Mark Parker 136,250 30,000 25,727 13,625 205,602 233,505
Total 1,022,750 210,000 160,153 83,750 1,476,653 1,688,635
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Corporate Governance
Directors’ interests in shares and share options
Directors’ interests in shares are disclosed in the report of the directors.
The share options held by the directors at 31 March 2011 and the movements during the year then ended were 
as follows:
Company
scheme
31 March 
2010 
Number
Granted
 in year
 Number
Exercised
 in year
 Number
31 March 
2011 
Number
Exercise 
price
Dates
 exercisable
Jonathan Di-Stefano unapproved 60,000 – – 60,000 75p
1 Oct 2005 to 
1 Oct 2012
approved 14,051 – – 14,051 213.5p
14 Feb 2011 to
 14 Feb 2018
David Durant approved 14,051 – – 14,051 213.5p
14 Feb 2011 to
 14 Feb 2018
Sheena Ellwood unapproved 59,732 – – 59,732 74.5p
20 Feb 2006 to
 20 Feb 2013
approved 14,051 – – 14,051 213.5p
14 Feb 2011 to
 14 Feb 2018
John Fitzgerald unapproved 160,000 – – 160,000 75p
1 Oct 2005 to 
1 Oct 2012
approved 14,051 – – 14,051 213.5p
14 Feb 2011 to
 14 Feb 2018
Mark Parker unapproved 50,542 – – 50,542 138.5p
17 May 2008 to
 17 May 2015
 approved 21,660 – – 21,660 138.5p
 17 May 2008 to
 17 May 2015
In total the share-based payments charge in respect of directors’ share options was £5,815 (2010: £6,878).
By order of the Board
David Holland 
Chairman of the Remuneration Committee
31 May 2011
 
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for the year ending 31 March 2011 38
Corporate Governance
report of the directors
The directors present their report and the audited financial statements for the year ended 31 March 2011.
review of activities
The principal activity of the Group is that of property development.
A review of the activities and prospects of the Group is given in the Chairman’s statement, the Chief Executive’s 
review and the financial review on pages 9 to 22. The Group is required to prepare a business review 
incorporating comments on key performance indicators and this is covered in the review of activities and 
prospects.
The primary key performance indicators are disclosed on page 8.
r esults and dividends
Profit after income tax for the year ended 31 March 2011 was £2,292,000 (2010: £5,319,000).
The directors recommend a final dividend of 1.25 pence per ordinary share which, together with the interim 
dividend of 1.25 pence paid on 14 January 2011, makes a total of 2.5 pence for the year (2010: 2.0 pence).
Going concern
The Group’s business activities, together with factors likely to affect its future development and performance 
are set out in the Chairman’s statement and the Chief Executive’s review on pages 9 to 16 and the key risks and 
uncertainties affecting the Group are set out on pages 30 to 31. The financial position of the Group, its cash flows 
and borrowing facilities are described in the financial review on pages 18 to 22. In addition note 20 to the financial 
statements includes details of the Group’s financial instruments and its exposure to credit risk and liquidity risk.
The directors have assessed the Group’s projected business activities and available financial resources together 
with detailed forecasts for cash flow and relevant sensitivity analysis. The directors believe that the Group is well 
placed to manage its business risks successfully.
After making appropriate enquiries the directors have a reasonable expectation that the Company and the 
Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly 
the directors continue to adopt the going concern basis in preparing the annual report and accounts.
Substantial shareholdings
As at 18 May 2011, the Company had been advised of the following notifiable interests in its ordinary share capital:
Number of 
shares held Percentage
Telford Homes Trustees Limited 2,614,479 5.34%
Standard Life Investments 2,500,000 5.10%
Artemis Investment Management Ltd 1,986,535 4.05%
K P Furlong 1,856,000 3.79%
T D Waterhouse Nom. (R Stokes) 1,607,760 3.28%
The shares held by Telford Homes Trustees Limited include shares held on behalf of employees under the Share 
Incentive Plan (note 17).
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Corporate Governance
Directors
Details of the directors of the Company are shown on pages 32 to 33.
Robert Clarke, Mark Parker and Jonathan Di-Stefano retire by rotation at the next Annual General Meeting and, 
being eligible, offer themselves for re-election. 
Directors’ interests
The directors of the Company are listed below together with their interest in the shares of the Company at  
31 March 2011 and movements in the year:
At 
31 March 2010
 Number
Share
 Incentive Plan 
Number
Market 
acquisitions
 and disposals
Number
At
31 March 2011
Number
Andrew Wiseman 2,309,743 4,736 – 2,314,479
Robert Clarke 168,477 4,735 – 173,212
Jonathan Di-Stefano 349,477 4,735 – 354,212
David Durant 1,249,767 4,736 (8,600) 1,245,903
Sheena Ellwood 353,745 4,735 – 358,480
John Fitzgerald 222,456 4,484 – 226,940
James Furlong 1,324,152 4,736 – 1,328,888
David Holland 998,477 4,735 – 1,003,212
Mark Parker 172,746 4,566 – 177,312
These interests include shares purchased under the Telford Homes Share Incentive Plan (SIP) which all 
employees, including directors, are eligible to participate in. All shares purchased under the SIP are matched 
by shares provided by the Company on a one for one basis. These ‘Matching’ shares are also included in the 
interests stated but must remain in the SIP for a period of not less than three years otherwise they are forfeited. 
Further details on the SIP are included in note 17 to the financial statements.
Details of share options held by directors are given in the directors’ remuneration report on pages 36 to 37.
ordinary shares
The Company issued 355,089 new ordinary shares and cancelled 1,130,089 ordinary shares during the year. 
Further information is disclosed in note 16.
The Company’s investment in own shares relates solely to the Share Incentive Plan and further details of the total 
holding and movements in the holding are disclosed in note 17.
Creditors
It is Group policy to settle all debts with its creditors on a timely basis. Subcontractors are paid upon agreement 
of the value of works completed based on their applications for payment and the terms agreed. In general, other 
suppliers are paid during the month following the month of receipt of the invoice unless other terms have been 
specifically agreed.
At 31 March 2011 trade payables represented 18 days purchases (2010: 15 days).
TEF2681 - AR11 Middle AW02.indd   39 13/06/2011   10:53 tElF orD Ho MES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 40
Corporate Governance
report of the directors continued
Employees
The Group places considerable value on the involvement of its employees and keeps them informed of all 
relevant matters on a regular basis. Telford Homes is an equal opportunities employer and all applications 
for employment are considered fully on the basis of suitability for the job.
Charitable donations
The Group made charitable donations of £18,000 (2010: £33,000). These donations were made to a number  
of different charities supporting a broad range of good causes.
Annual General Meeting
The Annual General Meeting will be held at the registered office at First Floor, Stuart House, Queensgate, 
Britannia Road, Waltham Cross, Hertfordshire on 14 July 2011 at 3pm.
Auditors
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the 
Annual General Meeting in accordance with section 489 of the Companies Act 2006.
Each of the directors at the time this report was approved has confirmed the following:
 y so far as each director is aware, there is no relevant audit information of which the Company’s auditors are 
unaware; and
 y each director has taken steps that ought to have been taken as a director in order to make themselves 
aware of any relevant audit information and to establish that the Company’s auditors are aware of that 
information.
By order of the Board,
Sara Debenham 
Company Secretary
31 May 2011
 
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Corporate Governance
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with 
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the 
directors have prepared the Group and Parent Company financial statements in accordance with International 
Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the directors must 
not approve the financial statements unless they are satisfied that they give a true and fair view of the state of 
affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these 
financial statements, the directors are required to:
 y select suitable accounting policies and then apply them consistently;
 y make judgements and accounting estimates that are reasonable and prudent;
 y state whether applicable IFRS as adopted by the European Union have been followed, subject to any material 
departures disclosed and explained in the financial statements; and
 y prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 
Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and 
the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are 
also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps  
for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Group’s website. Legislation in the  
United Kingdom governing the preparation and dissemination of financial statements may differ from legislation  
in other jurisdictions. 
