annual report and accounts 2005
graingertrustplc 1 The opportunities l 14 Highlights 2005 l 15 The results l 16 Facts and figures l 18 Chairman’s statement 
20 Chief executive’s statement l 25 Operating and financial review l 34 Corporate social responsibility report
44 Board members l 46 Corporate governance report l 52 Report of the remuneration committee l 59 Directors’ report 
62 Independent auditors’ report l 64 Financial statements l 70 Notes to the financial statements l 95 Five-year record
96 Shareholders’ information l 97 Advisers l 98 Glossary of terms l 100 Corporate addresses 1
With over 12,000 homes, Grainger is the largest quoted
residential property owner in the UK. While acquiring,
managing and selling these properties is the mainstay of 
our business, we’re increasingly active in other areas such 
as equity release, regeneration, property development, 
asset management and housebuilding. We are also
expanding into residential development and investment 
in the newly enlarged EU. 
theopportunities
A strong core business with attractive prospects for diversification 2 Grainger Trust plc Annual report and accounts 2005
buyingsellingletting
Managing our core business while expanding into new forms of ownership
Our core business is owning, managing and trading residential properties that are subject
to regulated tenancies. Under this arrangement, the tenant can stay in the property for life
and pays us below-market rent. We buy these properties at less than the vacant-possession
value to reflect the low yield and the fact that the tenant has lifetime rights of occupation.
When the tenant leaves, we can then sell the property into the owner-occupier market.
These properties therefore provide us with two sources of income – rents and trading
profits on sale. The size and geographic spread of the portfolio (some 8,000 units across
the UK) and the fact that properties are bought and sold over a long period of time help 
to protect us against the risks of home ownership – particularly short-term or localised 
falls in prices. 
Legislative changes in 1988 meant that no new regulated tenancies could be created 
after that date. As a result, the overall stock is falling. Although we make every effort to
replace the regulated properties that become vacant and are sold, the overall portfolio will
decline over time. We are using our existing management and trading skills to engage in
other areas of residential ownership such as equity release and market lets. Our market-let
portfolio also utilises our skills in refurbishment, lettings and targeted sales in order to
maintain performance and protect against the depreciation of the stock. 
Property trading
During the year our sales and acquisitions team
have sold 913 residential units and purchased
1,254 including the assets purchased through 
the City North acquisition.
HOME REVERSIONS  £196m
ASSURED TENANCIES  £188m
OTHER* £80m
VACANT  £59m
REGULATED AND APT  £984m
Residential property
portfolio
* includes share of joint ventures City North 
In April 2005 we completed the acquisition of
the AIM-listed company, City North Group plc
(‘CNG’), for £61m. CNG’s portfolio consists of
around 350 market-rented residential units worth
about £90m along with approximately £19m of
development assets. All its properties are in
Central London. The acquisition helped to lift 
the value of Grainger’s market-rented property 
to about £200m. This now has the critical mass
that offers opportunities to create a fund for
third-party investors which is now in the process
of being formed. 
Easton Neston 
In two separate purchases in April and
September 2005, we acquired a substantial part
of the Easton Neston Estate in Northamptonshire.
The total cost was around £10.25m and the
purchase provides a great mix of short and 
long-term opportunities for Grainger. The estate’s
17 cottages and traditional tenanted farm fit well
within our core business while the farm buildings
and vacant farmland offer excellent potential for
residential conversion. 
The Ancient Order of Forresters 
In January 2005 we bought a UK-wide 
portfolio of 241 houses and flats from The
Ancient Order of Forresters Friendly Society
(AOFFS) for £17m. A large proportion of these
units had been let to regulated tenants and
former employees and AOFFS was concerned 
to protect their interests while reinvesting in
commercial property with less management
responsibility. As the new owner, Grainger has
established a strategy that respects the needs 
of the long-term tenants.  Tenants Guide
We have developed a
comprehensive Tenants
Guide that provides clear
and easy advice at each
stage of their tenancy. 
4 Grainger Trust plc Annual report and accounts 2005
managingmaintainingrepairing
Responsive and responsible landlords of all types of residential property
One of Grainger’s strengths is the ability to manage property on a large scale. Operating
from six offices, our property management teams look after more than 12,000 homes
across the UK and they are trained to understand all types of property and tenure. 
Property management is a demanding role requiring complex daily decisions. It’s important
we fulfil our obligations as landlords and give excellent service to our customers while at
the same time protecting the value of our assets and enhancing the performance of our
portfolio. Our property management professionals are skilled at balancing these demands. 
In the past year we’ve launched a number of initiatives to improve the service to our
tenants. We’ve published a Tenants Guide, became a voluntary member of the Housing
Help at Hand
Help at Hand are a lifestyle management service who 
are able to assist with a variety of requests such as local
services, party planning or obtaining competitive utility
company quotes. We are now offering their services free 
of charge to our market-let tenants, particularly to help
them with the stresses of moving to a new property. F
A
C E
D
B
LONDON  £636m
OTHER SOUTH  £320m
MIDLANDS/EAST £299m
NORTH AND SCOTLAND  £218m
43%
22%
20%
15%
5
a network of six offices 
A Altrincham
B Putney
C Harborne
D London
E Martlesham
F Newcastle upon Tyne
Tenanted Residential
Regional investment 
value summary
Protecting our assets
During the year we spent
over £13.5m on repairing
and maintaining our
portfolio. As well as
protecting the long-term
value of our assets, this
investment enhances our
reputation as landlords and
strengthens our case in
bidding for new portfolios. 
Ombudsman and teamed up with Help at Hand to offer an add-on service in lifestyle
management. We’re also promoting an energy efficiency scheme to help tenants to access
funding for central heating and cavity wall and loft insulation.
As well as managing our own property portfolio, we also offer our asset management
expertise to third-party partners. These include the Schroders ResPUT residential investment
fund and Grainger Geninvest LLP , a joint venture between Grainger and Genesis Housing
Group. In each case, we combine the skills of our property management and sales and
acquisitions teams to ensure the right strategy and targets for the portfolio and the right
blend of refurbishment, sales and new acquisitions to achieve the required performance.  6 Grainger Trust plc Annual report and accounts 2005
innovatingspecialisingprotecting
Developing a range of flexible retirement solutions
Home reversion plans are part of the wider equity release market and enable home owners
to raise cash from what is usually their most significant asset – their home. They also
provide Grainger with long-term exposure to the housing market. 
We were delighted to launch The Flexible Reversion Plan a market-leading product which
offers for the first time a flexible proposition to potential customers. Under a typical plan,
the home owner sells all or part of their property to Grainger in return for either a lump
sum or a series of payments. The amount we pay depends on the value of the property, 
the age of the home owner and the proportion of the home they wish to sell. The
householder can then stay in the property, rent free, for the rest of their life or until they
decide to leave. At that point, Grainger is able to sell the property and realise its profit.
Customer protection 
Both Bridgewater and Norwich Union are
members of Safe Home Income Plans (SHIP),
the industry body that has set the highest
standards for the equity release market.
These standards will be further enhanced 
by FSA regulation in 2007. 7
Grainger acquires home reversion assets through three main sources – the purchase 
of existing portfolios or home reversion plans from third parties, through our own
Bridgewater brand and through our arrangement with Norwich Union.
Home reversion plans are particularly attractive to the elderly who can use the cash 
to supplement their pensions or to fund improvements in their lifestyle. We expect 
this market to grow considerably over the next few years.
Because there is no rental income while the householder is in occupation, home 
reversion is a long-term investment. It therefore makes a good strategic fit with 
the cashflows generated by the regulated tenancy business.
Bridgewater Equity Release
offers Independent
Financial Advisers an
innovative and flexible
reversion proposition,
making it a leading
provider of the product. 
Norwich Union
Under a recent agreement with Norwich Union,
Grainger pays Norwich Union a fee for selling its
home reversion product through its nationwide
sales and distribution network. Grainger then
acquires the assets of new home reversion
customers. It sets the pricing, acquires and
manages each property during its occupation,
disposes of the asset on vacancy and retains 
its relevant equity share of the proceeds. 
This exciting partnership links Grainger with 
the UK’s leading equity release provider and
offers attractive opportunities for growth in 
a potentially very large market. Latitude, 
Clapham Common
Of the 77 residential units
for sale above this Tesco
store in Clapham, 67 were
reserved or exchanged by
the year end.
8 Grainger Trust plc Annual report and accounts 2005
buildingdevelopingregenerating
Using our housing skills in new and imaginative development schemes
Grainger is keen to maintain its exposure to all sectors of the residential market. 
One way we do so is through our development and trading division whose interests 
range from strategic land development to house-building. 
The division seeks to create value through changes of use or density or through 
physical development. Its profits come from three main sources – land and regeneration,
residential development and our house-building subsidiary, Grainger Homes. 
Land and regeneration activities typically involve buying green or brownfield sites 
and, over time, obtaining planning permission for residential or mixed-use development. 
Building for growth
In the year, the development team brought
294 units to the market for sale, gained
planning permission on 438 units, with 
1,345 awaiting planning and approximately
1,750 further units for which planning
applications will be made. 9
The Glasshouse, Putney
On the site of a former
office building that was 
held in our commercial
portfolio we are developing
22 residential units of 
which 14 were reserved or
exchanged by the year end.
Smiths Dock
Grainger is involved in a joint venture with two other
parties to remediate this former dry docks site on the 
north bank of the River Tyne in North Shields. The
redevelopment site totals 30 acres and its final use 
will be a mixture of residential, retail and commercial.
Our major recent land projects have been at Basingstoke and in the north Northumberland
Coalfield regeneration area.
Residential development is biased towards the mixed use and London flat market, often
using our own assets or entering into partnerships with third parties. 
Grainger Homes is a niche house builder operating mainly in the north east of England,
developing up to 200 units per annum. We are also using this division to develop assets 
for our market-rented investment fund. Our partnership with Schroders ResPUT
Fund is now in its fourth year. We have
increased our stake and are now due 
to take on additional responsibilities
including strategy and acquisitions.
10 Grainger Trust plc Annual report and accounts 2005
expandinginvestingpartnering
Broadening our horizons through new ventures in the UK and abroad
As we expand, we’re seeking to replicate the main characteristics of our UK activities 
in mainland Europe. To this end, we’re looking for long-term exposure to the tenanted
residential market, especially in Germany, and for residential development opportunities
with particular focus on the new EU countries.
Broadening our horizons also involves collaboration with other parties to make best use 
of each other’s skills, assets or funding. In the year we have entered into joint ventures 
with local partners in Estonia and Prague for developing residential products. In the
tenanted residential market we run the former church commissioners’ portfolio as a joint
venture with Genesis Housing Group. In management, we provide asset and property
management services to the Schroders ResPUT fund in which we also have a 19.5%
investment. In equity release, our venture with Norwich Union provides a valuable source 
of home reversion contracts. In development, we work closely and successfully with local
authorities and communities, registered social landlords, landowners and other developers.  current projects
Preussag 
In October 2005, Grainger agreed to acquire a
portfolio of about 1,400 residential units from
Preussag Immobilien GmbH for approximately
€71.5m (£48.9m). The properties are in the
Metro Ruhr area of Germany, mainly in the cities
of Recklinghausen, Hamm and Herne. Due to be
completed by 31 December 2005, the transaction
represents Grainger’s entry into the German
residential market and will provide a platform 
for further growth in Continental Europe.
Grainger Geninvest LLP 
In June 2005, Grainger and Genesis Housing
Group formed a 50/50 joint venture to acquire 
a portfolio of 455 residential units (including
about 200 regulated tenancies) and 16 shop
properties in Maida Vale, Waterloo and Stoke
Newington from the church commissioners. The
total consideration amounted to £70m. Grainger
and Genesis have worked closely together since
the acquisition with Grainger providing asset
management services and Genesis providing 
day-to-day property and tenant relationship
management. The transaction illustrates our
ability to work with other parties to make major
acquisitions in the regulated sector. 
Fund management 
The acquisition of City North Group plc in April
2005 boosted our portfolio of market-rented
residential properties. Now regrouped, this
portfolio, approaching £200m, provides an
opportunity to create a fund of predominantly
market-let properties and offer it to external
investors. Plans for the launch are well advanced.
The portfolio has a broad range of properties
with a stable income and opportunities for
reversionary uplift and asset value growth. Senior appointments 
in the year:
1. Richard Exley
Director of Development 
2. Peter Couch
Director of Equity Release
3. Quinton Hill-Lines
Director of Corporate
Development 
12 Grainger Trust plc Annual report and accounts 2005
performingachievingdeveloping
Investing in our future by developing our people 
The group’s expansion has allowed us to make a number of senior appointments during
the year. The result is deeper, broader management expertise from which the business 
will benefit as it develops.
In September 2005 we launched a competency framework to continue our work of
aligning employees’ needs to the overall objectives of the group. All staff now have 
an individually tailored development plan to help meet their own goals and aspirations 
and those of the organisation.
To ensure that our health and safety responsibilities are adequately resourced, we’ve now
appointed a group H&S Manager to maintain and improve our H&S standards and practices.
Having realised last year that our Epsom office could no longer cope with the demands 
of a growing business, we moved this year into new and modern office space in Putney. 
Staff training
Investment in employee development is 
vital to our growth. In the last year, just 
over 75% of employees attended formal
training courses with 31 people studying 
for professional qualifications.
3 2 1 13
Embracing technology
We understand the benefits of using up-to-date
technology to improve communication with all 
of our stakeholders.
1. website
In 2005 we produced a new website that 
better reflects our business. It will soon
include a marketing tool for all our vacant
properties for sale or let.
2. intranet
A new group-wide intranet site is now 
central to our knowledge management 
and internal communication systems. 
It was developed jointly by employees 
and has changed the way we and our 
employees communicate.
3. e-learning
The Balancing Act is an e-learning programme 
that has been developed for our property
management team. It teaches them to think
strategically when facing difficult scenarios 
where decisions need to take into account 
issues such as profitability, reputation, 
customer service or legal obligations.
1
2
3 14 Grainger Trust plc Annual report and accounts 2005
highlights2005
GROSS PROPERTY ASSETS  
1,597
526
1,294
1,438
02 03 04 05
NNNAV PER SHARE
(pence)  
385
241
278
372
02 03 04 05
DIVIDENDS PER SHARE
(pence)
5.11
2.84
3.26
4.65
02 03 04 05 15
Core business operating contribution up by 7.6% to £88.2m
Grainger NAV up by 2.5% to 492p per share
First acquisitions on Continental Europe announced
Sales and distribution agreement with Norwich Union finalised
£61m takeover of City North Group plc
Total dividend up to 5.11p per share, an increase of 10%
Portfolio continues to grow in asset value terms:
– Vacant possession value now £2.067bn
– Investment value now £1.507bn
– Reversionary surplus stands at £560m
theresults
Market value of property assets £1.6bn 16 factsfigures
Over the last five years our gross assets have increased from £0.4bn to £1.6bn
Total market value of property assets
£1,631m
**
Total operating contribution*
£101m
Return on shareholders investment
25.6%
*profit on ordinary activities before interest and 
taxation and excluding group administrative expenses
**including share of joint ventures (£34m)
graingerplc tenantedresidential developmentandtrading
Market value of property assets by division
£124m
Proportion of group operating contribution
13%
Operating contribution by division
£12.8m
Performance criteria
Bulk of income comes from trading activities and
realisation of reversionary surpluses, so alternatives 
to yield based valuation measures also presented.
Focus is therefore on net asset value, profit before 
tax and earnings per share.
Use of NAV, diluted NAV and Grainger NAV which 
takes account of long-term reversionary surplus 
in our core portfolios.
At individual project level, performance criteria 
such as cash generation, internal rate of return,
profitability and strategic positioning used.
Trading
Regulated (Investment value: £984m) key features:
– Tenant has security of tenure
– Rents set by rent officer and increases capped 
at retail price index +5% over two years
– Purchased at discount to vacant possession 
value and sold on vacancy
– Approximately 9% of the portfolio becomes 
vacant every year
– No new regulated tenancies being created
Characteristics: Low rental yield, high margin on sales.
Land and regeneration
Key features:
– Translates green and brownfield sites into residential 
or mixed use developments
– Complex long-term business that can be highly profitable
– Involves negotiations with planners, local communities
and councils
Major sites:
Kennel Farm, Basingstoke; West Waterlooville,
Hampshire; Widdrington/Hadston, Northumberland.
Group operations
are defined by 
the following:
Within this division,
contributions come
from two areas 
of operation:
Within this division,
contributions come
from three areas 
of operation:
Market value of property assets by division
£1,507m
**
Proportion of group operating contribution
87%
Operating contribution by division
£88.2m
Number of properties by division
12,382
**including share of joint ventures (£34m) 17 Grainger Trust plc Annual report and accounts 2005
Risk review
Major risk relates to state of housing market, linked to interest 
rates and general economic environment. Risk minimised by:
– Portfolio is geographically widespread, reduces cluster risk
– Portfolio spread across property types and values, reducing 
exposure to highly fluctuating top-end properties
– Relatively low average value where demand is consistent and strong
– Regulated properties are un-modernised on vacancy so demand 
tends to be high
Long-term view taken and financial stability enables short-term 
price fluctuations to be withstood.
Business review
All activities characterised by cash generation, high trading 
margins and willingness to take long-term view.
Regulated tenancy market diminishing, but we maintain 
position by active purchasing.
Review new and expanding business opportunities – 
home reversions, European investment, development 
and trading, asset and property management.
At plc level, key criteria is total shareholder return.
Home reversions (Investment 
value: £196m) key features:
– Tenant has security of tenure
– No rental income
– Whole or partial ownership purchased 
at discount to vacant possession
– Property sold on vacancy
– No maintenance obligation
Characteristics: No rental yield, 
high sales margin.
Assured, vacant and others 
(Investment value: £327m) 
key features:
– Market-rented tenancies (£188m)
– Vacants generally for sale (£59m)
– Other, including ground rents, 
serviced apartments and share 
of joint ventures (£80m)
Characteristics: Market yield, 
some margin on sale.
Rental and management
Net rental income Key features:
– Net rental income derived from regulated 
and assured tenancies after maintenance 
and management expenditure
Asset and management fees Key features:
– Fee based activities remunerated by asset 
and property management fees
Characteristics: Management skills adapted 
to provide additional fee income with no 
capital investment.
Residential development
Key features:
– Uses group’s asset base, expertise or equity type funding
– Often in partnerships with housing associations, local 
developers, occupiers and councils
Major sites:
South London Hospital, Clapham; Macaulay Road, Clapham; 
Hornsey Road/Barnsbury, Islington; Smith Docks, North Shields.
Grainger Homes
Key features:
– Small scale niche house-building mostly in North East 
of England
– Produces consistent levels of cash and trading margins
Major sites:
The Kylins, Morpeth; Grangewood, Widdrington. 18
chairman’ sstatement
I am pleased to report another year of significant progress
at Grainger Trust. Whilst we have not benefited from the
exceptional market growth that has characterised more
recent results, we have concentrated on consolidating our
position as the UK’s leading quoted residential investor and
trader and have worked to meet the strategic objectives 
we set ourselves 12 months ago.
Our focus remains on Grainger’s core business – the
acquisition, management and sale on vacancy, of
residential regulated tenancies. This business provides 
us with a unique set of skills, asset base, cash flow and
market knowledge that allows us to examine residential-
based opportunities that have similar management
challenges or return characteristics.
During the year under review we have launched our 
equity release joint venture programme with Norwich
Union, expanded into Europe for the first time with two
joint venture developments, acquired a substantial land
bank in Hampshire, and commenced work on several
mixed-use urban developments. 
In addition, we concluded a £61.3m agreed takeover of the
central London-based market-rented residential investment
company City North Group plc and a £70m joint venture
acquisition of a tenanted residential portfolio with Genesis
Housing Group, one of the country’s leading Registered Social
Landlords. We also disposed of our last remaining major
commercial property investments through an asset swap.
Since the year end we have exchanged on a €71.5m
residential investment portfolio in Germany comprising
more than 1,400 units and generating annual income of
€4.5m. This acquisition will mark our first key investment
purchase within continental Europe and we continue to
look for further similar acquisitions where we can bring our
deep and extensive knowledge of the sector to generate
superior returns for shareholders.
Shareholders will also be aware that we entered into
preliminary discussions with Parkdean Holidays to acquire
its entire issued share capital. Although these discussions
were terminated, they demonstrate our willingness to
examine a wide range of less obvious opportunities where
we believe we can bring our residential and development
skills to deliver long-term reversionary returns.
Results
Sales of tenanted residential property and net rental
income from our core portfolio continue to be the group’s
main profit drivers. Operating contributions from our core
business, increased by 7.6% over the year to £88.2m from
£81.9m. This included a contribution of £2.4m from City
North. At the pre-tax level, results for the 12 months to 
30 September 2005 were impacted by both a more normal
contribution from our development and trading division of
£12.8m compared with £25.3m we recorded last year and
higher interest charges of £49.5m against a pre-exceptional
item charge in 2004 of £40.1m, resulting from our
successful acquisition programme over the period.
Robert Dickinson 
Chairman 19
Accordingly, pre-exceptional profits before tax were lower,
but in line with expectations at £42.1m compared with
£59.6m for the same period a year ago. I am also pleased
to report that Grainger’s net asset value continues to rise
despite the general perception of the residential market. 
As shareholders appreciate, we consider the group’s net
asset position in three ways: net asset value per share
(‘NAV’), diluted net asset value per share (‘NNNAV’), which
takes into account contingent tax and the market value of
long-term debt and hedging, and the Grainger NAV, which
adjusts for the reversionary surplus within our portfolio.
