COUNTRY & METROPOLITAN PLC ANNUAL REPORT & ACCOUNTS 2002
COUNTRY &
METROPOLITAN
PLC
creating
communities
Annual Report & Accounts 2002 www.candmhomes.com
Head Office
Harefield House
High Street
Harefield
Middlesex
UB9 6RH
Tel: 01895 824 111
Fax: 01895 824 205
headoffice@candmhomes.com
South West Region
Rissington Business Park
Upper Rissington
Nr. Cheltenham
Gloucestershire
GL54 2QB
Tel: 01451 821 527
Fax: 01451 821 085
southwestregion@candmhomes.com
Southern Region
The Coach House
High Street
Harefield
Middlesex
UB9 6EB
Tel: 01895 826 250
Fax: 01895 826 255
southernregion@candmhomes.com
North West Region
Suite 504
Chadwick House
Birchwood Park
Warrington
WA3 6AE
Tel: 01925 830 950
Fax: 01925 830 680
northwestregion@candmhomes.com
Northern Region
Grange Park
Boston Road
Wetherby
West Yorkshire
LS22 5DY
Tel: 01937 583 306
Fax: 01937 584 660
northernregion@candmhomes.com
NorthCountry Homes Group Limited
NorthCountry House
Barlborough
Chesterfield
S43 4WP
Tel: 01246 573 700
Fax: 01246 573 789
www.northcountry-homes.co.uk
sales@northcountry-homes.co.uk 28 November 2002 Preliminary announcement
31 December 2002 Interim period
27 February 2003 Annual General Meeting
7 April 2003 Payment of Final Dividend
March 2003 Expected announcement of unaudited
interim results for four months ending
31 December 2002
Contents
Financial Highlights 1
Chairman’s Statement 2
Chief Executive’s Review 4
Operational Review 6
Financial Review 18
Board of Directors 20
Directors & Advisers 21
Directors’ Report 22
Corporate Governance 23
Directors’ Remuneration Report 24
Consolidated Profit & Loss Account 26
Consolidated Statement of Total Recognised Gains & Losses 26
Consolidated Note of Historical Cost Profits & Losses 26
Balance Sheet 27
Consolidated Cash Flow Statement 28
Notes to the Accounts 29
Report of the Auditors 47
Notice of Annual General Meeting 48
Financial Calendar
Jacksons Warehouse, Piccadilly, Manchester Country & Metropolitan is highly
experienced in the acquisition of
land with planning and
environmental problems. 
We have the skills required to
enable sustainable new
communities to be created from
redundant ‘brownfield sites’,
providing a mix of new and
converted or refurbished homes
together with community facilities
and employment opportunities.
9.71
14.40
Shareholders’ Funds
(£m) - up 35%
Harefield House, Middlesex - Head Office
Operating Profit
(£m) - up 37%
Profit before tax
(£m) - up 81%
Earnings per share
(pence) - up 34%
4.74
3.28
98 99 00 01 02 98 99 00 01 02 98 99 00 01 02 98 99 00 01 02
2.58
2.11
1.44
1.61
2.21
1.00
0.42
11.64
12.35
9.86
4.20
19.41
3.69
5.07
*
3.99
*
16.56
*
Country & Metropolitan PLC Annual Report & Accounts 2002 1
Financial Highlights
*before amortisation of goodwill Country & Metropolitan has achieved another set of outstanding
results in a year in which it made a significant profit on the sale of
its investment in Tay Homes PLC and during which it completed the
acquisition of NorthCountry Homes Group Limited.
Results and dividend
During the year ended 31 August 2002 the Group made pre-tax
profits before amortisation of goodwill of £3.99m, an increase of
81% over the previous year’s result of £2.21m. This included a
profit of £1.1m from the sale of our investment in Tay Homes PLC.
Operating profit before amortisation of goodwill increased by 37%
to £5.1m (2001: £3.7m) and basic earnings per share before
amortisation of goodwill increased by 34% to 16.56p per share
compared to 12.35p in the previous period. I am pleased to report
that the Board is recommending a final dividend of 2.14p (2001:
1.7p) per share bringing the total for the year to 2.75p, an
increase of 22% over the previous period in line with the
progressive dividend policy maintained since flotation. The final
dividend will be paid on 7 April 2003 to shareholders on the
register on 7 March 2003.
Net asset value per share has increased to 102.7p per share (2001:
86.4p) representing shareholders’ funds of £19.4m (2001: £14.4m).
These results demonstrate the Group’s ability to grow organically
and create further shareholder value by acquisition, identifying and
building strategic stakes in undervalued companies in the sector.
Operating review
The Southern Region’s programme included the sale of five houses,
with prices in excess of £950,000, prior to the year end and it has
contracted the sale of a property under construction for £2m. It
has two further properties under construction in this range for
which demand is expected to be strong. The Board is now taking a
more cautious view of developing properties in this price range,
with the emphasis now being placed on the more affordable end
of the market.  
The Region has however, purchased what we believe to be one of
the most prime sites in London, opposite Hampton Court, with a
direct frontage to the River Thames. By purchasing the land
unconditionally an extremely attractive price was agreed. We are
now well advanced with an agreement with Railtrack, regarding a
comprehensive development of our land and the adjoining land 
of Hampton Court Station, where we envisage a major mixed 
use development.
The final phase of 10 detached houses at Rissington is well
advanced with only two units remaining for sale. The annual rental
stream from the Business Park at Rissington has increased
significantly and now stands at £695,000 per annum. Although the
claim by the Ministry of Defence for additional consideration of
£820,000 by way of overage was lost, we are still confident of
obtaining a significant allocation for further residential development
on the remaining 70 acres.
The North and North West Regions have experienced good progress
with no properties in stock at the year end. They have strong
forward reservations on developments under construction and are
actively promoting a number of sites through the planning system.  
Chairman’s Statement
2 Country & Metropolitan PLC Annual Report & Accounts 2002
“The enlarged Group now has a diverse product range and a wide geographical
spread. Demand for our product in the current economic climate remains strong
as demonstrated by the strong forward order book.”
David Laing
Chairman Country & Metropolitan PLC Annual Report & Accounts 2002 3
We have now secured a resolution to grant planning consent on
the 140 acre site at the former Poole Hospital in Middlesborough to
develop 94 residential units, including the conversion of a
magnificent Grade II* Listed Mansion into 12 apartments.  
A prime site has been acquired in Leeds City Centre, for a waterside
development of 61 units. The development is expected to
commence before the end of 2002. This scheme will have a
completed value in excess of £12m. The current forward sales and
completions since the year end for Country & Metropolitan group
(excluding NorthCountry) is £15.4m.
The major difficulty we are experiencing is in obtaining planning
permissions. Politicians have now created a planning system which
is so complex that too few new homes are being built. This
serious shortage of supply is driving up prices, causing tremendous
frustration in the house building community who are prevented
from "getting on with the job". I cannot think of any other
business sector that suffers so much from government regulation
and interference.
Corporate activity
Having profitably disposed of our investment in Tay Homes PLC the
Board pursued the acquisition of NorthCountry Homes Group
Limited ("NorthCountry"), a specialist in low cost quality homes for
people on low incomes, which was concluded on 1 August 2002.
NorthCountry operates principally in the North of England and has
five trading subsidiaries. It completed 630 homes in its financial
year to 30 June 2002 and we expect further volume growth in the
current year. The integration of the enlarged group has taken place
smoothly and trading since 1 September 2002 has been particularly
strong with contracted and completed sales of £17.8m and forward
reservations of £10.9m. As a result of the acquisition of
NorthCountry, the Group will change its financial year end to 30th
June and accordingly will prepare its interim accounts for the 4
months to 31st December 2002.
The Group has recently accumulated a strategic stake of 9.98% in
an AIM quoted company, Headway PLC, a provider of managed
business space on 5 brownfield sites, totalling approximately 25
acres. These shares are currently held as a trade investment.
Prospects
The enlarged Group now has a diverse product range and a wide
geographical spread. Demand for our product in the current
economic climate remains strong as demonstrated by the strong
forward order book.
The Group’s comprehensive approach to residential and commercial
property development places it in an excellent position to secure
large urban renewal projects on brownfield sites which should
provide additional opportunities for NorthCountry. Our developments
are situated in appropriate locations in the markets we operate in
and I therefore anticipate further growth in the current year. 
David Laing
Chairman
28 November 2002
No.17 Nicholas Way, Northwood, Middlesex
A substantial detached 6 bedroom house, comprising approximately
5,500 sq ft. The construction is expected to complete Spring 2003.
The property has been sold from plan for £2.0m. I am delighted to report a year of tremendous progress for Country
& Metropolitan. 
Turnover was up by 67% to £32.3m with pre-tax profits before
amortisation of goodwill up by 81% to £3.99m. 
At the corporate level, highlights included the sale of our stake in
Tay Homes Plc for a profit of £1.1m and the acquisition of
NorthCountry Homes Group Ltd for a maximum consideration of
£14.5m (excluding costs), part of which was funded by the issue of
2,250,000 new shares in Country & Metropolitan. 
NorthCountry Homes was founded by Jolyon Harrison, the current
Managing Director and is a market leader in the provision of low
cost homes for sale in the North of England via five trading
subsidiaries. It completed 630 homes up to 30th June 2002 and
further volume growth is expected in the current year. 
NorthCountry has a land bank of 1,550 building plots owned with
planning permission and has secured substantial further land on
which it is seeking consent.
As widely reported in the press, there are concerns about the
housing market being overheated and it is true that the overall
house price inflation that has been seen over the last few years
cannot be sustainable for much longer. Particularly as the first time
buyers have been priced out of the market in large parts of the
South East of England and other "Hot Spots" around the country. 
As one of the smaller companies in the quoted sector, we are able to
adapt quickly to changing market conditions and having acquired
NorthCountry, I intend to refocus a large part of the existing Country &
Metropolitan business into the "Affordable Sector", particularly in the
South East, where we have some exciting new initiatives underway. 
Our current forward order book for the enlarged group is very
strong with forward sales of £44.1m. We have a wide geographic
spread and are currently building on 29 developments with homes
priced from £50,000 to £2m. 
I am pleased to report that in line with government guidance
approximately 70% of our developments are now on Brownfield sites.
The planning system in this country has now become a complete
farce with enormous delays and illogical decisions becoming
common place. It appears obvious that the government has little
understanding of what is going on at a local level with the difficulty
in obtaining consents forcing house prices higher due to lack of
supply coming through. 
However, despite the continued irritation of planning, our highly
skilled land teams are unearthing an exciting stream of new
opportunities for the Group, which should stand us in good stead
for the future. 
Stephen Wicks
Chief Executive
28 November 2002
Chief Executive’s Review
4 Country & Metropolitan PLC Annual Report & Accounts 2002
“As one of the smaller companies in the quoted sector, we are able to adapt
quickly to changing market conditions. We have an exciting, well positioned
development portfolio, with a particular focus on affordability.”
Stephen Wicks
Chief Executive ‘Blue’ Granary Wharf, Leeds City Centre
(Architect’s Computer Generated Image)
A landmark development of 61 contemporary waterside apartments,
penthouses and duplexes situated on the banks of the River Ayr and Leeds
Canal Basin adjoining Leeds City Centre station. The development commenced
in November 2002 with completion expected in Summer 2004. High Royds Hospital, Leeds
Negotiations relating to a joint venture to develop this site are well
advanced. The site comprises approximately 280 acres with 1m sq ft of
developable land and listed buildings.