 
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for the year ending 31 March 2011 42
Corporate Governance
Auditors’ report
Independent Auditors’ report to the Members of t elford Homes Plc
We have audited the Group and Parent Company financial statements (the ‘financial statements’) of Telford 
Homes Plc for the year ended 31 March 2011 which comprise the Group Income Statement, the Group 
Statement of Comprehensive Income, the Group and Parent Company Balance Sheets, the Group and 
Parent Company Cash Flow Statements, the Group and Parent Company Statement of Changes in Equity, 
the Statement of Accounting Policies and the related notes. The financial reporting framework that has 
been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) 
as adopted by the European Union and, as regards the Parent Company financial statements, as applied in 
accordance with the provisions of the Companies Act 2006.
respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 41, the directors are 
responsible for the preparation of the financial statements and for being satisfied that they give a true and 
fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with 
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply 
with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in 
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving 
these opinions, 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.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient 
to give reasonable assurance that the financial statements are free from material misstatement, whether 
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the 
Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of 
significant accounting estimates made by the directors; and the overall presentation of the financial statements. 
In addition, we read all the financial and non-financial information in the Annual Report and Accounts to identify 
material inconsistencies with the audited financial statements. If we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report.
opinion on financial statements 
In our opinion: 
 y the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s 
affairs as at 31 March 2011 and of the Group’s profit and Group’s and Parent Company’s cash flows for the 
year then ended;
 y the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the 
European Union; 
 y the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted 
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
 y the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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Corporate Governance
opinion on other matters prescribed by the Companies Act 2006
In our opinion, the information given in the Report of the Directors for the financial year for which the financial 
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to 
report to you if, in our opinion:
 y adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit 
have not been received from branches not visited by us; or
 y the Parent Company financial statements are not in agreement with the accounting records and returns; or
 y certain disclosures of directors’ remuneration specified by law are not made; or
 y we have not received all the information and explanations we require for our audit.
Andrew l atham (Senior Statutory Auditor) 
for and on behalf of PricewaterhouseCoopers LLP 
Chartered Accountants and Statutory Auditors 
St Albans
31 May 2011
TEF2681 - AR11 Middle AW02.indd   43 13/06/2011   10:53 Financial Statements
44
Group income statement
31 March 2011
Note
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Revenue 121,071 159,338
Cost of sales before exceptional items (105,709) (138,291)
Exceptional items 511 (710)
Gross profit 15,873 20,337
Administrative expenses (9,255) (9,691)
Selling expenses (2,725) (1,920)
Exceptional items – (70)
Operating profit 1 3,893 8,656
Finance income 3 249 333
Finance costs 3 (1,108) (1,651)
Profit before income tax 3,034 7,338
Analysed as:
Profit before income tax and exceptional items 2,523 8,118
Exceptional items 1 511 (780)
3,034 7,338
Income tax expense 4 (742) (2,019)
Profit after income tax 2,292 5,319
Earnings per share:
Basic 6 4.8p 13.7p
Diluted 6 4.7p 13.5p
All activities are in respect of continuing operations.
Group statement of comprehensive income
31 March 2011
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Movement in excess tax on share options (12) 14
Other comprehensive (expense) income net of tax (12) 14
Profit for the year 2,292 5,319
Total comprehensive income for the year 2,280 5,333
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Financial Statements
45
Balance sheet 
31 March 2011
Group Company
Note
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Non current assets
Investments 7 –  – 638 638
Property, plant and equipment 8 358 380 358 380
Deferred income tax assets 13 50 109 50 109
408 489 1,046 1,127
Current assets
Inventories 9 125,181 120,047 58,300 77,953
Trade and other receivables 10 14,211 7,638 40,118 27,127
Cash and cash equivalents 11 18,837 33,642 17,575 25,127
158,229 161,327 115,993 130,207
Total assets 158,637 161,816 117,039 131,334
Non current liabilities
Hire purchase liabilities 12 (19) – (19) – 
(19) – (19) – 
Current liabilities
Trade and other payables 14 (28,554) (27,065) (24,500) (23,491)
Borrowings 15 (64,877) (70,800) (30,786) (46,985)
Current income tax liabilities (431) (871) – (968)
Hire purchase liabilities 12 (16) – (16) –
(93,878) (98,736) (55,302) (71,444)
Total liabilities (93,897) (98,736) (55,321) (71,444)
Net assets 64,740 63,080 61,718 59,890
Capital and reserves
Issued share capital 16 4,900 4,978 4,900 4,978
Share premium 37,075 37,357 37,075 37,357
Retained earnings 22,765 20,745 19,743 17,555
Total equity 64,740 63,080 61,718 59,890
These financial statements were authorised for issue by the board of directors on 31 May 2011 and signed on its 
behalf by:
Andrew Wiseman   Jonathan Di-Stefano   
Chief Executive    Financial Director  
Company number: 4118370
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for the year ending 31 March 2011
Financial Statements
46
Statement of changes in equity
31 March 2011   
Group statement of changes in equity Share 
capital
 £000
Share 
premium
 £000
Retained 
earnings
£000
Total
equity
 £000
Balance at 1 April 2009 3,875 30,345 16,085 50,305
Profit for the year –  – 5,319 5,319
Total other comprehensive income –  – 14 14
Dividend on equity shares –  – (295) (295)
Proceeds of equity share issues 1,103 7,343 – 8,446
Costs arising from shares issued – (331) – (331)
Share-based payments –  – 283 283
Purchase of own shares –  – (312) (312)
Sale of own shares –  – 149 149
Write down in value of own shares –  – 126 126
Option to repurchase own shares  –  – (624) (624)
Balance at 31 March 2010 4,978 37,357 20,745 63,080
Profit for the year –  – 2,292 2,292
Total other comprehensive expense –  – (12) (12)
Dividend on equity shares –  – (1,227) (1,227)
Proceeds of equity share issues 35  238  – 273
Share-based payments –  –  264 264
Purchase of own shares –  – (273) (273)
Sale of own shares –  –  191 191
Write down in value of own shares –  –  138 138
Dividend paid on consideration shares –  –  14 14
Cancellation of own shares (note 22) (113) (520) 633  – 
Balance at 31 March 2011 4,900 37,075 22,765 64,740
Company statement of changes in equity Share 
capital
 £000
Share 
premium
 £000
Retained 
earnings
£000
Total
equity
 £000
Balance at 1 April 2009 3,875 30,345 12,401 46,621
Profit for the year –  – 5,813 5,813
Total other comprehensive income –  – 14 14
Dividend on equity shares –  – (295) (295)
Proceeds of equity share issues 1,103 7,343 – 8,446
Costs arising from shares issued – (331) – (331)
Share-based payments –  – 283 283
Purchase of own shares –  – (312) (312)
Sale of own shares –  – 149 149
Write down in value of own shares –  – 126 126
Option to repurchase own shares –  – (624) (624)
Balance at 31 March 2010 4,978 37,357 17,555 59,890
Profit for the year –  – 2,460 2,460
Total other comprehensive expense –  – (12) (12)
Dividend on equity shares –  – (1,227) (1,227)
Proceeds of equity share issues 35 238 – 273
Share-based payments –  –  264 264
Purchase of own shares –  – (273) (273)
Sale of own shares –  – 191 191
Write down in value of own shares –  – 138 138
Dividend paid on consideration shares –  – 14 14
Cancellation of own shares (note 22) (113) (520) 633 – 
Balance at 31 March 2011 4,900 37,075 19,743 61,718
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Financial Statements
47
Cash flow statement
31 March 2011
Group Company
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Cash flow from operating activities
Operating profit 3,893 8,656 1,220 9,003
Depreciation 175 288 175 288
Write down in value of own shares 138 126 138 126
Share-based payments 264 283 264 283
Profit on sale of tangible assets (49) – (49) –
(Increase) decrease in inventories (3,580) 59,565 20,126 65,704
(Increase) decrease in receivables (6,573) 1,460 (12,991) (11,863)
Increase (decrease) in payables 1,510 (3,308) 1,039 (4,767)
(4,222) 67,070 9,922 58,774
Interest paid (2,683) (3,483) (1,200) (2,725)
Income tax paid (1,135) (888) (1,135) (770)
Cash flow from operating activities (8,040) 62,699 7,587 55,279
Cash flow from investing activities
Acquisition of subsidiary – – – (634)
Dividends received – – 1,959 –
Purchase of tangible assets (109) (50) (109) (50)
Proceeds from sale of tangible assets 52 – 52 –
Interest received 249 333 192 290
Cash flow from investing activities 192 283 2,094 (394)
Cash flow from financing activities
Proceeds from issuance of ordinary 
share capital
273 8,446 273 8,446
Costs arising from shares issued – (331) – (331)
Purchase of own shares (273) (312) (273) (312)
Sale of own shares 191 149 191 149
Increase in bank loans 64,438 33,272 36,535 25,440
Repayment of bank loans (70,347) (75,116) (52,720) (67,166)
Dividend paid (1,227) (295) (1,227) (295)
Capital element of hire  
purchase payments
(12) (18) (12) (18)
Cash flow from financing activities (6,957) (34,205) (17,233) (34,087)
Net (decrease) increase in cash and  
cash equivalents
(14,805) 28,777 (7,552) 20,798
Cash and cash equivalents  
brought forward
33,642 4,865 25,127 4,329
Cash and cash equivalents  
carried forward
18,837 33,642 17,575 25,127
TEF2681 - AR11 back AW02.indd   47 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
48
Statement of accounting policies
31 March 2011
Basis of preparation
The financial statements have been prepared in 
accordance with International Financial Reporting 
Standards (IFRS) as adopted by the European Union 
and IFRIC interpretations and with those parts of 
the Companies Act 2006 applicable to companies 
reporting under IFRS. 