Our NAV has grown 2.0% to 558p from 547p, NNNAV 
has risen 3.5% to 385p from 372p, and the Grainger 
NAV is up 2.5% to 492p from 480p.
In line with the guidelines we established last year the
Board is recommending a final dividend of 3.41p per share
which, together with the interim payment of 1.7p per
share, will make a total for the year of 5.11p per share, 
an increase of 10%. If approved, the final dividend will be
paid on 8 March 2006 to the shareholders on the register
on 17 February 2006.
Strategy 
Long-term exposure to the residential investment market
has delivered annual compound growth rates (as measured
by the Halifax House Price Index) of 7%, 10.5% and 14.2%
over the last 20, 10 and 5 years. There has been a more
recent slow down in growth – house prices rose by 3% over
the 12 months to the end of September 2005 – and the
outlook over the coming 12 months is somewhat uncertain.
Despite contradictory views of the market our own
experience is that sales in the first two months of the
current financial year have been marginally ahead of the
end of September 2005 vacant possession values. We
believe that over the course of the current financial year
overall house price inflation within our portfolio will 
be muted. 
However our business model is based on long-term
investment returns rather than short term gains. Our interests
are focused on market sectors where reversionary potential
is not entirely dependant on short term market growth, but
also on gains secured through tenure or use changes and
by gaining planning consent. These opportunities exist both
in the UK and within continental Europe.
At the same time we will continue to generate income
through our asset and property management skills, particularly
when these can be used to help third party investors maximise
their returns from the residential market. Also we aim to
take full advantage of any market opportunities that may
arise where our strong financial base, long-term outlook
and experience will enable us to unlock value.
We are pleased that the Chancellor has committed to
introducing UK REITs (Real Estate Investment Trusts) in 
the 2006 Financial Bill. We now hope that the eventual
legislation is not overly restrictive and that it will encourage
real new investment to the Residential Sector.
Board
During the course of the year under review Bill Tudor John,
former senior partner at Allen & Overy and currently a
managing director of Lehman Brothers, joined the board
and has taken over the chairmanship of the Remuneration
Committee from Robert Hiscox.
People
As Grainger expands, it is essential we have the right level
of skills and expertise to manage this growth. Although
much of this comes from our core of committed and
dedicated professional senior executives, in the year we
have been able to augment this with a number of external
high level appointments. It is pleasing that Grainger is able
to attract such highly qualified executives.
Outlook
The way forward is clear. We will focus on our core regulated
business but, recognising that this stock is finite, we will
continue to develop into areas that capitalise on our existing
skills and economic base and which offer exposure to the
residential market. The most significant of these will be
equity release, investment in Europe, residential development
and residential fund and property management.
Bearing these objectives in mind, together with our solid
financial platform and our asset and skills base, we believe
we have the framework for continued long-term success.
Robert Dickinson Chairman
20 December 2005
Grainger Trust plc Annual report and accounts 2005 20
focusingengagingprogressing
Chief executive’s statement
Last year we set out our objectives for Grainger Trust in our
key business areas and we have made significant progress 
in all of these.
Tenanted Residential This is our core business, providing us with a long-term exposure 
to the residential market and good levels of profit and cash generation. It is based on 
our large and diverse portfolio – at 30 September 2005 its market value amounted to 
£1.5bn an increase of 10.8% in the year – and our experience and expertise at managing
and trading property and our solid financial underpinning. 
Despite sluggish market conditions throughout the last year this division has continued 
to trade well, generating sales of £133m, only marginally down on 2004’s figure of
£135m. It has been pleasing that we have achieved these levels without significantly
reducing prices on sale. Margins on normal sales in 2005 (i.e when a property is sold 
on vacancy) were 48.5%; the equivalent figure in 2004 was 48.6%.
In valuation terms, our portfolio has risen in value by 2.6% and the average vacant
possession value of our properties at 30 September 2005 stood at £173,000.The
reversionary surplus in our portfolio (including our share of joint ventures) is £560m 
(2004: £536m) or 433p per share. 
Rupert Dickinson 
Chief executive
00 01 02 03 04 05
GRAINGER TRUST
FTSE REAL ESTATE
FTSE 250 INDEX
Share price performance
2000 – 2005 21
This figure represents the difference between what we expect to sell our properties on
vacancy for and what we value them at in our market value balance sheet. The difference
between the vacant possession value of our residential portfolio and its original cost 
is £967m (2004: £928m).
Just as important as annual trading performance and
valuation uplifts is our ability to replenish stock levels and 
to grow businesses offering long-term growth potential. 
In our regulated business we have acquired 480 properties for £51m. We have also
purchased a highly reversionary portfolio of 455 London flats for £70m from the Church
Commissioners in a joint venture with the Genesis Housing Group. We are delighted to
have been successful in acquiring this portfolio as well as to be working with Genesis 
and their property management subsidiary Pathmeads. We see an interesting future for
Grainger in working more closely with the Housing Association Sector. 
As has been announced previously we entered into an agreement with Norwich Union
enabling our home reversion products to be sold through their own in-house advisors and
IFA distribution network. Sales through this channel have been slower than anticipated
when we announced the initiative in March. This reflects general market conditions in 
the equity release market and a slower than expected start up, although recent figures 
for our originations and the home reversion sector in general are more encouraging. 
We are building our home reversion portfolio using three routes (Bridgewater, Norwich
Union and portfolio acquisitions) and we anticipate being able to increase the total
portfolio by at least £50m in the year ahead. As part of this strategy, we have recently
launched our own Bridgewater Flexible Reversion Plan, and this has been well received 
by the market. 
We are pleased with the progress we have made in 
our market-rented and asset and property management
businesses. We believe that the key is to ally a good
portfolio with excellent property and asset management
skills and appropriate financing. 
2003 £144,000
2004 £164,000
2005 £173,000
average sale value of
Grainger’s properties 
on vacant possession
2003 £484m
2004 £536m
2005 £560m
reversionary surplus
(the difference between
vacant possession value
and investment value)
Grainger Trust plc Annual report and accounts 2005 22 Grainger Trust plc Annual report and accounts 2005
The acquisition of City North Group plc combined with our existing holdings has provided
us with a critical mass of market-rented properties – close to £200m as at 30 September
2005. We are now well advanced in preparing a fund structure to attract third party equity
into this portfolio. This will enable us to benefit from the rent and reversionary potential in
market-rented housing directly as one of the fund participants and indirectly through the
receipt of management and performance fees. 
Our management expertise is illustrated by the fact that we currently manage our own
portfolio of 12,382 properties and a further 1,185 properties for other residential investors.
These include Schroders Residential Property Unit Trust (ResPUT) where we have increased
our stake and are due to take on further responsibilities including strategy and acquisitions
in addition to our asset and property management roles. 
Grainger Europe Our objective in mainland Europe has been to replicate certain key
aspects of the Grainger UK business. Consequently we have been reviewing opportunities
in reversionary residential portfolios and development. 
Shortly after the year end we announced our first portfolio
acquisition – a total of 1,400 properties in the Metro Ruhr 
of Germany for a consideration of €71.5m (£48.9m). This
transaction is due to complete by the end of 2005. 
The combination of relatively high rental yields, low borrowing costs and potential for
significant gain over time, if the properties are sold to the owner occupier sector, make this
an attractive area for us. We are optimistic that this first acquisition will provide a good
platform for us to build on. 
During the year, we also announced our participation in two development opportunities.
Firstly, an 81.6% stake in a mixed residential/retail scheme in Zizkov in Prague, representing
an investment of €6.7m (£4.6m) and which we hope to take through the planning process
over the next 18 months. Secondly a €2.6m (£1.8m) investment representing a 45.7%
stake in an 800 unit proposed residential development in Tallinn, Estonia. 
Development and Trading Over the last few years we have moved away from pure
commercial investment and this process was substantially completed in the year. 
We are now focussed on three areas: residential development, primarily mixed use and
residential schemes in London and the South East, urban and rural regeneration schemes,
Chief executive’s statement continued
the acquisition of City
North gives us close to
£200m
market-rented properties
we currently manage 
our own portfolio of 
12,382
properties
and a further 
1, 185
properties
for other residential 
investors 23
including the acquisition of strategic land with development potential, and Grainger
Homes, our housebuilding arm based largely in the North East of England.
After the exceptional year ended 2004, when several major
schemes came to fruition, the division this year has moved 
to a more normal level of trading, producing an operating
contribution of £12.8m on an asset base at the beginning 
of the period of £109m.
The development of the former South London Hospital in Clapham comprising 77 units 
has gone well with 67 reserved or exchanged for a value of £20.3m. In April we acquired
520 acres of land at West Waterlooville, Hampshire, which were previously held under
option. This has been included in the West of Waterlooville Major Development Area 
and provisionally allocated 1,550 residential units with a further 1,000 in reserve. 
A key element of our progress has been our ability 
and willingness to work with partners. 
At Smiths Dock in North Tyneside we have formed a joint venture with two local landowners
to regenerate some 30 acres of waterfront land. We have submitted an application for
detailed planning permission for 1,250 units. We have made progress on our schemes with
Islington Borough Council having now obtained planning consent for our 208 unit scheme
at Hornsey Road and the 141 unit scheme in Barnsbury.
Grainger Homes has continued to develop, completing the sale of 84 units in the year for 
a total of £11.3m, producing a trading contribution of £3.3m.
Operationally, therefore, we are pleased with the group’s performance in a year in which
market conditions have, as expected, proved testing. 
People As this group continues to grow and operate in new market areas it is very
important to ensure that we have the personnel and management structure in place to
maximise the potential of both our existing asset base and new opportunities. This year has
been one of continued growth and change and we have made three senior appointments
Peter Couch, as director of our Equity Release business, Quinton Hill-Lines as director of
Corporate Development and, most recently, Richard Exley who has joined as director of
Development and who is charged with moving forward this division. 
Grainger Homes has
produced a trading
contribution of
£3.3m
Latitude, 
Clapham Common
have already had
67 units
reserved
from the 77 unit
development 24 Grainger Trust plc Annual report and accounts 2005
In addition we have recently introduced a new Senior Management Structure to ensure
that each part of our business is run in accordance with our stated strategy and that 
we take full advantage of the vast range of knowledge and skills we have within 
the organisation.
Outlook We remain very confident in the outlook for Grainger. Our core portfolio is
geographically widespread, with a typical value near or below the UK average and is
generally unmodernised. These features help sustain demand in times of market fragility. 
As importantly, the reversionary surplus in the portfolio of over half a billion pounds acts 
as a potential reservoir for future gains. We will focus on reversionary property for our 
core portfolio and continue to grow our property and asset management skills so that we
can make them more widely available to external investors in the market-rented sector.
We have put in place the products, distribution network 
and funding capability to support high levels of growth 
in the home reversion market. 
Uncertainty concerning the adequacy of pension provision and the widespread view that
house price inflation will be lower in the future should provide the impetus for increased
demand. Home reversion products fit well with other related sectors of the market, for
example second homes and retirement living and these may present further opportunities
for growth. 
We look forward to completing our first German acquisition and are reviewing several
other opportunities that should help our European operation to become a meaningful 
part of the group’s business. 
We have continued to invest in the development division and have several schemes in the
pipeline that will produce attractive returns in the short to medium term. We are growing
this division and are confident that we can use our understanding of local housing markets
and management to ensure attractive returns to our shareholders from a wide range of
developments in the residential sector.
In the coming year we will continue to progress in these main areas, whilst exploring new
opportunities to exploit our skills and asset base. I am confident that the team we have is
well placed to continue at the forefront of residential investment and development in this
country and in Europe. We are continuously challenged by new legislation and regulations
but we will look at these as opportunities rather than threats.
Rupert Dickinson
Chief executive
20 December 2005 25
committingprofitinggrowing
Operating and financial review
Operating review
Tenanted residential highlights
– Operating contribution * increased by 7.6% 
to £88.2m
– 913 properties sold for £133m, generating 
a rise in trading profits and profit on disposal 
of fixed assets to £61m
– 1,254 residential units purchased for £184m
– Year end portfolio of 12,382 units, investment 
value £1,507m
**, vacant possession value £2,067m **
* Profit on ordinary activities before interest and taxation 
and excluding group administrative expenses.
** Including share of joint ventures.
The core tenanted residential 
business has performed well with 
an improvement in operating
contribution of some 8%. The
development and trading division 
has not benefited from the large 
one-off sales last year and has 
returned to more normal levels 
of profitability.
Andrew Cunningham
Deputy chief executive 
and finance director 26 Grainger Trust plc Annual report and accounts 2005
Tenanted residential
Key performance statistics
2005 2004
No. £m No. £m
Properties sold on vacancy 720 109 783 111
Properties sold with tenants in occupation 193 24 248 24
Total sales 913 133 1,031 135
Profits on sale* 61 58
Release of negative goodwill on sales 6 6
67 64
Net rental income and other income 23 20
Direct overhead costs (2) (2)
Trading contribution 88 82
* including gains on the sale of fixed assets
Trading and rental performance has held up well in the year.
The acquisition of City North Group plc contributed £2.4m 
to the years result. The overall return, which includes the net
valuation uplift, has been depressed in comparison to last
year by the slowing down in house price inflation. In 2005
the percentage valuation uplift in our portfolio was 2.6%, in
2004 it was 12.4%. After taking account of the elimination
of revaluation surpluses realised on sales the valuation
movement in the year was £15.8m (2004: £121.3m).
Geographic distribution of residential portfolio 
Investment value % of 
£m assets 
London 636 43
South East 237 16
South West 83 6
East 94 6
East Midlands 61 4
West Midlands 134 9
Wales 11 1
Yorkshire 56 4
North West 127 9
North East 23 1
Scotland 11 1
1,473 100
Share of joint ventures 34
1,507
Although the sales process has been more sluggish this
year, as reflected by the number of vacant properties at 
the year end (423 compared to 356 last year) we have 
still experienced good levels of demand, helped by the
geographic spread and typical low value of individual 
units. Approximately 59% of our properties by value are 
in London and the South East, 26% in the Midlands, 
East, South West and Wales and 15% in the North and
Scotland. Less than 22% of our properties by value have
vacant possession values in excess of £250,000 – the 
level at which demand volatility becomes more marked. 
Analysis of residential sales in the year 
(from stock and fixed assets)
Trading 
Sales profit/profit
proceeds on disposal
No. £m £m
Regulated 600 86 43
Assured 99 11 2
Vacant 145 24 9
Equity Release 6974
Other –53
Total 913 133 61
Operating review continued 27
The average vacant possession values 
in our three key portfolios are:
£K
Regulated 165
Market rented 191
Home reversion 190
Overall (excluding other interests) 173
This compares to the Halifax All House figure at 
30 September 2005 of £166,000.
Range of vacant possession values 
(excluding other interests and share of joint ventures)
Vacant
No. of possession
properties value £m
>£500k 71 56
£250k – £500k 1,167 385
£175k – £250k 2,809 587
£100k – £175k 4,943 698
<£100k 3,392 257
12,382 1,983
We have continued to grow our portfolio in both number
and asset value terms. The vacant possession value
(including our share of joint ventures) is £2,067m and 
the investment value is £1,507m giving us a reversionary
surplus of £560m. This is the gain over and above the
market value of the properties we would achieve if we 
sold the properties on vacancy at today’s values. The
surplus above original cost is £967m.
We have acquired a total of 1,254 units in the year for a
cost of £184m (including properties acquired in the City
North portfolio). 
Analysis of acquisitions in the year 
(excluding joint ventures but including City North)
Vacant
Cost possession
No. £m value £m
Regulated (including APT) 480 51 73
Assured 584 110 125
Vacant 3045
Equity Release 156 18 36
Other 413
1,254 184 242
During the year we increased our stake in the Schroders
Residential Property Unit Trust (‘ResPUT’) to 19.5%. We
provide asset and property management services to this
fund and the fee income that we received from this and
from other similar services for other customers amounted
to £1.1m. 
Analysis of tenanted residential portfolio by tenure 
Vacant Investment % of vacant
No. of possession value possession
properties value £m £m value
Regulated 8,161 1,349 984 73
Assured 1,102 210 188 90
Vacant 423 65 59 90
Equity Release 2,663 354 196 55
Hotel complex – short term lettings 3355 100
Other interests –4141 100
Share of joint ventures –433479
30 September 2005 12,382 2,067 1,507 73
30 September 2004 12,041 1,865 1,329 71 28 Grainger Trust plc Annual report and accounts 2005
Development and trading highlights
– Acquisition of 520 acres of land at West Waterlooville
– Continued rationalisation of commercial properties
– Sales of 84 units worth £11.3m by Grainger Homes, 
Development and trading 
Key performance statistics 
2005 2004 
£m £m
Trading profits 11.7 13.5
Profits on sale of fixed assets 0.5 3.5
Net rental income less overheads – 0.4
Other income (2004 Pimlico flats) 0.6 7.9
Trading contribution* 12.8 25.3
* Profit on ordinary activities before interest and taxation 
and excluding group administrative expenses.
The results for 2004 included profits achieved on sales of
the commercial portfolio, of the last major housing allocated
land site at Kennel Farm and receipts relating to the Pimlico
development, totalling £22.1m. These were largely one-off
transactions and the division has now moved to more
normal trading levels. 
The movement on revaluation in the year was a deficit of
£12.0m (2004: deficit of £3.8m); this represents the net effect
of the elimination of revaluation surpluses realised on sales
in the year together with the impact of year end valuations.
Major contributions to trading profits in the year have
come from Kennel Farm (£3.5m) Grainger Homes (£3.3m)
and the sale of Landmark Place, Slough (£2.3m).
Opportunities for future income from Kennel Farm relate
primarily to approximately five acres of land currently
allocated for business use and the local centre. 
During the year Grainger Homes sold 84 units for £11.3m.
Much effort has gone into creating a sustainable land 
bank at this division and over the next three years we 
hope to achieve average annual sales of up to 200 units.
Other projects in this division are making satisfactory
progress and their status is shown in the table below.
Major development projects 
Income 
Project Description Status expected from
West Waterlooville 520 acres of greenfield Planning application for 1,550 units 2008
land in Hampshire due to be submitted in 2006
Macaulay Road, 110,000 sq. ft. mixed use Planning decision expected 2008/9
Clapham, SW4 scheme in Clapham by mid 2006
South London 77 residential units above Completion of project due 2006
Hospital, SW4 Tesco store in Clapham by Spring 2006
Hornsey Road, Barnsbury Public/private partnership Planning consent granted 2008/9
Complex, Islington mixed use scheme, in October 2005
350 residential units, 
43,000 sq.ft. Council 
office and community use
Smiths Dock, Joint venture to regenerate Planning decision for 1,250 units 2007
North Shields 30 acres at former dry docks due early 2006
Operating review continued 29
Highlights
– Grainger NAV up 2.5% to 492p per share
– Loan to value ratio 54% (2004: 49%) 
– Refinancing in the year to give increased 
capacity and greater flexibility
Results
Group profit before interest and tax has fallen from
£99.7m to £91.6m. Net residential rents and other income
have increased by £3.5m to £23.2m, including £2.4m from
City North Group plc, and trading profits on residential
sales including negative goodwill released and profits on
sale of fixed assets have improved by 4.3% from £64.4m
to £67.1m. However, these have been more than offset by 
a decrease in the contribution from the development and
trading division which fell from £25.3m to £12.8m. 
Interest payable 
Group pre-exceptional interest has increased from £40.1m
to £49.1m. This is a combination of higher average debt
levels (up by approximately £100m over the previous year)
and higher borrowing costs. The average base rate in 2005
was 4.7% in 2004, 4.1%. This impacted on the proportion
of our debt that is variable or is hedged through caps. Our
average interest rate in the year was 5.9% (2004: 5.8%).
Interest is covered 1.9 times by profit before interest and
tax (2004: 2.5 times). Net cash flow (being all group
receipts less expenses and taxation) covered interest 
3.8 times (2004: 5.1 times).
Taxation 
Our annual tax charge is significantly affected by FRS19,
the accounting standard preventing the provision of
deferred tax on revaluation gains when companies are
acquired. This serves to increase our effective tax rate
above the standard corporation tax rate of 30%. 
This year, it has been 37.1% (2004: 39.1%). 
Major items affecting the tax charge are:
£m
Group profit before tax 42.1
Tax at 30% 12.6
Adjusted for:
Additional tax on the difference between 
book and tax base costs of trading property sales 7.4
Negative goodwill (not taxable) (1.8)
Other including adjustments to tax 
in prior periods (2.6)
Actual tax charge 15.6
Earnings per share and dividends
Earnings per share before exceptional items have fallen to
21.2p from 29.9p. Dividends have increased by 10% and
are covered 4.0 times by profit after taxation but before
exceptional items (2004: 6.5 times).
Financial position 
General 
Most of our properties are held as trading stock and are
therefore shown in the statutory balance sheet at cost. 
This does not reflect the true worth of Grainger’s assets
and therefore we set out in this statement a summary of 
our net assets with the properties restated to market value. 
Fixed assets 
Fixed assets properties in the balance sheet comprise
£202.2m tenanted residential and £20.3m development
totalling £222.5m (2004: £97.0m, £8.4m and £105.4m
respectively). The major change relates to the acquisition 
of the City North portfolio in the year. 
Financial review  30 Grainger Trust plc Annual report and accounts 2005
Financial review continued
Investments and intangible assets
Investments relate to our investment in Schroders ResPUT
and in joint ventures and associates. We invested a further
£8.4m in the ResPUT this year and now own 19.5% of the
units issued. The market value at 30 September 2005 was
£18.2m and the cost £15.4m.