1) Masterplan of High Royds
Hospital
2) Site plan
3) Principal listed building
Operational Review
6 Country & Metropolitan PLC Annual Report & Accounts 2002
1
3 2
New Build Residential
New Build Social Housing
Conversion to Office Use
Education Conversion
KEY
Commercial
Health Care
Nursery
New Build Shop
Residential Conversion
HIGH ROYDS, MENSTON: LANSDCAPE MASTERPLAN Country & Metropolitan PLC Annual Report & Accounts 2002 7
1
4
3
2
Poole Hospital, Middlesborough (Grey Towers Park)
The development of this prestigious site on the outskirts of Middlesborough, acquired from the Secretary of
State for Health, will comprise 94 residential homes including the conversion of a magnificent Grade II* listed
mansion ‘Grey Towers’ into twelve apartments, complete with listed wallpaper which will be retained in
accordance with direction from English Heritage. This former sanatorium dates back to 1847 and is set in 141
acres. The former stables and listed walled garden will be redeveloped into mews cottages and bungalows and
part of the land will be sold for new homes.
Construction is expected to commence in Spring 2003 and completion is anticipated in 2005.
1) Existing listed walled garden
2) Former stables to be converted
3) ‘Grey Towers Park’ site plan
4) ‘Grey Towers Park’ Grade II* listed mansion conversion into 12 apartments Operational Review continued
Robinsons Apartments, Moseley, Birmingham
This development is a conversion of a former furniture warehouse
into 46 1 and 2 bedroom apartments. A sales launch is planned for
Spring 2003. Completion is expected in Autumn 2003.
8 Country & Metropolitan PLC Annual Report & Accounts 2002
3 Country & Metropolitan PLC Annual Report & Accounts 2002 9
Burnside Mill, Addingham, West Yorkshire
This development comprises 18 cottages and apartments within this former
cotton mill dating back to the 1788. It overlooks breath-taking scenery with the
Yorkshire Dales National Park on the doorstep. 17 units are sold with only one
unit remaining. This development is expected to complete in February 2003.
1) Completed mews cottages
2) Interior show cottage
3) Artist impression, Burnside Mill apartments 
and cottages
1 2 Operational Review continued
The Jolly Boatman, Hampton Court, Surrey
The site of the Jolly Boatman Public House (shown edged in red below) is a prime Thames frontage site facing
Hampton Court Palace. Negotiations are at an advanced stage with Railtrack to carry out the redevelopment of the
adjoining Hampton Court station (edged in yellow) to provide a major mixed use scheme on this site.
10 Country & Metropolitan PLC Annual Report & Accounts 2002
The Jolly Boatman - Draft Development
proposal indicating the mixed use scheme
Area for residential use
Area for leisure uses
Area for retail uses
Area for offices
Area of station building
Pedestrian and cycle routes
KEY Jacksons Warehouse, Piccadilly, Manchester
A spectacular Grade II* listed building constructed for storage for the Rochdale Canal Company in 1836. 
This development, which is managed by C&M, is in a prime location, overlooking the canal basin and the
marina. The warehouse is being converted into 42 duplex apartments with commercial space on the lower
ground floor. The apartments will feature exposed brickwork and some original capstan wheels, pulleys and
hoisting machinery. Completion is expected in Summer 2003.
1) Artist impression of the completed building
2) Jacksons Warehouse showing slotted columns which originally formed bins to accommodate grain storage
3) Jacksons Warehouse - capstan wheels and pulleys
4) Illustration, Jacksons Warehouse originally as constructed (1836). (Picture courtesy of English Heritage)
Country & Metropolitan PLC Annual Report & Accounts 2002 11
1 3
4
2 Operational Review continued
12 Country & Metropolitan PLC Annual Report & Accounts 2002
Mulberry Mews, Church Fenton, North Yorkshire 
A village development of twenty 2, 3 and 4 bedroom cottages and individual barn
conversions. This is our first project of new timber framed homes. The development is
situated in the centre of this historic farming village between the great rivers of Ouse
and Wharfe in the countryside of Church Fenton, North Yorkshire. A good level of sales
have already been achieved and this development is due to complete in Summer 2003. Country & Metropolitan PLC Annual Report & Accounts 2002 13
Creating Communities
Street scene, Mulberry Mews, Church Fenton Operational Review continued
14 Country & Metropolitan PLC Annual Report & Accounts 2002
Country & Metropolitan are a corporate member of the
Gloucestershire Wildlife Trust who promote strong
conservation and environmental values. 
Pictured HRH the Prince of Wales with Jean Atkins,
Group PR & Marketing Director and members of the
Wildlife Trust at Highgrove House.
Upper Rissington, Gloucestershire
At Upper Rissington the annual rental income on the Business Park has increased to £695,000, with a potential
to increase to £1.5m p.a. over the next few years.
The Third Phase of ten 4 and 5 bedroom detached houses is almost completed and the sales revenue has
exceeded our original budget. 
There remains approximately a further seventy acres of land within the new village where we expect to obtain
further housing within the local plan.
Photography courtesy of Paul Burns, Bristol
Four bedroom showhouse Phase III
Building 62. Refurbished for occupation in 2003
Entrance to Upper Rissington Business Park Winfield Farm, Polegate, East Sussex
This 22 acre site sits between the village of Polegate
and the recently constructed A27 Polegate bypass. 
The land has been purchased with a further
consideration to be paid to the vendor on receipt of
satisfactory planning consent. A draft allocation for
development is expected within a 2 year period.
Strategic Land
A number of sites have been acquired where there is
a strong likelihood of obtaining zoning for both
residential and commercial development.
Some of the strategic land at Upper Rissington.
Country & Metropolitan PLC Annual Report & Accounts 2002 15 Operational Review continued
NorthCountry Homes
16 Country & Metropolitan PLC Annual Report & Accounts 2002
The acquisition of NorthCountry Homes Group Limited
(“NCH”) for £14.5m was financed mainly by cash and
partly in C&M shares, resulting in the NCH
management holding 1,176,766 shares in C&M.
In its last full trading year NCH sold 630 units at an
average price of £63,000. The homes are often built
in derelict areas, mostly brownfield sites on land near
public sector homes. They are designed to encourage
council house tenants to become first time owner
occupiers, a section of the market overlooked by
many of the volume house builders.
These homes are ideal for those with a joint income
of less than £20,000 facilitating a mortgage that buys
a two or three bedroomed house and provides a
footing on the home ownership ladder.
The enlarged Group now has a diverse product range
and geographical spread. NCH is the market leader in
affordable housing for sale in the North and has a
land bank in excess of 1,500 plots. 
NCH has 5 operating subsidiary companies within its
Group; located in Lincolnshire, Pelham Homes,
Derbyshire, Whelmar Homes, Sunderland, Broseley
Homes, Nottinghamshire, Clarke Homes and Arundale
Homes in Lancashire and Yorkshire.
The local brand names making up the NorthCountry Homes Group
The signing of the acquisition of NorthCountry
Homes Group Limited on 1st August 2002,
Jolyon Harrison (left) and Stephen Wicks (right).
The Mayor of Doncaster replaces the mullion
stone at Jossey Court, Bentley, Doncaster, with
Simon Lewis, Sales Director of NCH.  Whelmar Homes - The Dairy, Claypit Lane, Rowmarsh Nr Rotherham
This is a Brownfield site in a densely populated area, comprising 6 acres. The land is currently being cleared,
demolishing the large dairy. There are possible contamination issues to overcome and start on site is expected in
early 2003 for approximately one hundred 2,3 and 4 bedroom semi and detached houses. 
The site will take approximately 3 years to complete.
Country & Metropolitan PLC Annual Report & Accounts 2002 17
Typical street scene, NorthCountry homes development Accounting policies and standards
The accounts for the year ended 31 August 2002 have adopted the
transitional rules of Financial Reporting Standard ("FRS") 17
(Retirement Benefits) and FRS 19 (Deferred Taxation). The adoption
of FRS 19 has not had any material effect on the current year
results other than new disclosures.
Acquisition of NorthCountry Homes Group Limited
The acquisition of NorthCountry Homes Group Limited ("NCH") was
successfully completed on 1 August 2002 for a total estimated
consideration of £15.4m (including expenses) and consequently the
results for the year ended 31 August 2002 included one month’s
post acquisition trading. The consideration was satisfied by £10.2m
in cash (excluding costs), the issue of 2,250,000 ordinary shares in
the Company at 109.5p per share and a maximum earn out of
£1.875m. The net assets of NCH were reviewed and fair value
adjustments have been made as set out in note 16 to the accounts.
The goodwill arising on the acquisition was £5.3m.
Profit and loss account
The Group’s turnover increased by 67% from £19.3m to £32.3m and
£2.3m of this was generated by NCH. Gross profit increased to
£9.0m (2001: £6.5m) and the operating profit before amortisation
of goodwill was £5.1m (2001: £3.7m) of which £0.2m related to
NCH. Operating margins have reduced from 19.1% to 15.7% due to
an increase in sale proceeds from developments undertaken by the
Group as principals rather than through joint ventures. Net operating
expenses have increased in line with the growth of the business.
The sale of the Group’s investment in Tay Homes PLC realised a
profit of £1.06m. The profit on ordinary activities before
amortisation of goodwill and tax increased by 81% to £3.99m with
basic earnings per share increasing by 34% to 16.56p (2001:
12.35p). The directors have recommended a final dividend of 2.14p
per share resulting in a total of 2.75p for the year, an increase of
22% over the previous period.  
Capital structure and treasury policy
On 1 August 2002 the Company issued 2,250,000 ordinary shares
as part consideration for the acquisition of NCH.
The Group’s overall policy is to finance its operations through a
combination of shareholders’ funds, long term loans, bank loans
and cash in hand and at bank. Wherever possible the Group also
tries to secure deferred terms on acquisition of land.
In support of the acquisition of NCH, new three year committed
revolving credit facilities totalling £35m were arranged by the
Group with its principal bankers, Royal Bank of Scotland, primarily
for core borrowing requirements. The Group also arranged a three
year acquisition facility of £6.0m which was fully utilised upon the
acquisition of NCH.  
An overall offset arrangement between any cash and loan
balances exists for the calculation of interest. Interest rates are
either linked to LIBOR or base rates.The Group’s policy, which is
reviewed and agreed by the Board, is to be in a position to take
advantage of floating rates on part of the debt but also to be
protected against significant increases in interest rates by the use
of fixed rate loans or suitable hedging instruments. In accordance
with this policy the Group has a mixture of floating rate debt and
fixed rate hedging as shown in note 22 to the accounts. No new
Financial Review
Nishith Malde
Finance Director
18 Country & Metropolitan PLC Annual Report & Accounts 2002
“Profit before amortisation of goodwill and tax increased by 81% from £2.21m to £3.99m
and earnings per share has increased by 34% from 12.35p to 16.56p. Dividends have
increased by 22% from 2.25p to 2.75p with net assets per share standing at 102.7p.” fixed rate hedging was entered into during the year. The Group
had no foreign exchange exposure.
Cash flows 
The gearing at the year end reduced to 150% from 160% at the
previous year end after taking account of the cash consideration of
£10.2m paid for NCH (excluding costs). Total borrowings increased
from £23.0m to £29.1m at the year end. Against this the Group has
forward sales of £44.1m.  
Interest is written off as incurred and the charge for the year was
£2.3m which was supported by gross rental income of £1.1m. The
net cash flow generated from operations was £2.2m with £4.4m
being absorbed by an increase in debtors. In addition, the disposal
of our investment in Tay Homes PLC generated £7.8m of cash. The
acquisition of NCH resulted in a net cash inflow of £2.9m. 