The financial statements have been prepared under 
the historical cost convention.
The preparation of financial statements in conformity 
with generally accepted accounting principles requires 
the use of estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date 
of the financial statements and the reported amounts 
of revenues and expenses during the reporting 
period. Although these estimates are based on the 
directors best knowledge of the amounts, events or 
actions, actual results ultimately may differ from those 
estimates. The most significant estimates made by 
the directors in these financial statements are set out 
in 'Critical accounting judgements and key sources of 
estimation uncertainty'.
The accounting policies set out below have been 
applied consistently for all periods presented in these 
financial statements. 
Basis of consolidation
The consolidated financial statements include the 
financial statements of the Company, its subsidiaries 
and the Group's share of jointly controlled entities 
up to 31 March 2011. The results of subsidiaries 
acquired or disposed of during the year are included 
in the financial statements from the effective date of 
acquisition or up to the effective date of disposal, as 
appropriate. All intra-group transactions, balances, 
income and expenses are eliminated on consolidation.
Exemptions
The directors have taken advantage of the exemption 
available under Section 408 of the Companies Act 
2006 and have not presented an income statement for 
the Company alone.
Jointly controlled entities
A jointly controlled entity is an entity in which the 
Group holds an interest with one or more other parties 
where a contractual arrangement has established 
joint control over the entity. Jointly controlled entities 
are accounted for using proportional consolidation.
Segmental reporting
The Group has only one business segment being 
housebuilding and one geographical segment being 
the United Kingdom. Financial analysis is presented on 
this basis to the chief operating decision makers for 
the Group these being the board of directors. 
Revenue and profit recognition
Properties for open market sale
Revenue and profit is recognised at the point of legal 
completion of each property.
Commission received on property sales made on 
behalf of third parties is recorded within revenue, with 
all costs associated with the sale of those properties 
recognised within selling expenses.
Construction contracts
Contracts are treated as construction contracts 
when they have been specifically negotiated for 
the construction of a development or a number of 
properties. These contracts are primarily for the 
construction of affordable homes. Revenue is only 
recognised on a construction contract where the 
outcome can be estimated reliably. Revenue and 
costs are recognised by reference to the stage of 
completion of contract activity at the balance sheet 
date. This is normally measured by an assessment of 
work performed to date.
Where the outcome of a construction contract cannot 
be estimated reliably, contract revenue is recognised 
to the extent of contract costs incurred that it is 
probable will be recoverable. When it is probable that 
total contract costs will exceed total contract revenue, 
the expected loss is recognised as an expense 
immediately.
Grant income
Grants received from the Homes and Communities 
Agency are recognised as revenue in the income 
statement to match with the related costs that they 
are intended to compensate.
Selling expenses
Selling expenses are charged to the income statement 
as incurred.
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Financial Statements
49
Borrowings
Interest bearing bank loans and overdrafts are 
recorded at the proceeds received.
Borrowing costs directly attributable to the 
development of properties that take a substantial 
period of time to get ready for sale, are capitalised 
within inventories. Capitalisation of borrowing costs 
commences from the date of initial expenditure on a 
given development and continues until the properties 
are ready for sale. 
The capitalisation of borrowing costs is suspended 
where land assets are being held for strategic 
purposes or where there are prolonged periods 
when development activity on a site is interrupted. 
Capitalisation is not normally suspended during a 
period when substantial technical and administrative 
work is being carried out.
All other borrowing costs are charged to the income 
statement using the effective interest method.
Exceptional items
Exceptional items are those significant items which 
are separately disclosed by virtue of their size or 
incidence to enable a full understanding of the Group's 
financial performance.
Finance leases and hire purchase contracts
Leases are classified as finance leases whenever the 
terms of the lease transfer substantially all the risks 
and rewards of ownership to the lessee. All other 
leases are classified as operating leases.
Assets held under finance leases and hire purchase 
contracts are recognised as assets of the Group at 
their fair value or, if lower, at the present value of 
the minimum lease payments, each determined at 
the inception of the lease and depreciated over the 
shorter of their expected useful lives and the lease 
term. The corresponding liability is included in the 
balance sheet as a finance lease or hire purchase 
obligation. Lease payments are apportioned between 
finance charges and reduction of the lease obligations 
so as to achieve a constant rate of interest on the 
remaining balance of the liability. Finance charges are 
charged to the income statement.
Operating leases
Operating lease rentals are charged to the income 
statement on a straight line basis over the life of 
the lease.
Pension costs
Contributions paid to group personal pension schemes 
(defined contribution), in respect of employees, are 
charged to the income statement as incurred.
Property, plant and equipment
Property, plant and equipment is stated at cost less 
accumulated depreciation. Depreciation is provided on 
a straight line basis at rates calculated to write down 
the cost, less estimated residual value, of each asset 
over its expected useful life as follows:
Leasehold improvements – shorter of term of lease  
 and 10 years
Plant and machinery – 2 to 5 years
Motor vehicles – 3 years
Investments
Interests in subsidiary undertakings and jointly 
controlled entities are valued at cost less impairment. 
Inventories
Development properties are included in inventories 
and are stated at the lower of cost and net realisable 
value. Cost comprises costs of acquisition and 
development, including directly attributable fees and 
expenses, direct labour costs and borrowing costs. 
Included within development properties are freehold 
interests held in completed developments. These are 
held for future sale. 
Financial instruments
Financial assets and financial liabilities are recognised 
on the Group's balance sheet when the Group becomes 
a party to the contractual provision of the instrument.
Trade receivables and other receivables
Trade receivables on normal terms do not carry 
any interest and are stated at their nominal value 
reduced by appropriate allowances for estimated 
unrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents are defined as cash 
balances in hand and in the bank (including short-term 
cash deposits) which mature within three months or 
less from the date of acquisition.
Borrowings
Interest bearing bank loans and overdrafts are 
recorded at the proceeds received. 
TEF2681 - AR11 back AW02.indd   49 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
50
Statement of accounting policies
31 March 2011
Financial instruments continued
Trade payables
Trade payables on normal terms are not interest 
bearing and are stated at their nominal value.
l and creditors
When land is purchased on extended payment terms, 
the Group initially records it at its fair value with a land 
creditor recorded for any outstanding monies based 
on this fair value assessment. Fair value is determined 
by using the effective interest method. The difference 
between the nominal value and the initial fair value is 
amortised over the period of the extended credit term 
and charged to finance costs, increasing the value of 
the land creditor so that at the date of maturity, the 
land creditor equals the payment required.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are 
classified according to the substance of the 
contractual arrangements entered into. An equity 
instrument is any contract that evidences a residual 
interest in the assets of the Group after deducting  
all of its liabilities. Equity instruments issued by the 
Group are recorded at the proceeds received, net  
of direct issue costs.
Current assets and liabilities
Assets that are expected to be realised in, or are 
intended for sale or consumption in, the Group's 
normal operating cycle are treated as current even 
to the extent these are expected to be realised after 
twelve months from the balance sheet date. Liabilities 
that are expected to be settled in the Group's normal 
operating cycle are treated as current even though 
these may be due for settlement after twelve months 
from the balance sheet date.
Contingent liabilities
Disclosures are made for each class of contingent 
liabilities at the balance sheet date detailing, where 
practicable, an estimate of its financial effect and an 
indication of uncertainties associated with the timing 
or amount of the outflow, unless the possibility of a 
financial outflow is remote.
Taxation
The tax expense represents the sum of the tax 
currently payable and deferred tax.