Our main joint venture interests are a 33
1
⁄3% stake in a
limited liability partnership to develop Smiths Dock in North
Tyneside of £4.1m including goodwill (2004: £3.3m), a
50% stake in a similar structure with Genesis Housing
Group of £8.8m which was established to acquire a
portfolio of properties from the Church Commissioners
which had a year end value of £72.6m and a 50% stake 
in a joint venture with Grange (Prescot Street) Limited to
develop land at Prescot Street, London, E1 with a value 
of £5m.
The negative intangible asset of £81.3m (2004: £84.8m)
principally reflects goodwill arising on the acquisition of
Bromley, the acquisition vehicle used to acquire the BPT
group. It is being released to the profit and loss account 
in line with property sales from that business.
Trading properties 
30 Sept 30 Sept
2005 2004
£m £m
Statutory balance sheet 
Tenanted residential 870 843
Development and trading 92 76
962 919
Market value balance sheet
Tenanted residential 1,271 1,232
Development and trading 104 101
1,375 1,333
The cost of our tenanted residential stock has increased
from £843m to £870m, being stock purchases of £85m,
capitalised improvement costs of £6m less sales and
transfers of £64m. Market value figures have risen to
£1,271m from £1,232m. Valuation uplifts account for £48m
and this is reduced by the elimination on sale of previously
recognised surpluses of £36m. The balance of £27m relates
to the net effect of sales, acquisitions and transfers. 
The market value of all our tenanted residential property 
at 30 September 2005 is £1,473m (2004: £1,329m).
The group’s development and trading assets held as stock
increased in cost terms to £92m and in market terms to
£104m (2004: £76m and £101m respectively), the major
movements being expenditure on West Waterlooville
amounting to £21.5m, net investment at Grainger Homes
of £11.4m, and the sale of Landmark Place, Slough which
eliminated £20.0m of cost. 
The total market value of all of the group’s development
and trading assets at 30 September 2005 was £123.8m
(2004: £109.0m)
Market value analysis of property assets
Held Market Fixed 
as stock value Market assets at
at cost adjustment value valuation Total
£m £m £m £m £m
Residential 870 401 1,271 202 1,473
Development and trading 92 12 104 20 124
Total 962 413 1,375 222 1,597 31
Pro forma net assets
Market
Statutory Market value NNNAV
balance value balance Contingent balance
sheetadjustments sheet FRS13 tax sheet
£m £m £m £m £m £m
Properties:
Tenanted residential 1,072 401 1,473 – – 1,473
Development and trading 112 12 124 – – 124
Total properties 1,184 413 1,597 – – 1,597
Investment/others assets/cash 87 8 95 – – 95
Negative goodwill (80) 80 – – – –
Total assets 1,191 501 1,692 – – 1,692
Borrowings and creditors (922) – (922) (18) – (940)
Net current liabilities (39) – (39) – – (39)
Provisions/contingent tax (6) (1) (7) 7 (213) (213)
Minority interest – (2) (2) – – (2)
Total liabilities (967) (3) (970) (11) (213) (1,194)
Net assets 30 September 2005 224 498 722 (11) (213) 498
Net assets pence per share 173 385 558 (8) (165) 385
Other assets and liabilities 
Other net liabilities excluding cash balances and current
debt instalments have fallen from £77.0m to £45.4m. Two
major items contribute to this. Firstly the acquisition of a
major portfolio of equity release properties (£19.5m) and
secondly the payment of the final instalment of the
Net assets 
Net assets at market value have increased from £678m to £722m:
Reflected in Not reflected
the accounts in the accounts Total
£m £m £m
Net assets at 1 October 2004 178 500 678
Retained profits 20 (6) 14
Revaluation surpluses:
Tenanted residential 51217
Development and trading 1 (13) (12)
Investments –44
Goodwill movements –11
Shares issued on acquisition of City North Group plc 20 – 20
Net assets at 30 September 2005 224 498 722
purchase price for Deutsche Bank’s stake in the Bromley
joint venture (£10.0m) – both of these were included in
creditors in the September 2004 balance sheet and were
paid shortly thereafter. 32 Grainger Trust plc Annual report and accounts 2005
The total of our net borrowings expressed as a percentage
of the market value of our gross property assets (‘loan to
value ratio’) at 30 September 2005 was 54% (2004: 49%)
and gearing was 120% (2004: 103%).
Financing
During the year the group extended its core borrowing
facility by £400m to £1,300m and in so doing reduced 
the blended margin on the facility by seven basis points. 
At 30 September 2005, the group had headroom in 
its borrowing capacity of £450m.
Capital Management
The group finances its operations through a combination 
of shareholders funds and borrowings with the objective 
of optimising weighted average cost of capital (‘WACC’)
whilst retaining funding flexibility. At 30 September 2005
our estimate of WACC was 5.58% (2004: 5.64%).
The group does not take trading positions in financial
instruments but holds them to minimise the risk of
exposure to fluctuating interest rates. The majority of our
debt is subject to protective swaps, caps or collars or is
maintained at fixed rates of interest. At 30 September
2005, £657m or 76% of the group’s net debt was either
fixed to termination, or for over one year, or was protected
by financial instruments (2004: 71%).
A combination of interest rate swaps and financial caps is
used to provide a degree of certainty over future interest
rate costs whilst enabling the group to take advantage of
favourable short term rates. At 30 September 2005 the
group held £347m of swap contracts at an average pre
margin rate of 5.4% maturing between 2006 and 2014
(2004: £223m @ 5.4%). There were also financial caps 
in place of £265m at an average capped rate of 6.1%
expiring between 2006 and 2009 (2004: £233m @ 6.1%). 
The effect of the fair value adjustment of marking the
group’s fixed rate debt and derivatives to current market
rates (‘FRS13 adjustments’) would be to produce a notional
‘liability’ after tax of £10.6m or 8p per share (2004: 0p).
This adjustment represents approximately 1.1% of group
borrowings at 30 September 2005 and will not be
recognised in the accounts under current pre-IFRS rules
until the position matures or is terminated. 
Diluted NAV (or NNNAV) is computed by adjusting NAV 
for the market value of long-term debt and derivatives 
and for contingent tax.
These two adjustments amount to 8p and 165p per share
respectively (2004: 0p and 174p respectively).
The FRS13 adjustment has increased because of the 
current low five-year swap rate. At 30 September 2005 
this was 4.535%, compared to 5.122% in 2004. This 
has resulted in some of our hedging instruments moving
out of the money. 
Contingent tax, which will only crystallise on the realisation
of the assets and is therefore payable sometime in the
future, has stayed relatively constant because of the low
level of movement in the revaluation surplus in the year. 
As in previous years we also present Grainger NAV. This
reflects our estimate of the present value of the reversionary
surplus in our regulated and equity release portfolios. In
gross terms this is the difference between what we would
achieve on sale of our properties on vacancy and the value
attributed to them in the market value balance sheet. We
have calculated the after tax present value of that surplus 
by discounting it back over its expected average period 
of realisation at the discount rate of 8.6% (our weighted
average cost of capital plus a risk premium of 3% 
(2004: 8.6%). The adjustment increases NNNAV by 107p
per share to give Grainger NAV of 492p (2004: 480p).
It should be stressed that this calculation is based on current
house prices and assumes no future house price inflation.
An annual increase in house prices of 4% would increase
the adjustment to 177p and give a Grainger NAV of 562p.
Cash and Debt
Cash balances at the year end amounted to £53m,
representing 3.1% of our total market value gross assets.
Of this, £26m (2004:£30m), represents deposits received 
or acts as security for cash backed loan notes. 
Group borrowings have increased from £757m to £921m,
including capitalised loan costs of £7m (2004: £7m). These
will be written off over the period of the loan. The increase
in borrowings has principally arisen from the acquisition of
City North Group plc and West Waterlooville. 
Financial review continued 33
A summary of our gross borrowings is:
Principal Interest
£m rate % Terminating
Fixed to termination 45 6.3 2006-32
Hedged by swap contracts 347 6.3 2006-14
Hedged by financial caps 265 5.6 2006-09
Variable/fixed under one year 264 5.4 2006-14
Total debt 921 5.9
Less: cash (53)
Net debt 868
It is likely that the introduction of IFRS will have an impact
on our disclosed net asset value. In common with many
property companies, our borrowing powers, as set out in
our Articles of Association, are based upon a multiple of 
our adjusted net asset value. For this reason we are seeking
to amend the multiple in our Articles of Association at our
Annual General Meeting to be held on 2 March 2006.
Andrew Cunningham
Deputy chief executive and finance director
20 December 2005 
The group also maintains a range of borrowing maturities
to enable it to balance continuity of funding with flexibility.
At 30 September 2005 the average duration of the group
debt was 5.1 years (2004: 6.4 years). 
International Financial Reporting Standards (IFRS)
IFRS are mandatory for the main UK listed companies for
accounting periods ending on or after 31 December 2005
and so will affect Grainger’s financial statements for the
first time next year. As with most property companies, we
expect the main changes will arise in the areas of deferred
taxation, financial instruments, valuation movements and
treatment of goodwill. In particular, the FRS13 adjustment
and part of the contingent tax adjustment we currently
make to NAV to arrive at NNNAV will form a part of the
statutory balance sheet. The difference between NAV and
NNNAV will therefore represent the contingent tax on the
uplift of trading properties from book value to market
value. We anticipate that, along with other companies with
significant investment property assets, our income and
expenditure account will become more volatile as valuation
surpluses and deficits will be recognised therein. In line with
other FTSE companies, we will announce the restatement 
of prior year figures and the qualitative impacts on our
accounts prior to our half year in March 2006.  Calendar girls
We raised over £10,000 
for Shelter by producing
and selling a ‘Calendar
girls’ calendar. 
34 Grainger Trust plc Annual report and accounts 2005
corporatesocialresponsibility
We seek to conduct our business in a socially responsible manner at all times
In 2005, we commissioned a comprehensive external review to ensure that our 
CSR strategy continues to address those issues that bear most relevance to our 
unique business. 
Our strategic advisers, have conducted a review of our key impact areas and under-
took structured interviews with a wide range of stakeholders. This has resulted in a
reformulation of our CSR policy statement and long-term CSR objectives to better 
reflect the most significant economic, social and environmental issues for our business.
Prince William
Grainger were a main sponsor 
of The Tall Ships Races in July. 35
CSR Policy statement
Grainger Trust plc is the UK’s largest quoted residential property investor owning 
over 12,000 units. As such, we manage residential and commercial space as well as
undertaking residential and mixed use developments. We recognise that our activities 
can have an adverse impact on the natural environment through the consumption of
resources and the generation of waste and pollution, and we seek to reduce this as 
far as possible. We also strive to address the economic and social impacts that we 
have in relation to our key stakeholders, including investors, employees, tenants and
customers, local communities and suppliers.
We view compliance with relevant environmental and social legislation as a minimum
standard, and seek to perform in line with good practice standards of relevance to our
industry. Our goal is to continually improve our economic, environmental and social
performance, which we achieve by setting meaningful objectives and targets, and
reviewing these on a regular basis. We believe that transparency and accountability
should underpin our CSR commitments, so we will report publicly on our management
and performance in this area. We are also committed to engaging into dialogue with 
our stakeholders, and enabling them to influence our approach to CSR.
This policy was last reviewed and updated in October 2005. It is accompanied 
by a set of strategic CSR objectives, which reflect our most significant areas 
of responsibility. 
Rupert Dickinson Chief executive officer
20 December 2005  36 Grainger Trust plc Annual report and accounts 2005
Corporate social responsibility continued
CSR objectives
The implementation of the company’s CSR policy will achieve the following 
strategic objectives:
• Encourage staff to contribute to, and share in, the success of the 
company through their own ideas and ongoing professional development, 
whilst supporting them to maintain a healthy balance between home 
and work commitments.
• Ensure that we treat our tenants and customers fairly, and that we 
are responsive to their needs.
• Reduce our direct adverse environmental impacts, and help and encourage 
our tenants and customers to do the same in respect of the properties 
they occupy.
• Seek to understand the needs of the communities within which we 
operate, and positively contribute to their well-being.
• Safeguard the health, safety and welfare of our employees, tenants, 
contractors, visitors, clients and the general public, where they may 
be affected by our activities.
• Engage proactively with prioritised suppliers to ensure that they meet 
with our specified economic, social and environmental standards.
• Maintain high standards of business conduct, and secure long-term 
sustainable returns for our investors. 
Here we describe our approach to these objectives, including current 
progress and our targets for the year ahead.  37
Encourage staff to contribute to, and share in, the success 
of the company through their own ideas and ongoing
professional development, whilst supporting them 
to maintain a healthy balance between home and work
commitments.
We recognise that the people we employ are more valuable than the assets which we own.
Our corporate culture is one of celebrating success, and encouraging entrepreneurialism,
allowing employees the freedom to use their initiative whilst giving them the support they
need to grow and develop in their careers.
We take all necessary steps to ensure that our people management practises are effective
and fair and processes are designed to ensure that we do not discriminate. We have
comprehensive equal opportunities and harassment policies, and we will continue to 
work in the coming year to embed these across our business.
Staff remuneration is regularly reviewed and was compared during 2005 against
independent industry benchmarks. We offer staff an extensive range of benefits including
private medical, pension, share saving schemes and generous maternity benefits. It is
important to the Grainger management team that all employees feel valued and supported
for the role which they play in the company’s success.
Grainger has a dedicated HR Development Manager who carries out an annual training
needs analysis across the group. This ensures that our training programmes effectively 
meet the needs of individuals and teams within the business. We offer work placements 
to students and staff can apply for sponsorship to study for professional qualifications and
other educational programmes. Over the last year, 31 employees undertook professional
education. Overall, the average annual number of training days per employee is three, 
an investment of £671 per head. We continually evaluate the effectiveness of training
provided, and during 2005, 87% of staff felt their performance had improved as a result 
of training.
We encourage a healthy balance between work and other commitments and have frequent
staff social activities. We are open to requests for flexible working which enabled over half
of our part-time workers (8%) to alter their working pattern to suit both their needs and
those of the business. 
Our current staff turnover rate is 10.4% per annum with 30% of employees having five 
or more years’ service. Our current male to female ratio is 4:5, with women holding 23.5%
of senior management positions and 16% of the technical or professional positions.
Targets 2006
• Continue to develop and embed our intranet, Source, into the business.
• Participate in the Times 100 Best Companies to Work For 2006 survey and use the
resulting information to identify areas for improvement in employee satisfaction as
measured in the subsequent year’s survey.
Training and development 38 Grainger Trust plc Annual report and accounts 2005
Corporate social responsibility continued
Ensure that we treat our tenants and customers fairly, 
and that we are responsive to their needs.
As a large residential landlord, our tenants play a pivotal role in our success. We seek 
to deliver high standards of service by being responsive to our tenants’ needs. Our 
credit control team are able to provide information and advice should our tenants find
themselves in financial difficulties with their rent. We recognise the diversity across our
tenant base and have introduced a variety of payment methods (including direct debits,
swipe cards at Post Offices and cheques) for their improved convenience.
To acknowledge that we may not always be able to resolve differences of opinion with 
our customers we have joined the Housing Ombudsman scheme which provides an
independent forum for dispute resolution at no cost to our tenants.
Our equity release customers are reassured by our membership of Safe Home Income 
Plans (SHIP) which provides a code of practice which members must adhere to.
As a responsible landlord we try to ensure that repairs are carried out promptly and
thoroughly. Our dedicated Repair Line enables tenants to directly contact a member of 
the property management team to report any maintenance issue whilst also providing
emergency cover when our offices are closed. Our long-term approach and regular
property visits enable us to build relationships with tenants and to develop strategies 
that enhance the value of our assets, while improving the quality of housing stock.
Targets 2006
• Roll out the ‘Warm Front’ initiative to all eligible regulated tenants in UK.
• Launch Tenants Guide packs for our regulated and ground rent tenants in the UK,
including a Tenants’ Charter.
• Monitor our performance against KPIs including the percentage of rent collected,
market-let void periods, number of formal complaints and analysis of tenant 
exit interviews. 
• Extend the tailor-made e-learning training programme to all property managers to 
help them in making decisions that balance business needs with those of tenants.
Reduce our direct adverse environmental impacts, and help
and encourage our tenants and customers to do the same 
in respect of the properties they occupy.
We recognise that people’s homes are fundamental components of a sustainable
community and we are committed to ensuring that our developments and services
contribute to social well-being. Our growing portfolio of developments provides a
significant opportunity to integrate these values and we aim to exploit the full potential 
of contemporary design to embed sustainability principles into new neighbourhoods.
Housing Ombudsman
Service
We are pleased to have
become a voluntary
member of the Housing
Ombudsman Service. 
We are only the second
private landlord to have
joined the scheme which 
is obligatory to Housing
Associations. 
The Tenants Guide  39
This involves undertaking Environmental Impact Assessments (EIAs), remediation works 
for regeneration projects, incorporating green spaces on brownfield land development, 
and often exceeding UK Building Regulations on environmental standards achieved such 
as water and energy efficiency.
We can not always quantify the environmental impact of our core housing stock due to its
age and construction. Energy efficiency and waste management issues are determined by our
tenants’ own activities and willingness to implement environmental good practice. However,
we try to engage with our tenants to encourage them to employ more efficient practices.
Case Study: Warm Front Initiative
Under the Warm Front Initiative, a significant proportion of our tenants may be entitled
to Government grants to fund improved heating and insulation within their homes. We
were keen to introduce our tenants to the scheme, and offer our assistance in applying
for the grants. Following a positive response to an initial group of tenants, we plan to
roll this out across our regulated portfolio. 
To further support this initiative, we will help certain tenants who are not eligible 
for assistance under the scheme. This is one way in which we do help our tenants to
improve their quality of life by tackling fuel poverty, improving energy efficiency and
simultaneously increasing the value of our properties.
Where properties have been sold and we retain some management responsibilities, we
liaise with local planning authorities to provide recycling services where schemes exist. 
Equally we encourage staff to adopt environmentally friendly practices by providing office
waste recycling schemes where possible, and by purchasing environmentally preferable
stationery and products. 
Targets 2006
• Develop and launch an environmental policy statement for our development activities,
and distribute this widely internally and to external stakeholders. 
• Provide guidance to prospective purchasers to assist them in managing their homes
efficiently and reducing their environmental footprint.
• Undertake a cost benefit analysis of achieving an EcoHomes rating of Good or Very
Good on all of our new development projects. 
• Identify meaningful measures of our environmental performance and monitor 
our performance against these. 
Environmental impact 40 Grainger Trust plc Annual report and accounts 2005
Corporate social responsibility continued
Seek to understand the needs of the communities within
which we operate, and positively contribute to their 
well-being.
We have introduced several initiatives to ensure we act as a responsible corporate citizen. 
Since 2004, Shelter has been our Charity of the Year in recognition of the synergy between
our business and their charitable objectives. In 2005, we raised £30,764 through a series 
of imaginative initiatives and the involvement of over 180 Grainger staff.
We also continue to support Open House through a range of activities, including the 
co-sponsoring of ‘Archikids’ Explorers Pack available free to children during the open 
house weekend. We will continue to support Open House in 2006.
‘The marvelous support of Grainger Trust has enabled thousands of young people to
encounter exemplary architecture through Junior Open House Awards and the ArchiKids
Explorer Packs. Both have a common theme – they encourage innovative ideas, nurture
young people’s creativity and enable them to contemplate the future development of
London’s built environment.
Grainger Trust is a forward-looking sponsor who has been a delight to work with. The
hands-on contributions of staff during the Open House London Annual Event were a
testament to the Grainger Trust’s commitment to enriching the city and its communities.
We look forward to continuing this fruitful relationship.’
Victoria Thornton, founding director
We have raised a total of £47,000 for various Charities including Comic Relief, Macmillan
Cancer Relief and Land Aid.
In the North East we participate in the Newcastle Employment Bond, sponsored by business
and community leaders, which has helped to create several hundred jobs and assist many
people into work.
We also sponsored the Tall Ships Races when they visited Newcastle Gateshead quayside in
July. Our sponsorship activities also enabled youngsters from a Northumberland community
group to have a private tour of the Prince William. 
Our residential properties are geographically scattered, however, where we own a 
number of properties within one neighbourhood, we aim to participate in local events 
and community forums. 
We recognise that our development activities can have an impact on local residents and
other stakeholders. We use a variety of methods to invite their feedback and address any
potential conflicts before they arise. Incorporating their views into our proposals significantly
enhances the prospective success of our planning applications, and contributes to creating
a more sustainable community. 
Supporting Shelter
Supporting Open House 41
Case Study: Regeneration Model for Smiths Dock Given Public View
A model of our proposals for a new urban village on the Smiths Dock area in North
Shields was put on public display in North Shields Library for over three weeks. We
presented our proposals to a number of resident groups from the local area at meetings.
‘The feedback we received from our meeting with the local resident groups last week
was very informative and has helped us to further formulate our plans. Overall they
were very positive towards our proposals!’
Ann Johnson, Land and Regeneration manager at Grainger
During construction, we seek minimum disruption to the community. We generally operate
the Considerate Constructor Scheme and liaise closely with community representatives and
local residents. We have a prompt and transparent approach when dealing with any issues
or concerns. 
We also try to ensure that our development activities bring associated economic benefits 
to local communities through regeneration and employment. We will typically employ 
local labour on development projects, whether or not this is a formal requirement under
Section 106 planning agreements. 
Case Study: Hornsey Road Baths and Barnsbury Complex
In Islington, London, we have carried out a consultation with the local Council and local
communities, since submitting our detailed planning application in January 2005. We
are working closely with our Guinness Trust to ensure that this mixed use and tenure
scheme is sustainable. 
Our proposals include 351 residential units of which 35% are affordable, a new council
office, a theatre and a Sure Start nursery. We were delighted to build a new climbing
wall for the local Montem School and contribute towards a new community facility 
for local young people.