Balance Sheet
The increase in tangible fixed assets is primarily due to the
continued refurbishment and improvement of the infrastructure at
the Business Park in Upper Rissington. The freehold and investment
properties have also been revalued by the directors resulting in a
revaluation surplus of £0.4m. The acquisition of NCH has generated
goodwill of £5.3m which is being amortised over 10 years.
Stocks and work in progress have increased to £31.9m (2001:
£19.5m) as a result of the acquisition. Debtors have increased
mainly due to land sales made prior to the year end.
The Group’s net current asset position has improved significantly
over the previous year end as have shareholders’ funds with net
assets per share standing at 102.7p per share at 31 August 2002
(2001: 86.4p).
Country & Metropolitan PLC Annual Report & Accounts 2002 19
New Hall Manor, The Wirral, Cheshire
A new development commencing March 2003, comprising 17
apartments and mews cottages. Completion is expected in Spring 2004.
New Hall Manor, The Wirral, Cheshire - artists’ impression of the front elevation apartments and mews cottages David Laing, aged 57, is an architect by profession and has been
involved with the property and construction sector for many years.
He joined the Company as non-executive Chairman in February
1996. He holds various other positions of responsibility and has
been county chairman of the Rural Development Commission for
Hertfordshire and Bedfordshire. 
Stephen Wicks, aged 51, was the founding shareholder of the
Company and has worked in the construction and housebuilding
sector for over 30 years. He has extensive knowledge of local and
national government policies on both greenfield and brownfield
sites and has in the past worked for a number of housebuilders,
with particular emphasis on land acquisition. 
David Foster, aged 47, a member of the Royal Town Planning
Institute, worked as a local authority town planner until 1979. He
was then employed on land acquisitions by a number of national
housebuilders including Crest Nicholson Plc and McCarthy & Stone
Plc until establishing his own consultancy in 1990. He was
appointed Land Director in 1997. 
Nishith Malde, aged 44, qualified as a chartered accountant in
1985 with KPMG and specialised in advising owner managed
businesses. He left KPMG in 1989 to set up a consultancy firm
which later merged with the former auditors of the Group where
he was the partner responsible for the affairs of Country &
Metropolitan. In November 1998 he joined the Group as Finance
Director and Company Secretary.
Jonathan Marc Van Gelder, aged 38, is the representative of Allied
Commercial Exporters Limited, a substantial shareholder in the
Company, and was appointed to the Board in September 1997 as a
Non-Executive Director. He has worked for the privately owned
Allied Commercial Group of companies for the last 13 years with
responsibility for identifying and acquiring property opportunities.
Board of Directors
Left to right: Nishith Malde, Financial Director and Stephen Wicks, Chief Executive
20 Country & Metropolitan PLC Annual Report & Accounts 2002 Directors
D E Laing MA RIBA Chairman
S D Wicks Chief Executive
D M Foster MRTPI Land Director
N Malde FCA Finance Director
J M Van Gelder Non-Executive
Secretary
N Malde FCA
Auditors
Nexia Audit Limited
Registered Auditors
1 Riding House Street
London 
W1A 3AS
Accountants & Tax Advisors
Smith & Williamson Limited
1 Riding House Street
London
W1A 3AS
Financial Advisers 
Dawnay, Day Corporate Finance Limited
10 Grosvenor Gardens
London   
SW1H 0HS
Stockbrokers
J M Finn & Co
Salisbury House
London Wall
London
EC2M 5TA
Solicitors
Memery Crystal
31 Southampton Row
London  
WC1B 5HT
Registrars
Capita IRG Plc 
Bourne House
34 Beckenham Road
Beckenham 
Kent
BR3 4TU
Bankers
National Westminster Bank Plc
South Herts Business Centre
2nd Floor, 10 St Peter’s Street
St Albans
Hertfordshire   
AL1 3LY
Registered Office
Harefield House
High Street
Harefield
Middlesex   
UB9 6RH
Company Number
2443898
Country & Metropolitan PLC Annual Report & Accounts 2002 21
Directors and Advisors The Directors present their report and audited accounts for the
year ended 31 August 2002.
Business activities and business review
The principal activities of the Group during the period under
review covered various property projects primarily in the
residential property field.  These included land acquisition and the
promotion of urban villages together with the construction of new
homes for open market sale. A detailed report is given in the
Operational Review on pages 4 to 17.
On 20 March 2002 the Company changed its name from Country &
Metropolitan Group PLC to Country & Metropolitan PLC.
Results
The audited accounts for the year ended 31 August 2002 are set
out on pages 26 to 46. The Group achieved a profit before taxation
and amortisation of goodwill of £3.99 million (2001: £2.21
million). The retained profit of £2.19 million (2001: £1.18 million)
will be transferred to reserves.
Dividends
The Directors recommend a final dividend of 2.14p per ordinary
share to be paid on 7 April 2003 to ordinary shareholders on the
register on 7 March 2003 which, together with the interim
dividend of 0.61p paid on 4 October 2002 makes a total of 2.75p
for the year (2001: 2.25p).
Fixed assets
In the opinion of the Directors the current open market value of
the Group’s interests in land and buildings amounts to £14.7
million. There is no material difference between the book and the
current open market value of interests in land and buildings.
Directors and their interests in the share capital
of the Company
The Directors who served during the year are listed together with
their biographical details on page 20. The Directors’ beneficial
interests in the ordinary shares of the Company are given in the
Remuneration Report on pages 24 to 25.
In accordance with Article 103 of the Articles of Association, Mr D
MFoster will retire by rotation at the next Annual General Meeting
and, being eligible, offers himself for re-election.
Substantial shareholdings
On 15 January 2003 the Company had been notified of the
following interests that represent 3% or more of the issued share
capital of the Company:
Number of Percentage
Ordinary shares held
Eaglet Investment Trust Plc 2,087,523 11.04
Jupiter Asset Management Limited 1,886,918 9.98
Allied Commercial Exporters Limited 1,665,000 8.81
Merrill Lynch Investment Managers 1,118,616 5.92
J Harrison 826,192 4.37
J P Morgan Securities Limited 647,778 3.42
Policy for payment of creditors
It is the Company’s payment policy to negotiate the best possible
terms for all business and therefore there is no consistent policy
as to the terms used. We make sure that suppliers know the terms
on which business will take place and it is our policy to abide by
the terms. At 31 August 2002, the trade creditors of the Company
represented 125 days (2001: 115 days) of purchases made by the
Company.
Charitable donations
During the year the Group made various charitable donations
totalling £2,000 (2001: £2,000). No political donations were made
in either year.
European Monetary Union (EMU)
The Group has no exposure to foreign exchange and will monitor
the implications of EMU.
Auditors
Our auditors, Smith & Williamson, have advised us that they have
incorporated their audit practice as a separate legal entity, Nexia
Audit Limited. A resolution to appoint Nexia Audit Limited will be
proposed at the next Annual General Meeting.
By order of the Board
N Malde FCA, Secretary
Harefield House
High Street, Harefield
Middlesex UB9 6RH
28 November 2002
Responsibilities of the Directors
in respect of the preparation of the accounts
Company law requires directors to prepare accounts for each
financial year which give a true and fair view of the state of
affairs of the Company and the Group and of the profit or loss of
the Group for that period. In preparing those accounts, the
directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the accounts; and
• prepare the accounts on the going concern basis unless it is
inappropriate to presume that the Group will continue in
business.
The Directors of Country & Metropolitan Plc are responsible for
keeping proper accounting records which disclose with reasonable
accuracy, at any time, the financial position of the Group and to
enable them to ensure that the accounts comply with the
Companies Act 1985. They have general responsibility for taking
such steps as are reasonably open to them, to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
22 Country & Metropolitan PLC Annual Report & Accounts 2002
Directors’ Report for the year ended 31 August 2002 The Board has considered the requirements of the Combined Code
adopted by the London Stock Exchange in performing the
Corporate Governance of the Group. The Company has complied
throughout the year ended 31 August 2002, except where noted,
with the provisions of Section 1 of the Combined Code which
relate to the principles of Good Governance and Code of Best
Practice.
The Board comprises of three Executive Directors and two Non-
Executive Directors. Of the latter, Mr D E Laing is considered to be
totally independent within the meaning of provision A.3.2 of the
Combined Code. The second, Mr J M Van Gelder is regarded as
effectively independent; although he is a representative of one of
the substantial shareholders, Allied Commercial Exporters Limited
("Allied") who own 8.81% of the issued share capital of the
Company. In view of the size and composition of the Board it is
considered to be inappropriate to recognise a senior independent
Director as required by provision A.2.1 and for a Nomination
Committee to be established under provision A.5.1. Under the
Articles of Association of the Company at least one third of the
Board is required to retire by rotation and offer for re-election.
Mr D E Laing has a letter of appointment effective from 1 March
1997 and terminable upon not less than six months written notice
by either party. Mr J M Van Gelder, is a representative of Allied who
are entitled to appoint and retain a seat on the Board so long as they
beneficially own any of the 10% Unsecured Loan Stock 2002 in
the Company.
Board and Committees
All members of the Board are equally accountable under the law
for the proper stewardship of the Company’s affairs. The roles of
the Chairman and Chief Executive are separate and clearly defined.
The Chairman is primarily responsible for the running of the Board
and the Chief Executive is responsible for the running of the
business of the Group.
The Board meets regularly on a formal basis and is supplied with
appropriate information to enable it to discharge its duties. There
is an agreed schedule of matters reserved for the Board for
collective decision. The Executive Directors meet informally between
formal Board meetings to focus on strategy, cash management,
financial performance, major transactions and control of operations
generally.  
The Board has delegated specific responsibilities to the Audit and
Remuneration Committees.
Audit Committee
The Audit Committee comprises of the two Non-Executive
Directors.  It meets once a year with the auditors and is
responsible for ensuring that the financial performance of the
Group is properly reported on and monitored. In particular it
focuses on accounting policies, compliance and internal control. It
also reviews the scope and results of the audit and its cost
effectiveness and the independence and objectivity of the
auditors.
Remuneration Committee
The Remuneration Committee comprises of the two Non-Executive
Directors and the Chief Executive, Mr S D Wicks. It meets at least
once each year and reviews remuneration and terms of
employment of Executive Directors and certain senior employees.
In particular, the Committee determines specific remuneration 
packages for each Executive Director. The fees for the Non-
Executive Directors are decided by a committee of the Board
comprising all the Executive Directors. The Directors’ Remuneration
Report is set out on pages 24 to 25.
Investor Relations
The Company meets with its institutional shareholders as
appropriate. All shareholders are kept up to date with the affairs
of the Group through the Annual and Interim Reports.  Save in
exceptional circumstances, all members of the Board attend the
Annual General Meeting ("AGM") which is used to communicate
with private and institutional shareholders. The chairmen of the
Audit and Remuneration Committees are also available at the AGM
to answer questions.
Internal Control
In applying the principle that the Board should maintain a sound
system of internal control to safeguard shareholders’ investment
and the assets of the Group, the Directors recognise that they have
overall responsibility for ensuring that the Group maintains a
system of internal control to provide them with reasonable
assurance regarding effective and efficient operations, internal
financial control and compliance with laws and regulations.  The
Group has a process for identifying, evaluating and managing the
significant risks the Group faces. The Board reviews this process on
an ongoing basis, which has been in place throughout the year
and up to the date of approval of the accounts and which is in
accordance with Internal Control: Guidance for Directors on the
Combined Code published in September 1999. Such a system is
designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can only provide reasonable and
not absolute assurance against material misstatement or loss.
The key features of the control system that operated throughout
the period covered by the accounts are described below.  