The tax currently payable is based on the profits for the 
year. Taxable profit differs from net profit as reported 
in the income statement because it excludes items 
of income or expense that are tax deductible in other 
years and it further excludes items that are never 
taxable or deductible. The Group's liability for current 
tax is calculated using tax rates that have been enacted 
or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all temporary 
differences that have originated but not reversed at 
the balance sheet date where transactions or events 
that result in an obligation to pay more tax in the 
future or a right to pay less tax in the future have 
occurred at the balance sheet date.
A net deferred tax asset is regarded as recoverable 
and therefore recognised only when, on the basis  
of all available evidence, 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 tax is charged or credited in the income 
statement, except when it relates to items charged or 
credited directly to equity, in which case the deferred 
tax is also dealt with in equity.
Share-based payments
In accordance with IFRS 2, the fair value of equity 
settled share options granted is recognised as an 
employee expense with a corresponding increase in 
equity. The fair value is measured as at the date the 
options are granted using the Black-Scholes-Merton 
pricing model and is charged equally over the vesting 
period. The amount recognised as an expense is 
adjusted each reporting period to reflect the actual 
number of options that are expected to vest.
With respect to share-based payments, a deferred 
tax asset is recognised on the relevant tax base. The 
tax base is then compared to the cumulative share-
based payment expense recognised in the income 
statement. Deferred tax arising on the excess of the 
tax base over the cumulative share-based payment 
expense recognised in the income statement has 
been recognised directly in equity.
Own shares
Shares held by employee benefit trusts in order  
to satisfy awards under the Group's share plans  
are included net within equity until such time as 
the shares are vested to the relevant employees.
Critical accounting judgements and 
key sources of estimation uncertainty
Construction contract revenue and  
profit recognition
Contract revenue is recognised from the date 
of exchange of construction contracts at a rate 
equivalent to the value of work undertaken in respect 
of land development. Contract profit on construction 
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Financial Statements
51
contracts is recognised in proportion to revenue only 
to the extent that the total eventual profit on the 
contract can be foreseen with reasonable certainty.
Assessing the percentage complete on each contract 
involves estimation of total expected costs to be 
incurred until the end of the contract. Recognition of 
profit also involves estimation of the total expected 
revenues from each contract and therefore the expected 
profit margin that will be achieved. Judgement is 
required to assess whether the total eventual profit on 
each contract can be foreseen with reasonable certainty.
Carrying value of land and work in progress
Inventories include land and work in progress in 
respect of development sites. On each development 
judgement is required to assess whether the cost of 
land and any associated work in progress is in excess 
of its net realisable value.
Recent accounting developments
During the year IAS 27 (revised), IFRS 3 (revised) 
and amendments to IFRS 1 and IAS 32 have become 
effective and have been adopted by the Group. In 
addition IFRIC 17 and IFRIC 18 have become effective 
for the Group. Adoption of the new and revised 
standards and interpretations has not had any 
significant impact on the amounts reported in these 
financial statements.
Amendments to IFRS 2, IAS 17 and IAS 39 were made 
as part of Annual improvements to IFRSs 2009. Their 
adoption has not had any significant impact on the 
amounts reported in these financial statements but 
may impact the accounting for future transactions 
and arrangements.
At the date of the authorisation of these financial 
statements, there are a number of standards, 
amendments and interpretations that have been 
published but are not yet effective.
The standards, amendments and interpretations that 
are expected to impact upon the Group are:
 y Annual improvements 2010 is a collection of 
amendments to a number of standards as part 
of the IASB programme of making non-urgent but 
necessary amendments to IFRSs. The Group is 
currently assessing the applicability of these annual 
improvements although at present it does not 
believe that they will have a material effect on the 
Group. Annual improvements 2010 apply to the 
Group from 1 April 2011.
 y IFRS 10 ‘Consolidated financial statements’ builds 
on existing principles by identifying the concept 
of control as the determining factor in whether an 
entity should be included within the consolidated 
financial statements. This standard is applicable 
from 1 April 2013 and is expected to have a 
presentational impact on the Group.
 y IFRS 11 ‘ Joint arrangements’ provides for a more 
realistic reflection of joint arrangements by focusing 
on the rights and obligations of the arrangement, 
rather than its legal form. Proportional consolidation 
is no longer allowed. IFRS 11 is applicable from 1 
April 2013 and is expected to have a presentational 
impact on the Group.
 y IAS 28 (revised) ‘Investment in associates and 
joint ventures’ includes the requirement for joint 
ventures to be equity accounted following the issue 
of IFRS 11. This is applicable to the Group from 1 
April 2013 and is expected to have a presentational 
impact on the Group.
The following standards, amendments and 
interpretations are not expected to have any material 
impact on the financial statements of the Group:
 y IFRS 1 (Amendment) ‘First time adoption on 
hyperinflation and fixed dates’ is applicable to the 
Group from 1 April 2012.
 y IFRS 9 ‘Financial instruments’ covers the 
classification and measurement of financial assets 
and liabilities and is the first part in the project to 
replace IAS 39 and is applicable to the Group from 
1 April 2013.
 y IFRS 12 ‘Disclosure of interest in other entities’ 
includes the disclosure requirements for all forms 
of interests in other entities and is applicable to 
the Group from 1 April 2013.
 y IFRS 13 ‘Fair value measurement’ aims to improve 
consistency and reduce complexity of fair value 
measurement and disclosure and is applicable to 
the Group from 1 April 2013.
 y IFRS 27 (revised) ‘Separate financial statements’ is 
applicable to the Group from 1 April 2013.
 y IAS 12 (amendment) ‘Income taxes’ is applicable 
to the Group from 1 April 2012.
 y IAS 24 (Amendment) ‘Related party disclosures’ 
clarifies and simplifies the definition of a related 
party and will require certain entities to make 
additional disclosures and is applicable to the 
Group from 1 April 2011.
 y IFRIC 19 ‘Extinguishing financial liabilities and 
equity instruments’ is applicable to the Group 
from 1 April 2011.
TEF2681 - AR11 back AW02.indd   51 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
52
Notes to the financial statements 
31 March 2011
1 Operating profit
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Operating profit is stated after charging (crediting):
Depreciation
- owned assets 161 249
- hire purchase assets 14 39
Operating lease rentals
- property 161 163
- motor vehicles 397 328
Profit on sale of tangible assets (49) –
Exceptional items (511) 780
The exceptional item for the year ended 31 March 2011 of £0.5 million is a 'bargain gain' arising as a result of 
the purchase of 50% of the ordinary shares of Telford Homes (Creekside) Limited in the period. See note 21 for 
more details.
The exceptional items for the year ended 31 March 2010 of £0.8 million include £0.7 million where the net realisable 
value of land and work in progress on certain developments has been assessed to be lower than the costs 
originally recorded in inventories as a result of the deterioration in market conditions. The remaining £0.1 million 
relates to redundancy costs. 
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
The following has been charged in respect of auditors' remuneration:
Audit and related services (PricewaterhouseCoopers ll P)
Statutory audit of the Parent Company and Group financial statements 66 64
Other services including non-audit services (PricewaterhouseCoopers ll P)
The audit of joint arrangement and subsidiary accounts pursuant  
to legislation
19 16
Other services relating to taxation 25 45
All other services 42 16
Amounts payable to the Company's auditors and their associates in respect of services to the Company, other 
than the audit of the Company's financial statements have not been disclosed as the information is required 
instead to be disclosed on a consolidated basis.
Grant income   
The Group has a total grant allocation from the Homes and Communities Agency of £72.9 million. Grant income  
is recognised as revenue in the income statement on a percentage of completion basis to match with the costs 
it is intended to compensate. The total grant allocation is made up of individual site by site allocations the receipt 
of which is dependent upon constructing the planned affordable housing on each site. The Group had received a 
total of £49.5 million by 31 March 2011 (2010: £41.8 million).
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Financial Statements
53
2 Employee benefit expense
The average monthly number of persons employed by the Group and Company, including executive directors, 
during the year analysed by activity was as follows:  
Year ended 
31 March 2011
Number
Year ended 
31 March 2010
Number
Construction 87 86
Administration 70 65
157 151
The employment costs of all employees included above were: 
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Wages and salaries 7,874 8,513
Social security costs 926 967
Other pension costs – group personal pension arrangements 350 370
9,150 9,850
The Company operates a group personal pension scheme for its employees. At 31 March 2011 payments of 
£45,000 were due to the scheme (2010: £41,000).
Six current directors are accruing benefits under group personal pension arrangements (2010: Six).  