Targets 2006
• Launch a payroll giving scheme to take advantage of the Government’s cash incentives
for small and medium-sized enterprises (SMEs).
• Introduce participation in the Considerate Constructor scheme as a standard contractual
requirement for construction companies employed on all new development projects. 
• Pilot a best practice community consultation technique (e.g. Enquiry by Design or
Planning for Real) for one of our regeneration projects.
Hornsey Road Baths
Smiths Dock 42 Grainger Trust plc Annual report and accounts 2005
Corporate social responsibility continued
Safeguard the health, safety and welfare of our employees,
and where possible that of our tenants, contractors, visitors,
clients and the general public.
Health and Safety (herafter H&S) is an essential part of our business operation and it is our
responsibility to achieve the highest standards for our staff and those relevant stakeholders.
In recognition of this, during 2005 we appointed a H&S Manager to ensure consistent
standards across our activities. He is a key member of our H&S committee, chaired by the
deputy chief executive and made up of representatives from each division of the business. 
In the coming year, we will continue to review our approach to H&S, including training, 
to ensure it is customised to the specific requirements of our different business areas.
It is essential that our large contractor and supplier base have adequate H&S policies and
procedures and that high standards are being maintained. We have developed and issued 
H&S guidance to all our managing agents and property managers. Given the growth of 
our development activities, we recognise the particular H&S risks on construction sites. 
Our intention is to move beyond the review and approval of contractors’ H&S policies 
to monitoring the standards achieved on all of our projects.
We are delighted to report that there were no reportable RIDDOR major injuries involving staff
in 2005 and no fatalities on Grainger Homes or Grainger development sites during 2005.
Targets 2006
• Undertake a comprehensive review of H&S risks across the different divisions.
• Review and update the H&S guidance issued to managing agents.
• Provide H&S training to all managers in the development division and all 
property managers. 
Engage proactively with prioritised suppliers to ensure 
that they meet with our specified economic, social and
environmental standards.
We recognise that a number of our suppliers will have an indirect impact on our CSR
performance, particularly on our development projects. We consider track record, technical
expertise, and business management. However, we also consider H&S and environmental
performance, due to the risks these can present on-site. In the year ahead we have more
work to do in specifying and monitoring the CSR standards of our suppliers. 
Within tenanted residential, the majority of our suppliers are local small-works building 
and maintenance contractors who have earned our trust through their reliable and speedy
response. Prior to appointment, such suppliers are asked to provide necessary documentation,
including an adequate H&S policy. Given their size and number, it is particularly challenging
to monitor all suppliers consistently for their social and environmental credentials, but this has
been targeted for improvement next year. 
Health and Safety 43
We receive approximately 5,000 invoices per year, paid on average 30 days after receipt.
We have centralised our purchase ledger activities and we are considering the introduction
of an electronic invoice tracking and approval system. 
Targets 2006
• Introduce a new electronic system for the approval and tracking of invoices.
• Launch an approved supplier database for tenanted residential repairs and
refurbishments to assist in tracking their CSR performance.
• Identify a set of CSR standards to be included in the standard contracts for 
construction companies appointed on major new development projects.
Maintain high standards of business conduct, and secure
long-term sustainable returns for our investors.
We strive to meet our investors’ expectations regarding corporate governance practices,
and continue to make diligent progress towards compliance with the revised Combined
Code (2003). All business risks such as reputational, environmental and health and safety
are formally evaluated within a risk review matrix according to likelihood of occurrence 
and potential impact. The audit committee meet quarterly to formulate the company’s
response to all significant risks. 
We keep investors well informed of our strategy through regular meetings, presentations
and property tours in order to provide them with a clear understanding of our business. 
It is essential that our business is well run, and that staff operate professionally and with
integrity at all times. The company’s policies and practice guidelines encompass the
standards to which we expect all our staff to adhere.
Targets 2006
• Develop and launch a Code of Conduct for staff incorporating updated confidential 
whistle-blowing procedures.
• Develop a policy and training on Money Laundering. 1 Robert Dickinson C.B.E., D.L. Chairman, chairman 
of Nomination Committee Aged 71, Solicitor
Appointed a director of the company in 1961, 
and chairman in 1992. Chairman of AON Minet
Pension Trust.
2 Rupert Dickinson M.R.I.C.S. Chief executive 
Aged 46, Chartered Surveyor
Joined the company in 1992 from Richard Ellis 
(now Insignia Richard Ellis). Appointed a director 
of the company in 1994. Appointed chief executive 
in October 2002.
3 Andrew Cunningham F.C.A. Deputy chief executive
and finance director Aged 49, Chartered Accountant. 
Joined Deloitte Haskins and Sells in London in 
1978 and worked in their Nairobi and Bristol offices
before being made a partner in Newcastle in 1989.
Appointed a director of the company in December
1996. Appointed deputy chief executive in 
December 2002.
We have the resources for us to continue as a consistently successful long-term business
boardmembers 44
1 2 3 4 45
Non-executive directors
4 Stephen Dickinson F.C.A. Deputy chairman, 
member of Nomination Committee Aged 71, 
Chartered Accountant
In practice in British Virgin Islands 1963-1974. 
Appointed managing director of the company in 
1974. Upon retiring as managing director in October
2002, became deputy chairman. British Virgin Islands
representative on United Kingdom Overseas Territories
Association 1993-2004.
5 Robert Hiscox M.A., A.C.I.I. Member of Nomination 
and Remuneration Committees Aged 62
Appointed a director of the company in March 2002. 
Chairman of Hiscox plc. Deputy chairman of Lloyd’s 
1993 to 1995.
6 John Barnsley F.C.A. Chairman of Audit Committee,
Member of Remuneration Committee Aged 57,
Chartered Accountant. 
Appointed a director of the company in February 2002. 
Non-executive director of Northern Investors Company
plc and American Appraisal Associates LLP . Chairman
KCS plc 2005. Until December 2001 was a Senior 
Partner at PricewaterhouseCoopers.
7 Robin Broadhurst C.B.E., F.R.I.C.S. Senior independent
non-executive director, member of Nomination and Audit
Committees Aged 59
Appointed a director of the company in February 2004.
Previously European chairman of Jones Lang La Salle.
Trustee and director of the Grosvenor Estate, a senior
advisor to Credit Suisse First Boston, property consultant
to Sir Robert McAlpine Limited, member of the Prince’s
Council for the Duchy of Cornwall and director of the
British Library.
8 Bill Tudor John M.A. Chairman of Remuneration
Committee, member of Audit Committee Aged 61
Appointed a director of the company in February 2005.
Currently a managing director of Lehman Brothers,
previously a partner at Allen & Overy LLP for 29 years,
serving as senior partner for six years. Also deputy
chairman of the Portman Building Society and 
deputy chairman of the Bank of England Financial
Markets Law Committee. An associate fellow of 
Downing College, Cambridge. 
Grainger Trust plc Annual report and accounts 2005
5 6 7 8 Grainger is, and always has been, committed to high
standards of corporate governance. The board believes that
good corporate governance is achieved through the way
that it acts, and does not necessarily automatically follow
from ‘ticking boxes’. Where the group departs from the
Combined Code 2003 (‘the Code’), this has been an active
decision taken by the board that the provision is not in 
the best interests of the group.
As required by the Listing Rules, a statement of how the
principles of the Code are applied is given below, along
with our formal compliance statement and explanations
where the code has not been applied. The main part of this
report should be read in conjunction with the individual
statements made by the board committees which follow.
Board Conduct
The board meets regularly, at least four times each year, 
for the consideration of strategy and to monitor and
evaluate the group’s performance and prospects. This
brings together a wealth and depth of experience ranging
from the cautious to the entrepreneurial, suitable to the
effective management of the group.
The table below shows the attendance by each director 
at the board meetings held during the year. Biographical
details are given on pages 44 and 45.
Dec Jan Feb Jun Sep
Director ’04 ’05 ’05 ’05 ’05
Robert Dickinson ✓✓✓✓✓
Stephen Dickinson ✓✓✓✓✓
Rupert Dickinson ✓✓✓✓✓
Andrew Cunningham ✓✓✓✓✓
Robin Broadhurst ✓✓✓✓✓
Robert Hiscox ✓✓✓✓✓
John Barnsley ✓✓✓✓✓
Bill Tudor John* n/a n/a n/a ✓✓
Robin Herbert** ✓✓✓ n/a n/a
Nichola Pease** ✓✓✓ n/a n/a
* appointed after February 05 board meeting 
** resigned at February 05 board meeting 
In June each year, the board meets for two days to receive
presentations from senior management and discuss
strategy at length. This ensures that non-executives fully
understand and are able to impact the strategy of the
group in bringing their respective experiences’ to bear.
There is a formal schedule of matters reserved for the
Board’s Attention which includes:
• Setting the overall strategy
• Approving major transactions
• Setting debt/gearing limits and associated hedging strategy
• Accounting policies
Other tasks which require main board director attention are
delegated to the board’s committees or to the executives.
Committee membership and chairmanship is therefore of
the utmost importance to ensure each committee has the
necessary skills to properly discharge its duties.
Relevant financial and non-financial information is supplied
to directors in a timely manner before each board/committee
meeting. Any ad hoc request for information from a
director is dealt with as a high priority. The directors have
direct access to the services of the company secretary, who
reports to the chairman regarding matters of corporate
governance. The appointment and removal of the company
secretary is a matter for the board as a whole. Procedures
also exist for directors to take independent professional
advice as required, at the group’s expense.
Roles
Grainger employs a relatively small board, which consisted
at the year end of the chairman, deputy chairman, two
executives and four non-executive directors. Each non-
executive is therefore required to participate in two
committees of the board and Robin Broadhurst was
appointed the senior independent director on the
retirement of Robin Herbert in February 2005.
Corporate governance report
46 Grainger Trust plc Annual report and accounts 2005 47
The roles of chairman and chief executive are very distinct,
and a written division of their respective responsibilities 
has been reviewed and approved by the board as a whole. 
In brief, the principal differentiating factors are:
Chairman Chief executive
Reports to the board Reports to the chairman
Only the CEO and company All executive management
secretary report to him report to him, directly
or indirectly
Responsible for running Responsible for running
the board the business
Guardian of the board’s Responsible for 
decision making implementing the
board’s decisions
Independence
The independence of the non-executive directors is the
principal potentially contentious corporate governance
issue. The board does not consider that the criteria set 
out in section A.3.1 of the Combined Code should be
taken as automatic failure of a director to be independent.
It is their fundamental belief that directors should be
assessed robustly as individuals, taking into account their
own unique experiences, reputations and competencies
along with their mindfulness and willingness to contribute
to decisions of the board on the basis of those.
The board itself is in the best position to assess this, given
their knowledge and experience of working with the
individuals themselves as professionals. The board has
therefore, after diligent and careful consideration, assessed
the independence of the non-executives as follows:
Director Board’s determination Explanatory notes
Robert Dickinson Not independent • close family ties
Chairman • more than nine years‘service
Stephen Dickinson Not independent • close family ties
Deputy Chairman • more than nine years’ service
• previously managing director
• part-time executive responsibilities
• participation in all employee share schemes
Robin Broadhurst Independent • although previously European chairman at Jones Lang LaSalle, 
this firm no longer values any of Grainger’s properties, so there 
is no material business relationship under A.3.1
• regarded as independent by search consultants used for 
his appointment
Robert Hiscox Independent • although a trustee for an Estate containing a material shareholding,
the board is of the opinion that this position does not interfere with 
or influence his character or judgement in any way. As chairman of
Hiscox plc, and past deputy chairman of Lloyd’s, Mr Hiscox brings
extensive skills and experience in his own right, which can only be
beneficial to Grainger’s board The board therefore concluded that it included five
independent non-executive directors up until 24 February
2005 and four thereafter, maintaining a majority of
independent non-executive directors through the year
under review.
Retirement by Rotation and Re-election 
Although board members have been required to stand 
for re-election at intervals of no more than three years 
for several years now, the board believes it is important 
to maintain stability and continuity for longer periods.
Principally this is due to the long-term nature of the 
group’s core businesses. The process of purchasing land,
negotiating planning and then subsequent development 
to sale can amount to many years’ hard work, where 
continuity of leadership is a real asset. The board in fact
considers itself fortunate to have retained the services 
of several long-standing directors for extended periods.
Along with those directors retiring by rotation, the
chairman and deputy chairman will stand for re-election
again this year, having passed the age of 70 and having
been directors of the company for more than nine years.
Their experience of the long-term residential market is
invaluable to the group and, whilst they are willing and
able, the board considers itself fortunate to benefit from
their continued services.
Induction, Evaluation and Training
During the year, the induction and evaluation processes
were both formalised and comprised the following 
key elements:
Induction: • Two ‘manuals’ of information, delivered separately, containing all board standing policies and 
procedures, latest risk assessments, market consensus information, committee composition, glossary 
of industry terms etc.
• Meetings with executives and senior management, where presentations were delivered to cover 
all business areas.
• An invitation to join the next available tour of examples of the group’s properties.
Corporate governance report continued
48 Grainger Trust plc Annual report and accounts 2005
Director (continued) Board’s determination Explanatory notes
John Barnsley Independent • John Barnsley was not connected with any service provided to
Grainger in the period to December 2001, whilst he was a partner 
at PwC, the group’s current auditors. From December 2004, the
customary ‘three-year period’ had in any event elapsed. Mr Barnsley
has no continuing personal interests with PwC.
• Grainger was as new to Mr Barnsley as Mr Barnsley was to Grainger
on appointment
Bill Tudor John Independent • no A.3.1 criteria relevant
(appointed 24 February 2005)
Robin Herbert Independent • the board does not consider length of service, on its own,to affect 
(resigned 24 February 2005) – the independence of its directors. Mr Herbert’s length of service was
considered an asset by fellow directors as he continued to keep apace
with the changes and unpredicted growth of Grainger and contribute
to all debates with a fresh mind, taking each decision in turn.
Nichola Pease Independent • no A.3.1 criteria relevant.
(resigned 24 February 2005) 49
Should the need for any further training be identified, this
would be provided to directors on appointment or thereafter.
The board is provided with technical updates relating to 
the property industry and the listed company regime, 
as appropriate.
Relations with Shareholders and Potential Investors
The chief executive and deputy chief executive/finance
director meet regularly with institutional shareholders and
analysts. In addition to the usual meetings after results
announcements, ad hoc meetings are arranged to continue
dialogue throughout the year. In particular, during the year
under review, the group’s chief executive and deputy chief
executive/finance director have, between them, conducted
over 80 meetings with shareholders, potential investors 
and analysts. Further, the executives, senior management
and the group’s broker conducted two property tours
during the year predominantly for shareholders. Feedback
gathered by the group’s broker and financial PR agent
following such meetings and presentations is always
presented to the board as a whole and the board is briefed
on the views of major shareholders. Non-executive directors
are available for meetings with the same, although there
have been no requests for such meetings in the year under
review, or since the year end.
The annual general meeting is the primary route for
communication with smaller/private shareholders, although
the group’s website also includes a specific Investor
Relations section and has been significantly developed in
the current year. All directors attend the annual general
meeting, and the chairmen of all committees are available
to answer questions. The notice of meeting and annual
report and accounts are sent out at least 20 working 
days before the meeting. Separate votes are held for 
each proposed resolution, including the approval of the
remuneration committee report, and a proxy count is 
given in each case after the voting on a show of hands. 
At the Annual General Meeting in February 2005, Grainger
introduced a ‘vote withheld’ category, in line with best
practice. Shareholders were also able to lodge their votes 
through the CREST system.
Internal Control
The group has a cyclical process for identifying, assessing
and managing its significant risks, which has been in place
for the full year under review and in the period up to the
date of approval of these financial statements. The process
is designed to enable the board to be confident that such
risks are mitigated, or controlled as far as possible. It should
be noted however that no system can eliminate the risk of
Evaluation: • A questionnaire was completed by board members, whereby possible characteristics of a board were
rated depending upon whether Grainger’s board would always, never or sometimes act in a particular
way. This part of the process resulted in an effective self-assessment of the board as a whole.
• The chairman formally interviewed each director, with an agenda of items covering board, committee
and individual director evaluation. Results of the individual meetings are held only by the chairman 
and company secretary so that directors are encouraged to be open and free with their views. 
Particular topics for discussion were tabled due to their importance to Grainger either currently 
or in the near future.
• The non-executives, led by Robin Broadhurst (the senior independent director) met to evaluate the
chairman. They assessed the leadership capabilities of the chairman against commonly accepted
attributes of an effective chairman, taking into account the views of the executives.
• Feedback was discussed by the board as a whole. There were no comments regarding individuals
required to be made, which would have been made directly by the chairman to the individual concerned.
• As a result, the board decided that its main priority should be to spend more time discussing strategy.
This was not to be to the detriment of its monitoring role, so additional informal strategy discussions
have begun to take place. Ultimately, decisions will still be made at formal board meetings.
• No other significant areas for development were highlighted, although some interesting matters were
raised prompting further debate. failure to achieve business objectives entirely and can only
provide reasonable and not absolute assurance against
material misstatement or loss. The audit committee is
delegated the task of reviewing all identified risks, with the
absolute key risks retained for full board review. Risks and
controls are reviewed to ensure effective management of
appropriate strategic, financial, operational and compliance
issues. The audit committee also reviews the half year and
full year financial statements and holds discussions with 
the group’s auditors. In addition, the group has an internal
audit function which performs relevant reviews as part of a
programme approved by the audit committee. The committee
considers any issues or risks arising therefrom in order that
appropriate actions can be undertaken for their satisfactory
resolution. The Internal Audit Manager has a direct
reporting line to the chairman of the audit committee.
An annual budget is produced, together with longer term
projections, which are presented to the board for approval.
At each meeting the board discusses progress against the
budget and monitors any variances. Where applicable,
revisions are made to expected outturn against which
further progress can be monitored.
The board also discusses in detail the projected financial
impact of major proposed acquisitions and disposals,
including their financing. All such proposed substantial
investments are considered by all directors. Where 
meetings are required between board meetings and 
a full complement of directors cannot be achieved, an
executive committee of directors considers the necessary
formalities. The board is also responsible for the discussion
and approval of the group’s treasury strategy, including
mitigation against changes in interest rates. 
Going Concern
After making enquiries, including the review of future
anticipated cash flows and banking covenants, the directors
have a reasonable expectation that the group and company
have adequate resources to continue in existence for the
foreseeable future. For this reason they continue to adopt
the going concern basis in preparing the accounts.
Compliance Statement
Independence of non-executive directors is explained in
detail above. In the board’s view it is their assessment 
of independence which determines compliance with the
Code and therefore no non-compliance on grounds of
independence has been recorded.
Except as noted below, the board considers that it 
has complied with the Code during the year ended 
30 September 2005:
A.1.3 No formal meetings were held by the chairman with
the non-executives, without the executives present.
The board decided however at its September 2005
meeting that although not anticipated to be of
significant value this could not be seen to be against
the best interests of the company and have resolved
to hold at least one such meeting during the next
financial year.
B.1.6 As explained in detail in the Directors’ Remuneration
Report, Rupert Dickinson and Andrew Cunningham
currently hold service contracts with notice periods 
in excess of one year. The notice periods are being
reduced from two years to one year on a straight 
line basis over a period of five years from 1 October
2002. At the date of this report the notice period
outstanding stood at approximately 16 months.
Report of the Nomination Committee
The nomination committee consists of the chairman and
two non-executive directors. The committee last met in
September 2004 and the attendance of individual directors
together with their dates of service on the committee are
shown below:
Sep
’04
Robert Dickinson ✓
Chairman
Robert Hiscox ✓
Member
Robin Broadhurst n/a
Member (appointed 24 Feb 2005)
Robin Herbert ✓
Member (resigned 24 Feb 2005)
Nichola Pease ✓
Member (resigned 24 Feb 2005)
Corporate governance report continued
50 Grainger Trust plc Annual report and accounts 2005 51
The terms of reference of the nomination committee are
available on the group’s website and principally relate to
filling vacancies on the board, whether arising through
resignation, retirement or desired expansion and also
consideration of succession planning.
The committee has appointed Spencer Stuart, specialist
search agents, in order to make any independent non-
executive appointments. The nomination committee first
discuss with the board the desirable background and
experience of any new non-executive, and then approach
the agency with this information. 
The nomination committee is also responsible for reviewing
the desirability of the continuation of service of directors
required to retire by rotation. In this regard each of the
directors required to retire by rotation this year has
continued to demonstrate full, capable and committed
participation in setting and monitoring strategy for the
group. Details of those directors standing for re-election 
in the March 2006 annual general meeting are given in 
the Annual General Meeting circular to be sent out with
copies of the Annual Report and Accounts. Biographies of
directors are given on pages 44 and 45. During the year, all
matters relating to the work of the nomination committee
were discussed by the full board and therefore no separate
meetings were held.
Report of the Audit Committee
The audit committee meets four times each year, ahead of
each board meeting, reporting any relevant matters to the
board where fit. Attendance of the individual directors and
dates of service on the committee are shown below. In the
opinion of the directors, the audit committee comprised
three independent non-executive directors throughout the
period, and Mr Barnsley has the particular recent, relevant
financial experience required by the Code.
Nov Feb May Sep
’04 ’05 ’05 ’05
John Barnsley ✓✓✓✓
Chairman
Robin Broadhurst ✓✗* ✓✓
Member
Bill Tudor John n/a n/a ✓✓
Member (appointed 24 Feb 2005)
Robin Herbert ✓✓ n/a n/a
Member (resigned 24 Feb 2005)
* Due to unforeseen circumstances the meeting date had to be changed
and Mr Broadhurst was unable to attend. Mr Broadhurst received the
committee papers as normal, and discussed his views with Mr Barnsley
prior to the meeting. 