- The Group has a defined organisation and management
structure to ensure a proper division of responsibility and
authority.
-The Board has identified areas of risk which are reviewed on a
regular basis for their relevance and appropriateness to the
business.
-Control procedures are in place to address key areas of risk.
These include authorisation procedures over land purchases
which are considered and approved by the Executive Directors
before contracts are entered into.  Controls are also in place to
cover other areas such as payment of invoices, cash control and
expansion of the business.   
- The Group’s systems provide weekly updates on key statistics in
relation to sales.  In addition a bank reconciliation of the
current account cash balances is prepared on a regular basis
identifying all receipts and payments.  Detailed short term and
two year forecasts are also used by the Board and the Executive
Directors to control the cash requirements of the Group.
Going Concern
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future.  For this reason, they continue to adopt the going concern
basis in preparing the accounts.
Country & Metropolitan PLC Annual Report & Accounts 2002 23
Corporate Governance Statements Directors’ emoluments - audited information
The remuneration of the individual Directors was:
2002 2001
Salary/fees Bonus Benefits Pension Total Total
£’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
S D Wicks 231 20 21 43 315 241
D M Foster 156 15 21 16 208 174
N Malde 163 15 14 17 209 173
Non-Executive Directors
D E Laing 22 – – – 22 18
J M Van Gelder 22 – – – 22 18
As well as complying with the provisions of the Code as disclosed
in the Company’s corporate governance statements, the Company
has applied the Principles of Good Governance relating to
Directors’ remuneration as described below.
Remuneration Committee
The Remuneration Committee comprises the two Non-Executive
Directors, Mr D E Laing and Mr J M Van Gelder and the Chief
Executive, Mr S D Wicks.
Remuneration Policy
The Remuneration Committee has overall responsibility for
remuneration policy in respect of Executive Directors and certain
senior employees. The Group provides competitive remuneration
packages at all levels in order to attract, retain and motivate staff.
Basic salaries and benefits are reviewed annually and bonuses are
awarded for achieving high levels of performance. 
The principal terms of reference of the Committee are as follows:
-To determine the basic salary of the Executive Directors and
certain senior employees.
-To determine, after the end of the financial year, the amounts
that should be awarded as bonuses taking account of the
Group’s targets and individual performance.
-To agree the Executive Directors and senior employees to whom
share options should be granted in order to align their interests
with those of shareholders.
-To agree the annual targets for the Group which would be
applicable for incentive schemes.
The remuneration of the Non-Executive directors, who are
members of the Committee, is a matter reserved for the Executive
Directors who would take account of practices in other companies.
Service contracts
The Executive Directors have service contracts with the Company
which may be terminated by the Company upon 24 months notice
and by the Director upon 6 months notice. The service contracts do
not include provision for pre-determined compensation for early
termination.
Incentive schemes - audited information
Annual bonuses are subject to achieving Group performance
targets and the Committee has the right to award discretionary
bonuses based on individual performance.
The Company has in place the Country & Metropolitan Group PLC
1999 Approved Share Option Scheme and the Country &
Metropolitan Group PLC 1999 Unapproved Share Option Scheme.
At 31 August 2002, options had been granted over 1,222,627
shares to the Executive Directors and over 234,827 shares to
senior employees and staff. The exercise of the options granted to
the Executive Directors is subject to objective performance
conditions determined by the Remuneration Committee prior to
the grant of an option. The current performance criteria is that,
over a three year period, the Company’s performance in respect of
earnings per share growth, must exceed the growth in the Retail
Price Index by an average of 2% per annum.
24 Country & Metropolitan PLC Annual Report & Accounts 2002
Directors’ Remuneration Report Aggregate emoluments - audited information
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company
granted to or held by the Directors. Details of the options are as follows:
At 31 At 31
August  August Exercise Expiry
Director Scheme 2001 Granted Exercised 2002 price date
S D Wicks 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 262,577 – – 262,577 64.55p 2003-2010
– 225,000 – 225,000 79.50p 2005-2012
D M Foster 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 185,314 – – 185,314 64.55p 2003-2010
–90,000 – 90,000 79.50p 2005-2012
N Malde 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 185,314 – – 185,314 64.55p 2003-2010
– 135,000 – 135,000 79.50p 2005-2012
The market price of the ordinary shares at 31 August 2002 was 100.5p and the range during the year was 60.5p to 109.5p.
Pensions - audited information
The Company operated a Group Stakeholder Plan which included
two Executive Directors, Mr D M Foster and Mr N Malde. Pension
contributions were made to a small self administered scheme for
Mr S D Wicks.
Pension contributions are based on basic salary only and do not
take account of bonuses and benefits in kind.
Pension contributions paid by the Company in respect of Executive
Directors are shown above.
Equity interests of the Directors in the Company
The beneficial interests of the Directors and of their families in the
issued ordinary shares of the Company were as follows:
Director At 31 At 31
August 2002 August 2001
D E Laing 405,102 405,102
S D Wicks 2,510,000 2,490,815
D M Foster 807,154 807,154
N Malde 683,693 683,693
J M Van Gelder 81,098 81,098
On 5 September 2002, Mr S D Wicks purchased 10,000 ordinary
shares in the Company.
DE Laing
Chairman - Remuneration Committee
28 November 2002
Country & Metropolitan PLC Annual Report & Accounts 2002 25
Directors’ Remuneration Report continued 2002 2001
Notes £’000 £’000
Turnover 1
Continuing operations 29,942 19,329
Acquisitions 2,348 –
32,290 19,329
Cost of sales (23,288) (12,874) 
Gross profit 9,002 6,455
Net operating expenses 4 (4,051) (2,886)
Share of profit of associated undertaking 120 122
Operating profit before goodwill amortisation 5,071 3,691
Goodwill amortisation (45) –
Operating profit
Continuing operations 4,834 3,691
Acquisitions 192 –
5,026 3,691
Profit on disposal of investment 5 1,058 –
Interest receivable and similar income 6 136 8
Interest payable and similar charges 7 (2,279) (1,491)
Profit on ordinary activities before taxation 8 3,941 2,208
Tax on profit on ordinary activities 9 (1,198) (682)
Profit for the financial period 2,743 1,526
Dividends 10 (549) (350)
Retained profit for the period 11 2,194 1,176 
Basic earnings per share - before goodwill amortisation 12 16.56p 12.35p
- after goodwill amortisation 12 16.29p 12.35p
Diluted earnings per share - before goodwill amortisation 12 16.36p 12.22p
- after goodwill amortisation 12 16.10p 12.22p
Dividend per share 10 2.75p 2.25p
Consolidated Statement of Total Recognised Gains & Losses for the year ended 31 August 2002
2002 2001
£’000 £’000
Profit for the financial year attributable to members of the Company 2,743 1,526
Unrealised surplus on revaluation of properties 385 –
Total recognised gains and losses for the year 3,128 1,526
Consolidated Note of Historical Cost Profits and Losses for the year ended 31 August 2002
2002 2001
£’000 £’000
Reported profit on ordinary activities before taxation 3,941 2,208
Realisation of property revaluation gains of previous years 23 352
Historical cost profit on ordinary activities before taxation 3,964 2,560
Historical cost profit for the year retained after taxation and dividends 2,217 1,528
26 Country & Metropolitan PLC Annual Report & Accounts 2002
Consolidated Profit & Loss Account for the year ended 31 August 2002 Group Company
2002 2001 2002 2001
Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible assets - goodwill 13 5,298 – – –
Tangible assets 14 15,521 13,020 299 351
Investments 15 387 36 15,779 44
21,206 13,056 16,078 395
Current assets
Stocks 17 31,938 19,534 – –
Debtors - amounts falling due after more than one year 18 50 50 – –
- amounts falling due within one year 18 15,666 9,117 11,495 9,467
Investments 19 – 6,586 – 6,586
Cash at bank and in hand 8,326 43 275 2
55,980 35,330 11,770 16,055
Creditors - amounts falling due within one year 20 (42,235) (29,771) (10,314) (6,416)
Net current assets 13,745 5,559 1,456 9,639
Total assets less current liabilities 34,951 18,615 17,534 10,034
Creditors - amounts falling due after more than one year 20 (15,532) (4,220) (5,891) (413)
Provision for liabilities and charges 23 (12) – – –
Net assets 19,407 14,395 11,643 9,621
Share capital and reserves
Called up share capital 25 189 167 189 167
Share premium account 26 9,940 7,529 9,940 7,530
Revaluation reserves 26 2,316 1,954 – –
Profit and loss account 26 6,962 4,745 1,514 1,924
Shareholders’ Funds
Equity interests 27 19,407 14,395 11,643 9,621
These accounts were approved by the Board of Directors on 28 November 2002 and signed on its behalf by:
S D Wicks - Chief Executive
N Malde - Finance Director
Country & Metropolitan PLC Annual Report & Accounts 2002 27
Balance Sheet as at 31 August 2002 2002 2001
Note £’000 £’000
Net cash inflow/(outflow) from operating activities 29 2,154 (11,511)
Returns on investments and servicing of finance
Interest received 17 9
Interest paid (1,977) (1,885)
Dividends received 164 162
Net cash outflow from returns on investments and servicing of finance (1,796) (1,714)
Taxation
Corporation tax paid (407) (272)
Capital expenditure and financial investment
Purchase of tangible fixed assets (382) (2,980)
Proceeds from sale of tangible fixed assets 203 2,376
Proceeds from sale of investments 7,842 353
Purchase of investments (559) (7)
Net cash inflow/(outflow) for capital expenditure and financial investment 7,104 (258)
Acquisitions and disposals
Acquisition of businesses and subsidiaries (11,065) –
Net cash balances acquired with subsidiaries 13,940 –
Net cash inflow from acquisitions and disposals 2,875 –
Equity dividends paid (371) (245)
Cash inflow/(outflow) before financing 9,559 (14,000)
Financing
Issue of ordinary share capital – 3,362
Repayment of short-term loans (unsecured) (25) –
New secured loans 1,900 3,772
Repayment of secured loans (3,796) (1,727)
Repayment of capital element of finance lease rentals (370) (194)
Repayment of loan stock (250) (250)
Bank loans received 15,078 13,195
Bank loans repaid (13,354) (4,818)
Net cash (outflow)/inflow from financing (817) 13,340
Increase/(decrease) in cash 30 8,742 (660)
28 Country & Metropolitan PLC Annual Report & Accounts 2002
Consolidated Cash Flow Statement for the year ended 31 August 2002 Accounting Policies
The principal accounting policies of the Group which have been
consistently applied in dealing with items which are considered
material in relation to the Group’s accounts are as follows:-
(a) Basis of accounting
The accounts have been prepared in accordance with
applicable accounting standards and under the historical cost
basis of accounting as modified by the revaluation of certain
fixed assets.
(b) Basis of consolidation
The Group accounts consolidate the accounts of the Company
and all its subsidiary undertakings from the date on which
control of each undertaking passes to the Group. Acquisitions are
accounted for under the acquisition method.
In accordance with Section 230 of the Companies Act 1985,
the Company has not presented a separate profit and loss
account.
Undertakings, other than subsidiary undertakings, in which the
Group has an investment representing not less than 20% of
the voting rights and over which it exerts significant influence
are treated as associated undertakings.  The Group accounts
include the appropriate share of these undertakings’ results.
(c) Turnover
Turnover comprises amounts receivable from house sales, the
total value of contracting work executed during the period,
amounts receivable and related fees from project
management services, proceeds from disposal of sites
assembled for resale, rental income and amounts invoiced by
the Group in respect of other services rendered during the
period excluding value added tax.