Key management remuneration          
Key management personnel, as defined under IAS 24 (Related Party Disclosures), have been identified as the 
directors as all key decisions are reserved for the Board.       
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Wages and salaries (including bonuses) 1,393 1,607
Social security costs 145 163
Other pension costs 84 81
Share-based payments 6 7
1,628 1,858
Detailed disclosures of directors' individual remuneration, pension entitlement and share options for those 
directors who served in the year are given in the directors’ remuneration report on pages 36 to 37.
TEF2681 - AR11 back AW02.indd   53 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
54
3 Finance income and costs
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Finance income 
Interest income on short-term bank deposits 249 333
Finance costs
Interest payable on bank loans and overdrafts (1,106) (1,651)
Hire purchase finance charges (2) –
(1,108) (1,651)
Net finance costs (859) (1,318)
4 Taxation
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
United Kingdom corporation tax on profits for the year 675 2,070
Adjustment in respect of prior periods 20 31
Total current taxation 695 2,101
Deferred taxation (note 13) 47 (82)
Income tax expense 742 2,019
In addition to the amount charged to the income statement, deferred tax of £12,000 relating to share-based 
payments was charged directly to equity (2010: £14,000 credited).
Reconciliation of effective tax rate     
The tax assessed for the year is lower (2010: lower) than the theoretical amount that would arise using the 
weighted average tax rate applicable to profits of the consolidated entities. The differences are explained below:
Profit before income tax 3,034 7,338
Profit on ordinary activities before taxation at the weighted  
average rate of corporation tax
830 2,055
Effects of:
Income not subject to taxation (143) –
Adjustment in respect of prior periods 20 31
Expenses not deductible for tax purposes 101 41
Tax relief on land remediation costs (66) (108)
Income tax expense 742 2,019
The weighted average applicable tax rate was 27.4% (2010: 28.0%).
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Financial Statements
55
During the year, as a result of the change in the United Kingdom corporation tax rate from 28% to 26% that was 
substantively enacted and will be effective from 1 April 2011, the relevant deferred tax balances have been re-
measured. Deferred tax expected to reverse in the year to 31 March 2012 has been measured using the effective 
rate that will apply in the United Kingdom for the period (26%).
Further reductions to the United Kingdom corporation tax rate have been announced and are expected to be 
included in future finance bills to reduce the rate by 1% per annum to 23% by 1 April 2014. The changes had 
not been substantively enacted at the balance sheet date and therefore are not recognised in these financial 
statements. The impact of the proposed changes are not expected to be material to the Group.
5 Dividend paid
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Prior year final dividend paid in July 2010 of 1.25p (July 2009: nil) 621 –
Interim dividend in January 2011 of 1.25p (January 2010: 0.75p) 606 295 
1,227 295
The final dividend proposed for the year ended 31 March 2011 is 1.25p per ordinary share. This dividend was 
declared after 31 March 2011 and as such the liability of £612,500 has not been recognised at that date.
6 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the 
weighted average number of ordinary shares outstanding during the year, excluding those held in the Share 
Incentive Plan. For diluted earnings per share, the weighted average number of ordinary shares in issue is 
adjusted to assume conversion of all dilutive potential ordinary shares.    
Earnings per share have been calculated using the following figures:     
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Weighted average number of shares in issue 47,886,813 38,804,588
Dilution – effect of share schemes 675,778 689,918
Diluted weighted average number of shares in issue 48,562,591 39,494,506
Profit on ordinary activities after taxation £2,292,000 £5,319,000
Earnings per share:
Basic 4.8p 13.7p
Diluted 4.7p 13.5p
TEF2681 - AR11 back AW02.indd   55 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
56
7 Investments 
Investments in subsidiary undertakings
2011 
£000
2010 
£000
Cost
At 1 April 637 3
Additions – 634
Disposals – –
At 31 March 637 637
Investments in jointly controlled entities
2011 
£000
2010 
£000
Cost
At 1 April 1 1
Additions – –
Disposals – –
At 31 March 1 1
Investments in subsidiary undertakings
The subsidiary undertakings which principally affect profits and net assets of the Group comprise: 
Share of 
ordinary
 capital held
by the Group
Country of
 registration
Accounting 
date
Principal 
activity
Telford Homes (Romford) Limited 100% England 31 March Property
 development
Telford Homes (Properties) Limited 100% England 31 March Property
 development
Telford Homes (Investments) Limited 100% England 31 March Property 
development
Telford Homes (Creekside) Limited 100% Scotland 31 March Property
 development
Telford Homes Contracting Limited 100% England 31 March Contracting
On 17 September 2010 the Group acquired a further 50% of the issued share capital of Telford Homes (Creekside) 
Limited increasing its holding from 50% to 100%. See note 21 for more details.
A full list of subsidiary undertakings is available on request from the Group’s registered office.
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Financial Statements
57
Investments in jointly controlled entities     
The Group’s investments in jointly controlled entities comprise:     
Share of 
ordinary
 capital held
by the Group
Country of
 registration
Accounting 
date
Principal 
activity
Telford Homes (Stratford) Limited 50% Scotland 31 March Property
 development
Bishopsgate Apartments LLP 50% England 31 March Property
 development
Mulatel LLP 50% England 31 March Property 
development
Investments in jointly controlled entities are accounted for using proportional consolidation.
The Group’s share of the assets and liabilities and the income and expenses of jointly controlled entities is as follows: 
 
31 March 2011
£000
31 March 2010
£000
Current assets 18,981 43,123
Current liabilities (17,213) (39,682)
Net assets of jointly controlled entities 1,768 3,441
Year ended 
31 March 2011
£000
Year ended 
31 March 2010
£000
Income 2,722 4,889
Expenses (2,052) (5,171)
Share of results of jointly controlled entities 670 (282)
The share of results of jointly controlled entities for the year ended 31 March 2011 includes 50% of Telford Homes 
(Creekside) Limited to 17 September 2010, the date the Company increased its shareholding in Telford Homes 
(Creekside) Limited from 50% to 100% (note 21).
TEF2681 - AR11 back AW02.indd   57 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
58
8 Property, plant and equipment
Group and Company
l easehold
£000
Plant and
 machinery 
£000
Motor 
vehicles
 £000
Total
£000
Cost
At 1 April 2009 262 1,114 258 1,634
Additions – 48 2 50
Disposals – (13) – (13)
At 31 March 2010 262 1,149 260 1,671
Additions – 100 56 156
Disposals – (20) (183) (203)
At 31 March 2011 262 1,229 133 1,624
Depreciation
At 1 April 2009 84 713 219 1,016
Charge 26 223 39 288
Disposals – (13) – (13)
At 31 March 2010 110 923 258 1,291
Charge 27 134 14 175
Disposals – (17) (183) (200)
At 31 March 2011 137 1,040 89 1,266
Net book value
At 31 March 2010 152 226 2 380
At 31 March 2011 125 189 44 358
Motor vehicles with a net book value of £44,000 are held under hire purchase arrangements (2010: £nil).
Depreciation of £14,000 was charged during the year on these assets (2010: £39,000).
Authorised future capital expenditure that was contracted, but not provided for, in these financial statements 
amounted to £nil (2010: £nil).
9 Inventories
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Development properties 125,181  120,047  58,300  77,953 
All inventories are considered to be current in nature. The operating cycle is such that a proportion of inventories 
will not be realised within twelve months. It is not possible to determine with accuracy when specific inventory will 
be realised as this will be subject to a number of issues such as consumer demand and planning permission delays.
Included within development properties for the Group are freehold interests held for future sale of £5,916,000 
(2010: £5,012,000). Included within development properties for the Company are freehold interests held for 
future sale of £5,688,000 (2010: £5,012,000).
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Financial Statements
59
The value of inventories expensed in cost of sales in 2011 was £104,243,000 (2010: £136,906,000). Costs 
capitalised during the year include interest of £1,554,000 (2010: £1,671,000), which is capitalised based on the 
cost of the site specific borrowings.
During the year the Group conducted a review of the net realisable value of its inventories. Where the estimated 
net realisable value was less than its carrying value within the balance sheet the Group has written down the 
value of inventories. The total amount recognised as an expense was £84,000 (2010: £953,000).