The audit committee adheres to particularly strict and
detailed terms of reference, which are available for
inspection on the group’s website. In addition to the work
described within the ‘Internal Control’ section of the main
report above, the audit committee is also responsible for
reviewing the independence of the external auditor, which
includes the approval of any non-audit service fees above a
relatively nominal level. The audit committee is responsible
for making recommendations to the board in connection
with the appointment of the external auditor and the level
of the audit fee.
The deputy chief executive/finance director and external
audit partner as well as other senior management are
invited to attend meetings of the committee. Once each
year the audit committee meet with management without
the auditors present and also with the auditors without
management present.
By order of the board 
Marie Glanville
Company Secretary
20 December 2005 This report meets the disclosure requirements of the
Companies Act and the Listing Rules and in accordance
with usual practice will be put to shareholders for approval
at the Annual General Meeting.
PricewaterhouseCoopers LLP have audited the directors’
remuneration, pensions, share option and long-term incentive
schemes sections of this report (‘the auditable part’).
The Remuneration Committee
The composition and attendance of the individual directors
at the three remuneration committee meetings held during
the year were as follows:
Dec Jun Sep
’04 ’05 ’05
Robert Hiscox
Member ✓✗ ✗
Chairman (24 Feb 2005 – 15 Sept 2005) n/a ✓✓
John Barnsley
Member ✓✓✓
Bill Tudor John
Member (appointed 24 Feb 2005) n/a ✓✓
Chairman (appointed 15 Sept 2005) n/a n/a n/a
Nichola Pease
Chairman (resigned 24 Feb 2005) ✓ n/a n/a
In the opinion of the directors the committee therefore
comprised three independent non-executives throughout
the year. Certain shareholder pressure groups raised
concerns that Mr Hiscox, as trustee of an estate containing
a material shareholding, should not be regarded as
independent. Although this is robustly not the view of
Grainger’s board, it reluctantly accepted that Mr Hiscox
should remain as a member only. The board appointed 
Mr Tudor John as chairman of the committee, at the 
end of its 15 September meeting.
The committee appointed and received advice during the
year from New Bridge Street Consultants LLP (‘NBSC’)
regarding the competitiveness of overall packages for the
executive directors and on the group’s incentive schemes.
NBSC also provided updates on Grainger’s performance 
in relation to the long-term incentive schemes.
Over the last three years, the committee has also received
advice from Mercers, in particular in relation to the design
of the long-term incentive plan, which was approved by
shareholders in March 2002. The committee continue to
keep the terms of this scheme in particular under review
given the seemingly constantly changing ‘best practice’
guidelines. The first award made under the current rules 
of this scheme will vest in January 2006. 
The Committee has also received advice from the group’s
HR Manager, who was invited to attend remuneration
committee meetings when appropriate.
The committee’s terms of reference are available on the
group’s website.
Remuneration Policy
Grainger’s remuneration policy is designed to attract,
motivate and retain high calibre individuals to enable the
group to operate strategically for the continued benefit of
shareholders, over the long term. In order to operate this
policy, the Remuneration Committee receives information
on remuneration packages awarded to directors in
comparable organisations and aims to ensure that the
rewards paid by Grainger are competitive.
The policy is also designed to align the directors’ interests
with those of shareholders. This is principally achieved
through the use of share-based incentives and by
encouraging executive directors to maintain a reasonable
shareholding in the group. Details of executive directors’
shareholdings are shown on page 59. Share awards are
generally satisfied by the acquisition of shares in the
market, so are not dilutive to shareholders. Share options
are satisfied by the issue of new share capital.
Remuneration packages include salary, bonus and defined
contribution pension elements as well as long-term share
incentive and option schemes. Usual benefits are also afforded.
No executive director is involved in the determination 
of their own remuneration. Fees of the non-executive
directors, which are set partly under consideration of 
their committee responsibilities, are determined by the
Board as a whole. 
The salaries and bonuses of Senior management are
determined by the executive directors and reviewed by 
the remuneration committee. Senior management also
participate in the long-term incentive scheme described
below and the level of their participation is included in 
the tables on page 54. Usual benefits are also afforded 
to these individuals.
Report of the remuneration committee
52 Grainger Trust plc Annual report and accounts 2005 53
As noted previously, Rupert Dickinson and Andrew
Cunningham each hold service contracts with notice periods
decreasing on a straight line basis from two years to one
year, over a period of five years which began on 1 October
2002. At the date of this report therefore the notice periods
have been reduced to approximately 16 months. Their
contracts were dated 19 July 1996 and 26 July 2000
respectively. Sean Slade held a contract with a twelve 
month notice period, which was dated 22 January 2002.
Apart from salary and benefits in relation to the notice
period described above, there are no other terms in any 
of the directors’ contracts which would give rise to
compensation payable for early termination, or any other
liability of the company.
No executive director holds a non-executive directorship
outside of the group.
Each non-executive director has specific terms of reference.
Their letters of appointment state an initial one-year period,
with a continuation subject to review at that time. The
letters of appointment contain no entitlement to
compensation for early termination.
Non-Performance Related Remuneration
Basic Salaries and Benefits
Basic salaries are reviewed by the remuneration committee
annually. Uplifts are by reference to cost of living,
responsibilities and market rates, as for all employees and
are performed at the same time of year. Executive directors
and the deputy chairman, Stephen Dickinson, who has part-
time executive responsibilities, specifically including land and
regeneration, along with other senior members of staff,
received a fully expensed company car, or a car allowance.
Along with all members of staff, executive directors also
benefit from private medical and life insurances.
The chairman’s and non-executive directors’ fees are
reviewed on a biennial basis by the whole board. 
Pensions
The group contributes 15% of basic salary to the money
purchase pension schemes of Rupert Dickinson and Andrew
Cunningham, and contributed 10% to that of Sean Slade.
No other elements of remuneration are pensionable.
Share schemes open to all Employees
Executive directors, and Stephen Dickinson, deputy
chairman, are eligible to participate in two share schemes
which are open to all employees with relevant service,
subject to the rules of the schemes.
The first is a Save as you Earn scheme (SAYE), and the
second a Share Incentive Plan (SIP). Both are Inland Revenue
approved and therefore subject to the limits prescribed.
Amounts relating to directors’ participation in the SIP 
and share options under the SAYE scheme are shown 
on pages 56 and 57. 
Performance Related Remuneration
A significant element of executive directors’ and senior
management’s potential remuneration is performance
related. The combination of short and long-term incentives
attempt to align the interests of executives and senior
management with the interests of shareholders, and to
reward significant outperformance of budgeted expectations.
Non-executive directors do not receive performance related
remuneration.
Service Contracts
Contract Unexpired Notice
date term* period
Rupert Dickinson 19 July 1996 No fixed term 16 months
Andrew Cunningham 26 July 2000 No fixed term 16 months
Robert Dickinson 17 July 1998 10 months None
Stephen Dickinson 28 February 2000 5 months None
Robin Broadhurst 26 February 2004 5 months None
John Barnsley 27 February 2003 5 months None
Robert Hiscox 6 March 2002 5 months None
Bill Tudor John 24 February 2005 5 months None
* Calculated as at 30 September 2005 and rounded to the nearest whole month. Annual Discretionary Bonus
Each year the remuneration committee considers the award
of a bonus to the executive directors, which is at their
ultimate discretion. The chief and deputy chief executives,
Rupert Dickinson and Andrew Cunningham participate in
an arrangement introduced in 2003 whereby the
provisional bonus is calculated over a three-year period, by
reference to the enhancement of the triple net asset value
of Grainger, relative to a theoretical market comparator.
The comparator movement is calculated with regard to 
the Nationwide and Halifax house price indices and also
interest rates – using five-year swap rates. Bonuses remain
capped at 150% of salary which would only be achieved
under exceptional performance conditions. Subject always
to the Committee’s discretion, one third of the calculated
amount is approved for payment and the provisional
balance is taken into account over the next two years. 
The award payable for the year ended 30 September 
2005 represents 63% of salary for that year (2004: 61%). 
Long-term Incentives
Grainger’s policy in relation to long-term incentive schemes
has evolved over time to more closely align the long-term
interests of executives and senior management with those
of shareholders, to reward sustained performance over a
number of financial years and to encourage the executives
to grow their shareholdings.
Executive directors and senior management are eligible to
receive annual conditional awards of shares worth up to
50% of salary under the Long-Term Incentive Scheme and
of share options up to a maximum of 125% of salary
under the Executive Share Option Scheme. The awards
under both schemes become unconditional provided
challenging performance criteria are satisfied over a single
three-year performance period following grant. The criteria
for all awards granted since March 2002 have been based
on Total Shareholder Return (TSR) – dependent upon where
Grainger’s TSR lies with respect to a pre-determined
comparator group as follows:
Comparator Companies: Performance Condition Vesting of Option
Brixton plc
Capital and Regional plc If Grainger’s TSR is equal to or greater than the 
CLS Holdings plc upper quartile TSR of the comparator companies 100%
Daejan Holdings plc
Derwent Valley Holdings plc If Grainger’s TSR is above the median but below the 
Freeport plc upper quartile TSR of the comparator companies Pro-rata vesting
Great Portland Estates plc
London Merchant Securities plc If Grainger’s TSR is equal to the median TSR of the
Minerva plc comparator companies 40%
Mountview Estates plc
Pillar Property plc If Grainger’s TSR is below the median TSR of the 
(until it was de-listed on 29 July 2005) comparator companies 0%
Quintain Estates and Development plc
Shaftesbury plc
The Unite Group plc
As shown in the table above, no award vests unless Grainger’s TSR is higher than the median TSR of the comparator group.
Report of the remuneration committee continued
54 Grainger Trust plc Annual report and accounts 2005 55
Total shareholder return graph
These performance criteria are believed to be stretching,
but realistic and reward executives if Grainger’s return 
to shareholders outperforms this group of companies
operating in broadly similar markets. 
The graph above shows TSR (based upon share price
growth with dividends reinvested) for Grainger, compared
to the comparator group, the FTSE 250 and the FTSE Real
Estate Index. These comparators have been chosen on 
the basis that they are the markets within which 
Grainger operates. 
The original comparator group was established in 2002
with fourteen companies, two of which have since been
taken over. To maintain a reasonable size for the group 
and to prevent it having to be regularly modified for such
changes, the Remuneration Committee has decided that it
should be expanded with effect from the awards to be made
in January 2006 and that the following will be included:
Workspace Group plc Warner Estate Holdings plc
Big Yellow Group plc A & J Mucklow Group plc
Mapeley Limited St Modwen Properties plc
Helical Bar plc
00
0
200
100
300
400
500
01 02 03 04 05
COMPARATOR GROUP
GRAINGER TRUST
FTSE REAL ESTATE
FTSE 250 INDEX Directors’ Remuneration
Andrew
Robert Stephen Rupert Cunning- Sean
Chairman, deputy chairman Dickinson Dickinson Dickinson ham Slade Total
and executive directors £’000 £’000 £’000 £’000 £’000 £’000
Non-performance related remuneration
Salary and fees 108 142 420 315 13 998
Taxable benefits –172116 2 56
Share incentive plan –6661 19
Compensation for loss of office –––– 221 221
Ex-gratia payment –––– 30 30
Total non-performance related 
remuneration 108 165 447 337 267 1,324
Performance related remuneration
Annual discretionary bonus – – 267 198 – 465
Total Performance related remuneration – – 267 198 – 465
Total Remuneration for the year ended 
30 September 2005 108 165 714 535 267 1,789
Total Remuneration for the year ended 
30 September 2004 90 146 678 506 215 1,635
Pension contributions into money 
purchase schemes
Year ended 30 September 2005 –– 63 47 2 112
Year ended 30 September 2004 – – 60 45 16 121
Bill
Robin John Robert John Tudor Robin Nichola Total
BroadhurstBarnsley Hiscox Ward John Herbert Pease Total 2005
Non- executive directors £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-performance related remuneration
Salary and fees 34 38 34 – 18 15 15 154 1,152
Taxable benefits –––––––– 56
Share incentive plan –––––––– 19
Compensation for loss of office –––––––– 221
Ex-gratia payment –––––––– 30
Total non-performance related 
remuneration 34 38 34 – 18 15 15 154 1,478
Performance related remuneration
Annual discretionary bonus –––––––– 465
Total Performance related 
remuneration –––––––– 465
Total Remuneration for the 
year ended 30 September 2005 34 38 34 – 18 15 15 154 1,943
Total Remuneration for the 
year ended 30 September 2004 15 28 25 12 – 30 30 140 1,775
Report of the remuneration committee continued
The following parts of the remuneration committee report have been audited.
56 Grainger Trust plc Annual report and accounts 2005 57
Taxable benefits for Stephen Dickinson, Rupert Dickinson, Andrew Cunningham and Sean Slade relate to car benefit 
and private medical insurance. In addition, Stephen Dickinson and Rupert Dickinson received a taxable fuel benefit.
On 24 February 2005, Bill Tudor John was appointed as a director. This followed Robin Herbert’s and Nichola Pease’s
resignations of the same date. In the previous year, Robin Broadhurst was appointed on 26 February 2004, following 
John Ward’s resignation of the same date. Sean Slade resigned from the board on 12 November 2004.
Directors’ Share Options
Stephen Rupert Andrew Sean
5p ordinary shares (thousands) Dickinson Dickinson Cunningham Slade Total
Dates Exercisable Exercise price 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep
5p shares 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
Non-performance related 
(available to all staff)
SAYE scheme
8 Aug 07 – 8 Feb 08 163.6p – – 10 10 10 10 – 10 20 30
1 Sep 08 – 1 Mar 09 186.46p 9 9 – – – – – – 9 9
Performance related 
(conditional awards)
Inland Revenue Approved Executive 
Share Option Scheme
19 Jul 99 – 19 Jul 06 58.4p – – – – – – – 51 – 51
23 Dec 99 – 23 Dec 06 68.5p – – – – 44 44 – – 44 44
Long-Term Incentive Scheme
9 Jul 00 – 9 Jul 07 53.42p – – 64 64 37 37 – 39 101 140
24 Jan 06 – 24 Jan 13 191.8p – – 196 196 143 143 38 98 377 437
12 Jan 07 – 12 Jan 14 326.4p – – 153 153 115 115 – 61 268 329
11 Jan 08 – 11 Jan 15 381.8p – – 138* – 103* – – – 241* –
9 9 561 423 452 349 38 259 1,060 1,040
* Share options granted in the year.
Note that the each 25p Ordinary Share was split into five 5p ordinary shares in February 2005. All share options shown
above are based on 5p ordinary shares including the comparatives which have been restated accordingly.
The market price of the company’s shares at the end of the financial year was £4.56, and the range during the year was
£3.18 to £4.57 (as adjusted for the share split in February 2005).
The current long-term incentive scheme replaced the old Executive Share Option Scheme, however some options granted
under this scheme are still in existence and are disclosed above. Exercise is conditional upon a growth in earnings per 
share in excess of the retail price index over a period of three consecutive years during the period of the option. Report of the remuneration committee continued
58 Grainger Trust plc Annual report and accounts 2005
Directors’ Share Awards
Rupert Andrew Sean
5p ordinary shares (thousands) Dickinson Cunningham Slade Total
Earliest Shares Shares Shares Shares Shares Shares Shares Shares
Award vesting 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep
date date 2005 2004 2005 2004 2005 2004 2005 2004
Performance related 
(conditional awards)
Long-Term Incentive Scheme
1999 scheme (matching awards) 5 Dec 05 52 52 45 45 – 20 97 117
2002 scheme 24 Jan 03 24 Jan 06 78 78 57 57 – 39 135 174
2003 scheme 12 Jan 04 12 Jan 07 61 61 46 46 – 25 107 132
2004 scheme 11 Jan 05 11 Jan 08 55* – 41* – – – 96* –
246 191 189 148 – 84 435 423
* Share options granted in the year.
The above share awards expire 60 days after the earliest vesting date.
Deferred Bonus
As reported fully in previous years, Rupert Dickinson and Andrew Cunningham participate in a one-off deferred bonus
scheme as detailed below:
Equivalent number of shares,
based on average share price First tranche – vested Second tranche – to vest
Original monetary 1 Oct 00 – 30 Sep 01 11 Dec 03 (mid-market in Dec 05 following results
amount (£1.4264) 5p Shares value £3.15) 5p Shares announcement* 5p Shares
Rupert Dickinson £600,000 420,650 210,325 210,325
Andrew Cunningham £300,000 210,320 105,160 105,160
* Providing still in full time employment and not under notice to leave.
Sean Slade announced his resignation on 12 November 2004. The remuneration committee awarded him 15,055 shares
and 37,635 options under current long-term incentive schemes. Sean exercised these options in October 2005 making a
gain of £93,147. These awards took into account the time elapsed since the grant of the awards and the performance of
the group as required by the rules of the scheme. All other share awards and share options under current long-term
incentive schemes lapsed.
Sean also received 13,275 shares relating to the matching award which would have vested in December 2005. Just prior to
resignation he exercised 51,365 approved share options making a gain of £142,076 and he retained 38,560 options which
were exercised in May 2005 making a gain of £124,772.
Sean’s share options under the SAYE scheme lapsed on his leaving the company. All of the share awards and share options shown
in the tables and notes above are based on 5p ordinary shares including the comparatives which have been restated accordingly.
On behalf of the board
Bill Tudor John
Chairman of the Remuneration Committee
20 December 2005 59
The directors present their report and the audited financial
statements for the year ended 30 September 2005.
Principal activities
During the year the group has continued its activities of
property trading and development.
Review of business development and prospects
Development of the group’s activities and its prospects are
reviewed in the chairman’s statement on pages 18 and 19
and the chief executive’s statement on pages 20 to 24.
Results for the year
The results of the group are set out in the consolidated
profit and loss account on page 66 which shows a profit 
on ordinary activities after taxation for the financial year 
of £26.5m (2004: £33.0m).
An interim dividend of 1.70p per share (2004: 0.81p) was
paid on 22 July 2005 amounting to £2.2m (2004: £1.0m)
and the directors recommend the payment of a final
dividend of 3.41p per share (2004: 3.84p), to be paid on 
8 March 2006, amounting to £4.4m (2004: £4.7m). The
profit, after dividend, of £19.9m (2004: £27.3m) will be
transferred to reserves.
Directors
The directors of the company who served during the year
are listed on page 56. 
Directors’ and other interests
The interests of the directors in the shares of the company
at 30 September 2005 and 6 December 2005, with
comparative figures as at 1 October 2004 (or date of
appointment, if later), are as follows:
Directors’ report for the year ended 30 September 2005.
Ordinary shares of 5p each (thousands)
Beneficial Non-beneficial
1 Oct* 30 Sept 6 Dec 1 Oct* 30 Sept 6 Dec
2004 2005 2005 2004 2005 2005
Robert Dickinson 1,008 958 958 2,286 2,102 2,102
Stephen Dickinson 3,856 3,758 3,758 2,705 2,436 2,436
Rupert Dickinson 1,246 1,248 1,248 214 212 212
Robin Broadhurst – ––– – –
Andrew Cunningham 371 371 372 – – –
John Barnsley 14 14 14 – – –
Robert Hiscox – – 10 12,500 10,227 10,227
Bill Tudor John** – ––– – –
6,495 6,349 6,360 17,705 14,977 14,977
* or date of appointment, if later
** Bill Tudor John was appointed on 24 February 2005.
Shares held in trust of which Robert Dickinson is a trustee, included in the above beneficially owned by:
Ordinary shares of 5p each (thousands)
Beneficial Non-beneficial
1 Oct* 30 Sept 6 Dec 1 Oct* 30 Sept 6 Dec
2004 2005 2005 2004 2005 2005
Stephen Dickinson 5 ––– – –
Rupert Dickinson 5 ––– – –
Andrew Cunningham 5 ––– – –
* or date of appointment, if later
All of the shareholdings shown above and in the tables on page 60 are based on 5p ordinary shares including the
comparatives which have been restated accordingly. Save as disclosed above, as at 6 December 2005, the
company is aware of the following interests amounting 
to 3% or more in the company’s shares:
5p shares
(thousands) Holding %
Schroder Investment 
Management Limited* 9,221 7.13
Taube Hodson and 
Stonex Partners Limited* 7,787 6.02
Aberforth Partners* 6,566 5.07
F&C Asset Management Plc* 5,316 4.11
Morley Fund Management Limited* 4,552 3.52
Majedie Asset Management* 4,203 3.25
* Shares held by funds managed or advised by the company indicated
and/or its subsidiaries. 
The company is not aware of any other substantial interests amounting
to 3% or more.
Retirement of directors
On 12 November 2004 Sean Slade resigned from the
Board. Robin Herbert and Nichola Pease resigned from 
the board on 24 February 2005.
Directors’ interests in significant contracts
No directors were materially interested in any contract 
of significance.
Insurance of directors
The group maintains insurance for Grainger Trust plc’s
directors in respect of their duties as director.
Statement of directors’ responsibilities
The directors are required by UK Company law to prepare
financial statements for each financial year that give a true
and fair view of the affairs of the company and the group
as at the end of the financial year and of the profit and loss
of the group for that period.
The directors confirm that suitable accounting policies have
been used and applied consistently and that reasonable
and prudent judgements and estimates have been made 
in the preparation of the financial statements for the year
ended 30 September 2005. The directors also confirm that
applicable accounting standards have been followed and
that the financial statements have been prepared on the
going concern basis.
The directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time
the financial position of the company and the group and to
enable them to ensure that the financial statements comply
with the Companies Act 1985. They are also responsible
for safeguarding the assets of the company and of the
group, and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Acquisitions
On 15 April 2005 the company acquired City North 
Group plc, an AIM listed company. A group company also
acquired a 50% stake in Grainger Geninvest LLP in June
2005. Full details of these and other minor acquisitions 
are given in notes 11 and 26 to the accounts.