(d) Recognition of income on property activities
Disposals of properties are accounted for at the date of
exchange, where there is a legally binding, unconditional,
irrevocable contract and where completion takes place by the
date of approval of the accounts.
Where the Group undertakes developments with other
investors and profits are shared and paid by way of a
development fee, income is recognised when individual units
within the development are sold.
(e) Cost of letting new developments
All costs incurred in the initial letting of development
properties are capitalised.  Any subsequent costs expended on
re-letting the properties are charged to the profit and loss
account in the year they are incurred.
(f) Investments
Investments are valued at cost less provision for impairment
in value.
(g) Investment properties
Investment properties are stated at their open market value at the
balance sheet date.
Surpluses or deficits on individual properties are transferred to
the investment revaluation reserve, except that a deficit
which is expected to be permanent and which is in excess of
any previously recognised surplus over cost relating to the
same property, or the reversal of such a deficit, is charged (or
credited) to the profit and loss account.  Other deficits on
revaluation not expected to be permanent are taken to the
statement of total recognised gains and losses.
In accordance with SSAP 19, no depreciation or amortisation is
provided in respect of freehold and leasehold investment
properties where the unexpired term of the lease is more
than 20 years.  This treatment for certain of the Group’s
investment properties is a departure from the requirements of
the Companies Act 1985 concerning depreciation of fixed
assets.  However, these properties are not held for
consumption but for investment and the Directors consider
that systematic annual depreciation would be inappropriate.
The accounting policy adopted is therefore necessary for the
accounts to give a true and fair view.  Depreciation or
amortisation is only one of the factors reflected in the annual
valuation, and the amount which might otherwise have been
shown cannot be separately identified or quantified.
(h) Depreciation
Depreciation is provided to write off the cost or valuation less
the estimated residual value of tangible fixed assets on a
straight line basis over their useful economic lives at the
following annual rates:
Plant and equipment 25%
Furniture, fixtures and fittings 20% - 25%
Motor Vehicles 25%
Freehold land is not depreciated in the accounts of the Group.
The Directors consider that freehold properties are maintained
in such a state of repair that their residual value is at least
equal to their net book value.  As a result the corresponding
depreciation would not be material and therefore is not
charged in the profit and loss account. The Directors perform
annual impairment reviews in accordance with the
requirements of FRS15 and FRS11 to ensure that the carrying
value is not lower than the recoverable amount.
(i) Intangible assets - goodwill
Goodwill arising on the acquisition of subsidiary undertakings,
representing any excess of the fair value of the consideration
given over the fair value of the identifiable assets and
liabilities acquired, is capitalised and written off on a straight
line basis over its useful economic life. The useful economic
life of goodwill is assessed separately for each acquisition and
is currently 10 years. Provision is made for any impairment.
(j) Stocks and work in progress
Stocks and work in progress are stated at the lower of cost and
net realisable value.  Cost comprises all expenditure directly
related to development or land assembly projects.  Net
realisable value represents the Directors’ estimate of the net
proceeds receivable after taking account of market conditions
prevailing at the date of approval of the accounts.
Country & Metropolitan PLC Annual Report & Accounts 2002 29
Notes to the Accounts for the year ended 31 August 2002 30 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued
(k) Long term contracts
Profit on long term contracts is taken as the work is carried
out if the outcome can be assessed with reasonable certainty.
The profit included is calculated on a prudent basis to reflect
the proportion of the work carried out at the period end, by
recording turnover and related costs as contract activity
progresses.  Turnover is calculated by reference to valuation of
the work carried out to date.  Full provision is made for losses
on all contracts in the period in which they are first foreseen.
(l) Taxation
The charge for taxation is based on the result for the period,
which takes account of taxation deferred because of timing
differences between the treatment of certain items for
taxation purposes and the treatment under the Group’s
accounting policies.  The accounting policy in respect of
deferred tax for the year ended 31 August 2002 differs from
that used in prior years due to the adoption of Financial
Reporting Standard 19 “Deferred Taxation”. The effect of the
change in accounting policy on the profit reported in the prior
year was immaterial and accordingly no adjustment has been
made to the comparitive figures.
Deferred tax is provided for on a full provision basis on all
timing differences, which have arisen but not reversed at the
balance sheet date. No timing differnces are recognised in
respect of gains on sale of assets where those gains have
been rolled over into replacement assets. Deferred tax assets
are recognised to the extent that they are recoverable, that is,
on the basis of all available evdence, it is more likely than not
that there will be suitable taxable profits from which the
future reversal of the underlying timing differences can be
deducted. Any assets and liabilities recognised have not been
discounted.
(m)Leased assets
Fixed assets that are the subject of finance leases or hire
purchase contracts are capitalised and included in tangible
fixed assets.  The corresponding liability is included in
creditors.  The finance cost element of the lease or hire
purchase contracts is charged to the profit and loss account
over the period of the lease.
Expenditure on leases other than finance leases ("operating
leases") is charged to the profit and loss account in the period
it is incurred.
(n) Pensions
The Company operates a defined contribution pension scheme
and contributes into a small self administered scheme for one
of its directors.  Contributions payable for the period are
charged to the profit and loss account.
The Group also operates a defined benefit scheme. The
expected cost of providing pensions under this scheme, as
calculated periodically by professionally qualified actuaries, is
charged to the profit and loss account so as to spread the cost
over the service lives of employees in the scheme in such a
way that the pension cost is substantially level percentage of
current and expected future pensionable payroll.
(o) Treasury instruments
The Group uses interest rate swaps to manage financial risk.
Interest charges and financial liabilities are stated after taking
account of these swaps. 1. Turnover and segmental analysis
Turnover, gross profit and operating profit arose within the United Kingdom from continuing operations and are analysed as follows:
Continuing 2002 2001
operations Acquisitions Total Total
£’000 £’000 £’000 £’000
Turnover
Residential development 28,864 2,348 31,212 18,383
Rental income 1,078 – 1,078 946
29,942 2,348 32,290 19,329
Gross Profit
Residential development 7,480 602 8,082 5,769
Rental income 920 – 920 686
8,400 602 9,002 6,455
Net operating expenses (3,686) (365) (4,051) (2,886)
Share of profit of associated undertaking (residential development) 120 – 120 122
Operating profit before goodwill amortisation 4,834 237 5,071 3,691
Goodwill amortisation – (45) (45) –
Operating profit 4,834 192 5,026 3,691
Profit  on disposal of investment 1,058 –
Net interest (2,143) (1,483)
Profit on ordinary activities before taxation 3,941 2,208
Segment net assets:
Residential development 10,586 10,274 20,860 5,960
Rental income 6,130 – 6,130 7,848
16,716 10,274 26,990 13,808
Share of associates’ net assets 25 – 25 36
Unallocated net assets (7,608) 551
19,407 14,395
Country & Metropolitan PLC Annual Report & Accounts 2002 31
Notes to the Accounts for the year ended 31 August 2002 continued 2. Staff numbers and costs
The average number of persons (including Directors) employed by the Group during the year was as follows:
2002 2001
Number Number
Residential development 54 32
Property investment 9 9
63 41
The aggregate payroll cost of all employees, including Directors, was as follows:
2002 2001
£’000 £’000
Wages and salaries 2,362 1,489
Social security costs 257 171
Pension costs 118 82
2,737 1,742
3. Directors’ emoluments
2002 2001
£’000 £’000
Emoluments – as Executives 656 540
– as Fees 44 36
– Pension contributions (money purchase schemes – 3 Directors (2001: 3 Directors)) 76 48
The emoluments of the highest paid Director were:
Remuneration – salary and taxable benefits 272 221
Pension contributions to money purchase scheme 43 20
Details of Directors’ remuneration is contained in the Directors’ Remuneration Report on pages 24 to 25.
4. Net operating expenses
2002 2001
£’000 £’000
Administrative expenses 4,101 2,960
Profit on sale of tangible fixed assets (50) (55)
Profit on sale of fixed asset investments – (19)
4,051 2,886
5. Exceptional item reported after Operating profit
The profit on disposal of investment relates to the sale during the year of the Group’s interest in the ordinary share capital of Tay Homes PLC. 
6. Interest receivable and similar income
2002 2001
£’000 £’000
Other interest receivable and similar income 136 8
32 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 7. Interest payable and similar charges
2002 2001
£’000 £’000
On bank loans, overdrafts and other loans wholly repayable within five years 1,444 1,143
Other loans 549 285
Finance charges in respect of hire purchase contracts 25 24
Other finance charges 261 39
2,279 1,491
8. Profit on ordinary activities before taxation
2002 2001
£’000 £’000
The profit on ordinary activities before taxation is stated after charging:
Depreciation 205 168
Goodwill amortisation 45 –
Auditors’ remuneration – audit fees 40 28
– other services 26 21
Operating lease rentals – other assets 21 18
The auditors were also paid £125,000 in respect of their services for the acquisition of NorthCountry Homes Group Limited. This amount
was capitalised as part of the cost of investment.
9. Tax on profit on ordinary activities
2002 2001
£’000 £’000
Current tax:
UK Corporation Tax at 30% (2001: 30%)
Current year 1,190 645
Over provision in prior years (34) –
Associated undertakings 36 37
Total current tax (see Accounting Policies - (l) ) 1,192 682
Deferred tax:
Origination and reversal of timing differences 6 –
Total deferred tax (see Note 23) 6 –
Tax on profit on ordinary activities 1,198 682
The difference between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax
to the profit before tax is as follows:
2002 2001
£’000 £’000
Profit on ordinary activities before tax 3,941 2,208
Less: share of associate’s profit before tax (120) (122)
Profit on ordinary activities before tax 3,821 2,086
Tax on Group profit on ordinary activities at standard UK corporation tax rate of 30% (2001: 30%) 1,146 626
Effects of:
Expenses not deductible for tax purposes 19 19
Utilisation of tax losses – (9)
Unrelieved tax losses 9 –
Non taxable income (50) –
Other timing differences 66 9
Current tax charge for the period 1,190 645
The amount of deferred tax that has not been provided on revalued fixed assets is £592,000 (2001: £468,000). At present it is not
envisaged that any tax will become payable in the foreseeable future.
Country & Metropolitan PLC Annual Report & Accounts 2002 33
Notes to the Accounts for the year ended 31 August 2002 continued 10. Dividends
2002 2001
£’000 £’000
Interim equity dividend paid of 0.61p (2001: 0.55p) per ordinary share 145 67
Final equity dividend proposed of 2.14p (2001: 1.7p) per ordinary share 404 283
549 350
11. Retained profit for the year
2002 2001
£’000 £’000
The retained profit for the year is attributable to:
The Company (410) (442)
Subsidiary and associated undertakings 2,604 1,618
2,194 1,176
12. Earnings per share
The calculation of the basic and diluted earnings per share figures are based on the following:
2002 2001
£’000 £’000
Profit on ordinary activities after tax 2,743 1,526
Amortisation of goodwill 45 –
Profit on ordinary activities before goodwill amortisation and after tax 2,788 1,526
Weighted average number of shares in issue during the year used in 
the calculation of basic earnings per share 16,836 12,358
Dilutive effect of options treated as exercisable at the year end 206 132
Weighted average number of shares used in the calculation of diluted earnings per share 17,042 12,490
Basic earnings per share
- before goodwill amortisation 16.56p 12.35p
- after goodwill amortisation 16.29p 12.35p
Diluted earnings per share
- before goodwill amortisation 16.36p 12.22p
- after goodwill amortisation 16.10p 12.22p
The directors have disclosed both the basic and diluted earnings per share before amortisation of goodwill to demonstrate the underlying
performance of the business.