10 Trade and other receivables
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Current receivables
Amounts recoverable on contracts 11,105 3,892 11,037 3,892
Amounts owed by Group undertakings – – 17,514 7,210
Amounts owed by jointly controlled 
entities
244 1,601 7,862 14,801
Trade receivables 108 71 108 71
Other receivables 559 637 389 576
Prepayments and accrued income 2,195 1,437 3,208 577
14,211 7,638 40,118 27,127
Amounts recoverable on contracts
Contract revenue of £46,152,000 (2010: £61,194,000) has been recognised by the Group in the year. 
In relation to contracts in progress at the balance sheet date:
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Contracts where costs incurred plus 
recognised profits exceed payments  
to date included in receivables
11,105 3,892 11,037 3,892
Contracts where payments to date 
exceed costs incurred plus recognised 
profits included in payables
(5,786) (9,804) (4,529) (7,447)
5,319 (5,912) 6,508 (3,555)
Total costs incurred plus recognised  
profit on contracts
183,247 126,647 148,298 108,888
Payments to date (177,928) (132,559) (141,790) (112,443)
5,319 (5,912) 6,508 (3,555)
At 31 March 2011 retentions held by customers for contract work performed by the Group amounted to 
£1,977,000 (2010: £1,954,000). 
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for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
60
11 Cash and cash equivalents
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Cash at bank and in hand 18,837 33,642 17,575 25,127
12 hire purchase liabilities
Group and Company
31 March 2011
£000
31 March 2010
£000
Gross hire purchase liabilities:
Due within one year 17 –
Due in more than one year and less than five years 20 –
37 –
Less future interest (2) –
Net hire purchase liabilities 35 –
Net hire purchase liabilities are repayable as follows:
Due within one year 16 –
Due in more than one year and less than five years 19 –
35 –
13 Deferred income tax
Group and Company
31 March 2011
£000
31 March 2010
£000
Deferred tax assets 92 157
Deferred tax liabilities (42) (48)
Deferred tax assets 50 109
As permitted by IAS 12 (Income Taxes), certain deferred tax assets and liabilities have been offset as they arise 
in the same tax jurisdiction and are settled on a net basis. 
The movement on the deferred income tax account is as follows:
31 March 2011
£000
31 March 2010
£000
Brought forward 109 13
(Charged) credited to the income statement (47) 82
(Charged) credited directly to equity (12) 14
50 109
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Financial Statements
61
The movement in deferred tax assets and liabilities during the year is as follows:
Capital
 allowances
£000
Share-based
 transactions
£000
land 
remediation
 timing
 differences
£000
Total
£000
At 1 April 2009 69 (49) (7) 13
Credited to the income statement 43 34 5 82
Credited directly to equity – 14 – 14
At 31 March 2010 112 (1) (2) 109
(Charged) credited to the income statement (55) 6 2 (47)
Charged directly to equity – (12) – (12)
At 31 March 2011 57 (7) – 50
The aggregate deferred tax credited directly to equity amounts to £2,000 (2010: £14,000).
14 Trade and other payables
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Trade payables 7,610 5,835 7,201 5,114
Amounts due to jointly controlled entities – – – 1,963
Amounts due to subsidiaries – – 706 –
Amounts recoverable on contracts 5,786 9,804 4,529 7,447
Deposits received in advance 6,854 3,729 4,623 2,906
Social security and other taxes 351 553 351 553
Accrued expenses 7,953 7,056 7,090 5,420
Land creditors – 88 – 88
 28,554  27,065  24,500  23,491
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for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
62
15 Borrowings 
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Borrowings 64,877 70,800 30,786 46,985
Further information on borrowings is given in note 20.
Included within borrowings at 31 March 2010 is a redemption premium payable as a result of the acquistion of 
Clifford Contracting Limited. This was paid on 30 September 2010 (note 22).
16 Share capital
Group and Company
31 March 2011
£000
31 March 2010
£000
Authorised
100,000,000 ordinary shares of 10p each 10,000 10,000
Allotted, called up and fully paid
49,000,000 ordinary shares of 10p each (2010: 49,775,000) 4,900 4,978
On 30 September 2010, 1,130,089 ordinary shares were repurchased by the Company from the vendors of 
Clifford Contracting Limited for £1. These shares were cancelled on 30 September 2010 at 56p per ordinary 
share (note 22). 
On 29 March 2011, 355,089 ordinary shares were issued at 77p to Telford Homes Trustees Limited to satisfy the 
requirements of the Share Incentive Plan (note 17).
Ordinary shares may be issued in the future to satisfy the exercise of outstanding share options (note 17). 
Details of own shares held within employee benefit trusts are disclosed in note 17. 
All shares rank equally in respect of shareholder rights.
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Financial Statements
63
17 Employee Share Schemes
Telford homes Plc Employee Share Option Scheme
The Group operates both an approved share option scheme and an unapproved share option scheme. Awards 
under each scheme are made periodically to new employees. All schemes are equity-settled and options can 
normally be exercised three years after the grant date.
A charge is made to the income statement to reflect the calculated fair value of employee share options over and 
above the exercise price paid by employees. This charge is calculated at the date of grant of the options and is 
charged equally over the vesting period. The corresponding adjustment to equity is made directly to the profit 
and loss reserve. In accordance with IFRS 2 (Share-based payments), only costs relating to options issued after 
7 November 2002 have been charged to the income statement.
The Group has used the Black-Scholes-Merton formula to calculate the fair value of outstanding options. 
Individual calculations have been performed for groups of share options with differing exercise prices and dates. 
The assumptions applied to the Black-Scholes-Merton formula for share options issued and the fair value per 
option are set out below. There were no share options granted in the year ending 31 March 2011.
2011 2010
Expected life of options based on options exercised to date – 4 years
Volatility of share price based on three year share price history – 105%
Dividend yield – 2%
Risk free interest rate – 1%
Weighted average share price at date of grant – 64p
Weighted average exercise price – 64p
Weighted average fair value per option – £0.41
Expected volatility was determined by considering the volatility levels historically for the Group. Volatility in more 
recent years is considered to have more relevance than earlier years for the period reviewed.
The charge calculated for the year ended 31 March 2011 is £264,000 (2010: £283,000).
A reconciliation of option movements during each period is shown below:
2011 2010
Number
 000’s
Weighted
 average
 exercise 
price
Number
 000’s
Weighted
 average
 exercise 
price
Outstanding at 1 April 2,404 74p 2,244 161p
Granted in the year – – 1,838 64p
Forfeited in the year (74) 92p (1,678) 179p
Exercised in the year – – – –
Outstanding at 31 March 2,330 74p 2,404 74p
Exercisable at 31 March 458 100p 402 85p
The aggregate fair value of options granted in the year was £nil (2010: £754,000).
No share options were exercised in the year ended 31 March 2011 or the year ended 31 March 2010.
In the year ended 31 March 2010 1,598,369 of forfeited options were replaced with 1,662,000 new options with an 
incremental fair value of £412,945.
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for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
64
17 Employee Share Schemes continued
Telford homes Plc Employee Share Option Scheme continued
At 31 March 2011 outstanding options granted over 10p ordinary shares were as follows:
Share option scheme Option price Number Date exercisable
Group approved 138.5p 21,660 17 May 2008 to 17 May 2015
213.5p 56,204 14 Feb 2011 to 14 Feb 2018
110p 109,088 12 June 2011 to 12 June 2018
64p 1,762,000 20 July 2012 to 20 July 2019
Group unapproved 60.5p 50,414 5 Mar 2005 to 5 Mar 2012
75p 220,000 1 Oct 2005 to 1 Oct 2012
74.5p 59,732 20 Feb 2006 to 20 Feb 2013
138.5p 50,542 17 May 2008 to 17 May 2015
Telford homes Plc Share Incentive Plan
During the year ended 31 March 2004 Telford Homes Plc set up a Share Incentive Plan (SIP) for the benefit of 
all of the employees of the Group. This SIP has been approved by the Inland Revenue and confers certain tax 
advantages for participating employees.
The SIP provides for employees to purchase shares up to a value of £1,500 in each tax year. These shares are 
known as ‘Partnership shares’. Partnership shares are matched on a one for one basis by ‘Matching shares’ 
provided by the Group subject to the shares remaining in the SIP for a period not less than three years. Dividends 
are paid on both Partnership and Matching shares and these are allocated to employees as ‘Dividend shares’.
The Group has set up a trust to administer the SIP and to hold shares on behalf of individual employees. This trust 
is an entirely separate entity to the Group and is managed by a corporate trustee, Telford Homes Trustees Limited. 
The costs associated with the trust are paid for by the Group and the Group finances all share purchases.