Shares held in trust of which Robert Dickinson and Stephen Dickinson are both trustees, included in the above 
non-beneficial holdings:
Ordinary shares of 5p each (thousands)
Beneficial Non-beneficial
1 Oct 30 Sept 6 Dec 1 Oct 30 Sept 6 Dec
2004 2005 2005 2004 2005 2005
– ––69 – –
Details of directors’ share options are given on page 57.
Directors’ report continued
60 Grainger Trust plc Annual report and accounts 2005 61
Creditor payment policy
It is the group’s policy to pay suppliers in accordance with
their normal terms and conditions of trading. Payment in
respect of the purchase of property is subject to and will
comply with contractual terms. Trade creditors existing at
30 September 2005 relating to purchases of property stock
generally complete 28 days after exchange of contracts.
Trade creditor days relating to other trade creditors of 
the company and group were calculated as 30 days 
(2004: 30 days).
Charitable donations
During the year the group made charitable donations
amounting to £42,234 (2004: £25,455).
Health and safety
The company seeks to achieve the highest standards in
respect of health and safety of employees, and the safety
of tenants. Consultants are employed to ensure that the
company complies with health and safety regulations and
each year the gas supply and appliances within all of the
group’s relevant residential properties are independently
inspected under the Gas Safety (Installation and Use)
Amended Regulations 1996 and certificates of compliance
issued. This year the group has also created and filled a
new permanent position of Health and Safety Manager.
Employment of disabled persons
The company gives full and fair consideration to applications
for employment made by disabled persons, having regard
to their particular aptitudes and abilities. In the event of an
employee becoming disabled every effort is made to ensure
that their employment within the company continues and
that appropriate training is arranged where necessary. 
It is the policy of the company that the training, career
development and promotion of disabled persons should, 
as far as possible, be identical to that of other employees.
Employee involvement
The group places considerable value on the involvement 
of its employees and has continued its practice of keeping
them informed on matters affecting them as employees,
for example, eligibility to join company share schemes, 
and on the various factors affecting the performance 
of the group. Communication is made using the intranet,
‘The Source’, and through regular meetings with, and
presentations by senior management.
Auditors
PricewaterhouseCoopers LLP have expressed their
willingness to continue in office as auditors to the 
company and group. A resolution to reappoint them 
as auditors to the company will be proposed at the 
next Annual General Meeting.
Issue of shares
As disclosed in Note 20 to the financial statements, 
the company issued 5,319,374 ordinary shares during 
the year based on 5p ordinary shares, for consideration 
of £20,456,391.
By order of the Board
Marie Glanville
Company Secretary
20 December 2005  We have audited the financial statements which comprise
the statement of accounting policies, the consolidated
profit and loss account, the statement of group total
recognised gains and losses, note of group historical cost
profits and losses, balance sheets, the consolidated cash
flow statement, and the related notes. We have also
audited the disclosures required by Part 3 of Schedule 7A
to the Companies Act 1985 contained in the remuneration
committee report (‘the auditable part’). 
Respective responsibilities of directors and auditors 
The directors’ responsibilities for preparing the annual
report and the financial statements in accordance with
applicable United Kingdom law and accounting standards
are set out in the statement of directors’ responsibilities.
The directors are also responsible for preparing the
remuneration committee report. 
Our responsibility is to audit the financial statements and
the auditable part of the remuneration committee report in
accordance with relevant legal and regulatory requirements
and United Kingdom Auditing Standards issued by the
Auditing Practices board. This report, including the opinion,
has been prepared for and only for the company’s
members as a body in accordance with Section 235 of the
Companies Act 1985 and for no other purpose. We do
not, in giving this opinion, accept or assume responsibility
for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing. 
We report to you our opinion as to whether the financial
statements give a true and fair view and whether the
financial statements and the auditable part of the
remuneration committee report have been properly
prepared in accordance with the Companies Act 1985. 
We also report to you if, in our opinion, the directors’
report is not consistent with the financial statements, 
if the company has not kept proper accounting records, 
if we have not received all the information and
explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and
transactions is not disclosed. 
We read the other information contained in the annual
report and consider the implications for our report if we
become aware of any apparent misstatements or material
inconsistencies with the financial statements. The other
information comprises all sections up to and including the
chairman’s statement, the chief executive’s statement, the
operating and financial review, the corporate governance
report, the directors’ report, the corporate social
responsibility report and the unaudited part of the
remuneration committee report. 
We review whether the corporate governance statement
reflects the company’s compliance with the nine provisions
of the 2003 FRC Combined Code specified for our review
by the Listing Rules of the Financial Services Authority, and
we report if it does not. We are not required to consider
whether the board’s statements on internal control cover 
all risks and controls, or to form an opinion on the
effectiveness of the company’s or group’s corporate
governance procedures or its risk and control procedures. 
The maintenance and integrity of the Grainger Trust plc
website is the responsibility of the directors; the work
carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to
the financial statements since they were initially presented
on the website.
Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions. 
Basis of audit opinion 
We conducted our audit in accordance with auditing
standards issued by the Auditing Practices board. An audit
includes examination, on a test basis, of evidence relevant to
the amounts and disclosures in the financial statements and
the auditable part of the remuneration committee report. It
also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the
financial statements, and of whether the accounting policies
are appropriate to the company’s circumstances, consistently
applied and adequately disclosed. 
Independent auditors’ report to the members of Grainger Trust plc
62 Grainger Trust plc Annual report and accounts 2005 63
We planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the financial statements and
the auditable part of the remuneration committee report
are free from material misstatement, whether caused by
fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation
of information in the financial statements and the auditable
part of the remuneration committee report. 
Opinion 
In our opinion: 
• the financial statements give a true and fair view of 
the state of affairs of the company and the group at
30 September 2005 and of the profit and cash flows 
of the group for the year then ended; 
• the financial statements have been properly prepared 
in accordance with the Companies Act 1985; and 
• those parts of the remuneration committee report
required by Part 3 of Schedule 7A to the Companies Act
1985 have been properly prepared in accordance with
the Companies Act 1985. 
PricewaterhouseCoopers LLP
Chartered accountants and registered auditors 
Newcastle upon Tyne 
20 December 2005  A summary of the principal accounting policies is set out
below. The policies have been applied consistently in all
material respects throughout the current and the previous year.
Accounting convention
The group prepares its annual financial statements on 
the historical cost basis of accounting, as modified by the
revaluation of investment properties and in accordance
with the Companies Act 1985 and applicable UK
accounting standards.
Basis of consolidation
The group financial statements comprise the consolidated
financial statements of the company and its subsidiaries.
The financial statements of subsidiary companies are made
up to 30 September.
The results of subsidiaries sold or acquired are included 
in the consolidated profit and loss account up to, or 
from, the date control passes. Intra-group sales and profits
are eliminated fully on consolidation. On acquisition of 
a subsidiary, all of the subsidiary’s assets and liabilities 
that exist at the date of acquisition are recorded at their
provisional fair values reflecting their condition at that date.
Goodwill arising on consolidation represents the difference
between the fair value of the consideration paid and the
fair value of the identifiable assets acquired. Goodwill
arising on the acquisition of subsidiaries prior to
30 September 1998 was eliminated or credited immediately
against reserves and will be transferred to the profit and
loss account on subsequent disposal of the business to
which it relates. Goodwill arising subsequent to that date 
is shown in the balance sheet under fixed assets. Positive
goodwill is amortised through the profit and loss account
over its estimated useful economic life. Negative goodwill 
is amortised through the profit and loss account over the
period in which the non-monetary assets are realised either
through depreciation or sale.
Turnover
Turnover comprises gross sale proceeds of trading
properties and developments, gross rentals, commissions
and sundry other income, and is exclusive of VAT. Sales 
of land and properties are only recognised when the cash
proceeds are received in full or the group has entered 
into a legally binding undertaking. Gross rentals and
commissions are recognised as they fall due.
Joint ventures
In compliance with FRS9, the group accounts for joint
ventures under the gross equity method. Under this
method, the group’s share of the Joint Venture’s turnover
and profits and losses are separately disclosed in the group’s
profit and loss account. The group’s share of the gross
assets and gross liabilities, together with goodwill, is shown
on the face of the balance sheet. The group’s statement of
total recognised gains and losses includes its share of the
Joint Venture’s total recognised gains and losses.
Repairs and improvements
Repairs are charged in the year they are incurred.
Improvement costs are capitalised.
Pensions
Contributions to defined contribution schemes are charged to
the profit and loss account in the year to which they relate.
The Bromley Property Holdings Limited group currently
contributes to a defined benefits scheme, which was closed
to new members and employee contributions in 2003.
Funding requirements are assessed with the advice of an
independent qualified actuary. Actuarial valuations are
carried out every three years. The group will continue to
contribute so as to spread the cost over the expected
remaining life of the relevant employees. The transitional
disclosure requirements of FRSI7, ‘Retirement Benefits’, 
are given in note 27 to the financial statements.
Tangible fixed assets
The cost of fixed assets is their purchase cost, together
with any incremental costs of acquisition.
In accordance with SSAP 19, (i) investment properties are
revalued annually and the aggregate surplus or temporary
deficit is transferred to a revaluation reserve, and (ii) no
depreciation or amortisation is provided in respect of freehold
investment properties and leasehold investment properties
with over 20 years to run. Permanent diminutions in value
below cost are charged in the profit and loss account. The
requirement of the Companies Act 1985 is to depreciate all
properties, but that requirement conflicts with the generally
accepted accounting principle set out in SSAP 19. The
directors consider that to depreciate such properties would 
not give a true and fair view, as the properties are not held for
consumption but for investment, and that a true and fair view
is given by following SSAP 19 as described above. The effect
Statement of accounting policies
64 Grainger Trust plc Annual report and accounts 2005 65
of depreciation and amortisation on value is already reflected
annually in the valuation of properties, and the amount
attributed to this factor by the valuers cannot reasonably be
separately identified or quantified. Had the provisions of the
Act been followed, net assets would not have been affected
but profits would have been reduced for this and earlier years.
Investment properties are revalued every year by our in-
house Chartered Surveyors and the valuations are reviewed
and approved by the directors. The basis of valuation is
explained in note 10 to the financial statements. 
Depreciation is calculated so as to write off the cost of
tangible fixed assets (excluding investment properties), less
their estimated residual values, over the expected useful
economic lives of the assets concerned. The principal
annual rates used for this purpose are:
% Method
Fixtures, fittings and equipment 20 Straight line
Investments
Investments in subsidiaries and other investments are
included in the financial statements at cost less provisions
for permanent diminution of value.
Stocks
Tenanted residential properties are shown in the financial
statements at the lower of cost to the group and net
realisable value. Cost to the group includes legal and
surveying charges incurred during acquisition together 
with improvement costs. Net realisable value is the net 
sale proceeds which the group expects on sale of a
property with vacant possession.
Development and trading properties are shown in the
financial statements at the lower of cost to the group 
and net realisable value. Cost represents the acquisition
price together with subsequent development costs net of
amounts transferred to cost of sales. Net realisable value 
is the current market value which the group expects to
receive on sale net of associated selling costs. 
Derivative financial instruments
The group uses derivative financial instruments to reduce
exposure to interest rate movements. The group does 
not hold or issue derivative financial instruments for
speculative purposes.
For an interest rate swap to be treated as a hedge the
instrument must be related to actual assets or liabilities 
or a probable commitment and must change the nature 
of the interest rate by converting a fixed rate to a variable
rate or vice versa. Interest differentials under these swaps
are recognised by adjusting net interest payable over the
periods of the contracts.
If an instrument ceases to be accounted for as a hedge, 
for example because the underlying hedged position is
eliminated, the instrument is marked to market and any
resulting profit or loss recognised at that time.
Deferred taxation
Deferred tax is measured at the rate expected to apply in
the periods in which the timing differences are expected 
to reverse, based on tax rates and laws that have been
enacted by the balance sheet date. Deferred tax is
measured on a non-discounted basis.
A net deferred tax asset is regarded as recoverable and
therefore recognised only when, on the basis of all evidence
available, it can be regarded as more likely than not that there
will be suitable taxable profits from which the future reversal
of the underlying timing differences can be deducted.
Deferred taxation is not recognised when fixed assets are
revalued unless by the balance sheet date there is a binding
agreement to sell the revalued assets and the gain or loss
expected to arise on the sale has been recognised in the
financial statements.
Share schemes
The group operates a long-term incentive plan and a deferred
bonus scheme. In accordance with UITF17 ‘Employee share
schemes’, the costs are expensed on a straight-line basis over
the period in which performance is measured. The amount to
be expensed is based upon an estimate of the probability that
the performance criteria will be met. Shares in the company
are held by The Grainger Trust Employee Trustee Company
Limited to meet the group’s obligations under these schemes.
The assets, income and costs of this trustee company are
included in these financial statements.
Loan issue costs
Costs incurred in raising loan finance are capitalised and 
set off against the outstanding debt in the balance sheet.
The costs are charged to profit and loss account on a
straight line basis over the term of the facility. 2005 2004
For the year ended 30 September 2005 notes £m £m
Turnover (including share of joint ventures) 1 226.9 217.4
Less: share of turnover of joint ventures and associates (0.6) –
Group turnover 226.3 217.4
Gross rentals 45.5 41.0
Trading profits 74.8 72.6
Other income 2.9 9.8
123.2 123.4
Less:
Property expenses (24.3) (22.7)
Administrative expenses (9.4) (7.5)
Operating profit – group and share of joint ventures and associates 89.5 93.2
Net profit on disposal of and provisions against fixed assets
– Group 2 2.1 6.5
Profit on ordinary activities before interest 91.6 99.7
Net interest payable and similar charges
– Group normal (49.1) (40.1)
– Group exceptional 3, 4 – (5.4)
– Joint venture 3 (0.4) –
3 (49.5) (45.5)
Profit on ordinary activities before taxation 1, 5 42.1 54.2
Tax on profit on ordinary activities 7 (15.6) (21.2)
Profit on ordinary activities after taxation 26.5 33.0
Dividends 8 (6.6) (5.7)
Retained profit for the year 21 19.9 27.3
Basic earnings per share 9 21.2p 26.8p
Diluted earnings per share 9 20.9p 26.7p
Basic earnings per share before exceptional item 9 21.2p 29.9p
All results relate to continuing operations.
Consolidated profit and loss account 
66 Grainger Trust plc Annual report and accounts 2005 67
2005 2004
For the year ended 30 September 2005 notes £m £m
Profit on ordinary activities attributable to shareholders 26.5 33.0
Taxation on realisation of property revaluation gains 
of previous years 7 – (0.4)
Unrealised surplus on revaluation of properties 10, 21 5.4 4.3
Total gains and losses recognised since the last annual report 31.9 36.9
Note of group historical cost profits and losses
2005 2004
For the year ended 30 September 2005 notes £m £m
Reported profit on ordinary activities before taxation 42.1 54.2
Realisation of property revaluation gains of previous years 21 1.6 5.1
Historical cost profit on ordinary activities before taxation 43.7 59.3
Taxation (15.6) (21.6)
Dividends (6.6) (5.7)
Retained historical cost profit for the year 21.5 32.0
Statement of group total recognised gains and losses Group Company
2005 2004 2005 2004
At 30 September 2005 notes £m £m £m £m
Fixed assets
Intangible assets 12 (81.3) (84.8) – –
Tangible assets 10 224.4 106.7 0.7 0.6
Investments 11 15.4 10.3 140.9 91.3
Investments in joint ventures 11
Share of gross assets 44.7 – – –
Share of gross liabilities (28.3) – – –
Goodwill 1.5 – – –
17.9 – – –
Investments in associates 11 0.1 – – –
33.4 10.3 140.9 91.3
176.5 32.2 141.6 91.9
Current assets
Stocks 14 961.5 918.6 – –
Debtors 15 12.9 10.6 52.5 146.4
Cash at bank and in hand 16 53.3 53.8 1.7 0.7
1,027.7 983.0 54.2 147.1
Creditors: amounts falling due 
within one year 17 (76.2) (109.0) (7.6) (71.8)
Net current assets 951.5 874.0 46.6 75.3
Total assets less current liabilities 1,128.0 906.2 188.2 167.2
Creditors: amounts falling due after more 
than one year 17 (895.9) (717.9) – –
Provisions for liabilities and charges 19 (8.5) (10.4) – –
Net assets 223.6 177.9 188.2 167.2
Capital and reserves
Called-up equity share capital 20 6.5 6.2 6.5 6.2
Share premium account 21 21.6 21.5 21.6 21.5
Revaluation reserve 21 17.7 13.9 – –
Merger reserve 21 20.1 – – –
Capital redemption reserve 21 0.2 0.2 0.2 0.2
Profit and loss account 21 157.5 136.1 159.9 139.3
Equity shareholders’ funds 22 223.6 177.9 188.2 167.2
The financial statements on pages 64 to 94 were approved by the board of directors on 20 December 2005 and were
signed on their behalf by:
Rupert Dickinson Andrew Cunningham
Director Director
Balance sheets
68 Grainger Trust plc Annual report and accounts 2005 69
Consolidated cash flow statement
2005 2004
For the year ended 30 September 2005 notes £m £m
Net cash inflow from operating activities 25 19.3 56.7
Returns on investments and servicing of finance
Interest received 2.2 3.3
Interest paid – normal (49.9) (42.2)
– exceptional – (5.4)
Dividends received 0.1 0.2
(47.6) (44.1)
Taxation
UK Corporation tax paid (16.6) (24.1)
Capital expenditure and financial investment
Purchase of fixed asset investments (8.4) (4.5)
Purchase of tangible fixed assets (18.8) (29.8)
Sale of fixed asset investments – 1.2
Sale of tangible fixed assets 13.3 41.1
(13.9) 8.0
Acquisitions and disposals
Purchase of subsidiaries 26 (39.8) (2.3)
Costs on purchase of subsidiaries 26 (1.5) –
(Overdraft)/cash acquired on purchase of subsidiaries 26 (0.3) 0.2
Investments in associates and joint ventures 11 (11.1) –
(52.7) (2.1)
Equity dividends paid (6.9) (4.2)
Cash outflow before financing (118.4) (9.8)
Financing
New loans raised 24 170.0 726.1
Repayment of loans 24 (52.2) (743.7)
Purchase of shares – (0.6)
Issue of shares 21 0.1 0.1
Net cash inflow/(outflow) from financing 117.9 (18.1)
Decrease in cash in the year 23, 24 (0.5) (27.9) 1 Segmental analysis by class of business
The analysis by class of business of the group’s turnover, profit before taxation, and net assets is set out below:
Turnover and profit before taxation
2005 2004
2005 Profit before 2004 Profit before
Turnover taxation Turnover taxation
£m £m £m £m
Class of business
Continuing operations
Tenanted residential 171.4 81.2 157.5 76.1
Development and trading 54.9 10.4 59.9 23.6
226.3 91.6 217.4 99.7
Joint ventures and associates 0.6 – ––
226.9 91.6 217.4 99.7
Net interest payable – group – (49.1) – (45.5)
Net interest payable – joint venture – (0.4) ––
226.9 42.1 217.4 54.2
The Joint Venture activities encompass both Tenanted residential and Development and trading.
Net assets
Net assets Adjusted net assets*
2005 2004 2005 2004
£m £m £m £m
Class of business
Continuing operations
Tenanted residential 181.8 148.0 659.1 623.6
Development and trading 41.8 29.9 63.2 54.7
223.6 177.9 722.3 678.3
* Adjusted net assets represent balance sheet net assets plus the excess of market value over book cost of trading stock as valued on the same basis 
as disclosed in note 10, plus the market value of other investments, net of minority interest. Adjusted net assets exclude any provision for contingent
taxation. Turnover between segments is immaterial.
Analysis by geographical area
Group turnover relates solely to operations carried out within the United Kingdom.
Notes to the financial statements
70 Grainger Trust plc Annual report and accounts 2005 71
2 Net profit on disposal of and provisions against fixed assets
2005 2004
£m £m
Group
Profit on disposal of investment properties 2.1 6.5
3 Net interest payable and similar charges
2005 2004
£m £m
Group
Bank loans and overdrafts 49.3 38.4
Debentures and other loans 1.5 2.7
Other interest costs 0.8 2.5
51.6 43.6
Less:
Income from listed fixed asset investments (0.3) (0.2)
Interest receivable (2.2) (3.3)
49.1 40.1
Exceptional item:
Cost of redemption of loans and debenture stock (note 4) – 5.4
49.1 45.5
Joint venture
Bank loans and overdrafts 0.4 –
Group and joint venture 49.5 45.5
All interest payable is charged to the profit and loss account. No interest has been capitalised in this or prior periods. 4 Exceptional item
2005 2004
£m £m
Cost of early redemption of loans and debenture stock – 5.4
The exceptional item in 2004 was paid in cash during the course of that year and represented the premium paid upon early
redemption of quoted debentures and penalties on the early repayment of loans.
5 Profit on ordinary activities before taxation
2005 2004
£m £m
Profit on ordinary activities before taxation is stated after charging:
Depreciation of owned tangible fixed assets 0.4 0.4
Auditors’ remuneration (including expenses) 
(Company £6,000 (2004: £6,000)) 0.1 0.1
Write off of goodwill on acquisition of associates 0.4 –
And after crediting:
Amortisation of negative goodwill 5.9 7.6
Remuneration of the company’s auditors for the provision of non-audit services to the company and its UK subsidiary
undertakings was £169,000 (2004: £61,000). Of this £101,000 (2004: £34,000) related to tax advisory services, 
£54,000 related to the acquisition of City North Group plc and £14,000 to other services.