34 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 13. Intangible assets
The goodwill of £5,343,000 arising on the acquisition of NorthCountry Homes Group Limited has been capitalised in the consolidated
balance sheet in accordance with FRS10 (“Goodwill and Intangible Assets”) and is being amortised on a straight line basis over a period of
10 years.
Goodwill
Group £’000
Cost
At 1 September 2001 –
Additions 5,343
At 31 August 2002 5,343
Amortisation
At 1 September 2001 –
Charge for the year 45
At 31 August 2002 45
Net book value
At 31 August 2002 5,298
At 31 August 2001 –
14. Tangible assets
Furniture
Freehold Investment Plant & Fixtures & Motor
Property Properties Equipment Fittings Vehicles Total
Group £’000 £’000 £’000 £’000 £’000 £’000
Cost or valuation
At 31 August 2001 1,157 11,511 47 139 559 13,413
Additions 28 886 4 56 124 1,098
Assets acquired with subsidiaries 840 – 105 165 245 1,355
Revaluations 88 297 – – – 385
Transfers 346 (346) – – – –
Disposals – (115) – – (101) (216) 
At 31 August 2002 2,459 12,233 156 360 827 16,035
Depreciation
At 31 August 2001 – – 44 80 269 393
Charged in the year – – 5 45 155 205 
Disposals – – – – (84) (84) 
At 31 August 2002 – – 49 125 340 514
Net book value
At 31 August 2002 2,459 12,233 107 235 487 15,521
At 31 August 2001 1,157 11,511 3 59 290 13,020
At 31 August 2002, the Group’s freehold and investment properties were valued on an open market basis as follows:
2002 2001
£’000 £’000
Freehold properties 2,459 1,157
Investment properties 12,233 11,511
14,692 12,668
Country & Metropolitan PLC Annual Report & Accounts 2002 35
Notes to the Accounts for the year ended 31 August 2002 continued 14. Tangible assets continued
The freehold and investment properties were valued by the Directors.  At 31 August 2002, the investment properties were freehold and
long leasehold properties and were not depreciated.  Depreciation is only one of the factors reflected in the annual valuation and the
amount which might otherwise have been shown cannot be separately identified or quantified.  The figures for freehold and investment
properties (included above at valuation) determined in accordance with the historical cost basis of accounting are as follows:
2002 2001
£’000 £’000
Cost and net book value 12,301 10,664
The net book value of motor vehicles includes an amount of £474,000 (2001: £290,000) held under hire purchase contracts. The amount
of depreciation charged on these motor vehicles during the period amounted to £152,000 (2001: £140,000).
Furniture
Plant & Fixtures & Motor
Equipment Fittings Vehicles Total
Company £’000 £’000 £’000 £’000
Cost or valuation
At 31 August 2001 45 134 559 738
Additions –29 114 143 
Disposals –– (101) (101) 
At 31 August 2002 45 163 572 780
Depreciation
At 31 August 2001 42 76 269 387
Charged in the year 1 33 145 179 
Disposals –– (85) (85)
At 31 August 2002 43 109 329 481
Net book value
At 31 August 2002 2 54 243 299
At 31 August 2001 3 58 290 351
15. Investments held as fixed assets
Other Listed Associated
Investments Investments Undertakings Total
Group £’000 £’000 £’000 £’000
At 31 August 2001 – – 36 36
Additions 15 347 – 362
Share of loss retained by associated undertaking – – (11) (11)
At 31 August 2002 15 347 25 387
Other Listed Subsidiary Associated
Investments Investments Undertakings Undertaking Total
Company £’000 £’000 £’000 £’000 £’000
At 31 August 2001 – – 24 20 44
Additions 15 347 15,373 – 15,735
At 31 August 2002 15 347 15,397 20 15,779
The market value of listed investments at 31 August 2002 was £364,000 (2001: £Nil). The tax liability that would arise if these
investments were sold at this value would be approximately £5,000 (2001: £Nil).
36 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 15. Investments held as fixed assets continued
The Group’s subsidiary undertakings, all of which were wholly owned, were engaged in property activities (other than those shown below
as being dormant). Details of the Group’s principal subsidiary undertakings, all of which have been included in the consolidated accounts,
at 31 August 2002 were:
Country of
Class of Issued Registration Immediate
Subsidiary Undertaking Share Capital & Incorporation Holding Company
Country & Metropolitan Homes Plc Ordinary England Country & Metropolitan Plc
Country & Metropolitan Partnerships Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Developments Limited Ordinary England Country & Metropolitan Homes Plc
Country & Metropolitan Homes (Northern) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes Surrey Limited Ordinary England Country & Metropolitan Plc
Yorkdale Homes Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Midlands) Limited Ordinary England Country & Metropolitan Plc
St James Village Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Hertfordshire) Limited (Dormant) Ordinary England Country & Metropolitan Homes Plc
Hollowcharm Limited Ordinary England Country & Metropolitan Homes (Northern) Limited
Country & Metropolitan Homes (Rissington) Limited Ordinary England Country & Metropolitan Plc
Bredero Homes Limited Ordinary Scotland Country & Metropolitan Developments Limited
Country & Metropolitan Homes (Earlswood) Limited Ordinary England Country & Metropolitan Homes Plc
The Oaks and Elms Healthcare Company Limited (Dormant) Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Highlands) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Hitchin) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (North West) Limited Ordinary England Country & Metropolitan Plc
Straytime Limited Ordinary England Country & Metropolitan Plc
Bestshield Properties Limited Ordinary England Country & Metropolitan Homes Plc
Storey Homes (Lancaster) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Manchester) Limited Ordinary England Country & Metropolitan Homes Plc
Tannery Management Limited (Dormant) Ordinary England Country & Metropolitan Homes (Northern) Limited
Burnside Mills Development Limited Ordinary England Country & Metropolitan Homes (Northern) Limited
NorthCountry Homes Group Limited Ordinary England Country & Metropolitan Plc
Arundale Homes Limited Ordinary England NorthCountry Homes Group Limited
Broseley Homes Limited Ordinary England NorthCountry Homes Group Limited
Clarke Homes Limited Ordinary England NorthCountry Homes Group Limited
Pelham Construction Limited (Dormant) Ordinary England NorthCountry Homes Group Limited
Pelham Homes Lincoln Limited Ordinary England NorthCountry Homes Group Limited
Whelmar Homes Limited Ordinary England NorthCountry Homes Group Limited
The Company owns 1,350,000 ordinary shares of 1p each, being 50% of the issued share capital of its associated undertaking, Country &
Metropolitan VCT Limited. Country & Metropolitan VCT Limited is engaged in property development activities and is registered and
incorporated in England. The Group’s share of post acquisition retained profits of its associated undertaking at 31 August 2002 is £5,000
(2001: £16,000).
Country & Metropolitan PLC Annual Report & Accounts 2002 37
Notes to the Accounts for the year ended 31 August 2002 continued 16. Acquisition of subsidiary undertaking
On 1 August 2002, the Company acquired 100% of the issued share capital of NorthCountry Homes Group Limited (“NCH”) for a total
consideration of £15,373,000 (including costs). The consideration comprised of £10.2m in cash, the issue of 2,250,000 ordinary shares of
1p each in the Company at 109.5p per share, and a maximum earn out of £1.875m based on the future profits of NCH for the two years
ending 30 June 2004.
The acquisition has been accounted for using the acquisition method of accounting.
The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group:
Accounting Other
Book policy valuation
value alignment adjustments Fair value
£’000 £’000 £’000 £’000
Fixed assets
Tangible fixed assets 1,371 – – 1,371
Current assets
Stocks 15,330 (238) (33) 15,059
Debtors 945 832 – 1,777
Cash 13,940 – – 13,940
Total assets 31,586 594 (33) 32,147
Creditors
Bank loans (15,334) – – (15,334)
Trade and other creditors (5,514) (76) (85) (5,675)
Taxation (970) (138) – (1,108)
Total liabilities (21,818) (214) (85) (22,117)
Net assets 9,768 380 (118) 10,030
Goodwill 5,343
Total cost of assets acquired 15,373
Satisfied by: £’000
Cash 10,200
Shares issued 2,464
Deferred consideration 1,875
Costs 834
15,373
The book value of the assets and liabilities shown above has been taken from the management accounts of NCH at the date of
acquisition.
The accounting policy alignments, which align the accounting policies of the acquired group with those adopted by Country &
Metropolitan, relate principally to the capitalisation of design costs and other pre-development expenditure within work in progress and
the recognition of income on plots which have exchanged and where legal completion takes place by the date of approval of the
accounts.
The other valuation adjustments relate to the write down of work in progress following an assessment of its realisable value and to
provisions in respect of the funding deficit on the NCH defined benefit pension scheme.
The deferred consideration is an estimate and the actual amount will depend on the profits of NCH in the two years ending 30 June 2004
but is limited to a maximum of £1.875m.
As a consequence, the goodwill calculation is provisional and subject to the adjustment of this estimate.
38 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 16. Acquisition of subsidiary undertaking continued
Net cash outflows in respect of the acquisition comprised: 
£’000
Cash consideration including costs incurred (11,065)
Cash at bank and in hand acquired 13,940
2,875
The cash consideration includes costs incurred of £31,000 relating to the issue of shares which have been written off to the share
premium account.
NorthCountry Homes Group Limited earned a profit after taxation of £0.097m for the period from 1 July 2002 to 1 August 2002 (year
ended 30 June 2002: £3.550m). The summarised profit and loss account and statement of total recognised gains and losses for the
period from 1 July 2002 to 1 August 2002, shown on the basis of the accounting policies of NCH prior to the acquisition, are as follows:
£’000
Profit and loss account
Turnover 1,831
Cost of sales (1,319)
Gross profit 512
Net operating expenses (371)
Operating profit 141
Net finance charges (3)
Profit on ordinary activities before taxation 138
Tax on profit on ordinary activities (41)
Profit for the financial period 97
Statement of total recognised gains and losses
Profit for the financial period 97
Unrealised surplus on revaluation of freehold properties –
Total recognised gains relating to the financial period 97
17. Stocks
Group
2002 2001
£’000 £’000
Properties held for resale 306 179
Work in progress 15,397 9,886
Land, property held for development and options 16,235 9,469
31,938 19,534
All stocks were held by subsidiary undertakings.
Country & Metropolitan PLC Annual Report & Accounts 2002 39
Notes to the Accounts for the year ended 31 August 2002 continued 18. Debtors
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Trade debtors 2,195 1,116 – 5
Accounts recoverable on contracts 659 537 – –
Amounts owed by subsidiary undertakings – – 8,485 6,899
Other debtors 2,180 158 2,987 2,526
Prepayments and accrued income 10,682 7,356 23 37
15,716 9,167 11,495 9,467
Included in trade debtors is £50,000 (2001: £50,000) which is due after more than one year from a third party. 
During the year, Mr S D Wicks owed the Company a maximum amount of £8,855 and the maximum amount owed to him by the Company
was £17,818.