The trust has distributed shares as Partnership shares and Dividend shares to employees participating in the 
scheme. These shares remain in the trust until such time as an employee withdraws from the SIP. Further shares 
have been allocated to employees as Matching shares and the cost of these shares is being written off over the 
three year holding period. The charge in the year ended 31 March 2011 is £138,000 (2010: £126,000).
During the year ended 31 March 2011 the trust acquired 355,089 shares at 77p in March 2011. At 31 March 2011 the 
trust remains interested in 52,176 shares (2010: 110,450) which have not been allocated to employees and a further 
967,861 (2010: 867,533) that have been allocated to employees as Matching shares but have not yet vested. Shares 
in which the trust remains interested do not rank for dividends and all shares that have not yet vested do not count 
in the calculation of the weighted average numbers of shares used to calculate earnings per share. 
Shares held by the SIP are recognised as a deduction from shareholders’ funds. The value of these shares at 
31 March 2011 was £680,758 (2010: £737,223). Movements in the profit and loss reserve relating to the SIP are 
shown in the statement of changes in equity. 
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Financial Statements
65
Telford homes Plc 2006 Deferred Payment Share Purchase Plan
During the year ended 31 March 2007 Telford Homes Plc set up a Deferred Payment Share Purchase Plan (DPSPP) 
for the benefit of selected senior employees. An employee benefit trust (the Telford Homes Plc 2006 Employee 
Benefit Trust) was set up with Abacus Corporate Trustee Limited acting as trustee.
Participants in the DPSPP are offered a loan by the trustee to enable them to subscribe for a specified number of 
shares in the Group at market value. This loan is interest free repayable on or before the repayment date which 
is normally 20 years from the date of the loan or on disposing of the shares. The loan has a limited recourse 
such that repayment is limited to the value of the shares on the repayment date. The Group will lend the trustee 
sufficient funds to enable the trustee to provide the loans to individual participants. All shares acquired under 
the DPSPP will be subject to a three year vesting period and are held by the trustee for the benefit of the 
participants. Offers to participants will be made periodically at the discretion of the directors of Telford Homes 
Plc.
In September 2006 selected employees were offered, and subscribed for, a total of 550,000 shares at the market 
value of 260p. These shares were issued on 9 November 2006. On this date the Group provided a loan to the 
trustee of £1,430,000 to enable the trustee to provide a loan to each of the participants. This loan is repayable 
at the earlier of the sale of the vested shares and November 2026 and has been recognised as a deduction from 
shareholders’ funds in the statement of changes in equity.
In December 2007 selected employees were offered, and subscribed for, a total of 160,000 shares at the market 
value of 244p. These shares were issued on 14 December 2007. On this date the Group provided a loan to the 
trustee of £390,400 to enable the trustee to provide a loan to each of the participants. This loan is repayable at 
the earlier of the sale of the vested shares and December 2027 and has been recognised as a deduction from 
shareholders’ funds in the statement of changes in equity.
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for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
66
18 Commitments and contingent liabilities
Commitments
At 31 March, the Group and Company had outstanding commitments for future minimum lease payments under 
non-cancellable operating leases which fall due as follows:
Property leases Other leases
2011
£000
2010
£000
2011
£000
2010
£000
Within one year 184 184 310 235
Between one and five years 660 737 387 116
Over five years – 107 – –
844 1,028 697 351
Operating lease payments represent rentals payable by the Company for its office premises and motor vehicles.
Contingent liabilities    
On 23 August 2005 the Company entered an agreement to purchase the site of the former halls of residence of 
Queen Mary and Westfield College in South Woodford. At 31 March 2011 £31.6 million (2010: £26.8 million) had 
been paid for the site. Further payments are contingent on future sales at the development and are estimated to 
be approximately £6.3 million (2010: £11 million).
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Financial Statements
67
19 Related party transactions
The Board and certain members of senior management are related parties within the definition of IAS 24  
(Related Party Disclosures). 
There have been no transactions between key management personnel and the Group in the year ended 
31 March 2011.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on 
consolidation. The amounts outstanding from subsidiaries to the Company at 31 March 2011 totalled £17,514,000 
(2010: £7,210,000).
The Company has invoiced jointly controlled entities and subsidiaries £26,638,000 in the year to 31 March 2011 
for construction services (2010: £20,970,000). The Company has been invoiced £1,907,000 in the year to 
31 March 2011 by subsidiaries for construction services (2010: £6,115,000).
The amounts outstanding from jointly controlled entities to the Company at 31 March 2011 totalled £489,000 
(2010: £3,224,000) in respect of construction services. In addition a net total of £7,373,000 was owed to the 
Company at 31 March 2011 from jointly controlled entities in respect of shareholder loans (2010: £9,614,000).
After proportional consolidation of the jointly controlled entities the Group has amounts outstanding from jointly 
controlled entities totalling £244,000 at 31 March 2011 (2010: £1,601,000). 
The Company received a dividend in the year of £1,959,000 (£3,918 per ordinary share) from its jointly controlled 
entity Telford Homes (Stratford) Limited.
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for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
68
20 Financial instruments
Categories of financial assets and financial liabilities are as follows:
Group Company
31 March 2011
£000
31 March 2010
£000
31 March 2011
£000
31 March 2010
£000
Financial assets
l oans and receivables:
Trade receivables 108 71 108 71
Other receivables 559 637 389 576
Cash and cash equivalents 18,837 33,642 17,575 25,127
19,504 34,350 18,072 25,774
Financial liabilities
Amortised cost:
Trade payables 7,610 5,835 7,201 5,114
Land creditors – 88 – 88
Borrowings 64,877 70,800 30,786 46,985
Hire purchase liabilities 35 – 35 –
72,522 76,723 38,022 52,187
The Group does not enter into any derivative transactions and has no direct exposure to exchange rate 
movements as its trade takes place entirely within the United Kingdom.
Trade and other receivables, trade payables and hire purchase liabilities
The fair value of trade and other receivables, trade payables and hire purchase liabilities at 31 March 2011 is 
equal to the carrying value stated in the balance sheet at that date. There are no amounts included within trade 
and other receivables currently overdue (2010: £23,000). Hire purchase liabilities include £19,000 (2010: £nil) due 
after more than one year. All other trade and other receivables and trade payables are due within one year.
l and creditors
Land purchases made on deferred payment terms are recorded at fair value using the effective interest method 
in accordance with IAS 39 (Financial instruments - recognition and measurement). The difference between the 
fair value and nominal value is amortised over the deferment period as financing costs, increasing the land 
creditor to its full cash settlement value on the payment date. The interest rate used in the year to 31 March 2011 
was 3% (2010: 3%). 
Borrowings
The Group uses loan finance, all of which is denominated in sterling, to acquire development land and undertake 
site construction. On 31 March 2011 the Group signed a £70 million loan facility which extends to 30 September 
2014 with a club of three banks being The Royal Bank of Scotland, HSBC and Santander. The debt drawn under 
this facility is secured against a portfolio of land and development sites owned by the Group. At 31 March 2011 
the Group had utilised £31.9 million of this facility leaving an unutilised balance of £38.1 million. Interest is being 
charged on this facility at LIBOR plus a margin of 3.5%.
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Financial Statements
69
The Group’s subsidiary, Telford Homes (Creekside) Limited, has loan facilities with The Royal Bank of Scotland 
totalling £57.7 million in respect of the purchase of development land and construction in Greenwich. At 
31 March 2011 Telford Homes (Creekside) Limited had utilised £34.0 million of this facility leaving an unutilised 
balance of £23.7 million. Interest is charged at LIBOR plus a margin of 2.25% on the majority of the facility. 
Included within the £57.7 million is a mezzanine loan facility of £8.0 million and interest on this loan is charged at 
LIBOR plus a margin of 5%.
In addition the Group’s jointly controlled entity, Bishopsgate Apartments LLP, has a loan facility with Allied Irish 
Bank of £15.0 million in respect of the purchase of development land in Bethnal Green Road. At 31 March 2011 
Bishopsgate Apartments LLP had utilised all £15.0 million of this facility. The Group has recorded its 50% share of 
the loan in its balance sheet at 31 March 2011. Interest is charged at LIBOR plus a margin of 4.5%. This facility is due 
for repayment on 14 December 2011.
Market risk     
The Group is exposed to the financial risk of changes in interest rates both in terms of changes in the base rate 
and LIBOR and in terms of individual banks attitude to market risk and their application of either base rate or 
LIBOR to new facilities and the margin applied to each new facility.