6 Directors and employees
2005 2004
£m £m
Staff costs (including executive directors) during the year:
Wages and salaries 8.6 7.5
Social security costs 1.1 1.1
Other pension costs (see note 27) 0.7 0.9
Cost of employee share schemes 0.6 1.3
11.0 10.8
The average weekly number of persons employed by the group during the year (including executive directors) was 188
(2004: 164). All employees were involved in the management and/or administration of the group. Details of directors’
remuneration (including pensions), directors’ share options and interests in the long-term incentive plan are provided 
in the remuneration committee report on pages 56 to 58.
The company contributed to defined contribution schemes for three directors during the year (2004: three directors).
Notes to the financial statements continued
72 Grainger Trust plc Annual report and accounts 2005 73
7 Taxation
2005 2004
£m £m
Analysis of charge in year
Current tax:
Group
UK corporation tax on profits for the period 17.9 20.8
Adjustments in respect of prior periods – (0.6)
Transferred to appropriate reserve (see below) – (0.4)
Total current tax 17.9 19.8
Deferred tax:
Origination and reversal of timing differences
Group 0.7 1.4
Adjustments in respect of prior periods (3.0) –
Total deferred tax (2.3) 1.4
Tax on profit on ordinary activities 15.6 21.2
The group allocates the tax arising on the sale of investment properties between the profit and loss account and the
appropriate reserve to match the accounting treatment of the gain arising. Tax attributable to the exceptional interest
charges in 2004 was a credit of £1.6m.
Factors affecting the tax charge for the year
The tax assessed for the year is higher than the standard rate of corporation tax in the UK (30%).
The differences are explained below:
2005 2004
£m £m
Profit on ordinary activities before tax 42.1 54.2
Profit on ordinary activities before tax at a rate of 30% 12.6 16.3
Expenses not deductible for tax purposes 0.4 0.6
Effect of negative goodwill written back (1.8) (2.3)
Tax on fair values released on sales 7.4 7.2
Effect of timing differences (0.7) (0.5)
Difference between tax and accounting profit on disposals – (0.9)
Adjustments in respect of prior periods – (0.6)
Total current tax 17.9 19.8
Factors that may affect future tax charges
No provisions for deferred tax have been made on gains which would become payable if the group’s investment properties
were sold at their year end values. The estimate of unprovided deferred tax is £23.6m (2004: £15.9m). 7 Taxation continued
FRS19 prohibits the making of provisions for contingent tax liabilities on the fair value of properties on the acquisition of
companies. It had previously been industry practice to make partial provision for such liabilities as part of the fair value
exercise on acquisition. Thus there is a greater tax charge on property sales where there is no brought forward contingent
tax provision available to be utilised in its reduction. 
The total contingent tax to the group on the difference between original cost and carrying value of trading properties 
not provided at 30 September 2005 is £76.9m (2004: £83.3m).
8 Dividends
2005 2004
£m £m
Dividends on equity shares:
Ordinary – interim paid of 1.7p per share (2004: 0.81p per share) 2.2 1.0
Ordinary – final proposed of 3.41p per share (2004: 3.84p per share) 4.4 4.7
6.6 5.7
9 Earnings per share
The calculation of basic, diluted and adjusted earnings per share is based on the following earnings and number of shares:
Year ended 30 September 2005 Year ended 30 September 2004
Weighted Weighted
Profit average Profit average
for the number Earnings for the number Earnings
year of shares per share year of shares per share
£m (thousands) pence £m (thousands) pence
Basic earnings per share 
Profit attributable to shareholders 26.5 125,077 21.2 33.0 122,815 26.8
Exceptional item (note 4) less tax––– 3.8 – 3.1
Adjusted earnings 26.5 125,077 21.2 36.8 122,815 29.9
Effect of dilutive securities 
Options and shares – 1,770 (0.3) – 720 (0.1)
Diluted earnings per share
Profit attributable to shareholders 26.5 126,847 20.9 33.0 123,535 26.7
Exceptional item (note 4) less tax––– 3.8 – 3.1
Adjusted earnings 26.5 126,847 20.9 36.8 123,535 29.8
The adjusted earnings per share is presented as, in the opinion of the directors, it gives a better picture of the underlying
performance of the business.
The company completed a five for one share split on 25 February 2005. As such, the weighted average number of shares
and earnings per share above, including the comparatives which have been restated, are based on 5p ordinary shares
rather than 25p ordinary shares.
Notes to the financial statements continued
74 Grainger Trust plc Annual report and accounts 2005 75
10 Tangible fixed assets
Group Company
fixtures, fixtures,
Investment fittings and fittings and
properties equipment Total equipment
£m £m £m £m
Cost or valuation
At 1 October 2004 105.4 2.2 107.6 1.2
Surplus on revaluation 5.4 – 5.4 –
Acquisition of subsidiary 110.8 – 110.8 –
Additions 17.8 1.0 18.8 0.3
Disposals (11.9) – (11.9) –
Transfers to investment in joint ventures (5.0) – (5.0) –
At 30 September 2005 222.5 3.2 225.7 1.5
Depreciation
At 1 October 2004 – 0.9 0.9 0.6
Charge for year – 0.4 0.4 0.2
Released on disposals ––––
At 30 September 2005 – 1.3 1.3 0.8
Net book value
At 30 September 2005 222.5 1.9 224.4 0.7
At 30 September 2004 105.4 1.3 106.7 0.6
Group investment properties were revalued at their open market value at 30 September 2005 by our in-house Chartered
Surveyors and the valuations were reviewed and approved by the directors. A structured sample of the in-house valuations
has also been reviewed by Allsop & Co., Chartered Surveyors, independent of the company. Based on the results of that
review, Allsop & Co. have concluded that they have a high degree of confidence in those valuations. These represent
estimates of the open market value of the properties subject to the tenancies then existing. 
The net book value of investment properties comprises:
Group
2005 2004
£m £m
Freehold 211.7 97.7
Long leasehold 10.8 7.7
Net book value 222.5 105.4
If investment properties had not been revalued, they would have been included at the following amounts:
Group
2005 2004
£m £m
Net book value 214.3 101.0 11 Fixed asset investments
Group Company
Investment Investment Investment 
in joint in Other in Other
ventures associates investments Total subsidiaries investments Total
£m £m £m £m £m £m £m
Cost
At 1 October 2004 – – 10.3 10.3 84.3 7.0 91.3
Additions – net assets 8.5 1.1 8.4 18.0 41.2 8.4 49.6
– goodwill 1.5 – – 1.5 – – –
Transfers 3.3 – (3.3) –
Transferred from investment properties 5.0 – – 5.0 – – –
Write off of investment – (0.9) – (0.9) – – –
Share of losses (0.4) (0.1) – (0.5) – – –
At 30 September 2005 17.9 0.1 15.4 33.4 125.5 15.4 140.9
Additions to the company investment in subsidiaries of £41.2m is net of the premium on the shares issued to acquire 
City North Group plc of £20.1m (see note 21).
Investments in joint ventures relate to an £8.8m investment in Grainger Geninvest LLP in which the group holds a 50%
stake, a £5.0m investment in a joint venture with Grange (Prescot Street) Limited in which the group holds a 50% stake
and a £4.1m investment in a limited partnership, Regen (NT) LLP to develop Smith Docks in North Tyneside in which the
group holds a 33
1
⁄3% stake.
Group
other investments
2005 2004
£m £m
Investments at net book value include:
Investments listed on a recognised stock exchange 15.4 7.0
Aggregate market value of listed investments 18.2 9.7
The directors consider that providing details of all subsidiaries, joint ventures and associates as at 30 September 2005
would result in disclosure of excessive length. The following information relates to those subsidiary undertakings whose
results or financial position, in the opinion of the directors, principally affected the figures of the group. A full list will be
appended to the next Annual Return.
Notes to the financial statements continued
76 Grainger Trust plc Annual report and accounts 2005 77
11 Fixed asset investments continued
Proportion of nominal value of
ordinary issued shares held by:
Name of undertaking Group % Company % Activity
Northumberland Property & Durham Trust Limited 100 – Property trading
GIP Limited 100 – Property trading & investment 
N & D London Limited 100 – Property management
Grainger Residential Management Limited 100 100 Property management
City North Group plc 100 100 Property investment
Derwent Developments Limited 100 – Land development
BPT (Bradford Property Trust) Limited 100 – Property trading
BPT (Assured Homes) Limited 100 – Property investment
BPT (Residential Investments) Limited 100 – Property investment
Bromley Property Investments Limited 100 – Finance company
Home Properties Limited 100 – Property trading
Grainger Homes Limited 100 – House-building
All subsidiaries are consolidated in the group accounts, and all subsidiaries whose results materially affect the figures of the
group are incorporated in England and Wales and operate within the United Kingdom.
12 Intangible assets
Group
Positive Negative
goodwill goodwill Total
£m £m £m
Cost
At 1 October 2004 0.3 (94.0) (93.7)
Additions – (2.4) (2.4)
At 30 September 2005 0.3 (96.4) (96.1)
Amortisation
At 1 October 2004 – 8.9 8.9
Amortisation for year – 5.9 5.9
At 30 September 2005 – 14.8 14.8
Net book value
At 30 September 2005 0.3 (81.6) (81.3)
At 30 September 2004 0.3 (85.1) (84.8)
The goodwill and negative goodwill arising on acquisitions are being amortised in line with the disposal of acquired assets.
Negative goodwill arising in the year of £2.4m relates to the acquisition of City North Group plc (see note 26). £5.3m of 
the amortisation in the year was recognised within trading profits and £0.6m within profit on disposal of fixed assets. 13 Capital commitments
The group had capital commitments contracted but not provided for of £nil at 30 September 2005 (2004: £nil).
14 Stocks
Group
2005 2004
£m £m
Trading and development properties 961.5 918.6
The market value of the group’s trading and development properties is £1,374.7m (2004: £1,332.5m), as valued on the
same basis as disclosed in note 10 for investment properties.
15 Debtors
Group Company
2005 2004 2005 2004
£m £m £m £m
Trade debtors 1.9 5.8 – –
Amounts owed by group undertakings – – 49.4 145.0
Other debtors 4.8 0.5 0.4 –
Prepayments and accrued income 3.8 2.9 2.7 1.4
Deferred tax asset (see note 19) 2.4 1.4 – –
12.9 10.6 52.5 146.4
16 Cash at bank and in hand
At 30 September 2005, bank balances included £25.4m (2004: £30.4m) which is held by lenders awaiting substitution 
of alternative security, represents deposits received or is held as a guarantee for loan note obligations.
Notes to the financial statements continued
78 Grainger Trust plc Annual report and accounts 2005 79
17 Creditors 
Group Company
2005 2004 2005 2004
£m £m £m £m
Amounts falling due within one year:
Loan notes 26.4 31.8 1.3 1.6
Deposits received 1.1 0.8 – –
Trade creditors 6.7 22.2 0.4 –
Amounts owed to group undertakings – – – 55.1
Corporation tax payable 22.0 20.5 1.0 –
Other taxation and social security 1.5 3.2 – –
Accruals and deferred income 14.1 25.8 0.5 10.4
Dividends payable 4.4 4.7 4.4 4.7
76.2 109.0 7.6 71.8
Group Company
2005 2004 2005 2004
£m £m £m £m
Amounts falling due after more than one year:
Bank loans 887.9 717.9 – –
Other creditors 8.0 – – –
895.9 717.9 – –
Other creditors of £8.0m represents deferred consideration for the purchase of land at West Waterlooville. It is payable 
in two equal instalments in April 2009 and 2013 respectively.
Group Company
2005 2004 2005 2004
£m £m £m £m
Maturity of finance debt (net of issue costs) is as follows:
In one year or less 26.4 31.8 1.3 1.6
Between two and five years 644.8 475.2 – –
Between five and ten years 201.2 199.1 – –
Over ten years 41.9 43.6 – –
914.3 749.7 1.3 1.6
Bank loans bear interest at rates between 0.9% and 1.0% above LIBOR and are secured by fixed and floating charges over
the assets of the group. Repayments are over terms of four to 27 years. Unutilised borrowing facilities of £450m out of a
total of £460m at the year end (see note 18) bear interest at rates 0.7% above LIBOR.
Loan notes carry interest at 0.75% and 1.00% below LIBOR and are payable half-yearly/quarterly or on demand. Final
redemption is at par on 30 September 2009 and 30 April 2011. 18 Financial instruments
The group’s policies relative to financial instruments are set out in the operating and financial review on page 32. 
All amounts are held in pounds sterling. Short-term debtors and creditors have been excluded from these disclosures 
as they do not have a significant impact on the financial risk profile of the group.
Interest rate risk profile of financial liabilities.
2005
Fixed rate Capped rate Floating rate
liabilities liabilities liabilities Total
£m £m £m £m
Loan notes – – 26.4 26.4
Bank debt 45.1 612.5 237.5 895.1
Total 45.1 612.5 263.9 921.5
2004
Fixed rate Capped rate Floating rate
liabilities liabilities liabilities Total
£m £m £m £m
Loan notes – – 31.8 31.8
Bank debt 45.0 456.1 223.9 725.0
Total 45.0 456.1 255.7 756.8
The interest rate profile shown above takes into account the various derivative instruments used to manage interest rate
fluctuations and is gross of issue costs.
Borrowings subject to caps, collars and swaps are included in capped rate liabilities. 
2005
Fixed rate Capped rate
weighted Weighted weighted Weighted
average average average average 
rate period rate period
% years % years
Hedge profile
Bank debt 6.3 19 6.0 4
2004
Fixed rate Capped rate
weighted Weighted weighted Weighted
average average average average 
rate period rate period
% years % years
Hedge profile
Bank debt 6.3 20 6.1 3
The fixed and capped rates are inclusive of loan margins and reflect the effective cost of finance after taking account 
of the effect of interest rate swaps.
Notes to the financial statements continued
80 Grainger Trust plc Annual report and accounts 2005 81
18 Financial instruments continued
Financial assets
The group’s financial assets at the year end consist of cash at bank and in hand of £53.3m (2004: £53.8m). The interest
rate on this is floating.
Borrowing facilities
The group had unutilised borrowing facilities at the year end amounting to £460m (2004: £230m), of which £10m expires
on 30 September 2006 and £450m expires on 23 June 2009 (2004: £10m expired on 30 September 2005 and £220m
expires on 23 June 2009).
Fair values of financial liabilities
The following fair values represent the amounts at which the financial instruments could be exchanged on an arm’s length
transaction between informed and willing parties, and exclude accrued interest.
2005 2004
Fair Fair
Book Fair value Book Fair value
value value adjustment value value adjustment
£m £m £m £m £m £m
Financial instruments:
Fixed rate bank debt 45.1 49.7 (4.6) 42.5 43.8 (1.3)
Debt fixed under one year 869.2 869.2 – 707.2 707.2 –
Derivative financial instruments:
Interest rate swaps – 11.2 (11.2) – 2.1 (2.1)
Interest rate caps – 1.4 (1.4) – (0.1) 0.1
Interest rate collars ––– – (0.1) 0.1
Total current derivatives – 12.6 (12.6) – 1.9 (1.9)
Future interest rate swaps – 0.9 (0.9) – 1.9 (1.9)
Total derivatives – 13.5 (13.5) – 3.8 (3.8)
914.3 932.4 (18.1) 749.7 754.8 (5.1)
Financial assets:
Cash (53.3) (53.3) – (53.8) (53.8) 0.0
861.0 879.1 (18.1) 695.9 701.0 (5.1)
Less amount provided (see note 19) 2.9 4.6
(15.2) (0.5)
The fair values were calculated at 30 September 2005 using interest rates and market prices prevailing at that date and
reflect the replacement values of the respective financial instruments. After deduction of provisions, this has an after tax
effect on NAV of 8p (2004: 0p).
Changes in the fair value of derivative instruments are only recognised when the position matures or terminates.
The fair value of all remaining financial assets and liabilities is equal to their book values. 18 Financial instruments continued
An analysis of the unrecognised gains and losses arising on financial instruments used as hedges is as follows:
Gains Losses Net total
£m £m £m
Gains/(losses) on hedges at 1 October 2004 0.3 (4.1) (3.8)
Losses arising in previous periods that were recognised during the year – 1.5 1.5
Gains/(losses) not recognised in the year to 30 September 2005:
Arising before 1 October 2004 0.3 (2.6) (2.3)
Arising during the year to 30 September 2005 (0.3) (10.9) (11.2)
Unrecognised gains/(losses) on hedges at 30 September 2005 – (13.5) (13.5)
Of which:
Losses expected to be recognised in the year to 30 September 2006 – (2.7) (2.7)
Losses expected to be recognised in the year to 30 September 2007 or later – (10.8) (10.8)
19 Provisions for liabilities and charges
Group
Provision for
Provision for fair value of
retirement financial
liabilities instruments Total
£m £m £m
Cost at 1 October 2004 5.8 4.6 10.4
Credited to profit and loss account (0.2) (1.7) (1.9)
At 30 September 2005 5.6 2.9 8.5
The provision for retirement liabilities reflects an estimate for the amount required to meet a shortfall in retirement liabilities
within Bromley at the date of acquisition and is being amortised over the expected remaining service lives of relevant employees.
The provision for fair value of financial instruments reflects the mark to market adjustment calculated on the financial instruments
of Bromley at the date of acquisition and is being amortised over the maturity periods of those financial instruments.
Notes to the financial statements continued
82 Grainger Trust plc Annual report and accounts 2005 83
19 Provisions for liabilities and charges continued
Deferred taxation
Amount provided Amount unprovided
2005 2004 2005 2004
£m £m £m £m
Group
Tax effect of timing differences due to:
Accelerated capital allowances 1.4 0.1 – –
Net short-term timing differences (3.8) (4.3) – –
Held over gains in stock arising from transfers from fixed assets – 2.8 – –
Revalued investment properties – – 23.6 15.9
Transferred to debtors (see note 15) 2.4 1.4 – –
Balance at 30 September 2005 – – 23.6 15.9
£m
Group
The movements on the provisions for deferred taxation are as follows:
1 October 2004 (included within debtors) (1.4)
Amount credited to profit and loss account (2.3)
Acquisition of subsidiary 1.3
Transferred to debtors (see note 15) 2.4
Balance at 30 September 2005 –
The company has no liability, potential or otherwise, to deferred taxation.
The group does not provide deferred tax on revalued investment properties, in line with FRS19 ‘Deferred taxation’, 
as there is no binding agreement to sell the revalued investment properties as at the balance sheet date.
In addition to the above, the total contingent tax to the group on the difference between original cost and carrying 
value of trading properties not provided at 30 September 2005 is £76.9m (2004: £83.3m). 20 Called-up equity share capital
2005 2004
£m £m
Company and group
Authorised:
160,000,000 (2004: 160,000,000) ordinary shares of 5p each 8.0 8.0 
Allotted, called-up and fully paid:
129,374,394 (2004: 124,055,020) ordinary shares of 5p each 6.5 6.2 
Nominal value Consideration
Number £’000 £’000
Shares issued during the year:
Purchase of subsidiary 5,189,893 260 20,347
Executive share option scheme 89,925 4 50
SAYE scheme at 93.2p 5,765 – 5
SAYE scheme at 163.6p 32,955 2 52
SAYE scheme at 186.4p 197––
SAYE scheme at 271.8p 639 – 2
5,319,374 266 20,456
Share split
The company completed a five for one share split on 25 February 2005. As such, all shares and prices per share are based
on 5p ordinary shares rather than 25p ordinary shares.
Notes to the financial statements continued
84 Grainger Trust plc Annual report and accounts 2005 85
20 Called-up share capital continued
Potential issues of ordinary shares
Certain senior executives hold options to subscribe for shares in the company under executive share option schemes at
prices ranging from 53.4p to 381.8p. In addition, the company operates a SAYE share option scheme for employees. Under
this scheme, employees hold options to subscribe for shares in the company at prices ranging from 138.0p to 334.0p.
Under these various schemes, options on 129,481 shares were exercised in the year and options on 137,459 shares lapsed.
The number of shares subject to options, the periods in which they were granted and the periods in which they may be
exercised are given below:
Exercise price Exercise 2005 2004
Year of grant (pence) period Number Number
Executive share options
1994 –
1996 68.5 1999-06 43,795 95,160
1997 53.4 2000-07 100,720 139,280
2003 191.8 2006-13 787,410 847,530
2004 326.4 2007-14 564,225 625,495
2005 381.8 2008-15 563,955 –
2,060,105 1,707,465
SAYE share options
2000 93.2 2003-06 – 5,765
2001 138.0 2004-07 26,895 26,895
2002 163.6 2005-08 66,745 110,395
2003 186.4 2006-09 95,425 96,510
2004 271.8 2007-10 102,850 107,975
2005 334.0 2008-11 47,358 –
339,273 347,540
Total share options 2,399,378 2,055,005
The number of share options and the exercise prices shown above are based on 5p ordinary shares including the
comparatives which have been restated accordingly. 21 Reserves
Capital
Share premium Merger Revaluation redemption Profit and
account reserve reserve reserve loss account
£m £m £m £m £m
Group
At 1 October 2004 21.5 – 13.9 0.2 136.1
Issue of shares 0.1 20.1–––
Investment properties:
Surplus on revaluation –– 5.4––
Realisation on disposals – – (1.6) – 1.6
Movement in own shares –––– (0.1)
Retained profit for the year –––– 19.9
At 30 September 2005 21.6 20.1 17.7 0.2 157.5
The company issued 5,189,893 ordinary shares in partial consideration for the acquisition of City North Group plc. The
issue satisfied the provisions of Section 131 of the companies Act 1985. In the consolidated accounts, the premium relating
to these shares, of £20.1m, has been credited to a merger reserve. In the company accounts, the cost of investment in City
North Group plc has been reduced by £20.1m and the premium on the shares has been disregarded.