19. Current asset investments
Group and
Company
2002 2001
£’000 £’000
Listed investments – 6,586
Market value of listed investments – 6,594
Tax liability if they were sold at this value – –
20. Creditors 
Amounts falling due within one year
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Bank loans and overdrafts 19,962 16,438 59 3,775
Mortgage loans 1,907 2,235 – –
Other loans – 25 – –
10% Unsecured Loan Stock 2002 250 250 250 250
Obligations under hire purchase contracts 247 146 152 146
Trade creditors 6,802 2,775 533 273
Amounts owed to Group undertakings – – 6,041 738
Other creditors 5,575 4,122 1,880 87
Dividend payable 520 342 520 342
Other taxation and social security 756 224 584 213
Corporation tax payable 3,073 1,222 44 424
Accruals and deferred income 3,143 1,992 251 168
42,235 29,771 10,314 6,416
Amounts falling due after more than one year
Bank loans 15,247 2,149 5,796 –
Mortgage loans 91 1,658 – –
10% Unsecured Loan Stock 2002 – 250 – 250
Obligations under hire purchase contracts 194 163 95 163
15,532 4,220 5,891 413
40 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 21. Borrowings
a. The Company and 12 of its subsidiary undertakings have granted a debenture over their assets to secure the bank loans and overdrafts
b. The bank loans are also secured on properties of certain subsidiary undertakings. The bank loans and overdrafts attract interest at
varying rates. 
c. Mortgage loans are secured against some of the Group’s properties. Interest is charged at varying rates.  
d. The 10% Unsecured Loan Stock 2002 is required to be redeemed by 1 October 2002.
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Loans:
Not wholly repayable within five years, by instalments 2,681 4,024 – –
Wholly repayable within five years 34,709 18,454 6,046 4,275
37,390 22,478 6,046 4,275
Less: amount due within one year (22,052) (18,421) (250) (4,025)
Amounts due after more than one year 15,338 4,057 5,796 250
Instalments not due within five years 1,947 2,822 – –
Loans and overdrafts:
Amounts falling due:
In one year or less or on demand 22,119 18,948 250 4,025
Between one and two years 2,854 479 – 250
Between two and five years 7,448 772 5,796 –
In five years or more 5,036 2,806 – –
37,457 23,005 6,046 4,275
22. Financial instruments
The Financial Review on pages 18 to 19 includes an explanation of the role that financial instruments have had during the year in creating
or changing the risks the Group faces in its activities. The explanation summarises the objectives and policies for holding or issuing
financial instruments and similar contracts, and the strategy for achieving those objectives that have been followed during the year.
The numerical disclosures required by FRS13 are set out below.
Short term debtors together with short term creditors, and amounts due in respect of land, are excluded from the analysis.
The Group’s financial assets comprise fixed asset investments, long term debtors and cash at bank and in hand. For interest calculation
purposes there is an overall offset arrangement between cash at bank and bank loans and overdrafts. Long term debtor balances and fixed
asset investments are non-interest bearing.
The Group’s financial liabilities comprise bank and other borrowings and hire purchase creditors.
Country & Metropolitan PLC Annual Report & Accounts 2002 41
Notes to the Accounts for the year ended 31 August 2002 continued 22. Financial instruments continued
a) Interest rate risk
At 31 August 2002 the Group had total bank borrowing facilities of £52.4m, representing £35m committed facilities, £13.4m of term
loans and £4.0m of uncommitted facilities.
After taking into account interest rate swaps entered into by the Group, the interest rate profile of the Group’s financial liabilities, all
denominated in sterling was as follows:
2002 2001
£’000 £’000
Fixed rate 12,592 12,959
Floating rate 25,306 10,355
37,898 23,314
Floating rate liabilities relate to certain bank loans and bank overdrafts which attract interest at floating rates between 1.75% and
3.5% above the relevant bank’s base rate or in some cases LIBOR.
The fixed rate borrowings have a weighted average fixed rate of 8.55% (2001: 9.89%) and weighted average period to maturity of 
4.67 years (2001: 5.5 years).
The Company has entered into a £10 million 7 year interest rate swap fixing the base rate at 5.66%. The swap expires on 4 June 2008
but could be extended to 4 June 2011 at the bank’s option.
b) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 31 August 2002 is as follows:
2002 2001
£’000 £’000
Within one year or on demand 22,366 19,094
Between one and two years 3,007 596
Between two and five years 7,489 818
In more than five years 5,036 2,806
37,898 23,314
At 31 August 2002, the Group had undrawn committed borrowing facilities of £14.9m expiring between two and five years (2001:
£3.2m expiring within one year).
c) Fair values of financial assets and liabilities
In the opinion of the directors there is no material difference between the amounts at which the Group’s financial assets and liabilities
are included in the accounts and their fair values.
23. Provisions for liabilities and charges
Deferred tax 2002 2001
Group £’000 £’000
At 31 August 2001 – –
Provided in the year 6 –
Deferred tax liabilities acquired with subsidiaries 6 –
At 31 August 2002 12 –
As the Group has no intention to sell its freehold and investment properties it is not expected that the deferred tax liability will crystallise
in the foreseeable future. In accordance with FRS19, no provision has been made for deferred tax on gains on property revalued to its
market value.
Deferred tax provided in the accounts and the amounts not provided are as follows: 
Amounts provided Amounts not provided
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Accelerated capital allowances claimed 21 – – –
Unrelieved trading losses (9) • – –
Revaluation of freehold and investment properties – – 592 468
Total deferred tax liability 12 – 592 468
42 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 24. Analysis of hire purchase commitments
The maturity of obligations under hire purchase contracts are as follows:
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Due within one year 279 170 174 170
Due between two and five years 213 186 169 186
492 356 283 356
Less future finance charges (51) (47) (36) (47)
441 309 247 309
25. Called up share capital
2001 2000
£’000 £’000
Authorised:
25,750,000 ordinary shares of 1p each (2001: 23,500,000 ordinary shares of 1p each) 258 235
Allotted, called up and fully paid:
18,901,328 ordinary shares of 1p each (2001: 16,651,328 ordinary shares of 1p each) 189 167
On 1 August 2002, the Company allotted 2,250,000 ordinary shares with a nominal value of £22,500 in connection with the purchase of
entire issued share capital of NorthCountry Homes Group Limited.
Options have been granted under the Country & Metropolitan Group PLC 1999 Approved Share Option Scheme and Country & Metropolitan
Group PLC 1999 Unapproved Share Option Scheme to subscribe for ordinary shares of the Company as follows:
No. of Shares Subscription Exercise
Under Option Price per Share Period
772,627 64.55p 2003-2010
164,827 57.76p 2003-2010
520,000 79.50p 2005-2014
26. Movements on reserves
Freehold Investment
Share Property Property Profit
Premium Revaluation Revaluation And Loss
Account Reserve Reserve Account
Group £’000 £’000 £’000 £’000
At 31 August 2001 7,529 – 1,954 4,745
Premium on share issues after deducting share issue costs 2,411 – – –
Transfers – 196 (196) –
Retained profit for the year – – – 2,194
Unrealised revaluation surplus – 88 297 –
Realised revaluation surplus – – (23) 23
At 31 August 2002 9,940 284 2,032 6,962
Share Profit
Premium And Loss
Account Account
Company £’000 £’000
At 31 August 2001 7,529 1,924
Premium on share issues after deducting share issue costs 2,411 –
Retained profit for the period – (410)
At 31 August 2002 9,940 1,514
Country & Metropolitan PLC Annual Report & Accounts 2002 43
Notes to the Accounts for the year ended 31 August 2002 continued 27. Reconciliation of movements in shareholders’ funds
2002 2001
£’000 £’000
Profit for the financial period 2,743 1,526
Dividends (549) (350)
Retained profit for the period 2,194 1,176
Other recognised gains and losses relating to the period 385 –
New shares issued 2,433 3,513
5,012 4,689
Opening shareholders’ funds 14,395 9,706
Closing shareholders’ funds 19,407 14,395
28. Contingent liabilities
The Company, together with 12 other Group undertakings, have given a corporate guarantee to the lender in respect of the Group’s
committed bank facilities of £35m and term loans of £6m. The amount drawn down against these facilities at 31 August 2002 was £27m.
The Company has unconditionally and irrevocably guaranteed the observance and performance by its former subsidiary undertaking of all
the stipulations and obligations contained in a contract for the purchase of a site including the prompt payment in full of the sum of £3.7m
(2001: £4.1m).
The Company has given guarantees against mortgage loans amounting to £6.4m at 31 August 2002 (2001: £4.9m).
In 1996 an order was made against one of the subsidiary undertakings, Country & Metropolitan Homes Surrey Limited ("Surrey") for failure
to complete the sale of a property.  The order included the payment of damages and interest to be assessed by the court at a later
hearing. Damages and interest have not yet been assessed and during the year ended 31 August 2001 the claimant gave notice that it
intends to apply to the court for assessment of damages and interest. The Directors are not able to quantify the amount of damages and
interest as they have received insufficient details from the claimant. The Directors believe that the claimant will not recover substantial
damages for the amount of loss of bargain for failure to complete the sale of the property as the contractual price was the market value of
the property.
The Company has provided a maximum guarantee of £750,000 in relation to the obligations of Jacksons (Piccadilly Basin) Limited under a
land and development loan provided to that company. Country & Metropolitan Homes PLC has provided a maximum guarantee of £500,000
in relation to the obligations of Robinsons (Moseley) Limited under a land and development facility provided to that company. The Group is
developing and managing projects on behalf of Robinsons (Moseley) Limited and Jacksons (Piccadilly Basin) Limited, both of which are
unconnected to the Group.
There are performance bonds and other engagements, including those in respect of joint venture partners, undertaken in the ordinary
course of business from which it is anticipated that no material liabilities will arise.
In addition the Company and certain subsidiary undertakings are required from time to time to act as guarantor for the observance and
performance by fellow subsidiary undertakings of contracts entered into in the normal course of their business.
44 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued 29. Reconciliation of operating profit to net cash inflow
2002 2001
£’000 £’000
Reconciliation of operating profit to net cash inflow
Operating profit 5,026 3,691
Depreciation charge 206 168
Goodwill amortisation 45 0
Profit on disposal of fixed assets (50) (53)
Profit on disposal of fixed asset investments – (42)
Share of profit in associated undertaking (120) (122)
Decrease/(increase) in stocks and work in progress 2,263 (7,717)
Increase in debtors (4,400) (6,882)
Decrease in creditors (816) (554)
Net cash inflow from operating activities 2,154 (11,511)
30. Reconciliation of net cash flow to movement in net debt
2002 2001
£’000 £’000
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the year 8,742 (660)
Decrease/(increase) in debt and lease financing 660 (9,978)
Change in net debt resulting from cash flows 9,402 (10,638)
New finance lease contracts (176) (271)
Loans and finance leases acquired with subsidiaries (15,527) –
Movement in net debt in the year (6,301) (10,909)
Net debt as at 31 August 2001 (23,271) (12,362)
Net debt as at 31 August 2002 (29,572) (23,271)
Acquisitions
(excluding
At 31 August Cash cash and Other At 31 August
2001 flow overdrafts) changes 2002
£’000 £’000 £’000 £’000 £’000
Analysis of changes in net debt
Cash at bank and in hand 43 8,283 – – 8,326
Bank overdrafts (527) 460 – – (67)
(484) 8,743 – – 8,259
Debt due within one year (18,421) 7,245 (10,876) – (22,052)
Debt due after one year (4,057) (6,824) (4,457) – (15,338)
Finance lease contracts (309) 238 (194) (176) (441)
(23,271) 9,402 (15,527) (176) (29,572)
31. Operating lease committments
2002 2001
Land and buildings £’000 £’000
Expiring in under one year – 2
Expiring between two and five years 14 –
Expiring after five years 18 –
32 2
Country & Metropolitan PLC Annual Report & Accounts 2002 45
Notes to the Accounts for the year ended 31 August 2002 continued 46 Country & Metropolitan PLC Annual Report & Accounts 2002
Notes to the Accounts for the year ended 31 August 2002 continued
32. Pensions
The Company operates defined contribution pension schemes for some of its Directors and employees. The assets of the schemes are
held separately from those of the Company in independently administered funds. The contributions made during the period
amounted to £104,000 (2001: £82,000).