In order to assess the risk interest costs are forecast on a monthly basis over a five year period using estimates 
of likely changes in rates and actual costs are compared to this forecast. Volatility of interest costs remained at 
an acceptable level in the year ended 31 March 2011 as LIBOR remains at a historically low level. Interest on all 
facilities currently held is charged at floating interest rates and the Group assesses the requirement for fixing 
interest rates on a regular basis. 
The effect on the income statement of a 1% rise and a 1% fall in interest rates has been calculated to assess interest 
rate sensitivity. Based on average monthly borrowings in the year, a 1% rise in interest rates would have a negative 
effect of £504,000 before tax (2010: £845,000), a 1% fall in interest rates gives the same but opposite effect.
Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going 
concern in order to provide returns for shareholders and meet its liabilities as they fall due whilst maintaining 
an appropriate capital structure to reduce the costs of capital. The Group considers its capital to be all of the 
components of net assets.
The Group ensures that there are appropriate controls over the purchase of land and levels of work in progress in 
the business in order to appropriately manage its capital. In addition, the other methods by which the Group can 
manage its short-term and long-term capital structure include adjusting the level of ordinary dividends paid to 
shareholders, issuing new share capital and arranging debt.
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their obligations.
Trade and other receivables includes amounts recoverable on contracts which are due from housing associations 
and balances due from other Group undertakings. The Group considers the credit quality of the various debtors 
to be good in respect of the amounts outstanding and therefore credit risk is considered to be low. 
Surplus cash is held in secure bank deposit accounts with Allied Irish Bank, The Royal Bank of Scotland, Santander, 
HSBC, Barclays Bank and Investec Bank plc. 
TEF2681 - AR11 back AW02.indd   69 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011
Financial Statements
Notes to the financial statements
31 March 2011
70
20 Financial instruments continued
l iquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations as they 
fall due.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows over a five year 
period and performing sensitivity analysis on these forecasts. The forecasts are necessarily subject to a number 
of assumptions and judgements and these are tested on a reasonable basis by the sensitivity analysis. These 
forecasts and the related sensitivity analysis are reviewed by the directors in detail on a monthly basis. In addition 
all of the forecasts and supporting calculations are made available to each bank funding the Group on a monthly 
basis. The current forecasts show positive cash balances beyond the next twelve months even where this is 
subjected to sensitivity testing. 
The Group utilises bank facilities to ensure that adequate funding is available to cover working capital 
requirements and the directors consider that existing facilities are sufficient to cover funding requirements in the 
foreseeable future both where these have already been utilised and where they are currently unutilised. Where 
facilities are due to expire within one year this is due to the timing of the relevant developments and therefore 
the expected repayment dates. In all of these cases the directors are satisfied that the loans are expected to be 
repaid by the date the facility expires.
The Group’s bank facilities are subject to a number of general and financial covenants which are tested 
periodically by each bank. In all cases the directors have assessed whether the Group will remain in compliance 
with the covenants for at least twelve months after signing the financial statements and are satisfied that there 
will be no breach of the covenants. 
The maturity profile of the anticipated future cash flows based on the earliest date on which the Group can be 
required to pay financial liabilities on an undiscounted basis (including future interest payments using the latest 
applicable rates) is as follows:
Trade 
payables
£000
l and
creditors
£000
Borrowings
 £000
 hire purchase
liabilities
£000
Total
£000
Within one year 7,610 – 20,311 16 27,937
More than one year 
and less than two years
– – 6,147 19 6,166
More than two years 
and less than five years
– – 45,615 – 45,615
31 March 2011 7,610 – 72,073 35 79,718
Trade 
payables
£000
l and
creditors
£000
Borrowings
 £000
 hire purchase
liabilities
£000
Total
£000
Within one year 5,835 88 13,280 – 19,203
More than one year 
and less than two years
– – 47,674 – 47,674
More than two years 
and less than five years
– – 13,485 – 13,485
31 March 2010 5,835 88 74,439 – 80,362
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Financial Statements
71
21 Business combination
On 17 September 2010, the Group acquired 50% of the issued share capital of Telford Homes (Creekside) Limited, 
a property development company currently developing land in Greenwich, London. Following the acquisition, the 
Group owns 100% of the ordinary shares of Telford Homes (Creekside) Limited and has sole control of the company. 
The book value and fair value of the assets and liabilities of Telford Homes (Creekside) Limited at the date of 
acquisition are set out below:
Book and
 fair value
£000
50%
acquired
£000
Inventories 58,716 29,358
Cash 2,414 1,207
Trade and other payables (28,102) (14,051)
Borrowings (32,006) (16,003)
Net assets 1,022 511
The total consideration paid for 50% of the ordinary shares in issue was £500 in cash. As a result, the Group 
recognised a ‘bargain gain’ of £510,500 representing 50% of the fair value of the net assets of Telford Homes 
(Creekside) Limited on 17 September 2010 less the £500 purchase price. This gain is included in exceptional items 
in the results to 31 March 2011. The assets and liabilities acquired all relate to the company’s site in Greenwich and 
will be realised as the development is completed over the next two years.
There was no difference between the fair value and the book value of the assets and liabilities of Telford Homes 
(Creekside) Limited at the date of acquisition and therefore no gain or loss arose on the existing shareholding.
This acquisition contributed additional revenue of £9.7 million and profit before tax of £0.9 million to the Group  
for the period between the date of acquisition and the balance sheet date. Had the acquisition occurred on  
1 April 2010, the consolidated income statement would have included additional revenue of £11.1 million and 
profit before tax of £0.8 million. 
Acquisition related costs amounting to £2,000 are included in administrative costs in the Group income statement.
22 Repurchase and cancellation of shares
On 30 September 2010 the Company repaid all outstanding loan notes in relation to the acquisition of Clifford 
Contracting Limited which took place on 23 June 2009. This final repayment amounted to £4.3 million.
As a result of the loan notes being repaid the Company immediately exercised its option to repurchase  
1,130,089 ordinary shares from the vendors of Clifford Contracting Limited for a total sum of £1. These 
repurchased shares were cancelled on 30 September 2010.
TEF2681 - AR11 back AW02.indd   71 13/06/2011   10:50 TEl FORD h OMES Plc  Annual Report & Accounts 
for the year ending 31 March 2011 72
Company Secretary
Sara Debenham
Registered Number
 4118370
Registered Office
First Floor
Stuart House
Queensgate
Britannia Road
Waltham Cross
Hertfordshire EN8 7TF
Auditors
PricewaterhouseCoopers ll P 
10 Bricket Road 
St Albans
Hertfordshire AL1 3JX
Bankers
The Royal Bank of Scotland  
1st Floor 
Conqueror House  
Vision Park  
Chivers Way  
Cambridge CB4 9BY
Santander Corporate Banking 
1 Dover Street 
London W1S 4LA
hSBC Bank Plc 
70 Pall Mall 
London SW1Y 5EZ
Allied Irish Bank 
The Manor House  
High Street 
Wanstead 
London E11 2RL
Barclays Bank  
Corporate Banking Centre  
PO Box 729  
Eagle Point  
1 Capability Green  
Luton LU1 3US
Solicitors
S J Berwin  
10 Queen Street Place 
London  EC4R 1BE
Nominated Broker
Shore Capital Stockbrokers l imited 
Bond Street House 
14 Clifford Street 
London  W1S 4JU
Financial & Nominated Advisor
Shore Capital and Corporate limited  
Bond Street House 
14 Clifford Street 
London W1S 4JU
Registrars
Capita Registers 
Northern House 
Woodsome Park 
Fenay Bridge  
Huddersfield 
West Yorkshire HD8 0GA
Financial Public Relations
Abchurch Communications l imited  
125 Old Broad Street  
London EC2N 1AR
Company Information 
TEF2681 - AR11 back AW02.indd   72 13/06/2011   10:50 Aerial view of the City of London showing  
a Computer Generated Image of Avant-garde 
in the foreground.
BuILdInG
focused 
TEF2681 - AR11 cover AW02.indd   2 09/06/2011   16:41 Annual Report & Accounts
BuILdInG
growth
TELFORd HOMES  Plc
2011
Annual Report & Accounts 2011
Telford Homes Plc
First Floor
Stuart House
Queensgate
Britannia Road
Waltham Cross
Hertfordshire EN8 7TF
TEF2681 - AR11 cover AW02.indd   1 09/06/2011   16:41