Capital
Share premium redemption Profit and
account reserve loss account
£m £m £m
Company
At 1 October 2004 21.5 0.2 139.3
Issue of shares 0.1––
Retained profit for the year – – 20.6
At 30 September 2005 21.6 0.2 159.9
The group financial statements do not include a separate profit and loss account for the company as permitted under
section 230 of the Companies Act 1985. The amount of group profit after taxation dealt with in the financial statements 
of the parent company is £1.5m (2004: £7.3m). Included within the company’s profit and loss account balance of 
£159.9m is a total of £60.5m which is non-distributable as the profit arose on a transfer of assets between group
companies (2004: £60.5m). 
The Grainger Trust Employee Trustee Company Limited holds 1,164,380 (2004: 1,192,710) shares with a cost of £2.3m
(2004: £2.3m) and an open market value at 30 September 2005 of £5.3m (2004: £4.4m). These shares were acquired at
various dates in the open market. The trustee company uses funds provided by the group to meet the group’s obligations
under its long-term incentive scheme. These shares are retained until awarded to employees by the trustee company in
accordance with the wishes of the company.
Notes to the financial statements continued
86 Grainger Trust plc Annual report and accounts 2005 87
22 Reconciliation of movements in equity shareholders’ funds 
2005 2004
£m £m
Profit for the financial year 26.5 33.0
Dividends (6.6) (5.7)
19.9 27.3
Other recognised gains and losses for the year 5.4 3.9
Movement in own shares (0.1) (0.1)
Proceeds from ordinary shares issued for cash 0.1 0.1
Nominal value of ordinary shares issued to acquire City North Group plc 0.3 –
Premium on ordinary shares issued to acquire City North Group plc 20.1 –
Net additions to equity shareholders’ funds 45.7 31.2
Opening equity shareholders’ funds 177.9 146.7
Closing equity shareholders’ funds 223.6 177.9
23 Reconciliation of net cash flow to movement in net debt
2005 2004
£m £m
Decrease in cash (0.5) (27.9)
Cash (inflow)/outflow from (increase)/decrease in debt (117.8) 17.6
Change in net debt resulting from cash flows (118.3) (10.3)
Other non-cash items:
Loans acquired with subsidiary (44.0) –
Others (2.8) (6.1)
Movement in net debt for the year (165.1) (16.4)
Net debt at 1 October 2004 (695.9) (679.5)
Net debt at 30 September 2005 (861.0) (695.9) 24 Analysis of net debt
At 1 Oct On purchase Other non At 30 Sept
2004 Cash flow of subsidiary cash changes 2005
£m £m £m £m £m
Cash at bank and in hand 53.8 (0.5) – – 53.3
Debt due within one year (31.8) 52.2 (44.0) (2.8) (26.4)
Debt due after one year (717.9) (170.0) – – (887.9)
Total (695.9) (118.3) (44.0) (2.8) (861.0)
25 Reconciliation of group operating profit to net cash inflow from operating activities
2005 2004
£m £m
Operating profit 89.5 93.2
Depreciation 0.4 0.4
Movement in provisions for liabilities and charges (0.2) (0.2)
Provision against investment 0.9 –
Amortisation of goodwill (5.3) (6.1)
Decrease/(increase) in debtors 0.9 (2.0)
(Decrease)/increase in creditors (24.3) 1.7
Increase in stocks (42.6) (30.3)
Net cash inflow from operating activities 19.3 56.7
Notes to the financial statements continued
88 Grainger Trust plc Annual report and accounts 2005 89
26 Acquisitions
a) Acquisition of City North Group plc
The group purchased 100% of the share capital of City North Group plc on 15 April 2005. The total consideration 
of £61.3m was satisfied by shares issued of £20.4m and cash of £40.9m.
The purchase has been accounted for using the acquisition method of accounting.
The aggregate assets and liabilities acquired, and their fair values, were:
Book value Revaluations Other Fair value
£m £m £m £m
Investment properties 111.4 (0.6) 110.8
Other fixed assets 0.8 (0.8) 0.0
Debtors 0.2 0.9 1.1
Creditors (2.6) (2.6)
Bank overdraft (0.3) (0.3)
Bank loans (44.0) (44.0)
Deferred taxation (1.3) (1.3)
Net assets acquired 64.2 (1.4) 0.9 63.7
Negative goodwill (2.4)
Consideration 61.3
Consideration satisfied by:
Shares issued 20.4
Cash (including costs on acquisition of £1.5m) 40.9
61.3
The book value of the assets and liabilities have been taken from the management accounts of City North Group plc 
as at 15 April 2005.
Investment properties were valued by the directors as at 15 April 2005. 
Other fixed assets have been written off as there was no fixed asset register to support their existence or carrying value.
The other adjustment relates to the exercise of options by City North Group plc management. This was triggered by the
acquisition by Grainger and the amount received has been set up as a debtor on acquisition.
The post acquisition results and cash flows of City North Group plc are not considered material by the directors and
therefore have not been disclosed separately in the profit and loss account or cash flow statement. 26 Acquisitions continued
From the date of acquisition to 30 September 2005 City North Group plc contributed the following to group results:
£m
Turnover 2.7
Profit on ordinary activities after taxation 0.9
Increase in cash in the period 5.4
b) Other acquisition
The group purchased 100% of the share capital of Holdfield Limited on 18 October 2004. Fair value adjustments of £0.3m
were made to revalue trading stock acquired to market value.
£m
Book value of net assets acquired 0.1
Fair value adjustments 0.3
Consideration satisfied by cash 0.4
27 Pension schemes
The group operates a defined contribution pension scheme for its employees. The assets of the scheme are held separately
from those of the group in independently administered funds. Pension arrangements for executive directors are disclosed in
the remuneration committee report. The pension cost charge in these financial statements represents contributions payable
by the group (see note 6).
At the start of the financial year, BPT Limited, a wholly owned subsidiary of Bromley, was contributing to two pension
schemes. The first was a defined contribution scheme, implemented in 2003 and open to all employees. During the year,
the employees were transferred to Grainger Limited and all pension contributions were made into the Grainger Limited
defined contribution scheme instead of the BPT scheme. The second is a defined benefit scheme, which was closed to new
members and employee contributions during 2003. The group will continue to contribute to this scheme so as to spread
the cost over the expected remaining service lives of the relevant employees.
BPT Defined benefit scheme
The assets of the BPT defined benefit scheme are held separately from those of the group in funds administered by trustees
and are invested with an independent investment manager. Costs and funding are assessed with the advice of an
independent qualified actuary using the attained age method.
Actuarial valuations are carried out every three years. The last full actuarial valuation was undertaken as at 1 July 2004.
Based on actuarial assumptions of an investment return of 6.5% per annum and salary increases of 5% per annum, the
assets were valued at £10.5m. These were held in a relevant insurance contract. These assets represented 79% of the 
value of the scheme’s accrued liabilities. The actuary has recommended an employer contribution rate of 28.5% in order 
to eliminate the deficiency over the expected future working lifetimes of the members. 
Notes to the financial statements continued
90 Grainger Trust plc Annual report and accounts 2005 91
27 Pension schemes continued
The actuary also undertook a Minimum Funding Requirement valuation as at 1 July 2004 in accordance with the Pensions
Act 1995. The value of the assets of the scheme was determined at 101% of the liabilities of the scheme.
FRS17 transitional disclosures
The FRS17 calculations for disclosure purposes have been based on a valuation at 1 July 2004 adjusted to 30 September
2005 and adjusted to the projected unit method by a qualified independent actuary. The major assumptions used by the
actuary were:
30 September 30 September 30 September 
2005 2004 2003
Discount rate 5.00% pa 5.50% pa 5.30% pa
Rate of increase in pensionable salaries 3.90% pa 4.00% pa 3.70% pa
Rate of increase in pensions in payment 5.00% pa 5.00% pa 5.00% pa
Inflation assumption 2.90% pa 3.00% pa 2.70% pa
The assets are held with AXA Sun Life in a managed fund.
The breakdown of the assets and the associated expected rate of return is given in the table below: 
30 September 2005 30 September 2004 30 September 2003
Expected Expected Expected
Value rate of Value rate of Value rate of
(£m) return (pa) (£m) return (pa) (£m) return (pa)
Equities 4.9 6.8% 4.0 7.3% – –
Bonds 6.9 4.7% 6.2 5.2% – –
Other 0.3 6.8% 0.5 5.0% – –
AXA Sun Life with-profits fund – – – – 10.5 6.3%
Total value of assets 12.1 10.7 10.5
The following approximate amounts were measured in accordance with the requirements of FRS17:
30 September 30 September 30 September
2005 2004 2003
£m £m £m
Total market value of assets 12.1 10.7 10.5
Present value of scheme liabilities (17.4) (15.3) (14.2)
Deficit in the scheme (5.3) (4.6) (3.7)
Related deferred tax assets 1.6 1.4 1.1
Net pension liability (3.7) (3.2) (2.6) 27 Pension schemes continued
If the above amounts had been recognised in the financial statements, the net assets and profit and loss reserve would 
be as follows:
30 September 30 September 30 September 
2005 2004 2003
£m £m £m
Net assets excluding SSAP24 pension liability 225.6 179.9 148.9
FRS17 pension liability (1.9) (1.6) (1.3)
Net assets including FRS17 pension liability 223.7 178.3 147.6
Profit and loss reserve excluding SSAP24 pension liability 159.5 138.1 109.3
FRS17 pension reserve (1.9) (1.6) (1.3)
Profit and loss reserve 157.6 136.5 108.0
The following amounts would have been recognised in the group’s performance statements in the year to 30 September
2005, under the requirements of FRS17:
Year ended Year ended
30 September 30 September
2005 2004
£m £m
Operating profit
Current service cost – –
Past service cost – –
Total operating charge – –
Other finance income/(expense)
Interest on pension scheme liabilities (0.8) (0.8)
Expected return on pension scheme assets 0.6 0.7
Net finance expense (0.2) (0.1)
Statement of total recognised gains and losses (STRGL)
Actual return less expected return on pension scheme assets 1.1 (0.9)
Experience gains and losses arising on the scheme liabilities 0.6 (0.5)
Changes in assumptions underlying the present value of scheme liabilities (2.4) –
Actuarial loss recognised in STRGL (0.7) (1.4)
Notes to the financial statements continued
92 Grainger Trust plc Annual report and accounts 2005 93
27 Pension schemes continued
Movements in deficit for the year to 30 September 2005 
Year ended Year ended
30 September 30 September
2005 2004
£m £m
Deficit in scheme at beginning of the year (4.6) (3.7)
Current service cost – –
Past service gain – –
Contributions 0.2 0.6
Other finance income (0.2) (0.1)
Actuarial loss (0.7) (1.4)
Deficit in scheme at end of year (5.3) (4.6)
Details of experience gains and losses for the year to 30 September 2005
Year ended Year ended Year ended
30 September 30 September 30 September
2005 2004 2003
£m £m £m
1. Difference between the expected and actual return on scheme assets:
Amount 1.1 (0.9) (0.3)
Percentage of scheme assets 9.1% (8.4%) (2.9%)
2. Experience gains and losses on scheme liabilities:
Amount 0.6 (0.5) 0.1
Percentage of the present value of the scheme liabilities 3.4% (3.3%) 0.1%
3. Total amount recognised in statement of total recognised gains and losses:
Amount (0.7) (1.4) (1.3)
Percentage of the present value of the scheme liabilities (4.0%) (9.2%) (9.2%) 94
28 Contingent liabilities
The company, in conjunction with certain other group companies, has guaranteed bank loans and other loans of subsidiary
companies amounting at 30 September 2005 to £850m (2004: £680m).
In addition, the group has an obligation, under the sale and purchase agreement for the land at West Waterlooville, 
to pay further consideration should the site value exceed certain pre-agreed amounts. It is not possible to determine the
amount or timing of any such future payments due to the long-term nature of the site’s development and the associated
uncertainties with respect to planning applications. However, any future payments will not fall due until at least 2015 and
will be spread over a number of years.
29 Operating leases
The group has operating leases relating primarily to certain office premises occupied by group personnel and cars leased
under contract hire agreements. Future commitments are not disclosed, as in the opinion of the directors, the amounts
involved are not material.
30 Related party transactions
In accordance with the provisions of FRS8 ‘Related Party Disclosures’, details of transactions with subsidiary undertakings
are not disclosed. There are no other related party transactions in addition to those already disclosed in the financial
statements.
31 Post balance sheet events
Since the year end the group has exchanged on a portfolio acquisition of 1,400 properties in the Metro Ruhr of Germany
for a consideration of €71.5m (£48.9m). Completion is expected before 31 December 2005.
32 Major non-cash transactions
i) Part of the consideration for the acquisition of City North Group plc comprised shares. Further details are set out in 
note 26. 
ii) The company acquired £12.3m of residential properties, the consideration for which was by way of Grainger transferring 
to the vendor certain commercial properties.
Notes to the financial statements continued
94 Grainger Trust plc Annual report and accounts 2005 95
2001 2002 2003 2004 2005
£m £m £m £m £m
Turnover** 124.7 213.8 173.6 217.4 226.9
Gross rentals 23.2 22.0 21.4 41.0 45.5
Sales of investment properties 40.0 7.1 2.1 41.1 13.3
Trading profits 26.5 33.7 38.8 72.6 74.8
Profit before taxation** 21.1 44.9 48.5 54.2 42.1
Profit after taxation and minority interests** 12.9 23.5 29.3 36.8 26.5
Dividends paid 3.0 3.5 4.0 5.7 6.6
Pence Pence Pence Pence Pence
per share per share per share per share per share
Earnings** 10.58 19.28 23.96 29.94 21.20
Dividends 2.47 2.84 3.26 4.65 5.11
£m £m £m £m £m
Fixed assets and stocks on a financial 
statement basis 315.1 372.8 907.2 950.8 1,138.0
Fixed assets and stocks at market value*** 554.9 680.3 1,305.8 1,454.5 1,639.3
Share capital and reserves 94.8 119.2 146.7 177.9 223.6
Pence Pence Pence Pence Pence
per share per share per share per share per share
Net asset value on financial statements basis 76.8 96.4 118.4 143.4 172.8
Net asset value including fixed assets and stocks 
at replacement value* 271.2*** 344.8*** 438.8 546.8 558.3
Dividend cover** 4.3x 6.7x 7.3x 6.5x 4.0x
Gearing 60% 52% 125% 103% 120%
Share price at 30 September 151.5p 198.5p 273.0p 367.0p 456.0p
Figures for 2000 and 2001 are restated, where relevant, to take account of FRS19. 
Figures for 2000 to 2003 are restated, where relevant, to take account of UITF 38. 
Earnings are restated to reflect ESOP shares held by the group. 
Share price and per share figures have been restated across all five years to take 
account of the five for one share split that took place in February 2005. 
In addition:
* Corporation tax has not been provided on valuation surpluses relating to stocks.
** Excluding exceptional items and including share of Joint venture.
*** 2001 and 2002 includes share of the market value of Joint venture properties and negative goodwill write back.
Five-year record for the year ended 30 September 2005 Financial calendar
Annual general meeting 2 March 2006
Payment of 2005 final dividend 8 March 2006
Announcement of 2006 interim results June 2006
Payment of 2006 interim dividend July 2006
Announcement of 2006 final results December 2006
Share price
During the year ended 30 September 2005, the range of
mid market prices of the company’s ordinary shares were:
Price at 30 September 2005 456.0p
Lowest price during the year 318.4p
Highest price during the year 457.0p
Daily information on the company’s share price can be
obtained on our website or by telephoning:
The Financial Times Cityline Service on 09068 432 750.
Capital gains tax
The market value of the company’s shares for capital
gains tax purposes at 31 March 1982 was 6.08p.
Website
Website address www.graingertrust.co.uk
Shareholders’ enquiries
All administrative enquiries relating to shareholdings 
(for example, notification of change of address, loss 
of share certificates, dividend payments) should be
addressed to the company’s registrar at:
Capita IRG plc, 
The Registry, 
34 Beckenham Road, Beckenham, Kent
Share dealing service
A share dealing service is available to existing shareholders
to buy or sell the company’s shares via Capita Share
Dealing Services. Online and telephone dealing facilities
provide an easy to access and simple to use service.
For further information on this service, or to buy or sell
shares, please contact:
www.capitadeal.com – online dealing
0870 458 4577 – telephone dealing
Please note that the directors of the company are not
seeking to encourage shareholders to either buy or sell
their shares. Shareholders in any doubt as to what action
to take are recommended to seek financial advice from
an independent financial adviser authorised by the
Financial Services and Markets Act 2000.
Secretary and registered office
Marie Glanville
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Company registration number 125575
Shareholders’ information
96 Grainger Trust plc Annual report and accounts 2005 97
Solicitors
Dickinson Dees, 
St Ann’s Wharf,112 Quayside, 
Newcastle upon Tyne
Freshfields, Bruckhaus Deringer, 
65 Fleet Street, London
Hammonds, 
2 Park Lane, Leeds
Financial public relations
Baron Philips Associates, 
131 Finsbury Pavement, London
NP Public Relations and Marketing, 
8 Mosley Street, Newcastle upon Tyne
Bankers
Clearing Bank and Facility Agent
Barclays Bank PLC
Other Bankers
Lloyds TSB Bank plc
The Royal Bank of Scotland plc 
Allied Irish Banks plc
Bradford & Bingley plc
The Governor and Company of the Bank of Scotland
National Australia Bank Limited
Nationwide Building Society
Auditors
PricewaterhouseCoopers LLP, 
89 Sandyford Road, Newcastle upon Tyne
Stockbrokers
Cazenove & Company Ltd, 
20 Moorgate, London
Brewin Dolphin Securities, 
Commercial Union House, 39 Pilgrim Street, 
Newcastle upon Tyne
Registrars and transfer office
Capita IRG plc, 
The Registry, 34 Beckenham Road, 
Beckenham, Kent
Advisers Property 
Assured periodic tenancy (‘APT’) Market-rented tenancy arising from succession from regulated. 
Tenant has security of tenure. 
Assured shorthold tenancy (‘AST’) Market-rented tenancy where landlord may obtain possession 
if appropriate notice served.
Assured tenancy (‘AT’) Market-rented tenancy where tenant has right to renew.
Investment value (‘IV’) Open market value of a property subject to relevant tenancies in place.
Home reversion Rent free tenancy where tenant has right of occupation until possession 
is forfeited (usually on death). If tenant retains an equity interest in the 
property this is a partial home reversion. 
Regulated tenancy Tenancy regulated under 1977 Rent Act, rent (usually sub market) set 
by rent officer and tenant has security of tenure.
Tenanted Residential (‘TR’) Activity covering the acquisition, renting out and subsequent sale 
(usually on vacancy) of residential units subject to a tenancy agreement.
Vacant possession value (‘VP’) Open market value of a property free from any tenancies.
Corporate 
Grainger NAV NNNAV adjusted for the after tax value of the reversionary surplus in 
our regulated and equity release portfolios discounted back to present
value using our risk adjusted weighted average cost of capital over the
expected average period of realisation.
IFRS International Financial Reporting Standards. These are mandatory for UK
listed companies for accounting periods ending on or after 31 December
2005. They will impact on Grainger’s financial statements in the year
ending 30 September 2006.
Glossary of terms
98 Grainger Trust plc Annual report and accounts 2005 99
Financial
Cap Financial instrument which, in return for a fee, guarantees an upper 
limit for the interest rate on a loan.
Contingent tax The amount of tax that would be payable should assets be sold at the 
market value shown in the accounts.
Dividend cover Earnings per share divided by dividends per share.
Earnings per share (‘EPS’) Profit attributable to shareholders divided by the weighted average 
number of shares in issue in the year.
FRS13 Accounting standard requiring the disclosure of the market value 
of long-term debt and financial instruments.
FRS19 Accounting standard prohibiting the provision of deferred tax on 
stock revaluation surpluses when companies are acquired. 
Gearing The ratio of borrowings net of cash to net asset value.
Hedging The use of financial instruments to protect against interest 
rate movements.
Interest cover Profit on ordinary activities before interest and tax divided by net 
interest payable. 
Loan to value (‘LTV’) Ratio of net debt to the market value of properties.
Negative goodwill On acquisition of a company, the surplus of the value of the statutory 
net assets acquired over the purchase price paid.
Net asset value (‘NAV’) Shareholders’ funds adjusted for the market value of property assets 
held as stock.
Net net asset value (triple net or ‘NNNAV’) NAV adjusted for contingent tax liabilities which would accrue if 
assets sold at market value and for the market value of long-term 
debt and derivatives. 
Swap Financial instrument to protect against interest rate movements.
Total Shareholder Return (‘TSR’) Return attributable to shareholders on basis of share price growth 
with dividends reinvested.
Weighted average cost of capital (‘WACC’) The weighted average cost of funding the group’s activities through 
a combination of shareholders’ funds and debt. 100 Grainger Trust plc Annual report and accounts 2005
Newcastle
Citygate
St James’ Boulevard
Newcastle upon Tyne
NE1 4JE
Tel: 0191 261 1819
London
161 Brompton Road
London
SW3 1QP
Tel: 020 7795 4700
Birmingham
The Circle
Harborne
Birmingham
B17 9DY
www.graingertrust.co.uk
Ipswich
42a Barrach Square
Martlesham Heath
Ipswich 
Suffolk
IP5 3RF
Putney
1st Floor
SW15H Building
73-75 Upper Richmond Road
London
SW15 2SR
Manchester
St John’s House
Barrington Road
Altrincham 
Cheshire
WA14 1TJ
Corporate addresses
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