NorthCountry Homes Group Ltd (“NCH”) which has a financial year end of 30 June, operates a funded defined benefit pension
scheme. The assets are all held in separate trustee administered funds. The scheme is subject to triennial valuation by independent
actuaries using the projected unit method. The most recent valuation was conducted at 1 July 2001, assuming that the real valuation
rate of investment return would be 6.5% per annum and that the real rate of salary increases would average 5% per annum. The
rate of contribution by NCH is 12.9%. The contribution by NCH for the for the period from 1 August 2002 to 31 August 2002 was
£14,000, including £2,000 relating to death-in-service. 
The valuation at 1 July 2001 showed that the market value of the scheme assets amounted to £272,000 and the actuarial value of
these assets represented 88% of the benefits that had accrued to members. The actuarial valuation showed a deficit of £38,000 after
allowing for future increases in earnings. 
The valuation used for FRS 17 disclosures has been based on the most recent actuarial valuation at July 2001 and updated by Scottish
Life to take account of the requirements of FRS 17 in order to assess the liabilities of the scheme at 30 June 2002, the balance sheet
date of NCH. Scheme assets are stated at their market value at 30 June 2002. The financial assumptions used to calculate scheme
liabilities under FRS 17 are: 
Valuation method 30 June 30 June
2002 2001
Discount rate 5.7% 6.5%
Increase in pensionable salaries 5.0% 5.0%
Inflation assumption 3.0% 3.0%
Increase in pension in payment 3.0% 3.0%
The assets in the scheme and the expected rate of return were:
Long term Long term
expected 30 June expected 30 June
rate of 2002 rate of 2001 
return £’000 return £’000
Insurance policies 5.6% 385 5.6% 279
Total market value of assets 385 279
Present value of scheme liabilities (470) (351)
Deficit in the scheme (85) (72)
Related deferred tax asset 25 22
Net pension deficit (60) (50)
The full deficit of the NCH defined benefit scheme has been provided and reflected as a fair value adjustment on the acquisition 
of NCH.
FRS 17 requires more detailed disclosures. However, given the small nature of the scheme relative to the business, these are not
considered necessary.
33. Related Party Transactions
During the period the Group received development fees of £163,000 (2001: £156,000) from the associated undertaking, Country &
Metropolitan VCT Limited.
Mrs M Malde received fees totalling £15,000 for services provided in respect of arranging the Group’s internet service provider, email
systems, design, configuration, development and implementation of the Group’s website and associated maintenance services.  We have audited the accounts of Country and Metropolitan PLC for the year
ended 31 August 2002 on pages 26 to 46. These accounts have been
prepared under the historical cost convention as modified by the revaluation
of certain fixed assets and the accounting policies set out therein. We have
also audited the information in the Directors’ Remuneration Report that is
described as having been audited.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors’
Remuneration Report and the accounts in accordance with applicable law and
United Kingdom Accounting Standards are set out in the Statement of
Directors’ Responsibilities.
Our responsibility is to audit the accounts and the part of the Directors’
Remuneration Report to be audited in accordance with relevant legal and
regulatory requirements and United Kingdom Auditing Standards.
We report to you our opinion as to whether the accounts give a true and fair
view and whether the accounts and the part of the Directors’ Remuneration
Report to be audited 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 accounts, 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 the information specified by law
regarding directors’ remuneration and transactions with the company and
other members of the group is not disclosed.
We review whether the Corporate Governance Statement reflects the
company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules of the Financial Services
Authority, and we report if it does not. We are not required to consider
whether the board’s statements on internal control cover all risks and
controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures.
We read other information contained in the Annual Report and consider
whether it is consistent with the audited accounts.  This other information
comprises only the Financial Highlights, the Chairman’s Statement, the Chief
Executive’s Review, the Operational Review, the Financial Review, the
Directors’ Report, the Corporate Governance Statements and the unaudited
part of the Directors’ Remuneration Report. We consider the implications for
our report if we become aware of any apparent misstatements or material
inconsistencies with the accounts.  Our responsibilities do not extend to any
other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing
Standards issued by the Auditing Practices Board.  An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the accounts and the part of the Directors’ Remuneration Report
to be audited.  It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the accounts, and of
whether the accounting policies are appropriate to the Company’s and the
Group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the accounts and the
part of the Directors’ Remuneration Report to be audited 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 accounts and the part of the Directors’
Remuneration Report to be audited.
We do not, in giving our opinion, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or in
whose hands it may come save where expressly agreed by our prior consent
in writing.
Opinion
In our opinion:
• the accounts give a true and fair view of the state of affairs of the
Company and the Group as at 31 August 2002 and of the profit of the
Group for the year then ended; and
• the accounts and the part of the Directors’ Remuneration Report to be
audited have been properly prepared in accordance with the Companies
Act 1985.
Nexia Audit Limited
Chartered Accountants
Registered Auditors
1 Riding House Street
London
W1A 3AS
28 November 2002
Country & Metropolitan PLC Annual Report & Accounts 2002 47
Report of the Auditors  Independent auditors’ report to the shareholders of Country & Metropolitan PLC NOTICE is hereby given that the ANNUAL GENERAL MEETING of Country &
Metropolitan PLC will be held at Harefield House, High Street, Harefield,
Middlesex, UB9 6RH on 27 February 2003 at 11.00am for the following
purposes:-
Ordinary Business 
I. To receive and adopt the Directors’ Report and the Accounts for the
year ended 31 August 2002 together with the Auditors' Report. 
2. To declare a final dividend for the year ended 31 August 2002.
3. To re-appoint Mr D M Foster as a Director being a director retiring by
rotation in accordance with the Company's Articles of Association.
4. To re-appoint Nexia Audit Limited as the auditors to hold office from
the conclusion of this Meeting until the conclusion of the next General
Meeting at which accounts are laid before the Company at a
remuneration to be fixed by the Directors. 
Special Business 
To consider and, if thought fit, to pass the Resolution set out below as
Ordinary or Special Resolutions:
Ordinary Resolution
5. (a) THAT the Directors be and are hereby generally and unconditionally
authorised for the purposes of Section 80 of the Companies Act 1985
("the Act") to exercise all the powers of the Company to allot grant
options over, alter or otherwise deal with or dispose of any relevant
securities (as defined in Section 80(2) of the Act) to such persons, at
such times and generally on such terms and conditions as the Directors
may determine during the period commencing on the date of the
passing of this Resolution and expiring unless previously renewed,
revoked or varied by the Company in general meeting on the date of
the next Annual General Meeting of the Company and so that all
previous unexercised authorities of the Directors pursuant to Section 80
of the Act be and are hereby revoked PROVIDED THAT the nominal
value of relevant securities allotted pursuant to this authority shall not
exceed an aggregate nominal amount of £77,579.
(b) THAT the Directors be entitled under the authority conferred by Section
80(7) of the Act and paragraph (a) of this Resolution to make at any
time prior to the expiry of such authority any offer or agreement which
would or might require relevant securities of the Company to be
allotted after the expiry of such authority. 
Special Resolutions
THAT subject to passing of Resolution 5 above the Directors be and are hereby
empowered pursuant to Section 95 of the Act to allot or make offers or
agreements to allot equity securities (as defined in Section 94 of the Act) of
the Company as if Section 89(1) of the Act did not apply to such allotment
PROVIDED THAT this power shall be limited to:
6 (a) The allotment for cash of Equity Securities in connection with a rights
issue, open offer or other issue in favour of Ordinary Shareholders and
holders of any other Shares or Securities of the Company that by their
terms are entitled to participate in such issue or offer where the equity
securities respectively attributable to the interests of all Ordinary
Shareholders and such holders are proportionate (as nearly as may be)
to the respective numbers of Ordinary Shares held by them or into
which their Shares or Securities are to be deemed converted in
calculating the extent of their participation but subject to such
exclusions or other arrangements as the Directors may deem necessary
or expedient to deal with fractional entitlements or legal or practical
problems arising in connection with the laws of, or requirements of,
any recognised regulatory body or stock exchange in any territory and
(b) The allotment (otherwise than pursuant to sub-paragraph (a)) of Equity
Securities and whether for cash on in exchange for other securities up
to an aggregate nominal value of £18,901.
AND so that the power hereby granted shall be exercisable during the period
commencing on the date of the passing of this Resolution and ending unless
previously renewed, revoked or varied by the Company in general meeting at
the close of business on the date of the next Annual General Meeting of the
Company save that the Directors may before the expiry of the period referred
to in this Resolution make an offer or agreement which would or might
require Equity Securities to be allotted after such expiry and the Directors may 
allot Equity Securities in pursuance of such offer or agreement as if the power
conferred hereby had not expired and provided that any authority to allot
shall be in substitution for and supercede or revoke any earlier such authority
conferred on the Directors to the extent unutilized.
7. That the Company be and is hereby generally and unconditionally
authorised to make one or more market purchases (within the
meaning of section 163(3) of the Companies Act 1985) on the London
Stock Exchange Limited ("the Stock Exchange") of Ordinary shares of 1p
each in the capital of the Company ("Ordinary Shares") provided that:- 
(a) the maximum aggregate number of Ordinary Shares hereby authorised
to be purchased is 1,890,132 (representing 10 per cent. of the
Company's issued Ordinary Share capital); 
(b) the minimum price which may be paid for such Ordinary Shares is 1p
per share (exclusive of any tax or expenses); 
(c) the maximum price (exclusive of any tax or expenses) which may be
paid for an Ordinary Share is not more than 5 per cent. above the
average of the market values for an Ordinary Share as derived from the
Stock Exchange Daily Official List for the five business days immediately
preceding the day on which the Ordinary Share is purchased; 
(d) unless previously revoked or varied, the authority hereby conferred
shall expire at the conclusion of the next annual general meeting of
the Company to be held in 2004 or within 12 months from the date of
passing this resolution, whichever shall be the earlier; and 
(e) the Company may make a contract or contracts to purchase Ordinary
Shares under the authority hereby conferred prior to the expiry of such
authority which will or may be executed wholly or partly after the
expiry of such authority, and may make a purchase of Ordinary Shares
in pursuance of any such contract or contracts. 
By order of the Board
N Malde FCA 
Secretary
Registered Office:
Harefield House 
High Street  Harefield
Middlesex  UB9 6RH 
27 January 2003
Notes: 
(i) A Member entitled to attend and vote at the Meeting convened by this
Notice is  entitled to appoint one or more proxies to attend and, on a
poll, to vote in his or her stead. A proxy need not be a Member of the
Company. The appointment of a proxy will not preclude a Member
from being present at the Meeting and voting in person if he or she
should subsequently decide to do so. 
(ii) To be valid, forms of proxy must be lodged with the Company's
Registrars, Capita IRG, not later than 48 hours before the time
appointed for the holding of the Meeting. 
(iii) The following documents will be available for inspection at the
Company's registered office during normal business hours on any
weekday (Saturdays and public holidays excepted) from the date of
this Notice until the date of the Annual General Meeting and at the
place of the Annual General Meeting for 15 minutes prior to and during
the Meeting. 
(a) the register of Directors' interests in the ordinary shares of the
Company kept in accordance with Section 325 of the Companies Act
1985. 
(b) a copy of the Memorandum and Articles of Association of the Company. 
(c) copies of all service contracts of the Directors with the Company.
48 Country & Metropolitan PLC Annual Report & Accounts 2002
Notice of Annual General Meeting  Designed & Produced in the EC by Rede Design Limited